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

Saturday, July 14, 2018

week ending Jul 14

 Fed's Underlying Inflation Gauge Warns Of Imminent Inflation Surge - As if inflation wasn't "mysterious" enough to the Fed already, recently the New York Fed joined the Atlanta Fed in releasing its own measure to track underlying inflation called, simply, the Underlying Inflation Gauge. What is notable is that this latest inflation tracker shows prices behaving quite differently from traditional indexes this year.According to the UIG's August measure, broad inflation came in at a red hot 3.27%, the highest since September 2005. That compares with just 2.8% annual inflation according to the Labor Department’s CPI and an even more modest 2.0% as measured by the preferred PCE gauge of Fed policy makers. Why the gap? Because the full data UIG incorporates dozens of additional variables outside of prices, including the unemployment rate, stock prices, bond yields and purchasing managers’ indexes. Furthermore, if Dudley is right, and there is structural disinflation going on, then the UIG would be much higher using a ‘traditional’ supply curve. Here, as Citi cynically noted recently, "structural disinflation is far from permanent, as the Mayor of London’s latest regulatory action illustrated very clearly. Anti-trust or other regulatory measures can end the new supply paradigm at any time."Additionally, a lot of the disinflation in the New Economy may have been a function of high G10 unemployment, and urbanization in China: both of which have now ended as drivers of disinflation.  But what is most troubling is that when one overlays the Underlying Inflation Gauge with core CPI, with a 15 month lead for the former, what emerges is the following troubling chart: it shows that all else equal, core CPI is set to spike in the coming months, and from its current level, is set to rise as high as 2.8%, matching the highest print since 2006 when the Fed Funds rate was around 5%, and a level which not even the Fed's latest "symmetric" mandate would be able to ignore, forcing Jay Powell to tighten even more aggressively over the coming year.

With this Inflation, What Will the Fed Do? -- Wolf Richter - “In June, most of the rise in the index for final demand is attributable to a 0.4-percent advance in prices for final demand services,” said the Bureau of Labor Statistics in the release of its Producer Price Index data. The PPI and its numerous sub-indices measure inflation further up in the pipeline before it filters through to consumer prices. Services account for 65.3% (“relative importance”) of the PPI. Energy prices soared, but they account for only 5.6% of the PPI. In the overall picture, services matter the most. The PPI for “final demand” (as opposed to “intermediate demand,” which is further up the pipeline) jumped 3.4% in June compared to a year ago, the largest year-over-year increase since November 2011. This measure includes goods and services: The PPI for final demand energy jumped 17.2% in June compared to a year ago. Note the deep plunge of the index during the Oil Bust. But for consumers, this was a “transitory” relief, to rephrase Yellen: The PPI for final demand goods — includes energy but excludes services and has a relative importance of 33% — rose 4.3% from a year ago. May (+4.4%) and June marked the sharpest increases since December 2011: The PPI final demand for goods without food and energy, which has a relative importance of 21.7%, rose 2.6% from a year ago, the largest year-over-year increase since March 2012: Over the past few months, even the PPI for final demand services has begun to move higher. Due to its relative importance in the index of 65.3%, it matters! It jumped 0.4% from May to June and is now up 2.8% year-over-year. This and the March increase of 2.9% are the largest year-over-year increases in this data series going back to 2011: 

Why I’m not paying too much attention to the flattening yield curve. - Jared Bernstein - As Nick Timiraos ably describes, there’s a debate afoot about how seriously to take the flattening and possible future inversion of the yield curve. I got into this a bit last week, pointing out that the signal from the yield curve is a lot more ambiguous than usual (my conclusion was that we should worry a lot more about how we’re going to offset the next recession versus when it’s coming, which is not reliably knowable).  One reason for this ambiguity is the very low term premium on long-term bond yields (see figure). Longer-term interest rates, like the yield on the 10-year Treasury, can be broken up into the expectation of the average of future short-term rates and the term premium, or the extra yield investors require to lock up their money for the term of the loan. Since it’s thought to be the first part — expected rates — that correlates with future downturns, it makes sense to net out the term premium from the model. As the next figure shows, that significantly lowers the curve recession probability (see these Fed papers for details). As economist David Mericle recently put it, low term premia imply that “an inversion…no longer signals that current interest rates are nearly as far above expected average future short rates as in the past.”But for this quick post, I want to get a bit more into what an inversion might mean for Fed policy. Would recessionary signals from an inversion lead them to pause in their rate hike campaign? I doubt it, and agree with Jan Hatzius: “…yield curve inversion does not cause recession, but is merely indicative of the types of conditions (i.e. overheating) that are often followed by recession.

Investment and Recessions - Bill Mcbride - A long, long, long time ago - almost twelve years ago - I wrote Investment and Recessions, explaining the usefulness of New Home Sales as a leading indicator.Here are some updated graphs. My view is new home sales and housing starts are two of the best leading indicators for the economy (but not always).
The first graph shows the change in real GDP and Private Fixed Investment over the preceding four quarters, shaded areas are recessions. (Source: BEA) A couple of observations:
1) Since 1948, private fixed investment has fallen during every economic recession.
2) Private fixed investment has fallen 14 times since 1948, with only 11 recessions.
So what happened during the periods around 1951, 1967 and 1986 to keep the economy out of recession? These are the periods when private investment fell, but the economy didn't slide into recession. The answer is generally the same for all three periods: a surge in defense spending. The defense spending in the early '50s was due to the Korean war, in the mid '60s the Vietnam war, and in the mid '80s a general defense build-up helped offset a small decline in private investment. The mid '80s also saw a surge in MEW (mortgage equity withdrawal) that also contributed to GDP growth.The second graph shows the separation of private fixed investment into residential and nonresidential components. This graph shows something very interesting: in general, residential investment leads nonresidential investment. There are periods when this observation doesn't hold - like '95 when residential investment fell and the growth of nonresidential investment remained strong. Another interesting period was 2001 when nonresidential investment fell significantly more than residential investment. Obviously the fall in nonresidential investment was related to the bursting of the stock market bubble. But the most useful information is that typically recessions are preceded by declines in residential investment. Maybe we can use that information. BKFSThe third graph shows the YoY change in New Home Sales from the Census Bureau. Note: the New Home Sales data is smoothed using a three month centered average before calculating the YoY change. The Census Bureau data starts in 1963.

Q2 GDP Forecasts --From Merrill Lynch: We continue to track 3.8% qoq saar for 2Q. [July 13 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 3.9 percent on July 11, up from 3.8 percent on July 6. [July 11 estimate] From the NY Fed Nowcasting ReportThe New York Fed Staff Nowcast stands at 2.8% for 2018:Q2 and 2.6% for 2018:Q3. [July 13 estimate]  CR Note: These estimates suggest real annualized GDP in the 2.8% to 3.9% range in Q2.

US Q2 Growth Set To Accelerate As Trade-War Risk Lurks - The trade war that appears to be escalating may bring headwinds in the second half of the year, but second-quarter US GDP growth remains on track to accelerate, based on several forecasts compiled by The Capital Spectator. The current median projection calls for real GDP growth in Q2 to rise 3.1% (seasonally adjusted annual rate) – a solid improvement over Q1’s modest 2.0% increase. The Bureau of Economic Analysis is scheduled to publish its initial GDP report for the second-quarter in two weeks (July 27). Uncertainty about rising trade tensions between the US and China (Europe, too) is a risk factor that could trim economic activity going forward. At the moment, prospects for easing this risk aren’t encouraging. US Treasury Secretary Steven Mnuchin this week told Congress that talks with Beijing had “broken down” and the US was essentially waiting for China to offer concessions — a development that some analysts say is unlikely.Several members of Congress expressed concern about the Trump administration’s plan (or the lack thereof) for trade negotiations. “The administration needs to explain to Congress where this is all headed,” advised Senator Bob Corker, Republican of Tennessee and chairman of the Senate Foreign Relations Committee.  “To my knowledge, not a single person is able to articulate where this is headed, nor what the plans are, nor what the strategy is.”Federal Reserve Chairman Jerome Powell is also cautious about how the process plays out. Although he’s optimistic about the current state of the economy, “We are hearing a rising level of concern about the effects of changes in trade policy,” he said in an interview on American Public Media’s “Marketplace” program, Bloomberg reported. “I think this process that is going on now is a new one. It’s very difficult to predict how it turns out and we’ll just have to see.”The ambiguity raises questions about the economic outlook in the second half and beyond, but the official numbers for Q2 look set to deliver upbeat results. Some estimates for the second quarter exceed 4.0%.’s revised assessment, published earlier today, is a strong 4.2% (green bar in chart below). If correct, the US economy will post the fastest growth rate in nearly four years. Although some estimates call for a lesser gain, the common theme is an expectation that Q2 output will accelerate, perhaps dramatically. The Wall Street Journal’s new survey of economists for July, for instance, reflects a median forecast of 4.1% growth.

Rising gas prices raise concerns for US economy - The highest retail gasoline prices in years are the latest development to raise concerns about one of the longest-running U.S. economic expansions on record.Drivers across the U.S. in May paid as much as $2.96 a gallon on average, the most since 2014. Prices have climbed to $3.63 in California and $3.39 in Washington, states where prices tend to be higher because of factors such as higher taxes, environmental regulations and a lack of pipelines that transport oil west. As of Monday, the national average was $2.86 a gallon. With wages in the U.S. climbing, Americans have so far been able to weather the higher prices. But analysts say that if average gas prices hit $3.50 or even $4 a gallon as global oil prices rise, that could dent growth by eating into disposable income and spending.Some analysts say the recent run-up hasn’t pinched Americans too much. Drivers aren’t yet reshuffling plans or changing their habits.But U.S. airlines have already increased ticket prices, and over time higher energy and manufacturing costs can eat into company profits, slowing hiring. Industrial giant 3M Co.and appliance maker Whirlpool Corpare among those that have cited higher material costs as challenges. And despite improved incomes, consumers boosted spending only modestly in May, undershooting expectations.The U.S. economy has entered its 10th year of expansion, one of the longest on record, but a Wall Street Journal survey shows that a majority of economists think a recession could come in 2020. Rising energy prices can also feed into inflation, which could prompt the Federal Reserve to raise interest rates more aggressively. The central bank has increased interest rates two times this year, and is expected to raise rates another two times. Inflation data for June are due Thursday morning: The consumer-price index reflects the costs of everything Americans pay for, including gasoline.“People are on the lookout for a downturn,” said Joseph LaVorgna, chief economist for the Americas at Natixis . “Tight monetary policy combined with rising energy costs is typically not a good development for U.S. households.”

US Budget Deficit Hits $607 Billion In 9 Months, As Spending On Interest Explodes The US is starting to admit that it has a spending problem. According to the latest Monthly Treasury Statement, in June, the US collected $316BN in receipts - consisting of $162BN in individual income tax, $94BN in social security and payroll tax, $3BN in corporate tax and $22BN in other taxes and duties- a drop of 6.6% from the $338.7BN collected last June and a reversal from the recent increasing trend... ... even as Federal spending also dipped, down 8.8% from $428.9BN last June to $391.1BN last month. ... where the money was spent on social security ($88BN), defense ($65BN), Medicare ($79BN), Interest on Debt ($32BN), and Other ($126BN). This resulted in a June budget deficit of $75 billion, better than the consensus estimate of $98BN, and an improvement from the $147 billion deficit in May and as well as slightly less than the deficit of $90.2 billion recorded in June of 2017. This was the second biggest June budget deficit since the financial crisis. The June deficit brought the cumulative 2018F budget deficit to over $607BN during the first nine month of the fiscal year, up 16% over the past year; as a reminder the deficit is expect to increase further amid the tax and spending measures, and rise above $1 trillion. Most Wall Street firms forecast a deficit for fiscal 2018 of about $850 billion, at which point things get... worse. As we showed In a recent report, CBO has also significantly raised its deficit projection over the 2018-2028 period. But while out of control government spending is clearly a concern, an even bigger problem is what happens to not only the US debt, which recently surpassed $21 trillion, but to the interest on that debt, in a time of rising interest rates. As the following chart shows, US government Interest Payments are already rising rapidly, and just hit an all time high in Q1 2018. Interest costs are increasing due to three factors: an increase in the amount of outstanding debt, higher interest rates and higher inflation. A rise in the inflation rate boosts the upward adjustment to the principal of TIPS, increasing the amount of debt on which the Treasury pays interest. For fiscal 2018 to-date, TIPS’ principal has been increased by boosted by $25.8 billion, an increase of 54.9% over the comparable period in 2017.

North Korea: US is making ‘gangster-like’ demands on denuclearisation -- North Korea has accused the US of using "gangster-like" tactics to push it towards nuclear disarmament after a fresh round of high-level talks. It branded the US attitude at the meeting as "extremely troubling". The statement, by an unnamed foreign ministry official, gave a starkly different account from one provided by US Secretary of State Mike Pompeo just hours before. He had said progress was made during his two-day visit to Pyongyang. It is the first time he has visited North Korea since a summit between Donald Trump and Kim Jong-un in Singapore. The leader's meeting ended with a promise from Mr Kim to work towards denuclearisation, but details on how this will be achieved remain thin. A key aim of Mr Pompeo during his visit was to firm up North Korea's commitment to disarmament. But the North Korean statement, carried by the official KCNA news agency, said the US had gone against the spirit of the summit by putting unilateral pressure on the country to abandon its nuclear weapons. "We had anticipated the US side would come with a constructive idea, thinking we would take something in return," the North Korean statement said, warning its "resolve for denuclearisation... may falter". "The US is fatally mistaken if it went to the extent of regarding that [North Korea] would be compelled to accept, out of its patience, demands reflecting its gangster-like mindset," it added. At the talks, Mr Pompeo did not meet with Mr Kim, but instead with Kim Yong-chol, who is seen as his right-hand man. In his assessment Mr Pompeo gave little away, but he said they had discussed at length a timeline for disarmament, including the destruction of a missile engine testing facility. "These are complicated issues, but we made progress on almost all of the central issues, some places a great deal of progress, other places there's still more work to be done," he said. 

North Korea slams ‘gangster-like’ U.S. demands after satisfied Pompeo leaves (Reuters) - North Korea accused the United States on Saturday of making “gangster-like” demands in talks over its nuclear program, contradicting U.S. Secretary of State Mike Pompeo hours after he left saying the old enemies had made progress on key issues. During a day and a half of talks in Pyongyang, Pompeo had sought to hammer out details on how to dismantle North Korea’s nuclear programs, including a timeline. As he departed, he said he had made progress on “almost all of the central issues,” although work remained to be done. Hours later, Pyongyang gave a much more negative assessment, saying Washington had broken the spirit of last month’s summit between U.S. President Donald Trump and North Korean leader Kim Jong Un. “The U.S. side came up only with its unilateral and gangster-like demand for denuclearization,” a North Korean foreign ministry spokesman said in a statement carried by the official KCNA news agency. He said Pompeo’s delegation insisted on unilateral complete, verifiable and irreversible denuclearization, known as CVID. He argued instead for both sides to take a series of simultaneous steps as a “shortcut” to a nuclear-free Korean peninsula. “The high-level talks this time brought us in a dangerous situation where we may be shaken in our unshakable will for denuclearization, rather than consolidating trust between the DPRK and the U.S.” There was no immediate comment on the KCNA statement from the State Department or the White House. The contrasting comments raised questions over whether North Korea is committed to abandoning the nuclear programs it has developed for decades and has seen as key to its survival. 

"I Was There, I Know What Took Place": Pompeo Slams North Korea Criticism Of Denuclearization - U.S. Secretary of State Michael Pompeo hit back at a harshly worded North Korean statement which called the United States "gangster-like" and "cancerous" while insisting that Pyongyang would not accept U.S. demands to fully denuclearize before the isolated regime receives sanctions relief. “The US is fatally mistaken if it went to the extent of regarding that the [Democratic People’s Republic of Korea] would be compelled to accept, out of its patience, the demands reflecting its gangster-like mindset,” Pyongyang warned. Pompeo brushed off North Korea's statement, according to Bloomberg - insisting that Kim Jong Un hasn't backed off a commitment to give up his nuclear weapons“I was there for the event, I know actually what precisely took place,” Pompeo told reporters in Tokyo Sunday, after traveling there to meet with Japanese Foreign Minister Taro Kono and South Korean Foreign Minister Kang Kyung-wha after two days of talks with a top aide to Kim in Pyongyang. “When we spoke to them about the scope of denuclearization, they did not push back,” said Pompeo, adding "North Korea reaffirmed its commitment to complete denuclearization." North Korea also reinforced earlier promises "to destroy its missile engine test site," sad Pompeo, while the officials in Tokyo discussed the what full denuclearization entails - adding "There will be a verification connected to the complete denuclearization."

Pyongyang Talks – How Pompeo Put The Cart Before The Horse - U.S. Secretary of State Pompeo just visited North Korea to further the agenda President Trump and Chairmen Kim had agreed upon in Singapore. The visit did not go well:. Whether Pompeo somehow annoyed his counterpart, or pressed too hard, or whether the North Koreans are simply reverting to their hot-and-cold tactics, is hard to say. But the regime made sure to have the final word, and it was not pleasant. As he was leaving, Pompeo told reporters the conversations were “productive and in good faith.” Hours later North Korean state media issued a statement that did not mention him by name but called the demands he presented “gangster-like.” The Trump administration has long set out its goal as CVID, the "Complete, Verifiable and Irreversible Dismantlement" of North Korea nuclear weapons program. After applying "maximum pressure" on North Korea through international sanctions, the U.S. believed that long planned steps North Korea took to start talks with its adversaries were already the total surrender it was hoping for. Somehow the people became convinced that North Korea would give up its nuclear weapons. From a Washington Post story: Amid increasing scrutiny of North Korea's commitment to giving up its weapons, Pompeo came to Pyongyang in a bid to hammer out the details of a denuclearization plan. While the secretary told reporters that progress was made "on almost all of the central issues” and involved “good-faith negotiations,” North Korea said the U.S. attitude, demanding denuclearization, was “regrettable.” "North Korea's commitment to giving up its weapons" is presented as a matter of fact in the U.S. media. However, North Korea never made such a commitment. The declarations it agreed to set out denuclearization as an aspiration goal that will be worked on only after the normalization of economic and military relations and after a peace treaty has been agreed on or signed. The record on that is clear.

Pompeo's North Korea meeting went 'as badly as it could have gone' - It began with great expectations, an eagerly-anticipated meeting with a reclusive leader, and a gift bag that included an Elton John CD. It ended with a scuttled rendezvous, statements declaring disappointment and stalemate.  Secretary of State Mike Pompeo's overnight visit to Pyongyang last week failed to demonstrate any progress on denuclearization talks, leading one source with knowledge of the discussions to say the White House felt it went "as badly as it could have gone." "The North Koreans were just messing around, not serious about moving forward," the source told CNN's Michelle Kosinski, adding that Pompeo had been promised a meeting with North Korea's Kim Jong Un, and so not getting that meeting sent a big message. "By now it's abundantly clear that this approach is a dead end," said Adam Mount, a senior fellow and director of the Defense Posture Project at the Federation of American Scientists, where he covers US nuclear strategy, deterrence and North Korea.  "The White House has essentially tried to shoot for the moon and total disarmament, and it's clear that North Korea is not only not willing to do that, but sees very little reason to take steps in that direction," he told CNN.

Trump confirms he plans to give Kim Jong Un a copy of 'Rocket Man' CD --It didn't take a long, long time for President Donald Trump to start bestowing gifts on North Korean leader Kim Jong Un. The President of the United States confirmed on Tuesday morning that he plans to give a copy of the Elton John hit song "Rocket Man" to the dictator of North Korea, who he met with during a summit in Singapore last month to discuss denuclearization."They didn't give it, I have it for him, they didn't give it, but it will be given at a certain time," Trump said when asked about the CD during a gaggle outside the White House Tuesday morning before departing for the NATO summit.  "I actually do have a little gift for him, but you'll find out what that gift is when I give it," he added. Secretary of State Mike Pompeo was in North Korea last week and took along a copy of the British singer's CD with the "Rocket Man" song that Trump had signed, but Pompeo did not meet with Kim this time around so he brought the gifts back to the President.  A source with knowledge of the discussions between Pompeo and North Korea said the feeling at the White House was the trip went "as badly as it could have gone." The source added, "The North Koreans were just messing around, not serious about moving forward." The source said Pompeo‎ had been promised a meeting with Kim Jong Un, so not getting one sent a big message. The goal of Pompeo's latest trip to Pyongyang was to negotiate the details of the nuclear agreement Trump signed along with Kim. North Korea criticized Pompeo's"gangster-like" demands in negotiations and said the "attitude" of the US was "regrettable," while Pompeo signaled "progress" in the talks between the two nations. Trump had started calling Kim "Little Rocket Man" or simply "Rocket Man" last year as an insult.  However, Trump has recently been criticized for his praise of the North Korean dictator, calling him "honorable" and touting their chemistry.

Trump’s Deal Is All Show, No Reality in Pyongyang -- Negotiations with North Korea are like driving down one of its poorly maintained roads, full of bumps and potholes. The rule of thumb is not to become too desperate for positive results. But as U.S. Secretary of State Mike Pompeo returns from yet another trip to Pyongyang, he has discovered that the only thing tougher than putting meat on the bones of the scanty Singapore agreement is trying to pin the North down on deliverables that President Donald Trump is desperate to take credit for. The four-paragraph declaration signed by Trump and North Korean leader Kim Jong Un in Singapore on June 12 was long on promises and short on specifics. Pompeo’s third trip to North Korea, which he has visited more than any other country during his tenure as secretary, was supposed to turn these promises into actual results. But the only concrete meetings set to follow the visit are working-level discussions on the repatriation of the remains of Korean War-era U.S. service members, which will commence this week. I know how meaningful returning these remains is for the families involved since I, along with Bill Richardson and Anthony Principi, brought back the last set of remains in 2007. Yet this sounds far from a done deal — even though Trump is already boasting that it has happened. The holdup, I would imagine, is that North Korea wants the United States to pay the expenses for the excavation of the remains, which, in reality, have been ready to be sent for many years. The money extorted this way can amount to hundreds of thousands, if not millions, of dollars paid directly to the Korean People’s Army. Pompeo also stated that progress was made on talks to decommission a missile engine test site — but there’s no conclusive deliverable here. And, again, Trump has claimed that this has already happened. Moreover, there are rumors that the site under discussion is an obsolete one used for liquid-propellant engines while the North has moved on to advanced solid-propellant engines.

How Donald Trump sold out South Korea while furthering Kim Jong-un’s dream of domination  -- US President Donald Trump may admire Kim Jong-un more than he does the leaders of America’s allies. When Kim speaks, “his people sit up at attention,” said the American president. “I want my people to do the same.” Trump was no doubt joking, sort of, but the message was clear. He admires and trusts Kim and wishes he as president could exercise the same authority.  He has praised Kim as one who “loves his people” and as a nice person with whom he gets along just fine, but he’s obviously overlooking the downside of one of the world’s most cruel hereditary dictators. He has also been fooled into thinking Kim is really getting rid of his nuclear programme when he is doing little or nothing about it while attempting to wring one concession after another from the Americans. One result is that Trump has raised false hopes among South Koreans that reunification is really possible, that Kim wants to show another side of his personality, that he is seriously interested in reform. Talk of “confederation” of the two Koreas is in the air, advanced by those who think that somehow North and South can survive on equal terms, that Kim would want to get along with South Korea’s President Moon Jae-in as an equal with whom he would even agree to share authority. Trump is partly to blame for raising these false hopes. He persists in boasting of the amazing progress that he made in his conversation with Kim, and he talks as though Kim is ready to bury the past and welcome South Korea as a partner in a spirit of fraternal friendship, shared values and aspirations and a common goal of peace and goodwill. The record shows, however, that North Korea is back to business as usual, extracting every benefit from the weakness and ignorance shown by Trump in a slow-motion bargaining game reminiscent of the long history of disillusionment and disappointment in deals with North Korea.

Trump Suggests China May Be "Exerting Negative Pressure" On North Korea Deal - Over the weekend, when discussing the latest provocative comments by North Korea's state media following Mike Pompeo's fruitless visit to Tokyo to push for further denuclearization by Pyongyang, and which Kim envoys slammed saying the country's "resolve for denuclearization" may falter, we said that "Trump's denuclearization plan will have to wait even as the risk that all progress achieved so far in bilateral negotiations collapses."Why? Because recall that China was the real puppetmaster behind the Trump-Kim summit... and suddenly Beijing is not very happy with Trump (for obvious reasons), which means that China's response to Trump's trade war may emerge in the realm of diplomacy as Xi does everything he can to undo any/all progress achieved in talks between Trump and Kim, potentially sending relations between the US and North Korea back to square one. We followed this up with a tweet saying that " China was the real puppetmaster behind the Trump-Kim summit, and now China is not very happy with Trump"  Now Trump himself is starting to realize that the culprit behind North Korea's newly belligerent attitude may be none other than China's president Xi himself, and in a quote said "I have confidence that Kim Jong Un will honor the contract we signed &, even more importantly, our handshake. We agreed to the denuclearization of North Korea. China, on the other hand, may be exerting negative pressure on a deal because of our posture on Chinese Trade-Hope Not!"  Of course, while there is no way to certify that China is indeed the catalyst behind N.Korea's sudden mood change, if Trump indeed is convinced that Beijing is pulling the strings, it is only a matter of time before he escalates significantly the trade war with Beijing, lobbing even more Tariffs China's way, as now he realizes that China's response is not merely economic but also diplomatic, and for Trump, denuclearizing North Korea remains the his crowning foreign policy achievement.

North Koreans Boycott Meeting On Return Of US War Dead -- Since his embarrassing summit with Kim Jong Un, Trump has been going around bragging that North Korea has “already” returned the remains of Korean War casualties.But North Korea exposed that lie by skipping a meeting meant to begin that process.According to South Korea’s Yonhap news agency, North Korean officials failed to show up for a meeting with American officials on Thursday.“Representatives of the U.S. and North Korea were expected to have working-level talks at the inter-Korean border truce village of Panmunjom on Thursday to hash out the details of the repatriation, but the discussions did not occur,” the agency reported.Instead, North Korea is reportedly demanding higher-level talks with the United Nations Command Military Armistice Commission.But since the summit, Trump has repeatedly claimed North Korea has already returned 200 sets of Korean War remains, which is the total number of remains that North Korea is believed to currently possess.In fact, North Korea has not returned any Korean War remains since the recovery process was halted in 2005. Even if they had been true, Trump’s boasts about Korean War remains were crass and exploitative, reducing these solemn sacrifices to a self-serving political victory. But by lying about them, Trump has given Kim Jong Un additional leverage to use against the United States.

Media, Hardliners Play Up North Korean Nuclear “Deception” Claim -- Just as Secretary of State Mike Pompeo was about to leave for denuclearization negotiations in Pyongyang, a spate of media stories reported that North Korea is deceiving the Trump administration by seeking to hide some of its nuclear facilities. Those stories suggest an effort by some Trump administration officials, led by National Security Adviser John Bolton, to derail the US-North Korea negotiations by pressuring Trump and Pompeo to embrace the narrative that Kim Jong Un is deceiving the US. Before becoming national security adviser, Bolton had made no secret of his opposition to any Trump effort to reach an agreement with North Korea. On July 1, The New York Times reported a conflict between Bolton and Pompeo over the timetable for denuclearization. The story said Bolton was determined to limit the period during which North Korea would be required to substantially disarm to one year, while Pompeo had publicly suggested it could take the remainder of Trump’s first term. That same day on “Face the Nation,” Bolton said Pompeo would be “discussing” with North Koreans “how to dismantle all of their [weapons of mass destruction] and ballistic missile programs in a year.” But Bolton made it clear that it would be based on a “full disclosure” by North Korea of all its activities and facilities.Over the weekend, Pompeo presented a US demand to North Korean senior official Kim Yong Chol: A declaration by North Korea of all its nuclear- and missile-related activities before any other steps in the timetable for a denuclearization agreement.In the 48 hours before Bolton’s “Face the Nation” appearance, however, both NBC News and The Washington Post reported that anonymous officials were touting an intelligence assessment as evidence of North Korean intention to deceive the administration by maintaining one or more covert enrichment facilities. The timing of the two stories, appearing within hours on June 29 and 30, suggests that the decision to leak the intelligence assessment to the two news outlets was part of an effort to create pressure on Trump to integrate the narrative of deception by Kim Jong Un into his negotiating policy.

The Media's Brazen Dishonesty About North Korean Nuclear Violations Press irresponsibly relies on single-source report to accuse Kim of breaking an agreement he never made... In late June and early July, NBC News, CNN, and The Wall Street Journal published stories that appeared at first glance to shed a lurid light on Donald Trump’s flirtation with Kim Jong-un. They contained satellite imagery showing that North Korea was making rapid upgrades to its nuclear weapons complex at Yongbyon and expanding its missile production program just as Trump and Kim were getting chummy at their Singapore summit. In fact, those media outlets were selling journalistic snake oil. By misrepresenting the diplomatic context of the images they were hyping, the press launched a false narrative around the Trump-Kim summit and the negotiations therein. The headline of the June 27 NBC News story revealed the network’s political agenda on the Trump-Kim negotiations. “If North Korea is denuclearizing,” it asked, “why is it expanding a nuclear research center?” .” CNN’s coverage of the same story was even more sensationalist, declaring that there were “troubling signs” that North Korea was making “improvements” to its nuclear facilities, some of which it said had been carried out after the Trump-Kim summit.  CNN commentator Max Boot cleverly spelled out the supposed implication: “If you were about to demolish your house, would you be remodeling the kitchen?” But in their determination to push hardline opposition to the negotiations, these stories either ignored or sought to discredit the careful caveat accompanying the original source on which they were based - the analysis of satellite images published on the website 38 North on June 21. The three analysts who had written that the satellite images “indicated that improvements to the infrastructure at North Korea’s Yongbyon Nuclear Research Center are continuing at a rapid pace” also cautioned that this work “should not be seen as having any relationship to North Korea’s pledge to denuclearize.” If the authors’ point was not clear enough, Joel Wit, the founder of 38 North, who helped negotiate the 1994 Agreed Framework with North Korea and then worked on its implementation for several years, explained to NBC News:  “What you have is a commitment to denuclearize—we don’t have the deal yet, we just have a general commitment.”

Trump releases ‘nice note’ from Kim Jong Un praising progress despite setbacks in denuclearization talks - WaPo - President Trump on Thursday released a personal letter from North Korean leader Kim Jong Un praising the “epochal progress” since their summit in Singapore last month, despite recent setbacks that have cast doubt on denuclearization talks. In a tweet, Trump posted copies of the four-paragraph note — both in Korean and translated into English — in which Kim stated that the summit was the “start of a meaningful journey” and that a “new future” between the two nations “will surely come to fruition.”“I deeply appreciate the energetic and extraordinary efforts made by Your Excellency Mr. President for the improvement of relations,” Kim said, according to the letter, dated July 6. That was the day Secretary of State Mike Pompeo arrived for two days of meetings with top North Korean officials, which ended on a sour note after Pyongyang blasted the U.S. side over a “unilateral and gangster-like demand for denuclearization.”In his note, Kim offered no reassurances that he is committed to relinquishing his country’s nuclear weapons or ballistic missile arsenal, referring more generally to “the faithful implementation of the joint statement” agreed to in Singapore. That statement said North Korea would “work toward complete denuclearization of the Korean Peninsula” but offered no details on when or how Pyongyang would dismantle its program.   “A very nice note from Chairman Kim of North Korea,” Trump said in his tweet. “Great progress being made!” Trump posted the note several hours after arriving in London for his first visit to Britain, after wrapping up a contentious appearance at the NATO summit. The president rattled U.S. allies by demanding that the other NATO nations pay more toward their own defense, although he stopped short of threatening to pull the United States out of the trans-Atlantic alliance.

Putin woos Trump by saying “deep state” and “fake news” are against their friendship. --Russian President Vladimir Putin seems to know just what to say to get on his American counterpart’s good side. And, not surprisingly, it involves lots of talk about “fake news” and the “deep state.” A Washington Post piece that has several interesting details about how Trump often treats relationships with global leaders as personal affairs rather than state interests, details how Putin echoes Trump’s words in an effort to get on his good side.One “senior U.S. official” said that Putin often complains that the “fake news” and the “deep state” are conspiring against the two of them becoming friends. The senior official summarized Putin’s message to Trump: “It’s not us … It’s the subordinates fighting against our friendship.” In part that may be why Trump takes a far more conciliatory stance toward Putin than to traditional U.S. allies. That stance was on full display at a rally in Montana earlier this week, when Trump said Putin was “fine,” mocking those who say he is naive about how to best handle the Russian president. “I might even end up having a good relationship [with Putin], but they’re going ‘well, president Trump, be prepared, president Putin is KGB’, this and that,” he said at the rally. “Do you know what? Putin’s fine, he’s fine, we’re all fine, we’re people. Will I be prepared? Totally prepared. I have been preparing for this stuff my whole life, they don’t say that.” There’s broad concern that by echoing the language of his base, Putin is essentially playing Trump, using the U.S. president’s lack of interest in details to get on his good side.

US Establishment In Hysterics That Trump-Putin Summit Might Succeed - There are many reasons the bipartisan US establishment hates Trump. His heresies from neoliberal orthodoxies on immigration and trade are prominent. But top among them is his oft-stated intention to improve relations with Russia. That’s fighting words for the Deep State and its mainstream media arm, for which demonizing Russia and its president Vladimir Putin is an obsession.  The fact that Donald Trump made his intention to get along with Moscow a priority during his 2016 campaign, both against his Republican primary rivals and Hillary Clinton (who has compared Putin to Hitler) was cause for alarm. This is because far more than even the frightening prospect that the 70-year state of war on the Korean Peninsula might end, US reconciliation with Russia would yank the rug out from under the phony justifications for spending hundreds of billions of dollars annually to counter a “threat” that ceased to exist over a quarter century ago. Absent hostility to Russia that money has no reason to keep sustaining the power, privilege, and prosperity of a horde of moochers and profiteers, both at home and abroad.  That’s why when it was reported soon after his January 2017 inauguration that Trump was seeking to open dialogue with the Kremlin and set an early summit with Putin there was a hysterical counteraction. As described just over a year ago by conservative columnist and former presidential candidate Patrick Buchanan: “Trump planned a swift lifting of sanctions on Russia after inauguration and a summit meeting with Vladimir Putin to prevent a second Cold War.  Operatives at State, disloyal to the president and hostile to the Russia policy on which he had been elected, collaborated with elements in Congress to sabotage any detente. They succeeded. “It would have been a win-win for Moscow,”

America First, Helsinki, And Trump's Existential Threat To The Empire - The major – perhaps only – redeeming virtue of the Donald’s ersatz campaign platform was his clear intent to seek a rapprochement with Russia, revamp America’s commitments to NATO and other cold war relics and to discard "Regime Change" as the core tenant of foreign policy. In essence, "America First" was to become the new route to domestic security and safety. Those eminently sensible notions struck the Deep State’s raison d’etre to the quick during the campaign; and by hook or crook, the Donald’s rapid fire actions toward these objectives since April have induced a palpable shock in the Imperial City. Clearly he means to withdraw America’s 29,000 military hostages now stationed in South Korea in return for some sort of peace treaty, economic normalization and denuclearization arrangement with Kim Jong-un.   Likewise, he has sensibly suggested that demonizing Russia and Putin has accomplished nothing, and that they should be invited back into the G-8. And as soon as Robert Mueller finishes his RussiaGate farce, Trump can get rid of the present asinine sanctions on various Russian officials and Putin cronies, too.  We also now know – owing to the sullen reporting of the Washington Post – that Trump has been hounding the national security bureaucracy about another utterly ridiculous artifact of the Empire. Namely, the fact that 73 years after Hitler descended into Hades from his bunker and 27 years after the Soviet Union slithered off the pages of history, there are still 35,000 US troops in Germany:The Pentagon is analyzing the cost and impact of a large-scale withdrawal or transfer of American troops stationed in Germany, amid growing tensions between President Trump and German Chancellor Angela Merkel, according to people familiar with the work.' Trump was said to have been taken aback by the size of the US presence, which includes about 35,000 active-duty troops, and complained that other countries were not contributing fairly to joint security or paying enough to NATO.'

America’s president is Russia’s pawn - Boston Globe -- Next Monday, Donald Trump will meet with Vladimir Putin — alone. This bodes ill. Since taking office, Trump has assiduously furthered Russia’s geopolitical ambitions — weakening our democratic allies and America itself. By relentlessly targeting America’s friends, Trump advances Putin’s goal of undermining Western democracies while shattering their alliances. “Sometimes,” Trump proclaims, “our worst enemies are our so-called friends and allies.” Castigating historic trading partners, he says, “We’re like the piggy banks that everybody is robbing.” The European Union, he complains, “was set up to take advantage of the United States.” As for NATO, it’s “as bad as NAFTA.”  Are these newfound villains attacking our electoral processes, or aiming nuclear warheads at our mainland? Hardly. But such existential threats are either beneath Trump’s notice, or resolved by staging vapid media events with the manipulative autocrats who exploit his vanity and ignorance — particularly Putin, that virile object of his fascination.  Setting aside Trump’s pathological passion for dictators, his contempt for the American-led liberal democratic order is historically illiterate. America’s fortification of European democracies after World War II not only fed our unprecedented prosperity, but also created a shared security in our largely peaceful present without — Trump’s complaints notwithstanding — costing us much. And while humane values mean nothing to Trump, this cooperative system promoted democracy and respect for individual rights.  Trump loathes all this. To quote an underling, his message to allies is “We’re America, bitch.” Working with elected European leaders to advance common interests seemingly threatens Trump’s tenuous manhood.  The result evokes a disordered two-year-old knocking down an edifice painstakingly erected with someone else’s blocks. He tells President Emmanuel Macron that France should leave the EU. Instead of quiet diplomacy, he sends angry dunning letters to NATO allies. He refuses to condemn Putin’s brazen subversion of European elections. As though transfixed by his fondest fantasies of self, he praises burgeoning autocrats in Hungary and Poland who abridge the EU’s commitment to democracy.

What If Trump Has Been a Russian Asset Since 1987?  Will he Be Meeting With His Counterpart — Or His Handler? - On June 14, 2016, the Washington Post reported that Russian hackers had broken into the Democratic National Committee’s files and gained access to its research on Donald Trump. A political world already numbed by Trump’s astonishing rise barely took notice. News reports quoted experts who suggested the Russians merely wanted more information about Trump to inform their foreign-policy dealings. By that point, Russia was already broadcasting its strong preference for Trump through the media. Yet when news of the hacking broke, nobody raised the faintest suspicions that Russia wished to alter the outcome of the election, let alone that Trump or anybody connected with him might have been in cahoots with a foreign power. It was a third-rate cyberburglary. Nothing to see here.The unfolding of the Russia scandal has been like walking into a dark cavern. Every step reveals that the cave runs deeper than we thought, and after each one, as we wonder how far it goes, our imaginations are circumscribed by the steps we have already taken. The cavern might go just a little farther, we presume, but probably not much farther. And since trying to discern the size and shape of the scandal is an exercise in uncertainty, we focus our attention on the most likely outcome, which is that the story goes a little deeper than what we have already discovered. Say, that Donald Trump Jr., Jared Kushner, and Paul Manafort told their candidate about the meeting they held at Trump Tower with a Russian lawyer after they were promised dirt on Hillary Clinton; and that Trump and Kushner have some shady Russian investments; and that some of Trump’s advisers made some promises about lifting sanctions. But what if that’s wrong? What if we’re still standing closer to the mouth of the cave than the end?

Trump Goes to Europe: Performing Triage -  The next two weeks are potentially decisive for US relations with Europe and especially NATO. As The Washington Post argues, there could be a “catastrophe.” NATO leaders meet in Brussels on July 11-12 and then President Donald Trump meets with Russia’s president Vladimir Putin in Helsinki on July 16. Most commentators see the two events as inextricably linked. In Brussels, they expect Trump to undercut the alliance and demonstrate that the United States is not wholeheartedly committed to it, while they worry that in Helsinki he will sell out the West for the equivalent of a mess of pottage to the master of the Kremlin. This is a potent narrative. But it depends on the validity of several assumptions, most important being that Trump is totally unaware of US interests in Europe and the world in general, doesn’t care, or is so besotted with Putin as to come perilously close to committing treason. According to other prevailing assumptions, there is already a new Cold War with Russia and that Putin alone is responsible for it, while the US has totally clean hands. Also, Russia’s aggression in seizing Crimea and its military actions in other parts of Ukraine require a substantial NATO military buildup, without which Putin is highly likely to push Russian military forces further westward, including into the Baltic states (formal NATO allies) and perhaps also northern European neutrals (Finland and Sweden). A final assumption is that, even absent direct Russian military pressures, the buildup of NATO military forces is both necessary and sufficient to deter other threats that Russia poses, as in cyber-attacks and interfering in Western politics, societies, and democratic practice in general. It follows from these assumptions that all NATO members should increase defense spending to at least 2% of GDP, a NATO-agreed goal to be achieved within the next eight years. The 2% goal has subsequently become the standard for judging whether allies are pulling their weight—even though meeting such spending levels would not in itself translate into useable military capabilities. It also ignores other essential aspects of providing security.

 Strained NATO Alliance Prepares for Discord at Summit - When German Chancellor Angela Merkel visited Donald Trump shortly after he took office, the new U.S. president opened the meeting by telling her, “Angela, you owe me one trillion dollars.” It was his estimate of a 14-year gap between what Germany spent on its own defense and what it had promised to spend under arrangements with the North Atlantic Treaty Organization, according to an official briefed on the session. Now, as NATO leaders prepare for a summit this week, Mr. Trump’s European counterparts are girding for a meeting with a U.S. president who is taking aim at elements of the trans-Atlantic alliance he insists place unfair burdens on the U.S. Since the post-World-War-II era the alliance has entwined security, through NATO, and the economy, through trade pacts. Mr. Trump has invoked a Cold War-era U.S. law to brand some imports from Europe as a threat to American security, the first time the law has been invoked against U.S. allies. Using that justification, he has placed tariffs on European steel and aluminum and threatened more against cars. The moves sparked European retaliation against U.S. industries. The president also says the security umbrella the U.S. spread across Europe during the Cold War allows allies to benefit without paying their full share as set by NATO goals. “I’m going to tell NATO, you got to start paying your bills,” Mr. Trump said at a rally in Great Falls, Mont., Thursday evening. “The United States is not going to take care of everything.” At a meeting in Quebec last month, Mr. Trump jousted with European leaders not only on trade but also on immigration, Russian relations, terrorism and other matters, and then walked away from a joint statement prepared by the group. European officials worry about a new round of discord at the NATO summit that opens on Wednesday in Brussels.

Donald Trump to face 'carnival of resistance' - The organisers of anti-Donald Trump protests have promised a “carnival of resistance” that will begin as soon as the US president lands in the UK on Thursday.While major protests have been prepared for London, the organisers said preparations had taken on “a life of their own” and would be carried out by dozens of groups and thousands of individuals across the country.Protests will start as Trump arrives from Brussels with pockets of protesters co-ordinating around the country to ensure that while the president may avoid the largest gatherings in the capital, they will not escape his notice. Trump is expected to be at the US ambassador’s residence in Regent’s Park, London, overnight and at 5.30pm on Thursday protesters plan to greet him with a “wall of sound”. More demonstrations are planned for Blenheim Palace, Oxfordshire, later in the evening, when Trump and his wife, Melania, will be guests of honour at a dinner for 100 guests.A website, Top Trump Targets, has been set up, encouraging people to donate to groups “he has sought to exclude or marginalise”.  The Walthamstow MP Stella Creasy, who set up the site with Sophie Livingstone, said it was an attempt to bring something positive from a highly divisive event. “There will be a lot of people on Friday who just want to be angry, but imagine if the legacy of this Trump visit was a massive funding boost to all the organisations he hates,” she said. “Standing with these organisations is probably the best thing we can do.”

Allies no more: Trump escalates threats against Europe -- On Tuesday, US President Donald Trump will arrive in Brussels to attend a summit of the North Atlantic Treaty Organization (NATO) amid the greatest crisis in US-European relations since the Second World War.“For the first time,” wrote the Financial Times, “the arrival of a US president on European shores is anticipated with trepidation and even fear.”After the Trump administration launched a global trade war by levying tariffs on European steel and aluminum imports last month, and then exploded the G7 summit just ten days later by refusing to sign its communiqué, the European powers are worried that Trump might also blow up the NATO summit. US officials have anonymously told the press that Trump could do anything at the event, from announcing a withdrawal of US troops from Germany to threatening to exit the alliance itself.All international relations, including those between the United States and its closest allies, have been thrown into disarray by Trump’s transactional “America first” approach to trade, geopolitics and diplomacy. As German Foreign Minister Heiko Maas recently put it, the “old pillars of reliability are crumbling.” It is dawning upon European leaders that Trump is not some fluke or traffic accident on the scene of global relations. His brand of politics—of extreme nationalism based on unadorned self-interest—represents a new world order embraced not only by the United States, but the European powers themselves. In his demand that the EU countries contribute more to NATO’s rearmament, Trump expresses the predatory drive of US capitalism to extract concessions from the whole world, “allies” and enemies alike. Rearmament on this scale cannot be carried out without the destruction of the social safety net and workers’ living standards. This is a central aim of Trump’s agenda, not an accidental byproduct. The White House is telling the European powers, in effect, to get on with their attacks on the working class, in order to lower labor costs for American corporations operating in Europe.

Trump says ‘Germany totally controlled by Russia’ through gas supplies - TASS - US President Donald Trump has strongly criticized NATO counties for approving the construction of the Nord Stream 2 gas pipeline. While talking to reporters ahead of a meeting with the NATO secretary general in Brussels, he bashed Germany, calling it "a captive of Russia." "We're protecting Germany, we're protecting France, we're protecting all of these countries. And then numerous of the countries go out and make a pipeline deal with Russia where they're paying billions of dollars into the coffers of Russia," Trump said. "Germany is a captive of Russia. They got rid of their coal plants, they got rid of their nuclear, they're getting so much of their oil and gas from Russia. I think it is something NATO has to look at," he added."So we're supposed to protect you against Russia and you pay billions of dollars to Russia and I think that's very inappropriate," Trump noted."Germany is totally controlled by Russia cause they are getting 60 to 70% of their energy from Russia and a new pipeline," he said, adding that former German Chancellor Gerhard Schroeder was the chairman of Nord Stream AG, which was also inappropriate."Germany is a rich country, they talk about increasing it [defense spending - TASS] a tiny bit by 2030. Well they could increase it immediately, tomorrow, and have no problem," the US president said.

NATO Is A Con Game - Ilargi - Okay, well, Trump did it again. Antagonizing allies. This time it was Germany that took the main hit, over the fact that it pays Russia billions of dollars for oil and gas while relying on the US for its defense … against Russia. And yes, that is a strange situation. But it’s by no means the only angle to the story. There are many more. For one thing, The US has by far the largest military industry. So it makes a lot of money off the billions already spent by NATO partners on weaponry. Of course Raytheon, Boeing et al would like to see them spend more. But once they would have done that, they would clamor for even more after. At some point one must ask how much should really be spent. How much is enough, how much is necessary. The military-industrial complex (MIC) has every reason to make the threat posed by ‘enemies’ as big as they possibly can. So knowing that, we must take media reports on this threat with tons of salt. And that is not easy. Because the MIC has great influence in politics and the media. But we can turn to some numbers. According to GlobalFirePower, the US in 2018 will spend $647 billion on its military, while Russia is to spend a full $600 billion less, at $47 billion. And the US Senate has already voted in a $82 billion boost recently. There are other numbers out there that suggest Russia spends $60 billion, but even then. If Moscow spends just 10% of the US, and much less than that once all NATO members’ expenditure is included, how much of a threat can Russia realistically be to NATO? Problem with that is that European nations for some reason love playing the threat card as much as America does. After all, Britain, France and Germany have major weapons manufacturers, too. So they’re all stuck. The Baltic nations clamor for more US protection, so does Sweden, Merkel re-focused on Putin just days ago, the game must go on.

Germans Actually Want US Troops Out Of Germany, Poll Finds - A central irony behind Trump's rumored "threat" that he could withdraw or at least greatly reduce American troops stationed in Germany, who last month wrote to Angela Merkel of “growing frustration in the United States that some allies have not stepped up as promised” on defense spending, is that Germans don't actually want US troops on their soil to begin with, according to a new poll. On Wednesday Trump slammed Germany from the moment he touched down in Brussels for expecting the US to foot the bill for Europe's security in the face of Russian aggression while Germany and others cut massive energy deals with Russian energy companies. In an exchange the president promptly posted on Twitter, he said Germany is "totally controlled by Russia" in reference to the planned Nord Stream 2 pipeline, which is to supply the country with Russian natural gas. "Germany is a rich country,"Trump said, implying it should increase spending on its own defense. It appears the German public agrees with Trump on this point as a YouGov poll the results of which were first published for the dpa news agency on the first day of the NATO summit finds that Germans would actually welcome American troop withdrawal from their soil (though a policy of outright US withdrawal is not on the table this week, nor is expected to be broached... but with Trump, who knows?).

Pompeo to stress need to boost pressure on Iran on NATO sidelines (Reuters) - U.S. Secretary of State Mike Pompeo arrived in Brussels on Tuesday, where he plans meetings on the sidelines of the NATO summit aimed at stepping up pressure on Iran and reassuring allies about alternative oil supplies, a State Department official said. Pompeo flew from Abu Dhabi, where he discussed Iran with leaders of the United Arab Emirates. Senior State Department officials have also completed three days of talks on Iran in Saudi Arabia, and “discussed new ways to deprive the regime of revenues,” a State Department official told reporters traveling on Pompeo’s plane. “In our meeting with the Saudi energy minister, we discussed maintaining a well-stocked oil market to guard against volatility,” he said. “We discussed U.S. oil sanctions to deny Iran revenue to fight against terrorism. We talked about minimizing market disruptions and helping partners find alternatives to Iran oil.” At NATO, Pompeo would discuss Iran with ministers from Britain, France and Germany, and in other bilateral meetings, said the official, who spoke on condition of anonymity. He said a meeting with political directors of the so-called E-3 countries of France, Germany and Britain, who signed an international agreement on Iran that the Trump administration has withdrawn from, would now be held in Brussels on Wednesday or Thursday. He said it was postponed for a couple of days due to scheduling issues. 

How Much Do the NATO Members Spend on National Defense? -- Josh Marshall provides a nice discussion of the difference between how NATO is funded versus how much each of its members spends on national defense, which begins with: As we move toward the NATO Summit and the Putin-Trump summit, I thought it made sense to review some of the details behind the President’s demands that NATO member countries pay up and stop doing what he regards as freeloading on the US taxpayer dime. Most people have a general sense that Trump doesn’t seem to grasp how an alliance works, that it’s not meant to function as a protection racket. But the actual details are both sillier and more significant than it may seem on the surface. While I applaud his discussion, something is amiss here: The vastly greater amount is the combined military budgets of all the member countries combined, which was $921 billion in 2017. The great majority of that is made up of the US military budget. In 2017 the US military budget was $610 billion. The coming fiscal year puts it at $700 billion. (That big run-up is significant and we’ll return to it.) Some of that difference is driven by the fact that the US economy is far larger than any individual NATO member state. But the US also spends much more on a per capita basis. Staying with the 2017 numbers, the US spends 3.61% of GDP on defense. The next major NATO member is the UK down at 2.36% while most other major NATO powers are significantly under 2%. (Examples: France, 1.79%; Germany, 1.2% Canada, 1.02%) Actually, U.S. national defense spending was over $744 billion in 2017, which came to 3.8% according to this source. Call me a pacifist but maybe we should all be spending less on the ability to wage war.

Trump Offers to Help NATO Members Buy US Weapons - Following the NATO summit, President Trump says that he offered to help certain unnamed NATO member nations with “weaker finances” to be able to buy US weapons. He said the US would not finance such purchases but help get them on a payment plan. Trump’s push for major commitments for all NATO nations to increase military spending precipitously, and to commit a substantial percentage of that spending to equipment, was seen by many as a rather cynical attempt to get all of those nations buying arms from well-connected US companies. Trump’s comments underscore that, as he says most of the NATO countries are wealthy enough to buy S arms on their own, and that it’s only a handful of “not so wealthy” countries that may need help. He said they should all buy US arms, because “The US makes by far the best military equipment in the world: the best jets, the best missiles, the best guns, the best everything.” Most nations are reluctant to commit major portions of their GDP annually to buying these pricey US arms, however. Some NATO nations, like Turkey, have even chosen to buy Russian over US arms in recent years, a fact that doesn’t sit well with the administration.

Nation Horrified To Learn Child-Killing Death Merchants Have Racist Employee - Caitlin Johnstone - Imagine if someone became immensely wealthy by slaughtering hundreds of thousands of human beings and selling their skins for money. Would they not be remembered for generations as one of the most evil monsters ever to walk the face of the earth?  Now imagine if someone became immensely wealthy by killing the exact same number of people, but instead of selling their hides, they simply sold the weapons which killed them after using legalized government bribery to ensure their use. Would you expect to see similar levels of revulsion? Or would you expect them to be treated as respectable members of society and elevated to a position of king-like power and influence? Northrop Grumman, one of the largest weapons manufacturers on the planet, was trending on Twitter yesterday. People are furious at the war profiteering death merchants, and are demanding an immediate change in its behavior. Not because it is an immensely powerful corporation which uses its influence to promote the consumption of machinery that tears apart human bodies. Not because people were horrified by its reported $25.8 billion in revenue last year. Not because Northrop Grumman often spends more money lobbying Washington to advance its interests than any other publicly traded entity. Not because the corporation once gave one of its lobbyists a $500,000 bonus right before he left to become a congressional staffer responsible for shaping US military policy, a position to which he was appointed by a legislator who just so happened to be the recipient of large amounts of Northrop Grumman campaign cash. No, the widespread outrage at Northrop Grumman was because the prolific lobbyists for an industry which facilitates the slaughter of innocent civilians every single day had hired a man who is a white supremacist. ProPublica and Frontline have ID'ed a man who's reportedly part of a white supremacist group and participated in Charlottesville. He works for Northrop Grumman, has federal security clearance. Northrop knows about his involvement but hasn't taken action.  — Kyle Griffin (@kylegriffin1) July 5, 2018

Macron, Merkel, Conte Deny Trump's NATO Spending Claims - Earlier today, during an impromptu, surprise press conference at the conclusion to the NATO summit, president Trump said that the allies achieved "tremendous progress today", and claimed that NATO member states had agreed to boost spending, while hanging the threat of a US pullout from the alliance: “I think I probably can,” was Trump’s answer when asked if he thought he could withdraw the U.S. from NATO without the approval of Congress.There was just one problem: first French president Macron, then Angela Merkel both played down, if not outright denied, Trump's claims that a spending agreement had been reached.When asked directly whether countries had committed to speed up spending as Trump claimed in his news conference, French President Emmanuel Macron stated the following response, which suggests that plans remains the same as always.“Everyone agreed to raise spending as they agreed in 2014, and everyone agreed to respect the commitments they made,” Macron said. “We reaffirmed a credible budget strategy that meets our needs.”Separately, Merkel also struck a non-committal tone and said “we should always be looking at what more we can do" which is roughly 180 degrees away from a firm commitment. Her full quote:“We’ll have to talk about to what extent we can do more on defense. We presented the current situation. But considering the discussion among the European allies, not only he Americans, I think we need to ask ourselves consistently what more we can do.” Meanwhile, Italy's Prime Minister was the closest to contradict Trump outright, telling reporters Italy has no plans to change its defense spending plans as a result of the summit. In other words, just like after the G7 meeting, Trump came, he saw, and left nothing but confusion in his wake.

NATO Leaders Hold Unplanned Emergency Session After Trump Threatens To Withdraw - The last day of the NATO leaders' summit has started off just as dramatically as the first one, when Trump accused Germany of being a "captive of Russia" due to Merkel's imports of Russian gas and her unwillingness to scrap the Nord Stream gas pipeline as Trump has demanded.According to media reports, one day after Trump repeatedly slammed NATO, demanding that the alliance must "pay 2% of GDP IMMEDIATELY"...What good is NATO if Germany is paying Russia billions of dollars for gas and energy? Why are there only 5 out of 29 countries that have met their commitment? The U.S. is paying for Europe’s protection, then loses billions on Trade. Must pay 2% of GDP IMMEDIATELY, not by 2025.— Donald J. Trump (@realDonaldTrump) July 11, 2018... while also setting a new target of 4% which should also be hit, German dpa news agency reported that President Trump had threatened to pull the U.S. out of NATO if its allies do not "immediately" increase defense spending.This appears to have had an immediate effect, because just minutes later, in what Bloomberg dubbed an "unexpected twist", NATO leaders held an unscheduled meeting to discuss the alliance budget this morning.One of the officials said the meeting takes place against the backdrop of Trump threatening allies to “go it alone” unless if they agree to increase their defense budget immediately. A White House spokeswoman wasn’t immediately available to comment. The question of NATO spending is clearly prevalent, and as Bloomberg further adds, Trump used his session with Ukraine and Georgia to return to the question of NATO members’ defense spending and used a “harsher” tone than yesterday.He targeted Germany in particular and referred to “Angela” more than once, saying something to the effect that she can do more. He also apparently referred to the cost of the new NATO headquarters. As a result of this twist, Secretary General Jens Stoltenberg called a session of the NATO leaders.

Trump disrupts NATO summit with blasts at allies, especially Germany, and new defense spending demands - In a two-day visit with NATO allies, President Trump claimed 'Germany is totally controlled by Russia' President Trump upended the show of unity at NATO’s annual summit on Wednesday as many allies had feared, claiming that Germany "is totally controlled by" and "captive to Russia" and inflating his demands that they spend more on defense to an unrealistic level. The president’s comments in Brussels, especially his harsh and unexpected attack on Germany, Europe’s leading power, overshadowed the alliance’s ostensible business and undercut its ultimate summit declaration of NATO allies’ commitment to shared values and a joint defense against Russian aggression. His attack on Germany as beholden to Russia, because of a pipeline project, was in keeping with Trump’s practice of accusing others of behavior he has been accused of. It comes after he irked allies last month by suggesting that Russia should be readmitted to the Group of 7 alliance of industrialized democracies.  Trump is set to meet with Russian President Vladimir Putin in Helsinki on Monday, a get-together that has U.S. allies apprehensive given his frequent warm words for the autocrat. The president’s posture toward close allies has been increasingly and remarkably confrontational this year, especially in comparison to his more conciliatory approach to adversaries, including Russia and North Korea. Even as he flew to Brussels, Trump continued his attacks on NATO allies for not spending more on defense, and after hours of meetings on Wednesday he reiterated his disdain in a tweet that began, “What good is NATO…?” As his latest remarks filtered back to the United States, even some Republican congressional leaders criticized the president for his slams against Germany and other allies, though others defended him. Among Democrats, former Secretary of State John F. Kerry called Trump’s statements “disgraceful, destructive,” and the party’s congressional leaders — Sen. Charles E. Schumer and Rep. Nancy Pelosi — in a joint statement said the president’s comments were an “embarrassment” and “another profoundly disturbing signal that the President is more loyal to President Putin than to our NATO allies.” 

Pentagon calls on allies for ‘damage control’ after Trump NATO trip: report | TheHill: Pentagon officials have spent the hours since President Trump departed NATO headquarters in Brussels reassuring U.S. allies of America's commitment to the NATO alliance after the president suggested that the United States' military commitment was up for discussion. U.S. officials told NBC News that maintaining "predictability" among alliance members was important and that calls were made with foreign officials centered around "reinforcing alliance commitments" after Trump "made it clear alliance commitments were on the table."The Pentagon did not respond to NBC's request for comment, but a senior administration official told the news outlet that Trump had echoed his public rhetoric about NATO commitments in private "aggressive" meetings with leaders of NATO member nations. The president attacked "delinquent" U.S. allies upon arriving at the summit in his public remarks, returning to old criticism of the alliance centered around foreign nations' contributions to the military organization. "Many countries are not paying what they should. And, frankly, many countries owe us a tremendous amount of money for many years back, where they're delinquent, as far as I'm concerned, because the United States has had to pay for them," Trump said of NATO allies Thursday. "So if you go back 10 or 20 years, you'll just add it all up. It's massive amounts of money is owed," he added. French President Emmanuel Macron, who met with Trump that day, threw cold water on reports of Trump's rhetoric after the meeting, stating that Trump had not threatened to draw down U.S. cooperation levels with NATO. “President Trump never at any moment, either in public or in private, threatened to withdraw from NATO,” the French president said. 

Trump Got From NATO Everything Obama Ever Asked For - The NYT Editorial Board -- Now that the smoke has cleared from the NATO summit meeting, the most tangible result is apparent: President Trump advanced President Barack Obama’s initiative to keep the allies on track to shoulder a more equitable share of NATO’s costs. Mr. Trump even signed on to a tough statement directed at Russia. For once he saw eye to eye with his predecessor.Yet whether Mr. Trump himself is clear about the strategy he’s pursuing, or whether he in fact has one, remains as mysterious as ever.Mr. Obama persuaded NATO leaders to increase their military spending at a meeting in Wales in 2014, after a newly aggressive Russia invaded Ukraine. Back then, alliance members pledged to work toward raising spending levels to 2 percent of their gross domestic products by 2024. All 29 allies have begun to increase their military budgets in real terms, and two-thirds of them have plans to reach the 2 percent target by 2024. And they reaffirmed their “unwavering commitment” to these targets in the communiqué issued at the end of the two-day summit in Brussels this week.Of course, two days of gratuitous and self-defeating Trump bombast and threats preceded this resolution. The president publicly browbeat and insulted allies as deadbeats taking advantage of American generosity. He then raised the ante, demanding that they meet the 2 percent target — it’s a target, not some specific legal obligation — by January and then go on to raise spending to 4 percent of G.D.P. Why that much? What strategic objective, what threats to the alliance, is Mr. Trump worried about? He didn't say. Even after a military spending increase under President Trump, American military spending is only 3.2 percent of G.D.P. this year. What’s more, it’s expected to fall to 2.8 percent in 2024, leaving it unclear as to how even the United States would meet the 4 percent figure.

Donald Trump creates chaos with his tariffs trade war -- The leader of the world’s most powerful country is a dangerous ignoramus. So how should the rest of the world respond? What makes this so difficult to answer is that Donald Trump has created chaos. It is so difficult to negotiate with him because nobody knows what he and his team want. This is just not normal. The administration’s trade actions and announced intentions are, in this context, important in themselves and indicative of the wider dysfunction. The US has imposed tariffs on imports of solar panels, washing machines, steel and aluminium. If one adds two rounds of tariffs on China under Section 301 of the US Trade Act of 1974, the affected trade comes to about 7 per cent of US imports.  If one allows for the threat of retaliation against retaliation, which could affect an additional $400bn of imports from China, as well as the possibility of tariffs on $275bn of imports of cars and parts, total affected imports reaches $800bn, or about a third of US imports of goods. The US actions have already caused retaliation (see charts).  The administration has justified the actions already in effect on steel and aluminium by reference to national security. The same rationale is being used in an investigation of US imports of cars, launched in May. Fears over such abuse of the security exceptions are why the World Trade Organization’s rules are restrictive. Such exceptions are enumerated as relating to “fissionable materials”, or “the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment”, or “taken in time of war or other emergency in international relations”.

Donald Trump told Theresa May how to do Brexit ‘but she wrecked it’ – and says the US trade deal is off - (interview tape) DONALD Trump today accuses the PM of wrecking Brexit — and warns she may have killed off any chance of a vital US trade deal. The US President delivers his incendiary verdict on her negotiating strategy in a world exclusive interview with The Sun.In an extraordinary intervention timed to coincide with his UK visit, Mr Trump said Theresa May ignored his advice by opting for a soft Brexit strategy.And he warned her any attempts to maintain close ties with the EU would make a lucrative US trade deal very unlikely. Mr Trump said: “If they do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal.” His comments, damaging to the Prime Minister, come as he delivers his most brutally honest verdict yet on Britain in which he also:

Mr Trump’s remarks come as he prepares to meet the PM for a working lunch at Chequers. He will then board a helicopter for Windsor Castle to meet the Queen before flying up to Scotland for a private two-day visit.

 'We've Got The Tapes' - Trump Slams CNN, Sun Interview As "Fake News" - In one of the livelier presidential press conferences in recent memory, President Trump slammed the media after reporters refused to stop asking questions about his interview with the Sun (in which the president repeatedly criticized Prime Minister May's "soft" approach to Brexit, warning it would kill the much anticipated US-UK bilateral trade deal).In one particularly memorable moment, Trump refused to take a question from a CNN reporter and instead declared that "CNN is fake news. I don't take questions from CNN". After arguing with the reporter for a minute, Trump said he'd turn to "a real network" and called on John Roberts, the White House reporter with Fox News. After criticizing CNN, Pres. Trump declines to take a question from a CNN reporter at joint presser with Theresa May.  And in response to a particularly tough question from an NBC News reporter - whom he slammed as "dishonest" after she asked the president whether his actions had left him at a disadvantage ahead of his meeting with President Putin - Trump threatened to have Sarah Huckabee Sanders get the tapes from the Sun interview and play them back to prove that Trump didn't say what the Sun - a Murdoch tabloid - reported.Here's the quote, courtesy of the Daily Caller. "I didn’t criticize the prime minister. I have a lot of respect for the prime minister and, unfortunately, there was a story that was done which was generally fine, but it didn’t put in what I said about the prime minister and I said tremendous things," Trump declared, adding, "Fortunately, we tend to record stories now so we have it for your enjoyment if you like it. We report when we deal with reporters. It is called fake news."

Trump's Bite May Be Worse Than His Bark: Stockman Slams "Absurd, Dangerous, Stupid" Policies - Excellent CNBC interview with David Stockman, President Reagan’s head of OMB, who speaks his mind and never holds back. Some dismiss him as a perma-bear and doomsayer. We certainly don’t, just has been a bit early, like every analyst and economist worth their salt. His analysis and model are sound. By the way, if you ever meet someone who claims they always top tick or buy every bottom, and have perfect timing, run as fast as you can. Moreover, the former “beltway boy wonder” doesn’t have to make his money trading and can maintain his conviction without going bankrupt or losing his career. He will eventually be right. It’s all timing, my friends. Listening to him today, we respect him even more for his intellectual honesty. We have always perceived Mr. Stockman as a supporter of the president, but we could be wrong. He never allows his politics to warp his analysis. Rare and refreshing.  He was famously “taken to the woodshed” by President Reagan for his statements in a 1981 Atlantic Monthly article, that “supply-side economics — the backbone of the Reagan economic revolution – was a ‘Trojan horse’ that would ultimately benefit the rich.” He laid it all out there today and held nothing back. 

Ross admits ethics errors, divests all stocks - Commerce Secretary Wilbur Ross said late Thursday that he would sell all of his stock holdings to “maintain the public trust” after the Office of Government and Ethics scolded him for some of his financial transactions. "I have made inadvertent errors in completing the divestitures required by my ethics agreement," Ross said in a statement. "To maintain the public trust, I have directed that all of my equity holdings be sold and the proceeds placed in U.S. Treasury securities."  The admission comes after Ross received a letter from the government ethics watchdog that called him out for failing to divest from some stocks before Inauguration Day last year — as he had indicated — and for more recently engaging in some stock market activity that appeared aimed at belatedly correcting that error.  The OGE letter from acting Director David Apol, which contradicts what Ross has said in the past regarding the ethical and legal nature of the trades in question, also warns that Ross’ discrepancies could lead to legal jeopardy. Pro’s Doug Palmer and Colin Wilhelm have more here.

Get ready for the ‘largest trade war in economic history’ | Asia Times: It is now the “largest trade war in economic history.” Well, that is Beijing’s take on President Donald Trump’s decision on Friday to impose tariffs worth US$34 billion on a range of Chinese imports, including high-tech equipment and industrial machinery. In response, the world’s second-largest economy warned it would take the “necessary countermeasures,” triggering what is now a full-blown trade conflict. “The Chinese side, having vowed not to fire the first shot, is forced to stage counter-attacks to protect the … interests of its people,” the Chinese Commerce Ministry said in a statement. “[The US has started the] largest trade war in economic history.” As the midnight chimes sounded in the United States, the first wave of tariffs kicked in. Another $16 billion are scheduled to take effect in the next two weeks.After that, Trump has made it clear he is planning additional duties on Chinese products worth a staggering $500 billion. At the same time, Beijing has reiterated it will roll out tit-for-tat tariffs as tensions rapidly escalate.For the past three months, the ‘war of words’ between the world’s two largest economies has gathered pace after the White House pledged to cut the ballooning US trade deficit with China.In May, the figure swelled to US$24.6 billion, which was almost all of China’s total surplus of $24.9 billion, compared to the same period last year. While it fell slightly last month, between January and March it hit $58 billion and a record $375.2 billion in 2017.But that is only part of Trump’s beef. He has also expressed growing concern about intellectual property rights in high-tech industries, centered around the “Made in China 2025” policy, which aims to turn the country into a technological superpower.

Beijing orders state media to soften criticism of Donald Trump as the US and China tone down their trade war rhetoric -- With a China-US trade war under way, both parties are adopting a no-insult strategy, choosing to remain muted in their rhetoric about the opposing side’s leader. After answering Washington’s 25 per cent levy on US$34 billion of Chinese goods with equivalent tariffs on US products, Beijing has directed state media to watch how they report on US President Donald Trump, mainland media sources said. “It’s been said that we should not use aggressive language for Trump,” said one of two sources who declined to be named because internal directions often are regarded as confidential information.Even though Chinese officials and state media have attacked the trade policies of the Trump administration, so far they have not laid blame on the US president or his officials – a move seen as an attempt to avoid antagonising Trump and further complicating negotiations. While the Beijing directive may not have been issued across the board – two other state media sources said they were not instructed how to write about Trump with regards to trade – it mirrored one of the guidelines on an official propaganda instruction widely circulated on social media. The edict called on media outlets not to make vulgar attacks on Trump to avoid “making this a war of insults”. The South China Morning Post reported last month that state media agencies were instructed to play down mentions of Made in China 2025 – a strategic industrial policy aimed at transforming China into a high-tech powerhouse – in their reports.

As trade war rages, the shoe biz goes on for Ivanka Trump and her Chinese suppliers - While the United States and China are locked in a costly trade war, Ivanka Trump’s clothing and shoe business is not only exempted from the tariffs – it is in the pink. US President Donald Trump’s daughter has long had her apparel and shoes made in China and thanks to a major exemption for Chinese garment and footwear in the tariffs dispute, the clothing industry looks likely to be left unscathed. The US imposed an additional 25 per cent tariff on US$34 billion worth of Chinese goods on Friday. Among the sectors affected were nuclear reactors, boats and aircraft, but clothing was exempted. According to the American Apparel and Footwear Association, about a third of the clothing and 72 per cent of the shoes sold in the US are from China. One of those importers is the eponymous fashion label of Ivanka Trump, the president’s daughter and adviser. Chengdu Kameido Shoes in Sichuan province said it had supplied shoes for the Ivanka Trump brand in the past and was aiming to do so again. “We are trying win a contract with one of our customers,” a Kameido representative said. “The entire order is for the Ivanka brand.”

 Here's How a Trade War Between the U.S. and China Could Get Ugly -  The first shot of the U.S.-China trade war went off without much of a reaction from investors. The calm may be short lived. For months, financial markets have been bracing for President Donald Trump to follow through with threats of tariffs against China. So it came as little surprise when the U.S. implemented duties on $34 billion in Chinese imports on Friday, as planned, and Beijing retaliated proportionately. Now comes the hard part for forecasters. Economists feel they have a good handle on the direct impact of higher duties. Tariffs raise the price of imported goods, in turn inflating costs for businesses. Those companies can fully absorb the increased cost, or pass some or all of it onto consumers. The bottom line: someone pays, prices rise, demand is hurt. The U.S. China Trade Relationship: A Dispute in Five Charts The Trump administration is currently reviewing another round of tariffs on $16 billion in Chinese goods. If the U.S. stops at duties on $50 billion in imports, and China does likewise, the hit to both countries’ economies will be modest, Bloomberg Economics projects. Call that the neat-and-tidy trade war: both countries come to their senses, and financial markets bend but don’t break.However, Trump said last week that he may expand tariffs to more than $500 billion in Chinese goods, to basically cover all imports from the Asian nation into the U.S.Economists say they can’t fully measure the indirect impact that could occur as the trade war escalates. A decline in U.S. financial markets could be one such element. Factor in a significant slump in equities prices, with the knock-on effect of falling wealth, and the likely hit to U.S. growthwidens to 0.4 percentage point, according to Bloomberg Economics.

Chinese customs clears some U.S. goods as new tariffs take effect (Reuters) - Major Chinese ports have started clearing goods from the United States on Monday, as new tariffs on U.S. imports have gone into effect, three sources told Reuters, as a trade spat between Beijing and Washington escalated into an outright war last Friday. Customs officers had delayed the clearance of some U.S. goods on Beijing’s penalty list last Friday, as they waited for official instructions from the central government on whether to start collecting the new import tariffs. Local customs at the port of Qingdao have let through American products they held up on Friday, and imposed higher tariffs on the goods, according to a trader briefed by a customs official at the port. Shanghai customs has also started collecting new tariffs as of Monday on imported fruits and wine, among other U.S. products on the new tariff lists, two custom brokers told Reuters. China’s General Customs Administration did not reply to a fax seeking comments. Beijing had said that China’s punitive tariffs on U.S. products would immediately take effect after America imposed penalties on Chinese goods worth a similar amount. However, the absence of an official confirmation earlier Friday afternoon had caused confusion in the markets, leaving customs at major ports in limbo. Later that day, China’s foreign ministry spokesperson announced that China has begun implementing new tariffs of 25 percent on some U.S. goods including automobiles and soybeans. Customs at the port of Dalian, where the ship Peak Pegasus was currently anchored carrying 70,000 tonnes of U.S. soybeans, have updated their tariffs for the U.S. goods on Beijing’s list to the higher levels, according to a soymeal buyer briefed by a customs official at the port. The Peak Pegasus caused a stir on Chinese social media as it raced to reach China before the tariffs started on Friday and remained berthed at Dalian and fully laden as of Monday afternoon, according to Eikon data.

China's Tariffs Overwhelmingly Target Counties That Voted for Trump - In the latest sign that there's a political angle to the retaliatory tariffs being levied against US goods, those imposed by China on Friday overwhelmingly target counties that voted for President Trump during the 2016 election, according to an analysis by Moody's. This would suggest that, like the EU, China crafted its retaliation with the intention of destabilizing President Trump's political base. To wit, Moody's calculated that Beijing's retaliation will have an outsize impact on 20% of the countries that voted for Trump in 2016, with a total population of 8 million people. By "outsize" impact, we mean that the tariffs will impact industries that represent at least 25% of the GDP in those counties. To be sure, the negative impact on some of these industries might be mitigated by the US's tariffs on Chinese goods, which could help offset the damage. But only 3% of counties that went for Hillary Clinton, with a total population of 1.1 million people, are expected to be impacted to such an extent. "The beneficiaries are pretty narrowly regionally concentrated, right in the industrial Midwest. Outside of that, it’s hard to identify anyone who benefits to any significant degree," said Mark Zandi, chief economist of Moody’s Analytics. "The areas that suffer are broader and more diffuse. The agricultural areas get nailed. Some of the manufacturing centers get hurt as well."[...] "If it’s over 25%, there’s a pretty good chance that the economy is going to feel it pretty significantly, could even contract, and see unemployment rise," Mr. Zandi said. Trump has argued that China has been engaging in unfair trade practices for decades, and that it must be brought to heel, regardless of the impact on the US economy. The impact on soybean farmers in particular is coming at a time when farmers across the US are being squeezed by low crop prices and rising borrowing costs. According to WSJ, soybean producers in the Great Plains, auto manufacturers in the upper Midwest and oil-producers in the Dakotas and Texas will see the largest negative impact from China's retaliation.

China shouldn’t bet on Trump’s voters deserting him when the trade war takes it toll --Now that the US-China trade war has darkened the doors of companies depending on the world’s most robust bilateral economic relationship, prognostication over how long this fight will last has begun. Beijing is betting on a low threshold of pain among US voters in the country’s “red states”. The strategy makes sense at first blush. Target products made in states that voted for Donald Trump, pork and soybeans for example, and the president’s support will fall away. The targets also include US ginseng, which comes from Wisconsin. The Midwestern state’s election night result in 2016 delivered a shock to the Democrats that many still haven’t recovered from. Hillary Clinton’s loss in a state that had not gone to a Republican presidential candidate since 1984 showed how badly voters there wanted a departure from politics as usual. Beijing is hoping that a dose of economic pain will show these voters, and those in swing states, that Trump was the wrong solution to their grievances. The pressure caused by the loss of a lucrative export market will, the logic goes, lead to losses for Trump’s Republican party in November’s midterm elections, undercutting Trump’s ability to wage trade wars. But what if Beijing is wrong? Chinese officials have already miscalculated by not realising how different the Trump White House is from every administration since Richard Nixon’s. Every US president since the establishment of formal diplomatic relations between America and the People’s Republic has played by Beijing’s rules. Washington’s diplomats and the US Chamber of Commerce, mindful of the potential profits to be amassed in such a large marketplace, assumed that China would eventually level the economic playing field.Trump was the first US president to understand that Beijing would never follow through with significant economic reforms without a fight, and for this he deserves credit.   Unfortunately, Trump undercut America’s odds in this conflict by alienating every traditional US ally and throwing into doubt security alliances that have for many decades underpinned American military strength and global economic growth.

