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

Saturday, July 7, 2018

week ending Jul 7

FOMC Minutes: "Concern about the possible adverse effects of tariffs" -- Still on pace for 4 rate hikes in 2018.  Some excerpts:  From the Fed: Minutes of the Federal Open Market Committee, June 12-13, 2018:  In their discussion of the economic situation and the outlook, meeting participants agreed that information received since the FOMC met in May indicated that the labor market had continued to strengthen and that economic activity had been rising at a solid rate. Job gains had been strong, on average, in recent months, and the unemployment rate had declined. Participants reported that business fixed investment had continued to expand at a strong pace in recent months, supported in part by substantial investment growth in the energy sector. Higher oil prices were expected to continue to support investment in that sector, and District contacts in the industry were generally upbeat, though supply constraints for labor and infrastructure were reportedly limiting expansion plans.   Conditions in both the manufacturing and service sectors in several Districts were reportedly strong and were seen as contributing to solid investment gains. However, many District contacts expressed concern about the possible adverse effects of tariffs and other proposed trade restrictions, both domestically and abroad, on future investment activity; contacts in some Districts indicated that plans for capital spending had been scaled back or postponed as a result of uncertainty over trade policy. Contacts in the steel and aluminum industries expected higher prices as a result of the tariffs on these products but had not planned any new investments to increase capacity. Conditions in the agricultural sector reportedly improved somewhat, but contacts were concerned about the effect of potentially higher tariffs on their exports.. Some participants raised the concern that a prolonged period in which the economy operated beyond potential could give rise to heightened inflationary pressures or to financial imbalances that could lead eventually to a significant economic downturn.

FOMC Minutes Show Hawkish Fed Eying "Very Strong Economy"; Fears Tariffs, Yield Curve -- Having hiked rates and tilted hawkish in the June FOMC meeting, markets have signaled their displeasure ever since (stocks, yield curve down notably) but The Minutes show no sign of The Fed trying to jawbone that 'displeasure' back as they reassure that "gradual hikes are needed amid a 'very strong' economy."The Fed Minutes also showed member give themselves an 'out' with a warning that "most Fed officials saw intensified risks around trade policy." Not just "some", or a "few"... but many. In other words, if Trump ends the economy into a tailspin, he will also prevent the Fed from hiking further.Also of note The Fed highlighted that "a number of Fed officials said it was important to watch the yield curve slope." And specifically on the number of rate hikes:"Based on their current assessments, almost all participants expressed the view that it would be appropriate for the Committee to continue its gradual approach to policy firming by raising the target range for the federal funds rate 25 basis points at this meeting. These participants agreed that, even after such an increase in the target range, the stance of monetary policy would remain accommodative, supporting strong labor market conditions and a sustained return to 2 percent inflation.""With regard to the medium-term outlook for monetary policy, participants generally judged that, with the economy already very strong and inflation expected to run at 2 percent on a sustained basis over the medium term, it would likely be appropriate to continue gradually raising the target range for the federal funds rate to a setting that was at or somewhat above their estimates of its longer-run level by 2019 or 2020."   On trade: "Many District contacts expressed concern about the possible adverse effects of tariffs and other proposed trade restrictions, both domestically and abroad, on future investment activity; contacts in some Districts indicated that plans for capital spending had been scaled back or postponed as a result of uncertainty over trade policy."

 Why Did FRED Suddenly Discontinue Reporting On The Fed's Balance Sheet Normalization? -- In the interests of transparency at The 'New' Federal Reserve, The St.Louis Fed has decided, suddenly and without warning, to discontinue the production of The Fed's balance sheet size from its FRED website.  And while the data is still available on various data terminals and The New York Fed SOMA site continues to provide the updates, we can't help but wonder why the government would decide that this data series - one that is simple to report, readily available from the source, and requires very little manpower to produce - would suddenly be discontinued from one of the most popular, publicly accessible, and free US government data repositories?Perhaps it is because the pace of balance sheet normalization is about to take a huge step larger - from around $30bn to around $50bn per month in the next quarter... Or perhaps its because if 'average joes' accessing FRED can see the normalization accelerating and will notice that the SMART money is piling out of the stock market - and selling to the greater fools chasing momo... Or more likely, Gluskin Sheff's David Rosenberg is right: "Don’t fight the Fed works in both directions..." The NYSE comp is lower today than it was on Nov 28, even with the FAANG stocks! Nothing to show for 7 months except the nausea from all the roller coaster rides in a yr where the thematic is one of volatility and multiple compression. Don’t fight the Fed works in both directions. — David Rosenberg (@EconguyRosie) July 4, 2018

As the Yield Curve Flattens, Threatens to Invert, the Fed Discards it as Recession Indicator -- In the minutes of the FOMC meeting on June 12 and 13, released this afternoon, there was a doozie, obscured somewhat by the dynamics of the rate hike plus the indication that there would be two more rate hikes this year, for a total of four, up from three at the prior meeting, with more hikes to come in 2019, along with other changes – a phenomenon I called, This Fed Grows Relentlessly More Hawkish, Gone are the Kid Gloves. But the doozie in the minutes was about the flattening “yield curve.”The yield curve is formed by Treasury yields of different maturities: normally, the two-year yield is quite a bit lower than the 10-year yield. Over the last several decades, each time the yield curve “inverted” – when the two-year yield ended up higher than the 10-year yield – a recession followed. The last time, the Financial Crisis followed.So this has become a popular recession indicator that has cropped up a lot in the discussions of various Fed governors since last year. Today, the two-year yield closed at 2.55% and the 10-year yield at 2.84%. The spread between them was just 29 basis points, the lowest since before the Financial Crisis. The chart below shows the yield curves on December 14, 2016, when the Fed got serious about raising rates (black line); and today (red line). Note how the red line has “flattened” between the two-year and the 10-year markers, and how the spread has narrowed to just 29 basis points: The chart below shows the two-year yield (black) and the 10-year yield (red) going back to 1992. Note how the spread has been narrowing in recent months (click to enlarge):The chart below tracks this spread for every day back to 2008. Today, the spread, at just 29 basis points, is the lowest since before the Financial Crisis: There has been a lot of handwringing about this being an indicator that the next recession is nearing and that the Fed should back off with its rate hikes. But this Fed is getting seriously hawkish: In the minutes today, it revealed that instead of thinking about backing off with its rate hikes, it’s throwing out the flattening yield curve.

 One More Fed Rate Hike Threatens To Invert Treasury Yield Curve - The yield spread for 10-year less 2-year Treasuries dipped to 29 basis points on Thursday (July 5), the lowest since August 2007. Will the Federal Reserve tempt economic fate with another rate hike that could push the 10-2-year spread into negative terrain, which would widely be interpreted as a warning that a new recession is near? The subject was discussed at last month’s monetary policy meeting, according to yesterday’s release of FOMC minutes. Although a rise of short rates above long rates is considered as a sign that the risk is elevated for economic contraction, some Fed members downplayed the implied red flag via a flattening yield curve.Participants pointed to a number of factors, other than the gradual rise of the federal funds rate, that could contribute to a reduction in the spread between long-term and short-term Treasury yields, including a reduction in investors’ estimates of the longer-run neutral real interest rate; lower longer-term inflation expectations; or a lower level of term premiums in recent years relative to historical experience reflecting, in part, central bank asset purchases. Some participants noted that such factors might temper the reliability of the slope of the yield curve as an indicator of future economic activity; however, several others expressed doubt about whether such factors were distorting the information content of the yield curve.An alternative indicator of recession risk was discussed at the FOMC meeting, and one that some Fed members suggested could be more reliable than the 10-2-year spread: “the spread between the current level of the federal funds rate and the expected federal funds rate several quarters ahead derived from futures market prices. The staff noted that this measure may be less affected by many of the factors that have contributed to the flattening of the yield curve, such as depressed term premiums at longer horizons.” By that standard, the case for recession risk is somewhat weaker vs. the 10-2-year spread.

The yield curve is already signaling a slowdown - Throughout this expansion, I have had a sneaking suspicion that the yield curve (the difference in interest rates between short and long term bonds) would be the indicator most likely to fail.Originally that was because we are in a very non-inflationary period similar to that which prevailed between the 1920s and 1950s. After 1929, at no time during the 1930s, 1940s, or early 1950s did the yield curve invert, even though there were five recessions during that time, including the very deep 1938 recession.Now I have a second concern: too many people are paying too much attention to it. As a result, they are “anticipating” an inversion and may be altering their behavior in response, in a way they have not done in the past. Humans are very sneaky primates, and when you observe their behavior, they always observe back.That being said, it would also be a mistake to ignore such a trustworthy signal in the past. So, as usual, I K.I.S.S. and consider it among the array.And in that vein, as I write this the spread between 2 and 10 year bonds is down to +.32%. That is narrow enough that, if past is prologue, a signal is being sent.Here is the graph showing this spread for the last 40 years (blue), wherein I have subtracted -.35% so that the current spread is at the “zero” line, compared with real YoY GDP growth (red):

WSJ: Next Recession May Hit In 2020 - The second-longest economic expansion in US history will most likely end in 2020 as the Fed raises interest rates to cool off an overheating economy, reports the Wall Street Journal which surveyed 76 forecasters. Some 59% of private-sector economists surveyed in recent days said the expansion was most likely to end in 2020. An additional 22% selected 2021, and smaller camps predicted the next recession would arrive next year, in 2022 or at some unspecified later date. -WSJ “The current economic expansion is getting long in the tooth by historical standards, and more late-cycle signs are emerging,” said Bank of the West's chief economist Scott Anderson, chief economist, who thinks a 2020 recession is likely. As for the cause - 62% of forecasters said that an overheating economy would lead to Fed tightening, while other economists (at least 5%) said that another financial crisis, bubble bursting or disruptions to international trade would be the culprits. Recessions are notoriously difficult to predict, and sometimes are tricky to recognize even after they start. The recession that began in December 2007 wasn’t officially proclaimed by the National Bureau of Economic Research’s recession-dating committee until a year had gone by. Forecasters saw the chances of a recession rise back in 2011 and in 2016; both turned out to be false alarms. –WSJ “Recessions occur because of unforeseen shocks, so by definition there is no meaningful answer,” said Daniel Bachman - an economist with Deloitte who declined to estimate either the timing or cause of the next downturn.

Q2 GDP Forecasts - From Merrill Lynch: The [trade] data bumped up 2Q GDP tracking by a tenth to 3.8% qoq saar. [July 6 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 3.8 percent on July 6, down from 4.1 percent on July 2. [July 6 estimate] From the NY Fed Nowcasting Report   The New York Fed Staff Nowcast stands at 2.8% for 2018:Q2 and 2.7% for 2018:Q3. [July 6 estimate] CR Note: These estimates suggest real annualized GDP in the 2.8% to 3.8% range in Q2.

For a Fiscal Neutrality Amendment --  Peter Dorman - Against the dogmatic ignorance of a proposed amendment to the US constitution mandating a balanced budget, I propose an alternative, a fiscal neutrality amendment:  “No unit of government within the United States may establish voting or other decision procedures that embody a bias in favor of either higher or lower tax rates and revenues.  The federal government may not adopt voting or procedural restrictions that bias decision-making in favor of either larger or smaller fiscal deficits.  Fiscal policies should be assessed on their merits according to neutral procedures.”Requirements for supermajorities to raise taxes but not lower them should be unconstitutional.  Restrictions on property tax rates or government revenues as a proportion of aggregate income or some other benchmark should be unconstitutional as well.  Nor should the federal government be encumbered in its choice of appropriate fiscal policy.  The historical record shows policy errors have been made in all directions; there is no reasonable basis for biasing policy away from one set of mistakes only to bias it toward another. A parallel agreement to replace the EU’s (In)Stability and (De)Growth Pact would also be desirable.

Refurbishing The Trump Economics Team --Rumors are floating on the internet that NEC Chair Lawrence Kudlow is looking for new people to join the team advising President Trump on economics.  Of course, the obvious place to start would be with him, a non-economist, although he has played one on TV a lot, who also has one of the worst documented forecasting records around, poo-pooing both the housing bubble and the early signs of the Great Recession a decade ago, along with forecasting a hyper-inflation out of Obama fiscal policy, although one must grant that he later admitted he was wrong on that one.  He can also be credited with mocking Trump’s proposed tariffs, until he was appointed to his current position, where he  now says all this will lead to improved trade deals.  We shall see.  Anyway, it might be worth reviewing the current troops, probably the sorriest collection of economic advisers any president has ever assembled. We have Treasury Secretary Mnuchin.  Another non-economist, he can claim to be a billionaire and have a trophy wife, which certainly impresses Trump.  He has supported the Trump tax plan along with clearly flawed projections.  However, on trade, like Kudlow, he looks better than the three actually handling trade policies, and has had shouting matches in front of Chinese negotiators with them.  Peter Navarro, an actual PhD economist out of Harvard, long at UC-Irvine, who now is chief adviser on trade.  Some decades ago he wrote not-too bad articles and books on various topics, but has not had an academic article in over two decades, not that this is the end of the world.  What is closer to that is that he has since written books  not only calling for trade war with China, but even outright war.  This is what caught Trump’s eye, and, of course, he has advocated harder lines than Mnuchin in those reported screaming matches. Also on trade we have none-economist Wilbur Ross.  He comes from the steel industry, enjoying the first round of protection from Trump tariffs.

Hope Hicks Rumored To Be Next White House Chief Of Staff -  White House Chief of Staff John Kelly's departure from the West Wing is looking imminent after the administration offered up a half-hearted denial following reports that Kelly will leave his post by the end of the summer. But who might take his place? If the Washington rumor mill is to be believed, former White House Communications Director Hope Hicks is now a dark horse contender for the job.  The Daily Mail and Vanity Fair are the latest publications to jump on the Hicks bandwagon, reporting that Hicks has told confidants that she would absolutely be interested in the position, and that her name is rising up the list of possible candidates, which also includes Nick Ayers, Vice President Pence's chief of staff, and Mick Mulvaney, the OMB chief who is essentially the Elon Musk of the Trump administration (a reference to his multiple roles running OMB and serving as acting director of the Consumer Financial Protection Bureau).A source close to Hicks told the publication that she has told people she is open to the job if Trump asked, but is not pursuing it. Hicks declined to comment.Meanwhile, supporters are lobbying for Hicks, a longtime Trump spokeswoman from both his private business and the campaign, to return to the administration after stepping down as White House Communications Director in March."Unlike any other candidate he may be considering, she doesn’t need a learning curve and possesses the most important qualities that the president cares about: loyalty, independence, and a calming presence during chaos," conservative commentator Ryan Girdusky wrote for the Washington Examiner.

 Scott Pruitt directly asked Donald Trump to replace Jeff Sessions with him -  Embattled Environmental Protection Agency Administrator Scott Pruitt directly appealed to President Donald Trump this spring to fire Attorney General Jeff Sessions and let him run the Department of Justice instead, according to three people familiar with the proposal. In an Oval Office conversation with Trump, Pruitt offered to temporarily replace Sessions for 210 days under the Vacancies Reform Act, telling the President he would return to Oklahoma afterward to run for office. Pruitt's direct appeal to the President has not been reported previously. Advisers quickly shot down the proposal, but it came at a time when Trump's frustration with Sessions over his decision to recuse himself from overseeing the Russia investigation had resurfaced. Trump has complained loudly and publicly about the recusal for the last 14 months, and floated replacing Sessions with Pruitt as recently as April. The Federal Vacancies Reform Act of 1998 gives the President the authority to temporarily fill a vacancy at a federal agency if the official "dies, resigns, or is otherwise unable to perform the functions and duties of the office." The White House did not respond to requests for comment.In a statement sent after initial publication of this story, Pruitt said, "This report is simply false. General Sessions and I are friends and I have always said I want nothing m ore than to see him succeed in his role."

Pentagon Audit: “There Will Be Unpleasant Surprises” -- For the first time in its history, the Department of Defense is now undergoing a financial audit. The audit, announced last December, is itself a major undertaking that is expected to cost $367 million and to involve some 1200 auditors. The results are to be reported in November 2018. “Until this year, DoD was the only large federal agency not under full financial statement audit,” Pentagon chief financial officer David L. Norquist told the Senate Budget Committee in March. Considering the size of the Pentagon, the project is “likely to be the largest audit ever undertaken,” he said.The purpose of such an audit is to validate the agency’s financial statements, to detect error or fraud, to facilitate oversight, and to identify problem areas. Expectations regarding the outcome are moderate.“DOD is not generally expected to receive an unqualified opinion [i.e. an opinion that affirms the accuracy of DoD financial statements] on its first-ever, agency-wide audit in FY2018,” the Congressional Research Service said in a new report last week. See Defense Primer: Understanding the Process for Auditing the Department of Defense, CRS In Focus, June 26, 2018.In fact, “It took the Department of Homeland Security, a relatively new and much smaller enterprise, about ten years to get to its first clean opinion,” Mr. Norquist noted at the March Senate hearing.In the case of the DoD audit, “I anticipate the audit process will uncover many places where our controls or processes are broken. There will be unpleasant surprises. Some of these problems may also prove frustratingly difficult to fix.”“But the alternative is to operate in ignorance of the challenge and miss the opportunity to reform.  Fixing these vulnerabilities is essential to avoid costly or destructive problems in the future,” Mr. Norquist said.

CIA Teams Up With Defense Industry To Undermine Korea Negotiations - In a new development that will shock no one, factions within the CIA attempted for the second time in just over a month to undermine President Trump's peace overtures towards North Korea by leaking information calculated to decrease confidence in Kim Jong Un's willingness to earnestly negotiate.On June 29, 2018, NBC News released a report quoting anonymous CIA officials who claimed that North Korea was increasing nuclear production at "secret sites" without providing any actual evidence for such claims. The report's credibility is further weakened by the fact that it also cited reports from a think tank which has strong connections to the defense industry and other private special interests.In disseminating their report, the CIA used NBC reporter Ken Dilanian as an outlet for leaks. As Disobedient Media previously reported, Dilanian was outed by the Intercept in 2014 as a CIA asset. In the aftermath of the disclosure, Dilanian's previous employers at the Tribune Washington and Los Angeles Times disavowed the disgraced journalist. In at least one instance, the CIA’s instructions to Dilanian appears to have led to significant changes in a story that was eventually published in the Los Angeles Times.  Since that time, Dilanian has persisted in pushing articles written by former CIA officials who continue to perpetuate the “Trump-Russia” collusion narrative without any regard to facts, such as Steven Hall’s Washington Post article titled: “I was in the CIA. We wouldn’t trust a country whose leader did what Trump did.” In the absence of hard evidence from the CIA to back their claims about North Korea, Dilanian cited the opinion of Clinton administration official Joel Wit and reports from 38north.org. 38north is a project run by the Henry L. Stimson Center. The Stimson Center's Board of Directors includes individuals associated with organizations such as Northrop Grumman, the Boeing Company, Warburg Pincus, the Carnegie Endowment, Mercy Corps, The Council on Foreign Relations, the Department of Defense, the CIA and US Department of the Treasury. Their Partners include the George C. Marshall Foundation, Saudi Arabia's Gulf Research Center and the Jinnah Institute.

Mike Pompeo under pressure to secure nuclear progress in North Korea visit - Weeks after Donald Trump declared the world a safer place following his historic summit with Kim Jong-un, Mike Pompeo is due to arrive in Pyongyang on Friday amid growing doubts over the regime’s willingness to abandon its nuclear weapons. The secretary of state is expected to meet Kim in person in Pyongyang, according to the White House, though details of the agenda have not yet been released. Pompeo, on his third visit to the North Korean capital, is expected to press Kim on a recent report suggesting that far from beginning the process of denuclearisation, North Korea was making “rapid upgrades” to its Yongbyon nuclear complex.Unnamed US intelligence officials also concluded that North Korea does not intend to completely give up its nuclear stockpile.Pompeo will also use his visit to consult and reassure Washington’s allies in the region, with meetings planned with Japanese and South Korean officials in Tokyo on Sunday. Japan has voiced support for the leaders’ Singapore declaration, but reacted cautiously to Trump’s decision to cancel a joint US-South Korea military exercise scheduled for August. Pompeo must establish how far North Korea’s nuclear and missile programmes have advanced before US officials can even attempt to draw up a potential timeline for America’s central demand – their complete, irreversible and verifiable dismantlement [CVID]. At present, the US has no reliable information on where all of North Korea’s production and testing facilities are located or the size of its ballistic inventory. 

North Korea says talks with Pompeo 'regrettable': report | TheHill: North Korea is reportedly criticizing talks with Secretary of State Mike Pompeo, calling the two days of meetings that ended Saturday “regrettable.” An unnamed spokesman for the North Korean Foreign Ministry in a statement accused the U.S. of unilaterally pressuring North Korea to denuclearize and “betraying the spirit” of the summit between President Trump and Kim Jong Un last month, according to the Associated Press. The statement said the discussions with Pompeo were “very concerning,” and suggested that the regime is no longer as willing to give up its nukes as it had previously been. Pompeo offered a differing view of the two days of talks, telling reporters that the conversations were “productive,” "in good faith," and that “a great deal of progress” had been made, according to the APHe told reporters "we made progress on almost all the central issues," noted State Department spokeswoman Heather Nauert on Twitter.Just before leaving Pyongyang, ⁦@SecPompeo⁩ gives US reporters a brief readout from his meetings. “These are complicated issues but we made progress on almost all the central issues. Some places, a great deal of progress, other places, there’s still more work to be done.” pic.twitter.com/wiP0J1447N— Heather Nauert (@statedeptspox) July 7, 2018 The discussions came weeks after Trump and Kim signed an agreement committing the U.S. to unspecified security guarantees in exchange for a denuclearized Korean peninsula. Trump critics said the deal was too advantageous to North Korea and did not secure enough for the U.S.

Trump repeatedly suggested invading Venezuela, stunning top aides – report - Donald Trump repeatedly raised the possibility of invading Venezuela in talks with his top aides at the White House, according to a new report. Trump brought up the subject of an invasion in public in August last year, saying: “We have many options for Venezuela, including a possible military option, if necessary.” But the president’s musings about the possibility of a US invasion were more extensive and persistent than that public declaration, according to the Associated Press. The previous day Trump reportedly took his top officials by surprise in an Oval Office meeting, asking why the US could not intervene to remove the government of Nicolás Maduro on the grounds that Venezuela’s political and economic unraveling represented a threat to the region. Quoting an unnamed senior administration official, the AP report said the suggestion stunned those present at the meeting, which included the then national security adviser, HR McMaster, and secretary of state, Rex Tillerson. Both have since left the administration. The administration officials are said to have taken turns in trying to talk him out of the idea, pointing out that any such military action would alienate Latin American allies who had supported the US policy of punitive sanctions on the Maduro regime. Their arguments do not seem to have dissuaded the president. 

Trump Sends Disturbing Letters to Nine NATO Leaders Before Key Summit -- In a sharply worded message to at least some countries in the 29-member alliance that didn’t meet defense spending thresholds — one that followed a general template but included additional language tailored to specific countries — Trump wrote that Americans were tired of funding Europe’s defense and wanted to see other NATO members carrying more of the load.“[It is] increasingly difficult to justify to American citizens why some countries do not share NATO’s collective security,” said the letter, which was described to Foreign Policy by U.S. officials and foreign diplomats. “I, therefore, expect to see a strong recommitment by [country] to meet the goals to which we all agreed,” it said. The version being sent to Germany contained some of the harshest language, according to the officials.... The coming meeting, starting July 11 and featuring the leaders of all NATO countries, could be a fiasco thanks to Trump’s unpredictable and brash behavior. “A no-news summit would be a good summit,” said one European diplomat who preferred not to be named discussing the upcoming event. “But at this point, we’re all scared shitless....” “I don’t think anybody would be dumb enough to predict what would happen,” said one NATO official based in Brussels. “I’m hopeful [the summit] will go smoothly in that he’ll only make a few obnoxious remarks.” From New York Times: “As we discussed during your visit in April, there is growing frustration in the United States that some allies have not stepped up as promised,” Mr. Trump wrote to Chancellor Angela Merkel of Germany in a particularly pointed version of the letter, according to someone who saw it and shared excerpts with The New York Times. “Continued German underspending on defense undermines the security of the alliance and provides validation for other allies that also do not plan to meet their military spending commitments, because others see you as a role model.” In language that is repeated in letters to the leaders of other countries, including Prime Minister Justin Trudeau of Canada and Prime Minister Erna Solberg of Norway, Mr. Trump said he understands the “domestic political pressure” brought to bear by opponents of boosting military expenditures, noting that he has expended “considerable political capital to increase our own military spending.” But the president seemed to suggest that the United States might adjust its military presence around the world if its allies do not step and spend more for their own security.

 Eagle-meets-Bear and the Syria tug-of-war | Asia Times: Ahead of the Eagle-meets-Bear Trump-Putin summit on July 16 in Helsinki, Syria-centered spin has gone into overdrive. Unknown sources have leaked what is billed as President Trump’s alleged Syria deal discussed with Jordan’s King Abdullah. Trump would “allow” Damascus, supported by Russian air power, to regain its territory along the borders of Jordan, Israel and Iraq. In return, President Putin and Bashar al-Assad would agree to establish an extended demilitarized zone (DMZ) along these same borders, off-limits to any Iranian forces. That would set the scene for Trump’s already announced desire to extract US forces out of Syria before October and the US mid-term elections. The president would be able to declare the proverbial “Mission Accomplished” in defeating Daesh or Islamic State. The CIA and the Pentagon are not exactly enthusiastic with Trump’s alleged Syria gambit, to say the least. For assorted neocons and powerful factions of the industrial-military-surveillance complex, “Assad must go” Syria simply cannot be traded off. And yet there’s nothing to trade. Syria cannot be “offered” to Russia because Russia is already the major player in deciding what happens in Syria, not only militarily but via the ongoing Astana format alongside Iran and Turkey. No wonder the alleged Trump “deal” was duly dismissed by the Kremlin. What will be negotiated in the Trump-Putin summit, as Asia Times has learned, is something completely different. This negotiation, incidentally, will happen after the NATO summit in Brussels and before the next Astana format meeting in Sochi on July 30, as confirmed by Russian Deputy Foreign Minister Sergei Vershinin.

Ahead of NATO and Putin summits, Trump’s unorthodox diplomacy rattles allies WaPo - President Trump will land in Europe next week amid fears that he will blow up a key summit focused on Europe’s defense and then offer concessions to NATO’s main adversary, Russian President Vladi­mir Putin. The allies’ worries and Moscow’s hopes are rooted in Trump’s combative approach to foreign policy. In recent days, Trump has told senior aides that he wants to slash U.S. spending on Europe’s defense if the allies are unwilling to contribute more to NATO, a senior administration official said. The private comments reflect a president who has shown little interest in the long history that undergirds America’s alliances or the collective foreign policy expertise of the U.S. government, according to current and former U.S. and European officials. Instead, he relies on his instincts and his ability to forge a personal bond with world leaders. White House officials tout the president’s willingness to question long-held assumptions and challenge America’s allies — who have underspent on security for decades — to contribute more to their own defense. But his approach has also heartened autocrats, such as Putin, who see in Trump someone willing to forgive past sins in pursuit of a deal, the officials said. And it has alarmed allies and some of Trump’s closest aides, who are concerned he may yield on issues such as Russia’s annexation of Crimea and its continuing destabilization of Ukraine. Even as his administration has imposed tough sanctions on Moscow and expelled Russian diplomats, Trump has avoided criticizing Putin. He will meet with Putin in Helsinki on July 16. “The president thinks he can be friends with Putin,” former national security adviser H.R. McMaster complained during his time in the White House, according to U.S. officials. “I don’t know why, or why he would want to be.” The president’s approach also has been corrosive to relations with allies who increasingly believe that Trump — on trade, NATO and diplomacy — is undercutting the post-World War II order in pursuit of short-term, and likely illusory, wins. 

Putin Is Preparing a Deal Trump Can Tout After Summit - Kremlin officials are in intense negotiations with their counterparts in Washington to strike at least one deal they hope will let President Donald Trump tout his summit with Vladimir Putin as a triumph that justifies steps to repair relations.At the top of the list for the July 16 meeting in Helsinki, Finland, is Iran’s role in Syria, an issue that Moscow is simultaneously negotiating with Tehran, a senior Russian official said on condition of anonymity because he’s not authorized to comment on the record.Putin has agreed in principle to U.S. and Israeli demands that Iranian-backed forces in southern Syria be kept away from Israel’s border, replaced with troops loyal to the government in Damascus, two Kremlin advisers said.After studying Trump’s meeting with North Korean leader Kim Jong Un, during which he announced a surprise halt to U.S. military exercises with South Korea, Putin decided he needs to negotiate with the billionaire personally, the senior official said, without elaborating. The two leaders may meet without aides, as Trump and Kim did in Singapore, Kremlin spokesman Dmitry Peskov said. U.S. Ambassador to Russia Jon Huntsman confirmed plans for a one-on-one meeting during a conference call on Thursday, saying Trump will go into the encounter with his “eyes wide open” about Putin’s intentions.Trump has shifted away from his predecessor’s policy of demanding the ouster of Syrian leader Bashar al-Assad, a position formulated before Russia turned the tide of the country’s civil war in Assad’s favor with Iran’s help. U.S. National Security Adviser John Bolton, who met with Russia’s recently re-elected president to lay the groundwork for the summit, told CBS News on Sunday that Assad is no longer “the strategic issue” in Syria -- Iran is. “We’ll see what happens when the two of them get together,” said Bolton, who’s long advocated regime change in the Islamic Republic. “There are possibilities for doing a larger negotiation on helping to get Iranian forces out of Syria and back into Iran, which would be a significant step forward.”

Why Ayatollah Khamenei will not negotiate with Trump -- In a June 13 Washington Post article, former US ambassador to the UN Zalmay Khalilzad argued that the Trump administration's approach towards Iran - withdrawing from the nuclear deal and imposing crippling sanctions - has a reasonable chance of bringing its leadership to the negotiating table. The logic behind this idea is that imposing "the highest level" of economic sanctions will not only prevent Iran from supporting its proxies and destabilising the Middle East, but will also lead to economic hardship and possibly mass discontent, which could shake the regime's stability. This approach was tested under the Obama administration and eventually resulted in Iran sitting down for talks in 2013 and signing a nuclear deal in 2015 under President Hasan Rouhani.But the idea that this could happen again in the aftermath of US President Donald Trump withdrawing from the nuclear deal is not just optimistic - it is flawed. It is not in the interest of the hardliner leadership in Iran to sit down for direct talks with the Trump administration.Unlike North Korean leader Kim Jong-un, Ayatollah Ali Khamenei does not need the US to legitimise his regime and, in fact, negotiating with the Americans might have the exact opposite effect. It would not only delegitimise his domestic rhetoric, but also push away supporters at home and abroad. Ayatollah Khamenei has always expressed suspicion about the US and its foreign policies. Even after the 2015 deal was signed, he warned against and blocked any further negotiations. The US withdrawal from the nuclear deal was the ultimate proof he needed for his claim that Washington could not be trusted. Khamenei's anti-Americanism is the central component of his political appeal. Resisting the Western attempts to overthrow the Islamic Republic, dominate Iran and colonise the region is one of the main pillars of his politics.

White House must choose between tough Iran sanctions and moderate gasoline prices: Kemp (Reuters) - The White House can drive Iran’s oil exports to zero, or it can have moderate U.S. gasoline prices, but it probably cannot have both.  The awkward tension between the administration’s foreign policy priority (tough Iran sanctions) and its electoral calculation (to keep gasoline prices low) explains its increasingly frequent comments about oil prices.  President Donald Trump has already blamed the Organization of the Petroleum Exporting Countries for the sharp rise in prices that has pushed the average cost of U.S. gasoline close to $3 per gallon. “Looks like OPEC is at it again,” the president wrote in a message on Twitter on April 20. “Oil prices are artificially Very High! No good and will not be accepted!” Under pressure from the United States, OPEC and its allies agreed on June 23 to boost production by an implied 1 million barrels per day (bpd) from the start of July. Saudi Arabia is expected to provide most of the increase, with smaller contributions from the United Arab Emirates, Kuwait and Russia, though specific country allocations were not included in the accord.  But the agreement failed to bring prices down and senior U.S. officials have since indicated they want an even larger increase to dampen the market.  The president has now weighed in by pressing Saudi Arabia for a much bigger increase in oil production, with another message on Twitter on June 30: “Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference,” the president wrote. “Prices to high! He has agreed!”  Saudi Arabia’s official news agency confirmed the telephone call though it made no mention about volumes of extra oil.  In a media briefing on June 26, a senior State Department official repeatedly stated the administration wants U.S. allies as well as India and China to cut imports from Iran to zero and does not plan to issue waivers. So far in 2018, Iran has been exporting well over 2 million bpd of crude and condensates, according to the Joint Organizations Data Initiative. The problem is that the total amount of unused and available spare capacity held by OPEC members was just 3 million bpd at the end of May, International Energy Agency data shows. Most of the remaining spare capacity is in Saudi Arabia (2 million bpd) with smaller volumes in Iraq (330,000 bpd), the United Arab Emirates (330,000 bpd) and Kuwait (220,000 bpd). Other analysts put the level of spare capacity much lower.

Iran threatens to block Strait of Hormuz over US oil sanctions -- A potential confrontation between the US and Iran is brewing in the Strait of Hormuz after Tehran threatened to block the Gulf passageway in retaliation for Washington’s looming sanctions against Iranian oil exports – a threat the US military said would be immediately countered. The Trump administration is demanding all countries end imports of Iranian oil by 4 November as part of its new policy of hostility towards Tehran after Washington’s unilateral exit from the 2015 nuclear agreement. Iran’s president, Hassan Rouhani, responded during a rare visit to Europe this week by signaling that Tehran could disrupt regional crude shipments and cut its cooperation with the UN nuclear watchdog. On Thursday the commander of Iran’s elite Revolutionary Guards, whose forces patrol the Strait of Hormuz – through which one-fifth of the world’s oil passes in tankers – said the Guards were ready to put Rouhani’s words into action if necessary. The US navy signaled it was ready to confront Tehran militarily in response. Mohammad Ali Jafari, the Guards commander, was quoted by the semi-official Tasnim news agency as saying: “We will make the enemy understand that either everyone can use the Strait of Hormuz or no one.” 

Pentagon and Iran trade threats over renewed oil sanctions --Washington and Tehran have traded threats that the strategic Strait of Hormuz, through which roughly a fifth of the world’s petroleum passes, could become the flashpoint for the tensions generated by the Trump administration’s attempt to derail the Iran nuclear agreement and reimpose crippling economic sanctions against the country. The US Central Command, which oversees the Pentagon’s far-ranging military interventions from North Africa and the Middle East to Central Asia, issued a statement Thursday asserting that it stood “ready to ensure the freedom of navigation and the free flow of commerce” through the strait, while insisting that the role of the US military was to “promote security and stability in the region.”  The Pentagon’s threats followed remarks by Iranian President Hassan Rouhani during a visit to Europe aimed at countering escalating US pressure to choke off European trade and investment with Iran.Speaking at a press conference in Bern alongside his Swiss counterpart Alain Berset, Rouhani said it was “incorrect and unwise” for Washington to believe that “one day all oil producing countries would export their surplus oil and Iran would be the only country that cannot export its oil.” Rouhani’s remarks were followed up on Thursday, by a statement from the commander of the Islamic Revolutionary Guard Corps, which directs Iranian naval operations in the Persian Gulf. Maj. Gen. Mohammad Ali Jafari welcomed the Iranian president’s “decisive” response to the threats by the Trump administration and expressed confidence in his force’s ability “to make the enemies understand what using the Strait of Hormuz by all or none could mean.” . Tehran has repeatedly made it clear that the cutting off of its oil exports, which account for 60 percent of Iran’s foreign earnings and provide the lion’s share of the government’s revenues, is a red line that would spark retaliation. Military analysts have estimated that Iran could tie up shipping for a month, unleashing a sharp rise in energy prices and potential global economic turmoil.

Trump Echoes Iranian Hard-liners -- Jason Rezaian comments on the president’s embarrassing repetition of a hard-line Iranian cleric’s lie:Trump — just like Zolnour and his fellow thugs in the Iranian regime — has little interest in factual accuracy. He’s far more interested in assailing his domestic foes (in this case, his predecessor in office). And in this sense, we see a striking overlap between Trump and the mullahs. It’s a sort of call-and-response relationship.They may hate each other, but both thrive on whipping up their domestic audiences with “revelations” about the sins of their political rivals. Insular Iranian hard-liners attack their counterparts who favor engagement with the West by accusing them of sucking up to the United States. Trump and his conservative allies use any hint of compromise with Iran (such as the nuclear deal) to brand the Democrats as traitors. Iran hawks frequently endorse policies that work to the benefit of their hard-line counterparts in Iran, but it is less common for them to endorse the other side’s bogus claims to attack their critics at home. The president echoed absurd, false accusations leveled by Rouhani’s hard-line domestic opponents and first published by an Iranian propaganda outlet in an attempt to score points against Obama and other supporters of the nuclear deal. He never bothered to verify the claim because he automatically believes anything that seems to support his rejection of the JCPOA.  Opponents of the nuclear deal in the U.S. and Iran typically don’t agree about why the deal was a bad one, since our hard-liners imagine that the deal was a huge giveaway to Iran and theirs think it was exactly the opposite, but in this case some from each side are united in spreading the same falsehood to attack the deal’s supporters. It is in keeping with the poor quality of the “debate” over the nuclear deal that the opponents’ claims are completely false and without any merit. It is a measure of how pathetic the case against the nuclear deal has always been that its opponents have to make things up about it, and it is a mark of how terrible Trump’s judgment is that he readily believes and endorses obvious falsehoods without question when they suit his prejudices.

US And Israel Form "Working Group" To Overthrow Iran Government - When economic protests quickly turned into widespread anti-regime protests engulfing some 75 mostly provincial cities and towns across Iran in late December and into January, we took note of the State Department's brazen pro-revolutionary rhetoric calling for "elements inside of Iran" to lead a "transition of government"  in spokesperson Heather Nauert's own words (echoing prior statements by then Secretary of State Rex Tillerson).We posed the question then, and raised it again with renewed unrest in Tehran and the southern city of Khorrmashahr over this past week: are we witnessing regime change agents hijacking economic protests?Indeed a high level joint US-Israeli "working group" has been meeting for months with just this goal in mind as Axios confirms in a bombshell new report: "Israel and the United States formed a joint working group a few months ago that is focused on internal efforts to encourage protests within Iran and pressure the country's government."Israeli journalist Barak Ravid reports for Axios that, "Two Israeli officials told me the team was formed as a part of the U.S.-Israeli framework document on countering Iran," noting the team has met "several times during the last few months" and it has oversight by none other than John "Bomb Iran" Bolton and his Israeli counterpart Meir Ben-Shabbat. With the 2015 Obama-brokered JCPOA now in tatters after the US pullout, and with the Assad government emerging victorious after a seven year proxy war largely aimed by Western allies at rolling back Iranian influence in the Levant, it appears the White House stands ready to bring the Syria model of covert destabilization to Syria.

Feeding the Monster: Washington’s spinelessness enables Israeli brutality - This is what Ocasio-Cortez, who called the shooting of more than 130 Gazans a “massacre,” actually said and wrote: “No state or entity is absolved of mass shootings of protesters. There is no justification. Palestinian people deserve basic human dignity, as anyone else. Democrats can’t be silent about this anymore. I think I was primarily compelled [to speak out] on moral grounds because I could only imagine if 60 people were shot and killed in Ferguson. Or if 60 people were shot and killed in the West Virginia teachers’ strikes. The idea that we are not supposed to talk about people dying when they are engaging in political expression just really moved me.”  Five hours later, when I arrived home in Virginia I went to pull up the article I had read in the morning to possibly use it in a piece of my own and was somewhat surprised to discover that the bit about Israel had been excised from the text. It was clearly yet another example of how the media self-censors when there is anything negative to say about Israel and it underlines the significance of the emergence of recent international media reporting in The Guardian and elsewhere regarding how Jewish billionaire Sheldon Adelson largely dictates U.S. foreign policy in the Middle East. That means that the conspiracy of silence over Israel’s manipulation of the United States government is beginning to break down and journalists have become bold enough to challenge what occurs when pro-Israel Jews obtain real power over the political process. Adelson, for what it’s worth, wants war with Iran and has even suggested detonating a nuclear device on its soil to “send a message.”

The ‘ultimate deal’ that Jared Kushner is proposing for Palestine would strip the people of all their dignity -- Is there no humiliation left for the Palestinians? After Oslo, after the “two state solution”, after the years of Israeli occupation – of “Area A” and “Area C” to define which kind of occupation the Palestinians must live under – after the vast Jewish colonisation of land thieved from its Arab owners, after the mass killings of Gaza, and Trump’s decision that Jerusalem, all of Jerusalem, must be the capital of Israel, are the Palestinians going to be asked to settle for cash and a miserable village? Is there no shame left?  For the Palestinians are soon to be awarded the “ultimate deal” – “ultimate”, as in the last, definitive, terminal, conclusive, no-more-cards-to-play, cash-in-your-chips, go-for-broke, take-it-or-leave-it, to-hell-with-you, cease-and-desist, endgame “deal”. A pitiful village as a capital, no end to colonisation, no security, no army, no independent borders, no unity – in return for a huge amount of money, billions of dollars and euros, millions of pounds, zillions of dinars and shekels and spondulix and filthy lucre, the real “moolah”. “I believe,” quoth Crown Prince Kushner this week, “that Palestinian people are less invested in the politicians’ talking points than they are in seeing how a deal will give them and their future generations new opportunities, more and better paying jobs and prospects for a better life.” Is Trump’s son-in-law – “adviser” on the Middle East, real estate developer and US investor – delusional? After three Arab-Israeli wars, tens of thousands of Palestinian deaths and millions of refugees, does Jared Kushner really believe that the Palestinians will settle for cash?

Lindsey Graham Inside Turkish Occupied North Syria: US Pullout Would Be "Terrible" - A certain outspoken pro regime change interventionist and neocon hawk from South Carolina must have heard that the war in Syria is winding down.No doubt he spit out his coffee mid-gulp when reading a recent Washington Post headline declaring, "The world learns to live with Assad in Syria" set just above an image of the Syrian president with the bold-faced type, Here To Stay.   So what was Senator Lindsey Graham to do?Naturally, he popped up in Northern Syria early this week, where he made a surprise visit to Manbij (near government-held Aleppo) to declare before cameras that a premature US troop withdrawal would be "terrible". In a video of the brief trip which also included Senator Jeanne Shaheen (D-NH), Graham is shown speaking with local US-backed forces, assuring them he would tell President Trump that it's “important we stay here and help you, you are friends of the US and if we leave it will be terrible, I will tell the story of Manbij to my colleagues, it is a place of hope in a region that needs hope." Though leaders of local Kurdish forces (the Syrian Democratic Forces, SDF) smiled for the camera, it is unclear what their real feelings on the high level delegation might have been, as just days prior Graham met with Turkish President President Recep Tayyip Erdogan, and said after the meeting, "Turkey needs to be a strategic partner for the US in a win-win fashion."

US May Deploy Marines To Taiwan Embassy, Risking China Fury - Looks like a duck, swims like a duck, and quacks like a duck... but when does an embassy "American Institute" finally gain official status as an embassy? Some say that the moment the Marine security detail shows up — a specially trained unit attached to every American embassy throughout the world — it's pretty much a done deal.   CNN has reported a new bombshell in US-China-Taiwan relations which is already sending shock waves throughout the region as it seems to negate the official US stance of the "One China Policy" — but which landed with a whimper in Western media over the weekend.CNN reports:The State Department has requested that US Marines be sent to Taiwan to help safeguard America's de facto embassy there, two US officials tell CNN, prompting China to urge the US to "exercise caution."One US official said that while the request for a Marine security guard was received several weeks ago, it has not yet been formally approved and coordination about its deployment is ongoing between the State Department's Diplomatic Security Service and the Marines. Considering that unnamed officials leaked news of the impending Marine guard deployment to the "de facto embassy" in Taiwan, it appears well on its way to happening, which would constitute the first time in almost 40 years that US Marines will stand guard over a diplomatic post in Taiwan.  So as not to offend China, the US deals with Taiwan via the "American Institute in Taiwan" as opposed to the Government of Taiwan. As to the uncertain question of whether or not the US has actually pulled the trigger, CNN continues: A spokesperson for the State Department would not say whether the request had been made, telling CNN, "We do not discuss specific security matters concerning the protection of our facility or personnel."

Blowback - Nasdaq Plunges After China Blocks Micron Chip Sales - Potentially in response to Trump's actions on China Mobile, a Chinese court temporarily banned Micron Technology chip sales, cutting the U.S. company off from the world’s largest semiconductor market.Yesterday we specifically warned that following yet another targeted attack at a prominent Chinese company, it is only a matter of time before China responds in kind, and considering the size and prominence of China Mobile, one wonders how long until China takes aim at none other than the world's largest company, Apple.Well it's not yet Apple but it's getting there and Micron shares are tumbling on the headlines to 2-month lows...Bloomberg reports that in a patent ruling in favor of Taiwanese rival United Microelectronics (UMC), the Fuzhou Intermediate People’s Court of the People’s Republic of China issued a preliminary injunction stopping Micron from selling 26 products, including dynamic random access memory and Nand flash memory-related products, UMC said in a statement Tuesday. Micron said it’s preparing a response.The case is part of a broader dispute between the two companies centering on accusations that UMC acted as a conduit for the theft of the Micron’s designs in an attempt to help China grow its domestic chip industry and replace imports that rival oil in total value.A Chinese antitrust regulator is already investigating Micron and its Korean rivals, the companies have said. Local media has reported that authorities are looking into increases in chip prices. China accounted for more than 50 percent of Micron’s revenue in fiscal 2017, according company data, and that has sent Nasdaq reeling...

Trump administration tells ZTE it can restart some operations - The US has said it will allow the Chinese tech giant ZTE to temporarily re-start some business activities as it considers lifting a seven-year ban imposed on the firm earlier this year. In April, the US found ZTE had violated trade bans with Iran and North Korea. The firm was then blocked from buying parts from US suppliers - a move that threatened to destroy its business. The order allowing ZTE to resume some business comes amid heightened trade tensions between the US and China. Under the new order, state-owned ZTE would now be allowed to support its existing handsets in the US and continue operation of existing networks, among some other activities. But the US commerce department said the existing ban slapped on the firm in April remained "in full force and effect". ZTE is currently attempting to meet a range of requirements that would allow it to resume full business activities in the US - which have included paying a $1bn penalty, hiring a compliance team chosen by the US, and replacing much of its management board, among other measures. The Trump administration's deal-making with Beijing, that would see the ban on ZTE lifted, has been criticised by a group of bipartisan US Senators who want to see the ban kept in place citing national security and other concerns. 

‘Buy American’: Trump’s Top Team To Close Arms Deals At Farnborough Airshow - The White House is sending a high-level delegation to this month's Farnborough Airshow to push the Trump administration's "Buy American" drive aimed at boosting exports of weapons and aircraft, industry sources familiar with the matter said. The official U.S. delegation will be the highest ranking to attend the air show near London in recent memory and will be led by White House trade adviser Peter Navarro, one of the main architects of the new arms export policy. The White House's "Buy American" initiative, first reported by Reuters in April, aims to speed up arms deal approvals and increase the advocacy role of senior U.S. officials, including President Donald Trump, in closing foreign sales, while giving greater weight to business interests in sales decisions that have long prioritized human rights. The policy, officially named the Conventional Arms Transfer Policy, also loosens U.S. export rules on equipment ranging from fighter jets and drones to warships and artillery. The "whole of government" approach, from Trump and his cabinet down to military attaches and diplomats, is meant to help drum up billions of dollars more in arms business. Trump himself has pushed weapons sales with foreign heads of state. While Trump will be in Britain the weekend before the July 16 to July 22 Farnborough show - the largest commercial and military aerospace trade fair of the year - his current schedule does not show him attending. 

Canada slaps tariffs on $13 billion worth of US goods | TheHill: Canada announced Sunday that it has moved forward with retaliatory measures against U.S. steel and aluminum tariffs, slapping $13 billion in its own tariffs on American exports. CNN reported that over 40 U.S. steel products will see tariffs of 25 percent. A 10 percent tariff will be levied on more than 80 other American items, including toffee, maple syrup and coffee beans.Chrystia Freeland, Canada’s foreign minister, said Friday, "We will not escalate, and we will not back down." Freeland said she had spoken to U.S. Trade Representative Robert Lighthizer multiple times this week about how to resolve the dispute over the tariffs. The tariffs come amid an escalating feud between Canada and the U.S. over trade policy, after President Trump imposed steep steel and aluminum tariffs last month on Canada and other longtime U.S. allies. The retaliatory measures were in the works for weeks after Canadian Prime Minister Justin Trudeau vowed during last month's Group of Seven summit in Canada that the country would "not be pushed around." Trudeau's comments drew the ire of Trump and his advisers, who declared that the prime minister had "stabbed us in the back." "The tariffs introduced by the United States on Canadian steel and aluminum are protectionist and illegal under [World Trade Organization] and [North American Free Trade Agreement] rules, the very rules that the United States helped to write," Freeland said Friday. 

Exclusive: A leaked Trump bill to blow up the WTO - Axios has obtained a leaked draft of a Trump administration bill — ordered by the president himself — that would declare America’s abandonment of fundamental World Trade Organization rules.   The draft legislation is stunning. The bill essentially provides Trump a license to raise U.S. tariffs at will, without congressional consent and international rules be damned.   The bill, titled the "United States Fair and Reciprocal Tariff Act," would give Trump unilateral power to ignore the two most basic principles of the WTO and negotiate one-on-one with any country:

  1. The "Most Favored Nation" (MFN) principle that countries can't set different tariff rates for different countries outside of free trade agreements;
  2. "Bound tariff rates" — the tariff ceilings that each WTO country has already agreed to in previous negotiations.

"It would be the equivalent of walking away from the WTO and our commitments there without us actually notifying our withdrawal," said a source familiar with the bill.

  • "The good news is Congress would never give this authority to the president," the source added, describing the bill as "insane."
  • "It's not implementable at the border," given it would create potentially tens of thousands of new tariff rates on products. "And it would completely remove us from the set of global trade rules."

Trump was briefed on this draft in late May, according to sources familiar with the situation. Most officials involved in the bill's drafting — with the notable exception of hardline trade adviser Peter Navarro — think the bill is unrealistic or unworkable. USTR, Commerce and the White House are involved. In a White House meeting to discuss the bill earlier this year, Legislative Affairs Director Marc Short bluntly told Navarro the bill was "dead on arrival" and would receive zero support on Capitol Hill, according to sources familiar with the exchange.  Navarro replied to Short that he thought the bill would get plenty of support, particularly from Democrats, but Short told Navarro he didn't think Democrats were in much of a mood to hand over moreauthority to Trump.   Spokeswoman Lindsay Walters said, "It is no secret that POTUS has had frustrations with the unfair imbalance of tariffs that put the U.S. at a disadvantage. He has asked his team to develop ideas to remedy this situation and create incentives for countries to lower their tariffs. The current system gives the U.S. no leverage and other countries no incentive."   Congress is already concerned with how Trump has been using his trade authorities — just look at recent efforts by Republican Sens. Bob Corker and Pat Toomey and Democratic Sen. Michael Bennet to roll back the president's steel and aluminum tariffs. Read the full text of the draft bill (Axios retyped the leaked document to protect our source):

Trump Cites Car-Tariff Threat as Biggest Trade Leverage: —President Donald Trump said he sees his threat to impose global auto tariffs as his biggest weapon to extract concessions from trading partners, shedding more light on his broader trade policy strategy. “You know, the cars are the big one,” Mr. Trump told Fox News in an interview broadcast Sunday. “We can talk steel, we talk everything. The big thing is cars.”Mr. Trump was referring to the prospect of imposing 20% tariffs on imported vehicles in the name of national security, a proposal his administration is studying.The U.S. car market is much bigger than the steel market, which Mr. Trump has previously targeted for tariffs. The economies of Mexico, Germany and Japan in particular are much more dependent on exporting vehicles to the U.S.  Mr. Trump’s comments show the significance he places on cars in his broader effort to pressure countries spanning from China to Germany to Canada to give the U.S. what he considers more favorable trade deals.  Some of Mr. Trump’s supporters worry such tactics will only intensify the wave of retaliatory measures already slamming into the U.S. economy following earlier tariffs. Several Republican lawmakers are trying to find ways to limit Mr. Trump’s powers to take such moves.Administration officials have said no auto-tariff decision has yet been made, but they have suggested they are looking to do so before the November midterm elections.Mr. Trump used a similar rationale—invoking a rarely used Cold War-era law that gives the president wide discretion to block imports—to justify recently imposed steel and aluminum tariffs. His latest remarks suggest that was a dry run for a bigger fight on cars. In discussing ongoing talks to renegotiate the North American Free Trade Agreement with Mexico and Canada, for example, the Republican president said in the Fox interview that “if they’re not fine, I’m going to tax their cars coming into America, and that’s the big one.”“The European Union is possibly as bad as China just smaller, OK,” Mr. Trump said. “It’s terrible what they did to us. European Union—take a look at the car situation. They send a Mercedes in; we can’t send our cars in.”

EU Threatens $300 Billion Retaliation If US Moves Ahead With Auto Tariffs - More than a week after President Trump threatened to slap a 20% tariff on auto imports from the European Union, Brussels has issued a written warning to the US Department of Commerce with a threat of its own: If the Trump administration moves ahead with the auto tariffs, the bureaucrats in Brussels won't hesitate to respond with tariffs on $300 billion in US goods, according to the Financial Times. The threat comes as Trump doubled-down on his trade threats in an interview with Fox Business's Maria Bartiromo that aired Sunday morning, where Trump criticized the EU's $151 billion trade surplus. Trump initially threatened to impose the 20% tariffs if the EU doesn't eliminate trade barriers to US automotive imports.  The warning marked the first time that Brussels has filed a written submission with the Commerce Department, which is presently considering Section 232 auto tariffs. In the letter, which was obtained by the FT,   Brussels warned that Trump's threatened auto tariffs would risk sparking a global trade war that could ultimately harm employment in the US and slice billions of dollars off US GDP. That echos a warning from GM, issued in comments to the Commerce Department's investigation, where the carmaker said tariffs would lead to a "smaller company."In a sign of the EU’s exasperation at Mr Trump’s confrontational trade policy, which has already stoked tensions over steel and aluminium, the document said the move "could result in yet another disregard of international law" by the US. It said imposing the car tariffs would not be accepted by the international community and would "damage further the reputation" of the US. A trade group representing global automakers recently warned that Trump's threatened tariffs could raise prices for US consumers by up to $6,000 per car. The $300 billion figure proposed by the EU is roughly equivalent to the value of US imports of cars and parts, which reached $330 billion last year, according to the FT.

EU Calls Trump’s Bluff on Auto Tariffs as Trump Tries Dead on Arrival WTO Exit Plan  by Yves Smith - “Nice car industry you have. Shame if anything happened to it.”Readers may recall that Trump was all gung ho to give China an even bigger bop on the nose when China threatened to make a tit-for-tat response to Trump’s scheduling $50 billion of Chinese goods for tariffs. Trump claimed he was going to up the ante to as much as $400 billion in Chinese goods, with the centerpiece being the high-tech sectors given prime billing in the Made in China 2015 plan.US soyabeans, one of the Chinese targets, swooned, and the US stock market wasn’t too happy either, although the averages eked out a meager gain despite the trade headwinds (due perhaps to tax cut fueled buybacks).  But have no fear! Trump’s response is to double down, and say that his next big trade idea is to slap 25% tariffs on auto and auto parts imports. And he probably likes that Asian markets, including China’s highly leveraged stock market, are taking a nose dive. From the Financial Times: A key index of major stocks in Shanghai and Shenzhen tumbled in one of its worst days this year on Monday, leading broad declines across Asia amid rising fears the US-China trade dispute could spread into a global trade war. Now Trump does have a point, even though he’s not been articulating it very well. The US has lower tariffs on many EU and Chinese goods than they do on ours, such as on cars. As Wolf Richter explained: Another purpose [of tariffs] is to persuade other countries to lower their own tariffs. It has been an uneven playing field for decades, stacked against US workers. The problem with slapping tariffs on any good that are important to extended supply chains is that it’s like using a sledgehammer to try to defuse a bomb. The results are not likely to be pretty. GM made clear last week that it was Not Happy about Trump’s plans to increase tariffs on cars and car parts. From the Financial Times on Friday: General Motors has joined the corporate backlash against Donald Trump’s trade wars, warning that the US president’s threatened tariffs on imports of cars and parts would hurt the US economy and could lead it to reduce its manufacturing in the country. Today, the Financial Times reports that the EU plans to strike back: Donald Trump’s threat to hit car imports with punitive tariffs risks sparking global retaliation against as much as $300bn of US products, Brussels has warned.

Commerce Secretary Wilbur Ross: It’s ‘premature’ to say whether Trump’s threatened EU auto tariffs will come to pass  - It's too "premature" to say whether President Donald Trump's auto tariffs will come to pass, Commerce Secretary Wilbur Ross told CNBC on Monday.Ross also said it's too early to tell whether the United States will withdrawal from the World Trade Organization."We've made no secret of our view that there are some reforms needed at the WTO," Ross said in a "Squawk Box" interview.He continued: "There really is a need to update [or] synchronize its activities, and we'll see where that leads. But I think it's a little premature to talk about simply withdrawing from it."Axios reported the Trump administration has drafted a bill that allows the White House to unilaterally raise tariffs without congressional consent. That means the world's largest economy would be acting outside WTO rules.Ross has repeatedly defended the administration's aggressive approach on tariffs, saying it will deter allegedly unfair trade practices that Trump pledged to end. Ross was criticized late last month by Senate Republicans and Democrats over what they called a confusing and damaging Trump administration process of imposing tariffs.

Every US-made car is an import. That’s bad news for automakers All new cars sold in the United States will cost more — to build and probably to buy — if the Trump administration imposes an auto tariff.That's because every car sold in America is at least partly imported.The Commerce Department is considering tariffs on cars assembled at foreign plants and on foreign-made auto parts. Every car assembled in the United States contains a significant percentage of foreign parts, according to government data."There are no purely American vehicles," said Michelle Krebs, senior analyst at AutoTrader. "These are global automakers who use global sources for all types of parts."Automakers are already warning that tariffs would raise their costs, in some cases by thousands of dollars per car. General Motors said last week that it could be forced to cut jobs.US regulators track how "domestic" every car is by measuring the percentage of each vehicle's parts and manufacturing that comes from either the United States or Canada.   According to that measure, the two most "American" cars are both Hondas — the Odyssey minivan and Ridgeline pickup. Three-quarters of each vehicle's components are made in the United States or Canada.

The Trade War is Here: Some of the New “Facts of Life” -  In Madeleine Albright’s new book, dramatically titled Fascism: A Warning, she slams the anti-globalization crowd, claiming yet again that globalization is here to stay—it’s a “fact of life”. It must be another of those facts of life that we are seeing today, like “Donald Trump will never be elected president” or “UK voters will ultimately reject Brexit” or perhaps that there will never be a trade war?  If we believe Albright, humans have finally invented something permanent, nature-like, eternal–not coincidentally, eternity is the classic time of myth. Albright is not alone in being unable to recognize reality, even when staring straight at it: this morning Fox News kept speaking of a “potential” trade war being underway. When actual is pushed away into the zone of the potential, we have a serious reality-recognition problem at work. It means that neoliberal free traders—which unites both Fox News and Madeleine Albright, trivial “resistance” motifs regardless—lack the basic terms for speaking about what they are seeing, even as stock markets resume their plunge. But when is a trade war a trade war for Fox News? What extreme, draconian conditions of spectacular conflict and destruction need to sweep over cities like a dark toxic fog for them to finally agree that there is a trade war? Were they expecting “shock and awe”? Yes, the trade war is now on. We are officially in Day #2 of an international trade war that involves the biggest players in the world economy—the US, China, Japan, the European Union—along with Canada, Mexico, Brazil and others.

Chamber Of Commerce Turns On Trump With Campaign To Oppose Tariffs - The US Chamber of Commerce has been opposed to President Trump's trade war since before Trump even won the Republican nomination. Back in March 2016, CoC President Tom Donohue warned that Trump "would be impeached" if he followed through with his threats of slapping tariffs on China and Mexico. Now, more than two years later, the chamber - which bills itself as the largest interest interest group representing US businesses - is launching an all-out offensive to oppose Trump's trade policies, according to Reuters.  The campaign, which officially launched Monday, is described as "an aggressive effort by the business lobbying giant. Using a state-by-state analysis, it argues that Trump is risking a global trade war that will hit the wallets of US consumers." "The administration is threatening to undermine the economic progress it worked so hard to achieve," said Chamber President Tom Donohue in a statement to Reuters. "We should seek free and fair trade, but this is just not the way to do it."Of course, Donohue's criticism begs the question: If this isn't the solution to achieving "free and fair" trade, then what is? The campaign represents a major shift in the Chamber's stance toward the administration after it applauded the Trump tax cuts. The CoC represents 3 million members and has historically worked closely with Republican presidents and lawmakers. Yet, as it turns out, its plan of attack isn't all that different from the European Union's attempts to dissuade Trump from moving ahead with his tariffs, lest they spark a global trade war. To wit, both entities have resorted to warning Trump about the negative economic impact his tariffs might have on states that he won during the 2016 race. Of course, just because Trump's trade policies might trigger an economic backlash doesn't mean his blue-collar voters will abandon him en masse. Workers at Harley-Davidson's Menomonee Falls plant told the FT that they support Trump's trade moves despite the fact that "they could end up as collateral damage."

Trump goes to war with corporate America - President Donald Trump is now at full-scale war over trade policy with some of the Republican Party’s staunchest allies in big business, including executives at iconic American brands such as General Motors and Harley-Davidson who previously shied away from criticizing an often irascible president. Trump’s approach has created a high-stakes showdown without recent political precedent: A Republican president betting that his populist approach to trade will thrill his working-class base and blow away any short-term economic fallout or reduced political support from the nation’s largest business organizations. His message to corporate America so far: I don’t care what you say, my base is with me. On the other side, corporate titans and market analysts fear Trump is on the cusp of damaging the American economy — and that he will not recognize the failure of his approach until it’s too late. “With every successive firecracker that Trump sets off, we see corporate leaders and groups emboldened and ready to go on the public stage to take him on,” said Nancy Koehn, a business historian at Harvard. “This isn’t the natural order of history that large business groups oppose a Republican president. Trump has a from-the-gut sense that his base will be with him come hell or high water. But it’s a very big bet with no certainty of success.” The latest salvo in Trump vs. Big Business came Monday when the U.S. Chamber of Commerce, long a stalwart backer of Republican economic policies, broke sharply with the president. “The administration is threatening to undermine the economic progress it worked so hard to achieve,” Chamber President Tom Donohue said in announcing a campaign to oppose Trump’s tariffs. “We should seek free and fair trade, but this is just not the way to do it.”

Trump's EU trade war costing manufacturers in US and eurozone - Donald Trump’s trade tariffs are driving up costs for US manufacturers and exacerbating a slowdown for eurozone factories, new figures showed on Monday, as the EU and the US edge closer towards a full-scale trade war with potentially damaging consequences for the global economy. According to the latest survey of American factories by IHS Markit – closely watched for any early warning signals for the world’s largest economy – the president’s tariffs added to the cost of raw materials and components in June. It also contributed to the lengthiest delays for supplies reaching factory production lines since the poll was started in 2007. Against the backdrop of an increasingly bitter dispute between the EU and the US, a parallel survey of eurozone manufacturers found economic activity dropped to the lowest level for 18 months in June, with the worst of the slowdown coming in Germany, France and Greece.  The snapshot for the 19-nation bloc extended a period of slower growth for factories under way across the euro area since the start of this year. The survey also pointed towards tougher conditions ahead as Brussels and Washington exchange threats over import tariffs. The European commission, the EU’s executive arm, warned the White House on Monday it would be prepared to use tariffs against as much as $300bn (£228bn) of US products should Donald Trump slap higher taxes on European automotive imports to America. The president had threatened last month to impose tariffs of 20% on imports of cars from the EU after Brussels carried through plans to tax American consumer goods – such as whiskey, cigars and Harley-Davidson motorcycles – in retaliation against US tariffs on European steel and aluminium.The latest exchange in the trade standoff, alongside a trade dispute between the US and China, rocked financial markets on Monday as traders bet the conflict could escalate further, with the FTSE 100 closing down by 89 points, or 1.2%, and the pan-European Stoxx 600 list of the continent’s leading shares declining 0.8%. Wall Street also fell in early trading on Monday, with the Dow Jones index falling 0.6%.  Wilbur Ross, the US commerce secretary, said on Monday afternoon the turbulence would not deter Trump from shaking up the global trade system. “All these claims that the sky is falling are at least premature and probably inaccurate,” he said in an interview with the CNBC news channel.

Musical instrument manufacturer threatens to move overseas due to Trump tariffs | TheHill: Musical instrument manufacturer Moog is threatening to move overseas due to President Trump's recently imposed tariffs on some Chinese products. The synthesizer designer based out of North Carolina is the latest major American company threatening to shift its business overseas over increased operation costs caused by hikes on tariffs, NPR News reported Monday. In an email to customers, the company warned that the Trump administration’s tariffs "will immediately and drastically increase the cost of building our instruments, and have the very real potential of forcing us to lay off workers and could (in a worst case scenario) require us to move some, if not all, of our manufacturing overseas." The company in the letter explained that although it has made efforts to make its circuit boards with U.S. suppliers when affordable, even if it means paying a 30 percent markup in contrast to what it would pay for the same product overseas, the majority of the circuit boards and associated components for Moog’s instruments are shipped in from China. As a result, the company is warning it may have to shift its business overseas as it will not be able to avoid "this substantial cost increase."The Trump administration is preparing to slap tariffs on $34 billion worth of goods imported from China, with another round to follow. China has promised to retaliate. 

  Trade Fight Threatens Farm Belt Businesses – WSJ -  Mounting trade disputes, spurred by U.S. threats to withdraw from the North American Free Trade Agreement and tariffs on billions of dollars’ worth of goods from key trading partners, have cut U.S. agricultural exports and sent commodity prices tumbling. Many farmers, who depend on shipments overseas for one-fifth of the goods they produce, say they are anxious, especially because they are already expecting bumper harvests or grappling with a dairy glut. “We live and die by trade,”  Since April, duties the U.S. has levied on goods from China, Mexico, Canada and the European Union have sparked retaliatory tariffs and trade threats, targeting American farm goods from pork to cheese to apples. Disquiet among farmers grew in June as crop prices fell thanks to benevolent U.S. weather and additional duties expected from China on products like soybeans, for which it is the U.S.’s top customer. The total value of this year’s U.S. corn, soybean and wheat crops dropped about $13 billion, or 10%, in June, said Chris Hurt, an agricultural economist at Purdue University. On Monday, U.S. soybean prices continued their downward spiral, heading toward the lowest level in a decade. The planned tariffs on U.S. soybean exports come as farmers nationwide have boosted plantings of the crop, betting on the oilseeds to deliver stronger returns than corn during a years long slump in the farm economy. For farmers like Mr. Smith, who grows corn and soybeans on 1,500 acres in Cotton Plant, Ark., the 16% decline in soybean prices alone translates into a nearly $100 per-acre drop in the value of his crop. “That’s $100,000 that has disappeared into thin air,” he said. “We were already in the red, and now it’s even worse.” Researchers at the University of Illinois and Ohio State University estimate that over four years, a 25% tariff on U.S. soybean imports by Beijing would result in an average 87% decline in income for a midsize Illinois grain farm. The loss would pressure farmland prices, they say, prompting a more than $500,000 decline in the farm’s net worth by 2021. Farmers for Free Trade, an advocacy group, recently rolled out its third advertisement warning about the harmful consequences of trade fights for farmers. U.S. farm and agribusiness groups in June joined manufacturing, retail and technology organizations imploring Congress to step up oversight of the president’s actions. 

Trade: It’s About Class, Not Country - Dean Baker - There is a fundamental flaw in the way that both Donald Trump and his critics generally talk about trade. They make it an issue of country versus country, raising the question of whether China, Canada and other trading partners are treating the United States fairly as a country. Trump of course does this more explicitly with his “America First” rhetoric and complaints about other countries cheating us because they run trade surpluses, but his critics also often use similar language. After all, it is common for the adults in the room to make assertions about China’s theft of “our” intellectual property. Have you had any intellectual property stolen by China? The economist and policy types who have been pushing the trade agenda of the last four decades often make assertions like “everyone gains from trade.” This is what is known in the economics profession as a “lie.”   No models show that everyone gains from trade. Standard models show that some groups are benefitted by trade and others are hurt. The usual story is that the winners gain more than the losers lose. This means in principle that the winners can compensate the losers so that everyone is better off. In the real world, this compensation never takes place, so when we talk about trade we’re talking about a policy that redistributes from some groups to others. Our trade policy over the last four decades has been quite explicitly designed to redistribute income upward. This was the point of deals like NAFTA, or admitting China to the WTO.  These deals were about putting US manufacturing workers in direct competition with much-lower-paid workers in the developing world. The expected and actual effect of these policies is to reduce employment in manufacturing. This also put downward pressure on the wages of the manufacturing workers who kept their jobs, as well as on the wages of less-educated workers more generally, since manufacturing has historically been a source of relatively high-paying employment for workers without college degrees. This is not a story of free trade. Our trade deals did little or nothing to make it easier for highly educated professionals to work in the United States. As a result, our doctors earn on average roughly twice as much as doctors in other wealthy countries, even as our manufacturing workers earn considerably less than their counterparts in Germany and several other countries.  

Trump’s new trade bill is peak Trump -- Thanks to a scoop from Axios, we know a new trade bill has been written at the White House's request: the "United States Fair and Reciprocal Tariff Act." Besides making for an extremely unfortunate acronym, the bill would blow up the global trade order. It would return U.S. policy to one-on-one trade deals with every single other country, and give the president more or less unilateral power to wage trade wars with everybody.The White House's bill has basically zero chance of becoming law. But it's still a useful glimpse into what Trump truly unbound on trade would look like. The first thing to realize is that the United States is a member of the World Trade Organization (WTO), an international agreement that sets rules for how countries can engage with each other on trade issues and how they can handle disputes. Trump's bill does not explicitly withdraw the U.S. from the WTO. But in effect that's exactly what it does.First, the WTO says you can't treat some trade partners differently than other trade partners, unless you have an official deal with that country granting them certain privileges. Trump's bill says no, the U.S. will slap whatever tariffs it wants, on whatever country it wants, for whatever reason it wants.Second, the WTO puts a ceiling on how high tariffs on trading partners can get. Trump's bill would ignore that ceiling, too.Third, and just as important, the bill would give the president the unilateral authority to carry out all these changes as he sees fit, with no input from Congress. We've been headed in this direction for many, many decades: Law after law has transferred ever more power over tariffs and trade policy from the legislature to the executive branch. But this new bill would take that trend to its extreme endpoint. Congressional Republicans are far too fractured and cowed by Trump to take away any of his existing powers. But plenty of them are still very nervous about his tariffs. It seems safe to say there's no majority for expanding his powers further, either. Peter Navarro, one of Trump's key trade advisers, reportedly thinks the bill could get wide support from Democrats. But this severely overestimates how much the party has altered its own pro-globalization views, and how willing it is to cooperate with Trump on anything.

