Is the Fed's Floor Falling Out? -- Andy Harless - David Beckworth has a piece up at Alt-M arguing that Trump's fiscal policy is causing problems for the "floor" system the Fed now uses to implement monetary policy. Under the floor system, the Fed sets the rate of interest it pays on bank reserves, and it can then keep the banking system flush with cash without overstimulating the economy, since banks will prefer to hold excess cash as reserves. It only works if the interest rate on reserves is above the rate banks can earn in the private market, otherwise they will drain their reserves to buy other assets. A loose fiscal policy, David argues, is raising market rates through Treasury borrowing, thereby making it hard to maintain the floor system.I take a different view: the Fed's current predicament, I would argue, says only a little about current fiscal policy but a lot about past monetary policy. In particular, it says that, contrary to much conventional market wisdom at the time, monetary policy was too tight during the zero interest rate period. But I'll get to that.First, let's ask: is the floor system really in danger? I would say, no, or rather, it is only in danger if the Fed doesn't really like it. In principle there is no particular problem with continuing the floor system if the Fed wishes to do so.The floor system always depends on having an adequate supply of base money. If there's not enough base money, the market rate rises, and the intended floor is no longer binding. How much base money is enough? That's something the Fed has to make an educated guess about. If it's expecting a normal fiscal policy and instead gets a big tax cut paired with a lot of new spending, then it will find that its educated guess was wrong and the required amount of base money is more than it expected. That's what's happening now. But the situation is easily remedied. If the Fed wishes to continue the floor system, it simply has to create more base money through open market operations. Or alternatively, it can raise the interest rate on reserves so that it is no longer in danger of being below the market interest rate. But the Fed doesn't seem inclined to do the latter: there is no particular sign that interest rate pressure from fiscal policy is causing it to adopt a faster schedule for raising rates.
Why One Bank Thinks The Fed Has No Choice But To Launch QE4 Next Year -- Yesterday, none other than former NY Fed strategist and current Credit Suisse analyst Zoltan Pozsar, acknowledged by many as the authority on repo market dynamics, shadow liquidity and Fed balance sheet strategy, warned that the U.S. central bank may soon have to make a choice between activating an overnight facility for repurchase agreements or halting its balance-sheet reduction earlier than many market participants expect. And, as Bloomberg reported, Pozsar said that policy makers are unlikely to pursue the option of a new facility until alternatives have been exhausted, meaning a premature end to the taper is the most likely outcome. Meanwhile, both Morgan Stanley and Royal Bank of Canada analysts said last month the balance-sheet runoff could end as early as 2019, while Goldman Sachs strategists in May said they’re assuming an end around April 2020. “A rethink of the Fed’s operating regime will be necessary,” Pozsar wrote. "We are transitioning from an environment where reserves are excess to an environment where collateral is excess. The Fed’s monetary toolkit has to adapt." The dilemma facing the Fed is how to keep the overnight fed funds rate within its target band as it tries to normalize policy. The task has been complicated, as Bloomberg adds, by the Treasury's need to finance the growing federal budget deficit and a deluge of bill issuance that’s helped push higher a whole swath of short-term funding rates, including the effective fed funds rate and forced the Fed to decouple the IOER from the upper band of its fed funds rate corridor. But Pozsar believes that reductions in this rate won’t push overnight rates lower and there are “more effective and less disruptive ways of dealing with the glut of bills.” So what is the alternative? Pozsar argues that bank reserves, while still in the trillions, aren’t overly abundant and thus there isn’t a lot of room for the Fed to shrink its balance sheet. To validate his point, Poszar shows the lack of use of the Fed’s overnight reverse repurchase facility, which "tells us that every penny of reserves is bid and that balance sheet taper from here will cut right into the system’s liquidity bone." The only option, as the above considerations suggest, is for the Fed to keep hiking rates in hopes of keeping inflation in check even as it gradually brings its balance sheet shrinkage. But what happens next? Well, according to BMO analyst Ian Lyngen, the Fed may have no choice but to begin expanding its balance sheet some time in the next year. So what is the alternative? Same as Pozsar, Lyngen believes that it wouldn’t be "prudent risk management for the Fed to run a serious risk of hitting a non-linear kink point in the reserves demand curve, so would expect them to cease balance sheet roll-off with a sizable buffer." This would "imply a 2019 end-date to the balance sheet run-off program; markedly earlier than market appreciates." And the punchline: QE4 is now on deck. In fact, relatively soon afterwards the Fed may need to begin expanding its balance sheet once again to maintain sizable excess reserves in the system.
What counts as an inverted yield curve? - Kevin Erdmann - I have previously wondered about the actual measure we should use for yield curve inversion. My impression is that generally, the absolute flat level is considered the inversion to watch for, and that, if anything, inversion at lower interest rate levels is considered less dangerous because low rates are stimulative. To the extent that that is true, I think it is an example of how looking at the capital asset pricing model upside down can behelpful. Low rates aren't stimulative. Low real long term rates are, themselves, a sign of risk aversion and contraction. And, I have noticed that when interest rates were high, inversions were a lot deeper while inversions at low rates have been shallow. This makes sense, because the closer you get to the zero bound on nominal yields, the more option value there is in long term rates. In addition, the inflation premium will tend to revert to long term norms, so when rates are high, it is easier for long term rates to decline with falling inflation expectations. Here is a scatterplot of the fed funds rate over time compared to the 10 year rate. I have also added a 45 degree line to show where inversion would happen (both rates being the same). It seems like a pretty general rule that inversions are deeper at higher rates.Note that at very low rates, the spread bottoms out at more than zero. In fact, the curve never inverted before the 1957 and 1960 recessions. Rates were very low then. Anyway, I finally sat down and looked at the numbers. I found the month with the lowest yield curve slope (10 year yield minus federal funds rate) before each of the last 9 recessions, and I noted the Fed Funds Rate and the 10 year rate at each of those months.Then, I regressed the 10 year rates against the corresponding federal funds rates for each of those 9 months. The relationship is so linear, I almost don't trust it. Here, I have added the current rates, along with rates from 1 and 2 years ago. We are basically right on the trendline that marks the deepest inversion point for the previous 9 recessions. But, oddly, we were also on the trendline one and two years ago.
CBO Cuts 2018 GDP Outlook, Sees Fewer Fed Rate Hikes - Four months after the CBO surprised US economy watchers by releasing an especially strong outlook for 2018 US GDP, which it said would hit 3.3%, on Monday afternoon in its latest projections, the CBO unexpectedly trimmed its 2018 real GDP forecast to 3.1% citing concerns over rising trade war coupled with higher inflation. The Congressional Budget Office kept its 2019 GDP growth forecast unchanged at 2.4%, and also trimmed its 2020 outlook to 1.7% from 1.8% in April. While the 2018 cut will come as a disappointment to the Trump administration, it was still 0.6% points faster than the pace of its growth in 2017. The pickup in growth is largely the result of increases in government spending, reductions in taxes, and faster growth in private investment it said.The catalyst for the cut is the risk of escalating trade war: the CBO admits that "higher tariffs on more imported products could add to inflationary pressure, which in turn would not only reduce the purchasing power of domestic income but also increase the costs of domestic production."A sizable uncertainty in the U.S. trade and inflation forecast stems from recent changes to U.S. import tariffs and the retaliation of the country’s key trading partners. The renegotiation of the North American Free Trade Agreement (NAFTA) similarly presents the risk that trade and inflation may differ from CBO’s projections.Meanwhile, “retaliatory tariffs on U.S. exports are likely to reduce the profitability of U.S. businesses whose products are targeted by those tariffs."The CBO also echoed the Fed's recent warnings noting that the "heightened uncertainty about trade policy could discourage businesses from making capital investments that they might otherwise have made."It also cautioned that "recent volatility in equity markets might indicate that such uncertainty is already taking a toll on the value of U.S. businesses."
Q3 GDP Forecasts --From Goldman Sachs:We lowered our Q3 GDP tracking estimate by one tenth to +3.2% [Aug 16 estimate]. From Merrill Lynch: We nudged down 3Q GDP tracking by a tenth to 3.3%. [Aug 15 estimate]. And from the Altanta Fed: GDPNow The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2018 is 4.3 percent on August 16, unchanged from August 15 after rounding. [Aug 16 estimate] From the NY Fed Nowcasting Report The New York Fed Staff Nowcast for 2018:Q3 stands at 2.4%. [Aug 17 estimate]CR Note: Since it is early, the range of estimates are wide. These estimates suggest real annualized GDP in the 2.4% to 4.3% range in Q3.
It looks like Trump is creating the kind of economy he promised --Is President Trump fulfilling candidate Trump’s promises?You can make a case that he is, based on some surprising and widely unexpected economic developments. Vice President M ike Pence, writing in The Des Moines Register, put it succinctly: “The evidence is clear: America is back.” He adds, “It’s no accident.”Pence and other Trump enthusiasts can point to increasing macroeconomic growth. Growth rose 4.1 percent in the second quarter and is up more than 3 percent for the year. Unemployment was down to 3.9 percent in July. The S&P 500 stock index is up 6 percent since the Trump presidency, while the rest of the world’s stock markets are down 6 percent. These are numbers any recent administration would boast about.More notable are positive trends among subgroups that weren’t doing so well before Trump took office. Former Obama administration chief economic adviser Jason Furman, writing for Vox, notes that in the past three years “recent wage growth . . . at the low end of the wage scale” is stronger than growth among the higher-paid. Similarly, Bloomberg columnist and portfolio manager Conor Sen makes the point that job growth has been greatest among “goods-producing workers and the least-educated workers.”Both Furman and Sen contrast current trends with those in the 1998-2001 period of torrid economic growth, when income gains were concentrated at the top of the economic spectrum and employment gains were concentrated in office jobs and “meds and eds” — the government-financed or heavily regulated health care and education sectors.So maybe growing income inequality isn’t inevitable after all. And maybe the economic prospects of groups clustered at the low end of the economic scale are not as dire as has long been assumed.
America’s debt has exploded. Why does no one care? -- Robert E. Rubin -- At a panel I recently moderated in New York about our country’s unsustainable fiscal outlook, someone asked a simple question: So what? Nothing bad has happened despite immense fiscal deterioration — our debt-to-GDP ratio has more than doubled in less than 20 years, from 33 percent in 2000 to 78 percent today , and is on course to reach nearly 100 percent in 10 years and continue rising — so why worry now? These are good questions, and they reflect a precept I learned years ago: Substantive fiscal policy work is essential, but all the good policy thinking in the world won’t matter unless the politics works. Without good politics, the policies won’t be implemented. And the politics of fiscal discipline have not been effectively addressed by too many of those who are deeply concerned about our country’s economic future — including me. Panels such as the one I led bring together the converted. Now, the imperative must be to develop a political strategy, and, in that context, a narrative, that persuades the broad American public that its economic well-being depends on getting our fiscal house in order. And that, hopefully, will impel elected officials and candidates to change their approaches to fiscal matters. There are many better qualified than I to devise the political strategy and narrative. But it seems to me we should begin by answering the two questions posed at the panel: So what? And why now? Despite rising debt, interest rates have remained low, and a fiscal crisis has not occurred. That is because private demand for business investment has been sluggish in a slow recovery, the Federal Reserve has provided liquidity through its unconventional monetary policy, and financial markets often ignore unsustainable fiscal conditions for an extended time. Our ability to borrow in our own currency doesn’t eliminate these risks. Similarly, our diminished fiscal resilience hasn’t mattered because of the absence of economic or geopolitical emergencies. Business confidence has not been affected because businesses often ignore unsustainable fiscal conditions for a lengthy period before losing confidence. Vitally needed public investment — everything from infrastructure to education and lifelong learning — might be deficit-funded, like the misguided 2017 tax cuts, but ultimately the fiscal pressure to scale back investment will be intense. These adverse effects have not been felt for a long time, masking our fiscal reality and reducing pressure to act. But, while the “when” is uncertain, the “if” is not. Also, the longer we wait, the greater the damage — and the harsher the response needed.
Who Bought the $1.36 Trillion of New US National Debt over the Past 12 Months? - Wolf Richter • Russia, Japan, and the Fed dumped, China hung in there…. But who bought?“Official” foreign investors – this would be central banks, governments, etc. – and private-sector foreign investors held $6.21 trillion of US Treasury Securities at the end of June, up by $61 billion from a year earlier, according to the Treasury Department’s TIC data released Wednesday afternoon.But over the same period, the US gross national debt, fired up by a stupendous spending binge, soared by a breath-taking $1.36 trillion. So who bought this $1.36 trillion in new debt? The largest holder of marketable Treasury securities remains China, whose holdings in June fell by $4.4 billion from May to $1.18 trillion, within the same range since August 2017, despite escalating threats and counter-threats over trade. But Japan has been systematically reducing its Treasury holdings. They’d peaked at the end of 2014 at $1.24 trillion. In June, its holdings dropped by $18.4 billion from May, to $1.03 trillion, the lowest since October 2011. Russia never held as many Treasury securities as China and Japan. But it stands out because it has liquidated 90% of its holdings since May 2013. At the time, it held $153 billion in Treasuries. Then it started shedding them. By March, it was down to $96.1 billion. In April, it dumped $47.4 billion. In May, it liquidated another $33.8 billion of its holdings and disappeared from the TIC’s list of the 33 largest foreign holders of Treasuries. That was a milestone. In June, it just hung on to what it had and ended the month unchanged at $14.9 billion: China’s and Japan’s outsized role as creditor to the US government has been diminishing in proportion to the US gross national debt for two reasons: The total pile of debt has soared; and the holdings of China and Japan have edged down. At the end of 2015, their combined holdings amounted to nearly 13% of the total US debt. By the end of June, this was down to 10.4% (green line), with Japan’s holdings (blue line) now down to 4.9% of total US government debt, and China’s stash (red line) down to 5.6%: Perhaps not so ironically: Of the 12 largest holders of US Treasuries, after China and Japan, seven are tax havens for foreign corporate and/or individual entities (bold): […] The Fed, Japan, Russia, and whoever might be selling. But Americans are buying avidly – now that yields have come up substantially, with the one-month yield at nearly 2%, the one-year yield at 2.45%, and the two-year yield at 2.61%.
New US military budget halts Open Skies pact, almost axes nuclear arms reduction deal with Russia - The US has suspended its Open Skies Treaty with Russia after President Donald Trump signed a giant 2019 defense budget bill. Lawmakers also tried to derail a milestone nuclear arms deal that has been in place since 2011. Trump signed the $716 billion National Defense Authorization Act (NDAA) on Monday, and it will come into effect ahead of the new fiscal year in October. But some key deals with Russia were targeted by lawmakers.The 1992 Open Skies Treaty, which allowed for mutual observation flights, was suspended. Congress wants President Trump to penalize Russia for what it says are violations of the treaty. However, Moscow says the charges are unfounded and maintains that it has always acted strictly in accordance with the agreement. US lawmakers also suspended funding for any modifications to America’s own surveillance planes. Technical troubles with the ageing US spy fleet have left Washington unable to actually carry out the full number of spy missions over Russia that are allowed under Open Skies. Only 13 of the 16 overflights allowed in 2017 were actually flown, according to Michael Krepon, expert at arms control blog network Arms Control Wonk. Amending the biggest-ever US military budget, some House lawmakers also sought to insert several provisions that would see Washington’s removal from nuclear arms treaties with Moscow. The House would have derailed the 2010 New START nuclear arms control treaty, until Trump certified that he raised the issue of Russia’s new nuclear weapons systems with Moscow. But this was blocked by the Senate. Experts say the House’s attempt to jeopardize the future of the New START treaty – which is due to expire in 2021 – has much to do with uneasy relations between lawmakers and the Trump administration. “You can’t be certain about anything, political climate in the US may change in a matter of minutes,” “Of course, responsible experts and politicians in Russia and the United States do understand how important this treaty is, not only for our countries, but for the rest of the world,” he continued. The analyst warned that if Moscow and Washington fail to sign a new version of the START treaty, an arms race will follow, creating “an enormously dangerous situation.”
US ‘shoots itself in the foot’ suspending Open Skies Treaty with Russia – retired general - America's 2019 defense budget has suspended US-Russia ties under the milestone Open Skies Treaty, designed to build trust and reduce tensions. The US could go even further on the heels of an anti-Russia frenzy, an analyst told RT. Donald Trump has signed the 2019 National Defense Authorization Act (NDAA) into law, one part of which blocked funding for US commitment to Open Skies Treaty with Russia. The landmark accord, signed after the end of the Cold War, has effectively been suspended until the president certifies to Congress that penalties have been imposed on Russia for what the law said were treaty violations by Moscow. A Russian military expert has provided his take on what to expect from the US given this recent move. Evgeny Buzhinsky, retired Lt Gen and Board Director at international security NGO PIR-Center, suggested the US suspended Open Skies cooperation due to their ageing Air Force jets capable of flying observation missions. “We’ve built two new Open Skies-capable jets fitted with digital equipment, the Tupolev Tu-214ON, but they still use old ones,” he said, adding, “the Americans don’t like finding themselves in a flawed situation.” He explained Washington is not actually walking away from the Open Skies Treaty. What the US military will do is cease requesting observation flights over Russia, while at the same time rejecting similar requests from Russian counterparts. “They could do anything on the back of this anti-Russian hysteria, they could shoot themselves in the foot or head,” he suggested. A draft version of the 2019 NDAA would have also jeopardized US commitment under the landmark Strategic Arms Reduction Treaty (START). Signed back in 2010, the agreement ensures strategic parity between the two nuclear superpowers. Under the treaty, each side is allowed to possess no more than 800 intercontinental ballistic missiles (ICBMs), submarine-launched ballistic missiles and strategic bombers in total, while the designated number of deployed nuclear warheads is limited to 1550 for each side. The treaty also requires that Moscow and Washington exchange information about their nuclear arsenals.
Giving Trump Carte Blanche For War - Have you ever heard of Senate Joint Resolution 59 (S.J.Res. 59)? Neither had I. A friend of mine saw a blurb about it on an obscure national security blog and brought it to my attention. At first glance it didn’t seem to be any big deal. It’s inelegantly named the “Authorization for Use of Military Force (AUMF) of 2018.” It was introduced on April 16, 2018 by Senators Bob Corker (R-TN), the chairman of the Senate Foreign Relations Committee (SFRC), and Tim Kaine (D-VA). Officially, the bill would “Authorize the use of military force against the Taliban, al-Qaeda, the Islamic State in Iraq and Syria, and designated associated forces, and provide an updated, transparent, and sustainable statutory basis for counterterrorism operations.”It’s hard to oppose a bill that would “keep Americans safe,” as Corker said in the SFRC hearing. But this bill is so bad, such an affront to our freedom, such an attack on our civil liberties, that we should be compelled to oppose it. S.J.Res. 59 is bad for a number of reasons.First and most importantly, it would provide blanket permission for the president to launch a military attack of literally any size and intensity whenever he wants without specific congressional approval. That seems obviously unconstitutional to me, although I’m not a constitutional scholar. Still, the constitution says in Article I, Section 8 that only Congress shall have the authority to declare war, among other things military. It does not allow the president the ability to launch a war. Second, according to Marjorie Cohn, professor emerita at the Thomas Jefferson School of Law and former president of the National Lawyers Guild, it also would write the president a “blank check to lock up Americans who dissent against U.S. military policy.” That’s right. If you oppose U.S. military policy, the president would have the right to lock you up indefinitely without charge. Certainly, our government already does that. But we’re told that this happens to the worst of the worst—those terrorists who happen to be American, but who also have planned large-scale terrorist attacks against the country or its citizens or who have taken up arms against the United States.
Donald Trump, Gun-Runner for Hire --American weapons makers have dominated the global arms trade for decades. In any given year, they’ve accounted for somewhere between one-third and more than one-half the value of all international weapons sales. It’s hard to imagine things getting much worse — or better, if you happen to be an arms trader — but they could, and soon, if a new Trump rule on firearms exports goes through. But let’s hold off a moment on that and assess just how bad it’s gotten before even worse hits the fan. Until recently, the Trump administration had focused its arms sales policies on the promotion of big-ticket items like fighter planes, tanks, and missile defense systems around the world. Trump himself has loudly touted U.S. weapons systems just about every time he’s had the chance, whether amid insults to allies at the recentNATO summit or at a chummy White House meeting with Saudi Crown Prince Mohammed bin Salman, whose brutal war in Yemen is fueled by U.S.-supplied arms.A recent presidential export policy directive, in fact, specifically instructs American diplomats to put special effort into promoting arms sales, effectively turning them into agents for the country’s largest weapons makers. As an analysis by the Security Assistance Monitor at the Center for International Policy has noted, human rights and even national security concerns have taken a back seat to creating domestic jobs via such arms sales. Evidence of this can be found in, for example, the ending of Obama administration arms sales suspensions to Nigeria, Bahrain, and Saudi Arabia. The first of those had been imposed because of the way the Nigerian government repressed its own citizens; the second for Bahrain’s brutal crackdown on the democracy movement there; and the last for Saudi Arabia’s commission of acts that one member of Congress has said “look like war crimes” in its Yemeni intervention. Fueling death and destruction, however, turns out not to be a particularly effective job creator. Such military spending actually generates significantly fewer jobs per dollar than almost any other kind of investment. In addition, many of those jobs will actually be located overseas, thanks to production-sharing deals with weapons-purchasing countries like Italy, Japan, Saudi Arabia, South Korea, Turkey, the United Arab Emirates, and other U.S. allies.
Congress Rushes to Spend Billions on Space Weapons—Even if They Don’t Work - Before the GOP-controlled Congress spends billions of your tax dollars on new, highly controversial weapons in space, you might think it would seek the opinion of the Defense Department. But no. Strange as it may seem, Republicans are rushing ahead with space-based missile interceptors over the objections of the White House and before a Pentagon review on the subject has been completed.It’s almost as if congressional leaders want to spend money on space weapons no matter whether the military wants them or if they even work.This week Congress approved the development of missile interceptors in space as part of the 2019 National Defense Authorization Act, calling for a working prototype by 2022. Last year’s defense bill contained similar language, but specified that the project would only move ahead if endorsed by the Defense Department’s ongoing Missile Defense Review, which has yet to see the light of day.Rather than wait for the Pentagon review, this year Congress acted without it. An amendment proposed by Sen. Ted Cruz, R-Texas, struck out the Pentagon review in the name of removing “the legal hurdle” to developing space weapons. The effect was to order up missile interceptors in space whether or not the Pentagon thinks it’s a good idea.This gift from Congress has not been well-received. In June, the White House released a statement saying it “strongly objects” to the Cruz amendment as an “unfunded mandate,” and urged Congress to wait for the results of the ongoing review, calling any decision on development “premature at this point.”Over at the Pentagon, Lt. Gen. Sam Greaves, who leads the Missile Defense Agency, warned that space-based interceptors would “require a significant change in national policy” and would be expensive. His predecessor, then- Vice Adm. James Syring, saidin 2016, “I have serious concerns about the technical feasibility of interceptors in space, and I have serious concerns about the long-term affordability of a program like that.”
Has Bezos Become More Powerful In DC Than Trump? - The deal for an obscure $10 billion Pentagon contract suggests the extent to which Jeff Bezos is gobbling up the swamp... without the guy in the White House even batting an eye. There’s a new scandal quietly unfolding in Washington. It’s far bigger than Housing Secretary Ben Carson buying a $31,000 dinette set for his office, or former EPA chief Scott Pruitt deploying an aide to hunt for a deal on a used mattress. It involves the world’s richest man, President Trump’s favorite general, and a $10 billion defense contract. And it may be a sign of how tech giants and Silicon Valley tycoons will dominate Washington for generations to come. The controversy involves a plan to move all of the Defense Department’s data—classified and unclassified—on to the cloud. The information is currently strewn across some 400 centers, and the Pentagon’s top brass believes that consolidating it into one cloud-based system, the way the CIA did in 2013, will make it more secure and accessible. That’s why, on July 26, the Defense Department issued a request for proposals called JEDI, short for Joint Enterprise Defense Infrastructure. Whoever winds up landing the winner-take-all contract will be awarded $10 billion—instantly becoming one of America’s biggest federal contractors. But when JEDI was issued, on the day Congress recessed for the summer, the deal appeared to be rigged in favor of a single provider: Amazon. According to insiders familiar with the 1,375-page request for proposal, the language contains a host of technical stipulations that only Amazon can meet, making it hard for other leading cloud-services providers to win—or even apply for—the contract. One provision, for instance, stipulates that bidders must already generate more than $2 billion a year in commercial cloud revenues—a “bigger is better” requirement that rules out all but a few of Amazon’s rivals. What’s more, the process of crafting JEDI bears all the hallmarks of the swamp that Trump has vowed to drain. Though there has long been talk about the Defense Department joining the cloud, the current call for bids was put together only after Defense Secretary James Mattis hired a D.C. lobbyist who had previously consulted for Amazon. The lobbyist, Sally Donnelly, served as a top advisor to Mattis while the details of JEDI were being hammered out. During her tenure, Mattis flew to Seattle to tour Amazon’s headquarters and meet with Jeff Bezos. Then, as the cloud-computing contract was being finalized, Donnelly’s former lobbying firm, SBD Advisors, was bought by an investment fund with ties to Amazon’s cloud-computing unit.
Trump Blames Washington Greed For Military Parade Cancellation - Hours after The Pentagon confirmed the President's military parade planned for Veterans Day has been postponed until at least next year, after the DoD released an estimated cost of $92 million, Trump has scape-tweeted local Washington politicians as responsible for the decision to cancel. As a reminder, The Hill reports that the Defense Department released an updated cost estimate for the planned parade, which pegged the price tag for the event at $92 million, including $50 million from the Pentagon and $42 million from interagency partners.That figure is significantly higher than an initial estimate that three U.S. defense officials provided CNN with last month. That estimate pegged the cost of the parade at closer to $12 million, raising new questions about the overall cost of the event.And then yesterday evening, Pentagon spokesman Col. Rob Manning said in a statement that the Defense Department and White House have agreed to explore potential dates for the parade in 2019."The Department of Defense and White House have been planning a parade to honor America's military veterans and commemorate the centennial of World War I. We originally targeted November 10, 2018 for this event but have now agreed to explore opportunities in 2019," Manning said.Which led to this morning's Presidential tweet: "The local politicians who run Washington, D.C. (poorly) know a windfall when they see it. "The local politicians who run Washington, D.C. (poorly) know a windfall when they see it. When asked to give us a price for holding a great celebratory military parade, they wanted a number so ridiculously high that I cancelled it. Never let someone hold you up! I will instead...— Donald J. Trump (@realDonaldTrump) August 17, 2018 Trump then offered hope for next year: " Maybe we will do something next year in D.C. when the cost comes WAY DOWN. "
Russia Finance Minister: We May Abandon Dollar In Oil Trade As It Is Becoming "Too Risky" One month ago, the bond market and political pundits did a double take when according to the latest Treasury International Capital report, Russia had liquidated virtually all of its US Treasury holdings, selling off the bulk of its US government bonds in just two months, March and April. And with the US threatening to impose a new set of "crushing" sanctions on Russia, including in retaliation for the alleged Novichok nerve gas attack in the UK, Russia not only intends to continue liquidating its US holdings, but to significantly reduce its reliance on the US Dollar. Speaking in an interview for the Rossiya 1 TV channel, Finance Minister Anton Siluanov said that Russia "aims to keep reducing its investments in American securities" following new U.S. sanctions and said that the "US dollar is becoming an unreliable tool for payments in international trade." The minister also hinted at the possibility of using national currencies instead of the dollar in oil trade. "I do not rule it out. We have significantly reduced our investment in US assets. In fact, the dollar, which is considered to be the international currency, becomes a risky tool for payments," Siluanov noted. On Friday, the Russian ruble sank to the lowest level in over two years after news about new US sanctions against Russia over the alleged poisoning of former Russian intelligence officer Sergei Skripal and his daughter Yulia in Salisbury, UK, coupled with general selling of emerging market currencies as a result of the growing Turkish financial crisis. According to media reports, the first package will imply a complete ban on the export of electronic devices and dual-use components to Russia, whilst the second package may include a decrease in diplomatic relations, a ban on flights of Russia's Aeroflot carrier to the United States and an almost complete suspension of US exports.
Russia says dollar's days numbered as global trade currency (Reuters) - Russia has been discussing for some time the possibility of using national currencies to settle bilateral trade deals with Turkey, China and Iran, Russian Foreign Minister Sergei Lavrov said on a visit to the Turkish capital. Lavrov, speaking at a news conference with his Turkish counterpart, said over time the role of the U.S. dollar as the currency of global trade will decline. He did not though make any commitments for Russia to drop the dollar in trade with Turkey, whose lira currency has plummeted.
Did Russia Really Dump Its U.S. Debt? | Zero Hedge --“Russia dumped 84% of its American debt,” blared a July CNN headline. Russian central-bank head Elvira Nabiullina said the sales were just part of “diversifying the entire structure of currencies.” But with the U.S. dollar accounting for two-thirds of global foreign-exchange reserves and most (non-intra-eurozone) international trade, dumping this much dollar debt goes well beyond prudent diversification. We therefore decided to explore another possibility: that the headlines are just plain wrong, and that Russia has not sold anywhere near that many Treasuries.Let us start with U.S. Treasury Department data on holdings of Treasury securities. These do indeed show an $81 billion (84 percent) plunge in Russian-held Treasury debt—from $96 billion in March to $15 billion in May. Other figures, however, suggest that Russia’s actual selloff was much smaller than this.One indicator is Treasury Department data that track sales, between U.S. and foreign entities, of long-term Treasuries—the sole component of Russia’s Treasury holdings that has dropped since March. From March to May, these data show just $35 billion of Russian sales, as the middle bar in the left-hand box above indicates.This figure, however, likely underestimates Russia’s sales somewhat. Russia may have sold some Treasuries to non-U.S. parties, or executed some sales through foreign financial intermediaries, that the data do not capture. Still, by this measure, roughly $46 billion in Treasuries remain unaccounted for.Russian data show a similar amount missing. Russia’s central bank reports that, between March and May, its total stock of foreign debt fell by $50 billion. Since March, however, dollar appreciation has lowered the dollar value of Russia’s non-dollar debt assets. We estimate that this explains about $7 billion of the decline, implying $43 billion in actual Treasury sales—as the rightmost bar above shows. This is $8 billion more than the U.S. data indicate, which likely reflects about $8 billion in Russian sales to non-U.S. entities, or sales made through foreign intermediaries.This leaves $38 billion in “missing” Treasuries. Where could they have gone? The most logical explanation is that Russia moved these assets outside of the United States to protect against U.S. seizure.
US Working Hard to Cease Reliance on Russian Rocket Engines – NASA (Sputnik) – The United States is working hard to halt its dependence on Russia’s RD-180 rocket engines, Jim Bridenstine, the administrator of the US National Aeronautics and Space Administration, said.Earlier in August, the US administration announced new sanctions against Russia in response to Moscow's alleged use of chemical weapons against Russian ex-intelligence officer Sergei Skripal in the UK city of Salisbury in March. The Russian upper house's budget committee head, Sergei Ryabukhin, has told Sputnik that Russia's options for retaliation against the new US sanctions may include affecting deliveries of the RD-180 engines to the United States."The United States of America is working really hard to not be dependent on the RD-180 engines. NASA is unique from the rest of the federal government in a sense that when relations get rough between countries, when they are not so good, NASA is able to maintain that relationship," Bridenstine said in an interview with the C-SPAN broadcaster on Sunday. The official recalled that there were US astronauts on the International Space Station, who had got there by flying on a Russian Soyuz carrier rocket. Bridenstine emphasized that NASA did not want to be dependent on Russia, but wanted to maintain good relations with Moscow. Russia is supplying the RD-180 engines to the United States under the 1997 contract. The US space program relies on the Russian-built engines to power the first stage of the Atlas V rocket, used for sending heavy payloads into space.
Newest US sanctions against Russia hit an economic nerve (AP) — Russia typically brushes off new U.S. sanctions. Not this time. The Trump administration announcement of export restrictions in response to accusations Moscow used a nerve agent to poison a former Russian spy in Britain sent the ruble tumbling to a two-year low and drew a stern warning from its prime minister. While the initial sanctions may have a limited impact, a second batch expected within months could hit the Russian economy much harder and send already tense relations into a tailspin. If sanctions are expanded even further to target Russia's top state-controlled banks, freezing their dollar transactions — as proposed under legislation introduced in the Senate this month — it would amount to a "declaration of economic war," Russian Prime Minister Dmitry Medvedev said Friday. So much for President Donald Trump's hopes for better relations with Moscow. On his watch, the U.S. has imposed a slew of sanctions on Russia for human rights abuses, meddling in the U.S. election and Russian military aggression in Ukraine and Syria. For the most part, they have punished Russian officials and associates of President Vladimir Putin rather than targeting broad economic sectors. The restrictions were triggered under U.S. law on chemical weapons following a formal U.S. determination that Russia used the Novichok nerve agent to poison former Russian spy Sergei Skripal and his daughter in the English city of Salisbury in March.
US Sanctions Are Pushing Russia To War - The new round of sanctions this week unleashed by the United States on Russia has only one meaning: the US rulers want to crush Russia’s economy. By any definition, Washington is, in effect, declaring war on Russia. The implemented economic measures may have a seemingly abstract or sterile quality about them: banning electronic exports to Russia, rattling financial markets, stock prices falling. But the material consequence is that American officials are intending to inflict physical damage on Russian society and Russian people. It’s economic warfare on a sliding scale to military warfare, as the Prussian General Karl von Clausewitz would no doubt appreciate. It seems all the more significant that this week also saw US internet services launching a major clampdown on anti-war websites, suggesting that the powers-that-be want to shut down any criticism or public awareness of their reckless warmongering. What’s more, the latest round of US sanctions – there have been several previous rounds since the contrived Ukrainian conflict in 2014 – is based on nothing but wild, ridiculous speculation. That only adds insult upon injury. Washington said the new proposed sanctions are due to its “determination” that the Russian state was responsible for an alleged chemical-weapon attack on a former double agent in England earlier this year. The so-called Skripal affair involving Sergei Skripal and his daughter Yulia allegedly being poisoned by Russian agents using a deadly nerve agent is as yet an unproven conundrum. Some might even say “farce”. No evidence has ever been presented by the British government to substantiate its sensational allegations against Moscow. Its claims that Russia was responsible for poisoning the Skripals rests entirely on dubious assertion and innuendo. Now Washington is proposing sanctions based on a wholly unverified “determination” by the British – sanctions that are intended to crush the Russian economy. The proposed punitive measures go way beyond the usual freezing of assets pertaining to individuals. What Washington is moving to do is attack the core financial operation of the Russian economy. No wonder that Russian Prime Minister Dmitry Medvedev issued a grave response to the latest American sanctions. He said they were comparable to “economic warfare”. Medvedev warned that Moscow would have to retaliate either “politically, economically or in some other way”. Medvedev’s tone was unmistakably one of alarm at the draconian, gratuitous and irrational nature of the US actions.
Cuban ‘acoustic attack’ report on US diplomats flawed, say neurologists -- Claims that US diplomats suffered mysterious brain injuries after being targeted with a secret weapon in Cuba have been challenged by neurologists and other brain specialists. A medical report commissioned by the US government, published in March, found that staff at the US embassy in Havana suffered concussion-like brain damage after hearing strange noises in homes and hotels, but doctors from the US, the UK and Germany have contested the conclusions. In four separate letters to the Journal of the American Medical Association, which published the original medical study, groups of doctors specialising in neurology, neuropsychiatry and neuropsychology described what they believed were major flaws in the study. Among the criticisms, published on Tuesday, are that the University of Pennsylvania team which assessed the diplomats misinterpreted test results, overlooked common disorders that might have made the workers feel sick, or dismissed psychological explanations for their symptoms. Doctors at the University of Pennsylvania defended their report in a formal response in the journal, but the specialists told the Guardian they stood by their criticisms. The US withdrew more than half of its Havana diplomats last year and expelled 15 Cubans after 24 embassy staff and family reported a bizarre list of symptoms, ranging from headaches, dizziness and difficulties in sleeping, to problems with concentration, balance, vision and hearing. Many said their symptoms developed after they heard strange noises, described as cicada-like chirps, grinding, or the buffeting caused by an open window in the car. The accounts led Washington to claim the diplomats had been victims of “acoustic attacks”, though an FBI investigation found no evidence that sonic weapons were involved. Physicists have voiced doubts that such weapons were even feasible.
'Potential War Crimes': Lawmakers Demand Answers About US Role in Saudi Slaughter of Yemeni Civilians -- In the wake of the U.S.-backed Saudi-led coalition's horrific bombing of a school bus last week that killed 40 Yemeni children and amid reports on Tuesday of dozens more civilian deaths after a new wave of Saudi bombings, Rep. Ted Lieu (D-Calif.) has sent adetailed letter (pdf) to the Department of Defense Inspector General demanding an investigation into whether Trump administration officials violated U.S. or international law by assisting the Saudis in their assault on Yemen. The Saudi-led coalition, which receives essential military support and intelligence from the U.S., "has repeatedly hit civilian targets—including schools, hospitals, funerals, and weddings—nowhere near military targets," Lieu writes, pointing to an analysis by the Yemen Data Project showing that a third of Saudi bombings in Yemen have hit civilian targets. "I previously served on active duty as a JAG [Judge Advocate General] and a number of the coalition's airstrikes look like war crimes.""If the coalition's targeting of farms, food storage sites, and water sites was deliberate, these airstrikes would constitute a violation of Article 14 of Additional Protocol II and customary international law in non-international armed conflict," Lieu adds. "I am deeply concerned that continued U.S. refueling, operational support functions, and weapons transfers could qualify as aiding and abetting these potential war crimes."The California congressman goes on to note that the U.S.-backed Saudi attacks on civilian targets cannot be attributed to mere faulty intelligence or incompetence. "The coalition, which has air superiority, has in a number of cases very precisely struck civilian targets," Lieu notes. "For example, coalition jets precisely struck a funeralattended by a large number of people and then came around and struck the same civilian target again. It is indisputable that the DoD-supported coalition has killed large numbers of children, women, and men who are civilians."
Elizabeth Warren Demands in Letter That U.S. Military Explain Its Role in Yemen Bombings -In the wake of a U.S.-backed bombing last week that killed dozens of children on a school bus in north Yemen, Sen. Elizabeth Warren is demanding answers about how U.S. military advisers support and oversee the Saudi and UAE bombing campaign in Yemen. Warren sent a letter on Tuesday to Gen. Joseph Votel, head of U.S. Central Command and top commander for U.S. forces in the Middle East, requesting that he clarify past congressional testimony about the U.S. role in the Yemen war. Warren’s letter referenced an article by The Intercept about an airstrike in May, based on a U.S. intelligence report that recounts in detail, minute by minute, how the strike unfolded and American munitions were used. Votel has previously suggested that the U.S. has little knowledge about how Saudi Arabia and the UAE use American weapons, and does not track the aircraft missions that the U.S. helps refuel. During a congressional hearing in March, Warren asked Votel whether CENTCOM tracks what aircraft do after the U.S. refuels them. He responded, “Senator, we do not.” Votel also denied knowing whether U.S.-produced munitions were used in specific strikes when the media has reported on civilian deaths. However, earlier this month The Intercept published a detailed article about a coalition airstrike in May, which targeted a site in Yemen’s Northern Saada governorate where a dozen family members slept in tents; the bomb happened to miss the tents, so the civilians survived. The article quoted an intelligence report that includes “what appear to be comments from an American intelligence analyst” who closely supervised the strike from a coalition command center in Riyadh, suggesting that U.S. military observers have detailed information about how strikes unfold.
Can the US track how its weapons are used in Yemen? Elizabeth Warren wants to know. — After scores of children were killed in a Saudi-backed air strike in Yemen last week, U.S. Sen. Elizabeth Warren is challenging the top U.S. commander for the Mideast to say whether the U.S. military can track the purpose, mission and results of airstrikes in Yemen it supports. In response to the Saudi-led coalition bombing of a school bus that reportedly killed 51 people — 40 of them children — Warren sent a letter to U.S. Central Command’s Gen. Joseph Votel on Tuesday asking that he clarify his testimony the military cannot do detailed tracking. Warren pointed to recent media reports contradicting that assertion, which found that U.S. military officials closely observed a series of strikes that appear, she said, inconsistent with strict legal standards for the prevention of civilian casualties. "The reported presence of U.S. advisors in a command center responsible for actively approving and directing such airstrikes, and the reported existence of at least one U.S. intelligence assessment of an airstrike acknowledging the use of U.S.-manufactured munitions, raise questions about whether the U.S. does in fact have the capability to track the origins, purpose and results of U.S.-supported airstrikes should it choose to do so," Warren wrote. The United States has provided munitions, aerial refueling, and other logistical support to Saudi Arabia's military operations in Yemen for more than three years. Saudi and Emirati forces are fighting Iranian-backed Houthi rebels.
America Is Committing War Crimes and Doesn’t Even Know Why - By any reasonable assessment, the U.S. government should have stopped providing direct military support to the Saudi Arabia-led air campaign in Yemen on the day after it started. Washington’s participation began on March 26, 2015, when a White House spokesperson announced, “President Obama has authorized the provision of logistical and intelligence support to [Gulf Cooperation Council]-led military operations.” On March 26, toward the end of a Senate Armed Services Committee hearing, Sen. Kirsten Gillibrand (D-N.Y.) asked U.S. Central Command commander Gen. Lloyd Austin what the ultimate goal of the GCC air campaign in Yemen was, and for the general to estimate its likelihood of success. Gen. Austin answered with refreshing honesty: “I don’t currently know the specific goals and objectives of the Saudi campaign, and I would have to know that to be able to assess the likelihood of success.” Gillibrand replied, “Well, I do hope you get the information sooner than later.” In other words, the military commander responsible for overseeing the provision of support for a new air war in the Middle East did not know what the goals of the intervention were, or how he could evaluate whether it was successful. The United States had become a willing co-combatant in a war without any direction or clear end state. Two inevitable results have followed. First, there have been a litany of war crimes of the sort perpetrated last weekend, in which Saudi planes, using American munitions, bombed a school bus killing dozens of Yemeni schoolchildren. Second, the U.S. government has responded to these crimes with silences that might seem chastened, but in truth must be classified as defiant, given the bureaucratic maneuvering undertaken to obscure the United States’ unthinking complicity both to outsiders and to itself. (The U.S. military claims not to even track the results of the Yemeni missions that its forces are involved in.) Neither President Donald Trump, nor Secretary of State Mike Pompeo has publicly addressed this latest massacre. A Pentagon spokesperson only requested that Saudi Arabia “expeditiously and thoroughly investigate this tragic incident.”
Rand Paul Against The World - A new report suggests the Kentucky senator is single-handedly preventing war with Iran... Not long ago, Donald Trump’s national security advisor John Bolton was promising regime change in Iran by the end of this year. Uber-hawk Bolton has long wantedwar with Tehran. Secretary of State Mike Pompeo isn’t much different, and has even advocated bombing Iran. Secretary of Defense James Mattis has previously recommend U.S. airstrikes against Iranian targets.Today, Bolton says the U.S. does not to seek regime change in Iran. So does Pompeo. So does Mattis.Why?President Trump has been known to be hawkish on Iran. Politico observedWednesday: “Trump has drawn praise from the right-wing establishment for hammering the mullahs in Tehran, junking the Iran nuclear deal and responding to the regime’s saber rattling with aggressive rhetoric of his own….” There are also powerful factions in Congress and Washington with inroads to the president that have been itching for regime change for years. “The policy of the United States should be regime change in Iran,” says Senator Tom Cotton, once rumored to be Trump’s pick to head the CIA.So what, or who, is stopping the hawks?Politico revealed Wednesday some interesting aspects of the relationship between Senator Rand Paul and the president, particularly on foreign policy: “While Trump tolerates his hawkish advisers, the [Trump] aide added, he shares a real bond with Paul: ‘He actually at gut level has the same instincts as Rand Paul…’.”On Iran, Politico notes, “Trump has stopped short of calling for regime change even though Secretary of State Mike Pompeo, Secretary of Defense James Mattis, and Bolton support it, aligning with Paul instead, according to a GOP foreign policy expert in frequent contact with the White House.”But this part of the story was the most revelatory:“’Rand Paul has persuaded the president that we are not for regime change in Iran,’ this person said, because adopting that position would instigate another war in the Middle East.” This is significant, not because Trump couldn’t have arrived at the same position without Paul’s counsel, but because it’s easy to imagine him embracing regime change, what with virtually every major foreign policy advisor in his cabinet supporting something close to war with Iran. “Personnel is policy” is more than a cliché.
The art of the Iranian deal: How Trump can talk to Tehran Al Jazeera With the right conditions, based on "mutual respect", Tehran and Washington, DC can engage in new talks, despite President Donald Trump's decision to withdraw from the nuclear deal and reimpose sanctions on Iran. "The door to negotiations is never closed," Fereshteh Sadeghi, a Tehran-based political analyst, told Al Jazeera. Sadeghi said the Iranian leadership has decades of experience talking with the Americans, including top secret discussions with a Republican administration in the run-up to the war in Afghanistan, and later the US-led invasion of Iraq in 2003.So it is not far-fetched that negotiations could happen again amid heated rhetoric, she said. While Iran expressed defiance over the return of US sanctions, there was no outright rejection of talks from the highest level of the Iranian government. Responding to Trump's offer to meet Iranian President Hassan Rouhani, Iranian Foreign Minister Javad Zarif told the Tehran-based Iran Daily in a front-page story that Iran "has never been a country to reject a proposal for negotiations". "We will move forward based on our national interest," he said, adding Iran must see to what extent the US "is willing to show goodwill". Zarif made the statement on the day the first round of sanctions returned.
Iran vows not to renegotiate landmark nuke deal with U.S. - (Xinhua) -- Iran will never enter a new round of talks with the United States over the 2015 nuclear deal as Washington is "bullying and cheating" in negotiations, Iran's Supreme Leader Ayatollah Ali Khamenei said Monday. Khamenei's remarks came in response to the recent U.S. gestures for unconditional renegotiation of the 2015 landmark Iranian international nuclear deal after its astounding withdrawal in May. Tehran will not again sit at the negotiation table with the "cheating" U.S. government, Khamenei's official website said. "Over the past 40 years, Americans have requested for negotiations for many times, but only met with Iran's negative answers," he was quoted as saying by Press TV. "During negotiations, Americans only give promises using apparently assuring words, but want real concessions from the opposite side and do not accept promises," he said. Negotiations with the United States at the present time will certainly be to Iran's disadvantage and are "forbidden," the Iranian top leader noted. "We can only embark on negotiating with the United States after we reach the economic, political and cultural power that we have in mind so that the U.S. pressures and ballyhoo would not be able to affect us," he added.
Trump scores an own-goal in the game against Iran | Asia Times: The Israeli press is awash with reports that US President Donald Trump is faithfully executing a containment strategy against Iran that was scripted in Tel Aviv by none other than Prime Minister Benjamin Netanyahu. This swagger is accompanied by the triumphalist forecast that Iran is wilting and the end is in sight for the four-decade-old Islamic regime in Tehran. Of course, Israel has a record of churning out baloney, but this must be the mother of all fabrications. Perhaps, there could be some substance in the claim that Netanyahu influenced Trump. But even here, in the final analysis, Trump weighs in on any issue from one angle: how it may affect his re-election bid in the 2020 election. The developing situation indeed has some similarities with the run-up to the 1980 election in the US. Trump cannot be unaware of it. This is one thing. Iran is denying Trump the privilege of a summit meeting. Iranian Foreign Minister Javad Zarif already forecast a month ahead that Tehran does not intend to have meetings with their US counterparts on the sidelines of the UN General Assembly Session in New York – not with Trump or his Secretary of State Mike Pompeo. Zarif’s explanation is simple: “The Americans lack honesty.” Now, how does Pompeo prove that his president is indeed an honest man when Americans themselves have divided opinions on this? As time passes, Trump will hate to realize that he looks a wimp in comparison with Barack Obama.
In Furious Rant Erdogan Lashes Out At Trump: "We See The Game You're Playing, We Dare You" - In the wake of the U.S. doubling tariffs on Turkish steel and aluminum on Friday which sent the Turkish lira and capital markets into free fall, Erdogan wrote a Friday New York Times op-ed cataloging his grievances and threatening to walk away from the decades-old alliance. "Failure to reverse this trend of unilateralism and disrespect will require us to start looking for new friends and allies," he wrote. Meanwhile, while announcing the new sanctions aimed at Turkey, Trump tweeted his "analysis" of the situation: "Our relations with Turkey are not good at this time!" The escalating war of words continued on Saturday, when speaking at a rally in the Black Sea town of Unye, Erdogan said that "it is wrong to dare bring Turkey to its knees through threats over a pastor," and blasted "shame on you, shame on you. You are exchanging your strategic partner in NATO for a priest." At the same time, Ibrahim Kalin, Erdogan’s spokesman, said that the U.S. is "facing the risk of completely losing Turkey." And if anyone was hoping that Erdogan's temper would have cooled one day later with just hours left before FX markets reopen, they were sorely disappointed on Sunday when in his latest public address in the town of Trabzon, Erdogan doubled down on his belligerent rhetoric against the US once again, via Bloomberg: ERDOGAN: WE SEE THE GAME YOU'RE PLAYING; WE DARE YOU. ERDOGAN: THEY'RE TRYING W/ MONEY WHAT THEY COULDN'T DO IN COUP Here one assumes that by "they" Erdogan was referring to the US, even though the Turkish's president official line all along was that the culprit behind the "failed coup" was the exiled cleric Fethulah Gullen who has been accused by Erodgan of being behind the country's imaginary "shadow state" for years, and which gave Erdogan a green light to crackdown on any potential opponents, leading to an unprecedented purge of people in public positions, with tens of thousands of government workers either ending up in prison or unemployed.
Turkey To Boycott iPhones And US Electronic Goods, Erdogan Vows -- As the war of words between the US and Turkey escalates, several hours after John Bolton warned Turkey’s ambassador that the U.S. has nothing further to negotiate until detained American pastor Brunson is freed, on Tuesday Turkish President Recep Tayyip Erdogan vowed to boycott American electronic products in response to Washington’s economic pressure against Ankara. “There is an economic attack against Turkey. Earlier such things were done in secret, and now they are open to us. We can react in two ways: economically and politically,” Erdogan said in his latest defiant speech in Ankara Tuesday, warning that those who wage "economic warfare" against Turkey will pay a price and adding that the Turkish nation "won’t go down, it will stand firm on its feet.""Our Ministry of Finance and the Treasury are working day and night…We will boycott America's electronic products. They have iPhones, but on the other hand there are Samsungs. We have our local brand Venus Vestel [a Turkish smartphone brand], we will use it," the Turkish president added, sending the stock of Vestel Elektronik surging. Erdogan's statement indicates that for the first time since the diplomatic crisis with the US began, Erdogan is playing "his own Trump economic card." With more than 82 million people and a population growth that surpasses pretty much all European countries, Turkey is a big market and will only get bigger, BBG's Onur Ant notes. So his point on iPhones had an internal coherence to it, just like Erdogan said here:"There is a price we're paying for the period we're in. But there will be a price'' those who're waging an economic warfare against Turkey will also pay.Of course, with the lira plunging, the boycott may be a moot point: with Turkish purchasing power dropping, that'll probably send more people to local brands anyway. According to Bloomberg, an iPhone X in Turkey starts at about 7,500 liras. That's about 5x the minimum wage, and will probably be adjusted upwards even more to a ccount for the exchange rate.
Why Trump is attacking Turkey with sanctions and tariffs -- President Donald Trump's move Friday to double metals tariffs onTurkey is only his latest jab against the NATO ally that stems from disagreements over defense policy and the detention of American pastor Andrew Brunson. Trump came into office seeking better relations with Turkey. But as Trump announced his plans to hike tariffs on Turkish steel and aluminum to 50 percent and 20 percent, respectively, he acknowledged that "our relations with Turkey are not good at this time!" In a tweet Friday, the president said he would levy tariffs as "their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar!" The already-reeling currency plunged even more Friday, dropping 20 percent after Trump's tweet.The White House later tried to clarify Trump's tweet, saying in a statement that he "authorized the preparation of documents to raise tariffs" on metals imports from Turkey.Late Thursday, and before Trump's tweet, Turkish President Recep Tayyip Erdogan said he would stand up to pressure from the United States."There are various campaigns being carried out. Don't heed them,"Erdogan said Thursday. "Don't forget, if they have their dollars, we have our people, our God. We are working hard. Look at what we were 16 years ago and look at us now," Erdogan told supporters.The feud between the two countries surfaced several times this year.Bipartisan members of Congress and the Trump administration have objected to Turkey's plan to acquire a Russian missile defense system. A deal for Turkey to receive Lockheed Martin F-35 fighter jets went through in June, despite congressional opposition to the transaction related to the Russian-made missile system.Lawmakers are worried that the missile defense system could expose weaknesses in the U.S.-made aircraft. They fear that Turkey could share those vulnerabilities with Russia, among other concerns. When the Senate voted overwhelmingly this year to block the jet sales to Turkey, members also raised concerns about Brunson's detention. Turkey has held the evangelical pastor since 2016 and alleged that he was involved in a failed coup attempt that year. He has denied the charges. At the beginning of the month, the Treasury Department sanctioned Turkey's ministers of Justice and Interior because of Brunson's detainment.
Turkey Shifts Toward Russia as Sanctions Sour U.S. Relations—President Recep Tayyip Erdogan of Turkey stepped up his attacks on the U.S. on Tuesday, calling for a boycott of Apple Inc.’s iPhones and other U.S. electronic goods, while his foreign minister joined his Russian counterpart in criticizing Western sanctions. Turkey, a longtime North Atlantic Treaty Organization ally, has been caught between the West and Russia. This week, officials in Ankara were leaning decidedly toward Moscow. .In recent weeks, Turkey and Russia have been the targets of U.S. sanctions while their currencies, the lira and the ruble, have dropped against the dollar. Mr. Erdogan’s boycott is part of a wider campaign Turkey has launched to retaliate against the U.S. measures. The lira, already hit by investor concerns over Turkey’s financial stability, has hit a series of record lows since Aug. 1, when the U.S. imposed sanctions on Turkey for not freeing a U.S. pastor facing terrorism charges. On Tuesday, the lira rose slightly against the dollar, to 6.37, but remains vastly lower against the U.S. currency this year. New tariffs the U.S. introduced on some Turkish imports on Monday have raised concerns of a full-blown trade war. Attending a conference with Russia’s top diplomat, Sergei Lavrov, in Ankara on Tuesday, Foreign Minister Mevlut Cavusoglu of Turkey lashed out against Western sanctions. “This era when we are being bullied must end,” Mr. Cavusoglu said. Mr. Lavrov echoed those sentiments: “They are using methods of sanctions, threats, blackmail and diktat.” Promising tighter cooperation with Turkey, Mr. Lavrov said Russia may shun the dollar in bilateral trade in the future, as it has done with countries such as China and Iran.
Turkey slaps tariffs on American booze, cars as business groups urge diplomacy -- Turkey's government announced tariffs on American cars, alcohol and cigarettes on Tuesday, ramping up what has become a bitter dispute between the two NATO allies.According to local press, the move doubles tariffs on a number of U.S. products, raising duties on American booze to 140 percent, cars to 120 percent and leaf tobacco to 60 percent.The measures comes amid Turkey's currency crisis, which has seen the Turkish lira tumble more than 40 percent against the dollar since the start of this year. The government has called it a result of "economic warfare" on the part of the U.S., while economists point to Turkey's flawed monetary policy, widening current account deficit and high foreign-denominated debt as the primary cause of its economic woes.Tariffs on rice, cosmetics and coal will also be doubled, and Turkish President Recep Erdogan has urged his citizens to boycott U.S. electronic goods, including Apple's iPhone, in favor of Samsung and local brands.Meanwhile, the lira is firming up against the dollar following the start of a rebound Tuesday, trading at 6.0750 to the greenback on Wednesday at 10:30 a.m. Istanbul time (5:30 a.m. ET), up from its record low of 7.24 on Monday. The lira tanked after President Donald Trump's announcement of sanctions and tariffs on Ankara last week over its continued detention of American evangelical pastor Andrew Brunson. Brunson has been held in Turkey since 2016 on charges of spying and involvement in the county's failed coup that year, which he and the U.S. government deny. Trump issued sanctions on Turkey's justice and interior ministers earlier this month, and meetings between delegations of the two countries have failed to produce a diplomatic solution. On Friday the American leader tweeted that he would double tariffs on Turkish steel and aluminum, which Erdogan called "a stab in the back." The following three days saw the lira lose 30 percent of its value.
Trump Has "Great Deal Of Frustration" With Erdogan As White House Warns More Sanctions Coming - President Donald Trump "has a great deal of frustration," with Turkish President Recep Tayyip Erdogan, White House press secretary Sarah Huckabee Sanders said at a briefing Tuesday, calling again on the Turkish "executive president" to release pastor Brunson and other U.S. citizens as the diplomatic standoff between the two nations continued to weigh on global markets."We’re going to continue to call on Turkey to do the right thing and release those individuals," including pastor Andrew Brunson, Sanders said.The statement came shortly after a White House official said that the United States warned more economic pressures may be in store for Turkey if it refuses to release the jailed American pastor. The message emerged a day after White House national security adviser John Bolton met privately with Turkish ambassador Serdar Kilic about the case of evangelical pastor Andrew Brunson. Bolton warned him that the United States would not give any ground, a senior U.S. official said.The White House official, speaking to Reuters on condition of anonymity, said "nothing has progressed" thus far on the Brunson case. "The administration is going to stay extremely firm on this. The president is 100 percent committed to bringing Pastor Brunson home and if we do not see actions in the next few days or a week there could be further actions taken," the official said. Further actions would likely take the form of economic sanctions, the official said, who added: The pressure is going to keep up if we're not seeing results. Trump doubled tariffs on imports of Turkish steel and aluminum last week, contributing to a precipitous fall in the lira which has lost a quarter of its value this month. The United States is also considering a fine against Turkeys state-owned Halkbank for allegedly helping Iran evade U.S. sanctions. Earlier this month, the United States imposed sanctions on two top officials in President Recep Tayyip Erdogans cabinet in an attempt to get Turkey to turn over Brunson. In response, on Tuesday Erdogan vowed to boycott American electronics, including iPhones, in a defiance of Trump’s demands. And while even a widespread Turkish boycott would do little to dent U.S. economic interests, it shows Erdogan is refusing to give in to market turmoil that’s pushed borrowing costs to record highs and threatens to descend the nation into a financial crisis.
US Rules Out Removing Steel Tariffs To Turkey Even If Pastor Is Released - In the latest diplomatic salvo in the escalating war of words between Washington and Ankara, the United States on Wednesday ruled out removing steel tariffs that contributed to a currency crisis in Turkey even if Ankara frees a U.S. pastor, offsetting a pledge by Qatar to invest $15 billion in Turkey, boosting the Turkish lira even as all other Emerging Market currencies tumbled. The White House's latest stance gives Turkish authorities little incentive to work for the release of pastor Andrew Brunson who is under house arrest in Turkey on terrorism charges and whose case Turkish officials have said was a matter for the courts. Meanwhile, Trump continues to demand Brunson's release and has warned that US sanctions and tariffs will only escalate until his release. Yet while the Brunson matter appears to have hit a dead end, and is far from being resolved, Turkish President Erdogan got an unexpected boost from Qatar’s Emir, who approved a $15 billion package of economic projects, investments and deposits will be channeled into banks and financial markets, after the two met in Ankara. Yet, as Jim O'Neill wrote earlier, while Qatar, one of Turkey’s closest Gulf allies, could provide financial aid, it does not ultimately have the wherewithal to pull Turkey out of its crisis singlehandedly.Still, the Qatar "gift" offered further support to a lira rally after the Turkish central bank tightened liquidity and curbed selling of the currency, which sent the USDTRY tumbling from 6.80 to below 6.00, after hitting a record 7.24 in early Monday trading, unleashing contagion across emerging markets and threatening the stability of Turkey’s financial sector. The lira had lost up to 45% against the dollar this year, driven by worries over Erdogan's growing control over the economy and his repeated calls for lower interest rates despite high inflation.And so the trade spat between the two NATO allies continues: last Friday, Trump doubled tariffs on Turkish metals exports to the United States, prompting Turkey - which said it will not bow to threats - to raise tariffs on U.S. cars, alcohol and tobacco by the same amount on Wednesday. The White House condemned the Turkish response as "a step in the wrong direction" and signaled a hard line on Brunson’s release, according to Reuters.
Another Step in the Weaponization of Global Finance - Trade wars may be morphing into something more dangerous: financial wars.With Turkey facing a currency crisis, President Trump last week poured fuel on the fire by doubling tariffs on imports of its steel and aluminum to offset the effects of its weaker currency or force the country to release an American pastor. (Mr. Trump’s motive remains unclear.)In the hierarchy of things afflicting Turkey, this isn’t that high: The country’s problems are mostly self-inflicted, from its large current-account deficit and steep dollar debts to the politicization of its central bank. But it is the latest example of how the U.S. and other countries are weaponizing international finance in ways that could destabilize the global economy and fray the intricate web of relationships that sustain it. While trade wars aren’t good for growth, rarely do they induce a recession, or even a noticeable slowdown. The infamous Smoot-Hawley tariff of 1930 was at most a minor contribution to the Great Depression. By contrast, there’s a long record of international financial disruptions fueling economic stress, from the Depression to the bankruptcy of Lehman Brothers nearly 10 years ago. When the U.S. deliberately inflicts economic pain it is typically for geostrategic reasons and, where possible, it acts in concert with allies. In recent years, Washington has exacted enormous damage on North Korea and Iran by cutting them off from the dollar-based banking system. European and U.S. sanctions on Russia for invading Ukraine, interfering with U.S. elections and poisoning a former Russian spy and his daughter living in Britain have wrought havoc on the Russian economy.Mr. Trump’s deployment of financial warfare against Turkey breaks with tradition in several key ways. First, while relations between Turkey’s increasingly autocratic President Recep Tayyip Erdogan and the West have been deteriorating for years, his recent transgressions—such as detaining pastor Andrew Brunson—aren’t the sort of threat to the U.S. or its allies’ security that typically draws such a response. Second, using tariffs to neutralize the Turkish lira’s decline, like Mr. Trump’s increasing tariffs on China because it let the yuan drop, could aggravate instead of mitigate financial turmoil. Mr. Trump tends to see other countries’ economic suffering as an advantage for the U.S., boasting earlier this month that his tariffs had helped tank the Chinese stock market. Thus, he is likely to repeat the exercise, and others will follow suit. Just as the size of the U.S. market gives Mr. Trump the advantage in any trade dispute, America’s control over dollar-based banking and the depth of the Treasury market give it the advantage in any financial conflict. Any country, including China, that threatens to dump U.S. securities would hurt itself more than it hurts the U.S. Yet if relations deteriorate further, such tactics would no longer be off limits.
A NAFTA deal in the making - United States and Mexico negotiators today continue NAFTA talks for a fourth straight week, but sources briefed on the state of play say the final trade-offs are being lined up to prepare for a deal between at least two of the three countries in the pact. Mexican Economy Secretary Ildefonso Guajardo will again be in town for ministerial-level talks with U.S. Trade Representative Robert Lighthizer this week. “Essentially there is a deal,” said one person briefed on the talks. The U.S. is prepared to withdraw a proposal that would apply seasonal and regional criteria to anti-dumping and countervailing duty cases. The proposal essentially gives fruit and vegetable growers in Florida the ability to file trade cases without the backing of California’s giant produce industry that has diversified interests in the U.S. and Mexico. The U.S. has offered to back off that demand if Mexico accedes to its demands on autos, according to two sources with knowledge of the trade-off. A U.S. Trade Representative spokeswoman declined to comment or confirm. Still, there is one issue that has posed a new hurdle in the auto talks. Three sources close to the talks said the U.S. has demanded that Mexico, and possibly Canada, accept a higher tariff rate for autos that don’t meet the pact’s new content rules. That would essentially force companies that build cars in Mexico to agree to have exports to the U.S. that don’t conform to the rule be subject to a tariff beyond the 2.5 percent rate Washington bound itself to at the World Trade Organization. USTR also declined to confirm this development, which was first reported by Inside U.S. Trade. Mexico’s team came in “very optimistic the first week. That optimism came down a notch the second week and this past week it came down another notch,” a source close to the talks told Morning Trade. “There’s a general sense that things are moving, but to be quite honest, movement isn’t enough. We need speed because the window is really closing here,” the source added. Canada’s appearance in the talks is still TBD, but it’s now widely expected that Ottawa won’t be back at the table until the U.S. and Mexico figure out their outstanding bilateral issues.
Brown's NAFTA support in question -Sen. Sherrod Brown is warning that what the U.S. currently has on the table on labor issues in NAFTA 2.0 may be insufficient to get his support, jeopardizing his ability to bring other Democrats to a “yes” vote. Brown and U.S. Trade Representative Robert Lighthizer have maintained close contact on NAFTA talks as the administration’s top trade official tries to woo a significant number of Democrats to support the pact when it’s up for a vote. “I looked President Trump in the eye and told him that if they get a deal that’s better for American workers, not only will I vote for it, I’ll help him get the votes it needs to pass. I think we’ve made a lot of progress,” Brown said in a statement to POLITICO. “But it’s hard to see how we get those votes if this deal doesn’t do more on labor enforcement than we’ve seen in past FTAs. We can’t make a real difference for American workers without enforcement of labor law in Mexico.” A source familiar with the negotiations said that “at this point we’re not sure if [the U.S. proposal] will go beyond the status quo.” Labor issues remain unresolved between the U.S. and Mexico. Unions and congressional Democrats want to see a revised NAFTA that forces Mexico to make significant improvements to its labor protections, such as ending the widespread use of labor contracts that favor employers. Key to labor and Democratic support is an enforcement mechanism that goes beyond the status quo of previous trade deals. Unions consider the dispute mechanism found in recent trade deals, which requires a government to challenge another over violations of a pact’s labor rules, insufficient after the U.S. lost a years-long dispute against Guatemala. “Senator Brown is willing to be flexible and open to new ideas,” an aide to the lawmaker said. “But he hopes to see something that goes beyond the status quo.”
US reaps more than $1.4 billion from steel and aluminum tariffs, report finds - In less than five months, the Trump administration has collected more than $1.4 billion in new revenue from steel and aluminum tariffs, according to a recent report prepared for members of Congress.The Congressional Research Service estimated that, between March 23 and July 16, the U.S. reaped $1.1 billion and $344.2 million from levies on foreign steel and aluminum, respectively.Those earnings are on the rise as trade negotiations with allies linger on and President Donald Trump moves to hike tariff rates on countries like Turkey. CRS says the new tariffs could reap the U.S. some $7.5 billion — $5.8 billion on steel and $1.7 billion on aluminum – based on last year's import levels. In 2017, the U.S. imported $29 billion worth of steel products covered the tariffs and $17.4 billion worth of aluminum.Trump has suggested the tariffs – originally unveiled as a national security provision – could have the added benefit of reducing the federal deficit, which rose to $77 billion in July, wider than the July 2017 budget deficit of $43 billion. And the Treasury's borrowing to fund government operations is set to top $1 trillion this year for the first time ever. "Because of Tariffs we will be able to start paying down large amounts of the $21 Trillion in debt that has been accumulated," Trump tweeted on Aug. 5. "At minimum, we will make much better Trade Deals for our country!"
Trump: Planned boycott by Harley-Davidson owners ‘great’ | TheHill: President Trump early Sunday called a planned boycott by some Harley-Davidson motorcycle owners “great.” “Many @harleydavidson owners plan to boycott the company if manufacturing moves overseas,” he said on Twitter. “Great! “Most other companies are coming in our direction, including Harley competitors. A really bad move! U.S. will soon have a level playing field, or better.”Some Harley-Davidson owners told The New York Times that they will abandon the Wisconsin-based company if it goes through with plans to shift some production overseas. Several owners said they planned to stop purchasing motorcycles from the company as a result of its announcement to move some of its production out of the U.S. The company’s decision was prompted by retaliatory tariffs on motorcycles from the European Union following Trump’s decision to impose steep tariffs on steel and aluminum on the EU and other longtime U.S. allies.
Counterfeiters Will Win the Trade War – Foreign Policy - The trade war between the United States and China continues to spiral, with mutual tariffs now hitting $34 billion worth of goods on either side after Trump began his spate of protectionist measures in March. Many analysts, such as Mark Muro, have argued that the tit-for-tat tariffs will hit certain U.S. industries hard, whereas others have pointed to the huge damage that could be done to the global trading system. But there’s another issue so far overlooked: The trade war will be a boon to China’s counterfeiters. Counterfeiting was one of the many charges laid by U.S. President Donald Trump and his trade team at China’s door. They’re not wrong; the Chinese fake goods industry is enormous. Mainland China is the world’s largest producer of counterfeits, accounting for 63.2 percent of seized goods in 2013, followed by Chinese-ruled Hong Kong at 21.3 percent. Products from the United States, Italy, France, and Switzerland have been the main targets. As legitimate Chinese brands have become more famous, the counterfeiting has turned domestic, with fake Huawei phones appearing on the market and many innovative Chinese companies also being targeted. Clothes, phones, and handbags once dominated the counterfeiting market but it’s now spread into more specialist industries; lookalike wines imitating famous Australian vineyards have been spotted on Pinduoduo, a large online retailer. According to the International Anti-Counterfeiting Coalition, the industry has a global value of more than $1.7 trillion, making it many times more profitable than the global drug trade. The growth of e-commerce, which makes it even harder for consumers to distinguish genuine from counterfeit goods, has fueled the industry. Counterfeit goods not only stick the consumer with a lesser product, they cause reputational damage to companies. Due to a lack of resources, small and medium enterprises are less likely to respond to their goods being counterfeited. In recent years, counterfeiting has grown tremendously in Southeast Asia, as has the scope of the industry. In part, this is spillover from China, with Chinese firms often looking for cheaper labor in neighboring countries. According to the Vietnam Association for Anti-Counterfeiting and Trademark Protection, counterfeit goods are produced in 30 product categories. Free trade zones, which are exponentially more prevalent today than four decades ago, now exist in 130 countries and are often plagued by poor governance, contributing to the expansion of the counterfeit industry, according to a study by the Organisation for Economic Co-operation and Development.
Trump's trade war advantage: The US economy is 'firing on all cylinders,' says expert - China's power may have been overrated and the U.S. economy is staying strong, meaning that U.S. President Donald Trump has an advantage in the trade war, according to one expert."We have to realize that perhaps China isn't as strong as when we at first think. China is still figuring out also how to deal with this trade situation, how to ensure the stability of its domestic economy," said Curtis Chin, an Asia fellow at economic think tank the Milken Institute."And that works to the advantage of President Trump, and I think what's really working to the advantage of President Trump is the state of the U.S. economy right now. Really, the U.S. economy is firing on all cylinders," he told CNBC's "Squawk Box" on Monday.That economic strength would give Trump a "backstop" if the trade situation deteriorates in the long run, Chin said.Chin told CNBC he "totally" disagreed with the view that the White House's policies are backfiring. The Milken expert, who was also U.S. ambassador to the Asian Development Bank, said Trump has made it clear he's been elected as "president of Americans, not of the world.""Right now we're seeing record employment in the U.S., not just unemployment down, but people getting back into the economy, that people think they can find a job if they start looking again. I think that's a positive message," he said.
U.S. soybean prices reach a 9-year low -- Soybean prices collapsed in June under the combined pressure of favorable U.S. growing conditions, an increase in sown acreage, large old-crop stocks, and China’s tariff hike on imports from the United States. On June 1, cash soybean prices for central Illinois were $9.86 per bushel but, by early July, had plummeted to just above $8.00. Not since December 2008 have prices for the crop been that low. Following China’s recent implementation of an additional 25-percent ad valorem tariff on U.S. soybeans, USDA lowered its 2018/19 export forecast by 250 million bushels this month to 2.04 billion. Lowered export expectations—along with a very bright outlook for soybean crop conditions and for estimated acreage harvested—lowered prices. As a result of the outlook for crop conditions and for estimated acreage harvested, USDA raised its production forecast to 4.31 billion. Only last year’s record harvest of 4.39 billion bushels would be larger. Provided the crop continues to develop without major difficulties, post-harvest prices this fall are likely to be even lower. This chart appears in the ERS Oil Crops Outlook newsletter released in July 2018.
China says US farmers may never regain market share lost in trade war -- China can easily find other countries to buy agricultural goods from instead of the US, its vice agriculture minister said, warning that American farmers could permanently lose their share of the Chinese market as a result of the trade war. “Many countries have the willingness and they totally have the capacity to take over the market share the US is enjoying in China. If other countries become reliable suppliers for China, it will be very difficult for the US to regain the market,” Han Jun told official Xinhua news agency in an interview on Friday. He also warned that American farmers could lose the position in the Chinese market they have spent several decades building up. Han said they may not be able to make up the losses brought by retaliatory tariffs, even with the White House’s planned US$12 billion aid package for farmers caught in the dispute. He said Beijing had imposed duties on 90 per cent of the agricultural goods the country imports from the United States since the trade war kicked off at the start of last month, with limited impact on China. “Levying additional tariffs will cause a great decrease in exports of US agricultural products to China,” Han said. “But the impact on China is very limited, due to the diversified import sources.” China and the US have been locked in a tit-for-tat trade war since early last month. Beijing unveiled its latest retaliatory tariffs on US$16 billion of American goods on Wednesday, matching Washington’s move to slap 25 per cent duties on the same value of Chinese imports.
U.S. should treat Chinese investors objectively, fairly: MOC - (Xinhua) -- China hopes the United States will treat Chinese investors objectively and fairly, China's Ministry of Commerce (MOC) said Tuesday, as it plans to closely monitor the impact of a U.S. foreign investment act on Chinese companies.A spokesperson for the MOC made the comment after U.S. President Donald Trump signed into law the National Defense Authorization Act for Fiscal Year 2019 in which the Foreign Investment Risk Review Modernization Act was incorporated.China will conduct a full evaluation of the act and closely monitor its impact on Chinese companies, the spokesperson said.With economic globalization deepening, cross-border investment is booming. Two-way investment between China and the United States has huge potential as companies from both countries have strong willingness to strengthen cooperation.The two governments should conform to corporate opinions and provide a sound environment and stable expectations. The United States should treat Chinese investors in an objective and fair way and prevent the national security review blocking investment cooperation, the spokesperson said.
China, U.S. to hold lower-level trade talks in late August (Reuters) - China and the United States will hold lower-level trade talks this month, the two governments said on Thursday, offering hope that they might resolve an escalating tariff war that threatens to engulf all trade between the world’s two largest economies. . Still, White House Economic adviser Larry Kudlow warned Beijing not to underestimate President Donald Trump’s resolve in pushing for changes in China’s economic policies. A Chinese delegation led by Vice Minister of Commerce Wang Shouwen will meet U.S. representatives led by Treasury Under Secretary for International Affairs David Malpass, China’s Ministry of Commerce said in a statement on its website. The Wall Street Journal reported that the talks in Washington would take place on Aug. 21 and 22, just before $16 billion in new U.S. tariffs on Chinese goods take effect, along with an equal amount of retaliatory tariffs from Beijing. While the engagement was seen by analysts and business officials as positive, they cautioned that the talks were unlikely to lead to a breakthrough, given they involve lower-level officials, led on the U.S. side by the Treasury Department, not the U.S. Trade Representative (USTR). There also remains a wide gap between the two sides over Washington’s demands that Beijing improve market access and intellectual property protections for U.S. companies, cut industrial subsidies and slash a $375 billion trade deficit with China. Kudlow, who heads the White House Economic Council, declined to comment on the specific goals of the Malpass-Wang talks. “It is a good thing if they’re sending a delegation here. We haven’t had that in quite some time,” Kudlow told CNBC television. “The Chinese government in its totality must not underestimate President (Donald) Trump’s toughness and willingness to continue this battle, to eliminate tariffs and non-tariff barriers and quotas, to stop the theft of intellectual property and to stop the forced transfer of technology,” Kudlow added.
US-China trade talks will focus on yuan weakness, experts say - The Chinese yuan's weakness will be a focal point during the U.S.-China trade talks in late August, as both countries grapple with the fallout from recent fluctuations in the currency markets, analysts said.The mid-level talks will likely be about "how exactly are they going to deal with the RMB (renminbi)," said Robin Brooks, chief economist at the Institute of International Finance, referring to another name for the yuan. On Friday morning in Asia, the dollar traded around 6.89 against the Chinese yuan — a whisker away from 7, a level last witnessed in May 2008. The dollar has gained about 6 percent against the yuan since the start of the year, with much of the appreciation occurring in the last two months.The Chinese currency has been weakening against the greenback due to both escalating trade tensions as well as rising interest rates in the U.S. driving up the value of the the dollar.China's central bank sets a daily exchange rate for the yuan based on recent prices and allows trading against the dollar within a band of 2 percent above or below that level.Recent weakness in the yuan has spurred some to say that China is allowing its currency to depreciate — either deliberately or in tandem with market forces — as the trade war with the U.S. hits its economy."China basically devalued in a retaliatory fashion to the tariffs that the U.S. imposed. I think that ended up being counterproductive," said Brooks, who predicted both parties would try to find a way forward.During his campaign for the White House, Donald Trump said he would name China a currency manipulatorfrom his first day in office. But that rhetoric has been much more subdued during his presidency.However, there are signs he is ratcheting up the heat again."In China, their currency is dropping like a rock and our currency is going up, and I have to tell you it puts us at a disadvantage," Trump said in a CNBC interview last month.But many currency experts say that a weak yuan would actually be bad for China as it imports most of its parts from the rest of Asia. So, any manufacturing components priced in a non-yuan currency become more expensive in local terms, raising the cost of producing Chinese goods. There's also Chinese debt denominated in the dollar, which would become more burdensome when the yuan weakens.