U.S. Unveils Additional Tariffs on $200 Billion More in Chinese Imports —The White House said it would assess 10% tariffs on a further $200 billion in Chinese goods, deepening the dispute with Beijing, while sending a message to other trading partners that the U.S. won’t back away from trade fights. The new round of tariffs—hitting products from fish to luggage—comes on top of two others and is bound to be met with threats of retaliation from Beijing, though U.S. Trade Representative Robert Lighthizer said he was open to talks with China about a resolution of the dispute. “As in the past, the United States is willing to engage in efforts that could lead to a resolution of our concerns about China’s unfair trade practices and to China opening its market to U.S. goods and services,” he said in a statement. Officials in both nations say there are currently no negotiations scheduled. Previous discussions between Treasury Secretary Steven Mnuchin and Chinese economic envoy Liu He didn’t come close to resolving the dispute. The early reaction out of Beijing was scornful.  “The U.S. approach undermines the process of globalization and undermines the trade order.” The new tariffs won’t take effect for at least two months, administration officials said, giving U.S. industry time to comment on the products selected for levies—and for the two sides to start a new round of talks. Hearings on the products are scheduled for Aug. 20-23. The new tariffs hit a multitude of products including consumer goods, which could produce a reaction against the trade fight. The consumer products include tuna, salmon and other fish, luggage, tires, dog leashes, handbags, baseball gloves, furniture, apparel, mattresses, electric lamps and television cameras and well as components in telephones and flat panel displays. The administration has tried to limit the impact on consumers, but the scale of the imports subject to tariffs makes that next to impossible. The additional tariffs follow last week’s imposition of levies on $34 billion of Chinese exports of machinery, components and electronics. Also scheduled are tariffs on $16 billion of Chinese electronics and other components. China has retaliated with its own tariffs on $34 billion of U.S. farm goods, aircraft and other items and says it will match the second round dollar for dollar. Mr. Trump said in June that if China moved ahead with the tariffs, as it did, he would ratchet up the fight with tariffs on another $200 billion in Chinese goods. Additional retaliation by China would be met with tariffs on yet another $200 billion in Chinese imports, he said. 

Trump targets $200B more in Chinese goods for tariffs - President Donald Trump made good Tuesday night on a promise to keep raising the pressure on Beijing in a trade war over its intellectual property practices by publishing a list of an additional $200 billion worth of Chinese goods that he plans to hit with a 10 percent tariff.  Beijing's Commerce Ministry today called the new tariff list "totally unacceptable" and said China would impose countermeasures and file a lawsuit at the World Trade Organization. The new list of products includes refrigerators, furniture, "and even antiques," according to the South China Morning Post. "China is shocked by the US move and the Chinese government, as always, will have to react to defend the core interests of our nation and people,” the Commerce Ministry said. House Ways and Means Chairman Kevin Brady (R-Texas) urged Trump and Chinese President Xi Jinping on Tuesday night “to meet soon face-to-face to craft a solution to establish a fair and lasting trade relationship between our two countries.”  The tech industry and other business groups slammed the move even though the Trump administration says it’s imposing the tariffs to protect the U.S.’s technological lead and put pressure on China to stop bad practices.  “Trade is critical to economic growth and supports millions of jobs from Silicon Valley to the savannahs of the heartland,” Dean Garfield, president and CEO of the Information Technology Industry Council, said in a statement. “Yet the administration continues to impose more tariffs without a clear objective or end in sight, threatening American jobs, stifling economic investment, and increasing the prices of everyday goods.” Garfield urged Trump “to delay this unnecessary escalation before more consumers and workers are harmed and instead make a concerted effort to build a coalition while he is in Europe this week and then negotiate with China to achieve tangible commitments including accountability mechanisms and implementation timelines.”  Senate Finance Chairman Orrin Hatch (R-Utah), who worked closely with Trump last year on the tax reform bill, also expressed alarm. “Although I have supported the administration’s targeted efforts to combat China’s technology transfer regime, tonight’s announcement appears reckless and is not a targeted approach..”  No further negotiations between the world’s two largest economies have been scheduled, but an administration official noted that the U.S. remains open to finding a solution. In the meantime, the Office of the U.S. Trade Representative will hold a hearing on the proposed tariffs Aug. 20-23 as part of a public comment period that ends Aug. 30. A final decision will come sometime after that, administration officials said. Doug Palmer and Adam Behsudi have more on the tariffs here.

 Trump’s Tariff Barrage Pushes China Fight to Point of No Return - U.S. President Donald Trump is pushing his trade conflict with China toward a point where neither side can back down. By Aug. 30, as the U.S. nears midterm elections vital for Trump’s legislative agenda, the White House will be ready to impose 10% tariffs on $200 billion of Chinese-made products, ranging from clothing to television parts to refrigerators. The levies announced Tuesday -- together with some $50 billion already in the works -- stand to raise import prices on almost half of everything the U.S. buys from the Asian nation. China has seven weeks to make a deal or dig in and try to outlast the U.S. leader. President Xi Jinping, facing his own political pressures to look tough, has vowed to respond blow-for-blow. He’s already imposed retaliatory duties targeting Trump’s base including Iowa soybeans and Kentucky bourbon. Yet matching the latest U.S. barrage would force China to either levy much higher tariffs or take more disruptive steps like canceling purchase orders, encouraging consumer boycotts and putting up regulatory hurdles. Not only does that risk provoking Trump to follow through on threats to tax virtually all Chinese products, it could unleash nationalist sentiment on both sides that fuels a deeper struggle for geopolitical dominance. “It’s already past the point of no return,” said Pauline Loong, managing director at research firm Asia-Analytica in Hong Kong. “What’s next is not so much a trade war or even a cold war as the dawn of an ice age in relations between China and the United States.”   While earlier tariffs were expected to have only a limited impact, economists warn a full-blow trade war could derail the strongest economic upswing in years. The Chinese Commerce Ministry said Tuesday that it would be forced to retaliate against what it called “totally unacceptable” U.S. tariffs. There have been no confirmed high-level talks between to two sides since early an early June visit to Beijing by U.S. Commerce Secretary Wilbur Ross that achieved no breakthroughs.

Trump versus tortoise shell and badger hair - Those red state voters have had it with foreign badgers applying their pinko commie elite bristles to the chins of patriotic American workers. At least, that's only the conclusion we can draw from the list of products on the latest US tariff proposals. Here's what it had to say about putting the roster together:In developing the list of tariff subheadings included in this proposed supplemental action, trade analysts considered products from across all sectors of the Chinese economy. The selection process took account of likely impacts on U.S. consumers, and involved the removal of subheadings identified by analysts as likely to cause disruptions to the U.S. economy, as well as tariff lines subject to legal or administrative constraints.And here's some selected highlights from the list, which if nothing else give a sense of the diversity of human life and trade, and also the sort of mind boggling minutiae and exhaustive detail involved in trade negotiations which the post-Brexit UK will have to embrace:

  • Badger hair and other brushmaking hair, nesoi, and waste thereof
  • Tortoise shell, whalebone and whalebone hair, horns, antlers, hooves, nails, claws and beaks, unworked or simply prepared; waste and powder

China vows retaliation for $200 billion US tariff threat   (AP) — China's government vowed Wednesday to take "firm and forceful measures" as the U.S. threatened to expand tariffs to thousands of Chinese imports like fish sticks, apples and French doors, the latest salvo in an escalating trade dispute that threatens to chill global economic growth.China gave no details, but it has plenty of options to retaliate that could extend beyond additional tariffs on U.S. imports. There are fears that Beijing could attempt to disrupt operations of American automakers, retailers and others that see China as a key market.The spiraling conflict stems from Washington's complaint that Beijing steals or pressures companies to hand over technology and concerns that plans for state-led development of Chinese champions in robots and other fields might erode American industrial leadership.A possible second round of tariff hikes announced Tuesday by the U.S. Trade Representative targets a $200 billion list of Chinese goods. That came four days after Washington added 25 percent duties on $34 billion worth of Chinese goods and Beijing responded by increasing taxes on the same amount of American imports.The abrupt escalation is "totally unacceptable," said a Commerce Ministry statement. It said Beijing would take unspecified "necessary countermeasures" to protect its "core interests." Asked what Beijing would do, foreign ministry spokeswoman Hua Chunying gave no details but said, "We will take firm and forceful measures."

"Shocked" China Set To Hit Back At Trump "In Other Ways” –- One of the key features of Trump's newly proposed $200BN in 10% tariffs on Chinese exports, is that Beijing simply has no way to retaliate proportionately: after all the US does not export that much to China. That does not mean that Beijing is limited in its reactions: as we discussed last night, Beijing may simply increase the rate on existing tariffs, or expand quantitative tariffs to "qualitative" as Barclays suggested on Monday, or of course pursue even more drastic measures such as devaluation or dumping US assets.And, as the WSJ writes, China is now contemplating precisely such an approach, and is planning to hit back at Trump "in other ways", such as holding up licenses for U.S. firms, delaying approval of mergers and acquisitions involving U.S. companies and ramping up inspections of American products at borders.While a Commerce Ministry statement on Wednesday described Beijing as “shocked” by the U.S. action and said China “has no choice but to take necessary countermeasures", behind the scenes officials have described the mood as more cautious.Specifically, senior Chinese officials are weighing how far to press the retaliation without hurting other national interests. The retaliatory measures are the kind of nontariff barriers that U.S. and European businesses have long complained about, and Beijing is actively courting allies in Europe and elsewhere to fight what officials call U.S. “trade bullying.”China also needs the U.S. for more than just trade. “The U.S. is not China’s enemy as both countries face many common challenges,” said one of the officials, listing climate change, terrorism and other problems. And the tariff battle threatens to sap an already weakening Chinese economy.

The US is 'winning' the trade war, says Mohamed El Erian - As trade tensions continue, Mohamed El-Erian told CNBC that the U.S. is winning the trade war. In relative terms, we are winning and we will win the trade war," El-Erian, chief economic advisor at Allianz, said Monday on "Fast Money." El-Erian is considered one of the most influential financial market thinkers in the world."Just look at the performance of U.S. markets relative to China and relative to others," said El-Erian, who was CEO of Pimco. "That is consistent."President Donald Trump first proposed tariffs in March to correct what he deemed were unfair trading practices. Last week, the administration imposed duties on $34 billion worth of Chinese goods. Beijing immediately retaliated with tariffs of its own and accused the U.S. starting the "largest trade war in economic history."Meanwhile, investors have been on edge amid the trade tensions. All three major indexes closed up Monday, leading some to conclude that trade fears are waning. "The tit for tat continues, but ultimately it doesn't lead to a full-blown trade war," El-Erian said."When people realize that at the end of the day, the U.S. will prevail, because [China] is a less open economy, because [the U.S.] is a more dynamic economy, that ultimately you may end up in a situation where the U.S.' position in global economic terms is better off," he said.Still, some fear that Trump's nontraditional negotiating tactics may have gone too far. El-Erian said as long as the risks are managed, "One of the upside risks, is that you may end up changing the global landscape in a way that favors the U.S. Because countries will realize, if we slip into a trade war, while everybody suffers, [the] U.S. does better in relative terms," he said. "The rest of the world is less solid than the U.S.," El-Erian said.

After Trump backs it into corner, 'inevitable' China hits US supply chains next, UBS economists say - UBS economists said Wednesday their prior assumption was wrong and they now believe the U.S. trade war with China is escalating and could hurt the economy. Their note followed the Trump administration's announcement Tuesday that it plans tariffs on a further $200 billion in Chinese goods.The economists said they now see the potential for a trade war that could cause supply-chain disruptions, create inflation and bite into GDP.They said they had expected just a list of new tariffs, but the U.S. Trade Representative is seeking an expedited process to impose the tariffs as part of its existing case. That means the supplemental action will have its own hearing Aug. 20-23 and could be implemented by the end of September."Once the administration implements the additional $200 billion in tariffs, the Chinese government will almost surely retaliate. On this path, the US government would then almost surely retaliate in response, raising the stakes immediately to $450 billion in imports of Chinese goods under tariff," they said in a note.The UBS economists said the $50 billion was aimed to limit economic damage and alternative goods were available to replace impacted goods. "At $450 [billion], the list becomes comprehensive and supply-chain damage seems almost inevitable; many of the goods on the longer list are imported largely from China, making substitution essentially impossible. Such an escalation pushes the situation from a trade skirmish to a trade war," they said.The economists said they had not included an escalation in their economic forecast, and the larger amount of tariffs would do economic harm, weigh "substantially on GDP growth and boost US consumer inflation."The economists say there is a way to reach a positive outcome through negotiations, but with the escalation the path to resolving the disputes has "narrowed substantially."The U.S. imposed tariffs on $34 billion in Chinese goods last Friday, and China retaliated with a like amount. An additional $16 billion in goods are expected to be tariffed under this first $50 billion round. But the second round had come sooner than expected, with more detail. News of the new tariffs sparked a global equities sell-off Wednesday."While we now believe these new tariffs will be implemented, understanding their precise effects requires detailed analysis and a specific forecast of further actions both from China and the U.S.," they wrote.

Here's the list of Chinese products that Trump is threatening with new tariffs - The Trump administration on Tuesday released a list of Chinese goods— with an annual trade value of about $200 billion — that may be subjected to 10 percent tariffs.That was the latest salvo in an escalating trade war between the world's two largest economies. On Friday, the U.S. initiated a round of 25 percent levies on $34 billion worth of Chinese goods, which affected products such as water boilers, X-ray machine components, airplane tires and various other industrial parts. China soon after implemented retaliatory tariffs on its own list of $34 billion worth of American goods, including soybeans, pork and electric vehicles.Tuesday's list appears to target China’s important manufacturing export industries. It includes electronics, textiles, metal products and auto parts. Under those industries, specific products such as refrigerators, bags, cotton and Chinese steel and aluminum products are on the list.The food and personal products industries are also set to be affected. Fish products such as sardines, tuna and cod are on the extensive list, as are many kinds of produce such as garlic, cabbage, oranges and cherries. Beauty goods including shampoos and make-up products are also set to be penalized. For the full accounting of Chinese goods that the Trump administration plans to target, see this list from the United States Trade Representative.

Goldman: US-China Trade War Set To Worsen - Echoing the comments laid out last night by Standard Chartered's Steven Englander, this morning Goldman Sachs doubled down on how the US-China trade war will progress in the near-future, warning that it expects the tensions to get worse, at least initially. Speaking to Bloomberg TV, Goldman's co-head of EM and FX research, Kamakshya Trivedi, said that "we think that trade tensions will probably worsen before they get better."Trivedi also predicted that "we’ll see probably see more weakness in the renminbi” over the next three to six months, a prediction that certainly has proven accurate today, with the onshore Yuan sliding to the lowest level since August 2011."  In a separate note, overnight Goldman economist Alec Phillips writes that the release of the list of $200BN in tariffs on Chinese imports "raises the probability that further tariffs will be implemented" adding that Goldman was somewhat taken aback by the timing of the announcement: ""We had expected that the next round of tariffs on $16bn in goods could be implemented by late August or early September, so the implementation of this next round of $200bn, if it happens, looks unlikely to occur until September at the earliest." Phillips also writes that networking equipment, computer components, and furniture would be the most heavily impacted imports in the newest round of tariffs. He adds that the list avoids consumer goods, including apparel more than Goldman had expected, while share of computer components, furniture affected is larger than anticipated. The Goldman analyst also observes that "some imports that are supplied almost entirely by Chinese manufacturers were excluded from the list, including cell phones and toys."

Trump’s trade opponents on Capitol Hill lie in wait - It may not have been the vote Sens. Bob Corker, Jeff Flake, Pat Toomey and other vocal critics of President Donald Trump’s tariff actions wanted, but with a raft of new tariffs on the way it could be the start of a movement.  “We couldn’t have won a binding vote today, but a couple of weeks from now we might be able to,” Flake told reporters Wednesday after an 88-11 vote on a symbolic measure pushing back against Trump’s tariffs. The non-binding motion instructs lawmakers working to reconcile an unrelated spending bill to include language recognizing Congress’ role when the president invokes a law that allows him to impose tariffs for national security reasons.  Flake was under no illusion that conferees on the spending bill would follow the instruction. He added he’s gotten “no assurance” from GOP leaders that they would support an effort to push through a more substantive measure that would go even further by allowing Congress to block Trump from imposing any more tariffs for national security reasons under Section 232 of the Trade Expansion Act of 1962.For now, the ardent free trader seems to be biding his time until “tariffs begin to bite across the country” and is hoping Wednesday’s vote will hold lawmakers accountable if or when a binding measure comes up. He said its most likely chance of moving would be as part of a revenue bill. “We put members on record supporting Congress having a role,” Flake said of the motion. “Now, once you vote that way, how can you say to your constituents, ‘Well, when it’s real, I’m not going to vote this way.’” Read the full story here.

China's Trade Surplus With US Hits All Time High At Worst Possible Time - Overnight China reported its June trade data, which showed that export growth moderated modestly from 12.3% Y/Y in May to 11.3% in June, above the 9.5% consensus, however imports decelerated meaningfully, sliding from 26.0% Y/Y in May to just 14.1% in June, well below the 21.3% estimate, which may be related to the imports tariff cuts on automobiles and selected consumer goods effective on July 1. In sequential terms, exports increased 0.4% M/M, at the same pace as in May, while imports declined -3.2% M/M slowing from +2.8% in April. As a result of the decline in imports, the trade surplus widened to US$41.6bn from US$24.2bn in May. Tariff changes from the US and China in July can potentially distort June trade data.    In terms of exports to major destinations, the trade surplus with the European Union rose to the highest level since 2011, while the deficit with Japan shrank, as exports growth to Japan slowed while going up modestly to other major trade partners. Specifically, for major DMs, exports to US and EU inched up to +12.6% yoy and +10.4% yoy from 11.6% yoy and 8.5% yoy in May, while that to Japan slowed to 6.9% yoy from 10.2% yoy in May. For major EMs, exports to ASEAN grew by 19.3% yoy, up from +17.6% yoy in May.But the most notable part of the trade report is that despite the modest slowdown in trade - and the latest development which may potentially add more fuel to the US-China trade war fire - China’s monthly trade surplus with the U.S. rose to a record in June at the worst possible time, as the number is sure to further infuriate Trump (and certainly Peter Navarro) and underlines the imbalance at the heart of an escalating trade war between the world’s two largest economies. Specifically, China's customs reported that the trade surplus with the U.S. stood at $28.97 billion, the highest on record going back to 1999. Curiously, imports from the US rose at the same time as exports also climbed to $42.62 billion, also a new high.

As Trade War Persists, Mnuchin Says China Talks Have 'Broken Down' — The trade war between the United States and China showed no signs of yielding on Thursday, as Steven Mnuchin, the Treasury secretary, told lawmakers there was no clear path to resolution and Beijing blasted the administration over its approach.Mr. Mnuchin, who has tried to avoid calling the trade tensions with China a “war,” said talks with Beijing had “broken down” and suggested it was now up to China to come to the table with concessions. President Trump, speaking in Brussels on Thursday, described the trade talks with China as a “nasty” battle.The Chinese, meanwhile, accused the United States of “acting erratically” and said the administration had “blatantly abandoned the consensuses that two sides have reached and insisted on fighting a trade war with China.” Republicans and Democrats on the House Financial Services Committee showed little patience for Mr. Mnuchin’s answers about the lack of progress, repeatedly pressing him about whether there was a strategy to resolve the trade war and expressing concern that it was starting to hurt parts of the economy. The White House has already hit Beijing with tariffs on $34 billion worth of imports and China has responded with a similar amount of levies on American goods, including soybeans, pork and cars. On Tuesday, the administration outlined tariffs on another $200 billion worth of Chinese products, including many consumer products like furniture, dog leashes and fish.“Is there a master plan?” asked Representative Mia Love, Republican of Utah. “I implore you to work to end this thing soon.” Lawmakers from both parties have been bombarded with complaints about tariffs from soybean farmers, carmakers, nail manufacturers and other businesses about the fate of their industries as they are starting to face higher steel and aluminum costs and feel the pain of retaliation from Europe and China. On Thursday they pressed Mr. Mnuchin, who is seen as a voice of moderation on trade in the administration, to persuade Mr. Trump to back away from the trade war.

Treasury Department Responsible For Trade Policy Rocked By Wave Of Departures - President Trump's war on the Washington swamp has had some unintended casualties at the Treasury Department's international affairs unit - which Bloomberg characterized as a "key office in the Trump administration's escalating trade battles with China and Europe" - as roughly 10% of the department's career staff have quit since September. And President Trump's federal hiring freeze has made it impossible to replace them, just as the administration's trade war with China has been ramping up. According to Bloomberg, most of the departures have blamed President Trump's pick to run the department for inspiring them to leave. David Malpass, who has been a vocal proponent of Trump's protectionism, is probably best known for being Bear Stearns chief economist in the years leading up to the financial crisis. According to the department's malcontents, Malpass has been involved in some high profile bungles recently, like when he said back in March that Beijing had ended formal economic talks on the eve of the G-20 summit in Buenos Aires, before later saying that he "misspoke."  But even with full staffing, some people say that Malpass, who was confirmed by the Senate, is mismanaging the unit. They note that Treasury Secretary Steven Mnuchin has dressed down Malpass for striking too hard a tone in public statements about China -- an episode that harmed morale throughout the unit. Malpass, 62, worked in the Treasury and State Departments during the administrations of Ronald Reagan and George H.W. Bush and later became chief economist at the now-defunct Bear Stearns. Malpass was a senior economic adviser on Trump’s presidential campaign. At Treasury, he succeeded Nathan Sheets, who held the post under Obama. Among the departing staff is Mark Sobel, a 40-year veteran of the department who was respected for having "the most institutional and cultural knowledge of international affairs at Treasury." Sobel has blamed the administration for, among other things, allowing too many officials to speak publicly about dollar policy.

Trump tariffs prompt rising fear, anger from GOP, business | TheHill: Business groups and congressional Republicans expressed increasing frustration on Wednesday with President Trump’s escalating trade fight with China. They say it’s time for the U.S. and China to get back to the negotiating table and hammer out a deal that would stop the steady stream of tit-for-tat steep tariffs.The Trump administration’s latest salvo would apply a 10 percent tariff on $200 billion worth of Chinese goods, which is in response to Beijing’s retaliation for a previous round of U.S. duties. A final decision on the tariffs will be made sometime after Aug. 30. The latest list of targeted Chinese imports, which was released by the Office of the U.S. Trade Representative (USTR) on Tuesday night, comes on the heels of the U.S. move to levy a 25 percent tariff on $34 billion in Chinese imports. China immediately struck back with retaliatory tariffs on $34 billion of U.S. goods. The U.S. and China each have said they will impose tariffs on another $16 billion of each other’s goods in the coming months, adding up to $50 billion total by each country. The fight drew ire from technology, manufacturing, agriculture and retailing groups, which argue that Trump’s tariffs will hurt U.S. consumers and businesses. “The last thing America’s manufacturing workers need is an escalating trade war,” said Jay Timmons, president and CEO of the National Association of Manufacturers. “America has China’s attention, so instead of more tariffs, the U.S. and China should immediately begin working toward a fair, bilateral, enforceable, rules-based trade agreement to end China’s market-distorting activities,” Timmons said. “We can’t afford to wait any longer.”

Trade Tariffs Could Push Shipping to the Edge – WSJ -- Trade tariffs between the U.S., China and Europe add to the problems confronting the global shipping industry, which was already struggling this year with weak demand and high fuel prices. Container ships, which move $4 trillion worth of products each year, are suffering from weak freight rates, owing to a glut of boats in the water. Despite consolidation that has left the market dominated by a handful of players, companies have recently issued profit warnings, suspended some sailings and scrapped a planned IPO. The first round of tariffs kicked off Friday, affecting $34 billion worth of Chinese products, with Beijing saying it will retaliate, slapping similar levies on U.S. imports. The moves mostly apply to engines, medical equipment, semiconductors and other products that account for about 6% of total China-U.S. container-trade capacity, according to the Journal of Commerce. “Right now it only gets worse for shipping from the escalating trade war,” said Peter Sand, chief shipping analyst at BIMCO, an industry group. “A lot of uncertainty is added.” Soybeans, moved by bulk carriers, will be hit. China is the world’s biggest importer of soybeans and America’s biggest market. Last year the U.S. exported $14 billion worth of soybeans to China, according to the U.S. Department of Agriculture. Brokers in Singapore said U.S. cargoes could dry up, and China is already pumping up soybean imports from Brazil.   The National Retail Federation, the biggest retail trade association in the U.S., said in a statement that container volumes at big U.S. ports in May were up 11.6% from April, at 1.82 million boxes, and 4.3% on the year. The NRF expects box numbers to grow every month until November. “As tariffs begin to hit imported consumer goods…these hidden taxes will mean higher prices for Americans rather than significant changes to international trade.” NRF Vice President Jonathan Gold said.

Rare earths could be crucial as US-China trade war continues -- Amanda Lacaze grabbed her iPhone and rattled off names of special minerals in it. The screen was polished with lanthanum and cerium. The inside has a magnet with neodymium and praseodymium. Those minerals likely came from China. Lacaze’s job is to give the world an alternative source, in case a global trade war spirals out of control and China cuts off supply. Right now, she can’t. Her company, Lynas Corp., provides a fraction of the rare earth minerals China produces. That source isn’t a sure thing: The work is volatile, complex and expensive. Lynas once came close to collapsing. The Trump administration amped up its trade fight with China on Tuesday when it threatened tariffs on another $200 billion in Chinese goods — from frozen catfish fillets to copper wires. China has threatened to match, dollar for dollar. It has other ways to retaliate beyond tariffs, like refusing to buy U.S. products or intensify regulation of U.S. companies in China. It could offload pieces of its portfolio of Treasuries, rattling the bond market. Beijing could cut off key parts of the global supply chain. China is the major supplier of mundane but crucial materials needed in the world’s factories, like arsenic metals, for semiconductors; cadmium, found in rechargeable batteries; and tungsten, found in light bulbs. A trade war risks putting minerals in the conflict, giving China a way to get back at the United States by cutting off supplies to U.S. companies. Rare earths are among the list released Tuesday of Chinese-made goods the Trump administration may tax. It is hard to go a day without rare earths. They are found in smartphones, televisions, hair dryers, electric and hybrid cars.

 Sonoco Hikes Some Prices By 4% In Response To Tariffs -- Yesterday we showed that Friday' trade war is already starting to impact prices of US goods sold in China, with Tesla announcing prices hikes on its Model S and X of roughly 20% across the board as a result of new tariffs imposed on imported cars by Beijing.Today, in a similar move but in the opposite direction, US petrochemical company  Sonoco announced that will raise prices on all composite cans and metal ends in the U.S. and Canada by 4%, in response to recent tariff announcements, with the price increases effective Aug. 1.“Sonoco’s global sourcing power and commitment to supply security have allowed us to effectively mitigate historic inflationary pressures,” said Robin Gordon, division vice president of sales for Sonoco’s U.S. and Canada composite cans and metal ends.“However, the recent trade announcements assigning tariffs on the steel and aluminum supply, along with strong regional demand, have placed unprecedented stress on our suppliers’ feedstocks and corresponding input costs. While we will continue to monitor the domestic and global sourcing landscape to find ways to mitigate inflation, we do need to recover our current cost exposure. We will continue to work with our suppliers to ensure supply security and find ways to bring input costs down over the coming months.”The action is in response to Trump's 25% tariff on steel imports and 10% tariff on aluminum imports from Canada, Mexico and the European Union.  Yet what is odd, is that in a note released today, Goldman continues to press the case that trade war will have a negligible effect on economic growth and inflation: We continue to believe the effects of the tariffs imposed to date should be small. We expect that these should lower the level of GDP by only 1-2bps, and increase core PCE inflation by about 4bps (yoy) once they are phased in.

Six Lies on Trade -  Dean Baker - After 500 days of Donald Trump’s presidency, it is clear that any relationship between his statements and the truth are purely coincidental. He even boasts about his lack of interest in the truth, touting the fact that he had no idea what our trade deficit was with Canada when he confronted Canadian Prime Minister Justin Trudeau over our “$100 billion trade deficit.” (The actual figure is around $20 billion.)But Donald Trump’s contempt for the truth should not cause the rest of us to become liars also. In fact, it is more important than ever that progressives ground arguments in reality. This is especially the case with trade, where lying was standard fare long before Donald Trump entered politics. Here are six common lies which deserve major pushback any time they appear.

  • 1. Everyone gains from trade. This is not even the textbook story. The textbook tells us there are winners and losers. In the standard story, the winners gain more than the losers lose. This means that the winners could compensate the losers so that everyone is better off. In the real world, this compensation never takes place, so the losers just lose.
  • 2. The loss of manufacturing jobs was due to productivity growth, not trade. This is a classic economist’s sleight of hand. Manufacturing productivity typically increases at the rate of 2-3 percent annually. (It has been much slower in the last dozen years.) This is also roughly the rate of growth of demand, which means that increased demand for goods typically offset the jobs lost to productivity growth. The data are clear. In the three decades from December 1970 to December 2000, manufacturing employment only fell by 100,000, less than 1 percent. By contrast, we lost more than 3.4 million manufacturing jobs from 2000 to 2007 (before the crash), which was more than 20 percent of total employment.
  • 3. It is inevitable that less-educated workers lose jobs to the developing world. This is a great example where the classism of our elites obstructs clear thinking. It is absolutely true that there are hundreds of millions of people in the developing world who are willing to work in factories at a fraction of the wages that US manufacturing workers receive.  The complication is that there are also tens of millions of very smart hard-working people in the developing world who would be happy to work in the United States as doctors, dentists, lawyers or as other highly paid professionals at a fraction of the pay of our professionals, but we don’t allow it. Trade deals have been about lowering the pay of less-educated workers, while highly paid professionals continue to enjoy protection from international competition.
  • 4. Trade deficits don’t cost jobs. It is very popular among pundits to claim that trade deficits don’t cost jobs by pointing to our current 3.8 percent unemployment rate, even as the deficit is on a course to exceed $600 billion (3 percent of GDP) this year. While it is true that a trade deficit does not necessarily cost jobs, in a period where we are below full employment, a $100 billion increase in the trade deficit reduces demand and employment in the same way that a $100 billion reduction in investment would reduce demand and employment.
  • 5. It is important that other countries respect “our” intellectual property. Okay, it is clear that Pfizer has an interest in having its drug patents respected by China, as does Microsoft with its software copyrights and patents. But what about the vast majority of us who don’t own lots of stock in these or other companies that have intellectual property claims at risk?
  • 6. The developing world needed to kill US manufacturing to allow people to escape poverty. This is indeed a great story, but it is not true that this rise in living standards had to come at the expense of manufacturing workers in the United States and other wealthy countries. In the 1990s, the countries of East Asia (the big success stories) had even more rapid growth than they did in the last decade. This was a period in which they were running large trade deficits, with the important exception of China, which had nearly balanced trade.

US Military Purging Foreign-Born Service Members - -The US military has begun discharging some of its immigrant recruits as the immigration debate in Washington, DC, reaches fever pitch.The Pentagon has started to dismiss US Army reservists and recruits who joined the service through a recruiting program instituted under former President George W Bush in 2002. Known in the military as MAVNI, Military Accessions Vital to the National Interest was set up to attract healthcare specialists and individuals knowledgeable in one of 44 foreign languages to boost personnel numbers in the US military, Stars and Stripes notes. After kicking off, MAVNI evolved from a special program to "recognize" foreign-born servicemembers and offer them "expedited" paths to citizenship into a major recruiting channel by 2009. Under the program, recruits only needed an "honorable service" designation from the military for expedited naturalization, which one can receive after only a few days of boot camp.According to Margaret Stock, an immigration attorney in Alaska who helped create MAVNI, dozens of legal immigrant recruits have unexpectedly been discharged from the military in recent weeks, Stars and Stripes reported July 5. Individuals who held a green card, asylum or refugee status, or a non-immigrant visa for at least two years were eligible to apply for the MAVNI program. The military has delayed basic training for some of these individuals so they can't become naturalized through MAVNI's special designation anymore.

 Iraq war contractor ran US detention centre for immigrant children -- The “war on terror” has now come home in the form of the US government’s war against immigrants. A report released last week by Reveal, the website of the Center for Investigative Reporting, exposed the existence of a detention facility for immigrant children run by private defense contractor MVM.The children were held in a large, vacant office building close to downtown Phoenix, Arizona. MVM, a Virginia-based company founded by three former Secret Service agents, at one time supplied guards for CIA-run prisons in Iraq. Since 2014, the company has received contracts worth nearly $248 million, ostensibly to transport immigrant children. However, cell phone video footage recorded by concerned neighbors shows that MVM actually detained children in the Phoenix office building during the three weeks when the Trump administration was openly pursuing a policy of separately detaining all children from families arrested at the US-Mexico border. Lianna Dunlap, a 25-year-old teaching assistant for children with autism, began recording the video footage when she saw white vans filled with dazed-looking children being unloaded into the formerly vacant office building for the second day in a row in early June. Some were so young, they had to be carried into the facility. The few voices she could hear made it clear that the children were Spanish-speakers. Initially concerned that the children were being trafficked, Dunlap soon began to suspect that what she was witnessing was the detention of children who had been torn from their parents at the border under Trump’s “zero tolerance policy.” Concerned neighbors who tried to talk to the few on-site workers met with terse replies, if any. None saw the children outside the facility after they had been brought in. However, they did see food and water being brought in. Three weeks after the first vans were sighted, Dunlap and others noticed the presence of five unmarked white vans to take the children away. The timing coincided with Trump’s executive order back-pedaling on family separations.

The Eugenicist Doctor and the Vast Fortune Behind Trump’s Immigration Regime - Last month, as parents arrested at the U.S.-Mexico border were separated from their children and transferred to detention centers more than a thousand miles away in the Pacific Northwest, Thomas Homan, the acting director of ICE, was speaking at the National Press Club in Washington, DC, at an event hosted by the Center for Immigration Studies. “A lot of people want to attack ICE. I see it every day. They want to call ICE racists, they want to call us Nazis,” he said. However: “We’re simply enforcing the laws on the books.” Homan, who will step down next month, came out of his brief retirement early last year to run ICE at President Trump’s request. A 35-year veteran of law enforcement whose father was also a cop, Homan is every part the jack-booted thug. On this occasion, he was playing the role for an audience of think tank staffers and lanyard-toting nerds. “Don’t vilify the men and women of ICE, don’t vilify the men and women of Border Patrol for simply doing their jobs,” he said. “If you think ICE is racist—is Congress racist because they enacted these laws? Think about that for a minute. The men and women of ICE deserve thanks from this country.” While the Center for Immigration Studies bills itself as an independent, non-partisan research organization, it is in fact a key node in a small network of think tanks and nonprofits, founded and directed by a man whose private correspondence contains praise for anti-Semites, fascists, and race scientists of various ideological backgrounds, many of whom would go on to figure prominently in today’s so-called alt-right and financed largely by one of the oldest and wealthiest families in America. That man is John Tanton, an aging ophthalmologist from Michigan; his benefactor was Cordelia Scaife May, heir to the Scaife family fortune, a branch of the Mellon family. Neither were world-historical political masterminds, but they were vectors for world-historical forces: The institutions they created together show more clearly than most how capitalism and white supremacy are mutually constitutive; how the ruling class uses racial resentment to reinforce its rule; and how the spoils of imperialism are redeployed toward maintaining the internal colonies, racial hierarchies, and economic order of our age.

 A March For the Marchers -- The mood at the Families Belong Together marches this weekend was effervescent and ebullient. Subjected to a sordid panorama of pain at the border, white liberal America vented its frustrations in a spectacle of its own. There were children here, too, many riding along in strollers that cost as much as a down payment on a small car. Their parents sweated; it was hot all across the country, lending marching a sanctimonious halo, the luminosity of selfless sacrifice. The babies at the border must not be snatched, many of the signs and placards declared. . Others demanded the abolishment of ICE. “Its 95 degrees: Let’s Melt ICE,” said one sign, the weak joke exposing the privilege of the person carrying it. And so they marched, the well-intentioned white opponents of Trump, sweaty and eager and energized by the presence of others just like them, everyone cheerily engaged in a weekend morning of brunching and resisting.In it also lies the tragedy of all the marches that took place this weekend, marches whose agendas, mien, and manner are all crafted to fit the anger of the urban and privileged and white and American born that participated in them. A Saturday given up to a march, an exhausting physical act, was quickly packaged up as a glib stand-in for any deeper examination of complicity. A moment of rage became just another opportunity for virtue-signaling, and marching the sum of the “doing something” to be shared with friends and on social media.  Despite all their incipient good intentions, marches do not help undocumented immigrants. The people swiftly mowing lawns, cleaning hotel rooms, and tending children remain as invisible after the march as they were before it. Enraged at the Trump Administration’s snatching of the babies at the border, the marchers made no moves to understand the un-dramatic distress of the undocumented others all around them. Their apathy revealed a terrifying truth: the abstract, unknown immigrant is gladly lavished with sympathy; the real one, riven with the scratches and scars and complexities of actuality, receives almost none.

Trump admin lost track of parents of 38 young migrant children — Government lawyers said Friday that they cannot locate the parents of 38 migrant children under the age of 5, as a federal judge indicated he is open to extending the deadline for reuniting nearly 3,000 children separated from their mothers and fathers while crossing the US-Mexico border.In a status hearing with U.S. District Judge Dana Sabraw of the Southern District of California, who ordered the reunification, government lawyers said the Health and Human Services Department would only be able to reunify about half of approximately 100 children under the age of 5 by the court-ordered deadline of July 10.For 19 children, their parents have been released from custody into the U.S. and their whereabouts are unknown. The parents of another 19 children have been deported."The way [a family separation] is put in the system is not in some aggregable form, so we can’t just run it all," said Sarah Fabian, the Justice Department attorney representing the government before Sabraw. Sabraw said he would agree to delay the deadline for reunifying the youngest children if the government could provide a master list of all children and the status of their parents. Sabraw ordered the administration to share a list of 101 children with the American Civil Liberties Union by Saturday afternoon. The judge scheduled a status conference for 10 a.m. Pacific time on Monday. A government lawyer said she could not attend a status conference over the weekend because she had out-of-town dog-sitting responsibilities."The government must reunite them," Sabraw said. "It must comply with the time frame unless there is an articulable reason."

U.S. to reunite only half of young migrant children by Tuesday deadline (Reuters) - The U.S. government is struggling to reunite immigrant families it separated at the border with Mexico and only about half the children under age 5 will be back with their parents by a court-ordered deadline of Tuesday, a government attorney told a judge on Monday. U.S. Judge Dana Sabraw in San Diego last month ordered the government to reunite the approximately 100 children under the age of 5 by Tuesday, and the estimated 2,000 older children by July 26. Sarah Fabian, an attorney with the U.S. Department of Justice, said 54 children younger than 5 would be reunited with parents by the end of Tuesday, and the number could increase depending on background checks. The other parents have either been deported, failed a criminal background check, were unable to prove they were the parent or had been released and immigration agents had been unable to contact them, said Fabian. The children were separated under U.S. President Donald Trump’s “zero tolerance” policy that called for the prosecution of immigrants crossing the border illegally. The separations were in place from early May until Trump stopped the practice last month in the face of intense criticism. Trump made cracking down on illegal immigration a key part of his presidential campaign in 2016. The judge directed the government to file a detailed accounting of the reunification process and scheduled a hearing for Tuesday at 11 a.m. PDT (1800 GMT). Lee Gelernt, an attorney for the American Civil Liberties Union, which brought the case, said he did not think the government was complying with the reunification order. “It is very troubling that there are children and parents who are not in some kind of government tracking system,” he said after the court hearing. He added that nonprofit groups were trying to find parents the government had failed to locate, who are mostly from El Salvador, Guatemala and Honduras. He also questioned if the government’s list of children under the age of 5 was accurate.

Trump administration misses deadline to reunite immigrant children with parents - The Trump administration missed a court-imposed deadline Tuesday to reunite all young immigrant children who had been separated from their parents under the Trump administration’s “zero tolerance” immigration policy.In a separate ruling Monday, a federal judge in California ruled that families cannot be detained indefinitely during immigration proceedings.At the same time, the Trump administration continues to escalate its attacks on immigrants, democratic rights, and the working class as a whole, as exemplified by the detention and imminent deportation of an El Salvadoran journalist by Immigration and Customs Enforcement (ICE), and the Border Patrol’s harassment of US and Canadian fishing vessels in waters off the coast of Maine.On June 26, a federal judge in San Diego set a July 10 deadline for the federal government to reunite all children under the age of five forcibly removed from their parents at the US-Mexico border and held in prison camps pending the result of their parents’ immigration court case.By Monday, however, ICE was only able to locate parents for 54 out of 102 such children the agency reported to be in detention, according to the agency’s lawyer Sarah Fabian. Fabian further stated that nine of those parents have already been deported and an additional nine had been released but their whereabouts are unknown, while an unspecified number have criminal records that prevent reunification. However, she failed to specify the nature of these alleged crimes, so it is likely that at least some of these were convicted of the supposed “crime” of crossing the southern border without proper documentation.

Trump administration defends missing court deadline to reunite immigrant families - The Trump administration has missed the court-imposed deadline to reunite all migrant children under the age of five with their parents. Though the measure was a calculated and cruel political maneuver, the administration publicly stated that it could not release children because it could not locate or vet their parents. Trump remained unapologetic about his administration’s failure to reunite migrant families. Speaking to reporters as he and his wife jetted off on their trip to Europe, the President told reporters that he had a solution to the issue of family separations: “Tell people not to come to our country illegally… That’s the solution… Come like other people do. Come legally.” Trump also dismissed the claims that the administration’s policy of separating parents from children has caused harm to the children: “We have laws. We have borders. Don’t come to our country illegally. It’s not a good thing.” In an attempt to tap into the legitimate and growing public anger over these inhumane policies, a number of Democratic politicians have repeated popular demands to abolish Immigration and Customs Enforcement (ICE). In his conversation with reporters on Tuesday, Trump made it a point to defend ICE against the supposedly vicious attack by the Democratic Party. “As far as ICE is concerned, the people that are fighting ICE? It’s a disgrace. These people go into harm’s way. … So we ought to support ICE, not do what the Democrats are doing,” Trump said. “Democrats want open borders, and they don’t mind crime. We want no crime, and we want borders where borders mean something. And remember this: Without borders, you do not have a country.”  The role of ICE in the continuing harassment of immigrants, whether at the border, at detention camps, at workplaces, and even at immigrants’ homes is well documented. The agency, with its expanding budget, manpower and militarized nature, is the American Gestapo, paving the way for an attack on the rights of all workers, immigrant and nonimmigrant alike.

Only 57 of 3,000 immigrant children have been reunited with parents -  The Trump administration has blatantly ignored a court order requiring it to reunify children under the age of five who were separated from their parents at the US-Mexico border. Out of 103 of the youngest children, only 57 children were reunited with their parents while the remaining 46 were deemed “ineligible” for alleged “safety” reasons or because their parents were already deported or in criminal custody. That means that roughly 2,950 of the 3,000 children separated from their families have not been reunited with their parents.Last month, US District Judge Dana Sabraw established a series of deadlines for the Trump administration to reunite the nearly 3,000 children separated from their parents, mostly under the administration’s “zero tolerance” policy. The first group of children was required to be reunited with their parents by Tuesday.The government falsely claims that it is in full compliance with Sabraw’s order. Attorney General Jeff Sessions, Homeland Security (DHS), Secretary Kirstjen Nielsen and Health and Human Services Secretary (HHS) Alex Azar said in a joint statement that their departments “worked tirelessly” to safely reunite children, and the Department of Justice (DOJ) has been negotiating with Sabraw to carve out exceptions.The media has effectively abandoned the issue, deeming it resolved. The media has instead focused on bogus allegations of “Russian intervention” in the US elections. But in reality, hundreds of parents will never see their children again as a result of Trump’s policy.Half of the children under the age of five who were not returned to their parents were not returned because the parents are in criminal custody in the United States or have been sent back to their home countries. Twelve parents have already been deported and have found it impossible to locate their children. The US government claims that it is working with foreign consulates in an effort to return children to the deported adults, officials said. Although the Trump Administration has claimed that it has stopped large-scale separations of families at the border, some parents claim that they were separated from their children after the supposed halting of the family separation policy. Even if the family separation policy were actually halted, the change would only mean a return to the status quo previously set by the Obama administration under which families were detained together in immigration jail.

Andrew Cuomo’s Biggest Donors Rake in Millions From ICE -- Andrew Cuomo has a glaring conflict of interest when it comes to the politics of abolishing ICE. Luxury landlords across the state collect millions in rent from the agency — money they have turned around and funneled to Cuomo’s political campaigns, according to a new report by the New York-based watchdog group Public Accountability Initiative.Cuomo, meanwhile, hasn’t joined other New York politicians — from likely incoming Rep. Alexandria Ocasio-Cortez to 2020 hopeful Sen. Kirsten Gillibrand — in calling to dismantle Immigration and Customs Enforcement, instead telling NY1 recently that the agency “should be a bona fide law enforcement organization that prudently and diligently enforces the law.”Looking largely at publicly available data from the General Services external lease database, PAI researchers have documented extensive financial ties from Cuomo donors and members of his inner circle to ICE and Customs and Border Protection — the main agencies tasked with carrying out America’s increasingly brutal immigration policies. Since his first run for governor in 2011, PAI found that Cuomo has accepted at least $807,483 from companies, individuals, and the relatives of people who rent space to federal immigration authorities, and furnished many of them with positions in state government.Rob Galbraith, PAI’s senior research analyst, told me by phone, “We saw that a lot of people were investigating the private-sector actors benefiting from immigration policy. We found that there is a significant overlap [between] those actors and the landlords and real estate interests that have close ties to the Cuomo administration.” Cuomo’s primary challenger, Cynthia Nixon, who has called for abolishing ICE, wrote in an emailed statement that “while its reprehensible that Governor Cuomo has profited from ICE’s existence, it’s hardly surprising. … Many have been bewildered by the Governor’s continued support for ICE as its atrocities mount and so many other New York leaders have called for ICE’s abolition. Now we have an explanation: the Governor won’t call to abolish Trump’s rogue deportation force because his donors don’t want him to.”

California malls are sharing license plate data with ICE-linked surveillance firm -- California shopping centers are sending data from license plate readers to a private surveillance technology company that partners with Immigration and Customs Enforcement (Ice), according to a new report. The revelation comes at a time of increasing scrutiny of tech firms and private companies that build tools and provide services for the Trump administration’s increasingly aggressive immigration policy. A new research paper this week has also exposed the ways in which prison companies appear to be influencing immigration policy and profiting from expanding partnerships with Ice. The Electronic Frontier Foundation found that Irvine Company, a real estate developer that operates dozens of malls throughout California, has been conducting vehicle license plate reader surveillance for Vigilant Solutions, a firm that maintains databases and works with law enforcement. The automated license plate recognition technology allows cameras to capture images of plates and link them to GPS locations. The EFF uncovered a December 2016 disclosure on Irvine Company’s website that it was collecting license plate information along with location and time data and sending it to a “searchable database” operated by Vigilant. Earlier this year, US officials confirmed that Ice had developed a contract with Vigilant that would give immigration authorities access to the company’s vast database during investigations, sparking privacy concerns and protests. Vigilant has refused to comment on its relationship with Ice. After the EFF published its report on Tuesday, Irvine Company officials said the firm’s contract with Vigilant specified that the data was “only shared with local police departments”. Dave Maass, the author of the EFF report, told the Guardian he was skeptical of the claims from Irvine Company, which previously had disclosed few details of its surveillance efforts. “You could imagine a hypothetical situation if a mall has the Vigilant system … somebody pulls into that parking lot. Maybe Ice gets an immediate alert: ‘Here’s the person, go get them,’”

Texas Land Owners Get Gov't Letters Notifying Of "Tactical Infrastructure, Such As A Border Wall" - In the latest indication that the Trump administration may actually build the President's long-promised wall at the US-Mexico border, south Texas land owners report receiving letters from the government notifying them that their land will be surveyed for "tactical infrastructure, such as a border wall," according to KENS-TV.State Congressman Henry Cuellar (D) says that over 200 survey requests have been made by US Customs in Starr and Hidalgo counties alone. The mayor of Escobares, a tiny town of just 2,500 residents which borders Mexico at the Rio Grande river, says locals have received letters from the Army Corps of Engineers and U.S. Customs and Border Protection a few weeks ago seeking consent to survey their land.  “I walk out the back door and what I’m going to see is a 30-foot fence,” Escobares Mayor Noel Escobar said.Rio Grande City School District board president Daniel Garcia showed us the letter the school got in May. It included a map highlighting about a mile of land the government is eyeing for “tactical infrastructure, such as a border wall.”“When we voted for it, it was not for any specific reason. They just wanted to come in and survey the property,” said Garcia. Garcia said the land is not currently being used by the district and said had he known it was meant for the border wall, he would’ve voted against the agenda item. -KENS-TV 

Trump reportedly gave out his personal cell phone number to world leaders and US officials 'had no idea' he was making calls - President Donald Trump reportedly gave out his personal cell phone number to foreign leaders shortly after taking office and shocked White House officials when a summary of a conversation was released without their knowledge.White House aides who were unaware Trump had spoken to Canadian Prime Minister Justin Trudeau were startled after Canadian officials released a summary of a conversation in April 2017, according to a Washington Post report published on Friday.  "We had no idea what happened," a senior US official told The Post. During the call, Trudeau reportedly objected to Trump's and his administration's claims of a trade imbalance between the two countries.Calls with foreign leaders are usually planned ahead and scripted, requiring consultation with senior advisers, such as the national security adviser. The call is eventually transcribed and then parsed into a public statement.According to the public statement from Trump's call with Trudeau, the two leaders "discussed the dairy trade" and "discussed lumber coming into the United States." Officials reportedly had to rely on Trump's memory of the call for details, The Post said."It was a very amicable call," the public statement said.Following the incident, US officials insisted Trump adhere to the federal records law and route all calls with foreign leaders through the Situation Room.The report brings renewed scrutiny on Trump and his rumored private cellphone use, particularly after an investigation revealed that cellphone surveillance devices were discovered near the White House and other "sensitive facilities" in Washington.

Justice Department Appeals Ruling Allowing AT&T-Time Warner Merger -The Justice Department is trying to undo AT&T Inc.’s T 1.13% purchase of Time Warner Inc., appealing the ruling that last month struck down one of the era’s highest-profile antitrust challenges. The government initiated the appeal Thursday with a two-page notice in federal court, a month after U.S. District Judge Richard Leon rejected Justice Department arguments that the more than $80 billion cash-and-stock deal would suppress competition in the pay-TV industry. AT&T closed the acquisition a short time after Judge Leon’s ruling, but agreed to keep Time Warner’s cable networks in a business unit separate from AT&T’s communication assets for now, in case the government chose to appeal. The appeal won’t change anything at AT&T while the district court’s ruling remains in effect, but comes as an unwelcome distraction for the company, where executives were eager to plunge into the high-profile world of show business. The matter now goes to the U.S. Court of Appeals for the District of Columbia Circuit, where a three-judge panel will consider the Justice Department’s claims that Judge Leon was incorrect. The appeals process could take many months, leaving lingering uncertainty over AT&T’s plans. The Justice Department’s lawsuit against the merger was one of the most anticipated antitrust cases in a generation, and Judge Leon’s ruling was one of the department’s most stinging losses. The AT&T merger is a “vertical” one, combing its leading position as a pay-TV distributor—the so-called pipes, such as its DirecTV satellite service—with Time Warner content: its popular cable channels including HBO, CNN, TNT and TBS. In a more typical antitrust case, the government challenges horizontal deals involving two companies in the same business that compete head to head. The AT&T case marked the first time in 40 years that a court had seen a fully litigated challenge to a vertical merger. And it was the first major enforcement action by President Donald Trump’s antitrust chief at the Justice Department, Makan Delrahim, who filed the lawsuit two months after receiving Senate confirmation.

Administrative law judges oppose Trump executive order - President Donald Trump signed an executive order July 10 to except administrative law judges from the competitive service, meaning that agency leadership can appoint judges without competitive examination and selection procedures. Administrative law judges are appointed in a variety of federal agencies to serve as impartial figures in formal proceedings requiring a decision on the record, such as in issues concerning environmental protection, immigration, labor management relations and more. The order is based on a June 21 Supreme Court ruling in “Lucia v. Securities and Exchange Commission” that ALJs are “officers of the United States” and therefore subject to the Constitution’s Appointment’s Clause. “The role of ALJs, however, has increased over time and ALJ decisions have, with increasing frequency, become the final word of the agencies they serve. Given this expanding responsibility for important agency adjudications, and as recognized by the Supreme Court in ‘Lucia,’ at least some and perhaps all ALJs are ‘Officers of the United States’ and thus subject to the Constitution’s Appointments Clause, which governs who may appoint such officials,” Trump wrote in the executive order. “Placing the position of ALJ in the excepted service will mitigate concerns about undue limitations on the selection of ALJs, reduce the likelihood of successful Appointments Clause challenges, and forestall litigation in which such concerns have been or might be raised.”  The Association of Administrative Law Judges, however, characterized the order as an attempt at court packing. “This is an assault on due process for the American people who have a right to a neutral arbiter,”said AALJ President Marilyn Zahm in a news relase on the order. “The president’s order calls for replacing the current merit system used to hire judges with a court packing plan that will allow agency heads to hand pick judges who hear cases at the Social Security Administration and dozens of other federal agencies. This change will politicize our courts, lead to cronyism and replace independent and impartial adjudicators with those who do the bidding of political appointees. This is a decision that should be reversed. If allowed to go forward, it would be the equivalent of placing a thumb on the scale of justice.” 

Trump administration freezes risk adjustment payments - The Trump administration is halting billions of dollars of payments to insurers under the Affordable Care Act's risk-adjustment program, a move that further disrupts the insurance market and could lead to more premium increases next year. Citing conflicting federal court decisions on the program, the CMS said it cannot collect or disburse funds under the risk-adjustment program. All in all, the program was slated to shift $10.4 billion among insurers in 2017, according to the agency. The permanent program was meant to reduce the incentive for health insurers to cherry-pick healthy members. It shuffles money from plans with healthier-than-average members to those with larger numbers of sicker, higher-cost members. The program is based on a patient's risk score, which is determined by a person's demographic information and health condition. But U.S. District Judge James Browning of New Mexico ruled in February that HHS couldn't use statewide average premiums to come up with its risk-adjustment formula because the agency wrongly assumed the ACA required the program to be budget-neutral. "CMS has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets," CMS Administrator Seema Verma said in a July 7 statement. America's Health Insurance Plans said it was "very discouraged" by the CMS' decision, which comes as insurers determine their premiums for 2019 and states review those proposals. "The decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own," the group said. "It will create more market uncertainty and increase premiums for many health plans—putting a heavier burden on small businesses and consumers, and reducing coverage options. And costs for taxpayers will rise as the federal government spends more on premium subsidies." 

Trump Freezes Billions In Obamacare Payments, Outraging Insurers - The Trump administration halted billions of dollars in payments to health insurers after the Centers for Medicare and Medicaid Services, the agency that administers programs under Obamacare, announced on Saturday it was freezing payments to insurers that cover sicker patients, saying a federal court ruling ties its hands. The move brought a sharp response from health insurers warning of market disruptions and even higher costs.The payments are intended to help stabilize health insurance markets by compensating insurers that had sicker, more expensive enrollees in 2017. The government collects the money from health insurers with relatively healthy enrollees, who cost less to insure.In a Saturday announcement, the CMS said the move was necessary because of a February ruling by a federal court in New Mexico, which found that the federal government was using an inaccurate formula for allocating the payments; it added that the trial court in New Mexico "prevents CMS from making further collections or payments under the risk adjustment program, including amounts for the 2017 benefit year, until the litigation is resolved."The CMS, which is part of the Department of Health and Human Services, added that the court’s ruling bars the agency from collecting or making payments under the current methodology, which uses a statewide average premium, Bloomberg reported.“We were disappointed by the court’s recent ruling. As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold." CMS Administrator Seema Verma said in the agency’s statement.

Pfizer will roll back drug prices after discussion with Trump -- President Donald Trump today announced Pfizer would lower drug prices, although the pharma giant later clarified it would only temporarily roll back price hikes that went into effect July 1.  "Just talked with Pfizer CEO and @SecAzar on our drug pricing blueprint," Trump tweeted at 6:37 p.m. "Pfizer is rolling back price hikes, so American patients don’t pay more. We applaud Pfizer for this decision and hope other companies do the same. Great news for the American people!"  Pfizer, in a statement released after the president's tweet, said its Chairman and CEO Ian Read discussed drug prices with Trump on Tuesday, about a week after price hikes on dozens of the company's drugs took effect. According to Pfizer, the company will cancel those price increases to give the president an opportunity to work on his administration's broader effort to overhaul drug prices.   "The company will return these prices to their pre-July 1 levels as soon as technically possible, and the prices will remain in effect until the earlier of when the president’s blueprint goes into effect or the end of the year — whichever is sooner," Pfizer said.

US opposition to breastfeeding reportedly stuns world health officials -- The U.S. government reportedly threatened Ecuador with trade sanctions if it didn’t water down a resolution drafted to promote breastfeeding around the world. The resolution had been expected to pass without issue at the United Nations-affiliated World Health Assembly in May, according to The New York Times. Then, without warning, the U.S. delegation requested that language asking governments to “protect, promote and support breastfeeding” was removed. After that request was refused, the U.S. delegation stated that if Ecuador refused to drop the resolution, Washington would enforce trade measures and withdraw military aid from the country, a move that reportedly shocked health officials. The New York Times claimed that Washington’s actions showed that the U.S. government was acting on behalf of infant formula manufacturers who were reportedly in attendance at the event.  Ultimately, the Russian delegation stepped in to adopt and sponsor the measure, forcing the American representatives to back down.

You Could Be Denied a Passport if You Have Unpaid Taxes -- More than 360,000 Americans won’t be able to renew or obtain a new passport if they have “seriously delinquent” tax debts of more than $51,000. Here’s how the new law works.Thousands of Americans won’t be able to get a new passport or renew their existing one until they pay off their tax debts now that the IRS is cracking down on a law passed by Congress in 2015, the Wall Street Journal reports.The 2015 law says that the IRS and State Department must deny or revoke passports from any taxpayer who owes a debt of more than $51,000 in taxes. Currently, 362,000 people fall under this law that began to be enforced in February 2018, the IRS told the Wall Street Journal. The IRS is now sending the names of people affected over in batches to the State Department, and it confirmed that passport denials have already occured and that one debtor paid off $1 million to avoid being denied a passport.Not surprisingly, that person wasn’t the only one to be incentivized by the possibility of having their travel privileges revoked. By the end of June, more than $11.5 million had reportedly already been paid off in full by 220 debtors, and another 1,400 people have signed installment agreements to ensure that they can apply for a passport. For now, the IRS says they are only denying new passports and passport renewals instead of revoking current documents, which means that anyone affected by this new law can travel abroad until their passport expires. After that occurs, they will need to pay off their debts—or arrange to pay them off in installments—before they can be given a new one.

US Supreme Court puts Amazon, Google in tax sights around the world - Amazon is the chief victim of US Supreme Court's ruling that signals a radical change in taxing rights over technology companies. AP As Australia considers new measures to tax foreign online sales, the US Supreme Court has handed down a groundbreaking judgement that signals a radical change in taxing rights over technology companies.The result in South Dakota vs Wayfair Inc handed down on June 21 has been described as the most important tax decision in half a century, the largest tax case you've never heard of.The Supreme Court's 5-4 decision overturned two previous judgements to find that online sellers had a physical presence in US states – and thus were liable to pay state sales taxes – even if it was only through cookies left on customers' hard drives or apps downloaded to customers' phones.While the decision relates only to US states, it comes as moves by the OECD, the European Commission and individual countries including Australia to establish taxing rights over digital transactions come to a head, using similar arguments about permanent establishment.   "It is of course a USA case on local laws but the underlying issue is that the recognition that physical presence that has been a touchstone of tax rules is no longer that material," Clayton Utz tax partner Niv Tadmore told The Australian Financial Review.

Nevis: how the world’s most secretive offshore haven refuses to clean up - Places such as Jersey, Switzerland and the British Virgin Islands made a handsome living from helping their clients break other countries’ laws for decades, without anyone really noticing.  Then came the 2007-8 financial crisis, and the good times ended. Rich nations, angry over the loss to their budgets caused by tax dodging, put diplomatic pressure on the havens. Activists, furious over the theft of hundreds of billions of pounds from poor countries, exposed them in the press. The release of vast troves of confidential information – SwissLeaks, the HSBC files, the Panama Papers, the Paradise Papers – cemented a public perception that offshore financial centres exist to help the powerful dodge their obligations to the rest of us, and governments have queued up to punish them. This concerted campaign has threatened the tax haven business model. Since Swiss banks were forced to open up by the US Department of Justice in 2010, their share of the world’s offshore wealth has dropped from almost half to less than a third. In the British Virgin Islands (BVI), where UK investigators now have access to corporate ownership information, the number of new companies created annually has fallen by more than 50% since 2012. Jersey’s banking sector is barely half the size that it was in 2007. Although cooperating with outsiders in this way has proven expensive, the havens clearly concluded there was little choice. If denied access to the global financial system, or sanctioned by Brussels or Washington, an offshore centre could be put out of business altogether.Yet, at the heart of this increasingly encouraging picture, there remain a few holdouts – places that have stuck to the old habit of keeping the secrets of the powerful. Foremost among them is Nevis, a solitary volcano in the Caribbean with a population of just 11,000, which has been implicated in some of the most sordid financial scams of modern times, from Britain’s biggest-ever tax fraud to the fleecing of 620,000 vulnerable Americans in a $220m payday loan scam. The story of Nevis reveals the difficulties the world faces in trying to put an end to tax evasion, fraud and kleptocracy.

"Unmasking Antifa" Act Introduced In Congress: 15 Year Sentence For Masked Mayhem - Following a spate of violent attacks by masked members of Antifa, four GOP members of Congress are taking matters into their own hands. A measure introduced last month in the House would punish anyone wearing a mask who "injures, oppresses, threatens or intimidates" a person "in the free exercise or enjoyment of any right or privilege" with a fine and up to 15 years in prison. Introduced to the House Judiciary Committee by Rep. Dan Donovan (R-NY) and co-sponsored by Peter King (R-NY), Ted Budd (R-NC) and Paul Gosar (R-AZ). H.R. 6054, the "Unmasking Antifa Act of 2018" states: Whoever, whether or not acting under color of law, while in disguise, including while wearing a mask, injures, oppresses, threatens, or intimidates any person in any State, Territory, Commonwealth, Possession, or District in the free exercise or enjoyment of any right or privilege secured to him by the Constitution or laws of the United States, or because of his having so exercised the same, shall be fined under this title, imprisoned not more than 15 years, or both.The bill also includes 2 years of jail time for "Destroying buildings or property" while wearing a mask or disguise. One of the more notable incidents of Antifa violence was an assault on a Trump supporter by Bay Area professor and anarchist, Eric Clanton, who was "unmasked" by users of popular internet forums and arrested and charged with four counts of assault with a d eadly weapon. Clanton remains free on bail, while his trial has been postponed several times.

Two Senate Democrats Call for Investigation into Smart TVs --  Jerri-lynn Scofield -- Yesterday’s New York Times reports that two Senators, Edward Markey and Richard Blumenthal, have written to Federal Trade Commission (FTC) chairman Joseph Simons asking for an investigation “into the privacy policies and practices of smart TV manufacturers.”The agency has so far taken limited steps to regulate this area– including conducting a workshop, and entering into a February 2017 settlement with Vizio, one of the world’s largest manufacturers and sellers of smart TVS, thus resolving charges that the company had collected viewing data on eleven million TVs without the knowledge and consent of consumers. From yesterday’s NYT:Companies are using new tools to identify and log what people are watching as part of an effort to profile consumers and direct ads to other devices in their homes. The letter cited a New York Times article, published last week, that detailed the practices of Samba TV, a San Francisco software company. Privacy advocates have criticized the company for not being transparent with consumers when it seeks permission to track their viewing on internet-connected TVs to sell ads.The NYT account continues:Samba TV, which said it collected viewing data from 13.5 million homes in the United States, has struck deals to place its software on certain sets from Sony, Sharp, TCL, Philips and other brands. The company essentially pays television manufacturers to be included on their sets, saying its business model “does subsidize a small piece of the television hardware,” though it declined to provide further details. When consumers set up a TV with built-in Samba software, they encounter a screen asking them to enable Samba Interactive TV. The opt-in language reads: “Interact with your favorite shows. Get recommendations based on the content you love. Connect your devices for exclusive content and special offers. By cleverly recognizing onscreen content, Samba Interactive TV lets you engage with your TV in a whole new way.”

Brett Kavanaugh Supreme Court Justice nominee: Trump announced his SCOTUS pick to replace Justice Kennedy - President Trump announced his selection of Judge Brett Kavanaugh to be his second Supreme Court justice Monday night. Speaking in the East Room of the White House, the president said that what mattered to him was "not a judge's political views, but whether they can set aside those views to do what the law and the Constitution require.""I am pleased to say that I have found, without a doubt, such a person," he said in announcing Kavanaugh's nomination. "There is no one in America more qualified for this position and no one more deserving," the president also said.The D.C. Circuit Appeals Court judge "has impeccable credentials, unsurpassed qualifications, and aproven commitment to equal justice under the law," the president continued. He's "a judge's judge, a true thought leader among his peers. He's a brilliant jurist with a clear and effective writing style, universally regarded as one of the finest and sharpest legal minds of our time."Kavanaugh thanked the president for the nomination, and in anticipating his coming meetings with senators on Capitol hill tomorrow, said, "I believe that an independent judiciary is the crown jewel of our constitutional republic." He promised, "If confirmed by the Senate, I will keep an open mind in every case and I will always strive to preserve the Constitution of the United States and the American rule of law." Within a few days of Justice Anthony Kennedy's announcement that he would retire from the court this summer, Mr. Trump had narrowed the field to four: Judges Brett Kavanaugh, Amy Coney Barrett, Thomas Hardiman and Raymond Kethledge -- all young and all viewed as conservative. Ultimately, the president settled on Kavanaugh, the establishment favorite.

Brett Kavanaugh, Trump's Supreme Court Pick, Is Probably the End of Abortion Rights and Same-Sex Marriage -- When President Trump Monday nominated Judge Brett Kavanaugh to the Supreme Court, he probably doomed the right to abortion, same-sex marriage, and maybe even contraception. Kavanaugh, 53, has spent 12 years as a judge on the D.C. Circuit Court, often thought of as the second most powerful court in the country. Prior to that, Kavanaugh worked for the Office of the Independent Counsel under Ken Starr. There, he headed up the probe into the suicide of longtime Bill Clinton attorney and friend Vince Foster and eventually helped write the Starr Report about President Clinton and Monica Lewinsky.  “Judge Kavanaugh has impeccable credentials, unsurpassed qualifications, and a proven commitment to equal justice under the law,” Trump said during a prime-time address at the White House.  That much is true.  There is no question that Kavanaugh is highly qualified and widely respected.  In addition to serving as a judge, Kavanaugh teaches at both Harvard and Yale law schools. (Well-known liberal professor at Yale, Akhil Amar, published “A Liberal’s Case for Brett Kavanaugh” in the New York Times after the announcement.) His ethical reputation is impeccable. But while Kavanaugh’s record on women’s and LGBT rights is sparse, it gives good reason to suspect that he could be the swing vote to strike down Roe v. Wade, the abortion-rights case.  This, after all, is what Trump promised in 2016: that Roe would be “automatically” be overturned should he be elected. And Kavanaugh has been praised by numerous right-wing organizations. In the case of Garza v. Hargan, the D.C. Circuit Court of Appeals held that an undocumented teenage immigrant was entitled to obtain an abortion without having to obtain familial consent (as is required in several states).   Kavanaugh vigorously dissented, asking, “Is it really absurd for the United States to think that the minor should be transferred to her immigration sponsor ― ordinarily a family member, relative, or friend ― before she makes that decision?” Surprisingly, however, Kavanaugh may not be conservative enough to survive the confirmation process. There is even talk that conservatives might revolt against Kavanaugh, as they did in 2005 against George W. Bush’s nomination of Harriet Miers.  The reason?  Many conservatives wanted Kavanaugh to cast doubt on the teenager’s right to get an abortion at all, which another dissenting judge did.

White House doesn't deny report Trump made secret deal with Kennedy over retirement, replacement -- During an CNN interview on Tuesday morning, White House deputy press secretary Raj Shah did not deny an NBC report that outgoing Supreme Court Justice Anthony Kennedy “received assurances” from President Trump that if he retired, Judge Brett Kavanaugh — one of Kennedy’s former clerks — would be nominated to be his replacement.Source familiar tells NBC that Justice Kennedy had been in negotiations with the Trump team for months over Kennedy’s replacement. Once Kennedy received assurances that it would be Kavanaugh (his former law clerk) Kennedy felt comfortable retiring – @LACaldwellDC & @frankthorp— Geoff Bennett (@GeoffRBennett) July 10, 2018 Asked repeatedly if some sort of deal between Trump and Kennedy was struck before Kennedy announced his retirement, Shah dodged, saying things like “I’m not going to read out private conversations that Justice Kennedy had with either members of the White House or the president,” and, “Justice Kennedy can speak for himself.” But what Shah didn’t do is deny the NBC report.  If NBC’s report is accurate, it means Kennedy would effectively have been given control over a SCOTUS seat for 60 years — the 30 years he served, and the 30 or so the 53-year-old Kavanaugh will likely serve on the court if confirmed.

The ‘cloistered’ Harvard-Yale law monopoly on the Supreme Court - WaPo - There are, according to the American Bar Association, slightly more than 200 accredited law schools in the United States. But assuming the newly nominated federal judge Brett M. Kavanaugh will be confirmed by the Senate to succeed the retiring Anthony M. Kennedy, all nine justices of the nation’s highest court would have attended law school at either Yale or Harvard universities.  And all but one would have received their law degree from one of those two Ivy League schools. Ruth Bader Ginsberg earned a law degree from another school — Columbia — after transferring from Harvard Law School.  Obviously Harvard and Yale are excellent schools — even if they take different approaches to teaching the law, with Yale more theoretical.  But the idea there is such little diversity on the court when it comes to law school is a problem. In 2016, Dan Glickman, a former secretary of agriculture and former congressman who is now a senior fellow at the Bipartisan Police Center, explained why on the Bloomberg Government blog: Now, both of these prestigious institutions rank among the best universities in the world. Clearly, no matter what side of the aisle you come from, we all want intelligent people on the Supreme Court. But these schools do not have a monopoly on producing smart lawyers. When an individual is able to, through force of intellect, matriculate and excel at Harvard or Yale Law they prove beyond a shadow of a doubt they are among the top minds in America’s legal community. However, there is a certain cloistered nature to joining this elite community. People of this pedigree often live in a world that does not necessarily parallel the life experiences of most Americans. And that is where more diversity is needed.

Trump’s Supreme Court pick: ISPs have 1st Amendment right to block websites - President Trump's Supreme Court nominee argued last year that net neutrality rules violate the First Amendment rights of Internet service providers by preventing them from "exercising editorial control" over Internet content.  Trump's pick is Brett Kavanaugh, a judge on the US Court of Appeals for the District of Columbia Circuit. The DC Circuit twice upheld the net neutrality rules passed by the Federal Communications Commission under former Chairman Tom Wheeler, despite Kavanaugh's dissent. (In another tech-related case, Kavanaugh ruled that the National Security Agency's bulk collection of telephone metadata is legal.)While current FCC Chairman Ajit Pai eliminated the net neutrality rules, Kavanaugh could help restrict the FCC's authority to regulate Internet providers as a member of the Supreme Court. Broadband industry lobby groups have continued to seek Supreme Court review of the legality of Wheeler's net neutrality rules even after Pai's repeal.  Wheeler's rules—which prohibited blocking, throttling, and paid prioritization—were upheld by the DC Circuit in a 2-1 panel decision in June 2016, and again when the full court denied the broadband industry's petition for an en banc rehearing in May 2017. Six judges voted to deny the industry's petition for a rehearing, while Kavanaugh was among two dissenting judges. Kavanaugh's dissent said that "the net neutrality rule is unlawful and must be vacated."

Gaius Publius: How to Block the Trump Nomination: Shut Down the Senate -- This strategy, which I’m convinced will work, comes via Vox writer Gregory Koger. It goes like this. According to the Constitution, Article 1, Section 5: Each House shall be the Judge of the Elections, Returns and Qualifications of its own Members, and a Majority of each shall constitute a Quorum to do Business.  This means: Neither house of Congress can do business without a quorum, defined as a simple majority. What if a majority is not present? Section 5 continues: a smaller Number may adjourn from day to day, and may be authorized to compel the Attendance of absent Members, in such Manner, and under such Penalties as each House may provide. This means: If there’s no majority present, the minority can compel absent members to attend. But how? Here’s there’s no answer, and in fact nowhere in our government is there a mechanism but shame for compelling congressional attendance. This gives Democrats, or Republicans for that matter, all the power they need, assuming the numbers work out right. Now consider the numbers. If there were 60 Republican senators, Democrats could absent themselves forever and nothing would change. Sixty senators comprise a quorum. Alabama Democrat Doug Jones defeated Republican Roy Moore in a special election earlier this year.  This makes the partisan divide even more favorable to the Democrats — 50-49. Fifty senators is not a majority. It would take a truly unusual ruling by the Parliamentarian to allow the Vice President to help constitute a quorum, and even if he did so rule, Democrats would then be in position to tie to their Senate chairs not only all Republican senators, but Vice President Mike Pence as well. In other words, the Democrats’ hand is even stronger.]

Mutiny on their knees: The Democratic Party’s phony opposition to the Kavanaugh nomination - President Trump’s nomination of Appeals Court Judge Brett Kavanaugh to fill the vacancy on the US Supreme Court has produced a predictable round of demagogic posturing and symbolic fist-shaking by Senate Democrats, vowing to fight against the confirmation of a justice who will give the ultra-right a solid five-member majority on the court for years to come.This, however, is only the opening scene of a hackneyed stage production whose actors are going through the well-trod motions without a trace of energy or sincerity, and who all know the outcome in advance. In one month, or two, or at the most three, Kavanaugh will be sworn in as the new associate justice of the Supreme Court, as Trump looks on approvingly and Kavanaugh’s co-thinkers in the Federalist Society celebrate.There were efforts Tuesday by the Democratic Party’s media allies to present the Democrats as engaged in a terrific fight against the Trump Supreme Court pick. The Washington Post ran the banner headline, “Democrats launch all-out blitz against pick for high court,” highlighting this quote from Senate Minority Leader Charles Schumer: “I will oppose him with everything I’ve got.” A reading of the article compels the conclusion that “everything I’ve got” is very little, except his marching orders from Wall Street, which fully backs the nomination. Schumer declares that all 49 Democratic senators would not be enough to defeat Kavanaugh and expresses the hope that two pro-choice Republicans, Lisa Murkowski of Alaska and Susan Collins of Maine, might oppose the nomination. The article goes on to explain that as many as six Democrats may defect and vote for confirmation, including three who voted for Trump’s first Supreme Court nominee, Neil Gorsuch.

In Unprecedented Move, Rosenstein Asks 100s Of Prosecutors To Review SCOTUS Pick's Records   --In a somewhat unprecedented move, Deputy AG Rod Rosenstein has asked the offices of all 93 U.S. attorneys to each provide up to three federal prosecutors to assist the Justice Department in reviewing government records of President Trump’s Supreme Court nominee Brett Kavanaugh.  Even The New York Times admits this move is "an unusual insertion of politics into federal law enforcement."While the Justice Department has helped work on previous Supreme Court nominations, department lawyers in Washington typically carry out that task, not prosecutors who pursue criminal investigations nationwide.Mr. Rosenstein’s email, which had the subject line “Personal Message to U.S. Attorneys From the Deputy A.G.,” included the sentence, “We need your help in connection with President Trump’s nomination of Judge Brett Kavanaugh to serve on the Supreme Court.”Former law enforcement officials told the Times that Rosenstein's request is troubling. "It’s flat-out wrong to have career federal prosecutors engaged in a political process like the vetting of a Supreme Court nominee. It takes them away from the mission they’re supposed to be fulfilling, which is effective criminal justice enforcement," Christopher Hunter, a former F.B.I. agent and federal prosecutor for almost 11 years, told the publication.But Michael Zubrensky, a former Justice Department lawyer who oversaw the agency's Office of Legal Policy, said Kavanaugh's long paper trail could be the reason for Rosenstein's request. Sarah Isgur Flores, spokeswoman for the Department of Justice, told the Times that prosecutors have been used in the past to vet Supreme Court nominees. "[T]he scope of the production of executive branch documents we’ve been asked for is many, many times as large," she said.

Supreme Court nominee Brett Kavanaugh piled up credit card debt by purchasing Nationals tickets, White House says -- Supreme Court nominee Brett M. Kavanaugh incurred tens of thousands of dollars of credit card debt buying baseball tickets over the past decade and at times reported liabilities that could have exceeded the value of his cash accounts and investment assets, according to a review of Kavanaugh’s financial disclosures and information provided by the White House.White House spokesman Raj Shah told The Washington Post that Kavanaugh built up the debt by buying Washington Nationals season tickets and tickets for playoff games for himself and a “handful” of friends. Shah said some of the debts were also for home improvements.In 2016, Kavanaugh reported having between $60,000 and $200,000 in debt accrued over three credit cards and a loan. Each credit card held between $15,000 and $50,000 in debt, and a Thrift Savings Plan loan was between $15,000 and $50,000. The credit card debts and loan were either paid off or fell below the reporting requirements in 2017, according to the filings, which do not require details on the nature or source of such payments. Shah told The Post that Kavanaugh’s friends reimbursed him for their share of the baseball tickets and that the judge has since stopped purchasing the season tickets. Shah did not provide the names of the friends or additional details about the tickets. Kavanaugh, who is known to be a Nationals fan, declined to comment.

After Moscow Trip, Ron Johnson Says Election Meddling Overblown - One of the Republican senators back from a trip to Moscow is suggesting that Congress went too far in punishing Russia for meddling in the 2016 U.S. presidential election.“I’ve been pretty upfront that the election interference — as serious as that was, and unacceptable — is not the greatest threat to our democracy,” Sen. Ron Johnson said in an interview with the Washington Examiner published over the weekend. “We’ve blown it way out of proportion.”“We need to really honestly assess what actually happened, what effect did it have, and what effect are our sanctions actually having, positively and negatively,” the Republican from Wisconsin said.Johnson won re-election in 2016, with President Donald Trump on the top of the ticket. He has said that the Senate may have gone too far with mandatory sanctions against a host of Russian entities, leaving Trump with too little negotiating room on other matters. He also said the sanctions did not appear to be working as intended. Other Republican senators on the trip returned to the United States with a much more strident tone, including Louisiana’s John Kennedy.Kennedy said in a CNN interview Monday that the message for Russia was, “stop screwing with American elections.” Sen. Jerry Moran of Kansas, another member of the all-GOP delegation, said their Russian counterparts pushed back whenever there were accusations made about the 2016 interference.