Trade war fall-out, charted -- The threat of an escalating trade war between the US and well, the world, seems to have roiled markets once again over the past fortnight. The latest development in the saga is President Trump's saber-rattling over the WTO, which Treasury Secretary Steve Mnuchin was quick to dampen last week.  We all know Mexico and Canada, US NAFTA partners, as well as China and the EU are firmly in Trump's sights, but who else is set to lose out?As it turns out, pretty much everyone else. Well, that's according to a short memo this morning from Pictet Asset Management. The piece contains the following chart, detailing which economies create the most value when participating in the world's complex, and therefore delicate, supply chains, as a percent of total exports: No surprise Taiwan top the list, as the self governed island is the home of iPhone manufacturer Foxconn, chip-giant Taiwan Semiconductor and smartphone maker HTC.The Czech Republic, Bulgaria and Poland's inclusion high on the list may come as more of a surprise to some of our readers. However if you caught James Meek's excellent essay last year on Cadbury moving its UK operations from Somerdale to Skarbimierz, Poland, it may not come as a total shock. If Trump's rhetoric turns into action, and trading partners retaliate, expect markets to take a hit, according to Pictet's Luca Paolini:

 Four Trade War Scenarios: From 'One-&-Done' To 'All Hell Breaks Loose - On July 6th, President Donald Trump’s tariffs on $34 billion worth of Chinese goods are set to take effect. And, as Bloomberg's Chief Asia Economist, Tom Orlik, notes, with an additional $16 billion coming close behind, and China threatening retaliation, it looks like the opening shots of a trade war are about to be fired. We map out four scenarios:

  • Scenario One: $50 billion and done. The U.S. imposes tariffs, China retaliates. Financial markets shudder. Fearing panic, both sides send reassuring messages and hold fire on further measures. In this scenario there would be a negligible impact on the U.S. economy and a maximum drag on China’s growth of just 0.2 ppt next year. A broadening of tariffs to affect $250 billion of Chinese exports could drag on China’s economic growth by up to 0.5 ppt, we estimate.
  • Scenario Two: $50 billion, plus a slump in financial markets. The U.S. imposes tariffs, China retaliates, equity prices fall sharply, creating a second-round effect from falling wealth and tighter financing conditions. Fearing worse, both sides hold fire. In this scenario, growth in the U.S. weakens by 0.4 ppt next year, China is mostly unscathed by the decline in equities, thanks to insulation from global markets, but the 0.2 ppt drag from tariffs remains. And the world economy experiences a roughly 0.2 ppt drag to growth as well.
  • Scenario Three: The U.S. imposes 10% tariffs on all imports and the rest of world retaliates. In other words -- we find ourselves in a global trade war. It would take time for the biggest impacts to be felt, but in 2020 the drag on annual GDP growth might be 0.4 ppt for the U.S., 0.2 ppt for China and 0.2 ppt for the world.
  • Scenario Four: The U.S. imposes 10% tariffs on all imports, the rest of the world retaliates, and financial markets slump. Layering on a tightening of financial conditions might raise the peak GDP growth impact to 0.8 ppt in the U.S. and 0.4 ppt for the world. China, being insulated from world equity shocks, might escape the additional burden of tighter financial conditions.

A global trade war combined with the interconnectedness of global financial markets means a shock to U.S. equities would be felt in most corners of the world.

China can ‘win big battles’, economic team says as trade row with United States heats up | South China Morning Post: Chinese Vice-Premier Liu He on Monday chaired a meeting of the country’s top team responsible for managing and containing financial and economic risk, the government announced, just days before the US is set to impose new tariffs on goods imported from China. The Financial Stability and Development Committee, which comprises some of President Xi Jinping’s must trusted officials, convened to discuss economic threats and “external risks”, according to a statement published late on Tuesday on the government’s website. While it did not directly mention China’s long-running trade dispute with the US, it appeared to reference it by saying the country has “favourable conditions to win big risk control battles and cope with external risks”.  The statement said also that Liu, who has spearheaded Beijing’s trade talks with Washington, listened to a report by People’s Bank of China governor Yi Gang on the government’s plans for handling financial risk through 2020.Yi is also a vice-chairman of the committee and head of its office at the central bank. It seems likely the committee was behind the announcement made on Tuesday by the central bank that it would support the yuan.

Europe Turns Down Chinese Offer For Grand Alliance Against The US - Publicizing its growing exasperation in dealing with president Donald Trump who refuses to halt the tit-for-tat retaliation in the growing trade war with China - which is set to officially begin on Friday when the US slaps $34 billion in Chinese exports with 25% tariffs - but has a habit of doubling down the threatened US reaction to every Chinese trade counteroffer (after all the US imports far more Chinese goods than vice versa)... ... China has proposed a novel idea: to form an alliance with the EU - the world's largest trading block - against the US, while promising to open up more of China's economy to European corporations. The idea was reportedly floated in meetings in Brussels, Berlin and Beijing, between senior Chinese officials, including Vice Premier Liu He and the Chinese government’s top diplomat, State Councillor Wang Yi, according to Reuters. Willing to use either a carrot or a stick to achieve its goals, in these meetings China has been putting pressure on the European Union to issue a strong joint statement against President Donald Trump’s trade policies at a summit later this month.  However, perhaps because China's veneer of the leader of the free trade world is so laughably shallow - China was and remains a pure mercantilist power, whose grand total of protectionist policies put both the US and Europe to shame - the European Union has outright rejected any idea of allying with Beijing against Washington ahead of a Sino-European summit in Beijing on July 16-17.

China denies it will be first to impose tariffs on $34bn of US goods -- China has denied it will fire the opening salvo in an escalating trade dispute with the US, insisting that it would not bring in 25% tariffs on $34bn (£26bn) of American goods before a move from Washington. Both sides have threatened to impose similarly sized tariffs on 6 July, but because of the 12-hour time difference, it was thought the Chinese tariffs on US imports ranging from soybean to stainless steel pipes could take effect earlier. However, China’s finance ministry issued a statement on Wednesday saying that it would not be the first to levy tariffs. “The Chinese government’s position has been stated many times. We absolutely will not fire the first shot, and will not implement tariff measures ahead of the United States doing so.” The US will implement a 25% tariff on $34bn of Chinese imports – 818 product lines ranging from cars to vaporisers and “smart home” devices – on Friday. There had been hopes the US and China might step away from the measures, but neither side has backed down. Economists have warned that the tariffs will damage economic growth and cost jobs, and could escalate into a full-blown trade war between the world’s two largest economies. Last month, the Mercedes-Benz maker Daimler became the first major company to issue a profit warning on the back of the trade dispute. The German business makes Mercedes SUVs in the US and ships them to China, its biggest market. Donald Trump has threatened to escalate the conflict by imposing further tariffs on up to $200bn of Chinese goods, if Beijing retaliates on Friday.

China Rejects US "Blackmail" On Eve Of Trade War, Vows To Fight Back -- With just hours left until the US officially declares trade war on China at midnight on Friday, when the Trump admin enacts tariffs on $34bn in Chinese products and Beijing retaliates instantly in kind, China on Thursday rejected "threats and blackmail" ahead of the tariff hike, striking the usual defiant stance in the dispute which companies have warned could flare into a full-blown trade war and chill the global economy. A government spokesman said Beijing will defend itself if U.S. President Donald Trump goes ahead Friday with plans to raise duties on Chinese goods in the escalating conflict over technology policy. The Chinese government has already issued a list of U.S. goods for retaliation, but the Commerce Ministry said it will wait to see what Washington does.“China will not bow in the face of threats and blackmail, nor will it be shaken in its resolve to defend global free trade,” said ministry spokesman Gao Feng at a news conference. “China will never fire the first shot,” Gao said. “However, if the United States adopts taxation measures, China will be forced to fight back to defend the core interests of the nation and the interests of the people.”As for shooting, Gao said that the "U.S. is shooting itself in the foot and hurting the world" with its tariff hikes. Friday’s tariff hikes are the first stage in threatened U.S. increases on up to $450 billion of imports from China over complaints Beijing steals or pressures foreign companies to hand over technology. According to Goldman calculations, if the full scope of Trump's proposed protectionist measures is implemented, this would raise the total amount of tariffs the Trump administration has proposed from around $500bn to nearly $800bn, or about 4 times the cumulative amount that had been proposed as of a few month ago, before President Trump proposed tariffs on global auto imports on national security grounds.

Carney tells Trump escalation of trade war will hurt US most - The governor of the Bank of England has warned Donald Trump that further escalation of US trade disputes around the world would damage the American economy most, with potential to lower US growth by around 5%. Mark Carney said the tariffs announced so far by the president on goods from China, the EU and several other countries, combined with their retaliatory measures, had already slowed the global economy. Carney believes any additional measures would have a significantly more damaging impact. Delivering a speech in Newcastle on Thursday, he said: “At the moment, protectionism is largely just talk (and tweets). But what if rhetoric becomes reality?” Revealing forecasts made by Threadneedle Street, the governor said the American economy would suffer a 2.5% drop in GDP as a result of falling trade volumes alone over three years, should the White House increase US import tariffs by about 10 percentage points on all of its trading partners. The world economy would take a hit to GDP of just over 1%, while there would be a smaller impact on the EU and the UK. The fallout from the scenario – akin to a full-scale trade war – would, however, be exacerbated by weaker levels of business investment and higher borrowing costs for companies as central banks raised interest rates, meaning the hit for growth could be doubled. “There is a growing possibility that trade uncertainty could crystallise the longstanding risks of a snap back in long-term interest rates, increased risk aversion and a general tightening in global financial conditions,” he said. Carney said the impact from the president’s use of import tariffs against major trading partners including the EU and China, alongside their retaliatory measures, was already being seen through measures of global exports and manufacturing in recent weeks. “There are some tentative signs that this more hostile and uncertain trading environment may be dampening activity,” he said. Surveys of factory output in the US and the eurozone earlier this week showed firms were facing higher prices as a consequence of the import tariffs, as well as American manufacturers having the longest delivery delays on record.

With Tariff Deadline at Hand, Businesses Brace for the Fallout - Businesses are bracing for disruptions in sales and supply chains as the U.S. and China hurtle toward levying tit-for-tat tariffs on billions of dollars in automotive products, farm crops and other goods.Barring a last-minute reprieve, the U.S. is set to impose $34 billion in tariffs on imported Chinese machinery, auto parts and medical devices at 12:01 a.m. Eastern time Friday. China said it is prepared to respond immediately with equivalent tariffs on U.S. products including soybeans and sport-utility vehicles.The battle threatens to disrupt commerce around the globe, and the consequences are already being felt.An American chemical company has been rushing its shipments to China to beat the clock. A Beijing steakhouse has dropped U.S. beef from its menu. And China has been shifting soybean purchases to Brazil, from which it bought nearly 30% more beans in May than it had a year earlier, according to research firm CEIC. Chinese importers have mostly stopped buying U.S. soybeans, said Paul Burke of the U.S. Soybean Export Council, and agricultural giant Cargill Inc. worries about a longer-term shift to other suppliers.By value, soybeans are the top item targeted by Beijing’s proposed tariffs; China imported around $14 billion in U.S. soybeans last year, according to Wind Information  In all, China’s tariffs would cover 545 categories of U.S. products, while the U.S. tariffs would cover 818 categories of products from China. “The two largest economies in the world are linked,” . “The impact of trade conflict will lead to serious consequences for economic growth and job creation and hurt those who are most vulnerable across the globe.” At a packed briefing for the news media Thursday, Chinese Commerce Ministry officials said $20 billion of the Chinese-made goods targeted by U.S. tariffs are made by foreign companies, including U.S. companies. “The U.S. is firing shots to the world, including to itself,” said Commerce Ministry spokesman Gao Feng. Among the likely U.S. victims: medical-equipment makers such as Varian Medical Systems Inc., which exports to the U.S. cancer-detection systems manufactured in Beijing. Varian also has plants in California, Europe and Brazil, but the complexity of the manufacturing process makes shifting production difficult.

Trump's trade war with China is finally here — and it won't be pretty, analysts say — Some said the day would never come, that it was all a bluff. But as the Independence Day fireworks cool in Washington, the eve of the trade war has arrived in China’s capital, where government leaders keep reminding people: We did not start this, but we will fight back. President Trump’s first tariffs are scheduled to hit $34 billion of Chinese imports on Friday, and Beijing plans to swiftly respond with levies on an equal amount of goods. Border officers here could receive the order as early as midnight to slap new taxes on hundreds of U.S. products, including pork, poultry, soybeans and corn.And so would begin an unprecedented commerce battle between the world’s two largest economies — a conflict analysts fear could rattle markets, cripple trade, and undermine ties between the United States and China at a time when the administration seeks Beijing’s cooperation on North Korea.  As the global business community watches the clock, China is moving to pin the fallout on Trump, framing the United States as a bully the Asian nation is forced to confront. A state media editorial this week called the United States’ “dictatorial bent” a global threat, while officials said China will “absolutely not” take the first swing. “The United States will be opening fire on the whole world and also opening fire on itself,” Gao Feng, a spokesman for the Chinese Commerce Ministry, said Thursday.Those measures appear to be aimed at the United States’ heartland, which helped lift Trump into the White House. Farmers in the overwhelmingly red Midwest fear they will lose access to China’s lucrative market and be left with the bill for excess produce and livestock.What happens next is anyone’s guess, analysts say, since both sides have pledged not to back down.“It’s a dark day tomorrow for global trade,” predicted Jörg Wuttke, former president of the European Union Chamber of Commerce in China.Uncertainty hangs over companies, supply chains and investment plans, he said. U.S. firms in China are already reporting spikes in random inspections at ports. One U.S. manufacturer said Chinese authorities on average used to inspect 2 percent of the vehicles it sent abroad. Since June, agents have taken a closer look at every product.

The US-China trade war is about to get real -- On Friday, the world's top two economies are due to exchange fire by hitting $34 billion of each other's exports with steep new tariffs, the first moves in what may become a devastating cycle of retaliation. The planned measures have already unsettled markets and provoked warnings from companies of damage to their bottom lines and higher prices for consumers. President Donald Trump and his advisers argue the tariffs are necessary to pressure China into abandoning unfair practices such as stealing intellectual property and forcing American companies to hand over valuable technology. Beijing denies it's in the wrong and says it's ready to fight a trade war until the end. "The United States will be opening fire on the whole world and also opening fire on itself," Chinese Commerce Ministry spokesman Gao Feng told reporters on Thursday. He warned that the US tariffs will hurt foreign companies that export goods from China to the United States. Underpinning the dispute about technology is Trump's anger at America's $375 billion deficit in goods trade with China. But after three rounds of negotiations between the two sides, including a Chinese pledge to significantly increase purchases of American products, Trump decided to go ahead with the tariffs.  The clash with China comes as the Trump administration is also fighting over trade with American allies such as Canada and the European Union. US tariffs on steel and aluminum imports have provoked retaliatory measures against billions of dollars of American exports. Trump has added to the tension by threatening new tariffs on cars.The US tariffs on China that take effect Friday target more than 800 different items, including industrial machinery, medical devices and auto parts. Beijing plans to fire back by hitting 545 American products such as SUVs, meat and seafood.  The US measures are expected to take effect first, shortly after midnight ET on Friday. That's around midday in Beijing, and the Chinese government will wait until then to retaliate, as it "will never fire the first shot but will be forced to strike back," Gao said

 Trump fires opening shot in trade war against China --  The Trump administration has gone ahead with its threat to impose tariffs on China under section 301 of the 1974 US Trade Act, imposing levies on $34 billion worth of Chinese goods from midnight, with a further $16 billion to be targeted in the near future. The action is the first shot in a direct trade war against China, with President Donald Trump telling reporters yesterday that more is to come.Pointing to the inevitability of escalation, Robert Holleyman, former deputy US Trade Representative in the Obama administration, said: “Once these tariffs start going into effect, it’s pretty clear the conflict is real. If we don’t find an exit ramp, this will accelerate like a snowball going down a hill.”China said it would respond immediately with “equal scale, equal intensity,” with major targets including soybeans and sport utility vehicles (SUVs). According to lists published by both sides, the US tariffs will cover 818 categories of goods from China, while the Chinese measures will hit 545 categories of products from the US.One of the key issues now is how the US responds to the Chinese counter-measures. In the war of words leading up to today’s actions, Trump threatened to impose additional tariffs on up to $400 billion worth of Chinese goods if Beijing retaliated against the US.Warning of the consequences, Bruce Blakeman, a senior executive at the US agricultural giant Cargill, said: “The impact of trade conflict will lead to serious consequences for economic growth and job creation and hurt those who are most vulnerable across the globe.” Such is the intertwining of the operations of the major corporations that the US measures directed against China will also hit American and other foreign-owned firms. At a press conference in Beijing yesterday, Chinese Ministry of Commerce spokesman Gao Feng said: “The US is firing shots to the world, including to itself.”

China hits retaliation button, launching tariffs as trade war starts - After three rounds of failed talks, a trade war between the world’s two largest economies is on. On Friday, China’s Foreign Ministry spokesman said China had imposed countermeasures after America’s tariffs came into force.Lu Kang, a spokesman for the ministry, said China’s tit-for-tat measures “had taken effect immediately after the implementation of the US tariffs”.Lu was speaking after Washington’s 25 per cent duties on US$34 billion worth of Chinese goods came into force earlier in the day.China’s Ministry of Commerce had said earlier that China would fight back against the US and report to the World Trade Organisation. “China will not fire the first shot, but is inevitably forced to strike back to defend the core interest of the nation and its people,” a statement from the ministry said. “We will report to the World Trade Organisation on a timely basis.”  US President Donald Trump has threatened to target another US$400 billion in Chinese products with tariffs if Beijing continues to hit back.

Chinese Ports Begin Delaying Clearing Of US Goods -- Rumors that US companies have been experiencing unspecified "difficulties and delays" while trying to get their goods through customs in China have been circulating for weeks - ever since reports surfaced alleging that Chinese officials had warned US executives that China would come down hard on US firms in retaliation for Trump's trade war. And now that the Trump administration has finally imposed the first round of tariffs, Reuters is reporting that several major Chinese ports are delaying the clearing of goods from the US as officials await further instructions from the central government. These delays could seriously disrupt imports - especially of agricultural products like pork and soybeans which were targeted by Beijing for tariffs.  An official at the port of Shanghai told Reuters that the clearing of some US imports through customs had been halted.There did not appear to be any direct instructions to hold up cargoes, but some customs departments were waiting until they had received official guidance from the central government on imposing hefty import tariffs on hundreds of products, the sources said.A wine merchant in Shanghai, one of the country’s busiest trading hubs, said customs brokers were also slowing the clearance process because of confusion about how and when to implement duties."They’re holding everything ... because there’s uncertainty," he said.[...]"But overall, this weekend they should be able to identify what the taxes are and how they should be implemented, and they should be processed as normal." Meanwhile, a commodities trader in Shandong province said he was told by customs officials that the clearance of goods from the US that are on Beijing's "list" will be delayed. Among the goods being targeted by tariffs, transportation equipment, electronics and agricultural products, among others, were high on the list. American fruit, pork, nuts, wine and - of course - soybeans, with a 25% tariff. The chart below from JP Morgan is a rough breakdown of expected tariffs by industry (however, some of the announced tariffs have yet to be implemented).

U.S.-China trade war to be fought in the trenches (Reuters Breakingviews) - The U.S.-China trade war will be fought in the trenches, and it’s going to get ugly. The first round of tariffs hits on Friday, and U.S. President Donald Trump says they might come to cover more than $500 billion of goods. Exporters will feel the pain first, but uncertainty will also dampen investment, impede research and twist reform. It marks a moment of mourning for those who hoped the world’s two largest economies could work things out. The American tariffs kick in after midnight in Washington (0401 GMT) on July 6, covering $34 billion of imports. That will be followed by taxes on another $16 billion. Trump said Thursday that the final amount of imports covered could exceed $500 billion. Beijing will retaliate in kind, at least at the start. The initial round of U.S. duties cover just 2 percent of China’s total exports, calculate analysts at JPMorgan. They reckon that even if the White House slapped a 25 percent tariff on every Chinese product sold in the United States, Chinese economic growth would slow by only around 0.5 percentage points. More damage could come from economic aftershocks. Equity markets in China and the United States have swooned already, in part because investors worry that global supply chains will need to reroute. Some American businesses say they are already scaling back or postponing capital spending because of uncertainties around trade, according to minutes from the Federal Open Market Committee. In China, the government has been forced to moderate monetary policy to cushion financial markets. The conflict is likely to escalate beyond trade. The Trump administration last month curbed visas for Chinese students, and Congress looks set to toughen vetting of foreign investment in the country, which will restrain Chinese capital. In the People’s Republic, Reuters reported the bureaucracy may have already started to move against American companies. Administrative punishments can range from approval delays to product boycotts to blocking deals – like Qualcomm’s attempt to buy NXP. In addition, China’s reform process might slow, as officials hold back liberalisations for use as concessions during future negotiations. The root of the conflict is mutual mistrust between China and the United States, and waning confidence in the benefits of openness. Such suspicion may ultimately do more damage than tariffs. 

 "Shooting And Robbery Are Frequent": China Warns Its Citizens About Risks Of Travel To The US -- The Chinese Embassy in Washington issued a security advisory last week, warning Chinese citizens traveling to the US that "shooting, robbery, and theft are frequent." Tourists were also warned to “be alert to suspicious people around you, avoid going out alone at night." In addition to getting killed and mugged, the embassy warned Chinese tourists to be aware of issues including expensive medical bills, searches and seizures by customs agents, telecommunications fraud and natural disasters.Further trolling the US, the alert published on the embassy's website last Thursday said that "public security in the United States is not sufficient. Cases of shootings, robberies, and theft are frequent."  Commenting on the notice, China's Foreign Ministry said summer is usually the peak season for Chinese citizens to visit the US and that it was the Chinese Embassy's duty to warn tourists about potential risks in the country, in response to questions over if the warning is related to the tensions between China and the US.

Russia Joins Global Trade War - Imposes Tariffs On US Energy, Mining Imports - Whether this is a coordinated response is unclear - and certainly on a much smaller scale - but Bloomberg reports that Russian Prime Minister Dmitry Medvedev signed a decree this morning imposing higher tariffs on U.S. products in retaliation for U.S. duties on metals imports, according to Economy Ministry statement.  Reuters reports that Russia's additional duties will apply to imports of fiber optics, equipment for road construction, oil and gas industry, metal processing and mining, according to an economy ministry statement.Russia will impose duties on goods which have Russian-made substitutes, Economy Minister Maxim Oreshkin is quoted as saying in the statement.“The compensation measures will be applied in the form of additional, higher rates of import duties ranging from 25% to 40% of the price of imported goods. Duties will be imposed on some U.S. goods, the analogues of which are produced in Russia. In particular, the measures cover some types of road construction equipment, oil and gas equipment, metalworking machines, rock drilling equipment, and optical fiber,” Minister Maxim Oreshkin said as quoted by the ministry.“The financial damage inflicted on Russian exporters by the U.S. trade restrictions amounts to $537.6 million. This is the amount of additional duties that Russian suppliers have to pay in the U.S. The current increase of duties allows us to compensate for only part of the damage amounting to $87.6 million. This is compensation that Russia has the right to recover under the WTO rules,” he said.

Global economy in jeopardy because of trade war between US, China and EU, warns WTO - An escalating trade war between China, the US and the EU is putting global economic growth in jeopardy and the effects are already beginning to show, the World Trade Organisation said on Wednesday.Tit-for-tat sanctions between the major economic powers put the global trading system at "potentially large risk", the WTO said in its most damning assessment yet of the tariff war sparked by Donald Trump’s levies on imports of steel and aluminium.China and the EU have both slapped their own retaliatory tariffson billions of dollars of i mports from the US with Beijing set to enact the latest round on Friday.“This continued escalation poses a serious threat to growth and recovery in all countries, and we are beginning to see this reflected in some forward-looking indicators,” WTO director general Roberto Azevedo said in a statement.The WTO’s report looked at the group of 20 leading economies, known as the G20. It found that those countries enacted 39 new trade restrictions between mid-October last year and mid-May this year, affecting goods including iron and steel, plastics and vehicles. The figure is double the number introduced in the previous seven-month period. “The marked increase in new trade restrictive measures among G20 economies should be of real concern to the international community,” Mr Azevedo said. The US president Donald Trump has implemented a series of tariffs as a warning to countries which he says treat America unfairly when it comes to trade. International trade deals such as the North American Free Trade Agreement (Nafta) have been “very, very bad” for the US, Mr Trump has said. But the WTO called on world leaders to de-escalate the situation to protect the economy.

The global trade slowdown that businesses have been watching for may already be underway -  Business surveys published this week show that global export growth has slowed to a relative crawl after strong and synchronized expansion in 2017. The WSJ’s Mike Bird and Riva Gold report the slowdown across markets world-wide is likely to have a greater impact on trade than the developing conflict among the U.S., China and other major economies. J.P. Morgan Asset Management latest survey of manufacturing purchasing managers showed new exports were barely above growth level last month, with that measure at its weakest point in nearly two years after weakening every month since a January peak.  That’s been reflected in recent subdued growth numbers at some U.S. seaports. The broader trade figures suggest last year’s 4.8% rise in global merchandise trade—the strongest since 2011—is unlikely to be repeated.

Growth in Trade Is Already Starting to Slow – WSJ - Even before a round of U.S. tariffs levied on China comes into force Friday, there are signs that global trade is already cooling. Business surveys published this week show that global export growth, strong in 2017, has slowed to a relative crawl—helping to drive sharp stock-market falls in big exporting nations like South Korea and Japan. The data suggest that the synchronized world-wide growth that sustained global markets and company earnings for much of last year is already starting to run on empty. And that slowdown is likely to have a greater impact on trade than the developing conflict among the U.S., China and other major economies, analysts and investors say. Companies in sectors like consumer electronics are already suffering. For nearly half a year, surveys of purchasing managers in manufacturing have indicated dwindling international demand growth, as major economic regions like the eurozone and China come off the boil. The new-exports portion of JP Morgan’s Global Manufacturing PMI fell to 50.5 in June, its weakest in nearly two years. The figure remains above 50, indicating export orders are still rising, but it has grown weaker every month since hitting its most recent peak at 54.2 in January.The orders data closely mirror year-on-year changes in world trade volumes, suggesting last year’s 4.8% rise in global merchandise trade—the strongest since 2011, according to the World Bank, and representing an extra $1.13 trillion worth of goods changing hands—is unlikely to be repeated. The volume of global trade is so large that even modest changes in its rate of growth are more consequential than what is directly at stake in the row between the U.S. and China. U.S. tariffs due to be implemented on Friday cover $34 billion in Chinese goods; China is levying retaliatory tariffs on an equivalent amount of American exports. China’s customs agency unexpectedly issued trade data that showed growth in exports to the U.S. slowing earlier this week, although some analysts raised doubts about the reliability of government statistics.

A change is coming to US-Mexico relations | TheHill: The winner of Sunday’s presidential election in Mexico is poised to bring profound changes to the country’s relationship with the U.S., at a time when the two nations find themselves increasingly at odds over President Trump’s policies. Andrés Manuel López Obrador, known colloquially as AMLO, campaigned on a radical anti-corruption ticket. But his campaign approach to U.S.-Mexico relations was in many ways similar to that of his opponents, as Trump and his policies remain deeply unpopular across Mexico’s political spectrum. "AMLO was actually quite restrained about the United States during the campaign; all candidates were critical [of Trump]," said Earl Anthony Wayne, who was U.S. ambassador to Mexico under former President Obama. López Obrador is expected to bring a markedly different tone to bilateral relations than that of current President Enrique Peña Nieto, whose cautious and diplomatic approach to Trump was almost universally reviled by Mexican voters. Still, López Obrador is likely to face many of the same challenges on key issues, from the North American Free Trade Agreement (NAFTA) to immigration to personal relations with Trump. "He will have to walk that thin, fine line that the current government has had to walk down for the past two years," said Christopher Wilson, deputy director of the Woodrow Wilson Center's Mexico Institute. 

 Trump congratulates Mexico's new president: 'I look very much forward to working with him' | TheHill: President Trump on Sunday night congratulated the winner of Mexico's presidential election, a left-wing populist who has vowed to take a tougher stance against the U.S. president. Andrés Manuel López Obrador beat out the candidate representing the ruling PRI party on Sunday amid growing discontent over the country's rampant crime and corruption. A third-time presidential candidate, López Obrador has publicly derided Trump's plans to build a wall along the border between the U.S. and Mexico and has said he will demand respect from the White House. Trump, who has had a tense relationship with current Mexican President Enrique Peña Nieto, offered kind words to López Obrador after his resounding victory over PRI candidate Jose Antonio Meade. "Congratulations to Andres Manuel Lopez Obrador on becoming the next President of Mexico. I look very much forward to working with him," Trump tweeted. "There is much to be done that will benefit both the United States and Mexico!" Relations between the two countries have taken a dramatic turn for the worse under Trump, due in large part to the president's frequent attacks on immigrants from Central America and his vow to build a wall and have Mexico pay for it. Trump also announced new tariffs on Mexican imports, which were promptly answered by Mexico with corresponding retaliatory measures on U.S. goods. 

Mexico election: Trump and López Obrador discuss ‘development deal’ - Mexico's President-elect, Andrés Manuel López Obrador, and US President Donald Trump have spoken on the phone after the left-wing candidate won Mexico's presidential election on Sunday. The president-elect said that he and the US leader had discussed a potential deal on development. Mr Trump said earlier that he looked forward to working with Mr López Obrador. Trade and migration disputes have strained US relations with Mexico. In a tweet on Monday, Mr López Obrador, 64, said that he had spoken with Mr Trump for half an hour, adding: "I proposed exploring a comprehensive agreement on development projects which will create jobs in Mexico, and with it, reduce migration and improve security." He highlighted the "respectful" nature of the conversation, having previously pledged to build a relationship of "mutual respect" with the US. The BBC's Will Grant says that the message is very much in keeping with Mr López Obrador's focus on providing ordinary Mexicans with decent jobs, something he repeated often during the campaign. Mr Trump said the two leaders had spoken about the potential for a separate trade deal between their countries. 

Mexico implements retaliatory tariffs on US agricultural products - Mexico moved forward Thursday with its second round of retaliatory tariffs on U.S. goods, according to a Politico report. Most of the latest tariffs will be applied to U.S. agricultural products, including apples, cranberries, cheeses, potatoes, pork and whiskey. The products will be hit with a tariff of between 15 and 25 percent, Politico reported. Those penalties will complete the roughly $3 billion worth of retaliatory tariffs Mexico implemented in response to steel and aluminum duties the Trump administration announced earlier this year.While the Trump administration initially exempted Mexico, Canada, the European Union and other allies from steel and aluminum tariffs, it moved forward with implementing them citing national security reasons. Mexico joins Canada, the European Union and China among nations that have prepared retaliatory measures in response to President Trump’s trade policies. Despite international and domestic pushback on the tariffs, Trump has refused to back down, prompting growing concerns over of a looming global trade war. In addition to the tariff dispute, Trump is attempting to renegotiate the North American Free Trade Agreement (NAFTA) with Mexico and Canada. Trump said in an interview aired Sunday on Fox News that he'd wait to negotiate NAFTA until "after the election," though it's unclear if he was referring to the U.S. midterm elections in November, or the Mexican elections that took place on Sunday. "I want to wait until after the election. You’re going to have an election. It’s going to be very interesting," Trump said. 

It’s official: The Trump administration has replaced family separation with indefinite family detention - The Trump administration is keeping families together. In immigration detention. Indefinitely.And they’re arguing that a court order preventing family separation gives them the legal power to do so.In federal court Friday night, Trump’s Department of Justice, led by Attorney General Jeff Sessions, filed an announcement that it is now keeping families in detention “during the pendency of” their immigration cases. That could easily mean months of detention (or longer) for some asylum-seekers — or, alternatively, a form of “assembly-line justice” that moves families’ cases through too quickly to allow for real due process.The administration was already trying to get the courts and Congress to approve indefinite family detention by overruling a 2015 order (made as part of the “Flores settlement”) that prevented children from being kept in immigration detention with their parents for more than 20 days. But the administration now claims that a more recent court ruling — the order by US District Judge Dana Sabraw on Tuesday that barred the administration from splitting up any more families and ordered them to reunite the 2,000 remaining separated ones within 30 days — means that they are now allowed to detain thousands of families in temporary facilities for as long as it takes to either grant them legal status or (the administration’s preference) deport them.

Hundreds of thousands march against Trump’s persecution of immigrants-- Several hundred thousand people turned out on Saturday for rallies across the United States to denounce the Trump administration’s policy of persecuting immigrants and asylum seekers. Protests took place in more than 700 locations, with the biggest crowds in Los Angeles, Chicago, Washington and New York City. The protests were particularly directed at the separation of thousands of immigrant children from their parents, carried out as a consequence of Trump’s “zero tolerance” directive requiring the arrest of anyone suspected of entering the United States illegally.The biggest demonstration was in Los Angeles, home to the largest immigrant population in the United States. More than 75,000 people surrounded City Hall in a crowd so dense it was difficult to move through it. By contrast, only 20 people showed for a miserable pro-Trump counterprotest that was given undue attention by the local news media. Protesters, outraged by videos of young children crying after being forcibly separated from their parents, continued arriving at the demonstration in a continuous stream throughout the course of the day. There was widespread support for placing Trump, Stephen Miller, Jeff Sessions and other cabinet figures on trial for crimes against humanity. Others called for the abolition of Immigrant and Customs Enforcement (ICE) and other repressive instruments of the anti-immigrant dragnet. “Human Rights should have no border” was a common slogan on placards throughout the rally.  In one of the largest demonstrations, over 50,000 rallied in Chicago, according to crowd estimates by the city police department. Braving intense and dangerous heat, wide layers of the population—high school and college students; immigrants and their families; teachers, nurses, and state workers; sections of the middle and even upper-middle class—turned out to express their opposition to the Trump administration’s barbaric anti-immigrant policies.

Immigrant Child Abuse Agency (ICAA) ---In my Take Back ICE, I wrote: I would hope the leaders of ICE would speak up and strongly object to what the Demagogue in Chief has done with their agency but to date they seem to be intimated from doing what is right. Some good newsThe political backlash against U.S. Immigration and Customs Enforcement has turned so intense that leaders of the agency’s criminal investigative division sent a letter last week to Homeland Security Secretary Kirstjen Nielsen urging an organizational split…Though ICE is primarily known for immigration enforcement, the agency has two distinct divisions: Enforcement and Removal Operations (ERO), a branch that carries out immigration arrests and deportations, and HSI, the transnational investigative branch with a broad focus on counterterrorism, narcotics enforcement, human trafficking and other crimes. The letter signed by 19 special agents in charge urges Nielsen to split HSI from ICE, because anger at ERO immigration practices is harming the entire agency’s reputation and undermining other law enforcement agencies’ willingness to cooperate, the agents told Nielsen. The letter can be found here. My mayor may be interested in this proposed split:We should abolish ICE. We should create something better, something different. But in the way it’s developed, it has become a punitive, negative tool for division and it’s no longer acceptable. Now if we transform ICE into HIS – what is to become of ERO? I’m sure Trump and Session will still want some agents to do their sick bidding. If so, I think we need a new name for this group. Truth in advertising could call this group ICAA. One side point – we are hearing a lot about how this abuse occurred even before Trump become President. Let’s be clear – abuse of immigrant rights is wrong. I’d hope former President Obama addresses this.

 Can a 3-year old represent herself in immigration court? This judge thinks so. - A senior Justice Department official is arguing that 3- and 4-year-olds can learn immigration law well enough to represent themselves in court, staking out an unconventional position in a growing debate over whether immigrant children facing deportation are entitled to taxpayer-funded attorneys.Jack H. Weil, a longtime immigration judge who is responsible for training other judges, made the assertion in sworn testimony in a deposition in federal court in Seattle. His comments highlighted the plight of thousands of juveniles who are forced to defend themselves each year in immigration court amid a surge of children from Central America who cross the southwestern U.S. border.“I’ve taught immigration law literally to 3-year-olds and 4-year-olds,” Weil said. “It takes a lot of time. It takes a lot of patience. They get it. It’s not the most efficient, but it can be done.”He repeated his claim twice in the deposition, also saying, “I’ve told you I have trained 3-year-olds and 4-year-olds in immigration law,” according to a transcript. “You can do a fair hearing. It’s going to take you a lot of time.”  Legal and child-psychology experts ridiculed Weil’s assertions, noting that key milestones for 3- and 4-year-olds include cooperating with other children, saying simple sentences and building towers of blocks.“I nearly fell off my chair when I read that deposition,” said Laurence Steinberg, a psychology professor at Temple University who is a witness for the plaintiffs in the Seattle case. “Three- and 4-year-olds do not yet have logical reasoning abilities. It’s preposterous, frankly, to think they could be taught enough about immigration law to be able to represent themselves in court.”Weil’s deposition came in a case in which the American Civil Liberties Union and immigrant rights groups are seeking to require the government to provide appointed counsel for every indigent child who cannot afford a lawyer in immigration court proceedings. The Justice Department is contesting the lawsuit.

It’s not just at the border. The U.S. separates families all the time. -- When the Trump administration defended its now-suspended policy of family separation, it offered various justifications, most of which boiled down to the following: The child's suffering is the price the parent must pay for breaking the rules. Children are, in essence, collateral damage.One of those justifications — from Homeland Security Secretary Kirstjen Nielsen in response to a reporter’s characterization of the policy as “terror” — came with a kernel of truth: “I mean, that would be like saying that when people commit crimes in this country, and they’re put in jail and separated from their family, that somehow that’s terror,” she said. “In the United States we call that law enforcement.”     Every day, we lock parents up for decades in our prisons regardless of how it will affect their children, and no one bats an eye. Those who are demanding that children not be treated as collateral damage when it comes to immigration should be just as vocal when it comes to criminal sentencing. A longtime public defender recently told me that hearing the recording of migrant children crying for their parents reminded her of a moment several years ago when her client, a single mother, was sentenced to two years in prison. Standing before the judge, the mother turned around to say goodbye to her 4-year-old daughter, but court officers berated her for not facing the judge. As the little girl was escorted from the courtroom into the hallway screaming for her mother, the woman turned back to the judge, silent tears streaming down her face. The judge raised his voice over the daughter’s sobs and proceeded with the woman’s sentencing. Since the tough-on-crime period beginning in the 1980s, the United States has become addicted to long sentences. These policies did not have their intended effect, which was to enhance public safety. They did, however, have a measurable effect — a devastating one — on the millions of children who were left behind.

There Is No Crisis At The Border - And DHS Stats Prove It - At a June 21, 2018, cabinet meeting, Donald Trump talked about “the illegal immigration crisis on the southern border.” But data coming from his own administration show there is no such crisis. This year, illegal cross-border migration is only about 11% higher than at the same point last year – and the administration said last year was the “lowest level” on record. Not long ago, in December 2017, the Department of Homeland Security (DHS) released and promoted an upbeat report declaring that illegal entry in the United States had reached historically low levels. “In FY17, CBP recorded the lowest level of illegal cross-border migration on record, as measured by apprehensions along the border and inadmissible encounters at U.S. ports of entry,” stated a Trump administration report from U.S. Customs and Border Protection (CBP). (Emphasis added.) The report reflected reality: Border Patrol apprehensions along the Southwest border plummeted by approximately 80%, from a high of over 1.6 million in FY 2000, to around 300,000 in FY 2017. (Apprehensions are considered a proxy for illegal entry, so the fewer apprehensions, the less illegal entry.) Ironically, the government’s own data show that illegal entry by family units is actually down in FY 2018, notes Mark Regets, a senior fellow at the National Foundation for American Policy. Yes, despite all the talk about a crisis and the focus on families, Border Patrol data show apprehensions of family units who crossed the Southwest border illegally actually declined by 3% in the first eight months of FY 2018 compared to the same period (October-May) in FY 2017.

Private prison companies thrive as thousands of immigrants detained --The Trump administration’s attack upon immigrants has resulted in windfalls for private prison companies, which are rapidly changing their business model in order to exploit incarceration.More and more, detention centers and prisons are being funded, not by municipal bonds or federal monies, but with private investment. Companies such as CoreCivic and GEO Group have increasingly used so-called “public-private partnerships” to shift from the role of independent contractors and managers to that of prison landlords.A report by research group In the Public Interest (ITPI), published in June, outlines the ways that CoreCivic and GEO Group have begun to push both federal and individual state governments to use private equity to purchase facilities from the companies, as opposed to building them with bonds or earmarked funds.Both CoreCivic and GEO became Real Estate Investment Trusts (REITs) in 2013, a move that required them to derive most of their profits from real estate and to distribute the majority of their income to shareholders each year. According to the report, REIT status allows the companies to avoid corporate taxation; GEO Group, for example, was granted $44 million in tax benefits in 2017 because of its REIT status. Contracts made through CoreCivic and GEO can involve the companies either constructing and financing the prison facilities, then leaving the management of those companies to the public sector, or acting as a turn-key service that constructs, finances, and runs a facility for an agreed-upon price per prisoner. “In both these variations,” the report specifies, “the private company owns the facility, but, unlike with speculative prisons built in the past, they are guaranteed occupancy for the life of the contract.”

“Are you alone now? - WaPo -- In the past few months, Immigration and Customs Enforcement (ICE) has carried out the three biggest workplace immigration raids of the past decade, including one on June 5 at a nursery here in rural Ohio, where 114 gardeners, florists and other workers were detained and put into court proceedings for deportation. Many of them had lived for several years in a Norwalk trailer park of 74 homes known as Little Mexico, where now aid workers estimate that more than 90 children are missing one parent and at least 20 are left with no parent at all. One of them is Alex, an American citizen like most children in the trailer park, with a wardrobe of Cleveland Cavaliers T-shirts and frosted tips dyed orange at the barbershop inside Walmart. He’d spent all 12 of his years in Norwalk, population 17,000, and for much of that time he’d lived in the trailer parks of Little Mexico, in a beige double-wide with his sister and mother, Nora Galvez, who first came to the United States in 1999. The air outside their trailer smelled of smoke and rubber from the neighboring pallet factory. . But Alex knew every one of the 74 families in the two trailer parks, and he and his friends could wander freely on their bikes from one trailer into the next.  Now he walked out of the trailer with his empty shopping bag into a scene that looked to him like something out of “Fortnite,” his favorite apocalyptic video game. There were gardens of dying flowers and trash cans overloaded with uncollected garbage. More than a dozen trailers had been abandoned in the hours after the raid, and many of them had windows left open or toys scattered in the yard. Five residents of Little Mexico had been deported, and 34 others remained in detention, including Alex’s mother. Several more residents had packed up and fled Ohio that night, after a rumor spread that ICE was also planning to raid the trailer park. Those who remained were mostly out of a job or too afraid to go to work, and after two weeks of unpaid bills, some had also lost their electricity.

 Parents Facing Deportation Are Asked to Decide Whether Children Go Too -- Immigrants separated from their children after being arrested for illegally entering the U.S. at the Mexican border are being asked to choose between being deported alone or with their children. U.S. Immigration and Customs Enforcement started giving parents who have been given deportation orders a form laying out their options after a federal judge in San Diego last month ordered the administration to reunite immigrant families separated by federal authorities at the border with Mexico. Jennifer Elzea, an ICE spokeswoman, said the agency has had a “longstanding” policy of giving parents about to be deported a choice of being sent home with or without children. The new form is specifically for parents who were separated from their children at the border under the administration’s zero-tolerance policy. Separately, the Department of Health and Human Services told lawmakers this week that congressional interest in visiting shelters for unaccompanied migrant children has become so overwhelming that it was constraining federal resources and threatening the ability to quickly reunite families. U.S. District Judge Dana Sabraw on June 27 gave the government two weeks to reunite immigrant children, age 5 and under, with their parents and 30 days to reunite the older children. He also ordered the government to stop separating families at the border and to stop deporting parents without their children unless parents agreed to be sent back alone. Ms. Elzea said decisions about being deported with children wouldn’t affect an immigrant’s pending asylum claim. A lawyer for the American Civil Liberties Union, which brought the suit and is now asking Judge Sabraw to make his injunction permanent, said the group was concerned the new checkoff form was getting sent to asylum seekers with still-pending applications and misleading them about their options.  More than 2,000 children have been separated from their parents. A reunification plan wasn’t put in place as part of the order and the administration has scrambled to create a process to bring families back together. 

Trump administration using separated immigrant children as leverage to coerce parents to sign “voluntary” deportation forms -- A new Immigration and Customs Enforcement (ICE) document released by NBC News Monday has exposed the cynical effort by the Trump administration to use a court-ordered “family reunification” process to force immigrant parents with separated children into signing a document agreeing to deportation back to their country of origin.The new policy comes in response to a court order handed down last week compelling the Department of Homeland Security and its anti-immigrant apparatus to reunite the more than 2,300 children separated from their parents under the Trump’s “zero-tolerance” policy to detain and prosecute all people caught crossing into the United States without official documents.The document, titled “Separated Parent’s Removal Form,” states that it is intended for “detained alien parents with administratively final orders of removal who are class members in the Ms. L. v. I.C.E. lawsuit,” referring to a class action lawsuit brought on behalf of separated parents in the US District Court for the Southern District of California. On June 26, the judge in that case granted a temporary injunction ordering the reunification of all separated children with their parents within 14 days for the youngest children or 30 days for children five years or older.The “Separated Parent’s Removal Form” represents the Trump administration’s response to that order. Under the guise of a “voluntary agreement,” ICE presents immigrant parents with an ultimatum: they may reunite with their children, who would then be deported along with the parents; or alternatively, parents may agree to waive their right to reunification and their children may be allowed to stay behind, ostensibly to exhaust any remaining avenues for the child to obtain legal status in the US.The form reads: “Class members are entitled to be reunited with their child(ren) and may choose for their child(ren) to accompany them on their removal or may choose to be removed without their child(ren). Any such decision must be made affirmatively, knowingly, and voluntarily.” It is readily apparent that there is nothing “voluntary” about this reactionary and punitive policy, which in fact resembles nothing so much as a kidnapping for ransom. Having forcibly removed, detained and in many cases abused these children, ICE then informs the parents of the price to be paid for their reunification, namely, agreeing to return to the poverty and violence that prompted the family’s migration in the first place.

Immigrant families are being forced to pay massive airfares to reunite with children separated by the Trump administration -   Relatives of migrant children who were separated from their parents at the US-Mexico border are being forced to cover huge airfare costs in order to be reunited.Over several weeks, the Trump administration's "zero tolerance" policy saw more than 2,300 migrant children removed from the care of their detained parents and sent to centers around the country.But for a migrant child to leave one of these facilities, parents and other relatives are required to pay hundreds or even thousands of dollars to cover the one-way plane ticket and a return ticket for an adult escort, according to report from The New York Times.Marlon Parada, a construction worker in California, was told by authorities his cousin's 14 year-old-daughter, who was separated from her mother at the border, couldn't travel by bus and instead he had to pay the $1,800 airfares from Houston to Los Angeles."They notified me a day before her release," Parada told The Times. "I had no choice."A Salvadoran mother who was separated from her 7-year-old son told The Times she had to pay $576.20 for him to fly from Miami to Virginia. When she met her son at the airport, she had to hand the cash payment to the escort.The Times report also describes a Guatemalan immigrant paying $2,500 to fly two teenage relatives from Texas to New York, a California man paying $1,400 to get his 11-year-old nephew from Texas to Los Angeles, and a Salvadoran woman originally being asked to pay $4,000 to fly her 12-year-old nice, 10-year-old nephew and an escort from Texas to California before she convinced the shelter she couldn't afford the payment. It is not clear if these children were separated from their parents.

Hundreds more immigrant children detained than previously reported  On Thursday, Secretary of Health and Human Services (HHS) Alex Azar told reporters that the number of immigrant children separated from their parents was around 3,000—50 percent higher than the 2,000 previously reported. Many of these children have been separated from their parents for weeks.According to Azar, 101 of the children are under the age of five. The Justice Department reported that of the youngest children, 16 have not yet been linked to any parents, while the parents of 19 children have already been deported. The government is unable to locate the parents of another 19 children. It is likely that many will never see their children again.Earlier on Thursday, Commander Jonathan White, HHS assistant secretary for preparedness and response, reported that the government was performing DNA tests of immigrant children to test whether those seeking their liberation from detention were their biological parents. The compilation of a DNA database of immigrant children calls to mind the types of measures employed by the Nazis against Jews and other “undesirables.” And those few parents who have been able to free their children have been forced to pay for the cost of relocation—often thousands of dollars—echoing the Nazi requirement that the relatives of those shot pay for the bullets.  Late Thursday night, the Trump administration filed a motion requesting an extension of a court deadline requiring the government to reunite children with their parents. The administration claimed that more time was needed to genetically test immigrant children and locate their parents. A judge responded by saying he needed more time to consider the administration’s request, meaning the children will remain in limbo.Though the media reported Trump’s announcement of an “end” to family separation last month as an “about face” and a “reversal,” only a handful of detained children have been united with their parents. The Los Angeles Times wrote of one mother’s letter about her detained son:“It's been a month since they snatched him away and there are moments when I can't go on… If they are going to deport me, let them do it—but with my child. Without him, I am not going to leave here.”

 US And UK Authorities Now DNA-Testing Migrant Children - Both the UK and US are now using DNA testing on migrant children who have entered the country illegally, according to CNN and the Independent. The Department of Health and Human Services (HHS) said Thursday that the agency would be using DNA testing as a "faster" and more reliable method of reuniting separated migrant children with their parents, reports CNN. "The safety and security is paramount and that it is not uncommon for children to be trafficked or smuggled by those claiming to be parents. To our knowledge this is a cheek swab and is being done to expedite parental verification and ensuring reunification with verified parents due to child welfare concerns," a federal official told the network - who would not say how long the DNA sampling has been taking place, whether the testing requires consent, or whether the samples are being stored in a database. The expedited identification method has been employed in order to comply with a court order instructing the Trump administration to reunite separated children under 4 with their families by July 10, while children aged 5-17 must be reunited by July 26. The DNA testing will also ensure that children are not being handed over to someone falsely claiming to be a parent or relative, such as a human trafficker. HHS secretary Alex Azar told reporters on Thursday that slightly fewer than 3,000 children have been separated from their parents - around 1,000 more than earlier reports by the agency of 2,047. “We have to confirm that these are in fact their parents and we have to confirm they’re appropriate people to be having custody of these children,” Azar said in an appearance on Fox News Thursday.  Azar also expressed frustration at the court-ordered deadline, arguing that it was extreme and artficial - and that HHS won't be able to be as thorough as possible in determining family relationships in just days and weeks. 

Prison operators could cash in on ‘zero tolerance’ immigration policy - The biggest private prison operators, which have poured money into Republican coffers, stand to make a windfall from President Donald Trump’s “zero tolerance” policy on illegal immigration that has pushed thousands of undocumented immigrants into detention.The Department of Homeland Security is considering adding space for 15,000 additional people in family detention centers, about five times current capacity, even as the number of border crossings declines.GEO Group Inc. and CoreCivic Inc., which each run a facility that holds immigrant families in Texas, have made more than $2.5 million in combined political donations since 2015. GEO shares have returned 85 percent and CoreCivic’s 79 percent since the 2016 presidential election. Both have advanced this month, even as U.S. stocks markets sputtered.The surge in detainees to about 40,000 has followed a nationwide crackdown on undocumented immigrants already in the country as well as a policy adopted in April to detain people crossing the border illegally, separating parents from their children. Trump halted the practice last week amid a public uproar. A judge has since ordered the administration to reunite families separated at the border within 30 days, making the need for family detention centers more urgent.Earlier this month, CoreCivic Chief Executive Officer Damon Hininger raved about the company’s prospects. This is “the most robust kind of sales environment we’ve seen in probably 10 years, not only on the federal side with the dynamics with ICE and Marshals, but also with these activities on the state side,” he said June 5 at an investor conference in New York.DHS last week published a request for information on what it would cost to detain 15,000 in family facilities, which would include recreational, medical and educational components and shouldn’t resemble a prison. Current family detention facilities in the U.S. have a capacity of about 3,200. GEO Group, the biggest private prison operator, runs 11 immigrant processing centers around the country and one family residential center in Karnes County, Texas, under contract with ICE. CoreCivic runs eight, including a facility for families in Dilley, Texas.

Trump Tax-Cut Bonuses are a Bust for Middle Class Workers, Wages Lie in a Wasteland of Failed Promises - No, the Trump tax breaks for major corporations are not going to bonuses and wage increases. Sure we’ve seen some token $1,000 bonuses go out to laborers with hyuge orchestrated fanfare. The stint of articles you saw all over the media earlier in the year about those bonuses originated from an organized PR campaign run by a conservative tax group, and have mostly now ended. Americans for Tax Reform, headed by Grover Norquist, encouraged companies at the start of the year to announce their distribution of tax savings to the lower rungs of personnel as a way of selling the Trump tax breaks after the fact. So far as I know, they are still encouraging that, but there isn’t much for them to report. Even Republican Senator Marco Rubio, who voted for the Trump Tax Cuts as they stand now and who bills himself as a Reaganite, says there is no evidence that happy corporations are sharing the wealth with their workers: ““There is still a lot of thinking on the right that if big corporations are happy, they’re going to take the money they’re saving and reinvest it in American workers,” he says. “In fact they bought back shares, a few gave out bonuses; there’s no evidence whatsoever that the money’s been massively poured back into the American worker.” (The Economist) Corporations have never given anything to workers that they weren’t forced to give, whether because of collective bargaining, the need to compete in a tough labor market or government mandates … or as a public-relations necessity. Anyone who thought corporate boards or CEOs were going to let some tax savings trickle down because they have enough money now to share the wealth a little has had no experience with corporations. Labor gets nothing that it doesn’t fight and bargain hard for in full Trumpian style.

 Trump calls for another round of tax cuts, further reductions to corporate tax rate  --President Trump on Friday said he wanted to further lower the corporate tax rate, from 21 percent to 20 percent, as part of a second round of tax cuts later this year. Trump, in an interview with Fox News to mark the six-month anniversary of the $1.5 trillion tax-cut law Republicans passed last year, said other parts of the new tax plan would be tailored to the middle class. “One of the things we’re thinking about is bringing the 21 percent down to 20 and for the most part, the rest of it will go right to the middle class,” Trump said. “It’s a great stimulus.”Trump said the tax plan would be ready by October, “maybe a little sooner than that.” Trump’s interview with Fox News anchor Maria Bartiromo is scheduled to air on Sunday, but the network released some excerpts on Friday. In the excerpts, Trump did not give more details about what he had planned in terms of tax cuts for the middle class, but Republicans have said they want to bring up a bill that would make permanent tax cuts they passed in December for families and individuals. Those tax cuts are currently scheduled to expire in 2025. In December, Republicans lowered the corporate tax rate from 35 percent to 21 percent. Lowering the corporate tax rate from 21 to 20 would result in an additional $100 billion in tax cuts over 10 years, according to most models.

Susan Collins says she won't support Supreme Court nominee who demonstrates 'hostility to Roe v. Wade' -Sen. Susan Collins (R-Maine), a key swing vote on President Trump's next Supreme Court pick, said Sunday she would not vote for any judge who would overturn Roe v. Wade, the 1973 decision that legalized abortion nationally in the United States.“I would not support a nominee who demonstrated hostility to Roe v. Wade,” Collins said Sunday on CNN's “State of the Union,” adding that the decision established abortion as a “constitutional right.”In another appearance, on ABC News's “This Week,” Collins said that any judge who wants to overturn Roe has an “activist agenda” that she thinks goes against the fundamental tenets of U.S. law and the Constitution.Trump has met with Collins to discuss potential candidates for the Supreme Court, and she said she let him know that she would not support some of the people on the list of 25 judges he is considering for the critical role on the nation's highest court. She said she urged him to expand his list.On the 2016 campaign trail, Trump indicated he would take into account whether a judge would overturn Roe v. Wade when he considered them for a Supreme Court position, and his evangelical base is calling for him to honor his promise. But Trump has changed his rhetoric in the past week after Justice Anthony M. Kennedy announced his retirement.Collins said Trump assured her that he would not ask nominees whether they would vote to overturn Roe v. Wade.“The president told me in our meeting that he would not ask that question,” she said on CNN. In her ABC News appearance, Collins added that she feels it would be “inappropriate” for Trump to ask that question.

Schumer faces heavy pressure from left on Supreme Court | TheHill: Senate Democratic Leader Charles Schumer (N.Y.) is under pressure from the left to whip Democrats hard to oppose any Supreme Court nominee who might vote to overturn Roe v. Wade, the landmark decision that established a woman’s right to an abortion. Liberal activist groups are urging their supporters to attend a town hall meeting with Schumer in Brooklyn on Monday night and press him to commit to squeeze red-state Democrats who might feel pressure to back Trump’s pick. “We expect his constituents to be asking him really directly if he is going to commit to whipping the caucus and keeping Democratic voters together and in line in opposing Trump’s extreme Supreme Court nominee,” said Elizabeth Beavers, associate policy director at Indivisible Project, a liberal advocacy group dedicated to defeating the Trump agenda and electing progressive leaders.“We’ll be actively encouraging our members over social media tonight to go to that event and encourage Schumer to whip the caucus for this vote,” said Neil Sroka, communications director at Democracy for America, another liberal advocacy group. “If you care about the constitutionally protected right for women to choose what happens with their own bodies, there’s zero reason for why you should be voting for Donald Trump’s nominee,” Sroka said. Schumer in an op-ed in The New York Times on Monday called the vacancy created by Justice Anthony Kennedy’s retirement as the “most important vacancy on the Supreme Court in our lifetimes.”

Dem senator says Supreme Court vote could be 'career ending' for lawmakers | TheHill - Sen. Maria Cantwell (D-Wash.) on Sunday said her colleagues' votes on President Trump's Supreme Court nominee could be a "career-ending move." “I think that my colleagues on both sides of the aisle know that this vote could be one of the key votes of their entire career,” Cantwell said on NBC’s “Meet the Press.” “And they know that no matter what spin comes out of the White House, if they vote for somebody who’s going to change precedent, it could be a career-ending move." Cantwell's speculation comes days after Supreme Court Justice Anthony Kennedy announced his retirement from the bench at the end of next month. His retirement opens up an opportunity for Trump to nominate his second justice to the bench, potentially redefining the nation's highest court for generations to come. “We’re a 51-49 Senate and if [Trump] wants to throw an extreme conservative who basically says, ‘I’m not going to follow precedent, I’m not going to follow these laws,’ then yes, that to me is a major change,” Cantwell said. Cantwell expressed concern that Trump’s nominee would overturn the precedent set by Roe v. Wade, the landmark Supreme Court case that paved the way for legalized abortion nationwide. “You’re not just voting on if you think Trump should have his nominee,” Cantwell said. “You’re voting on whether that nominee is going to change precedent when it comes to a whole host of issues — a woman’s right to choose, your access to health care.”

Senate Votes To Legalize Hemp After 80 Years Of Prohibition --On Thursday, the U.S. Senate approved a bill to legalize hemp, an industrial crop that has been banned for decades. In April, Senators Mitch McConnell (R-KY), Rand Paul (R-KY), Ron Wyden (D-OR), and Jeff Merkley (D-OR) submitted a separate bill to legalize hemp, and those provisions were then incorporated into the broader farm bill. The Senate Committee on Agriculture, Nutrition and Forestry approved that version before the upper house of Congress voted to approve it this week by a margin of 86-11. The bill would legalize the cultivation, processing, and sale of hemp."Consumers across America buy hundreds of millions in retail products every year that contain hemp," McConnell said Thursday."But due to outdated federal regulations that do not sufficiently distinguish this industrial crop from its illicit cousin, American farmers have been mostly unable to meet that demand themselves. It's left consumers with little choice but to buy imported hemp products from foreign-produced hemp."According to Wyden:“Legalizing hemp nationwide ends decades of bad policymaking and opens up untold economic opportunity for farmers in Oregon and across the country.”Hemp is a versatile crop that can be used in everything from construction material to clothing, and it has long been a staple in the United States and around the world. In fact, in the 17th century, the government encouraged people to grow it.Though hemp was eventually banned amid the widespread attack on cannabis in the 1930s, ironically, it then had to be imported to sustain the war effort during World War II.

 Ohio State sex scandal complicates Jordan’s possible Speaker bid | TheHill: Allegations that Rep. Jim Jordan failed to stop a team doctor from sexually abusing student athletes when the Ohio Republican was a college wrestling coach is complicating his possible bid for Speaker of the House. The NBC News story dropped Tuesday just as Jordan began reaching out to GOP colleagues, urging them to ditch Majority Leader Kevin McCarthy (R-Calif.) and instead back him for the top job in the House GOP conference. Jordan, 54, the powerful founding chairman of the ultraconservative Freedom Caucus, has not formally announced a bid for Speaker but has said he plans to be “part of the discussion” in the race to replace retiring Speaker Paul Ryan (R-Wis.) after the fall midterm elections.  Three former wrestlers at Ohio State University (OSU) told NBC News that Dr. Richard Strauss, who died in 2005, sexually molested teammates when he served as the team doctor from the mid-1970s to the late 1990s. It would have been impossible for Jordan not to have known about the abuse, the wrestlers told the news outlet. One of Jordan’s former wrestlers, Dunyasha Yetts, said he and his teammates personally complained to Jordan and others about Strauss’s inappropriate behavior many times. But some Jordan allies cast doubt about the credibility of his accusers. Yetts, a former wrestling champion, spent 18 months in prison for bilking investors out of nearly $2 million. Another accuser quoted in the NBC story, Mike DiSabato, has a long history of litigation, including a 2007 suit against OSU over a merchandising dispute, according to the university’s student newspaper. OSU has launched an independent investigation into the allegations against Strauss and whether enough was done to protect the students.

How Trump Used Mar-a-Lago to Boost His Personal Business - President Donald Trump’s Mar-a-Lago Resort in Palm Beach, Florida, has been the host to foreign dignitaries, political speeches, social events, and more, raising concerns the President is exploiting public office to boost business.In 1985, President Trump purchased Mar-a-Lago and turned it into a private club and golf course managed by the Trump Organization ten years later. The resort seems to be President Trump’s choice destination out of all of the properties he owns. In his first year in office, he spent a total of 52 days there, more time than any other Trump-branded property.Between being elected and taking office, President Trump passed ownership of the Trump Organization to his oldest sons, but did not set-up a blind trust or divest from the company.While neither is legally required, it is something ethics experts said they wanted to see happen. In December 2017 and January 2018, Sunlight Foundation signed onto three letters with bipartisan groups and ethics experts calling on Trump to divest from his businesses and place all proceeds into a blind trust managed by an independent trustee or equivalent. In the wake of Trump’s election, Mar-a-Lago doubled its membership fee to $200,000 and increased annual dues from $1,000 to $15,000. The club manager, Bernd Lembcke, told the New York Times in January 2017 that Trump’s presidency “enhances” membership at the resort, and interest in the club has increased as a result.

Did Sen. Warner And Comey 'Collude' On Russia-gate? - The U.S. was in talks for a deal with Julian Assange but then FBI Director James Comey ordered an end to negotiations after Assange offered to prove Russia was not involved in the DNC leak... An explosive report by investigative journalist John Solomon on the opinion page of Monday’s edition of The Hill sheds a bright light on how Sen. Mark Warner (D-VA) and then-FBI Director James Comey collaborated to prevent WikiLeaks editor Julian Assange from discussing “technical evidence ruling out certain parties [read Russia]” in the controversial leak of Democratic Party emails to WikiLeaks during the 2016 election.A deal that was being discussed last year between Assange and U.S. government officials would have given Assange “limited immunity” to allow him to leave the Ecuadorian Embassy in London, where he has been exiled for six years. In exchange, Assange would agree to limit through redactions “some classified CIA information he might release in the future,” according to Solomon, who cited “interviews and a trove of internal DOJ documents turned over to Senate investigators.” Solomon even provided a copy of the draft immunity deal with Assange.  But Comey’s intervention to stop the negotiations with Assange ultimately ruined the deal, Solomon says, quoting “multiple sources.” With the prospective agreement thrown into serious doubt, Assange “unleashed a series of leaks that U.S. officials say damaged their cyber warfare capabilities for a long time to come.” These were the Vault 7 releases, which led then CIA Director Mike Pompeo to call WikiLeaks “a hostile intelligence service.” Solomon’s report provides reasons why Official Washington has now put so much pressure on Ecuador to keep Assange incommunicado in its embassy in London.

Michael Cohen distances himself from President Trump: 'I put family and country first' -- Michael Cohen, President Donald Trump’s embattled former lawyer, distanced himself from his longtime boss in an interview with ABC News. “I put family and country first,” Cohen told ABC’s George Stephanopoulos in an off-camera interview published Monday. Even when Stephanopoulos said he pointed out that Cohen had said little in Trump’s defense, Cohen skirted the opportunity to discuss the president. “To be crystal clear, my wife, my daughter and my son, and this country have my first loyalty,” Cohen said. It’s a marked shift in tone for Cohen, who had previously touted his role as Trump’s loyal and pugnacious fixer. But after FBI agents raided his properties in April, seizing thousands of items and sparking a lengthy court battle even before any charges have been filed, Cohen has reportedly been more amenable to working with federal prosecutors, ABC reported.  Cohen’s lawyers recently completed their own review of the seized materials, concluding that more than 12,000 documents are protected by attorney-client privilege and therefore cannot be turned over to prosecutors. But ABC reported that once Cohen’s new attorney, Guy Petrillo, takes the helm, an agreement to share information between lawyers for Cohen and Trump will come to an end. Petrillo did not immediately respond to CNBC's request for comment. Cohen’s willingness to deal with the feds could have a major impact on special counsel Robert Mueller’s probe of potential coordination between the Trump campaign and Russia, which in just over one year has already lodged charges against more than 20 people and companies and collected five guilty pleas.

Will Cohen flip? New interview raises the question | TheHill: Michael Cohen has legal tongues wagging after a new interview in which he appears to give the signal that he could flip on President Trump and cooperate with special counsel Robert Mueller’s investigation. Cohen, the longtime personal lawyer and “fixer” to Trump, once professed that he would “take a bullet for the president.” But in an interview released Monday by ABC News, he appeared to be singing a different tune. “My wife, my daughter and my son have my first loyalty and always will,” Cohen told ABC’s George Stephanopoulos.More significant, legal analysts say, is the revelation that Cohen has withdrawn from a joint defense agreement with the president. This suggests that his new lawyer, Guy Petrillo, believes that Cohen’s and Trump’s interests are no longer aligned. Ending the agreement doesn’t mean Cohen has “flipped,” but his withdrawal is perhaps the most concrete symbol that he is weighing either pleading guilty or cooperating with prosecutors, say legal experts. “Short of a posting on eBay, Cohen could not be more clear in his pitch to Mueller,” said Jonathan Turley, a George Washington University law professor and contributor to The Hill. “It was abundantly clear that he used this interview to remove any doubts as to his willingness to cooperate with Mueller.” The joint-defense agreement that Cohen had with Trump is common. Such deals allow defense lawyers to share information without waiving attorney-client privilege. But attorneys who are sharing information under this kind of agreement will stop if there is a conflict of interest — if one client is cooperating with prosecutors while another is still under investigation, for example.

 Michael Cohen has dropped all mention of Trump on his Twitter and LinkedIn bios — further proof he is about to flip -- Michael Cohen, the former personal attorney to President Donald Trump, has removed all mention of Trump from his social-media biographies, further stoking theories that he is ready to turn on the president in an ongoing criminal investigation. Cohen's Twitter bio previously identified him as the "personal attorney to President Donald J. Trump," with an image of Cohen standing behind a Trump campaign lectern as his banner image. The change in Cohen's social media happened on Wednesday, CNN reported.  Cohen's Twitter bio is now empty, and his banner image shows an image of a US flag that he tweeted Wednesday. Cohen also removed a reference to Trump on his LinkedIn page, CNN reported. The page now simply states Cohen's job as "Attorney," where it used to say "Personal Attorney to President Donald J. Trump."

Trump 2020 Reelection 'In Jeopardy' As Michael Avenatti Pledges To Take On The Don -  In what surely isn't a continuation of a longstanding publicity stunt, Michael Avenetti - the "creepy porn lawyer" representing Stormy Daniels, said on Tuesday that he will run for President if Donald Trump seeks reelection in 2020. Responding to a tweet by "Resistance" icon Brian Krassenstein (who was raided by the feds in 2016), Avenatti wrote "IF (big) he seeks re-election, I will run, but only if I think that there is no other candidate in the race that has a REAL chance at beating him."IF (big) he seeks re-election, I will run, but only if I think that there is no other candidate in the race that has a REAL chance at beating him. We can't relive 2016. I love this country, our values and our people too much to sit by while they are destroyed. #FightClub #Basta— Michael Avenatti (@MichaelAvenatti) July 4, 2018 Not only that - Avenatti is already talking about his platform! Solidly pro choice. Would never nominate a justice to the SCOTUS who did not believe in Roe or who would seek to outlaw same sex marriage. Fully support equality for women & people of all races, & gay rights. We don't separate families at the border. And we don't kiss-up to Putin— Michael Avenatti (@MichaelAvenatti) July 4, 2018

Mueller Probe Expands Despite Pleas To "Finish It The Hell Up" - Instead of winding down his investigation into Russian interference/collusion in the US 2016 election, Robert Mueller is requisitioning additional Department of Justice resources in the latest sign that the probe continues to expand nearly 14 months after Mueller was appointed special counsel. According to Bloomberg, in a sign that Mueller is preparing to hand off more of his investigation to other federal prosecutors - like he did with the investigation into Michael Cohen (which he "delegated" to the southern district of New York) - the DOJ is now spending more on supplemental work for Mueller than it is spending on the special counsel's own staff.According to his most recent statement of expenditures, more money is being spent on work done by permanent Department of Justice units than on Mueller’s own dedicated operation. The DOJ units spent $9 million from the investigation’s start in May 2017 through March of this year, compared with $7.7 million spent by Mueller’s team.Mueller is also increasingly depending on investigators in different areas, including New York, Alexandria, Va. and Pittsburg, Penn. in yet another sign that another handoff could be imminent.Investigators in New York; Alexandria, Virginia; Pittsburgh and elsewhere have been tapped to supplement the work of Mueller’s team, the officials said. Mueller has already handed off one major investigation - into Trump’s personal lawyer, Michael Cohen - to the Southern District of New York.  In an attempt to "normalize" Mueller's behavior, DOJ officials told Bloomberg that this type of "expansion" was to be expected: "A heavy investigative load" had been anticipated from the start. Plus, they said, Mueller is showing results (though it appears he's done just enough to justify continuing with the probe). "I don’t think he’s getting in over his head," said Solomon Wisenberg, who served as deputy independent counsel investigating President Bill Clinton in the 1990s. "These things have a tendency to balloon. Yes, it may be taxing on them. No, it’s not that unusual."  Mueller's team will likely be particularly busy in the coming months as he wraps up his negotiations with President Trump's team and gears up for the trial of Paul Manafort - which is set to begin later this month.