China, Unsure of How to Handle Trump, Braces for ‘New Cold War’ Perhaps nowhere outside America’s heartland is Donald Trump given more credit than in Beijing. In government offices and think tanks, universities and state-run newsrooms, there is an urgent debate underway about what many here see as the hidden motive for Washington’s escalating trade war against President Xi Jinping’s government: A grand strategy, devised and led by Trump, to thwart China’s rise as a global power. “The Trump administration has made it clear that containing China’s development is a deeper reason behind the tariff actions,” said He Weiwen, a former commerce ministry official and now a senior fellow at the Center for China and Globalization, an independent research group filled with former bureaucrats. These sentiments were echoed by many of the more than two dozen current and former government officials, business executives, state-affiliated researchers, diplomats and state-run media editors interviewed for this article. Most requested anonymity to speak their minds about sensitive matters. A common suspicion ran through the conversations -- that the tariffs are just a small part of Trump’s plan to prevent China from overtaking the U.S. as the world’s largest economy. Several people expressed concern that the two nations may be heading into a long struggle for global dominance that recalls the last century’s rivalry between the U.S. and Soviet Union. “The trade war has prompted thinking in China on whether a new cold war has begun,” The dispute, he says, “now has military and strategic implications” -- reflecting concern among some in Beijing that tensions could spill over into Taiwan, the South China Sea and North Korea. The general pessimism is a major shift among China’s elite, many of whom had initially welcomed the rise of a U.S. president viewed as a transactional pragmatist who would cut a deal to narrow a $375 billion trade deficit for the right price. Now, with tariffs on $34 billion of goods already in effect and duties on another $216 billion in the pipeline, a majority saw no quick fix to a problem that is starting to rattle the country’s top leaders. The turning point came a few months ago, when Trump put a stop to a deal for China to buy more energy and agricultural goods to narrow the trade deficit. Not only did that insult Xi, China’s all-powerful leader who had sent a personal emissary to Washington for the negotiations, but it crystallized a view in Beijing that Trump won’t quit until he thwarts China’s rise once and for all.
China ‘training for strikes’ on US targets -- BBC - China's military "is likely training for strikes" against US and allied targets in the Pacific, a Pentagon report warns. The annual report to Congress says China is increasing its ability to send bomber planes further afield. The report highlights its increasing military capability, including defence spending estimated at $190bn (£150bn) - a third that of the US. China has not yet commented on the report. The warning about air strikes is one part of a comprehensive assessment of China's military and economic ambitions. "Over the last three years, the PLA [People's Liberation Army] has rapidly expanded its overwater bomber operating areas, gaining experience in critical maritime regions and likely training for strikes against US and allied targets," the report says. It goes on to say it is not clear what China is trying to prove by such flights. The PLA may demonstrate the "capability to strike US and allied forces and military bases in the western Pacific Ocean, including Guam," the report adds. China's military budget is expected to expand to $240bn over the next 10 years, according to the assessment. It also highlights China's growing space programme "despite its public stance against the militarization of space".
The Current State Of "Global Trade War" In One Infographic - Deutsche Bank has released a one-page summary on the ongoing “Trade War” situation. As DB's Jim Reid notes, "a lot has happened in recent months on this front and a lot more is still pending. While we acknowledge that the topic is well written about, the fluidity of ‘Trade war’ related headlines makes it difficult to follow the status of where we stand with regards to different tariffs measures, retaliations and the numbers behind them. With this in mind, we have put together this one page infographic note highlighting (i) the status of different tariff measures announced so far (ii) the retaliatory push back (iii) room for further escalations (iv) potential macroeconomic impacts and (v) the most recent rhetoric."
Trump Administration Set To Deport Four-Year-Old Legally adapted by US citizens - Angela Becerra is four years old. Her parents are both legal U.S. citizens. Her adoption is legal, documented, and official. Everything the family has done has been open and through all the correct legal channels. The Trump administration will deport the preschooler in a few short weeks if her parents aren’t able to somehow avert this disaster. According to KDVR, parents Amy and Marco Becerra are U.S. citizens. Marco holds dual citizenship, also being a citizen of Peru. Both are government employees, Amy at the state level and Marco at the federal. When they spent time in Peru in 2014, a worker from an orphanage there asked if they could take care of a tiny, 11-day-old baby who had been abandoned at birth by a developmentally disabled mother. In April 2017, the couple completed their adoption in a Peruvian court and planned to head back to the U.S. with their baby girl. Unfortunately, because her immigration application had already been submitted and not yet approved, Angela, who would turn 3 in May, could not enter the U.S. with her parents. It took over a year for a visa to be granted, and it was a tourist visa. It expires at the end of August. Of course, as the legal child of two legal U.S. citizens, it was expected that Angela’s immigration application would be approved. Less than a month before her tourist visa expired, with likely too little time to complete an appeal, the immigration application was denied by the Trump administration.Angela isn’t the first victim of U.S. immigration policies — more specifically, not the first victim who is a child legally adopted by U.S. citizens. According to Adoption, until 2001, a child adopted by U.S. citizens didn’t automatically become a citizen himself. They estimate that there are around 30,000 legal adoptees in the U.S. at risk of deportation. There are cases in the past in which, as an adult with a criminal record, one of these adoptees has indeed been deported. However, at age four, preparing to enter pre-kindergarten classes, Angela most certainly does not have a criminal record.
Mass grave revealed at Arizona Air Force bombing range A border search-and-rescue group, Aguilas del Desierto, or “Eagles of the Desert,” found over a dozen remains of migrants after it was given special permission to search for a missing person within a limited southern section of the Barry Goldwater Air Force bombing range in Welling, Arizona, along the US/Mexico border. The bombing range is a vast 70-mile vast swath of land that stretches from Southeast of Yuma, Arizona stretching all the way to the Sonoran Desert National Monument. The range crosses through well-known migrant routes and has remained inaccessible to human aid groups or forensics teams.Eagles of the Desert (EED) was the first group ever allowed to perform searches on the high security bombing range which is utilized for air-to-ground bombing practice by A-10’s, F-16s and F-35 Lighting II Air Force Jets. The base is also used for Marine Corps and NATO allied flight crews while deployed to any of the aforementioned bases for training.EED was allowed limited access to an unused area to search for the individual for whom they had a missing person’s report. The migrant was never found, but in the short time frame of searching, the group came across 13 human remains in a very small section of the bombing range. The concentration of remains in the limited area leaves little doubt to EED that the numbers of remains are likely in the hundreds, if not thousands. Last year a Texas sheriff commented that, “For every one [body] we find, we’re probably missing five.”
Donald Trump Isn’t Just Slashing the Refugee Quota, He’s Dismantling the Entire Resettlement System - Maimed and fearing for her life, Deborah Jane fled to Nairobi, Kenya, where, after a lengthy process, she won a coveted spot on the list of refugees to be resettled in the United States. She arrived alone in Columbus, Ohio, in January 2016, and immediately applied to have her children — the youngest of whom was 4 years old — to join her in the U.S. A year later, around the same time Donald Trump assumed the presidency, her paperwork was approved. “We just needed the children to do interviews, medical — a few things, and then they’d be able to come,” Jane told The Intercept, “But since then, there has been only silence.” The roadblocks Jane faces are part of what advocates describe as an apparently concerted effort by the Trump White House to systematically dismantle the nation’s refugee resettlement program. Some of this onslaught has been explicit: As the world’s already-unprecedented refugee population continues to climb, the Trump administration is considering slashing the annual refugee cap to 25,000 for the 2019 fiscal year, down from this year’s historic low of 45,000, the New York Times reported earlier this month. The administration last year suspended all refugee resettlement for 120 days and diverted resources and personnel away from refugee processing, further weakening an already-backlogged system. These disruptions have caused a cascade of delays and interagency confusion, while a lack of transparency leaves refugees and advocates alike at the mercy of an increasingly antagonistic system. Sources familiar with the program describe chaos amid shifting security protocols, with particular detriment to refugees from the Middle East and other Muslim-majority countries. The president is expected to announce his recommended refugee quota in September, ahead of the October 1 start of the fiscal year. Regardless of what he decides, however, advocates report that the refugee quota is no longer a reliable indicator of actual refugee admissions. At the current pace, the administration is on track to settle about 20,000 refugees — out of a global population of roughly 25 million — by September 30, the end of the fiscal year. In 2017, the U.S. admitted only 33,000 refugees, marking the first time that the country resettled fewer refugees than the rest of the world.
A Clampdown Slowing Legal, Not Just Illegal, Immigration -- A Canadian financial firm recently opened an office in the U.S. and, as part of its staffing-up process, hired an analyst—a numbers whiz with a Ph.D. in physics—who had been working in Boston for another financial company. Because the man was a Chinese national, his firm took what previously had been a pro forma step: It applied to have his H-1B visa transferred to his new employer. In today’s immigration climate, though, that step is no longer routine. U.S. authorities denied his new visa. The math whiz, having lost his legal status, returned to China. And his job now is being done not in the U.S. but back at the financial firm’s home office in Canada. William Stock, a Philadelphia immigration lawyer who handled the case, says that in the past there “wouldn’t have been any doubt” that the visa transfer would have been approved. Instead, the anecdote illustrates a little-understood but economically important aspect of the raging debate on immigration: While the loud public discussion focuses on Trump administration policies to stop illegal immigration, the administration also is taking myriad quieter steps to reduce legal immigration. Some of these steps are being made through new policies, usually implemented with little public notice. Sometimes, say lawyers and immigration advocates, the changes are simply the result of stricter interpretation of existing regulations. Indeed, the American Immigration Lawyers Association this spring published a 26-page booklet detailing how Trump administration policy changes “are slowing and restricting legal immigration.” The association now is working on an update to incorporate new actions taken in the months since. “Brick by brick the administration actually is making it more difficult for higher-skilled individuals to come to work in the United States,” says Diane Rish, associate director of government relations for the association. Among other things, this new posture is having a chilling effect on the issuance of H-1B visas, the main vehicle businesses use to hire highly educated foreign nationals who, they say, often fill skill gaps not met by the supply of American workers. Mr. Stock, the lawyer, whose clients include numerous large corporations, says that when an H-1B visa is denied “that does not mean a U.S. worker is getting that job. Sometimes that is the outcome. But sometimes it means the project doesn’t get initiated. Other times it means the project gets moved to India.”
Senate confirms more judges, barreling ahead with Trump's transformation of the courts - President Trump has put more judges on the circuit courts this far into his first two years than other administrations had, thanks to Senate Republicans.The Senate on Thursday confirmed two more of Trump's nominees, bringing to 26 the number of new appellate judges that have been approved this session of Congress.The judges confirmed Thursday — U.S. District Judge A. Marvin Quattlebaum Jr. and U.S. Attorney's Office Deputy Chief Jay Richardson — will fill seats on the 4th Circuit Court of Appeals in South Carolina.A Trump-nominated judge now holds one out every seven seats on the circuit courts, according to the office of Senate Majority Leader Mitch McConnell.Republicans have made a priority of confirming judges in their fight to hold the Senate majority ahead of the fall midterm election. Democrats have stalled many of Mr. Trump's picks.Conservatives have long taken an interest in the judiciary. McConnell leads a narrowly divided Senate, 51-49, which makes it difficult to pass legislation. But he has seized on the chance to reshape the courts in the Trump era. Judges can be confirmed with a simple majority of senators.Some Democrats have complained that Mr. Trump and Republicans are stacking the courts with some of the more conservative jurists in the nation. They point to cases when nominees were pushed forward for confirmation without backing from a nominee's home-state senators. Other court picks from Trump are getting bipartisan support.Democrats had changed the rules several years ago, when they had control, to allow judicial nominees to be confirmed with a majority vote. Sen. Lindsey Graham, R-S.C., praised the Trump nominees from his state Thursday in a floor speech ahead of the vote.He called Quattelbaum "one of the most capable lawyers I've ever met." And he called Richardson, who successfully prosecuted Dylann Roof in the Mother Emanuel AME Church shooting in South Carolina, "one of the great legal minds of our time." Both judges were overwhelmingly approved by the Senate.
Trump, Seeking to Relax Rules on U.S. Cyberattacks, Reverses Obama Directive - President Trump has reversed an Obama-era memorandum dictating how and when the U.S. government can deploy cyberweapons against its adversaries, in an effort to loosen restrictions on such operations, according to people familiar with the action.Mr. Trump signed an order on Wednesday reversing the classified rules, known as Presidential Policy Directive 20, that had mapped out an elaborate interagency process that must be followed before U.S. use of cyberattacks, particularly those geared at foreign adversaries.The change was described as an “offensive step forward” by an administration official briefed on the decision, one intended to help support military operations, deter foreign election influence and thwart intellectual property theft by meeting such threats with more forceful responses.The Trump administration has faced pressure to show that it is taking seriously national-security cyberthreats—particularly those that intelligence officials say are posed by Moscow.Top administration officials are also devising new penalties that would allow stronger responses to state-sponsored hacks of U.S. critical infrastructure, The Wall Street Journal reported earlier this month, a mounting worry due to Russia’s efforts to penetrate American electric utilities. Although the Obama-era policy was classified, its contents were made public when it was leaked in 2013 by former intelligence contractor Edward Snowden. It was signed by Mr. Trump’s predecessor, President Obama, in 2012. It wasn’t clear what rules the administration is adopting to replace the Obama directive. A number of current U.S. officials confirmed the directive had been replaced but declined to comment further, citing the classified nature of the process.
Congress is set to grill the FCC's chairman for falsely claiming his agency was hit with a cyberattack — here's how it could affect the war over net neutrality - Ajit Pai is going to be in the hot seat this week — as well he should be. The chairman of the Federal Communications Commission is set to testify Thursday in front of a Senate oversight committee. He's certain to have to respond to questions while there about false statements he and some of his subordinates made to lawmakers about an incident last year in which the agency's computer systems got overwhelmed during the comment period for its then-ongoing net-neutrality proceeding. Pai has tried to distance himself from those false statements, blaming them on the agency's former chief information officer, David Bray. But lawmakers are sure to want to know when Pai knew the statements were false and why he didn't retract them earlier. The FCC's servers were overwhelmed after comedian John Oliver focused on the net-neutrality debate in an episode of "Last Week Tonight." HBOWhile widely popular with the public, the rules were vehemently opposed by the big telecommunications companies and by some anti-regulatory Republicans — most notably Pai, who vowed to repeal them even before becoming the chairman of the FCC. He launched that effort soon after taking over as head of the agency under President Donald Trump. Immediately after the episode aired, the FCC's comment system saw a spike in traffic, with the site unavailable to many users in the wake. To outside observers, it seemed clear that the site's unavailability was likely a result of "Last Week Tonight" directing its viewers to the FCC's site for the purpose of registering their objections to the net-neutrality repeal effort.But that's not how the FCC portrayed things. The day after the episode aired, the agency issued a statement attributed to David Bray, its CIO, that blamed the system problems on "deliberate attempts by external actors to bombard the FCC's comment system." Bray said the effort came in the form of "multiple distributed denial-of-service attacks," better known as DDoS attacks.The charge was a loaded one. DDoS attacks have become a fairly routine way for hackers to make a website appear offline and unavailable to its users. But launching one against a US government server is a federal crime. So by alleging that a DDoS attack had brought down the FCC's server, Bray triggered an investigation by the agency's inspector general, working in coordination with the FBI.The DDoS charge also helped to distract attention from the popular outrage against the repeal effort. Instead of everyone talking about all the comments f looding into the FCC site opposing the repeal, the headlines focused on how the FCC site was the victim of an alleged cyberattack.
Conservatives call for constitutional intervention last seen 230 years ago - It’s been more than 230 years since America’s last constitutional convention, but there is growing confidence in some conservative circles that the next one is right around the corner – and could spell disaster for entitlement programs like medicare and social security, as well court decisions like Roe v Wade.“I think we’re three or four years away,” said the former Oklahoma Senator Tom Coburn on Friday, speaking at the annual convention for American Legislative Exchange Council (Alec) – a powerful rightwing organization that links corporate lobbyists with state lawmakers from across the country.Coburn, a veteran Republican lawmaker, now works as a senior adviser for the advocacy group Convention of States, which seeks to use a little known clause in article V of the US constitution to call a constitutional convention for new amendments to dramatically restrict the power of the federal government. Coburn, who retired from the Senate in 2010, said that the American republic is “failing”, and that such a convention is the “only answer” to the problems the country faces today. “We’re in a battle for the future of our country,” Coburn told the assembly of mostly conservative state lawmakers meeting in New Orleans. “We’re either going to become a socialist, Marxist country like western Europe, or we’re going to be free. As far as me and my family and my guns, I’m going to be free.” Convention of States, with Alec’s support, is one of three prominent conservative groups pushing for a new constitutional convention. Under article V, if two-thirds of state legislatures so choose, they can force congress to convene such a meeting. On the agenda for Convention of States: an amendment to require a balanced budget, term limits for congress, repealing the federal income tax and giving states the power to veto any federal law, supreme court decision or executive order with a three-fifths vote from the states. “The only chance we have to restore this country, that is peaceful, is this convention,” It’s not as far fetched as it sounds. A coalition seeking just the balanced budget amendment currently has 28 out of the required 34 state legislatures on board, with active bills calling for a convention. Since Trump’s election, Arizona and Wyoming have both passed bills to join in the call while Maryland, Nevada and New Mexico have repealed versions they had previously put on the books.
Knives out in the White House as fired aide releases tapes of Trump, Kelly -- For the past several days, the official American politics has been gripped by the extraordinary revelation that former Trump aide Omarosa Manigault-Newman, known in media shorthand by her first name only, had secretly recorded conversations with Trump and White House chief of staff John Kelly.Manigault-Newman gave recordings to the press of her December 2017 firing by Kelly in the White House Situation Room and a subsequent phone call with Trump, in which he claimed to be unaware of what his own chief of staff had just done.The fired aide has made nonstop appearances on cable television over the last week to promote her new book, Unhinged: An Insider’s Account of the Trump White House, which was released yesterday. She claims to be in possession of many other recordings taped secretly during her time in the White House, including conversations with Trump’s daughter Ivanka and son-in-law Jared Kushner.The White House struck back Tuesday morning, with the Trump campaign filing for arbitration in New York City, alleging that Manigault-Newman was violating the non-disclosure agreement she signed when she joined it in 2015. The agreement is an extraordinary lifetime gag rule that is likely illegal and unenforceable, but can be used to tie up a former employee in expensive legal proceedings.The media furor over the tapes and the newly released book is out of all proportion to the actual content of both, which provide no significant new information. The book itself consists almost entirely of unverifiable accusations against Trump and various figures within the White House, of a highly subjective and personal character. Much of the press coverage has focused on claims by Manigault-Newman, who has long been the most prominent African-American in Trump’s inner circle, of the existence of a tape of Trump uttering a racial slur against black people during filming of his NBC reality program “The Apprentice.” She claims that she had spent months while in the White House trying, without success, to locate the recording, and released recordings yesterday of staffers discussing contingency plans should it eventually surface. However, the “revelation” that Trump, who infamously called African nations “shithole countries,” is a racist, would come as a surprise to no one.
Trump Campaign Sues Omarosa; "Millions" Sought Over Broken NDA -- President Trump's campaign on Tuesday filed charges against former aide Omarosa Manigault-Newman, claiming she violated a 2016 nondisclosure agreement (NDA) by disparaging the president in her new book, and secretly recording conversations with Trump and White House chief of staff John Kelly, the latter of which took place in the ultra-secure Situation Room - a SCIF (Sensitive Compartmented Information Facility) when Kelly fired her last December, reports the Washington Examiner. In New York, Trump campaign lawyers filed for arbitration to force the former star of “The Apprentice” to abide by the agreement they say she signed when joining the 2016 campaign.According to a sample of the agreement provided to Secrets, she was required to keep proprietary information about the president, his companies or his family confidential and to never “disparage” the Trump family “during the term of your service and at all times thereafter.” -Washington ExaminerA Trump campaign official said in a statement "Donald J. Trump for President, Inc. has filed an arbitration against Omarosa Manigault-Newman, with the American Arbitration Association in New York City, for breach of her 2016 confidentiality agreement with the Trump Campaign," adding "President Trump is well known for giving people opportunities to advance in their careers and lives over the decades, but wrong is wrong, and a direct violation of an agreement must be addressed and the violator must be held accountable." In her book, Unhinged: An Insider Account of the Trump White House, and especially on her controversial book tour on TV, she has turned on her former friend and employer, calling him unfit for office. She claimed he used racist language during the filming of “The Apprentice,” but insiders and Trump deny the claim. She has also revealed private conversations she had with Trump and others, including from the secret White House Situation Room, a potential violation of federal law. -Washington Examiner
Pentagon again delays release of sex assault study, likening report to an untested weapon – The Pentagon again delayed release of a report ranking the risk of sexual assault at more than 200 military installations, comparing the study to unleashing an untested weapon system, according to interviews and documents obtained by USA TODAY.The release of the study, rescheduled for September, could spark concerns among troops and their families, particularly those stationed at bases where RAND Corp. research determined they face the highest risk of suffering sexual assault.The report's rankings will be of particular interest to the tens of thousands of recruits who join the military each year and their families. It could raise questions about what choice, if any, they have in declining assignment to a post with a higher risk of assault and what liability the military has for a recruit assaulted at such a base. The Pentagon received an updated draft of the study on July 24, four days after USA TODAY reported that Defense Department officials were reluctant to release it. RAND stood by its findings. The only changes being made to it now are to communicate its conclusions better, according to Jeffrey Hiday, a RAND spokesman.The report required “additional steps” by RAND to explain its “approach and conclusions,” Stephanie Barna, the top personnel official at the Pentagon, wrote in a letter to Sen. Kirsten Gillibrand, D-N.Y. Barna wrote that the Pentagon has been working with RAND to "resolve questions about the study's methods and outcomes." She went on to compare the report to an untested weapon system. “Just as (the Department of Defense) would not field a weapon system without knowing its strengths, limitations and functionality, we must be certain of the strengths, limitations and functionality of the new risk estimation analysis fielded in the RAND report,” Barna wrote. RAND disputed any contention that its approach to the study was flawed.
Newly released official documents show CIA head Gina Haspel directly supervised waterboarding at “Black Site” in Thailand. Sen. Intelligence Committee Chair Richard Burr and Vice Chair Mark Warner hid that, demonstrating once again that today’s Senate “oversight” means “overlook.” Hold your nose and read: - Recall what happened to Ray when he tried to expose this same information at the “open” hearing on Haspel’s nomination. Kudos to the National Security Archive. Here is brief excerpt from the Archive report:… The released Haspel cables feature extensive redactions by the CIA, including their dates (although those can be ascertained from the declassified CIA Inspector General’s report, among other sources) and most of the information results from the torture (although those have been summarized by the Senate Intelligence Committee report and two of the Haspel cables even admit failure to produce actionable intelligence). [emphasis added.]The biggest mystery in the released cables is whether Gina Haspel wrote Cable 11359, from December 1, 2002, which uses remarkably vivid language to describe the torture sessions: The interrogators “strode, catlike, into the well-lit confines of the cell at 0902 hrs [redacted], deftly removed the subject’s black hood with a swipe, paused, and in a deep, measured voice said that subject – having ‘calmed down’ after his (staged) run-in with his hulking, heavily muscled guards the previous day – should reveal what subject had done to vex his guards to the point of rage.” Not only Haspel, but co-conspirators Burr and Warner need to be held accountable. Those “gentlemen” from North Carolina and Virginia are now thoroughly discredited, not only as tools of the CIA, but also as co-conspirators in concealing documentary evidence of war crimes. And still, many choose to trust their bizarre approach to “Russia-gate?” Go figure.
Botched CIA Communications System Helped Blow Cover of Chinese Agents --- It was considered one of the CIA’s worst failures in decades: Over a two-year period starting in late 2010, Chinese authorities systematically dismantled the agency’s network of agents across the country, executing dozens of suspected U.S. spies. But since then, a question has loomed over the entire debacle. How were the Chinese able to roll up the network? Now, nearly eight years later, it appears that the agency botched the communication system it used to interact with its sources, according to five current and former intelligence officials. The CIA had imported the system from its Middle East operations, where the online environment was considerably less hazardous, and apparently underestimated China’s ability to penetrate it. “The attitude was that we’ve got this, we’re untouchable,” said one of the officials who, like the others, declined to be named discussing sensitive information. The former official described the attitude of those in the agency who worked on China at the time as “invincible.” Other factors played a role as well, including China’s alleged recruitment of former CIA officer Jerry Chun Shing Lee around the same time. Federal prosecutors indicted Lee earlier this year in connection with the affair. But the penetration of the communication system seems to account for the speed and accuracy with which Chinese authorities moved against the CIA’s China-based assets. “You could tell the Chinese weren’t guessing. The Ministry of State Security [which handles both foreign intelligence and domestic security] were always pulling in the right people,” one of the officials said. “When things started going bad, they went bad fast.”
Commerce Secretary Wilbur Ross may have broken criminal conflict of interest law, watchdog says --Commerce Department Secretary Wilbur Ross may have violated a criminal conflict of interest law by holding stock in companies that could have been affected by Trump administration actions in which he was involved,a campaign finance watchdog said in a complaint filed Monday.The nonprofit Campaign Legal Center's complaint said public records suggest that the billionaire Ross also may have violated three laws "that prohibit certain false statements or omissions" in congressional testimony and financial disclosure filings he made regarding his holdings.The center asked the Commerce Department's internal ethics watchdog, the Office of the Inspector General, to "conduct a thorough investigation of the matter addressed in this complaint" and to make public its findings.A lawyer for Ross, who since November has faced scrutiny for his financial holdings, after CNBC published this story issued a statement, saying, "Secretary Ross has not violated any conflict of interest law or regulation. He has not participated personally and substantially in, nor taken any action in regard to a particular matter that would have had a direct and predictable effect on his financial investments."CLC's 115-page complaint flags Ross' involvement in a Trump administration investigation into whether the United States should impose a tariff on steel imports at the same time he was holding stock in his former investment management firm, Invesco, which "had acquired a major interest in Chinese steel that the steel investigation directly and predictably affected."The center also raised concerns about Ross' initial failure to disclose stock ownership in Greenbrier, "a steel-dependent rail car manufacturer," as well as his holdings in shipping giant Navigator while he was participating in the steel investigation and in the Trump administration's effort "to promote the natural gas trade." The steel probe and the natural-gas push affected Navigator's interests, the watchdog argued.The group said Ross also may have retained other assets that represent a conflict of interest.The center noted that Ross' public disclosure filings do not account for his divesting 46 assets that he had been required to shed, including interests in the Bank of Cyprus.The group says there is doubt that Ross properly addressed conflicts stemming from 25 carried interests in private equity funds. Finally, the complaint said Ross also may have made false statements or omissions in his recent congressional hearing, and in his Nov. 1 compliance certification, in which he said he had sold all interests in the companies in which he was required to divest: Air Lease, Invesco and Sun Bancorp.
Bannon mounts last-ditch effort to save the House for Trump -- Steve Bannon is attempting a political resurrection, launching a 25-person pro-Trump rapid-response and polling operation that is framing the midterms as an up-or-down vote on the president’s impeachment.The former White House chief strategist has started Citizens for the American Republic, an outside political group that intends to advise surrogates, generate talking points, and flood the TV and radio airwaves ahead of a perilous midterm election. As part of the campaign, Bannon — a former Hollywood producer who’s made several conservative films — will soon release a new documentary, “Trump@War,” which he plans to release in September on the two-year anniversary of Hillary Clinton’s now-infamous speech in which she referred to Trump supporters as “deplorables.” The slickly produced movie depicts the president in deeply flattering terms, casting him as a populist hero who’s followed through on his campaign promises and defied a long line of liberal critics. It notably does not focus on the culture wars that Trump advisers have said will be the key to his re-election strategy, but tells a positive story about the president’s 2016 campaign and time in office, while portraying liberal Trump haters as the ones who have targeted his supporters with physical violence in the streets. During a 30-minute interview at his Capitol Hill townhouse on Wednesday, Bannon described the looming midterm election as a referendum on Trump — and one that could have disastrous consequences for his presidency. He said his new group was designed to combat a mobilized Democratic machine bent on punishing Trump.
Clinton Foundation Tax Return Shows It’s A Scam - These figures are from an official copy of the Bill, Hillary and Chelsea Clinton Foundation for the tax year 2014. The copy of the tax return is from the National Center for Charitable Statistics website! They list 486 employees (line 5)! It took 486 people who are paid $34.8 million and $91.3 million in fees and expenses, to give away $5.1 MILLION WHICH IS LESS THAN 3% OF TOTAL REVENUES! Line 22 shows ending year net assets/fund balances of $332,471,349.00 which is up $85,171,891 from last year’s tax return! And they call this a CHARITY?
Mueller investigation seeks to implicate WikiLeaks and Julian Assange in “Russian interference” -- The investigation headed by Special Counsel and former FBI director Robert Mueller into alleged “collusion” between the Trump campaign and Russia during the 2016 presidential election has entered a new stage. Mueller is seeking to substantiate the case he advanced last month—as part of the indictment of 12 Russian intelligence officers—that Trump campaign insider Roger Stone and WikiLeaks editor Julian Assange were part of a conspiracy to hack and publish emails sent by the Democratic National Committee (DNC) and Hillary Clinton’s campaign chairperson John Podesta (see: “In run-up to Trump-Putin summit, Mueller charges 12 Russian officers with DNC email hack”).At least eight alleged “associates” of Roger Stone have been questioned or subpoenaed by Mueller’s investigation. One, Kristin Davis, gave a voluntary interview last month and was instructed to give formal testimony again to a grand jury last Friday. Another, Andrew Miller, refused to appear the same day and has been ruled in contempt of court. Last Thursday, Mueller also subpoenaed radio commentator and WikiLeaks supporter Randy Credico to testify on September 7.Credico’s lawyer stated last Friday that the Mueller investigation “probably want to talk to him about Roger Stone and Julian Assange.” Kristin Davis told CNN on Monday that the grand jury had questioned her “about whether or not any collusion happened with Russia.” The purported evidence of a nefarious plot involving Russian intelligence, Stone and WikiLeaks is threadbare to the point of being ludicrous.
CEO Calk conspired with Manafort to defraud his own bank: Prosecutors -- A federal prosecutor told a judge on Friday that bank CEO Steve Calk participated — alongside former Trump campaign chair Paul Manafort — in a conspiracy to defraud his own small Chicago-based bank.“Mr. Calk is a co-conspirator,” prosecutor Greg Andres said to the judge during Manafort’s trial on charges that include defrauding The Federal Savings Bank.“Mr. Manafort was submitting both false documents and other material to the bank,” Andres added. “Mr. Calk approved those loans. And it’s the government’s theory that he did that because he was trying to obtain a position within the Trump administration.”Prosecutors have previously argued that Calk’s bank approved $16 million in mortgage loans to Manafort because of Calk’s own political ambition. But the comments during Friday’s court proceedings were the government’s most forceful public statements to date about Calk’s role in the alleged fraud.Andres made the remarks in the midst of an argument over whether the judge should allow a particular question to be put to a witness.In an interview Saturday, former federal prosecutor Renato Mariotti cautioned against drawing the inference that Calk may be charged with a crime. Calling Calk a "co-conspirator" during a bench conference with Judge Thomas Ellis may have been a procedural move, and the judge expressed skepticism about the government's argument, but he stopped short of dismissing that argument out of hand. Mariotti said that in order to win the courtroom argument, Andres merely needed to convince the judge that it is more likely than not that Calk participated in a conspiracy, whereas a conviction in a criminal case would require that a jury find guilt beyond a reasonable doubt.
Manafort turned to Kushner in bid to get banker a Trump job - Paul Manafort turned to Jared Kushner for help in an attempt to secure a Trump administration job for a Chicago banker at the center of Manafort’s fraud trial. Manafort, Donald Trump’s campaign manager in 2016, got a quick response.“On it!’’ Kushner replied on Nov. 30, 2016, according to an email submitted by prosecutors into evidence Monday at Manafort’s trial on bank and tax-fraud charges.The email shows how, months after Manafort was deposed as campaign manager, he reached into Trump’s inner circle for help, without success. It also provides a window into how a disorganized, inexperienced campaign team was inundated with requests from supporters seeking coveted posts in the new administration.The banker who sought the job in Trump’s administration was Stephen Calk, chief executive officer of the Federal Savings Bank, which loaned $16 million to Manafort. Prosecutors say those loans, made after the election, were part of a corrupt scheme to help Manafort pull cash out of his properties. Calk pitched himself to Manafort as a Trump loyalist who could run the U.S. Army or serve in a senior position in the Treasury or Commerce departments. He turned to Manafort, who then asked for help from Kushner, Trump’s son-in-law. Kushner became a central figure in the transition and later in the White House. Calk didn’t get a government job.
Manafort lawyers' decision to rest without calling witnesses could lead to acquittal - Ex-Trump campaign chief Paul Manafort's lawyers made a tactical decision on Tuesday to not call any witnesses in their client's defense. That may have surprised many people who are following the trial, but it is a strategy that happens "all the time" in criminal cases, according to defense attorneys."It's not at all unusual," said Christopher Brennan, a former prosecutor in New York who now is a defense lawyer. He said the defense can sometimes accomplish more by cross-examining prosecution witnesses and poking holes in their testimony. Especially if the key witness lacks credibility."If I thought I had scored major points against the key prosecution witness and [prosecutors] had a strong documents case ... I would have done exactly the same thing," Brennan said.Manafort's lawyers might be justified for thinking just that Tuesday in U.S. District Court in Alexandria, Virginia, when they made it clear that neither Manafort nor anyone else would take the witness stand in his defense at his trial for alleged tax crimes and bank fraud.Asked outside court what he would say to people who believe that decision makes Manafort look guilty, Manafort's lawyer Kevin Downing replied, "This is the United States of America. You're presumed innocent until proven guilty. We believe the government cannot meet that burden."Days earlier, the defense team had subjected the prosecution's star witness, Rick Gates, to a withering cross-examination that hammered away at his embezzlement from Manafort's company, his extramarital affairs and his lying to authorities about his misconduct. Gates, who earlier pleaded guilty to charges of conspiracy and making false statements, testified as part of a plea deal with special counsel Robert Mueller's office, in which he hopes to win leniency at sentencing.
Manafort jury ends first day with questions, including definition of 'reasonable doubt' | TheHill: The jury in the criminal trial against former Trump campaign chairman Paul Manafort sent a note to the judge asking him to redefine "reasonable doubt" and answer three other questions as their first day of deliberations drew to a close. Judge T.S. Ellis III, who reconvened court to answer the questions orally for the 12-member jury shortly after 5 p.m., said the government is not required to prove the defendant's guilt beyond all possible doubt — only doubt based on reason. Manafort's defense team said the jury's question about reasonable doubt is the best question the defense can get. "It indicates someone has doubts," the team said. Ellis allowed the jury to recess for the day after their questions were answered. The jury also asked the court if someone is required to report a foreign bank account if they own less than 50 percent of the company and have no signature authority. They also asked for the definition for “shelf company” and the filing requirements related to income. A shelf company, according to Investment Bank.com, is one that has taken no actions since its inception, but simply been left to sit on the "shelf." Like shell companies, they are legal entities. Manafort has been indicted on 18 criminal counts of bank and tax fraud, as part of special counsel Robert Mueller’s probe charges that include failing to report overseas accounts. Federal prosecutors have spent the past two and a half weeks trying to convince the jury that he stashed millions he made as a political consultant for pro-Russian officials in offshore accounts and defrauded banks to obtain loans when the money dried up. On Thursday afternoon, Ellis re-read the jury instructions for the question relating to the foreign accounts, explaining that a person must own more than 50 percent of the account's profits or capital.
Jury signals it needs more time for Manafort verdict | TheHill: — The jury in the criminal tax and bank fraud trial against onetime Trump campaign manager Paul Manafort signaled in a note to the judge Friday afternoon they are unlikely to reach a verdict before the weekend. In a note to Judge T.S. Ellis III, the jury said they would like to finish at 5 p.m. because one of the jurors has an event they would like to attend. Ellis said he will bring the jury back in the courtroom at 4:50 p.m. to ask what time they would like to reconvene on Monday. The jury deliberations, now in their second day, started about 9:40 a.m. Friday. Kevin Downing, an attorney for Manafort, told The Hill that he sees the note as a sign the jury will not reach a verdict on Friday. Manafort has been charged with 18 counts of tax and bank fraud, charges that include failing to report overseas accounts. The jury on Thursday asked Ellis to redefine reasonable doubt and answer additional questions about reporting foreign bank accounts, filing requirements related income, shelf companies and what evidence relates to each charge. The jury has not been sequestered for the duration of the trial. At the end of each day, Ellis has reminded the jurors not to discuss the case with anyone, read any media reports or do any research on their own.
Trump heightens attacks on Sessions: He's 'scared stiff and missing in action' | TheHill: President Trump ratcheted up his attacks on Attorney General Jeff Sessions on Saturday, tweeting that Sessions was "scared stiff" and "Missing in Action" in defending him amid special counsel Robert Mueller's probe into possible ties between the Trump campaign and Russia. Trump slammed Christopher Steele, the former British intelligence officer at the center of the Trump dossier scandal, and the Department of Justice (DOJ) and once again slammed Mueller's investigation as a "witch hunt.""The big story that the Fake News Media refuses to report is lowlife Christopher Steele’s many meetings with Deputy A.G. Bruce Ohr and his beautiful wife, Nelly. It was Fusion GPS that hired Steele to write the phony & discredited Dossier, paid for by Crooked Hillary & the DNC," Trump tweeted. "Do you believe Nelly worked for Fusion and her husband STILL WORKS FOR THE DEPARTMENT OF 'JUSTICE.' I have never seen anything so Rigged in my life. Our A.G. is scared stiff and Missing in Action. It is all starting to be revealed - not pretty. IG Report soon? Witch Hunt!" he wrote.
FBI agent Peter Strzok fired over anti-Trump texts - The FBI has fired agent Peter Strzok, who helped lead the bureau’s investigation of Russian interference in the 2016 presidential election until officials discovered that he had been sending anti-Trump texts. Aitan Goelman, Strzok’s attorney, said FBI Deputy Director David L. Bowdich ordered the firing Friday, even though the director of the FBI office that usually handles employee discipline had decided that Strzok, 48, should face only a demotion and a 60-day suspension. Goelman said the move undercuts the FBI’s repeated assurances that Strzok would be afforded the normal disciplinary process. “This isn’t the normal process in any way more than name,” Goelman said, adding in a statement, “This decision should be deeply troubling to all Americans.” Strzok wrote on Twitter, “Deeply saddened by this decision. It has been an honor to serve my country and work with the fine men and women of the FBI.” The FBI declined to comment. The termination is a remarkable downfall for Strzok, a 22-year member of the bureau who investigated Russian spies, defense officials accused of selling secrets to China and myriad other important cases. In the twilight of his career, Strzok was integral to two of the bureau’s most high-profile investigations: the Russia case and the inquiry into Hillary Clinton’s use of a private email server while she was secretary of state. But when a Justice Department inspector-general investigation uncovered politically charged messages that Strzok had exchanged with another FBI official, he was relegated to a position in human resources. Conservatives soon made Strzok the face of their attacks against special counsel Robert S. Mueller III’s investigation of the president’s campaign, and the FBI took steps to remove Strzok from its ranks.
Trump unloads on the FBI, Robert Mueller, Jeff Sessions and the DoJ in a furious morning tweet storm --President Donald Trump attacked special counsel Robert Mueller's Russia probe on Tuesday, saying it's "looking at the wrong people," and slammed his own attorney general, Jeff Sessions, for allowing the "witch hunt" to take root in the first place."If we had a real Attorney General, this Witch Hunt would never have been started!" Trump wrote at one point during a Twitter rant spanning more than two hours.Trump has repeatedly attacked Sessions on social media, zeroing in on the embattled attorney general's recusal from investigations related to the 2016 presidential campaign. Sessions disqualified himself in early 2017, after he came under fire for failing to disclose during congressional testimony that he had been in contact with Russian Ambassador Sergey Kislyak during the 2016 presidential campaign. The Justice Department declined CNBC's request for comment on the president's tweet. The White House did not immediately provide comment on Trump's tweet about Sessions.Quoting conservatives and Trump-supporting personalities from Fox News Channel, the president endorsed the view that Peter Strzok, an ex-member of Mueller's team, should be "criminally investigated." Strzok was fired from the FBI on Monday over anti-Trump texts."The whole thing ... should be shut down," Trump tweeted, quoting Tom Fitton, the president of conservative legal activist group Judicial Watch. Just after 9 a.m. ET, the president suggested that the probe should be investigating his Democratic rival from 2016, Hillary Clinton. "Why aren't these angry and conflicted Democrats instead looking at Crooked Hillary?" Trump tweeted.
Trump Strikes Back at ‘Ringleader’ Brennan - There’s more than meets the eye to President Donald Trump’s decision to revoke the security clearances that ex-CIA Director John Brennan enjoyed as a courtesy customarily afforded former directors. The President’s move is the second major sign that Brennan is about to be hoisted on his own petard. It is one embroidered with rhetoric charging Trump with treason and, far more important, with documents now in the hands of congressional investigators showing Brennan’s ringleader role in the so-far unsuccessful attempts to derail Trump both before and after the 2016 election. Brennan will fight hard to avoid being put on trial but will need united support from from his Deep State co-conspirators–a dubious proposition. One of Brennan’s major concerns at this point has to be whether the “honor-among-thieves” ethos will prevail, or whether some or all of his former partners in crime will latch onto the opportunity to “confess” to investigators: “Brennan made me do it.” Well before Monday night, when Trump lawyer Rudy Giuliani let a small bomb drop on Brennan, there was strong evidence that Brennan had been quarterbacking illegal operations against Trump. Giuliani added fuel to the fire when he told Sean Hannity of Fox news: “I’m going to tell you who orchestrated, who was the quarterback for all this. … The guy running it is Brennan, and he should be in front of a grand jury. Brennan took … a dossier that, unless he’s the biggest idiot intelligence agent that ever lived … it’s false; you can look at it and laugh at it. And he peddled it to [then Senate Majority Leader] Harry Reid, and that led to the request for the investigation. So you take a false dossier, get senators involved, and you get a couple of Republican senators, and they demand an investigation—a totally phony investigation.”
Brennan Goes Nuclear After Losing Security Clearance, Pens Furious Screed In NYT - Former CIA Director John Brennan has written an op-ed in the New York Times following the Wednesday loss of his security clearance, claiming that President Trump is trying to silence him. Trump revoked Brennan's clearance for what he called "unfounded and outrageous allegations" against his administration, while also announcing that the White House is evaluating whether to strip clearances from other former top officials. Trump later told the Wall Street Journal his decision was connected to the ongoing federal probe into alleged Russian interference in the 2016 election and allegedly collusion by his presidential campaign.“I call it the rigged witch hunt, (it) is a sham,” Trump said in an interview with the newspaper on Wednesday. “And these people led it.”“It’s something that had to be done,” Trump added. –Reuters Writing in the New York Times, Brennan - who led the CIA under President Obama, called Trump's denials of collusion with Russia "Hogwash," and vowed not to be silenced. “The only questions that remain are whether the collusion that took place constituted criminally liable conspiracy, whether obstruction of justice occurred to cover up any collusion or conspiracy, and how many members of ‘Trump Incorporated’ attempted to defraud the government by laundering and concealing the movement of money into their pockets,” Brennan wrote in the Times. Mr. Trump clearly has become more desperate to protect himself and those close to him, which is why he made the politically motivated decision to revoke my security clearance in an attempt to scare into silence others who might dare to challenge him. -John Brennan On Wednesday, Brennan tweeted that Trump's move "should gravely worry all Americans" as it is "part of a broader effort by Mr. Trump to suppress freedom of speech & punish critics." "I will not relent," he concludes...
Taibbi: Censorship Does Not End Well --Silicon Valley is changing its mind about censorship. Two weeks ago, we learned about a new campaign against “inauthentic” content, conducted by Facebook in consultation with Congress and the secretive think tank Atlantic Council — whose board includes an array of ex-CIA and Homeland Security officials — in the name of cracking down on alleged Russian disinformation efforts. As part of the bizarre alliance of Internet news distributors and quasi-government censors, the social network zapped 32 accounts and pages, including an ad for a real “No Unite the Right 2”anti-racist counter-rally in D.C. this past weekend. Last week, we saw another flurry of censorship news. Facebook apparently suspended VenezuelaAnalysis.com, a site critical of U.S. policy toward Venezuela. (It was reinstated Thursday.) Twitter suspended a pair of libertarians, including @DanielLMcAdams of the Ron Paul Institute and @ScottHortonShow of Antiwar.com, for using the word “bitch” (directed toward a man) in a silly political argument. They, too, were later re-instated. More significantly: Google’s former head of free expression issues in Asia, Lokman Tsui, blasted the tech giant’s plan to develop a search engine that would help the Chinese government censor content. First reported by The Intercept, the plan was called “a stupid, stupid move” by Tsui, who added: “I can’t see a way to operate Google search in China without violating widely held international human rights standards.” This came on the heels of news that the Israeli Knesset passed a second reading of a “Facebook bill,” authorizing courts to delete content on security grounds.Few Americans heard these stories, because the big “censorship” news last week surrounded the widely hated Alex Jones. After surviving halting actions by Facebook and YouTube the week before, the screeching InfoWars lunatic was hit decisively, removed from Apple, Facebook, Google and Spotify.Jones probably does violate all of those platforms’ Terms of Service. I personally don’t believe his Sandy Hook rants — in which he accused grieving parents of being actors in an anti-gun conspiracy — are protected speech, at least not according to current libel and defamation law. Even some conservative speech activists seem to agree.And yet: I didn’t celebrate when Jones was banned. Collectively, all these stories represent a revolutionary moment in media. Jones is an incidental player in a much larger narrative.Both the Jones situation and the Facebook-Atlantic Council deletions seem an effort to fulfill a request made last year by the Senate Judiciary Committee. Last October, Facebook, Google and Twitter were asked by Hawaii Senator Mazie Hizono to draw up a “mission statement” to “prevent the foment of discord.”
“Duhhh, Stop Defending Alex Jones! This Will Never Hurt The Left, Derp Duh!” - Caitlin Johnstone - In the controversy surrounding the coordinated corporate censorship of Alex Jones’ notorious Infowars franchise across multiple online platforms, journalist Glenn Greenwald made an under-appreciated tweet in response to the various leftists and Democrats who’ve attacked anyone objecting to the censorship as “defending Alex Jones.” “The world’s dumbest and/or most deceitful people have always been those who equate ‘I defend X’s right to speak’ with ‘I defend X and their ideas,’” wrote Greenwald. “It’s the scummiest tactic there is. They did it to Chomsky when he opposed prosecuting a Holocaust denier.” The tweet got mostly lost in the shuffle of warring opinions at the time, but it so perfectly summed up the general gist of the debate. Principled leftists have objected to the way a handful of Silicon Valley plutocrats have been handed unlimited authority to determine what ideas and information are suitable for public consumption and coordinate to remove the online audiences of any speaker deemed unsuitable. The fact that they started with a widely reviled speaker shouldn’t matter, the argument goes, because sooner or later the powerful people who are able to censor will begin censoring in the interests of power. This always ends up hurting the left (the actual left, not the McResistance rainbow-flag-on-a Reaper-drone “left” that is permitted a platform in mainstream America), because leftists are the political faction that stands in the most stark opposition to the status quo which holds existing power structures in place.These few principled leftists brave enough to take a strong stand on the issue have been attacked and smeared with amazing viciousness by leftists who are blinded by their hatred of Jones, and by Democrats who know that censorship will never hurt their power-enabling faction. The position that the left is always the real target of censorship was ignored and replaced with the absurd straw man argument that anyone objecting to the coordinated de-platforming is defending Alex Jones because they love him and think Infowars is awesome.And now, just days after these foam-brained livestock applauded the removal of Alex Jones’ audience by their beneficent Silicon Valley overlords, we are already seeing Facebook deleting the pages of leftist outlets. Imagine that.
Twitter Bans Anti-War Activist Caitlin Johnstone For "Abusing" John McCain - Caitlin Johnstone I’ve received an email from Twitter which reads as follows:Hello Caitlin Johnstone,Your account, caitoz has been suspended for violating the Twitter Rules.Specifically, for:Violating our rules against abusive behavior.You may not engage in the targeted harassment of someone, or incite other people to do so. We consider abusive behavior an attempt to harass, intimidate, or silence someone else’s voice.Note that if you attempt to evade a permanent suspension by creating new accounts, we will suspend your new accounts. If you wish to appeal this suspension, please contact our support team. They’re calling it a “suspension”, but nobody can view my page and I can’t perform any activities on it, and it appears to be permanent unless I succeed in going through the anonymous and unaccountable appeals process. Now when people try to access my account, they get a screen that looks something like this depending on what device they’re using: I haven’t abused anybody, and I’ve been observing extreme caution with my language for the last few days ever since I made a political tweet about John McCain which drew the wrath of #Resistance Twitter. The offending tweet reads as follows: “Friendly public service reminder that John McCain has devoted his entire political career to slaughtering as many human beings as possible at every opportunity, and the world will be improved when he finally dies.”
Google tracks users who turn off location history - BBC -- Google records users' locations even when they have asked it not to, a report from the Associated Press has suggested.The issue could affect up to two billion Android and Apple devices which use Google for maps or search. The study, verified by researchers at Princeton University, has angered US law-makers. Hoogle said in response that it provides clear descriptions of its tools and how to turn them off.The study found that users' whereabouts are recorded even when location history has been disabled. For example:
- Google stores a snapshot of where you are when you open the Maps app
- Automatic weather updates on Android phones pinpoint roughly where a user is
To illustrate the effect of these location markers, AP created a visual map showing the movements of Princeton researcher Gunes Acar who was using an Android phone with location history turned off.The map showed his train commute around New York as well as visits to The High Line park, Chelsea Market, Hell's Kitchen, Central Park and Harlem. It also revealed his home address. To stop Google saving these location markers, users have to turn off another setting called Web and App Activity, which is enabled by default and which does not mention location data. Disabling this prevents Google storing information generated by searches and other activities which can limit the effectiveness of its digital assistant.
Derivatives: Donald Trump’s Most Dangerous Knowledge Gap -- Pam Martens - It has been soundly demonstrated that the President of the United States has a knowledge vacuum in proper presidential decorum, diplomacy, and accepted norms of behavior. There’s a serious danger that the current occupant of the Oval Office defines American etiquette so far down that we are shunned by enlightened countries as a backward, rogue nation. America has already gone rogue in withdrawing from the Paris Climate Accord, the United Nations Human Rights Council, and the Iran nuclear deal. And to the horror of the civilized world, the Trump administration is refusing to hear asylum applications from immigrants at our Southern border, ripping the children and infants from those parents, and effectively orphaning the children by deporting the parents. At the very least, this era in American presidential history will be written about for centuries by scholars attempting to understand how the American people let this happen and why Congress failed to censure the President as his conduct went from unseemly to unthinkable. But the biggest danger to Americans is that as this daily theater of deviance in the Trump administration commands the media’s attention, the hard investigative work into the dangers building on Wall Street goes unmet. This year marks the 10th anniversary of the worst crash of the U.S. financial system since the Great Depression, and yet, the worst contributors to that crash have yet to be meaningfully reformed. We’re talking about over-the-counter (OTC) derivatives.It’s a good bet that Donald Trump, who is encouraging further de-regulation of the financial industry, has not read the 2017 Financial Stability Report from the Office of Financial Research (OFR). In fact, his administration sacked 40 employees of that small agency last week after gutting its budget by 25 percent.
Getting the Volcker Rule right may be a waste of time -- In a series of op-eds about the Volcker Rule published in American Banker almost four years ago, I argued that the proprietary trading ban’s complexity, abundance of exemptions and the overly generous discretion afforded to banks subject to the rule would likely make implementing it a “fool’s errand.” Four years later, I am even more convinced that as the rule stands now it does not make the banking system any safer.There are significant shortcomings in the resources allocated to financial regulators for them to adequately monitor and enforce the Volcker Rule, and banks have inadequate systems and risk data aggregation to produce reliable metrics in order to comply. The five regulatory agencies responsible for enforcing the rule are understaffed and do not have the necessary IT systems to monitor traders. It is unreasonable to expect that regulators offsite or onsite can determine whether a trade is really on behalf of a customer or whether it is for proprietary trading. Because the Volcker Rule applies to banks, it is then bank examiners and offsite bank supervisors who bear the most significant responsibility to determine whether banks are complying. I have long argued that banks’ Volcker Rule metrics cannot be trusted, because the metrics are very data-intensive and there is a lot of flexibility in how banks can calculate them. For example, you can use multiple models to calculate the Value-at-Risk and stress testing metrics. Moreover, global systemically important banks in their own self-assessments to the Basel Committee on Banking Supervision admit year after year that they still cannot adhere to the Principles for Effective Risk Data Aggregation, commonly known as BCBS 239. This means that they have significant weaknesses in their systems, how they collect risk data, and how they report it to their own risk managers and bank regulators. Under these circumstances, it is not possible to trust that Volcker metrics are correct and that they really tell regulators the level of risk that traders are taking. It is unfortunate that banks have spent millions of dollars fighting the Volcker Rule. Bank executives could have used this money to improve IT systems and to hire invaluable professionals in the fields of IT and data science. The Volcker metrics require banks to improve significantly their data collection, analysis and reporting.It is just as disappointing that regulators have yet to require banks to disclose their metrics to the public. As such, how can investors, ratings a nalysts, legislators and the media know anything about banks’ Volcker Rule compliance and the true extent of banks’ risks in their trading portfolios? I also find it troubling that regulators have proposed changes to the Volcker Rule without the public knowing the results of those metrics and how often bank regulators use them for enforcement. Democratic Sens. Sherrod Brown, Jeff Merkley and Elizabeth Warren are right to ask for more disclosure.
Senators’ warning to Fed: Relief for midsize banks better be real — The recent regulatory relief law narrowed the definition of megabanks in the Federal Reserve's toughest supervisory tier, but also included a safety valve: The Fed can still maintain some prudential standards for smaller banks. But now, lawmakers who advocated for regional banks to escape the Fed's reach worry that safety valve could be used too often, leaving institutions that were supposed to be the big winners in reg relief still weighed down by the post-crisis regime. A group of seven senators, led by Sen. David Perdue, R-Ga., is planning to send the central bank a letter Friday morning outlining their concerns. They will urge the Fed to stand by the law's intent of subjecting only banks with systemic importance to the most rigorous supervisory procedures developed after the crisis. Among their concerns is that the central bank may still apply stress test requirements broadly for banks with assets of $100 billion to $250 billion. In general, they suggested that the Fed target standards only for certain institutions in that middle tier, rather than viewing that whole category with a single lens. "The Fed has consistently made representations to both Congress and the public that it has and will use its powers to tailor regulations to the appropriate risk profile," according to a copy of the letter obtained by American Banker, which the lawmakers addressed to Fed Vice Chairman for Supervision Randal Quarles. "Therefore, we urge you to tailor regulations for these financial companies and where your data indicates that they do not pose systemic risks, we strongly urge you to reduce regulations so that all non-systemic firms are treated accordingly." The reg relief law's key provision was raising the asset threshold for banks considered "systemically important financial institutions" — the most demanding regulatory class — from $50 billion to $250 billion. But it also gave the Fed discretion to preserve certain standards for banks between $100 billion and $250 billion. For its part, the Fed has won praise from the industry for many of its recent moves and statements, including steps to ease certain post-crisis capital standards for the biggest banks. Officials such as Quarles have sounded supportive of tailoring regulatory policy to a firm's risk profile. But the senators said recent comments by Quarles and Fed Chairman Jerome Powell about implementing the new law "have concerned us."
The candidates getting banks' cash: Top 5 in the House — In the House, the five lawmakers seeking reelection who have received the most donations from commercial banks for the upcoming midterms are all Republicans. These five lawmakers have received a total of just over $1 million for the 2018 election cycle from commercial banks, including from their political action committees and from individuals employed by a bank who gave $200 or more. Data is from the Center of Responsive Politics and is as of July 23. (Click here for top Senate recipients.) They include senior House GOP leaders, contenders to head the Financial Services Committee and strong voices for regulatory relief.
- Blaine Luetkemeyer, R-Mo. Luetkemeyer, who has received $253,338, currently chairs the House subcommittee on financial institutions and consumer credit. He is seen as a likely contender to succeed outgoing House Financial Services Committee Chairman Jeb Hensarling, R-Texas, if Republicans hold onto their majority. If his track record is any indicator, the banking industry could expect Luetkemeyer to reach across the aisle to get Democrats on board with financial reform more than Hensarling has under his chairmanship.
- Patrick McHenry, R-N.C. McHenry, who has received $235,400, currently serves as the vice chairman of the House Financial Services Committee, but many expect him to join House leadership after filling in for Majority Whip Steve Scalise, R-La., while Scalise was recovering from injuries he sustained during the congressional baseball shooting last year. McHenry has focused on financial technology issues, including pushing for regulatory “sandboxes.”
- Kevin McCarthy, R-Calif. McCarthy, who has received $179,800 from the industry, is currently the House majority leader. He is a contender to succeed Rep. Paul Ryan, R-Wis., as House speaker if Republicans can keep their hold on the chamber, which would mean he would ultimately determine what bills are able to move to the House floor for votes. McCarthy has also previously served on the House Financial Services Committee.
- French Hill, R-Ark. Hill, who has received $173,700 from commercial banks, has been endorsed by the American Bankers Association through television advertisements supporting his reelection campaign. He is an ex-banker and the House Financial Services Committee’s majority whip. Hill played a key role in the 2016 House passage of the Financial Choice Act, a reg relief package that was ultimately too sweeping to garner sufficient support in the Senate.
- Andy Barr, R-Ky. Barr, who has received $169,978 in contributions from commercial banks, heads the House subcommittee on monetary policy and has pushed for more congressional oversight of the Federal Reserve. While he has not yet indicated any interest in chairing the full Financial Services Committee, he will likely remain a steady voice on the committee pushing for more accountability at the Fed in interest rate decisions and rulemaking.
Emerging Markets Swoon as Turkey Wobbles --Yves Smith – The financial press commentary on the meltdown in the Turkish lira and worries about contagion has for the most part stuck to tried and true tropes. For instance, a hackneyed first page story in the Wall Street Journalclaims that early in the new century, all those sorta seedy countries decided they were going to get on the path of becoming good capitalist democracies. But they they backslid. Since my knowledge of Turkey and emerging markets are limited, hopefully the informational nuggets below are on target, and as usual, reader input is very much appreciated. Interestingly, Jesse speculated yesterdaythat a short-term bottom might be in and obligingly, the Turkish lira rose 6% this morning, almost fully recouping Monday’s losses. But it is still down roughly 25% for this month. Turkey was overdue for an economic reversal. The US didn’t cause the financial crisis in Turkey, but it is doing its best to make a bad situation worse.The best overview by far was at Moon of Alabama late last week. The short version is that Erdogan inherited a Turkey that was an economic mess, and got the benefit of reforms implemented by his predecessor plus additional ones he made. However, Erdogan was inattentive as to the pattern of the resulting growth, which was very heavy on unproductive real estate investment (sound familiar?). He was also unwilling to allow a recession to moderate inflation. But the biggest problem was that Turkey’s chronic current account deficit was getting larger and reached 6%. A rule of thumb is higher than 4% will lead to currency depreciation. Erdogan has made matters worse by not being willing to increase interest rates to choke rising prices.Trump’s threat to impose steel and aluminum tariffs on Turkey thus added fuel to an existing conflagration. But the Fed played a role too. The US has long taken the position that it bears no responsibility for how lax or tight money in the US plays a big role in the movement of hot money in and out of emerging economies.
The $4 Trillion Answer to Why Turkey Is Rattling Wall Street Banks and Insurers -On Friday the Dow Jones Industrial Average closed with a loss of 196 points as contagion jitters from Turkey’s worsening situation rattled markets. ADeutsche Bank, the big German lender whose U.S. subsidiary has a big footprint on Wall Street, lost 4.68 percent. Deutsche Bank has now lost 41 percent of its market value since February.But the selloff didn’t stop there. Two big U.S. life insurers also tumbled on Friday. MetLife lost 3.19 percent while Prudential Financial was off by 2.97 percent. What do Wall Street banks and U.S. life insurers have to do with a selloff in Turkey’s currency? Not that much. But they have a lot to do with European banks and European banks have a lot of exposure to Turkey in the way of loans as well as ownership stakes in several large banks in Turkey. “U.S. global systemically important banks (G-SIBs) have more than $2 trillion in total exposures to Europe. Roughly half of those exposures are off-balance-sheet…U.S. G-SIBs have sold more than $800 billion notional in credit derivatives referencing entities domiciled in the EU.” The OFR report had this to say about U.S. insurers and derivatives:“At the end of 2015, U.S. life insurers’ derivatives exposure, as reported in statutory filings, totaled $2 trillion in notional value. This $2 trillion does not include derivative contracts held in affiliated reinsurers, non-insurance affiliates, and parent companies that do not have to file statutory statements. Details on these entities’ derivatives positions are not publicly available.”The OFR report then captured the daisy chain for future panic and contagion with this passage:“According to statutory data on insurance company legal entities, nine large U.S. and European banks are counterparties to about 60 percent of U.S. life insurers’ $2 trillion in notional derivatives. These data show that despite central clearing, derivatives interconnectedness between the U.S. life insurance industry and banks remains substantial.”Then came the sine qua non for regulatory capture by the Wall Street banks. The OFR wrote:“Deficiencies in data and data management remain a critical vulnerability. Data needs remain unfilled, particularly in shadow banking markets. Many of the new data are not ready or available for analysis. Despite progress, the probability remains high that data deficiencies will again prevent risk managers and regulators from assessing risks before it is too late.”
Deutsche Bank and Citigroup Bleed More Equity Yesterday: The Reason Should Concern Us All - Pam Martens - Spasms in big Wall Street bank stocks have been happening on a serial basis over the past three years. (Seehere and here.) Yesterday offered another one of those bank warning signs to a Congress intent on further deregulation of an already dangerously deregulated market. As the stock market grappled yesterday with fears of sinking emerging market currencies leading to loan defaults at European banks that are derivative counterparties to the biggest banks on Wall Street, the Wall Street banking sector was a sea of red. Two banks in particular sold off more than others. Deutsche Bank is the big German lender that trades on the New York Stock Exchange. Posting a final trade of $11.19, Deutsche Bank closed at just 83 cents above its all time closing low of $10.36 which came in late June. This leaves Deutsche Bank with a scant $23.1 billion in equity market value to support a notional (face amount) derivatives book of 48 trillion euros or roughly 54.6 trillion U.S. dollars. Deutsche Bank has lost 75 percent of its market value over the past five years while it has continued to remain heavily engaged as a counterparty to global bank derivative trades. In 2016 the International Monetary Fund (IMF) issued a report that set off alarm bells about the potential for systemic banking contagion to emanate from Deutsche Bank as a result of its counterparty exposures. The report provided a graphic (see below) that demonstrated that problems at Deutsche could spill over onto such big Wall Street banks as Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America and Goldman Sachs. Those five banks just happen to be where derivatives are deeply concentrated in the U.S. Deutsche Bank’s 2017 Annual Report contains additional cause for alarm. It shows that 28 percent of Deutsche Bank’s €48 trillion derivatives book is not being centrally cleared but is simply bilateral contracts between it and another party. (That represents approximately 15.28 trillion U.S. dollars for a bank with $23.1 billion in equity capital.) That means that Deutsche Bank and whomever is on the other side of those derivatives trades are on the hook to each other for any losses, as opposed to a central clearing party (CCP) backing the trade. The lack of central clearing parties for derivative trades is why the big life insurer AIG required a $185 billion backstop from the U.S. taxpayer to prevent it from defaulting on its massive credit default derivative trades with Wall Street and global banks during the 2008-2009 financial crisis. It is also why Lehman Brothers imploded in short order in the 2008 Wall Street crash. A rational person might expect that the U.S. Senate Banking Committee, the House Financial Services Committee and the Senate’s Permanent Subcommittee on Investigations would be all over this situation, hauling in executives, subpoenaing documents and taking testimony under oath. Nothing of the sort has happened.
SEC has reportedly served Tesla with a subpoena after Elon Musk's take-private tweet - The Securities and Exchange Commisison has served Tesla with a subpoena after CEO Elon Musk tweeted that he was considering taking the company private and that he had the necessary funding lined up, according to reports from The New York Times and other outlets published Wednesday.Earlier reports said the SEChad intensified scrutiny of the automaker after the controversial tweet. A subpoena would be one of the first steps in a formal inquiry.Shares of Tesla were down 3 percent in afternoon trading, though they moved only a fraction of 1 percent following the Times article.Representatives of Tesla and the SEC declined to comment to the Times. Musk publicly floated the possibility of taking the company private in a tweet that sent shares seesawing and company leadership scrambling. His statement that he had the "funding secured" came under particular scrutiny, as it may have violated an SEC rule that essentially stipulates public statements made by company executives must be true.Musk explained earlier this week that the Saudi Arabia sovereign wealth fund had expressed interest in taking Tesla private. The Saudi fund declined to comment to CNBC. Fox Business Network's Charles Gasparino also reported the SEC subpoena on Wednesday, a few hours ahead of the Times and Journal reports, adding to Tesla's losses for the day.
Tesla shares down more than 4% on worries about potential SEC probe -- Tesla shares fell more than 4 percent Wednesday on continued concern the Securities and Exchange Commission will investigate the electric car maker.The agency has sent subpoenas to the company over CEO Elon Musk's recent comments about having secured funding to take Tesla private, Fox Business Network's Charles Gasparino said Wednesday on Twitter, citing a "company source." The New York Times later reported the SEC had served Tesla with a subpoena, citing an unnamed source.If Musk's statements were untrue, he could be accused of manipulating Tesla's stock. Tesla declined to comment.
Saudi Arabia’s PIF and SoftBank Not Interested in Tesla Buyout -- The whole scheme kicked off when Tesla CEO Elon Musk tweeted during trading hours that he was “considering” taking Tesla private, “Funding secured,” which caused the already ludicrously overvalued shares to spike. Later he added, “Investor support is confirmed.” But no details, no names, no tidbits, not even a tease. Two days earlier, he’d tweeted that “even Hitler was shorting Tesla stock.”We can brush off the Hitler tweet as just one more Musk idiocy gone awry, but “Funding secured” and “Investor support is confirmed” are big-ass phrases for a public-company CEO discussing a buyout that would be valued at $72 billion.Now some folks, including those at the SEC’s San Francisco office, are wanting to know where exactly this money is going to come from – and if funding was even remotely “secured.”The Tesla true believers instantly figured that a deal had already been worked out, either with SoftBank or with Saudi Arabia’s Public Investment Fund (PIF), or with both, or whatever.Turns out, it’s not going to be SoftBank, and it’s not going to be the Saudis, either. They’re not interested in creating the magic to pull this off. Reuters reported today that a source “familiar with PIF’s strategy,” said that the fund was not, as Reuters put it, “currently getting involved in any funding process for Tesla’s take-private deal.”PIF had made headlines recently when it came out that it had acquired a stake in Tesla of just below 5% by buying its shares (TSLA) in the market. None of this money went to Tesla. It went to Tesla shareholders that wanted to get out. Reuters went on: A second source close to the situation also said PIF was not taking part in any such plan at this stage. This source said that the Saudi fund would not make an investment of this kind without seeking guidance first from SoftBank.
The New Business Banker: A Private-Equity Firm - WSJ -- Private-equity firms have long been some of the biggest owners of companies. Now they are vying to become some of their biggest lenders. Fueled by an influx of cash from yield-hungry investors, firms historically devoted to buyouts are now financing deals banks won’t. Nonbanks—many private-equity firms—held more than half a trillion dollars worth of loans to midsize companies at the end of 2017, up from roughly $300 billion in 2012, according to estimates by private-equity firm Ares Management. The influx of money has led to intense competition for borrowers. On bigger loans, that has driven rates closer to banks’ and led to a loosening of credit terms. For smaller loans, “I don’t think it could become any more borrower friendly than it is today,” said Kent Brown, who advises companies on debt at investment bank Capstone Headwaters. The market is poised to grow as firms ranging from private-equity behemoths to smaller outfits angle for more action. In December, KKR & Co. struck a partnership to create the largest business-development company, an investment vehicle dedicated to making business loans.Blackstone Group and Carlyle Group plan to raise billions more dedicated to business lending. Apollo Global Management LLC and entities affiliated with it, already sizable players, have been buying and expanding lenders to get access to a broad array of deals. Ares, an early player in the business, raised a record $10 billion for middle-market lending in the second quarter alone. Overall, firms completed fundraising on 322 funds dedicated to this type of lending between 2013 and 2017, with 71 raised by firms that had never raised one before, according to data-provider Preqin. That compares with 85 funds, including 19 first-timers, in the previous five-year period.
Goldman Sachs investors win right to sue as group over CDOs - Goldman Sachs Group shareholders won a ruling allowing them to proceed as a group in a $13 billion lawsuit claiming the bank defrauded them by failing to disclose conflicts of interest related to investments linked to risky mortgages it sold before the financial crisis.U.S. District Judge Paul A. Crotty in Manhattan granted the shareholders’ request to certify the case as a class action, dealing a blow to the company’s efforts to avoid further liability for the investments at issue, including the infamous Abacus collateralized debt obligation.The suit centers around CDOs that Goldman Sachs created and sold in early 2007 as the U.S. housing market began to unravel. The investors, which include the Arkansas Teacher Retirement System, allege that statements made about the securities were false and misleading because the company acted in direct conflict with its clients’ interests. Abacus was the CDO at the center of a Securities and Exchange Commission case that led to a $550 million settlement in 2010 to resolve claims over the marketing of the investments — the largest penalty ever levied by the SEC against a Wall Street firm. The SEC had accused former Goldman Sachs vice president Fabrice Tourre of intentionally misleading investors about the role played by Paulson & Co., the hedge fund of billionaire John Paulson, which helped choose the portfolio of securities and made a billion-dollar bet it would fail. A federal jury in Manhattan in August 2014 found Tourre liable for his role in Abacus and ordered him to pay $825,000. The suing investors initially won the right to sue as a group in 2015 before an appeals court reversed the ruling, saying the trial judge needed to consider whether Goldman Sachs had shown that its share price wasn’t impacted by the misrepresentations. On Tuesday, Crotty addressed that issue in an 11-page decision, saying the bank was unable to make such a showing and the case could proceed as a class action.
Companies Shouldn’t Be Accountable Only to Shareholders - Elizabeth Warren, Wall Street Journal - Corporate profits are booming, but average wages haven’t budged over the past year. The U.S. economy has run this way for decades, partly because of a fundamental change in business practices dating back to the 1980s. Building on work by conservative economist Milton Friedman, a new theory emerged that corporate directors had only one obligation: to maximize shareholder returns. By 1997 the Business Roundtable declared that the “principal objective of a business enterprise is to generate economic returns to its owners.” That shift has had a tremendous effect on the economy. In the early 1980s, large American companies sent less than half their earnings to shareholders, spending the rest on their employees and other priorities. But between 2007 and 2016, large American companies dedicated 93% of their earnings to shareholders. Because the wealthiest 10% of U.S. households own 84% of American-held shares, the obsession with maximizing shareholder returns effectively means America’s biggest companies have dedicated themselves to making the rich even richer. That’s where my bill comes in. The Accountable Capitalism Act restores the idea that giant American corporations should look out for American interests. Corporations with more than $1 billion in annual revenue would be required to get a federal corporate charter. The new charter requires corporate directors to consider the interests of all major corporate stakeholders—not only shareholders—in company decisions. Shareholders could sue if they believed directors weren’t fulfilling those obligations.This approach follows the “benefit corporation” model, which gives businesses fiduciary responsibilities beyond their shareholders. Thirty-four states already authorize benefit corporations. And successful companies such as Patagonia and Kickstarter have embraced this role.My bill also would give workers a stronger voice in corporate decision-making at large companies. Employees would elect at least 40% of directors. At least 75% of directors and shareholders would need to approve before a corporation could make any political expenditures. To address self-serving financial incentives in corporate management, directors and officers would not be allowed to sell company shares within five years of receiving them—or within three years of a company stock buyback. For the past 30 years we have put the American stamp of approval on giant corporations, even as they have ignored the interests of all but a tiny slice of Americans. We should insist on a new deal.
Why Elizabeth Warren’s Accountable Capitalism Act Will Be Good for Shareholders - Yves Smith - Elizabeth Warren introduced her Accountable Capitalism Act in the Senate yesterday and set forth the logic of her bill in a Wall Street Journal op-ed. The Massachusetts senator described how as recently as the early 1980s, even conservative groups acknowledged publicly that corporations were responsible to employees and communities as well as to shareholders. And as we’ve written, and is implicit in the Warren article, there is no such thing as a legal obligation to “maximize shareholder value”. It’s simply an ideology that has become widely accepted, even as some of its most prominent advocates, such as Harvard’s Michael Jensen, have since renounced it. But this practice has become so deeply embedded and so damaging that it will apparently take a change in rules, or at least a credible and live threat to do so, to change behavior in boardrooms and the C-suite.We documented in the early 2000s that the cost of shareholder-fixated short-termimsm was that corporations as a whole were net saving, as in not investing, which was a disturbing departure from long-establihed norms. Corporate priorities have become even more warped in the post-crisis era as companies borrowed to buy back stock. Warren highlights how “shareholders come first” doesn’t look to have been very positive for anyone save corporate execs who have asymmetrical pay deals. They get paid handsomely even in the face of so-so to lousy performance, and are paid egregiously if results are good.1 From her article: […] To put it another way, the notion that the US stock market is for raising funds so companies can invest has become a hoary old myth. And even back in the stone ages of my youth when companies actually believe in investing, the most important sources of corporate funding were retained earnings and borrowing. New equity offerings were third. Nevertheless, Warren’s bill is sure to attract opposition from parties that will contend that interfering with the “shareholders come first” doctrine will hurt both investors and growth. They are wrong. Efforts to pursue shareholder value fail. Companies will do better not just for other constituencies but also for shareholders by pursuing a broader set of interests. We’ve been writing about this issue since 2007. Our first post on this topic quoted a 2004 Financial Times article by John Kay:
OCC’s fintech charter is a mistake | American Banker - The national fintech charter announced last week by the Office of the Comptroller of the Currency has been positioned by its supporters as a means of encouraging innovation and growth, but instead it brings new risks and market distortions to the U.S. economy.If facilitating fintech innovation and protecting consumers is the goal, preempting state licensing and consumer laws with a federal charter is not the answer. The OCC’s charter creates a new class of institutions that benefits large, established fintech firms and harms the very innovation and choice that U.S. Treasury Secretary Steven Mnuchin and the Comptroller of the Currency Joseph Otting say it would provide. As CSBS made clear in our lawsuit against the OCC last year, we believe a federal fintech charter will have harmful consequences for our nation’s financial system. The American history of building successful economies has not been driven by top-down industrial policy that picks winners and losers. Instead, it has been one that encourages innovation and competition from the bottom up. Based on our experience, a federal charter has been most successful at enabling a handful of large, dominant players, as seen in the national banking system. To believe that a federal fintech charter will encourage innovation, as has been argued, is misguided. That overlooks where financial innovation and competition originate in this country. These come from a system fostered by the states. State regulators have been the primary regulator of fintech companies. The state system is accessible to all types and sizes of fintech firms. It plays a significant role in the economy and serves as a source of diversity and innovation that leads to the world’s most competitive financial system. States have been and should be the laboratory of innovation for financial services. Here’s why. In addition to overseeing 79% of the nation’s banks, state regulators are the primary regulatory authority of the tens of thousands of nonbank entities that range from mortgage companies to fintech firms. It is a system that works well and is improving as states work together to harmonize the licensing and oversight system.
