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

Saturday, August 4, 2018

week ending Aug 4

 FOMC Statement: No Change to Policy - FOMC Statement: Information received since the Federal Open Market Committee met in June indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate. Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low. Household spending and business fixed investment have grown strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 percent. Indicators of longer-term inflation expectations are little changed, on balance.Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced.In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1-3/4 to 2 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation. In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

Fed Holds Rates Unchanged As Expected, Upgrades Economic View To "Strong" --Expectations were for a snoozefest from the Fed today, reassuring market participants that all is well, inflation is well managed and there will be two more rate hikes in 2018 (there was a 1% chance of hike today, a 80% chance of a hike in Sept, and 66% chance of Dec hike in addition). Despite The Atlanta Fed's model now forecasting 4.9% for Q3, The Fed was likely to play down the 4.1% growth in Q2 with the word "solid" critical to watch, and how much will The Fed continue to play down the collapsing yield curve.The Fed tilted notably hawkish - choosing (as expected) unanimously to keep rates unchanged, confirming "gradual rate hikes" but upgraded its view of the economy from "solid" to "strong."Here are the Key Takeaways from the latest Fed decision, according to Bloomberg:

  • Economic activity is "rising at a strong rate,'' an upgrade from prior wording of "solid rate''
  • Most of the minor wording changes are mark-to-market in the first paragraph's economic assessment
  • Job gains "have been strong,'' and household spending and business fixed investment "have grown strongly''
  • Unemployment has "stayed low" rather than "declined"
  • Both headline and core inflation remained "near 2 percent''
  • Household spending has "grown strongly" rather than "picked up"
  • "Further gradual increases'' repeated as expected policy path
  • Risks to the outlook still "appear roughly balanced''
  • Decision unanimous, with George voting as an alternate for San Francisco vacancy

One surprising omission was the Fed's lack of reference to the recent slowdown in the housing sector, which some Fed watchers were expecting would be inserted; the result is an even more hawkish reading of the Fed's upbeat assessment of the economy.

PCE Price Index: June Headline & Core --The BEA's Personal Income and Outlays report for June was published this morning by the Bureau of Economic Analysis. The latest Headline PCE price index was up 0.10% month-over-month (MoM) and is up 2.23% year-over-year (YoY). The latest Core PCE index (less Food and Energy) came in at 0.11% MoM and 1.90% YoY. Core PCE remains below the Fed's 2% target rate. Comprehensive updates and revisions were made. The adjacent thumbnail gives us a close-up of the trend in YoY Core PCE since January 2012. The first string of red data points highlights the 12 consecutive months when Core PCE hovered in a narrow range around its interim low. The second string highlights the lower range from late 2014 through 2015. Core PCE shifted higher in 2016 with a decline in 2017 only to bounce back later in the year. The first chart below shows the monthly year-over-year change in the personal consumption expenditures (PCE) price index since 2000. Also included is an overlay of the Core PCE (less Food and Energy) price index, which is Fed's preferred indicator for gauging inflation. The two percent benchmark is the Fed's conventional target for core inflation. However, the December 2012 FOMC meeting raised the inflation ceiling to 2.5% for the next year or two while their accommodative measures (low FFR and quantitative easing) are in place. More recent FOMC statements now refer only to the two percent target.

GDP: One size no longer fits all - Following Friday’s announcement that real gross domestic product (GDP) grew by 4.1 percent (at a seasonally adjusted annual rate) in the most recent quarter, the business news was filled with stories about how big the number was. Even the most casual reader of financial and economic news knows that the speed of economic growth matters. Businesses―manufacturers, service providers, and retailers, among others―need to know so that they can decide how much to invest in new production facilities, how many people to employ, and what to stock on their shelves. Fiscal policymakers need to know so that they can estimate government revenue and expenditure. And monetary policymakers need to know so that they can adjust their policies in an effort to ensure low, stable inflation and strong, stable, and balance growth. But, does it make sense for all of these people―firms, households and governments―to focus on fresh estimates of GDP? How much attention should we pay to any new number? That is, when the U.S. Bureau of Economic Analysis (BEA) announces that their initial estimate of growth for the quarter just ended is 2% or 3% or (as it was last week) 4%, what should we think? While GDP was once a key cyclical indicator, its value has declined substantially. In this post, we highlight three reasons: timeliness, seasonal adjustment and revisions. Not surprisingly, in the era of big data, those who need information on growth are increasingly turning to more timely indicators customized to their needs.

"There's No Way To Make This Work" Martenson Warns "A Big Reset Is Locked In" - Futurist and economic researcher Chris Martenson says we are not at the end of a business cycle but “. . . at the end of a credit cycle.” Martenson warns, “Here’s why people need to be concerned. Credit cycles, when they blow up, are really, really destructive..." "2008 to 2009 was very destructive. Instead of realizing the error of their ways, they went for a third. This is the most comprehensive credit cycle that we have seen. Remember, bubbles have two things that they need. Number one, a good story that people can believe in and, of course, it’s a false story. Number two, ample credit. That’s what the Fed and central banks of Japan and Europe have done. They just flooded the world with credit. Now, we have bubbles everywhere. When these burst, it will be the worst bursting in anybody’s lifetime because we have never seen anything like this.” Martenson says a debt reset is locked in, and somebody is going to pay. “When you have as much debt that the United States has... the overall debt level in the United States, including auto loans, mortgages, consumer debt, student loans and corporate debt and whatever, we’re sitting at about $60 trillion right now. It’s a huge number, and when you get to this level of indebtedness, plus those unfunded or underfunded liabilities...when you get to this level of indebtedness, there is really only one question left to be resolved, and that is who is going to eat the losses. That’s it. So, when you start asking that question, the banks and people writing the laws are pretty sure they are not going to take the losses. The person relying on the pension is the person that is going to eat the losses. . . . There is no way to make this work. Here’s where the social tension comes in. Even as ordinary middle class people are being destroyed in this process, the rich are taking more and more out of the system. That is courtesy of the policies of the Federal Reserve... But the big risk is when these printing sprees, these credit cycles finally burst. They are wildly destructive. They are fast. They are hard. They are sharp and they hurt.” 

US Debt Sales To Surge: Treasury Raises 2018 Borrowing Need To $1.33 Trillion -- America's funding needs are starting to grow at a dangerous pace.  Even before the NYT reported of Trump's startling suggestion of a further $100 billion tax cut in the form of an inflation-adjusted capital gains tax cost basis which mostly benefits the wealthy, earlier today the U.S. Treasury said it expects to borrow $56 billion more during the third quarter than previously estimated, while market participants expect shorter-dated Treasuries to absorb the brunt of the new supply as the Trump administration grapples with a mushrooming budget deficit. In the Treasury's latest quarterly Sources and Uses table, it revealed that it expects to issue $329 billion in net marketable debt from July through September, and $56 billion more than the $273 billion estimated three months ago, in April. assuming an end-of-September cash balance of $350 billion, matching its previous estimate. It also forecast $440 billion of borrowing in the final three months of the year, with a $390 billion cash balance on December 31.  The borrowing estimate for the third quarter is the highest since the same period in 2010 and the fourth largest on record for the July-September quarter, according to Reuters. In the second quarter, net borrowing totaled $72 billion, slightly below the earlier prediction of $75 billion.  The US fiscal picture continues to darken as a result of rising social security costs, military spending and debt service expenses while corporate tax income is declining after last year’s tax reforms. As a result, the federal budget deficit is expected to reach $833 billion this year, up from $666 billion in the budget year ended last September, a number that is well below the net funding demands for the US Treasury. The new projections put total net borrowing at $769 billion for the second half of 2018 and a whopping $1.33 trillion for the whole year. The federal budget deficit totaled $607 billion through the first nine months of the fiscal year that ends Sept. 30, up 16% compared with $523 billion from the same period a year earlier. In late June, the CBO forecast that total government spending would exceed revenue by $1 trillion in 2020. That would suggest that the net financing need of the US in two years could be as high as $1.5 trillion.

Treasury Announces Increase To Debt Sales, Launches 2-Month Bill - Earlier this week, the Treasury surprised the market and sent bond yields higher, when it unexpectedly reported that in the current quarter, US funding needs would increase by $56 billion to a $329 billion, and in the second half of the year will be the most since the financial crisis a decade ago, with the Treasury expecting to issue $769 billion in net marketable debt in the second half, the most since the financial crisis. But how would the US Treasury adjust its debt auction pattern to fund this growing debt requirement?We got the answer this morning, when in the quarterly refunding announcement, the Treasury announced it would raise the amount of long-term debt it sells to $78 billion this quarter, up from $73 billion last quarter, while launching a new two-month bill. The department is also extending out to the five-year maturity where it’s concentrating its increases to coupon-bearing debt.The Treasury announced increases to nominal coupon auction sizes and FRNs over the upcoming quarter as follows:

  • Over the next three months, Treasury anticipates increasing the sizes of the 2-, 3-, and 5-year note auctions by $1 billion per month.  As a result, the size of 2-, 3-, and 5-year note auctions will increase by $3 billion, respectively, by the end of October. 
  • In addition, Treasury will increase the auction size of the next 2-year FRN auction by $1 billion in August.
  • Finally, Treasury will increase auction sizes by $1 billion to each of the next 7- and 10-year notes and the 30-year bond auctions in August, and hold the auction sizes steady at that level through October.

Here the surprise is that whereas consensus had expected 5-year auctions to increase by $1 billion in the quarter, the Treasury will now increase the auction amount by $1bn every month in the quarter, for a total of $3BN, which in turn will put extra pressure on the belly. Below is a summary of the auction calendar for the third quarter:

Trump doubles down on shutdown threat | TheHill: President Trump on Monday doubled down on his threat to shut down the government to secure enhanced border security measures. "If we don't get border security after many, many years of talk within the United States, I would have no problem doing a shutdown," Trump said during a joint press conference with Italy's prime minister. But Trump would not say if he would veto a spending bill in September unless it included "full" funding for a border wall, saying, "I'll always leave room for negotiation." "I have no red line, unlike President Obama," he added. "I just want great border security." After praising Italian Prime Minister Giuseppe Conte for his hardline stance on immigration, Trump blasted U.S. immigration laws, calling them a “laughingstock” and the “worst” in the world. He put the onus on Congress to change them, saying he would “certainly be willing to close it down to get it done.” The president said he wants Congress to authorize more funding for his long-desired wall at the U.S. southern border and to pass an overhaul of the nation's visa system. 

Trump Administration Mulls a Unilateral Tax Cut for the Rich – NYT -The Trump administration is considering bypassing Congress to grant a $100 billion tax cut mainly to the wealthy, a legally tenuous maneuver that would cut capital gains taxation and fulfill a long-held ambition of many investors and conservatives.Steven Mnuchin, the Treasury secretary, said in an interview on the sidelines of the Group of 20 summit meeting in Argentina this month that his department was studying whether it could use its regulatory powers to allow Americans to account for inflation in determining capital gains tax liabilities. The Treasury Department could change the definition of “cost” for calculating capital gains, allowing taxpayers to adjust the initial value of an asset, such as a home or a share of stock, for inflation when it sells.“If it can’t get done through a legislation process, we will look at what tools at Treasury we have to do it on our own and we’ll consider that,” Mr. Mnuchin said, emphasizing that he had not concluded whether the Treasury Department had the authority to act alone. “We are studying that internally, and we are also studying the economic costs and the impact on growth.”Currently, capital gains taxes are determined by subtracting the original price of an asset from the price at which it was sold and taxing the difference, usually at 20 percent. If a high earner spent $100,000 on stock in 1980, then sold it for $1 million today, she would owe taxes on $900,000. But if her original purchase price was adjusted for inflation, it would be about $300,000, reducing her taxable “gain” to $700,000. That would save the investor $40,000.

 Vladimir Putin invites Donald Trump to Moscow -  Vladimir Putin said on Friday that he has invited Donald Trump to Moscow, countering an offer to visit the United States as a possible sequel to last week’s controversial summit in Helsinki.  Putin also addressed Trump’s invitation to Washington DC on Friday, saying he and the US president are ready for further summits, including at the White House, but that conditions would need to be right for any meeting to take place.   “I understand perfectly that President Trump has a desire to hold further meetings, and I am ready for that. But there would need to be the appropriate conditions,” Putin said.  Putin was speaking to reporters at a summit of Brics countries – Brazil, Russia, India, China and South Africa – in Johannesburg. “He has, in fact, the same invitation [to come to Moscow], and I told him so. I am ready to go to Washington but I repeat: if the right conditions will be established,” Putin added.   Trump’s spokeswoman Sarah Sanders said that the US president was willing to visit Moscow once he receives a formal invitation. “President Trump looks forward to having President Putin to Washington after the first of the year, and he is open to visiting Moscow upon receiving a formal invitation,” Sanders said in a statement.   After last week’s summit in Helsinki, Trump said he had invited Putin to Washington but this week White House aides said the meeting would be delayed until next year.   National security adviser John Bolton said that Trump wanted the meeting after the end of the investigation into Russian meddling in the 2016 elections which he described as the “Russia witch-hunt.”

Debunking the Putin Panic with Stephen F. Cohen – naked capitalism - Yves here. Jerri-Lynn found this Real News Network interview, which is oddly not easy to locate on its site, but encouragingly, it has gotten a good level of views on YouTube.

“You are Criminalizing Diplomacy” (video) CNN. “Anderson Cooper joined by Russia expert Stephen Cohen and Max Boot debate if Trump-Putin summit at Helsinki was a positive thing.”

Democrats Will Regret Becoming the Anti-Russia Party --  Perceptions of foreign threats are socially constructed. Within American domestic politics, that means threats are largely constructed by the two major political parties. At any given time, one party holds the executive branch’s vast national security powers and drives conversations around how foreign threats are framed. Meanwhile, the other party is incentivized to contest how the ruling administration depicts—and responds to—foreign threats, thus raising questions about the executive branch’s overall judgment and competency in keeping the United States safe.These traditional roles have been heightened because of U.S. President Donald Trump’s posture toward Russia. His policies are inexplicable when compared to recent American history, his own government’s explicit strategy, or any objective assessment of current U.S.-Russian relations. Trump downplays allegations of Russian-sponsored interference in the 2016 election cycle, dismisses the U.S. intelligence community’s consensus judgment that Russia was involved, remains uninterested in Russia’s multiyear indiscriminate bombing in Syria and intervention in Ukraine, and seems unwilling to critique President Vladimir Putin—a great power competitor according to most other U.S. government employees.   This unusual behavior has created an opening for the Democratic Party to raise Americans’ threat perceptions of Russia. It’s an opening that many Democratic officeholders have been happy to take. The impulse is understandable given that recent polling shows that 47 percent of Democrats and Democrat-leaning Americans believe Russia poses the “greatest immediate threat” to the United States, versus just 10 percent of Republicans and those who lean Republican. Democrats may come to regret, however, their increasingly vehement focus on Russia.

Trump, Putin & Helsinki: Henry Kissinger Still Calls the Shots - Edward Luce’s article a week ago in the London Financial Times that is entitled, “Henry Kissinger: ‘We are in a very, very grave period,’” shows, with the very important revelations, how the legendary Henry Kissinger still holds the strings of power influencing both the US politics and, indirectly, the world events. No one, in my strong view, influenced world political events and shaped world politics, the World Order post Second World War more than that single person, German refugee Henry Kissinger. However, most interestingly, Henry Kissinger’s star to this day, as a nonagenarian in his mid-90s, refuses to eclipse, let alone faint. As a frail old man, Kissinger continues to trot the Globe in the quiet of back corridor of diplomacy, meeting and dialoguing with world leaders in the examples of Russian Vladimir Putin and China’s strongman, Xi Jinping. Edward Luce’s article gives ample proof of that as Henry Kissinger appears to greatly influence the Trump Administration’s Foreign policy as most recently culminated in apparently playing a pivotal role in paving the grounds for the recent controversial Trump-Putin Helsinki Summit Meeting. Henry Kissinger, undoubtedly, have played the major role in shaping our current world order. To start with, on the crucial energy sphere, Henry Kissinger almost singularly, masterminded a profound transformation in the World’s energy policies, relations and markets. This, by taking the initiative to forming the International Energy Agency (IEA), the brainchild of Henry Kissinger to counter the OPEC stranglehold on the world energy markets in the aftermath of the Saudi 1973 oil embargo. The IEA was created with members of the world’s powerful energy-consumer industrial nations as a countervailing force to counter the OPEC producers’ dictates on policies concerning oil supplies and the gyrating energy prices. In less than a decade after the Saudi Oil Embargo of 1973, the IEA managed to profoundly change the structure of the Energy Markets as relations between Suppliers and Consumers in the Oil Energy Market seemed ever since to continuously tilt in favor of the consuming countries.

Trump's battle with the New York Times and A.G. Sulzberger, explained -- The latest chapter of Donald Trump versus the media unfolded over the weekend in the form of a back-and-forth between the president and the New York Times. The subject: an off-the-record meeting between Trump and the Times’s publisher, A.G. Sulzberger, that the president put on the record with a tweet. On Sunday morning, Trump tweeted that he’d had a “very good and interesting meeting” at the White House with Sulzberger. He said they talked about the “vast amounts of Fake News being put out with the media” and again referred to the press as the “enemy of the people.” @realDonaldTrump:  Had a very good and interesting meeting at the White House with A.G. Sulzberger, Publisher of the New York Times. Spent much time talking about the vast amounts of Fake News being put out by the media & how that Fake News has morphed into phrase, “Enemy of the People.” Sad! 8:30 AM - Jul 29, 2018    The Times subsequently released a statement confirming that Sulzberger and James Bennet, the editorial page editor of the Times, had indeed met with Trump in the Oval Office on July 20. The publication said the White House had requested the meeting — which is not unusual — and that Trump aides requested the meeting be off the record, also par for the course. But The Times’s version of what transpired in the meeting differed significantly from Trump’s tweet. Sulzberger said his main purpose for accepting the sit-down was to “raise concerns about the president’s deeply troubling anti-press rhetoric.” Trump has consistently attacked the media throughout his presidency and called the press the “enemy of the people.” Sulzberger said he told Trump his language was “not just divisive but increasingly dangerous.” While he said “fake news” is “untrue and harmful,” he emphasized he’s more concerned about Trump labeling journalists the “enemy of the people.” “I warned that this inflammatory language is contributing to a rise in threats against journalists and will lead to violence,” Sulzberger said. Just last month, five people were killed in a shooting at the Capital Gazette offices in Annapolis, Maryland. Sulzberger also warned that Trump’s attacks on the press have repercussions abroad, where regimes use it to justify “sweeping crackdowns on journalists.” Soon after Sulzberger’s statement was released, Trump appeared to respond — again on Twitter — to the statement. He claimed it’s the media that puts lives at risk in revealing the “internal deliberations of our government.” He decried negative coverage of his administration and took a swipe at the “dying newspaper industry,” specifically citing the “failing New York Times” and the “Amazon Washington Post,” nicknames he often uses to refer to the outlets.

U.S. spy agencies: North Korea is working on new missiles - WaPo --U.S. spy agencies are seeing signs that North Korea is constructing new missiles at a factory that produced the country’s first intercontinental ballistic missiles capable of reaching the United States, according to officials familiar with the intelligence. Newly obtained evidence, including satellite photos taken in recent weeks, indicates that work is underway on at least one and possibly two liquid-fueled ICBMs at a large research facility in Sanumdong, on the outskirts of Pyongyang, according to the officials, who spoke on the condition of anonymity to describe classified intelligence. The findings are the latest to show ongoing activity inside North Korea’s nuclear and missile facilities at a time when the country’s leaders are engaged in arms talks with the United States. The new intelligence does not suggest an expansion of North Korea’s capabilities but shows that work on advanced weapons is continuing weeks after President Trump declared in a Twitter posting that Pyongyang was “no longer a Nuclear Threat.” The reports about new missile construction come after recent revelations about a suspected uranium-enrichment facility, called Kangson, that North Korea is operating in secret. Secretary of State Mike Pompeo acknowledged during Senate testimony last week that North Korean factories “continue to produce fissile material” used in making nuclear weapons. He declined to say whether Pyongyang is building new missiles. 

Hawks Renew Their Attacks On North Korea Talks - There are new attempts underway to sabotage the deal U.S. President Trump made with North Korea's Chairman Kim Jong-Un. These attacks are based on misleading interpretations of the agreements that were made between the two leaders.Duyeon Kim, a fellow of the Center for a New American Security based in Seoul, suggests in Foreign Policy to ignore the agreed upon sequencing of a. the establishment new US-DPRK relations, b. a peace agreements and c. denuclearization of the Korean peninsula.Duyeon Kim argues:  [T]he issue is the order of agreed points, which has caused confusion and misinterpretation. For the first time in the history of negotiations, Washington essentially accepted, whether blindly or wittingly, Pyongyang’s wish list on sequencing: 1) normalization of bilateral relations, 2) establishment of a peace regime on the Korean Peninsula, and then 3) “complete denuclearization.” ... This is not "Pyongyang’s wish list". North Korea's "wish list" did not include denuclearization talks. The listed content of those steps and their sequencing was negotiated and agreed upon by all parties. The leaders of North Korea, South Korea and the United States signed on to them. For some undisclosed reason Duyeon Kim wants to change that: . Serious progress on nuclear dismantlement should be achieved before formal discussions commence on a peace treaty. It will take skill and tact from Pompeo’s negotiating team to navigate the pitfalls and landmines along this twisting route.  No" skill and tact" will allow Pompeo to change the sequence that was agreed upon. It would breaks both agreements, the April Panmunjom Declaration between South and North Korea, and the June Singapore Statement signed by Donald Trump and Kim Jong-Un. Duyeon Kim knows this well but openly argues to follow such a path. Why?

Pompeo says North Korea weapons work counter to denuclearization pledge (Reuters) - Less than two months after a landmark U.S.-North Korea summit in Singapore, U.S. Secretary of State Mike Pompeo flew back to the city state on Friday and said North Korea’s continued work on weapons programs was inconsistent with its leader’s commitment to denuclearize. Pompeo was asked en route to Singapore about his statement in the U.S. Senate last month that North Korea was continuing to make bomb fuel and reports that North Korea, led by Kim Jong Un, was building new missiles. “Chairman Kim made a commitment to denuclearize,” Pompeo told reporters. “The world demanded that they (North Korea) do so in the U.N. Security Council resolutions. To the extent they are behaving in a manner inconsistent with that, they are a) in violation of one or both the U.N. Security Council resolutions and b) we can see we still have a ways to go to achieve the ultimate outcome we’re looking for.” Pompeo thanked ministers of the Association of Southeast Asian Nations (ASEAN) at a meeting in Singapore for their efforts in enforcing sanctions on North Korea. In a landmark summit with U.S. President Donald Trump in Singapore on June 12, Kim, who is seeking relief from tough sanctions, committed in a broad statement to work toward denuclearization, but Pyongyang has offered no details as to how it might go about this. Pompeo told a Senate committee hearing on July 25 that North Korea was continuing to produce fuel for nuclear bombs in spite of its pledge. On Monday, a senior U.S. official said U.S. spy satellites had detected renewed activity at the North Korean factory that produced the country’s first intercontinental ballistic missiles capable of reaching the United States. The Washington Post reported on Monday that North Korea appeared to be building one or two new liquid-fueled intercontinental ballistic missiles at the research facility, citing unidentified officials familiar with intelligence reporting.

North Korea gave only one dog tag for 55 boxes of war remains, US official says - When North Korea handed over 55 boxes of bones that it said are remains of American war dead, it provided just a single military dog tag and no other information that could help US forensics experts determine their individual identities, according to a US defense official. The official, who discussed previously undisclosed aspects of the remains issue on condition of anonymity, said it probably will take months if not years to fully determine individual identities from the remains, which have not yet been confirmed by US specialists to be those of American servicemen.The official did not know details about the single dog tag, including the name on it – or whether it was even that of an American military member. During the Korean war, combat troops of 16 other United Nations member countries fought alongside US service members on behalf of South Korea. Some of them, including Australia, Belgium, France and the Philippines, have yet to recover some of their war dead from North Korea.The 55 boxes were handed over at Wonsan, North Korea last Friday and flown aboard a US military transport plane to Osan air base in South Korea, where US officials catalogued the contents. After a repatriation ceremony at Osan on Wednesday, the remains will be flown to Hawaii where they will begin undergoing in-depth forensic analysis, in some cases using mitochondrial DNA profiles, at a defense department laboratory to attempt to establish individual identifications.

Turkey's Erdogan Warns US Will Lose "Strong And Sincere" Ally If It Imposes Sanctions - Turkish President Recep Tayyip Erdogan said that his country will not "make a step back" and that the US will lose a "strong and sincere ally" if President Trump imposes "large sanctions" as he threatened to do last week, if an American pastor detained in Turkey is not released, the Turkish press reported. Speaking to the local media, Erdogan said "you can’t make Turkey take a step back with sanctions", and accused Trump of waging a "psychological war," the Daily Sabah reported. Erdogan also said that the US "should not forget that it will lose a strong and sincere partner" if "the U.S. does not change its stance" regarding pastor Brunson. "Instead of respecting the ruling they are making this a matter of sanctioning Turkey."  As we reported last Wednesday, Pastor Andrew Brunson, who has lived in Turkey for over twenty years, is being held on charges of supporting the "shadow government" group allegedly led by exiled Turkish cleric Fethullah Gullen, 77, who Ankara says was behind the failed military coup in 2016 and has been demanding his extradition from the US for the past two years. The American pastor has maintained his innocence and faces up to 35 years in jail if found guilty. While last week the Evangelical pastor from North Carolina was transferred to house arrest after being held in a Turkish prison for nearly two years, his trial on terror and espionage charges continues. Brunson's fate has become the subject of calls from President Donald Trump and US officials for his release. After US Secretary of State Mike Pompeo discussed the fate of the American pastor with his Turkish counterpart Mevlut Çavuşoglu on Saturday, Erdogan insisted that Brunson's release was never used in a possible prisoner swap deal with Washington.

‘Israel was the absolute darling of progressive, liberal America,’ but no more, says Chomsky -- Noam Chomsky made news on several fronts in an interview on Democracy Now! with Amy Goodman. Gaza should be a thriving Mediterranean paradise. Israel interferes in our politics way more than Russia. And Israel has lost the American left.Israel used to be “the absolute darling of progressive, liberal America.” But it’s shifting its support to rightwing regimes, and losing the Democratic Party. Israel should be preparing itself for a period in which it loses the support of sectors of the world that have some concern for human rights and international law, and should be returning towards alliances with the countries that just don’t care about this. Say, India, under the recent ultranationalist Modi government, shares with Israel the move towards ultranationalism, repression, a hatred of Islam; China doesn’t pay attention to these things; Singapore; Saudi Arabia; United Arab Emirates.And we can see it happening in the United States, as well. So, not too long ago, Israel was the absolute darling of progressive, liberal America. That has changed. By now, among self-identified Democrats, they have considerably more support for Palestinians than for Israel. Support for Israel in the United States has shifted to the ultranationalist right and evangelicals, who, for the wrong reasons, support Israeli actions, with some passion, in fact…. [T]he base of Israeli support in the United States has shifted to the right wing of the Republican Party. So, these things are happening all over the world. And on Gaza, which he reminds us the UN has predicted will be unlivable by 2020. The killings by Israel are “hideously ugly,” he says and Gaza ought to be a Mediterranean paradise.

Trump says he would meet with Iran's leaders without preconditions | TheHill: President Trump said Monday he’s willing to meet with Iranian leaders without preconditions amid heightened tensions between Washington and Tehran. “It’s good for the country, good for them, good for us and good for the world. No preconditions. If they want to meet, I’ll meet,” Trump said at a joint press conference with the Italian prime minister. Trump said he would “certainly meet” with Iranian leaders if they wanted to, but added that he’s unsure “if they’re ready yet.” “I do believe that they will probably end up wanting to meet,” he said. “And I’m ready to meet any time they want to. And I don’t do that from strength or from weakness. I think it’s an appropriate thing to do.” Trump’s openness to a dialogue with Iran comes roughly a week after he issued an all-caps warning to Iranian President Hassan Rouhani that he would face “consequences the likes of which few throughout history have ever suffered” if he threatened the U.S.  The president’s fiery tweet came in response to Rouhani’s comments to Iranian diplomats that war with Iran is “the mother of all wars.” He also left the door open to peace talks, saying peace with Iran is “the mother of all peace.”The back-and-forth raised speculation that the Trump administration might be considering military action against Iran. However, Defense Secretary James Mattis denied a news report that said as much last week, calling it "fiction."Tensions between the U.S. and Iran have been tense for decades. However, Trump risked escalation when he withdrew the U.S. from the Iran nuclear deal earlier this year. The Obama-era agreement lifted sanctions on Tehran in exchange for the country curbing its nuclear program.

"Humiliation" - Iran's Lawmakers React To Trump's 'No Preconditions' Offer Of Direct Talks - Iranian President Hassan Rouhani and his advisors are likely scrambling over what strategy to agree on, if any, in response to President Trump's unexpected and unprecedented Monday offer of "no preconditions" talks with Rouhani.An official response to Trump's surprise words “I would certainly meet with Iran if they wanted to meet. I don’t know if they’re ready yet” issued at a White House press conference was not immediately forthcoming afterward or throughout the day Tuesday. However, while Tehran's top leadership has kept mum on what it might be thinking, lawmakers in Iran's parliament didn't hold back Tuesday, with the deputy speaker of parliament declaring "it would be a humiliation" for Iran's leaders to sit down with Trump.According to the AFP-associated Iranian affairs journal Bourse & Bazaar:Skepticism was rife in Iran on Tuesday after US President Donald Trump offered talks, with one lawmaker saying negotiations would be a "humiliation."The country's top leaders did not give an immediate response to Trump's statement a day earlier that he would meet them "any time" without preconditions.But several public figures said it was impossible to imagine negotiations with Washington after it tore up the 2015 nuclear deal in May.   Iran's semi-official Fars News which typically reflects a more Islamic conservative angle, quoted Ali Motahari, the deputy speaker of parliament, as follows on Tuesday: "With the contemptuous statements (Trump) addressed to Iran, the idea of negotiating is inconceivable. It would be a humiliation." The same report cited Interior Minister Abdolreza Rahmani Fazli, who slammed Trump's statement, saying "America is not trustworthy," and questioning, "After it arrogantly and unilaterally withdrew from the nuclear agreement, how can it be trusted?" One Iranian government advisor and University of Tehran professor, Mohammad Marandi, who helped negotiate the 2015 nuclear deal, said, "We cannot negotiate with someone who violates international commitments, threatens to destroy countries, and constantly changes his position," according to Bourse & Bazaar.

Pompeo sets conditions for Iran meeting after Trump says he'll meet without preconditions | TheHill Secretary of State Mike Pompeo listed specific conditions for President Trump to meet with Iranian leaders, hours after Trump said he would not require any preconditions."We've said this before," Pompeo said on CNBC’s “Closing Bell” on Monday. “The president wants to meet with folks to solve problems.” Pompeo then listed some preconditions for the meeting to take place. “If the Iranians demonstrate a commitment to make fundamental changes in how they treat their own people, reduce their malign behavior, can agree that it's worthwhile to enter into a nuclear agreement that actually prevents proliferation, then the president said he's prepared to sit down and have the conversation with them,” Pompeo said. His remarks came just hours after Trump held a joint press conference with Italian Prime Minister Giuseppe Conte, declaring in front of reporters that he would meet with Tehran with “no preconditions.”“It’s good for the country, good for them, good for us and good for the world. No preconditions. If they want to meet, I’ll meet,” Trump said. The president added that he wasn’t sure “if they’re ready yet.” “I do believe that they will probably end up wanting to meet,” Trump said. “And I’m ready to meet any time they want to. And I don’t do that from strength or from weakness. I think it’s an appropriate thing to do.”

Trump’s offer to meet with Iran’s President Rouhani won’t get us a better deal. We had our chance and lost it. NBC -- After withdrawing from the Iran nuclear deal and threatening Iranwith "consequences the likes of which few throughout history have ever suffered before," President Trump announced on Monday that he wants to meet with President Rouhani without preconditions to craft a new deal. Trump thinks he can achieve this by sanctioning Iran until the rulers in Tehran beg for mercy. But if history is a guide, there will be no such capitulation by Iran: With the Iranians, one of the most costly things to do, both culturally and politically, would be to show Trump the respect and deference he desires after his aggressive string of insults. So I am skeptical about Trump’s ability to pivot to diplomacy with Iran, but that is not to say that a better deal cannot be achieved. Indeed, better deals have often been on the table — but the United States rejected them at the time. In March 2003, the Iranians sent a comprehensive negotiation proposal to the George W. Bush Administration through the Swiss ambassador in Tehran. Unlike the Iran nuclear deal, this proposal was not solely focused on nuclear matters: The Iranians offered to help stabilize Iraq, disarm Hezbollah and collaborate against all terrorist organizations (especially al Qaeda). They even offered to sign on to the 2002 Beirut Declaration, recognizing Israeli statehood in return for Israel’s recognition of a Palestinian state. And, of course, Tehran offered to open their nuclear program for full transparency. But the Bush administration believed — much like Trump — that it could secure a better outcome by just continuing to pressure Iran and didn't even dignify Iran with a response. Instead, the State Department reprimanded the Swiss for having delivered the proposal in the first place.

Let Mikey do it? Maybe not.  -- Mikey Pompeo suffers from Smart Guy Syndrome.  My wife calls it Great Man Syndrome.  In both of these a delusion of centrality sets in based on a belief in one's own superiority.  This  rots the mind.  Mikey has always been the smartest kid in the room.  You know his resumé.  And, pilgrims, he has a smiley face welded onto his real sharkey face.  These attributes have carried him far but he has a weakness or two.  He really does think he is a being above the ken of mortal men AND he is a hyper-nationialist neocon ideologue through and through and in many ways immune to appeals to reason.  He surely think thatTrump is a dolt.  Look at the picture.   He has contradicted the president several times.  This is a very dangerous thing to do.  Trump is a reality based self-centered hustler who is used to dealing with supercilious p---ks who want to manipulate him. Now Mikey has John-John Bolton as ally and playmate.  Bolton is, IMO, more than a little crazy.  Bolton loves his place in an NSC made over into extensions of his neocon craziness.  He thinks that e has the Iranians right where he wants them  He believes that we could fight a maritime campaign in the Gulf with next to no losses and that if necessary we can bomb the Iranian people into unleashing their economic deprivation wrath against the mullahs. Pompeo agrees with him.  He is trying to keep the president buttered up while pursuing his shared goals with Bolton both cleverly and surreptitiously. Well, folks, Trump is a master of the art of BS detection.  Those who try to fool him are taking a great risk.Off to  one side in this drama, stand the inbred caste of generals and admirals.  Trump professes to admire them, but Mattis, Dunford and CENTCOM are steadily losing real power in the contest for the president's attention.  IMO there will be a unifying deal between Damascus and the YPG Kurds and Trump knows all about progress toward that goal.  Do the generals want that?  No.  They have their own desired foreign policy.  They want to make the casualties of the last 15 years meaningful through victory somewhere, anywhere would do.  They also want revenge against Iran for men lost in Iraq.  They listen to the Israelis far too much.IMO Trump has a private line of communication to Russia.  This is perfectly legal and probably is conducted over CIA communications links or through the ambassador in Moscow, Jon Huntsman or both.  Pompeo may or may not know what is being said in those channels. 

John Kelly Agrees To Remain As Chief Of Staff Until 2020 At Trump's Request -- —White House Chief of Staff John Kelly said he had accepted President Trump’s request to stay in his job through the 2020 election, according to officials, as tensions between the two men have eased in recent months. Mr. Kelly had been widely expected to leave the White House this summer. He told staff his decision to stay put on Monday, which marked his first anniversary in the role. The president in recent months has consulted with advisers about whom to tap as his next chief of staff, considering Nick Ayers, who serves as chief of staff to Vice President Mike Pence, and Mick Mulvaney, who heads the Office of Management and Budget and serves as acting director of the Consumer Financial Protection Bureau. Messrs. Ayers and Mulvaney were in the room Monday when Mr. Kelly made his announcement, according to people familiar with the matter. A White House official cautioned that while the plan is for Mr. Kelly to remain in his post through 2020, unforeseen circumstances could cause that to change.If he does stay until then, Mr. Kelly would be among the longest-serving White House chiefs of staff in history. By 2020, Mr. Kelly’s tenure would be seven times as long as that of his predecessor, Reince Priebus—a longevity that would serve as a counterpoint to the rapid turnover the Trump administration has seen in its first 18 months. In the past six months alone, Mr. Trump has seen the exit of communications director Hope Hicks, Secretary of State Rex Tillerson and national security adviser H.R. McMaster, as well as other top officials. 

The US 2019 Defense Budget Bill: Congress Defies The New World Order -- The House and Senate versions of the draft National Defense Authorization Act (NDAA) for fiscal year 2019 were unveiled by Congress on July 23. Both include a provision to temporarily bar the transfers of F-35 joint strike fighters (JSF) to Turkey. According to the final 2019 defense bill, the Defense Department would be required to submit a report to lawmakers within 90 days about the relationship with Ankara, all its foreign weapons deals, and Turkey’s move to purchase the S-400 air-defense system from Russia before any more sales could go through. Until then the US would sit on any weapons transfers to Turkey. Ankara’s decision to buy the Russian S-400 air-defense system, the “F-35 killer,” has greatly aggravated bilateral ties between the US and Turkey, a relationship that was already clouded by many other issues.  The House is expected to vote on the legislation this month, with the Senate taking it up in early August. Defense Secretary Jim Mattis had warned Congress against punishing Turkey by cutting off transfers of F-35s in retaliation for its plans to buy the Russian anti-aircraft system, but his opinion was ignored. The State Department has been putting pressure on Ankara to try to make it reconsider the S-400 deal, in favor of purchasing the less capable, US-made Patriot system.  US Assistant Secretary of State for European and Eurasian Affairs Wess Mitchell told the Senate "We've been very clear that across the board, an acquisition of S-400 will inevitably affect the prospects for Turkish military-industrial cooperation with the United States, including F-35." Turkish officials view the US demand as blackmail.

 War Is A Racket: After 17 Years and Billions Wasted, US Seeks Peace With Taliban - Afghanistan, long acknowledged to be America's "forgotten war", has finally returned to the news of late. But this time, in a shocking twist on the now 17-year long conflict, the US is negotiating with the Taliban. Perhaps this is why the mainstream media has by and large not given this bombshell story the coverage it deserves? Or do the major networks feel the American public has long ago stopped paying attention and will therefore yawn at any headlines containing the words 'US Troops/Afghanistan'?  As Daniel McAdams explains, last week US State Department officials met with Taliban leaders in Qatar. At the request of the Taliban, the US-backed Afghan government was not invited. The officials discussed ceasefires and an end to the war. Meanwhile, the US inspector general charged with monitoring US spending on Afghanistan reconstruction has reported that since 2008, the US has completely wasted at the least $15.5 billion. He believes that's just the tip of the iceberg, though. On Sunday, Reuters had this report on the latest surprising developments:A meeting between a senior U.S. diplomat and Taliban representatives in Doha last week to discuss a possible ceasefire ended with “very positive signals” and a decision to hold more meetings, people with knowledge of the talks said on Sunday.The meeting between a delegation led by Alice Wells, deputy assistant secretary in the State Department’s Bureau of South and Central Asian Affairs, and Taliban representatives was first reported in The Wall Street Journal but has not been officially confirmed.According to one Taliban official, who said he was part of a four-member delegation, there were “very positive signals” from the meeting, which he said was conducted in a “friendly atmosphere” in a Doha hotel.Could we be witnessing the very beginning stages of a negotiated face-saving exit from this nearly two decade long American quagmire in central Asia?

It’s Time for NATO to Go the Way of the Warsaw Pact -- The outcome of the July 11-12 NATO meeting in Brussels got lost amid the media’s obsession with President Donald Trump’s bombast, but the “Summit Declaration” makes for sober reading. Themedia reported that the 28-page document “upgraded military readiness,” and was “harshly critical of Russia,” but there wasn’t much detail beyond that. But details matter, because that’s where the devil hides.One such detail is NATO’s “Readiness Initiative” that will beef up naval, air, and ground forces in “the eastern portion of the Alliance.” NATO is moving to base troops in Latvia, Estonia, Lithuania, the Czech Republic, and Poland. Since Georgia and Ukraine have been invited to join the Alliance, some of those forces could end up deployed on Moscow’s western and southern borders.And that should give us pause.A recent European Leadership’s Network’s (ELN) study titled “Envisioning a Russia-NATO Conflict” concludes, “The current Russia-NATO deterrence relationship is unstable and dangerously so.” The ELN is an independent think tank of military, diplomatic, and political leaders that fosters “collaborative” solutions to defense and security issues.High on the study’s list of dangers is “inadvertent conflict,” which ELN concludes “may be the most likely scenario for a breakout” of hostilities. “The close proximity of Russian and NATO forces” is a major concern, argues the study, “but also the fact that Russia and NATO have been adapting their military postures towards early reaction, thus making rapid escalation more likely to happen.” With armed forces nose-to-nose, “a passage from crisis to conflict might be sparked by the actions of regional commanders or military commanders at local levels or come as a consequence of an unexpected incident or accident.” According to the European Leadership Council, there have been more than 60 such incidents in the last year.

Major Car Exporters Said to Plan Meeting Amid U.S. Tariff Threat -- Major car-producing nations are due to meet without the U.S. to discuss possibly coordinating their response to President Donald Trump’s threat of tariffs. Representatives of the European Union, Canada, Mexico, South Korea and Japan will convene in Geneva on July 31 to debate how to respond if the U.S. imposes levies on car imports, as well as prospects for reforming the World Trade Organization, according to three people familiar with the matter. Two officials said participants will explore the possibility of an international accord to cut tariffs on cars, although two other officials said this was not part of the formal agenda.  While European Commission President Jean-Claude Juncker and Trump agreed this week to refrain from “unilateral actions” as the EU and the U.S. negotiate a trade pact, a Commerce Department investigation under an act that permits the imposition trade restrictions if car imports are found to harm national security is still ongoing, keeping up the pressure on major exporting nations."We’ve been directed by the president to continue the investigation, get our material together but not actually implement anything pending the outcome of the negotiation," U.S. Commerce Secretary Wilbur Ross said on July 26. "What we’ve agreed to is not to impose automotive tariffs while the negotiations are under way."The threat of tariffs on car imports and levies already imposed on other goods including steel have strained relations between the U.S. and its closest allies. Trade protectionism adds to a series of disputes, ranging from climate change to Middle East policy, which have upended the ties binding together developed nations since Trump’s election in office. Though the U.S. auto industry has roundly rejected the need for new tariffs, major car exporters fear Trump could still forge ahead with duties after the Commerce Department releases its report in late August or September. In recent weeks, EU trade officials have mulled the possibility of launching a sectoral negotiation among the world’s major auto-producing nations in the hopes of deterring Trump from imposing auto tariffs.

Rifts emerge in US-EU trade deal - Less than a week after being made, the US-European Union handshake trade deal, which was described as a truce or at least a ceasefire in the trans-Atlantic trade war, is starting to come apart.The rift is over what was exactly agreed to at the meeting on July 25 between President Donald Trump and European Commission President Jean-Claude Juncker. The gap in interpretation, which centres on agriculture, emerged the day after the deal was struck, when Trump told an audience of US farmers: “We just opened up Europe for you farmers.”Under the deal, the EU agreed to increase its imports of American soybeans and US liquefied natural gas in return for a suspension of a threatened 25 percent tariff on European cars and auto parts and further talks on the imposition of tariffs on steel and aluminium. But there was no agreement on any further opening up of European agricultural markets, which are protected by complex arrangements under the Common Agricultural Policy.Immediately after the meeting, Juncker told reporters the US had “heavily insisted to insert the whole field of agricultural products. We refused that because I don’t have a mandate and that’s a very sensitive issue in Europe.”Following Trump’s remarks and their implication that the deal went beyond soybeans, Juncker issued a statement through a spokeswoman that agriculture was “not part of it.”“When you read the joint statement … you will see no mention of agriculture as such, you will see mention of farmers and a mention of soybeans, which are part of the discussions and we will follow up on that,” Mina Andreeva said. “On agriculture, I think we’ve been very clear on that—that agriculture is out of the scope of these discussions. We are not negotiating about agricultural products.”   These comments only led the US side to step up its offensive. Larry Kudlow, Trump’s chief economic adviser, told CBS’s “Face the Nation” on Sunday that the US would start negotiations with the EU to make agreements on farm and energy products. “We’ll be setting up a layered process to examine all the different areas,” he said, indicating that broad negotiations on agriculture would be included.

How an EU Gene Editing Ruling Could Derail Trade Talks - The European Court of Justice has ruled that new gene editing techniques fall within the broader definition of genetic modification, which is subject to strict regulation and, in some cases, outright bans within the European Union. The decision unveiled on July 25 modifies a previous opinion issued by the court that was less definitive. Last week's ruling will hobble research and development of agricultural biotechnology within Europe and likely prompt more biotech companies to move their operations outside the continent.  Agriculture remains a key sticking point in newly reinvigorated EU-U.S. trade negotiations. Over the weekend, officials on both sides traded rhetoric over the issue as they highlighted agriculture's role in the discussions. But beyond a few easy points of agreement, like increasing the volume of soybean trade between the two, agriculture is poised to remain a contentious issue throughout negotiations, especially where GM crops are concerned. The French, in particular, have been vocal about their opposition to a trade deal with the United States that includes agriculture. Given those limits, it's easy to see how disagreements over agriculture could lead to a collapse of the broader conversation between the European Union and the United States, inviting the return of a cycle of tariff threats and retaliation. In the long term, the fundamental disagreements on the future direction of agricultural technology — particularly the development and use of genetically modified organisms — could create even more barriers to a trade deal between the two.A mismatch in definitions of what constitutes genetic modification could place future trade agreements at risk. The European court ruling now sets the stage for a battle over what regulations on the applications of new technologies will become standard. Gene editing and GMOs have the potential to revolutionize agricultural production, but regulation could limit cutting-edge applications. When considering the long-term compatibility of agricultural trade, differing definitions of what constitutes genetic modification, especially whether or not to include the products of gene editing techniques in that definition, could hinder not just the current U.S.-EU trade talks but limit other trade deals as well. The ruling could affect several EU trade agreements in various stages of negotiation, including those with Australia, Canada and the Common Market of the South (known by its acronym in Spanish, Mercosur).

 Hey Mr. Juncker, About That Bean Order -- Trump claims to have worked out a soybean deal with the EU. It was a lie. Let's now look at kidney beans. Trump's tariff battle is shaking Wisconsin’s Chippewa Valley Bean Co., and rippling through to its clients, vendors and customers. The result: Kidney Beans Piled to the Rafters..After the U.S. slapped tariffs on European steel and aluminum in June, Europe hit back with a tax that, among other things, made American kidney beans 25% more expensive in Europe.Now, Cindy Brown is running out of room to store kidney beans. One-ton bags of them cover the floors in her cavernous warehouses. Smaller sacks are piled on wood-pallet shelves. Beans fill tall steel bins that dot the grounds. Chippewa Valley Bean Co. had been on track to ship to Europe 60% of its beans traded internationally this year, worth $25 million. Now, “we’re just sitting on our hands,” said Ms. Brown, president of the family company.Ms. Brown, Chippewa Valley’s president, said the company last month shipped nearly 40% less than what is typical for this time of year. She said 80 shipping containers’ worth of kidney beans, valued at a total of $2 million, are stuck in its warehouses as orders from Europe dry up.Chippewa Valley handles one in four dark red kidney beans traded internationally, according to Randy Fairman, an agricultural consultant who specializes in dry beans. “If the tariffs hold, the near-term impact will be devastating to small businesses both i n the U.S. and the EU,” Mr. Fairman said. “There is no place in the supply chain where a 25% tariff could be absorbed.”

 U.S. and China clash at WTO over ideology, state's role (Reuters) - Chinese and U.S. envoys presented radically differing visions of Beijing’s economic model at the World Trade Organization on Thursday, a choice between “the world’s most protectionist economy” and a growth story that has benefited all countries. The clash came as the two face off in a multi-billion dollar trade war - U.S. President Donald Trump has launched a barrage of tariffs, accusing China of unfair practices and stealing innovation. China has targeted U.S. farm produce. U.S. Ambassador Dennis Shea was presenting a paper entitled “China’s trade-disruptive economic model” to the last WTO meeting before a summer break. Aside from the tariffs, the two sides are wrestling to get the WTO to see things their way: Washington says China cheats by having an economy run by the state, Beijing says it plays by the rules agreed when it joined the WTO in 2001. Shea said the harm done by China’s state-led approach to trade and investment “can no longer be tolerated”, and it was not enough to assert that it was following WTO rules. State-owned enterprises play an outsized role in China, with control exercised by the government and Communist Party, which appoint top executives and hold the keys to crucial inputs such as land and capital, Shea said. He said the law was an instrument of the state, and courts were structured to respond to the Communist Party’s direction. “For China, economic reform means perfecting the government’s and the Communist Party’s management of the economy and strengthening the state sector, particularly state-owned enterprises.” China’s Ambassador Zhang Xiangchen said Shea’s remarks had a whiff of gunpowder about them and his report was “half-cooked”, with no evidence to support its assertion that the Chinese state “controls” enterprises. 

 Stocks, Yuan Surge After US, China Said To Seek Restart Of Trade Talks -- With the next wave of US tariffs set to hit as soon as Wednesday, and with trade negotiations stalled for weeks, Beijing and Washington are said to be eager to trying talks in order to avert a full-blown trade war, according to Bloomberg, citing two people familiar with the effort. According to Bloomberg sources, representatives of Steven Mnuchin and Chinese Vice Premier Liu He are having private conversations as they look for ways to reengage in negotiations. However, they have cautioned that a specific timetable, the issues to be discussed and the format for talks aren’t finalized, but at least there is agreement among the principals that more talks need to take place.After some early success, negotiations have been stalled for weeks, with both sides in a standoff. Meanwhile, high-level US talks on trade posture with China are ongoing. Complicating matters, however, is a harder line approach taken by US trade representatitve Robert Lightizer, who is in charge of the US's "301 investigation" that resulted in the tariffs, and which concluded that China has been stealing US technology.  The next wave of tariffs is set to kick in as soon as Wednesday, with the possible imposition of $16 billion of duties on Chinese imports - a move Beijing has vowed to respond to with the same level of tariffs on US products.

Futures, Yuan Slammed As US Plans Higher Tariffs On $200 Billion in Chinese Imports - Hours after Bloomberg reported that Beijing and Washington are working towards a resumption of trade talks, the Wall Street Journal reported that the two countries have "yet to make meaningful progress" moving forward from an impasse, as the next wave of US tariffs are set to hit as soon as Wednesday. Treasury Secretary Steven Mnuchin and Chinese envoy Liu He and their staffs continue to talk about a possible meeting, said officials in both capitals, but the talks remain at a very preliminary stage. Both sides argue that it is up to the other to make the first move after several preliminary Chinese offers, mainly involving the purchase of more U.S. goods, were rejected by President  Trump as inadequate.The two sides have agreed that their initial offers weren’t a solid base for further negotiations, according to a senior member of the U.S. business community tracking the discussions. Those included the Chinese offer to buy more U.S. exports, and the U.S. demand that China essentially scrap the industrial policy that turned it into an economic powerhouse, the senior executive said. –WSJ But wait - now Bloomberg reports that the Trump administration is set to increase a proposed 10% tariff on $200 billion in Chinese imports to 25% - "ratcheting up pressure on Beijing to return to the negotiating table." If enacted, it would mean overall tariffs of $505 billion on Chinese imports.The U.S. imposed 25 percent tariffs on $34 billion of Chinese products in early July, and the review period on another $16 billion of imports ends Wednesday. President Donald Trump has threatened an additional $200 billion with levies of 10 percent, a level the administration may raise to 25 percent in a Federal Register notice in coming days, one of the people said. The change isn’t final yet and may not go forward after a public review, the people said. –Bloomberg

China vows retaliation if Trump slaps 25 percent tariff on $200 billion of Chinese imports (Reuters) - China said on Wednesday that “blackmail” wouldn’t work and that it would hit back if the United States takes further steps hindering trade, as the Trump administration considers slapping a 25 percent tariff on $200 billion worth of Chinese goods. The proposal would increase the potential tariff rate from 10 percent the administration had initially put forward on July 10 for that wave of duties in a bid to pressure Beijing into making trade concessions, a source familiar with the plan said on Tuesday. The tariffs target thousands of Chinese imports, including food products, chemicals, steel and aluminum and consumer goods ranging from dog food, furniture and carpets to car tires, bicycles, and baseball gloves and beauty products. While the duties would not be imposed until after a period of public comment, raising the proposed level to 25 percent would escalate the already bitter trade dispute between the world’s two biggest economies. The source said President Donald Trump’s administration could announce the tougher proposal as early as Wednesday in Washington. The plan to more than double the tariff rate was first reported by Bloomberg News. China, which has accused the United States of bullying, again vowed to retaliate if Trump proceeds with the measures, warning that pressure tactics would fail. “U.S. pressure and blackmail won’t have an effect. If the United States takes further escalatory steps, China will inevitably take countermeasures and we will resolutely protect our legitimate rights,” Chinese Foreign Ministry spokesman Geng Shuang told a regular news briefing. Investors fear an escalating trade war between Washington and Beijing could hit global growth, and prominent U.S. business groups, while weary of what they see as China’s mercantilist trade practices, have condemned Trump’s aggressive tariffs. Representatives of U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He have been speaking privately as they seek to restart negotiations to defuse the budding trade war, Bloomberg reported, citing sources. A spokeswoman for the U.S. Trade Representative’s Office declined to comment on the proposed tariff rate increase or on whether any changes would alter the deadlines laid out for comment period before implementation.

    Trade War Returns: China Vows Retaliation To US "Blackmail" If Trump Hikes Tariffs - It took less than a day for the latest trade war ceasefire with China to crash and burn.Just hours after reports spread that Trump is considering more than doubling planned tariffs on $200 billion in Chinese imports, raising the rate from 10% to 25%, China vowed it would retaliate, and warned the U.S. against "blackmailing and pressuring" it over trade.As reported last night, the latest US proposal - which Trump could unveil as soon as today - would increase the potential tariff rate from 10% the administration had initially put forward on July 10 for that wave of duties in a bid to pressure Beijing into making trade concessions, to 25%. At the same time, representatives of Steven Mnuchin and Chinese Vice Premier Liu He are reportedly having private conversations as they look for ways to reengage in negotiations, however as the WSJ also reported on Tuesday, these negotiations haven't had much, if any, success. As Bloomberg notes, "while American and Chinese officials have hinted at the possibility of restarting talks in recent weeks, it’s been almost two months since they last held high-level negotiations."The two sides held three rounds of formal talks, beginning with a delegation to Beijing led by Mnuchin in May. After Liu visited Washington later that month, the nations released a joint statement pledging to reduce the U.S. trade deficit with China, among other things. But within days, Trump himself backed away from the deal, saying talks would “probably have to use a different structure.”In response to the latest escalation out of the White House, China again accused the United States of bullying, and vowed to retaliate if Trump proceeds with the measures, warning that pressure tactics would fail.“U.S. pressure and blackmail won’t have an effect. If the United States takes further escalatory steps, China will inevitably take countermeasures and we will resolutely protect our legitimate rights,” Chinese Foreign Ministry spokesman Geng Shuang told a regular news briefing.

      -White House escalates China trade dispute to secure early breakthrough (Reuters) - The United States has adopted an "escalate to negotiate" strategy towards China, threatening a dramatic hike in tariffs to try to force a resumption of trade talks while the U.S. economy remains strong and as elections approach in November.   U.S. President Donald Trump has reportedly rejected a plan to levy tariffs of 10 percent on an additional $200 billion of imports from China and ordered aides to prepare a proposal for tariffs at the higher rate of 25 percent.The levies are in addition to the tariffs on $34 billion of imports that have already gone into effect and the $16 billion of tariffs announced but not yet implemented.The administration's approach to China is the same one it has employed in dealing with North Korea, Iran, the European Union and NAFTA partners. The basic strategy, including the risks and opportunities, will be familiar to anyone who has studied the Cold War confrontation with the Soviet Union (“On escalation: metaphors and scenarios”, Kahn, 1965).The administration’s decision to escalate the confrontation dramatically at this point, threatening significant tariffs on a wide range of imports, including consumer items, is likely to stem from a combination of strength and fear. So far, the trade war appears to have hit China’s economy and financial markets harder than the United States, which has given the administration confidence that it is escalating from a position of strength. The U.S. S&P500 equity index is up by more than 5 percent since the start of 2018, and 25 percent since the start of 2017, while China's Shanghai composite index has fallen by 13 percent and 7 percent respectively.The U.S. dollar has strengthened by 5 percent against China's yuan since the beginning of the year and has risen by around 3 percent on a trade-weighted basis against the currencies of other major U.S. trading partners.  China’s economy has shown signs of slowing, with the central government resorting to fiscal and monetary stimulus to offset the slowdown in external demand and boost confidence. In contrast, the U.S. economy expanded at an annualised rate of 4.1 percent in the second quarter, the fastest for almost four years, according to advance estimates (

      "More Pain Ahead": Wilbur Ross Says Trump Will Put More Pressure On China "To Modify Their Behavior" Chinese stocks slumped overnight as trade war tensions escalated after Wilbur Ross said there’s more pain ahead unless China changes its economic system, as Beijing repeated it will never surrender to U.S. trade threats.“We have to create a situation where it’s more painful for them to continue their bad practices than it is to reform,” Commerce Secretary Wilbur Ross said in an interview on Fox Business Network late on Thursday. As a result, Trump will keep turning up the pressure on China for as long as the country refuses to level the economic playing field, Ross said.Pointing out the obvious, Ross said that "the reason for the tariffs to begin with was to try and convince the Chinese to modify their behavior. Instead they have been retaliating. So the president now feels that it’s potentially time to put more pressure on, in order to modify their behavior."As for the impacts on the US economy, Ross noted that a 25% levy on $200bn is $50bn per year on a $18 trillion economy, so even if the levy was passed, “it’s not something that’s going to be cataclysmic”.Elsewhere Bloomberg cited unnamed US officials who noted that the US is open to new formal talks with China, but Beijing must agree to open its market to more competition and stop retaliatory measures.Ross' comments follow a statement by China’s Ministry of Commerce which noted that "China is fully prepared and will have to retaliate to defend the nation’s dignity and the interests of the people, defend free trade and the multilateral system, and defend the common interests of all countries,” China’s Ministry of Commerce said in a statement Thursday on its website. The “carrot-and-stick” tactic won’t work, it said.

      China Releases "Retaliation List" To US Tariffs, Will Levy Tariffs On $60BN In US Goods Just minutes after China appeared to offer Trump an olive branch in the trade wars, when as we reported moments ago it nuked Yuan shorts by hiking forward FX reserve requirements by 20% in the process effectively easing financial conditions in the US by sending the dollar sharply lower (and the Yuan higher), China surprised the market which took the PBOC announcement as a "risk on" signal, by releasing the proposed retaliation list to US tariffs, and announcing it will impose differentiated tariffs on $60 billion in US goods.In a statement issued late Friday, the State Council, China’s cabinet, said China is preparing to impose duties at levels of 25%, 20%, 10% and 5% on some 5,207 American goods, and will be implemented as soon as the US enacts its own tariffs. Furthermore, the Chinese Government said it reserves the right for additional retaliation measures Some of the products affected, per Reuters:


      More importantly, the Chinese list includes tariffs on some US aircraft, which may lead to pain for Boeing today, although according to the list only "small and medium-sized" airplanes will be affected.According to the announcement, the measures are to guard its interest and to keep trade frictions from escalating, although the moment Trump sees that China is responding in kind, he will most likely flip out and demand that the next set of $200BN in tariffs be swiftly implemented.“The implementation date of the taxation measures will be subject to the actions of the U.S., and China reserves the right to continue to introduce other countermeasures,” the State Council statement said. “Any unilateral threat or blackmail will only lead to intensification of conflicts and damage to the interests of all parties.”

        Kudlow Says Trump Won't Back Down: "China's $60BN Response Is Weak" -- It took little time for Trump's chief China trade war advisor Larry Kudlow to respond to China's publication of its "retaliation list" itemizing the $60 billion in US goods that will be subject to US tariffs. Saying that the $60 billion trade response by China might be weak, Kudlow warned that the US has more ammunition than China in a trade fight, envisioning that the US imports more products from China than vice versa. Predictably, Kudlow focused on China's currency devaluation response as the trade war recently shifted to currency war as Beijing hopes to offset the impact of tariffs using a weaker currency.  Speaking on Bloomberg TV, Kudlow correctly noted that the yuan has fallen in part because China has "stopped defending the yuan. They think it’s going to help offset the U.S. efforts to get rid of their unfair trading." This changed on Friday evening  (Chinese time) when the PBOC announced it would increase the reserve requirement on FX forward, precipitating a short squeeze and sending the Yuan sharply higher and the dollar sliding. Some speculated that the PBOC move was a form of soft capital control, as the Yuan had fallen so much it had precipitated capital flight, easily the weakest link in China's economy. Kudlow touched on this, saying that "some of the currency fall though I think is just money leaving China because it’s a lousy investment, and if that continues that will really damage the Chinese economy.""If money leaves China - and the currency could be a leading indicator - they’re going to be in a heap of trouble. And so I’m going to make the case that they are in a weak economic position. That’s not a good place for them to be vis-a-vis the trade negotiations," he told BBG TV's Jonathan Ferro. It is not clear if this means that Kudlow - and thus Trump - finally understand that further tightening, and higher rates in the US, is a far worse for the Chinese economy, especially since China is about to post its first first half current account deficit on record which, without outside capital, it simply can't fund and the alternative would be economic contraction.

        China unveils new tariffs on $60b of US goods in latest tit-for-tat trade war  - China has announced retaliatory tariffs on $US60 billion ($81b) worth of US goods ranging from liquefied natural gas (LNG) to some aircraft and warned of further measures, signalling it will not back down in a protracted trade war with Washington. China's finance ministry unveiled new sets of additional tariffs on 5,207 goods imported from the United States, ranging from 5 to 25 per cent. China's Commerce Ministry said in a separate statement Beijing's new set of proposed import tariffs on US goods were rational and restrained. The ministry said timing of the implementation of the new tariffs on US goods would depend on the actions of the US. White House economic adviser Larry Kudlow warned China after it announced its retaliatory tariffs, saying Beijing should not underestimate US President Donald Trump's determination to act on trade. "He [Trump] is going to stand tough … They better not assume anything … The president is not about to back down. "And the best news, I think, is we are coming together with the European Union to make a deal with them, so we'll have a united front against China and, I think, most of our trade team would tell you, we're moving close on Mexico … So, this unifies NAFTA and US-Europe, Australia, Japan — China is increasingly isolated with a weak economy." 

        Why China’s pork producers can survive without US soybeans - As the man who is responsible for feeding about 800,000 pigs in China’s biggest pork-producing province, Li Xueya and his team have been vacillating for months about when to place their major orders. “The trade war has disrupted our expectations and we don’t know when is good time to buy,” said Li, head of the purchasing department of Xinda Muye, a farming company in the central province of Henan. Li estimated that the average pig farming business in China is facing an increase of up to 36 yuan (US$5.30) for raising one hog, which usually takes five to six months. That translates to a total of 28.8 million yuan (US$4.8 million) for a firm like his. The increase is the result of China’s decision earlier this month to levy a 25 per cent tariff on imports of US soybeans, which are used for pig feed, as part of the escalating trade war between the world’s top two economies. The tariffs on US soybeans will hit Chinese farmers as well as their American suppliers. But pig farmers and analysts said they have alternatives to offset the impact. Li says the impact can be minimised by changing the animals’ diets and looking for alternatives to soybean meal, a commonly used source of protein which normally accounts for about 20 per cent of hog feed. “We won’t die…but our profits will be somewhat affected,” he said. 

        Here Is The Full List Of US Products That Will Be Hit With New Chinese Tariffs  - Stoking the flames of the relentless trade war between the US and China, earlier today Beijing unveiled a list of $60 billion of some 5,207 goods imported from the United States that will be taxed with extra tariffs ranging from 5 to 25%, should the U.S. follow through on a plan to impose duties on $200 billion of Chinese goods as early as next month.Here are some facts and figures about the products (via BBG):

        • Taxation breakdown:
          • 2,493 products fall under the 25% category;
          • 1,078 products will be taxed at 20%,
          • 974 at 10%
          • 662 at 5%
        • Liquefied natural gas to be taxed at 25%
        • Agricultural products may face levies between 10% and 25%
        • Machinery is mainly taxed in 20%, 10% and 5% categories
        • Mining, mineral and metal products face tariffs of 10%-25%; natural and synthetic chemicals are taxed under all four brackets
        • Sports equipment is mainly taxed under 10% and 20% categories
        • Motor vehicles, together with their parts and accessories, fall mostly within the 5% bracket

        Will this be the final trade war salvo? Certainly not: in response to China's sanctions announcement, earlier today Larry Kudlow told Bloomberg that Trump will keep pressing China for trade concessions as the administration views China's $60BN response as "weak" although together with the last tariff rounds, it pretty much exhausts the amount of imports that China takes from the US in any given year, and so China can't impose further sanctions even if it wants to.

        What Goldman Expects Will Happen In A "Severe" Trade War -- In a report from Goldman's David Kostin, the equity strategist departs from the traditional angle of looking at the hit to the overall economy and GDP, and takes a slightly different angle in evaluating trade war impact, which he analyzes in terms of foreign revenue exposure of US companies - and to infer how the bank's three tariff scenarios would impact S&P earnings. According to Goldman calculations, S&P 500 companies in aggregate derived 30% of revenues from international sources, compared with 29% in 2016. At a sector level, Information Technology and Materials have the highest international exposure, representing 60% and 49% of total sector sales, respectively. On the other hand, the most domestic-facing sectors were Telecom Services and Utilities, which both generated 96% of revenues in the US. When analyzing the impact of trade war on US corporations via the revenue channel, Kostin notes that the relative performance of the most domestic- and foreign-facing stocks is driven by a combination of three factors:

        • First, ongoing trade tensions pose the most risk to companies with high exposure to trade between the affected countries, notably China and the US. As a whole, tariffs will weigh on S&P 500 earnings in two ways: lower export revenues and lower margins resulting from higher input costs. The risk of lower export revenues to be minor: only two percent of S&P 500 sales are from China. The impact of a 10% tariff on Chinese imports would be more substantial, lowering our 2019 S&P 500 EPS estimate by three percent. While we estimate the impact to be limited on the index level, companies with a large portion of sales to China are more exposed.
        • Second, relative GDP growth is another important driver of the performance of our geographic baskets. As US GDP growth rises relative to global, domestic-facing stocks outperform stocks with the highest international sales exposure. Higher global ex-US GDP growth often implies better growth prospects for companies with significant exposure to non-US regions, which in turn drives equity performance.
        • Third, foreign exchange rates are also a key factor of our baskets, with a strong dollar benefiting domestic-facing stocks relative to firms with a high proportion of non-US sales. A strong US dollar represents a potential headwind to firms with the highest foreign sales exposure, as their goods and services become more expensive relative to goods and services within the foreign country

         Top Koch network officials vent frustration with White House, GOP-led Congress | TheHill: — Senior officials from the group of networks affiliated with billionaire conservative businessman Charles Koch are expressing deep frustration with President Trump and the Republican-controlled Congress, even as they spend heavily to elect Republicans and promote conservative causes ahead of the midterm elections. From trade to immigration and spending, top Koch network strategists, who briefed reporters at a five-star resort in Colorado Springs for the group’s biannual seminar, outlined the areas from which they believe the Trump administration and GOP Congress have gone astray. They’re also frustrated by what they view as the “divisiveness” of the Trump administration — something officials say is complicating lawmakers' ability to find areas of compromise. “The divisiveness of this White House is causing long-term damage,” said Brian Hooks, president of The Charles Koch Foundation. “When in order to win on an issue, someone else has to lose, it makes it very difficult to unite and solve the problems of this country.”“When we say there’s a lack of leadership … I’d include the White House and a number of politicians who are following that lead,” Hooks continued. “There’s a need for someone to step up and show people it’s possible to achieve things when you unite people together … rather than divide them.” In a video the network is expected to unveil on Sunday, Koch will warn against “a rise in protectionism” — a swipe at the president’s tariffs and immigration policies.

        Charles Koch vows to hold Republicans accountable | TheHill: — Billionaire activist Charles Koch said Sunday that his network of big-spending political groups would be more aggressive in going after Republicans who have failed to adhere to fiscally conservative principles. Speaking to a small group of reporters in a rare interview at a five-star resort in the Rocky Mountains, Koch vowed to hold GOP lawmakers accountable for their votes when they break with the network’s free-market views on issues like spending and tariffs. “I regret some of the [lawmakers] we have supported … we’re gonna more directly deal with that and hold people accountable,” Koch said. The Koch network will spend about $400 million this election cycle on politics and policy, with much of it aimed at electing Republicans or promoting conservative causes. But they’ve also spent money to hold GOP lawmakers accountable, particularly on spending. So far this cycle, groups affiliated with the Koch network have run ads calling out 10 GOP House members and two Republican senators for supporting the $1.3 trillion spending bill that passed in March or for refusing to back spending clawbacks. The network has also spent money on ads this cycle thanking Democrats who have supported some of their initiatives, like Sen. Heidi Heitkamp (D-N.D.), who voted in favor of bank reform. Heitkamp is one of 10 Senate Democrats running for reelection in states Trump carried in 2016. 

        Trump launches extraordinary attack on Koch brothers after oil tycoons refuse to back Republican candidate -- Donald Trump has launched an extraordinary attack on the Koch brothers, accusing the Republican megadonors of opposing his government’s agenda.“The globalist Koch Brothers, who have become a total joke in real Republican circles, are against Strong Borders and Powerful Trade,” the US president wrote on Twitter early on Tuesday morning.  “I never sought their support because I don’t need their money or bad ideas.”Mr Trump’s outburst came after the Koch brothers’ political arm declared it would not help elect a Republican senate candidate inNorth Dakota, partly over his failure to challenge the White House’s trade tariffs.The decision sent a strong message to Republican officials across the country unwilling to oppose the spending explosion and protectionist trade policies embraced by Mr Trump. “For those who stand in the way, we don’t pull any punches, regardless of party,” Tim Phillips, who leads the Kochs’ political arm Americans For Prosperity (AFP), told hundreds of donors during a three-day private Rocky Mountain retreat.  But a furious Mr Trump hit back, claiming he made Charles and David Koch “richer”, and that they “love” his tax cuts, deregulation and judicial nominations.  “Their network is highly overrated, I have beaten them at every turn,” he continued. “They want to protect their companies outside the US from being taxed, I’m for America First & the American Worker – a puppet for no one. Two nice guys with bad ideas. Make America Great Again!” The split marks a new chapter in the strained relationship between the Trump administration and the expanding conservative network created by billionaire industrialists, who refused to endorse the Republican president in 2016.

        The Koch Government: These 44 Trump Officials Have Close Ties to Right-Wing Billionaire Brothers -- The relationship between Donald Trump and the Koch brothers has gone from chilly to warm. During the 2016 presidential campaign, Trump repeatedly sparred with Charles and David Koch, the billionaires who control the second-largest private company in America and run a right-wing political empire. As is typical for Trump, the tensions were evident on Twitter: Starting right after the election, political operatives and policy experts who have worked at numerous Koch-funded organizations have fanned out through the Trump Administration. They are influencing policies involving taxes, the environment, energy, education and health care — all in service of a far-right anti-government agenda. A Public Citizen review of the Koch brothers’ connections to the Trump administration and policy agenda in Washington, D.C. finds:

        • 44 Trump administration officials have close ties to the Koch brothers and their network of political groups, particularly Vice President Mike Pence, White House Legislative Affairs Director Marc Short, EPA Administrator Scott Pruitt and White House budget director Mick Mulvaney.
        • The bulk of Koch allies are in the White House, with 21 officials working there or nominated for White House jobs.
        • Koch allies are also staffing jobs at the Environmental Protection Agency, Interior Department, Energy Department and the Treasury Department — reflecting the Kochs’ economic interest in reducing the size of government, lowering corporate taxes, loosening environmental regulations and opening up public land to oil and gas extraction.
        • The Kochs have already achieved the majority of goals contained in “Roadmap to Repeal” — a policy document published in January 2017 by Freedom Partners, a Koch group.

        Our list of Koch-tied officials is below.

        Judge orders independent monitor for immigrant facilities after children detail shocking conditions -- A federal judge has ordered an independent monitor to evaluate conditions in border facilities that house immigrant children, amid allegations of unsafe conditions and rampant abuse.U.S. District Judge Dolly Gee in Los Angeles said there was a serious “disconnect” between the Trump administration’s own assessment of facilities in Texas’ Rio Grande Valley and hundreds of pages of class action testimony detailing major problems, including abusive treatment, lack of adequate food and water, and unsanitary conditions.“It seems like there continue to be persistent problems,” Judge Gee said. “I need to appoint an independent monitor to give me an objective viewpoint about what is going on at the facilities.” Gee gave both sides until August 10 to agree on a proposed monitor. If they are unable to reach an agreement, both sides will give a suggestion to the judge and she will choose.Hundreds of sworn affidavits from children and parents detail inhumane treatment at various stops from processing by Border Patrol agents to transportation to contractor-run facilities.  “There is no privacy. It is dirty and they don’t clean it,” a Guatemalan boy named Erick, said of his initial days in custody near the border. “The room is always cold. The guards took my sweater.” He added that there was only one bathroom, which a security camera was constantly pointed at it.