Manafort bank fraud trial does have Trump campaign connection, Mueller's team says - Prosecutors for special counsel Robert Mueller said in a court filing Friday that they intend to present evidence at the trial of former Trump campaign chairman Paul Manafort that a banking executive allegedly helped Manafort obtain loans of more than $6 million while the banker sought a role in the Trump campaign.  Manafort faces trial on bank fraud charges in the Eastern District of Virginia beginning July 25. Until now, there had been no indication that his role in the Trump campaign would become part of the trial, and he had asked the judge to keep details about his ties to President Donald Trump out of the trial. Prosecutors say any alleged collusion with the Russian government won’t come up at the trial. “The government intends to present evidence that although various Lender D employees identified serious issues with the defendant’s loan application, the senior executive at Lender D interceded in the process and approved the loan,” according to the filing. The bank executive “expressed interest in working on the Trump campaign, told (Manafort) about his interest, and eventually secured a position advising the Trump campaign,” the filing said. The unnamed man “expressed an interest in serving in the administration of President Trump, but did not secure such a position.”  While the senior executive is unnamed in this filing, in a previous court filing prosecutors identified Lender D as The Federal Savings Bank.

Paul Manafort mortgage bought bank CEO spot as Trump adviser: Prosecutors -- How the CEO of a small Chicago bank landed a spot on Donald Trump’s economic advisory council during the 2016 campaign has long been a mystery. Federal prosecutors provided new clues in a court filing Friday. The document suggests that Stephen Calk, the chief executive of The Federal Savings Bank, was named to Trump’s 13-member team as payback for providing a $9.5 million mortgage to former Trump campaign manager Paul Manafort. Stephen Calk, the CEO of The Federal Savings Bank in Chicago, was named to Trump’s 13-member economic advisory team in August 2016. He got that post after overruling bank employees who raised concerns about a mortgage loan application filed by former Trump campaign manager Paul Manafort, prosecutors suggested in court documents filed Friday.  Manafort is scheduled to go on trial later this month in Virginia on charges that include bank fraud. He is accused of lying on applications for two mortgages totaling $16 million. The indictment does not name The Federal Savings Bank as the lender that got defrauded, but its description of a bank that it calls “Lender D” fits with publicly available information about two mortgage loans that Federal Savings made to Manafort.

Mueller's "Pit Bull" Attorney Arranged Secret "Black Ledger" Meeting With AP Reporters - Documents released Friday by the Department of Justice confirm that a DOJ attorney known as Robert Mueller's "pit bull" arranged an April 11, 2017 meeting with journalists to discuss their investigation into Paul Manafort in which information may have been leaked back and forth concerning the case.At question is the FBI's relationship with AP - and whether or not the FBI leaked information about the Manafort case to them or vice-versa. According to memos written by FBI agents, Special Counsel attorney Andrew Weissmann, Mueller's #2 (who donated $6,600 to the DNC, Obama and Clinton campaigns and reportedly attended a Clinton election night party in NYC), arranged a meeting between DOJ/FBI officials and four reporters from the Associated Press - who told the FBI about a storage locker owned by Manafort and then gave the FBI a passcode to access it. The memos also show that one of the AP journalists gave the FBI an unusual detail about a storage unit in Alexandria, Virginia that Manafort used to keep records of his worldwide business dealings. Both memos say the AP revealed a code number to access the unit, although one memo says the reporters declined to share the unit number of the locker or its street address. -PoliticoManafort's attorneys received the documents on June 29 and revealed them in a Virginia federal court filing as part of a push for a hearing into possible leaks of sealed grand jury information, false reports and potentially classified materials.  “The meeting raises serious concerns about whether a violation of grand jury secrecy occurred,” wrote Manafort attorney Kevin Downing in a motion requesting the hearing. “Based on the FBI’s own notes of the meeting, it is beyond question that a hearing is warranted.”

Hearing on FBI role in 2016 election erupts in vicious conflict between right-wing politicians --At an all-day joint hearing by two committees of the House of Representatives, Democratic congressmen repeatedly defended the FBI and the US intelligence apparatus, while Republicans sought to discredit the investigation by special counsel Robert Mueller into alleged Russian interference in the 2016 presidential campaign. Both sections of the US ruling class—gripped by an increasingly violent factional frenzy—are deeply reactionary. The Republican Party upholds the authoritarian and anti-democratic drive of the Trump White House. The Democratic Party opposes Trump by aligning itself with sections of the military-intelligence apparatus that reject his foreign policy as erratic and insufficiently confrontational towards Russia. The nominal purpose of the hearing was to interrogate FBI official Peter Strzok about his role in the investigation into Hillary Clinton’s use of a private email server and the initial stages of the probe into Russian actions in 2016, including possible coordination with officials of the Trump presidential campaign. Strzok has become a major target of the Trump White House and its media supporters at Fox News and Breitbart, because of text messages he exchanged with his then-girlfriend, FBI lawyer Lisa Page, voicing disgust with Trump during the 2016 election campaign and the initial months of the Trump administration. Strzok was removed from the Mueller investigation after the text messages came to light and transferred to administrative duties, and Page has quit the FBI. Last month, Strzok was walked out of the FBI headquarters, and his security clearance was revoked. The Republican leaders of the two committees, Robert Goodlatte of Virginia and Trey Gowdy of South Carolina, staged the hearing as a media circus to allow Republican representatives to strike a pose as supporters of the president, denouncing Strzok for his anti-Trump bias, and to whip up right-wing opposition to the Mueller investigation, which grew out of the probe initially led by Strzok.

FBI agent Strzok defiant in face of Republican interrogation -- Republicans lashed out at FBI counterintelligence agent Peter Strzok for roughly nine hours on Thursday, berating his assertions that his anti-Donald Trump sentiment — captured in text messages exposed by an internal watchdog — never affected his work on the Russia probe. But a defiant Strzok hit back at GOP lawmakers, defending his professionalism and slamming the hearing as a “victory notch in Putin’s belt.” And he got backup from Democrats who accused Republicans of harassing Strzok and running roughshod over the committees. “Let me be clear, unequivocally and under oath: Not once in my 26 years of defending my nation did my personal opinions impact any official action I took,” Strzok said in his opening statement to the House Judiciary and Oversight committees, his first public remarks on the matter. Strzok instead cast his decision to help launch and lead the FBI investigation of Russian interference in the 2016 election as an act of patriotism in defense of American democracy. And he took a swing at congressional Republicans for targeting him as the bad guy. “I have the utmost respect for Congress’s oversight role, but I truly believe that today’s hearing is just another victory notch in Putin’s belt and another milestone in our enemies’ campaign to tear America apart,” he said. Soon after, the hearing degenerated into a partisan morass.

The wild Peter Strzok congressional hearing, explained - For months, FBI agent Peter Strzok has had a starring role in President Donald Trump’s preferred narrative that the Russia investigation is a deep-state witch hunt that’s biased against him.But on Thursday, Strzok testified for hours at a congressional hearing and gave his side of the story for the first time — and what a hearing it was. (Actually, as of press time it’s still going on, over nine hours after it started.)In a raucous, partisan, circus-like atmosphere, Strzok repeatedly claimed that his personal political views — expressed in thousands of texts sent to his coworker and lover, Lisa Page — never affected any of his decisions in either the Hillary Clinton email investigation or the Trump-Russia probe (until special counsel Robert Mueller removed him from it last summer).Strzok insisted that if he really wanted to stop Trump from winning, he could have leaked information about the Russia probe to the press — but that he didn’t. He also emphasized that there were “multiple layers” of officials above and below him at every key moment, who would not have tolerated bias. And he maintained that no one has pointed out any one action that he took as part of his job that was driven by bias. He also defended the investigation as serious and important. “The information we had which was alleging a Russian offer of assistance to a member of the Trump campaign was of extraordinary significance,” he said. “It was credible. It was from an extraordinarily sensitive and credible source.”  Meanwhile, Republicans contemptuously scorned Strzok’s claims to professionalism, repeatedly quoting from his more inflammatory text messages in an attempt to impugn the investigation.

Mueller probe indicts 12 Russians for hacking Democrats in 2016 - A dozen Russian military intelligence officers were indicted Friday on charges they hacked Democrats’ computers, stole their data and published those files to disrupt the 2016 election — the clearest connection to the Kremlin established so far by special counsel Robert S. Mueller III’s investigation of interference in the presidential campaign.The indictment against members of the Russian military agency known as the GRU marks the first time Mueller has taken direct aim at the Russian government, accusing specific military units and their named officers of a sophisticated, sustained effort to hack the computer networks of Democratic organizations and the Hillary Clinton campaign.Deputy Attorney General Rod J. Rosenstein announced the charges at a midday news conference. Mueller, as has been his practice, did not attend the announcement. Court records show that a grand jury Mueller has been using returned an indictment Friday morning.The suspects “covertly monitored the computers, implanted hundreds of files containing malicious computer code, and stole emails and other documents,” Rosenstein said. “The goal of the conspirators was to have an impact on the election. What impact they may have had . . . is a matter of speculation; that’s not our responsibility.”  The indictment comes days before President Trump is due to meet with Russian President Vladi­mir Putin in Finland. Rosenstein said he briefed Trump earlier this week on the charges. Trump’s lawyer Rudolph W. Giuliani said on Twitter that the indictments “are good news for all Americans. The Russians are nailed. No Americans are involved.” He then called on Mueller “to end this pursuit of the president and say President Trump is completely innocent.”

Analysis Rod Rosenstein and Robert Mueller officially repudiate a major Trump conspiracy theory -- Deputy Attorney General Rod J. Rosenstein on Friday announced the indictments of 12 Russian intelligence officials on charges stemming from the hacking of Democrats during the 2016 election.And with that, yet another President Trump conspiracy theory is thoroughly repudiated by the Russia investigation.Trump has regularly cast doubt upon the idea that the Democratic National Committee was hacked by the Russians — and that it was hacked at all. At one point he even reportedly dispatched a conspiracy theorist to meet with then-CIA Director Mike Pompeo. (Pompeo is now secretary of state.) “This is all information that has been out there for many years. Much of it is false and/or entirely inaccurate,” Trump said in a statement after the DNC hack was revealed in the summer of 2016. “We believe it was the DNC that did the 'hacking' as a way to distract from the many issues facing their deeply flawed candidate and failed party leader. Too bad the DNC doesn't hack Hillary Clinton's 33,000 missing emails.” At his first presidential debate with Clinton in September 2016, Trump added a number of other potential perpetrators, despite clear indications from the intelligence community that it was Russia. He even said it could have been a severely overweight American.“I don’t think anybody knows it was Russia that broke into the DNC. She’s saying Russia, Russia, Russia, but I don’t — maybe it was,” Trump said. “I mean, it could be Russia, but it could also be China. It could also be lots of other people. It also could be somebody sitting on their bed that weighs 400 pounds, okay? You don’t know who broke into DNC.”

After being told of Russia indictments, Trump still aspired to be friends with Putin— Before he embarked on a week of transatlantic diplomacy, President Trump sat down with Deputy Attorney General Rod J. Rosenstein, who previewed for the boss an explosive development: The Justice Department would soon indict 12 Russian intelligence officers for hacking Democratic emails to interfere with the 2016 U.S. presidential election. For the first time, the United States would be charging Russian government agents with planning and executing a sustained cyberattack to disrupt America’s democratic process. Yet Trump gave no sign in his commentary in Europe this week that he appreciated the magnitude of what he had been told was coming. Instead, he repeated his frequent attacks on the integrity of the wide-ranging Russia probe led by special counsel Robert S. Mueller III — while offering kind words for Russian President Vladi­mir Putin, who he is slated to meet here in Helsinki on Monday. Trump said Putin should not be considered his enemy but rather his competitor — and after spending some time together here in this vibrant seaside Nordic capital, Trump said he hoped they might quickly become friends. Trump pledged to ask Putin in their tete-a-tete whether Russia interfered in the election — “your favorite question about meddling,” he said mockingly to a Washington Post reporter. But he said he expected Putin, again, to deny it, and that they then would move on to other subjects. “There won’t be a Perry Mason moment here, I don’t think,” Trump joked, referring to a witness dramatically reversing his or her testimony to confess a crime. 

After latest indictments, Schumer calls on Trump to cancel summit with Putin -Senate Minority Leader Charles E. Schumer on Friday called on President Trump to cancel his summit with Russian President Vladi­mir Putin in the wake 12 Russian intelligence officers being charged with conspiring to hack Democrats during the 2016 presidential campaign.“Glad-handing with Vladimir Putin on the heels of these indictments would be an insult to our democracy,” Schumer (N.Y.) said in a statement less than an hour after Deputy Attorney General Rod J. Rosenstein detailed the new charges at a midday news conference.Trump is scheduled to meet with Putin on Monday in Helsinki. During a joint news conference Friday with British Prime Minister Theresa May in Britain, Trump told reporters he would raise the issue of Russian interference in the election with Putin but that he doesn’t expect a “Perry Mason” moment, where Putin confesses to meddling.In his statement, Schumer called the latest indictments from the probe led by special counsel Robert S. Mueller III “further proof of what everyone but the president seems to understand: President Putin is an adversary who interfered in our elections to help President Trump win.”“President Trump should cancel his meeting with Vladimir Putin until Russia takes demonstrable and transparent steps to prove that they won’t interfere in future elections,” Schumer said.

How Bitcoin Fueled Russian Hacks - WSJ —The Russian intelligence officers charged with hacking into the Democratic National Committee and Hillary Clinton’s 2016 presidential campaign used bitcoin to finance and obscure their operations, according to an indictment obtained by special counsel Robert Mueller’s office. Russian hackers laundered the equivalent of more than $95,000 through a complex array of transactions to take advantage of the “perceived anonymity of cryptocurrencies such as bitcoin,” Mr. Mueller’s team alleged. They used bitcoin to purchase computer servers, register website domains and pay for other unspecified hacking activities. Using bitcoin allowed the hackers to “avoid direct relationships with traditional financial institutions” such as banks that would have had stronger controls against money laundering, the indictment said. Still, since all bitcoin transactions are recorded on the blockchain—the distributed ledger technology that provides the backbone for the cryptocurrency system—U.S. investigators were ultimately able to link the transactions to the Russian government. “These allegations make clear that even where hackers use fake names and multiple accounts, blockchain technology allows law enforcement to follow the money in a way that would never be possible with cash,” said Jason Weinstein, a partner at Steptoe and Johnson and former senior Justice Department official. Law enforcement and financial regulators have pursued money laundering in cryptocurrencies in recent years, in some instances filing criminal charges and issuing multimillion-dollar fines. The crackdown accelerated with the 2013 shutdown of Silk Road, an online black market where customers could exchange cryptocurrency for illicit drugs. 

"That Wouldn't Be Fair" - Giuliani Refuses To Rule Out Possibility Of Cohen Pardon - After a brief media absence, Trump lawyer and former New York City Mayor Rudy Giuliani returned to the Sunday shows with a vengeance this weekend with appearances on ABC's "This Week", CNN's "State of the Union" and NBC's "Meet the Press" to offer an official response to Michael Cohen's claim that he would put "family and country first" when deciding whether to cooperate with prosecutors who are reportedly investigating him for bank fraud and possible campaign finance violations following raids on his office, hotel and home.During his interview with George Stephanopoulos, the former Bill Clinton Press Secretary asked Giuliani about who knew what regarding the payments to former adult film star Stormy Daniels, Giuliani insisted that Cohen "should cooperate with investigators" and that attorneys for Trump and Cohen didn't find anything that could incriminate either man after sifting through the more than one million documents seized during the Cohen raids."As long as he tells the truth, we're home free" Giuliani insisted.He offered a similar defense during an interview with CNN's Dana Bash on "State of the Union," where he said "I don't know what he has to flip over. What I do know is there is no evidence of wrongdoing with President Trump." But while Giuliani maintained his defensive tone during the interview, he also managed to slip in a brief soundbite that could go a long way toward convincing Cohen to stand his ground. To wit, when asked by Stephanopoulos about the possibility of a pardon, Giuliani said that, while there hasn't been any discussion of a pardon for Cohen up until this point, the president and his legal team haven't ruled it out.

Michael Cohen's new lawyer Lanny Davis fires at Trump and Rudy Giuliani over 'truth' - One of Michael Cohen's new lawyers, Lanny Davis, on Monday ridiculed the honesty of Cohen's former client, President Donald Trump and Trump's own attorney Rudy Giuliani.The shot came in a caustic tweet by Davis after Giuliani said the president faced no danger if Cohen cooperates with federal prosecutors and tells "the truth."Davis wrote in a tweet that putting the words "Trump" and "Giuliani" next to the word "truth" is equivalent to an "oxymoron." Davis also added the line, "Stay tuned." Davis was responding to Giuliani's comments Sunday regarding speculation that Cohen — who had been Trump's longtime personal lawyer — would begin cooperating with federal prosecutors in New York City conducting a criminal investigation of Cohen.Giuliani did not immediately respond to a request for comment on Davis' shot at him and the president.The former Mayor of New York City, appearing on the ABC News' show "This Week" on Sunday, had been asked about Trump's reaction to a recent interview Cohen did with ABC News in which he pointedly said, "My wife, my daughter and my son have my first loyalty, and always will.""I put my family first," Cohen had said.Those remarks gained widespread attention because Cohen once said, "I’m the guy who would take a bullet for the president."Days after Cohen spoke with ABC News, he hired Davis, who had previously been a lawyer for President Bill Clinton, and who remains close to both Clinton and his wife, Hillary Clinton. Cohen also hired Guy Petrillo, a former top staffer in the United States Attorney's Office for the Southern District of New York, the same office that is now probing Cohen.The hirings and Cohen's comments to ABC were seen as potentially setting the stage for him to cut a deal with prosecutors and cooperate with them in exchange for leniency in any criminal case. On Sunday, Giuliani said Trump's reaction to Cohen's comments were "same as mine, which is fine." "Michael Cohen should cooperate with the government," Giuliani added. "We have no reason to believe he did anything wrong. The president did nothing wrong with him." Asked if he had any concerns about what Cohen might tell a prosecutor, Giuliani said, "Zero. None."

 Giuliani works for foreign clients while serving as Trump’s attorney - Rudolph W. Giuliani continues to work on behalf of foreign clients both personally and through his namesake security firm while serving as President Trump’s personal attorney — an arrangement experts say raises conflict-of-interest concerns and could run afoul of federal ethics laws. Giuliani said in recent interviews with The Washington Post that he is working with clients in Brazil and Colombia, among other countries, as well as delivering paid speeches for a controversial Iranian dissident group. He has never registered with the Justice Department on behalf of his overseas clients, asserting it is not necessary because he does not directly lobby the U.S. government and is not charging Trump for his services. His decision to continue representing foreign entities also departs from standard practice for presidential attorneys, who in the past have generally sought to sever any ties that could create conflicts with their client in the White House. “I’ve never lobbied him on anything,” Giuliani said, referring to Trump. “I don’t represent foreign government in front of the U.S. government. I’ve never registered to lobby.” Carrie Menkel-Meadow, a legal-ethics professor at the University of California at Irvine, said it is generally unwise for the president’s attorney to have foreign business clients, because of the high likelihood they will have competing interests. “I think Rudy believes because he is doing the job pro bono the rules do not apply to him, but they do,” Menkel-Meadow said.

SEC Knifes Its Whistleblower Program -- Yves Smith - The SEC always hated the whistleblower program that Congress imposed on it as part of Dodd Frank reforms. Congress was responding to the SEC’s grotesque institutional failure in ignoring Harry Markopolos’ repeated, detailed warnings about the Bernie Madoff fraud, a Ponzi scheme that reached $65 billion due to SEC inaction. But as we’ll describe, the SEC issued new guidance – on a Saturday night in the summer – that guts the whistleblower program by imposing new standards that look to be contrary to the intent of Congress by making it difficult to win awards for large-scale frauds, and then reducing the payouts on them. It looks like career-minded SEC officials who resented that whistleblower filings could force them to probe wrong-doings of prospective employers are making sure the agency will only hand out parking tickets. Admittedly, Congress had set out to enfeeble the SEC, by keeping it budget-starved and having Congressmen like Joe Lieberman threaten to cut its funding even further if it went too aggressively after big financiers. The agency had retreated to focusing enforcement almost entirely on insider trading, to the degree that became almost incapable of seeing the world any other way. For instance, it botched its first major crisis case involving the collapse of two Bear Stearns hedge funds, by bizarrely pursuing the execs managing the funds as insider traders, rather than understanding that they were victims of other Wall Street firms (and perhaps even Bear’s own trading desks) that were selling toxic subprime mortgage securities and CDOs. ‘  Nevertheless, the new whistleblower program established an awards fund entirely outside the SEC’s budget, and also tasked the SEC to set up a “Whistleblower Office.” The agency was obligated to pay sources compensation set as a portion of the SEC’s recovery if they contributed information that was valuable to an enforcement action.  Last Saturday, in the dead of night, the SEC moved to make explicit, with the release of draft rule revisions, what close observers long suspected, that despite the agency’s weak support for whistleblowers, they have proven nevertheless too successful.

CFTC Approves Record $30 Million Award For JP Morgan Whistle-Blower - The CFTC has finally approved what is expected to be the largest award in the history of its whistle-blower-awards program: According to Bloomberg, the commission has authorized a $30 million award for information about JP Morgan neglecting to inform its wealthy asset-management clients about conflicts of interest involving the bank's investment recommendations. The award represents 30% of the $100 million in penalties and surrendered profits that the CFTC received in a December 2015 settlement with the bank. The CFTC made the award public on Thursday without naming individuals or the bank. According to the attorney, Edward Siedle, it was the culmination of a December 2015 settlement in which JPMorgan agreed to pay regulators a total of $367 million for failing to disclose that it was steering asset-management clients into investments that would be especially profitable to the bank.That included $100 million that went to the CFTC -- $40 million in penalties and $60 million in disgorgement. The bank agreed to pay an additional $267 million at the time to the Securities and Exchange Commission, where a pair of preliminary whistle-blower awards totaling $61 million were authorized a year ago but still await final approval. It's also the fifth award in the history of the CFTC program, which was created along with a separate whistle-blower program at the SEC as part of the Dodd-Frank act. As the claimant's attorney, Edward Siedle, said, many bank whistle-blowers aren't aware that there's "a commodities element" to many cases of investment fraud, which opens the door to the CFTC's involvement, and the possibility of more settlement money. "We hope that an award of this magnitude will incentivize whistle-blowers to come forward with valuable information and provide notice to market participants that individuals are reporting quality information about violations" of commodities-trading law, said CFTC Chairman J. Christopher Giancarlo. "Most would-be whistle-blowers overlook the fact that there’s a commodities element in most investment fraud," Siedle said. "This award demonstrates that the CFTC is willing to act quickly on those complaints if contacted."

Meet the Secret Wall Street Group Whose Fingerprints Are All Over the 2008 Crash -- Pam Martens - Since 1999 the chief risk officers of the Wall Street banks that blew themselves up in 2008 because of reckless and irresponsible risk practices have been meeting in secret and calling themselves the Counterparty Risk Management Policy Group (CRMPG). Their plan was to periodically release erudite-sounding reports to regulators suggesting that Wall Street could police itself under a set of “Guiding Principles” in order to perpetuate its off balance sheet debt bombs, unregulated OTC derivatives and a self-regulation regime.The group was led by former New York Fed President E. Gerald Corrigan who then moved on to a lucrative career at Goldman Sachs.Representatives from banks like Lehman Brothers, Citigroup, Bear Stearns and Merrill Lynch sat on key committees of the Group and helped to formulate the “Guiding Principles” for Wall Street. Lehman Brothers filed bankruptcy on September 15, 2008 – just five weeks after a report from the group on managing risk was released. One day before the Lehman collapse, Merrill Lynch had collapsed into the arms of Bank of America. In March of that year, Bear Stearns had already collapsed into the arms of JPMorgan Chase with a generous financial assist from the Fed. In the same year, Citigroup became insolvent and received the largest taxpayer bailout in U.S. history. Notwithstanding the hubris of these risk managers lecturing others on how to contain risk while their own institutions are in the process of an epic collapse because of negligently managed risk, the Federal Reserve actually deferred to this group at the peak of the crisis in 2008.According to an email obtained by the Financial Crisis Inquiry Commission from Patrick M. Parkinson of the Federal Reserve to Steven Shafran (an official of the U.S. Treasury Department who had joined it in February 2008 from Goldman Sachs to serve under U.S. Treasury Secretary Hank Paulson, the former Chairman and CEO of Goldman Sachs) the Counterparty Risk Management Policy Group’s plan for dealing with a major defaulting counterparty was going to be relied upon.

Why Killing Dodd-Frank Could Lead to the Next Crash – Taibbi - In the age of Trump, bipartisanship is considered a sin. So one would think that when Republicans and Democrats do pass a law together, it’d be for something so popular, it couldn’t be questioned politically: a nonbinding resolution on the cuteness of puppies, maybe, or a national ice cream giveaway.Nope. The rare bipartisan bill turned out to be a rollback of the Dodd-Frank financial-reform act. More than 80 percent of Democrats and two-thirds of Republicans want tougher rules on banks. Yet this was our Trump-era kumbaya moment: a bank deregulation bill! Ostensibly passed to address the causes of the 2008 crash, the Dodd-Frank Act has instead spent more than half a decade now as a hostage to a payola Congress, with both parties taking turns cutting it down and delaying its implementation. The latest indignity is S.2155, a.k.a. the “Economic Growth, Regulatory Relief, and Consumer Protection Act.” Supposedly designed to help some banks by reducing capital requirements and ending regular “stress tests,” the act is really more like helping ships steam faster by allowing them to ditch their lifeboats. Ohio Sen. Sherrod Brown, a longtime critic of the “Too Big to Fail” banking system, opposed the bill. He pointed out upon passage that in one section of the act, “the change of just one word . . . forces the Fed to weaken the rules even for the largest banks.”The microchange Brown refers to is a masterstroke of deregulatory trickery, one that should go in the Hall of Fame of legislative chicanery. The original Dodd-Frank Act said the Federal Reserve may consider weakening safety rules for a particular bank. The single word change of “may” toshall” would mandate the Fed to consider every request for special treatment. If Bloodsucking Bank A thinks it deserves relaxed regulation, it could sue the Fed to consider its request.  Because the rules weakened under this section cover almost all the restrictions in Dodd-Frank, this “may-to-shall” trick could be the mother of all loopholes. “It’s potentially the most damaging thing in the bill,” is how one Senate aide put it.

Streak of zero bank failures can only last so long - In another sign that the industry has put the financial crisis in the past, seven months have come and gone since the last bank was shuttered by regulators. It is the longest stretch without a failure since a 31-month run ended way back in February 2007. The aftermath of the financial crisis sunk hundreds of banks and every Friday it seemed inevitable that one bank or more would fail. Sometimes liquidity was the culprit. Often credit issues, mounting financial losses and eroding capital were to blame. The crisis caused a lot of introspection, along with a refocus on character, capital and capacity. Today's banking industry, by and large, seems to be stronger as a result. “There was a weeding out process,” said William Black, an economics and law professor at the University of Missouri-Kansas City and a former senior deputy chief counsel at the Office of Thrift Supervision. “There was also simply some looking in the mirror and realizing actually the three Cs of credit would be good to concentrate on.” A series of metrics help explain the recent dearth in failures. Tier 1 risk-based capital ratios averaged more than 13% at March 31, marking an improvement from just over 10% in early 2007, according to data from the Federal Deposit Insurance Corp. The industry also has a better balance between loans and deposits. The industry's loan-to-deposit ratio stood at 89% in the first quarter. A decade ago, the average bank had $1.30 in loans for every $1 in deposits on the balance sheet, creating an elevated need for alternative sources of funding. Finally, banks have worked hard to diversify lending after suffering huge losses tied to real estate, especially construction and development loans. At March 31, real estate loans made up almost half of the all credits, compared with nearly 63% in 2007.

Kavanaugh’s skepticism of regulatory power seen as boon for banks -- Industry advocates are cautiously optimistic that Supreme Court nominee Brett Kavanaugh would side with banks on a range of legal questions relevant to the financial services industry, from the leadership of the Consumer Financial Protection Bureau to fair-lending requirements to preemption."Brett would approach a case as if someone was coming to talk to him, which is probably a good thing for the banking industry at the moment," said Keith Noreika, a partner at Simpson Thatcher & Bartlett and the former acting comptroller of the currency. While his appointment would strengthen an already conservative majority on the court, industry observers see some specific views from his decisions that could benefit the industry.

These Charts Prove It’s Time to Break Up the Big Wall Street Banks --  Pam Martens -  According to a statistical release from the Federal Reserve, as of March 31, 2018 there were 1,812 commercial banks in the United States holding consolidated assets of $300 million or more. Of those 1,812 banks, just four banks (JPMorgan Chase, Bank of America, Wells Fargo and Citigroup’s Citibank) held 45 percent of the consolidated assets of those 1,812 banks.But looking at data at the Federal Deposit Insurance Corporation (FDIC) the situation is even more extreme. The FDIC shows there are 5,606 insured banks in total holding $17.531 trillion in assets. JPMorgan Chase, Bank of America, Wells Fargo and Citigroup’s Citibank are holding 40.42 percent of the assets of all the insured banks in the country.Let us put it another way. Those four banks represent 0.0007 percent of all banks in the U.S. but they have somehow managed to control 40.42 percent of the assets.These same four banks also hold the majority of deposits on which they pay a minuscule amount of interest and outsized positions in the credit card market, where, thanks to their lobbyists repealing state usury laws, they can charge double digit interest rates that run into the high teens in some cases.On top of burying the country under an unprecedented amount of household debt by pushing their credit cards on the struggling middle class, Wall Street banks manage an outsized share of 401(k) plans and retirement plans. As Frontline reported in 2013, if you work for 50 years and receive the typical long-term return of 7 percent on your 401(k) plan and your fees are 2 percent, almost two-thirds of your account will go to Wall Street. (You can check the math in our report here.) Wall Street is holding the U.S. economy hostage. Consumers represent almost 70 percent of Gross Domestic Product in the U.S. A tapped-out consumer means a tapped out economy – no matter how much spin the current resident of the Oval Office attempts to put on it.

Jon Tester is first Democrat endorsed by banking super PAC — Friends of Traditional Banking, a super PAC focused on candidates who support the industry, said Wednesday it is endorsing Sen. Jon Tester, D-Mont., in his re-election race. Tester is the first Democrat to get an endorsement from the group. He was a key backer of a bipartisan bill, which President Trump signed in May, to ease certain provisions of the Dodd-Frank Act. "Senator Tester has demonstrated the courage and bi-partisan effort to help community banks by rolling back egregious one-size-fits-all regulations," Ty Abston, the chairman of Friends of Traditional Banking and CEO of Guaranty Bank & Trust in Mount Pleasant, Texas, said in a press release. "We encourage our allies everywhere to donate to Senator Tester's tight reelection race, and help us keep a fair-minded leader like him in the Senate."

Big test for ag lenders: Helping farmers weather trade war --There is little question that China’s tariffs on U.S. soybeans will slow exports and crimp the profits of many farms, but how they affect the banks that lend to soybean farmers will depend largely on how long the trade war persists and how well bankers prepare customers for the inevitable slowdown. If bankers begin taking steps now to refinance existing agricultural loans or help farmers sell their products in markets outside of China, then the damage to banks’ balance sheets should be minimal — at least in the short term, bankers and industry experts say.   But if their efforts fall short and farmers are unable to recoup what could be billions of dollars in lost export revenue, then banks could be looking at a costly rise in farm loan delinquencies.  “It’s definitely at the forefront our minds and our customers’ minds,” said Brian Johnson, CEO of the $1.3 billion-asset Choice Financial in Fargo, N.D., where 23% of its loans are to farmers, much of it for soybeans. North Dakota exported $1.1 billion of soybeans worldwide last year, according to federal data.

Mnuchin affirms commitment to fixing AML, beneficial-owner rules — Treasury Secretary Steven Mnuchin vowed to House lawmakers Thursday that he would push for regulators to ease anti-money-laundering requirements, among other deregulatory efforts underway. Mnuchin, testifying before the House Financial Services Committee, acknowledged bipartisan concerns that the requirements for banks to report suspicious financial activity through the Bank Secrecy Act have become cumbersome and need streamlining. “We are looking at BSA reform, AML reform. We need to strike the right balance on that,” said Mnuchin during the hearing. Mnuchin particularly committed to lawmakers that he would look into easing the "beneficial ownership" rule, which took effect in May and requires banks to collect and report information on the true owner of an account — anyone who owns at least 25% or more of a legal entity. The rule is intended to make it more difficult for account holders to hide behind shell companies.Banks have raised concerns about implementing the rule, saying it is far better for the government to track beneficial owner information since businesses are challenging banks' requests for more detailed information upon opening accounts.Lawmakers are also looking at ways to streamline AML requirements legislatively, but the beneficial ownership requirement has been a key point of controversy. Last month, a House AML reform bill stalled because it excluded a measure to require new companies to provide that information to the Financial Crimes Enforcement Network. “I believe that any legislative package on this issue must address the issue of beneficial ownership because anonymous shell companies are routinely used to finance criminal and terrorist organization,” said Rep. Carolyn Maloney, D-N.Y.  Mnuchin responded that “you have our commitment to continue to work on” the issue.  “I believe this issue needs to be solved, whether it’s solved as part of BSA or whether it’s solved separately,” Mnuchin said. “But we do need to be able to have access to beneficial ownership information for law enforcement and for combating terrorist financing.”

Michael Olenick: Update Confirms That Share Buybacks Are Still Corporate Suicide - naked capitalism - In 2017, INSEAD published a study by Robert Ayres, an INSEAD Emeritus Professor of Economics and Political Science and Technology Management, and Michael Olenick, an Institute Executive Fellow which looked at all buybacks for US companies over the prior 20 years, discarding firms not in business when the study was done, not in business five years before, too small (<$100M market cap), or trading OTC. The study showed statistically that the higher the buyback ratio –the more firms engage in excessive buybacks – the less likely they are to grow in market cap.Even though the study got some predictable pushback, an updated version of the analysis shows the findings still hold, that buybacks do not enhance shareholder value. From the 2017 write-up at Knowledge at INSEAD: When share repurchases increase debt and reduce spending on innovation and R&D it directly affects a firm’s long-term ability to survive and grow in a disruptive and uncertain business environment. Meanwhile, the question arises: What happens to the money that is “returned” to shareholders by share buybacks? Economic theorists suppose that this money will be re-invested in more promising opportunities. What seems certain is that much of the money will be ploughed into ever-riskier investments in the search for even higher returns. We suspect that much of the money spent on buybacks by established “mature” companies has created a stock market bubble in FAANG stocks (and others) where conventional PE ratios no longer restrain investors in search of growth. To get a better understanding of the impact of buybacks, we set out to compare the performance of companies that rely heavily on repurchasing shares with those that do not. Our study, “Secular Stagnation”, examined 1,839 public companies in the United States over a five-year time‐scale. We found that the more money a firm spends on buybacks, the less likely it is to grow over the long-term. In fact, as the chart below makes clear, we discovered that not only do buybacks not lead to growth in a company’s market value, they are strongly correlated to a declining market value.

Online lenders should have same disclosure rules as banks: N.Y. State — The New York State Department of Financial Services recommended Wednesday that online lenders be subject to the state's consumer protection laws, including measures to require "robust consumer disclosures," that apply to other financial institutions.The department released a report that examined the results of a survey of 48 marketplace lenders. The report also recommended that existing rules barring firms from providing credit at usurious rates apply to online lenders and suggested that online lenders should have to go through a more rigorous licensing process. “A loan is a loan from a borrower’s perspective, and the borrower deserves to get the benefit of New York’s protections, whether the borrower borrows from a bank or credit union or online lender,” the report said.

 This month could be a turning point in fintech regulation… — Fintech firms are awaiting several regulatory actions this month that could help shape the future of the industry.  Yet while more feedback from regulators appointed by President Trump could give the industry a sense for where fintech regulation is likely to be headed in coming years, recent activity at one banking agency underscores the challenges that could be looming for a budding industry starting to make its way in Washington.  The payments processor Square got its first taste of the regulatory difficulties ahead when it affirmed this week that it had withdrawn its application to form a depository bank with Federal Deposit Insurance Corp. in order to “strengthen” it, with plans to refile it at a later date. At the same time, Comptroller of the Currency Joseph Otting said he would take a position in July on whether to offer a special bank charter for fintechs, and soon the Treasury Department is expected to release its highly anticipated report on fintech companies that may help inform the activities of regulators. Many observers said the banking agencies are likely to move forward on bringing the fintech industry into a more modern, regulated space, but Square’s withdrawal shows just how tough getting there can be. “It’s potentially a very important period for the fintech industry, but we’re going to have to see what all this stuff looks like.” Square, of San Francisco, was the second fintech firm to apply and then withdraw from forming an industrial loan company, a controversial charter that allows a company to have insured deposits without having to follow Bank Holding Company Act requirements. Social Finance also applied for an ILC charter last year but quickly withdrew when an internal scandal involving the company's leadership made news.

A chance for consumers to 'know what the credit bureaus know' — Officials from the Federal Trade Commission and Consumer Financial Protection Bureau told a Senate panel Thursday that they support the goals of bipartisan legislation to give consumers more control over their credit reporting data.  The legislation, which has not yet been introduced, is being authored by Sens. John Kennedy, R-La., and Brian Schatz, D-Hawaii, and is based on an amendment they had tried to attach to the recently passed regulatory relief legislation. Their bill would require the three major credit reporting agencies to create an online portal for consumers to check their credit scores and reports free of cost. “Our bill tries to empower consumers to, for instance, know what the credit bureaus know,” Schatz said at a hearing of the Senate Banking Committee.

Adviser to Mulvaney chosen as CFPB's No. 2 — The Consumer Financial Protection Bureau announced Monday that Brian Johnson, a senior adviser to acting Director Mick Mulvaney, will fill the agency's second leadership post.  Johnson will become the acting deputy director, succeeding Leandra English, who recently said she plans to resign from the CFPB. English had been embroiled in a legal battle with Mulvaney, claiming that she was the rightful acting head of the bureau. Johnson, who currently serves as principal policy director at the CFPB, was brought to the agency by Mulvaney after a dozen years at the House Financial Services Committee, most recently as senior counsel.

Yes, Mulvaney’s strategic plan would shackle CFPB — as it should -  BankThink - Acting Consumer Financial Protection Bureau Director Mick Mulvaney’s proposal to subject every new CFPB rule to congressional approval would be “dangerous,” according to recent commentary by Rob Blackwell, American Banker’s editor-in-chief. The piece contends that Congress doesn’t have the expertise or bandwidth to adequately review the agency’s every rulemaking. But it’s dangerous and contrary to America’s three-party constitutional system for the people’s body, Congress, not to make policy. Mulvaney's proposal that Congress should sign off on CFPB's major rules would help restore an appropriate balance of powers. Bloomberg News As George Washington law professor Jonathan Turley has warned, “our carefully constructed system of checks and balances is being negated by the rise of a fourth branch, an administrative state of sprawling departments and agencies that govern with increasing autonomy and decreasing transparency.” These concerns are embodied by the CFPB, which by design has enormous autonomy as well as significant enforcement, de facto lawmaking and adjudicative powers. Moreover, Philip Hamburger, a professor of law at Columbia University, argues that administrative law is fundamentally at odds with eight centuries of Anglo-American conceptions of law. Rules can only have the obligation of law if they come from the constitutionally established legislature. To be sure, Congress has willingly delegated vast legislative powers to the unelected administrative state, shirking its constitutional duty. There is, however, purpose in Congress’ dereliction. It can claim credit for enacting high-minded law purportedly protecting consumers against a greedy financial service industry and making the financial system safer, while outsourcing messy and often controversial lawmaking to unelected, unaccountable and often highly partisan, regulators. In vesting vast power in the CFPB, which is insulated from institutional political checks, the architects of the Dodd-Frank Act assumed their ideological kin would continue to control the administrative state, regardless of who controlled the White House or Capitol Hill. Hamburger has argued that Congress can reclaim its legislative power by converting rules to statutes, agency by agency. Mulvaney’s proposal would be a good start for doing so at the CFPB. The plan would require Congress to affirmatively approve the bureau’s proposed rules — a masterful attempt to force the legislature to reassert its role as policymaker and limit the agency to enforcement. Nonetheless, it could still harness the purported regulatory experts to draft the detail. 

Main Line’s ‘godfather of payday lending’ sentenced to 14 years, stripped of $64M, for preying on financially vulnerable -- A former Main Line investment banker who made a career of flouting state laws and preying on cash-strapped people to build one of the nation’s largest payday-lending empires was sentenced Friday to 14 years in federal prison and stripped of more than $64 million in assets.   But Charles M. Hallinan, 77, of Villanova, remained unrepentant in the face of a prison term that his lawyers said might as well be a “death sentence” given his age and rapidly declining health.  Hallinan said nothing when given the chance to address U.S. District Judge Eduardo Robreno before his punishment was imposed. In interviews with probation officers before Friday’s hearing in Philadelphia, he said he was “exactly the opposite” of contrite.  Perhaps that was to be expected from a man whose colleagues dubbed him “the godfather of payday lending.” But it only cemented the judge’s decision to strip Hallinan of his vast financial holdings and freedom during the final years of his life. “It would be a miscarriage of justice to impose a sentence that would not reflect the seriousness of this case,” Robreno said. “The sentence here should send a message that criminal conduct like [this] will not pay.”  Hallinan’s sentence came seven months after a jury convicted him of 17 counts including racketeering, international money laundering, and fraud in a case that cast doubt on the legality of many of the business tactics that have turned the payday-lending industry into a multibillion-dollar-a-year financial juggernaut. Hallinan pioneered many of those tactics in an effort to evade state regulatory efforts, and taught many of the industry’s other top lenders how to make millions by illegally offering low-dollar, high-interest loans to financially desperate borrowers with limited access to more traditional lines of credit.

 Why are payday loans so popular with the military? - Short-term lending products bridge a financial gap for their users, but the rates that lenders charge — and sometimes obscure as fees — can verge on predatory. Most consumers avoid these products, but active members of the military seem to embrace them. For those who are enlisted, they have some protections under the law. The Military Lending Act, which was first enacted in 2006, addresses predatory lending. That law also goes above and beyond the Consumer Financial Protection Bureau’s rule designed to stop payday debt traps, which has yet to go into effect. But considering how popular these products are with active-duty military personnel, one has to wonder if the existing law has just encouraged a bad financial practice.Regardless of the product, usage rates of short-term loans and other alternative financial products are incredibly high among active duty members of the military — despite a concerted effort by the U.S. armed forces to promote fiscal responsibility and deter their active duty members from obtaining short-term lending products. At Javelin Strategy & Research’s blog, we’ve found 44% of active duty military members received a payday loan last year, 68% obtained a tax refund loan, 53% used a non-bank check-cashing service and 57% used a pawn shop — those are all extraordinarily high use rates. For context, less than 10% of all consumers obtained each of those same alternative financial products and services last year. Why is this happening? At least part of this phenomenon can be attributed to age as those in the military tend to be young and Gen Y consumers are generally higher adopters of these services because they are earlier in their financial lives — earning less income and in possession of less traditional forms of credit.  But those conditions don’t tell the whole story. . The Military Lending Act was enacted to address predatory lending, similar to the CFPB’s recent regulations on short-term lending. One area where the Military Lending Act goes beyond the bureau’s regulations is specifically in setting limits on one of the most criticized aspects of short-term lending: the interest rate. The act caps the interest rate lenders can charge military members to just 36% for products like tax refund loans and payday loans. The intent of the act was to prevent companies from shackling the U.S. military with loans while they were overseas — an outcome that could induce stress and hamper their ability to focus. But even at the interest-rate cap, military members are still paying high rates — the kind of rates that are typically reserved for consumers with bad credit.

 Ohio Senate tightens rules on high-cost consumer lending --  Lawmakers in Ohio are poised to adopt new restrictions on high-cost consumer lending. The state Senate passed a bill Tuesday that would eliminate a loophole in Ohio law that has enabled lenders to evade a strict interest rate cap enacted 10 years ago. The bipartisan measure was approved by a 21-9 vote. The proposal includes provisions that are intended to preserve credit options for cash-strapped Ohioans, and its supporters called it a compromise. Still, it drew strong opposition from high-cost lenders. The state Senate bill must still be reconciled with a similar measure that was passed last month by the Ohio House of Representatives. 

Why Fannie Mae and Freddie Mac may need more bailout cash  Fannie Mae and Freddie Mac may be forced to take draws from the U.S. Treasury again, this time due to an accounting rules change for loan-loss reserves.The Financial Accounting Standards Board is changing how financial institutions and investment companies determine their allowance for loan and lease losses. The existing "incurred loss" model lets companies build up a loss reserve over the life of a loan. But the new standard — known as Current Expected Credit Loss, or CECL — is an "expected loss" model, which requires companies to record a loss reserve at the time a loan is originated or acquired.In other words, CECL changes the timing of when expected losses are recorded, but not the amount that's reserved, according to a recent Keefe, Bruyette & Woods research note.Currently, Fannie Mae has an $18.6 billion reserve against its $2.9 trillion single-family guarantee portfolio, while Freddie Mac has $8.9 billion against a $1.8 trillion portfolio, KBW estimates. But those reserves are primarily set aside to cover risk on the government-sponsored enterprises' shrinking portfolio of precrisis loans.Fannie and Freddie will need an additional $7.5 billion and $5 billion, respectively, to meet the new CECL requirements, KBW estimates. Companies aren't allowed to build up excess loan-loss reserves ahead of the Jan. 1, 2020, CECL deadline. Fannie and Freddie should be able to tap into the $3 billion each in capital reserves they were allowed to build this year to cover a portion the CECL adjustment, but it won't be enough. And it's unclear whether the GSEs will have sufficient fourth-quarter 2019 profits to cover the difference. If either company doesn't, it will need a draw from the Treasury.

Reverse mortgage program shouldn't be fixed on backs of seniors - — Federal Housing Administration chief Brian Montgomery said Tuesday the agency is trying to determine the direct cause of losses to its reverse mortgage program, while indicating the FHA opposes any changes to the program that could hurt senior citizens. Though Brian Montgomery has only been head of the FHA for about a month, the agency is already in “fix-it” mode, he said. High up on his agenda are reforming the reverse mortgage program and updating the agency's 1960s-era computer operating system.  "This program allows seniors to age in place—which they all tell you they want to do, and certainly my mom has told me that—and I always say the best government program, it’s assistance you pay for yourself,” FHA Commissioner Brian Montgomery says. His nomination came shortly before FHA released its annual report to Congress in 2017, which revealed that the agency was hit hard with losses in its reverse mortgage program. Those losses drove the capital reserve ratio down to 2.09% from 2.35% a year earlier. FHA is required by law to maintain a 2% capital reserve buffer to cover projected losses. The drop raised questions about whether the agency would follow through with premium cuts that the Obama administration proposed and President Trump had suspended shortly after he took office. It also prompted calls to remove FHA’s Home Equity Conversion Mortgage program from the agency’s Mutual Mortgage Insurance Fund. Delving into these pressing issues has made for “a busy 30 days,” Montgomery said. The home equity conversion program drove a 26-basis-point drop in the capital reserve ratio, sparking concerns not only about the agency’s finances, but also about senior citizens defaulting on loans. This added to the debate on whether the reverse mortgage program should be separated from the FHA's traditional single-family program and placed in a separate fund. Department of Housing and Urban Development Secretary Ben Carson agreed in October that separating the two programs would be a “worthy pursuit.” ‘

Black Knight Mortgage Monitor for May -- Black Knight released their Mortgage Monitor report for May today. According to Black Knight, 3.64% of mortgages were delinquent in May, down from 3.79% in May 2017. Black Knight also reported that 0.59% of mortgages were in the foreclosure process, down from 0.83% a year ago.This gives a total of 4.23% delinquent or in foreclosure.  Press Release: Black   Knight’s May 2018 Mortgage Monitor  This month, the company looks again at tappable equity, or the share of equity available for homeowners with mortgages to borrow against before reaching a maximum total combined loan-to-value (LTV) ratio of 80 percent. Despite the record-setting growth in such equity seen in the first quarter of 2018, homeowners are withdrawing equity at a lower rate than in the past. “In Q1 2018, homeowners with mortgages withdrew $63 billion in equity via cash-out refinances or HELOCs,” said Graboske. “That represents a slight one percent increase from the same time last year, despite the fact that the amount of equity available for homeowners to borrow against increased by 16 percent over the same time period. Collectively, American homeowners now have $5.8 trillion in tappable equity available, yet only 1.17 percent of that total was withdrawn in the first quarter of the year. That’s the lowest quarterly share in four years, and the second lowest since the housing recovery began six years ago. Somewhat surprisingly, even though rising first-lien interest rates normally produce an increase in HELOC lending, the volume of equity withdrawn via lines of credit dropped to a two-year low as well. This graph from Black Knight shows the number of active foreclosure since 2000. From Black Knight:

• The number of active foreclosures has declined from 2.3M at the peak in December 2010 to just 303k remaining today
• At the current rate of improvement (-29% Y/Y), the national foreclosure rate is on pace to ‘normalize’ (to the 2000-2005 average) within the next three months
• The number of outstanding foreclosures is on track to normalize in September 2018
• Given the various factors noted on the previous page, we may see foreclosure volumes dip even further
• Holding today's rate of improvement steady, both foreclosure rates and active foreclosure inventory would fall to the lowest level this century within the next 18 month

Foreclosure rates sink on better economy, improved underwriting -  Healthier economic conditions, more effective underwriting methods and recovering hurricane-impacted states helped drive delinquency and foreclosure rates to their lowest level in over 10 years, according to CoreLogic. About 4.2% of mortgages were in some stage of delinquency in April, which is down 0.6% from 4.8% year-over-year. The foreclosure inventory rate ticked down one percentage point to 0.6% in April from a year ago and remained unchanged from March. Job and home price growth, in addition to full documentation underwriting helped push down mortgage defaults, according to Frank Nothaft, CoreLogic's chief economist. "The latest CoreLogic Home Price Index report revealed the annual national home price growth was 7.1% in May, the fastest annual growth in four years," said Nothaft. "U.S. employers have also continued to employ more individuals, as employment rose by 2.4 million throughout the last 12 months with 213,000 jobs added last month alone." "Together, this heightened financial stability is pushing delinquency and foreclosure rates to record lows," he continued. The only two states with significant gains in 90-day delinquency rates were Florida and Texas, which were hit by Hurricanes Irma and Harvey last year. "Delinquency rates are nearing historic lows, except in areas impacted by extreme weather over the past 18 months, reflecting a long period of strict underwriting practices and improved economic conditions,"

When are people with Foreclosures and Short Sales eligible to borrow again? --  Some information from mortgage broker Solyent Green is People (an update): For people with foreclosures or short sales on their record, the waiting period depends on if there are "Extenuating Circumstances" EC ( death in family, company relocation/shut down - about 5/10% of cases) or if the foreclosure or short sale was due to "Financial Mismanagement" FM (the majority of cases):
Jumbo loans, Foreclosure: 7 years (FM and EC)
Jumbo loans, Short Sale: 7 years FM, only 4 years EC
Fannie/Freddie, Foreclosure: 7 years FM, 3 years EC
Fannie/Freddie, Short Sale: 4 years FM, 2 years EC
FHA Foreclosure/Short Sale: 3 years (FM and EC)
This graph from Black Knight shows the number of active foreclosure since 2000.The vast majority of foreclosures were in the 2008 through 2013 period, so many of those people who lost home in the great recession are eligible to borrow again now (or will be soon).  Note: Even though people are eligible to borrow, doesn't mean they will. They will have to saved enough for a downpayment, and many of these people are psychological scarred (and will wait longer to buy again).

MBA: Mortgage Applications Increase in Latest Weekly Survey, Refinance Activity Lowest since 2000 -- From the MBA: Mortgage Applications Increase in Latest MBA Weekly SurveyMortgage applications increased 2.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 6, 2018. This week’s results included an adjustment for the Fourth of July holiday.... The Refinance Index decreased 4 percent from the previous week to its lowest level since December 2000. The seasonally adjusted Purchase Index increased 7 percent from one week earlier. The unadjusted Purchase Index decreased 15 percent compared with the previous week and was 8 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) decreased to 4.76 percent from 4.79 percent, with points increasing to 0.43 from 0.41 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

Mortgage application volume rebounds but refis fall to 18 year low - Mortgage applications rose due to year-over-year progress in the job market, snapping a two-week skid. It was a 2.5% increase from the week prior, according to the Mortgage Bankers Association.The purchase application volume drove the overall numbers. The seasonally adjusted purchase index increased by 7% from one week earlier, however, it decreased by 15% on an unadjusted basis. It stands at 8% higher year-over-year.Despite the total applications rising, the refinance index decreased 4% for the week ending July 6 from the previous week. That is the lowest level of activity since December 2000. The refinance share of application activity went to 34.8% from 37.2%, the lowest since August 2008."The strong job market continues to bolster demand for homes, with purchase volume up 8% year-over-year, even as the lack of inventory still is holding back the pace of sales. Nevertheless, the mix of business continues to move towards loans for home purchase," said MBA Chief Economist Mike Fratantoni.

San Francisco Home Prices Soar By A Record $200,000 In Six Months -- It may be covered in feces, but when it comes to San Francisco and its housing market, the bubble in this West Coast tech mecca is now approaching proportions that would make Hong Kong, Sydney and Vancouver blush, and makes the last home price peak hit in 2007 seem like child's play. One won't see it, however, by looking at traditional home price indicators, such as the Case-Shiller Home price index which while showing a significant, double digit annual gain of just over 10%, is behind metro areas such as Seattle and Las Vegas, and substantially waters down the insanity happening every day on the streets of San Francisco.Instead, to get a far more accurate, and granular neighborhood-by-neighborhood data for San Francisco itself, we go to Paragon Real Estate Group’s 2018 Mid-Year Market report, where what we find is sheer market lunacy and vertigo-inducing price increases that have now spiked into the stratosphere. According to the latest Paragon report, the median sale price of a house in the city has soared by an unprecedented $205,000 in just the first six months of 2018, to a record $1.62 million, a 20%+ jump from a year earlier. This increase is more than double the annual price increase reported by Case-Shiller, and the current price of $1.6 million is nearly double the last housing bubble peak of $895K.In short: this is what a real bubble looks like.

Puna home sales slow market slightly -- Prices for homes sold on Hawaii island and Kauai in June were mostly higher compared with a year earlier, according to data released Thursday.The priciest home sales were on Kauai where single-family residences sold for a median $752,500 last month. That was up 7% from $702,500 12 months earlier.On Hawaii island the median sale price for single-family residences was $384,000 in June, up 9% from $351,250 in the same month last year.The median price is a point at which half the sales were for more and half for less. This measure is influenced by the location, size, age and quality of homes.Sales data were reported by Hawaii Information Service on behalf of the Kauai Board of Realtors and Hawaii Island Realtors. The trade associations count sales of new and previously owned homes completed in June, which typically involves sales contracts signed one to three months earlier. There were 54 single-family home sales on Kauai. That was unchanged from a year earlier. The number of Hawaii island single-family home sales edged down 2% to 221 last month from 226 a year earlier.

US Rents Surge To Record Highs Led By Small-Town Texas Oil-Boom - After climbing roughly 1% in June, the national average rent in the US reached yet another record high as rents in small and mid-sized cities continued to outpace their larger peers. But while prices in Midland, Texas and Odessa, Texas led the pack as rising oil prices revived the fortunes of the US energy industry, the usual suspects continued to occupy the top spots, with Manhattan and San Francisco remaining the two most expensive rental markets in the country, according to RentCafe's latest monthly rent report. Here are a few takeaways from the June report, courtesy of RentCafe:

  • The national average rent reached the all-time high of $1,405 in June 2018, having increased by 2.9 percent year over year, and by 0.9 percent ($12) month over month, according to Yardi Matrix data.
  • Rents increased in 88 percent of the nation’s biggest 250 cities in June, remained unchanged in 10 percent of cities, and dropped in 2 percent of them compared to June 2017.
  • The top 20 fastest increases in the country were registered in small cities, where population migration and the strengthening economy are accelerating rent growth.
  • Manhattan has had the largest year-over-year rent increase of the past 12 months, June having brought a 1.5% increase after a year-long period of decreasing or stagnating prices.

With more families renting today than in years past (as home valuations make ownership out of reach for all but the middle-class and the wealthy, two- and three-bedroom apartments and homes have been the primary drivers of rent growth so far in 2018. However, June's increases were almost perfectly balanced as rents in one-bedroom and studio apartments caught up to two- and three-bedroomThe thriving oil-industry hubs of the Permian Basin, Midland and Odessa have been leading the nation with rents growing at a spectacular rate since the last significant drop in oil prices.

 Rising mortgage rates keep home equity line of credit usage down - Despite available home equity shooting up in the first quarter, the share of total equity withdrawn by borrowers hit a four-year low, likely due to growth in interest rates, according to Black Knight.The share of equity available to homeowners with mortgages increased 16.5% to $820 billion year-over-over and 7% to $380 billion quarter-over-quarter in the first quarter. This quarterly increase translates to a record high for Black Knight's analysis of tappable equity since the company began tracking this data in 2005. Despite strong growth in home equity, less homeowners are taking advantage of available funds as only 1.17% of equity was tapped in the first quarter. This marks the smallest share of utilized equity since 1Q14 and the second lowest share since the onset of the housing recovery, according to Black Knight.

Average millennial credit score by housing market varies by city -The average millennial borrower credit score remained unchanged in May, but values by city painted very different pictures, according to Ellie Mae.Based on the percentage of mortgage loans closed to millennials, average credit scores ranged from 662 (Madisonville, Ky.) to as high as 757 (San Francisco) in the top housing markets for the cohort.For comparison, the national average millennial borrower score held steady at 721 for the third consecutive month. This is the lowest average for the generation since April of last year. Regardless of age, the overall average FICO for borrowers who closed a mortgage in May was 724, a small increase from 723 in April. "You would expect to see higher average FICO scores in the largest coastal metropolitan cities where loan amounts are higher, which we do see in areas such as San Francisco (757), Los Angeles (745), Boston (701) and Miami (722); however, there are some surprisingly high numbers in more rural areas, such as Mitchell, S.D., where the average FICO for millennials was 735 in May, higher than Boston or Miami," Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae, said in a press release. "Our Borrower Insights Survey recently found that many millennials have a strong misperception about needing a perfect credit score to qualify for a home loan," added Tyrrell. Purchase loans made up 90% of all mortgages closed to millennials in May, growing from 89% from the prior month. Refinances accounted for 9% of closed loans, a decline of one percentage point. Conventional loans comprised 68% of millennial closed loans, Federal Housing Administration loans made up 28% and Department of Veterans Affairs loans made up 2% of loans closed to millennials in May.

Why mortgage lenders are of two minds about extending credit - Greater consumer access to credit could help mortgage bankers replenish originations eroded by higher rates, but they are reluctant to depart from the status quo to provide it. "Rising interest rates and inflation, when combined with today's inventory shortage, are accelerating home price appreciation, causing some lenders and consumers to explore less-tested methods for financing home purchases," Rohit Gupta, Genworth Mortgage president and CEO, said in a press release.  But most lenders and consumers still prefer financing that is "backed by tested, well-capitalized businesses," he said.

Consumer Credit Explodes Higher As Credit Card Debt Hits New All Time High After a sharp slowdown in the growth of US consumer credit in the last month of 2017 and in the first 4 months of 2018, in May, consumer credit exploded higher, soaring from $10.3BN in April to $24.6BN in May, smashing expectations of a $12BN monthly increase. This was the biggest beat of recently subdued expectations going back all the way to July 2011. Looking at the components of the spike, some $14.8BN came from non-revolving, or student and auto loans, well above last month's $9.2BN and the highest number going back to November 2017, pushing total non-revolving credit to a record $2.858 trillion ... ... but it was revolving credit that impressed, soaring by $9.8 billion, the biggest monthly increase since November, and one of the highest monthly increases on record. The sharp monthly jump ended the recent period of skittish credit card spending with a bang, and pushed the total revolving credit to a new all time high of $1.39 trillion. While there is no immediate explanation for the spike in credit spending by US consumers whose savings rate is already near record lows, it may have to do with greater confidence in the economy and the capital markets. It may also explain the resilience of the US economy in the second quarter which according to high-frequency indicators has now shifted over into Q3. As usual, the question is whether this burst of credit-card funded optimism is a one-time event, or if US consumers have once again unleashed a debt-fueled spending spree. If the latter, it will likely sustain personal consumption well into the third quarter, however with the obligatory giveback when households receive their surprisingly high credit card statement, which thanks to rising rates, now also happen to carry the highest interest rates since the financial crisis.

Consumer sentiment falls below expectations in July - Consumer sentiment dropped below expectations at the beginning of July but remained nearly equal to the average reading in the prior twelve months.Consumer sentiment fell to 97.1, below an estimated 98.2 according to economists surveyed by Reuters.June's preliminary reading was the highest the measure has been since hitting 101.4 in March, more than a point above May's reading of 98. The apparent optimism was driven by certainty of income and job prospects, according to the survey's chief economist Richard Curtin. The University of Michigan's report considers 500 consumers' attitudes about future economic conditions, including personal finances, unemployment, government policies and interest rates.

Hotels: Occupancy Rate decreased Year-over-Year -- From STR: US hotel results for week ending 7 July The U.S. hotel industry reported mixed year-over-year results in the three key performance metrics during the week of 1-7 July 2018, according to data from STR. In comparison with the week of 2-8 July 2017, the industry recorded the following:
• Occupancy: -3.1% to 63.5%
• Average daily rate (ADR): +1.1% to US$123.59
• Revenue per available room (RevPAR): -2.0% to US$78.47
STR analysts note that occupancy declines were mostly a result of the Fourth of July holiday, especially early in the week. The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

As restaurants go cashless, a backlash is building. Will D.C. intervene? -- Aaron Bateman pulled out a few bills to pay for a taco lunch in the nation’s capital. To his surprise, his money was no good in the city where money is printed. Surfside, a 24-hour Mexican eatery in Dupont Circle, doesn’t take cash. No cash means no register for robbers to empty out, no bills for workers to slip into their pockets and no change-counting holding up lines. The global cashless movement has reached Washington, where a growing number of fast-casual establishments and other spots are saying no to greenbacks in favor of plastic and mobile payments. Sweetgreen, the national salad chain founded by Georgetown University graduates, went cashless in most of its locations last year. Other cashless spots include a Menchie’s frozen-yogurt shop downtown, the posh Barcelona Wine Bar on 14th Street NW and the Bruery beer store at Union Market. Soon, they may be breaking the law. Critics of no-cash policies say they shut out the 1 in 10 District residents who don’t have bank accounts and undocumented immigrants who can’t easily sign up for cards. Some people also pay in cash so they can better track their spending or to avoid having their card information stolen. Heeding these concerns, several lawmakers in the District have introduced a bill to require retailers to accept cash. “By denying the ability to use cash as a payment, businesses are effectively telling lower-income and younger patrons that they are not welcome,” said D.C. Council member David Grosso (I-At Large). 

 It's not your imagination, airline restrooms are getting smaller - If the restroom on your next flight seems a bit snug, don’t assume you’ve picked up a few pounds. U.S. airlines increasingly are putting smaller lavatories on their planes — and the economics of the decision means they’re probably here to stay.As labour costs rise and fuel prices surge, airlines are taking advantage of robust travel demand to squeeze as many passengers as possible into planes. Knee-bashing reductions to legroom and elbow-crunching cuts to seat size are well-known tactics.  The latest method is to retrofit old aircraft and order new ones with svelte lavatories that allow for an extra row of seats. Airlines say the new restrooms are just a few inches smaller than what passengers are used to. But it’s not like the bathrooms were that big to begin with, and the tighter fit is sparking complaints from pilots, concerns from flight attendants and griping from travellers.  Consultant Samuel Engel said taking his 4-year-old son to the restroom during a recent four-hour flight was like a yoga exercise. “We’re both compact people, but I still had to basically straddle him to be able to fit in the lav together,” said Engel, who leads the aviation group at consulting firm ICF. “The sink is so tiny that we did a sort of four-handed ballet to wash each of our hands in turn, splashing water all over in the process.” The experience could be duplicated on just about any U.S. carrier. American Airlines Group Inc. is using a smaller lavatory supplied by Airbus SE on new A321neos and remodelled older A321s to squeeze in more seats. The airline also is putting in diminutive restrooms made by Rockwell Collins Inc. on more than 300 Boeing Co. 737 aircraft.

BLS: CPI increased 0.1% in June, Core CPI increased 0.2% -- From the BLS: The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in June on a seasonally adjusted basis after rising 0.2 percent in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.9 percent before seasonal adjustment. The indexes for shelter, gasoline, and food all rose to lead to the seasonally adjusted increase in the all items index. The food index increased 0.2 percent in June, with the indexes for food at home and food away from home both rising 0.2 percent. Despite a 0.5-percent increase in the gasoline index, the energy index declined 0.3 percent, with the indexes for electricity and natural gas both falling. The index for all items less food and energy rose 0.2 percent in June. … The all items index rose 2.9 percent for the 12 months ending June; this was the largest 12-month increase since the period ending February 2012. The index for all items less food and energy rose 2.3 percent for the 12 months ending June.  I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI. This was close to the consensus forecast

Consumer Price Index: June Headline at 2.87% - The Bureau of Labor Statistics released the June Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 2.87%, up from 2.80% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 2.26%, up from the previous month's 2.24% and above the Fed's 2% PCE target. Here is the introduction from the BLS summary, which leads with the seasonally adjusted monthly data:The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in June on a seasonally adjusted basis after rising 0.2 percent in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.9 percent before seasonal adjustment.The indexes for shelter, gasoline, and food all rose to lead to the seasonally adjusted increase in the all items index. The food index increased 0.2 percent in June, with the indexes for food at home and food away from home both rising 0.2 percent. Despite a 0.5-percent increase in the gasoline index, the energy index declined 0.3 percent, with the indexes for electricity and natural gas both falling.The index for all items less food and energy rose 0.2 percent in June. The shelter index rose 0.1 percent, and the indexes for medical care, used cars and trucks, new vehicles, and recreation all increased. The indexes for apparel, airline fares, and household furnishings and operations all declined in June.The all items index rose 2.9 percent for the 12 months ending June; this was the largest 12-month increase since the period ending February 2012. The index for all items less food and energy rose 2.3 percent for the 12 months ending June. The food index increased 1.4 percent, and the energy index rose 12.0 percent, its largest 12-month increase since the period ending February 2017. [More…] was looking for a 0.2% MoM change in seasonally adjusted Headline CPI and 0.2% in Core CPI. Year-over-year forecasts were 2.9% for Headline and 2.3% for Core. The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since the turn of the century. The highlighted two percent level is the Federal Reserve's Core inflation target for the CPI's cousin index, the BEA's Personal Consumption Expenditures (PCE) price index.

CPI Misses After Hotel Prices Drop By Most On Record -  Consumer Prices rose less than expected MoM (+0.1% vs +0.2% exp), but on a year-over-year basis, CPI surged 2.9% - the most since Dec 2011.While housing costs rose again, as the indexes for rent and owners' equivalent rent both increase by 0.3%...... The reason for the core miss, and the disappointing MoM print within the CPI report, was as a result of hotel and motel rates which tumbled by 3.7% in June from the previous month, the biggest decline on record and dragging down the broader index by 0.037 percentage point. Looking further under the hood, Energy Services and Apparel prices dropped MoM, while Fuel Oil prices jumped most MoM. Some more details from the report:

  • Apparel, one of the most volatile CPI components, fell -0.9% in this latest report. The index for airline fares also fell 0.9 percent, its third consecutive decline. The index for household furnishings and operations fell 0.1 percent, and the index for tobacco fell 0.4 percent. The index for personal care was unchanged in June.
  • The index for used cars and trucks rose 0.7 percent in June after declining in May. The new vehicles index increased 0.4 percent in June following a 0.3-percent increase in May. The index for recreation rose 0.2 percent in June, and the indexes for communication, motor vehicle insurance, education, and alcoholic beverages also increased.
  • The medical care index increased 0.4 percent in June. The hospital services index increased 0.8 percent, the index for prescription drugs rose 0.3 percent, and the physicians' services index was unchanged.

Finally, we note that today's CPI really puts the entire Treasury market complex into perspective; it's extraordinarily rare to get a negative real yield (on a spot basis) on the long bond, but we're getting awfully close.

    First Look at 2019 Cost-Of-Living Adjustments and Maximum Contribution Base -- The BLS reported this morning:The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 3.1 percent over the last 12 months to an index level of 246.196 (1982-84=100). For the month, the index increased 0.2 percent prior to seasonal adjustment.CPI-W is the index that is used to calculate the Cost-Of-Living Adjustments (COLA). The calculation dates have changed over time (see Cost-of-Living Adjustments), but the current calculation uses the average CPI-W for the three months in Q3 (July, August, September) and compares to the average for the highest previous average of Q3 months.  Note: this is not the headline CPI-U, and is not seasonally adjusted (NSA).  • In 2017, the Q3 average of CPI-W was 239.668.  This was the highest Q3 average, so we have to compare Q3 this year to last year.This graph shows CPI-W since January 2000. The red lines are the Q3 average of CPI-W for each year.Note: The year labeled for the calculation, and the adjustment is effective for December of that year (received by beneficiaries in January of the following year). CPI-W was up 3.1% year-over-year in June, and although this is very early - we need the data for July, August and September - my current guess is COLA will probably be over 3% this year, the largest annual increase since 2008. The contribution base will be adjusted using the National Average Wage Index. This is based on a one year lag. The National Average Wage Index is not available for 2017 yet, but wages probably increased again in 2017. If wages increased the average of the last three years, then the contribution base next year will increase to around $132,000 in 2019, from the current $128,400.

     But Who Pays the Price of All This Inflation? - Wolf Richter - Inflation “looks quite good,” Chicago Fed President Charles Evans said so eloquently in an interview even before today’s Consumer Price Index was released. Today, by his standards, inflation looks even better. In June, the Consumer Price Index for all urban consumers rose a brisk 2.9% compared to a year ago, the sharpest increase since February 2012::  Without the volatile food and energy groups, which weigh about 21% in the index, “core” CPI rose 2.2% in June compared to a year ago.  And the purchasing power of the dollar – which the Bureau of Labor Statistics also provides as a helpful reminder of what consumer price inflation actually is – dropped 2.7% from a year ago. In May and June, the dollar’s purchasing power reached, as it just about always does, a new record low. The chart below shows what the purchasing power of the dollar has been doing over the past decade:  Inflation is good for companies and landlords because it means they’re raising prices and rents, and they can report higher revenues without having sold a single extra thing. Their input costs may also rise, but they’re hoping that those increases will be less, and that in this manner, inflation will inflate their earnings. For that reason, they and their Wall Street hype jockeys love consumer price inflation. But they hate wage inflation because it eats into the hard-earned inflation profits. And the Fed has been trying to help out.  So the question arises: Who is paying for this inflation that the Fed has been strenuously trying to obtain over the last few years and that it now has obtained to the satisfaction of even its doves, such as aforementioned Mr. Evans?  Average hourly earnings for all employees in the private sector in June, according to the Bureau of Labor Statistics, rose 2.7% from a year ago.  It doesn’t take much inflation – however inflation is measured – to turn these feeble nominal wage increases into real-wage declines.  And this is precisely what happened in June. Mr. Evan should be pleased. Real wages fell by 0.13% from a year ago. Workers pay for consumer price inflation:

    May Producer Price Index: Final Demand Up 0.5% MoM - Today's release of the June Producer Price Index (PPI) for Final Demand came in at 0.3% month-over-month seasonally adjusted, down from last month's 0.3%. It is at 3.4% year-over-year, down from 3.1% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at 0.3% MoM, unchanged from the previous month and is up 2.8% YoY NSA. MoM consensus forecasts were for 0.2% headline and 0.2% core. Here is the summary of the news release on Final Demand: The Producer Price Index for final demand rose 0.3 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.5 percent in May and 0.1 percent in April. (See table A.) On an unadjusted basis, the final demand index moved up 3.4 percent for the 12 months ended in June, the largest 12-month increase since climbing 3.7 percent in November 2011. In June, most of the rise in the index for final demand is attributable to a 0.4-percent advance in prices for final demand services. The index for final demand goods edged up 0.1 percent. Prices for final demand less foods, energy, and trade services moved up 0.3 percent in June after rising 0.1 percent in May. For the 12 months ended in June, the index for final demand less foods, energy, and trade services climbed 2.7 percent. More… The BLS shifted its focus to its new "Final Demand" series in 2014, a shift we support. However, the data for these series are only constructed back to November 2009 for Headline and April 2010 for Core. Since our focus is on longer-term trends, we continue to track the legacy Producer Price Index for Finished Goods, which the BLS also includes in their monthly updates. As this (older) overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated.

    PPI Comes Blazing Hot Rising Most Since 2011; Yields Spike -- The week's first inflation report, the June PPI - ahead of tomorrow's even more anticipated CPI - has come in and it has come in hot and well ahead of expectations on both a monthly and annual basis:  headline PPI rose 0.3%, above the 0.2% expected, if modestly below last month's 0.5% surge, while on an annual basis, PPI increased a whopping 3.4%, well above the 3.1% consensus and May print, and highest level since Nov 2011. Energy goods and Trade services rose most MoM, but Food prices dropped 1.1% MoM. Core PPI, ex food and energy, rose 0.3% on the month (exp. 0.2%) and 2.8% Y/Y, a big jump from May's 2.4%, and also well ahead of expectations of 2.6%. According to the report, more than 40% of the increase in the index was due to higher retail margins for fuel. The gain also reflected a 1.3%MoM jump in truck transportation of freight, the largest in data back to July 2009. Another key factor in the June increase in prices for final demand goods was the index for motor vehicles, which moved up 0.4 percent. In contrast, the cost of goods rose 0.1 percent in June from a month earlier, reflecting cooling energy prices, after a 1 percent May surge.Some more details:

    • Final demand services: Prices for final demand services moved up 0.4 percent in June, the largest advance since a 0.5-percent rise in January. In June, half of the broad-based increase in the index for final demand services can be traced to margins for final demand trade services, which climbed 0.7 percent. Prices for final demand services less trade, transportation, and warehousing and for final demand transportation and warehousing services rose 0.3 percent and 0.5 percent, respectively.
    • Product detail: Over 40 percent of the advance in the index for final demand services is attributable to a 21.8-percent jump in the index for fuels and lubricants retailing. The indexes for hospital outpatient care; health, beauty, and optical goods retailing; truck transportation of freight; automobiles and automobile parts retailing; and food retailing also moved higher. Conversely, prices for apparel, footwear, and accessories retailing declined 2.9 percent. The indexes for inpatient care and airline passenger services also decreased. (See table 4.)
    • Final demand goods: Prices for final demand goods edged up 0.1 percent in June following a 1.0-percent rise in May. Leading the June increase, the index for final demand goods less foods and energy advanced 0.3 percent. Prices for final demand energy climbed 0.8 percent. In contrast, the index for final demand foods fell 1.1 percent.
    • Product detail: A major factor in the June increase in prices for final demand goods was the index for motor vehicles, which moved up 0.4 percent. Prices for diesel fuel, electric power, industrial chemicals, and fresh fruits and melons also advanced. Conversely, prices for fresh and dry vegetables dropped 13.8 percent. The indexes for corn, pharmaceutical preparations, and residential natural gas also moved lower.

    Import Prices Slide In June As Export Prices Surge Most Since 2001 -  US Import prices tumbled 0.4% MoM (against expectations of a 0.1% rise) - the biggest drop since Feb 2016's global growth scare - thanks to a plunge in EU (-0.3%), Mexico (-0.5%), and Canada (-0.3%), but export prices rose 0.3% MoM (more than the expected 0.2%). Non-manufactured import prices were the biggest drag, dropping 2.1% MoM. Foods and Beverages import prices fell 2.6% MoM. Capital goods prices fell 0.1% after falling 0.1% in May. Auto prices fell 0.1% after falling 0.1% in May And on a YoY basis, while import price gains slowed to 4.3% (Import prices ex-food and fuel rose 1.8% YoY in June), export prices surge by 5.3% - the most since Oct 2011... And it wasn't China, whose import price index was flat (0.0% MoM)...

    "Port of Long Beach Sees Busiest Month Ever" From the Port of Long Beach: Port of Long Beach Sees Busiest Month EverContainer cargo volumes reached record heights at the Port of Long Beach last month, surging past the previous mark and distinguishing June 2018 as the Port’s best month ever.Trade increased 14.2 percent in June, compared to the same month in 2017. The Port’s terminals moved 752,188 twenty-foot equivalent units (TEUs), 4.4 percent higher than the previous “best month” record set in July 2017. And from Reuters: China's imports to U.S. ports start peaking early amid tariff threatChinese imports to U.S. ports rose more than expected in June, suggesting that some retailers moved up orders to insulate themselves from an intensifying trade war that threatens to send up costs on a growing number of consumer products. Retailers such as Walmart Inc and (face uncertainty due to U.S. President Donald Trump’s threat to impose more tariffs on Chinese goods, and the jump in imports from the country was likely because of “pre-emptive buying in anticipation of the tariffs”, said Ben Hackett, founder of international maritime consultancy Hackett Associates.“This is a bump that isn’t quite normal,” he said. It appears port traffic is picking up early this year in an attempt to beat the tariffs. I'll post a graph once the Port of Los Angeles reports June traffic.

    Pre-Trade-War Buying Spree Sparks Biggest Jump In Wholesale Sales Since 2011 --In a sudden surge, out of the recent ranges, Wholesale sales soared 2.5% MoM in May - the biggest jump since March 2011 - suggesting pre-emptive buying ahead of Trump's tariffs (as opposed to a new trend).Farm Products and Computers saw big sales surges MoM in Mat as it appears wholesalers bought in inventory ahead of the expected (and now fact) trade tariffs. Wholesale inventories also accelerated notably (the highest YoY since Nov 2014), and Wholesale inventories excluding oil rose 0.5% in May.This surge in sales MoM relative to inventories sent the key inventories-to-sales ratio to its lowest since October 2014... And no recession in sight, right? The question is - what happens next month when that dragged forward sales evaporates?