Meet the Mueller pundits - President Donald Trump may be giving his current suite of Justice Department staffers a hard time. But he’s been a big boon for those who have left. Cable news networks are clamoring to fill their sets with expert talking heads who can explain and opine on every whiff of movement in special counsel Robert Mueller’s Russia investigation, leading to five or even six-figure salaries for some former federal prosecutors who’ve signed on as exclusive pundits. Others see a personal branding opportunity and do it for free. “As a former U.S. attorney, you think you’re supposed to quietly fade into private practice,” said Joyce Vance, a former U.S. attorney from the Northern District of Alabama who recently signed an MSNBC contract. “I consider this a form of ongoing public service.” Life after leaving DOJ’s ranks traditionally has involved settling in at a cushy academic gig, cashing in at a law firm or perhaps scoring a coveted lifetime judicial appointment. But in the Trump era, having the Justice Department on one's résumé has opened a new career path — the media. And these ex-prosecutors-turned pundits have a distinct assignment: To try to bring sanity to the whirlwind of information about Mueller’s probe while helping the television networks in their continuing coverage of the Trump campaign’s foreign dealings during the 2016 presidential election. “They are all the rage right now! We need more!” said an MSNBC producer.  

Trump and truth: Why the media are losing the battle -- For three years, since the day he glided down the escalator at Trump Tower to announce his presidential bid, Donald Trump has confounded the mainstream media. He says things that many Americans find offensive. And he frequently says things that are provably false.Yet, by some measures, President Trump is thriving. His job approval rating, while still relatively low, now ties his all-time high of 45 percent in the Gallup poll. Among fellow Republicans, he’s at 90 percent, also on par with his all-time best.Many factors play into attitudes about Mr. Trump, including the strong economy. But to his most ardent supporters, his aggressive way of communicating is a plus. And he uses that style to “play” the media – the very institution envisioned by the Founding Fathers as an important check on government, say experts on political rhetoric.The more the media go after him and call him out on his rhetoric, especially false statements, the more Trump uses the media as a foil. This, in turn, engenders more devotion from base Trump supporters – and even wins him sympathy from skeptics who believe the media go overboard at times in their criticism. The press – already facing declining trust from Americans – is in a no-win situation in its dealings with Trump, says Barbara Perry, a presidential scholar at the University of Virginia

Unsealed documents detail tactics in Clinton email probe -- Court documents approved for release in the lead-up to a massive Justice Department watchdog report on the FBI investigation into Hillary Clinton's private email account offer fodder for both critics and defenders of the bureau's work.The newly unsealed court filings, obtained by POLITICO, may well serve as a Rorschach test about the Clinton email probe. They demonstrate that the FBI's investigation did not rely solely on the voluntary cooperation of those involved, since agents and prosecutors used a combination of search warrants and other court orders to gain evidence relevant to the probe. At the same time, the records do not contradict complaints by Republicans that the FBI did not use grand jury subpoenas to demand testimony from top Clinton aides, obtain search warrants to gain access to laptops Clintons' lawyers used to review her emails, or seek the personal phones and similar devices used by her top aides.Justice Department Inspector General Michael Horowitz sought unsealing of the records in May, in order to allow him to publish some details from the filings in his report released in June on alleged misconduct at the FBI and Justice Department prior to the 2016 presidential election.  Nearly 100 pages of filings from federal court in Alexandria, Virginia, show how investigators used a very broad search warrant in September 2015 to gain access to the email account of top Clinton adviser Jake Sullivan. The FBI told a federal magistrate judge that a July 2009 email forwarded to Sullivan's personal Gmail account showed that "top secret" information, including records related to sensitive satellite imagery, likely resided on Google's servers.

Nunes Expands SpyGate Probe To House, Oversight Committees; Refers Dozens For Public Testimony - House Intelligence Committee chairman Devin Nunes (R-CA) has been a busy man.  In a Thursday letter to two fellow GOP chairmen, Nunes referred 15 people connected to the Russia investigation to testify in an "open setting." Many of those on the list are tied directly to Hillary Clinton, Fusion GPS and the infamous "Steele dossier" - a collection of 17 memos full of compromising yet unverified claims about President Trump's ties to Russia. The names on the list include Sidney Blumenthal, Fusion GPS founders Glenn Simpson and Thomas Catan, Perkins Coie attorney Marc Elias, and former FBI agent and Feinstein staffer Daniel Jones, who is spearheading a $50 million Soros-funded effort to continue the Trump-Russia investigation with Fusion GPS and Steele. The Steele dossier was compiled by former MI6 spy Christopher Steele on behalf of opposition research firm Fusion GPS, and was funded in part by Hillary Clinton and the DNC. The Thursday letter to GOP House Chairmen Trey Gowdy and Bob Goodlatte is the third sent by Nunes in recent days referring people to Congressional panels in what appears to be a massive expansion of the "SpyGate" probe into the FBI/DOJ counterintelligence operation against the Trump campaign surrounding the 2016 US election.  All together, Nunes has referred 42 people to Gowdy and Goodlatte - highlighting that the individuals likely fall under the scope of their joint task force. Moreover, he's not about to let them wiggle out of testimony.  “They can plead the Fifth," Nunes told Fox News host Laura Ingraham. "This isn't going to be like the documents where we've had to continue to fight with the Justice Department in order to have access to documents. This is much different. These are all American citizens. They will, if they do not agree to appear under oath, and testify, then they will be subpoenaed. That I could tell you for sure."

SEC Joins Federal Facebook Probe As Scope Broadens -The federal government is ramping up scrutiny of Facebook's role in the Cambridge Analytica data privacy scandal as yet another federal agency - the Securities and Exchange Commission - has joined the Federal Trade Commission, the FBI and the DOJ in their investigation of the tech giant, according to the Washington Post.The involvement of so many  agencies confirms that the investigation is broadening in scope. To wit, the addition of the SEC suggests that the emphasis has shifted to whether "representations" made by the company "square with the underlying facts."While the report didn't include any specifics about the investigation, Facebook CEO Mark Zuckerberg, who sat for a grueling two-day testimony before Congress in April, has since been called out by at least one Democratic Congressman for possibly lying, or otherwise misleading Congress, when he claimed Facebook users had "complete control" over who sees their data. In reality, the New York Times reported that Facebook had given at least 60 major device manufacturers nearly unfettered access to user data. To wit, WaPo reported that Zuckerberg's testimony is being "scrutinized."Representatives for the FBI, the SEC and the Federal Trade Commission have joined the Justice Department in its inquiries about the two companies and the sharing of personal information of 71 million Americans, suggesting the wide-ranging nature of the investigation, said the people, who spoke on the condition of anonymity to discuss a probe that remains incomplete.These people added that the emphasis has been on what Facebook has reported publicly about its sharing of information with Cambridge Analytica, whether those representations square with the underlying facts and whether Facebook made sufficiently complete and timely disclosures to the public and investors about the matter.

As Crime Soars on Wall Street, Its Top Cop Launches a PR Offensive --  Pam Martens - Wall Street’s top cop, Securities and Exchange Commission Chair Jay Clayton, will embark on a four-city Town Hall type event with retail investors beginning next Monday, July 9. The cities targeted will be Miami, Washington D.C., Philadelphia and Denver. The SEC says it wants to hear first-hand about retail investors’ experiences with their investment advisers.That announcement came from the SEC on Friday. On Monday of the previous week, Clayton delivered a speech on improving the Wall Street culture at a full day symposium held by the New York Fed  — an institution whose culture has also been deeply compromised by Wall Street. (See Is the New York Fed Too Deeply Conflicted to Regulate Wall Street?) The low point of Clayton’s speech came in the opening minutes when he lavished praise on the scandal-laced tenure of the President of the New York Fed, Bill Dudley, who was appointed to that position on January 27, 2009 at the height of the financial crisis. Dudley has served as the head of the New York Fed until Friday, June 15, when he retired. Dudley previously worked as a partner and Managing Director at Goldman Sachs for two decades, including ten years as its U.S. Chief Economist. Clayton said this about Dudley: “I want to extend my congratulations to Bill Dudley on a very successful term. You are now a member of the long line of former leaders and perpetual culture carriers at the New York Fed. The respect for the New York Fed, among national and international regulators and, importantly, market participants of all stripes, is remarkable, but clearly well deserved.” If ever there was a legitimate reason to scream “fake news,” this was it. Dudley’s coddling of the big Wall Street banks was such an outrage that one of his own bank examiners, Carmen Segarra, (a woman with a law degree) was motivated to visit a spy store, buy a tiny tape recorder, and tape hours of conversations showing how the Fed cozied up to the big banks. Segarra said that she was fired by the New York Fed for refusing to change a negative bank examination of Goldman Sachs. That scandal played out for months in the media in 2014 after ProPublica in conjunction with the radio program This American Life released some of the tape recordings that Segarra had made.

Deutsche Bank fined $205M for ‘unsound’ conduct in Forex trading business - The New York State Department of Financial Services (NYDFS) has fined Deutsche Bank $205 million as part of a consent order for violations of New York banking law, including efforts to improperly coordinate trading activity through online chat rooms, improperly sharing confidential customer information, trading aggressively to skew prices, and misleading customers.The violations, announced on June 20, stem from an investigation by NYDFS determining that from 2007 to 2013, when Deutsche Bank was the largest foreign exchange dealer in the world, the bank repeatedly engaged in improper, unsafe, and unsound conduct in its foreign exchange business due to its failures to implement effective controls. In addition, for certain time periods, limited elements of Deutsche Bank’s electronic trading platforms had the potential to improperly disadvantage customers and improperly affect markets, when certain applications did not perform as intended.The DFS investigation found that a number of Deutsche Bank foreign exchange traders participated in multi-party online chat rooms where participants shared confidential information, discussed coordinating trading activity, and attempted to manipulate foreign exchange currency prices or benchmark rates. By engaging in these activities, these traders sought to diminish competition and increase their profits by executing foreign exchange trades at the expense of customers or the wider market.One improper practice apparently employed by certain Deutsche Bank traders involved accumulating a large trading position and then using the position to make aggressive trades just before and during the fix window, with the intention of moving the ultimate fix price in a desired direction, up or down–known as “jamming the fix.” This technique involved accumulating a large trading position, and then using the position to make aggressive trades just before and during the fix window, with the intention of moving the ultimate fix price in a desired direction, up or down.

Bill Black: Fed Lets Goldman Sachs and Morgan Stanley Off Hook, Investors Profit Billions -- (interview & transcript) In this Real News Network interview, white-collar criminologist and associate professor of economics and law at the University of Missouri, Kansas City, Bill Black discusses how even though Goldman Sachs and Morgan Stanley failed their recent stress tests, to determine whether these banks can weather a financial crisis, the Fed allowed them to pay billions in dividends and stock buybacks to investors.

Fed, FDIC extend living will deadline for 14 banks  — Federal regulators announced Monday they were extending the deadline by a year for 14 regional banks to submit their next filings of living wills.The Federal Reserve Board and the Federal Deposit Insurance Corp. said in a joint statement that they were giving the banks an extension to Dec. 31, 2019, "to allow additional time for the agencies to provide feedback to the firms on their last submissions and for the firms to produce their next plan submissions." The move comes as some regulators have indicated an interest in moving away from annual filings for living wills. Under a provision of the Dodd-Frank Act, large banks are required to submit plans detailing their own hypothetical failure.

Did JPMorgan Rat Out Fellow Bankers in a Criminal Cartel Case in Australia? -  Pam Martens ~ Australia is showing its muscle in an area where the U.S. has tip-toed around for almost two decades. We’re talking about Wall Street’s brazen antitrust activity in securities offerings. Last month the Australian Competition and Consumer Commission (ACCC) announced that “criminal cartel offences” had been brought against Citigroup Global Markets Australia and Deutsche Bank over a share offering for Australia and New Zealand Banking Group (ANZ) that had been conducted in 2015. ANZ was also criminally charged in the matter as were three executives of Citigroup Australia, two executives at Deutsche Bank and one at ANZ. Although JPMorgan had been part of that underwriting syndicate, it wasn’t charged.   The Financial Times reported at the time that “JPMorgan, which jointly underwrote the share placement with Citi and Deutsche, has not been charged by prosecutors and has reportedly been granted immunity after self-reporting issues to regulators.” The ACCC provided sparse details on exactly what the underwriting cartel was alleged to have done, saying it was now a matter for the court to decide. Business media, however, suggested the criminal charges arose out of a concerted effort by the underwriting banks to conceal the fact that the 2015 share offering for ANZ was not fully subscribed, that the banks were stuck with a big chunk of the offering and that they then conspired on how they would dispose of the shares. Being criminally charged with cartel activity is nothing new to Citigroup – or JPMorgan. Both pleaded guilty to participating in the rigging of foreign currency exchange markets on May 20, 2015. This is a small peek into what the U.S. Justice Department charged JPMorgan with in the matter:

How Pat Toomey could shape banking policy as chair of Senate Banking  — If Republicans manage to hold onto their majority in the Senate after the November midterms, 2019 could still bring a new chairman to the Senate Banking Committee. With Sen. Orrin Hatch, R-Utah, retiring, Sen. Mike Crapo, R-Idaho, who currently chairs the banking panel, may want to pursue Hatch’s gavel on the Senate Finance Committee, which is viewed as a more prominent post. That would leave an opening on the Senate Banking Committee that would likely go to Sen. Pat Toomey, R-Pa.“The stars seemed to be aligning for Toomey to take over in 2019,” said Jaret Seiberg, an analyst with Cowen Washington Research Group.   The prospect of the former derivatives trader and founder of Team Capital Bank in Bethlehem, Pa., ascending to the chairmanship is a welcome one to industry groups.  “Sen. Toomey is the only senator to have helped organize, launch and operate a community bank,” said Duncan Campbell, the president and CEO of the Pennsylvania Bankers Association. “He knows firsthand the challenges and opportunities we have as an industry and the needs our communities have for our members’ services. The deep technical knowledge he gained from his days as a community banker is invaluable to the legislative process and oversight of the federal banking agencies.” “Real key is that he has a community banking background,"  . "He’s intimately familiar with the trials of running a small business and a community bank. So he would be an ideal chairman should he have the opportunity to take over that position.” But Toomey’s prospects for passing big banking legislation are unclear. President Trump already signed a bipartisan regulatory relief bill into law in May. While Toomey has said the financial sector is still “overregulated,” his ability to make legislative progress will hinge on the makeup of the House and Senate. If Republicans are able to hold a majority in the Senate, it will likely remain slim. That means Toomey would need several votes from Democrats to meet the 60-vote threshold to pass most legislation.  “The challenge is how do we get to 60 votes in the Senate?” Toomey said during remarks to a joint SIFMA-Clearing House Association conference in June. “The Democrats who participated and supported the [S] 2155 banking regulatory relief bill, they have gotten well and truly beat up from the left wing of their party, who I think are completely unreasonable about this. I think they feel like they’ve paid a political price and so the question is, are they willing to go into that arena again?”

Regulators have their eye on AI | American Banker Financial services companies, in particular banks, are racing to harness the potential of artificial intelligence. Lenders are employing algorithms that analyze consumer data to conduct credit scoring and determine appropriate loan amounts, and AI tools examining customer transaction habits are improving fraud alerts and reducing money-laundering risk. But how might regulators react? Given AI’s potential, the industry can expect government will have an increasing number of questions about how banks are using this technology. That will include how institutions use AI, how well it works, how stable and secure it is, the quality of the data it uses and generates and how it’s governed. Industry should anticipate these concerns so it can help shape regulations and reviews that add value, minimize burden and best satisfy regulatory needs. Anticipating rules also allows institutions to avoid criticisms later when it can be harder to adjust. At this time, government rules and regulations aren’t specific around the use of AI, as the technology is still new and still evolving. But regulators have latitude to determine whether certain practices are unsafe and unsound — which could include misuses of AI. For now, banks can expect regulators to ask a number of questions about AI’s application in banking — for instance, if its capture and utilization of data comply with specific rules, including privacy standards. Regulators may also want to know if certain AI applications create discriminatory outcomes and what bankers are doing to avoid these potential problems. Regulators will also be interested in how much AI is being relied on within an institution, including how well management and the board understand how the technology is being used. Over time, regulators will want to understand bank AI applications and be able to examine matters for themselves. Eventually, government interest in how quantitative models are designed, tested and validated will extend to AI — and banks will need to be able to demonstrate that the technology isn’t harming consumers or creating undue risk to the system.

Crypto money laundering up threefold in first half: Report - Three times more cryptocurrency was stolen from exchanges in the first half of 2018 than all of 2017, with a corresponding boost in money laundering related to crypto, according to a report released Tuesday by CipherTrace. The results appear to confirm fears by bankers who stay away from cryptocurrency business due to concerns about crime and money laundering. “We’re basing it on things we have seen directly,” said Dave Jevans, CEO of CipherTrace, which monitors cryptocurrency transactions for signs of financial crime. In the last two years alone, criminals have stolen $1.21 billion in cryptocurrency from exchanges, the report said. While outright theft tripled in the first half of 2018, money laundering increased at a similar rate. In 2017, $266 million was laundered via crypto. So far in 2018, that figure stands at $761 million. That is just the laundering of stolen funds, not a complete estimate of all dark market transactions using crypto (which is harder to track with certainty). “That puts us on track for this year to probably see about $1.5 billion stolen through cryptocurrency, based on trends,” Jevans said. Bitcoin supporters argue cryptocurrency is not anonymous, that their transactions can be connected to the addresses at which they receive bitcoins. If those addresses are ever tied to their personal identity, their cryptocurrency movements can be fully visible. So how do crypto users manage to stay anonymous and launder their dirty digital currency? One way is through using money laundering mixing services, Jevans said. “These let people contribute funds into a combined pool that will scramble them up and try to use a different pool of liquidity that is not trackable on the blockchain, so there’s no linkage between them to deliver funds out to the receivers,” Jevans said. “These are written by highly skilled people who may have Ph.D.s, that are actively trying to avoid tracing.” . Some money laundering mixing services have run paid ads on Google, he said. “These guys are making quite a bit of money off these services,” Jevans said. “They typically charge around 3% to perform a laundering transaction.” 

Warnings Grow About the Next Stock Market Crash - Pam Martens - One of the market watchers who is unabashedly calling for a major market correction – potentially in the realm of 60 percent from peak to trough – is John P. Hussman, President of Hussman Investment Trust. In his most recent market commentary, Hussman writes:“Unlike much of the recent bull market, present market conditions reflect not only extreme valuations (including a full syndrome of overvalued, overbought, overbullish features), but also divergence and dispersion in our measures of market internals. It’s that deterioration in market internals that threatens to unleash the beast that has been patiently biding its time within extreme valuations. Given those extreme valuations, I continue to believe that the completion of this market cycle will be a terrible ordeal for passive investors.”These are among the items that are worrying Hussman:

  • “Deteriorating participation of individual stocks in the bounce, as more than 40% of individual U.S. stocks are again trading below their respective 200-day averages;
  • “A leadership reversal on the heels of recent recovery highs, with the number of stocks hitting new 52-week lows suddenly flipping above the number of stocks hitting new 52-week highs…
  • “Widening credit spreads between the interest rates on low-grade bonds and those of higher-quality bonds, and;
  • “A sudden break to new lows in Deutsche Bank, the most highly-leveraged major European bank.”

In Hussman’s April market commentary, he warned that the only investors who belong in this stock market are those “whose investment horizons and risk-tolerances could tolerate a market loss on the order of 60% over the next few years (our run-of-the-mill expectation, not a worst-case scenario) and roughly zero returns over the next 10-12 years, without great distress, and without abandoning their discipline. If you’re already experiencing distress at the rather minimal level of volatility and market loss we’ve seen in recent weeks, you’re probably taking more risk than is appropriate.”

Great new Tax Justice Network podcast on how “Bean Counters…Broke Capitalism”  - The June 28 Taxcast is out with a focus on the Big Four accounting firms. Richard Brooks is the author of Bean Counters: The triumph of the accountants and how they broke capitalism (order here in the UK and here in the US) which documents accountants’ involvement in some of the world’s worst financial scandals, not least of which is the promotion of tax havens. The new segment also features U.S. investigative journalist James Henry and Tax Justice Network Chair John Christensen. Additional stories include fraud at the Trump Foundation and why infamous US tax haven Delaware is supporting a financial transparency bill. You can find the podcast and further reading here. Enjoy!

California Passes Online Privacy Law - Jerri-lynn Scofield - California’s state Senate and Assembly each unanimously passed the  California Consumer Privacy Act of 2018  last week. The measure will take effect on 1 January 2020 and provides consumers with a modicum of greater control over their personal data. Ars Technica reports in California approves privacy rules opposed by ISPs and tech companies that tech companies– including broadband providers, tech companies, and advertising groups– lobbied hard to block a more wide-ranging November privacy rights ballot initiative . The Intercept provides further detail on these efforts in GOOGLE AND FACEBOOK ARE QUIETLY FIGHTING CALIFORNIA’S PRIVACY RIGHTS INITIATIVE, EMAILS REVEAL. The new California law appears to be a victory for those who oppose efforts to hoover up and exploit their personal data– although the legislation is more limited than the ballot initiative it now forestalls, and would be easier to unwind, requiring only a legislative majority, rather than another ballot measure, and two-thirds vote, to overturn. In Heading off a ballot fight, California lawmakers approve consumer privacy rules. the Los Angeles Times suggests that the California model could be adopted by other states:  Under the new rules, Californians would have a right to know what information a business has about them, and have the ability to prohibit companies from selling that information and to ask businesses to delete information they provided. Consumers would be able to sue companies if a data breach leads to their unencrypted information being exposed or stolen.“This will serve as an inspiration across the country,” said Sen. Bob Hertzberg (D-Van Nuys), a coauthor of the bill. Wired analyzes at further length the tech industry’s lobbying efforts to derail the more far-reaching ballot initiative, (building on The Intercept’s reporting): The tech industry did throw the full weight of its lobbying might—and money—at the fight against the ballot initiative, spending millions of dollars to oppose it through a group called the Committee to Protect California Jobs. They argued that the measure would open them up to liability that would hurt their businesses and their ability to hire. [State senator Robert] Hertzberg envisioned the bill as a compromise, in part, because it leaves the task of enforcing the law to the attorney general and takes the right to private action by citizens off the table, except in the case of data breaches.

Pressure mounts on FDIC, Fed to follow OCC’s small-dollar lead --— The Office of the Comptroller of the Currency's May bulletin authorizing national banks to compete with payday lenders was seen as a welcome move by industry groups, but it has prompted new questions about whether other regulators will follow suit.The OCC bulletin encouraged federally chartered banks to make small-dollar loans of 45 days or more in an attempt to remove regulatory roadblocks that have contributed to banks avoiding the installment lending space. Yet there remains skepticism by some about whether banks will try to take market share from payday lenders. Observers say similar decrees by the Federal Deposit Insurance Corp. and Federal Reserve Board, which both regulate state-chartered banks, could provide greater certainty and protect against competitive inequity for different charters.  “It does threaten to create an uneven playing field in the market for small-dollar loans,” Dan Schwartz, a director of policy development at the Conference of State Bank Supervisors, said of the OCC having one policy that is not followed by other agencies. “We definitely wouldn’t want to see that uneven playing field given that the other regulation and supervision of lending across the banking system is pretty harmonized between states and federal regulators.” The industry and state regulators are mostly waiting on a position from the FDIC, which regulates more charters than any of the three banking agencies and has backup supervisory authority for other banks as the nation's deposit insurer.

‘A way of monetizing poor people’: How private equity firms make money offering loans to cash-strapped Americans - The check arrived out of the blue, issued in his name for $1,200, a mailing from a consumer finance company. Stephen Huggins eyed it carefully. A loan, it said. Smaller type said the interest rate would be 33 percent. Way too high, Huggins thought. He put it aside. A week later, though, his 2005 Chevy pickup was in the shop, and he didn’t have enough to pay for the repairs. He needed the truck to get to work, to get the kids to school. So Huggins, a 56-year-old heavy equipment operator in Nashville, fished the check out that day in April 2017 and cashed it. Within a year, the company, Mariner Finance, sued Huggins for $3,221.27. That included the original $1,200, plus an additional $800 a company representative later persuaded him to take, plus hundreds of dollars in processing fees, insurance and other items, plus interest. It didn’t matter that he’d made a few payments already. “It would have been cheaper for me to go out and borrow money from the mob,” Huggins said before his first court hearing in April. Most galling, Huggins couldn’t afford a lawyer but was obliged by the loan contract to pay for the company’s. That had added 20 percent — $536.88 — to the size of his bill.

Student loan servicing giant seeks industrial bank charter -   Nelnet, the nation's largest servicer of federal student loans, has filed an application to establish a Utah-chartered industrial bank. Nelnet, of Lincoln, Neb., said Thursday it filed applications with the Utah Department of Financial Services and the Federal Deposit Insurance Corp.Industrial banks can make loans and take deposits like other banks, but they are exempt from the requirements of the 1956 Bank Holding Company Act, which means they can be owned and operated by nonfinancial companies. The Bank Holding Company Act restricts regulated institutions to activities closely related to banking. Community bank advocates, including the Independent Community Bankers of America, have grown increasingly leery of industrial loan applications in recent years, expressing concerns that mammoth companies such as Walmart or Amazon could use the charter as a back door into banking.  In October, in response to applications for deposit insurance and an industrial bank charter filed by the payment processing firm Square, the ICBA wrote to the FDIC opposing the application. The trade group urged the agency to impose a two-year moratorium on consideration of deposit insurance for any proposed industrial bank.

Battle over control of CFPB is about to end - Leandra English, who sued President Trump last year claiming to be the rightful director of the Consumer Financial Protection Bureau, said Friday that she plans to resign and end her lawsuit. Trump's nomination last month of Kathy Kraninger to be the CFPB's permanent director meant that English faced long odds in her effort to unseat Mick Mulvaney as the CFPB's acting director.   "I will be stepping down from my position at the Consumer Financial Protection Bureau early next week, having made this decision in light of the recent nomination of a new Director," English said in a statement on Twitter posted by her lawyer. "I want to thank all of the CFPB's dedicated career civil servants for your important work on behalf of consumers. It has been an honor to work alongside you."   English's attorney, Deepak Gupta, said English will end her suit, which had also named Mulvaney as a defendant, before the U.S. Court of Appeals for the D.C. Circuit.

CFPB's compliance approach makes regulatory guidance unreliable: MBA --The Consumer Financial Protection Bureau's practice of "regulation by enforcement" and use of nonbinding guidance materials makes its regulatory efforts "unfair and ineffective" to lenders and servicers, claims the Mortgage Bankers Association."Unfortunately, the Bureau's practice of using disclaimers to make guidance nonbinding on the Bureau erodes much of its reliability," Pete Mills, the MBA's senior vice president of residential policy and member engagement, wrote in a letter to the agency."Regulated entities must be able to rely on guidance to ensure they are operating within the rules. MBA therefore asks that the Bureau stand by its guidance and use disclaimers only when absolutely necessary and provide the rationale for doing so," Mills added.The letter was submitted in response to a CFPB request for information and reiterates the trade group's longstanding criticism of the agency's enforcement practices. The bureau has issued roughly a dozen requests for information about its operations as part of a top-to-bottom review by acting director Mick Mulvaney.Regulation by enforcement — the practice of using enforcement actions against individual institutions to set standards for industrywide compliance — is "unfair and ineffective," the MBA claims. Instead, the bureau should enforce regulations "by issuing rules and guidance to facilitate compliance rather than relying on fact-specific enforcement actions to announce new regulatory interpretations," Mills said.

June 2018: Unofficial Problem Bank list unchanged at 92 Institutions, Q2 2018 Transition Matrix -- Note: Surferdude808 compiles an unofficial list of Problem Banks compiled only from public sources.Here is the unofficial problem bank list for June 2018. Here are the monthly changes and a few comments from surferdude808:Update on the Unofficial Problem Bank List for June 2018. During the month, the list count was unchanged on a net basis after one removal and one addition. However, assets increased by a substantial $42.0 billion during the month to $60.0 billion. A year ago, the list held 137 institutions with assets of $35.2 billion. This month, the action against Legacy State Bank, Loganville, GA ($92 million) was terminated.  The large jump in assets this month results from the addition of Deutsche Bank Trust Company Americas, New York, NY ($42.1 billion) to the list. In our last post on the list at the end of May, we noted the large increase in assets on the FDIC’s Official Problem Bank List they disclosed on May25th. At that time we suspected the large increase resulted from the FDIC adding a domestically charted bank with foreign ownership. A few days after our post, several major media outlets confirmed our suspicions. Interestingly, however, is that the Federal Reserve issued the enforcement action to Deutsche Bank Trust Company Americas back in May 2017. It makes us wonder why the bank did not make it onto FDIC’s official list until March 2018. With it being the end of the second quarter, we bring an updated transition matrix to detail how banks are moving off the Unofficial Problem Bank List. Since the Unofficial Problem Bank List was first published on August 7, 2009 with 389 institutions, a total of 1,731 institutions have appeared on a weekly or monthly list at some point. Only 5.3 percent of the banks that have appeared on a list remain today. In all, there have been 1,639 institutions that have transitioned through the list. Departure methods include 960 action terminations, 406 failures, 256 mergers, and 17 voluntary liquidations. Of the 389 institutions on the first published list, only 9 or 2.3 percent still remain in a designated troubled status more than eight years later. The 406 failures represent 23.5 percent of the 1,731 institutions that have made an appearance on the list. This failure rate is well above the 10-12 percent rate frequently cited in media reports on the failure rate of banks on the FDIC's official list.

CRE, multifamily mortgage debt outstanding spikes in first Quarter: MBA --Commercial and multifamily mortgage debt outstanding grew $44.3 billion during the first three months of 2018, the largest first-quarter gain since before the Great Recession, according to the Mortgage Bankers Association.The 1.4% increase from the fourth quarter of 2017 brings total commercial and multifamily mortgage debt outstanding to $3.2 trillion across five investor types. The MBA data includes both whole loans, as well as commercial and multifamily loans in mortgage-backed securities. Banks and thrifts hold the largest share of outstanding debt, at $1.3 trillion, or nearly 40%. But the large first-quarter increase was driven by the commercial mortgage-backed securities market, which added $6 billion in new loans, the MBA said.The CMBS sector has grown for three consecutive quarters for the first time since 2007. And a year ago, CMBS mortgage debt outstanding declined by $21 billion quarter-over-quarter, according to the MBA.Interestingly, first-quarter holdings grew more slowly this year than last among the three largest investor groups: banks, life insurance companies and the government-sponsored enterprises, Jamie Woodwell, MBA vice president of commercial real estate research, said in a statement. Multifamily loans account for $1.3 trillion of the total mortgage debt outstanding, while other commercial real estate accounts for $1.9 trillion. The first-quarter growth came from $19.3 billion in multifamily and $25 billion in other commercial real estate lending.

Lower loan losses expected for GSE risk-sharing deals: Fitch  - With better-than-expected performance of the underlying mortgages, Fitch Ratings cut its loss projections for seasoned government-sponsored enterprise credit risk transfer deals.The ratings agency revised the projected losses on Fannie Mae Connecticut Avenue Securities and Freddie Mac Structured Agency Credit Risk pools, using a stress test for a BBBsf rating, downward by an average of 20 basis points. At the AAAsf rating stress level, projected losses on these pools were revised downward by an average of 75 basis points, Fitch said. Delinquencies on these pools have increased and the newer pools' early late payment trends are on a higher trajectory than at the same point for older transactions, the Fitch report said. "However, performance generally remains strong and better than initial expectations, even for recently issued transactions," the report written by analysts Ryan O'Loughlin and Court Lake said. Among transactions with at least 12 months' seasoning, the average 60 days or more delinquency rate for transactions that include mortgages with a 60% to 80% loan-to-value ratio is 35 bps, with no pool higher than 76 bps. For CRT transactions with loans in the 81% to 97% LTV range, the average delinquency rate is 69 bps, with no pool higher than 112 bps.

US financial board spars with Puerto Rican authorities over how best to pillage island --  The Obama-era Financial Oversight Management Board (FOMB), an unelected body that dictates the budget for Puerto Rico, announced Saturday it would drastically cut government spending after the US territory’s legislature failed to vote for labor law “reforms” demanded by the oversight board.The local government, headed by Governor Ricardo Rosselló’s New Progressive Party, has been working with the FOMB on the fiscal plan for months. The final version of the plan, passed by the FOMB in April, was hailed by financial speculators as a major success as it forecasted a potential $6.7 billion in debt payments to bondholders, $400 million more than a previous estimate from Rosselló. After months of scheming behind closed doors while thousands were dying from the impact of Hurricane María and the criminally negligent response of the Trump administration, the FOMB unveiled a plan to secure the interests of Wall Street and other wealthy bondholders. The plan would eliminate thousands of jobs, enforce the privatization of both the Puerto Rico Electric Power Authority (PREPA) and the water utility, consolidate dozens of state agencies, cut pensions by 10 to 25 percent for retired public employees, and drastically reduce government subsidies to all of Puerto Rico’s 78 municipalities. It would also cut funding to the island’s only public university, cut sick leave and vacation pay by half, slash pensions for retirees, and eliminate mandatory Christmas bonuses. Among the most important measures dictated by the new fiscal plan was the repeal of Law 80, which would turn Puerto Rico into an at-will employment jurisdiction—a so-called reform long sought after by the US corporations and native capitalist class. The measure, among other things, would allow workplaces to fire employees without reason. The failure of the legislature to carry out the repeal last Friday provoked a ferocious backlash by the FOMB.

Dems press FEMA to offer housing assistance in Puerto Rico — Congressional Democrats are urging the Federal Emergency Management Agency to utilize two housing assistance programs to help Puerto Rican families still struggling to recover from the aftermath of Hurricane Maria. In separate letters sent Friday to FEMA Administrator Brock Long, Democrats from the House and Senate pressed the agency to establish a Disaster Housing Assistance Program to provide families with temporary housing vouchers. Senate Democrats in their letter also called for an extension of the Transitional Sheltering Assistance program, provided rent-free housing in hotels in Puerto Rico and the U.S. mainland for 1,800 people affected by the hurricane.

Displaced Puerto Ricans can fly home or stay in Florida with no FEMA housing. They're staying. -- Scattered across a small coffee table in Richard Gonzalez's motel room this week were papers to keep him from becoming homeless. There was a resume in English that his daughter in Puerto Rico had made for him. There was a list of contacts for social service agencies.  "I would like to go to Puerto Rico right now, but to what?" he said in Spanish, explaining that jobs there are nowhere to be found. "I tell my wife: 'What are we going to do? Without work, I can't do anything.'"  FEMA has extended the deadline of its voucher program, known as Transitional Shelter Assistance (TSA), four times since October, sometimes with just a few days to spare. But now the agency has presented a final proposition: Accept a one-way plane ticket back to the island by July 1, or find housing another way.  The vast majority have chosen to stay. Out of nearly 600 families in Florida who were still part of the hotel voucher program on June 26, only 44 had returned to Puerto Rico on FEMA's dime, according to the agency. The latest national statistics provided by FEMA show that, among almost 2,000 families who remained in hotels as of June 2, just 11 had flown home and 180 had expressed interest in doing so.  Luis DeRosa, president of the Puerto Rican Chamber of Commerce in Miami -- which has been working to assist displaced families in the region -- said FEMA was making a mistake by cutting off hotel aid.  Richard Gonzalez has been trying, unsuccessfully, to find long-term housing in South Florida since fleeing Puerto Rico in January. Meanwhile, he has been living in hotels on vouchers from FEMA, but the voucher program ends June 30.  "If you cut them off, where are they gonna go — the street?" DeRosa said. "This is called forced homelessness by the federal government."

Puerto Ricans Displaced By Hurricane Maria Can Stay In Hotels Through July 23 - Puerto Rican families who fled the island in the wake of Hurricane Maria will be able to stay at hotels on the American mainland until at least July 23, a judge decided Tuesday. The decision affects about 1,700 families, according to the Orlando Sentinel. U.S. District Judge Timothy Hillman of Massachusetts extended the benefits through a restraining order temporarily preventing the Federal Emergency Management Association from ending its Transitional Sheltering Assistance program for Hurricane Maria survivors. The program is intended to provide survivors of natural disasters temporary relief while they seek more permanent housing solutions. FEMA said last week it had spent $432 million on the program. The TSA benefits were previously scheduled to run out on June 30. But the advocacy group LatinoJustice PRLDEF, with help from the law firm Manatt, Phelps & Phillips and the Law Office of Héctor Piñeiro, stepped in with a class-action complaint on behalf of evacuees. Over the weekend, another district court judge issued a five-day extension preventing families from being kicked out of the hotels where they’ve stayed since last fall. 

Otting should strengthen, not weaken, CRA - At a House Financial Services Committee hearing in June, Rep. Mike Capuano asked Comptroller of the Currency Joseph Otting if he believes discrimination exists in America today. Otting responded, “I have personally never observed it, but many of my friends from the inner city across America tell me that it is evident today.” Given more than half a dozen opportunities to clarify his statement, Otting repeatedly refused to directly acknowledge the existence of discrimination. Apparently to him, it’s just hearsay.But discrimination remains pervasive in finance and elsewhere in society — and Otting has an opportunity to do something about it. Historic discrimination in federal government programs, including Federal Housing Administration loans, excluded African American borrowers and other people of color. This redlining has been a key culprit in the racial wealth gap, as white families were provided the government-sponsored opportunity to become homeowners and build equity while black families were shut out. White families today have 12 times the wealth of black families.Regardless of whether Otting has personally experienced discrimination, his position requires that he effectively enforce fair-lending laws, including the Community Reinvestment Act — a law that was enacted to address divestment in communities comprised of low-to-moderate income families, people of color and rural residents. The CRA has done important work to drive financial equity and ensure banks serve all communities where they have a financial footprint.  In conducting CRA evaluations, the OCC provides a necessary check on unlawful discrimination in lending.  But this check has been weakened.  The agency under Otting’s predecessor, acting Comptroller Keith Noreika, eased criteria for evaluating bank performance in low-income communities, even while the Federal Deposit Insurance Corp. and the Federal Reserve did not. Yet Otting is still considering what he calls “a transformational CRA framework,” perhaps in partnership with the other banking agencies.

California regulator puts nonbanks on notice about compliance - The number of nonbank mortgage lenders and servicers that did not comply with the California Residential Mortgage Lending Act Annual Report requirements grew this year, prompting a reprimand and warning of penalties from the commissioner of the state's Department of Business Oversight.There were 418 licensed lenders and servicers at the end of 2017, but only 364 filed their reports with the DBO. In 2016, there were 409 licensees and 391 filed their annual report. The total volume of mortgages reported to the state was nearly 30% lower in 2017 than in 2016, on both a dollar volume and loan unit basis. "It would be unwise to draw any conclusions about California's housing market from this data, because the number of licensees that filed their required reports declined by 8% from 2016," said DBO Commissioner Jan Lynn Owen in a press release. "That's disturbing, and we will take appropriate action under the law to deal with licensees that did not file their reports. The data is important for us, the public and policymakers."

Kennedy, Cassidy add flood insurance extension to farm bill  -  — The Senate passed a farm bill Thursday in an 86-11 vote that includes an amendment to extend the National Flood Insurance Program for another six months.The amendment, sponsored by Sens. John Kennedy and Bill Cassidy, both Louisiana Republicans, would keep the flood insurance program from lapsing July 31. But the House has not included the amendment in its version of a farm bill, so it would need to be discussed in a conference committee.“In the absence of reauthorizing legislation, the National Flood Insurance Program will lapse, in the middle of hurricane season, leaving more than 5 million American families and businesses vulnerable,” Kennedy said. “I don’t want people to be scared every time it rains.”

Housing: Part 309 - The Closed Access cities should double or triple their minimum wages --  Kevin Erdmann - Here is a story about rising minimum wages leading restaurants in San Francisco to automate or use self-service features. (HT: MR)  Recently, I argued that a rule requiring solar panels on homes in California, which would normally be inefficient, might actually be somewhat useful in the upside down world that develops when your economy is characterized by obstacles to capital allocation.  I think this might be a better example.
Now, the best solution to the problem of high cost cities is to find ways to expand housing in those cities until costs decline to roughly the unobstructed cost of building.  When reading this post, please don't lose sight of that fact and that, given the choice, that is the policy I would clearly support.  And, it is the policy that would clearly lead to more equitable economic outcomes.  Since that solution hasn't been achieved yet, we are faced with the problem of having a handful of cities, with a population that is basically capped at around 50 million, who have a geographical monopoly on certain kinds of productive labor markets.  In order for those labor markets to grow, or for more Americans to tap into those cooperative networks, we have to engage in a bidding war on the local housing stock.  This leads to rising rents and prices until some marginal household who isn't in a position to leverage those cooperative labor networks can't pay the bills any more, and they move away to a less expensive city, to make room for the more productive worker. This leads to all sorts of conflict.  Complaints about gentrification, etc.  But, for the country as a whole - again, if we have to accept that the optimal solution is unavailable - this conflict is a necessary adjustment that inevitably will happen with any economic growth.  In fact, accelerating this adjustment and this conflict will help strengthen economic growth because it will match workers better with the locations where they can be most productive. But, whether we encourage this transition or not, it will happen.  This is clear today, after we have spent a decade putting the federal thumb on the mortgage market in an attempt to prevent households from bidding up the price of housing.  Yet, the conflict and the pressure continues.  Rents continue to rise.  Local populations are forced to move away.

FEATURE-US capital sued over gentrification ‘pattern’ seeking young, well-educated residents -- Shanifinne Ball is unemployed and cares for her elderly uncle in a trendy, fast-changing part of the U.S. capital. Although she expects eventually to take over her uncle's home, Ball is anxious she could be forced to move out of the area as rents continue to rise. She is part of a lawsuit saying more than a decade of urban development planning aimed at turning Washington into a "world-class city" has been successful in attracting thousands of young, well-educated professionals to the detriment of minority communities, and particularly older people within those groups. The lawsuit, filed last month, comes as the city grapples with some of the highest rents in the country and amid a national crisis in affordable housing. Ball is particularly worried by a new 6,000-unit development going up just blocks from where she lives, part of a massive revitalization project that has transformed the Union Market neighbourhood she lives in. She is "angered that they have replaced her community with another one she largely does not know because the buildings are self-sustaining and residents stay in them," according to the lawsuit. Ball also says the businesses that have come in to cater to the new population are different from those she uses — while some she used to rely on have closed.  

MBA: Mortgage Applications Decrease in Latest Weekly Survey --From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey: Mortgage applications decreased 0.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 29, 2018... The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index remained unchanged from the previous week and was 1 percent lower than the same week one year ago. ...The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.79 percent from 4.84 percent, with points decreasing to 0.41 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

Average mortgage rates continue their recent decline - Mortgage rates maintained their recent slide and have now declined in five of the past six weeks, according to Freddie Mac. The 30-year fixed-rate mortgage averaged 4.52% for the week ending July 5, down from last week when it averaged 4.55%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.96%. Yields on the 10-year Treasury note, which is used in pricing 30-year fixed-rate mortgages, continue to slide. The yield opened on July 5 at 2.843%, a 27-basis-point drop from a high of 3.113% on May 15.

5 ways homebuyers will react to average mortgage rates hitting 5%  The ongoing rise in average mortgage rates is a key affordability issue for prospective homebuyers. As mortgage rates get closer to 5%, many consumers are rethinking their approach to buying a home, according to Redfin. Mortgage rates reached 4% in late 2017, and made their way past 4.5% just this month. Industry projections all point to similar patterns for the remainder of 2018, with interest rates expected to reach 5% by the end of the year. To be sure, mortgage rates are certainly rising, but they're still near historic lows. And while both homebuyers and mortgage professionals may be concerned about the rising cost to buy a home, a tight supply of inventory for sale still remains the toughest challenge for the housing market. "Homebuyers are well aware that higher mortgage rates means higher monthly payments, but mortgage rates remain very low, historically, and buyers will make compromises," said Taylor Marr, senior economist at Redfin, in a press release. "Most of the pressure buyers are feeling is from competition for a very limited number of homes for sale. The fact that such a small share of buyers will scrap their plans to buy a home if rates surpass 5% reflects their determination to be a part of the housing market," he continued. From lowering expectations about their ideal home to moving faster to close a deal, here's a look at five ways house hunters say they would react to average mortgage rates hitting 5%. The data is derived from a Redfin survey, conducted by SurveyGizmo, which polled 4,000 consumers who had purchased or sold a home within the last year, attempted to do so, or planned to do so soon, according to the company. Similar surveys were conducted in May and November of 2017. Adobe Stock Slide 1 of 7

CoreLogic: House Prices up 7.1% Year-over-year in May -- The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA). From CoreLogic: CoreLogic Reports May Home Prices Increased by 7.1 Percent, Consumers Express Desire to Buy Despite High PricesCoreLogic® ... today released the CoreLogic Home Price Index (HPI™) and HPI Forecast for May 2018, which shows home prices rose both year over year and month over month. Home prices increased nationally by 7.1 percent year over year from May 2017 to May 2018. On a month-over-month basis, prices increased by 1.1 percent in May 2018 – compared with April 2018 – according to the CoreLogic HPI. Looking ahead, the CoreLogic HPI Forecast indicates that the national home-price index is projected to continue to increase by 5.1 percent on a year-over-year basis from May 2018 to May 2019. On a month-over-month basis, home prices are expected to rise 0.3 percent in June 2018. The CoreLogic HPI Forecast is a projection of home prices that is calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state. “The lean supply of homes for sale is leading to higher sales prices and fewer days on market, and the supply shortage is more acute for entry-level homes,” said Dr. Frank Nothaft, chief economist for CoreLogic. “During the first quarter, we found that about 50 percent of all existing homeowners had a mortgage rate of 3.75 percent or less. May’s mortgage rates averaged a seven-year high of 4.6 percent, with an increasing number of homeowners keeping the low-rate loans they currently have, rather than sell and buy another home that would carry a higher interest rate.”  CR Note: The CoreLogic YoY increase has been in the 5% to 7% range for the last few years.  This is at the top end of that range.  The year-over-year comparison has been positive for over six consecutive years since turning positive year-over-year in February 2012.

Construction Spending increased 0.4% in May --Earlier today, the Census Bureau reported that overall construction spending increased in May:Construction spending during May 2018 was estimated at a seasonally adjusted annual rate of $1,309.5 billion, 0.4 percent above the revised April estimate of $1,304.5 billion. The May figure is 4.5 percent above the May 2017 estimate of $1,253.6 billion.Both Private and public spending increased: Spending on private construction was at a seasonally adjusted annual rate of $1,005.4 billion, 0.3 percent above the revised April estimate of $1,002.3 billion. ... In May, the estimated seasonally adjusted annual rate of public construction spending was $304.1 billion, 0.7 percent above the revised April estimate of $302.1 billion. This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.Private residential spending has been increasing, but is still 18% below the bubble peak. Non-residential spending is 9% above the previous peak in January 2008 (nominal dollars). Public construction spending is now 7% below the peak in March 2009, and 16% above the austerity low in February 2014. The second graph shows the year-over-year change in construction spending.On a year-over-year basis, private residential construction spending is up 7%. Non-residential spending is up 2% year-over-year. Public spending is up 5% year-over-year.  This was below the consensus forecast of a 0.6% increase for May.

May 2018 Headline Construction Spending Up But Inflation Adjusted Growth In Contraction: The headlines say construction improved month-over-month but was below expectations. Our view disagrees.   Notice: With this release, unadjusted data have been revised back to January 2016 and seasonally adjusted data back to January 2011. All revised estimates are available on our website. The rolling averages declined. Also note that inflation is grabbing hold, and that inflation adjustments bring this series into contraction. The employment gains currently year-over-year are near the same as the year-over-year growth in construction spending.. Econintersect analysis:

  • Growth decelerated 0.6 % month-over-month and up 5.5 % year-over-year.
  • Inflation adjusted construction spending down 0.3 % year-over-year.
  • 3 month rolling average is 4.1 % above the rolling average one year ago which is down 0.3 % month-over-month. As the data is noisy (and has so much backward revision) - the moving averages likely are the best way to view construction spending.
  • Backward revision for the last 3 months was downward
  • Up 0.4 % month-over-month and up 4.5 % (was published 7.6 % last month) year-over-year.
  • Market expected from Nasdaq / Econoday 0.4 % to 1.2 % month-over-month (consensus +0.6).

Update: Framing Lumber Prices Up Sharply Year-over-year --Here is another monthly update on framing lumber prices.   Current prices are well above the bubble highs.
This graph shows two measures of lumber prices: 1) Framing Lumber from Random Lengths through June 15, 2018 (via NAHB), and 2) CME framing futures.. Right now Random Lengths prices are up 44% from a year ago, and CME futures are up about 52% year-over-year.  There is a seasonal pattern for lumber prices. Prices frequently peak around May, and bottom around October or November - although there is quite a bit of seasonal variability. Tariffs on lumber, steel and aluminum are impacting housing costs.   And rising costs - both material and labor - will be headwinds for the building industry this year.

No Savings? No Problem. These Companies Are Helping Home Buyers With Down Payments -  Reese and Kyle Rademacher weren’t sure how they would afford a down payment to buy a home until their real-estate agent mentioned an offbeat idea: crowdfund the money from friends and family.Mrs. Rademacher, a 28-year-old construction technician, set up an online profile with a program called HomeFundMe to solicit donations. Her parents and a few others responded, and in March the Rademachers closed on a $320,000 home in Cheyenne, Wyo.HomeFundMe, a service launched by lender CMG Financial last year, is among a growing suite of services that help borrowers cobble together the funds to buy homes. These companies -- startups and established players in the housing market alike -- say they’re offering options for borrowers who have good credit and income but are struggling to save.  Rising consumer debt and high prices have made it tough for first-time buyers to save for a home. Nearly 40% of renters ages 25 to 34 said they were saving nothing each month for a down payment, according to a survey last year by rental-listing company Apartment List.One startup, Loftium, will supply up to $50,000 for a down payment if the homebuyer agrees to rent out a room on Airbnb and share the income. A few organizations, like Unison Agreement Corp. and Landed Inc., offer “shared equity” contracts through which buyers get money for their down payments in exchange for pledging part of the home’s future value to investors like pension funds or foundations. And some banks, including Bank of America Corp. and Morgan Stanley , have programs through which young adults can get a mortgage with nothing down if their parents pledge investment assets as collateral.Yet some worry that helping borrowers get down payments could actually exacerbate the housing market’s main problem: a dearth of new homes.Economists caution that actions such as loosening credit standards or supplying borrowers with more down payment money worsen the problem b y creating more demand in a supply-constrained market, leading to a further overheating of home prices. And if home prices later fall, borrowers with little of their own money invested are more likely to simply walk away, they say.

Reis: Office Vacancy Rate increased in Q2 to 16.6% Reis released their Q2 2018 Office Vacancy survey this morning. Reis reported that the office vacancy rate increased to 16.6% in Q2, from 16.5% in Q1 2018. This is up from 16.4% in Q2 2017, and down from the cycle peak of 17.6%.  From Reis Economist Barbara Denham: Showing mixed signs of the current state of the office market, the office vacancy rate increased for the second straight quarter to 16.6%. Heading into the ninth year of the recovery, the office market has never seen the robust leasing activity of previous expansions, maintaining a steady but low level of absorption despite healthy office job growth. Net absorption, or occupancy growth, trailed previous quarters at 2.817 million square feet, down from an average of 5.78 million square feet absorbed per quarter in 2017. New completions fell to 8.07 million square feet, down from an average of 10.9 million square feet added per quarter in 2017.
Rent growth, in contrast, was healthier in the last two quarters than in the previous seven as a number of metros had rent growth of 1% or more in the quarter and 4% for the year. The national average asking rent increased 0.7% in the second quarter as did the effective rent which nets out landlord concessions. At $33.07 per square foot (asking) and $26.83 per square foot (effective), the average rents have increased 2.5% and 2.6%, respectively, since the second quarter of 2017.

 Residents Of New York's "Billionaires' Row" Suing To Block Homeless Shelter From Opening -- New York Billionaires - who love to brag about their philanthropy, are suing to block a homeless shelter from being built in their backyard on "Billionaires' Row."  A Monday lawsuit filed with the New York City Supreme Court by the "West 58th Street Coalition" claims that the 150-person homeless shelter is "unsafe" and would pose risks to both its residents and neighbors. The building on West 48th St - formerly the Park Savoy Hotel, backs up against the city's most expensive apartment building - One57 - in which a penthouse sold in 2015 for a record-breaking $100.5 million. Residents are also concerned that the shelter will attract crime to the wealthy up-market Manhattan neighborhood. “Not only is the building unsafe, but crime and loitering” attracted by the project will cause “irreparable injuries that have been found to warrant emergency injunctive relief to block the opening of a homeless shelter,” the lawsuit reads. Mayor Bill de Blasio announced plans to start "turning the tide on homelessness," announced at the beginning of 2018 - an ambitious plan which will eventually see 90 shelters open in all five boroughs if New York - as well as an end to the costly practice of housing homeless in hotels. Some are also concerned that the Democrat mayor is playing politics by choosing to locate a homeless shelter on the wealthy street, where retail estate prices are higher than average, to show that social services sites are being spread across neighbourhoods equally.  Mr De Blasio promised to tackle the unprecedented homelessness crisis when he was re-elected Mayor in 2017, but since he came into office, the number of people in sheltered accommodation has increased by 17 per cent. This is despite doubling the Department of Homeless services' budget in three years. –Telegraph

Reis: Mall Vacancy Rate increased in Q2 2018, "Worst quarter in nine years" -- "The retail sector suffered its worst quarter in nine years with net absorption of negative 3.8 million square feet."Reis reported that the vacancy rate for regional malls was 8.6% in Q2 2018, up from 8.4% in Q1 2018, and up from 8.1% in Q2 2017. This is down from a cycle peak of 9.4% in Q3 2011, and up from the cycle low of 7.8% in Q1 2016. For Neighborhood and Community malls (strip malls), the vacancy rate was 10.2% in Q2, up from 10.0% in Q1, and up from 10.0% in Q2 2017. For strip malls, the vacancy rate peaked at 11.1% in Q3 2011, and the low was 9.8% in Q2 2016. Comments from Reis: With 3.8 million square feet of negative net absorption brought on by the Toys “R” Us store closings, the U.S. Retail Vacancy Rate climbed 0.2% to 10.2% in the second quarter. Rent growth was positive at 0.2%. The Regional Mall vacancy rate also increased 0.2% to 8.6% in the quarter, the average Mall rent increased 0.3%. The Mall vacancy rate has climbed 0.8% from a low of 7.8% at the end of 2016.After withstanding the hundreds if not thousands of store closings over the last 18 months, the neighborhood and community shopping center industry suffered its worst quarter in nine years with negative net absorption of 3.8 million square feet. This pushed the overall vacancy rate to 10.2% from 10.0 percent where it had held steady for the four previous quarters.The national average asking rent increased 0.2% in the second quarter as did the effective rent which nets out landlord concessions. At $21.01 per square foot (market) and $18.39 per square foot (effective), the average rents have increased 1.7% and 1.8%, respectively, since the second quarter of 2017. This graph shows the strip mall vacancy rate starting in 1980 (prior to 2000 the data is annual). The regional mall data starts in 2000. Back in the '80s, there was overbuilding in the mall sector even as the vacancy rate was rising. This was due to the very loose commercial lending that led to the S&L crisis.

Here’s Why Vacant Stores, Zombie Malls Are Much Bigger than Mall Vacancy Rates Indicate – Wolf Another regional long-established department-store chain bites the dust. One in an endless series. The 16 Magic Mart stores in West Virginia, Virginia, and Kentucky, plus a distribution center and the company’s headquarters will be closed and liquidated, according to Ammar’s, Inc., a family-owned company that owns the stores and started with its first store 97 years ago.In a letter to employees, the company blamed “continued inadequate sales leading to substantial financial losses,” and “difficult economic conditions that continue to persist in the markets we operate.” All locations will be closed “sometime around November 1.” And then those stores, many of them located in less than booming environments, will become vacant.Department stores have been hardest hit by online retail. Among them, regional chains have been hardest hit. Bon-Ton Stores – which operates department stores in 23 states under the brands of Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s, and Younkers – is now in the process of being liquidated. 24,000 employees are losing their jobs. Numerous smaller chains have shut their doors. Among the national chains, store closures have been widespread: Macy’s, Sears, Kmart, J.C. Penney, etc. have closed thousands of large stores over the past few years. Smaller stores and specialty stores are shutting down across the country. And these stores become vacant.  Landlords have to find other tenants in this environment, or find another purpose, such as redeveloping them for use by chain restaurants, or bulldozing them and building office buildings or apartment buildings or whatever on the land. Note the magnitude: 3.8 million square feet were “emptied out.” This is tiny compared to the 60 million square feet emptied out by just Bon-Ton and Toys ‘R’ Us. This is why the “vacancy” data, as unappetizing as they may be, aren’t in a steep swoon, though you’d expect them to be, given the rampant store closures. But these numbers are deceptive – because something counts as “vacant” only when the landlord tries to fill it with another retailer. Stores that emptied out and became zombie stores in zombie malls, or the Toys ‘R’ Us stores in bad areas with zero hopes of finding another retail tenant, etc. – they’re not being counted as “vacant” retail space because they’re no longer being marketed as retail space, and the square footage of that retail space disappears from the vacant retail space stats.

Real Disposable Income Per Capita in May - With the release of last week's report on May Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita.At two decimal places, the nominal 0.37% month-over-month change in disposable income was trimmed to 0.15% when we adjust for inflation. The year-over-year metrics are 3.31% nominal and 1.03% real.Post-recession, the trend was one of steady growth, but generally flattened out in late 2015. Things seem to have picked up slightly in 2018. The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013. It will be interesting to see how the recent tax legislation affects the trend over time.  The BEA uses the average dollar value in 2009 for inflation adjustment. But the 2009 peg is arbitrary and unintuitive. For a more natural comparison, let's compare the nominal and real growth in per-capita disposable income since 2000.  Nominal disposable income is up 78.1% since then. But the real purchasing power of those dollars is up only 27.5%.

U.S. Inflation Rate Hit 6-Year High in May - Inflation in the U.S. is back after more than half a decade of falling short.  A price measure watched closely by the Federal Reserve hit the central bank’s target after running below it every month for six years, as a strong labor market nudges wages higher and robust economic growth squeezes slack out of the economy.   Though inflation hits consumers and businesses with more expensive purchases and loans, the Fed believes a little bit of inflation at a consistent and predictable rate is needed to keep the economy growing steadily and at a healthy pace.  The Commerce Department’s price index for personal-consumption expenditures, excluding food and energy costs, rose 2% in May from a year earlier after running below that mark every month since April 2012. The Fed prefers that measure because it strips out categories that make it hard to see underlying inflation trends.  The central bank also looks at a broader measure of inflation that includes food and energy costs. That measure was up 2.3% in May from a year earlier, the largest increase since March 2012, driven in part by higher gasoline prices.  The broader inflation measure has hit the 2% target a few times in recent years, typically when gas or food prices rose, but it tended to fall back below the target for much of the expansion. Its average is 1.3% since May 2011. Economists have blamed factors like weak economic demand, a strong dollar and a slowly recovering labor market for low inflation in recent years. The strong dollar makes imports cheaper, and soft labor markets hold down wages. Structural factors are also thought to have played a role, like an aging population spending less, cheap imports due to globalization and the “Amazon effect” of consumers spending less on goods online. But demand is picking up and unemployment falling. Many forecasters estimate the U.S. economy grew at near 4% or even faster in the second quarter, twice the rate of the 2% average for much of the expansion. More demand tends to push prices higher.

America’s cheese stockpile just hit an all-time high -- The United States has amassed its largest stockpile of cheese in the 100 years since regulators began keeping tabs, the result of booming domestic production of milk and consumers’ waning interest in the dairy beverage.The 1.39 billion-pound stockpile, tallied by the Agriculture Department last week, represents a 6 percent increase over this time last year and a 16 percent increase since an earlier surplus prompted a federal cheese buy-up in 2016. Analysts say commercial warehouse stocks have swelled because processors have too much milk on their hands, and milk is more easily stored as cheese. Demand has also fallen as school cafeterias close for the summer and restaurants wind down the cheesy specials they offer in the winter and early spring. Some have grown concerned that stockpiles will build further yet if trade tensions with China and Mexico cut into cheese exports. Cheese prices have fallen sharply, they say, eroding dairy farmers’ already thin margins. Cheese surpluses do tend to grow at this time every year. Cows are at their most productive in the spring, when the days are longer and the feed better. At the same time, Americans typically eat less cheese now than they do during the holidays, the school year and the winter sports season.

U.S. motorists react to rising gasoline prices: Kemp (Reuters) - U.S. traffic volumes are levelling off in a sign the previous stimulus from cheap gasoline prices is fading as pump prices rise.The volume of traffic on U.S. roads was down by almost 0.6 percent in April compared with the same month a year earlier, after seasonal adjustments, according to statistics released on Monday.Traffic volumes declined year-on-year for the first time since the first quarter of 2014, according to the Federal Highway Administration (“Traffic volume trends”, FHWA, July 2018).Volumes in any one month can be distorted by the timing of public holidays, the distribution of working days and weekends, and unusual weather patterns.But the rate of growth in traffic volumes has been slowing consistently since early 2016, coinciding with the rise in gasoline prices, after accelerating during 2014/15, coinciding with the previous oil price slump.Traffic volume growth has been correlated with the rise and fall in retail gasoline prices over at least the past 25 years, among other factors (https://tmsnrt.rs/2tS9i6S).Cheap gasoline provided a significant stimulus to driving during the latter part of 2014 and throughout 2015 but the impact has faded as average pump prices have climbed back towards $3 per gallon.The slowdown in traffic volume growth is consistent with separate data showing a levelling off in the quantity of gasoline consumed in 2017/18 after rapid growth in 2015/16.The quantity of gasoline supplied to domestic consumers during the first four months of 2018 rose by just 4 million barrels or 0.4 percent compared with the same month a year earlier(“Petroleum Supply Monthly”, EIA, June 2018).

Weekly Gasoline Price Update: WTIC Jumps 8% -- It's time again for our weekly gasoline update based on data from the Energy Information Administration (EIA). The price of Regular and Premium were up a penny each from last week. According to GasBuddy.com, Hawaii has the highest average price for Regular at $3.70 and San Francisco, CA is the most expensive city, averaging $3.80. South Carolina has the cheapest at $2.50. The WTIC end of day spot price closed at 73.94, an 8.6% increase from this time last week.

This Is How Much U.S. Households Lose As Gas Prices Rise -- U.S. gasoline prices are at a four-year-high this year as a result of the higher price of oil which has reached a three-and-a-half-year high in recent weeks.The increased pump prices are now eating into the disposable income of the average American household that will have a total of $440 less to spend this year on other goods and services because this money is expected to go for buying higher-priced gasoline.The higher spending on gas could offset one-third of the gains from the tax cuts, with low- and middle-income families feeling the pinch much more than higher-income earners, according to S&P Global economists Beth Bovino and Satyam Panday.“This would be tantamount to a tax increase for American households,” the economists wrote in a recent report, quoted by Bloomberg. “This is especially true for middle- to low-income Americans.”The higher-income families, on the other hand, will be less affected by the increase in pump prices because spending on gasoline accounts for a smaller share of their total disposable income.“The income tax cut is virtually compensating those who were hurt least from the oil-price change, which may result in even larger inequality,” according to Bovino and Panday. Despite the higher spending on gasoline, however, the overall U.S. economy is now less oil-dependent than in the past, so oil prices in the $70s will have a more mitigated impact on economic growth than it would have in previous years, the S&P Global economists and Fed economists say.

U.S. Light Vehicle Sales increase to 17.5 million annual rate in June --Based on a preliminary estimate from AutoData, light vehicle sales were at a 17.47 million SAAR in June. That is up 5% year-over-year from June 2017, and up 4% from last month. This graph shows the historical light vehicle sales from the BEA (blue) and an estimate for June (red, light vehicle sales of 17.47 million SAAR  from AutoData).This was above the consensus forecast for June.Note that the increase in sales at the end of 2017 was due to buying following the hurricanes.Sales will probably move sideways or decline in 2018 after setting new sales records in both 2015 and 2016. The second graph shows light vehicle sales since the BEA started keeping data in 1967. This was the highest sales rate this year.

AAR: Rail Carloads Up 2.0% YoY, Intermodal Up 6.3% YoY -- From the Association of American Railroads (AAR) Rail Time Indicators. All things considered, it could be a lot worse for rail traffic. U.S. railroads originated 1,159,973 containers and trailers in June 2018, up 6.3% over June 2017. Average weekly intermodal volume in June 2018 was 289,993 units, easily the most for any month in history. U.S. railroads also originated 1,080,769 carloads in June 2018, up 2.0%, or 21,098 carloads, over June 2017. … Not all is well, though. For example, weekly average U.S. grain carloads in June 2018 were the most for June since 1995, but near-term rail grain movements, especially soybeans, are at risk because of the ongoing trade fights. The more tit-for-tat escalation there is, the more railroads could suffer. This graph from the Rail Time Indicators report shows U.S. average weekly rail carloads (NSA).  Light blue is 2018. Rail carloads have been weak over the last decade due to the decline in coal shipments.Total originated U.S. rail carloads in June 2018 were 1,080,769, up 2.0%, or 21,098 carloads, over June 2017. That’s the fourth straight year-over-year monthly increase, something that hasn’t happened since last June. Total carloads averaged 270,192 in June 2018, the most for June since 2015 and the most for any month since October 2015. The second graph is for intermodal traffic (using intermodal or shipping containers):U.S. railroads originated 1,159,973 intermodal containers and trailers in June 2018, up 6.3%, or 68,689 units, over June 2017. Average weekly intermodal volume in June 2018 was 289,993 units, easily the most ever. (The old record was 279,853 in February 2018.) In fact, the four weeks comprising June 2018 were first, third, fourth, and fifth on the all-time weekly U.S. intermodal list.

Trade Deficit decreased to $43.1 Billion in May - From the Department of Commerce reported: The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $43.1 billion in May, down $3.0 billion from $46.1 billion in April, revised. … May exports were $215.3 billion, $4.1 billion more than April exports. May imports were $258.4 billion, $1.1 billion more than April imports. Both exports and imports increased in May. Exports are 30% above the pre-recession peak and up 12% compared to May 2017; imports are 11% above the pre-recession peak, and up 8% compared to May 2017. In general, trade has been picking up. The second graph shows the U.S. trade deficit, with and without petroleum. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products. Oil imports averaged $58.37 in May, up from $54.00 in April, and up from $45.04 in May 2017. The trade deficit with China increased to $33.2 billion in May, from $31.9 billion in May 2017.

May Trade Deficit at $43.10B, Better Than Forecast - The U.S. International Trade in Goods and Services , also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 1992. The monthly reports include revisions that go back several months. This report details U.S. exports and imports of goods and services. Here is an excerpt from the latest report: The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $43.1 billion in May, down $3.0 billion from $46.1 billion in April, revised. Today's headline number of -43.10B was better than the Investing.com forecast of -43.70B. This series tends to be extremely volatile, so we include a six-month moving average. Here is a snapshot that gives a better sense of the extreme volatility of this indicator.

US Trade Deficit Plunges Most In 10 Years - Is Trump Winning? - Confirming the advance trade balance, it could be argued - by those of a particular persuasion - that Trump's trade policies are working as the US trade deficit has collapsed to its lowest since September 2016. The US trade balance for May printed a smaller deficit than expected at $43.1 bn (vs $43.6bn exp) and well down from the revised $46.1bn in April. This is the lowest trade deficit since October 2016 and biggest 3-month reduction in the deficit in 10 years. Exports of goods and services climbed to a record high, outpacing a pickup in imports. Under the hood, the biggest driver of the improvement was US soybean exports rose 90% MoM in May, which looks like pre-emptive buying ahead of China sanctions, and is likely reversed next month. Overall exports increased 1.9 percent to $215.3 billion as soybean shipments overseas almost doubled to $4.1 billion. Exports of civilian aircraft, a category that tends to be volatile, rose $1.9 billion in May. Imports rose 0.4 percent to $258.4 billion, boosted by a record value of capital goods shipments from overseas. However, the report also showed the trade gap with China, the world's second-biggest economy, widened to $32 billion in May from $30.8 billion. This is the biggest trade gap with China for a May since records began. Finally, ex-Petroleum, this is the smallest trade deficit since March 2017... We would expected to see GDP models updated positively shortly as improvement in the trade gap may be a positive for second- quarter growth. 

 U.S. factory orders increase, equipment spending cooling --New orders for U.S.-made goods unexpectedly rose in May, pointing to a strengthening manufacturing sector, but business spending on equipment appeared to have slowed further in the second quarter.  Manufacturing, which accounts for about 12 percent of the U.S. economy, is being boosted by strong domestic and global demand, but growing shortages of workers as well as import tariffs are starting to strain the supply chain.  Factory goods orders increased 0.4 percent amid strong demand for machinery, the Commerce Department said on Tuesday. Data for April was revised up to show orders falling 0.4 percent instead of the previously reported 0.8 percent decrease.  Economists polled by Reuters had forecast that factory orders would be unchanged in May. Orders increased 8.7 percent on a year-on-year basis in May. U.S. financial markets were little moved by the data in quiet trading ahead of Wednesday’s Independence Day holiday. The dollar .DXY fell against a basket of currencies while prices of U.S. Treasuries rose. Stocks on Wall Street were trading slightly lower.  In May, orders for transportation equipment fell 1.1 percent, weighed down by a 7.0 percent plunge in the volatile orders for civilian aircraft. Transportation orders declined 6.1 percent in April. Motor vehicle orders rose 0.3 percent in May. Orders for machinery increased 1.2 percent, extending April’s 1.7 percent surge. That reflected an 8.9 percent jump in orders for industrial machinery, which eclipsed a 3.9 percent drop in demand for mining, oil field and gas field machinery. Orders for primary metals and fabricated metal products declined as did those for electrical equipment, appliances and components, and computers and electronic products.