        US immigration nightmare continues amid media blackout -- Over 570 immigrant children remain in detention centers and foster facilities throughout the United States weeks or months after the government separated them from their parents this past spring.Some 460 parents have already been deported without their children, many after being coerced into signing forms waiving their right to reunite with their sons or daughters. In many of these cases, the parents will never see their children again.The government has deemed hundreds of parents “ineligible” to reunite with their children on the grounds that they have criminal records. This deliberate mass theft of children by the government is among the most shameful events in US history.These crimes are being ignored by the corporate media. Since the beginning of August, the New York Times opinion page has featured eight op-ed pieces or editorial board statements relating to allegations of Trump’s ties to Russia or the #MeToo hysteria, but none about the conditions facing immigrants. The Washington Post has published seven opinion pieces or editorial board statements about Russia and #MeToo, and none about immigrants.The children languishing in detention are living a nightmare. On Wednesday, the American Immigration Lawyers Association confirmed a report that a child died of a respiratory illness shortly after leaving an Obama-era family detention center in Dilley, Texas. This week, reports revealed that guards at different Southwest Key immigrant foster/detention centers were arrested for raping and molesting detained children. One HIV-positive federal contractor forced oral sex and attempted to penetrate a number of boys detained at a facility in Mesa, Arizona. The victims were all unaccompanied children. In a separate case, a second federal contractor at a Southwest Key facility in Phoenix, Arizona slipped into children’s’ rooms and molested them.

        Immigrant Youth Shelters: “If You’re a Predator, It's a Gold Mine,” —… Using state public records laws, ProPublica has obtained police reports and call logs concerning more than 70 of the approximately 100 immigrant youth shelters run by the U.S. Health and Human Services department’s Office of Refugee Resettlement. While not a comprehensive assessment of the conditions at these shelters, the records challenge the Trump administration’s assertion that the shelters are safe havens for children. The reports document hundreds of allegations of sexual offenses, fights and missing children.The recently discontinued practice of separating children from their parents has thrust the youth shelters into the national spotlight. But, with little public scrutiny, they have long cared for thousands of immigrant children, most of them teenagers, although last year 17 percent were under 13. On any given day, the shelters in 17 states across the country house around 10,000 adolescents. The more than 1,000 pages of police reports and logs detail incidents dating back to the surge of unaccompanied minors from Central America in 2014 during the Obama administration. But immigrant advocates, psychologists and officials who formerly oversaw the shelters say the Trump administration’s harsh new policies have only increased pressures on the facilities, which often are hard-pressed to provide adequate staffing for kids who suffer from untold traumas and who now exist in a legal limbo that could shape the rest of their lives.  Reports collected by ProPublica so far show that in the past five years, police have responded to at least 125 calls reporting sex offenses at shelters that primarily serve immigrant children. That number doesn’t include another 200 such calls from more than a dozen shelters that also care for at-risk youth residing in the U.S. Call records for those facilities don’t distinguish which reports related to unaccompanied immigrants and which to other youth housed on the property.

        Trump plans to rescind work permits for spouses of immigrants on H-1B visas Barack Obama’s administration implemented a rule that granted work permits to certain immigrants on H4 visas. Known as H4EAD, the policy enabled the spouses of H-1B workers who were already awaiting green cards to apply for employment authorization. But now Donald Trump’s administration is expected to formally rescind the Obama-era rule – potentially upending the lives of tens of thousands of immigrants who took advantage of the H4EAD work permits. The proposed rules change, which was anticipated last month, but has not yet been announced, is part of the Trump administration’s efforts to reshape America’s immigration system. Advocates laboring to save the Obama-era policy say doing away with the rule could once again confine immigrant spouses, mostly women, at home and strip their families of a necessary second income.  Beneficiaries of the Obama-era guidance, such as Kavya Joseph, said the employment status brought financial security to their households and provided a sense of purpose. Joseph is one of thousands of advocates who have joined an online campaign, “SaveH4EAD”, to raise awareness around the issue in the hopes that the Trump administration might reverse course. Many are high-skilled workers who sacrificed their careers when their spouses were offered the chance to pursue a career in the US.

        Appeals court rules Trump can’t withhold funds from California ‘sanctuary’ cities --A federal appeals court decided Wednesday that the Trump administration may not withhold federal funds from California’s immigrant-friendly “sanctuary” cities and counties.The U.S. 9th Circuit Court of Appeals, in a 2-1 decision, upheld a district judge’s ruling in favor of San Francisco and Santa Clara County, which sued over the administration’s threats to withhold money to jurisdictions that have passed laws limiting local law enforcement cooperation with federal immigration authorities. The ruling was a blow to the Trump administration’s efforts to punish cities and states that fail to help enforce federal immigration law, a goal President Trump announced shortly after he was sworn in.The administration did not comment on whether it intended to appeal the decision. But the 9th Circuit handed Trump one victory. It removed a nationwide injunction against his directive, concluding there was not enough evidence presented in the case so far to support blocking it beyond California.Devin O’Malley, a spokesman for the U.S. Department of Justice, called the ruling a “a victory for criminal aliens in California, who can continue to commit crimes knowing that the state’s leadership will protect them from federal immigration officers.” O’Malley also declared that the removal of the nationwide injunction amounted to “another major victory for the rule of law.”

         Appeals Court Tosses Nationwide Injunction Against Sanctuary City Defunding - The 9th Circuit Court of Appeals ruled 2-1 on Wednesday that a San Francisco Judge went too far last April with a nationwide injunction against President Trump's January Executive Order, which would withhold funding from "sanctuary" cities and counties. The panel, however, agreed that Trump may not withhold funding from San Francisco or Santa Clara County for limiting their cooperation with immigration enforcement officials.  Majority on divided three-judge Ninth Circuit panel affirms grant of summary judgment invalidating the withholding of federal grants to sanctuary cities but vacates nationwide injunction: You can access today’s ruling of the U.S. Court of Appeals for the The panel (1) affirmed the district court’s grant of summary judgment in favor of the City and County of SanFrancisco and the County of Santa Clara in an action challenging Executive Order 13,768, “Enhancing PublicSafety in the Interior of the United States,” which directed the withholding of federal grants to so-called sanctuary jurisdictions; (2) vacated a nationwide injunction. -9th Circuit "Given the absence of specific findings underlying the nationwide application of the injunction, the panel vacated the nationwide injunction and remanded for reconsideration and further findings," the panel ruled.  While we agree that the district court was correct to enjoin the Administration from enforcing § 9(a) against the Counties, the present record is not sufficient to support a nationwide injunction. We therefore vacate the injunction and remand for careful consideration by the district court. Read the ruling below:

        Federal judge says Trump must fully restore DACA | TheHill: A federal judge ruled Friday that the Trump administration must fully restore the Deferred Action for Childhood Arrivals (DACA) program. In his 25-page opinion, Judge John Bates said the Trump White House had again failed to provide justification for its proposal to end the Obama-era program, under which nearly 800,000 people brought to the country illegally as children, known as "Dreamers," have received work permits and deferral from deportation. The judge also said in his opinion that he has agreed to delay his ruling to give the Trump administration 20 days "to determine whether it intends to appeal the Court’s decision and, if so, to seek a stay pending appeal." President Trump rescinded DACA in September, a decision Bates wrote in his opinion “was arbitrary and capricious” with legal judgment that was “inadequately explained.” Bates further wrote that the U.S. District Court for the District of Columbia holds that if the Trump administration wishes to rescind the program, or take any other action for that matter, it must “give a rational explanation for its decision.” Bates said his court reaffirms its conclusion that DACA’s rescission “was unlawful and must be set aside.” 

        Trump administration asks Supreme Court to vacate Obama-era internet rules (Reuters) - The Trump administration asked the U.S. Supreme Court on Friday to vacate a 2016 appeals court ruling that had upheld Obama era “net neutrality” rules that barred internet service providers from blocking, throttling or prioritizing content. The request was made even though the Federal Communications Commission voted along party lines to toss out the 2015 rules late last year, rendering the fight over their legality moot. In a filing to the Supreme Court, the Trump administration said the question for the court was “whether the now-superseded 2015 order was invalid because it exceeded the FCC’s statutory authority, was arbitrary and capricious, was promulgated without adequate public notice, or violated the First Amendment.” The FCC’s decision to repeal the 2015 net neutrality rules was widely considered a victory for internet service providers, or ISPs, like Verizon Communications Inc or Comcast Corp, over internet companies like Netflix Inc or Facebook Inc which depend on ISPs to carry their content to customers. 

        Sessions announces ‘religious liberty task force’   Attorney General Jeff Sessions announced Monday that the Department of Justice is creating a "religious liberty task force." Sessions said the task force, co-chaired by Associate Attorney General Jesse Panuccio and the assistant attorney general for the Justice Department's Office of Legal Policy, Beth Williams, will help the department fully implement the religious liberty guidance it issued last year.The guidance was a byproduct of President Trump’s executive order directing agencies to respect and protect religious liberty and political speech. Sessions said on Monday that the task force will “ensure all Justice Department components are upholding that guidance in the cases they bring and defend, the arguments they make in court, the policies and regulations they adopt, and how we conduct our operations.”The announcement came during the department’s religious liberty summit.Sessions said the cultural climate in this country — and in the West more generally — has become less hospitable to people of faith in recent years, and as a result many Americans have felt their freedom to practice their faith has been under attack. “We’ve seen nuns ordered to buy contraceptives. We’ve seen U.S. senators ask judicial and executive branch nominees about dogma—even though the Constitution explicitly forbids a religious test for public office. We’ve all seen the ordeal faced so bravely by Jack Phillips,” he said, referring to the Colorado baker who took his case to the Supreme Court after he was found to have violated the state’s anti-discrimination laws for refusing to make a cake for a same-sex wedding.

         FEMA personnel chief harassed women, hired some as possible sexual partners for male employees, agency’s leader says -- The personnel chief of the Federal Emergency Management Agency — who resigned just weeks ago — is under investigation after being accused of creating an atmosphere of widespread sexual harassment over years in which women were hired as possible sexual partners for male employees, the agency’s leader said Monday. The alleged harassment and other misconduct, revealed through a preliminary seven-month internal investigation, was a “systemic problem going on for years,” said FEMA Administrator William “Brock” Long. Some of the behavior could rise to the level of criminal activity, he said.. FEMA officials gave other details and confirmed that the individual under investigation, whose name was redacted from the report, is Corey Coleman, who led the personnel department from 2011 until his resignation in June. Online records show Coleman was a senior executive who was paid an annual salary of $177,150.In an interview, Long described a “toxic” environment in the human resources department under Coleman at FEMA headquarters. Starting in 2015, investigators said, Coleman hired many men who were friends and college fraternity brothers and women he met at bars and on online dating sites. He then promoted some of them to roles throughout the agency without going through proper federal hiring channels. Coleman then transferred some of the women in and out of departments, some to regional offices, so his friends could try to have sexual relationships with them, according to employees’ statements during interviews with investigators. “What we uncovered was a systemic problem going back years,” Long said. He said he has referred several of the cases to the Department of Homeland Security’s inspector general, who oversees FEMA, to investigate possible criminal sexual assault. Long said the problems extend beyond Coleman. The investigation is “not going to stop with him,” he said.

        An obscure federal law may give corporations immunity from lawsuits over terrorism - For MGM Resorts International, millions of dollars could hinge on a single question: Was the shooting massacre of 58 people at a concert in Las Vegas last year an act of terrorism? The killer, longtime gambler Steven Paddock, left few clues about his motive. But how the U.S. Department of Homeland Security or the federal courts answer the question could determine whether shooting survivors and families of the dead can sue the casino and hotel giant, which they say missed warning signs of his attack.In a novel legal move, MGM is arguing that the attack was terrorism, and that under a law passed by Congress in 2002, the company is immune from such lawsuits.If MGM is successful, it could open the door for more companies and public agencies to seek protection from lawsuits not just over clear-cut terrorist attacks with political agendas, but over mass shootings with no known motive.The Support Anti-terrorism by Fostering Effective Technologies Act — known as the SAFETY Act — is unfamiliar to most Americans.It was an obscure bit of tort reform that passed after the 9/11 terrorist attacks, tucked into the same package of federal anti-terrorism legislation that created the Department of Homeland Security.If the destruction of the World Trade Center towers in 2001 made Americans fear for their lives, corporations saw an additional threat from terrorism: legal liability.Getting sued for safety lapses after a terrorist attack could be ruinous for any company.But policymakers saw an additional problem. If companies are on the hook for negligence lawsuits after acts of terrorism, it might prompt those companies to decide it’s not worth it to provide security — say, X-ray machines or surveillance cameras — for places that might be targets of terrorism, like airports.That’s where the SAFETY Act came in. The law allowed companies to apply to the Department of Homeland Security to seek verification that their security products and services were useful. In exchange, Homeland Security would provide certification under the law, which would serve as a powerful immunity claim in court in case of a terrorist attack.

        Emoluments Decision No Way Back Machine --Jerri-lynn Scofield -  There has been much sound and fury following the July 25 federal district court decision to allow a case against Trump to proceed for an alleged violation of the United States Constitution’s emoluments clause, by his continued ownership of the Trump International Hotel in Washington, D.C.As much as resisters might like to see a way back machine– that would see Trump deposed, and another president installed in his place– alas, last week’s decision allowing an emoluments case to proceed won’t proved the relief you’re looking for.Nor is the lawsuit– in the unlikely event  it proceeds to an anti-Trump conclusion that is sustained on appeal– going to amount to much in legal terms.If, however, the Democrats win the House in 2018, this case could assume greater political significance. I have written about the U.S. Constitution’s Emoluments clause before, so I refer interested readers to these posts and will not recap that discussion here (see US Constitution’s Emoluments Clause: a Nothingburger for Trump ; Law Profs Sue Trump, Alleging Violation of the Emoluments Clause; Senate Democrats Discuss Doubling Down on Losing Strategy of Suing Trump on Emoluments; and Party On! Congressional Democrats Pile On to Another Bogus Emoluments Clause Lawsuit). Article 1, Section 9 of that document states that “No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.” This clause, on its face, appears to present  problems for Trump, given his extensive business empire, which he has not divested himself of during his presidency. One part of that empire is his ownership of the Trump International Hotel in Washington, D.C., which is the focus of the lawsuit discussed here. Yet the main obstacle, as I noted in that Nothingburger post, remains:  Just because something’s unconstitutional, doesn’t mean that any such unconstitutional activity will necessarily be prevented, precluded, or punished.

        Giuliani Unloads; Talks Tampered Cohen Tapes And "Witch Hunt" In Wide-Ranging Sunday Interviews -- President Trump's attorney Rudy Giuliani went on the defense Sunday morning, telling Face the Nation that former Trump attorney Michael Cohen made at least 183 recordings of separate conversations, among which the president is "discussed at any length" on 11 or 12, and only recorded on one.  CNN aired that conversation between Trump and Cohen, in which they discuss the purchase of rights to a Playboy model's claim that she and Trump had an affair. Cohen's attorney, longtime Clinton operative Lanny Davis, leaked it.  Giuliani now says that the tape was altered, telling Fox that two experts and retired FBI agents who have analyzed the tape believe it was "played" with. Tampered tapes? President Trump’s lawyer, Rudy Giuliani says expert analysis shows ‘someone messed’ with Cohen tapes— FOX & friends (@foxandfriends) July 29, 2018Avowed Democrat Alan Dershowitz, a recent Trump defender, said that Giuliani is doing the right thing, and that any good lawyer would conduct a forensic examination of the tape.  is digging through Trump's tweets to make an obstruction case, Giuliani told Face the Nation on Sunday that President Trump may not have to testify at all because his tweets lay out his defense.  "A lot of his tweets have been very helpful. The reason he may not have to testify is that he’s laid out his defense very clearly," Giuliani said, adding ""Obstruction by tweet is not something I think works real well."

        Top Trump Donor Agreed To Pay Cohen $10 Million For "Help With Funding": WSJ - Right before the feds raided former Trump attorney Michael Cohen in early April, a top Trump donor offered to pay Cohen $10 million plus a retainer fee in exchange for help securing funding for a nuclear-power project - including a $5 billion loan from the US Government, claims the Wall Street Journal, citing people familiar with the matter.  Under the contract, Mr. Haney agreed to pay Mr. Cohen a monthly retainer in addition to the $10 million success fee if he could help obtain the funding, including approval of the full amount of the project’s application under a U.S. Department of Energy loan program, the people familiar with the deal said. –WSJ Before we get too far down the rabbit hole, it should be noted that Cohen never actually entered into the deal according to the donor's attorney, while application with the Department of Energy (DOE) is still pending. The Journal also provides no evidence of the contract, only anonymous sources, and there is also no suggestion that President Trump knew about the alleged offer from the donor - who contributed $1 million to Trump's inaugural fund, yet primarily backed Democrats before the Cohen arrangement. The donor, Franklin L. Haney, gave the contract to Trump attorney Michael Cohen in early April to assist his efforts to complete a pair of unfinished nuclear reactors in Alabama, known as the Bellefonte Nuclear Power Plant, these people said.Had he been paid the success fee, Mr. Cohen’s deal with Mr. Haney could have been among the most lucrative of the known consulting agreements he secured after Mr. Trump’s election by emphasizing his personal relationship with the president, according to people familiar with his pitches. –WSJ According to the DOE, Cohen hasn't communicated with Energy Secretary Rick Perry about the project, however he did make "several calls to officials at the Energy Department in the spring" to inquire about the process for securing the loan - including what could be done to speed it up, according to the Journal.

        Mueller Wants To Ask Trump About Obstruction Of Justice -- Amid speculation that Special Counsel Robert Mueller's investigation is approaching its end and just hours after Trump told Jeff Sessions on Twitter to end the Mueller probe "right now", ABC reports that the Mueller wants to ask President Donald Trump about obstruction of justice, citing sources close to the White House. ABC also notes that the president learned "within the last day" that the special counsel will limit the scope of questioning and, despite Rudy Giuliani's vehement opposition, would like to ask questions both orally and written for the President to respond to.The ABC sources report that the genesis of Trump's early morning tweet storm was learning of Mueller's request. Trump took to twitter in one of his strongest attacks against the federal probe into Russian meddling in the 2016 election, saying:"This is a terrible situation and Attorney General Jeff Sessions should stop this Rigged Witch Hunt right now, before it continues to stain our country any further. Bob Mueller is totally conflicted, and his 17 Angry Democrats that are doing his dirty work are a disgrace to USA!"..This is a terrible situation and Attorney General Jeff Sessions should stop this Rigged Witch Hunt right now, before it continues to stain our country any further. Bob Mueller is totally conflicted, and his 17 Angry Democrats that are doing his dirty work are a disgrace to USA!— Donald J. Trump (@realDonaldTrump) August 1, 2018It is unlikely that the Trump team will agree to Mueller's request. Negotiations over the scope of a potential presidential interview with the special counsel have gone on for months, through several different iterations of the Trump legal team.Rudy Giuliani, the President's current lead attorney, told ABC News a week ago that his team had submitted a response to Mueller asking to limit the scope of an interview with Trump especially as it relates to obstruction of justice. "We have a list of questions that are fairly narrowed but we are waiting on the special counsel's response," Giuliani said..

        Flynn, Comey, and Mueller: What Trump Knew and When He Knew It -- Previously undisclosed evidence in the possession of Special Counsel Robert Mueller—including highly confidential White House records and testimony by some of President Trump’s own top aides—provides some of the strongest evidence to date implicating the president of the United States in an obstruction of justice. Several people who have reviewed a portion of this evidence say that, based on what they know, they believe it is now all but inevitable that the special counsel will complete a confidential report presenting evidence that President Trump violated the law. Deputy Attorney General Rod Rosenstein, who oversees the special counsel’s work, would then decide on turning over that report to Congress for the House of Representatives to consider whether to instigate impeachment proceedings.The central incident in the case that the president obstructed justice was provided by former FBI Director James B. Comey, who testified that Trump pressed Comey, in a private Oval Office meeting on February 14, 2017, to shut down an FBI criminal investigation of Trump’s former national security adviser, Lt. Gen. Michael Flynn. “I hope you can see your way clear to letting this go, to letting Flynn go,” Comey has testified the president told him. In an effort to convince Mueller that President Trump did not obstruct justice, the president’s attorneys have argued that the president could not have broken the law because the president did not know that Flynn was under criminal investigation when he pressured Comey to go easy on Flynn. In a confidential January 29 letter to the special counsel first reported by The New York Times, two of the president’s attorneys, John Dowd (who no longer represents Trump) and Jay Sekulow, maintained that the president did not obstruct justice because, even though Flynn had been questioned by the FBI, Trump believed that the FBI investigation was over, and that Flynn had been told that he’d been cleared.

        Liberal Hero Chomsky Admits "Israeli Intervention In US Elections Overwhelms Anything Russia Has Done"As the mainstream media (and even the leftist politicians) begin to back quietly away from the "collusion" narrative, they remain increasingly focused on Russia's "evil" efforts at "meddling" in the US election and "interfering with our democracy," or some such hysterical phrase. And that is what makes the comments by mainstay of world-renowned political dissident and liberal-thinking hero Noam Chomsky's comments in the following interview with Democracy Now so 'awkward' for the Trump-hating members of, take, say, the huge issue of interference in our pristine elections. Did the Russians interfere in our elections? An issue of overwhelming concern in the media. I mean, in most of the world, that’s almost a joke.First of all, if you’re interested in foreign interference in our elections, whatever the Russians may have done barely counts or weighs in the balance as compared with what another state does, openly, brazenly and with enormous support.Israeli intervention in U.S. elections vastly overwhelms anything the Russians may have done...I mean, even to the point where the prime minister of Israel, Netanyahu, goes dire ctly to Congress, without even informing the president, and speaks to Congress, with overwhelming applause, to try to undermine the president’s policies - what happened with Obama and Netanyahu in 2015....

        Facebook data privacy scandal: A cheat sheet --The Facebook data privacy scandal centers around the collection of personally identifiable information of "up to 87 million people" by the political consulting and strategic communication firm Cambridge Analytica. That company—and others—were able to gain access to personal data of Facebook users due to the confluence of a variety of factors, broadly including inadequate safeguards against companies engaging in data harvesting, little to no oversight of developers by Facebook, developer abuse of the Facebook API, and users agreeing to overly broad terms and conditions. In the case of Cambridge Analytica, the company was able to harvest personally identifiable information through a personality quiz app called thisisyourdigitiallife, based on the OCEAN personality model. Information gathered via this app is useful in building a "psychographic" profile of users (the OCEAN acronym stands for openness, conscientiousness, extraversion, agreeableness, and neuroticism). Adding the app to your Facebook account to take the quiz gives the creator of the app access to profile information and user history for the user taking the quiz, as well as all of the friends that user has on Facebook. This data includes all of the items that users and their friends have liked on Facebook.  Researchers associated with Cambridge University claimed in a paper that it "can be used to automatically and accurately predict a range of highly sensitive personal attributes including: sexual orientation, ethnicity, religious and political views, personality traits, intelligence, happiness, use of addictive substances, parental separation, age, and gender," with a model developed by the researchers that uses a combination of dimensionality reduction and logistic/linear regression to infer this information about users. The model—according to the researchers—is effective due to the relationship of likes to a given attribute.

        ‘We Are Not Bots’: Facebook Censors U.S. Activists After Falsely Claiming They ‘Unwittingly’ Planned Protest - Facebook on Tuesday announced its banning of eight pages, 17 profiles, and seven Instagram accounts that engaged in what it described as online political activity that was both “inauthentic” and ultimately an “abuse” of its platform. While the activity was not attributed to anybody specific, the implication was clear, and at several points, the company made comparisons to a Russian organization U.S. authorities accused of trying to influence U.S. voters during the 2016 election. But at least one of the pages deleted this week was run by a group of real Americans who say they’ve been unfairly targeted by Facebook and falsely accused of being “unwittingly” duped into helping plan a protest scheduled to take place in Washington, DC, less than two weeks from today. Facebook, for its part, says the page advertising the event was founded by a group whose administrators include some who have been flagged as a potential threats—entities, it says, who are likely trying to influence domestic politics from abroad, as Russian trolls had done two years ago. The real activists, however, say that Facebook, in this case, overshot its mark, overzealous perhaps in its attempt to placate a hostile Congress, while holding fast amid a week of ugly financial misfortune.The question raised by the activists, whose organizing efforts became collateral damage of Tuesday’s takedowns, is this: Who will pay the higher price for Facebook’s hypervigilance, seedy overseas actors working to rattle U.S. voters or politically engaged Americans who are, to their own alarm, heavily reliant on the data-sucking social media giant to coordinate their legitimate protest activity? “We are not bots. We are not influenced by any Russians. We are local organizers,” said Andrew Batcher, an organizer with Shut It Down DC, a group mobilizing against white supremacists in the nation’s capital. “It’s ridiculous when you know who you are and what you’re doing and you’re still accused of being a Russian puppet.”

        The Bizarre Facebook Path to Corporate Fascism  --Black Agenda Report --Facebook has assumed additional political police powers, disrupting a planned counter-demonstration against white supremacists, set for August 12th in Washington, on the grounds that it was initiated and inspired by “Russians” as part of a Kremlin campaign to “sow dissention” in the U.S. The Facebook intervention is a qualitative escalation of the McCarthyite offensive launched by the Democrat Party and elements of the national security state, and backed by most of the corporate media, initially to blame Hillary Clinton’s 2016 defeat on “collusion” between Wikileaks, “the Russians” and the Trump campaign to steal and publicize embarrassing Clinton campaign emails. After failing to produce one shred of hard evidence to support their conspiracy theory, the anti-Russia hysteria mongers switched gears, focusing on the alleged purchase of about $100,000 in Facebook ads by the Internet Research Agency (IRA), a St. Petersburg-based Russian company, over a multi-year period. The problem was, most of the ads had no direct connection to the presidential contest, or were posted after the election was over, and many had no political content, at all. The messages were all over the place, politically, with the alleged Russian operatives posing as Christian activists, pro- and anti-immigration activists, and supporters of the Black Lives Matter Movement. Special prosecutor Robert Mueller was forced to flip the script, indicting 13 Russiansfor promoting general “discord” and undermining “public confidence in democracy” in the United States – thus creating a political crime that has not previously been codified in the United States.

        Google Struggles to Contain Employee Uproar Over China Censorship Plans - Google bosses were scrambling to contain leaks and internal anger on Wednesday after the company’s confidential plan to launch a censored version of its search engine in China was revealed by The Intercept.Just a few hundred of Google’s massive 88,000-strong workforce had been briefed on the project prior to the revelations, which triggered a wave of disquiet that spread through the internet giant’s offices across the world.Company managers responded by swiftly trying to shut down employees’ access to any documents that contained information about the China censorship project, according to Google insiders who witnessed the backlash.“Everyone’s access to documents got turned off, and is being turned on [on a] document-by-document basis,” said one source. “There’s been total radio silence from leadership, which is making a lot of people upset and scared. … Our internal meme site and Google Plus are full of talk, and people are a.n.g.r.y.”On a message board forum for Google employees, one staff member posted a link to The Intercept’s story alongside a note saying that they and two other members of their team had been asked to work on the Chinese censorship project, code-named Dragonfly. “In my opinion it is just as bad as the leak mentions,” the employee wrote, adding that they had asked their manager to be removed from the project because they were uncomfortable with it. Another member of the team, the employee said, had decided to quit Google in large part due to concerns about Dragonfly.

        Paul Manafort trial Day 2: Witnesses describe extravagant clothing purchases, home remodels, lavish cars paid with wire transfers --  Paul Manafort, President Trump’s onetime campaign chairman, is on trial in federal court in Alexandria on bank and tax fraud charges. Prosecutors allege he failed to pay taxes on millions he made from his work for a Russia-friendly Ukrainian political party, then lied to get loans when the cash stopped coming in. The case is being prosecuted by the special counsel investigating Russian interference in the 2016 U.S. presidential election. Here is what happened on the second day of the proceedings. President Trump weighed in on the trial for the first time, asking his Twitter followers if Manafort was being “treated worse” than notorious gangster Al Capone. Witnesses described how Manafort paid for a life of luxury — spending hundreds of thousands of dollars on suits and home renovations — via wire transfers from foreign bank accounts. The judge repeatedly warned prosecutors not to dwell on the extravagance of the purchases Manafort made. Prosecutors suggested they might not call Manafort’s former business partner, Richard Gates, as a witness. They also revealed they are ahead of schedule and could rest their case next week.

        Prosecutors used Paul Manafort’s bookkeeper to begin making a detailed case for the most substantial charges against him — On day three of the high-stakes criminal trial against Paul Manafort, prosecutors used Manafort's bookkeeper to begin laying out a case for the most substantial charges against him.Manafort, the former chairman of Donald Trump's campaign, is a defendant in two separate criminal indictments from the special counsel Robert Mueller, who is investigating Russian interference in the 2016 presidential election and whether members of the Trump campaign colluded with Moscow to tilt the race in Trump's favor.The indictment at the center of this week's trial was brought in Virginia and charges Manafort with financial crimes related to tax and bank fraud, as well as conspiracy, failure to register as a foreign agent, and obstruction of justice.Jury selection and opening statements were made Tuesday, and on Wednesday the jury heard testimony about Manafort's extravagant spending.Much of Thursday was spent hearing testimony from one key person: Heather Washkuhn, Manafort's longtime bookkeeper. Given her day-to-day involvement in detailing Manafort's financial dealings, Washkuhn is one of the most important witnesses for the prosecution. Washkuhn described Manafort on Thursday as "very knowledgeable" and "very detail oriented," adding that "he approved every penny of everything we paid." The defense has made clear since the trial started that it plans to pin the blame on Rick Gates, Manafort's longtime business partner who was a codefendant in the indictment until he struck a plea deal with prosecutors in February. The prosecution is seeking to prove that Manafort was the big fish and that Gates was merely an accomplice. For that reason, Washkuhn's assertion that Manafort "approved every penny of everything we paid" was critical to Mueller's case.

        A republican citizenry’s greatest, last-resort duty is to kill those seeking to impose tyranny by mike - As this week’s end, it seems likely that it is quite near time for killing those involved in the multiple and clearly delineated attempts to stage a coup d’état against the legitimately elected Trump government and thereby kill our republic.  This week saw a significant and quickening advance toward the moment when those millions of well-armed citizens who voted for Trump, and who have been abused or wounded by Democrats, their Antifa-thugs, and their thug-civil servants for exercising their franchise to elect Trump, cannot be, in good conscience, patient for much longer. Fortunately, they have in hand a long and very precise list of the names and photographs of those who hate and threaten them, their families, their way-of-life, their liberty, their livelihoods and their republic. No self-respecting and determined-to-remain-independent citizenry can let themselves forever be held hostage by thug-civil-servants like Strzok, Comey, McCabe, Page, and Rosenstein; worshipers of tyranny, like the Democratic members of Congress, the Clintons, the FBI, and the Obamas; apparent traitors like Brennan, Hayden, and Clapper; all of the mainstream media; and the tens of thousands of government-admitted-and-protected, violent, criminal, and illegal immigrants. American patriots have so far, praise God, been remarkably disciplined in not responding to tyranny and violence with violence. For now they must remain so, armed but steady. But the time for such patience is fast slipping away; indeed, that patience is quickly becoming an obviously rank and self-destructive foolishness. If Trump does not act soon to erase the above noted tyranny and tyrants, the armed citizenry must step in and eliminate them.

        Reporters, Celebs Call Trump-Supporters "Nazis", "KKK", Want Them "Euthanized" After Tampa Rally --Thousands of supporters packed the arena to hear Trump hammer his critics and tout his administration’s accomplishments. There was plenty of hecklers, comedy and chants about Hillary and 2020. Trump stopped to pick on one of his favorite targets, the media, approximately half-way through the speech. The president heckled the press in the press pen as “fake news” and the audience roared, chanting “Fake News” and “CNN Sucks” at the reporters.One of the favorite targets of the audience was CNN’s Jim Acosta, who tweeted multiple videos of the crowd mocking him before and after the rally. Acosta blamed Trump for the vitriol, saying “I’m very worried that the hostility whipped up by Trump and some in conservative media will result in somebody getting hurt.”  The tweet showed Trump supporters jeering at Acosta after the rally.Just a sample of the sad scene we faced at the Trump rally in Tampa. I’m very worried that the hostility whipped up by Trump and some in conservative media will result in somebody getting hurt. We should not treat our fellow Americans this way. The press is not the enemy.— Jim Acosta (@Acosta) August 1, 2018The tweet quickly went viral with many celebrities and journalists insulting the supporters. Celebrated composer Christopher O’Riley, who is a regular on PBS and NPR, literally called for the enforced slaughter of Trump supporters. “Calling them Deplorables is euphemizing them. Maybe better to euthanize?” the verified twitter user quipped.

        The Origins Of Our Second Civil War -- -- How, when, and why has the United States now arrived at the brink of a veritable civil war? Almost every cultural and social institution — universities, the public schools, the NFL, the Oscars, the Tonys, the Grammys, late-night television, public restaurants, coffee shops, movies, TV, stand-up comedy — has been not just politicized but also weaponized. Donald Trump’s election was not so much a catalyst for the divide as a manifestation and amplification of the existing schism. We are now nearing a point comparable to 1860, and perhaps past 1968. Left–Right factionalism is increasingly fueled by geography — always history’s force multiplier of civil strife. Red and blue states ensure that locale magnifies differences that were mostly manageable during the administrations of Ford, Carter, Reagan, the Bushes, and Clinton. What has caused the United States to split apart so rapidly?   Globalization created new iconic billionaires in high tech and finance, and their subsidiaries of coastal elites, while hollowing out the muscular jobs largely in the American interior. Ideologies and apologies accumulated to justify the new divide. In a reversal of cause and effect, losers, crazies, clingers, American “East Germans,” and deplorables themselves were blamed for driving industries out of their neighborhoods (as if the characters out of Duck Dynasty or Ax Menturned off potential employers). Or, more charitably to the elites, the muscular classes were too racist, xenophobic, or dense to get with the globalist agenda, and deserved the ostracism and isolation they suffered from the new “world is flat” community. London and New York shared far more cultural affinities than did New York and Salt Lake City. Meanwhile, the naturally progressive, more enlightened, and certainly cooler and hipper transcended their parents’ parochialism and therefore plugged in properly to the global project. And they felt that they were rightly compensated for both their talent and their ideological commitment to building a better post-American, globalized world. 

        Russian “Agent” And A GOP Operator Left A Trail Of Cash, Documents Reveal -- A $45,000 payment to an undisclosed law firm. A cash withdrawal for $14,000. Almost $90,000 sent to or from a Russian bank. These and other bank transactions totaling nearly $300,000, none of which have been made public, offer the first detailed look at how an accused foreign agent and a Republican operative financed what prosecutors say was a Russian campaign to influence American politics. Anti-fraud investigators at Wells Fargo flagged the transactions — by Paul Erickson, a conservative consultant from South Dakota, and Maria Butina, who is in jail awaiting trial on charges of secretly acting as a Russian agent — as “suspicious,” noting in some cases that they could find no “apparent economic, business, or lawful purpose” to explain them. Now FBI counterintelligence officers say the duo’s banking activity could provide a road map of back channels to powerful American entities such as the National Rifle Association, and information about the Kremlin’s attempt to sway the 2016 US presidential election. Cash withdrawals, most of them from Erickson’s personal and business accounts, make up $107,000 of the financial transactions now being investigated. The largest of those withdrawals — $14,000 — occurred in December 2015, when Erickson reportedly traveled to Moscow as part of an NRA delegation. The visit was sponsored by a Russian gun rights organization started by Butina, federal authorities say. The duo also deposited about $90,000 in cash in their accounts, which has made it difficult for investigators to determine the source or purpose of the funds.

         Alleged Russian agent’s infiltration of GOP circles anything but subtle - CNN - As far as spy craft goes, Maria Butina's skills didn't seem particularly impressive.The alleged covert Russian agent liked to communicate via Twitter messages and WhatsApp. Her overly flirtatious approach left men wondering what she was truly after. She tended to brag about her ties to Russian intelligence when she was intoxicated, according to people familiar with the situation."She's like a Scud missile. There's no precision," said CIA veteran Robert Baer, a CNN intelligence and security analyst.Butina has pleaded not guilty to charges of conspiracy and acting as a foreign agent in the US. Her lawyer, Robert Driscoll, told CNN Wednesday that she wouldn't take a deal from prosecutors if it meant admitting she was a spy.  "If you're not an agent for a foreign government, you can't lie and say you are in order to get rid of this," Driscoll said.

        JPMorgan’s Creepy Patent: Why You Should Be Worried -- Pam Martens - Less than seven months after a unit of JPMorgan Chase settled with the Federal Energy Regulatory Commission (FERC) for $410 million in penalties and disgorgement over allegations that it had manipulated electricity markets in California and the Midwest, one of its employees, Shawn Wesley Alexander, submitted a really creepy patent request to the U.S. Patent and Trademark Office on February 10, 2014.  The patent might not be creepy for the owner of a video game arcade but JPMorgan Chase is the largest bank in America – with a global footprint and an unprecedented three Federal felony counts to which it has pleaded guilty in the past four years. The first two counts came in 2014 for looking the other way at Bernie Madoff’s Ponzi scheme as the bank watched hundreds of billions of dollars come and go through his business account at the bank, but never for the payment of securities he was supposed to be trading for clients. The next felony count came in 2015 for being one of multiple banks engaged in rigging the foreign exchange market.  The patent was approved on January 16 of this year under the title of “Dynamic Game Deployment.” Under “Background” for the patent, it says this: “Interactive games or challenges can be an effective tool to motivate/incentivize users, employees, etc., to achieve various goals or objectives.” Under “Description” we are offered this:“It can be appreciated that virtual games/challenges (such as those implemented on electronic devices, e.g., computers, mobile devices, etc.) can be effective in motivating/incentivizing users to achieve various goals/objectives. However, existing technologies do not enable the deployment of such games/challenges in a manner that can effectively incentivize users across organizations and/or enable organization administrators to dynamically configure/adjust aspects of such games/challenges based on various changes that may occur over the course of such game(s). “Accordingly, as described herein, a gamification platform is provided that can enable the deployment of multiple games/challenges across multiple users and/or an entire organization, population, etc. Such a platform can deploy multiple games to various users, and receive various interactions from such users in relation to the various deployed games. As described herein, such interactions (reflecting the various ways in which such users interact with and/or progress within various games) can be analyzed and various aspects of such games can be adjusted/configured based on such analysis (e.g., by providing dynamic notifications to the user suggesting/encouraging a particular action/operation.”

        Amex to review allegations that it misled small-business customers - American Express plans to conduct a review of its foreign-exchange transactions following a news report that said the firm routinely and without notification charged higher rates than it initially quoted to small-business customers.“We will be conducting a review with an external party in order to determine whether all of our standards are being met,” Amex spokeswoman Marina Norville said in a statement. “If we find that we fell short of the mark, we will fix the problems and take appropriate actions to make sure it doesn’t recur.”The Wall Street Journal reported Monday that the New York-based credit card issuer used offers of low currency-exchange rates to attract customers, but later charged higher prices that generated larger commissions for salespeople.Small and mid-sized customers were frequently targeted, according to the article, which relied on the accounts of anonymous current and former Amex employees.The foreign exchange international payments business at American Express accounts for less than half of one percentage point of the firm’s total revenue, according to the company.Norville said that Amex takes seriously the allegations described in the article. At the same time, she said the company believes that its customers are being treated fairly.“We have training, control and compliance oversight and believe that our transactions are completed and reported in a fair and transparent manner at the rates which the client has authorized,” she said.

        Resurgent payments fraud heightens ID challenge for banks -  Verifying identities continues to be a tricky proposition for banks as cybercriminals diversify and increase their attacks — especially when it comes to wire transactions.Payments fraud hit a record high in 2017, with 78% of all organizations affected, according to a report from the Association of Financial Professionals and J.P. Morgan. Wire fraud was the second-most prevalent in that category (check fraud was No. 1).Wire fraud losses are averaging about $63,000 per incident and can run as high as $1 million dollars, according to the security blog“It’s really becoming a huge issue for banks across many of their channels,” said Thomas Cronkright, president and CEO of the fintech firm CertifID, which provides digital security services. “And in direct channels in particular, when they are providing loans for collateral-based lending, the challenge is they are funding to a third party. So how do you trust that the wiring information has been received from the third party is accurate?”Cronkright said over the past 18 months this has become a particular issue in real estate transactions; in fact Cronkright — who owns a title company — was a victim of such fraud and lost $180,000, which spurred him to create CertifID. Here's a typical example of how this type of fraud can occur: A title officer responds to a phishing lure that looks legitimate, and then unknowingly gives up credentials to an online portal. The fraudster can then monitor accounts, sometime for up to 180 days, “to get the lay of the land, a full idea of the deal flow, and see how all the parties communicate. Then they’re ready to strike,” Cronkright said.At that point, the fraudster will send fake wiring information to the bank from a communication that looks like it is coming from a title company, or a consumer, that redirects the loan amount to the criminals’ bank account.   The FBI last month issued a public service announcement that the real estate sector has been “heavily targeted” recently by business email compromise scams.  “The scam continues to grow and evolve, targeting small, medium and large business and personal transactions,” the announcement said. ”Between December 2016 and May 2018, there was a 136% increase in identified global exposed losses.”

        Bankers lobby for 11th-hour changes to CECL standard -- Marching orders for a new accounting standard for expected loan losses remain unclear just 18 months before publicly traded banks will have to comply with it. Banks and credit unions, in correspondence to banking regulators and the Financial Accounting Standards Board, continue to press for major changes to how capital will be measured under the current expected credit loss standard, or CECL. While a plan by banking regulators to phase in adverse CECL-related capital effects over three years has been widely backed by bankers, several institutions and trade groups sent comment letters earlier this month seeking even more leeway. The American Bankers Association and the Independent Community Bankers of America want, at minimum, a five-year phase-in, with the ABA pressing for an indefinite adjustment “until a long-term recalibration of the regulatory capital framework can be completed.” Bankers are weighing in, too. Paul Burdiss, the chief financial officer at Zions Bancorp., suggested counting the CECL loan-loss allowance as Tier 1 capital. Scott Blackley, Capital One's CFO, would like to see losses forecast during a loan’s first year reflected in the provision, while accounting for any losses expected after that as accumulated other comprehensive income. Beyond accounting adjustments, bankers want a quantitative impact study conducted to gauge CECL’s long-term impact on loan-loss reserves, capital and lending. While the FASB said efforts continue to make the CECL transition as painless as possible, it declined to discuss the banker letters. “The FASB has been working closely with both regulators and financial institutions to ensure a smooth and effective implementation of the credit losses standard,” spokesperson Christine Klimek said in an email to American Banker. “We will continue this work through and beyond the standard’s effective dates.”

        House Republicans ask Fed to lower capital requirements for megabanks -- A group of 29 Republicans on the House Financial Services Committee — including some who could chair the panel next year — have signed a letter asking the Federal Reserve to “recalibrate” a capital surcharge for the biggest and most systemically significant banks. The July 27 letter, obtained by American Banker, implored Federal Reserve Vice Chairman for Supervision Randal Quarles to reconsider the Fed’s capital surcharge for global systemically important banks, or G-SIBs. The lawmakers argued that the surcharge goes beyond the international minimum requirements and is no longer necessary in light of other post-crisis regulatory changes. “We are concerned that the surcharge has become duplicative of other post-crisis regulations,” the letter said. “As a result, there is great concern that the surcharge calculation, as currently constructed, is putting unwarranted capital burdens on U.S. banks. “We believe it is imperative that the Federal Reserve recalibrate the surcharge now,” the letter continues. “Doing so would promote the economic growth and bring efficiencies to the post-crisis regulatory framework.”

        ‘Too big to fail’ is alive and kicking | American Banker  -- “Too big to fail” financial firms, those that would crash the entire financial system and global economy if they failed, were at the core of causing and spreading the financial crash of 2008. That was the worst meltdown since the Great Crash of 1929 and caused the worst economy since the Great Depression of the 1930s. A second Great Depression was only avoided due to unprecedented and incredibly costly government and taxpayer bailouts for those “too big to fail” global financial giants like JP Morgan Chase, Citigroup, Bank of America, Goldman Sachs, Morgan Stanley and many others. While most people think of the $700 billion Troubled Asset Relief Program when they think of bailouts, that was only the tip of the bailout iceberg, which totaled in the trillions. Worse, the 2008 financial crisis caused massive economic destruction across the country in lost jobs, homes, savings and so much more. That is going to cost America more than $20 trillion in lost GDP, which, of course, doesn’t include the political and social costs, which also continue to reverberate to this day.While steps have been taken to mitigate the harms megabanks and other enormous financial institutions can cause, that work is quickly being unwound by the current administration, putting the country at risk for another crash like the one we saw just a decade ago. Change under the guise of "reform" is now moving in the wrong direction.  The Dodd-Frank Act, the 2010 post-crisis response from a Democratic Congress and the Obama administration, had three primary goals. First, prevent such a horrific financial crash from happening again, primarily by regulating too-big-to-fail financial firms so that they could fail without catastrophic consequences and bailouts. Second, protect consumers and investors from financial predators and scams. Third, refocus finance away from high risk, socially useless gambling and back to the business of lending to the real economy, helping it grow, create jobs and prosperity, which is why finance is supported by taxpayers and the government in the first place.

        War over Dodd-Frank is far from over | American Banker --Over the last hundred years, a number of flawed laws passed in the wake of major crises have subsequently been reformed decades later through a slow but steady war of ideas.  In fact, it’s often the case that laws intended to villainize the banking industry, like the Glass-Steagall Act, end up supporting the industry. Glass-Steagall long helped to protect bankers from competition by insurers and stock brokers, and vice versa. Much like that law, Dodd-Frank has been cited by large banks today as protecting them from competition by smaller banks. Yet Glass-Steagall’s artificial separation of banking and commerce wasn’t reformed overnight — it took another 70 years for the passage of the Gramm-Leach-Bliley Act to remove those walls. And this came after more than a decade of exemptions by bank regulators. What’s more, Gramm-Leach-Bliley reflected over a decade of bills that passed the House, but not the Senate, developing ideas subsequently included in the law. Fast forward to today and a similar trend can be seen. The Choice Act has won the support of Republican committee members and a majority in the House, even though it did not gain traction in the Senate.At the same time, Congress has made great strides with a series of smaller reforms, including the multiple iterations of “JOBS Act” bills and the recent small and regional bank reforms reflected in the regulatory relief package that passed Congress this spring. But that doesn’t mean the Choice Act, or its fundamental principles, are going away. What many commenters don't appreciate is that the short-term focus of these reforms and the long-term focus of the Choice Act are not in competition. Believing otherwise is simply shortsighted. The two perspectives — pursuing short-term initiatives and the bigger structural reforms of the Choice Act — merely reflect a difference of short-term tactics on one hand, and long-term, endgame strategy on the other.

        Warren, Brown, Merkley call on regulators to release Volcker Rule enforcement data —Three Democratic Senators are calling on federal regulators to release data and metrics to show the impact that the Volcker Rule has had on banks’ activity. Sens. Elizabeth Warren of Massachusetts, Sherrod Brown of Ohio and Jeff Merkley of Oregon said improving transparency around how the Volcker Rule is enforced would be of the public interest given the “need to understand the impact of the Volcker Rule in light” of changes the regulators have proposed surrounding the rule. “To that end, we respectfully but urgently request that you share with Congress quantitative data and metrics demonstrating banks’ activities under the Volcker Rule, along with the agencies’ standards used to demonstrate compliance, the penalties for non-compliance, and banks’ success or failure at achieving compliance,” the senators said in a letter to the heads of the Federal Reserve, Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., the Commodity Futures Trading Commissions and the Securities and Exchange Commission. “This should include the seven factors that banks are required to report to the agencies for each trading desk, along with a description of how frequently examiners at the agencies have used the quantitative metrics to date, including how metrics are used to evaluate compliance with the Volcker Rule,” the senators added. 

        Cheat sheet: How the Fed will revamp regional bank regulation -- With the passage of the Senate’s regulatory relief bill in May, Federal Reserve watchers have been awaiting additional details on how the agency would apply enhanced prudential standards on banks with assets of $100 billion to $250 billion.They got several tantalizing clues in July when Federal Reserve Vice Chairman of Supervision Randal Quarles delivered a surprise speech outlining the agency’s thinking, suggesting broad rollbacks of requirements for resolution plans, changes to stress testing requirements and initial criteria for how banks in that range will be assessed for systemic risk. At the core of these reforms, Quarles said, is the oft-repeated maxim that regulatory burden should be commensurate with systemic risk.  “This review should ensure that our regulations continue to appropriately increase in stringency as the risk profiles of firms increase, consistent with our previously stated tailoring goals and the new legislation,” Quarles said.  Those rules will hinge on one critical question: How much risk do banks in that range pose to the broader financial system, and how aggressively should the Fed minimize it?“There is one unanswered question … and that is, is it going to be focused on systemic risk or safety and soundness?” said Wayne Abernathy, executive vice president for financial institutions policy and regulatory affairs at the American Bankers Association. “Anything dealing with systemic risk has to take into account safety and soundness, but safety and soundness does not have to take into account systemic risk for institutions that don’t pose any systemic risk.”Marcus Stanley, policy director for Americans for Financial Reform, argued that those banks collectively pose a systemic risk even if the failure of a single bank would not crash the global economy on its own. The financial crisis was caused by the chronic undercapitalization of several institutions — big and small — at the same time.  “On some of these regional banks, you don’t have knock-on effects to the same degree, but it’s still a broader systemic risk question for the economy if you have a number of large banks that are undercapitalized,” Stanley said. “The line between macroprudential and prudential is not as clear as people make it out to be.”

        After years of debate, OCC to offer fintech charter — The Office of the Comptroller of the Currency announced Tuesday that it would move ahead to consider special-purpose charter applications from fintech firms, ending the guessing game over whether the agency was serious about giving fintechs a federal option.  The decision, unveiled just hours after the Treasury Department released a report endorsing a national fintech charter, means fintech firms that opt for the charter could soon be regulated more like banks on a national scale. The OCC had first proposed the charter under former Comptroller Thomas Curry, but the plan faced numerous obstacles — including resistance from state regulators — and it was still unclear for months whether current Comptroller Joseph Otting would go forward with the plan.

        Banking in the U.S. Got a Lot More Dangerous this Week - Pam Martens - The Trump administration seems hellbent on turning every Federal regulator into a snake oil salesman.  The latest scandal du jour comes yesterday from Politico’s Ben Lefebvre who reports that the Inspector General of the Interior Department is investigating whether the Interior’s head honcho, Ryan Zinke, colluded with the head of Halliburton to build him his dream brewery in his hometown of Whitefish, Montana.Against that backdrop, the Office of the Comptroller of the Currency (OCC) announced on Tuesday that financial technology companies, known as fintech, which provide various types of banking activities other than accepting insured deposits, will now be allowed to apply for a special purpose national bank charter and operate across state lines. The OCC announcement promptly followed a report from the U.S. Treasury which recommended that the OCC make the charter available.The immediate impact of gaining such a charter would be that online lenders who now must abide by state by state limits on the amount of interest they can charge on a loan to consumers would be unleashed to fully channel their predatory lending instincts. The Superintendent of the New York State Department of Financial Services (DFS), Maria Vullo, issued a statement that was highly critical of both the OCC and Treasury actions. Vullo stated:“The New York State Department of Financial Services fiercely opposes the Department of Treasury’s endorsement of regulatory ‘sandboxes’ for financial technology companies. The idea that innovation will flourish only by allowing companies to evade laws that protect consumers, and which also safeguard markets and mitigate risk for the financial services industry, is preposterous. Toddlers play in sandboxes. Adults play by the rules…“DFS also strongly opposes today’s decision by the Office of the Comptroller of the Currency to begin accepting applications for national bank charters from nondepository financial technology (fintech) companies. DFS believes that this endeavor, which is also wrongly supported by the Treasury Department, is clearly not authorized under the National Bank Act.” John Ryan, the President and CEO of the Conference of State Bank Supervisors correctly called the plan a “regulatory train wreck in the making.” Ryan pointed out that the ruling exceeded the OCC’s authority and would harm consumers and put taxpayers at risk of more bailouts.

        CBA presses FDIC to put halt to industrial loan charter applications -- Renewing longstanding opposition to industrial loan charters, the Independent Community Bankers of America urged the Federal Deposit Insurance Corp. to impose a two-year moratorium on such applications.The trade group also pressed the FDIC to reject an application from the student loan servicer Nelnet for an industrial loan charter.The ICBA noted that Nelnet, in addition to servicing loans, acts as a venture-capital investor and operates sports software and telecommunications businesses, which the Bank Holding Company Act bars traditional banks from entering. The trade group argued that the industrial loan charter, by letting institutions pursue such nonbank activities, creates an uneven playing field. “As we stated in our comment letters regarding [earlier applications], for safety and soundness reasons and to maintain the separation of banking and commerce, the FDIC should deny any ILC application,” Chris Cole, the ICBA's senior regulatory counsel, wrote Tuesday in a letter to FDIC officials.

        Banks plead with FDIC to simplify de novo process -- The American Bankers Association is hoping to work with the Federal Deposit Insurance Corp. to make it easier to open a bank.A task force formed by the association earlier this year just completed a report on the challenges and opportunities for de novos. The group, which featured bankers who had opened banks in recent years, presented its findings to the FDIC last week.The ABA-backed group spent months discussing the process and brainstorming solutions, said Kenneth Burgess, the association's chairman. Burgess helped launch First National Bank of Midland in 1998. The biggest obstacle for new banks is the lengthy, and often uncertain, application process, which makes it hard for organizers to line up personnel and capital, the group determined. Another concern is the rigidity of banking rules, especially when it comes making small changes to a business plan. Historically low interest rates have been another deterrent.

        Banks need to brace for Trump’s tariffs | American Banker - When Federal Reserve Chair Jerome Powell testified before Congress earlier this month, lawmakers didn’t just focus on monetary policy. Instead, they were much more interested in finding out what Powell thought about the potential effect of President Trump’s tariffs on their constituents. While Powell reminded legislators from both chambers that the Fed’s tools are for monetary policy — and that it is they who have the tools to influence trade policy — he made it clear that he did not think tariffs would be good for the economy in the long run.Indeed, the Trump administration’s attitude toward global alliances and treaties is already having a clear effect on corporate investment in the United States. This year, net inward investment into the United States by multinational corporations — both foreign and American — has fallen almost to zero, an early indicator of the damage being done by the Trump administration’s trade conflicts and its arbitrary bullying of companies and governments,” the economist Adam Posen recently wrote in Foreign Affairs.Banks of every size should not wait to figure out how tariffs and reduced foreign direct investment may affect their credit portfolios. In the short term, trade tariffs will disrupt the supply chain of numerous companies, while in the long term, an intensifying trade war and reduced foreign direct investment will hamper U.S. GDP. Moody’s and the U.S. Chamber of Commerce have each independently estimated that millions of Americans could lose their jobs due to the Trump administration’s tariffs on a wide range of products coming in from Canada, China, Europe and Mexico. It is impossible to predict with any certainty the number of jobs at risk, given the unpredictability of how different countries might react. However, this should not stop senior executives or risk management officers from creating a framework to analyze how tariffs might affect the ability of existing and future borrowers to repay existing credit lines.  It’s especially important for community and regional banks in states with a significant number of jobs supported by exports, or those with customers that are importers of products like steel and aluminum, to evaluate the likelihood of job losses and subsequent loan delinquencies. Even states that have less exposure to export-supported jobs are not immune, because it’s very difficult to predict how customers will react when different companies raise prices due to the effect of tariffs.

        Consumer debt is at an all-time high. Should banks be worried? -- 10 years later, what's remarkable is how little the financial crisis changed Americans' relationship to debt and savings. We still borrow more and save far less than prudence would dictate.U.S. household debt, which declined between 2008 and 2013, has rebounded sharply. By the first quarter of 2018, it was at an all-time high of $13.2 trillion. The composition of our debt has changed, and we've been better able to manage our obligations, thanks in substantial part to an extended period of low interest rates. But the crisis did not teach us a lesson about the perils of borrowing too much.Nor did it lead us to place more value on savings. Between 1960 and 1984, the U.S. personal savings rate — which is savings as a percentage of disposable personal income — never fell below 8%. That level of national thrift is far out of reach today. In December 2017, the personal savings rate dropped to 2.4%, its lowest level since the debt-fueled boom of the mid-2000s. In a much-discussed Federal Reserve survey that was published last year, 35% of U.S. adults reported that they would not be able to pay all of their bills if faced with a $400 emergency. Given that context, one can only hope that the next downturn will be far less severe than the last one, because Americans are again exposed."Ten years ago, a lot off the problems economically for households were sort of covered up in debt," said John Thompson, chief program officer at the Center for Financial Services Innovation. "And it sort of feels like that's starting to happen again." After the financial crisis, some observers argued that Americans were entering a new era of frugality, in which lenders would not be able to rely as heavily on interest income. And for a time it appeared Americans were changing their money habits. A survey that was conducted by the Consumer Federation of America in February 2009 found that 44% of consumers were making an effort to pay down their debt, compared with 38% the year before. But it is unclear whether consumers changed much at all, even in the short term. The personal savings rate climbed as high 11% in 2012, but that proved to be a temporary blip, which was likely caused in large part by lenders writing down delinquent consumer debt.

        Upheaval at the CFPB - American Banker podcast - The nomination of Kathy Kraninger as CFPB director has sparked fights in Congress. Meanwhile, the agency has taken several notable enforcement actions. American Banker reporter Kate Berry explains what these developments mean for the CFPB’s future.

        Fannie Mae issues securities to support Libor alternative --Fannie Mae has issued securities supporting the transition away from the London interbank offered rate, something that could become more pressing for lenders if adjustable-rate mortgages were to become more prevalent.The first Secured Overnight Financing Rate securities transaction issued to this end is a three-tranche, $6 billion deal scheduled to settle July 30.One $2.5 billion tranche of the floating-rate notes has a six-month maturity. The deal also includes a $2 billion tranche with a 12-month maturity, and a $1.5 billion tranche with an 18-month maturity.The tranches were each priced above SOFR, respectively, as follows: 8 basis points, 12 basis points and 16 basis points.Demand for the securities was strong and came from a diverse group of investors, according to Fannie Mae."With this milestone, our objective is to accelerate the development of the SOFR market and we encourage other issuers in the debt markets to follow," Nadine Bates, senior vice president and treasurer of Fannie Mae, said in a press release. "As a member of the Federal Reserve's Alternative Reference Rate Committee, we are honored to demonstrate our support to ARRC in its tremendous efforts to help develop an alternative to USD Libor."Mortgage lenders have been looking for an alternative to Libor for their loans because it will be phased out by 2021.

        Where GSE reform went wrong | American Banker - On Sunday morning on Sept. 7, 2008.  Secretary Paulson informed us that Fannie Mae and Freddie Mac had been placed in conservatorship the previous evening. Thus started a now nearly 10-year saga of miscalculations, mistakes and a lack of political will by six Congresses and three administrations.  Placing the two largest government-sponsored enterprises into conservatorship was the first and perhaps most egregious mistake. It marked the triumph of FM Watch — the coalition of Wall Street megabanks that had been working to bring down Fannie and Freddie for more than a decade. A kind of hysteria gripped the financial world and much of the general public as well. Our largest financial institutions and our government flailed about desperately trying to staunch the financial bleeding and chaos, and those with very large axes to grind saw their chance to end the two enormous housing GSEs. Would the GSEs have failed outright had Paulson and Lockhart not stepped in on that September weekend? Many highly respected financial thought leaders do not believe so.  But there is no argument that the GSEs recovered their financial health much more rapidly than anyone dreamed they could. And as they were recovering, the new Obama administration, under Treasury Secretary Timothy Geithner, saw an opportunity to "cut a fat hog" as we used to say in rural Missouri. And cut they did. They seized 100% of the income produced by the GSEs, wiping out private equity holders in the process. In effect, they seized private property for government benefit (and severely crippled hundreds of community banks in the process). By seizing all the profits of the two GSEs, they assured that the government coffers would be handsomely fed and that the GSEs would never emerge from conservatorship unless the Congress dealt with the problem, which it has been loath to do.  In my view, statutes have been ignored or outright violated. Is the duty and obligation of the conservator, the FHFA, to keep those entities under conservatorship in perpetuity? Or is the conservator's responsibility, nay, its duty, to rehabilitate the entities in conservatorship so they may stand on their own again and function as before? If the answer is the former, then the government has been disingenuous and should have forced the GSEs into bankruptcy in the first place.

        FHFA extends comment period on GSE capital proposal — The Federal Housing Finance Agency is extending the comment period for a proposal to implement minimum capital requirements for the mortgage giants Fannie Mae and Freddie Mac. The deadline was extended about two months, from Sept. 17 to Nov. 16, to allow the public extra time to weigh in. In a press release, the agency said multiple stakeholders had requested more time to evaluate the proposal.  The proposal would assess credit risk for different mortgage categories and include components for market and operational risk.

         Senate votes to extend flood insurance program - (AP) — The Senate voted Tuesday to extend for four months the program that provides flood insurance for nearly 5 million homeowners and business owners. The bill’s passage by an 86-12 vote averted a scenario in which people living in coastal communities would have been unable to renew their flood insurance policies or purchase new ones during the peak of hurricane season. The House overwhelmingly passed the bill last week. President Donald Trump signed the bill into law just hours before the program was set to expire. The National Flood Insurance program owes more than $20 billion to the federal treasury, and that’s after Congress last year provided a $16 billion bailout to ensure the program could continue paying claims from people hard hit by Hurricane Harvey. The program offers the only flood insurance available to most Americans. Homeowners who live in areas that have a 1 percent chance of being inundated by flood waters in any given year must purchase flood insurance as a condition of having a federally backed mortgage. But the premiums paid by policyholders are not keeping up with the expense of flood claims. Many lawmakers want to reduce the reliance on taxpayers and are pushing changes that would hike rates for some high-risk properties. The proposed changes have raised concerns from some lawmakers that flood insurance will become unaffordable for many of their constituents. The extension gives lawmakers more time to work out a compromise, but it would not be a shock for lawmakers to punt the issue to the next Congress.

        Fannie Mae: Mortgage Serious Delinquency rate decreased in June --Fannie Mae reported that the Single-Family Serious Delinquency rate decreased to 0.97% in June, down from 1.03% in May. The serious delinquency rate is down from 1.01% in June 2017. These are mortgage loans that are "three monthly payments or more past due or in foreclosure". The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.This is the lowest serious delinquency for Fannie Mae since November 2007.  By vintage, for loans made in 2004 or earlier (3% of portfolio), 3.00% are seriously delinquent. For loans made in 2005 through 2008 (6% of portfolio), 5.54% are seriously delinquent, For recent loans, originated in 2009 through 2018 (91% of portfolio), only 0.41% are seriously delinquent. So Fannie is still working through poor performing loans from the bubble years. The increase late last year in the delinquency rate was due to the hurricanes - no worries about the overall market (These are serious delinquencies, so it took three months late to be counted).Following the hurricane bump, the rate will probably decline to 0.5 to 0.7 percent or so to a cycle bottom.

        A ‘unique’ opportunity for investors spells mass eviction for tenants - Life at The Driftwood apartments was far from perfect. Tenants said the plumbing was prone to leaks and once in a while a cockroach might scamper through the kitchen. But rent, at $800 or less a month, was doable. But in January 2017 the last of the complex’s live-in owners died and soon after a commercial brokerage posted an online advertisement: “CBRE is pleased to present The Driftwood Apartments, a 13-unit building located in non-rent control Long Beach.”The ad said it was a “unique” investment opportunity with rents about 30% below market — the clear implication there was plenty of room to hike.Orange County investors purchased the property in May 2017, and in January, a firm they hired, Beach Front Property Management, told all residents they had 60 days to leave.A week later, Beach Front followed with the same notices at another property just two blocks away, and the clock started ticking on what advocates say is an increasingly common crisis for California renters: a mass eviction.Driven by a white-hot real estate market, investors are snatching up older apartment buildings and clearing out tenants to renovate units and re-market them at sometimes double the rent. Other times, buildings are leveled to build pricier apartments or condos. Displaced residents must find more expensive lodgings — if they can.

        Wells Fargo to pay $2.09 billion fine over decade-old mortgage loans (Reuters) - Wells Fargo has agreed to pay $2.09 billion in penalty to settle claims related to mortgage loans originated in the run-up to the financial crisis.  The civil fine is for alleged origination and sale of residential mortgage loans that the lender knew contained misstated income information and did not meet the quality that Wells Fargo represented, the U.S. Department of Justice said in a statement here on Wednesday. “Today’s agreement holds Wells Fargo responsible for originating and selling tens of thousands of loans that were packaged into securities and subsequently defaulted,” said Alex Tse, acting U.S. attorney in San Francisco. The loans in question included subprime and other relatively risky home loans. “We are pleased to put behind us these legacy issues regarding claims related to residential mortgage-backed securities activities that occurred more than a decade ago,” Wells Fargo CEO Tim Sloan said. The settlement amount was fully accrued as of June 30, the bank said. This is the latest blow to the San Francisco-based bank as it tries to recover from a sales scandal that has hurt its results and tarnished its reputation. In April, the company paid $1 billion in fines to resolve probes into auto insurance and mortgage lending abuses. 

        Wells Fargo Agrees To Pay $2.09 Billion Penalty For Mortgage Loan Abuses - The Justice Department announced that embattled Wells Fargo, which has seen its name feature in virtually every prominent banking scandal in the past year, will pay a civil penalty of $2.09 billion under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) based on the bank’s alleged origination and sale of residential mortgage loans that it knew contained misstated income information and did not meet the quality that Wells Fargo represented. According to the DOJ, investors, including federally insured financial institutions, suffered billions of dollars in losses from investing in residential mortgage-backed securities (RMBS) containing loans originated by Wells Fargo.       “Abuses in the mortgage-backed securities industry led to a financial crisis that devastated millions of Americans,” said Acting U.S. Attorney for the Northern District of California, Alex G. Tse. “Today’s agreement holds Wells Fargo responsible for originating and selling tens of thousands of loans that were packaged into securities and subsequently defaulted. Our office is steadfast in pursuing those who engage in wrongful conduct that hurts the public.”“This settlement holds Wells Fargo accountable for actions that contributed to the financial crisis,” said Acting Associate Attorney General Jesse Panuccio. “It sends a strong message that the Department is committed to protecting the nation’s economy and financial markets against fraud.” The United States alleged that, despite its knowledge that a substantial portion of its stated income loans contained misstated income, Wells Fargo failed to disclose this information, and instead reported to investors false debt-to-income ratios in connection with the loans it sold. Wells Fargo also allegedly heralded its fraud controls while failing to disclose the income discrepancies its controls had identified. The United States further alleged that Wells Fargo took steps to insulate itself from the risks of its stated income loans, by screening out many of these loans from its own loan portfolio held for investment and by limiting its liability to third parties for the accuracy of its stated income loans.

        Low-income renters are being displaced. Is it a bank problem? -- As property values have skyrocketed in the area, fueled by the presence of Google, Facebook and other tech industry giants, Daniel Saver, a housing attorney in Silicon Valley, has represented thousands of low-income tenants who have been pushed out of their homes by rent hikes they can’t afford, negotiating relocation packages and assisting renters who have been harassed by their landlords.  But it wasn’t until he became involved in a case in Redwood City, Calif., that he considered the role that banks have played in the area’s gentrification. After the sale of a 20-unit building in one of the “few remaining Latino districts” in Silicon Valley, the new owner notified tenants that monthly rents would increase by around $850, Saver said.  Saver urged the new owner to hold off on the rent hikes, or at least impose smaller ones, pointing out that the tenants were longtime residents of the community. He even organized a small protest that was attended by the Redwood City mayor. The owner, however, said his hands were tied — that raising the rent was necessary to meet the terms of his loan with First Republic Bank in San Francisco, Saver said. In particular, the owner pointed to a section in his contract — a copy of which Saver shared with American Banker — that required him to set the building’s rents at the going market rate within six months.  “I get that it’s their business model,” Saver continued. “But it’s the case that their business model results in the wholesale displacement of working-class families.” 

        California wildfires prompt CoreLogic to update risk assessment tools -  CoreLogic updated its Risk Quantification and Engineering tool amid brutal California wildfires to include U.S. Wildfire and U.S. Severe Convective Storm models to support the mortgage and insurance industries in better assessing natural disaster risk.The company also modified its U.S. Inland Flood model to represent localized property characteristics and more efficiently treat flash flooding. "Historically, property insurers have been unable to accurately analyze the true impact of wildfire, flood and severe convective storm damages because they lacked consistent and complete data. For all three of these perils the historical record has critical limitations and challenges. We have overcome this with some very innovative modeling approaches," Staci Wellentin, executive product management for insurance and spatial solutions at CoreLogic, said in a press release.

        Q2 2018 GDP Details on Residential and Commercial Real Estate - The BEA has released the underlying details for the Q2 advance GDP report. The BEA reported that investment in non-residential structures increased at a 13.3% annual pace in Q2.  Investment in petroleum and natural gas exploration increased substantially recently, from a $63 billion annual rate in Q4 2016 to a $140 billion annual rate in Q2 2018 - but is still down from a recent peak of $192 billion in Q4 2014.Without the increase in petroleum and natural gas exploration, non-residential investment would only be up about 3% year-over-year. The first graph shows investment in offices, malls and lodging as a percent of GDP. Investment in offices increased in Q2, and is up 8% year-over-year.Investment in multimerchandise shopping structures (malls) peaked in 2007 and was down about 2% year-over-year in Q2.   The vacancy rate for malls is still very high, so investment will probably stay low for some time. Lodging investment increased in Q2, and lodging investment is up 11% year-over-year. The second graph is for Residential investment components as a percent of GDP. According to the Bureau of Economic Analysis, RI includes new single family structures, multifamily structures, home improvement, Brokers’ commissions and other ownership transfer costs, and a few minor categories (dormitories, manufactured homes).Home improvement was the top category for five consecutive years following the housing bust ... but now investment in single family structures has been back on top for the last four years and will probably stay there for a long time.However - even though investment in single family structures has increased from the bottom - single family investment is still very low, and still below the bottom for previous recessions as a percent of GDP. I expect further increases over the next few years.Investment in single family structures was $289 billion (SAAR) (about 1.4% of GDP), and was up in Q2 compared to Q1. Investment in multi-family structures increased in Q2.  Investment in home improvement was at a $256 billion Seasonally Adjusted Annual Rate (SAAR) in Q2 (about 1.25% of GDP).  Home improvement spending has been solid.

        The U.S. Housing Market Looks Headed for Its Worst Slowdown in Years - The U.S. housing market -- particularly in cutthroat areas like Seattle, Silicon Valley and Austin, Texas -- appears to be headed for the broadest slowdown in years. Buyers are getting squeezed by rising mortgage rates and by prices climbing about twice as fast as incomes, and there’s only so far they can stretch. “This could be the very beginning of a turning point,” said Robert Shiller, a Nobel Prize-winning economist who is famed for warning of the dot-com and housing bubbles, in an interview. He stressed that he isn’t ready to make that call yet.   A slew of figures released this week gives ample evidence of at least a cooling. Existing-home sales dropped in June for a third straight month. Purchases of new homes are at their slowest pace in eight months. Inventory, which plunged for years, has begun to grow again as buyers move to the sidelines, sapping the fuel for surging home values. Prices for existing homes climbed 6.4 percent in May, the smallest year-over-year gain since early 2017, and have gained the least over three months since 2012, according to the Federal Housing Finance Agency. Shares of PulteGroup Inc. fell as much as 4.9 percent Thursday morning after the national homebuilder reported that orders had declined 1 percent from a year earlier, blaming rising mortgage rates. “Home prices are plateauing,” said Ed Stansfield, chief property economist at Capital Economics Ltd. in London. “People are saying: Let’s just bide our time, there’s no great rush. If we wait six or nine months we’re not going to lose out on getting a foot on the ladder.” That means “we’re now looking at a period in which prices move more or less sideways, or increase no more quickly than growth in incomes, over the next few years.” Stansfield projects a 5 percent gain this year and a 3 percent increase in 2019. That compares with 10.7 percent in 2005, shortly before the crash. Supply Lines Some of the most expensive markets, where sales are falling under the weight of prices, are now seeing substantial increases in supply, according to Redfin Corp. In San Jose, California, inventory was up 12 percent in June from a year earlier. It rose 24 percent in Seattle and 32 percent in Portland, Oregon. Those big jumps are from low numbers, so the housing crunch is still a serious problem. “Inventory has increased quite a bit,” Godwin, the Seattle agent, said. “We’re seeing less competition.”

        Mortgage rates probably have to top 5% to tip housing into a recession-leading downturn - I've pointed out many times that, generally speaking, mortgage rates lead home sales. It's not the only thing -- demographics certainly plays an important role -- but over the long term interest rates have been very important. I have run the graph comparing mortgage rates to housing permits many times. In the graph below, I'm using a slightly different housing metric -- private residential fixed investment as a share of GDP, both nominal (blue) and real (green), current through last Friday's report on Q2 GDP. Here's the long term view:We can see the leading relationship over the large majority of time frames in the last 50 years, with a few notable exceptions: the late 1960s and 1970s *huge* demographic tailwind of Baby Boomers reaching home-buying age, the 2000s housing bubble and bust, and 2014 (mainly due to the Millennial generation tailwind). Here's a close-up of this same graph beginning in 2015: The increase in mortgage rates since late 2016 (blue in the graph bleow) has had a larger effect on private residential investment than the 2013-14 episode, probably because house prices are higher in real terms, as shown in the below comparison with wages (red): House prices were near their 2012 housing bust bottom the first time mortgage rates went up. Now they are about 20% higher in real terms. Finally, here is a more granular view of Treasury and mortgage interest rates over the past 18 months: The decline in mortgage rates back below 4% in the middle of last year is probably what sparked the big increase in housing permits, starts, and sales last autumn and winter. But because mortgage interest rates have actually increased a little bit over the last six months, I'm not expecting a similar rebound in housing this autumn. At the same time, I can't see much of a significant outright *decline* in YoY housing sale metrics -- on the order of what we saw in 1999 before the 2001 recession -- unless mortgage rates increase, at a minimum, to over 5%, and probably to 5.25%. We'll see.