Investor Sues AT&T For $224 Million For Cryptocurrency Loss - In light of the crypto-crash and ongoing cases of crypto-thefts, it was only a matter of time before a headline-grabbing lawsuit emerged. And sure enough, Reuters reports that entrepreneur and cryptocurrency investor Michael Terpin filed a $224 million lawsuit on Wednesday against AT&T, accusing the telecom giant "of fraud and gross negligence in connection with the theft of digital currency tokens from his personal account." In the 69-page complaint filed with the District Court in Los Angeles, Terpin alleged that on January 7, 2018, the tokens were stolen from him through what he alleged was a "digital identity theft" of his cellphone account while AT&T was his service provider. At the time of the theft, the three million stolen tokens were worth $23.8 million, the complaint said. Terpin is also seeking $200 million in punitive damages. Terpin also claims that AT&T had been previously contacted by law enforcement authorities about such frauds, but did nothing to prevent it.The lawsuit alleges that the theft of the tokens occurred through what is called a SIM swap fraud. SIM swapping consists of tricking a provider into transferring a subscriber’s phone number to a SIM card controlled by someone else. Once that person gets the phone number, it can be used to reset the subscriber’s passwords and access online accounts. Terpin said that after the theft of the digital currency, his cellphone account was transferred to an international criminal gang (it remains to be seen if Russians are implicated). Terpin, a pioneer in the crypto space, co-founded the first angel group for bitcoin investors, BitAngels, in early 2013, and the first digital currency fund, the BitAngels/Dapps Fund, in March 2014. He is a senior advisor to Alphabit Fund, one of the world’s largest digital currency hedge funds. Which means he is not be having a good year, and probably explains why he waited until Bitcoin hit its 2018 lows before finally deciding to sue.
The perfect storm: building a crypto-utopia in Puerto Rico – video (10:32) In a time of vulnerability, crypto investors are moving to Puerto Rico, attracted by lucrative tax incentives. They plan to regenerate the island using blockchain technology. But not all of the locals support their bold plans.
How worried should banks be about the FBI’s ATM attack warning? -- People who work in information security departments are confronted with security alerts every day; at large banks they get hundreds of thousands a day. Choosing which to act on and which to leave alone is never easy.The FBI sent a confidential alert to banks late last week, warning that a rash of ATM theft is likely to hit soon."The FBI has obtained unspecified reporting indicating cybercriminals are planning to conduct a global automated teller machine cashout scheme in the coming days, likely associated with an unknown card issuer breach and commonly referred to as an 'unlimited operation,' " the notice said. In unlimited attacks, cybercrime gangs hack or phish their way into a bank or payment card processor, said the security blogger Brian Krebs, who on Sunday broke the story about the FBI's warning. “Just prior to executing on ATM cashouts, the intruders will remove many fraud controls at the financial institution, such as maximum ATM withdrawal amounts and any limits on the number of customer ATM transactions daily,” Krebs wrote. “The perpetrators also alter account balances and security measures ... allowing for large amounts of cash to be quickly removed from the ATM.” In an interview, Krebs pointed out that in some recent ATM attacks, criminals have stolen between $9 million and $13 million in a few hours. He speculated that in the case the FBI warned about, a large payment processor has been compromised and hackers will use that breach to infiltrate several small banks. The FBI may have gotten wind that a criminal group was asking for help on the ground to conduct the ATM withdrawals, Krebs said.
Hackers Steal $13 Million From Bank ATMs In 28 Countries Just days after an FBI warning of the prospect of a worldwide mass hacking plot that could have millions withdrawn from bank accounts, Hackers managed to steal $13 million from ATMs across 28 countries. The cybercriminals infected cash machines of India based Cosmos Bank with malware, which allowed them to approve transactions and access client accounts, reports Yahoo News. Fake credit cards were used to drain the cash from the machines. In a confidential alert issued last Friday, the FBI had warned American banks of an imminent “cashout” attack on cashpoints around the globe. The agency was concerned of a highly choreographed fraud scheme known as an ATM “jackpotting,” essentially describing exactly what had happened to the ATMs of Cosmos Bank. Roughly 12,000 transactions were made during the hack attack between 11 August and 13 August, according to Cosmos Bank chairman Milind Kale. “In two days, hackers withdrew a total 780 million rupees ($11.1m) from various ATMs in 28 countries, including Canada, Hong Kong and a few ATMs in India, and another 25 million rupees ($356,000) were taken out within India,” he said. The hacks continued into Monday with the attackers transferring 139.2 million rupees ($2m) to a Hong Kong-based bank by using the Bank’s compromised SWIFT international payments system. Cosmos Bank said in a statement to Reuters that, “During the malware attack, a proxy switch was created and all the fraudulent payment approvals were passed by the proxy switching system.” While it isn’t totally clear who was behind the hacks, some media outlets are questioning it was the North Korean linked Lazarus group who reportedly tried to transfer some $81 million from the central bank of Bangladesh. Since the attack, Cosmos has told account holders that their money is safe and a professional forensic agency has been hired to investigate the attack.
UPS pays out $700 million to stockholders: An object lesson in the operation of capitalism – On Thursday, the US-based logistics and delivery company UPS announced a quarterly dividend payout to shareholders of more than $700 million for the three months to August 2018. The announcement came the very same day as the Teamsters union met in Chicago, Illinois to endorse new contracts for UPS workers that enforce poverty-level wages and introduce major new concessions.UPS’s dividend payout is an object lesson in the basic functioning of capitalism. Where does this $700 million come from? It did not, after all, arise out of thin air. It is extracted from the labor of hundreds of thousands of workers, in the US and internationally. It is part of the surplus value produced by these workers—the difference between the wages they earn by selling their labor power, barely enough to survive, and the value they add in the process of production and distribution.The beneficiaries of this process of exploitation are not only the corporate executives that run UPS, but the major institutional investors and super-rich that own UPS stock. The largest UPS shareowners include the hedge funds Vanguard Group (which will receive $46 million), Blackrock ($36 million) and State Street Corporation ($24 million). These hedge funds then distribute their “earnings” to the financial parasites and billionaires that manage and invest in them.For his part, UPS’s CEO David Abney, who controls over 200,000 shares, will add another $180,000 to his 2017 compensation of more than $14 million.Assuming similar payments to investors for the rest of the year, UPS’s 2018 dividend payout of $2.8 billion would be enough to give each of the quarter-million workers at UPS an immediate raise of more than $11,000—almost doubling the annual salary of a part-time warehouse worker on $10 an hour and 25 hours a week. It would take such a worker 1,000 years to make what UPS CEO Abney was paid in 2017.
Louisiana Bans BofA, Citi From Bond Sale Over "Restrictive Gun Policies" The blowback against bank virtue signaling has begun. Louisiana's state’s bond commission voted 7 to 6 Thursday to ban Bank of America and Citigroup from working on its upcoming debt sale because of the banks’ "restrictive gun policies," the state treasury said in a statement, according to Bloomberg. As states begin using the bond market in retaliation against Wall Street and to stick up for the Second Amendment, Bank of America and Citigroup - the two top-ranked underwriters of long-term municipal debt - stand to lose millions in muni revenue. "I personally believe the policies of these banks are an infringement on the rights of Louisiana citizens,” Treasurer John Schroder said in a statement. “As a veteran and former member of law enforcement, I take the Second Amendment very seriously." As a reminder, Bank of America in April said it would stop making new loans to companies that make assault-style rifles for civilian use. At the time, the bank said at least 150 of its employees had been affected by gun violence over the years. One month earlier, Citigroup became the major banking institution to set restrictions on the firearm industry in March, when it announced plans to prohibit retailers that are customers of the bank from offering bump stocks or selling guns to people who haven’t passed a background check or are younger than 21. The restrictions applied to companies that rely on the bank for store credit cards, lending and other services.
Wells Fargo was hit with more scandal. But does anyone care? - Earlier this month, Wells Fargo disclosed that it had mistakenly foreclosed on hundreds of homes over a five-year period. And yet, where was the outrage? The announcement was just the latest in what’s amounted to a two-year streak of bad news for the bank, dating to its first admission regarding its phony-accounts scandal in September 2016. But unlike the storm of criticism directed at the bank nearly two years ago, which resulted in a change of CEOs at Wells, the media reaction to the most recent revelation was barely a blip. And the bank’s stock price has been unaffected; Wells’ share price has dropped just 1.7% since the foreclosure-related news. As the negative headlines pile up, a question arises: Has Wells fatigue set in? It’s been an extraordinarily rough two years for the bank. In addition to the fake-accounts scandal, which drew the loudest public response, Wells has experienced problems involving abuses in its mortgage and auto lending operations, the repossession of service members’ cars, a wealth management probe and refunds for add-on products including pet insurance, among other issues. And it’s finally settled a $2 billion case with the government over the origination and sale of faulty mortgage-backed securities in the run-up to the crisis.
CFPB path to unwinding payday rule riddled with legal land mines -- The Consumer Financial Protection Bureau would face daunting legal risk if it delayed its own payday lending rule. But that is a risk the bureau may be willing to take.The agency's options for unwinding the rule narrowed considerably this week after a judge for a second time denied a request to stay the rule's 2019 effective date.The CFPB would prefer such a stay to avoid legal challenges, allowing time to rewrite the 2017 regulation without forcing lenders to have to prepare for two competing rules. The industry, meanwhile, would likely prefer that the rule be rescinded, as recommended by the Treasury Department. Since taking the helm of the bureau, acting CFPB Director Mick Mulvaney has made clear his intent to reopen Cordray's rulemaking and revise the payday lending regulations more to the industry's liking. Bloomberg NewsThe latter option is legally risky with the binding nature of the 2017 rule under the Administrative Procedure Act. But with the CFPB unable to delay the compliance date through the courts, the bureau is expected to try to on its own — through a limited rulemaking — even if consumer advocates may challenge that move legally. "There's a significant likelihood that the bureau will be taking action to stay the effective date of the rule," said Quyen Truong, a former assistant CFPB director and deputy general counsel. Acting CFPB Director Mick Mulvaney suffered another blow this week when U.S. District Court Judge Lee Yeakel again refused to stay the compliance deadline. Yeakel declined a motion to reconsider his ruling from April, which turned down the request by the CFPB and two industry trade groups suing to invalidate the 2017 rule.
Loans not subject to usury cap can still be illegal: Calif. high court -- An interest rate on a consumer loan in California could be deemed illegally high even if it is not subject to usury laws, the state's Supreme Court ruled Monday.The unanimous decision against the nonbank lender CashCall could upend the consumer credit market in the state, which only has interest rate limits for loans up to $2,500. State law includes a provision that high interest rates on larger loans could be still be illegal if they are considered "unconscionable." The opinion written by Associate Justice Mariano-Florentino Cuellar suggested that the 98% rate on a CashCall loan of $2,600, made to the lead plaintiff in the class action case, may meet that standard. Such a rate may be considered so high as to "shock the conscience," he wrote.
Banks should do more to prevent renters from being displaced --- American Banker’s recent article on displacement financing shined light on an issue that many community organizations deal with on a daily basis — watching their low-income clients get pushed out of their homes. Much of this displacement resulted from financial transactions where banks knew, or should have known, that rent increases and displacement of existing tenants were imminent. Our organization recently published a report that found widespread complicity among banks in financing displacement in Oakland, Calif. During the past decade, large-scale foreclosures in Oakland led to the direct displacement of many homeowners. Bank subprime lending spurred an economic crash that directly increased the renter population, and single-family homes were converted into rental housing at an unprecedented rate. Tenants in such homes generally have fewer protections than those in multifamily buildings. Our research shows how “serial evictor” speculators in hot rental markets secure bank loans to buy properties rented by low-income tenants in order to raise rents and/or evict current residents to convert these affordable units to more expensive residences. Displacement financing by banks runs counter to their obligation to help meet low- and middle-income communities’ credit needs under the Community Reinvestment Act. In many cases, bank lenders know when a borrower landlord’s business model includes raising rents and evicting tenants. Displacement mortgages underwritten based on this business model are deeply problematic.Oakland has the fastest pace for gentrification and displacement in the Bay Area; homelessness increased 36% in Alameda County from 2016 to 2017, while many working-class people were forced to move out of town. Renters need to earn $48.71 per hour (nearly four times the minimum wage) to afford median rent of $2,553. Our report identifies First Republic Bank as the worst actor in financing Oakland’s displacement crisis. According to our research, the bank has made several hundred loans to problematic landlords, who then filed over 500 eviction petitions throughout Oakland. We also point to several dozen other banks, firms and institutions that have funded problematic property owners or serial evictors, as identified by nonprofit groups.
House panel plans FHFA oversight hearing, invites Watt to testify — The House Financial Services Committee is scheduling a hearing next month to look into allegations of waste, fraud and abuse at the Federal Housing Finance Agency and the mortgage giants Fannie Mae and Freddie Mac. The hearing is planned for “no later than” Sept. 27 and Fannie Mae Chief Executive Timothy Mayopoulus and FHFA Director Mel Watt “will be invited to testify,” according to a press release from Committee Chairman Jeb Hensarling, R-Texas, and Oversight and Investigations Subcommittee Chairman Ann Wagner, R-Mo. The scheduling of the hearing comes in the wake of an investigation into Watt over sexual harassment allegations, as well as a court ruling that the agency’s structure is unconstitutional.
FHA revises loss mitigation options for hurricane victims — The Federal Housing Administration is revising its foreclosure prevention options to assist struggling borrowers in Puerto Rico and the U.S. Virgin Islands affected by last year’s hurricanes. The new policy lets servicers evaluate borrowers for the Disaster Standalone Partial Claim before the disaster loan modification using their pre-disaster monthly principal and interest payment. It also allows borrowers to keep their current interest rate and term of the FHA-insured mortgage, and expands the eligibility criteria for the Disaster Standalone Partial Claim, which the administration first announced in February. Previously, the claim was supposed to be used only if all other options had been attempted, but under the new policy, the claim will be the first mortgage relief option available for those affected. “We have a lot of options available to help FHA-insured families keep their homes but every day we wait, those options become more limited,” FHA Commissioner Brian Montgomery said in a press release. “Meanwhile, we intend to monitor our servicers very closely to make sure eligible families get the mortgage relief they qualify for.”
HUD seeks to revamp fair housing rule to ease local governments — The Department of Housing and Urban Development on Monday took its first step toward overhauling a rule meant to guide local jurisdictions in how they comply with the Fair Housing Act.To the dismay of housing advocates, the Trump administration in January suspended the Affirmatively Furthering Fair Housing rule, arguing that it was too prescriptive. The rule, drafted by the Obama administration, is meant to help locales meet obligations under the Fair Housing Act to provide affordable housing options and avoid housing discrimination.In an advance notice of proposed rulemaking released Monday, the department sought comment on changes it says will reduce regulatory burden, provide greater control and increase the housing supply. "HUD found that in contrast to its stated goals, the AFFH rule proved ineffective, highly prescriptive, and effectively discouraged the production of affordable housing," the department said in a press release.
Mortgage foreclosure rates hit 12-year low, but wildfires not yet felt - The mortgage delinquency rate dropped on an annual basis, a sign of a strengthening economy, but could soon see a spike due to this year's wildfires, according to CoreLogic's Loan Performance Insights Report.In May, the foreclosure inventory rate reached 0.5%, its lowest depth for any month since September 2006. Foreclosure rates dipped 0.2 percentage points from last year. The share of mortgages that transitioned from current to 30 days past due was 0.8% in May 2018, the same from a year before. Early-stage delinquencies (30-59 days past due) are a harbinger for the state of the mortgage market. The rate of early-stage delinquencies also dropped, going to 1.8% from 1.9% in May 2017. The overall mortgage delinquency rate — mortgages in any stage of delinquency — in the U.S. sat at 4.2%, marking a year-over-year decline of 0.3 percentage points. "While the strong economy has nudged serious delinquency rates to their lowest level in 12 years, areas hit by natural disasters have had increases," Frank Nothaft, chief economist for CoreLogic, said in a press release. The impact of the wildfires that roiled through parts of California, Montana and Arizona, probably hasn't been felt yet. "The tragic wildfires in the West will likely lead to a spike in delinquencies in hard-hit neighborhoods," Nothaft continued. "The wildfire in Santa Rosa last year destroyed or severely damaged more than 5,000 homes. Delinquency rates rose in the aftermath, and in the ensuing months we observed home-price growth accelerate and sales decline. We will likely see the same scenario unfold in fire-ravaged communities this year," he added.
MBA: Mortgage Delinquency Rate decreased in Q2 - From the MBA: Mortgage Delinquencies Down in 2nd Quarter of 2018 The delinquency rate for mortgage loans on one-to-four-unit residential properties fell to a seasonally adjusted rate of 4.36 percent of all loans outstanding at the end of the second quarter of 2018. The delinquency rate was down 27 basis points from the previous quarter, but was up 12 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The percentage of loans on which foreclosure actions were started dropped four basis points from the last quarter to 0.24 percent, its lowest level since the second quarter of 1987. “Mortgage delinquencies dropped across all stages of delinquency in the second quarter of 2018 compared to the first quarter of 2018. The 30-day delinquency rate dropped two basis points from the previous quarter, while the 60-day and 90-day delinquency buckets dropped by eight and 18 basis points respectively....The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the second quarter was 1.05 percent, down 11 basis points from the first quarter of 2018 and 24 basis points lower than one year ago. This was the lowest foreclosure inventory rate since the third quarter of 2006....The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 2.30 percent in the second quarter of 2018, a decrease of 31 basis points from last quarter, and a decrease of 19 basis points from last year. This graph shows the percent of loans delinquent by days past due. The percent of loans delinquent decreased in Q2, as "the impact of the hurricanes from one year ago lessens".
Few Florida homebuyers asking about rising tides - As Scott Yurchison shows potential buyers waterfront properties on the Atlantic Ocean or Indian River in New Smyrna Beach, the real estate agent fields questions about amenities, schools and nearby services. He rarely gets a question about rising sea levels. He and agents in some of the state's most scenic communities — Coral Gables, Navarre Beach, Cedar Key and Longboat Key — said most clients aren't asking how high the nearby waters might rise before their 30-year mortgage is paid off. "People are asking. Is everybody asking? No," said Yurchison. "In our society today, people don't look long-term." He expects that to change one day, as tides continue to rise and property values begin to drop. But so far, only about a quarter of his clients even ask if a home is in a flood zone. Of those, he estimates only about 10 percent ask about rising sea levels, despite the dozens of homes that flooded in the community during Hurricane Irma, in an area where longtime residents had never seen it flood before. Waterfront property listings can't keep up with the demand in Miami Beach, even though the city is spending hundreds of millions to stem the incoming tide by raising streets, installing pumps and building better sea walls. Miami Realtors Association data shows prices continue to soar as homebuyers seek out waterfront views. Similarly, county property appraisers across the state from the Panhandle to Daytona Beach said they haven't seen any downward trend in waterfront prices or values. The greater concern on barrier islands is traffic congestion and the conversion of former homesteaded properties into vacation rentals, said Charles Hackney, property appraiser in Manatee County on Florida's Gulf Coast.His counterpart in Volusia County, Larry Bartlett, said if anybody takes note of the flooding during recent hurricanes, "they're discounting it because they think it can't happen again." "Realistically, I don't think people are going to be taking this seriously until water is up around their ankles," Bartlett said.
New-home mortgage applications rise on best sales pace since April --July's new-home sales were at their highest pace since April, leading to a 3.5% year-over-year increase in mortgage applications to purchase recently constructed homes, the Mortgage Bankers Association said. There was a 0.2% increase compared with June, the MBA's Builder Application Survey found. Home sales reached a seasonally adjusted annual pace of 637,000 units in July, up 8.5% from June's 587,000. In April, the pace was 656,000 units, while in July 2017, the pace was 562,000. "This was likely supported by the May surge in housing starts and is a reflection of the strength of demand due to the healthy economy," Joel Kan, the MBA's vice president of economic and industry forecasting, said in a press release. "Because inventory of existing homes remains quite tight, this increase in new home supply will be welcomed by the market." The average loan size for these applications increased to $337,775 in July from $333,033 in June — the lowest since August 2017 — and $329,483 in July 2017. By product type, 72.1 % of new-home buyers applied for a conventional loan mortgage. Applications for Federal Housing Administration-insured loans totaled 15.3% of July's activity, with Veterans Affairs-guaranteed financing making up 11.4%. Rural Housing Service/U.S. Department of Agriculture loans composed 1.1%. The new-home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors, the MBA said. Government data for July is expected on Aug. 23. In June, there was the slowest pace of new-home purchases in eight months, at a 631,000 annualized rate. Homebuilder confidence about the market was at its lowest level for the year in July, according to the National Association of Home Builders/Wells Fargo Housing Market Index. However, the component that measures prospective buyer traffic was at its highest level since February.
MBA: Mortgage Applications Decreased in Latest Weekly Survey -- From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey Mortgage applications decreased 2.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 10, 2018. ... The Refinance Index remained unchanged from the previous week. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 3 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 4.81 percent from 4.84 percent, with points decreasing to 0.43 from 0.45 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.The first graph shows the refinance index since 1990.This was unchanged from last week at the lowest level since December 2000. Refinance activity will not pick up significantly unless mortgage rates fall 50 bps or more from the recent level.
Mortgage application volume drops for fifth consecutive week - Mortgage applications waned for the fifth week in row, hitting their lowest levels in six months, as the summer’s growing interest rates plateaued. The overall market composite index dropped 2% after falling 3% a week ago, according to the Mortgage Bankers Association. On an unadjusted basis, the index decreased 3% from last week. The purchase index declined 3% on a seasonally adjusted basis and 4% unadjusted for the week ending Aug. 10. It was also 3% lower year-over-year. The refinance index held steady from last week. "Strong inflation was overshadowed by ongoing trade tensions between the U.S. and China, along with concerns over Turkey's currency situation," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "This helped push Treasury rates down by 3 basis points last week. The 30-year fixed rate decreased 3 basis points as well, but mortgage applications still decreased." Adjustable-rate loan activity went down to 6.2% from 6.3% of total applications. The share of applications for Federal Housing Administration-guaranteed loans remained at 10.4% for the third straight week. Veterans Affairs-guaranteed loans stayed the same at 10.6%, while the U.S. Department of Agriculture/Rural Development maintained its 0.8% share. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) dropped 3 basis points to 4.81%. The average for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) also declined, to 4.73% from 4.74%. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA fell 6 basis points to 4.77%. The average for 15-year fixed-rate mortgages actually increased, albeit slightly, going to 4.27% from 4.26%. The average contract interest rate for 5/1 ARMs dipped to 4.06% from 4.07%.
California: "Housing market retreats", Inventory up 11.9% YoY - The CAR reported today: California’s housing market retreats for third straight month as affordability crunch dampens demand California’s housing market backpedaled in July on an annual basis for the third consecutive month as higher interest rates and rising home prices eroded housing affordability and dampened demand, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 406,920 units in July, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2018 if sales maintained the July pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.July’s sales figure was down 0.9 percent from the revised 410,800 level in June and down 3.4 percent compared with home sales in July 2017 of 421,460. “In the midst of the peak home-buying season, high home prices and rising interest rates combined to crimp housing affordability, which in turn is subduing home sales,” said C.A.R. President Steve White. “Some of the reluctance by buyers appears to be driven by fears that the market may be peaking. Additionally, the lack of a federal tax incentive for homeownership could be at play given that much of the weakness is in the lower-priced, first-time buyer segment of the market.” ...Statewide active listings improved for the fourth consecutive month after 33 straight months of declines, increasing 11.9 percent from the previous year. July’s listings increase was the biggest in more than three years, and the number of active listings was the greatest supply of homes on the market in nearly two years.Here is some data from the NAR and CAR (ht Tom Lawler)
Housing Starts at 1.168 Million Annual Rate in July - From the Census Bureau: Permits, Starts and Completions Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,168,000. This is 0.9 percent above the revised June estimate of 1,158,000, but is 1.4 percent below the July 2017 rate of 1,185,000. Single-family housing starts in July were at a rate of 862,000; this is 0.9 percent above the revised June figure of 854,000. The July rate for units in buildings with five units or more was 303,000. Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,311,000. This is 1.5 percent above the revised June rate of 1,292,000 and is 4.2 percent above the July 2017 rate of 1,258,000. Single-family authorizations in July were at a rate of 869,000; this is 1.9 percent above the revised June figure of 853,000. Authorizations of units in buildings with five units or more were at a rate of 410,000 in July. The first graph shows single and multi-family housing starts for the last several years. Multi-family starts (red, 2+ units) increased slightly in July compared to June. Multi-family starts were down 12% year-over-year in July.Multi-family is volatile month-to-month, and has been mostly moving sideways the last few years. This is the bottom of the range.Single-family starts (blue) increased in July, and were up 2.7% year-over-year. The second graph shows total and single unit starts since 1968. The second graph shows the huge collapse following the housing bubble, and then - after moving sideways for a couple of years - housing is now recovering (but still historically fairly low).Total housing starts in July were well below expectations, and starts for May and June were both revised down.
Housing starts turn negative, while permits remain positive --This morning's report on housing permits and starts was a mixed bag. Permits, while below their single family peak in February and their overall peak in March, were higher than last month. Their shorter term trend is neutral while the 12 month trend remains positive.Starts, on the other hand, were lower YoY for the second month in a row. Single family starts had their lowest month since last December. The data isn't up on FRED yet, so here is the Census Bureau's graph:Because of their volatility, the best way to view starts is as a 3 month average. But even so viewing, starts made a 7 month low. The last two months are equivalent to the low readings of last summer, and no better than average compared with 2016.Still, because permits tend to slightly lead starts, and single family permits are the least volatile measure of all, the trend in housing must continue to be counted as a weak positive. This, by the way, contrasts with the weekly data on purchase mortgage applications, which is now down YoY even as measured over a 4 week average; and is among the lowest readings of the last 18 months.
New Residential Building Permits: 1.311M in July The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for July new residential building permits. The latest reading of 1.311M was an increase from 1.292M in June and essentially at the Investing.com forecast of 1.310M. Here is the opening of this morning's monthly report: Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,311,000. This is 1.5 percent (±1.3 percent) above the revised June rate of 1,292,000 and is 4.2 percent (±1.7 percent) above the July 2017 rate of 1,258,000. Single-family authorizations in July were at a rate of 869,000; this is 1.9 percent (±1.4 percent) above the revised June figure of 853,000. Authorizations of units in buildings with five units or more were at a rate of 410,000 in July. [link to report] Here is the complete historical series, which dates from 1960. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.
Comments on July Housing Starts --Earlier: Housing Starts at 1.168 Million Annual Rate in July Housing starts in July were disappointing once again, and starts for May and June were revised down. However this was just the second month of disappointing starts, and most of the decline was in multi-family starts that are volatile month-to-month. The housing starts report released this morning showed starts were up 0.9% in July compared to June (only up because June was revised down), and starts were down 1.4% year-over-year compared to July 2017.Multi-family starts were down 9.6% year-over-year, and single family starts were up 2.7% year-over-year. This first graph shows the month to month comparison for total starts between 2017 (blue) and 2018 (red). Starts were down 1.4% in July compared to July 2017. Through seven months, starts are up 6.2% year-to-date compared to the same period in 2017. Even with the weakness over the last two months, that is still a decent increase. Single family starts were up 2.7% year-over-year, and up 0.9% compared to July 2018. Multi-family starts were down 9.6% year-over-year, and up 3.1% compared to June 2018 (multi-family is volatile month-to-month). Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment). The rolling 12 month total for starts (blue line) increased steadily for several years following the great recession - but has turned down recently. Completions (red line) had lagged behind - however completions have passed starts (more deliveries). As I've been noting for a few years, the significantly growth in multi-family starts is behind us - multi-family starts peaked in June 2015 (at 510 thousand SAAR). The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. Note: Last month, in response to numerous articles discussing the "slowing housing market" and some suggesting "housing has peaked", I wrote: Has Housing Market Activity Peaked? and Has the Housing Market Peaked? (Part 2). My view currently remains the same, but if the weakness in housing starts and new home sales persist, I'll revisit my outlook. My guess is the weakness will not continue, and new home sales and single family starts will increase further.
NAHB: Builder Confidence declines to 67 in August - The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 67 in August, down from 68 in July. Any number above 50 indicates that more builders view sales conditions as good than poor. From NAHB: Builder Confidence Remains Firm in August Builder confidence in the market for newly-built single-family homes edged down one point to a solid 67 reading in August on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).“The good news is that builders continue to report strong demand for new housing, fueled by steady job and income growth along with rising household formations,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “However, they are increasingly focused on growing affordability concerns, stemming from rising construction costs, shortages of skilled labor and a dearth of buildable lots.”The HMI index measuring current sales conditions inched one point lower to 73 while the component gauging expectations in the next six months all fell a single point to 72. Meanwhile, the metric charting buyer traffic dropped two points to 49. Looking at the three-month moving averages for regional HMI scores, the South and West each held steady at 70 and 75, respectively. The Northeast fell three points to 54 and the Midwest also posted a three-point decline to stand at 62.
NY Fed Q2 Report: "Total Household Debt Rises for 16th Straight Quarter" From the NY Fed: Total Household Debt Rises for 16th Straight Quarter The Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit, which shows that total household debt increased by $82 billion (0.6%) to $13.29 trillion in the second quarter of 2018. It was the 16th consecutive quarter with an increase, and the total is now $618 billion higher than the previous peak of $12.68 trillion, from the third quarter of 2008. Further, overall household debt is now 19.2% above the post-financial-crisis trough reached during the second quarter of 2013. The Report is based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample of individual- and household-level debt and credit records drawn from anonymized Equifax credit data.Mortgage balances—the largest component of household debt—rose by $60 billion during the second quarter, to $9.00 trillion. Balances on home equity lines of credit (HELOC) continued their downward trend, declining by $4 billion, to $432 billion. The median credit score of newly originating mortgage borrowers was roughly unchanged, at 760. "Aggregate household debt grew for the 16th consecutive quarter in the second quarter of 2018," said Wilbert van der Klaauw, senior vice president at the New York Fed, "While overall delinquency rates have remained stable at relatively low levels, transition rates into delinquency have fallen noticeably for student debt over the past year, reflecting an improved labor market and increased participation in various income-driven repayment plans." Here are two graphs from the report: The first graph shows aggregate consumer debt increased in Q2. Household debt previously peaked in 2008, and bottomed in Q2 2013. The second graph shows the percent of debt in delinquency. There is still a larger than normal percent of debt 90+ days delinquent (Yellow, orange and red).
Household Debt And Credit Report: Up by $82B in Q2 -- The latest household debt for Q2 2018 was up 0.6% from Q1 and currently at $13.29T and at its peak. Here is an excerpt from the latest press release: The Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit, which shows that total household debt increased by $82 billion (0.6%) to $13.29 trillion in the second quarter of 2018. It was the 16th consecutive quarter with an increase, and the total is now $618 billion higher than the previous peak of $12.68 trillion, from the third quarter of 2008. Further, overall household debt is now 19.2% above the post-financial-crisis trough reached during the second quarter of 2013. The Report is based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample of individual- and household-level debt and credit records drawn from anonymized Equifax credit data. Read moreAs a result of the housing and mortgage crisis of the Great Recession, economists have been paying more attention to the liabilities portion of household balance sheets. Among the New York Federal Reserve Board's many economic reports is the Household Debt and Credit report, which is released quarterly with data going back to 2003. Data is collected through the NY Fed's Consumer Credit Panel which is constructed from a nationally representative random sample of Equifax credit report data resulting in a sample size of over 40 million individuals quarterly. Here is some background on the report from the NY Fed:The large increases in consumer debt and defaults—of mortgage debt in particular—during the Great Recession highlighted the importance of understanding the liabilities reflected on household balance sheets. To that end, one of the CMD’s large data collection projects is the New York Fed Consumer Credit Panel, which is constructed from a nationally representative random sample of Equifax credit report data. Analysis of this data set is regularly reported in the CMD’s Quarterly Report on Household Debt and Credit. The data set can be used to calculate national and regional aggregate measures of individual- and household-level credit balances, and delinquencies by product type. The Consumer Credit Panel also provides new insights into the extent and nature of heterogeneity of debt and delinquencies across individuals and households. The chart below shows total debt balance nation-wide by composition in trillions of dollars. The current total is $13.29T, well exceeding the 2008 peak.
US Household Debt Hits Record $13.3 Trillion - Total household debt hit a new record high, rising by $82 billion to $13.29 trillion in Q2 of 2018, 3.5% higher than a year earlier according to the NY Fed's latest household debt report. It was the 16th consecutive quarter with an increase in household debt, and the total is now $618 billion higher than the previous peak of $12.68 trillion, from the third quarter of 2008. Overall household debt is now 19.2% above the post-financial-crisis trough reached during the second quarter of 2013. Mortgage balances—the largest component of household debt—rose by $60 billion during the second quarter, to $9.00 trillion. Credit card debt rose by $14 billion to $829 billion; auto loan debt increased by $9 billion in the quarter to $1.24 trillion and student loan debt hit a record high of $1.41 trillion, an increase of $2 billion in Q2. Balances on home equity lines of credit (HELOC) continued their downward trend, declining by $4 billion, to $432 billion. The median credit score of newly originating mortgage borrowers was roughly unchanged, at 760. Mortgage originations edged up to $437 billion in the second quarter, from $428 billion in the first quarter. Meanwhile, mortgage delinquencies continued to improve, with 1.1% of mortgage balances 90 or more days delinquent in the second quarter, versus 1.2% in the first quarter.Most newly originated mortgages continued went to borrowers with the highest credit scores, with 58% of new mortgages borrowed by consumers with a 760 credit score or higher. Outstanding student loan debt was mostly unchanged in the second quarter and stood at a record $1.41 trillion as of June 30. Auto loan balances also hit an all time high, as they continued their six-year upward trend, increasing by $9 billion in the quarter, to $1.24 trillion. Meanwhile, credit card balances rose by $14 billion, or 1.7%, after a seasonal decline in the first quarter, to $829 billion.Despite rising interest rates, credit card delinquency rates eased slightly, with 7.9% of balances 90 or more days delinquent as of June 30, versus 8.0% at March 31. The share of consumers with an account in collections fell 23.4% between the third quarter of 2017 and the second quarter of 2018, from 12.3% to 9.4%, due to changes in reporting requirements of collections agencies. Meanwhile student loan delinquencies remain stubbornly just above 10%, a level they hit 6 years ago and have failed to move in either direction. In some good news for the student loan debt seriously delinquent student loans, those 90 days or more behind, declined in the second quarter to 8.6% from 8.9% in the prior quarter.
More Americans are defaulting on their credit cards: analyst - Despite a booming economy, many Americans are having trouble paying credit card bills, industry observers warn. An increasing number of auto borrowers are also asking for more time to pay. These trends disturb card industry experts. “It is a problem we should watch,” says Bill Hardekopf, founder of LowCards.com. “I would say that credit card defaults is definitely a cause for concern,” says Joe Resendiz, an analyst with ValuePenguin, which tracks the credit industry. Resendiz noted the recent second-quarter net credit card default numbers rose for Bank of America and JPMorgan. In an otherwise rosy report, the amount of in-default charge card bills rose by 10 percent and 9 percent, respectively, compared with the same period in 2017. But JPMorgan charge-off rates remain “low” on a historical basis, said spokeswoman Betty Riess. The latest numbers also come at the same time that those with the poorest credit card records — subprime borrowers — saw their credit card debt increase by 26 percent, ValuePenguin said. Another observer, LendingTree.com, noted a $16.25 billion increase in revolving debt in May. “This was the biggest May jump since 1995,” it said. Revolving debt is the card debt that is carried from month to month, usually at high interest rates because a card, unlike a house, is an unsecured debt. Revolving and non-revolving debt is currently at $3.86 trillion, LendingTree said. It predicts it will pass $4 trillion this year. Some borrowers, credit industry analysts say, are forgetting the disasters of 2008. That’s when a sudden recession left many Americans without jobs and big banks with huge unpaid debts. Resendiz said most big banks are seeing default rates rise. The credit card default rate rose in the latest Federal Reserve numbers to 3.65 percent. This was the seventh straight quarterly increase, yet still far from the 2008 numbers, when default rates were above 10 percent.
Stats on consumer debt collection aren't as rosy as they look … American consumers, especially those with low credit scores, appear to have benefited in recent quarters from broad changes in how third-party collection agencies report collection accounts to credit bureaus, according to new figures from the Federal Reserve Bank of New York. But the benefit could be short-lived.The upshot for bankers? Don't let your guard down just yet on credit quality or concerns about consumers overextending themselves. Here's why.From 2008 to 2012, debts on consumer credit reports that creditors had turned over to third-party collectors rose as Americans struggled with financial hardships during the recession. But between 2013 and 2017, the number of consumers with a collections account on their credit report fell gradually from 14% to 12%. Then it dropped sharply in recent quarters to 9.42% at June 30, the New York Fed said in a blog post that accompanied its report issued Tuesday on second-quarter household debt and credit.
Retail Sales increased 0.5% in July -- On a monthly basis, retail sales increased 0.5 percent from June to July (seasonally adjusted), and sales were up 6.4 percent from July 2017.From the Census Bureau report: Advance estimates of U.S. retail and food services sales for July 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $507.5 billion,an increase of 0.5 percent from the previous month, and 6.4 percent above July 2017. Total sales for the May 2018 through July 2018 period were up 6.3 percent from the same period a year ago. The May 2018 to June 2018 percent change was revised from up 0.5 percent to up 0.2 percent. This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). Retail sales ex-gasoline were up 0.5% in July. The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993. Retail and Food service sales, ex-gasoline, increased by 5.1% on a YoY basis. The increase in July was above expectations, however sales in May and June were revised down.
July Retail Sales: Up 0.5% MoM, Better Than Forecast --The Census Bureau's Advance Retail Sales Report for July was released this morning. Headline sales came in at 0.5% month-over-month to one decimal and was better the Investing.com forecast of 0.2%. Core sales (ex Autos) came in at 0.59% MoM (to two decimals). Revisions were made to May and June figures. Here is the introduction from today's report:Advance estimates of U.S. retail and food services sales for July 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $507.5 billion, an increase of 0.5 percent (±0.4 percent) from the previous month, and 6.4 percent (±0.5 percent) above July 2017. Total sales for the May 2018 through July 2018 period were up 6.3 percent (±0.5 percent) from the same period a year ago. The May 2018 to June 2018 percent change was revised from up 0.5 percent (±0.4 percent) to up 0.2 percent (±0.2 percent)*.Retail trade sales were up 0.4 percent (±0.5 percent)* from June 2018, and 6.0 percent (±0.5 percent) above last year. Gasoline Stations were up 22.2 percent (±1.6 percent) from July 2017, while Nonstore Retailers were up 8.7 percent (±1.4 percent) from last year. [view full report] The chart below is a log-scale snapshot of retail sales since the early 1990s. The two exponential regressions through the data help us to evaluate the long-term trend of this key economic indicator.
Michigan Consumer Sentiment: August Preliminary Slips - The University of Michigan Preliminary Consumer Sentiment for August came in at 95.3, down 2.6 from the July Final reading. Investing.com had forecast 98.1. Surveys of Consumers chief economist, Richard Curtin, makes the following comments: Consumer sentiment slipped to its lowest level since last September, with the decline concentrated among households in the bottom third of the income distribution. The dominating weakness reflected much less favorable assessments of buying conditions, mainly due to less favorable perceptions of market prices. Buying conditions for large household durables sank to the lowest level in nearly four years. When asked to explain their views, consumers voiced the least favorable views on pricing for household durables in nearly ten years, since October 2008. Vehicle buying conditions were viewed less favorably in August than anytime in the last four years, with vehicle prices being judged less favorably than anytime since the close of 1984. Home buying conditions were viewed less favorably in early August than anytime in the past ten years, with home prices judged less favorably than anytime since 2006 (see the chart). These are extraordinary shifts in price perceptions given that consumers anticipate an inflation rate in the year ahead of 2.9% in early August, unchanged from last month. The data suggest that consumers have become much more sensitive to even relatively low inflation rates than in past decades. As is usual at this stage in the business cycle, some price resistance has been neutralized by rising wages, although the falloff in favorable price perceptions has been much larger than ever before recorded. Overall, the data indicate that consumers have little tolerance for overshooting inflation targets, and to the benefit of the Fed, interest rates now play a more decisive role in purchase decisions. [More...] See the chart below for a long-term perspective on this widely watched indicator. Recessions and real GDP are included to help us evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.
Long Beach Port Traffic "Dips" in July --From the Port of Long Beach: July Container Volumes Dip in Long BeachThe Port of Long Beach saw a decline in container volumes in July compared to the same month a year ago, which hit a historic high that has since been surpassed.The drop, 4.4 percent, was attributed to shipping alliances’ decisions in July to shift vessel deployment and port calls. Port officials also raised concerns that escalating tariffs could slow trade activity — thus far the busiest in the Port’s 107-year history — during the remainder of the year..For the calendar year, the Port of Long Beach is on pace for its busiest year ever, topping 2017. Through July, volumes are 11.3 percent or almost half a million TEUs over the same period in 2017, totaling 4.6 million TEUs. June 2018 volume at the Port was the highest in its history, at 752,188 TEUs. This is the lowest level for exports in almost a year (imports are seasonal, so this is the lowest level for imports since April). The decline in exports could be related to shippers trying to beat the tariffs in June. I'll post a graph once the Port of Los Angeles reports July traffic.
LA area Port Traffic Mostly Unchanged YoY in July -- Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic. The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container). To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.On a rolling 12 month basis, inbound traffic was down 0.1% compared to the rolling 12 months ending in June. Outbound traffic was up 0.2% compared to the rolling 12 months ending in June.The 2nd graph is the monthly data (with a strong seasonal pattern for imports). Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March depending on the timing of the Chinese New Year. In general imports have been increasing, and exports have mostly moved sideways over the last 6 or 7 years. It is still too early to tell about the impact of the tariffs.
US Farm Export Prices Plunge As Import Prices Soar Most In Over 6 Years -- Amid the pre- and post-tariff channel-stuffing noise, July import prices surged more than expected, rising 4.8% YoY - the most since Feb 2012 - and at the same time export price growth slowed notably (from +5.3% YoY to +4.3% YoY). Notably, however, import prices ex-Petroleum dropped 0.1% MoM (missing expectations of a 0.1% rise) - falling for the second month in a row... (Export prices fell 0.5% after rising 0.2% in June) China exported a very modest amount of deflation in July as its import prices index dipped... The big driver of export price growth decline was prices for U.S. farm exports dropped in July by the most in more than six years as a trade war with China heated up, Labor Department figures showed Tuesday. Agricultural export prices fell 5.3 percent from the prior month, the biggest drop since October 2011, as soybean prices plummeted 14.1 percent.
Trucking’s Tight Capacity Squeezes U.S. Businesses – WSJ… Empty trucks are so hard to come by right now that Dean Foods , one of North America’s largest milk suppliers, cut its full-year earnings outlook in part because it simply can’t move its goods for anything close to what it expected to pay this year. “Industry capacity for truck drivers remains extremely tight. This is driving third-party hauling rates to record levels, up 26% versus prior year,” Chief Executive Ralph Scozzafava said in a Tuesday call with investors. The warning from the Dallas-based dairy processor puts Dean in a growing line of U.S. businesses struggling with the tightest freight market in recent memory. Distribution channels that carry goods to retailers, factories and consumers are struggling to keep up with the fast-growing U.S. economy as more companies caution that the strains in the transport sector are holding back their ability to grow. With shipping costs rising and freight volumes outpacing the supply of available trucks, many companies are resetting their supply chains for what some believe is a new, more expensive era in freight transport. July is typically a slow month for shipping. But last month rates on the spot market, where shippers buy last-minute truck transportation, rose 29% for the most common type of big rig compared with July 2017, extending an unprecedented stretch of year-over-year gains to 17 straight months. It is the longest sustained period of pricing growth for truckers since the industry was deregulated in 1980, according to online freight marketplace DAT Solutions LLC. As rising transportation costs and scarce trucking capacity threaten to crimp growth, businesses including heavy-equipment maker Caterpillar Inc. and Hershey Corp. are reshaping their supply chains to adjust to a changed market. Some, including Kraft Heinz Co. , Sealed Air Corp. and Coca-Cola Co. , are raising prices to offset higher freight expenses and rising costs for raw materials. “Nobody has a crystal ball, but if I had to place a bet I would say this is structural, not cyclical” change, said Lee Clair, managing partner at Transportation and Logistics Advisors LLC, a supply-chain-strategy consulting firm. The trucking squeeze has hit the food industry particularly hard, adding complications and costs to businesses already adjusting to changing competition and shifting consumer tastes. Food distributor US Foods Holding Corp. , cereal-maker Kellogg Co. , and Fresh Del Monte Produce Inc. all said higher transportation and logistics costs weighed on earnings in the most recent quarter. Tyson Foods Inc. expects “freight to be about $270 million more this year compared to last year,” the company said in an earnings call on Monday.
Get in Line: Backlog for Big Rigs Stretches to 2019 - Anyone ordering a new heavy-duty truck this summer will have wait until sometime next year to get it, assuming strained manufacturing supply chains hold together. An unprecedented run of orders for big rigs has pushed the backlog at truck factories to nine months, according to industry analysts, the largest since early 2006, when truckers stocked up to get vehicles in place before tougher environmental restrictions would take effect. Typically the backlog is about five months for the truck industry’s manufacturers, analysts said. “It is longer than it should be,” said Magnus Koeck, vice president of marketing for Volvo AB’s North America operation, where Class 8 truck orders this year soared to 25,000 from 11,000 during the first six months of 2017. “Of course we are not alone in this situation,” he said. “Everyone is in the same boat.” North American freight-haulers ordered more than 300,000 Class 8 trucks in the first seven months of this year and are on track to order a record 450,000 of the heavy-duty vehicles for the full year, according to ACT Research. That would be the largest book since 2004, when orders reached 390,000, according to analysts. .In July, North American fleets ordered more than 52,000 trucks, an all-time monthly record. Freight-hauling fleets are trying to keep up with swelling demand in a robust U.S. economy even as they say they face difficulty finding drivers. New trucks are one recruiting tool, and the new vehicles also get better fuel mileage—an attractive feature for fleets as other costs are rising. The orders are coming at a rapid pace as more U.S. companies, from construction equipment makers to retailers, say rising transportation costs and tight truck capacity are crimping their ability to grow and slicing into profit margins. Cass Information Systems Inc., which processes freight payments, says its monthly index of U.S. trucking costs rose more than 10% in July, the first double-digit year-over-year increase in the 13 years of the measure. It may be months before trucking capacity scales up enough to meet the growing shipping demand. Many of the new trucks are aimed at replacing older vehicles, trucking companies say, and production still lags far behind orders. Manufacturers delivered 30,000 new vehicles in June, ACT said, but factories are still catching up after trouble earlier in the year getting the parts they needed to keep up with demand.
What Truckers & Railroads Just Said about the US Economy by Wolf Richter • It’s cyclical. The transportation sector is a reflection of the goods-based economy in the US. Demand has been blistering across all modes of transportation. Freight shipment volume (not pricing… we’ll get to pricing in a moment) by truck, rail, air, and barge, according to the Cass Freight Index jumped 10.6% in July compared to a year earlier. This pushed the index, which is not seasonally adjusted, to its highest level for July since 2007. The dynamics in the transportation sector are “clearly signaling that the US economy, at least for now, is ignoring all of the angst coming out of Washington D.C. about the trade wars,” the report by Cass said.The Cass Shipments Index does not include shipments of bulk commodities, such as grains or chemicals. But shipments of commodities were strong too, according to the Association of American Railroads. Excluding the carload category of coal, which is facing a structural decline in the US, carloads rose by 6.7% year-over-year, including grain, up 14.7%; petroleum & petroleum products, up 27%; and chemicals, up 4.6%. Of the 20 commodity carload categories, only five showed declines, including nonmetallic minerals, metallic ores, and the biggie, coal.And intermodal traffic – shipments of containers and trailers via a combination of rail and truck – surged 6.9% in July compared to July last year, the AAR reported. The pop in the Cass Shipments Index of 10.6% was the sixth double-digit increase so far this year. Only June had come in with a single-digit increase (7.2%):
Industrial Production Increased 0.1% in July --From the Fed: Industrial Production and Capacity Utilization Industrial production edged up 0.1 percent in July after rising at an average pace of 0.5 percent over the previous five months. Manufacturing production increased 0.3 percent, the output of utilities moved down 0.5 percent, and, after posting five consecutive months of growth, the index for mining declined 0.3 percent. At 108.0 percent of its 2012 average, total industrial production was 4.2 percent higher in July than it was a year earlier. Capacity utilization for the industrial sector was unchanged in July at 78.1 percent, a rate that is 1.7 percentage points below its long-run (1972–2017) average.This graph shows Capacity Utilization. This series is up 11.4 percentage points from the record low set in June 2009 (the series starts in 1967). Capacity utilization at 78.1% is 1.7% below the average from 1972 to 2017 and below the pre-recession level of 80.8% in December 2007. Note: y-axis doesn't start at zero to better show the change. Industrial ProductionThe second graph shows industrial production since 1967. Industrial production increased in July to 107.3. This is 24% above the recession low, and 2% above the pre-recession peak. This was below the consensus forecast, however production for June was revised up.
Industrial production cools a bit; retail sales continue strong --Both industrial production and retail sales for July were reported this morning. Let's take a look at both.First, industrial production increased m/m to another all time high (gray in the graph below), as did manufacturing (red): At the same time, if you zoom in on the inset, you can see that manufacturing growth has slowed down somewhat this year. It is only up +0.8% in the last 5 months, after having risen 2% in the 6 previous months.There has been some evidence in both the regional Fed reports and the ISM manufacturing index of a little cooling -- from white hot to red hot -- in manufacturing activity in the past few months. This report is of a piece with that cooling. Tomorrow both the Empire State and Philadelphia Fed regional manufacturing reports will be released, and may (or may not!) give evidence of further cooling this month.Second, retail sales increased a strong +0.5% in July, but only after a -0.3% downward revision to June. Adjusting for inflation, real retail sales continue to grow on trend: Real retail sales per capita also continued to grow on trend: I expect per capita real retail sales to turn about a year before any downturn in the economy as a whole. Since real retail sales are also a good short leading indicator for employment (red in the graph below), here is growth in both measured YoY: This suggests continued strong employment growth in the next few months. One thing to watch for is what happens when last September's outsized +1.3% monthly increase drops out of the YoY calculations two months from now.But the nowcast as indicated by the two reports is continued good growth in both production and consumption.
Empire State Manufacturing Survey: Activity Remains Robust in August - This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 25.6 was an increase of 3.0 from the previous month's 22.6.The Investing.com forecast was for a reading of 20.3.The Empire State Manufacturing Index rates the relative level of general business conditions in New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York state.Here is the opening paragraph from the report.Business activity remained robust in New York State, according to firms responding to the August 2018 Empire State Manufacturing Survey. The headline general business conditions index climbed three points to 25.6. [source] Here is a chart of the current conditions and its 3-month moving average, which helps clarify the trend for this extremely volatile indicator:
Philly Fed Manufacturing Index: Growth Slowed in August --The Philly Fed's Manufacturing Business Outlook Survey is a monthly report for the Third Federal Reserve District, covers eastern Pennsylvania, southern New Jersey, and Delaware. While it focuses exclusively on business in this district, this regional survey gives a generally reliable clue as to the direction of the broader Chicago Fed's National Activity Index.The latest Manufacturing Index came in at 11.9, down from last month's 25.7. The 3-month moving average came in at 19.2, down from 26.7 last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook came in at 38.8, an increase from the previous month's 29.0.Today's 11.9 headline number came in well below the 21.9 forecast at Investing.com.Here is the introduction from the survey released today:Growth in regional manufacturing activity slowed in August, according to results from this month’sManufacturing Business Outlook Survey. All the broad indicators remained positive but fell from their readings in July. The survey’s respondents continued to indicate price increases for purchased inputs and their own manufactured products, but these price indexes moderated slightly this month. Expectations for the next six months remained optimistic, with most broad future indicators showing improvement. (Full Report) The first chart below gives us a look at this diffusion index since 2000, which shows us how it has behaved in proximity to the two 21st century recessions. The red dots show the indicator itself, which is quite noisy, and the 3-month moving average, which is more useful as an indicator of coincident economic activity. We can see periods of contraction in 2011, 2012 and 2015, and a shallower contraction in 2013. 2016 saw an improvement only to detract in the second half of 2017.
Trump's Tariffs Force Last U.S. TV Factory to Close -- A South Carolina plant that assembles televisions using Chinese parts plans to shut down and lay off nearly all its employees because of new tariffs imposed by the Trump Administration, the company announced this week.Element Electronics — which describes itself as the only assembler of televisions in the U.S. — plans to lay off 126 of its 134 permanent full-time employees and close the Winnsboro, S.C. plant on Oct. 5. Notably, there are still at least two smaller companies that continue to assemble speciality televisions in the U.S.“The layoff and closure is a result of the new tariffs that were recently and unexpectedly imposed on many goods imported from China, including the key television components used in our assembly operations in Winnsboro,” Carl Kennedy, Element’s vice president of human resources, said in a letter to the South Carolina Department of Employment and Workforce on Monday.Kennedy said he hopes the closure will be temporary and the company is advocating for its parts to be removed from the tariff list. “We remain hopeful that the closure of our South Carolina factory will be avoided,” Element said in a statement shared on social media Tuesday. President Donald Trump often lamented on the campaign trail that the United States “doesn’t make television sets anymore.” At the time, it was already true that there were no U.S. factories making televisions from scratch — just a few that assembled televisions using imported parts. But with the closure of Element’s plant, the United States will no longer assemble mass-market television sets anymore, either.
Small Business Optimism Index increased in July - Mcbride - From the National Federation of Independent Business (NFIB): July 2018 Report: Small Business Optimism Index The Small Business Optimism Index marked its second highest level in the survey’s 45-year history at 107.9, rising to within 0.1 point of the July 1983 record-high of 108...Fifty-nine percent reported hiring or trying to hire (down four points), but 52 percent (88 percent of those hiring or trying to hire) reported few or no qualified applicants for the positions they were trying to fill. Twenty-three percent of owners cited the difficulty of finding qualified workers as their single most important business problem (up two points), one point below the 45-year record high.This graph shows the small business optimism index since 1986.The index increased to 107.9 in July.Note: Usually small business owners complain about taxes and regulations. However, during the recession, "poor sales" was the top problem.Now the difficulty of finding qualified workers is the top problem.
Goldman: "Price pressures seem to be everywhere except the inflation statistics" - A few brief excerpts from a Goldman Sachs research note: Bottlenecks and Price Pressures: Pushing on a String... or Pushing Through?Company commentary and business surveys increasingly highlight bottlenecks and price pressures, as well as a growing shortage of workers in the trucking, healthcare, and construction industries. Yet despite tight labor markets and rising input costs, core PCE inflation has yet to exceed 2 percent on a sustained basis. To paraphrase Robert Solow, price pressures seem to be everywhere except the inflation statistics.… Barring a sizeable rebound in capital formation or labor-force participation, capacity constraints are likely to become increasingly binding as the expansion continues. While the Fed may view further declines in the unemployment rate with some ambivalence, the implications of broadening labor shortages and product-market bottlenecks are more clear-cut, representing a textbook form of overheating that the Committee has historically taken great pains to avoid. CR Note: I'm not worried about a period of inflation like in the 1970s. There are many differences between today and periods of high inflation. Demographics are different (the baby boomers were entering the labor force in the '70s), workers have much less bargaining power now, and in the '70s, many labor and material contracts were tied to CPI (that is far less common today).
Weekly Unemployment Claims: Down 2K, Beats Forecast --Here is the opening statement from the Department of Labor:In the week ending August 11, the advance figure for seasonally adjusted initial claims was 212,000, a decrease of 2,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 213,000 to 214,000. The 4-week moving average was 215,500, an increase of 1,000 from the previous week's revised average. The previous week's average was revised up by 250 from 214,250 to 214,500. [See full report] This morning's seasonally adjusted 212K new claims, down 2K from the previous week's revised figure, was better than the Investing.com forecast of 215K.Here is a close look at the data over the decade (with a callout for the past year), which gives a clearer sense of the overall trend in relation to the last recession.
Summer Teen Employment -- Here is a look at the change in teen employment over time.The graph below shows the participation rate and employment-population ratio for those 16 to 19 years old.The graph is Not Seasonally Adjusted (NSA), to show the seasonal hiring of teenagers during the summer. A few observations:
1) Although teen employment has recovered some since the great recession, overall teen employment has been trending down. This is probably because more people are staying in school (a long term positive for the economy).
2) A smaller percentage of teenagers are seeking summer employment. The seasonal spikes are smaller than in previous decades. So a smaller percentage of teenagers are joining the labor force during the summer as compared to previous years. This could be because of fewer employment opportunities, or because teenagers are pursuing other activities during the summer.
3) The decline in teenager participation is one of the reasons the overall participation rate has declined (of course, the retiring baby boomers is the main reason the overall participation rate is generally declining).
BLS: Unemployment Rates Lower in 11 states in July, Oregon at New Low --From the BLS: Regional and State Employment and Unemployment Summary: Unemployment rates were lower in July in 11 states, higher in 2 states, and stable in 37 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Ten states had jobless rate decreases from a year earlier and 40 states and the District had little or no change. The national unemployment rate edged down by 0.1 percentage point from June to 3.9 percent and was 0.4 point lower than in July 2017....Hawaii had the lowest unemployment rate in July, 2.1 percent. The rate in Oregon (3.9 percent) set a new series low. (All state series begin in 1976.) Alaska had the highest jobless rate, 6.9 percent. In total, 15 states had unemployment rates lower than the U.S. figure of 3.9 percent, 10 states and the District of Columbia had higher rates, and 25 states had rates that were not appreciably different from that of the nation.This graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 1976. At the worst of the great recession, there were 11 states with an unemployment rate at or above 11% (red). Currently only one state, Alaska, has an unemployment rate at or above 6% (dark blue).
Average Pay Gap Between CEOs and Ordinary Workers Hits 312x - The pay gap between the CEOs of major corporations and their rank and file workers has continued to widen, maintaining a trend of inequitable wage growth that has been ongoing since the 1990s. A new Economic Policy Institute report showed CEOs of America’s top 350 companies earned 312 times more than their rank and file workers. According to a report summary in The Guardian, CEOs of major corporations got an average pay rise of 17.6% over the last year while rank-and-file employee compensation rose just 0.3% over the same time. The latter saw their wages stall, for the most part, while CEOs took home an average of $18.9 million in compensation, according to the report. Not surprisingly, this divergence in pay is the continuation of a trend that started back in the 90s:The pay gap has risen dramatically, with some fluctuations, since the 1990s. In 1965 the ratio of CEO to worker pay was 20-to-one; that figure had risen to 58-to-one by in 1989 and peaked in 2000 when CEOs earned 344 times the wage of their average worker. CEO pay dipped in the early 2000s and during the last recession but has been rising rapidly since 2009. Chief executives are even leaving the 0.1% in the dust. The bosses of large firms now earn 5.5 times as much as the average earner in the top 0.1%.The self-fulfilling prophecy of rising CEO compensation, which is estimated to partly be a result of the stock market's rise and "everybody thinking their CEO is better than the next one", according to Lawrence Mishel, a distinguished fellow at the Economic Policy Institute, has now pushed the rising compensation rate to outgrow the rise in the stock market. Between 1978 and 2017 CEO compensation has increased by 979%. Over the same period the S&P 500 Index of the US’s largest companies grew 637%.At the same time, the Guardian article notes, while the S&P 500 index was up 637% from 1978 to 2017, the typical rank and file worker only saw their pay package rise just 11.2%.
Autoworkers call for united struggle with UPS workers against low-pay and part-time jobs - The widespread opposition among UPS workers to the sellout contracts agreed to last Thursday by a national meeting of Teamsters officials has widespread support among autoworkers, with many calling for joint nationwide strike action.The WSWS Autoworkers Newsletter spoke to workers in Michigan, Ohio and Illinois about the efforts of the Teamsters at UPS to ram through the contracts. They include the creation of a second tier of lower-paid “hybrid” delivery drivers and the maintenance of poverty-level pay for part-time workers.Speaking about the spread of low-paid, part-time jobs at UPS, a worker at the Ford Rouge plant in Dearborn, Michigan said, “It’s terrible. It has to stop… Hell yes, we need joint strike action… nationwide!”Currently 70 percent of the 240,000 employees of the shipping giant are part-time, performing everything from loading trucks in warehouses to delivering packages during peak periods. Top pay for a part-timer will reach only $15.50 per hour at the end of the proposed agreement.The aim of the joint conspiracy of the Teamsters and corporate management in introducing a second tier of delivery drivers is to force out older workers and reduce the entire workforce to poverty conditions and casual employment.Among autoworkers, there is growing anger over the proliferation of tiers and highly exploited temporary part-time (TPT) workers, and widespread support for a united struggle. As with UPS workers, autoworkers face a joint offensive of corporate management and the United Auto Workers in enforcing concessions.
Fifteen workers hospitalized after explosion at US Steel mill south of Detroit - An explosion at US Steel’s Great Lakes Works Zug Island mill in River Rouge, Michigan, near Detroit on Friday night sent 15 boilermakers to local hospitals. Police and fire crews were called to the scene after the explosion. According to a statement released by US Steel on Saturday, all workers affected were contract employees hired through Songer Services, a heavy industrial general contracting firm. As of Saturday, 12 of the workers had been released and three remained in treatment. The full extent of the injuries suffered by workers is unknown at this time and press reports indicate an ongoing investigation into the cause of the blast. According to the company’s statement, the explosion occurred at the D4 Blast Furnace and involved the dust catcher. Boilermakers contacted by a local news outlet said the workers had been told by supervisors to clean out the dust separator, which was packed with ash, but they initially resisted, saying it was a safety issue. As a result of the ensuing explosion ash fell on all 15 boilermakers. One boilermaker crawled on his hands and knees to pull another boilermaker out of the ash. He and two others are still hospitalized with serious injuries, including severe burns.
The Entire West Virginia Supreme Court Might Get Impeached - Who presides over the impeachment trial of a state Supreme Court justice if the entire state Supreme Court is being impeached?It’s an absurd constitutional hypothetical West Virginians are left to grapple with, after the West Virginia House of Delegates Judiciary Committee drafted articles of impeachment against four justices on the state’s highest court.Five justices sit on the state Supreme Court in West Virginia. The state legislature has drafted articles of impeachment against Chief Justice Margaret Workman and Justices Robin Jean Davis, Beth Walker, and Allen Loughry. The court’s fifth justice, Menis Ketchum, retired in late July. Ketchum will plead guilty to two federal corruption charges on Aug. 29.Loughry was placed on unpaid administrative leave in June after a state commission lodged a 32-count complaint against him, alleging pervasive violations of the state ethics code. He has since been indicted in federal court for fraud, witness tampering, and making false statements to investigators.The remaining three justices — Workman, Davis, and Walker — face impeachment for wasting government resources and failing to effectively administer the state courts. All three spent large sums of taxpayer dollars on lavish improvements to their chambers in the state capital, which cumulatively totaled almost $750,000, and allegedly abused state travel resources. Workman and Davis also allegedly authorized compensation for other state judges in excess of the amounts allowed by West Virginia law. “There appears to be, based on the evidence before us, an atmosphere that has engulfed the court of cavalier indifference to the expenditure of taxpayer funds, to the protection of taxpayer-paid assets, and an almost incomprehensible arrogance that for some reason they are not a coequal branch but a superior branch of government,” Delegate John Shott said during a judiciary committee hearing on Aug. 7. West Virginia’s constitution provides that the chief justice shall preside over impeachment trials in the state Senate. As Chief Justice Workman herself, however, is subject to impeachment, she is ineligible to preside, as are the rest of her colleagues.
New Mexico Judge Cries Islamophobia In Decision To Free Jihadi Compound Suspects -- Reactions have ranged from shock to disbelief at a New Mexico judge's decision to free five suspects operating a heavily armed camp where prosecutors allege 11 malnourished children were being trained for jihad while on the FBI's radar. Despite authorities finding the decomposing body of a three-year-old boy who was reportedly killed in a ritual ceremony by his father - the son of a famous Imam, who claimed his seizure-stricken child would resurrect as Jesus and use his psychic powers to help the group target "corrupt institutions and people" with "violent actions," and despite a letter from one suspect to his brother inviting him to "die as a martyr," New Mexico judge Sarah Backus on Monday released five alleged Muslim extremists on a $20,000 "signature bond" (meaning they don't have to pay it) - while effectively admonishing the prosecution for Islamophobia. Backus - who survived a petition to replace her in 2016 with a "Qualified judge," wrote that the State of New Mexico "apparently expected the court to take the individuals’ faith into account" in determining whether or not the defendants accused of operating a radical Islamic training camp pose a danger to the community, notes the Daily Caller. “The defendants are apparently of the Muslim faith,” read the order. “The Court was asked by the State to make a finding of dangerousness and a finding of no conditions of release could ensure the safety of the community. The State apparently expected the court to take the individuals’ faith into account in making such a determination. The Court has never been asked to take any other person’s faith into account in making a determination of dangerousness. The Court is not aware of any law that allows the Court to take a person’s faith into consideration in making a dangerousness determination.”
Nebraska carries out first execution in US using the opioid fentanyl -- The state of Nebraska carried out the execution Tuesday morning of Carey Dean Moore, marking the state’s first execution in more than two decades. The state used a lethal injection protocol including fentanyl, the powerful synthetic drug at the center of the US opioid crisis that claimed more than 70,000 lives last year alone.Nebraska Governor Pete Ricketts and the state’s prison authorities have the dubious distinction of pioneering the use of fentanyl for state-sanctioned murder.The execution proceeded after both a federal district court and a US Court of Appeals refused a request by a German pharmaceutical company for a temporary restraining order to halt the execution. Fresenius Kabi said it had “grounds to believe” that two drugs of the four-part lethal injection protocol were the company’s products. Nebraska has not identified the source for its lethal injection drugs. Moore, 60, was convicted and sentenced to death for the 1979 killings, five days apart, of two Omaha cabdrivers, Reuel Van Ness and Maynard Helgeland, both 47. Moore reportedly targeted the two because he knew they carried cash. . Moore, who had seven previous execution dates that were delayed for various legal reasons, did not fight his final date with death, telling his family, friends and reporters that he was tired of living so long on death row, according to the Omaha World-Herald. As a born-again Christian, he said he had received forgiveness from God for his crimes.
The Children of the Opioid Crisis - The police officer who entered Mikaya Feucht’s Ohio apartment found it littered with trash, dirty dishes and plastic milk jugs full of the opioid addict’s vomit. He also found two toddlers, aged 3 and 2, who watched as the officer uncovered the track marks on their mother’s arms and looked in vain for any food to feed them. That was three years ago. By the time Mikaya overdosed and died from the elephant tranquilizer carfentanil this summer, her sons were living with their grandparents. But the chaos of watching their mother descend into addiction will burden them for years. They were often hungry and dirty in her care, and spoke of being hit with a belt by her boyfriend, according to their grandparents. At the funeral home before Mikaya, 24 years old, was cremated, her younger son, Reed, clung to her through the open casket. “And it wasn’t just a quick hug. It was heartbreaking,” says Chuck Curran, his grandfather. Widespread abuse of powerful opioids has pushed U.S. overdose death rates to all-time highs. It has also traumatized tens of thousands of children. The number of youngsters in foster care in many states has soared, overwhelming social workers and courts. Hospitals that once saw few opioid-addicted newborns are now treating dozens a year. And many of the children who remain in the care of addicted parents are growing up in mayhem. They watch their mothers and fathers overdose and die on the bathroom floor. They live without electricity, food or heat when their parents can’t pay the bills. They stop going to school, and learn to steal and forage to meet their basic needs.
Throwing Children Away: The School-to-Prison Pipeline -Imagine receiving a phone call that your child had misbehaved at school. Imagine if that call came from the local police. Tens of thousands of parents go through this scenario every year. And while it’s natural to assume the police will only get involved if a serious offense is committed, the majority of these cases—and arrests of juveniles at school—involve bad behavior, not criminal activity.Students are routinely arrested on disorderly conduct charges for talking back to teachers, skipping class, launching spitballs, etc. Why is behavior that used to be disciplined within the school system now being outsourced to the police? There are a number of factors, but the most notable is the increase in the number of police officers stationed on school campuses, i.e. school resource officers (SRO). Rroughly 30 percent of public schools now have SROs on campus. It’s a trend that started in the late 1990s as part of a “zero tolerance” policy for school safety. With about 20 years of data to review, most academic studies have found that this movement has been counterproductive. In his study “School Resource Officers and the Criminalization of Student Behavior,” University of Tennessee sociology professor Matthew Theriot found that students in schools with SROs were nearly five times more likely to be arrested for disorderly conduct, which, as mentioned earlier, can encompass a wide range of non-criminal behavior.After being arrested, minorities are thrown into what is supposed to be a colorblind criminal justice system. However, there are stunning levels of systemic bias at every step of the process. Black juveniles are six times more likely to be sentenced to jail than white youths convicted of similar offenses. Black juveniles are also more likely to be tried as adults and to serve longer sentences.This is a nationwide issue, but one particular example has caught the attention of the Department of Justice. In 2012, the DOJ accused the city of Meridian, Mississippi, of operating a “school-to-prison pipeline.” It was an accurate description. The Meridian Police Department had a standard policy that all students faced arrest if they were referred to the police by the school. There was no room for discretion, no matter how petty the offense.
Oklahoma School Shuts Down for 2 Days After Parents Threaten Transgender 7th Grader on Facebook - A school district in southern Oklahoma was forced to shut down for two days after parents used a Facebook group to threaten violence against a transgender seventh-grade student.Superintendent Rick Beene closed Achille Public Schools on Monday and Tuesday after parents posted claims on a Facebook group “Achille ISD Parents Group” that the student, who identifies as a girl, was looking over the stalls in the girls’ bathroom.“Heads up parents of 5th through 7th grade,” parent Jamie Crenshaw said in a now-deleted post. “The transgender is already using the girls bathroom. We have been told how the school has gone above and beyond to make sure he has his own restroom yet he is still using the girls. REALLY… Looks like its going to be a long year.” Beene would not confirm whether the alleged bathroom incident occurred. The post set off reactions from other adults who referred to the 7th grade student as “this thing” and “half baked maggot.” One parent repeatedly referred to the student as “he” and suggested a “good sharp knife” stop the student. Another parent said that their child should “whip his ass until he quits coming to school.” Beene tells TIME he made the decision to close both the elementary schools, which houses kindergarten through eighth grade, and the high school on the advice of local law enforcement. LGBTQ rights supporters were planning a demonstration at the school and police believed it would be safer to close the district — which has 400 students — because of the possibility of counter-protestors, Beene says. The school will reopen Wednesday with police on campus.
School Choice Is the Enemy of Justice -- In 1972, I was one of a slightly bigger group of black students bused to a predominantly white elementary school in Westchester, a community close to the beach in Los Angeles. While I didn’t encounter the overt hostility my father had, I did experience resistance, including being barred once from entering a white classmate’s home because, she said matter-of-factly as she stood in the doorway, she didn’t let black people (she used a different word) in her house. Still, I believed, even as a fifth grader, that education is a social contract and that Los Angeles was uniquely suited to carry it out. Los Angeles would surely accomplish what Louisiana could not. I was wrong. Today Los Angeles and California as a whole have abandoned integration as the chief mechanism of school reform and embraced charter schools instead.This has happened all over the country, of course, but California has led the way — it has 630,000 students in charter schools, more than any other state, and the Los Angeles Unified School District has more than 154,000 of them. Charters are associated with choice and innovation, important elements of the good life that California is famous for. In a deep-blue state, that good life theoretically includes diversity, and many white liberals believe charters can achieve that, too. After all, a do-it-yourself school can do anything it wants. But that’s what makes me uneasy, the notion that public schools, which charters technically are, have a choice about how or to what degree to enforce the social contract. There are many charter success stories, I know, and many make a diverse student body part of their mission. But charters as a group are ill suited to the task of justice because they are a legacy of failed justice. Integration did not happen. The effect of my father’s and my foray into those white schools was not more equality but white flight. Largely white schools became largely black, and Latino schools were stigmatized as “bad” and never had a place in the California good life.
Six Baltimore Schools Wouldn't Have Had Any Sports Teams If New Grading Standards Were Implemented - With attendance at Baltimore schools plumbing 13-year lows, and multiple high schools with zero students proficient in math, it is perhaps no surprise that Baltimore schools delayed implementing a grade policy in August that would have prevented six schools from fielding any sports teams. The Daily Caller's Rob Smishock reports that Baltimore City Public Schools’ (BCPS) policy would have restricted student athletes who had not achieved at least a 2.0 (“C”) GPA in summer school or the last quarter of the preceding academic year from competing in fall sports like football, reported The Baltimore Sun. The old rule only mandated that students not have failed more than one class per quarter. “We’re making sure we’re being fair to students who are affected by this and may not have fully understood what was at play before,” BCPS executive director of whole child services and support Sarah Warren told The Sun. “There’s been situations that have come across my desk where a student may have been living with their grandmother, and their grandmother passes,” BCPS chief academic officer Sean Conley said. “This student may have been an A or B student, but then the grades just plummeted. We want to make sure we’re looking at the student as more of a totality than at just that one moment.” Over 50 percent of the district’s students live in poverty, many are homeless, and many have to deal with the city’s high crime rate. “Our kids face so much adversity outside of school,” Benjamin Franklin High School athletic director Richard Jackson told The Baltimore Sun. “I’d hate to have to throw even more adversity when they get to school.”
To Address School Shootings, U.S. Wants Students to Learn Bleeding-Control Techniques NYT - In a nod to the sad reality that shootings at the nation’s schools are far too prevalent, the United States government will award a $1.8 million grant to create a program to teach high school students proper bleeding-control techniques. The goal of the program, called School-Age Trauma Training, is “to enhance a bystander’s ability to take decisive, lifesaving action to assist victims with traumatic injuries,” according to the Department of Homeland Security, which posted notice of the grant online last month. “Similar to how students learn health education and driver’s education, they must learn proper bleeding control techniques using commonly available materials,’’ according to the notice, “including how to use their hands, dressings and tourniquets.” The grant notice was posted in July, and the program is being overseen by the department’s Science and Technology Directorate and the Federal Emergency Management Agency. Independent school districts and nonprofit organizations are among the groups eligible for the grant, and they have until Aug. 27 to apply. The development of the program could take about 36 months once a proposal is selected, John Verrico, a spokesman for the Science and Technology Directorate, said in an interview on Monday. He said it was too early to say how the program would be rolled out and expanded to the rest of the country. The grant to develop a program is not tied to any one school shooting, but comes at a time when there have been more than 250 deaths of students and teachers in the country’s schools since 2000, according to Homeland Security. The bleeding-control program is also meant to address providing immediate help during natural disasters, Mr. Verrico said.
6 Months Later, Parkland Teens Are Still Fighting Like Hell - One week after the mass shooting at Marjory Stoneman Douglas High School in Parkland, Florida, in February, student survivors, outraged with Washington’s “thoughts and prayers,” took to CNN to declare politicians complicit in the deaths of their classmates. Just one month later, those same students organized nationwide “March for Our Lives” rallies, vowing to purge the political class of NRA-backed lawmakers.Now, six months after a shooting that left 17 people dead (it feels “more like 60 years” #NeverAgain co-founder David Hogg told Mother Jones) the Parkland teens are throwing everything they’ve got at the midterm elections. On Sunday, the young activists reached the end of their “Road to Change” bus tour, which took Parkland survivors and activists from communities stricken by daily gun violence to 33 cities and towns across America. Zeroing in on communities with historically low youth turnout, the students registered new voters, held town halls, and connected with local leaders who support their goal of curbing gun violence by, among other things, limiting unfettered access to assault weapons and requiring background checks for all gun sales. Their journey concluded in Newtown, Connecticut, a community still mourning its own school shooting nearly six years ago. As their cross-country trek drew to a close,Mother Jones traveled to Newtown for the tour’s final stop and also hosted student leaders in New York City. We wanted to find out what they had learned across a summer of activism, and how they planned to maintain momentum through November.The “Road to Change” bus moved at a punishing pace, covering 25 states in 60 days. “We’ve spoken in more congressional districts than almost any presidential campaign has in the same time span,” Hogg told Mother Jones. “We know what America’s thinking right now.” Hogg is convinced voters are on the students’ side. He pointed out that the vast majority of Americans favor expanded background checks for gun sales, a cornerstone of the “March for Our Lives” platform. Young people are especially enthusiastic about their message, said Bria Smith, a violence-prevention advocate from Milwaukee who joined the tour when it stopped through her hometown. “They’re craving to be able to reform policies, craving to be able to organize and mobilize in their communities—and we noticed they just needed the push and the movement and the inspiration,” she said, during a joint Mother Jones interview with Hogg.
Puerto Rican teachers’ anger builds against privatization, firings and lack of pay raises --Anger is mounting among teachers in Puerto Rico against privatization plans by the government, dwindling enrollment and firings. Teachers are demanding the delivery of promised raises, smaller class sizes and knowledge about where they will be assigned in the new school year. In an effort to defuse this anger, the Puerto Rico Teachers Federation (FMPR) has announced plans for a one-day strike on August 15. The FMPR cites members’ “indignation” and “outrage” with “the government and the Department of Education” in the face of attacks on teachers and students. In a press release, the FMPR stated, “The public education system, together with its fundamental components, the students and their teachers, have suffered the most brutal attack in history. Secretary of Education Julia Keleher has decreed the closure of some 450 schools in two years and has reduced the number of educators from 31,000 in 2016 to around 22,500 today.” While the Department of Education has justified school closures on the island by pointing to a steep drop in enrollment (from 346,000 enrolled students in May 2017 to an estimated 311,000 this August), “the government is poised to push the creation of dozens of private charter schools, subsidized with public funds,” the FMPR release says. The teachers’ grievances are manifold. There have been no pay raises in the past 10 years. Classes are overcrowded. In addition, the teachers association says, hundreds of teachers are starting the school year with no knowledge of where they will be placed. In the past, teachers have been moved from one school to another with little notice. Among the teachers’ demands are the delivery of raises that were promised by the governor, but which never materialized. Additionally, they demand class sizes no greater than 20, an end to school closures and to moving teachers from one school to another during the school year. One of their most significant demands, however, is that all efforts to privatize Puerto Rico’s schools be halted..