May 2018 Manufacturing New Orders Improved: US Census says manufacturing new orders improved. Our analysis shows the rolling averages improved. According to the seasonally adjusted data, it was civilian aircraft which was the biggest headwind to the increase but the rest of the transport sector was strong. The data in this series is noisy so I would rely on the unadjusted 3 month rolling averages which improved and remains in a long term improvement trend. Remember the headline numbers are not inflation adjusted - and inflation is a big deal in this sector. Backlog of orders continues in expansion year-over-year unless you consider inflation.

  • The seasonally adjusted manufacturing new orders is up 0.4 % month-over-month.
  • Market expected (from Nasdaq / Econoday) month-over-month growth of -2.2 % to 0.2 % (consensus -0.1 %).
  • Manufacturing unfilled orders increased 0.5 % month-over-month, and up 4.7 % year-to-date.
  • Unadjusted manufacturing new orders growth accelerated 0.2 % month-over-month, and up 9.9 % year-over-year.
  • Unadjusted manufacturing new orders (but inflation adjusted) up 4.1 % year-over-year.
  • Three month rolling new order rolling averages was up 0.3 % month-over-month, and is up 8.9 % year-over-year.
  • Unadjusted manufacturing unfilled orders growth accelerated 0.9 % month-over-month, and up 4.7 % year-over-year [note inflation is running close to 6% in this sector which means backlog is declining]
  • As a comparison to the inflation adjusted new orders data, the manufacturing subindex of the Federal Reserves Industrial Production growth down 0.6 % month-over-month, and up 1.9 % year-over-year.

ISM Manufacturing index increased to 60.2 in June, Concern about Tariffs - The ISM manufacturing index indicated expansion in June. The PMI was at 60.2% in June, up from 58.7% in May. The employment index was at 56.0%, down from 56.3% last month, and the new orders index was at 63.5%, down from 63.7%.  From the Institute for Supply Management: June 2018 Manufacturing ISM® Report On Business® Economic activity in the manufacturing sector expanded in June, and the overall economy grew for the 110th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee: “The June PMI® registered 60.2 percent, an increase of 1.5 percentage points from the May reading of 58.7 percent. The New Orders Index registered 63.5 percent, a decrease of 0.2 percentage point from the May reading of 63.7 percent. The Production Index registered 62.3 percent, a 0.8 percentage point increase compared to the May reading of 61.5 percent. The Employment Index registered 56 percent, a decrease of 0.3 percentage point from the May reading of 56.3 percent. The Supplier Deliveries Index registered 68.2 percent, a 6.2 percentage point increase from the May reading of 62 percent. The Inventories Index registered 50.8 percent, an increase of 0.6 percentage point from the May reading of 50.2 percent. The Prices Index registered 76.8 percent in June, a 2.7 percentage point decrease from the May reading of 79.5 percent, indicating higher raw materials prices for the 28th consecutive month. Respondents are overwhelmingly concerned about how tariff related activity is and will continue to affect their business

Markit Manufacturing PMI: Growth Remains Strong in June - The June US Manufacturing Purchasing Managers' Index conducted by Markit came in at 55.4, down from the 56.4 final May figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction. Here is an excerpt from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release:“The PMI for June rounds off the best quarter for manufacturing for almost four years, but also fires some warning shots about what lies ahead. As such, the second quarter could represent a peak in the production cycle.“The survey has a good track record of accurately anticipating changes in the official manufacturing output data, and suggests the goods-producing sector is growing at an annualised rate of around 2.5%. [Press Release] Here is a snapshot of the series since mid-2012.

US Manufacturing Slumps (PMI) And Jumps (ISM) But Stagflation Scares Soar - Following disappointing prints in European PMIs and contraction in Brazil, US Manufacturing PMI also slipped to the lowest since February with optimism at the lowest since January; BUT ISM exploded to its highest since Feb.

  • Manufacturing PMI dropped from 56.4 to 55.4 (4-month lows) but better than 54.6 expectation.
  • ISM Manufacturing spiked from 58.7 to 60.2 (4-month highs) above all economists' expectations.

Under the hood, it's stagflation red flags as the PMI showed output growth slowing, new order growth at the weakest since Nov 17, but factory gate prices spiked at the second-fastest pace since June 2011. For ISM, prices paid dropped very modestly from multi-decade highs and new orders slipped.ISM's Fiore notes that Factories "are overwhelmingly concerned" about Trump tariffs. " The Section 232 steel tariffs are now impacting domestic steel prices and capacity. Base steel prices have already increased 20 percent since March.” (Fabricated Metal Products)“U.S. tariff policy and lack of predictability, along with [the] threat of trade wars, [is a] causing general business instability and [is] drag on growth for investments.” (Electrical Equipment, Appliances & Components) Commenting on the final PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:“The PMI for June rounds off the best quarter for manufacturing for almost four years, but also fires some warning shots about what lies ahead. As such, the second quarter could represent a peak in the production cycle.  “The survey has a good track record of accurately anticipating changes in the official manufacturing output data, and suggests the goods-producing sector is growing at an annualised rate of around 2.5%.

ISM Non-Manufacturing Index increased to 59.1% in June - The June ISM Non-manufacturing index was at 59.1%, up from 58.6% in May. The employment index decreased in June to 53.6%, from 54.1%. Note: Above 50 indicates expansion, below 50 contraction.  From the Institute for Supply Management: June 2018 Non-Manufacturing ISM Report On Business® “The NMI® registered 59.1 percent, which is 0.5 percentage point higher than the May reading of 58.6 percent. This represents continued growth in the non-manufacturing sector at a slightly faster rate. The Non-Manufacturing Business Activity Index increased to 63.9 percent, 2.6 percentage points higher than the May reading of 61.3 percent, reflecting growth for the 107th consecutive month, at a faster rate in June. The New Orders Index registered 63.2 percent, 2.7 percentage points higher than the reading of 60.5 percent in May. The Employment Index decreased 0.5 percentage point in June to 53.6 percent from the May reading of 54.1 percent. The Prices Index decreased by 3.6 percentage points from the May reading of 64.3 percent to 60.7 percent, indicating that prices increased in June for the 28th consecutive month. According to the NMI®, 17 non-manufacturing industries reported growth. Respondents continue to be optimistic about business conditions and the overall economy. There is a continuing concern relating to tariffs, capacity constraints and delivery.”This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index.This suggests faster expansion in June than in May.

-Markit Services PMI: Business Activity Growth Remains Sharp in June The June US Services Purchasing Managers' Index conducted by Markit came in at 56.0 percent, down 0.8 from the final May estimate of 56.8. The Investing.com consensus was for 56.5 percent. Markit's Services PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.Here is the opening from the latest press release:Robust June survey data indicated that the U.S. service sector enjoyed its strongest quarter for three years. The latest rise in output was the second-fastest since April 2015, behind May’s recent high. The rate of new order growth remained sufficiently strong to encourage the second-highest degree of job creation since September 2015. The rate of input price inflation meanwhile matched that seen in May and was the joint-fastest since September 2013. Output charges also increased strongly in response to robust demand. [Press ReleaseHere is a snapshot of the series since mid-2012.

Weekly Initial Unemployment Claims increased to 231,000 -- The DOL reported:In the week ending June 30, the advance figure for seasonally adjusted initial claims was 231,000, an increase of 3,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 227,000 to 228,000. The 4-week moving average was 224,500, an increase of 2,250 from the previous week's revised average. The previous week's average was revised up by 250 from 222,000 to 222,250.The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.

First Look at June: ADP Says 177K New Nonfarm Private Jobs --The economic mover and shaker this week is Friday's employment report from the Bureau of Labor Statistics. This monthly report contains a wealth of data for economists, the most publicized being the month-over-month change in Total Nonfarm Employment (the PAYEMS series in the FRED repository). Today we have the ADP June estimate of 177K new nonfarm private employment jobs, an increase over the ADP May figure of 189K.The 177K estimate came in below the Investing.com consensus of 190K for the ADP number.The Investing.com forecast for the forthcoming BLS report is for 190K nonfarm private new jobs and the unemployment rate to remain at 3.8%. Their forecast for the May full nonfarm new jobs is (the PAYEMS number) is 200K.Here is an excerpt from today's ADP report press release:“The labor market continues to march towards full employment,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Healthcare led job growth once again and trade rebounded nicely.”Mark Zandi, chief economist of Moody’s Analytics, said, “Business’ number one problem is finding qualified workers. At the current pace of job growth, if sustained, this problem is set to get much worse. These labor shortages will only intensify across all industries and company sizes.” Here is a visualization of the two series over the previous twelve months.

June Employment Report: 213,000 Jobs Added, 4.0% Unemployment Rate - From the BLS: Total nonfarm payroll employment increased by 213,000 in June, and the unemployment rate rose to 4.0 percent, the U.S. Bureau of Labor Statistics reported today. Job growth occurred in professional and business services, manufacturing, and health care, while retail trade lost jobs.  The change in total nonfarm payroll employment for April was revised up from +159,000 to +175,000, and the change for May was revised up from +223,000 to +244,000. With these revisions, employment gains in April and May combined were 37,000 more than previously reported. In June, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $26.98. Over the year, average hourly earnings have increased by 72 cents, or 2.7 percent.The first graph shows the monthly change in payroll jobs, ex-Census (meaning the impact of the decennial Census temporary hires and layoffs is removed - mostly in 2010 - to show the underlying payroll changes). Total payrolls increased by 213 thousand in June (private payrolls increased 202 thousand). Payrolls for March and April were revised up by a combined 37 thousand. This graph shows the year-over-year change in total non-farm employment since 1968. In June the year-over-year change was 2.374 million jobs. The third graph shows the employment population ratio and the participation rate. The Labor Force Participation Rate increased in June to 62.9%. This is the percentage of the working age population in the labor force. A large portion of the recent decline in the participation rate is due to demographics. The Employment-Population ratio was unchanged at 60.4% (black line). The fourth graph shows the unemployment rate. The unemployment rate increased in June to 4.0%. This was above the consensus expectations of 190,000 jobs, and the previous two months combined were revised up by 37,000. A strong report.

June Jobs Report – The Numbers - The U.S. economy added 213,000 jobs in June and the unemployment rate increased to 4.0%. Economists surveyed by The Wall Street Journal expected 195,000 new jobs and a 3.8% unemployment rate. Here are some key figures from Friday’s Labor Department report. The jobless rate in June rose to 4.0% from 3.8% a month earlier. The unemployment rate hasn’t been higher since March, when it clocked in at 4.1% for the sixth straight month. June’s rise in the unemployment rate partially reflected an increase in the number of Americans seeking work. The U.S. economy added 213,000 jobs in June, marking the 93rd consecutive month employers added to payrolls. The economy added an average 215,000 jobs each month for the first half of the year. In theory, hiring should start to slow as the pool of available workers shrinks. That has yet to materialize. June’s 2.7% year-over-year increase in average hourly earnings remained subdued, despite a historically low unemployment rate that should put pressure on employers to ratchet up pay to attract workers. Annual wage growth hasn’t exceeded 3% since 2009. On the month, wages rose by 5 cents to $26.98. Workforce participation was 62.9% in June. The rate is up from a recent low of 62.3% in 2015, and has stabilized over the last couple of years. An aging population could keep labor force participation from rising much more. The broadest measure of unemployment, including those too discouraged to look for work and Americans stuck in part-time jobs but want to work full-time, rose to 7.8% from 7.6% the prior month. That rate, known as the U-6, remains somewhat elevated compared to the last time unemployment was similarly low.

Economy Adds 213,000 Jobs in June, Unemployment Edges Up to 4.0 Percent - Dean Baker - The Bureau of Labor Statistics reported the economy added 213,000 jobs in June. With upward revisions to the data from the prior two months, the average gain over the last three months was 211,000. The unemployment rate edged up to 4.0 percent, but this was due to a reported surge of 601,000 people entering the labor force. The overall employment-to-population ratio (EPOP) was unchanged at 60.4 percent, tied for a high for the recovery. The EPOP for prime-age workers (ages 25 to 54) edged up to 79.3 percent, tying the high for the recovery reached in February. In spite of the strong job gains and widely voiced complaints from employers about difficulties in finding workers, wage growth does not appear to be accelerating. The average hourly wage has increased by just 2.7 percent in the last year. The increase is the same for both overall employment and production and nonsupervisory workers. In fact, if we compare the average wage for the last three months (April, May, and June) with the prior three months (January, February, and March), it appears to be slowing slightly, with an annualized growth rate of just under 2.6 percent. This suggests difficulties of finding qualified workers are hugely overstated. The job gains in the establishment survey were broadly based. Manufacturing led the way with an increase of 36,000 jobs, 12,000 of which were in autos. In spite of healthy job growth, wage growth is especially weak in manufacturing, rising just 1.7 percent over the last year. Health care added 25,200 jobs, almost exactly in line with its average over the last year. Professional and technical services added 25,100 jobs in June, more than its average of 18,900 over the last year. Jobs in educational services jumped 18,900, compared with an average of just over 5,500 in the last year. This may be due to erratic seasonal factors. Restaurants added 16,400 jobs in June, under the average of 18,400 over the year. The government sector added 11,000 jobs, mostly due to an increase of 13,000 jobs in local government. The news in the household survey was mostly positive. The rise in prime-age EPOPs in June was all due to a 0.4 percentage point rise in the EPOP for women, as the EPOP for men fell 0.2 percentage points in the month. Nonetheless the EPOP for men is still 0.9 percentage points above its year-ago level, compared with 0.7 percentage points for women. The EPOP for Hispanics rose 0.4 percentage points to 63.4 percent, a new high for the recovery, while their unemployment rate fell to 4.6 percent, the lowest on record. The number of people involuntarily working part-time fell by 205,000, hitting a new low for the recovery. It is now back to prerecession lows measured as a share of employment. On the negative side, the unemployment rate for black workers increased 0.6 percentage points to 6.5 percent from the record low hit in May. This was most due to a 1 percentage point rise in the unemployment rate for black women, although their EPOP also rose by 0.6 percentage points.

    Payrolls Rise 213K, Stronger Than Expected But Hourly Earnings Disappoint Again, Unemployment Rate Rises - Ahead of today's payrolls report, there was some confusion: will Trump tweet about it (like he did last month), or won't he, and if not, is it because the number will be a disappointment? Well, moments ago the BLS gave us the answer, and contrary to whispers of a miss to the 195K consensus expectation, in June the US labor market continued to chug along, with some 213K jobs created, stronger than expected, while May's +223K payrolls were also revised higher to +244K. According to the household survey, the number of people employed also rose from 155,474K to 155,576K, an increase of 102K workers, while the number of unemployed Americans jumped by 499K from 6.065MM to 6.564MM. Going further back, The April payrolls change was revised up from +159Kto +175K. With these revisions, employment gains in April and May combined were 37,000 more than previously reported. After revisions, job gains have averaged 211,000 per month over the last 3 months. Yet while the payrolls report was solid, there was some disappointment in the Average Hourly Earnings print, which missed expectations of a 2.8% Y/Y increases, rising by 72 cents or 2.7%, unchanged from last month, with the monthly increase of 0.2% also missing the expected number of 0.3%. Average hourly earnings of private-sector production and non-supervisory employees increased by 4 cents to $22.62 in June. The average earnings number was a little bit better on a weekly basis, which saw a 3.0% increase, while weekly hours for all employees were as expected, and unchanged from last month's 34.5. In manufacturing, the workweek edged up by 0.1 hour to 40.9 hours, and overtime edged up by 0.1 hour to 3.5 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained at 33.8 hours. Meanwhile, the broader unemployment rate also surprised, rising from 3.8% to 4.0%, missing consensus of an unchanged print (which may explain the lack of a Trump tweet)... ... with the rise in the unemployment rate largely a function of the increase in number of unemployed people, which increased from 6.065MM to 6.564MM, and the rise in the labor force participation rate, which edged higher from 62.7% to 62.9% Some more details from the report: Over the month, job gains occurred in professional and business services, manufacturing, and health care, while employment in retail trade declined. Employment in professional and business services increased by 50,000 in June and has risen by 521,000 over the year. Manufacturing added 36,000 jobs in June. Durable goods manufacturing accounted for nearly all of the increase, including job gains in fabricated metal products (+7,000), computer and electronic products (+5,000), and primary metals (+3,000). Motor vehicles and parts also added jobs over the month (+12,000), after declining by 8,000 in May. Over the past year, manufacturing has added 285,000 jobs. Employment in health care rose by 25,000 in June and has increased by 309,000 over the year. Hospitals added 11,000 jobs over the month, and employment in ambulatory health care services continued to trend up (+14,000). Construction employment continued to trend up in June (+13,000) and has increased by 282,000 over the year.

    U.S. Hiring Strong in June; Unemployment Rate Rises as More Enter Labor Force —The unemployment rate ticked up in June from an 18-year low, but steady hiring and an increased number of job seekers suggest a strong labor market drew in Americans from the sidelines. U.S. nonfarm payrolls rose a seasonally adjusted 213,000 in June, the Labor Department said Friday. The unemployment rate rose to 4.0% from 3.8% in May. Wages increased modestly last month. Economists surveyed by the Wall Street Journal had expected 195,000 new jobs and a 3.8% unemployment rate. Revised figures show employers added 244,000 jobs in May and 175,000 in April, a net upward revision of 37,000. Through the first half of the year, employers added an average of 215,000 workers to payrolls each month, well outpacing 2017’s average monthly growth of 182,000. That runs counter to economists’ expectation for hiring to broadly ease as the labor market tightens. U.S. employers have added to payrolls for 93 straight months, extending the longest continuous jobs expansion on record. The unemployment rate rose in June from the lowest mark since April 2000 because 601,000 Americans entered the labor force, and not all found jobs. It’s a sign that historically low unemployment may have prompted some of those on the sidelines to start job searches. In June, the share of American adults working or looking for a job rose by 0.2 percentage point to 62.9%. The rate is up slightly from a recent low of 62.3% in 2015, but still near the smallest share of adults participating since the late 1970s, a time when women were still entering the workforce in greater numbers. Steady hiring and low unemployment shows the labor market continues to be an area of strength for the economy since the recession ended nine years ago.  Even thought Americans were finding jobs, scant raises left them with little room in their budgets to step up spending. That could be changing, albeit very slowly. Average hourly earnings for all private-sector workers increased 5 cents last month to $26.98. Wages rose 2.7% from a year earlier in June. Wages haven’t increased at better than a 3% rate from a year earlier since the recession ended in 2009—but wages have risen at least 2.5% from a year earlier in 16 of the past 17 months. That’s a faster pace than recorded earlier in the expansion. Consistent raises and lower taxes could be translating into stronger consumer spending. But consumer prices are also rising at a faster rate, threatening to effectively eat into the buying power of those wage gains. Stronger inflation and low unemployment likely would keep Federal Reserve policymakers on course to gradually raise their benchmark interest rate over the next year to a level that no longer seeks to stimulate growth.   The report showed professional and business services adding 50,000 jobs in June. Employment also grew in manufacturing, health care and construction. Employment fell at retailers. All levels of government added 11,000 jobs last month. The broadest measure of unemployment, including those too discouraged to look for work, plus Americans stuck in part-time jobs but who want to work full-time, rose to 7.8% from 7.6% the prior month. That rate, known as the U-6, remains somewhat elevated compared to the last time unemployment was similarly low. The average workweek was unchanged at 34.5 hours in June.

    June jobs report: another strong late cycle reading --HEADLINES:

    • +213,000 jobs added
    • U3 unemployment rate up +0.2% from 3.8% to 4.0%
    • U6 underemployment rate up +0.2% from 7.6% to 7.8%
    • Not in Labor Force, but Want a Job Now:  up +75,000 from 5.183 million to 5.258 million   
    • Part time for economic reasons: down -205,000 from 4.948 million to 4.743 million
    • Employment/population ratio ages 25-54: up +0.1% from 79.2% to 79.3% (tied for expansion high)
    • Average Weekly Earnings for Production and Nonsupervisory Personnel: rose $.04 from  $22.58 to $22.62, up +2.7% YoY.  (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)     
    • Manufacturing jobs rose +36,000 for an average of +24,000/month in the past year vs. the last seven years of Obama's presidency in which an average of 10,300 manufacturing jobs were added each month.   
    • Coal mining jobs rose +100 for an average of +100/month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month
    • April was revised upward by 16,000. May was also revised upward by 21,000, for a net change of 37,000.   
    • the average manufacturing workweek rose 0.1 hour from 40.8 hours to 40.9 hours.  This is one of the 10 components of the LEI. 
    • construction jobs increased by 13,000. YoY construction jobs are up 282,000. 
    • temporary jobs increased by 9300.  
    • the number of people unemployed for 5 weeks or less increased by 193,000 from 2,034,000 to 2,227,000.  The post-recession low was set one month ago.
    • Overtime rose 0.1 hour from 3.5 hours to 3.6 hours.
    • Professional and business employment (generally higher-paying jobs) increased by 50,000 and  is up 521,000 YoY.
    • the index of aggregate hours worked for non-managerial workers rose by 0.2%.
    • the index of aggregate payrolls for non-managerial workers rose by 0.3%.    

    More solid job gains, but no real wage growth - Jared Bernstein - In the latest solid report on the conditions in the US labor market, payrolls grew by 213,000 in June, and labor force participation ticked up two-tenths, as more people were pulled into the improving labor market. This led to a two-tenths tick-up in the unemployment rate to 4 percent (really, 30 basis points up, from 3.75% to 4.05%). Wage growth stayed at 2.7 percent, the same pace as last month, and the average since last December. It is also worth noting that inflation is now growing at about the same rate as wages, so, in one of the less impressive aspects of the current job market recovery, real hourly pay is flat.  As the economic expansion that began in June of 2009 enters its tenth year, the enduring recovery has moved the job market closer to full employment. However, the key message from this report, is that despite many economic estimates to the contrary, there still appears to be room-to-run. That is, various indicators suggest we’re closing in on full employment, but not quite there yet. These indicators include:

    • –Average job gains of about 200,000 per month over the past year (see JB’s official jobs-day smoother which averages monthly payroll gains over different intervals). The historical pattern is for the pace of job gains to slow more than it has when we’re getting to full capacity in the labor market.
    • –Though wage growth has clearly ticked up a bit—it has moved from 2 percent, to 2.5, to now, 2.7 percent—it has not picked up as much as we’d expect at full employment. Our current low productivity growth regime is a constraining factor, and we’re certainly hearing a lot from employers about labor shortages. But before we take that age-old complaint, we need to see more wage pressure. Employers almost always complain about labor shortages, yet the data suggests they’ve been quite reluctant to raise pay to get and keep the workers they need.
    • –The fact that the unemployment rate has long been below the rate most economists believe to be consistent with stable inflation means we should be seeing inflation growing much faster than has been the case. As noted, price growth has ticked up with wage growth, but the Fed’s preferred price gauge is only now growing at their target level of 2 percent (note: unlike the deflator I applied to wages above, this gauge leaves out energy and food prices).

    Turning back to the closely watched wage series, the two figures below show the annual growth rates in nominal private sector hourly pay and the pay for middle-wage workers (blue-collar manufacturing workers and non-managers in services). The six-month moving average in both cases reveal the recent acceleration as tightening job market has given wage earners more bargaining clout.

     Where The Jobs Were In June: Who's Hiring And Who Isn't - After years of monthly payroll reports padded with excessive minimum wage waiter, bartender, educator or retail worker jobs, the June jobs report was notable for its top-line beat, and which was the record 93rd straight month of US job growth, offset by strong, if disappointing, wage growth, which at 2.7% came in below than 2.8% expected, perhaps due to the preponderance of part-time jobs, but nonetheless showed continued "late cycle" strength in most components even if some negative surprises were also present.Of note: while last month's jobs report was truly impressive in terms of job gains by industry, with the highest paying adding the most workers, in June we saw a continuation of many of the trends observed last month:

    • Continued strength in Goods Production: Mining (+4K), Construction (+13K) and especially manufacturing (+36K).
    • Trade & Transportation Continued to Rebound: Wholesale (+2.9) and Truck Transportation (+2.5K).

    Here the surprise was perhaps that just 2.5K trucking jobs were added, following complaints from the major trucking employers, all of whom have noted they can't find enough people to hire, which suggests there may be an upward revision next month.  As Southbay Research notes, there were several other factors that actually depressed the seasonally adjusted number from rising as much as 250K, chief among them a sharply negative Seasonal Adjustment (-35K) which took some wind out of the June NFP sails. According to Southbay, "usually we can blame weather (as in 2016), but this is just BLS monkeying around." Some other highlights:

    • Manufacturing (+36K): Up on auto (+12K) rebound after fire led to factory shutdowns
    • Retail (-21K): Falls on weak Food (-9K) and weak Merchandise (-18K).  Merchandise stores is Toys-R-Us bankruptcy layoffs
    • Professional Services (+50K): Strong on the back of white collar technical workers (+25K).  relatively weak Temp workers (+9K) suggests some weakness: either lack of supply (insufficient qualified workers at level of pay) or demand (employer demand is softer than surveys relate)
    • Healthcare (+35K): Higher payrolls create more demand for healthcare

    The jobs 'conundrum' continues: 'How are we not getting higher wages? -- The June jobs report brought with it almost universally good news, unless you're a worker looking for a substantially fatter paycheck.Wage gains remain positive but muted, growing at 2.7 percent annually, or pretty much the same level as the previous three months and below Wall Street expectations. That's despite the supposed benefits of a tightening labor market, and a tax cut that was supposed to push average hourly earnings over the 3 percent barrier.Job gains —213,000 in all for nonfarm payrolls — were spread across the board but the positions are paying only a bit more due to a variety of factors that are keeping gains just above inflation."You're creating jobs in good areas where you're creating careers — manufacturing, business services, health care construction, those are places you want to see the jobs created. But the conundrum of wages continues," said JJ Kinahan, chief market strategist at TD Ameritrade. "How are we not getting higher wages? A lot of that has to do with the fact that at lower end of the scale you're seeing people being replaced by machines. There are jobs, but there's a lot of lateral movement."Indeed, there were 6.7 million job openings as of the most recent count and 6.6 million people who the Bureau of Labor Statistics considers unemployed.  That should be creating more substantial wage pressures. Yet the jobs market keeps showing each month that there's more slack than economists are figuring and thus more room for employers to keep pay increases modest.In June specifically, the entrance of 601,000 workers either back into the labor force or entering for the first time helped overall job gains while keeping wages lower. The growth of the labor force participation rate accounted for an increase in the unemployment rate to 4 percent from 3.8 percent, a statistical change that actually showed more vibrant conditions."While the wage growth rate didn’t increase this month, having it hold steady is a good sign," said Cathy Barrera, chief economist at ZipRecruiter, an online employment marketplace. "The increased labor force participation could create slack in the labor market if there isn’t enough demand for those workers. In this case, wage growth may be dampened. That the rate did not decline further indicates that these workers are alleviating a shortage rather than creating slack."

     June Jobs Increase: All Part-Time Workers As Full-Time Jobs Drop - While the headline prints in today's jobs report were solid with the exception of hourly earnings, which disappointed consensus expectations on both a monthly and annual basis, however not too dramatically earning the report a "goldilocks" name, a look below the surface reveals at least one ugly side to today's jobs report: all the job gains were for part-time workers, while full-time employment dipped modestly. In June, the number of part-time workers rose by 145K to 27.028MM, while the full-time workers declined by a modest 89K to 128.658MM. On a longer-term basis, however, this month's jump in part-time workers appears to be an outlier, with the bulk of job additions in the past year manifesting in the form of full time jobs. Finally, the part-time print may merely be a statistical anomaly, because on an unadjusted basis full-time workers surged by over 900K, while part-timers actually dropped by just under 500K. Still, this is a series worth keeping an eye on as an increase in part-time workers at the expense of full-timers may explain the ongoing inability of a tight labor market to translate into higher wages, which as a reminder, was the biggest disappointment in this jobs report. 

    A Record Number Of 85-Year-Old Americans Are Still Working - As we saw with Friday's jobs report, the booming US economy has continued to draw in workers from "the sidelines" - ie people who weren't actively looking for work and were considered to be "out" of the workforce - as the participation rate has ticked higher in recent months (though it remains well below its pre-crisis levels). Still, economists have been largely unable to explain how wages have remained stagnant in a supposedly "tight" labor market. But a recent story in the Washington Post might hold a few clues...  According to Census data analyzed by WaPo, the number of Americans aged 85 and older who are still working has risen to record highs in recent years. Meanwhile, the number of workers between the ages of 18 and 30 who are out of the workforce hasn't been this high since the 1970s, before large numbers of women entered the workforce. At last count, there were 255,000 Americans aged 85 and older who had been working or looking for work in the past 12 months. That's approximately 4.4% of Americans that age - up from 2.6% in 2006. Indeed, it appears Ruth Bader Ginsburg (85) and Warren Buffett (87) are not alone.Overall, 255,000 Americans, 85-years-old and over, were working over the past 12 months. That's 4.4 percent of Americans that age, up from 2.6 percent in 2006, before the recession. It's the highest number on record.They're doing all sorts of jobs - crossing guards, farmers and ranchers, even truckers, as my colleague Heather Long revealed in a front-page story last week. Indeed, there are between 1,000 and 3,000 U.S. truckers age 85 or older, based on 2016 Census Bureau figures. Their ranks have roughly doubled since the Great Recession.America's aging workforce has defined the post-Great Recession labor market. Baby boomers and their parents are working longer as life expectancies grow, retirement plans shrink, education levels rise and work becomes less physically demanding. Labor Department figures show that at every year of age above 55, U.S. residents are working or looking for work at the highest rates on record.The oldest workers in the workforce, many of whom have been forced out of retirement for financial reasons, have clustered in 26 of the 455 occupations tracked by the Census Bureau data.

    Comments on June Employment Report - Bill Mcbride - The headline jobs number at 213,000 for June was above consensus expectations of 190 thousand, and the previously two months were revised up by a combined 37 thousand. Overall this was a strong report. In June, the year-over-year employment change was 2.374 million jobs. This is solid year-over-year growth. Wage growth was slightly below expectations in June. From the BLS:  "In June, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $26.98. Over the year, average hourly earnings have increased by 72 cents, or 2.7 percent." The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees. Nominal wage growth was at 2.7% YoY in June. Wage growth had been trending up, although growth has been moving more sideways recently. Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old. In the earlier period the participation rate for this group was trending up as women joined the labor force. Since the early '90s, the participation rate moved more sideways, with a downward drift starting around '00 - and with ups and downs related to the business cycle. The 25 to 54 participation rate increased in June to 82.0%, and the 25 to 54 employment population ratio increased to 79.3%. The participation rate had been trending down for this group since the late '90s, however, with more younger workers (and fewer 50+ age workers), the prime participation rate might move up some more. The number of persons working part time for economic reasons has been generally trending down, and the number decreased in June to the lowest level since December 2007. The number working part time for economic reasons suggests three is still a little slack in the labor market. These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.8% in June. This graph shows the number of workers unemployed for 27 weeks or more. According to the BLS, there are 1.478 million workers who have been unemployed for more than 26 weeks and still want a job. This was up sharply from 1.189 million in May. Summary: The headline jobs number was solid and the previous two months were revised up. There were a few negatives: The headline unemployment rate increased to 4.0%, and U-6 increased to 7.8%. Wages growth was below expectations, and the number of workers unemployed over 26 weeks increased sharply.

     Is it great to be a worker in the U.S.? Not compared with the rest of the developed world -- The U.S. labor market is hot. Unemployment is at 3.8 percent, a level it’s hit only once since the 1960s, and many industries report deep labor shortages. Old theories of what’s wrong with the labor market — such as a lack of people with necessary skills — are dying fast. Earnings are beginning to pick up, and the Federal Reserve envisions a steady regimen of rate hikes.So why does a large subset of workers continue to feel left behind? We can find some clues in a new 296-page report from the Organization for Economic Cooperation and Development (OECD), a club of advanced and advancing nations that has long been a top source for international economic data and research. Most of the figures are from 2016 or before, but they reflect underlying features of the economies analyzed that continue today.In particular, the report shows the United States’s unemployed and at-risk workers are getting very little support from the government, and their employed peers are set back by a particularly weak collective-bargaining system. Those factors have contributed to the United States having a higher level of income inequality and a larger share of low-income residents than almost any other advanced nation. Only Spain and Greece, whose economies have been ravaged by the euro-zone crisis, have more households earning less than half the nation’s median income — an indicator that unusually large numbers of people either are poor or close to being poor.   An average of 1 in 5 employees lose or leave their jobs each year, and 23.3 percent of workers ages 15 to 64 had been in their job for a year or less in 2016 — higher than all but a handful of countries in the study.

    Minimum wage doesn't cover the rent anywhere in the U.S -- A minimum-wage worker would have to put in lots of overtime to be able to afford a modest, two-bedroom apartment anywhere in the country. And downsizing to a one-bedroom pad barely helps.Even with some states hiking pay for those earning the least, there is still nowhere in the country where a person working a full-time minimum wage job can afford to rent a decent two-bedroom apartment, according to an annual report released Wednesday by the National Low Income Housing Coalition. Even the $15 hourly wage touted by labor activists would not be enough to make housing affordable in the overwhelming majority of states, the coalition found. Nationally, someone would need to make $17.90 an hour to rent a modest one-bedroom or $22.10 an hour to cover a two-bedroom place.Renters across the country earn an average hourly rate of $16.88, the report estimated, a finding that illustrates how even folks earning more than the minimum wage scramble to pay for housing.The findings are based on the standard budgeting concept of not spending more than 30 percent of one's income on housing.The nation's costliest housing is in Hawaii, where one would need to earn $36.13, or roughly $75,000 a year, to be able to rent a modest two-bedroom. The state's minimum wage increased to $10.10 an hour this year. The cheapest housing in the U.S. can be found in Arkansas, where the minimum wage is $8.50 an hour. Yet one would have to make $13.84 an hour, or roughly $29,000 a year, to afford a two-bedroom apartment.

    A jobs guarantee — progressives’ latest big idea - Larry Summers -- The impulse behind the latest “big” progressive idea of creating a federal job guarantee is entirely valid.  Despite America’s vaunted labor-market flexibility, the chance that a 25- to 54-year-old man will be out of work is much greater than it is in France and not very different than what it is in Spain . And in sharp contrast to the rest of the world, the fraction of adult women working in the United States has been declining since 1999 .These trends are important causes of the increasingly bitter nature of U.S. politics and of resistance to technological change and overseas trade. President Trump received disproportionate support in parts of the country where joblessness increased most.If the United States could guarantee jobs in even a modestly efficient manner and in a way that significantly increased employment, it would be a very good thing. I want to be enthusiastic about job-guarantee proposals. But at a time when cynicism about government runs strong, it is important for progressives to avoid making promises that they cannot keep. We must rigorously examine the practicality of a job guarantee.A first question is how much to pay. A program of last-resort employment could likely provide the minimum wage and low benefits. But that will not help those laid off from highly paid manufacturing jobs or those who expect to earn wages well above the poverty line. While such a proposal could help many young people, it is far from clear that it would connect with the principal concerns of Rust Belt adults.On the other hand, if the guaranteed jobs paid premium wages, say double the $7.25 per hour national minimum wage, they would be an attractive alternative for a quarter or more of the workforce, raising questions of cost and economic disruption.

    "These Guys Are Like Diamonds" - America's Trucker-Shortage Hits A Crisis Point - Nearly every consumer product - from food, to textiles to electronics - sold in the US at some point touches the bed of a truck. Which is why the shortage of truckers to ferry goods across the US has become such an intractable problem for American companies - and unemployment at 3.8% isn't helping.A shortage of workers is forcing trucking firms to raise wages and provide other incentives as they seek to fill an "official" shortage of 60,000 jobs that some industry insiders say is really closer to 100,000.   And as companies become more desperate, they're willing to take a look at applicants who never would've had a chance under normal circumstances, according to the Washington Post.At TDDS Technical Institute, an independent trucker school in Ohio where Blocksom has considered enrolling, veteran teachers say they have never seen it this bad. They say there may be closer to 100,000 truck driver openings."As long as you can get in and out of a truck and pass a physical, a trucking company will take a look at you now," said Tish Sammons, the job placement coordinator at TDDS, whose desk is full of toy trucks and fliers from the companies that call her daily begging for drivers. "I recently placed someone who served time for manslaughter."

    Federal Lawsuit Filed In Chattanooga “To Prevent VW From Swapping Older Workers For Younger Ones In U.S.” - Attorneys from Sanford Heisler Sharp LLP on Friday filed a collective action complaint against Volkswagen AG and two of its U.S. subsidiaries in Federal Court in Chattanooga. It alleges Volkswagen AG, Volkswagen Group of America, Inc., and Volkswagen Chattanooga Operations LLC "are engaged in a company-wide policy of age discrimination against employees 50 years and older."Named plaintiff Jonathan Manlove, 60, a resident of Oolltewah, and a former Supervisor in VW’s Chatanooga auto manufacturing facility, is bringing the suit on behalf of himself and similarly situated U.S. employees of Volkswagen AG and its subsidiaries. The Plaintiffs’ legal team includes Sanford Heisler Sharp’s Nashville Office Managing Partner Kevin Sharp, who was a judge on the U.S. District Court for the Middle District of Tennessee from May 2011 through April 2017, serving from 2014 to 2017 as the Court’s Chief Judge, and Leigh Anne St. Charles, an associate in the firm’s Nashville office. Attorney Sharp said, “In the wake of the economically devastating ‘Dieselgate’ emissions scandal that destroyed VW’s reputation worldwide, the German automaker is now attempting to re-boot by rebranding Volkswagen as a younger, sleeker company. Apparently flouting U.S. environmental laws was not enough. The company is now attempting to purge older workers from its management ranks by implementing illegal age discrimination policies. Mr. Manlove is determined that VW’s impermissible employment practices will not go unnoticed or unchallenged.”

    In wake of Lordstown layoffs, UAW stokes anti-Mexican nationalism -- With General Motors Lordstown workers seething over the layoff of the second shift at the Ohio assembly plant on June 22, eliminating some 1,500 jobs, UAW officials are attempting to divert workers’ anger with a nationalist outburst over GM’s announced decision to build the new Chevrolet Blazer in Mexico. The UAW did not lift a finger to oppose the layoffs at Lordstown, which is down to one shift from three in early 2017 and approximately 1,500 workers from 4,500 a year ago. Instead the UAW International and local union signed a secret memorandum of understanding with GM to permit the hiring of contract workers, at one half standard wages, to take jobs held by senior workers at the facility that builds the Chevy Cruze passenger car.Lordstown workers reported that in the wake of the layoffs management was scheduling forced overtime for the remaining workers, again with no opposition from the union. To channel anger away from the company and the union, the UAW has issued a series of statements denouncing the decision by GM to build the Blazer, redesigned as an SUV, at its plant in Ramos Arizpe in Mexico. GM said it made the decision two years ago when all US SUV plants were running at full capacity.  Newly installed UAW vice president for GM Terry Dittes called the decision “disappointing to UAW families.” UAW Lordstown Local 1112 President Dave Green—a long-time enforcer of management’s dictates—called the announcement by GM “a kick in the gut.” Meanwhile, Democratic Senator Sherrod Brown of Ohio issued a statement calling the move by GM “irresponsible.” These chauvinist declarations come in the midst of a fascistic anti-immigrant witch-hunt being conducted by the Trump administration, targeting primarily Mexican, workers, who are being denounced as “criminals” and “rapists.” Just days before the Lordstown layoffs agents for the US Immigration and Customs Enforcement (ICE) raided a meatpacking plant just 18 miles from the Lordstown plant and arrested 146 workers, mainly natives of Guatemala. The Gestapo-like methods being deployed against immigrants are directed against the entire working class. The workplace raids and mass arrests in Ohio are a dress rehearsal for the type of state repression that will be unleashed against all workers, native born and immigrant, who fight to defend their jobs and livelihoods.

    Cree girds for LED tariffs it says will sting -- A North Carolina maker of lighting products tried to convince the Trump administration that paying tariffs on its goods coming out of China would threaten its spending on research and jobs in the U.S. It didn’t work. Cree Inc., already contending with low-cost competitors in its light-emitting diode business, will face a 25% duty this week on LEDs shipped to the U.S. from its plant in China—costs the company said will wreak upon it “disproportionate economic harm.”  Cree’s failure to persuade the White House to exempt its goods from new tariffs illustrates how even appealing to the Trump administration’s desire for American investment and jobs can run smack into its push to also penalize China on trade.  The Trump administration has said its plan to impose tariffs on about $50 billion of Chinese goods is aimed at thwarting Chinese cyberespionage and subsidies that could put the U.S. at a disadvantage both militarily and economically. But trade groups, particularly those that represent tech companies, argue the move will backfire, with U.S. businesses ending up collateral damage.  Cree employs about 4,000 workers in the U.S., primarily in North Carolina, Wisconsin and Arkansas. The three-decade-old company makes everything from $5 light bulbs to more expensive commercial and industrial lighting, and it is developing chips for solar-power gear and electric vehicles. But Cree said its plans would be undercut by the tariffs going into effect Friday. At a May hearing held by a U.S. Trade Representative committee, the company singled out risks to its investment in American technology and patents.  The fallout will lead to “reductions in our R&D spend, our expansion of manufacturing facilities, and, therefore, the development of new cutting-edge” American intellectual property, Greg Merritt, vice president of marketing and public affairs, told the committee. Cree makes about 5.5 billion LED chips a year at its Durham, N.C., plant, it said in filing to the USTR. The manufacturing of some of its LED components starts in Durham, before being shipped to a company facility in Huizhou, China, to be assembled and packaged in housings. The new rules call for Cree to pay a 25% duty on LED housings when they come back to the U.S.

    EFF sues to kill FOSTA, calling it “unconstitutional Internet censorship law” --  The Electronic Frontier Foundation has asked a court to invalidate a new anti-prostitution law, saying that it amounts to unconstitutional censorship of the Internet.The Fight Online Sex Trafficking Act (FOSTA) was approved by Congress and signed by President Trump in April. Websites responded to the new law by shutting down sex-work forums, potentially endangering sex workers who used the sites to screen clients and avoid dangerous situations.  The EFF filed the lawsuit in US District Court for the District of Columbia on behalf of several plaintiffs."In our lawsuit, two human rights organizations, an individual advocate for sex workers, a certified non-sexual massage therapist, and the Internet Archive, are challenging the law as an unconstitutional violation of the First and Fifth Amendments," EFF Civil Liberties Director David Greene wrote. "Although the law was passed by Congress for the worthy purpose of fighting sex trafficking, its broad language makes criminals of those who advocate for and provide resources to adult, consensual sex workers and actually hinders efforts to prosecute sex traffickers and aid victims." Despite Congress's stated purpose of stopping sex trafficking, FOSTA barely distinguishes between trafficking and consensual sex work.While Section 230 of the 1996 Communications Decency Act provides website operators with broad immunity for hosting third-party content, FOSTA eliminates that immunity for content that promotes or facilitates prostitution. Operators of websites that let sex workers interact with clients could thus face 25 years in prison under the new law. FOSTA "is the most comprehensive censorship of Internet speech in America in the last 20 years," Greene said.

    How Smart TVs in Millions of U.S. Homes Track More Than What’s on Tonight - The growing concern over online data and user privacy has been focused on tech giants like Facebook and devices like smartphones. But people’s data is also increasingly being vacuumed right out of their living rooms via their televisions, sometimes without their knowledge.In recent years, data companies have harnessed new technology to immediately identify what people are watching on internet-connected TVs, then using that information to send targeted advertisements to other devices in their homes. Marketers, forever hungry to get their products in front of the people most likely to buy them, have eagerly embraced such practices. But the companies watching what people watch have also faced scrutiny from regulators and privacy advocates over how transparent they are being with users.Samba TV is one of the bigger companies that track viewer information to make personalized show recommendations. The company said it collected viewing data from 13.5 million smart TVs in the United States, and it has raised $40 million in venture funding from investors including Time Warner , the cable operator Liberty Global and the billionaire Mark Cuban.  Samba TV has struck deals with roughly a dozen TV brands — including Sony, Sharp, TCL and Philips — to place its software on certain sets. When people set up their TVs, a screen urges them to enable a service called Samba Interactive TV, saying it recommends shows and provides special offers “by cleverly recognizing onscreen content.” But the screen, which contains the enable button, does not detail how much information Samba TV collects to make those recommendations. Samba TV declined to provide recent statistics, but one of its executivessaid at the end of 2016 that more than 90 percent of people opted in. Once enabled, Samba TV can track nearly everything that appears on the TV on a second-by-second basis, essentially reading pixels to identify network shows and ads, as well as programs on Netflix and HBO and even video games played on the TV. Samba TV has even offered advertisers the ability to base their targeting on whether people watch conservative or liberal media outlets and which party’s presidential debate they watched.

    A teenage girl hanged herself in detention center. Video shows how guards responded -- Surveillance video from inside the Manatee Regional Juvenile Detention Center in Bradenton shows how correction officers reacted after finding a 15-year-old girl who had hanged herself in her room.  Alleny Carbone, a foster teen from Bartow in Polk County, was on suicide watch, at the detention center on June 10 when an officer peeked into her room and made the startling discovery. Paramedics took the teen to Manatee Memorial Hospital, where she later died.  The Florida Department of Juvenile Justice, which operates the detention center near LECOM Park in Bradenton, released the video Monday after the Bradenton Herald filed an open records request.  The DJJ says the teen was not on suicide watch but one of their reports states she was discovered unresponsive during a "10-minute check," which according to the Bradenton Police Department is a level of suicide watch.  A surveillance camera mounted down the hallway from Carbone's room captured how detention center personnel, paramedics and firefighters responded that Sunday evening. At 9:13 p.m. , a detention officer looked into Carbone's room and did a double-take when she realized the girl had hanged herself. The detention officer enters the room and is soon joined by another officer. Both women are then seen immediately running back out in a panic.  For the next three and a half minutes, staff members can be seen running around and walking in and out of the room before one of them calls 911. A recording of the 911 call and the surveillance video reveal the officer calling is down the hallway from Carbone's room as she speaks with a dispatcher. Questions echoed down the hallway as the officer on the phone relayed the dispatcher's questions to detention officers in the room. Multiple times officers hesitate back and forth and it appears they are unsure what to do or where to go. At 9:24 p.m., a little more than two minutes after they were dispatched, Bradenton firefighters rushed into the room. They immediately pulled Carbone into the hallway and took over CPR. Paramedics arrived about a minute later.

    "20lbs Of Human Waste" - Major Medical Convention Abandons San Francisco Citing Street Safety -A foul odor permeated from a massive bag of human excrement sludge left on a street corner in San Francisco's Tenderloin district Saturday. As SFGate reports, the horrendous smell and sight quickly gained notoriety when a Reddit user posted a screen shot of a report made to San Francisco's Citizen app for identifying crimes.  "Twenty pounds of feces dumped onto sidewalk," the report called out. The waste is largely linked to the thousands of people living in the city without housing and without access to public restrooms.  And now, as HotAir.com's John Sexton reports, the disgusting nature of some San Francisco streets is now starting to have significant economic impact. Tourism is big business in San Francisco, bringing in $9 billion dollars a year to the city’s businesses. Now, a major medical convention expected to bring in 15,000 visitors and drop $40 million in less than a week has decided it will stop bringing its members to the City by the Bay because they don’t feel safe walking the streets. From the San Francisco Chronicle:“It’s the first time that we have had an out-and-out cancellation over the issue, and this is a group that has been coming here every three or four years since the 1980s,” said Joe D’Alessandro, president and CEO of S.F. Travel, the city’s convention bureau…“They said that they are committed to this year and to 2023, but nothing in between or nothing thereafter,” D’Alessandro said. “After that, they told us they are planning to go elsewhere — I believe it’s Los Angeles.”The doctors group told the San Francisco delegation that while they loved the city, postconvention surveys showed their members were afraid to walk amid the open drug use, threatening behavior and mental illness that are common on the streets.

    Nevada Traffic Deaths Plunge 10% Following Marijuana Legalization - It is the one-year anniversary of recreational marijuana in Nevada - how has the state fared? Newly published data from the Nevada Department of Public Safety reveals an  unexpected finding: traffic deaths in the state have plunged by 10 percent in the first year since recreational marijuana was legalized. According to a report from NBC Reno, about 310 people died in traffic accidents in Nevada between July 2016 and May 2017. From July 2017 to May 2018 — the first 11-months of legal recreational marijuana — just 277 people died in car crashes across the state. KRNV noted that the Nevada Department of Public Safety was unable to provide data for June. Marijuana became legal in Nevada on January 01, 2017. The law allows anyone 21 and older to possess marijuana and consume it from a licensed dealer.

    Ex-Kentucky judge sentenced to prison for human trafficking - - Former Kentucky judge and conservative political activist Timothy Nolan was sentenced to 20 years in prison after pleading guilty to human trafficking and other sex crimes.  A special prosecutor said Tim Nolan, 71, targeted young women and gave them opioids and threatened to withhold the drugs or call law enforcement if they didn't perform sex acts. Prosecutor Barbara Whaley read statements from some of the women in court. Seven of the 19 victims were under 16 years old. Nolan maintained his innocence on all charges and tried to delay his sentencing multiple ways, including firing his attorney in March and trying to withdraw his guilty plea. According to a Kentucky Department of Corrections spokeswoman, Nolan received the maximum possible sentence of 20 years for human trafficking charges. The former Campbell County District Court judge also served as co-chairman for Pres. Donald Trump's campaign during the 2016 presidential election. 

    South Carolina Police Challenge Summer Reading Titles - Community members, cops, and parents in one South Carolina school district are all pushing back against two summer reading books they believe propagate anti-police feelings. The books, The Hate U Give by Angie Thomas and All American Boys by Jason Reynolds and Brendan Kiely, were on a list of four titles for students taking an English 1 College Prep course. Both books mentioned have received numerous awards and accolades, including the Coretta Scott King Honor.The president of the Fraternal Order of Police for Tri-County Lodge #3 told local news,“It’s almost an indoctrination of distrust of police and we’ve got to put a stop to that. There are other socio-economic topics that are available and they want to focus half of their effort on negativity towards the police? That seems odd to me.”Block neglected to mention that The Hate U Give also depicts a police officer as one of the strong moral centers, a father figure, and positive role model for the main character Starr in the book. Angie Thomas’ debut novel is about Starr Carter, an African American 16 year old girl, who witnesses her unarmed best friend, Khalil, shot and killed by a white police officer. Starr’s Uncle Carlos is a detective on the same police force and remains a strong counterpoint to the the officer who shot Khalil.The other book being challenged, All American Boys by Jason Reynolds and Brendan Kiely, tells the story of Rashad, a black teenager, assaulted by a white police officer who mistakingly accused  him of shoplifting. The other main character Quinn, a white teenage boy who is very close to the offending officer, witnesses the attack on Rashad. The book rotates between the two boys’ POVs as they grapple with raising racial tensions in their school and community, and figuring out where they stand amid these tragic events. Students only need to read one of the four books on the list for the summer. The other books on the list are Love Letters to the Dead and 23 minutes. According to the local news, the option of letting students decide for themselves what to read isn’t good enough – “the Fraternal Order of Police says the two anti-police books should be dropped from the list because they focus on negativity toward officers.”

    New York and Virginia Become the First States to Require Mental Health Education in Schools  - For the first time, two U.S. states will require schools to provide mental health education in a bid to combat a rising tide of depression and psychological hurdles facing American youth. New York and Virginia enacted their respective mental health education laws on Sunday. The states’ statutes differ on the specifics, as CNN reports. In Virginia, the basic premise is that physical education or health education curricula for ninth and 10th graders have a mental health component. In New York, elementary, middle, and high school curriculum will include mental health.New York’s law doesn’t endorse a specific curriculum on the issue; Virginia’s will require the state’s Board of Education to update its “Standards of Learning” to spell out what should be taught. While the moves weren’t specifically responses to recent high-profile suicides, including that of celebrity chef and culture journalist Anthony Bourdain, they do come in the wake of concerning public health trends reported by groups like the Centers for Disease Control (CDC) and others. For instance, the share of adolescent Americans contemplating or attempting suicide nearly tripled between 2008 and 2015, according to an analysis of hospital data published in the journal Pediatrics in May. Suicide became the second leasing cause of death for young Americans in 2016.

    Trump’s attack on the Department of Education -- The Trump administration is proposing to merge the US Department of Education (ED) with the Labor Department, creating the Department of Education and the Workforce. The measure is part of a wider reorganization, which aims to “shrink government,” according to a June 21 announcement. The proposal is a wide-ranging initiative aimed at privatization and budget-cutting. It seeks to restructure and possibly privatize the US Postal Service, the power assets of the Tennessee Valley Authority, Fannie Mae and Freddie Mac. The plan also renames the Department of Health and Human Service as the Department of Health and Public Welfare, in a transparent effort to blackguard the agency and enact drastic cuts in social services.The elimination of a cabinet-level department devoted to the promotion of education has been a longstanding goal of Education Secretary Betsy DeVos and large sections of the Republican Party for decades. Harkening back to the reactionary notion of “states’ rights,” they call for unimpeded state and local control of schools along with a vast expansion of vouchers, privately-run (but taxpayer funded) charter schools and other edu-businesses.To this end, they oppose the role of the ED, which has three basic missions: the provision of grants primarily to impoverished districts; overseeing nondiscrimination in education including students’ access to civil rights in special education and bilingual education; and the measurement and assessment of overall educational progress nationally.

    Trump withdraws Obama guidances backing racial preferences in school admissions -The Trump administration announced Tuesday that it has rescinded guidelines issued under Barack Obama encouraging schools and colleges to use racial preferences in their admissions processes. While the withdrawn documents did not have the weight of law, the move by Trump sends a signal to universities that they may face prosecution by the Justice Department or a cutoff of funds from the Department of Education if they aggressively pursue so-called “affirmative action” policies.The joint letter from the Justice and Education departments said they had withdrawn seven letters and documents issued during the Obama years interpreting Supreme Court rulings and advising how institutions could use race as a factor to encourage “diversity,” while remaining within the boundaries set by the court. At the same time, the Education Department reposted a guidance issued under George W. Bush urging “race neutral” admissions policies.The White House move is aimed a delivering a further blow to the Democratic Party following last week’s Supreme Court ruling barring states from requiring non-union public-sector workers to pay the equivalent of union dues where collective bargaining agreements are in place. That ruling targets a significant source of funding for the Democratic Party, for which the corporatist unions have long served as a cash cow.It also follows the announcement by Associate Justice Anthony Kennedy of his imminent retirement from the court. Kennedy, who generally voted with the court’s more right-wing bloc, was the swing vote in a number of rulings upholding racial preferences in college admissions. He wrote the 4-3 majority decision in the 2016 Fisher v. University of Texas at Austin case upholding the use of race as a factor in making admissions decisions. Trump has promised to choose his nominee to replace Kennedy later this month and is virtually certain to name someone prepared to overturn pro-affirmative action precedent. A lawsuit is currently making its way through a Massachusetts federal court and ultimately to the Supreme Court over whether Harvard’s admissions process discriminates against Asian-Americans. The Justice Department has opened a separate investigation into similar allegations against Harvard filed by a coalition of Asian-American groups in 2015.

     Trump Ends Obama Policies on Race in College Admissions —The Trump administration will begin directing schools and colleges to adopt race-neutral admissions standards, the Education Department said Tuesday, reversing Obama-era guidelines that encouraged the use of race to promote diversity. The Obama guidelines, issued jointly by the Education and Justice departments, laid out legal recommendations for schools looking to use race as an admissions factor. The reversal is among the highest-profile actions by the Trump administration to undo President Barack Obama’s approach to race and affirmative action. The role of race in college admissions has fueled a debate for decades, prompting numerous lawsuits and often confronting universities with sensitive decisions. Trump administration officials and critics of affirmative action said the Obama guidelines, published between 2011 and 2016, went beyond Supreme Court precedent, actively encouraged racial bias and led schools to believe that legal affirmative action is simpler to achieve than the law allows. “Just because the courts have ruled that some kinds of racial discrimination are legally permissible does not mean it is appropriate for the federal government to encourage as much of it as people can get away with,” said Roger Clegg, president and general counsel of the Council for Equal Opportunity, which opposes affirmative action in higher education. In place of the Obama guidelines, Trump officials are reposting a Bush administration document strongly encouraging the use of “race-neutral” methods of admitting students to elementary and secondary schools. “The Supreme Court has determined what affirmative-action policies are constitutional, and the Court’s written decisions are the best guide for navigating this complex issue,” said Education Secretary Betsy DeVos. 

    Questionable Admissions -- When colleges crack down on grade inflation, students invariably complain that they will be at a disadvantage when they apply to graduate school without as many A grades as might otherwise be the case.The students may be correct.New research in the journal PLOS ONE has found that admissions officers appear to favor applicants with better grades at institutions where everyone is earning high grades over applicants with lower grades at institutions with more rigorous grading. The research is based on an experiment involving 23 admissions officers and on long-term, real data on applicants to four competitive M.B.A. programs.For the experiment, scholars from the business schools of Harvard University and the University of California at Berkeley, and a researcher from CivicScience (a polling research organization), gave the admissions officers fake portfolios on applicants to an M.B.A. program. The admissions officers (from unidentified undergraduate and graduate admissions offices) were told that all the applications came from those about to graduate from colleges that admitted smart students of roughly equal academic ability. The transcripts for these fake applicants included not only the hypothetical students' grades, but also measures of the grade distribution at the institutions, showing that some of these institutions generally awarded high grades and others did not. The results? Applicants with high grades were much more likely to be offered admission -- even when the context provided should have indicated that many of the other students were as academically able, but happened to go to institutions that didn't just hand out A grades.

    Graduating "With Honors" Becomes Meaningless As Colleges Hand Them Out Like Candy -  Over half of students who graduated from Harvard and Johns Hopkins universities this year did so with cum laude, magna cum laude or summa cum laude honors or their equivalents, reports the Wall Street Journal.  Just under that many students earned the once-meaningful designations at the University of Southern California, Lehigh, and Princeton. At Middlebury College, anyone with a GPA of at least 3.4 can add Latin honors to their brand new résumé, which was over half of students as of this spring. “I’d say that it’s time to reconsider our eligibility criteria,” said Middlebury Interim Provost Jeff Cason.According to a Wall Street Journal review of graduating seniors who earned designations at schools in the top 50 institutions ranked by the WSJ, honors designations "have become close to the norm at many top.  The share increased to 44% from 32% in the past decade at USC, which requires a GPA of at least 3.5 for the lowest honor, cum laude, and to 44% from 39% at Lehigh, where students need at least a 3.4.WSJ   “A 4.0 does signal something significant, that that student is good,” said Stuart Rojstaczer, a former professor at Duke University who studies grade inflation. “A 3.7, however, doesn’t. That’s just a run-of-the-mill student at any of these schools.” What's to blame? Academic researchers say grade inflation, not smarter students, according to the Journal. A University of Georgia researcher found that 47% of high-school students graduated with an A average in 2016, vs. 39% in 1998. Those students have been maintaining good grades in college.  At Wellesley College, 41% of this year’s graduating class completed their degrees with Latin honors, which means a GPA of at least 3.6 at the Massachusetts school. That share has risen in the past two years, after being roughly one-third for much of the past decade. A spokeswoman said the school hasn’t pinpointed the cause of the increase. -WSJ

    Ranking America's Colleges by Gender Wage Gap -A big motivation for going to college is money. Put simply, after you graduate, you’re eligible for a whole range of high paying careers like investment banking, management consulting, and engineering. The economic research generally shows that a college degree is a sound investment to boost your future earnings.But do female and male graduates from America's top colleges earn about the same money when they graduate? The gender gap in pay, where women earn less than men, has been one of the most persistent inequalities in America after all. Does this start upon graduation and even from the best schools in America?In this analysis, we worked with Priceonomics customer Business Student to look at Department of Education data from the College Scorecard project, and looked at average earnings for people who had started school six years prior and who were now working and no longer full time in school. We looked at the average “top” 117 schools, as defined by the US News College rankings (the 100 universities plus the top 25 liberal arts schools, less any schools that didn’t report the data).  Even upon graduation at top schools, there is a resounding gender gap. The average male in our study is earning $59K, while the average female is earning 19% less with a salary of $48K. In fact, of the 117 universities, only three schools had female graduates that made more than male ones upon graduation (Clark University, Stevens Institute of Technology, and Yale University). For all other schools, female graduates earn less than males, often by a substantial amount.  The school with the largest gender gap in earnings is Brigham Young, where female graduates earn 57% less than male ones do. At other top schools like Princeton, Williams, Stanford and Carnegie Mellon, male graduates earn at least 30% more than female ones on average.

    Education Department ordered to halt loan collection from defrauded students - -- A federal judge in California ordered the Department of Education to stop collecting student loan debts from students who were defrauded by Corinthian Colleges.Magistrate Judge Sallie Kim of the U.S. District Court in San Francisco issued an order Tuesday to ban the Education Department from using earnings data to grant or deny partial student loan forgiveness to Corinthian students and block the collection of their federal debts. The court ruled in May that the Department of Education violated privacy laws by using Social Security Administration information to determine the amount of debt relief to grant Corinthian students and the agency interpreted the ruling applied only to four students identified as plaintiffs in the case. Kim's order Tuesday clarified the ruling extended to all Corinthian borrowers.   Harvard University's Project on Predatory Student Lending filed motion for an injunction in March to block Education Secretary Betsy DeVos and the Department of Education from using "gainful employment" metrics provided by the Social Security Administration to partially deny student loan relief."The Department of Education has now been rebuked in court not once, but twice for violating the rights of students it should be serving," said Toby Merrill, director of the Project on Predatory Student Lending.Kim said the order will stay in place until the court can determine a proper course of action for relieving the debt, but doesn't prevent DeVos from granting full relief to Corinthian students in the interim.Under guidelines announced in December, the department offered students earning 49 percent or less of what their peers earn 100 percent relief on their loans and students at or above that threshold would be offered relief on a sliding scale. At the time the Department of Education said it approved discharge of 12,900 pending claims submitted by former Corinthian students, while 8,600 pending claims had been denied.

    A horrific injury. A heroic rescue effort. And a desperate plea: Please don’t call the ambulance, it costs too much -- When a 45-year-old woman’s leg became caught in the gap between an Orange Line train and the platform Friday afternoon, she was in agony. The cut on her leg went down to the bone.Beyond her pain, she had another fear. Shaking and crying, she begged people not to call an ambulance. “Do you know how much an ambulance costs?” she wept.Her fellow passengers rushed to her aid. One man stood behind her so she could lean on him. Another passenger placed a cold bottle of water to her leg. And at least 10 people pushed on the car together, moving it just enough for the woman to pull free, according to a video of the accident the MBTA released Monday. Marleny Polanco said she was at Mass. Ave. Station at the peak of rush hour when she heard the woman scream. Immediately, a group of men were there to help push the train away from the platform, Polanco said. “It all just happened so fast,” Polanco said. “I think within a minute or so, she was able to pull her leg out.”A few people helped wrap her leg in a compress, Polanco said. Despite her injuries, the woman did not want anyone to call an ambulance, saying it would cost her thousands of dollars. The woman’s painful calculation that she could not afford an ambulance has drawn wide attention after a Globe reporter who witnessed the aftermath of the platform accident posted about it on Twitter. The post has received more than 6,700 retweets and 13,000 likes. On Monday, the New York Times editorial board wrote about the accident under the headline “This Tweet Captures the State of Health Care in America Today. According to a police report, the woman suffered no broken bones but her left thigh suffered a “serious laceration, exposing the bone” and would need surgery. She was taken to Boston Medical Center

    San Francisco hospital treated Korean tourists’ baby with a nap and a bottle of milk formula. The bill was US$18,000 - On the first morning of Jang Yeo-im’s vacation to San Francisco in 2016, her eight-month-old son, Park Jeong-whan, fell off the bed in the family’s hotel room and hit his head. There was no blood, but the baby was inconsolable. Jang and her husband worried he might have an injury they couldn’t see, so they called 911, and an ambulance took the family – tourists from South Korea – to Zuckerberg San Francisco General Hospital (SFGH). The doctors at the hospital quickly determined that baby Jeong-whan was fine – just a little bruising on his nose and forehead. He took a short nap in his mother’s arms, drank some infant formula and was discharged a few hours later with a clean bill of health. The family continued their vacation, and the incident was quickly forgotten.Two years later, the bill finally arrived at their home: They owed the hospital US$18,836 for a visit lasting three hours and 22 minutes, the bulk of which was for a mysterious fee for US$15,666 labelled “trauma activation,” also known as “a trauma response fee.“It’s a huge amount of money for my family,” said Jang, whose family had travel insurance that would cover only US$5,000. “If my baby got special treatment, OK. That would be OK. But he didn’t. So why should I have to pay the bill? They did nothing for my son.”

    Pfizer Hikes 100 Drug Prices Despite Trump's Promise Of "Massive Cuts" - Despite the fanfare with which the White House unveiled its "American Patients First" initiative earlier this year, it appears American pharmaceutical giants didn't get the memo, and are still going ahead with their annual "price modifications." As the Financial Times reports, Pfizer, the largest drug company in the US, has raised prices on 100 products.  The price hikes were announce just weeks after President Trump claimed that US drug companies would soon announce "massive" voluntary price cuts. Pfizer's decision "threatens to fuel the backlash over the soaring cost of medicines used in the US" as the price increases hit some of the company's most popular drugs, including erectile-dysfunction drug "Viagra" (the "little blue pill").  The increases are effective as of July 1. In most cases, the increases are just over 9%, which is in line with the annual 10% price hikes adopted by most drug companies. Putting that number in context, core inflation printed at 2% last week. While news of the price hikes occupied the headlines, Pfizer would like consumers to know that its price "modifications" also included lowering the prices of five drugs by between 16% and 44%. According to the FT, this is Pfizer's second round of price hikes this year.  Drug prices were a major issue during the 2016 campaign, with both Trump and his Democratic opponent Hillary Clinton. Last year, Trump accused the pharmaceutical industry of "getting away with murder." However, one insider pointed out that it's "business as usual" for the pharmaceutical industry as, when accounting for the increases in price as of January, some drug prices have risen by almost 20%. "The latest increases signal that it is 'business as usual' rather than the voluntary concessions that Trump indicated were coming," said Michael Rea, chief executive of Rx Savings Solutions, which makes software that helps employers and health insurers lower the amount they spend on prescription drugs. Viagra and Chantix have endured price hikes of 20% and 17%, respectively, so far this year. Pfizer defended its decision by arguing that the "list price" for most of its inventory remains untouched. Furthermore, insurers and customers rarely pay the sticker price.

    Opioid Makers, Blamed for Overdose Epidemic, Cut Back on Marketing Payments to Doctors -- The past two years have been a time of reckoning for pharmaceutical manufacturers over their role in promoting opioid drugs that have fed a national epidemic.Lawsuits and media reports have accused Purdue Pharma, the maker of OxyContin, of aggressively marketing the powerful narcotic even after it knew the drug was being misused. Prosecutors have charged the founder of Insys Therapeutics and several of the company’s sales representatives and executives for their roles in an alleged conspiracy to bribe doctors to use its fentanyl spray for unapproved uses. State and local governments have sued a host of drugmakers, alleging they deceptively marketed opioids and seeking to recoup what it costs to treat people addicted to the drugs.But as public attention increases, the marketing tide may finally be retreating, a new ProPublica analysis shows. Pharmaceutical company payments to physicians related to opioid drugs decreased significantly in 2016 from the year before.In 2016, drug makers spent $15.8 million to pay doctors for speaking, consulting, meals and travel related to opioid drugs. That was down 33 percent from $23.7 million in 2015 and is 21 percent less than the $19.9 million in spent in 2014. Companies are required to report the payments publicly under the Physician Payment Sunshine Act, a part of the 2010 Affordable Care Act. ProPublica analyzed these payments in conjunction with our update of Dollars for Docs, an online tool that allows users to view and compare promotional payments to doctors from drug and medical device companies. Today, we updated the tool to add payments to doctors for 2016. It now includes more than $9 billion in payments since 2013 to more than 900,000 doctors.Among opioids, the biggest decreases in spending were for Subsys, the fentanyl spray that has spawned criminal charges against officials and sales representatives at drug maker Insys, and Hysingla ER, an extended-release version of hydrocodone made by Purdue Pharma. Payments related to Subsys decreased from more than $6 million in 2015 to less than $2.4 million in 2016. Payments for Hysingla dropped from about $6.3 million in 2015 to $2.2 million in 2016.

    Study shows 144,000 US inmates denied care for hepatitis C - A recent survey and round of interviews at state prisons across the United States revealed that staff are refusing treatment to at least 144,000 inmates suffering from hepatitis C. If left untreated, the condition can potentially mean a slow and agonizing death sentence. The recent revelation once again sheds light on the horrific conditions facing inmates in prisons across America, a country which is time and time again hailed as the richest in the world. Prison officials cited high drug prices as their reason for failing to treat inmates. The anti-viral medication required to treat the condition frequently can cost over $90,000 for a 24-week regimen, depending on the strain of the virus and the patient’s medical history. The new round of drugs, introduced within the last decade, have over a 95 percent success rate in eradicating the virus, involving very limited side effects.The previous form of treatment involved a year-long regimen of shots and ribavirin pills that produced chemo-like symptoms in patients, with only a 50 percent cure rate. The older, less effective form of treatment costs around $70,000.Hepatitis C (HCV) is one of three types of blood-borne virus that infects the liver, causing inflammation. Whereas hepatitis A usually causes only a short-term infection, B and C can lead to long-term and even lifelong inflammation. Long-term infection can lead to serious medical complications including liver damage, cirrhosis (scarring of the liver), liver cancer, and even death. According to the Centers for Disease Control, roughly 75 to 85 percent of people who become infected with HCV will develop a chronic infection. While vaccines exist for types A and B, there is no vaccine for HCV.Around 97 percent of inmates living with HCV are denied access to the cure, according to a survey conducted through the Toni Stabile Center for Investigative Journalism at Columbia University’s Graduate School of Journalism. The high price of the new treatments has led both state and federal prisons to ration the drug, limiting it to patients with a high risk of developing liver problems or with low blood platelet levels. It can take two to three decades before the disease becomes life-threatening, while patients can transmit the disease during this entire period, through such means as the sharing of toothbrushes, razor blades and needles, or less commonly through sexual contact.