        Home Prices Rise Remain Steady in May - With today's release of the May S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.21% month over month. The seasonally adjusted national index year-over-year change has hovered between 4.2% and 6.7% for the last two-plus years. Today's S&P/Case-Shiller National Home Price Index (nominal) reached another new high. The adjacent column chart illustrates the month-over-month change in the seasonally adjusted 20-city index, which tends to be the most closely watched of the Case-Shiller series. It was up 0.21% from the previous month. The nonseasonally adjusted index was up 6.5% had forecast a 0.2% MoM seasonally adjusted increase and 6.4% YoY nonseasonally adjusted for the 20-city series. Here is an excerpt from the analysis in today's Standard & Poor's press release.“Home prices continue to rack up gains two to three times greater than the inflation rate,” says David M. Blitzer, Managing Director & Chairman of the Index Committee at S&P Dow Jones Indices. “The yearover-year increases in the S&P CoreLogic Case-Shiller National Index have topped 5% every month since August 2016. Unlike the boom-bust period surrounding the financial crisis, price gains are consistent across the 20 cities tracked in the release; currently, the range of the largest to smallest price change is 10 percentage points compared to a 20 percentage point range since 2001, and a 25 percentage point range between 2006 and 2009. Not only are prices rising consistently, they are doing so across the country."“Continuing price increases appear to be affecting other housing statistics. Sales of existing single family homes – the market covered by the S&P CoreLogic Case-Shiller Indices – peaked last November and have declined for three months in a row. The number of pending home sales is drifting lower as is the number of existing homes for sale. Sales of new homes are also down and housing starts are flattening. Affordability – a measure based on income, mortgage rates and home prices – has gotten consistently worse over the last 18 months. All these indicators suggest that the combination of rising home prices and rising mortgage rates are beginning to affect the housing market." [Link to source]The chart below is an overlay of the Case-Shiller 10- and 20-City Composite Indexes along with the national index since 1987, the first year that the 10-City Composite was tracked. Note that the 20-City, which is probably the most closely watched of the three, dates from 2000. We've used the seasonally adjusted data for this illustration.

        Case-Shiller: National House Price Index increased 6.4% year-over-year in May - S&P/Case-Shiller released the monthly Home Price Indices for May ("May" is a 3 month average of March, April and May prices). This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index. From S&P: Rise in Home Prices Remains Steady at 6.4% According to S&P CoreLogic Case-Shiller IndexThe S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.4% annual gain in May, remaining the same as in the previous month. The 10City Composite annual increase came in at 6.1%, down from 6.4% in the previous month. The 20-City Composite posted a 6.5% year-over-year gain, down from 6.7% in the previous month.Seattle, Las Vegas, and San Francisco continued to report the highest year-over-year gains among the 20 cities. In May, Seattle led the way with a 13.6% year-over-year price increase, followed by Las Vegas with a 12.6% increase and San Francisco with a 10.9% increase. Seven of the 20 cities reported greater price increases in the year ending May 2018 versus the year ending April 2018. Before seasonal adjustment, the National Index posted a month-over-month gain of 1.1% in May. The 10-City and 20-City Composites reported increases of 0.5% and 0.7%, respectively. After seasonal adjustment, the National Index recorded a 0.4% month-over-month increase in May. The 10-City and 20-City Composites posted 0.1% and 0.2% month-over-month increases, respectively. Nineteen of 20 cities reported increases in May before seasonal adjustment, while 16 of 20 cities reported increases after seasonal adjustment.  “Continuing price increases appear to be affecting other housing statistics. Sales of existing single family homes – the market covered by the S&P CoreLogic Case-Shiller Indices – peaked last November and have declined for three months in a row. The number of pending home sales is drifting lower as is the number of existing homes for sale. Sales of new homes are also down and housing starts are flattening. Affordability – a measure based on income, mortgage rates and home prices – has gotten consistently worse over the last 18 months. All these indicators suggest that the combination of rising home prices and rising mortgage rates are beginning to affect the housing market.” The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000). The Composite 10 index is off 1.0% from the peak, and up 0.1% in May (SA). The Composite 20 index is 2.2% above the bubble peak, and up 0.2% (SA) in May. The National index is 9.5% above the bubble peak (SA), and up 0.4% (SA) in May. The National index is up 48.1% from the post-bubble low set in December 2011 (SA). Case-Shiller House Prices Indices The second graph shows the Year over year change in all three indices. The Composite 10 SA is up 6.2% compared to May 2017. The Composite 20 SA is up 6.5% year-over-year. The National index SA is up 6.4% year-over-year. Note: According to the data, prices increased in 18 of 20 cities month-over-month seasonally adjusted.

        Real House Prices and Price-to-Rent Ratio in May  Bill Mcbride - Here is the earlier post on Case-Shiller: Case-Shiller: National House Price Index increased 6.4% year-over-year in May  It has been over eleven years since the bubble peak. In the Case-Shiller release this morning, the seasonally adjusted National Index (SA), was reported as being 9.5% above the previous bubble peak.However, in real terms, the National index (SA) is still about 9.9% below the bubble peak (and historically there has been an upward slope to real house prices).  The composite 20, in real terms, is still 15.8% below the bubble peak. The year-over-year increase in prices is mostly moving sideways now around 6%. In May, the index was up 6.4% YoY.Usually people graph nominal house prices, but it is also important to look at prices in real terms (inflation adjusted).  Case-Shiller and others report nominal house prices.  As an example, if a house price was $200,000 in January 2000, the price would be close to $285,000 today adjusted for inflation (42%).  That is why the second graph below is important - this shows "real" prices (adjusted for inflation). The first graph shows the monthly Case-Shiller National Index SA, and the monthly Case-Shiller Composite 20 SA (through May) in nominal terms as reported. The second graph shows the same two indexes in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices.In real terms, the National index is back to December 2004 levels, and the Composite 20 index is back to June 2004. In real terms, house prices are at 2004 levels. On a price-to-rent basis, the Case-Shiller National index is back to February 2004 levels, and the Composite 20 index is back to November 2003 levels. In real terms, prices are back to mid 2004 levels, and the price-to-rent ratio is back to late 2003, early 2004.

        Where do people get money to buy California homes these days? Often, from mom and dad – audio - If you want to buy a home in California, it increasingly helps to have relatives who can chip in. KPCC crunched the numbers on more than 600,000 FHA loans, a type of government-backed mortgage that’s common with first-time buyers.FHA borrowers can use money from relatives for their down payment. In recent years, that kind of family financial help has been on the rise in California.Back in 2011, about one in four FHA loans in California included down payment money from relatives. Today, it's one in three.  Family down payment support is playing an even bigger role in many parts of California, outstripping the national rate of 26 percent. Last year, in dozens of California ZIP codes — covering parts of East San Jose, North Hollywood, South Central Los Angeles, Santa Ana and Alpine in eastern San Diego County — at least half of FHA borrowers were getting family members to help with the down payment.  Many first-time buyers choose FHA loans for their low down payment options and relaxed credit requirements. FHA loans have been declining as a share of California’s overall mortgage market. But still, in 2017 about 15 percent of all homes sold in California had an FHA loan according to a survey from the California Association of Realtors. These loans can help young families get into lower to mid-priced California homes. However, lending limits max out at close to $680,000, making FHA loans unrealistic for California’s most expensive markets. Very few people use them to buy homes in areas like San Francisco or LA’s Westside.

        NAR: Pending Home Sales Index Increased 0.9% in June -- From the NAR: Pending Home Sales Reverse Course, Rise 0.9 Percent in June Pending home sales increased in all four major regions in June, but overall activity lagged year ago levels for the sixth straight month, according to the National Association of Realtors®. The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 0.9 percent to 106.9 in June from 105.9 in May. Despite last month’s increase, contract signings are still down 2.5 percent on an annual basis. .. The PHSI in the Northeast increased 1.4 percent to 93.7 in June, but is still 4.1 percent below a year ago. In the Midwest the index rose 0.5 percent to 101.9 in June, but is still 2.1 percent lower than June 2017. Pending home sales in the South climbed 1.1 percent to an index of 124.2 in June, but are 0.3 percent below a year ago. The index in the West inched forward 0.7 percent in June to 95.4, but is 5.6 percent below a year ago. This was close to expectations of a 0.8% increase for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in July and August.

         Construction Spending decreased 1.1% in June -- Earlier today, the Census Bureau reported that overall construction spending decreased in June:  Construction spending during June 2018 was estimated at a seasonally adjusted annual rate of $1,317.2 billion, 1.1 percent below the revised May estimate of $1,332.2 billion. The June figure is 6.1 percent above the June 2017 estimate of $1,241.3 billion. Both Private and public spending decreased: Spending on private construction was at a seasonally adjusted annual rate of $1,019.8 billion,0.4 percent below the revised May estimate of $1,023.9 billion. ...In June, the estimated seasonally adjusted annual rate of public construction spending was $297.4 billion, 3.5 percent below the revised May estimate of $308.3 billion. This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.Private residential spending has been increasing, but is still 16% below the bubble peak.Non-residential spending is 9% above the previous peak in January 2008 (nominal dollars).Public construction spending is now 9% below the peak in March 2009, and 14% above the austerity low in February 2014. The second graph shows the year-over-year change in construction spending.On a year-over-year basis, private residential construction spending is up 9%. Non-residential spending is up 4% year-over-year. Public spending is up 5% year-over-year.  This was well below the consensus forecast of a 0.3% increase for June.  However, construction spending for April and May were revised up (most residential construction spending was revised up).

         Lumber Futures Dump As US Construction Spending Slumps - Worst June Since 2000 -- Lumber futures prices are limit down today, falling to their lowest price since Dec 2017, erasing much of the post-tariff surge in prices as US construction spending unexpectedly tumbles in June. Lumber prices are freefalling back towards pre-tariff levels... And with home starts, permits, and sales all weaker... It is no surprise that US construction spending tumbled in June... Bearing in mind the upward revision for May, this is the worst construction spending drop for a June since the year 2000... Still seem like a sustainable 4% economy? 

        Bill to enhance poor credit scores will backfire, critics say — Legislation to enhance credit scores by allowing consumers to include data about their monthly bills has broad bipartisan support, but some consumer advocates and others question whether the legislation may backfire on those it is meant to help.  The measure, which passed the House earlier this month and is authored by Rep. Keith Ellison, D-Minn., is intended to allow consumers to benefit from positive information about lease, telecommunications and utility payments in their credit reports. An identical version has been introduced by Sens. Tim Scott, R-S.C., and Joe Manchin, D-W.Va., in the upper chamber. But critics warn that Ellison's bill could open a Pandora's box. Not only will it be difficult for landlords and service providers to furnish the data, they say, but observers also note it could highlight negative information — such as late payments — that could hurt a consumer's credit standing, particularly consumers with a thin credit file.

        Consumer Confidence Increases Marginally in July -- The latest Conference Board Consumer Confidence Index was released this morning based on data collected through July 19. The headline number of 127.4 was an increase from the final reading of 127.1 for June, an upward revision from 126.4. Today's number was above the consensus of 126.5.Here is an excerpt from the Conference Board press release. “Consumer confidence gained marginal ground in July, after a modest decline in June,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of present-day conditions improved, suggesting that economic growth is still strong. However, while expectations continue to reflect optimism in the short-term economic outlook, back-to-back declines suggest consumers do not foresee growth accelerating.” The chart below is another attempt to evaluate the historical context for this index as a coincident indicator of the economy. Toward this end, we have highlighted recessions and included GDP. The regression through the index data shows the long-term trend and highlights the extreme volatility of this indicator. Statisticians may assign little significance to a regression through this sort of data. But the slope resembles the regression trend for real GDP shown below, and it is a more revealing gauge of relative confidence than the 1985 level of 100 that the Conference Board cites as a point of reference.

        Why Americans Are About To Experience Sharply Higher Prices -- A few weeks ago, SocGen asked what is arguably the most important question relating to the global trade wars: are tariffs inflationary or deflationary? While there were various nuances, its conclusion was simple: "Inflationary short term, disinflationary medium term."It appears that the "short-term" part has now arrived, because after several rounds of tit-for-tat tariffs and retaliations between the US and China, American consumers are about to be hit with sharply higher prices as tariffs on industrial metals put pressure on U.S. manufacturers.In May, President Trump imposed steel and aluminum tariffs on the EU, Canada, and Mexico to help preserve America’s manufacturing base. The response: steel and aluminum prices have risen 33% and 11% respectively since the beginning of the year, as manufacturers began to price in the tariffs. Moreover, tariffs on additional imported products from China have added even more costs for producers, which are now being aggressively passed through to the consumer."You’re going to see higher prices passed on to consumers…almost immediately" Matt Gold, a former deputy assistant U.S. Trade Representative for North America under former President Barack Obama, told CNBC. "A lot of goods are already warehoused that were imported months ago, so it takes a bit of time to catch up, but prices catch up pretty fast," he added.Gold added that for American consumers, those soaring costs would be spread "really across the board. With Chinese retaliatory tariffs, we’ve imposed those on $34 billion of different goods coming from China. It’s a very broad array of consumer products, industrial products." To be sure, the latest Markit PMI already warned about the threat of sharply higher prices, noting that "July saw the steepest rise in prices charged for goods and services yet recorded by the surveys as firms passed rising costs on to customers, in turn frequently linked to tariffs."

         Americans To Pay 4% More For Diapers, Tissues And Toilet Paper -- The first industry hit by higher prices was in discretionary purchases such as recreational vehicles. Earlier this month, Winnebago Industries warned that the recreational-vehicle boom seen in the last several years could have popped: "We’ve had to go to the market a bit more frequently and a bit more aggressively with some price increases as of late,” said Michael Happe, chief executive of recreational-vehicle manufacturer Winnebago Industries Inc, who spoke with The Wall Street Journal. Another RV company, Polaris Industries, announced it was hiking prices on its vehicles including boats, motorcycles, snowmobiles to cover $15 million of the $40 million in tariff-related charges to pay for steel, aluminum, and components from China this year. The company is facing severe headwinds from retaliatory tariffs from other countries on products it exports from the U.S., including the Indian-brand motorcycles it ships to Europe. And while higher costs for recreational-vehicles - and soon cars if auto tariffs are implemented - are slowly but surely being passed along to the American consumer, at least these are discretionary purchases for members of society's upper-middle and top income classes, and as such the hit to their wallet will be manageable. But now Americans are about to suffer rising prices on their purchases of key staples as well. Last week, Coca-Cola CEO James Quincey said tariffs are going to inflate drink prices. “Clearly it’s disruptive for us. It’s disruptive for our customers,” Quincey said. He believes distributors and retailers will pass along increased prices to consumers in the third quarter.Today, household products giant Procter & Gamble joined the "tariffs club", warning that its profit margin are getting squeezed by higher costs and rising competition, and a result the prices of Bounty paper towels, Pampers diapers, Charmin toilet paper and Puffs tissues are going up. In its quarterly earnings report, P&G unveiled that the cost of Pampers will go up by an average of 4%, raising the price of a 128-count pack of swaddlers for newborns from $34.99 at Target to about $36.39. Other paper staples, such as Bounty, Charmin and Puffs will see 5% price increases on average.

        Personal Income increased 0.4% in June, Spending increased 0.4% - The BEA released the Personal Income and Outlays report for June: Personal income increased $71.7 billion (0.4 percent) in June according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $65.3 billion (0.4 percent) and personal consumption expenditures (PCE) increased $57.1 billion (0.4 percent).Real PCE increased 0.3 percent. The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.1 percent. The June PCE price index increased 2.2 percent year-over-year and the June PCE price index, excluding food and energy, increased 1.9 percent year-over-year. The following graph shows real Personal Consumption Expenditures (PCE) through June 2018 (2012 dollars). Note that the y-axis doesn't start at zero to better show the change.The dashed red lines are the quarterly levels for real PCE.The increase in personal income was at expectations, and the increase in PCE was close to expectations. PCE growth was solid in Q2, and inflation is close to the Fed's target.

        Real Disposable Income Per Capita in June -- With the release of this morning's report on June Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita.At two decimal places, the nominal 0.36% month-over-month change in disposable income was trimmed to 0.26% when we adjust for inflation. The year-over-year metrics are 4.63% nominal and 2.35% real.Post-recession, the trend was one of steady growth, but generally flattened out in late 2015. Things seem to have picked up slightly in 2018.The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013. It will be interesting to see how the recent tax legislation affects the trend over time. The BEA uses the average dollar value in 2009 for inflation adjustment. But the 2009 peg is arbitrary and unintuitive. For a more natural comparison, let's compare the nominal and real growth in per-capita disposable income since 2000.   Nominal disposable income is up 84.7% since then. But the real purchasing power of those dollars is up only 32.1%.

        They Changed The Savings Rate, At Least -- I wrote back in August 2016 out of frustration. There were any number of topics to have become flustered over at the time, but on this particular occasion, it was the personal savings rate. Because it is, like productivity, essentially a plug in between two statistics whenever those two particular series - income and spending - are subjected to revision, it can practically rewrite the savings rate. Last week, in tandem with benchmark GDP revisions, the Bureau of Economic Analysis (BEA) forewarned us of another wholesale recomputing of the savings rate. Based on new data made available by the IRS' National Research Program, the BEA has raised its income estimates to "correct for the effects of taxpayer underreporting." How the IRS has decided taxpayers are "underreporting" isn't clear (audits?), regardless there is more income than previously believed and reported in the national accounts. That means we have to try to account for two recent transformations. The first is this planned switch in all the "real" series from a 2009 reference point to the 2012 fixture that will be used in the years to come. As noted last week with GDP benchmarks, the deflationary 2012 dollar makes the economy look better, if only by altering the angle of the prism through which it is being filtered. It's the same "L"-riddled economy, only with higher numbers attached throughout. It's pretty easy to correct for and to harmonize the seemingly disparate benchmarks. When doing so, we find that the "underreporting" of income meant slightly less income, somehow, in the middle 2000s and even during the worst of the Great "Recession," but substantially more income over the past few years.Starting around the middle of 2016, coincident to the turn toward reflation in things like oil prices, personal incomes in the aggregate moved upward, though still on a reduced, historically low trajectory. In other words, less bad.The primary culprit of "underreported" income was proprietors' income, along with contributions from dividends/interest. Small business owners, it appears, have been faring better since the more sharply defined 2015-16 downturn, even if, apparently, they've been reluctant to share that information with tax authorities.As you can see above, it's not just limited to Reflation #3; indeed, according to these new benchmark numbers, it's been a chronic issue for the entire "recovery" period, only sharpened in the very near past. Business owners cheating on their taxes because they can't afford to pay the full amount? That would actually make sense for once.

         Car Sales Tumble As Automakers Slash Discounts For The First Time In 5 Years -- For years, some more skeptical analysts had been stumped by the relentless US consumer demand US for new cars, despite rising household debt levels, stagnant real wages, and concerns about record subprime exposure. Today, we may have found the dynamo that drove purchases to a plateau of between 17 and 18 million units over the past three years: pervasive dealer discounts and incentives.Almost all major manufacturers reported a sharp drop in U.S. deliveries for July, led by a 15% plunge at Nissan Motor. The reason: for the first time in 55 months, the auto industry - perhaps due to concerns about the impact of auto tariffs - cut back spending on incentives, snapping a streak of monthly consecutive increases that began 4 1/2 years ago, according to J.D. Power.  While General Motors stopped reporting its monthly numbers earlier this year, Bloomberg reports that its sales fell 3.3% last month, the same drop as Ford.Fiat Chrysler, which recently lost its CEO Sergio Marchionne, was the rare bright spot in July, driven largely by a surge in Jeep SUV sales fueling the Italian-American company’s 5.9% jump.However, as we reported previously, both automakers could have used some positive headlines. GM lowered its profit expectations last week largely because of rising commodity prices, which have jumped since President Donald Trump put tariffs on steel and aluminum; meanwhile Jeep’s surprisingly weak performance in China - where subsidies for new auto purchases recently ended - was a major reason Fiat Chrysler dropped its forecasts for the year.As a result of underwhelming numbers from Nissan, Ford and Honda (and GM), the annualized industry sales rate slowed to just 16.8 million, from 17.2 million in June, and just barely above last year's selling rate. Fiat shares declined 2.2%, while GM fell 2% and Ford dropped 1.4% in New York trading.

        International Trade August 3, 2018: The nation's trade deficit proved a little deeper than expected in June, at $46.3 billion vs Econoday's consensus for $45.6 billion. After a run of strength going back to February, exports posted a 0.7 percent decline to $213.8 billion in the month with a rise in service exports offset by a drop in goods exports where capital goods, vehicles and especially consumer goods posted declines. Imports, in special focus of course given the tariff situation, rose 0.6 percent to a monthly $260.2 billion with consumer goods, the sore spot in the nation's deficit, rising a sharp $2.0 billion to $53.4 billion. Oil imports were also up, rising $1.2 billion to $14.1 billion. Country data show a deepening deficit with China, at $33.5 billion in June with the year-to-date deficit 8.6 percent wider at $185.7 billion. Other year-to-date deficits include an 11 percent deepening with Europe at $77.6 billion, a 5.5 percent deepening with Mexico at $38.0 billion, and a 23.4 percent improvement with Canada at $8.1 billion. Though deeper than expected in June, the nation's trade deficit has been improving though the outlook, given tit for tats on tariffs, is uncertain.

        Earlier: Trade Deficit increased to $46.3 Billion in June -  Earlier from the Department of Commerce reported: The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $46.3 billion in June, up $3.2 billion from $43.2 billion in May, revised. … June exports were $213.8 billion, $1.5 billion less than May exports. June imports were $260.2 billion, $1.6 billion more than May imports.  Exports decreased and imports increased in June.  Exports are 29% above the pre-recession peak and up 10% compared to June 2017; imports are 12% above the pre-recession peak, and up 9% compared to June 2017.  In general, trade has been picking up. The second graph shows the U.S. trade deficit, with and without petroleum.  The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products. Oil imports averaged $62.42 in June, up from $58.37 in May, and up from $44.78 in June 2017. The trade deficit with China increased to $33.5 billion in June, from $32.6 billion in June 2017.

        June real trade balance   -When the second quarter real GDP report was published I saw that trade made a major contribution to growth — exports contributed 1.12 percentage points of the 4.1% real GDP growth.  But that seemed like some sort of fluke produced by unusual conditions rather that what trend growth would generate.  Moreover, the BEA estimate was based on only two months actual data and the other month was a BEA “guesstimates”.  So new data was quite likely to generate large changes in reported real  GDP. June data was released this morning at the same time as the unemployment report, so it did not get much attention. Real exports increased and real imports imports declined. Both moved back toward their intermediate growth trend. The trade balance is the difference between two very large numbers so that small changes in either series can generate very large changes in the trade balance.  The June real trade deficit was $ 7.9 ( B 2012 $ ) as compared to $7.7 ( B 2012$)  in April and  $7.5 ( B 2012 $) in May. The June trade balance is about where is was at the end of the first quarter.  So when the 2nd quarter real GDP is revised the major contribution from trade is likely to be revised down significantly.

        Factory Orders August 2, 2018: Factory orders for June rose a sharp 0.7 percent but miss Econoday's consensus by 2 tenths in a report that does include some slowing. Orders for commercial aircraft were a plus in the month as were orders for vehicles excluding which, as well as all other transportation equipment, orders in June rose 0.4 percent and are unchanged from last week's advance estimate. What are changed are orders for core capital goods (nondefense ex-aircraft) which are revised to only a 0.2 percent gain vs a 0.6 percent rise in last week's advance data. Shipments for this reading are revised 3 tenths lower to a 0.7 percent gain in a downgrade that will weigh slightly on forecasts for the second estimate of second-quarter GDP. Orders for steel and aluminum fell back in June though unfilled orders are up and related inventories continue to rise sharply. Total orders for durable goods rose 0.8 percent, revised 2 tenths lower from the advance report, with orders for non-durable goods, the fresh information in today's report, up 0.5 percent on strength in chemicals vs May's 1.1 percent gain which was fed by strength in petroleum and coal. Other data include a useful build in total unfilled orders which extended recent gains with a 0.4 percent rise. Total shipments were very strong, up 1.0 percent despite wide reports in the month of trucking snags. Inventories are low in the factory sector, up only 0.1 percent in June to drive down the inventory-to-shipments ratio to 1.33 from 1.35. Today's strong headline aside, June wasn't that great of a month for the factory sector which perhaps was held down to a degree by tariff-related disruptions. Year-on-year growth in orders is very positive, at 6.1 percent, but down from 9.2 and 7.9 percent in the two prior months. Nevertheless, indications including strong readings in regional and private manufacturing reports point to second-half acceleration for the sector and second-half leadership for the 2018 economy. 

        Dallas Fed: "Robust Expansion in Texas Manufacturing Continues; Uncertainty Picks Up" -- From the Dallas Fed: Robust Expansion in Texas Manufacturing Continues; Uncertainty Picks Up  The robust expansion in Texas factory activity continued in July, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose six points to 29.4, signaling an acceleration in output growth. Other indexes of manufacturing activity also indicated continued solid expansion in July. The survey’s demand measures—the new orders and growth rate of orders indexes—moved down but remained well above average at 23.3 and 17.0, respectively. The shipments index climbed five points to 30.8, and the capacity utilization index edged up to 25.0. Perceptions of broader business conditions were a bit less positive this month versus June, and uncertainty increased. The general business activity index slipped four points to 32.3. The company outlook index dropped 13 points to 20.4, which is the second-lowest reading this year but still elevated relative to the average. A new question introduced to the survey in January 2018 asks, “How has uncertainty regarding your company’s outlook changed in the current month vs. prior month?” In July, a quarter of firms said uncertainty increased, while only 8 percent said it decreased—bringing the outlook uncertainty index* to 17.0, well above its June reading and the highest level to date.  Labor market measures suggested a pickup in net hiring and longer work hours in July. The employment index pushed up five points to 28.9, a 13-year high. Thirty-six percent of firms noted net hiring, compared with 7 percent noting net layoffs. The hours worked index ticked up to 22.2.  Price and wage pressures remained highly elevated this month. While still well above average, the raw materials prices index moved down five points to 48.6, and the finished goods prices index ticked down to 22.9. Compensation costs continued to rise at a faster clip than normal, with the wages and benefits index holding fairly steady at 32.4. This was the last of the regional Fed surveys for July.  Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

        July Regional Fed Manufacturing Overview --Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia.Regional manufacturing surveys are a measure of local economic health and are used as a representative for the larger national manufacturing health. They have been used as a signal for business uncertainty and economic activity as a whole. Manufacturing makes up 12% of the country's GDP.The other 6 Federal Reserve Districts do not publish manufacturing data. For these, the Federal Reserve’s Beige Book offers a short summary of each districts’ manufacturing health. The Chicago Fed published their Midwest Manufacturing Index from July 1996 through December of 2013. According to their website, "The Chicago Fed Midwest Manufacturing Index (CFMMI) is undergoing a process of data and methodology revision. In December 2013, the monthly release of the CFMMI was suspended pending the release of updated benchmark data from the U.S. Census Bureau and a period of model verification. Significant revisions in the history of the CFMMI are anticipated." Here is a three-month moving average overlay of each of the five indicators since 2001 (for those with data). The latest average of the five for July is 24.5, up from the previous month's 22.5. It is near its all-time high of 25.1, set in May 2004.

        Markit Manufacturing PMI: Growth Dips in July - The July US Manufacturing Purchasing Managers' Index conducted by Markit came in at 55.3, down slightly from the 55.4 final June figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.Here is an excerpt from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release:“The US manufacturing sector continued to expand in July, but shows increasing signs of struggling against headwinds of supply shortages, rising prices and deteriorating exports." [Press Release] Here is a snapshot of the series since mid-2012.

        Chicago PMI at Six-Month High -The Chicago Business Barometer, also known as the Chicago Purchasing Manager's Index, is similar to the national ISM Manufacturing indicator but at a regional level and is seen by many as an indicator of the larger US economy. It is a composite diffusion indicator, made up of production, new orders, order backlogs, employment, and supplier deliveries compiled through surveys. Values above 50.0 indicate expanding manufacturing activity.The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, rose in July to a six-month high of 65.5 from 64.1 in June, which was above the forecast 61.9.Here is an excerpt from the press release:“The MNI Chicago Business Barometer started the third quarter in bullish form, with business activity supported by robust demand and output. Both, like the headline index, registered 6-month highs and the majority of firms expect demand to increase further over Q3,” said Jamie Satchi, Economist at MNI Indicators.“Input prices continue to be a thorn in the side of businesses, however, with the Prices Paid indicator at the highest in a decade and continuing to signal pipeline inflation,” he added. [Source] Let's take a look at the Chicago PMI since its inception.

        Chicago PMI Hits 6-Month Highs As 'Soft Survey' Rebound Continues - Chicago PMI beat expectations, printing at 65.5 - the highest economist forecast in the range - to its highest since January 2018. Under the hood, everything looks awesome (prices continue to increase):

        • Prices paid rose at a faster pace, signaling expansion
        • New orders rose at a faster pace, signaling expansion
        • Employment rose at a faster pace, signaling expansion
        • Inventories fell and the direction reversed, signaling contraction
        • Supplier deliveries rose at a slower pace, signaling expansion
        • Production rose at a faster pace, signaling expansion
        • Order backlogs rose at a faster pace, signaling expansion

        Chicago PMI Prices Paid hit a ten-year high; anecdotal evidence of tariffs impacting firms' operations. But Chicago's PMI is just the latest in a series of 'soft' surveys that indicate a rebound as real hard economic data disappoints...Which do you trust?

        ISM Non-Manufacturing: Continued Growth in July, at Slower Rate The Institute of Supply Management (ISM) has now released the July Non-Manufacturing Purchasing Managers' Index (PMI), also known as the ISM Services PMI. The headline Composite Index is at 55.7 percent, down 3.4 from 59.1 last month. Today's number came in below the forecast of 58.6 percent. Here is the report summary: “The NMI® registered 55.7 percent, which is 3.4 percentage points lower than the June reading of 59.1 percent. This represents continued growth in the non-manufacturing sector at a slower rate. There was a notable decrease in the Business Activity Index, which fell to 56.5 percent, 7.4 percentage points lower than the June reading of 63.9 percent. The July figure still reflects growth for the 108th consecutive month, at a slower rate. The New Orders Index registered 57 percent, 6.2 percentage points lower than the reading of 63.2 percent in June. The Employment Index increased 2.5 percentage points in July to 56.1 percent from the June reading of 53.6 percent. The Prices Index increased by 2.7 percentage points from the June reading of 60.7 percent to 63.4 percent, indicating that prices increased in July for the 29th consecutive month. According to the NMI®, 16 non-manufacturing industries reported growth. There has been a ‘cooling off’ in growth for the non-manufacturing sector. Tariffs and deliveries are an ongoing concern. The majority of respondents remain positive about business conditions and the economy.” [Source] Unlike its much older kin, the ISM Manufacturing Series, there is relatively little history for ISM's Non-Manufacturing data, especially for the headline Composite Index, which dates from 2008. The chart below shows Non-Manufacturing Composite. We have only a single recession to gauge is behavior as a business cycle indicator.

        ISM services index in July falls to 11-month low - The Institute for Supply Management said Friday that its non-manufacturing index fell to 55.7% in July, an 11-month low, from 59.1%. Economists polled by MarketWatch expected a 58.6% reading. Any reading above 50% indicates expansion.   There was a sharp 7.4-point drop in production — what’s called the business-activity index, which fell to 56.5% — and the new-orders index sank 6.2 points to 57%. There were complaints from purchasing managers about tariffs and slow deliveries, as well as overseas growth. What they’re saying: “Business is up overall, but a lot of questions loom over the rest of the year. These include concerns about international markets and the increasing tariffs that impact the landed costs of goods,” said one purchasing manager in retail trade. “There has been a ‘cooling off’ in growth for the nonmanufacturing sector,” said Anthony Nieves of the ISM survey committee. The second-longest post-war economic expansion continues to be the driving force behind gains, as the index has been above the level indicating expansion for 102 consecutive months. Service businesses are more insulated anyway. As one manager in health care and social assistance said: “Patients get sick regardless of what is going on in the economy.”

        Markit Services PMI: Business Activity Remains Strong, but Softens in July --The July US Services Purchasing Managers' Index conducted by Markit came in at 56.0 percent, down 0.5 from the final June estimate of 56.5. The consensus was for 56.2 percent. Markit's Services PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction. Here is the opening from the latest press release:July survey data signalled a further robust increase in business activity across the U.S. service sector. Although the latest upturn eased to a three-month low, it was sharp nonetheless and one of the fastest in the last three years. Similarly, the rate of new business growth softened to the weakest in six months, but remained steep overall. Backlogs contracted for the first time since April 2017, as strong employment growth reduced pressure on capacity. Meanwhile, output charge inflation accelerated on the back of strong demand and higher input costs. [Press Release] Here is a snapshot of the series since mid-2012.

        New York Evicts Internet Provider For High-Speed Failure -- The State of New York is moving to evict its largest internet and cable provider for failing to deliver on fast connection promises that had won it approval two years ago for a merger with Time Warner Cable.The deal was that rural areas would get high-speed internet access as a result of the merger, but the company—Spectrum (of Charter Communications)—didn’t make it happen on time.New York is livid, and not only is it revoking Spectrum’s contract, but it’s also revoking its approval of the merger and seeking $3 million in penalties.In the meantime, in order to cover the gap in internet services for customers, the state is requiring Spectrum to continue to operate for two months while the state seeks a replacement company.Spectrum ended up getting its broadband network to around 86,000 homes and businesses in New York, but the deal was 145,000 additional addresses. And while the State of New York is lashing out at Spectrum’s non-compliance with the deal, it’s also playing hardball over what it has called the company’s “brazenly disrespectful behavior toward New York State and its customers”.

        Weekly Initial Unemployment Claims increased to 218,000 --The DOL reported: In the week ending July 28, the advance figure for seasonally adjusted initial claims was 218,000, an increase of 1,000 from the previous week's unrevised level of 217,000. The 4-week moving average was 214,500, a decrease of 3,500 from the previous week's unrevised average of 218,000.The previous week was unrevised. The following graph shows the 4-week moving average of weekly claims since 1971.

        2018 July Job Cut Report: Cuts Plummet to 27,122; YTD Cuts Up 7 Percent - The pace of downsizing fell to the lowest level of the year in July, as U.S.-based employers announced plans to cut 27,122 workers from payrolls during the month, according to a report released Thursday by global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc.July’s total fell 27.1 percent from the 37,202 cuts announced in June and 4.2 percent from the same time last year, when 28,307 cuts were announced.Last month’s total was the lowest of the year, falling below the previous low of 31,517 recorded in May. July’s cuts were the lowest since November 2016, when employers announced 26,936 cuts.“The economy is at near-full employment. Nearly 90 percent of companies recently polled by Challenger are either actively hiring or in retention mode. Companies are not letting go of their workforces right now,” said John Challenger, Chief Executive Officer of Challenger, Gray & Christmas, Inc.So far this year, employers have announced 272,301 cuts, 6.7 percent higher than the 255,307 announced through this point last year. Retailers continue to lead in job cuts, with 75,763 announced so far this year. That is 18.4 percent higher than the 63,989 Retail jobs cut through this point last year. The seven-month total for Retail job cuts is 321 cuts away from the full-year total in 2017.

        First Look at July: ADP Says 219K New Nonfarm Private Jobs --The economic mover and shaker this week is Friday's employment report from the Bureau of Labor Statistics. This monthly report contains a wealth of data for economists, the most publicized being the month-over-month change in Total Nonfarm Employment (the PAYEMS series in the FRED repository). Today we have the ADP July estimate of 219K new nonfarm private employment jobs, an increase over the ADP June figure of 213K.The 219K estimate came in above the consensus of 186K for the ADP number.The forecast for the forthcoming BLS report is for 189K nonfarm private new jobs and the unemployment rate to drop to 3.9%. Their forecast for the July full nonfarm new jobs is (the PAYEMS number) is 193K.Here is an excerpt from today's ADP report press release:“The labor market is on a roll with no signs of a slowdown in sight,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Nearly every industry posted strong gains and small business hiring picked up.”Mark Zandi, chief economist of Moody’s Analytics, said, “The job market is booming, impacted by the deficit-financed tax cuts and increases in government spending. Tariffs have yet to materially impact jobs, but the multinational companies shed jobs last month, signaling the threat.” Here is a visualization of the two series over the previous twelve months.

        July Employment Report: 157,000 Jobs Added, 3.9% Unemployment Rate --From the BLS: Total nonfarm payroll employment rose by 157,000 in July, and the unemployment rate edged down to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, in manufacturing, and in health care and social assistance....The change in total nonfarm payroll employment for May was revised up from +244,000 to +268,000, and the change for June was revised up from +213,000 to +248,000. With these revisions, employment gains in May and June combined were 59,000 more than previously reported....In July, average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $27.05. Over the year, average hourly earnings have increased by 71 cents, or 2.7 percent. The first graph shows the monthly change in payroll jobs, ex-Census (meaning the impact of the decennial Census temporary hires and layoffs is removed - mostly in 2010 - to show the underlying payroll changes). Total payrolls increased by 157 thousand in July (private payrolls increased 170 thousand). Payrolls for May and June were revised up by a combined 59 thousand. Year-over-year change employmentThis graph shows the year-over-year change in total non-farm employment since 1968. In July the year-over-year change was 2.400 million jobs. The third graph shows the employment population ratio and the participation rate. The Labor Force Participation Rate was unchanged in July at 62.9%. This is the percentage of the working age population in the labor force. A large portion of the recent decline in the participation rate is due to demographics. The Employment-Population ratio increased to 60.5% (black line). The fourth graph shows the unemployment rate. The unemployment rate increased in July to 4.0%. This was below the consensus expectations of 190,000 jobs, however the previous two months combined were revised up by 59,000. A solid report.

        July jobs report: booming jobs market, and a surge in participation continues depress wage growth HEADLINES:

        • +157,000 jobs added
        • U3 unemployment rate down -0.1% from 4.0% to 3.9%
        • U6 underemployment rate down -0.3% from 7.8% to 7.5% (new expansion low)
        • Not in Labor Force, but Want a Job Now:  down -95,000 from 5.258 million to 5.163 million   
        • Part time for economic reasons: down -176,000 from 4.743 million to 4.567 million (new expansion low)
        • Employment/population ratio ages 25-54: up 0.2% from 79.3% to 79.5% (new expansion high)
        • Average Weekly Earnings for Production and Nonsupervisory Personnel: rose $.03 from  $22.62 to $22.65, up +2.7% YoY.  (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.) 
        • Manufacturing jobs rose +37,000 for an average of +29,000/month in the past year vs. the last seven years of Obama's presidency in which an average of 10,300 manufacturing jobs were added each month.   
        • Coal mining jobs were unchanged for an average of +100/month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month
        • May was revised upward by +24,000. June was also revised upward by +35,000, for a net change of +59,000.  
        • the average manufacturing workweek was unchanged at 40.9 hours.  This is one of the 10 components of the LEI. 
        • construction jobs increased by +19,000. YoY construction jobs are up +308,000. 
        • temporary jobs increased by +27,900.  
        • the number of people unemployed for 5 weeks or less decreased by -136,000 from 2,227,000 to 2,091,000.  The post-recession low was set two months ago at 2,034,000.

        The bottom line from this report is that employment is booming; wages still aren't. Although the headline number was average, the revisions to the last two months made them even more positive than the original great numbers. Meanwhile the prime age employment to population ratio, involuntary part time employment, and the underemployment rate all reached their best levels of this expansion. Based on the U6 number, we are probably only about 0.5% away from "full employment." Meanwhile, that big wage growth that was supposed to come because of that big tax cut for the wealthy and corporations last December?  Still hasn't happened. Don't hold your breath.

        Payrolls Miss: Only 157K Jobs Added In July As Hourly Earnings Come In Line -- As per the earlier preview, there were virtually no potential downsides to today's jobs report (with a possible adverse exception of tariffs), and as so often happens, moments ago the BLS reported that July payrolls missed "bigly", rising just 157K, missing expectations of 193K, and the lowest monthly print since March. The 157K July jobs is well below the average monthly gain of 203,000 over the prior 12 months. This was the biggest miss to expectations since October.  There is one potential culprit for the miss: the bankruptcy of Toys'R'Us: as SouthBay Research notes, jobs lost from the bankrupt retailer dragged payrolls lower by 31k.Offsetting the poor July print was the sharp upward revision to the June number which rose from 202K to 234K. The change in total nonfarm payroll employment for May was revised up from +244,000 to +268,000, and the change for June was revised up from +213,000 to +248,000. With these revisions, employment gains in May and June combined were 59,000 more than previously reported.  The unemployment rate dipped from last month's 4.0%, to print where consensus expected it would, at 3.9.  One reason why the market will likely ignore the poor print, however, is that average hourly earnings rose 0.3% in July, in line with expectations, while on an annual basis hourly earnings rose 2.7%, the same as June and also in line with the expected. Another potentially troubling number is that the average workweek for all employees on private nonfarm payrolls decreased by 0.1 hour to 34.5 hours in July, following an increase of 0.1 hour in June. However, the average workweek for production and nonsupervisory employees on private nonfarm payrolls remained at 33.8 hours. Digging into the numbers, there was distinct strength in energy jobs, with oil and gas extraction payrolls rose 7,500 from a year earlier. Gasoline stations payrolls rose 100 in July after rising 500 in June. Pipeline transport payrolls fell 200 in July after rising 300 in June. Petroleum and coal payrolls rose 800 in July after rising 200 in June Bloomberg notes that while 12K employees said they could not work due to bad weather, the historical average for July is 31k employees; Meanwhile, another 104k workers who usually work full-time could only work part-time due to the weather last month. Breaking down the job additions:

        • Employment in professional and business services increased by 51,000 in July and has risen by 518,000 over the year. Over the month, employment edged up in temporary help services (+28,000) and in computer systems design and related services (+8,000).
        • Manufacturing added 37,000 jobs in July, with most of the gain in the durable goods component. Employment rose in transportation equipment (+13,000), machinery (+6,000), and electronic instruments (+2,000). Over the past 12 months, manufacturing has added 327,000 jobs.
        • In July, employment in health care and social assistance rose by 34,000. Health care employment continued to trend up over the month (+17,000) and has increased by 286,000 over the year. Hospitals added 7,000 jobs over the month. Within social assistance, individual and family services added 16,000 jobs in July and 77,000 jobs over the year.
        • Employment in food services and drinking places continued to trend up over the month (+26,000). Over the year, the industry has added 203,000 jobs.
        • Construction employment continued to trend up in July (+19,000) and has increased by 308,000 over the year.
        • In July, employment in retail trade changed little (+7,000). Job gains occurred in general merchandise stores (+14,000), clothing and clothing accessories stores (+10,000), and food and beverage stores (+8,000). These employment gains were offset by a decline of 32,000 in sporting goods, hobby, book, and music stores, reflecting job losses in hobby, toy, and game stores.

        Econoday Economic Report: Employment Situation August 3, 2018: Slowing job growth may be a welcome outcome given the risk that economic activity may be pressing up against capacity limits. A 157,000 rise in nonfarm payrolls for July is at the low end of Econoday's consensus range but is still healthy growth that is strong enough to absorb new entrants into the labor market. And revisions to prior months are favorable, a net 59,000 gain with June revised up to 248,000 and May higher at 268,000 in what were two very strong months for job growth. The slowing in July is also favorable for the inflation outlook as average hourly earnings showed a little heat, up 0.3 percent which was expected but still firm. The year-on-year rate, at an as-expected 2.7 percent, has been steady which is a relief to Federal Reserve policy makers who are focused on keeping inflation stable at current rates. The payroll breakdown is led by temporary help services which rose 28,000 in a very strong gain that indicates employers, stacked up with orders and backlogs, are scrambling to meet demand. Construction payrolls also standout with a strong 19,000 gain in the latest indication of strength in this sector. Manufacturing payrolls rose 37,000 to more than double Econoday's consensus with trade & transportation, reflecting strong activity in the supply chain, up 15,000. Weakness in payrolls comes from mining, down 4,000 after a long series of gains, and also government payrolls which fell 13,000 to nearly reverse the prior month's 14,000 jump. The unemployment rate fell 1 tenth in July to 3.9 percent with the number of unemployed actively looking for a job down 284,000 to 6.280 million. The pool of available workers, which includes those wanting a job but aren't looking, fell 379,000 to 11.443 million which hints at capacity limits in the labor force, again underscoring the risk of wage inflation. The participation rate holds at 62.9 percent. Though the headline is softer than expected, this is yet another positive employment report that speaks to the strength of the labor market and the success, so far, of Federal Reserve policy. 

        Job Growth Cools Slightly but Unemployment Rate Still Drops Below 4% for July -- U.S. hiring cooled in July after more-robust gains than previously reported, while the unemployment rate slipped back below 4 percent and wage increases stayed contained, reinforcing a picture of steady labor-market growth in line with the Federal Reserve’s outlook for gradual interest-rate hikes. Non-farm payrolls advanced 157,000 after an upwardly revised 248,000 increase, Labor Department figures showed Friday. The median estimate of analysts surveyed by Bloomberg was for a gain of 193,000 jobs. Average hourly earnings increased 2.7 percent from a year earlier, unchanged from June and matching projections, while the jobless rate ticked down to 3.9 percent as forecast. Healthy consumer spending and business investment, supported by tax cuts and a bump in federal spending this year, are resulting in job gains that continue to be more than sufficient to accommodate population growth in the 10th year of the economic expansion. While the data mark a solid start to the quarter and should keep the Fed on track for an interest-rate hike in September, a widening trade war threatens to curb growth in the labor market. Average hourly earnings rose 0.3 percent from the previous month, also matching the median estimate of economists, though that was up from 0.1 percent in June. Wages have remained in a holding pattern below the highs of the last expansion, despite persistent complaints from employers that they’re struggling to find skilled workers and job openings near a record high. A separate measure, average hourly earnings for production and non-supervisory workers, also increased 2.7 percent from a year earlier, unchanged from the prior month. Upward Revisions Revisions added a total of 59,000 jobs to payrolls in the previous two months, according to the figures, resulting in a three-month average gain of 224,000. Monthly payroll gains of around 100,000 or even as low as 80,000 are seen as sufficient to push down the unemployment rate over time. The gain in payrolls was concentrated at private employers, which added 170,000 jobs, while the public sector cut 13,000 positions. Goods-producing jobs, which have been adding workers at a robust clip in recent quarters, posted further gains: The manufacturing sector increased payrolls by 37,000, the most since December and exceeding projections for 25,000. The data follow a factory survey earlier this week showing manufacturing growth cooled in July and executives were concerned about the impact of the trade war. 

        Economy Adds 157,000 Jobs in July, Little Evidence of Pick-up in Wage Growth: Dean Baker - Unemployment rates for workers without a high school degree hit a record low as less-educated workers continue to be biggest job gainers in recovery.The Bureau of Labor Statistics (BLS) reported the economy added 157,000 jobs in July. With upward revisions to the data from the prior two months, the average gain over the last three months was 224,000. The unemployment rate edged down to 3.9 percent as most of the rise in unemployment in June, which was due to increased labor force participation, was reversed. The employment-to-population (EPOP) ratio rose to 60.5 percent, a new high for the recovery.In spite of the healthy pace of job growth and the low unemployment rate, there continues to be little evidence of accelerating wage growth. Over the last year, the average hourly wage has risen by 2.7 percent. There is a very small uptick to 2.87 percent if we annualize the rate of wage growth for the last three months (May, June, and July) compared with the prior three months (February, March, and April). Interestingly, there was a modest fall in hours in July, which led to a decline in the index of aggregate weekly hours from 110.0 to 109.8. As a result, the average weekly wage actually declined slightly in July. ...In spite of the complaints about labor shortages in sectors such as manufacturing and trucking, we continue to see little evidence in wage growth. The average hourly wage for production workers in manufacturing has risen by just 2.7 percent over the last year, while in the larger trucking and warehousing category it has risen less than 2.5 percent.The story on the household side was overwhelmingly positive. In addition to the rise in EPOPs, the number of involuntary part-time workers fell by 176,000 to a new low for the recovery. The percentage of unemployment due to voluntary quits rose to 13.5 percent, largely reversing a drop in June. The unemployment rate for Hispanic workers fell to 4.5 percent, a new record low.Looking at 10 year age spans for prime age workers, EPOPs have been rising for both men and women, although only women between the ages of 25 and 34 have recovered to their prerecession peak EPOP. Even this group is still slightly below its 2000 peaks. The trends in EPOPs suggests there is further room for employment to expand.The unemployment rate for workers without a high school degree fell to 5.1 percent in July, the lowest rate since the BLS adjusted its education measures in 1992. This is 1.9 percentage points below its year-ago rate.Less-educated workers have been the big gainers in terms of employment in the last few years of the recovery. While the unemployment rate for workers with less than a high school degree is well below the prerecession level and even its 2000 low, the unemployment rate for workers with a college degree, at 2.2 percent, is still above its prerecession low of 1.8 percent and well above its 2000 low of 1.5 percent.Workers with just a high school degree also seem to be doing relatively better, with a 4.0 percent unemployment rate matching the prerecession low (it had been 3.9 percent in May), although still above the 3.2 percent low hit in 1999. The idea that the labor market is becoming increasingly tilted to favor more educated workers does not appear to be supported by the employment data.   This is, again, a solid jobs report in terms of job creation and lower unemployment. However, wage growth continues to be a problem, with wages barely outpacing inflation.

        The July Jobs Report in 8 Charts  -- U.S. employers added 157,000 jobs and the unemployment rate fell back to 3.9% in July. Over the past year, the number of jobs increased by 1.6%. That’s down slightly from last month, and the rate has gradually been trending downward since 2015. . Hourly wages rose 2.7%, while weekly wages rose 3%. Both figures are down somewhat since last month. With inflation picking up, hourly wages are running below the rate of inflation, meaning that real wages are slipping. . After climbing last month, the primary measures of unemployment all fell slightly this month. The broadest measure of unemployment, which includes discouraged workers who’ve stopped searching for work as well as part-time workers who want full-time work, fell to a new 17-year low. . The overall labor-force participation rate, defined as the share of the adult population either working or looking for work, has been little changed over the past four years. The share of the population with jobs, however, has steadily climbed. . Among workers ages 25 to 54, when retirement or education are less likely to keep people out of the labor force, participation rates are much higher. The share who are working reached the highest level since 2008. . The median spell of unemployment is lasting for 9.5 weeks. The duration is less than half of what it was in the aftermath of the 2007-09 recession. . Unemployment has fallen for workers of all education levels but workers with more education continue to have significantly lower unemployment rates. . Unemployment rates have come down across race and gender groups. White and Hispanic men saw notable drops this month. The unemployment rate for Hispanic men dropped to 3.2%, the lowest since the monthly records begin in 2003. The unemployment rate for white men dropped below 3% for the first time since the year 2000. 

        July’s Jobs Report: Solid jobs but little wage acceleration - Jared Bernstein - Today’s jobs report shows the U.S. labor market remains in a strong groove, with payrolls up 157,000 last month as the unemployment rate ticked down to 3.9 percent. The broader underemployment rate (“U-6”)–a more comprehensive measure of labor market slack–fell to 7.5%, its lowest rate since 2001, thanks to more part-timers finding the full-time jobs they seek.  Wage growth, however, remains a sore spot and despite further tightening, did not accelerate. Expectations were for a higher payroll number–190,000–but these monthly data are noisy. To better pull out the underlying signal, we apply JB’s monthly smoother that takes average job gains over 3, 6, and 12-month periods (these averages include a combined revision of 59,000 jobs added to the May and June payroll gains). As shown, trend growth rate for job growth is north of 200,000, a strong trend at this stage of expansion. I dig deeper into the wage story below, but the figures below show year-over-year percent changes in hourly earnings for all private-sector workers and for middle-wage workers (blue-collar factory workers and non-managers in services), along with a 6-months average to smooth out the noise. Over the past year, average hourly earnings before inflation were up 2.7% last month for both groups, the same growth rate as in June. For all private-sector workers, yearly wage growth has stayed remarkably steady, growing between 2.6-2.8 percent since last December. The moving average reveals a slight, welcome acceleration for middle-wage workers, but given recent pressures in topline consumer inflation (including energy prices), their real hourly wage growth is flat. Below, I offer a Q&A on these critical wage issues.  Many labor market watchers have long maintained that the “breakeven rate” for job growth–the monthly payroll gain associated with a stable unemployment rate–is 100,000 or less. But as the smoother shows, over the past year, monthly job gains have averaged 200,000, twice the alleged breakeven rate. Meanwhile, the jobless rate hasn’t fallen particularly sharply–it’s wiggled around between the high-3’s and the low-4’s–implying more labor supply than the low breakeven number implies. The labor force participation rate held steady at 62.9% last month–its same level as last July. But the closely watched employment rate for prime-age workers (25-54 year-olds) continues to slowly climb, up from 79.3% in June to 79.5% in July. The peak employment rate for this growth was 80.3% in January 2007, while its trough in 2011 was 74.8%. Thus, prime-age workers have recovered 4.7 out of 5.5 lost percentage points, or 85.5%, of their decline since the downturn. All told, this is simply a technical way to suggest that we have probably not hit full capacity in the job market; there are still sideliners to be pulled in. Low, stable core inflation (last seen at 1.9 percent; inflation including energy prices has grown faster) and only slowly accelerating wage growth corroborate this suspicion that there’s more room-to-run in the job market than is commonly believed.

        US Private Sector Job Growth’s Annual Pace Held Steady In July - Companies in the US added a moderate 170,000 employees to their ranks in July (seasonally adjusted), according to this morning’s update from the US Labor Department. The gain was well below June’s upwardly revised 234,000 increase but the latest rise represents a middling increase vs. recent history. Looking through the monthly noise paints a brighter picture by suggesting that the labor market’s expansion is ongoing and steady. Private payrolls advanced 1.9% last month vs. the year-ago level, roughly unchanged from the pace in the past two months. This year’s re-acceleration in job growth may be slowing, perhaps even peaking. But for the moment the numbers reflect a healthy degree of forward momentum that looks set to keep the broad economic expansion bubbling. Today’s report also showed that the unemployment rate for last month slipped below 3.9%, close to the lowest level in nearly two decades. Wage growth held steady at a moderate 2.7% increase on a year-over-year basis, based on average hourly earnings – a sign that suggests that inflation isn’t set to increase in the immediate future.The risk of a trade war between the US and China could create macro headwinds in the months ahead. The potential threat appeared to escalate today after China announced that it was imposing tariffs on US imports in retaliation to President Trump’s recent announcement of new taxes on Chinese goods. Trade-war risk is resonating with US corporations, according to recent data published by CB Insights. “Mentions of tariffs in earnings calls reached a historic high this past quarter,” the consultancy advised last month .It’s unclear how the trade issue will impact US economic activity in the months ahead. By some accounts, Trump’s aggressive policy is just a negotiating tactic that will eventually bear fruit for the US. Pessimists counter that the president is playing a reckless game that could potentially trigger a global trade war that takes a heavy toll on the US economy.No one knows which scenario will prevail, or if any trade-related blowback turns out to be a minor event for the US macro trend. What is clear is that the data published to date continues to reflect a solid pace of growth. Preliminary estimates for third-quarter GDP growth indicate a continuation of the strong increase in Q2, when output accelerated sharply. Earlier this week the Atlanta Fed’s initial Q3 estimate for GDP points to an even stronger gain unfolding in the current quarter. Although it’s too early in Q3 to take the projection seriously, it’s a reminder that the data at the moment looks encouraging and today’s update on payrolls doesn’t offer a reason to think otherwise.

        It's Not All Good: Here Is The Real Problem Deep Inside The Jobs Report - On the surface, today's jobs report was solid: despite the headline miss, July payrolls were in line with expectations when one strips out Toys "R" Us job losses and the volatile summer vacation-linked occupations. Wages also came in line, rising at 2.7% Y/Y (a number which however was the most negative since 2012 when adjusted for inflation). However, looking deeper between the lines reveals a potentially troubling problem. Consistent with historical experience however, the breakdown in job creation by wage has evolved throughout the expansion. At first, more of the new jobs are for people with skills. As the cycle matures, job creation rotates in favor of lower-wage positions. Lower-wage workers are more easily replaced and have less bargaining power, so benefits from the economic expansion do not trickle down until the labor market is especially tight. What this means in practical terms - as DB's Torsten Slok explains - is that over the last three years, i.e. during the later stage of the current expansion, cumulative low-wage employment has risen by 104%, outperforming the high-wage segment which increased by only 64% over the same period. In the three years preceding that, high-wage jobs were created at a much higher rate, increasing 251% compared to only 28% for low-wage jobs. And, as shown in the chart below, this means that high wage jobs have actually been declining throughout 2018 as employers have shifted their hiring to low-wage occupations, and replacing existing highly-paid workers with less productive, but cheaper, surrogates. This has significant consequences for wage growth: the greater the portion of low wage jobs as a percentage of total, the more subdued overall hourly earnings growth will be. Which is precisely the phenomenon we have observed in recent years, and is what has stumped the Fed for which wage inflation has repeatedly been defined as a "mystery." 

        Comments on July Employment Report -- Bill Mcbride - The headline jobs number at 157,000 for July was below consensus expectations of 190 thousand, however the previously two months were revised up by a combined 59 thousand. Overall this was a solid report.  Earlier: July Employment Report: 157,000 Jobs Added, 3.9% Unemployment Rate In July, the year-over-year employment change was 2.400 million jobs. This is solid year-over-year growth.  Wage growth was close to expectations in July. From the BLS: "In July, average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $27.05. Over the year, average hourly earnings have increased by 71 cents, or 2.7 percent."The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees. Nominal wage growth was at 2.7% YoY in July. Wage growth had been trending up, although growth has been moving more sideways recently. Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old. In the earlier period the participation rate for this group was trending up as women joined the labor force. Since the early '90s, the participation rate moved more sideways, with a downward drift starting around '00 - and with ups and downs related to the business cycle. The 25 to 54 participation rate increased in July to 82.1%, and the 25 to 54 employment population ratio increased to 79.5%. The participation rate had been trending down for this group since the late '90s, however, with more younger workers (and fewer 50+ age workers), the prime participation rate might move up some more. The employment population ratio is almost back to the pre-great recession highs.The number of persons working part time for economic reasons has been generally trending down, and the number decreased in July to the lowest level since November 2007. The number working part time for economic reasons suggests three is still a little slack in the labor market. These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 7.5% in June. This is the lowest level for U-6 since May 2001. This graph shows the number of workers unemployed for 27 weeks or more. According to the BLS, there are 1.435 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 1.478 million in June. Summary: The headline jobs number was below expectations, however the previous two months were revised up. The headline unemployment rate decreased to 3.9%, and U-6 decreased to 7.5% - the lowest rate since 2001. Wages growth was close to expectations. Overall, this was a solid report. For the first seven months of 2018, job growth has been solid averaging 215 thousand per month.

        The booming business of luxury chicken diapers -- Julie Baker never intended to become a figurehead of the luxury chicken-diaper industry. Before she launched her brand Pampered Poultry in 2010, she had never even heard of chicken diapers. Around 10 years ago, Baker was raising chickens with her daughter on their small farm in Claremont, New Hampshire when she first saw a YouTube video of a chicken wearing what looked to be an upside-down apron that stretched across its backside. The diaper, so to speak, was used to catch chicken poop so the birds wouldn’t leave droppings everywhere (chickens do not urinate separately from defecation. Their urine is technically in their excrement). “I'm like, ‘Oh my goodness, I so need to do that,’” Baker said. Baker’s daughter liked to bring her favorite chicken, an Old English hen named Abigail, inside their house, and because chickens poop close to a dozen times per day, Baker needed a better system for managing Abigail’s excrement.So she began sewing Abigail diapers out of cotton fabric, and soon other poultry owners asked if Baker could make diapers for their chickens, too. Baker, who was homeschooling her daughter at the time, decided to turn the task into an assignment — she and her daughter would launch an online store. Not because she thought anyone would visit, but because she thought it would be an informative experience. Then Baker started getting orders. Lots of them. Though at first she was mainly selling to her friends who attended poultry shows — to the true chicken die-hards who also like to enter their birds into pseudo-relay-races — in the last few years she’s noticed a shift in her customer base. Even people without deep connections to the poultry world want her diapers so they can take their chickens indoors (and post stylish photos on Instagram). Baker currently sells 500 to 1,000 diapers, which retail for $18 apiece, each month. “There's not a single state that I don't ship to,” Baker said.

        Newsroom employment dropped nearly a quarter in less than 10 years, with greatest decline at newspapers - Newsroom employment across the United States continues to decline, driven primarily by job losses at newspapers. And even though digital-native news outlets have experienced some recent growth in employment, too few newsroom positions were added to make up for recent losses in the broader industry, according to a Pew Research Center analysis of Bureau of Labor Statistics Occupational Employment Statistics survey data. From 2008 to 2017, newsroom employment in the U.S. dropped by 23%. In 2008, about 114,000 newsroom employees – reporters, editors, photographers and videographers – worked in five industries that produce news: newspaper, radio, broadcast television, cable and “other information services” (the best match for digital-native news publishers). By 2017, that number declined to about 88,000, a loss of about 27,000 jobs. This decline in overall newsroom employment was driven primarily by one sector: newspapers. Newspaper newsroom employees dropped by 45% over the period, from about 71,000 workers in 2008 to 39,000 in 2017.

        Nothing misleading about this: Typical workers’ pay and productivity have diverged ---Jason Furman has an interesting piece on Vox today, claiming that the “puzzle” of weak wage growth in the face of low unemployment is not really a puzzle at all.There’s a lot in this piece to agree with and a lot to quibble with. But, this post will just note one quick quibble. Furman describes a chart of ours—one we like a lot—as “misleading.” Here’s the full paragraph from him:Productivity does a good job of explaining the evolution of average wage growth in the United States as well, especially prior to 2000. (But it does a decent job even since then, even with the wage slowdown.) From the end of World War II until around 2000 average wages grew almost lock-step with productivity — if you use the same measure of inflation for both concepts, so the comparison is apples to apples. Often, presentations of the comparison between wages and productivity, as in this much-reproduced graphic, use a higher inflation measure to adjust wages than productivity and thus produce a misleading impression. This is a criticism we’ve seen, and addressed, before, so forgive me if I seem a tad sensitive on this, but I want to be really clear: there is nothing misleading about our presentation of this data. The wedge we show between our measure of pay and economy-wide productivity is indeed driven overwhelmingly by rising inequality and not the differing deflators. In this figure we measure the pay of typical workers, not average wages. We define “typical” as either the median worker (the one in the middle of the wage distribution) or the average pay of production and non-supervisory workers (a group consisting of about 80 percent of the private-sector workforce). We don’t use average pay precisely because, as Jason notes, average pay kept up pretty well with economy-wide productivity pre-2000. This means that the bulk of the rise in inequality over that time was driven by inequality within wages, or the divergence between average and typical pay (as we clearly show—see the previous link).

        Almost 80% of US workers live from paycheck to paycheck. Here's why -  Robert Reich = The official rate of unemployment in America has plunged to a remarkably low 3.8%. The Federal Reserve forecasts that the unemployment rate will reach 3.5% by the end of the year. But the official rate hides more troubling realities: legions of college grads overqualified for their jobs, a growing number of contract workers with no job security, and an army of part-time workers desperate for full-time jobs. Almost 80% of Americans say they live from paycheck to paycheck, many not knowing how big their next one will be. Blanketing all of this are stagnant wages and vanishing job benefits. The typical American worker now earns around $44,500 a year, not much more than what the typical worker earned in 40 years ago, adjusted for inflation. Although the US economy continues to grow, most of the gains have been going to a relatively few top executives of large companies, financiers, and inventors and owners of digital devices. America doesn’t have a jobs crisis. It has a good jobs crisis. When Republicans delivered their $1.5tn tax cut last December they predicted a big wage boost for American workers. Forget it.  Wages actually dropped in the second quarter of this year.   Not even the current low rate of unemployment is forcing employers to raise wages. Contrast this with the late 1990s, the last time unemployment dipped close to where it is today, when the portion of national income going into wages was 3% points higher than it is today.  Two fundamental forces have changed the structure of the US economy, directly altering the balance of power between business and labor. The first is the increasing difficulty for workers of joining together in trade unions. The second is the growing ease by which corporations can join together in oligopolies or to form monopolies. The US government has essentially given a green light to companies seeking to gain monopoly power over digital platforms and networks (Google, Apple, Amazon, Facebook); wanting to merge into giant oligopolies (pharmaceuticals, health insurers, airlines, seed producers, food processors, military contractors, Wall Street banks, internet service providers); or intent on creating local monopolies (food distributors, waste disposal companies, hospitals). This means workers are spending more on such goods and services than they would were these markets more competitive. It’s exactly as if their paychecks were cut. Concentrated economic power has also given corporations more ability to hold down wages, because workers have less choice of whom to work for. And it has let companies impose on workers provisions that further weaken their bargaining power, such as anti-poaching and mandatory arbitration agreements

        Fewer Americans are making more than their parents did—especially if they grew up in the middle class Brookings. -- One of the most striking social science findings of recent years is that only half of today’s 30-year-olds earn more than their parents. Raj Chetty and his coauthors showed that rates of absolute mobility—that is, the share of children with higher inflation-adjusted incomes than their parents—declined from around 90 percent for children born in 1940 to just 50 percent for those born in 1984. Just in case you’ve been snoozing for the last year and half, here’s the chart: Surprisingly, the bulk of the decline between the 1940 and 1980 cohorts was concentrated toward the top of the income distribution. As Aparna Mathur and Cody Kallen of AEI wrote in “Poor rich kids?”: “[P]erhaps the most puzzling—and least commented upon—finding is the large positive correlation between the parent’s income and the decline in absolute mobility over the years. Put more simply, the richer the parents, the larger has been the decline in mobility for their kids.”But the 1940 cohort may be unusual for many reasons, most notably the influence of World War II and the postwar economic boom. If we instead begin with the 1950 cohort, then it appears that absolute mobility has fallen most for children with parents in the middle class. Comparisons to the 1960 and 1970 cohorts reveal a similar story of middle-class decline.  Here we dig a little deeper into the rates of absolute mobility for those born on different rungs of the income ladder, and in different birth cohorts. The big drop in absolute mobility for those at the top of distribution occurs between the 1940 and 1950 birth cohorts. Since then, the middle class has suffered greater losses of absolute mobility than those at the top or bottom.

        More 30-Year-Olds Still Living With Their Parents, Study Finds --Young adults are now more likely to live with their parents than in any other living arrangement, according to new analysis of demographic data published by Axios, reflecting trends of the last half decade. And it's not just a college grad thing anymore as even 30-year-old millennials are now more likely to stay at home while still paying off school loan debt and earning the same or less income than boomers.Axios concludes of what it is to be 30 then and now that, "In the mid-to-late-20th century, the American economy and culture were ripe for 30-year-old men, who — more than European and Japanese — typically landed well-paid careers, bought homes, and supported large families. But since then, getting ahead has become much harder."So what forces continue to steer people into their parents’ basements?  Naturally, Millennials probably took it for granted that they'd successfully imitate their parents and even surpass them in areas of establishing a financially secure family by their late 20's or early 30's, being debt-free while saving for retirement, and earning higher wages than their parents, but the numbers suggest this isn't happening.Though now comprising almost a quarter of the population and as the largest demographic currently in the workforce, their median salaries are lower or the same as the prior generation, yet as Axios finds "the financial burdens they carry are heavier, limiting how much their lifestyle can mirror that of their parents." Here's what it is to be your parents' thirty vs. being thirty today by the numbers:

        "I Go Days Without Eating": Some Amazon Workers Left Homeless After Workplace Injuries -- Workplace safety incidents have been a major topic of discussion at certain high-flying companies over the last couple of months, but one of the names that hasn’t recently been mentioned has been Amazon. With the release of a new report by The Guardian early this week, that may very well change.Amazon employees who suffer workplace safety incidents may be forgotten and left behind - with one report of a woman who was literally left "homeless", living in her car in a fulfillment warehouse parking lot and going "days without eating". Other employees claim that Amazon has failed to accept their workman's compensation filings and that the company has tried to "settle" with them for a pittance in a manner that absolves Amazon of all liability.The new expose published over the weekend came just days after it was widely reported that Amazon CEO Jeff Bezos' net worth had eclipsed $150 billion after Amazon stock rallied to all time highs after its most recent earnings report. The article goes into depth on several workplace safety incidents that left warehouse and fulfillment center employees unable to perform their duties at work and also reportedly neglected by the company when they sought medical care, paid time off, workman's compensation or other reasonable accommodations for their injuries. The article highlights Amazon warehouse worker Vickie Allen. Her story begins in October of last year. Her station at the Amazon warehouse where she worked was missing a key piece of safety equipment known as a brush guard, according to The Guardian's report, which prevented packages from falling onto the floor.Reportedly, Amazon didn’t replace this piece of safety equipment and therefore Vicky was forced to improvise and create her own solution, using a tote bin to substitute for the guard. After counting in an awkward position, due to the lack of the brush guard, she ultimately wound up hurting her back. Amazon reportedly provided her with nothing more than a heating pad, as a solution. From there, she wound up driving 60 miles back-and-forth to work only to be sent home each day without pay until she reportedly tried to get worker’s compensation. The article notes that it took the company until June 2018 to fix the station and that they offered her a week's paid leave for nine months of issues:

        A New Broadband Network Is Pitching Surveillance Enhancements to Cops Across the Country --The latest technologies promise cops the ability to whip out a smartphone, take a snapshot of a passerby, and instantly learn if that person is in an immigration or gang database.A federal broadband program, designed after 9/11 to improve first responder communication during emergencies, will enhance this sort of capability and integrate it into an internet “super highway” built specifically for police and public safety. The program, called FirstNet, is already expanding the surveillance options available to law enforcement agencies across the country.According to publicly available documents, as well as interviews with program participants, stakeholders, and government researchers, FirstNet will help agencies like U.S. Customs and Border Protection communicate with local police, deliver more information to officers’ hands, accelerate the nascent law enforcement app industry, and provide public safety agencies with new privileges and powers over AT&T’s commercial broadband network.The program will also hasten these agencies’ migration from public radio frequencies to encrypted broadband networks, potentially eliminating one resource that local newsrooms and citizens have historically relied upon to monitor police and first responders. FirstNet is a public-private partnership that creates a dedicated lane for public safety agencies within AT&T’s existing broadband network. As of January, all U.S. states had opted in to FirstNet, meaning that they agreed not to build their own competing broadband lanes for law enforcement and public safety. Then, in March, AT&T announced that FirstNet’s core — the infrastructure that isolates police traffic from the commercial network — had become operational at last.

        Five months after strike, West Virginia teachers say “nothing has changed” --As West Virginia educators and school workers return for the 2018–19 school year, their conditions of work remain, for all intents and purposes, the same as when they began their courageous statewide wildcat strike last February. In a dirty double-cross, the unions forced through a paltry 5 percent wage bump—for teachers whose salaries were 48th in the nation out of 50—while sabotaging the fight for the main demand, a “fix” to the Public Employees Insurance Agency (PEIA).The American Federation of Teachers-West Virginia (AFT-WV), the West Virginia Education Association (WVEA), and the West Virginia School Service Personnel Association (WVSSPA)—and their pseudo-left apologists—BadAss Teachers, Jacobin magazine, the Democratic Socialists of America (DSA) and the International Socialist Organization (ISO)—then pronounced this sellout a “victory.” This has proven to be a self-serving lie.Instead of fighting for a “fix” to PEIA, the union officials, AFT-WV President Christine Campbell, WVEA President Dale Lee and WVSSPA executive director Joe White, took seats on the umpteenth PEIA task force, a rubber-stamp for West Virginia big business, claiming they would fight for teachers and school workers. This too was a betrayal and a fraud.The escalating walkout of educators, which began February 22, defied state anti-strike laws and repeated back-to-work orders by the union executives. But from the moment the strike in West Virginia erupted, in the form of insurrectionary walkouts in the southern coal counties, until its forced termination, the unions conspired with state officials to shut down the struggle. Their main aims were forcing through a deal acceptable to the coal, oil and natural gas barons who dominate the state and forestalling a nationwide movement of educators to reverse years of budget cuts. However, the strike was summarily ended by the bureaucracy March 6 at the point that public support was snowballing, other states were poised to strike and communication workers were walking out. The stab-in-the-back was accomplished under the direct supervision of American Federation of Teachers President Randi Weingarten, National Education Association President Lily Garcia and an army of union functionaries who descended on Charleston to smother the strike.