Colorado School District Cancels Monday Classes In Effort To Boost Teacher Morale - A Colorado school district announced Monday it will move to a four-day school week for the upcoming calendar year. Colorado School District 27J, which serves 18,000 students in the Denver metropolitan area, hopes that nixing Monday classes will save the district around $1 million in transportation, utilities and substitute teacher costs, as well as providing a boost to student and teacher morale. “We’re confident it’s going to attract teachers and keep them,” District Superintendent Chris Fielder told KUSA. The schedule change means that students will only be in class for 149 days, according to the district’s calendar, far fewer than the 180-day school year typically required by public schools in most states. Fielder told parents in February the district will accommodate for lost classroom time by extending school hours on the days class is in session. The school district saw a surge of applicants wanting to teach at its schools in April by teachers enticed by the prospect of a four-day work week. Summer vacation for all of June and July for teachers and students appears to be untouched by the change, according to the district calendar.“Who doesn’t want that?” one applicant told KUSA in April. “I really think what 27J is doing is going to be so helpful. It’s going to be great and I just think the kids are going to love it.” Fielder said teachers will only have to work one Monday a month, for only half a day.“We really feel like Monday is the day to prepare and to be better for kids,” he said. “This will give people a chance to have a weekend and then come in on Monday — whether they’re paid to or not because they’re doing that work anyway to be prepared for kids and to be better for kids.” While teachers are reportedly thrilled about the change, many parents are concerned about finding and paying for child care on Mondays.
Lawsuit Claims the ACT Sells Students’ Disability Data to Colleges -Students are suing a major college admissions test maker for allegedly selling information about their disability statuses with universities, which they say could hurt their chances at getting into schools and impact the rest of their lives.When students register to take the ACT—a standardized test used for college admissions taken by more than a million high schoolers each year—they answer a barrage of personal questions. As part of this, they are asked to note if they have disabilities that require “special provisions from the educational institution.” The ACT, which is administered by ACT, Inc., is the only real competitor to the College Board’s SAT exam. The lawsuit claims that the ACT is selling the data it gleans from those student questionnaires—connected directly to students’ individual identities—to colleges, which then use it to make important decisions about admissions and financial aid.“A lot of students and parents have no idea how these testing agencies, which are gatekeepers to college, are using very sensitive and confidential data in the college admissions process,” Jesse Creed, one of the plaintiffs’ lawyers, told me in a phone call. “[Colleges are] hungry for disability data, because they have limited resources, and it’s expensive to educate people with disabilities.”In a class action lawsuit filed in U.S. District Court in Los Angeles, they say that this is a “flagrant violations of the privacy and civil rights of students with disabilities... ACT profits off these violations and uses them to gain an edge in the marketplace over its only competitor, the College Board, which does not disclose students’ disabilities to colleges and universities.”“Student disabilities, classified by kind of disability, are listed as data elements in the searchable database ACT sells to its enrollment management clients (including colleges) as a tool to ‘find the right students for your institution,’” the lawsuit states. A spokesperson for ACT told me in an email that the agency “does not comment on pending litigation.”
St. Louis University Is Installing Amazon Alexa-Enabled Echo Dots Campus-Wide -- The first college or university in the nation is installing Alexa-enabled Amazon Echo Dots in every single dorm room across campus.St. Louis University, a private four-year university in Missouri, unveiled a plan to install 2,300 intelligent assistant-enabled Echo Dots in residence halls and student apartments before classes begin later this month. The Alexa-enabled Echo Dots will be programmed to answer over 100 specific questions about the campus and student activities, such as the hours for the library or a list of upcoming public lectures.The program, the first of its kind in the nation because it will include every residence on the school’s campus, is managed by Amazon’s Alexa for Business and supported by Amazon Web Services (AWS), which means students don’t have to know how to set up Alexa or the Echo Dot. Instead the devices will be operated by a central system not tied to any student’s individual account and won’t retain personal information. Additionally, the university says the Echo Dots are operated at no cost to students.Last spring, the school conducted a pilot program, putting the devices in residence hall rooms. School administrators say students responded to the test-run with positive feedback. Arizona State University also tried something similar last year, installing 1,600 Echo Dots in engineering students’ live-work spaces during the 2017-2018 school year. Even though the pilot program received positive reviews, the school notes that students with privacy concerns about intelligent assistants like Alexa can unplug the device and store it during the school year if they feel uncomfortable having it in their rooms.
Agency Collects $50 Million From Kentucky Students Without Court Order - The Kentucky Department of Revenue has collected at least $50 million since 2006 from students who owed money to nearly all of Kentucky's public universities, and gotten millions more in fees.Much of that money has come from garnishing paychecks and tax refunds, which the revenue department, unlike a regular collections agency, can do without a court order. A Fayette County judge recently declared illegal UK HealthCare's use of the revenue department to collect unpaid debts from patients, a decision UK appealed directly to the Kentucky Supreme Court.The revenue department, though, also serves as the debt collector for every public university in the state, except the University of Louisville. For its services, the department adds a 25 percent collection fee that debtors must pay.Five of those universities filed a "friend of the court" brief in support of UK's appeal, asking the court to dismiss the lawsuit because it could have "devastating effects on the schools.""This is important because it's a substantial way of our collecting monies that are owed the commonwealth," said Jane Fitzpatrick, general counsel at Morehead State University, who authored the motion. "There's a substantial process that goes on, but it's a means of the commonwealth collecting its dollars."The other four schools are Western Kentucky University, the Kentucky Community and Technical College System, Eastern Kentucky University and Murray State University. The debts are usually related to missing tuition payments.Fitzpatrick pointed out that after a decade of state funding cuts to higher education, tuition dollars have gone from making up one-third of Morehead State's budget to two-thirds. "We feel it more and more when people don't pay," she said.According to the brief, KCTCS has referred almost $80 million in debt to the revenue department for collection, and has received $44.8 million back. Thanks to the 25 percent fee, the revenue department has collected another $11 million for itself.Department spokesman Glenn Waldrop said that money is used to pay for collections efforts.
Omarosa: DeVos said black students don’t have ‘capacity to understand’ her goals | TheHill: Former White House aide Omarosa Manigault Newman claims in her new book that Education Secretary Betsy DeVos once said students who booed her at a historically black college lacked the “capacity to understand” what the Trump administration is trying to accomplish. Manigualt Newman wrote in “Unhinged: An Insider's Account of the Trump White House," which was released on Tuesday, that the comment from DeVos came after she gave a speech at Bethune-Cookman University in May 2017, according to excerpts obtained by The Hill. Manigault Newman, who was an HBCU graduate and who reportedly helped lead the Trump administration's outreach to those colleges, said that it quickly became clear that no one wanted DeVos to deliver a commencement address at the school. "Betsy got up onstage to give her speech and was immediately, loudly booed by the entire audience," Manigault Newman wrote. "Graduating students and their families stood up and turned their backs on her. I was seated onstage watching this travesty unfold. When the booing started, she should have wrapped it up, but she went on and on for twenty minutes, talking over the booing. I was thinking, It’s not about you! Abandon your full speech! Adjust, woman!" But Maniguault Newman said that DeVos thought the speech went "great," before adding that the students who booed "didn't get it." "They don’t have the capacity to understand what we’re trying to accomplish,” DeVos said, according to Manigault Newman, who inferred that what DeVos meant was that "those black students were too stupid to understand her agenda."
Than 1 Million People Default on Their Student Loans Each Year - More than 1 million student loan borrowers each year go into default.Outstanding education debt in the U.S. has tripled over the last decade and now exceeds $1.5 trillion, posing a greater burden to Americans than auto or credit card debt.For many, the payments are proving unmanageable. By 2023, nearly 40 percent of borrowers are expected to default on their student loans. That's when a person has not made a payment toward their education debt in roughly a year, triggering it being sent to a third-party collection agency. What kind of student loan borrowers are at risk of defaulting? And what's the financial impact on them of doing so? A new report from the Urban Institute, a progressive think tank in Washington, D.C., answers these questions. The researchers analyzed the fates of borrowers who entered repayment in 2012. Federal loans come with a lot of protections that should make default rare, said Kristin Blagg, a research associate at the Urban Institute, focusing on education.However, she learned, that is not the case: Within four years after leaving school, nearly a quarter of the borrowers had defaulted. "To default is still pretty common," Blagg said.She added, "I found that these are borrowers who tend to be in financial distress."Defaulters are less likely than nondefaulters to have types of debt that require a risk assessment, like credit card, auto and mortgage debt. They're more likely than nondefaulters to have their utility and medical bills fall into collections, as well. Blagg said these additional debt pressures can explain, at least in part, why some borrowers might be putting off their student loan payments.
CalPERS to End Direct Investments, Separately Managed Accounts, Limit Co-Investment as CIO Whinges About Difficulty of Putting Money to Work - Yves Smith - Most of the financial media covering CalPERS, save top reporters like Dan Primack, needs to wake up and start reporting on the giant pension fund’s gross misrepresentations about the private equity scheme it’s desperately trying to get its board to approve, despite staff’s failure to offer coherent reasons. The fact that CalPERS plans to have the board agree today to change its policy so as to end direct investments, as well as limit other types of private equity investing, might get asleep-at-the-wheel members of the press to recognize that they’ve been snookered. As we, private equity expert Ashby Monk of Stanford, and some reporters like Primack have pointed out, what CalPERS is planning to do has nothing to do with direct investing. Perhaps CalPERS formal renunciation of direct investing will get them to sit up and take notice. On top of that, senior figures in the limited partner community have taken it upon themselves to contact the board to try to tell them that the CalPERS plan is the nuttiest thing they’ve ever heard of. For those new to private equity, “direct investing” is when an investor uses its own employees to make and oversee investments in companies, rather than rely on the costly middlemen. Most reporters have been so lazy that they’ve merely looked at the name CalPERS has applied to its gimmick, “CalPERS Direct,” and failed to examine its substance. But rather than start moving more private equity management in house to cut these ginormous costs and improve net returns, as more and more major investors are doing, CalPERS is instead plans to go pedal to the metal in the opposite direction. CalPERS intends to create two entirely new companies which will effectively be dedicated general partners.1 CalPERS won’t even choose any board members. The new entities will choose them…. which mean CalPERS will have even less influence and insight over what the vehicles are doing that it does in traditional private equity funds, since CalPERS is often a member of their advisory committees. CalPERS may also give up other limited-partner protections, such as key man provisions and language that describes the scope of investments. It is highly unlikely that there will be savings because skilled professionals will insist on having compensation potential similar to what they get now, particularly since CalPERS has maintained it could unwind the deal at any time.2 Accordingly, when asked specifically by a Bloomberg reporter if CalPERS expected to lower cost, Ted Eliopoulos effectively said no.
Medicaid Officials Target Home Health Aides’ Union Dues Medicaid home care aides — hourly workers who help the elderly and disabled with daily tasks like eating, getting dressed and bathing — are emerging as the latest target in the ongoing power struggle between conservatives and organized labor.About half a million of these workers belong to the Service Employees International Union, a public-sector union that represents almost 1.9 million workers in the United States and Canada. The union is an influential donor to liberal politicians and boasted strong ties to the Obama administration.A proposed rule from the federal Centers for Medicare & Medicaid Services would prohibit home health aides paid directly by Medicaid from having their union dues automatically deducted from their paychecks, though it doesn’t name the fees explicitly.Blocking these direct Medicaid payments means the workers — especially those who don’t work in a single, centralized office, or don’t have a credit card or a bank account — are far less likely to pay dues, diminishing the union’s potential influence.CMS’ language affects only “individual providers” — that is, those who aren’t employed by the private, for-profit agencies that dominate this industry. Individual providers, who are technically state employees, are far more likely to be unionized.The directive, which would overturn an Obama administration policy put in place to ease the collection of union dues and pay for other fees, such as health benefits, could take effect by the end of this year. A month-long comment period, ending Monday, has attracted more than 3,300 responses. “This is just another way to make life more difficult for public-sector unions,” said Jake Rosenfeld, an associate professor of sociology at Washington University in St. Louis, who studies unions and their influence.
New CDC estimates: A record 72,000 US drug overdose deaths in 2017 - Drug overdose deaths in the US topped 72,000 in 2017, according to new provisional estimates released by the Centers for Disease Control and Prevention (CDC). This staggering figure translates into about 200 drug overdose deaths every day, or about one every eight minutes. The new CDC estimates are 6,000 deaths more than 2016 estimates, a rise of 9.5 percent. This has been primarily driven by a continued rise of deaths involving synthetic opioids, a category of drugs that includes fentanyl. Nearly 30,000 deaths involved these drugs in 2017, an increase of more than 9,000 (nearly 50 percent) over the previous year, according to preliminary data. This catastrophic toll of opioid deaths casts a grim light on the state of America in the 21st century. At its root lies a society characterized by vast social inequality, corporate greed and government indifference. While the opioid crisis spares no segment of society, the most profoundly affected are workers and the poor, along with the communities where they live.Deaths involving the stimulant cocaine also rose significantly, placing them on par with heroin and the category of natural opiates including painkillers such as oxycodone and hydrocodone. The CDC estimates suggest that deaths involving the latter two drugs appear to have flattened out. The highest mortality rates in 2017 were distributed similarly to previous years, with parts of Appalachia and New England showing the largest figures. West Virginia again saw the highest death rates, with 58.7 overdose deaths per 100,000 residents, followed by the District of Columbia (50.4), Pennsylvania (44.2), Ohio (44.0) and Maryland (37.9). Nebraska had the lowest rate, 8.2 deaths per 100,000, one-seventh the West Virginia rate.
Trump lashes out at China, Mexico for role in opioid crisis -- President Trump lashed out Thursday at China and Mexico for illegal opioids entering the US from the two countries — and called on Attorney General Jeff Sessions to file a federal lawsuit against unnamed pharmaceutical companies that make them. China and Mexico, the president said, are “sending their garbage and killing our people. It’s almost a form of warfare.” Trump then asked Sessions to bring a federal lawsuit against certain companies that manufacture opioids rather than just joining state lawsuits against Big Pharma. “I’d be very, very firm on that. It’s a disgrace and we can stop it,” Trump said. Roughly 72,000 people in the US died of drug overdoses in 2017, most of them from opioids such as fentanyl and heroin. That’s up from about 63,000 the year before. Trump has called the opioid crisis a national emergency, but the death toll has risen on his watch. Several states as well as New York City have filed lawsuits against pharmaceutical companies, seeking billions in damages.
The Enemy Between Us: How Inequality Erodes Our Mental Health -- Most people probably don’t think that broader, structural issues to do with politics and the economy have anything to do with their emotional health and wellbeing, but they do. We’ve known for a long time that inequality causes a wide range of health and social problems, including everything from reduced life expectancy and higher infant mortality to poor educational attainment, lower social mobility and increased levels of violence. Differences in these areas between more and less equal societies are large, and everyone is affected by them. In our new book, The Inner Level, we bring together a robust body of evidence that shows inequality eats into the heart of our immediate, personal world, and the vast majority of the population are affected by the ways in which inequality becomes the enemy between us. What gets between us and other people are all the things that make us feel ill at ease with one another, worried about how others see us, and shy and awkward in company—in short, all our social anxieties. For some people, these anxieties become so severe that social contact becomes an ordeal and they withdraw from social life. Others continue to participate in social life but are beset by the constant worry that they have no small talk or come across as boring, stupid or unattractive. Sadly, we all tend to feel that these anxieties are our own personal psychological weaknesses and that we need to hide them from others or seek therapy or treatment to try to overcome them by ourselves. But a recent Mental Health Foundation Survey found that 74 percent of adults in the UK were so stressed at times in the past year that they felt overwhelmed and unable to cope. One-third had suicidal thoughts and 16 percent had self-harmed sometime in their lives. The figures were much higher for young people. In the USA, mortality rates are rising, particularly for white middle-aged men and women, due to ‘despair’, meaning deaths due to drug and alcohol addictions, suicide, and vehicle accidents. An epidemic of distress seems to be gripping some of the richest nations in the world.
We’re in a new age of obesity. How did it happen? You’d be surprised - George Monbiot - A picture of Brighton beach in 1976, featured in the Guardian a few weeks ago, appeared to show an alien race. Almost everyone was slim. I mentioned it on social media, then went on holiday. When I returned, I found that people were still debating it. The obvious explanation, many on social media insisted, is that we’re eating more.. So here’s the first big surprise: we ate more in 1976. According to government figures, we currently consume an average of 2,130 kilocalories a day, a figure that appears to include sweets and alcohol. But in 1976, we consumed 2,280 kcal excluding alcohol and sweets, or 2,590 kcal when they’re included. I have found no reason to disbelieve the figures. Others insisted that the cause is a decline in manual labour. Again, this seems to make sense, but again the data doesn’t support it. A paper last year in the International Journal of Surgery states that “adults working in unskilled manual professions are over four times more likely to be classified as morbidly obese compared with those in professional employment”. Many other studies suggest that exercise, while crucial to other aspects of good health, is far less important than diet in regulating our weight. Some suggest it plays no role at all as the more we exercise, the hungrier we become. So what has happened? The light begins to dawn when you look at the nutrition figures in more detail. Yes, we ate more in 1976, but differently. Today, we buy half as much fresh milk per person, but five times more yoghurt, three times more ice cream and – wait for it – 39 times as many dairy desserts. We buy half as many eggs as in 1976, but a third more breakfast cereals and twice the cereal snacks; half the total potatoes, but three times the crisps. While our direct purchases of sugar have sharply declined, the sugar we consume in drinks and confectionery is likely to have rocketed (there are purchase numbers only from 1992, at which point they were rising rapidly. Perhaps, as we consumed just 9kcal a day in the form of drinks in 1976, no one thought the numbers were worth collecting.) In other words, the opportunities to load our food with sugar have boomed. As some experts have long proposed, this seems to be the issue.
Human Zombies Unaware Of The Real World -- How often have you seen this? Head down – in their smartphone – texting – while walking – while crossing the street – or driving their car – or at the dinner table – or in a meeting – or in the bathroom… or, like, all the time? An apparent human Zombie. They’ve been walking around the streets for quite some time. A human subspecies of Zombies… You’ve seen these poor, lifeless beings everywhere. People with pallid, emotionless faces, staring down at small screens while they walk direction-less down the street, completely unaware of their surroundings. Yet these poor souls actually believe they are more “connected” to the outside world and more people than ever. Sometimes they return to real life and have real interactions with living human beings, but then this horrible urge kicks in which compels them to pull out their iPhone or Android device. Their PRECIOUS. They’ll pull it out in the middle of a business meeting while someone else is talking. They’ll fiddle with it in the bathroom stall at work (or, good heavens, take calls on it and seal deals while on the can). They’ll start tapping on the screen in the middle of dinner with family. They’ll mess with it while watching TV. And even after satisfying the most basic of human requirements, it still won’t go away. “Oh was it good for you, honey? Great, you nap, I’m gonna check my facebook…”
Ultra-Wealthy Having Their Brains Frozen So They Can "Come Back To Life" 100s Of Years From Now - Throughout history, money has allowed the elite to buy just about anything they want – except an escape from death. Many super-rich individuals are deeply haunted by the knowledge that they have spent their lives working incredibly hard to accumulate vast amounts of wealth but they only have a very limited amount of time in which to enjoy it. As a result, many of them are absolutely obsessed with finding a way to cheat death.The quest for eternal life is very much alive today – especially in tech hotbeds such as Silicon Valley. As technology continues to increase at an exponential rate, many among the elite are absolutely convinced that eternal life will be possible someday, and they are determined to stick around long enough to be a part of that revolution. One way that some ultra-wealthy people are attempting to extend their lifespans into the future is through the emerging science of cryogenics. Some are having their entire bodies frozen, and others are having just their brains frozen, but it is very expensive…The super-rich are having their brains frozen for £80,000 ($100,000) in the hope of being re-born in as little as 200 years time.Cryogenics, which involves deep freezing the body to -196°C (-321°F), is increasingly being seen as a way to beat death. There are several companies that currently perform this kind of “service” around the world right now. In total, several hundred people have already been frozen, and a few thousand more have signed up and are waiting to die.
"This Is A Very Dangerous Outbreak" WHO Chief 'Worried' Over Ebola In DRC - The director of the World Health Organization (WHO) is urging a ceasefire between armed groups in the Democratic Republic of Congo (DRC), as raging conflicts in the region have hampered efforts to stop a new Ebola outbreak which is transmitting freely, reports the Daily Mail. So far 41 deaths had been reported as of August 1 between the DRC's North Kivu province, including the cities of Beni and Mangina. As the death toll in the outbreak declared on August 1 in DRC's violence-wracked North Kivu province hit 41, the World Health Organization chief also called for the rapid roll-out of an unlicenced drug being used for the first time to treat Ebola patients.Tedros Adhanom Ghebreyesus told reporters in Geneva he feared conditions on the ground in the eastern province had created "a conducive environment for the transmission of Ebola." -Daily MailGhebreyesus, who traveled to the hot zones in Beni and Mangina in recent days, says that while he was worried before his trip - since his return "I am actually more worried." The latest outbreak now encompasses 57 probable and confirmed cases of Ebola in the DRC's 10th outbreak since 1976, when the disease was first identified near the DRC's Ebola river. Beni was the scene of a 2016 massacre in which at least 64 people were killed by militants, bringing the toll to over 700 dead since October 2014. in North Kivu, health workers are being forced to navigate their response among more than 100 armed groups, and Tedros said that there have been 120 violent incidents since January alone.He said the region was sprinkled with so-called "red zones", or inaccessible areas. -Daily Mail"That environment is really conducive for Ebola ... to transmit freely." "We call on the warring parties for cessation of hostilities, because the virus is dangerous to all. It doesn't choose between this group or that group," according to Ghebreyesus.
A Toxin in Every Household -- Perfluoroalkyl substances (PFAS) have been used in American households since the 1950s, when it was first marketed in Teflon cookware by DuPont. Today, PFAS are added not just to nonstick pans, but also water-resistant clothing, grease-repelling fast food wrappers, stain-proof carpets, and other products. Its unusual resistance to degradation is what makes PFAS so damaging to human health and the environment: decades of study has shown that accumulation of PFAS in the bloodstream can cause various cancers and birth defects. Yet the Trump administration is reluctant to make the dangers of PFAS, and its common use, widely known to the American public. In January, the Trump administration tried to suppress a report about PFAS that was conducted by the Agency for Toxic Substances and Disease Registry (a division of the EPA)—the latest instance of the administration's predilection for scientific censorship. An internal aid stated that public knowledge of PFAS toxicity and its use in consumer goods would create "a public relations disaster." Six months later in June, the ATSDR releasedthe report, which conclusively links PFAS to a host of harmful side effects and recommends lowering the EPA's current non-enforceable risk level to 12 parts per trillion, down from 70 ppt (about the size of a drop of water in an Olympic pool).The report links PFAS exposure to liver toxicity, immune disruption, and developmental problems. In court cases against chemical manufacturers, plaintiffs and medical studies have also linked PFAS in drinking water to kidney cancer, testicular cancer, thyroid disease, ulcerative colitis, pancreatic cancer, and birth defects. "It's an unusual list of chemical effects," says Sonya Lunder, Senior Toxics Policy Advisor at Sierra Club. "It's hard to tie that all together—it's affecting multiple parts of the body in different ways." Exposure to PFAS isn't only limited to household products, and its presence in drinking water has led to intense litigation. Thousands of people who live near manufacturing plants owned by companies such as 3M and DuPont have reported water toxicity levels exponentially higher than the EPA limit, often sourced from storm runoff that seeps from chemical plants into the ground—or, from illegal dumping directly into rivers and creeks.
Plastics: Don’t Microwave, or Place in the Dishwasher --Jerri-lynn Scofield - 4h ago -- I discuss a report issued this month by the American Academy of Pediatrics (AAP) about the health concerns with using plastics, particularly for children. I include a link to the full report, published in the August Pediatrics: Food Additives and Child Health (hereafter, AAP report). For those readers who lack time to read the full report, this press release summarizes its gist: American Academy of Pediatrics Says Some Common Food Additives May Pose Health Risks to Children (hereafter AAP press release.)Currently, the United States permits the use of more than 10,000 additives in foods, for various purposes, including preserving, packaging, or making food look or taste better. Many additives were grandfathered in for approval during the 1950s, and roughly 1,000 additives qualify for a “Generally Recognized as Safe” designation process that doesn’t require U.S. Food and Drug Administration (FDA) approval, according to the AAP press release. Further:“There are critical weaknesses in the current food additives regulatory process, which doesn’t do enough to ensure all chemicals added to foods are safe enough to be part of a family’s diet,” said Dr. Leonardo Trasande, MD, MPP, FAAP, an AAP Council on Environmental Health member and lead author of the policy statement. “As pediatricians, we’re especially concerned about significant gaps in data about the health effects of many of these chemicals on infants and children.”Some additives are placed directly in foods, while other indirect additives creep in during packaging and processing. Plastics fall into the latter category. The report identified six types of additives of most concern, based on rising research. These include pisphenols, such as BPA; phthalates; perfluoroalkyl chemicals (PFCs); perchlorate; artificial food coolers; and nitrates/nitrates. I won’t summarize the health concerns raised by each of those categories; interested readers may find more detail either in the AAP report, or the AAP press release. But problems include abnormal brain development; obesity; autism; attention-deficit/hyperactivity disorder; and limited muscle mass and bone strength.
Humans Are the Unwitting Test Subjects in a Worldwide Experiment on Microplastics -- One of the main problems with plastics is that although we may only need them fleetingly – seconds in the case of microbeads in personal care products, or minutes as in plastic grocery bags – they stick around for hundreds of years. Unfortunately, much of this plastic ends up as environmental pollution. We’ve all seen the gruesome images of a sea turtle killed by a plastic bag, or the array of bottle caps, toothbrush fragments, and other plastic items found in the stomach of an albatross carcass. But what about the tiny microplastics that aren’t as readily visible? Much of the hundreds of millions of tons of plastic waste in our oceans is made up of microplastics. These are defined as plastic beads, fibers or fragments with a diameter of less than five thousand micrometers (μm), equal to one-half centimeter. Nanoplastics are thousands of times tinier, with a diameter of less than 0.1 μm, and are also likely to be widely present. By comparison, a human hair ranges from about 15 to 180 μm across. Some of these microplastics are deliberately engineered like microbeads in a facial scrub. Others result from the break down of larger plastic items. I’m an environmental epidemiologist with a research group that studies exposure to chemicals commonly found in consumer products, including plastics, and how they affect human reproduction and development. Microplastics interest me because they are now turning up everywhere and we know virtually nothing about how they might impact human health. So are these tiny pieces of plastic damaging our bodies? There are numerous types of commonly used plastics with differing structures, properties, and chemical additives to make them stronger, more flexible, more rigid, more resilient to UV, or to prevent microbial growth or the spread of fire. Over the past couple of decades concern has grown over the potential danger to human health posed by unavoidable exposures to plastic additives. Because these substances are not chemically bound to the plastic, they leach from the products in which they are used.Certain chemicals – phthalates, bisphenol A, flame retardants – added to plastics to provide beneficial qualities may in turn disrupt hormones or other important functions following exposure. This could further lead to adverse reproductive and developmental effects or cancer. To date, most of the concerns for human health has focused on these additives in the plastics but not the plastics themselves.Recent studies have r eported on the ecotoxicity of microplastics. They harm microscopic aquatic creatures called zooplankton by becoming embedded after ingestion, and they also adhere to seaweed, fish and eggs that marine animals eat, causing these plastics to move up the food web. Among certain small marine species, microplastics have been shown to reduce growth, hinder reproduction, and shorten the lifespan.
Thailand to Ban Imports of Plastics and E-Waste - Thailand has joined Vietnam and Malaysia in cracking down on the world's trash. Thailand will stop accepting more than 400 types of electronic waste (e-waste), including circuit boards, old TVs and radios, within six months, an environment ministry official told Reuters. The decision was made Wednesday at a meeting chaired by Surasak Kanchanarat, the environment minister. Imports of plastic waste will also be banned in two years, although specific details of the program are not yet known, Reuters reported. Southeast Asian countries have been filling a void left by China, which implemented a strict waste importpolicy earlier this year so it could focus on its own pollution problems. The decision from China—formerly the world's largest importer of waste—left exporting countries scrambling for solutions for their trash. In some U.S. cities, the pile-up has even resulted in recyclables being directly sent to landfills. Thailand announced the ban after accepting massive amounts of e-waste from the U.S., the European Union, Hong Kong, Singapore and Japan, according to DW. While electronic scraps can contain valuable metals such as gold, silver and copper, they can also contain harmful components such as lead, mercury and cadmium. Surasak admitted to The Nation that the ban will impact the country's recycling industry and some business operations. However, he noted, "we need to prioritize good environment and health protection for our citizens before industrial development."
How Sewage Pollution Ends Up In Rivers - Where does human waste mingle with household chemicals, personal hygiene products, pharmaceuticals, and everything else that goes down the drains in American homes and businesses? In sewers. And what can you get when rain, pesticides, fertilizers, automotive chemicals, and trash run off the streets and down the gutters into those very same sewers? Sewage backing up into people’s basements. Sewage spilling onto streets and parks. Sewage pouring into rivers and streams. Each year, more than 860 billion gallons of this vile brew escapes sewer systems across the country. That’s enough to flood all of Pennsylvania ankle-deep. It’s enough for every American to take one bath each week for an entire year. After bursting out of a pipe or manhole cover, this foul slurry pollutes the nearest body of water. Downstream, some of it may be pumped out, treated, and piped into more homes and businesses. From there, it goes back into a sewer system, and the cycle resumes. Untreated human sewage teems with salmonella, hepatitis, dysentery, cryptosporidium, and many other infectious diseases. One hundred years ago, epidemics of these diseases helped limit the life expectancy of a U.S. citizen to about 50 years. Estimates vary for how many people sewage still sickens or kills each year, but they are all large. Germs linger even after the stench of sewage has dispersed. Healthy adults may never realize that yesterday’s swim caused today’s cough, diarrhea, or ear infection. Young children, their grandparents, and people already weakened by illness are more likely to become seriously ill or die. Scientists believe as many as 3.5 million Americans get sick each year after swimming, boating, fishing, or otherwise touching water they thought was safe.
Climate change likely to cause more sewage leaks, McKenna says - CBC News: More than one hundred municipal wastewater systems did not report how much raw sewage overflowed from their pipes in 2017 but Environment Canada is only investigating two of them for violating federal regulations. Environment and Climate Change Canada officials would not comment on the nature of those investigations since they are ongoing, including refusing to say which municipalities are involved or even what specifically the violations were. Data provided to The Canadian Press recently showed over one trillion litres of raw sewage leaked into Canadian waterways between 2013 and 2017, including 215 billion litres in 2017 alone — a 10 per cent increase over 2013. Environment officials attribute most the increase to more systems complying with reporting requirements. However Krystyn Tully, vice-president of the water advocacy organization Swim Drink Fish Canada, says only 159 of the 269 municipal systems that are required to report actually did in 2017. "The compliance is so bad," said Tully. Environment Minister Catherine McKenna says the government isn't specifically looking at ways to improve reporting rates of municipalities but, if there is more to do, the federal government would consider it. McKenna said Tuesday that climate change is expected to bring about more frequent storms, like the flash flood rainfall in Toronto a week ago that left the harbourfront waters covered in debris from the toilets of millions of Toronto residents. "This is a real problem," McKenna said.
Scientists investigating ‘unprecedented’ algae bloom in Lake Superior - The water of Lake Superior along the rocky shoreline of northwestern Wisconsin's Apostle Islands is normally cold, clear and pristine. But late last week, kayakers and other visitors to the popular lakeshore found a scummy algae on Superior's surface. While the bloom has largely dissipated, reports suggest it stretched in patches across a distance of about 50 miles along the shoreline from near Superior, Wis., to the Apostle Islands, said Robert Sterner, who directs the Large Lakes Observatory at the University of Minnesota Duluth. In some places, the algae covered the water in a thin layer of scum the color of pea-green soup. In other areas, the bloom broke up and looked more like flecks of pollen suspended in the water. "They're very noticeable and very unexpected in a place like the deep and cold and generally low-nutrient Lake Superior," Sterner said. Blue-green algae has become a lot more commonplace in recent years in lakes and rivers across the Midwest, including in parts of the Great Lakes. Warming lake temperatures are part of the reason. So is the increase in nutrients like phosphorus and nitrogen running off into water bodies from farmland and cities. Sometimes, the algae can be toxic. In 2014, the city of Toledo, Ohio, had to stop pumping drinking water from Lake Erie for two days because algae blooms had poisoned the water. Researchers don't know yet whether this most recent Lake Superior bloom was toxic. They've sent samples for testing and expect to hear back by the end of the week. Meanwhile, they're trying to figure out why Lake Superior is suddenly experiencing these algae blooms.
Florida Gov. Scott Issues Emergency Order for Toxic Red Tide - Florida Gov. Rick Scott issued an executive order Monday declaring a state of emergency due to the ongoing impacts of red tide in seven southwestern counties.The algae outbreak started nine months ago and has become the state's longest on record since 2006. The red tide has killed scores of marine life, including countless crabs, eels and fish, as well as dozens of manatees, hundreds of endangered sea turtles, potentially a whale shark and 11 bottlenose dolphins.The toxic bloom, which is caused by the Karenia brevis organism, has become a public health concern. Residents along the southwest coast have reported respiratory problems due to winds picking up the aerosolized toxins. People can also become ill after consuming contaminated seafood. Harmful algal blooms can cause about $82 million in economic losses to the seafood, restaurant and tourism industries according to NOAA. Scott's emergency was declared for Collier, Lee, Charlotte, Sarasota, Manatee, Hillsborough and Pinellas counties. Red tide is a natural phenomenon but some have pointed fingers at climate change, as well as mining and agricultural practices that can cause excess nutrients to flush into the waters. Scott, who is battling incumbent Sen. Bill Nelson for the U.S. Senate, has accused Nelson and the federal government for "allowing discharges of tainted water from Lake Okeechobee that have led to ugly, smelly and potentially dangerous algal blooms in places including the state's St. Lucie and Caloosahatchee rivers," the Post wrote.
Florida's gulf coast battles deadly and smelly red tide - Florida this week declared a state of emergency because of a slow-moving natural disaster — red tide.Red tide is toxic algae that have persisted off Florida's Gulf Coast for nearly a year. In recent weeks, the algae bloom has worsened, killing fish, turtles and dolphins and discouraging tourism on some of the state's most beautiful beaches. Scores of dead fish were visible on the shore of Manatee Beach on a recent morning. There was a smell from the fish, but something more — an acrid smell that can make you cough.The culprit is a microscopic organism called Karenia brevis. The algae are found almost exclusively in the Gulf of Mexico and occur naturally. Their reddish blooms were first noted in the Gulf by Spanish explorers in the 1500s. The algae produce a powerful toxin that, in high enough concentrations, can affect marine life and humans. There have been several red tide events in the Gulf over the past 20 years, but Vincent Lovko, a staff scientist at Mote Marine Laboratory in Sarasota, says this one is especially intense. "Right now, we're seeing counts that come into the category of high, which is over a million cells per liter. And that's pretty much all up and down the coast. There's somewhere between 100 and 150 miles of shoreline being covered right now." In Manatee and Sarasota counties, more than 100 tons of dead fish have been removed from the beaches. At Mote Marine Laboratory, biologist Rebeccah Hazelkorn says strandings of marine mammals and sea turtles have spiked recently. "You start to see baitfish wash up, then you see larger fish," she says. "Then you start to see your tarpon and your grouper. Then you start to see your sea turtles and your manatees. And the highest on the food web are the dolphins when it starts affecting those guys." So far, at least 12 dolphins are dead, more than 150 sea turtles, even a 26-foot-long whale shark — all, researchers believe, because of red tide.Another major problem is the aerosol the algae produce — an airborne toxin that can blow miles inland and causes respiratory irritation. "If people have an adverse reaction, we advise them to stay indoors. If they want to, visit the mainland, etc. That's just a matter of waiting it out, waiting for it to move offshore, "
How US Sugar Subsidies Bring A 'Red Tide' Of Algae To Florida's Shores - ABC News reports that “Toxic red tide blooms are creeping up Florida's west coast, killing marine life and irritating humans.” The red (or maroonish) tide is truly a nasty problem that I have experienced first-hand in the form of a ruined vacation. It is a potentially toxic algae to wildlife when it occurs in high concentrations. The Karenia brevis algae can be a threat to fish, birds, and even manatee. At least 92 manatees have been killed so far and at least one whale shark! This creates conditions at the beach of discolored water, dead fish, and a horrible smell. Tourists are adversely affected as well as local businesses. The algae are a natural phenomenon that has been known of for almost two centuries. However, the harmful “blooms” have occurred much more often and in more places in recent decades. More recently, it has been plaguing southwest Florida beaches since November 2017 and is now particularly bad over a larger area. The Red Tide starts as natural growth of the “bad algae” dozens of miles off shore near the continental shelf. That algae can then drift toward shore and enter brackish water inlets. The blooms are not stimulated in open circulating waters. However, they are stimulated to grow and get bigger in the presence of manmade nutrients, such as fertilizers that have run into water sources from agricultural production all over the Gulf of Mexico.In contrast, if the water in the Gulf is circulating well, then it brings more natural nutrients to the coastline. These nutrients feed other types of green “good algae” which keeps the Red Tide in check. In other words, mother nature can keep the problem in check.However, when water circulation is down and fertilizer runoff is in play, you have a problem. A multi-billion-dollar problem.Though other factors play a role in the algae bloom crises, one of the most significant involves the sugar industry. A combination of federal sugar subsidies, federal regulations on pollution, and federal control of Lake Okeechobee (a giant lake in southern Florida) runoff guidelines has created a recipe for disaster. The federal sugar subsidy prevents Americans from buying sugar from Cuba and other sources. This means that we have to produce our own sugar and that we pay the world’s highest price for sugar. It also means that we grow sugar and sugar substitutes in a high-cost fashion using a lot of fertilizer! According to ABC News: Once the red tide is inshore, the algae can grow even more using man-made nutrients, such as fertilizer. "The increase in runoff may likely exacerbate an existing bloom,"
How climate change is making ‘red tide’ algal blooms even worse - Red tide is killing Florida’s southwest coast. Fish, manatees, sea turtles — some of them endangered — and nine dolphins have washed up dead on the beaches, and all of them are confirmed or suspected to have been poisoned by the algal bloom. The body of a young whale shark was found on a beach in late July, and biologists believe that it was the first known whale shark to have been killed by red tide.Now the toxic algae — Karenia brevis — is working up the coast from Sanibel Island to Tampa Bay. Respiratory irritation in humans has been reported as far north as Manatee County, just south of Tampa Bay, where high concentrations of the algae were measured last week. The water off Pinellas County — Clearwater, Largo, St. Petersburg — had elevated concentrations of red tide beyond a normal “background” state for the first time this month.Florida Gov. Rick Scott declared a state of emergency for seven counties on the southwest coast Tuesday. Algal blooms are common in Florida and along the rest of the Gulf Coast, but they don’t always get this bad. This one began in 2017 and, over the past few months, has slowly ballooned into a nightmare scenario for residents and business owners — not to mention the thousands of animals that have died.There are several ways human activity can exacerbate a bloom, but the main culprit is allowing nitrogen-rich material such as fertilizer to run off into natural water sources. The same fertilizer that helps sugar cane, tomatoes and corn grow in the Sunshine State feeds algae when it reaches the ocean. Humans are also playing a role by driving up global temperatures via greenhouse gas emissions. In a letter published by the journal Environmental Science & Technology, researchers at the University of Florida and the University of North Carolina said that “climate change will severely affect our ability to control blooms, and in some cases could make it near impossible.” K. brevis — the algae affecting Florida — has an interesting response to rising temperature. It thrives in water temperatures up to about 83 degrees, but if it gets much warmer than that, the algae doesn’t grow as quickly. However, researchers have found that K. brevis can tolerate higher temperatures and grow faster given more carbon dioxide. Atmospheric carbon dioxide surpassed a concentration of 400 parts per million in 2015 and will continue to rise as society burns more fossil fuel.
Nearly 10K people have gotten cancer from toxic 9/11 dust - The city is approaching a terrible milestone — nearly 10,000 people have suffered cancers linked to the toxic dust and smoke at Ground Zero, The Post has learned. With the 17th anniversary of the Sept. 11, 2001 terror attacks a month away, the federal World Trade Center Health Program has counted 9,795 first responders, downtown workers, residents, students and others with cancer deemed 9/11-related. In all, more than 1,700 responders and others affected have died, including 420 of those stricken with cancer, officials said. “9/11 is still killing,” said John Feal, an advocate for WTC responders. “Sadly, this fragile community of heroes and survivors is shrinking by the day.” The number of cancer patients has rapidly risen since the federal program started tracking the disease in 2013. “We get these referrals 15 to 20 times a week,” said Dr. Michael Crane, medical director of the WTC Health Program at Mount Sinai Hospital. The increase is not surprising. Cancers have various latency periods, typically emerging years after exposure to harmful substances. In addition, the average age of Ground Zero workers and others affected has risen from 38 to 55. Some are in their 70s. “In an aging population, you’re going to see a rising cancer rate, no matter what,” Crane said. But epidemiology studies have confirmed that 9/11 rescue and recovery workers have significantly higher rates of thyroid cancer and skin melanoma, which is potentially fatal, than found in the general population, and face a higher risk of bladder cancer. Non-responders have had significantly higher rates of breast cancer and non-Hodgkin’s lymphoma. Cancers raising red flags include leukemia and other blood-cell disorders, Crane said. The growing tally of lost 9/11 heroes include FDNY Firefighter John McNamara, who died of colon cancer at age 44; veteran Firefighter Ray Pfeifer, 59, and John McKee, 49, a top CUNY official who joined the search-and-rescue efforts. The living cancer victims face an ongoing struggle.
A Day of “Reckoning” for Monsanto -- It was a blistering closing argument: In concluding the world’s first-ever court case against Monsanto Company over claims its Roundup herbicide causes cancer, attorney Brent Wisner asked jurors to deliver a message so powerful that Monsanto would have to be called to change. "Every single cancer risk that has been found has this moment, every single one, where the science finally caught up, where they couldn’t bury it anymore,” Wisner told the jury of seven men and five women. “This is the day Monsanto is finally held accountable.” He implored them to return a verdict that said, “Monsanto, no more.” The jurors hearing the case in San Francisco Superior Court held the power to return a verdict “that actually changes the world,” Wisner told them. It is unclear at this point if the jury verdict—$289.25 million, which includes the staggering sum of $250 million in punitive damages—will significantly change the widespread global use of glyphosate. Still, glyphosate-based herbicides like Roundup are facing increasing questions both about their impact on human health,and what damage they might be doing to the environment. The verdict handed down August 10 was on behalf of just one individual: school groundskeeper Dewayne “Lee” Johnson, who is dying of non-Hodgkin lymphoma (NHL) he claimed resulted from exposure to Monsanto’s herbicide. But with roughly 4,000 additional plaintiffs with similar cancer-claim lawsuits pending, Monsanto could be facing a tsunami of litigation that could persist for many years and amount to billions of dollars in damage awards to cancer victims and their families. Discovery documents obtained from within Monsanto’s once-secret files in connection with the litigation have fueled outrage at not just the evidence of harm but also of the deceptive tactics Monsanto and chemical industry allies have employed to suppress such evidence. Shortly before the verdict, a federal judge in Brazil ruled that new products containing glyphosate could not be registered in the country and existing registrations would be suspended. And in Germany, home to Monsanto’s new parent company, Bayer AG, the environment minister called for the use of glyphosate-based herbicides to be phased out within three years.
Roundup for Breakfast? Weed Killer Found in Kids’ Cereals, Other Oat-Based Foods - Popular oat cereals, oatmeal, granola and snack bars come with a hefty dose of the weed-killing poison in Monsanto's Roundup, according to independent laboratory tests commissioned by the Environmental Working Group (EWG).These new findings come days after a California jury awarded $289 million to a school groundskeeper who claimed Roundup gave him lymphoma.EWG's tests found glyphosate, the active ingredient in Roundup, in all but two of 45 samples of products made with conventionally grown oats. More than two thirds of the samples had glyphosate levels above what EWG scientists consider protective of children's health with an adequate margin of safety.Glyphosate has been linked to cancer by California state scientists and the World Health Organization. The California case that ended Friday was the first of reportedly thousands of lawsuits against Monsanto. These suits have been brought by farm workers and others who allege that they developed cancer from years of exposure to Roundup. "I grew up eating Cheerios and Quaker Oats long before they were tainted with glyphosate," said EWG President Ken Cook. "No one wants to eat a weed killer for breakfast, and no one should have to do so." "We will petition the Environmental Protection Agency to do its job and end uses of glyphosate that resulted in the contamination we report today," Cook said. "But we very much doubt our petition will be acted upon by President Trump's lawless EPA. So we're calling on the companies to make these iconic products with clean ingredients."
Weed-Killing Carcinogen Glyphosate Found In Children's Foods - The known carcinogen and infamous weed killing chemical glyphosate has just been found in breakfast foods marketed for children. A new study has discovered trace amounts of the most widely used herbicide in the country in oats, granolas, and snack bars. Concern over glyphosate has continued to grow in the United States in recent years. Although the chemical may be safe in some amounts to spray on weeds if certain safety precautions are taken, it is probably a lot more dangerous if it’s ingested by a child. Most disturbing, however, is the fact that thirty-one out of 45 tested products had levels of glyphosate that were higher than what many scientists consider safe for children.The study, which was conducted by the non-profit Environmental Working Group (EWG) found that many of the breakfast foods marketed to children contain glyphosate. “I was shocked,” said Dr. Jennifer Lowry, who heads the Council on Environmental Health for the American Academy of Pediatrics. Although not much is known about the effects of the chemical on children, parents and doctors are concerned. “We don’t know a lot about the effects of glyphosate on children,” Lowry said. “And essentially we’re just throwing it at them.”“We’re very concerned that consumers are eating more glyphosate than they know,” said Scott Faber, vice president of government affairs at EWG, according to CBS News. Faber has been working to improve food safety standards for more than a decade. He said he and his team at EWG conducted the study which included a lab test involving “45 samples of products made with conventionally grown oats.” The researchers found glyphosate, which is the active ingredient in the Monsanto weed-killer Roundup, in all but two of the products.EWG used it’s own very stringent standards of safe levels of glyphosate when testing the products, which should also be noted. Because of that, in response to EWG’s study, Monsanto said, “even at the highest level reported… an adult would have to eat 118 pounds of the food item every day for the rest of their life in order to reach the EPA’s limit” for glyphosate residues. Just last week, in fact, a jury in California ordered Monsanto to pay one man $289 million in damages after his lawsuit claimed the company’s weedkillers caused his cancer. EWG’s Faber is skeptical of EPA’s glyphosate limits.The World Health Organization says glyphosate is a “probable carcinogen,” and California lists it as a chemical “known to the state to cause cancer.” Monsanto continues to dispute the claim that the chemical is carcinogenic, saying in a statement, “glyphosate does not cause cancer” and “has a more than 40-year history of safe use.” As the debate over glyphosate’s safety continues, it isn’t likely to see tests on the stuff cease anytime soon. And Faber isn’t the only person concerned over its possible carcinogenic effects. “It is time now for them to step up and do their jobs to ban glyphosate,” said Zen Honeycutt, who heads Moms Across America, a group formed to raise awareness about toxic exposures. “We want to trust that what is in the grocery store is safe and the shocking reality is that in many cases it’s not,” Honeycutt said.
Bayer Shares Crash Most On Record After Monsanto Cancer Trial Loss - Bayer AG shares are down over 12% this morning - the biggest drop ever - to the lowest levels since October 2013, amid investor anxiety over the potential future legal costs associated with newly-acquired Monsanto's RoundUp weedkiller. As we detailed Friday, a San Francisco Jury awarded $289 million in damages to a former school groundskeeper, Dewayne Johnson, who said Monsanto's Roundup weedkiller gave him terminal cancer.The trial was an important test of the evidence against Monsanto and will serve as a template for litigating thousands of other claims over the herbicide.As Bloomberg reports, the verdict surprised Bayer investors and may stir up memories of the scandal over cholesterol-lowering pill Lipobay, said Markus Mayer, an analyst with Baader Bank AG. Bayer paid more than $1.1 billion to settle suits over the heart drug.“Investors might worry that this will become a ‘Lipobay 2.0,’” Mayer said.The company, whose market value fell by more than 10 billion euros ($11.4 billion) Monday, says Roundup is safe.“They’re going to appeal, and we’re going to have to see what happens then,” said Ulrich Huwald, an analyst with Warburg Research in Hamburg. Even if Bayer doesn’t face similar verdicts in other cases, the company may need to pay out settlements. “As the northern Germans say, ‘In court and on the high seas, you’re in God’s hands.’” Bayer closed a deal to buy Monsanto for $66 billion in June. If the litigation generates large verdicts, it could have a material impact on Bayer’s bottom line, said Chris Perrella, an analyst for Bloomberg Intelligence.
Britain's Biggest Home Improvement Chain May Dump Monsanto's "Roundup" After Cancer Lawsuit -- One of the UK's largest home improvement chains, Homebase, is considering dropping Monsanto's Roundup line of weedkiller products amid growing concern over their use, after a California jury awarded dying former school groundskeeper Dewayne Johnson $289 million in damages in a lawsuit alleging Roundup caused his advanced stage cancer. The manufacturer of the weedkiller, Monsanto, has insisted that British consumers are safe to continue using Roundup products, which are widely sold at DIY stores and used by British farmers. But a spokesperson for Homebase said it would be reviewing its product range after the ruling in California.A spokesperson for B&Q said it had already been undertaking a broader review of all garden products in an attempt to manage the range responsibly. -The GuardianJohnson, a 46-year-old father of two sued the agrochemical giant, claiming his non-Hodgkins lymphoma was triggered by Roundup and Ranger Pro, a similar glyphosate herbicide that he applied up to 30 times per year. In finding for the Johnson, who has months to live, the jury found that Monsanto had "acted with malice or oppression," and should have known the weedkiller was a danger. In 2007, California added Roundup to a list of cancer-causing herbicides, requiring Monsanto to add a warning label to their packaging.
Monsanto Cancer Ruling Sparks Backlash Around the Globe -- Glyphosate, the world's most popular herbicide, is at the center of international scrutiny after a San Francisco court on Friday decided in favor of a California school groundskeeper with terminal cancer.The jury ruled that the plaintiff, Dewayne "Lee" Johnson, developed cancer from repeated exposure toRoundup, Monsanto's widely used glyphosate-based weedkiller, and ordered the company to pay $289 million in damages. The landmark jury ruling, which could open the door for roughly 4,000 similar U.S. lawsuits against Monsanto, sparked outcry around the world. Germany's Bayer, which purchased Monsanto this year for $63 billion, also purchased a potential mountain of legal costs. Shareholders are certainly spooked. Bayer's stock tumbled as much as 14 percent on Monday, losing about 12 billion euros ($14 billion) in market value, Reuters reported. Glyphosate, the most-used herbicide in the European Union, has been the subject of fierce debate in Europe for years. Last year, the European Commission extended its license for five years, but the ruling in San Francisco has reinvigorated calls for a ban. "We must fight the invasion of this substance in our market, a threat that exists due to monstrous commercial agreements signed only in the name of profit," Italy's Deputy Prime Minister Luigi Di Maio wrote on Facebook over the weekend. France's Environment Minister Nicolas Hulot described the verdict as the "beginning of a war" against glyphosate in Europe. "If we wait, such poisons will not be prevented from doing their damage and the victims will be excessively numerous," he said to BFM radio.
Top Seed Companies Urge EPA to Limit Dicamba -- Two of the nation's largest independent seed sellers, Beck's Hybrids and Stine Seed, are urging the U.S. Environmental Protection Agency (EPA) to place limits on the spraying of the drift-prone pesticide dicamba,Reuters reported. This could potentially hurt Monsanto, which along with DowDupont and BASF SE, makes dicamba formulations to use on Monsanto's Xtend seeds that are genetically engineered to resist applications of the weedkiller. Beck's Hybrids and Stine Seed, as well as other companies, sell those seeds. The push from the two companies comes after a University of Missouri report in July that estimated 1.1 million acres of non-resistant soybeans have been accidentally damaged by dicamba this year so far. Off-target damage has also been reported on other agricultural crops, trees and plants. In 2017, the highly volatile chemical damaged a reported 3.6 million acres of crops, according to the University of Missouri. Crop injuries have surfaced despite efforts from the EPA and many states that have introduced restrictions to prevent off-target dicamba damage. "I've been doing this for 50 years and we've never had anything be as damaging as this dicamba situation," Stine Seed founder and CEO Harry Stine told Reuters. "In this case, Monsanto made an error." Monsanto, which was purchased for $63 billion by German chemicals and pharmaceuticals giant Bayer, has been sharply criticized for selling its dicamba-tolerant Xtend seeds before securing EPA approval for the herbicide designed to go along with it. Monsanto developed the Xtend system to address superweeds that have grown resistant to glyphosate, the main ingredient in Roundup. In a June 27 letter to the EPA, Beck's urged the EPA to modify the current dicamba label on Xtend crops to only allow usage as a pre-plant option and disallow in-season applications. The companies have said their products can be safely used with proper training and if farmers adhere to label instructions. But in a Beck's poll of 690 farmers, only 22.6 percent said the label should be kept the way it currently reads, according to a Aug. 10 statement from Beck's CEO Sonny Beck and President Scott Beck.
Ninth Circuit Orders EPA to Ban Chlorpyrifos Pesticide - Jerri-lynn Scofield - By a 2-1 vote, a three-judge panel of the United States Court of Appeals for the Ninth Circuit ordered the Environmental Protection Agency (EPA) on Thursday to bar within 60 days chlorpyrifos, a pesticide linked to developmental disabilities in children, and nervous system damage to adults and animals.Environmental and other public interest groups have sought a ban for more than a decade. The New York Times reports in Court Orders E.P.A. to Ban Chlorpyrifos, Pesticide Tied to Children’s Health Problems: The product is used in more than 50 fruit, nut, cereal and vegetable crops including apples, almonds, oranges and broccoli, with more than 640,000 acres treated in California alone in 2016, the most recent year data is available. Dow Chemical Co. created chlorpyrifos in the 1960s. Currently, it’s one of the most widely used agricultural pesticides in the United States. Each year, Dow AgroSciences sells about 5 million pounds domestically, according to CBS in Appeals court orders EPA to ban sales of widely-used farm pesticide chlorpyrifos. It’s difficult to avoid exposure to this chemical if you’ve spent significant time in the United States. Judge Jed S. Rakoff wrote the opinion in Lulac v. Wheeler. Now, regular readers may recall the name of Judge Rakoff. He’s a securities law expert, and Yves has noted he’s known for his failure to rubber-stamp SEC settlements he didn’t deem fair. The sharp-eyed might wonder why Rakoff, who is a senior federal judge of the southern district of New York– which falls within the Second Circuit– was writing a Ninth Circuit appellate opinion. Answer, he was sitting “by designation.” A statute, specifically 28 U.S. Code § 292 (d), provides for the Chief Justice [of the United States] to designate and assign temporarily a district judge of one circuit for service in another circuit, either in a district court or court of appeals, whereas 28 U.S. Code § 294 (d) grants the Chief Justice similar authority for retired judges; If you read press coverage, this decision is being touted as a setback to the Trump environmental agenda. Yet part of the reason chlorpyrifos wasn’t banned more than a decade ago is that those in control at the EPA long before Trump took office didn’t actually get around to implementing a ban– although they were aware of the issue and certainly gave it a sustained look see. In 2007 (no typo), a Petition was filed by the Pesticide Action Network (PAN) and the Natural Resources Defense Council (NRDC) asking the EPA to revoke tolerances for the pesticide chlorpyrifos. In plain English,that means, to ban the susbstance from agricultural use (it had already been banned for household use.)
Pesticide Touted as Neonicotinoid Replacement Still Harms Bees - As evidence builds that neonicotinoids harm bees and other pollinators and bodies like the EU move to banthem, the agricultural sector is casting about for something to replace what is currently the most-used type of insecticide worldwide.But a study published in Nature Wednesday serves as a warning that any new pesticides must be properly vetted.The study tested the effects of a Sulfoximine-based pesticide called sulfoxaflor on bumblebee colonies and found that exposure to the pesticide reduced the number of workers in the colony and the number of offspring the colony eventually produced."Our results show that sulfoxaflor can have a negative impact on the reproductive output of bumblebee colonies under certain conditions," study author and Royal Holloway, University of London researcher Harry Siviter told BBC News.Sulfoximine-based pesticides have been seen as a possible successor to neonicotinoids. They work by disrupting an insect's nervous system and have been approved by regulatory bodies in China, Canada and Australia but not yet in the UK, where the research took place.The U.S. Environmental Protection Agency (EPA) approved sulfoxaflor during the Obama administration with new restrictions to protect bees after a court decision had vacated an earlier, more lenient approval. The insecticide cannot be sprayed on plants that attract bees until blooming is finished, it is prohibited entirely on a select number of blooming plants and it cannot be used on any plants grown for seed. The researchers hope their findings will encourage governments to test the non-lethal impacts of new pesticides on bees and other pollinators before approving them.
Environmentally-Caused Disease Crisis? Pesticide Damage to DNA Found 'Programmed' Into Future Generations - When Dr. Paul Winchester, a pediatrician, moved to Indiana from Colorado in 2002, he noticed something disturbing—a high number of birth defects. "I was used to the number of birth defects I should see in a community hospital, and I saw many more in Indiana," said Winchester, who is medical director of the Neonatal and Intensive Care Unit at St. Francis Hospital in Indianapolis.Winchester decided to investigate the reason for the higher numbers of birth defects. His research zeroed in on the herbicide atrazine, one of the most widely used herbicides in the U.S. and the most commonly detected pesticide in U.S. drinking water. Winchester and several other researchers including Michael Skinner, professor of biology at Washington State University's Center for Reproductive Biology, conducted a study to see if there was a link between atrazine in drinking water and birth defects. Studies have found that atrazine is an endocrine disruptor, a substance that can alter the human hormonal system. Atrazine was banned by the European Union because of its persistent groundwater contamination.In their study, Winchester and his team found that concentrations of atrazine in drinking water were highest in May and June when farmers sprayed their fields with the herbicide. They also found that birth defects peaked during the same months indicating a close correlation. "We plotted water concentrations and birth defects, and they fit like a hat," Winchester said. Their study, which was funded by the Gerber Foundation, was published in 2017 on PLOS One. But the most disturbing finding was that atrazine had epigenetic effects. Epigenetics is the theory that environmental factors, such as diet, lifestyle choices and pesticides can impact the health of people who are exposed to them and also their descendants. Human DNA, according to epigenetics, is not unchangeable; it can be altered by such environmental factors. Epigenetic changes can be imprinted on the DNA of a fetus during pregnancy according to Winchester. "If it is fixed then, it becomes inheritable and it becomes a trait that you can pass on to the next generation and the next and next."
Study confirms truth behind ‘Darwin’s moth’ -- Scientists have revisited—and confirmed—one of the most famous textbook examples of evolution in action. They showed that differences in the survival of pale and dark forms of the peppered moth (Biston betularia) are explained by how well camouflaged the moths are to birds in clean and polluted woodland. Industrial melanism—the prevalence of darker varieties of animals in polluted areas—and the peppered moth provided a crucial early example supporting Darwin's theory of evolution by natural selection, and has been a battleground between evolutionary biologists and creationists for decades.The common pale form of the moth is camouflaged against lichen growing on tree bark. During the Industrial Revolution—when pollution killed lichen and bark was darkened by soot—a darker-winged form emerged in the UK. Later, clean air legislation reduced soot levels and allowed lichen to recover—causing a resurgence of pale peppered moths.The example has been well supported by many studies, but nobody had ever tested how well camouflaged the moths were to the vision of their key predators—birds—and how their camouflage directly influenced survival. Now scientists at the University of Exeter have shown that, to the vision of birds, pale moths are indeed more camouflaged against lichen-covered trees than dark moths—making pale moths less likely to be eaten by birds in unpolluted woodland and giving them an evolutionary advantage. "Using digital image analysis to simulate bird vision and field experiments in British woodland, we compared how easily birds can see pale and darker moths, and ultimately determine their predation risk.”
Crop-munching armyworm could threaten millions of farmers in Asia - A voracious crop-chomping pest which has wrought havoc in Africa could threaten millions of farmers in Asia, U.N. experts warned on Tuesday, as India battles the continent's first reported infestation of fall armyworm.The pest - a moth which devours crops in the caterpillar stage of its lifecycle - prefers maize but can feed on some 80 crops, including rice, vegetables, groundnuts and cotton."Fall armyworm could have a devastating impact on Asia's maize and rice producers ... This is a threat that we cannot ignore," the Food and Agriculture Organization's (FAO) regional representative Kundhavi Kadiresan said in a statement.The moth can fly 100 km (60 miles) a night and the female can lay up to 1,000 eggs in her lifetime, the FAO said.The Indian Council of Agricultural Research sent out a pest alert on July 30 after fall armyworm was detected in the southwestern state of Karnataka. Indian media reported that the pest was spreading at an alarming rate in the region.The FAO said fall armyworm could threaten millions of small-scale farmers who depend on their crops for food as well as income. Southern China and Southeast Asia are at greatest risk due to their climate, it added.More than 200 million hectares of maize and rice are grown annually in Asia, which produces most of the world's rice, the FAO said. China is the second largest maize-producing country in the world behind the United States.Fall armyworm, which is native to tropical and subtropical regions of the Americas, has spread rapidly across Africa since being detected in West Africa in early 2016.Almost all sub-Saharan countries have reported infestations which have affected millions of hectares of crops and threatened the food security of more than 300 million people, according to the FAO.
US invaded by savage tick that sucks animals dry, spawns without mating -- A vicious species of tick originating from Eastern Asia has invaded the US and is rapidly sweeping the Eastern Seaboard, state and federal officials warn. The tick, the Asian longhorned tick (or Haemaphysalis longicornis), has the potential to transmit an assortment of nasty diseases to humans, including an emerging virus that kills up to 30 percent of victims. So far, the tick hasn’t been found carrying any diseases in the US. It currently poses the largest threat to livestock, pets, and wild animals; the ticks can attack en masse and drain young animals of blood so quickly that they die—an execution method called exsanguination. Key to the tick’s explosive spread and bloody blitzes is that its invasive populations tend to reproduce asexually—that is, without mating. Females drop up to 2,000 eggs over the course of two or three weeks, quickly giving rise to a ravenous army of clones. In one US population studied so far, experts encountered a massive swarm of the ticks in a single paddock, totaling well into the thousands. They speculated that the population might have a ratio of about one male to 400 females. Yesterday, August 7, Maryland became the eighth state to report the presence of the tick. It followed a similar announcement last Friday, August 3, from Pennsylvania. Other affected states include New York, Arkansas, North Carolina, Virginia, and West Virginia. In Asia, the longhorned tick is known to carry a variety of pathogens, including Rickettsia japonica, the bacteria behind Oriental spotted fever, and Theileria orientalis, a parasite that causes cattle theileriosis. It has also been found harboring relatives to pathogens present in the US, including bacteria that cause anaplasmosis and ehrlichiosis, the parasite that causes babesiosis, and the Powassan virus.
Black widow spiders are heading north due to climate change - As climate change warms the earth, black widow spiders are moving north.The spiders are notorious, because venom is 15 times stronger than a rattlesnake’s. A bite can cause aches, pains, and paralysis of the diaphragm which make breathing difficult. In a study published in PLOS One on Wednesday, Canadian researchers reported that over the past 60 years the northernmost point black widow spiders live has moved 31 miles north, into southern Canada. The scientists believe that the spread of the spiders, which prefer a temperate climate, is due to climate change. The team used citizen data to make updated species distribution maps for the spider. “In our project, the citizen science data was essential in modeling distributions of spiders,” Christopher Buddle, a co-author on the study and professor at McGill University, said in a statement. “People who are excited about discovering where species live can contribute in meaningful ways to scientific progress and this is exciting, important, and is changing how we do research.” The scientists hope that this will provide a new way for scientists to study species distribution, especially during a time when so many species are affected by changing climates. This style of collecting information is more efficient and less expensive than sending scientists out into the field and helps the researchers cover more ground. The team also looked at the black purse-web spider and found the similar results as the black widow. The new maps are considered the first reliable maps for both species.
Leaking Las Vegas: West's Biggest Reservoir Nears Critical Threshold - Lake Mead - the West's largest reservoir - is running dry again and is on track to fall below a critical threshold in 2020, according to a new forecast by the Bureau of Reclamation. In 2016, Lake Mead water levels drop to new record lows (since it was filled in the 1930s) leaving Las Vegas facing existential threats unless something is done. Las Vegas and its 2 million residents and 40 million tourists a year get almost all their drinking water from the Lake and at levels below 1075ft, the Interior Department will be forced to declare a "shortage," which will lead to significant cutbacks for Arizona and Nevada.And now, two years later, the situation appears to be getting worse as The Wall Street Journal reports, in a prediction released Wednesday, the Bureau of Reclamation, a multistate agency that manages water and power in the West, said there is a 52% probability that water levels will fall below a threshold of 1,075 feet elevation by 2020. Source “The very big concern is the perception that water supplies are uncertain,” said Todd Reeve, chief executive officer of Business for Water Stewardship, a nonprofit group in Portland, Ore., that works with businesses on water use nationally.“So if a water shortage is declared, that would be a huge shot across the bow that, wow, water supplies could be uncertain.”The Colorado River, which supplies water to 40 million people from Denver to Los Angeles, has been in long-term decline amid what bureau officials call the driest 19-year period in recorded history.Lake Mead, which serves as the biggest reservoir of the river’s water, resumed its decline this year after the region returned to drought conditions. As of Wednesday, it stood at 1,078 feet, about 150 feet below its peak.If Lake Mead’s water levels fall below the 1,075 feet threshold, it could trigger the first ever federal shortage declaration on the Colorado River - which experts say could undermine the Southwest’s economy.
Germany's grains crop lowest in 24 years after drought - Germany’s 2018 grain harvest will be the lowest in 24 years after a drought and heatwave heavily damaged crops, the association of German farm cooperatives DRV said on Wednesday. The grain crop will fall 20.3 percent to some 36.3 million tonnes, the smallest since 1994, the association said in a harvest report. "The German grain harvest will in this year for the first time in many years be below domestic requirements," the association said, signalling an import need in Germany which is usually a major grain exporter. Germany is among several north European countries which have suffered widespread damage to this summer’s harvest from drought and heatwave, with Germany recording the highest July temperatures since 1881. EU wheat prices surged to 5-1/2 year highs last week on fears crop damage will reduce supplies in coming months. Germany is the European Union's second grain producer after France, and in most years the EU’s largest producer of rapeseed, Europe's main oilseed for edible oil. Among the worst crops hit in Germany is the grain maize (corn) harvest which will fall 49.4 percent to 2.30 million tonnes, the association said. Many farmers are using grain maize for on-farm animal feed instead of selling the crop, it said. Germany’s 2018 winter wheat crop will fall 19.9 percent to 19.2 million tonnes. The wheat crop of all types will fall 18.6 percent to 19.9 million tonnes. Germany’s farming union DBV, a separate organisation, had on Aug. 1 forecast that the country’s winter wheat harvest will fall around 25 percent on 2017 to about 18 million tonnes. The overall wheat supplies on global markets are good and no shortages are expected in Germany, the cooperatives association said. France's farm ministry on Tuesday sharply cut its estimate of this year's soft wheat harvest while forecasting a steep fall in maize production, underlining the impact of severe weather that has damaged farmland across Europe. The German cooperatives also forecast Germany’s 2018 winter rapeseed crop will fall 18.6 percent on the year to 3.47 million tonnes. Harvesting of grains and rapeseed in Germany is mostly finished, it said. The winter barley crop, used mostly for animal feed, will fall 18.1 percent on the year to 7.38 million tonnes.
Red Cross warns of food crisis in North Korea as crops fail in heat (Reuters) - A heat wave in North Korea has led to rice, maize and other crops withering in the fields, "with potentially catastrophic effects", the International Federation of Red Cross and Red Crescent Societies (IFRC) said on Friday. The world's largest disaster relief network warned of a risk of a "full-blown food security crisis" in the isolated country, where a famine in the mid-1990s killed up to three million people. It said the worrying situation had been exacerbated by international sanctions imposed due to North Korea's nuclear and missile programmes. In a statement issued in Geneva, the IFRC said there had been no rainfall since early July as temperatures soared to an average 39 Celsius (102 Fahrenheit) across the country, whose official name is the Democratic People's Republic of Korea (DPRK). The next rain was expected in mid-August. The population of 25 million is already stressed and vulnerable with malnutrition among children that could worsen, stunting their growth, it said. "This is not yet classified as a drought, but rice, maize and other crops are already withering in the fields, with potentially catastrophic effects for the people of DPRK," said Joseph Muyamboit, the IFRC's programme manager in Pyongyang. "We cannot and must not let this situation become a full-blown food security crisis. We know that previous serious dry spells have disrupted the food supply to a point where it has caused serious health problems and malnutrition across the country." North Korea called last week for an "all-out battle" against the record temperatures threatening crops, referring to an "unprecedented natural disaster". Drought and floods have long been a seasonal threat in North Korea, which lacks irrigation systems and other infrastructure to ward off natural disasters. In Seoul, South Korea's Unification Ministry said it had no specific information on the situation in the north, but that the Red Cross had notified them of the heat wave last week.
Floods to farmer suicides: for Pakistan and India, real threat is the weather - One of the first things that Pakistan’s Prime Minister-elect Imran Khan wants to implement when he takes office this week is an unprecedented reforestation drive – planting 10 billion trees to reverse the effect of extreme weather crippling the country. He has already announced plans to revive his “Billion Tree Tsunami” dream project that forested 350,000 hectares in the northwestern Khyber Pakhtunkhwa territory between 2014 and 2017, when Khan led the canopy call to build a green armour against incessant flooding, extreme temperatures, prolonged droughts and unpredictable rainfall in many parts of Pakistan. What will Pakistan’s new leader Imran Khan deliver for China? Khan’s decision to deal with the ecological disaster head on – way before attending to the festering political issues of Kashmir or terrorism – is grounded in alarming projections by his ministry of climate change that estimates extreme weather will cost Pakistan up to US$14 billion every year, besides hundreds of lives and millions of livelihoods. Pakistan has been scalding under an intense heatwave followed by a season of erratic rainfall. The country’s southern city Nawabshah burned at 50.2 degrees Celsius (122.4 degrees Fahrenheit) this summer, making for the hottest April day ever recorded in the history of the planet. Surging temperatures have spawned new glacial lakes in the remote mountain valleys. Of the 3,000 glacial lakes in the high reaches of northern Pakistan, 52 could burst anytime, according to the government, resulting in large-scale flooding sweeping away hundreds of thousands of mountain dwellers, their homes and agricultural lands. These weather extremes have become the new normal for much of South Asia, home to a fifth of the world’s population. Last year, the region saw more than 1,400 people succumbing to extreme heat alone.
With Palm Oil Expansion, India is Blazing a Trail to a Parched Future - India has had a long experience with cash crops. These include sugarcane, rubber, cashew, tea and coffee, coconut etc., all grown with the intention of increasing the farmer’s income. The most recent one, palm oil, though also linked to the country’s economy, has a certain national fervour attached to it – it is to help the nation minimise its foreign currency expenditure. India is the largest palm oil (Elaeis guineensis) importer today, spending about $10 billion on it in 2015, even more than it spends on importing gold. Gold is more opulent and visible; palm oil is less obvious, hiding in all our essential commodities like soaps and food products, in much of the street food we consume, even mixed with our other edible oils. As a consequence, the Indian ecological and social footprint in Indonesia and Malaysia, from where it imports its palm oil, is enormous. Worried as we are about saving our foreign exchange, the Union cabinet under Narendra Modi, in April 2017, decided to remove all land ceiling (of 25 hectares (ha)) for the cultivation of palm oil for subsidies, as corporates can get into the venture; the benefits of 100% FDI was an added incentive to lure big-time palm oil giants. All this will happen under the National Mission on Oils and Oil Palm(NMOOP). As palm oil cultivation is not viable unless it is grown in large scale – as is done to disastrous effects in Indonesia and Malaysia – the cabinet also made the provision that: The waste land/degraded land/cultivable land in the oil palm growing states can be given on lease/rent or bought by private entrepreneurs/ cooperative bodies/ joint ventures for oil palm plantation. This last statement, coming from the cabinet, may also sound the death knell of all our commons that can be conveniently listed under this category and handed over to the corporate sector. Rural and tribal people who depend on the commons for a multitude of things essential for their livelihood will be increasingly hemmed in by plantations, adding to the already high level of social unrest.
World's top pork firm shuts China slaughterhouse in race to contain deadly swine fever (Reuters) - China has ordered the world’s top pork producer, WH Group Ltd, to shut a major slaughterhouse as authorities race to stop the spread of deadly African swine fever (ASF) after a second outbreak in the planet’s biggest hog herd in two weeks. The discovery of infected pigs in Zhengzhou city, in central Henan province, about 1,000 km (625 miles) from the first case ever reported in China, pushed pig prices lower on Friday and stirred animal health experts’ fears of fresh outbreaks - as well as food safety concerns among the public. Though often fatal to pigs, with no vaccine available, ASF does not affect humans, according to the United Nations’ Food and Agriculture Organisation (FAO). ASF has been detected in Russia and Eastern Europe as well as Africa, though never before in East Asia, and is one of the most devastating diseases to affect swine herds. It occurs among commercial herds and wild boars, is transmitted by ticks and direct contact between animals, and can also travel via contaminated food, animal feed, and international travelers. WH Group said in a statement that Zhengzhou city authorities had ordered a temporary six-week closure of the slaughterhouse after some 30 hogs died of the highly contagious illness on Thursday. The plant is one of 15 controlled by China’s largest pork processor Henan Shuanghui Investment & Development, a subsidiary of WH Group. Zhengzhou city authorities have banned all movement of pigs and pork products in and out of the affected area for the same six weeks. Shuanghui said in a separate statement on Friday it culled 1,362 pigs at the slaughterhouse after the infection was discovered.
Illegal fishing, harm to Amazon forest linked to tax havens (Reuters) - Scientists called on Monday for greater transparency over the use of tax havens by companies involved in activities that have harmed the world’s oceans and the Amazon rainforest. In a study published in the journal Nature Ecology and Evolution, they said many firms involved in illegal fishing worldwide used tax havens to register their vessels, while investments in farming that has damaged the rainforest often flow via offshore accounts. The study follows the 2015 leak of the Panama Papers, which showed how wealthy individuals and companies use offshore schemes to reduce their tax bills. Seventy percent of fishing vessels implicated in illegal, unreported and unregulated catches had been registered at some point in a tax haven, led by Belize and Panama, the scientists wrote in the journal. By contrast, they said, only about four percent of all the fishing vessels registered worldwide are flagged in tax havens. The scientists also cited documents from Brazil’s central bank which showed that almost 70 percent - or $18.4 billion of a total $26.9 billion - of foreign capital invested by major companies in soy and beef farming in Brazil from 2000-2011 had flowed through tax havens.
Zinke said he would never sell public land. But the Interior is considering it. - The Trump administration is proposing to dispose of federal land in Utah that was protected within the Grand Staircase-Escalante National Monument until its boundary was redrawn by the Interior Department earlier this year — despite Interior Secretary Ryan Zinke’s assurance last year that he would not sell public lands. The proposal to possibly sell 1,600 acres came to light Wednesday when the Bureau of Land Management released a plan to manage two national monuments that were dramatically reduced by the administration, Grand Staircase and Bears Ears, which is also in Utah. That would appear to directly contradict what Zinke said at his Senate confirmation hearing: “I am absolutely against transfer or sale of public land.” In a statement to The Washington Post on Thursday, Interior spokeswoman Heather Swift said “the secretary still opposes the sale or transfer of federal land.” Swift said the bureau is legally required to identify federal property suitable for disposal in its land-use planning. Opponents disputed the legal requirement. Under the Federal Land Policy and Management Act, federal land should be retained unless disposing it is in the national interest, said Nada Culver, senior counsel for the Wilderness Society, a nonprofit group. Federal officials only identify land when they actually want to dispose of it, not keep it, Culver said. “That’s the important difference here.” Swift said no decision will be made until a 60-day comment period ends sometime in October and after the comments have been reviewed. Sen. Maria Cantwell (Wash.), the ranking Democrat on the Senate Committee on Energy and Natural Resources, which held Zinke’s confirmation hearing, recalled a second pledge by Zinke to protect taxpayer-owned land. “Secretary Zinke famously said that ‘Not one square inch’ of public land has been sold off under his watch. Now it’s clear he meant to add . . . yet,” Cantwell said in a statement Thursday. “This sell-off is an outrageous betrayal of the public trust and must not be allowed.”