    Study Shows Most People Are Spreading Dangerous Bacteria Around the Kitchen and Don’t Even Realize It - USDA – A new study from the U.S. Department of Agriculture shows that when it comes to handwashing before meals, consumers are failing to properly clean their hands 97 percent of the time. Rushed handwashing can lead to cross-contamination of food and other surfaces, resulting in foodborne illness.  The preliminary results of the observational study, conducted by USDA in collaboration with RTI International and North Carolina State University, showed some concerning results.

    • Handwashing: the study revealed that consumers are not washing their hands correctly 97 percent of the time.
      • Most consumers failed to wash their hands for the necessary 20 seconds, and
      • Numerous participants did not dry their hands with a clean towel.
    • Thermometer use: results reveal that only 34 percent of participants used a food thermometer to check that their burgers were cooked properly.
      • Of those who did use the food thermometer, nearly half still did not cook the burgers to the safe minimum internal temperature.
    • Cross contamination: the study showed participants spreading bacteria from raw poultry onto other surfaces and food items in the test kitchen.
      • 48 percent of the time are contaminating spice containers used while preparing burgers,
      • 11 percent of the time are spreading bacteria to refrigerator handles, and
      • 5 percent of the time are tainting salads due to cross-contamination.

    The U.S. Centers for Disease Control and Prevention estimates that 48 million Americans are sickened with foodborne illnesses each year, resulting in roughly 128,000 hospitalizations and 3,000 deaths. Children, older adults and those with compromised immune systems are especially at risk.

    Millions of People Exposed to Bisphenols While Shopping Every Day - It seems like such a simple thing, but the act of signing and handling a receipt can increase the amount of hormone disrupting chemicals bisphenol-A (BPA) or bisphenol-S (BPS) inside your body significantly. And this is problematic if you are trying to lose weight, wanting to have calm and intelligent children one day, suffering from anxiety, depression, inflammation or food sensitivities or wanting to avoid cancers. Bisphenols (BPA & BPS) have the ability to hijack your hormonal systems at very small levels, so what are they doing in thermal receipt paper and how are they getting into our bodies? That answer is complicated but here we go!  About 9 out of 10 retail stores are using thermal receipt paper that is coated with bisphenol powder and it reacts with heat and friction to create the ink you see. This is incredibly problematic because it's in powder form and easily gets on to your hands when you are signing and handling receipts. Then within seconds it can get into your bloodstream. This wouldn't be a big deal if we were talking about something like alcohol, which is inside antibacterial gels, because dose equals the poison. But bisphenols have demonstrated through studies that smaller amounts can cause damage to the hormonal system and therefore that rule doesn't work to protect the public. In fact, it's estimated that the amount of bisphenols you are exposed to when handling thermal receipt paper is up to 1000x more potent than the exposure from canned food. For this very reason, the handling of thermal receipt paper is a very relevant public health concern that retailers need to get a handle on to protect their customers and workers.  So what are they doing about it? Well, not much. Why? There isn't enough public pressure yet.

    More than 200 people ill from parasite in Del Monte vegetable tray recall - An outbreak of cyclosporiasis has sickened 212 people in four states since May, the US Centers for Disease Control and Prevention said Thursday. Seven of those individuals have been hospitalized. The outbreak is linked to Del Monte vegetable trays with fresh broccoli, cauliflower, celery sticks, carrots and dill dip. A recall of these 6-,12- and 28-ounce trays in clear, plastic clamshell packaging that contain these items was issued on June 15. Michigan, Iowa, Minnesota and Wisconsin have all reported illnesses. “The two cases from Michigan reportedly purchased the vegetable tray in Wisconsin and therefore Michigan is not impacted from this outbreak,” a statement from the US Food and Drug Administration said.  Cyclosporiasis is an intestinal infection caused by the cyclospora parasite. People are infected by consuming food or water contaminated with the parasite. Federal, state and local health officials are working to identify which food item on the trays is the culprit and the source of the contamination. Symptoms of cyclospora include diarrhea and frequent, sometimes explosive bowel movements, according to the CDC. Those who are infected may also experience loss of appetite, weight loss, stomach cramps or pain, nausea, gas and fatigue. Vomiting, headache, fever, body aches and flu-like symptoms can also occur. The illness can last from a few days to a few months and patients may feel better but then get worse again. Patients can be treated with antibiotics. The earliest reported symptoms in this outbreak began on May 14 and those who are ill range in age from 13 to 79 years old.

    Victims blame FDA for food-recall failures - People had been getting sick from eating I.M. Healthy Original Creamy SoyNut Butter for more than two months when Peter Ebb, a 59-year-old Boston lawyer and health enthusiast, went for a run and then ate his usual gluten-free English muffin smeared with soy nut butter. Later that morning — March 6, 2017 — Ebb saw a message from Amazon, which had sold him the nut butter, that the manufacturer had recalled it for contamination by E. coli bacteria. Ebb threw away a protein drink he had made with the soy nut butter, but didn’t worry too much. The Food and Drug Administration warning that was linked to the email was worded very cautiously: Though serious illnesses might result, even potentially leading to death, “most healthy adults can recover completely within a week.”   Six days later, Ebb was hospitalized and developed a deadly type of kidney failure. Within days, doctors told his wife to send for their children in case they needed to bid him a last goodbye. He survived, but remains unable to work full time and has trouble climbing the stairs. Now, he’s joining with 18 other victims to file claims against the companies responsible and call attention to the inadequacy of the nation’s recall system. A POLITICO investigation found that the I.M. Healthy SoyNut Butter case — which officials at the FDA and the Centers for Disease Control and Prevention have hailed as an improvement over past failures — was nonetheless emblematic of persistent weaknesses in the nation’s food-safety system, some of which haven’t been corrected for two years after being flagged by the agency’s inspector general. Two months elapsed between the first person sickened by eating I.M. Healthy SoyNut Butter on Jan. 4 and the recall orders that began on March 3 and expanded three more times until March 10. The FDA, working through a national network of labs that identifies outbreaks, pinpointed the contamination on Feb. 22. Victims maintain that the FDA should have ordered a recall on its own authority, given that a few days or even hours can make a difference in a deadly outbreak. 

    Meat 2.0? Clean meat? Spat shows the power of food wording - If meat is grown in a lab without slaughtering animals, what should it be called?That question has yet to be decided by regulators, but for the moment it's pitting animal rights advocates and others against cattle ranchers in a war of words.Supporters of the science are embracing "clean meat" to describe meat grown by replicating animal cells. Many in the conventional meat industry are irritated by the term and want to stamp it out before it takes hold."It implies that traditional beef is dirty," says Danielle Beck, director of government affairs for the National Cattlemen's Beef Association. The spat shows the power of language as a new industry attempts to reshape eating habits. It's why the $49.5 billion U.S. beef, poultry, pork and lamb industry is mobilizing to claim ownership of the term "meat."Squabbles over language are erupting across the food business as established definitions for mayonnaise and milk are also challenged by the likes of vegan spreads and almond drinks. What gets to be considered "meat" is a particularly touchy subject as new companies come up with substitutes they say are just like the real thing.

    EPA blocks warnings on cancer-causing chemical  - The Trump administration is suppressing an Environmental Protection Agency report that warns that most Americans inhale enough formaldehyde vapor in the course of daily life to put them at risk of developing leukemia and other ailments, a current and a former agency official told POLITICO. The warnings are contained in a draft health assessment EPA scientists completed just before Donald Trump became president, according to the officials. They said top advisers to departing Administrator Scott Pruitt are delaying its release as part of a campaign to undermine the agency’s independent research into the health risks of toxic chemicals.  “They’re stonewalling every step of the way,” the current official said, accusing political appointees of interfering with the formaldehyde assessment and other reports on toxic chemicals produced by EPA’s Integrated Risk Information System.  The current official and former official requested anonymity out of fear for their jobs and the impact that speaking out could have on the IRIS program. Interfering with the formaldehyde study is one of several steps Trump's EPA has taken to side with the businesses the agency is supposed to regulate and undermine the agency's approach to science, critics say.

    Air Pollution Increases Diabetes Risk at Levels EPA Calls 'Safe,' Study Finds - A major study published Friday in The Lancet Planetary Health has confirmed a reported link between air pollution and diabetes in a big way, finding that particulate matter exposure can increase risk for the disease even at levels currently deemed safe by the U.S. Environmental Protection Agency (EPA) and the World Health Organization, CNN reported. "This is important because many industry lobbying groups argue that current levels are too stringent and should be relaxed. Evidence shows that current levels are still not sufficiently safe and need to be tightened," study lead author and Washington University School of Medicine in Saint Louis assistant professor Dr. Ziyad Al-Aly said in a Washington University press release.  The study found that air pollution caused 3.2 million new diabetes cases globally in 2016, 14 percent of the year's total cases, and causes 150,000 new cases in the U.S. every year. Pollution-linked diabetes was also the cause of 8.2 million years of healthy life lost globally in 2016, 14 percent of the total number of healthy years lost due to diabetes that year. In the U.S., 350,000 years of healthy life are lost a year. "This is a very well-done report, very believable, and fits well with this emerging knowledge about the impacts of air pollution on a series of chronic diseases "I think you can very directly link relaxation of air pollution control standards with increased sickness and death," said Dr. Philip Landrigan, the dean for Global Health at Icahn School of Medicine at Mount Sinai in New York. The study builds on previous research linking diabetes to air pollution, as well as a growing awareness of the extent of the health risks associated with pollution exposure. "Ten or 15 years ago, we thought that air pollution caused pneumonia, asthma and bronchitis and not much more than that," Landrigan told CNN. "We now know that air pollution is a very important cause of heart disease and stroke and contributes to chronic lung disease, lung cancer and chronic kidney disease."

    July Fourth brings some of the year's worst air pollution, thanks to fireworks - Americans' fervor for Fourth of July fireworks has some unfortunate side effects. But there's also a more widespread hazard from the yearly outburst of pyrotechnics: It spikes air pollution so sharply it becomes dangerous for everyone to breathe.Independence Day and July 5 consistently have some of the worst air quality of the year. With so many fireworks going off at once, levels of fine-particle pollution—a stew of tiny, lung-damaging specks of toxic soot, smoke and ash known as PM2.5—surge several times higher than federal health standards across Southern California, air monitoring data show.Pollution levels jump sharply around 8 or 9 p.m. the evening of the Fourth of July, around when it gets dark, reaching their peak late in the night. The unhealthy pall hangs in the still, nighttime air and lingers through the following morning—a kind of hazy hangover from the night's revelry.In downtown Los Angeles last year, fine particle pollution jumped above 300 micrograms per cubic meter—more than eight times the daily average health standard of 35—and remained elevated through the following morning.The phenomenon isn't unique to L.A. A 2015 nationwide study by U.S. government scientists found that on average, concentrations of fine-particle pollution for the 24-hour period beginning at 8 p.m. on the Fourth of July are 42 percent higher than on other days.

    Air pollution leading cause of death among children in sub-Saharan Africa --According to a 2015 report by UNICEF, 500,000 children across sub-Saharan Africa died from pneumonia, and researchers found that air pollution was a leading contributor to pneumonia’s prevalence. An overwhelming majority of the deaths included children under the age of five.Several recent studies have expanded upon UNICEF’s findings, including one published last week in the science journal Nature, conducted by a team of researchers at Stanford University and the University of California San Diego, in which scientists found a “[r]obust relationship between air quality and infant mortality in Africa.”The study found that dirty air poses a deadly threat across the African continent, in both urban and rural areas alike. According to researchers, the scale of air pollution is not easily quantifiable due to the lack of air quality monitoring equipment in most regions and urban centers. Notwithstanding, what scientists have discovered is both alarming and extremely dire for public health.“Air pollution is actually a much more important cause of excess mortality in sub-Saharan Africa than previously thought,” said Jennifer Burney, a co-author of the study. OECD researchers found that across Africa, annual deaths brought by ambient particulate matter pollution increased by 36 percent between 1990 and 2013. According to the World Health Organization (WHO), for children in Africa who make it past age five, the effects of persistent air pollution can stunt brain development, trigger asthma and cause strokes and cancers later as adults.

    Michigan okays ‘polluter panels’ in blow to environmental efforts across the state - Environmental activists are slamming two controversial bills signed into law Friday by Michigan Gov. Rick Snyder (R), arguing that they will give polluting companies the ability to undermine state environmental guidelines. The two bills signed by Snyder will allow for oversight of the Michigan Department of Environmental Quality (MDEQ), which is meant to serve as a watchdog for environmental issues throughout the state. One law establishes an Environmental Rules Review Committee staffed by governor-appointed voting members representing various sectors including waste management, manufacturing, fossil fuel companies, and agriculture. The committee will oversee the DEQ’s process for establishing rules and presumably wield considerable control over how such efforts proceed.The second law creates the Environmental Permit Review Commission, which will advise on permits and other applications, to be housed within the DEQ. Both laws have been dubbed “polluter panels” bills based on the leeway they give to industries known for poor environmental practices. In a statement, Snyder argued the bills would bolster the DEQ’s ability to “make decisions impacting environmental quality” in addition to helping “transparency”.

    Science Propaganda, Poisonism and the Microbiome -- The NIH Human Microbiome Project ran until 2013:  “The initial phase of the project, HMP1, established in 2008, characterized the microbial communities from 300 healthy individuals, across several different sites on the human body.” How did they identify “healthy individuals” amid this generally toxic environment?  The answer is that while there’s still lots of superficially healthy people, there’s no way to ascertain a correspondingly healthy microbiome in the absence of a control group which has consumed a diet equivalent except for the poisons, and who has lived among an intact, non-toxified ecosystem. Of course there is no such control group, nor is it possible to envision what the control cuisine would be, since the mainstream American diet is inherently full of empty calories suffused with explicit poisons and many other dubious additives. And in a place as superficially diverse as America how does one define a “reference” diet in the first place?   The project really sought to define an alleged average microbiome amid a toxic environment, then claim that this average comprises a “core healthy microbiome”, to use their own term. That of course is a lie. But it’s typical of establishment science under the corporate science paradigm. Meanwhile the microbiome is being degraded. Industrial foods are neither prebiotic nor probiotic, tend to be sterile, tend to be low in fiber, and are loaded with poisons harmful to beneficial bacteria. Just to give one major example, herbicides like glyphosate, 2,4-D and dicamba are antibiotics which exterminate whole bacterial communities while selectively sparing pathogens such as salmonella and botulins. The industrial environment is loaded with poisons. Antibiotic residues in food and the environment are especially harmful to microbiotia.

      USDA Seeks Comment on Biotechnology Regulation Revisions → The U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) is considering amending its biotechnology regulations to address advances in biotechnology and various issues previously raised by stakeholders, and is seeking comment on a notice of intent to prepare an environmental impact statement.Public input is an important first step in this process, and APHIS is seeking comments on potential environmental impacts and issues that should be considered as the Agency drafts the programmatic environmental impact statement (pEIS). The goal of the pEIS will be to address potential changes to the Agency’s biotechnology regulations regarding the importation, interstate movement, and environmental release of certain genetically engineered (GE) organisms (7 CFR part 340).APHIS’ intent in revising its biotechnology regulations is to more effectively protect plant health by focusing on potential risks posed by certain GE organisms rather than the method used to produce the product. As required under the National Environmental Policy Act (NEPA), APHIS must evaluate the potential impacts to the environment that may result from its actions.  APHIS will thoroughly review and consider all public input submitted during the 30-day comment period on the notice of intent and use the information as it works to complete, and then publish, the draft pEIS and a draft proposed rule. The public and stakeholders will also have ample opportunity to review and comment on each of these proposed documents in support of APHIS’ goal of updating its biotechnology regulations.

    Match Made In Hell: Bayer-Monsanto Partnership Signals Death Knell for Humanity -- On what plane of reality is it possible that two of the world’s most morally bankrupt corporations, Bayer and Monsanto, can be permitted to join forces in what promises to be the next stage in the takeover of the world’s agricultural and medicinal supplies?  Warning, plot spoiler: There is no Mr. Hyde side in this horror story of epic proportions; it’s all Dr. Jekyll. Like a script from a David Lynch creeper, Bayer AG of poison gas fame has finalized its $66 billion (£50bn) purchase of Monsanto, the agrochemical corporation that should be pleading the Fifth in the dock on Guantanamo Bay instead of enjoying what amounts to corporate asylum and immunity from crimes against humanity. Such are the special privileges that come from being an above-the-law transnational corporation.Unsurprisingly, the first thing Bayer did after taking on Monsanto, saddled as it is with the extra baggage of ethic improprieties, was to initiate a rebrand campaign. Like a Hollywood villain falling into a crucible of molten steel only to turn up later in some altered state, Monsanto has been subsumed under the Orwellian-sounding ‘Bayer Crop Science’ division, whose motto is: "Science for a better life."Yet Bayer itself provides little protective cover for Monsanto considering its own patchy history of corporate malfeasance. Far beyond its widely known business of peddling pain relief for headaches, the German-based company played a  significant role in the introduction of poison gas on the battlefields of World War I.

    Neonicotinoid Pesticides Have Been Found in Wild Turkeys - Neonicotinoid pesticides have commonly been linked to the plight of honeybees.But a new study from the University of Guelph finds that honeybees aren't the only non-pest creatures that are coming into contact with the pesticides. Neonicotinoids, sometimes called neonics, are pesticides chemically similar to nicotine, hence their name. There are several different varieties, with the three most common being imidacloprid, thiamethoxam and clothianidin. They're exceedingly prevalent in the U.S. and were also used in Europe—at least before they were banned in the EU earlier this year.Neonicotinoids have been repeatedly linked to honeybee colony collapse disorder, and concern for the pollinators is generally stated as a major reason for bans and restrictions. But research on other animals has not been as extensive; a study in 2014 found a correlation between the increase in neonicotinoid use and a decrease in insect-eating birds, but, as we all learned in high school, correlation does not necessarily mean causation. This new study examined carcasses of wild turkeys in southern Ontario and found that nearly 25 percent of them had detectable levels of neonicotinoids in their livers. Wild turkeys are omnivores, eating basically anything they can catch or find, and it's fairly common for them to eat seeds. Neonicotinoids are generally sold as seeds treated with the brightly colored pesticide, and corn and soy coated seeds were found in some of the birds' digestive systems.

    Bees dying in America's honeybee hot spot - Bees are having a much harder time finding food in the region known as America’s last honeybee refuge, a new federal study found.The country’s hot spot for commercial beekeeping is the Northern Great Plains of the Dakotas and neighboring areas, where more than 1 million colonies spend their summer feasting on pollen and nectar from nearby wildflowers and other plants.But from 2006 to 2016, more than half the conservation land within a mile of bee colonies was converted into agriculture, usually row crops such as soybeans and corn, said the study’s lead author, Clint Otto of the US Geological Survey. Those crops hold no food for bees.For more than a decade, bees and other pollinators in America have been dwindling in numbers because of a variety of problems, including poor nutrition, pesticides, parasites and disease. And outside experts said this study highlights another problem that affects the health of bees.This area — which Otto called “America’s last honeybee refuge” — lost about 629 square miles of prime bee habitat, according to the study published Monday in the Proceedings of the National Academy of Sciences. And bees that have a hard time finding food are less likely to survive the winter, Otto said. They may not be hungry, he said, but they aren’t healthy, either.

    These tiny little bugs are a harbinger of wetland health — and they’re disappearing -  MPR - A crustacean that's a key food source in Minnesota's wetlands is in trouble — and scientists are intensely studying them in the western half of the state, in an effort to save them. Amphipods, half-inch long shrimplike crustaceans, have been in decline for more than 20 years, and scientists say only five percent of wetlands in Minnesota where they could live actually have a healthy population. Amphipods might be small, but they play a major part in the diets of salamanders, fish and migrating waterfowl. Jake Carleen, a technician with the Minnesota Department of Natural Resources, has been counting their populations in wetlands from Windom to Bemidji. "They are a super-important forage for bluebill [and] scaup, particularly when they come up in the spring. Just packed with protein," h And the health of Minnesota's amphipod population has an impact well beyond the state's borders: The region of the upper midwest and into Canada supports what's considered the duck factory of North America: Fifty to 70 percent of the continent's ducks are born and grow here each year. Carleen has sampled more than 100 wetlands this spring. He's part of a team of researchers in western Minnesota that, over the next couple years, will try to understand why these crucial bugs are disappearing — and how they might bring them back.  

    Global Frog Pandemic May Become Even Deadlier as Strains Combine -- A fungus that has decimated frog populations around the world could get even deadlier, according to new research. The study found that hybridization of different types of the fungus creates strains that can cause greater mortality in frogs. And it warns that deforestation could make this impact worse.The fungus is called Batrachochytrium dendrobatidis—Bd for short—and it causes a disease called chytridiomycosis that affects a frog's ability to absorb water and electrolytes through its skin. Scientists first started to take notice in the 1970s when frog populations in Central and South America started disappearing. By the 1990s Bd had spread around the world, likely aided by the laboratory trade in African clawed frogs and invasions of American bullfrogs. By 2007 it had been implicated in the decline or extinction of some 200 species. Today, biologists consider it one of the biggest threats to amphibians globally.  Some research has offered a bit of hope for frogs, with a study published earlier this year in Science finding populations may be able to develop resistance to Bd. But a new study published last week in Scientific Reports adds another hurdle for frogs, finding that hybridization between a native strain of Bd in Brazil and the one that's caused the global pandemic can lead to greater infection rates and illness strength than either can alone. Scientists believe the Brazilian strain of Bd (Bd-Brazil) evolved along with amphibian populations there and, because of this, is not as harmful to them as the Global Pandemic Lineage (Bd-GPL). But when the team compared infection and illness rates of the two types of Bd and a third hybridized one, they found that the latter had a significantly worse impact on two of the three frog species they examined. The researchers write that this effect may be due to a phenomenon called "hybrid vigor" (also referred to as "heterosis"), by which the sudden surge in genetic diversity caused by hybridization leads to a more dramatic expression of advantageous physical traits.

    Hawaii to Approve Landmark Ban on Coral-Damaging Sunscreens -- Hawaii Gov. David Ige is expected to sign a bill this week prohibiting the sale of sunscreen that contains chemicals considered harmful to ocean ecosystems, including coral reefs.The Aloha State is the first in the nation to enact such a law.The measure, introduced by Democratic State Sen. Mike Gabbard, bans in Hawaii the sale and distribution of all sunscreen containing oxybenzone or octinoxate, or both, without a prescription from a licensed healthcare provider.Extensive coral bleaching is occurring in Hawaii's most popular snorkeling spot, Hanauma Bay. While studieshave identified climate change as one of the drivers of the bleaching, scientists also blame the estimated 412 pounds of sunscreen that leaches into the tourist-heavy bay per day.  Even a drop of oxybenzone in 4.3 million gallons of water, or six and a half Olympic sized swimming pools worth, is enough to harm corals, the New York Times reported.

    GOP Senator Seeks Major Overhaul of Endangered Species Act - Sen. John Barrasso, Republican of Wyoming, released draft legislation Monday to significantly overhaul the Endangered Species Act (ESA).Under Barrasso's proposal, individual states would be given key authority over the federal program to conserve threatened and endangered species."When it comes to the Endangered Species Act, the status quo is not good enough," the Environment and Public Works Committee Chairman said in a press release. "We must do more than just keep listed species on life support—we need to see them recovered. This draft legislation will increase state and local input and improve transparency in the listing process."The Endangered Species Act, passed by Congress four decades ago, is the nation's safety net for fish, plants and wildlife on the brink of extinction. More than 99 percent of species that have been designated for federal protection continue to exist in the wild today, including the bald eagle, grizzly bear, the leatherback sea turtle and the Florida manatee. Many Republicans have long sought to weaken the landmark conservation law, as it can block energy production or other developments on critical habitat for endangered species. The current GOP-controlled 115th Congress has introduced dozens of bills that would strip federal protections for specific threatened species or undermine the ESA, according an analysis from the Center for Biological Diversity. That's one such bill every six days in 2017 alone.  Earthjustice anticipated Barrasso's legislative proposal more than a year ago. The environmental law nonprofit said that Barrasso has received substantial campaign contributions from extractive industries that wish to mine or drill land that overlaps with wildlife habitat. Citing campaign finance records, from 2011 until 2016, Barrasso received $458,466 in total campaign contributions from the oil and gas industry, plus$241,706 from the mining industry.

    Satellite tech offers near real-time view of deforestation   (Reuters) - In 2015, satellite images detected a fresh clearing of rainforest in an indigenous reserve deep in the Amazon. Within months, authorities in Peru had evicted the wildcat miners driving the deforestation, a rare victory in a region where a gold rush has laid waste to large swaths of pristine forest. The rapid response was possible thanks to better use of satellite technology that now allows deforestation to be tracked in near real-time, giving governments "unprecedented" opportunities to take action, said Matt Finer, the lead author of a paper on the trend in the latest issue of Science. Instead of years passing before learning about a new deforestation hotspot, authorities can track it in weeks or months, said Finer. "Most tropical countries now cannot say, 'well we didn't have the information, or we didn't have the information on time'," said Finer, a research specialist at the organization Amazon Conservation, which spotted the 2015 clearing in Peru's Amarakaeri Communal Reserve. Satellites have gradually been capturing more frequent images of the world's tropical forests with greater detail. In recent years, researchers at the University of Maryland developed an automated early-warning system to notify authorities of likely forest loss, said Finer. Algorithms can further filter the data by pointing to particularly troublesome patterns, such as the loss of green forest cover inside protected reserves or lines suggesting new roads have been cut through primary rainforest, said Finer. 

    What’s Worse Than Palm Oil for the Environment? Other Vegetable Oils, IUCN Study Finds -- Banning palm oil in favor of other vegetable oils deemed less destructive to the environment could lead to greater biodiversity losses, a new report says. The report by the International Union for the Conservation of Nature (IUCN) comes amid mounting debate about the use of palm oil, with the European Union seeking to phase out the use of the ubiquitous commodity in biofuels by 2030, citing environmental and human rights violations in the production of the commodity.But existing vegetable oils that could theoretically replace palm oil would be far more damaging to the environment because they would need more land, according to the IUCN report "Palm Oil and Biodiversity."The production of palm oil is characterized by its high yield relative to other vegetable oils, meaning more of it can be produced from a given area of farmland than other oil crops. The latter require up to nine times more land than oil palms to produce the same amount of oil.Palm oil is currently produced from just 10 percent of all farmland dedicated to growing oil crops, yet accounts for 35 percent of the global volume of all vegetable oils.  "Half of the world's population uses palm oil in food, and if we ban or boycott it, other, more land-hungry oils will likely take its place," IUCN director general Inger Andersen said in a press release.

    India must ditch rice to feed growing population, scientists warn - India must shift from growing mainly rice and wheat to other crops that are healthier and better for the environment, according to new research. Current estimates suggest the nation will have to feed nearly 400 million more people by 2050 – a significant undertaking given that it already struggles with widespread malnutrition and lack of water. The study conducted by an international team of scientists aims to address two key targets of the Indian government – to improve the nation’s nutrition and promote sustainable water use. Currently, almost a third of India’s population are anaemic, and huge swathes of the country are severely lacking in waster due to heavy extraction for agricultural irrigation and less rain from recent monsoons. Indian diets are largely based on cereal crops, but the scientists suggest that the currently favoured varieties are contributing to the country’s problems.  The research team looked at six grains currently grown in India: rice, wheat, maize, sorghum, and pearl and finger millet. Their results, published in the journal Science Advances, revealed that rice is the least water efficient cereal in India, and wheat was playing a significant role in driving water loss due to its high irrigation demands. In addition, they looked at the nutrient value of crops for components like calories, protein, iron and zinc. Their results suggested that replacing the current standard crops with maize, finger millet, pearl millet or sorghum would improve iron production by over a quarter and zinc by around a tenth.

    Catastrophic drought threatens Iraq as major dams in surrounding countries cut off water to its great rivers - The rivers of Iraq, above all the Tigris and Euphrates, are drying up. The country is becoming more arid, and desertification is eating into the limited amount of agricultural land. Dams built upriver in Turkey, Syria and Iran since the 1970s have reduced the flow of water that reaches Iraq by as much as half and the situation is about to get worse. “On 1 July, Turkey will start filling the Ilisu dam on the Tigris and this will cause another decline in the inflows to our country of about 50 per cent,” Hassan Janabi, minister of water resources, told The Independent. He says that Iraq used to get 30 billion cubic metres of water a year from the Euphrates, but now “we are happy if we get 16 billion cubic metres”. As Iraq begins to recover from 40 years of wars and emergences, its existence is being threatened by the rapidly falling water levels in the two great rivers on which its people depend. It was on their banks that the first cities were established cities 8,000 years ago and where the flood stories of Gilgamesh and the Bible were first told. Such floods are now a thing of the past – the last was in 1988 – and each year the amount of water taken by Iraq’s neighbours has been rising. This pattern started in the 1970s when Turkey and Syria built dams on the Euphrates for hydroelectric power and vast irrigation works. It is the latter which choke off the water supply to Iraq. The same thing happened a little later to the Tigris, whose major tributaries are being dammed by Iran. Iraqi protests have been ineffectual because Saddam Hussein and successor government in Baghdad were preoccupied by wars and crises that appeared more important at the time.  By now it is getting too late to reverse the disastrous impact on Iraq of this massive loss of water.  Some smaller rivers like the Karun and Kark that used to flow out of Iran into Iraq, have simply disappeared after the Iranians diverted them. He says: “We used to get five billion cubic metres annually from the Karkhah, and now we get zero.”   Iraq was once self-sufficient in food, but now imports 70 per cent of its needs. Locally grown watermelons and tomatoes are for sale beside the road or in the markets, but most of what Iraqis eat comes from Iran or Turkey or is purchased by the government on the world market.

    Cloud Theft: Top Iranian General Accuses Israel Of "Stealing Its Rain" - Earlier this week, the Head of Iran’s Civil Defense Organization blamed Iran’s drought on “cloud and snow theft,” allegedly engineered by Israel. In a series of comments at the Third National Conference on Non-Proactive Defense in Agriculture on civil defense tactics in agriculture, held in Tehran on Monday, Brigadier General Gholam Reza Jalali condemned Israel for its severe drought, insisting that the country has fallen victim to the ‘Jewish State stealing its rain.’ He said Iranian academic institutions had confirmed that foreign entities played a significant role in manipulating weather patterns over the country. A scientific study conducted in the country “confirms” the validity behind Jalali’s accusation — mostly directed at Israel, said Iranian Students’ News Agency. “Foreign interference is suspected to have played a role in climate change,” Jalali emphasized. “Israel and another country in the region have joint teams which work to ensure clouds entering Iranian skies are unable to release rain,” a translated report from the Tasnim News Agency quoted Jalali as saying.Jalali went in depth to describe the scientific evidence supporting his claims. He said a recent study carried out over the past four years regarding the climate of high altitudes from Afghanistan to the Mediterranean Sea indicated that all elevations above 2,200 meters (7,217 feet) in these regions, except in Iran, have a dense layer of snow.Twitter users erupted with laughter in both countries this week, after Jalali’s statements on Monday. Here are some of the tweets: […]   As a reminder, weather warfare or the use of weather modifications for purposes of causing damage or destruction was prohibited by world governments on May 1977 in Geneva and entered into force on October 1978 via the Environmental Modification Convention (ENMOD). While the technology for weather manipulation has been around for decades, it is anyone’s guess to the validity of Iran’s claims that Israel is stealing its water through weather modification techniques. However, it is important to know that the technology does exist and both countries want to nuke each other.

    India's 'worst water crisis in history' leaves millions thirsty - India is "suffering from the worst water crisis in its history", threatening hundreds of millions of lives and jeopardising economic growth, a government think-tank report said in June. From the northern Himalayas to the sandy, palm-fringed beaches in the south, 600 million people - nearly half India's population - face acute water shortage, with close to 200,000 dying each year from polluted water. Residents like Devi queue daily with pipes, jerry cans and buckets in hand for water from tankers - a common lifeline for those without a safe, reliable municipal supply - often involving elbowing, pushing and punching. On the rare occasions water does flow from taps, it is often dirty, leading to disease, infection, disability and even death, experts say. "The water was like poison," said Devi, who still relies on the tanker for drinking water, outside her one-room shanty in the chronically water-stressed Wazirpur area of the capital Delhi. "It is better now, but still it is not completely drinkable. It is alright for bathing and washing the dishes." Water pollution is a major challenge, the report said, with nearly 70 percent of India's water contaminated, impacting three in four Indians and contributing to 20 percent of the country's disease burden. Yet only one-third of its wastewater is currently treated, meaning raw sewage flows into rivers, lakes and ponds - and eventually gets into the groundwater. "Our surface water is contaminated, our groundwater is contaminated. See, everywhere water is being contaminated because we are not managing our solid waste properly," said the report's author Avinash Mishra. 

    Why many women in India refuse water during a heatwave - BBC - The sun is at its peak, the heat in the high 40s Celsius. In an urban slum in India's capital Delhi, Mona [not her real name] deliberately avoids drinking water. She is fearful it will make her need to urinate. "Sometimes, I drink less water because the spot we use to go to the toilet in the open is filled with notorious boys. I am afraid to go there." The 13-year-old girl also restricts her food intake and goes to the 'spot' just once a day to relieve herself. She goes with a group of other women, either early in the morning or late in the evening. Around 524 million Indians defecate in the open every day according to the UN figures. And for women there is an added layer of vulnerability - sexual assault. Several studies have suggested that women without toilets at home risk sexual violence when travelling to and from public facilities or open fields. Savita, who lives in an urban slum in Delhi, recounts the horror they are forced to encounter every single day. "A number of women face lewd remarks, harassment, and stares from local boys when they go out in the open to defecate. "That's why we are afraid to go there. Each time, we have to gather other women and request them to accompany us to the jungle," she reveals. 

    Red-hot planet: All-time heat records have been set all over the world during the past week -- From the normally mild summer climes of Ireland, Scotland and Canada to the scorching Middle East, numerous locations in the Northern Hemisphere have witnessed their hottest weather ever recorded over the past week.Large areas of heat pressure or heat domes scattered around the hemisphere led to the sweltering temperatures. Let’s take a tour around the world of the recent hot-weather milestones.  A massive and intense heat dome has consumed the eastern two-thirds of the United States and southeast Canada since late last week. It’s not only been hot but also exceptionally humid. Here are some of the notable all-time records set:

    Extreme Heat Event in Northern Siberia and the coastal Arctic Ocean This Week -  An extreme heat event for this particular region…with high temperatures of greater than 40 degrees F above recent normals…will impact the coast of the Arctic Ocean (specifically the Laptev Sea and Eastern Siberian Sea) Wednesday-Friday. This will generate maximum daily temperatures as high as 90-95 degrees near the open ocean coast! Yes,  you read that correctly. (see temperature maps Needless to say, a true roasting for this area.  I’ve looked over the European model and there appears to be general agreement over the intensity and timing of this extreme event. It is absolutely incredible and really one of the most intense heat events I’ve ever seen for so far north. Climate change has sent temps skyrocketing in the far north of the planet over just the past 20 years. While that’s been quite reflected in the rapid rise in wintertime temperatures, it’s increasingly being reflected in summertime temperatures as more and more sea ice disappears earlier in the season, leaving more dark blue ocean to absorb more daytime sunlight. This heating of the ocean surface by low albedo (very low reflectivity…little sunlight being reflected back off into space) causes some heat to be released back to heat the atmosphere above, speeding up warming of the Arctic region. This is known as Arctic Amplification. And one larger-scale hemispheric consequence being actively researched by Dr. Jennifer Francis (YouTube Video Presentation) and on others is that Arctic Amplification is causing an abrupt weakening of the polar jet stream (on timescales of just the past decade or two), the main feature which steers and intensifies weather patterns in the mid-latitudes. The weakening is causing the polar jet to become much wavier, with greater wave “breaks” and blocking patterns where waves sit in the same place for weeks promote extreme weather patterns (extreme cold relative to normal as well as extreme heat, very wet, and drought conditions).

    Heat wave kills 19 in Canada -- A heatwave in Quebec has killed at least 19 people in the past week as high summer temperatures scorched eastern Canada, health officials said Wednesday. Twelve of the dead were reported in the eastern province's capital Montreal, said regional public health director Mylene Drouin. The Tribune newspaper said five of the deaths occurred in the past 48 hours in the Eastern Townships, a rural area just east of the city. And late Wednesday two more deaths blamed on the heat were recorded in a Montreal suburb, Radio Canada reported. "My thoughts are with the loved ones of those who have died in Quebec during this heat wave," Prime Minister Justin Trudeau said on Twitter. "The record temperatures are expected to continue in central and eastern Canada, so make sure you know how to protect yourself and your family," Trudeau said. Drouin said the victims were part of "the very vulnerable population, the elderly or people suffering from chronic or mental illnesses." Temperatures soared to 34 degrees Celsius (93 Fahrenheit) with a humidity that made it feel closer to 40 degrees, the meteorological service said. The mercury has regularly topped 30 degrees since Friday in southern Quebec, accompanied by stifling humidity levels. A government heat warning is in place for the region, but meteorologists are forecasting a drop in temperatures at the end of the week. 

    Canada heatwave: more than 30 deaths reported as extreme weather continues - A heatwave rolling through central and eastern Canada has caused the deaths of more than 30 people, with officials warning that the extreme weather conditions are expected to continue for at least another day.The sweltering combination of heat and humidity, which began on Friday, has been linked by health officials to the deaths of 33 people across southern Quebec.Most of the victims lived alone, had health issues and did not have access to air conditioning, David Kaiser, a physician at Montreal’s public health department, told Reuters.  The furnace-like conditions are expected to continue on Thursday, with Environment Canada issuing warnings for southern Quebec, along with parts of Ontario, Nova Scotia and New Brunswick.  Montreal reached a high of 34C (93F) degrees on Wednesday, with a humidity index near 40 (104F). On Thursday temperatures are expected to rise slightly to 35C degrees while humidity values will reach between 40 and 45 in the region – a level at which people are warned to avoid exertion.

    Detroit water shutoffs to resume in midst of punishing heat wave -The city of Detroit is set to resume water shutoffs after a one week pause over the July 4 holiday in the midst of a brutal heat wave affecting the entire region.Two thousand households in Detroit have had their water service disconnected in the last six weeks, since the Detroit Water and Sewer Department (DWSD) officials announced they were resuming the brutal shutoff policy following the regular winter hiatus.Lack of access to fresh water poses an urgent health threat under conditions where Detroit and large areas of the US and Canada are experiencing a summer heat wave. For low-income residents without air-conditioning, running water is crucial to hydrate and cool off.Regular National Weather Service heat advisories have appeared in Detroit and nationally warning that high temperatures pose an acute danger to children, the elderly and health-compromised individuals. Along with a large swathe of the US, Detroit has experienced days of heat indexes in the 100 degree Fahrenheit (38 Celsius) range. On Monday of this week, Detroit Water and Sewer Department (DWSD) officials announced a one-week pause in shutoffs for the July 4 holiday week. DWSD head Gary Brown claimed that the halt demonstrated that authorities were being “compassionate” for Detroit residents suffering from the heat. However, other reports indicated that the pause was not called because of the heat, but was due to the July 4 holiday falling on a Wednesday. In any event, there is nothing “compassionate” about the city shutoff policy, which is based on satisfying the relentless demands of wealthy holders of water bonds.

    Dangerous U.S. Pollution Event From Heat Wave, African Dust, and Fires  --An unusually concentrated plume of African dust invaded the U.S. over the weekend, bringing dangerously high levels of fine particulate pollution (PM2.5, particles less than 2.5 microns or 0.0001 inch in diameter). The dust from the Saharan Air Layer (SAL) arrived in Texas on Thursday, and spread northwards and northeastward into the Tennessee Valley over the weekend. The high levels of African dust in combination with human-generated pollution brought the highest PM2.5 levels of the year to 24 of the 37 monitoring locations in Texas over the weekend. Two of six monitoring stations in the Dallas/Ft. Worth area violated the 24-hour PM2.5 standard of 35 μg/m3 over the weekend, as did  one of five stations in the San Antonio region and both stations in the Tyler-Longview-Marshall area. These violations were for an AQI in the “Unhealthy For Sensitive Groups” (orange) range. The dust also led to a rare PM2.5 violation in Arkansas on Sunday, at the El Dorado monitor. According to statistics from the American Lung Association, Arkansas did not experience any PM2.5 violations between 2014 – 2016. (Note that it's referred to as a "violation" when PM2.5 levels exceed the EPA guidelines even if the cause is partially natural, such as from Saharan dust).A PM2.5 episode as widespread and severe as this is a threat to cause hundreds of premature deaths. According to a 2018 study done by the Health Effects Institute (a U.S. non-profit corporation funded by the EPA and the auto industry), PM2.5 pollution in the U.S. caused approximately 87,000 premature deaths per year between 2010 and 2016. Air pollution deaths are calculated using epidemiological studies, which correlate death rates with air pollution levels. Air pollution has been proven to increase the incidence of death due to stroke, heart attack and lung disease. Since these causes of death are also due to other factors—such as lifestyle and family history—we typically refer to air pollution deaths as premature deaths. A premature air pollution-related death typically occurs about twelve years earlier than it otherwise might have, according to Caiazzo et al., 2013.

    High heat to send temperatures past 100 degrees across Los Angeles, southwestern US following July 4th - Hotter weather will surge across the southwestern United States late this week and into this weekend, even reaching parts of coastal California. "The same high pressure area that brought record-challenging heat to the eastern two-thirds of the nation from late June through the Fourth of July will gradually re-position itself over the Southwest by week’s end and into the upcoming weekend," said AccuWeather Meteorologist Kyle Elliott.Temperatures at the peak of the heat will run 10 to 20 degrees Fahrenheit above normal. This results in temperatures at or above 100 F in Los Angeles and near 90 F in San Diego. A few desert locations could reach 120 F on one or both days. High temperatures will challenge records from Los Angeles to San Diego as well as in Las Vegas and Phoenix. Those hoping for relief from the heat at the California beaches will also contend with the hot weather."Even at the beaches, the lack of a morning marine layer, commonly referred to as 'June gloom,' will allow temperatures to range from the 80s to near or just above 90 on one or both days," Elliott said."The way the atmosphere is set up, there can be potent Sundowner winds in this pattern," according to AccuWeather Senior Meteorologist Ken Clark.These winds tend to flow from north to south from Santa Barbara County to Los Angeles County in the mountains and through the north-south passes. The winds ramp up in the evening and last into the nighttime hours as the air cools over the higher elevations and descends to lower elevations, hence the name Sundowner winds. As the air descends, it heats up dramatically. "It is very unusual to have this setup during July, especially to this magnitude," Clark said. "There is an enhanced risk for wildfire ignition and rapid spread considering the projected strength of the winds and heightened outdoor activity into this weekend."

    29 Wildfires Blaze Across the West, Fueled by Drought and Wind - Twenty-nine uncontained wildfires are blazing in the Western U.S. right now, raising concerns that 2018's fire season could rival 2017's record-breaking season for devastation, The New York Times reported Monday.The fast-moving County Fire in Northern California, which started Saturday and has burnt more than 60,000 acres of land as of late Monday, has belched smoke into the skies over San Francisco, Napa, Sonoma and San Mateo counties, National Public Radio (NPR) reported.It has created dramatic images, as Bay Area residents woke up to smoke and ash over the weekend."The sky is very dark, even in the middle of the day. It's a little scary," a Sausalito Shell station employee Sergio Garcia told the Associated Press, according to NPR.For residents of California's wine country, it is also bringing back memories of the fires that ravaged the area last fall."  A lot of friends and family were texting today and saying they were having some PTSD," Savannah Kirtlink told the Associated Press, according to NPR.  So far the County Fire has forced 300 people from their homes and threatened 700 buildings, ABC News reported. It is only three percent contained and growing, according to NPR, fueled by dry weather and southwesterly wind. "We didn't really get a lot of rain this year, so the fields dried out quickly," Captain Mark Bailey told The New York Times. "A big fire like this in early July is the new normal for California." The County Fire isn't the only one raging in California. The nearby Pawnee Fire, which began a week before, is still burning, though CalFire told NPR it is 75 percent contained.

    Wildfire in Yolo County grows to 32,500 acres, forcing evacuations - On Saturday night, the County fire in the Yolo County countryside roared to life as firefighters ordered evacuations and battled to get a toehold on the 32,500-acre blaze in the face of hot, gusty winds. In California these days, the start — and end — of wildfire season is anyone’s guess. Not long ago fire officials eyed the autumn months as the time large blazes were most likely to ignite, after hot summer months had left brush and woods primed to burn. AdvertisementBut this year, as in recent years, the fires have come early. And they aren’t likely to end any time soon. Already this summer, several hundred firefighters have battled the Pawnee fire in Lake County that started June 23 and, so far, has burned more than 14,000 acres and destroyed 22 structures. On Saturday night, the County fire in the Yolo County countryside roared to life as firefighters ordered evacuations and battled to get a toehold on the 32,500-acre blaze in the face of hot, gusty winds. By Sunday night, the fire was 2% contained. “Fire season doesn’t seem like the right term to use anymore. The new normal for us is nearly a year-round fire season,” said Chris Anthony, a Cal-Fire division chief who was part of the team battling the County fire Sunday. “Twenty-two thousand acres in less than 24 hours at the end of June is not a good sign of things that might come.” The County fire began Saturday afternoon and, by dusk, had spread to a few thousand acres in and around Guinda, a rural community about 50 miles northwest of Sacramento. Fire officials, however, warned that red flag conditions — a perilous mix of low humidity, strong winds and high temperatures — could fuel the fire overnight. By dawn it was clear they had been right to worry. The fire had more than quadrupled in size and by noon had surpassed 20,000 acres, according to Cal-Fire, the agency that coordinates responses to wildfires across the state. 

    Wildfire in Yolo County California spreads to 60,000 acres; only 5% containment -- On Saturday night, the County fire in the Yolo County countryside roared to life as firefighters ordered evacuations and battled to get a toehold on the 32,500-acre blaze in the face of hot, gusty winds.  When Marian Flanders and her husband saw thick plumes of smoke from their kitchen window in Yolo County, they divvied up a list of tasks they needed to get done in case they had to escape.  That much, they agreed on. A more agonizing choice came Sunday afternoon, when the evacuation zone was expanded to include their Esparto home. She wanted to leave; he wanted to stay behind to save his house and a lifetime of possessions. It was a drama familiar to many Californians, who in recent years have faced a relentless, year-round fire season. Fire officials said this week that red flag conditions — a perilous mix of low humidity, strong winds and high temperatures — could continue to fuel the County fire burning near Flanders’ neighborhood. Flanders broke down in tears and begged. By then, smoke hung in the air like dark orange soup, almost impossible to see through. It looked like the kind of smoke, she said, that could kill you.   “Fire of this magnitude is not fightable. It’s not defensible by one person and a couple of hoses.”  Eventually, Flanders persuaded Romero to leave. Others in their neighborhood, however, decided to stay. In the day that followed, the wildfire roughly doubled in size, as did the number of firefighters taking it on. By Monday evening, the County fire had ripped through 60,000 acres and 2,115 fire personnel were fighting it. The blaze was 5% contained. On Monday night, an evacuation advisory was expanded to include Berryessa Highlands, Markley Cove Resort and Pleasure Cove Resort. Authorities said residents should be prepared to evacuate in case fire conditions worsen.

    More than 2,000 firefighters battle wind-driven wildfire in northern California  (Reuters) - A wildfire in Northern California remained unchecked on Tuesday as firefighters battled the blaze that threatened hundreds of homes and other structures, sending thick black smoke across the San Francisco Bay Area. The County Fire, which broke out on Saturday afternoon in rural Yolo County, west of Sacramento, blackened more than 60,000 acres of grass, brush and dense scrub oak. It was only 5 percent contained late on Monday. The fire threatened about 700 homes, a local NBC affiliate reported, as authorities issued evacuation orders and advisories to hundreds of residents. Scott McLean of the California Department of Forestry and Fire protection said on Monday the job of hand crews and bulldozer operators trying to cut containment lines was made more difficult by high winds, which were blowing embers and starting new spot fires.“The potential for growth remains high as crews battle the fire in difficult terrain,” Cal Fire said in an advisory, noting that more than 2,000 firefighters were tackling the blaze.The smoke reached about 75 miles south to San Francisco, leaving films of ash on cars and windows. No casualties have been reported.

    Strong Gusts Fuel Fierce Northern California Wildfire (Reuters) - Wind gusts of up to 25 miles (40 km) per hour may hamper firefighters battling a wildfire in Northern California on Wednesday, the National Weather Service said. Efforts to contain the fire, which broke out on Saturday afternoon in rural Yolo County, west of Sacramento, have been complicated by rough terrain. Hundreds of residents have evacuated. The County Fire has blackened more than 72,500 acres (29,340 hectares) of grass, brush and dense scrub oak, the California Fire authority said late on Tuesday. The United States is in the midst of an unusually active fire season, with the risk significantly above normal for many western states, according to federal forecasters. The County Fire was 15 percent contained with more than 2,600 fire personnel battling the flames, the California Fire authority said. “Their efforts have been hampered on the northern end of the fire by steep, inaccessible terrain,” the agency said in an advisory. Temperatures will be in the mid 80s Fahrenheit, the National Weather Service said. The blaze threatened about 980 structures, a local NBC affiliate reported, as authorities issued evacuation orders and advisories to hundreds of residents.In Colorado, firefighters face hot temperatures, low humidity and gusty winds on Wednesday as they battle eight major blazes which have torched over 140,000 acres in the drought-stricken state.

    Western wildfires grow larger - Large wildfires grew across the American West on Wednesday, keeping thousands of people out of their homes for the July 4 holiday and forcing some strict bans on fireworks to prevent new fires from igniting in the hot, dry region. The National Interagency Fire Center on Wednesday reported more than 60 large, active blazes across the country, most in the drought-stricken West where holiday festivities could lead to increased fire danger.The third-largest fire in recorded Colorado history kept expanding, chewing through 147 square miles near Fort Garland, about 205 miles southwest of Denver.The Spring Fire has destroyed more than 100 homes, and more than 2,000 have been evacuated. Officials said preventing the flames from spreading toward the small mountain town of Cuchara is a priority. Nearly 1,000 firefighters were working to gain control of the fire in unpredictable winds, but it was only slightly contained since sparking June 27.  Some fireworks displays were scheduled to go on in Denver and other large cities, but several mountain communities called off their holiday festivities to avoid any risk of flames.   Parts of Colorado and other Western states have been grappling with severe drought that’s made wildfires explosive so far this season.Utah authorities ordered more residents to evacuate as a blaze grew to about 62 square miles near a popular fishing reservoir amid high wind gusts, steep terrain and dry conditions.  It wasn’t clear how many more people were told to flee, but several hundred homes and cabins have been evacuated and the orders were extended to a 20-mile area dotted with trees and cabins.

     PG&E Plans To Cut Electricity To Some California Residents To Prevent Wildfires - In a move straight out of the Soviet Union handbook, PG&E has warned they may cut electrical power to some California residents during “extreme weather” to help prevent wildfires.  This comes after some poorly maintained Pacific Gas and Electric power lines have been determined to have started last year’s deadly wildfires in the Napa Valley wine country area.Cal Fire investigators said Friday that equipment owned and operated by PG&E ignited 12 wildfires that raged in hot, dry weather and high winds across Northern California in October, charring hundreds of square miles in Sonoma County and beyond, destroying thousands of structures and killing 18 people. (source) According to Cal Fire, the 8 of the 12 fires occurred due to lack of maintenance in violation of state regulations.The utility was in violation of state code on eight of those fires, failing to clear brush around its lines and properly maintain its power equipment, according to state fire investigators.Cal Fire found violations in the Norrbom, Partrick, Pythian, Adobe and Pocket fires that burned in Sonoma and Napa counties; the Atlas fire in Napa County; the Sulphur fire in Lake County; and the Blue fire in Humboldt County. (source)Doesn’t it sound like a good idea for PG&E to improve the maintenance of their equipment and lines? But instead, they have a different response. Instead of improving their maintenance, PG&E has made the arbitrary decision to cut electricity to areas they have identified as risky, leaving residents to fend for themselves without power during the most brutally hot days of the year. Here’s a map of the areas that PG&E considers to be “high risk.”

    Puerto Rico’s deadly record blackout is almost over --The second-largest blackout on record worldwide is finally just about over. More than nine months after Hurricane Maria struck, the Puerto Rico Electric Power Authority is reporting that it has restored power to 99.9 percent of its customers:That still leaves 1,942 customers without electricity, mainly in the island’s remote, mountainous center. But every municipality is now receiving power, which is progress. It’s been a long, painful, and bumpy road for recovery workers to reach this point. After Hurricane Maria knocked down 80 percent of Puerto Rico’s transmission lines, restoration efforts were marred by mistakes, poor planning, and potential criminal acts.Along the way, the 3.3 million Americans in Puerto Rico suffered intermittent power, including an island-wide blackout in April. The outage following Hurricane Maria is the worst in US history and the second-largest in the world. (The only event with a greater impact on electricity service was Typhoon Haiyan in 2013, one of the biggest tropical storms to ever make landfall and the deadliest one to hit the Philippines.)  The lack of reliable electricity in Puerto Rico also proved exceptionally deadly as vital medical equipment couldn’t be used, drugs like insulin couldn’t be refrigerated, and air conditioners shut off as the island faced a heat wave. Infections from diseases like leptospirosis spread as sanitation systems went offline. The government says it is waiting for results from a study by researchers at George Washington University before it updates the official death toll of 64. But Harvard researchers estimated in June in the New England Journal of Medicine that more than 4,600 people likely died as a result of the storm.

    Hawaii Kilauea Volcano Update: USGS Map, Summit Collapses Continue, Lava Flowing From Fissure 8 -- People on the Big Island of Hawaii have been dealing with the eruptions and collapse events from the Kilauea volcano for almost two months now. Activity at the summit of the volcano continues with collapse events, and lava is still flowing from the island's Fissure 8.Friday morning in Hawaii, there was a collapse explosion that sent a plume of volcanic material into the sky and drifting southwest of the summit according to the United States Geological Survey. But the levels of sulfur dioxide, the gas that Kilauea releases, were actually down from where they had been when the volcano first started erupting.The next morning, there was another collapse event. That event occurred after about 15 hours of elevated seismic activity around the summit. It resulted in a steam plume that went about 500 feet in the air, similar to the previous explosion. After the explosive events, the seismicity in the area dropped significantly by about two-thirds. Prior to the events, there were about 30 to 35 earthquakes an hour resulting from the volcanic activity, after the collapse events that dropped to 10 or less for a short period before the activity increased again, according to the USGS. Fissure 8 is still erupting lava and flowing into a channel. The channel does occasionally experience small and temporary overflows, according to the USGS. The spatter cone of the fissure was reaching about 155 feet tall as of Saturday morning. The lava that was coming from the fissure was flowing down to the ocean, where it had filled the entire Kapoho Bay and moved onto the Kapoho Beach Lots, said the USGS.

    Lava flows from Bali volcano after new eruption – ABC - The Mount Agung volcano on the Indonesian tourist island of Bali has erupted, ejecting a 2,000-meter-high (6,560-foot-high) column of thick ash and lava down its slopes.The geological agency's Agung monitoring post said the eruption began just after 9 p.m. Monday and lasted more than 7 minutes. Lava has reached 2 kilometers (1 mile) from the crater.It said the alert level for Agung has not been raised and the exclusion zone around the crater remains at 4 kilometers (2.5 miles).Last week, Bali's international airport closed for half a day due to volcanic ash from Agung, disrupting travel for tens of thousands.

    Two More Government Agencies Axed Climate Change Mentions From Reports and Websites -- When the White House website removed all most all references to climate change within minutes of PresidentDonald Trump's inauguration, it set the tone for the administration's environmental policy and led to concerns about how accurately government agencies would be allowed to report climate science during his term.Those concerns resurfaced Monday when reports emerged that two different government agencies had removed "climate change" from documents and websites, Pacific Standard reported.The Treasury Department removed mentions of climate change and a section on "climate change resilience" from a draft of a 2017 sustainability report obtained by E&E news.And the Center for Disease Control (CDC) removed references to climate change from its National Institute for Occupational Safety and Health (NIOSH) website, going so far as to change the name of one web page from "Climate Change and Occupational Safety and Health" to "Occupational Safety and Health and Climate," The Washington Post reported. The Treasury Department draft was obtained by E&E News under the Freedom of Information Act. Reporters compared it to the 2016 sustainability report released by the department under the Obama administration and found that it was nearly identical, except when it came to climate change.

    'Watershed Moment for Climate Liability' as Rhode Island Files Historic Lawsuit Against 21 Big Oil Companies -- In what advocates are calling a "watershed moment" for climate litigation, Rhode Island's Democratic Attorney General Peter F. Kilmartin announced on Monday that the state has filed a lawsuit against 21 major oil companies—including BP, Chevron, ExxonMobil and Shell—"for knowingly contributing to climate change, and causing catastrophic consequences to Rhode Island, our economy, our communities, our residents, our ecosystems.""This lawsuit marks the first in the country filed on behalf of a state and its citizens against Big Oil," Kilmartin declared. "For a very long time there has been this perception that they, Big Oil, were too big to take on, but here we are—the smallest state, the Ocean State—taking on the biggest, most powerful corporate polluters in the world, because it's the right thing to do. They need to be held accountable." The suit is supported by Rhode Island Gov. Gina Raimondo, Reps. Jim Langevin and David Cicilline and Sen. Sheldon Whitehouse—all Democrats. Whitehouse, a congressional leader on climate action, commended Kilmartin for "holding some of the world's most powerful corporations responsible for the damage they're inflicting on our coastal economy, infrastructure, and way of life."

    Court: Trump administration exceeded authority by delaying emissions penalties | TheHill: Federal appeals judges said Friday that the Trump administration "exceeded its statuary authority" when it moved to indefinitely delay fines for car companies who broke an Obama-era fuel efficiency rule. A judge for the U.S. 2nd Circuit Court of Appeals wrote that the decision by the National Highway Traffic Safety Administration (NHTSA) to delay the rule in July 2017 was "incompatible" with the law."The purpose of the Act is simply incompatible with the notion of indefinite delay, given that the primary objective was to correct for decades of inaction," the court wrote in its opinion. The New York City–based court ruled in April that the Department of Transportation's (DOT) argument that they had jurisdiction to indefinitely delay the rule while working to repeal the regulation was not legal. The three-judge panel of the court said it would issue a fully explained opinion “in due course." That opinion was released Friday. The judges in their opinion disagreed with the NHTSA's multiple claims that the DOT had the authority to suspend the penalties, writing: "None of these arguments persuades us." "NHTSA offers no authority—statutory or otherwise—for the proposition that an agency has authority to delay a rule because it is engaged in a separate process of reconsideration," the judges wrote. "As the D.C. Circuit 9 recently held, a decision to reconsider a rule does not simultaneously convey authority to indefinitely delay the existing rule pending that reconsideration." 

    Electric car buyers claim they were misled by Nissan - Owners of Nissan's new electric Leaf say they were given misleading information about the car before buying it. They say charging the Leaf can take three times longer than claimed on Nissan's website. Others are unhappy that the range on a single charge is not as good as the 235 miles (378km) they were promised. Nissan admitted that charging times can vary, but denied there was a problem or that any customers were misled. The Advertising Standards Authority is now considering whether to launch an investigation into the issue. 

    Pruitt Seeks Biofuels Increase - The Trump administration is proposing to modestly increase the amount of ethanol and other biofuels that the nation's oil refiners have to blend into the gasoline and diesel they sell.Under the proposal released Tuesday by the Environmental Protection Agency (EPA), the overall biofuel mandate under the Renewable Fuel Standard (RFS) would be 19.88 billion gallons in 2019, a 3.1 percent increase over the 2018 levels.Only 15 billion gallons of that could be traditional ethanol made from feedstocks like corn and soy, while the rest would have to be other biofuels like cellulosic ethanol and biodiesel.The proposal comes amid efforts by President Trump to balance strong ethanol interests in the country's heartland and oil and refinery interests, both of whom are lobbying aggressively for changes to how the EPA enforces biofuels rules.EPA head Scott Pruitt focused in his Tuesday statement on the fact that he is on track to get the 2019 mandate final by Nov. 1, the legal deadline, which the Obama administration often missed."I've traveled to numerous states and heard first-hand about the importance of the RFS to farmers and local communities across the country," Pruitt said in a statement."Issuing the proposed rule on time meets Congress's statutory deadlines, which the previous administration failed to do, and provides regulatory certainty to all impacted stakeholders."

    Top EPA ethics official discloses that he has urged additional investigations into Scott Pruitt -- The Environmental Protection Agency’s chief ethics officer, who initially had approved a $50-a-night condo rental and other decisions by administrator Scott Pruitt, disclosed this week that he has urged the agency’s inspector general to investigate various allegations that Pruitt misused his government position. Kevin Minoli, who focuses on ensuring that EPA employees abide by federal laws governing conduct, told the Office of Government Ethics in a letter dated Wednesday that he had recommended the new inquiries after “additional potential issues regarding Mr. Pruitt have come to my attention through sources within the EPA and media reports.” The letter, first reported Saturday by the New York Times and obtained independently by The Washington Post, does not spell out the precise actions that triggered Minoli’s concern. But a government official with direct knowledge of the inquiries, who spoke on the condition of anonymity because details have not been released publicly, said the referrals involved instances in which Pruitt potentially misused his position, such as having subordinates help with his housing search, inquire about a mattress or secure tickets to the Rose Bowl. Federal standards of conduct bar public officials from accepting free services or gifts from their subordinates, and from using their position for their own financial benefit. The referrals also included a $2,000 payment, first reported by The Post nearly a month ago, that Pruitt’s wife received last year to help with logistics at an annual conference for the New York nonprofit group Concordia, the official said. Pruitt also spoke at the conference and had introduced his wife to the group’s chief executive as part of a broader push to find her employment. “To the best of my knowledge, all of the matters that I have referred are either under consideration for acceptance or under active investigation,” Minoli wrote, adding that he had “provided ‘ready and active assistance’ to the Inspector General and his office.” 

    Scott Pruitt steps down as EPA head after ethics, management scandals - Scott Pruitt, the former Oklahoma attorney general who relentlessly pursued President Trump’s promises of deregulation at the Environmental Protection Agency, resigned Thursday after controversies over his lavish spending, ethical lapses and management decisions eroded the president’s confidence in one of his most ardent Cabinet members. Pruitt’s reputation as a dogged deregulator and outspoken booster of the president allowed him to weather ethics scandals in recent months, including questions about taxpayer-funded first-class travel, a discounted condominium rental from the wife of a D.C. lobbyist and the installation of a $43,000 soundproof phone booth in his office. But revelations about his behavior continued to mount, including reports that he repeatedly enlisted subordinates to help him search for housing, book personal travel and help search for a six-figure job for his wife. That quest included setting up a call with Chick-fil-A executives in which he discussed his wife’s becoming a franchisee, as well as outreach to a conservative judicial group that eventually hired Marlyn Pruitt.  In recent weeks, an exodus of trusted staffers left Pruitt increasingly isolated, and some Republican lawmakers wearied of defending him. Investigators on Capitol Hill had summoned current and former EPA aides for questioning as part of more than a dozen federal inquiries into Pruitt’s spending and management of the agency. On Thursday, the White House informed Pruitt, who was not in the office, that he had to submit his resignation, according to two individuals who spoke on the condition of anonymity because of the sensitivity of the matter. President Trump did not speak to the administrator directly, according to a third individual, but instead called Pruitt’s top deputy, Andrew Wheeler, to inform him that he would be taking the helm of the agency. Soon after, Trump announced in a two-part tweet that he had accepted Pruitt’s resignation. “Within the Agency Scott has done an outstanding job, and I will always be thankful to him for this,” Trump wrote.

    EPA leader Scott Pruitt resigns after scandals engulf his agency -- Scott Pruitt's polarizing tenure as head of the Environmental Protection Agency has come to an end. President Donald Trump tweeted on Thursday that he has accepted Pruitt's resignation. Trump said that the agency's deputy administrator and former coal industry lobbyist, Andrew Wheeler, will become the acting head of EPA. The departure follows months of scrutiny that gathered momentum following reports that Pruitt had rented a Capitol Hill condominium linked to an energy lobbyist on favorable terms. The revelation exacerbated concerns about the high cost of Pruitt's travel and security detail and triggered a flood of allegations that Pruitt fostered a culture of workplace retaliation, wasteful spending and self-dealing at EPA. The steady flow of negative news stories prompted multiple government investigators to open several inquiries into Pruitt. His EPA now faces about a dozen probes into its spending, ethics and policy decisions. "It is extremely difficult for me to cease serving you in this role first because I count it as a blessing to be serving you in any capacity, but also because of the transformative work that is occurring," Pruitt said in his resignation letter posted by Fox News. "However, the unrelenting attacks on me personally, my family, are unprecedented and have taken a sizable toll on all of us."While Pruitt was a key figure in Trump's campaign to roll back environmental regulations, he increasingly became seen as a liability in an administration that has seen two cabinet members fired over ethical lapses and several more accused of wasting taxpayer dollars. The EPA administrator also reportedly alienated colleagues by positioning himself to take over as U.S. attorney general if the frequently embattled head of the Justice Department, Jeff Sessions, stepped down or was fired. Rather, it was Pruitt who became the latest deputy to exit a cabinet known for its revolving door.

    'Victory for People and the Planet' as EPA Chief Scott Pruitt Resigns -  The White House announced Thursday that U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt has resigned, following months of mounting scandals regarding his misuse of taxpayer funds for his lavish travel expenses, the extreme secrecy with which he ran the agency, his treatment of his staff, and other ethics controversies. While Pruitt's management style and ethics-free behavior frequently threatened to distract from his activities as the nation's top official ostensibly in charge of safeguarding the environment, climate action groups and other green campaigners have repeatedly pointed to his aggressive efforts to undermine the EPA's stated mission while spearheading the Trump administration's overall effort to execute a massive giveaway to the fossil fuel industry and other corporate interests.Friends of the Earth (FOE) called Pruitt's departure a "victory for people and the planet.""Scott Pruitt's corruption and coziness with industry lobbyists finally caught up with him," said FOE president Erich Pica. "We're happy that Pruitt can no longer deceive Americans or destroy our environment. This victory belongs to the hundreds of thousands of activists who fought to protect the Environmental Protection Agency from a corrupt crony set on destroying it from the inside...We must work to remove every member of this administration who has abused their power and put polluter profits over people and the planet." "Ethics matter," concluded Rhea Suh, president of the National Resources Defense Council (NRDC). "So does a commitment to the EPA's central mission. Pruitt failed miserably on both counts."

    Pruitt’s Replacement Andrew Wheeler Will Be ‘Much Smarter’ Threat, Environmentalists Fear - When President Donald Trump announced the resignation of scandal-plagued EPA Administrator Scott Pruitt via tweet on Thursday, he also introduced his successor, current Deputy Administrator Andrew Wheeler, who was approved by the Senate in April."I have no doubt that Andy will continue on with our great and lasting EPA agenda. We have made tremendous progress and the future of the EPA is very bright!" Trump tweeted.Unfortunately, Wheeler's staunch dedication to Trump's deregulatory environmental agenda is expected by both the president and green groups.Wheeler is a former government staffer and coal lobbyist with decades of DC experience, which critics and allies agree could aid him in implementing Trump's agenda without the distractions posed by Pruitt'ssoundproof phone booth or unorthodox rental arrangements, POLITICO reported.  "Wheeler is much smarter and will try to keep his efforts under the radar in implementing Trump's destructive agenda," Vice President for Political Affairs at the Environmental Defense Fund Jeremy Symons told POLITICO. "That should scare anyone who breathes."Wheeler began his DC career at the EPA as a special assistant in the pollution prevention and toxics office, according to his EPA bio. He has now been in DC for more than 20 years, and followed up his EPA post by working for infamous climate change denier and Republican Oklahoma Senator James Inhofe, The New York Times reported. Inhofe once even threw a snowball on the Senate floor to assert that global warming wasn't happening, according to Vox. Wheeler is one of several former Inhofe staffers, known as the "Inhofe mafia," who have risen to prominent environment or energy positions in the Trump administration or work with influential lobbying firms, according to The New York Times. After leaving government work, Wheeler worked at a law firm that lobbied for the coal industry, NBC reported. His firm's biggest client was Murray Energy Corp., whose CEO, Robert E. Murray, donated $300,000 to Trump's inauguration fund and provided Trump with a wishlist of environmental policies he wanted changed to benefit coal plants, The New York Times reported.

    Pruitt Resigns as EPA Chief: So What? --  Jerri-lynn Scofield - Environmental Protection Agency (EPA) administrator Scott Pruitt resigned yesterday, after a “torrent of negative stories”– largely focusing on ethical concerns– that proved too much even for Trump, as reported by Politico, in How Scott Pruitt blew it.(For a more complete rundown of such stories, see Columbia Journalism Review account, The never-ending Pruitt beat reaches ‘a tipping point’.)Andrew Wheeler, attorney and former coal industry lobbyist at the law firm of Faegre Baker Daniels, who has been serving as Pruitt’s deputy, will be acting head of the agency until Trump nominates– and the Senate confirms– Pruitt’s replacement. At the risk of seeming flippant, I ask: So what?  Will this personnel change derail the Trump EPA deregulatory agenda? Readers might recall that prior to assuming his EPA position, Pruitt had a long record of mounting legal challenges to federal environmental policies, in his previous role as attorney general for the state of Oklahoma. Once installed at the EPA, Pruitt announced many rollbacks of previous agency policies. But just as with his master Trump, Pruitt’s bark to bite ratio was very high, as reported in April by Politico in The Myth of Scott Pruitt’s EPA Rollback: EPA Administrator Scott Pruitt’s spiraling ethics scandals and perilous job status were big news this week, but he also made headlines with his latest assault on President Barack Obama’s environmental legacy. “Pruitt Announces Rollback of Obama-Era Auto Fuel Efficiency Rule,” ABC News reported. “EPA’s Pruitt Kills Obama’s Auto Rules,” the Washington Examiner put it. The New York Times analyzed how the furor over Pruitt’s behavior has overshadowed his triumphs over regulation: “For Scott Pruitt, a Spotlight Shines on His Ethics, Not His EPA Rollbacks.”   But Pruitt did not kill or roll back Obama’s strict fuel-efficiency standards; he merely announced his intention to launch a process that could eventually weaken them. In fact, Pruitt has not yet killed or rolled back any significant regulations that were in place when President Donald Trump took office.