        For Sale- Survey Data on Millions of High School Students — Three thousand high school students from across the United States recently trekked to a university sports arena here to attend an event with an impressive-sounding name: the Congress of Future Science and Technology Leaders. Many of their parents had spent $985 on tuition.Months earlier, the teenagers had received letters, signed by a Nobel Prize-winning physicist, congratulating them on being nominated for “a highly selective national program honoring academically superior high school students.”  Through their schools, many students in the audience had taken a college-planning questionnaire, called MyCollegeOptions. Others had taken surveys that came with the SAT or the PSAT, tests administered by the College Board. In filling out those surveys, the teenagers ended up signing away personal details that were later sold and shared with the future scientists event.  “It wasn’t like I sought out filling in my information for the College Board to sell to other companies,” said Adriana Bay, 19, a sophomore at Vanderbilt University this fall who was solicited by the future scientists event when she was in high school. “You are giving them the liberty to profit off your information.” Consumers’ personal details are collected in countless ways these days, from Instagram clicks, dating profiles and fitness apps. While many of those efforts are aimed at adults, the recruiting methods for some student recognition programs give a peek into the widespread and opaque world of data mining for millions of minors — and how students’ profiles may be used to target them for educational and noneducational offers. MyCollegeOptions, for instance, says it may give student loan services, test prep and other companies access to student data. These marketing programs are generally legal, taking advantage of the fact that there is no federal law regulating consumer data brokers. They also face little oversight because federal education privacy laws make public schools, and not their vendors, directly responsible for controlling the spread of student data.

        Florida Launches Gun Confiscation Program, 467 Forced To Surrender Guns -- More than 467 people in Florida have been ordered by the government to surrender their firearms since March under a new law passed after the deadly Parkland shooting in February, according to a local ABC broadcaster. The Risk Protection Order, is a “Red Flag” law that Florida Gov. Rick Scott (R) signed several weeks after former student Nikolas Cruz killed 17 people at Stoneman Douglas High School in March, allows the local government to disarm the civilian population if a judge determines they are a threat to themselves or others.Under the new law, state officials have the ability to file risk-protection petitions against irresponsible gun owners in court, which could result in local law enforcement stripping that individual of the second amendment.Recently, Sgt. Jason Schmittendorf, who is employed by the Pinellas County Sheriff’s office, told ABC News that Tampa Bay officers have “taken in about 200 firearms and around 30,000 rounds of ammunition.”“You’ve got an AK-47 style here and an AR-15 style there. We’ve got some rifles and a cache of handguns,” said Schmittendorf, who showed the ABC News team some of the weapons confiscated under the new law. The Sheriff’s office has assembled a five-person team devoted to working only risk protection cases. Since March, the group has filed 64 risk protection petitions in court, the second highest number of cases in the state. Broward County leads with 88 risk protection petitions (as of early-July). “It’s a constitutional right to bear arms and when you are asking the court to deprive somebody of that right we need to make sure we are making good decisions, right decisions and the circumstances warrant it,” explained Pinellas County Sheriff Bob Gualtieri when asked by ABC News why he decided to form an entire unit dedicated to upholding the new law. To get more clarity on Sheriff Gualtieri’s thought process, he also happens to be the chairman of the Marjory Stoneman Douglas High School Public Safety Commission, a task force designed to prevent future school shootings.

        DeVos to repeal Obama-era rule penalizing for-profit colleges that leave students with poor job prospects: report | TheHill: Education Secretary Betsy DeVos is planning to rollback an Obama-era crackdown on for-profit colleges that leave students in debt and with poor job opportunities, The Wall Street Journal reported Thursday. Trump administration officials have said Obama's "gainful employment" provision, which never fully went into effect, unfairly targets for-profit colleges. Schools that offered career-training programs would have been required to publish data about their graduates under the rule, and federal aid could have been cut off to schools that had high student debt post-graduation, potentially shutting down thousands of programs. Current administration officials originally delayed the provision and said they would rewrite the rules to reach a wide variety of programs that are performing poorly, according to people familiar with the plan. A spokesperson for the Education Department told The Hill they were unable to comment until the rule is finalized and published. The rule repeal would come shortly after DeVos proposed establishing a new federal standard for what constitutes “misrepresentation” when determining whether a for-profit college defrauded students. Students will be required to prove “reckless disregard” on behalf of their school when a debt forgiveness claim is being considered. 

        College Course Disputes Idea That Heterosexual Sex Is "Natural" Eugene Lang College, part of The New School in Lower Manhattan, will offer a course next semester for students who wish to fight “heterosexist” explanations of animals and nature.  Taught by Heather Davis, “Queer Ecologies” is a four-credit course offered by the school’s Culture and Media department for students who wish to “disrupt prevailing heterosexist discursive and institutional articulations of sexuality and nature.”  According to the professor, these "heterosexist" explanations of sexuality and nature often involve referring to male/female animals. According to the course description, students will be taught to “reimagine evolutionary processes, ecological interactions, and environmental politics in light of queer theory” by drawing from research in fields such as feminist science studies and environmental justice.  Students will also “draw important connections between the material and cultural dimensions of environmental issues, and examine the ways in which sex and nature are understood in light of multiple trajectories of power and matter,” the description adds.  During an interview with Campus Reform, Davis explained that queer ecologies is an “interdisciplinary field that examines the relationship between sexuality and nature, thinking beyond the boundaries of assuming that heterosexuality is the norm or standard.” The field “inquires into the sexual lives of animals, plants, and bacteria—lives that are often much more strange, adaptable, and queer than anything humans do,” she elaborated. “It also seeks to critique how heterosexuality is presumed as natural.” While it is not immediately apparent why the school’s Culture and Media department is offering the class, Davis explained that the course takes aim at how institutions like media outlets and schools often perpetuate myths about sex, gender, and the environment. Such institutions, Davis said, often promote the idea that “mammals only use sex for reproduction, and that this is always heterosexual sex,” for example. “We can see this in how queerness is often said to be ‘unnatural’...rather than thinking about how queer sex might actually be helpful to the survival of species,” Davis noted.

        Democratic Socialists Set Up Shop On Campuses Nationwide - The Young Democratic Socialists of America organization now claims to have more than 250 chapters on campuses across the country, a dramatic increase from just 15 chapters in 2016.  YDSA is the student-focused branch of the Democratic Socialists of America (DSA) which is “a political and activist organization” that seeks to “empower working people” and has several ongoing campaigns, including Medicare for All, Strong Unions, and Electoral Power.  The YDSA mission is to “build the power of students, campus communities, and youth to fight for equality, justice, and democratic socialism,” according to its constitution, which was last updated in August 2017.+ In June 2017, YDSA launched a “Fall Campus Drive” with the goal of registering 100 new chapters by the fall semester, noting that it had already expanded from just 15 chapters to 50 chapters in 27 states over the preceding year.“When we originally launched the YDSA fall campus drive, we set the bold target of 100 campuses across the country,” the recognized chapter list states. “Currently, we've received over 250 campuses register for the fall drive! This explosion in interest shows that this semester will be the biggest ever for YDSA. We will be able to build a mass movement for democratic socialism and justice at campuses across the country.”While YDSA states that more than 250 chapters are now registered, the list includes only 218 groups, 27 of which are high school chapters.

         UGA Dean Attacked On Twitter For Having GOP Friend -- A University of Georgia professor issued an apology to those he had “offended” when he congratulated an old friend on becoming the state’s Republican candidate for governor.Charles Davis, dean of the Grady College of Journalism and Mass Communication at UGA, sent the offending tweet shortly after Brian Kemp won the GOP primary Tuesday night, noting that he had been friends with Kemp since childhood and considers him a “nice guy.”“I went to high school with GOP guv candidate @BrianKempGA. We played YMCA ball from childhood. Politics be damned. He is a nice guy, always was. Kind to a fault,” Davis tweeted. “He’s a friend, always has been, and will be when we’re old(er) and grey(er). That’s how all this should work, people.” Rather than embracing Davis’ call for civility, liberals quickly denounced him for having something nice to say about a Republican, declaring that Kemp is a “racist” who “spews bigoted and dangerous rhetoric,” and insinuating that Davis must therefore be no different. “You’re a straight white man. Of course he was nice and kind to you. Racists are generally nice to their own kind,” one user replied.

        Rigging the student loan system…a reminder -- Americans today hold $1.5 trillion in student debt, and recent research reveals that the effects of this outsized and growing debt are much more devastating than previously thought, particularly for communities of color. From bankruptcy protections and lower interest rates and fees to safeguards from fraudulent educational programs and even full student debt cancellation, economic justice and higher education advocates continue to ask Congress and the Department of Education to help borrowers who are trapped by student loan debt. These advocates have fought tooth and nail for even the “small” victories they’ve had. Borrower advocates, for example, have been struggling for the last four years to get the Department of Education to develop and implement a simple process to invalidate the debt of borrowers who are defrauded by their schools; Congress tasked the Department of Education with doing this nearly 25 years ago. The difficulty of achieving relief for borrowers is all the more frustrating given how easy it has been for others who seek—and receive — a helping hand from the federal student loan program. Other participants in the student loan system, including lenders, servicers, debt collectors, and even colleges, routinely pursue bailouts , handouts, or flexibility from Congress and the Department of Education — and most of the time, they get it. In each case, government official s justify their actions as being in the best interests of students, student loan borrowers, or taxpayers. Upon closer examination, however, these claims do not hold up.

        The Student Debt Crisis Is Hitting These Ten States The Hardest The student debt crisis in America continues to expand. According to the latest figures from the New York Federal Reserve, the total Student Loans Owned and Securitized, Outstanding (SLOAS) grew to over $1.52 trillion in July. Although the debt crisis affects millions of Americans, the debt is not spread evenly across the country, as millennials in some states are much more likely to be weighed down by student loans.  A new study by personal finance website GOBankingRates revealed that graduates in the northeastern states have the heaviest financial burdens. Of these states, millennials in New Hampshire have outstanding student loans around $36,367 — that is the highest rate in the country, according to the Institute for College Access and Success’s 12th Annual Student Debt report.  Geographically, GOBankingRates noticed an alarming trend of northeastern states made the top ten list for highest average debt and highest percentage of graduates with debt. As shown below, New Hampshire and Pennsylvania made the list while Connecticut, Maine, Massachusetts and Rhode Island were among the highest for average debt.

        1. New Hampshire Average student loan debt: $36,367 Percent of graduates with debt: 74%
        2. Pennsylvania Average student loan debt: Percent of graduates with debt: 68%
        3. Connecticut Average student loan debt: $35,494 Percent of graduates with debt: 60%
        4. Delaware Average student loan debt: $33,838 Percent of graduates with debt: 63%
        5. Minnesota Average student loan debt: $31,915 Percent of graduates with debt: 68%
        6. Massachusetts Average student loan debt: $31,563 Percent of graduates with debt: 60%
        7. South Dakota Average student loan debt: $31,362 Percent of graduates with debt: 75%
        8. Maine Average student loan debt: $31,295 Percent of graduates with debt: 55%
        9. Alabama Average student loan debt: $31,275 Percent of graduates with debt: 50%
        10. Rhode Island Average student loan debt: $31,217 Percent of graduates with debt: 61%

        It makes sense that the Northeast states are carrying higher student loan debt, according to Adam Minksy a lawyer specializing in student loan law. “Certain states have less robust, affordable state education systems,” Minsky tells CNBC.  States like California and Florida have major state universities systems that are affordable, so many millennials chose those institutions with the least amount of debt, Minsky added. GOBankingRates also noticed states like Utah, New Mexico, and California had the lowest percentage of graduates with debt at just 43 percent and the lowest average debt around $20,000. In fact, the states with the second- and third-lowest percentages of graduates with debt, Wyoming and Arizona, were also both among the ten states with the lowest debt.

        “Paid Off” A Noir Style Game Show to Pay off Student Loans -- I do not know what generation Maxwell Strahan of Huffpost is of; but if he is of the Millennials, he has it correct in his HuffPost article. . . “The Greatest “Crisis of My Generation is Now a Dystopian Show.” The crisis? Student Loan debt, the penalties associated with it, and the inability to declared bankruptcy are the greatest crises facing younger generations and will also be for this nation when millions of them default. The Show? “Paid Off!”   There is a certain degree of cynicism and blackness to this show which places it in a “film noir” category or show noir (if such a category existed) to be precise. Young students saddled with a life time of debt from profit and non-profit institutions to which there is no escape unless disabled or dead. The blackness to this show comes when the indebted contestants turn to answering zany questions taken from stranger categories in the hope of eliminating their student loan debt which should not be such a burden if they could work in the field they were trained or educated in and make enough to pay off the debt. If delinquent, the burden increases, and rather than capitalize the accrued interest, the student must pay the interest before they can pay down the principal which acquires more interest. It is a vicious cycle created by a Congress favoring financial institutions over constituents. If an 18 year old student received the right advice and chose the correct education with adequate funding; they were probably successful, courted by others, and can now sit back and critique those who were less fortunate. If the 18 year old was not so fortunate to have had the right advice, direction, and low-cost financing or a paid-for education; they potentially ended up saddled with a lot of debt, indentured to a life time of payments, and a degree which possibly will do little for them. Having a college education has turned into a crap-shoot for many as it may not offer the expected monetary returns.   Or chose poorly because of a lack of knowledge, being sold a worthless product by hucksters, and a lack of jobs. The “Paid Off,” show is a take-off of Jeopardy (see the clip below) except instead of winning money, the contestants gets a chance to eliminate student loan debt. The “Paid Off” host Michael Torpey asks each x-student-player a series of Jeopardy-style questions from selected categories which each must win. Each player clicks on a button and whoever is first and answers correctly wins that question and receives multiples of $100. At the end of the game, the person with the most $dollars goes to the final round and must answer 8 questions in 60 seconds. If they are successful, the show pays their student debt in total. A clip of the show:

        Why Our Public Pensions Need Stress Tests -- State and local legislators and budget managers face a challenge: how to ensure that their public-employee pension systems can pay future obligations without sacrificing fiscal discipline or cutting core services. Stress testing their pension plans is an important way to deal with that challenge.There's no disputing the dimensions of the challenge. State and local governments today are grappling with a cumulative unfunded pension liability of $1.6 trillion -- a larger deficit in both absolute terms and as a percentage of GDP than at any time before the bottom fell out of the economy 10 years ago. And because of consistent underfunding, volatile investment returns and rising benefit costs, the financial health of most state plans is now vulnerable to even a mild recession. In some cases these systems face a real risk of insolvency. In 2016, the most recent year for which full data are available, state pension plans paid out $214 billion in benefits while taking in only $130 billion from employee and employer contributions, continuing a trend that has worsened since 2000. As the difference between payments to beneficiaries and contributions to the plans grows, states become more dependent on pensions' investment income to pay for anticipated benefits. And when investment performance falls short of expectations, many states are likely to see a drop in plan assets. Stress testing can help policymakers prepare their pension plans for the next economic downturn. Stress testing is a rigorous analysis showing likely outcomes under various scenarios of tax collection, market performance and fiscal health, and provides an underpinning for policymakers to understand and respond to the impact of economic volatility on pension plans.  The Pew Charitable Trusts has developed a model to help policymakers make decisions to strengthen the long-term sustainability of their pension plans. The model relies heavily on existing reporting practices and data that state and local governments already collect. That's good news for officials looking to limit the administrative burden and costs of stress testing, especially when those costs are weighed against the benefit to taxpayers and retirees of a well-managed pension system.

        Koch-Funded Hit Piece Backfires: Shows Medicare for All Would Save ‘Whopping $2 Trillion’ Over Ten Years While Covering Everybody - If the billionaire Koch brothers really want to undermine the economic case for Medicare for All, they have a funny way of showing it.  Judging by the headlines alone, it would appear that the newly published study projecting that Sen. Bernie Sanders' (I-Vt.) widely popular Medicare for All plan would cost $32.6 trillion over the next decade was conducted by an official, neutral body seeking the facts, not pushing an agenda.  "Even if you take the report's headline figures at face value, the picture it paints is that of an enormous bargain. We get to insure every single person in the country...and save everyone from the hell of constantly changing health insurance all while saving money." —Matt Bruenig, People's Policy ProjectRead a bit further, though, and you'll discover that the analysis—released Monday morning—was produced by the George Mason University-based Mercatus Center, which has received millions of dollars in funding from the right-wing billionaires Charles and David Koch, who have previously expressed support for abolishing Medicare and Medicaid entirely."This grossly misleading and biased report is the Koch brothers' response to the growing support in our country for a 'Medicare for All' program," Sanders said in response to the study, which was penned by Charles Blahous, who previously worked as a senior economic adviser to former President George W. Bush. But as Matt Bruenig of the People's Policy Project notes—though absent or buried in much of the initial reportingeven the Koch brothers' numbers, which Sanders says are vastly inflated, demonstrate that the "U.S. could insure 30 million more Americans and virtually eliminate out-of-pocket healthcare expenses" while saving "a whopping $2 trillion" in the process.*

        Becoming mentally ill increases your risk of becoming a crime victim -- People are frightened of being assaulted by someone who is mentally ill, although this risk is exaggerated. In many ways, however, people with mental disorders are the population at risk. In JAMA Psychiatry, Kimberlie Dean and her colleagues show that becoming mentally ill increases your risk of being a crime victim. This investigation was a longitudinal national cohort study using register data in Denmark. Participants were a cohort of more than 2 million persons born between 1965 and 1998 and followed up from 2001 or from their 15th birthday until December 31, 2013. Incidence rate ratios (IRRs) were estimated for first subjection to crime event (any crime and violent crime) reported to police after onset of mental illness. The IRRs were adjusted for cohort member’s own criminal offending, in addition to several sociodemographic factors. In a total cohort of 2,058,063 (51% female), the adjusted IRRs for being subjected to crime associated with any mental disorder were 1.49 (95% CI, 1.46-1.51) for men and 1.64 (95% CI, 1.61-1.66) for women. The IRRs were higher for being subjected to violent crime at 1.76 (95% CI, 1.72-1.80) for men and 2.72 (95% CI, 2.65-2.79) for women. The strongest associations were for persons diagnosed as having substance use disorders and personality disorders, but significant risk elevations were found across almost all diagnostic groups examined. Onset of mental illness is associated with increased risk of exposure to crime, and violent crime in particular. Elevated risk is not confined to specific diagnostic groups. Women with mental illness are especially vulnerable to being subjected to crime. Individual’s own offending accounts for some but not all of the increased vulnerability to being subjected to crime. Why does the onset of mental illness increase your risk of being a crime victim? Jeff Swanson and Charles Belden argue that a principal reason is that becoming ill increases the likelihood that you will become poor. Poverty, in turn, increases your exposure to crime.

        Physicians aren’t ‘burning out.’ They’re suffering from moral injury - Physicians on the front lines of health care today are sometimes described as going to battle. It’s an apt metaphor. Physicians, like combat soldiers, often face a profound and unrecognized threat to their well-being: moral injury.  Moral injury is frequently mischaracterized. In combat veterans it is diagnosed as post-traumatic stress; among physicians it’s portrayed as burnout. But without understanding the critical difference between burnout and moral injury, the wounds will never heal and physicians and patients alike will continue to suffer the consequences. Burnout is a constellation of symptoms that include exhaustion, cynicism, and decreased productivity. More than half of physicians report at least one of these. But the concept of burnout resonates poorly with physicians: it suggests a failure of resourcefulness and resilience, traits that most physicians have finely honed during decades of intense training and demanding work.  We believe that burnout is itself a symptom of something larger: our broken health care system.  The term “moral injury” was first used to describe soldiers’ responses to their actions in war. It represents “perpetrating, failing to prevent, bearing witness to, or learning about acts that transgress deeply held moral beliefs and expectations.” Journalist Diane Silver describes it as “a deep soul wound that pierces a person’s identity, sense of morality, and relationship to society.” The moral injury of health care is not the offense of killing another human in the context of war. It is being unable to provide high-quality care and healing in the context of health care. Most physicians enter medicine following a calling rather than a career path. They go into the field with a desire to help people. Many approach it with almost religious zeal, enduring lost sleep, lost years of young adulthood, huge opportunity costs, family strain, financial instability, disregard for personal health, and a multitude of other challenges. Each hurdle offers a lesson in endurance in the service of one’s goal which, starting in the third year of medical school, is sharply focused on ensuring the best care for one’s patients. Failing to consistently meet patients’ needs has a profound impact on physician wellbeing — this is the crux of consequent moral injury.

        Missed Visits, Uncontrolled Pain And Fraud: Report Says Hospices Lacks Oversight -- Elderly patients spent over two weeks in uncontrolled pain or respiratory distress. Acute care was rare on weekends. And recruiters went door to door pitching fraudulent schemes, luring healthy patients to sign up for hospice in exchange for free housecleaning and medicine.These details appear in a report on hospice released Monday by a government watchdog agency calling on federal regulators to ramp up oversight of a booming industry that served 1.4 million Americans in 2016.The report from the Office of Inspector General (OIG) at the Department of Health and Human Services sums up over 10 years of research into inadequate care, inappropriate billing and outright fraud by hospices, which took in $16.7 billion in Medicare payments in 2016.The Medicare hospice benefit aims to help patients live out their final days in peace and comfort: It pays for agencies to send nurses, aides, social workers and chaplains to visit patients who are likely to die within six months and who agree to forgo curative treatment for their terminal illness. Most of the time, this care takes place where the patient already lives — their home, nursing home or assisted living facility.A Kaiser Health News investigation last year revealed that while many of the nation’s 4,000-plus hospices earn high satisfaction rates on family surveys, hundreds fell short of their obligations, abandoning families at the brink of death or skipping other services they had pledged to provide. The OIG report points to similar gaps in care and raises concerns that some hospices are milking the system by skimping on services while taking in daily Medicare payments.

        US hospitals fail to prevent unnecessary maternal deaths and injuries -- Each year in the United States some 700 mothers die giving birth, while over 50,000 are severely injured. According to an investigation published by USA Today last Thursday titled “Deadly Deliveries,” the majority of these deaths and injuries could have been prevented if hospitals had followed best practices for delivering babies.The Global Burden of Disease Study 2015, put together by researchers at the World Health Organization and published in 2016 in the medical journal The Lancet, reported that maternal deaths in most industrialized countries have either declined or remained flat since the 1990s, with countries in Western Europe falling below 10 maternal deaths per 100,000 births.By contrast, the maternal death rate in the United States has nearly doubled, increasing from 16.9 deaths per 100,000 births in 1990 (for a total of 674 deaths) to 26.4 in 2015 (a total of 1,063 deaths). Based on this data, the USA Todayarticle concluded that the United States is the most dangerous country in the developed world for women to give birth. The investigation by USA Today helps shed light on why this is the case. It found that many US hospitals have failed to implement basic and inexpensive safety standards—such as weighing bloody pads to measure blood loss or administering medication in a timely fashion to treat spikes in blood pressure—that could prevent the majority of maternal deaths and injuries.The maternal death rates varied by state. California, considered by leading medical societies to represent the gold standard of care, saw maternal deaths decline by half to 4 deaths per 100,000 births. On the other hand, Louisiana, Indiana and Georgia have the highest maternal death rates, exceeding 40 deaths per 100,000 births—similar to the rates found in Guam, Egypt and Tunisia. Louisiana’s maternal death rate of 58.1 deaths per 100,000 births is actually higher than the rate in Central Latin America (55.9). The investigation was based on over 500,000 pages of internal hospital quality records from hospitals in the states of New York, Pennsylvania and the Carolinas, covering 150 women who suffered childbirth complications, along with interviews with mothers, family members and hospital administrators.

        Why do so many moms die and suffer in the US? Stupid negligence -- The US has a shameful record when it comes to caring for its moms. As Ars has reported before, the rate of women dying during pregnancy or childbirth is higher—much higher—than in any other developed country. By some estimates, mothers die in the US at a rate six-times that seen in Italy and three-times the rate in the UK, for instance. And of those that survive, tens of thousands suffer devastating injuries and near-death experiences each year. It’s hard to compare such stats with precision, of course, because official numbers don’t exist in this country. US hospitals either won’t reveal or don’t determine rates of maternal complications, and the country as a whole simply doesn’t monitor the deaths consistently or accurately. The US hasn’t reported an official maternal death rate since 2007—a situation health experts have called an “international embarrassment.”  Nevertheless, health researchers, hospital organizations, policy makers, and state task forces have been working to understand and reverse the horrific numbers—often doing so with limited resources and reliance on volunteers. While reports have offered glimpses of the problem, a new investigation by USA Today provides one of the sharpest pictures yet. Many of the pregnant women and mothers who suffer and die in this country do so from easily preventable, common complications—and hospitals know exactly what safety features and practices are needed to spare mothers’ lives and suffering, they just aren’t using them. Women are left to bleed to death because doctors don’t bother monitoring blood loss. Women suffer strokes and seizures and even die because doctors and nurses fail to treat their high blood pressure in time. The bottom line is stunning, simple negligence.

         Florida paramedics 'racially profiled' dying woman - Four US paramedics accused of racially profiling and failing to provide medical care to a dying woman face a disciplinary hearing on Tuesday. Crystle Galloway's mother says medics assumed the Tampa, Florida, family could not afford the ambulance cost. The 30-year-old's mother drove her to hospital instead. Ms Galloway slipped in to a coma after suffering a presumed stroke, and died five days later. Hillsborough County officials have already accepted responsibility. The incident occurred early on the morning of 4 July this year, days after Ms Galloway had given birth by Caesarean section. Her mother, Nicole Black, called 911 after finding her daughter slumped in the bath, drooling from swollen lips. The ambulance crew arrived at Ms Galloway's third-floor apartment, and carried her downstairs. Ms Black told US media. "They kept asking her over and over, 'Do you want to go to the hospital? Do you want to go to the hospital?' She kept begging and telling them yes." But instead of the ambulance, Ms Black said they placed her daughter in her car. "They never took blood pressure," said Mrs Black. "They never took her temperature. They never checked any of her vitals. "They were too busy or too caught up in convincing us that she couldn't afford it. "There was reference to, 'Didn't you just have a newborn baby? Do you really want to spend $600 to go three blocks?'

        Air pollution linked to changes in heart structure --- Air pollution is linked to changes in the structure of the heart of the sort seen in early stages of heart failure, say researchers. The finding could help explain the increased number of deaths seen in areas with high levels of dirty air. For example, a report last year revealed that people in the UK are 64 times more likely to die from the effect of air pollution than people living in Sweden. Such premature deaths can be linked to a number of causes including respiratory problems, stroke and coronary artery disease. “What we don’t know is what is the mechanism behind it, why is air pollution leading to increased risk of heart attack and stroke?” said Dr Nay Aung, a cardiologist at Queen Mary University of London and first author of the research. The latest study helps to unpick the conundrum. Writing in the journal Circulation, Aung and colleagues report that they found exposure to nitrogen dioxide and fine particulate matter, known as PM2.5 and PM10 particles, is linked to an increase in the size of two of the chambers of the heart, the left and right ventricle. PM particles are commonly emitted by motor vehicles, among other sources. The authors add that similar changes can affect the performance of the heart and are often seen before heart failure takes hold.

        Hepatitis A outbreak worsens in West Virginia, Kentucky -- Hundreds of Kentuckians and West Virginians have been diagnosed with Hepatitis A, with dozens of new cases being reported in recent weeks. More than 1,200 cases have been reported in Kentucky, over half resulting in hospitalization. Eight Kentuckians have died from the infection. In West Virginia, at least 699 people have been diagnosed and two have died. Officials in both states caution that the real rate may be far higher, and that the outbreak may take months or even years to peak. Hepatitis A is a highly contagious infection of the liver, caused by contact with infected fecal matter. The virus can take several weeks to manifest symptoms. It causes abdominal pain, vomiting, diarrhea, fever, and jaundice. A large number of those diagnosed with Hep A are intravenous drug users, and many are homeless. Although restaurants where workers are infected have dominated news headlines, overcrowded shelters and jails are among the primary sources of contracting the infection. In Lexington, Kentucky, the Catholic Action Center homeless shelter began mandating a Hep A vaccine for people seeking overnight shelter, and has put clients on sanitizing all surfaces to help prevent contamination. Unlike many viruses, Hep A can remain alive on a surface for months. In Ashland’s Boyd County, on the border with West Virginia, a spate of infections among food service workers prompted county health officials mandating vaccination of all food workers. The mandatory order reflects business owners’ distress at plummeting restaurant visits by many who are scared by local news reporting.  Since 2016, the CDC has warned of the danger of an HIV and Hepatitis C outbreak in Kentucky and West Virginia. In February, the Northern Kentucky Health Department reported a cluster of 43 cases of HIV, centered in injection drug users. Similarly, the federal Centers for Disease Control and Prevention (CDC) found 40 new cases of HIV last year in West Virginia, spreading in 15 largely rural counties. Ten of the HIV-diagnosed individuals had already developed AIDS.

        Germs gaining resistance to hand gels in hospitals --Potentially dangerous bacteria already resistant to antibiotics are now developing resistance to common alcohol-based hand gels, a new study reports. A bacteria called Enterococcus faecium is a leading cause of hospital-acquired infections, and it's been shrugging off antibiotics at an increasing rate, said senior researcher Timothy Stinear. He is a molecular microbiologist at the University of Melbourne in Australia. "It's a WHO [World Health Organization] and CDC-recognized superbug," Stinear said. "In the hospital it is already resistant to nearly all classes of antibiotics." Now E. faecium appears to be developing resistance to alcohol-based sanitizers, possibly in response to the vast use of the antimicrobial gels in hospital hand-hygiene programs, Stinear and his colleagues have found. "E. faecium has adapted to the health-care environment," Stinear said. E. faecium and other enterococci are bacteria found in the gut, and typically are not hostile or harmful, the researchers said in background notes. However, these germs have emerged as a major cause of hospital-associated bacterial infections, the study authors noted. This family of bacteria account for a tenth of hospital-acquired bacterial infections worldwide, and are the fourth and fifth leading cause of blood poisoning in North America and Europe, respectively. "E. faecium is a highly prevalent bacterial species that is a very common cause of infections that range from bloodstream infections to urinary tract infections." 

        Superbugs Are Becoming Resistant To Alcohol Disinfectants -- Superbugs are now well on their way to becoming resistant to the most common alcohol disinfectants used to kill them.  Alcohol-based hand sanitizers are now no match for the more resistant infection-causing bacteria. According to a report by Reuters, scientists said that in a study of what the researchers described as a “new wave of superbugs,” the team found specific genetic changes over 20 years in vancomycin-resistant Enterococcus, or VRE – and were able to track and show its growing resistance to alcohol-based hand sanitizers designed to combat them. Their findings were published on Wednesday in the journal Science Translational Medicine.  Tim Stinear, a microbiologist at Australia’s Doherty Institute who co-led the study, said that in Australia alone, use of the alcohol-based hand hygiene has increased tenfold over the past 20 years. “So we are using a lot and the environment is changing,” he said. Yet while rates of MRSA and other infections have stabilized due to heightened hygiene, Stinear said, VRE infection rates have not.    This prompted his team to investigate the VRE bug for potential resistance to disinfectant alcohols.Such disinfectants restrict transmission of pathogens, such as multidrug-resistant Staphylococcus aureus and Enterococcus faecium. Despite this success, health care infections caused by E. faecium are increasing. We tested alcohol tolerance of 139 hospital isolates of E. faecium obtained between 1997 and 2015 and found that E. faeciumisolates after 2010 were 10-fold more tolerant to killing by alcohol than were older isolates.Using a mouse gut colonization model of E. faecium transmission, we showed that alcohol-tolerant E. faecium resisted standard 70% isopropanol surface disinfection, resulting in greater mouse gut colonization compared to alcohol-sensitive E. faecium. We next looked for bacterial genomic signatures of adaptation. Alcohol-tolerant E. faecium accumulated mutations in genes involved in carbohydrate uptake and metabolism. Mutagenesis confirmed the roles of these genes in the tolerance of E. faecium to isopropanol. These findings suggest that bacterial adaptation is complicating infection control recommendations, necessitating additional procedures to prevent E. faecium from spreading in hospital settings.–Science Translation Medicine journal

          "There's Just No Slack In The System" - The Real Perils Of Pandemic Risk - As far as existential threats to the human species go, pandemics rank near the top of the list. What's the probability of an aggressive, highly-fatal outbreak occurring soon? Is it high enough to worry about?  And if one occurs, what can/should we do to protect ourselves and our loved ones? To address these questions, we interview John M. Barry, author of the award-winning New York Times best-seller The Great Influenza: The Epic Story of the Deadliest Plague in History. John was the only non-scientist to serve on the US government's Infectious Disease Board of Experts and has served on advisory boards for MIT's Center for Engineering System Fundamentals and the Johns Hopkins Bloomberg School of Public Health. He has consulted on influenza preparedness and response to national security entities, the George W. Bush and Obama White Houses, state governments, and the private sector. His verdict? The risk of a massively fatal world-wide pandemic like the 1918 Spanish flu is remote, but very real -- and is heightened by the hyper-connectedness of our modern society (i.e., the ease and speed with with people can travel). And our readiness for such an outbreak is woefully lacking:    If you’ve got 20 to 30% of your air traffic controllers sick at the same time, what's that going to do to your economy? Most of the power plants in the United States are still coal powered. They get their coal, most of them, from Wyoming. You see these enormous trains – that's a highly skilled position, the engineers who move those trains which are a mile and a half long. Suppose they're out. You're not going to have power in many of the power plants. These are things that we don’t automatically think of as relating to a pandemic. Even a mild one that makes a lot of people sick without killing them will wreak an economic impact.

        Congo declares new Ebola outbreak in eastern province (Reuters) - Four people have tested positive for Ebola in eastern Democratic Republic of Congo just days after another outbreak that killed 33 people in the northwest was declared over, the health ministry said on Wednesday. Twenty people have already died from hemorrhagic fevers in and around Mangina, a densely populated town about 30 km (18 miles) southwest of the city of Beni and 100 km from the Ugandan border, the ministry said in its statement, without saying when the deaths occurred. A team of 12 experts from Congo’s health ministry will arrive in Beni on Thursday to set up a mobile lab, the ministry said. The World Health Organization has started moving staff and supplies to the area, WHO chief Tedros Adhanom Ghebreyesus said. They head to a region where deep security problems could complicate efforts to contain the virus. About 1,000 civilians have been killed by armed groups and government soldiers around Beni since 2014, and the wider region of North Kivu holds over 1 million displaced people. “This is an active conflict zone. The major barrier will be safely accessing the affected population,” Peter Salama, WHO Deputy Director-General of emergency preparedness and response, said in a statement. Jeremy Konyndyk, an aid expert at the Center for Global Development, said other recent Ebola outbreaks had fortunately been in relatively safe and stable areas. “North Kivu is a different story, which makes me a little nervous,” he said. The area also has strong trade with neighboring Rwanda and Uganda, raising the risk of the virus moving internationally. 

        Toxic algae spreads in Baltic waters in biggest bloom in years  (Reuters) - A huge bloom of toxic algae has spread in the Baltic Sea, forcing people off beaches but delighting scientists who research cancer and antibiotics. The blue-green algae or cyanobacteria is primarily caused by the excess of nutrients, such as nitrogen and phosphorus used in food production, in the water. Exceptionally hot weather and a lack of wind has exacerbated the effect, scientists say. Finnish Meteorological Institute said that this July was the hottest on record. “The environment is giving us back what we have put into it, so it works as a kind of boomerang,” said Hanna Mazur-Marzec, a professor at the Polish Academy of Sciences’ Oceanology Institute in Sopot on the Baltic sea’s southern shore. The Finnish environment institute SYKE said the outbreak, which has hit particularly hard around the Gulf of Finland and stretches down to Poland’s shores, is among the worst in the past decade. “In the lakes, we’ve had a five-week period that’s more extensive than the average in the last 20 years,” SYKE said. “Climate change and warming in the Baltic Sea area and lakes will increase the risk of cyanobacterial blooms.” Cyanobacteria toxins are a risk to the marine ecosystem - especially for mussels and the flounder fish - and also pose threat to human health, SYKE said. People in Poland, Lithuania and Sweden have been advised by the authorities not to swim in waters where the algae is blooming.  But some scientists are pleased because cyanobacteria are known for being a source of unique compounds that provide a means of studying substances that bacteria will be sensitive to in order to beat the growing prevalence of bacterial resistance.

        Blue-green algae in Florida St. Lucie River sending people to emergency rooms --Toxic blue-green algae blooms are sending people to the hospital ... and to urgent care clinics and to their family doctors.  Fifteen people treated Monday and Tuesday by Martin Health System emergency rooms, clinics and primary care doctors for symptoms consistent with algae toxins reported they had contact with the St. Lucie River within the previous seven days.  All the patients — nine on Monday and six on Tuesday — were treated and released without admission to the hospital for further care, said Dr. Michael Romano, the system's head of infectious diseases and control. Wednesday's total was not available.  Monday was the first day Martin Health System began asking incoming patients about contact with the river. Those who say "yes" are asked further questions: Romano suspects only a handful of the people who have reactions to the algae seek professional medical help.  “I figure there are a lot more people out there who we aren't seeing."   Microcystin, a common toxin produced by blue-green algae, can cause nausea and vomiting if ingested and rash or hay fever symptoms if touched or inhaled. Drinking water with the toxins can cause long-term liver disease. Other long-term effects, including neurological diseases such as Alzheimer's, Parkinson's and amyotrophic lateral sclerosis, also known as ALS or Lou Gehrig's disease, are suspected.

        A Toxic Tide Is Killing Florida Wildlife - Florida has an algae problem, and it’s big. This year, an overgrowth in the waters off the state’s southwestern coast is killing wildlife and making some beaches noxious.The toxic algal bloom, known as a red tide, is not unusual. Red tides appear off the state’s coast almost every year. But this one, still going strong after roughly nine months, is the longest since 2006, when blooms that originated in 2004 finally abated after 17 months.The blooms can poison marine animals like sea turtles and manatees, while waves and ocean spray can carry toxins into the air and cause respiratory problems in people.They can also hit the local tourism industry hard. “We’re all being really devastated,” said Rachel Wells, 24, who manages an ecotourism business in Englewood, Fla.  Her company has not done a tour in two weeks, she said, and has temporarily laid off six employees until business picks up again. As for the wildlife, almost 300 sea turtles have been found dead since January in four counties south of Tampa that have been affected by the bloom, far more than the usual number. Although some of the turtles may have been tangled up in fishing lines, hit by boats or died from diseases unrelated to the algae blooms, Allen Foley, a wildlife biologist at the Florida Fish and Wildlife Conservation Commission, said he believed that a majority of the turtle deaths were attributable to the red tide. Beaches have been covered in dead fish, too, causing a foul smell on top of the respiratory problems that have hit some people, Ms. Wells said. The blooms generally appear in late summer or early fall and tend to die off sometime before the following summer. In a normal year, factors like winds, currents and competition from other types of algae cause them to dissipate. This time, though, the bloom hasn’t gone away.

         Michigan Declares State Of Emergency After Cancer-Linked Toxin Found In Drinking Water --Michigan officials declared a state of emergency on Sunday after high levels of Polyfluoroalkyl Substances (PFAS) were discovered in Kalamazoo County tapwater, reports  The declaration was made by Lt. Gov. Brian Calley (R), several days after the toxic compound was found in the water supply of Parchment and Cooper Township. “This declaration will allow the state to supply additional resources to help with response efforts and ensure the health and safety of residents in Parchment and Cooper Township,”  Officials detected a concentration of 1,587 parts per trillion of PFAS substances, while the EPA's maximum recommended dose is 70 parts per trillion. Recent research by the Agency for Toxic Substances and Disease Registry, however, suggests that single-digit levels of the compounds can cause health problems, reports The Hill. Crews from Kalamazoo are currently working to flush Parchment's water lines, which may stir up sediment and discolor the water - which residents are advised not to drink. In the meantime, officials are distributing water at Parchment High School. PFAS compounds can be found in food packaging, commercial household products - especially those with Teflon and other nonstick surfaces. They are an emerging public health threat across Michigan - having contaminated the water supplies of over 20 communities across the state. The compounds can cause low infant birth weight, immune system issues, cancers, and thyroid hormone disruptions. If humans, or animals, ingest PFAS (by eating or drinking food or water than contain PFAS), the PFAS are absorbed, and can accumulate in the body. PFAS stay in the human body for long periods of time. As a result, as people get exposed to PFAS from different sources over time, the level of PFAS in their bodies may increase to the point where they suffer from adverse health effects. Studies indicate that PFOA and PFOS can cause reproductive and developmental, liver and kidney, and immunological effects in laboratory animals. Both chemicals have caused tumors in animal studies.

        3M knew about the dangers of PFOA and PFOS decades ago, internal documents show --  News that the Environmental Protection Agency pressured the federal Agency for Toxic Substances and Disease Registry to suppress a study showing PFAS chemicals to be even more dangerous than previously thought drew outrage this spring. The EPA pressure delayed the study’s publication for several months, and a similar dynamic seems to have been in play this July in Michigan, where Robert Delaney, a state scientist who tried to raise alarms about the chemicals six years ago, was largely ignored. Delaney, who delivered a report to his superiors about high levels of the chemicals in fish and the dangers they presented to people, has been heralded as prophetic. And both delays are being lamented as missed opportunities for getting critical information to the public.But the dangers presented by these industrial chemicals have been known for decades, not just a few months or years. A lawsuit filed by Minnesota against 3M, the company that first developed and sold PFOS and PFOA, the two best-known PFAS compounds, has revealed that the company knew that these chemicals were accumulating in people’s blood for more than 40 years. 3M researchers documented the chemicals in fish, just as the Michigan scientist did, but they did so back in the 1970s. That same decade, 3M scientists realized that the compounds they produced were toxic. The company even had evidence back then of the compounds’ effects on the immune system, studies of which are just now driving the lower levels put forward by the ATSDR, as well as several states and the European Union.

        High-ranking officials claim immunity over poisonous water  - FOR 18 months in 2014 and 2015 the inhabitants of Flint, a poor city in Michigan, drank tap water that was contaminated with lead and potentially lethal bacteria. Now comes the reckoning. Many legal actions have been launched, some of which raise a hard question: to what extent can government officials be held accountable for their actions on the job? Three types of lawsuits have been filed over the past couple of years. The first consists of actions by citizens and environmental groups focused on government enforcement of the Safe Drinking Water Act (SDWA), a federal law from 1974. The second group includes criminal lawsuits against 15 government employees, including Nick Lyon, the director of Michigan’s Department of Health and Human Services. The third type is a civil class-action lawsuit against government officials, which is being heard in a district court. To almost everyone’s surprise, the citizens of Flint prevailed in March 2017, when the government agreed to an expensive settlement in the first type of lawsuit. The state of Michigan agreed to spend at least $87m to replace lead-contaminated water pipes in Flint within three years.  The second sort of legal action is stuck for now. After unusually long preliminary hearings, on July 25th a judge decided to delay his ruling on whether Mr Lyon will face trial on charges including involuntary manslaughter and misconduct in office.  If Mr Lyon’s case goes to trial, it will dismay those who face the third kind of legal action—the class-action suit in Ann Arbor. Earlier this month Judge Judith Levy heard six hours of oral arguments in the case against Governor Rick Snyder, his emergency manager for Flint, Darnell Earley, and other officials. Judge Levy is expected to rule in the next few weeks. Her decision will turn on whether she finds that the officials can claim “qualified immunity” from prosecution, a doctrine dating back to the English sovereign’s rule over America (“The king can do no wrong”). Qualified immunity does not protect officials from legal liability if their actions violated federal law or citizens’ constitutional rights.

          The former Dow Chemicals lawyer who helped derail a dioxin cleanup may soon run the EPA's Superfund program  -- President Trump already raised eyebrows back in March when he nominated Peter Wright, a lawyer for Dow Chemicals, to lead Superfund, a program to clean up some of the country’s toxic waste sites. Now a New York Times exposé is laying out just how much of a danger to public health Wright really is. The reporting discusses the 2003 Midland cleanup in Michigan, where Dow had contaminated the water with significant amounts of dioxin. Wright took a lead role organizing Dow’s legal strategy and negotiating with the clean up (one of the nation’s largest) with the U.S. Environmental Protection Agency, but while he was in charge, the Times reports, his company slow-walked the cleanup process, sought to mislead residents about the risks, conducted unauthorized sampling, promoted inaccurate science, and submitted disputed data. One particularly egregious example cited involves both Dow and Wright personally downplaying dioxin’s generally accepted health risks, such as reproductive and development problems, immune system damage, and even cancer. Despite his decidedly anti-environmental past, Wright could soon be put in charge of the program he once helped derail—bad news for anyone living nearby any of the country’s 1,344 Superfund sites.

        Study Reveals 'Large-Scale Illegal Presence' of GMOs in India's Food Supply - Despite India's law barring genetically modified (GM) foods from being produced or sold in the country without government approval, a study by the New Delhi-based Centre for Science and Environment (CSE) found that thanks to lax enforcement, a deeply flawed labeling system and corporate deception, Indian supermarkets are inundated with GM foods. After conducting tests on "domestically produced and imported edible oils, processed and packaged foods, and infant foods," CSE researchers found that 32 percent of the samples tested contained genetically modified organisms (GMOs), and 80 percent of the GMO-positive foods were imported from the U.S., Canada, the Netherlands, Thailand and the United Arab Emirates. "Most GM foods in the study did not disclose GM on their labels and 15 percent made false claims saying they were GM-free," CSE Director General Sunita Narain said in a statement. CSE's results expose "large-scale illegal presence and sale of genetically modified (GM) processed foods in the country," researchers wrote in a summary of their findings. "We had been hearing about the presence of illegal GM food in India, and decided to do a reality check by testing processed foods," CSE deputy director general Chandra Bhushan said. "We were shocked to know the scale in which GM foods have penetrated the Indian market. The regulatory authorities are to blame here."

        European Union's Top Court Rules on Gene-Editing Technology -The European Court of Justice has ruled that modern gene-editing methods which utilize direct DNA mutagenesis fall under current rules regulating organisms modified via incorporation of foreign DNA sequences. Whereas traditional genetic engineering involves the introduction of DNA into an organism’s genome, gene editing techniques allow the precise replacement of one DNA sequence with another or the removal of select sequences of a plant’s DNA. One of the more recognized technologies, known as CRISPR, involves cutting strands of DNA with molecular “scissors” where scientists can then insert a new DNA sequence.   In a statement, the Court of Justice said it “takes the view, first of all, that organisms obtained by mutagenesis are GMOs within the meaning of the GMO Directive in so far as the techniques and methods of mutagenesis alter the genetic material of an organism in a way that does not occur naturally.” While the ruling exempted crops produced through mutagenesis techniques which have been “conventionally used in a number of applications and have a long safety record,” ultimately, under this ruling, crops or livestock that have undergone gene editing through new mutagenesis techniques that have emerged since the adoption of the GMO Directive would need to be labeled as genetically modified.  In response, U.S. Secretary of Agriculture Sonny Perdue issued a statement criticizing the ruling. The statement reads, in part, “[g]overnment policies should encourage scientific innovation without creating unnecessary barriers or unjustifiably stigmatizing new technologies. Unfortunately, this week’s ECJ ruling is a setback in this regard in that it narrowly considers newer genome editing methods to be within the scope of the European Union’s regressive and outdated regulations governing genetically modified organisms.” The statement concludes that “USDA will re-double its efforts to work with partners globally towards science and risk-based regulatory approaches.”  The Court of Justice’s ruling comes as USDA’s Agricultural Marketing Service (AMS) works to implement the National Bioengineered Food Disclosure Standard (NBFDS). The comment period for the proposed rule closed on July 3, 2018, and the agency is now working to publish a final rule. As previously covered on this blog, the proposed rule defines “bioengineered food” as, “…a food that contains genetic material that has been modified through in vitro recombinant deoxyribonucleic acid (DNA) techniques and for which the modification could not otherwise be obtained through conventional breeding or found in nature.” 

        Warmer soil releasing more carbon, worsening climate change - (AP) — Even the dirt on the ground is making climate change worse, a new study finds. Plants capture massive amounts of carbon, pumping it into the soil where usually it stays for hundreds or thousands of years.  Observations from across the globe show that as temperatures have warmed, bacteria and fungi in the soil are becoming more active. These turbo-charged microbes are feeding on dead leaves and plants, releasing more heat-trapping carbon dioxide into the air, according to a study in Wednesday's journal Nature .Scientists call it a vicious cycle of warming. Burning of coal, oil and natural gas heats the air and soil, which worsens warming.  This uncontrolled cycle speeds up and amplifies climate change Researchers found a significant increase in the amount of carbon since the 1990s coming out of microbes when compared to other releases of carbon. They analyzed sensor readings, soil measurements, plant growth data and satellite observations in what's the most comprehensive study yet of the climate change impacts of soil. "The world really is showing an effect here,"  "It's a fingerprint of climate change." Overall, soil releases about nine times more carbon than human-caused activities, but that's part of a natural cycle when the amount of carbon released into the air is about equal to the carbon taken out by oceans and plants. Fossil fuel emissions knock the atmosphere out of balance by putting more in than comes out. Heated soil releases more carbon, further putting the cycle out of whack.

        Moves to cut emissions could cause more hunger than climate change - study   (Thomson Reuters Foundation) - Adopting some of the most stringent measures needed to curb climate change across all industries could cause hunger levels to rise by three times as much as global warming itself, according to a study released on Tuesday. Including agriculture in schemes such as a global carbon tax could put 78 million more people at risk of hunger by 2050 by pushing up the price of food, said the researchers, whose paper was published in Nature Climate Change.  That compares with an estimated 24 million from climate change alone, they said. Globally, 815 million people are already going hungry, according to the United Nations Food and Agriculture Organization (FAO). "It will become difficult for the poor and vulnerable people to buy enough food," said Tomoko Hasegawa, one of the lead researchers of the paper, which recommends countries instead adopt specific policies for agriculture. "Some people may also shift from nutrition-rich products to less nutritious food." Agriculture, forestry and other land uses together account for nearly a quarter of the world's greenhouse gas emissions, according the FAO. But introducing carbon taxes, expanding biofuel plantations and planting trees - all measures that would help countries meet their commitments under the Paris climate agreement - would increase the cost of food production, the paper said. "By 2050, stringent climate mitigation policy, if implemented evenly across all sectors and regions, would have a greater negative impact on global hunger and food consumption than the direct impacts of climate change," it said. " The findings underscore the challenges of cutting emissions produced through agriculture, which experts say is essential to cap the rise in global temperatures at a manageable level as agreed under the Paris deal.

        Visualizing How America Uses Its Land In 13 Illustrations - Bloomberg is out with a fascinating look at how America uses its land for various purposes in the lower 48 contiguous states, based on extensive data published in 2017 by the U.S. Department of Agriculture.  The 48 contiguous states alone are a 1.9 billion-acre jigsaw puzzle of cities, farms, forests and pastures that Americans use to feed themselves, power their economy and extract value for business and pleasure. -BloombergFirst, let's take a look at the big picture: By grouping each color, we have can see wide "bands" of land use by color. Of note, Special Use areas are categorized as national parks, wildlife areas, highways, railroads and military bases. The U.S. is becoming more urban—at an average rate of about 1 million additional acres a year. That’s the equivalent of adding new urban area the size of Los Angeles, Houston and Phoenix combined. U.S. urban areas have more than quadrupled since 1945. The USDA categorizes national parks, wildlife areas, highways, railroads and military bases as special-use areas. And another USDA land classification—miscellaneous—includes cemeteries, golf courses, marshes, deserts and other areas of “low economic value.” More than 100 million acres of special-use areas are park and wilderness areas, where most commercial activities, such as logging, mining and grazing, are excluded. Agricultural land takes up about a fifth of the country. Yet the actual land area used to grow the food Americans eat is much smaller—only about the size of Indiana, Illinois and half of Iowa combined. More than a third of the entire corn crop is devoted to ethanol production. Most cropland is used for livestock feed, exports or is left idle to let the land recover.While the U.S. benefits from an overall agricultural trade surplus, Americans imported 15 percent of their food and beverage products in 2016. More than 30 percent of the fresh fruits and vegetables Americans consume come from other countries, predominantly Mexico and Canada. The amount of U.S. land used to produce citrus fruits alone is larger than Rhode Island.  […] Putting all those pieces together, this map gives you a rough sense of all the ways U.S. land is used. Much of U.S. land serves specific purposes, such as the 2 million acres devoted to golf courses or the 3 million acres for airports.

        An Engineer, an Economist, and an Ecomodernist Walk Into a Bar and Order a Free Lunch . . .  Georgescu-Roegen stressed that because of its seasonality, its intimate dependence on diffuse, intermittent solar energy and ecospheric processes, and its immunity to continuous assembly-line-style organization, crop agriculture, unlike industrial production, can’t be juiced up by adding more capital, labor, shifts, floorspace, computing power, or time-and-motion studies. The netproduction from farming has lagged even in the fossil-fuel era, thanks to ecological limits. On the farm, there’s no Moore’s Law or anything close to it.  A corollary is that if humanity is successfully weaned from fossil fuels, the economy as a whole will necessarily become intimately dependent on more diffuse energy sources and on ecospheric processes. In other words, all economic production will necessarily become tightly bound by the same limitations that farmers, especially pre-fossil-fuel farmers have always faced.This message has not gotten through to the mainstream environmental movement, which aims to reverse realty, expecting agriculture (along with forestry and range management) to work the entropic miracle of cleaning up after the industrial sector so the latter can go on transgressing limits. In this magical world, lunch is on the house; green plants will be asked not only to double their output of marketable product but also to produce enough combustible biomass to displace a large share of fossil fuels and sequester in the soil a large portion of the carbon emitted by fossil fuels. Meanwhile, production of food is to be moved into cities or just outside the city limits, to reduce transportation emissions (already a tiny portion of the industrial food system’s emissions) and to let people feel good about eating locally. None of those expectations are energetically or biologically feasible at the scale being imagined. One idea in particular—the thoroughgoing urbanization of agriculture—is wildly popular but wholly impracticable. There is simply not enough land in and around cities even to grow the nation’s vegetable crop, let alone the cereal, grain legume, oilseed, root & tuber crops that cover the bulk of our cropland and make up the bulk of our diet (by comparison, vegetables occupy less than 3% of U.S. cropland).

         U.S. Recycling Companies Face Upheaval from China Scrap Ban - U.S. companies that collect waste for recycling are weighing higher prices and other changes to their operations since China upended the industry when it stopped accepting much of the scrap material Americans have been shipping there for decade. The top two solid waste services companies in the U.S., Waste Management and Republic Services both recently pulled back profit projections in their recycling divisions based on China’s new policies, which have created a glut in scrap markets and sent global prices for scrap material plummeting. “At this point in time, we have zero volume going to China,” said Richard Coupland, vice president of municipal sales at Republic Services. “We are still able to move material, but our economic model is completely upside down.” .According to the Institute of Scrap Recycling Industries Inc., 31% of U.S. scrap commodity exports worth a total of $5.6 billion were sent to China last year. Republic Services processes about 6 million tons of paper, glass, plastics and other materials for recycling each year under contracts with roughly 2,400 municipalities in 40 U.S. states and Puerto Rico. Before this year, about 40% of that was shipped to scrap buyers in China who would break it down and make new boxes, packaging, toys and other goods. It was cheap for recycling collectors to send scrap to China because ocean carriers offered deeply discounted prices to get shipping containers back to Asia after they had arrived at U.S. ports packed with goods made in Chinese factories. “We were happy to send material back in them for pennies on the dollar,” Mr. Coupland said. Now it’s gotten more complicated. Mr. Coupland said Republic Services has found new buyers in Malaysia, India and other markets, but fewer ships make direct trips there from the U.S., driving up transportation costs. Global prices for used materials have plummeted, so Republic loses money on most of the recycled scrap it now sells overseas. That cost is increasingly likely to get passed along to U.S. households and businesses. Some cities and towns could decide that keeping their recycling services is simply too expensive. ‘Recycling programs will face challenges unless the cities begin to envision a more durable business model,’ 

         Body-snatching fungi that give rise to sex-crazed cicadas before ripping off their genitals found to contain compounds seen in hallucinogenic drugs -   Scientists investigating parasitic fungi that target cicadas have discovered traces of psychoactive chemicals in the infected insects, including an amphetamine and psilocybin, the potent compound found in hallucinogenic mushrooms. The infection leads to a horrifying outcome for the host; after the fungus takes root inside the body, cicadas begin to show ‘hypersexual’ behaviors, causing males to attempt to mate with females and other males alike. Eventually, the spores burst through the infected insect’s abdomen, ripping its genitals off in the process – and, the cicadas continue trying to mate afterwards.    The new study led by researchers at West Virginia University investigated fungal pathogens in the genus Massospora, which can be found in both periodical and annual cicadas.  Previous studies have made note of the bizarre sexual behaviours that result from the body-snatching fungus, revealing how it causes males to flick their wings like a female would to lure in other males.  By causing the cicadas to mate with both sexes, the fungus can spread its spores more widely. ‘This phenomenon is the ultimate evolutionary arms race, where the host loses because they are rendered sterile or evolutionarily irrelevant by the fungus in order to spread the spores,’ explained University of Connecticut ecology and evolutionary biology researcher John Cooley following a study released earlier this year.

        Our Cellphone Addiction Is Turning Wireless Tech Into an Invisible Weapon That’s Destroying Wildlife - There is growing evidence that our addiction to cellphones could be impacting brain functionality and be the cause of stress, anxiety, insomnia and a lack of attention and focus. Now a new report has found that we're not the only living things to be affected by our increasing dependence on wireless technology. Mammals, birds, insects and even plants are likely being harmed by the electromagnetic radiation (EMR) emanating from Wi-Fi, cellphone towers, broadcast transmitters and power lines, according to a new analysis of 97 peer-reviewed studies conducted by EKLIPSE, a biodiversity and ecosystem project funded by the European Union.The researchers said that "evidence is accumulating that mammals (e.g., bats and mice) have a magnetic sense" that is affected by radio-frequency-modulated electromagnetic fields (RF-EMR). Birds in particular may be highly susceptible. The researchers found that even weak magnetic fields in the radio frequency range can disrupt birds' magnetoreception, their ability to use the Earth's magnetic fields to orient themselves and find their way home.Homing pigeons are well-known for their magnetoreception, but this sense has also been detected in other animals, like red foxes, and there is evidence that even large mammals like deer use the planet's magnetic fields to sense direction. A number of invertebrates, including worms, mollusks and fruit flies also use this ability. The report also concluded that EMR can also alter the metabolism of plants, causing "significant changes … demonstrated at cellular and molecular levels." The authors noted that even a low level exposure to EMR "caused a rapid increase in stress-related transcript accumulation in tomato [plants]." Transcription is the first phase in the expression of a gene, in which a specific segment of DNA is copied into RNA.

        Trump golf course ‘destroyed’ protected land in Scotland despite vow to minimize damage: report - President Trump’s golf course in Scotland has reportedly “destroyed the vast majority” of protected sand dunes in the area, despite a pledge not to.Scottish Natural Heritage, an environmental agency, found that construction of the Trump International Golf Links in Aberdeenshire led to “direct loss” of at least 168 acres of sand dunes, according to The Associated Press.The dunes are environmentally sensitive and protected by Scottish law.Trump reportedly made a personal commitment to minimize damage to the land when he won approval to build the golf course, according to the AP.Documents detailing the damage were released by Scottish Natural Heritage under a Freedom of Information Act request. The reports saw that Foveran Links and other nearby natural formations have undergone “considerable damage.”“Construction of the new golf course involved earthworks, planting of trees, greens and fairways, drainage, irrigation and grass planting,” one report reads, according to The Guardian. “This has affected the natural morphology of the dunes and interfered with natural processes. Most of its important geomorphological features have been lost or reduced to fragments. Nearby marine terraces have also been reduced to fragments.” The report notes that, due to the damage, it is likely that the area’s status as a site of special scientific interest will be revoked.

        The Trump Administration Takes on the Endangered Species Act -- During the signing ceremony for the Endangered Species Act, President Richard Nixon said, “Nothing is more priceless and more worthy of preservation than the rich array of animal life with which our country has been blessed.”  Forty-five years later, there is a madman in the building. In fact, there are several. Last week, the Trump Administration proposed what the Times called“the most sweeping set of changes in decades” to the regulations used to enforce the Act. The changes would weaken protections for endangered species, while making it easier for companies to build roads, pipelines, or mines in crucial habitats. Under current regulations, government agencies are supposed to make decisions about what species need safeguarding “without reference to possible economic or other impacts.” The Administration wants to scratch that phrase. It also wants to scale back protections for threatened species—these are one notch down on the endangerment scale—and to make it easier to delist species that have been classified as endangered. Greg Sheehan, the acting director of the U.S. Fish and Wildlife Service, an agency within the Department of the Interior, said that the proposed changes were aimed at “providing clarity.” Representative Raúl Grijalva, an Arizona Democrat and the ranking member on the House Natural Resources Committee, by contrast, called them “part of the endless special favors the White House and Department of the Interior are willing to do for their industry friends.”

        12 Black Rhinos Dead in Kenyan Sanctuary Disasters --Kenya Wildlife Service (KWS) reported Tuesday the killing of a 12-year-old male black rhino in Lake Nakuru National Park. The death follows a series of disasters surrounding the critically endangered animals in Kenya's national parks.Ten out of 11 black rhinos have died in recent weeks following a botched relocation attempt from Nairobi and Nakuru National Parks to Tsavo East National Park.The only rhino to survive the translocation was subsequently attacked by lions, tourism minister Najib Balala said Thursday. Earlier reports said the rhino was recovering after the attack but it appears to have died as well.In a statement released Monday, the Kenya Tourism Federation expressed "deep concerns and sadness in regards to the unprecedented tragic death of 11 Rhinos in the recent translocation exercise." TheInternational Rhino Foundation confirmed Tuesday that the 11th rhino died after the lion attack as well.The latest slaughter means 12 black rhinos have recently died in Kenyan sanctuaries. Catherine Wambani, senior park warden at the Lake Nakuru National Park, said the rhino was killed Monday night and found dead with its horns missing, Kenya's Citizen Digital reported. Pursuit for the poachers is underway, KWS said.

        95% of World's Lemur Population on Edge Of Extinction - Ninety-five percent of Earth's lemur population is threatened, experts warned this week, underscoring their unfortunate position as the world's most endangered primates.Of the planet's 111 known lemur species and subspecies, 105 can be provisionally evaluated as critically endangered, endangered or vulnerable, a group of primate specialists convened by the International Union for the Conservation of Nature (IUCN) determined."This is, without a doubt, the highest percentage of threat for any large group of mammals and for any large group of vertebrates," Global Wildlife Conservation's chief conservation officer Russ Mittermeier, said in apress release.  Mittermeier also chaired the primate specialist group that assessed the lemur's conservation status for an update of the IUCN's Red List of Threatened Species. The primates, which are unique to the island of Madagascar, are threatened due to habitat loss from agriculture, illegal logging, charcoal production and mining, according to the IUCN. What's more, this ongoing destruction impacts the nation's striking biodiversity as a whole, Mittermeier pointed out. "This assessment not only highlights the very high extinction risk Madagascar's unique lemurs face, but it is indicative of the grave threats to Madagascar biodiversity as a whole,"  The experts provisionally classified 38 lemur species as critically endangered, 44 endangered and 23 vulnerable on the IUCN Red List. This represents an increase of 12 threatened species from the IUCN's last lemur population assessment in July 2012. The largest jump was seen in the critically endangered category, which rose from 24 species to 38.

        Grieving Orca Mother Carries Dead Calf for 'Heartbreaking' 8th Day - She hasn't let go. An endangered southern resident killer whale known as Tahlequah or J35, has carried her dead calf for an eighth day in a row as of Tuesday, the Seattle Times reported. Researchers scanned the waters all day before the mother orca and her deceased newborn turned up near British Columbia's Southern Gulf Islands. "I am relieved we see her, that she is healthy and swimming strongly, and that she is with her family," Taylor Shedd of Soundwatch, which has been monitoring the pod, told the publication. "But it is so emotional that she is so caring. It boggles my mind. To carry it is hard for her physically and mentally. It is just heartbreaking."  The baby whale was born near Victoria, British Columbia on July 24. The newborn was seen alive and swimming with its mother, Tahlequah, and other members of its pod near Clover Point on the Victoria shoreline in the mid-morning but died a short time after, according to the Washington-based Center for Whale Research."The baby's carcass was sinking and being repeatedly retrieved by the mother who was supporting it on her forehead and pushing it in choppy seas toward San Juan Island, USA," the center said in a press release. "The mother continued supporting and pushing the dead baby whale throughout the day until at least sunset." It's not unusual for orcas to carry their dead offspring for about a day or so, researchers told NPR. However, Jenny Atkinson, executive director of The Whale Museum on San Juan Island, noted this is the longest period researchers have observed.

        World's Largest King Penguin Colony Shrunk 90% in Last Three Decades - The world's largest colony of king penguins declined nearly 90 percent in the last three decades, researchersannounced Monday.The colony inhabits France's subantarctic Île aux Cochons or Pig Island. Observations from the 1980s showed that it was once home to 2 million king penguins, making it the planet's largest colony of the species, and also the second largest colony of all penguins.However, new satellite images and aerial photographs taken from a helicopter show that the colony's breeding grounds have been overrun by vegetation, according to a paper published in the journal Antarctic Science.The researchers estimates that the total king penguin population has shrunk by 88 percent over the past 35 years, with barely 200,000 animals left on the island.There is no definitive explanation for the massive decline."It is completely unexpected, and particularly significant since this colony represented nearly one third of the king penguins in the world," lead author Henri Weimerskirch, an ecologist at the Centre for Biological Studies in Chize, France, who has observed the colony since 1982, told AFP.However, the team suggested that their numbers may "fluctuate extensively" after large-scale climatic events. A particularly strong El Nino weather event in 1997 warmed the southern Indian Ocean, which drove fish and squid—penguins' main food—beyond a distance that penguins could travel to hunt. "This resulted in population decline and poor breeding success" for all the king penguin colonies in the region, Weimerskirch said.

        Sheer Speed of Global Warming Is Decimating Birds, Say Scientists - Birds are twice as vulnerable to climate change as mammals, an international team of scientists has concluded after checking 481 species in 987 populations around the world. The vulnerability of the tiger and bald eagle get extensive press, but the fact is that most mammalian and avian populations have been declining for decades. There are myriad causes, but a chief one turns out to be the sheer speed at which climate change is progressing.  Simply, they can’t adjust fast enough, concludes the report published by the Zoological Society of London on Monday, in the journal Global Change Biology. The scientists wanted to check how the double whammy of climate change and human encroachment affects birds and mammals. What they found is that climate change matters more, and especially to birds. That absolutely does not mean human encroachment, and habitat devastation, aren’t huge problems, the team clarifies. They are. They confined their examination to land-use and climate. But clearly the changes happening so rapidly to the planet are more than many species can cope with, even if their favorite tree is still there.  One problem birds have is that their mating season is triggered by temperature changes, explains lead author Fiona Spooner. “We think this could be leading to a desynchronization of their reproduction cycle, leading to the negative impacts we’re seeing. Mammal breeding seasons are a lot more flexible, and this is reflected in the data,” she says.

        46% Of Forests Have Been Destroyed By Civilization…And Counting -- New research in the prestigious journal Nature estimates that “the global number of trees has fallen by approximately 46% since the start of human civilization.” The study also suggests that about 15 billion trees are being cut down each year, and that the average age of forests has declined significantly over the last few thousand years. The study was led by researchers at the Yale School of Forestry and Environmental Studies with contributions from scientists at universities and research institutions in Utah, Chile, the UK, Finland, Italy, France, Switzerland, New Zealand, The Netherlands, Germany, Czech Republic, Brazil, and China. While fossil fuels have only been burned on a large scale for 200 years, land clearance has been a defining characteristic of civilizations – cultures based around cities and agriculture – since they first emerged around 8,000 years ago. This land clearance has impacts on global climate. When a forest ecosystem is converted to agriculture, more than two thirds of the carbon that was stored in that forest is lost, and additional carbon stored in soils rich in organic materials will continue to be lost to the atmosphere as erosion accelerates.  Over the past several decades of climate research, there has been an increasing focus on the impact of land clearance on modern global warming. The Intergovernmental Panel on Climate Change, in its 2004 report, attributed 17% of global emissions to cutting forests and destroying grasslands – a number which does not include the loss of future carbon storage or emissions directly related to this land clearance, such as methane released from rice paddies or fossil fuels burned by heavy logging equipment. 

        Pakistan's Next Prime Minister Wants to Plant 10 Billion Trees - Imran Khan, who's set to become Pakistan's next prime minister, has a goal of planting 10 billion trees across the country in five years, Climate Change News reported.The former cricket star's political party, Pakistan Tehreek-e-Insaf (PTI), won last week's elections and campaigned on several environmental initiatives.This ambitious pledge builds on Khan's Billion Tree Tsunami, a reforestation project that added 350,000 hectares of trees in the northwestern province of Khyber Pakhtunkhwa between 2014-2017. The aim was to restore the region's depleted forests and fight the effects of global warming."If you plant trees, we have discovered, by the river banks it sustains the rivers. But most importantly, the glaciers that are melting in the mountains, and one of the biggest reasons is because there has been a massive deforestation. So, this billion tree is very significant for our future," Khan told Voice of America after the billionth tree was successfully planted last August.   Pakistan is no stranger to mass reforestation efforts. In 2013, the Sindh Forest Department at Kharochan in Pakistan's Thatta district set a Guinness World record for planting 847,275 trees in 24 hours.

        Animals, crops and people all suffer amid Europe’s heatwave — The heatwave gripping large stretches of Europe has already been blamed for deadly forest fires and crop failures. Now freshwater fish could be its next victims. Some regions in Germany sweltered as the mercury hit 39 degrees Celsius (102 Fahrenheit) and the German Meteorological Office said the country’s record of 40.3 Celsius (104.5 Fahrenheit) could be topped Tuesday. Rivers like the Rhine and the Elbe have soaked up so much heat that fish are beginning to suffocate. “I’m expecting a tragedy as soon as next week,” Philipp Sicher from the Swiss Fishery Association told German news agency dpa. In Hamburg, authorities collected almost five metric tons (11,000 pounds) of dead fish from ponds over the weekend, dpa reported. Firefighters have started pumping fresh water into some ponds and lakes in a bid to raise oxygen levels. Scientists say the record heat seen in Europe but also North America and parts of Asia this year points to the influence of man-made climate change and could become more common in future. Several of Germany’s nuclear power stations are reducing energy output because rivers used to cool the power plants are too warm. The low water levels have also made shipping more difficult, with a complete ban imposed on boats on the Oder river in eastern Germany. Meanwhile, the country’s Farmer’s Association is asking the government for 1 billion euros ($1.17 billion) in financial aid to help cover losses from this year’s poor harvest. 

        Temperatures in SW Europe Could Break 48 Degree Centigrade Record This Weekend -- Large parts of southern and western Europe are expected to experience high temperatures this weekend with forecasters warning that thermometers could reach up to 48C in Spain. Holidaymakers bound for the Iberian peninsula have been warned to expect extreme heat, with the chance of the hottest temperatures ever recorded in continental Europe.  The current record of 48C in Athens, Greece, in 1977, could be broken as waves of blisteringly hot air sweep in from Africa. Temperatures around the Mediterranean are expected to rise and peak at the weekend, with the highs expected inland rather than in coastal areas, after edging into the low-40s on Wednesday and Thursday.“These sorts of temperatures are not only exceptional for the locals but people from the UK will never really have experienced them,” said Luke Miall, a UK Met Office meteorologist.“Especially with it being the school holidays, and the very young and old being susceptible to heatstroke, we’re advising tourists to keep out of the midday sun and protect themselves.”Temperatures in south-west France could also rise to the high 30s, he added.In the UK the mercury is set to be significantly lower this weekend although temperatures of up to 31C are forecast in London and the south-east.

        Sweden's Highest Peak Shrinks in Arctic Heatwave -- The southern tip of the Kebnekaise mountain is likely no longer Sweden's highest peak as a heat wave in the Arctic circle bakes the region, researchers said. Between July 2 and July 31, "four meters of snow and ice have melted, an average of 14 cm per day," Stockholm University Geography Professor and Head of the Tarfala Research Station near the mountain, Gunhild Rosqvist, said in a press release.As of Tuesday, the southern glaciated peak measured 2,097 meters (96,880 feet) above sea level, only 20 centimeters (6 inches) higher than the northern peak 2096.8 meters, which is free of ice.Then on Thursday, Rosqvist told AFP that the northern peak is almost certainly the country's new highest point. "We haven't gone up today to measure it, but we've checked the temperature and it was really warm yesterday, it was over 20 degrees C (68 F) so it has surely melted" below the height of the northern peak, she said.

        Climate change driven by humans made heatwave 'twice as likely' -- Climate change resulting from human activities made the current Europe-wide heatwave more than twice as likely to occur, say scientists. Researchers compared the current high temperatures with historical records from seven weather stations, in different parts of Europe. Their preliminary report found that the "signal of climate change is unambiguous," in this summer's heat. They also say the scale of the heatwave in the Arctic is unprecedented. The scale and breadth of the current heat being experienced across Europe has prompted many questions about the influence of global warming on extreme events. To try and see if there is a connection, researchers looked at data from seven weather stations, in Finland, Denmark, Ireland, the Netherlands, Norway and Sweden.   They chose these locations because they all had digitised records dating back to the early 1900s, unlike the UK. The team also used computer models to assess the scale of human-influenced climate change. The researchers found that in the weather stations in the Netherlands, Ireland and Denmark, climate change has generally increased the odds of the current heatwave by more than two-fold. Scientists are loath to say a specific event was "caused" by climate change - however they believe that this new study joins a growing list of solid links between rising temperatures and extreme events. One thing the researchers can't say right now is whether the high pressure system that has been blocked over Europe for almost two months was caused by climate change. The scientists, from the World Weather Attribution group say they will address this question when they formally publish their findings in a scientific journal later this year.