Father and Son Charged With Killing Mother Bear and 'Shrieking' Cubs in Den -- Andrew Renner, 41, and his son Owen, 18 of Palmer, Alaska were charged this week with several felony and misdemeanor crimes after shooting and killing a mother black bear and her two "shrieking" newborn cubs in their den on Esther Island in Prince William in April.The pair did not know the bears were part of an observation program by the U.S. Forest Service and the Alaska Department of Fish and Game. Their den was monitored by motion-activated camera, meaning the killings were caught on video and audio.The younger Renner can even be heard saying, "they'll never be able to link it to us," according to court documents obtained by KTVA.Alaska state troopers reported Wednesday that the video shows the Renners skiing up to the remote den. Owen Renner fires two shots at the denning sow, or mother bear. The elder Renner then kills the "shrieking" newborn bear cubs and discards their bodies away from the den. Two days after the animals were killed, the men returned to the site to pick up their shell casings and to dispose the dead bear cubs. Andrew Renner brought the mother bear's remains to the Fish and Game Department in Palmer and falsely reported that he—not his son—killed the sow near Granite Bay in Prince William Sound. Charging documents in the case, filed by Assistant Attorney General Aaron Peterson, gave more explicit details about the killing:
Radioactive sheep in Australia bolster claim of Israeli nuke test - Radioactive isotopes found in Australian sheep have added credence to the theory that Israel conducted an illegal nuclear test over the Indian Ocean 39 years ago.The findings, published in a new study for Science and Global Security, shed intriguing new light on the mysterious Vela Incident, as it is known, of September 22, 1979.At 12.53am GMT on the date, the US satellite Vela 6911 detected the 'double flash' characteristic of a nuclear explosion in the southern Indian Ocean, near the Prince Edward Islands about halfway between Africa and Antarctica.Advisors to then-President Jimmy Carter rushed to brief him on the incident, and security officials immediately speculated that the event was an Israeli nuclear test conducted in cooperation with apartheid South Africa, Carter wrote in his memoirs. However, an official US government panel convened to study the matter delivered an equivocal finding that downplayed the likelihood of a nuclear explosion. Israel, whose presumed nuclear arsenal is considered an open secret by many, has steadfastly refuse to confirm or deny whether it has a nuclear program.
Rising temperatures are causing soil to dump more carbon dioxide into the air - Nature is breathing. Trees inhale carbon dioxide and store that carbon in their leaves and branches. After they die, microbes in the soil gobble up their carbon-rich leftovers and exhale carbon dioxide back into the air, a process known as respiration. Rising temperatures are causing both processes to go faster. But — in an unexpected new finding — the two aren’t speeding up at the same rate. The microbes are working harder than the plants.The Earth, essentially, is panting. “Soils around the globe are responding to a warming climate, which in turn converts more carbon into carbon dioxide, which enters the atmosphere,” said Ben Bond-Lamberty, a researcher with the Joint Global Change Research Institute, a partnership between the Department of Energy’s Pacific Northwest National Laboratory and the University of Maryland. “Climate change is nudging up the temperature under which soils and ecosystems operate, with effects that are both predictable — such as faster activity — and uncertain — that is, microbial and plant communities might change.” The effect of this growing imbalance not only puts more heat-trapping carbon dioxide into the air, but it also dwindles the strength of the soil as a natural place to store carbon. “It’s highly uncertain how long, and to what degree, the land will continue to function as a robust carbon sink,” said Bond-Lamberty, lead author of a new study in the journal Nature that examines this phenomenon. “But it’s also pretty clear that the terrestrial carbon sink can’t continue indefinitely if the climate continues to change.”
Assessing the U.S. Climate in July 2018 --The July 2018 contiguous U.S. temperature was 75.5°F, 1.9°F above the 20th century average. This tied with 1998 as the 11th warmest July on record. Much-above-average temperatures stretched across the West, Northeast and parts of the South. California had its hottest July and hottest month on record at 79.7°F, surpassing the previous record set in 1931. Near- to below-average temperatures were observed across the central U.S. For the year-to-date, the national temperature was 53.1°F, 1.9°F above average, also the 11th warmest on record. Of note, the last three month-period, May through July, ranked as the warmest such period on record with a national temperature of 70.9°F, 3.4°F above average. This surpassed the previous record of 70.6°F in 1934.The July precipitation total for the contiguous U.S. was 2.80 inches, 0.02 inch above average, and ranked near the middle value in the 124-year period of record. Above-average precipitation was observed for parts of the Southwest, East Coast and Great Plains. Record precipitation fell in parts of the mid-Atlantic where Pennsylvania had its wettest July on record with 176 percent of average precipitation. Below-average precipitation was observed in the Northwest and parts of the northern to central Rockies, Midwest and South. The year-to-date precipitation total for the Lower 48 was 18.65 inches, 0.56 inch above average, ranking near the middle value in the record. See all July U.S. temperature and precipitation maps.
NOAA Lowers Hurricane Season Forecast, Says El Niño Likely on the Way - The nation's hurricane forecasters have some good news about this year's projected Atlantic storm season—though they say coastal residents shouldn't drop their guard just yet. On Thursday, the National Oceanic and Atmospheric Administration downgraded its forecast for the Atlantic hurricane season. Instead of the near- or above-normal season that NOAA projected back in May, they now expect a below-normal year thanks to cool ocean temperatures in parts of the Atlantic and the expected formation of El Niño."What's fascinating is if you look at March of last year and you look at March of this year, the Atlantic in both years looked super similar," said Phil Klotzbach, an atmospheric scientist at Colorado State University who studies hurricanes. But whereas the spring of 2017 created the conditions for a vicious—and deadly and costly—storm season, the opposite has happened this year."Back in May, the models were predicting that the temperatures would warm up maybe to near average," said Gerry Bell, NOAA's lead seasonal hurricane forecaster. That prediction led to an early forecast that saw a 35 percent chance of an above-normal season, with between 10 and 16 named storms and up to four major hurricanes.Instead, the critical part of the Atlantic Ocean off Western Africa where major storms form has stayed cooler than usual. And NOAA is also now projecting a 70 percent chance that El Niño conditions will develop during hurricane season. "The climate models are in good agreement that if it develops, it will be strong enough to suppress the later part of the hurricane season," Bell said.
Climate change has doubled the frequency of ocean heatwaves - Nature - Ocean heatwaves will become more frequent and extreme as the climate warms, scientists report1 on 15 August in Nature. These episodes of intense heat could disrupt marine food webs and reshape biodiversity in the world’s oceans. Scientists analysed satellite-based measurements of sea surface temperature from 1982 to 2016 and found that the frequency of marine heatwaves had doubled. These extreme heat events in the ocean's surface waters can last from days to months and can occur across thousands of kilometres. If average global temperatures increase to 3.5 °C above pre-industrial levels by the end of the century, as researchers currently project, the frequency of ocean heatwaves could increase by a factor of 41. In other words, a one-in-one-hundred-day event at pre-industrial levels of warming could become a one-in-three-day event. “Marine heatwaves have already become more long-lasting, frequent, intense and extensive than in the past,” says lead study author Thomas Frölicher, a climatologist at the University of Bern in Switzerland. He adds that these changes are already well outside what could be expected on the basis of natural swings in Earth’s climate: the study’s analysis determined that 87% of heatwaves in the ocean are the result of human-induced global warming. Scientists have studied heatwaves on land for decades. But it wasn’t until researchers faced episodes of extreme heat in the ocean in the past several years that they started paying more attention to the issue at sea. Those episodes included the massive warm water ‘blob’ in the northeastern Pacific Ocean that killed off sea otters (Enhydra lutris) in Alaska and sea lions (Zalophus californianus) in California, and disrupted fisheries off North America from 2014 to 2015. They also included the massive 2015–16 El Niño that ravaged coral reefs around the world.
Sea life in 'peril' as ocean temperatures hit all-time high in San Diego -- Even the oceans are breaking temperature records in this summer of heatwaves. Off the California coast near San Diego, scientists in early August recorded all-time high seawater temperatures since daily measurements began in 1916. “Just like we have heatwaves on land, we also have heatwaves in the ocean,” said Art Miller of the Scripps Institution of Oceanography. Between 1982 and 2016, the number of “marine heatwaves” roughly doubled, and will probably become more common and intense as the planet warms, a study released on Wednesday found. Prolonged periods of extreme heat in the oceans can damage kelp forests and coral reefs, and harm fish and other marine life. “This trend will only further accelerate with global warming,” said Thomas Frolicher, a climate scientist at the University of Bern in Switzerland, who led the research. Because oceans both absorb and release heat more slowly than air, most marine heatwaves last for at least several days and some for several weeks, said Frolicher. “We knew that average temperatures were rising. What we haven’t focused on before is that the rise in the average comes at you in clumps of very hot days a shock of several days or weeks of very high temperatures,” said Michael Oppenheimer, a Princeton University climate scientist who was not involved in the study. Many sea creatures have evolved to survive within a fairly narrow band of temperatures compared with creatures on land, and even incremental warming can be disruptive. Some free-swimming sea animals may shift their routines, but stationary organisms like coral reefs and kelp forests “are in real peril”,
Costs of Extreme Heat Are Huge, But Hard to Quantify - Climate Liability News - Unlike hurricanes or wildfires that mostly damage property, the costs of blistering heat currently scorching much of the planet are much harder to quantify because the impacts are absorbed primarily by people and not by property. Understanding those costs, however, is crucial for cities and states trying to protect their residents from climate impacts. They are working to calculate the toll of extreme heat, from decreasing outdoor worker productivity, to crop failures, cancelled flights and students’ decreasing ability to learn. Many of the estimates come from cities that have filed climate liability suits, seeking to hold the fossil fuel industry accountable for those costs. New York City, for one, estimates in its complaint that its heat mitigation initiative, Cool Neighborhoods NYC, will cost more than $100 million and it tallies another $100 million in related public health care costs. The Environmental Protection Agency estimates that heat may cost 1.8 labor hours per person across the U.S. workforce by 2100, which equates to $170 billion in lost wages. Millions of Americans have jobs that require outdoor work, which leaves them vulnerable to intense heat. For those fortunate to work and live in air conditioned offices and homes, the costs of keeping them cool will rise as temperatures soar. According to the Energy Information Administration, residential air conditioning accounted for 12 percent of household energy expenses in 2015, an average cost per year of $265. The EIA also calculated that Americans spent more than $27 billion on home cooling in 2015. Another study published in 2017 projected that energy use from air conditioning would rise 2.8 percent by the end of the century, and peak demand during extreme heat would rise 7.2 percent.
Domino effect could heat up Earth by 5 degrees Celsius — despite Paris climate deal -- A joint study by international climate scientists from Germany, Sweden, Denmark and Australia presents a bleak prognosis: Even if the goals of the Paris climate agreement are achieved and global warming is limited to maxiumum 2 degrees Celsius (3.6 degrees Fahrenheit) compared to pre-industrial levels, the climate system could still pass a devastating tipping point."Human emissions of greenhouse gas are not the sole determinant of temperature on Earth," said Will Steffen, lead author of the study and climate researcher at the Australian National University and the Swedish research institute Stockholm Resilience Centre."Our study suggests that human-induced global warming of 2 degrees Celsius may trigger other Earth system processes, often called 'feedbacks,' that can drive further warming — even if we stop emitting greenhouse gases," he said.The global average temperature in such a case would in the long term settle between 4 to 5 degrees warmer compared to pre-industrial levels, their study found.Sea levels would rise 10 to 60 meters (33 to 197 feet), flooding numerous islands and coastal cities such as Venice, New York, Tokyo and Sydney. Such major population centers would have to be abandoned. Scientists call this a "hothouse Earth" climate scenario.In the study published Monday in the Proceedings of the National Academy of Sciences (PNAS), the international research team analyzed the complete climate system of a 2-degree warmer world across several models.Interactions and chain reactions among melting glaciers, thawing permafrost, bacteria in the oceans and weakened carbon sinks were discovered. As a result of these feedback processes and tipping points that lead to abrupt changes in the climate system, forests and permafrost transform themselves from "friends" that store CO2 and other greenhouse gases like methane into "enemies" that uncontrollably release stored emissions into the atmosphere.
Hothouse Earth: Here’s What the Science Actually Does – and Doesn’t – Say -- A new scientific paper proposing a scenario of unstoppable climate change has gone viral, thanks to its evocative description of a "Hothouse Earth." Much of the media coverage suggests that we face an imminent and unavoidable extreme climate catastrophe. But as a climate scientist who has carried out similar research myself, I am aware that this latest work is a lot more nuanced than the headlines imply. So what does the hothouse paper actually say, and how did the authors draw their conclusions? First, it's important to note that the paper is a "perspective" piece—an essay based on knowledge of the scientific literature, rather than new modeling or data analysis. Leading Earth System scientist Will Steffen and his 15 co-authors draw on a diverse set of literature to paint a picture of how a chain of self-reinforcing changes might potentially be initiated, eventually leading to very large climate warming and sea level rise.One example would be the thawing of Arctic permafrost, which releases methane into the atmosphere. As methane is a greenhouse gas, this means the Earth retains more heat, causing more permafrost to thaw, and so on. Other possible self-reinforcing processes include the large-scale die-back of forests, the melting of sea ice, or the loss of ice sheets on land. Steffen and colleagues introduce the term "Hothouse Earth" to emphasize that these extreme conditions would be outside those that have occurred over the past few hundred thousand years, which have been cycles of ice ages with milder periods in between. They also present an alternative scenario of a "Stabilized Earth" where these changes are not triggered, and the climate remains similar to now.The authors make the case that there is a level of global warming which is a critical threshold between these two scenarios. Beyond this point, the Earth System might conceivably become set on a pathway that makes the extreme "hothouse" conditions inevitable in the long term. They argue—or perhaps speculate—that the process of irreversible self-reinforcing changes could in theory start at levels of global warming as low as 2°C above pre-industrial levels, which could be reached around the middle of this century (we are already at around 1°C). They also acknowledge large uncertainty in this estimate, and say that it represents a "risk averse approach". A key point is that, even if the self-perpetuating changes do begin within a few decades, the process would take a long time to fully kick in—centuries or millennia.
The heat is on for 4 more years: Extreme temperatures expected through 2022 - This summer's heat has shattered records around the Northern Hemisphere, from Algeria to Canada and Japan to California. New research suggests this could be only the beginning of a four-year global "warm spell."Using a new forecasting technique, scientists in a study published Tuesday predict that the rest of 2018 through 2022 may be warmer than expected around the world as human-caused global warming and natural factors combine to heat the planet. "The coming warm period is associated with an increased likelihood of intense to extreme temperatures," the study says. Scientists say that although the Earth will be warmer than average overall, it may not be hot everywhere for everyone: "We are not predicting another heat wave – a warmer year doesn't always mean (that)," study lead authorFlorian Sevellec told Deutsche Welle. "That's because the forecast only covers global mean temperatures, not regional temperatures in certain parts of the world." The past four years have been the Earth's four warmest on record (2016, 2017, 2015 and 2014, respectively). Man-caused climate change, aka global warming, is caused by greenhouse gas emissions from the burning of fossil fuels such as coal, oil and gas. Though the overall trend is for rising temperatures, warming does not occur in a straight line and can wobble from year to year. "Global warming is not a smooth, monotonous process," the study says.Scientists say the warming trend appeared to lapse in the early 21st century, a phenomenon known as a global warming "hiatus." The researchers built their forecasting system by statistical "hind-casting," according to The Guardian. This crunches the data from previous climate models to measure which combination was most effective in predicting past temperature trends.
Amidst Rising Heat Waves, UN Says Cooling is a Human Right, Not a Luxury - The rising heat waves in the world’s middle income and poorer nations are threatening the health and prosperity of about 1.1 billion people, including 470 million in rural areas without access to safe food and medicines, and 630 million in hotter, poor urban slums, with little or no cooling to protect them, according to the latest figures released by the United Nations. At least nine countries, with large populations, face “significant cooling risks”, including India, Bangladesh, Brazil, Pakistan, Nigeria, Indonesia, China, Mozambique and Sudan. Rachel Kyte*, Chief Executive Officer (CEO) and Special Representative to the United Nations Secretary-General for Sustainable Energy for All (SEforALL), says that in a world facing continuously rising temperatures, access to cooling is not a luxury. “It’s essential for everyday life. It guarantees safe cold supply chains for fresh produce, safe storage of life-saving vaccines, and safe work and housing conditions.” But rising temperatures – made worse by global warming – is not confined only middle income and poorer nations. In a July 30 piece in the US weekly Time magazine, Justin Worland points out that extreme heat recently melted roads in the UK; hit a record-shattering 120 degrees Fahrenheit in Chino, California; and led more than 70 deaths in Quebec, Canada. “These cases illustrate a vexing paradox for scientists and policy makers: air conditioning keeps people cool and save lives but is also one of the biggest contributors to global warming.” Meanwhile, at one time, there were reports that when middle class families, with rising incomes in India, were able to access TV, air conditioners and refrigerators, there were environmental groups that were critical of this because it would add to global warming. But the middle class argued this was never an issue when the rich and privileged luxuriated with air conditioners and refrigerators as part of essential living.
More than 100 large wildfires in U.S. as new blazes erupt (Reuters) - Six large new wildfires erupted in the United States, pushing the number of major active blazes nationwide to over 100, with more expected to break out sparked by lightning strikes on bone-dry terrain, authorities said on Saturday. More than 30,000 personnel, including firefighters from across the United States and nearly 140 from Australia and New Zealand, were battling the blazes that have consumed more than 1.6 million acres (648,000 hectares), according to the National Interagency Coordination Center. “We are expecting that there will be more fire-starts today,” Jeremy Grams, lead forecaster with the National Weather Service’s Storm Prediction Center in Oklahoma, said in an interview on Saturday. He said dry thunderstorms, which produce lightning but little rain, are expected for parts of the Rocky Mountain region, while the U.S. northwest has critical fire weather conditions that include strong winds and low relative humidity. Firefighters were battling another day of extremely hot temperatures and strong winds on Saturday, the National Interagency Coordination Center said. The fires have scorched states from Washington to New Mexico, with California among the hardest hit. A mechanic helping to fight the Carr Fire near Redding in northern California was killed in a car crash on Thursday, the eighth person to die in that conflagration. The 190,873-acre (77,243-hectare) Carr Fire has destroyed nearly 1,100 homes. About 100 miles (160 km) southwest of the Carr Fire, about 3,500 firefighters are battling the Mendocino Complex Fire, which has burned 328,226 acres (132,828 hectares) as of Saturday and was the largest fire on record in California.
Crews fighting California Holy Fire see containment progress, officials say - Crews battling the flames of the so-called Holy Fire tearing through Southern California are steadily making progress, as containment nearly tripled within a day, officials said Saturday. Although it reached more than 21,000 acres, the blaze is now 29 percent contained, up drastically from just 10 percent on Friday, according to the Twitter account for the Cleveland National Forest (CNF). Several areas in Lake Elsinore also had their evacuation orders lifted Saturday, specifically Horsethief Canyon, Rice Canyon and McVicker Canyon, the agency said. Some road closures remained, however. “The public is asked to use caution when re-entering the affected area,” the CNF’s tweet said. “Heavy equipment and firefighters will continue working in the area. Residents should stay alert and be prepared for changing conditions.” Aircraft have made several flights, dumping water and fire retardant to protect Lake Elsinore and other foothill communities as the flames sweep through the dense, bone-dry brush of the Cleveland National Forest. The Holy Fire began on Monday. Authorities arrested a suspect earlier this week – Forrest Gordon Clark, 51 – he is accused of deliberately starting the fire. He appeared in court on Friday, although his arraignment was postponed, and he called his arson charge a “lie,” The Orange County Register reported. Clark also reportedly made several outbursts and claimed his life was being threatened.
Ranch Fire, one of Mendocino Complex fires, is now largest in state history, Cal Fire says - The Ranch Fire, one of the Mendocino Complex fires, became the largest wildfire in California history on Sunday morning, Cal Fire confirmed. The Ranch Fire scorched 282,479 acres by Sunday morning — bypassing the previous record holder, December’s Thomas Fire, which burned 281,893 acres in Santa Barbara and Ventura counties, according to Lynne Tolmachoff, a Cal Fire spokeswoman. Firefighters saw extreme fire behavior Saturday night, and hot, dry and windy weather conditions continue in the area of the fire, Cal Fire said in its report Sunday morning. Between Saturday morning and Sunday morning, the Ranch Fire burned 6,173 acres, according to Cal Fire.Firefighters plan Sunday to try to contain the northwestern part of the Ranch Fire and will also try to keep the fire from moving west, Cal Fire said. The Ranch Fire is 62 percent contained as of Sunday morning, according to Cal Fire. The River Fire “had no movement,” Saturday night and remains at 48,920 acres with 93 percent containment, Cal Fire said. Last week, the Mendocino Complex fires together became the largest blaze in the state, burning a combined total of 283,800 acres. However, the Ranch Fire is the largest individual fire to break the Thomas Fire’s record. More than 3,000 firefighters are working on the Mendocino Complex fires, which together have burned 331,399 acres as of Sunday morning, according to Cal Fire. No one has died in the fires, which together have injured two firefighters and destroyed more than 200 structures.
‘The president’s right’: Interior chief pushes thinning forests to cut fire risk -- Interior Secretary Ryan Zinke, touring neighborhoods devastated by the Carr Fire, stepped up the Trump administration’s push Sunday to remove more trees from national forests as a means of tamping down fire risks. “We need to manage our forests, we need to reduce the fuels,” Zinke said as he overlooked Whiskeytown Lake in the vicinity where the Carr Fire began July 23. Starting a two-day tour of the Redding area, Zinke also took a shot at environmental groups that he said are standing in the way of aggressive forest management. In some cases, environmental groups have successfully used litigation to block or curtail logging operations on public lands. “The public lands belong to everybody, not just the special interest groups,” he said as he stood in front of a largely destroyed neighborhood in the Keswick Estates area of west Redding. Zinke’s visit came about a week after President Donald Trump enraged environmentalists by suggesting in two tweets that California’s environmental policies had worsened fire hazards by depriving firefighters of water and leaving the forests too dense. Cal Fire officials said they have plenty of water. Zinke seized on the forestry issue, saying, “This is an example, the president’s right. This is an example of we have to actively manage our forests.” Some environmental groups have acknowledged that forests have grown too thick and should be managed with occasional cutting as well as planned or “prescribed” burns when fire risks are low. Gov. Jerry Brown has put more than $90 million of additional forest-management funds into the fiscal 2019 budget, and groups such as the Public Policy Institute of California and the Little Hoover Commission, the state’s in-house think tank, have called for more aggressive forest management. But environmentalists fear the Trump administration is using the horrific 2018 fire season as a way to clear-cut treasured forests. “They’re using the opportunity of fires ... to advance some backward-looking approaches to the environment,” said Kathryn Phillips, director of Sierra Club California, in an interview.
In parts of California blanketed with wildfire smoke, breathing is 'a chore' - At least 17 large fires are burning across California, and dozens more throughout other Western states, destroying hundreds of thousands of acres, sending toxic pollutants into the air and contaminating water supplies. The air quality in certain areas — particularly near California's massive Mendocino Complex Fire in the northern part of the state — is among the worst officials have ever seen. With temperatures at times reaching into the triple digits, unpredictable winds and desiccated brush that serves as kindling, there's no end in sight to this year's fire season. More than 749,770 acres have burned so far this year through early August. The Mendocino Complex Fire quickly overtook last year's Thomas Fire as the largest in California history. And Shasta County's Carr Fire generated a "fire tornado" with winds of 143 mph that ripped through the town of Redding. NASA satellite photos show towers of smoke in California billowing into the atmosphere and blanketing central California. Up and down the state, air quality officials havemarked huge swaths as red with spots of purple — places where air is unhealthy or very unhealthy to breathe. Smoke and ash can travel dozens or even hundreds of miles. Air quality districts around California have issued warnings to stay indoors — with windows shut and the air conditioner running — and to limit outdoor activities. In many places, kids' ball games, riding lessons and summer camps have been cancelled. Children, older people, pregnant women (especially their fetuses) and those with respiratory illnesses such as asthma and COPD are particularly at risk of smoke-related health problems. Fine particulate matter, which is mostly invisible, can lead to inflammation of the lungs.For people with cardiac problems, toxic smoke has been associated with an increased risk of heart attacks, strokes and death, says Dr. Michael Schivo, associate professor of medicine at University of California-Davis. Even otherwise healthy people may experience short-term breathing problems, eye irritation and coughing.
Smoke From California's Wildfires Is Dimming Solar Power Output The smoke billowing from California’s wildfires is dimming output from solar farms.First Solar Inc., which operates more than two gigawatts of solar farms in the state -- that’s equivalent to about two nuclear reactors -- has seen production dip at installations near fires, according to spokesman Steve Krum. The slumps in generation have been “very minimal," he said, likening them to the impact of passing clouds on solar panels. “Reductions have not reached a level of concern,” Krum said. The state’s electric grid operator said the impact from smoke has been too small to differentiate it from cloud cover, which is higher than normal as Southern California enters its annual monsoon season, according to spokesman Steven Greenlee.
Unhealthy smoky air blankets Northwest -— Unhealthy air filled with smoke from wildfires blanketed the Northwest again on Wednesday. Washington state had the worst air quality in the country, according to the National Weather Service. In the central Washington cities of Chelan and Wenatchee the air quality Wednesday reached the hazardous level, prompting Chelan County officials to distribute masks. The smoke reached levels that were unhealthy for everyone in Seattle and nearby areas, the Puget Sound Clean Air Agency said. At Seattle’s Kerry Park which usually offers picture-perfect views visitors were disappointed to find parts of Puget Sound hidden behind the smoke. “In an ideal world, we would want to be able to see Mount Rainier in the background so the haze is basically killing that opportunity, unfortunately,” Aidan Groll of Florida told KING-TV. According to the National Interagency Fire Center, 13 large wildfires have burned more than 211 square miles (546 square kilometers) in Washington state this year, while in Oregon, 10 large fires have scorched over 256 square miles (663 square kilometers) the Seattle Times reported . About 600 wildfires are burning across British Columbia. The Oregon Department of Environmental Quality said Wednesday that the air quality in Portland and Medford was unhealthy. The weather service says cleaner air will begin pushing onshore in the western part of Washington and Oregon on Wednesday night. An air quality alert for eastern Washington and northern Idaho has been extended into Friday morning.
Wildfire Smoke Is Smothering the US—Even Where You Don't Expect It --AMERICA IS ON fire … again. More than a million and a half acres are burning in 15 states, from Arizona to Alaska. More than 3,000 firefighters are working to contain the Mendocino Complex Fire 100 miles north of San Francisco, now the largest in California history, and over the weekend, lightning strikes sparked dozens of new wildfiresacross the state of Washington. Near Mount Shasta, the deadly Carr Fire has so far incinerated 1,077 homes, forced mass evacuations, and killed eight.Putting a few hundred miles between you and combustion country certainly confers some measure of safety. But not as much as you might think. While wildfires are geographically limited by nearby fuel sources, wildfiresmoke goes wherever the wind takes it. Carried on eastward-flowing air currents, dangerous particulate matter from wildfires is increasingly smothering large swathes of the US, causing health scares wherever these air pollution spikes hit. Welcome to the United States of Smoke.“Minnesota actually gets just about the most smoke days of any state in the US, you just don’t notice it,” says Nolan Miller, an economist at the University of Illinois at Urbana-Champaign who studies the deadly health impacts of temperature and weather extremes on the elderly. More than 1,000 people die each year from downwind exposure, according to Nolan’s analysis, which is detailed in a working paper. Smoky days also sent more people to emergency departments and doctor’s offices than on days without smoke, especially folks with cardiovascular or respiratory conditions. “The key message of our research is that the bulk of the health burden of wildfires is not felt by people living really near the fire, but rather, on people hundreds or even thousands of miles away from the source,” says Eric Zou, an economist who led the satellite data analysis.
Glacier is latest US park to be scorched by Western wildfires- A wildfire destroyed structures and forced evacuations Monday from the busiest area of Montana's Glacier National Park. Glacier's Sprague Creek campground was closed and evacuated a day after a fast-moving fire triggered the evacuation of dozens of guests from the historic Lake McDonald Lodge late Sunday. AdvertisementPark officials said structures on the north end of Lake McDonald were lost, but they did not provide details on the number and type. The fire grew to 2 to 4 square miles by Monday afternoon. "It just completely exploded. Yesterday we were watching it grow all day, and now it's so smoky you can't see anything," said Kyersten Siebenaler of Glacier Outfitters, which rents boats in Apgar, a small community at the south end of the lake. The outfitting company was trying to help tourists find places to stay on the east side of the park, where it was not as smoky, Siebenaler said. A second campground, a motel and private residences inside the park's boundary also were evacuated. A 30-mile stretch of the scenic Going-to-the-Sun Road was closed to traffic. The road, with breathtaking views of the park's mountainous interior, is a major draw for tourists. Triple-digit temperatures across parts of the state — paired with lightning from passing thunderstorms — set the stage for several new large fires to take hold in Montana in recent days. Among them was a 3-square-mile fire that triggered an evacuation order for residents of 15 houses southwest of the town of Ennis. The fire was burning in challenging mountain terrain with a mix of pine, fir and spruce trees, said fire information spokesman Dave Sabo. Montana had a slow start to this year's fire season after a record-setting 2017 in which more than 2,400 square miles burned.
Firefighter casualties mount from California wildfires -- Thousands of California firefighters assisted by firefighters from other states continue battling to control and extinguish 12 devastating forest and wild fires.On Monday another firefighter, Matthew Burchett, 42, a member of forces sent in from the state of Utah, was killed at the Ranch Fire, which together with the River Fire form the massive Mendocino Complex fire, in Mendocino and Lake counties in the north central part of the state. These fires have burned over 688,000 acres (1,075 square miles) and damaged or destroyed over 2,000 structures.In all, six firefighters have died on-duty this season in California, officially making 2018 the deadliest in the past decade. Two firefighters, including Burchett, have been killed battling the Mendocino Complex fire and another eleven have been injured. Burchett and five of his comrades from the Draper City Fire Department had arrived from Utah on August 2. He was flown to a hospital, where he died. The exact cause of his death is still under investigation. According to the California Department of Forestry and Fire Protection ( Cal Fire) over 13,800 firefighters are on the front lines, including 2,000 inmates from the state’s prisons who make $1 per hour clearing brush as part of the efforts to stop the fires from spreading. As of this week the Ranch fire remains active and is only about 70 percent contained. It is expected that it will not be contained until September 1. Redding, a bulldozer operator and a Pacific Gas and Electric worker were casualties of the Carr Fire in Shasta County in northern California. That fire has destroyed over one thousand homes and continues to burn. In addition to the firefighters, four residents—including two children and their great grandmother—died in the Redding fire. A Cal Fire mechanic who had been assigned to the Carr Fire died in a vehicle crash in Tehama County, south of Shasta. On July 26, as the Carr Fire moved into the city of Redding, Jeremy Stoke, a fire prevention inspector, was killed as he was assisting residents in the city’s western neighbor’s evacuation. Two more firefighters fell victim to the Ferguson Fire in California’s Sierra and Stanislaus National Forests, which has been burning for over a month. Braden Varney, a Cal Fire heavy-equipment operator, died on July 14 when his bulldozer overturned as he was cutting through the forest to create firebreaks. Two weeks later, Brian Hughes, captain of the Arrowhead Interagency Hotshots, was killed when he was struck by a tree while working with his crew to set a backfire—a tactic designed to limit a fire’s spread—on the east side of the blaze. He died before he could be taken to a hospital.
California's largest fire ever keeps growing -- Residents around Clearlake have been allowed to return home, but new evacuation orders were announced in the last few days for communities to the east and west of Mendocino National Forest, including Stonyford, Lodoga and Potter Valley.That presents another challenge for firefighters. Unlike the Clearlake area, which is fairly accessible by road, these communities are farther into the forest and surrounded by more rugged terrain, said Cary Wright, a Cal Fire spokesman.Wright said the persistent low humidity has allowed the fires to continue growing — by 9,400 acres on Tuesday and 1,300 acres Monday. On Wednesday, firefighters were expecting to get a brief break in the hot weather. Temperatures were expected to drop and humidity levels to increase Wednesday and Thursday, he said. Nighttime humidity rose significantly Tuesday for the first time since the fire started, Wright said.Firefighters count on the drop in temperature and increase in humidity that usually occurs naturally overnight to allow them to make progress. But that hasn’t been happening in Lake County recently. Nighttime humidity levels have consistently been in the teens to 30% range. Tuesday night, the humidity reached 80%.Despite the good news, the fight is far from over. “We’ve had numerous calls from residents, saying, ‘Why is it still smoky?’ or ‘Is there another fire?’” Wright said. Shifting winds blow smoke to different areas at different times, and many people mistakenly think that because they’ve been allowed to return home, the fires aren’t burning anymore, he explained. Firefighters are still struggling with the terrain as the fire approaches Snow Mountain Wilderness. They are using natural and manmade barriers ahead of the fire to the north, and are placing most on-the-ground resources to the east and west where homes are threatened, Wright said. The Mendocino Complex fire has now expanded to four counties — Mendocino, Lake, Glenn and Colusa — Wright said. And as of Aug. 11, the Ranch fire has surpassed last winter’s Thomas fire’s acreage, making it the largest single fire in California history.
How big does the fire need to be? -- J.d. Alt - I have written about this before, but it bears repeating now—and perhaps it bears repeating every week until somebody with more leverage than me picks the message up and carries it a step further: America (and the rest of the world, for that matter) has the resources needed to limit and mitigate the enormous damage and dislocations that climate-change is now beginning to impose. The “resources” I’m referring to are not dollars. They are materiel, labor, and human ingenuity. The only question is how and when we’ll stop simply raising warning flags and marshal those resources to take real action against the growing challenges. To date, virtually nothing concrete has been done, or even started. The reason is because—to date—we insist on imagining that the “money” needed to pay for serious planning, and to begin real actions, must come, directly or indirectly, from tax-payer’s pockets. Virtually by definition, this means the “money” is not available—nor, we should admit, will it ever be. Therefore, since we insist on believing that is where the money must come from, we cannot even begin. There are a multitude of scientists and informed advocates who are now sounding alarm bells about what’s coming down the road, but not a single one of them, unfortunately, can tell an audience how their local, state, or national governments are going to pay for the actions that need to be planned and implemented. Until that changes, we are like the proverbial deer frozen in the headlights of an on-coming tractor-trailer. Fortunately, history has shown us how to get unfrozen. History has shown us that, when necessary, we can easily imagine a money-reality different than what we habitually insist is true: that money can be newly “created” to buy whatever is needed—labor, materiel, human ingenuity—to undertake and accomplish something we all recognize needs to be done for our collective benefit. Whether we “see” this alternative money-reality simply depends, apparently, on how big the fire is. The history lesson I’m specifically referring to is America’s mobilization out of the Great Depression and into World War II. The economy then had essentially collapsed into the Great Depression. The banking system was in a death-spiral as panicking families and businesses were withdrawing their deposits for cash dollars—then redeeming their cash for the gold the dollars promised, forcing the banks into insolvency. Family savings had been wiped out, farmers had abandoned their land, businesses had closed their doors, a fourth of the working population lost their jobs, breadlines formed in every major city. Half the U.S. army in 1933 could be seated in Chicago’s Soldier Field stadium—with the other half standing at attention on the football field. The U.S. Navy consisted of a few hundred left-over World War I rust-heaps, mostly in mothballs. As Germany’s Luftwaffe began demonstrating its newly minted warplanes, the U.S. Airforce did not even exist. Nor did the dollars that would be necessary build it: Where could the dollars possibly come from when America’s families had lost their savings, when America’s businesses had closed their doors, when America’s banks had declared insolvency? Sell War Bonds? Who had the dollars to buy them? Declare an income tax? Who had the income to pay it?
Ryan Zinke Shifts Wildfire Debate From 'Global Warming' To Anti-Logging 'Environmental Terrorists' -- Interior Secretary Ryan Zinke spent the last week targeting environmental groups that have for years opposed activities, like logging and thinning, to reduce the risks of catastrophic wildfires on federal lands. The former Montana congressman blamed “litigation from radical environmentalists who would rather see forests and communities burn than see a logger in the woods,” in a USA Today op-ed published Wednesday.Zinke also called out “extreme environmentalists” in an interview with KCRA that aired Sunday. The day before that, Zinke lambasted “environmental terrorists groups that have not allowed public access, that refuse to allow harvest of timber” in an interview with Breitbart Radio.Deadly wildfires have consumed over 1 million acres in West Coast states, damaging structures and forcing thousands to flee their homes. The recent death of a firefighter battling the nearly 350,000-acre Mendocino Complex Fire brings the death toll to six for this season. So what’s the point of attacking environmentalists? Zinke is taking the conversation away from global warming and bringing it back to land management, including the litigation and environmental laws that keep officials from actively managing the forests. Instead, activists focus on global warming, arguing human-caused warming has expanded wildfire season due to longer hotter, drier conditions in the western states. At the same time, these groups often oppose efforts to clear forests of debris and dead wood that fuel fires when hot, dry weather sets in every year. “I’ve heard the climate change argument back and forth,” Zinke told the Sacramento-based KCRA. “This has nothing to do with climate change. This has to do with active forest management.” Wildfire experts tend to see land management and urban growth as prime drivers of wildfires. Many experts also see global warming as a factor in the rise of fires, but admit the relationship is more complicated than the media lets on.
Almost 600 wildfires now burning across B.C - Despite hope that cooler weather would help with the firefighting efforts, almost 600 wildfires are currently burning across B.C.Even though some parts of the province saw some rain this weekend, the BC Wildfire Service said it wasn’t enough to help with the 140 new fires that began due to lightning. “It was quite spotty, quite scattered,” Fire Information Officer Kevin Skrepnek said. “Some areas had some really heavy downpours and other areas barely saw any rain at all.” But without any major rain in the forecast in the near future, Skrepnek said crews are bracing for a very busy few weeks ahead.He said crews are expecting more lightning Sunday night but are hoping it won’t be as bad as Saturday. There are currently about 40 fires of note, with the Snowy Mountain wildfire being considered the largest in B.C. at more than 13,000 hectares. For regular updates on these fires, visit: https://t.co/mAvQXM2pXc— BC Wildfire Service (@BCGovFireInfo) August 11, 2018“Really it is spread fairly evenly across all six of our regional fire centres,” he said. “So really from one corner of the province to the other we are quite busy right now, definitely bringing in lots of additional resources to make sure we can keep managing the situation.”Despite all fire centres seeing a lot of activity, Skrepnek said the central part of the province is seeing most of the fires that are of concern due to towns nearby, increasing the possibility of evacuation orders and alerts. Meanwhile, 2,500 people living in the western part of Quesnel have been put on evacuation alert as crews continue to battle a growing wildfire near the city. Another 2,000 residents in the surrounding area are also preparing to leave at a moments notice. Skrepnek said they have about 3,500 personnel helping, including frontline firefighters, support staff, as well as people working behind the scenes. That’s up from the usual 1,700 working for BC Wildfire Service.
Great, Now Canadian Wildfire Smoke Is Crossing the Atlantic - The western half of North America has turned into a funeral pyre for forests. We’ve heard a lot about California recently, but British Columbia is also in serious trouble. There are about 600 blazes currently turning the province into a smoldering morass, including 145 new fires that lit up on Saturday by a lightning storm. All those fires have sent a river of smoke and ash streaming across Canada and out over the Atlantic. The smoke is forecast to reach Ireland and the UK by Wednesday morning,according to tweets from European fire expert Mark Parrington. Washington state and other parts of the western U.S. are also getting a taste of the smoke as well it drifts south (in addition to smoke from California as it drifts north). Smoke is also creating a major public health issue closer to the source. The provincial government uses a 10-point scale to rank air quality with one being a breath of fresh air and 10 being extremely unhealthy. Much of metro Vancouver is currently scoring an eight, which is not good. In Quesnel, a small town in central British Columbia near some of the largest fires, the air quality health index used by the British Columbia government to rank unhealthy air is off the charts, ranking as a 10+. The government recommends that even healthy adults should “[r]educe or reschedule strenuous activities outdoors.”That may not be an option, though, with the CBC reporting that people living on closest to fires may have to flee at a moment’s notice. The province has already evacuated 900 properties to the northwest of the town of 10,000, but local officials are preparing for a major evacuation in town. To-date, fires have charred nearly 900,000 acres of the province. In comparison, the 10-year average area burned for the entire year is 373,230 acres. Last year, nearly 3 million acres of British Columbia burned and sent smoke spiraling over the Arctic in what was the worst fire year on record for the province. This year isn’t on that level, but it’s still pretty horrific.
British Columbia declares state of emergency as over 500 wildfires burn - The Canadian province of British Columbia has declared a state of emergency as thousands of firefighters battle more than 500 wildfires with little relief in sight. “We’re going to throw everything we’ve got at these fires, but in a lot of cases, Mother Nature is going to be in the driver’s seat,” Kevin Skrepnek, the province’s chief fire information officer, told reporters. While the province desperately needs rain, he said: “We’re not really seeing it in the forecast right now.” About 566 wildfires are currently burning across the west coast province, prompting the evacuation of some 3,000 people. Another 18,000 residents have been warned that they may have to flee their homes at a moment’s notice. So far this year more than 1,800 fires have charred some 380,000 hectares (939,000 acres), making it the province’s fourth worst fire season since it began keeping track in 1950. The fires have left a wide swath of western Canada, including metro Vancouver, blanketed in a thick layer of smoke and haze. Public health officials are warning residents in some regions to avoid strenuous exercise and stay indoors as much as possible.
Death toll rises to almost 400 after another Indonesian earthquake -- Indonesia’s Lombok Island was struck on August 9 by a third earthquake in the space of just several weeks. The disaster has exacerbated widespread death and destruction, with more than 13,000 injured and 387 killed this month.The latest quake registered a magnitude of 5.9 on the Richter scale. It followed a 6.9 quake on August 5, the most powerful in the island’s recorded history, and a 6.4 magnitude shock on July 29 that killed 16 people. More than 500 tremors and aftershocks have also been recorded.A week after the August 5 disaster, thousands have yet to receive assistance. Disaster relief efforts have been hampered by poor infrastructure and rescue services on the island, failing telecommunication networks and damaged bridges and roads.Aid agencies have warned of a developing humanitarian crisis on Lombok. Arifin Hadi, a spokesperson for the Red Cross, said that tens of thousands are without clean water, food, medicine and shelter. More than 387,000 people have been displaced, with many of them homeless, and over 68,000 homes have been damaged or destroyed.National disaster agency spokesman Sutopo Purwo Nugroho said that the death toll will grow because many victims are suspected to be buried under landslides and collapsed buildings. The Indonesian Red Cross reported that in North Lombok—the most devastated area—around 334 people have died, some 20,000 people require aid, and approximately 80 percent of the buildings have been destroyed. An estimated three quarters of northern Lombok has been without power for over a week.
PIOMAS August 2018 --Arctic Sea Ice by Neven - (pictures and graphs) PIOMAS data came in a bit later this month, and I'm a bit later still, but this gives us an opportunity to look at what may happen during the second half of the month. Another month has passed and so here is the updated Arctic sea ice volume graph as calculated by the Pan-Arctic Ice Ocean Modeling and Assimilation System (PIOMAS) at the Polar Science Center: Given the heat on the Siberian side of the Arctic and extensive melting in the Kara and Laptev Seas I had expected a larger drop. Nevertheless, a loss of 6229 km3 of sea ice volume is well above the 2007-2017 average of 6020 km3. This essentially means that 2018 has caught up some more with the years in front of it, and even slipped below 2016 (the difference is a mere 17 km3), which means it's in 5th position as of July 31. The difference with 2012 has been reduced with 610 km3, and is now 907 km3. Here's how the differences with previous years have evolved from last month: And here's Wipneus' visual representation of the PIOMAS data. If you look closely you'll see the 2018 trend line veer off slightly to the right, and that's where I expected it would continue to go down: On the PIOMAS volume anomaly graph, the trend line has gone up a bit again, but it's still in one standard deviation territory: Something funny has happened on the PIJAMAS graph, showing average thickness for the entire Arctic ocean (a crude calculation where you divide PIOMAS volume with JAXA extent). It seems that extent has gone down relatively faster than volume, and so the average thickness has flatlined instead of going down. Basically, it means that more volume is spread over a smaller expansion of sea ice. This too, perhaps, explains why I expected volume to have gone down more during July. I expected volume to follow extent, and thus thickness to continue to go down some more: We see the exact same thing happening on the Polar Science Centre thickness graph:
Circumnavigating Greenland - A quite spectacular event took place during the past two weeks, and if it had continued for a while longer, I'm sure it would've been reported widely. It's something I've semi-jokingly alluded to when setting up this blog back in 2010, in my third blog post called Dire Straits, and a partial answer to the question commenter fredt34* asked at the time: The big hole opening in East Greenland re-activated my interest for this question: will we see Greenland being circumnavigable this year? If not, when? That was July 23rd 2010, and now a little over 8 years later, we have almost seen it happen: a corridor of open water between Fram Strait and the Lincoln Sea (where Nares Strait starts). Here's an animation ofNASA EOSDIS Worldview satellite images showing what has happened during the past two weeks, ending yesterday (click for a slightly larger version): And here's the animation with only the first and last images, two weeks apart: Can you imagine that? It is almost possible to circumnavigate - love that word - Greenland with a sailboat! You can charter a sailboat in Iceland, sail past Cape Morris Jessup, Greenland's northernmost tip, and almost into the Lincoln Sea, through Nares Strait, down Baffin Bay, and be back in Reykjavík before the equinox. It's pretty crazy, when you think about it. Still, it's difficult to say how unprecedented this is. Remember, a similar event took place a couple of months ago, which in a way was more spectacular, because it happened during winter. I wrote about it here,The cause of that event is the same as it is now: A high pressure area positioned in such a way, for an extended period of time, that the clockwise winds it engenders, pull away the ice from the North Greenland coast. But the big difference is that these winds were much, much stronger back in February than they are now. Another difference is that there was ice in Fram Strait blocking an open passage towards Cape Morris Jessup, but now the open water extends from Fram Strait to the Lincoln Sea. And last but not least, the ice quickly froze over again once the southerly winds died down. That will not happen here, not until September. If it closes again, it will be because northerly winds push the ice back towards the Greenland coast.
Newspaper clipping from 1912 mentions link between burning coal and a warmer planet - A newspaper blurb published in a 1912 mentions a link between burning coal and a warmer Earth.An Aug. 14, 1912, blurb in the New Zealand newspaper Rodney and Otamatea Times, Waitemata and Kaipara Gazette, reads, "The furnaces of the world are now burning about 2,000,000,000 tons of coal a year. When this is burned, uniting with oxygen, it adds about 7,000,000,000 tons of carbon dioxide to the atmosphere yearly. This tends to make the air a more effective blanket for the earth and to raise its temperature. The effect may be considerable in a few centuries." The headline reads: "Coal Consumption Affecting Climate Change."As Snopes.com reported, an image of the text was shared in 2016 on the Facebook page "Sustainable Business Network NZ." It is also available in a newspaper archive on the National Library of New Zealand's website.The same blurb was published in an Australian newspaper in July 1912 and can also be found in an Australian online archive, reports Snopes.com, which says the clip actually dates back to March that year and an issue of the magazine Popular Mechanics. As scientists have found, heat-trapping gases from the burning of fossil fuels, like coal, are the main drivers of climate change.
Canada, America among top polluters, worse than China - It may surprise you, but Canada is the top polluter per person in the world, followed by America and Russia.. China has over 1.3 billion more people than Canada, yet the average Canadian emits far more greenhouse gas emissions – by 24 metric tons in 2014, to be exact. America comes in a close second, burning 20 metric tons per person, followed by Russia with 14 metric tons of carbon dioxide. And even though the wealthiest of nations have decreased their carbon footprint, it has come at the expense of other countries. When China makes phones, toys or clothes, those greenhouse gas emissions get added to China’s count despite those products made for use in the U.S., Europe and around the world. China is America’s largest goods trading partner, exporting 169.8 billion in 2016. But in 2006 alone, about 21 percent of export-related Chinese emissions were linked to the production of goods for the US.
The US’ hidden methane problem - Across the US, a major, uncontrolled leak of a potent greenhouse gas is going unregulated and largely unnoticed. Climate Home News analysis of government data has identified roughly 300 active and 200 abandoned coal mines, which are the source of almost one-tenth of US methane pollution.Methane has 34 times the long-term warming effect of carbon dioxide and accounts for 10% of US greenhouse gas emissions. Its emissions from the oil and gas industry and the efforts of the Trump administration to roll back regulations on them have been widely publicised.Meanwhile, US coal mines released 60.5 MMTCO2e of methane in 2016, with roughly the same warming impact as 13 million cars. Efforts to control the problem are being hampered despite those with the technical expertise claiming a whole industry could be built on capturing these emissions and turning them into electricity.Data collected by the Mine Safety and Health Administration (MSHA), shows Warrior Met Coal Mining’s No 7 Mine in Alabama emits the most methane of any mine in the US.“The coal seams Warrior Met Coal mine contain high levels of methane gas. Much of the gas is captured prior to, during and after active mining operations and distributed into commercial pipelines,” Warrior spokesperson Bill Stanhouse said in an emailed statement. Even with these efforts, the mine emits at least 262,700m3 of methane into the atmosphere per day. The data shows many of the most gaseous abandoned mines are in Kentucky and West Virginia and belonged to large operators such as Alpha Natural Resources, which also did not respond to requests for comment, and Alliance Resource Partners. Sealing shafts and allowing abandoned mines to flood can significantly decrease methane emissions.
Trump nominee won't say if he supports funding agency he was selected to run | TheHill: A Trump administration nominee selected to run a science-based agency within the Department of Energy dodged questions on Thursday as to whether he supports funding the office. Lane Genatowski told members of the Senate Energy and Natural Resources Committee during his confirmation hearing that he would be happy to lead the Advanced Research Projects Agency-Energy (ARPA-E) and put his "oar in the water" there, if the agency were indeed funded. He added, however, that he supports President Trump's budget. Trump proposed to zero out the entire program in both of the White House's 2018 and 2019 fiscal year budgets. Senators on both sides of the aisle were eager to point out the discrepancy, with some attempting to pigeon hole Genatowski into commenting on whether he agreed with Trump's decision.
Energy giant Vestas warns of rising costs due to US metal tariffs - The CEO of Danish wind turbine manufacturer Vestas warned about the impact of tariffs and trade barriers Wednesday, with the company lowering its revenue guidance for the year. In its earnings report for the second quarter of 2018, Vestas said that as a result of the implementation of tariffs in the U.S., prices of U.S. steel and imported components were expected to increase. "We are a global company, present in 70 markets with a global supply chain, and of course trade barriers and tariffs is a negative for any global company, and so also for Vestas," Anders Runevad told CNBC's "Squawk Box Europe" Wednesday. "We have a big manufacturing footprint … regionally, so we of course can take mitigating actions within our supply chain and that's what we are doing, but of course it is a concern when we see tariffs being introduced," Runevad added. During his interview with CNBC, Runevad also commented on Vestas' work with battery manufacturer Northvolt. In December 2017, the business announced it was investing 10 million euros in Northvolt and collaborating on the development of a lithium-ion battery platform for Vestas power plants. "We need to see how we can make companies like Northvolt — and other types of battery companies — do an application for utility-based storage," Runevad told CNBC. "There are several other storage solutions but we believe that the battery now, shorter term, looks to be the most promising," he went on to explain.
Have investors lost interest in “clean energy”? - Energy Matters by Roger Andrews - Before 2011 global investment in clean energy (wind, solar, biomass, biofuels etc.) grew rapidly. Then in and around 2011 many governments abandoned renewables subsidies in favor of capacity auctions, and growth in global clean energy investment ceased. Investment in North and South America has not increased since 2007 and in Asia it has not increased since 2015. Clean energy investment in Europe has been declining steadily since 2011, and investment in the UK and Germany is now approaching zero. The current level of investment (~$300 billion a year) is also too low to support a global transition to renewable electricity and to meet global emissions targets. The indications are that it will reach adequate levels only if lavish government subsidies are reinstated. The global renewable electricity transition may fail simply because of a lack of funding. A year ago, using data from Bloomberg New Energy Finance (BNEF), I put up a post discussing global “clean energy” investment between 1Q 2005 and 2Q 2017. BNEF has now published a new report adding a year of data through 2Q 2018 along with some more detailed graphics. This post reproduces some of the more interesting ones, with an emphasis on Europe.First we will deal with the question of the inadequacy of clean energy funding. According to the BP Statistical Review global electricity demand in 2017 was 621 TWh higher than in 2016, an increase of 2.5%. Table 1 shows how this added demand was filled: To decarbonize the world’s electricity sector and to meet emissions targets enough renewable generation must be added each year a) to cover increased global demand and b) to replace a significant amount of fossil fuel generation. Table 1, however, shows that the 307 TWh of renewable generation added in 2017 was enough to fill only about half of the increase in global demand. The other half was filled mostly by more FF generation. Renewable generation – and funding – would have to increase by a factor of at least three to achieve both a) and b). Investments approaching a trillion dollars a year rather than ~$300 billion would therefore be closer to the true requirement, and with batteries not included. Now on to the selected charts (there are a number of other interesting charts in the BNEF report that are not shown here). First a plot of global clean investment by sector. It shows investment going flat after subsidies were discontinued in 2011:
One of the largest banks issued an alarming warning that Earth is running out of the resources to sustain life -- One of the world's largest banks says the planet is running out of resources and warns that neither governments nor companies are prepared for climate change.The world spent its entire natural resource budget for the year by August 1, a group of analysts at HSBC said in a note that cited research from the Global Footprint Network (GFN).That means that the world's citizens used up all the planet's resources for the year in just seven months, according to GFN's analysis."In our opinion, these findings and events show that many businesses and governments are not adequately prepared for climate impacts, nor are they using natural resources efficiently," the HSBC analysts said in the note.Many banks and asset managers have started factoring climate risks into their decision-making — a move spurred in part by former New York City Mayor Michael Bloomberg. But it's far less common to see multinational banks sound the alarm about climate change so explicitly in their equity research.To calculate Earth's natural resource budget, GFN considers the demand for natural resources — which includes food, forests, and marine products — as well as humans' effects on the environment from factors like carbon emissions. The combined total is designed give a comprehensive picture of humanity's global footprint.Earth Overshoot Day, the point in a year at which we use up a year's worth of resources, has been steadily moving forward in time since GFN first started tracking it. In 1970, we "overshot" Earth's resource budget by only 2 days — Overshoot Day fell on December 29, according to HSBC. That date has been pushed up by almost five months since then.HSBC's note also warned about extreme events resulting from heat, including the wildfires in Scandinavia and broken temperature records around the world. "As scientists work on attribution analysis for specific events — the general consensus is that climate change is making these events more likely to occur and more severe," HSBC said.
The spiralling environmental cost of our lithium battery addiction - In May 2016, hundreds of protestors threw dead fish onto the streets of Tagong, a town on the eastern edge of the Tibetan plateau. They had plucked them from the waters of the Liqi river, where a toxic chemical leak from the Ganzizhou Rongda Lithium mine had wreaked havoc with the local ecosystem. There are pictures of masses of dead fish on the surface of the stream. Some eyewitnesses reported seeing cow and yak carcasses floating downstream, dead from drinking contaminated water. It was the third such incident in the space of seven years in an area which has seen a sharp rise in mining activity, including operations run by BYD, the world’ biggest supplier of lithium-ion batteries for smartphones and electric cars. Lithium-ion batteries are a crucial component of efforts to clean up the planet. The battery of a Tesla Model S has about 12 kilograms of lithium in it, while grid storage solutions that will help balance renewable energy would need much more. Demand for lithium is increasing exponentially, and it doubled in price between 2016 and 2018. As the world scrambles to replace fossil fuels with clean energy, the environmental impact of finding all the lithium required to enable that transformation could become a serious issue in its own right. “One of the biggest environmental problems caused by our endless hunger for the latest and smartest devices is a growing mineral crisis, particularly those needed to make our batteries,” says Christina Valimaki an analyst at Elsevier.In South America, the biggest problem is water. The continent’s Lithium Triangle, which covers parts of Argentina, Bolivia and Chile, holds more than half the world’s supply of the metal beneath its otherworldly salt flats. It’s also one of the driest places on earth. That’s a real issue, because to extract lithium, miners start by drilling a hole in the salt flats and pumping salty, mineral-rich brine to the surface. Then they leave it to evaporate for months at a time, first creating a mixture of manganese, potassium, borax and lithium salts which is then filtered and placed into another evaporation pool, and so on. After between 12 and 18 months, the mixture has been filtered enough that lithium carbonate – white gold – can be extracted. It’s a relatively cheap and effective process, but it uses a lot of water – approximately 500,000 gallons per tonne of lithium. In Chile’s Salar de Atacama, mining activities consumed 65 per cent of the region’s water. That is having a big impact on local farmers – who grow quinoa and herd llamas – in an area where some communities already have to get water driven in from elsewhere.
Could Dairy Cows Make Up for California's Aliso Canyon Methane Leak? - There's a twist in the big gas-leak settlement announced in California this week: It includes a program to pay for methane gas collection at a dozen of the state's dairy farms.State and local officials reached a $119.5 million settlement with the Southern California Gas Company on Wednesday to mitigate climate impacts and address ongoing health concerns from one of the largest natural gas leaks in U.S. history. The dairy part of the settlement would address a substantial source of methane, a potent greenhouse gas that contributes to climate change. State officials say the plan would reduce by at least 109,000 metric tons the amount of methane that would otherwise be released into the atmosphere over a 10-year period. That's the same amount that was released over several months following a blowout in October 2015 at the Aliso Canyon gas storage facility on the outskirts of Los Angeles. The settlement, which is subject to approval by the Los Angeles Superior Court, would ensure that methane is collected at 12 or more dairies and fed into the state's existing natural gas pipeline and storage network and then used as transportation fuel, according to a California Air Resources Board document about the settlement. It would also fund a long-term study to assess health impacts from the Aliso Canyon gas leak in nearby communities and would provide funding for ongoing air quality monitoring of emissions there."This leak undermined our crucial work to reduce greenhouse gas emissions and protect our people and the environment," California Attorney General Xavier Becerra said in a statement. "If approved, this settlement will go a long way in addressing the short and long-term harms attributable to the leak." Environmental advocates had mixed reactions to the plan."Making the atmosphere whole, reducing as much pollution as what was put out is great progress and a great step forward," said Timothy O'Connor, who directs the Environmental Defense Fund's oil and gas program in the state.O'Connor stressed, however, that the projects must be done correctly. "So far, we've seen in California investment in biogas facilities where those facilities have been allowed to leak, and that is a problem," he said. "If we are going to build 12 facilities to capture methane in California, they need to be held to the highest standard for leak abatement so we don't spend a bunch of money and wind up in the same place."
Burned up: wood-fueled electricity could be more damaging than coal - Drax Power, the country’s largest utility, began converting its old coal-fired boilers into ones that run on wood a decade ago, with the financial support of the UK Government. In 2017, subsidies to Drax cost Britons £729million, or nearly £2million pounds per day. These subsidies fueled a voracious demand: the UK is now the world’s top importer of wood pellets.This has put the country out of step with the realities of climate science, economics, and the needs of the electricity grid. Scientists do not see largescale use of biomass for electricity as the preferred de-carbonization approach. But that didn’t stop the Department of Energy, Business & Industrial Strategy from approving another biomass conversion at Drax Power Station this year.The public is now becoming more aware that burning trees is not good for the environment, and voices against biomass are growing louder. In April 2018, Channel 4’s Dispatchesaired a hard-hitting investigative report exposing the destruction behind the UK’s move to replace dirty coal with wood fuel. As Dispatches journalists uncovered, in parts of the Southern US, unique hardwood forests that are massive storehouses of carbon are being clear cut, manufactured into wood pellets, and loaded on ships destined for Drax’s boilers.Back in January 2019, researchers at MIT found that when plants switch to biomass, “the first impact is an increase in carbon dioxide, worsening global warming over the critical period through to 2100, even if the wood offsets coal, the most carbon-intensive fossil fuel” They weren’t alone. At the same time, a whopping 800 scientists wrote to the European Commission to say biomass electricity is a false climate solution.
US fossil fuels target global energy poverty, climate change in new PR push (Platts)— A new campaign from a group of US fossil fuel industry representatives will aim to sell coal, gas and oil as a technology-friendly solution to global energy poverty that is already entrenched in the day-to-day lives of much of the developed world. Two videos from Life:Powered, a not-yet-public campaign, were screened Tuesday at the American Coal Council's Coal Market Strategies conference in New Mexico and demonstrate the coal industry's push to revamp its public image. The videos, funded by oil, coal and gas interests, will aim to educate an "extremely under-informed" public on fossil fuels, said Michael Nasi, who is leading the effort. "We have failed as both a coal industry, a power industry and obviously other fossil industries and the nuclear industry because we have failed to get together to message together," said Nasi, also an environmental lawyer and partner with Jackson Walker.The videos are expected to be released in the coming weeks and will focus on promoting new technologies for fossil fuels, he said.The campaign, which will use multiple messaging approaches to promote fossil fuels, is part of a broad effort by the coal industry to remake its image as the fuel has fallen out of favor in the US and begins to lose ground in places like China. Luke Popovich, the former spokesman for the National Mining Association, told conference attendees the concept that coal is important has already lost a lot of value in the public marketplace of ideas. Salvaging its image, he said, will require a new approach that includes accepting climate change as an issue that needs to be addressed. "Coal's single biggest liability is the perception that it is a bygone industry, not a future one," Popovich said. "The picturesque miner with a dented lunchbox and blackened face may glorify the industry's industrial past, but it reinforces the perception that coal is dangerous and dirty and that it has no role to play in a digital age, driving a clean knowledge-based economy." Popovich said most public opinion is based on the perception that there is a problem and that it should go away. What the coal sector can do, he said, is change the face it shows the world and present technologies such as carbon capture and storage as solutions to concerns about climate change.
A Western Kentucky Coal Plant Polluted The Water, But Won’t Pay Any Fines - Nearly two years after a state inspector discovered an arsenic-laced plume of coal ash seeping out of a landfill at a power plant in Western Kentucky, the state Energy and Environment Cabinet has negotiated a deal to clean up the pollution. But environmental activists are concerned the agreement lets the utility off too easy.Samples from the 2016 state inspection revealed arsenic levels exceeding federal standards by nearly a thousand times. Historic aerial images suggest the landfill at the D.B. Wilson power plant may have been leaking a black stream of coal ash since 2010, and perhaps as early as 2003, state records show.Under the new agreed order signed in May, Big Rivers Electric Corporation won’t pay a fine unless it violates the order. The company also has until 2020 — nearly four years after the pollution was discovered — to install a collection and wastewater treatment system to manage the leaks under the agreement.In the meantime, Big Rivers is required to take action “as soon as reasonably feasible” to repair the landfill and clean up the pollution — which it can then bury in the same landfill. Conservationists say Kentucky regulators rubber-stamped the utility’s own plans, insulated it from citizen’s lawsuits and neglected to assess the complete environmental impact of the pollution. “To me that’s the bigger story, it’s not whether there’s a nominal fine or not. It’s the fact that there’s no indication the company is being required to do a full accounting for what the impacts are of this pollution or fully address the pollution at its source,” said Thom Cmar, an attorney with Earthjustice, an environmental advocacy non-profit.
Defunct Nuclear Power Plant On California Coast Is A "Fukushima Waiting To Happen" - A nuclear power plant in Southern California that was shut down in 2012 continues to leak radioactive material and poses a threat to nearby communities. The aging San Onofre, located in San Clemente, CA, was shut down in 2012 amid a leak that occurred due to malpractice. According to a report released in 2016, the plant “operated the reactor outside the allowable limits for pressure and temperature, causing the radiation leak that shut down the facility for good,” the San Diego Tribune noted. The shutdown also launched extensive investigations that implicated both the power company and state regulators. Though the plant is out of operation, it still stores 3.6 million pounds of lethal radioactive waste, and according to a worker who blew the whistle on the plant just last week, a near catastrophe just occurred. As local outlet the Dana Pointer reported, plant worker David Fritch explained what happened at a public meeting: “On 3 August 2018, a 100-ton canister filled with highly radioactive nuclear waste was being ‘downloaded’ into a temporary transport carrier to be moved a few hundred yards from inside the plant to a storage silo buried near the world-famous San Onofre beach. As the thin-walled canister was being lowered into the transport cask, it snagged on a guide ledge four feet from the top. Crane operators were unaware that the canister had stopped descending and the rigging went completely slack, leaving the full weight of the heavy canister perched on that ledge by about a quarter-inch. “Had the ledge not held for the hour or more it took workers to realize and address the error, the thin-walled canister of highly toxic nuclear waste would have fallen 18 feet to the ground below.” Each canister reportedly has as much radiation as was released during the infamous Chernobyl nuclear disaster. Fritch says the staff is too small — and also undertrained. According to an article published in the Los Angeles Times this week: “The idea is to bury the spent fuel on site, about 100 feet from the ocean and just a few feet above the water table. Edison has already begun transferring the waste from cooling pools into specially designed steel canisters. The containers are prone to corrosion and cracking, and cannot be monitored or repaired. Work crews even discovered a loose bolt inside one of the canisters earlier this year.”As ocean levels keep rising, Chappelle says, seawater will come closer and closer to the cannisters. Further, “if hairline cracks or pinholes in the containers were to let in even a little bit of air, it could make the waste explosive.” Further, San Onofre is located directly on an earthquake fault line in an area with a record of tsunamis.
Manufacturing officials get behind-the-scenes look at Oregon Clean Energy Center - Toledo Blade - Representatives of the Ohio Manufacturers’ Association liked what they saw Wednesday when they got a tour of the Oregon Clean Energy Center located at 816 N. Lallendorf Rd., Oregon. The combined cycle, privately-funded natural gas plant has been operating a little more than a year, going online July 1, 2017. But when it’s at full power — and Peter Rigney, Power Plant Management Services LLC’s projects general manager, says that’s pretty often — it cranks out 960 megawatts of electricity, more than the 908 megawatts produced by the FirstEnergy Solutions Davis-Besse nuclear plant about 26 miles to the east when it’s at full power.Mr. Rigney said it also has a fraction of the nuclear plant’s overhead, with 21 employees compared to Davis-Besse’s 700. He jokingly said his entire work force is considerably smaller than just Davis-Besse’s security team. Representatives also encouraged state and federal officials to build on that success, encourage others to follow suit, and not be drawn into the FES campaign for a bailout to save Davis-Besse, the company’s Perry nuclear plant east of Cleveland, its twin-reactor Beaver Valley nuclear complex west of Pittsburgh, or any of the coal-fired power plants Akron-based FirstEnergy Corp. also has turned over to FES, one of its subsidiaries. “We’re not against nuclear power. But they have to be able to compete,” Ryan Augsburger, the group’s vice president said. “When governments start subsidizing, it’s unfair to OCE.” Having competitors get large subsidies is akin to “bidding against a guy who has house money,” Mr. Rigney said.Mr. Rigney said OCE often buys its natural gas within 24 hours of usage and has it piped directly to the plant during that time. It paid $350,000 for a 24-hour supply of natural gas earlier this week, he said.The Oregon Clean Energy Center cost about $800 million to build, one of the larger projects in Lucas County in recent years. Construction began in 2014 on a former 30-acre soybean field.It is one of two large natural gas plants planned for that area.In December, the Ohio Power Siting Board issued a permit to a Massachusetts developer planning to build a $900 million plant next door. That is a 955-megawatt project undertaken by Clean Energy Future-Oregon LLC.
Rig Count in Utica Climbs to 20 – The number of rigs operating in the Utica shale across eastern Ohio improved to 20 during the week ended Aug. 11, up from 18 the previous week, according to the latest data from the Ohio Department of Natural Resources. ODNR reported it issued nine new permits for horizontal wells across the Utica during the week. Ascent Resources LLC was awarded three permits for wells in Jefferson County, Gulfport Energy received three permits targeted for Belmont County and Eclipse Resources LP received three permits for wells in Monroe County. As of Aug. 11, ODNR had approved 2,863 permits for horizontal wells in the Utica, 2,391 of which are drilled and 1,945 of which are in production. No new permits were issued for Columbiana, Mahoning or Trumbull counties in the northern portion of the Utica, ODNR said. Nor were new Utica permits issued for neighboring Lawrence and Mercer counties in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.
Panel: Methane leak capture could add millions to Ohio's economy - -- Ohio oil and gas drillers could use existing technology to find and fix most methane leaks at little or no cost to their bottom lines, according to experts on a recent panel at Case Western Reserve University in Cleveland. Better still: leak detection could create new jobs and revenue, boosting the state’s economy and helping to curb a potent greenhouse gas responsible for about a quarter of manmade global warming experienced today.Andrew Wheeler, an attorney and scientist with the Environmental Defense Fund, said the leaks aren’t just an environmental concern.“I also like to refer to methane as wasted natural gas,” Wheeler said, noting that the product could otherwise be sold and used. As a result, “you can reduce methane emissions by 50 percent for no cost and by 70 to 80 percent at a very marginal, fractional cost.”That jives with results reported by companies in the industry, said Isaac Brown, who heads up the Center for Methane Emissions Solutions, an industry organization for companies that work in the leak detection and repair field. The group commissioned a 2016 survey of oil and gas companies in Colorado after that state’s more stringent methane detection rules came into effect. Eight out of 10 said they were profiting, breaking even or paying out just slightly more as a result of those rules. “Tackling methane emissions not only provides cleaner air, but adds good jobs,” Brown said. Salaries in the leak detection and repair field range up to $113,000 per year, he said.
New natural gas company making its way to Ohio - WTOV Steubenville — A new natural gas company is making its way to the state of Ohio. In an effort to clear a $9 billion debt, Chesapeake Energy will be selling its Ohio assets to Houston, Texas based company, Encino Acquisition Partners. While it’s a major move for the industry, Jefferson County leaders say it’s a positive one. “Encino is a very small company and they will probably be employing all 900 people from Chesapeake, which is a good sign," said Terry Bell of the Jefferson County Township Association. The goal for the new company is to keep jobs within the area and make big money through fracking. According to filings, Encino is taking on roughly 900 wells in Ohio. Many of those planted right here in the Valley. “We currently have 26 counties in the oil and gas area and Chesapeake is a big player in about 5 of these counties-- in the northern portion--which would be Jefferson, Harrison, Belmont, Columbiana, and Carroll, --they’re heavy there," Bell said. This upcoming merger is just one of the many changes coming to the oil and gas industry in our area. “Along with all this drilling activity will come more pipelines. The Shell pipeline is supposed to start in 2019 in the spring. We know they’re coming. There are other pipelines on the drawing board, so we know there’s going to be a lot of activity."
Chesapeake Energy: Probably One More Multi-Billion Sale Needed --Chesapeake Energy (CHK) management announced a $2 billion sale of the Utica Shale operations recently. Mr. Market reacted very coolly to this debt reduction progress. All kinds of wonderful company valuations had been bandied about prior to the latest announcement. Somehow actual sales tend to fall below some very optimistic expectations. Plus now the market will begin to value Chesapeake Energy as a going concern. Therefore growing production and cash flow will be paramount objectives. However, continuing significant sales to pay down debt send both continuing cash flow and remaining production in the wrong direction. Mr. Market appears to be losing patience just when management appears to be finally solving many of the company's inherited problems from a past chief executive officer. One of the problems Mr. Market has with the announcement progress is the continuing setbacks on the balance sheet. Notice that the working capital deficit expanded to $1.633 billion from $.831 billion. The bottom of the balance sheet shows long term debt decreasing by $255 million. However, the increase in the working capital deficit of $802 million means that in essence debt grew by more than $557 million since the second quarter of 2017. Therefore the recent announcement to pay down $2 billion of debt will in reality show closer to about $1.5 billion of debt reduction.Of course, if management continues to outspend cash flow, then long term debt will again significantly increase. Still the sales announcement marks the first significant debt progress in quite awhile.Part of the reason for the working capital deficit increase has been the lack of adequate cash flow. In fact the previous fiscal year had no cash flow from operating activities as shown above. The cash flow had been consumed by non-recurring events. Management had to borrow money to fund daily operations.
Chesapeake reaches $7.75 million deal in Pennsylvania royalty class-action suit, with a catch --Chesapeake reaches $7.75 million deal in Pennsylvania royalty class-action suit, with a catch Arlington, Virginia — Chesapeake Energy has agreed to end a four-year federal class-action battle over natural gas royalties with Pennsylvania leaseholders for $7.75 million, but left the door open to walking away from the settlement if the state's attorney general does not drop an unfair-trade action in state court. Chesapeake said it would set up a fund to pay an estimated 10,000 leaseholders to make up for deductions from their royalty checks for post-production processing and pipeline costs, deductions that in some months left the leaseholders with negative balances, according to the settlement filed in federal court last Thursday. The fund, which would pay class action lawyers up to one-third of the settlement amount, would recoup an estimated 8% of post-production payments for the leaseholders if US District Court Judge Malachy Mannion approves the deal. The leaseholders, mostly landowners in northeast Pennsylvania's Marcellus Shale, claimed that Chesapeake and a then-affiliated midstream company, Access Midstream Partners, inflated the costs for gathering and transporting gas to market by sweetheart deals. Access was spun off before Williams bought it in 2014. Chesapeake denied that claim and insisted in the settlement agreement that its payment practices were proper and met Pennsylvania's legal requirements. Chesapeake said it was settling the action to save money on legal fees. The potential fly in the settlement's ointment is the state attorney general's office, which has torpedoed previous settlements by refusing to drop its case in state court, alleging "bait-and-switch" tactics by Chesapeake. "The private class-action settlement does not impact our case at all," Joe Grace, spokesman for Pennsylvania Attorney General Josh Shapiro, told the Pittsburgh Post-Gazette in a Friday story. "Our claims against these energy companies are active and ongoing, and they are intended to protect all Pennsylvanians against this kind of corporate misconduct, not just one group of individuals in one case."
100+ PA Landowners Sue EQT re Gas Storage Field Payments - According to Washington County, PA landowner Joe Raposky, EQT has been storing natural gas under his property in Finleyville without permission and without compensation since at least 2007. Last year Raposky asked EQT to compensate him and they refused. So Mr. Raposky has organized over 100 of his neighbors along with landowners who sit over top of other similar underground storage fields in the region, and on July 30 they filed a lawsuit against EQT. PA has some 60 gas storage fields spread across 26 counties in the state. The fields are used to temporarily store and then retrieve natural gas. Storage, which is not something we write about very much, is in fact a big deal when it comes to the natural gas market. Not all gas is used as soon as its extracted and sold along a pipeline. There are two main “seasons” in the natural gas industry–injection season, from April 1 through October 31, when a surplus is stored underground, and withdrawal season, from November 1 through March 31, when more gas is used than is produced. Storage fields like the one in Finleyville are an important part of the natgas puzzle. In some cases, landowners are only now becoming aware of the existing fields under their feet and they (rightly) want to be compensated for the use of their property.
Trump criticizes Cuomo over ban on fracking - Oneonta Daily Star — As President Donald Trump sees it, the administration of Gov. Andrew Cuomo has killed a golden goose and ensured high taxes for New Yorkers by blocking the development of shale gas in the state.Trump, who led a rally in Utica Monday for incumbent Rep. Claudia Tenney, R-New Hartford, used the occasion to stir the debate over the controversial technique known as horizontal hydrofracking by suggesting the state should be cashing in on its natural gas deposits. Trump asserted that New York’s natural gas reserve is “dissipating” because the Cuomo administration has blocked the issuance of permits for hydraulic fracturing of shale layers under which the fossil fuel is trapped. “Think of it,” he told Tenney supporters at the Hotel Utica, “if they would’ve allowed a little bit of fracking, and taken some of the richness out of the land, which by the way is being sucked away by other states — you know they don’t have state lines underground.”Trump’s suggestion that New York is losing significant amounts of the underground gas to drillers in Ohio and Pennsylvania because the supply is migrating shows he has no knowledge of the geology of shale formations, said a Cornell University engineering professor and a retired top oil industry executive. “He’s dead wrong on his science,” said Anthony Ingraffea, a Cornell University engineer who has studied fracking and endorsed the New York ban. “He is obviously not a petroleum geologist and he doesn’t know anything about gas and he doesn’t know anything about shale. My guess is he is just making it up because it sounds like a justification for his statement that New York could have become rich. The reality is there is no substantial amount of shale gas in New York.”Lou Allstadt, a Cooperstown village trustee who retired as an executive with Mobil Corp. before the company became known as Exxon Mobil, called Trump’s assertions about the properties of natural gas deposits “total bunk.” “Shale oil or shale gas does not flow like a river,” said Allstadt. “It is trapped in the shale.”