    U.S. May wholesale inventories revised higher (Reuters) - U.S. wholesale inventories were a bit higher than initially estimated in May amid strong increases in the stocks of machinery and a range of other goods. A shopping cart is seen inside a Costco Wholesale warehouse club in Westbury, New York, U.S., May 23, 2016. REUTERS/Shannon StapletonThe Commerce Department said on Wednesday wholesale inventories increased 0.6 percent instead of the 0.5 percent gain it reported last month. Stocks at wholesalers edged up 0.1 percent in April. They rose 5.9 percent year-on-year in May. The component of wholesale inventories that goes into the calculation of gross domestic product - wholesale stocks excluding autos - increased 0.8 percent in May. Inventory investment was neutral to GDP growth in the first quarter. The economy grew at a 2.0 percent annualized pace during the January-March period. Economists expect the pace of inventory accumulation to pick up slightly in the second quarter. A sharp slowdown in domestic demand in the first quarter likely left businesses cautious about accumulating too much inventory. Wholesale auto inventories fell 1.2 percent in May after increasing 0.2 percent in April. Machinery inventories jumped 1.5 percent in May after rising 0.4 percent in April. There were increases in wholesale stocks of professional and computer equipment as well as electrical equipment, metals, lumber, furniture and hardware. Wholesale petroleum inventories stocks rose 2.7 percent in May after surging 4.0 percent in the prior month. Sales at wholesalers accelerated 2.5 percent in May, the biggest increase since March 2011, after rising 1.4 percent in April. Sales of motor vehicles rebounded 2.9 percent after falling 0.4 percent in April. At May’s sales pace it would take wholesalers 1.24 months to clear shelves, the lowest since November 2014, down from 1.27 months in April. 

    Annual Vehicle Sales: On Pace to increase slightly in 2018 -- The BEA released their estimate of June vehicle sales. The BEA estimated sales of 17.38 million SAAR in June 2018 (Seasonally Adjusted Annual Rate), up 3.2% from the May sales rate, and up 4.7% from June 2017.  Through June, light vehicle sales are on pace to be up slightly in 2018 compared to 2017. This would make 2018 the fourth best year on record after 2016, 2015, and 2000. My guess is vehicle sales will finish the year with sales lower than in 2017. A small decline in sales this year isn't a concern - I think sales will move mostly sideways at near record levels. As I noted last year, this means the economic boost from increasing auto sales is over (from the bottom in 2009, auto sales boosted growth every year through 2016). This graph shows annual light vehicle sales since 1976.   Sales for 2018 are estimated based on the pace of sales during the first six months.

    U.S. Heavy Truck Sales up Year-over-year in June - The following graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the June 2018 seasonally adjusted annual sales rate (SAAR). Heavy truck sales really collapsed during the great recession, falling to a low of 181 thousand in April and May 2009, on a seasonally adjusted annual rate basis (SAAR). Then sales increased more than 2 1/2 times, and hit 480 thousand SAAR in June 2015. Heavy truck sales declined again - probably mostly due to the weakness in the oil sector - and bottomed at 364 thousand SAAR in October 2016.With the increase in oil prices over the last year, heavy truck sales increased too. Heavy truck sales were at 475 thousand SAAR in June, up from 452 thousand in May, and up from 416 thousand in June 2017.

    Where are America's truck drivers? -- There is a truck driver shortage in the U.S. At least according to multiple media reports, the American Trucking Association, and the cost of shipping goods on trucks. In June, the ATA’s chief economist Bob Costello said that, “Finding enough qualified drivers remains a tremendous challenge for the trucking industry and one that if not solved will threaten the entire supply chain.”Jobs data released Friday, however, doesn’t tell quite the same story of an industry in crisis.Employment in the sector only just topped the pace of overall job growth in the economy last month — employment in the trucking business rose 1.7% over last year in June while the overall economy saw a 1.6% increase in workers.Meanwhile, wage increases in the transportation and warehousing industry have risen less than the rest of the private sector in the last two months. And though this broader sector-level read on wages doesn’t isolate truck drivers the way employment data do, one would still expect to see the industry outperforming the rest of the labor market. In a note to clients following Friday’s jobs report, Michael Feroli, an economist at JP Morgan, wrote that as wage growth disappointed expectations in June, “the contrast with common anecdotes about pay growth is striking, particularly when one digs down and sees wages in industries like long-haul freight trucking up only 1.4% over a year ago.”

    Small Business Optimism Index decreased in June --From the National Federation of Independent Business (NFIB): June 2018 Report: Small Business Optimism IndexThe Small Business Optimism Index posted its sixth highest reading in survey history for the month of June, at 107.2, down 0.6 from May.  Reports of employment gains remain strong among small businesses. Owners reported adding a net 0.19 workers per firm on average, virtually unchanged from May. This graph shows the small business optimism index since 1986.

    Weekly Initial Unemployment Claims decreased to 214,000 --The DOL reported: In the week ending July 7, the advance figure for seasonally adjusted initial claims was 214,000, a decrease of 18,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 231,000 to 232,000. The 4-week moving average was 223,000, a decrease of 1,750 from the previous week's revised average. The previous week's average was revised up by 250 from 224,500 to 224,750.  The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.

    BLS: Job Openings Decreased in May -- Notes: In May there were 6.638 million job openings, and, according to the May Employment report, there were 6.065 million unemployed. So, for the second consecutive month, there were more job openings than people unemployed. Also note that the number of job openings has exceeded the number of hires since January 2015. From the BLS: Job Openings and Labor Turnover Summary The number of job openings edged down to 6.6 million on the last business day of May, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were little changed at 5.8 million and 5.5 million, respectively. Within separations, the quits rate and the layoffs and discharges rate were little changed at 2.4 percent and 1.1 percent, respectively. ...The number of quits increased in May to 3.6 million (+212,000). The quits rate was 2.4 percent. The number of quits rose for total private (+204,000) and was little changed for government.The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS. . Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. Note that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. This is a measure of labor market turnover. When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs. Jobs openings decreased in May to 6.638 million from 6.840 million in April. The number of job openings (yellow) are up 16.7% year-over-year. Quits are up 10.4% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits"). Job openings are at a high level, and quits are increasing year-over-year. This was a strong report.

    More Job Openings Than Unemployed Workers, As People Quitting Hits All Time High -- There was a surprising development last month, when the latest JOLTS report revealed a curious, if welcome for the US economy, inflection point: for the first time in reported BLS data, the number of US job openings surpassed the number of unemployed workers.Fast forward one month, when as the BLS reported the number of unemployed workers surged from 6 million to 6.6 million as people who had previously remained outside the labor force, flooded back in. The question was whether this surge would also reverse this Opening-Unemployed trend. However, as the just released May JOLTS report revealed, for the second month in a row the number of job openings stayed above the total number of unemployed workers, as April's 6.698MM job openings number was revised higher to 6.840MM, to a new all time high, yet which dipped modestly to 6.620MM in May which however was still above the 6.564MM unemployed workers. In other words, in an economy in which there was a perfect match between worker skills and employer needs, there would be zero unemployed people at this moment (of course, that is not the case.)According to the BLS, the number of job openings decreased for total private (-228,000) and was little changed for government. Job openings increased in federal government (+12,000) and mining and logging (+10,000) but decreased in information (-60,000) and arts, entertainment, and recreation (-27,000).Adding to the exuberant labor picture, while job openings remained above total unemployment, the number of total hires also increased to just shy of a new record, rising to 5.754 million in May from 5.581 million in April, and on the verge of an all time high. The number of hires increased the most in health care and social assistance (+48,000). According to the historical correlation between the number of hires and the 12 month cumulative job change (per the Establishment Surve), either the pace of hiring needs to drop, or else the number of new jobs will rise significantly in the coming months.

    May JOLTS report: as good as could be asked for --The simple take on yesterday's JOLTS report for May is that it was excellent:

    • Hires made a new high
    • Quits made a new high
    • Total separations made a new high
    • Openings were just shy of their expansion high
    • Discharges were just shy of their expansion low

    In short, pretty much everything good that could happen during a positive labor market, happened. So let's update where the report might tell us we are in the cycle. Let's start with the simple metric of "hiring leads firing." Here's the long term relationship since 2000, quarterly through the end of March: Here is the monthly update for the past several years through May: In the 2000s business cycle, both turned down well in advance of the recession. That isn't the case now. Hires had been within a 2% range since last May, and had not made a new high since last October, making YoY comparisons more challenging as of this month, but both hires and separations jumped considerably (interestingly, just like May last year, which makes me wonder if there is a little unresolved seasonality). Further, in the previous cycle, after hires stagnated, shortly thereafter involuntary separations began to rise, even as quits continued to rise for a short period of time as well: [Note: above graph show quarterly data, ending Q1, to smooth out noise] Here is a close-up of the same data on a monthly basis for the last 2 years through May: This in no way resembles a late cycle report from the 2000s cycle. Nevertheless, the large majority of overall economic data suggests we are late in the cycle. Thus, my anticipation remains that we will see weaker, and even negative YoY readings on hiring in particular at some point in the second half of this year. We'll see.

    How the capitalist class is strangling the American economy -- If you stand on your head, close one eye, squint, and take a massive rip of DMT, it looks like we just might be brushing up against full economic capacity. America gained 244,000 jobs in May, and 213,000 in June. Payroll growth has been down just slightly, but finally the number of job seekers has dipped slightly below the number of job openings. Meanwhile, inflation has been ticking up slightly. All around, there are at least faint signs of hope. In response, the capitalist class is stoking one of its signature coordinated freakouts. At business house organ CNBC, Jeff Cox writes with aching pathos: "America's labor shortage is approaching epidemic proportions, and it could be employers who end up paying." (Pardon me briefly to dry the tears from my cheeks.)This is pretty obnoxious. But it's also illustrative of how capitalists strangle the American economy.To review: Though it has been largely forgotten or ignored, the American economy has not remotely recovered fully from the Great Recession. While unemployment is low and growth at least trundling along, economic output crashed badly in 2008, and instead of catching up to trend, growth kinked down by something like 40 percent. This is because of the inadequate Obama-era stimulus, and the turn to austerity after 2010.  As a result, we are further away today from the 1945-2007 trend than we were in 2010, and it's getting worse with every passing year. Productivity has also consistently been far below average since about 2011. If we had just followed the previous pattern of catch-up growth after recessions, American output would be something like $3 trillion (or more than the GDP of California) than it is in reality. Indeed, we are now doing worse on this metric than at a similar point after the Great Depression.

    Regulators Investigate Fast-Food Chains' Limits On Worker Recruitment - Fast-food workers may be stuck in jobs for various reasons. In many cases, their employers prevent them from leaving to work for other restaurants within the same chain. Now, 10 state attorneys general and the District of Columbia are taking on the issue withan investigation into eight national fast-food chains. At issue are "noncompete" clauses that limit where employees can work after they leave. Traditionally, such clauses are in high-tech companies that want to protect trade secrets and keep top executives from jumping to work for a competitor. But such restrictions are also used by fast-food franchises where they agree not to recruit or hire workers who work for other franchisees in the same chain.The practice is coming under increasing fire from regulators and lawmakers who are concerned that it limits workers' ability to get new and better jobs.In the investigation, announced on Monday, the attorneys general are seeking information from Burger King, Wendy's, Arby's, Panera, Dunkin' Donuts, Five Guys, Little Caesars and Popeyes.The goal of the probe is to help quantify how many people are affected and how it affects workers' ability to move up the ladder, says Josh Shapiro, Pennsylvania's attorney general.

    Inflation Is Eating Away Worker Wage Gains – WSJ —U. S. inflation hit its highest rate in more than six years, with consumer prices eating away at modest wage gains by American workers and underscoring questions about how much they are benefiting from an economy that by many other measures is booming. The consumer-price index, which gauges what Americans pay for everything from veterinarian services to baby clothes, rose a seasonally adjusted 0.1% in June from the prior month, the Labor Department said Thursday. Excluding volatile food and energy components, so-called core prices increased 0.2%. Economists surveyed by The Wall Street Journal had expected a 0.2% uptick from May for both the overall index and core inflation.Prices rose 2.9% in June from a year earlier, the fastest pace since February 2012. Core inflation ticked up to 2.3% over the past 12 months, the highest rate since January 2017.In June, for a second month in a row, annual inflation fully offset average hourly wage growth over the previous year. That left workers’ real hourly earnings flat over the 12-month period despite falling unemployment and a strong economy even as workers made up for higher prices by clocking slightly more hours a week in June. Production and nonsupervisory employees, a category which includes blue-collar workers, saw their real average hourly wages fall 0.2% in June from a year earlier after a similar slip in May.    Economists estimate gross domestic product grew in the second quarter at one of the fastest clips measured since the recession, while corporate tax cuts enacted at the end of 2017 likely fueled record earnings by publicly traded U.S. companies, analysts say.. “The remarkable ability of firms to lure more workers back into the labor force and get stronger productivity gains from them without raising wages is a clear positive for profits.” The year-over-year rise in prices last month was led by energy commodities on the heels of a sharp increase in oil prices earlier this spring. Gasoline prices rose a seasonally adjusted 0.5% in June from May and 24% from a year earlier, the CPI report showed. Separate data from the U.S. Energy Information Administration showed the average price for a gallon of regular gasoline rose to $2.89 last month, the highest price for June since 2014. Shelter and rent costs, which account for about a third of overall consumer spending, rose 0.1% in June from May and were up 3.4% from a year earlier. Prices for medical-care services rose 0.5% from May and 2.5% from June 2017. And food prices rose 0.2% last month from May, though the annual increase in this category was more muted at 1.4%.

    New Study Confirms That American Workers Are Getting Ripped Off - America’s unemployment rate is hovering near half-century lows. There are now more job openings than unemployed workers in the United States for the first time since the government began tracking that ratio. For America’s working class, macroeconomic conditions don’t get much better than this. And yet, most Americans’ wages aren’t getting any better, at all. Over the past 12 months, piddling wage gains — combined with modest inflation — have left the vast majority of our nation’s laborers with lower real hourly earnings than they had in May 2017. On Wall Street, the second-longest expansion in U.S. history has brought boom times — in the coming weeks, S&P 500 companies will dole out a record-high $124.1 billion in quarterly dividends. But on Main Street, returns have been slim. Economists have put forward a variety of explanations for the aberrant absence of wage growth in the middle of a recovery: Automation is slowly (but irrevocably) reducing the market-value of most workers’ skills; a lack of innovation has slowed productivity growth to a crawl; well-paid baby-boomers are retiring, and being replaced with millennials who have enough experience to do the boomers’ jobs — but not enough to demand their salaries.There’s likely some truth to these narratives. But a new report from the Organization for Economic Cooperation and Development (OECD) offers a more straightforward — and political — explanation: American policymakers have chosen to design an economic system that leaves workers desperate and disempowered, for the sake of directing a higher share of economic growth to bosses and shareholders. The OECD doesn’t make this argument explicitly. But its report lays waste to the idea that the plight of the American worker can be chalked up to impersonal economic forces, instead of concrete political decisions. If the former were the case, then American laborers wouldn’t be getting a drastically worse deal than their peers in other developed nations. But we are. Here’s a quick rundown of the various ways that American workers are getting ripped off:

    Retail Wars: Walmart Patents Audio Surveillance Device To Monitor Employees - In a world where Amazon is forcing inefficient big-box stores out of the picture, Walmart is under intense pressure to increase labor efficiency. Walmart is plagued with large overhead expenses, including retail real estate and full-time employees; while those overhead expenses are not as much for Amazon, which relies heavily  upon automation in warehouses and an extensive network of subcontracted delivery workers. Amazon measures employee productivity by the minute, uses mass surveillance networks in its warehouses, and even has patents to track the movements of its workers’ hands through smart wristbands.As the retail war intensifies, it seems as Walmart has followed Amazon’s lead, and is now making moves to incorporate emerging technologies to improve labor efficiency. On Tuesday, the U.S. Patents and Trademark Office approved Walmart’s patent for surveillance tools that audibly track their employees’ productivity.It seems as both retailers [Walmart and Amazon] are progressing towards the Orwellian era of mass surveillance in the form of microchipping their workforce to improve labor efficiency.According to the patent, the audio surveillance technology would include various sensors strategically placed around the check-out area of the store that would secretly collect and analyze audio data.The “listening to the frontend” technology, as it is called, could include the sounds of employees bagging items to the conversations between patrons. Through artificial intelligence, Walmart could then use the data to evaluate an employee’s performance automatically.As BuzzFeed News notes, the most startling feature is the audio surveillance system’s ability to comprehend conversations and use them to assess an employee’s performance:“If however the performance metric is based on the content of the conversation (e.g., was a specific greeting used or script followed), the system can process the audio detected by the sound sensors 102 (e.g., using speech recognition) to determine the performance metric,” the patent description explains. In other words, a talkative cashier with low labor efficiency could find themselves reprimanded for being too chatty — or even fired.

    Americans aren’t using up their vacation days -- It's a sad state of affairs for a nation already notoriously overworked and overstressed.The United States has earned the unfortunate moniker of "no vacation nation." A recent study by Kimble, a company dedicated to improving business practices, has revealed that nearly half (47 percent) of American employees did not use all their vacation days last year, and 21 percent left more than 5 vacation days unused. (The average Canadian leaves 3 days unused each year.)The report surveyed 1,200 Americans with full-time jobs that are eligible for paid time off. Many (27 percent) said they have too many work-related projects on the go to be able to leave, while some (13 percent) fear the amount of work they'll return to, and so find it easier not to go away. Others worry about employers' reactions, with 19 percent feeling pressured by managers to stay and 7 percent nervous that requests won't be approved.The findings are troubling, since vacations are actually very good for professional performance. Taking time off allows for mental rejuvenation, catching up on sleep deficits, physical relaxation and reduced stress levels, not to mention reconnecting with family and friends. Vacations can even save lives, as one Canadian news report stated recently. The journal Psychosomatic Medicine found that middle-aged men with a high risk of coronary heart disease were "21 percent less likely to die of any cause other than old age, and 32 percent less likely to die of heart disease" if they went on vacation once a year.

    Residents of California city once known as ‘America’s foreclosure capital’ are set to get monthly $500 stipend, with NO strings attached, in bid to boost local economy - Stockton, California will become the first city in the country to participate in a test of Universal Basic Income, in which 100 residents will be given $500-dollars-a-month, with no strings attached.The program aims to create a level of income that no one will fall beneath.  By providing impoverished residents a regular sum of money that they can use on anything they wish, be it food, clothes, gas, or starting a new venture, those behind the program believe it could go a long way to give people enough support to try out new ideas. The program in Stockton, which was once known as America's foreclosure capital, will see the program launched by 2019, and the payments will continue to the individuals chosen for the program for a full 18-months. The Stockton UBI program has heavy backing from one of the wealthiest areas of the country- Silicon Valley, according to CNN Money. The idea is, in part, to off-set the economic distress the growing automation industry is expected to cause to American laborers, as well as a way to potentially reduce poverty.One of the backers for the Stockton UBI program is Facebook's co-founder Chris Hughes, whose organization, the Economic Security Project, contributed $1 million to the Stockton initiative.'It is such a fundamental idea behind America that if you work hard, you can get ahead, and you certainly don't live in poverty. But that isn't true today, and it hasn't been true in the country for decades,' Hughes told CNN Money. 'I believe that unless we make significant changes today, the income inequality in our country will continue to grow and call into question the very nature of our social contract.'

    SNAP work requirements could increase deep poverty for some - Designed to boost the earnings and job prospects of low-income Americans, proposed work requirements for food stamp recipients could have another unexpected effect: causing deep poverty rates to spike among those who lose their benefits and can’t find work, researchers say.That’s what happened to nearly 1 million single mothers in the years after the 1996 welfare reform legislation imposed work requirements and time limits on cash benefits provided through Temporary Assistance for Needy Families, at a time when the U.S. economy was similarly thriving.While many welfare recipients found work and earned their way out of poverty after the work requirements were enacted, others lost their TANF benefits when they couldn't meet the new law's required work activities. For those mainly single mothers, "there was little or no safety net to catch them anymore and they fell” into deep poverty, with income below 50 percent of the federal poverty level, said Arloc Sherman, a senior fellow at the left-leaning Center on Budget and Policy Priorities. Among female-headed families with children, the deep poverty rate more than doubled from 2.7 percent, or about 800,000 people in 1995, to 5.7 percent, or roughly 1.7 million people in 2005, according to a 2015 CBPP analysis."The data show it was the decline in government assistance and not changes in people's paychecks and other private income that drove the increase in deep poverty,” Sherman said.Deep poverty rates could rise again under new work requirements that Congress is considering for the Supplemental Nutrition Assistance Program, formerly known as food stamps, said Robert A. Moffitt, an economics professor at Johns Hopkins University. “There almost certainly will again be quite a large fraction of those recipients who will have difficulty finding earnings to make up for all those benefits.. And they will probably be worse off,"

     Analysis: Why You Should Care About Undocumented Immigrants - While the nation’s attention is currently focused on the southern border, what’s being forgotten is that millions of undocumented immigrants continue to live in the U.S. – and most of them work.  And in fact, these workers play vital roles in the U.S. economy, erecting American buildings, picking American apples and grapes, and taking care of American babies. Oh, and paying American taxes. My work as the director of the Cornell Farmworker Program involves meeting with undocumented workers in New York, and the farmers who employ them. Here’s a snapshot of who they are, where they work – and why Americans should care about them.

    Illinois Governor Profits from ICE Detention Centers— Gov. Bruce Rauner this year reported turning a profit from a health care group that services U.S. Immigration and Customs Enforcement detention centers, including facilities that hold immigrant families with children. In his most recent statement of economic interests, the multi-millionaire Republican governor disclosed earnings from a private equity fund that owns Correct Care Solutions, a for-profit health care provider that has millions of dollars in government contracts with jails and prisons across the country, including immigrant detention centers.    The governor said he relinquished investment decisions to a third party and has no direct ties to Correct Care Solutions, a group whose work extends to places like Karnes County Residential Center in Texas, one of just four immigrant family detention centers in the country contracted for profit.  Still, Rauner’s disclosures indicate that he’s earning income from the group, which reports annual revenue of $1 billion.   The financial connection between a sitting governor and for-profit ICE detention contractors is one that immigration rights groups insist is a clear conflict of interest. They also point to Correct Care Solutions’ track record involving dozens of lawsuits alleging wide-ranging negligence.

    Thousands of Anti-Violence Protesters Shut Down Chicago Highway - — Thousands of anti-violence protesters marched along a Chicago interstate on Saturday, shutting down traffic in an effort to draw attention to the gun violence that’s claimed hundreds of lives in some of the city’s poorest neighborhoods and pressure public officials to do more to stop it. Marchers chanted “Stop the killing” and carried signs reading “We need jobs” and other messages. Some stopped to scrawl on the road with chalk: “Enough is enough” and “Peace.” Toward the front of the march the Rev. Michael Pfleger, who organized the protest, Chicago police Supt. Eddie Johnson and the Rev. Jesse Jackson linked arms. The march took place along the northbound lanes of Interstate 94, known as the Dan Ryan Expressway, after a roughly hourlong standoff between police and the protesters. Illinois State Police, which had warned earlier in the week that any pedestrian entering the expressway would face arrest, said early Saturday that an agreement had been reached for protesters to march on a portion of the roadway. Officers and vehicles lined up, forming a barrier to keep protesters in two northbound lanes, allowing some traffic to pass in other northbound lanes.But Pfleger and protesters insisted there was no agreement and that they would shut down the entire northbound roadway, with Pfleger noting the city closes major roads for parades and other occasions. The crowd began creeping into other lanes — a situation Pfleger said had the potential to become dangerous. Illinois State Police, which has jurisdiction over expressways, announced around 11:30 a.m. that they were shutting down all northbound lanes of the expressway. Protesters then began walking northbound along a roughly 1.5-mile (2.4-kilometer) route.

    Americans Own 46% of the World's 1 Billion Guns, Says U.N. Report – There are over 1 billion firearms in the world today, including 857 million in civilian hands — with American men and women the dominant owners, according to a study released Monday. The Small Arms Survey says 393 million of the civilian-held firearms, 46 percent, are in the United States, which is “more than those held by civilians in the other top 25 countries combined.” “The key to the United States, of course, is its unique gun culture,” the report’s author, Aaron Karp, said at a news conference. “American civilians buy an average of 14 million new firearms every year, and that means the United States is an overwhelming presence on civilian markets.” The report said the numbers include legal and illegal firearms in civilian hands, ranging from improvised craft weapons to factory-made handguns, rifles, shotguns and, in some countries, even machine guns. The estimate of over 1 billion firearms worldwide at the end of 2017 also includes 133 million such weapons held by government military forces and 22.7 million by law enforcement agencies, it said. Karp said the new global estimate is significantly higher than the 875 million firearms estimated in the last survey in 2007, and the 650 million civilian-held firearms at that time — mostly due to increasing civilian ownership. While the United States was dominant in civilian ownership in 2007 and 2017, the report said the U.S. is only fifth today in military firearms holdings, behind Russia, China, North Korea and Ukraine. It is also fifth in law enforcement holdings, behind Russia, China, India and Egypt. 

    Use of heavy sedative by Minneapolis police under investigation - The Minneapolis Star Tribune published information from a leaked copy of a draft report from the Office of Police Conduct Review last month which details the routine use of ketamine, a heavy sedative, on detained individuals by the Minneapolis Police Department (MPD). The report reviews statistics and details specific cases where police directed Emergency Medical Service (EMS) paramedics to inject ketamine into individuals who were already restrained and/or handcuffed. The cases leading to officers directing EMS to use ketamine ranged from jaywalking to obstruction of justice. In one case police used multiple doses of ketamine on the same person, and in another the drug was used on a woman having an asthma attack.Despite claims of transparency by the police and city officials, the report itself and the bodycam footage have not been released to the public out of a deep fear by the political establishment that its release will spark mass protests in the city.While claiming that the release of the report will hurt the “public trust” of the police, the reality is that the there is no trust between the working class and the police, who are encouraged to terrorize workers and kill with impunity.Over the past five years, the entire span of time the report details, only one person who received ketamine was arrested. The report also showed a rise in police use of ketamine over the years, from two incidents in 2012 to 67 in 2017, with possibly many more that went unreported. Ketamine, which is documented as a date-rape drug by the MPD, is a powerful sedative that can induce heart or breathing failure, requiring individuals on the drug to be revived or intubated. The drug results in memory loss with possible side effects include hallucinations, confusion and agitation.

    Bach at the Burger King - AT THE CORNER of 8th and Market in San Francisco, by a shuttered subway escalator outside a Burger King, an unusual soundtrack plays. A beige speaker, mounted atop a tall window, blasts Baroque harpsichord at deafening volumes. The music never stops. Night and day, Bach, Mozart, and Vivaldi rain down from Burger King rooftops onto empty streets. Empty streets, however, are the target audience for this concert. The playlist has been selected to repel sidewalk listeners — specifically, the mid-Market homeless who once congregated outside the restaurant doors that served as a neighborhood hub for the indigent. Outside the BART escalator, an encampment of grocery carts, sleeping bags, and plastic tarmacs had evolved into a sidewalk shantytown attracting throngs of squatters and street denizens. “There used to be a mob that would hang out there,” remarked local resident David Allen, “and now there may be just one or two people.” This tactic was suggested by a cryptic organization called the Central Market Community Benefit District, a nonprofit collective of neighborhood property owners whose mission statement strikes an Orwellian note: “The CMCBD makes the Central Market area a safer, more attractive, more desirable place to work, live, shop, locate a business and own property by delivering services beyond those the City of San Francisco can provide.” These supra-civic services seem to consist primarily of finding tasteful ways to displace the destitute. The inspiration for the Burger King plan, a CMCBD official commented, came from the London Underground. In 2005, the metro system started playing orchestral soundtracks in 65 tube stations as part of a scheme to deter “anti-social” behavior, after the surprising success of a 2003 pilot program. The pilot’s remarkable results — seeing train robberies fall 33 percent, verbal assaults on staff drop 25 percent, and vandalism decrease 37 percent after just 18 months of classical music — caught the eye of the global law-enforcement community. Thus, an international phenomenon was born. Since then, weaponized classical music has spread throughout England and the world: police units across the planet now deploy the string quartet as the latest addition to their crime-fighting arsenal.

    NYT Sees ‘Dystopia’ in Chinese Surveillance—Which Looks a Lot Like US Surveillance --- There’s a category of story we call “Them Not Us”—US media reporting on problems abroad, and seemingly not noticing that they have the same problems at home. There’s a great example of that in the New York Times (7/8/18), headlined “Inside China’s Dystopian Dreams: AI, Shame and Lots of Cameras.”Reporter Paul Mozur writes:Beijing is embracing technologies like facial recognition and artificial intelligence to identify and track 1.4 billion people. It wants to assemble a vast and unprecedented national surveillance system, with crucial help from its thriving technology industry.Is it really so unprecedented, though? The US National Security Agency in 2011 described its “New Collection Posture” toward global electronic communication as “Know It All…Collect It All…Process It All…Exploit It All.” Hard to get much vaster than that, isn’t it? As for embracing technologies like facial recognition with crucial help from a thriving technology industry, here’s a headline from the Guardian (7/6/18) that came out two days before the Times piece: Thanks to Amazon, the Government Will Soon Be Able to Track Your Face Mozur went on to write, “Other systems…track internet use and communications, hotel stays, train and plane trips and even car travel in some places.” “Even car travel in some places”? It sounds like China is playing catch-up to the US when it comes to surveilling its motorists, as media activist Tracy Rosenberg recently described to CounterSpin (6/29/18): On license plate readers, these are sort of ubiquitous. In the past decade, they really have been set up in probably the majority of cities and counties in the US. And they take a photograph of the front of a car—they’re usually pole-mounted on traffic lights—as it goes by. And, essentially, if you are one of those people who happens to drive back and forth, every single day, past one of these, it can geolocate you in time and space, based on your license plate, on a fairly regular basis.

     US judge rules literacy is “not a right” -- On June 29, US District Judge Stephen Murphy III dismissed the class action lawsuit Gary B. v. Snyder filed on behalf of a group of Detroit students and their parents against the state of Michigan officials asserting that there is no constitutional right to literacy.The 2016 suit charged Michigan state officials, including Governor Rick Snyder and State Superintendent of Schools Brian Whiston, with denying Detroit schoolchildren “access to literacy” stemming from chronic underfunding, mismanagement and discrimination.During the period referenced in the suit, Detroit schools were under direct state “emergency management,” first implemented under Democratic Governor Jennifer Granholm in 2009. The suit characterizes the schools in the nation’s poorest large city as “waver[ing] in a precarious condition characterized by indefensibly low achievement scores, precipitously declining enrollment, the threat of additional school closures, and financial collapse.”Plaintiffs have announced they will appeal Murphy’s ruling to Cincinnati’s US 6th Circuit Court of Appeals. There is speculation that the case will eventually go the US Supreme Court. Gary B. v. Snyder, representing seven minor students, their parents and guardians, was filed by the pro bono law firm Public Counsel and a nationwide team of lawyers. In his 40-page ruling against the plaintiffs, Murphy said the ability to read is “of incalculable importance,” essential to the ability to vote, apply for a job and find a place to live. Despite these painfully obvious points, he said they “do not necessarily make access to literacy a fundamental right.” Underscoring this outright contempt for the social rights of children and the population as a whole, Murphy ruled that states are not required to “provide each child with a defined, minimum level of education” or even “literacy.”

    ‘They’ve Been Doing This Massive, Anti-Democratic Model of Education Reform’ --A new report from the RAND Corporation concludes that the multi-million-dollar teacher evaluation project, championed and partially bankrolled by Bill Gates, did not increase teachers’ effectiveness or improve students’ academic performance, including the low-income minority students that were presented as the initiative’s major beneficiaries.The Washington Post’s Valerie Strauss, a generally critical assessor of what’s called “education philanthropy,” covered this new report. But most corporate media appear uninterested in this challenge to a set of ideas about “failing public schools” and how to fix them, that they themselves play a notable role in promoting. Our next guest has critically engaged the Gates Foundation’s educational forays for years now. Wayne Au is professor at the University of Washington/Bothell Campus, and interim dean for diversity and equity on campus. He’s also editor at Rethinking Schools. He joins us now by phone from Seattle. Welcome back to CounterSpin, Wayne Au.

    How a natural gas group pushed for new energy curriculum in Texas - Concerned that environmental groups were winning the hearts and minds of Texas schoolchildren — filling their heads with statements of the ills of fossil fuels — a politically connected Texas natural gas industry advocacy group devised a plan to fight back.The group, the Texas Natural Gas Foundation, whose founding members include academics and politicians with ties to the natural gas industry, collaborated with a state energy office and the University of Texas to develop classroom materials for teachers to present both the pros and cons of traditional and alternative energy sources.Already, at least 20 teachers have been trained in the material and taken it back to their classrooms — including at least one teacher in Austin, one from Round Rock and one from Georgetown — and the Texas Natural Gas Foundation is raising money to promote the material in classrooms across Texas and beyond.People involved in the project, including the curriculum writers and members of the Natural Gas Foundation, say there was no undue influence. Money to get the $165,000 project off the ground came chiefly from a federal grant and no money appears to have been paid by the natural gas industry to the teachers developing the curriculum. An investigation by the American-Statesman, however, shows how industry advocates pushed the development of the curriculum and then worked closely with the curriculum writers, briefing them on energy issues and offering edits to the curriculum material.

    How Data Service Naviance Helps Students of Elite High Schools Get Into Top Colleges -- Educational privilege promotes and perpetuates inequality in the U.S.. One factor in preserving that privilege is superior access by elites to the Ivy League and other highly selective universities. Recently, public attention has turned to the question of how members of the top echelons maintain this superior access to elite universities. It’s no secret that admissions departments often prefer children of alumni, a policy that explicitly transmits privilege across the generations. However, numerous other policies also support elite access to the most selective universities, some of which are well-known, like preference for donor children, others of which are effectively hidden, like the enormous information advantage in college applications conferred to elites by a web application called Naviance. Sold only to schools and purchased largely by private schools, Naviance gives students and their parents a frank, realistic understanding of their true odds of admission at competitive universities, thereby allowing them to focus their application energy on the highest prestige colleges where they also stand a realistic chance of admission. The Naviance app is quite simple. A school subscribes to the Naviance service and, in doing so, commits to turning over to Naviance at the end of each college admission season an anonymized dataset containing key information about each college applicant from the school: where did they apply, where were they accepted, where were they rejected, where were they wait-listed, along with each applicant’s GPA and SAT scores. Naviance uses this information to provide each student from a subscribing high school with a snapshot of the admission success and failure experience of all of her predecessors from the last five years applying from her high school to any particular university. This last point is crucial: For any university a student is contemplating applying to, Naviance allows that student to see how her GPA and SAT credentials measure up against the prior successful applicants from her high school over the past five years. Here’s an example of Naviant output:   To understand the enormous value of the Naviance service, it is important to recognize that most ambitious high school students wildly overestimate their likely chance of admission to an elite university. The reality of this statement is evident in the rejection rates at places like Harvard or Stanford or Amherst College, all of which reject close to 95 percent of applicants, the vast majority of whom presumably thought they had a decent shot of admission.

    University Forced To Remove Blackened American Flag 'Art' - Conservative students on campus expressed disdain on social media over the flag on Tuesday, resulting in community members filing complaints to the university. Kansas Gov. Jeff Colyer alongside Secretary of State Kris Kobach, both Republicans, also called on the university to take down the flag. The University of Kansas is hosting a display on campus featuring an American flag that has been smeared with black paint by an artist as a commentary on “the current political climate.” As Campus Reform's Grace Gottschling reports, the artist is being featured at KU as part of an ongoing project sponsored by Creative Time, a New York based organization focused on three core values:“art matters, artists’ voices are important in shaping society, and public spaces are places for creative and free expression.” The flag, “untitled (flag 2),” was designed by German artist Josephine Meckseper and is being displayed in several locations across the United States, including KU, Cornell University, Texas State University, Rutgers University, and the University of South Florida.  Update: The University of Kansas took down a defaced American flag and placed it in an art museum on Wednesday after receiving backlash from the community.

    'A cesspool of deviancy': New claims of voyeurism test Jordan denials -- New allegations in the Ohio State University sexual abuse scandal are threatening to intensify the political firestorm facing its onetime assistant wrestling coach, powerful GOP Rep. Jim Jordan.A half-dozen ex-wrestlers told POLITICO they were regularly harassed in their training facility by sexually aggressive men who attended the university or worked there. The voyeurs would masturbate while watching the wrestlers shower or sit in the sauna, or engage in sexual acts in the areas where the athletes trained, the former wrestlers said. Larkins Hall, the building that housed athletic teams, became such a well-known target that people who frequented it at the time have reminisced in anonymous postings online how easy it was to ogle naked members of the wrestling team.The situation was so egregious that former wrestling head coach Russ Hellickson would at times have to physically drag the gawkers out of the building, several sources familiar with his actions at the time said. Hellickson also pleaded with the university multiple times to move their athletes to a private facility, the sources said. Jordan served as Hellickson’s No. 2, and the coach has been described as Jordan’s mentor.The accusations could exacerbate Jordan’s troubles. He was the wrestling team’s assistant coach from 1986 to 1994 and has adamantly denied knowledge of any sexual abuse. “I never knew about any type of abuse,” Jordan said in an interview this week. “If I did, I would have done something about it.”

    Capitalism Is Ruining Science -- The university existed before capitalism, and has sometimes resisted obedience to the dictates of the capitalist market, pursuing not profit but truth and knowledge. But capitalism devours what it can, and as it extends its domination, it comes as little surprise that the modern university becomes increasingly subservient to what Ellen Meiksins Wood calls “the dictates of the capitalist market — its imperatives of competition, accumulation, profit-maximization, and increasing labour-productivity.” In academia, that imperative manifests itself in visible ways: publish or perish, funding or famine. Without public investment, universities are compelled to play by private sector rules, i.e., to operate like businesses. Businesses, of course, are all about the bottom line — and the health of the bottom line depends on profit maximization, which in turn depends on careful and constant evaluation of inputs and outputs. The result for academic science, according to researchers Marc A. Edwards and Siddhartha Roy in their paper “Academic Research in the 21st Century: Maintaining Scientific Integrity in a Climate of Perverse Incentives and Hypercompetition,” has been the introduction of a new regime of quantitative performance metrics, which governs almost everything scientific researchers do and has observable impacts on their work practices. These metrics and benchmarks include “publication count, citations, combined citation-publication counts (e.g., h-index), journal impact factors (JIF), total research dollars, and total patents.” Edwards and Roy observe that “these quantitative metrics now dominate decision-making in faculty hiring, promotion and tenure, awards, and funding.” As a result, academic scientists are increasingly driven by a frenzied desire to get their research funded, published and cited. “Scientific output as measured by cited work has doubled every 9 years since about World War II,” note Edwards and Roy. But quantity does not translate to quality. On the contrary, Edwards and Roy track the effect of quantitative performance metrics on the quality of scientific research and find that it has a detrimental effect. As a result of rewards systems incentivizing publication volume, scientific papers have become shorter and less comprehensive, boasting “poor methods and increase in false discovery rates.” In response to the growing emphasis on work citations in professional evaluations, reference lists have become bloated to meet career needs, with an increasing number of peer reviewers requesting that their own work be cited as a condition of publication.

    The Exorbitant Cost Of Getting Ahead In Life - Some 84 percent of Americans claim that a higher education is a very or extremely important factor for getting ahead in life, according to the National Center for public policy and Higher Education.   So, it’s worth the exorbitant cost, but not everyone can pay, and outsized costs in the U.S. are giving much of the rest of the developed world the higher education advantage. According to the U.S. Bureau of Labor Statistics (BLS), people with a Bachelor’s Degree earn around 64 percent more per week than those with a high school diploma, and around 40 percent more than those with an Associate’s Degree. In turn, those with an Associate’s degree earn around 17 percent more than those with a high school diploma. The Federal Reserve Bank of New York says that college graduates overall earn 80 percent more than those without a degree.There’s also job security to consider.Individuals with college degrees have a lower average unemployment rates than those with only high school educations. Among people aged 25 and over, the lowest unemployment rates occur in those with the highest degrees.  From this perspective, it’s no surprise that students are willing to bite the bullet and take on a ton of debt to finance education. About three-fourths of students who attend four-year colleges graduate with loan debt. And this number is up from about half of students three decades ago.The average student loan debt for Class of 2017 graduates was $39,400, up 6 percent from the previous year. Over 44 million Americans now hold over $1.5 trillion in student loan debt, according to Student Loan Hero.According to College Board, the average cost of tuition and fees for the 2017–2018 school year was $34,740 at private colleges, $9,970 for state residents at public colleges, and $25,620 for out-of-state residents attending public universities. The U.S. is one of the most expensive places to go obtain a higher education, but there are pricier venues, too. If you want a free higher education, try Europe—specifically Germany and Sweden. Denmark, too, doles out an allowance of about $900 a month to students to cover their living expenses. For Americans, while student loans may still be a good investment overall, the idea of taking a lifetime to pay off the debt may become increasingly unattractive. And it’s only going to get worse, according to JPMorgan, which predicts that by 2035 the cost of attending a four-year private college will top $487,000.

    Been Down So Long It Looks Like Debt to Me - On Halloween in 2008, about six weeks after Lehman Brothers collapsed, my mother called me from Michigan to tell me that my father had lost his job in the sales department of Visteon, an auto parts supplier for Ford. Two months later, my mother lost her own job working for the city of Troy, a suburb about half an hour from Detroit.   By June, my parents, unable to find any work in the state where they spent their entire lives, moved to New York, where my sister and I were both in school. A month later, the mortgage on my childhood home went into default for lack of payment.   In the summer of 2010, I completed school at New York University, where I received a B.A. and an M.A. in English literature, with more than $100,000 of debt, for which my father was a cosigner. By this time, my father was still unemployed and my mother had been diagnosed with an aggressive form of breast cancer. In January 2011, Chase Bank took full possession of the house in Michigan. Our last ties were severed by an email my father received from the realtor, who had tried and failed to short sell the property, telling him “it’s safe to turn off the utilities.” In May, I got a freelance contract with a newspaper that within a year would hire me full-time—paying me, after taxes, roughly $900 every two weeks. In September 2011, my parents were approved for Chapter 7 Bankruptcy, and in October, due to a paperwork snafu, their car was repossessed in the middle of the night by creditors. Meanwhile, the payments for my debt—which had been borrowed from a variety of federal and private lenders, most prominently Citibank—totaled about $1,100 a month. Now thirty years old, I have been incapacitated by debt for a decade. The delicate balancing act my family and I perform in order to make a payment each month has become the organizing principle of our lives. To this end, I am just one of about forty-four million borrowers in the United States who owe a total of roughly $1.4 trillion in student loan debt. This number is almost incomprehensibly high, and yet it continues to increase with no sign of stopping.

     New game show ‘Paid Off’ offers chance to eliminate student loan debt -- "Wheel of Fortune" contestants have a chance to win lavish vacations. If you score on "The Price is Right," you can go home with a flashy sports car. "Who Wants to Be a Millionaire" occasionally makes good on its promise.But a new game show on TruTV offers contestants an altogether more practical — and perhaps somewhat depressing — prize: the chance to get out from under mountains of crippling student loan debt."Paid Off," a new trivia show that premieres on Tuesday, has a topical premise, to say the least. It debuts as some 45 million Americans find themselves buried under student debt — including roughly 60 percent of college graduates who owe an average of $37,172. Americans collectively owe upward of $1.4 trillion in student loan debt — a staggering sum that helps explain why so many 20- and 30-somethings have struggled to gain a foothold in the middle class, effectively cutting them off from home ownership and other investments.Michael Torpey, a New York-based actor ("Orange is the New Black") who emcees the show, readily acknowledges that a giddy, brightly lit cable TV quiz contest about one of the most burdensome financial issues in America might seem odd, to say the least."We're playing in a weird space of dark comedy," said Torpey, who developed the show and pitched it to the executives at TruTV. "As a comedian, I think a common approach to a serious topic is to try to laugh at it first."The ground rules are  fairly straightforward: Three contestants, all of whom must carry some college debt, go head-to-head on a series of trivia questions, including a few related to education. If they provide the correct answer on enough of the brain-teasers, the show will cover up to 100 percent of their loans.

    Behind Bars, Mentally Ill Inmates Are Often Punished For Their Symptoms - By some accounts, nearly half of America's incarcerated population is mentally ill — and journalist Alisa Roth argues that most aren't getting the treatment they need.Roth has visited jails in New York, Chicago, Los Angeles and Atlanta and a rural women's prison in Oklahoma to assess the condition of mentally ill prisoners. She says correctional officers are on the "front lines" of mental health treatment — despite the fact that they lack clinical training."Most of [the correctional officers] will talk about how this is not what they signed up," Roth says. "Most of them have not had much training in dealing with mental illness — or they've had none at all."Roth witnessed high-risk prisoners in solitary confinement or chained up or wearing restrictive jumpsuits — which tended to exacerbate the prisoners' distress.Therapy, when available, was often conducted under stressful conditions. Roth describes one session in the Los Angeles County jail that took place through the slots of a cell door — forcing the prisoner and therapist to yell to be heard."The entire [jail] tier can hear everything that you're saying," Roth says. "Especially in a place where showing any weakness can be really dangerous ... people are particularly unlikely to disclose anything personal or her that would make them vulnerable." Roth chronicles her findings in the book, Insane: America's Criminal Treatment of Mental Illness.

    Kentucky Governor Retaliates Against Poor After Court Rejects Medicaid Changes -- GOP cruelty is not new, but it seems to be reaching new depths. Case in point: In Kentucky, Gov. Matt Bevin is now using the lives of Medicaid patients like pieces on a chessboard in an act of revenge and political spectacle. Governor Bevin’s administration announced that he would deprive Medicaid patients of dental and vision benefits, effective immediately. This unilateral (and some say illegal) maneuver impacts 460,000 people in Kentucky. This occurred just hours after a federal court stopped his Kentucky Health plan, which would throw people off Medicaid with work requirements, deductibles and other administrative and economic obstacles. The case in question is Stewart v. Azar. Through the Centers for Medicare and Medicaid Services, the Trump administration announced new guidelines in January to remake the program in the GOP’s image. His administration told the states they could implement work requirements and many other “community engagement” policies. These approaches have nothing to do with providing care, and everything to do with gutting the rolls. On June 29, Federal Judge James E. Boasberg of the DC circuit, rejected Trump’s Department of Health and Human Services (HHS) approval of Kentucky’s plan, setting a precedent that puts similar proposals in at least 10 other states in jeopardy. It was also just in the nick of time: A mere 36 hours before Kentucky Health would’ve been in effect. It is an embarrassing defeat for Governor Bevin, who eagerly volunteered Kentucky to be the first state to approve work requirements.  Hours after Judge Boasberg’s opinion was rendered, Governor Bevin had what Topher Spiro called his “Trumpian Tantrum” and made the aforementioned cuts. A federal judge didn’t let him punish poor people, so he did so unilaterally and with seemingly no consideration for the law whatsoever.

    When Health Insurance Prices Rose Last Year, Around a Million Americans Dropped Coverage - Last year, as insurance prices rose by an average of just over 20 percent around the country, people who qualified for Obamacare subsidies hung onto their insurance. But the increases appear to have been too much to bear for many customers who earned too much to qualify for financial help.According to a new government report, about a million people appear to have been priced out of the market for health insurance last year.The report is the first comprehensive look by the Department of Health and Human Services at people who buy their own insurance but don’t qualify for federal subsidies under Obamacare. Individuals who earn more than around $48,000 have to pay full price for their health plans; that group has faced a second round of big premium increases in 2018 and is looking at a third round of them in some parts of the country next year. . For complicated reasons, some people who paid full price in 2016 became eligible for subsidies in 2017, making a simple comparison of before and after numbers a little misleading.The Trump administration also reduced advertising for the insurance signup period and made it harder for people to sign up for insurance later in the year, two factors that could have also depressed insurance enrollment. It’s also possible that some who stopped buying their own insurance did so because they got a new job with health care benefits.But it’s reasonable to think that most of the attrition can be attributed to the spike in prices, as the Trump administration concludes.   The new report provides more official numbers on those who bought insurance themselves. It shows that signups among people who didn’t use a subsidy fell by 1.3 million people between 2016 and 2017, the most recent year with full data. An earlier government estimate suggested that about 300,000 people who didn’t qualify for help paying their premiums in 2016 would qualify in 2017. If that calculation proved true, enrollment among people without subsidies actually fell by around a million people.

    Hidden conflicts? - The panel is one of dozens of advisory committees that vote each year on whether the Food and Drug Administration (FDA) should approve a therapy for the U.S. market. That day, panel members met to review a promising drug designed to prevent heart attacks and strokes by limiting blood clotting.. By day's end, the panel voted seven to one to approve. FDA, as usual, later signed off. The drug, ticagrelor, marketed under the name Brilinta, sold rapidly, emerging as a billion-dollar blockbuster. FDA, headquartered in Silver Spring, Maryland, uses a well-established system to identify possible conflicts of interest before such advisory panels meet. Before the Brilinta vote, the agency mentioned no financial conflicts among the voting panelists, who included four physicians. As Brilinta's sales took off later, however, AstraZeneca and firms selling or developing similar cardiovascular therapies showered the four with money for travel and advice. For example, those companies paid or reimbursed cardiologist Jonathan Halperin of the Icahn School of Medicine at Mount Sinai in New York City more than $200,000 for accommodations, honoraria, and consulting from 2013 to 2016. During that period, Halperin got $7500 from AstraZeneca to study Brilinta, and the company separately declared nearly $2 million in “associated research” payments tied to him. Brilinta fits a pattern of what might be called pay-later conflicts of interest, which have gone largely unnoticed—and entirely unpoliced. In examining compensation records from drug companies to physicians who advised FDA on whether to approve 28 psychopharmacologic, arthritis, and cardiac or renal drugs between 2008 and 2014, Science found widespread after-the-fact payments or research support to panel members. The agency's safeguards against potential conflicts of interest are not designed to prevent such future financial ties.

     Drug Companies Scrap Price Hikes - Blame California, Not Trump -- Two days after President Trump threatened to retaliate against drug companies like Pfizer that authorized another round of price hikes this year, a group of drugmakers have signaled that they will roll back some of the increases, blaming a California drug-pricing transparency law that went into effect earlier this year, according to Bloomberg. The law requires drugmakers to give insurers, consumers and governments to give 60 days advanced notice before planned price increases of 16% or more during a two-year period. The law is intended to help keep prices down by upping the public pressure on pharma companies. And apparently it's working: In the past three weeks, Novartis, Gilead, Roche and Novo Nordisk sent notices to California health insurers announcing that they would rescind or reduce previously announced price hikes on at least 10 drugs. According to Bloomberg, the drugs affected include everything from multibillion-dollar blockbusters like Novartis’s psoriasis drug Cosentyx to niche drugs for pulmonary hypertension and angina. Roche said it would be cancelling a 4% price increase for clot treatment Cathflo Activase.In early July, Novo Nordisk raised the price of its Victoza diabetes injection by 7.9 percent, and its diabetes drugs Levemir and Novolog by 5 percent, according to data compiled by First Databank and Bloomberg Intelligence. The new price is $293.75 for a 10 milliliter vial of Levemir and $289.36 for a 10 milliliter vial of Novolog. Patients can use more than one vial per month.According to the health plan official, Gilead canceled planned price increases for four drugs, none among its biggest blockbusters. The company had given notice in May that it would be increasing prices roughly 7 percent on July 1.One drug company spokesman said Novartis's decision was influenced by "many factors". "Many factors influence our decisions to change product prices for our U.S. portfolio and it is not uncommon for us to adjust plans for price changes," Novartis spokesman Eric Althoff said in an email. Novartis said it notified some health plans of potential price increases but later decided against implementing them.

    What A U.S.-China Trade War Could Mean For The Opioid Epidemic -- The American struggle to curb opioid addiction could become collateral damage in President Donald Trump’s showdown on trade.Trade tensions with allies were heightened by the White House announcement in March of tariffs on steel and aluminum imports. Now, another round specifically targeting China is set to take effect Friday.  And that China focus could interrupt other trade-related issues — specifically, those targeting the flow of dangerous drugs like fentanyl into the United States.  Though Chinese officials deny that most of the fentanyl or other opioid substances originate in their country, they have in the past cooperated with U.S. efforts to control the flow of fentanyl onto American soil.  If the tariffs become permanent, though, “it’s most likely going to have a negative effect on other areas” beyond trade, said Jeffrey Higgins, a former Drug Enforcement Administration supervisory special agent. “China could say ‘We are no longer going to cooperate with the United States on controlling these synthetic opioids,’” he continued.Fentanyl, one of the deadliest synthetic opioids, is up to 50 times more potent than heroin and can be 100 times more potent than morphine. Of the 64,000 drug overdose deaths in 2016, more than 20,000 were related to some form of fentanyl, a Centers for Disease Control and Prevention report shows.

    Novartis joins the Big Pharma exodus out of antibiotics, dumping research, cutting 140 and out-licensing programs - Novartis today says its early-stage research group at NIBR is dropping antibacterial and antiviral research programs based in Emeryville, CA. And they’re doing it at a time that drug-resistant strains of bacteria are spreading around the world — an issue that once commanded considerable attention at Novartis. The reorganization will trigger the layoff of about 140 staffers. Novartis noted:   The groups that are impacted in their entirety are antibacterial and antiviral research. As a result, other groups are also affected including, Pharmacology, Protein Sciences, Project Management and global support functions in Global Discovery Chemistry, NIBR Informatics, Scientific Opertions and Translational Medicine. About 150 employees will remain in the San Francisco Bay Area in support of NITD and our drug discovery efforts. On the chopping block are a group of preclinical programs as well as LYS228, their clinical-stage effort in the field. Most of the affected staffers will have a 60-day period to work out their departure, with severance, while a small group will stay on to handle the shutdown. Novartis added:  While the science for these programs is compelling, we have decided to prioritize our resources in other areas where we believe we are better positioned to develop innovative medicines that will have a positive impact for patients. The need for these types of medicines is clear and to maximize the chances that these programs will one day help patients we are actively engaged in out-licensing discussions with companies focused on developing medicines in these areas.  Novartis itself is known for a restless search for cost cuts wherever it can find them — which triggered their decision to scrap a special gene and cell therapy unit and intergrate the group in the main development organization.

    Emerging sex disease MG 'could become next superbug' - BBC News - A little known sexually transmitted infection could become the next superbug unless people become more vigilant, experts are warning. Mycoplasma genitalium (MG) often has no symptoms but can cause pelvic inflammatory disease, which can leave some women infertile. MG can be missed - and if it is not treated correctly, it can develop resistance to antibiotics. Mycoplasma genitalium is a bacterium that can cause inflammation of the urethra in men, causing discharge from the penis and making it painful to urinate. In women, it can cause inflammation of the reproductive organs (womb and fallopian tubes) too, causing pain and possibly a fever and some bleeding. You can get it by having unprotected sex with someone who has it. Condoms can prevent this spread. It was first identified in the UK in the 1980s and is thought to affect 1-2% of the general population. MG does not always cause symptoms and will not always need treatment, but it can be missed or mistaken for a different sexually transmitted infection, such as Chlamydia. red The BASHH says this is concerning. Tests for MG have recently been developed but are not available in all clinics yet although doctors can send samples to Public Health England's laboratory to get a diagnostic result. It can be treated with antibiotics - but the infection is developing resistance to some of these drugs.

    The Strange And Curious Case of the Deadly Superbug Yeast - A PATHOGEN THAT resists almost all of the drugs developed to treat or kill it is moving rapidly across the world, and public health experts are stymied how to stop it.By now, that’s a familiar scenario, the central narrative in the emergence of antibiotic-resistant bacteria. But this particular pathogen isn’t a bacterium. It’s a yeast, a new variety of an organism so common that it’s used as one of the basic tools of lab science, transformed into an infection so disturbing that one lead researcher called it “more infectious than Ebola” at an international conference last week. The name of the yeast is Candida auris. It’s been on the radar of epidemiologists only since 2009, but it’s grown into a potent microbial threat, found in 27 countries thus far. Science can’t yet say where it came from or how to control its spread, and hospitals are being forced back into old hygiene practices—putting patients into isolation, swabbing rooms with bleach—to try to control it.  The center of the emerging problem is that this yeast isn’t behaving like a yeast. Normally, yeast hangs out in warm, damp spaces in the body, and surges out of that niche only when its local ecosystem veers out of balance. But in that standard scenario, the yeast that has gone rogue only infects the person it was residing in. C. auris breaks that pattern. It has developed the ability to survive on cool external skin and cold inorganic surfaces, which allows it to linger on the hands of healthcare workers and on the doorknobs and counters and computer keys of a hospital room. With that assist, it can travel from its original host to new victims, passing from person to person in outbreaks that last for weeks or months. Yeast is a fungus, but C. auris is behaving like a bacterium — in fact, like a bacterial superbug. It’s a cross-species shift as inexplicable as if a grass-munching cow hopped a fence and began bloodily chomping on the sheep in the pasture next door.

    WHO Carcinogens: Asbestos, Arsenic, Cigarettes, Alcohol,... & Bacon!? - The World Health Organization has now officially declared bacon to be just as dangerous to human health as tobacco cigarette smoking. WHO has made the decision to declare all processed meats “carcinogenic to humans,” and that’s not a good thing. The World Health Organization officially classified processed meats as carcinogenic in October 2015. The decision managed to be made by something called the International Agency of Research into Cancer (IARC), based on a review done on 800 studies globally. They claimed that the report foundsufficient evidence in humans that the consumption of processed meat causes colorectal cancer.” According to the IARC Report:“Meat consists of multiple components, such as haem iron. Meat can also contain chemicals that form during meat processing or cooking.For instance, carcinogenic chemicals that form during meat processing include N-nitroso compounds and polycyclic aromatic hydrocarbons.  Cooking of red meat or processed meat also produces heterocyclic aromatic amines as well as other chemicals including polycyclic aromatic hydrocarbons, which are also found in other foods and in air pollution.Some of these chemicals are known or suspected carcinogens, but despite this knowledge, it is not yet fully understood how cancer risk is increased by red meat or processed meat.” That means it isn’t just bacon, but any processed meat that could be potentially cancer-causing. According to Reporting The Truth, WHO made the decision to put bacon and other processed meats in with the ranks of other notoriously carcinogenic substances such as asbestos, arsenic, cigarettes, and alcohol.

    Lake surfers say polluted waves are making them sick—but they love it too much to stop - A group of dedicated Great Lakes surfers is always chasing the next big wave, even if it means surfing in dangerous water alongside grimy landscapes home to some of the area's largest polluters.  The surfers say some of the best waves in the midwest are near Whiting and Portage in northern Indiana, an area of Lake Michigan they refer to as "Southend." But the surf scene is unlike the coastal ocean paradises where most surfers flock. The local spots are directly next to towering industrial complexes, including those of British Petroleum (BP) and U.S. Steel. The BP facility sits near what used to be a gun club. Surfers call the location "Shooters."  "It feels a bit more like you're part of the background of a Kurt Russell, post-America apocalyptic wasteland," says Patrick Noyes, who last year directed a documentary about the spot, Southend: The Place Where I Go Surfing.  "There is BP, [the] huge aboveground web of pipes . . . next to a huge ArcelorMittal steel manufacturing facility with fire-breathing, smog-belching smokestacks next to a gigantic pile of coal."  Longtime surfer Rex Flodstrom says "the refineries, flame towers, and industry make a unique backdrop for surfing. Sometimes you see irregular clouds of black or orange smoke." Beyond the grit, the location poses a number of hazards to surfers, says Mitch McNeil, chairman of the Surfrider Foundation's Chicago chapter. "When you're surfing down there, you know this is a whole different animal than surfing up farther north," says McNeil, 62, of Oak Park. "Sometimes there'll be a noticeable oily sheen or smell, the color's funky brown [like] chocolate milk. And then there's stuff in the water like trash. So, you know, most people wouldn't go in that water. But for us, the allure of the waves—it's the deal you make."

    Notice of boil-water order came too late, many D.C. residents say - WaPo -- Tens of thousands of people in the nation’s capital were warned against drinking their water Friday, prompting anger and confusion among D.C. residents who said they weren’t notified promptly of a potential contamination of the city’s water supply.D.C. Water continued to advise those in a wide swath of Northwest and Northeast Washington to boil their water until further notice. John Lisle, a spokesman for the agency, said the warning would probably not be lifted until Saturday at the earliest.Lisle said there have been no reports of sickened customers or other evidence that a temporary drop in water pressure in parts of the system had put District residents at risk. But he said the advisory to boil tap water would remain in effect until tests ruled out that bacteria or other contaminants were in the water supply. Despite the absence of immediate danger signs, some D.C. residents and public officials said they were worried about how the utility and District government had handled the notification process — with a drawn-out trickle of warnings, some issued in the middle of the night on Twitter, that did not directly reach some affected people until more than 12 hours after the problem was detected.

    Elon Musk goaded into promising to fix Flint water problems - Elon Musk has been goaded into using his vast amount of wealth to fix Flint's water problems.The SpaceX and Tesla boss has been criticised in recent days for the nature of his attempts to help with the rescue of the Thai boys from a cave, during which he built a submarine that was rejected by the leaders of the rescue operation. Many people that argued that the billionaire could use his huge wealth more effectively, by paying for civil or charitable projects. And one of those people has now successfully called out Mr Musk and made him commit to helping out with problems at home.  Flint's water crisis came to public attention in 2014, when it was reported that the city's piping was leaking dangerous levels of lead into people's water supply. The state's Department of Environmental Quality has said that the water is clean enough to drink – but the problem will not be fixed until the city's pipes are replaced, and residents have been advised to keep using filters or drink bottled water. Since then, many critics of Mr Musk have taken to reminding him of the problem and the possibility he could fix it on Twitter. One of those reminders appears to have finally worked, after a post that goaded Mr Musk into helping.  "Hey Elon Musk I heard a bunch of people saying there's NO WAY you could help get clean water to Flint, Michigan," wrote one Twitter user. "Said you wouldn't be capable idk." Mr Musk almost immediately replied to the taunt."Please consider this a commitment that I will fund fixing the water in any house in Flint that has water contamination above FDA levels," he posted. "No kidding." He then went on to explain in other tweets that he would pay for water filters for all houses that were able to show their water was unclean.

    A Toxic Algal Bloom Is Spreading in Florida's Waterways - In June, sludgy, toxic blue-green algae began to creep across Lake Okeechobee in Florida. The foul bloom has since spread to the St. Lucie River on the east coast and to the Caloosahatchee River near Fort Myers, prompting Governor Rick Scott to declare a state of emergency for seven Florida counties, as Victoria Ballard of the Sun-Sentinel reports. The governor’s office says that the bloom has spread to both of Florida’s coasts because the Army Corps of Engineers has been discharging algae-containing water from Lake Okeechobee to various rivers and estuaries. Heavy rainfalls prompted the Corps to release millions of gallons of water from the lake in order to relieve pressure on an old dam, according to Manuel Bojorquez of CBS News. But Okeechobee is rife with chemicals and nutrients from agricultural and development runoff—and the combination of nutrient-rich waters and warm temperatures create ideal conditions for algal blooms. The emergency order allows the Department of Environmental Protection (DEP) and the South Florida Water Management District to bypass various restrictions and store excess water in additional areas south of the lake. Scott has also ordered the DEP to spend more time on water testing, and to establish a grant program that will help with cleaning up algae-clogged waters. Most blue-green algae blooms are not toxic, according to the Washington State Department of Health. But some blooms, like the ones in Florida, produce toxins that can cause a range of adverse symptoms, from skin irritation, to respiratory issues, to nerve and liver poisoning. Animals that come into contact with algae-filled water can die. Signs have been posted at various Florida waterways, warning people not to swim in or eat fish from the affected bodies of water.

    GMO Labeling: Public Interest Advocacy Group Sues Trump Over Secrecy -- Last week, Center for Food Safety (CFS) sued the Trump Administration for refusing to make public documents surrounding its decision on how to label genetically engineered (GE or GMO) foods. On May 3, 2018, the U.S. Department of Agriculture (USDA) released long-awaited proposed regulations for the first-ever U.S. mandatory disclosure of foods produced using genetic engineering. Earlier this year, CFS sought the public data and documents about the rulemaking under the Freedom of Information Act (FOIA), but the administration failed to make public any information, leading to this CFS lawsuit to force that disclosure.This unfulfilled FOIA request can't help but bring to mind other transparency failings of the administration. From Michael Cohen's hush money payment of $130,000 to Stormy Daniels to Jared Kushner's failure to disclose his 2016 meetings in Russia to Congress, secrecy has defined Trump's time in office. "This administration has reached new lows in trying to keep information from the American public," said George Kimbrell, legal director at Center for Food Safety. "Fortunately the public has a right to these documents, just as they have a right to know what's in their food."Earlier this month, CFS and dozens of consumer, environmental and farming organizations and companies submitted to USDA on the proposed rule. Of particular note is USDA's proposal to allow manufacturers to use QR codes instead of mandatory on-package text or symbol labeling of GE ingredients, which would be discriminatory and unreasonably burdensome to consumers. Last fall, CFS successfully sued USDA to force the public disclosure of a congressionally required study by USDA to analyze whether QR code labeling would work for American consumers. USDA released the study publicly 12 days later, revealing findings that QR code labeling would leave out millions of Americans—especially rural, minority, and elderly populations—and would not adequately convey the information.

    Black farmers were intentionally sold fake seeds in Memphis, lawsuit says - Mid-South farmers filed a lawsuit against a company that they said sold them fake soybean seeds at a convention. A group of African-American farmers from Louisiana and the Mid-South, say that Stine Seed Company purposefully switched seeds in order to sell black farmers a subpar product at the Mid-South Farm & Gin Show in March 2017. Despite above average rainfall, experienced black farmers saw limited soybean yield from the Stine seeds during the 2017 harvest. "Mother nature doesn't discriminate," President of Black Farmers and Agriculturalists Association Thomas Burrell said. "It doesn't rain on white farms but not black farms. Insects don't [only] attack black farmers' land...why is it then that white farmers are buying Stine seed and their yield is 60, 70, 80, and 100 bushels of soybeans and black farmers who are using the exact same equipment with the exact same land, all of a sudden, your seeds are coming up 5, 6, and 7 bushels?" After losing millions of dollars, the farmers took the seeds to experts at Mississippi State University to have them tested. They say the tests show the seeds sold to the black farmers were not certified Stine seeds. The black farmers said the distributor working for Stine Seed Company used labeled certified seed backs--tampering with factory sewn seals, in order to remove the certified seeds. The distributor would then sell the fake certified seeds to black farmers at a high price.As for a motive, Burrell said farming is a very competitive industry and unscrupulous people see black farmers as easy prey. He said by hurting those farmers' bottom line, someone else would be able to swoop in and buy up the land that belongs to black farmers. 

    Low Doses of Pesticides Make It Harder for Bees to Find Flowers - A review of a decade of research of the impact of pesticides on bees found that even low doses commonly used in agriculture hurt the bees' learning and memory, a Royal Holloway, University of London press release reported. The study, published Tuesday in the Journal of Applied Ecology, found the bees' ability to remember floral scents was harmed even by pesticides not covered by Europe's recent ban on neonicotinoids. "Importantly, as the near-total European ban on neonicotinoid insecticides is set to be implemented in December this year, our results showed that non-neonicotinoid insecticides also have a robust significant negative impact on bee learning and memory," study author and Royal Holloway Ph.D. student Harry Siviter said in the press release. This has major implications for those hoping to craft bee-friendly agricultural policy.   Ohio State University entomologist Reed Johnson, who was not involved in the study, told Popular Science that the question for bee advocates is, "Can pesticides ever be used safely around bees?" This study "suggests that the answer is 'no,'" he wrote in an email.

    Agrarian Crisis and Climate Catastrophe: Forged in India, Made in Washington - India is under siege from international capital. It is on course not only to be permanently beholden to US state-corporate interests but is heading towards environmental catastrophe much faster than many may think.According to the World Bank’s lending report, based on data compiled up to 2015, India was easily the largest recipient of its loans in the history of the institution. Unsurprisingly, therefore, the World Bank exerts a certain hold over India. In the 1990s, the IMF and World Bank wanted India to shift hundreds of millions out of agriculture. In return for up to £90 billion in loans, India was directed to dismantle its state-owned seed supply system, reduce subsidies, run down public agriculture institutions and offer incentives for the growing of cash crops to earn foreign exchange.The plan for India involves the mass displacement of people to restructure agriculture for the benefit of powerful corporations. This involves shifting at least 400 million from the countryside into cities. “The emerging mega-cities will rely increasingly on industrial-scale agricultural and supermarket chains, crowding out local food chains.” The drive is to entrench industrial farming, commercialise the countryside and to replace small-scale farming, the backbone of food production in India. It could mean hundreds of millions of former rural dwellers without any work given that India is heading (or has already reached) ‘jobless growth’. Given the trajectory the country seems to be on, it does not take much to imagine a countryside with vast swathes of chemically-drenched monocrop fields containing genetically modified plants or soils rapidly turning into a chemical cocktail of proprietary biocides, dirt and dust.

    Trash piles up in US as China closes door to recycling - For months, a major recycling facility for the greater Baltimore-Washington area has been facing a big problem: it has to pay to get rid of huge amounts of paper and plastic it would normally sell to China. Beijing is no longer buying, claiming the recycled materials are "contaminated." For sure, the 900 tons of trash dumped at all hours of the day and night, five days a week, on the conveyor belts at the plant in Elkridge, Maryland -- an hour's drive from the US capital -- are not clean. Amid the nerve-shattering din and clouds of brown dust, dozens of workers in gloves and masks -- most of them women -- nimbly pluck a diverse array of objects from the piles that could count as "contaminants." That could be anything from clothes to cables to tree branches to the bane of all recyclers: plastic bags, which are not supposed to go in recycling bins because they snarl up the machinery. "We've had to slow our machinery, and hire more people" At the end of the sorting line is the end product -- huge bales of compacted waste containing paper, cardboard or plastics. These have been bought up for decades by businesses, most of them based in China, which clean them up, crush them and transform them into raw materials for industrial plants. But since January, China has closed its borders to most paper and plastic waste in line with a new environmental policy pushed by Beijing, which no longer wants to be the world's trash can, or even its recycle bin. 

    Which Would Be Harder to Ban, Single-Use Plastic or Money-Bought Government? - Gaius Publius - From the Dept. of What We’re Up Against: Texas Supreme Court Rules Cities Cannot Ban Plastic BagsThe 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.”  Twenty Texas state senators and representatives plus the state’s attorney general backed the Laredo Merchants Association in their bid to overturn the ban.  The case was correctly decided, by the way. The problem is a state law that prevents cities from “going rogue” and allows conservative and pro-corporate policies to be enacted at the state level. This means only state legislators have to be bribed — one-stop shopping — while cities are forced by law to follow. In a related piece EcoWatch notes, “More than 8.3 billion metric tonsof new plastics have been generated, distributed and discarded as of 2017. Much of that material ends up in our oceans. Every year humans send an estimated 8 million metric tons of plastic out to sea. If plastic consumption continues at this rate, we are on pace to fill oceans with more plastic than there are fish by 2050.”More plastic than fish in the ocean is a lot of plastic. Most or all of this plastic is single-use. You touch it for five minutes — drink your slurpee, drain your sugery coke, carry your groceries to the kitchen — then throw it away. Five minutes on the finger tips, a thousand years on the hips of an already over-burdened planet. There’s so much plastic in the ocean that mussels are now so riddled with it they should not be eaten: Shellfish are the natural filter systems of our seas, mechanisms of purity. So, to discover in a report released on World Oceans Day that mussels bought from UK supermarkets were infested with microplastic seems like a final irony in the terrible story of the plasticisation of the sea. According to the study by the University of Hull and Brunel University London, 70 particles of microplastic were found in every 100 grams of mussels. We feed plastic to the ocean, and it feeds plastic to us. Our modern life, “consumed with that which it was nourished by,” eaten by what we eat.

    How the EPA and the Pentagon downplayed a growing toxic threat -  The chemicals once seemed near magical, able to repel water, oil and stains. By the 1970s, DuPont and 3M had used them to develop Teflon and Scotchgard, and they slipped into an array of everyday products, from gum wrappers to sofas to frying pans to carpets. Known as perfluoroalkyl substances, or PFAS, they were a boon to the military, too, which used them in foam that snuffed out explosive oil and fuel fires. It’s long been known that, in certain concentrations, the compounds could be dangerous if they got into water or if people breathed dust or ate food that contained them. Tests showed they accumulated in the blood of chemical factory workers and residents living nearby, and studies linked some of the chemicals to cancers and birth defects. Now two new analyses of drinking water data and the science used to analyze it make clear the Environmental Protection Agency and the Department of Defense have downplayed the public threat posed by these chemicals. Far more people have likely been exposed to dangerous levels of them than has previously been reported because contamination from them is more widespread than has ever been officially acknowledged. Moreover, ProPublica has found, the government’s understatement of the threat appears to be no accident.The first analysis, contained in an EPA contractor’s PowerPoint presentation, shows that one chemical — the PFAS most understood to cause harm — is 24 times more prevalent in public drinking water than the EPA has reported. Based on this, the Environmental Working Group, an advocacy organization whose scientists have studied PFAS pollution, has estimated that as many as 110 million Americans are now at risk of being exposed to PFAS chemicals. 

    Air pollution linked to spikes in hospital and GP visits - Air pollution leads to spikes in health problems and drives up hospital admissions and visits to the GP, according to a new study. The report proves an “absolutely clear” link between poor air quality and health problems and researchers said it should serve as a warning to politicians about the serious impacts of toxic air on public health. “The patients we looked at, who all suffer from lung conditions, are to my mind the canary in the coalmine on this issue,” said one of the report’s authors, Prof James Chalmers, from the respiratory research in the school of medicine at Dundee. “They are the first and most seriously affected by air pollution but it can affect us all.” The findings come amid growing concern about the illegal levels of air pollution in the UK and the impact on people’s health - particularly children. Last week a medical expert said the hospital admissions of a girl who died in an asthma attack at the age of nine showed a “striking association” with spikes in illegal levels of air pollution around her home in London.  The family of Ella Kissi-Debrah are now calling for a new inquest into her death following fresh evidence that air pollution was a contributory factor.Today’s report is one of the most comprehensive carried out in the UK and studied nearly 15 years of data for air pollution levels in Dundee, Perth and the surrounding area. Those figures were matched to medical records of 450 patients who suffer from bronchiectasis, a long-term chronic condition similar to COPD which can cause a persistent cough and breathlessness as well as frequent chest infections.Chalmers said the results were stark. “When we looked at these two sets of data side-by-side the links between the periods when air pollution is at its worst and when these patients are having to seek assistance is absolutely clear.

    Greens win court case seeking stronger air pollution rules for brick makers |- A federal appeals court on Friday ruled that parts of the Environmental Protection Agency’s (EPA) latest air pollution rule for brick makers don't go far enough. The Court of Appeals for the District of Columbia Circuit accepted arguments from environmental groups, saying that the EPA acted improperly when it downplayed cancer risks from certain pollutants and set low pollutant thresholds for hydrogen chloride and hydrogen fluoride emissions. The three-judge panel also completely rejected arguments from the brick and tile industries that the 2015 rule was too strong. Although the Obama administration wrote the rule and denied petitions in 2016 to rewrite it, the Trump administration defended it in court and has so far resisted pressure from the brick and tile industries to change it. Central to the judges’ decision is their conclusion that while the EPA’s final rule might have set acceptable standards, the agency did not properly justify them. “The EPA has not provided a sufficient record to determine that there is no cancer risk,” Judge David Sentelle, named to the bench by President Reagan, wrote for the unanimous court.

    Russian Asbestos Company Makes Trump Its Poster Boy- Asbestos killed at least 45,221 Americans between 1999 and 2015, the Center for Disease Control and Prevention found. But President Donald Trump has long expressed his support for the dangerous mineral currently banned by 65 countries."If we didn't remove incredibly powerful fire retardant asbestos & replace it with junk that doesn't work, the World Trade Center would never have burned down," he tweeted in 2012.Now, Uralasbest, a Russian asbestos producer supported by President Vladimir Putin, is thanking Trump for his support.In a June 25 Facebook post reported by The Asbestos Disease Awareness Organization (ADAO) and the Environmental Working Group (EWG) Wednesday, the company displayed an image of its product in plastic wrap stamped with Trump's face.The image was surrounded by a seal reading "APPROVED BY DONALD TRUMP, 45TH PRESIDENT OF THE UNITED STATES," according to a translation by ADAO and EWG.  "Donald is on our side!" the post accompanying the image began.

    Cement producers are developing a plan to reduce CO2 emissions - The World Cement Association recently held its first-ever global climate change forum, where industry leaders and scientists discussed strategies to reduce the industry's carbon footprint. It will help inform the development of a climate action plan, which the WCA intends to release in September, aimed at outlining pathways for low-carbon cement production. Cement is the most widely used man-made material in existence—it forms concrete when mixed with water, and is used in the construction of everything from buildings and bridges to roads and sidewalks and all kinds of other infrastructure. But while cement has largely shaped the modern built environment, it's also a massive source of carbon dioxide to the atmosphere. It single-handedly accounts for about 7 percent of all global carbon emissions, according to estimates from the International Energy Agency. That makes it the second-largest single industrial emitter in the world, second only to the iron and steel industry.  It's a problem that often receives little attention among the public. But concern among scientists is rising. As global population grows, some estimates suggest cement production could increase by as much as 23 percent by 2050. And some experts suggest that unless the industry substantially reduces its emissions, it could put the Paris Agreement's global climate targets in jeopardy. An April report from IEA and the industry-led Cement Sustainability Initiative notes that the industry, in its current form, is inconsistent with trajectories that would allow the world to meet a 2-degree Celsius temperature target. Reaching this goal, the report suggests, "implies significantly greater efforts to reduce emissions from cement makers." The industry's huge carbon footprint partly stems from its high fuel requirements, which are mostly satisfied by fossil fuels. But more than half of its emissions—and perhaps as much as two-thirds, by some estimates—actually come from the chemical production process itself, which releases large amounts of carbon dioxide as a byproduct.