    Canada's Ontario government scraps cap-and-trade program (Reuters) - The newly elected Ontario government announced on Tuesday it would end the province’s cap-and-trade program, a policy designed to reduce greenhouse gas emissions, fulfilling one of Premier Doug Ford’s election promises. However, it leaves businesses that bought C$2.8 billion ($2.1 billion) worth of allowances in limbo. Ford’s Progressive Conservative government swept to power last month, ending 15 years of Liberal rule in Ontario, Canada’s most populous province and the country’s economic engine, with a promise to cut corporate and personal taxes. The government said it would immediately start an orderly wind-down of all programs funded out of cap-and-trade carbon tax revenues but agreed to honour certain contracts that have already been signed. “Cap-and-trade and carbon tax schemes are no more than government cash grabs that do nothing for the environment, while hitting people in the wallet in order to fund big government programs,” Ford said in a statement. The government says it aims to reduce gasoline prices by 10 cents per litre and lower energy bills, scrapping the plan that forced large companies to buy allowances for their carbon emissions. Citing the auditor general, the government said the program could cost Ontario consumers and businesses C$8 billion, with a minimal impact on the province’s carbon emissions. Michael Berends, managing director at Toronto-based cap-and-trade advisers ClearBlue Markets, said the pace of the government’s move leaves many unanswered questions. “All those entities that have purchased allowances, as they thought they were going to be required, are now wondering what’s the value of allowances and whether they will need them or not,” Berends said. Berends believes the Ontario government’s decision is also going to impact companies that are planning on using their allowances for their obligations towards Quebec and California before the Nov. 1 deadline. Earlier this year, the U.S. state of California and two Canadian provinces - Ontario and Quebec - kicked off a cross-border auction of greenhouse gas emission credits to buy and sell in the cap and trade market in an effort to fight global warming. 

    The dirty little secret behind 'clean energy' wood pellets -  It is touted as a smart way for Europe to reach its renewable energy goals. But try telling Lisa Sanchez thousands of miles away in America that burning wood chips is a form of clean energy. The bucolic charm of her rural home in the Piney Woods forest region of east Texas is undercut by the big German Pellets manufacturing plant just beyond the bottom of her garden. The German-owned plant is capable of producing 578,000 tons of wood pellets a year, which are destined to cross the Atlantic to satisfy a vibrant market for the product there., “I started having a lot of respiratory problems, I was getting sick all the time.” From being in excellent health, she added, “I have emergency inhalers, I was on all kinds of things. I have asthma now.” Opening her windows and doors to let in the breeze was an unwise move, she said: the air felt more sooty than fresh. Burning forest biomass – essentially, wood – has been promoted by industry as a cleaner, more renewable energy alternative to coal and gas. American companies such as Enviva have developed a growing export industry for trees diced into wood pellets, with export volumes increasing from almost nothing in the early 2000s to 4.6m tons of pellets in 2015 – almost all of which goes to Europe to displace coal in power plants there. The wood pellets industry claims that it uses tree branches and waste wood, but environmental groups say there is strong evidence that vast swaths of valuable, untouched forest have been felled in states including North Carolina and Florida to feed the growing sector.

    PDF: Key World Energy Statistics 2017 - The International Energy Agency (IEA) was established in 1974 to promote energy security and provide authoritative analysis on energy for its member countries and beyond. Energy statistics have always been and remain at the heart of the work of the IEA. They provide a comprehensive view on energy production, transformation and final use, the factors that influence energy choices such as prices and RD&D and the wider impact of energy use on CO2 emissions. Over the years with input from energy statisticians all around the world, the IEA has gained recognition as the world’s most authoritative source for energy statistics. Energy statistics are produced to be used: to monitor changes in energy production and use; inform debate; and provide a wider understanding of energy. In Key World Energy Statistics (KWES), we look to highlight some of the key facts and trends from across the vast number of datasets the IEA produces to enable everyone to know more about energy. As part of the IEA modernisation programme, this year’s edition of KWES has been updated. It contains more information on energy efficiency and renewables, more geographic data – including on the “IEA Family”, created through our “Open Doors” policy – and also more of the fundamental data required to fully understand energy security – the heart of our work. Because energy plays such a vital role in our lives today, I hope that these statistics will not only inform but also help policy makers and others to make wise decisions so that energy is produced and consumed in a secure, affordable, efficient and sustainable manner.

    Tesla strikes another mammoth energy storage deal in California - Late last week, California utility Pacific Gas and Electric (PG&E) asked the state to approve four lithium-ion battery storage projects. Three of which would be owned and operated by a third party, and one, built by Tesla, would be owned and operated by PG&E itself. One of the projects—spearheaded by energy company Vistra (which recently merged with Dynegy)—could become the world's first grid-scale, lithium-ion battery installations to store more than a gigawatt-hour of energy. Tesla's project is also huge. It would deliver 730MWh of energy, but Tesla's contract with PG&E suggests the utility could opt to increase the size of the battery to 1.1GWh. The Tesla installation is expected to discharge 182.5MW for 4 hours (hence, the 730MWh number). But the contract could be bumped up to a discharge duration of 6 hours, which would result in just under 1.1 GWh of storage owned by PG&E. For comparison, last year Tesla completed the largest lithium-ion battery installation in the world in South Australia. That battery system clocked in at 100MW/129MWh of storage. Storage of this size allows the utility to add more renewable energy because if wind speeds drop or cloud cover hurts solar, a battery can kick in to meet the rest of that load. 

    Petroleum, natural gas, and coal still dominate U.S. energy consumption - Fossil fuels—petroleum, natural gas, and coal—have accounted for at least 80% of energy consumption in the United States for well over a century. The fossil fuel share of total U.S. energy consumption in 2017 was the lowest share since 1902, at a little more than 80%, as U.S. fossil fuel consumption decreased for the third consecutive year. The decline in fossil fuel consumption in 2017 was driven by slight decreases in coal and natural gas consumption. Coal consumption fell by 2.5% in 2017, following larger annual declines of 13.6% and 8.5% in 2015 and 2016, respectively. U.S. consumption of coal peaked in 2005 and declined nearly 40% since then. Natural gas consumption fell by 1.4% in 2017, a change from recent trends. Unlike coal consumption, which has decreased in 8 of the past 10 years, natural gas consumption has increased in 8 of the past 10 years, and in 2017, was twice that of coal. Natural gas consumption growth has been driven by increased use in the electric power sector. Overall, U.S. consumption of natural gas increased by 24% from 2005 to 2017.Petroleum consumption increased in 2017, but remains 10% lower than its peak consumption level, also set in 2005. Mainly used in the transportation sector, several petroleum-based fuels are also used in homes, businesses, and industries. Petroleum has been the largest source of energy consumption in the United States since surpassing coal in 1950.  The renewable share of energy consumption in 2017, which includes hydroelectricity, biomass, and other renewables such as wind and solar, was 11.3%, the highest since the late 1910s, when overall energy consumption was lower and biomass consumption—mainly wood—made up a larger share. The largest growth in renewables over the past decade has been in solar and wind electricity generation.

    Coal waste plant in fight in struggle to stay open  (AP) — A coal waste plant at risk of shutting down in West Virginia is hoping to stay open through state proceedings.The Charleston Gazette-Mail reports the Grant Town Power Plant's owner, American Bituminous Power Partners, has teetered on the verge of bankruptcy, according to company filings.In May, the state Public Service Commission denied the company's proposal to increase its electric energy purchase agreement with FirstEnergy company Mon Power from $34.25 per megawatt hour to $40 per megawatt hour, which would have bumped up customer rates, so it could have a better chance at staying open.But the PSC kept the company's EEPA rate the same to allow American Bituminous an opportunity to continue operating while renegotiating its business structure. Environmental activists have appealed, saying the PSC's order contained "legal errors."

    S Carolina, federal officials to revisit coal tar in river (AP) — A private utility should reconsider its decision to leave century-old coal tar at the bottom of a South Carolina river because its statements about the cleanup were misleading, state and federal officials said.  In a letter last month to South Carolina Electric & Gas, the Army Corps of Engineers said it never concluded that the tar couldn't be scraped off the bottom of the Congaree River, according to a letter also signed by the state Department of Health and Environmental Control. SCE&G suggested covering the coal tar with a fabric held on the river bottom with stones instead after saying the Corps wouldn't issue a permit to allow the company to dam the river near downtown Columbia so the coal tar could be scraped off the bottom.  Environmental officials want to meet with SCE&G and the Corps to discuss plans to deal with the tar again, according to documents obtained by The State newspaper and the Congaree Riverkeeper conservation group, which has threatened to sue if the fabric plan moves forward. The coal tar was deposited in the river in the early 1900s by a plant that used coal to make gas for cooking.

    Is the decline of coal a national security problem? - As the Trump administration seeks to resuscitate the moribund American coal industry, it has decided to invoke "national security" as the justification for a plan to subsidize coal-fired power plants.Three things are notable about the administration's proposal. First, invoking "national security" has become a favored tool for getting around existing regulations, precedents and the Constitution. It's also handy for labeling one's opponents as unpatriotic in order to avoid a genuine discussion of the true purpose of a proposed action. Second, the coal industry used to be the one attacking renewable energy sources as too expensive to stand on their own without subsidies. As the cost of renewable energy has continued to plummet, the tables are now turning.  Third, the move has united an unlikely coalition in opposition that includes the oil and gas industry, anti-nuclear activists (since nuclear power plants are included in the subsidy plan), environmentalists and the Federal Energy Regulatory Commission which is dominated by Trump appointees. It takes amazingly bad policy to get an alliance like this together.   In asking whether the U.S. energy supply has become a national security problem, the administration takes on thorny definitional issues. What does the seemingly endlessly elastic term "national security" mean? The term has been used to justify U.S. military intervention in places ranging in size from Grenada to Iraq. It has been used as a justification for wholesale spying on every American with an internet connection or a cellphone. It has essentially become a Swiss Army knife for anything the government wants to do that isn't quite legal or constitutional or that is at the very least contrary to obvious logic and precedents.  Subsidizing coal- and nuclear-generated electricity will hardly enhance U.S. security. Our central energy vulnerability is continuing substantial oil imports that make the country subject to political and military disruptions far away. And the overall threat to the United States and the world is dependence on all forms of the finite energy supply represented by fossil fuels which still supply 80 percent of society's energy.

    Trump plan to save coal-related jobs, power plants will up pollution death toll: study – The Trump administration’s plan to keep money-losing power plants open would save coal mining jobs but at the same time unleash more pollution that would cost lives, according to a new analysis.  For every 4.5 coal mining jobs supported by the drafted policy, one American would die from the surge in air pollution tied to generating electricity from the fossil fuel, according to modeling by the independent, nonprofit research group Resources for the Future. The assessment is one of the first broad looks at the potential environmental consequences of the Trump administration’s evolving plan to prop up coal and nuclear power plants that are at risk of closing amid competition from cheap natural gas and renewable electricity. President Donald Trump ordered his energy secretary to take immediate action to stem power plant closures on June 1, and administration officials have been considering a drafted plan to require power purchases from designated at-risk facilities to keep them in operation over the next two years. Even under “conservative assumptions,” the approach “would cause an estimated 353 to 815 additional premature deaths in the United States from power plant sulfur dioxide and nitrogen oxide emissions,” said the analysis, led by Daniel Shawhan, a visiting fellow with Resources for the Future. Nitrogen oxide and sulfur dioxide pollution is linked with respiratory infections, asthma and impaired lung function. Federal requirements for pollution controls at coal-fired power plants have been justified partly by the avoidance of premature deaths.

    How FERC's 'unprecedented' PJM order could unravel capacity markets -- The Federal Energy Regulatory Commission last week ordered changes to PJM’s capacity market rules that regulatory veterans say will reshape the grid operator’s relationship with its state participants and could lead to the unraveling of the capacity market construct altogether. "This is unprecedented federal intervention in state policy," said Rob Gramlich, an energy consultant and former advisor to former FERC Chair Pat Wood III. "We've never seen this kind of federal intrusion in the energy industries."Friday, FERC rejected two proposals from grid operator PJM to compensate for state energy subsidies in its capacity market, which PJM says are depressing prices for other generators. Neither option — a two-part capacity market or an expanded price floor — would sufficiently mitigate the impact of policies like nuclear subsidies and renewable energy mandates, regulators wrote in a 3-2 decision.  Rejection of the two closely watched proposals would have sent PJM back to the drawing board, but the FERC majority went further, outlining a detailed plan to change the grid operator's capacity market construct to remove some level of subsidized resources altogether. That plan is a novel recasting of the Fixed Resource Requirement (FRR), a rule in PJM that allows utilities to opt out of the capacity market if they can serve power demand with their own generation resources. Under FERC's proposed Alternative FRR, specific resources like a wind farm or a nuclear plant could also opt out, removing them and their subsidies from the market.

    Watch: Greenpeace Crashes 'Superman Drone' Into Nuclear Power Plant To Expose Facility's Dangers - "Is it a bird? Is it a plane? No... it's a drone dressed up as Superman, exposing how vulnerable French nuclear power plants are."   Greenpeace France on Tuesday crashed a drone dressed as Superman into the Bugey nuclear energy plant, located about 20 miles east of Lyon, to expose how vulnerable that facility is to a terrorist attack and highlight the broader dangers of this type of power generation. The activists told AFP that the drone struck "a storage pool for spent nuclear fuel next to a reactor, one of the most radioactive areas at the site."  "This is a highly symbolic action: it shows that spent fuel pools are very accessible, this time from the air, and therefore extremely vulnerable to attack," Yannick Rousselet, head of Greenpeace France's anti-nuclear campaign, said in a statement. Watch: Greenpeace France spokesman Cyril Cornier told Le Parisien, in French, that the action itself did not pose any danger to the plant, its workers, or the public, but insisted that by crashing the flying device into the plant's "most fragile point," they had proven beyond any doubt that the security of the facility "is absolutely not assured." Responding to the action, the French electricity group EDF said that police had intercepted one of two drones piloted by Greenpeace and announced plans to file a formal complaint with authorities. EDF also claimed, "The fuel building is key for security, designed in particular to withstand natural or accidental damage." Greenpeace EU, on Twitter, called EDF's response "worrying." Worrying response from @EDFofficiel to @greenpeacefr's action at the Bugey nuclear plant: they said they "intercepted 1 of the 2 drones".

    US Conducts Successful Field Test Of New Nuclear Bomb - The US Air Force completed two more tests of the B61-12 gravity nuclear bomb by dropping a dud (or "non-nuclear test assembly") from a B-2 Spirit stealth bomber at the Tonopah Test Range in Nevada on June 9, as part of the multi-billion dollar project to extend the service life of the bomb, introduced in 1968, by another 20 years. “The Department of Energy’s National Nuclear Security Administration (DOE/NNSA) and the US Air Force completed two non-nuclear system qualification flight tests of the B61-12 gravity bomb on June 9 at Tonopah Test Range in Nevada,” the Department of Energy announced in a statement. “These tests are the first such end-to-end qualification tests on a B-2A Spirit Bomber for the B61-12.” The tests involved releasing a B61-12 non-nuclear test assembly, which includes the NNSA designed bomb assembly and U.S. Air Force acquired tail-kit, from a B-2A Spirit Bomber operated by the 419th Test & Evaluation Squadron at Edwards Air Force Base in California. These tests are the first such end-to-end qualification tests on a B-2A Spirit Bomber for the B61-12. Over the past five decades, the US has used different versions of the B-61 nuclear gravity bomb, which is a core part of the US nuclear triad and has been deployed across the US and NATO bases for five decades. While, over the years, the Pentagon produced numerous modifications to the deadly weapon, B61 variants of 3, 4, 7, and 11 remain in service. The bomb tests are a part of the Pentagon's $7.6 billion 'B61-12 Life Extension Program', which aims to “refurbish, reuse, or replace all of the bomb’s nuclear and non‐nuclear components” and extend the service life of the B61 by at least 20 years. The “first production unit” is scheduled for completion in 2020.

    Radium found in commercial roadway de-icing, dust suppression brine – -An Ohio environmental organization is suing to learn more about unhealthy radiation levels in a commercial de-icing and dust suppression liquid made from gas well brine sold in several states, including Pennsylvania.  The Buckeye Environmental Network filed suit against the Ohio Department of Natural Resources last week, claiming the agency has illegally denied its request to inspect public records and documents pertaining to the environmental and health impacts of the brine product AquaSalina, manufactured by Brecksville, Ohio-based Nature’s Own Source. According to a July 2017 ODNR report that was released early this year after the network filed a right-to-know request, the department found samples of AquaSalina that contained concentrations of radium, a known carcinogen, that are higher than those naturally occurring in brine produced from “conventional,” that is non-shale, gas wells.  The ODNR’s Division of Oil and Gas Resources Management, Radiation Safety Section, tested 14 samples of AquaSalina collected from six locations in Ohio, and found radium 226 and 228 levels that exceeded the state’s “discharge to the environment limits” and its safe drinking water limits by a factor of 300.  The study said the production process used by Nature’s Own Source seems to have produced “TENORM,” or Technologically Enhanced Naturally Occurring Radioactive Material, that contains more radiation than the brine had when it was pushed out of the wells. The Buckeye Environmental Network wants to inspect state records to determine where the product has been sold and used, and if follow up testing has been done as recommended by the initial study, said Teresa Mills, BEN’s executive director. “What is the agency trying to hide from the public?” Ms. Mills said. “We requested to review all records held by the agency in order to determine how and if the agency plans to take steps to remove this product from the consumer market … [W]e believe that the public has a right to know how much radiation they have been or may be exposed to if they use this product.”

    Unjust, Anti-Environmental Fracking Law Should Be Repealed - Lakewood Observer --Andrew A. Meyer -- I’m a longtime resident of the West side. . However, I own ancestral land in Southeastern Ohio. For years, my family has been hounded and bullied by the fracking industry. We would tell them that we will never sell or lease our land, and they would continue to pester us. Moreover, they bully us by telling us that once they get enough people who are willing to lease their land, they can “force pool” our land by utilizing O.R.C. 1509.27 to take our mineral rights without our consent. In return for having our land violated, they will pay us an amount less than what other people receive because of the “trouble” they would have to go through in order to violate our land. Therefore, they can pressure land owners to sign now, or else they will just be paid even less later, when they don’t have a choice.This law is all that is wrong with state and national politics. It checks the boxes of bad government: A. It is antienvironment B. It manages to simultaneously infringe on people’s property rights C. It creates a perverse incentive to minimize the value received of land owners and maximize the profit of fracking companies and D. It is clearly created and maintained by the stranglehold the oil and gas lobby have in state government.This land is a priceless part of my family heritage, and I would never consent to leasing it for any reason. In addition, I’m an ardent environmentalist, and would never be a willing part of a process harmful to our environment. I will NEVER sign any agreement with the fracking companies to exploit my land, for both of those reasons.  I have looked into waging a legal fight to prevent my land from being taken from me, but the oil and gas lobby has done a good job of seeing the law written and maintained. That means once they intimidate a critical mass of neighboring land owners into leasing them their land, my land can be force pooled, and they will have rights to it without my consent.

    Dangerous fracking waste bills considered - House Bill 578 would establish 300- foot setbacks for new injection wells and require that municipal corporations or townships where waste is disposed to be paid 37.5 percent of the out-of-district injection well fee directly. Co-sponsors include Democratic Reps. Michael J. O’Brien, Glenn Holmes, John Patterson and Craig Riedel.  However, we must insist that the last thing we need to do right now is attempt to monetize fracking’s waste impact on Ohioans, our water, our children and ecosystems. By giving townships a share of the revenue this bill would only incentivize communities to encourage more waste to come into their existing inventory of Class II Salt Water Disposal (SWD) Injection wells, creating yet another race to the bottom. It looks like HB 578 supporters are concerned about the massive quantities of radioactive fracking waste coming across the Pennsylvania border and Ohio River. It is high time we pressure Pennsylvania and West Virginia to start processing their own waste and hold accountable the hydraulic fracturing industry for their increasing demand of resource (i.e., water, land-use and chemicals). Rep. Holmes said publicly that “communities need that money to mitigate the direct hazards or potential hazards that injection wells pose.” Yet, HB 578 would offer “crumbs” to these townships relative to the quantified ä and more importantly unquantifiable – environmental and health costs. If this bill passes, it is a fact that we would see more brine trucks, driving faster, spilling or turning over more often than we do now. We already are way behind in quantifying how often these trucks spill or are involved in accidents with injuries. Furthermore, the fact that much of this waste is radioactive but mandatory characterization of radiation levels is not required should be incentivizing us to move in the opposite direction of HB 578ás intended goals. With all due respect HB 578 and related bills like HB 393 and SB 165 are three of the worst ideas we have seen in our time looking at the fracking industry, and that analysis has included other states where fracking waste is a major factor including Oklahoma, Nebraska and Kansas. Much of the “induced seismicity” in these states has been a result of Class II injection well pressure and volume regimes that the underlying geologies can’t handle and aging Class II well inventory were never designed to accept.

    FERC wants Rover Pipeline to complete restoration work -- The Rover natural gas pipeline across northern Ohio has until July 9 to file a plan with the Federal Energy Regulatory Commission for completing restoration efforts along the 713-mile pipeline route, Kallanish Energy reports.The federal agency filed its notice to complete required restoration activities in a two-page letter last Thursday.Failure to comply with restoration deadlines could impact requests by the company to begin service on the pipeline, FERC said.The company must submit a detailed plan on why it will be unable to meet current deadlines on restoration work on its Market Segment of the line. It must also explain how and when it can complete the necessary work.FERC wants the company to explain the delay in restoration work to affected landowners.The notice was filed because FERC does not believe Rover Pipeline, an Energy Transfer Partners subsidiary, will be able to meet June 30 deadlines that had been approved, FERC said.That includes “final grading, reseeding, resolution of all remaining items on the punch list, such as minor restoration to stream banks, soll erosion and repair of erosion- control devices where revegetation has not yet been achieved, and the restoration of subsidence by reshaping the existing soil and/or bringing in soil of the same or better quality,” it said.  The company noted it would likely take until at least July 30 to finalize restoration along its Market Segment of the line, FERC said.

     Building pipeline support, one chicken, lamb and goat at a time --  Last July, Allen Fore made a name for Kinder Morgan at the Harrison County Fair in the tiny Ohio town of Cadiz, a rural community atop the burgeoning Marcellus shale fields that span the Appalachian Mountains. The Houston pipeline company’s vice president of public affairs, attending the annual livestock auction, bid $4,700 on champion ducks, chickens and rabbits to support the schoolchildren who raised them. It was part of the company’s years-long effort to generate support for its $540 million Utopia pipeline by holding dozens of community meetings and otherwise courting favor along a 215-mile path between Cadiz and the Michigan border. The charm offensive is part of the new reality for the nation’s largest pipeline companies, no longer able to simply push through projects as rising concerns about climate change, pollution and damage to natural resources prompt unprecedented scrutiny and opposition from environmentalists, landowners and political leaders. In the wake of several high-profile controversies that have collectively cost them billions of dollars, Kinder Morgan and other industry giants are amplifying efforts to foster public support and prevent legal challenges that could force costly delays or worse — project abandonment.  “It’s really a different ballgame,” Fore said. “You cannot take anything for granted.”

    Oklahoma City-based Ascent Resources announces agreements to expand its Utica Shale field operation - A company that grew out of American Energy Partners plans to expand its footprint in Ohio's Utica Shale field. Ascent Resources, based in Oklahoma City, has announced it has entered into agreements to spend about $1.5 billion to acquire natural gas and oil lease and mineral rights holdings in the field from Hess Corp., CNX Resources, Utica Minerals Development, and a fourth undisclosed seller. Officials said the acquisitions will add about 113,400 net leasehold acres and royalty interests on about 69,400 fee mineral acres, noting that those additions span all three hydrocarbon windows in the over-pressured core of the field. The acquisitions also will add 93 operated wells that have a daily net production of about 216 million cubic feet equivalent, about 19 percent of which is liquids, to Ascent Resources' holdings. Plus, the deals would bring it 380 incremental horizontal well locations and an increased working interest in more than 900 horizontal well locations. Officials said the acquisition properties have proved reserves of about 1.1 trillion cubic feet equivalent and total resources of about 5.6 trillion cubic feet equivalent. Once the deals close (that's expected in the third quarter of 2018), officials said Ascent will hold proved reserves and total resources of approximately 5.9 and 16.2 trillion cube feet equivalent, respectively, with a daily net production of about 1.5 billion cubic feet equivalent. Ascent Resources also will hold about 310,000 net leasehold acres and royalty interests on about 70,650 mineral acres.

    Ascent Spending $1.5B to Inflate Utica Shale Position - Ascent Resources LLC announced on Friday that it would acquire 113,400 net Utica Shale acres for $1.5 billion in a package of deals with multiple sellers, ballooning the company’s position in the play to more than 300,000 net acres and becoming one of the country’s largest private exploration and production (E&P) companies in the process.The deals, cut with Hess Corp., CNX Resources Corp., Utica Minerals Development and another undisclosed seller are expected to close in the third quarter. The package also includes 93 operated wells and 216 MMcfe/d of production, including 19% liquids.CEO Jeff Fisher said the bolt-on was a “milestone” for the company, which had its beginnings in 2013 when the late Chesapeake Energy Corp. co-founder Aubrey McClendon started a predecessor company to develop affiliates across the country with basin-specific strategies.“We continue to consistently deliver basin-leading well results through our best in-class operations and after completion of these acquisitions, we will become one of the largest privately held E&P companies in the U.S. in terms of asset size and net production,” Fisher said.Ascent and its affiliates plan to fund the transactions with about $965 million of common equity and $535 million of borrowings under the company’s revolving credit facility, which was recently upsized. The announcement further consolidates the Appalachian Basin as Ascent said the assets are largely contiguous with its existing position, allowing the company to extend lateral lengths, improve efficiencies and gain more exposure to liquids.Hess Corp. and CNX Resources Corp. came forward to enable a large part of the deal by agreeing to sell their 50/50 joint venture assets in Ohio for $800 million as both look to continue funding share repurchase programs and core development.The JV divestiture includes 78,000 net Utica Shale acres, 52,000 of which are undeveloped.* Each company would receive $400 million in proceeds at closing, a CNX spokesperson said.The assets are located in the wet gas window of Belmont, Guernsey, Harrison and Noble counties. Full-year 2018 production from the properties is forecast to a verage 14,000 boe/d, of which 70% is expected to be residue gas, Hess said.

    Eliza Griswold's 'Amity and Prosperity': Fracking, profit, and human costs in western Pa. – interview transcript 0 Eliza Griswold says her new book, Amity and Prosperity: One Family and the Fracturing of America (Farrar, Straus & Giroux, $27), “is about the price of energy.” More than seven years in the making, Amity and Prosperity studies Marcellus Shale families in Washington County, Pa., and their encounters with big energy and its pluses and minuses.Range Resources, one of the biggest oil exploration companies operating in the Marcellus Shale Deposit, comes to the town of Amity, bringing the severely mixed blessings of the fracking era. Range improves roads and infrastructure, injecting millions into the local economy. But families like that of single mother Stacey Haney, whose story is chronicled here, start to get ill. Their pets sicken and die. High levels of arsenic and other compounds are found in their blood.Three families sue the company, and after years of wrangling, their case goes all the way to the state Supreme Court, which finds in their favor. Griswold is an eminent investigative reporter, author (The Tenth Parallel), and poet. She spent several of her growing-up years in Chestnut Hill, as the daughter of the Rev. Frank T. Griswold III, rector for more than a decade at the Church of St. Martin-in-the-Fields. She spoke with the Inquirer on both ends of a flight from Pittsburgh to Philadelphia.

    Why Is This Happening? Examining the consequences of fracking in Trump country with Eliza Griswold: podcast and transcript  - NBCNews.com Chris Hayes and journalist Eliza Griswold look at precisely what happens when fracking comes to town in rural America.  What does it look like when fracking comes to town? For folks in poor rural areas, parts of Trump Country before we had Trump Country, fracking can mean opportunity, wealth, and autonomy for some, destruction and ruin for others.   Journalist Eliza Griswold tells a story that begins in the Niger delta and brings her to the doorstep of a family farm in southwest Pennsylvania in the midst of the energy boom. There, in the towns of Amity and Prosperity, she learns about the intimate and complex reasons why people chose to bring fracking to their town, and the crisis they face when mysterious illnesses begin to appear.

    EQT and CNX sell off more assets narrowing focus on Pa. shale gas -- A pair of Pittsburgh-based oil and gas companies announced asset-shedding deals on Friday that further narrows their focus on shale gas in Pennsylvania.Downtown-based EQT Corp. said it reached an agreement to sell its substantial holdings in the Huron Shale in Kentucky, Virginia and West Virginia for $585 million to Diversified Gas & Oil PLC.It also said it would “transfer” 250 employees in the deal “work in or support production, pipeline, compression, and measurement operations.” In a public document, Diversified disclosed that for a year after the close of the deal, it has agreed to give those employees comparable compensation to what they currently receive. Diversified, a company out of Alabama, has been picking up a lot acreage and wells in Appalachia recently, including in Pennsylvania. CNX was the other firm announcing a deal on Friday. It is selling its share of Utica Shale assets in Eastern Ohio for $400 million to Ascent Resources-Utica, another rising player in the area.Ascent, whose West Virginia-focused Marcellus Shale division went through a quicky bankruptcy restructuring earlier this year, was founded by Aubrey McClendon after his departure from Chesapeake Energy Corp. Both deals were foretold by the Pittsburgh firms in previous discussions with analysts.EQT’s activity in the Huron had gone through stops and starts as gas prices fell and rose over the past several years. Earlier this year, the company wrote down the value of certain assetsincluding the Huron properties by $2.3 billion. CNX’s Utica acreage being sold to Ascent was part of a 50-50 joint venture with Hess Corp. CNX said in a statement that it will use the proceeds to repay debt, repurchase shares of its stock, buy more acreage and invest in its operations.

    As Industry Pushes Billion-Dollar Fracked Petrochemical Projects, State Regulators Struggle To Keep Up -  --Fueled by fracking in the region, petrochemical and plastics projects in the Ohio River Valley are attracting tens of billions of dollars in investment, but as plans for this build-out hit the drawing boards, signs already are emerging that state regulators are unprepared for this next wave of industrialization. And the implications of their inexperience could mean major threats to the region's health and environment.  One of the projects currently underway, an underground natural gas liquids (NLG) storage site — designed to support the construction of several huge petrochemical complexes — is undergoing review by state regulators who have little experience with NGL storage facilities of its size.  “We had to juggle a lot of regulatory input in a relatively undefined setting since there are few regulations in Ohio, and that really goes for Pennsylvania and West Virginia as well,” Jonathan Farrell, a project manager with Civil and Environmental Consultants, told attendees at a petrochemical industry conference on June 18. That lack of well-established state regulations harkens back to the early days of the shale gas rush, when state regulators struggled to keep up with the emergence of hydraulic fracturing (fracking) and horizontal drilling technologies. The rush to drill while safeguards were still being designed and implemented led to inadequately treated toxic waste being dumped into drinking water supplies for millions of people and problems with radioactive waste that to this day.Today, the petrochemical industry is dreaming big about prospects for manufacturing plastics, styrofoam, vinyl, chemicals, and fertilizers from cheap ethane and other natural gas liquids from the Marcellus Shale — marketed as currently the cheapest in the world. The goal? To build a new petrochemical corridor in Pennsylvania, Ohio, West Virginia, and the surrounding region, one second only in size to the Gulf Coast’s — and one that could bring along with it the public health and environmental impacts that have given rise to that region’s reputation as a “cancer alley.”

    Money available for $10B NGL storage hub: experts — The $10 billion price tag for a natural gas liquids underground storage facility proposed near the Ohio River in Pennsylvania, West Virginia or Ohio, is mind-boggling to most outsiders. The storage is seen as a crucial part of the equation needed by the Appalachian Basin to again attract the U.S. petrochemical industry born here, but moved elsewhere decades ago. But to financial experts – the money men who work with millions, billions of their clients’/partners’ money daily — there’s no question funding for such a massive project not only is available, the money is looking for good projects for its funds. But proponents must keep a couple truisms in mind: Competition for funding is not regional or national – it’s global. And when talking about any energy project in the U.S. with private equity players, they must be convinced to consider the Appalachian Basin. “That giant sucking sound you hear is Texas; every time you talk with private equity players about energy, their eyes look toward Texas,” said an investment banker/equity capital markets expert, who requested anonymity. His remarks, part of a panel discussion on financing the storage hub, were made to roughly 120 attendees at the Second Annual Appalachian Storage Hub conference, held last week at Southpointe Business Park, south of Pittsburgh. The program was produced by Shaledirectories.com and TopLine Analytics. Kallanish Energy was in attendance. While $10 billion is a huge number, it’s only a puny 2% of the private equity money looking for investment opportunities, according to Damian Georgino. “Right now, there is $500 billion in infrastructure funds sitting on the sidelines worldwide,”  

    Construction of Mountain Valley Pipeline temporarily suspended The Virginia Department of Environmental Quality and Mountain Valley Pipeline project teams have agreed to temporarily suspend pipeline installation in Virginia.This comes after issues during inspections and complaint inspections.The pipeline company is directing crews to enhance and restore controls along the pipeline route to ensure proper soil erosion and sediment controls are implemented.Construction will resume within the project's 125-foot-wide right of way after MVP receives approval by the DEQ.This comes after the 4th U.S. Circuit Court of Appeals granted a temporary stay last week as part of a lawsuit brought by conservation groups challenging a water-crossings permit.At that point, company attorneys said in court filings that a stay would delay work on an 80-mile stretch of the natural gas pipeline at a cost of $600 million.A filing said such a delay would push back completion of the project by at least eight months. It had been scheduled to be in service by the end of the year.You can find a list of all the sites along the pipeline path under investigation here. Inspectors from the DEQ will stay at the site to monitor and review construction once it resumes. You can submit pollution reports through the DEQ website here.

    Mountain Valley Pipeline suffers another setback with suspension of some Virginia work — EQT Midstream Partners' Mountain Valley Pipeline, under pressure from environmental groups and facing construction challenges because of poor weather, said Friday it was temporarily suspending pipeline installationwork in Virginia. The work stoppage will make it even more difficult for the developer to meet its December startup target for the 2 Bcf/d natural gas project.Analysts had already been expecting a delay of up to a year or possibly longer. A message posted on the pipeline's website said the decision was made after consulting with the Virginia Department of Environmental Quality about ensuring that appropriate erosion and sediment controls were in place amid recent heavy rainfall. The brief statement gave no specific time line for resuming welding,trenching and stringing of pipe in Virginia. Spokeswoman Natalie Cox saidin an email that the operator was maintaining its current in-service target. "It's really a matter of adjusting our task sequence in order to continueto maintain the late 2018 in-service date, which is what we have been,and will continue, doing," Cox said. Any delay would be a blow for downstream utilities seeking better supply access and for producers awaiting more takeaway capacity out of theAppalachian Basin. The project is seen as a key conduit to serve downstream markets, including LNG exports. "The MVP project team takes its environmental stewardship responsibilities very seriously and wants to redirect its work efforts to focus exclusively on erosion controls affected by recent weather events," the pipeline operator said. In April, EQT Midstream proposed to add an offshoot to MVP that would extend about 70 miles south from the mainline to new delivery points in North Carolina and service customers of utility PSNC Energy with Appalachian Basin natural gas. The company said at the time that MVP Southgate was expected to start up in late 2020.

    Woman Locked to Construction Equipment to Protest Mountain Valley Pipeline → The pipeline fighter is STILL locked to construction equipment at a Mountain Valley Pipeline work site on Brush Mountain in VA. 7 hours and counting! Pipeline construction is STILL halted. “Virginians have tried every way we know how to tell our elected representatives that these fracked gas pipelines are a mistake,” said the protester locked to equipment in today’s action, a 46-year-old mother from Blacksburg, VA.“We may not have lobbyists outside your doors like Dominion does, but we can stop construction to tell you that southwest Virginia does not want the Mountain Valley Pipeline. MVP is bad for Virginia and bad for the planet. The State Water Control Board and DEQ can stop this pipeline. Governor Northam can stop this pipeline. Revoke water quality certification now and inspire a new generation of voters. Because if you don’t act to protect our water and our mountains, we will.” In late February, pipeline fighters took to the trees in Jefferson National Forest in Peterstown, West Virginia, in the path of the proposed 42 inch Mountain Valley Pipeline (MVP). The resistors are stationed on the site where MVP LLC intends to drill directly through the mountain and beneath the Appalachian Trail. To complete this section of the pipeline route, MVP LLC would drill a 42-inch boring hole through the ridge of Peters Mountain. The Karst limestone terrain of Peters Mountain generates and filters fresh drinking water. Karst terrain also makes this area especially susceptible to landslides and sinkholes. Pipeline construction in this area would destroy a unique biome filled with caves, underground streams, and springs inhabited by life found nowhere else in the world.

    Meet the Activists Arrested for Opposing the Mountain Valley Pipeline -- On April 11, high school English teacher Stephanie Stallings stood her ground with a group of protesters in opposition to the Mountain Valley Pipeline on the property of Mary Beth Coffey in Bent Mountain, Virginia. Under eminent domain, the pipeline is being constructed through Coffey’s property and that of several other landowners who oppose its construction. Mountain Valley Pipeline LLC was conducting tree-cutting on the property at the time to clear a path for construction. According to Stallings, Roanoke County Police told protesters at the scene to move two tree-lengths away from a designated tree-cutting area, citing standards set by the Occupational Safety and Health Administration. Stallings, one of the first Mountain Valley protesters to be arrested, refused to move.  “I felt this tiredness of being pushed around by these people who are breaking the laws consistently … that are in place to protect us, the land and the water,” Stallings told Truthout. “I didn’t want them to continue cutting the trees.”   Arrests of Mountain Valley Pipeline protesters have been a regular occurrence along the construction route of the pipeline since March 2018. Mountain Valley Pipeline LLC has cleared forest and begun construction of the $3.5 billion, 303-mile pipeline from northwestern West Virginia to southern Virginia, with a proposed 70-mile extension into North Carolina. According to the Roanoke Times, at least 20 people have been arrested in opposing the pipeline, though none of the charges have yet been successfully prosecuted.

    Little public input in decision to route pipeline through WV state forest - Following a series of public meetings and input from a host of state and federal regulators, environmental groups and forest users, developers of the Atlantic Coast Pipeline opted in February 2016 to re-route 12 miles of the proposed natural gas line out of the Monongahela National Forest. While that decision left only 5.1 miles of the pipeline still within the Monongahela, the detour added about 30 miles to its overall length, most of which will be absorbed by private landowners in Pocahontas County. But one tract of public land — Seneca State Forest — ended up encompassing nearly as much pipeline mileage as the Monongahela under an agreement worked out by state officials and pipeline representatives with virtually no public involvement. About 4 miles of the pipeline will extend through Seneca, the state’s oldest state forest, from the Greenbrier River and the adjacent Greenbrier River Trail, near Cloverlick, eastward across W.Va. 28 and up Michael Mountain past the forest’s eastern boundary. While nearly all recreational amenities inside the forest will be bypassed by the ACP, the pipeline will follow, and obliterate, the route of the Allegheny Trail for a little less than a mile, forcing a re-routing of the 330-mile cross-state pathway through the Seneca.    “The deal had already been done without them telling us anything about it,” said Robert Martin, attorney for the Pocahontas County Commission. “Previous county commissions had paid the [Dilley’s Mill] electric bills, and most of the construction work that needed to be done out there was done by locals.” State officials would not comment on whether the former BSA land had been transferred to Seneca State Forest. But earlier this month, Ann Simonelli of The Conservation Fund said in an email that the 1,200 acres had been transferred to the State of West Virginia in May 2018.

    Army Corps Reinstates MVP Permit in West Virginia; Court Stay Still in Effect - The U.S. Army Corps of Engineers Huntington District has reinstated the Mountain Valley Pipeline’s (MVP) Nationwide Permit (NWP) 12 for four river crossings in West Virginia, but a stay issued last month by a federal appeals court remains in effect. In a letter dated Tuesday, the Army Corps cited the less impactful but more time-consuming dry-ditch crossing method proposed for the Elk, Gauley, Greenbrier and Meadow river crossings in its determination to reinstate the NWP 12 with modifications. MVP posted notice of the reinstatement to the project docket this week [CP16-10]. Last month, the U.S. Court of Appeals for the Fourth Circuit granted a motion to stay MVP’s NWP 12 pending a ruling on a legal challenge brought by the Sierra Club and other groups. A spokeswoman for MVP told NGI’s Shale Daily the pipeline would seek relief from the court’s stay following the Army Corps’ decision to reinstate the NWP 12. The reinstatement “relates only to these four previously suspended crossings and will require MVP to utilize the dry-ditch crossing method, which is significantly more protective of the environment,” MVP’s Natalie Cox said. “While MVP is conducting other upland construction work, this reinstatement does not authorize MVP to conduct in-stream activities due to the stay imposed by the Fourth Circuit; however, with this reinstatement” by the Army Corps, “options are being evaluated to obtain relief from the stay.”

    TransCanada extends W Virginia Leach natgas pipe return to mid-July (Reuters) - TransCanada Corp’s Columbia Gas Transmission unit pushed back the date the section of its Leach Xpress natural gas pipeline in West Virginia will resume service to mid-July from an earlier forecast of early July. The pipe was damaged in a blast on June 7. The company changed the restoration date in a notice to shippers using the line on Friday. The Leach shutdown forced producers using the line to find other pipes to move gas out of the Marcellus and Utica shale regions of Pennsylvania, West Virginia and Ohio. Alternative pipelines include ETP’s Rover, Tallgrass Energy Partners LP’s Rockies Express (REX), EQT Midstream Partners LP’s Equitrans and Enbridge’s Tetco, according to analysts at S&P Global Platts. Columbia Gas, which declared a force majeure after the blast, said the damaged section of pipe in Marshall County could affect movement of about 1.3 billion cubic feet per day. One billion cubic feet of gas is enough to fuel about 5 million U.S. homes for a day. Energy analysts, however, 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 move their gas. Appalachian output has actually increased to around 28.0 bcfd in recent days, up from around 27.5 bcfd before the blast, according to Thomson Reuters data. The 1.5-bcfd Leach Xpress in West Virginia and Ohio, which entered full service at the start of this year, 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. 

    Clean Water Advocates Ask For Halt to Second Fracked Gas Pipeline — Today, the coalition of clean water advocates that forced a halt of stream crossing construction activities for the Mountain Valley Pipeline (MVP) in West Virginia has formally requested the same for the Atlantic Coast Pipeline (ACP). The coalition took two actions today. First, it filed a petition for review with the Fourth Circuit. Second, it formally asked the United States Army Corps of Engineers to stay the stream construction permit during litigation. If the Corps refuses to stay the permit, the coalition will ask the Court to do so.The Atlantic Coast Pipeline stream crossing permit suffers from the same defects as the Mountain Valley Pipeline permit that the Fourth Circuit stayed last week. Specifically, Atlantic Coast’s planned crossing of the Greenbrier River–the longest remaining free-flowing river in the East–will take longer to complete than allowed by law.The coalition includes the West Virginia Rivers Coalition, the West Virginia Highlands Conservancy, Appalachian Voices, Chesapeake Climate Action Network, and the Sierra Club, and is represented by Appalachian Mountain Advocates.  In response, Sierra Club Beyond Dirty Fuels Campaign Director Kelly Martin released the following statement: “We know we can’t trust the polluting corporations behind these fracked gas pipelines to build them without doing serious damage to our water and communities. Construction should be immediately halted on the Atlantic Coast Pipeline, just like it was on the Mountain Valley Pipeline.” Cindy Rank of the West Virginia Highlands Conservancy said: “The West Virginia Highlands Conservancy is concerned about the overall impacts of mucking about in streams whatever the activity – including by the gas industry. The value of the hundreds of miles of streams being crossed and disturbed by the ACP gas pipeline demand that more specific evaluation be given to each and every crossing than the general considerations provided by nationwide permits.”

     Communities Fighting Fracked Gas Infrastructure Crack FERC Open – Vimeo - On Monday, Sane Energy joined our allies at Beyond Extreme Energy in Washington D.C. for the Crack FERC Open action where two bamboo 15 foot tall “fracked gas drilling rigs” with protesters locked inside were set up to blockade the entrance in front of the Federal Regulatory Energy Commission (FERC) building to prevent business as usual to operate.It wasn’t the first time we’ve been there.For years we’ve traveled down to DC with communities being harmed by fracked gas infrastructure to call out FERC for their role in approving infrastructure projects that poison people and exacerbate climate change.Although FERC is the agency responsible for regulating interstate natural gas pipelines, it is widely criticized as a rubber stamp for the fossil fuel industry, approving almost every single pipeline that comes across their desk due to the distorted process created by the Energy Policy Act of 2005, under Dick Cheney’s direction and former president George W. Bush’s approval. FERC actually facilitates the construction of interstate gas infrastructure rather than regulating it.“We call this action Crack FERC Open,” said BXE organizer Ted Glick. “The reason is that there are cracks appearing in FERC. It’s within FERC in many ways because of what’s happening outside of FERC.”FERC is governed by 5 commissioners that for years were lock-in-step on approving fracked gas infrastructure, but recently two commissioners, Richard Glick and Cheryl LaFleur, have provided dissenting opinions saying the agency needs to consider climate impacts into their decisions. FERC employees have also thanked citizens protesting outside their building. BXE and other allies have been a consistent presence at FERC for years now, staging creative protest that tell the stories of those being harmed by FERC’s pipeline approvals. The message isn’t getting across to all the commissioners though.

    US gross gas output hit record in April: EIA -- US natural gas output hit a record high in April above 89 Bcf/d (2.5bn m³/d) as production rose in Texas, Louisiana and Oklahoma. Gross gas production from the lower-48 states rose in April to 89.1 Bcf/d, up by 0.3pc, or 252mn cf/d from March, the US Energy Information Administration (EIA) said today in its monthly production report. April output has surged by 12pc from a year earlier as new infrastructure allowed more northeast gas to reach market and as producers continued to shore up fresh oil supplies from places like the Permian basin. Rising gas production and expectations for future supply growth has put downward pressure on prices this year. Natural gas futures so far this summer have failed to sustain a rally above $3/mmBtu, despite low inventories and hot weather, a sign of confidence in continued growth. Output from Texas, the largest gas-producing state by volume, rose to nearly 23 Bcf/d, up by 1pc from a year earlier and a year-over-year increase of 9pc. Texas is home to a large swath of the Permian, where oil wells can produce large volumes of associated gas. New Mexico production, which sits atop part of the Permian, increased to 4.1 Bcf/d, a 3.3pc gain from a month earlier and a 13pc rise from a year earlier. Louisiana output moved 0.5pc higher to 7.5 Bcf/d, a year-over-year increase of 44pc. Louisiana production can act as a bellwether for the Haynesville shale, a gas-rich formation in underlying the northern part of the state and east Texas. Output from Oklahoma was up by 0.7pc in April to 7.8 Bcf/d, 15pc higher than a year earlier. Producers in that state are developing the Stack and Scoop formations, two oil- and gas-rich fields. The combined gas production from Ohio, West Virginia and Pennsylvania — three states that represent the Marcellus and Utica shales — dropped in April to 27.1 Bcf/d, down by 0.7pc from March. Production there will likely increase in subsequent reports because new pipelines such as Energy Transfer Partners 3.25 Bcf/d Rover pipeline have expanded service to the area..

    Production Overwhelms as Natural Gas Bears Gain Upper Hand; East Coast Spot Higher on Heat - Surging natural gas supply continues to act as a yoke on futures prices; data showing record-level production, combined with expectations for more seasonal weather later in the month, helped send futures lower Monday despite large storage deficits and bullish near-term forecasts. In the spot market, hot temperatures along the Interstate 95 (I-95) corridor lifted Northeast and Mid-Atlantic points as restored pipeline capacity out of the Permian Basin helped boost prices in West Texas; the NGI National Spot Gas Average finished 7 cents higher at $2.76/MMBtu.The August futures contract settled 6.2 cents lower Monday at $2.862, not far off the $2.852 intraday low after trading as high as $2.927. September settled at $2.844, down 5.7 cents.The drop to start the week suggests “production is just too strong for the markets to ignore, aided by reports of weekend production at or exceeding all-time highs, thereby weighing more heavily on prices than hefty deficits and hotter than normal temperatures,” NatGasWeather said.Prices now are down 15 cents since last Thursday when the Energy Information Administration issued “a bearish revision” to the prior week’s storage data, while “the markets appear to be stating record production is back in the driver’s seat and hotter trends might be needed for bulls to regain momentum.”Lower 48 production appears to have cracked the 80 Bcf/d mark, according to recent data from Genscape Inc. Following pipeline reported revisions to nominations data, its production team showed volumes hit around 80.05 Bcf/d on June 28 and 29. Bespoke Weather Services attributed Monday’s sell-off to production reaching “record levels” over the weekend and to a slight cooling in medium-term forecasts.

    EIA's Storage Figure Tops Survey Averages as Natural Gas Futures Steady - Bulls hoping for a lean natural gas storage report from the Energy Information Administration (EIA) Friday left disappointed as the agency came out with a net build on the higher side of average estimates. Still, futures prices stayed the course after briefly dropping on the news.  EIA, issuing its weekly report a day later than usual due to the Independence Day holiday, said Lower 48 natural gas stocks saw a net 78 Bcf build for the week ending June 29, versus a 60 Bcf injection recorded a year-ago and a five-year average 70 Bcf build.  The number also topped major survey averages by around 3 Bcf, a reversal from the prior week’s bullish miss (although that report also included a bearish revision to stocks for the week ended June 15).  Immediately after the 10:30 a.m. ET release of the injection figure, August Nymex futures shed about 2 cents to reach as low as $2.826, testing what analysts have pegged as a key support area for the prompt month. But prices bounced back within minutes, and by 11 a.m. ET August was trading around $2.848, up about 1.1 cents from Thursday’s settle and in line with prices prior to the open.  In the lead-up to Friday’s report, a Reuters survey of 21 traders and analysts had showed respondents on average expecting EIA to report a 75 Bcf build for the week, with responses ranging from 63 Bcf to 81 Bcf. A Bloomberg survey had produced an average 75 Bcf injection, with a range of 66 Bcf to 81 Bcf. Intercontinental Exchange EIA Financial Weekly Index futures had settled Wednesday at a build of 77 Bcf.   Bespoke Weather Services said the 78 Bcf build confirmed its estimate prior to the report.

    Ineos Says New European Ethane Cracker to Benefit from U.S. Natural Gas - Global petrochemical giant Ineos said Tuesday it plans to invest more than $3 billion to build a world scale ethane cracker and propane dehydrogenation unit in northwest Europe to take better advantage of U.S. natural gas supplies. Ineos said the facility would be Europe’s first new cracker in two decades. Both units, the company said, would “benefit from U.S. shale gas economics.” The company, which already operates crackers in the region in Scotland and Norway, said a site would soon be determined, likely somewhere on northwest Europe’s coast. The facility is expected to be completed within four years. “This new project will increase Ineos self-sufficiency in all key olefin products and give further support to our derivatives business and polymer plants in Europe,” said Chairman Gerd Franken, of Ineos’ olefins and polymers north business. “All our assets will benefit from our ability to import competitive raw materials” from the United States and the rest of the world. The company has long-term supply agreements with several unconventional gas producers, particularly those operating in the Appalachian Basin. Ineos became the first European company to contract for U.S. shale gas feedstock in 2012 in an agreement with Marcellus Shale heavyweight Range Resources Corp. Ineos delivered the first U.S. gas to Europe in 2016, a shipment of Appalachian ethane that was picked up at the Marcus Hook Industrial Complex near Philadelphia. The company also takes deliveries from the only other ethane export facility in the country, Enterprise Products Partners LP’s Morgan’s Point terminal on the Houston Ship Channel. 

    Insurgent shale: prospects and perils for US LNG exports – pdf – Platts LNG special report June 2018 - The emergence of the US as a major exporter has rapidly transformed the way the global LNG industry operates, but its economic success will not come without challenges, first and foremost from a potential bottleneck at the Panama Canal. In just a matter of years, American shale gas exports have loosened the grip of traditional exporters and restrictive long-term contracts. The impact has been particularly strong in the Asian markets, the epicenter of the traditional LNG business model, based on destination-restricted, oil-indexed, longterm contracts, and by far, the largest recipient of US LNG volumes since exports began in February 2016. The ramp-up in US LNG exports has only just begun. By 2020, volumes are forecast to more than quadruple from around 14.4 million mt in 2017 to 62 million mt, after the completion of Elba Liquefaction Project, Freeport LNG, Cameron LNG and Corpus Christi LNG. Significant surplus gas production, increasingly competitive E&P techniques, rising oil prices and export-favorable policies at home are likely to support growth in the US LNG industry, with eleven LNG export projects approved by the US Department of Energy and 16 others proposed so far. These projects, however, come with their own set of challenges, and their success depends on four key factors: cost competitiveness, midstream optionality, commodity price spreads and potential constraints in the Panama Canal, a major threat to US LNG global expansion,

    Methane leaks threaten natural gas' climate-friendly image  (Reuters) - Executives from natural gas companies call their increasingly cheap and plentiful fuel the world’s best answer to climate change: it produces about half the carbon dioxide of coal when burned in a power plant and it can fuel trucks, trains and ships. While some outside the industry see natural gas as but a stepping stone to a future when all energy will be provided by wind, solar and other renewable sources, “This idea of natural gas as a transition fuel to renewables is strange,” Total SA chief executive Patrick Pouyanne said. “Natural gas is a solution,” he said this week at the World Gas Conference in Washington, the industry’s biggest global summit. But environmentalists, regulators, and many in the industry itself warn of a dirty underbelly to natural gas, or methane. Before it is burned, it is one of the most potent greenhouse gases and can reach the atmosphere through leaks in wellheads, compressor stations and chemicals plants. A study published in the scientific journal Nature last week put methane emissions from the U.S. oil and gas industry at about 13 million metric tonnes per year, 60 percent higher than the official U.S. Environmental Protection Agency estimate. Carbon dioxide emissions from U.S. energy sources, meanwhile, are around 5 billion tonnes. The United States is the world’s top natural gas producer, one of its biggest crude oil producers, and a growing exporter of both thanks to improved drilling technology that has vastly increased output. While methane emissions are relatively small compared to carbon dioxide, they are a major force in short-term global warming. Scientists say methane can trap more than 80 times more heat than carbon in the first 20 years after escaping into the atmosphere.

    NYMEX August natural gas futures inch higher at $2.874/MMBtu on warm spell — The NYMEX August natural gas futures contract increased slightly Tuesday, as warmer-than normal temperatures trumped two consecutive US dry gas production records on Sunday and Monday. As of 10:53 am EDT (1453 GMT), the front-month contract was trading 1.2 cents higher at $2.874/MMBtu after sitting in a narrow range of $2.852/MMBtu-$2.876/MMBtu. The front-month contract has only settled above $3.00/MMBtu mark two times in the last six months, including posting a settle of $2.999/MMBtu last week, but has now eased back. Record production and cooler-than-expected temperatures both put pressure on the market. "If temperatures moderate a little, prices should balance out a bit," according to Phil Flynn, Price Futures Group senior market analyst. US dry gas production continues to rise, reaching 80.7 Bcf on Monday, an all-time high, according to S&P Global Platts Analytics data. The climb in output was driven primarily by the Marcellus and Utica shale plays, who contributed 27.66 Bcf of the total, according to Platts Analytics. Looking ahead, the most recent six- to 10-day outlook from the US National Weather Service continues to call for warmer-than-average temperatures for much of the Northwest and Rockies, in line with the weather service's most recent one-month forecast, which projected a warmer-than-average July. Pacific Northwest power burn averaged 6.28 Bcf/d in the first two days of July, a 70% increase compared with power burn at the same time last year. Total US demand, including Mexican and LNG feedgas exports, over the same period averaged 71.1 Bcf/d, compared with 63.3 Bcf/d in the year-ago period, according to Platts Analytics data. Strong dry gas production in the US could see domestic gas inventories build at an above-average pace over the coming weeks. Platts Analytics expects a 75 Bcf build in storage stocks to be announced by the US Energy Information Administration for the week that ended June 28.

    Fracking appears to be out: group gets Ron DeSantis to voice support for ban - Republican U.S. Rep. Ron DeSantis became the seventh and final major gubernatorial candidate to say he supports a ban on oil and gas fracking in Florida when the activist group Food & Water Action pinned him down at a campaign event Monday.Following DeSantis’ rally in Tampa Monday he shook hands with members of the crowd, and that’s when Food & Water Action volunteer Ginger Goepper asked him if he supports a ban on fracking in Florida. “Yeah, yep, yeah,” DeSantis replies, as shown in a video the group released Tuesday afternoon.Last month Goepper asked Republican Agriculture Commissioner Adam Putnam if he opposed fracking. Putnam replied a bit more loquaciously, “We don’t need to be fracking in Florida. Our geology, our limestone, we do not need to be fracking in Florida for oil and gas. It is just not the right spot.”Putnam’s campaign then confirmed that was his position. As of mid-afternoon Tuesday, DeSantis’ campaign had not yet confirmed his support for a fracking ban. With the two leading Republican gubernatorial candidates apparently in opposition to fracking in Florida, the group declared victory, since all five major Democratic candidates for governor are on the record supporting a ban.

     Terminal reports sharp rebound in LOOP Sour cavern exports for June - The Louisiana Offshore Oil Port delivered more than 1.1 million barrels of the blended crude LOOP Sour ex-cavern in June, more than double the amount it delivered in May, the oil terminal said Monday. LOOP Sour is comprised of the US Gulf of Mexico grades Mars and Poseidon and a crude blend called Segregation 17, into which the Middle Eastern grades Arab Medium, Basrah Light and Kuwait Export Crude can be delivered. Last month, about 37,000 b/d of LOOP Sour were exported from the cavern. That compares with both a 2018 and the 12-month average of 49,000 b/d. It also represents a sharp rebound from May, when about 500,000 barrels of LOOP Sour were delivered from the cavern. That was the lowest monthly total since one year earlier, when no LOOP Sour was exported from the cavern. The record-high was April, when more than 3.2 million barrels, or 107,000 b/d, were delivered ex-cavern. In related news, LOOP and Matrix Markets will host Tuesday their monthly storage futures auction for LOOP Sour capacity allocation contracts, Matrix Markets said last week. The companies will auction 11,900 CACs worth the equivalent of 11.9 million barrels of storage. The front-month of August will see 2,250 CACs put up for sale while the most for any contract will be in Q4 2018, where 4,800 CACs will be auctioned. The 11,900 CACs to be auctioned represent the largest amount to be offered in one auction since April 2015, which was just the second storage futures auction held by the companies. Over the past year, LOOP has typically offered just shy of 9,000 CACs. The value of those CACs has traded between 5-8 cents/b since December 2017, when the minimum bid was lowered to 5 cents/b. Market participants do not appear interested in paying up to store crude, particularly in a backwardated market. It is worth noting that the backwardation lately has increased. 

    What Michigan's new fracking regulations will mean - This afternoon, the Michigan Department of Environmental Quality (MDEQ) announced that it would be proposing new rules for the development of oil and gas wells using hydraulic fracturing, or "fracking." These rules are the result of numerous public meetings throughout the state over the last two years. The rules themselves will not become official until they go through a public notice and comment process. But once that process is completed and the rules are finalized, Michigan will have a new set of rules that will apply to fracking operations. So, what does MDEQ say about what we can expect from these rules? Well, Michigan already has regulations in place relating to oil and gas operations. MDEQ is now proposing to change the rules in four specific areas:

    • Michigan has in place a tool to determine if water withdrawals have the potential of harming flows in surface waters. Fracking operations will also be required to install a well to monitor groundwater levels if there is a water supply well within 1,320 feet of the fracking operation.
    • Fracking operations will be required to collect baseline samples from up to 10 water supply wells (if they are within 1,320 feet of the operations) six months or less before drilling operations begin. This will establish the groundwater quality before fracking begins in order to determine if and when drilling operations have affected higher aquifers.
    • Operators will be required to inform MDEQ whether the specific well development will require high volumes of water, submit separate applications for high volume hydraulic fracturing (HVHF) operations for already existing wells, provide 48-hours notice before beginning well operations, and monitor and report fluid pressures and volumes for all HVHF operations.
    • Operators must disclose the chemical constituents of fluids used in HVHF operations using an internet registry, although the operator may protect the identity of certain chemicals that have trade protection under federal law.

    Enbridge pipeline gets Minnesota nod in win for oil sands -- Canada’s oil industry just moved one step closer to getting some relief from its pipeline woes. Enbridge Inc.’s planned $7 billion replacement and expansion of its Line 3 conduit, linking Alberta’s oil fields to refineries in the U.S., was given the green light by regulators in Minnesota on Thursday, clearing the way for the project to move ahead. The state’s Public Utilities Commission approved a certificate of need for the project in a 5-0 vote and signed off on a pathway for the conduit that hewed closely to Enbridge’s preferred route on a 3-2 vote. While opponents of the pipeline may continue to fight the project through protests and legal challenges, the votes represent a victory for Canada’s oil industry, which has supported the Line 3 expansion as a way to alleviate the pipeline bottlenecks that have weighed on prices for its crude. The 1,000-mile (1,600-kilometer) Line 3 project would help carry about 370,000 more barrels of heavy and light crude a day from Hardisty, Alberta, to a storage hub in Superior, Wisconsin. “Projects like this help us make sure we’re getting product to market, which is good for Canada,” Enbridge Chief Executive Officer Al Monaco said in response to reporters’ questions at the World Gas Conference in Washington while the hearing was ongoing.

    Water Protector Suspended 25 Feet in Demonstration Against Line 3 Pipeline - A water protector ascended a 25-foot steel tripod structure erected in the street in front of the Public Utility Commission (PUC) office to demonstrate ongoing resistance against Enbridge’s proposed Line 3 tar sands pipeline. Today marks one of the final public hearings held by the PUC on its decision to grant a certificate of need to the controversial pipeline.  All five of the directly affected Objibwe Tribal Nations in Minnesota oppose the dangerous project because of the threat it poses to their fresh water, culturally significant wild rice lakes, and tribal sovereignty. Line 3 will accelerate climate change by bringing carbon-intensive tar sands bitumen from Alberta to refineries in the Midwest. Climate change disproportionately impacts Indigenous and frontline communities across the world. This deadly infrastructure project is another example of the genocidal legacy of colonialism faced by Native peoples and the ecological destruction caused by corporate greed. Water protectors, climate justice advocates, landowners, and faith leaders stand united alongside Native communities against this dangerous pipeline. At around 7AM CST water protectors blockaded traffic by erecting 25-foot steel poles in a tripod structure on 7th Pl. in front of the PUC offices in downtown Saint Paul, MN. Ben, a 30-year-old Minneapolis resident, ascended the structure and unfurled a banner that reads, “Expect Resistance,” a clear message to Enbridge and the PUC that fierce opposition to this pipeline will continue to grow at every stage.

    We're Not In Kansas Anymore - The Conway Vs. Mont Belvieu Propane/NGL Differential Blowout -- For 10 years prior to 2018, the differential between propane prices at the Conway, KS, hub averaged less than a nickel per gallon below Mont Belvieu. In fact, between 2013 and 2017, the price spread was only 3.5 c/gal — excluding a winter 2014 Polar Vortex aberration — which basically reflects the cost of moving barrels 700 miles north-to-south. Not this year, though. After starting 2018 at 3 c/gal, the propane price spread took off, and has averaged 18 c/gal since April, some days moving above 26 c/gal, far above the per-bbl cost of transporting propane 700 miles south to Mont Belvieu. Is it pipeline capacity constraints? In part. But there is a much more significant factor driving this differential wider, not only in the propane market, but across all five of the NGL purity products. What is this mysterious factor? To find out, read on. But here’s your first clue: the problem is not in Kansas anymore.

    Boulder County commissioners back proposed oil and gas state ballot measure - Boulder Daily Camera - Boulder County commissioners on Friday announced their support for a proposed state law that — if it makes it onto November's election ballot and is then approved by Colorado voters — would increase the distances that future oil and gas development has to be set back from homes, schools and hospitals.The proposed ballot initiative would require that oil and gas development be a minimum of 2,500 feet away from such "occupied structures."That setback requirement would also apply to oil and gas development near such "vulnerable areas" as playgrounds, permanent sports fields, amphitheaters, public parks, public open space, public and community drinking water sources, lakes and reservoirs, rivers and creeks, and irrigation canals. Current Colorado Oil and Gas Conservation Commission regulations require that new oil and gas wells be at least 500 feet away from homes and 1,000 feet away from such high-occupancy buildings as schools and hospitals. "This initiative, if approved by voters in the fall, would be an important step in providing greater protection for those living, attending school, or obtaining drinking water within a half mile of fracking sites," . "We need to take every opportunity to move these heavy industrial facilities away from vulnerable populations across the state," "A setback of at least 2,500 feet would provide a more protective minimum buffer area for Colorado residents,"

    Damage during installation led to oil pipeline crack — The National Transportation Safety Board says a fatigue crack caused last year's rupture of the Keystone oil pipeline in South Dakota. The NTSB said in a report released Thursday that the crack likely originated from mechanical damage to the pipe exterior caused by a metal-tracked vehicle during installation. Investigators say the crack grew to a "critical size" and resulted in the Nov. 16 rupture near Amherst. An estimated 210,000 gallons of oil spilled from the TransCanada Corp. pipeline between the Ludden, North Dakota, and Ferney, South Dakota, pump stations. There were no injuries associated with the incident. TransCanada spokesman Matthew John says the impacted property has been cleaned up and the pipeline has returned to service. John says the company is committed to achieving its goal of "zero incidents." 

    5 Crazy Ways the House Is Pushing Extreme Drilling on Public Lands -Some members of Congress are trying to rig the system to use public lands primarily for oil and gas drilling, and they are threatening to silence and punish anyone who objects.Under the Trump administration, public lands are being offered up for drilling at higher rates than ever before. Last year the U.S. government offered up 11.8 million acres for lease, or equivalent to Vermont and New Hampshire together. Vital protections for our air, land and water have been eliminated and public input has been minimized.New legislation is being considered by the House Natural Resources Committee that would hurry the selling of public lands by punishing states and citizens opposed to drilling. It would also relax safety requirements.These are five of the worst ideas under consideration:

    • 1. Making citizens pay to protest drilling. Rep. Liz Cheney (R-WY) introduced HR 6087, a bill that would require citizens and groups like The Wilderness Society to pay a fee to file comments opposing reckless oil and gas leasing. Oil and gas companies, however, would not have to pay a fee for expressing interest in these parcels.
    • 2. Rigging the system to benefit polluters. Rep. Steve Pearce from New Mexico introduced HR 6106 and HR 6107, bills that would limit the ability of federal regulators to review environmental, safety or public health impacts of projects. HR 6106 would stop Bureau of Land Management employees from taking a closer look at several types of oil and gas projects—including roads and pipelines—regardless of the impact they may have. HR 6107 would similarly bar federal regulators from reviewing certain oil and gas projects regardless of impact. The bill proposes to exempt any project that taps less than 50 percent of the federal mineral resources available, so long as the land surface is owned by another party.
    • 3. Handing out drilling permits as fast as possible. Rep. John Curtis (R-UT) proposed HR 6088, a bill creating a new program for drilling permits on many public lands. It would make it so that after a permit has been filed, a company does not need a site inspection or environmental review to drill. All they have to do is wait 45 days. The only exception is if the Secretary of the Interior personally objects. This idea to rubber-stamp drilling permits would eliminate nearly all scrutiny of public health, safety or environmental impacts of a drill site.
    • 4. Tying our children's education funding to oil drilling. Rep. Scott Tipton's (R-CO) HR 5859 bill would require that we expand onshore energy production to provide funds for education. It would do so by encouraging expansion of drilling on our public lands and incentivizing drilling. The bill would also potentially ignore dangerous consequences on public health, wildlife habitat, and air and water quality. It creates a false choice between selling out children's wellbeing and funding their education.
    • 5. Handing drilling on public lands over to the states and penalizing states that oppose drilling. Possibly the worst idea yet is the "Enhancing State Management of Federal Lands and Waters" bill. This proposal would allow states to apply to manage an unlimited number of acres of federal lands that were within their borders. It would also exempt oil and gas projects from federal environmental laws and put states in charge of all permitting and project regulation. States would then be forced to continue to drill these lands at increasing intervals, as they would be rewarded for drilling more and penalized or have management stripped from them for drilling less.

    Trump's BLM Ready to Sacrifice Ancient Rock Art for Gas Drilling - While the Ancestral Puebloan people of the Southwest were building citadels like Chaco Canyon, the Fremont people were carving mysterious petroglyphs depicting horned, broad-shouldered triangular men and sweeping carvings of desert snakes. Nowhere is their legacy more apparent than in eastern Utah’s Molen Reef. Fremont artifacts dominate this cultural heritage site, but its rock art ranges from 3,000-year-old panels from the Barrier Canyon tradition to etchings by Mormon pioneers crossing the Utah desert. They aren’t easy to see, but that’s not a bad thing. You won’t find these cultural treasures on a map, and Jonathan Bailey, a Ferron, Utah-based photographer and author of Rock Art: A Vision of a Vanishing Cultural Landscape, thinks it should stay that way. “There are hundreds of rock art panels in the Molen Reef, and maybe a dozen are known,” he says. “They are mostly pristine, unexcavated sites that have very little vandalism.”  Bailey worries about the resources being compromised by human activity before they can be cataloged and protected. But the Bureau of Land Management (BLM) has different plans for the area. In January 2018, the agency approved the leasing of 32,000 acres for mineral exploration between the San Rafael Swell and Molen Reef—just as it has in many other places in Utah. In Molen Reef, instead of highly publicized conservation efforts led by environmental organizations, tribal groups, or multibillion-dollar outdoor recreation outfitters, the resistance is being led by a scrappy group of rock art enthusiasts fighting to save the sites they love to explore.