Stumping in New York, Trump blames lack of fracking for high taxes - President Donald Trump linked New York’s taxes to the state’s restrictions on fossil fuel development in a speech on Monday, arguing that such policies have hindered jobs and driven state costs up. While in the city of Utica stumping for Rep. Claudia Tenney (R), Trump took aim at New York’s taxes, blasting them as “the highest” in the nation and arguing that “we should have no taxes” while accusing Gov. Andrew Cuomo (D) of falling short in exploring hydraulic fracturing, or fracking. “No, think of it, if they would’ve allowed a little bit of fracking, and taken some of the richness out of the land, which by the way is being sucked away by other states, you know they don’t have state lines underground, you know what that means?” Trump asked, addressing some 300 people in a room at Hotel Utica. Arguing that untapped fossil fuels in the ground just go “down, down” and benefit other states like Pennsylvania and Ohio, the president argued that fracking and drilling in those states has created jobs.“This place, it’s just so sad to see it,” he said, referencing New York. “And we had the potential to do it better than anybody, and now it’s dissipating, it’s dissipating. Because that stuff flows, do you understand that, it flows.”Indicating a horizontal line with his hands to indicate flowing, the president then made turning motions, seemingly to describe the process of fracking.“And they probably have those little turns, you know they make the turns at the border, it goes like this, right?” he said, motioning a curving shape, before returning to the topic of New York’s finances. “And all of a sudden, some day, you’re not going to have that underground maybe so much, and it’s a shame,” Trump said, “’cause you could have had no taxes, you could’ve had the lowest taxes instead of the highest taxes, and it’s very sad to see what’s happened with New York.”
Trump Blasts Cuomo Over Frack Ban in New York State - - President Trump, at a campaign stop in Upstate New York to support a Republican congresswoman seeking reelection, used his appearance as an opportunity to pillory Democratic Gov. Andrew Cuomo for his opposition to hydraulic fracturing (fracking).Shortly into a speech Monday backing Rep. Claudia Tenney (R-NY), Trump faulted Cuomo, who is seeking a third term, for passing on the opportunity to lower the state's taxes, which are among the highest in the nation. The Cuomo administration enacted a statewide ban on high-volume hydraulic fracturing (HVHF) in June 2015."If they would have allowed a little bit of fracking and taken some of the richness out of the land," taxes in the state would be lower, Trump reasoned. He opined that the oil and natural gas locked in New York's portion of the Marcellus and Utica shales were "being sucked away by other states.""You look at what's happened in Pennsylvania, with the money they've taken in. You look at what happened in Ohio with the money they've taken in. They're fracking. They're drilling a little bit. They're creating jobs. And this place, it's just so sad to see it. And we had the potential to do it better than anybody."Trump also asserted that New York's oil and gas was "dissipating," adding "that stuff flows, do you understand that? And all of a sudden someday you're not going to have that underground maybe so much. And it's a shame, because you could have had no taxes. You could have had the lowest taxes instead of the highest taxes. And it's very sad to see what's happened with New York." From the podium in Utica, NY, Trump told Tenney supporters that the city "could have been a boomtown" had HVHF moved forward. The city lies near the edge of the Utica Shale formation.
What the Frack is Donald Trump Talking About? - Food and Water Watch --There was good news and bad news to report from a campaign stop Donald Trump made this week in New York. The bad news is that Trump very much wishes to see fracking there, where it is currently banned. The good news? He doesn’t appear to know what he’s talking about. .It can be dangerous to try to make sense of Trump’s utter nonsense, but let’s forge on nonetheless. Here’s what he told a crowd in Utica:"Considering the fact that we have the highest taxes in the nation in New York, and we should have no taxes if [New York Governor] Andrew Cuomo, if he took over and... think of it, if they would have allowed a little bit of fracking and taken some of the richness out of the land, which by the way is being sucked away by other states. You know, they don't have state lines underground. You know what that means that means? It just goes down, down, down, we don't get it. You look at what's happened in Pennsylvania with the money they've taken in, you look at what’s happened in Ohio with the money they've taken in. They’re fracking, they're drilling a little bit, they're creating jobs and this place-- it's just so sad to see it, and we had the potential to do it better than anybody. And now it's dissipating. It's dissipating. Because that stuff flows. Do you understand that it flows? And they probably have those little turns, you know they make the turns at the border it goes like this, right. And all of a sudden someday you're not going to have that underground maybe so much. And it's a shame, because you could have had no taxes, you could have had the lowest taxes instead of the highest taxes. and it's very sad. So, to paraphrase: Fracking is a form of flowing magic that eliminates state taxes, an easy way to access riches underground that can be stolen from you by other states if you don’t drill first. Make sense?
Fracking industry water use rises as drills extend, study says - Water use for fracking by oil and gas operators in the Marcellus Shale region rose 20 percent between 2011 and 2016 as longer laterals were drilled to fracture more gas-bearing rock, even though the pace of well development slowed in response to low natural gas prices, a Duke University study said on Wednesday.The rise was the smallest of any of the six U.S. regions studied, including the Permian Basin area of Texas, where water use surged by 770 percent over the period.The study also said the volume of fracking waste water produced in the Marcellus – which includes Pennsylvania, West Virginia, eastern Ohio and southern New York, where fracking is banned — rose four-fold to 600,000 gallons in 2016, forcing energy companies to rely increasingly on holding the waste in underground injection wells.But the Marcellus waste water increase was also significantly smaller than other regions, where it rose as high as 1,440 percent during the period, the report said.Although fewer new wells were drilled during the period than in the early stages of the fracking boom, more water was needed because longer wells required the fracturing of more rock, said Andrew Kondash, the paper’s lead author.The median water use per Marcellus well rose to 7.4 million gallons in 2016 from 6.1 million gallons in 2011, Kondash said.The peer-reviewed study, published in the journal Science Advances, shows the fracking industry is having an increasing impact on water resources after more than a decade of operation, said Avner Vengosh, professor of geochemistry and water quality at Duke’s Nicholas School of the Environment. “We clearly see a steady annual increase in hydraulic fracturing’s water footprint, with 2014 and 2015 marking a turning point where water use and the generation of flowback and produced water began to increase at significantly higher rates,” he said in a statement.
Water use for fracking has risen by up to 770 percent since 2011 - The amount of water used per well for hydraulic fracturing surged by up to 770 percent between 2011 and 2016 in all major U.S. shale gas and oil production regions, a new Duke University study finds. The volume of brine-laden wastewater that fracked oil and gas wells generated during their first year of production also increased by up to 1440 percent during the same period, the study shows.If this rapid intensification continues, fracking's water footprint could grow by up to 50-fold in some regions by the year 2030—raising concerns about its sustainability, particularly in arid or semi-arid regions in western states, or other areas where groundwater supplies are stressed or limited."Previous studies suggested hydraulic fracturing does not use significantly more water than other energy sources, but those findings were based only on aggregated data from the early years of fracking," said Avner Vengosh, professor of geochemistry and water quality at Duke's Nicholas School of the Environment."After more than a decade of fracking operation, we now have more years of data to draw upon from multiple verifiable sources. We clearly see a steady annual increase in hydraulic fracturing's water footprint, with 2014 and 2015 marking a turning point where water use and the generation of flowback and produced water began to increase at significantly higher rates," Vengosh said."While the extraction of shale gas and tight oil has become more efficient over time as the net production of natural gas and oil from these unconventional wells has increased, the amount of water used for hydraulic fracturing and the volume of wastewater produced from each well have increased at much higher rates, making fracking's water footprint much higher," he added. The Duke team published its peer-reviewed findings August 15 in Science Advances.
Water Use in Fracking Soars — Exceeding Rise in Fossil Fuels Produced, Study Says - As the fracking boom matures, the drilling industry's use of water and other fluids to produce oil and natural gas has grown dramatically in the past several years, outstripping the growth of the fossil fuels it produces.A new study published Wednesday in the peer-reviewed journal Science Advances says the trend—a greater environmental toll than previously described—results from recent changes in drilling practices as drillers compete to make new wells more productive. For example, well operators have increased the length of the horizontal portion of wells drilled through shale rock where rich reserves of oil and gas are locked up.They also have significantly increased the amount of water, sand and other materials they pump into the wells to hydraulically fracture the rock and thus release more hydrocarbons trapped within the shale. The amount of water used per well in fracking jumped by as much as 770 percent, or nearly 9-fold, between 2011 and 2016, the study says. Even more dramatically, wastewater production in each well's first year increased up to 15-fold over the same years. "This is changing the paradigm in terms of what we thought about the water use," Monika Freyman, a water specialist at the green business advocacy group Ceres, said that in many arid counties such as those in southern Texas, freshwater use for fracking is reaching or exceeding water use for people, agriculture and other industries combined. "I think some regions are starting to reach those tipping points where they really have to make some pretty tough decisions on how they actually allocate these resources," she said.
Scientists warn fracking could cause water shortages after usage shoots up by 800% in parts of US -- The amount of water used at fracking wells in parts of the US has increased by up to 770 per cent, sparking fears the industry could cause water shortages in arid regions. There was also a massive increase of up to 1440 per cent in the amount of toxic wastewater generated in the first year of operation at fracked oil and gas wells over the same period. A study charting the intensification of the controversial fossil fuel extraction technique looked at changes in its “water footprint” between 2011 and 2016.Previous work had suggested that fracking does not use more water than other energy sources, but this more comprehensive investigation found that future operations may not be sustainable due to the volume of water required.The authors of the study warned that if rapid intensification continues, the industry’s water use in some regions could be 50-times greater by the year 2030, which would lead to water shortages.“I think this is really important in places like the western US where water availability is limited,” study co-author Professor Avner Vengosh from Duke University told The Independent. More water is required at fracking sites as wells are dug ever further into the ground, which explains why water use has increased even as unconventional oil and gas production has more broadly declined in the US. These findings were published in the journal Science Advances. Though the UK fracking industry is only in its preliminary stages, concerns have been raised over the industry’s water footprint on this side of the Atlantic.
What Happens When a Pipeline Runs Afoul of Government Rules? Authorities Change the Rules. A week ago, the federal government halted work on a massive pipeline project that runs from Northern West Virginia through Southern Virginia. The government said it had no choice but to order work on the multibillion-dollar Mountain Valley Pipeline stopped after a federal appeals court ruled that two federal agencies had neglected to follow important environmental protections when they approved the project. The court had found that the U.S. Forest Service had suddenly dropped — without any explanation — its longstanding concerns that soil erosion from the pipeline would harm rivers, streams and aquatic life. It also found that the Bureau of Land Management approved a new construction path through the Jefferson National Forest, ignoring rules that favor sticking to existing utility rights-of-way. “American citizens understandably place their trust in the Forest Service to protect and preserve this country’s forests, and they deserve more than silent acquiescence to a pipeline company’s justification for upending large swaths of national forestlands,” Judge Stephanie Thacker wrote for a unanimous ruling from a three-judge panel of the 4th U.S. Circuit Court of Appeals. “Citizens also trust the Bureau of Land Management to prevent undue degradation to public lands by following the dictates” of federal law. It turns out, those weren’t the only times state and federal regulators bent environmental standards for the project, which began construction in February. A review by the Charleston Gazette-Mail, in collaboration with ProPublica, shows that, over the past two years, federal and state agencies tasked with enforcing the nation’s environmental laws have moved repeatedly to clear roadblocks and expedite the pipeline, even changing the rules at times to ease the project’s approvals. For example:
Is MVP Still Under Construction Following FERC Stop-Work Order? - We spotted something that seemed a bit odd to us. In a story about pipelines in WV and the challenges they face, EQT said they continue to engage in some construction activities for Mountain Valley Pipeline, even though the Federal Energy Regulatory Commission (FERC) recently ordered them to stop all construction on the project until further notice (see FERC Shuts Down ALL Work on Mountain Valley Pipeline in WV, VA). At least, that’s what EQT appears to be saying. Background: The radical Sierra Club convinced the U.S. Court of Appeals for the Fourth Circuit to overturn permits issued by the U.S. Forest Service (USFS) and Bureau of Land Management (BLM) that allows EQT Midstream’s 303-mile Mountain Valley Pipeline to cross 3.5 miles of Jefferson National Forest in West Virginia and Virginia (see Court Cancels Permits for Mountain Valley Pipe on Fed Land). Even though 3.5 miles is like 1% of the entire MVP project, FERC told MVP to “cease immediately” *all* construction activities along the *entire length* of the pipeline, until the permit issue for Jefferson National Forest is resolved. And yet, an EQT spokesperson told a WV reporter, “Various construction activities have been happening along the route, include construction of compression facilities, tree felling, trenching, welding, stringing of pipe.” Did she mean those things happened *until* FERC told them to stop? Or they’ve continued to happen *after* FERC told them to stop? We report, you decide…
MVP Stabilization Plan, Including Completing Some In-Progress Construction, OK'd by FERC - FERC has approved Mountain Valley Pipeline LLC’s (MVP) plan to temporarily stabilize parts of its route during an indefinite work stoppage required after an appeals court vacated key federal authorizations for the 300-mile, 2 Bcf/d project.MVP submitted the stabilization plan last week in response to an Aug. 3 order from the Federal Energy Regulatory Commission requiring all project construction to stop as the U.S. Forest Service (USFS) and the Bureau of Land Management (BLM) reissue key approvals vacated last month by the U.S. Court of Appeals for the Fourth Circuit.MVP’s plan proposed installing up to 80 miles of additional pipeline, conducting limited work on compressor stations and interconnects, and other cleanup efforts to prevent adverse environmental impacts, with the operator noting that “temporarily stopping work on the project has the potential to cause impacts to sensitive environmental resources that would not have been caused with continued work.”FERC’s Terry Turpin, director of the Office of Energy Projects, acknowledged in an order Friday that “the shutdown presents challenges for stabilization and restoration, and we agree that there are some clear advantages to allowing some limited construction activities to proceed to prevent potential safety and environmental impacts.”Turpin said some proposed construction activities are still under review and that FERC staff may request additional information from MVP.MVP “must also seek concurrence from appropriate agencies,” including BLM, USFS and the Army Corps of Engineers, for any construction activities proposed on federal lands, Turpin said. After securing a FERC certificate last fall following a contentious review process, MVP began construction earlier this year but has encountered regulatory and legal setbacks. Management for backer EQT Inc. recently pushed the pipeline’s target start date back about three months to 1Q2019.
Federal agency halts all work on Atlantic Coast Pipeline after judges revoke permits -- A federal agency has ordered a halt to all work on the Atlantic Coast Pipeline after a panel of judges suspended two key permits for the massive project to bring natural gas from West Virginia through central Virginia.The Federal Energy Regulatory Commission sent a letter late Friday to Dominion Energy, the company leading construction of the 600-mile pipeline, saying that work must stop until the permit issues can be resolved.Earlier in the week, three judges from the U.S. Court of Appeals for the 4th Circuit had vacated a permit issued by the National Park Service to allow the pipeline to tunnel under the federally owned Blue Ridge Parkway, saying the agency had not explained how the pipeline fit with the its mandate to conserve public lands.The court also vacated a permit issued by the U.S. Fish and Wildlife Service governing impact on endangered wildlife, saying the agency failed to set proper limits for harm to five species, including a type of freshwater clam and certain bats. The rulings capped a series of setbacks for the two major pipeline projects underway in Virginia. Last month, the same court revoked a permit for the separate Mountain Valley Pipeline to cross about 3.5 miles of the Jefferson National Forest, finding that the impact on the forest had not been fully reviewed.The Federal Energy Regulatory Commission then stepped in to halt all work on that pipeline, as well. The Southern Environmental Law Center brought the challenges against both sets of permits and has urged FERC to reconsider approval for both pipelines.
Is the anti-pipeline playbook starting to work? -Environmental groups have grown accustomed to losing courtroom battles over natural gas pipelines.Although they've notched some important wins over the years, the scoreboard shows developers and federal regulators overwhelmingly in the lead.This summer, though, things have started to change. Two critical legal victories over the Atlantic Coast and Mountain Valley pipelines in Appalachia could signal a long-awaited turn of the tide for the tireless anti-pipeline crowd. “That's why we do this," Southern Environmental Law Center attorney D.J. Gerken said. "The theory behind organizations like mine is we clarify the law so the government does its job and we don't have to do it for them."Gerken argued against the Atlantic Coast pipeline in the 4th U.S. Circuit Court of Appeals earlier this year, securing a major ruling this week that scrapped two federal approvals: a right of way across National Park Service land and a Fish and Wildlife Service assessment of protected species along the project's 600-mile route. And just 10 days earlier, environmental groups persuaded the 4th Circuit to scrap two other federal approvals for the 300-mile Mountain Valley proposal: a Bureau of Land Management right of way and a Forest Service approval.The Federal Energy Regulatory Commission then took the unusual step of suspending construction on Mountain Valley while the other agencies address the permitting deficiencies. Atlantic Coast may face a similar fate (Energywire, Aug. 7). Experts say a variety of factors played into pipeline opponents' sudden shift in fortunes: rushed permitting decisions, sympathetic judges and savvy legal strategies, to name a few.
Resistance to Southeast Pipelines Gains Momentum -Two controversial gas pipelines in the South are in trouble after federal judges and regulators questioned whether their impacts had been adequately studied. On August 3, the Federal Energy Regulatory Commission halted construction along the entirety of the Mountain Valley Pipeline after agreeing with a federal court ruling that 3.6 miles of its route through the Jefferson National Forest in Virginia hadn’t been properly considered. Then, just three days later, a three-judge panel with the U.S. Fourth Circuit of Appeals threw out two key permits for the Atlantic Coast Pipeline to pass under the Blue Ridge Parkway, forcing a significant delay. Environmental groups are thrilled with the twin decisions. “This is an example of what happens when dangerous projects are pushed through based on politics rather than science,” Southern Environmental Law Center attorney D.J. Gerken said in a statement regarding the Atlantic Coast Pipeline delay. “This pipeline project was flawed from the start, and [developers] Dominion and Duke’s pressure tactics to avoid laws that protect our public lands, water, and wildlife are now coming to light.”The Mountain Valley Pipeline (MVP) is a proposed 300-mile pipeline that, if completed, would go through West Virginia and Virginia, along the way cutting through vast swathes of Appalachian hardwood forest and crossing the iconic Appalachian Trail. Nearly 600 miles long, the Atlantic Coast Pipeline is even bigger. It would slice through West Virginia, Virginia, and North Carolina to deliver gas throughout the Southeast. The pipelines have drawn opposition from the Appalachian Trail Conservancy, the National Resources Defense Council, and the Sierra Club, which fear that the new gas infrastructure will exacerbate greenhouse gas emissions. Now, resistance to the two pipelines is coming from a new direction as racial-justice advocates raise concerns that the projects will disproportionately impact communities of color. On July 30, the group Virginia Wild released a letter from the Virginia NAACP to the Virginia Department of Environmental Quality (DEQ), dated May 30, that detailed the civil rights organization’s objections to the Mountain Valley and Atlantic Coast Pipelines. The letter states, “Consideration under the U.S. Army Corps of Engineers is inadequate and grossly neglects to consider the magnitude of both projects and the massive disruptions to surrounding communities and the environment that will result.” The NAACP letter goes on to call for a construction halt on both pipelines.
Oil industry targets Florida in new offshore drilling advocacy push - The oil industry is undertaking a new public relations campaign to push for offshore drilling along Florida’s coast. The American Petroleum Institute’s Explore Offshore program, launched in June to promote offshore drilling, held its first Florida event Wednesday. The Trump administration’s January proposal to allow offshore oil and natural gas drilling all along the Atlantic, Pacific and Gulf coasts met strong opposition in many places, but it was especially widespread in Florida.That quickly prompted Interior Secretary Ryan Zinke to promise that no drilling would be allowed in the water near either side of Florida. But the oil industry has nonetheless pushed for some compromise, including allowing some new drilling with a large margin around the state. “Our American way of life and the freedoms we enjoy are undoubtedly linked to access to affordable, reliable energy. At the same time, 94 percent of America’s offshore energy resources are completely off-limits to natural gas and oil development, disallowing hundreds of thousands of American jobs and abundant domestic energy supply, and keeping us reliant on foreign sources,” Jim Nicholson, co-chairman of Explore Offshore, said in a statement.
Is Deepwater Drilling More Profitable Than Shale? -- Royal Dutch Shell says that offshore drilling is now more competitive than onshore shale drilling, upending what has become conventional wisdom since the 2014 oil market meltdown. The downturn was thought to place a premium on short-cycle shale drilling, dramatically reducing the risk companies face by allowing them to quickly earn their money back in a matter of months or even weeks on individual shale wells. In sharp contrast, deepwater drilling requires huge upfront outlays, and promises returns that extend over years or even decades, not a particularly desirable place to be in the “lower for longer” environment or in a world in which peak oil demand looms. But Shell argues that the earnings are much better offshore. “The most excitement at the moment is from the deepwater,” Andy Brown, Shell’s head of exploration and production, told the Financial Times in an interview. Shell has prioritized projects in Brazil (aided by the $50 billion acquisition of BG Group), the Gulf of Mexico and the North Sea. The reason why deepwater drilling is so exciting to Shell is that the cost of new projects has fallen significantly in recent years. “Deepwater can compete if not demonstrate higher returns because of fundamental cost reduction,” Brown said. “Break-even prices in deepwater — we are now talking $30 per barrel.” That compares favorably to a lot of onshore shale plays, and in fact, it would beat out just about everywhere that shale companies are drilling. For instance, the SCOOP in Oklahoma has a breakeven price in the mid-$60s per barrel, according to data from Bloomberg New Energy Finance from earlier this year. That is on the upper end, but even more competitive areas are much costlier than the figures that Shell is citing. The Eagle Ford breaks even at between $48 and $61 per barrel, the Bakken at $53 to $56, the Niobrara at $63 and the Delaware basin (Permian) at $57 per barrel. Even the Midland Permian, arguably the most prized shale region in the country, breaks even at about $37 per barrel, BNEF says. With those figures in mind, the oil industry is going back into deepwater. According toRystad Energy, there have already been 45 offshore projects that have received final investment decisions this year, more than all of 2016 combined. Moreover, offshore FIDs this year are on track to exceed the 2017 total by more than 50 percent.
Fewer than 1 percent of offshore drilling tracts auctioned by Trump receive bids - Oil and gas companies bid on fewer than one percent of the offshore tracts made available by the Trump administration during an auction Wednesday. Of the 14,622 tracts made available by the Interior department for bidding on 801,288 acres in federal waters off the Gulf of Mexico, only 144 received bids. The percentage of tracts bid on was slightly less than the previous lease sale in March that leased just over 1 percent of tracts made available.The last sale in March was the biggest offshore lease sale in United States history--with 77.3 million acres made available. The sale saw 33 companies bidding on plots off the cost of Texas, Louisiana, Mississippi, Alabama, and Florida for $124.8 million. Of the 14,474 tracts available for bidding only 148 tracts received any bids. The Obama administration held much smaller sales that focused only on areas where oil companies had expressed interest. The administration Wednesday nevertheless hailed the latest sale as a success, promoting the nearly $180,000,000 in sales generated in a press release. "Today’s lease sale is yet another step our nation has taken to achieve economic security and energy dominance,” Interior Deputy Secretary Bernhardt said in a statement. “The results from the lease sale will help secure well-paying offshore jobs for rig and platform workers, support staff onshore, and related industry jobs, while generating much-needed revenue to fund everything from conservation to infrastructure.”
Water Protectors Take Action to Keep Pipeline Out of Black and Indigenous Communities -Chants of "St. James needs an evacuation route!" came from the dozen-plus activists gathered at Louisiana Radio Network on July 18. The activists were part of the L'Eau Est La Vie ("Water Is Life") camp, in Rayne, Louisiana. They want to stop the construction of the Bayou Bridge pipeline in Louisiana from St. Charles to St. James, through the Atchafalaya Basin.They were at the Radio Network because they want to get the attention of Lousiana Gov. John Bel Edwards, who was holding his monthly radio call-in show there. They believe that the struggle against the pipeline is inherently connected to the struggles against extractive capitalism and White nationalism, and the movements for Native rights and Black lives.One of the water protectors' demands is securing an evacuation route for the 5th District of St. James Parish, which is accessible by only one road. The Mississippi River hems the community in on one side, and sugar cane fields the other. Crude oil terminals, petrochemical plants, and oil tanks line the residential stretch. If an industrial accident occurred, the predominantly low-income Black residents would be trapped."This is on the intersection of a lot of things," said Cherri Foytlin, who calls the fight "a justice issue, right in the heart of KKK territory." Foytlin originally hails from Oklahoma and is of Diné and Cherokee descent. She's lived in Rayne for 15 years, where she raises six children. Foytlin recalled the 2010 BP oil spill in the Gulf of Mexico. She remembers finding a dying pelican and burying the bird after it expired. "I came back and took a really hard look at myself and said … 'What are you going to do?'" What she did is walk from New Orleans to Washington, D.C., to raise awareness about the impacts of the disaster. "I'd walk through one community and they'd be dealing with mountaintop removal," she said. "I go to the next community and they're dealing with uranium mining." It was during the walk that she deeply understood how access to clean air and water connects to poverty and racism, Foytlin said.
U.S. refineries running at near-record highs -- For the week ending July 6, 2018, the four-week average of U.S. gross refinery inputs surpassed 18 million barrels per day (b/d) for the first time on record. U.S. refineries are running at record levels in response to robust domestic and international demand for motor gasoline and distillate fuel oil. Before the most recent increases in refinery runs, the last time the four-week average of U.S. gross refinery inputs approached 18 million b/d was the week of August 25, 2017. Hurricane Harvey made landfall the following week, resulting in widespread refinery closures and shutdowns along the U.S. Gulf Coast. Despite record-high inputs, refinery utilization as a percentage of capacity has not surpassed the record set in 1998. Rather than higher utilization, refinery runs have increased with increased refinery capacity. U.S. refinery capacity increased by 862,000 barrels per calendar day (b/cd) between January 1, 2011, and January 1, 2018. The record-high U.S. input levels are driven in large part by refinery operations in the Gulf Coast and Midwest regions, the Petroleum Administration for Defense Districts (PADDs) with the most refinery capacity in the country. The Gulf Coast (PADD 3) has more than half of all U.S. refinery capacity and reached a new record input level the same week as the record-high overall U.S. capacity, with four-week average gross refinery inputs of 9.5 million b/d for the week ending July 6. The Midwest (PADD 2) has the second-highest refinery capacity, and the four-week average gross refinery inputs reached a record-high 4.1 million b/d for the week ending June 1. U.S. refineries are responding currently to high demand for petroleum products, specifically motor gasoline and distillate. The four-week average of finished motor gasoline product supplied—EIA’s proxy measure of U.S. consumption—typically hits the highest level of the year in August. Weekly data for this summer to date suggest that this year’s peak in finished motor gasoline product supplied is likely to match that of 2016 and 2017, the two highest years on record, at 9.8 million b/d. The four-week average of finished motor gasoline product supplied for the week ending August 3, 2018, was at 9.7 million b/d. U.S. distillate consumption, again measured as product supplied, is also relatively high, averaging 4.0 million b/d for the past four weeks, 64,000 b/d lower than the five-year average level for this time of year. In addition to relatively strong domestic distillate consumption, U.S. exports of distillate have continued to increase, reaching a four-week average of 1.2 million b/d as of August 3, 2018. For the week ending August 3, 2018, the four-week average of U.S. distillate product supplied plus exports reached 5.2 million b/d.
US Refineries Processing Record Levels Of Crude Oil To Keep Up With Demand - U.S. refineries are running at record levels to meet the high demand for gasoline and distillate fuel oil, according to federal data. The U.S. Energy Information Administration (EIA) found the four-week average of gross refinery inputs hit 18 million barrels a day in early July — a new record. EIA noted that refineries were “responding currently to high demand for petroleum products, specifically motor gasoline and distillate.” EIA expects refineries to deliver 9.8 million barrels per day of gasoline. Refineries along the Gulf Coast processed a record-breaking 9.5 million barrels per day during that period, and Midwestern plants processed a near-record amount of crude oil, EIA reported. Refiners nearly broke the 18-million-barrel record in August 2017, but Hurricane Harvey forced some facilities to shut down as it hammered the Gulf Coast. Harvey shut-in around 3.2 million barrels a day in refining capacity, causing gas prices to rise. EIA projects “U.S. refinery runs will average 16.9 million b/d and 17.0 million b/d in 2018 and 2019,” which are new record highs.
Kaspersky Lab Contest Reveals Ease Of Hacking Oil Refineries - In October, four South Korean hackers in Shanghai spent seven hours attempting to infiltrate an oil refinery’s corporate network to gain access to its control systems and shut the facility down. Another 15 minutes or so, and they likely would have succeeded. Fortunately for the industry, the attack was not real. It was performed in a live-televised cybersecurity competition put on by Internet security firm Kaspersky Lab. The competition pitted teams from around the world in a race to breach a model of a real oil refinery that is one of the company’s clients.None of the three teams in the final managed to bring the refinery down; the South Korean team came closest and won the contest. But as the organizers note, real-world hackers do not operate under such tight time restrictions.“The contest demonstrated once again that, by exploiting weaknesses in the corporate network’s protection and network configuration faults, a remote threat actor can gain unauthorized access to the industrial segment of the network,” Kaspersky’s industrial control system vulnerability research group manager, Vladimir Dashchenko, said.This was the third annual cybersecurity competition that Kaspersky has held. The 2016 contest invited hackers to penetrate the network of a model power plant.The competition highlights the vulnerabilities of critical infrastructure, including oil refineries, as the stakes of cyberwarfare grow. The environmental and human toll of a cyber-induced disaster could be significant, to say nothing of the disruption to oil and gas markets.“Oil and gas is one of the industries that is essential to how societies and economies function,” Dashchenko said.The Moscow-based company earlier this year said it discovered malware infecting a control system installed at more than 1,000 gasoline stations that would have allowed hackers to shut down fueling systems, change fuel prices and cause leakages, among other acts of sabotage. Kaspersky itself has faced allegations of helping the Russian government spy on its customers, as the US has banned the use of its products on federal networks and reportedly is weighing sanctions against the company. The company denies the charges and says it is “caught in the middle of a geopolitical fight” between the US and Russia.
Natural gas pipeline capacity to South Central region and export markets increases in 2018 -- By the end of 2018, EIA expects natural gas pipeline capacity into the South Central region of the United States to reach almost 19 billion cubic feet per day (Bcf/d). The region has shifted from being a source of natural gas supply to a source of growing demand, reversing the historical flows of natural gas in the Lower 48 states. Natural gas pipeline projects scheduled to come online in 2018 will bring additional supply to the Gulf Coast and support growing export markets. Of the additional 6.4 Bcf/d of Northeast capacity planned to come online in 2018, more than 2.8 Bcf/d reaches the South Central region directly through three projects that transport natural gas through the Midwest and Southeast: Rayne Xpress, Gulf Xpress, and Atlantic Sunrise. Further west, Natural Gas Pipeline of America’s Gulf Coast Southbound Phase 1 is scheduled to enter service in October 2018. This pipeline will transport up to 0.46 Bcf/d of natural gas from Illinois into south Texas and Louisiana, where it will supply the Corpus Christi LNG export facility and pipelines into Mexico. The LNG export facilities scheduled to come online in 2018 and 2019 represent an additional 6.1 Bcf/d of LNG export capacity, requiring infrastructure to connect them to the interstate pipeline network and deliver large volumes of natural gas to the liquefaction terminals. The United States currently has two operational LNG export facilities, which have a combined export capacity of 3.5 Bcf/d: Sabine Pass Trains 1-4 (2.8 Bcf/d) and Cove Point (0.8 Bcf/d). In addition to Train 5 at Sabine Pass, four new LNG export facilities are under construction, three of which are located in the South Central region. All three of these facilities have associated pipeline projects that are scheduled to be completed this year:
- Freeport LNG will be supplied in part by the Coastal Bend Header Project (1.5 Bcf/d)
- Cameron LNG will be supplied in part by Columbia Gulf Transmission’s Cameron Access Project (0.8 Bcf/d) and Tennessee Gas Pipeline’s Southwest Louisiana Supply Project (0.9 Bcf/d)
- Corpus Christi LNG will be supplied in part by the Cheniere Corpus Christi Pipeline Project (2.25 Bcf/d)
New wave of oil and natural gas mega-projects set to test capital discipline: Wood Mackenzie — A new wave of oil and natural gas mega-projects lined up for approval by producers over the next 18 months will test industry hopes that cost overruns and delays on large-scale, complex upstream projects are a thing of the past, according to a report by Wood Mackenzie. An uptick in major project sanctions began towards the end of last year, suggesting confidence is returning to the upstream sector and project approvals are set to shift again in 2019, Wood Mac believes. Most of the new planned projects are giant, capital-intensive LNG plants with multi-billion boe developments such as Mozambique LNG, LNG Canada. LNG expansions in Qatar and Papua New Guinea are also eyeing final investment decisions. FIDs for deepwater oil off Brazil, Guyana, Nigeria, and the US Gulf of Mexico are also on the cards. But with free cash flow generation building as oil prices hold over $70/b, pressure is growing on producers to stick with their mantras of capital discipline amid a growing risk of over-confidence in launching large-scale projects, according to Wood Mac's research director Angus Rodger. "There is a looming wave of big pre-FID LNG developments building on the horizon, all aiming for sanction between 2018 and 2020," Rodger said. "After a fallow period in new LNG project sanctions, and megaprojects in general, the next 18 months will likely see a step change. This will be the real test of whether the industry has addressed the issue of poor delivery." Keeping a lid on project costs will be key, particularly as oil major's switch of focus to smaller, quick-return projects during the downturn is "not sustainable longer-term an industry underpinned by large, cash-generative assets," according to Wood Mac.
Cheniere continues LNG expansion in Asian market with new Taiwan SPA — US-based Cheniere Energy continues to expand its LNG presence in Asia despite rising diplomatic tensions between Washington and Beijing, with a new deal signed between the LNG exporter and Taiwan's incumbent LNG buyer CPC Corporation for 2 million mt of LNG/year over 25 years from 2021. The sale and purchase agreement is expected to support Cheniere Energy's export expansion plans in the US Gulf Coast at a time of growing uncertainty for the industry, and help diversify CPC's portfolio away from crude oil prices.The deal, signed on a DES basis, is indexed to the monthly Henry Hub price, plus a fee, the Houston-based company said in a statement Friday."This SPA demonstrates Cheniere's growing capabilities to deliver tailored solutions to meet the energy needs of customers worldwide," Cheniere's President and CEO Jack Fusco said.
Cheniere makes feedgas request for Corpus Christi LNG export facility — Cheniere Energy wants to introduce feedgas to the first liquefaction unit at its LNG export facility in Texas as it prepares to begin production before the end of the year. The Houston-based company has been moving quickly to ramp up its operations amid strong demand and netbacks in Asia and as other US competitors are expected to start their terminals in the months ahead. Cheniere's late-Monday filing with the US Federal Energy Regulatory Commission requests permission to be granted by Thursday to introduce feedgas to Train 1. It said Cheniere is ready to begin commissioning of the dry flare. Once in operation, Corpus Christi will be the company's second LNG export terminal. Its first, at Sabine Pass in Louisiana, began shipping cargoes in February 2016. With Cheniere and Dominion Energy already producing, US LNG exports are forecast by S&P Global Platts Analytics to surpass 4 Bcf/d this year. With Corpus Christi nearing startup and facilities under construction by several other developers, that total is projected to reach 8 Bcf/d by the end of 2019, Platts Analytics data shows. Delays at Freeport LNG and Cameron LNG mean the bulk of the new capacity is expected to come online in the second half of next year. Kinder Morgan expects initial in-service at its export terminal at Elba Island near Savannah, Georgia, in the fourth quarter, with final units slated to come online by the third quarter of 2019. One wildcard for the market is what happens with the next crop of US LNG export hopefuls that are part of the so-called second wave of developers. More than a dozen projects are being proposed as part of that group, with startups expected in the early- to mid-2020s. Many have struggled to reach long-term contracts with buyers of their capacity to finance construction. Construction is ahead of schedule at Corpus Christi, where a second train is being built and a third train is planned. Cheniere also plans to add midscale liquefaction units at Corpus Christi and is working to commercialize a sixth liquefaction train at Sabine Pass. Four trains are currently operating at Sabine Pass and a fifth one, like Train 1 at Corpus Christi, is expected to begin producing LNG before the end of the year. Cheniere's Midcontinent Supply Header Interstate Pipeline project, which would boost takeaway capacity from Oklahoma's Anadarko Basin to support growing Gulf Coast demand for LNG exports, received its FERC permit certificate earlier this week. The pipeline has shipper agreements with Devon Energy, Marathon Oil, Gulfport Energy and Cheniere's Corpus Christi export facility. Cheniere, which procured steel for the pipeline from a Canadian supplier, is awaiting word on whether it will be granted exemptions from the Trump administration's move to impose a 25% tariff on imports of steel.
US natural gas storage volume rises 33 Bcf to 2.387 Tcf: EIA — US natural gas in storage increased by 33 Bcf to 2.387 Tcf for the week ended August 10, the US Energy Information Administration reported Thursday. The build was slightly more than an S&P Global Platts survey of analysts call for a 30 Bcf addition. The injection was less than the 49 Bcf build reported during the corresponding week in 2017 and again less than the five-year average addition of 56 Bcf, according to EIA data. Stocks were 687 Bcf, or 22%, less than the year-ago level of 3.074 Tcf and 595 Bcf, or 20%, less than the five-year average of 2.982 Tcf. The injection was less than the 46 Bcf build reported the week prior. Average population-weighted temperatures in the EIA's Midwest region increased 6 degrees week over week, while the East and South Central warmed up a few degrees less. As a result, modeled estimates for gas-fired power generation in all of those regions increased around 1 Bcf/d, according to data from S&P Global Platts Analytics. NYMEX September Henry Hub natural gas futures fell 4.6 cents to $2.894/MMBtu following the 10:30 am EDT storage announcement.The EIA reported a 17 Bcf injection in the East to 592 Bcf, compared with 697 Bcf a year ago; a 24 Bcf build in the Midwest to 603 Bcf, compared with 794 Bcf a year ago; a 3 Bcf addition in the Mountain region to 151 Bcf, compared with 204 Bcf a year ago; a 5 Bcf withdrawal in the Pacific to 240 Bcf, compared to 292 Bcf a year ago; and a 6 Bcf pull in the South Central region to 801 Bcf, compared to 1.088 Tcf a year ago.Total inventories are now 103 Bcf less than the five-year average of 694 Bcf in the East, 156 Bcf less than the five-year average of 759 Bcf in the Midwest, 32 Bcf less than the five-year average of 183 Bcf in the Mountain region, 80 Bcf less than the five-year average of 320 Bcf in the Pacific, and 225 Bcf less than the five-year average of 1.026 Tcf in the South Central region.An early forecast for the week in progress expects a build of 48 Bcf, which is 4 Bcf less than the five-year average, according to Platts Analytics. Approximately 12 more weeks of injections are likely before the flip to withdrawal season, based on EIA's historical data. Platts Analytics is estimating the season will start at 3.37 Tcf at a 500 Bcf deficit to normal.
Gas production projected to jump 1 Bcf/d - Natural gas production in the Lower 48 U.S. states’ seven most productive unconventional plays is projected to jump 1 billion cubic feet per day (Bcf/d) from August to September, the just-released Drilling Productivity Report shows. The Energy Information Administration’s monthly report shows five of the seven plays will show a month-to-month production increase measured by triple digits, Kallanish Energy calculates. The biggest month-to-month increase by far will occur in the Appalachia region, which includes the Marcellus and Utica Shale plays. The Drilling Productivity Report, or DPR, reports gas production to jump 306 million cubic feet per day (Mmcf/d), to 29.35 Bcf/d, from 29.05 Bcf/d (all numbers are rounded). The Permian Basin will see the second-largest jump in natural gas production, up 243 Mmcf/d, to 11.54 Bcf/d from 11.30 Bcf/d. The gas produced is associated with the ongoing crude oil production frenzy in West Texas/southeast New Mexico. The Haynesville Shale, which is rapidly once again ramping up production, will experience a 154 Mmcf/d natural gas production increase, to 9.58 Bcf/d in September, from 9.43 Bcf/d in August. The Eagle Ford Shale in South Texas is projected to jump 128 Mmcf/d in September, to 7.06 Bcf/d, from 6.93 Bcf/d in August. Rounding out the triple-digit production increase is the Anadarko, projected to see a 100 Mmcf/d natural gas production increase from August to September, to 7.22 Bcf/d, from 7.12 Bcf/d. In the two remaining “super plays,” the Niobrara is expected to see a 54 Mmcf/d production increase, to 5.21 Bcf/d, from 5.15 Bcf/d, the DPR reported.
PetroChina Mulls Suspending US LNG Purchases -- PetroChina Co. may temporarily halt purchases of U.S. liquefied natural gas spot cargoes through the winter to avoid potential tariffs amid a trade conflict between the U.S. and China, according to people with knowledge of the strategy. Under the plan, PetroChina would boost buying of spot cargoes from other countries or swap U.S. shipments with other nations in East Asia to avoid paying additional tariffs, said the people, who asked not to be identified because the information isn’t public. PetroChina, a unit of the state-owned China National Petroleum Corp., couldn’t immediately comment when contacted by Bloomberg. China said this month it was considering a 25 percent tariff on U.S. LNG, which had been missing from previously targeted goods, in a direct hit to American gas exporters. The move comes ahead of the winter heating season when demand and prices typically peak and shows that Chinese President Xi Jinping may be willing to suffer some pain to avoid backing down from U.S. President Donald Trump’s trade dispute. “If the tariff is implemented before winter, it would potentially increase the competition for non U.S. supply to the Asian market and hence drive up spot prices in Asia this winter,” Maggie Kuang, an analyst with Bloomberg NEF in Singapore said in an email. “Australia, Qatar, and Southeast Asia will most likely benefit.” Singapore Exchange Ltd.’s North Asia Sling spot price was assessed at $10.165 per million British thermal units as of Friday, the highest in a month. Prices are about 66 percent higher than the same time a year ago. Shares of PetroChina ended 2 percent lower at HK$5.81 in Hong Kong, compared with a 1.5 percent drop in the city’s benchmark Hang Seng Index.
Trade Fears Throw Future of U.S. Natural Gas Into Question… U.S.-China trade tensions threaten a promising area of growth in U.S. energy: natural-gas exports. While the trade dispute hasn’t impacted near-term prices, some analysts believe it could disrupt exports and slow new infrastructure expansions. That could weigh on natural-gas prices in the longer term because U.S. producers are quickly running out of places to sell an unrelenting rush of supply.Earlier this month, in response to U.S. tariffs, China proposed its latest round, including a 25% levy on liquefied natural gas, or LNG.The two countries on Thursday announced they would hold lower-level talks on trade issues later this month.If the sides can’t come to an agreement, natural-gas tariffs in China could lead to opportunities for other major LNG exporters, such as Australia and Qatar, if U.S. gas becomes more expensive. China also may tap supply from Russia via a major pipeline under construction, or from its own domestic production in the coming years, analysts said.“China will look elsewhere in the world to source the commodities they need,” said J. Alexander Blackman, senior executive at Standard Delta LLC, a Houston-based commodities firm with operations in Asia.U.S. exporters, in turn, will need to sell LNG to other countries if they are cut off from the rapidly growing Chinese market. Since exports wouldn’t be hit immediately, analysts doubt tariffs would lead to a sudden swelling of supplies or depressed prices.The more chilling prospect is that companies investing in U.S. export infrastructure scale back plans or put them on hold. “There’s no way in the current environment that anyone’s going to be signing any deals,” said Neil Beveridge, senior oil analyst at Sanford C. Bernstein & Co. “It’s causing a big overhang on what can get done.”That could inhibit producers’ future ability to access the international market, limiting the growth of the U.S. natural-gas sector and an avenue to work off excess supply. As the shale boom took off, U.S. companies rushed into projects to superchill gas into liquid so it can be loaded onto tankers and traded around the world. Growing demand for LNG and unexpectedly fast growth in China in particular have been a boon for U.S. producers hoping to sell natural gas overseas as an outlet for their record production.
Trump's Turkey tariffs hike expected to hit Kinder Morgan gas pipeline project -- President Donald Trump's plan Friday to double tariffs on steel imported from Turkey to 50% could place additional financial pressure on Kinder Morgan's proposed 1.98 Bcf/d Gulf Coast Express Pipeline and dampen prospects for future US natural gas projects. The escalating trade headwinds for domestic pipeline operators come at a time when transportation constraints in the prolific Permian Basin shale play have increased demand for new takeaway capacity to deliver supplies to market for use in exports and to serve power-hungry Mexico.Houston-based Kinder Morgan, which moves more than a third of the gas consumed in the US, is sourcing 144,000 mt of steel pipe from Turkish producer Borusan Mannesmann to be used for Gulf Coast Express. Welspun Tubular is set to produce about 175,000 mt for the pipeline at its Little Rock mill."We continue to be concerned that these sorts of trade actions threaten important energy infrastructure projects, and ultimately hurt American consumers and businesses," the Interstate Natural Gas Association of America said in a statement. The trade group for the industry said "companies that made purchasing agreements months or years ago, before the announcement of Section 232 tariffs, are now being unfairly punished for participating in international trade." A Kinder Morgan spokeswoman, Sara Hughes, declined to say whether Trump's latest decision involving tariffs on steel imports from Turkey would delay or imperil Gulf Coast Express. She noted that the company has a pending request to the US Commerce Department for an exclusion from Trump's previous 25% tariffs on steel imports from Turkey. Gulf Coast Express is currently first in queue among a handful of pipeline expansions designed to alleviate Permian transportation constraints.
Energy Executives Lament Trump Tariffs As Costs Rise On Pipeline Projects - U.S. President Donald Trump’s proposal to double tariffs on steel and aluminum from Turkey could push up costs even further for domestic oil and gas pipeline projects, as energy executives said they were already struggling from earlier tariff rises. There are more than a dozen U.S. energy pipelines on the drawing board, some of which are still seeking financing. The projects would pave the way for greater U.S. oil and gas exports and relieve a bottleneck in West Texas shale fields that is starting to pinch output in the region. Turkey delivers just 4 percent of steel mill imports, valued about $1.18 billion last year, according to the U.S. Department of Commerce. But doubling tariffs on a supplier could force buyers to turn to other steel makers and, in turn, lift steel prices that have already ballooned in recent months. On Friday, Trump authorized a doubling of tariffs on Turkish steel and aluminum imports - to 50 percent and 20 percent, respectively - ratcheting up a diplomatic dispute with the NATO-member country. The Trump administration’s original move in March to raise tariffs on most steel and aluminum imports was proposed to safeguard U.S. jobs against overseas rivals. That had already added $40 million to the cost of a Plains All American (PAA.N) crude oil pipeline that will use steel supplied by a Greek company, Plains executives said. “We are moving forward with the project, but believe that imposing a tax on pre-existing orders is unjust, especially considering the specific materials we purchased abroad were not readily available in the U.S.,” Willie Chiang, Plains’ chief operating officer, said on Tuesday. The trade actions “threaten important energy infrastructure projects,” said Catherine Landry, a vice president at trade group Interstate Natural Gas Association of America. Companies were “being unfairly punished for participating in international trade,” she said.
Big Oil is racing to pump all the oil out of Texas - The oil industry is shelling out billions of dollars in a series of acquisitions in the Permian Basin, the hottest oilfield in the world.The latest deal came on Tuesday when Diamondback Energy agreed to purchase shale producer Energen for $9.2 billion, forming one of the largest players in the Permian.Late last month, BP inked a $10.5 billion deal to buy oil assets in Texas. It was BP's biggest acquisition in two decades and first major investment in the United States since the Deepwater Horizon disaster in 2010.And Concho Resources recently completed a $9.5 billion purchase of RSP Permian that created the largest shale producer in the Permian.The rush of deals underscores how eager companies are to get a foothold in the region.Rapid technological advances have dramatically slashed the cost to frack in the Permian. Production is spiking so much that Texas is on track to surpass Iran and Iraq, both OPEC members. That would make Texas No. 3 in the world if it were a country."It's the most desired region in the United States, if not globally," said Michael Tran, director of global energy strategy at RBC Capital Markets. RBC estimates that Permian production will more than double over the next seven to 10 years, to about 6.5 million barrels per day. That's more than the entire United States produced in early 2012. "From a price perspective, the Permian Basin is extremely attractive," Tran said. "Nobody doubts the rock."
Crude-By-Rail Could Save The Permian Boom - Crude-by-Rail (CBR) has been a savior for North American producers seeking higher returns for heavily discounted crudes caused by a lack of pipeline take-away capacity. And CBR, once again, is on the rise. North American shipments of petroleum and petroleum products are up over 10% year-to-date compared to 2017. In May 2018, nearly 200,000 barrels per day were shipped by rail from Canada to the U.S., nearly five times that of June 2016. But, the story of CBR is really about how price differentials became so large in certain regions.For Western Canadian producers, intense anti-pipeline opposition, regulatory changes, legal limbo, political tensions and foreign interference from well funded U.S. environmental lobbies have muddled new projects. In Western Canada, new export capacity has been politically denied (Northern Gateway), cancelled (Energy East), or is still in the process of getting the darn shovels in the ground (Trans Mountain Expansion, Keystone XL, and Enbridge Line 3 Expansion).For U.S. producers, the story is quite a bit different. While anti-pipeline opposition has been present, at Standing Rock for example, U.S. midstreamers largely could not keep up with blistering pace of production set off by the “shale revolution.” The US Energy Information Administration (EIA) estimates that 2018 US crude production will more than double that of 2008 and sit around 10.7 million barrels per day. Often pipelines were needed where there was no previous or oil or natural gas infrastructure. In addition, pipelines can’t be built overnight: Years of planning, permitting, and construction are required.With global crude prices now stabilized from the price crash in 2015/2016, all is not well in Western Canada and West Texas/Southwest Mexico. Massive price differentials are preventing some producers from enjoying the current price recovery. A large Western Canadian Select-West Texas Intermediate (WCS-WTI) differential is back, sitting at a painful $27 US per barrel (August 13, 2018). And Morgan Stanley suggests that with increasing Permian production and lack of take away capacity, the Midland-WTI differential of $15.50 per barrel (July 2018) could blowout to $25-$30 per barrel in 2019. However, there are some signs that CBR may not be the savior it is hoped to be. To start, lease rates for DOT 117 cars have jumped from $400 to $1000 per month. The size of the U.S. crude oil fleet sits at about 15,500 cars, compared to nearly 51,000 in 2014. And tariffs affecting new pipeline construction could also impact the rail industry.
Opponents of Enbridge Line 3 pipeline project file appeal -— Opponents of Enbridge Energy’s planned Line 3 replacement are asking the Minnesota Court of Appeals to declare that the environmental review for the controversial project fails to meet the legal requirements and needs to be redone. The Minnesota Public Utilities Commission approved the project in June, giving Enbridge a green light to replace its aging Line 3 crude oil pipeline across Minnesota. The PUC declined to reconsider its approval of the review. But the indigenous environmental group Honor the Earth says its filing Wednesday could throw that approval into question, since an adequate environmental review is required for approval and construction. The appeal argues that the Line 3 review failed to adequately analyze the potential impacts of oil spills along the route or the potential harm to tribal resources. Friends of the Headwaters filed a similar appeal. Print Article
Judge Orders Full Environmental Review of Keystone XL in Nebraska - TransCanada's long-gestating Keystone XL (KXL) tar sands pipeline was dealt another setback after a federal judge in Montana ruled Wednesday that the Trump State Department must conduct a robust environmental review of the alternative pipeline route through Nebraska. U.S. District Court Judge Brian Morris sided with environmentalists, landowners and tribal plaintiffs in their challenge to the Trump administration. Pipeline opponents argued that the State Department's approval of the KXL was based on an outdated Environmental Impact Statement from 2014 of the original route, and accused the administration of trying to short-cut the permitting process. Morris ordered the State Department to conduct a thorough Environmental Impact Statement for the "Mainline Alternative" route, approved by Nebraska officials in November, to supplement the 2014 review. In his decision, Morris said the State Department has the "obligation to analyze new information relevant to the environmental impacts of its decision," according to Courthouse News Service. If built, the $8 billion 1,180-mile pipeline will transport heavy crude from Alberta's tar sands to U.S. Gulf Coast refineries. The controversial project has been at the center of an environmental fight for a decade. President Obama rejected the KXL in 2015 partly due to concerns about its contribution to climate change, but President Trump reversed the decision shortly after taking office. Plaintiffs in the case celebrated the decision. "This decision rejects the Trump administration's shameful attempt to ram through Keystone XL without bothering to take a hard look at its effect on wildlife and the environment," said Jared Margolis, senior attorney with the Center for Biological Diversity, in a statement. "It's always been painfully obvious what a disaster this pipeline will be—not just for our climate and local communities but for endangered species like the whooping crane. There's just no excuse for approving this terrible project."
Colorado’s oil and gas industry goes after reporters and signature gatherers in new fracking fight - As Colorado gears up for another fight over oil and gas drilling near homes and schools, this time the fossil fuel industry is reportedly doing whatever it takes to win. In the latest flare-up, the oil and gas industry used a website to single out individual journalists for criticism. At the same time, pro-industry protesters were reportedly shadowing canvassers who were gathering signatures to get a measure — Initiative 97 — on the November ballot that would increase the distance between drilling sites and homes. Colorado Rising, the anti-fracking group behind the ballot initiative, issued a statement last week claiming “harassers were paid to intimidate petition circulators and discourage voters from signing” the petition to get the initiative on the ballot. Anne Lee Foster, a Colorado Rising volunteer, told Colorado Public Radio that an anonymous employee at Anadarko Petroleum shared an internal document that appeared to ask employees to report when they see Initiative 97 canvassers. The letter includes an email address and a text message hotline, Foster said. Anadarko had not returned a request for comment from ThinkProgress at the time this article was published. With huge reserves of oil and gas and an active environmental and clean energy movement, the state often finds itself at the center of the nation’s fossil fuel wars. Oil and gas companies have increasingly been moving into suburban and urban areas of Colorado in search of new drilling opportunities; at the same time, suburban sprawl is colliding with oil and gas fields as housing developers build new communities north of Denver.
Frackers Burn Cash to Sustain U.S. Oil Boom - WSJ --American oil companies—primed to reap the benefits of rising prices after years of wringing more from wells for less—are seeing profits erode in the face of rising costs. Those operational challenges make balancing lofty growth objectives and demands for fiscal restraint increasingly difficult. If the companies continue to stumble, the result could be a higher cost of capital to finance the ongoing U.S. energy boom or a slower pace of growth.Two-thirds of U.S. oil producers failed to live within their means in the second quarter, even as oil rose above $70 a barrel. Collectively, 50 major U.S. oil companies reported in their second-quarter results that they have spent $2 billion more than they took in, according to an analysis of free cash flow by FactSet.As oil prices have risen, profits “have improved, but they’re not there yet in terms of making money,” said Todd Heltman, a senior energy analyst at investment firm Neuberger Berman Group LLC. “The realization is setting in that it’s going to take longer than investors thought for them to generate free cash flow and deliver more powerful earnings.”Pioneer Natural Resources, one of the biggest operators in the Permian Basin of West Texas and New Mexico, told investors a year ago it expected to largely make up for rising operating costs with “efficiency gains” such as producing more from each well. Last week, Pioneer reversed course and raised its annual spending forecast to $3.3 to $3.4 billion, from $2.9 billion, to produce roughly the same amount of oil.“We’ve had a more significant increase in cost issue than we would have assumed,” Pioneer Chief Executive Tim Dove told investors. Some of the new spending will push up output next year, he said.The drilling frenzy has increased demand for materials like sand and water that are used in hydraulic fracturing, driving up prices.In recently reported second-quarter earnings, more than a dozen shale companies either lowered this year’s production targets, said t hey would have to spend more to extract roughly the same amount of oil and gas or missed analyst expectations for growth. To be sure, many continue to expect their production to increase compared to last year, but they are having to spend more to meet those goals.
The Fracking Industry Is Cannibalizing Its Own Production, Increasing Spill Risks -- The first thing to understand is that this is simply a problem of the industry being greedy. The oil producers are drilling too many wells in close proximity to one another, and when they frack the newer wells — known as child wells — those “bash” or “hit” the older wells and cause problems.In a typical frack site, the production begins with a first test well, which is known as the parent well. The wells drilled in proximity to the parent well are called child wells.What is happening is that not only are the child wells cannibalizing the production of the existing parent well, but when the child wells are fracked they can create “frac hits” that damage the parent well. These frac hits can reduce the pressure in the parent well leading to lower production, they can damage the parent well to the point of it being a “dead” well and, of course, they can lead to spills and environmental contamination.Claudio Virues, a senior reservoir engineer with the oil and gas company Nexen, explained the basic problem of frac hits in the Journal of Petroleum Technology.“You usually have two scenarios,” Virues said. “One may be that you have a temporary loss of production, but you will recover to the trend that you had before. The other will be really bad for your production and reserves.”Bob Barree, who runs the Petroleum engineering consulting firm Barree Associates, explains the “really bad” scenario.“You put the well back on production and you’ve lost your pressure, the velocity, the inflow capacity, and the well is just dead,” Barree said.And that means the fracking industry loses even more money.
Fracking Wastewater Spikes 1,440% in Half Decade --Between 2011 and 2016, fracked oil and gas wells in the U.S. pumped out record-breaking amounts of wastewater, which is laced with toxic and radioactive materials, a new Duke University study concludes. The amount of wastewater from fracking rose 1,440 percent during that period. Over the same time, the total amount of water used for fracking rose roughly half as much, 770 percent, according to the paper published Wednesday in the journal Science Advances."Previous studies suggested hydraulic fracturing does not use significantly more water than other energy sources, but those findings were based only on aggregated data from the early years of fracking," "After more than a decade of fracking operation, we now have more years of data to draw upon from multiple verifiable sources."The researchers predict that spike in water use will continue to climb.And over the next dozen years, they say the amount of water used could grow up to 50 times higher when fracking for shale gas and 20 times higher when fracking for oil—should prices rise. The paper, titled "The Intensification of the Water Footprint of Hydraulic Fracturing," was based on a study conducted with funding from the National Science Foundation. "Even if prices and drilling rates remain at current levels, our models still predict a large increase by 2030 in both water use and wastewater production," The shale industry has been heavily focused on amping up the amount of fossil fuels it can pump per well by drilling longer horizontal well bores and using more sand, water and chemicals when fracking (which raises the costs per well and, as DeSmog recently reported, raises risks of water pollution). But the water use and wastewater production per well have been growing even faster than the per-well fossil fuel production, the researchers found, labeling the water demand and wastewater growth "much higher" than the oil or gas increases.
Fracking Water Use Skyrockets, Creating 1,440 Percent More Toxic Wastewater -- Fracking companies used 770 percent more water per well in 2016 than in 2011 across all the United States’ major gas- and oil-producing regions, according to a new study. The number of new fracking wells decreased as gas prices fell, but the amount of water used per well skyrocketed, with up to 1,440 percent more toxic wastewater generated in the first year of each new well’s production period by 2016. The research, published Wednesday afternoon in the peer-reviewed journal Science Advances, raises new concerns that hydraulic fracturing, the controversial drilling technique used to extract oil and gas trapped deep in bedrock, imperils vital drinking water reserves. In regions where the warming climate is drying sources of fresh water, fracking intensifies pressure on an already-strained system while increasing the availability of fuels that cause emissions, speeding up the rise in temperatures. Fracking also produces huge volumes of wastewater laced with cancer-causing chemicals, salts and naturally-occurring radioactive material that can cause earthquakes and contaminate aquifers when pumped underground. The study found that if gas and oil prices rise and production increases to the levels of the early 2010s, when fracking first took off, water use and wastewater production could multiply 50-fold for gas drilling and 20-fold for oil extraction by 2030. Even if future drilling rates stay at 2016 levels, the study predicts “a large increase of the total water use for both unconventional oil and shale gas basins,” with a surge in wastewater creation to match.
Pale Blue Dot: University must protect community from oil industry -- There over 1,071 active oil wells in the city of Los Angeles, 759 of which are within 1,500 feet of residential areas. Due to a history of discriminatory zoning, the majority of these dangerous neighborhood wells are functioning in South L.A., in close proximity to USC. But even though these low-profile processing sites are not as visually striking as their old-fashioned counterparts, they continue to impose themselves in the lives of Angelenos.Oil extraction sites are extremely dangerous to the people who live near them, leaking gases and pollutants into homes, schools, hospitals and public spaces. Living near a development site can increase cancer risk and lead to conditions such as headaches, nausea and upper respiratory illness. There is also a constant risk of deadly accidents due to the use of harmful acids, toxic gases and explosive materials at these facilities. Noise pollution from gas compressors, drills and other heavy equipment can cause sleep issues and raise blood pressure, while long-term exposure to noise pollution can contribute to endocrine issues, diabetes and learning disabilities in children. Now that much of the easily accessible oil has been drawn out of the area, companies are turning to experimental, generally unregulated methods like acid stimulation and hydraulic fracturing, or “fracking.” These methods involve shooting a slurry of water and corrosive chemicals into the earth in order to drill into hard-to-reach areas, and can trigger frequent, violent earthquakes. They are so new that their health effects have yet to be formally studied, but anecdotal evidence indicates that residents living near fracked wells can develop chronic cases of coughing and wheezing, and that pregnant women living near fracked wells are more than 30 percent more likely to give birth to a premature or high-risk baby. As oil extraction methods become more extreme and secretive, the surrounding neighborhoods — mostly low-income communities of color — become more at-risk.
The Dakota Access Pipeline wants to ship even more oil across tribal lands - As if the original Dakota Access Pipeline didn’t cause enough drama, its developer now wants to expand the crude oil pipeline, which is still pending a new federal environmental review.Energy Transfer Partners CEO Kelcy Warren spoke at an event Monday where he mentioned he’d be announcing an expansion of the 1,172-mile long pipeline soon, according to the Bismarck Tribune. The energy company had tried to gauge interest back in March, and, apparently, the interest is there. Energy Transfer Partners hinted at this expansion last week, too.Since 2017, the pipeline has moved 500,000 barrels of oil a day through four states, from the Bakken Formation in North Dakota to Illinois. A company spokesperson told the Bismarck Tribune the company is considering increasing that amount to 570,000 barrels of oil a day. In North Dakota, at least, the pipeline is permitted to carry up to 600,000 barrels.What’s most confusing, perhaps, is how this expansion will happen when the Army Corps has yet to issue a final court-mandated environmental review for the project. That review was supposed to be completed in April, but the federal agency now expects to complete it later this month.The Standing Rock and Cheyenne River Sioux tribes remain in litigation with the company and the Army Corps of Engineers over the unfinished environmental review. While the Army Corps blames their lack of cooperation for the delay, the court is also keeping the relevant tribes from getting too involved. The whole situation is a heated mess with more opponents on the offense down in Louisiana where they’re challenging the company’s Bayou Bridge Pipeline, which would ultimately connect to Dakota Access. This expansion may just exacerbate the already-testy situation.
ND oil production drops as operators 'tap the brakes' | Grand Forks Herald: — North Dakota oil production dropped nearly 2 percent in June as producers scaled back activity, primarily to keep natural gas flaring from exceeding state limits, the state's top oil regulator said Thursday, Aug. 16. The state produced an average of nearly 1.23 million barrels of oil per day, a drop of more than 20,000 barrels per day from the May record of nearly 1.25 million barrels. "Industry's tapping the brakes a little bit," said Lynn Helms, director of the Department of Mineral Resources. Operators flared 388 million cubic feet of natural gas per day in June, falling short of the gas capture target set by the North Dakota Industrial Commission for the second month in a row. Helms said operators voluntarily restricted oil production in June in order to stay in compliance with the gas capture policy, which calls for companies to capture 85 percent of Bakken natural gas. Natural gas production decreased about 1 percent in June to an average of 2.3 billion cubic feet per day, according to the preliminary figures. Operators captured 83 percent of natural gas statewide in June and 84 percent of Bakken natural gas, Helms said.It continues to be rare for regulators to restrict oil production for companies that fall below the gas capture target. Eleven operators captured less than 85 percent of Bakken natural gas in April and nine fell below the target in May, according to the Department of Mineral Resources. No oil production restrictions were imposed for April or May, said department spokeswoman Katie Haarsager. June flaring figures are still being analyzed. The gas capture target is set to increase to 88 percent in November. Helms said operators are concerned about reaching that goal, but they'll get some relief with two gas plants scheduled to come online later this year. Currently, natural gas production exceeds processing capacity, but six new plants or expansion projects are under construction or in development.
DUCs in the Lower 48 still growing - The number of DUCs, drilled but uncompleted wells, in the Lower 48 U.S. states seven most prolific plays/basins rose by 165 from June to July, the Energy Information Administration reported. With the added 165 DUCs, a total of 8,033 drilled, but uncompleted wells were on the books as of July 31, up from 7,868 in June. The Permian Basin by far added the most DUCs from June to July, 167, more than five times the number added by the Eagle Ford Shale play, which added the second-most DUCs. The Permian’s total DUC count rose to 3,470 in July, from 3,303 in June, Kallanish Energy reports. The Eagle Ford added 32 DUCS from June to July, bring its total to 1,512, from 1,480, EIA reported. The Anadarko and Bakken were the other two plays/basins that added DUCS, seven and four, respectively, bringing their total DUC count to 923 and 760, respectively. The Niobrara saw the most DUCs converted to producing wells, as 40 wells were turned, bringing its DUC count to 432, from 472. Appalachia, which includes the Marcellus and Utica Shale plays, turned five DUCs to production, bring down its total remaining DUC number to 754. The Haynesville Shale was the lone play/basin that saw no change in DUCs from June to July, staying steady at 182.
US shale growth will offset global production problems over the coming months, analysts say -- A sustained upswing in U.S. shale growth is likely to offset global production problems over the coming months, energy analysts told CNBC on Wednesday.The mood music in the energy market has been heavily influenced by a flurry of demand-side developments of late, with investors continuing to monitor an escalating trade war between the U.S. and China, the financial crisis in Turkey and a resurgent U.S. dollar.Yet, industry analysts point out the U.S. shale boom is perhaps the most notable supply consideration not currently receiving the attention it deserves."The explosion in U.S. tight oil production has long been the dominant supply catalyst within the energy complex but now finds itself at the tail end of concerns. Even so, its ascent continues apace," Stephen Brennock, oil analyst at PVM Oil Associates, said in a research note published Wednesday. On Tuesday, the American Petroleum Institute (API) reported U.S. crude stocks rose by almost 4 million barrels per day in the week to August 10 — climbing to levels of 410.8 million barrels.Alongside a weakening global economic outlook, the API report appeared to weigh on oil prices on Wednesday afternoon, with international benchmark Brent crude trading at around $71.97 — down almost 0.7 percent. Meanwhile, U.S. West Texas Intermediate (WTI) stood at $66.38, off nearly 1 percent."U.S. shale doom-mongers should not get ahead of themselves. They ought to remember that the U.S. shale patch is in better financial shape than ever … When it comes to U.S. shale, it is still very much a case of the only way is up," Brennock said.
Rule Change Cuts Demand for Canadian Oil | Rigzone -- As if pipeline bottlenecks weren’t enough, Canadian heavy oil producers are facing a new barrier to marketing their crude. New rules limiting the amount of sulfur allowed in shipping fuel is expected to cut demand for both high-sulfur fuel oil and the sour crude that yields it. In Canada, that could extend -- or worsen -- the biggest price slump in nearly five years. As surging production runs up against limited pipeline space, Western Canada Select’s discount to West Texas Intermediate widened to more than $31 a barrel this month from an average of about $13 a barrel last year, data compiled by Bloomberg show. The bigger discount is needed to incentivize shipping by rail, which costs more, Kevin Birn, a director on the North American crude oil markets team at IHS Markit, said in a phone interview. While the pipeline bottleneck is expected to ease up next year, a new International Maritime Organization rule that goes into effect in 2020 will keep heavy crude at a discount of $31-$33 a barrel against WTI, according to a July report by the Canadian Energy Research Institute, or CERI. “We think you get a double whammy effect” in 2020, he said. “You have prices set by rail and, compounding that, is the IMO” rule. Under the new rules, ocean-going ships worldwide will either have to install expensive, sulfur-removing scrubbers or use a fuel that has 86 percent less sulfur. The resulting increase in demand for lighter crude will push more crude toward the complex North American refineries that currently turn heavy Canadian oil into higher-value fuels such as gasoline and diesel, putting downward pressure on heavy crude prices, according to CERI. The rule change will come just as Canadian producers should be getting some relief in the form of greater pipeline access to U.S. and international markets. Enbridge Inc.’s expanded Line 3, is schedule to start operating in late 2019, delivering heavy oil from Alberta to Wisconsin. The C$9.3 billion ($7.1 billion) expansion of the Trans Mountain oil pipeline from Alberta to the British Columbia coast is scheduled to start about a year later and TransCanada Corp.’s Keystone XL pipeline awaits a final investment decision but could start operating early in the next decade.
Global Oilfield Service Sector to Hit Pre-Downturn Market Levels by 2024 - Rystad Energy announced Friday that it expects the global oilfield service sector to be back at pre-downturn market levels by 2024.The independent energy research and business intelligence company said shale will make up 23 percent of the total service market in 2024, compared to 19 percent in 2014.“Offshore is losing market share due to the sanctioning draught in 2015-2017, which is keeping greenfield spending at lower levels going forward,” Rystad said in a statement published on its website. “In terms of service markets, well services and commodities, subsea and MMO will surpass 2014 levels in 2024, but drilling contractors and EPCI will not due to continued pressure on service prices, downsizing and efficiency gains in the value chain,” the statement added.Earlier this year, a report from BMI Research outlined that oilfield services companies around the globe would face stronger demand for their services this year.“As some of the industry's most vulnerable companies to the fall in crude prices, rising commodity prices and strengthening demand for onshore services is reviving this sector after a three-year contraction,” BMI analysts said in a statement sent to Rigzone back in February.“Having retired or pulled back from a number of segments since 2014, we expect OFS [oilfield services] firms will redeploy assets into the field this year as investment activity begins to recover,” the analysts added.In the report, BMI highlighted that a rise in crude prices had boosted revenues at the top global OFS companies.“At Schlumberger and Halliburton, Q4 17 revenue rose by 15.1 percent year-on-year, 47.7 percent year-on-year, respectively,” the analysts stated. Last month, Rystad revealed that oil majors are “on pace” to approve over $37 billion in projects during the calendar year. The company said over 30 percent ($12 billion) of these had already been approved during the second quarter.
The One Oil Industry That Isn't Under Threat -- Peak oil demand might be near, but the consumption of oil for plastics will keep demand elevated for decades. Indeed, the IEA has said that plastics and other petrochemicals are the only sector in which oil consumption could continue to grow well into the 2030s. Rising plastic consumption is driven by population growth, higher median incomes and urbanization. Plastic production and consumption has absolutely skyrocketed over the last two decades and the growth in emerging economies such as China and India will ensure that consumption continues on its steep upward trajectory.While there are multiple feedstocks for plastics, solvents and other derivatives, the two main feedstocks are ethane and naptha, which come from natural gas and crude oil.Oil demand in the transportation sector is expected to peak, and while there is a great deal of disagreement over when we might arrive at that date, many forecasts converge at around the 2030s as the most likely period. But long before then, oil demand for transportation will begin to slow as more and more electric vehicles cut into the market share of the internal combustion engine.With oil demand in transit slowing, petrochemicals take on a larger role. Over the next two decades, petrochemicals could account for the largest portion of oil demand growth, and by 2035, petrochemicals will “account for almost all growth” by 2035, according to a new report from Wood Mackenzie. Surging petrochemical production and consumption largely comes down to plastics. To be sure, the ghastly levels of plastic in the world’s oceans and waterways have sparked a nascent movement to ban plastic, at least in some form. Starbucks made headlines when it recently announced plans to phase out plastic straws by 2020. In their place, Starbucks will use a recyclable strawless lid and alternative materials for straws. The company also said it would spend $10 million to develop compostable cups.
UK government drops fracking question from public attitudes tracker -- The government has stopped asking the British public whether they are for or against fracking for shale gas just weeks before the first fracking operation in seven years is due to start. The number of people against extracting shale gas has outweighed those in favour since 2015, and the latest polling by officials found 32% opposed with just 18% in support. Now the government, which backs fracking and recently relaxed planning rules to help the shale industry, has temporarily suspended that line of questioning. “This is scandalous as the government knows full well that there is overwhelming public opposition to fracking,” said Rebecca Long-Bailey, Labour’s shadow business secretary. Fracking, or hydraulic fracturing, is a way of extracting natural gas from shale rock formations that are often deep underground. The technology has transformed the US energy landscape in the last decade, owing to the combination of high-volume fracking – 1.5m gallons of water per well, on average – and the relatively modern ability to drill horizontally into shale after a vertical well has been drilled. Tony Bosworth, a campaigner at Friends of the Earth, said: “Perhaps having recently tried to change planning rules so that fracking companies could drill more easily, they were just scared of a record bad survey result for them this time, so have stopped even asking anymore.” The question was dropped from the latest update of the four-year-old public attitudes tracker run by the Department of Business, Energy and Industrial Strategy.
Russia loses bulk of WTO challenge to EU gas pipeline rules - (Reuters) - Russia largely failed in its bid to overturn the European Union’s gas market rules in a World Trade Organization ruling published on Friday. Russia launched the dispute in 2014, claiming that the EU’s “Third Energy Package” and the EU’s energy policy overall unfairly restricted and discriminated against Russia’s gas export monopoly Gazprom (GAZP.MM). Russia argued that the EU broke WTO rules by requiring the “unbundling” of gas transmission assets and production and supply assets, which effectively stopped Gazprom - long the major supplier of gas to Europe - from owning the pipelines through which it sent gas to the European market. Russia said the EU had unfairly discriminated in favor of liquefied natural gas and upstream pipeline operators by exempting them from those unbundling requirements. The panel of three WTO adjudicators ruled against Russia on those points. However, they upheld Russia’s complaint about an unbundling exemption for Germany’s OPAL pipeline, granted on condition that Gazprom supplied no more than 50 percent of the gas in the pipeline. The 50 percent cap could only be exceeded if 3 billion cubic meters of gas was released annually at a fixed price to competing suppliers on the Czech market. The WTO panel also agreed that Croatia, Hungary and Lithuania had discriminated against Russia by requiring a security of energy supply assessment for foreign, but not domestic, pipeline operators. The European Commission called the ruling an important positive outcome that secured the core elements of the Third Energy Package, a 2009 reform that sought to integrate the EU’s energy market while increasing competition. Russia’s Economy Ministry said the parts of the ruling that went in its favor would help to improve access for Russian gas on the European market, and to level the playing field for pipeline service providers.
Russian oil industry would weather U.S. 'bill from hell - (Reuters) - Stiff new U.S. sanctions against Russia would only have a limited impact on its oil industry because it has drastically reduced its reliance on Western funding and foreign partnerships and is lessening its dependence on imported technology. Western sanctions imposed in 2014 over Russia’s annexation of Crimea have already made it extremely hard for many state oil firms such as Rosneft to borrow abroad or use Western technology to develop shale, offshore and Arctic deposits. While those measures have slowed down a number of challenging oil projects, they have done little to halt the Russian industry’s growth with production near a record high of 11.2 million barrels per day in July - and set to climb further. Since 2014, the Russian oil industry has effectively halted borrowing from Western institutions, instead relying on its own cash flow and lending from state-owned banks while developing technology to replace services once supplied by Western firms. Analysts say this is partly why Russian oil stocks have been relatively unscathed since U.S. senators introduced legislation to impose new sanctions on Russia over its interference in U.S. elections and its activities in Syria and Ukraine. The measures introduced on Aug. 2, dubbed by the senators as the “bill from hell”, include potential curbs on the operations of state-owned Russian banks, restrictions on holding Russian sovereign debt as well as measures against Western involvement in Russian oil and gas projects. While the ruble has fallen more than 10 percent and Russian banking stocks have slumped 20 percent since the legislation was introduced, shares in Russian oil firms have climbed 2 percent, leaving them 27 percent higher so far in 2018 The prospects for the latest U.S. sanctions bill are not immediately clear. It would have to pass both the Senate and House of Representatives and then be signed into law by President Donald Trump.
Landmark Caspian Sea oil and gas agreement signed by five nations -- Iran and four ex-Soviet states, including Russia, agreed in principle on Sunday how to divide up the potentially huge oil and gas resources of the Caspian Sea, paving way for more energy exploration and pipeline projects. However, the delimitation of the seabed – which has caused most disputes – will require additional agreements between the nations bordering the sea, Iranian president Hassan Rouhani said. For almost three decades, the five coastal states – Russia, Iran, Kazakhstan, Turkmenistan and Azerbaijan – have argued over how to divide the world’s biggest enclosed body of water. And while some countries have pressed ahead with large offshore projects such as the Kashagan oil field off Kazakhstan’s coast, disagreement over the sea’s legal status has prevented some other ideas from being implemented. One of those is a pipeline across the Caspian which could ship natural gas from Turkmenistan to Azerbaijan and then further to Europe, allowing it to compete with Russia in the Western markets. Some littoral states have also disputed the ownership of several oil and gas fields, which delayed their development. “We have established 15-mile-wide (24km) territorial waters whose borders become state borders,” Kazakhstan president Nursultan Nazarbayev told a briefing after signing the Caspian convention. “Adjacent to the territorial waters are 10 miles of fishing water where each state has exclusive fishing rights,” he said.