    Cosmic Rays Penetrate Airplanes Over The South Pacific - Last month, flight attendants got some bad news. According to a new study from researchers at Harvard University, the crews of commercial airlines face an elevated risk of cancer compared to members of the general population. A likely reason: cosmic rays. High energy particles from space hitting the top of Earth's atmosphere create a spray of secondary radiation that penetrates the walls of airplanes flying above ~20,000 feet.   On June 19th, and students of Earth to Sky Calculus flew from California to New Zealand to launch a series of space weather balloons--part of our ongoing program to map cosmic rays around the globe. Naturally, we took our radiation sensors onboard the airplane. Here is what we measured:  Within minutes after takeoff from Los Angeles, radiation in the passenger compartment increased 25-fold and remained high until we landed again in Brisbane 13 hours later. Peak dose rates were almost 40 times greater than on the ground below. In total, we absorbed a whole body dose approximately equal to a panoramic dental X-ray. Our sensors measure three types of radiation: neutrons, X-rays and gamma-rays. Using bubble chambers, we found that about 1/3rd of our exposure came from neutrons: The remaining 2/3rd of our exposure came from X-rays and gamma-rays, measured using Geiger tube devices: Adding it all together, we detected about 24.3 uGy of neutrons + X-rays + gamma rays during the Los Angeles to Brisbane leg of our flight.  This is just the tip of the iceberg. Cosmic rays at aviation altitudes are a cocktail of different things: e.g., neutrons, protons, pions, electrons, X-rays, and gamma rays spanning a wide range of energies. Our sensors sample only three ingredients of that cocktail (neutrons, X-rays, gamma-rays) at relatively low energies typical of medical X-rays and airport security devices. This means flight crews and passengers absorb even more radiation than we can detect. It's something to think about the next time you board a plane...

    Trump Pardons Oregon Ranchers Whose Imprisonment Sparked Deadly 41-Day Standoff - President Trump pardoned a father and son from Oregon on Tuesday who were imprisoned after setting fire to federal land during what were intended to be controlled burns. The imprisonment - which followed a multi-decade feud with the federal government, resulted in approximately 100-150 armed militia members taking control of a closed wildlife park headquarters in a 41-day standoff led by three brothers from the Cliven Bundy family. Read more about the case here.76-year-old Dwight Hammond and his son Steven Hammond, 49, were convicted of arson in 2012 for fires burned on federal land in 2001 and 2006 and originally sentenced to three months and one year respectively. In October 2015, however, an appellate judge ruled that the sentences were too short based on federal minimum sentencing laws of five years, and re-sentenced to serve out the longer terms.The resentencing sparked protests led by the cattle ranching Bundy family and others, who took up arms and occupied the Malheur National Wildlife Refuge near the Southeastern Oregon ranch owned by the Hammonds from Jan 2 to Febn 11, 2016. During the standoff, FBI agent W. Joseph Astarita reportedly began firing off shots during the arrest of Robert "LaVoy" Finicum. The agent was later accused of falsely denying he fired the shots at Finicum or his truck, and pleaded not guilty to two counts of obstruction of justice and three counts of making a false statement. Finicum was killed in the incident.

    Wyoming Expands Controversial Wolf Hunting Season - The Wyoming Game and Fish Commission approved an expanded wolf hunting season Wednesday, with a goal of reducing the population to the bare minimum required to keep it off the endangered species list, Defenders of Wildlife reported. The 2018 season expands on 2017's season, which was the first in Wyoming since a 2017 appeals court removed Wyoming wolves from protections under the Endangered Species Act and allowed the state to take control of the population, The Associated Press (AP) reported."The Wyoming Game and Fish Department and Commission continue to focus on reducing the wolf population toward the bare minimum. Wolves are an important component of Wyoming's natural heritage, and should be managed toward achieving healthy and abundant populations across large landscapes so that they may perform their important natural role," Rockies & Plains Director at Defenders of Wildlife Jonathan Proctor said in a statement.The 2018 season will allow hunters to kill a total of 58 wolves, a 14 wolf increase from the 2017 allowance of 44. It will also start one month earlier, in September, and allow individual hunters to kill up to two wolves, AP reported. There are currently around 350 wolves in Wyoming, 210 of which live in areas of the state where hunting is permitted. The remaining wolves live in Yellowstone and Grand Teton national parks, the National Elk Refuge and the Wind River Indian Reservation, where hunting is prohibited.State officials want to reduce the 210 wolves in their jurisdiction down to 160, citing concerns about wolves preying on livestock.

    House Republicans Launch Extinction Bills to Cripple Endangered Species Act - Republicans in the U.S. House of Representatives announced on Thursday a series of bills aimed at profoundly gutting the Endangered Species Act, including provisions making it almost impossible for imperiled species to gain protection and giving states that often oppose endangered species protection veto power over those decisions.In addition, the bills would turn over recovery efforts to states that often lack the funding or regulatory structure to ensure species' survival, let alone recovery."These bills will absolutely push wildlife over the edge and into extinction," said Noah Greenwald, endangered species director at the Center for Biological Diversity. "Republicans are turning their back on the most vulnerable species in the country just to please polluters and other powerful interests. It's disgusting and repugnant."More than 75 legislative attacks have been launched against the Endangered Species Act since Trump took office—and more than 300 since 2011, when Republicans took over the U.S. House of Representatives.Today's attacks are being led by Utah Rep. Rob Bishop, Arkansas Rep. Bruce Westerman, Arizona Rep. Paul Gosar, New Mexico Rep. Steve Pearce and other House Republicans beholden to oil and gas and other extractive industries.Among the bills, Rep. Westerman's "Petition Act" would require the U.S. Fish and Wildlife Service to declare a petition backlog if it is presented with too many species in need of protection and then suspend any deadlines responding to those petitions and prohibit consideration of any subsequently filed."The problem isn't a backlog of petitions, it's a backlog of species that desperately need help and a government that hasn't moved fast enough t  o prevent their extinction," Greenwald said. "If Representative Westerman and his patrons in the oil and gas industry truly wanted to see the backlog addressed and extinction avoided, they would provide the U.S. Fish and Wildlife Service more money to help the many species waiting for protection, species like American wolverines and lesser prairie chickens."

    Wildfires, Record Highs Scorch California - Wildfires continued to burn across California this weekend, abetted by record high temperatures that caused power outages affecting thousands of customers in Los Angeles, CNN reported Sunday. "Friday's record-setting heat led to unprecedented peak electricity demand," the Los Angeles Department of Water and Power said, according to CNN. 34,500 customers lost power, about 2.5 percent of Los Angeles customers. That 2.5 percent was forced to endure the record-breaking heat wave without air conditioning or fans. Downtown Los Angeles hit 108 degrees Fahrenheit Friday, breaking its daytime temperature record of 94 degrees, set in 1992. University of California Los Angeles (UCLA) thermometers also recorded a record-breaking high of 111 degrees, according to CNN. The National Weather Service (NWS) also reported record highs on Friday of 114 at the Hollywood Burbank Airport, 117 at the Van Nuys Airport, 117 in Ramona and 114 in Santa Ana, The New York Times reported. Further south, the San Diego NWS said Friday's temperature of 120 degrees in Chino might be the highest temperature ever recorded temperature by the Automated Surface Observing Systems (ASOS) in the valley or coastal areas of Orange, Riverside, San Bernardino or San Diego counties. The record temperatures were a break from historical patterns that usually see Southern California reach its highest temperatures in September and October, according to The New York Times.

    State of California reeling from record high temperatures, early wildfire season  - An extreme high-pressure region led to record setting high temperatures last weekend across the state of California. The high temperatures led to mass power outages along with a series of devastating wildfires. All-time record temperatures were recorded in the Los Angeles area in particular. Van Nuys regional airport recorded a temperature of 117 degrees Fahrenheit (47.2 degrees Celsius), while the University of California Los Angeles recorded a temperature of 111 degrees Fahrenheit (43.9 degrees Celsius). The record high temperatures led to peak electrical usage as well. According to the Los Angeles Department of Water and Power (DWP), energy demand in Los Angeles reached an all-time July high of 6,256 megawatts on Friday, breaking the previous record set in 2006 of 6,165 megawatts. According to DWP, more than 32,800 households were without power on Friday, while 20,000 of those remained without power into Saturday. Southern California Edison reported that 18,000 of their customers were without power due to the heat wave.  Most significantly, the hot temperatures led to a series of wildfires across the state. In the area of San Bernardino, a two-hour drive east of Los Angeles, the Valley Fire has burned through more than 1,000 acres after it started on Friday afternoon. The fire forced the evacuation of more than 1,000 residents in the small community of Forest Falls and is only about 5 percent contained as of Sunday. The West Fire burning in the Cuyamaca Mountains near San Diego tore through 504 acres and destroyed several homes; 2,400 residents were forced to evacuate the area. The largest of the weekend fires was the Klamathon Fire near the border of Oregon. That fire is now responsible for at least one death, and as of Saturday had burned through 22,000 acres. The fire is now 20 percent contained. The Holiday Fire in the Santa Barbara community of Goleta was nearly impossible for firefighters to contain Friday night, prompting thousands to evacuate. In addition to high temperatures, the high-pressure front brought hot, dry, gale force winds, a regional weather phenomenon known as “sundowner” winds. These winds were so strong that helicopters and planes were unable to fly over and deliver water and fire retardant chemicals to the blazes.

    Record Heat-Wave Sends SoCal Electricity Prices Soaring -- The second day of a dangerous heat wave brought record-high temperatures across Southern California, and sent spot electricity prices soaring to two-year highs. As Bloomberg reports, electricity prices in Southern California averaged $552.19 a megawatt-hour in the hour ended 3 p.m. local time, the highest since August 31, 2016, as people blasted their air conditioners to keep cool.The National Weather Service declared an excessive heat warning for the region, and California’s grid operator asked transmission operators to restrict maintenance in anticipation of high demand. As The LA Times reports, among the places that hit record-high temperatures were Van Nuys Airport (117 degrees), Burbank Airport (114), UCLA (111) and Santa Ana (114). Peak energy demand climbed to 6,256 megawatts Friday, knocking down the previous July record of 6,165 megawatts set in 2006 and making it the fifth-highest peak demand recorded in the city’s history. Consumers were urged to reduce their electricity usage from 2 p.m. to 9 p.m., the hours when high use is typical.The National Weather Service predicted another hot day Sunday, though slightly less oppressive than Saturday, but power outages continue...

    Record heat put thousands of Californians in the dark Friday. Scientists predicted this from climate change. -- Temperatures shot up over 110 degrees in Southern California on Friday, obliterating all kinds of long-standing heat records, and the lights went out for tens of thousands of customers. Californians were powerless, without air conditioning, in the hottest weather many had ever experienced. Climate scientists have known this was coming, and it may only be the beginning.“We studied this a long time ago . . . now our projections are becoming reality,” tweeted Katharine Hayhoe, a climate scientist at Texas Tech University.In 2006, Hayhoe and colleagues published the study “Climate, Extreme Heat, and Electricity Demand in California” in the Journal of Applied Meteorology and Climatology.“Over the twenty-first century, the frequency of extreme-heat events for major cities in heavily air-conditioned California is projected to increase rapidly,” the study said. It warned that as temperatures soared, electricity demand would exceed supply.Friday’s weather and the resulting blackouts illustrated their point.“Skyrocketing electricity demand due to Friday’s triple-digit temperatures triggered power outages around Los Angeles that are still affecting about 34,500 residences and businesses,” the Los Angeles Times reported Saturday afternoon. “Peak energy demand climbed to 6,256 megawatts on Friday, knocking down the previous July record of 6,165 megawatts set in 2006,” which happened to be the same year the Hayhoe study was published.

    Hundreds of customers are still without power as hot and angry Angelenos fume at the DWP  --  LA Times - Before the scorching heat descended on Los Angeles last week, the Department of Water and Power assured residents it had “adequate resources” to meet the electrical demands of their air conditioners and refrigerators as temperatures rose. It did, in fact, have enough power to go around, utility officials said Monday, after tens of thousands of people had suffered outages.  But officials said that in many neighborhoods, its aging infrastructure could not handle the surging demand for electricity as Angelenos ran their air conditioning day and night. Tens of thousands of people lost electricity as Los Angeles baked in sizzling heat this weekend, leaving many residents fuming as they went days without power. Some complained that the utility gave them scant information as they debated whether to bunk with friends or family, board their dogs or spring for a hotel room to avoid the overbearing heat. “It’s not so much that power has been out for 36 hours, which is horrible, it’s the lack of communication,” Miracle Mile resident Evan Wolf said Sunday. More than 80,000 people were affected at some time by the power outages, which had left 46,000 customers without electricity at their worst point, said DWP spokesman Joseph Ramallo. Peak electricity use reached 6,256 megawatts Friday — a record for a July day — and exceeded 5,700 megawatts Saturday, making it the second-highest weekend day in Los Angeles history, according to the utility. 

    Harvard study finds that during heat waves, people can’t think straight - Ever feel during one of these recent sweltering days that it’s just so hot you can’t think straight?Well, maybe you can’t.Harvard researchers say that they studied students in dorms with and without air conditioning and during a heat wave. They found that the students suffering through the heat performed worse on a series of cognitive tests. The researchers from the Harvard T.H. Chan School of Public Health published their results Tuesday in the journal PLOS Medicine. Most research on the health effects of heat has focused on vulnerable groups such as the elderly. That may have created the perception that most people aren’t affected by heat waves, Jose Guillermo Cedeño-Laurent, research fellow at Harvard Chan School and lead author of the study, said in a statement from the university. Researchers studied 44 students in Boston in their late teens and early 20s. Twenty-four lived in air-conditioned buildings. The other 20 lived in buildings that did not have air conditioning.Knowing how the heat affects other groups is critical, he said, “considering that in many cities, such as Boston, the number of heat waves is projected to increase due to climate change.” Extreme heat is the leading cause of death of all meteorological phenomena in the United States, the researchers said. Global temperatures are on the rise. The National Oceanic and Atmospheric Administration says 2017 was the third-warmest year ever recorded globally, while 2016 was the warmest, and 2015 was the second-warmest.

    Phoenix Tries To Reverse Its 'Silent Storm' Of Heat Deaths - There is a moment as heatstroke sets in when the body, no longer able to cool itself, stops sweating. Joey Azuela remembers it well. Azuela collapsed in the parking lot. By the time the ambulance arrived, the asphalt had singed his arms and legs, causing second-degree burns. His mother, Alicia Andazola, arrived at the emergency room to find her son covered in ice. His body temperature was approaching 108 degrees. Doctors removed Azuela's blood with a machine to cool it. "His organs started failing," she says. "We weren't sure for the first couple of days if he was going to make it." More than 155 people died from heat-related causes in the Phoenix area last year, a new record in a place where the number of such deaths has been on the rise. Former Phoenix Mayor Greg Stanton deemed it a public health crisis, and the city has launched an overhaul of how it prepares for and deals with extreme heat. Just as other places prepare for hurricanes, Phoenix aims to create a model program for coping with the temperature spikes and heat waves that scientists say are becoming more common across the country as the climate warms. That effort includes trying to actually lower the temperature of the city.Already, more people die from heat-related causes in the U.S. than from all other extreme weather events. And as with other disasters, the most vulnerable are the elderly, the sick and the poor.   Extreme heat is certainly not new for Phoenix, and many cities are taking steps to cope with higher temperatures. But Phoenix has the distinction of having more than 100 days a year that are above 100 degrees. Headlines of people succumbing to heat — on trails and streets, in cars and homes — are a tragic staple of summer. And the problem is getting worse. Already, the city has six more days above 110 degrees than it did in 1970, although the all-time record of 122 degrees has held since 1990. And, as elsewhere, nights are warming even faster than days. Hartman says nighttime low temperatures in the Phoenix area have gone up an average 9 degrees in recent decades.

    Extreme Heat Wave in Quebec May Have Killed 70 - The death toll in Quebec's heat wave last week may have reached as many as 70, officials said Tuesday, as temperatures exceeded 100 degrees F.Thirty-four of those deaths were in Montreal, where temperatures soared 20 degrees above normal and CBC reports that the morgue became so overcrowded it had to partner with a local funeral home for extra storage. Officials say most of the deaths were women and men over the age of 50 living alone in apartments with no air conditioning, and over 60 percent had an underlying medical condition. The increasing frequency and intensity of heat waves is among the most obvious and well-documented effects of climate change.As reported by Canada's National Observer:Bouts of extreme heat are expected to become more frequent, notes a 2018 report from Canada's federal and provincial auditors general, with their evaluation concluding that governments had under-delivered on commitments to deal with climate change. The report states that "by 2100, the number of days above 30 degrees Celsius in Canadian cities is expected to double and a one-in-20-year hottest day may become a one-in-two-year event."

    An Arctic heatwave pushed temperatures in Siberia anomalously high - Following 2016 and 2017, 2018 is likely going to set another heat record in many parts of the world. Already, the first six months have set high-temperature records for the US, the National Oceanic and Atmospheric Administration (NOAA) reported yesterday (July 9). The extreme weather in the US, however, pales in comparison to the abnormalities along the Arctic coast. Last week, Nick Humphrey, a meteorologist living in Nebraska, wrote on his blog that temperatures rose to 90°F (32°C) in northern Siberia—some 40°F warmer than average for this time of year.Other parts of the extreme north are hot, too—cities in Scotland and Northern Ireland are also hitting records of almost 90°F, the Washington Post reports. In Quebec, Canada, excessive heat reaching similar temperatures killed 70 people last week, and thousands were left without electricity due to overheating power wires.“It is absolutely incredible and really one of the most intense heat events I’ve ever seen for so far north,” Humphrey writes.What’s even more alarming, though, are the long-term effects of these high temperatures in this particular region that eventually extend down into lower latitudes. As temperatures remain above average, Arctic sea ice—already thin from weeks of abnormally high temperatures—melts, Humphrey explains. Instead of the sun shining on light white ice, it reflects down onto dark ocean water, which absorbs some of the heat that the ice would normally reflect. Collectively, this process speeds up the warming of the Arctic, called the Arctic Amplification, and ends up weakening the polar jet stream, which usually protects lower latitudes from the cold temperatures up north. The result? More extreme weather in both directions—which could mean more repeats of the extreme cold North American faced this winter as a result of an “arctic outbreak” of freezing air.

    Africa’s Hottest Reliably Measured Temperature on Record: 124.3°F on Thursday in Algeria -- A historic heat wave in northern Africa on Thursday, July 5, brought Africa its hottest reliably measured temperature on record: 124.3°F (51.3°C), at Ouargla, Algeria. Ouargla (population 190,000) is the capital city of Ouargla Province in the Algerian Sahara Desert, at an elevation of 719 feet (219 meters). The key word here is ‘reliably’. Many hotter temperatures have been reported in Africa during the colonial period—including the official African record of 131°F (55.0°C) at Kebili, Tunisia on July 7, 1931—but all of these hotter temperatures have serious credibility issues, as explained by wunderground weather historian Christopher C. Burt below. According to weather records researcher Maximiliano Herrera, the previous all-time African record for reliably measured maximum temperature was 123.3°F (50.7°C) on July 13, 1961 at Semara, Western Sahara. His research shows that the hottest temperature reliably measured in Kebili, Tunisia was 119.3°F (48.5°C) in July 2005, with the second highest reliably measured temperature coming this Thursday, at 118.8°F (48.2°C)--a far cry from the official record of 131°F (55.0°C)!

    We’ve entered the era of ‘fire tsunamis’ -- On Thursday, one observer described a “tsunami” of flames overnight at the Spring Creek fire near La Veta in the south-central part of the state. And you can’t stop tsunamis.  “It was a perfect firestorm,” Ben Brack, incident commander for the Spring Creek fire, told the Denver Post. “You can imagine standing in front of a tsunami or tornado and trying to stop it from destroying homes. A human response is ineffective.”  Pyrocumulus clouds, a sure indicator of intense heat release from wildfire, were clearly visible from 100 miles away. The fire is just five percent contained and covers more than 100,000 acres — larger than the city limits of Denver — making it the third-largest wildfire in state history.  A 300-foot tower of flames wiped out an entire subdivision, according to the Post. Officials aren’t yet sure how many homes were torched overnight (they’re too busy fighting the fire to count), but the latest available number is in the hundreds. No one has been injured or killed so far. The official term for the hellish meteorological event that hit La Veta is a “firestorm,” a self-propelling explosion of flame generated by strong and gusty winds from a particularly intense fire over extremely dry terrain. When a fire gets hot enough, it can generate its own weather conditions and wind speeds can approach hurricane force, drying out the surrounding land. In just a few hours on Wednesday night, the Spring Creek fire swelled by nearly 20,000 acres, with airborne sparks igniting new fires nearly one mile downwind. Months of unusually dry and warm weather have combined to push Colorado’s fire risk to “historic levels,” leading the state to close millions of acres of public lands. Two-thirds of the state is in drought. It’s part of a pattern of intense fire danger currently plaguing most of the western United States, which is unlikely to fade anytime soon. Over the past two decades, more than 800 million of Colorado’s trees have been consumed by bugs — a phenomenon more common worldwide as warmer temperatures are helping plant-eating pests flourish in previously cool places. To top it off, this past winter was one of the warmest and driest ever recorded, “the stuff of nightmares,” according to local experts. Rivers are running at about half their normal levels, and the summer monsoon rains still haven’t arrived. It’s clear that the state’s steady and transformative slide into a drier future has already begun. This week’s firestorm is terrifying proof.

    Japan floods: At least 60 killed in deluges and landslides - Flooding and landslides have killed at least 60 people and left dozens missing in western areas of Japan. Most of the deaths have occurred in Hiroshima prefecture, which has been hit by torrential rain since Thursday. Hundreds of homes have been damaged. About 1.5 million people have been ordered to leave their homes and three million more advised to do so. Authorities say it could potentially be the worst weather disaster Japan has seen in decades. Prime Minister Shinzo Abe said the authorities were facing a "race against time" to save and evacuate people. Thousands of police, firefighters and soldiers are taking part in search-and-rescue operations. Some of the victims have been buried alive by landslides, Japan's Kyodo news agency reports. In the town of Motoyama, about 600km (370 miles) west of the capital Tokyo, 583mm (23in) of rain fell between Friday morning and Saturday morning, Japan's meteorological agency said. More rain is expected over the next few days. Kyoto, about 300km to the east of Hiroshima, has also been hit by downpours. Local resident Manabu Takeshita told the Japan Times website: "Anybody living near the river has got to be nervous because typhoon season is just really starting."

    Japan floods: At least 100 dead after heavy rain and landslides - The rain may have stopped in Japan, but the country is facing a long recovery process after floods and landslides killed at least 90 people in the southwest. An additional 13 people have since died from cardiac arrests, raising the total death toll to 103, according to Chief Cabinet Secretary Yoshihide Suga. With emergency rain warnings lifted, the country is now turning its focus to search and rescue efforts. Police, fire departments and the military are scouring affected areas for the dozens of people still missing or unaccounted for.While authorities search for the missing, residents begin the cleanup, wading through flooded houses and streets. Thousands of houses have been damaged, and even the ones that stand intact have been impacted. Nearly 17,000 households are still without power, and phone lines are down across multiple prefectures.Further complicating repair efforts is the fact that many railroads and highways are closed, too flooded to operate, placing many affected areas out of reach.Rains began late last week and intensified over the weekend. Rivers overflowed, landslides crushed buildings, and cars were swept away by floodwater. "The record rainfalls in various parts of the country have caused rivers to burst their banks, and triggered large scale floods and landslides in several areas," Cabinet Secretary Suga said Sunday.

    Japan floods: 155 killed after torrential rain and landslides -- At least 155 people have died in floods and landslides triggered by torrential rain in western Japan, says the government. It is the highest death toll caused by rainfall that Japan has seen in more than three decades. Rescuers are now digging through mud and rubble in a race to find survivors, as dozens are still missing. About two million people have been evacuated from the region after rivers burst their banks. Authorities have opened up school halls and gymnasiums to those who have been displaced by the rainfall. There remains a risk of landslides, with rain-sodden hilltops liable to collapse. "I have asked my family to prepare for the worst," 38-year-old Kosuke Kiyohara, who has not heard from his sister and her two sons, told AFP. Prime Minister Shinzo Abe has cancelled an overseas trip to deal with the flood crisis. More than 70,000 rescue workers, including the fire service and the army, are involved in the relief effort. Flood warnings are still in effect for some of the worst hit areas, including the Okayama prefecture in the southern part of Japan. 

    Dozens Still Missing In Japan Floods As Death Toll Reaches 176 - The death toll from record-breaking floods in western Japan has reached at least 176 as rescue workers searched for dozens missing in hardest-hit Hiroshima and Okayama prefectures.Chief Cabinet Secretary Yoshihide Suga announced the death toll Wednesday, The Japan Times reported. As of Tuesday afternoon, more than 50 people were still listed as unaccounted for, the newspaper said.A new evacuation was ordered Tuesday for the town of Fuchu, after the Enoki River overflowed the previous day, the newspaper said. According to the Times, "About 1,000 rescuers continued to search in flooded areas of the city of Kurashiki, Okayama Prefecture, for people trapped in their homes. More than 20 people died in the city after river dikes collapsed, inundating around 4,600 homes."Tens of thousands of rescue and recovery workers were digging through the debris as the search entered its fifth day, The Associated Press reports. Prime Minister Shinzo Abe visited the flood-ravaged region, promising that his government would do whatever it could to bring a return to normalcy.  "We're still cleaning up. But I'd guess that in order to recover, it's going to take at least a year, and cost hundreds of millions of yen or more,"  Kyodo reports:"Although the government has yet to fully establish the extent of the damage, some 347 homes were totally or partially destroyed and 9,868 homes were flooded as of Tuesday morning, according to the Fire and Disaster Management Agency. "The figures are expected to rise substantially, since municipal authorities have yet to finish their own damage assessments."

    Deadly Heat Wave Threatens Japan in Aftermath of Torrential Rains - Severe heat poses another health risk for survivors still trapped inside their homes after deadly torrential rains flooded parts of Japan this week. After one of the worst natural disasters in the nation’s recent history, rescue workers on Friday are still trying to locate missing people in parts of western Japan as temperatures soar. At least nine people have already been reported dead during a heat wave with temperatures as high as 106 degrees Fahrenheit, which hit just as authorities began to assess the damage from flooding that poured muddy water into the streets and spurred dangerous mudslides throughout the western part of the country. As of Friday, there are still 7,000 people living in shelters, and 250,000 others who are at home without running water, The Guardian reported. Sanitation is increasingly becoming a concern for those residents who are without running water, unable to wash their hands or flush their toilets. Garbage has piled up in the streets, and the Environment Ministry announced that it has started dispatching trucks to collect the some of the wreckage, Japan News reported.  The financial toll of the disaster is still uncertain, but the agriculture ministry said Friday it anticipates the damages will amount to at least $207 million. As the cleanup progresses, the total cost will likely increase.

    Climate change is real --  For those skeptical of climate change, we offer last year and this year as evidence that there is something strange going on. Sheets of rain followed by deep spates of heat and drought are the characteristics going back actually far more than two years — in fact, at least to the early 1980s. We are having 100-year floods in Des Moines every five years, and 500-year floods every decade. The century references become almost meaningless.Flooding swept away the voice of the Drake Bulldogs, Larry Cotlar, as he stepped out of his van last weekend. This after rains of one to two inches in the northern reaches of the Des Moines Lobe, but rains that just keep on coming and are whisked through evermore efficient drainage systems that dump into the Raccoon and the Des Moines and turn them turbulent.Where an inch of rain fell on Buena Vista County, about two-tenths of a ton of soil per acre was washed into the Raccoon. That from just one rain. Near Denison the loss from a two-inch rain was 6.5 tons per acre, flowing to the Missouri on its way to St. Louis and ultimately the Gulf of Mexico. To every soil particle phosphorous attaches that overloads the reservoirs and allows toxic algae to bloom. Consider the cumulative effects from that one-inch rain recurring through the season: two-tenths of a ton lost at a time. Just three such rains can displace more soil than can be regenerated in a year. Ten one-inch rains mean we have lost two tons of soil per year, when the soil can only regenerate at half a ton a year. Our wealth and our children’s wealth is eroding with that soil loss. It is affecting crop quality already, and will cause yields to decline over time even with great advances in crop science. That, in turn, will affect livestock production and the cost of food. Climate change in Iowa is destroying property, polluting our water and even causing loss of life. This is the reality of climate change in Iowa. It is in the here and now. The longer we ignore it, the more dearly we pay.

      When the ground opened: horizontal landslides empty Kenyan villages (Reuters) - The heavy rain that pounded Kenya earlier this year brought more than just flooding to the village of Gitugu: it has torn apart the very ground beneath people’s homes and fields, making the village unliveable. Mary Muthoni, who was forced to abandon her home, said she had seen nothing like it in her 65 years. “You wake up in the morning only to find that part of your land has literally moved to a neighbor’s homestead,” she said. “Before you know it, a crack starts developing right in the middle of the house, and in two days the house breaks into two parts, and suddenly some of the cracks turn into water springs.” When the Thomson Reuters Foundation visited Gitugu in June, some of the cracks inside homes were 15 centimeters (6 inches) wide. In the fields, particularly those on a slight incline, slippages of several meters were visible. As a result, the children have been taken to neighboring villages, and many residents have abandoned their homes and land, taking their livestock with them. In a matter of months, Gitugu, a tea-growing village about 75 kilometers (47 miles) north of the capital Nairobi, has become a ghost town. The same has happened in other villages in the area. After viewing images of the phenomenon in Murang’a county, Daniel Olago, a geology professor at the University of Nairobi, said it was likely a “translational slide” - a type of landslide in which the land mass moves along a near-flat surface. Heavy rain that saturates the soil - an increasing worry as climate change brings more extreme rainfall - is often to blame, he said, and in this case looks to be the likely cause. Earthquakes and volcanoes can also trigger such events. And although deluges have in the past caused landslides on steep slopes in the area, he said, translational slides here are unusual.

    Great Barrier Reef may be dying: Scientists send urgent warning -Scientists are sending up flares, once again, to warn the world that the Great Barrier Reef could face a tragic end sooner rather than later. Indeed, a new report published by the Climate Council adds to the mounting research suggesting that the world’s largest reef system — one that is even visible from outer space — is likely to reach an irreparable state in the next few decades if greenhouse gas pollution levels are not curbed.The biggest concern, according to the report, is the pace at which the reef’s coral is bleaching. Coral bleaching is what happens when water temperatures rise, or coral is exposed to runoff and pollution. When this happens, coral proceeds to eject algae which causes the coral to turn white — hence the name “bleaching.”  According to the National Ocean Service, bleaching does not always lead to the death of coral. It can recover, but only if it is no longer exposed to the stressful state that caused it to bleach in the first place. When bleached, the coral is vulnerable, and can eventually die if it stays in such a stressful environment.Experts predict bleaching could occur every two years if greenhouse gas pollution rates remain the same as today.“By 2034, the extreme ocean temperatures that led to the 2016 and 2017 bleaching events may occur every two years under current greenhouse gas pollution rates, effectively destroying the Great Barrier Reef,” the report explains. To put the alarming rate into perspective, in the late 20th century — according to the report — large-scale bleaching occurred on average every 27 years. Today, the average rate is around once every six years. An increase to every two years could be catastrophic.

    Orcas of the Pacific Northwest Are Starving and Disappearing - NYT — For the last three years, not one calf has been born to the dwindling pods of black-and-white killer whales spouting geysers of mist off the coast in the Pacific Northwest.Normally four or five calves would be born each year among this fairly unique urban population of whales — pods named J, K and L. But most recently, the number of orcas here has dwindled to just 75, a 30-year-low in what seems to be an inexorable, perplexing decline.Listed as endangered since 2005, the orcas are essentially starving, as their primary prey, the Chinook, or king salmon, are dying off. Just last month, another one of the Southern Resident killer whales — one nicknamed “Crewser” that hadn’t been seen since last November — was presumed dead by the Center for Whale Research. In March, Gov. Jay Inslee issued an executive order directing state agencies to do more to protect the whales, and in May he convened the Southern Resident Orca Task Force, a group of state, tribal, provincial and federal officials, to devise ways to stem the loss of the beloved regional creature. “I believe we have orcas in our soul in this state,” he said. At another point, he wrote of the whales and Chinook salmon that “the impacts of letting these two species disappear would be felt for generations.” The orcas are also facing a new threat. The recent agreement between the Canadian government and Kinder Morgan to expand the Trans Mountain Pipeline would multiply oil tanker traffic through the orcas’ habitat by seven times, according to some estimates, and expose them to excessive noise and potential spills. Construction is set to begin in August, despite opposition from Governor Inslee and many environmentalists. Following the salmon, they migrate in the Salish Sea to the northern coast of British Columbia and often surface in the south at Puget Sound within sight of downtown Seattle, especially during the spring and summer months. The males, which can weigh up to 22,000 pounds, typically live about 30 years, and females, up to 16,000 pounds, survive longer — up to 50 or 60 years, although one J-pod member, Granny, lived to be 105 years old.

    Some Experts Say Icelandic Whaling Company Killed an Endangered Blue Whale - Anti-whaling group Hard to Port posted photos on their Facebook page Tuesday that activist group Sea Shepherd claims show an endangered blue whale recently killed by an Icelandic whaling company, theAustralian ABC News reported Thursday.Kristjan Loftsson, the CEO of the Hvalur hf whaling company that killed the whale, told ABC News Friday that it was in fact a hybrid of a blue and fin whale, which is not protected by the International Whaling Commission.If the whale is a blue whale, it would be the first of its kind intentionally killed since 1978, according to BBC News."I know a blue whale when I see one and this whale slaughtered by Kristjan Loftsson is a blue whale," Sea Shepherd Founder Paul Watson said in a statement reported by ABC News.Some scientists agreed with Watson's assessment."From the photos, it has all the characteristics of a blue whale," U.S. National Oceanic and Atmospheric Administration (NOAA) Alaska Fisheries Science Center scientist Dr. Phillip Clapham said in a statement reported by BBC News. "Given that, notably the coloration pattern, there is almost no possibility that an experienced observer would have misidentified it as anything else at sea," Clapham said."If this is a blue whale, it would be illegal and a breach and there could be fines and perhaps the company might lose their licence to hunt whales," Feuerhahn told BBC News.But while a hybrid catch would be better news for the whalers, it isn't much better for hybrid whales, which Astrid Fuchs from the charity Whale and Dolphin Conservation told BBC News are also extremely rare.  "Since 1983, they've only recorded five of them," Fuchs said. Blue whales were decimated by 90 percent during the 20th century, according to ABC News. Iceland and Norway are the only two countries who persist in open, commercial whaling, though Japan also slaughters whales for what it claims are scientific reasons, according to the International Fund for Animal Welfare.

    UN Reports One-Third of Fish Caught Wasted -- Jerri-lynn Scofield - The United Nations Food and Agriculture Organization (FAO) Monday released its biannual report, The State of the World’s Fisheries, this week, reporting that more than one-third of fish caught ever gets eaten and is instead either tossed overboard or rots before it can reach a dinner plate: Despite the technical advances and innovations, many countries, especially less developed economies, still lack adequate infrastructure and services for ensuring fish quality, such as hygienic landing centres, electric power supply, potable water, roads, ice, ice plants, cold rooms, refrigerated transport and appropriate processing and storage facilities. This shortcoming, especially when associated with tropical temperatures, can result in high post-harvest losses, as fish can spoil in the boat, at landing, during storage or processing, on the way to market and while awaiting sale….Throughout the world, post-harvest fish losses are a major concern and occur in most fish distribution chains; an estimated 27 percent of landed fish is lost or wasted between landing and consumption….[W]hen discards prior to landing are included, 35 percent of global catches are lost or wasted and therefore not utilized (FAO report, p. 50, citations omitted.)  According to the GuardianLasse Gustavsson, executive director of Oceana in Europe, said huge improvements were needed across the fishing industry. “Food waste on a hungry planet is outrageous,” he said. “The fact that one-third of all fish caught goes to waste is a huge cause for concern for global food security.”

    An iceberg the size of lower Manhattan just broke off Greenland --  Iceberg calving events are among the more epic spectacles on the planet. But rarely have humans been lucky enough to see them happen in real time, much less capture one on camera.A team of New York University (NYU) researchers has now done just that, capturing video footage of a four-mile long iceberg snapping off east Greenland’s Helheim Glacier. The footage is a stark illustration of one of the most important processes reshaping Earth’s coastlines today and in the future. Greenland’s outlet glaciers are like frozen rivers, flowing to sea from the island’s interior. As ice enters the ocean, it raises sea levels, a process that is expected to quicken as Greenland warms. In recent decades, the ice island’s “big three” outlet glaciers—Helheim, Jakobshavn, and Kangerdlussuaq—have sped up substantially, a phenomenon scientists believe is linked to climate change.The new iceberg broke off Helheim over the course of 90 minutes near midnight on June 22. The research team was lucky to bear witness to it while they were out in the field doing routine equipment maintenance. Denise Holland the logistics coordinator for NYU’s Environmental Fluid Dynamics Laboratory, told Earther the scientists were just getting ready to go to sleep when the glacier started making a loud, sustained rumbling noise. She immediately got up and set up her video camera.  “It just happened right in front of our eyes,” Holland told Earther. “The amount of ice was astonishing, the noise was astonishing. Nobody was speaking because we were all too hypnotized by this event unfolding.” An animation created for Earther by Delft University of Technology’s Stef Lhermitte (who called the new NYU video “very spectacular”) uses Sentinel-1 satellite data to offer a different perspective. The breakup of Helheim glacier’s front along an existing weakness in late June is visible about halfway up the image:

    Watch 10 billion tons of ice fall into the ocean - An enormous, four-mile-long iceberg break, or “calving” event, swept across Greenland’s massive Helheim Glacier last month, a new video has revealed.The event, in which roughly half-mile-high columns of ice break free and tip onto their backs — and later collide downstream and shatter further — was filmed by Denise Holland, the field and logistics manager for New York University’s Environmental Fluid Dynamics Laboratory and NYU Abu Dhabi’s Center for Global Sea Level Change. The event took about 30 minutes. The video above has been sped up to capture the entire event in under two minutes.During the summer in Greenland, breaks from glaciers are common but rarely so large. According to NYU, the area of floating ice created here “would stretch from Lower Manhattan up to Midtown in New York City.”The total amount of ice that fell into the ocean was about 10 billion tons, as the break rippled across the entirety of the glacier’s ice face in half-mile-deep water, said David Holland, a glaciologist at NYU’s Courant Institute of Mathematics and NYU Abu Dhabi, and head of the research team.“It’s a complete scene of chaos from berg formation,” David Holland said. “Everything possible to happen happened.”The video captures two types of iceberg creation. First, already-floating parts of the glacier detach and drift away. Next, thicker sections of the glacier that are resting on the seafloor detach, lift up and tip backward as they float to the surface. Helheim Glacier, one of the largest ice streams flowing from the Greenland ice sheet into the ocean, extends almost 100 yards above sea level at its front. But that’s just a tiny fraction of the glacier’s full vertical extent. The large majority of the glacier front is submerged.  The fjord in which the glacier rests is about 2,000 to 3,000 feet deep, and the deeper water is warmer than the water at the surface. This undermines the glacier at its lowest point, driving fast retreat.  The current break, at about 10 billion tons, represents just over 3 percent of Greenland’s annual ice loss of 286 billion tons, the cumulative result of many losses like this one across many glaciers (as well as large volumes of meltwater spilling directly into the ocean). Each break of 1 billion tons or more is such a massive event that it can create “icequakes” that can be detected far away, as the tipping ice crashes back against the still-attached parts of the glacier.

    PIOMAS July 2018 - Arctic Sea Ice by Neven - (map, graphics) What a coincidence. Just like last month, I will have to precede the PIOMAS update with a short news flash that a very strong cyclone is barreling through the Arctic. But this time too, the cyclone will be short-lived, and so it's not entirely clear whether, on the whole, it will be damaging or beneficial. It has gone further into the Arctic this time.Either way, the cyclone' has bottomed out at 968 hPa according to Environment Canada, which is just 2 millibar more than last month's cyclone: With their sub-970 hPa pressures these cyclones come close to the Great Arctic Cyclone of 2012 (963 hPa), but I think they lack in other parameters such as longevity to really deserve the GAC epithet. Nevertheless, to see two of these monsters in June and July in what hasn't otherwise been a very noteworthy melting season so far, is quite noteworthy.  Let's look at the updated PIOMAS volume numbers.  Another month has passed and so here is the updated Arctic sea ice volume graph as calculated by the Pan-Arctic Ice Ocean Modeling and Assimilation System (PIOMAS) at the Polar Science Center. After a slightly below average June volume decrease (6199 km3 vs 6217 km3 for the 2007-2017 period), 2018 has dropped to 6th place. The difference with 2017 - lowest on record as of June 30th - has been reduced from 1916 to 1659 km3, but the gap with record-breaker 2012 has grown by a whopping 1097 km3. That's how much of a difference June can make, which shows how crucial this month is for the melting season. Here's how the differences with previous years have evolved from last month: Wipneus' version of the PIOMAS graph shows the 2018 trend line right in the middle of the post-2010 pack, already hinting at which trajectory it may take until September: Even though 2018 isn't among the very lowest years, the trend line has shot down below the linear trend on the PIOMAS volume anomaly graph:

    The Sinister Underbelly of Climate Change Denial  -- All of the recent weather patterns we’ve been experiencing—locally, as well as globally—are precisely what climate scientists have predicted will accompany climate warming. Extremes will amplify, especially of heat, storms, seasonal precipitation, and drought. But these extremes will be—and have been—piggy-backed on a steady increase in average annual and seasonal temperatures going back to the 1980s, with increases greatest for minimum daily temperatures [3]. Contrary to the claims of conservative demagogues, there is near unanimity about the reality of human-driven climate warming among scientists who have studied climate and climate change. In fact, more than 95% of such scientists agree on this fact [4]. And to claim that such consensus is the result of a conspiracy requires either mind-boggling ignorance about the nature of scientific inquiry or highly disturbing and deeply sinister motives. Yet roughly 30% of Americans don’t believe that climate warming is happening and/or that recent warming is largely caused by human activities [5].People who are more scientifically literate tend to be more trusting of science, put more credence in a scientific consensus, and, as a result, believe that human-driven climate warming is happening [e.g., 6]. So we humans are not completely irrational or craven.But then things get interesting—even disquieting. Even when considering all sorts of psychological and social factors, it turns out that political ideology and affiliation is, at least proximally, a dominant determinant of belief in anthropogenic climate warming [7]. Not religiosity nor as much other worldviews, attitudes, and orientations. In other words, everything else aside, self-identified political conservatives cum Republicans are the most committed disbelievers and, among those, the best educated (paradoxically) the most strident of all [8].

    Global warming may be twice what climate models predict -  Future global warming may eventually be twice as warm as projected by climate models and sea levels may rise six metres or more even if the world meets the 2°C target, according to an international team of researchers from 17 countries.The findings published last week in Nature Geoscience are based on observational evidence from three warm periods over the past 3.5 million years when the world was 0.5°C-2°C warmer than the pre-industrial temperatures of the 19th Century.The research also revealed how large areas of the polar ice caps could collapse and significant changes to ecosystems could see the Sahara Desert become green and the edges of tropical forests turn into fire dominated savanna.“Observations of past warming periods suggest that a number of amplifying mechanisms, which are poorly represented in climate models, increase long-term warming beyond climate model projections,” said lead author, Prof Hubertus Fischer of the University of Bern. “This suggests the carbon budget to avoid 2°C of global warming may be far smaller than estimated, leaving very little margin for error to meet the Paris targets.”

    Climate change will get a whole lot worse before it gets better, according to game theory - It’s going to get a lot worse before it gets any better. According to new research published in Nature, humanity will witness marked sea level rises and frequent killer heatwaves before governments take decisive action against climate change. And to predict the future, mathematicians have turned to game theory. The paper, published by a team of mathematicians, uses game theory to explain why it is so hard to protect the environment, updating it so they could model the effects of climate change, overuse of precious resources and pollution of pristine environments.  The bad news is that the model suggests that, when it comes to climate change, things might have to get demonstrably worse before they can get better. The good news, on the other hand, is that game theory could help policymakers to craft new and better incentives to help nations cooperate in international agreements. The researchers used one of the best known social dilemmas in game theory — called the tragedy of the commons — to reach their predictions. The tragedy of the commons was first described in the 19th century by William Forster Lloyd, who analysed the overuse of common land (also known as a "common") by people who had rights to use it — to graze their sheep, for example — to air the idea that resources that do not clearly belong to an individual or a group are likely to be overexploited, since conserving them isn’t in the interest of the individual.   The tragedy of the commons has become one of the most used metaphors among experts to illustrate our chronic inability to sustain a resource that everybody is free to use and, alas, just as free to abuse.

    Trump’s cuts in climate-change research spark a global scramble for funds    --During Barack Obama’s final year in office, his Administration launched an ambitious, twenty-five-million-dollar partnership with a little-known research organization in Belize called the Caribbean Community Climate Change Centre. The goal of the program was to study climate change in the Caribbean and develop strategies to minimize its impact. Scientists consider the region one of the most vulnerable to the effects of climate change; rising sea levels, coral-reef bleaching, and drought threaten the infrastructure and economic health of the Caribbean’s forty-four million people, many of whom depend on tourism and agriculture for their well-being. .After the 2016 Presidential election, the Trump Administration and the Republican-controlled Congress reduced U.S. support for climate-change-related research, causing the Centre’s program and similar initiatives around the world to scramble for funding. A U.S.A.I.D. official told me that American funding for the Centre’s project will end in 2019, instead of in 2020, because of a change in “the Administration’s foreign-policy and national-security priorities.” Under Obama, the United States was the world’s largest donor to the Green Climate Fund—a global reserve fund created to, among other things, help developing countries invest in renewable and low-emission technologies. Obama pledged three billion dollars, a third of which was contributed before he left office. Trump, who has dismissed climate change as a hoax spread by China, has pledged no money to the fund. Earlier this week, the fund’s directorresigned, and some began to question its viability after no new projects were approved at its most recent board meeting.

    Trump replacement for Obama climate plan moves forward (AP) — The Trump administration is advancing a proposal that would replace President Barack Obama's principal attempt to cut U.S. greenhouse gas emissions with a new rule expected to go easier on the ailing coal industry. The Environmental Protection Agency disclosed Tuesday that it sent the new rule to the White House for review. The document itself was not released, but President Donald Trump has been outspoken in his desire to prop up coal by rolling back what he considers burdensome regulations. Burning coal to generate electricity is one of the primary sources of greenhouse gases blamed for climate change.The submission of the rule to the White House coincided with former coal industry lobbyist Andrew Wheeler taking the helm of the EPA, following last week's resignation of Administrator Scott Pruitt amid multiple ethics scandals. The new rule is expected to shift the focus on reducing climate emissions, dropping the industrywide mandates of the Obama era and instead encouraging improvements in efficiency at individual power plants, said Jeff Holmstead, former EPA assistant administrator and now an attorney for the energy industry.Holmstead acknowledged such an approach would result in fewer emission reductions and said the benefits to the struggling coal industry would be limited."At the margin it may be helpful, but I don't think this was intended to be, nor will it be, a big shot in the arm for coal," he said. EPA spokeswoman Molly Block said in a statement that the agency intends to move expeditiously on the replacement rule. She did not provide a timeline.

     CO2 Emissions Hit 67-Year Low In Trump's America, As Rest-Of-World Rises - We suspect you won't hear too much about this from the liberal mainstream media, or the environmental movement, or even Al Gore - but, according to the  latest energy report from The Energy Information Administration (EIA), under President Trump, per-capita carbon dioxide emissions are now the lowest they’ve been in nearly seven decades. Even more interesting is the fact that US carbon emissions dropped while emissions from energy consumption for the rest of the world increased by 1.6%, after little or no growth for the three years from 2014 to 2016. The U.S. emitted 15.6 metric tons of CO2 per person in 1950. After rising for decades, it’s declined in recent years to 15.8 metric tons per person in 2017, the lowest measured levels in 67 years. And as The Daily Caller reports, in the last year, U.S. emissions fell more than 0.5% while European emissions rose 2.5% (and Chinese emissions rose 1.6% along with Hong Kong's 7.0% surge), according to BP world energy data - an ironic turn of events given Europe’s shaming of Trump for leaving the Paris climate accord.

    Chart of the day: In 2017, US had largest decline in CO2 emissions in the world for 9th time this century - Publications – AEI -- From the June 2018 BP Statistical Review of Global Energy (67th edition) here are some details on C02 emissions in 2017:

    • 1. Global CO2 emissions from energy in 2017 grew by 1.6% (and 426.4 million tons, see data here), rebounding from the stagnant volumes during 2014-2016, and faster than the 10-year average of 1.3%.
    • 2. Declines in CO2 emissions in 2017 were led by the US (-0.5% and 42 million tons, see chart above). This is the ninth time in this century that the US has had the largest decline in emissions in the world. This also was the third consecutive year that emissions in the US declined, though the fall was the smallest over the last three years.
    • 3. Carbon emissions from energy use from the US are the lowest since 1992, the year that the United Nations Framework Convention on Climate Change (UNFCCC) came into existence. The next largest decline was in Ukraine (-10.1% and 28.1 tons).
    • 4. The largest increase in carbon emissions in 2017 came from China (1.6% and 119 tons), a reversal from the past three years when the largest increases in emissions came from India. China’s emissions in 2017 were 0.3% higher than the previous peak in 2014. China has had the world’s largest increments in carbon emission every year this century except in four years – 2000 and between 2014-16. The next highest increment came from India where emissions rose by 4.4% (93.2 million tons, see chart), though lower than its 10-year average (6% p.a.).
    • 5. Together, China and India accounted for nearly half (212.2 million tons) of the increase in global carbon emissions (426.4 million tons). EU emissions were also up (1.5% and 42.4 million tons, see chart) with just Spain accounting for 44% of the increase in EU emissions. Among other EU members, UK and Denmark reported the lowest carbon emissions in their history.

    Natural gas production releases more methane than estimated: Why that matters - Natural gas is displacing coal, which could help fight climate change because burning it produces fewer carbon emissions. But producing and transporting natural gas releases methane, a greenhouse gas that also contributes to climate change. How big is the methane problem? For the past five years, our research teams at Colorado State University have made thousands of methane emissions measurements at more than 700 facilities in the production, gathering, processing, transmission and storage segments of the natural gas supply chain. Our work, along with numerous other research projects, was recently folded into a new study published in the journal Science. This comprehensive snapshot suggests that methane emissions from oil and gas operations are much higher than current EPA estimates. One way to quantify the magnitude of the methane leakage is to divide the amount of methane emitted each year by the total amount of methane pumped out of the ground each year from natural gas and oil wells. The EPA currently estimates this methane leak rate to be 1.4 percent. That is, for every cubic foot of natural gas drawn from underground reservoirs, 1.4 percent of it is lost into the atmosphere. This study synthesized the results from a five-year series of 16 studies coordinated by environmental advocacy group Environmental Defense Fund (EDF), which involved more than 140 researchers from over 40 institutions and 50 natural gas companies. The effort brought together scholars based at universities, think tanks and the industry itself to make the most accurate estimate possible of the total amount of methane emitted from all U.S. oil and gas operations. It integrated data from a multitude of recent studies with measurements made on the ground and from the air. All told, based on the results of the new study, the U.S. oil and gas industry is leaking 13 million metric tons of methane each year, which means the methane leak rate is 2.3 percent. This 60 percent difference between our new estimate and the EPA’s current one can have profound climate consequences. Methane is a highly potent greenhouse gas, with more than 80 times the climate warming impact of carbon dioxide over the first 20 years after it is released.

    Sources of banned CFCs found through their advertising - A couple months ago, an atmospheric study revealed that someone had started producing an ozone-depleting pollutant that had been banned under an international agreement to protect the ozone layer. The new source was preventing the chemical from dissipating on schedule. Although the researchers were careful about what they could conclude from regional measurements, they found that eastern Asia was likely the source. Now, a UK-based NGO called the Environmental Investigation Agency (EIA) says that it has uncovered a number of Chinese companies that are responsible. If you’re expecting an elaborate infiltration and undercover sting... adjust your expectations. The investigation seems to have been shockingly easy, with the culprits’ representatives strangely amenable to detailing their illegal operations. The EIA started with a simple Internet search, which turned up a few companies that were apparently advertising sales of the banned chemical, known as CFC-11. Like other CFCs, 11 can be used as a refrigerant or a propellant in aerosol spray cans. But it was also widely use to “inflate” foam insulation, and that seems to be the market where at least some of its illicit use has continued. The EIA team contacted 25 companies that manufacture foam insulation or the chemical mixtures used in the process. Of those, 21 responded, and 18 said they use CFC-11. (It’s not clear how the EIA team represented its inquiries.) In fact, the companies indicated that they thought just about everyone in their industry was using it except for the largest and most accountable companies that might handle about 10 percent of total production. Some companies were unwilling to name their suppliers—though they said the suppliers moved frequently to avoid scrutiny. But eight sellers or producers of CFC-11 are identified in the EIA report. These companies, too, seemed almost eager to spill the beans and explain that they made very little of the legal alternative to CFC-11. One company described its habit of shutting down production whenever government inspectors came around thanks to a heads-up.

    Pruitt’s Parting Attack on America's Air Could Cost 1,600 Lives -- In his last day at the U.S. Environmental Protection Agency (EPA) Friday, ousted Administrator Scott Pruitt left a parting gift for polluters, and took a parting shot at America's lungs. Pruitt acted to remove a cap on the number of glider trucks—new truck bodies built without engines or transmission that produce 55 times the air pollution of trucks with new engines using up-to-date pollution controls—through December 2019, the New York Times reported.The Obama administration had worked to limit the number of gliders produced each year to 300, Vox reported. Glider trucks were introduced as a way to recycle older truck parts like engines from trucks damaged in accidents, but, as pollution controls on newer engines improved, some truck buyers saw them as a way to save on more expensive pollution controls that can reduce fuel economy.Glider production had increased from 1,000 in 2010 to 10,000 in 2015, and Obama's EPA estimated that if those trends continued, the trucks would account for half of all truck-caused nitrogen oxide pollution by 2030. It further found that forcing gliders to use up-to-date engines could save 350 to 1,600 lives over the life of the vehicles, according to Vox.Pruitt's move reverses the 300 truck cap imposed in January of this year, the New York Times reported.The move was roundly opposed by environmental and conventional trucking groups, including the American Lung Association, the Environmental Defense Fund (EDF), United Parcel Service and the Volvo Group. EDF general counsel Vickie Patton blamed both Pruitt and his second-in-command Andrew Wheeler, who will take over as acting administrator, for the decision."Pruitt and Wheeler are creating a loophole for super polluting freight trucks that will fill our children's lungs with toxic diesel pollution, ignoring public comments from moms and leading businesses across the country," she told The New York Times.

    Incoming EPA administrator promises ‘overall agenda’ at the agency won’t change much | TheHill - Acting Environmental Protection Agency (EPA) chief Andrew Wheeler says that his takeover as head of the agency will not see the EPA shift from its core mission under President Trump.  In an interview with The Washington Post, Wheeler said that his first communication to agency staff upon taking over was meant to reassure officials that business will continue as normal.  "I sent out an all-hands statement to all the employees yesterday evening. One, thanking the administrator for his service, and then telling everybody that it’s work as usual — we’re all working together — and that I share the core mission of the agency, which is to protect public health and the environment," Wheeler told the Post. Wheeler went on to stress that the EPA under his tenure would act only under the terms of its congressional directive, and would not seek to expand its boundaries as he says the agency did under the Obama administration.  "I know that there’s a number of senators that would like us to go much further, but of course environmental organizations would love us to go much further," he said. "But you’re not going to see the EPA, at least under my direction, make up a lot as we go along. We’re going to follow the law that Congress has given us."One of his main goals, Wheeler told The Wall Street Journal, is to "depoliticize" the conversation around many environmental topics.“You might see a shift in terms of how I talk about some things,” Wheeler told the Journal. “I have thought for years environmental issues need to be depoliticized. In 1991 when I came to town they were not as politicized as they are today. And I would love to return to that.”

    Coal baron Robert Murray speaks out on leadership change at U.S. EPA - Cleveland Plain-Dealer - Coal company head Robert Murray was among the loudest foes of Obama-era environmental regulations and among the loudest backers of Republican presidential candidates - including Donald Trump - who vowed to overturn them. With Trump in the White House and embattled Scott Pruitt gone from his job as Environmental Protection Agency Administrator, a lobbyist that Ohio-based Murray Energy paid millions of dollars to fight those regulations - Andrew Wheeler - is now the agency's acting director.  Wheeler formerly worked for Ohio GOP Sen. George Voinovich and Oklahoma GOP Sen. James Inhofe, as well as at the EPA's Office of Pollution Prevention and Toxics. He is expected to take the same deregulatory tack as Pruitt.  Lobbying records show Murray paid Wheeler's lobbying firm more than $2.5 million between 2009 and 2017. Wheeler lobbied on energy and environmental issues for the firm, including climate change policies and on the American Clean Energy and Security Act of 2009.  The last Murray Energy lobbying report that showed payments to Wheeler was filed August 11, 2017. Trump nominated Wheeler for EPA's number two job on October 5, 2017.  On Friday, Murray Energy CEO Robert Murray released the following statement about Wheeler's elevation. He said he hadn't had any contact with Wheeler since he took the EPA job, and called Pruitt's departure "unfortunate for America."  "It is very unfortunate for America to lose Mr. Scott Pruitt as Administrator of the United States Environmental Protection Agency ("U.S. EPA"). Mr. Pruitt was very qualified and worked diligently to protect our environment, while concomitantly providing regulatory certainty for our Nation's economy. He also recognized the need for reliable, low cost electricity in our Country, overturning many illegal actions by the Obama Administration. As for Mr. Andrew Wheeler, I have not had any contact with Mr. Wheeler since he became Deputy Administrator of the U.S. EPA and, as such, we are unable to provide any further comment."  About. Damn. Time.

    Days after Scott Pruitt resigned, several top aides are also calling it quits at EPA - WaPo -- Several top aides to former Environmental Protection Agency administrator Scott Pruitt are leaving the agency, less than a week after Pruitt resigned his post amid a slew of inquiries into his spending and management practices.   The departures include Jahan Wilcox, who as Pruitt’s combative spokesman fiercely defended the embattled Cabinet member and found himself facing criticism for his sometimes antagonistic approach to reporters covering the EPA; Lincoln Ferguson, a longtime aide and confidant who worked for Pruitt in Oklahoma and was nearly always by his side during his travels; Hayley Ford, deputy White House liaison, and Kelsi Daniell, an EPA spokeswoman.  With the exception of Daniell, who had served notice before Pruitt resigned on Thursday, all of the appointees were close allies of the former administrator. Several of the aides had been seeking other work, according to several current EPA officials who spoke on the condition of anonymity to discuss personnel matters, given the upheaval the agency had been undergoing during Pruitt’s tenure. Daniell is joining the staff of Sen. Joni Ernst (R-Iowa). One of Pruitt’s top spokeswomen, Liz Bowman, joined Ernst’s office a few months ago. Most of Pruitt’s top confidants had stepped down earlier this year. Among them were the EPA’s director of scheduling and advance, Millan Hupp; the associate administrator for the Office of Policy, Samantha Dravis; Pruitt’s senior adviser, Sarah Greenwalt, and the head of his Superfund task force, Albert ‘Kell’ Kelly. According to three administration officials, all of whom spoke on the condition of anonymity because of the sensitive nature of the matter, White House and EPA staffers have engaged in discussions this week about what staffing changes might be appropriate after Pruitt’s resignation. But one official emphasized the White House had not specifically asked anyone to step down.

    Shaken, Not Stirred: FERC's Political Laundry Aired in Staff Interview on Breitbart News -- In a break with precedent, FERC Chief of Staff Anthony Pugliese took to the airwaves July 8 to talk politics and promote the Trump administration's positions on controversial energy policies. Appearing on Breitbart News Sunday, Pugliese defended Energy Secretary Rick Perry's notice of proposed rulemaking (NOPR), which appeared to support mainly the coal and nuclear industries and was presented to FERC last September, as a necessary bulwark to maintaining grid resiliency and U.S. national security. In January the Federal Energy Regulatory Commission unanimously rejected the NOPR. But "it couldn't be farther from the truth" that Perry is seeking to subsidize coal and nuclear, according to Pugliese, formerly a senior White House advisor at the Department of Transportation. "Those two resources...have a lot of resilience attributes that, from a national security perspective, are hard to deny. I think that as we talk about cybersecurity, or electromagnetic pulse, or geomagnetical disturbances, all of these sorts of things that we as the federal government need to take into account, there are certain attributes that these two generation sorts or types have that others do not. And I think having more tools in the tool belt is better than having less.” Perry recently said the Trump administration does not yet have an estimate of how much a controversial proposal to extend a lifeline to struggling coal and nuclear power producers would ultimately cost. A portion of the 20-minute interview with Breitbart was devoted to criticizing Democrats for what Pugliese and the show's host characterized as anti-energy politics.

    Ontario cuts 758 renewable energy projects - The Ontario government has ordered the winding down of 758 renewable energy contracts. The new Energy minister Greg Rickford made the announcement in a media release Friday afternoon. Rickford claimed in the release that the move would save Ontario $790 million. “We clearly promised we would cancel these unnecessary and wasteful energy projects as part of our plan to cut hydro rates by 12 per cent for families, farmers and small businesses,” Rickford is quoted as saying. Rickford also said that the PC government would introduce a legislative amendment to protect hydro consumers from any costs incurred by the cancellations. “For 15 years, Ontario families and businesses have been forced to pay inflated hydro prices, so the government could spend on unnecessary and expensive energy schemes,” said Rickford. “Those days are over.” Earlier this week, the Tory government said it would introduce legislation next week to cancel a wind project in eastern Ontario that is just weeks away from completion.

    Australia’s biggest storage reservoir falls to its lowest in eight years - Australia's biggest hydro-electric power dam is now less than a quarter full after a major drought. Levels at Lake Eucumbene near Canberra have plummeted to their lowest in eight years after operators decided to generate more electricity following the closure of Victoria’s Hazlewood power station. The lake drying up is worrying locals who fear there will soon be no water left – but bosses insist 1.1million customers’ power supply won’t be cut off. 'We haven't had any rain for a long time but it's going down like mad because they are generating electricity - they are generating all the time and using water like it is going out of style.'  Lake Eucumbene is one of 16 dams in the federal government’s Snowy Hydro project, which turns water from the Snowy River and some of its tributaries into electricity. Project bosses insist they have still generated electricity when the lake is only 10 per cent full – but the dwindling levels have raised questions about the reliability of hydroelectric power.

    Quadrupling of cooling appliances could see staggering increase in world’s energy consumption - Soaring global need for cooling by 2050 could see world energy consumption for cooling increase five times as the number of cooling appliances quadruples to 14 billion – according to a new report by the University of Birmingham, UK. This new report sets out to provide, for the first time, an indication of the scale of the energy implications of ‘Cooling for All’. There are currently 3.6 billion cooling appliances around the world today and the University of Birmingham report authors forecast that the 14 billion devices needed by 2050 will consume five times the amount of energy currently predicted for cooling usage. The report states that, by 2050, if we are to meet our Paris Climate targets to hold temperature increases to 2’C, total energy consumption for cooling must be limited to 6,300 TWh. Without action beyond current technology capabilities and efficiency gains, cooling could account for 19,600 TWh of energy consumption per year, against a current annual usage of 3,600 TWh. Even with new technologies coming on board, the annual energy requirement will be 15,500 TWh.

    Munich Re sticks with coal underwriting despite investor pressure (Reuters) - Munich Re, the world’s biggest reinsurer, said it would keep underwriting coal-related businesses, defying investors keen for it to follow a partial ban by its rival Swiss Re. It, however, said it looked at the issue “repeatedly”. Policymakers are pushing companies to do more to help meet a target, agreed in Paris in 2015, to limit global warming to below 2 degrees Celsius. Investors are increasingly using their financial muscle to reward those at the forefront of that transition. Swiss Re, world number two by share value, said this week it would not reinsure any company for which thermal coal represents more than 30 percent of its business. It follows French peer Scor, which last year said it would stop underwriting new thermal coal mines. While not enough for some campaigners, the moves are seen forcing smaller insurers to reconsider underwriting companies involved in coal production. Reinsurers help insurers share the burden of large risks in return for part of the premium. Despite being a vocal supporter of the Paris deal, Munich Re said it did not plan to copy Swiss Re in limiting its underwriting of coal companies. “Munich Re will continue to insure all types of companies, taking into account an assessment of all risk aspects – including environmental, social and governance (ESG) criteria,” a spokesman told Reuters. 

    Coal Execs Indicted for Lying on Safety Tests - Eight former coal company officials were indicted in a Kentucky court Wednesday on charges that they lied to federal regulators about the levels of breathable dust in their mines, increasing their miners' risk of exposure to the conditions that can cause black lung disease. The indictment includes charges that the former supervisors and safety officials of Armstrong Coal moved dust monitors to cleaner areas of their mines to obtain more desirable readings and forced workers without monitors to mine in dirtier areas where monitors were required. The problems at Armstrong's mines were first revealed in a 2014 Huffington Post exposé. The indictment comes as the nation's miners face a resurgence in black lung disease: a study published in February showed that cases of black lung in communities in Appalachia have spiked to some of the highest levels ever reported. As reported by InsideClimateNews: The indictments, announced by U.S. Attorney Russell Coleman at an Owensboro museum that tells the long history of coal mining in this part of the country, charge that the mine personnel sought to deceive regulators with the Federal Mine Safety and Health Administration (MSHA) about the daily levels of breathable dust at two mines owned by the Armstrong Coal. The company, which was based in Madisonville, Kentucky, has since gone bankrupt but was named as an unindicted co-conspirator."The health of our miners matters to Western Kentucky communities and those sworn to protect them," Coleman said. "When companies and their senior officials are prepared to disregard the law and put miners at risk, they should also be prepared to face federal prosecutors." He said the indicted officials cheated and lied while avoiding the costs of ventilation and production controls, putting the company's bottom line above the health and safety of hundreds of mine workers.

    North Carolina consumers could see $5B coal-ash cleanup bill - (AP) — A string of decisions by North Carolina regulators means electricity consumers could be seeing a multibillion-dollar bill to clean up mountains of waste Duke Energy created by spending decades burning coal to produce power. State utilities regulators late last month decided that both North Carolina divisions of the country's No. 2 power company could charge ratepayers the first $778 million chunk of a cleanup projected to cost about $5 billion. Cleanup became a priority after a major leak from a Duke Energy site in 2014 left coal ash coating 70 miles (110 kilometers) of the Dan River on the North Carolina-Virginia border. The waste byproduct contains toxic metals like lead, mercury and arsenic. The company pleaded guilty to federal environmental crimes in 2015 for its coal ash handling, and thus admitted "pervasive, system-wide shortcomings," the North Carolina Utilities Commission said in its ruling last month. North Carolina Attorney General Josh Stein said he's going to court to try stopping Duke Energy from passing along its costs to excavate some ash pits and cover others. Corporate mismanagement increased costs that shareholders should also be forced to bear, he said in an interview. Duke Energy said that it followed industry practices and applicable regulations. "This case will ultimately be decided by the North Carolina Supreme Court," Stein said. A decision by the state's highest court isn't likely before next year, when 3.4 million North Carolina power customers finally learn if they're on the hook for a bill that's been accumulating for decades.

    Duke Energy Betting on Pig Power - One of the largest utility companies in the United States is turning to pig power.Duke Energy Corp. started generating power in March for its North Carolina customers using “renewable” natural gas created by capturing methane from the waste produced by 62,000 hogs. National Grid Plc, meanwhile, is set to open a plant that will process gas from wastewater to serve New York customers. Overall in 2018, 26 renewable natural gas plants will open in the U.S., bringing the total to 92.Though RNG now represents just a tiny portion of U.S. gas output, it’s gaining traction given the easy availability of its source material and its promise to cut how much methane -- a greenhouse gas more potent than carbon dioxide -- slips into the air from pigs, cows and chickens, labeled the “big three” of manure production by the environmental nonprofit Energy Vision.An added benefit: Farmers could get new revenue, according to Patrick Serfass, executive director of the American Biogas Council. “Every day a dairy cow creates 150 pounds of manure,” Serfass said in a telephone interview. Methane goes into the air from a variety of sources -- burping cows, for instance, landfills and even fermentation in rice fields. It’s been identified by the United Nations as a major contributor to climate change. The oil and gas industry, also a major emitter of the greenhouse gas, has come under fire from investors and environmentalists who are pushing drillers including Exxon Mobil Corp. to address leaks from production sites, processing plants and pipelines.The gas industry has long been “operating as a traditional commodity business and didn’t really have to respond to anyone,” said Matthew Tomich, president of Energy Vision in New York. “That has certainly changed in the last 18 to 24 months. Without renewable gas, it’s hard to justify it as a low-carbon option.’”

     Fearing climate change, experts in San Diego warn U.S. nuclear industry faces collapse -   The United States is on the verge of losing more than half of its low-carbon energy as the fight against climate change reaches a critical point — a reality the country hasn’t fully grappled with.That’s according to findings recently published by researchers at UC San Diego, Harvard University and Carnegie Mellon University in the journal Proceedings of the National Academy of Sciences.The paper — “U.S. nuclear power: The vanishing low-carbon wedge” — paints a picture of an industry on the verge of collapse. Facing economic competition from cheap natural gas, the country’s aging fleet of nuclear power plants, the authors warn, could see a significant number of retirements in coming years.  “We’re asleep at the wheel on a very dangerous highway,” said Ahmed Abdulla, co-author and fellow at the UC San Diego School of Global Policy and Strategy. “We really need to open our eyes and study the situation.”The country now has a choice to abandon nuclear power altogether or embrace the next generation of smaller, more cost-effective reactors, according to the report. However, the researchers argue, the second option is very unlikely as it would require accelerating the regulatory review process and a sizable infusion of public cash. “It’s really surprising that one of our best weapons in our fight against climate change is at risk of utter collapse because of the economic and political challenges and not the technical ones,” Abdulla said.

    US "Asleep At The Wheel" – As Nuclear Industry Faces Collapse - A new, shocking report by researchers at Carnegie Mellon University’s Department of Engineering and Public Policy (EPP), Harvard University, and the University of California San Diego School of Global Policy and Strategy discovered that the US nuclear power industry could be on the verge of a collapse — a reality that many have yet to realize.Published in Proceedings of the National Academy of Science (PNAS), “US nuclear power: The vanishing low-carbon wedge” examined 99 nuclear power reactors in 30 states, operated by 30 different power companies. As of 2017, there are two new reactors under construction, but 34 reactors have been permanently shut down as many plants reach the end of their lifespan. “We’re asleep at the wheel on a very dangerous highway,” said Ahmed Abdulla, co-author and fellow at the School of Global Policy and Strategy at UC San Diego. “We really need to open our eyes and study the situation.” For more than three decades, approximately 20 percent of U.S. power generation has come from light water nuclear reactors (LWRs). These plants are now aging, and the cost to service or upgrade them along with fierce competition from Trump’s economic order to prop up failing coal and heavily indebted shale oil/gas companies make nuclear power less competitive in today’s power markets.In return, the American shale boom could trigger a significant number of US nuclear power plant closures in the years ahead, the researchers warned. The country is now at a critical crossroad that it must abandon nuclear power altogether or embrace the next generation of miniature, more cost-effective reactors. Given the impending collapse of the nuclear industry, the researchers questioned whether renewable energy would be enough to offset losses from retiring nuclear power plants.Given the impending collapse of the nuclear industry, the researchers questioned whether renewable energy would be enough to offset losses from retiring nuclear power plants.

    Operation Teapot, Sunbeam, & Dominic - US Declassifies 100s Of Nuclear Test Videos To YouTube - In a (now) rare moment of transparency - or perhaps in an odd way, a show of bravado to the rest of the world - more than 250 videos of previously classified US nuclear bomb tests have been uploaded to YouTube this week, providing a fascinating but terrifying glimpse into the United States’ nuclear program. Digitized and uploaded by the Lawrence Livermore National Laboratory in California, RT reports that the videos document secret atomic bomb tests between 1945 and 1962. The organization says that it hopes that the videos will help dissuade humanity from further use of nuclear weapons in the future.“I think that if we capture the history of this and show what the force of these weapons are and how much devastation they can wreak, then maybe people will be reluctant to use them,” a physicist working for the lab said after a similar batch of videos was released last year. The videos feature dozens of tests from once-classified chapters in US nuclear history, including Operation Dominic, which consisted of 31 nuclear tests in 1962... (4 embedded videos)

    Five Well Permits Issued in Ohio's Utica — Five new permits for horizontal wells were issued in the Utica shale region of eastern Ohio last week, according to the Ohio Department of Natural Resources. All five permits were secured by Oklahoma City-based Ascent Resources Utica LLC, which recently announced a deal to acquire assets and properties of Hess Corp., CNX Resources, Utica Minerals Development, and another unnamed party, totaling $1.5 billion.Ascent secured three permits to drill wells in Belmont County and two in Harrison County, according to ODNR.The number of rigs operating in the Utica shale for the week ended July 7 stood at 18, one less than the previous week.As of July 7, ODNR has issued 2,843 horizontal well permits in the Utica. Of that number, 2,371 are drilled and 1,913 are in production.There were no permits issued for northern tier of the Utica in Ohio, which encompasses Mahoning, Trumbull and Columbiana counties.However, Houston-based Hilcorp Energy Co. was awarded permits to drill four vertical wells in nearby Lawrence County and two vertical wells in Mercer County in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection. Hilcorp received permits to drill two conventional wells in Mahoning Township and two others in Pulaski Township in Lawrence County, while it received two permits to drill conventional wells in Jefferson and Shenango townships in Mercer County.

    Utica Shale well activity as of July 7 -

    • DRILLED: 295 (300 as of June 23)
    • DRILLING: 163 (162)
    • PERMITTED: 472 (472)
    • PRODUCING: 1,913 (1,905)
    • TOTAL: 2,843 (2,839)

    Five horizontal permits were issued during the week that ended July 7, and 18 rigs were operating in the Utica Shale.

    Utica Shale Natural Gas Production Hit New Record in First Quarter - Ohio’s unconventional natural gas production continued its upward climb in the first quarter, jumping more than 40% year/year (y/y) and setting a new state record at 531.3 Bcf.That’s up from 371.9 Bcf in 1Q2017 and an increase from the previous record of 503 Bcf in 4Q2017, according to data released Wednesday by the Ohio Department of Natural Resources (ODNR).  Oil production meanwhile continued to seesaw. It declined by about 4% y/y, dropping to 3.9 million bbl in the first quarter. Oil production has fluctuated over the last several quarters, reflecting a broad shift to dry gas production that occured about two years ago across much of the Appalachian Basin when oil prices remained low. While oil volumes slowly crept back up from lows for sequential increases last year, for example, they fell from roughly 18 million bbl in 2016 to 16.4 million bbl in 2017. First quarter oil production was also down slightly from 4Q2017, when unconventional producers reported 4.2 million bbl.  Ohio law does not require separate reporting of natural gas liquids (NGL) or condensate. Those totals are included in natural gas volumes. Some Appalachian operators in the region have, however, reported more NGL development since late last year as prices have improved. ODNR’s first quarter report listed 1,949 horizontal shale wells, 1,909 of which reported oil and gas production during the period. The data consists almost entirely of Utica Shale production. The average amount of oil produced by each well was 2,066 barrels, while the average amount of natural gas produced was 278.5 MMcf over 86 average days in production. To date, the state has issued 2,843 horizontal Utica permits and 2,371 of those have been drilled. That’s up compared to the 2,518 permits issued at roughly the same time last year and the 2,014 that were drilled at that time.

    Ohio shale production spikes, and what that means for the state -  Output spiked at Ohio shale wells in the first three months of the year, state data shows.The Ohio Department of Natural Resources indicates that 1,949 shale wells produced 531.3 billion cubic feet of natural gas in the first quarter, a 43 percent uptick from the 371.9 billion cubic feet they produced in the first quarter of 2017. Oil dropped just a bit in that time, with shale wells in the state producing 3.94 million barrels, down almost 4 percent from 4.09 million barrels a year ago. Each well produced an average of 2,066 barrels of oil and 278.4 million cubic feet of natural gas.The wells producing the most gas were in Monroe, Belmont and Jefferson counties, while the top wells for oil were in Guernsey and Harrison counties. Eclipse Resources and Ascent Resources Utica Holdings LLC held most of the top wells in both categories. "Well, the trend is our friend, and the Utica continues to impress as natural gas play," Dan Alfaro, Energy in Depth spokesman, told me. "Production levels are continuing to increase as market value does, and the necessary infrastructure continues to be built out. ... There is a lot of promise for future investments from other energy-intensive industries like steel, and the petrochemical industry."  This comes at a time when energy advocates promote the Appalachian energy industry in Pennsylvania, Ohio and West Virginia in a bid to elevate it to a global energy hub. "Any significant recession in the country has always been preceded by a huge spike in gas prices," Karen Alderman Harbert, CEO of the U.S. Chamber of Commerce's Global Energy Institute, told me. But in the Buckeye State, years of investments in Utica shale assets since gas prices spiked a decade ago are making energy costs cheaper and more stable for both consumers and businesses, she said.

    Natural Gas Pipeline Designed to Meet Ohio Demand Gets Favorable EA from FERC - FERC has issued a favorable environmental assessment (EA) for RH energytrans LLC’s Risberg Line Project, which would move 55,000 Dth/d of natural gas from northwest Pennsylvania to northeast Ohio to meet increasing demand.Federal Energy Regulatory Commission staff concluded “that approval of the proposed project, with appropriate mitigating measures, would not constitute a major federal action significantly affecting the quality of the natural and human environment.” The U.S. Army Corps of Engineers and the Pennsylvania Fish and Boat Commission were the cooperating agencies in preparing the EA. Now that it’s completed, FERC’s environmental review schedule puts the project on track for a federal authorization deadline of Sept. 27. The Commission is accepting public comment on the EA until July 30 [CP18-6-000].The project would take gas from an interconnect with Tennessee Gas Pipeline in Crawford County, PA, to help meet peak day supply deficits and new industrial demand in Ashtabula County, OH. Utility Dominion Energy Ohio entered into a binding precedent agreement as the foundation shipper for 40,000 Dth/d.  At the time RH energytrans filed for a certificate of public convenience and necessity late last year to construct the 60-mile pipeline, North Atlantic Iron Corp. expressed interest in contracting for 15,000 Dth/d of firm transportation. The company plans to build a pig iron plant in Ashtabula on Lake Erie. 