    U.S. Hydraulic Fracturing Market Size to Reach $13.91 Billion by 2025: Hexa Research - The U.S. hydraulic fracturing market to reach USD 13.91 billion by 2025, owing to the rise in the oil and gas exploration and extraction activities in the country over the forecast period. There is a rise in the demand for primary energy resources owing to the rise in population and industrialization. To meet these demands and ensure the continuous supply of natural resources in the country, the market for unconventional techniques such as hydraulic fracturing is expect to grow over the forecast period. . In 2015, around 67% of natural gas was produced from hydraulically fractured wells in the country.The U.S. hydraulic fracturing market is expected to grow significantly owing to the rise in the recent developments and innovations such as using hydraulic fracturing in combination with horizontal drilling during shale formations. This has revealed new sources for huge amount of natural gas supplies, which is fulfilling the energy needs of the nation and is expected to transform the energy future. The use of this technology was first employed around the year 2000 after which it was continuously being used in the oil and gas production and extraction processes. There is a significant rise in the domestic oil and gas production from hydraulically fractured oil and gas production wells. In 2015, the production of oil from hydraulically fractured reservoirs accounted for more than 50% of the total oil production and the gas production accounted for around 70% of the total gas production in the country. This combination technology of directional drilling and hydraulic fracturing allows the oil and gas reservoirs to be punctured directionally or horizontally alongside the foundation of targeted rocks, giving exposure to the rock formation bearing oil and gas in the production well, which is expected to drive the growth for this market over the forecast period.

    Fracking: Further Investigations into the Environmental Considerations and Operations of Hydraulic Fracturing, 2nd Edition -- Wiley - 954 pages - Since the first edition of Fracking was published, hydraulic fracturing has continued to be hotly debated.  Credited with bringing the US and other countries closer to “energy independence,” and blamed for tainted drinking water and earthquakes, hydraulic fracturing (“fracking”) continues to be one of the hottest topics and fiercely debated issues in the energy industry and in politics.  Covering all of the latest advances in fracking since the first edition was published, this expanded and updated revision still contains all of the valuable original content for the engineer or layperson to understand the technology and its ramifications.  Useful not only as a tool for the practicing engineer solve day-to-day problems that come with working in hydraulic fracturing, it is also a wealth of information covering the possible downsides of what many consider to be a very valuable practice.  Many others consider it dangerous, and it is important to see both sides of the argument, from an apolitical, logical standpoint. While induced hydraulic fracturing utilizes many different engineering disciplines, this book explains these concepts in an easy to understand format.  The primary use of this book shall be to increase the awareness of a new and emerging technology and what the various ramifications can be.  The reader shall be exposed to many engineering concepts and terms.  All of these ideas and practices shall be explained within the body.  A science or engineering background is not required.

    US crude by rail traffic rebounds in 1Q  - Every US railroad reported an increase in crude carloads during the first quarter, as the total number reported by all seven Class I carriers rose to its highest level since late 2016.The major North American railroads combined for 88,571 crude carloads in the US, according to the latest data available from the Surface Transportation Board. That is up from 79,891 in the last quarter of 2017 but still well shy of the record 242,149 in the third quarter of 2014.Crude-by-rail leader BNSF, which dominates Bakken crude movements out of the Williston basin centered in North Dakota, reported 39,799 crude carloads in the first three months of 2018, down from 39,937 in the year-prior period and 106,534 in the fall of 2014.BNSF crude carloads plunged to 23,981 in the third quarter of 2017 upon the inauguration of the 525,000 b/d Dakota Access pipeline to Patoka, Illinois, and Nederland, Texas. But growing production in the Williston basin along with continued profitable rail movements to some destinations — mostly the west coast but increasingly the east coast — helped boost volumes in the ensuing quarters.BNSF, along with fellow western US railroad Union Pacific (UP), also can pick up crude from Canada and deliver it to the increasingly busy USD Group terminal at Stroud, Oklahoma. Last week it was a BNSF train hauling Canadian crude that derailed in Iowa, causing 32 cars to topple and leak oil into the Little Rock river. UP reported 7,710 crude carloads in the first quarter, its highest-volume quarter since the third quarter of 2016. UP, a Bakken crude-by-rail pioneer earlier this decade, had seen volumes decline as the US Gulf coast became a less viable destination as pipeline capacity rose.

    Canadian crude-by-rail volumes reach record level of 193,468 b/d in April: NEB - Steadily wide differentials have sent crude-by-rail volumes out ofAlberta and Saskatchewan to refineries in the US and East Coast Canada29% higher year on year to 193,468 b/d in April, the National EnergyBoard said in its latest report. This figure is likely to rise in the coming six months as railroads signmore offtake contracts and deploy resources, industry officials saidMonday. Volumes loaded on rail cars were 149,903 b/d in April 2017, the NEB said. The April 2018 volume was the highest since 2012 and compared with178,989 b/d and 175,654 b/d in September 2014 and December 2014respectively, a study of the NEB data showed. A wider differential can help account for costly rail economics. WesternCanadian Select differentials averaged a $24.50/b discount to WTI overMarch, S&P Global Platts data shows. That spread narrowed to around $17/bin April and May, before widening back out to $21/b over June. "The high volumes indicate multiple unit trains are now being hauled outof Western Canada each day, with bigger producers now loading theirbarrels at the Edmonton and Hardisty loading terminals due to the[continuing] restriction in pipeline takeaway capacity," said SandyFielden, an analyst with Morningstar. A unit train comprises of roughly 100 cars with each tank car capable ofshipping some 650 barrels depending on the quality of crude. Fielden did not name any major producer, but ConocoPhillips said lateJune it was shipping crude from its oil sands facilities in Alberta inrail cars to Stroud in Oklahoma. ConocoPhillips is the operator of the Surmont oil sands facility inAlberta of current gross capacity 140,000 b/d.

    Syncrude Outage Churns Market -- The outage of Syncrude's 350,000 barrel per day upgrader in Alberta, Canada is roiling markets. The facility experienced a power outage late in June and is expected to be off line through July, which means refiners in the US Midcontinent are scrambling to replace the lost supply of light, sweet barrels. The results are wide-ranging and potentially long-lasting. Taking Syncrude out of pipelines helps alleviate bottlenecks facing heavier grades, tightening the differential between light and heavy crude. The outage has also reversed recent price spreads as barrels at Cushing, Oklahoma and along the US Gulf Coast must be incentivized to move north rather than to tidewater. Brent's premium to West Texas Intermediate (WTI) has been slashed almost in half, and what at first glance looks like a relatively minor disruption to supply could slow down burgeoning US crude oil exports. In addition, the forward curve for WTI is getting more volatile as the market prices in the implications of going at least 31 days without access to Syncrude.

    Enbridge Selling BC, Alberta Natural Gas Midstream Operations for $3.3B - Production gathering pipelines and processing plants in Canadian natural gas hot spots changed hands Wednesday, when Enbridge Inc. sold field operations in northern British Columbia (BC) and Alberta for C$4.3 billion ($3.3 billion). The leader of the buyer consortium, Toronto-based Brookfield Infrastructure Partners, called the deal “an exciting opportunity to invest in scale in one of North America’s leading gas gathering and processing businesses based in Western Canada.” The asset package includes 3,350 kilometers (2,010 miles) of pipelines that supply 19 processing sites with 3.3 Bcf/d of raw liquids-rich natural gas from the Montney, Peace River Arch, Horn River and Liard geological formations. “The business is strategically positioned for the continued development of the prolific Montney Basin,” the richest and most active area in the acquired midstream service network, said Brookfield CEO Sam Pollock. Calgary-based Enbridge kept long-haul routes to markets from the northern gas-rich areas: the Westcoast conduits to southwestern BC and the northwestern United States, and an interest in the Alliance Pipeline to Chicago. Enbridge acquired the Westcoast system and allied northern field services in its mid-2016 takeover of Spectra Energy for US$28 billion. The asset sale was sought to repay takeover debt and clean up the corporate profile on investment markets. The deal raises Enbridge’s total asset sales so far this year to C$7.5 billion ($6 billion). 

     Canada becomes competitor to Gulf Coast petrochemical industry - Even a short drive east from Houston toward Baytown shows how the U.S. shale boom is transforming the Gulf Coast. Dense clusters of petrochemical plants, with their towering chemical reactors and mazes of pipes, line roads busy with semi-trucks hauling the goods needed to keep the industry running. Construction cranes promise more development to come.  Not so in Canada, where petrochemicals investments have slowed in recent years despite the country’s vast reserves of low-cost natural gas feedstock for plastics and other products. The reason is obvious: Compared to the Gulf Coast, Canada has limited port access, higher costs of building and carbon taxes in its four most populous provinces. But Canada is pushing to change that dynamic, vying to become more competitive with its neighbor at a time when U.S. trade policy and tariffs threaten to increase the cost of building and expanding Gulf Coast petrochemical plants. In June, the provincial government of Alberta offered petrochemical companies the chance to apply for a range of multi-million-dollar incentives to develop reserves of natural gas-derived chemical feedstocks — namely ethane, methane and propane — and process them into plastics and other materials. It was the latest in a series of incentive packages Alberta has offered to offset the higher costs of operating there. A recent analysis by research firm WoodMackenzie showed the push has already created new development opportunities in Canada, pitting it against the U.S., the Middle East and China in the race to build new plants. Last year, during an Alberta’s first incentive push, companies applied for assistance with 16 projects worth $20 billion.

    Campaigners call for fracking moratorium in former mining areas after new report reveals shale gas plans overlooked key geological data - Fracking companies have failed to use all available geological data when applying for planning permission, according to a report launched at Westminster this afternoon. The study, by a former Downing Street adviser, shows that historic coal mining data has been overlooked or ignored. It calls on planning committees to consider detailed maps of faults when deciding applications.  Anti-fracking campaigners have called for a moratorium on fracking in mining areas and a public investigation. The report’s author is Professor Peter Styles, a former President of the Geological Society of London and Head of Geology at Keele University. He established the link between fracking at Cuadrilla’s Preese Hall well and the Blackpool earthquakes of 2011. He also advised David Cameron on seismic regulation of fracking. He concluded:“It is critical that this high resolution, carefully mapped data set should be included in any planning process for unconventional oil and gas activities.”In an interview with DrillOrDrop last month, he warned of the risks of fracking near geological faults in former coal mining areas. The said the operation could trigger earthquakes and should not take place without assessment of all available geological data.He recommended a gap of 850m – described as a respect distance – between fracking wells and known faults. His report, launched this afternoon to MPs and peers at the Houses of Parliament, overlaid historic mining data from South Yorkshire and North East Derbyshire, where Ineos proposes to drill for shale gas, onto maps from the British Geological Survey (BGS), which show only major fault lines.

    Another Pre-Summit Dividend - No Sanctions On Nordstream 2 - I hate to say “I told you so,” but, “I told you so.”  There will be no sanctions on the Nordstream 2 pipeline.  The reason is because sanctions won’t stop the project at this point. Sputnik is reporting that the U.S. has told the German Economic Ministry there will be no sanctions on Russian pipeline projects. If true then this is an indication that we just about reached the peak of Trump’s full-court press on the economic health of the planet through financial control.   I’ve been steadfast in my position that sanctions are not only an act of war but also, ultimately, have limits. And once those limits are reached all that is left is the face-saving.  And since the first rule of being a politician is never back down no major policy can be reversed without a means to save face.Look at the situation Angela Merkel is facing in Germany.  She can’t cave on Nordstream 2 because she will look like a weak U.S. quisling (which she is).  She can’t reverse sanctions on Russia over Crimea because there has been no movement towards implementing the Minsk II accord.   And she can’t back down over her immigration policy because it would betray the people who put her in power — the Soros Set.Trump has used this to pressure her ruthlessly on trade issues and NATO funding.As for Trump, he’s not said much directly about Nordstream 2.  Members of his administration have, especially State Department Spokesperson Heather Nauert.   They are the ones who would have to eat crow over Nordstream 2, not Trump. Trump has made it clear he doesn’t like the project but I think that’s more about his desire to bring Germany low rather than stifle Russia.  The worry is that Germany, through Nordstream 2 and no more supply coming from Ukraine, would then control eastern European politics by having control of their gas supplies. This, I believe, is now the main focus for Poland in their fight to retain some semblance of sovereignty from the EU.  This is why Poland continues to overpay for Qatari and U.S. LNG as well as invest in a new pipeline from Norway. But, that said, Trump knows that Europe’s future gas market is big enough to ensure, if indirectly, a market for U.S. LNG.  So, Russia’s dominance in Europe is not something he can compete with in the long run.

    Gazprom boosts natural gas production to solidify top position in Europe - Gazprom increased gas production by 8.7 percent in the first half of 2018, compared to the same period last year, to 253 billion cubic meters. Exports to Europe increased by 5.8 percent to 101.2 billion cubic meters. Through June this year, Gazprom’s exports to Germany increased by 12.4 percent, to Austria – by 1.5 times, to the Netherlands – by almost 1.7 times, to France – by 13 percent, to Croatia – by 1.5 times. Supplies to Poland grew by 6.9 percent. Earlier, the head of Gazprom, Aleksey Miller, said that gas exports to Europe could reach a record 200 billion cubic meters this year. Miller also noted that LNG supplies from the United States will never substitute Russian fuel in Europe. “America will never catch up and will not overtake Russia in delivering LNG to the European market. The reason for this is that price and reliability of supplies are crucial for consumers,” and Gazprom is leading there, he said.

    The 1,600 olive trees holding up a $5.2 billion pipeline  - On a recent visit to a construction site near an olive grove along the coast of southern Italy, a reporter’s phone buzzed with an ominous text message: “We know you’re there.” The text came from one of the people fighting to stop the final construction of a 4.5 billion-euro ($5.2 billion) natural gas pipeline that’s designed to run right beneath the olive trees, an area farmed for centuries and now surrounded by barbed-wire fencing. They have been working in shifts, monitoring progress of a project meant to carry gas from the Caspian Sea and provide the cornerstone of a European Union plan to wean itself off Russian gas. Now their yearslong fight to block the Trans-Adriatic Pipeline, known as TAP, has been given a boost. The ministers in Italy’s new government have threatened to put the project under review, aligning more with the protesters than the companies working on the pipeline, including British oil giant BP Plc and Italy’s state-owned gas company, Snam SpA. The threats have thrown into question whether the final stretch will be ready by the planned 2020 deadline—or completed at all. The companies that invested in TAP and the larger pipeline it connects with could face billions in losses if the project is delayed, said Elchin Mammadov, a utilities analyst at Bloomberg Intelligence. “There is a 90% probability that it will not be ready,” he said. On Wednesday, the board of the London-based European Bank for Reconstruction and Development gave the project a vote of confidence, approving a loan of up to 500 million euros and saying the initial annual capacity of 10 billion cubic meters of natural gas would be enough for 7 million European households. What began as a squabble about olive groves has grown into a larger protest against globalization, a theme that courses through populist rhetoric.

    China keeps LNG off tariff list for now, could be trade weapon later (Reuters) - China’s omission of liquefied natural gas (LNG) from its vast list of U.S. products that face hefty import duties from Friday has preserved a potential weapon should the trade war with Washington deepen. It also underscores Beijing’s desire to ensure supplies of gas as it pushes to switch millions of households and businesses away from using coal as a key part of its ‘war on pollution’. China will on Friday impose tariffs on $34 billion of U.S. goods from pork to soybeans to cotton in retaliation for a similar move by Washington as trade relations sour between the world’s top two economies. “If the (trade) war escalates, (I expect) the government will not hesitate to add LNG,” a state oil and gas company executive said, declining to be identified due to the sensitivity of the issue. Although U.S. LNG supplies to China have so far been tiny in volume and value compared with the around $12 billion per year of U.S. crude that arrives in the country, analysts say those levels could be set to shoot up as Beijing forges ahead with its battle to clear its skies. Morgan Stanley has estimated annual Chinese imports of U.S. LNG could rise to as much as $9 billion within two or three years, from $1 billion in 2017. The amount could be even larger if the United States resolves a logistics bottleneck. That would go a long way to helping balance China’s trade surplus with the United States, a major bugbear of Washington’s in the trade dispute. But the strategy also hands Beijing another weapon in its arsenal if the spat deteriorates further. China’s Commerce Ministry did not immediately respond to requests for comment. FILE PHOTO: A Sinopec worker walks past liquified natural gas (LNG) storage tanks at Sinopec's LNG terminal in Tianjin, China February 6, 2018. REUTERS/Stringer/File PhotoHowever, some industry sources said the country would feel the impact of any increased tariffs on U.S. LNG, as there are a limited number of major alternative suppliers. 

    Ghost ships no more: Explorers resume oil, gas search as prices perk up (Reuters) - A growing fleet of ships is scanning oceans in search of new oil and gas fields as energy companies, now with more cash thanks to stronger crude prices, gradually resume spending on seismic services after a four-year downturn. A doubling in the area contracted for seismic work in the first quarter this year from the last three months of 2017 has injected optimism into surveillance firms, with a global fleet of about 24 vessels, most of whom struggled to survive in the past years. But they say the road to recovery remains bumpy with producers big and small not keen on drilling for new reserves unless oil prices, which have more than doubled from 2016 lows, stay high for at least a year. Still, with crude prices stabilizing well above $60 a barrel in the past six months, companies including mid- and small-sized independents such as Woodside Petroleum, Kosmos Energy and Tullow Oil have helped boost demand for surveillance. The total area tendered by upstream companies for seismic work doubled to 40,000 square kilometres in the first quarter this year from October-December last year, said Duncan Eley, chief executive officer at Polarcus, which owns a seismic fleet. “That’s positive in isolation,” said Eley, keeping his optimism in check even as he pointed to a busy fourth quarter for geophysical work in Asia Pacific, particularly for gas with demand forecast to soar in coming decades. Gas projects in Myanmar could take two to three vessels from the global fleet, while there are also potential activities in Malaysia, Australia, India and Papua New Guinea, where Exxon Mobil and Total plan to feed more gas into their existing liquefied natural gas infrastructure, Eley said. That marks a stark change from the dark days of 2015 and 2016 when orders for geophysical survey work came to a grinding halt as oil prices plummeted from over $100 a barrel to less than $50. Petroleum Geo Services (PGS), the world’s largest seismic operator, was also seeing better opportunities now than last year. “The recent increases we’ve seen are primarily driven by Africa and Brazil when it comes to bidding for contract work,” said Bård Stenberg, PGS’ senior vice president for investor relations and communication. 

    Venezuela Says China Investing $250 Million to Boost Oil Output - Venezuela’s distressed oil sector may get some much needed financing from China, Finance Minister Simon Zerpa said after meetings with officials from China Development Bank and China National Petroleum Corporation. China Development Bank will invest more than $250 million to boost Venezuela oil production in the Orinoco Belt, Zerpa, who is currently in Beijing for bilateral talks, said in a ministry statement. “We’ve received the authorization for a direct investment of more than $250 million from China Development Bank to increase PDVSA production, and we’re already putting together financing for a special loan that China’s government is granting Venezuela for $5 billion for direct investments in production,” Zerpa said. The two countries will sign an additional three or four financing deals in the coming weeks, he said.Venezuela’s oil output averaged 2.9 million barrels a day in 2013, when President Nicolas Maduro was first elected. In June, output dropped to around 1.36 million barrels per day, according to International Energy Agency data. State oil company PDVSA has been struggling to send oil shipments to China after a legal order granted to ConocoPhillips froze its assets in Caribbean ports and terminals.Maduro has vowed to boost production by 1 million additional barrels, while critics say output will plummet to 1 million barrels a day by the end of 2018. Venezuela and China officials will continue meetings Wednesday, the ministry said in its statement. Zerpa, who has served in the post since October, was sanctioned by the U.S. Treasury Department before his appointment.

     Turkey Defies Trump, Will Keep Importing Iranian Crude - Defying the Trump administration, Turkey said it would ignore the State Department’s call on US allies to stop importing Iranian crude oil by November 4, when the latest sanctions against Iran are set to kick in. Earlier this week, the State Department called on all US allies to completely stop buying Iranian crude, sending the price of oil to 4 year highs in the process. While many are trying to find a way around the sanctions, it is for now proving tricky, and many buyers are winding down their purchases of Iranian crude.But not Turkey."The decisions taken by the United States on this issue are not binding for us. Of course, we will follow the United Nations on its decision. Other than this, we will only follow our own national interests,” Turkey’s Economy Minister Nihat Zeybekci said according to Turkish daily Hurriyet, adding that “we will pay attention so our friend Iran will not face any unfair actions." Turkey is hardly alone in its defiance: oil importers including Japan, South Korea, and India, as well as European countries have said they will continue buying Iranian crude, although whether they will really do that remains to be seen - French oil giant Total has already stopped purchasing Iranian products.The European Union is particularly concerned about the situation because not only because it relies on substantial Iranian imports, but because there is only so much that the three European signatories to the Iran nuclear deal could do to prevent Tehran from exiting it, which might happen if it stops seeing benefits from it, President Hassan Rouhani said.

    Turkey And India Have Leverage In Trump's Iran Sanction War - Both India and Turkey have said they will defy President Trump’s call for them to stop buying Iranian oil once the U.S. reapplies sanctions in November. That isn’t really news. Both of them defied the Obama administration in 2012, albeit in different way. Turkey changed its banking rules to monetize gold and used its gold reserves as a means to launder Iranian oil payments for third parties through its banking system. India bypassed cutting off Iran from the U.S. dollar by beginning a goods-for-oil swap program. Today, however, the geopolitical background is far different. Today, Iran can and does list its oil for sale in Shanghai’s futures market payable in Chinese Yuan. Turkey can recycle its Yuan it receives from its large trade deficit with China to up its purchases of Iranian oil if need be. But, more importantly, both India and Turkey have geopolitical freedoms they didn’t have in 2012. I have covered the Turkey angle on this at length. India, on the other hand, I haven’t. Iran has become Turkey’s biggest oil importer. Turkey, a NATO ally, is dependent on imports for almost all of its energy needs. In the first four months of this year, Turkey bought 3.077 million tons of crude oil from Iran, almost 55 percent of its total crude supplies, according to data from Turkey’s Energy Market Regulatory Agency (EPDK). President Recep Tayyip Erdoğan last year said Turkey was looking to raise the volume of its annual trade with Iran to $30 billion from $10 billion. And it doesn’t look like this will change with Trump’s sanctions.

    How The Iran Sanctions Drama Intersects With OPEC-Plus - Major states buying oil from Iran are unlikely to heed the US call to drop imports; key allies want a waiver to avoid sanctions; OPEC, meanwhile, will have trouble boosting output in the short-term; the puzzle is not solved, but there are dark clouds... History may have registered stranger geoeconomic bedfellows. But in the current OPEC-plus world, the rules of the game are now de facto controlled by OPEC powerhouse Saudi Arabia in concert with non-OPEC Russia. Russia may even join OPEC as an associate member. There’s a key clause in the bilateral Riyadh-Moscow agreement stipulating that joint interventions to raise or lower oil production now are the new norm. Some major OPEC members are not exactly pleased. At the recent meeting in Vienna, three member states – Iran, Iraq and Venezuela – tried, but did not manage to veto the drive for increased production. Venezuela’s production is actually declining. Iran, facing a tacit US declaration of economic war, is hard-pressed to increase production. And Iraq’s will need time to boost output. Goldman Sachs insists: “The oil market remains in deficit… requiring higher core OPEC and Russia production to avoid a stock-out by year-end.” Goldman Sachs expects production by OPEC and Russia to rise by 1.3 million barrels a day by the end of 2019. Persian Gulf traders have told Asia Times that’s unrealistic: “Goldman Sachs does not have the figures to assert the capability of Russia and Saudi Arabia to produce so much oil. At most, that would be a million barrels a day. And it is doubtful Russia will seek to damage Iran even if they had the capacity.” In theory, Russia and Iran, both under US sanctions, coordinate their energy policy. Both are interested in countering the US shale industry. Top energy analysts consider that only with oil at $100 a barrel will fracking become highly profitable. And oil and gas generated via fracked in the US is a short-term thing; it will largely be exhausted in 15 years. Moreover, the real story may be that shale oil is, in the end, nothing but a Ponzi scheme.  Yet the game drastically changes when Venezuela loses a million barrels a day in production and Iran, under upcoming sanctions, may lose another million. As Asia Times has reported, OPEC (plus Russia) can at best increase their production by 1 million barrels a day.

    New Unrest Roils Iran as U.S. Ramps Up Pressure – WSJ -- Spreading unrest in Iran raises the prospect of broader antigovernment protests as the political leadership in Tehran faces mounting pressure from a Trump administration effort to cut the country’s oil sales.  Hundreds of people took to the streets in the southwestern city of Khorramshahr over the weekend in a demonstration prompted by anger at dirty drinking water that turned into an expression of broader grievances against the government in Tehran. The upheaval came after thousands of people swarmed Tehran’s Grand Bazaar last week, as the government of Iranian President Hassan Rouhani struggles to deal with soaring unemployment, a collapsing currency and other economic woes. Businesses in the bazaar shut down for days. In Khorramshahr, a video shared Friday on social media showed large crowds chanting “Death to Rouhani.” Other videos that purported to capture the events of the weekend showed people clashing with security forces and setting fires in the street. What appeared to be gunfire could be heard in the background of some. The videos couldn’t be independently verified.  An Iranian interior ministry official said 10 police officers were injured in clashes on Saturday. Iranian authorities said no one had died.

    US eases off of Iran oil ultimatum: Update - The US administration today backed away from its earlier insistence that countries eliminate all crude purchases from Iran by 4 November.  Officials had pledged to target countries that fail to reduce their oil purchases from Iran to zero within four months. But today the State Department said the US will consider granting some waivers to the sanctions on Iranian crude sales. "Our focus is on getting as many countries importing Iranian crude down to zero as quickly as possible," State Department policy planning chief Brian Hook said. "We are not looking to grant licenses and waivers broadly, but we are prepared to work with countries that are reducing their imports on a case by case basis."Confusing messages last week from the US administration on the intensity of Iran sanctions have upended global oil markets. A background briefing by the State Department on 26 June, ruling out the possibility of waivers from the US' sanctions on Iran that go into effect on 4 November, sparked a surge in oil futures prices — something Washington has been at pains to avoid.Today's briefing seemed an attempt at damage control. "Our goal with respect to the energy sanctions is to increase pressure on the Iranian regime by reducing to zero its revenue from crude oil sales," Hook said. "We are working to minimize disruptions to the global oil markets. We are confident there is sufficient spare global oil production capacity." US law requires there be sufficient production capacity as a prerequisite for enforcing sanctions on Iran's oil sector. The White House in May, following President Donald Trump's decision to reimpose sanctions on Iran, informedCongress that enough crude supply is available globally to enable buyers of Iranian crude to significantly reduce imports from that country.

    Saudis agree to boost output by 2mn b/d: Trump -- US president Donald Trump says he has extracted a pledge from Saudi Arabia's King Salman bin Abdel-Aziz to boost that country's oil output by up to 2mn b/d to make up for Iranian and Venezuelan production losses.Trump made the announcement via Twitter. "Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction (sic) in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference...Prices to (sic) high! He has agreed!"The Saudi version of the conversation, relayed via the official Saudi Press Agency, said that the leaders "stressed the need to make efforts to maintain the stability of oil markets, the growth of the global economy, and the efforts of producing countries to compensate for any potential shortage of supplies."Global oil markets have been upended by the US insistence earlier this week that foreign buyers of Iranian crude eliminate their imports from that country - about 2.39mn b/d in May - by November as Washington enforces sanctions on Tehran. The timing coincides with the midterm congressional election in the US, with Republicans defending their control of both the House of Representatives and the Senate.  Saudi Arabia already was preparing to boost its production to 10.8mn b/d in July, an increase of nearly 800,000 b/d from May, as assessed by Argus. That target level already would have marked record high Saudi output. An agreement to boost output by 2mn b/d would, theoretically, take Saudi production to 12mn b/d - a level cutting close to the Saudi-claimed production capacity of 12.5mn b/d. Separately, Russia is preparing to increase production by 200,000 b/d.

    Oil Tumbles After Al Jazeera Reports Saudis Agree To Trump Demand To Pump More Oil - With oil rising to the highest price since November 2014 less than an hour ago, with WTI hitting $75, oil suddenly tumbled on what appeared to be no news, prompting traders to ask if the US had sold even more oil from the SPR.It turns out the reason is to be found in an article published moments ago by Al Jazeera, according to which the Saudis "have agreed to US demands to pump more oil", and which quoted the official Saudi Press Agency that Saudi Arabia's cabinet on Tuesday "endorsed the kindgdom's readiness to pump more oil to maintain market balance and stability.""The kingdom is prepared to utilise its spare production capacity when necessary to deal with any future changes in the levels of supply and demand," a cabinet statement said, following a meeting chaired by King Salman.Some more details from the Al Jazeera report:US President Donald Trump on Saturday said Saudi Arabia's King Salman had agreed to his request to increase oil output "maybe up to" two million barrels. Trump said the agreement was reached after a phone call with the Saudi King about oil production but mentioned no specifics.Both leaders also discussed "efforts by the oil-producing countries to compensate for any potential shortage in supplies," SPA reported.  Trump's claim comes after the Organization of the Petroleum Exporting Countries (OPEC), a grouping of oil-producing states that includes Saudi Arabia, already agreed to ramp up production by a million barrels a day at a meeting earlier this month. If the Saudis are indeed prepared to cave to Trump, it creates an existential threat to OPEC which may see Iran and other members quit immediately, if Riyadh has made a unilateral decision to pump more. Iran's OPEC governor, Hossein Kazempour Ardebili, accused the United States and Saudi Arabia of trying to push up oil prices and said both countries are acting against the foundation of OPEC.

    White House, Saudi Arabia Pour Cold Water On Trump's "Saudi Deal" - On Saturday morning, president Trump triumphantly tweeted that following a phone call with the Saudi King, OPEC's largest producer had conceded and in defiance of the OPEC agreement reached just last week, had agreed to pump as much as 2 million barrels of oil extra in an attempt to lower prices:“Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference ... Prices to high! He has agreed!”However, subsequent remarks by both the White House and Saudi Arabia via Reuters curbed Trump's enthusiasm. In a statement issued by the White House late on Saturday, it said that the White House said that the Saudi king had promised President Donald Trump that he can raise oil production if needed and the country has 2 million barrels per day of spare capacity."King Salman affirmed that the Kingdom maintains a two million barrel per day spare capacity, which it will prudently use if and when necessary to ensure market balance."No guarantees, no promises, just a vague reference to what many believe is peak, or even beyond, Saudi oil production.As a reminder, Trump's comments came just one week after Saudi Arabia along with the rest of OPEC nations including Russia had agreed on June 22 to boost production by a combined 700,000 to 1  million barrels a day, so any 2 million bpd-increase would be at least double market expectations, prompting a furious backlash from the likes of Iran. According to a Bloomberg report last week, Saudi Arabia would shoulder the bulk of this excess production, boosting output by a little under 1mmb/d to a record high 10.8mmb/d from the current 10mmb/d pace.

    Saudi Crude Oil Production -- Summer -- Part 2 -- June 30, 2018 --Yesterday I mentioned that we were going to start seeing a lot of stories on increased crude oil production by Saudi Arabia. In anticipation of that, I posted part 1 of a 2-part series on this subject. This is part 2. Observations / data points:

    • there's a huge difference between production and exports
    • right now, both President Trump and Saudi Arabia are talking about production, not exports
    • US refiners are operating flat out, as fast as they can, operating at 97%+ capacity
    • there's already a 65-day global supply of crude oil; compare to about 23 days for the US; how much more oil does the world need
    • right now there are four BP supertankers floating off the shore of China; oilprice opines that China teapots are unable to come up with the cash for these 8 million bbls of oil
    • many years ago, on the blog, I clearly stated that I doubted the Saudis could significantly increase crude oil exports
    • Saudi always increases production in the summer: they use crude oil to generate electricity for air conditioning and the hottest Arabian days are yet to come; see this post from June, 2015
    • we're not quite there yet, but since 2015, there has been a huge course correction in Saudi's strategic plan; Prince Salman will increase domestic consumption by huge amounts for new petrochemical operations and refineries -- see the Prince Salman plan linked at the sidebar at the right;
    • the Saudi Aramco IPO continues to be delayed, probably for any number of reasons, not least of which Prince Salman said he needed $100-oil to launch that IPO; that was two years ago; we're still nowhere close to $100-oil, though we are moving in that direction

    OPEC oil output climbs in June as Saudi opens taps: Reuters survey (Reuters) - OPEC oil output rose last month as Saudi Arabia pumped at a near-record rate, a Reuters survey found on Monday, a sign the world’s top exporter is heeding calls from the United States and other consumers for more oil. The Organization of the Petroleum Exporting Countries pumped 32.32 million barrels per day in June, the survey found, up 320,000 bpd from May. The June total is the highest since January 2018, according to Reuters surveys. Saudi Arabia’s move comes as U.S. President Donald Trump has been urging Riyadh to offset losses caused by new U.S. sanctions on Iran and to dampen prices, which this year hit $80 a barrel for the first time since 2014. OPEC and a group of non-OPEC countries agreed last month to return to 100 percent compliance with oil output cuts that began in January 2017, after months of underproduction by Venezuela and other countries pushed adherence above 160 percent. “We are entering the second half of the year with a huge amount of uncertainty surrounding the supply side of the equation,” said Tamas Varga of oil broker PVM. “Depending on your belief you could just as easily bet on $100 as $60 by the end of the year.” Saudi Arabia said the OPEC decision would translate into an output rise of about 1 million bpd, although the group’s statement gave no clear volume. A Reuters survey published on Friday showed Saudi Arabia had boosted supply to 10.70 million bpd in June, close to the record high of 10.72 million bpd, to make up shortfalls in Venezuela and other countries, and expected losses in Iran. This has lowered OPEC’s collective adherence with supply targets to 110 percent from 167 percent in May, meaning the group is still cutting more than agreed even after the Saudi increase. The Saudi supply boost, apparently set in train before OPEC met in Vienna on June 22 to discuss policy, has infuriated Iran and surprised some other OPEC members with its scale. Saudi Arabia’s Gulf allies, Kuwait and the United Arab Emirates, have yet to follow the Saudi lead, keeping output steady in June, the survey found. 

    Why Trump is pressing Saudi Arabia to lower oil prices: Kemp (Reuters) - The United States and Saudi Arabia appear to have reached an understanding: Washington will reduce or eliminate Iran’s oil export revenues and in return Riyadh will guarantee oil supplies and stabilise prices. The basic deal is well understood by policymakers in both countries, with U.S. President Donald Trump repeatedly emphasising his great personal relationship with the Saudi king and crown prince. But strong personal relationships between the leaders and agreement on the overall deal obscure disagreement on some key details, not least the desirable level for oil prices. Saudi Arabia and its allies believe prices should be stabilised around $75 a barrel. Trump, meanwhile, clearly thinks they should be stabilised at a significantly lower level. Trump made the link between Iran sanctions and Saudi production policy explicit in a television interview with Fox News on July 1. The United States will counter the influence of Iran, Saudi Arabia’s major regional rival, by imposing tough sanctions. In return Saudi Arabia will protect U.S. motorists against an increase in gasoline prices.   “We are protecting those countries, many of those countries,” he said. In a follow-up Twitter message on July 4, the president said that “the United States defends many of those countries for very little $’s”. U.S. and Saudi objectives are not fully aligned, however, on oil prices. Saudi Arabia’s objective, revealed at the OPEC meeting in June, has been to stabilise production and prices around current levels. Trump, however, is not satisfied with either the current level of oil prices or the announced production increase. “They have to put out another 2 million barrels in my opinion,” he said in the July 1 Fox interview. 

    Saudi Spare Capacity Back in Market Spotlight  With collapsing Venezuelan output, Iranian barrels at risk from US sanctions and other geopolitical disruptions potentially on the horizon, Saudi Arabia has assured nervous oil markets that it is waiting in the wings to help address any runaway supply shortfall. But is this easier said than done for Opec's de facto kingpin? Political considerations aside, the kingdom has the technical capability to bring on an additional 2.25 million barrels per day of domestic supply and a further 250,000 b/d if its spat with Kuwait in the shared Neutral Zone is resolved. How quickly this capacity can be brought into production -- and at what cost to its fields -- is another matter. Saudi Arabia's production is holding around 10 million b/d, down some 500,000 b/d as a result of its pledge to the Opec/non-Opec production cut agreement. While returning to its pre-alliance levels would give the market a quick fix that could offset much of the near-700,000 b/d Energy Intelligence estimates could come off line just from Iran by mid-2019, running much above 10.7 million b/d presents complications. When Saudi Arabia ran at such record levels in the recent past, Saudi industry sources told PIW it was a costly endeavor that strained its fields. Pushing output to full capacity would take months to implement and risk exhausting the kingdom's fields if done for any extended length of time (PIW Aug.21'17). To potentially make this spare capacity less taxing to tap and more responsive, Saudi Aramco is prioritizing upstream investments that will significantly expand its offshore output even as its overall production capacity remains at 12.5 million b/d. The kingdom is also exploring international acquisitions in gas and LNG to free up crude barrels burned for power generation in the heat of the summer (PIW Feb.12'18). With more than half of its $300 billion spending program over the next decade headed offshore, the kingdom expects production from its three flagship developments, Marjan, Barri and Zuluf, will grow from 1.35 million b/d currently to 2.5 million b/d by 2022-23, offsetting declines at older onshore fields (PIW Aug.14'17). Aramco has already started rolling out tenders for several offshore field expansions, including Marjan and Barri, with awards expected by early 2019, industry sources say.

    Opec's Shrinking Spare Capacity Raises Risks -- Mounting concern over future production declines led by Venezuela and Iran has flipped the oil market's focus from tightening inventory levels to global spare capacity. To be sure, a severe supply crunch is not expected soon, as US output alone is able to meet the bulk of demand growth this year. But with spare capacity additions often needing significant investments and long lead times, the world will have to lean on its current production cushion for some time. And the picture is bleak. How much spare capacity is out there and how quickly it can come on stream are untested and far from certain. What is clear, however, is that the oil market is far less robust than it was before the downturn. Compared with five years ago, Opec's effective spare capacity is down some 1 million barrels per day, PIW estimates. PIW calculates that effective global spare capacity has shrunk 17% since 2013 to 3.55 million barrels per day, but even this risks presenting too rosy a scene. Less than one-third of that capacity fits the International Energy Agency's (IEA's) technical definition of spare capacity -- namely, output that can be turned on within one month. What spare capacity does exist remains highly concentrated, with roughly 70% of the cushion residing in just one country: Saudi Arabia (see table). Although the kingdom has long been the world's key purveyor of spare capacity, Riyadh is not keen to bear too much of the burden given that surging to full capacity quickly could damage its reservoirs. Reaching its full 12.5 million b/d capacity would likely take more than a year to achieve, and it is only with the expansions of its Marjan, Berri and Zuluf fields that Riyadh is likely to feel comfortable doing so (PIW May28'18). Those expansions will not be completed until 2022-23. The spread of spare capacity is more balanced under the IEA's month-long definition, with Saudi Arabia able to bring on some 400,000 b/d, and Kuwait, the United Arab Emirates and Russia contributing roughly 300,000 b/d apiece.  If new members Gabon and Equatorial Guinea are removed, Opec's group productive capacity has fallen some 800,000 b/d over the past five years, whereas global oil demand has risen by some 10 million b/d.

    Saudi-Kuwait neutral zone's Khafji oil field to be restarted in 2019: Toyo— The Khafji oil field in the Partitioned Neutral Zone shared by SaudiArabia and Kuwait is being prepared to restart production in 2019, Japan'sToyo Engineering said Monday. Toyo has agreed to a third renewal of its general engineering servicesagreement, originally signed in 2002, with Al-Khafji Joint Operations,operator of the Khafji and Hout oil fields located in the neutral zone, itsaid. KJO is owned 50:50 by Aramco Gulf Operations Co. and Kuwait Gulf Oil Co. Under the GESA, which will remain valid until 2023, Toyo said it willsupport KJO on the project planning feasibility study, FEED and technicalsupport for operations of the oil fields. "Maximum oil production rate of the fields is 350,000 b/d," Toyo said."Because of oil price recovery, KJO starts the preparation work tore-produce the oil from the fields from 2019," it added. Kuwait oil minister Bakheet al-Rashidi told the Kuwaiti National Assemblyon June 26 that production had been stopped in the offshore Khafji andonshore Wafra fields for "technical" reasons, and would restart as soon as anagreement with Saudi Arabia was reached. "We are working with the Saudi side to address these technical reasonsand soon we will return to production," Rashidi was quoted as saying by theKuwait News Agency. Operator Saudi Aramco unilaterally shut production from the 300,000 b/dKhafji field in October 2014, citing new government emission standards for gasflaring. The onshore Wafra field, operated by KGOC and Saudi Arabian Chevron,stopped pumping in May 2015. Sources in Kuwait, however, told S&P Global Platts earlier thatfacilities at both fields have been mothballed, so restarts at the fieldscould take months.

    Russian oil output up by 100,000 bpd in June as production curbs eased (Reuters) - Russian average monthly oil output exceeded 11 million barrels per day (bpd) in June for the first time since April 2017 as leading global oil producers started to ease output curbs, Energy Ministry data showed on Monday. Production rose to 11.06 million bpd in June from 10.97 million bpd in May, up around 100,000 bpd. In tonnes, Russian oil output was 45.276 million versus 46.377 million in May. The Organization of the Petroleum Exporting Countries and some other leading global oil producers led by Russia agreed last month to return to 100 percent compliance with previously agreed oil output cuts, after months of underproduction by some OPEC countries. Russia has pledged to restore output by 200,000 bpd in the second half of the year. The country's largest oil producer Rosneft led the output increase, ratcheting up extraction by 1.6 percent last month to 3.89 million bpd, the data showed. The energy ministry's data does not include some of Rosneft's joint ventures. Top oil exporter Saudi Arabia also boosted supply to 10.70 million barrels per day in June, close to a record high. The deal, which has been in place since early 2017, was aimed at smoothing out bloated global oil stockpiles and supporting oil price. Initially, Russia said it would cut its production by 300,000 bpd from a record-high level of 11.247 million bpd reached in October 2016, the baseline for the current global deal which expires by the end of the year. For the first half of the year, Russian oil output declined by 0.4 percent to 271.1 million tonnes year-on-year. 

    Russia Takes Outsize Role in Boosting Oil Supply – WSJ —Russian oil companies are priming the pumps to significantly boost crude output this summer, taking on an unusually important role in a global effort to keep prices in check. Alongside Saudi Arabia, Russia is one of just a few countries that can quickly ramp up production, a capability that could help a group of big producers—who agreed in late June to boost output—as they try to cool a sizzling global oil market. About 18 months after the Saudi-led Organization of the Petroleum Exporting Countries began limiting supply amid lower prices, the group has the opposite problem. Stored inventories of crude have fallen, demand is strong and supply has been disrupted in Iran, Venezuela and Libya. That has all conspired to send prices sharply higher. .U.S. crude hit 3½-year highs last week. On Saturday, President Donald Trump called on Saudi Arabia to boost production to help meet the world’s needs. Russia joined last month with OPEC in agreeing to open the taps, and was already inching its output upward. It produced 10.97 million barrels a day in May, according to the Russian energy ministry, about 60,000 barrels a day above the level that it agreed to in 2016, when it joined OPEC in the deal to reduce supply to boost prices. OPEC and 10 other oil producers agreed on June 22 to boost output by one million barrels a day, most of which analysts expect will come from Saudi Arabia and Russia. The countries have yet to decide how the quotas will be distributed. Russian Energy Minister Alexander Novak has said the country hopes to expand output by 200,000 barrels a day, clawing back two-thirds of what it initially agreed to cut back in 2016. Estimates of what it might be able to deliver on top of that vary. Goldman Sachs forecasts Russia’s overall spare capacity—essentially idle fields that can be turned on quickly—at about 500,000 barrels a day. The big question is how quickly Russia can get that to world markets. In Saudi Arabia, a single, state-run company pumps all the oil, allowing it to be more nimble in crises. Not so in Russia, where the industry is fragmented among state and private firms. 

    The New Oil Cartel Threatening OPEC -- When reports emerged that India and China are in talks about forming an oil buyers’ club, OPEC was probably too busy with its upcoming June 22 meeting to concern itself with that dangerous alliance. Now, it may be time for it to start worrying.“The timing is right. The boom in U.S. oil and gas production gives us greater leverage against OPEC,” the Times of India quoted an Indian official as saying last month after the formal start of said talks. The two countries, after all, account for a combined 17 percent of global oil consumption and they are the ones that would be the hardest hit if prices rise as a result of OPEC’s actions.What’s more, they might not be alone in this attempt to curb OPEC’s clout on the global oil market. According to Bloomberg’s Carl Pope, Europe and Japan, previously reluctant to take part in any anti-OPEC projects, may now join in. The reason they are likely to join in is that unlike in previous oil price cycles, now there are alternatives to fossil fuels. Electrification is where OPEC may have to face off with a future oil buyers’ cartel. India, China, and Europe are all very big on EV adoption. Japan is a leader in battery manufacturing.If they set their minds to it, these four players could upend the oil market and effectively cripple OPEC.  A recent survey suggested that as many as 90 percent of Indian drivers were willing to switch to EVs if the government built the necessary charging infrastructure, reduced road taxes, and increased subsidies. Another survey identified price and range as additional roadblocks towards the mass adoption of EVs in India. Because of these challenges, New Delhi recently amended its ambitious goal of having an all-EV fleet on the roads of the country by 2030 to having 30 percent of the fleet electric. China, for its part, is the undisputed leader in global EV adoption: the country accounted for more than 50 percent of global EV sales last year in case you were thinking, “Wait, wasn’t that Norway?” However, this was in large part made possible by generous government subsidies for EV manufacturing. These subsidies are due to be wound downto 0 by 2020, and carmakers are already beginning to brace for a future without the support of the state. It’s safe to say it remains uncertain if the EV boom will continue after 2020.

    Crude oil is sizzling; WTI price may hit $78 in the short term - Crude oil is turning into a hot commodity as prices are soaring on falling inventories and the Trump administration's warning to companies to cease buying Iranian oil. Oil prices traded lower in the first half of June, which was followed by huge gains in the second half. This month was a period of erratic global politics that injected a considerable amount of volatility and the stage is set for further geopolitical confrontation. Last month, OPEC oil ministers reached a deal to raise production quotas to add 600,000–800,000 barrels a day, effectively returning a third of the barrels that have been withheld since January 2017. OPEC ministers have agreed to a nominal production increase of a million barrels a day to be divided between cartel members and non-OPEC partners, including Russia, which together cut production last year by about 1.8 million barrels a day. That decrease eliminated inventories in developed countries by about 340 million barrels and returned total inventories to around their five-year average. The Saudis appear to have emerged as the winners from last week's meeting of OPEC, and the subsequent talks between OPEC and its allies in the deal to restrict output. The outcome of meetings seems to indicate that crude oil supply should rise by as much as 1 million bpd.

    American "Consumers Held Captive" As WTI Crude Tops $75, Gas Prices Highest Since Nov '14 - For the first time since Nov 2014, WTI Crude futures front-month contract has topped $75.   All of which means Trump better get back on the phone and ask for 3mm b/d from the Saudis as Americans are about to face a huge tax rise as gas prices at the pump are high and about to get higher...As RBC analyst Michael Tran writes in a report today, "retail gasoline is pricing the highest in years, but demand remains relatively firm, " because consumers are "held captive to the type of vehicle owned."This ensures that gasoline demand is less "price-elastic" than in previous comparable periods, but leaves the disposable income taking a bigger hit. And as OilPrice.com's Robert Rapier notes, the irony of this huge rally is that it was sparked by the announcement by OPEC that it would increase production.Oil prices had weakened over the past month following a call from President Trump for OPEC to increase production in response to rising oil prices. After rising above $70 per barrel in May, the price of West Texas Intermediate (WTI) had dropped back to $65/barrel leading up to OPEC’s June 22nd meeting.It was widely anticipated that the group would decide to bump output at the meeting. At the meeting’s conclusion, OPEC, in agreement with Russia, announced that it would increase production for the first time since implementing production cuts in November 2016.But WTI rallied by more than 4% following the announcement. Why? Because the market was underwhelmed by OPEC’s decision.

    U.S. oil prices slip, but global prices sink as traders fret over potential for higher output --U.S. oil prices slipped on Monday marked a modest decline, finding some support from crude export disruptions in Libya and recent data showing tighter U.S. supplies. Brent prices, however, suffered a sharp loss as traders weighed expectations for higher global output. Crude had seen even sharper losses in early trading, stemming from a weekend tweet from President Donald Trump that talked about a big potential production increase from Saudi Arabia.  August West Texas Intermediate crude on the New York Mercantile Exchange fell by 21 cents, or 0.3%, to settle at $73.94 a barrel, after trading as low as $72.51. September Brent dropped $1.93, or 2.4%, to $77.30 a barrel.Last week’s surge to fresh 3 1/2-year highs for the U.S. benchmark, which contributed to strong monthly, quarterly and first-half 2018 gains, was somewhat disconcerting, said Barnabas Gan, an economist at Overseas-Chinese Bank. He added that the language in Trump’s weekend tweet—which suggested that Saudi Arabia may increase output by 2 million barrels a day—left scope for wide interpretation. Donald J. Trump @realDonaldTrump: Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference...Prices to high! He has agreed! A senior Saudi Arabia official told The Wall Street Journal on Saturday that no specific promise had been made over production, but rather assurances were given that the country had the capacity to meet demand. A White House statement released that same evening backed off that tweet from Trump, according to reports. It said King Salman of Saudi Arabia had told the president that his country would increase oil production “maybe up to 2,000,000 barrels.” Saudi Arabia, OPEC’s swing producer, and Russia reached an agreement at a closely watched Vienna meeting last weekend to raise output less aggressively than had been anticipated.

    Libya Stops Pumping Oil - Libya’s National Oil Corporation has declared force majeure on crude oil loadings from two oil terminals, which effectively removed 850,000 bpd from the country’s production, Libyan media report. “Despite our warning of the consequences and attempts to reason with the LNA General Command, two legitimate allocations were blocked from loading at Hariga and Zueitina this weekend. The storage tanks are full and production will now go offline,” NOC’s chairman Mustafa Sanalla said.Hariga and Zueitina, like the rest of the terminals in the Oil Crescent, are controlled by the Libyan National Army, which handed control over them to the Benghazi-based NOC. Both are affiliated with the eastern government, which is not recognized by the UN.On Saturday, the Benghazi-based NOC refused two loadings, one at Zuetina and one at Hariga, claiming the tankers waiting to load had not asked for its approval, which was now mandatory.The LNA has controlled the Oil Crescent ports since 2016, but last month its grip on them was challenged by other groups led by a Petroleum Facilities Guard commander who is wanted by the Tripoli authorities for the two-year blockade of the ports. Yet unlike in 2016, when it handed the ports to the Tripoli-based NOC, the LNA now passed control of the facilities to the Benghazi NOC, signaling that the divide in Libya between East and West is deepening instead of closing.

    OPEC Losing Control After Libya Outages - Oil prices surged in early trading on Tuesday as the supply outages in Libya began to take center stage, but Saudi Arabia and Russia quickly moved to calm markets. The loss of 850,000 bpd nearly offsets all of what OPEC+ plans on adding to the market, although it remains to be seen how high Saudi Arabia plans on going unilaterally. For now, the oil market is looking tighter by the day, and Brent is within striking distance of $80 per barrel.. Saudi Arabia ramped up production in June ahead of the OPEC+ meeting, pushing the group’s overall output to 32.32 million barrels per day (mb/d), according to Reuters, an increase of 320,000 bpd from May. That puts OPEC’s production level at its highest point since January 2018. The increase came from a massive increase in production from Saudi Arabia, which pushed output close to a record high at 10.70 mb/d. The enormous increase of from May levels from Saudi Arabia was offset by outages in Libya and declines in Venezuela. “We are entering the second half of the year with a huge amount of uncertainty surrounding the supply side of the equation,” Tamas Varga of oil broker PVM, told Reuters. “Depending on your belief you could just as easily bet on $100 as $60 by the end of the year.”  Over the weekend President Trump tweeted that OPEC would add 2 mb/d of new supply, a statement that confused the oil market. The White House had to walk back that comment, issuing a statement that said that the Saudi King merely told Trump that there was 2 mb/d of spare capacity that could be called upon if needed. Nevertheless, Trump’s tweet led to a dip in oil prices on Monday as traders tried to figure out if Saudi Arabia planned on adding more oil than expected. In early trading on Tuesday, however, it seemed that expectations of a wave of supply subsided, with traders refocusing on the outages in Libya and Canada. WTI and Brent jumped more than 1 percent in early trading before falling back again.

    Oil settles higher in volatile pre-holiday session (Reuters) - Crude prices ended slightly higher on Tuesday after a volatile session in which the U.S. benchmark passed $75 a barrel for the first time in more than three years before turning negative and later recouping its losses. Oil rallied early in the session on supply concerns, then slid as traders booked profits ahead of the July Fourth holiday in the United States, and bet that global supply shortages would not persist as long as expected. Crude pared its losses late in the session, turning positive on market sentiment that supply disruptions would not resolve faster than previously expected. U.S. light crude settled up 20 cents at $74.14 a barrel, rebounding from a session low of $72.73 a barrel. In early trade, the contract rose to $75.27, a 3-1/2-year high. Brent crude was up 46 cents at $77.76 a barrel, after trading as low as $76.67 and as high as $78.85. In post-settlement trade, prices extended gains after the American Petroleum Institute said crude stockpiles had fallen more than expected last week. Stockpile data from the U.S. Energy Information Administration is expected on Thursday after a delay due to the July 4 holiday. The early gains came after Iran appeared to threaten to disrupt oil shipments from the Middle East Gulf if Washington pressed ahead with sanctions. U.S. crude rose above $75 a barrel for the first time since 2014. Prices retreated as some thought talk of supply disruptions might be overblown, said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. He also said traders could be moving to liquidate bullish positions. Pressure to liquidate may have accelerated ahead of the U.S. holiday on Wednesday, said Tariq Zahir, managing member at Tyche Capital in New York. Traders said supply disruptions could be short-lived as OPEC and allied producers ramp up output. 

    Oil prices edge up as U.S. supply tightens, Iran sanctions loom - (Reuters) - Brent oil rose on Wednesday, driven higher by a threat from an Iranian commander and a drop in U.S. crude inventories for the second week in a row. The price rose above $78 a barrel after an Iranian Revolutionary Guards commander said he was ready to prevent regional crude exports if Iranian oil sales were banned by the United States. The most-active Brent LCOc1 futures contract for September delivery settled up 48 cents at $78.24 per barrel. U.S. crude futures CLc1 were up 19 cents at $74.33 a barrel, within sight of Tuesday’s 3-1/2-year high above $75 a barrel. The U.S. market will not have a settlement price due to the U.S. Independence Day holiday. Iranian President Hassan Rouhani appeared on Tuesday to threaten to disrupt oil shipments from neighbouring states if Washington continued to press all countries to stop buying Iranian oil. Looming U.S. sanctions on Iranian crude exports, force majeure in Libya and unplanned pipeline outages in Nigeria have been clouding the supply outlook despite rising output by the Organisation of the Petroleum Exporting Countries. “In an ideal world an increase in global or regional oil production would have downward pressure on prices. These are, however, no normal times as supply outages are almost weekly occurrences,”  Crude inventories fell by 4.5 million barrels in the week to June 29 to 416.9 million, compared with analysts’ expectations for a decrease of 3.5 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 2.6 million barrels, API said. Crude stockpiles at oil storage facilities in Cushing have dropped after an outage at Syncrude Canada’s 360,000 barrels per day (bpd) oil sands facility near Fort McMurray, Alberta.

    Trump to OPEC: 'Reduce pricing now!' (Reuters) - U.S. President Donald Trump again accused the Organization of the Petroleum Exporting Countries of driving gasoline prices higher on Wednesday and urged the oil producer group to do more. “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW!” Trump wrote on Twitter. The Republican president has lashed out at OPEC in recent weeks. Rising gasoline prices could create a political headache for Trump before November mid-term congressional elections by offsetting Republican claims that his tax cuts and rollbacks of federal regulations have helped boost the U.S. economy. In a tweet on Saturday, Trump said Saudi Arabia had agreed to increase oil output by up to 2 million barrels, an assertion that the White House rowed back on in a subsequent statement. The leader of Saudi Arabia, OPEC’s biggest member, has assured Trump that the kingdom can raise oil production if needed and that the country has 2 million barrels per day of spare capacity that could be deployed to help cool oil prices to compensate for falling output in Venezuela and Iran. Trump has been complaining about OPEC at the same time that Washington is piling pressure on its European allies to stop buying Iranian oil. Iranian OPEC Governor Hossein Kazempour Ardebili said on Thursday that Trump had raised oil prices through his tweets. “Your tweets have increased the prices by at least $10. Please stop this method,” the Iranian oil ministry’s news agency, SHANA, quoted Kazempour as saying. Kazempour said Trump was trying to intensify tensions between Iran and Saudi Arabia. He also called on the United States to join world powers in a meeting with Iran in Vienna on Friday. Foreign ministers from the five remaining signatories of a nuclear deal between Tehran and world powers will meet Iranian officials in the Austrian capital to discuss how to keep the accord alive after the U.S. withdrawal from the pact. Iran has threatened to block oil exports through a key Gulf waterway in retaliation against any hostile U.S. action. 

    Iran’s OPEC boss says Trump’s tweets have added $10 to oil prices (Reuters) - U.S. President Donald Trump, who recently called on OPEC producers to help reduce oil prices, has raised prices through his tweets, Iranian OPEC Governor Hossein Kazempour Ardebili was quoted as saying by news agency SHANA on Thursday. “Your tweets have increased the prices by at least $10. Please stop this method,” the oil ministry news agency quoted Kazempour Ardebili as saying. Kazempour Ardebili said Trump was trying to intensify tensions between Iran and Saudi Arabia and he called on the United States to join world powers in a meeting with Iran in Vienna on Friday. Foreign ministers from the five remaining signatories of a nuclear deal between Tehran and world powers will meet Iranian officials in Vienna to discuss how to keep the accord alive after the U.S. withdrawal from the pact. 

    Russia Gets $63.5 Billion Windfall From OPEC Deal - Russia’s budget has received more than US$63.5 billion (4 trillion Russian rubles) in additional revenues thanks to the production cut deal between OPEC and non-OPEC nations led by Russia that boosted oil prices, Kirill Dmitriev, chief executive of the Russian Direct Investment Fund (RDIF), said in an interview with Russian television channel NTV. In May, the Russian finance ministry said that due to the oil price rally, Russia expects its oil and gas revenues to jump fivefold compared to the expected revenues set in its 2018 budget. Oil and gas exports account for around 40 percent of Russia’s federal budget revenues.

    OPEC Production Jumps In June As Saudis Near Production Record - OPEC’s oil production in June increased by 320,000 bpd from May to stand at 32.32 million bpd, as the cartel’s biggest producer Saudi Arabia produced close-to-record volumes, according to a monthly Reuters survey tracking oil supply to the market. Saudi Arabia’s oil production in June surged by 700,000 bpd to 10.70 million bpd, very close to its highest-ever production of 10.72 million bpd from November 2016, a Reuters survey showed, in a clear sign that OPEC’s leader had started boosting production before the June 22 meeting and is making up for supply drops elsewhere within the cartel. Saudi Arabia interprets the vague OPEC statement from the June meeting to ease compliance rates as implying that there will be indirectly a reallocation of quotas within the cartel. The main Saudi rival in the Middle East, Iran, strongly disagrees that OPEC members should be allowed to make up for production losses in other nations, and publicly criticized Saudi Arabia for boosting production. According to the Reuters survey, the Saudi allies in the Gulf—the UAE and Kuwait—maintained steady production in June compared to May, so they have yet to increase production following the Saudi lead.

    WTI/RBOB Slammed On Surprise Crude Build - API reported a significant crude draw yesterday and after last week's record US exports and biggest crude draw in two years, DOE reported a surprising crude build of 1.245mm barrels and sent WTI/RBOB tumbling. DOE:

    • Crude +1.245mm (-5mm exp)
    • Cushing -2.113mm (-2mm exp)
    • Gasoline -1.505mm (-750k exp)
    • Distillate +134k

    Following last week's massive crude draw (biggest in 2 years) and API's 4.5mm draw, DOE reported “The acute shortage at Cushing is creating an additional headache,” Energy Aspects analysts say in note. “The priority for the physical market right now is to refill Cushing in August as we will reach tank bottoms at the hub in July”U.S. Weekly Canada Crude Imports at highest on record.All eyes were on US crude production once again to see if the Permian pipeline bottlenecks were still holding back output...and for the 3rd week in a row production was unchanged.

    Doubts Grow Aramco IPO Will Ever Happen – WSJ -- Preparations for the public listing of Saudi Arabia’s state oil company, a centerpiece of the government’s plan to open its economy, have stalled, leaving government officials and people close to the process doubting that it will go forward at all.  The initial public offering of Saudi Arabian Oil Co., better known as Aramco, was meant to be the cornerstone of the kingdom’s plan to be less reliant on oil. It would create the largest public company in the history of capital markets, an opportunity coveted by Wall Street’s biggest names.Yet doubts have crystallized in recent months, after two years of work to prepare Aramco for its debut. Saudi officials and people close to the process say the company and the country simply aren’t ready for an IPO that could raise $100 billion but also bring unprecedented scrutiny to the kingdom’s crown jewel. Representatives for the Saudi energy ministry and the government didn’t respond to questions.  First proposed by Saudi Crown Prince Mohammed bin Salman in January 2016, the IPO was originally meant to be done last year. It has been pushed back several times and was most recently slated for next year.Until recently, despite the delays, work on the IPO had appeared to be progressing, if slowly.   Aramco executives and outside advisers have become more vocal in recent months about telling Prince Mohammed about the problems with listing the company, government officials said.Saudi officials say they have determined that listing on a large stock exchange in New York, London or Hong Kong would carry too many legal risks, exposing Aramco to shareholder lawsuits, for example.

    Oil Drops As WSJ Reports Aramco IPO "Almost Certainly Won't Happen" Last we heard from inside the kingdom, the Aramco IPO had been put on hold, with inside sources telling the FT that plans for the IPO had been temporarily shelved, and that the process for selecting a venue for listing the shares had been put off until at least 2019. Then there were rumors about a private sale directly to some of the world's sovereign wealth funds - which would cutting out the investment banker middlemen who've been salivating at the prospect of winning a piece of the world's largest IPO.   But six months into 2018, with oil prices at their highest level in three-and-a-half years and President Trump pushing Saudi Arabia and the rest of OPEC to ramp up production to help quell rising crude prices, the Wall Street Journal has dropped what looks like a bombshell on the oil market. The Aramco IPO, which would've likely been the biggest offering in history given the company's valuation, is almost certainly not going to happen. According to the paper's inside sources, the death of the IPO has been all but officially announced. Furthermore, WSJ reported that the IPO would bring "unprecedented scrutiny" to the Kingdom's "Crown Jewel", according to Saudi officials.  "Everyone is almost certain it is not going to happen," said a senior executive at Aramco, speaking of the IPO.  Oil prices are sliding as expectations surrounding the offering had been one of the factors supporting crude prices.

    Oil near 3-1/2-year high despite Trump demand that OPEC cut prices - Oil traded near its highest in 3-1/2 years on Thursday, boosted by potential disruptions to flows from Iran and the Middle East despite a fresh demand from U.S. President Donald Trump that OPEC cut prices. Continue Reading Below Brent crude futures were at $78.12 a barrel at 1050 GMT, down 12 cents. U.S. crude futures were up 32 cents at $74.46, within sight of Tuesday's 3-1/2-year high above $75. "If Trump continues to believe that OPEC are not doing enough, we would not rule out an SPR (Strategic Petroleum Reserve) release from the U.S., or possibly even export restrictions on petroleum products," ING said in a note. "However with plenty of uncertainty over Iranian supply, and the Syncrude outage in Canada, the market is likely to remain fairly well supported in the near term." Trump again on Wednesday accused the Organization of the Petroleum Exporting Countries of driving up fuel prices."The OPEC Monopoly must remember that gas prices are up & they are doing little to help," Trump wrote on his personal Twitter account. "If anything, they are driving prices higher as the United States defends many of their members for very little $'s." "This must be a two way street," he wrote, adding in block capitals, "REDUCE PRICING NOW!"

    Oil slips as U.S. crude stockpiles show surprise build (Reuters) - Oil fell on Thursday after U.S. government data showed an unexpected build in crude oil stockpiles. U.S. crude futures fell $1.20 to settle at $72.94 a barrel, retreating from Tuesday’s 3-1/2-year high of over $75. Brent crude futures lost 85 cents to settle at $77.39 a barrel. U.S. crude stockpiles rose 1.3 million barrels last week, according to U.S. Energy Information Administration data. Analysts had expected a 3.5 million-barrel draw. [EIA/S] “Because it’s driving season, you expect a lot of crude to go through refineries right now - so that’s why we were looking for a draw,” On Thursday, The Wall Street Journal reported that public listing preparations of state-run Saudi Aramco have stalled. That may reduce the pressure on Saudi Arabia to keep oil prices high, Saudi Arabia has wanted to sell shares in Aramco to bring in foreign investment to diversify its economy, but legal concerns about listing in places like London or New York have presented complications. Inventories at Cushing, Oklahoma, the delivery point for U.S. crude futures, fell to their lowest level since December 2014. Flows into Cushing dropped following an outage at the 360,000 barrel per day (bpd) Syncrude facility in Alberta, which is expected to persist through July. “With those continued drawdowns at Cushing, we were approaching a situation where you could soon start to consider us nearing a shortage,” Kilduff said. The inventory report also showed an increase in imports, which “provided some relief...and showed that even with the Syncrude situation, all is not lost,” Kilduff said. Oil prices have been rocked by recent comments from President Donald Trump. On Wednesday, he accused the Organization of the Petroleum Exporting Countries of driving up fuel prices. OPEC, together with a group of non-OPEC producers led by Russia, reduced output in 2017 to prop up the market. Last month, the group agreed to lift production by about 1 million bpd to offset losses from Venezuela and Iran. Prices have risen as a result of Washington’s plans to reimpose sanctions against Iran, OPEC’s No. 3 producer, analysts said. On Wednesday, an Iranian Revolutionary Guards commander said Tehran might block oil shipments through the Strait of Hormuz. A blockade of the strait, through which roughly 30 percent of all seaborne oil travels, would have “dramatic consequences for global oil supply and an impact on prices that is almost impossible to put into figures,” Commerzbank said in a note. 

     Oil Falls Back On Saudi Supply Surge - Oil prices dipped on Thursday and in early trading on Friday following a disappointing report from the EIA, which showed an unexpected build in crude inventories. Meanwhile, the U.S.-China trade war began in earnest on Friday, raising concerns about a slowdown in demand. Finally, an increase in oil production from Saudi Arabia dragged down prices.  U.S. tariffs on $34 billion worth of Chinese goods began on Friday, with retaliatory tariffs from China immediately implemented. China said the U.S. has now initiated the largest trade war in history. The escalation of the trade war is showing no signs of reaching a resolution, and it comes at a time when global trade is slowing down anyway, raising threats to global economic growth. And as China moves to put tariffs on U.S. crude, Chinese refiners are looking elsewhere for oil imports. China is expected to import around 400,000 bpd from the U.S. in July. Meanwhile, the EU is compiling a list of American goods for new tariffs.   New reports surfaced recently suggesting that Saudi Arabia ramped up production in June, but the latest from Reuters pegs the figure at 10.5 million barrels per day, or an increase of 500,000 bpd from a month earlier. Saudi Arabia’s all-time record high stands at about 10.7 mb/d, and by all indications, Riyadh is planning to breach that threshold this month. President Trump issued several demands via twitter this week for more production, and the Saudis look set to comply.    A dearth of investment in new sources of oil production could lead to a price spike, and investors who demanded capital discipline from oil companies may soon regret that position. “Investors who had egged on management teams to reign in capex and return cash will lament the underinvestment in the industry,” Sanford C. Bernstein & Co. wrote in a note. “Any shortfall in supply will result in a super-spike in prices, potentially much larger than the $150 a barrel spike witnessed in 2008.”

    US Oil Rig Count Inches Higher As WTI Pops -  Baker Hughes reported an increase in the number of active oil rigs in the United States today. The overall rig count increased by 5 rigs, according to the report, with all of that increase coming from oil rigs, the number of gas rigs stayed the same.The oil and gas rig count now stands at 1,052—up 100 from this time last year.Canada, for its part, gained 10 oil rigs for the week—after last week’s gain of 12 oil and gas rigs. After multiple weeks of significant gains, Canada’s oil and gas rig count is now up 7 year over year.Oil benchmarks went in different directions again on Friday afternoon, with WTI trading up and Brent trading down as fears of the escalating U.S.-Chinese trade war and increased production by Saudi Arabia and Russia pulled against concerns over supply disruptions from Venezuela and Libya as well as the looming sanctions on Iran. Saudi Arabia had earlier reported to OPEC that they had pumped 10.488 million bpd in June, up by 458,000 bpd from their self-reported figure for May, OPEC sources told Reuters.  At 08:23 a.m. EDT today, WTI Crude was down 0.78 percent at $72.37, and Brent Crude traded down 1.23 percent at $76.44. At 11:39am EDT, the WTI benchmark had rallied and was trading up 0.88% (+$0.64) to $73.58—although still down week over week, while Brent traded down 0.47% (-$0.36) to $77.03 at that time—also down week over week.The steady upward climb that U.S. oil production has been on throughout 2018 appears to have leveled off at 10.900 million bpd, where it has hovered for four weeks now. At 6 minutes after the hour, WTI was trading up 1.14% at $73.77, with Brent trading down 0.30% at $77.16.

    Crude Oil Prices Settle Higher But Can't Avoid Weekly Loss - WTI Crude Oil prices settled higher Friday, despite data showing a ramp up in the number of U.S. oil rigs, signalling a potential expansion in domestic crude output.On the New York Mercantile Exchange crude futures for August delivery rose 1.2% to settle at $73.80 a barrel, while on London's Intercontinental Exchange, Brent fell 23 cents to trade at $77.16 a barrel.Oilfield services firm Baker Hughes reported on Friday that the number of U.S. oil drilling rigs in operation rose by 5 to 863 in the week to June 29. That comes on the back of two-straight weeks of falling rig counts. Crude oil prices were supported, however, by ongoing bets on a shortage in global crude supplies amid rising oil demand, the potential for a larger drop in Iranian crude exports – amid looming U.S. sanctions – and ongoing challenges in Venezuela's energy industry.Expectations for a shortage in global crude supplies come against the backdrop of rising Russian and Saudi output.The Saudis reportedly informed OPEC that they raised output by 458,000 barrels a day (bpd) in June, from the prior month, Reuters reported, citing OPEC.A monthly S&P Global Platts OPEC survey, meanwhile, showed Saudi Arabia pumped 10.39 million bpd in June, up from 10.01 million bpd in May – the highest Saudi production level since December 2016.Crude oil prices posted a weekly loss after suffering a hefty sell-off Thursday, when U.S. crude supplies unexpected rose as imports surged. Inventories of U.S. crude rose by 1.245 million barrels for the week ended June 30, confounding expectations for a draw of 5.20 million barrels, according to data from the Energy Information Administration (EIA).