        Record-breaking temperatures leave 29 dead in South Korean heatwave -  As many as 29 people have died due to heatstroke in South Korea, according to the South Korean Ministry of Health, Welfare and Disease Control.The country is undergoing an extended heatwave, with at least 15 days of temperatures over 35˚C (95˚F) recorded, the Korean Meteorological Administration (KMA) reported. The agency added that Wednesday was the hottest day in Seoul in 111 years, with a temperature of 39.6˚C.The Office of the Prime Minister has ordered all public construction sites to cease work during daytime hours for the duration of the extreme temperatures.  The government will also focus on medical support to communities, including providing fluid and cooling systems for 1,000 elderly farmers.

        Regular heatwaves 'will kill thousands' -- The current heatwave could become the new normal for UK summers by 2040 because of climate change, MPs say.  The Environmental Audit Committee warns of 7,000 heat-related deaths every year in the UK by 2050 if the government doesn't act quickly.Higher temperatures put some people at increased risk of dying from cardiac, kidney and respiratory diseases. The MPs say ministers must act to protect people - especially with an ageing population in the UK.Scientists differ on whether the current global rash of heatwaves is definitely caused by climate change. But all agree that future heatwaves will be hotter and more frequent thanks to carbon emissions. The MPs highlight a warning from the Met Office that UK summer temperatures could regularly reach 38.5C by the 2040s.

        Chinese most at risk of death from deadly heatwaves, study says - Deadly heatwaves could kill people working outdoors within hours in China's most populous, agricultural region by 2100 as a result of climate change, scientists said on Tuesday. The North China Plain, home to 400 million people, faces the greatest risk to human life from rising temperatures of any location on earth, the Massachusetts Institute of Technology (MIT) said in the journal Nature Communications. "Climate change is going to trigger deadly heatwaves," lead researcher Elfatih Eltahir told the Thomson Reuters Foundation. "The intensity of those heatwaves means that survival of humans would be questionable." The World Health Organization says heat stress, linked to climate change, is likely to cause 38,000 extra deaths a year worldwide between 2030 and 2050. People cannot survive unprotected in the open for more than six hours at a wet-bulb temperature - which reflects the combined effects of heat and humidity - of 35 degrees Celsius (95°F), the study said. This is because their bodies cannot shed heat, as sweat does not evaporate when it is very humid, which can lead to organ failure. Unless climate-changing emissions are curbed, the deadly 35 degree threshold will be reached several times in the North China Plain between 2070 and 2100, the study found by running climate model simulations. "The North China Plain ... faces the greatest risks to human life from rising temperatures of any location on Earth," MIT said in a statement. 

        Death Valley to post hottest month ever recorded on Earth, for the second July in a row -- Last July, California’s Death Valley endured the hottest month ever measured on the planet. This July ended up even hotter. Over both day and night, the temperature at Death Valley averaged 108.1 degrees, ahead of the mark set a year ago by about a half-degree. That previous mark had broken a record that stood for 100 years. This year’s exceptional temperature extreme at one of the planet’s hottest locations puts an exclamation mark on a month in which record-high temperatures have fallen on every continent in the Northern Hemisphere.  Searing heat in Death Valley in July, is of course, the norm. So it might be hard to contemplate it being unusually hot in such a place. But this July’s temperature has averaged nearly six degrees above the average of 102.2.Consider some of these incredible numbers:

        • The high temperature hit at least 120 degrees on 21 days, sailing past the normal high of 116.5 degrees.
        • From July 24 to 27, the high soared to 127 degrees setting records on each of those four dates. This mark was not far from the location’s highest reliable temperature measurement in recent decades of 129 set on June 30, 2013.
        • The low temperature remained above 100 degrees on 10 days.

        The measurements come from Furnace Creek, in the heart of the valley, at 190 feet below sea level. It has been the official weather station for Death Valley for more than 100 years, dating back to 1911.

        'New World Record': Imperial, California Felt Rain at 119°F - Southern California is not only sweltering under extreme heat, the city of Imperial actually witnessed rainfall when it was a scorching 119 degrees Fahrenheit outside on July 24, weather experts observed.The bizarre event set "a new world record for the hottest temperature ever measured while rain was falling," Dr. Jeff Masters, meteorologist and co-founder of Weather Underground, wrote in blog post.It's pretty rare for rainfall to occur above 100 degrees Fahrenheit, Masters noted, but NOAA weather records show that at 3:53 p.m. local time, light rain started to fall and continued for four hours straight."Most of the rain evaporated since the humidity was only 11-15 percent during the rain event, and only a trace of precipitation was recorded in the rain gauge. Nevertheless, the July 24 rain at 119 F in Imperial sets a new record for the hottest rain in world history," Masters wrote. The previous record for the warmest rain was set by Needles, California on Aug. 13, 2012, when rain fell at a daytime high of 118 F with a humidity of 11 percent.

        Cal Fire estimates 300 wildfires burning up and down California -- Cal Fire estimates there are more than 300 fires burning across California as of Sunday morning. Crews in Northern California are focused on four of those fires, including the Carr Fire in and around Redding, the River and Ranch fires in Mendocino County, and the Steele Fire in Napa County. Governor Brown has declared states of emergency in Mendocino, Napa, and Lake Counties where homes have been destroyed.  Nationally, 89 active large fires have consumed nearly 930,000 acres (376,000 hectares) in 14 states, according to the National Interagency Fire Center. So far this year, nearly 37,000 wildfires have burned more than 4.25 million acres (1.7 million hectares).

        California’s city of ash: Shocking pictures show devastation caused by the Carr Fire, which is now larger than Salt Lake City -- These eerie images show the devastation left by wildfires raging through northern California, which have left two firefighters dead and destroyed 500 homes, as officials warned another 5,000 properties are still threatened.On Friday, the evening sun combined with the smoky air to produce a milky glow, which illuminated the shattered remains of houses and the skeletons of thousands of charred trees.In the communities scorched by the blaze, the air is thick with the smell of smoke and chemicals, as the so-called Carr Fire continues to move through Shasta County like a freight train.On Saturday morning, some 3,400 firefighters on the ground and in helicopters continued to battle the 125 miles fire as it ripped through the city of Redding, while blazes continued to rage elsewhere in the state.The fire, which was just three percent contained after igniting six days ago, has been fed by high temperatures and low humidity, which were expected for at least the next week, said California Department of Forestry and Fire Protection Director Ken Pimlott.'This fire is a long way from done,' he said.Gusty winds reaching 60mph have fanned the flames creating ‘firenadoes’, which are strong enough to flip cars ‘like toys, according to fire service spokesman Scott McLean.The fire began on Monday with a mechanical failure of a vehicle. It grew completely out of control on Thursday, tearing through two small communities and reaching the city of Redding.Tens of thousands of people fled the city in fear of their lives from the blaze.  In the small northern California community of Keswick, only a handful of homes remain.

        Carr Fire grows to over 95,000 acres, 6 fatalities, 874 structures destroyed -- The Carr Fire burning in Shasta County near Redding has grown to at least 95,000 acres, with over 874 structures burned, according to Cal Fire. The fire has claimed six lives and is only 17 percent contained.   Shasta County Sheriff Tom Bosenko said authorities found a sixth victim of the blaze at a home that was consumed by flames, though he declined to say where. The victim's identity was not released. The sheriff's department is also investigating seven missing persons reports, Bosenko said. Redding police have an additional 11 reports of missing people, though many of them may simply not have checked in with friends or family, said Redding police Sgt. Todd Cogle. The so-called Carr Fire that affected Redding - a city of about 92,000 people - was ignited by a vehicle problem on Monday about 10 miles (16 kilometers) west of the city. On Thursday, it swept through the historic Gold Rush town of Shasta and nearby Keswick fueled by gusty winds and dry vegetation. It then jumped the Sacramento River and took out subdivisions on the western edge of Redding. After days of fortifying the areas around Redding, fire crews were increasingly confident that the city would escape further damage. The fire had not grown inside the city limits since Saturday, Gouvea said.Some of the 38,000 people forced to evacuate said they were frustrated because they didn't know whether their homes were standing or were destroyed. Authorities had not reopened any evacuated neighborhoods where fires raged due to safety and ongoing investigations and urged people to be patient, saying they would soon let residents back. Fed up, on Sunday morning Tim Bollman hiked 4 miles (6 kilometers) on trails up steep terrain to check on the Redding home he built for his wife and two sons 13 years ago. He found rubble. "There's not even anything to pick up," he said. "It's completely gone."

        Carr Fire in California is so hot it's creating its own weather system The Carr Fire raging in Northern California is so large and hot that it is creating its own localized weather system with variable strong winds, making it difficult for experts to predict which way the blaze will spread. At least seven people were still missing in Shasta County, California, as shifting winds, dry fuel and steep terrain helped the monstrous fire engulf almost 100,000 acres by Monday morning, authorities said.  The fire has claimed six lives, including a firefighter and bulldozer operator working to extinguish the blaze.   Sixteen people had been reported missing, but nine of those have been found safe, according to Shasta County Sheriff Tom Bosenko. The fire, which started a week ago, has burned 98,724 acres and is just 20% contained, according to the California Department of Forestry and Fire Protection, known as Cal Fire. Flames have destroyed at least 966 structures in the area, making it one of the top 10 most destructive wildfires in California history. In fact, seven of the 12 most destructive fires have happened since 2015. More than 3,300 fire personnel are battling the flames with more than 330 engines and 17 helicopters, Cal Fire reported.  Wildfires like this can get so hot they make pyrocumulus clouds, formations that look like mushroom clouds and can be seen for miles. Cumulus clouds are usually formed when the sun heats the ground, sending warm air up, where the air cools and condenses to form a cloud. In a wildfire, heat from flames forces the air to rise quickly. Water inside trees and other plants evaporates. The added moisture condenses in the cooler air above. The clouds look and act like thunderstorms. They can produce lightning and powerful winds in different directions, further complicating efforts of firefighters. Sometimes, they even contain enough moisture to become a type of cloud that can produce rain -- possibly even putting out the blaze.

        Idyllwild Fire: Arson suspect arrested in California's Cranston Fire  – A suspect in a fast-moving fire east of Los Angeles was arrested Wednesday onsuspicion of arson after fires forced the mandatory evacuation of Idlyllwild and other parts of the San Jacinto Mountains, home to about 12,000 people.The fast-growing Cranston Fire in southwest Riverside County, grew to 4,700 acres, or 7.3 square miles, Wednesday. The fire was 5 percent contained as of late Wednesday night.Brandon N. McGlover, 32, of Temecula, California, was arrested on suspicion of five counts of arson. He was being held on $1 million bail, accused of setting the Cranston Fire and other fires in southwest Riverside County, officials said.  According to jail records, he was being held at the Cois Byrd Detention Center in Murrieta, California, and is expected to appear in court Friday morning. Officials announced McGlover's arrest Wednesday night, hours after the Cranston Fire began.  The fire was the largest of at least five that police believe were purposely set Wednesday by a man whose car was reportedly spotted at the starting point of the blaze in Riverside County, officials said. According to a U.S. Forest Service-San Bernardino National Forest news release, fire investigators from the forest service and from CAL FIRE/Riverside County Fire Department, as well as law enforcement personnel from several police agencies, responded to a series of wildland fires Wednesday afternoon "in several areas within southwest Riverside County and federal areas along Highway 74 in the national forest."

        Carr Fire in California becomes 7th most destructive fire in state history - The catastrophic Carr fire blazed a path of devastation, becoming the 7th most destructive fire in California history as it burned more than 1,100 structures and left six people dead. The fire, which started more than a week ago, has burned 103,772 acres -- scorching an area bigger than the size of Denver. The Carr fire is burning so large and intensely that itcreated its own localized weather system, making it difficult for experts to predict which way the blaze will spread. Wildfires like this can get so hot they make pyrocumulus clouds, formations that look like mushroom clouds and can be seen for miles. Smoke from the massive blaze and another California fire burning near Yosemite National Park, called the Ferguson Fire, could be seen in satellite images.As of Monday night, the Carr fire was just 23% contained, according to the California Department of Forestry and Fire Protection, known as Cal Fire. More than 3,300 fire personnel are battling the flames in triple-digit heat, shifting winds, dry fuel and steep terrain --- all conditions stacked against their efforts. The fire has claimed six lives, including two involved in the firefighting efforts and four residents. Jeremy Stoke, a fire inspector with the Redding Fire Department, and an unidentified private-hire bulldozer operator died Thursday. A 70-year-old woman, Melody Bledsoe and her two great-grandchildren died when their house was overcome by flames.Another person was found dead after a fire consumed another house, Shasta County Sheriff Tom Bosenko said Sunday. And at least 19 people were still reported missing in Shasta County, Ca

         Carr Fire 2018: why it's one of the severest fires in California history - The vicious Carr Fire near Redding, California, has already torched more than 121,000 acres, an area larger than Denver, since igniting on July 23. Flames have destroyed more than 1,000 homes in and around Redding, a town 200 miles north of San Francisco and home to 90,000 residents. Carr is now the seventh most destructive fire in state history and the most destructive ever for Shasta County. The fire has killed at least six people. Carr is so large and so hot, it has created its ownweather system and melted boats on Whiskeytown Lake. Residents reported seeing fire tornadoes, and the rising smoke and ash created towering, dark pyrocumulus clouds. As of Thursday morning, the fire is only 35 percent contained, and firefighting costs have already reached $24 million. One bit of good news is that all 60 people reported missing have been found, according to police.The Carr Fire is just one event in an already devastating wildfire year in the United States, coinciding with vast blazes in other parts of the world, including the Arctic Circle. These fires follow a “global heat wave” of searing, record-setting heat as well as exceptional drought..Lisa Wilkolak, a public information officer with the multi-agency firefighting unit battling the Carr Fire, explained that a red-flag warning was already in effect at the start of the fire, meaning the conditions for a blaze were ripe.Despite some rainfall in the spring, the brush and forests around Redding dried out in the triple-digit temperatures this summer, turning grasses and trees into tinder. “California itself is still trying to recover from drought,” Wilkolak said. “We had some dry fuels.”  “We had very, very intense winds at the beginning of this fire,”

        130,000 Acres Burned In California After 143mph "Fire Tornado" Rips Through Redding - California's Shasta County is dealing with the 6th-worst fire in state history, which has killed 6 people and burned over 130,000 acres. The Carr fire, which is just 39% contained and being fought by over 4,300 fire personnel, has destroyed over 1,500 structures and is threatening another 1,300. Thousands of residents have been evacuated, while Yosemite Valley gave people until Noon on Friday to leave the area.  This is how fast the Carr Fire is spreading in Northern California  — CNN (@CNN) August 3, 2018     Simulation of the #CarrFire using @CAL_FIRE’s “sand” sim table   — Active NorCal (@ActiveNorCal) August 3, 2018    Large fires such as the Carr can produce their own unique weather paterns - and this was no exception. On July 26, the inferno unleashed a "fire tornado" that was so strong it uprooted trees and stripped away their bark. The National Weather Service on Thursday said that the vortex reached in excess of 143 MPH - equivalent to an EF-3 on the enhanced Fujita tornado scale.  The NWS & @CAL_FIRE Serious Accident Review Team (SART) are conducting a storm damage survey regarding the large fire whirl that occurred Thursday evening in Redding. Preliminary indicators placed max wind speeds achieved by the fire whirl in excess of 143 mph. #cawx #CarrFire   “This is historic in the U.S.,” Craig Clements, director of San Jose State University’s Fire Weather Research Laboratory, told BuzzFeed News. “This might be the strongest fire-induced tornado-like circulation ever recorded.” Known as a pyrocumulus cloud, the ominous red weather formations usually occur over volcanic eruptions or forest fires when intensely heated air triggers an upward motion that pushes smoke and water vapor to rapidly rise. They can develop their own weather patters, including thunderstorms with severe winds which then further fan the flames. The tornado formed as the blaze, which has already charred an area three times as large as the District of Columbia, erupted and began to rotate like a supercell thunderstorm. Initially the smoke plume reached about 20,000 feet. That’s not overly impressive for a thunderstorm, but it couldn’t rise any higher: It was trapped beneath an inversion.That “cap” in the atmosphere caused the smoke to spread out. But around 7:15 p.m. Pacific time, two plumes suddenly managed to break the cap. They rose into an unstable environment and exploded upward, towering to nearly 40,000 feet within just 30 minutes. That extreme, rapid vertical growth of the fire fueled an updraft that eventually would spawn the tornado. –WaPo

        There Are 18 Active Wildfires Burning Across California. This Map Shows All of Them - Fast-moving and aggressive wildfires are scorching California – killing at least eight people and destroying more than 1,000 homes and businesses.Thousands of firefighters are currently battling the flames of 18 active wildfires, which are threatening communities from Redding in Northern California to Riverside County in Southern California. Two new blazes, one near Mendocino National Forest and one near Yuba City, broke out Tuesday, the Associated Press reports.The state’s biggest wildfire, the Carr Fire in Redding, has burned through 112,888 acres in the past week. It was just 30% contained as of Wednesday morning. More than 300 miles south, the 58,074-acre Ferguson Fire prompted Yosemite National Park officials to close the popular Yosemite Valley for the first time in 20 years — during peak tourism season.Together, these two fires have already taken the lives of three firefighters, one civilian bulldozer operator and a great-grandmother and her great-grandchildren. Some of California’s wildfires are burning in mountainous areas, making it even more difficult for firefighters to contain them. And many are burning in areas experiencing record-shattering extreme heat.This is only the beginning for California’s fire season. In recent years, the season has grown longer and more intense – prompting some officials to declare that fire season is now year-round. In 2017, California had its most destructive fire season yet, with an intense series of Northern California fires that scorched more than 245,00 acres and killed 44 people. Those fires began in October, a month that is typically considered the most dangerous for fast-moving, aggressive wildfires. Below is an interactive map of all the major wildfires in California.

        The only thing fire scientists are sure of: this will get worse -  As of July 31, more than 25,000 firefighters are committed to 140 wildfires across the United States—over a million acres aflame. Eight people are dead in California, tens of thousands evacuated, smoke and pyroclastic clouds are visible from space. And all any fire scientist knows for sure is, it only gets worse from here. How much worse? Where? For whom? Experience can’t tell them. The scientists actually are uncertain. Scientists who help policymakers plan for the future used to make an assumption. They called it stationarity, and the idea was that the extremes of environmental systems—rainfall, river levels, hurricane strength, wildfire damage—obeyed prior constraints. The past was prologue. Climate change has turned that assumption to ash. The fires burning across the western United States (and in Europe) prove that “stationarity is dead,” as a team of researchers (controversially) wrote in the journal Science a decade ago. They were talking about water; now it’s true for fire. “We can no longer use the observed past as a guide. There’s no stable system that generates a measurable probability of events to use the past record to plan for the future,” says LeRoy Westerling, a management professor who studies wildfires at UC Merced. “Now we have to use physics and complex interactions to project how things could change.” Wildfires were always part of a complex system. Climate change—carbon dioxide and other greenhouse gases raising the overall temperature of the planet—added to the complexity. The implications of that will play out for millennia. “On top of that is interaction between the climate system, the ecosystem, and how we manage our land use,” Westerling says. “That intersection is very complex, and even more difficult to predict. When I say there’s no new normal, I mean it. The climate will be changing with probably an accelerating pace for the rest of the lives of everyone who is alive today.”

        Sweden’s worst-ever wildfires could last for months - The large wildfires currently burning will not be put out until the snow comes in October or November, says the head of the operation in Gävleborg (central Sweden). Patrik Åhnberg was in charge of fighting the historic fire in Västmanland, but now just one of the many areas affected, in Ljusdal, now has a bigger fire than that record fire back in 2014. And the dry warm weather seems set to continue through into August. It is the warmest year for east Sweden for at least 260 years, since records began in 1756. This week it is likely to reach 35 degrees in Mälardalen and south east Norrland (north-central Sweden). The scorching week will make conditions even tougher for those fighting the worst fires in modern times, and the extreme weather means there is a great risk of more fires breaking out in the tinder dry grass and woodland. Four water-bombing planes have come from Italy and France, and on Sunday night it was confirmed that planes from Portugal are also on the way.A convoy of 44 fire trucks and 139 fire fighters from Poland, that has been driving up through the country, met with cheers along the way, and reached Sveg in Jämtland (central Sweden) on Sunday night. The Polish fire team will head towards the worst fires, in Ljusdal, where other EU help has also been concentrated.

         As Greek Wildfire Death Toll Climbs, Government Takes Responsibility - WSJ -Greece’s Prime Minister Alexis Tsipras said Friday that he takes responsibility for the wildfires that killed at least 87 people, responding to mounting anger over the government’s handling of the disaster, one of the worst here in living memory.  “I take full political responsibility for this tragedy in front of my cabinet and the Greek people,” Mr. Tsipras told his ministers at a cabinet meeting. “I urge you to do the same no matter how difficult it is.” Mr. Tsipras’s address shows a change of political direction from recent days, when authorities involved insisted they did everything they could to avert Monday’s wildfires. The cabinet meeting came after growing criticism by all opposition parties and locals in the areas affected that the government failed to apologize about the disaster. Wildfires fanned by strong winds ripped through thousands of hectares of pine forest and resort towns packed with residents and tourists on Monday in the Attica region near the Greek capital. When winds changed the fire’s direction, the resort town of Mati became a death trap. People tried to escape in their cars from the village’s narrow alleys or to flee to the beach, without emergency warnings or guidance from authorities.   Mr. Tsipras on Friday blamed the widespread building code violations in the area, repeating authorities’ statements that unregulated construction in areas overgrown with dry bush contributed to the death toll. “We realize today in the most painful way that we are ruling a country where distortions dominated for years; where entire towns were built arbitrarily on streams and beaches,” Mr. Tsipras said. “We have to consider whether we did enough to change this.”

        Death Toll Reaches 91 in Greek Wildfire; 25 Remain Missing - The death toll from the Greek wildfire has reached 91 following the inferno that ripped through a coastal area east of Athens, according to fire officials. Another 25 remain missing after Europe’s deadliest forest fire in more than a century. Prior to the updated toll, the national fire service listed 86 fatalities as hundreds of mourners attended a memorial service for victims in the seaside village hit hardest by the fire Sunday morning. The fire sped flames through the village of Mati, a popular resort spot, without warning on July 23. A database maintained by the Centre for the Research on the Epidemiology of Disasters in Brussels shows it as the deadliest wildfire in Europe since 1900. The vast majority of victims died in the fire itself, though a number drowned in the sea while fleeing the flames. Until Sunday night, Greek officials had not provided a tally of the people reported missing. Hellenic Fire Service spokeswoman Stavroula Malliri provided a breakdown that illustrated why the death toll continued to expand and the list of people thought to be missing was difficult to draw up with precision. Malliri said that as of Sunday evening, 59 victims had been identified from bodies or remains and another four people injured in the fire had died in area hospitals. But identities have not yet been linked to another 28 sets of remains, she said. Relatives or friends reported 25 people who were considered officially missing, Malliri said. A fire service official said some or all of the 25 missing people could be among the yet-unidentified remains of the dead. The official requested anonymity because the fire still is under investigation. 

        How Did the End of the World Become Old News? - There has been a lot of burning lately. Last week, wildfires broke out in the Arctic Circle, where temperatures reached almost 90 degrees; they are still roiling northern Sweden, 21 of them. And this week, wildfires swept through the Greek seaside, outside Athens, killing at least 80 and hospitalizing almost 200. At one resort, dozens of guests tried to escape the flames by descending a narrow stone staircase into the Aegean, only to be engulfed along the way, dying literally in each other’s arms. Last July, I wrote a much-talked-over magazine cover story considering the worst-case scenarios for climate change — much talked over, in part, because it was so terrifying, which made some of the scenarios a bit hard to believe. Those worst-case scenarios are still quite unlikely, since they require both that we do nothing to alter our emissions path, which is still arcing upward, and that those unabated emissions bring us to climate outcomes on the far end of what’s possible by 2100. But, this July, we already seem much farther along on those paths than even the most alarmist climate observers — e.g., me — would have predicted a year ago. In a single week earlier this month, dozens of places around the world were hit with record temperatures in what was, effectively, an unprecedented, planet-encompassing heat wave: from Denver to Burlington to Ottawa; from Glasgow to Shannon to Belfast; from Tbilisi, in Georgia, and Yerevan, in Armenia, to whole swaths of southern Russia. The temperature of one city in Oman, where the daytime highs had reached 122 degrees Fahrenheit, did not drop below 108 all night; in Montreal, Canada, 50 died from the heat. That same week, 30 major wildfires burned in the American West, including one, in California, that grew at the rate of 10,000 football fields each hour, and another, in Colorado, that produced a volcano-like 300-foot eruption of flames, swallowing an entire subdivision and inventing a new term — “fire tsunami” — along the way. On the other side of the planet, biblical rains flooded Japan, where 1.2 million were evacuated from their homes. The following week, the heat struck there, killing dozens. The following week.

        Indonesia Earthquake Kills 16, Traps Hundreds of Tourists on Volcano --A rescue operation is underway Monday to rescue hundreds of tourists trapped by landslides on Indonesia's Mount Rinjani, a Lombok volcano, after an earthquake killed 16 people.   The National Disaster Mitigation Agency said more than 680 people are stranded on Rinjani based on figures from its entry gates where visitors are registered. Most are foreign — from 26 countries, including more than 330 from Thailand. “Providing food and medicine to them as soon as possible is now our priority,”   The landslides on Rinjani killed an Indonesian student, raising the death toll from the magnitude 6.4 earthquake to 16.  More than 162 were injured and more than 1,400 houses were damaged in the 6.4 magnitude earthquake that was felt on neighboring Bali, where no damage or casualties were reported.  The U.S. Geological Survey said the quake struck at a depth of only 4.4 miles. Shallow earthquakes tend to do more damage than deeper ones. East Lombok district was the hardest hit with 10 deaths, including a Malaysian tourist. The number of casualties could increase as data was still being collected from other locations on the island, he said.  Indonesia’s meteorology and geophysics agency has recorded more than 270 aftershocks.  Like Bali, Lombok is known for pristine beaches and mountains. Hotels and other buildings in both locations are not allowed to exceed the height of coconut trees.

        537 Dead in India Monsoon - Flooding and heavy rains associated with India's monsoon season have killed 537 people so far, The Times of India reported Saturday.The number of deaths was reported by the country's National Emergency Response Center, which recorded 139 deaths in Maharashtra, where Mumbai is located, 126 in the southwestern state of Kerala, 116 in West Bengal in the northeast, 70 in Uttar Pradesh, 52 in Gujarat and 34 in Assam.The total number of deaths for the country are likely higher, since deaths in other states are yet to be tallied and some deaths, especially in rural areas, are not reported, according to Sky News.At least 58 people died this weekend, as heavy rains Thursday and Friday in the northern state of Uttar Pradesh flooded land and caused houses to collapse, The Associated Press reported Saturday.India's monsoon season started more than two weeks ahead of schedule on June 29, Reuters reported at the time.The monsoon season typically lasts until October, according to The Associated Press. So far, the 2018 season has also displaced hundreds of thousands of people.

        More Than 100,000 Displaced in Deadly Myanmar Monsoon Floods --  Eleven people have died and more than 119,000 have been forced to flee as heavy monsoon rains beginning last week caused significant flooding in Myanmar, government officials told Reuters on Monday. Myanmar is the latest Southeast Asian country to be inundated by heavy rains this monsoon season. A dam collapse in Laos last week left thousands homeless, and early monsoon rains in Thailand trapped a team of 12 young soccer players and their coach in a cave, leading to a successful rescue effort that garnered international attention. Myanmar's minister of social welfare, relief and resettlement Win Myat Aye told The New York Times that climate change was to blame for the heavy rains and floods. "I just want to alert the people that climate is changing all over the world and we all have to be careful about it," he said. Observed climate changes in Myanmar over the past 60 years have included an uptick in "intense rainfall events" and floods, according to the Myanmar Climate Change Alliance. But local environmentalists told The New York Times that logging and deforestation have also made floods more severe in recent years. "This time, flooding in our state is the worst," Karen Rivers Watch coordinator for the state of Mon Saw Tha Phoe told The New York Times."It is because of deforestation and we cannot deny it."   Karen Environmental and Social Action Network worker Kyaw Swa also said that the government could do more to warn citizens effectively.

        Huge flood from failed dam in Laos has now spread to Cambodia - Some 25,000 Cambodians raced to find higher ground after floodwaters spread to their province from a failed hydroelectric dam in neighboring Laos, according to state media in Cambodia. In Laos, the government says flooding has killed at least 27 people and destroyed the homes of more than 3,000 residents. Cambodia's Sekong River hit a water level of nearly 12 meters (almost 40 feet) on Thursday — a height that left 17 villages flooded and forced the local government to rush to find shelter for roughly half the population of the Siem Pang district in Stung Treng province, state news agency AKP reports.According to AKP, Cambodian water and weather spokesperson H.E. Chan Yutha "said that there was no retreating sign and the water kept increasing about two centimeters per hour." The flooding could also threaten a nearly 900-foot bridge that was recently completed in Stung Treng, the news agency says. The disaster started Monday night in Laos' Attapeu Province. That's where a "saddle dam" in a large hydroelectric project failed, causing panic and destruction in low-lying villages downriver. The rush of millions of gallons of water has now caused evacuations more than 40 miles away in Cambodia — and with more rain falling this week, the flooding is expected to continue as the mass of water churns through river systems.

        The Laos dam collapse, and the hidden costs of the Mekong’s hydroelectric plans - Beyond concern for the undoubted human costs of the collapse of a dam in Laos, this event once again focuses attention on the long-term effect of the massive expansion of hydropower in the Mekong Basin.While international attention has tended to be directed towards existing and planned dams on the mainstream of the Mekong in China and Laos, less attention has been given to the fact that plans are in place for the construction of up to 120 dams on tributaries of the Mekong – the dam that collapsed in Attapeu province in the far south of Laos is a case in point.  And although some of the dams are relatively small in size, others, such as the Lower Se San 2 dam in northwestern Cambodia, which is now in operation, are substantially larger, with a 400 MW capacity and projected major future effects on fish stocks.Nonetheless, it is in Laos that the greatest expansion of tributary dams is planned as part of that country’s determination to become “the battery of Southeast Asia”. It is pushing ahead with completion of its existing mainstream dams at Xayaburi and Don Sahong, and shows no intention of ceasing to build on the Mekong’s tributaries. Although China is often singled out for its role in the development of Mekong dams, in the case of this Xepian-Xe Nam Noy dam the construction firms involved are Korean and Thai, with the electricity to be generated planned for sale to Thailand.

        Ocean Wilderness Vanishing -- Jerri-lynn Scofield  --A paper published last week in the journal Current Biology, The Location and Protection Status of Earth’s Diminishing Marine Wilderness, documents the dire worldwide state of ocean wilderness.The paper concluded that only 13.2% (∼55 million km2) of the world’s ocean could be classified as marine wilderness, and most of this was far away from coastal areas (e.g.,  coral reefs). Only 4.9% of marine wilderness is currently within marine protected areas.The paper emphasizes that targets to retain marine wilderness are needed in global conservation strategies.In particular:We found that only 4.9% of global marine wilderness (2.67 million km2) is inside [marine protected areas (MPAs]), despite 6.97% of total ocean area being under protection. This protection occurs almost exclusively within national waters, with 12% (2.65 million km2) of global wilderness within [exclusive economic zones] , but only 0.06% (0.02 million km2) of wilderness in high seas protected. Global wilderness protection is high in some populated regions, with 98% protected in Temperate Southern Africa and 17% protected in the Central Indo-Pacific). Considerably more global marine wilderness remains in offshore ecosystems (49.7 million km2) than in coastal ecosystems (5.5 million km2); but the proportion of protected wilderness is similar (4.4% and 4.8%, respectively). In coastal ecosystems, the vast majority of protected wilderness (93%) is in soft-bottom areas, rather than habitats such as rocky reefs or coral reefs that people depend on for food and income ). However, despite having low wilderness extent and areal protection, these ecosystems have high proportional levels of protection, with 66% and 26% of rocky reef and coral reef wilderness being covered by MPAs, respectively. The scientists who conducted the research were surprised by their findings, as the Guardian reports in Almost all world’s oceans damaged by human impact, study finds: “We were astonished by just how little marine wilderness remains,” says Kendall Jones, at the University of Queensland, Australia, and the Wildlife Conservation Society, who led the new research. “The ocean is immense, covering over 70% of our planet, but we’ve managed to significantly impact almost all of this vast ecosystem.”

        Ocean acidification to hit levels not seen in 14 million years --The world’s oceans are likely to become more acidic than at any time in the past 14 million years, scientists have found. New research led by Cardiff University has shown that under a ‘business-as-usual’ scenario of carbon dioxide (CO2) emissions, ocean acidification is likely to hit unprecedented levels. Ocean acidification occurs when CO2 from the atmosphere is absorbed by seawater, resulting in more acidic water with a lower pH. Around a third of the CO2 released by burning coal, oil and gas gets dissolved into the oceans. Since the beginning of the industrial era, the ocean has absorbed around 525 billion tons of CO2, equivalent to around 22 million tons per day. The rapid influx of CO2 in to the oceans is severely threatening marine life, with the shells of some animals already dissolving in the more acidic seawater. Under a ‘business-as-usual’ future scenario where we continue to emit CO2 at the same rate as we do today, atmospheric CO2 would be near 930 parts per million in the year 2100, compared to around 400 parts per million today. Similarly, the pH of the oceans would be less than 7.8 in 2100 compared to a pH of around 8.1 today. This is very significant as the pH scale is logarithmic, meaning a drop of just 0.1 pH units represents a 25% increase in acidity. 

         New study linking warming with disrupted Atlantic flow has scientists “grumpy” --Last week, Nature published a climate science study that reached a very surprising conclusion—one that other climate scientists are taking issue with. Two other scientists penned a critical response and posted it at Real Climate the same day, outlining their issues with the study's findings.  This kind of argument could be left to play out among scientists, but the BBC News covered the study without skeptical counterweight, so we thought it would be worth explaining what the arguments are about. The study by Xianyao Chen Ka-Kit Tung focused on the large-scale movement of water in the Atlantic Ocean. In this section of the ocean “conveyor belt” that wraps around the world, surface water is carried toward the pole before mixing downward around Greenland and heading south along the ocean floor.   Chen and Tung argue that The Day After Tomorrow had it precisely backward. While stalling of the current in the past has caused cold conditions around the North Atlantic, the researchers say it would be different in a warming climate. Because the Atlantic conveyor belt helps transport a large amount of heat energy trapped by our greenhouse gases into the deep ocean, slowing the conveyor belt should cause more heat energy to build up near the surface—raising global temperatures.  That study attracted a lot of criticism for the way it calculated the Atlantic’s influence, somewhat circularly assuming that most of the wiggles were due to the Atlantic—sidelining other well-studied factors like sunlight-reflecting aerosol pollution, eruptions, and Pacific circulation. That same calculation appears in this new study, underlying their comparison between the strength of the Atlantic circulation and changes in the rate of global warming.In their post at Real Climate, Penn State’s Michael Mann and Potsdam University’s Stefan Rahmstorf—both of whom have studied Atlantic circulation—take issue with this and several other aspects of the new paper. They say the idea that slowing circulation would accelerate warming rather than cool the North Atlantic runs counter to so many studies that it enters “extraordinary claims require extraordinary evidence” territory. But, they argue, there's a complete absence of key evidence: “Chen and Tung do not show any models simulations either to provide evidence that their mechanism can actually work, neither do they discuss the various published model results that have come to the opposite conclusion.”

        The sinking state - The central Pacific nation of Kiribati has a few claims to fame. The country — known under British colonial rule as the Gilbert Islands (the name Kiribati, pronounced KI-ri-bahss, is a local transliteration of “Gilberts”) — has 33 islands spread over more than 1.3 million square miles, making it one of the world’s largest nations in terms of sea area, though one of the smallest in terms of land. But what it gets the most attention for these days is its impending doom: The nation may be one of the first in line to be wiped out by the effects of climate change. In the century to come, we’re likely to see dramatic alterations to the physical shape of the world as we know it, thanks to rising sea levels and other environmental changes. But the immediate challenges faced by most countries pale in comparison to those of Kiribati, which has an average elevation of less than six feet. The atoll of Tarawa, where nearly half the country’s 110,000 residents live, could soon be substantially underwater. “By 2050, 18-80% of the land in Buariki, North Tarawa, and up to 50% of the land in Bikenibeu, South Tarawa could become inundated,” the government told the United Nations in 2015. Kiribati’s smaller outlying islands could be wiped out even sooner. “The results of sea level rise and increasing storm surge threaten the very existence and livelihoods of large segments of the population,” officials wrote. Small island states like Kiribati and the Maldives have become symbols of the potential impacts of global warming. At the 2015 Paris climate summit, they pressured larger countries to accept the goal of limiting global warming to 1.5 degrees Celsius, rather than two degrees, over preindustrial levels. (It was mostly a symbolic victory: Barring unforeseen circumstances, particularly since the Trump administration pulled the United States out of the accord, both targets will be exceeded.) They are also working to develop first-line defenses against the effects of sea-level rise, including planting mangroves to prevent coastal erosion and improving rainwater-collection systems to protect water quality.

        As we approach the final stretch... - Arctic Sea Ice by Neven - For years we've talked about one of the most fascinating phenomenons of Arctic sea ice loss as it progresses from year to year: The moment when the ice disappears regardless of the weather. We've seen some of that, back in July 2012, when extent and area numbers kept going down steadily, even though weather conditions weren't conducive to melt and should have caused a marked slowdown on the graphs (like they did in the preceding years). Some time later I concluded that this had to do with what I now call melting momentum. The idea is that if during May and July the ice gets hit by lot of sunshine, lots of melt ponds form and they soak up a lot of heat. This doesn't immediately cause the ice to melt, but starts to make itself felt towards the later stage of the melting season. The built-up momentum keeps the melting going. For this reason I've been focusing on things like compactness, that tells us something about the amount of water within the ice pack, whether open water or melt ponds (satellite sensors can't see the difference). We saw in 2016 that there wasn't much melting momentum built up during May and June, but despite the cloudiness, a record warm winter and persistent high air temperatures were enough to make the ice vulnerable enough for a big cyclone and massive dipole to have 2016 come in second on almost all graphs (see this overview). Now, this year has been extremely interesting so far. For the third time in a row, the winter preceding the melting season was relatively mild, the maximum was low (second lowest on record), and the trend line on many a graph went low from the get-go. Not as low as 2016, but low. However, as in previous years, clouds moved in and things slowed down to a crawl, taking the trend line as high up as 11th lowest on record on the JAXA sea ice extent chart last week. But then this happened in the last couple of days, suggesting spectacular melting on the Pacific side of the Arctic:

         Supreme Court refuses, for now, to block kids’ climate case -- With no noted dissent, the Supreme Court on Monday turned down — for now — the Trump Administration’s request to delay or block a group of teenagers’ sweeping lawsuit that seeks to force the federal government to protect the climate they will live in as they grow up.  At the same time, however, the Court cautioned the trial judge handling the case to be wary about the sweep of what the lawsuit is asking.The youths’ lawsuit involves their claim to create a fundamental new constitutional right “to a climate system capable of sustaining human life.”In what is probably the last action in which Justice Anthony Kennedy will take part before his retirement on Tuesday, the Court urged the Oregon federal judge handling the case to rule promptly on the Administration’s two-pronged attempt to shut down the case altogether.   U.S. District Judge Ann Aiken of Eugene, Ore., held a hearing on those requests earlier this month but has yet to rule.The case, one of several filed in recent years by legal advocates for teenagers worried about their environmental future, is currently scheduled to go on trial in Eugene in late October; the judge has scheduled 50 days for the trial.  This particular lawsuit has been developing for nearly three years.In refusing as “premature” the Administration’s multiple requests to thwart the lawsuit, the order issued by the Court on Monday called the basic constitutional claim in the case “striking” in its breadth, and commented that there are “substantial grounds for difference of opinion” about whether the case was simply too ambitious even to be allowed to proceed in court.

        Plan for $4.5B Wind Farm Scrapped After Regulator's Denial — A utility said Friday it is dropping plans for what would have been the largest wind farm in the country, a day after regulators in Texas rejected the $4.5 billion project. American Electric Power said it was cancelling plans for the 2,000-megawatt Wind Catcher wind farm, which would have spanned two counties in the Oklahoma panhandle and provided power to customers in Oklahoma, Texas, Arkansas and Louisiana. The move came a day after the Public Utility Commission of Texas denied approval of the project, which had already won approval from regulators in Arkansas and Louisiana. A decision was pending before an Oklahoma regulatory panel. Nicholas K. Akins, AEP' chairman, said the project needed approval from all four states in order for it to be completed by the end of 2020 and be 100 percent eligible for a federal tax credit. The project, when completed, would have provided power to customers in the four states of two of AEP's subsidiaries: the Public Service Company of Oklahoma and Southwestern Electric Power Company. The project included the construction of 800 wind turbines and also called for the construction of a 360-mile (580-kilometer) transmission line from the wind farm to Tulsa, Oklahoma, where the company said the existing electric grid would deliver power from the farm to customers. A spokesman said preliminary work had begun at the wind farm site but no work had started on the power line. Texas commissioners had said the benefits of the project weren't enough for the state's ratepayers and were based on questionable assumptions. The plan to construct the power line had also faced opposition from some Oklahoma land owners, and the state's Republican attorney general had also raised concerns about the project.

        AEP cancels largest US wind project after Texas rejection -- AEP's 2 GW wind farm in the Oklahoma panhandle would have been the largest single renewable energy project in the United States, providing power for the company's customers in four states. The Public Utility Commission of Texas (PUCT), however, took issue with exposing ratepayers to the cost of the project. "Without significant safeguards — and I don't believe the [proposal] provides significant safeguards for ratepayers — I'm not there," PUCT Chair DeAnn Walker said during the open meeting Thursday. Generation in Texas is typically built by private investors in the market operated by the Electric Reliability Council of Texas. But AEP subsidiary Southwestern Electric Power Co. (SWEPCO) does not operate in that market and asked regulators to allow it to finance the project through charges on customer power bills. Doing so would save money over the life of the project and protect against the risk of natural gas price increases, the company argued. Regulators, however, were skeptical, with Commissioner Arthur D'Andrea saying the company was "asking us for $4.5 billion of taxing authority." "It's one thing when you need the generation going forward, but this is [AEP] saying 'we don't need it, we think it will lower their rates and it's a financial play,'" D'Andrea said. "You have a burden to show that the taxpayers ... really have something to gain from that, I'm not sure they met that burden here." 

        Electricity Reliability Council of Texas surpassed all-time peak hourly load in July - On July 18, 2018, electricity demand in the area served by the Electricity Reliability Council of Texas (ERCOT) reached a new all-time hourly peak load of 72,192 megawatts (MW) during the hour starting at 4:00 p.m. That record was itself surpassed the following day during the hour starting at 5:00 p.m., with load reaching 73,259 MW. The previous record of 71,110 MW occurred on August 11, 2016. Despite some sporadic power outages, ERCOT managed this new record demand without any widespread loss of load to the system. In its seasonal assessment earlier this year, ERCOT had expected that it would surpass its all-time daily peak load this summer, but at a slightly lower magnitude. While the assessment projected a new peak of 1,600 MW higher than the previous record set in 2016, the actual load record set on July 19 was approximately 2,100 MW higher than the 2016 peak.  Recent coal power plant retirements and increased summer electricity demand have reduced the current reserve margin in ERCOT. This summer, ERCOT estimated a reserve margin of 10.9% of peak demand, which is lower than the planned reserve margin for ERCOT of 13.8%, and lower than the 15% reserve margin recommended by the North American Electric Reliability Corporation (NERC) for systems that predominately use thermal generation, such as ERCOT. Reserve margins reflect the amount of excess available generating capacity as a percentage of total capacity at projected peak system demand.

        War on Coal, Ugly Wind Turbines, and Chinese Climate Hoaxes: The Sad! Story Conveyed Through Nine Years of Trump Tweeting About Energy --Because the Internet is both a terrific and sad place, we have at our fingertips the ability to search through Donald Trump’s entire Twitter history for specific words and phrases. While this tool has been employed to demonstrate that Trump has tweeted more frequently about Rosie O’Donnell than his wife and count the different people he’s called losers, I haven’t seen anyone search through the tens of thousands of tweets to trace out the path of Trump’s publicly expressed opinions on the energy industry. While the major points of Trump’s energy policies are known (coal is beautiful, drill wherever we can, and American wants energy dominance), what else can we learn about how the President feels about various energy technologies and policies by looking at tweets from the days before his political career, while on  the campaign trail, and since being elected? In any scientific experiment, establishing a control group is important. Similarly, for this analysis, knowing Trump’s rate of Twitter activity over the years is important context. The below graph shows the frequency of all tweets, separated out by quarter, starting from the Donald’s first-ever tweet in May 2009 through the end of the second quarter of 2018 (June 30, 2018). As this graphic makes evident, Trump’s peak Twitter usage came in the first quarter of 2013 (well before declaring his Presidential candidacy) with 25 tweets per day, dropped a fair amount over the campaign trail, and leveled out at between 5 and 10 tweets per day since taking office. When combing through the archives of Trump tweets for energy-related mentions, the below table highlights the keywords searched within each energy category. The separation based on category and keyword will outline where Trump’s priorities lie for each slice of the energy field (priorities being both positive, like his support of coal, and negative, like his frequent dismissal of wind turbines). Focusing first on the oil and gas industry provides the following view:

        Trump EPA Will Maintain Obama-Era Smog Rule -  Trump's U.S. Environmental Protection Agency (EPA) said Wednesday that it would defend an Obama-era smog rule from a lawsuit brought in part by disgraced administrator Scott Pruitt when he was still attorney general of Oklahoma, The Hill reported.Justice Department attorneys said in a court brief that the EPA would no longer attempt to revise or repeal the 2015 rule, which lowered the permissible amount of ground-level ozone from 75 parts per billion to 70."While EPA officials in the current administration may have supported making different judgments about the significance of background concentrations of ozone and how to judge what standards are requisite to protect public health and welfare, the agency at this time does not intend to revisit the 2015 rule," the brief said, according to The Hill.The brief was filed a day after the EPA released its annual air quality report monitoring the state of the nation's air since the passage of the Clean Air Act in 1970. The report found that overall air pollution levels had fallen by 73 percent between 1970 and 2017. Ozone, one of the six pollutants tracked, had fallen by 22 percent, the smallest drop of the six.

        Trump Administration Proposes Auto Plan That Would Increase Fuel Use by 500,000 Barrels a Day— A draft proposal by federal regulators to roll back U.S. automobile efficiency requirements contends that their preferred plan would reduce “societal costs” by roughly half a trillion dollars through 2029, while increasing U.S. fuel consumption by 500,000 barrels per day. The assertions are detailed in an undated draft of the National Highway Traffic Safety Administration and Environmental Protection Agency forthcoming joint proposal to halt higher auto efficiency requirements after 2020. The draft was obtained and published earlier by the New York Times. Sources familiar with the administration’s planning say the document appears to be a version sent to the White House for review in May, and cautioned that its contents could change somewhat by the time it’s released next week. The agencies are poised to propose a dramatic overhaul of tough efficiency rules set during the Obama administration — freezing mileage targets from 2020 through 2026 instead of raising them each year. As Bloomberg reported on July 23, the plan will also propose revoking California’s authority to regulate carbon dioxide emissions from cars and light trucks and its mandate for electric vehicle sales in the state. Under the proposal, new cars and light trucks would be required to average about 37 miles per gallon from 2020 through 2026, instead of increasing over time to roughly 47 mpg under standards adopted by the Obama administration, according to the draft.

        Trump administration cites safety to freeze mileage standard -  — The Trump administration says people would drive more and be exposed to increased risk if their cars get better gas mileage, an argument intended to justify freezing Obama-era toughening of fuel standards. Transportation experts dispute the arguments, contained in a draft of the administration’s proposals prepared this summer, excerpts of which were obtained by The Associated Press. The excerpts also show the administration plans to challenge California’s long-standing authority to enact its own, tougher pollution and fuel standards. Revisions to the mileage requirements for 2021 through 2026 are still being worked on, the administration says, and changes could be made before the proposal is released as soon as this week. At a Senate committee hearing Wednesday, Sen. Ed Markey, a Massachusetts Democrat, said oil companies would be the only clear beneficiaries of a freeze in mileage standards. “This rollback of fuel economy standards is really all about petroleum,” he said. Andrew Wheeler, the acting administrator of the Environmental Protection Agency, acknowledged that freezing mileage requirements would raise oil consumption but cited the administration’s arguments of greater safety. The Trump administration gave notice earlier this year that it would roll back tough new fuel standards put into place in the waning days of the Obama administration. Anticipating the new regulation, California and 16 other states sued the Trump administration in May. Overall, “improvements over time have better longer-term effects simply by not alienating consumers, as compared to great leaps forward” in fuel efficiency and other technology, the administration argues. It contends that freezing the mileage requirements at 2020 levels would save up to 1,000 lives per year. New vehicles would be cheaper — and heavier — if they don’t have to meet more stringent fuel requirements and more people would buy them, the draft says, and that would put more drivers in safer, newer vehicles that pollute less. At the same time, the draft says that people will drive less if their vehicles get fewer miles per gallon, lowering the risk of crashes. 

        Trump mileage proposal claims to cut car costs and road deaths - The White House has approved a plan to freeze national fuel-efficiency standards for six years, which the administration projects will save Americans roughly $2,000 on every new vehicle purchased and avoid 1,000 road deaths a year over the life of the program, according to two individuals briefed on the matter.But auto safety analysts and environmental experts have questioned the assumptions used in deriving such figures.The proposed rule and accompanying documentation, prepared by the National Highway Traffic Safety Administration and the Environmental Protection Agency and slated for release on Thursday, have been the subject of intense infighting within the Trump administration.Acting EPA administrator Andrew Wheeler, who testified Wednesday before the Senate Environment and Public Works Committee, has privately questioned some of the plan’s analyses and legal arguments but publicly defended the forthcoming proposal.Despite the disagreements, the administration is moving forward with its efforts to ease fuel-efficiency standards on cars and light trucks through 2026 and to challenge the right of California and other states to set their own tailpipe standards, according to current and former government officials.Two people who received the proposal approved by the White House Office of Management and Budget described key elements on the condition of anonymity because it has not been publicly released. The EPA and the Transportation Department did not respond to requests for comment.The proposed rule rejects the approach the two agencies published less than two years ago during the Obama administration, which calculated that requiring higher fuel efficiency for cars and light trucks would save consumers money while also enhancing safety. Instead, the federal government now will argue that freezing a fleetwide average of 35 miles per gallon in 2020 will save roughly 12,700 lives over the ensuing decades, partly because consumers will be more likely to purchase new cars rather than remaining in older, less safe vehicles.

        U.S. fuel ethanol production capacity continues to increase – EIA - Fuel ethanol production capacity in the United States reached more than 16 billion gallons per year, or 1.06 million barrels per day (b/d), at the beginning of 2018, according to EIA's most recent U.S. Fuel Ethanol Plant Production Capacity report. Total listed, or nameplate capacity, of operable ethanol plants increased by 5%—more than 700 million gallons per year—between January 2017 and January 2018. The U.S. Fuel Ethanol Plant Production Capacity report shows EIA’s most up-to-date data tracking of the U.S fuel ethanol industry. Part of the increase in nameplate fuel ethanol production capacity in the most recent report is the result of EIA’s outreach to survey respondents that were operating at levels higher than their listed production capacities, which had resulted in utilization rates higher than 100%. In previous surveys, these respondents reported the facilities’ original design capacity values and may not have accounted for expansions and modifications at the plants. This year, some respondents increased their nameplate production capacity values to be consistent with EIA’s definition. The remaining increase in production capacity was a result of plant improvements and process modifications such as equipment upgrades, plant expansions, improved maintenance routines, and installation of new equipment at some facilities.  Most of the U.S. fuel ethanol production capacity is located in the Midwest region (as defined by Petroleum Administration for Defense District, or PADD, 2). Total nameplate capacity in the Midwest was 14.8 billion gallons per year at the beginning of 2018 (967,000 b/d), an increase of 5%—more than 650 million gallons per year—between January 2017 and January 2018. Of the top 13 fuel ethanol-producing states, 12 are located in the Midwest. The top three states—Iowa, Nebraska, and Illinois—contain more than half of the nation’s total ethanol production capacity.

        Batteries have a dirty secret -- Energy storage (batteries and other ways of storing electricity, like pumped water, compressed air, or molten salt) has generally been hailed as a “green” technology, key to enabling more renewable energy and reducing greenhouse gas emissions.But energy storage has a dirty secret. The way it’s typically used in the US today, it enablesmore fossil-fueled energy and higher carbon emissions. Emissions are higher today than they would have been if no storage had ever been deployed in the US.This is not intrinsic to the technology, by any means. If deployed strategically, energy storage can do all the things boosters say, making the grid more flexible, unlocking renewable energy, and reducing emissions.But only if it is deployed strategically, which it generally hasn’t been. In and of itself, energy storage is neither clean nor dirty — it is neutral, as likely to boost the revenue of fossil fuel plants as it is to help clean energy. If policymakers want to use it as a tool to enable clean energy, they need to be conscious of its characteristics and smarter about its deployment. There is a growing body of scholarly research around energy storage; the key paper on its emission effects is by the Rochester Institute of Technology’s Eric Hittinger and Carnegie Mellon’s Inês Azevedo, in Environmental Science & Technology.

        The $2.5 trillion reason we can’t rely on batteries to clean up the grid -  Today’s battery storage technology works best in a limited role, as a substitute for “peaking” power plants, according to a 2016 analysis by researchers at MIT and Argonne National Lab. These are smaller facilities, frequently fueled by natural gas today, that can afford to operate infrequently, firing up quickly when prices and demand are high. The Clean Air Task Force recently found that reaching the 80 percent mark for renewables in California would mean massive amounts of surplus generation during the summer months, requiring 9.6 million megawatt-hours of energy storage. Achieving 100 percent would require 36.3 million. The state currently has 150,000 megawatt-hours of energy storage in total, mainly pumped hydroelectric storage with a small share of batteries. Building the level of renewable generation and storage necessary to reach the state’s goals would drive up costs exponentially, from $49 per megawatt-hour of generation at 50 percent to $1,612 at 100 percent. And that’s assuming lithium-ion batteries will cost roughly a third what they do now. Similarly, a study earlier this year in Energy & Environmental Science found that meeting 80 percent of US electricity demand with wind and solar would require either a nationwide high-speed transmission system, which can balance renewable generation over hundreds of miles, or 12 hours of electricity storage for the whole system. At current prices, a battery storage system of that size would cost more than $2.5 trillion. “The system becomes completely dominated by the cost of storage,” says Steve Brick, a senior advisor for the Clean Air Task Force. “You have to pause and ask yourself: Is there any way the public would stand for that?”

        Bitcoin mining poses threat to Paris climate-change accord, study finds -- The process of “mining” cryptocurrencies is so energy intensive that it poses a threat to the global agreement to mitigate greenhouse gas emissions.In a study published in Energy Research & Social Science, John Truby, associate professor of law and director of the Center for Law & Development at Qatar University, said the Paris Agreement is under threat due to the growing energy consumption of mining cryptocurrencies.   “Despite digital currencies providing considerable potential transactional, security, and financial access benefits, the design of bitcoin’s mining and trading system requires such a vast consumption of electricity that it is equivalent to powering Denmark. This threatens the planet to the extent that intervention is necessary to prevent similar models emerging,” wrote Truby.   According to the Bitcoin Energy Consumption Index, annual electricity consumption stands at 73.12 TWh, a near 400% increase over the past 12 months, and according to the study, the process involved in a single bitcoin transaction could provide electricity for a home in Britain for an entire month.

        The fightback against the bitcoin energy guzzlers has begun -- Plattsburgh, New York, seemed to be turning the corner with a $10 million development grant from the state’s governor to revitalise the weary downtown district. Then the bitcoin miners arrived. “The resident hobbyists are no problem,” says Plattsburgh mayor Colin Read. “But when out of towners noticed cheap rates just as bitcoin prices began to spike they flocked here. Currently 15 per cent of our power supply is used by the large bitcoin operations – which pushes us over the city’s quota on cold winter days – meaning we have to buy power on the open market to meet demand, increasing costs by 30 to 50 per cent.” Thanks to nearby Niagara Falls, Plattsburgh has a quota of cheap electricity available at a low rate - 2.7 cents/kwh for residential or five cents/kwh for industrial use – against a US average of seven or eight cents.  And so Plattsburgh’s prices have attracted cryptominers to the region since late 2016 and the city now hosts two large miners, six medium-sized operations and hundreds of hobbyists. This added nearly $10 to residents electricity bills for January. Read, a former economist, says his main concern is that – unlike traditional industries or even server farms – the electricity demand of cryptomines don’t correspond to jobs or investment in the city.  “Typically, if a company moves into the area they’ll build a factory – that takes six months, offers jobs and invests them in the area. Cryptominers can come and go in a weekend – it’s the most footloose industry I’ve ever seen, the most energy intensive industry and the least labour intensive.” The city struck back in March, banning the launch of new bitcoin mining firms for 18 months and asking the local power regulator - the New York State Department of Public Service - for permission to raise electricity rates for existing miners. In May and June, the Department agreed - allowing Plattsburgh and neighbouring counties to impose extremely high-density load tariffs on bitcoin cryptocurrency miners.

        Earth's resources consumed in ever greater destructive volumes -- Humanity is devouring our planet’s resources in increasingly destructive volumes, according to a new study that reveals we have consumed a year’s worth of carbon, food, water, fibre, land and timber in a record 212 days. As a result, the Earth Overshoot Day – which marks the point at which consumption exceeds the capacity of nature to regenerate – has moved forward two days to 1 August, the earliest date ever recorded. To maintain our current appetite for resources, we would need the equivalent of 1.7 Earths, according to Global Footprint Network, an international research organisation that makes an annual assessment of how far humankind is falling into ecological debt. The overshoot began in the 1970s, when rising populations and increasing average demands pushed consumption beyond a sustainable level. Since then, the day at which humanity has busted its annual planetary budget has moved forward.  Thirty years ago, the overshoot was on 15 October. Twenty years ago, 30 September. Ten years ago, 15 August. There was a brief slowdown, but the pace has picked back up in the past two years. On current trends, next year could mark the first time, the planet’s budget is busted in July.  While ever greater food production, mineral extraction, forest clearance and fossil-fuel burning bring short-term (and unequally distributed) lifestyle gains, the long-term consequences are increasingly apparent in terms of soil erosion, water shortages and climate disruption.

         In 2016, U.S. energy expenditures per unit GDP were the lowest since at least 1970 - U.S. energy expenditures declined for the fifth consecutive year, reaching $1.0 trillion in 2016, a 9% decrease in real terms from 2015. Adjusted for inflation, total energy expenditures in 2016 were the lowest since 2003. Expressed as a percent of gross domestic product (GDP), total energy expenditures were 5.6% in 2016, the lowest since at least 1970.  Total U.S. GDP is calculated as the total value of goods and services produced in the United States including energy, and was $18.6 trillion in 2016, 1.5% (in real terms) higher than 2015 levels. U.S. GDP has grown every year since 2010, and U.S. total energy expenditures, which is the amount of money spent to consume energy in the United States, has decreased each year since 2011, leading to the record-low energy expenditure share. The decrease in total U.S. energy expenditures in 2016 was entirely attributable to lower energy prices, as total energy consumption has remained virtually unchanged since 2013. The U.S. average energy price was $15.92 per million British thermal units (Btu) in 2016, down 9% from 2015, and the lowest since 2003, when adjusted for inflation. Average energy prices reached their highest point on record in 2008, when they averaged $24.13 per million Btu.  Based on realized prices in 2017 and some months in 2018, EIA does not expect the downward energy price trend to continue, as average energy prices of products such as motor gasoline, natural gas, and retail electricity have all increased since 2016, contributing to higher U.S. energy expenditures since that year.

        U.S. coal shipments reach their lowest levels in years - The 661 million short tons (MMst) of coal consumed in the electric power sector in 2017 was the lowest amount of coal consumed since 1983, and 2017 was the fourth consecutive year that U.S. coal consumption and coal shipments by all transport modes declined. Nearly 70% of the coal consumed in the power sector in 2017 was shipped either completely or in part by rail, with the remainder shipped by river barge, truck, and other methods. Electric power sector coal consumption in 2017 was 36% (376 MMst) lower than in 2008, when U.S. coal production reached its highest level. The amount of coal shipped by rail has similarly declined: 432 MMst of coal were shipped by rail in 2017, a slight increase from 2016 but 33% lower than the 647 MMst shipped by rail in 2008. The share of coal shipments made by river barge has increased from 7% (2008) to 12% (2017). Coal produced in the Illinois Basin relies on shipments along the Ohio River and its tributaries for a significant share of its production. The share of shipments made by truck has gone from 12% (2008) to 9% (2017), coinciding with declines in Appalachian production that supplied generating facilities—many of which have closed or reduced their consumption of coal—that were a relatively short distance from the mines.  The cost of transporting coal can vary greatly along different routes. In addition to costs associated with a particular mode of transport, factors such as route length, availability of transport mode, supply source options, and the competition between coal and other commodities for transport can affect the transportation cost.  The real delivered cost of coal for all transport modes (commodity cost plus transportation cost) has fallen in recent years, most recently lower than $40 per ton in 2017, based on preliminary EIA estimates. The real delivered cost of coal has fallen nearly $8.00 per ton (16%) since 2008, with most of the reduction attributable to declining commodity costs. Over that same period, overall coal transportation costs have fallen by 4%, as declines in truck (down 9%) and river barge (down 39%) costs more than offset a 3% increase in rail shipping costs.

        America spends over $20bn per year on fossil fuel subsidies. Abolish them -- Imagine that instead of taxing cigarettes, America subsidized the tobacco industry in order to make each pack of smokes cheaper. A report from Oil Change International (OCI) investigated American energy industry subsidies and found that in 2015–2016, the federal government provided $14.7bn per year to the oil, gas, and coal industries, on top of $5.8bn of state-level incentives (globally, the figure is around $500bn). And the report only accounted for production subsides, excluding consumption subsidies (support to consumers to lower the cost of fossil fuel use – another $14.5bn annually) as well as the costs of carbon and other fossil fuel pollutants. At a time when we need to transition away from fossil fuels as quickly as possible, the federal and state governments are giving the industry tens of billions of dollars to make the production of their dirty, dangerous products more profitable. Crucially, the OCI report noted that if we want to meet the Paris target of limiting global warming to less than 2°C (and we do!), not only does the fossil fuel industry have stop developing new reserves, but “some already-tapped reserves must be retired early.” This reality is incompatible with continued US government subsidization of fossil fuel industry production, including $2.5bn per year for the exploration of new fossil fuel resources ­– new resources that simply cannot be developed if we’re to meet the Paris climate target. And as David Roberts notes, federal policy is also propping up the coal industry. Were they forced to meet modern pollution standards, 98% of currently operating coal power plants would be unprofitable compared to an equivalent natural gas plant. Coal power plants only stay open through regulations allowing pollution exemptions, and by forcing taxpayers to pick up the climate change bill.

        Virginia lawmakers consider fossil fuel lobbyist for energy regulator seat -- On paper, Virginia’s sweeping new energy law should result in significant new investments in the state’s electric grid, as well as energy storage, efficiency, and renewable generation such as wind and solar. How it actually plays out, though, will be largely determined by a trio of appointed commissioners with extensive regulatory authority.Now, even as Virginia lawmakers ask the State Corporation Commission to implement the comprehensive energy bill they passed this year, they’re also considering appointing a commissioner with close ties to the oil and gas industry who critics say will hurt the state’ clean energy transition.Judge James Dimitri retired from the SCC at the end of February, leaving the state legislature to appoint a replacement to finish out the remaining two years of his term. The House of Delegates favors Richmond lawyer David Clarke, who has worked as a lobbyist for a long list of clients that includes the Virginia Oil and Gas Association, individual gas companies, and insurance and banking interests, all of which are regulated by the SCC. According to the Virginia Public Access Project, Clarke’s association with the oil and gas association dates back more than a decade.The Virginia League of Conservation Voters and other environmental groups have opposed Clarke’s appointment, citing his work for industries that receive SCC oversight as a red flag. In a news release, Michael Town, the league’s executive director, likened Clarke’s potential appointment to “a fox guarding the henhouse.” “We certainly have concerns about someone that might be taking on such an important position and puppeting the views of the monopoly utilities and the other companies the SCC regulates,”

        ‘Electrification of Everything’ Would Spike US Electricity Use, but Lower Final Energy Consumption -- Widespread deployment of EVs, heat pumps, and other electric technologies could increase U.S. electricity consumption by nearly 40 percent by mid-century, according to a new government report. The report, the second in the National Renewable Energy Laboratory’s Electrification Futures Study series, analyzes the demand-side impacts of a transition to electricity in transportation, residential and commercial buildings, and industry through 2050.The report authors developed three scenarios to assess changes in electricity demand growth under varying levels of economy-wide electrification. The scenarios are based on cost and performance projections in the first EFS report, as well as the authors’ review of current trends, the academic literature and use of an updated version of the Energy PATHWAYS bottom-up modeling tool. The “reference” scenario anticipates only incremental change in electrification by mid-century. The “medium” scenario assumes “low-hanging fruit” opportunities are harvested but stop short of transformational change in electrification. The “high” scenario envisages a future in which a mix of technology advancements, policy support and consumer enthusiasm “enables transformational change in electrification.” Market penetration of plug-in electric light-duty vehicles reaches nearly 84 percent in the high scenario — compared to just 11 percent in the reference case. More than 240 million light-duty electric cars and trucks, 7 million medium- and heavy-duty electric trucks, and 80,000 electric buses are estimated to be on the road by 2050 under the same scenario. In all, under the high scenario, electric vehicles account for up to 76 percent of vehicle miles traveled by mid-century.

        Hot weather spells trouble for nuclear power plants - Nuclear power plants in Europe have been forced to cut back electricity production because of warmer-than-usual seawater. Plants in Finland, Sweden and Germany have been affected by a heat wave that has broken records in Scandinavia and the British Isles and exacerbated deadly wildfires along the Mediterranean. Air temperatures have stubbornly lingered above 90 degrees in many parts of Sweden, Finland and Germany, and water temperatures are abnormally high — 75 degrees or higher in the usually temperate Baltic Sea.That's bad news for nuclear power plants, which rely on seawater to cool reactors. Finland's Loviisa power plant, located about 65 miles outside Helsinki, first slightly reduced its output on Wednesday.  The seawater has not cooled since then, and the plant continued to reduce its output on both Thursday and Friday, confirmed the plant's chief of operations, Timo Eurasto.    Eurasto says customers have not been affected by the relatively small reduction in output, because other power plants are satisfying electricity demand. The power plant produced about 10 percent of Finland's electricity last year. Nuclear power stations in Sweden and Germany have also reduced production because of cooling problems, Reuters reported. A spokesperson for Sweden's nuclear energy regulator told the wire service on Tuesday that the Forsmark nuclear power plant in Sweden had cut energy production "by a few percentage points."Cooling issues at nuclear power plants may get worse in the future. Climate change is causing global ocean temperatures to rise and making heat waves more frequent and severe in many parts of the world. A 2011 report by the Union of Concerned Scientists warned that warmer seas could affect the efficiency of nuclear power plants, noting: "...during times of extreme heat, nuclear power plants operate less efficiently and are dually under the stress of increased electricity demand from air conditioning use. When cooling systems cannot operate, power plants are forced to shut down or reduce output."

        Top Trump Donor Agreed to Pay Michael Cohen $10 Million for Nuclear Project Push - A major donor to President Trump agreed to pay $10 million to the president’s then-personal attorney if he successfully helped obtain funding for a nuclear-power project, including a $5 billion loan from the U.S. government, according to people familiar with the matter. The donor, Franklin L. Haney, gave the contract to Trump attorney Michael Cohen in early April to assist his efforts to complete a pair of unfinished nuclear reactors in Alabama, known as the Bellefonte Nuclear Power Plant, these people said.Had he been paid the success fee, Mr. Cohen’s deal with Mr. Haney could have been among the most lucrative of the known consulting agreements he secured after Mr. Trump’s election by emphasizing his personal relationship with the president, according to people familiar with his pitches.The president has since severed ties with Mr. Cohen, who is under federal investigation in New York in connection with his work for Mr. Trump and private business dealings. Authorities are investigating whether Mr. Cohen engaged in unregistered lobbying in connection with his consulting work for corporate clients after Mr. Trump went to the White House, according to people familiar with the probe.

        Report: Meteor Made 2.1 Kiloton Explosion Over Air Force Space Command Base Thule, Greenland -- A curious and credible Tweet from the Director of the Nuclear Information Project for the Federation of American Scientists, Hans Kristensen, on August 1, 2018 at 5:14 PM Washington D.C. time claimed that a, “Meteor explodes with 2.1 kilotons force 43 km above missile early warning radar at Thule Air Base.” The Tweet apparently originated from Twitter user “Rocket Ron”, a “Space Explorer at the Jet Propulsion Laboratory”. The original Tweet read, “A fireball was detected over Greenland on July 25, 2018 by US Government sensors at an altitude of 43.3 km. The energy from the explosion is estimated to be 2.1 kilotons.” Rocket Ron’s Tweet hit in the afternoon on Jul. 31. Meteor explodes with 2.1 kilotons force 43 km above missile early warning radar at Thule Air Base.   We’re still here, so they correctly concluded it was not a Russian first strike. There are nearly 2,000 nukes on alert, ready to launch. — Hans Kristensen (@nukestrat) August 1, 2018  The incident is fascinating for a long list of reasons, not the least of which is how the Air Force integrates the use of social media reporting (and non-reporting) into their official flow of information. As of this writing, no reporting about any such event appears on the public news website of the 12th Space Warning Squadron based at Thule, the 21st Space Wing, or the Wing’s 821st Air Base Group that operates and maintains Thule Air Base in support of missile warning, space surveillance and satellite command and control operations missions.

        FirstEnergy won’t say what it’s done with Ohio grid modernization money -- Ohio ratepayers have paid FirstEnergy’s utilities roughly a quarter of a billion dollars since January 2017 under a distribution modernization rider.Now, critics say FirstEnergy is stalling on saying just what it’s doing with that money, which regulators approved without any requirements that it pay for specific projects.The mandate for consumers to pay the rider is currently on appeal before the Supreme Court of Ohio. Meanwhile, FirstEnergy’s utilities have been collecting the $168 million per year, and regulators could renew the charge for another two years after 2019.“To date, FirstEnergy has stymied the efforts of the state-designated advocate of its consumers to discover information about its subsidy charges,” Ohio Consumers’ Counsel Bruce Weston and assistant counsel Zachary Woltz said in a July 13 brief.  They and other challengers see the charge as an unlawful “backdoor bailout” for FirstEnergy’s generation subsidiaries. And critics say any hypothetical rationale for the rider as a tool to boost the company’s credit position in advance of future projects became even weaker after FirstEnergy’s generation subsidiaries filed for bankruptcy five months ago.The charge was never justified to begin with, said attorney Madeline Fleisher of the Environmental Law & Policy Center, and “once they filed for bankruptcy, the show is over.” The regulatory case allowing the charge started as a bid for ratepayers to guarantee sales of all output from specific coal and nuclear plants. It then shifted to a “virtual” deal that would have avoided naming the plants but charged the same amount of money. Then the plan morphed into the current “distribution modernization rider.” Despite the name, the Public Utilities Commission of Ohio required no specific grid projects in return for the money.

        Getting on the Ballot May be Easiest Part for Columbus Community Bill of Rights – After two previous attempts, the anti-fracking Columbus Community Bill of Rights (CBR) is one step closer to appearing on the November ballot. Columbus City Council is set to approve the ordinance for the ballot at their meeting on Monday, July 30, before it’s off to be verified and assigned an issue number by the Franklin County Board of Elections.What it’ll mean practically, however, is still undecided. The Columbus CBR, modeled after a similar initiative in Pittsburgh organized by the Community Environmental Legal Defense Fund (CELDF), is part of a state- and nationwide effort to transfer jurisdiction over oil and gas activities from states to individual municipalities. But, the Ohio General Assembly already voted in 2004 to assign the Ohio Department of Natural Resources (ODNR) with jurisdiction over the state’s oil and gas practices — eight years before the first city in Ohio, Broadview Heights, passed a bill of rights charter amendment.That decision by the General Assembly has caused trouble for Ohio towns attempting to actually enforce their ordinances, resulting in a series of lawsuits, and culminating in an Ohio Supreme Court decision in 2015 that effectively reasserted the state’s preemptive control over oil and gas activities.Tish O’Dell is one of the pioneers of Ohio’s CBR movement. She and a group of fellow Broadview Heights residents formed Mothers Against Drilling in Our Neighborhoods (MADION) to build community support around the initiative.After Broadview Heights’ CBR was approved by voters, other cities followed suit, and the next several years saw a string of lawsuits — against drilling companies for violating charter amendments and against the municipalities for interfering with drilling efforts approved by ODNR.In 2013, Munroe Falls sued Ravenna-based company Beck Energy, a case that garnered the interest of residents in Broadview Heights and North Royalton, who filed friend-of-the-court briefs in support of Munroe Falls. After plaintiff and defendant duked it out in the lower courts, the case reached the Ohio Supreme Court.In 2015, citing Ohio Revised Code 1509, the Ohio Supreme Court decided that ‘sole and exclusive authority’ to regulate oil and gas wells and production operations in Ohio belongs to the state. What does this mean, then, for Columbus’ own version? Local organizers with Columbus’ CBR say, regardless of court precedent, the city needs its own ordinance to challenge what they see as an unjust law prohibiting citizens from protecting their water, air, and soil.