    DOE focuses on Appalachia in its updated 2018 NGL primer - The U.S. Department of Energy (DOE) has published the 2018 Natural Gas Liquids (NGL) primer, highlighting the resource’s potential and focusing on the Appalachian region.  The publication is an update of the 2017 version, reporting larger than previously estimated projections for ethane production from the Marcellus and Utica shale plays. According to the updated information, the Appalachian region has experienced near-exponential growth in natural gas production which is expected to increase for decades. EIA projects that natural gas production in the East region—where the Appalachian Basin is the principal contributor—will quadruple from 2013 to 2050. "Industry has made significant investments in natural gas and NGL infrastructure to support the boom in production in Appalachia this decade," the primer says. "New investments to take advantage of the NGL resources in the region have been identified by industry, and forecasts for production over the decades to come highlight the opportunity for additional investments across the NGL supply chain."  The 2018 primer includes new data from the U.S. Energy Information Administration’s (EIA) 2018 Annual Energy Outlook, as well as forecasts from a recent EIA Short-term Energy Outlook. This includes updated information on infrastructure developments in the Appalachian region and a new section identifying research and development opportunities related to natural gas and NGL production, conversion and storage. Natural gas produced in Appalachia not only contains NGL, but also ethane and propane.  The region has significant NGL resources that are projected to be economically recoverable over the next three decades. Appalachian NGL production is projected to increase more than 700 percent between 2013 and 2023. Significant industry investments in natural gas and NGL infrastructure will support the boom in Appalachian production in the coming decades. NGL storage and midstream infrastructure are of particular importance to the region because produced volumes do not align with the high seasonal variability in demand and often exceed pipeline takeaway capacity, which presents further investment opportunities using ethane as a feedstock.

    Environmental group pushes for stepped up air pollution rules for gas industry – Environmentalists want the Wolf Administration to roll out tighter controls on methane pollution from existing wells and compressor stations to go along with those on new ones.The state Department of Environmental Protection in June announced stepped-up requirements for new wells and compressor stations, facilities that help keep the gas moving through pipelines.The additional move to add already-producing wells and operating compressor stations would be even more important as “protections are being rolled back at the federal level,” said Andrew Williams, director of regulatory and legislative affairs for the Environmental Defense Action Fund.In announcing the new limits last month, Gov. Tom Wolf said that as Pennsylvania is second to only Texas in natural gas production, the state is “uniquely positioned to be a national leader in addressing climate change while supporting and ensuring responsible energy development.”Neil Shader, a DEP spokesman, said the agency is “in the early stages” of developing new regulations for methane emissions from existing wells and compressor stations.Methane has become a hot-button because it’s considered “a potent greenhouse gas, with more than 80 times the climate warming impact of carbon dioxide over a 20-year timespan,” according to Williams’ group.The rules put in place in June came over the objections of the natural gas industry.“Methane does not appear to be increasing at levels that make specific limits and controls necessary,” the Marcellus Shale Coalition said in comments submitted to DEP.The group also complained that the limits set by the state appear “arbitrary.” In a statement provided Friday, the coalition’s president David Spigelmyer said the group would not welcome additional rules to limit methane pollution.

    Sunoco's stand-in ME2 line leaked gasoline at Darby Creek, pipeline map indicates - A 12-inch pipeline that Sunoco plans to use to carry natural gas liquids along unfinished parts of the Mariner East route appears to be the same line that recently leaked gasoline into a creek near Philadelphia International Airport, according to  government mapping data and Sunoco’s own statements. Sunoco wants to repurpose part of the pipeline that runs from Point Breeze near Philadelphia to the Montello terminal at Sinking Spring, near Reading in Berks County. The line would carry propane, ethane and butane while Mariner East 2, the first of the new pipelines, is being completed. The company said the stretch to be converted runs between Wallace and Middletown townships, a distance of about 25 miles.The company has informed state and federal regulators that it plans to convert the existing pipeline from carrying petroleum products such as gasoline, and reverse the direction of flow, so that it can begin supplying customers with natural gas liquids before completion of the long-delayed Mariner East 2.Conversion of the 12-inch pipeline, which, like the repurposed Mariner East 1, was built in the 1930s, has renewed claims by opponents of the Mariner East project that public safety is at risk, this time by the use of a line that has leaked at least three times in its history, according to federal data as well as state and local officials.The latest leak was first reported in mid-June at Darby Creek in Delaware County.

    Two protesters arrested at pipeline construction site in Middletown -- Two demonstrators – part of a group that dubbed themselves the “Mama Bear Brigade” including mothers and grandmothers – were arrested Tuesday when they sat down and blocked construction of Sunoco’s Mariner East 2 pipeline on Pennell Road.Accompanied by six supporters, the area-residents staged a sit-in protest of the pipeline construction.Arrested for trespassing, a summary offense, by Pennsylvania State Police, were Middletown residents Fran Sheldon and Meaghan Flynn. They were soon released by police. Attorney and former state Senate candidate Tanner Rouse will represent Sheldon and Flynn.The “Mama Bear Brigade,” including Middletown Township residents and Glenwood Elementary School parents, staged the protest and are women concerned about their children and grandchildren in the blast zone of the pipeline. “The mothers and grandmothers on-site had written letters, signed petitions, testified, and met with the governor and now they are feeling that there is no other choice,” Hughes said. “They are taking children’s safety into their own hands and trying to stop construction.”

    Rover Pipeline Should Be Fully Responsible for Stream Impacts - The Rover Pipeline in northern West Virginia has a long history of negligence – 18 water quality violations and two cease and desist orders since April 2017. You may have read in the news that WVDEP has issued Rover a penalty of $430,000 for 14 of those violations. The proposed agreement to that penalty is now open for public comment.While WV Rivers commends WVDEP for holding Rover accountable for their water quality violations, we request the penalty be adjusted in a way that fully considers Rover’s repeated negligence and disrespect of environmental law, and strongly deters other pipeline companies from following suit. View our letter to WVDEP here. Over the last year, Rover’s erosion impacted 35 streams and created unlawful water quality conditions approximately 92 times. $430,000 doesn’t cover the costs to reclaim the damage they’ve inflicted on West Virginia’s streams and the local residents who depend on them. Nor does it match in scale a penalty for a project with a construction budget of $4.2 billion. That’s why we are requesting WVDEP reconsider Rover’s penalties and deny them any future projects.

    Landslide caused West Virginia pipeline explosion, Columbia Gas reports - Columbia Gas Transmission has told federal pipeline regulators that a landslide was the apparent cause of the rupture and explosion of a new natural gas pipeline in Marshall County, W.Va., last month. The site of the break was at the bottom of a steep hill on Nixon Ridge, just south of Moundsville. The Pipeline and Hazardous Materials Safety Administration incident report, provided to the Post-Gazette by environmental activist organization Climate Investigations Center, indicates that officials inside Columbia’s control room got an alert about low pressure on the line at 4:16 a.m. on June 7 and sent someone to investigate. Marshall County 911 reported getting calls just a few minutes later reporting an explosion. At 4:37 a.m., the emergency agency called Columbia to report the news. (26 pp filing embedded) The carbon steel pipe, manufactured by Durabond in 2015, was not operating above its maximum pressure at the time of the incident. When it burst, it spewed $437,250 worth of natural gas. No one was injured.  TransCanada, which owns the Columbia Gas Transmission system, has been working on repairing the pipeline, pushing back the expected in-service date from early July to the middle of the month.“The weather in the region has continued to create challenging conditions during the remediation process,” the company said on a website it uses to communicate with customers.Lindsey Fought, a spokesperson with TransCanada, said the company is continuing to cooperate with federal authorities in the investigation.She confirmed that the federal pipeline agency and TransCanada's "internal findings point to land subsidence as the cause of the rupture."It may take months or years for federal regulators to complete their investigation of the Marshall County incident. When a natural gas liquids pipeline burst into flames in Follansbee, W.Va., in 2015, it took PHMSA more than a year to close the case, declaring that the root cause was subsidence. A final report for the Spectra Energy pipeline that ruptured in Salem Township, Westmoreland County in 2016 is still not posted on the federal site.

    Explosion triggers safety notice for TransCanada --Federal regulators yesterday said that land movement may have triggered a natural gas pipeline explosion at a remote West Virginia site last month and thatsimilar conditions exist at a half dozen other spots along the line.The Pipeline and Hazardous Materials Safety Administration warned TransCanada yesterday that it intends to impose new safety-related requirements on a portion of the Leach XPress pipeline in response to the risk of land subsidence, which might have been responsible for an explosion last month that blew an 83-foot section of pipe into the air, released 165 million cubic feet (mmcf) of natural gas and triggered a fireball that burned for several hours.The incident took place in a remote area and no injuries or damage to private property was reported (Greenwire, June 7).PHMSA's notice of proposed safety order, issued to TransCanada Corp. subsidiary Columbia Gas Transmission LLC, points to geological factors in the incident and could pose a challenge for other projects proposed for construction in similar steep, unstable Appalachian terrain.The pipeline that failed was constructed last year and went into service early this year, raising questions around why it failed so quickly and dramatically."The preliminary investigation suggests that the failure was the result of land subsidence causing stress on a girth weld," PHMSA said in the notice. An initial report on the incident filed by TransCanada and released earlier this week notes the cause of the failure as a landslide not related to heavy rains or floods. "Since the failure, TransCanada has identified six other points along the pipeline that, based on their geotechnical flyover, are areas of concern to the existence of large spoil piles, steep slopes, or indications of slips," it said.

    Part of TransCanada Leach gas pipe back in service after W. Va. blast (Reuters) - TransCanada Corp's Columbia Gas Transmission (TCO) unit said on Thursday it returned to service a section of the Leach Xpress natural gas pipeline downstream from a pipe blast in West Virginia in early June.Columbia said in a notice to customers that the Stagecoach-Leach Xpress meter in southeast Ohio has returned to service.The Stagecoach meter, the large connection at which different pipelines meet, in Monroe County on the Ohio-West Virginia border attaches to EQT Midstream Partners LP's Strike Force South gathering fields in Monroe and Belmont counties in Ohio.Columbia Gas said it was still working on the site of the blast and expected the pipe to return to service in mid July. 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 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 can 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.Appalachian output rose from 27.5 bcfd before the June 7 blast to as high as 28.1 bcfd over the weekend, according to Thomson Reuters data.The 1.5-bcfd Leach Xpress in West Virginia and Ohio, which entered full service at the start of 2018, transports Marcellus and Utica shale gas to consumers in the U.S. Midwest and Gulf Coast.  The 12,000-mile (19,312-km) Columbia pipeline system, which TransCanada acquired in 2016, serves millions of customers from New York to the Gulf of Mexico.

    TransCanada says blast-damaged Leach natgas pipe back in service on July 15 - (Reuters) - TransCanada Corp's Columbia Gas Transmission expects the section of the Leach Xpress natural gas pipeline damaged in a blast in West Virginia in early June to return to service on July 15. Its return, however, requires approval from federal pipeline safety regulators, Columbia said on Thursday in a notice to customers using the pipeline. The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) this week gave Columbia 30 days to respond to a list of corrective actions the agency proposed to improve the safety of the Leach pipe. Since the June 7 blast, Columbia has identified six other points along the pipeline that PHMSA said are "areas of concern" based on soil conditions and steep slopes or indications of slips. PHMSA has not identified the cause of the blast but said preliminary investigation suggests the failure was the result of ground movement that caused stress on a weld. That blast resulted in the ejection of about 83 feet (25.3 meters) of 36-inch (91-centimeter) pipe from the ditch and the loss of 165 million cubic feet of natural gas, PHMSA said. The explosion was in a remote rural area and caused no injuries or evacuations. The Leach shutdown 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 Dominion Energy Inc's transmission system, Energy Transfer Partners LP's Rover, Tallgrass Energy LP's Rockies Express, Enbridge Inc'sTexas Eastern Transmission and Kinder Morgan Inc's Tennessee Gas, according to analysts at S&P Global Platts. Columbia said the blast could affect movement of about 1.3 billion cubic feet per day. One billion cubic feet of gas can fuel about five million U.S. homes for a day. Overall output in the Appalachian region, however, was little changed as producers, like Range Resources Corp and Southwestern Energy Co, found other pipes to ship their gas.

    Factbox: Leach XPress resumes partial service, full capacity by July 15 — Columbia Gas Transmission on Thursday said it was immediately resuming partial service on its Leach XPress segment, with full service scheduled to return by Sunday, July 15. The news comes after an explosion in Marshall County, West Virginia, suspended operations on June 7, leaving the pipeline under force majeure over the past 35 days.

    • Early Thursday, Columbia said the upstream Stagecoach meter had returned to service effective for intraday cycle 1 on Gas Day July 12.
    • Repairs on Leach XPress, upstream of Stagecoach, continue with a resumption of operations at the Eureka, Gibraltar and Majorsville meters expected by July 15.
    • Wednesday's evening-cycle nominations for Gas Day July 12 showed flow volumes at the Stagecoach meter at zero, but are subject to revision during subsequent intraday cycles on Thursday, S&P Global Platts Analytics data shows.
    • Upstream receipts at Stagecoach are likely to return to levels near the pre-explosion average of 230 MMcf/d by later Thursday.
    • Flows at Eureka, Gibraltar and Majorsville were at zero on Thursday, where they are expected to remain until the resumption of full capacity on the pipeline Sunday.
    • Flows on Columbia's mainline were estimated just below 2.6 Bcf/d Thursday. Mainline flows have averaged 2.6 Bcf/d, or about 1.1 Bcf/d below the pre-explosion average, since June 7
    • Upstream production continues to be rerouted to Dominion Transmission, Rockies Express Pipeline, Rover Pipeline, Tennessee Gas Pipeline and Texas Eastern Transmission with flows still elevated Thursday. Since the June 7 incident, cumulative receipts on the dense network of alternate pipes are up by an average 1.3 Bcf/d.
    • In spite of the force majeure on Leach XPress, Appalachian gas production has climbed about 3% since early June. Over the past seven days, total Northeast production has averaged nearly 28 Bcf/d, compared to a 27.2 Bcf/d average in the week prior to the incident.

    Alert: West Virginia’s Pipeline Explosion Caused by a Landslide on Steep Terrain.  Virginia’s Mountain Valley Pipeline, Being Built by a Serial Landslide Perpetrator, is Next.  --On May 28 and June 4, we published two stories about a lawsuit filed in federal court in Richmond that pits Dominion Energy against Precision Pipeline, LLC, the Wisconsin company that is currently building the Mountain Valley Pipeline.  The stories – which have garnered more than 37,000 readers – exposed previously unpublished expert reports – found here and here – that demonstrated Precisions Pipeline’s sheer incompetence in building a 30-inch diameter 55-mile long pipeline for Dominion in West Virginia and Pennsylvania.As we noted, the expert reports revealed that there were more than 50 landslides after the Precision Pipeline project was completed:  “Yes, >50 landslides.In a 55-mile pipeline projectWith a 30-inch diameter.In non-mountainous terrain….”That’s an average of one landslide… every mile.The proposed Mountain Valley Pipeline is 300 miles long.  Do the math.”  The landslide risks at issue in the Dominion/Precision Pipeline lawsuit are terrifying because the Mountain Valley and Atlantic Coast Pipelines are proposed to be built through some of the steepest terrain in Virginia, with slopes as steep as 78% in places.  This mountainous terrain is particularly susceptible to landslides when fill material generated by construction is deposited on slopes after the pipelines are buried.  The reasons are discussed in this excellent short video, “The Truth is in the Proof.”One week after our stories were published, a brand new TransCanada/Columbia Gas pipeline exploded in West Virginia, generating a fireball that could be seen as far away as Pennsylvania.  When the pipeline went on line in January 2018, company officials described it as “best in class” even though “whistleblowers at numerous pipeline companies have raised red flags about the impacts of rushed construction.”The West Virginia explosion occurred on a slope known as Nixon’s Ridge.  Almost immediately after it occurred, stories started to circulate that workers had observed shifting soil during construction but were told to “just keep working” and “get the pipe in the ground.” Now the bombshell news just broke: “Columbia Gas Transmission has told federal pipeline regulators that a landslide was the apparent cause of the rupture and explosion of a new natural gas pipeline in Marshall County, W.Va., last month.”  And it turns out it’s not the first time in recent years that a pipeline exploded in West Virginia due to a landslide:  a similar explosion occurred in 2015 in a 20-inch pipeline.

    Mountain Valley Pipeline cited for environmental violations (AP) — Regulators in Virginia are citing the Mountain Valley Pipeline project for environmental violations they say include the improper release of sediment into waterways. The Department of Environmental Quality announced Tuesday that it issued a notice of violation to the natural gas pipeline. Other alleged violations include failing to follow approved erosion and sediment control plans. The notice of violation requires pipeline representatives to discuss how to fix the problems and prevent future violations. It could result in civil fines. Pipeline spokeswoman Natalie Cox says the issues identified have either been restored or are being fixed. West Virginia regulators have also previously cited the project for similar issues. Tuesday’s announcement comes about a week after Mountain Valley agreed to temporarily suspend pipeline installation work in Virginia to improve erosion and sediment controls. The department has since approved work to restart in some areas.

    VIRGINIA DEQ Takes Enforcement Action Against Mountain Valley Pipeline – The Virginia Department of Environmental Quality (DEQ) has issued a Notice of Violation (NOV) to Mountain Valley Pipeline, LLC (MVP) for alleged violations of the Virginia Stormwater Management Act and Regulations, the Virginia Erosion and Sediment Control Law and Regulations, the Virginia Water Protection Permit Program and Regulations, and Clean Water Act Section 401 Water Quality Certification No. 17-001 at locations where land disturbing activity is occurring along the MVP pipeline project. The alleged violations include failure to take corrective actions within required timeframes, failure to install (and improperly installed) best management practices in accordance with approved erosion and sediment control plans, release of sediment off the right-of-way, and sediment deposited in surface waters. These issues are located in Craig, Franklin, Giles, Montgomery, Pittsylvania and/or Roanoke counties. The issuance of an NOV is the first step toward generating enforcement action by DEQ. The NOV requires MVP representatives to contact DEQ within 10 days to discuss how to remedy the situation and how they will prevent future violations. Enforcement actions are frequently resolved with payment of civil charges and required actions to correct the violations.  “The Notice of Violation process is standard procedure for DEQ to formally and publicly announce violations and determine a path forward for resolution,” said DEQ Director David Paylor. “The specific results of the NOV will be developed over the coming weeks and once finalized, shared with the public. We are concerned about these alleged violations and we are holding MVP accountable. We expect MVP to abide by the highest environmental standards, and we plan to resolve these issues fully in order to protect Virginia’s water quality.”

    Franklin County wants pipeline company to reimburse it for public safety costs -- Franklin County plans to ask the Mountain Valley Pipeline to cover public safety costs it has incurred as a result of the project. The idea to bill the pipeline’s builders stemmed from a meeting between pipeline and county officials to discuss public safety. After concerns were raised that an influx of calls to law enforcement during construction would pose a financial burden to the county, a pipeline representative suggested such costs be passed on to them, according to multiple county officials in attendance. Supervisors Ronnie Thompson and Mike Carter, both opponents of the pipeline, attended the meeting. Thompson recalled being told the pipeline “was to never cost the municipality anything when it came down.” He took that to mean Franklin County can bill Mountain Valley for associated costs, and directed county staff to look into doing so. County Administrator Brent Robertson characterized comments made at the meeting as more of a conversation than a formal agreement. He said the county’s approach to billing Mountain Valley for such costs is still evolving.  The “crux of the discussion,” Robertson said, will be whether officials consider the response from law enforcement to fall within the realm of everyday responsibilities or something extra.

    Mountain Forest Becomes Classroom Camp in Pipeline Fight - As Miracle Ridge rises toward its peak on Jack Mountain, the remnants of a wire fence divide the mountain between lower slopes where cows once pastured and a high, narrow spine of virgin forest.  The trees — mostly oak and hickory — aren't as big as the massive sugar maples on the lower slopes, but they're just as old, surviving hundreds of years on shallow, rocky soil in high winds. Loggers haven't touched this forest, nor have non-native plants invaded what Virginia's Division of Natural Heritage has declared a conservation site of "very high significance."  Now, the mountain ridge is becoming a classroom camp in the escalating battle over the Atlantic Coast Pipeline, which would level the forest and more than 3,000 feet of ridgeline on its 600-mile path from the West Virginia shale fields to natural gas markets in southeastern Virginia and North Carolina. "We anticipate people camping right where the pipeline is proposed," said Bill Limpert, whose 120-acre property includes the mountainside he began calling Miracle Ridge after he and his wife, Lynn, purchased it nine years ago.The Limperts have opened their land to an anti-pipeline encampment, beginning Friday and extending to Sept. 9, about a week before a seasonal window opens for tree cutting to resume on the pipeline route planned by Dominion Energy and its partners.They expect as many as 20 campers a day to visit their land near Bolar in Bath County near its boundary with Highland County in the Allegheny Mountains. The camp is organized by the Chesapeake Climate Action Network, an environmental organization that opposes the production of natural gas through hydraulic fracturing, or fracking, and the construction of pipelines through environmentally sensitive areas to transport the fossil fuel to markets.

    One week after suspension, some work resumes on the Mountain Valley Pipeline — After coming to a brief halt, construction of the Mountain Valley Pipeline is resuming piecemeal along its approximately 100-mile route through the New River and Roanoke valleys. The Virginia Department of Environmental Quality, which said the temporary suspension began June 29 after Mountain Valley failed to control runoff from work sites, identified two segments this week where improvements by the company were sufficient for work to restart. One area is in the Jefferson National Forest, and the other is between Mount Tabor and Catawba roads in Montgomery County. Mountain Valley’s efforts to correct erosion and sediment control measures along a third segment, where the natural gas pipeline will pass under the Blue Ridge Parkway in Roanoke County, were deemed deficient. Work cannot resume there yet, DEQ said in a summary posted to its website. Environmental regulators plan to inspect other areas and provide online updates as more clearances are granted. DEQ spokesman Greg Bilyeu could not say Friday how many sites will be reviewed.  Critics said the brevity of the suspension, and the scarcity of details provided by DEQ, call into question the agency’s commitment to addressing problems and concerns that reached a critical mass as work on the interstate pipeline ramped up in May and June. “We believe that this was all a public relations stunt,” 

    Court: Louisiana oil pipeline construction can continue (AP) — Construction of a crude oil pipeline through Louisiana's environmentally fragile Atchafalaya Basin swamp can continue under a federal appeals court decision handed down Friday. A divided panel of the 5th U.S. Circuit Court of Appeals vacated a lower court's preliminary injunction blocking construction of the Bayou Bridge Pipeline. The 2-1 decision was a victory for Bayou Bridge Pipeline LLC, whose lawyers had urged the panel to throw out U.S. District Judge Shelly Dick's injunction in April. Dick issued a preliminary injunction in February stopping pipeline construction in the Atchafalaya Basin swamp until a lawsuit by project opponents is resolved. But her injunction was suspended by a 5th Circuit panel in March, so construction continued even before Friday's ruling. The company recently told the court that it expects to complete construction by October. The decision comes in a lawsuit by environmental groups, including Atchafalaya Basinkeeper, Waterkeeper Alliance, The Gulf Restoration Network and the Sierra Club. They sued Bayou Bridge Pipeline LLC and the U.S. Army Corps of Engineers. The lawsuit says the Corps violated the Clean Water Act and other environmental laws when it approved a permit for the project.

    Still No Evacuation Plan for Vulnerable Residents at End of Louisiana’s Bayou Bridge Pipeline -- Sharon Lavigne and Geraldine Mayho took me to meet some of the most vulnerable members of their community, handicapped residents of St. James, Louisiana, who live near a terminal where the Bayou Bridge pipeline will end. “These people have no way of getting out if there is a spill or explosion,” Lavigne told me. She explained with only one road in and out of the area, if the pipeline fails or an industrial accident occurs, “we are all trapped back here.” St. James is a predominantly low-income, African-American town of less than 1,000. It is located in the middle of a highly industrialized stretch of land along the Mississippi River, between Baton Rouge and New Orleans, known as Cancer Alley. The town is part of St. James Parish’s 5th District, an area that has transformed from mostly rural to industrial over the last decade.Numerous industrial projects including the Bayou Bridge pipeline currently are being built here.The Louisiana governor’s office recently announced the Taiwan- based Formosa Petrochemical Corp. purchased a 2,400-acre site along the west bank of the Mississippi River near the Sunshine Bridge, at the district’s edge. The company plans to build a $9.4 billion chemical manufacturing complex that it is branding as “the Sunshine Project.”  But Lavigne and Mayho see it as one more nail in their coffins because they don’t believe a chemical manufacturing complex can operate so closely to their homes without adding to the air pollution their community already endures. The new industrial facilities and infrastructure like the Bayou Bridge pipeline will join a large number of oil storage tanks that were built close to many homes on St. James’ Burton Lane, where I visited and shot portraits of some of the residents with restricted mobility.

    Former Putin adviser has secret investment in US energy firm praised by Trump - Vladimir Putin’s former chief of staff has a secret investment in an American energy company hailed by Donald Trump as creating jobs for American workers.Alexander Voloshin – who served as Boris Yeltsin’s chief of staff before working for Putin between 2000 and 2003 – has an undisclosed stake in American Ethane, a Houston-based firm that recently signed a multibillion dollar export deal with China. Voloshin is part of a consortium of Russian investors in American Ethane that at one point included the oligarch and billionaire Roman Abramovich.The revelation comes ahead of Trump’s four-day visit to the UK, beginning on Thursday, and his summit on 16 July with President Putin in Helsinki. In November 2017, Trump presided over a series of trade agreements with his Chinese counterpart, Xi Jinping. One of the biggest was a $26bn (£20bn) deal to supply liquid ethane to China, struck between privately owned American Ethane and a large Chinese conglomerate. Trump applauded and nodded vigorously as American Ethane’s CEO, John Houghtaling, signed a “historic” memorandum of understanding with his Chinese partner.The president was promoting “American prosperity and trade” in deals that would generate “thousands of American jobs”, the White House announced. In fact, the chief beneficiaries of the Trump-endorsed deal live and work in Moscow. One of them is Voloshin, who spent three years at Putin’s side, and headed his first presidential administration.

    Differentials Aside, U.S. Onshore Could See 100 More Rigs Rising This Year, Says Raymond James - The U.S. rig count should continue to increase into the second half of this year, with up to 100 oil and gas rigs added, even with potential price differential issues in the No. 1 play, the Permian Basin, Raymond James & Associates Inc. said Monday.Analysts J. Marshall Adkins and Praveen Narra said they expect a nearly 100-rig count rise through the end of the December with “modest” growth continuing in 2019.The United States added five oil rigs in the onshore last week from a week before, bringing the domestic count to 1,052 from a year-ago tally of 952, according to Baker Hughes Inc. (BHI). For the oily onshore plays, Energent Group estimated the Permian count rose 0.2% week/week to 475 rigs, while the Eagle Ford Shale saw a 1.3% gain to 81 rigs and the Williston Basin, i.e. Bakken Shale, count climbed 5.6%.The average U.S. rig count for June 2018 was 1,056 -- up 10 from the 1,046 counted in May, and up 125 from the 931 counted in June 2017, BHI said Monday.“Given the rig count outperformance in the first half of the year and continued growth in 2018, our average rig count comes in up about 22% this year at 1,070,” Adkins and Narra said.Following a “robust” exit rate in 2018 estimated at 1,160 rigs, the count should continue to rise, albeit more modestly, at around 14% in 2019 on “buffered support” from the Bakken and Eagle Ford shales.In 2020 and beyond, Raymond James analysts are forecasting “consistent multi-year growth” in the United States because of a tightening global market.Even with the negative press around widening Permian oil price differentials and lower Permian spot oil prices, he U.S. oilfield market is prime for continued growth in part because U.S. exploration and production (E&P) cash flows should be healthy in 2018, rising by 56% year/year and up again in 2019 by around 18%, which would support more spending, said Adkins and Narra. “Even if Permian oil price differentials widen to an irrational $25/bbl average over the next 18 months (as we are modeling), realized Permian spot prices would still be in-line with initial 2018 budgeting assumptions (in the low to mid-$50 range).”

    CME, Cheniere to develop first U.S. LNG futures contract (Reuters) - CME Group Inc said on Tuesday it will develop the first physically deliverable U.S. liquefied natural gas futures contract as growing worldwide demand has made the United States a key LNG exporter. CME said the contract will take delivery at Cheniere Energy Inc’s Sabine Pass LNG export terminal in Louisiana. It could not say when it will launch the new product or provide details other than that it will trade on the CME’s New York Mercantile Exchange (NYMEX) like its Henry Hub natural gas futures. Overall world LNG consumption has risen to a record 39.0 billion cubic feet per day (bcfd) in 2017 from just 29.1 bcfd in 2010 and is expected to keep growing by about 3 percent a year through 2050, according to U.S. energy data. While LNG trade on exchanges like the CME is still small, experts believe volumes will increase rapidly in the near future as the United States becomes one of the world’s biggest LNG exporters. Total U.S. LNG export capacity is expected to rise to 10.1 bcfd of gas in 2020 from 3.8 bcfd now, making the country the third-biggest LNG exporter in the world by capacity in 2019. One billion cubic feet is enough to fuel about 5 million U.S. homes for a day. “We have spoken to the market and they have expressed a desire to have a physically delivered LNG contract that can help them manage price risks,” said Peter Keavey, global head of energy at CME. Pricing at Cheniere’s Sabine Pass is currently linked to the Henry Hub gas benchmark traded on CME’s NYMEX. Sabine Pass was the first terminal in the U.S. lower 48 states to produce and deliver super-cooled LNG for export to the world. Cheniere is the biggest buyer of gas in the United States, consuming over 3.1 bcfd, and is expected to increase purchases as more liquefaction trains at Sabine Pass and its Corpus Christi LNG export terminal enter service. The company’s current consumption represents almost 4 percent of total projected U.S. gas production of 81.3 bcfd in 2018. “With Cheniere behind the CME futures contract...the odds would favor the CME contract especially if Cheniere immediately starts to sell its LNG on a Sabine Pass contract basis,” 

    LNG Awakening Part 1: Buyers Seeking Transparency to Develop Price Benchmark -Buyers and sellers of liquefied natural gas (LNG) are starting to turn to online trading platforms to conduct their business in an effort to gain the transparency, liquidity and optionality they desire to trade physical cargoes, as well as an efficient marketplace to execute transactions.“Buyers want to have the choice for some optionality as well. They want flexibility,” said GLX CEO Damien Criddle, whose independent online platform trades LNG. Buyers last year sought contracts that averaged around seven years, Royal Dutch Shell plc said in its second annual outlook on the global LNG market.Most LNG in the global marketplace today is sold under long-term contracts of 10-20 years, fee structures still desired by most sellers. For example, Cheniere Energy Inc.’s recent deal with PetroChina International Co. Ltd. is to sell 1.2 million metric tons per year through 2043. However, there is a growing appetite from buyers for shorter contracts with more flexibility.The need for greater flexibility in a marketplace that has seen spot LNG volumes increase substantially in the last decade is one reason Criddle, a former LNG transaction lawyer, and his team formed GLX in 2015. The Singapore-based company launched its trading platform last year and now has more than 40 members from Asia, Australia, Europe, the Middle East and North America. Another five companies now are in the process of joining the exchange.GLX closed its first transaction on May 21. The deal was the first time Malaysia’s state-owned Petroliam Nasional Berhad, through subsidiary Petronas LNG Ltd. (PLL), sold an LNG cargo on an online trading platform. Criddle said a number of cargoes have negotiated using the platform, but the recent Petronas trade is the first to utilize the end-to-end functionality of GLX through to close the deal.

    LNG Awakening Part 2: U.S. Exports on the Rise, But Limited Infrastructure in Thirsty Global Markets a Big Concern - Part two of a three-part series (See Part One; Part Three)  For all the economic benefits that liquefied natural gas (LNG) exports are expected to bring to the United States, including bringing an estimated $30 billion back into the domestic economy, a lack of infrastructure to support demand and complex regulatory regimes in some of the fastest growing markets have left industry experts cautiously optimistic about growth potential.China surpassed South Korea as the second largest importer of LNG in 2017 with imports averaging 5 Bcf/d, exceeded only by Japanese imports of 11 Bcf/d, according to data from IHS Markit and official Chinese government statistics. Imports of LNG by China, driven by government policies designed to reduce air pollution, increased by 1.6 Bcf/d (46%) in 2017, with monthly imports reaching 7.8 Bcf/d in December. An expected surge in 2018 could put China in direct competition with Japan for the No. 1 spot.The surge in gas demand over the past year led to “severe strains” on China’s gas infrastructure, “as retail and wholesale prices increased sharply and LNG imports ramped up beyond notional capacity limits,” BP plc chief economist Spencer Dale said in a June webcast to discuss BP’s 67th annual Statistical Review of World Energy. The strain also led to widespread gas rationing, with households given priority over industrial use.“Some of these tensions and strains simply reflect the speed with which gas demand expanded. There’s a limit to how quickly LNG imports can be increased,” Dale said. “Imported pipeline gas didn’t grow by as much as perhaps expected. But the strains also highlighted the underlying weakness of gas infrastructure in China. The network of pipelines across China is incomplete leading to significant distributional issues. Even more important, gas storage capacity in China is inadequate to match the fluctuations in demand.”Effective gas storage in China is about 3% of consumption, compared to 20% in the United States and Europe, according to BP. “These types of structural issues can’t be fixed overnight and are likely to constrain the extent at which Chinese gas demand outside of the power sector can grow in the near-term,” Dale said.

    LNG Awakening Part 3: Second-Wave Developers Optimistic About Future Despite Growing Trade Disputes -  Part three of a three-part series (See Part One; Part Two) Even with the United States seemingly on the brink of an international trade war, and growing concern in the oil and natural gas industry that recently enacted tariffs on goods from China and other countries could threaten development, second-wave liquefied natural gas (LNG) developers appear to be cautiously optimistic that the economic and environmental benefits of U.S. exports will ensure future projects get off the ground.  NextDecade Corp. CEO Matthew Schatzman recently touted LNG exports as a way for the U.S. government to positively impact the environment by promoting the use of low-cost natural gas over coal in both developed and emerging markets. NextDecade is developing the Rio Grande LNG export project at the southern tip of Texas in Brownsville.  Schatzman told NGI he thinks the global market needs at least 150 million metric tons/year (mmty) of new liquefaction capacity by 2025. Two-thirds of the supply likely would come from North America, mainly from the U.S. Gulf Coast.“The U.S. has abundant natural gas reserves and is well-positioned to provide global markets with reliable, low-cost LNG. In fact, due to its abundance of natural resources, the United States has an opportunity to emerge as the world’s largest supplier of LNG in the coming years,” Schatzman said.  Still, the recent tariffs imposed on steel and aluminum from China, the European Union, Mexico and Canada, as well as additional tariffs on Chinese products collectively valued at about $50 billion in 2018 trade values, are keeping some in the industry on pins and needles when it comes to whether the United States will be able to capitalize on the rapidly growing LNG demand in the Asia Pacific region. “Some of these LNG project developers have pointed out that Chinese customers are telling them that they can buy their LNG from several other producers,” an official with an LNG consultancy said. China’s three largest LNG suppliers today are Australia, Qatar and Malaysia, while pipeline imports come from central Asia and Myanmar.

    LNG spot prices rally on tight supply, summer heat --Platts Snapshot video - Concurrent maintenance activities and outages on the supply side tightened the LNG market during the month of June. This caused a massive rally in the Platts JKM price for spot deliveries into Northeast Asia. Now we have to ask whether this trend is expected to continue, or if supply will come back in the coming months leading up to the winter.

    Natural Gas Prices to Average $2.99 This Year, $3.04 in 2019, Says EIA - Higher natural gas production during the injection season is expected to offset low storage levels and will moderate upward price pressures this year, resulting in Henry Hub spot prices averaging $2.99/MMBtu for 2018, according to the Energy Information Administration (EIA).Prices next year are expected to average slightly higher at $3.04/MMBtu, EIA said in its latest Short-Term Energy Outlook (STEO), which was released Tuesday.The 2018 price forecast is unchanged from EIA's previous STEO, while the 2019 price forecast is down 4 cents from $3.08/MMBtu.New York Mercantile Exchange contract values for October 2018 delivery traded during the five-day period ending July 5 suggest a price range of $2.37-3.59/MMBtu, encompassing the market expectation of Henry Hub prices in October at the 95% confidence level, EIA said.The front-month natural gas futures contract for delivery at Henry Hub settled at $2.84/MMBtu on July 5, a decrease of 13 cents/MMBtu from June 1."Record-high natural gas production continues to limit upward price pressures," according to EIA, which estimates that natural gas production reached 81.8 Bcf/d in June, 9.2 Bcf/d higher than in June 2017. "However, for the four weeks ending June 28, cooling degree days were 23% higher than normal, putting some upward pressure on natural gas prices."Futures prices increased to $3.02/MMBtu on June 15, the first time prices were more than $3.00/MMBtu since January. "Additional natural gas consumption for power generation helped to keep natural gas inventories about 500 Bcf below the five-year (2013–17) average through June, despite rising production." Following the coldest April in more than two decades and a resulting delay to the start of the summer injection season, inventories are expected to increase at the five-year average rate of growth during the injection season to reach 3.5 Tcf on October 31,  9% lower than the five-year average for the end of October, EIA said.

    Power Demand Could Keep Natural Gas Storage at Deficit Despite Record Onshore Output - Even as Lower 48 natural gas production has reached record highs in recent days, strong power demand in the South Central region of the United States stands to challenge storage injections going into the peak summer period, according to Barclays Commodities Research.Daily natural gas flow volumes have climbed just north of 80 Bcf/d on a handful of days since the end of June. Growth has come from shale plays including the Marcellus and Utica despite infrastructure issues in the region, like the explosion on Columbia Gas Transmission’s Leach Xpress that has restricted flows on the pipeline and the still pending in-service requests for the final portions of Energy Transfer Partners LP’s Rover Pipeline. Incremental additions to takeaway capacity in the Permian Basin have allowed for continued production growth in that region as well.East Daley analysts have also noted that production from the Louisiana side of the Haynesville Shale “has been on a tear” since early 2017 as commodity prices have rebounded from 2016 lows. Natural gas production volumes hitting interstate pipelines have nearly doubled in the past 18 months, they said.Sample volumes showed the biggest sequential increases in 2Q2018 for Azure Midstream Energy LLC’s Holly system (up 52%), Momentum Midstream LLC’s M5/Indigo Blue Union (27%), Kinder Morgan Inc.’s Kinderhawk system (22%) and Aethon Energy’s Ibex system (22%).Given the production growth trajectory, Barclays researchers expect Lower 48 production to average 79.9 Bcf/d in 2018, up 7.3 Bcf/d year/year (y/y). Despite the surge in production, storage inventory deficits of historical levels remain.

    Market Awaiting EIA Storage Report as August Natural Gas Called Lower -- August natural gas futures were set to open Thursday about 1.6 cents lower at around $2.813/MMBtu, with the market looking ahead to a potentially leaner than average Energy Information Administration (EIA) storage report that could help gauge the impact of recent heat. Estimates for this week’s EIA report point to a build well shy of the five-year average. A Reuters survey of traders and analysts on average showed respondents anticipating a 56 Bcf build for the week ended July 6, with responses ranging from 47 Bcf to 67 Bcf. A Bloomberg survey produced a median 55 Bcf injection, with a range of 34 Bcf to 67 Bcf. IAF Advisors analyst Kyle Cooper predicted a 50 Bcf build, while Intercontinental Exchange EIA Financial Weekly Index futures settled Wednesday at an injection of 49 Bcf. Last year, EIA recorded a 59 Bcf build, and the five-year average is an injection of 77 Bcf “It was warmer than normal over most of the country besides portions of the Northwest and South, exceptionally hot across the Northeast and Great Lakes where mid-90s were observed, although tricky with the Fourth of July holiday,” NatGasWeather said. “Our algorithm sees a bullish outcome at 47-48 Bcf.” As for the latest weather data, the firm said overnight guidance failed to trend hotter for the last week of July, “seeing weather systems tracking across the northern and eastern U.S. with mostly comfortable conditions, although hot over the rest of the country with 90s and 100s. Essentially, still not impressive enough for the market’s liking across the Northeast late next week into the last week of July.

     EIA report shows a weekly rise of 51 billion cubic feet in U.S. natural-gas supplies - The U.S. Energy Information Administration reported Thursday that domestic supplies of natural gas rose by 51 billion cubic feet for the week ended July 6. Market consensus had called for a rise just shy of 60 billion cubic feet, according to Schneider Electric. Total stocks now stand at 2.203 trillion cubic feet, down 725 billion cubic feet from a year ago, and 519 billion below the five-year average, the government said. August natural gas NGQ18, -0.39% fell 2.1 cents, or 0.7%, at $2.808 per million British thermal units, down from $2.824 before the supply data.

    Natural Gas Is Not Filling Storage Quickly Enough Before Winter - Natural gas is not making any progress in whittling down its significant storage deficit. This will not be a big issue if the upcoming winter is warmer than normal, or even normal. However, if the upcoming winter is much colder than normal, then parts of the country will run out of natural gas in storage and shortages will occur before the winter is over. This could cause a large rally in natural gas prices before the end of winter, if the winter is much colder than normal. At this point in time it is too early to know what the temperatures will be for the upcoming winter. The latest EIA Natural Gas Storage Report shows the following: According to the EIA: "Working gas in storage was 2,203 Bcf as of Friday, July 6, 2018, according to EIA estimates. This represents a net increase of 51 Bcf from the previous week. Stocks were 725 Bcf less than last year at this time and 519 Bcf below the five-year average of 2,722 Bcf. At 2,203 Bcf, total working gas is within the five-year historical range." The key number to focus on is that natural gas in storage is 519 Bcf below the five-year average, which is almost 20% below normal. What is also concerning is that natural gas in storage is getting closer to falling below the five-year minimum. Below is the EIA chart of the five-year average of natural gas in storage:  The report states as of July 6, 2018, the five-year minimum in storage was 2,053 Bcf. With the latest storage levels at 2,203 Bcf, we are now only 150 Bcf above the five-year minimum. The five-year minimum occurred in 2014 when storage fell to 825 Bcf at the end of March. In 2014, the summer was mild and natural gas in storage rose at an above normal rate. That is not what is happening this summer. In early 2014 natural gas futures nearly doubled and spiked to over $6 per Mcf based on storage concerns. At that time natural gas prices were depressed based on a belief that growing supply was outpacing demand. The same conditions exist in today's natural gas futures market. Hence, if storage concerns become real in early 2019 it is reasonable to expect a significant increase in natural gas futures prices from current levels.

    Fourth-ever crude export sails from LOOP after record-setting load time - Another record-setting crude export out of the Louisiana Offshore Oil Port (LOOP) sailed Wednesday afternoon and is headed to the Caribbean after spending about four days loading, according to Platts vessel-tracking software. The Anne, a VLCC with a capacity of 2.02 million barrels of crude, is due on the Dutch Antilles island of St. Eustatius, on Tuesday and was north of Puerto Rico on Monday, according to cFlow, Platts trade flow software. A representative from LOOP did not return a request for comment Monday. LOOP loaded the tanker about two days faster than its previous best, which sailed only two weeks previously. Platts cFlow showed Anne arriving at LOOP on July 1 and the tanker departed on July 4. That compares with seven days at LOOP for Shaden and 10 days for Nave Photon and with six days for Eagle Vancouver, which were the first, second and third VLCCs to load at LOOP earlier this year, respectively. Four days is much faster than other VLCC load-times in the US Gulf Coast, which must either be partially or fully loaded using reverse lightering. Typically, US Gulf Coast VLCC loadings take on average 10 days to complete, according to a recent presentation by an Occidental Petroleum representative. However, as export terminals increase their capacities and fine tune their loading procedures, those load times are shortening. By comparison, the FPMC C MELODY, another VLCC was recently partially loaded in the US Gulf Coast at Enterprise Products’ Texas City dock on the Houston Ship Channel. That vessel arrived for loading in Texas City on June 21 and then moved to the Offshore Galveston Lightering Zone, where the remainder of the cargo was loaded via ship-to-ship transfer. FPMC C MELODY set sail on June 28 and is expected to arrive in Sikka, India, on August 9. FPMC C MELODY also made a one-day stop in St. Eustatius, where there are a number of blending and storage facilities. 

    Plans Afoot To Load Crude Onto VLCCs At More Gulf Coast Ports --For the first time ever, U.S. crude oil exports have hit the 3 MMb/d mark — a once-unthinkable pace equivalent to sending out 10 fully loaded Very Large Crude Carriers a week. VLCCs, with their 2-MMbbl capacity and rock-bottom per-bbl delivery costs, are the most cost-effective way to transport crude to distant markets like China and India. But there’s still only one terminal on the Gulf Coast that can fill a VLCC to the brim — the Louisiana Offshore Oil Port — and pipeline connections from key Texas and Oklahoma plays to LOOP are limited. Elsewhere along the coast, VLCCs need to be loaded in offshore deep water by reverse lightering from smaller vessels — a slower and more costly loading process. Change is a-comin’, though. Companies are testing the docking and partial loading of VLCCs at terminals along the Texas coast, and plans for a number of greenfield facilities capable of partially — or even fully — loading the gargantuan vessels at the dock are being considered. Today, we review the latest efforts to streamline the loading of VLCCs and what they mean for crude-export economics. As we said in our last look at VLCCs a few months ago (Rock the Boat), the use of the supertankers during the U.S.’s 40-year ban on most crude exports was largely limited to imports to LOOP,, occasional shipments out of the Valdez Marine Terminal in Valdez, AK (the southern terminus of the Trans-Alaska Pipeline System) and into Andeavor’s Berth 121 in Long Beach, CA — the two other U.S. facilities designed to handle VLCCs. Since the export ban was lifted in December 2015, though, crude exports — and interest in using VLCCs for exports out of the Gulf Coast — have been on the upswing. Figure 1 shows that in 2015, the last year the ban was in place, exports (almost all of them to Canada) averaged 465 Mb/d, according to the Energy Information Administration (EIA). Exports rose 27% (to just about 590 Mb/d) in 2016, then almost doubled in 2017 (to more than 1.1 MMb/d).

    US expected to become world's top oil producer next year - The U.S. has nosed ahead of Saudi Arabia and is on pace to surpass Russia to become the world's biggest oil producer for the first time in more than four decades. The latest forecast from the U.S. Energy Information Administration predicts that U.S. output will grow next year to 11.8 million barrels a day. "If the forecast holds, that would make the U.S. the world's leading producer of crude," says Linda Capuano, who heads the agency, a part of the Energy Department. Saudi Arabia and Russia could upend that forecast by boosting their own production. In the face of rising global oil prices, members of the OPEC cartel and a few non-members including Russia agreed last month to ease production caps that had contributed to the run-up in prices. President Donald Trump has urged the Saudis to pump more oil to contain rising prices. He tweeted on June 30 that King Salman agreed to boost production "maybe up to 2,000,000 barrels." The White House later clarified that the king said his country has a reserve of 2 million barrels a day that could be tapped "if and when necessary." The idea that the U.S. could ever again become the world's top oil producer once seemed preposterous. "A decade ago the only question was how fast would U.S. production go down," said Daniel Yergin, author of several books about the oil industry including a history, "The Prize." The rebound of U.S. output "has made a huge difference. If this had not happened, we would have had a severe shortage of world oil," he said 

    A Storm Is Brewing For U.S. Oil Exports -- Two geopolitical developments in recent weeks - U.S. sanctions on Iran and the escalating U.S.-Chinese trade war - are set to reshuffle the U.S. oil flows to the world’s fastest-growing oil market, Asia.  On the one hand, the United States is pressing Iran’s oil customers to cut their Iranian crude imports by as much as possible. China is Tehran’s biggest oil buyer, and India is its second. While India is reportedly preparing for a drastic reduction of Iranian oil imports, China will continue to buy Iranian oil. On the other hand, China is threatening to impose a 25-percent tariff on U.S. crude oil and oil products after the U.S.-Chinese trade war took a turn for the worse in recent weeks. Such a tariff would make American crude oil uncompetitive in China, and U.S. oil sellers will have to find alternative buyers for their crude to replace the volumes they are currently selling to their second-largest oil customer after Canada.India is an obvious possibility - its imports and demand are surging, and it may be willing to replace at least part of its Iranian oil imports out of fear that its companies and the sovereign could lose access to the U.S. financial system should it continue to buy Iran’s oil.But the problem with India possibly replacing Iranian oil with U.S. crude is that American light oil isn’t a substitute for heavy high-sulfur Iranian crude.India began regular U.S. imports last year, but the volumes are currently small, especially compared to the U.S. crude exports to China, EIA data shows. But in May, India’s imports of U.S. crude oil jumped by nine times the April volumes—signifying that at least a partial switch is already underway “Shale crude is not an alternative to Iranian crude,” Sandy Fielden, director of research for commodities and energy at Morningstar, told Bloomberg. “Indian refiners can’t absorb all the U.S. oil that was going to China. They can import more, but can they process it?”

    U.S. Exporters Will Be a Surprise Loser From Tariff Fight (WSJ)  Who’s the biggest loser when tariffs are imposed on imports? The surprising answer: exporters. Though completely counterintuitive, theory and evidence show that taxes on imports act just like a tax on exports. Though it’s early, the Trump administration’s recent round of tariffs is already rippling out to exporters: Soybean farmers face plunging prices as China raises tariffs, Harley-Davidson will move production of motorcycles destined for the European Union out of the U.S., and BMW says foreign retaliation may hit exports from its South Carolina plant. Economists credit Abba Lerner, then a graduate student at the London School of Economics, for proving theoretically in 1936 that an import tariff was equivalent to a tax on exports. The Lerner Symmetry Theorem is considered a key principle of trade economics, like 19th century economist David Ricardo’s theory of comparative advantage. .The practical link was obvious to protectionists and free traders alike as far back as the 1600s, says Douglas A. Irwin, an economist and trade historian at Dartmouth College. They understood that a country that shuts out imports deprives its trading partners of money to buy exports. This, Mr. Irwin notes in his book “Clashing Over Commerce: A History of U.S. Trade Policy,” is why Americans were so divided over tariff policy in the 1800s. When Northern states succeeded in raising tariffs to protect their manufacturers, they angered Southern states who paid more for manufactured goods and suffered falling prices for their exports such as cotton and tobacco. Mr. Irwin’s data show that while exports and imports have varied between 3% and 25% of gross domestic product since 1790, the two tend to move together. The link was especially strong under the gold standard because trade imbalances were financed by gold flows. If the U.S. ran a trade surplus, gold would flow in, depriving foreigners of the means to purchase U.S. goods. Now that exchange rates float, the effect is less direct, and a country can pay for imports by borrowing in the capital markets, as the U.S. has since the late 1970s. Yet even now, exports and imports tend to rise and fall together, proof that the underlying relationship still holds. If the U.S., for any reason, cuts its imports from a trading partner, that country’s economy and currency both weaken, so it buys less from U.S. companies. If a tariff generated significant new demand for the protected American sector, the resulting boost to prices and jobs would put upward pressure on inflation, interest rates and the dollar, further hurting exports.

    Pipeline shortage could choke North America’s oil supply -In its annual five-year oil forecast published Monday, the IEA warned that Canadian oil pipeline constraints are part of a wider capacity crisis brewing across North America. “Colossal growth in North American supply from 2018 to 2023 raises the crucial question of whether there is enough pipeline capacity to transport and sell all of that oil. If sufficient capacity is not built, the increase in production we foresee could be at risk, with serious implications for global markets.” “During 2018-19, West Texas and West Canada are likely to face shortages in midstream capacity brought about by a rapid production increase,” the IEA said. “The situation will be much more severe in Canada than West Texas as legal delays mean capacity is unlikely to increase before the end of 2019.”

    Saudi refinery exports first gasoline barrels to U.S. (Reuters) - A refinery in Saudi Arabia has shipped its RBOB gasoline to the United States for the first time, a potential precursor for more deliveries to a region where prices are currently at seasonal three-year highs. The 400,000 barrels-per-day Jubail Satorp refinery, a joint venture between Saudi Aramco and French company Total, said in its verified Twitter account that it sent the shipment of reformulated blendstock gasoline - commonly called RBOB - to the United States. It did not say whether those barrels had arrived yet, and its exact destination was unclear. The shipment is unusual because when Satorp was founded in 2008, it was not expected to send RBOB to the United States, as Saudi gasoline demand remained strong, said Robert Campbell, head of oil products research at Energy Aspects in New York. Motor gasoline inventories in the United States fell to about 239 million barrels in the week to July 6, according to U.S. Energy Department data. Stockpiles were up from the same time last year, when inventories totaled 235.7 million barrels. Market participants expect the additional supply could slow U.S. inventory drawdowns. RBOB prices have been trading at seasonal three-year highs as crude has rallied in the midst of the busy U.S. summer driving season. Cash prices for the product in New York Harbor were at 2.00 cents per gallon above the futures benchmark on the New York Mercantile Exchange on Tuesday, the highest seasonally since 2015. The RBOB futures contract on NYMEX settled at $2.1603 a gallon on Tuesday. Energy trading companies often route vessels based on favorable spreads for crude oil and products, and right now moving gasoline to the United States is more profitable. But this shipment also could mean demand in Saudi Arabia is weakening, Campbell said. The shipment suggests that the Americas has become one of the best destinations for surplus gasoline, he added. “It’s tough because that means Asia really is quite significantly oversupplied,” Campbell said. 

     US jet fuel output soars amid record-breaking summer travel - This summer has seen oil prices at their highest levels in four years, but you would never guess that by looking at the statistics for US travel or jet fuel market fundamentals data. As Americans have taken to the skies in unprecedented numbers this summer, the US oil complex has churned out record-breaking amounts of jet fuel, supported by favorable production margins. In the first week of July, the S&P Global Platts assessment for the US Gulf Coast Brent crude to jet fuel cracking margin averaged $11.34/b, the highest that average has been since 2013 and about 31% above the previous four-year average of $8.63/b. Platts data shows that cracking margins in New York Harbor, Chicago and Los Angeles have followed similar patterns this year, which has helped lift US output to record levels. Nationwide jet production rose to 1.944 million b/d in the week that ended June 29, the highest that figure has ever been since the US Energy Information Administration began tracking it in 1982. This broke the previous all-time high set just a week earlier. The US Transportation and Security Administration said the Friday before Independence Day, June 29, was the second-busiest day in the history of the agency, with more than 2.67 million individuals screened at checkpoints nationwide, according to a July 3 notice. The week that ended June 30 was also the single busiest week for TSA screenings, and, combined with the two previous weeks, this amounted to the busiest consecutive 21 days on record, the TSA said.

    US Refineries Persist in Using Toxic Acid, Despite Safer Alternatives - Fifty refineries across the United States use hydrofluoric acid. Because this highly toxic substance can travel for miles in the form of a potentially fatal ground-hugging cloud, however, use of the chemical continues to prove highly controversial — rarely more so than now, given recent accidents at some of these refineries and potential rule changes that call into question the chemical’s long-term future in the oil refining industry. In January 2017, California regulators announced that they were taking steps to potentially phase out a modified version of the acid being used at the two refineries in the state, but the rule is still being thrashed out, and it’s too soon to say whether an outright ban on hydrofluoric acid will be enacted there. Hydrofluoric acid is used as a catalyst to transform crude oil into high-octane gasoline. If released into the environment in California, its ability to travel for miles would put at risk the densely populated neighborhoods surrounding both refineries in the South Bay region of Los Angeles. Proponents of the status quo warn of the costs associated with switching to alternative processes, which could mean gasoline price spikes and plants potentially shuttered. But Sally Hayati, president of the Torrance Refinery Action Alliance, a local community group pushing for hydrofluoric acid to be phased out, believes that industry is exaggerating the costs of moving away from the chemical, and warns of the potential consequences of allowing its continued use. The Air Quality Management District (AQMD) is “bending too much to political and economic pressure by the refineries, and they’re not paying enough attention to their mandate to protect public safety,” she said about the agency responsible for the rule change. “There’s no other solution other than to get rid of [hydrofluoric acid].”

    Oil’s New Technology Spells End of Boom for Roughnecks - After 20 years in the oil-and-gas industry, Eric Neece wasn’t surprised when he was laid off by GE Oil & Gas in Conroe, Texas, in 2015 after oil prices plummeted. He figured his job would come back when prices crept back up.He was almost right. The work came back. But Mr. Neece’s former job as a well logger—measuring well conditions thousands of feet underground—was gone. Those duties are increasingly being overseen remotely and handled by automation. Technology has already transformed labor needs in most of the world’s manufacturing. It’s now upending the energy business, foretelling the end for one of the last sectors in America where blue-collar workers could depend on jobs paying six-figure salaries. “Our industry has had a lot of people making $150,000 out in the field,” said Kathryn Humphrey, who spent two decades at BP PLC before retiring from the company’s digital oil field program in 2013. Those days are going away, she said.For Mr. Neece, the changes could reduce the number of jobs he used to do by more than 25%, analysts said. Automated control systems can send commands to underground tools that capture data on a well’s geologic formations, flow rate and other variables. Smaller teams of technical specialists located in remote operations centers are replacing laborers on the ground, who in the past made adjustments manually. The energy sector had been shielded from pressure to innovate by high oil prices. When prices fell 75% over 20 months beginning in 2014, oil and gas companies were finally forced to modernize to squeeze out profits. Many found they could use new technologies to do the work better and cheaper, with fewer people. They have invested billions of dollars on what the industry dubs “digital oil fields,” embracing artificial intelligence, automation and other technologies.

    A decade of fracking research: What have we learned? --  When oil and gas developers began using hydraulic fracturing to tap previously unaccessed sources of fossil fuels across the United States, the American public had a few questions. Will this process pollute drinking water? Will it cause cancer in the communities close to well sites? What are the ramifications for global climate change? Hydraulic fracturing — or fracking, as it is more commonly known — is just one small part of the broader process of unconventional oil and gas development. The extraction technique, popularized about a decade ago, has helped unlock hydrocarbons trapped in tight shale formations, spawning a vast web of rigs, wells and energy infrastructure across the country.  Every element of that network carries its own risks for water contamination, air pollution, health and climate change. Scientists have, in some cases, been able to distill the likelihood and severity of those risks. But not always.  "Those who have black-and-white views on this issue would be well served to look at the research and try to understand the other side's position," said Daniel Raimi, a University of Michigan lecturer and senior research associate at the think tank Resources for the Future (RFF). In his recent book, "The Fracking Debate: The Risks, Benefits, and Uncertainties of the Shale Revolution," Raimi addresses some of the most divisive questions about the shale boom, including "Will fracking make me sick?" and "Is fracking good for the climate?" (Energywire, Jan. 26). Many times the answer is: We don't know yet.

    Opponents speak out against anchor supports for oil pipeline (AP) — More than two dozen people spoke out at a public hearing against a proposal for more anchor supports in the Straits of Mackinac to bolster twin oil pipelines. Enbridge Inc. is asking the Department of Environmental Quality to allow installation of 48 additional supports for its Line 5 pipes. A public hearing Wednesday evening in Mackinaw City drew waterfront property owners, environmentalists and others. Line 5 extends from Superior, Wisconsin, to Sarnia, Ontario. A nearly 5-mile (8-kilometer) section runs beneath the straits, where Lake Huron and Lake Michigan converge. The company has made several requests to install supports after gaps were discovered beneath the pipes. The DEQ earlier granted a permit for 22 supports. Environmental groups want Line 5 decommissioned and say the supports wouldn't necessarily make it safer.

    Left Wing Activists Target New Mexico Officials In Brutal Fight Over Mundane Fracking Rule - Environmentalists in a small New Mexico county are ratcheting up the rhetoric against local fracking ordinances as government officials fear the fight is taking on new and terrifying dimensions.   Members of the state’s Sandoval County commission claim activists are haranguing them for contemplating rules permitting gas extraction. Documents also show activists are pressuring commissioners to block industry representatives from discussing future ordinances on natural gas production.“We got blasted by the public about being racists and baby killers,” Jay Block (pictured), one of the commission’s two Republicans, told The Daily Caller News Foundation, referring to insults people hurled at him during debates about gas exploration in the county. Block is in an untenable position, stuck in between an animated anti-gas movement and concerns about the county’s economic well-being. “The citizens are driving the narrative,” said Block, a conservative who worked for the Jack Kemp presidential campaign in 1987. “They are delivering misinformation to the public and not one time has the industry been invited,” he added, referring to the Citizens Watch Group (CWG), an activist group created after the commission voted down ordinances in 2017 following significant public outcry. The proposed ordinance would have banned drilling and fracking within 750 feet from homes, schools, hospitals, and fresh water supplies. It also required areas to be fenced and that operators provide certificates showing they have safe water use agreements. Any violations would result in a $300 fine.

    Oil and gas community says proposed ballot measure would ban fracking in Colorado -  — The debate on the topic of how far should oil and gas operations be from homes and schools could get a lot more intense if a proposed ballot measure in Colorado qualifies for the ballot. Currently, oil and gas operations cannot take place within 500 feet of a home or building and 1,000 feet from a school. “I really am concerned with the proximity of wells to homes and schools,” said Beth Ewaskowitz, a supporter of the campaign.Ewaskowitz, who lives in Erie, said she got involved in the signature gathering-effort after being concerned for her son’s safety.  “I counted it up and there are 156 wells within a one mile radius of our home, Ewaskowitz said. Ewaskowitz said 2,500 feet is not an arbitrary number; it is equivalent to a half-a mile or the typical area evacuated when something goes wrong. In order to make the ballot, more than 98,000 signatures are needed. Campaign organizers declined to say how close they are but one official said “they are on track to make the ballot.”The oil and gas community is preparing for a major and costly political fight should this qualify for the ballot.“I consider this to be a ban on oil and gas in Colorado,” said Dan Haley, president and CEO of the Colorado Oil and Gas Association.Haley, like all major energy groups, is opposed to the measure, believing more than $7 billion in economic activity would be lost if this would be approved — not to mention thousands of jobs. “This would be a huge hit on our economy, we are talking about 100,000 jobs over the next five years if this were to pass,” Haley said.

    North Dakota's Oil Tax Collections In June: 72% Higher Than Predicted -- July 13, 2018 - From "top North Dakota news stories" this week:Several categories of state tax collections are well above forecast, thanks largely to the resurgence in the state’s oil industry.The combination of higher oil prices and increased oil production has tax collections well ahead of the forecast made during the 2017 legislative session.North Dakota oil producers received an average of $61.11 per barrel during the month of April, with near-record production of 1.22 million bbl/day.Legislators forecast production at less than a million bbl/day at a price of $47.00/bbl, so tax collections for the month of June were 72% higher than predicted.Corporate and personal income tax, motor vehicle excise tax and sales tax collections are also running ahead of the budget forecast.The upside in the oil industry has been partially offset by lower commodity prices for grain and livestock. [Always something to complain about.]The surge in oil tax revenue, including a deposit of nearly $59 million in June, has pushed the state’s Legacy Fund balance to more than $5.5 billion. See 1Q18 taxable sales data here.

    Red Fawn Fallis sentenced in DAPL protest case - Red Fawn Fallis was sentenced Wednesday for her role in a shooting incident during the Dakota Access oil pipeline protests. Fallis will serve 57 months in federal prison for one count of civil disorder and one count of possession of a firearm and ammunition by a felon. The sentences will run concurrently. Fallis is also sentenced to three years of supervised probation after her release. Chief Judge Daniel Hovland also put special conditions on her supervised release including drug and alcohol treatment and treatment for mental health issues. Hovland said she would not get credit for time served in a halfway house after she was arrested in January for violating her pretrial release agreement. Hovland says he is recommending placement in Phoenix or Tucson, Ariz. Fallis spoke at her sentencing saying that she feels remorse and takes responsibility for her actions. She also says she is doing the best she can to move forward and operate in a way that is best for her and the community. Both sides can appeal the sentence within 14 days of the judgement being signed.

    Natural gas supply and consumption grow significantly from the first half of 2017 to the first half of 2018 - Natural gas supply and consumption have grown significantly from the first half of 2017 through the first half of 2018. According to data from PointLogic Energy, total natural gas consumption in the Lower 48 states averaged 87.4 billion cubic feet per day (Bcf/d) during the first half of 2018, which is 8.4 Bcf/d (11%) greater than during the first half of 2017. The total supply of natural gas averaged 84.8 Bcf/d during the first half of 2018, a 7.8 Bcf/d (10%) year-on-year change.Natural gas consumption in the first half of 2018 grew in all sectors compared with the year-ago levels:

    • The largest growth occurred in residential and commercial consumption, which rose by 3.7 Bcf/d (17%) compared to the first half of 2017. Residential and commercial consumption is primarily related to heating needs, and the beginning of 2018 experienced record, prolonged cold temperatures across much of the Lower 48 states.
    • The volume of natural gas used for electricity generation (power burn) during the first half of the year increased by 2.2 Bcf/d (9%) from 2017 to 2018.   the increased power burn may have resulted from the increased buildout of natural gas-fired power plants, continued coal-to-gas switching, and the use of electric heating during the cold weather.
    • The first half of 2018 saw an increase in exports over year-ago levels. Liquefied natural gas (LNG) exports and net pipeline exports to Mexico collectively increased by an average of 1.4 Bcf/d (23%) from the first half of 2017 through the first half of 2018.

    The increase in natural gas supply was driven by dry production, which rose 7.4 Bcf/d (10%) from the same period last year. Production increases were facilitated by the additional pipeline capacity brought into service since June 2017, including the Leach XPress, the Rover Pipeline, and Phase 1 of Atlantic Sunrise. Net pipeline imports from Canada increased slightly, likely related to the colder weather.Overall, consumption increased 0.7 Bcf/d more than supply. This market tightening was reflected in the large storage withdrawals this year and the current low levels of natural gas in storage relative to the five-year average.

    Natural gas-fired electricity generation this summer expected to be near record high -  EIA’s July 2018 Short-Term Energy Outlook (STEO) expects natural gas-fired power plants to supply 37% of U.S. electricity generation this summer (June, July, and August), near the record-high natural gas-fired generation share in summer 2016. EIA forecasts the share of generation from coal-fired power plants will drop slightly to 30% in summer 2018, continuing a multi-year trend of lower coal-fired electricity generation.  The share of electricity generation supplied by natural gas-fired power plants has increased over the past decade, while the share supplied by coal has fallen, primarily as a result of sustained low natural gas prices, increases in natural gas-fired capacity, and retirements of coal-fired generating capacity. Over the three-year period from 2015 to 2017, the cost of natural gas delivered to electric generators averaged $3.16 per million Btu (MMBtu), compared with $7.69/MMBtu between 2006 and 2008.  The combination of relatively low natural gas prices, environmental regulations, and supportive renewable energy policies has led the industry to build new natural gas-fired and renewable capacity and to retire coal-fired power plants. As reported on EIA’s Preliminary Monthly Electric Generator Inventory, power plant operators added 5.4 gigawatts (GW) of new natural gas-fired generating capacity during the first four months of 2018 with an additional 15 GW scheduled to come online through the end of the year. This addition would be the largest increase in natural gas capacity since 2004. The electric industry also added 2.6 GW of new utility-scale solar and wind generating capacity during the first four months of the year, with an additional 9.6 GW scheduled to come online by the end of 2018. More than 10 GW of coal-fired capacity was retired over the 12-month period ending April 2018. EIA forecasts the delivered cost of natural gas will average $3.16/MMBtu this summer, 2% lower than the average cost during the summer of 2017. In contrast, the cost of coal delivered to electric generators is forecast to rise slightly this summer. The continued low cost of natural gas, along with the recent additions of natural gas-fired capacity and retirements of coal power plants, drive EIA’s expectation that natural gas will contribute a growing share of electricity generation this summer, while coal's share will fall.

    Natural gas production records on the way, says US EIA, pointing to efficiency — The US Energy Information Administration raised its natural gas production estimates for the remainder of 2018 and continued to predict new production records for the year, as drilling efficiencies combine with higher output associated with oil production. Natural gas consumption was also expected to be higher for 2018 than 2017, driven by power sector use, according to the agency's July short-term energy outlook released Tuesday."The July outlook continues to forecast record production for US dry natural gas in 2018 and 2019," said EIA Administrator Linda Capuano. "Assuming the forecast holds, we will see production top 81 Bcf/d in 2018, and another increase that will push production up" to roughly 84 Bcf/d next year.The agency Tuesday raised by 0.71 Bcf/d to 89.83 Bcf/d its natural gas marketed production estimate for the US in the fourth quarter. It also raised its Q3 production forecast by 0.55 Bcf/d to 88.77 Bcf/d."The expected growth in natural gas production is largely in response to improved drilling efficiency and cost reductions, as well as higher crude oil prices that contribute to higher associated gas production from oil-directed rigs," the report said. Capuano noted that growth in production enables EIA's forecast of LNG and pipeline exports from the US to expand, while natural gas pipeline imports from Canada continue to decline."New infrastructure and increased exports from the Appalachia basin to the US Midwest and Canada are behind much of the decrease," Capuano said. The decrease was expected to continue as the Rover and Nexus pipelines add to deliveries of Appalachian basin gas to the Midwest and Eastern Canada. Turning to prices, EIA said that "higher natural gas production during the injection season will offset current and forecast low storage levels and will moderate significant upward price pressures in 2018." It lowered its forecast for Q3 Henry Hub natural gas spot prices by 2 cents to $2.99/MMBtu. The 2018 forecast stayed flat at 2.99/MMBtu, but the 2019 forecast dropped 4 cents from the previous month's estimate to $3.04/MMBtu. As to storage, the agency estimated that natural gas inventories are likely to increase at the five-year average rate of growth during the current injection season to reach 3.5 Tcf on October 31. That level would be 9% lower than the five-year average for the end of October.

    3 Reasons the Deadly Lac-Mégantic Oil Train Disaster Could Happen Again -- In the five years since the oil train disaster in Lac-Mégantic, Quebec, claimed 47 lives, the world has learned much about the risks that hauling oil by rail poses. One of the clearest lessons is how little has been done to address those risks, which means that deadly event could easily happen again.  [Read this explainer for background on what unfolded during the fiery early morning hours of July 6, 2013 in Lac-Mégantic.]  Here are three main reasons history may yet repeat itself.

    • Reason #1: Inadequate Safety Regulations. The Bakken shale oil carried on the runaway train that decimated the small Quebec town of Lac-Mégantic is a very light and highly volatile crude oil that ignites easily. Despite many calls for regulations in the U.S. to make that oil safer via a process known as stabilization—including from Obama's Secretary of Transportation Anthony Foxx, the issue of stabilizing oil volatility on trains remains unaddressed on either side of the border.Another apparent safety gap in regulations involves the outdated brake systems on oil trains, which is the case in both the U.S. and Canada. Rail experts have testified repeatedly that modern electronically controlled pneumatic (ECP) brakes would be a huge improvement over the current air braking system that was considered revolutionary in the 19th century. When the U.S. Department of Transportation released an overhaul of rules governing oil trains in 2015, ECP brakes were among the requirements. However, that measure was repealed in late 2017 due to intense industry pressure.
    • Reason #2: Oil Trains Derail More Often.  Another lesson revealed in the wake of Lac-Mégantic is that oil trains derail more often than similar trains carrying ethanol, another hazardous material. The reason is likely because oil trains tend to be longer andheavier and may be subject to more sloshing forces from the liquid moving inside the not-entirely-full tank cars. Unlike tanker trucks or other types of trains, oil trains don't have to be weighed, and some evidence indicates rail companies may be overfilling oil train cars beyond the current weight limits. And no regulations exist dictating the train lengths safe for transporting flammable materials like oil. Of course, longer and heavier trains make more money for railroads. A recent article in the Wall Street Journal notes that one of the reasons the rail industry is shifting to ever-longer trains is due to pressure from "activist investors."
    • Reason #3: The Rail Barons Are in Charge. Brian Stevens, National Rail Director for Unifor, Canada's largest private sector union, previously spent 16 years as an air-brake mechanic working on trains. Stevens summed up the problem: "Nothing has changed. The railway barons are still there. And stronger than ever." And while this statement was made by a Canadian at a conference in Canada about an accident in Canada, the rail barons are on both sides of the Canadian-American border.

    Vowing to Continue 'Fierce Opposition,' Protesters End 35-Hour Aerial Blockade of Trans Mountain Oil Tanker --Twelve protesters who spent nearly two days suspended from a bridge in British Columbia, blocking the path of an oil tanker, vowed Thursday to continue fighting Canada’s plans to buy Kinder Morgan’s Trans Mountain pipeline, after police forced them to end their demonstration.“I will remain the fierce opposition. It is in my blood to protect the water. Our Indigenous rights are being completely ignored, the safety of our water is being ignored, and most of all my son’s future is at stake. I will do whatever it takes to protect the water and my family and your family,” Will George, an Indigenous Coast Salish member, said in a statement after the protest ended.George was among the Greenpeace members—from all over Canada as well as the U.S., Mexico, and the U.K.—who rappelled from the Iron Workers Memorial Bridge for 35 hours to form a blockade preventing a Trans Mountain oil tanker from leaving Vancouver with tar sands oil.Canadian Prime Minister Justin Trudeau plans to purchase the existing Trans Mountain pipeline and Kinder Morgan’s expansion project, which carries crude and refined oil from Alberta to Canada’s western coast, costing taxpayers $4.5 billion. More than 200 people have been arrested in British Columbia for protesting the plan, which opponents say will put coastal communities at grave risk of oil spills and will threaten the area’s dwindling orca population with extinction. The plan also violates the U.N. Declaration of the Rights of Indigenous Peoples.

     How Fracking Companies Use Facebook Surveillance to Ban Protest - There’s a struggle going on between companies that want to drill for shale gas in the UK countryside and campaigners trying to stop them. Now, the struggle is waging online.Revelations about how Facebook data has been used to target individuals for political ends continue to emerge. But after the Cambridge Analytica scandal of earlier this year, the story has taken an unexpected twist: Facebook is being used by oil and gas companies to clamp-down on protest. Three companies are currently seeking injunctions against protesters: British chemical giant INEOS, which has the largest number of shale gas drilling licenses in the UK; and small UK outfits UK Oil and Gas (UKOG), and Europa Oil and Gas.Among the thousands of pages of documents submitted to British courts by these companies are hundreds of Facebook and Twitter posts from anti-fracking protesters and campaign groups, uncovered by Motherboard in partnership with investigative journalists at DeSmog UK. They show how fracking companies are using social media surveillance carried out by a private firm to strengthen their cases in court by discrediting activists using personal information to justify banning their protests.The material was submitted to support the companies’ case that campaigners intended to illegally disrupt their activities or trespass on their land. The companies all stress they do not seek to restrict lawful forms of protest, but argue that activists should not be allowed to unduly disrupt their lawful business activity.Anti-fracking campaigners have described the use of injunctions to stop protest around potential fracking sites as “an unprecedented restriction on our fundamental rights.” They say the injunctions against “persons unknown” are “draconian” and “anti-democratic.” 

    Decision to extend fracking licence a shambles, Labour says --  The Scottish Government has been criticised for extending a fracking licence owned by petrochemical giant Ineos.Ministers have decided to extend Petroleum Exploration and Development Licence (PEDL) 162 for a year until June 2019 despite an effective ban on the controversial gas extraction technique.The licence, jointly owned by Ineos and Reach Oil and Gas, covers an area of 400 km2 to the south west of Falkirk in the central belt.Friends of the Earth Scotland said the move added to “confusion” surrounding the government’s position on fracking while Scottish Labour branded it a “shambles”.Last month Ineos and Reach lost a legal challenge seeking a review of the government’s decision to effectively ban fracking development in Scotland, which they argued was unlawful.Refusing the challenge at the Court of Session, Lord Pentland found that while while ministers had described the position as a ban, there was in fact no legally enforceable prohibition.Friends of the Earth Scotland’s head of campaigns Mary Church said the decision to extend the licence was “disappointing”. She said: “Extending this licence risks adding to the confusion caused by Ineos’s recent legal challenge and only increases the pressure on the Scottish Government to move forward with its decision-making process, legislate to ban fracking and draw a line under this issue for good.

    Natural gas drillers are fighting for their lives-  The natural gas industry is on a mission to prove it can keep up with the green energy industry, whose price reductions are starting to become a competitive threat to fossil fuels.Gas and oil producers have slashed overheads by a third since 2014 and are finding deeper reductions harder to come by, according to energy consultants Wood Mackenzie. That’s spurring them to rewrite supply contracts, build mobile liquefied natural gas terminals and take more prosaic steps like fixing leaky pipes. “This is about getting affordable energy out,” said Jens Okland, executive vice president of marketing, midstream and processing at Equinor ASA, Norway’s biggest energy company. “A lot of these LNG projects are huge. You need to make them cheaper, quite simply.” Keeping gas affordable is a crucial ingredient of the world’s effort to shift toward less-polluting forms of energy, since it’s gas-fired power generators that can start and stop quickly, helping smooth fluctuations in supply coming from wind and solar farms. Its costs have to fall as cheaper wind turbines and solar panels make utilities scale back their most-expensive traditional power plants. And gas has plenty of competition even before the rise of renewables. For example, to compete with coal in Asia, gas imports need to land there at about $4 to $6 per million British thermal units. That’s about half the cost of reported contracts, according to the International Gas Union trade lobby. In Germany, solar and onshore wind power are already comparable to gas based on the value of electricity the assets generate over their lifetime, Bloomberg New Energy Finance data show. Expectations about costs are already influencing energy policy as governments decide how to balance supply needs against what voters are willing to pay for. Britain’s climate change adviser said last month the nation may need a fivefold increase in gas-fired plants by 2050 to guarantee power capacity -- a forecast that suggests a need for more investment at a time politicians are pressing for utilities to cut their bills to consumers.