Venezuela's PDVSA To Start Using 'El Petro' Next Week - Venezuela’s state-owned oil company PDVSA will start using the local cryptocurrency El Petro for all its transactions on August 20, President Nicolas Maduro said, as quoted by Sputnik. The president did not mention whether PDVSA’s business partners agreed with the change.Yet the shift to a cryptocurrency in all of PDVSA’s business dealings is only part of a much bigger monetary overhaul. From August 20, the petro will begin to be used in parallel with the national currency the bolivar, and its prices will be pegged to that of the bolivar. Maduro said that the central bank will start issuing daily exchange rates for the two as well. Last December, Maduro shocked analysts who follow both the country’s flirtations with default and the cryptocurrency community by announcing that Venezuela would launch the petro cryptocurrency, backed by oil, diamonds, and gold reserves, to help the country to “advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade.”The cryptocurrency was launched in February this year despite opposition from parliament. The digital currency will be backed by Venezuela’s oil and gold reserves. During the presale period alone, according to Maduro, the petro, which has already been sanctioned by Washington, generated US$6 billion in proceeds.The Venezuelan economy, however, has continued to deteriorate with thousands of people leaving for neighboring Colombia and Ecuador every day, prompting the Ecuadorian authorities to declare a state of emergency in several provinces. Meanwhile, Caracas has decided to knock off five zeroes from the bolivar as hyperinflation races ahead. How this will help matters remains unclear, but there is precious little else the government could do. Maduro, however, said during the presentation of the monetary reform that thanks to the addition of the petro to the national currency and the other changes this will entail, Venezuela will recover by 2020 as “a new economic model” is developed.
Marked for demolition? Ugandans on pipeline route fear land loss - Ugandan farmer James Mubona, 73, looked pensive as he sat in a blue plastic chair under a mango tree next to three of his four wives, one breastfeeding a five-month-old baby, contemplating the imminent loss of his 22-acre farm to an oil pipeline. The government is set to take about half of the land, which feeds Mubona’s 20 children and numerous grandchildren, to build the world’s longest electrically heated oil pipeline from northwest Uganda to Tanzania’s Tanga port on the Indian Ocean. “I am worried because I don’t know where to go when this land is taken,” Mubona told the Thomson Reuters Foundation from Kyakatemba village in Hoima District, a poor region along Uganda’s western border with the Democratic Republic of Congo. “When the pipeline takes a bigger portion of your land and you remain with a small portion, what do you do with that small portion?” Uganda discovered crude reserves estimated by government geologists at 6.5 billion barrels in the Albertine rift basin more than 10 years ago. The east African country aims to refine crude oil domestically and export some via a 1,445-km (900-mile) pipeline through neighboring Tanzania by 2020. An energy ministry official told Mubona that a chunk of his land will be used to run a 30-metre wide pipeline, road and power line from the refinery to the sea. Uganda signed an agreement in April with a consortium, including a subsidiary of General Electric, to build and operate a 60,000-barrel-a-day refinery that will cost up to $4 billion, the president’s office said. Yusuf Masaba, a spokesman for Uganda’s energy ministry, said the entire pipeline route had been mapped out and plans to compensate and resettle people were at an advanced stage. “Once the government valuer is done with valuation, then compensation will be done. I cannot say when they will be compensated,” Masaba told the Thomson Reuters Foundation.
BP offloads last two stranded oil cargoes to Shandong refiner - sources (Reuters) - Oil major BP (BP.L) on Tuesday offloaded about 1 million barrels of Angolan crude from supertanker ‘Olympic Light’ to an independent Chinese refiner after holding the oil at sea for about three months, people with knowledge of the discharge said on Wednesday. The oil had been aboard one of four supertankers held up or delayed off China’s east coast near Shandong since as long ago as April, unable to discharge BP’s oil due to slowing buying from private refiners in the world’s second-biggest economy. All four have delayed cargoes, totalling about 4 million barrels, have now been offloaded to Shandong Qingyuan Group, one of China’s largest independently run lubricant producers, according to sources.. Shippers and oil traders said it was not unusual for producers like BP to ship cargoes before finding a buyer, but having cargoes orphaned for several months was uncommon. It wasn’t immediately clear who will pay the bill for the months’ demurrage - charges paid by a vessel’s charter to its owners for delayed operations - which shipping agents have estimated costs roughly $30,000 a day for a supertanker. The ‘Olympic Light’ discharged its cargo at Qingdao port, the people said. Last Sunday, BP discharged a similar-sized cargo at Rizhao port from another supertanker, ‘Olympic Luck’, to the same refiner, the people said, after holding the oil at sea for about one and half months. Qingyuan, which operates a 104,000 barrels per day refinery, is a regular customer of BP, which has expanded its crude oil marketing to Chinese independent refiners since 2015 after China opened crude oil imports to nearly 40 local plants.
UAE oil giant making ‘good progress’ with expansion plans in Saudi Arabia, executive says --The United Arab Emirates' biggest fuel retailer promised investors on Monday that there is "a lot more to come" regarding the firm's expansion plans in Saudi Arabia.John Carey, ADNOC Distribution's deputy chief executive told CNBC's "Capital Connection" that the company is making good progress on its plans to expand in the region."Our expansion plans: Firstly, across the UAE … we have made very, very good progress on that. We have got sites that we will be opening in the coming months across Dubai which gives us a stronger platform for our customers.""And, as you said, in Saudi Arabia, we have gained our license and we are in talks with a number of partners and people in Saudi Arabia to ensure we develop that market in a strong, responsible way as well. So good progress but a lot more to come," he added.
Eni Plans More Offshore, Onshore Egypt Drilling --Eni has further strengthened its position in Egypt by securing the “Nour” offshore exploration license in the East Nile Delta Basin of the Mediterranean Sea, the Italy-based company reported Tuesday. Eni said that it will drill an exploration well in the concession, located approximately 50 kilometers offshore in water depths ranging from 50 to 400 meters, during the second half of this year. The company also noted that it will operate Nour through its IEOC subsidiary and in conjunction with Egyptian Natural Gas Holding Co. (EGAS). Eni and Tharwa Petroleum Co. hold 85-percent and 15-percent interests, respectively, in the 739-square-kilometer Nour license. In a separate announcement Tuesday, Eni also stated that Egyptian authorities have granted lease extensions for additional offshore and onshore assets. Offshore, the company reported that it has secured a new Nile Delta Concession Agreement that allows a 10-year extension of the Abu Madi West Development Lease, which includes the prolific “Great Nooros Area.” Eni noted that its Nooros field is located in Great Nooros and added that the lease extension will enable it to conduct further exploration activities in another asset in the lease: the onshore El Qar’a gas discovery. “The Great Nooros Area’s asset lease extension strengthens Eni’s gas portfolio while confirming the success of Eni’s strategy of near field exploration that has revitalized production in the Nile Delta area, where the Nooros field is currently producing 32 million cubic meters of gas per day,” stated Eni, which holds a 75-percent stake in the concession. BP owns the remaining 25 percent stake, and Petrobel – a joint venture of IEOC and Egyptian General Petroleum Corp. (EGPC) – operate “Nile Delta.” Egyptian authorities have also granted a five-year extension of the onshore Ras Qattara Concession Agreement and a development lease in the country’s Western Desert basin, Eni reported. The company stated that the extension will facilitate a new drilling campaign in the Zarif and Faras fields.
Sanctions closing in, Iran to attend September OPEC monitoring committee to protest oil quota reallocation — Iran will send its oil minister, Bijan Zanganeh, to a September meeting of the monitoring committee overseeing OPEC's supply accord with Russia and other allies, in another bid to preserve the sanctions-hit country's crude market share. The Joint Ministerial Monitoring Committee is scheduled to meet September 23 in Algeria, just six weeks before US sanctions that could shut in 1 million b/d or more of Iran's crude sales are scheduled to take effect November 5. Chaired by Iran's chief geopolitical rival Saudi Arabia, the JMMC is tasked with assessing member compliance with production quotas in force since January 2017. But with OPEC and its partners agreeing in late June to a 1 million b/d output rise, Saudi energy minister Khalid al-Falih has said the committee will be responsible for reallocating those quotas, given some countries' inability to pump more. That has drawn fierce opposition from Zanganeh, who maintains that the deal does not allow countries to produce beyond their individual quotas. Besides Falih, the committee comprises ministers from Russia, Kuwait, Venezuela, Algeria and Oman. Zanganeh is not a member, though ministers from the 24 participating countries in the OPEC/non-OPEC deal are welcome to observe its proceedings. His attendance at the September meeting was confirmed to S&P Global Platts by an Iranian oil ministry official who declined to comment further. Since the output increase was announced, the minister has written several strongly worded letters to his OPEC counterparts denouncing their production boosts and accusing them of violating OPEC statutes, which require the organization to act in the collective interest of all members.
Who Profits From Iran’s Oil Major Exodus? --Donald Trump’s decision to leave the Iran nuclear deal and slap sanctions on Teheran is the most significant energy development of 2018. The first round of Iran sanctions, in place since August 4th, targeting Iran’s automotive and metal sectors, has only added fuel to the increasingly dangerous geopolitical fire, as Teheran’s blocking the Hormuz Strait has become a fully imaginable prospect for the first time since the Iran-Iraq war ended in 1988. Understandably, media are buzzing with expert analysis regarding trade implications – spreads narrowing, crude flows changing and third-party actors using the Iran-U.S. conflict to their advantage – yet it would be also of interest to look at the upstream ramifications of the impending sanctions. By looking closely at five unfolding scenarios, one can get a fairly clear understanding of where things are headed if the implementation of sanctions goes ahead as currently expected – meaning no softening of bellicose rhetoric, no top-level meeting like the Trump-Kim Summit in Singapore and no significant pressure from European countries that had alleged to stick to their commitments under the JCPOA. Following the Iran Petroleum Contract (IPC) Summit in November 2015, 18 exploration blocks were appraised by international majors, ranging from Total to Russian companies like Gazprom Neft and Lukoil. Despite their apparent intention to keep Iranian projects intact, European companies seem to be on the retreat from Iran, however, since nature abhors a vacuum, as it seems their place will be quickly replaced by Russian and Chinese national oil companies.
U.S.-Iran Sanctions Give China Lead in Globe's Top Gas Field -- China National Petroleum Corp. is expected to take the lead on a $5 billion project to develop Iran’s share of the world’s biggest gas deposit, taking over from France’s Total SA, which halted operations after U.S. President Donald Trump reimposed sanctions on the Islamic Republic. State-owned CNPC, which joined a consortium with Total and Iran’s Petropars Ltd. in 2016 to develop Phase 11 of the South Pars Gas field, is set to increase its stake in the project from the current 30 percent. Total had originally agreed to take a 50.1 percent interest. CNPC will become the lead operating partner, the state-run Islamic Republic News Agency reported, citing Mohammad Mostafavi, National Iranian Oil Co.’s investments and business head. Terms of the contract haven’t yet officially changed, according to Shana, the Oil Ministry’s news service. Calls to CNPC went unanswered on Sunday. Total declined to comment. Total, which finalized its agreement with Iran in July 2017, had already spent some 40 million euros ($45.7 million) on the project when Trump announced in May that the U.S. would exit the 2015 international nuclear deal with Iran and reimpose sanctions on Tehran. The first round of U.S. sanctions was put back into place this week, with more to come in November, greatly complicating efforts by companies that rushed into the Islamic Republic after the nuclear accord was signed by Iran, the U.S. and five other countries plus the European Union. Scores of European companies, including Total, have withdrawn from the oil-rich Persian Gulf country since the U.S. reversal. Trump marked the return of sanctions with a tweet on Aug. 7: “Anyone doing business with Iran will NOT be doing business with the United States.” Iran, which holds the world’s largest natural-gas reserves, shares South Pars, also known as the North Dome field, with neighboring Qatar. Total had previously withdrawn from the field in 2009 because of sanctions. It planned initial investment of $1 billion for Phase 11, with the aim of eventually producing 2 billion cubic feet a day, or 400,000 barrels of oil equivalent including condensate, it said in July 2017. At the time, Total said the contract was for 20 years.
Iran Sanctions Fallout: China Takes Over French Share In Giant Iran Gas Project - When it comes to the Middle East, China has not been shy about its recent ambitions to expand its geopolitical influence in the Gulf region: Just last week we reported that the Chinese Ambassador to Syria, Qi Qianjin, shocked Middle East pundits and observers by indicating the Chinese military may fill the void left in the wake of the collapse of ISIS - and most regional armies - and directly assist the Syrian Army in an upcoming major offensive on jihadist-held Idlib province. And having staked a military claim in Syria, China was next set to expand its national interest in that other key regional nation which has been the source of so much consternation to its neighbors and world powers in recent months and which has emerged as a key source of crude oil exports to Beijing: Iran. It did so today when China’s state-owned energy giant, CNPC - the world's third largest oil and gas company by revenue behind Saudi Aramco and the National Iranian Oil Company - finally took over the share in Iran’s multi-billion dollar South Pars gas project held by France’s Total, Iran's official news agency Shana reported on Saturday. To many the move had been expected, with only the details set to be ironed out. Recall that back in May we wrote that CNPC - the world's third largest oil and gas company by revenue behind Saudi Aramco and the National Iranian Oil Company - was set to take over a leading role held by Total in a huge gas project in Iran should the French energy giant decide to quit amid US sanctions against the Islamic Republic.That finally happened when the Chinese energy giant took advantage of Trump's sanctions to step in the void left by the French major. As a reminder, Total signed a contract in 2017 to develop Phase II of South Pars field with an initial investment of $1 billion, marking the first major Western energy investment in the country after sanctions were lifted in 2016. South Pars has the world’s biggest natural gas reserves ever found in one place. And after then the French company said it would pull out unless it secured a U.S. sanctions waiver - which it was unable to do - in June, the deputy head of the National Iranian Oil Company, Gholamreza Manouchehri, said that CNPC would take over if Total were to walk away.
Will Myanmar Become A Conduit For Iranian Crude Into China? - On June 1, sometime between the US withdrawal from the JCPOA in early May, and its demand in late June that Asian buyers fully halt Iranian oil purchases, PetroChina snuck in a shipment of Iranian crude through Myanmar to its Yunnan Petrochemical refinery in southern China. On any other route, this would have been just another Iranian oil shipment. But using the Myanmar-China oil and gas pipeline brings new complications. That’s because the pipeline has a new avatar - it is now a part of China’s Belt and Road Initiative, along with other large infrastructure projects that were not originally a part of BRI, but were included later to boost the profile of the program. Sending Iranian crude through an oil pipeline with the “Belt and Road” label removes any doubts of whether BRI’s projects have political motives or not. For critics of BRI, it adds fodder to the narrative that the infrastructure plan is a tool for China to undercut the influence of the US. BRI already has a serious public relations problem and is viewed with suspicion, sometimes for good reason. Earlier this week, the renewal of US secondary sanctions on Iran faced strong opposition from the remaining JCPOA signatories. China has made it clear it will continue to import Iranian barrels, and using a BRI project to do so will give the US ammunition to criticize BRI openly, potentially leaving the host country open to US reprisals. BRI has not been particularly polarizing so far, and its participants have included US allies. Oil and gas pipelines are magnets for controversy, however. From the Sumed pipeline in the Middle East to Nordstream 2 in Europe, there hasn’t been an international oil or gas pipeline that was devoid of geopolitics. Myanmar will be no different. The Panama-flagged Dore delivered its cargo of Iranian crudes at Maday Island on June 1, the only vessel to have shipped oil from Iran to Myanmar since the 13 million mt/year (260,000 b/d) Yunnan Petrochemical refinery in southern China started operations in August last year. . This was the first batch of Iranian Heavy crude processed by a PetroChina refinery, and is unlikely to be the last.
Slowdowns in China and India eat away at Asian oil demand (Reuters) - Oil demand from Asia’s biggest importers, China and India, is growing more slowly than expected, exposing weakness in two of the world’s largest economies and eroding a key pillar of global petroleum prices amid trade tensions. The two countries buy a combined 12 percent of the world’s oil, and their growth has helped drive the recovery in oil prices since 2016. Yet their shipped imports in July were about half a million barrels per day (bpd) below their Jaunary-June average of 12.4 million bpd, shipping data shows. That has dragged down demand growth in Asia, despite inflated purchases ahead of U.S. sanctions on Iran and increased imports from Japan and South Korea as they struggle with record-setting heat waves. Shipping data shows annualized growth in demand from Asia’s five largest oil importers - China, India, Japan, South Korea and Taiwan - fell from more than 3.5 percent in 2016 to around 2 percent so far this year. “Everything is weakening, but from a pretty elevated level,” said Jeff Brown, president of energy consultancy FGE. Traders expect growth to slow further as the Iran sanctions take hold, the trade spat between the United States and China escalates, and as Asia’s emerging markets show signs of cooling. “Any further escalation in the trade conflict between them is clearly an important downside risk and could lead to a further slowdown in oil demand growth for 2019, leading to a downward pressure on oil prices,” said Sushant Gupta, research director at energy consultancy Wood Mackenzie. Renewed U.S. sanctions against major oil exporter Iran, which from November will target the petroleum sector, are expected to disrupt the market. Iran’s oil exports peaked at almost 3 million bpd in May this year, but they have since fallen to around 2 million bpd as Asian buyers, including Japan, South Korea and India, began to shun its crude ahead of the sanctions.
OPEC Monthly Oil Market Report: Lowers 2019 oil demand growth forecast - According to OPEC's Monthly Oil Market Report, released this Monday, Saudi Arabia lowered its oil production in July even as the kingdom has pledged to raise output significantly to make up for an expected drop in Iranian exports. Key highlights:
• Saudi Arabia pumped 10.288 mil bpd in July, down 200k bpd from June.
• 2019 oil demand growth lowered by 20k bpd to 1.4 million bpd.
• 2019 non-OPEC oil supply estimate revised up by 30k bpd to 2.13 million bpd.
• July output rose 41,000 bpd m/m to 32.32 million bpd.
• Sees further tightness in the diesel market, partly due to lack of refining investments.
Saudi Arabia cuts oil production in July despite OPEC agreement to hike output --OPEC's oil production ticked higher in July, but cuts by top exporter Saudi Arabia weighed on the 15-member group's output just one month after it agreed to start pumping more crude.The Saudis throttled back drilling last month after agreeing with OPEC, Russia and several other producers toput more barrels on the market in June. The kingdom is facing pressure from big oil consuming nations like China and India, as well as the Trump administration, to tamp down fuel costs ahead of the renewal of U.S. sanctions on Iran, OPEC's third biggest producer.President Donald Trump is aiming to cut Iran's oil exports to zero by November, a policy that threatens to leave the world short of oil and boost prices at the pump if OPEC and Russia cannot fill the gap. A group of two dozen oil-producing nations has been limiting its production since January 2017 in order to drain oversupply, but has scaled back that policy in light of the Iranian sanctions and output declines in places like Venezuela and Angola."Compared to a year earlier, there has been an overall improvement in crude oil prices in 2018," OPEC said in its monthly report. "At the same time, product prices have generally followed the upward trajectory of crude oil prices."In another twist for the market, OPEC's latest report shows a significant discrepancy between July production figures provided by Saudi Arabia and data compiled by independent sources. While the kingdom says it cut output by about 200,000 barrels per day, an average of estimates from several outside sources puts the drop at nearly 53,000 bpd. Saudi Arabia had telegraphed the drop prior to the release of the report. However, S&P Global Platts and the U.S. Energy Information Administration estimated the Saudis actually hiked output to 10.6 million bpd in July, The Wall Street Journal reported last week. According to the Journal, the Saudis asked several sources whose estimates underpin the independent figure to make an adjustment for July, but Platts stuck by its analysis.
OPEC sees 33.40 mil b/d demand for its crude oil in H2 2018, but July output at 32.32 mil b/d — Platts - OPEC still has to show the market more crude oil barrels if it wants to avoid a supply squeeze later this year, the producer group's own analysis shows. In its closely watched monthly oil market report, OPEC's analysis arm forecast global demand for OPEC's crude at 33.40 million b/d for both the third and fourth quarters of 2018. That is 1.08 million b/d more than the bloc's July production level, as assessed by the independent secondary sources used by OPEC to track member output. But any market tightness will ease in 2019, OPEC forecast, as growth in non-OPEC supplies will far outpace the projected increase in global demand, dropping the so-called call on OPEC crude back down to 32.05 million b/d for the year. The report warned, however, that "if any unexpected supply outages should occur due to natural disasters/technical shortcomings and these coincide with any geopolitical supply disruption, it could bring the market into an imbalanced situation," adding that industry investment had yet to recover to levels seen before the 2014 price crash. As for the US-China trade dispute, OPEC said its analysis of probable outcomes indicates that "tariffs under the most likely case will not have a significant impact on global GDP or oil demand growth in 2018 and 2019." Still, OPEC nudged downward its forecasts of year-on-year oil demand growth for both 2018 and 2019, while raising its projections of year-on-year non-OPEC supply growth. World demand will average 98.83 million b/d in 2018, rising to 100.26 million b/d in 2019, OPEC said. Non-OPEC supply will average 59.62 million b/d in 2018 and 61.75 million b/d in 2019, with the US, Brazil and Canada contributing most of the growth. OECD commercial oil inventories stood at 2.822 billion barrels as of June, 33 million barrels below the five-year average but 251 million barrels above the January 2014 level, OPEC said. OPEC and 10 non-OPEC partners agreed on June 23 to boost output by 1 million b/d by reducing overcompliance with cuts that had been in place since January 2017. The move is intended to alleviate any shortages caused by the reimposition of US sanctions on Iran in November and Venezuela's continuing collapse. OPEC produced 32.32 million b/d in July, according to secondary sources, up 40,000 b/d from June. Saudi Arabia, OPEC's largest producer, has declared it would take on the bulk of the increase, but instead cut production by 50,000 b/d from June to 10.39 million b/d, secondary sources estimated. The kingdom self-reported an even larger drop of 200,000 b/d to 10.29 million b/d. Second-largest producer Iraq boosted its output 20,000 b/d to 4.56 million b/d, according to secondary sources, though it self-reported production of 4.46 million b/d, a 100,000 b/d increase from June.
Watch: All eyes on China's 'blue skies' announcement; Chinese LPG buyers seen to keep reselling US-origin cargoes – (Platts video) As the US-China trade war continues, Chinese LPG buyers are expected to continue reselling their US-origin cargoes, while taking in barrels from elsewhere. This move is seen to push up prices for non-US LPG for prompt delivery in the coming weeks.The LNG industry also continues to assess the impact of a potential 25% Chinese tariff on US LNG imports. If imposed, the tariff could affect future Atlantic-Pacific trade flows, and provide a lift to near-term Asian LNG prices.Meanwhile, the steel and metals markets are waiting for an official announcement on whether China will suspend more steel capacity in the coming winter heating season. An analysis jointly published by S&P Global Platts and S&P Global Market Intelligenceoutlines the "2+42" cities that are likely to be affected. In petrochemicals, margins for paraxylene producers from CFR Japan naphtha hit a near two-year early this month and market participants expect the bull run to continue for another two weeks, until the September futures contract expires.
Frothy oil market turns increasingly flat: Kemp (Reuters) - Persistent hedge fund liquidation over the last four months has weighed heavily on the oil market, both spot prices and calendar spreads, ending the previous rally and putting the cyclical upswing into a prolonged pause.Hedge funds resumed their liquidation of bullish long positions in petroleum last week, after a two-week hiatus, according to the most recent regulatory and exchange data.Hedge funds and other money managers cut their net long position in the six most important petroleum futures and options contracts by another 30 million barrels in the week to Aug. 7.Bullish long positions were reduced by 32 million barrels to 1.021 billion, while bearish short ones were also trimmed by 2 million barrels to 108 million (https://tmsnrt.rs/2MGLCd9).Net long positions have been cut in 11 of the last 16 weeks, with a total reduction of 380 million barrels, or 27 percent, since April 24.As in previous weeks, liquidation was concentrated in crude, with net positions in Brent cut by 18 million barrels and in ICE and NYMEX WTI by 9 million barrels. Portfolio managers made only very minor changes to net length in U.S. gasoline (-1 million barrels), U.S. heating oil (-2 million barrels) and European gasoil (essentially unchanged). price
US dollar strength could soon become an 'unbearable burden' on the oil market, analyst says - The prospect of continued strength in the U.S. dollar over the coming months should constitute an even greater concern to bullish oil traders than an escalating trade war between the world's two largest economies, an analyst told CNBC on Monday.Investors are currently seen weighing bullish factors that include potential supply disruptions to Iranian crude exports against more bearish indicators, such as broad greenback strength and a ramp-up in production byOPEC and its allied partners."There are lots of variables in the oil market, the most important of which is Iran. If 1 million barrels per day or more of Iranian exports go AWOL, the current fragile supply-demand balance will be upended — potentially sending oil prices above the May peak," Tamas Varga, senior analyst at PVM oil associates, said in a research note published Monday."The most obvious thing that could change this bullish view is not the U.S.-China trade war, but the strong dollar that, if (it) lasts, will put (an) almost unbearable burden on consuming countries," he added.International benchmark Brent crude traded at around $72.80 on Friday morning, little changed from the previous session, while U.S. West Texas Intermediate (WTI) stood at $67.43, down around 0.3 percent.Meanwhile, the U.S. dollar climbed to a 13-month high against a basket of six major currencies on Monday, amid renewed financial turmoil in Turkey. The greenback edged around 0.1 percent higher during early afternoon deals, trading at 96.460 against major peers. Typically, crude futures trade inversely to the greenback. A stronger dollar makes oil more expensive to much of the world, so oil prices tend to fall as the dollar rises.
Fuel markets confirm global growth slowdown: Kemp - (Reuters) - If the global economy starts to grow more slowly, the impact will show up first in the price of refined fuels such as road diesel, marine gasoil and jet fuel that play a central role in the freight transport system. Middle distillate fuels are principally burned in the high-powered engines used in trucks, railroads, ships, barges and aircraft to move freight around the world, as well as in factories, on farms and at mines and oilfields. Mid-distillates account for more than a third of the oil used around the world every day, and are the single-largest category of refined products, (“Statistical review of world energy”, BP, 2018).Distillate fuels are closely correlated with the global economic and trade cycle, and at the moment they confirm other indications the rate of growth is slowing.U.S. distillate stocks, which had been drawing down faster than usual during the first four months of 2018, have now been building faster than normal since late May (https://tmsnrt.rs/2vPGI7d).European gasoil futures prices, which had been in substantial backwardation, have shifted towards flat or even contango since the end of May, reflecting improved availability.Gasoil futures still command a hefty premium over crude for deliveries in 2019, but the premium has been eroding over the same time frame.In line with these trends, hedge funds and other money managers have become markedly less bullish on the outlook for distillate prices over the last three months. Hedge fund managers have cut their bullish positioning in U.S. heating oil by 29 million barrels (33 percent) and in European gasoil by 53 million barrels (33 percent) since late May.Over the same period, bullish positions in U.S. gasoline have been cut by 14 million barrels (12 percent), according to regulatory and exchange data. Distillate markets are sending the same signal as a range of other indicators: the rate of global output growth has decelerated in recent months after a very strong expansion in 2017.
Crude Oil Prices Settle Lower as OPEC Lowers Oil Demand Growth Outlook -- WTI crude oil prices settled lower on Monday after OPEC revised lower its estimate for oil-demand growth next year and revealed Saudi Arabia had cut production last month. On the New York Mercantile Exchange crude futures for September delivery fell 43 cents settle at $67.20 a barrel, while on London's Intercontinental Exchange, Brent fell 0.47% to trade at $72.47 barrel. In its monthly report, OPEC lowered its estimate for global oil demand growth for 2019 by 20,000 barrels per day (bpd) to 1.4 million bpd, while non-OPEC oil supply in 2019 was revised higher by 30,000 bpd to 2.13 million bpd. OPEC production for July (from secondary sources) rose 41,000 bpd to 32.32 million bpd, led by increases in Nigeria, Kuwait, Iraq and UAE. This was partially offset, however, by decreases in Saudi Arabia, Iran, Libya and Venezuela. The rise in OPEC production comes just a few months after the oil cartel agreed to ease curbs on output restrictions, which had been put in place by the production-cut pact in November 2016 to rid excess crude supplies from the market. OPEC agreed in June to raise output at a nominal increase of 1 million barrels a day (bpd) in an effort to stabilize oil prices and ease the threat of a global supply deficit amid expectations for a drop in Iranian exports. The somewhat bearish OPEC monthly report on global oil demand growth paled in comparison to the International Energy Agency's report. The International Energy Agency (IEA) on Friday raised its estimate for world oil demand growth next year to 1.5 million barrels a day (bpd) from 1.4 million bpd. The bearish turn in U.S. oil prices, which posted their second-straight loss in a week last week, showed no sign of abating as traders increased their bearish bets on oil prices, data showed. CFTC COT data showed money managers reduced their net long positions in WTI crude futures to 378,578 lots from 386,764 lots for the week ended Aug. 7.
Oil Drops on Strong Dollar, Turbulence in Turkey -- Oil dropped as economic turbulence in Turkey and the strengthening greenback heightened concerns about global oil demand. Futures dipped 0.6 percent in New York on Monday, paring some of its losses as the commodity tracked choppy movements in the dollar during the session. Yet, the U.S. currency maintained its advance, reducing the appeal of raw materials as an investment. In Turkey, an economy that’s larger than the Netherlands or Taiwan, bonds and stocks dropped along with the lira as investor confidence plunged. Meanwhile, OPEC raised production in July and stockpiles at the key Cushing, Oklahoma supply hub in the U.S. are seen rising. “It’s a strong dollar situation. That reverse correlation is putting pressure on the barrel for starters,” said Bob Yawger, director of futures division at Mizuho Securities USA LLC. “Perceptions about emerging-market demand are also going to be negative for the energy complex.” The U.S. benchmark crude has declined more than 2 percent this month as international trade disputes threatened to deflate energy demand growth. Turkey’s central bank pledged to “take all necessary measures” to bolster the financial system, lowering the amount commercial lenders must park at the regulator and easing rules governing lira and foreign-currency liquidity. West Texas Intermediate crude for September delivery slid 43 cents to settle at $67.20 a barrel on the New York Mercantile Exchange. Total volume traded was about 14 percent below the 100-day average. Brent for October settlement declined 20 cents to end the session at $72.61 a barrel on the London-based ICE Futures Europe exchange, and traded at a $6.04 premium to WTI for the same month. The Bloomberg Dollar Spot Index rose for a third straight session, advancing as much as 0.3 percent on Monday. OPEC’s output averaged 32.32 million barrels a day in July, up 41,000 barrels a day from June, the cartel said in a report citing secondary source figures. The group also lifted forecasts for supply from rivals for the rest of the year. At the same time, in the U.S., the Energy Information Administration sees output at major shale plays rising to 7.52 million barrels a day in September. Meanwhile, Cushing crude stockpiles are seen increasing 500,000 barrels last week, according to a Bloomberg forecast.
Oil prices edge up as Saudi cuts output, but looming demand slowdown drags - Oil prices jumped on Tuesday after Saudi Arabia said it cut production, adding to concerns over global supply as U.S. sanctions against Iran curb its exports.However, the prospect of a slowdown in global economic growth kept a lid on markets.Global benchmark Brent crude was up 94 cents, or 1.3 percent, at $73.55 by 8:57 a.m. (1257 GMT), after hitting a high of $73.75. U.S. light crude was up 91 cents, or 1.4 percent, at $68.11."Oil prices are on the rebound as bulls take heart from an unexpected dip in Saudi oil output and the lingering Iranian wildcard," said Stephen Brennock, analyst at London brokerage PVM Oil Associates.Saudi Arabia told the Organization of the Petroleum Exporting Countries that it had reduced crude output by 200,000 barrels per day (bpd) to 10.29 million bpd in July.OPEC itself, using secondary sources, estimated in a report published on Monday that Saudi production was at a slightly higher level of 10.39 million bpd last month.But both figures suggest the kingdom, de facto leader of OPEC, is keen to avoid a repeat of a global glut that has depressed prices over the past few years."We do not think that Saudi Arabia is interested in seeing Brent crude below $70 a barrel," said SEB commodities analyst Bjarne Schieldrop.Saudi Arabia is OPEC's biggest producer and the only major exporter that can easily adjust output to balance global supply.The lower Saudi output comes at a time of expected export declines from Iran as the United States re-imposes sanctions on Tehran's oil industry.But output from non-OPEC countries, particularly the United States, is rising quickly, limiting demand for OPEC oil.OPEC expects oil supply by countries outside the cartel to increase by 2.13 million bpd next year, 30,000 bpd more than forecast last month, with much of the increase coming from new U.S. shale production. U.S. oil output from seven major shale basins is expected to rise 93,000 bpd in September to 7.52 million bpd, the U.S. Energy Information Administration (EIA) said in a monthly report on Monday.
Oil Prices Fall Despite Supply Fears -- Oil prices rebounded in early trading on Tuesday before falling in the afternoon as economic uncertainty stemming from Turkey's currency crisis dampened bullishness. Saudi Arabia's oil production reduction in July and rising fears of Iranian outages weren't enough to keep oil prices in the green . Oil prices fell on Monday after Turkey’s currency crashed, raising fears of emerging market financial contagion. Turkey’s lira has declined 30 percent in the past week alone. China’s yuan dipped again. Argentina’s central bank just hiked interest rates by 5 percentage points. India’s rupee fell to a historic low against the dollar. Analysts don’t see an emerging market crisis as necessarily likely, but it isn’t impossible either. An emerging market slowdown raises the risk of much slower-than-expected oil demand. The first wave of megaprojects since the oil market downturn in 2014 is on the verge of receiving a greenlight. According to Wood Mackenzie, the oil and gas industry is set to move forward with $300 billion of new spending in 2019 and 2020, more than the combined total of the three-year period between 2015 and 2017. The aggressive spend seems to run in contrast to the promise from industry executives to maintain capital discipline. Oil executives seem to think that they can return to megaprojects while avoiding the cost blowouts of the past, but that remains to be seen. “Oil companies have improved their delivery in small projects, but can they do it with bigger ones?” Angus Rodger, a WoodMac analyst, told Bloomberg. “There’s massive upside on the table if they can show sustained success with capital discipline as oil prices rise. They could deliver the best returns in a decade.” Shell says that the economics of drilling have “flipped” back in favor of deepwater drilling after several years of low investment. Shell says that dramatic cost declines mean that deepwater drilling can breakeven at $30 per barrel, and offshore offers a better return than onshore shale. “It’s great to have both in the portfolio and we are growing our shales business... but in terms of sheer cash flow delivery, our deepwater has significantly more cash flow potential,” Shell’s head of exploration and production Andy Brown told the FT.
Oil prices inch up on Saudi output cut, but slowing economic growth drags (Reuters) - Oil prices edged lower on Tuesday, weighed down by a strengthening U.S. dollar as investors remained concerned about the financial crisis in Turkey. Brent crude LCOc1 dipped 15 cents to settle at $72.46 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 16 cents to close at $67.04 a barrel. Futures extended losses in post-settlement trade after data from industry group the American Petroleum Institute showed that U.S. crude stocks unexpectedly rose by 3.7 million barrels last week, compared with analysts’ expectations for a decrease of 2.5 million barrels. Earlier in the session, oil prices rose, supported by gains in equity markets, but pared gains at mid-day as the U.S. dollar index touched its highest since late June 2017. A stronger dollar makes greenback-denominated oil more expensive for holders of other currencies. “Usually when the dollar starts making highs, it’s probably a sign that we’re still concerned about the Turkish situation,” said Phil Flynn, analyst at Price Futures Group in Chicago. “There’s still a bit of nervousness on the global stage.” U.S. stock indexes broadly gained and Turkey's lira recovered, a day after crashing to an all-time low against the dollar, feeding worries that the country's crisis might spread to other emerging markets. TRYTOM=D3. “The equities and the U.S. dollar are keying primarily off of the unfolding saga in Turkey and although the lira has posted a significant rebound today, the standoff between Turkey and the U.S. is showing no sign of progress,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. “Consequently, worries over contagion are apt to increase in the process of reducing risk appetite and renewing downside pressures on oil pricing.” Oil’s losses were capped by concerns over lower global crude supply from top producers. The Organization of the Petroleum Exporting Countries said on Monday that Saudi Arabia had cut production. Export declines from Iran also are expected as Washington re-imposes sanctions.
WTI Dives Back Below $67 After Surprise Crude Build - WTI continued in its rangebound mode (slightly weaker into tonight's print) but slumped back below $67 tonight after API reported a surprise crude build. API
- Crude +3.66mm (-2.5mm exp)
- Cushing +1.64mm (+500k exp)
- Gasoline _1/56mm
- Distillates +1.94mm
The last few weeks have seen crude inventories flip-flopping between draws and builds with a big surprise gasoline build last week. And API continued the trend with a surprise crude build (and surprise Cushing build)... “Nobody wants to go home long” when forecasts are pointing to a bearish inventory report, said Bob Yawger, director of futures division at Mizuho Securities USA LLC. WTI ended the day unchanged, fading into the print, but spiked lower as API reported the surprise crude build...
Weekly Petroleum Report -- EIA; WTI Plunges -- August 15, 2018 -- Link here.
- US crude oil inventories: increased by a whopping 6.8 million bbls
- WTI after the report: wow, down about 3.4%; falls $2.30; falls below the $66 support level; trading at $64.76;
- bad news for US shale operators: it is interesting to note that rig count has fallen steadily in the Bakken for the past couple of weeks; indicator that terminals/refineries were "full"?
- really, really bad news for Saudi; needs $70 oil is what they say; in fact, they probably need $80 oil
- US refinery operating capacity: 98.1% -- wow
- think about that: refineries are working at 98.1% capacity and yet, inventories rose by a whopping 6.8 million bbls
- there seems to be a disconnect between what the EIA is telling us about US production (EIA says US production is falling) and what the producers are seeing
- imports? up a huge amount -- up by over one million bbls -- total imports right at 9.0 million bbls -- I haven't seen an increase this big in quite some time; what gives?
- I tracked inventories for about a year when producers / Saudi Arabia said they were going to cut back on supply -- at that time, they started at 450 million bbls in US crude oil inventory and reduced it towards 400 million bbls; today it stands at 414.2 million bbls
- the old threshold was 350 million bbls (below that, bullish for oil traders; above that, bearish for oil traders
- I set the new number at 400 million bbls (below that, bullish for oil traders; above that, bearish for oil traders
- clearly, very, very bearish right now -- and it's the height of the driving season in the US
- if gasoline prices are not falling in your neighborhood, the refineries are making out like bandits
- production: magic numbers are about 10.5 and 5.0 respectively; this week, 10.2 million bbls for gasoline; 5.3 million bbls for distillate fuel
WTI Tumbles To 2-Mo Lows After Huge Surprise Crude Build - While last night's API-reported crude build may have been a sign, DOE just reported a crude build twice as large (and massively larger than the expected draw). This sent WTI back below $65, near 2-month lows. DOE:
- Crude +6.805mm (-2.5mm exp) - biggest build since March 2017
- Cushing +1.64mm (+500k exp)
- Gasoline -740k
- Distillates +3.566mm
Record-high refinery runs couldn't keep crude stockpiles from surging - The 6.88mm crude build is the biggest since March 2017 (and Cushing stocks surged after 12 weeks of draws) as Distillates inventories rose for the 3rd week in a row... US Crude production ticked up (remember that new formulations mean that production jumps in 100k intervals now). The increase in production looks to be due to higher production from Alaska, driven by an increase at Prudhoe Bay, which had been lower for the past several weeks. All of which sent WTI back below $65... To 2-month lows... As Bloomberg notes, August is a bad month for WTI to be suffering from a bouncing dollar and worries about demand destruction from trade wars and EM currency weakness causing economic slowdowns. That's because crucial late-summer oil-product demand data has been damaging, and might again damage, the bullish case through stockpile builds. Last week's EIA data showing the largest gasoline build for early August in the last 20-plus years is colliding with this week's EIA-reported biggest crude build in 17 months is not supportive of the 'no brainer' crude narrative.
Oil prices sink after big, unexpected jump in US crude stockpiles -- Oil prices plunged on Wednesday after government data showed a big, unexpected jump in stockpiles of U.S. crude, compounding pressure as the outlook for global economic growth darkened and the stock market slumped. U.S. light crude ended Wednesday's session down $2.03 a barrel, or 3 percent, at $65.01, it's lowest closing prices since June 6. The contract hit an eight-week intraday low at $64.51. Global benchmark Brent crude oil fell $1.68, or 2.3 percent, at $70.78 by 2:26 p.m. ET, after hitting a four-month low at $70.30. U.S. commercial crude inventories rose by 6.8 million barrels in the week through Aug. 10, the Energy Information Administration reported. Analysts in a Reuters poll had forecast stockpiles would fall by 2.5 million barrels. The jump in stocks occurred as the nation's crude imports surged by 1 million barrels a day, while its exports fell by more than 250,000 bpd. That offset record activity at American refineries, which ran at 98 percent capacity. "The imports of crude oil are just remarkable," said John Kilduff, founding partner at energy hedge fund Again Capital. "That we were able to build that much crude oil in inventory in the face of a 98 percent refinery run rate speaks volumes about the burst of supply that hit the market last week." Stocks at the closely watched U.S. delivery hub at Cushing, Oklahoma rose by 1.6 million barrels. The East and West coasts both saw inventory levels jump by more than 2 million barrels. Stockpiles of gasoline were down slightly more than expected, while inventories of distillate fuels, including diesel and home heating fuel, rose by 3.6 million barrels, more than three times the increase projected in the Reuters poll.
Oil prices fall on rising US crude inventories, darkening economic outlook - Oil prices fell on Wednesday, weighed down by a gloomier global economic outlook and a report of rising U.S. crude inventories, even as U.S. sanctions on Tehran threatened to curb Iranian crude oil supplies.Global benchmark Brent crude oil was down 50 cents a barrel at $71.96 by 0830 GMT. U.S. light crude was 55 cents lower at $66.49."Sentiment is sandwiched between a darkening global economic outlook and looming Iranian supply shortages," said Stephen Brennock, analyst at London brokerage PVM Oil Associates.U.S. crude stocks rose by 3.7 million barrels in the week to Aug. 10, to 410.8 million barrels, private industry group the American Petroleum Institute (API) said on Tuesday. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.6 million barrels, the API said.Official U.S. oil inventory data was due to be published later on Wednesday by the Energy Information Administration.Investors are concerned by the health of the world economy at a time of escalating trade disputes between the United States and its major trading partners.The OECD's composite leading indicator, which covers the western advanced economies plus China, India, Russia, Brazil, Indonesia and South Africa, peaked in January but has since fallen and slipped below trend in May and June.World trade volume growth also peaked in January at almost 5.7 percent year-on-year, but nearly halved to less than 3 percent by May, according to the Netherlands Bureau for Economic Policy Analysis.The United States and China have been locked in a tit-for-tat trade spat for a few months, gradually adding tariffs to each others' products in a dispute that threatens to curb economic activity in both countries.Chinese oil importers now appear to be shying away from buying U.S. crude oil as they fear Beijing may decide to add the commodity to its tariff list.Not a single tanker has loaded crude oil from the United States bound for China since the start of August, Thomson Reuters Eikon ship tracking data showed, compared with about 300,000 barrels per day (bpd) in June and July. Meanwhile, investors are watching the impact of U.S. sanctions on Tehran, which analysts say could remove as much as 1 million bpd of Iranian crude from the market by next year.
Oil falls sharply, ends at 10-week low after unexpected rise in U.S. crude inventories - Oil futures fell sharply Wednesday, leaving the U.S. benchmark with its lowest close in 10 weeks after data showed an unexpected and surge in U.S. crude inventories. West Texas Intermediate crude for September delivery on the New York Mercantile Exchange fell $2.03, or 3%, to settle at $65.01 a barrel, its lowest finish since June 6. The global benchmark, October Brent crude dropped $1.70, or 2.4%, to $70.76 a barrel, the lowest close since April 9.The Energy Information Administration said crude inventories rose 6.8 million barrels in the week ended Aug. 10. Analysts surveyed by The Wall Street Journal had forecast a fall of 2.4 million barrels. Futures had been nursing losses ahead of the EIA data after the American Petroleum Institute late Tuesday said stocks had risen by 3.7 million barrels. Oil stored in Cushing, Okla., the delivery hub for Nymex futures, rose by 1.6 million barrels, the EIA said. “Prices have been on a downward trend after the release of the API data on Tuesday afternoon. The confirmation by the Energy Information Administration drove prices lower as traders continue to monitor the situation between the United States and Turkey,” . Indeed, concerns about Turkey and the possibility that spillover effects from the country’s currency crisis could affect global growth and demand for crude have been cited as a weight on overall commodity prices. A stronger dollar has also contributed to pressure.
Oil edges up as China, US set for talks to resolve trade disputes - Oil prices on Thursday clawed back some of the previous day's losses after Beijing said it would send a delegation to Washington to try to resolve a trade dispute between the United States and China that has roiled global markets.Market sentiment, though, remains bearish amid the dispute and concerns of an economic slowdown in emerging markets.Brent crude oil futures were at $71.11 per barrel at 0712 GMT, up 35 cents, or 0.5 percent, from their last close.U.S. West Texas Intermediate (WTI) crude futures were up 15 cents, or 0.2 percent, at $65.17 a barrel, held back somewhat by rising U.S. crude production and storage levels.Both benchmarks lost more than 2 percent during the previous day's trading.Traders said Thursday's markets were pushed up by news that a Chinese delegation led by Vice Minister of Commerce Wang Shouwen will hold talks with U.S. representatives led by Under Secretary of Treasury for International Affairs David Malpass later in August.China and the United States have implemented several rounds of tit-for-tat tariffs on each others goods and threatened further duties on exports worth hundreds of billions of dollars.Sentiment in oil markets was also cautious due to the rise in U.S. crude production and storage levels, as well as weakness in emerging market economies, particularly in Asia, that could limit demand growth.Output of U.S. crude rose by 100,000 barrels per day (bpd) in the week ending Aug. 10, to 10.9 million bpd, according to the U.S. Energy Information Administration (EIA) weekly production and storage report.At the same time, U.S. crude inventories climbed by 6.8 million barrels, to 414.19 million barrels, the EIA said."This build certainly hasn't helped market sentiment," Dutch bank ING said after the release of the EIA report. While supply rose in the United States, Asia's markets were showing signs of economic slowdown due to trade disputes with the United States and currency weakness, dragging on oil market sentiment.
Oil steadies but outlook for demand grows gloomy (Reuters) - Oil rose slightly as global markets steadied on Thursday, recovering some of the previous day’s 2 percent slide, though a weakening outlook for crude demand kept prices in check. The oil market slid on Wednesday as data showing a large build in U.S. inventories fed concern about the fuel demand outlook, while crude was also pressured by broader selling of industrial commodities such as copper. China and the United States have implemented several rounds of tariffs and threatened further duties on exports worth hundreds of billions of dollars, which could knock global economic growth. The crisis gripping the Turkish lira has rattled emerging markets and reverberated across equities, bonds and raw materials. Brent crude oil futures settled 67 cents higher at $71.43 a barrel, while U.S. crude futures rose 45 cents to $65.46 a barrel. Earlier, U.S. crude had hovered around its 200-day moving average of $65.18 a barrel, an important technical benchmark. Moving below that level could trigger a further surge downward. “The growth story is now more or less a U.S. growth story. The rest of the world isn’t playing along any longer,” “It also really reflects how the theme in the commodities market has so quickly changed from being one where the worry was about supply, with Iran sanctions for oil or Chilean (miner) strikes for copper, and now the focus is on demand.” Brent crude futures are resting on the 200-day moving average, a key technical level, for the first time in a year. Analysts say a break below this point could trigger another swift sell-off. “In Brent, we trace a first support at $71.00 followed by the 200-day moving average at $70.23 and $70.00,” On the supply front, U.S. data on Wednesday showed crude output rose by 100,000 barrels per day (bpd) to 10.9 million bpd in the week ending Aug. 10. Crude inventories increased by 6.8 million barrels, representing the largest weekly rise since March last year.
Oil prices fall amid fears over global economic growth - Oil prices rose on Friday but were heading for yet another weekly decline as concerns intensified that trade disputes and slowing global economic growth could hit demand for petroleum products. Brent crude oil futures were up 98 cents, or 1.4 percent, at $72.41 a barrel by 9:11 a.m. ET (1311 GMT). U.S. West Texas Intermediate (WTI) crude futures rose 74 cents, or 1.1 percent, to $66.20 a barrel.Brent is heading for a decline of less than 1 percent this week, a third consecutive weekly drop. WTI is on track for a seventh week of losses, with a fall of more than 2 percent.Traders said the main drags on prices were the darkening economic outlook due to trade tensions between the United States and China, and weakening currencies in emerging economies that are weighing on growth and fuel consumption.U.S. investment bank Jefferies said on Friday there was an emerging "lack of demand" for crude oil and refined products. Singaporean bank DBS said on Friday that Chinese data showed a "steady decline in activities" and that "the economy is facing added headwinds due to rising trade tensions with the U.S."
Crude oil is getting crushed, but one expert sees year-end rally - Crude oil just posted its worst week since July as a surging dollar, slowing emerging markets and supply concerns have all weighed on the commodity. But despite the price declines, one commodities trader sees a rally in the cards.Bill Baruch, president of Blue Line Futures, told CNBC's "Trading Nation" on Thursday what investors can expect next. Here's what he said.
- · A bearish inventory report earlier in the week pushed oil down to its lowest level since June, but crude bulls still have reasons to feel good. For instance, it's easy to forget crude oil is still trading near multiyear highs, with a gain of 9 percent year to date and 40 percent in the last 12 months.
- · One of the biggest stories weighing on crude may be set to dissipate and take some pressure off the commodity: trade tension between the U.S. and China. We may see meaningful headway on trade over the coming weeks, and fears of slowing growth in China may be alleviated.
- · My biggest concern, however, is spare capacity. Saudi Arabia promised to ramp up crude production in July, but it actually fell 200,000 barrels per day. Still, the U.S. estimated that production in the lower 48 states has stalled over the last three weeks, and tighter spare capacity can be extremely bullish.
- · During this seasonally weak time for crude, investors should look to buy pullbacks; the technical picture should support this strategy. There is tremendous support from $62.50 to $64.50 per barrel, and oil should be positioned to rally back up to between $70 and $80 per barrel later this year. The key level to the downside would be $62.
Bottom line: Despite a 3 percent decline in crude oil this week, Baruch sees the commodity surging into year-end.
‘More volatility’ expected as Iran sanctions set to prompt wild swings in oil prices, CEO says --A shipping revolution and a U.S. plan to impose targeted crude sanctions against Iran is likely to prompt wild swings in the oil price over the coming months, Vopak's chief executive told CNBC on Friday.Energy market participants are currently seen weighing bullish factors that include potential supply disruptionsto Iranian crude exports against more bearish indicators, such as the darkening global economic outlook and a resurgent U.S. dollar.International benchmark Brent crude traded at around $72.07 on Friday afternoon, up almost 1 percent, while U.S. West Texas Intermediate (WTI) stood at $65.77, up more than 0.5 percent."With new sanctions coming into play and also the IMO 2020, we see there is more volatility and therefore more opportunities to trade. So, we see our customers taking, slowly but surely, positions for that to happen," Eelco Hoekstra, CEO of Vopak, told CNBC's "Squawk Box Europe" on Friday.On January 1, 2020, the International Maritime Organization (IMO) will enforce new emissions standards designed to significantly curb pollution produced by the world's ships.The rule changes — which one leading energy analyst recently described as the "biggest in the history of the market" — are seen as a source of great concern for some of the world's largest oil producers. That's because global energy and shipping industries are thought to be ill-prepared for the new measures.Further to the IMO's changes, external observers are particularly concerned about the supply disruptions caused by Washington's plan to impose further sanctions against Iran in November. Tehran is OPEC's third-largest oil producer — behind Saudi Arabia and Iraq — and currently pumps around 3.65 million barrels per day, according to Reuters data.
U.S. Drillers Turn On The Brakes—Rig Count Remains Unchanged - Baker Hughes reported no change to the number of active oil and gas rigs in the United States on Friday. Oil and gas rigs stayed at 1,057, according to the report, with the number of active oil rigs and the number of gas rigs staying the same. The oil and gas rig count is now 111 up from this time last year. Oil prices had been trading up earlier on Friday, but prices were still on track to end the week in the red. In fact, this week marks the seventh weekly loss as trade wars, unrest in Turkey, and anticipated Iranian production loss sparked fears of waning global demand growth. Contrary to those fears, the International Energy Agency (IEA) reported last week that it foresaw a boost to global oil demand growth by 110,000 barrels per day to 1.5 million barrels per day for 2019.By 12:35am EDT, WTI was trading up $0.31 (+0.47%) at $65.77 per barrel, with Brent trading up $0.31 (+0.43%) at $71.74—both down week on week. Canada’s oil and gas rigs for the week rose by 3, bringing its total oil and gas rig count to 212, which is 2 fewer than this time last year, with a 1-rig gain for oil and a 2-rig gain for gas. The price of Western Canada Select (WCS) continued to fall this week, trading at $36.16 as of 12:52pm. EIA estimates for US production were up 100,000 barrels per day for the week ending Augusts 10, averaging 10.9 million bpd. By 1:08pm EDT, WTI and Brent were still trading up. WTI was trading up 0.26% (+$0.17) at $65.63. Brent crude was trading up 0.22% (+$0.16) at $71.59 per barrel.
Crude Oil Prices Settle Higher as US, China Mull Plans to Resolve Trade War - WTI crude oil prices ended lower for a third-straight week, despite settling higher Friday amid reports the U.S. and China are mapping out plans to resolve their trade war later this year. On the New York Mercantile Exchange crude futures for September delivery rose 45 cents settle at $65.91 a barrel, while on London's Intercontinental Exchange, Brent rose 0.63% to trade at $71.88 barrel. Chinese and U.S. negotiators are drawing up plans for talks between President Donald Trump and Chinese counterpart Xi Jinping in November to end their trade war, according to the Wall Street Journal. Oil prices were also lifted by signs of a slowdown in domestic output, despite data this week showing domestic producers increased production for the first time in three weeks. Oilfield services firm Baker Hughes reported on Friday that the number of U.S. oil drilling rigs in operation was unchanged at 869. Yet the rise in oil prices proved to be too little, too late amid heavy losses during the week on the back of rising U.S. inventories and concerns slowing growth in emerging markets and China would dent oil demand. Inventories of U.S. crude rose by 6.805 million barrels for the week ended Aug. 10, confounding expectations for a draw of 2.449 million barrels, according to data from the Energy Information Administration (EIA). The unexpected build in crude supplies emerged as imports rose by about 1.341 million barrels a day (bpd), while exports fell by 2.58 million bpd, data from EIA showed.
A Tough Week For Oil Markets - Oil posted steep losses mid-week on sudden concerns about global economic stability. Turkey’s currency crisis has raised fears of destabilization in emerging markets. With higher financial risks in mind, traders sold off oil. The EIA reported a 6.8-million-barrel increase in crude stocks this week, sending prices down on Wednesday. The abnormally large build sent a shudder through the oil market, raising the prospect of a slowdown. The Turkish lira crisis has put concerns about the health of the global economy front and center. Bloomberg says that if the economy falters, it will show up in timespreads for oil futures. “Crude oil prices and the crude curve structure are typically the indicator which picks up all the demand side factors and all the supply side factors into one number,” said Bjarne Schieldrop of SEB. For much of 2018, Brent futures were in a state of backwardation. The recent flip into contango – in which front month contracts trade at a discount to longer-dated futures – is a bearish sign. The plunge in the lira has infected several other emerging market currencies, most notably, Argentina’s peso and India’s rupee. That makes oil vastly more expensive in those countries, which ultimately could undercut demand. “Higher oil prices paired with a weakening domestic currency spells trouble for major emerging market oil demand growth countries like India, where consumers are already paying near record levels for retail petrol,” said Michael Tran, global energy strategist at RBC Capital Markets LLC. A new round of protests by workers at Libya’s key Zawiya oil export terminal threaten to disrupt production at the Sharara oil field, according to S&P Global Platts. Libya has succeeded in restoring production after previous events, pushing output back above 1 mb/d. But the latest protests could shut in the 340,000-bpd Sharara field this weekend. “We are expecting a complete shutdown [at Sharara] because of some problems at Zawiya refinery. Tomorrow a tanker is due but maybe loading will be stopped by the guys causing the problems,” a source at the Sharara field said, according to S&P Global Platts.
Analysts: Oil Price Rise to Drive Up Drilling Globally - The rise in oil prices will continue to drive up drilling activity globally over the second half of the year and 2019, according to oil and gas analysts at Fitch Solutions Macro Research. The rise in oil prices is feeding through into higher spending in the oil and gas sector and will continue to drive up drilling activity globally over the second half of the year and 2019, according to oil and gas analysts at Fitch Solutions Macro Research. “Globally, rotary rig counts have averaged 183 rigs higher in the year to date, compared to the same period last year,” the analysts said in a report sent to Rigzone on Tuesday. “The majority of additions have been made in North America, as shale developments continue to pick up pace. Internationally, the rig count has averaged 23 rigs higher, but performance has been widely varied between the different regions,” the analysts added. Fitch Macro Solutions Research analysts said they expect “continued strong growth in US shale, with producers set to add around 1.25 million barrels per day of crude and condensates over 2018 on an annual average basis”. In the report, the Fitch Macro Solutions Research representatives also stated that “there is a shift underway away from gas and towards oil-directed drilling”. “When oil prices decline, both oil-and gas-directed rig counts tend [to] fall, due to the outsize impact of oil revenue on capex [capital expenditure]. However, due to a number of factors, including differences in cost and contracting structures, gas-directed drilling tends to face less downside pressure overall,” the analysts said. “As oil prices continue to recover, and investor confidence with them, we expect the focus to swing back towards oil over the coming years. However, we view the shift as a cyclical and not a structural one, with secular trends in policy, pricing and technology strongly favoring gas over a longer-term (multi-decade) horizon,” the analysts added.
Saudi Arabia Weighs Larger Tesla Stake as Part of Plan to Make Electric Cars --Saudi Arabia’s desire to take a big stake in Tesla Inc. reflects its ambitious plan to build a base in the kingdom for electric-car production and diversify away from oil. Its sovereign-wealth fund is considering raising its nearly 5% holding in Tesla, people familiar with the matter said. Discussions among Saudi officials about increasing the Public Investment Fund’s stake accelerated after Tesla Chief Executive Elon Musk last week proposed to take the car company private in a tweet, the people said.On Monday, Mr. Musk said in a blog post that he had been in discussions with the fund since early last year about a major investment that would help Tesla go private. In recent months, executives from PIF have approached Tesla multiple times about investing in the company, the people said. It’s unclear whether the Saudi fund is actively in talks with Mr. Musk about a plan to take the auto maker private, and whether it would have the financing available to do so. Two people familiar with PIF’s finances said they doubt there are any serious discussions under way about the fund taking a significantly larger stake in Tesla. Indeed, the fund is struggling to find ways to finance its existing commitments. Still, a deal with Tesla would represent an extraordinary wager on technologies that compete with Saudi Arabia’s biggest generator of income: oil. Tesla’s electric vehicles, if manufactured inside the kingdom, would complement other technology investments and create a base of industry that some Saudi officials are calling the “Grand Vision” of the future, said one person familiar with the matter. Mr. Musk’s company also encompasses SolarCity, a supplier of solar panels and batteries. Saudi Arabia has said it will build a massive solar-power generation project that would replace oil-and-gas-generated electricity and create a solar-panel and battery manufacturing hub in the Middle East. The country’s plans go beyond the solar project and electric cars. It also wants to build a city in the desert called Neom, which would be powered by renewable energy and showcase robots and driverless cars. Officials hope the plan will draw global technology investment and innovation.
Saudi Crackdown On Canada Could Backfire -- Like many spats these days, the Saudi Arabia/Canada one started with a tweet. Canada’s Foreign Minister Chrystia Freeland called for the release of Samar Badawi, a women’s rights activist who is the sister of jailed blogger Raif Badawi, whose wife is a Canadian citizen. The arrests had taken place in OPEC’s largest producer and leading exporter Saudi Arabia, which has amassed its wealth from oil and now looks to attract foreign investors as it seeks to diversify its economy away from too much reliance of crude oil sales.Canada’s foreign ministry’s global affairs office urged “the Saudi authorities to immediately release” civil society and women’s rights activists.Saudi Arabia - often criticized for its far from perfect human rights and women’s rights record - didn’t take the Canadian urge lightly. Saudi Arabia expelled the Canadian ambassador, stopped direct Saudi flights to Canada, stopped buying Canadian wheat, ordered Saudi students and patients to leave Canada, froze all new trade and investment transactions, and ordered its wealth funds to sell their Canadian stock and bond holdings in a sweeping move that surprised with its harshness many analysts, Canada itself, and reportedly, even the U.S.The Saudi reaction shows, on the one hand, the sensitivity of the Kingdom to criticism for its human rights record. On the other hand, it sent a message to Canada and to everyone else that Saudi Arabia won’t stand any country meddling in its domestic affairs, or as its foreign ministry put it “an overt and blatant interference in the internal affairs of the Kingdom.”The Saudi reaction is also evidence of Crown Prince Mohammed Bin Salman’s harsher international diplomacy compared to the previous, ‘softer’ diplomacy, analysts say. Saudi Arabia is also emboldened by its very good relations with the current U.S. Administration, and picking a fight with Canada wouldn’t have happened if “Trump wasn’t at the White House,” Haizam Amirah-Fernández, an analyst at Madrid-based think tank Elcano Royal Institute, told Bloomberg.The United States hadn’t been warned in advance of the Saudi reaction to Canada and is now trying to persuade Riyadh not to escalate the row further, a senior official involved in talks to mediate the dispute told Bloomberg. The row, however, will not affect crude oil exports from the Kingdom, Saudi Energy Minister Khalid al-Falih has said, adding that Riyadh’s policy has always been to keep politics and energy exports separate.
Thousands attend funerals of children killed in Yemen bus attack --Thousands of people gathered in Yemen's war-ravaged city of Saada on Monday for the funerals of 51 people, including 40 children, who were killed in air strikes by a Saudi-UAE military alliance, backed by the US. Scores of cars covered in green, which is a hugely symbolic colour in Islam, transported the victims' coffins from a hospital morgue to a large square for funeral prayers, in a ceremony which was attended by several high-ranking Houthi officials. Mohammed Ali al-Houthi, who has a $20 million bounty on his head, slammed the killings as a "crime by America and its allies against the children of Yemen". The funerals were supposed to take place on Saturday - in Islam, the dead should be buried as soon as possible. However, the Houthis, who control Saada province and large parts of north Yemen, said such gatherings could be targeted by further raids. Mourners carried pictures of the 40 children killed, while Al-Masirah, a pro-Houthi TV network, broadcast images of small graves being dug at a cemetery where the children were to be buried. "My son went to the market to run house errands and then the enemy air strike happened and he was hit by shrapnel and died," said Fares al-Razhi, mourning his 14-year-old son."For my son, I will take revenge on Salman and Mohammed Bin Zayed," he said, referring to the leaders of Saudi Arabia and the United Arab Emirates. With logistical support from the US, Saudi Arabia and the UAE have carried out attacks in Yemen since March 2015 in an attempt to reinstate the internationally recognised government of President Abu-Rabbu Mansour Hadi. The strikes have failed to reverse thei Houthis' gains, and instead, made Yemen the worst humanitarian crisis in more than 50 years.
Guided Bomb Fragments At Site Of Yemen Bus Airstrike Trace Back To Lockheed Martin - A prominent Yemeni journalist who throughout the war has been instrumental in getting images and information out of the country ahead of Western journalists has photographed and examined fragments from one of the exploded missiles found at the site of the US-Saudi coalition airstrike on a school bus in Yemen, which left as many as 50 people dead and 63 injured — the vast majority of which were children. The image of the missile fragment, believed to be among those that scored a direct hit on the bus full of children traveling through Dahyan market in Saada province last Thursday, appears to be a US-made MK-82 guided bomb produced by Lockheed Martin.Ben Norton, an American journalist among the first to track down publicly available government contract information showing the MK-82's likely origins, said of the bomb fragment imagery: "Yemeni journalists found this fragment of the bomb Saudi Arabia dropped on a school bus full of children in Yemen. It's a US-made MK-82 guided bomb, which has been used in previous attacks on Yemeni civilians. The cage code on the bomb is Lockheed Martin's." The MK-82 is a 500-pound air dropped guided bomb which US Air Force and military publications previously touted as "causing the least amount of collateral damage" — US defense contractors have over the past few years sold the MK-82 to Saudi Arabia under contracts worth tens of millions of dollars. The CAGE Code, or Commercial and Government Entity Code, is a number assigned to suppliers of various government or defense agencies which provides a standardize method to track military items to a given facility at a specific location. According to one defense contracting consultation site, The Department of Defense’s Defense Logistics Agency, (DLA) assigns the five-character ID and uses alpha numeric identifier is assigned to entities located in the United States and its’ territories.Ben Norton says the Cage Code on the fragment reportedly found at the site traces to US government contractor Lockheed Martin.The code on the panel fragment in the photograph reads: 94271. Ben Norton further tracked down specific contracts through 2016 and 2017 showing that Lockheed Martin/General Dynamics is the key supplier of the MK-82 500-pound bombs to the Saudi military (in 1997 General Dynamics acquired Lockheed's Armament Systems and Defense Systems productions divisions).
Saudi Arabia and Israel are killing civilians – and Britain is complicit - Will not even the massacre of children in Yemen end the silence over the murderous complicity of the British government? They were little kids on a bus on the way back from a picnic, no doubt laughing and raucous as large groups of children tend to be, and then they were burned to death. At least 29 children were among the 43 slaughtered, an atrocity perpetrated by the aircraft of Saudi Arabia and its Gulf allies. According to the Campaign Against Arms Trade, our government has supplied the grotesque Saudi dictatorship with £4.7bn worth of arms since the war in Yemen began. Aircraft, helicopters, drones, bombs, missiles: all supplied by UK plc to be quite possibly dropped on the heads of children laughing on the way back from a picnic. Just months ago, the British government feted the Saudi dictator Mohammed bin Salman: unveiling a joint £100m aid deal, granting this tyranny humanitarian PR, while BAE Systems announced the sale of another 48 Typhoon jets. It gets worse: British military personnel are directly involved in helping the Saudi war effort – to what extent remains intentionally murky. Thousands have died, mostly at the hands of the Saudi-led forces we are arming; millions have been displaced; and the country has been left on the verge of famine. Yet where is the national outrage? Where is the wall-to-wall news coverage about these horrors committed in our name? The unforgivable failure of the media to hold the British government to account has left most of the population unaware that this war is even happening. If the culpable nation were deemed a western enemy – such as Iran – there would have been calls for US-led military intervention to stop the slaughter long ago. But it’s our good friends and allies, the head-chopping extremism-exporting Saudi dictatorship, and so both the silence and the killing continues.
Explosion at makeshift arms depot kills at least 69 people in Syria - At least 69 people, including 12 children, have been killed after an explosion at what is thought to be a makeshift arms depot inSyria.Dozens more are still missing with the death toll expected to rise following the blast in the town of Sarmada in Idlib province.“Buildings full of civilians were reduced to rubble,” one White Helmets rescuer Hatem Abu Marwan was quoted as telling the AFP news agency. It is thought the munitions depot may have been created by an arms trafficker within a five-storey residential building. Idlib is the last major rebel stronghold in war-torn Syria and is widely expected to be the next target which the country’s armed forces attempt to retake.In recent months, the government, led by president Bashar al-Assad and backed by Russia and Iran, has made major advances in its offensive against a number of rebel groups.After Sunday’s explosion, rescuers used bulldozers to remove the rubble and pull out trapped people.Many of the dead and the injured are believed to have been Syrians already displaced by the civil war from the central Homs province. But the UK-based Syrian Observatory for Human Rights said that there were dozens more people missing. The cause of the explosion was not immediately known.
Syria – Pentagon Plants High ISIS Numbers To Justify Occupation -- The U.S. aim in Syria is still 'regime change'. The Pentagon has made it clear that it wants to stay in the country even after the Islamic State vanished. A little propaganda trick is now used to create a justification for its continuing occupation.The report by the UN Security Council's Sanctions Monitoring Team on ISIS, in parts discussed here, includes a number that smells of bullshit and manipulation: 3. Some Member States estimate the total current ISIL membership in Iraq and the Syrian Arab Republic to be between 20,000 and 30,000 individuals, roughly equally distributed between the two countries. Among these is still a significant component of the many thousands of active foreign terrorist fighters.2 Footnote 2 gives as source: 2 Member State information. The high number given by a "Member State" exceed all prior assessments. The original strength of ISIS was estimated as a few thousand and it swelled as it took more land and incorporated local auxiliary forces and newly arriving foreign fighters. In September 2014, when ISIS was near its peak, the CIA estimated a total of 31,000 ISIS fighters in Syria and Iraq. The number shrank as ISIS was kicked out of more places it earlier occupied while it lost ten thousands of its fighters to Russian, Syrian, Iraqi and U.S. bombs, artillery and other military means. In July 2017 the commanding general of U.S. Special Forces said that 60 to 70,000 ISIS fighters had been killed. The numbers in the UN Sanctions Monitor report simply make no logical sense. It is also contradicted by earlier estimates that put the number of current ISIS fighters in the low thousands. In December 2017 President Trump claimed that only "1,000 or so" fighters remained in Iraq and Syria. The U.S. is justifying its occupation of north-east Syria by claiming to fight ISIS under the legal cover of two UN Security Council resolutions. Now, as ISIS in Syria has shrunk to a few dozens of fighters, that justification is wearing thin. It is immensely important for the Pentagon to present a high number, as ISIS is its only legal justification to stay in Syria. It is doubtful that Congress would agree to a prolonged occupation if ISIS vanished.
The next drone assassination - There is no doubt that a little-known, modestly funded group could launch a drone assassination. Governments, of course, have for years developed military drones, more formally called unmanned aerial vehicles or UAVs. (The United States deploys lethal drones, and Iran’s drone program has been decades in the making, to cite just a couple of examples.)But while governments pour their millions into deadly UAVs, it is relatively cheap and easy for anyone to adapt a commercially available drone into a weapon. Beginning around 2016, militant groups in Iraq, Syria, and Ukraine began to use modified commercial drones for offensive strikes. Last year, writing in the Bulletin, Michael Horowitz and Itai Barsade of Perry World House explored what militant groups do with drones:In addition to dropping munitions on unsuspecting soldiers, they can strap explosives to drones to generate devastating effects. For example, militants can crash an explosive-laden drone into a target, creating a sort of MacGyvered cruise missile. Alternatively, militants can booby-trap drones. In one case, Kurdish fighters trying to examine a grounded drone died when it exploded. In Ukraine, Russian-backed separatists use drones to target military infrastructure and cause immense damage. For instance, they used a commercial drone to drop a Russian-made thermite hand grenade on an ammunition depot in Eastern Ukraine, causing an inferno and close to $1 billion in damage. Put simply, commercial drones are enabling militant groups to engage in a more diverse array of missions to advance their goals against militarily superior forces. While drones have not yet changed the outcome of a war, they are more than a serious annoyance for conventional armies, which must strategize ways to fend them off. “Stopping drone proliferation is not an option because of the ubiquity of the technology,” Horowitz and Barsade note. And as Wired reporter Brian Barrett writes, “most good drone defenses come with drawbacks and caveats.” Which means we won’t wait long for news of another drone attack by soldiers who are part of no army.
Iran test-fired anti-ship missile during drills last week: U.S. source (Reuters) - Iran test-fired a short-range anti-ship missile in the Strait of Hormuz during naval drills last week that Washington believes were aimed at sending a message as the United States reimposes sanctions on Tehran, a U.S. official said on Friday. The official, however, did not suggest that such a missile test was unusual during naval exercises or that it was carried out unsafely, noting it occurred in what could be described as Iranian territorial waters in the Strait. Iran’s Revolutionary Guards confirmed on Sunday it had held war games in the Gulf over the past several days, saying they were aimed at “confronting possible threats” by enemies. U.S. Army General Joseph Votel, head of the U.S. military’s Central Command, said earlier this week the scope and scale of the exercises were similar to ones Iran had carried out in the past. But the timing of this particular set of exercises was designed to get Washington’s attention. “It’s pretty clear to us that they were trying to use that exercise to send a message to us that as we approach this period of the sanctions here, that they had some capabilities,” Votel told reporters at the Pentagon. Iran has been furious over U.S. President Donald Trump’s decision to pull out of an international agreement on Iran’s nuclear program and re-impose sanctions on Tehran. Senior Iranian officials have warned the country would not easily yield to a renewed U.S. campaign to strangle Iran’s vital oil exports. Last month, Iran’s Supreme Leader Ayatollah Ali Khamenei backed President Hassan Rouhani’s suggestion that Iran may block Gulf oil exports if its own exports are stopped. Votel said the U.S. military was keenly aware of Iran’s military activities. “We are aware of what’s going on, and we remain ready to protect ourselves as we pursue our objectives of freedom of navigation and the freedom of commerce in international waters,” Votel said.
China says business ties with Iran no harm to any other country (Reuters) - China’s business and energy ties with Iran do not harm the interests of any other country, the country’s Foreign Ministry said, after U.S. President Donald Trump said companies doing business with Iran would be barred from the United States. China has already defended its commercial relations with Iran as open and transparent as U.S. sanctions on Iran took effect despite pleas from Washington’s allies. In a statement released late on Friday, China’s foreign ministry reiterated its opposition to unilateral sanctions and “long-armed jurisdiction”. “For a long time, China and Iran have had open, transparent and normal commercial cooperation in the fields of business, trade and energy, which is reasonable, fair and lawful,” it said. “This does not violate United Nations Security Council resolutions or China’s promised international obligations, nor does it harm the interests of any other country, and should be respected and protected,” the ministry added. Using sanctions at the slightest pretext or to threaten anyone won’t resolve the problem, it said. “Only dialogue and negotiations are the true path to resolving the issue,” the ministry added. China, Iran’s top oil customer, buys roughly 650,000 barrels a day of crude oil from Tehran, or 7 percent of China’s total crude oil imports. At current market rates, the imports are worth some $15 billion a year. State energy firms CNPC and Sinopec have invested billions of dollars in key Iranian oil fields such as Yadavaran and North Azadegan and have been sending oil to China. European countries, hoping to persuade Tehran to continue to respect the nuclear deal, have promised to try to lessen the blow of sanctions and to urge their firms not to pull out. But that has proven difficult, and European companies have quit Iran, arguing that they cannot risk their U.S. business.
China July aluminum output jumps 12 percent, matches record amid smelter ramp-up (Reuters) - China’s primary aluminum production climbed 12 percent in July from the same month a year earlier, equaling its monthly record, as new smelters took output back toward the level that preceded capacity closures in mid-2017. The world’s biggest aluminum producer churned out 2.93 million tonnes of the metal last month, according to National Bureau of Statistics data released on Tuesday. That matched the previous high, set in June 2017, and was up 3.4 percent month-on-month. On a daily basis, China produced 94,500 tonnes of primary aluminum last month, according to Reuters calculations based on the data. That was below the previous daily record of 97,700 tonnes, set in a 30-day month. Last year, China’s aluminum output fell by 8.4 percent from June to July after the closure of 3.2 million tonnes per year of illegal smelting capacity in Shandong province. It fell further amid winter smog pollution curbs imposed on industrial manufacturing plants, before bouncing back in December as new smelters opened. “There is more capacity in the market,” said Lachlan Shaw, global commodity strategist at UBS. “The price is good. A lot of inflationary pressures we saw over the winter last year have ebbed...so it’s a good time to be making aluminum.” Shanghai aluminum prices climbed by 2.1 percent over July and a favorable arbitrage to international prices led to bumper Chinese exports last month.
Middle class won't help China spend its way out of trade war Mounting debt levels and rising uncertainty about the economic outlook appear to be weighing on the ability and willingness of China’s middle class to buy high-priced products, a change that may thwart Beijing’s expectation that consumer spending will offset trade war-related export losses and help maintain steady economic growth.Chinese households appear to be scaling back their discretionary spending and following a new fashion of minimising luxury purchases, challenging Beijing’s narrative that China’s vast domestic market of a billion consumers is ready to open their wallets for better products and services.Instead of a “consumption upgrade” – the phrase the government likes to use to describe Chinese consumers’ growing demand for high-quality and higher-priced cars, art and travel – many Chinese are taking the opposite approach. They are cutting conspicuous consumption – lavish spending to indicate social prestige – and are turning to cheaper substitutes. Even as households have been borrowing more, data indicates they have been spending less. Banks’ outstanding loans to households jumped 19 per cent year on year in May and 18.8 per cent in June, but China’s overall retail sales growth rate dropped to a 15-year low of 8.5 per cent in May before rebounding slightly to 9 per cent in June.At the end of last year, total outstanding individual mortgage loans and borrowing from the public housing fund rose to 26.4 trillion yuan, meaning that housing-related loans made up 57 per cent of overall household debt, according to government data.Considering that many Chinese use consumer loans to come up with the down payment on a house or to help pay their monthly mortgage bill, the weight of real estate debt on purchasing power is even heavier. It is clear that total household debt in China is rising very quickly, mainly due to mortgage and other property-related loans.