        Nexus Pipeline 80% complete, service to start in late Q3 -- The Nexus natural gas pipeline across northern Ohio is on schedule to begin service in the late third quarter of 2018, Kallanish Energy reports. That assessment came last week from officials of DTE Energy, one of the companies behind the pipeline that is 80% complete, company officials said, in an earnings call with analysts and the media. All mainline welding and 100% of mainline walling have been completed, said president and chief operating officer Jerry Norcia. He said 16 of 18 planned horizontal directional drilling holes under rivers and highways have been completed for the pipeline. “We are pleased with how the Nexus project is coming together,” he said. He added the project “is a long-term project that will help grow this business segment for many years to come.” The $2.6 billion natural gas pipeline will move Utica and Marcellus natural gas from the Appalachian Basin to the Midwest, the Gulf Coast and Ontario. The 256-mile pipeline across northern Ohio will transport natural gas from Ohio, West Virginia and western Pennsylvania. It is being developed by Michigan-based DTE Energy and Enbridge, and will transport up to 1.5 billion cubic feet per day.

        Hess selling Utica joint-venture interests for $400 million - In its second quarter report, Hess Corp. said it will sell its joint-venture interests in the Utica shale play of eastern Ohio for around $400 million by the end of this year’s third quarter. CEO John Hess said sale of the Utica assets will help the company further focus its portfolio. He noted that the company delivered strong performance during the quarter, exceeding its production guidance by averaging 247,000 barrels of oil equivalent per day (boepd). Of that amount, 114,000 barrels were produced in the Bakken where Hess has five rigs operating and plans to add a sixth.Overall, Hess reported a net loss of $130 million for the quarter (48 cents per common share) compared to a net loss of $449million for the same quarter a year ago. On an adjusted basis, the company reported an after-tax net loss of $56 million (23 cents per common share) in the second quarter of 2018. The improved after-tax adjusted results reflect higher realized crude oil selling prices, lower operating costs and depreciation, depletion and amortization expense, partially offset by lower production volumes, primarily due to asset sales.Net production from the Bakken increased six percent to 114,000 boepd, up from 108,000 boepd a year ago. Hess attributed the increase to ongoing drilling activity and improved well performance. Production in the second quarter of 2018 was impacted by weather-related downtime in June. The company operated an average of four rigs in the second quarter, drilling 28 wells and bringing 27 new wells online. Full year production guidance for the Bakken remains 115,000 boepd to 120,000 boepd. Exploration and production net income in the second quarter was $31 million, compared to a net loss of $354 million a year ago. On an adjusted basis, second quarter 2018 net income was $21 million. The company’s average realized crude oil selling price—including the effect of hedging—was $62.65 per barrel, up from $45.95 per barrel at the same time a year ago.

        Chesapeake Seeks New Wells in Columbiana County – Chesapeake Energy Corp., fresh off its announcement last week that it would sell all of its assets in eastern Ohio’s Utica shale for $2 billion, has applied for permits that would add two new horizontal wells in Columbiana County, according to Ohio Department of Natural Resources records.Chesapeake subsidiary Chesapeake Exploration LLC filed applications for two permits on July 31 to drill horizontal wells in Washington Township, according to ODNR.The wells will target the Point Pleasant formation, a segment of what is collectively termed the Utica. The new well pad is slated for the Sevek farm.Last week, the Oklahoma City energy company announced it had reached a deal with Houston-based Encino Acquisition Partners to sell its leasehold position in the Utica, estimated at about 900,000 acres. The deal also includes 920 operating and non-operating wells that collectively produced an average of 107,000 barrels of oil equivalent per day in 2017.More than 50 of those wells are located in Columbiana County, according to ODNR records.  The transaction is expected to close in the fourth quarter.  Also last week, Houston-based Hilcorp Energy Co. filed applications to drill three new horizontal wells in Fairfield Township in Columbiana County. All applications must be approved by ODNR before a permit is awarded.

         Huge gas production growth fuels CNX - Independent producer CNX Resources reported Thursday huge year-over-year second-quarter growth in natural gas production, led by a 277.6% leap in Utica Shale gas sales. For the three months ended June 30, the Pittsburgh-based company reported Marcellus Shale natural gas sales volumes of 51.1 billion cubic feet up 13.5% from the year-ago total of 51.1 Bcf. Utica Shale gas sales volumes jumped 277.6%, to 40.4 Bcf, from just 10.7 Bcf one year ago. Natural gas liquids volumes rose 3.7%, to 8.4 Bcfe from 8.1 Bcfe, Kallanish Energy reports. The average natural gas sales price fell from $2.81 per thousand cubic feet-equivalent, to $2.55/Mcfe, but the average oil price climbed to $9.72/Mcfe, from $8.03/Mcfe. Total production costs for the quarter fell to $2/Mcfe, from $2.20/Mcfe one year ago. The company reported net income of $61 million for 2018’s second quarter, compared to net income of $170 million in the second quarter of 2017. EBITDAX (earnings before interest, taxes, depreciation, amortization and exploration expenses) from continuing operations was $192 million for the 2018 second quarter, compared to $326 million in the year-earlier quarter. In the second quarter of 2018, CNX continued to operate three horizontal rigs and deployed a fourth in late June. The horizontal rigs drilled 16 wells including three dry Utica Shale wells in Monroe County, Ohio; four Marcellus Shale wells in Greene County, Pennsylvania; six Marcellus Shale wells in Washington County, Pennsylvania; and three Marcellus Shale wells in Tyler County, West Virginia. Drilling efficiencies continued to improve during the quarter, and the company successfully drilled a Marcellus Shale well in Greene County, Pennsylvania, in 10.8 days from spud to rig release. 

        Pennsylvania, environmentalists settle pipeline dispute - Pennsylvania environmental regulators and groups that oppose the construction of a $2.5 billion pipeline across southern Pennsylvania have settled their dispute over the permits that were issued for the project. The Clean Air Council, Delaware Riverkeeper Network and Mountain Watershed Association had challenged 20 permits issued by the Department of Environmental Protection for Sunoco Pipeline's Mariner East 2 pipeline. The environmental groups called them incomplete and legally flawed. Sunoco has since nearly completed work on the 350-mile-long (563 kilometer), 20-inch (50-centimeter) diameter Mariner East 2 pipeline to carry propane, butane and ethane from western Pennsylvania to a terminal near Philadelphia. The settlement does not impact any of the permits, but requires DEP to put into place additional safeguards for future pipeline projects. 

        Mariner East 2 permit appeals dropped but opponents still 'strongly resist' the project - Three environmental groups have ended their appeals of state permits issued to Sunoco Pipeline LP for construction of the Mariner East 2 natural gas pipeline.  Spanning Pennsylvania, the Mariner East 2 and the parallel Mariner East 1 pipeline are meant to carry pressurized propane, ethane and butane from the Marcellus shale region to a Sunoco refinery near Philadelphia. In Westmoreland County, the pipelines traverse Sewickley, Hempfield, Penn, Salem, Loyalhanna and Derry townships. No changes will be made to the 20 permits that had been challenged by the Melcroft-based Mountain Watershed Association, the Clean Air Council and the Delaware Riverkeeper Network, according to the state Department of Environmental Protection. In a settlement in the case approved Thursday, DEP agreed to make available online all non-privileged, non-confidential permit application materials and supporting documents for pipeline projects such as the Mariner East 2. That includes technical deficiency letters issued by the department and the resulting responses from applicants. DEP also plans to convene a group of stakeholders — including representatives of DEP, of the appealing organizations and of pipeline proponents — who will offer input as DEP develops “more formalized guidance on pipeline construction.” DEP has agreed to initiate the stakeholder group within 90 days and share documents developed through the group within a year.   The three environmental groups have been invited to each have a representative take part as DEP evaluates changes to the application process for erosion and sediment control permits for earth disturbance related to oil and gas facilities.  DEP fined Sunoco Pipeline $355,000 for violating the Clean Streams Law between May 2017 and February while it was building Mariner East 2.  Construction of the Mariner East 2 pipeline resulted in “an unpermitted discharge of drilling fluids to wetlands, wild trout streams and high-quality waters at a number of locations in Allegheny, Blair, Cambria, Cumberland, Dauphin, Huntingdon, Indiana, Lancaster and Washington counties” DEP said.

        Ellen Gerhart, fighting pipeline on family’s land, jailed for allegedly violating court order -  Sunoco says she interfered with workers. The 63-year-old's daughter said that isn't true. Ellen Gerhart, a retired teacher who has led a fight to keep Sunoco from building a pipeline on part of her family’s Huntingdon County land, was jailed Friday after the company accused her of violating a court order that she not interfere with its workers. Gerhart, 63, was arrested on a bench warrant and is at Centre County Correctional Facility without bond on a charge of indirect criminal contempt, according to online court records and the Centre County prison’s records office. Gerhart’s daughter, Elise, said her mother has an Aug. 3 hearing date in Huntingdon County related to a previous allegation that she violated the court order in April. In a Huntingdon County Common Pleas Court filing July 26, Sunoco Pipeline L.P. said that since May, Ellen Gerhart continued to interfere with the Mariner East 2 pipeline site and workers. Among other things, the company claimed she spread spoiled food near the site to bother the workers and attract wild animals; that she started fires that threatened construction fences and equipment, and that workers had to put out; and that she went onto the easement and stood in front of a construction vehicle, forcing it to stop until she left. Sunoco asked that Gerhart’s bail be revoked and that she be found in contempt of court.

        Environmental Activist Arrested and Placed in Solitary Confinement for Monitoring Pipeline Construction on Her Own Property -- On Tuesday, July 26, Sunoco Pipeline L.P. filed paperwork with a Pennsylvania court claiming that retired special education teacher Ellen Gerhart, 63, had violated an injunction. Three days later, Gerhart was arrested and jailed. She’s currently held in the Centre County Correctional Facility awaiting a hearing on $25,000 bail. She’s been kept in solitary confinement for much or all of that time, according to her supporters, who add that she is unable to afford bail.  Sunoco Pipeline obtained a right of way through the Gerharts’ land using the controversial legal doctrine of eminent domain, which allows private companies to seize land people refuse to sell that’s in the planned path of a pipeline project. Sunoco now claims Ellen Gerhart interfered with construction and alleges, among other things, that Gerhart tried to lure mountain lions and bears onto her property.“Mrs. Gerhart’s efforts to bait the property was [sic] successful and, on June, 24, 2018, a mountain lion was spotted on the edge of the easement,” the complaint filed by Sunoco Pipeline, L.P., which merged with Dakota Access builder Energy Transfer Partners in 2017, alleges. “Four days later, two bears were on the easement and fresh mountain lion tracks discovered.”These allegations have drawn ridicule from Gerhart’s supporters, who say the company’s claims that she is to blame for wildlife near construction are absurd.   A MoveOn petition calling the charges “outlandish and unprovable” and urging her release has attracted over 2,000 signatures.  The Gerharts have their own view of what led to Ellen’s arrest. “Energy Transfer Partners is yet again fabricating charges against my mom in attempt to silence her,” Ellen’s daughter Elise said in a statement. “Look at who has actually inflicted damage here: ETP has poisoned dozens of families’ wells across the state, spilled over 100 times, and harassed and intimidated anyone who opposes them.”

        Factbox: Pipeline work in Pennsylvania to pressure natural gas prices, production -- Upcoming maintenance on Millennium Pipeline could put downward pressure on natural gas production and prices in northeast Pennsylvania starting Wednesday with impacts intensifying through the weekend.   On Friday, Millennium said gas transmission through its Wagoner West segment would be restricted to 759 MMcf/d from August 1 to August 2, followed by a further restriction to just 600 MMcf/d from August 3 to August 6, according to a revised critical notice posted to the company's electronic bulletin board. In July, flows on Millennium through Wagoner West have averaged 941 MMcf/d, rising to a high of 954 MMcf/d on four days over the past month, according to S&P Global Platts Analytics data.  Maintenance work at Wagoner West will reduce takeaway optionality for gas producers in northeast Pennsylvania, likely rerouting at least some production from the Bluestone Gathering and Laser Gathering systems to Tennessee Gas Pipeline. Upstream production on Millennium from the Bluestone and Laser systems has averaged nearly 1.1 Bcf/d in July. Approaching maintenance on Millennium has the potential to suppress upstream production by as much as 340 MMcf/d, based on scheduled volume restrictions and recent flow data. Total gas production from the Northeast Pennsylvania dry gas window has averaged nearly 9.7 Bcf/d in July, according to sample data from Platts Analytics.On Monday, upstream gas prices at Millennium East receipts and Tennessee Zone 4 300-leg, both of which could be impacted by the maintenance, were trading higher along with other points across Appalachia.Preliminary data from the Intercontinental Exchanged showed Millennium East up nearly 11 cents to $2.39/MMBtu; Tennessee Zone 4 300 was up 7 cents to $2.32/MMBtu.In July, basis prices at Millennium East and Tennessee Zone 4 300 have averaged roughly 60 cents/MMBtu and 54 cents/MMBtu, respectively, below the benchmark Henry Hub, according to S&P Global Platts data.

        After 4 years of controversy, Atlantic Sunrise natural gas pipeline nearly finished in Lancaster County   --Four years after plans were first announced, construction of the controversial Atlantic Sunrise natural gas pipeline is nearly finished.In late August, Oklahoma-based Williams Partners said gas from Marcellus Shale wells in northeastern Pennsylvania should start flowing through the nearly 300-mile, $3 billion pipeline that traverses 10 Pennsylvania counties.In the 37-mile portion through western and southern sections of Lancaster County, the pipeline has been welded together, buried and backfilled in all but a few sections.“It is wrapping up,” said Christopher Stockton, spokesman for Williams Partners.“We are progressing with final cleanup and right-of-way restoration work. The contractor has demobilized much of the construction equipment in Lancaster County.” The pipeline work generated a famous pushback by Roman Catholic nuns who built an outdoor chapel in the path of the pipeline, and it led to 52 arrests of protesters, who engaged in sporadic actions that sometimes disrupted construction.Marcellus Shale gas production is expected to increase as a result of the new pipeline, and Williams — the country’s largest pipeline owner — said the project will bring affordable energy to customers up and down the Eastern Seaboard.But those opposed to the pipeline have a different perspective. They cite forced use of properties, reduced home values, the dangers of future explosions or leaks, and fragmentation of the county’s remaining forests.  Some of the gas — the percentage is hotly debated — will be exported overseas to markets in Japan and India via the newly opened Cove Point liquefied natural gas export facility near Baltimore.

        Drilling rigs used in fracking found along nature trail irk some hikers -- This past June, approximately a thousand hikers joined in the 22nd running of the Rachel Carson Trail Challenge — a 35-mile all-day event that starts at 5:50 a.m. The deadline to finish was set at 8:54 p.m., or 15 hours and four minutes later. It should be noted that this is not a race. The goal is just to finish — while taking in all of the natural splendor that the trail offers as participants wind through terrain just north of Pittsburgh and its suburbs.Carson was a famous conservationist from the area who is credited with inspiring the global environmental movement with her 1962 book “Silent Spring.” Although the challenge was named in her honor, a few of the challenge participants became disgruntled when they discovered that signs of the growing fracking industry had shown up along the path. In one spot in Indiana Township, a large number of trees had been cleared to make way for a drilling rig for a Marcellus shale well pad that is being developed by Range Resources Corporation.“All we would have to do is put some kind of markers out that would keep people walking right across that,” says Bob Mulshine, the president of the Rachel Carson Trails Conservancy and director of the challenge. “And for us as a hiking group, this is not an inconvenience.”    “It's just not something you really want to see,” says Ganster of the drilling rig right off the path. “It's like a strip mine or anything else like that. You just really don't want to see it out here when you're coming to get away from all the industrialism and everything.”

        Pennsylvanians who live near fracking are more likely to be depressed --People who live near unconventional natural gas operations such as fracking are more likely to experience depression, according to a new study.For the study, which is the first of its kind and published today in Scientific Reports,researchers from the University of California at Berkeley and Johns Hopkins University looked at rates of depression in nearly 5,000 adults living in southwestern Pennsylvania's Marcellus shale region in 2015.They found that people living near fracking-related operations are more likely to be depressed than the general population, and that stress and depression went up among people living closest to more and bigger natural gas wells. "Previously we've looked at the links between unconventional natural gas development and things like asthma exacerbations, migraine headaches and fatigue," study co-author Joan Casey, a postdoctoral scholar at UC Berkeley's School of Public Health, told EHN. "The next step was thinking about mental health, because we had a lot of anecdotal reports of sleep disturbances and psychosocial stress related to unconventional natural gas development." By the end of 2015, 9,669 wells had been drilled in Pennsylvania's Marcellus shale, and by 2016, the region led the nation in shale gas production. While there have been other small studies on the links between fracking and depression, this is the first to investigate a link between the two using a validated survey among a larger population.

        U.S. court vacates two permits for EQT Mountain Valley gas pipeline (Reuters) - A U.S. appeals court on Friday vacated decisions by two federal agencies that allowed EQT Corp to build its $3.5 billion to $3.7 billion Mountain Valley natural gas pipeline from West Virginia to Virginia across federal land. The case is the latest victory in the U.S. Court of Appeals for the Fourth Circuit by the Sierra Club and other opponents of the pipeline. Analysts at Height Capital Markets in Washington said the decision could delay the project’s in-service date until the fourth quarter of 2019. The Sierra Club and others challenged decisions by the U.S. Bureau of Land Management and the U.S. Forest Service granting the pipeline rights of way across federal land. The court concluded certain aspects of the federal agencies’ decisions failed to comply with the National Environmental Policy Act, the Mineral Leasing Act and the National Forest Management Act.  “Mountain Valley Pipeline is working with the agencies to evaluate the effect of the order on construction activities in the National Forest, which amounts to about 1 percent of the overall project route,” said Natalie Cox, a spokeswoman for MVP.  The court remanded the case back to the BLM and Forest Service for further proceedings.

        Federal ruling affects Mountain Valley Pipeline’s route through national forest  -- Federal appeals judges ruled two key federal approvals don’t provide adequate protection on the Mountain Valley Pipeline’s route through the Jefferson National Forest, which includes Monroe County.The Sierra Club and other environmental groups had challenged approvals by the U.S. Forest Service and the Bureau of Land Management over a 3.6-mile segment of the pipeline’s route through the national forest.The Mountain Valley Pipeline gained approval from the Federal Energy Regulatory Commission in mid-October.The $3.5 billion Mountain Valley Pipeline would extend 42-inch diameter natural gas pipeline over 303 miles  to transport West Virginia natural gas into southern Virginia.The path takes the pipeline not only through the national forest but also under the Appalachian Trail at Peters Mountain.The environmental groups questioned whether the plans for pipeline construction adequately control erosion and sediment.It wasn’t immediately clear if the ruling would affect other aspects of the pipeline’s construction and timetable.“I am very relieved that MVP cannot destroy the Appalachian Trail and our beloved Peters Mountain,” stated Maury Johnson, a Monroe County resident who is a part of Save Monroe, one of the parties to the federal lawsuit. “I feel that when other cases are heard by the Courts we will win these as well and hopefully MVP will just be a bad nightmare.”

        Federal judges in Va. revoke permit for pipeline, saying impact on national forest not fully reviewed    — A panel of federal judges on Friday rescinded permits for a massive natural gas pipeline to cross the Jefferson National Forest, saying two U.S. agencies had not fully vetted the project and had simply accepted assurances from the builders.   Environmentalists called the decision a major blow against the 303-mile Mountain Valley Pipeline, which is being built from West Virginia though the rugged terrain of far Southwest Virginia. It will pass through 3.6 miles of the Jefferson National Forest along the West Virginia line in Giles County, tunneling under the Appalachian Trail. Pittsburgh-based EQT Midstream Partners, which is leading the coalition of companies building the pipeline, said it was “evaluating the court’s decision.”    The ruling did not appear to affect pipeline work outside the boundaries of the Jefferson National Forest. A three-judge panel of the U.S. Court of Appeals for the Fourth Circuit ruled unanimously that the U.S. Forest Service and the federal Bureau of Land Management had not properly reviewed the project’s impact on the forest. The “proposed project would be the largest pipeline of its kind to cross the Jefferson National Forest,” the judges wrote. “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.”  The judges ordered the agencies to reconsider the permits using proper procedure.  The Mountain Valley Pipeline is the smaller of two natural gas projects underway in Virginia. The other, the Atlantic Coast Pipeline, is twice as long and passes through the center of the state, but not through the Jefferson National Forest. Work has been underway on both pipelines since early this year, with trees being cleared along the routes. Protesters have tried to delay the projects at every step, sometimes lashing themselves to trees or tall poles in the path of workers — including in the Jefferson National Forest.

        Pipeline projects hit legal snags in federal court, work suspended in parts of Virginia, W.Va. -- Two multibillion-dollar natural gas pipelines hit legal snags on Friday, as the Atlantic Coast Pipeline voluntarily suspended planned crossings of rivers in West Virginia and a federal appeals court rescinded federal permits that allowed construction of the Mountain Valley Pipeline across national forest land in Virginia. The Atlantic Coast Pipeline, a 600-mile project crossing parts of three states, informed the 4th U.S. Circuit Court of Appeals on Friday that it had requested and received an administrative stay on construction of the project across all West Virginia rivers. The action allows further review by the U.S. Corps of Engineers of the project’s plans to meet state requirements for three contested river crossings. The Corps’ office in Huntington, W.Va., granted the temporary stay on Friday, just three days after Dominion Energy and its partners received federal permission to begin construction of the portion of the $5.5 billion pipeline that would cross North Carolina. The 4th Circuit, which had stayed construction of the 303-mile Mountain Valley Pipeline across West Virginia rivers last month, dealt the project another blow on Friday by vacating federal permits allowing the pipeline to cross 3.6 miles of the Jefferson National Forest in Virginia. The unanimous ruling by a three-judge panel of the Richmond-based appeals court cancels permits issued by the Bureau of Land Management and the U.S. Forest Service allowing the Mountain Valley Pipeline to cut through the Jefferson National Forest. The judges’ ruling accuses the agencies of ignoring environmental regulations in approving the project. 

        Retired Schoolteacher Blockades Pipeline On Family Land — On Tuesday, July 31, a West Virginia grandmother halted construction of the Mountain Valley Pipeline (MVP) by blockading herself in a 1971 Ford Pinto elevated off the ground at a pipeline work site. The blockade is being carried out by 64-year old local resident, author, retired schoolteacher, and grandmother Becky Crabtree on the section of pipeline easement that is ravaging the land her family lives on in Monroe County. Banners at the site read “Defend What You Love” and “Resist All Pipelines;” messages on the Pinto include, “Power to the People” and “The Fire is Spreading.” Local residents and protesters have begun to gather on site scene in support of the blockade.  “I have talked to elected officials, signed petitions, written letters, submitted reports, and gone to court. I have exhausted the ‘usual’ methods of fighting injustice and have gotten no relief,” stated Becky Crabtree. “Officials have failed us in this fight; we need to fight for ourselves and each other.” The Pinto used in today’s action has sentimental significance for Becky, as it has been in her family since 1971 and it is the car she took on her honeymoon.  Virginia resident Doug Chancey stated his support for Becky’s action. “There is clear scientific proof that we do not need to rely on fossil fuels for energy. The need to make other energy sources available is urgent, and since the fight in the courts is slow and the pipeline work continues, direct action is necessary to halt construction until the weight of public opinion, fallen stocks, and court decisions sink this project.” The Mountain Valley Pipeline is a 42-inch diameter fracked gas pipeline that has been met with determined opposition since it was proposed over four years ago. Impacted residents have fought the pipeline with a variety of tactics, including a nonviolent direct action campaign that escalated when construction started earlier this year. In the past 6 months, pipeline fighters have delayed construction by erecting aerial blockades and by locking themselves to construction equipment. The property that the Crabtree family inhabits and cares for is located at the base of Peters Mountain, just a couple miles from the site of a tree sit blockade near the Appalachian Trail that prevented tree clearing for 95 days this spring.

        In Appalachia, Women Put Their Bodies on the Line for the Land - Ollie Combs, a 61-year-old widow in Knott County, Kentucky, sat in front of bulldozers with her two sons at her side. It was 1965. Determined to not let the coal industry strip-mine her family land, she remained unmoved; officials were forced to physically carry her away—an image that drew national attention. So did, more recently, the story of Theresa “Red” Terry, a 61-year-old Roanoke County, Virginia, resident. In 2018, Terry lived in a “tree sit” alongside her grown daughter for more than a month, protesting the Mountain Valley Pipeline construction through her private property. Today, there’s Jill Antares Hunkler, 43, of Belmont County, Ohio, and 69-year-old Roxanne Groff of Athens, Ohio: two of the women working loudly and publicly to protect land in Appalachia from fracking. Fracking operations, which release and capture trapped natural gas deposits in sedimentary rock, concentrate in geologic reserves covering the area west of the Appalachian Mountains. Environmental disasters have been linked to fracking, including water source pollution, air quality issues, soil contamination, and earthquakes. At a time when Environmental Protection Agency (EPA) Administrator Scott Pruitt resigned due to “ethics controversies,” Appalachian women like Hunkler and Groff continue to lead their communities in efforts to protect local environments—partly due to the lack of protection from government agencies, and partly because such work by women is a strong component of Appalachia’s history.

        Atlantic Coast Pipeline developers ask for and receive river crossing permit suspension — In an attempt to allay concerns raised by an environmental group, developers of the Atlantic Coast Pipeline have asked for, and been granted, a temporary suspension of a key river crossing permit.The Army Corps of Engineers, Huntington District, has granted the suspension, giving developers more time to provide plans and additional information with regard to some of the river crossings covered under the permit.The pipeline, expected to span about 600 miles from North Central West Virginia to North Carolina, has been the target of criticism from environmentalists since its inception. But developers have worked to address concerns. The most recent issue, raised in a lawsuit by the Sierra Club filed in the Fourth Federal Court Circuit based in Richmond, Virginia, is that an Army Corps of Engineers Permit 12, which allows the pipeline to cross rivers and streams, is flawed.Attorneys for the Sierra Club argue that the Atlantic Coast Pipeline can’t meet the requirements of Permit 12, which call for river crossings to be accomplished in a 72-hour period. They cite specifically in the motion for a stay the Greenbrier River in Pocahontas County, but there is also concern with two rivers in North Central West Virginia: The West Fork River, in an area located in Lewis County, and the Buckhannon River in Upshur County.The motion says the Greenbrier crossing would be 177 feet and could not be accomplished in 72 hours.

        Court upholds Mountain Valley Pipeline water quality review   (AP) — A federal appeals court has upheld a Virginia agency's finding that says the Mountain Valley Pipeline is not expected to harm water quality.The Roanoke Times reports the Wednesday ruling by a three-judge panel with the 4th U.S. Circuit Court of Appeals applies to about 500 waterbody crossings the natural gas pipeline will make through southwest Virginia.The decision rejects arguments by conservation groups that say the State Water Control Board's findings are flawed. The ruling follows the state Department of Environmental Quality issuing the pipeline notices of violations last month after finding inadequate measures to control muddy runoff at several construction sites. The same panel ruled last week to revoke U.S. Forest Service and Bureau of Land Management permits allowing the pipeline to cut through the Jefferson National Forest.

        FERC clears Atlantic Coast Pipeline for construction in North Carolina - Dominion and other supporters of the $6 billion Atlantic Coast Pipeline scored a big victory this week, but opponents are hoping the appeals court will intervene. SELC argues that allowing the company to move ahead with construction on one portion of the line — when not all approvals are in place — is improper. “It’s an all or nothing sort of deal," SELC attorney Patrick Hunter told the Virginia Mercury.FERC, however, has authorized construction to begin, allowing Dominion "full use of and improvements to access roads." The commission also said it reviewed FWS comments before making its decision, "and have confirmed that no additional consultation under the Endangered Species Act is required for the areas subject to this notice to proceed."Earlier this month, the commission authorized the construction of two other pipeline projects: the Eastern Panhandle Expansion Project and the Texas and Louisiana Market Expansion Project, as well as an upgrade to the North Seattle pipeline in Washington.Duke Energy and Southern Co. are also involved in the project's development. The pipeline will transport gas through parts of West Virginia, Virginia and North Carolina. SELC has argued on behalf of Defenders of Wildlife, Virginia Wilderness Committee and Sierra Club that the project should be halted entirely. Opponents of new gas plants say many of these pipelines and projects are not only environmentally harmful, but also unnecessary in the first place, as they can increasingly be replaced with renewables and storage.

        Untangling the pipeline pileup in federal courts -- Federal judges are making their mark on natural gas pipelines.The past few months have featured a steady drumbeat of significant rulings, especially in the Mid-Atlantic region, from courts working their way through a stack of pipeline lawsuits that followed the industry's push to build out shale gas infrastructure.The issues are varied, encompassing landowner rights, Clean Water Act compliance, religious freedom, climate change and more. And the scorecard is mixed: Pipeline builders and the federal regulators who oversee their projects have triumphed over some challenges but faced remands and rebukes in others.The pipeline projects are still chugging along but have been delayed in some places where federal permits have been tied up in court. Here's a rundown of some key recent rulings.

        • Mountain Valley: Eminent domain.  The 4th U.S. Circuit Court of Appeals dismissed a case from a group of Virginia and West Virginia landowners near the 303-mile Mountain Valley pipeline who say the Federal Energy Regulatory Commission's eminent domain process for pipelines is unconstitutional. The landowners had argued that FERC routinely violates the Fifth Amendment by allowing pipeline companies to exercise eminent domain to cross holdout properties. But the 4th Circuit sided with a lower court that said it lacked jurisdiction to consider the arguments because the landowners didn't first go through FERC's standard administrative process for pipeline challenges (Energywire, July 26).
        • Mountain Valley: National forest crossing - Pipeline opponents were successful last week in a challenge to two federal approvals of the Mountain Valley pipeline. In another 4th Circuit case, a panel of judges ruled that the Forest Service and Bureau of Land Management didn't fully comply with the National Environmental Policy Act and other laws when they signed off on the project's crossing of the Jefferson National Forest in southern Virginia. (Energywire, July 30).
        • Mountain Valley: West Virginia water crossings - In yet another 4th Circuit case affecting the Mountain Valley pipeline, the court in June granted environmentalists' request to suspend the Army Corps of Engineers' approval of water crossings in West Virginia.Several groups had argued that the project's river crossings were too complex to be covered by the general nationwide permit the Army Corps applied. The court agreed to stay the permit (Energywire, June 22).
        • Atlantic Coast: Endangered species The Atlantic Coast pipeline, which runs 600 miles from West Virginia to North Carolina, ran into similar problems at the 4th Circuit when the court in May scrapped a key Endangered Species Act assessment.The court ruled that the Fish and Wildlife Service fell short of the ESA when it issued an incidental take statement — an estimate of affected species — that didn't set clear limits on how many ESA-protected animals could be affected (Energywire, May 16).
        • Atlantic Sunrise: Religious freedom - The Adorers of the Blood of Christ argued that the Federal Energy Regulatory Commission's approval of the pipeline's route across their land violated their religious rights. Their faith prioritizes the protection of the environment, and the group's lawyers argued that forcing the sisters to give up land for the pipeline amounted to a violation of the Religious Freedom Restoration Act. The 3rd Circuit tossed the case last week, ruling that the group should have first raised its concerns with FERC rather than going straight to court (Energywire, July 26).

         Cabot to boost production with Atlantic Coast Pipeline - Cabot Oil & Gas Corp. reported second quarter 2018 net income of $42.4 million or 9 cents a share, Kallanish Energy reports. That compares to $21.5 million or 5 cents a share in 2Q 2017. It posted quarterly revenues of $453.4 million. The company, a major operator in the Marcellus Shale in Pennsylvania, said it expects production to grow in the second half of 2018, tied to the beginning of service in August on the Atlantic Coast natural gas pipeline. Cabot said it intends to place 37 net Marcellus Shale wells in Pennsylvania into production in 3Q 2018 because of that pipeline. In 2Q 2018, the company averaged 1,891 million cubic feet per day of net Marcellus production. That is an increase of 4% from 1Q 2018. It is operating three rigs and two completion crews in the Marcellus Shale. In 2Q 2018, Cabot drilled 24 wells and completed 23 wells. Cabot reported daily equivalent production of 1,895 million cubic feet equivalent per day, although he company listed no liquids production in 2Q 2018. That is a 4% increase from 1Q 2018 when adjusting for the Eagle Ford Shale divestiture that closed last February, the company said.

        Summer natural gas price spreads between Henry Hub and Appalachian region have narrowed – EIA - Over the past decade, natural gas production in the Appalachian region has grown faster than capacity to move the gas into U.S. markets, pushing down local prices. More recently, pipeline infrastructure from Appalachia has increased capacity to deliver Appalachian natural gas to regional markets, increasing relative spot prices at Appalachian hubs, and narrowing their price spreads relative to the U.S. natural gas price benchmark Henry Hub in Louisiana. Natural gas production in the Appalachian region averaged 22 billion cubic feet per day (Bcf/d) in 2017, an increase of 25% from 2015 average levels. EIA’s latest data indicate that production has continued to increase, and production in the Appalachian region reached 26 Bcf/d in April 2018. Based on 2017 estimates, production in the Appalachian region accounted for almost half of total U.S. dry natural gas production. The difference in price between Appalachian hubs and Henry Hub tends to follow a seasonal pattern. Generally, this price spread widens in the summer months (April through September) and narrows in the winter months (October through March), when demand in regions with more pipeline capacity increases in the winter months. As infrastructure in the Appalachian region has increased, however, the summer price spread to Henry Hub has decreased. For example, in the summer of 2015, the Dominion South price was $1.48 per million British thermal units (MMBtu) lower than Henry Hub, but by summer 2017, the Dominion South Hub was $1.07/MMBtu lower than Henry Hub. Winter spreads at the Dominion South Hub, on the other hand, have remained relatively flat in recent years, averaging $0.90/MMBtu lower than Henry Hub.  Other hubs in Appalachia have followed a similar seasonal pattern. Most of the recent pipeline buildout in Appalachia, including the Rover and Rockies Express pipelines, have been concentrated near the southwest border of Pennsylvania where the Dominion South hub is located. As a result, the price spread between Dominion South and Henry Hub has narrowed more than other hubs in north-central Pennsylvania, such as Leidy and Marcellus.

         Surprise, Surprise: Energy Department LNG Export Study Draft Ignores Climate Change -- The Department of Energy (DOE) missed the mark in its newly published draft Liquefied Natural Gas (LNG) study, ignoring economic costs associated with climate change and the growth of the renewable energy industry, dozens of national and grassroots environmental groups said in public comments filed with the DOE on Friday.In June, the DOE published a draft study that predicted expanding LNG exports worldwide could double American natural gas prices by 2040 — but that would carry relatively limited costs to the overall economy. “The draft study is deeply flawed, as the authors chose to ignore both climate science and climate action in favor of what appears to be a political imperative over any objective analysis,” Lorne Stockman, Senior Research Analyst with Oil Change International and lead author of the comments said in a statement. “In my experience, this would not stand up to peer review in any academic institution.”The new comments come the day after DOE Secretary Rick Perry arrived at a ribbon cutting for the Cove Point LNG export facility, now the second in the U.S., where he touted exports of more American fossil fuel to Europe and elsewhere. “We’re now exporting natural gas to 30 nations,” Perry said via Twitter.Earlier this week, the Trump administration also finalized rules that would speed up approvals for “small-scale” LNG projects that would ship American fossil fuel to countries that haven’t signed free trade agreements with the >U.S. The new rules, slated to go into effect on August 25, allow the DOE to skip a “public interest review,” replacing that process with the presumption that small export facilites are a postitive for the U.S.As the shale gas rush has flooded American markets with cheap fracked gas, the U.S. has switched from building LNG< import terminals to terminals for exporting super-chilled methane via ocean tanker. In 2016, the U.S. exported 0.5 billion cubic feet (Bcf) of gas per day; last year that figure nearly quadrupled to 1.94 Bcf.

        Record high run rates in US refining industry - While crude oil producers in the prolific Permian Basin are living out a Shale Revolution, the Midcontinent region of the U.S. is having a Refining Renaissance. Crude takeaway constraints, mainly due to insufficient pipeline capacity, are driving the prices of crude in Western Canada and West Texas to attractive lows against the WTI NYMEX benchmark for crude at the Cushing, OK, hub. Cheaper oil can contribute to bigger margins for refiners, who are supplying increasing volumes into a retail market that’s selling gasoline at the highest prices in four years. What will happen if the refiners don’t rein in their runs? Today, we’ll explore the implications of record-high run rates in the U.S. refining industry. Refiners will push themselves to the limit if they can access cheap crude — and right now Canada’s got a lot of it. As we outlined in What Does It Take?, the Canadian glut is primarily due to capacity constraints, which drive values lower. On the whole, the Canadians’ shipping woes are a long-term problem. There’s ongoing environmentalist backlash against plans to build new pipelines, and railroads are hesitant to work with oil companies unless multi-year contracts are signed. In spite of their reluctance, Canadian crude-by-rail is moving out of the country at the highest rate ever — Canada’s National Energy Board reported a record-high 199 Mb/d of railed crude exports for May.

        U.S. distillate fuel inventories are low for this time of year – EIA - Inventories of distillate fuel, a category that includes both diesel and home heating oil, were 117.7 million barrels at the end of June, the lowest end-of-June level since 2004. Distillate inventories have generally been lower than the previous five-year (2013–2017) average throughout 2018. Relatively low inventory levels reflect growth in distillate consumption during 2018 that has not been fully offset by increased domestic refinery production or by lower net exports of distillate. EIA estimates that U.S. consumption of distillate fuel averaged 4.12 million barrels per day (b/d) during the first half of 2018, which was 190,000 b/d (5%) higher than in the same period of 2017. This increase is largely attributable to an increase in trucking activity, which is the leading use of diesel fuel. Demand for trucking services tends to be closely correlated to economic growth and industrial activity, both of which have been higher in the first half of 2018 compared with the first half of 2017. Cold January temperatures in the Northeast also led to more heating oil consumption. In January 2018, temperatures in the Middle Atlantic and New England—regions with relatively high shares of homes using heating oil—were 25% and 21% colder, respectively, than in January 2017.  On the supply side, EIA estimates that refinery production of distillate fuel in in the United States averaged 5.0 million b/d in first six months of 2018, which was 30,000 b/d higher (1%) than in the same period of 2017. Net exports (gross exports minus gross imports) of distillate fuel averaged 1.1 million b/d in the first half of the year, which was 80,000 b/d (7%) lower than in the first half of last year. The lower net exports largely reflected an increase in imports during the first quarter of the year to meet increased demand for home heating oil.  The increase in domestic distillate consumption relative to supply has contributed to diesel prices rising by more than crude oil prices (the main input cost in distillate production) over the past year. The spot price of Brent crude oil averaged $71 per barrel (b) in the first half of 2018, an increase of $19/b, or 46 cents/gallon from the first half of 2018. The retail price of diesel averaged $3.11/gallon from January through June 2018, up 55 cents/gallon from January through June 2017.

        Cultural survey by tribes for Enbridge pipeline could be largest effort of its kind -  Enbridge’s hotly contested new oil pipeline is slated to cross land claimed by indigenous people for thousands of years. But not before Indian tribes have completed an archaeological survey of the pipeline route, the largest effort of its kind in Minnesota and maybe the country. Surveyors, hailing from several Upper Midwest tribes, may have already found the remnants of a long lost tribal village. They are documenting everything from traditional wild ricing spots to buried artifacts. “We’re helping to preserve what’s ours,” Rob King, a member of the Fond du Lac Band of Lake Superior Chippewa and an electrician by trade, said as he used a screen to sift dirt at an archaeological dig. “If we find something, we make an impact.” Minnesota’s Ojibwe bands have fiercely opposed the $2.6 billion pipeline, fearing environmental havoc from oil spills. The tribal cultural survey won’t stop the pipeline. But it could result in small route changes that would forestall the disturbance of sacred tribal sites during pipeline construction, as has happened on state highway projects in recent years. The approved route of Enbridge’s new pipeline — a replacement for its current Line 3 that will carry Canadian oil to the company’s terminal in Superior, Wis. — runs through a pastiche of prairie, woods and wetlands in northern Minnesota. While state regulators have approved the project, Enbridge must get water-crossing permits from the U.S. Army Corps of Engineers for the pipeline. 

        BP to Buy BHP Shale Assets for More Than $10 Billion - BP will buy the bulk of BHP Billiton’s U.S. onshore oil-and-gas unit for $10.5 billion, as the U.K. oil major rebuilds in the U.S. after the Deepwater Horizon disaster and BHP exits a business it has called a costly and mistimed investment.  The sale accelerates a reshuffling of assets among global energy companies as oil prices surge to levels not seen since 2014. Chesapeake Energy Corp. said Thursday it is selling oil-and-gas fields in Ohio for $2 billion, while Royal Dutch Shell has nearly completed a $30 billion asset-sale program begun after its roughly $50 billion acquisition of BG Group in 2016. It takes the total value of global oil-and-gas acquisitions unveiled in 2018 to almost $188 billion, closing in on last year’s $287 billion, according to Dealogic.  The deal is an important milestone for BP, which is in the middle of an ambitious growth plan. The company is on track to stage a comeback after years of retrenchment following its fatal blowout in the Gulf of Mexico in 2010.  The acquisition will grant the British oil giant access to some of the hottest acreage in the U.S. shale patch where logistical scale can provide a huge advantage. Big oil companies have historically focused more on giant offshore projects, but they are increasingly sinking money into shale developments that start producing and throwing off cash faster. For BHP, which will book a roughly $2.8-billion charge against the assets for its 2018 fiscal year, it ends a costly saga that has left the company roughly $20 billion worse off. When the shale boom transformed the U.S. energy landscape a decade ago, big global operators were caught off guard. Many overpaid for assets for fear of missing out and often bet on areas of the U.S. that weren’t that productive. They also misjudged the volumes of gas capable of being produced by new drilling techniques, which weighed heavily on prices. Now there is so much gas the U.S. exports the fuel around the world. BHP paid a combined $20 billion to acquire U.S. shale assets in 2011, and then spent billions more to explore and develop them. But a collapse in energy prices resulted in massive impairment charges, including a more than $7-billion pretax charge in 2016 that is its largest-ever single write down.

        How BP found shale profits with 'crystal ball' oilfield technology Thousands of automated wells feed data on their performance into the firm’s supercomputers each evening. If they show a need for maintenance, an Uber-style system summons a subcontracted repair firm to keep the shale wells flowing at optimal output and minimal cost. Such technology has helped slash BP’s shale oil and natural gas production costs by 34 percent over five years. The shale business turned a profit for the first time in 2017, BP said, although the company declined to disclose the figure. BP’s progress in shale underpinned its $10.5 billion acquisition last week of BHP Billiton’s (BLT.L) U.S. shale operations. The deal highlighted BP’s newfound confidence in a sector that has challenged oil majors, which initially struggled to adjust to the quick pace and fast-evolving methods used to tap shale with horizontal drilling and hydraulic fracturing. BP and other majors that had traditionally focused on large, multi-year conventional drilling projects - such as Royal Dutch Shell and Chevron - were left behind when the shale boom took off a decade ago. The British energy giant is now catching up with smaller rivals, using technology and its institutional knowledge from global operations to push shale into a second phase that it hopes will reward its massive scale over the agility of smaller competitors. “We spent the last four years retooling our business and getting ready for this opportunity,” David Lawler, who heads BP’s shale business, said in a call with analysts after the BHP deal announcement. “We’re at the lowest production costs we’ve seen in many years. We’ll take that model, put that to work on these (BHP) assets and dramatically improve production and performance.” 

        Deep Water - Contenders In The Race To Build Crude Oil Export Terminals Off The Texas Coast --As Gulf Coast marine terminal owners consider ways to at least partially load Very Large Crude Carriers (VLCCs) at their facilities, a handful of midstream companies also are planning offshore terminals in deep water that would allow the full loading of VLCCs via pipeline. Projects under development by Oiltanking and others for sites along the Texas coast would appear to have at least two legs up on the Louisiana Offshore Oil Port, or LOOP. For one, they’d have more direct access to the Permian, Eagle Ford and other crudes flowing to coastal Texas. For another, the new terminals would be focused on crude exports — no double-duty for them. Today, we begin a review of the projects vying to be the first LOOP-like project in the deep waters off the Lone Star State. U.S. crude exports hit the 3-MMb/d mark a few weeks back (the week ending June 22), and while they’ve since retreated slightly, there’s every reason to believe that export volumes will be ratcheting up in the months and years to come. They’ll almost have to, really. As we said in Got That Swing, the three production-forecast price scenarios that we assessed in our most recent update — crude prices flat at $70/bbl or $55/bbl to 2023, or (like the forward curve) ramping down to $55/bbl over the next five years — would result in crude production growth of between 2.0 MMb/d (under the flat-at-$55 scenario) and 5.0 MMb/d (under the flat-at-$70 scenario). That’s on top of the 11 MMb/d the U.S. is already producing, which is twice the 5.5 MMb/d rate back in 2010. U.S. refineries already are operating at close to full capacity with a mix of domestic and imported barrels that fits their hardward configurations, cranking out increasing volumes of gasoline, diesel and jet fuel for export, and while at least a few refinery expansion projects are being planned, they would only be capable of absorbing a small portion of the incremental crude production we’re likely to see. So export the U.S. must.

        Bigger Oil Pipelines Are Coming to West Texas to Ease Bottleneck - Epic Midstream Holdings LP said last year it would build its first oil pipeline in America’s most active oil field. It won’t be finished until next year, but already Epic Midstream is considering making it bigger.  The upstart company, backed by private equity, had been planning to build a conduit capable of carrying 440,000 barrels a day from West Texas to Corpus Christi on the Gulf Coast. Now, it’s considering enlarging it to 675,000 barrels a day, after interest picked up in recent months. “We’re taking a look at upsizing very cautiously,” said Epic Midstream Chief Executive Phil Mezey. It plans to make a decision in coming weeks.  Bottlenecks have become a problem in the Permian Basin of Texas and New Mexico at the center of the shale boom. Drillers are pumping so much oil and gas that pipelines considered more than adequate just a few years ago now are overwhelmed.  That is creating opportunity for pipeline builders, who are planning an array of new oil and gas conduits in Texas, where they see increased demand from customers willing to pledge to contracts. Epic Midstream Holdings, Plains All American Pipeline LP, and Phillips 66 in a partnership with refiner Andeavor are building new oil pipelines aimed at Corpus Christi that are set to add upward of 1.8 million barrels of combined capacity late next year. Companies including Kinder Morgan Inc., meanwhile, are planning to build new natural-gas pipelines..

        Coke, Meth, And Booze: The Flip Side Of The Permian Oil Boom --- The fastest-growing oil region in the U.S. is fueling not only the second American shale revolution - it’s fueling a subculture of drug and alcohol abuse among oil field workers.  The Permian shale play in West Texas is once again booming with drilling and is full of oil field workers, some of which are abusing drugs and alcohol to help them get through long shifts, harsh working conditions, and loneliness and isolation.  Drugs are easily accessible in the Permian, which is close to highways and to Mexico. For oil field workers making six-figure salaries, money is not a problem to buy all kinds of illegal substances to shoot, snort and swallow to get through 24-hour-plus shifts. The physically exhaustive work also sometimes causes aches for workers, making them susceptible to getting hooked on prescription painkillers.  The drug and alcohol abuse subculture in the Permian is a known—yet rarely reported or discussed—issue in the most prolific U.S. shale play, where oil production is booming, and relentless drilling attracts oil field workers from all over Texas and all parts of the United States. Oil workers are not speaking up at work about their addiction for fear of getting fired, Pierce said, adding that he doesn’t have anything negative to say about the oil industry, which is the backbone of the economic growth in the Permian. Some oil field workers and contractors use drug cocktails or various substances depending on the condition they seek to achieve during their 24-hour-plus shifts. At the beginning of a long or overnight shift, they would use ‘uppers’ like cocaine and methamphetamines, and finish the shift with ‘downers’ such as prescription medication or alcohol, Kayla Fishbeck, regional evaluator for Prevention Resource Center Region 9, a data repository for 30 counties in West Texas, told Rigzone.  The Permian’s drug of choice is crystal meth, a stimulant increasingly supplied by Mexican drug cartels, according to law enforcement officials who spoke to the Houston Chronicle in May. There is a strong correlation between the rise of drilling activity and the number of crystal meth seizures by authorities in the Permian area, Houston Chronicle’s cross-analysis of data from the Texas Department of Public Safety and the rig count shows.

        The U.S. Oil Production "Mirage" -  Some of the surge in U.S. oil production this past spring might have been “a mirage.” On July 31, the EIA released monthly data on U.S. oil production, which revealed a decline in U.S. output of 30,000 bpd in May, compared to a month earlier. The dip is a surprise, given the widespread assumption that U.S. shale production was continuing to grow at a blistering pace.To be sure, a big reason for the decline in overall output was the 75,000-bpd decline in production from offshore Gulf of Mexico. But Texas production only rose by 20,000 bpd, a disappointing figure that likely came in far below what most analysts had expected. Moreover, the monthly total of 10.442 million barrels per day (mb/d) for May is sharply lower than what EIA itself thought at the time. Here are the weekly estimates for U.S. oil production that the EIA put out back then:  The weekly estimates tend to be less accurate than the retrospective monthly numbers. That is not a new dynamic, and estimating on a weekly basis inherently involves a lot of guesswork, so this is not a knock on the EIA.   Yet the discrepancy is rather striking. Not only did the EIA estimate that production in April and May was much higher than it actually was, but the agency also thought production was rising quickly.If the weekly estimates were to be believed at the time, production would have climbed from 10.525 mb/d in early April to 10.769 mb/d by the end of May, an increase of 244,000 bpd over a roughly eight-week period.Not only was production lower than that, but it didn’t actually increase at all. The EIA’s more accurate monthly figures show a slight decline in output, falling from 10.472 mb/d in April to just 10.442 mb/d in May..This is a rather significant development, and it has implications for more recent data releases.  “It is time to deal with the statistical gorilla on the oil trading floor,” Horsnell of Standard Chartered wrote, along with analyst Emily Ashford. “We think US crude oil production has not reached the 11 million barrels per day (mb/d) shown in recent weeks in the Energy Information Administration (EIA) weekly data, and that it is significantly below 11mb/d, with growth slowing.” That is a reasonable conclusion, given the roughly 300,000-bpd difference between the two surveys for May. The EIA has since switched its reporting for the weekly surveys by rounding off to the nearest 100,000 bpd, but data points from the last few weeks look like this:  It’s a little tricky trying to discern patterns from that data given the rounding off, but a few things jump out.  First, production dipped at the end of July, a rather surprising move. Output from Alaska fell 150,000 bpd over the last two weeks, which likely explains much of the move. However, production from the Lower 48 has only increased 100,000 bpd since the week of June 22, which suggests that the Permian basin is starting to run into production constraints because of pipeline bottlenecks. 

        Hell In Texas - A New Drill Down Report On Permian Gas Takeaway Constraints And Their Effects -- A big push is on to mitigate and ultimately fix the Permian’s natural gas takeaway constraints, which in recent months have widened the price spread between gas at Waha and at Henry Hub to levels not seen in years. Despite the efforts to quickly add incremental capacity to existing pipelines and build greenfield pipes, however, the momentum behind Permian crude production growth — and, with it, the production of more associated gas — make a months-long blowout in the Waha basis in 2019 a good bet.  Questions about the degree and duration of that basis pain and the amount of new pipeline capacity that will be needed (and how soon) can only be answered by taking a detailed look at what’s been happening and what’s being planned. Today, we discuss highlights from our new 24-page report on Permian gas takeaway constraints and their effects.  In January 2017 — just a year and a half ago — Permian natural gas production was sitting just above 5.5 Bcf/d, up by little more than 0.5 Bcf/d from the previous January. Crude oil prices — the primary driver of the crude-focused drilling and associated gas production volumes in the Permian — were barely above $50/bbl. The rig count in the basin was still in recovery phase, totaling about 270 after having dropped to a low point of 134 in mid-2016. Outflows of Permian supply were still well below the takeaway capacity out of the basin and near-term prospects for demand growth from exports to Mexico were still a realistic possibility. Spot gas prices at the Waha Hub, the benchmark location for Permian supply, were trading not far from historical ranges: about 15-20 cents/MMBtu behind the Henry Hub national benchmark in Louisiana.

        Natural gas pipeline explosion in Texas critically injures five  (Reuters) - A series of natural gas pipeline explosions in Midland County, Texas sent five people to hospital with critical burn injuries, and interrupted energy pipeline operations in the area, officials said. The region is the home to the Permian Basin, the largest U.S. oilfield, and is crisscrossed by oil and gas pipelines. The cause of the explosion and fire were not immediately known. Five workers with critical injuries were airlifted to University Medical Center in Lubbock, Texas, and were being treated at the center’s burn unit, said University Medical Center spokesman Eric Finley. Pipeline operator Kinder Morgan said on Wednesday it had isolated a portion of its El Paso Natural Gas Pipeline (EPNG) as a precaution, after being alerted to the fire near its line. One of its employees was injured and taken to hospital, spokeswoman Sara Hughes said. “There was a third-party pipeline involved that also experienced a failure, and preliminary indications are that the third-party line failure occurred before the EPNG line failure,” Kinder Morgan’s Hughes said in an email. The company is investigating the cause of the fire and evaluating any damage to its property. Regulatory agencies and customers were notified of the incident, she added. “Fire Department personnel suppressed the fire, however approximately one hour later a second and third small explosion followed,” said Elana Ladd, public information officer for the city of Midland, in emailed comments. Multiple pipelines are located near the site, Ladd said, adding that first responders were focusing on shutting off pressure and flow to the pipelines at the site. The pipeline explosion occurred on a rural road, FM 1379, about five miles south of Highway 158 at around 11:30 a.m. local time (1630 GMT), Ladd said, adding that the road had been closed. 

        7 Hospitalized After Pipeline Explosions in Texas --Seven people were injured and hospitalized after a series of natural gas pipeline explosions in Midland County, Texas on Wednesday, according to local media.  All pipelines in the region have been shut in. Midland sits in the booming oil- and shale-rich Permian Basin, which has multiple pipelines serving the field.The operator of the pipeline in question is unknown at this time, Midland public information officer Elana Ladd said to the Midland Reporter-Telegram. She added that fire department personnel are allowing the remaining gas to burn off.The incident occurred on a rural road, FM 1379. KWES reported that three total explosions occurred—the first at 11:30 a.m. After that fire was suppressed, a second and third explosion followed at 12:30 p.m. The cause is not yet known."They had a leak on the pipeline. Fire department responded to it. Midland Fire Department and Greenwood Fire Department. And while they were down there, they were fighting some grass fires along with it. Apparently something happened to the pipeline. We don't know what it is yet, because we can't get in there to look at it. But they had a failure within the pipeline itself and the first one exploded. Then they had two other small explosions, one medium and one small," .Initial reports said five people were injured from the explosions. Updated reports increased the number of injured people to seven. The seven were taken to the hospital with critical injuries, four with burns, according to CBS 7. One firefighter with the Greenwood Fire Department and another firefighter with Midland Fire Department were among the victims. The Midland Reporter-Telegram posted an eye-witness' video footage of the fire that broke out. Kinder Morgan told Reuters it isolated a portion of its El Paso Natural Gas Pipeline after being alerted of the fire near the line. One of its employees was injured and hospitalized, spokeswoman Sara Hughes said. "There was a third-party pipeline involved that also experienced a failure, and preliminary indications are that the third-party line failure occurred before the EPNG line failure," Hughes told Reuters in an email.

        Texas investigators probe pipeline blaze that injured seven (Reuters) - Authorities on Thursday were investigating what caused a fire and a series of natural gas pipeline explosions in Midland County, Texas, that sent seven people to hospital and shut down five lines before being extinguished. Workers from two companies with adjacent pipelines were sent to the area Wednesday morning because of an underground gas leak when one pipeline caught fire and exploded, said Midland County Fire Marshal Dale Little, who is conducting an investigation. The blast affected lines that furnish gas processing plants in the area but outages were not significantly impacting pricing or supplies, analysts said. Pipelines operated by Kinder Morgan Inc and Navitas Midstream Partners LLC both suffered damage, said Little. No cause for the blast has yet been determined. Navitas Chief Operating Officer Bryan Neskora said in a statement that company employees were among the injured. Five workers with critical injuries were treated at the burns unit of the University Medical Center in Lubbock, Texas. One man remained in critical condition and three others were upgraded to serious condition, all with burn injuries, medical center spokesman Eric Finley said on Thursday. A fifth worker was released after treatment. Two firefighters who were at the site when the explosions occurred also were taken to hospital on Wednesday for treatment of burns, said Elana Ladd, public information officer for the city of Midland. Ladd said the explosions occurred just outside Midland on a rural road. Oil and gas pipelines crisscross Midland County, which is located in the Permian Basin, the largest U.S. oilfield. The explosions affected five pipelines that share a transit channel and which were all shut in by operators, a Midland city official said on Wednesday. 

        Oil Industry Plans to Keep Workers Safe—by Firing Them and Having Robots Do Their Jobs -- The oil and gas industry is finally acknowledging how dangerous employment can be for its workers after years of touting the sector as a beacon of worker safety. This sudden honesty about the dangers of working in the oil patch coincides with the industry’s new solution to greatly improve the safety of those workers — which is to fire them and replace them with robots.  Perhaps the most bizarre example of this occured this June at the U.S. Energy Information Administration (EIA) annual conference, which featured a panel called “Technological progress in U.S. tight oil production.”   One of the panelists was Stephen Ingram, Vice President of Technology Solutions and Innovation, for oil field services company Halliburton. Ingram made the following argument for why the industry was shifting toward automation: “The most unsafe act that we provide as a service company to our employees is getting them to location today. So we’re engineering out the safety issues. Where we are focused right now is not on removing people from location because it derives a lower cost, it’s because the worst thing that we can physically do for our employees right now is drive them from the district camp to the well site. If you ever go out to Midland, Texas, you’re putting your life in your own hands driving up and down the highway.” It is true that traffic deaths in Texas have been on the rise since the 2008 fracking boom gripped the state, according to a 2014 investigation by the Midland Reporter-Telegram. However, Halliburton doesn’t suggest addressing the root cause of those accidents: the glut of commercial trucks, often serving frack sites, operating with “potentially life-threatening safety problems like defective brakes, bald tires, inoperable safety lights and unqualified, unfit, or intoxicated drivers.” Instead, to be safe, Ingram suggests eliminating the jobs at oil and gas wells that require workers to drive there. Which means those workers can look forward to risking their lives on the deadly highways of Texas driving to the unemployment office, but that no longer becomes Halliburton’s problem.

        Oil Prices, Truck Fatalities Intersect at Texas' 'Death Highway' - The number of traffic deaths involving big trucks shrank in 2015, when oil prices started to collapse. They surged last year as crude rallied, boosting the need for more and more truckers to manhandle the huge 18-wheelers that can carry anything from water and sand, to steel pipes and fuel. Route 285, which runs through Pecos, Texas, and Carlsbad, New Mexico, may be “the deadliest highway in the United States,” said Ralph McIngvale, a partner at Permian Lodging, which builds and runs so-called man camps in the region. “You’ve got to be very defensive. You’ve got to look as much in your rear-view window as your front windshield.” Drivers are so in demand in the basin that one can easily rake in $120,000 a year, Midland County Sheriff Gary Painter said in an interview. But that comes with its problems. “Some of them are speeding, some of them are too tired to be driving, but they’re making money,” he said. “Some of these guys are just trying to make as much money as they can.” “When you’ve been in the oilfield for ten to 11 days, working 14 hours a day, you just become so tired that you’re not thinking straight,” he said in an interview. “You’re just brain dead, because you’re living off four to six hours of sleep.” The pool of drivers with at least two to three years of oilfield experience with the big rigs “has dwindled to nothing,” Walker said. Companies now are “substituting formal training for experience.”The worst of the driving stems from over-sized trucks being on roads that weren’t designed for the amount of traffic they’re now carrying, Walker said in an interview.In New Mexico, where Walker lives, drivers hit sinkholes that can run several feet wide, a phenomenon many people blame on fracking, Walker said. And finding funds to repair the road is a “never-ending battle,” he said.

        Report: Keystone XL would have no major impact on Nebraska (AP) — A new planned route for the Keystone XL pipeline through Nebraska would not have a major impact on the state's water, land or wildlife, according to an updated environmental study produced by the Trump administration. The U.S. State Department released a draft study Monday of the pipeline's potential environmental impact in Nebraska, where opponents have repeatedly thwarted the project. The study is now subject to public input through Aug. 29 before it's finalized.The announcement marks another step in pipeline developer TransCanada's quest to finish the 1,184-mile oil pipeline, although the company continues to face obstacles in Nebraska.Environmentalists, Native American tribes and an organized minority of landowners in the state have prevented the company from moving ahead with construction, and they're now trying to block the project with a lawsuit currently pending before the Nebraska Supreme Court. Oral arguments in that case aren't expected until October at the earliest, and a decision won't come down until months later.

        Report: Keystone XL would have minimal environmental impact on Nebraska - An alternative route approved through Nebraska for the Keystone XL pipeline would have minimal impact on the environment, according to a draft environmental assessment released Monday by the State Department.The 304-page document looked at eight potential areas the proposed pipeline might affect, ranging from air and water quality to noise to cultural issues, and found only three where it would have more than a minor impact.According to the review, the pipeline would have "minor-to-moderate" effects in the areas of noise and vibration, water resources and biological resources. It would have minor impacts on soils, air quality and cultural resources, negligible-to-minor impact on socioeconomics and environmental justice, and a negligible impact on land use and recreation.A spokesman for TransCanada, the company building the pipeline, told Bloomberg that it would review the report and comment to the State Department as necessary.The slightly longer "mainline alternative" route cuts farther east than what TransCanada proposed. It then runs parallel with the existing Keystone pipeline for about 95 miles, with a 30-mile detour in Seward County. It also would require an additional pumping station in the state.The "mainline alternative" route was approved by the Nebraska Public Service Commission in November on a 3-2 vote. Several landowners filed a lawsuit over that decision, and the case is set to go before the Nebraska Supreme Court as early as October.

        Trump State Dept. Attempts 'Shortcut' to Build KXL Pipeline, Groups Say --Environmentalists spoke out against President Donald Trump's State Department after it found "no significant environmental impacts" in its review of TransCanada's long-gestating Keystone XL (KXL) pipeline.The alternative route approved by Nebraska regulators in November would have "minor to moderate" impacts from its construction and operation, according to the 300-page draft report released Monday. It said the route would not have a major impact on the state's water resources, soils or wildlife. It may cause minor impacts on cultural resources such as Native American graves.Once 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 just days into office.In a press release, the Sierra Club said that Trump's approval of the KXL was based on an outdated Environmental Impact Statement from 2014 and accused the administration of short-cutting the permitting process."Once again, the Trump administration is attempting to take a shortcut around the legally required review process on Keystone XL, putting our communities at risk for the sake of propping up the Canadian tar sands industry," said Sierra Club Beyond Dirty Fuels Campaign Director Kelly Martin in a statement. "Keystone XL was a bad idea when it was proposed a decade ago, it was a bad idea when former President Obama rejected it, and it's an even worse idea now. This pipeline is a threat to our land, water, wildlife, communities, and climate, and we will continue fighting, in the courts and in the streets, to ensure that it is never built."The group noted that in November, Nebraska regulators rejected TransCanada's preferred route for the pipeline. Instead, they voted for a new route that had not been assessed. KXL opponents are now trying to block the State Department's approval of the pipeline "based on this insufficient analysis" in federal court, the Sierra Club said.

        The fracking enemy is at the gate -   The "dirty tricks" by the fracking industry to derail ballot Initiative 97 (which would set back fracking wells 2,500 feet as opposed to the current 500) that Boulder Weekly has reported on are desperate. Clearly, frackers have little confidence in Colorado voters, nor should they.For starters, the whole concept of drilling thousands of tunnels in the earth's crust is reckless and irresponsible. It's playing with fire, literally — the molten lava that lays beneath us. An Oklahoman told me that since his state was fracked, it now has 25-to-30 earthquakes a year. Science magazine paraphrases a study as concluding, "the deeper the injection site, the stronger the quake."It also plays havoc with our water, endangering its purity and claiming millions of gallons that are badly needed elsewhere.The voters of Fort Collins, Longmont and other towns tried to ban fracking but were over-ruled by a Colorado Supreme Court disingenuously claiming fracking falls under "eminent domain," the legal notion that the rights of the individual must sometimes give way to the greater good. The implication is that Colorado just has to have that fracked gas to survive. However, our "shale gas" is most likely sent to China.There's a reason New York City, the Catholic Church, Ireland, many universities and now even, ironically, the Rockefeller Brothers Fund are divesting from fossil-fuel. Fracking is the industry's last fling.  Weld County has been raped by fracking; will the rest of Colorado follow? The enemy is at the gate; let's stop this madness now. Be certain to sign that petition to put Initiative 97 on the ballot; talk to your neighbors; canvass if you can. And if some ignorant, bought-and-paid-for punks try to stop you, tell them they need to get out of the way of democracy

        Chesapeake eager to expand oil drilling in Powder River Basin --On the day that Chesapeake Energy announced it is selling its Utica Shale assets in Ohio for $2 billion, the Oklahoma-based energy company said it intends to ramp up drilling for crude oil in the Powder River Basin in Wyoming. The Powder River Basin is developing “into the oil-growth engine of the company,” it said in a statement. Chesapeake is confident that Wyoming oil will boost company profitability moving forward, Kallanish Energy has learned. “It’s a very strong oil growth asset for us,” president and CEO Doug Lawler said. “We are experiencing improved drilling and completion costs and reduced drilling and completion time.” Chesapeake said it plans to add a fifth drilling rig and boost drilling in Wyoming. Total net Powder River Basin production on July 22 hit a new record of about 32,000 net BOE per day (42% oil, 41% natural gas and 17%% natural gas liquids), it said. That compares to production of 18,00 BOE per day in 4Q 2017. It recently reported a 78% increase in net production in the basin, compared to the average 2017 4Q rate. Chesapeake is projecting that net production in the basin will reach 38,000 BOE per day by Dec. 31 and it expects that production to more than double again in 2019. 

         Kuwait firm borrows $1.1bn to expand Canadian fracking operations -- Kuwait Foreign Petroleum Exploration Co. is borrowing $1.1 billion to spend on oil and natural gas projects as the company plans to expand its shale operations, chief executive Officer Sheikh Nawaf Saud Al-Sabah said. Sumitomo Mitsui Banking Corp. and Societe Generale SA were the joint lead arrangers of the five-year loan for Kufpec, a unit of state-run Kuwait Petroleum Corp. Kufpec, which currently produces 100,000 barrels of oil equivalent per day, expects to pump 119,000 next month and 150,000 in 2020, a level it will maintain until 2040, it said in a statement. The company is producing 38,000 barrels of oil equivalent a day in Australia and 30,000 in Norway, and it has drilled 120 wells to produce gas and condensates at shale fields in Canada’s Alberta province. Kufpec is currently producing 8,000 barrels of oil equivalent a day in Canada and plans to gradually increase output there by drilling a total of 2,000 wells, Al-Sabah said. The company’s total reserves comprise 494 million barrels of oil equivalent, and the Canadian project will add 28 million to that.

         Central Alberta man charged in 'elaborate' $2.6M fracking fraud -- A central Alberta man is facing fraud charges after a five-year investigation and more than $2 million in losses to investors. RCMP say Dane Skinner, 53, misrepresented and advertised a revolutionary fracking product, enticing numerous investors who reportedly lost more than $2.6 million. "This fraud was very elaborate, and consequently, our investigation has been very elaborate and has involved substantial resources and time" Const. Bill Lewadniuk with the RCMP financial crimes unit said in a news release Friday. The offences occurred between Dec. 5, 2007, and Feb. 28, 2013 in Lacombe, involving two numbered companies as well as N.E.X.T. Legacy Technologies Ltd., police say. RCMP launched an investigation in September 2013 involving several officers from various units. On Wedesday, police arrested and charged Skinner with fraud, laundering the proceeds of crime and uttering threats. He was released from custody and is scheduled to appear in Red Deer provincial court on Aug. 8. 

         Surrounded by Oil Fields, an Alaska Village Fears for Its Health - Martha Itta, of the Nuiqsut village government, was at her desk when a colleague burst through the door and shouted "Check Facebook!" A worker on an oil well site 18 miles away, owned by the Spanish company Repsol, had posted a video. "Rig's having a blowout here. They're evacuating the rig," the worker said as drilling mud and smoke spewed into the air and onto the tundra. "Ain't f---ing looking so good." Itta scrambled to dial any authority she could think of—the North Slope Bureau, the EPA—to find out if Nuiqsut should be evacuated. "We weren't getting any answers," she said. Air monitoring in Nuiqsut is done by ConocoPhillips because it owns major drill sites just beyond town, but the monitor was down for routine maintenance at the time of the explosion. Martha Itta saw her own young son struggle with respiratory illness and believes pollution blowing in from the North Slope's oil fields is raising the risks. "Our community was pretty much in panic mode. We didn't have any data—no air monitoring to show us what was out there in the air or if we should evacuate," Itta said. Villagers recall that dozens of people in the town got sick that day. For many in this largely Inupiaq community, the Repsol disaster underscored their worst fears of a link between the oil drilling boom surrounding the town and respiratory illness.It's not just blowouts that concern Itta now. She fears every-day pollutants in the wind, coming from vast drilling operations, turning the sky a hazy green some days and leaving black soot on the snow on others. When that happens, noses run and asthma flares up. Nuiqsut is the only town planted in the midst of Alaska's most prolific oil region on the state's North Slope, which today is poised for another drilling boom. Just eight miles from the grid of single family homes, government offices, a grocery store and schools, more than 50,000 barrels of oil—or roughly a tenth of the state's oil production—is pumped each day from oil fields owned by ConocoPhillips. Repsol, Armstrong and Oil Search also have oil fields just outside town. Parents get a view of the newest well, three miles from town, when they drop their kids at school.

        Mexican president-elect vows to end use of fracking (AP) — Mexico's president-elect said Tuesday that he will end fracking, the oil and gas extraction method that has just begun to take root in areas of the country's north. Asked about the potential risks of fracking at a news conference, Andres Manuel Lopez Obrador said, "We will no longer use that method to extract petroleum." Mexico has a huge potential shale formation in the Burgos basin, similar to the Texas Eagle Ford fields. But while a few wells have been drilled, the Mexican government has only recently scheduled bidding on opening some blocks for commercial development through fracking. Lopez Obrador also railed against private electricity generation contracts that displaced the government-owned Federal Electricity Commission, known as the CFE. He said that trend would be "corrected," without saying whether he would seek to overturn existing contracts. "The neoliberal governments deliberately closed the CFE plants in order to buy electricity from foreign companies at very high prices," Lopez Obrador said. "All of that will be corrected." 

        Perry: US to become net energy exporter within 18 months | TheHill: Energy Secretary Rick Perry on Tuesday predicted that the United States will become a net exporter of energy within the next 18 months, an outlook that seemingly clashes with his department's data office. “Here we are, the No. 1 oil and gas producing country in the world now,” he said on Fox News’s “Fox & Friends.”“In just a few years, probably within the next 12 to 18 months, we will become a net exporting energy country.” Reaching net energy exports will mean that the United States exports more energy than it imports. Perry’s forecast doesn't match the Energy Information Administration (EIA), the data office within his own department. The EIA predicted earlier this year in its Annual Energy Outlook that the United States would become a net exporter in 2022, two years later than Perry’s expectation. That analysis, however, said 2020 is a possibility in a case in which the nation’s oil and natural gas resources and technology prove to be better than predicted. Perry credited the approaching milestone at least somewhat to advances in oil and natural gas production like hydraulic fracturing and directional drilling. But he also more generally credited President Trump and the GOP policy changes since the beginning of last year. “It’s been this mindset that, you know, you can spend your money and have a chance to have a return on your investment. “People know now that they can build an LNG plant and it’s not going to get locked up, or a pipeline. You think about the pipelines that got stopped by the previous administration. Because if you can’t move this energy to the marketplace, it’s going to have a real negative effect on people going out and spending money.” 

        Ignoring Climate Threat and Economic Realities, Trump Brags About Building Fleet of LNG Terminals in EU—And Europe 'Will Pay For' Them - Responding to questions from reporters during a joint press conference with Italy's Prime Minister Giuseppe Conte at the White House on Monday, President Donald Trump echoed his "And-Mexico's-Gonna-Pay-for-It" routine by announcing plans to build liquefied natural gas (LNG) terminals across the continent for the expressed purpose of importing fracked gas from the United States.   "We are already talking to the European Union about building anywhere from nine to 11 ports—which they will pay for—so that we can ship our LNG over to various parts of Europe," Trump stated. "And that will be more competition." In response to a question about a gas pipeline from Russia, Trump said, "I'd like to see a competing pipeline" to that. Turning to Conte, Trump added, "So Mr. Prime Minister, I hope we're going to be able to do that competing pipeline." The comments come on the heels of Trump boasting last week that the EU would "be buying vast amounts of LNG!" after he reached an agreement with European Commission President Jean-Claude Juncker. Critics, however, quickly denounced the president's latest comments for both environmental and economic reasons."The Trump administration continues to not only ignore climate change, the greatest economic and security threat the world faces, when imagining that the world needs all this LNG, but also ignores economic reality," Lorne Stockman, senior research analyst at Oil Change International, explained to Common Dreams in an email.  Despite the president's claims about what the EU will do, there's little evidence to support the idea that Europe is on the verge of a giant LNG import binge. As Reuters noted, "three-quarters of Europe's existing import facilities lie empty while demand for U.S. LNG on the continent remains limited." According to an analysis by Food & Water Watch Europe released earlier this year, the utilization rate of Europe's existing LNG import terminals shows there is no need for new facilities.

        E.U. unlikely to build up to 11 plants to import LNG from U.S., as Trump says - Europe is unlikely to veer from its current plans to build a small number of new plants for importing liquefied natural gas, energy experts said, casting doubts on President Trump’s claims Monday that he had secured commitments from the European Union for the construction of nine to 11 plants to boost U.S. exports.In comments at the end of a joint news conference with Italian Prime Minister Giuseppe Conte on Monday, Trump portrayed the commitment as a victory in his “fantastic meeting” with European Commission President Jean-Claude Juncker last week.But while there have already been about a dozen proposals on the drawing boards, no more than three or four new plants will be built anytime soon. That’s because the existing 24 LNG import facilities now operating in Europe are running at about a quarter of their capacity, said Thierry Bros, senior fellow at the Oxford Institute for Energy Studies.What’s more, there are limited tools the E.U. can use to speed up construction of new plants by private companies. “We have enough capacity. We may need a little bit more in some dedicated areas. Otherwise I don’t see how we can need 11” new plants, Bros said.   LNG will also have to compete against three large gas pipeline projects — two from Russia and one from the Caspian Sea. The NordStream 2 will deliver gas from Russia to Germany. The TurkStream will bring gas from Russia to Turkey and then Central Europe, circumventing Ukraine. And the Shah Deniz 2, which just started transporting gas from the Caspian to Turkey, will be extended into Greece, Albania and Italy. “The E.U. does not decide how many LNG terminals to build; those are commercially driven decisions,”   “Those that are built will source gas from the most competitive sources, which may or may not be U.S. LNG. The market will decide whether the E.U. takes more LNG from the U.S., not Juncker.”

        Asininity is Believing the *EU* Will Buy More US LNG -- After the supposedly triumphal meeting between Trump and EU Commission President Jean-Claude Juncker, The Orange One loudly exclaimed that Europeans would buy lots more natural gas in the form of liquefied natural gas (LNG). Recall that LNG is the product of, well, liquefying natural gas for the purposes of transporting it over long distances--usually overseas--when pipelines are physically or economically unfeasible to build. That said, there are additional costs incurred by both sellers and buyers in handling gas-to-liquid and liquid-to-gas conversions, respectively. Therein lies the rub this time: given current efficiencies, it doesn't make much economic sense for Europeans to buy American LNG. Let's begin with the (sadly) expected Trumpian hyperbole:President Donald Trump’s plan for “vast amounts” of U.S. liquefied natural gas (LNG) to be sold to the European Union after trade talks with its top representative faces a reality test...“European Union representatives told me that they would start buying soybeans from our great farmers immediately. Also, they will be buying vast amounts of LNG!,” Trump wrote in a Tweet.  But alas, such is not the case. Given the greater distances involved, European destinations are not quite economically viable for trade in LNG. Locations near Western Europe cost lower given advantages of geographic proximity and a cheaper way of transporting natural gas--through pipelines that do not require conversion of gas into liquid form and back again; e.g., Trump's favorite Russian pipelines:  We come around to the same issue concerning the similar Trump-Juncker "agreement" with soybeans discussed in an earlier post. The last time I checked, the European Union was composed of 28 (soon 27) sovereign nations that don't take orders on where to buy energy from, least of all the European Commission. Short of EC subsidies, market access to American LNG is already as good as it gets since tariffs on LNG are essentially zero: The EU-28 are not command economies like China where you can rely on an apparatchik to make state-owned firms buy US LNG if agreed to. So, even European gas projects in America may find it more economically feasible to sell to nearby markets given the aforementioned costs that increase with distance:

        August 2 Natural Gas Storage Report: Inventories To Remain Below 5-Year Minimum For A Few Weeks (At Least) -- U.S. Energy Information Administration should report a larger change in natural gas storage this week compared to the week prior. We anticipate to see an injection of 43 bcf (in line with 5-year average and in line with the comparable figure in ICE's latest report for the EII-U.S. EIA Financial Weekly Index, but 25 bcf larger than a year ago).Last week, the number of total degree-days (TDDs) dropped by around 3% w-o-w, as cooling demand subsided in most parts of the country. Concurrently, heating demand went up - especially in the Midwest and Central parts of the country. We estimate that total energy demand was no less than 8% above last year's level. Please note that during this time of the year, heating degree-days (HDDs) have almost no effect on natural gas consumption. Cooling degree-days (CDDs) now have a disproportionately stronger effect on consumption and traders should be paying attention to changes in CDDs. This week, the weather cooled down further. We estimate that the number of CDDs will drop by another 10.0% w-o-w in the week ending August 3. Still, cooling demand should be no less than 3% higher vs. a year ago. Next week, cooling demand is expected to increase, as heat would be making a comeback - particularly, in the Central and Midwest parts of the country. We expect nationwide CDD and TDD counts to increase by 15.0% w-o-w in the week ending August 10 (see the chart below). The latest numerical weather prediction models are returning some bullish results (in absolute terms): a double deficit in natural gas inventories - i.e., the amount of natural gas in the underground storage is smaller compared to previous year and also compared to 5-year average. Next three EIA reports are expected to confirm the expansion of "5-year average deficit" by a total of 15 bcf and the contraction of "annual deficit" by a total of 41 bcf. If we are correct in our latest projection and the EIA reports a 43 bcf injection this Thursday, then storage level would increase to 2,316 bcf and would be 14 bcf below 5-year minimum. Storage level that is below a 5-year minimum is actually a rather rare occurrence. It happened in January 2018 but only briefly (see the chart below). Another, more prolonged period of low inventories took place during a very cold winter of 2013-2014 when inventories remained below 5-year minimum for 48 consecutive weeks. We currently expect storage level to remain below 5-year minimum for at least 8 consecutive weeks. Please note that we update our storage forecast on a daily basis.

        Don't get complacent about natural gas - The first week of August seems like an odd time to fret about a frigid winter, but perhaps not for people who buy, sell and store natural gas.  Following Thursday morning’s weekly report from the Energy Information Administration, the amount of gas in U.S. underground storage will be at around 2.3 trillion cubic feet and should keep rising for the next three months. Yet that cushion now stands 24% below where it was this time last year and 20% below the five-year average. Futures prices don’t reflect any scarcity, being exactly where they were a year ago.  The main reason traders are so sanguine is that the U.S. has been in a natural-gas glut for the past decade. There are areas of the country such as the prolific Permian Basin where some producers would practically give away their gas for nothing given the option. New pipelines in the prolific Utica and Marcellus shale formations coming online in the next weeks and months will allow even more of the region’s gas to reach gas to reach users this winter. But what seems like ample supply could set the market up for panicky winter buying. The last time that happened was in the winter of 2013-2014. Between the first day of that heating season and the peak in mid-February, Henry Hub natural-gas futures prices surged by 75% to a peak of $6.15 a million British thermal units. Local cash prices in areas with surging demand briefly reached over $100/MMBtu. In that season, gas in underground storage dropped by nearly 3 trillion cubic feet between November and April after starting out on the low side. If the rest of this summer and fall resemble last year, though, then the starting level of storage for the upcoming heating season will be nearly identical to what it was in November 2013.  Conditions nationwide don’t have to be extreme as long as it is cold in the right places. For example, the National Oceanic and Atmospheric Administration says the period from December 2013 through February 2014 was only the 34th coldest for the contiguous 48 states since reliable records began in 1895. That season was in the top 10 for states like Michigan, Illinois, Wisconsin, Missouri that rely on gas rather than heating oil or electric heat pumps to stay warm.  Production is higher today, but so is underlying demand. The agency noted at the beginning of the year that more natural-gas-fired generating capacity would come online this year than any year since 2004. Energy-market history won’t repeat itself, but gas traders shouldn’t dismiss the possibility that it will rhyme.

        EIA Delivers Another Shocker, Reports 35 Bcf Storage Build; Natural Gas Markets Unfazed - The Energy Information Administration (EIA) reported a 35 Bcf build into natural gas storage inventories for the week ending July 27, well below market expectations that clustered around a build in the low 40 Bcf range.Last year, some 18 Bcf was injected into storage inventories for the similar week, and the five-year average stands at 42 Bcf. Working gas in storage stood at 2,307 Bcf as of July 27, 688 Bcf below year-ago levels and 565 Bcf below the five-year average.  By region, the East injected 25 Bcf into inventories, the Midwest injected 28 Bcf and the South Central withdrew 12 Bcf. The Pacific also posted a withdrawal of 7 Bcf.  Market action immediately following the report was swift as the Nymex September futures contract climbed as high as $2.795 within minutes of EIA’s 10:30 a.m. ET release, and continued to trade near that level at 10:55 a.m. September opened at $2.745, and fell as low as $2.74 before the EIA storage data was released. Prior to the report, consensus had settled around a build in the low 40 Bcf range, in line with the five-year average. Kyle Cooper of IAF Advisors had projected a 40 Bcf build, while Genscape Inc. expected a 45 Bcf injection. A Bloomberg survey had a range between 25 Bcf and 58 Bcf, with the median response of survey participants coming in at 43 Bcf. Intercontinental Exchange settled at 43 Bcf. The EIA’s reported 35 Bcf build was 5 Bcf below projections by Bespoke Weather Services, which said “today’s print continues to demonstrate a tight market (albeit one that has loosened slightly from last week’s print).

        NYMEX Sep gas settles 5.8 cents higher at $2.816/MMBtu on lower-than-expected storage build - The NYMEX September natural gas futures settled 5.8 cents higher Thursday at $2.816/MMBtu after the US Energy Information Administration announced a lower-than-expected storage build for the week that ended July 27. The front-month contract traded Thursday between $2.740/MMBtu and $2.828/MMBtu. The EIA announced a storage build of 35 Bcf for the week that ended July 27, lifting US inventories to 2.308 Tcf. Total stocks are 688 Bcf below inventories one year ago and 565 Bcf below the five-year historical average. This announcement made last week the fourth consecutive week of lower-than-expected builds. The initial price reaction to the storage number was an increase of about 5 cents, as supply concerns intensified. An S&P Global Platts survey of analysts called for a 45-Bcf injection. Looking ahead to the NYMEX winter strip, the January and February contracts have broken above the $3/MMBtu mark. Inventories are so far below the usual level, but the front month is trading below the $3/MMBtu the market would expect to see, sources said. "This shows how the market isn't quite concerned about stocks, mainly because the market believes that US producers can knock production out of the park," said Phil Flynn, Price Futures Group senior market analyst. A recent decrease in power burn demand and continued strong dry gas production could narrow the storage deficit, sources said, but forecasts projecting a warmer-than-average August may delay any catch-up. US dry gas production is expected to fall 700 MMcf day on day to 79.1 Bcf on Thursday, which would be its second consecutive day below 80 Bcf, according to S&P Global Platts Analytics. The Marcellus Shale play was responsible for most of the fall, decreasing 210 MMcf to 21.09 Bcf, according to Platts Analytics.

        New EIA Storage Report Provides Hope For (Temporary) Higher Natural Gas Prices -- It's that time of year again - you know, the time of the year when hope starts to spring eternal in the oil and gas industry that this winter will finally be the winter when natural gas prices firm up again.  Such hopes have been largely dashed upon the shoals of high storage levels in recent years, but a new report from the U.S. Energy Information Agency (EIA) is suddenly providing cause for some renewed optimism. In its August 1 Weekly Natural Gas Storage Report, the EIA shows that July's total natural gas storage volumes broke down below the rolling 5-year range minimum for the first time in several years. In the attached chart, DrillingInfo projects future storage levels through the end of October using 2016 injection rates, 2017 rates and the five-year average rates.  Under all three of these injection scenarios, storage levels fall further below the five-year range minimum as we move into the winter withdrawal season.  As the Wall Street Journal notes, though injections will continue over the next three months, the current storage levels reported by EIA are a very substantial 24% below their level at the same time in 2017, and 20% lower than the 5-year average.  Is that cause for panic?  No, but it is cause for some concern, because such comparatively low levels of storage could lead to temporarily higher prices and even some isolated shortages of natural gas for home heating and electric power generation should the U.S. experience a cold winter for 2018/2019.  Extremely cold weather conditions could lead to widespread shortages and very significant spike in natural gas prices.

        Student, 14, referred to terror prevention programme after he was ‘groomed’ by anti-fracking activists  -- A 14-year-old A* student was referred to the Government’s anti-terror programme after being “groomed” by anti-fracking activists online. The boy, known by the pseudonym Aaron, was targeted via social media after signing an online petition, according to a report on preventing extremism in Greater Manchester commissioned in the aftermath of last year’s Manchester Arena attack.Aaron was referred to the anti-terror programme Channel by his school, due to concerns about his extreme beliefs in relation to the environment, specifically issues around fracking. According to the report Aaron was encouraged to participate in protests against fracking by local activists, however the approaches from activists become “progressively more aggressive to the point where Aaron was on the periphery of engaging with criminal behaviour” and was being frequently reported as missing by his parents. Activists only ceased contact with the boy when police made them the subject of an abduction notice prohibiting them from making contact with him. A breach of such a notice is a criminal offence.While in contact with activists Aaron's school attendance declined. He continued to visit rallies and began engaging with other activists on the dark web, according to the report by the Greater Manchester Preventing Hateful Extremism and Promoting Social Cohesion Commission. The commission found mental health and learning difficulties were a common feature in the cases they examined.

        France, Spain and Portugal eye gas as they diversify energy - The leaders of France, Spain and Portugal say they are moving ahead with plans to diversify their energy sources, which could mean more imports of liquefied natural gas from the United States.The leaders said after a three-way energy summit Friday it is “essential” to build infrastructures enabling them to import, store and transport natural gas, including through new pipelines described as “key.”Portugal is keen to keep large quantities of U.S. natural gas in underground storage facilities at one of its Atlantic ports and send it via pipeline across Spain into France.The strategy would help reduce Europe’s reliance on Russian gas, and the U.S. government is keen to increase energy exports. The three countries regard gas as a stopgap as they increasingly shift from coal to renewable energy sources.

        BP offloads oil cargo to Shandong refiner after two-month delay on water - sources (Reuters) - Oil major BP has started discharging about 1 million barrels of Angolan crude to a Chinese independent refiner, after holding the oil on water for two months due to slowing demand from private refiners, sources said on Thursday. The Mercury Hope supertanker, chartered by BP and carrying about 2 million barrels of Angolan oil, offloaded part of the cargo in late May at Qingdao and has since been at sea in nearby waters, said the sources with knowledge of the matter. The tanker began offloading the remaining part of its cargo to Shandong Qingyuan Group, a privately-controlled refiner based at Linzi, Shandong province, late on Wednesday. The group, which operates a 104,000 barrels per day refiner, 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. Mercury Hope is one of four supertankers that BP brought to China carrying Angolan oil several months ago, but which have been held up or delayed off China’s east coast, unable to fully discharge oil due to slowing buying from private refiners. . In early July, BP discharged nearly 1 million barrels of oil from Texas, another of the four tankers, also to Qingyuan. Qingyuan, one of China’s largest independently run lubricant producers, has received an annual crude import quota of 4.04 million tonnes for the last two years. 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 two months was less common. 

        Petrobras targets larger China market share with new crude oil (Reuters) - Brazil’s state-controlled energy company Petrobras plans to push more crude oil to top importer China by marketing a new medium-sweet grade that could be shipped from October, two sources with knowledge of the matter said. Petrobras expects to start pumping pre-salt oil from new platforms in the fourth quarter that would add to output from Latin America’s biggest producer and lift its exports. The new supply could enlarge Brazil’s market share in China as buyers there cut oil imports from the United States following Beijing’s announcement it would impose tariffs on U.S. crude in retaliation against similar moves by Washington. “Petrobras’ oil export curve is increasing and China is currently the company’s main market,” a Petrobras spokesman said in an e-mail. “With (Chinese) refineries’ growing interest in buying oil directly from producers ... Petrobras will grow its presence with these refiners.” Petrobras started production in April at its wholly-owned Buzios pre-salt field in the Santos basin from platform P-74, located about 200 km off the Rio de Janeiro coast in water depths of 2,000 metres, according to the company’s website. Two more platforms, P-75 and P-76, are to come online in the fourth quarter. Total Buzios output is expected to grow to 750,000 bpd by 2021, once an additional four platforms come online, the company said. 

        Iraqi southern July crude oil exports hit record high of 3.543 million b/d - Amman — Iraqi southern crude oil exports in July surged to a record high of 3.543 million b/d, data from the oil ministry showed Wednesday, despite OPEC's second largest oil producer facing major protests near its key oil assets. Exports in July were up 22,000 b/d from June as loadings from the Persian Gulf terminals beat the previous record of 3.535 million b/d set in December 2017, data showed. The rise occurred despite the continued suspension of loadings from the Khor Al-Amaya terminal due to sea line leaks and routine maintenance. The exports comprised 2.70 million b/d of Basrah Light crude and 843,000 b/d of Basrah Heavy, according to figures obtained from sources close to the State Oil Marketing Organization. Iraq oil output and exports have not been impacted by civil disturbances and violent demonstrations around some of the key oil fields such as Rumaila (1.5 million b/d), West Qurna 1 (500,000 b/d) and West Qurna 2 (380,000 b/d), all in Basra province, which currently account for 55% of federal Iraq production. The demonstrations are over jobs and basic services, with anger at the government directed at the oil industry of which Basra is by far the largest participating province. The ministry statement quoted spokesman Asim Jihad as saying the average provisional price during July was $69.16/b, a rise of 40 cents/b from the price in June while oil revenues totaled $7.6 billion last month. All of the federal exports were from Iraq's southern Persian Gulf oil terminals, with no shipments from the Turkish port of Ceyhan. A political dispute with the semi-autonomous Kurdistan Regional Government has prevented federal exports of some Kirkuk crude through the region's own pipeline to Turkey, while the federal pipeline to Turkey was destroyed by the self-styled Islamic State militant group in early 2014. Meanwhile, the KRG shipped 9.8 million barrels or 316,129 b/d in July compared to 9.5 million barrels or 316,666 b/d in June, according to reports obtained from sources at Ceyhan.

        Kuwait crude oil production at 2.8 million b/d, highest since December 2016: minister - Kuwait's crude oil production currently stands at 2.8 million b/d, the country's oil minister Bakheet al-Rashidi said Wednesday, up about 90,000 b/d from June levels. That would be the highest since December 2016, the last month before OPEC's supply cut agreement went into force, when Kuwait reported production of 2.84 million b/d. OPEC is set to reveal its July production figures in its closely watched monthly oil market report August 13. The producer group on June 23 agreed with Russia and nine other allies on a 1 million b/d output increase to head off any supply shortages emerging from US sanctions on Iran and Venezuela's continued decline, among other market disruptions. OPEC has not said how those extra barrels will be allocated among its members. In comments to Kuwait's Al-Rai newspaper, Rashidi said: "We are reaching a very stable stage for the crude market, whether for producers or consumers." He added that he was optimistic that crude production in the Neutral Zone shared by Kuwait and Saudi Arabia could resume soon. S&P Global Platts reported last month that the two countries were aiming for a December restart of production at the fields, which could bring up to 500,000 b/d to the market at a time when many analysts expect global supplies to be tight.

         Russian oil output up 150,000 bpd in July - Under an initial deal between OPEC and non-OPEC producers, Moscow had agreed to cut 300,000 bpd from the production level of 11.247 million bpd Russia reached in October 2016. When oil prices subsequently rose, the producers decided on June 22 to increase their combined output by 1 million bpd, of which Russia was to contribute 200,000 bpd starting on July 1. According to the ministry data, Russian oil production rose to 11.21 million bpd in July, up from 11.06 million bpd in June. That brings the combined Russian increase to 263,000 bpd compared to the initial cut agreed two years ago. According to the energy ministry’s data almost all Russian firms showed an increase last month. Russian Energy Minister Alexander Novak said on Wednesday higher production by Moscow was aimed at “maintaining stability of the (global) oil market within the framework of joint actions of OPEC and non-OPEC countries.”

        OPEC Oil Production Climbs as Saudi Arabia Pumps Near Record - OPEC’s crude output increased last month as Saudi Arabia pumped near-record volumes to make good on a pledge to consumers that demand would be met. The kingdom’s oil production grew by 230,000 barrels a day in July, to 10.65 million barrels per day. This is just shy of an all-time peak reached in 2016, according to a Bloomberg survey of analysts, oil companies and ship-tracking data. Higher crude output from the Saudis, along with Nigeria and Iraq, pushed up total production from the Organization of Petroleum Exporting Countries by 300,000 barrels a day, offsetting losses from a spiraling economic collapse in Venezuela, political clashes in Libya and the onset of U.S. sanctions against Iran. The group’s 15 members, which now include Congo, collectively produced 32.6 million barrels per day.

        Saudi VLCCs gather off Oman after Bab el-Mandeb ban — Saudi-owned VLCCs have started to gather off the southern coast of Oman after state-owned Saudi Aramco temporarily halted oil shipments through the Bab el-Mandeb strait at the bottom of the Red Sea, impeding its access to Europe. Three part-laden VLCCs owned by Saudi state shipping company Bahri -- the Marjan, the Khuzama and the TI Hawtah -- have interrupted their voyages over the past 24 hours to wait at the port of Salalah in south-west Oman, according to S&P Global Platts trade flow software cFlow. State-owned Saudi Aramco temporarily suspended its oil shipments through the Bab el-Mandeb strait on July 25 after it said two of its VLCCs were attacked by Houthi militants. The strait is a critical chokepoint through which some 4.8 million b/d of crude and refined products are shipped, according to US Energy Information Administration data from 2016, and the bulk of Europe's crude imports from the Middle East traverse it on their way to the SUMED pipeline or the Suez Canal. Waiting at Salalah would allow the tankers to resume their journeys promptly, were Saudi Aramco to rescind its ban within the next few days. Two more Bahri-owned VLCCs, the Abqaiq and the Arsan, appear to have shut off their transponders and have not updated their location through the automatic identification system since July 25 and July 23 respectively, according to cFlow. An unladen VLCC, the Hilwah, passed through the strait on Sunday and is headed for Ras Tanura on Saudi Arabia's east coast. It may have been permitted to take this route because it was carrying no cargo.

        Why is Saudi halting oil shipments through the Red Sea? (Reuters) - Saudi Arabia announced last week it was suspending oil shipments through the Red Sea’s Bab al-Mandeb strait after Yemen’s Iran-aligned Houthis attacked two ships in the waterway.   To date, no other exporters have followed suit. A full blockage of the strategic waterway would virtually halt shipment to Europe and the United States of about 4.8 million barrels per day of crude oil and refined petroleum products.  Western allies backing a Saudi-led coalition fighting the Houthis in Yemen expressed concern about the attacks, but have not indicated they would take action to secure the strait. That would risk deeper involvement in a war seen as a proxy battle for regional supremacy between Saudi Arabia and Iran.  The threat to shipping in Bab al-Mandeb has been building for some time, with the Houthis targeting Saudi tankers in at least two other attacks this year. It is not unusual to reevaluate security after such an incident, but Riyadh’s announcement also carries a political dimension.   Analysts say Saudi Arabia is trying to encourage its Western allies to take more seriously the danger posed by the Houthis and step up support for its war in Yemen, where thousands of air strikes and a limited ground operation have produced only modest results while deepening the world’s worst humanitarian crisis.  “Rather than allowing these hostile maneuvers to go unnoticed in the eyes of the world, the Saudi (energy) minister has placed Iran’s subversions of the whole global economy under the spotlight for everyone to see,” said energy consultant Sadad al-Husseini, a former senior executive at Saudi Aramco. “The capture of the port of Hodeidah will go a long way towards putting an end to these disruptions.”  Hodeidah, Yemen’s main port, is the target of a coalition offensive launched on June 12 in a bid to cut off the Houthis’ primary supply line. After failing to make major gains, the coalition halted operations on July 1 to give the United Nations a chance to resolve the situation, though some fighting has continued.  The suspension of Saudi shipments - with the implied threat of higher oil prices - may also be aimed at pressuring European allies, who have continued to support the nuclear deal with Iran following the U.S. withdrawal in May, to take a stronger stance against Tehran’s ballistic missiles program and support for armed groups across the region.  There was no official confirmation that the move was coordinated with Washington but one analyst said it would be astonishing if it were not, given the strategic alliance between the two countries.

        Minimal impact seen on Asian mid distillates market even as Red Sea shipping concerns remain –-- The Asian middle distillates market was holding steady this week even as traders kept a keen eye amid shipping concerns over the Red Sea, following last week's attack on two Saudi Aramco VLCCs by Yemeni Houthi militants in the area. S&P Global Platts reported last week that following the attack, Aramco temporarily halted all oil shipments through the Bab al-Mandab strait in the interest of safety.The Bab al-Mandab strait is a key transit route for oil, with Europe importing the bulk of its jet fuel consumption from the Middle East, almost all of which moves through the strait. Products like gasoil and diesel also move to Europe and Turkey from Asia through the strait. In addition, the strait is also critical to Saudi Arabia's own Red Sea refineries.While there were supply concerns due to worries about delays and that other shippers would also avoid the strait following the news, traders in Singapore said this week that the impact on the market has largely been subdued for now."There isn't any material impact on shipping so far -- we've checked with owners and they are still going via the strait as usual," a middle distillates source said Tuesday. "Even guys from the insurance side haven't given us any alerts so far," he said.Still, another Singapore-based middle distillates trader said Monday that the impact remained unclear. "We haven't seen any impact yet," the trader said, noting that vessels had yet to go around the Cape of Good Hope."Maybe just delayed arrivals to Europe for middle distillates ... not much impact," he added.

        Tehran says Trump wrong to expect Saudis to cover loss of Iran oil supply (Reuters) - Iran said on Tuesday U.S. President Donald Trump was mistaken to expect Saudi Arabia and other oil producers to compensate for supply losses caused by U.S. sanctions on Iran, after OPEC production rose only modestly in July. The comments, from Iran’s OPEC governor, came a day after a Reuters survey showed OPEC production rose by 70,000 barrels per day in July. Saudi production increased but was offset by a decline in Iranian supply due to the restart of U.S. sanctions, the survey found. “It seems President Trump has been taken hostage by Saudi Arabia and a few producers when they claimed they can replace 2.5 million barrels per day of Iranian exports, encouraging him to take action against Iran,” Hossein Kazempour Ardebili told Reuters. “Now they and Russia sell more oil and more expensively. Not even from their incremental production but their stocks.” He said oil prices, which Trump has been pressuring the Organization of the Petroleum Exporting Countries to bring down by raising output, will rise unless the United States grants waivers to buyers of Iranian crude. “They are also calling for the use of the U.S. SPR (Strategic Petroleum Reserve). This will also mean higher prices. U.S. waivers to our clients if they come is due to the failure of bluffers (Saudi and the other producers) and, if not given, will again push the prices higher,” he said. “So they hanged him (Trump) on the wall. Now they want to have a mega OPEC, congratulations to President Trump, Russia and Saudi Arabia.” 

        Oil prices steady as fund managers cease liquidation: Kemp (Reuters) - Hedge funds appear to have completed the recent wave of liquidation, with bullish positions increased slightly last week after heavy falls the week before, helping to steady the main crude oil benchmarks.Hedge funds and other money managers raised their net long position in the six most important petroleum futures and options contracts by 37 million barrels in the week to July 24.The boost was a marked turnaround from the previous week, when net long positions were cut by 178 million barrels, one of the heaviest bouts of liquidation on record.In the most recent week, portfolio managers raised net long positions in Brent (+14 million barrels), U.S. gasoline (+11 million), U.S. heating oil (+12 million) and European gasoil (+11 million).The only selling came in NYMEX and ICE WTI, where net long positions were reduced by 11 million barrels last week, according to data published by regulators and exchanges ( recent wave of liquidation, which started in late April, and accelerated in mid-July, has blown off some of the froth from the top of the market.Portfolio managers remain exceptionally bullish on the outlook, but some of the momentum-chasing and more tactical long positions have been squared up. Long positions in the petroleum complex outnumber short ones by more than 1 billion barrels, but that is down from a net long position of more than 1.4 billion barrels three months ago.

        US crude rises 2.1%, settling at $70.13, boosted by signs of tight oil supply - Oil prices rose back above $70 a barrel on Monday, with U.S. crude posting its best one-day dollar gain in over a month, after four weeks of losses for the benchmark.U.S. West Texas Intermediate crude ended Monday's session up $1.44, or 2.1 percent, to $70.13 a barrel. While the contract has risen in seven of the last previous 10 sessions, it has not posted a gain of more than $1 a barrel since June 27.  As of Friday, WTI was down more than 7 percent over the last four weeks, as heavy losses in a handful of trading sessions wiped out a string of modest daily gains for the benchmark.  The contract to deliver international benchmark Brent crude for September was up 83 cents, or 1.1 percent, at $75.12 a barrel by 2:08 p.m. ET. The September contract expires on Tuesday. Trading was heavier for the October contract, which is up 97 cents, or 1.3 percent, at $75.73.  Prices got support after Saudi Arabia announced it would suspend shipments of oil through the critical Bab el-Mandeb Strait, after Houthi rebels in Yemen attacked a pair of oil tankers in the Red Sea. The Saudis have led a military coalition against the Iran-aligned Houthis for more than three years. Risk consultancy the Eurasia Group says the attack on the tankers "represents a serious escalation in dynamics around the Yemen conflict.""While Houthi rebels probably long possessed the capability to threaten Saudi oil shipments in the Bab-al Mandab Strait, their willingness to use it is the result of rising tensions in the region," Ayham Kamel, head of Eurasia Group's Middle East and North Africa practice said in a research note, using an alternative spelling for the strait."The attack was probably encouraged by the Iranian leadership to demonstrate to the US, Saudi Arabia, and Israel that Iran and its allies retain a capacity to respond to intensifying economic, political, and military pressure." 

         Oil Prices Seesaw As Uncertainty Grips Markets -- Oil prices rose on Monday, in part because of a weaker dollar. But prices then fell significantly on Tuesday. “The market’s attempting to stabilize,” Gene McGillian, vice president of research at Tradition Energy, told the Wall Street Journal. “Right now we’re seeing a balance between the ideas that the increase in production from Saudi Arabia and Russia is going to offset the loss in Venezuela and Iran.” As July draws to a close, oil is set for its largest monthly loss in over a year.  Iranian officials said on Tuesday that oil prices would rise if the U.S. did not grant waivers to countries purchasing Iranian oil. Iran said that it would be wrong to assume that Saudi Arabia could cover for the supply shortfall. “It seems President Trump has been taken hostage by Saudi Arabia and a few producers when they claimed they can replace 2.5 million barrels per day of Iranian exports, encouraging him to take action against Iran,” Hossein Kazempour Ardebili, Iran’s OPEC governor, told Reuters. Meanwhile, Trump said that he would meet Iranian leadership without preconditions, if they wanted. “I would certainly meet with Iran if they wanted to meet,” Trump said. “I do believe that they will probably end up wanting to meet. I'm ready to meet whenever they want to.”  BP saw its profits rise in the second quarter by fourfold, and unlike some of its rivals, it avoided punishment from Wall Street. The strong results were welcomed, and BP’s CEO Bob Dudley used that good will to make a case for stepping up investment for growth. BP announced a $10.5 billion acquisition of BHP’s shale assets in recent days. “We’ve turned around and retooled the company over seven years,” Dudley said in a Bloomberg television interview. “It shows more confidence than we’ve had in a long time.” BP also hiked its dividend last week for the first time since 2014. Permian pipelines are starting to max out, according to data from Kayrros. That means that price differentials are set to widen through mid-2019 as production continues to edge up. The earliest relief will come from the BridgeTex pipeline expansion, which will come online in early 2019, but it will only add 40,000 bpd. The bottleneck is expected to force a slowdown in production growth, and Morgan Stanley estimates that the Permian might only be able to add 360,000 bpd next year, down from the Wall Street consensus of about 650,000 bpd.

        Oil prices drop on oversupply concerns as OPEC output increases in July -Oil prices fell on Tuesday, with Brent futures set for their biggest monthly loss in two years, as oversupply concerns rose after a Reuters survey showed OPEC output rose in July to its highest for 2018. September Brent crude futures fell 25 cents, or 0.3%, to US$74.72 a barrel by 0654 GMT after rising nearly 1% on Monday. The September contract expires later on Tuesday and the more-active October contract was down 0.3% at US$75.35. US West Texas Intermediate crude futures (WTI) were down 24 cents, or 0.3%, at US$69.88 a barrel, after rising more than 2% in the previous session. For the month, Brent futures are set to drop about 6%, the most since July 2016, while WTI futures set to decline 5.8%, the biggest monthly drop since October 2017. The Reuters survey showed OPEC increased production 70,000 barrels per day (bpd) to 32.64 million bpd in July, the most this year. The group has pledged to offset the loss of Iranian supply as looming sanctions have already started to cut exports from OPEC's third-largest producer. US President Donald Trump appeared to soften his approach to Iran, saying on Monday he would meet with President Hassan Rouhani without any preconditions. This was only a week after he threatened on Twitter to unleash severe consequences on the country. The United States has indicated that it wants Iranian exports cut to zero under the sanctions it pledged to reintroduce in May and that would go fully into effect in November.

        Oil posts biggest monthly loss since 2016 as OPEC boosts output (Reuters) - Oil prices fell on Tuesday, closing out the largest monthly decline in two years on supply worries after OPEC output reached a 2018 high in July, overshadowing reports that the United States and China might reopen trade talks that could boost demand.   October Brent crude futures fell $1.34 to settle at $74.21 a barrel. The September contract, which expires later on Tuesday, settled at $74.25. U.S. crude futures fell $1.37, or nearly 2 percent, to settle at $68.76. Brent lost more than 6 percent in July, while U.S. crude futures slumped about 7 percent, the biggest monthly decline for both benchmarks since July 2016. Oil prices extended losses in post-settlement trade, with U.S. crude at $68.32 a barrel, after data from the American Petroleum Institute showed domestic crude inventories rose 5.6 million barrels last week.   A Reuters poll forecast stocks fell 2.8 million barrels.  Signs that a supply disruption in the Bab al-Mandeb Strait in the Red Sea could be resolved weighed on prices throughout the trading session, said John Kilduff, partner at Again Capital Management in New York. Yemen’s Houthi group said it was ready to unilaterally halt attacks in the Red Sea to support peace efforts. Saudi Arabia suspended oil shipments through the strait last week after the Houthis attacked two Saudi oil tankers. Russia and the Organization of the Petroleum Exporting Countries boosted output in July, according to a Reuters production survey on Monday. It showed OPEC members boosted output in July by 70,000 barrels per day (bpd) to 32.64 million bpd, a high for the year. “We’re seeing some more production come online, so that weighs on prices,”

        Lots Of Oil Still Sloshing Around -- WTI Off Almost 2% -- Now Under $68/Bbl Again -- Gasoline Prices To Plummet --   Link here.

        • US crude oil inventories: another build, this time -- 3.8 million bbls
        • US crude oil inventories: 409 million bbls (threshold - 400 million bbls) -- only 1% below the 5-eyar average, and that 5-year average includes the Saudi Arabia surge, 2015 - 2017, which greatly distorted things -- in other words -- still a lot of oil sloshing around
        • refineries operating at 96.1% capacity: trending up
        • gasoline production: 10.5 million bbls (threshold: 10 million bbls)
        • distillate fuel production: 5.2 milion bbls (threshold: 5 million bbls)
        • gasoline demand graphic will be posted later
        Gasoline prices in our neighborhood continue to trend up. Something tells me refiners are doing very, very nicely.

        WTI Extends Losses After Huge Surprise Inventory Build -- Having posted its biggest monthly loss since 2016, amid over-supply fears, all eyes are back on API tonight with bulls hoping that last week's across the board inventory draws continue... but it reported a shocking 5.59mm inventory build and WTI dropped. API

        • Crude +5.59mm  (-3mm exp)
        • Cushing -930k (-500k exp)
        • Gasoline -791k
        • Distillates +2.89mm

        Just like we saw two weeks ago, a shockingly large crude inventory build reported by API... WTI was hovering around $68.75 into the API print and kneejerked lower...

         Crude Oil Analysis: API and Intensifying Trade War Weigh on Oil Prices -- Brent and WTI crude futures are down over 1% breaking below $74 and $68 respectively. One of the reasons for soft oil prices was due to yesterday’s API crude oil inventory report, which showed a surprise build in crude stocks of 5.6mbpd vs. Exp. -2.8mbpd. Consequently, this provides an indication as to how the DoE crude oil inventory report may take shape, which is scheduled for release at 1430GMT.  Overnight, China's manufacturing sector grew at the slowest pace since November 2017 as export orders declined yet again in sign of a worsening outlook for the Chinese economy and businesses amid the ongoing trade war tensions between China and the US. The Caixin Manufacturing PMI fell to 50.8 in July from 51 in the prior month. Alongside this, latest reports suggested that the US will place tariffs of 25% as opposed to 10% against $200bln worth of Chinese goods, which in turn has dampened the sentiment for risky assets including oil prices. Another factor for lower oil prices is due to the de-escalation of tensions in the Red Sea. Yemen’s Houthi rebels stated that they would stop attacks in the Red Sea for two weeks from 2000GMT today to support peace efforts. This comes days after Saudi Arabia had stopped oil exports through the Bab al-Mandeb strait after two crude tankers had been attacked. If indeed talks are somewhat successful this could potentially allow for crude tankers to resume activity through the strait, in which 4.8mbpd of crude products are typically shipped.

        WTI Holds Below $68 After Surprise Crude Inventory Build - WTI has extended its losses since last night's surprise API-reported crude inventory build., and DOE confirmed with a surprise 3.8mm bbl inventory build and while WTI tried to rally (smaller build than API), the jump stalled at $68.00...  DOE:

        • Crude  +3.803mm (-3mm exp, -850k whisper)
        • Cushing -1.338mm (-500k exp)
        • Gasoline -2.536mm (-2mm exp)
        • Distillates  -101k (+500k exp)

        So another surprise build - not a seasonal norm - but smaller than API-reported... US crude production dipped on the week... NOTE: As Erik Townsend pointed out, EIA changed the rules June 1st - now they round to the nearest 100k bbl. So the week-to-week production data is now next to worthless. The reason it LOOKED LIKE a ‘surge’ of 100k bbl last week is because that was from prior weeks (reported as zero). Each time is crosses the half-way point, they bump the official number up 100k. WTI traded below $68 ahead of the DOE data, and kneejerked up to 68 the figure on the print...

        Oil falls 2 pct on rising supply, concern about trade... (Reuters) - Oil prices fell about 2 percent on Wednesday as a surprise increase in U.S. crude stockpiles fed concerns about global oversupply, while investors worried that trade tensions could hit energy demand. Brent crude futures fell $1.82 to settle at $72.39 a barrel, a 2.5 percent loss. U.S. West Texas Intermediate (WTI) crude futures fell $1.10 to settle at $67.66 a barrel, a 1.6 percent loss. U.S. crude inventories rose 3.8 million barrels last week as imports jumped, the government's Energy Information Administration said. Analysts polled by Reuters had expected a decrease of 2.8 million barrels. Still, oil futures pared losses briefly after the data, which also showed growing U.S. demand. "It was surprising to see the build in crude, but it was a little bit offset by the bigger-than-expected draw in gasoline and the draw in Cushing," said Tariq Zahir, managing member at Tyche Capital Advisors. Gasoline stocks declined 2.5 million barrels, while crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures fell by 1.3 million barrels, EIA data showed. On Tuesday, the EIA reported that U.S. crude production fell 30,000 barrels per day to 10.44 million bpd in May. Oil prices are also being pressured by concern that global trade tensions could crimp economic growth. China said it would hit back if the United States takes further steps hindering trade, as the Trump administration considers slapping a 25 percent tariff on $200 billion worth of Chinese goods. Last month, Brent fell more than 6 percent and U.S. crude slumped about 7 percent, the biggest monthly declines for both benchmarks since July 2016. Russian oil production last month was on average above the level Moscow promised following the Organization of the Petroleum Exporting Countries and non-OPEC meeting in June, energy minister Alexander Novak indicated on Wednesday. Novak said that higher production was due to the need to maintain the market's stability. His comments indicate that Russia was producing above the level announced by Moscow after the OPEC+ meeting in June. Last month, Novak had said that Russia may surpass the 200,000 bpd level of increases if there is a need for it.

        Oil steadies to trade higher after losses -Oil prices rose on Thursday, steadying after losses over the past two days from a surprise increase in U.S. crude inventories and renewed concerns over trade friction between the U.S. and China. Brent crude futures were up 16 cents, or 0.2 percent, at $72.55 a barrel by 0503 GMT, after dropping 2.5 percent on Wednesday. U.S. West Texas Intermediate (WTI) crude futures increased by 6 cents, or 0.1 percent, to $67.72 a barrel. They fell 1.6 percent in the previous session. Oil prices are feeling the effects of ongoing tensions over global trade, with markets concerned about any slowdown in growth around the world. "A clear definition around the macros is what the market is looking for and until we get that, it is likely to be volatile in the range," said Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney. U.S. President Donald Trump has sought to ratchet up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports.China said it would hit back if the United States takes further steps on trade. Brent prices fell more than 6 percent in June and U.S. crude slumped about 7 percent, the biggest monthly declines for both benchmarks since July 2016. Tensions between the U.S. and Iran are also supporting the market, Barratt said. The United States believes Iran is preparing to carry out a major exercise in the Gulf in the coming days, apparently moving up the timing of annual drills amid heightened tensions with Washington, U.S. officials told Reuters on Wednesday. U.S. President Donald Trump&apos;s decision to pull out of an international nuclear deal and reimpose sanctions on Iran has angered Tehran. Senior Iranian officials have warned the country would not easily yield to a renewed U.S. campaign to strangle Iran&apos;s vital oil exports. "There are a lot of escalation points that could occur very quickly and that worries me," Barratt said. U.S. crude inventories rose 3.8 million barrels last week as imports jumped, the government&apos;s Energy Information Administration said. Analysts polled by Reuters had expected a decline of 2.8 million barrels. 

        OPEC Nears 100 Percent Compliance -- Oil prices are set to close out the week slightly down, although WTI and Brent regained some lost ground on Thursday. Oil traders are trying to balance two competing narratives. The first, is that rising OPEC production and a growing global trade war will cause a demand surplus. The second, that strong demand and an increasing amount of supply disruptions will lead to a shortage of oil in global markets.. OPEC boosted production by 340,000 bpd in July, as several members of the group ramped up output. Saudi production jumped to 10.63 million barrels per day (mb/d), close to a record high, according to S&P Global Platts. Kuwait, the UAE, Iraq and Algeria all boosted output to their highest levels since December 2016, just ahead of the implementation of the original OPEC+ deal. Meanwhile, Iran’s production fell to 3.72 mb/d in July as buyers began to curtail imports. Venezuela’s production also fell to 1.24 mb/d. Libyan output fell to 670,000 bpd. Overall compliance with the agreed upon cuts slipped to 105 percent, down from 131 percent in June.   The EIA reported that U.S. oil production fell to 10.472 mb/d in May, down 30,000 bpd compared to a month earlier. The decline was a surprise because the agency had previously estimated that production was surging. While offshore Gulf of Mexico accounted for a big loss, U.S. shale grew slower than expected. The latest monthly figures raise the possibility that U.S. oil production might also be lower today than most analysts believe.   In apparent response to harsh rhetoric from President Trump, Iran began naval exercises near the Strait of Hormuz, according to the Wall Street Journal. The exercises are annual, but analysts say they were moved up by a few days, suggesting they are in response to Trump’s verbal assault. “We’re watching it pretty closely,” a U.S. military official said.  As expected, the Trump administration released a proposal to water down fuel efficiency standards for cars and light trucks. Instead of ratcheting up each year through 2025 at over 50 miles per gallon, automakers will only have to achieve a fleet wide standard of about 37 mpg after 2020. Crucially, the Trump administration wants to take away California’s authority to set its own fuel efficiency requirements, a move that will likely result in a lengthy legal battle.

         Falling Rig Count Supports Oil Prices -  Baker Hughes reported a decrease to the number of active oil and gas rigs in the United States on Friday. Oil and gas rigs decreased by 4 rigs, according to the report, with the number of active oil rigs decreasing by 2 to 859 this week, while the number of gas rigs dipped by 3, hitting 183. There was one miscellaneous rig addition for the week as well.The oil and gas rig count now stands at 1,044—up 90 from this time last year.Canada’s oil and gas rigs for the week held steady, at 223 rigs, which is 6 more than this time last year, with a 2-rig loss for oil and a 2-rig gain for gas.Cana Woodford lost 3 rigs this week—the biggest of the losers. Marcellus lost 2 rigs, and Williston added one. Granite Wash (+2) and the Mississippian (+1) both gained rigs, while the Permian, which saw over a hundred rigs added over the last year, held steady this week at 480 rigs.Oil prices were fairly stable on Friday morning as Iran/US tensions continued to play out in part over Twitter, and an S&P Global Platts survey that showed that OPEC had increased oil production in July by 340,000 bpd. WTI was trading down at 10:40am EDT $0.19 (-0.28%) at $68.77, with Brent crude trading up $.04 (+0.05%) at $73.49. For WTI, that’s almost flat week on week. For Brent, it’s almost a dollar per barrel loss.EIA estimates for US production were down for the week ending July 27, at 10.9 million bpd. By 1:10pm EDT, WTI and Brent were trading down—widening the WTI discount to Brent. WTI was trading down 0.87% (-$0.60) at $68.36. Brent crude was trading down 0.34% (-$0.25) at $73.20 per barrel.

        Oil prices pull back as trade tensions weigh on market(Reuters) - Crude futures pulled back on Friday, giving up gains from the previous session as trade concerns weighed on the market and fueled concerns about demand. U.S. West Texas Intermediate (WTI) crude futures CLc1 settled down 47 cents at $68.49 a barrel. Brent crude futures LCOc1 settled at $73.21 per barrel, down 24 cents from their last close. Both grades briefly traded down more than $1 a barrel. U.S. crude ended the week down 0.4 percent, while Brent has fallen 1.5 percent in the week so far. Fears that Chinese demand could taper fueled the pullback on Friday after state oil major Sinopec cut its purchases of U.S. crude. China’s Unipec, the trading arm of Sinopec, has suspended crude oil imports from the United States due to the growing trade spat between Washington and Beijing, three sources familiar with the situation said on Friday. “Chinese demand from the independent refiners is also lower while the escalating trade war also doesn’t help sentiment,” China has said it plans to impose tariffs on liquefied natural gas, raising concerns that it could also impose tariffs on oil, said John Kilduff, partner at Again Capital Management in New York. U.S. nonfarm payrolls rose in July, but the U.S. trade deficit recorded its biggest increase in more than 1-1/2 years in June as the boost to exports from soybean shipments faded and higher oil prices lifted the import bill. The Commerce Department said on Friday the trade gap surged 7.3 percent to $46.3 billion. Russian oil output rose by 150,000 barrels per day (bpd) in July from a month earlier to 11.21 million bpd, energy ministry data showed on Thursday. Output by top exporter Saudi Arabia has also risen recently, to around 11 million bpd, and U.S. production is around that level as well. Saudi Arabia, Russia, Kuwait and the United Arab Emirates have increased production to help to compensate for an anticipated shortfall in Iranian crude supplies once planned U.S. sanctions take effect later this year. But a complete halt to Iranian supplies looks unlikely with Bloomberg reporting on Friday that China, Iran’s biggest customer, has rejected a U.S. request to cut imports from the OPEC member.

        Crude oil falls on higher OPEC supply, US-China trade spat — Crude futures fell Friday on rising OPEC and Russian output and concerns that a trade dispute between the US and China will affect demand. October ICE Brent settled 24 cents lower at $73.21/b, while September NYMEX crude settled 47 cents lower at $68.49/b. OPEC produced 32.66 million b/d in July, up 340,000 b/d from June, according to an S&P Global Platts survey Friday, as increases from Saudi Arabia, Kuwait, Iraq, Algeria and the UAE offset declines from Libya and Venezuela. Russia's crude output climbed nearly 150,000 b/d in July, the energy minister said Thursday, largely in line with Moscow's late-June agreement with OPEC. Russian output is now just 15,000 b/d below the record high of 11.23 million b/d set in October 2016. "Rising Saudi Arabian and Russian oil supply, coupled with concerns about demand due to the further escalating trade conflict between the US and China, the two largest oil consumer countries, is weighing on the [Brent] price," Commerzbank analysts said in a note Friday. Weekly rig data reported by Baker Hughes Friday did little to move the market. US rigs fell by four to 1,044 this week, while the Permian oil rig count was unchanged at 479. The Permian count has lingered between 473 and 479 since the end of May, reflecting a slowdown in activity on tight pipeline takeaway capacity, and suggesting production growth will slow. US crude exports have slowed in recent weeks, likely because the US-China trade war has reduced flows to China, the single largest buyer of US crude in May. US Energy Information Administration data shows that on a four-week average basis US crude exports have slowed to 1.87 million b/d during the week that ended July 27 from 2.43 million b/d July 27. With refinery maintenance season around the corner, US crude inventories could start to rise, especially if exports do not pick up again. West African crude market sources Friday warned that reduced refinery runs would lead to higher US crude exports into Europe competing with Nigerian light sweet crudes.

         Saudi Arabia Planned to Invade Qatar Last Summer. Rex Tillerson’s Efforts to Stop It May Have Cost Him His Job. - Thirteen hours before Secretary of State Rex Tillerson learned from the presidential Twitter feed that he was being fired, he did something that President Donald Trump had been unwilling to do. Following a phone call with his British counterpart, Tillerson condemned a deadly nerve agent attack in the U.K., saying that he had “full confidence in the U.K.’s investigation and its assessment that Russia was likely responsible.”White House Press Secretary Sarah Sanders had called the attack “reckless, indiscriminate, and irresponsible,” but stopped short of blaming Russia, leading numerous media outlets to speculate that Tillerson was fired for criticizing Russia.  But in the months that followed his departure, press reports strongly suggested that the countries lobbying hardest for Tillerson’s removal were Saudi Arabia and the United Arab Emirates, both of which were frustrated by Tillerson’s attempts to mediate and end their blockade of Qatar. One report in the New York Times even suggested that the UAE ambassador to Washington knew that Tillerson would be forced out three months before he was fired in March.The Intercept has learned of a previously unreported episode that stoked the UAE and Saudi Arabia’s anger at Tillerson and that may have played a key role in his removal. In the summer of 2017, several months before the Gulf allies started pushing for his ouster, Tillerson intervened to stop a secret Saudi-led, UAE-backed plan to invade and essentially conquer Qatar, according to one current member of the U.S. intelligence community and two former State Department officials, all of whom declined to be named, citing the sensitivity of the matter. In the days and weeks after Saudi Arabia, the UAE, Egypt, and Bahrain cut diplomatic ties with Qatar and closed down their land, sea, and air borders with the country, Tillerson made a series of phone calls urging Saudi officials not to take military action against the country. The flurry of calls in June 2017 has been reported, but State Department and press accounts at the time described them as part of a broad-strokes effort to resolve tensions in the Gulf, not as an attempt by Tillerson to avert a Saudi-led military operation..

        US preparing for regime change and war against Iran -- Just days after President Donald Trump publicly threatened Iran with “consequences the likes of which few throughout history have ever suffered,” his National Security Adviser John Bolton held a top-level meeting to discuss US plans to confront Iran.Notorious for his own belligerent threats against Iran, Bolton chairs the Principals Committee on national security matters, whose members include Defence Secretary Jim Mattis and Secretary of State Mike Pompeo. Officials told the Wall Street Journal it was only the third such meeting Bolton had convened since his installation as national security adviser in April.In May, the Trump administration effectively sabotaged the 2015 deal with Iran, under which Tehran severely restricted its nuclear programs and placed its nuclear facilities under intense international scrutiny in exchange for the winding back of crippling economic sanctions. US sanctions will be re-imposed next month on Iran’s auto industry, as well as trade in gold and other metals. In November, bans will come into force on Iran’s energy sector—the mainstay of its exports and government finances—along with shipping and insurance and central bank transactions. Washington has vowed to reduce Iranian oil exports to near zero. The Trump administration’s decisions have provocatively ramped up a dangerous confrontation with Iran. They also have worsened relations with US allies in Europe, which have developed economic links with Tehran since 2015. Washington has refused to exempt European companies from the sanctions, thus threatening to exclude them from the US financial system if they continue to do business with Iran. An Australian Broadcasting Corporation (ABC) article last Friday provided further evidence that the Trump administration is preparing to attack Iran. “Senior figures in the Turnbull [Australian] Government have told the ABC they believe the United States is prepared to bomb Iran’s nuclear facilities, perhaps as early as next month, and that Australia is poised to help identify possible targets,” it stated.

        US Considering Attacking Iran, With Saudi Forces Leading Strike -- Is the United States preparing to attack Iran? On Friday, Defense Secretary James Mattis dismissed this idea as “fiction,” back when the sources were in the Australian military. Yet other US officials have since been quoted as saying the attack is still being considered.The pretext for this war appears to be the ongoing Yemen War. Last week, Saudi state media claimed that Yemen’s Houthi rebels attacked and slightly damaged a Saudi oil tanker. The Saudis have previously alleged the Houthis are tied to Iran, and US media is treating this as some sort of transference, and reporting that Iran attacked the Saudi oil tanker, even though no one alleged that ever happened.Since the US has spent years presenting oil security as a reason for war with Iran, they are considering using that excuse. Officials say that this would be mostly a Saudi-led attack, with Saudi Arabia and its allies doing the bulk of the fighting, and relying on the US for support.Officials say this would require a “long-term military effort” against Iran. The US expectations that they might keep their involvement limited to a support role appears particularly unrealistic, given how much the same Saudi-led coalition has struggled to conquer Yemen.The danger here is that both the US and what it envisions to be its proxy army are going to each go into a war with high expectations for one another, and each get into a much bigger war than they bargained for. There are few specifics about what form this war would take, as US officials were insisting as recently as a few days ago that they are not interested in regime change in Iran. It is hard to imagine, however, that they could get the major Sunni Arab states to attack Shi’ite Iran with any hope of it being “limited.”

        Direct warfare with the US is out of the question for Iran, analysts say — here’s why  -- When Iran threatens war with the U.S., it's not necessarily talking about war in the conventional sense. But where Tehran can cause damage is an escalation of activities that's likely to send further ripples across regional conflicts and oil markets.  The battle of words between Iran and the U.S. hit its latest peak Thursday after the Islamic Republic's top general warned that if President Donald Trump started a war with his country, Iran would end it. "If you begin the war, we will end the war. You know that this war will destroy all that you possess," Major General Qassem Soleimani said from Hamedan, Iran, in a message directed at Trump. It followed several days of back and forth acrimony between Iranian President Hassan Rouhani and Trump and his Secretary of State Mike Pompeo. The open threat was significant, coming from a man who largely operates in the shadows: as the commander of the Quds Force, the elite external branch of Iran's Revolutionary Guard Corps (IRGC), Soleimani is believed to be the single most powerful figure in Iran's entire establishment. To many, he is the most influential operative in the entire Middle East. Regional experts dismiss the likelihood of Iran directly targeting the U.S. or venturing into open warfare. With a spiraling economy and nascent civil unrest at home, not to mention the distinct military and technological advantage of the U.S. and its ally Israel, Tehran is not keen to engage in conventional combat. But Iran has a range of other tools at its disposal to harm U.S. interests, many of which have long been in play and whose deployment is now likely to intensify.  Soleimani "knows he has a range of indirect options to needle U.S. interests across the region,"   These include disrupting sea lanes, ballistic missiles against Riyadh, threatening U.S. forces in Iraq and Syria, and meddling in Bahrain through its Shia population, to name a few.

         Iran's Currency Craters Most On Record Amid Panicked Scramble Into US Dollars -- Iran's rial flashed lower on Sunday against the US Dollar, as panicked Iranians scrambled into USD amid deepening economic woes and the imminent return of full US sanctions. The unofficial "black market" rate stood at 102,000 Rials by mid-Sunday according to website Bonbast, and confirmed to AFP by a currency trader.  The Rial has lost half its value against the US Dollar over the last four months - breaking through the 50,000:1 mark in March for the first time. In April, Tehran deployed a series of measures to try and stop the slide - including firing the governor of the central bank, fixing the Rial at 42,000 and threatening to crack down on black market traders.  But the selling continued as Iranians have panicked about a prolonged economic downturn, turning to dollars as a safe way to store their savings, or as an investment in the hope the rial will continue to drop, according to France24.With banks often refusing to sell their dollars at the artificially low rate, the government has been forced to soften its line in June, allowing more flexibility for certain groups of importers. The handling of the crisis was one of the reasons behind last week's decision by President Hassan Rouhani to replace central bank chief, Valiollah Seif.Alas for the Islamic Republic, none of it has worked.  As Johns Hopkins economist and Senior Cato Institute Fellow Prof. Steve Hanke noted in late June, "The Islamic Republic of Iran remains in the ever-tightening grip of an economic death spiral. The economy is ever-vulnerable because of problems created by the last Shah, and added to massively by the incompetence and shenanigans of the theocratic regime. Indeed, the economy is more vulnerable to both internal and external shocks than ever. How fast the death spiral will spin is anyone’s guess."

        Iran Preparing Massive Military Exercise To "Demonstrate Ability" To Block Persian Gulf: Report After days of heated barbs exchange back and forth between Washington and Tehran, Iran's elite Islamic Revolutionary Guard forces are expected to begin a major exercise in the Persian Gulf as soon as the next 48 hours, which could be aimed at demonstrating their ability to shut down the Strait of Hormuz, CNN reports citing two US officials."We are aware of the increase in Iranian naval operations within the Arabian Gulf, Strait of Hormuz and Gulf of Oman. We are monitoring it closely, and will continue to work with our partners to ensure freedom of navigation and free flow of commerce in international waterways," Captain William Urban, chief spokesman for US Central Command, told CNN. The Strait of Hormuz - a strategically critical passageway linking the Persian Gulf to the Arabian Sea which is crucial to shipping of global energy supplies - has emerged as a focal point in the escalating war of words between presidents Trump and Rouhani, after Iran threatened to block off the Persian Gulf if the US proceeds with fully implementing oil export sanctions on Iran.Officials told CNN that while the US sees no immediate signs of hostile intent from Iran, the IRGC show of force has US military intelligence "deeply concerned" for three fundamental reasons according to officials:

        • The exercise comes as rhetoric from the IRGC towards the US has accelerated in recent days.
        • It appears the IRGC is ramping up for a larger exercise this year than similar efforts in the past.
        • The timing is unusual. These types of IRGC exercises typically happen much later in the year.

        In the US military's assessment, the IRGC has assembled a fleet of more than 100 boats, many of them small fast moving vessels. It's expected Iranian air and ground assets including coastal defensive missile batteries could be involved, while  hundreds of Iranian troops are expected to participate and some regular Iranian forces could be involved as well.  The IRGC exercise comes as the US has only one major warship, the USS The Sullivans inside the Persian Gulf, several officials say. Other US warships are nearby and there are numerous combat aircraft in the region. The US military has been trying to encourage other nations in the region, especially Saudi Arabia to take a strong line on keeping the Gulf open in the face of rising Iranian rhetoric. They have also expressed concern about keeping open the waterways off Yemen where Iranian backed rebels have attacked oil tankers.

        Iran Starts Naval Exercise Near Vital Strait, U.S. Says —Iran began a major naval exercise near the Strait of Hormuz Thursday, in an apparent response to rhetoric from President Donald Trump in recent days that he would ratchet up pressure against Tehran, U.S. defense officials said. The U.S. believes the exercises “fully started” Thursday, one defense official said, and could continue until Aug. 6. A second official said there are more than 100 boats and ships participating in the exercise, but most are considered smaller craft. On Thursday, the U.S. saw boats going in and out of port, the first defense official said. An air component, consisting primarily of unmanned aerial vehicles, or UAVs, are also are participating in the exercise, a military official said.  Alireza Miryousefi, press counselor for Iran’s United Nations mission, didn’t respond directly to questions about the military exercise, but pointed to a Twitter post written Thursday by Foreign Minister Javad Zarif criticizing the U.S. Navy for referring to the Persian Gulf as the Arabian Gulf and for patrolling waters “in our backyard.”  The annual exercise appears to have been moved up on the Iranian calendar by several days, reinforcing the view that it is a response to Mr. Trump’s recent comments.Some officials in the U.S. military believe the Iranians are simply trying to send a message that if Tehran wanted to close the Strait of Hormuz, a critical shipping route that links the Persian Gulf with the Arabian Sea and ultimately, the Indian Ocean, it could do so.“We’re watching it pretty closely,” said a military official.On Monday, during a press conference with Italian Prime Minister Giuseppe Conte, Mr. Trump appeared to extend an olive branch to Iran, saying he would meet its leaders with “no preconditions.” Iran rejected that proposal. The U.S. naval presence in the region currently is somewhat below levels that have been considered normal for the area in recent years. There is no aircraft carrier strike group after the USS Harry S. Truman left the region last month. In recent weeks, the most prominent U.S. naval presence in the Middle East was the amphibious warship Iwo Jima, which arrived in the Persian Gulf last month and has since left.

        "No Preconditions": Trump Will Meet Iran's Rouhani "Any Time They Want” - President Trump said on Monday that he is willing to meet with Iranian President Hassan Rouhani with "no preconditions," exactly one week after he blasted out a fiery all-caps threat to the regime over Twitter.  “I would certainly meet with Iran if they wanted to meet. I don’t know if they’re ready yet,” Trump said, responding to a reporter's question during a White House press conference alongside Italy's new Prime Minister Guiseppe Conte. .@POTUS on Iran: "I'm ready to meet anytime that they want to and I don't do that from strength or from weakness. I think it's an appropriate thing to do... No preconditions. If they want to meet, I'll meet."— FOX Business (@FoxBusiness) July 30, 2018  Watch for the MSM to follow the North Korea playbook on this one - blasting Trump for failing to follow "protocol" as he carves a new path through international relations.  Following a warning from Rouhani earlier in the month that hostile US policies could trigger the "mother of all wars," after which Trump blasted back via Twitter:   Trump's decision to meet with Rouhani would be the first major step towards mending relations after he pulled out of the Obama-era Iran nuclear agreement in which Tehran committed to curtailing its nuclear program in exchange for reduced sanctions.  Just yesterday we noted that Iran's currency is in freefall - pegging 102,000 Rials to the US Dollar on the black market, according to currency website Bonbast, and confirmed to AFP by a currency trader.  Trump suggested a meeting with Rouhani would be the "appropriate thing to do," and that it would come neither from a position of strength nor weakness, reports Fox News.

        China Defies Trump, Rejects US Request To Halt Iran Crude Imports - Though no shocker as we predicted previously, China has refused to cut Iranian oil imports at the United States' request in a severe blow to White House efforts to intensify pressure and economically isolate the Islamic Republic after the US withdrawal from the 2015 nuclear deal. However, Beijing has reportedly agreed not to accelerate purchases.  China, itself a target of ratcheting US economic pressure especially after Wednesday's shock news that President Trump may impose a 25 percent tariff on $200 billion worth of Chinese goods, remains the world's top crude importer and is Iran's top buyer. Bloomberg reported overnight, citing two officials familiar with the negotiations, that limited concessions have been made, howeverBeijing has, however, agreed not to ramp up purchases of Iranian crude, according to the officials, who asked not to be identified because discussions with China and other countries continue. That would ease concerns that China would work to undermine U.S. efforts to isolate the Islamic Republic by purchasing excess oil. China has long been on record as opposing unilateral sanctions and further according to Bloomberg accounted for 35 percent of Iranian exports last month, based on ship tracking data.  Meanwhile Iran's foreign minister welcomed the news: “The role of China in the implementation of JCPOA, in achieving JCPOA, and now in sustaining JCPOA, will be pivotal,” Mohammad Javad Zarif said, according to Reuters. The Trump White House currently has teams of negotiators around the world pressuring European and other capitals to cut off trade with Iran largely unsuccessful to date in an attempt to cut its oil exports to zero by November 4.

        How BRICS Plus clashes with the US economic war on Iran - The key take away from the BRICS summit in Johannesburg is that Brazil, Russia, India, China and South Africa – important Global South players – strongly condemn unilateralism and protectionism.The Johannesburg Declaration is unmistakable: “We recognize that the multilateral trading system is facing unprecedented challenges. We underscore the importance of an open world economy.” Closer examination of Chinese President Xi Jinping’s speech unlocks some poignant details.Xi, crucially, emphasizes delving further into “our strategic partnership.” That implies increased BRICS and Beyond BRICS multilateral trade, investment and economic and financial connectivity.And that also implies reaching to the next level; “It is important that we continue to pursue innovation-driven development and build the BRICS Partnership on New Industrial Revolution (PartNIR) to strengthen coordination on macroeconomic policies, find more complementarities in our development strategies, and reinforce the competitiveness of the BRICS countries, emerging market economies and developing countries.”If PartNIR sounds like the basis for an overall Global South platform, that’s because it is.In a not too veiled allusion to the Trump administration’s unilateral pullout from the Iran nuclear deal (JCPOA), Xi called all parties to “abide by international law and basic norms governing international relations and to settle disputes through dialogue and differences through consultation,” adding that the BRICS are inevitably working for “a new type of international relations.”Relations such as these certainly do not include a superpower unilaterally imposing an energy export blockade – an act of economic war – on an emerging market and key actor of the Global South. Xi is keen to extol a “network of closer partnerships.” That’s where the concept of BRICS Plus fits in. China coined BRICS Plus last year at the Xiamen summit, it refers to closer integration between the five BRICS members and other emerging markets/developing nations.

        Israel Threatens Military Response If 'Iran-backed' Houthis Block Red Sea Strait -- Will the war in Yemen become the next battleground in the ongoing Iran-Israel proxy war for the Middle East?   Israel has echoed US charges that Iran supplies Yemen's Shia Houthi rebels with ballistic missiles capable of hitting Riyadh, while the Shia rebels have accused the "Zionist" Saudis of massacring the civilian population as the kingdom's covert intelligence sharing alliance with Israel has become public knowledge of late. While the two have waged what is largely up to this point a war of words in Yemen, trading accusations of operating in the shadows, Israel has now openly threatened to intervene off the coast of Yemen if Houthi forces block the vital waterway through which cargo ships bound for Israel pass from Asia. According to a breaking Reuters story, "Israel would deploy its military if Iran were to try to block the Bab al-Mandeb strait that links the Red Sea to the Gulf of Aden, Prime Minister Benjamin Netanyahu said on Wednesday."This is the first significant threat of deploying military force issued from Tel Aviv in the Yemeni theater, and comes after the temporary halt in shipments through the strategic Bab el Mandeb strait which began a week ago. The halt followed a Saudi accusation that Iran-backed Houthi rebels in Yemen had attacked two Saudi oil tankers traversing the waterway, driving home the threat that the conflict poses to a key chokepoint in international trade and the flow of Gulf oil to world markets. The Houthis for their part claimed they had actually attacked a Saudi warship rather than oil tankers.Saudis have in previous months accused the Houthis of attacking Saudi commercial ships passing through the strait with surface-to-surface missiles supplied by Iran.

        'It was a massacre': Dozens killed in Saudi air raids on Hodeidah - At least 55 people, including women and children, have been killed in Yemen's Red Sea port city of Hodeidah in air raids carried out by a Saudi and UAE alliance battling Houthi rebels,  the rebel-run health ministry said. In a statement issued late on Thursday, the ministry said the attacks, which targeted the city's Public al-Thawra Hospital and a busy fishing port, wounded at least 124 Yemenis.The Reuters news agency put the death toll at 28 late on Thursday, while China's Xinhua said it stood at 70 early on Friday.Taha al-Mutawakil, the Minister for Public Health and Population in the Houthi-led administration, said local authorities were struggling to cope with the number of casualties, and ambulances feared transporting the wounded to Sanaa or other provinces due to fears of being targeted by air attacks. The International Red Cross, which supports the al-Thawra hospital, said it sent surgical supplies that will be enough to treat up to 50 patients who are in critical condition."What we have seen in Hodeidah is a heinous crime," Mutawakil was quoted by the Houthi-run SABA news agency saying.He added that US shared responsibility for the deaths.With logistical support from the US, Saudi Arabia and the UAE have been carrying out attacks inside Yemen since March 2015 in an attempt to reinstate the internationally recognised government of President Abu-Rabbu Mansour Hadi. At least 10,000 people have been killed in the fighting and more than 100,000 children have died from extreme hunger and starvation.  Mohamed al-Hasni, the head of Hodeidah's fishermen union, told Al Jazeera that there were no military targets in the area and "the targeting of fishermen was not expected"."The port and market were full of people. It was a massacre," he said. "There was no military presence in the area. No armed men were around at all. The targeting was aimed at spreading fear and terror.

        U.S.-Backed Saudi Airstrike on Family With Nine Children Shows “Clear Violations” of the Laws of War - Shortly before 10 p.m. on the night of May 14, more than a dozen members of the Maswadah family, including nine children, lay sleeping in tents in the shadow of a cliff in Yemen’s northern governorate of Saada. The nomadic family had been eking out a living raising sheep and doing farm work in the region most heavily targeted by the U.S.-supported, Saudi-led bombing campaign that began in 2015.   Unbeknown to the Maswadahs, Royal Saudi Air Force drones had been hovering for 45 minutes over their dwellings at the edge of the wide plain walled by mountains. Saudi duty officers more than 550 miles away watched the family’s tents on their screens, along with two “hot spots” likely created by the body heat of people and animals inside.   What happened next in the Saudi war room is described in a U.S. intelligence report seen by The Intercept. The minute-by-minute account of a single airstrike provides a small yet detailed window into the Saudi-led bombing campaign in Yemen, showing how officers in charge of daily air raids are ignoring their own procedures aimed at minimizing civilian casualties. Specialists in international humanitarian law say the incident described in the document shows “clear violations” of the laws of war.The duty officers monitoring drone feeds in the Joint Forces Command National Defense Operations Center in the Saudi capital of Riyadh on the night of May 14 saw the Maswadahs’ tents, but observed “no personnel or vehicles visible, nor any other intelligence information about the location,” according to the report. The Saudi brigadier general in charge on May 14 wasn’t present in the operations center, so the duty officers called him twice to describe the target. At 9:25 p.m., the absent general issued the order to strike the tents. The RSAF, which was monitoring the site separately, added its own recommendation to strike. “At 2156, an unknown coalition aircraft released a single GBU-12 on the target,” notes the document, referring to a 500-pound, American-made precision-guided bomb that was dropped at 9:56 p.m., less than 50 minutes after the Saudis first caught sight of the tents.

         Why We Know So Little About the U.S.-Backed War in Yemen - Matt Taibbi - Thursday, from Al Jazeera: “Yemen ‘on Brink of New Cholera Epidemic,’ Charity Warns.” The piece details how recent developments in the Yemeni civil war — specifically, the possible siege of the port city of Hodeidah — may cause a surge in cholera cases. There wereover a million reported cases of cholera between the fall of 2016 and spring of 2018, the largest documented outbreak in modern times. The rate of infection had slowed, but observers now fear resurgence. Since the conflict began, medical services have been devastated across the war-torn country, and children in particular have been affected, with as many as 400,000 at imminent risk of starvation. In April, U.N. General Secretary Antonio Guterres said that 8 million people in Yemen didn’t know where they were getting their next meal.  If you want to be saddened to the point of nausea, look at these images, in which weeping mothers can be seen holding their malnourished babies and saying things like, “I’m losing my son and there’s nothing I can do about it!”Yemen is a catastrophe on a scale similar to Syria, but coverage in the United States has been sporadic at best. PBS News Hour did a thorough three-part series, but MSNBC, for instance, has barely mentioned the crisis in a year, during a period when it has done 455 segments on Stormy Daniels (this according to media reporter Adam Johnson).The reason for inattention is obvious: The United States bears real responsibility for the crisis. A quote from a Yemeni doctor found in PBS reporter Jane Ferguson’s piece sums it up:“The missiles that kill us, American-made. The planes that kill us, American-made. The tanks … American-made. You are saying to me, where is America? America is the whole thing.”The Yemeni civil war pits Iran-backed Houthi rebels against Saudi-backed government forces, who receive weaponry and other forms of assistance from the U.S., including the in-air refueling of Saudi warplanes. You can see the reporter Ferguson touring collections of American-made weapons dropped on Yemen — including cluster bombs — at about 2:40 of this video. Leaving aside the complex question of who is right and who is wrong in this multipolar war (which also includes Al-Qaeda/ISIL forces), there is no question that masses of innocent civilians have wrongly become targets. Hospitals, schools, mosques and other non-military locations have been destroyed indiscriminately.