     Sanctions On Iran May Send Oil Prices Above $90 Next Year - According to Bank of America Merrill Lynch, oil prices will hit $90 a barrel by the second quarter of 2019, as Iranian oil barrels are removed from the market and other supply disruption risks threaten the tightening oil market.The United States signaled this week that it would look to take as much Iranian oil as possible out of the market with the renewed sanctions on Tehran.Although Saudi Arabia and Russia had OPEC and allies pledge last week to ease compliance rates, in other words to boost production by an unspecified number, production increases will make the global spare capacity thinner at a time of low inventories, setting the stage for higher oil prices in case of additional supply disruptions, analysts believe.“We are in a very attractive oil price environment and our house view is that oil will hit $90 by the end of the second quarter of next year,” Hootan Yazhari, head of frontier markets equity research at Bank of America Merrill Lynch, told CNBC.“We are moving into an environment where supply disruptions are visible all over the world… and of course President Trump has been pretty active in trying to isolate Iran and getting U.S. allies not to purchase oil from Iran,” Yazhari noted.“With inventories still declining and spare capacity uncomfortably low, there is very little cushion for any supply disruption caused by rising geopolitical risks,” ANZ bank told Reuters. Even before OPEC’s much-talked-about meeting last week, the International Energy Agency (IEA) expected—like many analysts—that there would be some sort of production increase. But even if the Iran and Venezuela supply gap is to be plugged, “the market will be finely balanced next year, and vulnerable to prices rising higher in the event of further disruption,” the Paris-based agency said in its Oil Market Report in mid-June.

    Iran Accuses US Of Docking Chemical Weapons-Laden Ship In Persian Gulf - Multiple Russian and Middle East news sources are reporting new accusations by the Iranian military that that a US ship carrying chemical weapons has recently anchored in the Persian Gulf and in engaged in a "dangerous plot", though not naming the particular "Gulf state" territorial waters at which the ship docked.  The accusation comes just as a major seven week US military exercise, Operation Nautical Horizon, has concluded in the Persian Gulf which involved the same military transport ship that decommissioned Syria's declared chemical weapons stockpiles.  Iran's Press TV reported that senior Iranian military spokesman Brigadier General Abolfazl Shekarchi said the US Navy's MV Cape Ray vessel had docked at the coast of one of the Persian Gulf Arab countries after recently being escorted into the region by an American warship, and implied further that chemicals carried by the ship could be transferred to US-backed groups in Syria.“After suffering consecutive blows by the resistance front, the Americans have now resorted to dangerous ways to continue their presence in Iraq and Syria,” Shekarchi stated, according to Iranian state-run media. Press TV further cited the general as saying, "The news proves that chemical attacks in Iraq and Syria have been engineered and led by the Americans," and that, "The Western countries have used the alleged gas attacks in Syria as a pretext to target military positions inside the Arab country." He said:

    Iran Threatens To Close Strait of Hormuz - - Iranian president Rouhani stated on Tuesday in Bern, Switzerland that his country could block the Strait of Hormuz for all Arab shipping traffic if Washington fully implements its zero oil export targets for Iran in the coming months.Rouhani, who is currently on a lobbying mission in Europe in an effort to salvage the JCPOA deal (the Iran nuclear deal) and mitigate U.S. sanctions, seems to be have been pushed by hardliners to increase threats against Iran’s neighbors.Rouhani, considered by European politicians to be a reformist, appears to be showing a hardline streak that is nearer the strategy of the country’s supreme leader, Ayatollah Khamenei. Khamenei has already been pushing for a direct confrontation with the U.S. and the Arab Alliance. Several hours after Rouhani made his statement, Major-General Qassem Soleimani, one of the leaders of the Iranian Revolutionary Guard Corps (IRGC), told the press that the IRGC is fully prepared to implement any action ordered by Rouhani or Khamenei. Soleimani, well-known for his direct involvement in the Syrian civil war and the set up of Iraqi Shi’a militias, has a reputation for taking strong and direct military action if needed. No direct threats were made, but the closure of the Strait of Hormuz, the main thoroughfare of the Arabian/Persian Gulf region, is of strategic importance to all. At present, according to the Energy Information Agency (EIA.gov), more than 17 million bpd of crude oil and products travel through the strait every day. If taking into account that all of Qatar’s LNG exports are also going through it, the importance is clear.

    US Vows To Keep Gulf Waterway Open After Iran Threatens Blockade --Iranian President Hassan Rouhani suggested Iran could stop all regional gulf oil exports in retaliation for the US seeking to collapse the nuclear deal, and in response to aggressive new US sanctions.  "The Americans have claimed they want to completely stop Iran's oil exports. They don't understand the meaning of this statement, because it has no meaning for Iranian oil not to be exported, while the region's oil is exported," the state-run website, president.ir, quoted Rouhani as saying. “The Americans say they want to reduce Iranian oil exports to zero... It shows they have not thought about its consequences,” Rouhani said. After the provocative Iranian statements, widely understood as a threat to impose military blockade on the world's most crucial oil choke point, spokesman for the US military's Central Command, Captain Bill Urban, told the Associated Press on Wednesday that US sailors and its regional allies "stand ready to ensure the freedom of navigation and the free flow of commerce wherever international law allows". Washington has issued an ultimatum to countries dealing with Iran: halt all imports of Iranian oil from Nov. 4 or face punitive US economic measures with no exemptions. Rouhani called these threats "crime and aggression" and an act of "self-harm" as the unwavering stance is “against U.S. national interests and the interests of other countries.” He said this while in Vienna attempting to rally European governments to stand against Trump's policies targeting Tehran.  Previous threats by Iranian officials to possibly take the drastic action of blocking the the Strait of Hormuz — though once easily shrugged off as empty talk — are now coming to a head as the elite Islamic Revolutionary Guard Corps (IRGC) has thrown its full weight behind Rouhani's words, to which the Pentagon responded, issuing its firm response promising to keep the waterway open through military action if need be.

    Iraq executes 13 and orders hanging of hundreds more amid fears of Isis resurgence - Iraq has put to death 13 people convicted of terrorism offences hours after the prime minister, Haider al-Abadi, ordered the execution of hundreds of prisoners on death row in retaliation for the killing by Isis of eight members of the security forces.The hangings are aimed at quelling public anger over signs that Isis is re-emerging as a threat after the group showed eight captives, who were badly bruised and looked as if they had been severely beaten, on a video last weekend and said that they would be killed unless Sunni women prisoners were released by the government within three days.  The government says that autopsies on the bodies of dead men, six of whom belonged to the logistics department of the paramilitary Hashd al-Shaabi, or Popular Committees, showed that they were shot and killed before this deadline expired. An Iraqi government official, speaking to The Independent just before the discovery of the bodies, said that Isis fighters targeting the main Baghdad-Kirkuk road were based in the rugged Hamrin mountains, a traditional Isis stronghold.Isis suicide bombers based in the Syrian border area are continually trying to reach Baghdad but “so far they have failed”.   He added that Iraqi security forces now have good intelligence about Isis plans and personnel after luring back to Iraq five senior Isis leaders it had captured and interrogated. It appears Isis is keen to revert to guerrilla war similar to that which it waged successfully before its explosive expansion when it captured Mosul in 2014, but so far it has had only limited success.

    Son Of ISIS Leader Reported Killed In Suicide Attack -  - While his father has been declared dead many times, only to miraculously reemerge in defiance of western (and Russian) media reports, Hudhayfah al-Badri, the son of ISIS leader Abu Bakr al-Baghdadi, was recently killed in an "Inghimasi" operation in Homs province while fighting against Russian and Syrian forces, according to the Telegraph, which cited an official ISIS announcement. An "Inghimasi" attack is essentially a suicide mission where ISIS soldiers fight for as long as they can until they are either gunned down, or detonate suicide vests as a last stand.The statement announcing his death was circulated on Telegram, a popular chat app that's also regularly used for spreading terrorist propaganda."The son of the Caliph Abu Bakr al-Baghdadi was killed in the "Nasiriyah" at the hotspot location in the state of Homs," the ISIS statement said. According to Al Arabiya, the term "Nasiriyah" refers to the Alawite sect, of which Syrian leader Bashar al-Assad is a member. Badri is believed to have been born in 2000 to an Iraqi woman named Asmaa Fawzi Mohammed al-Kubaisi, which would make him 18 at the time of his death. In a photograph released by ISIS, he can be seen as a teenager holding an assault rifle, although that image may have been digitally altered. The ISIS statement didn't say when Badri was killed. Badri was born in the Iraqi City of Samarra before his father became a senior al-Qaeda leader. Al Baghdadi is believed to have at least four other children.

    Israel Demolishes Palestinian Bedu Community Near East Jerusalem - Israeli forces on Wednesday demolished a Palestinian Bedouin community near East Jerusalem in the occupied West Bank.“Military bulldozers, backed by Israeli forces, stormed the Abu al-Nawwar Bedouin community at dawn and demolished ten Palestinian homes and livestock barracks,” Daoud Jahaleen, a spokesperson for the community, told Anadolu Agency.He said the community is home to 687 Palestinians, 65% of them are children.In February, Israeli bulldozers razed the only school in the Bedouin community, which is surrounded by two Israeli settlements, Ma'ale Adumim and Kedar.For years, the Israeli government has tried to dismantle the Abu al-Nawwar community to make way for its massive E1 settlement project in East Jerusalem.

    Israel Poised For Complete Annexation Of West Bank, UN Warns -- Just prior to a United Nations Human Rights Council meeting on the Israeli-Palestinian conflict this week, a UN legal expert has declared that Israel is moving closer to formal annexation of the West Bank.  “After years of creeping Israeli de facto annexation of the large swathes of the West Bank through settlement expansion, the creation of closed military zones and other measures, Israel appears to be getting closer to enacting legislation that will formally annex parts of the West Bank,” UN official Michael Lynk said. Lynk's warning was posted on the web site of the UN Office of the High Commissioner for Human Rights (UNHRC) — the rights monitoring body that both the United States and Israel are boycotting, with the US recently stunning the council by announcing its pullout last month, citing a general anti-Israel bias. The UN statement highlighted Israeli expansion: “This would amount to a profound violation of international law, and the impact of ongoing settlement expansion on human rights must not be ignored,” Lynk continued. “This is my third mission to the region since I assumed the mandate in May 2016, and the reports I received this week have painted the bleakest picture yet of the human rights situation in the Occupied Palestinian Territory,” he said after returning from an information gathering mission to the region. The statement also highlighted restriction on Palestinian movement, night raids and the lack of building approvals, and what the UNHRC has called a creeping de facto annexation of West Bank territory. Lynk will deliver a full and final presentation of his findings before the UN General Assembly 73rd session in October — this as a formal UN investigation into the recent shootings of hundreds of Palestinian protesters in Gaza by Israeli security forces is simultaneously underway, an inquiry which was also condemned by the United States and Israel in a May vote.

    Haaretz:  Fascism Creeping Into Israel’s Education System -- If we look at Israel’s education system through the prism of PISA – the Program of International Student Assessment – the situation looks bleak. Every three years, the Organization for Economic Cooperation and Development conducts these exams to check the skills of 15-year-old students the world over in reading, mathematics and science. Consistently, the results for Israel suggest that the percentage of high-school graduates who will find it difficult to integrate into their society and economy is one of the highest among the more than 70 countries in which the PISA surveys are conducted. The achievements of Israel’s teachers, which the test also evaluates, also leave much to be desired.   The situation is even worse, considering that between 2006 and 2016, the local education budget actually grew by 30 billion shekels (about $7 billion) and has continued to increase apace since.But the investment of all those billions resulted in improvements of only another 13 points in the PISA science tests and another 28 points in math section.  The explanation for this is neither new nor surprising. “We need to understand that we are educating students for their future, and not for our past,” says Andreas Schleicher, coordinator of the PISA and in essence the OECD’s “minister of education,” in regard to the low achievements in Israel. As he told Haaretz (Hebrew edition) last month, “Pedagogy in Israel is very traditional and standard. It is not directed toward developing the student’s skills, it does not emphasize creative thinking and problem solving. There is too much rote learning It doesn’t work like that anymore. In the modern world you are not rewarded for what you know, but for what you can do with the knowledge you have accumulated.” 

    At this Chinese school, Big Brother was watching students — and charting every smile or frown When facial recognition cameras were installed at a century-old high school here in eastern China, students got in and out of campus, picked up lunch, borrowed books and even bought drinks from a vending machine just by peering into the cameras.   No more worrying about forgetting to carry your ID card. But last March, the cameras appeared in some classrooms — and they did a lot more than just identify students and take attendance. Using the latest artificial intelligence software, the devices tracked students’ behavior and read their facial expressions, grouping each face into one of seven emotions: anger, fear, disgust, surprise, happiness, sadness and what was labeled as neutral. Think of it as a little glimpse of the future.While American schools, as well as students and parents, are worrying about the increased emphasis on standardized tests — and the loss of classroom freedom that comes with “teaching to the test” — China has carried things to a whole new level. Here, the surveillance cameras took the data on individual facial expressions and used that information to create a running “score” on each student and class. If a score reached a predetermined point, the system triggered an alert. Teachers were expected to take action: to talk to a student perceived to be disengaged, for example, or overly moody. Most students came to hate the constant monitoring — and the consequences that followed when the machines reported scores suggesting individuals or entire classes weren’t paying attention.

    China brings Star Wars to life with ‘laser AK-47’ that can set fire to targets a kilometre away | South China Morning Post: China has developed a new portable laser weapon that can zap a target from nearly a kilometre away, according to researchers involved in the project. The ZKZM-500 laser assault rifle is classified as being “non-lethal” but produces an energy beam that cannot be seen by the naked eye but can pass through windows and cause the “instant carbonisation” of human skin and tissues. Ten years ago its capabilities would have been the preserve of sci-fi films, but one laser weapons scientist said the new device is able to “burn through clothes in a split second … If the fabric is flammable, the whole person will be set on fire”.The pain will be beyond endurance,” according to the researcher who had took part in the development and field testing of a prototype at the Xian Institute of Optics and Precision Mechanics at the Chinese Academy of Sciences in Shaanxi province. The 15mm calibre weapon weighs three kilos (6.6lb), about the same as an AK-47, and has a range of 800 metres, or half a mile, and could be mounted on cars, boats and planes. It is now ready for mass production and the first units are likely to be given to anti-terrorism squads in the Chinese Armed Police.

    China's 'political warfare' aims at South China Sea | Asia Times: When the Arbitral Tribunal at The Hague ruled in July 2016 that China’s claim to most of the South China Sea was illegal under international law, Beijing’s propaganda organs angrily stated that Beijing “will neither acknowledge nor accept” the ruling. Two years later, in the wake of a rising outcry against China’s rapid militarization of the contested maritime region, the Global Times mouthpiece newspaper thundered in June that China will “act tougher” with foreign naval vessels traversing the South China Sea and that its firmer posture “could lead to military conflicts.”China’s propaganda organs are doing precisely what propaganda organs are designed to do: implement, including via threats, Beijing’s “political warfare” – a little understood but vital weapon in China’s growing arsenal aimed at achieving regional and global hegemony. “China’s worldwide political warfare is a critical component of its security strategy and foreign policy,” says Anders Corr, a New York-based expert in China’s influence operations. “With well-orchestrated political warfare campaigns, China has achieved significant successes in tilting the regional, and even global, balance of power in recent years. Only recently have a few countries been willing to acknowledge it and confront it.”There is a dizzying array of terms in the public lexicon associated with the tools governments employ for influence, including psychological operations, public diplomacy, public affairs, public relations, disinformation, censorship, misinformation, information warfare, soft power, hard power and sharp power. What is unique about China’s political warfare–and perhaps most difficult for the countries China has targeted to understand–is that it entails all of these practices together. It is, in effect, total war. 

    China faces perfect storm as currency plunges and Trump opens fire - Beijing has vowed to defend the Chinese currency after the steepest drop since the early Nineties, bracing for the double shock of a US trade war and a global credit squeeze. The authorities issued a plea for calm after another day of dramatic moves on foreign exchange markets and the Shanghai bourse. The yuan has plunged by 5pc since mid-June when trade conflict erupted and investors awoke to deepening slowdown in the Chinese economy. Foreign funds have since been rushing for the exits, taking advantage of open flows under the Hong Kong-Shanghai Connect scheme to withdraw capital.  Yi Gang, the governor of the People’s Bank (PBOC), acknowledged that the currency slide risks turning malign. The moves have been enormous for what is normally a micro-managed exchange rate, evoking memories of currency crisis three years ago. That episode pushed capital flight to $100bn (£76bn) a month. The PBOC burned through $1 trillion of foreign reserves trying to hold the line. It became the catalyst for a worldwide equity slump and came close to pushing the global economy into recession, a warning that events in China are no longer a local affair.  Mr Yi said the central bank is paying “close attention” to the market ructions and pledged to keep the yuan “generally stable at a reasonable level”. Traders saw tell-tale signs of intervention by state banks to stabilise the currency through the swap markets. Beijing is clearly on edge. A report for the National Institution for Finance and Development last week said the situation was becoming dangerous, calling for prompt action to avert a break-down in confidence. "We think China is currently very likely to see a financial panic,” it said.The report, since removed from the website, said leveraged stock purchases had exploded to five trillion yuan (£570bn) and were storing up a repeat of the equity crash three years ago.The Chinese markets were already on edge even before Donald Trump stepped up his trade assault. Severe curbs on shadow banking launched last year are biting hard after a delay. The growth of fixed asset investment has been running at 6.1pc so far this year, the lowest since data began in 1998. “This is very disturbing. Prepare for the worst,” said Wang Yiming, vice-minister of the Research Development Council.  The PBOC stepped in after the yuan weakened to an 11-month low of 6.73 against the dollar on the offshore market in Hong Kong. Chinese investors are acutely sensitive to the yuan-dollar rate.

    As mob lynchings fueled by WhatsApp messages sweep India, authorities struggle to combat fake news – The Washington Post — More than a dozen people have been killed across India since May in violence fueled primarily by fake social media messages, as officials struggle to rein in this growing technology-driven menace. The perpetrators are largely villagers, some of whom may be using smartphones for the first time. Inflamed by fake warnings of child-trafficking rings or organ harvesters sent via the WhatsApp messaging service, they have resorted to vigilante justice — attacking and beating to death people who often were innocent.In the latest such lynching, a mob killed five people Sunday after rumors spread on social media that they were trafficking children. On Tuesday, India’s Ministry of Electronics and Information Technology called on WhatsApp to take “immediate action to end this menace,” saying the company can’t evade “accountability and responsibility” when its users spread false information.. Such reactions have raised free-speech concerns. But the spread of fake news has been particularly pernicious in India, where legions of new, inexperienced smartphone users send billions of messages a day on WhatsApp, which has more than 200 million users in the country, its largest market. As India’s government weighs what to do, local authorities are left to tackle fake news as best they can, issuing warnings and employing low-tech methods such as hiring street performers to visit villages to spread public awareness. One such “rumor buster” was killed by a mob Thursday in the eastern state of Tripura.

    India could show the US some spine on Iran, but it would rather flaunt muscle at home - You cannot make up in muscle what you lack in spine. Last week, the Narendra Modi government tried to do just that. It flaunted its strength by handing news outlets video footage of its 2016 action across the Line of Control. Though the footage wasn’t particularly impressive, breathless commentary from friendly television channels accompanying an endless loop of aerial and ground level images built the operation into a monumental military triumph. Even as it showed off a muscular defence of India’s boundaries, our government mortgaged the nation’s sovereignty and allowed itself to be bullied by a visiting mid-ranking American cabinet member.  Nikki Haley, the United States ambassador to the United Nations, told Prime Minister Modi that the US expected India to end oil purchases from Iran, a nation with which India has strong economic ties and no serious differences. She then went on Indian television and made the American demand public. In the past, ruling party politicians would have responded by asking the United States to mind its own business, but this time no retort was forthcoming. The government’s silence was deafening in light of the declaration made by India’s Foreign Minister Sushma Swaraj at the end of May, after a meeting with her Iranian counterpart Javad Zarif, that “India follows only UN sanctions, and not unilateral sanctions by any country.” Just before Swaraj’s statement, I had written a column about the Iran issue, outlining why secondary sanctions were unjust, and concluding, “It will be interesting to see whether Narendra Modi asserts India’s independence or gives in to US demands.”

    India Defies Washington, Will Acquire Russian S-400 Missile Shield --Washington’s so-called allies continue to gravitate towards the Russian sphere of influence, and specifically the Russian S-400 Triumph advanced anti-aircraft weapon system.  First it was Turkey, which openly defied Trump's threats that the US would sanction Ankara if it completes the purchase of the anti-aircraft missiles, saying the acquisition of the missile defense system is "a done deal and Turkey will not turn back from its decision."Now India is also moving towards acquiring five or more S-400 from Russia despite the threat of US retaliation. The Defense Acquisitions Council (DAC), chaired by minister Nirmala Sitharaman, last week approved the “minor deviations” in the $5.7 billion deal to purchase S-400s for final government approval, to the finance ministry  and the Prime Minister’s office sources told the Times of India.The DAC discussed the S-400 deal just one day after Washington on Wednesday canceled a “two-plus-two” discussion involving foreign minister Sushma Swaraj and defense minister Sitharaman and Washington officials Mike Pompeo and Jim Mattis, which was scheduled for July 6.The Times of India noted that in October 2015, India had planned to procure the S-400s - which can detect, track and destroy supersonic bombers, drones, fifth-generation fighters, spy planes, and supersonic missiles at a range of up to 400km and altitude of 30km - in what many Indian officials have praised as a game-changing military acquisition.

    Rupee's Fall Halts Against US Dollar. What Led To The Currency's Decline  -- The Indian rupee closed higher at Rs 68.46/47 against US dollar on Friday. The Indian currency pared some of the losses it incurred on Thursday, and rose from its record closing low in opening trade today and ended on sharply higher note. Rupee hit an all-time closing low of 68.79 on Thursday against the earlier closing low of 68.73 on November 24, 2016. The Indian rupee, which strengthened 5.96 per cent against the US dollar last year, has been on a general downtrend since April this year. The crude oil prices play an important role in local unit's price since India meets its over 75 percent of oil requirements through imports. There are, however, mostly related factors that have not only caused but expedited the downfall of India rupee in this year."Weak global cues and rising oil price continued to impact domestic market sentiment while rupee declined to all time low amid concern on inflation and current account deficit... Any intervention from RBI to contain the volatility in rupee and progressing monsoon will provide some respite to domestic market in the near term," Vinod Nair, Head of Research, Geojit Financial Services Ltd. "The Indian rupee fell to a lifetime low today due to several factors like rising dollar and crude aided by a wider current account deficit and continuous outflow from FIIs (Foreign Institutional Investors) pushed the currency lower," said Rahul Sharma, senior research analyst at Equity99, adding that FIIs have sold over Rs 40,000 crore in debt and equity so far this year.  The crude oil prices have risen for nearly 40 percent in past one year, reported Reuters. US crude prices hit a three-and-a-half year high on Thursday. Unplanned supply disruptions from Canada to Libya and Venezuela have propped up crude oil prices. West Texas Intermediate (WTI) crude futures rose 69 cents, nearly 1 percent, to settle at $73.45 a barrel. It reached $74.03 earlier in the session, the highest since November 26, 2014. Brent crude futures rose 23 cents to settle at $77.85 a barrel, reported Thomson Reuters. A major factor causing crude oil prices to rise is US president Donald Trump's demand that its allies stop oil imports from Iran starting November. After this, the market witnessed supply concerns that could cause a large drop in crude exports from Iran.

    A Nervous Rupee Should Force India to Take a Hard Look at its Macroeconomic Risks -- The rupee that fell on Thursday to an all-time low of 69.09 against the dollar in intraday trade is expected to remain under pressure. Although the Reserve Bank has been, and is expected to continue to defend the currency, using its stockpile of foreign currency reserves, by selling dollars in the open market, forecasters estimate that the 70-level mark will be breached before the year-end.  While most Asian currencies are weakening, the rupee, among the three biggest losers, has lost over 5% of its value in the last three months, according to Bloomberg data.For reasons both global and specific to India’s macroeconomic parameters, foreign institutional investors have pulled money out of Indian debt and equity for the first time in a decade in the first six months of this calendar year. They have sold equity and debt worth nearly Rs 46,190 crore so far in 2018, the worst outflow since 2009, according to Bloomberg data. This exit of dollars has added to the selling pressure on the rupee.  We are entering a new phase. As US President Donald Trump’s trade policies escalate tensions globally, the downward trend in currencies will continue. Rising international oil prices and the recourse of imports from Iran under threat are a risk for India’s macroeconomic stability, The country’s import bill was being kept down by benign international crude prices. But the fiscal and current account deficits, which have been traditional vulnerabilities for the economy, have shot up again.The government had inherited the current account deficit – the excess of imports over exports and expenditure over revenues – at 1.7% of GDP in 2014, which it brought down to 0.7% by the close of 2016-2017. This climbed back up to 1.9% by March-end this year. Higher oil prices are expected to keep the import bill and the current account deficit bloated this year again. Exports could have offset the rising oil import bill, but that cushion is not available.

    Step Aside Italy: India Is Emerging As Ground Zero Of The World's Biggest NPL Crisis -- While bad loans in the Italian banking system have received a ton of attention from investors who fear that the Italians could inadvertently blow up the European banking union, it's not the only financial landmine lurking among the world's ten largest economies. To wit, while Italy has the largest percentage of non-performing loans among the world's largest economies, India isn't far behind and India's economic recovery is built on an even shakier foundation. #India's growing bad debt problem is second only to #Italy, BBG reports. Acting Indian FinMin Piyush Goyal said that banks will consider setting up widely-held asset management companies to take over non-performing loans from lenders. pic.twitter.com/M5ylDp6qbP— Holger Zschaepitz (@Schuldensuehner) July 4, 2018   According to Bloomberg, India's $1.7 trillion formal banking sector is presently struggling with $210 billion in bad loans, most of which are concentrated within its state-owned banks. During the 2018 fiscal year, growth slowed to 6.7%, down from the previous year's 7.1%, back to its levels from 2014, before Modi came to power.The state banks have been so badly mismanaged that some analysts say the country's banking crisis is an opportunity for private sector banks, as CNBC reported. “If you take a 10-year view, currently the private sector banks' market share is 30 percent. Probably it will become 60 percent," Sukumar Rajah, senior managing director at Franklin Templeton Emerging Markets Equity, told CNBC.

      China lends $1 billion to Pakistan to boost plummeting FX reserves - sources (Reuters) - China has lent Pakistan $1 billion to boost the South Asian country’s plummeting foreign currency reserves, two sources in Pakistan’s finance ministry told Reuters, amid growing speculation of another International Monetary Fund bailout. The latest loan highlights Islamabad’s growing dependence on Chinese loans to buffer its foreign currency reserves, which plunged to $9.66 billion last week from $16.4 billion in May 2017. The lending is the outcome of negotiations for loans worth $1-$2 billion that was first reported by Reuters in late May, the two sources told Reuters. “Yes, it is with us,” said one finance ministry source, in reference to the Chinese money. The second source added that the “matter stands complete”. The finance ministry spokesperson did not respond to a Reuters request for comment. With the latest loan, China’s lending to Pakistan in this fiscal year ending in June is set to breach $5 billion. In the first 10 months of the fiscal year China lent Pakistan $1.5 billion in bilateral loans, according to a finance ministry document seen by Reuters. During this period Pakistan also received $2.9 billion in commercial bank loans mostly from Chinese banks, ministry officials told Reuters. Beijing’s attempts to prop up Pakistan’s economy follow a strengthening of ties in the wake of China’s pledge to fund badly-needed power and road infrastructure as part of the $57 billion China-Pakistan Economic Corridor (CPEC), an important cog in Beijing’s vast Belt and Road initiative. But analysts say China’s help will not be enough and predict that after the July 25 national election the new administration will likely seek Pakistan’s second bailout since 2013, when it received a package worth $6.7 billion from the IMF.

    Is China’s US$62 billion investment plan fuelling resentment in Pakistan? | South China Morning Post: China’s massive investment in Pakistan could fuel greater conflict in the South Asian nation if it continues on its current path, a non-profit organisation warned, just weeks ahead of what are shaping up to be the most controversial elections in the nation’s democratic history. The China-Pakistan Economic Corridor (CPEC) – a collection of US$62 billion worth of infrastructure projects under construction across the country – may raise political tensions and animosity if Islamabad and Beijing cannot mitigate existing concerns, according to a report by the Belgium-based International Crisis Group. “Pakistan’s economy clearly needs reform to better serve its people, and many officials say CPEC will help in this regard,” it said. “But as currently rolled out, the corridor risks aggravating political tension, widening social divides, and generating new sources of conflict in Pakistan.” As the linchpin of Beijing’s development drive in the region, under its signature “Belt and Road Initiative”, the corridor has faced a flurry of accusations about a lack of transparency, disproportionate benefits for Chinese firms and wealthier areas of Pakistan, and raised concerns about China’s geopolitical intentions. Once completed, the network of transport, energy, industrial and agricultural projects will stretch 2,700km (1,680 mile) from the port of Gwadar on the Arabian Sea to Kashgar prefecture in China’s westernmost region, Xinjiang. “While it is too early to assess if CPEC can deliver the economic gains Islamabad promises, the project risks inflaming long-standing tensions between the centre and smaller federal units, and within provinces over inequitable economic development and resource distribution,” the report said.

    López Obrador, a leftist, wins sweeping mandate in Mexican presidential election — As votes were tallied Monday following a historic election, Andrés Manuel López Obrador appeared close to gaining control of Congress as well as the presidency — a resounding mandate for the country’s first leftist leader in decades. López Obrador won more than 50 percent of the vote, the most in the history of Mexico’s multiparty democracy, according to incomplete returns. The electoral results will give him broad power to reshape public policy, which has largely been set by pro-American, free-market-oriented politicians in recent decades.The peso dropped about 1 percent on news of his victory, not as dramatic a slide as some had predicted, but a sign the markets are skeptical of López Obrador’s platform, which features a surge in spending on welfare programs. In a speech late Sunday, López Obrador tried to quell concerns, saying he would not increase taxes or the public debt and would respect the country's private sector.Preliminary results suggested members of his Morena party would take at least 260 of the 500 seats in the Chamber of Deputies, the lower house of Congress, and roughly 65 of 128 seats in the Senate.President Trump loomed in the background of this vote. He was not a wedge issue — all the presidential candidates opposed his immigration and trade policies and his anti-Mexican rhetoric — but the new president will have to manage cross-border relations that are unusually fraught. Although he has spoken bitterly about Trump for nearly two years, López Obrador said he desired a “friendship and mutual respect” with the United States.

    Anti-establishment Leftist Lopez Obrador Wins Mexican Presidency In A Landslide -  As expected, Mexico has just elected its first leftist president in decades, with Andrés Manuel López Obrador (or AMLO) winning in a landslide and a near majority outright, or 49% of the vote early exit polls showed; right-left coalition leader Ricardo Anaya, in distant second place with 27% and the incumbent PRI party's Jose Antonio Meade, with 18%.And, as Bloomberg headlines flash red, Obrador is now de facto president as his main rivals have conceded: And, adding to the concerns that AMLO may start rolling back energy privatization programs and issue more debt, is that his Morena party just won a majority in the Lower House: The victory of AMLO, who suffered defeats in the last two presidential votes, will hardly come as a surprise, as has led by double digit numbers throughout this campaign. His popularity stems from his antiestablishment platform (sound familiar?) which has been riding a public revolt against entrenched corruption, rampant violence and an economy that’s failed to deliver higher living standards for the common man and especially the poor, which comprise about half of Mexico’s 125 million population. He also campaigned with promises for economic reform that has been underlined by a desire to freeze prices of gasoline in Mexico for 3 years, as well as a reduction of external investment in the energy sector. AMLO has also promised to ramp up social programs and, like so many of his antiestablishment peers, has vowed to fund them without deficit-spending by eliminating graft, a claim which as Bloomberg laconically adds, "has been greeted skeptically by economists." He’s also promised not to nationalize companies or quit Nafta.  As Bloomberg notes, Lopez Obrador has promised to govern as a pragmatist. Still, his procession toward victory has alarmed many investors and business leaders, who worry that he’ll roll back privatization of the energy industry and push the country into debt by spending more on social programs. Those concerns will be amplified if Lopez Obrador’s Morena party wins majorities in both houses of Congress, which earlier surveys had suggested is likely.

    AMLO’s Mexico -- It is hard to overstate the extent of Andrés Manuel López Obrador’s (AMLO) victory in the Mexican presidential elections this past Sunday. AMLO garnered 53 percent of the vote, a whopping thirty points more than his closest contender, right-winger Ricardo Anaya. He won the most votes at the presidential level in Mexican history and by the widest margin since the democratic transition in 2000. He triumphed in all but one of the country’s thirty-two states — a dozen of which gave him over 60 percent of the vote — and prevailed in 80 percent of the country’s municipalities. AMLO’s party, Morena — created in 2014 and running in its first nationwide elections — also wracked up landslide victories. They secured a solid majority in congress and the senate. They will preside in five of the nine governorships that were up for grabs, winning most of those races by historically wide margins. In Mexico City, where AMLO served as mayor in the early 2000s, Morena’s candidate, Claudia Sheinbaum, finished sixteen points ahead of the second-place candidate. In López Obrador’s home state of Tabasco, the party’s candidate won by forty points. The astonishing gains spread beyond traditional AMLO strongholds, extending well into the north. Mexico’s three main parties — the PRI, the PAN, and the PRD — woke up Monday morning and found themselves transformed into minority parties. The entire political arena had been shaken overnight. Although AMLO had been leading in the polls for months, many in the country went into election day worried of possible fraud and vote-buying operations. Several scattered reports of suspicious activity throughout the day heightened those fears. But the night of the election ended on an ecstatic note for AMLO and his supporters. Early concession speeches from the other candidates eased tensions. The National Electoral Institute confirmed that AMLO was on track to win. The exiting president Peña Nieto went on national television to recognize the results and assure the nation that the transition would be peaceful. Hundreds of thousands poured into the Zocalo, Mexico City’s central square, and celebrated the news. In an emotional speech, López Obrador thanked the left-wing movements of yesteryear — of peasants, workers, students — that had paved the way for this moment. “You are not alone,” the crowd chanted as AMLO acknowledged the historical responsibility entrusted to him. He recalled the slogan of his failed presidential run six years ago: for the good of everyone, first the poor.

    Canada stands up for our steel and aluminum workers and industry - Global Affairs Canada - Canada’s steel and aluminum industries have made North American steel and aluminum more competitive around the world. It is inconceivable and completely unacceptable to view any trade with Canada as a national security threat to the United States. The U.S. has a US $2 billion annual trade surplus on iron and steel products with Canada. Canada buys more American steel than any other country in the world, accounting for 50 per cent of U.S. exports. Canadian steel is used in American tanks, and Canadian aluminum in American planes. Indeed, Canada is recognized in U.S. law as part of the U.S. National Technology and Industrial Base related to National Defence. Today the Government of Canada announced that in direct, measured and proportional response to U.S. tariffs on Canadian steel and aluminum, reciprocal surtaxes on $16.6 billion of imports of steel, aluminum and other products from the United States will come into effect July 1, 2018. Canada continues to work towards full and permanent removal of these unjustified and illegal U.S. tariffs. In addition, the Government of Canada will make available up to $2 billion to defend and protect the interests of Canadian workers and businesses in the steel, aluminum and manufacturing industries. This includes a comprehensive set of measures: 

    Turkey’s controversial S-400 missile transfer is ‘done deal’ - The agreement on the acquisition of Russia’s S-400 long-range air and missile defense system is “a done deal and Turkey will not turn back from its decision.” When asked by Asia Times about reports that the administration of US President Donald Trump was trying to persuade Ankara to buy a defense platform compatible with the Northern Atlantic Treaty Organization’s military architecture in place of S-400 batteries, the point man on Nato issues for Turkey’s ruling Justice and Development Party (AKP) was unequivocal in his response. Ahmet Berat Conkar, a member of the Turkish Parliament and head of Turkey’s delegation to the Nato Parliamentary Assembly, said Ankara “offered to fully cooperate with Nato allies to eliminate their concerns with regard to the S-400’s installation.”  Ankara finalized a deal to buy the Russian defense system last December and is poised to become the first Nato member state to operate it. The United States and other Nato allies claim the S-400 cannot be integrated into the Atlantic alliance’s defense shield as it poses problems of interoperability. As Russia will assist Turkey in deploying the S-400, Washington is concerned that Moscow could have access to Nato’s codes, systems and technology, as well as technical information on the F-35A Lightning II jet.

    Germany's Interior Minister Seehofer To Resign After Clash With Merkel Over Migrants - After several hours of negotiations, it appears that Chancellor Merkel and CSU leader Horst Seehofer have been unable to reach an agreement, and according to N-TV, Seehofer told the CSU board meeting the he offered to resign as Germany's interior minister and as CSU party chairman amid the clash over Germany's migration policy, sparing Merkel the need to fire him and potentially preserving the political alliance.Seehofer and his party spent hours finding a response to a hard-fought agreement to reduce migration into the European Union and so-called "secondary migration" between member states hammered out by Merkel at a leaders' summit last week.  Now "he wants to step down as party chairman and interior minister" as he enjoys "no support", the sources said. However, this is where things get complicated because dpa adds that CSU caucus chief Alexander Dobrindt opposes the resignation and will not accept it, putting Germany at a political impasse and potentially in a political crisis in which the CDU and CSU alliance may now break. According to N-tv the meeting of the CSU governing body is now suspended.If Seehofer does resign, it is unclear whether the CSU would seek to remain in coalition with Merkel's CDU and offer a replacement interior minister. Alternatively, it could break up the two parties' decades-long alliance, effectively depriving Merkel of her majority in parliament and pitching Germany into uncharted political waters.According to Spiegel editor Melanie Amann, Seehofer sees few options for the CSU: Either to stand firm on the immigration dispute and risk u ndermining the ruling coalition, or to back down and damage the party’s credibility, reports Spiegel editor Melanie Amann. The third option, offering to leave his post, was possibly in an attempt to boost party members' support of his strategy.

    Merkel and Seehofer make fragile peace — Angela Merkel secured a compromise with her Bavarian partners over refugee policy late Monday, ending a weekslong standoff that threatened to bring down her government and fracture her conservative bloc.Under the terms of the deal, negotiated between Merkel and Horst Seehofer, interior minister and leader of the Bavarian Christian Social Union, Berlin will establish so-called transit zones along Germany’s southern border to allow for accelerated deportations of refugees who are not entitled to seek asylum in the country.“After a hard struggle and difficult days, this is a good compromise,” Merkel said Monday, adding that the agreement “allows us to preserve the spirit of partnership in the EU.”The accord, if accepted by the Social Democrats, who form a grand coalition with Merkel’s Christian Democrats and the CSU, should resolve a long-simmering conflict over refugees that posed the greatest challenge to the chancellor’s authority since she took office in 2005. Like any good compromise, it allows both sides to claim victory. Merkel can say she prevented a German go-it-alone approach that ignores the concerns of its neighbors. And the CSU can argue that it pressured Merkel into accepting harsher border policies than she would have liked.

     Germany’s SPD makes Angela Merkel wait for approval on migrant deal - DW -- Anyone hoping for quick approval by Social Democrats was sorely disappointed. Talks between Chancellor Angela Merkel's conservative CDU, its Bavarian sister party, the CSU, and their junior coalition partner, the center-left SPD, over a new deal concerning migrants ended without a definitive result on Tuesday evening."We couldn't answer all the questions concerning migration that need to be answered, but we did make some important progress," said SPD Deputy Chairman and German Finance Minister Olaf Scholz, after he, SPD Chairwoman Andrea Nahles and other leaders met with their conservative counterparts.Scholz said that further discussions within the coalition would take place on Thursday.On Monday, the CDU and CSU reached a last-minute agreement to head off a potential rebellion by Bavarian conservatives against Merkel. The deal centered on the establishment of so-called transit centers along Germany's border with Austria, which the CSU says would facilitate checks on migrants trying to enter Germany and accelerate deportations.The CSU is under pressure to demonstrate its conservative credentials on migration to head off a challenge from the far-right Alternative for Germany party in Bavaria's regional election in October. But Bavarian conservatives have some work to do to convince the SPD, which hasn't had much good to say about transit centers in the past. And without the Social Democrats, there's no deal.

    Germany Reaches 11th Hour Migrant Deal As Leaders Scramble For Austria, Hungary Cooperation - The leaders of Germany's three-way coalition have agreed to a comprehensive immigration package to deal with migrants seeking asylum, following a multi-week power struggle that almost saw chancellor Angela Merkel out of a job, as well as the almost-resignation of German Interior Minister Horst Seehofer.Merkel's Christian Democrats, the Social Democrats (SPD) and the Christian Social Union (CSU) have all agreed on a compromise package to deal with illegal migration which will strengthen asylum policy. SPD Chairman Andrea Nahles announced the agreement Thursday night after a coalition committee meeting in Berlin, which includes "no camps" for refugee housing as well as an accelerated process for repatriating refugees. Interior Minister Seehofer (CSU) was optimistic about the agreement, whose terms were documented by Welt (translated):

    • The right to asylum does not include the right to choose the European country to receive asylum. For this reason, persons who have already applied for asylum in another European Union member state (EURODAC Cat. 1 entry) are to be rejected directly to the competent country at the German-Austrian border, provided that an administrative agreement or conduct has been concluded with that Member State that he has withdrawn the claimants. In cases where countries refuse administrative direct rejection agreements, the refusal takes place at the German-Austrian border on the basis of an agreement with the Republic of Austria.
    • For the purpose of the transit procedure, the Federal Police shall use its existing facilities close to the border, unless the persons are brought directly to the existing accommodation facility in the transit area of ​​Munich Airport and can return from there to the receiving country. There will be separate rooms in the accommodation for families and persons with special needs. As with the existing airport procedure, the persons do not legally travel to Germany. The rejection will be made within 48 hours.
    • For those asylum seekers who have already been registered in another EU Member State and are found domestically, a special, accelerated procedure will be introduced in the ANKER bodies. In accordance with the special reception facilities already regulated in the Asylum Act, this is standardized in a separate regulation (BAMF procedural sections within one week each, Residenzpflicht, no distribution to the local authorities).

    Merkel Hints At Financial Crisis In Latest Trade War Warning - Two weeks after Daimler AG became the first German car company to cut its earnings forecasts due to trade war concerns (an implicit warning that already despondent European economic data still has room to worsen), German Chancellor Angela Merkel has ratcheted up her doomsaying rhetoric, invoking the memory of the global financial crisis in a warning about the potential fallout should the US continue to press its trade war with China, Europe and the rest of the world.  According to Bloomberg, Merkel warned during a speech before Germany's lower house of Parliament that the levies on European car makers threatened by President Trump and the Commerce Department could potentially be "much more serious" than the US's tariffs on steel and aluminum. Instead, Merkel argued that economic cooperation is far more effective at bolstering economic growth, as the response to the global financial crisis (when the world's largest central banks worked in concert to pump some $14 trillion into the global financial system) demonstrated.  And in what sounded like a bit of denial about the current state of things, Merkel warned that the US must prevent the "trade conflict" with China from blossoming into an all-out "trade war," according to the AFP (as if that hasn't already happened)."The international financial crisis, which ensured that we now act in the framework of the G-20, would never have been resolved so quickly, despite the pain, if we hadn’t cooperated in a multilateral fashion in the spirit of comradeship," Merkel said on Wednesday. "This has to happen." [...]  "It’s worth every effort to try to defuse this conflict so it doesn’t turn into a war," she said. "But of course it takes two sides to do that."

    Italy's Salvini Vows To Create Pan-European Association Of Nationalist Parties - Having taken Italy by storm, and threatening to prematurely terminate the career of German Chancellor Angela Merkel with his staunch opposition to further European migration, Matteo Salvini - leader of Italy's populist League - said on Sunday he wanted to expand its success to create a pan-European association of like-minded, nationalist parties.During a keynote speech at the League's annual gathering in countryside north of Milan, Salvini said the League would govern Italy for the next 30 years, receiving rapturous applause from thousands of flag-waving supporters, according to Reuters."To win we had to unite Italy, now we will have to unite Europe" Salvini boomed adding that he is "thinking about a League of the Leagues of Europe, bringing together all the free and sovereign movements that want to defend their people and their borders.""What we have managed to do this year, next year we will do at the continental level," Salvini said, eyeing the elections for the European Parliament in May 2019.In his appeal to build a network of right-wing, nationalist parties around Europe, Salvini cited France's National Front leader Marine Le Pen, Hungarian Prime Minister Viktor Orban and Austrian Chancellor Sebastian Kurz, among others. The 45-year-old Salvini is enjoying a surge in popularity, with the League now commanding about 30% of support in opinion polls and recently surpassing its coalition partner, the anti-establishment 5-Star Movement, as Italy's largest party. Since an inconclusive March 4 election when 5-Star took 32 percent and the League 17 percent, Salvini has dominated the political agenda with an aggressive and popular campaign against immigration. Salvini, capitalizing on brutal disenchantment with establishment politics in Italy, is now deputy prime minister and interior minister in the coalition that took office on June 1; he said with its tough line on migrants and in negotiations with the EU, the government had done more in a month than its predecessors had done in 6 years.

    More than 200 people drown in the Mediterranean at the weekend --The Mediterranean is turning into a mass grave since European Union states began actively obstructing the rescue work of ships operated by non-governmental organizations. The International Organization for Migration (IOM) registered 204 drowned migrants in just three days last weekend. Since the beginning of this year the number of people drowned in the course of attempting to enter Europe has risen to over a thousand. On Friday, June 28, 103 people drowned, including three toddlers, only to be followed by a further 38 victims on Saturday. They were reported by survivors to be either drowned or missing. A photo of members of the Libyan coast guard carrying the bodies of the three babies was widely spread through social media. On Sunday, another 63 drowned people were registered after the Libyan coast guard retrieved 41 survivors from the sea and brought them back to Libya. The IOM published these figures after its officers in Al-Khums, near Tripoli, had spoken with survivors. One week previously, 220 migrants had drowned in the Mediterranean, bringing the total of deaths in just a few days to over 400. The real number of the dead, however, could be much higher since the IOM documents only reported cases. The dramatic increase of deaths at sea is a direct consequence of the recent decisions made at the EU summit. Last week, the leaders of EU governments meeting in Brussels decided to seal off Europe, massively reinforce the Frontex border police, and work even more closely with the Libyan coast guard. Those apprehended in the course of attempting to reach Europe will in future be locked up in veritable concentration camps. Politicians of all political parties supported this criminal policy in Brussels, including the Greek prime minister Alexis Tsipras (Syriza) and the Social Democrats, Pedro Sánchez (Spain) and Joseph Muscat (Malta). The EU deliberately criminalises the work of NGO ships. The horrific rise in the number of drowned people is directly attributable to the fact that the EU is hampering civilian rescue services, which have saved tens of thousands of lives in recent years. EU governments are preventing NGO ships from leaving port and are therefore implicit in the mass murder of migrants. In Malta, the NGO ships Lifeline, the Sea Fox and Sea-Watch 3 are currently restricted to port, while the Aquarius, which just a few days ago transported more than 600 stranded refugees to Spain, is currently only allowed to anchor in Marseille. The Open Arms, a Spanish NGO ship, is currently being forced to embark on the long journey to Barcelona with 59 migrants on board because Italy, France and Malta have all closed their ports to NGOs.

    In the new climate of fear, our rescue boat turned away from people drowning -   A little after 9.30pm on Monday 18 June, during my watch on the Seefuchs’ bridge, our ship’s command station, I overheard a message on the emergency radio channel. A passing plane had spotted a refugee rubber boat in distress 21 miles off the coast of Libya – just within Libyan territorial waters. On board were 120 people. The plane asked a nearby cargo ship to come to the boat’s aid. The cargo ship reluctantly agreed. On the night of the radio conversation, we were 11 miles from the boat in distress. But the passing plane called the cargo ship rather than us – probably because our tracking system, called the AIS, was malfunctioning. On the radar, there was only one ship closer to the boat in distress, and it was going the wrong way. An hour later, we were the closest vessel. We soon realised the cargo ship wasn’t going to help. Our captain was reluctant to get involved, given Italy’s increasingly aggressive stance towards NGOs. And so we didn’t inform the cargo ship or the plane of our position. Half an hour later, the plane returned to its home base. We called the Italian Maritime Rescue Coordination Centre (MRCC), the governmental body which oversees and authorises rescue operations. Normally we need their permission before we can do anything. But this time they gave us no guidance, other than to tell us to call the Libyan coastguard. In the past, the Libyan coastguard has threatened NGO boats like ours. Perhaps because of this, the captain decided not to contact them.  We headed north and then west, towards Tunisia. The VHF radio was silent for the rest of the night. How is it that a rescue boat was fleeing from, instead of going towards, a boat in need? I think we feared we would become like the Aquarius, stranded at sea, or theIuventa, impounded. If we rescued these people, what harbour would let us in? Would we be accused of people smuggling? Would our NGO be banned? The campaign to criminalise NGOs has worked. We were a rescue boat afraid of rescue work. We were intimidated. And so we motored away, as 120 people likely drowned. We crew members didn’t talk much about that boat. The next day, some even wondered whether the rubber boat had been there at all. On returning to land, I’ve seen no news article mention these 120 people. The United Nations High Commissioner for Refugees reports that last week 220 people drowned off Libya, the deadliest week of 2018.

    Macron warning on Africa migrant centres - French President Emmanuel Macron has told the BBC that EU plans to create migrant processing centres in North Africa will not work unless the process is led by those countries. Speaking during a visit to Nigeria, Mr Macron said many African countries were worried that such centres would act as a pull factor for migrants. No African country has so far agreed to host the centres. EU leaders agreed to explore the idea at a summit earlier this month. Mr Macron said that Europe would be dealing with migration from Africa for decades due to what he called the fundamental problem of unplanned population growth in Africa. He has been criticised for saying the same thing in the past, with some accusing him of repeating colonial rhetoric. However he also said that the EU could not take decisions for African countries. The idea of migrant processing centres in North Africa "can fly, just if some African governments decide to organise it", he said. Mr Macron said his top priority was to discourage people from taking "crazy risks" and putting their lives in danger in order to get to Europe. 

    Denmark’s new laws on immigrant ‘ghettos’ are a chilling look into what happens after the border In the past few news cycles, the discussion about immigration has been focused on the border and on whether we should let people into this country or criminalize their entry and imprison them. But there's a question that comes after who we let in and when, and that's how we treat them when they get here.A lesson in what to absolutely avoid at all costs can be found in Denmark. On Monday,The New York Times reported on the immigrants who live in what the Danish are calling "ghettos." The disturbing article highlights the new laws that the Danish government is in the process of rolling out. These laws curtail the freedoms of the immigrants who have come to Denmark and clearly demarcate them as anything but regular members of society.Per the Times:"Starting at the age of 1, 'ghetto children' must be separated from their families for at least 25 hours a week, not including nap time, for mandatory instruction in 'Danish values,' including the traditions of Christmas and Easter, and Danish language. Noncompliance could result in a stoppage of welfare payments."It's not wrong of the Danish to try to change certain aspects of the culture of people who come into their country. If asylum seekers come from places where "women" are forced to marry when they are still girls, or from places where female genital mutilation is a common occurrence, it's not wrong for a host country to make clear that those kind of immoral actions are not welcome in the Western world.But there are lines. There is nothing OK  about forcing Muslims to teach their children about Christian holidays. If "Danish values" include the idea that covering up is not modest but oppressive, that is not for the government to say — it is for parents to decide for their own children, and children, when they become adults, to decide for themselves.

    Shock EU Court Decision Strikes Blow Against Investment Arbitration - With all the dreary news we’ve seen this week, could you stand some good news? The battle against investor-state dispute settlement (ISDS) got a huge boost in March when the Court of Justice of the European Union (CJEU) ruled in Slovak Republic v. Achmea B.V. (“Achmea”) that ISDS is contrary to EU law. The decision was something of a surprise because the preliminary analysis (“opinion,” in EU-speak) of Advocate General* Melchior Wathelet had suggested that the CJEU rule that ISDS is consistent with EU law.  As you may recall from the Trans-Pacific Partnership negotiations, ISDS is private arbitration of investment disputes between governments and foreign investors. Completely untethered from precedent and with no appeal, arbiters decide if a government has “expropriated” an investment, complied with its duties under a bilateral investment treaty (BIT) or “trade agreement” such as NAFTA, while these establishing mechanisms place no requirements on the investor. The imbalance of requirements under ISDS as well as its actual procedures present numerous opportunities for corporate abuse and, as Professor Susan Sell laid out in her guest post here in 2015, there is no shortage of examples of such abuse. In Achmea, the Dutch insurer Achmea B.V. took the Slovak government to arbitration under the Dutch-Slovak bilateral investment treaty after the government decided to reverse liberalization of its health care system, ultimately deciding to create a single national health insurance program. The arbitrators ruled in favor of Achmea and awarded € 22.1 million to the company Three other cases were filed against the Slovak Republic’s action, including a second case from Achmea B.V. (Achmea II), but their respective tribunals all ruled they did not have jurisdiction. In Achmea, the government sought annulment of the award first from the Higher Regional Court of Frankfurt, which ruled against it, and then from the German Federal Court of Justice, which referred the case to the CJEU for a ruling on the relevant EU law (this is standard procedure in EU law). A number of EU Member States, as well as the European Commission, filed briefs in this case. According to Reuters, “The Czech Republic, Estonia, Greece, Spain, Italy, Cyprus, Latvia, Hungary, Poland, Romania and the European Commission submitted observations in support of Slovakia’s arguments.Germany, France, the Netherlands, Austria and Finland contended that such clauses were valid.”

    Brexit: encapsulating the incomprehension - Booker does aviation this week, his main item in a column headed: "As Brexit looms, could we be heading for chaos in the skies?"  "In all the excitement over that Heathrow third runway", he writes, "there has been remarkably little mention of recent warnings from the European Commission that, within few months, Heathrow could, at least for a while, be closed to international traffic altogether". These are the two Notices to Stakeholders, the first issued in January on EU rules in the field of air transport and the second on EU aviation safety rules issued in April. Neither of these will come as any surprise to readers here, and we've dealt with Heathrow in some detail here, in the blog. But this is an issue which the legacy media have been unwilling to touch, so Booker too can take his turn to be ignored, in his own ghetto.  But not only is the bulk of the media ignoring this, we get the likes of Charles Moore pontificating about the EU threatening "absurdities such as grounding our aircraft". This is a man who the Telegraph hypes as their star columnist who "covers politics with the wisdom and insight", yet he has so little "insight" that he is unable to deal with the reality of how the modern world works.  Yet, what we are dealing with here is a very simple concept. In being part of the EU, the UK has signed up to a series of treaties which have transferred certain powers from the UK government to the institutions of the European Union.  One set of those powers covers the regulation on the safety of civil aviation and the right to issue (or mandate the issue of) safety certification in fulfilment of our international (ICAO) obligations. Crucially, both the EU safety regulation and the treaties made with third countries ensure that, because UK standards are embedded within the EU system, they are recognised by all other member states, Efta members and other third countries. Conformity with EU regulations is also taken as evidence of conformity with ICAO standards.  It stands to reason, therefore, that when the UK drops out of the EU, all the safety certification applying to the UK (or issued by UK agencies such as the Civil Aviation Authority – the CAA) will no longer be recognised by EU Member States, Efta states or another of the third countries which deal through the EU.

    Brexit: bonfire of the vanities -- Last Saturday we had Charles Moore writing of Brexit that: "Of course the implementation of any decision that changes the life of a nation is fantastically complicated".   Yet, on 6 January 2017 – just short of two weeks before Mrs May's Lancaster House speech – this same Charles Moore was writing under the headline: "Only those who don't want to leave see Brexit as mind-blowingly complicated".  “Surely", he asked rhetorically, "Brexit is in that important category of things which are simple, but not easy?" And then came his punchline: "It is in the interests only of those who do not wish us to leave to insist that it is so mind-blowingly complicated that they must be put in charge of it".  Basically, Brexit is like that famous description of Irish politics: "if you think you understand it, you haven't been listening". Only somebody profoundly ignorant of the processes involved could begin to believe that it was "easy". And it has taken Charles Moore nearly eighteen months to graduate from the view that it was indeed easy, to becoming "fantastically complicated". Even then, this fool of a man dismisses the prospect of UK aircraft being grounded as one of those "absurdities" which the EU is threatening. And, he says, if Mrs May understood what Brexit was about, her response would be to "outdo even M Barnier himself in her expression of disdain".  Clearly, Mr Moore has progressed a little way, but not very far. And he is unlikely to get much further. He is bedded down with the Tory "Ultra" group belief system. And together with his profoundly ignorant friends in the Telegraph, he is still convinced that there are no insurmountable problems that cannot easily be overcome to bring us to the sunlit uplands.

    Brexit: EU accused of making false claims over aid contracts The EU has been accused of putting the lives of the world’s poorest at risk after warning off British development organisations from involvement in its humanitarian aid programmes by claiming they would lose all funding in the event of the a no-deal Brexit.   Officials working under Martin Selmayr, the most senior aide to the European commission president, Jean-Claude Juncker, have inserted disclaimers in aid contracts warning UK NGOs that they will be dropped as a partner in programmes should Britain crash out of the EU next year.  But the commission – which has recently increased efforts to prepare for a no-deal scenario – has been accused of over-reaching. It emerged that British aid programme providers should still remain eligible for many contracts, due to the UK’s membership of the Organisation for Economic Co-operation and Development, an intergovernmental body. The contracts include programmes tackling sexual violence in Zambia. The UK’s aid sector is widely regarded as one of the world’s most effective and there are fears that the damage has already been done to providers and the causes they serve in dissuading leading organisations from involvement in key projects.  The development is likely to inject fresh tension into Brexit negotiations at a critical time. It follows a series of rows over the EU’s Brexit preparations.

    Brexit: ‘Significant planning’ underway to guarantee medical supplies don’t run out in event of no deal, says NHS chiefNHS officials are now planning explicitly for protecting public health in the event of a Brexit no-deal scenario, less than a year after its chief executive said ministers had not given any orders to do so. The head of NHS England, Simon Stevens, said that there is now “significant planning” for protecting the NHS including ensuring vital medical supplies can get through if Britain crashes out of the EU.  The NHS boss was asked on BBC One’s Andrew Marr Show whether comments he made to MPs on the Commons Health Committee in October 2017, that his organisation had not been asked to plan for a no deal scenario, had changed. Mr Stevens said: “There is immediate planning which the health department, with other parts of government, are undertaking around securing medicine supply and equipment under different scenarios, and that will obviously crystallise when it’s clear later this autumn what the UK’s position will be.” “Nobody’s in any doubt whatsoever that top of the list in terms of ensuring continued supplies for all the things that we need in this country right at the top of the list has got to be those medical supplies.”

    Jaguar Land Rover: Brexit threatens plan to spend $100 billion in UK - Jaguar Land Rover said Thursday that if the United Kingdom leaves the European Union without maintaining a smooth trading relationship with the bloc, it would wipe out more than £1.2 billion ($1.6 billion) of the company's profit a year. "We urgently need greater certainty to continue to invest heavily in the UK and safeguard our suppliers, customers and 40,000 British-based employees," CEO Ralf Speth said in a statement. He said the company plans to spend £80 billion ($106 billion) in the country over the next five years but cautioned that "this would be in jeopardy should we be faced with the wrong outcome." Jaguar Land Rover, which is owned by India's Tata Motors (TTM), is the latest major company to warn about the potential economic damage from a messy Brexit. Shares in Tata Motors fell 2% in Mumbai to reach their lowest level since 2013. European planemaker Airbus said last month that a UK exit without a deal on trading arrangements with the EU would be "catastrophic," throwing its production into chaos and threatening its future in the country. Car manufacturers, which rely on complex international supply chains, are worried that Brexit will lead to new trade barriers and delays at the borders. 

    Court to hear Brexit challenge by 97-year-old WW2 veteran -- A challenge against the legality of the EU’s Brexit negotiations brought by a 97-year-old British veteran is to be heard by five judges at the European court of justice this week. Harry Shindler, who lives in Italy, and 12 other Britons who live in various member states, will argue that the 2016 referendum was discriminatory and illegal because they – and more than 1 million other British expatriates – were denied a vote. The hearing in Luxembourg on Thursday has the capacity to derail Brexit, Shindler believes, although his previous legal attempts to widen the franchise to include all Britons living overseas failed at the UK supreme court shortly before the poll two years ago. Lawyers for Shindler and the other claimants allege they were treated like “second-class citizens” and unfairly deprived of their right to vote merely because they exercised their freedom of movement within the EU. They were discriminated against on the basis of their residence, it is said. “I’ve been asked to go to Luxembourg but I’m 97 and I restrict my travelling,” Shindler told the Guardian from his home in Porto d’Ascoli above the Adriatic coast. “I’ve told them I will be by my telephone if they require me to testify.” London-born Shindler served in Italy during the second world war and took part in the 1944 liberation of Rome. He married an Italian and went back to live there on retirement in 1982. He was awarded an MBE in 2014 for his services to Anglo-Italian relations. “We are called expatriates,” Shindler added, “but we are not all old or retired. We are journalists, interpreters, teachers and do all sorts of other jobs – we are representative of the general run of the British nation.” His case is being presented by a Bordeaux-based lawyer, Julien Fouchet of Cornille-Pouyanne Avocats, who will tell the court the EU’s negotiations with the UK over Brexit should not take place because the British negotiators are not representative of the British people. The vote, he will say, was illegal because those most affected by the decision to leave the EU were denied the opportunity to participate and express their opinions.

    UK’s latest Brexit proposal is unrealistic, say EU officials - A draft of Theresa May’s Brexit plan has already been dismissed as unrealistic by senior EU officials, who say the UK has no chance of changing the European Union’s founding principles.The prime minister is gathering her squabbling ministers at Chequers on Friday for a one-day discussion to thrash out the UK’s future relationship with the EU. But EU sources who have seen drafts of the long-awaited British white paper said the proposals would never be accepted.“We read the white paper and we read ‘cake’,” an EU official told the Guardian, a reference to Boris Johnson’s one-liner of being “pro having [cake] and pro-eating it”. Since the British EU referendum, “cake” has entered the Brussels lexicon to describe anything seen as an unrealistic or far-fetched demand.May’s white paper is expected to propose the UK remaining indefinitely in a single market for goods after Brexit, to avoid the need for checks at the Irish border. While the UK is offering concessions on financial services, it wants restrictions on free movement of people – a long-standing no-go for the EU.Jean-Claude Piris, a former head of the EU council’s legal service, said it would be impossible for the EU to split the “four freedoms” underpinning the bloc’s internal market, which are written into the 1957 treaty that founded the European project: free movement of goods, services, capital and people. “The EU is in difficulties at the moment; the one and only success which glues all these countries together is a little bit the money and the internal market,” Piris said. “If you fudge the internal market by allowing a third state to choose what they want ... it is the beginning of the end.”Some sources expect the UK to abandon these plans. In an attempt to sweeten the pill they are prepared to offer an extra year of transition to smooth Britain’s EU exit. The British government believes the EU is guilty of its own cherry-picking, for example, by demanding the status quo on fishing quotas in exchange for zero tariffs on goods. Moreover, British officials think a single market in industrial goods is a win for the EU, which sells a surplus of manufactured products to the UK. Piris disagrees: “It is in their short-term economic interest, but it is a short-term myopic view, it is not what the leaders of the EU will do.”

    What Theresa May will ask her Cabinet to agree on Friday - Robert Peston - This is one of the more important blogs I've written recently, because it contains what well-placed sources tell me are the main elements of the Prime Minister's Brexit plan - which will be put to her Cabinet for approval on Friday.I would characterise the kernel of what she wants as the softest possible Brexit, subject to driving only the odd coach over her self-imposed red lines, as opposed to the full coach and horses. Let's start with the PM's putative third way on a customs arrangement with the EU, which has been billed by her Downing Street officials as an amalgam of the best bits of the two precursor plans, the New Customs Partnership (NCP) and Maximum Facilitation (Max Fac).On Monday I described this supposed third way as largely the NCP rebranded - which prompted howls of outrage from one Downing Street official.But I stand by what I said, because the new proposal of the PM and her officials, led on this by Olly Robbins, retains the NCP's most controversial element, namely that the UK would at its borders collect duties on imports at the rate of the European Union's common customs tariff.The UK would in that sense be the EU's tax collector, and although the UK would have the right to negotiate trade agreements with third countries where tariffs could be different from the EU's or zero, companies in the UK importing from those countries would have to claim back the difference from Her Majesty's Revenue and Customs (HMRC), much in the way they currently claim or pay different VAT rates when trading with the EU.The reason why - from a bureaucratic if not economic viewpoint - the UK would in effect remain in the EU's customs union is that there is no other way of avoiding border checks between the Republic of Ireland and Northern Ireland.  Or at least that is what the PM and her officials now believe. To be clear, this would be an asymmetric agreement with the EU: Theresa May may ask EU governments to collect customs duties on behalf of the UK from companies based in their respective countries, but she knows they will respond with a decisive no, nay, never.

    Rebels face down May over Brexit trade deal -  Theresa May faces the worst rebellion of her leadership today as cabinet Brexiteers attempt to force her to push for a harder exit from the European Union than she is planning.Last night seven cabinet Brexiteers held closed talks at the Foreign Office to discuss their strategy before today’s meeting at Chequers, at which Mrs May hoped to persuade the whole cabinet to sign off on her Brexit plans. It also emerged that last night Boris Johnson held talks with David Cameron, the former prime minister. A source said that Mr Cameron persuaded the foreign secretary that Mrs May’s customs compromise plan is the only one that Parliament will accept.One option could be to formally say they are rejecting the paper put forward by the prime minister and confront her with an alternative for a harder exit based on the deal that Brussels has negotiated with Canada.Hardline Leave supporters were horrified to find out this week that Mrs May was preparing to water down her original proposals and in effect keep Britain in parts of the single market.According to a proposal leaked to The Times, the prime minister wants to buy off Brexiteers by reasserting her commitment to end free movement. She will concede that this means that Britain will no longer be in the single market for services, which accounts for 80 per cent of the economy.Mrs May will not spell out how she intends to replace free movement, however, in a move causing suspicions among her critics that she may effectively go back on her word in the autumn. A separate government document leaked to The Spectator conceded that Mrs May’s plan would prevent the UK from striking a comprehensive free-trade deal with the United States. Until now Downing Street has maintained the illusion that Britain can sign significant trade deals while also maintaining full access to EU markets. Mrs May’s plan would enable regulatory alignment with Europe — avoiding a hard border with Ireland — and also a trade deal with the US. The Brexiteer group intend to confront Mrs May today with a plan for her to stick to her promise to fully leave the single market and customs union and negotiate a Canada-style free-trade deal. “They believe they can shape things,” a senior aide said.

     Brexit: Barnier urges Theresa May to reconsider rejected Irish plan - The EU's chief Brexit negotiator has urged Theresa May to reconsider her rejection of their plan to solve the Irish border, which she has previously said “no UK prime minister” could agree to. In a speech in Brussels while the UK cabinet tried to hammer out its own policy at a Chequers away day, Michel Barnier warned the UK that “we do not have much time” to find a solution. He urged both sides to “de-dramatise” the EU’s backstop plan and argued that it did not really entail a new border within the UK as sometimes claimed, but simply “technical checks” on goods crossing the sea. “We are not asking for any new borders between Northern Ireland and the rest of the UK. The whole or part of the backstop can be replaced by the agreement on the future relationship,” he said.“We must all de-dramatise this backstop. We will obviously need to clarify how and where these controls will be done but ultimately these are only technical controls on goods – no more, no less.”The timing of the speech appears to make it a direct appeal to the PM’s cabinet, who are likely to be following the negotiator’s words closely while they try and hash out a coherent policy at Ms May’s country retreat.The EU has effectively suggested Northern Ireland stay in the customs union and continue to follow single market regulations. This would prevent a hard border on the island of Ireland but would introduce customs and regulatory checks for goods on ferries between Northern Ireland and Great Britain – though no passport checks for people. This “backstop” would apply “unless and until” another solution was found to prevent a hard border: either a specific solution for Northern Ireland or an overarching trade deal between the UK and the EU that removed the need for checks.The UK has rejected the EU plan and says it wants to remove the need for a hard border with a trade deal or backstop that applies to the whole UK. Part of the opposition comes from the DUP, a Northern Irish unionist party on which Theresa May currently relies for a majority in the House of Commons. The EU has said there can be no Brexit deal without solving the Irish border question, and a no deal is expected to be an economic disaster for the UK.

    Parents Furious As UK Secondary Schools Ban Skirts To "Accommodate" Trans Students - One month after a private secondary school in England banned its male students from wearing shorts during the summer - instead requesting that they wear a more "gender neutral" ensemble that includes a skirt, dozens of private schools have taken up the banner of intersectional feminism and banned their female students from wearing skirts as part of their uniforms. The reason? Because the "growing" number of transgender students at these schools aren't comfortable with traditional "gendered" uniforms, according to RT. Instead, secondary schools like the Priory School in Lewes, East Sussex, are asking female students to "accommodate" their transgender peers by wearing trousers, just like male students do."We have a small but increasing number of transgender students and therefore having the same uniform is important for them," said Headteacher Tony Smith. However, some parents have chafed at the fact that they weren't consulted about the ban, and others have argued that female students should still have the option of wearing a skirt, according to RT.Diane Burdaky, parent of a pupil at Philips High School told RT that there had been no consultation process and that the children did "not want to wear trousers all the time."She said: "I was very shocked. There was no consultation with any parents or students. There was no explanation for the ban. No reasons given whatsoever. I know the children at school do not want to wear trousers all the time."Copleston High School in Ipswich has placed skirts on a list of "inadmissible" items - along with "skinny jeans and facial piercings." Eight secondary schools in Ipswich have now banned skirts and have opted to become "trousers only" schools. Some schools have opted to couch their skirt bans with the excuse that skirts - which female students have been wearing for decades - unfairly sexualize female pupils.

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