    Beyond Nord Stream 2: A Look at Russia’s Turk Stream project --  Since 2015, Nord Stream 2 has been at the centre of all European discussions concerning the EU-Russia relations. But as endless political discussions in Europe are being held on this pipeline project, the pipes of another similar Russian pipeline project – Turk Stream – are already being laid by Gazprom at the bottom of the Black Sea. This piece looks at these developments, analysing their strategic impacts on Europe. Launched by Russia president Vladimir Putin in December 2014 during a state visit to Turkey, Turk Stream is a pipeline projected to deliver 31.5 Bcm/y of gas to Turkey and Europe. As in the case of Nord Stream 2, also this project is not aimed at carrying additional volumes of gas, but just to partially replace flows that currently reach Turkey and Europe through Ukraine.Turk Stream comprises two lines, each with a capacity of 15.75 Bcm/y. Line 1 is designed solely to supply Turkey, while Line 2 is intended to deliver gas to Europe.After a year of works, construction of the offshore part of Line 1 was completed on April 30th 2018; the onshore parts remain under works. With the construction of Line 2 also progressing, both lines of Turk Stream are expected to be finalised by the end of 2019.However, due to EU anti-monopoly rules Gazprom, as a supplier, is prohibited from operating gas pipelines inside the EU. The Russian company is thus currently exploring potential alternative options with European gas grid operators for bringing the 15.75 Bcm/y capacity of Turk Stream’s Line 2 to European markets. The first option would be to link Turkey and Austria with a pipeline running through Bulgaria, Serbia and Hungary. This pipeline has been dubbed ‘South Stream Lite’, as it would roughly follow the path of the proposed South Stream pipeline, which was scrapped by Russia in 2014 following opposition from the European Commission. The second option would be to link Turkey and Italy with a pipeline running through Greece. The feasibility study for such a pipeline was conducted in 2003 by Greece’s public gas supply company DEPA and Italy’s energy company Edison. The development of the project – named Poseidon – was then covered by an intergovernmental agreement signed in 2005 between Greece and Italy.

    Trump lashes Germany over gas pipeline deal, calls it Russia's 'captive' (Reuters) - U.S. President Donald Trump launched a sharp public attack on Germany on Wednesday for supporting a Baltic Sea gas pipeline deal with Russia, saying Berlin had become “a captive to Russia” and he criticized it for failing to raise defense spending more. Trump, meeting reporters with NATO Secretary-General Jens Stoltenberg, before a NATO summit in Brussels, said it was “very inappropriate” that the United States was paying for European defense against Russia while Germany, the biggest European economy, was supporting gas deals with Moscow. Trump was due to meet German Chancellor Angela Merkel at the summit later in the day and will meet Russian President Vladimir Putin in Helsinki on Monday. Berlin has given political support to the building of a new, $11-billion pipeline to bring Russian gas across the Baltic Sea called Nord Stream 2, despite qualms among other EU states. However, Merkel insists the project is a private commercial venture and is not funded by German taxpayers. “When Germany makes a massive oil and gas deal with Russia,” Trump said to Stoltenberg. “We’re supposed to be guarding against Russia and Germany goes out and pays billions and billions of dollars a year to Russia. “We’re protecting Germany, we’re protecting France, we’re protecting all of these countries. And then numerous of the countries go out and make a pipeline deal with Russia where they’re paying billions of dollars into the coffers of Russia. 

    Why Germany Can’t Buy Natural Gas From the US - True to form, President Trump, kicked off Wednesday’s NATO summit by tossing a grenade. This one was in German Chancellor Angela Merkel’s direction and aimed at the country’s dependency on natural gas imports from Russia.It’s not clear whether Trump’s goal in targeting Merkel this morning was to shame Germany into putting more money into NATO or to encourage the Germans to buy more natural gas from the United States. But if it’s the second, that will be very difficult to achieve. Germany currently receives about a third of its current 80 billion cubic meters of annual natural gas supply from Russia, nearly all transported by pipelines running through Eastern Europe. Europe as a whole consumed about 425 billion cubic meters of natural gas last year, of which about 150 billion cubic meters came from Russia.Russia’s state-controlled gas producer, Gazprom, next year is completing a new pipeline dubbed the Nord Stream 2 that detours around Eastern Europe by following a route under the Baltic Sea before reaching the German coast at the city of Lubmin, where construction of a new receiving terminal was begun in May. Once the new pipeline is in operation, it will deliver about 55 billion cubic meters of Russian natural gas annually to Germany, which would then distribute the gas to the rest of Europe.  Critics argue that the Nord Stream 2 is unnecessary and is a politically inspired move by Russia to avoid paying transit fees to Poland, the Baltic states and, most important, Ukraine for the right to transport natural gas through these countries on its way to Europe. Over half the gas Russia sends to Europe annually travels through Ukraine. For the U.S. natural gas to reach Europe, it must first be converted to liquefied natural gas (LNG), loaded on a special tanker and sailed from the U.S. Gulf Coast to a receiving terminal where it is reconverted into gas. Naturally this costs more than simply putting natural gas in a pipeline and sending it off. In addition, Qatar, Australia and other countries are way ahead of the United States in developing liquefaction facilities. In time the United States could sell more natural gas to Europe, but the sales probably will be limited to countries like Spain, Portugal and Turkey that have never received a lot of their supply from Russia. It is exceedingly doubtful that U.S. LNG will ever be a major source of supply to Germany.

    China is a key destination for increasing U.S. energy exports -- In recent years, as its domestic energy consumption has grown, China has become a more significant destination for U.S. energy exports. In particular, China has been among the largest importers of U.S. exports of crude oil, propane, and liquefied natural gas.  In 2017, more U.S. crude oil was sent to China than any other destination except Canada. China received more U.S. crude oil in 2017 than the third- and fourth-largest importers, the United Kingdom and Netherlands, combined. China has been the world’s largest net importer of total petroleum and other liquid fuels since 2013 and surpassed the United States as the world’s largest gross crude oil importer in 2017. Based on data through April, China’s imports of U.S. crude oil have continued to increase, averaging 330 thousand barrels per day (b/d) in 2018. In February 2018, China received more U.S. crude oil than any other destination. Nearly all of these crude oil exports were sent from the U.S. Gulf Coast region.  China was the third-largest destination for U.S. propane exports in 2017, behind only Japan and Mexico. Overall, about half of U.S. propane exports went to Asian countries in 2017, displacing supplies from Middle Eastern countries and some regional production of propane. Propane is used in many Asian countries as a feedstock for producing ethylene and propylene, building blocks for chemical and plastic manufacturing.  So far in 2018, China has remained the third-largest destination for U.S. propane exports, receiving 92 thousand barrels per day through April, or 31% less than U.S. propane exports to China in the first four months of 2017. As U.S. liquefaction export facilities have come online, the United States has exported greater volumes of liquefied natural gas (LNG), averaging 1.9 billion cubic feet per day in 2017. Of that amount, 15% went to China, making it the third-largest importer of U.S. LNG exports behind Mexico and South Korea. The next-largest importer, Japan, received about half as much U.S. LNG in 2017 as China. In 2017, China surpassed South Korea to become the second-largest importer of LNG in the world. Based on data through April 2018, China’s imports of U.S. LNG have averaged 0.4 billion cubic feet per day, behind only South Korea and Mexico. The next-largest importer of U.S. LNG, India, has received less than half as much U.S. LNG as China so far in 2018.

    China’s new air quality plan could increase LNG imports - Early this month, China’s State Council released a three-year “blue sky” action plan to curb air pollution by 2020—a plan that could have implications for the U.S. oil and gas industry. The latest plan extends to cities in the Fenwei plain in Shanxi, Shaanxi and Henan provinces, where air pollution is worsening. The target area for air pollution control and prevention now includes 28 cities—11 in Fenwei plain and provinces in the Yangtze River Delta. As air pollution in China spreads to more cities and inland provinces, he said the affected area is home to 37 percent of the country’s population and 41 percent of its gross domestic product. “The recently announced ‘blue sky action plan’ offers tougher limits and proposes a quicker shift to cleaner fuels such as LNG and electricity, and high-grade iron ore, coal and metals.” He noted that many of these commodities are not produced locally or at competitive prices. Therefore, Sharma believes they will need to be imported. “Additionally, a large portion of existing capacity will now require stricter supervision and environmental compliance,” he said. “As a result, we expect domestic costs to rise and production curbs to increase. “A ban on trucking to move raw materials from port to plant could be a game changer as it creates more competition between domestic supply and imports and strengthens the arbitrage relationship,” Sharma added. “China’s slow transition means uncertainty for commodity prices will continue” He stressed that China is on a track to tighten its fuel specification and vehicle emission standards. Under the current plan beginning Jan. 1 next year, a unified fuel specification standard will be enforced for road diesel, off-road diesel and bunker diesel. “Most giant refineries are geared to meet this challenge of supplying a uniform standard fuel from next year, but some small independent players may struggle,” Sharma said. “The current plan will impose more stringent supervision on fuel blending, which will further compress the marketplace for independent refiners and fuel blenders.” Sharma noted that China intends to develop a “green transport system” with higher fuel efficiency and lower emissions intensity. This would be achieved by increasing the share of railways and waterways and drastically reducing road transport. 

    Analysis: China's expanding underground gas storage may reduce LNG winter price volatility — The expansion of underground gas storage in northeast China could alleviate distribution network bottlenecks in the country's key winter demand centers, and help stabilize seasonal demand and price fluctuations in the wider Asian LNG markets. China's growing LNG consumption, driven by coal-to-gas conversion policies, GDP expansion and industrial recovery, have tightened Asian LNG fundamentals, with the Platts JKM averaging $9/MMBtu in first-half 2018, up from $6.30/MMBtu in H1 2017, after peaking at $11.70/MMBtu on January 15 -- its highest level since late 2014, S&P Global Platts data showed. The country's biggest underground gas storage is currently being built by Liaohe Oil Field Company, a subsidiary of state-owned CNPC, on the bank of the Bohai Bay, a strategic location and home to a natural gas pipeline network that connects China's heavily industrialized neighboring regions of Beijing, Tianjin and Hebei province, local media reported Wednesday. The underground gas storage being built at the Liaohe oil field will have total storage capacity of 20 Bcm, the equivalent of 14.5 million mt of LNG, in a space of just under 10,000 sq km. That is nearly half of China's existing gas storage capacity of 41.5 Bcm across around 25 locations.

    Chinese Refiner Halts US Oil Purchases, May Use Iran Oil Instead - With the US and China contemplating their next moves in what is now officially a trade war, a parallel narrative is developing in the world of energy where Asian oil refiners are racing to secure crude supplies in anticipation of an escalating trade war between the US and China, even as Trump demands all US allies cut Iran oil exports to zero by November 4 following sanctions aimed at shutting the country out of oil markets.Concerned that the situation will deteriorate before it gets better, Asian refiners are moving swiftly to secure supplies with South Korea leading the way. Meanwhile, Chinese state media has unleashed a full-on propaganda blitzkrieg, slamming Trump's government as a "gang of hoodlums", with officials vowing retaliation, while the chairman of Sinochem just become China's official leader of the anti-Trump resistance, quoting Michelle Obama's famous slogan "when they go low, we go high." Standing in the line of fire are U.S. crude supplies to China, which have surged from virtually zero before 2017 to 400,000 barrels per day (bpd) in July. Representing a modest 5% of China's overall crude imports, these supplies are worth $1 billion a month at current prices - a figure that seems certain to fall should a duty be implemented. While U.S. crude oil is not on the list of 545 products the Chinese government has said it would immediately retaliate with in response to American duties, China has threatened a 25% duty on imports of U.S. crude which is listed as a U.S. product that will receive an import tariff at an unspecified later date. And amid an escalating tit-for-tat war between Trump and Xi in which neither leader is even remotely close to crying uncle, industry participants expect the tariff to be levied, a move which would make future purchases of US oil uneconomical for Chinese importers. According to Japan Times, in a harbinger of what's to come, an executive from China's Dongming Petrochemical Group, an independent refiner from Shandong province, said his refinery had already cancelled U.S. crude orders. "We expect the Chinese government to impose tariffs on (U.S.) crude," the unnamed executive said. "We will switch to either Middle East or West African supplies," he said.

    U.S. oil exports to India soar ahead of sanctions on Iran (Reuters) - U.S. crude oil exports to India hit a record in June and so far this year are almost double last year’s total as the Asian nation’s refiners move to replace supplies from Iran and Venezuela in a win for the Trump administration. U.S. President Donald Trump’s administration has been pressuring its allies to cut imports of Iranian goods to zero by November and India’s shift advances the U.S. administration efforts to use energy to further its political goals. The United States has become a major crude exporter, sending 1.76 million barrels per day (bpd) abroad in April, according to the latest government figures. All told, producers and traders in the United States will send more than 15 million barrels of U.S. crude to India this year through July, compared with 8 million barrels in all of 2017. The exports to India could go higher if China imposes levies on its U.S. oil imports over the latest round of U.S. tariffs, which could damp Chinese purchases and lead U.S. crude prices lower. A. K. Sharma, head of finance at Indian Oil Corp (IOC.NS), the country’s top refiner, said U.S. crude is gaining appeal because of its lower cost, and could expand further if China cuts its imports of U.S. energy. “If China levies a tariff on U.S. oil then U.S. imports to India will probably rise,” he said. “We are looking for a mini-term deal to buy three to four cargoes of U.S. oil over a period of three to six months instead of buying single cargoes.” 

    BANK OF AMERICA: Oil is now a 'game of chicken' and completely cutting off Iran could send it soaring to $120 a barrel - Crude oil could surge to more than $120 a barrel, according to Bank of America Merill Lynch analysts, if the Trump administration were to order a complete cutoff of Iranian barrels before the end of the year. "Oil is now a game of chicken," the analysts wrote in a note Thursday. They said zero-tolerance sanctions on Iran — the fourth-largest oil producer — could add $50 per barrel to crude prices, which are up more than 25% this year. Brent, the international benchmark, is currently trading at around $77 a barrel. The State Department said this week that certain countries, including India and South Korea, will be allowed reduced flows of Iranian oil. And Saudi Arabia recently agreed to increase production by two million barrels per day, according to a White House statement.But analysts are skeptical Saudi Arabia will be able to keep up. The unofficial leader of the Organization of Petroleum Exporting countries has never pumped more than 10.6 million barrels per day on average over a single month, according to BAML."It appears the oil market has little confidence that Iran volumes can be easily replaced," the analysts wrote.The move is part of Trump's withdrawal from the Iran nuclear deal, which previously eased economic penalties on the country as long as it curbed its nuclear weapons program.The oil sanctions come after OPEC and other supply-cutting countries agreed at a summit in June to reduce compliance from more than 150% in May to about 100% starting this month. The cartel had previously been practicing over-compliance in efforts to tackle a global oil glut.But it is unclear if the new agreement will be able to balance supply as multiple producers — Venezuela, Libya, Angola, Mexico, or Nigeria — face major output disruptions. "Unlike in trade wars, oil price shocks have winners," the analysts wrote. "But these do not include the US, China, Europe, Japan."

    U.S. Allies Starved of Iran Oil Even Before Trump's Deadline -  Iranian oil shipments to some U.S. allies are being threatened even before America’s Nov. 4 deadline for buyers to curb imports and comply with renewed sanctions on the OPEC member. September-loading cargoes are set to be the last to head for Japan if the Asian nation doesn’t receive an exemption from the U.S., people with knowledge of the matter said. South Korea, meanwhile, is said to be facing problems with July shipments because of tanker-insurance and chartering issues, with buyers already shunning a form of oil known as condensate from the Persian Gulf state. A Taiwanese refiner is mulling ending purchases. The risk of disruptions sooner than early November signals how diplomatic allegiances are affecting the oil market after Donald Trump’s decision in May to reimpose restrictions on the Islamic Republic over its nuclear program. Close American allies such as South Korea and Japan are grappling with how to sustain their ties with the U.S. without jeopardizing their energy industry as well as their relationship with long-time crude supplier Iran. “We are in a knotty situation as we have to listen to the U.S., but at the same time Iran is an important supplier of crude and condensate,” said Kim Jae Kyung, a research fellow at Korea Energy Economics Institute. “It’s the Trump administration that we are dealing with, and that unpredictability is stoking concern among refiners and petrochemical companies in Asia, making them voluntarily cut their shipments from Iran before the deadline.” Japan, Iran’s third-biggest customer, imported 140,000 barrels a day of oil from the Middle Eastern nation in the first six months of this year, 32 percent more than for 2015, according to data from industry consultant FGE. South Korea, meanwhile, has cut shipments from Iran by 30 percent in the period to 81,000 barrels a day, while Taiwan has boosted purchases to 11,000 barrels daily this year from zero three years ago. A decision on what to do about imports from Iran by China and India, who together bought about 1.4 million barrels a day of Iranian crude over the past three months, will probably have a larger impact on the broader oil market.

    Iran Sanctions Are Different This Time -- The Trump administration is trying to replicate the Obama-era strategy of shutting in Iranian oil exports as a way to pressure the regime into making a series of concessions. But there are several reasons why Trump may not succeed. It isn’t that Trump’s sanctions won’t be as effective, despite the refusal of the rest of the international coalition to go along with Washington’s isolation campaign. In fact, even though the EU, in particular, is hoping to shield Iran from the wrath of the U.S. Treasury, international companies are packing up and leaving Iran and refiners around the globe are starting to cut their oil imports from Iran. So, yes, there is every reason to believe that the sanctions will have real bite. The main problem that could frustrate the Trump administration is the oil market, which is in a very different place than it was in 2012-2015. The oil market is tighter than it has been in years, which could ultimately force the U.S. to go easier on Iran than it would like. A cursory glance at oil prices for the period in which the Obama administration pushed sanctions on Iran shows elevated prices, which would lead one into thinking that the Obama administration also had to contend with a tight oil market. Brent crude routinely topped $100 per barrel during a time in which Iran saw around 1 million barrels per day of exports disrupted. Brent is now significantly lower than that, so Trump should have no problem cutting Iranian supply off once again, right? Not so fast. President Obama had the fortune of an exploding U.S. shale sector. It probably wasn’t obvious to the Obama administration what was unfolding in North Dakota and Texas when sanctions on Iran really started to hurt in 2012. U.S. oil production skyrocketed between 2012 and 2014, rising by over 3 mb/d, which more than compensated for the 1 mb/d of lost Iranian supply. To be sure, the Trump administration is also presiding over a shale boom. U.S. production is up about 1.6 mb/d since Trump took office, and output in 2018 has increased by around 400,000 bpd year-to-date. However, the problem for Trump is that Permian bottlenecks could mean that additional growth slows to a crawl, at least for the next year or so.

    Could Saudi Arabia replace all the barrels lost from Iran sanctions? Kemp (Reuters) - The United States wants to eliminate all Iran’s crude oil exports from November, and is relying on Saudi Arabia and other OPEC and non-OPEC members to fill the gap in supplies. "Our goal is to increase pressure on the Iranian regime by reducing to zero its revenue from crude oil sales," a senior State Department official told a news briefing this month. "   But if the United States succeeds in reducing Iran's crude exports close to zero from November, in line with its stated policy, Saudi Arabia would have to raise its production to unprecedented levels to cover the loss. And it would leave the global market tighter than at any time since the oil shocks of 1973/74 and 1979/80, with resulting upward pressure on prices. The administration has not been clear about whether sanctions will apply just to crude or will include condensates. But assuming sanctions apply only to crude, the global market would still need to replace more than 2 million barrels per day (bpd) of Iranian exports from the start of November. According to the latest information from the Joint Organisations Data Initiative (JODI), Iran exported between 2.1 million and 2.2 million bpd of crude between January and April. The question is where will the replacement barrels come from? The International Energy Agency estimates OPEC members held 3.4 million bpd of spare capacity at the end of May, while their non-OPEC allies had no more than 330,000 bpd ("Oil Market Report", IEA, June 2018). Saudi Arabia accounted for almost two-thirds of the reported OPEC spare capacity (2.02 million bpd), with smaller volumes held by Iraq (330,000 bpd), United Arab Emirates (330,000 bpd) and Kuwait (220,000 bpd). Russia accounted for most of the non-OPEC spare capacity (roughly 250,000 bpd) with little or no available spare capacity in the other non-OPEC allies. Other agencies and market analysts put the spare capacity figures for OPEC and non-OPEC members significantly lower than the IEA, which implies the market is even tighter. But using the IEA's figures, it is clear Saudi Arabia would have to replace most of the Iranian barrels lost as a result of sanctions. The kingdom would need to increase production and exports by at least 1 million bpd to cover the total loss of Iranian barrels. The required increase would be even higher if other OPEC and non-OPEC countries struggle to raise their output or more production is lost as a result of problems in Venezuela and Libya. 

    Do not blame OPEC, oil producer group says of Trump criticism (Reuters) - The president of OPEC defended the oil producer group on Monday against U.S. President Donald Trump’s recent demands for higher oil output, saying OPEC does not shoulder the blame. OPEC alone cannot be blamed for all the problems that are happening in the oil industry, but at the same time we were responsive in terms of the measures we took in our latest meeting in June,” Organization of the Petroleum Exporting Countries President Suhail al-Mazrouei told Reuters in an interview in Calgary, Alberta. “I feel OPEC is doing its part.” Trump has accused OPEC in recent weeks of driving gasoline prices higher and stepped up pressure on U.S. ally Saudi Arabia to raise supplies to compensate for lower exports from Iran. Washington has warned that it will impose sanctions on foreign companies that do business with Iran, in an effort to cut Iran’s exports of crude oil and condensates to zero from over 2 million barrels per day. Mazrouei said OPEC was willing to listen to major oil-producing countries, including the United States. OPEC agreed in June on a modest increase in oil production starting in July after its leader, Saudi Arabia, persuaded arch-rival Iran to cooperate, following calls from major consumers to curb rising fuel costs. Global oil prices LCOc1 have climbed steadily this year, helped by rising demand, and topped $80 per barrel in May for the first time in 3-1/2 years. 

    European Powers Prepare To Ditch Dollar In Trade With Iran - While the White House’s frenzied anti-Iran campaign has entailed unprecedented attempts to twist the arms of the United States’ traditional European allies, the pressure may be backfiring – a reality made all the more clear by Russian Foreign Minister Sergei Lavrov’s claims that Europe’s three major powers plan to continue trade ties with Iran without the use of the U.S. dollar.  The move would be a clear sign that the foremost European hegemons – France, Germany, and the United Kingdom – plan to protect the interests of companies hoping to do business with Iran, a significant regional power with a market of around 80 million people.Lavrov’s statement came as Trump insisted that European companies would “absolutely” face sanctions in the aftermath of Washington’s widely-derided sabotage of the six-party Joint Comprehensive Plan of Action (JCPOA).  On May 8, the former host of NBC’s “The Apprentice” blasted the agreement and said that the U.S. would reinstate nuclear sanctions on Iran and “the highest level” of economic bans on the Islamic Republic.Speaking in Vienna at the ministerial meeting of the JCPOA, Lavrov blasted the U.S. move as “a major violation of the agreed-upon terms which actually made it possible to significantly alleviate tensions from the point of view of the military and political situation in the region and upholding the non-proliferation regime.”  He added that “Iran was meticulously fulfilling its obligations” at the time that Trump destroyed the U.S.’ end of the agreement. Continuing, Lavrov explained:The Joint Commission... will be constantly reviewing options which will make it possible, regardless of the US decision, to continue to adhere to all commitments undertaken within the JCPOA framework and provide methods for conducting trade and economic relations with Iran which will not depend on Washington’s whims.  What they can do is to elaborate collectively and individually such forms of trade and settlements with Iran that will not depend on the dollar and will be accepted by those companies that see trade with Iran more profitable than with the US. Such companies certainly exist – small, medium and large.” Lavrov noted that the move wasn’t so much meant to “stand up for Iran” but to ensure the economic interests and political credibility of the European signatories to the accord.

    Bernstein: Oil May Jump Past $150 On Chronic Underinvestment - A supply shortfall is lurking should major oil companies continue to underinvest in exploring for new oil reserves, and this “chronic underinvestment” is setting the stage for the next super-cycle that could see oil prices soar to $150 a barrel or more, analysts at Sanford C. Bernstein & Co said on Friday.Investors clamoring for cash returns on their investments in lieu of increased capital expenditures may soon backfire, as new oil reserves may be unable to keep up with demand, according to Bernstein analysts.“Investors who had egged on management teams to reign in capex and return cash will lament the underinvestment in the industry,” the analysts said in a note, as carried by Bloomberg.“Any shortfall in supply will result in a super-spike in prices, potentially much larger than the $150 a barrel spike witnessed in 2008.”“If oil demand continues to grow to 2030 and beyond, the strategy of returning cash to shareholders and underinvesting in reserves will only turn out to sow the seeds of the next super-cycle,” said Bernstein.“Companies which have barrels in the ground to produce, or the services to extract them, will be the ones to own and those who do not will be left behind.”After the oil price crash of 2014, oil companies slashed exploration capital expenditure. Now that oil prices have recovered, those companies are looking to reward shareholders with dividends and share buybacks to show that they have successfully come out of the price slump. The lowered capex in exploration, however, is depleting the oil industry’s reserves and reserves replacement ratios. According to Bernstein, the reinvestment ratio in the industry is the lowest in a generation, which is setting the stage for a super-spike in oil prices; prices may even beat the record of $147 a barrel from 2008.

    Hedge funds target WTI, leaving other oil contracts becalmed (Reuters) - Hedge fund managers have continued to boost their bullish exposure to U.S. crude futures and options, following a longer-than-expected disruption of pipeline deliveries from Canada. Position-building in U.S. crude, also known as WTI, accounted for almost all changes in the petroleum complex in the week to July 3. Hedge funds and other money managers raised their net long position in the six most important petroleum futures and options contracts by 47 million barrels. Portfolio managers raised net their long position in U.S. crude (+41 million barrels) with minor increases in Brent (+4 million), U.S. gasoline (+4 million) and U.S. heating oil (+2 million). Net length in European gasoil was cut by 3 million barrels, according to an analysis of regulatory and exchange data ( ). WTI position-building is being driven by the draw down in inventories around Cushing and disruption of pipeline deliveries to the U.S. Midwest as a result of the stoppage in production at Canada’s Syncrude plant.   But the rest of the petroleum complex, including the international benchmark Brent, has shown no significant changes in recent weeks. Funds' net long position in WTI has surged by 116 million barrels in the two most recent weeks, while net length in Brent has been unchanged. Net length in WTI has closed the gap with Brent for the first time since June 2015, with managers holding a net long position of 457 million barrels in both benchmarks. Portfolio managers hold the most lopsided position in WTI since June 2014, when Islamic State fighters were racing across northern Iraq and threatening the country’s oilfields. Hedge fund long positions outnumber short positions in WTI by a ratio of almost 13:1, up from less than 6:1 two weeks ago. But away from WTI, there were no significant position changes.

    Oil prices finish higher, with Brent up sharply as traders weigh global supply disruptions - Crude-oil benchmarks finished higher Monday, with Brent crude posting a sizable gain as traders fretted over production disruptions in Libya and Venezuela and expectations for big declines in Iranian exports. August West Texas Intermediate crude, the U.S. benchmark, climbed by a nickel, or less than 0.1%, to settle at $73.85 a barrel on the New York Mercantile Exchange, after trading as low as $72.99. WTI prices lost 0.5% last week. September Brent crude added 96 cents, or 1.2%, to $78.07 a barrel on the ICE Futures Europe exchange, after closing on Friday with a weekly retreat of 2.7%. Longstanding, and expected, outages to supplies in Libya, Venezuela and Iran have helped lift crude prices, which had been on an uptrend amid efforts by the Organization of the Petroleum Exporting Countries and its allies to balance supply and demand. During a meeting last month, OPEC agreed to lift output globally by 1 million barrels a day to help counteract lost barrels from Venezuela and Iran, where the U.S. has pulled out of a nuclear agreement and threatened to reimpose sanctions targeting Tehran’s oil exports. Some countries, however, have voiced support for the Iran nuclear deal, easing concerns over the potential for lower exports from Iran. Top diplomats from Germany, Britain, France, Russia and China reaffirmed their commitment to the 2015 nuclear pact, according to a report from the Associated Press, citing comments from the European Union foreign policy chief.

    Crude futures settle higher on supply concerns— Crude futures settled higher Monday, supported by recent supply disruptions, both real and anticipated. ICE September Brent settled 96 cents higher at $78.07/b, while NYMEX August WTI settled 5 cents higher at $73.85/b. NYMEX crude was stronger further out on the curve, with the September contract settling 41 cents higher at $71.98/b and the October contract jumping 71 cents to close at $69.75/b. Production losses out of Libya, Venezuela and Canada have been supportive for the oil complex. According to Commerzbank commodities analysts, unscheduled outages in Libya and Canada will offset most of the announced increase in crude oil production, meaning that the oil market will remain tight in the short term. Moreover, "if shortfalls in Iranian oil supply due to US sanctions then compound the situation in the autumn, there is a risk of the market tightening further," Commerzbank analysts wrote in a daily note. "Brent should rise further toward the $80[/b] mark in the coming days," they added. US sanctions targeting Iranian oil exports will go into effect again in November, with some analysts saying more than 1 million b/d of Iranian crude production could be shut in. Tight takeaway capacity looks to be taking a toll on Permian Basin drilling activity and production. The Permian currently produces 3.5 million b/d of crude, and should stay fairly flat for the rest of 2018, according to S&P Global Platts Analytics. The 350,000 b/d Syncrude oil sands facility in Canada is expected to reach full production by early to mid-September, majority-owner Suncor said Monday.

    Barclays raises oil price view on tighter supply outlook - (Reuters) - British bank Barclays on Tuesday raised its outlook for oil prices for this year and next amid expectations of lower supply from Libya and Iran. “Due to new outages and a quicker Iran supply reduction, we see Brent and WTI prices averaging $71 per barrel and $65 per barrel next year,” the bank said. Barclays had previously forecast Brent to average $65 per barrel in 2019. The bank also raised its outlook for Brent prices to average $73 per barrel in the second half of the year from $70 earlier. Libya’s national oil production fell to 527,000 barrels per day (bpd) from a high of 1.28 million bpd in February following recent oil port closures, the head of the National Oil Corporation (NOC) said on Monday. The United States says it wants to reduce oil exports from Iran, the world’s fifth-biggest producer, to zero by November, which would oblige other big producers to pump more. Elsewhere, in Canada an outage at the 360,000-barrel per day (bpd) Syncrude oil sands facility had reduced flows into Cushing, Oklahoma where inventories hit a three-and-a-half-year low last week. While the WTI-Brent spread has narrowed since May due to the outage at Syncrude, it could widen again toward the end of the year to $7.50 in Q4, Barclays said. The bank also said the likelihood of Saudi Arabia increasing exports to the United States in the coming months could likely weaken the strong WTI backwardation. Oil prices have gained for most of 2018 on tightening supply and strong demand but investors fear a decision by the Organization of the Petroleum Exporting Countries to increase production may dampen price gains and offset production losses in countries including Libya. [O/R] “Indeed, OPEC’s decision and disruptions elsewhere will deplete the market’s spare capacity cushion, raising prices,”

    Bullish Sentiment Soars As Oil Outages Mount - Oil prices jumped in early trading on Tuesday on fresh concerns about supply outages. Strikes in Norway and Gabon knocked off more supply, Canada’s outage looks set to last longer than previously expected and the U.S. has reiterated its hardline stance on Iran. Brent jumped by more than 1 percent on Tuesday, putting it within reach of $80 per barrel.  Hundreds of workers in Norway have gone on strike after rejecting a proposed wage deal, disrupting production at least one offshore oil project – Royal Dutch Shell’s Knarr field. The disruption adds to the series of outages around the world and helped push up prices on Tuesday. “As a result of the strike, Knarr is closing its production in the Norwegian North Sea,” said Shell spokeswoman Kitty Eide.   Oil workers in Gabon began a 15-day workers strike at the facilities of Total due to wage demands. Gabon produces about 200,000 bpd.  OPEC’s president deflected blame over the recent surge in oil prices. “OPEC alone cannot be blamed for all the problems that are happening in the oil industry, but at the same time we were responsive in terms of the measures we took in our latest meeting in June,” OPEC president Suhail al-Mazrouei told Reuters. “I feel OPEC is doing its part.” The defense came in response to a series of accusations from U.S. President Donald Trump that OPEC has been manipulating oil prices.. U.S. sanctions are already starting to impact Iran’s oil exports as Asian refiners cutback ahead of the November deadline. South Korea is aiming to eliminate purchases in August, while Japan could cut off imports after September. “It’s the Trump administration that we are dealing with, and that unpredictability is stoking concern among refiners and petrochemical companies in Asia, making them voluntarily cut their shipments from Iran before the deadline,” Kim Jae Kyung, a research fellow at Korea Energy Economics Institute, told Bloomberg.   Syncrude Canada’s 350,000-bpd outage at its oil sands facility was expected to last through July, but restoration could take longer than expected. The facility could be brought back online in phases, and full output might not be achieved until September or October.  “Today, production is 527,000 barrels a day, tomorrow it will be lower, and after tomorrow it will be even lower and everyday it will keep falling,” Mustafa Sanalla, chairman of the Tripoli-based National Oil Corp., said in a video statement posted on the company’s Facebook page. Several key oil export terminals remain offline as the army commander that took them over has decided to put them under control of a rival NOC based in the east.

    WTI Extends Gains After Big Crude Draw  While Brent popped on Norway disruptions today, WTI has traded in a narrow range for two weeks as US crude production has flatlined for three weeks amid Permian pipeline bottlenecks. API

    • Crude -6.7mm
    • Cushing +1.952mm (-1.3mm exp)
    • Gasoline -1.59mm
    • Distillates -1.925mm

    A major crude draw was offset by a surprise build at Cushing... EIA raised its U.S. crude output forecast to 11.8m b/d in 2019 compared 11.76m b/d estimate in June report. Oil Prices have traded in a narrow range for the last two weeks with WTI hovering around $74 today ahead of the API data and extended the gains after the big crude draw... Geopolitical risks, shrinking spare-production capacity, and wariness that OPEC may renege on pledges to raise output are creating a “perfect storm” in crude markets, said Ehsan Khoman, an analyst at MUFG Bank Ltd.

    Crude Oil Prices Settle Higher Despite Prospect of Iran Sanction Waivers - – Crude oil prices settled higher Tuesday despite falling sharply from session highs on concerns that the loss of Iranian crude from the global market may not be as severe as many had anticipated. In the New York Mercantile Exchange crude futures for August delivery rose 26 cents to settle at $74.11 a barrel, while on London's Intercontinental Exchange, Brent climbed 84 cents to trade at $78.91 a barrel. Oil prices retreated sharply as U.S. Secretary of State Mike Pompeo said the White House would consider extending sanctions relief to some oil buyers of Iranian crude beyond the previously announced November deadline. Pompeo remarks were in sharp contrast to comments from the U.S. State Department just two weeks ago, warning countries to cut their imports of Iranian crude to zero by Nov. 4, or face sanctions. Investor fears that the loss of Iranian crude could be less than initially anticipated, reducing the prospect of a meaningful global supply shortage, overshadowed reports about a fresh supply outage. Shell's Knarr field in Norway was taken offline – which produces around 23,000 barrels of oil per day - after 669 oil rig workers in Norway went on strike Tuesday as wage talks failed. The disruptions in Norway exacerbated unplanned outages in Libya and Canada, which had already trimmed global inventories. Libya's national oil output has dropped to 527,000 barrels per day (bpd) from a high of 1.28 million bpd in February, the head of the National Oil Corporation said on Monday. WTI crude oil prices were also weighed down by expectations for a continued uptick in U.S. production. The U.S. Energy Information Administration raised its 2019 estimate on U.S. crude-oil production, according to the agency's July short-term Energy Outlook report released Tuesday.

     Saudi Oil Production Surges By Over 400,000 Barrels In June: OPEC -  The energy community was looking with particular interest to the latest, just released July OPEC monthly report, for signs of the promised - if only by Saudi Arabia - boost in oil output, and it got what it was looking for, if to a lesser extent than some had expected: in June, OPEC's collective oil production rose by 173Kb/d to 32.327MM, according to secondary sources. While the total production rose to the highest level in months, it was well below both year end 2016 and 2017 production, both of which were above 32.6MM as a result of production declines and stoppages among some key OPEC members. In June, Crude output was boosted mostly in Saudi Arabia, where it increased by over 400K to 10.420mmb/d, with Iraq, Nigeria, Kuwait and UAE also increasing their monthly production. On a self-reported basis, Saudi said it had boosted output by 459kb/d, bringing the total to 10,489mmb/d. Meanwhile, production declined in Angola as well as the two more troubled nations Libya, which has recently seen a sharp drop in output due to political infighting, and Venezuela, where the nation is grinding to a halt due to the ongoing economic collapse. That said, Libya may soon be returning to peak production with the NOC announcing overnight it had regained control of Eastern oil ports, with operations set to resume to normal levels “in a few hours.  Elsewhere in the report, OPEC's 2018 global oil demand growth forecast remained unchanged, forecast to increase by around 1.65mln bpd to average 98.85mln bpd. In 2019, initial projections indicate a global increase of around 1.45mln bpd, with annual average global consumption anticipated to surpass the 100mln bpd threshold. Non-OPEC oil supply (now excluding the Republic of the Congo) in 2018 was revised up from the previous MOMR by 140k bpd to average 59.54mln bpd; an increase of 2mln bpd Y/Y. OPEC also cautioned that U.S. refinery runs may drop from near-record level in coming month amid strong gasoline inventories, something we have seen in practice in recent weeks. "High gasoline inventories and weak refining margins, despite positive performances in the bottom of the barrel, are most likely going to pressure refinery runs from the current high levels in the coming month."

    OPEC’s oil output jumps in June as Saudi Arabia opens the taps - Saudi Arabia hiked its oil output in June to the highest level since the end of 2016, as it aims to cool the market after crude prices recently rose to 3½-year highs. The jump in Saudi supplies shows the world’s top crude exporter is making good on its recent vows to tame oil prices. The kingdom has faced pressure from big crude importers like China and India, as well as President Donald Trump, who worry about negative economic impacts from rising fuel costs. The increase also comes as OPEC forecast global oil demand will surpass 100 million barrels per day (bpd) next year. Saudi Arabia reported that it pumped nearly 10.5 million bpd last month, up from just more than 10 million bpd in May.

    International Energy Agency – Oil Market Report – Highlights:

    • Demand got off to a strong start this year with global 1Q18 growth at over 2 mb/d, helped by cold weather in the northern hemisphere. Recent data, however, point to a slowdown, with rising prices a factor. In 2Q18, growth slowed to 0.9 mb/d. In 1H18, growth will average 1.5 mb/d, falling to 1.3 mb/d in the second half of the year.
    • In 1H19, the comparison with a strong 1H18 will see growth of close to 1.2 mb/d, accelerating to 1.6 mb/d in the second half. We expect growth of 1.4 mb/d in world oil demand in both 2018 and 2019, unchanged from last month's Report.
    • Global oil supply rose by 370 kb/d in June mainly due to higher Saudi Arabian and Russian output as parties to the Vienna Agreement decided to achieve 100% compliance. OPEC crude production in June reached a four-month high of 31.87 mb/d. A surge from Saudi Arabia offset losses in Angola, Libya, and Venezuela.
    • Non-OPEC output is set to expand by 2 mb/d in 2018 and by 1.8 mb/d next year led by the United States, but there are temporary disruptions in Canada, Brazil, Kazakhstan and the North Sea.
    • OECD commercial stocks rose 13.9 mb in May to 2 840 mb, only the third monthly increase since July 2017. However, stocks gained only half as much as normal. At end-month, OECD inventories were 23 mb below the five-year average. Preliminary data show stocks falling in June.
    • Crude oil prices fell in June but since the Vienna Agreement meetings values for ICE Brent and NYMEX WTI have increased by 7% and 13%, respectively, on news of supply disruptions. In product markets, increased refinery output and signs of slowing demand put pressure on gasoline, diesel and jet fuel cracks.
    • Global refining throughput will grow by 2 mb/d from 2Q18 to 3Q18, with more than half of the increase in the Atlantic Basin. Runs are forecast to reach 82.8 mb/d, 0.7 mb/d higher than the previous record level in 4Q17. This could result in large crude stock draws, exceeding 1.4 mb/d. Refined product stocks will seasonally increase by 0.6 mb/d.

    OPEC/non-OPEC producer group achieved 100% cut compliance in June: IEA --Russia and Saudi Arabia raised their oil production by a combined 500,000 b/d, and OPEC crude output hit a four-month high of 31.87 million b/d in June, reflecting agreement on easing output cuts, the IEA said Thursday. In its monthly oil market report, the IEA also said Saudi Arabia had broken its output quota under the 2016 output pact among OPEC and non-OPEC countries, increasing its crude output by 430,000 b/d to 10.46 million b/d. It said the OPEC/non-OPEC group had achieved 100% compliance with the 2016 agreement, rather than the over-compliance of previous months. For OPEC members, compliance averaged 120% in June, while for non-OPEC members it was just 66%, it said. The IEA also raised its estimate of production growth by non-OPEC producers in 2019 to 1.8 million b/d, from 1.7 million b/d in its previous report, citing mainly US production prospects.

     WTI Jumps After Biggest Crude Draw Since 2016 - WTI was trading lower overnight after the bounce on API's big crude draw was eviscerated by escalating trade wars. However, when DOE reported a massive 12.63mm crude draw - the most since Sept 2016 - WTI prices spiked (after kneejerking lower first).Bloomberg's Michael Jeffers notes that American oil stocks are now at the lowest level since February of 2015, flying in the face of bumper production. The refineries are in overdrive for this time of year, even as utilization fell slightly. Exports are still over 2 million barrels a day.  DOE:

    • Crude -12.63mm (-3.79mm exp) - biggest draw since Sept 2016
    • Cushing -2.062mm (-1.3mm exp)
    • Gasoline -694k (-1mm exp)
    • Distillates +4.125mm - biggest build since Jan 2018

    Following last week's surprise crude build (from DOE), API reported a much bigger than expected crude drawBloomberg Intelligence Energy Analyst Fernando Valle notes that exports of refined products need to rise if crack spreads are to recover from recent lows. Rising crude prices have dampened demand growth just as red-hot refinery utilization has flooded domestic markets, pushing down margins.All eyes remain on US crude production which has now flatlined for 4 straight weeks...

    Crude Oil Prices Settle 5% Lower as Libya Resumes Exports, OPEC Output Jumps - – WTI crude oil prices settled sharply lower Wednesday, shrugging off a larger-than-expected draw in U.S. crude stockpiles as raising OPEC output, and the reopening of terminals in Libya dented investor expectations for a global supply shortage. On the New York Mercantile Exchange crude futures for July delivery fell 5% to settle at $70.38 a barrel, while on London's Intercontinental Exchange, Brent fell 6.7% to trade at $73.56 a barrel. Inventories of U.S. crude fell by 12.633 million barrels for the week ended July 6, confounding expectations for a draw of 4.489 million barrels, according to data from the Energy Information Administration (EIA). The large draw in crude supplies came as imports fell by 1.315 million barrels a day (bpd), and output remained roughly flat at 10.9 million bpd, the EIA said. The production shutdown at Canada's Syncrude - which has capacity to produce 350,000 bpd of oil – continued to weigh on North American crude supplies. Gasoline inventories – one of the products that crude is refined into – fell by 0.649 million barrels, missing expectations for a draw of 0.750 million barrels, while supplies of distillate – the class of fuels that includes diesel and heating oil – unexpectedly rose by 4.125 million barrels, against expectations for a build of 1.200 million barrels. The mostly bullish inventory report failed to lift sentiment amid investor concerns about an increase in global supplies as OPEC output increased last month, while Libya resumed export activities, which could see as much as 0.7 million bpd return to the market. OPEC output rose above 32.3 million bpd in June, up 173,000 bpd from the previous month, according to OPEC's monthly report. The increase was led by a rise in Saudi output to levels not seen since the output-cut agreement in 2016. Saudi Arabia reported that it pumped nearly 10.5 million bpd last month, up from about 10 million bpd in May. OPEC, in its monthly report, said it expects the pace of oil demand growth to slow, but still increase by 1.45 million bpd in 2019. The oil-cartel also said it expects non-OPEC production to rise by 2.1 million barrels in 2019, led by a surge in U.S. output.

       Brent stumbles as market resets after year-long rally: Kemp (Reuters) - Brent crude prices registered their largest one-day fall in more than two years on Wednesday, in what was probably an indication hedge fund managers and other traders are realising profits after a year-long rally. Front-month futures slumped by $5.46 per barrel, or just under 7 percent, a daily price move more than three standard deviations away from the mean, and the largest one-day decline since February 2016. The market has suffered a larger percentage decline on only 44 days since the start of 1990, and it comes after a long period in which price volatility has been very low by historical standards. Traders and analysts have blamed the sudden drop on a cocktail of factors, including the reopening of oil export terminals in Libya and the worsening trade dispute between the United States and China. There have also been hints the United States will grant at least some waivers for countries to continue importing Iranian crude, easing fears of an extreme supply crunch after sanctions are reimposed in November. Saudi Arabia also sharply increased exports in June and is expected to raise them further in July, helping relieve fears about future shortages. The most likely explanation is a combination of all these factors, coupled with stretched market positioning and a lack of liquidity. Brent has shown signs of topping out for some time, even as prices remain close to their highest since 2014 ( 

       Oil’s Perfect Storm Lays At Trump’s Feet - It’s becoming painfully clear that the way forward for global oil markets is going to be bumpy, very bumpy, particularly as we head into next year. Much of this uncertainty, even blame, is being increasingly leveled at a person that has surprised, flabbergasted and even shocked political opponents, allies and adversaries alike since he took office - President Donald Trump.A growing line of thought surmises that while Trump uses the presidential bully pulpit, in this case Twitter, to put pressure on long-time ally and de facto OPEC leader Saudi Arabia to get ready to pump more oil to keep (both oil and gas) prices from spiraling out of control, much of the blame for higher prices actually belong to Trump.The argument makes perfect sense. If Trump would ease back on both his heated rhetoric toward Iran, though that case could be made over much of Trump’s dealings with China, the EU, Canada and others, and if Trump would revisit his decision on re-imposing sanctions on Iran, then oil markets would benefit. Why? A softer line on Iran would reduce the worry or even fear that a loss of some 2.7 million barrels per day (bpd) of Iranian crude would roil oil markets so much that the Saudis would have to pump an unprecedented amount of oil, perhaps as much as 12.5 million bpd, eating up all of its spare capacity. The Saudi’s have never pumped more than around 10.7 million bpd of oil, a level reached in June, and has for more than 50 years kept at least 1.5-2 million bpd of spare capacity for oil market management.

      Libyan Supply Keeps Oil Prices Down - Oil prices held steady after Wednesday’s steep selloff, with the return of Libyan supply keeping prices in check despite reports of a tight global market.  The IEA said on Thursday that the oil market was tightening significantly and that even though higher production from OPEC was “very welcome,” it would cut into limited spare capacity, which could become “stretched to the limit.” Outages around the world are piling up and “we see no sign of higher production from elsewhere that might ease fears of market tightness,” the IEA wrote.   Oil prices have climbed over the last few weeks in large part because nearly 700,000 bpd was shut down in Libya. However, that changed this week when the National Oil Corp. moved to lift force majeure on several export terminals, and said that it would begin restoring the disrupted supply. Oil prices fell sharply on the news, declining by more than 6 percent on Wednesday.  If the oil market needs more oil, the OPEC+ coalition will provide it, according to Russia. “I can’t rule out that if there is a need for more than 1 million barrels we will be able to quickly discuss it all together and make all necessary decisions,” Russian energy minister Alexander Novak told reporters in Moscow on Friday. OPEC+ has “all needed tools,” if necessary, he said.   The chairman of Indian Oil Corp., the country’s largest refiner, warned that long-term demand is highly price sensitive. “Demand cannot be seen in isolation to prices, especially for a price sensitive market like India,” Sanjiv Singh said, according Bloomberg. “You may not see an impact on demand in the short term, but in the long term, definitely it will have implications.” India is one of the largest buyers of Iranian oil and the U.S. government has been urging India to cut back. India is starting to replace Iranian oil with crude from the United States. U.S. oil exports to India are expected to hit 15 million barrels year-to-date in July, up from 8 million barrels for the full year in 2017. Meanwhile, India’s imports of Iranian oil fell by 15.9 percent in June compared to a month earlier. After a few weeks of very tough rhetoric about Iran sanctions, U.S. Secretary of State Mike Pompeo signaled a softer line this week, noting that a lot of countries could request waivers. "We’ll consider it,” he said. High gasoline prices are likely putting pressure on the U.S. government to slow down on its campaign to shut in all of Iran’s oil exports.

      Iran says U.S.-caused oil spike will slow growth, add to tariff impact (Reuters) - A rise in oil prices caused by the United States’ sanctions policies will hurt economic growth in China, Europe and other consumers, much like President Donald Trump’s trade measures, a top Iranian official said on Thursday. Iran’s OPEC governor also told Reuters the rise in oil output by OPEC and its allies, after pressure by Trump to do so, was only 170,000 barrels per day (bpd) in June and would not grow much in 2019, also weighing on economic growth. While Trump has accused the Organization of the Petroleum Exporting Countries of driving up oil prices, Iran, OPEC’s third-largest producer, says the United States has caused this by imposing sanctions on Iran and fellow OPEC member Venezuela. “The higher oil prices Trump is causing are leading to a higher energy bill in the EU, Japan, China and India, impacting their economic growth just like the tariffs imposed upon them, also enabling Saudi Arabia and the UAE to pay their arms bill to the U.S.,” Iran’s Hossein Kazempour Ardebili said. The comments underline the still-simmering tensions after OPEC’s meeting last month, when the group agreed to return to full compliance with earlier agreed oil output cuts, after months of underproduction by OPEC countries including Venezuela. Saudi Arabia said the deal allowed countries able to produce more, such as itself, to go ahead and do so, to make up for shortfalls elsewhere. Iran strongly disagreed and criticized Saudi plans to boost output. Kazempour said Trump may be disappointed by the scale of the production increase so far and voiced scepticism Saudi Arabia and Russia could add much more oil in 2019. “These days Saudi Arabia are supplying out of stocks not additional production,” he said. “Russia is also unable to do much not even 200,000 barrels per day - all are talking few barrels next year and the world economy will shrink and all indexes will be down.” “The June versus May increase in OPEC and non-OPEC production was only 170,000 bpd. Does this surprise you, Mr President?” The International Energy Agency, in a report on Thursday, put the combined month-on-month increase at 230,000 bpd. 

      Crude Oil Prices Settle Lower as Traders Weigh Libyan Output Restart – WTI crude oil prices settled lower Thursday, as traders weighed the impact of increased supply from Libya against expectations that major oil producers may struggle to avert a global supply shortage. On the New York Mercantile Exchange crude futures for August delivery fell 5 cents to settle at $70.33 a barrel, while on London's Intercontinental Exchange, Brent rose 1.53% to trade at $74.52 a barrel. Oil prices were on the back foot for most of the session as Libya's National Oil Corp (NOC) said it would reopen four oil export terminals, denting some the supply-risk premium which had underpinned the recent run-up in oil prices. The International Energy Agency, however, raised expectations for a global shortage in crude supplies as the energy watchdog warned of a potential capacity crunch amid a rise in output from Middle East Gulf countries and Russia. "Rising production from Middle East Gulf countries and Russia, welcome though it is, comes at the expense of the world's spare capacity cushion, which might be stretched to the limit," the Paris-based agency said in its monthly report. Saudi Arabia increased production by 430,000 barrels a day in June, the IEA said. That, however, was offset somewhat by falling Iranian exports, as European traders trimmed their imports ahead of U.S. sanctions on Tehran, which come into effect in November. "In June, Iran's crude exports fell back by about 230,000 barrels a day, albeit from a relatively high level in May, as European purchases dropped by nearly 50%," the agency said. Also stemming losses in oil prices were reports of ongoing declines in inventories at the Cushing, Okla. delivery hub. Inventories at the Cushing, Okla. delivery hub had fallen 929,399 bpd from July 6 to July 10, Reuters reported, citing traders. This comes on a day after data showed inventories of U.S. crude fell by 12.633 million barrels for the week ended July 6, confounding expectations for a draw of 4.489 million barrels. 

       Spare Capacity: The Biggest Mystery In Oil Markets - With around 2.5 million barrels per day (mb/d) of Iranian supply targeted by the Trump administration, how will the oil market cope with the losses? Is there enough supply capacity to make up for the shortfall?There is a great deal of debate about the true extent of the world’s spare capacity. Or, more precisely, there are a range of guesses over how much surplus is located in Saudi Arabia, the one country that really has the ability to ramp up large volumes of supply on short notice.Saudi Arabia claims it could produce 12.5 mb/d if it really needed to. However, that claim has not been put to the test. Saudi Arabia’s all-time highest level of production was just over 10.7 mb/d in 2016, just before it helped engineer the OPEC+ production cuts.Adding around 2 mb/d of extra supply – as President Trump demands – is a tall order. “More recent history shows Saudi has never produced more than 10.6mn b/d on average over a single month. And even in the recent period, we have observed a steep decline in domestic Saudi oil inventories,” Bank of America Merrill Lynch wrote in a note, arguing that there is plenty of reason to question the notion that Saudi Arabia has around 2 mb/d of idled capacity. “Thus, it appears the oil market has little confidence that Iran volumes can be easily replaced.”The International Energy Agency estimates that there is around 1.1 mb/d of total global spare capacity that can truly be ramped up in a short period of time. A looser definition of spare capacity that encompasses the ability to add supply over several months puts the figure at about 3.4 mb/d, 60 percent of which is located in Saudi Arabia. Smaller additions come from the UAE, Kuwait, Iraq and Russia. The problem is that Saudi Arabia is already ramping up output to replace lost barrels elsewhere. Saudi Arabia added 500,000 bpd in June compared to a month earlier, putting output at 10.5 mb/d. But that increase only offset losses in Libya, Angola and Venezuela. In other words, Saudi Arabia had 2.5 mb/d of spare capacity at the start of June, proceeded to burn through 0.5 mb/d, but because of the losses elsewhere, the oil market saw no net increase in supply.

      Trump May Tap Up To 30MM Barrels From Oil Reserve To Halt Rising Gas Price - Having already yelled at OPEC on several prior occasions on Twitter with demands for Saudi Arabia and the rest of the OPEC cartel to boost production in order to push oil - and gasoline - prices lower.... only to realize that the amount of needed incremental output is next to impossible to achieve when considering the amount of Iran exports that will be curbed on November 4 when the Iran sanctions kick in officially, Trump has been left with two choice: ease off the Iran sanctions and implement them more gradually, or release oil from the US Strategic Petroleum Reserve. And now, with oil prices continuing to rise and pushing the price of gasoline to levels not seen in 4 years, at a critical time with November mid-term elections fast approaching, Trump appears to have decided on the latter, and is actively considering tapping into the nation’s emergency crude oil reserve, Bloomberg reported citing two people "familiar with the situation." While no decision has been made yet to release crude from the 660-million-barrel SPR stockade, options under review range from a 5-million-barrel test sale to a larger release of 30 million barrels. An even larger release could be possible it it were to be coordinated with other nations. For Trump, the magic number appears to be $3 per gallon on the national level; every time regular gasoline nears that round number, Trump has been quick to voice his displeasure. The average national price of unleaded gasoline rose to $2.89 Friday, an increase of 63 cents from where it was a year ago, per AAA data. The U.S. gasoline price average is expected to range between $2.85 per gallon and $3.05 per gallon through Labor Day, according to the group. Even an SPR release may not be sufficient to push prices lower, and analysts remain split on the effect such a release would have and how long it it last. Depending on its size and timing, an oil sale might leave the market unmoved, or have a real, if fleeting, impact on prices.

      US, Canadian Rig Count Rises After Tumultuous Week - Baker Hughes reported an increase to the number of active oil and gas rigs in the United States on Friday. Oil and gas rigs increased by 2 rigs, according to the report, with the number of active oil rigs staying at 863 for the week, while the number of gas rigs increased by 2, hitting 189.The oil and gas rig count now stands at 1,054—up 102 from this time last year, with the number of oil accounting for 98 of that 102.Canada gained 15 oil and gas rigs for the week, 13 of which were oil rigs. Canada’s oil and gas rig count is now up just 6 year over year. Oil rigs are up by 33 year over year in Canada, while the number of gas rigs are down by 27.Oil prices were trading up on Friday afternoon after a rather tumultuous week for the oil industry—a state of being that is quickly becoming the new norm as geopolitical forces, supply disruptions, and big inventory moves all make for a rocky market.In afternoon trading, both benchmarks were up, with WTI trading up $0.57 (+0.81%) at $70.90 at 12:45pm EDT and Brent trading up $0.88 (+1.18%) at $75.33. While both benchmarks are trading up on the day, WTI is trading down almost $3 since Monday. Brent is trading down more than $3 this week.  The normal market forces—Libya’s supply disruptions while the two NOCs duke it out over control of its oil, Venezuela’s inability to stop the steadily falling production declines, the escalating trade dispute between China and the United States, and serious inventory draws for crude oil—are all working to lift the price of oil. Likewise, Saudi Arabia’s production increases and OPEC’s prediction that 2019 demand growth may be lower than previously thought seeks to pull oil prices downwards.As for the oil production in the United States, which has been on a tear for all of 2018, seems to have leveled off a few weeks ago at 10.900 million bpd, where it has been for five weeks running. The 11 million bpd mark, should the United States hit this production level soon, will be an important psychological mark to surpass. At 8 minutes after the hour, WTI was trading up 1.08% at $71.09, with Brent trading up 1.26% at $75.39.

      Northeast, Haynesville Flat as Natural Gas Drilling Drives Small Uptick in Rig Count - The U.S. rig count inched higher during the week ended Friday, thanks to a small uptick in natural gas-directed drilling, though activity was flat in the largest gas-focused onshore plays, according to data from Baker Hughes Inc. (BHI). Two gas rigs returned to action during the week in the United States, putting the total number at 189, roughly in line with 187 rigs running a year ago. The total number of oil-directed units held at 863, but up from 765 a year ago. The net gains included one directional and one vertical unit. One rig was added on land, along with one in inland waters. BHI’s Gulf of Mexico tally increased by one to 19 for the week. Canada added 15 rigs for the week, 13 oil-directed and two gas-directed, to finish at 197 active units, up from 191 last year. The combined North American rig count finished the week at 1,251 units, versus 1,143 rigs in the year-ago period. Among plays, no major changes were reported for the week. The Permian Basin added a unit to finish at 476 (373 a year ago), while the Granite Wash saw one rig depart to finish at 15 (14 a year ago). One rig was added in the Cana Woodford, and a more detailed breakdown by NGI’s Shale Daily showed that rig is going to work in the STACK, aka the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties. The two domestic gas rigs added for the week did not reflect any changes to activity in the Northeast, as the Marcellus and Utica shales both finished flat at 53 and 23 units, respectively. The Haynesville Shale in Louisiana and Texas also finished flat at 49 rigs. Among states, Texas led gainers as it added two net rigs overall for the week to end at 528, up from 466 units this time last year. Colorado and Louisiana added one rig each. Alaska and Colorado each saw one rig exit the patch, according to BHI. 

      Oil prices rise, but post sharp weekly loss amid expectations for rising Libyan output - Oil prices climbed on Friday, but posted sharp losses for the week, as traders weighed concerns over resurgent Libyan supply and global trade disputes against indications of tighter crude supply and shrinking spare output capacity. August West Texas Intermediate crude, the U.S. benchmark, tacked on 68 cents, or 1%, to settle at $71.01 a barrel. The contract settled at $70.33 a barrel on the New York Mercantile Exchange Thursday—the lowest since June 25. Prices also briefly hit lows Thursday under $70 a barrel for the first time in over two weeks. It lost 3.8% for the week. September Brent crude, the international benchmark, added 88 cents, or 1.2%, to $75.33 a barrel on the ICE Futures Europe exchange. Its closing low of the week, $73.40 on Wednesday, was the lowest settlement since June 21. Brent closed out the week 2.3% lower. Prices for Brent had dropped by 6.9%, or more than $5 a barrel, on Wednesday alone, “as trade concerns, returning Libyan supply, and a potentially softer U.S. stance on Iranian oil sanctions all combined to chip away at the market’s overall upside risk,”    This week, Libya’s state-run National Oil Corp. cleared the way for a potential 700,000 barrels of oil a day flowing back into the global market.Market participants have been concerned by further trade tensions between China and the U.S. Also, Washington raised the possibility that allies could buy Iranian crude despite the reintroduction of sanctions, which would bring more oil into the market. Such worries outweighed a report from the Energy Information Administration, which said weekly U.S. crude supplies dropped by 12.6 million barrels in the week ended July 6 and stand at a bout 4% below the five-year average for this time of year. A report from the International Energy Agency on Thursday suggested that global spare production capacity could be pushed to its limit. “We’re still talking about a market that is potentially dangerously low in terms of spare capacity,” Fraser told MarketWatch.

       OPEC Output May Be Stretched to Limit by Supply Crises --OPEC’s Gulf members may need to pump almost as much crude as they can to cover swelling supply losses from Venezuela to Iran and beyond, the International Energy Agency said. Saudi Arabia might have to draw harder than ever before on its spare production capacity as a spiraling economic crisis in Venezuela, renewed U.S. sanctions on Iran and disruptions in Libya strain global markets, the agency predicted. “Rising production from Middle East Gulf countries and Russia, welcome though it is, comes at the expense of the world’s spare-capacity cushion, which might be stretched to the limit,” the Paris-based IEA said in its monthly report. “This vulnerability currently underpins oil prices and seems likely to continue doing so.”

      Russia seen adding 600,000 b/d of oil output by late 2019: analysts— Russian oil producers may be capable of increasing production by as much as 600,000 b/d within the next nine to 18 months if the country's agreements with OPEC and its partners allow, according to analysts. Following the decision in June by OPEC and its oil producing partners to boost output by 1 million b/d from levels in May, Russia has pledged to add an additional 200,000 b/d to the market. The return of Russian barrels is a key factor currently weighing on markets. "I think it is realistic to boost output by up to 600,000 b/d within the first half of 2019 -- but Russian companies will need to drastically intensify drilling to do so," said Mikhail Sheybe, an analyst from Sberbank CIB. The Energy Information Administration defines spare capacity as the volume of crude that can come on stream within 30 days and be sustained for at least 90 days. "We estimate that Russia will retain [roughly] 360,000 b/d of swing capacity at the end of 2018, as oil output ramps up by the agreed 200,000 b/d," a recent report by BofA Merrill Lynch Global Research said. "We expect Russian oil producers to accumulate additional [roughly] 140,000 b/d spare capacity by the end of 2019, bringing the total figure to 500,000 b/d." Russia's spare capacity has grown because oil producers continued to prepare major greenfield projects for full-scale development in anticipation of production caps being lifted at some point this year, analysts said. The country can produce more crude if required, Russian energy minister Alexander Novak said last month. His comments came amid concerns that OPEC countries may not be able to cover potential gaps in supply in the fourth quarter, expected as a result of looming US sanctions on Iran, sliding output from Venezuela and the latest slump in Libyan exports. Saudi Arabia and Russia hold the bulk of the world's current spare capacity. Because Russia has never deliberately reduced its output before, it's uncertain how quickly oil producers will be able to increase production. Key producers estimated they would need on average of between two to four months to restore barrels, while some sources said these forecasts were conservative. In June, Russia boosted its output by 89,400 b/d to 11.063 million b/d, as oil producers carried out tests to assess how quickly output could be increased.

      Why The Coming Oil Crunch Will Shock The World – Chris Martenson - Here's why I'm harping so much on strategy: the US is operating without a viable one.We neither have a compelling Vision of where we want to go, nor any sense of the Resources required to change with the many transitions underway around us. The current ‘strategy' (if we can be so generous as to call it that), is nothing more than "business-as-usual" (BAU).The US is assuming it is always going to have more cars and trucks on the road this year than last year, more goods sold, a larger economy, more jobs, and the world’s most powerful military. That’s the BAU model. And it has largely worked for the past century. But it can't work going forward. And the longer we pursue it, the more of our future prosperity we ruin. Why? Because the future of everything is dependent on energy. More specifically: net energy. In total, the US consumes over 7 billion barrels of oil each year. And that represents only 37% of the nearly 100 quadrillion of BTUs of America's annual energy consumption (the rest coming from natural gas, coal, and other sources). For comparisons sake, the rest of the world consumes another 450 quadrillion BTUs. And world energy demand just keeps on insatiably growing year over year. The (notoriously conservative) EIA predicts it will jump by 28% over the next two decades. The nations of the world have made the truly regrettable decision to build so much of their infrastructure using concrete reinforced with steel (re-bar, mesh, etc.). As I've explained in detail in previous articles, because the steel rusts over time, the concrete is busy being destroyed from the inside out -- something we can detect easily enough by the cracks and spalling (sheets flaking off) so readily apparent on every bridge that’s more than a couple of decades old.This has created a ticking time bomb. The world's crumbling concrete buildings, bridges and roadways will have to be entirely replaced in just 40 to 100 years of their original construction dates. Where will all of the energy come from for that?Also, note that China has poured more steel-reinforced concrete over just the past few years than the US did in the entire 20th century(!). All of this, too, will need to be replaced later this century.Given that the sand required for all of the world's *current* concrete projects is now in very short supply, where all the sand will come from for all that future concrete and cement work? Who ever thought we could run out of sand? But such are the unpleasant surprises that crop up during the late stages when running an exponential economic paradigm (i.e., "Growth forever!").

      800,000 expats have left Saudi Arabia, creating a hiring crisis: 'Employers say young Saudi men and women are lazy and are not interested in working' - Hit hard by the oil-price collapse, the kingdom is now experiencing a plunge in foreign investment and high levels of capital outflow as its de facto leader, MBS as he is commonly known, attempts to consolidate power and steer a new economic course. The uncertainty caused by his ambitious, some would say unrealistic, plans to modernise the economy has been further stoked by Saudi Arabia's apparent struggle to fill private sector jobs vacated by a growing exodus of expats. As of April, more than 800,000 had left the country since late 2016, alarming domestic companies concerned that the foreigners cannot be easily replaced.Their departure is part of MBS's attempt to wean the country off its dependence on oil through economic diversification, a significant element of which involves trying to persuade Saudis in undemanding state sector jobs — which make up two-thirds of domestic employment — and those out of work to take up the new vacancies. The authorities want to generate 450,000 openings for Saudis in the private sector by 2020.MBS has sought to expedite the exodus of foreign workers, who constitute about a third of the population, by stepping up the process of so-called Saudisation — essentially the creation of a more productive local workforce. He is hiking up levies on companies employing non-Saudis, requiring foreigners to pay fees for dependents, and restricting the sectors in which they can work, with employment in many areas of the retail and service industries now strictly confined to Saudis. The measures are said to be driving the expat exodus, evident in the marked downturn in the rental real estate market and empty shopping malls.While among high-earning Western professionals Saudi Arabia has long been viewed as a hardship posting compensated by their tax-free status, the majority of foreigners in the country are from the Middle East and Asia, many employed in low-paid jobs in the sectors now earmarked for Saudis.But Saudi business owners are having difficulty getting locals, accustomed to undemanding work in the state sector and generous unemployment benefits, to work for them. Reports suggest many Saudis are put off by what they regard as poorly paid, low-status jobs. The recruitment problems have seemingly sparked so much concern that they have been played out on the pages of the Saudi Gazette, the government's mouthpiece, which normally features anodyne stories about life in the kingdom.

      Assault on port of Hodeidah resumes as US escalates Yemen intervention - At least 165 people were reportedly killed over the weekend as fierce fighting resumed south of the port city of Hodeidah, which serves as a lifeline for three-quarters of the population of Yemen, a country that depends upon imports for 90 percent of its food, fuel and medicine.A force consisting of troops of the United Arab Emirates, Sudanese soldiers and Yemeni mercenaries, backed by Saudi air power, began an offensive to take the strategic Red Sea port last month.The UAE announced a pause in the fighting, supposedly to allow for negotiations by UN Special Envoy Martin Griffiths over a plan to turn the port over to UN control as part of a cease-fire agreement. The port and the city of Hodeidah are currently held by the Houthi rebels, who control Yemen’s capital of San’aa as well as the most populated areas of Yemen in the country’s northwest.The UAE, the oil sheikdom that has played a major role in ground fighting since it joined Saudi Arabia in attacking Yemen in March 2015, had initially rejected any agreement outside of an unconditional surrender by the Houthis. The pause in the fighting followed fierce battles in which the UAE-led forces suffered serious losses while gaining little territory. The Houthis inflicted casualties as well as destruction of tanks and armored vehicles of the invading force, including through the use of armed drones and landmines.While the UN envoy Griffiths has held talks with both the Houthis and the UAE and is scheduled to meet today with President Abed Rabbo Mansour Hadi, a stooge of US and S audi Arabia, who lives in self-imposed exile in Riyadh, a full-scale battle for the port city appears to be resuming.

      UAE and US guilty of war crimes in Yemen torture centers, Amnesty charges --The United Arab Emirates (UAE) and mercenary forces operating under its command have carried out widespread forced disappearances, torture and murder of Yemenis suspected of opposing the more than three-year-old intervention by the oil-rich Gulf state in alliance with Saudi Arabia and Washington.This is the conclusion drawn by the human rights group Amnesty International after interviewing at least 75 people, including families of the disappeared and detained, survivors of the UAE torture centers, lawyers, journalists and local officials in Yemen.Amnesty concentrated its investigation on 51 cases, typical of the untold hundreds if not thousands who have been swept up into the UAE detention and torture apparatus. Nineteen of these individuals remain missing, their whereabouts unknown to their families amid fears that some of them may have died in captivity.The report outlines the stark political contradictions underlying the UAE’s repressive operations in Yemen. While intervening in the country as part of a Saudi-led coalition whose ostensible aim is the restoration to power of President Abd-Rabbu Mansour Hadi, the Saudi puppet who was overthrown by Houthi rebels in January 2015, the UAE is clearly pursuing its own interests in the region.“The UAE had been bypassing Hadi government officials in dealing with security issues, at times prompting President Hadi and his supporters to criticize the UAE for behaving like an occupier,” the Amnesty report states. This statement was substantiated on Monday when the “interior minister” designated by President Hadi, who remains in self-imposed exile in Riyadh, held a meeting in the southern Yemeni port city of Aden with a top UAE official, calling on Abu Dhabi to shut down or hand over the prisons it runs in southern Yemen. The UAE has been working in collaboration with southern secessionists, who oppose the re-imposition of Hadi’s rule over the region, as well as with a network of militias and mercenaries that it is arming and financing. Its aim is to assert control over a series of bases bordering the strategic waterways linking the Red Sea with the Indian Ocean, most importantly the Bab el-Mandeb Strait, through which much of the Middle East’s oil bound for Asia is shipped.

      Israel acknowledges US-Saudi nuclear deal but presents its ‘red lines’: report - Israel has presented its “red lines” to President Donald Trump regarding nuclear reactors that the US is helping Saudi Arabia build, Israel's Channel 10 reported on Sunday. According to the report, Israeli Prime Minister Benjamin Netanyahu dispatched Energy Minister Yuval Steinitz to the US two weeks ago to meet his American counterpart Rick Perry to discuss Israel’s concerns and “red lines” regarding a multi-billion nuclear deal between the US and Saudi Arabia revealed in March. Among the parameters reportedly presented by Steinitz was a "no surprises policy" that would assure Israel of full transparency, meaning informing it of the specific nuclear equipment Saudi Arabia receives from the US. Israel is also reportedly insisting on knowing the exact locations of Saudi nuclear reactors in addition to receiving assurance that Riyadh will not get the “capability or the legitimacy” to enrich uranium on its soil. The Saudis, however, are expected to ask the US for its permission to enrich uranium, the report said. 

      Facing Threats at Home and Abroad, Iran’s President Takes a Harder Line - For much of his presidency, Hassan Rouhani has been at loggerheads with Iran’s military and conservative establishment, as he forged diplomatic ties with the West to break his country’s international isolation. But now with his political survival in question, Mr. Rouhani is sounding a lot like Iran’s hard-liners. During a visit to Switzerland last week, Mr. Rouhani responded to U.S. plans to enforce a global freeze on Iranian oil exports by threatening to disrupt the flow of Middle Eastern oil through the Persian Gulf. It was seen as a warning to the world that Iran could block the Strait of Hormuz, a waterway for about one-third of global seaborne oil trade—a threat made before by Iran’s military, but not by this president.Iran’s military leaders, whose powers Mr. Rouhani has tried to curb, were suddenly praising the politically moderate president. “I kiss your hand for expressing such wise and timely comments,” Maj. Gen. Qassem Soleimani, commander of the Revolutionary Guard’s elite Quds Force, said in an open letter to Mr. Rouhani that grabbed state media headlines. Gen. Soleimani, who is one of Iran’s most powerful military figures, added: “I am at your service to implement any policy that serves the Islamic Republic.” Mr. Rouhani’s political pivot comes at a time of crisis for his government. After President Donald Trump’s withdrawal in May from the multinational agreement that checked Iran’s nuclear program in return for lifting sanctions, Mr. Rouhani’s bridge to the West is in danger of collapsing while a flailing economy has triggered protests. Banks and investors are heading for the exits. Mr. Rouhani’s 2013 election had ushered in hope among his supporters of shedding Iran’s status as international pariah. Mr. Rouhani had staved off pressure from political forces opposed to diplomatic outreach—until now. “Rouhani made a huge concession” to hard-liners, said Scott Lucas, an Iran expert and professor at the University of Birmingham. “This is the hardest line he has come out with, aiming at the Americans.” To some who supported Mr. Rouhani’s candidacy, the tough rhetoric is jarring. “We voted for Mr. Rouhani because he promised to open the doors for international relations. Threatening to close the Strait of Hormuz is not reasonable and is not moderate,”  “We don’t want to get isolated again.” 

      The €300 million cash withdrawal - The eyes of the world are on one of history's largest cash withdrawals ever. Earlier this week, the Central Bank of Iran ordered its European banker, Hamburg-based Europaeisch-Iranische Handelsbank AG, to process a €300 million cash withdrawal. Germany's central bank, the Bundesbank, is being asked to provide the notes. If the transaction is approved, these euros will be counted up, stacked, and sent via plane back to Iran. German authorities are still reviewing the details of the request. Iran claims that it needs the cash for Iranian citizens who require banknotes while travelling abroad, given their inability to use credit cards, says Bild. Not surprisingly, U.S. authorities are dead set against the €300 million cash transfer and are lobbying German lawmakers to put a stop to it. They claim the funds will be used to fund terrorism.The picture below illustrates $1 billion in U.S. dollars, so you can imagine that €300 million in euro 100 notes would be about a third of that. That's a lot of paper. The fate of this transaction is important not only for Iran but the rest of the world. It gives us a key data point for answering the following question: just how resistant is the global payments system to U.S. censorship? If a payments system is censorship resistant, third-parties do not have the power to delete a user or prevent them from accessing the system. If the U.S. can unilaterally cut off any nation from making cross border payments, then the global payments system isn't censorship resistant. We already know that the global payments system is highly susceptible to U.S.-led censorship. From 2010-2015, Barack Obama successfully severed Iran from the world's banks, driving the nation's economy into the ground and eventually forcing its leaders to negotiate limits to their nuclear plans.

      Iran's Revolutionary Guard Says "Awaiting Orders" To Attack Israel Ahead Of Putin-Netanyahu Summit - Though by many accounts the situation in Syria's south is stabilizing as the government is fast securing the border with Jordan after a major offensive against FSA, al-Qaeda, and ISIS factions in the region, the possibility for further clashes between Israel and Damascus remains high, as we previously warned here. In the past months there's been widespread reporting on a "secret" deal brokered between Russia, Israel, and Syria, which reportedly involves the Syrian Army agreeing to keep Iranian forces away from the ongoing campaign along the Israeli and Jordanian borders, especially the contested Golan Heights. However, Israeli media has this week highlighted statements by a top Islamic Revolutionary Guard Corps (IRGC) commander that suggests further open hostilities between Israel, Syria, and pro-Iranian forces could break out at any moment as the IRGC has vowed to "break" Israel's presence, especially along the Golan. Ahead of a summit between Israeli Prime Minister Benjamin Netanyahu and Russian President Vladimir Putin set to be held Wednesday (July 11) in Moscow, Netanyahu reiterated what will likely be a key demand as he meets face to face with Putin: “We will not tolerate the establishment of a military presence by Iran and its proxies anywhere in Syria – not close to the border and not far away from it,” he told reporters over the weekend.  In a recent speech, IRGC deputy commander Hossein Salami boasted of the creation of an “Islamic army” near the Israeli-occupied Golan Heights, which he warned threatened to “end” Israel.“Today, an international Islamic army has been formed in Syria, and the voices of the Muslims are heard near the Golan,” Salami said, as quoted by the Times of Israel.“Orders are awaited, s o that…the eradication of the evil [Israeli] regime will land and the life of this regime will be ended for good. The life of the Zionist regime was never in [so much] danger as it is now,” the officer added.

      This Is What Modern War Propaganda Looks Like -  Caitlin Johnstone - I’ve been noticing videos going viral the last few days, some with millions of views, about Muslim women bravely fighting to free themselves from oppression in the Middle East. The videos, curiously, are being shared enthusiastically by many Republicans and pro-Israel hawks, who aren’t traditionally the sort of crowd you see rallying to support the civil rights of Muslims. What’s up with that? Well, you may want to sit down for this shocker, but it turns out that they happen to be women from a nation that the US war machine is currently escalating operations against. They are Iranian.Whenever you see the sudden emergence of an attractive media campaign that is sympathetic to the plight of civilians in a resource-rich nation unaligned with the western empire, you are seeing propaganda. When that nation is surrounded by other nations with similar human rights transgressions and yet those transgressions are ignored by that same media campaign, you are most certainly seeing propaganda. When that nation just so happens to already be the target of starvation sanctions and escalated covert CIA ops, you can bet the farm that you are seeing propaganda. Back in December a memo was leaked from inside the Trump administration showing how then-Secretary of State, DC neophyte Rex Tillerson, was coached on how the US empire uses human rights as a pretense on which to attack and undermine noncompliant governments. The propaganda machine doesn’t operate any differently from the State Department, since they serve the same establishment. US ally Saudi Arabia is celebrated by the mass media for “liberal reform” in allowing women to drive despite hard evidence that those “reforms” are barely surface-level cosmetics to present a pretty face to the western world, but Iranian women, who have been able to drive for years, are painted as uniquely oppressed. Iran is condemned by establishment war whores for the flaws in its democratic process, while Saudi Arabia, an actual monarchy, goes completely unscrutinized. This is because the US-centralized power establishment, which has never at any point in its history cared about human rights, plans on effecting regime change in Iran by any means necessary. Should those means necessitate a potentially controversial degree of direct military engagement, the empire needs to make sure it retains control of the narrative.