Even China Has A Higher Proportion Of Women Politicians Than America -As primary elections in the United States closed last Tuesday and the results trickled in on Wednesday, a clear pattern emerged from the ballot box: women winning. As Statista's Sarah Feldman notes, the pink wave saw female candidates clean up many primary wins, putting them on track to enter positions of power in various levels of government. While Wednesday’s results were historic for the United States, many countries are light-years ahead of the US when it comes to women holding seats in the legislature. Rwanda, where most legislators are women, has three times as many women in government as the United states.Over the past two decades, women have entered government at increasing rates, with this uptick partially fueled by legislative or voluntary gender quotas for political parties and parliaments.America, however, still has relatively fewer women politicians than communist China but - luckily for the land of the free - has a greater proportion than Russia.
Faced with falling birth rates, China urges citizens to have more babies - China appears to be backpedaling on its decades-long policies to limit population growth as it attempts to address a demographic time bomb.The one child policy ran until 2015 when it was partially relaxed to allow some couples to have two children, but families have been slow to embrace official approval to expand.An op-ed in a state-run newspaper titled "Giving birth is a family matter and a national issue too" is the latest to encourage couples to have more children, and call for official action to enable young people to start families.The full-page column was published in the overseas edition of the People's Daily, mouthpiece of the Chinese Communist Party. It warned that "the impact of low birth rates on the economy and society has begun to show." The piece has attracted millions of comments online, and comes as the government revealed a new official postage stamp, which seems to hint that it may drop the remaining restrictions on the number of children people can have.The stamp, issued this week to mark the upcoming Year of the Pig, shows two parents with three piglets. A similar commemorative stamp released to mark the Year of the Monkey in 2016 showed two baby monkeys, which was seen as a nod to the dropping of the one child policy.Beijing reversed its hugely controversial one child policy -- in which women were subject to forced abortions, heavy fines, and eviction if they attempted to have a second baby -- as demographic issues caused by the lack of children became increasingly apparent.China's pool of workers is shrinking, with many young people supporting their parents and two sets of grandparents, in a country where social services for the elderly are still lacking. In 2017,the country's total fertility rate was 1.6 children per woman, well below the 2.1 rate estimated to be necessary to keep the population steady. Simply reversing the policy has not been effective, as China's urban middle class settle into a low birth rate more in common with western countries, one that has been compounded by economic pressures.
China’s Taiwan Strait Provocations Need a U.S. Response - Tension has been mounting of late in the Taiwan Strait. China has launched a “multi-domain campaign” against the Taiwan government in an attempt to pressure pro-independence President Tsai Ing-wen to accept the 1992 “One China” consensus. China’s measures range from dispatching bombers, fighter jets, and warships to circle around the island, conducting live-fire military exercises in waters close to Taiwan, squeezing Taiwan’s diplomatic space by cutting off its diplomatic ties, limiting its access to international organizations, and various economic measures. The United States, due to its commitment to the defense of Taiwan, has called on China to curb its aggression and avoid military action. The increased measures by China could potentially upset the status quo that has been in place for almost 70 years and maintained by U.S. support. As the U.S. call has ostensibly gone unheeded, its Defense Department was reportedly considering sending warships to calm the troubled waters in the Taiwan Strait. Sending the warships that way, while well intended, could potentially intensify the situation rather than calming it. In contrast, a freedom of navigation operation by the U.S. Navy in the Taiwan Strait might promote the U.S. agenda without generating unwanted consequences. This seems counterintuitive, but acting to contest the rule of law at sea with Beijing—instead of directly challenging it over its aggression toward Taiwan—could serve U.S. purposes without provoking a confrontation. China’s interpretation of the United Nations Convention on the Law of the Sea (UNCLOS) differs sharply from that of the United States, which bears directly on the Taiwan Strait. The United States has traditionally used the term “international waters (and spaces)” for all the ocean areas outside of coastal nations’ 12-nautical-mile territorial zones and insisted on unfettered freedom of navigation for all countries on these “commons,” including military activities. The 65-nautical-mile waters in the Taiwan Strait are no exceptions. China, however, argues that “international waters” is not a legal concept in the Law of the Sea; rather there are only the 200-nautical-mile exclusive economic zones and the high seas beyond that.
What would the US do if Beijing decided to take Taiwan by force? - Despite the perception that Beijing may be committed to politically reunifying Taiwan – by force if necessary – before Xi Jinping retires as paramount leader, US analysts continue to see an attempted invasion of Taiwan as prohibitively risky for China. Beijing might attempt unification through military means other than invading Taiwan, such as capturing smaller islands claimed by Taipei, imposing a blockade of its ports and main airport, launching cyberattacks against its information and communications infrastructure, and cratering parts of the island with missile attacks. The problem for China is that these methods still rely on the Taipei government choosing to surrender. Historically, governments and societies under attack become more defiant rather than submissive. The only sure way to compel Taiwan’s surrender would be for PLA soldiers to occupy Taiwan’s major cities. But even as China’s military capabilities improve, the chances of success in an all-out invasion of Taiwan are low – even if the United States did not intervene on Taiwan’s behalf. China would need to ferry its troops, most of them packed into slow-moving and highly visible ships, across the 160km wide Taiwan Strait, where they would be highly vulnerable to attack, and then unload them and huge amounts of ammunition and other supplies while trudging through sand or mud and under heavy fire. China has the capacity to transport only a few tens of thousands of troops at a time. Much of this force would not make it across the strait. Awaiting the survivors would be 180,000 active duty Taiwanese soldiers plus 1.5 million reservists.
Why other countries are giving China a licence to print money - China is printing foreign currencies on a massive scale as Beijing seeks to increase its influence on the world economy and geopolitics. Multiple sources in the China Banknote Printing and Minting Corporation confirmed to the South China Morning Post last month that money production plants across the country were running at near full capacity to meet an unusually high quota set by the government this year. Most of the demand comes from participants in the “Belt and Road Initiative” and one source, who requested not to be named due to the confidential nature of the information, said Chinese yuan bills only made “a small proportion of the orders”. The state-owned company, headquartered in Beijing’s Xicheng district describes itself as the world’s largest money printer by scale. With more than 18,000 employees, it runs more than 10 strictly guarded facilities for the production of paper notes and coins. By contrast, its US counterpart, the US Bureau of Engraving and Printing, employs a tenth of the staff at two currency factories, and the world’s number two, the British firm De La Rue, had just over 3,100 employees at the end of last year.
Seoul, Pyongyang Hold Talks on Next Intra-Korean Summit Preparations – Reports (Sputnik) - Officials from the North and South Korea began their talks on preparations for the planned high-level bilateral summit on the northern side of the truce village of Panmunjom, located in the demilitarized zone between the neighboring countries, media reported on Monday. The talks started at around 10:00 a.m. [01:00 GMT], the South Korean Yonhap news agency reported. South Korean Unification Minister Cho Myoung-gyo leads the delegation from Seoul, according to the outlet. North Korea is represented by a group of officials led by Ri Son Gwon, the chairman of the country's Committee for the Peaceful Reunification. With preparations underway for yet another summit in Pyongyang between the leaders of the North and the South, I believe that when we discuss this matter, we can come up with answers going forward to things that our people want and wish for," Cho said during the meeting, as quoted by Yonhap. The outlet suggested that the talks would address the details of the planned intra-Korean summit, including the date and venue of the meeting. Moreover, the negotiations would be dedicated to what had been achieved by the two sides since their previous summits, the outlet suggested. South Korean President Moon Jae-in and North Korean leader Kim Jong-un held two bilateral meetings earlier this year amid burgeoning diplomacy on the Korean Peninsula.
Seoul and Pyongyang prepare for September summit while US intensifies campaign against North Korea --North and South Korea held high-level talks on Monday in preparation for a third summit between the North’s chairman, Kim Jong-un, and South Korean President Moon Jae-in next month in Pyongyang. A specific date has not yet been announced, but the meeting will most likely take place in mid- or late-September. Moon will be only the third sitting South Korean leader to make such a trip. Kim Dae-jung and Noh Moo-hyun each visited Pyongyang in 2000 and 2007 respectively. Moon hailed the future summit and the further development of North-South relations during Wednesday’s Liberation Day speech, which marks the end of Japanese rule in 1945. “Even though a political unification may be a long way from here, establishing peace between the South and the North and freely visiting each other, and forming a joint economic community is true liberation to us,” he claimed.The “peace” and “liberation” Moon is offering for the Korean Peninsula is far different from what many in the South have imagined. It does not include an end to the division of Korea, allowing workers and farmers to travel unrestricted across the current border, for families to reunite, and for people to visit their ancestral homes. Instead, Seoul is advocating the maintenance of the two states and the continuation of the Stalinist police-state regime in the North. Under the proposed arrangement, Kim Jong-un and the ruling clique in Pyongyang would serve as highly paid compradors, enforcing the brutal exploitation of North Korean workers for South Korean and transnational corporations. Moon called for the establishment of special economic zones in Gyeonggi and Gangwon Provinces along the border, which would exploit cheap North Korean labor and lead to the suppression of South Korean wages in the name of remaining “competitive.” The South Korean president made sure to show that he was not departing from the line of the Trump administration, which has insisted there will be not be any lifting of harsh economic sanctions on North Korea until it dismantles its nuclear weapons’ program. Echoing Washington, Moon declared: “Economic cooperation can really take off when peace is established on the Korean Peninsula, along with its complete denuclearization.”
South Korea Is Going Crazy Over a Handful of Refugees - The Yemeni refugees who entered South Korea earlier this year should have been a nonstory. Only 561 escapees from the ongoing Saudi-led war in Yemen made it to Korea’s Jeju Province, where 552 applied for asylum, a pittance compared to, say, Germany, which handled approximately 890,000 asylum-seekers in 2015. The Yemeni refugees were confined to the island of Jeju, hardly in a position to interact with the South Korean population at large, much less compete for a job or pose a threat in any way. Yet the South Korean public reacted to these handful of refugees with hysteria. The petition to liberal President Moon Jae-in demanding the government not accept the refugees garnered more than 700,000 signatures—the highest number since the Blue House opened its online petition system in August 2017. The response to the petition highlights the problems that South Korea’s liberal government is facing as it copes with the legacy of a poisonous conservatism, and with the demands of a public that has become acutely sensitive to race. The Moon administration responded swiftly: Although Jeju is a tropical island province that allows visa-free entry for visitors from most countries in order to promote tourism, on June 1, the government added Yemen to the small list of countries (including Afghanistan, Iraq, and Kosovo) excluded from the policy, effectively prohibiting more Yemeni refugees from reaching the country to claim refugee status. The government also prohibited the asylum-seekers from leaving the island and entering the mainland Korean Peninsula. The response to the Blue House petition, given by Justice Minister Park Sang-ki and the Blue House’s new media secretary, Chung Hye-seung, on Aug. 1, did reaffirm South Korea’s international obligations toward refugees. In the video response, Chung reminded the viewers that the Provisional Government of the Republic of Korea, the constitutional precursor to the current South Korean government, was a government-in-exile established by Korean refugees in Shanghai who had escaped Japanese colonial rule. Park affirmed that the Yemeni refugees entered South Korea legally. He stated that, contrary to the petition’s extreme demands, South Korea has no intention of withdrawing from the Convention Relating to the Status of Refugees, the international treaty that sets forth basic international obligation toward refugees, nor would it abolish Jeju’s visa-free policy. Park also proposed establishing a special tribunal for refugees, staffed with area and language experts, as per United Nations recommendations.
If India Produces More Foodgrains Than It Needs, Why Are People Still Starving? - “After a prolonged decline, world hunger appears to be on the rise again”, claims a report titled ‘The State of Food Security and Nutrition in the World (2017)’ by the Food and Agriculture Organisation of the UN. Nowhere is this more true than in India, which is home to 190.7 million undernourished people, the most in any country. While this may seem like a fantastic claim in the context of the fastest growing economy in the world, here are some statistics from the report:
- –14.5% of the Indian population is under-nourished
- –47.5 million Indian children under five years of age are stunted – again, the most in any country in the world
- –51.4% of Indian women of reproductive age (15-49 years) suffer from anaemia
- –64.9% of Indian women (the highest proportion in the world) rely exclusively on breastfeeding for feeding infants between 0-5 months of age
These numbers certainly tell a story – but numbers are, by definition, abstract concepts. Putting a face to this story may help – or faces, in this case. A few days ago, three sisters (Mansi (8), Shikha (4), Parul (2)) in Delhi’s Mandawali area died of starvation. Amita Saxena, the medical superintendent of Lal Bahadur Shastri Hospital, told NDTV that “….there was not a speck found in the stomach, bladder and rectum of the children……it looked like they had not eaten since eight-nine days”. This is not an isolated incident – in October last year, 11-year old Santoshi, in Jharkhand, died of starvation when her mother’s ration card was cancelled after she failed to link it to Aadhaar. In another recent occurrence, Rajendra Birhor, a 40-year-old tribal man in Jharkhand died of starvation, as his family did not have a ration card. His death followed that of Chintamani Malhar, another 40-year-old in the same district who had died of starvation a couple of weeks earlier.
Pakistan dynasties unite against triumphant Imran Khan -- The two dynasties that have battled for control of Pakistan for generations will join forces on Monday, promising to stage “noisy protests” inside parliament against the results of last month’s elections as new members take their oaths. The Pakistan Muslim League-Nawaz, which is controlled by the Sharif family, and the Pakistan Peoples party, run by the Bhuttos, have formed an unlikely alliance against Imran Khan, the former cricketer whose party won most seats last month. Analysts say that if the two parties manage to maintain their unity, they could present a significant obstacle for Mr Khan, who is due to take his oath as prime minister in the coming days. One senior PML-N politician said: “Inside the house we are going to keep up the clamour that the elections were clearly rigged.” A leader of the PPP added that the two parties would combine forces inside parliament over the next few years “on important political and legislative issues”. Mr Khan has spent the past few weeks composing a governing coalition, after his Pakistan Tehreek-e-Insaf party won 116 of the 272 contested parliamentary seats. His negotiations have taken place, however, against a backdrop of protests by the opposition parties, which claim the PTI was helped by interference from the country’s powerful security services — something denied by both the PTI and the army. The controversy has formed an unexpected bond between the PPP and the PML-N, whose ruling families have been in charge of Pakistan for about half of the past 50 years, and which jointly won 107 seats at the election.
Why are UK and US sending more troops to Afghanistan? - BBC News --Prime Minister Theresa May has announced that 440 more British military personnel will join the Nato mission in Afghanistan. But how do the UK and US allies see their role in the country? The additional troops will be ferrying international advisors safely around the country's capital city, Kabul, in their Foxhound vehicles in what has been dubbed "Armoured Uber". All part of the Nato mission to train, advise and assist the Afghan security forces. For British soldiers and most of Nato's forces it is no longer a combat mission. It's now almost four years since British troops left the heat and dust of Afghanistan's Helmand province. It's where hundreds lost their lives. Today the Taliban still control most of Helmand. Two years ago, the Americans returned, albeit in smaller numbers than previously served in the province. It's a return, too, for their commander, Brig Gen Ben Watson, who was last in Helmand in 2010. He says: "I'm not surprised we're still committed here in some fashion."He calls the decision in 2014 by US and British forces to leave "premature". And if the Americans had not returned, he says: "I would imagine that Helmand would be pretty solidly under the Taliban right now." Gen Watson now commands about 500 US Marines who, we are repeatedly told, are not there to lead the fight, but to "advise and assist" the Afghan forces. That support includes US air strikes against Taliban positions, which are also targeted with the Marines' ground-based long-range HIMARS artillery rockets. It also means overseeing the training of the Afghan army, whose troops need all the help they can get.
New Zealand primary teachers hold nationwide strike --Around 29,000 public primary school teachers and principals across New Zealand struck for 24 hours on Wednesday over pay and conditions. It was the first nationwide strike called by the trade union, the NZ Educational Institute (NZEI), since 1994 and only the third in its 135-year history.More than 1,400 schools closed, affecting around 400,000 students. An estimated 10,000 teachers and supporters marched in Auckland, 4,000 rallied in Wellington, 3,000 in Christchurch, 500 in Dunedin, and hundreds more in other towns.NZEI originally called for a three-hour stoppage, but demands for stronger action at membership meetings in June forced an online ballot that overturned the recommendation. Still seeking to avoid the strike, NZEI entered mediation with the Ministry of Education (MoE) but talks broke down last week. Teachers are joining the global resurgence by the working class, including teachers’ strikes across several states in the US, against austerity measures imposed following the 2008 global financial crisis.The nine month-old Labour Party-led government is confronting a growing movement for better wages and conditions. Nearly 30,000 nurses, healthcare assistants and midwives struck on July 12, for the first time in 30 years. The NZ Nurses Organisation (NZNO) pushed through a sellout agreement last week.Following resolutions passed at a NZEI national conference last year, the union lodged a claim for a 16 percent pay increase over two years, renewal of “pay parity” with secondary teachers, more staff and reduced workloads. The government has offered a derisory pay increase of around 6 percent for most teachers, spread across three years. Teachers are determined to fight. In Auckland and Wellington, NZEI officials asked the thousands gathered if they would support a further two-day strike. They were greeted with loud cheers. Later, NZEI president Lynda Stuart reassured Fairfax Media that “we don’t want to go into that space.” She sought to promote illusions in the Labour government, saying it “is highly aligned with the policies we agree with … I’m sure that they are listening.” No date has been set for another strike and the union has re-entered negotiations.
New Zealand rolls out ban on foreign national property purchases - New Zealand has rolled out legislation banning foreigners from buying existing homes in the country amid an ongoing housing crisis which has left tens of thousands of people homeless.The Overseas Investment Amendment Bill, passed by parliament on Wednesday, is aimed at making housing more affordable for residents, particularly first-time buyers."This government believes that New Zealanders should not be outbid by wealthier foreign buyers," Associate Finance Minister David Parker, of the ruling Labour Party, said in a statement."Whether it's a beautiful lakeside or ocean-front estate, or a modest suburban house, this law ensures that the market for our homes is set in New Zealand, not on the international market," he added.Foreigners who already own homes in the country will not be affected by the legislation, which also exempts Australian and Singapore nationals because of bilateral free-trade agreements.About three percent of houses bought in the first three months of this year were purchased by foreign nationals, according to government statistics, with Chinese, Australian and UK citizens accounting for the largest contingent of international buyers.
The CFA Franc Zones: Neocolonialism and Dependency - French geopolitics in Africa is interested in natural resources. Initially, the franc zone was set as a colonial monetary system by issuing currency in the colonies because France wanted to avoid transporting cash. After these countries gained their independence, the monetary system continued its operation and went on to include two other countries that were not former French colonies. At present, the CFA franc zones are made up of 14 countries. The fact that even today the currency of these regions is pegged to the euro (formerly French franc) and that reserves are deposited in France shows the subtle neocolonialism France has been pursuing unchecked. It is a currency union where France is the center and has veto power. This is supported by African governing elites who rely on the economic, political, technical, and sometimes military support provided by France. It is no wonder then that these former colonies are not growing to their full potential because they have exchanged development through sovereignty for dependency on France. This article investigates the set up of the CFA franc zones, its ties to French neocolonialism and its ability to further breed dependency in the former colonies of West and Central Africa.
Mistaken for vampires and accused of witchcraft, BBC crew ‘nearly stoned to death’ in Malawi - A BBC film crew investigating a string of child killings in the southern African state of Malawi narrowly escaped death, after an undercover meeting with a witch-doctor was interrupted by a mob accusing them of being “vampires”. The documentary team from BBC Africa were working alongside undercover journalist Anas Aremeyaw Anas, who never shows his face, to investigate a string of murders which have been attributed to black-magic “muti” witch-doctors. Victims have been found without heads and missing body parts. Witch-doctors are suspected of snatching children and young people and using their body parts as get-rich amulets for wealthy clients.Posing as a wealthy businessman looking to increase his wealth, Anas tracked down a self-confessed killer named Kamanga, who told the team, in secret footage published on Monday, that the most useful parts for good luck were the head and genitals. Along with an associate, Kamanga told the BBC team that he could create good luck for the ‘businessman’ by killing and sucking out the blood of children.A further meeting with the killers at night, saw them describe how they could also break the skull and remove either the brain or tongue.But the meeting was interrupted by the sounds of an approaching mob of villagers nearby. They were armed with machetes, knives and stones and accused the BBC team of being “vampires” and “killers.” Showing the villagers their press accreditation failed to quell the mob, with one cutting the back of Anas’ suit with a knife. The journalists started running and were pursued by the mob, who threw stones at them. The team managed to escape by running for their lives into the night, later to be saved by community police and a local chief.
As Venezuela disintegrates, a new breed of pirates threatens the Caribbean - Centuries after Blackbeard’s cannons fell silent and the Jolly Roger came down from rum ports across the Caribbean, the region is confronting a new and less romanticized era of pirates. Political and economic crises are exploding from Venezuela to Nicaragua to Haiti, sparking anarchy and criminality. As the rule of law breaks down, certain spots in the Caribbean, experts say, are becoming more dangerous than they’ve been in years. Often, observers say, the acts of villainy appear to be happening with the complicity or direct involvement of corrupt officials — particularly in the waters off collapsing Venezuela. “It’s criminal chaos, a free-for-all, along the Venezuelan coast,” said Jeremy McDermott, co-director of Insight Crime, a nonprofit organization that studies organized crime in Latin America and the Caribbean.Comprehensive data on piracy is largely lacking for Latin America and the Caribbean. But a two-year study by the nonprofit Oceans Beyond Piracy recorded 71 major incidents in the region in 2017 — including robberies of merchant vessels and attacks on yachts — up 163 percent from the previous year. The vast majority happened in Caribbean waters. The incidents range from glorified muggings on the high seas to barbaric attacks worthy of 17th-century pirates. In April, for instance, masked men boarded four Guyanese fishing boats floating 30 miles off the coast of the South American nation. The crews, according to survivors’ accounts, were doused with hot oil, hacked with machetes and thrown overboard, then their boats were stolen. Of the 20 victims, five survived; the rest died or were left unaccounted for. “They said they would take the boat and that everyone should jump overboard,” survivor Deonarine Goberdhan, 47, told Reuters. After being beaten and thrown in the sea, he said, “I tried to keep my head above water so I could get air. I drank a lot of salt water. I looked to the stars and moon. I just hoped and prayed.” There have been reports of piracy over the past 18 months near Honduras, Nicaragua, Haiti and St. Lucia. But nowhere has the surge been more notable, analysts say, than off the coast of Venezuela.
Global economic outlook is darkening: Kemp (Reuters) - Cyclical indicators point to slower and more uneven growth in the global economy for the rest of this year and into 2019, which means the rise in oil consumption is likely to moderate, especially for distillates like diesel.Economic growth remains strong in the United States, but in much of the rest of the world clear signs of slackening momentum have emerged since the start of the year. (https://tmsnrt.rs/2P8CShp)Strong and synchronised global growth in 2017 has given way to a weaker and more varied picture in 2018 and 2019, which is likely to be less supportive for oil consumption and prices:
- The OECD's composite leading indicator, which covers the advanced economies plus China, India, Russia, Brazil, Indonesia and South Africa, peaked in January but has since fallen and slipped below trend in May and June.
- World trade volume growth also peaked in January at almost 5.7 percent year-on-year but had nearly halved to less than 3 percent by May, according to the Netherlands Bureau for Economic Policy Analysis.
- The new export orders component of JPMorgan's global purchasing managers' index peaked in January, showing the fastest increase for seven years, but has since fallen every month and showed only marginal growth in July.
- South Korea's KOSPI-100 share index .KS100, a useful proxy for global trade growth given the country's heavy export orientation, peaked in January but has since fallen and hit a 15-month low this week.
- Air freight volumes are still growing but more slowly than in 2017, reflecting the completion of the restocking cycle and a slowdown in manufacturing orders, according to the International Air Transport Association.
These trade-oriented indicators are all correlated closely with one another and with the rate of expansion in the world economy - and they all tell a consistent story of slowing momentum outside the United States. The softening outlook for world trade has filtered through to the oil market, with Brent calendar spreads and spot prices peaking in April and May respectively. Medium-density refined fuels, including road diesel, marine gasoil and jet kerosene, are the most heavily geared to the growth of freight given their dominance in the road, rail, shipping and air cargo sectors.
How The Global Trade Contraction Begins - From our perch overlooking San Pedro Bay, the main port of entry for Chinese made goods into the USA, facets of the mounting economic catastrophe come into focus. These elements, even for the most untrained of eyes, are impossible to miss.To meet the relentless expansion of international trade, berths have been widened, and channels have been deepened to accommodate the definitive absurdity of perpetual credit creation: The CMA CGM Benjamin Franklin. This mega container ship, if you’re unfamiliar with it, is over 20 stories tall, the width of a 12 lane freeway, and longer than four football fields. It has enough cargo space to hold 90 million pairs of ‘Made In China’ shoes. The secondary distortions of this mammoth – next generation – cargo ship will provide historical evidence to future generations of a political economy that went seriously awry. For example, at the Port of Long Beach the Gerald Desmond Bridge replacement is currently being constructed at a cost of $1.5 billion. With two towers stretching 515 feet into the sky, this will be the second tallest cable-stayed bridge in the United States. The purpose of the bridge replacement is to provide greater clearance into the Port’s Inner Harbor for mega container ships. As the new bridge deck goes up, it dwarfs the prior edifice like some futuristic motorway traversing up to the heavens. The general philosophy of the bridge’s proponents appears to be that global trade expands in perpetuity. Hence, more and more space will be needed for more and more next generation container ships. There’s even 50-years of data to support this belief. But that doesn’t mean what is will always be.From a practical standpoint, global trade has expanded without interruption for so long that only senior citizens – if they still have their wits about them – can remember anything different. Yet, global trade hasn’t always expanded. In fact, there have been long episodes of contractions in global trade.Those willing to look back to the first half of the 20th century will discover something that goes counter to their life experience. Global trade, as a proportion of total economic activity, went down between the onset of World War I and the 1960s. That’s a near 50 year run of declining global trade. Could another half-century contraction in global trade happen again?
Integrity of official statistics under threat -- Bruegel -- Andreas Georgiou, former head of the Hellenic Statistical Authority (ELSTAT), has become the public face of the global threat to the integrity of official statistics and statisticians. The facts of the case are well known. The International Statistical Institute, the American Statistical Association and multiple regional statistical bodies have decried the threat in their expressions of support for Georgiou. A recent petition collected over a thousand signatures, including from nine Nobel laureates in economics. Georgiou has been convicted for “violation of duty” for not submitting ELSTAT’s final figures on the 2009 budget deficit for approval by a politically appointed board. Given what is known of the views held by that board’s members, seeking its approval would surely have led to misleading figures. Instead, he followed the European Statistics Code of Practice, which assigns “sole responsibility” to heads of national statistical institutes (NSIs), such as ELSTAT, for their data production and dissemination. The appeals court conviction, upheld by the Supreme Court, ignored the fact that the European Statistics Code of Practice had been explicitly endorsed under Greek law before Georgiou took up his post. The irony is that successive Greek governments, while claiming to stand aside from the prosecutions of Georgiou, have used the same figures and statistical methodologies to justify financial support and now debt relief from their European partners. Unfortunately, European leaders have largely refrained from bringing pressure on Greek politicians to stop damaging the reputation of Greece and the European Union. Reliable official statistics are essential building blocks of sound economic policy. Budget projections inevitably contain a combination of revenue and expenditure estimates and a dose of politics. Budget outcomes, as recorded in official statistics, however, are different. They must be accurate and above suspicion of political manipulation. They are crucial to the transparency and democratic accountability of governments. They are critical to the functioning of market activity, saving and investment, and thus to growth, employment and prosperity. Concerns about political manipulation of statistics are especially relevant for the euro area, where joint economic policies rely critically on the accuracy of national statistics on economic growth, budget outcomes, and sovereign debt, which are aggregated (but not compiled) by Eurostat, a department of the European Commission.
Erdogan: Alliance with US at risk, Turkey target of ‘trade war’ -- Turkey's president has pledged to defy what he describes as United States attempts to weaken his country's economy, rallying supporters a day after Washington imposed even higher tariffs on Turkish metals - sending the lira tumbling.The two NATO allies remain at loggerheads over multiple issues ranging from diverging interests in Syria to Ankara's expressed desire in purchasing Russia's S400 anti-missile system, as well as the lingering case of an Evangelical pastor who is on trial in Turkey on terrorism charges.Amid the worsening relations, the Turkish lira has lost more than 30 percent of its value against the US dollar since the start of the year. On Friday, US President Donald Trump's decision to double steel and aluminium tariffs on Turkey sent the lira into another dive, falling as much as 18.5 percent at one point. Speaking on Saturday in the northeastern Turkish province of Rize, President Recep Tayyip Erdogan said the US would pay a price by challenging Turkey for the sake of "petty calculations", denouncing Washington for declaring "economic war on the entire world" and holding countries "for ransom through sanction threats". He also described dollars, euros and gold as "the bullets, cannonballs and missiles of the economic war being waged against our country"."Those who can't compete with us on the ground have brought online fictional currency plots that have nothing to do with the realities of our country, production and real economy," Erdogan added."The country is neither crumbling nor being destroyed or bankrupt or in a crisis," adding that the way out of the "currency plot" was to boost production and minimise interest rates.
How serious is Turkey's lira crisis and what are the implications? - How serious is Turkey’s crisis? Bad and getting worse by the day. Over the past five years, Turkey’s growth has been virtually keeping pace with that of China and India but it is now displaying the classic signs of overheating: a large trade deficit, a construction boom and soaring debt. Financial markets have taken fright at inflation, rising at an annual rate of more than 15%, and have been selling the Turkish lira, which is down by 45% against the US dollar since the start of the year. What are the implications for the global economy? The direct impact of what looks like an inevitable recession in Turkey would be relatively small because, despite a population of 80 million and strong growth in recent years, the country accounts for only 1% of global GDP. Eurozone countries run a trade surplus with Turkey but it is small. In the two previous Turkish financial crises since the turn of the millennium, European exporters have been able to divert their business to other markets. The European Central Bank has expressed concern about potential contagion through the eurozone banking system, with Spain, followed by Italy, the most heavily exposed countries. A bigger danger is that Turkey’s crisis will spill over into other emerging market economies and there were signs on Monday that other countries seen as vulnerable were coming under speculative attack. Turkey’s problems are particularly acute because it has more than $300bn of dollar-denominated corporate debt, which is getting more expensive to finance by the day. However, other countries – such as Mexico and South Africa - also took advantage of low US interest rates in the years after the financial crisis to borrow heavily in dollars and saw their currencies coming under pressure. The fear is of a full-blown emerging market crisis.
Turkey’s perfect storm — Turkey’s president, Recep Tayyip Erdoğan, came to power on the heels of the 2001 financial crisis that ended entire political careers. Following Friday’s meltdown in the Turkish economy, a day Turks are already hailing as “Black Friday,” many are left wondering whether Erdoğan will also fall from power. The Turkish strongman, who has been engaged in a protracted diplomatic spat with the U.S. and various EU countries, now blames Turkey’s woes on an “economic war” waged by outside forces. But Turks are not buying it. When it comes to Turkey’s economic woes, the government only has itself to blame. Turkey’s economy has been overheating for some time. The global liquidity glut in the aftermath of the 2008 global financial crisis has allowed emerging markets such as Turkey to access cheap capital, leading to private sector over-leveraging. Turkey’s non-financial companies have borrowed over $340 billion in foreign liabilities. Now that the U.S. Federal Reserve is tapering its release of cheap money, emerging markets are feeling the dollar liquidity squeeze. Turkish companies are having difficulty servicing their foreign-currency debt. And with the Turkish lira losing 44 percent of its value against the dollar this year, many businesses are rushing to banks to restructure their loans. Indeed, the crisis is spilling over to the financial sector. So much so that the European Central Bank now warns of the exposure of EU banks to Turkey, which exceeds $166 billion. Faced with a looming economic crisis, Erdoğan over the past couple of years has chosen to use his expanded powers to punish his domestic enemies and challenge his Western allies instead of focusing on much-needed structural reform. Since Turkey’s failed coup attempt in July 2016, Ankara has jailed lawmakers, journalists, academics and civil servants. The Erdoğan government has seizedassets worth $11 billion, too, to the concern of investors worldwide. Meanwhile, Ankara has also jailed over 50 Western nationals, residents and employees on dubious political charges, as part of Erdoğan’s ill-contrived policyof “hostage diplomacy,” which is aimed at extracting concessions from Turkey’s Western allies. The tactic of using innocent detainees as bargaining chips — a policy borrowed from Tehran and Pyongyang’s playbooks — has not only tarnished Turkey’s global image, but also triggered the worst crisis between Washington and Ankara since the former’s 42 month-long military embargobetween 1975 and 1978. Again, investors took note.
Can Turkey turn to the Arab world for economic support? - The value of Turkey's currency, the lira, has nosedived over the past week, hitting record lows against the dollar. With the currency under pressure, all eyes remain fixed on President Recep Tayyip Erdogan, who has invoked the kind of outlandish and provocative rhetoric he has become known for in recent years."If they [Americans] have dollars, we, too, have our people, our God," Erdogan said on Friday.According to Hazim al-Amin, columnist at the Al-Hayat newspaper, remarks like that are only likely to alienate the Arab leaders whom Erdogan will need to turn to in his country's tough times. Erdogan's behavior is typical of populist politicians who like to utilize religious sentiments rather than secular politics guided by reason, said al-Amin. "This group includes Donald Trump, Benjamin Netanyahu, Vladimir Putin, Ali Khamenei and Erdogan," he explained. "They are all concerned with at least partially replacing politics with religion." Trump, like Erdogan, has riled European leaders with his harsh rhetoric, particularly when it comes to trade, said al-Amin, but the reaction there has been somewhat restrained in comparison. However, when it comes to the ongoing diplomatic strife between the United States and Turkey, fueled by the controversy surrounding US pastor Andrew Brunson, who is being held on terrorism charges, the US president may have met his match. "Catastrophe is inevitable," said al-Amin.Theoretically, it is conceivable that the Turkish president will release Brunson, "but that would be a loss of face for Erdogan that would leave him little support from his followers," said Ulusoy, adding that such a solution is perhaps only probable in the long term.
Amid spat with Trump, here are Turkey’s other friends - President Trump has raised doubts over a number of international U.S. “friendships” this year, lashing out at the European Union, Japan and now Turkey. By imposing new tariffs on the country, Trump sent its currency into free fall over the weekend.As was the case with the E.U., Trump’s moves provoked a strongly worded response by the Turkish government. But unlike the E.U., Turkish President Recep Tayyip Erdogan might not be bluffing when he says that he has real alternatives to the United States.“Before it is too late, Washington must give up the misguided notion that our relationship can be asymmetrical and come to terms with the fact that Turkey has alternatives,” Erdogan wrote in a New York Times op-ed published on Friday.The divide between Turkey and the United States was not entirely unexpected, following years of disagreement over Syria, democratic changes and economic policies. So far, Western nations still account for the majority of investments in Turkey. But as differences with Europe and the United States have mounted, Turkey has worked to boost its partnerships with other countries in recent years — first and foremost Russia, China and Qatar. Turkey’s increasingly robust ties with Russia were hardly a secret in Washington foreign policy circles. Turkey has long had more extensive links to the Kremlin than other U.S. allies in the region that only recently established ties.Since a failed 2016 coup attempt in Turkey, Erdogan has stepped up his anti-U.S. and anti-Western rhetoric to rally his supporters. The Turkish leader has repeatedly accused the United States of being complicit with the coup plotters — accusations that coincided with improved relations with Moscow. For the past two years, Turkish officials have also taken part in meetings with their Russian and Iranian counterparts to discuss Syria. The fact that the United States was left out during the talks indicated just how far the two NATO members have grown apart. “Turkey’s drift from the transatlantic alliance and movement toward Russia and Iran has been in the making for a long time,” . “For Erdogan, the United States has become irrelevant, because in the Middle East actions count more than rhetoric and from his perspective, Washington was more talk than action.”
"Speculators And Economic Terrorists Will Pay": Lira Plunges After Latest Erdogan Speech - With interventions by both the Turkish banking regulators and the country's central bank failing to halt the collapse in the lira, President Erdogan decided to give it another try, and after several weekend speeches that only exacerbated diplomatic relations with the US while raising concerns about capital controls after the president rejected hiking rates and an IMF bailout, in a televised speech the Turkish president continued to portray Turkey’s current struggle as an "economic siege", referring to "different forms of these attacks", and warning that "the economy and other areas" remains potential targets."The lira’s recent weakness is part of the economic war being waged against Turkey and has no economic basis", President Erdogan said adding that his son-in-law, and Turkey's Treasury and Finance Minister, will "continue to take necessary steps” against "economic siege"Erdogan promised that the lira will “settle” at a reasonable level soon although it was not clear what level he had in mind. He also vowed that Turkey will never abandon rules of free market economy which is rather bizarre for an "executive president" to say.Erdogan had a few choice words for the US, commenting on the rapidly-degraded status of the relationship between the two countries: "The US is attempting to stab Turkey in the back... US trade actions are against WTO principals."Meanwhile, picking up on the point we noted before, he said that the Turkish judiciary is targeting online "economic terror personalities", as Turkey prepares to throw in jail anyone it deems is responsible for the ongoing economic collapse... anyone except the president that is. "Those spreading speculation on banks or FX will pay" the president warned. Finally, he said that today’s developments "bear no similarity to the crises of 1994, 2001 or 2007" which may be the closest admission that today's development do, in fact, bear a striking similarity to precisely those crises.
Turkey Rules Out Capital Controls As Germany Says IMF Bailout "Would Be Helpful" -- During this morning's conference call organized by Citi, HSBC and other banks with "thousands" of investors, Turkey's Treasury and Finance Minister Berat Albayrak - the Jared Kushner of Turkey - eased nerves when in an attempt to bolster confidence, said that capital controls were ruled out as a policy option for Turkey. As a reminder, capital controls are widely seen as the "worst case scenario" for Turkey as they could precipitate "self-fulfilling contagion", and lead to broader capital flight from the EM space. Albayrak also said that reining in inflation and narrowing the current-account deficit were policy priorities, although he provided no details on how we would do that absent raising interest rates - an outcome that Erdogan has decried as unlikely - with both an IMF bailout and capital controls off the table. Discussing Turkey's runaway inflation, Albayrak said the central bank alone wouldn’t be able to rein it in without tighter fiscal policy, although he has yet to provide any details on what options are on the table. In the meantime, GDP is set to slow further in the medium term from 7.4% expansion last year. Still, after losing as much as a quarter of its value in the past few weeks after the U.S. sanctioned members of President Recep Tayyip Erdogan’s government, it continued to recover losses both before and after this morning conference call, rising to the highest level since last Friday, after Turkey cracked down on short sellers. Albayrak's speech appears to have been successful, and the lira gained trading 4.0% stronger at 5.70 per dollar.
Europe watches as Turkey burns --Looks like Allah is betting on the dollar. Nearly a week has passed since a livid Recep Tayyip Erdoğan thundered “they have dollars, we have God” in Washington’s direction. So far, the Almighty isn’t helping. And while European officials say they would like to help (the last thing the EU needs at the moment is a destabilized Turkey) there’s little they can do but sit and watch. For one thing, there’s no political will to get involved. Erdoğan’s aggressive posture toward Turkey’s European neighbors in recent years, in particular Germany, has sapped his political capital on the Continent. While some in Europe fear Turkey’s crisis could endanger the EU’s refugee deal with Ankara, that’s unlikely. The reason: Erdoğan needs hard currency now more than ever. Another worry is oil. Turkey is a net importer of oil, which is traded in dollars. Even the exposure of several large European banks to Turkey is unlikely to change Europe’s political calculus. Despite investor angst over the liabilities, which total about €150 billion, the exposure is a fraction of the sector’s overall loan book. That’s why JPMorgan describes the Turkey risk for Europe’s banks as “significant but manageable.”Europe’s trade exposure to Turkey is also limited. The country accounts for just 1.6 percent of German exports, for example. Economists predict that if Turkey remains on its current trajectory, it will require some form of rescue. But Europe’s bailout mechanisms are for members only. Even if the EU could help Turkey, Erdoğan would likely refuse to accept the conditions attached to such aid, such as deep spending cuts. Turkey’s crisis, the result of years of loose fiscal and monetary policies, is almost entirely of Erdoğan’s own making. And a big part of what makes the situation so dangerous for Turkey is that Erdoğan is the only one with the power to fix things. He is unlikely to do so in the near term. Instead of pursuing a compromise in his standoff with the Trump administration over Turkey’s imprisonment of an American pastor, Erdoğan is digging in his heels, signaling this week that he’s prepared for “war.” On Tuesday he said Turks would boycott iPhones and other American electronics. He also lashed out at domestic critics of Turkey, calling them “traitors” and “economic terrorists.”
What Should the EU Do About the Turkish Currency Crisis? The Turkish lira has lost more than 30% of its value against the US dollar since the beginning of this year. After the political escalation of tensions between the US and Turkey and the increase in tariffs on some Turkish imports last week, the lira was temporarily in free fall. The situation seems to have stabilised now, but there are still significant questions on the economic situation.Turkey has, according to the IMF, about 23% of short-term external debt – i.e. about $180bn of external debt – mostly from non-financial corporates that needs funding. The IMF has warned of the overheating economyfor some time and called for more caution on the fiscal guarantees on banks’ loan programmes and other implicit liabilities. Nevertheless, Turkey’s public-debt-to-GDP ratio is limited to around 28% and the deficit is above 3%. The current account deficit is above 5%. So the overall numbers indeed suggest that a correction in macroeconomic policies is needed.It is too early to say that Turkey will need a bail-out programme, as some have suggested. Certainly, if the political conflict with the US escalates, the nervousness in markets towards funding Turkey will increase. And while the lira has stabilised in the last few days, the whole situation certainly calls on European policy makers to reflect on what should be the EU’s position towards Turkey. There are three main reasons for the EU to care about the current Turkish crisis. First, a financial crisis in a neighbour country of the EU could have a direct negative impact on the EU economy, mainly through the exposure of its banks operating in Turkey (in particular from Spain, France, Italy and Germany) and through trade with Turkey. The second reason to worry about a crisis in Turkey is because of possible political knock-on effects and resulting changes in Turkey’s migration policy. Turkey is a transit country for most refugees, but also economic migrants, that want to come to Europe from the Middle East and Asia. The EU has a deal in place with Turkey on Syrian refugees. Could a financial crisis change politics so much that it would lead to a change in Turkey’s approach to migration? The answer to that question is of great importance to the European Union. Finally, geopolitical considerations are also important. President Erdogan has already announced that his country could turn its back on the West and look for new allies.
"Serious Incident" Unfolds As NATO Jet Accidentally Launches Secret Missile Near Russian Border - Estonia’s defense minister has halted a NATO war exercise in Estonia pending an investigation after a fighter jet deployed in northeast Europe accidentally fired a secret missile during training. Authorities are now searching for the rocket, which was shot over the Baltic country’s airspace by a Spanish fighter jet this week near the Russian border. Minister of Defense Juri Luik said Thursday during a press conference in Tallinn, the capital of Estonia, the air-to-air missile was mistakenly launched Tuesday over southern Estonia has not been found nor did it injure any civilians. A Spanish eurofighter accidentally fire a missile near Otepaa, at around 65 kilometer of the russian border v @TheArabSource pic.twitter.com/QwQEkgbRKc — Emmanuel (@EmmanuelGMay) August 7, 2018“The Spanish defense minister has apologized and expressed deep regret,” Luik said, adding that the commander of the Spanish Armed Forces has apologized for the mishap.According to Fox News, Estonian Prime Minister Juri Ratas communicated with NATO Secretary-General Jens Stoltenberg on Wednesday, expressing Estonia’s concern over the “serious incident.” The Advanced Medium-Range Air-to-Air Missile (AMRAAM) is a modern beyond-visual-range air-to-air missile (BVRAAM) capable of all-weather day-and-night operations with a range of up to 100 kilometers (62 miles). Luik told reporters the AMRAAM might have crashed into a remote nature reserve in the eastern Jogeva region — not far from Estonia’s border with Russia
Dozens Of Cars Torched By Masked Youths In Western Sweden, Authorities Say -Dozens of cars were set on fire overnight in western Sweden, in a series of attacks that Swedish authorities suspect may have been coordinated on social media.Up to 80 cars were torched in Gothenburg, Sweden's second-largest city, as well as other nearby towns, Radio Sweden reports. Authorities say that groups of masked young people are responsible.And the country's leaders are not happy."I am really furious," Swedish Prime Minister Stefan Lofven said in an interview with Radio Sweden, as translated by The Guardian. "What the hell are they up to?"Justice and Home Affairs Minister Morgan Johansson called the attacks "despicable," according to The Local, writing on Twitter, "Last year the government tightened the punishment for aggravated vandalism, which can now give up to six years in jail. Hope the thugs get arrested so that they get the punishment they deserved."Video sent to The Local Sweden showed cars being set on fire in a Gothenburg suburb. A group of people entirely clad in black — including masks covering their faces — are seen moving through a parking lot and throwing incendiary devices under cars. The news website says people threw stones and torched cars in several Gothenburg districts.The car attacks are part of a larger pattern, according to Reuters and Radio Sweden: Over the past few years, apparently, Swedish towns have repeatedly experienced violence or car burnings shortly before the end of summer break. The late-summer timing also could have political consequences. "Sweden goes to the polls on [Sept. 9] with violent crime high on the political agenda, after a spate of shootings and grenade attacks, largely in deprived areas with large concentrations of immigrants," the Guardian notes. Despite the widespread property damage, there have been no reports of injuries, the BBC says.
This Is The Turkish "Doom Loop" | Zero Hedge - In a scathing report published earlier today, rating agency Fitch which last month downgraded Turkey to BB, "outlook negative", warned that the moves taken by the Turkish government remain insufficient to restore credibility, and said that the incomplete political response cannot fully address underlying causes of lira's fall, namely large current account deficit & external financing requirements, the country's burgeoning USD-denominated debt load and added that even should the country raise rates - which Erdogan has vowed he won't do - the abrupt tightening in financial conditions will sharpen the slowdown in GDP growth already under way.In short, "the absence of an orthodox monetary policy response to the lira's fall, and the rhetoric of the Turkish authorities have increased the difficulty of restoring economic stability and sustainability."Yet while traders have speculated that a rate hike, while insufficient, would be a welcome first step toward stabilizing the Turkish economy (along with an IMF bailout and/or capital controls) and is far more needed than tinkering with the Lira's liquidity conditions to "burn the shorts" (to borrow a phrase from Elon Musk), some have suggested that even a rate hike would no longer be sufficient to prevent the death spiral that Turkey finds itself in.As Bloomberg's Marcus Ashworth wrote recently, "officials need to demonstrate a total change of attitude, and clearly signal that this won’t be a case of “one and done.” Investors need to see that a series of increases are on their way, and that they will continue until inflation is controlled. This is the only way the doom loop can be broken."Alas, even that would not be sufficient to break Turkey's so-called doom loop. For starters, Turkish inflation has been out of control for a while, and the current account has been in deficit for years. There is also the direct link to the Turkish banking sector, which has become especially vulnerable as a result of the lira’s freefall, resulting in a surge of nonperforming loans as borrowers are suddenly unable to repay their debt, especially if it is dollar-denominated. And much of it is: some 40% percent of the nation’s corporate lending is in foreign currencies, a proportion that only grows as the currency declines.
"Unless Erdogan Changes Course," El-Erian Warns Of "Much Wider Damage... Not Just In Turkey" - Rather than sticking with the approach taken by numerous other countries – including Argentina earlier this year – by raising interest rates and seeking some form of IMF support, Turkey has shunned both in a very public manner. Unless it changes course, the government risks much wider damage – and not just in Turkey. Whether by accident or design, Turkey is trying to rewrite the chapter on crisis management in the emerging-market playbook. Rather than opting for interest-rate hikes and an external funding anchor to support domestic policy adjustments, the government has adopted a mix of less direct and more partial measures – and this at a time when Turkey is in the midst of an escalating tariff tit-for-tat with the United States, as well as operating in a more fluid global economy. How all this plays out is important not only for Turkey, but also for other emerging economies that already have had to cope with waves of financial contagion. The initial phases of Turkey’s crisis were a replay of past emerging-market currency crises. A mix of domestic and external events – an over-stretched credit-led growth strategy; concerns about the central bank’s policy autonomy and effectiveness; and a less hospitable global liquidity environment, owing in part to rising US interest rates – destabilized the foreign-exchange market. A political spat with the US accelerated the run on the Turkish lira by fueling a self-reinforcing dynamic. And all of this occurred in the context of a more uncertain and – aside from the US – weakening global economy. In keeping with the traditional emerging-market-crisis script, Turkey’s currency crisis spilled over onto other emerging economies. As is typically the case, the first wave of contagion was technical in nature, driven mainly by generalized outflows from Turkey’s currency and bond markets. The longer this contagion continues, the greater the concern that it will lead to more disruptive financial and economic outcomes. As such, central banks in several emerging economies – as diverse as Argentina, Hong Kong, and Indonesia – felt compelled to take counter-measures. What has followed is what makes this episode of emerging-market crisis different, at least so far.
Turkey's Collapse Could Send "Millions" Of Refugees Flooding Into Europe -- As Turkey braces for a fresh round of US sanctions amid a plummeting lira and what Turkish President Recep Tayyip Erdoğan says is "economic warfare" with Washington over the detention of US pastor Andrew Brunson, millions of refugees - primarily from Northern Africa and neighboring Syria, would likely flood into Europe as the Turkish economy collapses according to Newsweek. Over 3.5 million refugees now live in Turkey after having escaped the brutal conflict that has continued for over seven years in neighboring Syria. At the same time, there are at least half a million refugees from other parts of the Middle East and Northern Africa also living in the transcontinental country.Many of these migrants settled in the country because of a deal Ankara struck with the European Union in 2016. -Newsweek“There are 4 million refugees in Turkey. Even though they haven’t integrated into Turkish society, they have benefited from a welcoming government. Erdoğan says he’s spent $20 billion of unbudgeted funds on these people. It’s quite clear these are unbudgeted expenditures he’s been willing to spend. But if you add another million on top of that, who knows,” Bulent Alizira, director of the Turkey program at the Washington, D.C.–based Center for Strategic and International Studies, told Newsweek.Erdoğan was convinced to bring the European migrant influx under control in exchange for $6.6 billion in assistance, however this may be untenable as the Turkish economy goes deeper into a death-spiral, and another million migrants may cross the border after an impending Russian-backed Syrian government offensive in the jihadist stronghold of Idlib province. Turkey, meanwhile, has threatened to open the floodgates to Europe in the past - as foreign minister Süleyman Soylu warning that Ankara could send "15,000 refugees to you… each month and blow your mind," while threatening Brussels into footing the bill for the multi-billion dollar deal. Such a scenario "could have major political consequences for politicians like German Chancellor Angela Merkel," whose internal battles within her coalition government have left it in a precarious state after significant pressure to dial back her EU open-border migration policies which began in 2015. Merkel has urged the Erdoğan administration to maintain the independence of Ankara's central bank - stressing the importance of an "economically stable neighborhood," while speaking from Bosnia this week. "No one...has an interest in an economic destabilization of Turkey, but of course everything must be done so that, for example, an independent central bank can work and so on," she added. That said, experts cited by Newsweek say that the majority of migrants who might flee an economic collapse in Turkey would likely flood into Greece, not Germany.
Italy Blocks New NGO Migrant Ship After Malta, Spain Refuse To Take - Italy on Monday denied entry to 141 migrants aboard an NGO transport ship, maintaining the country's hard-line stance against human trafficking into the country. The migrants were picked up off the coast of Libya last week by The Aquarius, a rescue vessel run by Franco-German charity SOS Mediterranee and Doctors without Borders (MSF). Also aboard Aquarius is Reuters journalist Antonio Denti, who reports that both Malta and Spain have denied docking as well, with Spain telling the NGO in a statement "At the moment, Spain is not the safest port because it is not the nearest one." “It can go where it wants, not in Italy!” said Italy's new Interior Minister, Matteo Salvini on Monday, suggesting that France, Germany, Britain or Malta as possible destinations. “Stop human traffickers and their accomplices,” he added. Rome has accused its EU peers of not sharing the burden of incoming migrants, after more than 650,000 have come to Italy since 2014 through a network of well funded NGOs and other means of travel. “Aquarius already requested a place of safety to Malta and Italy,” read the Acquarius's digital log. “Both refused to coordinate the disembarkation of the survivors to a place of safety.” Last June, the Aquarius made headlines after spending nine days at sea playing chicken with Salvini - who had just assumed office as part of the country's new coalition government, when some 630 stranded migrants were denied port. After supplies ran dangerously low, the Italian Navy escorted the migrants to Spain, which agreed to take them. Salvini has called the NGO vessels a "taxi service" and accused them of human trafficking - a charge the charities deny.
Italy Gives ECB An Ultimatum: "Guarantee" Bond Spreads Or "Euro Will Be Dismantled" - While the world remains focused on ground zero of the latest emerging markets crisis, Turkey, and whether contagion from its plunging currency will further pressure global assets, a new - well old - threat has emerged. In an unexpectedly sharp attack on the ECB, in two separate posts on Twitter, Claudio Borghi who is the euroskeptic head of the budget committee in Italy’s lower house, stressed that not only is Italy’s spread with German bonds widening, but also the ones of other nations like Spain are doing so. He added that "either the ECB will provide a guarantee or the Euro will be dismantled" as "there is no third option."Vediamo se oggi cominciano ad accorgersi che salgono anche gli spread di Spagna e c. e che solo un fesso poteva pensare che con BC inattiva potesse salire solo lo spread di un paese?— Claudio Borghi A. (@borghi_claudio) August 13, 2018 Io sono sereno come l'arcobaleno... ormai credo che il meccanismo sia innescato. O arriverà la garanzia Bce o si smantellerà tutto... Non vedo terze vie.— Claudio Borghi A. (@borghi_claudio) August 13, 2018 Commenting on the interview, several sellside desks have cautioned that this seems like something the ECB is unlikely to do as it represents a destabilizing stance and is thus bearish for the EUR. In a subsequent interview, moments after his tweet, Borghi said that "there cannot be a system at the mercy of market movements" without any shields by the central bank - in other words, Borghi appears to be very much against a free and efficient market in which price discovery is allowed especially on such assets as Italian bonds - and noted that "it is significant that an external event like Turkey that has nothing to do with Italy unleashes such an effect."Borghi warned about the upcoming end of the ECB's QE which as we noted previously has been the sole buyer of Italian debt, and whose absence threatens to send Italian bond yields sharply higher: "Nowadays there is a system that has a residual amount of quantitative easing, but with everybody knowing that this is being phased out and will come to an end soon”
Genoa bridge COLLAPSE latest: 35 dead in IMMENSE TRAGEDY as Italy motorway FALLS to ground - (pictures) A BRIDGE on one of Italy's busiest motorways has collapsed, killing at least 35 people who fell 100 metres above the ground. Italy's ANSA news agency reported the updated number of deaths, citing fire brigade sources. A 50-metre high section of the bridge, including one set of the supports above it, crashed down in the rain onto the roof of a factory and other buildings, crushing vehicles below and plunging huge slabs of reinforced concrete into the nearby riverbed.The civil protection agency had said earlier the collapse of the bridge appeared not to have killed anyone under ther road, but only those who were driving on it. The bridge, known as Ponte Morandi, is as tall as 100m (328ft) and is part of the A10 motorway connecting the city of Genoa to Savona and Ventimiglia. Emergency services rushed to the scene following reports of the collapse, which happened at around 11.30am local time (10.30am BST). Italy's Transport Minister Danilo Toninelli called the collapse "an immense tragedy". He said: "I'm following with great apprehension what has happened in Genoa, which appears to be an immense tragedy." More than 200 firefighters, dozens of paramedics and police officers using dogs were on the scene. Fire official Bruno Frattasi told state broadcaster RAI that seven survivors had so far been pulled out from under the rubble. And members of USAR, experts in helping to extract people from urban ruins, are also at work. The Civil Guard said some 35 cars and up to 10 trucks fell from the bridge. More than 400 people were evacuated from 11 buildings near or below the still-standing bridge. One of the hospitals receiving the casualties, Genoa's Villa Scassi, had aided seven badly injured people
Genoa bridge death toll rises to 35 as more bodies pulled from the rubble - (pictures, video) In what witnesses described as an “apocalypse”, an 80-metre section of the Morandi bridge on the A10 motorway came down in an industrial area of the port city during a sudden and violent storm at about 11.30am on Tuesday. About 30 vehicles, including cars and trucks, were on the affected section when it fell 100 metres, mostly on to rail tracks, the fire service said. Investigators are now looking at what could have caused such a catastrophic collapse, creating a scene rescuers compared to the aftermath of an earthquake. Sniffer dogs searched through the rubble, and heavy equipment was moved in to lift pieces of the bridge. Heavy rain also made conditions more challenging.As cars and trucks tumbled off the bridge, truck driver Afifi Idriss just managed to come to a halt in time. “I saw the green lorry in front of me stop and then reverse so I stopped too, locked the truck and ran,” he told AFP. The green truck was still on the bridge in the late evening, stopped just short of the now yawning gap. Aerial footage showed that the falling structure narrowly missed houses and other buildings as it collapsed over a river.The disaster occurred on a major artery to the Italian Riviera and to France’s southern coast. Traffic would have been heavier than usual as many Italians were travelling to beaches or mountains on the eve of a public holiday, Ferragosto. “The scene is apocalyptic, like a bomb had hit the bridge,” Matteo Pucciarelli, a journalist for La Repubblica who lives in Genoa, told the Guardian. “There are about 200 rescuers working continuously. People are in shock, it’s a very important arterial road that connects Lombardy and Piedmont with Liguria.” Alberto Lercari, a bus driver, earlier told Corriere della Sera: “I saw people running towards me, barefoot and terrified. I heard a roar. People ran away coming towards me. It was horrible.”
5 problems about to hit Italy’s populist government --The honeymoon is almost over for the Italian government. Despite fears of chaos when the anti-establishment 5Star Movement and far-right League formed an alliance in June, the coalition has proven popular with voters — surveys show 60 percent of Italians support the government. So far so good, but in the coming weeks Rome has to take some important decisions that could determine the government’s future — and even whether it survives. Matteo Salvini, League leader and interior minister, was quoted in La Repubblica as saying: “If we survive September then the government goes ahead, otherwise…” Here are five of the biggest obstacles that the government must overcome.
- 1. Budget and economy The national budget, which has to be approved by the middle of October, could be a major problem for two parties who made electoral promises that would costbetween €65 billion and €125 billion — in a country with Europe’s second largestpublic debt after Greece. They pledged to cut taxes while raising pensions and welfare payments, but ratings agency Moody’s said they did this “without any clear proposals on how to fund those.”
- 2. Infrastructure. In some areas, the 5Stars and League appear miles apart, especially when it comes to large infrastructure projects. That distance widened after Tuesday’s bridge collapse in Genoa, which killed 39 people and could prove costly for the 5Stars who had a history of opposing plans to overhaul the bridge.
- 3. Steeled for conflictA steel plant in Taranto, in Italy’s heel, poses another problem — mainly for the 5Stars. It’s the biggest steelworks in Europe and belongs to the Ilva group, which has been under state-supervised administration since 2015 when a court ruled the plant must be cleaned up or closed down because it causes so much environmental damage. But Luigi Di Maio, the 5Star leader and development minister whose party has floated plans to close down the polluting plant, has cast doubt over the legality of the sale and is considering canceling the tender. If that happens, it would very likely mean the end of the Taranto plant, and the loss of some 14,000 jobs in an already depressed region.
- 4. Don’t forget Silvio. In recent weeks there have been signs of a split between Salvini and Silvio Berlusconi, the ex-prime minister whose Forza Italia party has been the League’s partner for the last 20 years, including March’s general election. The two parties still run six regions and several local authorities together.
- 5. The old guard could rise again. “Soon it will be our turn again,” former Prime Minister Matteo Renzi said Wednesday in a Facebook live chat. “In September, October you’ll see we’ll have fun.”
Germany's Economic Minister Calls On Europe To Defy Trump's Iran Sanctions -- German Economy Minister Peter Altmaier lashed out at the Trump administration in response to Washington's ultimatum to cut all economic ties with Iran following the US pullout of the 2015 brokered JCPOA. Almaier told Bild newspaper on Saturday that Germany should be assertive and defiant in the face of American sanctions by actually investing more in Iran. He said, “We don’t let Washington dictate [their will] on trade relations with other countries.” "German businesses can continue to invest as much as they want in Iran," Altmaier said. Noting that the rest of Europe and other countries across the globe should feel free to defy the Washington ban, he at the same time acknowledged the difficult reality that "many companies depend on loans from banks, most of which refinance themselves in the US – and it creates problems."The German economic minister further told Bild that the world is on the brink of all-out economic war from which no one will come out ahead: "we are just a few yards from the edge,” and “a global trade war would not know winners, only losers." He explained that but a tiny minority of politicians will determine the fate of hundreds of thousands of European jobs that depend on US-EU trade."We have learnt from the past that mostly customers are suffering from trade wars as goods and services are getting more expensive,” Altmaier continued. "This trade war hampers economic growth and brings new uncertainties." Indeed on the same day the German economy minister gave the interview, China’s state-owned energy giant, CNPC - the world's third largest oil and gas company by revenue behind Saudi Aramco and the National Iranian Oil Company - finally took over the share in Iran’s multi-billion dollar South Pars gas project held by France’s Total. Thus it appears, as Altmaier's words suggest, Europe will bear the brunt of lost jobs, opportunities, and major multi-billion dollar contracts in a damned if you do, damned if you don't scenario. Others like China and Russia appear already quite eager to fill the gap.
Economic War On Iran Is War On Eurasian Integration - by Pepe Escobar Hysteria reigned supreme after the first round of US sanctions were reinstated against Iran over the past week. War scenarios abound, and yet the key aspect of the economic war unleashed by the Trump administration has been overlooked: Iran is a major piece in a much larger chessboard.The US sanctions offensive, launched after Washington’s unilateral pullout from the Iran nuclear deal, should be interpreted as an advance gambit in the New Great Game at whose center lies China’s New Silk Road – arguably the most important infrastructure project of the 21st century — and overall Eurasia integration.The Trump administration’s maneuvers are a testament to how China’s New Silk Road, or Belt and Road Initiative (BRI), threaten the US establishment. Eurasian integration is on display in Astana, where Russia, Iran and Turkey are deciding the fate of Syria, in coordination with Damascus.Iran’s strategic depth in post-war Syria simply won’t vanish. The challenge of Syrian reconstruction will be met largely by Bashar al-Assad’s allies: China, Russia and Iran.Echoing the Ancient Silk Road, Syria will be configured as an important BRI node, key to Eurasia integration.In parallel, the Russia-China strategic partnership – from the intersection between the BRI and the Eurasia Economic Union (EAEU) to the expansion of the Shanghai Cooperation Organization (SCO) and the solidifying of BRICS Plus — has immense economic stakes in the stability of Iran.The complex interconnection of Iran with both Russia (via the EAEU and the International North-South Transportation Corridor) and China (via BRI and oil/gas supplies) is even tighter than in the case of Syria in the past seven years of civil war. Iran is absolutely essential for Russia-China for the partnership to allow any “surgical strike” — as floated in Syria — or worse, hot war initiated by Washington.A case could be made that with his recent overture to President Putin, President Trump is trying to negotiate some sort of freeze in the current configuration — a remixed Sykes-Picot for the 21st century.But that assumes Trump’s decision-making is not being dictated or co-opted by the US neocon cabal that pressed for the 2003 war in Iraq.
US Ambassador Warns Britain to Back Trump Over Iranian Sanctions -- The U.S. ambassador to London has publicly warned British Prime Minister Theresa May to side with President Donald Trump in the burgeoning transatlantic dispute over the controversial nuclear deal with Iran, which the U.S. leader withdrew from in May. Ambassador Woody Johnson cautioned there would be trade consequences for Britain, which he described as the closest U.S. ally, unless it breaks with the European Union and follows Trump in re-imposing sanctions on Tehran. The envoy also delivered a clear ultimatum to British businesses, instructing them to stop trading with Iran or face "serious consequences" when it comes to trade with the United States. The unprecedented warning, which was delivered in an article published by Britain's Sunday Telegraph newspaper, is being seen in London as the opening shot in what could be the biggest test of the so-called "special relationship" between the United States and Britain since Trump took office. Trump's decision in May to withdraw from the 2015 nuclear deal, signed by his predecessor Barack Obama, in which Tehran agreed to nuclear curbs in return for sanctions relief, paved the way for the restoration of unilateral American economic penalties on Iran. In the article, Johnson said the Trump administration is "determined to make sure they [the sanctions] are fully enforced." He added, "The President has been explicit: any businesses that put their commercial interests in Iran ahead of the global good will risk serious consequences for their trade with the U.S."
France Could Lose Billions In Brexit U Trade Route Redirection - In the onging Brexit debacle creating a lack of clarity over the future of European trade relations, France may end up getting cut out of important trade routes that bring billions in revenue—and Paris is now up in arms.France has vehemently slammed the European Commission‘s proposal to exclude French ports from the planned re-routing of a strategic trade corridor between Ireland and mainland Europe after Brexit. The new route proposed by the Commission would link Ireland by sea with Dutch and Belgian ports, including Zeebrugge and Rotterdam. Meanwhile, France‘s Calais and Dunkirk ports would be circumvented. French Transport Minister Elisabeth Borne excoriated the move, which could prevent France from taping billions of euros in an EU grant, as “not acceptable”. In a stern letter to European Commission transport authorities, she said France and Ireland’s “important trade channels” had not been taken into account: “The geographical proximity between Ireland and France creates an obvious connection to the single market…Surprisingly, the Commission proposal in no way takes this into account… This proposal therefore is not acceptable to France.” For France, much is at stake, including potentially billions in revenues from the ports themselves, jobs and funding for infrastructure from EU programs. Now, the bulk of Ireland’s trade with the continent stretches via Great Britain in trucks. However, with Brexit looming within the next 8 months, opaqueness lingers not only on the UK‘s future trade relations with the bloc, but also on the nature of the Irish Republic’s border with the British province of Northern Ireland. While the UK can no longer be part of EU routes after Brexit, bypassing it prevents Irish exports to Europe from getting caught up in British customs. France’s Roscoff and Cherbourg, the other major ports–both of which are nearer to Ireland–also would be bypassed if the plan goes into effect, meaning that they and the transport infrastructure serving them would not be eligible for additional funding from Brussels to upgrade their facilities.
British expats in EU launch Brexit legal challenge - British expatriates have launched a fresh legal challenge against the 2016 referendum, arguing that the result has been invalidated by the Electoral Commission’s ruling on leave campaign spending. The judicial review against the prime minister, Theresa May, has been submitted to the high court in London by the UK in EU Challenge group, which represents Britons living in France, Italy and Spain. It argues that the recent Electoral Commission findings on BeLeave and Vote Leave – which resulted in two officials being reported to the police and punitive fines being imposed – means that the referendum to leave the EU was not a lawful, fair or free vote. The government is resisting the action on the grounds that it is out of time and that a similar challenge has already been dismissed. Nearly 80% of the estimated 1 to 2 million Britons living overseas in EU countries are of working age or younger. Many fear Brexit will threaten their livelihoods and make it far harder to travel across the continent. The expatriate claimants are represented by Croft Solicitors, Patrick Green QC and Jessica Simor QC, all of whom acted for successful parties in the article 50 legal case at the supreme court. They maintain the legal claim is not out of time because the Electoral Commission only recently, in July, found that BeLeave spent £675,000, which should have been declared. Rupert Croft, the managing director Croft Solicitors, said: “Our clients contend that the prime minister’s decision to trigger article 50 and start the Brexit process was based on a factual error, namely that the referendum truly represented the will of the people following a lawful, free and fair vote. “They argue that the decision to trigger article 50 to withdraw from the EU was therefore not in accordance with the UK’s constitutional requirements. We look forward to having this important constitutional case considered by the court.” Elinore Grayson, one of the four named claimants in the action, lives in France. She said: “It is fundamental that illegal intervention in British elections does not go unchecked. The principle of nullity when a decision was made on incorrect or misleading facts is a longstanding one and we wish to ensure that continues to apply at this crucial time. “Many people across the EU, myself included, are reliant on bestowed rights to live their daily lives; there must be zero tolerance when it comes to cheating, misrepresentation and non-disclosure of information.”
Brexit: a matter of respect - "Being a defender of Brexit is no fun these days. The Brexit camp can loosely be divided into two categories. The devious manipulators and the gullible followers. There is now a growing army of EEA Brexiters and we are gradually winning the argument against no deal, but the core of Tory influenced Brexit is still setting the agenda". So writes Pete in his latest blogpost headed: "Yes, Brexit IS worth it". But he's right: it isn't fun. The sheer labour of dealing with the monstrous propaganda of the "ultras" takes its toll, and one tires of having constantly to repeat the same arguments to unyielding minds. To make any real progress, it seems to me that we must have the legacy media and the bulk of politicians united in pointing out the dangers of the "no deal" scenario, making it absolutely clear that this is not a credible option. However, as long as Mrs May occupies No 10, and maintains her stance that "no deal is better than a bad deal", we are facing an impossible struggle. Ostensibly, the only remedy is her resignation or removal – except that her replacement could be far worse. Nor indeed is a general election an answer. Given the incoherence of the Labour stance and the untrustworthiness of Corbyn, we could hardly predict how a new government would behave – assuming that Labour could win, which is by no means certain. This leaves us in a weird no-man's land where we end up getting shot at from both sides and the only option is to keep your head down and wait until it is all over. And, on present form, it will be "over" when we drop out of the EU without a deal, whence we have to start dealing with the realities of the damage that this will cause.
Brexit has reached a dead end - DW - The UK's Brexit negotiations with the European Union are at an impasse — that's according to Prime Minister Theresa May. In a letter to her own divided Conservative party, she admits that, surrounded by red lines she is not allowed to cross, she can neither push ahead nor turn back. Brexit can't be too soft or too hard, or else the various parties and the EU will be unable to reach an agreement.Brussels has rejected May's latest proposal, which would have meant negotiating a kind of free trade area only for goods. Just 11 percent of UK citizens liked that plan, according to opinion polls. Negotiations resume in Brussels this week. However, the teams accompanying EU chief negotiator Michel Barnier and the UK's Brexit minister, Dominic Raab, wonder what they will be negotiating. There are no viable proposals either on trade issues or the border between Northern Ireland and Ireland. The British government is set on a vague statement about its future relationship with the EU. However, Brussels is insisting on a concrete exit treaty that would at least finalize essential questions regarding finances, borders and civil rights. It is clear that time is getting short. A Brexit deal is supposed to be in place by the end of October. That is tight. Up until now, the British have negotiated by playing dead and only coming up with something substantial and concrete at the very last moment, but that is not likely to work this time around. May's attempt to split the EU with charm offensives in Paris and Berlin has failed. The UK's negotiating position is growing weaker by the day. The EU has much less to lose than the British. On the homefront, May has been stirring up panic, stockpiling food and medicine in the case of a "no deal" Brexit and pushing the idea that the EU is to blame for everything because of its inflexibility. The basic problem is that Brexit, which was pushed by a dishonest referendum campaign, has practically no advantages for the UK, neither concerning trade nor migration. To the contrary, British employers are already complaining that too few EU foreigners want to work in the country. Brexit is scaring them off.
Brexit: Big Deal Or No Deal For The EU? - The United Kingdom is to leave the European Union on March 29, 2019, but a final deal has yet to be agreed between Westminster and Brussels.In the event of a "no-deal Brexit", the UK leaving the EU single market and customs union without a free trade deal, Britain would have to adopt rules set by the World Trade Organization (WTO). This scenario, as Statista's Raynor de Best notes, could mean that airline licenses, medicine certifications and certain citizen rights end overnight along with an increase in bureaucratic checks on goods and people passing in and out of the country.According to estimates from the International Monetary Fund (IMF), a hard Brexit would also lead to significant long-term economic damage across the European continent. The Washington-based fund said the economic output of the EU-27 could be reduced by 1.5 percent of GDP by 2030.Ireland, the Netherlands, Denmark and Belgium, all countries with close trading links to the UK, would be hit hardest. Germany would lose 0.5 percent of its GDP due to industrial supply chains.Nations with financial ties to the City of London, such as Malta, Cyprus and Luxembourg, would also be negatively affected by a "no deal". The IMF estimated, for example, that two-way bank claims between Luxembourg's financial sector and the UK were about 220 percent of Luxembourg's GDP.
EU rebuffs idea of escalating Brexit talks to leaders’ summit - European officials have poured cold water on hopes that Theresa May could negotiate Brexit with other EU leaders in September to break the deadlock over Britain’s departure. Diplomatic sources have rejected suggestions that May could hold direct talks on Brexit with the 27 other EU heads of state and government at a summit in Salzburg next month. “That is completely ridiculous, that is complete overspin of Salzburg,” one senior source told the Guardian. “It would mean that we would ditch our negotiating approach of the last two years and discuss at 28 instead of 27 to one, and I don’t see why this would happen.” Brexit talks are due to resume in Brussels on Thursday and Friday, the start of a new intense phase of negotiations, with the aim of reaching a deal in the autumn. Since the referendum, the EU has insisted that all formal talks are led by the chief negotiator, Michel Barnier. May is allowed to update EU leaders on her plans at quarterly EU summits but is not in the room for discussions. Officials expect this approach to be continued at Salzburg, an informal summit on 20 September officially dedicated to migration. The meeting has been organised by Austria, which currently holds the EU rotating presidency, but it will be for the European council president, Donald Tusk, to decide whether to add Brexit to the agenda. The Salzburg gathering comes four weeks before an EU summit in Brussels, pencilled in by Barnier as the moment to strike a deal. Many in Brussels expect the deadline to slip to November or even December, squeezing the time available to ratify the text ahead of the UK’s departure on 29 March 2019. The British government has tried to get round Barnier by appealing directly to national capitals for greater flexibility, a strategy continued by the foreign secretary, Jeremy Hunt, who is on a three-day Brexit tour on the continent this week. Latvia’s foreign minister, Edgars Rinkēvičs, said before meeting Hunt that there was a 50-50 chance of failing to reach a deal. “I believe both the EU and the UK need to have extra effort to reach some kind of deal,”
RBS must put up posters revealing it ranks worst for customer service -- Royal Bank of Scotland was forced to put up posters in all its branches yesterday revealing that it was bottom of a new league table for customer service.The state-controlled bank came joint last with Clydesdale Bank for overall customer service in an independent poll of 16 banks and building societies ordered by the Competition and Markets Authority.First Direct, the phone-based and online banking service, came top, followed by Metro Bank and the two biggest building societies, Nationwide and Coventry. Under new rules designed to better inform bank customers and encourage them to switch providers, the competition authority is requiring every large bank to publish details of the top five and their own ranking in posters placed prominently in their branches and on their website.
British government’s educational “reforms” exacerbate inequality, reduce school funding - Educational inequality is rising across the UK, according to research published by the Institute of Education (IOE) at University College London.The four-year study, in collaboration with the Nuffield Foundation, showed that central government educational changes have massively exacerbated inequality among school pupils, with children from low-income families being excluded from the best-performing schools.The Ofsted (Office for Standards in Education, Children’s Services and Skills) data examined in the report demonstrates a correlation between maintenance or improvement of a school’s classification to “outstanding” in the 2010-2015 period, and a reduction in the number of students eligible for free school meals (FSM)—a marker of low-income.Conversely, those schools ranked as “requires improvement” or “inadequate” by Ofsted typically saw an increase in the percentage of students eligible for FSM over the same period.Similarly, the IOE reported that free schools, privately run academies with state funding, had on average a lower proportion of pupils who are eligible for FSM than the neighbourhoods that they serve.The study indicates that many of the country’s best state schools effectively shun working-class children from low-income families—with these pupils often relegated to under-performing institutions—as a means to maintain their high status.With schools and teachers facing increasing pressure to get good exam results and achieve high Ofsted rankings, or risk being taken over by a Multi-Academy Trust (MAT), many schools have been obliged to narrow their curriculums and focus relentlessly on assessments. MATs—amalgamations of several collaborating academy schools—are publicly owned but privately run, and, along with the rollback of Local Authorities (LAs) from school oversight and the increase in the number of academy schools, they have been key components of successive Labour and Conservative governments’ reactionary educational “reforms.”
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