        Robert Fisk: "I Traced Al-Qaeda Missile Casings In Syria Back To Their Original Sellers" -  Finally, a journalist for a mainstream UK media outlet is methodically tracking weapons shipment serial numbers and English-language paperwork recovered from al-Qaeda groups in Syria, and he's literally showing up at arms factories and questioning arms dealers, including officials at the Saudi Embassy in London, asking: why are your weapons in the hands of terrorists?   Veteran Middle East war correspondent Robert Fisk recently published a bombshell report entitled, I traced missile casings in Syria back to their original sellers, so it’s time for the west to reveal who they sell arms to.   His "detective story" as he calls it actually seems to solicit the help of the public, and begins as follows:    Note down this number: MFG BGM-71E-1B. And this number: STOCK NO 1410-01-300-0254. And this code: DAA A01 C-0292. I found all these numerals printed on the side of a spent missile casing lying in the basement of a bombed-out Islamist base in eastern Aleppo last year. At the top were the words “Hughes Aircraft Co”, founded in California back in the 1930s by the infamous Howard Hughes and sold in 1997 to Raytheon, the massive US defence contractor whose profits last year came to $23.35bn (£18bn).  There were dozens of other used-up identical missile casings in the same underground room in the ruins of eastern Aleppo, with sequential codings; in other words, these anti-armour missiles – known in the trade as Tows, “Tube-launched, optically tracked and wire-guided missiles”...  Fisk continues by relating the moment he confronted a former Hughes Aircraft (now Raytheon) executive about finding their product in the hands of terrorists: I met an old Hughes Aircraft executive who laughed when I told him my story of finding his missiles in eastern Aleppo. When the company was sold, Hughes had been split up into eight components, he said. But assuredly, this batch of rockets had left from a US government base. Amateur sleuths may have already tracked down the first set of numbers above. The “01” in the stock number is a Nato coding for the US, and the BGM-71E is a Raytheon Systems Company product. There are videos of Islamist fighters using the BGM-71E-1B variety in Idlib province two years before I found the casings of other anti-tank missiles in neighbouring Aleppo. As for the code: DAA A01 C-0292, I am still trying to trace this number. Fisk writes further that even if he doesn't ultimately come up with the American base from which the missiles originated, as well as specific factory they were made, he knows one thing for sure, that both Hughes/Raytheon and the US government have erected a paper trail system designed to shield them from violating anti-terror laws.

        Russian Electronic Warfare Against US Troops In Syria Enters Dangerous Phase: Report --"All of a sudden your communications won’t work, or you can’t call for fire, or you can’t warn of incoming fires because your radars have been jammed and they can’t detect anything" a retired Army colonel who specializes in electronic warfare told Foreign Policy. A new report details the Pentagon's growing alarm at increased instances of Russian electronic jamming attacks on American troop positions in Syria, which number according to public Pentagon statements at 2000 or more, located on and near a dozen or more "secret" bases mostly in Syria's northeast and embedded among the mostly Kurdish US-backed Syrian Democratic Forces. Russia, alongside the Syrian government sees US troops as foreign uninvited occupiers, which have committed acts of aggression against the Syrian state, killing hundreds of Syrian Army soldiers (and instances of Russian mercenaries killed, though they were not under orders by Moscow) during multiple incidents near front lines in Deir Ezzor.And now, as Gen. Raymond Thomas, head of U.S. Special Operations Command, recently stated at an intelligence and military tech conference, Syria has become "the most aggressive [electronic warfare] environment on the planet."He said of Russian, Iranian, and Syrian "adversaries": "They are testing us every day, knocking our communications down, disabling our EC-130s [the Air Force's large Airborne Battlefield Command and Control Center aircraft]."Foreign Policy (FP) indicates that electronic jamming by Russian forces signifies an "escalatory" threat in an already confused environment given the broad array of groups and state actors operating in Syria.

        Are We About to Witness the Last Battle of the Syrian War? -- For three years, Idlib has been the dumping ground for all of Syria’s retreating Islamist militias, the final redoubt of every combatant who has chosen to fight on, rather than surrender to the Syrian army and the Russian air force – and to Hezbollah and, to a far smaller degree, the Iranians. Brigadier general Suheil al-Hassan, the “Tiger” of Syrian military legend and myth – who can quote the poet Mutanabi by heart but prefers to be compared to Erwin Rommel rather than Bernard Montgomery – will surely take his “Tiger Forces” with him for the final reckoning between the Damascus regime and the Salafist-inspired and western-armed Islamists who dared to try, and very definitely failed, to destroy Bashar al-Assad’s rule.  Thanks to Donald Trump, it’s all over for the “rebels” of Syria because they have been betrayed by the Americans – surely and finally by Trump himself in those secret discussions with Vladimir Putin in Helsinki, perhaps the most important of the “unknowns” of that translators-only chat – as they have by the Gulf Arabs.  Three weeks earlier, the Americans had told the rebels of southwestern Syria below the Israeli-occupied Golan Heights that they were on their own, and could expect no more military assistance. Even the White Helmets, the first-responder heroes or propagandists of the rebel war (take your pick, but be sure they will soon be described as “controversial”) have been rescued with their families from the rebel lines by the Israelis and dispatched to safety in Jordan.

        China's Military To Help Assad Retake Rest Of Syrian Territory, Ambassador Suggests - The Chinese Ambassador to Syria, Qi Qianjin, has shocked Middle East pundits and observers with statements this week indicating the Chinese military may directly assist the Syrian Army in an upcoming major offensive on jihadist-held Idlib province.The "[Chinese] military is willing to participate in some way alongside the Syrian army that is fighting the terrorists in Idlib and in any other part of Syria," the ambassador said in an interview with the pro-government daily newspaper Al-Watan, subsequently translated by The Middle East Media Research Institute (MEMRI). Substantial rumors from pro-Damascus sources of a major Syrian-Russian led offensive to take back Idlib, held since 2015 by a Nusra Front dominated coalition (since rebranding itself as Hayat Tahrir al-Sham/HTS), have been swirling since the now successful Assad campaign to take back the whole of the south was initiated, and these sources indicate the battle could begin as early as September.But crucially, Idlib province is now the ground zero gathering point of nearly all jihadist and ISIS factions remaining in Syria, including foreign fighters. According to some estimates there are upwards of 40,000 armed jihadists within the main anti-Assad factions in Idlib, embedded within a population of about 2 million civilians and internally displaced persons (IDP's). Thus the coming battle for Idlib is expected to be among the most bloody and grinding of the entire seven years of war, similar to Aleppo in 2016. China is chiefly interested in allying with Syrian government forces to root out the significant component of Chinese Muslim foreign fighters operating in Idlib. The hardline Islamist Uyghur militants have entered Syria in the thousands over the past few years from the western Chinese province of Xinjiang, where the minority ethno-religious group has found itself under increased persecution and oversight by the state.

        ‘Our life is hell’: Iraq’s IDPs suffer interminable wait for home -- For Hend Ali, there was no other option but to stay put. The 36-year-old mother of six has been living for three years now at al-Khadra, a camp for internally displaced persons (IDPs) tucked behind blocks of dilapidated apartment buildings in Iraq's capital, Baghdad. Like many others across the country, Hend was forced to flee her home in 2015 as military operations and ISIL attacks escalated after the armed group's fighters swept through Iraq, occupying one-third of its territory. Following Baghdad's victory over ISIL last year, the families in the camp, which numbered in the hundreds in 2016, were expected to return to their homes. But dozens of them, including Ali's, had nothing to go back to. "I visited my home three months ago, but everything was destroyed," says Hend, recalling her trip to al-Qa'im town in Anbar province. "The walls and windows are gone. The foundations [of the house] are gone. It's just part of the roof that remains." The devastation, poverty and a lack of services in the recaptured areas forced Hend, like many other displaced Iraqis, to choose the lesser of two evils and stay in the camp. "I came back to the camp because there was nothing [in Anbar]," she says. "[There's] no water, no electricity, and no work." 

        Israel bans entry of fuel and gas into besieged Gaza Strip -- The step comes weeks after Israel closed sole commercial crossing in retaliation to burning kites launched from Gaza. Israel has blocked the supply of fuel and gas to the besieged Gaza Strip, saying it was in retaliation over Palestinians setting fire to Israeli land, local media reported. Minister of Defence Avigdor Lieberman ordered the halt in fuel shipments via the partially sealed off Karem Abu Salem commercial border crossing. The decision, which came into effect on Thursday, will continue until further notice. Al Jazeera's Stefanie Dekker, reporting from Gaza, said at least 19 fires were reported by Israel on Wednesday. The move was to place "pressure on the leadership here to stop the incendiary kites and balloons," Dekker said, referring to Hamas - the group that governs the Gaza Strip. On July 9, Israel shut down the sole commercial crossing to the besieged Palestinian territory, cutting the supply of essential commodities to the nearly two million residents. The move only allowed for the transfer of humanitarian needs such as cooking gas as well as wheat and flour into Gaza, an official responsible for coordinating the movement of cargo through the border confirmed to Al Jazeera last month. The closure also affected Gaza's exports, further straining an already crippled economy brought to its knees by the 12-year blockade.

        Ahed Tamimi’s Bravery Exposes Israeli, US Cowardice (Real news Network, interview and transcript) Palestinian teenager Ahed Tamimi is free after eight months in an Israeli prison. While her bravery in confronting occupying Israeli soldiers has been celebrated around the world, Western media outlets have gone to great lengths to portray her as an aggressor. We speak to Ali Abunimah of the Electronic Intifada

        Be Suspicious Of Everyone Who Habitually Defends The Powerful From The Weak --Caitlin Johnstone Teenage Palestinian civil rights icon Ahed Tamimi was released from an Israeli prison yesterday. Viral images of Tamimi standing up to the Israeli armed forces who’ve brutalized her family have made her a powerful symbol of the greater Palestinian struggle for justice against a vastly more powerful oppressor.m The Palestinian issue is not complicated, and it is not difficult to see who is in the wrong in the debate about it. Anyone who says otherwise is advocating for the powerful against the disempowered. In addition to being an extremely well-funded military and nuclear power whose immense network of allies includes the United States, which has the most deadly military force the world has ever seen, the Israeli government also enjoys support from virtually all mainstream political and media voices in the western world. And what do the Palestinians have? Kites. Kites and rocks. There is a very clear and undeniable power discrepancy here. Generally speaking, whenever you see people loudly and habitually advocating for the powerful side of a power discrepancy, they are showing you that they are servants of power. Their interest is not in truth, justice or compassion, but in helping power maintain itself. Being aware of this gives you a very useful tool for navigating a confusing media landscape that is immersed in propaganda, spin, and disinformation. This applies across the board. When you see anyone advocating on behalf of the US empire against the latest Official Bad Guy Nation, when you see them advocating on behalf of the plutocrat-owned mass media machine against alternative media outlets, when you see them advocating on behalf of the Pentagon, the CIA and the Democratic Party against Julian Assange, when you see them advocating on behalf of fossil fuel companies against indigenous protesters, when you see them advocating on behalf of America’s increasingly militarized police force against unarmed black men, when you see them advocating on behalf of the wealthy against the poor, when you see them advocating on behalf of the status quo against activists and organizations pushing for change, they are giving you valuable information about themselves.

        Lira Plunges, Turkish Yields Hit Record High After Court Rejects Appeal To Release US Pastor - Commenting on the ongoing drama involving arrested American Pastor, Andrew Brunson, who is currently under house arrest in Turkey after being imprisoned for almost two years on charges of participation in a 2016 coup attempt, Trump's attorney Jay Sekulow tweeted overnight that "We won’t stop fighting until the pastor is safely home in America"American #PastorAndrew was removed from his Turkish prison cell & returned to his house in #Turkey. Sign & RT. We won’t stop fighting until the pastor is safely home in America:— Jay Sekulow (@JaySekulow) July 30, 2018     And perhaps sensing that the Erdogan administration would need to cave on this matter, if it hopes to stop angering Donald Trump, the market pushed the Turkish Lira higher in recent days, expecting some normalization in diplomatic relations between the two nations.Well, it was not meant to be, because moments ago a Turkish court rejected an appeal Brunson's lawyers to be released and for his travel ban to be lifted, Turkey's Sabah newspaper reported.As a result Brunson will remain under house arrest and under a travel ban, and Trump will continue threatening with imposing imminent sanctions on Ankara until one day he finally does.And in separate news, overnight the Turkish central bank highest its 2018 inflation estimate by more than 50% as the Turkish economy implodes, and now expects 13.4% inflation vs 8.4% previously.As a result of the latest Brunson news, and coupled with the country's soaring inflation, not only has the lira tumbled, dropping as low as 4.92...

        Egyptian poet gets three years in prison for allegedly insulting soldiers -- An Egyptian military court has sentenced a poet to three years in prison for writing a book of poetry allegedly criticising the Egyptian army, his lawyer told Egyptian media on Tuesday. Galal al-Behairy was found guilty of blasphemy, publishing “false news” and “insulting the military establishment” and fined $560.His lawyer, Mokhtar Mounir, said he would appeal the decision, adding that his client was also facing a simultaneous trial at a civilian court over the same charges. Behairy had previously written two books, published in 2015 and 2017. He was arrested on 3 March after the release of Balaha, a song that indirectly poked fun at Egyptian President Abdel Fattah al-Sisi, the former defence minister who came to power after a military coup in 2013. The singer who performed Balaha, Ramy Essam, is currently in exile in Sweden. "Balaha" is a derogatory nickname for Sisi, in reference to a character from a classic Egyptian movie known for being a compulsive liar. "O Balaha, four years have finally passed in disgrace / With all your gang boys to that darkest jail, I wish you may rot in such a place," Essam sings.Behairy had planned to publish his latest collection of poetry, The Finest Women on Earth, this year. The title of the book was interpreted by the prosecution as alluding to Egyptian soldiers, who are referred to in a hadith by Prophet Muhammad as “the finest soldiers on earth”. The Arabic title of Behairy's book uses the term niswan for "women," a word which has derogatory connotations in Egypt implying weakness and submissiveness.

        Egypt Court Sentences 75 To Death Over 2013 Sit-In — An Egyptian court sentenced 75 people to death on Saturday, including top figures of the outlawed Muslim Brotherhood group, for their involvement in a 2013 sit-in, state media reported. The Cairo Criminal Court referred the sentences to the Grand Mufti — the country’s top theological authority — for his non-binding opinion as is the norm in capital cases. Though non-binding, the formality gives a window of opportunity for a judge to reverse an initial sentence. The sentences are subject to appeal. Sentencing for more than 660 others involved in the case was scheduled for Sept. 8, the Al-Ahram news website reported. Those sentences, too, are subject to appeal. Of the 75 defendants referred to the Mufti, 44 are jailed and 31 are at large. The court normally hands down the maximum sentence for fugitives but a re-retrial is typically held after they are caught. The case involves a total 739 defendants, including the Muslim Brotherhood’s Supreme Guide Mohammed Badie and photojournalist Mahmoud Abu Zeid. The charges range from murder to damaging public property. Neither Badie nor Abu Zeid were sentenced to death in this case. The 2013 sit-in, in Rabaa al-Adawiya Square in Cairo, supported former Islamist President Mohammed Morsi who was militarily ousted following mass protests against his divisive one-year rule. Morsi hailed from the Brotherhood. The sit-in was violently dispersed on Aug. 14, 2013. More than 600 people were killed. Months later, Egypt designated the Brotherhood a terrorist organization. 

          China manufacturing weakens as economy slows and tariffs bite – Chinese factory activity has taken another step down, hit by a combination of a slowing domestic economy, the imposition of US tariffs and poor weather. The official manufacturing Purchasing Managers' Index fell more sharply than expected in July, although overall manufacturing activity expanded slightly. The PMI dropped from 51.5 to 51.2, with a reading of 50 separating expansion from contraction. Readings of both output and new orders both fell, pointing to a slowing domestic demand. Perhaps surprisingly, the measure of export orders was relatively steady in one of the first measures since the US escalated its trade dispute with China and broadened its tariff regime. However new export orders did remain in contractionary territory. Falling yuan offsets US tariffs Capital Economics's Julian Evans-Pritchard said it appears the impact of the first tranche of US tariffs that came into effect this month is being largely offset by a weaker Chinese currency. "Instead, weaker domestic demand appears to be to blame for the lower PMI reading — the import component fell to a 23-month low and the price indices point to an easing of producer price inflation in July," Mr Evans-Pritchard said.

        China still focused on reducing debt, creating jobs despite trade row with United States -China will remain focused on reducing debt and creating jobs despite the “clear changes” in the external economic environment, the nation’s top decision making body said on Tuesday in what was most likely a reference to its ongoing trade dispute with the United States.The statement, made on state television, came after a meeting of the Politburo, which also declared that growth was still on track.China reported 6.8 per cent growth for the first half of 2018, but pressure on the world’s second-largest economy is growing due to its heavy debt burden and rising trade hostilities with the United States. The government will also deepen its “structural supply side reforms” in the second half of the year and “firmly” continue deleveraging – two of the hallmarks of President Xi Jinping’s economic policy – the statement said.

        Commodities may be first to show real impact of Trump-China trade war (Reuters) - The Phoney War stage of U.S. President Donald Trump’s trade dispute with China may be ending, with economic indicators and commodity flows and prices starting to show real world effects. The latest signal that China’s economy may be feeling some pain associated with Trump’s tariffs on about $34 billion in Chinese goods was the softening of the Purchasing Managers’ Index (PMI) in July. While the overall drop to 50.8 in July from June’s 51.0 was small, of bigger concern was the slump in the subindex for new export orders, which dropped to 48.4, a fourth consecutive monthly decline. The drop in the PMI, a key indicator of manufacturing health in the world’s second-largest economy, came as Trump’s administration proposed a 25 percent tariff on another $200 billion in Chinese goods, up from an earlier 10 percent plan. U.S. Trade Representative Robert Lighthizer said in a statement on Wednesday that Trump directed the increase from the previously proposed duty because China has refused to meet U.S. demands and imposed retaliatory tariffs on U.S. goods. While a poor PMI for one month doesn’t necessarily signal a new trend, it does highlight the risk that the trade dispute is starting to hit economic growth. As early indicators of global economic health and trade flows, movements in commodity prices and volumes can be instructive. The temptation is always to look first at copper, given its correlation with both manufacturing and construction. London Metal Exchange copper futures have been trending lower since reaching their peak for this year so far in early June, closing at $6,172 a tonne on Wednesday. This is down almost 16 percent from the June peak, a period that coincides with the ramping up of tariffs by the United States, coupled with increasingly bellicose rhetoric. China’s appetite for imported copper has yet to falter, however, with first-half imports of unwrought copper up 16.3 percent from a year ago, according to Chinese customs data. In fact, the rate of growth in the first half well exceeded the 3.6 percent increase in imports of copper in the first half of 2017, showing that not only is China importing more of the industrial metal, it’s doing so at a faster pace. The strong copper imports may seem contradictory to the weak prices, although it’s likely that the market has been dropping mainly on sentiment, rather than on supply and demand. 

        A Record 18% Of China's GDP Goes To Debt Service - Think China's new "proactive" fiscal policy shigt will be sufficient to kick start the local economy, and boost global GDP? Think again. In the latest analysis from Vertical Group's Gordon Johnson, the strategist writes "that China's proactive fiscal policy pledge could fall short as servicing its existing credit stock absorbs an increasing share of GDP." As a reminder, last week, China’s State Council said it will adopt a proactive fiscal policy, outlining ways to fund ¥1.4tn in bonds to local government for infrastructure & provide ¥1.1tn in tax cuts, among other actions (e.g., R&D tax credits), all while urging no broad-based stimulus. In Johnson's view, this is a narrative that is rather reminiscent of ‘14, when the gov’t unleashed a wave of “micro-stimulus” measures after a string of weak data points (i.e., 5 mos. of contracting real estate investment). Yet, as he notes, the most recent PBoC mini-stimulus is much smaller than ‘14, while key restrictions remain in place for real estate/shadow loans (historically growth-driving conduits), compounded by the law of diminishing returns, suggesting a smaller boost from a much larger base this time around. Moreover, China’s total credit stock is markedly higher now than in ’14, implying more of every yuan in stimulus is going to service outstanding debt. How much? That may well be the critical question to gauge the flow through from any new fiscal policy. Here is Vertical Group's answer: While China exited ’17 with an est. 266% of total credit to GDP, some economists put that ratio at >300% today. On trailing 12-mo. nominal GDP of ¥86.5tn, as of 2Q, this equates to >¥259.5tn in credit, which, assuming an avg. borrowing cost of 6%, means China’s annual debt service is ~¥14.3tn, or 18.0% of GDP – sensitizing interest & credit-to-GDP, to a respective range of 4-7% & 285-320%, puts China’s debt service at 14-22% of GDP. 

        China Is About To Report Its First Ever H1 Current Account Deficit: Why It Matters -  In what may represent a historic change to China's mercantilist economy, recently we noted that in the first quarter of 2018, China had recorded its first current account deficit this century.Now, in a note from Deutsche Bank that explains the bank's justification to revise its USDCNH forecast higher (now expecting the Yuan to drop to 7.40 against the dollar versus 6.90 previously), the bank picks up on this observation and as chief China economist Zhiwei Zhang writes, China had a current account deficit of US$ 34bn in Q1, the first quarterly current account deficit since 2001 Q2.He then goes on to preview that the current account balance for Q2 will be released on Aug 6, and while the monthly balance of payments data suggest that China likely has a surplus in Q2, it will be much smaller than the past years."Consequently the current account balance in H1 has likely turned into a deficit", Deutsche Bank predicts.Here are the details:the monthly data release shows China’s balance of goods and service trade recorded a surplus of US$ 31 bn in Q2 after a large deficit of US$21 bn in Q1 ( Figure 1 ). Growth of goods exports slowed in H1 to 11% while import growth surged to 20%. The service trade deficit widened to US$149 bn in H1 from the five year average of US$90 bn ( Figure 2 ). The Q2 income balance in the current account has not been released. To turn the current account in H1 into surplus the income balance needs to show a surplus of at least 3bn in Q2 which is quite unlikely, as it has been in deficit for most of the past three years ( Figure 3 ).

        Google Plans to Launch Censored Search Engine in China, Leaked Documents Reveal -- Google is planning to launch a censored version of its search engine in China that will blacklist websites and search terms about human rights, democracy, religion, and peaceful protest, The Intercept can reveal. The project – code-named Dragonfly – has been underway since spring of last year, and accelerated following a December 2017 meeting between Google’s CEO Sundar Pichai and a top Chinese government official, according to internal Google documents and people familiar with the plans. Teams of programmers and engineers at Google have created a custom Android app, different versions of which have been named “Maotai” and “Longfei.” The app has already been demonstrated to the Chinese government; the finalized version could be launched in the next six to nine months, pending approval from Chinese officials. The planned move represents a dramatic shift in Google’s policy on China and will mark the first time in almost a decade that the internet giant has operated its search engine in the country. Google’s search service cannot currently be accessed by most internet users in China because it is blocked by the country’s so-called Great Firewall. The app Google is building for China will comply with the country’s strict censorship laws, restricting access to content that Xi Jinping’s Communist Party regime deems unfavorable. 

        Fake data – the disease afflicting China’s vaccine system -  China’s vaccine production and distribution system is beset by fake data and fraudulent labelling, raising the risk of outbreaks of highly transmissible diseases, according to industry insiders and health experts. The assessment comes after Changchun Changsheng Bio-technology last week became the latest Chinese pharmaceutical company to embroiled in a vaccine scandal. According to the State Drug Administration, Changsheng Bio-tech forged data on the effectiveness of its rabies vaccines and sold substandard DPT (diphtheria, whooping cough and tetanus) shots for children as young as three months old. The revelations undermine China’s claims to have established a world-class “whole-life cycle regulation system”, controlling the research, production, distribution and administration of vaccines. Compulsory vaccines such as DPT are given to children under a state-sponsored health programme through hospitals and the country’s 3,500 or so local disease control centres for free, with domestic producers supplying about 95 per cent of the injections. Optional vaccines such as hepatitis B and influenza shots are provided mainly on a commercial basis.While there are no official figures or reliable independent assessments about the full extent of the problems, past cases have pointed to fraud throughout the vaccine supply chain in China, from laboratories to vaccination centres. The head of one disease control centre for about half a million people said problems with the quality of vaccines had existed for a long time and “everyone inside the loop knows it”. 

        Rival Koreas’ generals discuss easing military confrontation (AP) — Rare general-level talks between the two Koreas ended with no agreement Tuesday, but the top delegates said they had a meaningful discussion on easing their countries' decades-long military standoff. Experts said it was still unclear whether the rivals can reach any breakthrough agreement on reducing tensions in the near future because South Korea, in close consultations with the United States, must link any expansion of ties to progress in North Korea's nuclear disarmament. The Washington Post reported Monday that U.S. intelligence agencies have obtained evidence that indicates North Korea is building new long-range missiles despite ongoing disarmament talks with the United States. It cited anonymous officials "familiar with the intelligence" as saying that work on at least one and possibly two intercontinental ballistic missiles was underway. Tuesday's meeting at the Koreas' shared border village of Panmunjom was the second such high-level military contact since the two countries' leaders held a landmark summit in April and pledged to reduce the danger of another war on the peninsula. The chief South Korean delegate, Maj. Gen. Kim Do Gyun, said the two sides had a common view in principle on disarming a jointly controlled area at Panmunjom, removing some guard posts from the Demilitarized Zone that bisects the countries, halting hostile acts along their disputed sea boundary, and conducting joint searches for soldiers missing from the 1950-53 Korean War in DMZ areas. He said the Koreas will continue talks on details of the issues, according to Seoul's Defense Ministry. Kim described Tuesday's talks as "sincere" and "candid," saying he believes the two militaries could contribute to establishing a lasting peace between the countries. His North Korean counterpart, Lt. Gen. An Ik San, said the talks were "productive" and that he also believes many pending military issues can be resolved.  

         Korea moving to tax Google, Apple, Amazon 0 The government will move quickly to impose taxes on Google, Apple, Amazon and other global IT companies. This follows policymakers and lawmakers paying greater attention to growing criticism that the firms earn billions of dollars in sales here annually but pay no taxes. Naver, Kakao and other domestic companies have been complaining for years about "an uneven playing field," arguing their foreign rivals should pay corporate income tax on the revenue they generate in Korea. Under the law, the government is unable to tax global companies as it is not mandatory for them to disclose their sales and operating profit here. The Corporate Tax Act stipulates that global companies must pay taxes when they have fixed places of business in Korea. This law has provided global companies with an excuse to avoid taxes while they expand their businesses rapidly here as their bases are established in other countries such as the United States, China and Ireland. This has provoked criticism that these companies are contributing little to Korea through taxes and corporate social responsibility activities although they are doing business here on a large scale. Amazon is one of the global IT firms actively targeting the Korean market as it has recently begun the free shipment of goods purchased by customers here. Google and Apple are gaining huge profits through the sales of apps, with the former actively expanding its businesses here by, for example, launching its in-car infotainment application Android Auto.

        China donates warships to Sri Lanka and Philippines in drive to expand regional influence -- China will donate warships to Sri Lanka and the Philippines in the latest effort to boost its military influence in the Indo-Pacific region. The gift of a frigate to Sri Lanka was announced last week by Senior Colonel Xu Jianwei, military attaché at the Chinese embassy in Colombo, while Philippine naval spokesman Commander Jonathan Zata confirmed the donation of four new patrol boats from Beijing on Sunday. The People’s Liberation Army will also provide “various training” to the Sri Lankan military and build an auditorium complex at the Sri Lanka Military Academy, Xu told an event last Monday, the Colombo Gazette reported. On Sunday Zata said China would also give the Philippines 200 rocket propelled grenade launchers and ammunition, the Philippine Daily Inquirer reported.Despite the unresolved South China Sea dispute with Manila, China has offered military aid worth US$14 million in small arms and fast boats to the Philippines, and donated thousands of rifles and ammunition to the Philippine police and military for counter terrorist purposes. China’s efforts to expand its military presence in the region have caused concern in India, which fears that it may use Sri Lanka’s Hambantota Port for military purposes even though the concession contract that handed control to a Chinese firm last year prohibits this.

        Mike Pompeo’s Plan to Deny China Exclusive Rights to the Indo-Pacific Region -- When Secretary of State Mike Pompeo opened the U.S. Chamber of Commerce’s Indo-Pacific Business Forum Monday morning, he stressed the strategic importance of maintaining a “free and open” Indo-Pacific region. And he made it clear that when the United States says “free and open,” it means it. “When we say free, it means we want all nations to be able to protect their sovereignty from coercion . . .  when we say open, it means we want all nations to be able to enjoy open access to seas and airways.”  And he might have added: the internet. Of course, there’s one country in the Indo-Pacific that has a notoriously closed internet. China’s great firewall is a black hole at the heart of the Indo-Pacific internet. Chinese internet companies like Alibaba and Tencent are eager to expand throughout the region, but the Chinese government keeps its home market firmly closed. Pompeo announced a $25 million initial investment for a digital connectivity and cyber-security partnership to help develop internet infrastructure in the region. Financially, that’s small potatoes compared to China’s massive Belt and Road Initiative. But China’s program focuses on linking Indo-Pacific countries to China. The U.S. program is about opening the Indo-Pacific to the world.

        JPMorgan: QE Might Have Devastating Consequences After All  --According to JPM's Nick Panigirtzoglou, it was last week's report that the BoJ has expressed concerns over negative side effects of its QE current policies (especially keeping the 10Y yield fixed around 0%), and which resulted in a sharp, if brief, global bond steepening which demonstrated once  again just how dominant central bank monetization policies are in determining the long-end of the curve. And, as the market demonstrated, a hawkish policy shift and a subsequent reduction in duration absorption by the BoJ would intensify the quantitative tightening already in place by the Fed and the ECB, and according to JPM represents "a significant tail risk that has generated intense debate among our clients." Here is a list of the key negative consequences arising from QE, from JPMorgan:

        • 1. Results in Asset Bubbles and a Collapse in CapEx: Even as QE has likely exerted downward pressure on bond yields, the significant increase in central banks’ balance sheets makes an exit potentially more difficult, and raises the risk of a policy error or of an increase in perceptions about debt monetization. It potentially creates asset bubbles by lowering asset yields relative to historical norms, that an eventual return to normality could be accompanied by sharp price declines.
        • 2. Creates Zombie Companies and Crushes Productivity. Low credit spreads and corporate bond yields are an intended consequence of QE but not without distortions. By allowing unproductive and inefficient companies to survive, helped by low debt servicing costs, QE could potentially hinder the creative destruction taking place during a normal economic cycle. In principle, QE could thus make economies less efficient or productive over time.
        • 3. Low Rates crush savers, make the rich richer. One of the most visible impacts of QE has been the decline in discount rates, which in turn has created wealth effects via supporting asset prices. However, an argument could be made that these wealth effects are not evenly distributed, and that low discount rates mean savers suffer from an erosion of income.
        • 4. Exacerbates currency wars. QE could exacerbate so called “currency wars”. The value of the Japanese yen collapsed after Abenomics started in November 2012 and has stayed at historical lows since then helped by BoJ's ultra accommodative monetary policy. This is shown in Figure 5 by the real trade weighted index of the Japanese yen.

        Thailand mends US military ties after post-coup tilt to China - Gen. Apirat Kongsompong, the officer tipped to become Thailand's next army chief, is poised to turn a fresh page in Thai-U.S. military relations. Apirat's long ties with the U.S. make him an ally, say Western diplomats, who believe bonds between the two countries are on the mend after serious stress in the wake of a coup in 2014. Despite the evident warming toward the U.S., the coup-installed government of Prime Minister Prayuth Chan-ocha is expected to also continue seeking defense cooperation with China, which stepped up arms supplies after the coup. The swing toward China in 2014 was led by Deputy Prime Minister Prawit Wongsuwan, who is also defense minister, and backed by a pro-China lobby of retired generals. Apirat is believed to top the list of generals being reviewed by the Defense Council ahead of the annual military reshuffle that will be made public in September after receiving royal assent. As deputy army chief, Apirat has been handling logistics, ordnance, and procurement. He oversaw a recent military deal with the U.S. worth $261 million that included Black Hawk helicopters. His impending term as army chief is expected to contain the pro-China lobby in the Thai military led by Prawit.

        Cambodia’s ruling party says it won all 125 parliamentary seats – Reuters - (Reuters) - The ruling Cambodian People’s Party (CPP) said on Monday it had won all 125 parliamentary seats up for grabs in a general election that critics have called a sham.   “The CPP won 77.5 percent of the votes and won all the parliamentary seats,” CPP spokesman Sok Eysan told Reuters by telephone. On Sunday the CPP said it had won “at least” 100 seats.  The White House said it would consider steps, including an expansion of visa curbs on some Cambodian government members, in response to “flawed elections” in which Prime Minister Hun Sen faced no significant challenger.

        World’s Biggest Toilet-Building Spree Is Under Way in India -- India is on the greatest toilet-building spree in human history, and it’s a windfall for companies.  Prime Minister Narendra Modi’s $20 billion “Clean India” mission aims to construct 111 million latrines in five years. Besides promising to improve the health, safety and dignity of hundreds of millions of Indians, the national hygiene drive has spurred an 81 percent jump in sales of concrete building materials and 48 percent increase in bathroom and sanitaryware sales, according to Euromonitor International. That’s benefiting firms from Tata Group, the nation’s largest conglomerate, to cleaning-products maker Reckitt Benckiser Group Plc.  Almost 80 million household toilets are estimated to have been built since Modi’s 2014 pledge to ensure universal sanitation coverage by October 2019, which will mark 150 years since the birth of independence leader Mahatma Gandhi. The scale-up of latrines and a nationwide campaign to encourage their use is driving a market for toilet-related products and services that’s predicted to double to $62 billion by 2021. “It’s the biggest, most successful behavior-change campaign in the world,” said Val Curtis, director of the London School of Hygiene and Tropical Medicine’s Environmental Health Group, who has worked on the program in India. “Every time I go there, I feel like I can’t sit down for weeks after because I’m excited about what they’re doing. It’s incredible.”

        Assam: Millions risk losing India citizenship - BBC -- India has published a list which effectively strips about four million people in the north-eastern state of Assam of their citizenship. The National Register of Citizens (NRC) is a list of people who can prove they came to the state by 24 March 1971, a day before neighbouring Bangladesh declared independence.India says the process is needed to identify illegal Bangladeshi migrants.But it has sparked fears of a witch hunt against Assam's ethnic minorities.Fearing violence, officials say that no-one will face immediate deportation.They say that a lengthy appeal process will be available to all - even if it means millions of families will live in limbo until they get a final decision on their legal status. Millions of people fled to neighbouring India after Bangladesh declared itself an independent country from Pakistan on 26 March 1971, sparking a bitter war. Many of the refugees settled in Assam.Under the Assam Accord, an agreement signed by then PM Rajiv Gandhi in 1985, all those who cannot prove that they came to the north-eastern state before 24 March 1971 will be deleted from electoral rolls and expelled as they are not considered legitimate citizens. More than 32 million people submitted documents to the NRC to prove they were citizens, but four million of them have been excluded from the published list.

        India excludes four million from draft citizenship list --  The names of about four million people in India's Assam state are not included in the final draft list of citizens published by authorities on Monday.The draft list, called the National Register of Citizens (NRC), was announced on Monday by the Registrar General of India (RGI), which said that out of the 32.9 million population of the border state, 28.9 million names were included in the final draft of the NRC."No genuine Indian citizens need to worry as there will be ample opportunities given to them to enlist their names in the final list," Shailesh, the registrar general of India, told reporters Guwahati city.The definitive list will be announced in December.In the first list announced on December 31, 2017, 19 million people were designated as legal citizens.The NRC has been updated after nearly seven decades as part of a campaign to identify undocumented immigrants from Bangladesh, but critics say those who are not included on the list may be rendered stateless. The list can be checked online or by visiting one of the 2,500 NRC Seva Kendras (service centres) set up across the state. The results can also be accessed via SMS on request.

        What's next for the 4 million stripped of citizenship in India? --India has effectively stripped four million people in Assam of citizenship, sparking fears of mass deportations of Muslims from the northeastern state.But authorities assured that those who could not make it to the draft list will not face "immediate deportation or be arrested". People will be given time to file for corrections, Indian officials said.The definitive list will be announced in December.The National Register of Citizens (NRC) published its final draft of citizens on Monday, and ruled that of the 32.9 million population of the state, only 28.9 million names were included in the final draft.The right-wing Bharatiya Janata Party (BJP) of Prime Minister Narendra Modi came to power on the promise to expel the so-called "illegal foreigners" and protect the rights of indigenous groups. Critics say the move to strip the citizenship of Bengali origin people, most of whom are Muslims, is similar to Myanmar's removal of rights and protections for its Rohingya community. Muslims form one-third of the state's population.  Unique to Assam state, the NRC document was prepared in 1951 to distinguish Indian citizens from undocumented immigrants from what was then East Pakistan (which later became Bangladesh in 1971).Assam has witnessed prolonged protests against so-called foreigners, which includes both Hindus and Muslims. The arrival of millions of refugees to Assam in 1971 - when Bangladesh seceded from Pakistan after a bloody civil war - brought the issue of these so-called foreigners into national focus.

        Pakistan Elections 2018: PTI Prevails Over Corrupt Dynastic Political Elite - Millions of passionate young and women enthusiastically voted for Pakistan Tehreek e Insaf led by cricket legend Imran Khan to help PTI win against corrupt dynastic political parties in July 25, 2018 elections. Scores of dynastic politicians lost their legislative seats in this election in Khyber Pakhtunkhwa and Punjab provinces. This election came to represent a generational shift in many families in which parents reliably voted for the “electables” based on biradries (clans) and feudal affiliations. It is a resounding rejection of old feudal politics in large parts of the country. The only exception to this change is probably rural Sindh where the dynastic Pakistan Peoples' Party gained seats. Pakistan's 46 million young voters of ages 18-36 years, up from 41 million in 2013, made the biggest impact on the outcome of the elections this year, according to data from the Election Commission of Pakistan.  The enthusiasm of PTI's young supporters was on full displayed at many large PTI pre-election rallies addressed by Imran Khan. These rallies set a new standard  with lots of lighting, singing, music and dancing by hundreds of thousands of boys and girls across Pakistan.  Millions of smartphone wielding young voters were seen following the politicians while streaming live footage of what a newspaper report described as "something extraordinary: angry voters asking their elected representatives what have they done for them lately".  Here's an excerpt of a report by South China Morning Post (SCMP): “Where were you during the last five years?” they ask (Sikandar Hayat) Bosan, complaining about the poor state of roads in the area. An aide can be heard pleading that the leader is feeling unwell. To be held accountable in such a public manner is virtually unheard of for most Pakistani politicians, especially in rural areas where many of the videos have been filmed. There feudal landowners, village elders and religious leaders have for decades been elected unopposed. Many are known to use their power over residents to bend them to their will."

        ‘Western’ Press Dislikes Imran Khan’s Win In Pakistan’s Election --Imran Khan election win in Pakistan receives a hostile reaction in U.S. and British media. The headlines are generally negative and the descriptions of Imran cast a damning light of him. From the New York Times print edition front page: The word "Pakistan" was probably too long for the valuable front-page space. Thus the NYT shortened it to "Nuclear-Armed Islamic Republic". The attribute "unpredictable" for Imran Khan is curious. (If one cuts out the "Islamic" the headline fits to Trump's election victory. Was that the intended joke?)  The piece by Jeffrey Gettleman repeats the "unpredictable" claim: Friends and foes describe Mr. Khan, 65, as relentless, charming, swaggering and highly unpredictable. But there is no evidence, not one example in the piece that supports that attribute. It describes how he, in the late 90s, entered politics: Mr. Khan seized on a single issue: governance. ... He focused on corruption, repeatedly stating that a few political dynasties had shamelessly enriched themselves. ... [H]e seemed adept at not letting the gossip pages distract him, and he kept hammering on about corruption. Corruption was also a main theme of his recent campaign. Imran's anti-corruption position has been a constant. His opposition to the U.S. war of terror also never changed. There is not one "unpredictable" bit in his political positions. Where then did that come from? Only in the very last paragraph that word returns:Many analysts wonder how long Mr. Khan’s friendship with the military will last. “He is known to have erratic behavior and a very unpredictable personality,” said Taha Siddiqui, a journalist and critic of the military who recently moved to France, saying he feared for his safety.Siddiqui worked for an Indian TV channel and for France24. He has long been critical of Pakistan's military. In January he claimed that "he was attacked by up to a dozen men en route to the airport in Rawalpindi but managed to escape". He clearly dislikes that Imran Khan has good relations with Pakistan's military.  Why is that enough to make it in into a headline?

        U.S. Seeks to Avoid a Pakistan Bailout That Would Repay China - Pakistan’s growing debt to China is emerging as a point of contention with the U.S., with Islamabad rejecting Washington’s concerns Tuesday as the South Asian nation’s incoming leaders prepare to possibly seek an international financial bailout in the coming weeks. U.S. Secretary of State Mike Pompeo was asked on Monday about the issue of Chinese loans to Pakistan as part of China’s “Belt and Road” infrastructure program, if Pakistan approaches the International Monetary Fund for a bailout. The U.S. is the largest shareholder and contributor to the IMF, a multilateral international organization that loans money to governments to help them manage financial difficulties. “There’s no rationale for IMF tax dollars—and associated with that, American dollars that are part of the IMF funding—for those to go to bail out Chinese bondholders or—or China itself,” Mr. Pompeo said in an interview on CNBC. IMF funds generally go directly to a country’s central bank for use in managing foreign exchange shortfalls and stabilizing government finances. China has a $62 billion infrastructure building program for Pakistan, known as the China Pakistan Economic Corridor, of which some $19 billion, mostly in roads and power plants, is under way or completed. The projects are either financed by loans from China or, in the case of power stations, an obligation to buy the electricity produced for the next 30 years at a price that covers the financing of the plants and a return on the investment. “First and foremost it is totally wrong to link IMF package with CPEC. It is affirmed that Pakistan Government is fully committed to undertake and complete CPEC projects in their totality,” Pakistan’s Ministry of Finance said in response to Mr. Pompeo. “Third parties cannot weaken our collective resolve to make CPEC a success story.” Pakistani and Chinese officials have long suspected the U.S. of trying to undermine CPEC and other Belt and Road projects, which seek to extend Beijing’s influence through economic ties. Pakistan was a close U.S. ally, but it is increasingly reliant on China. While the U.S. has said it supports the Chinese program in Pakistan, it has also warned of “debt trap diplomacy” from the Belt and Road initiative more broadly.

        Who Needs The IMF: China Gives Pakistan $2 Billion Emergency Loan - Following a July 12 report from the Financial Times that senior Pakistani finance officials were drawing up options for Pakistan's new prime minister Imran Khan to seek an IMF bailout of up to $12 billion,  U.S. Secretary of State Mike Pompeo warned against providing an International Monetary Fund bailout for Pakistan's new government that includes funding to pay off Chinese lenders.In an interview on CNBC on July 30, Pompeo said the United States looked forward to engagement with the government of Pakistan's expected new prime minister, Imran Khan, but said there is "no rationale" for a bailout that pays off Chinese loans to Pakistan."Make no mistake. We will be watching what the IMF does," Pompeo said. "There's no rationale for IMF tax dollars, and associated with that American dollars that are part of the IMF funding, for those to go to bail out Chinese bondholders or China itself." As we reported last month, Pakistan's urgent need for the emergency cash comes as a result of a currency crisis that saw a devaluation of the Pakistan Rupee, as Pakistan burned through a third of its reserves in the past year..... forcing the central bank to institute soft capital controls and increasing the amount of red tape needed to access dollars. It has also presented the new government with its biggest challenge to date. Many analysts have recently said they expect that another IMF bailout, the second in five years, will be needed to plug an external financing gap.

        South Africa To Amend Constitution To Allow Land Expropriation From White Farmers Confirming long-running speculation that South Africa is on its way to becoming just another Zimbabwe, on Tuesday the country's president Cyril Ramaphose said the ruling African National Congress should initiate a parliamentary process to amend the constitution to allow for the expropriation of land without compensation.  Back in May, the ANC had said in May it would “test the argument” that land redistribution without compensation is permitted under current laws, a plan that would have avoided the risky strategy of trying to change the constitution. Since then the expropriation movement has only accelerated, and Ramaphosa, who also vowed previously to return the lands owned by the white farmers since the 1600s to the country's black population after he assumed office in February this year, said on Tuesday that the ANC would introduce a constitutional amendment in parliament. "The ANC will through the parliamentary process finalize the proposed amendment to the constitution that outlines more clearly the conditions under which expropriation of land without compensation can be effected” Ramaphosa, a prominent trade union leader and a close associate of Nelson Mandela, said in a televised address on Tuesday. The billionaire former businessman added that “it has become pertinently clear that our people want the constitution to be more explicit" about the expropriation proposal, which is viewed by the South African white minority as forceful expulsion that can incite violence against farmers. As Reuters notes, most land remains in white hands, making it a potent symbol of lingering inequalities 25 years on from the end of apartheid. Since white minority rule ended in 1994, the ANC has followed a “willing-seller, willing-buyer” model whereby the government buys white-owned farms for redistribution to blacks. Progress has been slow. There have been growing fears that the planned expropriation will deal a blow to commercial farming in the country and might put it on the verge of a food production crisis, like the one that struck Zimbabwe when it unleashed a similar crackdown on white farmers in 1999-2000.

        Canada is using ancestry DNA websites to help it deport people - In another example of the extraordinary lengths Canadian immigration officials go to deport migrants, the Canada Border Services Agency has been collecting their DNA and using ancestry websites to find and contact their distant relatives and establish their nationality. “I think it is a matter of public interest that border service agencies like the CBSA are able to obtain access to DNA results from sites like and,” said Subodh Bharati, a lawyer who is representing a man who says he’s Liberian, but who the government is now trying to prove is actually Nigerian. “There are clear privacy concerns. How is the CBSA able to access this information and what measures are being put in place to ensure this information remains confidential?” Bharati, who is representing his client through CLASP, the legal aid clinic at Osgoode Hall Law School, said he is aware of at least two individuals who used, one in the UK, who have been contacted by the CBSA seeking to deport someone from Canada. “Individuals using these sites to look at their family tree should be aware that their confidential information is being made available to the government and that border agents may contact them to help facilitate the deportation of migrants,” he said. Both companies deny working with law enforcement. Franklin Godwin, one of Bharati’s clients, who was accepted as a refugee from Liberia and granted permanent resident status in 1996, was charged two years later with importing and conspiring to import heroin and sentenced to seven years in jail. Because of the seriousness of his criminal convictions, Godwin’s permanent residence status was taken away and the government ordered him deported back to Liberia.

        Global factory growth slowing; China-U.S. trade war biting (Reuters) - Factory growth stuttered across the world in July, heightening concerns about the global economic outlook as an intensifying trade conflict between the United States and China sent shudders through trading partners. Global economic activity remains solid, but it has already passed its peak, according to economists polled by Reuters last month. They expect protectionist policies on trade - which show no signs of abating - to tap the brakes. But slowing growth, wilting confidence, and trade war fears are not likely to deter major central banks moving away from their ultra-loose monetary policies put in place during the last financial crisis. “Growth overall is still there, and while there are risks, it’s holding up. The big picture of a trade war and protectionism is that it is a slow death - a death by a thousand paper cuts instead of anything sudden and shocking,” . Last month, China and the United States imposed tit-for-tat tariffs on $34 billion of each other’s goods and another round of tariffs on $16 billion is expected in August. U.S. President Donald Trump’s administration, according to a source familiar with its plans, is poised to propose 25 percent tariffs on a further $200 billion of imports, up from an initial proposal of 10 percent. Its threat of tariffs on the entire $500 billion or so worth of goods imported from China still stands. Beijing has pledged equal retaliation, although it only imports about $130 billion of U.S. goods. World stocks fell and the dollar strengthened on Wednesday on fears of an imminent escalation in the U.S.-China tariff war. [MKTS/GLOB] Morgan Stanley analysts estimate an 81-basis-point impact on global growth in a scenario of 25 percent tariff hikes across all imports from China and Europe, with U.S. growth slowing by 1 percentage point and China’s by 1.5 points. 

        Taxcast: A Firewall to Protect EU Citizens from the Big Four Accountancy Firms and the Tax Avoidance Lobby -- In the July 2918 Taxcast:

        • we look at a proposal for a firewall to protect EU citizens from the Big Four accountancy firms and the tax avoidance lobby: we look at a new report from the Corporate Europe Observatory
        • we discuss UN Special Rapporteur on Extreme Poverty and Human Rights Professor Philip Alston’s announced visit to the UK to look at austerity and the human rights consequences: his report on the US was hard-hitting and controversial. What will he make of the UK?
        • and we look at Transparify’s 2018 think tank funding transparency rankings and talk about how opacity is the name of the game for many of the ‘free market’ lobby groups pushing for Brexit, deregulation, privatisation and tax havenry, such as the Institute for Economic Affairs.

        Featuring: Vicky Cann of the Corporate Europe Observatory, John Christensen of the Tax Justice Network.

        'Anonymous' Greece Takes Down Government Website Over Athens Fire Disaster Response - Cyber group Anonymous Greece have brought down the website of Greek government over the dozens of victims in the Athens wildfires. Access to the website “” was denied for a period of time and showed “Forbidden.” As reports, in a post on their Facebook page, Anonymous Greece sent their own message to the disaster. Expressing condolences for the victims, the group blamed the government for the unfair death of  more than 90 people. “Responsibility lies on the government that remained idle at the time of disaster and did not inform the citizens letting them burn alive,” the group argued.“It is obvious that nobody would have died had the state reacted in time. People didn’t know the fire was approaching and we came to the point to mourn more than 90 dead families and children,” the message read.The group claimed that “that was the goal” of the government. The group also criticized the attitude of the Church and especially Bishop Ieremias who claimed three days after the tragedy that the people who died in the fires “with their death they cleaned their sins.” “Dear Church, instead of offering help to the fire-stricken people you started accusing the citizens. ‘They were burned because of their sins’. What sins did the twin angels have?” the group notes with reference to the 9-year-old twin girls who died in the fires. “Close to God is someone who offers to his fellow man and helps as much as possible for a better world. Who loves and offers support. You are just  pawns of the state, “the group concluded its message.

        Spain Overtakes Italy For Migrant Arrivals - There were dramatic scenes on a Spanish beach packed with tourists on Friday when a dinghy crammed with migrants landed in the surf. Its occupants quickly scattered among the holidaymakers with the police in pursuit. It was a busy weekend for the Spanish authorities who managed to rescue nearly 1,000 migrants from the Mediterranean with 200 pulled from 10 boats on Saturday.A vessel filled with over 30 illegal migrants landed on a Spanish beach on Friday, while being pursued by a police boat. The migrants quickly scattered after landing. According to the Spanish Coast Guard, over 1,400 migrants have arrived in the past 3 days.— Global Times (@globaltimesnews) July 31, 2018 Even though Europe has experienced a dramatic decline in migrant arrivals along the Mediterranean coast, Statista's Niall McCarthy notes that more than 1,500 people have died attempting to make the crossing for the fifth year in a row. While the amount of arrivals in Italy has fallen considerably, Spain is experiencing a surge in traffic. Between 1 January and 25 July 2017, 94,448 migrants made their way to Italy and that fell to 18,130 during the same period in 2018, according to the IOM.  Spain only counted 6,513 Mediterranean arrivals in the first seven months of 2017 and that has now climbed steeply to 20,992 between 1 January and 25 July 2018. Libya has clamped down on human traffickers and that has resulted in higher numbers of people attempting to make the crossing from Algeria and Morocco.

         Italy's Salvini Accused Of Creating "Climate Of Hate" Behind Spike In "Racist Attacks" Italy's populist Interior Minister and leader of the nationalist League party, Matteo Salvini - who recently became Italy's most popular politicians - was accused by opposition politicians on Monday of creating a "climate of hate" in Italy following a spate of racist attacks that have coincided with his anti-immigration drive. In the latest assault, which Reuters reports was "possibly motivated by racism", a black Italian athlete Daisy Osakue was injured early on Monday when unknown assailants drove alongside her in a street near the northern city of Turin and hurled an egg at her face.Osakue herself was not quick to pass judgment: “I don’t want to play the sexism or racism card, but people should be able to go out without someone attacking you out of the blue,” said Osakue. "They are just cowards."Neither were the local police, who questioned whether she had been victim of racism, saying there had been similar assaults that had targeted white locals.However, opposition politicians swept aside those concerns and the violence dominated local media: "The attacks against people of different color skin is now an EMERGENCY. This is now obvious, NOBODY can deny it, especially if they sit in government," former center-left prime minister Matteo Renzi wrote on Twitter. The United Nations predictably also voiced its alarm, saying it was “deeply worried” by the situation.This attack, and others like it, come at a time when Salvini has launched a crackdown on illegal immigration since entering a coalition government last month, closing Italian ports to migrant rescue boats and urging officials to apply tougher rules on asylum requests.

        Italy Backs Brexit: Salvini Accuses EU Of "Swindling" The UK -- The Sunday Times reports Matteo Salvini, Leader of Italy’s Right, Warns EU is ‘Swindling’ Britain Out of Brexit.In an exclusive interview with The Sunday Times, Matteo Salvini urges Theresa May to adopt a tougher stance in her Brexit negotiations with the EU, saying: “My experience in the European parliament tells me you either impose yourself or they swindle you.”The far-right interior minister, a former MEP and considered Italy’s most powerful politician, says May should be prepared to walk away without a deal: “Because on some principles there is no need to be flexible and you should not go backwards.”He also accuses the EU of trying to punish the UK for voting to leave the bloc: “There is no objectivity or good faith from the European side.” The leader of the anti- immigrant League party made an extraordinary intervention as May dispatched members of her cabinet across Europe to sell her Chequers deal.“I remember the referendum stage as an example of participation and freedom; I hope it can be an opportunity for the British.” He added that the Italian government would welcome one-to-one talks with May.  Salvini is the effective leader of Italy. He is the one calling the shots. Five-Star, part of the current coalition, is also anti-EU. The way Italy's parliament is structured, 60% is a massive majority.There is no real opposition to the current government. The EU will not be pleased to say the least.

        Army on standby for no-deal Brexit emergency - Ministers have drawn up plans to send in the army to deliver food, medicines and fuel in the event of shortages if Britain crashes out of the EU without a deal. Blueprints for the armed forces to assist the civilian authorities, usually used only in civil emergencies, have been dusted down as part of the “no deal” planning.Helicopters and army trucks would be used to ferry supplies to vulnerable people outside the southeast who were struggling to obtain the medicines they needed.  In today’s Business section, it is revealed that supermarkets are warning their suppliers to stockpile supplies such as tea and coffee. The NHS would go on a year-round “winter crisis footing”, with drugs bought from outside the EU and stockpiled in hospitals.The revelations will spark renewed claims from Brexiteers that the government is engaged in scaremongering about Brexit.An investigation of no-deal planning found that Steve Baker, the minister then in charge of the issue, threatened to resign in March because Downing Street was refusing to publicise the preparations being made.An assessment of the cost of a no deal on the rest of the EU, which he demanded, has never been used in negotiations.A minister said the military would be called in if blockages at ports led to shortages of food, fuel and medicines, warning: “There is a lot of civil contingency planning around the prospect of no deal. That’s not frightening the horses, that’s just being utterly realistic.”A Ministry of Defence source said “no formal request” to supply aid had been received but acknowledged that “a blueprint for us supporting the civilian authorities that can be dusted off”. Plans to publish reports throughout the summer on no-deal planning have been ditched because of fears they would alarm the public. They will be released on the same day in late August.

        "An Unparalleled Economic & Political Crisis": Brexit Optimism Collapses As Ministers Fear "Historic Catastrophe" “I have near zero optimism because I think it is going to be very messy,” warned one UK minister, speaking to Bloomberg on condition of anonymity. The prospects of getting an agreement are slim, the minister said. “If we crash out without a deal, it’s going to be a historic catastrophe." And he is not alone as the latest YouGov polls show 69% of Brits believe Brexit is going badly and the largest finger of blame for Brexit going badly is being pointed at the government. Two thirds (68%) of those who think Brexit is currently going badly say that it is the government’s fault. This includes three quarters who voted Remain (77%) and 58% of Leave voters. Additionally, as notes, with lots of talk of preparing for a no-deal Brexit, the possibilities of the Tory party completely disintegrating in 2019 becomes ever-more real. The electorate is now becoming very nervous of what Brexit may bring, given that the Conservatives have no idea themselves, which means it should be no surprise that Theresa May’s favorability score plummets to new low.  It should be noted that, as stated above, those turning against the Prime Minister appear to be Leave voters. The only truly amazing statistic about Theresa May is that at the summer recess – she’s still Prime Minister. And few would have bet on that at any odds just six months ago. Perhaps even more ominously, for the first time ever, more people support a second referendum - 42% of Britons think there should be a referendum on the terms of the Brexit deal, 40% do not. When Brexit talks resume in Brussels in mid-August, Bloomberg points out that British and European officials will have just 10 weeks to finalize the complex set of international negotiations before their October deadline. That’s because they need to leave time to ratify whatever agreement emerges in both the U.K. and European Parliaments before Britain exits the bloc on March 29 next year. It’s a tough ask and in private, ministers and senior officials in May’s team are terrified that the negotiations will fail. As Bloomberg sums up so eloquently, that would mean the U.K. crashing out of the EU with no deal, disrupting trade, creating chaos in financial markets, blocking manufacturers’ supply chains and potentially causing shortages of food and medical supplies. It could be an economic and political crisis unparalleled in the U.K. since World War II.

        Brexit: panic is the right thing to do - As the media start to pick up the stories of shortage of food and vital medicines arising from a "no deal" Brexit, one wonders what it will take for the likes of the IEA to express any remorse over their part in making it happen. Certainly, if Mark Littlewood, director of the IEA had any shame, after this report, now would be a good time to show it. Touting for donations in exchange for access to Ministers, even if not strictly illegal, is an abnegation of democracy, and an affront to all right-thinking people. However, since the great clean-out after the Chequers "summit" – with the resignations of Davis, Johnson and Baker, there are only Gove and Fox to hold the standard aloft for the right-wing free trade paradigm. The influence of that group within government is considerably diminished. Nevertheless, this latest "cash for access" scandal does again highlight the sinister role of Sanker "Snake Oil" Singham, and especially with Littlewood, albeit unwittingly, admitting that he had been used as a "slight shill" to conceal some of Singham's meetings with Baker. The way this was done is that Littlewood would tag along at meetings alongside Singham, so the minister could officially record visits as "Mark Littlewood and staff", thus reducing the number of times Singham's presence would have to be recorded by name. The fact that this was even thought necessary tells us something sinister is going on. And when much of the material produced by Singham and his team is so obviously technically unsound – which would be rejected by any sensible person – one really has to wonder how this group has acquired such influence at the heart of government. If this reflects the way government is run now, then we are moving into a post-democracy period, without ever having really enjoyed a fully functioning democracy.

         More Brexit Grim Tidings: WTO Warns Ireland to Prepare for Crash-Out; Deutsche Moves Half of Euro Clearing Ops to Germany; Food Freakout -- Yves Smith - I got 2/3 of the way through this post and found I was outdone by this tweet, which is both brutal and great fun. I hope you’ll all be sports and listen to the video and carry on with the rest of the piece. Don’t bother with #r4today BBCNews Sky LBC or 5Live watch this 2min Newspaper Review it’s the UK’s No.1 — ARTIST TAXI DRIVER (@chunkymark) July 30, 2018 On the one hand, some reality is starting to penetrate the fog of shoddy Brexit reporting and official ignorance and obfuscation. On the other, even when the media starts taking a more jaundiced look at Brexit, so much disinformation is in the zeitgeist that it’s hard to know how better takes will be interpreted. Nevertheless, the Irish media, as many readers have pointed out, has run rings around Fleet Street and today’s story from RTE (hat tip Nick A) is yet another proof. The former WTO chief Pascal Lamy warned Ireland to get ready for a crash-out: Ireland should “prepare for the worst” and may need emergency aid from the European Union if there is a ‘no-deal’ Brexit, the former director general of the World Trade Organisation (WTO) has warned Lamy also put paid to UK soft border fantasies:  “If it was a benefit then, exiting the internal market has a cost. So there is no way there will be no cost, no way there won’t be a border. If you exit the internal market you have to have a border.” Asked if there are any borders anywhere in the world where there is no physical infrastructure, he replied: “No. The most open systems of trade which exist are either in South Africa, where there is the South African Customs Union since the early 20th century, and there is a border. And if you look at for instance Norway-Sweden, there is a border.  “So the notion that there would be no border is pie in the sky,” he added. Recall that City lobbyists have continued to push “regulatory convergence,” aka the EU agreeing to set up a whole new regulatory and supervisory framework just to keep financiers in London fat and happy. So a large swathe of the City seems to be very much behind the curve, which is consistent with pound not having been repriced to reflect rising and now high crash-out risk.  I made skeptical noises about the EEA option, and Richard Kline gave a more detailed takedown. Note that I agree that the odds are high that “sensible people” may be able to drum up public support for a Norway style option by the mid-late fall, when it is a non-starter. It’s thus an important part of why the UK’s options are far more constrained than all the press and pundit blather would have you believe. From Richard Kline:

        Chances of no-deal Brexit growing by the day, says Hunt -- The likelihood of Britain exiting the EU without a deal is “increasing by the day”, Jeremy Hunt has said. Ahead of talks with his opposite numbers in France and Austria yesterday and today, the Foreign Secretary insisted if Brussels failed to strike a withdrawal agreement with the UK, it would cause job losses on both sides of the Channel “if Brexit goes wrong”. Meanwhile, Theresa May will hold talks with French president Emmanuel Macron on Friday as the UK government steps up engagement with leaders on the continent. Mr Hunt accused the European Commission of waiting for Britain “to blink” in Brexit talks as he urged Paris and Berlin to put pressure on Brussels to cut a deal. He told the London Evening Standard: “The probability of no deal is increasing by the day until we see a change of approach from the European Commission, who have this view that they just need to wait and Britain will blink. That is just a profound misunderstanding of us as a nation. “There is real chance of no deal by accident. Everyone is assuming no, no, no, this will never happen. Well actually, it could. “France and Germany have to send a strong signal to the commission that we need to negotiate a pragmatic and sensible outcome that protects jobs on both sides of the Channel because for every job lost in the UK, there will be jobs lost in Europe as well if Brexit goes wrong.” The Foreign Secretary said a no deal would make it harder for European businesses to access finance via the City. He said: “There would not just be economic consequences for the UK. There would be profound economic consequences for the rest of Europe. 

        M20 could be giant lorry park for years in event of no-deal Brexit – report -- A “temporary solution” to managing cross-Channel traffic in the event of a no-deal Brexit risks turning much of the M20 into a giant lorry park for many years, a report says. The impact assessment by Dover district council, released under freedom of information, expresses concern over the levels of readiness for the potential situation and states that urgent clarity is needed from the government. It says: “A 13-mile stretch of the coastbound section of the M20, between junction 8 near Maidstone and junction 9 near Ashford, will be earmarked to hold heavy goods vehicles, in what will effectively become a giant temporary lorry park holding around 2,000 lorries. “It is likely that a permanent solution will not be in place for many years if enacted through current planning processes and procedures. It will also depend on the post-Brexit customs arrangements reached with the European Union. Therefore, the ‘temporary’ traffic-management system Operation Brock will be in force for some time.” The document expresses concern at the slow pace of work on Operation Brock, and states “there does not appear to be a plan B”. More than 10,000 freight vehicles pass through Dover on peak days as it handles one-sixth of the UK’s total trade in goods, with a value of £119bn per year and 99% of the freight moved through the port is intra-EU. The report says: “The freight vehicles currently only take seconds to clear the port of Dover but if Brexit ends up creating regulatory and tariff barriers between the UK and the EU, it is predicted that there could be gridlock around the town and through to Maidstone and beyond. “If increased waiting times persisted then perishable goods could be damaged and supply chains interrupted. There is also a potential impact on air quality of any increased traffic queues at border controls. 

        Britain’s car industry cautions: No-deal Brexit is our nightmare  (Reuters) - A no-deal Brexit would seriously damage the car industry in Britain and the European Union by raising costs and sowing chaos for carmakers and consumers alike, the head of Britain’s car industry warned on Tuesday. With less than eight months until Britain is due to exit the EU, Prime Minister Theresa May has yet to find a proposal to maintain economic ties with the bloc that pleases both sides of her divided party and is acceptable to negotiators in Brussels. May has stepped up planning for a so-called “no-deal” Brexit that would see the world’s fifth-largest economy crash out of the EU on March 29, 2019, a step that could spook financial markets and dislocate trade flows across Europe and beyond. Her foreign minister, Jeremy Hunt, pressed the government’s message on Tuesday, saying the “real chance of no deal” that would hurt both sides could be stopped if the EU adopted a “pragmatic and sensible” approach that prioritized jobs. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said carmakers were increasingly concerned about the lack of clarity around the manner of Britain’s departure from the EU. That has raised the prospect of Britain leaving with no deal and falling back on World Trade Organization rules that could leave British car exporters facing EU import tariffs of around 10 percent. “No deal ... is just not an option. It would be seriously damaging to the industry not just in the UK but in Europe as well,” Hawes told reporters as he presented SMMT’s mid-year update on British car production. At stake is the future of one of Britain’s few manufacturing success stories since the 1980s — a car industry employing over 850,000 people and generating annual turnover of $110 billion.

        City of London slashes Brexit job-loss estimate — The U.K. financial services sector could suffer as few as 5,000 job losses as a result of Brexit, according to a new estimate by the City of London Corporation — far lower than the industry had initially feared.The figures come from an internal City report, to be released in September. In an interview with POLITICO, Lord Mayor of the City of London Charles Bowman said the analysis estimates that between 5,000 and 13,000 jobs will have gone by the U.K.’s leaving date of March 30 next year.That is far lower than most previous estimates. In a widely cited report published in 2016, Oliver Wyman estimated that industry job losses could eventually be as high as 75,000 with banks and other institutions forced to move large numbers of staff to locations in the EU27. Xavier Rolet, the former chief executive of the London Stock Exchange, predicted job losses of over 200,000. But the Bank of England has estimated Day One job losses of around 10,000 in the case of a hard Brexit.In the two years following the U.K.’s EU referendum though, the much-feared exodus of bankers and financiers from London has not materialized. Firms aremoving some operations, including trading and back-office functions, to cities in the EU27 like Frankfurt, Dublin and Paris, but there hasn’t been an uprooting of banks’ entire presence from the U.K. to the Continent. Bowman said that so far, 1,600 jobs have been earmarked to move. One factor that explains the sunnier picture painted for the City in the second report is that while the 75,000 estimate in the first was effectively considering a no-deal scenario, the most recent analysis takes into account the stand-still transition period agreed provisionally in March. Under that deal, the U.K. would remain bound by EU rules, but without representation in Brussels. The transition will not happen though if agreement cannot be reached between Brussels and London on other major sticking points — notably a solution to the Irish border problem post Brexit.

        Exclusive: This Home Office leak reveals Theresa May could keep free movement in a no-deal — Theresa May's government is considering allowing the free movement for EU citizens at the UK border to continue if Britain leaves the EU without a deal, according to confidential details of a Home Office meeting leaked to Business Insider. Border Force officials met in January to discuss contingency plans for a no-deal Brexit. Among the options considered was a plan to allow "no more checks at the border," according to written notes of the meeting sent to BI. A source close to the Home Office explained that the Border Force would likely have little other choice than to carry on allowing EU citizens freely into the UK as it would not have the staffing capacity, resources, or infrastructure to implement a new registration scheme in a no-deal scenario. It currently takes an average of approximately 45 seconds to check an EEA citizens' passport, compared to an average of 4 minutes for an non-EEA arrival. If every new arrival was subject to 4-minute checks, there could be days-long queues at some British airports without a dramatic increase in the number of trained immigration officers. Among the options considered by officials was a "worst case scenario" in which "ministers [are asked] to tolerate higher risk for security," by not carrying out full security checks on new arrivals. This scenario would likely see May's government agreeing to implement "intelligence-led controls" whereby only certain individuals are targeted for processing by officials rather than imposing full checks on all new EU arrivals. However, Theresa May suffered a major crisis as Home Secretary over a scandal involving the relaxation of border controls through intelligence-led checks in 2011, meaning she would be reluctant to impose a similar system again. An alternative plan being considered by Home Office officials to cope with a no-deal Brexit would be to "throw resources" at borders, filling airports with extra immigration officers to handle the huge extra capacity that would result from the government having to process every new arrival as a non-EU citizen. A Home Office spokesperson said: "We have been clear that free movement of people from the EU will end and we will control immigration in the national interest. Immigration from the EU will be subject to UK law."

        Financial Times Goes Wobbly on Brexit; Runs Front Page Stories Claiming Theresa May Charm Offensive Is Winning “Fudges” When No Such Thing Is Happening -- Yves Smith -  Hopefully UK-savvy readers can opine as to why the Financial Times has gone soft in the head on its Brexit coverage this week. This matters because for the most part, the pink paper has been generally sound on Brexit, which is rare in the UK. It has also done important original reporting, such as flagging very early on how the UK’s Customs IT systems would be unable to handle a Brexit and on the huuge number of international agreements that the UK would need to replace when exited them by virtue of leaving the EU.Admittedly, the Financial Times has run planted stories, like its occasional pieces of what City lobbyist are trying to get the Government to do, but it’s been pretty even handed in those write-ups. It has also run two, maybe three optimistic stories that seems out of synch with the trajectory of events, of the “Ys, the EU is gonna be nice to the UK” ilk, based on reports from “EU diplomats”. In one story, the Financial Times named their countries, and they were clearly too uninfluential and too few in number to make a difference. I debunked one in passing and ignored the others, in part because they weren’t given prominent placement.But the Financial Times has started pushing the line, hard, that the EU is going to give the UK concessions to get a withdrawal deal done, supposedly because EU leaders want to keep May in office as well as appease their business leaders. The newspaper published two articles in this vein this week, each as the lead story in the US edition.From Wednesday’s piece, Brussels willing to accept fudge on vital Brexit pact:The EU is willing to “fudge” crucial Brexit negotiations — and offer Britain a vague blueprint for future ties with the bloc — if it helps Theresa May avoid a “no deal” outcome and win parliamentary backing for a withdrawal treaty.  The development comes as the UK prime minister steps up talks with EU leaders, including a meeting with France’s Emmanuel Macron this week. The Guardian begged to differ on Thursday in German sources deny Brexit deal offer amid warning from pro-EU campGerman sources insisted that despite several reports from Brussels and EU officials, no instruction had been issued to the commission to back a vague blueprint, adding that clear guarantees about the planned future trading and security relationship would be required by Berlin.Note that most of the story was about the Remainers’ freakout if the rumors were true.  And today’s, headlined EU shows sign of softer position on Irish backstop. From the text:

        EU to explore Brexit deal on single market for agriculture - The EU is unlikely to agree to British proposals to stay in the single market for goods, senior sources say, but may be willing to talk about access to the single market for agricultural goods only when Brexit talks recommence in Brusselslater this month.Such a move is likely to be welcomed by the Irish Government as it could overcome many of the potential difficulties at the Border after the UK leaves the EU. However, it would require the EU to move on some of its red-line issues, which it has not been willing to do until now.On Thursday, EU chief negotiator Michel Barnier signalled a willingness to “improve the text” of the backstop with the UK, echoing a declaration by the Taoiseach earlier this week of flexibility on the issue.In an op-ed piece carried in several European newspapers, Mr Barnier said the EU was “ready to improve the text of our proposal with the UK”. It is expected that a new text for the backstop – which guarantees no hard border even if the UK leaves the EU without agreement on a future trading relationship – will be tabled when the talks resume in Brussels in mid-August.  The EU is unlikely to agree to British proposals to stay in the single market for goods, senior sources say, but may be willing to talk about access to the single market for agricultural goods only when Brexit talks recommence in Brusselslater this month.Such a move is likely to be welcomed by the Irish Government as it could overcome many of the potential difficulties at the Border after the UK leaves the EU. However, it would require the EU to move on some of its red-line issues, which it has not been willing to do until now.On Thursday, EU chief negotiator Michel Barnier signalled a willingness to “improve the text” of the backstop with the UK, echoing a declaration by the Taoiseach earlier this week of flexibility on the issue. In an op-ed piece carried in several European newspapers, Mr Barnier said the EU was “ready to improve the text of our proposal with the UK”. It is expected that a new text for the backstop – which guarantees no hard border even if the UK leaves the EU without agreement on a future trading relationship – will be tabled when the talks resume in Brussels in mid-August

        3 Blokes In The Pub…Talk No Deal Brexit - naked capitalism – video -Yves here. I listened to 90% and plan to finish. This chat is full of trade geekery yet is lively and accessible. There is a bizarre error (one bloke says Norway is landlocked) but that seems to be an isolated case. The mess of a crash-out Brexit has more layers than most of you imagined (and I know you have active imaginations).  Send to all your Brexit booster friends if you dare.

        BOE Raises Interest Rates In Surprise Unanimous Decision --- As expected by the market, the Bank of England raised interest rates only for the second time since the financial crisis, to the highest level since 2009, saying recent data confirmed the bank's view that the first quarter slowdown in UK growth was temporary.   Members of the BOE's Monetary Policy Committee voted unanimously for a 25 basis point increase, bringing the BoE’s benchmark rate to 0.75%, the highest since the onset of the global crisis. While the outcome was widely expected, with the market pricing in the quarter point rate rise fully in the run-up to the meeting well in advance, the surprise was that the decision was unanimous, which adds a hawkish tilt to this decision according to several Wall Street analysts. The unanimous decision is perplexing because the BOE spent the two years since Brexit to scare the nation just how perilous the economy is. And yet, here they are, with just 8 months left until the final Brexit divorce deadline, to announce how upbeat the central bank is on the country's outlook, and to upgrade its outlook for the coming year.And it certainly was upbeat: "The MPC continues to judge that the UK economy currently has a very limited degree of slack. Unemployment is low and is projected to fall a little further. In the MPC’s central projection, therefore, a small margin of excess demand emerges by late 2019 and builds thereafter, feeding through into higher growth in domestic costs than has been seen over recent years.”In the Inflation Report accompanying the decision, the BOE cut its forecast for global growth, though its predictions for Britain were broadly unchanged. While U.K. expansion is expected to be just 1.4% this year, it will average about 1.75% a year through 2020, slightly above the 1.5% potential.

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