       Lebanese tourist sentenced to eight years in prison for Facebook post against Egypt -- A Lebanese tourist who was arrested last month for posting a video on Facebook complaining of sexual harassment and conditions in Egypt was sentenced to eight years in prison by a Cairo court on Saturday, her lawyer told Reuters.  Mona el-Mazboh was arrested at Cairo airport at the end of her stay in Egypt after a 10-minute video in which she called Egypt a "son of a bitch country" went viral on social media. The 24-year-old Mazboh complains of being sexually harassed by taxi drivers and young men in the street, as well as poor restaurant service during the holy month of Ramadan and an incident in which money was stolen from her during a previous stay. A Cairo court found her guilty of deliberately spreading false rumours that would harm society, attacking religion, and public indecency, judicial sources said. An appeal court will now hear the case on July 29, according to Mazboh's lawyer, Emad Kamal.

      OPCW Issues First Report Of ‘Chemical Weapon Attack’ in Douma --On April 7 2018 Syrian 'rebels' claimed that the Syrian government used chlorine gas and Sarin in an attack on the besieged Douma suburb near the Syrian capital Damascus. They published a series of videos which showed the dead bodies of mainly women and children.During the night the incident allegedly happened Douma was hit with artillery and air strikes in retaliation for earlier deadly attacks by some 'rebels' splinter groups on Damascus city. Jaish al-Islam, the main 'rebel' group in Douma, had already agreed to leave towards Idleb governorate.The claim of the 'chemical attack' was made shortly after U.S. President Trump had announced that he wanted U.S. troops to leave Syria. It was designed to "pull him back in" which it indeed did. Moon of Alabama published several pieces on the issue: (linked list)It seemed obvious from the very first claims of the 'gas attack' that it did not happen at all. The Syrian government had no motive to use any chemical weapon or an irritant like chlorine in Douma. It had already won. The incident was obviously staged, like others before it, to drag the U.S. into a new attack on Syria. Today the Organisation for the Prohibition of Chemical Weapons (OPCW) published an interim report and some technical results: OPCW designated labs conducted analysis of prioritised samples. The results show that no organophosphorous nerve agents or their degradation products were detected in the environmental samples or in the plasma samples taken from alleged casualties. Along with explosive residues, various chlorinated organic chemicals were found in samples from two sites, for which there is full chain of custody. .The "Sarin" organophosphate use the 'rebels' claimed is thereby debunked. No degradation products of such chemicals were found. The "various chlorinated organic chemicals" are unsurprising. Chlorine is widely used for water purification and cleaning and "chlorinated organic chemicals" will be found in any household.

        "No Nerve Agents" In Douma: OPCW Report Demolishes White House Sarin Narrative - A preliminary report published Friday by the Organization for the Prohibition of Chemical Weapons (OPCW) found no traces of any nerve agent at the site of a suspected chemical attack in the Syrian city of Douma. The OPCW report states this unambiguously as follows:"No organophosphorous nerve agents or their degradation products were detected in the environmental samples or in the plasma samples taken from alleged casualties."Compare the newly published official OPCW findings with the 5-page White House assessment released on April 13th, just days after the alleged attack. Now contradicted by the new OPCW findings, the White House asserted that sarin was used at DoumaA significant body of information points to the regime using chlorine in its bombardment of Duma, while some additional information points to the regime also using the nerve agent sarin. Firebrand British MP George Galloway responded as follows moments after the OPCW's findings were made public: Was that, was that the news? What about Douma? The chemical weapons attack? The nerve agent bombs that rained down on Douma that took us to the brink of World War 3? The OPCW have just reported, well two hours ago... There was no nerve gas attack on Douma. There was no nerve agent deployed on Douma. We were taken to World War 3’s brink on a crock. A crock of vile propaganda. Ring any bells? The April 7th alleged chemical attack, widely blamed by Western countries and the media on Assad's forces, resulted in massive US-led retaliatory airstrikes mostly concentrated on suspected chemical production facilities in Damascus. Though at the time both UN and OPCW officials urged caution in the rush to blame "animal Assad" for "using nerve agents" as many world headlines breathlessly concluded a mere moments after videos purporting to show scores of chemical attack victims first surfaced (and though CW experts themselves warned that not a single neutral observer was on the ground to verify such claims when it happened), the latest OPCW report flatly contradicts the narrative that quickly solidified in the mainstream.

        Mainstream Media Lie About Watchdog Report On The ‘Chemical Attack’ In Douma - Some mainstream media are outright lying about the OPCW report on the alleged 'chemical attack' in Douma.The Washington Post writes:[A] global watchdog concluded that chlorine was indeed used in the city of Douma a day before rebel forces surrendered there. ..In an interim report released Friday, the Organization for the Prohibition of Chemical Weapons said its inspectors had discovered traces of “various chlorinated organic chemicals” across two sites it inspected. The OPCW did not conclude at all that "chlorine was indeed used". It found some chemical compounds which have chlorine, carbon and hydrogen in various configurations as their main elements. There are hundreds if not thousands of "chlorinated organic chemicals". A plastic pipe made from polyvenylchlorid (PVC = (C2H3Cl)n) is made of the same elements. One could call it a "chlorinated organic chemical". Burning something made of PVC will releases various compounds many of which will themselves be "chlorinated organic chemicals". But finding residues of a burned plastic pipe or isolation in a home does not mean that chlorine gas was used in that place. Several of the compounds the OPCW found result from using chlorine to disinfect water. They can be found within the chlorinated water and about anywhere where chlorinated water was used.  The BBC made a similar 'mistake'. It headlined "Syria war: Douma attack was chlorine gas - watchdog".

        German Parliament Report: U.S. Presence in Syria Is Illegal - The Scientific Services of the German Bundestag are the equivalent to the Congressional Research Service in the United States. Members of Parliament can ask the services to give their neutral expert opinions on legal questions and other issues. Opinions by the Scientific Services are held in high regard. Alexander Neu, a Member of Parliament for the Left Party in Germany, requested an opinion on the legality of the military presence and operations by Russia, the United States and Israel in Syria. The result (pdf, in German) is quite clear-cut:  Russia was asked by the recognized government of Syria to help. Its presence in Syria is without doubt legal under International Law. U.S. activities in Syria can be seen as two phases:

        • Regime Change: The provision of arms to insurgents in Syria by the U.S. (and others) was and is illegal. It is a breach of the Prohibition on the Use of Force in international law specifically of the UN Charter Article 2(4): All Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state, or in any other manner inconsistent with the Purposes of the United Nations.
        • Fight against ISIS: The U.S. argues that its presence in Syria is in (collective) self-defense under Article 51 of the UN Charter because the Islamic State in Syria threatens to attack the United States. That, in itself, would be insufficient as Syria is a sovereign state. The U.S. therefore additionally claims that the Syrian state is "unwilling or unable" to fight against the Islamic State. The Scientific Services says that the claim of "unwilling or unable" was already dubious when the U.S. operation started. The already dubious legal case for the presence of U.S. (and other 'coalition' troops in Syria) can thus no longer be made. The U.S. presence in Syria is illegal.

        The secret story of how America lost the drug war with the Taliban - As Afghanistan edged ever closer to becoming a narco-state five years ago, a team of veteran U.S. officials in Kabul presented the Obama administration with a detailed plan to use U.S. courts to prosecute the Taliban commanders and allied drug lords who supplied more than 90 percent of the world’s heroin — including a growing amount fueling the nascent opioid crisis in the United States. The plan, according to its authors, was both a way of halting the ruinous spread of narcotics around the world and a new — and urgent — approach to confronting ongoing frustrations with the Taliban, whose drug profits were financing the growing insurgency and killing American troops. But the Obama administration’s deputy chief of mission in Kabul, citing political concerns, ordered the plan to be shelved, according to a POLITICO investigation. ..Now, its authors — Drug Enforcement Administration agents and Justice Department legal advisers at the time — are expressing anger over the decision, and hope that the Trump administration, which has followed a path similar to former President Barack Obama’s in Afghanistan, will eventually adopt the plan as part of its evolving strategy. “This was the most effective and sustainable tool we had for disrupting and dismantling Afghan drug trafficking organizations and separating them from the Taliban,” said Michael Marsac, the main architect of the plan as the DEA’s regional director for South West Asia at the time. “But it lies dormant, buried in an obscure file room, all but forgotten.” 

        US Blasts China, Russia Over Sneaky Oil Sales To North Korea; Urges UN Action -  The United States has petitioned the UN to reprimand Russia and China for allegedly selling oil products to North Korea in violation of caps placed on petroleum sales as part of a larger sanctions package, reports the Wall Street Journal.  The U.S. State Department called on Russia and other U.N. members to “strictly implement” sanctions on North Korea while working “more closely together to shut down U.N.-prohibited activities, including ship-to-ship transfers of refined petroleum and the transport of coal from North Korea.” Chinese vessels were "caught red handed" last year by US spy satellites illegally selling oil to North Korea last year in around 30 transactions involving Chinese vessels, while a Hong Kong ship was seized in December after it was seen transferring oil to the Kim regime. The images allegedly showed large Chinese and North Korean ships transacting in oil in a part of the West Sea closer to China than South Korea. The surveillance photographs even showed the names of the ships. Meanwhile, Reuters reported in December that 'two senior Western European security sources' confirmed Russian tankers have supplied fuel to North Korea on at least three occasions in recent months by transferring cargoes at sea. Reuters' sources said the Russian-flagged tanker Vityaz was one vessel that had transferred fuel to North Korean vessels.

        China’s silky charming of Arabia - Under the radar, the eighth ministerial meeting of the China-Arab States Cooperation Forum (CASCF), established in 2004, sailed on in Beijing, hosted by President Xi Jinping. Amid the torrential pledge of loans and aid, China committed to invest right across the Arab world in transportation infrastructure, oil and gas, finance, digital economy and artificial intelligence (AI). Significantly, Beijing will offer $15 million in aid for Palestinian economic development, as well as $91 million distributed among Jordan, Lebanon, Syria and Yemen. Aid and loan package A China-Arab bank consortium will be set up, with a dedicated fund of $3 billion tied up with the financial aid and loan package. Beijing also foresees importing a whopping $8 trillion from Arab states up to 2025. Predictably, once again Xi fully connected the whole Arab world with the expansion of the New Silk Roads, or Belt and Road Initiative (BRI). And careful to navigate the geopolitical minefield, he urged “relevant sides” to respect the international consensus in the Israel-Palestine confrontation, calling for justice. That may indicate a gradual, but sure departure from trademark Chinese passive or reactive policy across the Arab world, focused exclusively on energy and political non-interference. 

        China’s Trade Surplus With U.S. Hits Record as Fight Intensifies —China’s trade surplus with the U.S. surged to a record monthly high in June, with exports swelling just as trade tensions between the world’s two largest economies escalated. The June boost in China’s surplus with the U.S. to $28.97 billion was fueled in part, some economists said, by exporters accelerating deliveries to avoid the tariffs both sides imposed on each other’s goods in early July. China’s total trade surplus with all its trading partners also widened sharply, to $41.61 billion in June, chiefly, economists said, because of a weakening economy—with sluggish demand for imports rather than markedly stronger exports. That compares with the $24.92 billion surplus recorded in May and economists’ expectation of $26 billion. The record surplus with the U.S. accounted for 70% of China’s total surplus last month and is likely to offer fresh evidence for the Trump administration in its trade battle with Beijing. The White House said Tuesday it would assess 10% tariffs on $200 billion in Chinese goods. Those would come on top of levies the two governments placed on $34 billion of each other’s exports, and a second round of tariffs the U.S. has in the pipeline on another $16 billion of Chinese products. China’s Commerce Ministry issued a sharp critique of U.S. trade policy on Thursday night, accusing Washington of starting a trade fight to suit its domestic political needs and suppress China’s development. An assistant foreign minister, Zhang Jun, kept up the drumbeat at a Friday briefing, saying that the U.S.’s behavior “poses a threat to the global economy.” At a separate briefing, customs bureau spokesman Huang Songping struck a more reassuring tone, telling reporters that the agency won’t deliberately delay inspections of American products entering China as a way to retaliate. 

        Get ready for the ‘largest trade war in economic history’ | Asia Times: It is now the “largest trade war in economic history.” Well, that is Beijing’s take on President Donald Trump’s decision on Friday to impose tariffs worth US$34 billion on a range of Chinese imports, including high-tech equipment and industrial machinery. In response, the world’s second-largest economy warned it would take the “necessary countermeasures,” triggering what is now a full-blown trade conflict. “The Chinese side, having vowed not to fire the first shot, is forced to stage counter-attacks to protect the … interests of its people,” the Chinese Commerce Ministry said in a statement. “[The US has started the] largest trade war in economic history.” As the midnight chimes sounded in the United States, the first wave of tariffs kicked in. Another $16 billion are scheduled to take effect in the next two weeks.After that, Trump has made it clear he is planning additional duties on Chinese products worth a staggering $500 billion. At the same time, Beijing has reiterated it will roll out tit-for-tat tariffs as tensions rapidly escalate.For the past three months, the ‘war of words’ between the world’s two largest economies has gathered pace after the White House pledged to cut the ballooning US trade deficit with China.In May, the figure swelled to US$24.6 billion, which was almost all of China’s total surplus of $24.9 billion, compared to the same period last year. While it fell slightly last month, between January and March it hit $58 billion and a record $375.2 billion in 2017.But that is only part of Trump’s beef. He has also expressed growing concern about intellectual property rights in high-tech industries, centered around the “Made in China 2025” policy, which aims to turn the country into a technological superpower.

        Tesla Planning Shanghai Factory With Capacity For 500,000 Vehicles A Year - A Tesla spokesperson said Tuesday morning that Tesla will have the China plant up and running in two years, which, like most of Musk's projections, should be taken with a grain a salt. Tesla's lone car-assembly plant in Fremont has struggled to produce 88,000 cars through the first half of this year. Last year, Tesla managed to sell a meager 14,779 vehicles in China. Now, they're hoping to produce 500,000 cars a year (though no doubt some of those will be exported to other regional hubs). With reports of rising breakdowns and poor quality issues threatening to blunt investor enthusiasm for Tesla's stock after CEO Elon Musk managed to meet his latest "factory-gated" Model 3 production deadline (at least on paper), Tesla shares have resumed their ascent this morning after a report sourced to "people familiar with the matter", according to which Tesla is planning to build a factory in Shanghai with a capacity for 500,000 vehicles a year. According to Bloomberg, Tesla is expected to sign a memorandum of understanding with local authorities regarding building the factory. While investors responded enthusiastically to the news, the fact remains that the Wall Street Journal published a nearly identical story roughly a year ago while Engadget covered Musk's China ambitions all the way back in 2015, a tradition as Musk has waved the China strawman flag any time he needs a Hail Mary to push the stock price higher (like now). Back then, Tesla and Chinese officials denied that there were any concrete plans for a Tesla factory in Shanghai, but Tesla later revealed that it was working with local officials to explore "opportunities in manufacturing." Musk was expected to be in Shanghai for an event with government officials on Tuesday.

        US provocatively sends two warships through Taiwan Strait -- In what can only be interpreted as a calculated provocation against China, the US navy sent two destroyers through the Taiwan Strait last Saturday. The key strategic waterway, which is about 130-220 kilometres wide, lies between mainland China and Taiwan, which Beijing claims at part of its territory. Significantly, it was Taiwanese, rather than American, officials who first announced the sensitive transit by the USS Mustin, a guided missile destroyer, and the USS Benfold, an anti-aircraft destroyer. The brief Taiwanese announcement is a further indication of the closer relations that the Trump administration is forging with Taiwan, including potentially military ties. The naval transit coincided with the escalating trade war between the US and China. The Trump administration implemented its 25 percent tariff on $34 billion worth of Chinese imports last Friday. China is retaliating with tariffs on an equal amount of US products, including soybeans, electric cars and pork. Pentagon spokesman Colonel Robert Manning declared that the US navy has a “right” to sail through international waters but declined to comment on the timing of the passage. “We can fly, sail and operate where we want,” he said. “That’s legally permissible.” While the US navy might have the legal right of passage, it rarely deploys warships through the Taiwan Strait. It has sent an aircraft carrier through the sensitive waterway just twice in recent years—in 1996, in the midst of high tensions with China over Taiwan, and in 2007. Under conditions where the US is strengthening ties with Taiwan, the Trump administration and the Pentagon are well aware that the dispatch of warships through the Taiwan Strait will provoke condemnation from China.

        The US is trying to nail down terms with Pyongyang, while 'South Koreans aren't wasting time' - One month since the U.S-North Korea summit, skepticism about Kim Jong Un's commitment to denuclearization still hangs over Washington. But in South Korea, the mood is overwhelmingly optimistic as President Moon Jae-in's government pushes for improved ties with its nuclear-armed neighbor.From sports diplomacy to corporate ventures, Seoul is pulling out all the stops to re-engage Pyongyang as it builds on the positive momentum sparked by April's inter-Korean summit.Major conglomerates such as Lotte, Hyundai, Hyosung and KT have announced task forces dedicated to exploring inter-Korean ventures. Meanwhile, a group of South Korean businessmen who operated factories at the defunct Kaesong joint industrial complex in North Korea are seeking government approval to visit in hopes of resuming operations.Pyongyang and Seoul also agreed last month to jointly improve North Korea’s railways and potentially connect them with the South's. Moreover, the two nations pledged to form joint sports teams for the upcoming Asian Games and recently played a series of friendly basketball matches with one another.Unlike President Donald Trump's administration, "South Koreans aren’t wasting time defining denuclearization," Jean Lee, Korea program director at research group The Wilson Center, wrote in a note this week. "They are pushing ahead with plans for reconciliation with North Korea — with or without the United States." Moon has long sought to strengthen bilateral ties through economic development, tourism, and cultural exchange — known as the Sunshine Policy — that will define his legacy. And while his approach has beenpreviously criticized for being too conciliatory, he appears to have robust public support.

        India supersedes France to become world’s sixth-largest economy: Nation’s milestone explained in four charts -- India has become the world's sixth-largest economy, pushing France into seventh place, according to the latest World Bank (WB) data for 2017. India's GDP hit $2.597 trillion in 2017, while France's was at $2.582 trillion, the development bank said. The United States (US), China, Japan, Germany and the United Kingdom (UK) occupy the top five slots with GDPs of $19.390 trillion, $12.237 trillion, $4.872 trillion, $3.677 trillion and $2.622 trillion respectively. According to the WB, over five decades, India's GDP has ballooned, from $37 billion in 1960, to $2.597 trillion now. Since the economic reforms announced in 1991, the nation's GDP expanded almost nine times (in 26 years) from $267 billion in 1991 to $2.597 trillion in 2017. Prior to that, and in the preceding 26years, the nation's GDP grew just 3.5 times.  In just the past decade, India has doubled the size of its economy, outpacing that of France. While India's GDP has risen by an average 8.3 percent over a decade, France's actually contracted by 0.01 percent. To add more perspective, over the past 10 years, India's GDP grew by 116.3 percent (from $1.201 trillion in 2007 to $2.597 trillion in 2017) while France witnessed a 2.8 percent decline (from $2.657 trillion in 2007 to $2.583 trillion in 2017). This clearly tells us that India is building economic muscle consistently and that it is emerging as one of the powerhouses.

        Pakistan’s Financial Crisis Puts China’s Belt And Road On The Spot - Increased Pakistani dependence on China to help it avert resorting to the International Monetary Fund (IMF) to avoid a financial and economic crisis spotlights fears that the terms of Chinese investment in massive Belt and Road-related projects would not pass international muster. Concerns that China’s $50 billion plus investment in Pakistani infrastructure and energy, the Belt and Road’s crown jewel dubbed the China Pakistan Economic Corridor (CPEC), potentially amounts to a debt trap, compound suggestions that Pakistan increasingly will have no choice but to toe Beijing’s line.The concerns are reinforced by the vision spelled out in a draft plan for CPEC. The plan envisioned a dominant Chinese role In Pakistan’s economy as well as the creation of a Chinese style surveillance state and significant Chinese influence in Pakistani influence.Pakistani officials, concerned that Chinese loans offer a band-aid rather than a structural solution, have cautioned China, in a bid to keep the People’s Republic committed to bailing them out, that CPEC projects would be at risk if their country was forced to seek help from the IMF.The officials said that they would have to disclose the terms of CPEC projects if they are forced to revert to the IMF and that this could lead to projects being cancelled.“Once the IMF looks at CPEC, they are certain to ask if Pakistan can afford such a large expenditure given our present economic outlook,” the Financial Times quoted a Pakistani official as saying. China has so far been willing to bail Pakistan out with Chinese state-owned bank giving the South Asian country some $5 billion in loans in the last 12 months in addition to a $1.5 billion trade facility.

        Massive Blasts Kill 128 Ahead Of Pakistan Elections; Ousted PM Arrested At Airport - The deadliest terror attack in over a year has rocked Pakistan as bombs went off at two campaign rallies in different cities. The massive death toll climbed by the hour throughout Friday after a suicide bomber struck a convoy headed to an election-related event in Mastung near the southwestern city of Quetta, the capital of Balochistan Province.Pakistani authorities said 128 were killed and over 150 wounded in a suicide attack reportedly claimed by the Islamic State (ISIS). Some observers have noted that the spot is close to where Pakistani forces had previously claimed to have eliminated an ISIS base in the province. The attack targeted Siraj Raisani, a Balochistan Awami Party candidate for parliament running in the July 25 general elections, and his supporters. Raisani died as a result of the blast, which came after a motorcycle bomb attack earlier in the day in the northwestern town of Bannu targeted a convoy transporting former Housing and Works Minister Akram Khan Durrani, who escaped unharmed. At least four people died in the Bannu attack with at least 32 wounded.  A local hospital official in Mastung said, "we've run out of space in the mortuary" and security officials cited over 271 injured based on incoming casualties. Video footage and photographs showed a grizzly scene with dead and wounded lying nearly on top of each other under a cramped outdoor tent.

        App Traps: How Cheap Smartphones Siphon User Data in Developing Countries – WSJ - For millions of people buying inexpensive smartphones in developing countries where privacy protections are usually low, the convenience of on-the-go internet access could come with a hidden cost: preloaded apps that harvest users’ data without their knowledge. One such app, included on thousands of Chinese-made Singtech P10 smartphones sold in Myanmar and Cambodia, sends the owner’s location and unique-device details to a mobile-advertising firm in Taiwan called General Mobile Corp., or GMobi. The app also has appeared on smartphones sold in Brazil and those made by manufacturers based in China and India, security researchers said. Taipei-based GMobi, with a subsidiary in Shanghai, said it uses the data to show targeted ads on the devices. It also sometimes shares the data with device makers to help them learn more about their customers. Smartphones have been billed as a transformative technology in developing markets, bringing low-cost internet access to hundreds of millions of people. But this growing population of novice consumers, most of them living in countries with lax or nonexistent privacy protections, is also a juicy target for data harvesters, according to security researchers. Smartphone makers that allow GMobi to install its app on phones they sell are able to use the app to send software updates for their devices known as “firmware” at no cost to them, said GMobi Chief Executive Paul Wu. That benefit is an important consideration for device makers pushing low-cost phones across emerging markets. “If end users want a free internet service, he or she needs to suffer a little for better targeting ads,” said a GMobi spokeswoman. 

        Latecomer China looming as a major Antarctic player - NZ Herald - Last October, the Chinese icebreaker Xuelong cleared Shanghai and headed south for the austral summer, China's 31st Antarctic expedition. The Xuelong is Beijing's polar workhorse and made headlines in 2013 when its helicopter airlifted passengers from the ice-bound Akademik Shokalskiy.The icebreaker's intervention to assist the stranded Russian ship was a pivotal soft power moment, showing the world that China - a latecomer to the ice - was emerging, as it has elsewhere around the globe, as a major Antarctic player.Beijing has deep pockets and is engaged in an ambitious catch-up schedule that involves new bases, aircraft, ships and scientific programmes to assert itself in the world's emptiest continent. Besides building a station for China's Beidou satellite navigation system, the latest expedition will select a runway for aircraft - initially retooled DC3s - near Zhongshan research base, one of four Chinese facilities [a fifth is planned] in Antarctica. The United States has six.  En route the Xuelong called in at Hobart, where it was meet met by Chinese leader Xi Jinping, there to ink a refuelling deal with Australia for ships and [eventually] planes headed to and from the ice, an agreement comparable to the longstanding one the United States has with New Zealand using Christchurch. Like the launch of the Asian Infrastructure Investment Bank [AIIB] to rival the US-dominated World Bank, probes to the Moon as preparation for putting an astronaut on its surface, huge infrastructure projects worldwide, and a growing blue water navy, China's arrival in the Antarctic is part of a global power push.Despite territorial claims, Antarctica belongs to no one. China's bases are on Australia's claim - two-thirds of the continent is nominally held by the United Kingdom, New Zealand and Australia - alarming the Labor Opposition, which frets about the erosion of diplomatic clout and the militarisation of the Beidou base.Beijing has, in turn, challenged "the rich man's club", the original signatories of the 1959 Antarctica Treaty, as it seeks to remake international governance, including demands for a greater role in the Arctic. One Antarctica worry is how effective the treaty is at monitoring and policing any violation of its strictly science ethos. With officials and state media talking up "inevitable" Antarctic exploitation to Chinese citizens, is the treaty relevant?

        Ethiopia Touts Good Conditions in Factories for Brands Like H&M and Calvin Klein, but Workers Scrape By On $1 a Day - — Five years ago this spring, Rana Plaza, an eight-story building in Bangladesh that housed several factories making clothing for Western brands, collapsed on top of its workers. Deep cracks had been found in the structure the day before. Recognizing the danger, the bank and shops on the lower floors closed for the day. The factory workers begged to do the same, but the managers refused, forcing them to head into the factories as usual. One thousand one hundred thirty-four people were suffocated or crushed to death. The Hawassa Industrial Park in Ethiopia is the new face of the garment industry’s makeover. It has attracted PVH, one of the largest apparel companies in the world, whose brands include Calvin Klein and Tommy Hilfiger, along with JC Penney, the Children’s Place, and H&M, among others. The labor conditions are far better than those in Bangladesh — the well-ventilated sheds are structurally sound, the park contains 17 miles of unblemished paved roads, and all of its wastewater is pumped into a “zero liquid discharge” treatment plant that recycles and reuses 90 percent of the water. Bill McRaith, chief supply chain officer for the American PVH, said the new park “will show the world there is no conflict between companies doing well and companies doing right by the people, the community, and the environment they operate within.” But the notion that the Hawassa Industrial Park is the future of the garment industry is less rosy than it might first appear — in a notoriously exploitative industry, the factories in Ethiopia pay some of the lowest wages of any garment factories in the world. The base salary for workers inside the park is less than $1 a day.

        It's A "Matter Of Life And Death" - White South African Farmers Seek Refuge In Russia -- As the violent attacks and death threats against white farmers in South Africa ramps up, many of those affected are seeking refuge.  A delegation of 30 South African farming families has arrived in Russia’s Stavropol region as the South African government continues to steal their land. According to RT, up to 15,000 Boers, descendants of Dutch settlers in South Africa, are planning to move to Russia amid rising violence stemming from government plans to expropriate their land, according to the delegation.White farmers, despite being a minority in South Africa, own 72 percent of the country’s farms. The new South African government recently announced a plan to redistribute land to the black population in the highly racist move. Critics have warned South Africa may repeat the disastrous experiment by the Zimbabwean government in 1999-2000. The measure plunged the country into an intense famine, reported RT.SHTFPlan  A report by stated that the new South African government led by racist President Cyril Ramaphosa has pledged to return the lands owned by white farmers since the 1600s to the black citizens of the country. The government said it is planning to put an end to what it calls the “legacy of apartheid.” Most of South Africa’s farming land is still in the hands of its minority white population. Human rights groups have said the initiative incites violence. There were 74 farm murders and 638 attacks, primarily against white farmers, in 2016-17 in South Africa, according to data by minority rights group AfriForum. South Africa will face the real threat of famine in the absence of experienced farmers – regardless of their race.The farmers have been facing racial genocide in South Africa, and many say moving to Russia has become a “life or death” matter, Rossiya 1 TV channel reported.

        "Largest-Ever Sugar-Surplus In Recorded History" Plagues The World -Forget the global sugar shortage of the past two years. This season’s glut is forecast to send global stockpiles to record levels as slowing demand and surging production have left a sour taste in sugar bulls mouths. After reaching a high of 15.37 per pound on the third day of January, the price of sugar futures that trade on the Intercontinental Exchange has been on a linear path down, -25 percent to be exact. Sugar has been trapped in a multiyear bear market since El Nino forced a global shortage in 2016 when prices soared to 23.90. Since the high, the price has tumbled more than -65 percent to today’s level of 11.40. According to a report issued by The United Nations’ Food and Agriculture Organisation (FAO), world sugar production is projected to reach its highest ever level, even outpacing global demand, while trade wars are causing more short-term volatility for prices. Declining sugar production in Australia and Brazil have been conveniently offset by significant increases in China, the European Union, India, and Thailand, the report said, creating the largest global sugar surplus in modern history as production is expected to surpass global consumption “by a large margin.”FAO forecasters indicate that the excess supply is coming at a time when world sugar consumption is increasing, a long-term trend fueled by demand from emerging countries due to depressed prices.Although sugar prices have sustained a bear market for several years, rising international crude oil prices could help prices find support as the crop could be used to make ethanol for biofuels instead of an ingredient for food.  Meanwhile, FAO forecasters point to “complex trends” in the oil crops sector, where future prices of oilseeds and oilmeals are rising even though vegetable oil is declining. The report specifies the instability of markets via the trade wars: “In the past few weeks, the evolving trade dispute between the United States and China introduced considerable uncertainty into the market.”

         Brazil: Lula supporters hope release is near after weekend of legal drama -- Supporters of Luiz Inácio Lula da Silva, Brazil’s jailed former president, hope that he may soon be released from prison following an extraordinary legal skirmish that almost saw him freed at the weekend. Lula – who is serving a 12-year sentence for money laundering and corruption – has consistently proclaimed his innocence, saying his conviction was a politically-motivated attempt to stop him running for October’s presidential elections. The former president remains the country’s most popular leader in recent decades, and leads the election race, even though his conviction is widely understood to make him ineligible – although his party disputes this. On Sunday, Rogério Favreto, a judge covering the weekend at an appellate court in Porto Alegre, southern Brazil, ordered that Lula be freed three times following a legal move by three lawmakers from Lula’s leftist Workers’ party – who argued that his pre-candidature for October’s presidential elections merited his release. But each time Favreto was overruled, as bewildered Brazilians on social media compared the legal drama to a World Cup penalty shootout. Lula’s sentence was originally handed down by Sergio Moro, a judge in a lower court in Curitiba, the southern Brazilian city where Lula is being held, last year. The Porto Alegre court confirmed the conviction and raised the penalty, and he was jailed in April. On Sunday, Moro challenged Favreto’s decision, even though he is on holiday. Carlos Thompson Flores, the court president, finally ruled that Lula should stay jailed, bitterly disappointing crowds of supporters who had gathered in front of the Federal Police building in Curitiba, where he is being held, and other cities. Deepening the sense of uncertainty, the judges for Democracy Association issued a statement in support of Favreto’s decision but the National Union of Federal Judges came out against it. Brazilian media said Favreto had been a member of the Workers’ party for 19 years.

        Lula soap opera making mockery of Brazil’s legal system, says expert - Former Brazil President Luiz Inacio Lula da Silva's on-off prison release following a corruption conviction risks undermining the country's legal system, a legal expert told AFP. Brazil's political scene was thrown into tumultuous uncertainty on Sunday when it was initially announced that a judge had ordered Lula -- serving a 12-year sentence for accepting a bribe -- be released from prison, only for a more senior judge to later overturn that decision. As it turned out, Lula's Workers Party (PT) had contested his imprisonment at an appeals court in Porto Alegre where judge Rogerio Favreto was on call. Favreto, who Brazilian press were quick to point out was a PT member for almost 20 years and several times worked as a consultant for Lula's government, duly ordered the former president's release. But Ivar Hartmann, a law professor at Rio de Janeiro's Getulio Vargas Foundation, blasted the PT for making a mockery of Brazil's legal system. "The Brazilian people should not pay the price of a demoralized justice system because of the PT's political strategy," he told AFP. That's a very different message to that pushed by the PT after the latest setback in their bid to force Lula's name onto ballots in October's presidential election.

        Mexico will not intervene in Venezuela, Nicaragua crises: incoming minister (Reuters) - The next government of Mexico, led by leftist President-elect Andres Manuel Lopez Obrador, will not intervene in the internal affairs of other nations, such as crisis-ridden Venezuela and Nicaragua, the country’s future foreign minister said on Monday. Mexico’s current administration has taken a lead in regional efforts to pressure socialist Venezuelan President Nicolas Maduro into restoring democracy in the South American country, and has worked closely alongside the United States to stem north-bound Central American migration. However, incoming Foreign Minister Marcelo Ebrard said in a radio interview on Monday that Mexico would now adopt a hands-off policy toward other nations. Lopez Obrador, the landslide winner in the July 1 vote, is due to take office on December 1. “Mexico will follow a respectful foreign policy of non-intervention...and right now, we don’t expect to abandon that policy,” he said. “That does not mean that we’re not concerned about the situation in one country or another, in this case Venezuela. We’re going to look into it and see how we can design, or help contribute, in the best way.” Ebrard added that the non-intervention policy would extend to Nicaragua, which has seen clashes between the government and protesters that have left hundreds of people dead. 

        Venezuela’s Democratic Action Party Breaks from MUD as Opposition Fractures Deepen -  Venezuela’s largest opposition party, Democratic Action (AD), became the latest to split from the Democratic Unity Roundtable (MUD) last week, throwing the right-wing anti-government coalition into further disarray. General secretary of the social democratic AD party and National Assembly deputy, Henry Ramos Allup, announced the decision Thursday citing “administrative” conflicts as well as a lack of action by the organization. “We have decided to separate ourselves from the MUD so as to start tours around the country,” he told the nation. Allup also highlighted the breach of a July 2017 agreement to hold primaries to select a unity candidate for this year’s presidential elections – in which the AD party boss would have been a strong contender – as well as a spat between his party and fellow MUD member Popular Will over naming the bloc’s general secretary. AD, who has provided seven Venezuelan presidents since its founding in 1941, formed part of the Punto Fijo system of pacted two-party rule which lasted from 1958 to 1998. Initially established with socialist leanings, the party drifted rightwards upon coming to power and eventually formed a key element of the anti-Chavista MUD coalition. Apart from the reasons made public by Allup, analysts have also pointed to brewing internal tension both between AD and the rest of the MUD, as well as within AD itself, as possible causes for the surprise schism.

           "Shelter In Place": All Hell Breaks Loose In Haiti As Violent Mobs Try To Murder Trapped American Tourists - The US embassy in the Haitian capital of Port-au-Prince warned American tourists to "shelter in place" as violent demonstrations erupted across the island over a fuel price hike.An estimated 120 Americans are believed to be staying at a Port-au-Prince hotel targeted by protesters, who attempted to bypass security and set the building ablaze. Youth groups and missionaries from an array of U.S churches are also stranded in the Caribbean nation, unable to make it safely to the airport for departure. -Fox NewsHotel Best Western in Petionville, #Haiti was set ablaze by anti-govt protesters moments ago.— HaitiInfoProject (@HaitiInfoProj) July 7, 2018 The State Department notice reads: "Do not travel to the airport unless you confirmed your flight is departing," adding "Flights are cancelled today and the airport has limited food and water available. Telecommunications services, including Internet and phone lines, have been affected throughout Haiti.  It may be difficult to reach people through normal communication methods." "We express our deepest condolences to all those affected by this event. We are closely monitoring the situation and remain in close contact with Haitian authorities to verify the welfare and whereabouts of U.S. citizens in the area."

          U.S. airlines cancel all flights to Haiti amid violent protests --The U.S. airlines canceled all of their flights to Haiti Saturday as the country’s embattled prime minister called for Haitians to stop blocking roads and burning tires amid a civil unrest being triggered by the announcement of a sharp hike in fuel prices. Flights remain canceled until further notice despite Prime Minister Jack Guy Lafontant's announcement that the price adjustment was being temporarily suspended.At least three people have died as a result of the violence that erupted Friday afternoon, including a police officer and security guard for a former legislative candidate and opposition leader. Also, two police stations — one in the city of Gonaives and the other in Carrefour on the outskirts of metropolitan Port-au-Prince — were set ablaze. Gunshots were fired during demonstrations in the capital city as well as the town of Cavaillon.  Spirit Airlines and JetBlue, which diverted its 1709 flight to Santo Domingo and then returned to Fort Lauderdale Friday night "due to the civil unrest," all announced flight cancellations Saturday to Port-au-Prince. The JetBlue flight was about 300 feet from the ground when it was diverted, said a passenger.

          Haiti protests carry on despite fuel hike U-turn; flights canceled - (Reuters) - Haitian leaders pleaded for calm on Saturday as violent protests over fuel price increases entered a second day and U.S. airlines canceled flights to the Caribbean nation. Prime Minister Jack Guy Lafontant announced the temporary suspension of double-digit government hikes to prices for gasoline, diesel and kerosene on Saturday afternoon - just a day after they were announced. But as local television footage showed, the government’s decision to back down did not keep angry residents from taking to the streets. Some demonstrators erected flaming roadblocks, while others attacked hotels and businesses. “The poor people want to be able to eat,” one masked protester told Reuters TV as a car blazed behind him. “I want to tell (President) Jovenel (Moïse) that Haiti is not for him and his family. Haiti is for every Haitian. He needs to leave the country and leave the country to us so we can live.” In a statement, Lafontant said the government strongly condemns the acts of violence and vandalism. U.S. carriers American Airlines (AAL.O), JetBlue (JBLU.O) and Spirit Airlines (SAVE.N) announced flight cancellations Saturday to the capital Port-au-Prince citing civil unrest. “Due to concerns over safety from unrest in the area, Spirit Airlines felt it necessary to temporarily suspend service to Port-au-Prince, Haiti Saturday,” the airline said in a statement. “We apologize for the inconvenience this has caused, but the safety of our guests and crew is paramount.” A spokesman for the airline said it was not yet clear when flights would resume. The U.S. Embassy in Haiti advised personnel and Americans in the country to shelter in place. The U.S. State Department said separately that it was aware of vandalism at a Best Western hotel, where media reports said Americans were staying, and at an American Airlines office in downtown Port-au-Prince. 

           Bank of Canada Hikes Rates By 25bps, Loonie Rises On Hawkish Take - The Bank of Canada raised the overnight rate by 25bps to 1.5%, in line with consensus estimates. In justifying the move, the Bank said it expects the global economy to grow by about 3.75% in 2018 and 3.5% in 2019, adding that the US economy is proving stronger than expected, reinforcing market expectations of higher policy rates and pushing up the US dollar. It warned that this is "contributing to financial stresses in some emerging market economies" suggesting that Canada was dragged into the rate hikes rather than welcoming it. In other words, the BOC hopes that demand from the U.S. will trump the drag on trade from tariffs the two neighbors, as well as the uncertainty over the future of Nafta. It also noted that while oil prices have risen, the Canadian dollar is lower, reflecting broad-based US dollar strength and concerns about trade actions, noting that "the possibility of more trade protectionism is the most important threat to global prospects." Perversely, even as the BOC hiked rates, it warned that household spending is "dampened by higher interest rates and tighter mortgage lending guidelines." Curiously, despite market concerns, the BOC raised its Q2 GDP forecast to 2.8% from 2.5% previously, with Q3 seen at 1.5%; The bank also raised the potential output growth to 1.8% in 2018, and 1.9% in 2019 and 2020. Commenting on the ongoing trade war with the US, the BOC estimates US tariffs on steel and aluminium will reduce level of real Canadian exports by 0.6%, with the impact expected to be felt in H2 2018. Meanwhile, Canadian counter measures estimated to reduce real imports by 0.6% starting Q3, while tariffs will temporarily boost inflation in Q3 2019. 

          As Global Debt Hits A Record $247 Trillion, The IIF Issues A Warning -   Every quarter the Institute of International Finance publishes a new number of the total amount of global debt outstanding, and every quarter the result is the same: a new record high.  Today was no exception: according to the IIF's latest Global Debt Monitor, the amount of debt held in the world rose by the biggest amount in two years during the first quarter of 2018, when it grew by $8 trillion to hit a new all time high of $247 trillion, up from $238 trillion as of Dec. 31, 2017 and up from by $30 trillion from the end of 2016. In other words, there is now a quarter quadrillion dollars in global debt, and it represents 318% of global GDP. More concerning is that this was the first time since Q3 2016 that global debt to GDP increased, suggesting that the marginal utility of debt is once again below 1. This is how the debt is broken down as of Q1 2018 and compared to Q1 2013:

          • Non-financial corporate debt: $74 trillion, up from $58 trillion in 5 years
          • Government debt: $67 trillion, up from $56 trillion
          • Financial debt: $61 trillion, up from $56 trillion
          • Household debt: $47 trillion, up from $40 trillion

          Some more details from the report, via Bloomberg:

          • The government debt-to-GDP ratio has surged to 101 percent in the U.S.
          • Non-financial corporate debt is now at record highs in Canada, France and Switzerland
          • Household indebtedness in China, Chile and Colombia grew over 3% since Q1 2017, topping 49%, 46% and 30%, respectively.

           As Erdogan Cements His Hold Over Turkey’s Economy, Global Investors Begin to Panic -- Two big European banks, Italy’s Unicredit and Spain’s BBVA, will be following current events in Turkey extremely closely. The two lenders have the biggest exposure to the country, which is one of the world’s fastest growing emerging economies. But investing there is an increasingly risk business.Turkey continues to grow at high speed, expanding by 7.4% last year. But that growth has been fueled by reckless public and private-sector borrowing, much of it at the insistence of Turkey’s strong-arm leader, Recep Tayyip Erdogan. Turkey’s overall stock of private sector debt has grown from 33% of GDP in 2007 to 70% today. Due to the long-collapsing lira, much of this debt is in foreign currencies. As of the end of April, Turkish private sector companies owed more than $245 billion in foreign-currency debt, or nearly one-third the size of the country’s overall economy.There’s already growing pressure on Turkish banks to reorganize foreign-currency denominated corporate loans as companies struggle to service them. At least $6.1 billion of loans taken out by energy companies are being restructured or refinanced, Bloomberg reports. If this trend continues, it could trigger a wave of bankruptcies that could leave financial institutions and taxpayers staring at massive losses.Turkey is one of the three most vulnerable large emerging markets at present, alongside Argentina and Ukraine, according to rating agency Fitch. For its part, The New York Times warned that “in a global economy increasingly plagued by worries — from an unfolding trade war to higher oil prices — Turkey may present the most immediate cause for alarm”:The country’s president, Recep Tayyip Erdogan, who has dominated national life for 15 years, was sworn in again on Monday following a re-election victory that came with extraordinary new powers. He has wielded his influence to deliver relentless economic growth through unrestrained borrowing, lifting debt levels to alarming heights. And the additional authority he has been granted is expected to further test the limits of economic reality. Before Erdogan’s reelection at the end of June BBVA’s chairman Francisco González told CNBC that he thought — or at least hoped — that whoever was elected president would do whatever was necessary to stabilize Turkey’s overheating economy. The exact opposite is happening.

          Majority Of Russians Believe Shadowy Global Government Exists An overwhelming majority of Russians believe that a shadowy one-world government exists - and that it's hostile to the Russian nation, RT reported. State-run Russian public opinion research agency VTSIOM released the results of a poll in which 67% of Russian citizens said they believe there is a secret world government, while 21% said they don't believe in the idea of a one-world government. the rest were undecided.That marks a significant increase from two years ago, when only 45% of Russians said they believed in the existence of a global shadow government, while over 30% rejected the idea. The survey also showed that the percentage of people who believe in the one-world government is higher among older adults (over 70% said they believed in it) but even among people aged 18-34, more than half (55%) believed in it. About one-third of believers said they didn't have any evidence to support the existence of a one-world government. Those who did cite evidence mostly pointed to the existence of supranational organizations like the UN and NATO - or referenced TV shows or popular culture. Remarkably, around 74% of those who believe said they think the one-world government is hostile toward Russia, while only 10% said it acts in Russia's best interest. Asked about who they believe to be a part of the one-world government, 23% of believers cited the heads of major banks and other oligarchs. Eight percent said the government is led by senior politicians. Only 2% said they believe Vladimir Putin is a member. And less than 1% said they believe Donald Trump is a member.

          Trump's False Arguments Will Not Sell Well In Europe - Donald Trump, the 'America First' salesman, came to Brussels today to demand more tribute to the empire. He wants Europe to buy more U.S. made weapons and to use U.S. liquefied natural gas (LNG). But his arguments are all wrong. The people in Europe are not impressed by them and they will reject his appeals. His first talk in Brussels was a profoundly wrong bashing of Germany to push it into buying very expensive LNG from U.S. fracking producers. Trump, Putin's puppet according to the 'resistance', used the Russian bogeyman to set the scene:Well, I have to say, I think it’s very sad when Germany makes a massive oil and gas deal with Russia, where you’re supposed to be guarding against Russia, and Germany goes out and pays billions and billions of dollars a year to Russia. ...So we’re protect you against Russia, but they’re paying billions of dollars to Russia, and I think that’s very inappropriate. And the former Chancellor of Germany is the head of the pipeline company that’s supplying the gas. Ultimately, Germany will have almost 70 percent of their country controlled by Russia with natural gas.So you tell me, is that appropriate? I mean, I’ve been complaining about this from the time I got in. It should have never been allowed to have happened. But Germany is totally controlled by Russia, because they will be getting from 60 to 70 percent of their energy from Russia and a new pipeline.  ... Now, if you look at it, Germany is a captive of Russia because they supply. They got rid of their coal plants. They got rid of their nuclear. They’re getting so much of the oil and gas from Russia.   Germany, as far as I’m concerned, is captive to Russia, because it’s getting so much of its energy from Russia. So we’re supposed to protect Germany, but they’re getting their energy from Russia. Explain that. And it can’t be explained — you know that.

          The Political Representation of the European People -- English version of the political philosopher’s interview with Vadim Kamenka of L’Humanite Dimanche (21 June)and Ana Maria Merlo for Il Manifesto (15 June).

          • IM/HD: We are today witnessing the advance of nationalist, xenophobic and extreme-right groups in every successive European election. They have even managed to enter government, for instance, in Italy. What’s going on?
          • Etienne Balibar (EB):This trend has been ongoing for years and reveals a crisis in the current form of European construction, which is probably irreversible. It is moving from one country to another, but the formula is the same: the effects of austerity measures on the poor and middle classes as well as the development of social and territorial inequalities are the logical result of so-called free and undistorted competition. These elements crystallise within the malaise created by the technocratic government of the EU and its member states. They foster nationalism, xenophobia and a loathing for democracy. But ever since the Greek crisis and Brexit, it has also become clear that it is neither possible to leave the EU, nor to expel a member state. Obviously, some political forces believe in an exit from Europe, but no government can impose it. I think the situation will further deteriorate as we head towards a mutual neutralisation of hegemonic forces in Europe due to the lack of an alternative project on the part of new individuals, emergent groups or political movements. The consequences of this development are unpredictable.

           ‘They Will Die in Tallinn’: Estonia Girds for War With Russia - Almost 10 years after the Russian invasion of Georgia in August 2008, it’s clear NATO still needs to learn more quickly from our partners with a deeper history of fighting Russian aggression in all its various forms. Foremost of those partners is Estonia, which, unlike Georgia, is a full NATO member and has been since 2004. There’s an unspoken duality underlying the mind-set of Estonian defense. To survive, you must integrate: The three Baltic states—Estonia plus Latvia and Lithuania—acted as a unified region to achieve NATO and EU membership, and they continue to engage the U.S. and NATO from that “B3” format above all. NATO’s charter requires that the alliance come to the aid of any member who is attacked. But to survive as a small and vulnerable state, you must also believe that a crisis will come where you will again be on your own fighting the Russians, and you have to be prepared for that. This duality—stand together, but be ready to fight alone—is driving a shift in U.S. force posture in the region, and it has helped inform a new model for our engagement in front-line states: Defense must be alliance-driven, but it must also be almost hyperlocal. The idea that Estonia—whose entire population isn’t much bigger than Russia's standing army, and which has little on its own in the way of air power and armor—could withstand a Russian assault might seem like a silly discussion from the far side of the Atlantic. But Estonia has resources that are as much in demand in the alliance as TOW missiles and tanks: will and a mobilized population. In a country of just over 1.3 million, fully 60,000 are trained and serve in the military or reserves. The importance of this human element cannot be dismissed: Estonians still have vivid memories of the price of occupation, and this perspective sharpens strategic planning in unexpected ways.

          Italy says it won’t ratify EU-Canada trade deal; Canada plays down threat (Reuters) - Italy will not ratify the European Union’s free trade agreement with Canada, Deputy Prime Minister Luigi Di Maio said on Friday, although Canadian officials played down the threat to the accord, which mostly took effect last year. Soon CETA (the Comprehensive Economic and Trade Agreement) will arrive in parliament and this majority will reject it and it will not ratify it,” Di Maio said at a farmers’ association gathering in Rome. “If so much as one Italian official ... continues to defend treaties like CETA, they will be removed,” added Di Maio, who leads the anti-establishment 5-Star Movement, which governs the country with the right-wing League. The CETA accord has been provisionally in effect since September. It needs to be approved by all 28 EU member states to fully come into force, and can theoretically be scuppered altogether if an EU member country formally notifies Brussels that it has permanently rejected it. But Canada says 98 percent of the tariff and trade barrier reductions under the agreement have already taken effect. A Canadian government source played down the Italian remarks, saying they reflected domestic politics and the challenges of managing a coalition of right- and left-wing parties. “We are engaged but do not plan on escalating in any way an issue that has more to do with ‎(Italian politics) than a fundamental issue with the 2 percent of CETA left to be ratified,” said the source, who asked to remain anonymous given the sensitivity of the situation. The 5-Star/League government, which took office on June 1, vows to take a hard line to defend Italian speciality foods. Of the 28 European Union countries, Italy has the most food products with PDO (Protected Designation of Origin) and PGI (Protected Geographical Indication) labels. 

          Theresa May to face down Eurosceptic MPs over Brexit plan -- Theresa May will face down angry Eurosceptic Conservative MPs on Monday as she urges both them and the country to unite behind her soft Brexit ahead of the publication of the government’s long-awaited white paper. The prime minister has encountered a backlash from the pro-Brexit wing of her party, with MPs warning they are prepared to trigger a leadership contest after the cabinet agreed to back her vision of the UK’s future relationship with the EU. Dozens of Tory MPs have attended emergency briefings in Downing Street since the Chequers summit on Friday, at which Boris Johnson said that colleagues would be “polishing a turd” if they tried to defend the plans to the party and public. May’s most pressing challenge in the days ahead, however, will be to try to convince a reluctant EU not to immediately reject her proposal out of hand, with a fresh round of high-level diplomacy planned for this week. She is expected to talk directly to European leaders including the German chancellor, Angela Merkel, and the French president, Emmanuel Macron, while the Brexit secretary, David Davis, will embark on a tour of EU capitals after the white paper is published on Thursday. “Our message now is to the other side, to Europe, that it’s time to get serious and sit down and talk about it,” she said on Sunday. “It’s now for Europe to be prepared to sit down and move the pace of negotiations on and talk about it seriously and address what we’ve put forward.” Some pro-Brexit MPs fear the prime minister’s plan will be regarded as an opening salvo by Brussels and she will be forced to make further concessions, possibly on free movement, before the next crunch summit in October. Michel Barnier, the EU’s chief Brexit negotiator, has said the EU is ready to adapt its offer should the UK’s red lines change. However, May has agreed to ramp up preparations for a “no deal” Brexit in case Brussels – which described her previous customs proposals as “magical thinking” – rejects them. 

          The soft-Brexit Chequers deal: What it means --Prime minister Theresa May has strong-armed her cabinet into backing a new vision for a soft Brexit. A three-page government statement, issued after a marathon cabinet meeting on Friday at Chequers, Mrs May’s country residence, represents one of the most significant expositions of UK economic policy since the 2016 referendum vote to leave the EU. But Mrs May’s vision remains incomplete, and her statement is peppered with ambiguities that she must eventually confront as she battles to win round Brussels without losing the support of the Conservative party or parliament.The UK position crucially “evolves” in two ways that would allow for a Norway-style Brexit deal covering at least part of the EU single market.The first is Britain’s proposal for a “free trade area for goods” involving the UK and the EU that in effect continues existing regulatory and customs arrangements for manufacturing and agricultural products after Brexit. This is achieved by the UK becoming a rule-taker, with a treaty-based commitment to “ongoing harmonisation with EU rules on goods”.Just as important is Britain’s concession on enforcement. UK courts would pay “due regard” to European rulings in cases relating to EU-set rules. In other words, while Britain is a separate legal jurisdiction after Brexit, the European Court of Justice would be supreme in interpreting the UK-EU goods rule book.

          Gross Incompetence: Theresa May's Three 'Remaining' Options On Brexit --Here’s the lowdown: the EU’s single market mechanism dictates freedom of movement for labor, capital, services and goods. These are not divisible; you cannot have one without the other. Still, that’s precisely what Theresa May, again, is proposing. She basically wants to keep the UK in the single market for goods, and make other arrangements for the rest. The EU will not accept that because it could have 27 other countries coming with their own versions of single market à la carte. So why does she come with version 826 of what she already knows will not be accepted? And why did her cabinet comply? There are a few possibilities. Perhaps May has finally understood that there is no manner of leaving the EU left to her that will not lead to utter disaster. Maybe she just wants the whole thing to stop. Or maybe Boris Johnson et al, sensing failure for May, see a chance to dethrone her and take over power. Then again, maybe they all look for a way to blame the EU for their own failures.It’s hard to say, really. What’s obvious, through the comments of industries like Airbus and Jaguar Land Rover, is that 100,000s of jobs are at stake, along with 100s of billions of investments in Britain. Large enterprises are often branched out all through the EU, and they need to comply with EU rules; separate rules for their business with the UK would be a nightmare.And even smaller companies, to varying degrees, face those same problems. For all you may think of the EU, it has arranged the single market strictly and successfully. There are enormous advantages for companies in that. Take those away and they will look at relocating towards the continent, where they would regain those advantages.There appear to be three options (and May’s plan is not one of them): a hard Brexit, new elections, or no Brexit at all.

              "An Absolute Bombshell": Brexit Ministers Davis, Baker & Braverman Quit In Blow To Theresa May - In what has been called "an absolute bombshell", U.K. Brexit Secretary David Davis resigned from Theresa May’s government late Sunday, one week before the UK is scheduled to present its demands to Brussels. His full resignation letter is below (highlights ours):Davis resignation comes two days after May received backing from her cabinet for a new "soft Brexit" plan which envisioned maintaining close ties with the EU after the UK's departure from the block, news which was cheered the UK business lobby and which had set cable on an upward trajectory in early Asia trading, before the news hit which halted the pound's ascent.Confirming earlier rumors, Sky News reports that Steve Baker, Britain's junior Brexit minister, technically the Brexit minister for "contingency planning", is the other (for now) conservative MP to resign alongside Davis. Update 4: A second junior Brexit minister has resigned - Suella Bravermanm MP for Fareham. This leaves just two of the five person Brexit team remaining.

              Theresa May under pressure as Davis and Johnson quit amid Brexit chaos -- Theresa May will fight any attempt to unseat her through a vote of no confidence by Conservative MPs, Downing Street has said, after her administration was thrown into further turmoil by the resignations of two Cabinet members.Boris Johnson resigned as Foreign Secretary amid splits over Brexit, warning in his resignation letter that Britain appeared to be "heading for a semi-Brexit" and would take on "the status of a colony" under her plans.His departure came just hours after former Brexit Secretary David Davis quit, saying he could not back and deliver the Government's plan as he does not believe in. Jeremy Hunt has been named the new Foreign Secretary, leaving his post as Health Secretary which he has held since 2012. Matt Hancock has been appointed Health Secretary in Hunt's place, with Jeremy Wright replacing him as Digital, Culture, Media and Sport Secretary.

              Euroskeptic British ministers quit in blow to May's Brexit plan (Reuters) - Prime Minister Theresa May’s foreign minister and Brexit negotiator quit on Monday in protest at her plans to keep close trade ties with the European Union after Britain leaves the bloc, stirring rebellion in her party’s ranks. Foreign Secretary Boris Johnson, the face of Brexit for many, resigned just hours after Brexit minister David Davis, emboldening some in her Conservative Party to mull a plot to unseat her less than nine months before Britain exits in March. The two departures seemed to shatter May’s own proclamation of cabinet unity last Friday, when she said she believed she had, after two years of wrangling, secured agreement on Britain’s biggest foreign and trading policy shift in almost half a century. But as Monday drew to a close, May was cheered and applauded by many Conservative lawmakers at a private meeting, having earlier spent more than two hours in parliament answering sometimes hostile questions. Both euroskeptics and loyalists said she had stood her ground and appeared to have kept her job, at least for now, as the government tries to prepare for the next stage of negotiations with Brussels. The resignations have fostered a deep distrust among many euroskeptics in her party, undermining her position and casting doubt over the Brexit process. “Brexit should be about opportunity and hope,” Johnson said in a resignation letter. “That dream is dying, suffocated by needless self-doubt.” In response, May said she was a “little surprised” to receive his resignation after last Friday’s cabinet agreement. She appointed in his place Jeremy Hunt, an ally who voted to remain in the EU in the 2016 referendum. Hunt, a long-serving health minister, is replaced by culture minister Matt Hancock. In his letter, Johnson complained about how “crucial decisions” had been postponed, leading to what he described as a “semi-Brexit” with Britain unable to diverge, or move away, from rules and regulations set in Brussels. “In that respect we are truly headed for the status of colony.”

              David Davis Resignation Throws UK Brexit, Cabinet Into Chaos –Yves Smith - We had said that Brexit felt like a situation where too much energy was being pumped into a system. When that happens, it will eventually undergo a state change, meaning become chaotic compared to its prior form. That time has arrived.Theresa May’s plans to achieve a semblance of unity and finally present the EU with a position of sorts fell into an utter shambles with the resignation of the minister in charge of the Government’s Brexit negotiations, David Davis. His deputy Steven Baker resigned on the heels of Davis and Brexit minister Suella Braverman joined them.Perversely, the collapse of the delusion that there was a flavor of Brexit that could satisfy various factions among the Tories is, at a minimum, a gift to the EU. The leaks of terms that May briefly appeared to have gotten her Cabinet to accept were certain to be rejected by the EU, since they were just a reshuffling of arrangements that had already been nixed. As Richard North wrote then: The precise reasons for the EU’s rejection, when it comes, will not be at all difficult to work out. Firstly, at the core of the proposal is “the establishment by the UK and the EU of a free trade area for goods”. This supposedly entails the UK and the EU maintaining a “common rulebook” for all goods including agri-food, but it will cover only those areas “necessary to provide for frictionless trade at the border”. The government, says the statement, would then “strike different arrangements for services”, the criterion being that it is “in our interests to have regulatory flexibility”. And, on that basis, the government recognises that “the UK and the EU will not have current levels of access to each other’s markets”. This, as I have already pointed out, is cherry-picking at two levels. At one level, the UK is retaining the option to extract service provisions from the Single Market and, at the second level, the UK is deciding to apply only part of the acquis, on grounds of its own choosing. But the effort to force an agreement, which May had put off, didn’t even last to the official announcement set for Monday. As a result, the UK’s disarray relieves the EU from being cast in the role of the bad guy for rejecting the UK’s unworkable plans. It’s not yet clear whether the hard Brexit faction throwing a bomb at May’s plans will force a vote of no confidence. There had been 40 MPs who favored have her step down of the 48 required by the 1922 Committee; there’s now a call for a new tally:

              UK Foreign Secretary Boris Johnson resigns to prepare possible Conservative leadership challenge -  Boris Johnson’s resignation as foreign secretary yesterday made him the third minister in 24 hours to walk out of the government in protest at UK Prime Minister Theresa May’s proposals for a “soft Brexit,” i.e., maintaining access to the European Union’s (EU’s) Single European Market, at least regarding goods.Following the resignations of Brexit Secretary David Davis and his junior minister, Steve Baker, Johnson’s exit has fuelled speculation that more desertions might follow, triggering a Conservative Party leadership contest.Opinion is divided. Some believe that May still enjoys a parliamentary majority in a deeply divided parliamentary party because she can secure support on both sides of the divide over Brexit, which leaves champions of a hard-Brexit (leaving Britain outside the Single European Market) concerned to not jump too soon.Johnson himself, while describing May’s proposals as “a turd,” initially agreed to support them but was forced to resign after Davis quit to maintain his credibility among the Brexiteers.Unlike Davis, who stressed that he remained loyal to May, Johnson quit in a manner designed to inflict maximum damage to the prime minister. His resignation was announced as May’s deputy, David Lidington, was briefing opposition Labour MPs on the details of May’s proposals, and just half an hour before she was due to address the House of Commons. Johnson’s resignation letter, released later that day, was scathing. He had tried to support the line agreed at the PM’s country residence at Chequers Friday, but, “The trouble is that I have practised the words over the weekend and find that they stick in the throat.” May’s plan amounted to “a semi-Brexit,” he declared.

              How do Johnson and Davis’ resignations affect the Prime Minister? - What do the resignations of Foreign Secretary Boris Johnson and Brexit Secretary David Davis mean for Theresa May? How damaging is this to the Prime Minister?This is a massive blow. The Prime Minister would have been forgiven for thinking on Sunday evening that she had managed to placate unhappy Cabinet Brexiteers at Chequers on Friday. Now she has lost the seventh and eighth ministers from her Cabinet since last year’s election in less than 24 hours. They are the first to quit over a fundamental difference on her Brexit platform, but one of them was the man in charge of implementing that policy.However, Mr Davis has said that he is not seeking to trigger a coup to remove the Prime Minister, and Downing Street insiders indicated that he was seen as doing “the honourable thing” in light of Mrs May’s announcement that the doctrine of strict collective responsibility was being reimposed on Brexit. What Mr Johnson plans to do remains to be see.  Does it mean the end of Mrs May’s premiership?This is far less certain than some of her opponents appear to believe. In order to oust the Prime Minister as Tory leader, some 48 Conservative MPs would have to send letters demanding a vote of no confidence.There are believed to be around 60 backbenchers in the Eurosceptic European Research Group (ERG), along with many others who would like to see a “harder” Brexit than the version set out at Chequers last week, making her vulnerable to an anti-EU revolt. However, the ERG’s chairman Jacob Rees-Mogg has said he has not sent a letter to the 1922 Committee, and expects Mrs May to remain in office at least until Brexit day in March 2019. Others may take their lead from him.

              City reaction as Boris Johnson and David Davis quit in Brexit protest Financial News - The UK government has been rocked by the departures of its chief Brexit negotiator and foreign secretary, casting further uncertainty over both the country’s path to leaving the European Union and the stability of Prime Minister Theresa May’s government. Brexit secretary David Davis’ sudden resignation on Sunday night came a day after May said her cabinet — which had been fraught with infighting between europhiles and eurosceptics — had reached a consensus on the type of Brexit it wished to negotiate with Brussels. The plans, expected to be formalised in a white paper published on July 12, include a single market for goods but more flexibility on the regulation of the services industry, including the City. But these plans were thrown into further jeopardy when, on Monday afternoon, Foreign Secretary Boris Johnson, who helped the lead the campaign to take the UK out of the EU, followed Davis out of the door. In his resignation letter, Davis said the decision to commit to EU regulations for goods made the Conservatives’ pledge to leave the single market and customs union “less and less likely”. May has already rejected this claim in a response to the resignation letter. Housing minister Dominic Raab, a pro-Brexit MP, has replaced Davis. David Lammy, the Labour MP for Tottenham, tweeted: “Don’t let anyone fool you, Boris Johnson and David Davis are not principled. They are the two cowardly captains who take the first lifeboat to safety, as the rest of Britain continues full-steam ahead into the oncoming iceberg of Brexit.” Here is a roundup of the City reaction so far.

              Brexit: goodbye to the oaf  -- Considerably fewer tears than might have been expected have been shed over the loss of the Conservative's once favourite son, as Alexander (aka "Boris") Johnson departs from the Foreign Office in a typically shambolic fashion. Self-important as always, Johnson penned a resignation letter claiming that the Brexit dream "is dying, suffocated by needless self-doubt", with large parts of the economy still locked in the EU system, but with no UK control over that system.  Like so many, including David Davis who had only resigned hours before, Johnson is obsessed with what he sees as the "rule taker" status of the EU, complaining "it now seems that the opening bid of our negotiations involves accepting that we are not actually going to be able to make our own laws".Indeed, he writes, we seem to have gone backwards since the last Chequers meeting in February". It was then, he asserts, that he described his frustrations, as Mayor of London, in trying to protect cyclists from juggernauts.  In this, he claims that TfL had wanted to lower the cabin windows of heavy goods vehicles to improve visibility. And even though such designs were already on the market, and even though there had been a horrific spate of deaths, mainly of female cyclists, he asserts: "we were told that we had to wait for the EU to legislate on the matter". Clearly, it was things like this which he had in mind when, at the previous Chequers session, "we thrashed out an elaborate procedure for divergence from EU rules". But, he whinges, "even that seems to have been taken off the table and there is in fact no easy UK right of initiative".If Brexit is to mean anything, he avers, it must surely give ministers and Parliament the chance to do things differently to protect the public, then adding: "If a country cannot pass a law to save the lives of female cyclists – when that proposal is supported at every level of UK Government – then I don't see how that country can truly be called independent". The cycle story, however, is one that Johnson has used before, is his Telegraph column in March 2016 (a few months before the EU referendum). Needless to say, Channel 4 decided that this story didn't fit the facts. In 2014, it asserted, citing a BBC source, the European Parliament had voted "overwhelmingly" to change the shape of lorry cabs to cut cyclist deaths, despite initial opposition from some national governments, including that of the UK.

              BREXIT – Still Not Gonna Happen - Good news: The pictured man is no longer the Foreign Secretary of the United Kingdom. Bad news: The pictured man may soon be the Prime Minister of the United Kingdom.  Hours before Boris Johnson quit his position, Brexit Secretary David Davis resigned from Prime Minister May's cabinet.On July 6 the British government held a cabinet meeting at Chequers, the private seat of the prime minister. Following the meeting it published a paper (pdf) that took a weird position towards exiting the European Union. If it would be followed, Britain would practically end up with staying in the EU, accepting nearly all its regulations and court decisions, but without any say over what the EU decides. The paper was clearly written by the 'Remain' side. The two top Brexiters in May's cabinet felt cheated and resigned. More are likely to follow.The majority of the British people who voted to leave the EU must feel duped.My hunch is that Prime Minister Theresa May was tasked with 'running out the clock' in negotiations with the EU. Then, shortly before the March 2019 date of a 'hard Brexit' would arrive without any agreement with the EU, the powers that be would launch a panic campaign to push the population into a new vote. That vote would end with a victory for the 'Remain' side. The UK would continue to be a member of the European Union. Shortly before the original Brexit vote in June 2016 MoA headlined: BREXIT - Not Gonna HappenNo matter how the Brexit vote will go, the powers that are will not allow Britain to exit the European Union. Is that claim still justified? Maybe Johnson the Brexiter can now launch an inner party coup and push Theresa May out. According to a YouGov poll she lost significant support within her conservative party. Besides the Brexit row she botched a snap election, lost her party's majority in parliament and seems to have no clear concept for anything. It would not be a loss for mankind to see her go. Boris the clown, who wins within his party on 'likability' and 'shares my political outlook', would then run the UK. A quite amusing thought. Johnson is a man of no principles. While he is currently pretending to hold a pro-Brexit position he would probably run the same plan that May seems to execute: Delay as long as possible, then panic the people into a re-vote, then stay within the EU. Then again - Boris may do the unexpected.  How do the British people feel about this?

               Concerted efforts to save May’s government and the chance of a “soft Brexit” -In a day filled with high-profile declarations of support for Prime Minister Theresa May and opposing any leadership challenge, perhaps the most significant statement was that of the European Union’s chief negotiator Michel Barnier.Speaking in New York while attending the Council on Foreign Relations, Barnier made clear the concern of the European powers that May’s beheading by the eurosceptic wing of the Conservatives is to be avoided if possible.After previously ridiculing the suggestion that the EU would accept any preferential “cherry-picking” arrangement for the UK, Barnier declared that “we have agreed on 80 percent of the negotiations” and that he was determined to agree on the remaining 20 percent.“No deal is the worst solution for everybody. It would be a huge economic problem for the UK and also for the EU,” he added.Barnier still stressed the EU’s position that the “four freedoms of movement of people, goods, services and capital” were “indivisible” and that “at the end of this negotiation that the best situation, the best relationship with the EU, will be to remain a member.” But he insisted, “I will negotiate only with the British government… so our next negotiations will be next Monday with the British delegation appointed by Mrs. May.”However, the EU clearly calculates that the possibility of reversing Brexit at this point comes second to preventing a hardening of the Tories’ anti-Brexit stand in the aftermath of the resignation of Brexit Secretary David Davis, his minister Stephen Baker and Foreign Secretary Boris Johnson.Such concerns would have been highlighted by the resignation of two Conservative party vice-chairs, Ben Bradley and Maria Caulfield, only minutes before May was to begin a joint press conference with German Chancellor Angela Merkel at the EU Western Balkans Summit in London that was dominated by questions over Brexit. It is a measure of May’s crisis that she told Merkel not to answer questions from the British press, and to only take one question from a German reporter, which produced an expression of obvious surprise from the chancellor.

              EU and BoE clash over fate of financial contracts after Brexit (Reuters) - The European Commission said on Wednesday that existing financial contracts, such as derivatives or insurance, are unlikely to be affected by Britain’s departure from the European Union - a view the Bank of England described as “wrong headed”. The BoE has said 82 billion pounds’ ($109 billion) of insurance liabilities involving 48 million policyholders could be disrupted across Britain and the European Economic Area. Derivatives worth a notional 26 trillion pounds are also caught in the Brexit crosshairs. “Overall, even after Brexit, the performance of existing obligations can generally continue,” Commission Vice President Valdis Dombrovskis told a news conference, citing insurance and derivatives contracts as examples. That appeared to soften the line Dombrovskis took in May, when he declined to offer guarantees on existing contracts in a hearing at the European Parliament. Britain and the EU have agreed on a “standstill” transition period whereby EU rules remain in force in Britain until the end of 2020, which would ensure continuity in cross-border financial contracts such as insurance policies and derivatives. But this transition is part of a broader divorce settlement that is still being negotiated, and will not be legally watertight until it is finalised before Britain pulls out in March. Dombrovskis said supervisors and firms needed to look separately at each type of contract, but added that at this stage he did not foresee a general problem. “It does not appear to be at this juncture an issue of general nature linked to contract continuity,” he told reporters. 

              Donald Trump told Theresa May how to do Brexit ‘but she wrecked it’ – and says the US trade deal is off - (interview tape) DONALD Trump today accuses the PM of wrecking Brexit — and warns she may have killed off any chance of a vital US trade deal. The US President delivers his incendiary verdict on her negotiating strategy in a world exclusive interview with The Sun.In an extraordinary intervention timed to coincide with his UK visit, Mr Trump said Theresa May ignored his advice by opting for a soft Brexit strategy.And he warned her any attempts to maintain close ties with the EU would make a lucrative US trade deal very unlikely. Mr Trump said: “If they do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal.” His comments, damaging to the Prime Minister, come as he delivers his most brutally honest verdict yet on Britain in which he also:

              Mr Trump’s remarks come as he prepares to meet the PM for a working lunch at Chequers. He will then board a helicopter for Windsor Castle to meet the Queen before flying up to Scotland for a private two-day visit.

              Trump blows up Theresa May’s party in his honor -- On his first official visit to Britain as the U.S. president, Donald Trump warned in an interview that Theresa May’s new Brexit strategy will “kill” any future trade deal with the U.S., backed her rival Boris Johnson for prime minister, accused the mayor of London of being weak on terrorism and said the whole of Europe is “losing its culture” due to mass immigration.Trump’s caustic remarks to the Sun dropped online partway through a grandiose gala dinner at Blenheim Palace, which May had thrown on Thursday in the president’s honor. Things started badly. Trump arrived late, leaving the prime minister and her husband standing alone in front of the palace in silence for six full minutes before he finally rolled up.As May, her husband Philip, her most senior Downing Street aides and half the Cabinet sat in black tie and ball gowns, just after the PM had delivered a big speech to Trump, his wife Melania and scores of U.K. business leaders on her proud hopes for Anglo-American trade, the Sun’s Tom Newton Dunn started tweeting out the top lines from the interview.Trump said May had ignored his advice on how to negotiate Brexit and “went the opposite way” instead. “I would have done it much differently,” Trump told the Sun. “I actually told Theresa May how to do it, but she didn’t agree, didn’t listen to me.   He added: “If they do a deal like that, we would be dealing with the European Union instead of dealing with the U.K., so it will probably kill the deal. Because we have enough difficulty with the European Union. We are cracking down right now on the European Union, because they have not treated the United States fairly on trade.”

              British MPs outraged at ‘repulsive’ Trump broadside against May - Donald Trump’s incendiary newspaper interview on the eve of his first official visit to the UK, in which he took aim at Theresa May’s Brexit plans and suggested Boris Johnson would make a great prime minister, has been met with outrage by MPs, who have accused him of “disrespecting” the nation and suggested Theresa May should show him the door.  Trump, who is due to meet Theresa May for bilateral talks at her Chequers residence on Friday, was heavily critical of the Brexit deal and called into question any future UK-US trade deal. “If they do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal,” he told the Sun.Conservative MP Sarah Wollaston said Trump was “determined to insult” May and added that “The divisive, dog-whistle rhetoric in his Sun interview is repulsive. If signing up to the Trump world view is the price of a deal, it’s not worth paying.”Ben Bradshaw, Labour MP for Exeter, called the courting of Trump by the UK “humiliating”. “Our prime minister is so weak she still rolls out the red carpet for a man who does nothing but insult her. Humiliating,” he wrote.Darren Jones, Labour MP for Bristol North West, echoed those sentiments, writing: “Well this has gone well then. What a humiliating week for Britain (excluding the valiant efforts of our football team!).” Former Labour party Ed Miliband tweeted a link to a news story about Trump’s comment, and said: “The theory that if we are nice to Trump he’ll be nice to us doesn’t seem to be going brilliantly ...”Labour MP Anna Turley questioned whether the US president should now be allowed to meet the Queen during his four-day visit. He is due to take tea with her at Windsor Castle on Friday afternoon.  “Trump is a racist and disrespects our nation. Why does he get to meet our Queen? And those Tories saying we should respect him simply because he is elected president – by that logic shouldn’t he respect our prime minister and London’s mayor?” tweeted the MP for Redcar.

              Trump’s Visit Marks the Start of Shock Doctrine Brexit - naked capitalism - Yves here. The setup for this post has been trumped by events, with Hair Furore doing his best imitation of Emily Litella.   From the Financial Times:Donald Trump has sought to repair the diplomatic wounds he inflicted on Theresa May by insisting whatever course the British prime minister took on the UK’s future relationship with the EU “is OK with me”.The American president insisted his priority for Brexit negotiations was ensuring the UK and US could grow their trading relationship, and withdrew his criticism made in an interview with the Sun newspaper that Mrs May’s recently agreed Brexit plan would “kill” a trade deal between London and Washington…Mr Trump’s remarks came just hours after the Sun quoted him accusing Mrs May of having “wrecked” her negotiations with Brussels over Brexit by pursuing a policy that prioritised the UK’s trading relationship with the EU over the rest of the world.But after the Chequers lunch, Mr Trump said he was optimistic about Brexit. Cutting a trade deal might be “tricky”, he said, but he added: “This is an incredible opportunity for both our countries and we should seize it, both . . . not an easy negotiation, a complicated negotiation, that’s for sure.” Nevertheless, the article gives a good idea of how some influential businessmen and politicians think they can enrich themselves in a hard or crash out Brexit. Even putting aside the belief that they will be able to pick up assets on the cheap, another attraction of Brexit for corporate interests was being able to squeeze labor even harder and cutting environmental-related expenses by escaping EU regulations. Originally published at openDemocracy.

              Customers hit out at Britain’s TSB bank after second IT outage (Reuters) - Customers of Britain’s TSB complained they were locked out of their online banking again on Tuesday only two months after a botched IT upgrade plunged the bank into chaos. The bank said that the issue had been resolved but a number of customers took to Twitter to flag that they were still unable to access their accounts. Some said computers were also down in their local branches. “Why are you still insisting that the app is fixed?” One customer, Yvonne Nicol, wrote on Twitter to TSB. “Listen to your customers...” Others threatened to close their accounts with the bank following the outage. It occurred after TSB, owned by Spain’s Sabadell (SABE.MC), updated its mobile app, but a spokeswoman told Reuters the issues were unrelated to this. The bank had apologized for the outage in a statement sent via email and to customers on Twitter and said the problem had been fixed, with services working as normal. The latest outage comes just as TSB was returning to normality after an attempt to switch its customer base over to a new IT system left thousands of customers locked out of their accounts, with some unable to access their accounts for over a week or make vital payments, and others falling victim to fraud.  An early report into what went wrong by International Business Machines Corp (IBM.N), called in by TSB to help fix the issue, concluded that inadequate testing of the new system had contributed to the outage. 

              It would take Facebook just 18 minutes to pay off its £500,000 fine for the Cambridge Analytica scandal - It would take Facebook just 18 minutes to pay off the £500,000 fine proposed as a punishment by the UK's data watchdog for the Cambridge Analytica data scandal.The Information Commissioner's Office (ICO) has suggested fining Facebook the maximum penalty for the way it mishandled user data and failing to safeguard people's information.But the company makes so much money per minute from advertising that the penalty is barely a drop on the ocean.Facebook made $4.8 billion in net profit in the first three months of 2018, according to its own figures. And, according to Business Insider's calculations, that means Facebook makes around $37,037 a minute, which means it would take just less than 18 minutes to pay the fine.

              No comments: