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Saturday, September 8, 2018

week ending Sept 8

The Fed’s QE Unwind Hits $250 Billion - In August, the Federal Reserve was supposed to shed up to $24 billion in Treasury securities and up to $16 billion in Mortgage Backed Securities (MBS), for a total of $40 billion, according to its QE-unwind plan – or “balance sheet normalization.” The QE unwind, which started in October 2017, is still in ramp-up mode, where the amounts increase each quarter (somewhat symmetrical to the QE declines during the “Taper”). The acceleration to the current pace occurred in July. So how did it go in August? The Fed released its weekly balance sheet Thursday afternoon. Over the period from August 2 through September 5, the balance of Treasury securities declined by $23.7 billion to $2,313 billion, the lowest since March 26, 2014. Since the beginning of the QE-Unwind, the Fed has shed $152 billion in Treasuries: The step-pattern of the QE unwind in the chart above is a consequence of how the Fed sheds Treasury securities: It doesn’t sell them outright but allows them to “roll off” when they mature; and they only mature mid-month or at the end of the month.On August 15, $23 billion in Treasuries matured. On August 31, $21 billion matured. In total, $44 billion matured during the month. The Fed replaced about $20 billion of them with new Treasury securities directly via its arrangement with the Treasury Department that cuts out Wall Street – the “primary dealers” with which the Fed normally does business. Those $20 billion in securities were “rolled over.”But it did not replace about $24 billion of maturing Treasuries. They “rolled off” and became part of the QE unwind. The Fed is also shedding is pile of MBS. Under QE, the Fed bought residential MBS that were issued and guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. Holders of residential MBS receive principal payments as the underlying mortgages are paid down or are paid off. At maturity, the remaining principal is paid off.  To keep the balance of MBS from declining after QE had ended, the New York Fed’s Open Market Operations (OMO) kept buying MBS.The Fed books the trades at settlement, which occurs two to three months after the trade. Due to this lag of two to three months, the Fed’s balance of MBS reflects trades from the second quarter. In August, the cap for shedding MBS was $16 billion. But at the time of the trades reflected on the August balance sheet, the cap was $12 billion. Over the period from August 2 through September 5, the balance of MBS fell by $11.5 billion, to $1,697 billion, the lowest since October 8, 2014. In total, $73 billion in MBS have been shed since the beginning of the QE unwind: The QE unwind is scheduled to reach cruising speed in October, when the unwind is capped at $50 billion a month. The plan calls for shedding up to $420 billion in securities in 2018 and up to $600 billion a year in each of the following years until the Fed deems its balance sheet adequately “normalized” – or until something big breaks. Based on current discussions, as part of this “normalization,” the Fed is likely to get rid of all its MBS and retain only Treasury securities.

These “Gradual” Rate Hikes Start to Add Up: US Treasury Yields up to Three Years Hit 10-Year Highs Wolf Richter - The one-month treasury yield rose to 2.0% yesterday at the close and is at about the same level today, the highest since June 10, 2008. It is starting to price in a rate-hike at the Fed’s September 25-26 meeting. This rate hike, the Fed’s third this year, would bring its target to a range between 2.0% and 2.25%. The three-month yield, currently at 2.14%, has reached the highest level since February 26, 2008. Back then, as the Financial Crisis was taking its toll, yields were going through enormous volatility, as the chart below shows. During that volatile period in mid-2008, the three-month yield spiked for a day to 2.07% on June 16, but never got back to the 2.14% in February that year:   There is an entire generation working in the finance industry and on Wall Street who has never seen Treasury yields this high. They’re in for a learning experience. The one-year yield rose to 2.49% at the close yesterday, and remains at about the same level today, beating the 2.48% on June 25, 2008: The two-year yield closed at 2.66% yesterday and trades at the same level today, the highest since July 25, 2008 (when it closed at 2.70%):The three-year yield, at 2.73% yesterday, and edging down just a tad at the moment, is at the highest level since August 14, 2008: All US Treasury yields through three-year maturities are now at 10-year highs. But the yields of Treasuries with maturities longer than three years still have not reached 10-year highs. For example, the five-year yield at 2.77% today is still way below the 4.16% on September 5, 2008. The 10-year yield has risen as well so far this week. It closed at 2.90% yesterday and trades at the same level at the moment. On September 5, 2008, the 10-year yield was 3.66%. So it will take a while before it hits a 10-year high. But note the two surges in this rate-hike cycle, each took the 10-year yield up by over one percentage point. The 10-year tends to move in these surges. And in this scenario, “surge 3” would push it over the 10-year high: 

Federal Reserve Policy Is Becoming Less Predictable - Tim Duy - The Federal Reserve this month is widely expected to raise interest rates for the eighth time in the current hiking cycle that began in December 2015. Get ready for tensions within the Fed to spill over into the public as monetary policy moves closer to estimates of the neutral rate.The Fed staff will likely push harder for policy makers to follow a model-based approach with fairly hawkish implications that would result in rates rising beyond what is considered a neutral level. Although Fed Chairman Jerome Powell doesn’t look married to the Fed’s models, he hasn’t provided a great deal of alternative guidance. That means policy will become less predictable in 2019. Consider the Fed’s basic theoretical framework as exemplified in the “dot plot.” In that chart of the likely path of rates, central bankers estimate values of key exogenous policy variables, such as the longer-run values for unemployment, that provide a gravitational pull for the economy. Over time, the economy should settle into equilibrium, with actual values the same as the estimated natural values. For example, the Fed estimates — not picks — the natural rate of unemployment. As such, altering policy rates will impact the time it takes to reach equilibrium, but not the level of equilibrium.The Fed, however, can choose the rate of inflation. In these models, the success or failure of policy ultimately falls on the deviation of the inflation rate from target because that is the only thing under control. The impact of policy on unemployment two years out during a “normal” economic period like now is small by comparison. Consequently, central bankers should not become distracted by things such as uncertainty over inflation persistence or the natural rate of unemployment. See recent Fed staff research here and here as well as related news reporting here and here.Under the current projections as embodied by the median of the dot plot estimates, policy rates need to rise above equilibrium rates to guide the economy into equilibrium. That’s what the model says. But this underweights the risk of recession from raising rates above neutral. Recessions are inherently difficult to predict in the Feds’ models. Recessions are just simply very rare events. Econometric models aren’t good at predicting rare events. The upshot is that being married to the Fed’s models will generate a biased view of the appropriate policy path. During normal economic periods, market participants should consider that view as hawkish in the sense that they imply a heightened concern about inflation and are excessively complacent about the risk that Fed action (or inaction) triggers a recession.

Should the Federal Reserve pay more attention to inflation or unemployment? - Jared Bernstein - While President Trump plays symphonies of chin music about his role in today’s strong economy, he has far less to do with the economic policies that affect peoples’ lives than the Federal Reserve. They set the benchmark interest rate that both regulates the economy’s heat and moves other key rates we face every day, including mortgage, car, and bank loans. In that regard, it’s useful to know what they’re up to. But instead of analyzing their next interest rate move (the prediction market is virtually certain that they’re going to raise rates another quarter point when they meet later this month), let’s delve into a new and important paper by 5 Fed economists: Chris, Jim, Mike, Dave, Bob. Call them the Fed 5.  The main job of the Fed is to balance the tension between full employment in the job market and price pressures in the product market. Historically, these two variables have been negatively correlated, but this correlation has long been low: in recent years, low unemployment has not much led to accelerating prices. Now, most of us tend to think low unemployment, good; high prices, bad (though that’s not quite right because you actually want some inflation in your economy). So, if inflation is low, and especially if low unemployment isn’t driving prices up too much, we’d like the Fed to ingest a time-release chill pill and keep their feet off the economic brakes. After all, if we don’t need to worry so much about low unemployment triggering ever-increasing inflation, why not let the jobless rate fall as far as it can?Not so fast, say the Fed 5. According to their work, that path courts danger, specifically, under certain conditions — like unforeseen shocks to the system — the jobless rate could fall too far and trigger so much inflation or other distortions, like bubbles in financial markets, that the Fed would have to slam the growth brakes at great cost to economic growth.The Fed 5 humbly submit that our knowledge of the key parameters in play in this inflation/unemployment drama are poorly understood. The level of one of the most important — u* (that’s “u-star,” the lowest unemployment rate consistent with stable prices) — has long eluded economists. We don’t enough about what’s driving inflation, why its correlation with unemployment is so low, and whether it could come back to life in a truly full-capacity economy.That’s led many of us to conclude that our “best move is … to admit the uncertainty . . . and follow the data, particularly inflation.”  But — and here’s the paradox — the Fed 5 argue that even amid the uncertainty, we’re still better off targeting u*, even though the Fed’s guesstimate of it — 4.5 percent — seems clearly too high, as unemployment has long been below that rate and their key inflation gauge has hardly accelerated. The Fed’s own forecasts have unemployment falling a point below their u* and inflation still remaining tame!

 Fed Said to Be Less Prepared For Crisis Than 10 Years Ago - A group of current and former policymakers and academics in the financial industry that comprise the "Group of 30" - a financial industry working group that includes names like Mario Draghi and Mark Carney and which is the "who's who" of economists and experts that led the world into the last financial crisis - has come to the same conclusion that the many in the "fringes of economic thought" have been warning about for the last decade: the Fed is going to be in worse off shape to fight the next major crisis than they were in 2008. “Some of the tools to fight the hopefully rare but extreme crises in the future have been weakened,” Tim Geithner, a distinguished Group of 30 member, told Bloomberg. While many of our readers have likely arrived at that same conclusion on their own, the reasoning by the Group of 30 seems to differ somewhat from conventional skepticism. More importantly, how could the world be "unprepared" nearly a decade after the great recession, and with new reforms being put into place as a result of the financial crisis? According to Geithner, new reforms are actually part of the problem. Geithner tells Bloomberg the unease is a partially a result of "Congress limit[ing] the ability of the Federal Reserve and the Federal Deposit Insurance Corp. to provide emergency support to the financial system". Mexico’s former central bank head Guillermo Ortiz started to hint at the right idea when he told Bloomberg that "The next financial crisis will likely come from a new source". But that new source, according to Ortiz, is not the biggest debt load ever seen in the history of the world, but will be due to... cybercrime. "Central banks and supervisors may not be placing enough emphasis on preparing," he continued.Meanwhile, as policymakers confirm that they believe the next crisis is going to be "different", it still doesn’t seem as though anybody has considered the idea of the alarm going off from inside the U.S. as a result of a potential hyperinflationary or currency based crisis. Au contraire, these grizzled experts believe that the problem is that they won’t be able to inject dollars into the system fast enough – just the opposite. Further, policymakers believe that the enhanced regulation on banks has likely simply left them playing whack-a-mole and pushing much of the nefarious behavior to the shadow banking system.

Central Bankers as ‘Dealers of Last Resort’ -- Marshall Auerback: The man often called the father of 19th-century central banking, Walter Bagehot, is most well-known for his maxim that, as former chairman of the Federal Reserve Ben Bernanke summarizes, “In a [financial] panic, [central banks should] lend freely at a penalty interest rate to solvent borrowers on good collateral.” This function is what Bagehot meant when he said they should act as lender of last resort. Bagehot’s famous book, Lombard Street, was noteworthy for its critique of the Bank of England’s hesitancy to use this power to mitigate earlier financial crises (in part because, in another echo of the 2008 crisis, the central bank failed to recognize the “magnitude” of changes wrought in a system that had been “fit to regulate a few millions, and yet quite inadequate when it is set to cope with many millions”). Bagehot’s dictum still applies today, although in a world where most credit intermediation is done in the capital markets via securitization, rather than traditional bank lending, it makes more sense to describe the central banker’s role as the “dealer of last resort,” rather than lender. But the other part of Bagehot’s maxim is still equally important: In their 21st-century role as counterparty/dealer/insurer of last resort, central bankers must not simply use their balance sheets indiscriminately to provide a liquidity backstop during the downturns. They must also be prepared to proactively charge private market participants variable risk premiums commensurate with the risk of the underlying activity they are undertaking when providing credit. It is questionable whether the central banks are doing an adequate job in respect to the latter function, and the global economy could therefore face a reckoning as big as or worse than 2008 as a consequence. In order to make this case, some background is necessary.

Q3 GDP Forecasts -- From Goldman Sachs:We boosted our Q3 GDP tracking estimate by two tenths to +3.2% (qoq ar). [Sept 6 estimate]. From Merrill Lynch: July construction data disappointed, edging down our 3Q GDP tracker by 0.1pp to 3.2%. Meanwhile, positive data revisions lifted 2Q GDP tracking to 4.4% from 4.2%. [Sept 7 estimate]. And from the Altanta Fed: GDPNow  The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2018 is 4.4 percent on September 5, down from 4.7 percent on September 4. [Sept 5 estimate]  From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 2.2% for 2018:Q3 and 2.8% for 2018:Q4. [Sept 7 estimate] CR Note: It looks like GDP will be in the 3s in Q3.

GOP leaders scramble to avoid pre-Election Day shutdown --Congressional Republicans return to Washington on Tuesday with a singular goal for September: avoid a government shutdown. But with President Donald Trump in the Oval Office, that’s easier said than done. ..For months, GOP leaders have been laying the groundwork to avoid a shutdown on Sept. 30, the end of the fiscal year and just five weeks before Election Day. Speaker Paul Ryan (R-Wis.), Senate Majority Leader Mitch McConnell (R-Ky.), House Majority Leader Kevin McCarthy (R-Calif.) and even Vice President Mike Pence are already quietly lobbying Trump to postpone a shutdown fight over his border wall with Mexico until after the election, Hill and Trump administration sources say. But any carefully laid plans could be for naught, as Trump receives contradictory advice from rival factions in the West Wing. Some White House officials are confident that Trump will sign spending bills keeping the government open. A smaller subset of immigration hard-liners inside the White House, however, are encouraging Trump to fight on the border wall issue now, while Republicans still control Congress. These officials think the House majority is already gone — and they have encouraged Trump to hold the line for his border wall and secure a win while he can, according to multiple sources on Capitol Hill and in the administration. The issue thus becomes whether Trump will try to help himself politically by provoking a shutdown over the border wall, or give some political cover to GOP lawmakers in tough reelection battles. 

Trump Defies Republicans And Democrats With Shutdown Threats - With the end of the federal government's fiscal year looming, President Trump is once again wielding threats of a "good" government shutdown as a cudgel to batter intransigent Democrats and Republicans who are standing in the way of his plans to build his promised wall along the US's southern border.  Of course, this isn't the first time Trump has threatened a shutdown - and at this point in the game, with the outrageous allegation from Bob Woodward's tell-all vying for dominance in the news cycle and Trump's trade war contributing to the stress in emerging markets - the president might view a shutdown fight as an advantageous distraction ahead of the Nov. 6 midterm vote.  But there's also reason to believe the president could be sincere about this threat. After all, even his Republican allies in Congress have done seemingly everything in their power to avoid the issue of funding for the border wall. Here's Bloomberg: "On the wall, the House spending panel has backed spending $5 billion next year while the Senate has backed $1.6 billion. The House proposal, worked out in talks with the White House budget office, falls short of the total $23 billion Trump has sought." While Congressional leaders have been lobbying Trump for months to pass a half-dozen or so spending bills before the Oct. 1 deadline, immigration hardliners in the West Wing have been encouraging Trump to stand his ground, according to Politico. The reasoning, according to the hardliners, is that funding for the wall will be effectively dead in the water if Democrats wrestle back control of Congress after the midterms - so why not press the advantage now?  Trump, along with Republican congressional leaders, is trying to set up a meeting with the Democrats next week to try and hash out some of these issues. But it's unclear how successful that might be. According to Politico, forcing a shut down would "almost certainly" cost Republicans their majority in the House. However, that analysis is based on the polling data - and as we learned in 2016, polls are sometimes wrong.

 Trump On Possible Government Shutdown- If It Happens, It Happens - President Trump indicated on Wednesday that he would accept a government shutdown in order to press for funding for building more of the wall on the U.S.-Mexico border. "If it happens, it happens," he said about the potential for a government shutdown when the current funding expires at the end of September.  Speaking to reporters ahead of a meeting with the Republican House and Senate leadership, Trump said that “if it’s about border security, I’m willing to do anything” even as lawmakers warn that a shutdown ahead of the November midterm elections would be politically perilous. "We have to protect our borders," Trump added. Trump has been pushing for a threefold increase in border wall funds for fiscal 2019, although some Republicans who have been noncommittal or skeptical about the increase, have taken a more favorable stance as the Sept. 30 deadline to fund the government approaches. Earlier on Wednesday we reported that Trump is once again wielding threats of a "good" government shutdown as a cudgel to batter intransigent Democrats and Republicans who are standing in the way of his plans to build his promised wall along the US's southern border. This isn't the first time Trump has threatened a shutdown - and at this point in the game, with the outrageous allegation from Bob Woodward's tell-all vying for dominance in the news cycle and Trump's trade war contributing to the stress in emerging markets - the president might view a shutdown fight as an advantageous distraction ahead of the Nov. 6 midterm vote. But there's also reason to believe the president could be sincere about this threat. After all, even his Republican allies in Congress have done seemingly everything in their power to avoid the issue of funding for the border wall.

Trump says he could use MILITARY to build his wall if Congress won't fund it through DHS | Daily Mail Online: President Donald Trump said Friday that he's considering using military resources to finish construction of his long-promised border wall instead of relying on Congress to fund the project through the Homeland Security Department's budget.He also wouldn't eliminate the possibility of a government shutdown if Democrats continue to confound his efforts to appropriate money for the project on the U.S.-Mexico border.'We have two options,' he told aboard Air Force One as he flew from Billings, Montana to Fargo, North Dakota. 'We have military, we have homeland security.'He was asked specifically about using the Army Corps of Engineers as a taxpayer-funded construction crew.Trump said he would prefer to fund the ambitious construction 'the old-fashioned way – get it from Congress – but I have other options if I have to.' He's seeking about $25 billion. The possibility of diverting Pentagon funding and assets to build a border wall is a hole card the president is holding but has never directly acknowledged before. Two Defense Department officials told in August that the Army Corps of Engineers could take on the task. 'They build levees that hold back massive walls of water,' one said of the agency. 'They can build one to hold back drugs and human traffickers.'

 ‘We Would Be Opening the Heavens to War’ -- MP3 interview & transcript - While the internet treated it largely as a kind of painful joke, corporate news media reported the Trump White House’s plans to establish a “Space Force” as the sixth branch of the US military as almost an inevitability: A Los Angeles Times storyslips from saying the force “would be” responsible for training military personnel to saying the space command “will centralize planning for space war-fighting.” The pushback reported is from those concerned about “bureaucracy,” or changes in the “roles and budgets” of existing military branches. There are details to be worked out—even such “basic” ones, says a Washington Post front-pager, as “what uniforms” the space force would use. But coverage presents potential opposition to the plan, from congressmembers, for example, more as a “hurdle” than a cause for deeper investigation. Karl Grossman is a preeminent resource on the weaponization of space. He’s professor of journalism at State University of New York/College at Old Westbury, and author of the books Weapons in Space and The Wrong Stuff: The Space Program’s Nuclear Threat to Our Planet, among others. He’s also a longtime associate of FAIR, the media watch group that brings you this show. Welcome back to CounterSpin, Karl Grossman.

US Planned Nuclear Strikes To End China, Soviet Union As Viable Societies , Declassified Docs Show - Like the famous George Santayana quote goes, "those who cannot learn from history are doomed to repeat it." And thanks to a cache of documents released by George Washington University's National Security Archive project, the American people are learning just how close their country came to sparking a devastating nuclear conflict with Russia and China back in the 1960s.  The "Single Integrated Operational Plan" (or SIOP) laid out how the US military would carry out a retaliatory (or preemptive) nuclear strike with the objective of eliminating the Soviet Union and China as "viable" societies, and the USSR as a "major industrial power." The "overkill" plan intended to wipe out 95% of its top-level targets with loss of human life as the primary metric for success. No version of the SIOP has ever been fully declassified, meaning that the documents released by GWU offered the first complete picture of the US's Cold War-era nuclear-defense plans. While the US military had created the first version of the SIOP in the early 1960s, the version published by GWU is from 1964. Here's a summary of the new information included in the documents. The SIOP guidance permitted "withholds" to hold back strikes on specific countries. Recognizing the reality of Sino-Soviet tensions, it would be possible to launch nuclear strikes against the Soviet Union without attacking China or vice versa or to withhold strikes from Eastern European countries, namely Albania, Bulgaria, and Romania For the top priority "Task Alpha" targets, the SIOP-64 guidance set an even higher damage expectancy of 95 percent, "a high degree of probability of damage." Thus, overkill continued to be baked into the SIOP.  Yet, because nuclear planners based their assessments of damage on the blast effects of nuclear explosions, they did not take into account the further devastation caused by fire effects, especially in urban areas. The purpose of one of the retaliatory options was to destroy the Soviet Union as a "viable" society because it targeted Soviet military forces (conventional and nuclear) plus strikes on urban-industrial targets – Task Charlie. The 1964 plan didn't include specific casualty projections, while an earlier version of the SIOP projected that the planned strikes would have killed 71% of the residents of major Soviet urban centers and 53% of residents in Chinese population centers. Meanwhile, estimates from 1962 predicted the death of 70 million Soviet citizens during a "no-warning US strike" on military and urban-industrial targets.

Russia to stop flying U.S. astronauts to the International Space Station in April, increasing pressure on NASA – Russia’s contract to ferry NASA astronauts to the International Space Station aboard Soyuz rockets will end in April, Deputy Prime Minister Yuri Borisov told reporters on Friday. The expiration piles additional pressure on the National Aeronautics and Space Administration to restore its capability to shuttle U.S. crew members back and forth to the orbiting lab. The space agency is contracting with Boeing Co. and SpaceX to develop new vehicles to transport astronauts, but the work has been plagued by delays. NASA has relied on Russia since retirement of the space shuttle in 2011 ended U.S.-controlled access to the space station. Congress and President Donald Trump’s administration have touted the commercial program’s importance to ending that reliance, especially as diplomatic relations between the nations have deteriorated. A Soyuz flight planned for April 2019 “will complete the fulfillment of our obligations under a contract with NASA related to the delivery of U.S. astronauts to the ISS and their return from the station,” Borisov said at the Energia Rocket and Space Corp., reported by TASS, Russia’s official news agency.  Russia is expected to provide rides for astronauts through November 2019, the planned return date for a Soyuz capsule from the space station, according to a July report to Congress from the Government Accountability Office. “Obtaining additional Soyuz seats seems unlikely, as the process for manufacturing the spacecraft and contracting for those seats typically takes three years — meaning additional seats would not be available before 2021,” the report said. Russia charges NASA about $81 million per seat on the Soyuz to fly astronauts to and from the station. NASA signed an agreement in early 2017 to acquire additional Soyuz seats into 2019, although no further contracts involving the Russian craft have been announced.

NASA explores product endorsements and rocket naming rights - NASA's new leader is gung-ho on privatizing spaceflight, and that could lead to some new approaches to branding... like it or not. Administrator Jim Bridenstine has unveiled a NASA Advisory Council committee that will explore the feasibility of commercializing the agency's operations in low Earth orbit to lower its costs while its eyes turn toward the Moon and Mars. Some of these plans could include product endorsements from astronauts and even selling the naming rights to rockets and other spacecraft. You could see an astronaut on a box of Wheaties, or a Red Bull mission to the Red Planet. Committee head Mike Gold indicated that the committee would also consider scrapping "obsolete" regulations to let American astronauts support private activities aboard the International Space Station. Companies shouldn't have to "turn to Russian cosmonauts" for private operations, he said, suggesting that astronauts could even be involved in filming ads.Bridenstine stressed that he didn't know if this kind of commercialization was possible (hence the committee). However, he also noted that it might help NASA compete with private spaceflight companies. The US has a shortage of military pilots precisely because they can make more money with airlines, the administrator argued -- there could be a similar problem if they're tempted away by the likes of SpaceX. He also noted that this could spread NASA's influence in pop culture. It won't be surprising if there's significant resistance. Scientists, for example, aren't always fond of commercializing their work -- NASA has traditionally been a 'safe' space for pure scientific pursuits. There's also the question of whether endorsements and naming rights might skew the missions themselves. Would astronauts jockey for roles based on suitability, or on the chance for a lucrative sponsorship deal? There are more than a few ethical and practical concerns NASA would have to consider before opening the floodgates.

Moscow can handle US sanctions. How far will Washington go? -- More US sanctions are raining down upon Russia. The latest sanctions, which took effect last week, relate to the poisoning of former spy Sergei Skripal, but are only the latest in a long series of measures adopted by the US to punish Vladimir Putin’s Russia for its “malignant activities” around the globe. That list extends well beyond the Skripals to include the annexation of Crimea and interference in US elections. But, despite being the central weapon in the neo-Cold War confrontation against Russia, sanctions have not forced Moscow to make any major concession so far. And given the resilience of the Russian economy and the dependence of Western European countries on Putin’s oil and gas supplies, they are unlikely to do so in the foreseeable future. Moscow in ‘defiance mode’ The sanctions package just introduced by the Donald Trump administration will deny the country US credit, halt financial assistance and prohibit the export of security-sensitive goods, technologies and arms. These measures have been taken to punish Moscow for the alleged attempted murder of Russian double agent Sergei Skripal who, together with his daughter Yulia, were hospitalized after suffering exposure to a Russian-style nerve-agent in Salisbury last March. Britain has strongly alleged – albeit, without offering any actual evidence – that the Russian state was behind the attempted assassinations. As per its usual playbook, Moscow reacted to the new sanctions with defiance. 

Trump threw China under the bus and blamed it for derailing talks with North Korea — here’s why that doesn’t make any sense  -- North Korea’s “belligerent” letter to President Donald Trump and the abrupt cancellation of secretary of state Mike Pompeo’s trip to Pyongyang was all it took to throw cold water on the peaceful overtures following the Singapore summit in June. But amid the diplomatic impasse, Trump publicized his “very good” and “warm” relationship with North Korean leader Kim Jong Un, and found a scapegoat for the derailment of US-North Korean relations: China.In several tweets this week, Trump expressed his disappointment with China, which he claimed to have exerted “tremendous pressure” on North Korea in response to his ongoing trade war. Trump stopped short of reigniting his fiery rhetoric; however, and left open the possibility that the trade disputes may be “resolved in time.”“President Donald J. Trump feels strongly that North Korea is under tremendous pressure from China because of our major trade disputes with the Chinese Government,” Trump said in a tweet on Wednesday.“At the same time, we also know that China is providing North Korea with considerable aid, including money, fuel, fertilizer and various other commodities. This is not helpful!” The deadlocked negotiations and Trump’s recent tweetstorm has puzzled foreign policy experts. China, one of North Korea’s closest strategic and economic allies, begrudgingly agreed to the United Nations’s sanctions against the regime following its nuclear and missile tests in 2017.But analysts say Beijing remains somewhat suspicious of North Korea’s motives and continues to uphold international sanctions, despite the State Department’s warningsthat it observed a “modest” easing of sanctions against Pyongyang.“Although China does play a key role in enforcing existing international sanctions designed to pressure North Korea and to change its negotiating calculus, China is not to blame for the Trump administration’s contradictory and inconsistent followup from the Singapore summit,” Daryl Kimball, the executive director of the Arms Control Association, said to Business Insider.  “As a result, North Korea is digging in and resisting calls for further dramatic steps on denuclearization,” Kimball added.

 In Olive Branch To Trump, Xi Jinping Sends Right-Hand Man To North Korea - President Xi Jinping will send his right-hand man to North Korea as nuclear negotiations between Pyongyang and Washington recently hit a snag. SCMP reports that Li Zhanshu - chairman of the National People’s Congress and the third-ranking official in the ruling Communist Party’s Politburo Standing Committee - will go to North Korea on Saturday. Li will attend the 70th anniversary event to mark North Korea’s founding on Sunday. He will be travelling as a special representative of Xi, indicating that the president is not likely to attend the event himself as an earlier report suggested. Li will be the highest level Chinese official to visit North Korea since Xi came to power in 2012. The last Politburo Standing Committee member to go to Pyongyang was Liu Yunshan, in 2015. President Trump said in late August that he did not believe Beijing was “helping with the process of denuclearisation as they once were” – a remark that sparked anger in China whose foreign ministry described as "contrary to the facts." Li’s visit comes as progress has stalled between Washington and Pyongyang following the landmark summit between Trump and North Korean leader Kim Jong-un in Singapore in June. Critically, late last month, Trump cancelled a planned trip to the North by Secretary of State Mike Pompeo. That was followed by Jim Mattis saying America did not plan to suspend more joint military drills with South Korean forces amid reports Pyongyang was rejecting US demands to give up its nuclear warheads.

Trump Shafts Abe On Trade And North Korea -  Barkley Rosser - The Washington Post (on Monday on p. A11) has a revealing story about how President Trump has essentially shafted an important world leader who may have tried harder than any other to please and appease Trump from the moment he became president, with the story ironically reporting that supposedly Trump views the friendly feeling as mutual and has said much more respectful things about this leader than almost any other, with perhaps Vladimir Putin being the prime exception.  This world leader is Japanese prime minister, who rushed to the US to be the first world leader to meet Trump after his inauguration and who has spoken on the phone with him more than any other, as well as playing lots of golf with him and even giving him a gold-plated golf club worth $3800.But it seems to have been largely for naught, with Trump basically giving Abe next to nothing he has asked for and actually engaging in policies on trade that seriously damage the Japanese economy and certainly Abe politically in Japan, with his refusal to make an exception for Japan on the steel and aluminum tariffs, even as Abe held back from retaliating against US exports as pretty much all of the rest of the US’s major trading partners did when they were it with them.  And Trump is threatening to impose tariffs on Japanese cars and demanding that Japan unilaterally open up more to US agricultural goods while offering zero in return to Japan.  This reportedly came to a head in late June when Trump apparently went on and on about Pearl Harbor and made numerous simply false statements about Japanese policy and its economy, all of this on top of the US withdrawing from the TPP, which has been especially important to Japan, with Japan leading the remaining ten nations to follow through on it despite the departure of the US under Trump.  The Japanese have pulled back and all but given up on Trump being remotely reasonable on these issues, with Abe very frustrated that Trump is acting as he has been dong. It is not just on trade that Trump has been sticking it to Abe and the Japanese.  He has ignored Abe’s advice on North Korea, where Abe advised him not to stop military exercises until North Korea made serious moves to denuclearize.  An issue of special concern for the Japanese is the matter of the return of Japanese abductees from North Korea. Trump supposedly promised to raise this issue with Kim Jong-un, but did not do so, too busy getting dead Americans back rather than living Japanese.

Kim Sets Timeline to Denuclearize as U.S. Awaits Strategic Shift - North Korean leader Kim Jong Un signaled he wanted to “achieve denuclearization” during U.S. President Donald Trump’s first term during meetings with South Korean officials but America’s top diplomat indicated more work may need to be done. Kim told visiting South Korean envoys Wednesday he was ready to accept “stronger measures” to restrict his nuclear program and wanted a declaration with the U.S. to formally end the Korean War, the officials said. A separate account by North Korean state media said Kim told the delegation that he wanted progress on denuclearization, without mentioning the U.S. or Trump. "Thank you to Chairman Kim. We will get it done together!" Trump responded Thursday in a posting on Twitter. Speaking in New Delhi on Thursday, Trump’s Secretary of State Michael Pompeo was cautious, declining to comment on Kim’s remarks and adding that a lot of work remained. “We haven’t had any nuclear tests, we haven’t had any missile tests, which we consider a good thing,” Pomepo said. “But the work of convincing Chairman Kim to make the strategic shift that we’ve talked about for a brighter future for the people of North Korea continues.” Kim’s remarks about Trump’s term, if conveyed accurately, would represent his first commitment to something resembling a timetable for nuclear talks with the U.S. leader. But interpreting them required several caveats: Kim only said that he wanted to realize denuclearization before early 2021 -- not commit to doing it -- and he didn’t provide a clearer definition for the term, something that has emerged as a sticking point with the U.S. “He wanted to end some 70 years of animosity between North Korea and the United States and achieve denuclearization within President Trump’s first term,” South Korean National Security Office head Chung Eui-yong, who led the one-day trip to Pyongyang, told reporters Thursday in Seoul. South Korean President Moon Jae-in also agreed to meet Kim in the North Korean capital on Sept. 18-20, the first such trip in 11 years. Kim made clear he had “unwavering trust” in Trump, Chung said. “Kim especially emphasized that he has never said anything bad about Trump to anyone including his close aides,” Chung said.

Thank You Chairman Kim - Trump Responds To North Korea's Pledge Of Denuclearization -  Late Wednesday evening North Korea announced it would pursue denuclearization by the end of President Trump's first term, or by early 2021. The announcement came via South Korean President Moon Jae-in and his national security advisor Chung Eui-yong, who met with North Korea's Kim Jong Un the day prior.Kim has reportedly set down a timeline for denuclearization, the first step of which is a meeting summit between himself and the South Korean president in Pyongyang on Sept. 18-20, during which the two have pledged to discuss "practical measures" toward denuclearization.This included a personal "good faith" message reportedly sent from Kim to President Trump via the South Korean envoy, to which the president has already responded early Thursday morning via Twitter: Kim Jong Un of North Korea proclaims “unwavering faith in President Trump.” Thank you to Chairman Kim. We will get it done together! - Trump stated.   Kim conveyed the message to President Trump which reportedly reaffirms Kim's trust in Trump regarding prior diplomatic openings, despite the White House canceling a visit to Pyongyang by the secretary of state last month citing lack of progress.That message, South Korean national security advisor Chung told reporters after his visit, included that, “He particularly emphasized that he has never said anything negative about President Trump.” Crucially, the developments represent the first time Kim has ever suggested a timeline for dismantling his nuclear weapons program. Previously the North has offered to give up its nukes only if extensive security guarantees were delivered by Washington, including the removal of all American troops currently stationed on the peninsula and the dismantling of what's been referred to as its 'nuclear umbrella' of deterrence from South Korea and Japan.

Washington and Tehran trade threats over the Strait of Hormuz --Less than a month after brutal US sanctions snapped back into force against Iran, the International Atomic Energy Agency (IAEA) confirmed yet again, in a report released Friday, that Tehran is in full compliance with the 2015 nuclear accord. The agreement, known as the Joint Comprehensive Plan of Action (JCPOA) was unilaterally abrogated in May by US President Donald Trump, who made entirely bogus claims that Iran had violated the deal. The latest IAEA findings further expose the provocative character of the Trump administration’s policy, which threatens not only to plunge the entire region into military conflict, but also has dramatically sharpened tensions between Washington and its ostensible European allies. Trump vowed following his announcement that any company doing business with Iran, including those based in Europe, would be barred from trading with the United States.The fact that US imperialism is the most destabilizing factor in the present situation has been underlined over the past week following aggressive comments by US National Security Adviser John Bolton. On August 22, he declared that Washington intends to push Iranian oil exports down to “zero,” and do so just as soon as its sanctions on Iran’s energy sector are re-imposed November 8.  Bolton’s ominous threat was made as reports emerged that the US may be preparing a major military strike on the Syrian regime of Bashar al-Assad, which, as a close ally of Tehran and Moscow, is viewed by Washington as a major obstacle to the consolidation of its unchallenged control over the energy-rich and strategically pivotal Middle East.  In response to Bolton’s threat, a top general in Iran’s Islamic Revolutionary Guard Corps (IRGC) threatened to block oil shipments through the Strait of Hormuz, if Washington follows through on Bolton’s declaration. In recent months, Iranian officials have repeatedly said that if the US and its local clients, such as Saudi Arabia, seek to illegally strangle Iran’s economy—imposing, in what is tantamount to an act of war, an oil-export embargo—then it will be within its rights to stop the Saudis and others from exporting oil as well. The Pentagon has invariably replied to such Iranian warnings with war threats. In what amounted to an implicit threat of direct military action, Major Josh Jacques of US Central Command was quick to respond to the IRGC general’s warning, declaring “Together,” with its allies, Washington stands “ready to ensure the freedom of navigation and the free flow of commerce wherever international law allows.”

Trump Will Chair UN Security Council Meeting on Iran - On September 26, the UN Security Council will hold a meeting on Iran. President Trump has been confirmed to personally chair the meeting, as the US holds the council presidency for the current month.US officials say Trump will focus on allegations of Iran violating international law and fueling “general instability” in the Middle East. It is not clear if there will be any resolutions proposed during this meeting.This will be a high-profile public event for President Trump, coming the same week as the UN General Assembly. It’s likely to be a tense meeting as well, since all the other P5+1 nations remain in the Iran nuclear deal, despite Trump’s withdrawal. Iranian President Hassan Rouhani will be in New York during the meeting for the General Assembly. Though it’s not clear what his plans are for the Security Council meeting, officials say the US would not object if Rouhani wants to speak.

Pentagon's Answer To Yemen Atrocities- Train More Saudi Pilots... On US Soil -- New federal procurement documents unearthed and reported by TYT show that the US Air Force is planning to train Saudi pilots on US soil, which would mark the first time since the US-Saudi coalition's bombing campaign began three years ago. The government documents show the Air Force is seeking private contractors to train Royal Saudi Air Force (RSAF) personnel to be “conducted in the U.S. at contractor’s facility.” The solicitation deadline is listed for Sept. 24, which suggests the program will move forward at rapid pace, but doesn't indicate when the training will begin. According to TYT Investigates, it appears the Pentagon is trying to belatedly show it's "taking action" in response to increased international publicity and humanitarian outcry in response to recent atrocities of its Saudi partners: The Pentagon’s solicitation for training Saudi pilots, however, was posted on August 23, two weeks after the school bus bombing, the procurement records show. What’s more, the training will be for warplanes including the F-15 fighter jet, which the Saudis are using in Yemen. The records even mention weapons-specific training, listing things like, “F-15S Weapons School Instructor Pilot” and “Air Battle Manager/Weapons School Weapons Director Instructor.” Human rights groups have already weighed in on this latest revelation, as TYT reports further: Informed about the training, Sarah Leah Whitson, executive director for Human Rights Watch’s Middle East and North Africa Division, told TYT, “At a time when even the Pentagon has threatened to cut military and intelligence [support] for Saudi’s disastrous campaign in Yemen, it’s disturbing that the Air Force is ratcheting up its relationship by training more Saudi pilots, however veiled by the use of contractors.”

US confirms end to funding for UN Palestinian refugees - The Trump administration has announced it will cut all US funding for the main UN programme for Palestinian refugees, a move with potentially devastating impacts for five million people who rely on its schools, healthcare, and social services.“The United States will no longer commit further funding to this irredeemably flawed operation,” the US State Department said in a statement, adding it was not willing to “shoulder the very disproportionate share of the burden” for the UN Relief and Works Agency (UNRWA).The announcement had been anticipated both by senior officials at UNRWA and other Washington insiders, leading to warnings it may further destabilise the Middle East.UNRWA not only serves Palestinians in the occupied territories but also in Jordan, Syria and Lebanon. European and Arab countries have pledged to protect the agency and Germany promised a significant increase in financial backing. The announcement comes days after the US said it was withdrawing $200m from its main development agency, USAid, for programmes based largely in Gaza where they help tens of thousands of people.  Cutting UNRWA funding has been widely interpreted in both Israel and Palestine as a blunt move by the US to unilaterally sweep aside one of the main sticking points in peace negotiations – the right of return of Palestinians. By slashing its budget, Palestinians fear Washington is attempting to delegitimise the refugee status of them and their descendants.

Scoop: Netanyahu asked U.S. to cut aid for Palestinian refugees -Around two weeks ago, Israeli Prime Minister Benjamin Netanyahu privately conveyed a message to the White House stressing that Israel's position regarding the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) has changed — and that it now supports a complete cut of all U.S. funding to the agency, which gives aid to Palestinian refugees, Israeli officials told me. The officials added Netanyahu communicated with the Trump administration without consulting Israel's security chiefs.  As with almost every past U.S. administration, Israel's position plays important part in White House's decision making on Israeli-Palestinian issues. Until several weeks ago, the Israeli policy was that any cut in American funding of UNRWA should be gradual and without any aid cuts to Gaza, thanks to the fear of a humanitarian collapse and an escalation on the ground. This position was supported by the IDF, the Shin Bet intelligence service and by the Israeli Ministry of Defense. For a long time, this was also the position conveyed to the White House and Congress by Israeli officials.

  • Israeli officials told me that Netanyahu decided to change the Israeli government's position several weeks ago, supporting a complete and immediate cut of all U.S. funding to UNRWA. The officials said Netanyahu conveyed this message privately to the White House and to members of the Senate Appropriations Committee via his close confidant, Ron Dermer, Israel's ambassador to the U.S.
  • The Israeli officials also told me Netanyahu decided on the policy shift without any discussion in the Israeli security cabinet and without any substantial consultation with the heads of the IDF and Israel's security and intelligence services. The officials said many senior defense and intelligence officials in Israel were caught by surprise by the policy shift and did not see it coming.

Nikki Haley- US Will Not Remain A Passive Observer As Nicaragua Becomes Another Venezuela Or Syria - The US Ambassador to the United Nations, Nikki Haley warned the UN Security Council on Wednesday that Nicaragua is heading down the path that led to conflict in Syria and an economic collapse in Venezuela. “With each passing day, Nicaragua travels further down a familiar path,” Haley told a meeting of the UN Security Council on the deteriorating environment in the Central American country. “It is a path that Syria has taken. It is a path that Venezuela has taken.”The warning took place during the first Security Council meeting called by Ambassador Haley, the current council president, to address what the UN says Nicaragua’s government has participated in violent acts of repression toward students and opposition groups that have led to over 300 deaths since mid-April. Haley said the Security Council could not remain a “passive observer” as Nicaragua descended into chaos “because we know where this path leads.”She said Nicaragua’s President Daniel Ortega and Venezuela’s President Nicolas Maduro “are cut from the same corrupt cloth … And they are both dictators who live in fear of their own people.”“The Syrian exodus has produced millions of refugees, sowing instability throughout the Middle East and Europe,” Haley said. “The Venezuelan exodus has become the largest displacement of people in the history of Latin America. A Nicaraguan exodus would overwhelm its neighbors and create a surge of migrants and asylum-seekers in Central America.” Costa Rican Ambassador Rodrigo Carazo told the council that his government received 400 asylum applications from Nicaraguan citizens in the first quarter, that was before the crisis started. Last month, Ambassador Carazo said that number inflated to over 4,000. Year to date, the Costa Rican government has received nearly 13,000 asylum applications from Nicaraguans, he added.

Trump’s Rougher Edge Complicates Trip by Pompeo and Mattis to India - NYT — There have always been irritants in relations between India and the United States. But few have been as perplexing to New Delhi, or left as bitter a taste, as President Trump’s tendency to mock Prime Minister Narendra Modi’s accent in English. A video of Mr. Trump imitating Mr. Modi has gone viral in New Delhi. So have reports that Mr. Trump often mimics his Indian counterpart in internal discussions. “There’s a general understanding here that Modi is not sure he can do business with Trump,” said Suhasini Haidar, foreign affairs editor of The Hindu. “India is just now coming to terms with the idea that Trump will not treat India with the same kind of benevolence that previous presidents have.” This is the diplomatic headache that Secretary of State Mike Pompeo will confront when he arrives in the Indian capital on Wednesday with Defense Secretary Jim Mattis. Tiptoeing around the president’s indiscretions is one in a suddenly long list of challenges to a relationship that, according to senior State Department officials, Mr. Pompeo would very much like to preserve — and even improve.Among the other challenges are growing trade tensions, American insistence that India suddenly end its huge purchases of Iranian oil, and Washington’s threats to impose sanctions should India continue to purchase Russian military equipment, as India has done for most of its history. Improving ties with the United States was Mr. Modi’s signature foreign policy endeavor when he came to power in 2014. But with New Delhi suddenly uncertain about Washington, Mr. Modi has in recent weeks sought to mend ties with Moscow, and with Beijing as a hedge.

India, US Hold Two-Plus-Two Talks, to Expand Global Strategic Cooperation --India and the US on Thursday held the first edition of the twice-deferred two-plus-two talks, covering the entire expanse of the bilateral ties and looking to further expand their global strategic cooperation, including in the Indo-Pacific region. External affairs minister Sushma Swaraj and defence minister Nirmala Sitharaman held the talks with US secretary of state Michael R. Pompeo and defence secretary James Mattis. In her opening remarks, Swaraj said she was confident that the talks will help unleash the untapped potential of the relationship between the two nations and further elevate the level of engagement. She said there has been significant progress in all key areas of cooperation between the two countries. In his remarks, Pompeo said both sides should continue to ensure freedom of the seas and work towards peaceful resolutions of maritime disputes. He also stressed on promoting market-based economics and good governance. “Our two nations are united by shared values of democracy, respect for individual rights and a shared commitment to freedom,” he said. Earlier in the day, Swaraj and Sitharaman held separate meetings with Pompeo and Mattis respectively. Official sources said a number of key bilateral issues were discussed during the meetings. External Affairs Ministry spokesperson Raveesh Kumar called the meeting between Swaraj and Pompeo a “productive” engagement.  Both Pompeo and Mattis arrived here on Wednesday for the inaugural Indo-US two-plus-two talks, which was finalised during Prime Minister Narendra Modi’s visit to Washington last year. In a special gesture, Swaraj received secretary Pompeo at the airport here yesterday while Sitharaman welcomed secretary Mattis, reflecting the importance India attaches to their visit here.

India expands anti-China “strategic partnership” with Washington  - Thursday’s inaugural “2+2” strategic dialogue between the US and India ended with New Delhi signing on to yet another “foundational” military cooperation agreement aimed at transforming India into a front-line state in the US military-strategic offensive against China.Patterned after one of the key mechanisms Washington uses to manage its military-strategic ties with Japan and Australia, its chief Asia-Pacific allies, the “2+2” dialogue is to be an annual event bringing together the US and Indian foreign and defence ministers.The joint statement that US Secretary of State Mike Pompeo, Defense Secretary James Mattis, Indian Foreign Minister Sushma Swaraj, and Defence Minister Nirmala Sitharaman issued at the conclusion of their series of meetings in New Delhi Thursday outlined numerous initiatives to expand Indo-US military and strategic cooperation.The most consequential of these is India’s adoption, after ten years of negotiations, of a Communications Compatibility and Security Agreement (COMCASA) modeled on agreements Washington has with its most important NATO and treaty allies. It will enable the Indian military to obtain advanced US communications equipment for its weapons systems, and enhance encrypted communication and “inter-operability” between the militaries of the US, its allies, and India.The agreement is expected to pave the way for a further major boost in Indian purchases of US weaponry, likely beginning with the procuring of armed naval drones for anti-submarine warfare. India’s military long balked at signing such an agreement for fear that it would facilitate US spying on its activities. But the Narendra Modi-led Bharatiya Janata Party (BJP) government has dramatically expanded India’s integration into Washington’s anti-China offensive, including sanctioning the exchange of intelligence about ship and submarine movements in the Indian Ocean and parroting the US line on the South China dispute.

Pompeo visits Pakistan to demand “reset” in support for Afghan war - US Secretary of State Mike Pompeo and Chairman of the Joint Chiefs of Staff Gen. Joseph Dunford staged a brief, four-hour visit to Pakistan on Wednesday. Coming just after the election of Pakistani Prime Minister and former cricket star Imran Khan, they aimed to browbeat Islamabad into continuing its support for the bloody NATO war in Afghanistan.Pompeo met Khan, Pakistani Foreign Minister Shah Mehmood Qureshi and army chief General Qamar Javed Bajwa. “We made clear to them that—and they agreed—it’s time for us to begin to deliver on our joint commitments,” Pompeo said. He declared, “I hope we can turn the page and begin to make progress, but there are real expectations. We need Pakistan to seriously engage to help us. …”  Pompeo traveled on to India, Pakistan’s historic rival, which, amid explosive shifts in global geopolitics, Washington is grooming as a key regional ally in the confrontation with its long-term strategic rival, China. It was an unambiguous message that Islamabad should bow to US demands for an escalation of bombings and drone murder, or lose out as Washington develops its ties to India. Before Pompeo’s trip, Washington repeatedly threatened to financially strangle Pakistan. Trump set the tone with a New Year’s tweet saying Washington “has foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies & deceit, thinking of our leaders as fools. They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!” Shortly before Pompeo’s trip, Washington canceled a $300 million Coalition Support Fund payment to Pakistan, to pay for army attacks on sympathizers of the Afghan resistance inside Pakistan. Pentagon spokesman Lt. Col. Kone Faulkner said: “Due to a lack of Pakistani decisive actions in support of the South Asia Strategy, the remaining $300 million was reprogrammed.”  With Pakistan’s dollar reserves plunging to only two months’ worth of imports, US officials threatened to cut off loans from the International Monetary Fund (IMF). The Financial Times of London reported on Sunday that senior Pakistani officials are drawing up plans for Khan to seek a $12 billion IMF bailout, which would entail deep attacks on the Pakistani working class. US officials are making clear they may torpedo even this loan, in an attempt to do financial damage to China and cut off its economic ties to Pakistan.

Top trade official in Mexico’s new government says he wants Canada in any future deal – and Mexico did not sell Canada out -- Jesus Seade Kuri, the chief trade negotiator in the government of incoming Mexican president-elect Andres Manuel Lopez Obrador, said he believes a NAFTA deal can still be reached – and that it is of critical importance to the incoming Mexican administration that Canada be part of any new pact – but he acknowledged that the atmosphere around the talks was fraught on Friday.  “I’m anxious, hungry, distressed, optimistic – all at the same time. You name any emotion and I probably have it,” he said in a telephone interview from Washington. “Mexico as a whole has been categorical that we mean this to be trilateral, it’s very important to us,” he said, speaking for both the current government of Enrique Pena Nieto and the incoming administration, which joined the talks after Mr. Lopez Obrador won a sweeping presidential victory on July 1. In fact, Mr. Seade added, the incoming administration places even greater importance on having Canada be part of any deal than the Pena Nieto government did. “For us, it’s another notch or two higher, the importance we attach … we want Canada, for a lot of reasons including political, because of our views on certain social issues.” Also, the Lopez Obrador administration wants a relationship with the United States that mirrors Canada’s. “We are very keen on having a relationship of equals, a good relationship but not a submissive relationship, and Canada is a natural partner, a brother or sister or ally, in this." However, he indicated that Mexico will proceed with its deal with the United States regardless of the outcome of talks with Canada. “Whether we will have Canada is beyond our control. … We’ll be sorry to lose Canada." Mr. Seade rejected the idea that Mexico sold out or undermined Canada’s negotiating position with the bilateral deal his country struck with the United States on Aug. 27, in which Mexico made concessions on key issues such as dispute settlement, investor protection and rules of origin. “I really think the word ‘betrayal’ is an overstatement – it’s an emotion – I think it’s too strong.” Mexico has always insisted that Canada must be part of the deal, he said. However, he believes Canada – both its negotiating team and its citizenry – may have drawn the wrong conclusion from statements made by the current Mexican government’s negotiators.

Has Trump Gone Over The Edge On Negotiating With Canada? -- He may well have.  Facing the  deadline for submitting his deal with Mexico to Congress on Friday, he did so.  However, he did so without Canada signed on, the apparently intense negotiations in Washington between Canadian Foreign Minister, Chrystia Freeland and US Trade Representative, Robert Lighthizer having failed to come to an agreement.  With both the Mexican leaders and major Republican senators saying they will not approve without Canada on board, this makes for a very dicey situation.  There is still time: the ultimate deadline for having a fully detailed agreement to the Senate in time for it to approve it prior to the change of Mexican government on Dec. 1 is Sept. 29. So if US and Canadian leaders can come to an agreement by then in full details, it might still fly.Needless to say, it looks like the giant fly in the ointment is Donald Trump.  Lighthizer is hardline, but experienced in trade negotiations, and Freeland is highly competent by all accounts. There is even an obvious deal to be made if each side is willing to give.  The two hardest issues seem to involve the dairy industry and the lumber industry.  Dairy has always been outside of NAFTA because it is so difficult, and Trump has made demands on the Canadians to loosen and let in more US dairy products.  OTOH, lumber involves the dispute  resolution mechanism, which is easy to  invoke, and the US regularly does so to block Canadian imports on grounds of alleged dumping.  There have been rumbles of possible give on each side, Canadians give some on dairy and US gives some on lumber.  It is just obvious (there are also issues of patents and the steel and aluminum tariffs, but these seem minor compared to the politically fraught dairy and lumber issues). But it seems that Trump wants to humiliate Trudeau and Canada.  It was leaked that he has “privately” said any settlement must be on his terms.  He has even apparently recognized that leaking that statement will make it harder for Trudeau to cut a deal with him.  While some may say he is showing the “art of the deal” and playing 11-dimensional chess here, I doubt it.  I fear this is a combination of both ignorance and egomania on his part.

US-China trade war is based on false assumptions -- On their current trajectory, by the end of this month the world’s two largest economies are likely to have imposed punitive tariffs on manufactured goods and commodities worth $360bn — an amount equivalent to two-thirds of their bilateral trade last year. It could well escalate. Like many combatants on the eve of an epic contest, Mr Trump and Mr Xi are both confident that they will prevail. They cannot both be right. The Trump administration wrongly thinks China’s economy is on the ropes, in part because of the escalating trade war. For their part, Chinese officials are fixated on November’s congressional midterm elections, naively believing that Republican losses will force Mr Trump to back down. On August 16, Mr Trump’s top economic adviser endorsed a view that has grown popular in Washington. “[China’s] economy is just heading south,” Larry Kudlow told reporters. “Right now, their economy looks terrible.” Some US officials also seem to believe that Mr Trump’s imposition of tariffs on Chinese exports worth $34bn in July — and on another $16bn in August — is why investment and overall economic growth are slowing in China. . But a $12tn economy growing at 6.7 per cent and creating 10m or more urban jobs a year is hardly an economy in crisis. While it is true that Chinese officials did not anticipate — and do not welcome — a trade war with the US at the same time they are “de-risking” the financial sector, their response so far has been moderate. They have taken steps to accelerate infrastructure investment and ensure that the renminbi does not fall too far too fast against the dollar, but stopped short of measures that would suggest panic. On August 27, Mr Liu reiterated that “deleveraging and risk prevention are the top financial development priorities for this year”. Chinese officials, unfortunately, are as bad at reading the US as the Trump administration has been at reading China, as they hope a Republican rout in November’s midterms will provide them with a deus ex machina from an all-out trade war. The Republicans may well lose the House of Representatives and perhaps the Senate as well. But if they do, Mr Trump will only be more likely to sharpen his China trade strategy ahead of his own re-election campaign in 2020. Trade is one of the rare “crossover issues” that appeals as much to Bernie Sanders’ Democrats as it does to the president’s core political base.

Chances Fade for U.S.-China Trade Deal – WSJ - The prospect of resolving the U.S. trade battle with China is fading as the White House draws closer to a deal to revise the North American Free Trade Agreement. The outcomes are related, U.S. officials say. Relaxing trade tensions with Mexico and Canada, plus a preliminary trade agreement with the European Union, have made it easier to forge a multilateral front to oppose Chinese trade practices. The U.S., EU and Japan have already held meetings on such a strategy. A trade detente also blunts criticism from Congress and U.S. industry that the administration has erred by picking fights with friendly countries at the same time as it battles with China. Additionally, officials say, it helps recruit allies to stop Chinese exporters from skirting U.S. tariffs by shipping goods to third countries, which then send the goods to the U.S., say officials. “We’re not prepared to make the deal that they’d like to make,” President Trump said this week, referring to the Chinese. “Trump’s ultimate strategy is that we have leverage and we should be exploiting it,” said Stephen Moore, a Heritage Foundation economist who consults with administration officials. The tougher White House stance makes it harder to try to reach a deal at two summits in November, which had been the game plan of Beijing and some in the administration. Last month, the White House said Mr. Trump would skip the Asia-Pacific Economic Cooperation summit in mid-November, leaving only the Group of 20 meeting at the end of that month. .The White House is getting ready to ratchet up pressure on China further by hitting as much as $200 billion in Chinese goods with tariffs of 25%, on top of the $50 billion of Chinese exports already facing 25% levies. The public comment period on the new tariffs ended Thursday, the last step before a decision. Trade associations, which oppose tariffs, were gearing up for an announcement as early as Friday. But others familiar with the deliberations think that the Office of U.S. Trade Representative Robert Lighthizer will take weeks to make a move to demonstrate that it carefully considered the comments, numbering more than 4,000. The office took three weeks after the end of the first comment period to announce tariffs. Several trade associations are considering suing the trade representative to stop the tariffs, by arguing the administration has exceeded its legal authority and has acted arbitrarily. “There has been concern about the scope of authority for the president to move forward” with the additional tariffs, said Stephen Kho, an Akin Gump attorney who was a trade official under George W. Bush. For its part, Beijing is now pursuing a dual track, Chinese academics and officials say. On the one hand, Chinese officials have tried to reassure markets by stressing that the two sides have continued to talk since the end of last month’s unsuccessful trade negotiations in Washington. On the other hand, few in Beijing expect much improvement before the U.S. midterms. That would leave very little time to conclude a deal in November, before the G-20 summit. Chinese officials believe that if Republicans fare poorly in the elections, the president will be weakened in talks with China. 

China Vows To Retaliate If US Imposes Additional Tariffs - China vowed that it will respond and take necessary countermeasures to protect its own economic interests as President Trump is expected to press on with a plan to impose tariffs on an extra $200 billion in Chinese imports as soon as this week. "China will be forced to retaliate if the U.S. ignores resistance in public hearings and imposes additional tariffs", said Gao Feng, a Ministry of Commerce spokesman, at a briefing on Thursday in Beijing. The U.S. public-comment period on the additional tariffs is scheduled to conclude on Thursday, and President Trump is poised to impose previously announced tariffs on $200 billion worth of Chinese goods as early as Friday. "U.S. measures to pressure China are neither reasonable nor effective", Gao said. China will closely monitor the impact from additional tariffs, and take strong measures to help both domestic and overseas companies operating in the country to overcome difficulties, according to the spokesman, who also argued for "equal, honest" talk. "We have the confidence, the capabilities and the tools" to safeguard China's economic interests, Gao said according to Global Times without further elaborating on the possible countermeasures, adding that any attempt to force China into concession will not work. Although broad negotiations between the two countries have stalled, Gao said officials from both sides have been in contact since a meeting in Washington last month, in an effort to ease rising tensions. Meanwhile, Trump is winning the trade war, with a survey of manufacturing sentiment earlier this week revealing the second highest number in history while the world’s second-largest economy is grappling with slowing growth, and has taken measures including stepping up infrastructure construction and channeling funds to smaller firms. At home, economists say the extra tariffs would cause China’s economy to slow more sharply next year if they are enacted. Blaming the US for hurting both Chinese and US businesses, the spokesperson also noted that China will continue to assess tariff impact on companies in China and take measures to help them deal with potential damages.

Trump threatens fourth round of China tariffs worth $267bn-- U.S. President Donald Trump warned China on Friday that tariffs on another $267 billion worth of products, the fourth such round of duties, await them if they do not change their trade practices. The U.S. is soon expected to decide whether to enact its third round of additional tariffs on China, which would impact $200 billion worth of products including furniture and appliances. Speaking to reporters on Air Force One, the president said the $200 billion third round of tariffs "could take place very soon depending on what happens with [China]. To a certain extent it's going to be up to China." But Trump said there was more to come. "I hate to say this, but behind that is another $267 billion ready to go on short notice if I want. That changes the equation." If all four rounds of tariffs were implemented, the combined total would hit $517 billion of imports -- roughly equivalent to all of U.S. imports from China and escalating the trade war to an unprecedented level. The U.S. imported $506 billion worth of goods from China in 2017. In the first two rounds of tariffs, the U.S. has imposed duties on a total of $50 billion worth of Chinese goods. Both were swiftly met with an equal retaliation by Beijing. "This threat will be his 'all-in,' so that China comes up with a proposal that he can agree on" said Eunjin Jung, a research analyst at the Peterson Institute for International Economics, of Trump's proposed tariffs on $267 billion of imports. Trump has justified the tariffs as necessary for balancing the trade deficit with China and to bring manufacturing jobs back to the U.S. His administration is also looking to bring an end to Chinese policies that force the transfer of technology by business partners and to thwart Beijing's "Made in China 2025" initiative, which seeks to elevate China's manufacturing prowess through government subsidies and which American officials and lawmakers argue is unfair to U.S. businesses. Earlier on Friday, White House economic adviser Larry Kudlow said Trump will not make any decisions on the $200 billion in tariffs until officials have time to evaluate public comments on them. The U.S. Trade Representative's office received nearly 6,000 comments during the public comment period on the proposed levies, which ended Thursday night. Kudlow declined to say whether any decisions would be made on Friday.

Trade War Could Affect 11 Million US Blue-Collar Workers - President Trump’s trade war with China is expected to last much longer than initially thought — extending into the second half of 2019, experts state. The Main reason: neither Washington nor Beijing want to appear politically weak at home, and both are prepared to absorb economic pain; furthermore, Trump is convinced he is winning the trade war and will keep pushing until he is forced to reverse by the stock market.According to an Axios report, President Trump’s trade war could affect companies employing some 11 million blue-collar workers, as the threat of an imminent trade escalation could strike by the end of the week.The chart below depicts companies affected by Trump’s dangerous trade policies are mostly concentrated in rural, deeply red, deindustrialized regions of the country, with political consequences for the Trump administration in 2018 and beyond. Axios said the map tracks the geographical impact of both current and threatened retaliation. The darker a region, the higher the concentration of affected industries there.Tit-for-tat has become the norm for China, as both countries dig in for a deepening trade war that is already causing many experts to warn about a global slowdown. To date, Beijing has imposed a 25 percent tariffs on $50 billion of American products. It has also threatened to respond to the newest round of US tariffs with a proposed tax on $60 billion of US goods, by strategically targeting Trump’s base in rural America just in time for the US midterm elections.As for the 11-million blue-collar workers, employment in rural, deindustrialized regions in the US can be exceptionally vulnerable to shifts in the global economy, said Mark Muro, a senior fellow at the Brookings Institution. “In a small county, a single meat packing establishment can provide hundreds of jobs and make up a large share of that county’s total employment."The question then is whether the pain threshold of those 11 million workers affected will be triggered and, more importantly, how they will vote in November.

WTO Head Warns U.S. Exit Would Mean Chaos for American Business ---The head of the World Trade Organization has responded to President Donald Trump’s threat to leave the institution by warning such a move would cause chaos for U.S. companies operating around the world. In an Oval Office interview with Bloomberg on Thursday, Trump warned that he would withdraw from the WTO “if they don’t shape up.” The president also called the 1990s agreement establishing the body “the single worst trade deal ever made.” Roberto Azevedo, the WTO’s director general, told Bloomberg on Friday that he was already working with the U.S. and other members to address some common complaints. But he warned that a U.S. exit from the WTO would have chaotic consequences for the global economy and the U.S. itself. “The scenarios are not going to be good for anyone,” he said. "The U.S. is about 11 percent of global trade. So leaving the organization would be a blow to the organization. But it would be a blow to the U.S. as well.” In particular, he said, such a move would leave U.S. businesses vulnerable to commercial discrimination and new tariffs around the world if non-U.S. members were no longer bound by the WTO’s rules. “That is the worst thing that could happen for an economy as globally connected as the American economy,” Azevedo said.  Worse, protectionist measures “are spreading very, very quickly,” he said, with the U.S. expected to move as soon as next week to impose tariffs on an additional $200 billion in imports from China. The world’s two-biggest economies have already levied duties on $100 billion worth of each others’ products since July as talks failed to resolve U.S. concerns over China’s trading practices.

Trump Eyes a Japan Trade Fight – WSJ - Your humble correspondent appeared on the Fox News Channel this morning and gave the President due credit for the outstanding economic results of his tax and regulatory reforms. This prompted a gracious phone call from Mr. Trump in which the President sounded very stable but unfortunately also still very focused on eliminating trade deficits with America’s trading partners. Such deficits often correlate with a thriving economy like the one we have now. We are buying stuff we need or want from other countries and if it’s more than they choose to buy from us, they use the difference to invest in America. Thank goodness that due to the policies of Mr. Trump and many of his predecessors, the world still loves to invest in the United States. But the President sees a problem and even if he wraps up negotiations with our friends in North America and Europe, the trade uncertainty won’t necessarily end. It seems that he is still bothered by the terms of U.S. trade with Japan. Mr. Trump described his good relations with the Japanese leadership but then added: “Of course that will end as soon as I tell them how much they have to pay.” This columnist noted that Mr. Trump’s tax and regulatory reforms have largely solved the competitiveness problem with the U.S. economy and that if he resolved the trade fights with our friends and simply focused on combatting Chinese intellectual property theft, he could rally a large global coalition to demand a solution. Perhaps the President will be encouraged not to seek new tariffs as he continues to see how well the economy is doing without them. Today the latest National Federation of Independent Business jobs report shows a small-business sector so healthy that it’s biggest problem is finding workers to fill all of the available positions: Small business plans to create new jobs and job openings hit a 45-year high in August... A survey high of 38 percent of owners reported job openings they could not fill in the current period... A record 25 percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem, up two points from last month. This suggests that America could use more immigrants and here’s hoping that can be the subject of another phone call.  

Father of Mollie Tibbetts tells Trump administration: Stop using my daughter’s death in racist attack on immigrants -- On Saturday, Rob Tibbetts, the father of Mollie Tibbetts, the young Iowa woman whose body was found in late August after a month-long search operation, published a guest column in the Des Moines Register. He declared that his daughter “is nobody’s pawn,” and that to use her death to peddle a racist, anti-immigrant agenda is both “heartless” and “despicable.”The message of the column was powerful and straightforward. The grieving father asked right-wing politicians and pundits to stop distorting and corrupting Mollie’s death “to advance a cause that she vehemently opposed” and not use his family’s tragedy to push the Trump administration’s foul anti-immigrant agenda.The immediate cause for the column seems to be an op-ed published last week in the same forum by Donald Trump Jr., the president’s oldest son. Framed loosely as a commentary on the response to Mollie’s murder, Trump Jr.’s op-ed is notable only for the fact that it relentlessly and shamelessly hammers home his father’s usual talking points: “illegal alien crime” is one of the biggest problems faced by American society; “the Left,” i.e., the Democratic Party has facilitated this “existential threat” because of an ideological commitment to open borders; and Mollie’s murder would never have happened if “we policed our southern border properly.” Not one of Trump Jr.’s claims stands up to even minimal scrutiny. There have been numerous studies by academics and think tanks in recent years that have clearly shown that there is no correlation between immigration and crime. If anything, research seems to indicate that immigrants are less like to commit crimes than those who are American-born.

Trump Touts GOP Bill To Deport Criminal Aliens That Crazy Dems Opposed - President Trump on Friday touted a new bill which would allow federal officials to more easily deport criminal illegal aliens.  The Community Safety and Security Act passed in the House 247-152 after its introduction last week by Rep. Karen Handel (R-GA). It is a response to an April Supreme Court ruling that said federal law lacks clarity over how to charge immigrants with aggravated felony, since that determination is based on whether the perpetrator committed a "crime of violence" - an undefined term in federal code. Under the bill, the term would be defined in a way that includes a range of offenses, including assault, voluntary manslaughter, attempted kidnapping, sexual assault, domestic violence, murder, human trafficking, and others. With that change in place, the government could again charge immigrants with aggravated felony, a charge that opens up criminal aliens to mandatory removal from the U.S. -Washington Examiner Friday morning, President Trump tweeted: "Under our horrible immigration laws, the Government is frequently blocked from deporting criminal aliens with violent felony convictions. House GOP just passed a bill to increase our ability to deport violent felons (Crazy Dems opposed). Need to get this bill to my desk fast!" Supporters of the bill add that the legal clarification will also help federal officials prosecute people for crimes unrelated to immigration - and would boost safety and security across the country, according to Handel.  "This legislation provides critical clarity to the definition of crime of violence in the United States code in order to keep violent criminals and ensure the safety of our communities," Handel said ahead of the Friday vote, speaking from the House floor while touting support of the legislation from the Fraternal Order of Police. "Failure to address this issue would foster vagueness and uncertainty in our courts." Democrats and immigrant rights groups criticized the legislation, claiming it will be used to target immigrants and could lead to an increase in deportations.

Jeff Sessions Is Executing Trump’s Immigration Plans With a Quiet, Efficient Brutality -  Over the past few months, Attorney General Jeff Sessions has faced fierce criticism for his role in the Trump administration’s family separation policy. But while the White House continues to deal with the fallout from tearing kids away from their parents at the border, Sessions has been busy orchestrating another, much quieter attack on the country’s immigration system.   Since the beginning of the year, the attorney general has severely limited judges’ ability to manage their cases, increased pressure on judges to close cases quickly, and dramatically reshaped how America determines whom it will shelter. While Sessions isn’t the first attorney general to exercise these powers, immigration advocates say he’s using his authority in unprecedented ways and, as a result, severely limiting due process rights for migrants.  Unlike most courts, immigration courts are housed within the executive branch, meaning immigration judges are actually DOJ employees. Sessions is therefore ultimately in charge of hiring judges, evaluating their performance, and even firing them. He can also refer cases to himself and overrule previous judges’ decisions, setting precedents that effectively reshape immigration law. In a little more than six months, Sessions has issued four consequential decisions on immigration cases he referred to himself, in some instances overturning decades of legal precedent. Attorneys general under the Obama administration used that power only four times over eight years.  “We’re seeing Attorney General Sessions take advantage of the structural flaws of the immigration court system,” says Laura Lynch, senior policy counsel at the American Immigration Lawyers Association, which has joinedthe judges union in asking Congress to make the immigration courts independent of the Justice Department. Sessions’ changes have been “extremely demoralizing,” says Dana Leigh Marks, president emeritus of NAIJ. “I’ve been in the field for 40 years, and I have never seen morale among immigration judges so low.” Here are the biggest ways Sessions is attacking the immigration courts:

Did The CIA & Saudi Arabia Conspire To Keep 9/11 Details Secret-     It’s easier to bury uncomfortable facts than to confront them. So this September 11, the ceremonies marking the 2001 attacks on New York and Washington, D.C., will simply honor the dead. In Manhattan, tourists and mourners will gather where the World Trade Center Towers once stood, lowering their heads in memory of the 2,606 who perished there. The services won't reflect the view that the attacks might well have been prevented. But for hundreds of families and a growing number of former FBI agents, the grief of another 9/11 ceremony will be laced with barely muted rage: There remains a conspiracy of silence among high former U.S. and Saudi officials about the attacks.  “It’s horrible. We still don’t know what happened,” said Ali Soufan, one of the lead FBI counterterrorism agents whom the CIA kept in the dark about the movements of the future Al-Qaeda hijackers. To Soufan and many other former national security officials, the unanswered questions about the events leading up to the September 11, 2001, attacks dwarf those about the assassination of John F. Kennedy, because “9/11 changed the whole world.” It not only led to the invasions of Afghanistan and Iraq, the fracturing of the Middle East and the global growth of Islamic militantism but also pushed the U.S. closer to being a virtual homeland-security police state.“I am sad and depressed about it,” said Mark Rossini, one of two FBI agents assigned to the CIA’s Osama bin Laden unit, who says agency managers mysteriously blocked them from informing their headquarters about future Al-Qaeda plotters present in the United States in 2000 and again in the summer of 2001. “It is patently evident the attacks did not need to happen and there has been no justice,” he said.The authors of a new book on 9/11 hope to refocus public attention on the cover-up. Thoroughly mining the multiple official investigations into the event, John Duffy and Ray N owosielski find huge holes and contradictions in the official story that 9/11 was merely “a failure to connect the dots.”

Millions could lose low-cost phone service under FCC reforms -- Suffering heat stroke on an un-air-conditioned Tulsa, Oklahoma, transit bus, Sweet Paula Ogans-Recess’ cell phone may very well have saved her life. A phone which Ogans-Recess has because she participates in the Lifeline program, a Reagan-era subsidy initiative. Losing consciousness as her complexion flushed, she dialed 911. First responders traced her call, found her, and administered aid. Federal Communications Commission Chairman Ajit Pai, appointed to the post by President Donald Trump, wants to remove a majority of wireless providers that participate in the Lifeline program, in an attempt to eliminate “waste, fraud and abuse.” If such a move were made, the “chaos would be magnificent,” said David Dorwart, the chairman of the National Lifeline Association (NaLA), a trade organization that represents Lifeline businesses. Roughly 10.7 million Americans receive text, voice and data under the program and 70 percent would have to look for a new service provider under the proposal, according to NaLA, if an affordable option is even available. The program cost about $1.3 billion dollars in 2017, and the funding comes from the Universal Service Fund, which is collected from subscribers by service providers. “They get their doctor calls, and they reach out to schools, and that won’t be available to them at the cost it is today,” said Dorwart said of Lifeline users. “It’s not only an accessibility issue, it’s an affordability issue.”

Trump Cuts Pay for Public Workers and Proposes $100 Billion Gift to Richest 1 Percent -- Hours after he launched yet another “direct attack” on workers by canceling a modest pay raise for around two million federal employees, President Donald Trump told Bloomberg on Thursday that he is considering a regressive and possibly illegal plan to use his executive power to hand the rich another $100 billion in tax cuts by indexing capital gains to inflation.“There are a lot of people that love it and some people that don’t,” Trump said of the plan, which would disproportionately reward the top 0.01 percent of Americans. “But I’m thinking about it very strongly.” Trump’s Oval Office interview with Bloomberg came shortly after the president announced in a letter to congressional leaders that he is freezing a planned 2.1 percent pay increase for federal workers just ahead of Labor Day, claiming that “federal agency budgets cannot sustain such increases.” But for Trump and the Republican Party, concerns for “fiscal sustainability” are quickly dropped when it comes time to deliver major gifts to the rich, Wall Street, and the Pentagon.  “Hours after cheating millions of middle class workers, Trump wants to send another kiss to the rich — unilaterally, without any approval from Congress,” Rep. Bill Pascrell (D-N.J.) wrote on Twitter late Thursday. “He ignores the law, governs for the top one percent, and doesn’t give a hoot about the rest of us.” In a Facebook post responding to Trump’s decision to cancel federal employees’ pay raise — which was set to take effect in 2019 — Sen. Bernie Sanders (I-Vt.) wrote that Trump is once again “making it clear he has no interest in supporting working people.”  “Trump himself has pocketed millions over the years grifting off of taxpayers, but now he wants to make it harder for workers to get ahead,” Sanders added. “Trump and his Republican friends in Congress didn’t have any problem finding $1.5 trillion in tax giveaways for the wealthiest people and hugely profitable corporations, but suddenly they don’t have enough money to pay fair salaries to hardworking public servants.”

How a Federal Job Guarantee Can Help the Formerly Incarcerated - Between August 21 and September 9, 2018, incarcerated people across the United States are engaging in a strike for better conditions inside prisons and substantial reforms to the criminal justice system. Second on their list of ten demands is a call for an immediate end to prison slavery: “All persons imprisoned in any place of detention under United States jurisdiction must be paid the prevailing wage in their state or territory for their labor.” For the 2,000 prisoners now fighting the largest fire in the history of California, a successful strike would mean earning a wage worthy of their hard work, one far higher than their current $1 per hour. And if incarcerated people can (and do) perform useful and valuable labor, as the California fires have shown, so can formerly incarcerated people. It’s important to remember this because after decades of dormancy, the Federal Job Guarantee is having a moment, as presumptive Democratic presidential candidates Cory Booker, Elizabeth Warren, Kamala Harris, and Bernie Sanders compete to endorse the most expansive pilot program promising jobs and benefits to American workers. Either Booker’s or Sanders’s plans, if passed, would be one of the most ambitious expansions of the welfare state since the New Deal. But they don’t go far enough, because they say nothing about a vulnerable population: people with criminal records.This silence is surprising, given the broad left-of-center focus on reducing mass incarceration and recidivism. In a piece for The Atlantic a couple of years ago, Booker “acknowledged how hard it was for anybody with a criminal conviction to get a job,” and recognized that “too many people give up … and in order to make money, some go back to doing things that get them arrested again.” Along with Warren, Sanders, and New York Democratic senator Kirsten Gillibrand, he later signed a letter urging former President Obama to “prevent employers from discriminating against applicants based on criminal history.” There’s no doubt that these prominent Democrats recognize the importance of helping people with criminal records reenter the workforce. But failing to connect full employment with criminal justice reform would be a huge missed opportunity.

Bernie Sanders Introduces The Stop BEZOS Act -  One week after a war of words erupted between Bernie Sanders and Jeff Bezos, the vendetta between the Vermont Senator and the world's richest man escalated on Wednesday when Sanders introduced a Senate bill called the "Stop BEZOS Act", that would require large employers like Amazon and Walmart to pay back the government for food stamps, public housing, Medicaid and other federal assistance received by their workers. The bill's acronym is a direct dig at Bezos and stands for Bad Employers by Zeroing Out Subsidies Act. It seeks to establish a 100% tax on government benefits received by workers at companies with at least 500 employees, Sanders said on Wednesday according to the Washington Post."In other words, the taxpayers of this country would no longer be subsidizing the wealthiest people in this country who are paying their workers inadequate wages," Sanders said at a press conference announcing the bill. "Despite low unemployment, we end up having tens of millions of Americans working at wages that are just so low that they can't adequately take care of their families." The proposed bill came one day after Amazon briefly hit $1 trillion in market cap, just a month after Apple did the same, although a quick look at recent price appreciation suggests that Amazon will soon eclipse even Apple to become the world's most valuable company.

IRS Moves to Block Blue States From Getting Around GOP Limits on Tax Deductions -- The Internal Revenue Service and Treasury Department on Thursday moved to block efforts by lawmakers in California and other Democratic-controlled states to help their residents avoid a new limit on state and local tax deductions. The proposed rule targets legislation in those states that would allow taxpayers to claim a charitable deduction for state and local tax payments above the $10,000 limit set in the tax cuts passed by Congress last year. The Treasury Department said the legislation being considered in various states amounts to a tax dodge for wealthier Americans. "Congress limited the deduction for state and local taxes that predominantly benefited high-income earners to help pay for major tax cuts for American families," Treasury Secretary Steven T. Mnuchin said."The proposed rule will uphold that limitation by preventing attempts to convert tax payments into charitable contributions," he said. Thursday's announcement escalated a partisan battle over the tax-cut law that was pushed through by President Trump and congressional Republicans with no Democratic support.California and New York are among the states that have been looking for ways around the limit on state-and-local tax deductions that Republicans included in the $1.5-trillion tax-cut law that took effect Jan. 1.Many of the states hardest hit by the limit are high-tax ones controlled by Democrats, and leaders there have complained the tax bill targeted the deduction for political reasons.A bill from state Sen. Kevin de Leon (D-Los Angeles) would allow California residents to circumvent the new $10,000 deduction limit through a complicated process involving state tax credits for contributions to school districts, charter schools, child-care centers operated by local educational agencies and community college districts.Under the bill, taxpayers would be able to deduct 100 percent of the contributions on their federal tax returns because there are no limits on charitable deductions.But the Treasury rule released Thursday would require taxpayers to reduce the federal charitable tax deduction they are claiming by the amount of any credit they receive on their state and local taxes. That would effectively prevent taxpayers from circumventing the cap through the workaround programs.

Supreme Court to Decide When States May be Sued in Other States’ Courts - This case is before the U.S. Supreme Court for (possibly a record-breaking) third time.This time, the Supreme Court will decide whether to overrule Nevada v. Hall (1979), which permits a state to be sued in the courts of another state without its consent. In Hyatt II (2016), the Supreme Court deadlocked 4-4 on this question shortly after Justice Antonin Scalia died. Gilbert Hyatt was audited by the Franchise Tax Board of California (FTB) in 1993. The wealthy computer chip inventor sued FTB in Nevada state court for several intentional tort and bad faith conduct claims. FTB argued that the Nevada courts were required to give FTB the full immunity to which it would be entitled under California law.In 2003, the U.S. Supreme Court held in Hyatt I that Nevada courts did not have to give FTB full immunity. The Nevada courts eventually awarded Hyatt over $400 million in damages, which lead to a second U.S. Supreme Court case. In Hyatt II, the Court limited the amount of damages Nevada courts could award to the amount that they could award against their own agencies.Following Hyatt II, the Nevada Supreme Court capped damages for FTB at $50,000. In Hyatt III, FTB has again asks the U.S. Supreme Court to overrule Nevada v. Hall. If it does, FTB could not be sued in Nevada state court.  FTB argues that Hall was decided incorrectly. “Hall stands in sharp conflict with the Founding-era understanding of state sovereign immunity. Before the adoption of the Constitution, it was widely accepted that the States enjoyed sovereign immunity from suit in each other’s courts.”

Anti-Science Catholic Extremist: Kavanaugh Calls Birth Control ‘Abortion-Inducing Drugs’ - Former Catholic altar boy and Supreme Court nominee Brett Kavanaugh calls birth control “abortion-inducing drugs” during day three of his confirmation hearing.Responding to a question from Senator Ted Cruz concerning Priests for Life v. HHS, a case dealing with religious freedom and birth control, Kavanaugh said:That was a group that was being forced to provide a certain kind of coverage over their religious objection to their employees. And under the Religious Freedom Restoration Act, the question was first was this a substantial burden on the religious exercise.It seemed to me quite clearly it was. It was a technical matter of filling out a form. In that case they said filling out the form would make them complicit in the provision of the abortion-inducing drugs that they were, as a religious matter, objecting to.For the record, Kavanaugh is wrong on the facts: birth control prevents pregnancy; it does not induce abortion. For an abortion to actually take place, one must first be pregnant.Writing for Crooks and Liars, Karoli Kuns explains the nefarious intent behind suggesting that birth control is really an abortion-inducing drug:That phrase, “abortion-inducing drugs,” is one the right-wing glommed onto to intentionally confuse contraception with other drugs.   They have in effect selectively embraced the core “personhood” argument—that U.S. policy should in some circumstances recognize pregnancy as beginning at fertilization—as a way to undermine access to birth control.

Trump levels a new blast at Sessions for not shielding indicted GOP lawmakers, including Hunter - President Trump intensified his criticism of Atty. Gen. Jeff Sessions on Monday, this time suggesting that the Justice Department should not have brought indictments against two Republican members of Congress, one of them from California, before the midterm elections in November. The congressmen he referred to in two combative tweets were Reps. Duncan Hunter of Alpine, who was charged last month with spending campaign funds on personal expenses and falsifying federal reports on his political finances, and Chris Collins of New York, who two weeks earlier was accused of insider trading and lying to the FBI. The two were the first members of Congress to endorse Trump after he announced his bid for president in 2015, at a time when few others did. Advertisement“Two long running, Obama era, investigations of two very popular Republican Congressmen were brought to a well publicized charge, just ahead of the Mid-Terms, by the Jeff Sessions Justice Department,” the president tweeted from the White House on the Labor Day holiday. “Two easy wins now in doubt because there is not enough time,” Trump wrote, adding sarcastically: “Good job Jeff.” He amplified that sentiment in a subsequent tweet, saying: “The Democrats, none of whom voted for Jeff Sessions, must love him now.” Critics of the president saw the pair of tweets as a brazen call for Justice to intervene in criminal cases for political reasons, reflecting a new benchmark in his long-running campaign to undermine the independence of law enforcement and the judiciary. Trump also falsely referred to the investigations of the two congressmen as being “long running, Obama era” matters. Collins was indicted for alleged insider trading that he conducted in 2017, including a phone call from the White House lawn while he was attending a social function with Trump. The investigation into Hunter’s campaign spending began in 2016 with inquiries by the Federal Election Commission. The FBI first conducted a search of Hunter’s office in February 2017, shortly after Trump was inaugurated. 

Jon Kyl named to succeed John McCain in the Senate - Former Republican senator Jon Kyl was named Tuesday to succeed the late Sen. John McCain, with the announcement coming at the start of confirmation hearings for Supreme Court nominee Brett Kavanaugh -- which could be the new senator's first big vote. Arizona GOP Gov. Doug Ducey announced the selection via Twitter, while saying during a subsequent news conference that Arizonans needed a person who would be able to "hit the ground running." "I am deeply grateful to Senator Kyl for agreeing to succeed his friend and colleague of so many years. Every single day that Jon Kyl represents #Arizona in the U.S. Senate is a day our state is well-served," he tweeted. Kyl, 76, may be a short-term pick. He only committed Tuesday to fill the Senate seat until early next year out of a "sense of duty." "I haven't been able to get that assurance from Kyl yet, what I have gotten is a commitment to serve Arizona through at least this session of Congress," Ducey told reporters, adding that he hoped that Kyl "serves longer." Kyl told reporters he did not want to commit for a longer period because when he left his Senate seat previously he had no intention of returning. 

Blue Dogs See Single-Digit Majority as Their ‘Sweet Spot’ - The nearly moribund Blue Dogs, the coalition of moderate-to-conservative House Democrats, are looking to rebuild influence in the next Congress — and they think they’re in an especially good position to do so if the November midterms result in a single-digit House majority. The leaders of the Blue Dog Coalition, speaking with a small group of reporters Wednesday, said they obviously prefer a Democratic majority, but they think they will have power even if Republicans hold on to the majority with just a handful of seats. “We get stuff passed regardless of who’s in control,” Oregon Rep. Kurt Schrader said. Schrader heads the Blue Dog PAC, the coalition’s political arm that has endorsed 20 Democratic candidates so far this cycle, all of whom have committed to join the group if elected. While not all of those candidates are likely to win their races, the Blue Dogs are still in a good position to grow their membership from 18 members currently to 20-some or even 30-some members if things go particularly well for Democrats in November. “For Blue Dogs, the sweet spot is winning in single digits, winning the majority,” Schrader said. That’s because the smaller the majority, the more a single caucus, especially one like the Blue Dogs that ideologically falls in the center of both parties, can wield its influence over legislation. Historically, the Blue Dogs have voted as a bloc, Schrader said. 

New York Times op-ed by anonymous Trump official gives implicit support for palace coup - On Wednesday afternoon, the New York Times took the unprecedented step of publishing an anonymous opinion piece by a “senior official” within the Trump administration titled “I Am Part of the Resistance Inside the Trump Administration.”In the op-ed, the unnamed official, who by definition is either a cabinet member or a leading aide to Trump, acknowledges a previously unknown level of palace intrigue aimed ultimately at removing Trump from office.The author notes that “many of the senior officials in [Trump’s] own administration are working diligently from within to frustrate parts of his agenda and his worst inclinations.” He or she admits that cabinet members have discussed plotting to remove Trump without initiating the congressional impeachment process.“Given the instability many witnessed,” the op-ed reads, “there were early whispers within the cabinet of invoking the 25th Amendment, which would start a complex process for removing the president. But no one wanted to precipitate a constitutional crisis. So we will do what we can to steer the administration in the right direction until—one way or another—it’s over.”This last phrase—“one way or another”—is a green light for Trump’s ouster from within the White House itself.The machinations of high-level government officials, acting with the support of substantial sections of the corporate and military-intelligence apparatus, have nothing to do with the hostility that broad masses of working people harbor against the Trump administration for its wars and its attacks on social programs, immigrants and democratic rights.The op-ed explicitly states the right-wing character of the ruling class “resistance” to Trump: “To be clear,” it explains, “ours is not the popular ‘resistance’ of the left. We want the administration to succeed and think that many of its policies have already made America safer and more prosperous.” The senior official references Trump’s corporate tax cuts, its policies of corporate deregulation, and its massive military expenditures as examples of the “bright spots” of the administration.

‘The sleeper cells have awoken’: Trump and aides shaken by ‘resistance’ op-ed - President Trump and his aides reacted with indignation Wednesday to an unsigned opinion column from a senior official blasting the president’s “amorality” and launched a frantic hunt for the author, who claims to be part of a secret “resistance” inside the government protecting the nation from its commander in chief. The extraordinary column, published anonymously in the New York Times, surfaced one day after the first excerpts emerged from Bob Woodward’s new book, in which Trump’s top advisers painted a devastating portrait of the president and described a “crazytown” atmosphere inside the White House. Taken together, they landed like a thunder clap, portraying Trump as a danger to the country that elected him and feeding the president’s paranoia about whom around him he can trust.  Trump reacted to the column with “volcanic” anger and was “absolutely livid” over what he considered a treasonous act of disloyalty and told confidants he suspects the official works on national security issues or in the Justice Department, according to two people familiar with his private discussions.Trump questioned on Twitter whether the official was a “phony source,” and wrote that if “the GUTLESS anonymous person does indeed exist, the Times must, for National Security purposes, turn him/her over to government at once!” In a column titled, “I Am Part of the Resistance Inside the Trump Administration,” the person whom the Times identifies only as a “senior official” describes Trump’s leadership style as “impetuous” and accuses him of acting recklessly “in a manner that is detrimental to the health of our republic.”  The official writes that Cabinet members witnessed enough instability by their boss that there were “early whispers” of invoking the 25th Amendment to remove Trump from office but decided instead to avoid a constitutional crisis and work within the administration to contain him.“Many Trump appointees have vowed to do what we can to preserve our democratic institutions while thwarting Mr. Trump’s more misguided im­pulses until he is out of office,” the official writes. The column, which published midafternoon Wednesday, sent tremors through the West Wing and launched a frantic guessing game. Startled aides canceled meetings and huddled behind closed doors to strategize a response. Aides were analyzing language patterns to try to discern the author’s identity or at a minimum the part of the administration where the author works. “The problem for the president is it could be so many people,” said one administration official, who like many others interviewed for this story spoke on the condition of anonymity to be candid. “You can’t rule it down to one person. Everyone is trying, but it’s impossible.”

'TREASON?': Trump blasts 'gutless' NYT opinion piece from anonymous official --In a striking anonymous broadside, a senior Trump administration official has written an opinion piece in The New York Times claiming to be part of a group of people "working diligently from within" to impede President Donald Trump's "worst inclinations" and ill-conceived parts of his agenda. Mr Trump called it a "gutless editorial" and "really a disgrace", and called on the newspaper to hand over the writer to the government in the interests of national security. "Treason?" he tweeted. The writer, claiming to be part of the "resistance" to Mr Trump but not from the left, says: "Many Trump appointees have vowed to do what we can to preserve our democratic institutions while thwarting Mr Trump's more misguided impulses until he is out of office." External Link: Donald Trump tweet: TREASON The newspaper described the author of the column as a senior official in the Trump administration. A defiant Mr Trump, holding an event with sheriffs at the White House, lashed out at the Times for publishing the op-ed. "They don't like Donald Trump and I don't like them," he said of the newspaper. The publication of the op-ed immediately triggered a wild guessing game as to the author's identity on social media, in newsrooms and inside the West Wing, where officials were blindsided by its publication. 

Trump Orders NYTimes To Reveal Op-Ed Source For National Security Purposes -- A clearly fuming President Trump has escalated his fight with The New York Times following tonight's anonymous White-House-insider op-ed.Trump begins by questioning whether a source actually exists: "Does the so-called “Senior Administration Official” really exist, or is it just the Failing New York Times with another phony source?"And then comes over the top by playing the "Nation Security" threat card, demanding they hand over the source: "If the GUTLESS anonymous person does indeed exist, the Times must, for National Security purposes, turn him/her over to government at once!"Does the so-called “Senior Administration Official” really exist, or is it just the Failing New York Times with another phony source? If the GUTLESS anonymous person does indeed exist, the Times must, for National Security purposes, turn him/her over to government at once!— Donald J. Trump (@realDonaldTrump) September 5, 2018We can only imagine the level of liberal media mania this will cause.   While we are waiting for NYTimes' response, CNN has put together the Top 12 potential sources of the op-ed  based on what we know about the various factions, likes, dislikes, motivations and ambitions within the Trump administration. These are in no particular order.

Pence spokesman denies vice president is behind anonymous op-ed | TheHill: Vice President Pence's office denied Thursday that he was behind an anonymous op-ed in The New York Times that described efforts among staffers in the Trump administration to push back against the president's instincts. Jarrod Agen, Pence's deputy chief of staff and communications director, tweeted that the vice president's office "is above such amateur acts." "The Vice President puts his name on his Op-Eds. The @nytimes should be ashamed and so should the person who wrote the false, illogical, and gutless op-ed," Agen tweeted. The Vice President puts his name on his Op-Eds. The @nytimes should be ashamed and so should the person who wrote the false, illogical, and gutless op-ed. Our office is above such amateur acts.— Jarrod Agen (@VPComDir) September 6, 2018Pence's denial came shortly after Secretary of State Mike Pompeo told reporters during a visit to India that he too was not behind the op-ed, and ripped the anonymous author as a "disgruntled, deceptive bad actor.""I come from a place where if you're not in a position to execute the commander's intent, you have a singular option, that is to leave," Pompeo said, according to a State Department transcript of his remarks.The White House has been roiled by the op-ed, in which an anonymous senior administration official described coordinated efforts from staff to "thwart" President Trump's worst instincts.The author, whose identity is known by top opinion editors at the Times, wrote that they are neither a member of the so-called "deep state" that conservatives suggest is undermining the president, nor the liberal "resistance" movement aimed at blocking Trump's agenda."We want the administration to succeed and think that many of its policies have already made America safer and more prosperous," they wrote. "But we believe our first duty is to this country, and the president continues to act in a manner that is detrimental to the health of our republic."

This Is a Constitutional Crisis - David Frum - Impeachment is a constitutional mechanism. The Twenty-Fifth Amendment is a constitutional mechanism. Mass resignations followed by voluntary testimony to congressional committees are a constitutional mechanism. Overt defiance of presidential authority by the president’s own appointees—now that’s a constitutional crisis. If the president’s closest advisers believe that he is morally and intellectually unfit for his high office, they have a duty to do their utmost to remove him from it, by the lawful means at hand. That duty may be risky to their careers in government or afterward. But on their first day at work, they swore an oath to defend the Constitution—and there were no “riskiness” exemptions in the text of that oath. On Wednesday, though, a “senior official in the Trump administration” published an anonymous op-ed in The New York Times, writing:Many of the senior officials in his own administration are working diligently from within to frustrate parts of his agenda and his worst inclinations.I would know. I am one of them.The author of the anonymous op-ed is hoping to vindicate the reputation of like-minded senior Trump staffers. See, we only look complicit! Actually, we’re the real heroes of the story. But what the author has just done is throw the government of the United States into even more dangerous turmoil. He or she has enflamed the paranoia of the president and empowered the president’s willfulness.

Elizabeth Warren: Time to use 25th Amendment to remove Trump from office --Massachusetts Sen. Elizabeth Warren, seizing on an explosive op-ed from an anonymous administration official, said Thursday that it's time to use constitutional powers to remove President Donald Trump office if top officials don't think he can do the job. "If senior administration officials think the President of the United States is not able to do his job, then they should invoke the 25th Amendment," Warren told CNN. "The Constitution provides for a procedure whenever the Vice President and senior officials think the President can't do his job. It does not provide that senior officials go around the President -- take documents off his desk, write anonymous op-eds ... Everyone of these officials have sworn to uphold the Constitution of the United States. It's time for them to do their job."The hard-charging comments by the potential 2020 presidential candidate come in the wake of the stunning New York Times piece where an anonymous official raises deep concerns about the President and contends there were some initial conversations to invoke the 25th Amendment to remove the President from office. The White House has aggressively pushed back on the piece, calling the author a traitor and a coward. The remarks are bound to spark a debate within the potential 2020 field about how hard to go after Trump, with some advocating impeachment and invoking the 25th Amendment and others acting more cautious. Warrren dismissed questions that invoking constitutional remedies would provoke a constitutional crisis. "What kind of a crisis do we have if senior officials believe that the President can't do his job and then refuse to follow the rules that have been laid down in the Constitution?" Warren told CNN. "They can't have it both ways. Either they think that the President is not capable of doing his job in which case they follow the rules in the Constitution, or they feel that the President is capable of doing his job, in which case they follow what the President tells them to do."

Are We Being Played? - -  Caitlin Johnstone - As you doubtless already know by now, the New York Times has made the wildly controversial decision to publish an anonymous op-ed reportedly authored by “a senior official in the Trump administration.” The op-ed’s author claims to be part of a secret coalition of patriots who dislike Trump and are “working diligently from within to frustrate parts of his agenda and his worst inclinations.” These “worst inclinations” according to the author include trying to make peace with Moscow and Pyongyang, being rude to longtime US allies, saying mean things about the media, being “anti-trade”, and being “erratic”. The possibility of invoking the 25th Amendment is briefly mentioned but dismissed. The final paragraphs are spent gushing about John McCain for no apparent reason. I strongly encourage you to read the piece in its entirety, because for all the talk and drama it’s generating, it doesn’t actually make any sense. While you are reading it, I encourage you to keep the following question in mind: what could anyone possibly gain by authoring this and giving it to the New York Times? Seriously, what could be gained? The op-ed says essentially nothing, other than to tell readers to relax and trust in anonymous administration insiders who are working against the bad guys on behalf of the people (which is interestingly the exact same message of the right-wing 8chan conspiracy phenomenon QAnon, just with the white hats and black hats reversed). Why would any senior official risk everything to publish something so utterly pointless? Why risk getting fired (or risk losing all political currency in the party if NYTAnon is Mike Pence, as has been theorized) just to communicate something to the public that doesn’t change or accomplish anything? Why publicly announce your undercover conspiracy to undermine the president in a major news outlet at all?You don’t have to get into any deep conspiratorial rabbit hole to consider the possibility that all this drama and conflict is staged from top to bottom. Commentators on all sides routinely crack jokes about how the mainstream media pretends to attack Trump but secretly loves him because he brings them amazing ratings. Anyone with their eyes even part way open already knows that America’s two mainstream parties feign intense hatred for one another while working together to pace their respective bases into accepting more and more neoliberal exploitation at home and more and more neoconservative bloodshed abroad. They spit and snarl and shake their fists at each other, then cuddle up and share candy when it’s time for a public gathering. Why should this administration be any different?   I believe that a senior Trump administration official probably did write that anonymous op-ed. I do not believe that they were moved to write it out of compassion for the poor Americans who are feeling emotionally stressed about the president. I believe it was written and published for the same reason many other things are written and published in mainstream media: because we are all being played.

Trump Threatens NBC's Broadcast License After Network Killed Weinstein Story - President Trump renewed his attack on "Fake News" coming from the mainstream media, suggesting that NBC's license to broadcast should be challenged due to their "fumbling around" and "making excuses" for killing the Harvey Weinstein story, which Trump called "probably highly unethical," adding "Look at their license?" And while there wasn't a specific reference to the FCC, Trump seemed to be suggesting that federal regulators review the network's license after trading barbs with former correspondent Ronan Farrow - who said Monday night: "The story was twice cleared and deemed ‘reportable’ by legal and standards only to be blocked by executives who refused to allow us to seek comment from Harvey Weinstein"  Weinstein notably hired a private firm run by former Israeli Mossad agents in a failed attempt to silence his accusers and prevent The New York Times and The New Yorker from publishing allegations of sexual harassment, assault and rape – according to an explosive New Yorker article by Farrow. The firm, US-based Black Cube, was referred to Weinstein by former Israeli Prime Minister Ehud Barack, and promotes itself as “a select group of veterans from the Israeli elite intelligence units."  Meanwhile, former NBC News producer Rich McHugh took a swipe at the network, advocating for an independent investigation of what happened.  Following his remarks to the New York Times last week that NBC News committed a “massive breach of journalistic integrity” in not running Farrow’s Weinstein reporting, ex-NBC Investigative Unit producer Rich McHugh took another strong swing at his old employer late Monday. In a tweet, McHugh advocated an “independent investigation” of what happened,  saying that “the release of an internally drafted report without a complete investigation and transparency for participants only raises more questions than answers.” –Deadline What's more, one of Weinstein's accusers, Emily Nestor, backed Farrow - saying late Monday that she was "immensely disappointed in, but not surprised to read NBC's recent comments."

Former Manafort associate reveals illegal foreign payment to Trump's inauguration - W. Samuel Patten, an associate of former Trump campaign chairman Paul Manafort, admitted on Friday that he paid $50,000 for tickets to President Donald Trump's inauguration for a pro-Russian Ukrainian oligarch he was representing and another Russian individual. The disclosure, included as part of a plea agreement Patten entered into with prosecutors, appears to be the first official confirmation that money from pro-Russian interests was funneled to the Trump inaugural committee in order to help foreigners gain access to events connected to Trump’s January 2017 swearing-in ceremony. Story Continued Below ..It is illegal for foreign nationals or foreign entities to contribute to a presidential inaugural committee. Prosecutors revealed in a court filing Friday that Patten paid the money to a “straw purchaser” who was an American to buy the tickets from the inaugural committee without revealing they were actually financed by a foreign individual. The documents contained no suggestion that anyone connected to the inaugural committee was aware of the transaction. Patten was not charged in connection with the payment, but pleaded guilty to failing to register as a foreign lobbyist in the United States for a pro-Russian Ukrainian political party. As part of that arrangement, he agreed to cooperate in various ongoing investigations, including special counsel Robert Mueller’s probe into Russian interference in the 2016 presidential election and whether Trump associates played any role in it. Patten’s cooperation with Mueller is a particularly significant development given his relationships with Manafort, Manafort associate Rick Gates — who also worked for the Trump campaign — and Konstantin Kilimnik, a suspected Russian intelligence operative with whom Manafort and Gates worked in Ukraine for the political party. Patten also passed the money through a company that he ran with Kilimnik, in order to obtain the tickets for his Ukrainian client, who is not named, according to the court documents.

Senior Diplomat Exposes US Meddling In Russian Election - As Russian citizens prepare to head to the polls on Sunday to vote in regional elections, a senior Russian diplomat has revealed that Moscow has uncovered a US interference effort involving a Silicon Valley tech giant and activists opposed to the government of Russian President Vladimir Putin.  Following a briefing on the matter, senior Russian diplomat Andrey Nesterenko told Russia's Interfax news agency that the US "certainly does" meddle in the Russian electoral processes, as RT reported. The revelation followed reports that Russia has resumed a major airstrike of a reputed terrorist stronghold in Idlib province over the objections of President Trump, who warned that such a strike would be a humanitarian disaster."Our collective opinion is that electoral sovereignty is a principle that all civilized nations should respect" the diplomat said, adding that Moscow will notify "our American partners that the actions of their media outlets allow us to state that they are close to breaking Russian law." Specifically, Nesterenko was referring to a possible violation of Russian election laws by Google parent Alphabet, which hosted advertisements for an illegal campaign rally organized by Russian opposition leader Aleksey Navalny. Navalny is calling for protests to denounce the vote, which he believes is biased. To help spread the word, Navalny’s public movement is using paid ads on Google services like YouTube. However, holding an event dedicated to an election campaign on the same day as the vote goes against Russian law. The Russian Central Election Commission, media watchdog Roskomnadzor, and the Russian Anti-monopoly Service have reportedly informed Google about these illegal activities being carried out on its platform. The revelations are just the latest example of US hypocrisy when it comes to election interference following reports that the FBI tried to recruit Russian oligarchs as informants. Aluminum magnate Oleg Deripaska, who was targeted by US sanctions earlier this year,  recently admitted in an interview with the Hill's John Solomon that he colluded with the US government between 2009 and 2016, working as an FBI asset to try and free kidnapped former agent Robert Levinson.  As a reminder, the US is no stranger to this type of interference, as the map below clearly shows:

DOJ lawyer says he was told that Russia had Trump 'over a barrel' -- A senior Justice Department lawyer — whom the president has called on to be fired — says a former British spook told him two years ago that Russian intelligence believed it had Donald Trump “over a barrel,” according to a report.The lawyer, Bruce Ohr, this week described to lawmakers his breakfast meeting on July 30, 2016, with ex-spy Christopher Steele, another figure President Trump has sought to discredit, the Associated Press reported, citing people familiar with the encounter. Steele — a longtime FBI informant — compiled a dossier using Democratic-funded research that contained salacious, unsubstantiated claims about the president.  Ohr’s wife, Nellie, worked at Fusion GPS, the company that paid Steele to put together the dossier.  Some Republicans and Trump allies claim the Justice Department used the information in the dossier to launch a probe into the Trump campaign’s alleged connections with the Russians. But the FBI’s probe was already underway by the time it received Steele’s dossier — and Ohr was not the original source of information from it. The people who discussed Ohr’s interview spoke to the AP on condition of anonymity because they were not authorized to publicly discuss the closed session. Among the things Ohr said he learned from Steele during their sit-down was that an unnamed ex-Russian intelligence official had said that Russian intelligence believed “they had Trump over a barrel,” sources familiar with the meeting told the news service. It was unclear from Ohr’s interview with lawmakers whether Steele had been directly told that or had picked up the information through his contacts. 

Russian Oligarch, Justice Department and a Clear Case of Collusion --In a 20-month search for evidence of collusion between Donald Trump’s campaign and Russia, none that is compelling has emerged.Former FBI Director James Comey told Congress he found none. The U.S. intelligence community has given a similar assessment, though it did prove convincingly that Moscow meddled in the 2016 election through cyber warfare. And, so far, special counsel Robert Mueller has not offered any collusion evidence, though his work continues. But, for the first time, I can say there is evidence of collusion between Russians and Americans — specifically, the sort that is at the heart of counterintelligence work.Before we review that evidence, let’s define collusion. The Collins Dictionary says its original British meaning was “secret or illegal cooperation, especially between countries or organizations.” Using that definition, collusion can be secret but good, if the outcome is well-intended. Or, it can be bad, if it is meant to defraud, deceive or create illegality. Now for the evidence, as presented to me by several sources, American and foreign:

Prosecutors use grand jury as investigation of Andrew McCabe Intensifies -- Federal prosecutors have for months been using a grand jury to investigate former FBI deputy director Andrew McCabe — an indication the probe into whether he misled officials exploring his role in a controversial media disclosure has intensified, two people familiar with the matter said.The grand jury has summoned more than one witness, the people said, and the case is ongoing. The people declined to identify those who had been called to testify.The presence of the grand jury shows prosecutors are treating the matter seriously, locking in the accounts of witnesses who might later have to testify at a trial. But such panels are sometimes used only as investigative tools, and it remains unclear if McCabe will ultimately be charged.A spokesman for the U.S. attorney’s office in D.C., which has been handling the probe, declined to comment.Michael Bromwich, a lawyer for McCabe, said in a statement after this report was published online that he had been confident McCabe would not be charged, absent “inappropriate pressure from high levels of the Administration.”“Unfortunately, such pressure has continued, with the President targeting Mr. McCabe in numerous additional tweets,” Bromwich said. The lawyer also raised questions about the timing of the news report on the grand jury. “Today’s leak about a procedural step taken more than a month ago — occurring in the midst of a disastrous week for the President — is a sad and poorly veiled attempt to try to distract the American public,” Bromwich said. “We remain confident that a thorough review of the facts and circumstances related to this matter will demonstrate that there is no basis on which criminal charges should be brought.”The investigation into McCabe is as politically charged as they come, and a decision to prosecute him — or not — will draw significant criticism either way. McCabe — who briefly took command of the FBI after James B. Comey was fired last year — has been a frequent target of criticism from President Trump. His comments, sometimes urging that McCabe be investigated, have offered significant support for McCabe’s argument that he is being treated unfairly and the examination of him is tainted by partisanship.

By Ignoring Sept. 1 Deadline, Mueller Probe Risks Meddling With Midterm Vote - In what for Republicans must be a very bitter irony, Special Counsel Robert Mueller's probe into alleged "Russian interference" in the 2016 election (a probe that has reached far beyond its original mandate) is now at risk of unduly influencing the upcoming midterm vote. As Bloomberg points out, Trump lawyer Rudy Giuliani has been arguing for weeks that Sept. 1 is the deadline for Mueller to finish his investigation under Department of Justice guidelines. According to Giuliani, Mueller is obligated to either finish his investigation and publish his findings - or at least place the probe into a two-month "deep freeze." However, Mueller has refused to rebut Giuliani's claims and has instead maintained his public silence. Giuliani, President Donald Trump’s lawyer, has maintained for weeks that Saturday, Sept. 1, was a deadline under Justice Department guidelines for Mueller to finish his Russia probe to avoid improperly affecting the midterm elections on Nov. 6. "I always thought that was the day to make some decision," the former New York mayor said in an interview. Mueller has responded to Giuliani’s ultimatums with the public silence he’s maintained ever since he was named in May 2017 to lead the probe into Russian interference in the 2016 presidential election. But there’s no indication that the special counsel is going to abide by Giuliani’s clock, and there’s no law or clear policy requiring him to do so. But Mueller's refusal to abide by this policy could have serious repercussions if Mueller's office chooses to subpoena the president, who has refused to commit to a requested sit-down interview with the special counsel for more than eight months. As Giuliani points out, kicking off such a momentous legal battle months before a crucial election could be construed as interference. His pronouncement also gives the Trump Administration more ammunition to continue delaying its decision on whether to grant Mueller an interview.

Google heads into showdown with Congress after Senate panel rejects its witness: Alphabet Inc.’s Google posted what it called “testimony” for a Wednesday congressional hearing on social media companies’ efforts to thwart election meddling in advance of November’s midterm races — only it doesn’t appear anyone will be there to deliver it. The Senate Intelligence Committee has said it rejected Google Chief Legal Officer Kent Walker as a witness because he wasn’t high-level enough in the company to testify at Wednesday’s hearing, which will feature testimony from Twitter Inc. Chief Executive Jack Dorsey and Facebook Inc. Chief Operating Officer Sheryl Sandberg. Walker’s prepared testimony lists the four new types of disclosure the company promised concerning election advertising in his last congressional appearance in the fall of 2017. Those include databases listing election ads on Google search, YouTube and across the web, as well as a verification program and disclosures on political ads. Google has insisted that Alphabet CEO Larry Page and Google CEO Sundar Pichai wouldn’t be the best officials to appear despite the Intelligence committee’s desire to hear from decision makers. Sen. Mark Warner, the top Democrat on the Intelligence Committee, said in a tweet Tuesday that Dorsey and Sandberg will testify and that “Larry Page should be there, too. It’s not too late for @Google to step up.” The result appears to be a stalemate — and testimony that no one will deliver. Lawmakers on both sides of the aisle have increased pressure on technology companies after Russian interference in the 2016 presidential campaign and other election meddling as well as issues including alleged anti-conservative bias and antitrust questions.

Google snubbed a Senate hearing on internet meddling. How big a price will it pay? - Senators from both major parties tore into Google Wednesday for declining to send its top executive to a hearing on foreign internet campaigns to influence U.S. voters, an omission that one Republican senator called an “outrage.” Staff members on the Senate Intelligence Committee set up an empty chair to represent Google’s absence from the hearing and placed it next to Facebook and Twitter executives, who vowed to fight foreign agents from manipulating their social media platforms. The criticism was so intense of Google that experts said the Mountain View, California, tech giant will almost certainly have to change its approach to forestall or shape potential regulation from Capitol Hill. “It’s an unsustainable approach for Google,” said Daniel Schuman, policy director at Demand Progress, a nonprofit group that lobbies on issues related to the internet, civil liberties and government reform. “They will not reap long-term benefits from being rude or not engaging with Congress.” Chairman Richard Burr, a North Carolina Republican, said he was “disappointed” that the company didn’t agree to send “the right senior level executive” to the hearing, and Sen. Susan Collins of Maine, a fellow Republican, said it was “an outrage that your counterpart at Google isn’t at the table as well.” Criticism of Google came from across the political spectrum but was particularly harsh from Republican senators. Committee leaders had tussled with Google parent Alphabet over who it would send to testify, asking to hear from Alphabet chief executive Larry Page. The company declined to make Page available, instead offering Kent Walker, senior vice president and general counsel of Google. 

  The future is here today- you can’t play Bach on YouTube because Sony says they own his compositions -   James Rhodes, a pianist, performed a Bach composition for his Youtube channel, but it didn't stay up -- YouTube's Content ID system pulled it down and accused him of copyright infringement because Sony Music Global had claimed that they owned 47 seconds' worth of his personal performance of a song whose composer has been dead for 300 years. This is a glimpse of the near future. In one week, the European Parliament will vote on a proposal to force all online services to implement Content ID-style censorship, but not just for videos -- for audio, text, stills, code, everything.   Just last week, German music professor Ulrich Kaiser posted his research on automated censorship of classical music, in which he found that it was nearly impossible to post anything by composers like Bartok, Schubert, Puccini and Wagner, because companies large and small have fraudulently laid claim to their whole catalogs.

Sheryl Sandberg Misled Congress About Facebook’s Conscience - Sen. Marco Rubio, R-Fla., questioned Sandberg and Twitter CEO Jack Dorsey about the fact that they are both ostensibly American companies, but also firms with users around the world — including in countries with legal systems and values that differ drastically from the United States. Rubio cited various governments that crack down on, say, pro-democracy activism and that criminalize such speech. How can a company like Facebook claim that it’s committed to free expression as a global value while maintaining its adherence to rule of law on a local level? When it comes to democratic values, Rubio asked, “Do you support them only in the United States or are these principles that you feel obligated to support around the world?”Sandberg, as always, didn’t miss a beat: “We support these principles around the world.” Shortly thereafter she made the claim that Facebook simply would not do business in a country where these values couldn’t be maintained.Based on the information Facebook itself makes available, this is false. In its latest publicly available “transparency report,” Facebook says it helps block free expression as a matter of policy — so long as it’s technically legal in a given market. For instance, in the United Arab Emirates, a country that Human Rights Watch says “arbitrarily detains and in some cases forcibly disappears individuals who criticize the authorities,” Facebook does its part to help.  According to its most recent update on its compliance with UAE takedown requests — when a government or company requests that the social media giant remove content from its site — Facebook “restricted access to items in the UAE, all reported by the Telecommunications Regulatory Authority, a federal UAE government entity responsible for [information technology] sector in the UAE. The content was reported for hate speech and was attacking members of the royal family, which is against local laws.” It’s hard to imagine even Facebook’s legendary public relations team could construe censoring criticism of “the royal family” as anything resembling a democratic value. A similar entry from the report, on Pakistan, notes that Facebook “restricted access to items that were alleged to violate local laws prohibiting blasphemy and condemnation of the country’s independence.”

'The only answer': An unorthodox solution for regulating America's biggest tech giants is gaining steam on the right - The Fox News host Laura Ingraham last week asked House Minority Leader Kevin McCarthy about an idea that has gained some steam on the right, as conservatives have vented at large tech companies they accuse of bias. Ingraham told McCarthy, a California Republican leading the charge against Silicon Valley, that "there is another interesting idea beyond antitrust.""Consider Facebook and Twitter and so forth like a public utility, and thus they could be regulated like a public utility," she said. The point, she said, is that the companies like Facebook are "the town square.""And even though it is a private company, it dominates speech, dominates advertising ... so we have to treat a different way," she said.In response, McCarthy said he thought "Congress is going to look at everything from the perspective of how powerful they have become."The idea of regulating companies such as Facebook and Google as public utilities has been highlighted by some on the left as hypocritical. Strict government regulation of a business? Sounds socialistic.But it is getting renewed attention as those companies come under increased fire over their data practices, allegations of bias against conservatives, and foreign actors using the platforms to attempt to manipulate elections.Such regulation has been pushed by people on both the right and the left, albeit for differing reasons. The former White House chief strategist Steve Bannon is one of its most prominent proponents. If these platforms were treated as such, which would require an act of Congress, the government would be able to implement due process regarding the removal of content on the platforms.  The Fox News host Tucker Carlson, a proponent of more stringent regulation of Facebook and Google, told Business Insider last year that a reason tech regulation had not gained more traction on the right was that Republicans "have a gut-level resistance to criticizing corporations."  But he added: "Given the choice between a Democratic government overreaching and a private company overreaching, I would take the government any day of the week because at least there are mechanisms with which to hold it accountable."

Americans are changing their relationship with Facebook - Pew Research - Significant shares of Facebook users have taken steps in the past year to reframe their relationship with the social media platform. Just over half of Facebook users ages 18 and older (54%) say they have adjusted their privacy settings in the past 12 months, according to a new Pew Research Center survey. Around four-in-ten (42%) say they have taken a break from checking the platform for a period of several weeks or more, while around a quarter (26%) say they have deleted the Facebook app from their cellphone. All told, some 74% of Facebook users say they have taken at least one of these three actions in the past year. The findings come from a survey of U.S. adults conducted May 29-June 11, following revelations that the former consulting firm Cambridge Analytica had collected data on tens of millions of Facebook users without their knowledge. Facebook has separately faced scrutiny from conservative lawmakers and pundits over allegations that it suppresses conservative voices. The Center found that the vast majority of Republicans think that social platforms in general censor political speech they find objectionable. Despite these concerns, the poll found that nearly identical shares of Democrats and Republicans (including political independents who lean toward either party) use Facebook. Republicans are no more likely than Democrats to have taken a break from Facebook or deleted the app from their phone in the past year.  There are, however, age differences in the share of Facebook users who have recently taken some of these actions. Most notably, 44% of younger users (those ages 18 to 29) say they have deleted the Facebook app from their phone in the past year, nearly four times the share of users ages 65 and older (12%) who have done so. Similarly, older users are much less likely to say they have adjusted their Facebook privacy settings in the past 12 months: Only a third of Facebook users 65 and older have done this, compared with 64% of younger users. In earlier research, Pew Research Center has found that a larger share of younger than older adults use Facebook. Still, similar shares of older and younger users have taken a break from Facebook for a period of several weeks or more.

A Bonkers Conspiracy Theory About A ""Hillary Clinton Snuff Film" Is Getting A Big Boost On Facebook And YouTube - False claims are circulating online about a “Hillary Clinton snuff film” depicting the torture of a young girl as part of a satanic ritual, and the outlandish story is going viral thanks in part to distribution on Facebook and YouTube. The video is described as showing Clinton and her longtime aide Huma Abedin committing horrific acts of torture on a young girl, then drinking her blood. Despite the lack of any evidence for the existence of such a video, it has become tangled up in the bonkers conspiracy theory known as QAnon.While some versions of this false claim have circulated online for months, it got a big boost in mid-April when a website with a history of pushing falsehoods published a post claiming such a video was circulating on the dark web, the part of the internet only accessible with special software. “Many people are unable to watch the video due to the horrific nature of the content, according to sources familiar with the tape,” reads the post on Your News Wire, which publishes a mix of incendiary partisan content and outright fabrications.

Bots have been boosting QAnon since almost the moment it started - The most notable thing about the QAnon conspiracy theory might be how close it keeps treading into the orbit of the man it is about: Donald Trump. Supporters of the QAnon conspiracy theory were all over a Trump campaign rally last month in Wilkes-Barre, Pennsylvania, sporting T-shirts and signs and apparently unworried that anyone consuming coverage of the event would know they believe in a revisionist version of current events—narrated by “Q,” a mysterious online figure claiming to be a high-clearance government official—in which special counsel Robert Mueller is in fact working with the president to arrest a vast conspiracy (and pedophile ring) of global elites. If their presence at the rally seemed strange, however, it was nothing next to the appearance in the Oval Office two weeks ago of one of QAnon’s biggest promoters, radio host and YouTuber Lionel Lebron, posing for a photo with President Trump.  Q has been dropping clues, which he or she or they call “breadcrumbs,” for followers of the conspiracy theory to puzzle together via the /pol/ (for “politically incorrect”) channel on 4chan, the anything-goes message board where many of the most insidious far-right memes and misdeeds are hatched. These breadcrumbs are now feeding what looks like a not-exactly-minuscule audience of Americans: One of the larger Facebook pages has more than 23,000 followers, while comedian Roseanne Barr, known for her affinity for fringe-right thinking, has tweeted about Q at least four times. A recent Q post alleged that the late Sen. John McCain actually took his own life to avoid a trial by military tribunal.

Second Circuit Narrows Reach of Foreign Corrupt Practices Act -  Jerri-lynn Scofield -  The influential United States Court of Appeals for the Second Circuit ruled on August 24 in United States v. Hoskins that a non-resident foreign national cannot be liable for conspiracy to violate the Foreign Corrupt Practices Act (FCPA) or for an aiding and abetting  violation of that statute, unless the government shows the defendant acted as an agent of a domestic concern or that the defendant took action in furtherance of the violation while physically present in the United States. The Wall Street Journal highlighted the ruling’s significance in Court Upholds Narrower Jurisdiction in Foreign-Bribery Cases: The ruling illustrates the limits of the Foreign Corrupt Practices Act, and defense attorneys said it could prompt more challenges from companies or individuals accused of violating the law…. “By taking the narrower view of the statute, it is potentially a very significant pullback on the Justice Department’s ability to go after foreign companies and foreign individuals,” Most of the largest FCPA penalties have been levied against foreign companies, according to the WSJ (citing the FCPA blog). In a note to clients on the Hoskins decision, Sullivan & Cromwell (S & C) wrote: Given the tendency of companies subject to FCPA-related allegations to enter into negotiated settlements with the DOJ and SEC, litigated decisions construing the FCPA have been rare and largely limited to claims against individuals, who have less incentive to settle. Given this scarcity of judicial opinions construing the FCPA, decisions such as Hoskins provide useful guidance as to the elements and scope of liability under the statute. The S & C client note further spelled out the implications of the decision:: …[T]the Hoskins decision demonstrates an unwillingness on the part of certain courts to expand FCPA-related liability beyond the categories of persons explicitly subject to the statute. It potentially places a significant limitation on the application and extraterritorial reach of the FCPA and jeopardizes the government’s ability to charge foreign companies and individuals who have conspired to violate the FCPA, but who are not agents, employees, directors, or officers of any company that issues stock on a U.S. exchange or any other U.S. company and have not taken any action in furtherance of the FCPA violation while in the United States.  The degree to which this limitation will prove meaningful, however, remains to be seen.

Wells Tumbles As DOJ Launches New Probe After Review Found Widespread Document Altering - Another day, another scandal involving Warren Buffett's favorite bank.According to the WSJ, the DOJ is now probing whether employees committed fraud in Wells Fargo’s wholesale banking unit as a after revelations that employees improperly altered customer information. This follows a prior WSJ report that some employees in the unit added information on customer documents, such as Social Security numbers and dates of birth, without their consent.Meanwhile, the bank’s own review discovered in recent months that in its wholesale banking group the problems were more widespread than previously thought: problems with altered documents initially centered in the part of the wholesale banking business called the business banking group, which focuses on companies with annual sales of $5 million to $20 million. Wells Fargo has found similar problems in its commercial banking division, which primarily serves middle-market companies, and its corporate trust services group, which helps with the administration of securities issued by companies and governments, one of the people said.According to the Journal, employees altered the customer documents as Wells Fargo was rushing to meet a deadline to comply with a 2015 consent order from the Office of the Comptroller of the Currency.The regulator had ordered the bank to beef up its anti-money-laundering controls, including its processes for ensuring that there are proper identification documents and that the bank has the ability to see client activities across a common database.When the OCC issued the consent order, Wells Fargo had more than 100,000 customer accounts it needed to verify, the Journal previously reported. Wells Fargo in May formally asked the OCC for an extension beyond the initial June 30, 2018, deadline.As a result, over the past year, the bank has been reaching out to thousands of clients requesting updated documentation on information such as relevant client addresses or dates of birth. Banks must have certain information, known as “know your customer” regulatory requirements, in order to keep banking their clients. In other words, there was fraud everywhere, and then there was fraud to cover up the fraud..

Regulators extend comment period for Volcker Rule changes — Federal regulators have extended the comment period for a proposal to revise the Volcker Rule.In June, the Federal Deposit Insurance Corp., Federal Reserve Board, Office of the Comptroller of the Currency and two other regulators proposed making changes to the proprietary trading ban that was enacted as a provision of the Dodd-Frank Act.  Under the proposal, Volcker Rule compliance would be revised, the rule would be tailored for institutions that participate in fewer trading activities and the definitions of certain prohibited trades would be altered. The agencies also proposed making it easier for foreign banks with a U.S. presence to make non-U.S. trades. However, some banks are concerned that the revisions to the rule could actually complicate compliance and limit trading. The Wall Street Journal reported last month that industry representatives had met with the Fed to share their concerns about the proposal.  The comment period was set to close on Sept. 17 but will now end a month later, on Oct. 17, in response to requests from commenters. The extension “will allow interested persons additional time to analyze the proposal and prepare their comments,” the agencies said in a release. FDIC Chairman Jelena McWilliams had signaled last month that the agencies were willing to extend the comment period.

FDIC's Gruenberg reiterates opposition to capital rule changes - — Former Federal Deposit Insurance Corp. Chairman Martin Gruenberg reiterated his opposition to proposed changes to the enhanced supplementary leverage ratio backed by the Federal Reserve and the Office of the Comptroller of the Currency.Gruenberg, who now serves as a member of the FDIC board, said the proposed changes would make banks more vulnerable to “disruption and failure.” According to some estimates, the plan would lower the required capital held by "global systemically important banks" by $121 billion.“[The changes] are not technical fixes,” Gruenberg said in a speech Thursday at the Peterson Institute for International Economics. “They would significantly weaken constraints on financial leverage in systemically important banks put in place in response to the crisis.”Gruenberg rebutted two arguments made in support of the changes to the leverage ratio. Some have argued that reducing the eSLR would no longer make it a binding constraint and would avoid discouraging low-risk activities. It has also been argued that lowering the ratio will make banks safer by making risk-based capital the binding constraint.Gruenberg said a bank’s risk of failure depends on the risk profile of its assets and the capital it holds.“Research on bank failures typically concludes that more capital reduces the risk of bank failure and vice versa,” Gruenberg said.Gruenberg also criticized arguments that holding company capital requirements and the Fed’s Comprehensive Capital Analysis and Review will “essentially trap” capital at the holding company, saying that if the capital reduction is paid to the parent company in dividends or transferred to nonbank affiliates, it could be unavailable to absorb losses. He also said that CCAR is a discretionary process and does not provide enough certainty.

Are fintechs a systemic risk? - The fintech sector poses a growing risk to the financial system because it lacks the regulatory restraints put on banks, according to a new paper released Thursday by Federal Financial Analytics. The paper argues there are threats in a number of areas related to fintechs and big tech firms, including the potential for credit discrimination and violations of consumer privacy. But the biggest hazard of all is monopolistic cloud providers. Financial companies and government agencies' dependence on these providers, which lack the same capital and operational resiliency requirements that are imposed on systemically important financial institutions, could prove to be a weak point that endangers the entire economy. “What if, for example, not only the private financial system but the Fed also were reliant on a cloud service provider? Not only could the system blow but the Fed’s ability to interact with it could go, too,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics and the paper's author, in an interview. “It’s a classic concentration risk, but it’s in the critical infrastructure.” Petrou sees a parallel between the events leading up to the mortgage crisis of 2008 and what’s going on in fintech today.“Industry regulators recognize there are significant benefits [to fintech innovation]; It’s not only really cool, but often really useful,” she said. “And everybody is afraid to monkey with it, much as in the run-up to the 2008 crisis, everyone was afraid to do anything meaningful about mortgage regulation because of the American dream of home ownership. Now we have an American ideal of technological innovation, but nothing is that perfect. Nothing is risk free.” The paper also examines the risk from fintechs' role in "virtualized finance," where a financial transaction is fully electronic from inception to termination, such as a Venmo payment. “Virtualizing financial risk by housing it in fintech companies does not change the fundamental nature of actual risk,” Petrou wrote. “Most tectonic shifts of this magnitude end in earthquakes.”

Credit unions go on offense with plan to revive Glass-Steagall  - Ten years after the collapse of Lehman Brothers and "too big to fail," the National Association of Federally-Insured Credit Unions is going on the offensive against big banks and calling for a modern-day Glass-Steagall Act.In a new white paper, NAFCU calls on legislators to separate traditional banks — ones working primarily with savings and checking accounts — from riskier financial institutions such as hedge funds and investment banks. The trade group’s action is notable because credit unions rarely tackle legislation or regulations that don't specifically apply to credit unions. In most credit union-versus-bank battles, CUs play defense, not offense. Enacted in 1933 as a response to the Stock Market Crash, the Glass-Steagall Act separated commercial banking from investment banking for 66 years, until its demise at the hands of Bill Clinton through the Gramm-Leach-Bliley Act. In an interview with Credit Union Journal, NAFCU CEO Dan Berger explained that the trade group is taking a two-pronged approach with its efforts.“The first prong was to start a policy discussion to protect our industry from any economic downturn or the steroids that the big banks need to be on when there is a down cycle" in the economy, Berger said. “The second is that you have to punch the schoolyard bully in the nose and you have to fight back.”“The banking trade associations are on Capitol Hill everyday passing out talking points against credit unions, so now we’re pushing back,” he added.The rift between banks and credit unions is well known, “but this year shows that schism that really started with the financial crisis continue to play itself out here,” said Ed Mills, public policy analyst at Raymond James. NAFCU stopped short of calling for the breakup of big banks, suggesting that decision be left up to Congress.

D.C. was up in arms over Equifax breach — what happened?  — There is an adage here that it takes a crisis to compel legislative reform. But a year after the massive data breach at Equifax came to light, the momentum behind fixing credit reporting and data security failings has largely fizzled.In the weeks following news of the breach, congressional hearings and other blowback for the company were accompanied by legislative calls to action. Bills to address data security, credit bureau procedures, data breach notifications and other areas were introduced. But with some exception, legislative efforts to prevent such breaches or mitigate their impact have lost steam. The immediacy of the Equifax breach dissipated, taken over by the tax reform overhaul and other legislative fights. The deregulation focus of the Trump administration and GOP-held Congress have also diverted attention. “There has been little to no action in Congress that relates to the Equifax data breach or enacting legislation which creates future remedies or legislation designed to prevent such massive data breaches,” said Jim Francis, an attorney at Francis & Mailman, a firm that focuses on consumer protection litigation.  Equifax announced the breach, believed to have started as early as May 2017, on Sept. 7 of last year. Initial estimates were that it had affected 143 million consumers, but that figure was raised to 148 consumers. What followed were a string of congressional hearings in front of multiple committees for Richard Smith, who had already stepped down as CEO. Further recriminations included insider trading charges against former employees. But all the focus on the breach did not result in significant reforms, including little movement on data security proposals that had been kicking around Washington in the wake of other breaches. Lawmakers introduced and reintroduced legislation dealing with breach notifications, how personal data is handled and instituting fines for data breaches at credit bureau, among other ideas. But none of them were enacted. “It did not precipitate the enactment of a federal data breach notification law,”  While Equifax took some voluntary steps to enable consumers to freeze their credit files, the credit reporting system dominated by the company and its two main rivals — Experian and TransUnion — has been mostly untouched by federal policymakers.  “We have never gone to the core root of anything,” said Ed Mills, a policy analyst at Raymond James.

JP Morgan's top quant warns next crisis to have flash crashes and social unrest not seen in 50 years - Sudden, severe stock sell-offs sparked by lightning-fast machines. Unprecedented actions by central banks to shore up asset prices. Social unrest not seen in the U.S. in half a century. That's how J.P. Morgan Chase's head quant Marko Kolanovic envisions the next financial crisis. The forces that have transformed markets in the last decade, namely the rise of computerized trading and passive investing, are setting up conditions for potentially violent moves once the current bull market ends, according to a report from Kolanovic sent to the bank's clients on Tuesday. His note is part of a 168-page mega-report, written for the tenth anniversary of the 2008 financial crisis, with perspectives from 48 of the bank's analysts and economists.  Kolanovic, a 43-year old analyst with a PhD in theoretical physics, has risen in prominence for explaining, and occasionallypredicting, how the new, algorithm-dominated stock market will behave. The current bull rally, the oldest in modern history by some measures, has been characterized by long periods of calm punctuated with spasms of selling known as flash crashes. Recent examples include a 1,600 point intraday drop in February and a 1,100 point decline in August 2015. "They are very rapid, sharp declines in asset values with sharp increases in market volatility," Kolanovic, the bank's global head of macro quantitative and derivatives research, said in a recent interview. But those flash crashes occurred during a backdrop of a U.S. economic expansion; the new market hasn't been tested in the throes of a recession, he said. "If you have these liquidity-driven sharp selloffs that come at the end of the cycle, or maybe even causes the end of the cycle, then I think you can have a much more significant asset price correction and even more significant increase in market volatility," Kolanovic said.

 Would CFPB nominee hamstring the agency by slashing its budget? -- If Kathy Kraninger ultimately gets confirmed as the next permanent director of the Consumer Financial Protection Bureau, many experts expect the agency will undergo a major cost-cutting effort.  Kraninger, a senior official at the Office of Management and Budget, was mostly tight-lipped about her plans for the agency at her July nomination hearing. But watchers saw clear signals of her interest in the agency's budget as a focus, as well as in conducting cost-benefit analyses of all rulemakings. “Being from OMB, I think [Kraninger’s] going to really go through the agency and determine what value is being had for the money being spent,” said Keith Noreika, a partner at Simpson Thacher and the former acting comptroller of the currency.  The Senate Banking Committee approved Kraninger's nomination last month along strictly party lines. Observers say the odds favor her confirmation in the full Senate, but she faces a tight congressional calendar and strong Democratic opposition over her lack of a consumer protection background. But assuming she takes the agency's reins, many expect her to continue the same pro-business deregulatory agenda put in place by Mick Mulvaney, her boss as OMB director and the CFPB's current acting director. No one knows yet how deep Kraninger would cut the CFPB’s budget, but President Trump’s proposed budget called for a 23% drop in the bureau’s funding in 2019. Although the CFPB sets its own actual budget, Democrats questioning Kraninger at her hearing zeroed in on the administration's proposed spending cut for the CFPB and the nominee's work on the Trump budget. Sen. Elizabeth Warren, D-Mass., the CFPB's architect, grilled Kraninger on where the agency would focus its budget reduction.

August 2018: Unofficial Problem Bank list declines to 82 Institutions -- Note: Surferdude808 compiles an unofficial list of Problem Banks compiled only from public sources. Here is the unofficial problem bank list for August 2018. Here are the monthly changes and a few comments from surferdude808: Update on the Unofficial Problem Bank List for August 2018. During the month, the list had a decline of seven insured institutions to 82 banks. Aggregate assets were little changed staying at a rounded $57.3 billion after a deduction of $1.3 billion for the removals and an addition of $1.3 billion for asset growth during the second quarter. A year ago, the list held 123 institutions with assets of $28.3 billion. Actions were terminated against Urban Partnership Bank, Chicago, IL ($442 million); Old Dominion National Bank, North Garden, VA ($222 million); and Providence Bank, Alpharetta, GA ($85 million). Finding their way off the list through merger were One Bank & Trust, National Association, Little Rock, AR ($266 million); Hometown Bank, National Association, Carthage, MO ($182 million); Liberty FSB, Enid, OK ($75 million); and High Desert Bank, Bend, OR ($20 million). On August 23rd, the FDIC released industry results for the second quarter of 2018 and disclosed that the Official Problem Bank List held 82 banks with assets of $54.4 billion.

Hensarling gives GSE reform another try - — House Financial Services Committee Chairman Jeb Hensarling, R-Texas, and Rep. John Delaney, D-Md., are unveiling a new housing finance reform plan that would repeal the charters of mortgage giants Fannie Mae and Freddie Mac. The plan will allow qualified mortgages backed by a private credit enhancer with capital resources to access the explicit government securitization guarantee provided by Ginnie Mae, Hensarling said Thursday. He discussed the bill at the start of a hearing on the 10-year-old conservatorships of the government-sponsored enterprises. The plan is among a still-growing list of proposed frameworks for the future of housing finance. “While by no means perfect, we offer this proposal as a grand bargain on how to move past an increasingly dangerous status quo,” he said. The plan will preserve several elements of the current system, including liquidity and the 30-year, pre-payable fixed mortgage, said Hensarling, who is leaving Congress at the end of this year. He announced the new legislation late Wednesday in an op-ed in The Wall Street Journal. "The compromise plan would permanently repeal the Fannie and Freddie charters, ending the monopoly model," Hensarling wrote in the article. "In its place it proposes using Ginnie Mae, the government corporation that explicitly backs the payment of principal and interest to investors in Federal Housing Administration and other government-insured loans. The proposal would direct the corporation to guarantee qualified privately insured mortgage-backed securities." 

Will federal control of Fannie and Freddie ever end? — Ten years ago on Friday, then-Treasury Secretary Henry Paulson referred to the unprecedented government action at that time to keep Fannie Mae and Freddie Mac afloat as a "time out.""We will make a grave error if we don't use this time out to permanently address the structural issues presented by the" government-sponsored enterprises, Paulson said at a press conference on Sept. 7, 2008, one day after the GSEs had been placed in conservatorship.But a decade later, nothing about the federal takeover of the mortgage giants seems temporary. It is the status quo. Efforts for comprehensive housing finance reform keep getting derailed, leaving many to wonder if it will take a disruptive event — a sudden change in political power, another crisis or something else — to force policymakers to set the GSEs on a permanent path forward.“If you told us back then that we would have been stuck in this limbo for this long, I think there might have been more of an appetite to tackle Fannie and Freddie" reform, said Jim Parrott, a fellow at the Urban Institute and a former housing adviser to President Obama.The 10-year limbo has been eventful. With the companies stabilized under the watch of Treasury and the Federal Housing Finance Agency, lawmakers have mounted concerted efforts to pass GSE reform, but all have failed. The FHFA has taken steps at administrative reform. Meanwhile, the chaos of the 2008 crisis have been replaced with debates over the necessity of the conservatorships, how the takeover has affected the GSEs' capital and whether the government should simply let go of the GSEs.While it is hard to see any end in sight for this "time out," experts have placed bets on a triggering event that could bring more certainty. Predictions that the Democrats could retake the House in November leave some hopeful that congressional leaders will break their stalemate over GSE reform. Others point to the Trump administration soon being able to pick its own FHFA director as a reason for optimism. But none of those are sure bets, leaving open the possibility of more uncertainty and even that another crisis could arrive before long-term GSE reform.

CMBS delinquencies decline, still higher than other loan types: MBA - Delinquencies for loans securing commercial mortgage-backed securities continued to decline, although they are still well above rates for other types of investors, according to data compiled by the Mortgage Bankers Association.There was a 3.52% delinquency rate for CMBS loans — defined as those 30 days or more late with their payment and REO — in the second quarter, down from 3.93% in the first quarter and 4.84% in the second quarter of 2017.This is the lowest CMBS delinquency rate since 2008. At year-end in both 2006 and 2007, the delinquency rate for these loans was at a low point of 0.39%.The MBA uses different sources for each investor type to compile the delinquency report, which use their own definitions to calculate the rate. There was a 2% year-to-date increase in commercial and multifamily lending for the second quarter, the trade group previously said. By investor type, only Fannie Mae had a higher delinquency rate (loans where the payments were 60 days or more late) year-over-year in the second quarter, to 0.10% from 0.04%. In the first quarter, Fannie Mae had a delinquency rate of 0.13%.  Commercial mortgage loans on bank balance sheets (which include loans secured by owner-occupied properties) had a 0.50% 90-day-or-more delinquency rate in the second quarter, the lowest since the MBA started compiling this information, Jamie Woodwell, vice president of commercial real estate research, said in a press release. This compares with 0.51% in the first quarter and 0.54% in 2017's second quarter. At the end of 2010, the delinquency rate was 4.21%.

Private-label RMBS on track to set a new post-crisis record - The dollar volume of private-label residential mortgage-backed securities issuance this year is the highest it has been since the Great Recession, despite a decline in new originations. "Combined 2018 issuance activity in the prime and nonprime RMBS sectors is on pace to more than double the previous highest annual total since the financial crisis," Fitch analysts Court Lake and Ryan O'Loughlin said in a recent report. Private RMBS issuance through July 31 totaled $18.8 billion, up from $14.7 billion last year, according to data from Fitch and Bloomberg In addition to being the strongest post-crisis year in terms of dollar volume, 2018 has already matched 2015's post-crisis record for transaction volume. There were 40 private-label RMBS deals issued through July of this year. Last year there were 34 transactions issued, and in 2016, there were 22.  A growing amount of nonprime issuance is contributing to higher yearly totals. There were 14 nonprime deals totaling more than $5 billion through July 2018. That means nonprime volume has grown significantly since 2015, when there were just five transactions totaling $500 million. There was virtually no post-crisis issuance of nonprime product prior to that year. The increase in nonprime securitization and issuance overall during a year when origination volumes are lower suggests loans from a broader range of borrowers are going into deals, which can have implications for loan performance. So far in 2018, securitized prime jumbo delinquencies are up slightly but delinquencies in the nonprime market are lower.The 30-day delinquency rate for the nonprime RMBS sector fell to 2% this year from 3.7% in 2017, according to data analyzed by Fitch and CoreLogic's Loan Performance division. The prime jumbo sector's 30-day delinquency rate rose to 0.8% this year from 0.4% last year.

MBA: Mortgage Applications Decreased Slightly in Latest Weekly Survey -- From the MBA: Mortgage Applications Slightly Decrease in Latest MBA Weekly SurveyMortgage applications decreased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 31, 2018... The Refinance Index decreased 1 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 2 percent higher than the same week one year ago. ... The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 4.80 percent from 4.78 percent, with points decreasing to 0.43 from 0.46 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.The first graph shows the refinance index since 1990. Refinance activity will not pick up significantly unless mortgage rates fall 50 bps or more from the recent level.

CoreLogic: House Prices up 6.2% Year-over-year in July -- The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA). From CoreLogic: oreLogic Reports July Home Prices Increased by 6.2 Percent, Homeowners Waiting to Sell for Anticipated Increase Return on Investment CoreLogic® ... today released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for July 2018, which shows home prices rose both year over year and month over month. Home prices increased nationally by 6.2 percent year over year from July 2017 to July 2018. On a month-over-month basis, prices increased by 0.3 percent in July 2018 compared with June 2018. (June 2018 data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results each month.)Looking ahead, the CoreLogic HPI Forecast indicates that the national home-price index is projected to continue to increase by 5.1 percent on a year-over-year basis from July 2018 to July 2019. On a month-over-month basis, homeprices are expected to decrease by 0.2 percent from July to August 2018. The CoreLogic HPI Forecast is a projection of home prices that is calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.“With increased interest rates and home prices, the CoreLogic Home Price Index is rising at a slower rate than it was a year ago,” said Dr. Frank Nothaft, chief economist for CoreLogic. “While markets in the western part of the country continue to experience rapid home-price growth, many of those metros are overvalued, and will likely experience a slowdown soon.” CR Note: The CoreLogic YoY increase has been in the 5% to 7% range for the last few years.  This is near the middle of that range.  The year-over-year comparison has been positive for over six consecutive years since turning positive year-over-year in February 2012.

Miami home values show how 'climate gentrification' is changing coastal real estate - A modern glass home sits on the edge of the water in Miami Beach. The ground-level master suite has a soaking tub that looks out to the ocean, and the bedroom's glass doors allow the owner to roll out of the sheets and onto the yacht. It is listed for sale at $25 million. Another Miami home sits on a garbage-strewn street in Little Haiti, about five miles inland. Its owner can walk out the front door and see a dead chicken in the street. It is listed for sale at $559,000, but some experts claim it is a better investment than $25 million mansion. The mansion, while highly desirable and exquisitely appointed, is paradise at a price, because rising tides and increasingly extreme storms may already be lowering its value. On the other hand, the home in Little Haiti, which sits on high ground with little risk of flooding, is appreciating at a fast clip. It has nearly doubled in value in just the past two years, according to Zillow. "What we see here is a theory of climate gentrification that suggests that in Miami, higher elevation land will be worth more," said Harvard University's Jesse Keenan, who co-authored the first peer-reviewed study offering evidence of the existence of a climate change signal in the real estate market. The study tracked the values of more than 100,000 single-family homes across Miami going back 45 years. "What we found is that the higher elevation properties are essentially worth more now, and increasingly will be worth more in the future,"

Average US Rent Hits All Time High Of $1,412; Biggest Increase In 18 Months - With core CPI printing at a frothy 2.4%, and the Fed's preferred inflation metric, core PCE finally hitting the Fed's 2.0% bogey for the first time since 2012, inflation watchers are confused why Jerome Powell's recent Jackson Hole speech was surprisingly dovish even as inflation threatens to ramp higher in a time of protectionism and tariffs threatening to push prices even higher. But the biggest concern from an inflation "basket" standpoint has little to do with Trump's trade war, and everything to do with shelter costs, and especially rent, the single biggest contributor to the Fed's inflation calculation. It's a concern because according to the latest report from RentCafe and Yardi Matrix,  which compiles data from actual rents charged in the 252 largest US cities, fewer than expected apartment deliveries this year increased competition among existing units, pushing up the national average rent by another 3.1% - the highest monthly increase in 18 months -  to $1,412 in August, an all time high.  The national average monthly rent swelled by $42 since last August and $2 since last month. Above-average numbers of renters renewing leases at the end of the summer and heightened demand from college-age renters also contributed to the rise in rents this time of year.

Construction Spending increased 0.1% in July -- Earlier today, the Census Bureau reported that overall construction spending increased slightly in July:Construction spending during July 2018 was estimated at a seasonally adjusted annual rate of $1,315.4 billion, 0.1 percent above the revised June estimate of $1,314.2 billion. The July figure is 5.8 percent above the July 2017 estimate of $1,242.8 billion.Private spending decreased and public spending increased: Spending on private construction was at a seasonally adjusted annual rate of $1,010.9 billion,0.1 percent below the revised June estimate of $1,011.9 billion. ... In July, the estimated seasonally adjusted annual rate of public construction spending was $304.5 billion, 0.7 percent above the revised June estimate of $302.3 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 17% below the bubble peak. Non-residential spending is 9% above the previous peak in January 2008 (nominal dollars). Public construction spending is now 6% below the peak in March 2009, and 16% above the austerity low in February 2014. Year-over-year Construction SpendingThe second graph shows the year-over-year change in construction spending. On a year-over-year basis, private residential construction spending is up 7%. Non-residential spending is up 3% year-over-year. Public spending is up 8% year-over-year. This was below the consensus forecast of a 0.4% increase for July. Also, construction spending for May and June were revised down.

July residential construction spending: pause or peak? -- While the ISM manufacturing index came in very hot this morning (I'll wait for graphs to update before I discuss in any detail), residential construction spending continued its recent flatness. To recap, while construction spending lags housing sales, permits, and starts, it has the virtue of being the least noisy of any housing metric, and it still does lead the economy as a whole.  Here's what it looks like (blue) through July compared with single family housing permits (red): Its reading in July, while up from June, was below that for February, April, and May.   Here are the same two metrics as YoY% changes, starting from midyear 2014: It is apparent that the rate of growth of both is still positive, but has very much decelerated.  In fact, the YoY% growth in residential construction spending is the lowest in 6 years. Residential construction is consistent with both a pause in housing growth, and a cyclical peak. House prices are likely to continue to rise, putting more pressure on housing. So the big question is, what happens to mortgage rates in the next few months?

Update: Framing Lumber Prices Off from Record Highs - Here is another monthly update on framing lumber prices.   Lumber prices declined in August from the recent record highs, but are still up year-over-year. This graph shows two measures of lumber prices: 1) Framing Lumber from Random Lengths through August 24, 2018 (via NAHB), and 2) CME framing futures. Right now Random Lengths prices are up 11% from a year ago, and CME futures are up about 19% year-over-year. There is a seasonal pattern for lumber prices. Prices frequently peak around May, and bottom around October or November - although there is quite a bit of seasonal variability.

 1 in 10 Americans say they’ll be in debt for the rest of their lives — reality is way worse -- A new study from Northwestern Mutual has found that many Americans are sinking in debt, and don't expect to climb out of it any time soon; the study found that more than one in 10 Americans say they will be in debt for the rest of their lives. The reality, however, may be bleaker.For its 2018 Planning and Progress Study, Northwestern Mutual surveyed 2,003 U.S. adults, revealing just how far deep in debt Americans are. Northwestern Mutual found that 13 percent say they will be in debt the rest of their lives.But looking at a 2017 study from Experian and, 73 percent of consumers had outstanding debt when they were reported deceased. Though there was no information on how long they carried the debt, those who died with debt had an average total balance of $61,554, including mortgage debt; without home loans, the report states there was an average balance of $12,875. Of those 73 percent who died with debt, 68 percent had credit card balances, 37 percent had mortgage debt and 25 percent had auto loans. Twelve percent died with personal loans and 6 percent with student's study used data based on Experian's FileOne database, which consists of 220 million consumers. Experian looked at consumers who, as of October 2016, were not deceased, but then showed as deceased December 2016. There was no information on how long the debt was carried. In contrast, Northwestern Mutual's survey found that 43 percent of Americans expect to be in debt for just one to five more years, 19 percent six to 10 years and 15 percent 11 to 20 years.

 1 In 5 Americans Would Take On Debt To Afford The New iPhone - Apple may be bracing to ship 20% fewer iPhones later this year after its newest models, specs of which leaked earlier this week, finally hit the market, but that doesn't mean the cultural cache of owning an iPhone has in any way diminished. While reports of a decline in component orders earlier this year could be chalked up to market saturation or the higher price point (consumers could be asked to shell out as much as $1,400 for the most expensive new models, according to reports that have been circulating since before last year's launch), an interesting new survey by WalletHub revealed that many American handset owners simply don't care about the price. Indeed, at a time when total household debt is hitting one record after the next and revolving credit is soaring, nearly 28 million Americans believe that owning the newest iPhone is worth racking up debt. According to WalletHub’s 2018 Credit Score and iPhone survey, this view is particularly prominent among millennials. More than 18% of respondents under the age of 45 said it would be worth going into debt for the phone, compared with 5% of those who are more than 45 years old. Despite the deluge of debt being incurred by the American consumer, credit scores remain generally high (unsurprising considering the robust Trump-era economy). Thanks to this trend, millions of consumers can access financing plans that will help them purchase new phones, ensuring a bump to device sales for the first company publicly traded in the US to reach $1 trillion market cap.

Google Tracking 70% Of Retail Purchases Thanks To Secret Deal With Mastercard  --Over the past year, certain Google advertisers have been able to use a "potent new tool" which allows them to track whether ads they run online translated to sales at physical stores throughout the United States, thanks to a secret deal between the Silicon Valley tech giant and Mastercard, reports Bloomberg.  Most of Mastercard's two billion customers weren't aware of this arrangement, since neither Google parent Alphabet Inc. nor the credit card company told the public about the deal which was brokered after four years of negotiations. The alliance, says Bloomberg, "gave Google an unprecedented asset for measuring retail spending," as part of the search giant's "strategy to fortify its primary business against onslaughts from Inc. and others." Through this test program, Google can anonymously match these existing user profiles to purchases made in physical stores. The result is powerful: Google knows that people clicked on ads and can now tell advertisers that this activity led to actual store sales....It works like this: a person searches for "red lipstick" on Google, clicks on an ad, surfs the web but doesn’t buy anything. Later, she walks into a store and buys red lipstick with her Mastercard. The advertiser who ran the ad is fed a report from Google, listing the sale along with other transactions in a column that reads "Offline Revenue" -- only if the web surfer is logged into a Google account online and made the purchase within 30 days of clicking the ad. The advertisers are given a bulk report with the percentage of shoppers who clicked or viewed an ad then made a relevant purchase. -BloombergLast year Google boasted that that the service, called "Store Sales Management," had access to "approximately 70 percent" of US credit and debit cards. 

GM Sales Plunge 13% As August Passenger Car Sales Collapse - When GM surprised the market several months ago with its announcement that, unlike most other US automakers, it would stop disclosing monthly sales, some immediately saw through this as a thinly veiled confirmation that pain is coming. Nowhere was that more obvious than in the company's August sales, which while undisclosed, predictably leaked with Bloomberg reporting that in the last month, GM sales plunged 13% for the same reason most other automakers saw a sharp drop in July sales: a sharp pull back on sales incentives, especially for full-size pickups.In addition to the biggest drop in years, GM's total sales also missed analysts’ average estimate for a decline of 7.7%. Speaking to Bloomberg, company spokesman Jim Cain refused to comment on the sales drop, but he did confirm that GM dialed back discounts during the month.The report extended the decline for GM shares, which dropped 1.3% to $35.58. The stock is now down 13% YTD.  Meanwhile, other OEMs also reported weak August results: with the exception of Ford Motor, all other major automakers also reported sales that trailed analysts’ estimates, as demand for passenger cars including the Honda Accord and Toyota Camry plunged.

U.S. Light Vehicle Sales at 16.7 million annual rate in August  -- Based on a preliminary estimate from AutoData, light vehicle sales were at a 16.7 million SAAR in August. Note: All other data from the BEA (the BEA will report this month's sales soon). That is up 1.5% year-over-year from August 2017, and unchanged from last month. This graph shows the historical light vehicle sales from the BEA (blue) and an estimate for August (red, light vehicle sales of 16.7 million SAAR from AutoData). Note that this was an easy comparison to last August, since sales in August 2017 were negatively impacted by hurricanes. The increase in sales at the end of 2017 was due to buying following the hurricanes. Sales will probably decline in 2018 after setting new sales records in both 2015 and 2016. The second graph shows light vehicle sales since the BEA started keeping data in 1967. This was below the consensus forecast for August.

Average New Car Payment Hits Record High $525 Per Month Automotive loan amounts and monthly payments continue to reach record highs, but US consumers seem unfazed. According to Experian's latest State of the Automotive Finance Market report, Americans are paying an all time high monthly payment for both a new and a used car and assuming a larger amount of debt to make it happen as affordability continues to decline. Americans now hold $1.149 trillion of outstanding auto loan debt (a record) up from $1.027 trillion two years ago..... with the average new car loan jumping $724 year-over-year to $30,958 in Q2 2018, while used vehicle loan amounts increased $520 to reach $19,708. Meanwhile, the average new-vehicle monthly loan payment hit a record $525 in the second quarter, up $20 from a year ago..... while the average monthly payment for a used vehicle also hit a record $378 per month.  "I think we're certainly at a point where affordability is a question," said Melinda Zabritski, Experian's senior director of automotive finance solutions one quarter ago, and the trend has only worsened since. "When you look at how much income you need to support that payment, it certainly is higher than your average individual income." And while one reason people are spending more is because they are buying more trucks and SUVs, which are sold at higher price points, a far more important factor, especially in the last year, is the rise in interest rates. "For some buyers, this is going to come as a surprise," said Jessica Caldwell, executive director of Industry Analysis for "For buyers with average credit scores, the rates are higher than a couple years ago and that will mean a higher monthly payment." Taking a closer look at the data, the gap between new and used financing payments continues to widen, reaching $147 in the second quarter. For some consumers, that gap can often mean the difference between buying a new or used vehicle.

Automakers Take Note: Americans Are Changing How They Commute to Work - Wolf Richter - Since we’re keeping a keen eye on the auto industry, this trend could become meaningful.  In large urban areas where millions of people are trying to get to work every day, commutes can be long and stressful. As conditions go from awful to %#@*& terrible, people are trying to find alternatives – moving closer to work, taking mass transit, telecommuting, walking, etc. And driving, while still by far the top way of getting to work in America, has lost some ground. Back in August 2007, 85% of adults with full-time or part-time jobs drove themselves to work; and another 6% rode to work with someone else (such as riding with the spouse, car-pooling, etc.). In total 91% got to work by car. In August 2017, this total was down to 83%; with 6% getting rides, but only 77% driving themselves to work. This is what Gallup determined in a poll, where it asked, among other things, this open-ended question:How do you generally get to work – do you drive yourself, ride with someone else, walk, take mass transportation or something else?For this open-ended category of “something else,” respondents added in three options “work at home/telecommute,” “bicycle,” and “something else.” In total, respondents named five alternatives to taking a car, and this is how the use of those five alternatives changed from August 2007 to August 2018:

  • Take mass transportation: rose from 4% to 6%
  • Work at home/telecommute: rose from 1% to 3%
  • Walk: rose from 3% to 5%
  • Use bicycle: rose from 0% to 1%
  • Use something else: stayed at 1%.

In total, 9% of the workers in 2007 were using these alternatives. By August 2018, this jumped to 16%. The chart shows the percent of people who are getting to work by car (columns) – driving (black) and getting a ride (blue) – and using the alternatives (red line):

Comcast Is Trying To Ban States From Protecting Broadband & TV Consumers - We’ve repeatedly tried to make it clear that while everybody tends to focus on the death of net neutrality itself, the Pai FCC’s “Restoring Internet Freedom” order killing net neutrality had a farbroader impact than just killing net neutrality rules. As part of the repeal, Comcast, Verizon and AT&T also convinced FCC boss Ajit Pai to effectively neuter FCC authority over ISPs entirely, making it harder for the agency to hold giant ISPs accountable on a wide variety of issues ranging from privacy to transparency (the recent fire fighter kerfuffle being a prime example). The order also attempts to ban individual states from holding giant ISPs accountable as well, though early ISP efforts to take advantage of this legal language haven’t gone very well. In an effort to double down on weakening state oversight of natural telecom monopolies, Comcast lobbyists at the NCTA (the cable industry’s biggest lobbying and policy organization) have also started petitioning the FTC, urging it to similarly “pre-empt” (read: ban or ignore) state-level efforts to protect consumers:“The FTC should ensure that the Internet is subject to uniform, consistent federal regulations, including by issuing guidance explicitly setting forth that inconsistent state and local requirements are preempted,” the NCTA wrote.The FCC is already trying to preempt state net neutrality laws at the urging of industry groups, and courts might ultimately have to decide whether federal agencies can preempt such rules.“The FTC should endorse and reinforce the FCC’s ruling by issuing guidance to state attorneys general and consumer protection authorities reaffirming that they are bound by FCC and FTC precedent in this arena,” NCTA argued.” The shorter version: the FCC’s Restoring Internet Freedom order effectively cripples the FCC’s ability to protect consumers, then shovels any remaining enforcement authority over to the FTC, which is ill-equipped to actually police the telecom market. Predicting that states would then try to jump in and fill the oversight accountability vacuum (which is precisely what started happening on both net neutrality and privacy), ISPs have also been urging both the FCC and the FTC to ban states from doing so.

What California’s Net Neutrality Victory Means for the Rest of the Country - Internet service providers interested in selling a tiered internet were dealt a major blow on Friday when the state Senate approved net neutrality protections for its people. Essentially, net neutrality is achieved when all internet content loads at the same speed, regardless of type. We know, it sounds incredibly boring, as comedian John Oliver first pointed out in 2014: California Governor Jerry Brown hasn’t commented on the bill’s passage, but he has until the end of September to sign the bill into law or veto it. If he does, it could start a wave of support for restoring net neutrality across the U.S. The California Cable & Telecommunications Association, a trade group that represents the interests of ISPs, called for “permanent bipartisan federal legislation” after the bill passed the state Assembly on Thursday, and for Brown to veto it after it passed the Senate on Friday. If signed into law, SB 822 will go down in history as the public’s first sharp rejoinder to the FCC’s deeply unpopular repeal last year.  The victory in California creates even stronger consumer protections than the Obama-era ones the FCC repealed: It bans cell phone companies from offering a “zero rating” feature to plans that would allow customers to stream music (or other media) at no cost to their data plan, effectively freezing out the competition. Not even the Obama-era FCC rules offered that protection. California’s victory may create a domino effect, too. ISPs have little interest in creating different streaming plans by state. It’s a logistical and technological nightmare. If SB 822 becomes law, someone in California will have all their internet content load at the same speed. If that person crosses the border into Nevada, where there are no net neutrality protections, the speeds change to fit whatever other pricing scheme has been sold to the customer there. It’s complicated.

Pissed Off by Verizon, Firefighters Join the Fight to Restore Net Neutrality - As if the repeal of net neutrality weren’t unpopular enough, Verizon’s decision to slow down the cellular connection used by firefighters as they battled a recent wildfire appears to have taken the longstanding fight to yet another level. In the wake of Verizon’s latest face-plant, a coalition of more than 1,000 firefighters, EMTs, paramedics, and other first responders have signed an open letter urging Congress to restore meaningful net neutrality rules. “We routinely place ourselves in dangerous situations to assist others and save lives,” the first responders said. “But since the Federal Communications Commission repealed net neutrality, the communication services we rely on to do our jobs are no longer meaningfully protected from being arbitrarily slowed, blocked, or otherwise degraded by internet service providers.”The problem came to light when Santa Clara County Fire Department in California found its command and control vehicle’s cellular connection throttled to dial-up speeds, hindering its ability to coordinate a fire response. The department said the 50 Mbps “unlimited” Verizon data connection it purchased was routinely being slowed to speeds as low as 30 Kbps. “Throttling affects our ability to provide real-time updates and coordination of resources at these large fires,” said Adam Cosner of the California Professional Firefighters in a Reddit AMA. “When we were throttled we lost our IP phones, our ability to check the state database of resources, our ability to update the status of resources within the incident, and all of our situational tools.” While net neutrality rules allow for “reasonable network management” by cellular carriers during times of congestion, the firefighters say their connection was routinely throttled for no reason. When Santa Clara Fire Department complained to Verizon, Verizon’s first instinct wasn’t to fix the problem, but to upsell the department to a far more expensive plan. After the story gained nationwide attention, Verizon admitted that the throttling of first responders was in violation of Verizon’s own policies, but in a statement to Motherboard denied that the fracas had anything to do with net neutrality.

Trade Deficit increased to $50.1 Billion in July -- 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 $50.1 billion in July, up $4.3 billion from $45.7 billion in June, revised. … July exports were $211.1 billion, $2.1 billion less than June exports. July imports were $261.2 billion, $2.2 billion more than June imports.  Exports decreased and imports increased in July. Exports are 28% above the pre-recession peak and up 8% compared to July 2017; imports are 12% above the pre-recession peak, and up 9% compared to July 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 $64.63 in July, up from $62.42 in June, and up from $43.13 in July 2017. The trade deficit with China increased to $36.8 billion in July, from $33.6 billion in July 2017.

US trade deficit jumps by the most in 3 years - The U.S. trade deficit increased to a five-month high in July as exports of soybeans and civilian aircraft declined and imports hit a record high, suggesting that trade could be a drag on economic growth in the third quarter. The increase was the biggest monthly widening since 2015. The Commerce Department said on Wednesday the trade gap jumped 9.5 percent to $50.1 billion, widening for a second straight month. Data for June was revised to show the trade deficit rising to $45.7 billion, instead of the previously reported $46.3 billion. The politically sensitive goods trade deficit with China surged 10 percent to a record $36.8 billion. Economists polled by Reuters had forecast the overall trade deficit swelling to $50.3 billion in July. The trade gap continues to widen despite the Trump administration's "America First" policies, which have left the United States embroiled in tit-for-tat tariffs with the European Union, Canada and Mexico as well as an escalating trade war with China. President Donald Trump has defended the duties on steel, aluminum imports and a range of Chinese goods as necessary to protect American industries from what he says is unfair foreign competition. The administration says eliminating the trade deficit will put the economy on a sustainable path of faster growth, an argument that has been dismissed by economists as flawed given constraints such as low productivity and slow population growth. The United States and China have slapped retaliatory tariffs on a combined $100 billion of products since early July, with more in the pipeline, posing risks to both domestic and global economic growth. The trade gap narrowed in April and May as farmers front-loaded soybean exports to China before Beijing's retaliatory tariffs came into effect in early July. When adjusted for inflation, the trade gap increased to a five-month high of $82.5 billion in July from $79.3 billion in June. July's so-called real trade deficit is above the second-quarter average of $77.5 billion. If that trend continues in August and September, trade could subtract from third-quarter gross domestic growth. Trade contributed 1.17 percentage points to the economy's 4.2 percent annualized growth pace in the second quarter. In July, the trade gap with Mexico narrowed 25.3 percent to $5.5 billion while the shortfall with Canada shot up 57.6 percent to $3.1 billion. The trade deficit with the European Union soared 50 percent to a record high of $17.6 billion. In July, exports of goods and services fell 1.0 percent to $211.1 billion. Soybean exports dropped $0.7 billion and shipments of civilian aircraft decreased $1.6 billion. Petroleum exports, however, were the highest on record.

U.S. trade deficit soars nearly 10% on record imports - The trade deficit soared almost 10% in July after record imports and hit the highest level in five months, keeping the U.S. on pace to record the largest annual gap in a decade.The deficit climbed to $50.1 billion from a revised $45.7 billion in June, the Commerce Department said Wednesday. Economists polled by MarketWatch had forecast a $50.4 billion gap. The U.S. trade deficit added up to almost $338 billion in the first seven months of 2018. That compared to $316 billion in the same span in 2017. Imports rose 0.9% to a record $261.2 billion in July. U.S. imports have surged in 2018 largely because of rising demand for oil and higher prices for petroleum, but Americans have also bought more foreign autos, computers and pharmaceutical drugs. Exports fell 1% to $211.1 billion, though they are also near a record high. In July, the U.S. exported far fewer passenger planes and soybeans. Soybean exports are still up sharply from a year earlier, however. Many foreign buyers sought to lock in prices and beat pending U.S. and retaliatory foreign tariffs by obtaining them earlier. Soybean exports totaled $18.8 billion through the first seven months of 2018, a 43% increase from $13.1 billion in the same period in 2017. Also notable: Exports of domestically supplied petroleum set a record in July even though the U.S. still imports huge amounts of foreign oil, The U.S. has returned to being one of the world’s largest producers after a long hiatus owing to a fracking revolution that’s unlocked previously unreachable fuel stores in large inland shale deposits. Imports of foreign steel and aluminum, meanwhile, are still higher compared to a year ago even in the face of recently imposed tariffs by President Trump. The U.S. is growing rapidly despite a rising trade deficit, reflecting broad strength in key segments of the economy. Gross domestic product expanded by 4.2% in the spring and is forecast to grow 3% in the third quarter. So far the imposition of U.S. tariffs on a variety of foreign goods have done nothing to curb the deficit. President Trump’s tough line with key trading partners such as China and Canada hasn’t had much effect, either. The July goods deficit with China, for example, leaped to a record high of nearly $37 billion. One reason the deficit keeps rising is counter-intuitive: Americans are financially better off than consumers in most other countries. They can afford to spend more on imports such as French wine or German autos. A stronger dollar also makes imports less expensive to buy. Yet if the trade deficit keeps rising it’s likely to weigh down on GDP, the official yardstick of the U.S. economy.

US Trade Deficit With EU, China Hits Record - The July trade deficit - a closed watched number in a time of trade wars - came in at $50.1BN, fractionally better than the $50.2BN expected, but 9.5% worse than last month's revised print of $45.7BN. This was the biggest one month move since 2015. The deficit deteriorated as a result of less exports (-1.0%) and more imports (+0.9%). Broken down, July exports were $211.1 billion, $2.1 billion less than June exports, while July imports were $261.2 billion, $2.2 billion more than June imports. The July increase in the goods and services deficit reflected an increase in the goods deficit of $4.2 billion to $73.1 billion and a decrease in the services surplus of $0.1 billion to $23.1 billion. Some notable highlights from the report:

  • July exports of services ($70.3 billion) were the highest on record.
  • July imports of goods and services ($261.2 billion) were the highest on record.
  • July imports of goods ($213.9 billion) were the highest on record.
  • July imports of services ($47.2 billion) were the highest on record.
  • July exports of industrial supplies and materials ($46.5 billion) were the highest on record.
  • July petroleum exports ($15.8 billion) were the highest on record.
  • July imports of goods ($212.2 billion) were the highest on record.
  • July imports of industrial supplies and materials ($49.3 billion) were the highest since December 2014 ($51.8 billion).
  • July imports of other goods ($9.0 billion) were the highest on record.
  • July petroleum imports ($20.3 billion) were the highest since December 2014 ($23.6 billion).
  • July imports from South and Central America ($10.8 billion) were the highest since December 2014 ($12.1 billion).
  • The July import average price per barrel of crude oil ($64.63) was the highest since December 2014 ($73.60).

But what was most important is the geographic distribution of trade, and this is where Trump will be displeased because in July the trade deficit with both China ($36.8 billion)...  ... and the EU ($17.6 billion), were the highest on record.  While the number will not have much of an impact on Q3 GDP, it could have a major impact on future trade because if Trump wanted one final "sign" to slap China with $200BN of tariffs on Friday, he just got it.

AAR: August Rail Carloads Up 3.8% YoY, Intermodal Up 5.1% YoY -- From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission.August 2018 was yet another good month for rail traffic. U.S. railroads originated 1.39 million carloads in August 2018, up 3.8% (50,335 carloads) over August 2017.…U.S. railroads also originated 1.44 million intermodal containers and trailers in August 2018, up 5.1%, or 70,198 units, over August 2017. This graph from the Rail Time Indicators report shows U.S. average weekly rail carloads (NSA).  Light blue is 2018.  Rail carloads have been weak over the last decade due to the decline in coal shipments.U.S. railroads originated 1,386,026 carloads in August 2018, up 50,335 carloads, or 3.8%, over August 2017. August 2018 was the sixth straight year-over-year monthly increase for total carloads, Carloads averaged 277,205 per week in August 2018, the most for any month since October 2015. The 3.8% percentage gain in August 2018 was the biggest for any month since June 2017.The second graph is for intermodal traffic (using intermodal or shipping containers):U.S. intermodal originations totaled 1,442,920 containers and trailers in August 2018, up 5.1%, or 70,198 units, over August 2017. Average weekly intermodal volume in August 2018 was 288,584 units, the second highest weekly average for any month in history (behind June 2018’s 289,993). 2018 will be another record year for intermodal traffic.

U.S. factory orders fall in July on weak aircraft demand - (Reuters) - New orders for U.S.-made goods fell slightly more than expected in July, weighed down by weak demand for aircraft, but signs of a pickup in business spending suggested that the manufacturing sector remained on solid ground. Factory goods orders dropped 0.8 percent, the Commerce Department said on Thursday. Data for June was revised slightly down to show factory orders rising 0.6 percent instead of the previously reported 0.7 percent increase. Economists polled by Reuters had forecast factory orders falling 0.6 percent in July. Orders increased 8.3 percent on a year-on-year basis in July. Despite the drop in factory orders in July, manufacturing, which accounts for about 12 percent of the U.S. economy, remains strong. An Institute for Supply Management survey of manufacturers published on Tuesday showed factory activity accelerated to more than a 14-year high in August. But there are concerns an escalating trade war between United States and China could hurt business confidence and undercut capital spending. A strong dollar and worker shortages are also seen slowing momentum in the manufacturing sector. In July, orders for transportation equipment fell 5.2 percent, dragged down by a 35.4 percent plunge in the volatile orders for civilian aircraft and parts. Orders for defense aircraft and parts tumbled 34.4 percent in July. Transportation orders rose 2.0 percent in June. Orders for motor vehicles increased 1.3 percent in July. There were increases in orders for machinery, primary metals and computers and electronic products. Orders for fabricated metal products fell as did those for electronic equipment, appliances and components. The Commerce Department also said July orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans, jumped 1.6 percent instead of increasing 1.4 percent as reported last month. Orders for these so-called core capital goods rose 0.8 percent in June. Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, increased 1.0 percent in July instead of climbing 0.9 percent as reported last month. Core capital goods shipments rose 1.0 percent in June. Business spending on equipment slowed in the second quarter after growing robustly since the first quarter of 2017.

ISM Manufacturing index increased to 61.3 in August --The ISM manufacturing index indicated expansion in August. The PMI was at 61.3% in August, up from 58.1% in July. The employment index was at 58.5%, up from 56.5% last month, and the new orders index was at 65.1%, up from 60.2%.From the Institute for Supply Management: August 2018 Manufacturing ISM® Report On Business®  “The August PMI® registered 61.3 percent, an increase of 3.2 percentage points from the July reading of 58.1 percent. The New Orders Index registered 65.1 percent, an increase of 4.9 percentage points from the July reading of 60.2 percent. The Production Index registered 63.3 percent, a 4.8-percentage point increase compared to the July reading of 58.5 percent. The Employment Index registered 58.5 percent, an increase of 2 percentage points from the July reading of 56.5 percent. The Supplier Deliveries Index registered 64.5 percent, a 2.4-percentage point increase from the July reading of 62.1 percent. The Inventories Index registered 55.4 percent, an increase of 2.1 percentage points from the July reading of 53.3 percent. The Prices Index registered 72.1 percent in August, a 1.1-percentage point decrease from the July reading of 73.2 percent, indicating higher raw materials prices for the 30th consecutive month.…"Respondents are again overwhelmingly concerned about tariff-related activity, including how reciprocal tariffs will impact company revenue and current manufacturing locations."

U.S. Factory Sector Clocks Strongest Growth in 14 Years - American factory activity in August expanded at the strongest pace in more than 14 years, despite rising tensions with some of the U.S.’s largest trade partners.  The Institute for Supply Management on Tuesday said its manufacturing index rose to 61.3 in August, the highest level since May 2004, from 58.1 in July. Sales of factory-made products, or new orders, output and employment all grew at a faster pace in August. Tuesday’s release surprised analysts who had expected a slowdown in the industry in light of rising trade tensions and a typically weaker month for factory activity. Economists surveyed by The Wall Street Journal had expected a 57.5 reading for August.“Despite concerns over U.S. protectionist policies, manufacturing sentiment remains on a solid footing, supported in large part by firm domestic demand,”  The U.S. and Europe, China and other countries are in the midst of trade battles stemming from steel and aluminum tariffs the Trump administration enacted earlier this year.    , “In addition to highlighting the strength of the U.S. #economy, this also points to the more general theme of divergence in advanced countries’ economic performance and policies.” Though most economists hailed Tuesday’s report as a sign of robust growth continuing into the second half of 2018, some analysts said there are signs of overheating in the manufacturing industry. “The last time we have seen something akin to the current run late in an expansion occurred in” the late 1980s, when the Federal Reserve had to raise the fed funds target rate to almost 10% to tamp down inflation, . “If you want to conclude from this quick history lesson that the Fed is currently too easy and in the process of making a policy mistake, I would not object.” Most private economists expect the Fed will raise short-term interest rates two more times this year, once in September and again in December, with strong economic data continuing to roll into the summer months. Despite the headline growth in factory activity, there are latent signs recent trade actions may be beginning to take a toll. An underlying gauge of new export orders for primary metals, transportation equipment and machinery declined in August, with machinery last declining at the beginning of 2017.

Markit Manufacturing PMI: Strong Growth in August - The August US Manufacturing Purchasing Managers' Index conducted by Markit came in at 54.7, down slightly from the 55.3 final July 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:"Manufacturers reported the smallest output rise for almost a year in August, suggesting production growth could be as weak as 0.2% in the third quarter." [Press Release] Here is a snapshot of the series since mid-2012.

ISM Non-Manufacturing Index increased to 58.5% in August -- The August ISM Non-manufacturing index was at 58.5%, up from 55.7% in July. The employment index increased in August to 56.7%, from 56.1%. Note: Above 50 indicates expansion, below 50 contraction. From the Institute for Supply Management: August 2018 Non-Manufacturing ISM Report On Business®  “The NMI® registered 58.5 percent, which is 2.8 percentage points higher than the July reading of 55.7 percent. This represents continued growth in the non-manufacturing sector at a faster rate. The Non-Manufacturing Business Activity Index increased to 60.7 percent, 4.2 percentage points higher than the July reading of 56.5 percent, reflecting growth for the 109th consecutive month, at a faster rate in August. The New Orders Index registered 60.4 percent, 3.4 percentage points higher than the reading of 57 percent in July. The Employment Index increased 0.6 percentage point in August to 56.7 percent from the July reading of 56.1 percent. The Prices Index decreased by 0.6 percentage point from the July reading of 63.4 percent to 62.8 percent, indicating that prices increased in August for the 30th consecutive month. According to the NMI®, 16 non-manufacturing industries reported growth. There was a strong rebound for the non-manufacturing sector in August after growth ‘cooled off’ in July. Logistics, tariffs and employment resources continue to have an impact on many of the respective industries. Overall, the respondents remain positive about business conditions and the economy.”This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index.

Markit Services PMI: Service Sector Activity Growth Eases - The August US Services Purchasing Managers' Index conducted by Markit came in at 54.8 percent, down 1.2 from the final July estimate of 56.0. The consensus was for 55.2 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: The latest survey data signaled a weaker rise in business activity across the U.S. service sector. Output growth softened to a four-month low and dipped below the long-run series trend. The rate of new business growth softened to an eight-month low, despite remaining strong overall. Subsequently, firms showed evidence of spare capacity with backlogs falling further and employment growth slowing to a seven-month low. Meanwhile, increases in input prices and output charges eased, despite the rate of charge inflation remaining well above the series trend. [Press Release]  Here is a snapshot of the series since mid-2012.

Weekly Initial Unemployment Claims decreased to 203,000, Lowest Since 1969 -- The DOL reported: In the week ending September 1, the advance figure for seasonally adjusted initial claims was 203,000, a decrease of 10,000 from the previous week's unrevised level of 213,000. This is the lowest level for initial claims since December 6, 1969 when it was 202,000. The 4-week moving average was 209,500, a decrease of 2,750 from the previous week's unrevised average of 212,250. This is the lowest level for this average since December 6, 1969 when it was 204,500. The previous week was unrevised. The following graph shows the 4-week moving average of weekly claims since 1971.

ADP: Private Employment increased 163,000 in August -- From ADP: Private sector employment increased by 163,000 jobs from July to August according to the August ADP National Employment Report®. ... The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.  “Although we saw a small slowdown in job growth the market remains incredibly dynamic,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Midsized businesses continue to be the engine of growth, adding nearly 70 percent of all jobs this month, and remain resiliant in the current economic climate.” Mark Zandi, chief economist of Moody’s Analytics, said, “The job market is hot. Employers are aggressively competing to hold onto their existing workers and to find new ones. Small businesses are struggling the most in this competition, as they increasingly can’t fill open positions.”  This was below the consensus forecast for 182,000 private sector jobs added in the ADP report. 

A Closer Look at Today's ADP Employment Report -- In this morning's ADP employment report we got the August estimate of 163K new nonfarm private employment jobs from ADP, a decrease over July's 217K. The popular spin on this indicator is as a preview to the monthly jobs report from the Bureau of Labor Statistics. But the ADP report includes a wealth of information that's worth exploring in more detail. Here is a snapshot of the monthly change in the ADP headline number since the company's earliest published data in April 2002. This is quite a volatile series, so we've plotted the monthly data points as dots along with a six-month moving average, which gives us a clearer sense of the trend.  As we see in the chart above, the trend peaked 20 months before the last recession and went negative around the time that the NBER subsequently declared as the recession start. At present, the six-month moving average has been hovering in a relatively narrow range around 200K new jobs since around the middle of 2011.ADP also gives us a breakdown of Total Nonfarm Private Employment into two categories: Goods Producing and Services. Here is the same chart style illustrating the two. The US is predominantly a services economy, so it comes as no surprise that Services employment has shown stronger jobs growth. The trend in Goods Producing jobs went negative over a year before the last recession. Interestingly, the Goods Producing jobs saw an uptick in late 2016 that has continued. For a sense of the relative size of Services over Goods Producing employment, the next chart shows the percentage of Services Jobs across the entire series. The latest data point is just fractionally below the record high.There are a number of factors behind this trend. In addition to our increasing dependence of Services, Goods Production employment continues to be impacted by automation and offshoring. The percentage in the chart above began decreasing in early 2015 with no true bounceback since. For a better sense of the components of the two Goods Producing and Service Providing cohorts, here is a snapshot of the five select industries tracked by ADP. The two things to note here are the relative sizes of the industries and the relative trends. Note that Construction and Manufacturing are Production industries whereas the other three are Service Providing. Another view of the relative trends of the five select industries is an overlay of the year-over-year comparison. For a longer-term perspective on the Goods Producing and Service Providing employment, see our monthly analysis, Secular Trends in Employment: Goods Producing Versus Services Providing, which is based on data from the Department of Labor's monthly jobs report reaching back to 1939.

August Employment Report: 201,000 Jobs Added, 3.9% Unemployment Rate -- From the BLS: Total nonfarm payroll employment increased by 201,000 in August, and the unemployment rate was unchanged at 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, health care, wholesale trade, transportation and warehousing, and mining. ... The change in total nonfarm payroll employment for June was revised down from +248,000 to +208,000, and the change for July was revised down from +157,000 to +147,000. With these revisions, employment gains in June and July combined were 50,000 less than previously reported. ... In August, average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents to $27.16. Over the year, average hourly earnings have increased by 77 cents, or 2.9 percent.

Economy Adds 201,000 Jobs in August, Unemployment Steady at 3.9 Percent - Dean Baker The Bureau of Labor Statistics reported the economy added 201,000 jobs in August; although downward revisions of 50,000 to the prior two months’ data brought the three-month average to 185,000. The unemployment rate remained at 3.9 percent, but the overall employment-to-population (EPOP) fell by 0.2 percentage points to 60.3 percent. This 0.2 percentage point drop also showed up for prime-age workers (ages 25 to 54), although the EPOP for prime-age workers is still 0.9 percentage points above its year-ago level. For men, the year-over-year increase is 1.1 percentage points, while for women it is 0.8 percent. In both cases, EPOPs remain below prerecession peaks and well below the peaks hit in 2000.Perhaps the most encouraging news in the report is evidence of a modest acceleration in wage growth. The average hourly wage increased by 2.9 percent over the last year. That compares to a 2.7 percent year-over-year rise in July, but it is too early to assume a clear trend. The year-over-year increase was 2.8 percent in July of 2016. The rate of increase, taking the average of the last three months compared with the prior three months, is slightly more rapid at 3.06 percent.Interestingly, the pay gains are not especially strong in areas where employers have been complaining about labor shortages. The average hourly wage in construction was up 3.3 percent over the last year, but the gain was 3.5 percent back in September of 2016. Wages in manufacturing have risen by just 1.8 percent over the last year.The hourly wage in leisure and hospitality (largely restaurants) has risen by 3.2 percent over the last year. This compares to increases of over 4.0 percent in the second half of 2016.The job gains in the establishment survey were concentrated in a small number of sectors. Health care added 33,200 jobs, slightly more than its average of 25,100 over the last year. Professional and technical services added 27,600 jobs, while construction added 23,000. Restaurants added 17,500 jobs, almost exactly in line with its 17,800 average over the last year. Retail lost 5,900 jobs, but employment is still 62,000 above its year-ago level.After increasing for 12 consecutive months, manufacturing employment fell by 3,000 in August. The decline was all in manufacturing of durables, which lost 4,000 jobs. Employment in non-durable manufacturing rose by 1,000. The auto industry was the biggest loser, giving up 4,900 jobs after losing 3,500 jobs in July.The weakness also shows up in the index of hours, which dropped 0.3 percent for durable manufacturing in August. The manufacturing one-month employment diffusion index, which shows the percentage of employers intending to add workers, also weakened in August. It stands at 52.6 percent, the lowest reading since January of 2017 when it stood at 50.0 percent, down from a high of 72.4 percent in February. While it is too early to determine if the Trump administration's trade policy accounts for this weakness, it seems clear that the policy is not showing obvious benefits.Most of the news in the household survey was positive. The duration measures of unemployment all fell in August. The percentage of unemployment due to voluntary quits rose to 14.0 percent, a new high for the recovery. The number of people involuntarily working part-time fell by 188,000 to a new low for the recovery, while the number of people choosing to work part-time rose by 249,000 to a new high for the recovery.One somewhat disturbing item in the household survey is a drop in the employment rate of black teens by 3.8 percentage points to 20.3 percent, the lowest since June of 2016. These data are highly erratic, but this is still a large decline.The overall picture in the August jobs report is overwhelmingly positive. The economy continues to create jobs at a very healthy pace, and there is some modest evidence that wage growth may be accelerating so that wages at least slightly outpace the rate of inflation. The one noteworthy negative in this report is the evidence of weakness in the manufacturing sector. This could indicate that the Trump administration’s trade policy is backfiring.

August jobs report: overall progress, with some new highs and some givebacks --HEADLINES:

  • +201,000 jobs added
  • U3 unemployment rate unchanged at 3.9%
  • U6 underemployment rate declined -0.1% from 7.5% to 7.4% (NEW EXPANSION LOW)
  • Not in Labor Force, but Want a Job Now:  rose 226,000 from 5.163 million to 5.379 million   
  • Part time for economic reasons: fell -188,000 from 4.567 million to 4.379 million 
  • Employment/population ratio ages 25-54: declined -0.2% from 79.5% to 79.3% 
  • Average Weekly Earnings for Production and Nonsupervisory Personnel: rose $.07 from  $22.66 to $22.73, up +2.8% 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.)  (NEW EXPANSION HIGH)
  • Manufacturing jobs fell -3,000 for an average of +21,000/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 +50/month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month
  • June was revised downward by -40,000. July was also revised downward by -10,000, for a net change of -50,000.  
  • the average manufacturing workweek was unchanged at 41.0 hours.  This is one of the 10 components of the LEI. 
  • construction jobs increased by +23,000. YoY construction jobs are up +297,000. 
  • temporary jobs increased by +10,000.  
  • the number of people unemployed for 5 weeks or less increased by +117,000 from 2,091,000 to 2,208,000.  The post-recession low was set three months ago at 2,034,000.

SUMMARY:  This was a mixed report with an overall positive tone. Most of the negatives, such as the prime age employment population ratio simply gave back the very good numbers from last month and returned us to where we were two months ago. Still, several leading components did decline, such as short time unemployment, past revisions, and employment as measured by the more volatile household survey.The positives showed continued improvement in some problematic areas. Most importantly, nominal YoY wage growth for ordinary workers increased to an expansion high of +2.8%. Involuntary part time employment continued to fall, as did the broad underemployment rate.Overall, we continue to make progress, and so long as short term leading indicators of consumption continue to do well, so should employment.

August Employment Situation Report is a mixed bag (6 graphs) The BLS announced payroll employment increased 201,000 in August with no real surprises…except 50,000 in downward revisions (-40 for June and -10 for July) that temper the strong report. Total private employment rose 204,000 while the government sector sank by 3,000. The service sector added 178,000 jobs, with 40,700 coming from health care and social assistance. Average weekly hours remained at 34.5 while average hourly earnings increased from $27.06 in July to $27.16 in August and have increased 2.9% year-over-year. However, the CPI increased nearly 2.9% as well leading to almost no gain in real average hourly earnings over the year. The more comprehensive employment cost index also showed steady growth. The household survey reveals almost no change in the unemployment rate: from 3.87% in July to 3.85% in August. However, the number employed fell by -423,000, the number unemployed fell by -46,000, leading to a decline in the labor force of -469,000. With population increasing 223,000 means the labor force participation rate fell from 62.9 to 62.7 and the employment to population ratio fell from 60.5 to 60.3. The labor market remains very tight in the sense that there are now more vacancies than unemployed persons in two regions, the midwest and the south, and about the same number of vacancies as unemployed in the northeast and west.While the 201,000 increase was in line with many predictions, the 50,000 downward revision should temper optimism. The decline in participation and the employment to population ratio also added a slight negative spin. It is still a robust labor market with many job openings available.  Importantly, there is nothing in this report that would temper the Fed’s signaled intention to raise interest rates at the next meeting.

Hiring At US Companies Rebounded In August -- Private payrolls in the US increased by a seasonally adjusted 204,000 in August, marking a sharply stronger gain over the previous month’s revised 153,000 advance, the Labor Department reports. Meantime, the year-over-over trend held steady at a 1.9% pace for the sixth month in a row. Today’s numbers reaffirm that the labor market continues to expand at a healthy rate, a sign that the nine-year-old economic expansion is in no immediate danger and so further monetary policy tightening has a green light to continue. Measuring the trend in payrolls via one-year changes shows that the recent revival in the growth rate is stable. A year ago, the trend in private-sector employment was decelerating, dropping to a gain as low as 1.6% for the 12 months through September 2017. Since then, companies have been hiring more workers. Since March, the annual pace has more or less held steady at around 1.9%.  Today’s upbeat news on payrolls and the economy provides fresh support for the Federal Reserve to raise interest rates again. “Gradually increasing over the course of this next year makes sense,” Boston Fed President Eric Rosengren told CNBC earlier today. “If things work out well for the economy, and that’s what I expect and hope, then we’ll be in a situation where we need to have somewhat restrictive policy over time.” Fed funds futures are pricing in a near-certainty that the central bank will announce another rate hike at the next FOMC announcement on September 26. CME data this morning points to a 99% probability that the target Fed funds rate will edge up 25 basis points to a 2.0%-to-2.25% range. Today’s update also shows that wage growth is ticking higher. Average hourly earnings increased 2.9% — the fastest rate in nine years. The firmer pace offers lays the groundwork for questioning the Treasury market’s forecast that inflation’s recent rebound has peaked.  “The economy is on an adrenalin rush,” asserts Ryan Sweet, senior economist at Moody’s Analytics. “Given the amount of fiscal stimulus that the economy is benefiting from, it’s going to take a lot to get it off that high.”Ward McCarthy, chief financial economist at Jefferies LLC, agrees, noting that soft wage growth “had been the one fly in the ointment in the last few years. Perkier wages are the final confirmation the labor market is back to normal.” If so, the Fed’s plans to normalize monetary policy are set to roll on. Short of a dramatic geopolitical event or surprisingly weak inflation numbers in next week’s update on consumer inflation, another rate hike at the end of the month looks like a done deal.

August Jobs Report Slightly Stronger Than Expected - Heading into the release of today’s August Jobs Report, the expectations of analysts and traders on Wall Street was that we would see jobs growth somewhere in the +191,000 range, with the top-line unemployment rate staying somewhere near where it was back in July at 3.9%. As with previous reports, though, the focus was less on jobs growth and more on the question of whether or not wage growth would improve significantly from the rather tepid rate we’ve seen so far this year. This is especially important given the fact that other economic statistics are showing that inflation at the wholesale and consumer levels was starting to increase at a faster rate than we’ve seen in the past and that, without more rapid wage growth, Americans would effectively see real wages decline in terms of their purchasing power. Indeed, as I noted in my post about the December report, the jobs market seems to be at the point where expecting massive increases in job creation are probably out of the question. Instead, we’re likely to see modest but healthy jobs growth, but not anything spectacular. As it turned out, job creation was slightly ahead of expectations, and we actually saw some movement on wage growth:Total nonfarm payroll employment increased by 201,000 in August, and the unemployment rate was unchanged at 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, health care, wholesale trade,transportation and warehousing, and mining.The unemployment rate remained at 3.9 percent in August, and the number of unemployed persons, at 6.2 million, changed little. (See table A-1.)Among the major worker groups, the unemployment rates for adult men (3.5 percent), adult women (3.6 percent), teenagers (12.8 percent), Whites (3.4 percent), Blacks (6.3 percent), Asians (3.0 percent), and Hispanics (4.7 percent) showed little or no change in August. (See tables A-1, A-2, and A-3.)The number of long-term unemployed (those jobless for 27 weeks or more) was little changed in August at 1.3 million and accounted for 21.5 percent of the unemployed. Over the year, the number of long-term unemployed has declined by 403,000. (See table A-12.) Both the labor force participation rate, at 62.7 percent, and the employment-population ratio, at 60.3 percent, declined by 0.2 percentage point in August. (See table A-1.)The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 4.4 million, changed little over the month but was down by 830,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. (See table A-8.)

Wage Growth Comes In Scorching Hot As US Adds More Than Expected 201K Jobs -- While many were expecting a potential downside surprise due to the 'residual seasonality' of August payrolls (discussed previously), moments ago the BLS reported that after a weaker than expected July (which was revised lower from 170K to 153K), August payrolls came in strong than expected at 201K, above the 191K consensus estimate. The revisions were less exciting: With the June revision down from +248,000 to +208,000, and the change for July was revised down from +157,000 to +147,000. With these revisions, employment gains in June and July combined were 50,000 less than previously reported. As a reminder, it is likely that August will be revised even higher, as Bloomberg economist Tim Mahedy writes: "Even though payroll gains exceeded consensus, keep in mind that August has a history of upward revisions, so this number is likely to be even stronger. Over the past five years, August payrolls have been revised up by an average of 51k relative to the first print." However, as we noted in our preview, while the payrolls number is generally ignored by the market with the unemployment rate near all time lows, and which in August was 3.9%, just above the 3.8% expected... ... what prompted the spike in the dollar, and the lower kneejerk response in risk assets, was the average hourly earnings print, which came in scorching hot, relatively speaking, rising 0.4% last month, double the 0.2% expected, and 2.9% on a Y/Y basis, the highest going back to 2009. The breakdown by sector shows that durable goods manufacturing and professional and business services were the biggest contributors to the earnings increase, but the gains were fairly broad-based across sectors: wholesale trade, education and health services, nondurable goods manufacturing, and retail trade all logged solid gains as well. Here's Mahedy again: "Average hourly earnings reached an expansion high, growing by 2.9% on a 12-month basis. Policy makers have been waiting for signs that inflationary pressures are on the horizon. Here's the first sign."  Back to the report, we find another positive: the broader U-6 measure of unemployment fell to 7.4% from 7.5% as number working P/T for economic reasons fell 188k to 4.379 million. More good news:  the number of involuntary part-time workers plunged back to 2007 levels, yet another confirmation of a tightening labor market. Unlike prior months, there were no gimmicks in the hours worked, as the average workweek for all employees on private nonfarm payrolls remained unchanged at 34.5 hours in August. Breaking down the job additions:

  • Professional and business services added 53,000 jobs in August and 519,000 jobs over the year.
  • In August, health care employment rose by 33,000, with job gains in ambulatory health care services (+21,000) and hospitals (+8,000). Health care has added 301,000 jobs over the year.
  • Wholesale trade employment increased by 22,000 in August and by 99,000 over the year. Durable goods wholesalers added 14,000 jobs over the month and accounted for about two-thirds of the over-the-year job gain in wholesale trade.
  • Employment in transportation and warehousing rose by 20,000 in August and by 173,000 over the past 12 months. Within the industry, couriers and messengers added 4,000 jobs in August.
  • Mining employment increased by 6,000 in August, after showing little change in July. Since a recent trough in October 2016, the industry has added 104,000 jobs, almost entirely in support activities for mining.
  • Employment in construction continued to trend up in August (+23,000) and has increased by 297,000 over the year.
  • Manufacturing employment changed little in August (-3,000). Over the year, employment in the industry was up by 254,000, with more than three-fourths of the gain in the durable goods component.

The August Jobs Report in 8 Charts - U.S. employers added 201,000 jobs and the unemployment rate held steady at 3.9% in August. Over the past year, the number of jobs increased by 1.6%. The figure has been the same for three straight months. . Hourly wages rose 2.9% from a year earlier, the fastest pace since mid-2009. Weekly wages rose 3.2%. Inflation is eating away at some of those gains, though overall pay appears to be firming as the labor market tightens. . The primary measure of unemployment held steady at 3.9%. The broadest measure, which includes discouraged workers who've stopped searching for work as well as part-time workers who want full-time work, fell to the lowest level since 2001. . 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 has changed little since February. . The median spell of unemployment is lasting for 9.1 weeks. The duration is less than half of what it was in the aftermath of the 2007-09 recession. . Unemployment has fallen sharply for workers with less than a high-school education, though workers with more education continue to have significantly lower unemployment rates. . Unemployment rates have come down across race and gender groups over the past year. 

Jobs Report: A long-awaited wage pop that’s hopefully part of an emerging trend - Jared Bernstein - Payrolls grew 201,000 last month, and the unemployment rate held steady at 3.9 percent in yet another in a long series of strong job reports (at 3.853 percent, the rate just missed a tick down). Though there are still some people and places who’ve been left behind, the U.S. labor market remain solidly in the midst of one of its longest expansions on record, with no signs of strained capacity or overheating. Hourly pay for private-sector workers is a standout in today’s report, up 2.9% over last year, its strongest posting since 2009. Though we don’t yet know August inflation, my guess is that it comes in lower than that, perhaps ~2.6 percent, implying a much-needed gain in real hourly wage growth. For middle-wage workers (the 82 percent of the private workforce covered by the Bureau’s “production, non-supervisory” category), hourly pay rose 2.8 percent over the past year. The figures below smooth out the jumps in the underlying wage series with a 6-month moving average, and both show a slight acceleration in wage growth which I expect to persist, absent unforeseen shocks to the system (escalating tariffs, for example, could become a problem). If so, this will be a long-awaited development that will correct one of the clear missing pieces from the recovery over the past two years: the absence of sustained, real pay gains for middle-wage workers.Of course, this raises the specter of economic overheating. Below, I present evidence that this is not an obvious threat at this point.Turning to the payroll results, JB’s monthly smoother–averages of monthly job gains over 3, 6, and 12 month periods–shows an underlying trend of around 190,000 jobs per month. At this stage of the recovery, that tr end is easily strong enough to put downward pressure on unemployment.Why, then, did the unemployment rate not fall? As is often the case, it’s a tale of two different surveys. The household survey, from which unemployment is derived, was less positive in August than the survey of establishments which generates the payroll numbers. The labor force participation rate fell two-tenths, to 62.7 percent, as about 470,000 people were reported to have left the labor market. This indicator is, however, quite volatile on a monthly basis and I thus down-weight its monthly ups and downs.In another strong sign of labor-market tightness, the underemployment rate, which justly takes credit for the steady decline in part-timers who want full-time jobs, fell to 7.4 percent last month, its lowest rate since 2001, and close to its all time low of 6.8 percent in late 2000.In other words, in year nine of this long expansion, labor demand, meaning job creation derived from economic activity by consumers, investors, and government, still remains strong. Though real wages have been a soft spot, there’s some indication of an upturn in that trend.

Comments on August Employment Report - Mcbride - The headline jobs number at 201,000 for August was slightly above consensus expectations of 195 thousand, however the previously two months were revised down by a combined 50 thousand. Overall this was a solid report. Earlier: August Employment Report: 201,000 Jobs Added, 3.9% Unemployment Rate In August, the year-over-year employment change was 2.330 million jobs. This is solid year-over-year growth.Wage growth was above expectations in August. From the BLS:"In August, average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents to $27.16. Over the year, average hourly earnings have increased by 77 cents, or 2.9 percent."This graph is based on “Average Hourly Earnings” from the Current Employment Statistics (CES) (aka "Establishment") monthly employment report. Note: There are also two quarterly sources for earnings data: 1) “Hourly Compensation,” from the BLS’s Productivity and Costs; and 2) the Employment Cost Index which includes wage/salary and benefit compensation.The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees.  Nominal wage growth was at 2.9% YoY in August.  Wage growth has generally been trending up. 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 decreased in August to 82.0%, and the 25 to 54 employment population ratio decreased to 79.3%.  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 August to the lowest level since October 2007. The number working part time for economic reasons suggests there 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 7.4% in August. This is the lowest level for U-6 since April 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 slightly above expectations, however the previous two months were revised down. The headline unemployment rate was unchanged at 3.9%,  and U-6 decreased to 7.4% - the lowest rate since 2001.  And wage growth was above expectations. Overall, this was a solid report.   For the first eight months of 2018, job growth has been solid, averaging 207 thousand per month.

Manufacturing Employment and Output - Menzie Chinn -  Today’s employment situation release depicted a picture of continuing recovery in the labor market. One interesting aspect is what is happening to the tradables sector, which I proxy with the manufacturing sector. There, the advance data indicate a slight decline.  Figure 1: Manufacturing production (NAICS) (dark blue), manufacturing employment of production & nonsupervisory workers (red), aggregate hours of manufacturing employment of production & nonsupervisory workers (green), all in logs, normalized to 2017M01=0. Source: Federal Reserve, BLS, via FREDOne observation is not a trend, so of course, one wouldn’t want to infer too much from these data points. However, if manufacturing output follows employment, and next month’s employment numbers follow this month’s trend, then it’ll be time to wonder if the combination of appreciated dollar, trade policy uncertainty and slowing growth abroad are going to hit the expansion. On the dollar, note that the upswing is partly due to incipient Fed moves, but some portion is due to heightened policy uncertainty and expansionary fiscal policy. Figure 2: Nominal trade weighted dollar against broad basket of currencies (blue), and CNY/USD bilateral exchange rate (red), both in logs, normalized 2017M01=0. A rise is an appreciation of USD. Source: Federal Reserve Board via FRED, author’s calculations.

When Up Is Down- Why The Jump In Hourly Earnings Confirms Economic Slowdown - Earnings growth has risen for an unfortunate reason: growth in hours has fallen faster than pay growth. The chart below shows income growth slowing, and growth in hours worked slowing even faster.  Contrary to popular belief, such a slowdown is not a credible signal of an inflation upturn. And if the jump in wage growth pushes the Fed to be more hawkish, it could actually worsen the slowdown. As we first publicly explained in May 2014, since AHE is the ratio of total weekly pay to total weekly hours, it’s useful to look at the growth rates of each, shown in the lower panel of the chart (purple and gold lines, respectively), which tells the real story. Following the post-hurricane pop, year-over-year payroll growth has edged up, while yoy hours growth has actually fallen back to its lowest reading since January 2017, excluding its September low, which was due to the hit from the hurricanes. So, rising yoy AHE growth may seem like a good thing, but in this case it is actually confirms the slowdown in economic growth that’s starting to take hold.  The bottom line is that the latest pop in overall AHE growth is not a sign of economic strength or inflation.

Workers with low levels of education haven’t recovered from the Great Recession – Brookings - Over a decade after the start of the Great Recession, most Americans looking for a job can find one—the unemployment rate has fallen to around 3.9 percent. Also, following a decline in labor force participation that pre-dated but continued through the Great Recession, the share of Americans aged 25-54 in the labor market has increased in the last few years. Despite these positive developments, the labor market is not perfect. Wage growth is still sluggish, with modest gains offset by inflation. Despite recent increases, the share of prime-age Americans in the labor force is still slightly below the pre-Recession level. Levels of unemployment vary widely across places and the population by key demographic characteristics. In August of last year, The Hamilton Project calculated that the “jobs gap”—the difference between demographically adjusted national employment and its level before the recession—had closed for the country overall. That is, after adjusting for demographic shifts, the economy had added enough jobs to fill the hole left by the Great Recession. But not every group of Americans has fully recovered from the Great Recession. In this piece, we provide an annual update of the employment rate gap, which is different from the jobs gap, by race/ethnicity and level of education. Using the Current Population Survey from January 2007 to May 2018, we identify the “employment rate gap:” the difference between the demographically adjusted 2007 employment-to-population ratio and the actual employment-to-population ratio at a given point in time. It should be noted that this methodology differs from that used for The Hamilton Project’s previous monthly jobs gap series.1 Because we are exploring differential trends by demographic characteristics, we cannot use payroll employment from the Current Employment Statistics, as the “jobs gap” did. 

The economy may be booming, but nearly half of Americans can't make ends meet: By virtually any yardstick, the U.S. economy is doing great. Unemployment is near a two-decade low. The stock market is strong. Corporate profits are at record highs. Yet a report out this week finds that almost half of Americans are having trouble paying for basic needs such as food and housing. The Urban Institute, a left-leaning Washington think tank, surveyed more than 7,500 adults about their experience making ends meet. It found that about 40% of people ages 18 to 64 faced some sort of hardship last year. “It’s certainly surprising and disconcerting that so many people are having difficulty meeting their basic needs,” said Michael Karpman, a research associate at the Urban Institute and coauthor of the report. “What we found is that a lot of people have to devote much of their income to fixed expenses like rent or healthcare,” he told me. “If they’re hit with a large, unexpected expense, they simply can’t cover it.” The stats become more troubling the deeper you drill down. More than 35% of families with at least one working adult reported difficulty meeting at least one basic need last year. Almost a quarter of Americans experienced food insecurity, which is to say they didn’t always know if they’d be able to eat if they were hungry. A staggering 18% faced issues paying medical bills, and nearly as large a percentage reported skipping treatment for an ailment because they couldn’t afford it. Slightly more than 10% of Americans missed a rental or mortgage payment. Thirteen percent couldn’t pay a utility bill. While much of these economic woes were concentrated among lower-income households, the Urban Institute found that many middle-class families also struggled to pay their bills. “About 20% of middle-class people are having trouble, mostly with healthcare,” Karpman said. 

Thumb on the scale: correcting the CEA’s corrections re real wage growth. -  Jared Bernstein and Larry Mishel - President Trump’s Council of Economic Advisers has a new piece out claiming to show that real wages are growing faster than has been widely reported. Their conclusion stems from numerous adjustments to Bureau of Labor Statistics wage data that otherwise show flat real earnings for most workers.However, most of CEA’s adjustments, applied accurately, do not change the inconvenient fact that even amidst strong macroeconomic results and a tight labor market, real wage growth for middle-wage workers has been weak over the past two years. That may change, if falling unemployment triggers faster wage growth, but at this point, measurement tweaks make little difference to the conventional wisdom, at least over the short period covered by the CEA report. As former CEA chair Jason Furman tweeted yesterday, the report “does almost nothing to change our understanding of wage growth” The CEA argues that by adjusting for the following factors, real wages grew at least 1.4 percent higher over the past year, as opposed to zero:

–adding fringe benefits;
–adjusting for the demographics of the job market;
–adjusting/reducing hours worked;
–using a slower growing price deflator.

We find that only the last point is valid, but that even with that adjustment, real compensation is still flat, largely because benefits, properly measured, have not been rising any faster than wages, contrary to CEA’s claims.

California Ended Cash Bail. Why Are So Many Reformers Unhappy About It? -- California Gov. Jerry Brown signed into law this week a plan, years in the making, to end the use of cash bail in the state’s criminal justice system. But what once promised to be an unambiguous policy victory for the most progressive state in the country seems instead to have become a lesson in the inherent political and legal difficulties of enacting criminal justice reform.The law has exposed deep fissures within the criminal justice reform movement. Social justice advocates that had once championed the initiative to abolish cash bail mobilized against the final iteration of the bill, which they saw as having morphed from righteous to dangerous. John Legend, the singer, activist and California resident, channeled those critiques last week when he pleaded over Twitter to the governor, “@JerryBrownGov #BailReform is needed, but NOT #SB10 which replaces the predatory for-profit bail system with a system that threatens to expand unfair incarceration of communities of color.” “How unfortunate it is that the great state of California, which is the beaming light of progressive change, caved,” said Norma Chavez-Peterson, executive director of the ACLU of San Diego and Imperial Counties, one of multiple California chapters of the civil rights organization that renounced the bill. “It’s sad we couldn’t do something bolder.”What’s the problem? The new law, which will take effect in October 2019, will replace the old system of money-based freedom with a new one of risk assessments and preventive detention. In critics' eyes, that means California will continue to give local judges the sweeping authority to keep people incarcerated before they’re convicted of anything. At the same time, the critique of bail as biased against poor people, unnecessarily costly and one of the main drivers of the mass incarceration of African-Americans, has gained mainstream bipartisan backing. Sens. Kamala Harris, a Democrat from California, and Rand Paul, a Republican from Kentucky, called the bail system “predatory and wasteful” in a New York Times op-ed last year. And states like New Jersey, New Mexico and Kentucky have already chipped away at—though not completely eliminated—cash bail.

Why Bernie Sanders And Tucker Carlson Agree On Food Stamps - Fox News host Tucker Carlson shakes his fist at Amazon, a company the president also happens to dislike.  Sen. Bernie Sanders (I-Vt.) has been fighting with Amazon CEO Jeff Bezos over the fact that some of Amazon’s employees are poor enough to qualify for food stamps. The former Democratic presidential candidate and progressive kingmaker has even said he will introduce a bill to tax companies for every dollar their workers receive in safety net benefits. On Thursday night, the Sanders plan got a surprise endorsement from Fox News host Tucker Carlson. “Bernie Sanders of all people is trying to get your money back from Jeff Bezos,” Carlson said. “This is especially amazing because he is on Bernie’s side on most things. They are both left-wing activists. But on this question, Bernie is right.”Carlson’s endorsement is significant because he is a pro-Trump propagandist whose show the president regularly watches. The president frequently whines about Bezos, who is far richer than Trump and who also owns the “fake news” Washington Post. The Sanders proposal is a useful cudgel in Carlson’s quest to flatter Trump. But the argument that food stamps subsidize low wages goes against the agenda Trump and the Republican Party have put forward, which would cut food stamps because the program supposedly prevents poor people from taking low-wage jobs.  Republicans are currently pushing a long-shot bill that would make the “work requirements” for food stamps ― officially the Supplemental Nutrition Assistance Program ― stricter. Their top justification for the policy is that businesses have supposedly been unable to hire enough workers because SNAP benefits make it too easy to survive without market income.

Media smears family of victims of Chicago house fire - In the wake of the horrific house fire that killed 10 children on Sunday in the working-class Chicago neighborhood of Little Village, various media outlets have sought to divert responsibility for the tragedy from the political establishment and place blame on the mothers of the dead children.Instead of seeking to understand the real causes behind the fire, articles have appeared in the press vilifying the mothers for neglect. Sensational headlines like “Illinois DCFS drops bombshell as it investigates Little Village sleepover fire deaths,” which appeared in the Chicago Sun-Times last week, are aimed at painting the worst possible picture of these victims of a social crime—a product of the concentrated growth of poverty and inequality in major cities in the United States like Chicago.The Sun-Times reported that the Illinois Department of Children and Family Services (DCFS) found one of the mothers who lost five children, Yolanda Ayala, to have been the subject of 21 prior child welfare investigations, 19 of which were found to be unfounded. While these investigations have nothing to do with the immediate cause of the fire, which is still under investigation, the four mothers have come under intense scrutiny. Thirty-five-year-old Ayala was one of four mothers who lost their children in the house fire. She lost five children in the blaze, including Amayah Almarez, 3 months; Ariel Garcia, 5; Xavier Contreras, 11; Nathan Contreras, 13; Cesar Contreras, 14.  Ayala previously suffered from depression and all the conditions of poverty in a neighborhood where the average income is less than $35,000 a year, with a third of households below the poverty line. Nonetheless, she was known to welcome other neighborhood children into her home and take care of them. Leticia Reyes, Ayala’s sister, was the mother of 14-year-old Adrian Hernandez, who died in the fire. Reyes was investigated once in 2007 by the DCFS, but the allegation was unfounded. 

Federal Education Funding: Where Does the Money Go? (with six 15 year graphs) Government spending on education has surged over the last decade and a half, with money being funneled to federal programs for low-income students, students with disabilities and a slate of competitions that the Obama administration launched through the economic stimulus package. Since 2002, federal funding for education has increased by 36 percent, from $50 billion to $68 billion, according to an analysis by the Committee for Education Funding, a District of Columbia-based advocacy organization. It peaked in 2009 at $97 million, thanks to an injection of dollars from the economic stimulus, most of which went to staving off teacher layoffs. By far, the biggest amount of federal education dollars goes toward funding the Pell Grant program, a tuition assistance initiative for low-income students. In fiscal 2016, the government is spending $22 billion to fund Pell Grants, twice what was spent in 2002, when the program garnered a little more than $11 billion.  The explosion in the tuition assistance program was a result of more people qualifying for the grant, in part because of the Great Recession and in part because the Obama administration lowered the income threshold to qualify. The next-largest slice of overall education spending is going toward a grant program for school districts with large numbers of low-income students, known as Title I. Funding for the program also saw a big increase since 2002, going from $10.4 billion to $14.9 billion this year, an increase of 43 percent. Special education was another big winner, with funding now at $11.9 billion – an increase of nearly 60 percent since 2002. Early childhood education saw an overall increase in funding through various federal programs.  Head Start, which is technically funded by the Department of Health and Human Services, provides preschool and other family health services to low-income families. Funding for the program has increased significantly, from $6.5 billion in 2002 to $9.2 billion in 2016. The Preschool Development Grants competition, a major priority for the Obama administration, launched in 2014 with $250 million in funding and has secured that amount each year since. The program provides funding to states to replicate or expand existing high-quality early child care centers, or to launch new ones.  Special education funding for infants and families has been bumped up slightly, from $417 million in 2002 to $459 million now. Federal dollars for special education preschool grants dipped, however, from $390 million in 2002 to $368 million in 2016.

Company Making Bulletproof Backpacks For US Students Flooded With Orders - Shopping for back-to-school items usually consists of calculators, pens, notebooks, and if your family is in the upper echelon of society — perhaps an Ipad. But with a nation in chaos and desperate to avoid another school shooting, it has become increasingly common for teachers and students, and even some parents to now demand bulletproof backpacks. Right before our eyes, the nation is radically shifting as the pain from recent school shootings have swayed the cognitive thought process of many parents to accept militarization within education facilities. Next thing you will know, the minivan is swapped out with an Audi Q5 Security (Audi’s first armored vehicle on a production line) and the children are all wearing kevlar infused backpacks similar to the tactical gear worn by US soldiers.  In the last 18 years, approximately 25 percent of all of the 160 mass shooting incidents took place in schools, according to the FBI. In response, school districts have taken drastic measures towards gun control on campuses, including surveillance cameras, security locks, metal detectors, bullet resistant windows, and even implementing resource officers during school hours. After the horrific shooting of 17 kids at Marjory Stoneman Douglas High School in February 2018, the civilian defense industry as a whole experienced an influx of sales from school districts and worried parents. The hottest item on the block is the bulletproof backpack and there are several companies that have reported booming sales. Florida-based Guard Dog Security specializes in non-lethal personal security and self-defense products designed to protect people from small arms fire. Guard Dog President Yasir Sheikh told Fortune, “demand has definitely gone up” in recent years, and explained that sales often increase after a school or mass shooting. Guard Dog products recently went mainstream, which it seems as the company was able to attract a significant buyer that enabled them to launch their products in major retailers including Home Depot, Office Depot, Walmart, Amazon, and even Bed Bath & Beyond.

California Votes To Ban Schools From Early Start Times To Give Students More Sleep - Not The Onion, but FOX reports on the latest absurdity to come out of California public schools:California lawmakers voted Friday to bar middle and high schools from starting before 8:30 a.m., one of dozens of proposals debated in the Legislature on the final day of its legislative session.The bill, SB328, reportedly passed by narrow margin in both chambers of the state legislature which late into the night considered a variety of topics and proposals just before a midnight deadline; and if signed into law by Gov. Jerry Brown, it will go into effect in three years.   School health advocates claim that early start times cut down on the number of hours of sleep teens get each night. According to Centers for Disease Control and Prevention figures cited by FOX, almost 80 percent of all California middle and high schools started earlier than 8:30 a.m. in 2012.However, opponents of the bill say this is yet more nanny state action initiated by a far removed state assembly. "When it comes to education, the farther away the decisions are made from the classroom, the worse those decisions are," Assemblyman Jose Medina, D-Riverside, said of the bill. Opponents say it's a matter that should be in the hands of local school boards and not the state legislature, as only the former can be sensitive to needs of the local community. But proponents claim a later school start time will result in increased graduation rates throughout the state. Assemblyman Jay Obernolte was widely cited as saying, "This is the single most cost-effective thing we can do to improve high school graduation rates." The only exemption to the new law should it take effect are rural schools; and schools would further still have control over scheduling electives or "extra periods" before the regular school day begins. 

Arizona Supreme Court strikes down “Invest in Ed” ballot initiative -- Last week, the Arizona Supreme Court ruled against Arizona’s Invest in Ed initiative, which would have mandated a modest increase in taxes on high incomes and dedicate the funds to public education. By striking the initiative from the November ballot, the court has trampled on the wishes of 270,000 voters who signed petitions to put the measure on the ballot. The removal of the measure underscores the fact that the rich will not accept the slightest inroad on their personal wealth no matter how dire the conditions for the state’s more than one million students. While the Invest in Ed proposition has been struck from the ballot, Proposition 305, which would divert more public school money to private schools, remains.The outcome of the ballot initiative also highlights the treachery of all those forces—the unions, the Democrats and their affiliated organizations—who shut down the statewide walkout by teachers and presented the ballot initiative as the alternative to spreading the strike to other states and developing a powerful political movement of the working class against both corporate-controlled parties.The Arizona Education Association (AEA) and the Arizona Educators United (AEU) Facebook group, led by Noah Karvelis, both hailed Republican Governor Doug Ducey’s deal to end the strike, and claimed teachers could make up the $700 million shortfall between their demands and the deal the union agreed to through the Invest in Ed ballot measure.The state supreme court’s decision overturned an earlier lower court ruling that upheld the ballot initiative. Its ruling is based on specious technicalities raised in the Arizona Chamber of Commerce’s challenge to the measure.

Seattle Education Association orders teachers to work without contract vote -- The Seattle Education Association (SEA), the local affiliate of the Washington Education Association (WEA), is sending teachers to work on the first day of school Wednesday after reaching a tentative agreement Friday with Seattle Public Schools (SPS), which meets none of the teachers’ demands. The union has ordered educators back to the classrooms without releasing the full details of the deal and teachers will not have a chance to vote on it until the weekend. The union contract covers more than 5,000 educators in Seattle, which is one of 200 districts in Washington state negotiating new contracts in the wake of a state Supreme Court decision that declared that the state had failed its “paramount responsibility” to educate children and had to increase funding for schools and teacher salaries. The settlement by the SEA is aimed at isolating striking teachers in other districts and to preempt the increasing calls by rank-and-file teachers for a statewide strike to win substantial improvements to wages and school funding. Last Tuesday, Seattle educators packed Benaroya Hall, the city’s immense downtown opera hall, for a general membership meeting where they overwhelmingly authorized a strike by voice vote. Teachers, specialists and support staff expressed their eagerness to wage a fight for salary hikes necessary to meet the rising cost of living in Seattle, health care for substitute teachers, and an expansion of public-school staff and greater funding more broadly.   Late Friday night, the school board and union announced that they had reached a deal.Although they are being sent back to work before approving the contract, educators have little to no information regarding the agreement, and will only receive details on Tuesday evening at the earliest, once union representatives meet. The contract ratification vote will take place on Saturday, September 8. Tellingly, the school board has released more details about the agreement than SEA itself, which is seeking to prevent teachers from reviewing the actual agreement in advance of returning to work on Wednesday.

Striking Tacoma, Washington, teachers demand better pay, funding for education - Teachers and support staff in Tacoma, Washington, began their strike Thursday, after Tacoma Public Schools and the local affiliate of the National Education Association (NEA) failed to reach an agreement. The 2,400 educators under the Tacoma Education Association joined roughly 5,000 other educators in ten districts striking across Washington state. The TEA was forced to call the strike following a 97.3 percent strike authorization vote Tuesday night and an insulting 3.1 percent pay increase offered by the district. Teachers throughout the state have had their pay frozen for years. A state Supreme Court decision forced the state legislature to provide $2 billion to districts statewide for teacher salary increases, sparking negotiations between school boards and local education unions. The unions are working to isolate teachers in each district from each other and prevent a state-wide walkout. However, sentiment for statewide action and a broader struggle is growing. On Saturday, teachers in Seattle, the largest school district in the state, will vote on a deal supported by the union that includes a 10 percent wage increase, which is far below what teachers have lost from the pay freeze.At demonstrations in Tacoma on the first day of the strike, teachers from every grade level and subject were joined by parents and students on picket lines across the city. The energetic rallies attracted honks and cheers of solidarity from members of the largely working class community. Michelle, an elementary school teacher in Tacoma, talked to reporters at the rally outside of Tacoma Public Schools central administrative office. She explained why teachers were actively seeking to strike for their demands. “It’s been very difficult keeping up with the costs of living here when we aren’t getting more pay. The state is finally giving the districts some money specifically for salaries, and we are demanding what we deserve to be paid.

Oklahoma Teachers Just Purged the Statehouse of Their Enemies -- For nearly a decade, Republican officials have been treating ordinary Oklahomans like the colonial subjects of an extractive empire. On Governor Mary Fallin’s watch, fracking companies have turned the Sooner State into the earthquake capital of the world; (literally) dictated policy to her attorney general; and strong-armed legislators into giving them a $470 million tax break — in a year when Oklahoma faced a $1.3 billion budget shortfall.To protect Harold Hamm’s god-given right to pay infinitesimal tax rates on his gas profits (while externalizing the environmental costs of fracking onto Oklahoma taxpayers), tea party Republicans raided the state’s rainy-day funds, and strip-mined its public-school system. Between 2008 and 2015, Oklahoma’s slashed its per-student education spending by 23.6 percent, more than any other state in the country. Some rural school districts were forced to adopt four-day weeks; others struggled to find competent teachers, as the GOP’s refusal to pay competitive salaries chased talented educators across the border into Texas. Students who were lucky enough to have both five-day weeks and qualified instructors still had to tolerate decaying textbooks. Polls showed overwhelming public support for raising taxes on the wealthy and oil companies to increase investment in education. GOP lawmakers showed no interest in those polls.   But then, Oklahoma teachers decided to give their state a civics lesson. Inspired by their counterparts in West Virginia, Oklahoma teachers went on strike to demand long-overdue raises for themselves, more education funding for their students, and much higher taxes on the wealthy and energy companies — to ensure that those first two demands would be honored indefinitely.  They won one out of three. Despite the fact the teachers had no legal right to strike — and that the Oklahoma state legislature requires a three-fourths majority to pass tax increases of any kind — the teachers galvanized enough public support to force Fallin to give an inch. As energy billionaire (and GOP mega-donor) Harold Hamm glowered from the gallery, Oklahoma state lawmakers passed a tiny increase in the tax on fracking production (one small enough to leave Oklahoma with the lowest such tax rate in the nation), so as to fund $6,100 raises for the state’s teachers. The strikers were pleased, but unappeased. They promised to make lawmakers pay for refusing to finance broader investments in education with larger tax hikes.  Last night, Oklahoma’s GOP primary season came to an end — and the teachers beat the billionaires in a rout. Nineteen Republicans voted against raising taxes to increase teacher pay last spring; only four will be on the ballot this November.

Xanax Use Among Teens Skyrockets As Benzos Overtake Opioids - Despite overall prescription drug addiction abuse dropping dramatically among adolescents over the past 15 years, addiction treatment centers across the country are seeing a surge in the number of young people hooked on Xanax, according to Pew. addiction practitioners say they’re seeing a surge in the number of young patients who are hooked on Xanax. Many take high daily doses of the drug, sometimes in deadly combination with opioids and alcohol. -PewThis increase has yet to be reflected in national data, which doesn't surprise Boston Children's Hospital head of adolescent addition, Sharon Leavy - who says that addition treatment centers are "the tip of the spear," and she is "not surprised that the spike in Xanax use isn’t reflected in national data yet."Addiction specialists say they're expecting an "onslaught of teens addicted to Xanax and other sedatives," according to Pew - one of many anti-anxiety drugs known as benzodiazepines, or "benzos." “Adolescent benzo use has skyrocketed,” Levy said, “and more kids are being admitted to hospitals for benzo withdrawal because the seizures are so dangerous.” At the same time, she said, far fewer kids are seeking treatment for prescription opioid addiction. “When I ask them if they’re using opioids, they say, ‘No. I wouldn’t touch the stuff.’”

Skim reading is the new normal. The effect on society is profound - The iPad is the new pacifier for babies and toddlers. Younger school-aged children read stories on smartphones; older boys don’t read at all, but hunch over video games. Parents and others read on Kindles or skim a flotilla of email and news feeds. Unbeknownst to most of us, an invisible, game-changing transformation links everyone in this picture: the neuronal circuit that underlies the brain’s ability to read is subtly, rapidly changing - a change with implications for everyone from the pre-reading toddler to the expert adult. As work in neurosciences indicates, the acquisition of literacy necessitated a new circuit in our species’ brain more than 6,000 years ago. That circuit evolved from a very simple mechanism for decoding basic information, like the number of goats in one’s herd, to the present, highly elaborated reading brain. My research depicts how the present reading brain enables the development of some of our most important intellectual and affective processes: internalized knowledge, analogical reasoning, and inference; perspective-taking and empathy; critical analysis and the generation of insight. Research surfacing in many parts of the world now cautions that each of these essential “deep reading” processes may be under threat as we move into digital-based modes of reading. We know from research that the reading circuit is not given to human beings through a genetic blueprint like vision or language; it needs an environment to develop.  If the dominant medium advantages processes that are fast, multi-task oriented and well-suited for large volumes of information, like the current digital medium, so will the reading circuit. As UCLA psychologist Patricia Greenfield writes, the result is that less attention and time will be allocated to slower, time-demanding deep reading processes, like inference, critical analysis and empathy, all of which are indispensable to learning at any age.

Only three percent of students have received Governor Cuomo’s “free tuition” scholarship for New York public universities - As college students throughout New York state return to school, a report has revealed that the state’s much-vaunted Excelsior Scholarship, which was advertised as providing free tuition at all of New York’s public universities to “middle-class” families, was awarded to only 3.2 percent of undergraduates in the 2017-2018 academic year. An even smaller percentage of community college students and students in New York City—one of the most expensive cities in the world—received the scholarship.  The fact that only 20,086 out of 633,543 undergraduate students received the scholarship demonstrates that the scholarship was mostly an electoral stunt designed to appease students’ anger over student loan debt.  An extremely limited number of New York students are eligible for the Excelsior Scholarship. Students must be attending a school in the State University of New York (SUNY) or City University of New York (CUNY) systems, be taking at least 30 credits per year, cannot have had gaps in their education, must finish their degree within five years, and must come from families with annual incomes below $110,000. Last year the maximum income was $100,000, and next year the maximum will be $125,000, where it is scheduled to remain. Additionally, students receiving the scholarship must remain in New York state at least as many years as they receive the scholarship, or they will have to repay the award.  The Excelsior Scholarship is a “last dollar” scholarship, meaning that if a student’s tuition is already covered by federal Pell Grants or the state Tuition Assistance Program—as is the case with many of the lowest-income students—they are not eligible. It also only applies to tuition, and cannot be used for room and board, fees or books, which are about double the tuition for SUNY students living on-campus. Even though the SUNY and CUNY systems are the second- and third- largest public higher education systems in the United States, respectively, with about 700,000 students in all, the state received less than 64,000 applications, 68 percent of which it denied. Of the rejected applications, 83 percent were rejected for “not sufficient credits.” Not only is 30 credits per year more than the federal minimum for being a full-time student, but it is practically impossible for students who need to work part- or even full-time to make ends meet while going to school.

Social Justice Books Your Kids Are Reading For College - Each year, hundreds of colleges and universities across the United States assign incoming freshmen a “summer reading” book that is discussed throughout the year.  Campus Reform reviewed the summer reading assignments from over 400 schools. While many selections focused on motivation and self-help, Social Justice was the overarching theme this year, including topics on immigration, racism, and sexuality.While not every book assigned was overtly left-leaning, several books chosen this year explore explicitly liberal themes. This has been an ongoing trend among liberal colleges, who create mandatory programs like summer readings to communicate social justice themes to students.

  • The Hate U Give, by Angie Thomas, follows the fictional aftermath of an unjustified police shooting of an unarmed black boy. The novel has been assigned by six schools, including the State University of New York at Brockport and Kansas State University. “The novel goes on to raise cogent and credible counter-arguments to the flattening narratives often presented by authorities and echoed by many media outlets in shooting cases involving young black males,” declares a review by The Atlantic. “Thomas’s novel keenly understands the dangers of defaulting to the cop/vigilante versus ‘thug’ framing device: The deceased get put on trial, rather than their killers.”
  • The Handmaid's Tale, by Margaret Atwood, is a fictional account of a near-future society in which the United States has been replaced by a patriarchal theocratic regime where women’s primary focus is replenishing the waning population.“Women are the main target of the regime’s brutality,” a review from The Guardian surmised. “Their rights and personal freedoms have been abolished. They are no longer allowed to work, to own assets or to be in relationships not sanctioned by the state. They are now categorised according to marital status and reproductive ability.” The Handmaid’s Tale was assigned by four schools, including the University of California, Berkeley and Northwestern University.

The Impact of Chief Diversity Officers on Diverse Faculty Hiring --As the American college student population has become more diverse, the goal of hiring a more diverse faculty has received increased attention in higher education. A signal of institutional commitment to faculty diversity often includes the hiring of an executive level chief diversity officer (CDO). To examine the effects of a CDO in a broad panel data context, we combine unique data on the initial hiring of a CDO with publicly available faculty and administrator hiring data by race and ethnicity from 2001 to 2016 for four-year or higher U.S. universities categorized as Carnegie R1, R2, or M1 institutions with student populations of 4,000 or more. We are unable to find significant statistical evidence that preexisting growth in diversity for underrepresented racial/ethnic minority groups is affected by the hiring of an executive level diversity officer for new tenure and non-tenure track hires, faculty hired with tenure, or for university administrator hires. 

 Hopeful Sign for Borrowers Dealing With Student Debt and Trying to Save for Retirement - The IRS released a groundbreaking private letter ruling on Aug. 17 that could make it easier for borrowers to pay down student loan debt and save for retirement at the same time. Millennials whose sizeable debts hamper their ability to take full advantage of workplace retirement savings opportunities could make qualifying student loan payments and receive 401(k) matching contributions from their employers as well. This could help workers avoid leaving money on the table early in their careers and boost long-term investment earnings. Between 2001 and 2016, the real (inflation-adjusted) amount of student debt owed by American households more than tripled, from about $340 billion to more than $1.3 trillion.  Those with student debt have much lower 401(k) assets by age 30 than those without, and this holds true whether the loans are large or small, according to a new study by the Center for Retirement Research at Boston College. Even if the student loan payments are manageable, the mere fact of having loan debt may color other significant financial decisions, including those related to retirement savings. A 2018 report from the National Institute on Retirement Security (NIRS) revealed that two-thirds of working millennials have nothing saved for retirement. Only 5 percent of working millennials are saving enough to retire comfortably.

One Third Of Americans Have Less Than $5,000 Saved For Retirement -  About one in three Americans have currently saved less than $5,000 toward their retirement. That’s a terrifying number considering the instability of the Ponzi social security scheme. According to Northwestern Mutual’s 2018 Planning & Progress Study, the vast majority of Americans, about 78 percent, say they’re “extremely” or “somewhat” concerned about not having enough money saved up for their retirement. A shocking 21 percent of Americans have literally nothing at all saved for the future, and another 10 percent have less than $5,000 tucked away, the study discovered. According to CNBC News, overall, Northwestern Mutual found that Americans with retirement savings have an average of $84,821 saved, which is far from enough. Experts typically recommend trying to accumulate at least $1 million for a retirement nest egg. Some Americans are more prepared than others: one in four also report having $200,000 or more stashed away, while 16 percent have between $75,000 and $199,999. Meanwhile, a new survey from Bankrate finds that 13 percent of Americans are saving less for retirement than they were last year and offers insight into why much of the population is lagging behind. The most popular response survey participants gave for why they didn’t put more away in the past year was a drop, or no change, in income. Americans, on average, also live above their means and often struggle to just put food on the table.  About 40 percent of Americans cannot buy basic necessities. Nearly 51 million U.S. households — or 43 percent — don’t earn enough to cover their monthly bills for housing, food, childcare, health care, transportation and a cell phone, according to a report released by the United Way ALICE Project. That number includes the 16.1 million households living in poverty, along with the 34.7 million families the United Way has dubbed ALICE: Asset Limited, Income Constrained, Employed. Frequently called the “working poor,” the group doesn’t make enough to make it in today’s economy. –Metro

Soaring bankruptcy rates signal a ‘coming storm of broke elderly,’ study finds - Older Americans are filing for bankruptcy at more than double the rate of just 25 years ago, a sign of a "coming storm of broke elderly," a new study finds.   The rate of people 65 and over filing for bankruptcy grew nearly 204 percent from 1991 to 2016, a study published by the Social Science Research Network found, and the percentage of seniors among all U.S. bankruptcy filers increased by nearly five times over the same period.   Researchers looking at data from the Consumer Bankruptcy Project found that high health care costs, combined with reduced incomes and the widespread decline of pensions, are all contributing to the growing trend of "financially broken retirees."  Deborah Thorne, one of the study's authors from the University of Idaho, said "it's not an individual's fault" when they have to file for bankruptcy, citing issues with retirement systems and Medicare. Thorne said her research found that many older people struggling financially also feel that society seems unconcerned with their plight.  "We’ve become uncaring about what they’re confronting," she said.  Medical costs are a frequent tipping point for older bankruptcy filers, the study found. Although Medicare is a great start for covering seniors' health care costs, many people don't realize that it doesn't cover everything, Thorne said. Long-term care, hearing aids, most dental treatment, eye exams for glasses and foot care are among the many things Medicare Part A and Part B plans do not cover. Medicare can also involve copays, coinsurance, and deductibles that may be difficult for some seniors on reduced incomes to afford.  "My bankruptcy started with back surgery," one older bankruptcy filer told the study's authors. "I had several medical tests that my insurance did not cover. This caused me to fall behind in my medical payments. The next thing I knew, the bills began piling up. I got to the point I owed more than I was making on Social Security."  Medical problems can also lead people to stop working, worsening their financial struggles.

A Texas Lawsuit Being Heard This Week Could Mean Life Or Death For The ACA --Wednesday is looking like yet another pivotal day in the life-or-death saga that has marked the history of the Affordable Care Act.In a Texas courtroom, a group of Republican attorneys general, led by Texas’ Ken Paxton, are set to face off against a group of Democratic attorneys general, led by California’s Xavier Becerra, in a lawsuit aimed at striking down the federal health law. The Republicans say that when Congress eliminated the penalty for not having health insurance as part of last year’s tax bill, lawmakers rendered the entire health law unconstitutional. The Democrats argue that’s not the case.But first, the sides will argue before U.S. District Judge Reed O’Connor in Fort Worth, Texas, whether the health law should be put on hold while the case is litigated. The GOP plaintiffs are seeking a “preliminary injunction” on the law.Ending the health law, even temporarily, “would wreak havoc in our health care system,” said Becerra in a call with reporters last week. “And we don’t believe Americans are ready to see that their children are no longer able to see a doctor or that they cannot get treated for a preexisting health condition.” Here are five questions and answers to help understand the case, Texas v. U.S.

There aren’t enough doctors to go around | TheHill: Quite possibly, the most dire health-care crisis facing America these days is the one we hardly hear about. While lawmakers on both sides of the aisle quibble about the best way to offer Americans access to care, another, more fundamental problem is rapidly becoming acute: There aren’t enough doctors to go around. The United States will face a shortage of anywhere between 42,600 and 121,300 physicians by 2030, according to a study released earlier this summer by the Association of American Medical Colleges.These aren’t just disembodied statistics: They mean that, increasingly, even Americans who believe they have ready access to health care may not be able to see the specialist they require. And given that a doctor’s training lasts about a decade, it’s a crisis we’re already late in addressing. How did we get here? The issue certainly isn’t a dip in medical school enrollment, which has increased by nearly 30 percent since 2002. Instead, the answer is twofold. The first problem is a fast-changing demographic shift: With thousands of Baby Boomers turning 65 every day and entering Medicare, the number of older Americans will double in the next 20 years, a rapid rise that would place an immense burden on even the most functional health care delivery system. And then, there’s economics. In 1997, the Balanced Budget Act capped federal funding of medical residency programs; in 2016, for example, the government spent about $10 billion, the overwhelming majority of it coming from Medicare. Most experts predicted that the cap would soon be lifted; more than 20 years later, it’s still in place. As a result, what we have now is a classic bottleneck condition: More and more people want to practice medicine while less and less funding is available to help create residency programs that meet the demand. 

Obamacare Requirement Blamed For Doctor Burnout -- A government requirement in the massive Obamacare law is being blamed for the burnout of doctors across the United States. A new report found that over just three years as Obamacare was being implemented, “physician burnout increased significantly, from 45.5 percent to 54.4 percent.” The report published in the American Journal of Medicine found that the electronic health records (EHR) is destroying the relationship between doctors and patients. The Citizens’ Council for Health Freedom charges the Obamacare requirement that doctors use electronic health records has caused a surge of burnout in the medical profession, explains Joseph Farah’s G2 Bulletin. “The EHR is causing doctors to leave their patients,” said Twila Brase, the president of CCHF and the author of “Big Brother in the Exam Room: The Dangerous Truth About Electronic Health Records.” “Congress forced doctors to buy and use computerized record systems to collect and report patient data to the government. And it’s wreaking havoc on their practices and their patients,” said Brase according to WND.

Doctors said the coma patients would never wake. AI said they would – and they did -- At least seven patients in Beijing who doctors said had “no hope” of regaining consciousness were re-evaluated by an artificial intelligence system that predicted they would awaken within a year. They did. One 19-year-old patient spent six months with unresponsive wakefulness syndrome – formerly known as being in a vegetative state — after an accident caused a severe injury to his left temple. Some of China’s best neurologists conducted four rounds of assessments on his potential for recovery and gave him seven out of 23 points on a coma recovery scale, a score which meant his family had a legal right to unplug his life support. After going through his brain scans, however, the computer gave him more than 20 points, close to the full score. In another case, doctors gave a 41-year-old female stroke victim who had been in a vegetative state for three months a recovery potential score of six. The computer’s: 20.23. The young man, middle-aged woman and five other patients whom doctors believed would never recover woke up within 12 months of the brain scan, precisely as predicted. 

Collaboration key to solving China-fuelled opioid epidemic, US officials say - United States law enforcement officials reaffirmed the Trump administration’s contention on Thursday that synthetic opioids produced in China are fuelling an opioid epidemic in the US responsible for the deaths of tens of thousands of people every year. At the same time, though, they took pains to distance themselves from some of the recent heated talk on the issue and expressed cautious optimism that collaboration between US and Chinese drug control agencies would help counter the crisis.Fentanyl, a synthetic opioid around 50 times more potent than heroin, is being “shipped into the US via postal or express mail from China,” said Paul Knierim of the US Drug Enforcement Administration (DEA), speaking at a hearing convened by the House of Representatives’ Foreign Affairs subcommittee. Knierim, the deputy chief of operations at the DEA’s Office of Global Enforcement, cited the influx of synthetic opioids like fentanyl from China – as well as Mexico – as the primary reason behind the increase in opioid overdoses the US has witnessed in recent years.Overdoses in the US attributable to fentanyl more than doubled between 2015 and 2016 to almost 19,500 deaths, compared to an overall rise in drug overdoses of 21 per cent over the same period, according to statistics from the National Centre for Health Statistics at the Centers for Disease Control and Prevention. Last year saw the drug kill roughly 29,500 people in the US, close to double the number of people who died from heroin overdoses.

UCLA’s Patent War in India Prevents Access to Prostate Cancer Treatment Worldwide -- One in five Americans ration their medicine due to high prices, and 10 million people die every year due to lack of access to medicines. Because of patent exclusivity laws, pharmaceutical corporations are able to set the price tag of a novel drug as high as they want, which often keeps it out of the hands of low-income populations. Patent rights, along with their political and economic power, allow Big Pharma to prioritize profit-making over health interests and leads to even larger inequalities in global access to medicines.University research often plays a big role in the discovery of lifesaving medicines before manufacturers’ move in to price-gouge the new drugs. Take enzalutamide, a treatment for late-stage prostate cancer, as an example. The underlying research that led to its discovery was done at the University of California and funded in part by the Department of Defense and a $2.3 million grant from the National Institutes of Health. Many of the people it is intended to help cannot access the lifesaving medicine due to the high price set by its manufacturer, Pfizer. Further, Pfizer’s price in lower- and middle-income countries highlights the far-reaching monopoly power that US drug corporations have in the international market. Intended to treat late-stage prostate cancer that is unresponsive to chemotherapy and surgical methods, enzalutamide — or Xtandi — has the potential to improve and prolong the lives of many people around the world living with untreatable prostate cancer. But the sticker price limits its impact. The University of California Los Angeles (UCLA) has raked in more than half a billion in profit by licensing its novel drug to the biotech company Medivation, Inc., later acquired by Pfizer, which currently sells enzalutamide at $101.16 per pill in the United States. UCLA went on to pursue a patent on Xtandi in India, which would block generic manufacturers from producing and marketing enzalutamide at a lower price. When the Indian government denied the patent, the university responded by filing an injunction, which freezes generic marketing. India’s generic manufacturers often develop medicines for other low- and middle-income countries. Thus, UCLA’s patent case prevents many nations from accessing a lower-priced generic enzalutamide.

Too much of a good thing? Very high levels of 'good' cholesterol may be harmful - Very high levels of high-density lipoprotein (HDL or "good") cholesterol may be associated with an increased risk of heart attack and death, according to research presented today at ESC Congress 2018.1 "It may be time to change the way we view HDL cholesterol. Traditionally, physicians have told their patients that the higher your 'good' cholesterol, the better. However, the results from this study and others suggest that this may no longer be the case."HDL cholesterol has been considered "good" because the HDL molecule is involved in the transport of cholesterol from the blood and blood vessel walls to the liver and ultimately out of the body, thereby reducing the risk of clogged arteries and atherosclerosis. People with low HDL cholesterol have a greater risk of atherosclerosis and cardiovascular disease. But the protective effect of very high HDL cholesterol has been unclear. This study, conducted as part of the Emory Cardiovascular Biobank, investigated the relationship between HDL cholesterol levels and the risk of heart attack and death in 5,965 individuals, most of whom had heart disease. The average age of participants was 63 years and 35% were female. During a median follow-up of four years, 769 (13%) participants had a heart attack or died from a cardiovascular cause. Participants with HDL cholesterol 41-60 mg/dl (1.1-1.5 mmol/L) had the lowest risk of heart attack or cardiovascular death. Risk was increased both in participants with low levels (less than 41 mg/dl) and very high levels (greater than 60 mg/dl) of HDL cholesterol, which produced a U-shaped curve when plotted graphically.  Participants with HDL cholesterol levels greater than 60 mg/dl (1.5 mmol/L) had a nearly 50% increased risk of dying from a cardiovascular cause or having a heart attack compared to those with HDL cholesterol levels 41-60 mg/dl (1.1-1.5 mmol/L).

CRISPR: Are gene-edited ingredients already in your food? -- In a gleaming laboratory hidden from the highway, a researcher with the biotech firm Calyxt works the controls of a boxy robot.The robot whirs like an arcade claw machine, dropping blips of DNA into tubes with pipettes. It’s building an enzyme that rewrites DNA — and transforming food and agriculture in the process. Thanks to a cutting-edge technology called gene editing, scientists can now turn plant genes “on” and “off” almost as easily as Calyxt scientists flip a switch to illuminate the rows of tender soybean plants growing in their lab.. Calyxt’s “healthier” soybean oil, the industry’s first true gene-edited food, could make its way into products such as chips, salad dressings and baked goods as soon as the end of this year. Scientists at Calyxt, a subsidiary of the French pharmaceutical firm Cellectis, developed their soybean by turning “off” the genes responsible for the trans fats in soybean oil. Compared with the conventional version, Calyxt says, oil made from this soybean boasts far more “healthy” fats, and far less of the fats that raise bad cholesterol. Unlike older genetic modification methods, the new techniques are precise, fast and inexpensive, and companies hope they will avoid the negative reputation and regulatory hurdles that hobbled the first generation of genetically modified foods. But the speed of change has startled consumer and environmental groups, who say the new technology has not been adequately vetted, and they have petitioned regulators to add further safety reviews.

Drug-resistant superbug spreading in hospitals: study -- A superbug resistant to all known antibiotics that can cause "severe" infections or even death is spreading undetected through hospital wards across the world, scientists in Australia warned on Monday.  Researchers at the University of Melbourne discovered three variants of the multidrug-resistant bug in samples from 10 countries, including strains in Europe that cannot be reliably tamed by any drug currently on the market.  "We started with samples in Australia but did a global snapshot and found that it's in many countries and many institutions around the world," Ben Howden, director of the university's Microbiological Diagnostic Unit Public Health Laboratory told AFP. "It seems to have spread."  The bacteria, known as Staphylococcus epidermidis, is related to the better-known and more deadly MRSA.  It's found naturally on human skin and most commonly infects the elderly or patients who have had prosthetic materials implanted, such as catheters and joint replacements. "It can be deadly, but it's usually in patients who already are very sick in hospital... it can be quite hard to eradicate and the infections can be severe," Howden said. His team looked at hundreds of S. epidermidis specimens from 78 hospitals worldwide.They found that some strains of the bug made a small change in its DNA that led to resistance to two of the most common antibiotics, often administered in tandem to treat hospital infections.  "These two antibiotics are unrelated and you would not expect one mutation to cause both antibiotics to fail,"

Highest levels of viruses at airports found in plastic security trays, study reveals - Plastic security trays retain the highest levels of viruses at airports, a study has found. Pandemic experts found evidence of viruses on 10% of airport surfaces tested – which also included shop payment terminals, staircase rails, passport checking counters and children’s play areas. The various surfaces were swabbed at Helsinki-Vantaa airport at peak-time as part of a scientific investigation carried out by experts from the University of Nottingham and the Finnish National Institute for Health and Welfare during the winter of 2016. The research found viruses were most commonly found on the plastic trays that are circulated along the passenger queue at the hand luggage X-ray checkpoint. Experts concluded that hand washing and careful coughing hygiene are crucial to the control of contagious infections in public areas with high volumes of people passing through. The University of Nottingham said the most common virus found in the survey was rhinovirus, which causes the common cold, while the swabs also picked up the influenza A virus. No respiratory viruses were found on toilet surfaces.

Plane quarantined at JFK amid reports of sick passengers A plane has been quarantined amid reports a number of passengers have become ill aboard a flight from Dubai that arrived at New York’s Kennedy Airport.The Emirates flight landed at JFK at about 9.10am (2.10pm BST).The airline said about 10 passengers were sick and were getting medical attention “as a precaution”.  Video footage shot by news helicopters showed the jet sitting on the tarmac surrounded by emergency vehicles and ground control personnel.A spokesman for New York City mayor Bill de Blasio said representatives of the US Centres for Disease Control and Prevention are on the scene.Eric Phillips, a spokesman for the mayor, tweeted that the flight stopped in Mecca, which is experiencing a flu outbreak, and “early indications point to that as a possibility.” A New York Police counter-terrorism division tweeted that it is monitoring what appeared to be a “medical situation”.

CDC Investigating After Multiple Passengers Fall Ill At Philadelphia Airport - One day after 19 passengers fell ill during a JFK flight from Dubai, CBS Philadelphia reports that multiple passengers fell ill on separate international flights coming into Philadelphia International Airport on Thursday. Officials said that 12 passengers arriving at the airport on American Airlines flights from Paris and Munich experienced flu-like symptoms, with multiple ambulances dispatched to the airport. BREAKING: Several passengers on two international flights are complaining of flu-like symptoms. Here is a statement from the airport. @CBSPhilly    All 250 passengers and crew on the flights were held for a medical review and the Centers for Disease Control and Prevention was notified to investigate.Furthermore, the CDC, Philadelphia Health Department and the Philadelphia Fire Department personnel performed medical evaluations on the passengers.The passengers who did not fall ill are in the process of being released according to Fox 29. It’s not yet known what caused the people to become sick. No one was transported and no airport operations were impacted. Airport spokesperson Diane Gerace released the following statement:  "As a precaution, all passengers on the two flights—totaling about 250 plus crew—were held for a medical review and the CDC was notified. CDC, the Philadelphia Health Department, and Philadelphia Fire Department personnel performed medical evaluations and assessments. The passengers—except for the 12 affected—are in the process of being released."

Lead in US school water “disturbing”—Detroit just shut off all fountains --Students returning to school in Detroit next week will find their water fountains entirely shut off over concerns of elevated lead and copper levels—something that federal lawmakers say is part of a “disturbing and unacceptable” nationwide issue.The decision to shut off the drinking water in Detroit was based on a first round of results from testing that the school district carried out in its 106 schools earlier this year. The results from just 24 schools so far surfaced 16 that had water sources tainted with excessive levels of lead, copper, or both. For instance, tests at the district’s Academy of the Americas Elementary school found a kitchen and drinking faucet in a basement cafeteria that had lead levels of 182 micrograms per liter (ug/L) and 154 ug/L, respectively. Those are more than ten ties the Environmental Protection Agency’s recommended limit of 15 ug/L. The full testing results can be found here.  Nikolai Vitti, superintendent of the Detroit Public Schools Community District (DPSCD), announced the shutoff Wednesday. In a statement to the Detroit Free Press, Vitti explained:Although we have no evidence that there are elevated levels of copper or lead in our other schools where we are awaiting test results, out of an abundance of caution and concern for the safety of our students and employees, I am turning off all drinking water in our schools until a deeper and broader analysis can be conducted to determine the long-term solutions for all schools. In a joint statement, the Great Lakes Water Authority (GLWA) and the Detroit Water and Sewerage Department (DWSD) were quick to point out that the contamination is not due to a problem with the region’s water system. Rather, the pair blamed aging plumbing within the schools for the contamination.

New Study Links Air Pollution to Dementia -  There's no question that air pollution is bad for your body, from lung cancer to heart disease. Even President Trump's coal-friendly U.S. Environmental Protection Agency (EPA) admits that dirty air can increase adverse health effects and cause death.Now, researchers from Arizona State University have determined another air pollution risk: dementia.The new paper, published by the National Bureau of Economic Research, compared fifteen years of Medicare records for 6.9 million older adults with the EPA's air quality data. They tested whether these individuals' onset of dementia was correlated with long-term exposure to tiny pollution particles known as PM2.5.Indeed, the researchers found that a 1 microgram-per-cubic-meter (μg/m³) increase of PM2.5 over the course of a decade increases a person's odds of receiving a dementia diagnosis by 1.3 percentage points.PM2.5, which is particulate matter with a length of 2.5 microns or less, is often a cocktail of toxins from power plants, automobiles and other industrial sources. The World Health Organization has PM2.5 guidelines of 10 μg/m³—a threshold that 95 percent of the world's population does not meet.

Waste Watch: Burberry Pledges to Stop Burning Unsold Goods -- Jerri-lynn Scofield - Burberry triggered an avalanche of bad publicity earlier this summer when the company disclosed that in 2017, it had burnt £28.6 million worth of product– clothing, accessories, and perfume– to protect its brand. The value of unsold goods Burberry destroyed over the last five years totalled £105 million. As ABC News (e.g., Australian Broadcasting Corporation) reported in Burberry burns unsold products and not everyone is buying why in July: Fashion firms including Burberry destroy unwanted items to prevent them being stolen or sold cheaply. The Times reported shareholders were unhappy with the practice — critics have reacted angrily on social media, concerned luxury brands don’t want “poor people” to wear the items.” The company’s initial response to criticism after its disclosure was to defend its actions, in terms that suggested it was missing the point. As The Guardian reported in Burberry destroys £28m of stock to guard against counterfeits: Burberry said it only destroyed items that carried its trademark and only worked with specialist companies able to harness the energy from the process in order to make it environmentally friendly. Well, alrighty then. As long as they harnessed energy from the process, that makes things hunky-dory, no? Perhaps not– as Burberry has belatedly come to realize. The company has just announced that with immediate effect, it will no longer destroy unsold goods, according to the BBC in Burberry stops burning unsold goods and using real fur. Instead, Burberry will now reuse, repair, donate or recycle all unsold products, thus reducing the waste it generates. Burberry has also pledged to cease using animal fur in its products.

'Never Forget': Gov't Said The Air Was Safe, Now Thousands Of 9/11 First Responders Have Cancer - In early August the New York Post reported on newly released numbers of reported 9/11 related illnesses, including 9,795 total case of 9/11-related cancer. The numbers were released by the federally funded World Trade Center Health Program. According to the program there have been more than 400 documented cases of death from 9/11-related cancers. However, unfortunately, the plight of the men and women who rushed into “Ground Zero” on September 11, 2001 and the following months is often forgotten in the public conversation. Seventeen years after the attacks the first responders are still fighting for their lives. On Thursday the Los Angeles Times reported 15 FBI agents have died from cancers linked to exposure to various toxins during investigation and cleanup of the wreckage. The Times notes that three FBI agents have died since March. In addition, News 12 in Westchester reports that Kathleen O’Connor, a 20-year veteran with the New Rochelle Police Department, recently died from a 9/11-related illness.WECT News reports that retired NYPD detective Chuck McLiverty lives with skins allergies and a crushed hand due to his role as a first responder. The former detective spent nearly every day for six months working 12-hour shifts, often without breathing protection.“We may make light of it, joke about it, but you’re always just wondering, am I next? Or is the guy or girl sitting next to, are they a walking time bomb that’s going to explode? You get tired of going to funerals,” McLiverty told WECT.“All you could see for miles and miles was big plumes of black, billowing smoke. All you could see was stuff falling down, out of the air. The air was so thick, it’s like you could wave your hand, like being in a snow storm.”The New York Daily News also recently announced the death of retired firefighter Michael McDonald who died from lung and brain cancer from 9/11 cleanup efforts. McDonald’s entire career was spent at Ladder 128 in Greenpoint, Brooklyn. With his death he comes the 181st member of the FDNY to die from 9/11-related illnesses. The NY Daily notes that this is more than half of the 343 FDNY members killed during the collapse of the twin towers on September 11, 2001. An NYPD spokesman told the Daily that 185 city cops have died of illnesses connected to their time as first responders. Each of these stories offer a small glimpse into the everyday reality of these first responders. They are literally watching their friends and associates die around them while the American people pay little attention. How did this happen? How did we get to the point where nearly 10,000 people who risked their lives to help others are now waiting to die from cancer?

15 male Ground Zero first responders have breast cancer - The 9/11 attack has produced another health nightmare — at least 15 men who were in the vicinity of Ground Zero defied astronomical odds and have been stricken with breast cancer. Men account for only 1 percent of all breast cancers nationally. Jeff Flynn is one of the unlucky ones. Flynn, 65, was an account manager for data-storage company Dell EMC assigned to Goldman Sachs on Maiden Lane when planes smashed into the nearby World Trade Center towers. He spent months around Ground Zero helping Goldman and other financial services firms get back up. It was in 2011 — a decade later — when Flynn noticed a lump in his chest. When he returned home, he got a biopsy and was diagnosed with Stage 3 breast cancer. He underwent chemotherapy and radiation treatment and then had reconstructive surgery. “During my mastectomy, surgeons excised 36 lymph nodes and 35 were cancerous,” Flynn recalled. And his ordeal was far from over. Three years later, a new lump appeared on his neck. Stage 4 cancer had invaded Flynn’s lymph nodes. That cancer is now being kept at bay with hormone shots and the cancer-fighting drug iBrance. “I do feel like my breast cancer was related to exposure to 9/11 toxins. There’s no history of breast cancer in my family,” he said. “I spent months breathing that crap in. You can wind up with any cancer from being down there.” Flynn retired early because of his health problems. He received a six-figure award from the September 11th Victim Compensation Fund, and the World Trade Center Health Program is helping cover the co-pays for his medications. The Barasch McGarry law firm, which represents 9/11 health cases, said it has 15 male clients with breast cancer who either worked or lived around the World Trade Center. Five are 9/11 responders, including two city firefighters, an NYPD sergeant, an ironworker and a highway repairman. Others worked for private businesses in the area and one was a student downtown at the time.  

Chemically Induced Frankenstein-Humans - One of the biggest open questions of this century is whether 144,000 different chemicals swirling throughout the world are properly tested and analyzed for toxicity. By almost all accounts, the scale of toxic risk is unknown. This may be the biggest tragedy of all time, a black eye of enormous proportions. Correspondingly and very likely, as a result of ubiquitous chemical presence, one hundred fifty million (150,000,000) Americans have chronic disease, including high cholesterol, high blood pressure, arthritis, heart disease, diabetes, fibromyalgia, cancer, stroke, asthma, cystic fibrosis, obesity, and osteoporosis (Rand Corporation Review 2017). Why? According to Dr. Paul Winchester, who discovered the link between chemicals, like pesticides atrazine and glyphosate aka Roundup and epigenetic human alteration, the findings are: “The most important next discovery in all of medicine.”  Dr. Winchester was one of the researchers/authors of “Atrazine Induced Epigenetic Transgenerational Inheritance of Disease, Lean Phenotype and Sperm Epimutation Pathology Biomarkers,” PLOS, published September 20, 2017.  The grisly underlying message of that study is as clear as a bell: Chemicals found far and wide throughout America alter human hormones as well as human DNA, which passes along generation-to-generation known as transgenerational inheritance. Frankly, nothing more should need to be said to spur outrage and pissed-off people all across the land because, if that seminal study is correct in its analysis that chemicals mess up/distort/disrupt human hormones and alter human DNA in a destructive manner, then the streets of America should be filled with people wielding pots and pans, probably pitchforks, and ready for the fight of a lifetime because, by any account, there has been massive failure of ethical standards and regulations of chemicals for decades and decades.   The chemicals in the aforementioned study include the herbicide atrazine, one of the most widely used herbicides in the country and commonly detected in drinking water. The study demonstrated that atrazine is an endocrine disruptor that negatively alters human hormonal systems, as chronic diseases overwhelm American society. Yet, the most disturbing issue is the epigenetic impact, meaning that environmental factors impact the health of people and also their descendants. It stays with and passes along the human genome generation-by-generation-by-generation.

USDA Projects Record Corn Yields for 2018-19 - The United States is on track for another record-setting year of corn yields. USDA's first survey-based yield forecast of the 2018/19 corn crop reported a yield gain of 4.4 bushels per acre to a record 178.4 bushels. This eclipses the record set during the 2017/18 marketing year, which runs from September through August.Over the long term, corn yields trended upward with limited interruption until 2010/11 when a severe drought impacted much of the Southern and Central United States.The drought continued through 2012/13 when yields reached their lowest point since 1995/96 at 123.1 bushels per acre.Since then, yields per acre have recovered significantly and are now on track for three consecutive record years. While per acre yields have reached new heights, the number of acres of corn harvested has declined slightly over the same period. As a result, total U.S. corn production in 2018/19 is projected to be just the third highest on record.

Hotter climate means hungrier insects will munch millions more tons of crops - For every one degree Celsius (1.8F) rise in average temperatures, insects will consume an extra 2.5 percent of the world's rice, maize and wheat crops, researchers said. That means a 2-degree Celsius rise in surface temperature would see a total loss of 213 million tons of these staple crops - up from 166 million tons today - according to the study published in the journal Science. "Temperate regions are currently cooler than what's optimal for most insects. But if temperatures rise, these insect populations will grow faster,"   "They will also need to eat more, because rising temperatures also increase insect metabolism. Together, that's not good for crops," he said in a statement. Researchers said higher temperatures would see food prices rise, with the poor most affected. Globally, one in nine people already lack enough food, and the world's population is expected to reach 9.8 billion by 2050, the United Nations says. Most of the world relies on maize, rice or wheat, and demand for these crops is projected to increase by a third by 2050, according to the U.N. Food and Agriculture Organization. Using climate projection data, crop yield statistics and insect metabolic rates, the study concluded that Europe - the world's most productive wheat-growing region - could see up to 16 million tons of wheat lost to crop-chomping pests by 2050. The United States, the world's largest maize producer, is projected to see its maize-loss rise 40 percent - or by about 20 million tons each year. Insects are also predicted to eat about 27 million tons of rice annually in China, where a third of all rice is produced, the report said. "Under virtually all climate change scenarios, pest populations will be the winners, particularly in highly productive temperate regions, causing real food prices to rise and food-insecure families to suffer,"

Rising CO2 levels could push ‘hundreds of millions’ into malnutrition by 2050 --An additional 290 million people could face malnutrition by 2050 if little is done to stop the rise of greenhouse gas emissions, a study finds.The increased presence of CO2 in the atmosphere could cause staple crops to produce smaller amounts of nutrients such as zinc, iron and protein, the researchers say.Using international datasets of food consumption, the study estimates that these changes could cause an additional 175 million people to be zinc deficient and an additional 122 million people to be protein deficient by 2050.The findings show that malnutrition is most likely to affect parts of the world that are already grappling with food insecurity, such as India, parts of North Africa and the Middle East, the lead author tells Carbon Brief. Climate change is known to threaten food security by increasing the chances of extreme weather events such as heatwaves and drought – which can cause crop failures.However, climate change could also threaten food security by worsening malnutrition.Across the world, humans get the majority of the key nutrients they need from plants. Crops, including cereals, grains and beans, provide humans with 63% of their protein, which is needed to build new body tissue.Plants also provide humans with 81% of their iron, a nutrient that facilitates the flow of blood around the body, and 63% of their zinc, a nutrient that helps fight off disease. (Other sources of these nutrients include meat and dairy.) However, recent experiments show that, when food crops are exposed to high levels of CO2, they tend to produce lower amounts of these three key nutrients.

Botswana: 87 elephants killed near wildlife sanctuary - The carcasses of 87 elephants have been found near a wildlife sanctuary in Botswana, in what conservation group Elephants Without Borders called "the largest scale of elephant poaching to date". The remains were discovered during an aerial survey near a protected elephant sanctuary, the group said on Facebook. Talking to the BBC, Mike Chase of Elephants Without Borders said he was shocked by the discovery of the elephants, who had their tusks removed for their ivory. "When I compare this to figures and data from the Great Elephant Census, which I conducted in 2015, we are recording double the number of fresh poached elephants than anywhere else in Africa," Chase said.   According to the organisation's elephant census, Botswana hosts the biggest number of African savanna elephants with about 130,000 elephants, more than triple the size of Tanzania's elephant population and almost eight times that of South Africa."The poachers are now turning their guns to Botswana. We have the world's largest elephant population and it's open season for poachers," Chase added.Botswana's anti-poaching unit underwent budget cuts in May, shortly after newly elected President Mokgweetsi Masisi was sworn in.Its shoot to kill policy was dropped as members of the unit were disarmed.Since then, poachers have crossed into Botswana's territories more frequently, edging ever closer to its protected elephant sanctuaries.  According to the Great Elephant Census, the number of elephants decreased by 30 percent between 2007 and 2014, or about 144,000 animals.

China Wolfs Down Southeast Asia’s Wildlife - There is a monster chewing its way through the wildlife of its smaller, weaker Southeast Asian neighbors. The monster can change forms—like a shape-shifter—but it goes by one name: China. The region’s wildlife is rapidly disappearing, being sucked into the vortex of the illegal wildlife trade that leads to China.In the Burmese border town of Mong-La, everything from tree-dwelling civets to clouded leopards, from tiger claws to elephant skin, and from pangolin scales to bear gall bladder is on sale, with the vast majority of customers coming over the border from Yunnan. National Geographic just this month ran a stunning if disturbing article on the plight of the “dinosaur of the skies”—the majestic Helmeted Hornbill.The Hornbills’ numbers are crashing and in a few short years have been downgraded from Vulnerable to Critically Endangered by the IUCN. The Chinese are after their heads, literally. Their solid red casques are considered “red ivory” They are actually made of keratin, the same stuff as your fingernails and, incidentally, rhino horn, and rhinoceros are another species which have been virtually wiped off the face of the Southeast Asian map thanks to a misplaced belief that ground rhino horn can cure cancer and a host of other human ailments. So dire is the situation of the Helmeted Hornbill that governments in this species range (Indonesia, Malaysia, Brunei, Thailand, and Myanmar) have recently formed a joint management and conservation plan to attempt to ensure that this otherworldly bird has a future outside of China’s markets. Asia Sentinel also published a story specifically about the hornbill hunters of Sumatra last year, and how those hornbill heads are sold to Chinese middlemen in the city of Medan.  Mainland Chinese investors in Singapore and Chinese Singaporeans are buying—mostly illicitly—so much sand from Cambodia’s coastal Koh Kong province that irreparable environmental damage is now becoming manifest. A well-informed source told me that one sand barge was so enormous that it took eight tugboats to pull it to Singapore.  The removal of riverbed sand—which is prized construction material—annihilates the river’s ecology, decimating fish populations and the wildlife that depends on them, such as river dolphins, otters, and fishing cats. Chinese investors are also behind the recent clearing of mangrove forests in Koh Kong, another nefarious activity that will cause significant environmental degradation.

Zinke hires Endangered Species Act critic for senior post - Interior Secretary Ryan Zinke has hired an outspoken critic of the Endangered Species Act (ESA) for a senior position as the Trump administration undertakes a historic effort to ease industry compliance with the law. Robert Gordon — who recently penned a report alleging that the ESA has cost the country hundreds of billions of dollars — recently started work at the Interior Department as deputy assistant secretary for policy, management and budget, said Interior spokeswoman Faith Vander Voort. He works under Susan Combs, who is the acting assistant secretary for policy, management and budget, a position akin to a chief financial officer for the 70,000-person agency. “He has extensive experience working on natural resource issues in Congress and at national think tanks,” Vander Voort said in a statement. “Interior is proud to welcome top-tier talent. Rob Gordon brings impressive and diverse experience to the department, and we are excited to have him on our team.”Gordon has fought for decades while in positions both in an out of government to change the ESA. He most recently worked as an adjunct fellow at the conservative Competitive Enterprise Institute. Days before leaving for the government, he published a major report arguing that official estimates have dramatically underestimated the cost to industry and states for complying with the ESA, and that some single species can cost billions of dollars to protect. 

Why Florida’s red tide is killing fish, manatees, and turtles --  In July, a 26-foot whale shark was found dead on Sanibel Island, on Florida’s southwestern Gulf Coast, its body riddled with the neurotoxin produced by tiny algae in the sea.  Marine scientists don’t know for sure how it died, but they suspect the Karenia brevis algae — a single-celled organism that’s currently in a massive bloom cycle, called a red tide.The red tide has claimed many many victims this year on the southwestern Florida coast, which has become a rotting marine graveyard. A hundred manatees, a dozen dolphins,thousands of fish, 300 sea turtles, and more have died or washed along shores in putrid-smelling masses. They were all likely felled by the red tide.You can’t blame would-be Gulf bathers for avoiding the smell of rotting fish, or the risk of skin and eye irritation from swimming in red tide waters. The neurotoxin produced by the red tide can go airborne and cause issues in people with asthma or other respiratory issues. Even lifeguards on the hardest-hit stretches of shoreline are wearing gas masks.  The red tide isn’t showing many signs of letting up as it moves northward up the coast. In its most recent assessment, the Florida Fish and Wildlife Conservation Commission found it’s currently impacting 145 miles of coastline.  In a bloom, millions of these tiny organisms produce a paralyzing neurotoxin that prevents fish and marine life from respirating. It’s mildly dangerous for humans too: The toxin can go airborne and be dangerous for some people with respiratory sensitivities. And doctors aren’t sure what the long-term effects of breathing air with the toxin may be. It’s really dangerous to eat shellfish steeped in K. brevis. (Commercial shellfish operations strictly monitor for red tide, and recreational shellfish gathering is banned during red tide events.) Red tide isn’t the only harmful algal bloom occurring in Florida right now. There’s also a bloom of toxic blue-green algae in Florida’s fresh waterways, like Lake Okeechobee. Red tide is a separate phenomenon, caused by a different organism, but both sorts of algal blooms are often fueled by the same thing — agricultural runoff (i.e., fertilizer) and warm water.

Algae bloom in Lake Superior raises worries on climate change and tourism -  Lake Superior has been unusually balmy and cloudy this year, with thick mats of algae blanketing the shoreline. “I have never seen it that warm,”  Lake Superior, the largest of the Great Lakes with more than 2,700 miles of shoreline, is the latest body of water to come under increased scrutiny by scientists after the appearance this summer of the largest mass of green, oozing algae ever detected on the lake. From the Gulf Coast to the northernmost shores of the United States, scientists and government officials are working to decipher algae bloomsto help them interpret the causes of the blooms, changes to their climates, and the effects the blooms have on public health and regional environments. Scientists generally agree that algae blooms are getting worse and more widespread, and are exacerbated by the warmer water, heat waves and extreme weather associated with climate change. They are alsointensified by human activity, such as from farm and phosphorus runoff, leakage from sewer systems, and other pollution.The problems that algae blooms pose to fresh and marine waters have been propelled to the forefront in recent years by high-profile events like the shutdown of the water supply in Toledo, Ohio, in 2014 after toxic algae formed over the city’s water-intake pipe in Lake Erie, as well as the production of a toxin by a species of algae off the West Coast in 2015.More recently, in the waters off southwestern Florida, a toxic algal bloom known as a red tide persisted this year for more than nine months, the longest time period since 2006. The overgrowth killed wildlife and made some beaches noxious. Other areas, including the Finger Lakes in New York and Utah Lake south of Salt Lake City, have also experienced an unusually high number of blooms in recent years.

Trump administration re-opens Boundary Waters watershed to mining - Almost a quarter-million acres of Superior National Forest lands that drain toward the Boundary Waters Canoe Area Wilderness will soon be available for mine proposals again, after being protected for the past 18 months by an Obama decision. Sonny Perdue, Secretary of Agriculture, announced today he has withdrawn an application to remove the lands from mineral development for the next 20 years. The U.S. Department of Agriculture oversees the Forest Service, which manages the 1.1 million acre Boundary Waters wilderness and more than 2 million more acres that are part of the Superior National Forest. Late last year, the government renewed public mineral leases in the area for mining company Twin Metals, which the Obama administration had denied. Today’s decision halts what was supposed to be a two-year environmental review to determine if mining could be done safely in areas around the BWCAW. The USDA said that the 15 months of an abbreviated study it has already conducted were sufficient. “It’s our duty as responsible stewards of our environment to maintain and protect our natural resources. At the same time, we must put our national forests to work for the taxpayers to support local economies and create jobs,” Perdue said in a statement. “We can do these two things at once: protect the integrity of the watershed and contribute to economic growth and stronger communities.” The agency says mining companies will soon be able to apply for mineral leases in the wilderness watershed again. Unlike iron or taconite mining, copper-nickel mining can cause dangerous pollution that has contaminated waters around the world.

Over Half Of America Suffering Drought As Lake Powell, Lake Mead Drop To Dangerous Low Levels -- The worst drought in years in the western half of the United States has sparked hundreds of wildfires, has crippled thousands of farms, and has produced what could ultimately be the worst water crisis in modern American history.  As you will see below, Lake Powell and Lake Mead have both dropped to dangerously low levels, and officials are warning that we may soon be looking at a substantial shortfall which would require rationing.  Unfortunately, many in the eastern half of the country don’t even realize that this is happening.  The mighty Colorado River once seemed to be virtually invulnerable, but now it doesn’t even run all the way to the ocean any longer.  Demand for water is continually increasing as major cities in the Southwest continue to grow, and this is happening at a time when that entire region just keeps getting drier and drier.  To say that we are facing a “water crisis” would be a major understatement.  I have written quite a bit about the drought in the Southwest in recent months, and it just keeps getting worse.  According to Forbes, more than half the nation is now experiencing some level of drought…Drought conditions across the United States have worsened throughout the summer, culminating in more than half the country experiencing abnormally dry or drought conditions by the end of August.The latest update of the United States Drought Monitor shows that more than half of the country—nearly 56 percent—is abnormally dry or mired in a full-on drought. More than a third of the country is experiencing drought conditions, and almost eight percent is in an extreme or exceptional drought.Of course most Americans don’t really care as long as water keeps coming out of the taps.  And for the moment, nobody is going without water. But that could change if this drought continues to intensify.

New California Wildfire Closes Miles of Major Freeway - Another explosive wildfire ignited in California Wednesday, shutting down about 45 miles of the major highway Interstate 5 near the Oregon border, The Associated Press reported.The so-called Delta Fire grew to 15,294 acres, or 23.9 square miles, and suspended the Wednesday night Amtrak service between California and Oregon, USA Today reported.Fire officials told The Associated Press that the fire was started by humans, but they did not say if it was an accident or arson.That initial spark was then fueled by "mixed conifer and decadent brush with no recent fire history and heavy dead and down surface fuels," USA Today reported that InciWeb said.The fire broke out in Shasta County just six days after the deadly Carr Fire that ravaged the area was finally contained, USA Today reported. That fire killed eight people and destroyed more than 1,600 structures, devastating the town of Redding, California in July.The Delta fire is not currently burning close to any major settlements, Shasta-Trinity National Forest spokesperson Chris Losi told The Associated Press. But the fire did cause chaos on I-5, causing truckers to abandon 17 big-rigs. Lt. Cmdr. Kyle Foster of the California Highway Patrol's Mount Shasta office told the Los Angeles Times that four trucks lit on fire and that firefighters, forest workers and other truckers helped the affected drivers, according to The Associated Press. "There's vehicles scattered all over," Brandon Vaccaro with the California Department of Forestry and Fire Protection told the Redding Record Searchlight, as The Associated Press reported. "Whatever occurred here was probably pretty ugly for a while."

The land falls silent: Australian farmers battle life without rain  - Drought has dominated the media debate in Australia in the past month after the whole of New South Wales was drought declared. Further north though, a majority of Queensland has been in drought for up to seven years. Myriad charities have sprung up raising cash, fodder and services for farmers. Tradesmen are offering to fix sheds, knitting clubs are making little jackets for orphaned lambs, city residents are travelling inland to inject cash into small towns via a coffee and a pie.Debate over drought and climate change was only briefly eclipsed by the latest overthrow of an Australian prime minister as Malcolm Turnbull was deposed by members of his own Liberal party. He toppled the previous prime minister Tony Abbott in 2015, a few years after this latest drought began..  While most Australian farmers prepare for drought, the latest dry in the eastern states is lingering on and most have eaten through their reserves; of fodder, cash and patience. In a normal year, the Cameron family gets 19 inches of annual rainfall on Nive Downs, yet near the end of August they have only had six. Talk turns to what normal is. “The new norm seems to be drier and hotter over the years we have been here with our average summer temperatures,” Rachelle says. “I wouldn’t say [climate change] is not happening. It seems to be all or nothing in the country.”The Cameron’s have cut their breeder herd of Angus Charolais cross down from 1,300 to 900 and they are preparing for the possibility they will not get their usual summer rain. Again. They are also trying to increase cash flow by diversifying into production of Nive Beef jerky. It was an idea Doug hit on after a cattle price crash due to a temporary live export ban in 2011 which caused prices to plummet to $50 a head. He stopped at a roadhouse on the way back from the saleyards and saw a 25g packet of beef jerky for $5. “I thought I could sell 10 of those and it’s the same as the price for the whole cow,” says Doug. “It didn’t matter what I did to the cattle, we could have the best genetics, the best everything, but outside influences just crushed us.”

Most land-based ecosystems worldwide risk ‘major transformation’ due to climate change - Without dramatic reductions in greenhouse-gas emissions, most of the planet’s land-based ecosystems—from its forests and grasslands to the deserts and tundra—are at high risk of “major transformation” due to climate change, according to a new study from an international research team.  The researchers used fossil records of global vegetation change that occurred during a period of post-glacial warming to project the magnitude of ecosystem transformations likely in the future under various greenhouse gas emissions scenarios. They found that under a “business as usual” emissions scenario, in which little is done to rein in heat-trapping greenhouse-gas emissions, vegetation changes across the planet’s wild landscapes will likely be more far-reaching and disruptive than earlier studies suggested.  The changes would threaten global biodiversity and derail vital services that nature provides to humanity, such as water security, carbon storage and recreation, according to study co-author Jonathan Overpeck, dean of the School for Environment and Sustainability at the University of Michigan.  “If we allow climate change to go unchecked, the vegetation of this planet is going to look completely different than it does today, and that means a huge risk to the diversity of the planet,” said Overpeck, who conceived the idea for the study with corresponding author Stephen T. Jackson of the U.S. Geological Survey.

   September Heatwave Is Closing Northeast Schools - Schools across the northeastern U.S. are cutting the school days short this week as extreme heat and a lack of air conditioning combine to make dangerous conditions inside classrooms.Numerous districts in Connecticut and New Jersey, at least two districts in New York state, and one in the Washington, DC metro area sent kids home early at least one day this week, while schools in Ohio and Massachusetts also closed early due to heat.Some public schools in Baltimore, where more than 60 buildings have "inadequate cooling" or no air conditioning at all, shuttered altogether earlier in the week. "Teachers across the region described buildings with internal temperatures over 100 degrees, listless students, and flagging attention in the classroom," the New York Times reported. For more: New York Times, Baltimore Sun, CBSNewYork, ThinkProgress, Washington Post,

Most weather signs are pointing to an El Nino weather pattern this fall and winter - With all signs highlighting a switch, from the La Nina to the forecast El Nino (formally called El Nino Southern Oscillation or ENSO) climate pattern for this fall 2018, and winter too, meteorologists and climatologists expect to have a better idea of how strong this El Nino event will become by late October into November.  "Looking at the latest 30-day and 90-day maps generated (for this Autumn 2018 which the Climate Prediction Center issued Aug. 16, 2018) it appears we're witnessing the incorporation of an El Nino event into the outlooks," said Allen Dutcher, associate state climatologist, Nebraska State Climate Office-Lincoln. "During the past four weeks, there's been a subtle shift toward a wetter pattern across the southern Plains, while the northern Plains has slipped towards the dry side."  "If typical El Nino conditions develop in earnest this fall, I'd expect the southern Plains, the southeast, and eastern seaboard to tilt toward the wet side, especially during the second half of the three-month forecast period," Dutcher said. He noted the dryness in the Pacific Northwest is already spreading across the northern Plains, which typically experiences warmer and drier weather during these events. "The general concept of El Nino's influence on the continental U.S. has its strongest impact during the winter, but those influences can extend to the fall and spring period depending on the strength and longevity of the event," Dutcher said. Current projections are for a weak event, possibly making it to the threshold of a moderate event. "We typically see a relaxation of the northern jet, while the southern jet becomes stronger."The official CPC statement:"During the autumn and winter 2018-19, the temperature and precipitation outlooks are consistent with the elevated probability of El Nino development and its impacts. Temperature outlooks for winter 2018-2019 were modified over parts of the central Plains and southwest regions to represent (moderation of probabilities for above normal temperatures by a potential shift of the jet stream and storm tracks southward, due to the impacts of a potential El Nino. areas of probably above-normal precipitation in late winter 2018-2019 and early spring 2019 outlooks were expanded westward into southren California, representing impacts of the potential shift in the storm track due to El Nino,"

Global warming is intensifying El Niño weather -- Perhaps the most important natural fluctuation in the Earth’s climate is the El Niño process. El Niño refers to a short-term period of warm ocean surface temperatures in the tropical Pacific, basically stretching from South America towards Australia. When an El Niño happens, that region is warmer than usual. If the counterpart La Niña occurs, the region is colder than usual. Often times, neither an El Niño or La Niña is present and the waters are a normal temperature. This would be called a “neutral” state. The ocean waters switch back and forth between El Niño and La Niña every few years. Not regularly, like a pendulum, but there is a pattern of oscillation. And regardless of which part of the cycle we are in (El Niño or La Niña), there are consequences for weather around the world. For instance, during an El Niño, we typically see cooler and wetter weather in the southern United States while it is hotter and drier in South America and Australia. It’s really important to be able to predict El Niño/La Niña cycles in advance. It’s also important to be able to understand how these cycles will change in a warming planet. Fortunately, a study just published in Geophysical Research Letters helps answer that question. The authors include Dr. John Fasullo from the National Center for Atmospheric Research and his colleagues. To see if something new was happening, the authors of this paper looked at the relationship between regional climate and the El Niño/La Niña status in climate model simulations of the past and future. They found an intensification of El Niño/La Niña impacts in a warmer climate, especially for land regions in North America and Australia. Changes between El Niño/La Niña in other areas, like South America, were less clear. The intensification of weather was more prevalent over land regions.  So, what does this mean? It means if you live in an area that is affected by an El Niño or La Niña, the effect is likely becoming magnified by climate change. For instance, consider California. There, El Niño brings cool temperatures with rains; La Niña brings heat and dry weather. Future El Niños will make flooding more likely while future La Niñas will bring more drought and intensified wildfire seasons.

Reduced Arctic Sea Ice May Be Suppressing July Tornadoes - A notable drop since the 1990s in the number of July days with significant U.S. tornadoes may be related to the dramatic loss of midsummer Arctic sea ice, according to a study published this month in the open-access journal npj Climate and Atmospheric Science. The new work may help explain a more general drop in U.S. tornado days, part of a recent clustering of tornado activity into highly active periods interspersed with distinct quiet spells.The new study, by Robert Trapp (University of Illinois) and Kimberly Hoogewind (Purdue University), is the first to delve into potential connections between tornado activity and Arctic sea ice. The two phenomena appear to be more closely correlated in July than in other months, noted the authors, who provide several possible reasons for the connection and its timing.  July does not tend to produce the most severe U.S. tornado outbreaks, but on average, July contributes more tornadoes rated at least EF1 to the annual total than April does (12.7% vs. 11.4%), and it produces many weaker tornadoes (EF0). “The month of July is in fact a significant contributor to the annual tornado occurrence, especially given that low-end (F/EF0-1) tornadoes comprise the majority of the U.S. tornado population,” note the authors. On July 19, 2018, Iowa experienced 21 tornadoes, including two rated EF3; one caused 13 injuries near Pella, while the other tore through the heart of Marshalltown, injuring 22 people and causing more than $200 million in damage. The average number of U.S. days with at least one EF1-or-stronger tornado has dropped more dramatically in July than in any other month, decreasing from 11 to 20 tornado days per July in the 1990s to 6-13 tornado days per July in the early 2010s. Beyond the end of the study period (2015), there were 13 tornado days each in July 2016 and 2017, according to Patrick Marsh (NOAA/NWS Storm Prediction Center); the numbers for July 2018 are still being finalized, said Marsh.

Typhoon Jebi: Nine dead as strongest storm in 25 years hits Japan - At least nine people have been reported dead and more than 300 injured as Typhoon Jebi - the strongest in 25 years - pummelled Japan. The reports on Tuesday came after the Japanese government issued evacuation advisories for more than a million people following the storm's landfall on Shikoku, the smallest main island. Jebi - whose name means "swallow" in Korean - raked across the western part of the largest main island, Honshu, near the city of Kobe, several hours later, heading rapidly north. NHK, the national public broadcaster, reported that one of the nine fatalities was a 71-year-old man, who died in western Shiga prefecture after being trapped under a warehouse that collapsed in the strong winds. Jebi is considered a category-3 typhoon, out of five, on the Saffir-Simpson scale. According to Kyodo News, it was the strongest typhoon to make landfall in Japan since 1993. Tides in some areas were the highest since a typhoon in 1961, NHK said, with storm surge covering the runways at Kansai International Airport in Osaka. NHK also reported that an estimated 3,000 passengers are stranded at the Kansai airport, as airline companies cancelled hundreds of flights. Several hundred airport workers were also stranded. 

Japan Paralyzed After Strongest Typhoon In 25 Years Makes Landfall, Killing 8 - Typhoon Jebi struck the heart of one of Japan's largest metro areas on Tuesday, killing at least eight people and shutting down Osaka's main international airport indefinitely, leaving close to 3,000 people trapped inside. The storm - the strongest on earth so far in 2018 - made landfall on Tuesday, bringing widespread flooding and winds of up to 130 miles an hour; it paralyzed swaths of the country shuttering shops, factories and amusement parks.  The storm was the strongest to make a direct hit on the nation's main islands in 25 years, causing high tides that flooded Kansai International Airport, a key gateway for flights from China and other Asian countries that was built on an artificial island in 1994.The typhoon prompted government evacuation orders for more than 49,000 people across southern Japan, with an additional 2 million people advised to flee, the Fire and Disaster Management Agency said. Early in the afternoon on Tuesday, an oil tanker unmoored by the storm crashed into the only bridge that connects Kansai International Airport in Osaka Bay to the mainland. The Coast Guard was using a helicopter and patrol boats to rescue crew members, the public broadcaster NHK said. The storm traversed Japan’s main island of Honshu before traveling up its western coast, leaving a trail of death. Among the fatalities was the owner of a warehouse that collapsed on him, news reports said.  At least 700 flights have been canceled across Japan. Kansai Airport will not reopen on Wednesday. The local police said that travelers stranded at the airport, which sits on a man-made island, had been issued emergency water, bread and blankets, and that ferries were expected to start bringing people to safety Wednesday morning.  Kansai is the nation's third largest airport, after Narita, outside of Tokyo in Chiba Prefecture, and Haneda, near central Tokyo. In 2017, it handled 28 million passengers, three quarters of them from overseas.  One of the airport's two runways and the ground floor of a terminal building, used for sorting luggage and other activities, were under dozens of centimeters of water.  The airport's ground vehicles were partly submerged by the deluge, and an access bridge that connects the airfield was damaged by a 2,591-ton tanker that the storm unmoored and cast adrift. Public broadcaster NHK aired footage showing a huge crater in the bridge. The tanker had 11 crew aboard, and a helicopter rescue operation was underway.

Major Earthquake Strikes Japan in Latest String of Natural Disasters - A powerful earthquake rocked Hokkaido, Japan in the early hours on Thursday, triggering landslides, destroying roads and buildings and left the northern island's 5.3 million residents without power. The 6.7-magnitude quake struck at 3:09 a.m. local time at a depth of 40 kilometers (24 miles), according to the Associated Press. Meteorological agency officials told the public broadcaster NHK that the earthquake reached the maximum level on Japan's seismic intensity scale."We punched in seismic data from new locations to analyze today's earthquake. In the town of Atsuma, the earthquake measured 7 on the Japanese seismic intensity scale," Toshiyuki Matsumori of the Japan Meteorological Agency said.  Five people are confirmed dead and another four people do not have vital signs. About 300 are injured and about 30 more are missing, NHK reported.Video footage of the temblor's destructiveness shows collapsed buildings, buckled roads, landslides that exposed entire hillsides in the hard-hit town of Atsuma and vehicles submerged in mud. The quake also grounded flights and halted train and bus services.Power has been restored for about 330,000 buildings but Economy, Trade and Industry Minister Hiroshige Seko told NHK, "It will take more than a week to fully restore the power supply in Hokkaido."The earthquake comes just days after Typhoon Jebi, the strongest typhoon in 25 years, hit Japan on Tuesday that caused widespread flooding, pushed an oil tanker into a major bridge, forced Kansai International Airport to close and stranding 3,000 travelers and killed at least 11 people, according to NHK. The country also suffered from a summer of record-breaking heat that sent 70,000 people to hospitals and left 80 people dead, and historic flooding and mudslides that killed hundreds of people.

The Whole System Is Rigged  - Chris Martenson: As the dog days of summer wind down, it’s hard not to notice how the climate is suffering brutally right now across many areas of the globe. Crop failures have hit hard across Europe. Australia is under an intense drought. Warm water representing ‘archived heat’ has penetrated deep into the arctic.  Coral reefs are dying through mass bleachings. The stocks of ocean fisheries are in deep trouble. Insect and bird populations remain in a state of collapse. It couldn't be any more clear that our society's demands for ever-more "growth" are taking an increasingly dangerous toll. "Growth" is now the enemy of life on the planet; yet there are precious few leaders willing to admit as much.  What we need is less pressure on vital ecological systems and precious remaining resources. But good luck finding a politician willing to admit that.  Most politicians appear to think that there are no big issues out there ecologically-speaking. Of course, very few of them spend any time outside or understand where their food even comes from. Most subsist on the blind faith that our planet will somehow always bounce back from the abuses we inflict on it, despite reams of mounting evidence that it's hitting a mulitplying number of breaking and tipping points. Sadly, the mainstream media chooses to toss wedge issue after wedge issue, ususally in the most inflammatory ways it can, at an increasingly irate general populace that has almost zero clue about the true source of the shocks (financial, economic, and ecological) they are experiencing. This prevents society from having an informed discussion about the real risks we should be concerned with. As heart-tugging a topic as 'border kids' might be, the monster asset price bubbles blown by the central banks get almost no attention in the media -- despite their ability to destroy the futures and dreams of pretty much everyone reading this article. Our media is failing us, badly, by focusing on symptomatic issues that enrage and divide us, while remaining silent on the causal matters of vital importance to all of us. 

Miami Will Be Underwater Soon - Its Drinking Water Could Go First - “We have a very delicate balance in a highly managed system,” Douglas Yoder, deputy director of the county’s water and sewer department, said.  “That balance is very likely to get upset by sea-level rise.” What nobody knows is when that will happen, or what happens next.  From ground level, greater Miami looks like any American megacity. But from above, the proportions of water and land are reversed. The glimmering metropolis between Biscayne Bay and the Everglades reveals itself to be a thin lattice of earth and concrete laid across a puddle that never stops forming. Water seeps up through the gravel under construction sites, nibbles at the edges of fresh subdivisions, and shimmers through the cracks and in-between places of the city above it.  Miami-Dade is built on the Biscayne Aquifer, 4,000 square miles of unusually shallow and porous limestone whose tiny air pockets are filled with rainwater and rivers running from the swamp to the ocean. The aquifer and the infrastructure that draws from it, cleans its water, and keeps it from overrunning the city combine to form a giant but fragile machine. Without this abundant source of fresh water, made cheap by its proximity to the surface, this hot, remote city could become uninhabitable.  Barring a stupendous reversal in greenhouse gas emissions, the rising Atlantic will cover much of Miami by the end of this century. The economic effects will be devastating: Zillow Inc. estimates that six feet of sea-level rise would put a quarter of Miami’s homes underwater, rendering $200 billion of real estate worthless.  The permeability that makes the aquifer so easily accessible also makes it vulnerable. “It’s very easy to contaminate our aquifer,” says Rachel Silverstein, executive director of Miami Waterkeeper, a local environmental protection group. And the consequences could be sweeping. “Drinking water supply is always an existential question.”   The questions hanging over Miami and the rest of Southeast Florida are how long it can keep its water safe, and at what cost. As the region struggles with more visible climate problems, including increasingly frequent flooding and this summer’s toxic algae blooms, the risks to the aquifer grow, and they’re all the more insidious for being out of sight. If Miami-Dade can’t protect its water supply, whether it can handle the other manifestations of climate change won’t matter.

NASA Discovers Bubbling Lakes in Remote Arctic - A Sign Of Global Warming (see video) NASA has released videos of bubbling lakes in the remote Arctic tundra, where warming continues to release greenhouse gases into the atmosphere at unprecedented rates.  The international research team, funded by NASA as part of their Arctic-Boreal Vulnerability Experiment (ABoVE), recently published their results in Nature Communications. What they found are bubbling lakes as greenhouse gases are released from the previously frozen ground, leading to increased greenhouse gas emissions and a warming positive feedback.  The Arctic is one of the largest natural reservoirs of organic carbon, trapped within the frozen soils. If a tree dies, say in the Amazon rainforest, it is quickly eaten (rot) away by bacteria, which respire the same as humans. As bacteria eat the tree they inhale oxygen and release carbon dioxide. Hence, the carbon taken up by the tree through photosynthesis is then released back into the atmosphere as carbon dioxide for the cycle to start all over again.However, in the case of the Arctic, when something dies (trees, algae, animals, etc.) they are immediately frozen. This, in essence, stops the carbon cycle as both bacteria and their food are frozen in place for potentially tens of thousands of years. This means the Arctic continues to pack away carbon from the atmosphere and store it in frozen soil, which can be over 250 feet thick. However, when that soil begins to thaw, the bacteria wake up and find a feast of untouched carbon laid out for them, they begin to eat the carbon, releasing carbon dioxide and methane gas as they do. In the NASA video what you see is the resulting carbon dioxide and methane gases released from the thawing of Arctic lake beds. As the sediment beneath these lakes begins to melt, they become greenhouse gas factories.

Governments 'not on track' to cap temperatures at below 2 degrees: U.N. (Reuters) - Governments are not on track to meet a goal of the 2015 Paris agreement of capping temperatures well below 2 degrees Celsius (3.6 degrees Fahrenheit) before the end of the century, a United Nations official said on Sunday ahead of climate-change talks in Bangkok this week. Patricia Espinosa, head of the Executive Secretary of the U.N. Framework Convention on Climate Change (UNFCCC), which steers the climate talks, said both the public and private sector need to act with urgency to avoid “catastrophic effects”. The Paris climate agreement, adopted by almost 200 nations in 2015, set a goal of limiting warming to “well below” a rise of 2 degrees C above pre-industrial times while “pursuing efforts” for the tougher goal of 1.5 degrees C. “1.5 is the goal that is needed for many islands and many countries that are particularly vulnerable to avoid catastrophic effects. In many cases it means the survival of those countries. With the pledges we have on the table now we are not on track to achieve those goals,” Espinosa told Reuters in a telephone interview on Sunday in Bangkok. A Europe-wide heat wave this summer and bush fires in Australia, among other things, should give new impetus to the talks, said Espinosa.  The Bangkok talks come ahead of a December meeting in Katowice, Poland, where government ministers will meet to agree rules for the 2015 Paris climate accord. That accord set a sweeping goal of ending the fossil fuel era this century, but the text was vague on details. Espinosa said she hopes that a draft text for negotiation on the “rule book” of the 2015 agreement will emerge at the end of the week-long Bangkok talks. 

Where is the promised money? developing countries ask at climate talks in Bangkok - (Thomson Reuters Foundation) - Developed countries are dragging their feet on meeting their pledges of billions of dollars to help developing nations tackle climate change, leaving poor nations with mounting costs from rising temperatures, rights groups said. Rich governments have promised to mobilise $100 billion per year in climate finance by 2020 to help poorer nations make the transformation to clean energy and cope with the impact of higher temperatures. But there is no clear pathway to reach that goal, and poor countries are struggling to cope with losses from floods and drought, campaigners said ahead of a meeting in Bangkok to produce a negotiating draft for the next United Nations climate conference. “Rich nations are attempting to escape full accountability for their role in causing and exacerbating climate change, and their obligation to deliver climate finance,” said Lidy Nacpil of the Asian Peoples Movement on Debt and Development. “Inadequate climate finance compromises the capacity of the developing world to survive the climate crisis,” she said. Many of the programmes developing countries have promised as part of their efforts to curb climate-related risks and turn to green energy depend on adequate international climate finance. Negotiators are meeting in Bangkok this week to prepare for the UN climate conference in Poland at the end of the year, which aims to set rules for implementing the 2015 Paris climate accord on reducing greenhouse emissions. Record heatwaves, wildfires and devastating floods across the world this summer will put pressure on almost 200 governments to reach a deal in Poland, said Patricia Espinosa, executive secretary, UN Climate Change. “Every year, the impacts of climate change are getting worse. This means that the poorest and most vulnerable, who have contributed almost nothing to the problem, suffer more,” she told the Thomson Reuters Foundation.  Espinosa said that broader funding - beyond money channeled through specific climate funds - will be needed to adequately address the needs to reduce emissions and cut risks. Experts say insufficient cash and board disagreements over key decisions are hampering the flagship Green Climate Fund (GCF) that was established at U.N. climate talks in 2010 to channel a substantial portion of the $100 billion per year wealthy nations had pledged.

The Upside Of 'Global Warming' - An interview from the Russian Ministry for Maritime and River Transport published on website PortNews says that Arctic ports along the Northern Sea Route are experiencing a surge in cargo. Up to August 24th of this year, 9.95 million tons of goods went through ports in the region, an 81 percent increase on last year's 5.5 million.As Statista's Niall McCarthy notes, even though the passage is only feasible for three months of the year, global warming is making it increasingly viable for major shipping companies. This year, temperatures in the Arctic Circle have been unusually warm, topping 30C on several occasions.That resulted in Maersk confirming that it was sending a ship with a 3,600 container capacity, the Venta Mersk, over the top of Russia on a test run. The decision has been welcomed in Russia where it's hoped the Arctic route will compete with the southern route through the Suez Canal and Straits of Malacca. The Northern Sea Route runs from Murmansk near Russia's border with Norway all the way to the Bering Strait in Alaska with all transiting ships requiring a permit from the Russian authorities.Even though travel-time can be reduced by two weeks compared to the southern route, costs are generally higher because vessels have to be accompanied by a nuclear-powered icebreaker.The Venta Maersk left Vladivostock before docking in Pusan, South Korea.  It embarked on its long journeythrough the Arctic and its expected to pass through the Bering Strait at the start of September before finishing the trip in St. Petersburg at the end of the month. The following infographic shows how a general container-ship would travel between Europe and East Asia, using Hamburg and Shanghai as example ports.

California Puts Customers on Hook for Utility’s Wildfire Liability - A last-minute measure by California lawmakers to rescue the state’s largest utility from a potential bankruptcy sets up a contentious process whereby its customers could foot the bill for billions in liability costs it faces following the state’s catastrophic 2017 wildfires. The bill passed Friday night in the final hours of California’s legislative session would give PG&E Corp.a path to pass on to ratepayers legal damages and other costs stemming from fires that swept California’s wine country in October. The blazes killed more than 40 people and destroyed or damaged about 21,000 homes and 2,800 businesses.Democratic California Gov. Jerry Brown is expected to sign the measure, addressing a broad array of wildfire-related issues, into law. But that is unlikely to end controversy over how much PG&E customers should pay for what critics call the utility’s failure to invest in maintenance and safety measures in a state prone to severe fire risk.State investigators have so far concluded that equipment from PG&E’s Pacific Gas & Electric Co. unit caused 16 of last year’s blazes, and the utility has said it expects to incur losses related to at least 14 of them. PG&E faces at least 780 civil lawsuits brought by individuals, municipalities and insurance companies alleging it was negligent and seeking to recoup money for fire-related damage and deaths.   PG&E provides electricity and natural gas to about 16 million people living in Central and Northern California.  . Some analysts have pegged PG&E’s potential liability from the 2017 fires at as much as $15 billion. The utility currently has less than $900 million in insurance to help pay for wildfire liability.  S&P Global Ratings has said continued liability concerns related to the wildfires could push PG&E and its peers in California below investment grade. The provisions lawmakers approved Friday would “meaningfully alleviate the potential risk of bankruptcy or utility instability arising from exposure to both future and some past wildfires,”

California's response to record wildfires: shift to 100% clean energy -- In America today, it’s rare to see political leaders respond to a threat with an appropriate evidence-based policy solution. At the national level, more often we see actions that aggravate existing problems or create new ones. California – the country’s most populous and economically powerful state – has been a welcome exception. California has been battered by extreme weather intensified by climate change. From 2012 to 2016 the state was scorched by its worst drought in over a millennium. Weather whiplash struck in 2017, when much of the state broke precipitation records. This combination led to devastating mudslides and created the conditions for the most destructive and costly wildfire season on record in 2017, followed by the state’s largest-ever wildfire in 2018, which broke the previous record (set in 2017) by more than 60%. All of these impacts have been exacerbated by global warming. The past five years have been California’s five hottest on record. And so, the state’s leaders decided to do something about it. California had already set a renewable portfolio standard in 2002, strengthened by Governor Arnold Schwarzenegger’s 2008 executive order requiring that 33% of electricity be generated by renewable sources by 2020. Governor Jerry Brown signed Senate Bill (SB) 350 in 2015, expanding the requirement to 50% renewables by 2030.  Last week, California state lawmakers passed State Senator (and candidate for US Senate) Kevin de León’s SB 100, which amps up the target to 50% renewables by 2026, 60% by 2030, and 100% from “renewable energy resources and zero-carbon resources” by 2045. The more aggressive clean energy targets are justified. Not only does California need to make up some of the climate slack created by the Trump administration, but the state is now ahead of its targets, with 29% of electricity last year generated from renewables and over 50% from zero-carbon sources (including nuclear and hydroelectric power).

California’s climate moon shot  -- California may be done waiting for everyone else to get their act together on climate change.Earlier this week, by a vote of 44 to 33, the state Assembly passed a bill that would require California to get 100 percent of its electricity from renewables by 2045. An equivalent measure already passed the state Senate. A whopping 72 percent of Californians support the measure. All that's left is for Gov. Jerry Brown (D) to sign the bill. And he's expected to do so. You only have to look at the news to see why. The biggest wildfire in state history has been burning for over a month, scorching some 400,000 acres, killing one firefighter, and clogging cities and towns with smoke. Meanwhile, sea level rise threatens the state's prosperous coastal communities even as skyrocketing temperatures dry up farmland in the Central Valley. So assuming Brown signs the bill, can California actually pull it off?  "From a technological, economic point of view it's possible to do it," Mark Jacobson, a professor of civil and environmental engineering at Stanford University, told Scientific American last year. Jacobson is one of the lead authors of a 2014 paper that laid out an entire roadmap for how California could do just this.The first step is building the power generation. Jacobson's roadmap envisions 1,200 new solar plants, 25,000 wind turbines, plus a smattering of geothermal, tidal, and wave energy generators.The next step is to ensure this power supply is steady and reliable. California's average electricity demand fluctuates between 20,000 and 35,000 megawatts, but it can jump as high as 50,000 megawatts. Right now, traditional fossil fuel plants can be turned on and off to respond — particularly natural gas "peakers" in California. But renewables generate power on their own schedule; whenever the sun is shining, the wind is blowing, and the tides are moving. Thus, California would need to increase its energy storage capacity — i.e. batteries — around 200 fold. It would also have to repair and update its power grid, so it can move power that's either stored or generated in one place to where it needs to go. Needless to say, such a massive infrastructure effort will cost a pretty penny. Under the 2045 mandate, the costs of all those solar plants and wind turbines and batteries and grid updates will fall on utility companies. They, in turn, will pass the costs onto consumers as much as they're able.

California's Car Emissions Rise as Trump's Auto Standards Plan Looms - A new report shows California is failing to cut greenhouse gas pollution from automobiles just as the Trump administration is poised to revoke the state’s right to regulate its tailpipes in pursuit of a single, national standard.Climate pollution from transportation hasn’t slowed since 2012 and now represents more than 40 percent of the state’s total, according to an annual assessment from Next 10, a San Francisco based non-profit. The figure represents a “worrisome trend” in a state that has achieved its overall 2020 climate change goal -- to push annual emissions below 1990 levels -- four years early.The report could become part of an expected confrontation between the state and White House. The Environmental Protection Agency and theNational Highway Traffic Safety Administration proposed earlier this month new auto efficiency regulations, including a provision that would revoke California’s ability to issue tailpipe limits that are tougher than federal ones.A combination of factors keeps pushing transportation emissions higher, according to Next 10’s 10th annual California Green Innovation Index. Californians have shown an increasing aversion to use public transit. Difficulty finding affordable housing near work means people have to drive more to their jobs. Lower gasoline prices are always greeted warmly -- but attract drivers to pick-ups and sport utility vehicles from more fuel-efficient smaller cars.Emissions from cars and other light-duty vehicles in 2016 hovered near the 2008 level of 118 million metric tons of carbon dioxide or its equivalent. Truck emissions continued to decline at a rate insufficient to make up for the added tailpipe pollution.

Toyota is recalling 1 million hybrids at risk of catching fire - Toyota is recalling more than 1 million of its hybrid vehicles worldwide over a potential fire risk. The automaker said Wednesday that the safety recall covers its Prius, Prius plug-in hybrid and C-HR SUV models and is intended to repair a problem with their electrical systems, which in some cases can cause fires. More than half of the affected vehicles are in Japan, while just under 200,000 are in the United States. The rest were sold in Europe and other markets. US drivers will start receiving recall notices by mail this month. Toyota (TM) said the problem involved wire harnesses that connect to the cars' power control units. These can wear away over time, generating heat. "If sufficient heat is generated, there is an increased risk of a vehicle fire," a Toyota spokesman in Tokyo told CNN on Wednesday. He declined to comment on whether the defects have resulted in any injuries or deaths.

You've heard of outsourced jobs, but outsourced pollution? It’s real, and tough to tally up-  Over the past decade, both the United States and Europe have made major strides in reducing their greenhouse gas emissions at home. That trend is often held up as a sign of progress in the fight against climate change.But those efforts look a lot less impressive once you take trade into account. Many wealthy countries have effectively “outsourced” a big chunk of their carbon pollution overseas, by importing more steel, cement and other goods from factories in China and other places, rather than producing it domestically.  Britain, for instance, slashed domestic emissions within its own borders by one-third between 1990 and 2015. But it has done so as energy-intensive industries have migrated abroad. If you included all the global emissions produced in the course of making things like the imported steel used in London’s skyscrapers and cars, then Britain’s total carbon footprint has actually increased slightly over that time.“ Dr. Hasanbeigi is an author of a new report on the global carbon trade, which estimates that 25 percent of the world’s total emissions are now being outsourced in this manner. The report calls this a “carbon loophole,” since countries rarely scrutinize the carbon footprint of the goods they import. But dealing with imported emissions remains a thorny problem. The new report, which analyzes global trade from 15,000 different sectors — from toys and office equipment to glass and aluminum — builds onprevious academic research to provide one of the most detailed pictures yet of the global carbon trade.  Not surprisingly, China, which has become the world’s largest emitter of carbon dioxide, remains the world’s factory. About 13 percent of China’s emissions in 2015 came from making stuff for other countries. In India, another fast-growing emitter, the figure is 20 percent.  The United States, for its part, remains the world’s leading importer of what the researchers call “embodied carbon.” If the United States were held responsible for all the pollution worldwide that resulted from manufacturing the cars, clothing and other goods that Americans use, the nation’s carbon dioxide emissions would be 14 percent bigger than its domestic-only numbers suggest.

Duke Energy plans to close all of its NC coal plants - Duke Energy plans to close its seven North Carolina coal plants during the next 30 years, according to filings this week with state regulators. “As we lower our carbon footprint, Duke Energy is increasingly moving away from coal-fired generation and we are not including the addition of coal-fired generation going forward,” said Meredith Archie, spokeswoman for Duke. “This is not a Duke Energy phenomenon,” said David Doctor of E4 Carolinas, an association for Carolinas energy sector members. “This is a national phenomenon.” It is opportune for utilities to retire their coal plants because of environmental reasons and because the demand for power overall is not growing, he said. Utilities can retire coal plants and then add solar, wind and waste energy or natural gas plants to their systems, putting new capital on their books that will help them maintain their earnings, Doctor said.

McIntyre: FERC not working with Trump White House on coal, nuke bailout - Staff of the Federal Energy Regulatory Commission (FERC) has not communicated with the White House over a proposal to bail out coal and nuclear generators, the chairman of FERC said in a letter to Congressional Democrats released Thursday.  FERC staff "has not discussed the merits of any 'grid resilience' proposal that would seek to prefer one form of generation over another with executive branch officials," Chairman Kevin McIntyre wrote. The staff, however, routinely communicates with the Department of Energy on "a host of matters of shared responsibility including intelligence, personnel and legal process."The assurance came in response to an August letter raising concern about the about comments made by FERC Chief of Staff Anthony Pugliese, who told a nuclear energy conference the agency was communicating with the White House on a support plan for the plants. McIntyre wrote that he authorized Pugliese to speak at the conference, but one former FERC staffer implied that the chief of staff to step down over the comments.  McIntyre's letter seeks to assuage growing concerns in Washington that FERC — an independent federal agency — may be falling under the political influence of the Trump administration. Last month, Sen. Maria Cantwell, D-Wash., and Rep. Frank Pallone, D-N.J., sent a letter to McIntyre saying that Pugliese's comments "call into question the impartiality and independence of the Commission."  The letter referenced comments by Pugliese at a meeting of the American Nuclear Society, where he said FERC is helping identify coal and nuclear plants essential to the grid — the first step in a bailout plan leaked from the administration this spring.  Commissioner Richard Glick told Utility Dive last month that FERC regulators outside McIntyre's office had no knowledge of the comments or communications with the White House. Soon after the comments were first reported by E&E News, FERC released a statement saying that Pugliese was "simply stating that the federal government is working to ensure that important critical infrastructure, like hospitals, remains operational."  McIntyre's response, released by the Democrats Thursday afternoon, reiterates that message. The chief of staff, like any any other FERC employee, is not authorized to speak on issues pending before the commission, he wrote.

Coal ships line up off the Queensland coast as Aurizon dispute with miners worsens - More than 50 coal ships are waiting off the Queensland coast this week as the multibillion-dollar dispute between listed rail company Aurizon and Australia’s biggest coal producers looks set to spill over into next year. The long-running dispute over how much Aurizon can charge its customers has concerned key markets of Queensland’s coal, including Japanese steel makers, and has threatened the state’s reputation as a key exporter. The QCA was due to hand down its final decision this month on the access undertaking, which Aurizon has warned will result in 20 million tonnes less coal being exported from the state’s coal network each year. But with Aurizon’s application for a judicial review of the draft decision due in October, the QCA has decided to err on the side of caution and will hold fire on the final determination.

Coal shows resilience in global comeback -  Coal is clinging to the top spot in power generation, accounting for as much of the world’s electricity as it did two decades ago, despite heightened concerns about climate change and a slowdown in financing for projects involving the dirtiest of fossil fuels. U.S. exports of coal more than doubled in 2017 and are set to grow this year, according to the Energy Information Administration. Countries across Asia and Africa are expected to increase their use of coal for expanding power generation through 2040, says the EIA. The rebound shows coal’s resilience, especially in emerging regions, and recent events suggest the market for black combustible rock will remain strong. In the U.S., the Trump administration has proposed to reverse U.S. rules on coal emissions, and countries including India and Vietnam are planning major coal projects. Coal accounted for 38% of the world’s electric power generation in 2017, putting it at the same level as in 1998, according to a recent report by BP PLC.   Meanwhile, global carbon emissions from coal and other fossil fuels increased by 1.4% in 2017 after three flat years. The rise is attributed to economic growth and increasing energy demand in Asia, according to the IEA. Emissions are linked to rising global temperatures and more extreme weather patterns, experts say, and coal is a leading contributor to human health problems. The World Bank stopped financing coal in 2010 because of the hydrocarbon’s link to global warming, and many international banks are turning away from fossil fuel projects. Last year, Deutsche Bank said it wouldn’t grant financing for new coal mining or coal-powered projects. In July, Lloyds Banking Group said it would stop extending loans for new coal ventures.Still, coal plants are attractive because they are less expensive to build than renewable energy facilities. The cost of constructing a renewables plant is roughly double the outlay of a fossil-fuel facility, experts say.

Japanese Government Admits First Fukushima Radiation Death - Over seven years after the devastating earthquake and tsunami that crippled Japan's Fukushima nuclear power plant, the Japanese government has admitted that a former plant worker has died as a result of radiation exposure. While the 2011 earthquake and tsunami killed approximately 19,000 people, as NPR's Elise Hu reported, and "most drowned within minutes," this is the first radiation-exposure-based death since the incident (the radiation plumes caused by Fukushima's meltdowns spread up to 25 miles away) NPR reports that the country's health and labor ministry has said the man's family should be paid compensation, according to state broadcaster NHK.It's not clear precisely when the man died. He was in his 50s, NHK said, and his duties included "measuring radiation levels at the plant immediately after the severe nuclear accident."He left his job there in 2015, and was diagnosed with lung cancer before his death.The ministry said that he "developed cancer due to total radiation exposure of around 195 millisieverts," NHK reported.  According to Reuters, exposure to 100 millisieverts of radiation in a year "is the lowest level at which any increase in cancer risk is clearly evident."

Liberty trustee challenges fracking points in editorial - Youngstown Vindicator -- Your editorial of Aug. 28 titled “Fracking not the problem with water in Youngstown” is confusing and misleading. These are two different issues. Fracking is a problem in the entire state of Ohio due to the governor’s inability to stand strong against this industry and its need for injection wells. Both Democratic and Republican officeholders in this state benefit from campaign contributions from this industry. If we didn’t allow fracking in Ohio, we wouldn’t need injection wells to inject the waste in our communities. This is making rural Ohio a dumping ground for toxic waste.No one realizes the long- term effect it will have on those of us unfortunate enough to have them nearby. In the Metro Digest section of your own paper, it stated that Hubbard, Brookfield, Vienna and North Lima were meeting to discuss how we can stop this attack on our rights to clean air and water. Susie and Dr. Ray Beiersdorfer are respected geologists. Their mission to protect the citizens of this area from further abuse from the oil and gas industry is not foolhardy but respectful. Furthermore, as a trustee in Liberty Township before the earthquakes in Youngstown caused by fracking, I was educating my residents on the dangers of fracking and injection wells. Liberty Township was settled upon coal mines, and drilling in this area could cause further destruction underground. In addition, drilling for gas or for injecting its waste not only may cause earthquakes but can ultimately contaminate our residents’ well water.

City voters to decide fracking ban, council term limits – Vindicator - A perennial anti-fracking charter amendment will make it on the ballot this year without a court battle. The Mahoning County Board of Elections certified the ballot issue at Tuesday’s meeting along with two measures that would eliminate term limits for members of Youngstown city council and council president. An identical anti-fracking proposal, called the Youngstown Water Protection Bill of Rights, had been unanimously rejected by the board of elections in March, but the Ohio Supreme Court ruled that the board exceeded its authority by rejecting the initiative and ordered it on May’s primary ballot. Board Chairman Mark Munroe said the language of this fall’s proposal matched the language that the court ordered on the ballot in the primary. “It was certainly appropriate that the board approved it,” Munroe said. “We made the conscious decision to use the same wording that we did in May,” said Susie Beiersdorfer, a member of the committee that backed the proposal. In March, the board cited House Bill 463, which requires election boards to invalidate petitions if they determine they fall outside a local government’s authority. The Ohio Department of Natural Resources regulates fracking under state law, so parts of the local charter amendment may not be enforceable. City voters have rejected different versions of the measure in seven previous elections dating back to 2013. Business and labor groups routinely turn out to oppose the measure, but Beiersdorfer said she’s optimistic about its chances this fall. “I think more people are becoming aware,” she said. The proposal includes a measure that would forbid city government from using water and wastewater funds for economic-development projects.

Fracking begins at Cabot Oil's Ashland County site - The Columbus Dispatch - WOOSTER — Drilling on Cabot Oil and Gas’ third well pad site in northeastern Ohio is beginning just as fracking has commenced on the company’s first site, in Ashland County’s Green Township. Cabot has said it plans eventually to have five exploratory wells built in the Ashland, Richland, Wayne Holmes and Knox County region. Locations for two additional well-pad sites in addition to the pads in Green, Mohican and Vermillion townships in Ashland County have not yet been nailed down, according to George Stark, director of public affairs for the Houston-based company. Stark said two possible sites for well pads are south of Loudonville off County Road 529, or in Richland County’s Monroe Township, near Malabar Farm.  “After (the site on state Rt.) 511, we don’t have a place,” he said. “There’s a few locations off of  (state Rt.) 39 and we’re just working the permits. “There’s a lot (of locations) on the drawing board, some farther along than others. Soon we need to pull the trigger. Construction season is something we will be mindful of.” Stark said the company is working with landowners to get leases signed so they can apply for the necessary permits from the state. A drilling rig was placed at the Vermillion well pad on Rt. 511 at the beginning of last week. The rig previously had been at the first well pad site on Green Township off Township Road 2375 and, over the last month at the Mohican Township site on Township Road 257. The well at Township Road 2375, identified as Kamenik Pad 1 by Cabot, was first drilled toward the end of June. Once the rig moved to the Mohican Township pad, containers for water were placed in Green Township to prepare for horizontal hydraulic fracturing, or fracking.  Stark said the well in Green Township was hydraulically fractured over the last week extending horizontally about 1,000 feet and is the first of the three constructed well pads to be in production.  “When we flow it back the water and the sand come back also. In the initial flow back, you are getting all the water and all of the sand ... After awhile, you will get 90 percent water and 10 percent product. Over time, we will get 10 percent water and 90 percent product.”  The waste-water from the fracking process is being hauled to storage wells elsewhere, Stark said.

Cabot O&G Fracks Its First OH Knox Well, Drilling 3rd OH Well - According to a news account from Ohio, Cabot Oil & Gas is either in the midst of, or just recently completed, fracking their very first shale well in central Ohio. The well is located in Ashland County’s Green Township. As we previously reported, Cabot is targeting the Knox formation (see Cabot O&G Opens Branch Office in OH – Hoping to Find Oil in Knox). Cabot has already drilled two wells, fracked one, and moved their drilling rig last week to Vermillion Township (also in Ashland County) to begin drilling a third well. The first three wells are all located in Ashland. As for the next two, Cabot isn’t 100% sure. Maybe another well in Ashland, but maybe a well in Richland County instead. Cabot’s George Stark says to stay tuned for the location of the final two test wells the company will drill. Cabot plans to have all five test wells drilled and fracked by the end of this year. “It should be a busy September and October,” according to Stark.

Number of Producing Wells in Utica Surpasses 2000 – The number of horizontal wells producing oil and gas in the Utica shale in eastern Ohio has risen above 2,000, according to the latest data from the Ohio Department of Natural Resources. ODNR says that as of Sept. 1, Ohio recorded 2,009 horizontal wells in production across the Utica shale. The agency reported there were 1,957 producing wells in the Utica the final week of August. As of Sept. 1, ODNR reported that it had issued 2,881 permits for horizontal wells, of which energy companies had drilled 2,404. The state said it issued eight permits for the week. Four were awarded to Chesapeake Exploration LLC for wells in Harrison County, three were issued to XTO Energy for wells in Belmont County and a single permit was issued to Triad Hunter LLC for a well in Noble County, according to ODNR. The number of oil and gas rigs operating in the Utica stood at 20 for the week ended Sept. 1, unchanged from the previous week.

Wayne National Forest mineral auctions canceled - Marietta Times -  The withdrawal of two mineral leases set to be auctioned later this month in the Wayne National Forest was received with relief from an organization that had protested the proposal and frustration from the state trade organization for oil and gas interests. The two plots, one of 35 acres and the other about 40 acres, are in Monroe County, and the mineral leases were scheduled for auction Sept. 20, according to an announcement in July by the Bureau of Land Management. The BLM announced Aug. 28 that the auction was canceled, citing Title 43 Code of Federal Regulations, paragraphs 3120.1-3, but offering no further explanation.That part of the code refers to suspending the offering of a parcel while an appeal is under consideration.Wendy Park, a senior lawyer for the Center for Biological Diversity, said Wednesday that her organization’s protest was the only one she could find that was lodged against the lease offering. Parks said the center opposed the lease because of its potential impact on nearby water bodies and settled areas. When the 400,000 acres of the Wayne National Forest was opened to oil and gas extraction leasing in 2016, she said, the environmental impact examination was general rather than site specific, and the leases offered since then have not taken local conditions into account. “This is pretty much what we’ve been saying in all our protests, that they’re not taking a hard look at the impact of fracking on site-specific resources,” she said. In addition to endangered species of bats, she said, there also are public health and cultural concerns.“There are homes and communities near these leases, and toxic chemicals and air pollution would certainly have an impact on the health of local residents,” she said. “They also have failed to comply with the obligation to make sure cultural and historical resources are not harmed.”

Rover Asks to Start Up Final Laterals as Majorsville Volumes Ramp - Rover Pipeline LLC has asked FERC for authorization to start service on its last remaining supply laterals as the operator approaches the end of construction on its 713-mile, 3.25 Bcf/d Appalachian takeaway project.Rover told the Federal Energy Regulatory Commission in a filing Friday that its Sherwood and CGT laterals are mechanically complete and ready for service. Rover also asked for authorization to start up its Sherwood Compressor Station and two meter stations associated with the lines.The Sherwood Lateral would run roughly 54 miles from eastern Ohio into West Virginia to draw supplies from MarkWest Energy Partners LP’s Sherwood processing facility. The CGT Lateral would extend about six miles from the Sherwood line to an interconnect with Columbia Gas Transmission. Rover asked FERC to issue authorization in time to place the facilities in service by Sept. 15.“Rover’s shippers have urgently requested Rover to place these facilities in service to allow their stranded natural gas supplies to be transported to Midwest markets,” the operator told FERC. One notable shipper that stands to benefit from the start-up of the remaining Rover laterals is Antero Resources Corp. Management for the Denver-based producer said during a 2Q2018 earnings conference call that it expects to deliver additional volumes of gas into the Midwest once the Sherwood Lateral enters service.

Rover natural gas pipeline lifts restriction on capacity at key supply lateral — Energy Transfer Partners' Rover Pipeline said it has resumed normal operations Friday after issuing a force majeure for a brief period that required a flow reduction to about 250 MMcf/d on one of the supply laterals it recently started up. A notice to customers said the force majeure for unexpected repairs on the Majorsville lateral and the associated capacity restriction were lifted. Spokeswoman Alexis Daniel said in a statement that the force majeure, issued late Thursday, was part of the normal startup of the compressor stations in which maintenance of a piece of equipment was required. "The repairs were completed quickly," Daniel said. The lateral entered service September 1 after the US Federal Energy Regulatory Commission granted authorization following a months-long holdup stemming from the operator needing to satisfy the commission that it was adequately restoring areas affected by erosion and land movement. Daniel said ground movement was not a factor in the issuance of the force majeure. The Majorsville lateral runs about 24 miles from a receipt point in Marshall County, West Virginia, to an interconnect with the Clarington lateral in Belmont, Ohio. Rover, with a total capacity of 3.25 Bcf/d, is designed to move gas from the Marcellus and Utica shale production areas to downstream markets as well as to the Dawn Hub in Ontario. It is among a handful of infrastructure projects meant to boost takeaway capacity from the prolific Appalachian Basin producing region. A request for approval is pending before regulators to start the final two laterals on the pipeline.

Southwestern to Double Down in Appalachia After $1.9B Fayetteville Sale --Southwestern Energy Co. is going all-in on the Appalachian Basin, announcing on Tuesday that it would exit the play it gave rise to with the $1.9 billion sale of the Fayetteville Shale assets and move some of the proceeds into the liquids-rich Northeast, which has consistently outperformed declining production in Arkansas. Southwestern, which has been marketing the Fayetteville properties since the beginning of the year to reposition its portfolio as part of a broader cost-cutting initiative, said it would sell its Fayetteville assets to privately held Flywheel Energy LLC, a company backed by Kayne Private Energy Income Funds. The deal is expected to close in December. Under the transaction, Southwestern would become a pure-play Appalachian operator, selling 915,000 net acres in the Fayetteville, 4,033 operated producing wells, 3.7 Tcf of proved reserves, associated midstream assets and anticipated 2019 production of 225-230 Bcf. The sale marks the end of an era, as the Fayetteville built Southwestern’s brand as an unconventional explorer. The Houston-based independent lays claim to the first successful natural gas production from the formation, becoming one of its most dominant players over the years. It spent $11 million for 343,000 acres in 2003 at a time when benchmark natural gas prices traded above $5.00/MMBtu for most of the year and continued increasing to hit a peak of nearly $13.00/MMBtu in 2012.

CNX, Hess complete sale of Utica shale play assets to Ascent Resources - CNX Resources and Hess have completed their previously announced sale of their Ohio Utica joint venture interests in the shale play in eastern Ohio, US for around $400m to Ascent Resources. The deal involves sale of 39,000 net acres to Ascent Resources including 26,000 net undeveloped acres. Hess said that it will use the proceeds from the deal to invest in its higher return growth opportunities in Guyana and the Bakken, and also for funding the previously announced share repurchase program.In Guyana, Hess announced a ninth discovery in the Guyana basin last week following the drilling of the Longtail-1 well in the Stabroek Block.CNX Resources, on the other hand, had earlier said that it would use the net proceeds from the sale to pay down debt, invest in drilling and completion activities and also for making bolt-on acreage acquisitions whenever opportunities are available.The sale for CNX Resources included 50 net producing wells, five 50% working interest wells it had recently completed, two 50% working interest wells for which it has drilled the top hole, and nearly 26,000 net undeveloped acres.The sold assets are located in the wet gas Utica Shale areas of Belmont, Guernsey, Harrison, and Noble counties. Ascent Resources has also completed acquisition of natural gas and oil leasehold interests, fee minerals and associated assets in the Utica shale play in the Appalachian Basin from Utica Minerals Development for around $477m.

 Ohio shale gas production spikes as driller Ascent pushes expansion - Utica Shale gas from three counties and five producers led Ohio's 50% year-on-year increase in production to 6.4 Bcf/d in the second quarter. The three counties -- Jefferson, Monroe and Belmont -- all directly across the Ohio River from West Virginia, accounted for 75% of the total second-quarter production reported to the Ohio Department of Natural Resources by Wednesday. Likewise, the state's top five producers, led by Ascent Resources, accounted for 75% of the state's shale gas production. Jefferson County wells, which tripled production from the 2017 second quarter, are split almost exactly in half between two drillers, Ascent and Chesapeake Energy. Ascent was formed around a core of the same executives who pioneered the Utica play for Chesapeake and is now backed by private equity investors First Reserve Management and Energy & Minerals Group. Ascent more than doubled production in a year and continued to widen its lead over rival Gulfport Energy as Ohio's top Utica Shale producer by volume. The company looks to expand in the play, having struck deals to buy $1.5 billion of Utica wells and leases from Hess and CNX Resources as the second quarter was ending. Gulfport, the state's previous production leader, increased production 17% compared with the same period of 2017. Gulfport is in the process of milking its Utica dry gas operations, which do not require much new spending, for cash to fund what it says are higher-margin oily wells in the Woodford Shale of Oklahoma's SCOOP play. Stifel Nicolaus & Co. shale gas analyst Jane Trotsenko said Wednesday that Gulfport is cutting back from two drilling rigs to one in the Utica after operating as many as six rigs in Ohio and will turn its attention to completing the 50 to 60 Utica wells it has drilled but not yet fracked and placed online. "At current crude oil and natural gas prices, the SCOOP offers higher returns (71% for Woodford wet gas) than the Utica (57% Utica dry gas east) and commands a higher allocation of capital," Trotsenko said. "Over the foreseeable future, we are projecting Gulfport production growth to decelerate in the Utica and future production growth to be driven by their SCOOP assets." Judging by the number of drilling permits pulled by Ohio's producers, the three river counties can expect a mild slackening of activity as drillers start to chase wetter wells with higher proportions on NGLs in interior counties such as Harrison and Guernsey as gas prices stay flat and NGL prices increase.

How a Family Surrounded by Shale Gas Plants Took Action --  Allen Young and his family can see three sizable natural gas plants–operated by Dominion and Energy Transfer Partners–without taking a step off their property. Over the past three years, these facilities have taken over the boomerang-shaped ridge less than a half-mile from the Young's home in Powhatan Point, Ohio. Their previously fresh air often smelled, they were plagued by noise from engines and machinery, and the whole family experienced frequent headaches, dizziness, shortness of breath, nosebleeds and other respiratory symptoms.  Along with other Ohio residents, Allen is using an important avenue for action: submitting complaints to the Ohio Environmental Protection Agency (Ohio EPA) and the Ohio Department of Health (ODH).   Through the Community Empowerment Project, Earthworks offers tools and support to residents like Allen who live on the front lines of oil and gas development. We use a specialized camera that allows us to see and document the air pollution endemic to facilities like the Dominion and ETP compressors. This technology, called Optical Gas Imaging (OGI), makes visible this normally invisible pollution, and is the same technology used by regulators like the Ohio EPA. After Allen saw OGI footage of the emissions he and his family were exposed to every day, he decided to start submitting formal complaints to the Ohio EPA.   Ohio EPA rules require that the agency investigate and respond to complaints from the public.  Meanwhile,  Allen incorporated new methods to document and share his observations. He began logging his family's health symptoms and measuring the noise pollution from the compressors with a phone app. He shared his family's story in a video interview conducted by Earthworks, and was featured in news stories by the Allegheny Front and local WTRF News. Finally, with more calls–and the suggestions of some very helpful, determined ODH staff–we learned of a small office within the Department with the ability to investigate exactly these types of complaints. The ODH's Health Assessment Section eagerly took the details Allen had carefully amassed–including noise levels, photographs of his children's skin rashes and nose bleeds, prescriptions for recently emerged health symptoms–and began its own investigation by collaborating with Ohio EPA. Within two months, ODH and Ohio EPA had conducted air quality testing right in Allen's backyard. Ohio EPA informed us of additional plans for a summer-long odor study at these and other nearby sites. What's more–and perhaps the biggest relief for Allen and his family–Dominion installed new equipment to control noise, and the Young's backyard fell quiet again.

Feds: Sunoco pipeline spilled 33,500 gallons of gas at Darby Creek in June -  More than 33,500 gallons of gasoline spilled from a Sunoco pipeline along Darby Creek in Tinicum Township near Philadelphia International Airport in June, according to recently released federal data.The release created a sheen on the creek and crews were sent to contain the spill from a 12-inch pipeline that Sunoco plans to use as it constructs the Mariner East 2 pipeline for natural gas tapped from the Marcellus Shale.  The pipeline was manufactured in 1937. The Pipeline and Hazardous Materials Safety Administration released a spreadsheet last week containing data on the accident, classifying it as a significant — but not serious — spill.  The data were supplied by Sunoco.  Until then, there were few publicly available details of the incident. The release of the new data was first reported by State Impact Pennsylvania.

Fracking chemicals dumped in the Allegheny River a decade ago are still showing up in mussels -- Chemicals from fracking wastewater dumped into Pennsylvania's Allegheny River before 2011 are still accumulating in the bodies of freshwater mussels downstream, according to a new study.Researchers at Pennsylvania State University found elevated concentrations of radioactive Strontium in the shells of freshwater mussels downstream from a former fracking wastewater disposal site in Warren, Pennsylvania, about 143 miles northeast (and upstream) of Pittsburgh.While the potential health impacts on humans from this contamination are unclear, high levels of exposure to radioactive Strontium can cause cancer and birth defects. “Mussels record the changes in water quality that they see over their lifetimes in the layers of their hard shells," Nathaniel Warner, a professor in the Department of Civil and Environmental Engineering at Pennsylvania State University who co-authored the study, told EHN. "We can go back about 10 years and see the spikes that indicate when wastewater from Marcellus shale was being treated and discharged into the Allegheny River." The study, published Wednesday in the peer-reviewed journal Environmental Science & Technology, is among the first to show bioaccumulation—the buildup of chemicals in the bodies of living creatures—from oil and gas wastewater downstream of a surface water disposal facility. "We don't know how much of an impact this has on human health, or if it has any impact at all," Warner said, "but this means it's entering the food chain." He noted that they'd like to look at the soft tissue of the mussels next, since muskrats and fish dine on freshwater mussels, but "no animals really eat the shells."

Columbia nuns take gas pipeline case to US Supreme Court, plan solar project --  Roman Catholic nuns near Columbia will petition the U.S. Supreme Court in their effort to remove a gas pipeline from their “sacred” farm property. On their Facebook page, the Adorers of the Blood of Christ also say they plan to build a solar farm on their property. “This project at this sacred site of resistance would bear witness to clean, sustainable, earth-friendly energy sources,” the nuns wrote. Twice, the nuns have lost court decisions in their lawsuit against the Federal Energy Regulatory Commission and the Transcontinental Pipe Line Co. for condemning the nuns’ farmland in West Hempfield Township to build the Atlantic Sunrise natural gas pipeline. The nuns claimed that forcibly building the pipeline through their property was a violation of their protected religious beliefs to protect the Earth from harm, such as the use of fossil fuels. The nuns claim a violation of the federal Religious Freedom Restoration Act. But two courts said those claims should have been raised during the pipeline’s administrative process before FERC, not after pipeline approval had been given. The nuns will now attempt to get the Supreme Court to take up their case. Less than 5 percent of the cases filed with the court are taken up by justices.

Pennsylvania Shale Production, Operations Again Post Quarterly Gains - An unconventional natural gas production report issued Friday by the Pennsylvania Independent Fiscal Office (IFO) showed little to frown about during the second quarter, as volumes increased, more producing wells were online and the well inventory declined.Based on data collected by the Pennsylvania Department of Environmental Protection, the IFO said second quarter unconventional production increased to 1.456 Tcf, or 10% higher than it was in the year-ago period and slightly above the 1.441 Tcf produced in 1Q2017. The gain was driven by a 10% production increase from horizontal wells, which account for nearly all production in the state.It was the seventh consecutive quarter/quarter increase from horizontal wells. IFO added that over the last two years, horizontal production has increased by 15%. Over the same time, since 2Q2016, average per-well production increased by 27.4%, as operators continued pushing for optimized completions.All of the second quarter production growth, according to the report, came from wells spud in 2016 and 2017. Wells spud in the two years comprised more than one-third of all production in the quarter. Wells spud in 2015, meanwhile, showed the largest decline in production (37%) and production from wells spud in 2014 or earlier declined by 17.8%.  The state’s second quarter well inventory, defined by the IFO as those drilled but uncompleted or shut-in, declined from 1Q2017 by 102 to 1,519. Similarly, total producing wells increased by 10.4% year/year to 8,672, consisting of 8,194 horizontal wells and 478 vertical wells drilled to unconventional formations.

Shell's Cracker Project Progressing After Administration Waives Steel Quota - Shell Chemical Appalachia LLC can continue constructing its multi-billion dollar ethane cracker in western Pennsylvania without delay after the Trump administration last week eased restrictions on imported steel from South Korea, Argentina and Brazil.President Trump signed a proclamation allowing the Department of Commerce to provide targeted relief from quotas, or restrictions on the amount of product that can be imported, that were imposed on the countries in March. Companies can now apply for quota exclusions based on insufficient product quantity or quality available from U.S. steel or aluminum producers.  Piping for Shell’s massive facility has been sitting in port for months under the control of U.S. Customs and Border Patrol, unable to move to Pennsylvania because of the quotas. Last March, the Trump administration imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports. The tariffs took effect for most countries on March 23. After negotiations, quotas were placed on steel imports from Argentina, Brazil and South Korea and for aluminum imports from Argentina in lieu of the tariffs. Shell’s pipe, which is from Brazil, can now be delivered to the construction site. Shell’s decision to build the cracker in Pennsylvania marks the first time in more than 20 years that such a facility has been built in the United States outside of the Gulf Coast. The facility, which is expected to enter service in the early 2020s, is designed to consume a little more than 100,000 b/d of ethane to produce 1.5 million metric tons/year (mmty) of ethylene and 1.6 mmty of polyethylene. Late last year, Shell transitioned from site remediation and early works, such as sewage, electricity and foundations, to the primary construction phase during which the actual plant is being built.

Appalachia Group Awards Contract for $3.4B Ethane Storage Hub - A proposed multibillion-dollar regional storage complex for natural gas liquids sourced from the Marcellus, Utica and Rogersville shale plays this week moved one step closer to reality this week.  Steve Hedrick, CEO of Appalachia Development Group, LLC (ADG) told Rigzone that it had named Parsons Corp. as its engineering, procurement and construction (EPC) partner for the buildout of the Appalachia Storage and Trading Hub (ASTH). “We are driven by the greater vision of $36 billion in follow-on investment associated with this catalyst for development of the petrochemical industry in Appalachia,” Hedrick added. According to ADG, Parsons will initially focus on the pre-front end engineering design (FEED) and FEED stages including project management and execution planning. Subsequent phases would include constructing the $3.4 billion project and its long-term operation, the Charleston, W.Va.-based project sponsor stated. The American Chemistry Council (ACC) has estimated that the ethane storage hub would act as a catalyst for more than $36 billion in follow-on petrochemicals investments and the creation of more than 100,000 long-term jobs, ADG reported. On January 3 of this year, ADG stated that its application for a $1.9 billion loan guarantee for ASTH from the U.S. Department of Energy (DOE) had advanced from the first to the second phase of DOE’s review process. “The Pre-FEED and FEED phases will support our Part II application to the DOE Title XVII Loan Guarantee Program,” Hedrick explained. “From filing, approval of the Part II application can take from approximately six months to two years. Therefore, speculating on a timeline for future phases is premature.” As it pursues a DOE loan guarantee, ADG is also trying to secure $1.4 billion in private funding for the project. “A complex array of investors are engaged, from private equity to investment banks to strategic investors whose own success in their sector is advantaged by the success of this catalyst for the development of the petrochemical industry,” Hedrick said.

Appalachian Prices Poised to Shake Off Shoulder Season Slump as Takeaway Grows -- As major expansions like the 3.25 Bcf/d Rover Pipeline and 1.7 Bcf/d Atlantic Sunrise approach full service, further growing Appalachian takeaway capacity, the wide basis differentials that once dogged the historically constrained Marcellus and Utica shale region are shrinking -- a trend that could come into sharp relief this shoulder season. Recent basis trades at a number of key Appalachian hubs suggest Northeast producers could see substantially improved pricing this shoulder season compared with 2017 even as supply estimates show sharply higher output from the region. The dramatic shift in regional pricing has also coincided with new takeaway capacity and a starkly different storage picture this year compared to last.After spot prices at Dominion South traded more than $2.00/MMBtu below Henry Hub at times during September and October 2017, the bellwether Appalachian location was priced in at a negative basis of just 42 cents for September bidweek, with October forwards recently priced at around 40 cents back of Henry.Recent shoulder season pricing at other Appalachian points paints a similar picture. Forwards markets currently expect Transco Leidy Line and Millennium East Pool to see basis differentials shrink dramatically year/year (y/y) to around negative 40 cents for October 2018 versus spot prices that frequently traded around $1.50-2.00 back of Henry over the same period in 2017. “After years of perpetual pipeline constraints, pipeline utilization data indicates that some Northeast takeaway pipelines have a little bit of capacity to spare -- a trend that has major implications for regional pricing relative to downstream markets,” RBN Energy LLC analyst Sheetal Nasta said in a recent note to clients. “At the same time, more pipeline expansions are on the horizon that promise to bring on even more gas supply from Marcellus/Utica producers,” including recent developments suggesting new capacity from Rover and Atlantic Sunrise is imminent.

Orphan Wells: States Wrestle With Soaring Costs For Oil & Gas Industry Mess – WKMS - William Suan is no stranger to the problems abandoned oil and gas wells can cause. “I had to fence one off because it’s leaking now,” he said, standing inside a barn on his cattle ranch near Lost Creek, West Virginia.  There are five inactive wells on his land, most installed in the ’60s and ’70s, and the companies that owned the wells have long since gone out of business.   Hidden in the wooded thicket on the backside of his property is a three-foot-tall rusted tube jutting out of the ground. A soft bubbling sound emanates from the well. “See the gas bubbling out of it?” he said. “Sometimes there’s oil. There’s where they had one of those pads to soak up the oil last time I complained about it.” In 2012, Suan won a case against the West Virginia of Environmental Protection to get one of the wells on his property plugged. Since then, he says he has been unsuccessful in getting environmental regulators to take additional action. Having enough resources to plug old, inactive wells is a challenge not unique to West Virginia. Across the country, many state regulators have few resources to deal with an ever expanding list of abandoned wells. “The states are pretty good at regulating wells that are being explored, are being fracked, are in production, but they kind of lose interest once that happens,” said Alan Krupnick, a senior fellow with the nonpartisan environmental think tank, Resources For the Future. “There’s not enough attention being paid to reducing the risk from these abandoned wells.” Across the Ohio Valley, thousands of oil and gas wells sit idle. An analysis of state data by the Ohio Valley ReSource estimates more than 8,000 oil and gas wells are considered “orphan.” Definitions of orphan and abandoned wells vary by state, but in general, orphan wells lack an operator or company that can pay to plug them. That responsibility then falls to state regulators who are frequently struggling to keep up with demand and scrambling to find money to clean up the mess.In Kentucky and West Virginia, agencies tasked with plugging those wells rely on forfeited bonds. That money is collected in a fund and used to plug the highest priority wells.Well plugging can be an expensive undertaking. Across the Ohio Valley, regulators reported figures to upwards of $200,000 to plug a single well.“We may have an emergency repair on a big well and we may have had bonds forfeited on several small wells and those funds just don’t add up,” said Lanny Brannock, a spokesperson with the Kentucky Energy and Environment Cabinet. “So, we’re constantly behind on funding for orphan wells.”

Two tree sitters join fight against Mountain Valley Pipeline - Now that Mountain Valley Pipeline workers are back at work, so are pipeline protestors. On Wednesday, two new tree sitters suspended 50 feet in the air and are protesting against Mountain Valley Pipeline in Montgomery County.One of them is 24-year-old Virginia Tech grad Lauren Bowman, whose goal is to delay MVP's work. "This is private property and it doesn't belong to Mountain Valley Pipeline. So, I am not breaking any laws," said Bowman. Bowman and her fellow protester, Nettle, are asking Gov. Ralph Northam to revoke water permits for this project in hopes of protecting creeks like this one. "No amount of money is worth the lives and people of this community and that we are not backing down," Bowman said. The rest of the camp tells 10 News they plan to stay here for as long they can. "This water goes through the Spring Hollow Reservoir, which goes through to both Salem and Roanoke and that's a big deal. And I feel like people just aren't paying attention," said Connie Fitzsimmons, a pipeline protester. According to Fitzsimmons, she and the others are here to protect the water for future generations and want to send this message to the community. “There isn't any compromise when it comes to people lives and we are going to be paying for this pipeline for years to come,” said Bowman. 

Lawsuit Could Shut Down Controversial Great Lakes Pipeline - Two environmental groups have filed suit against the U.S. Coast Guard in a Detroit federal district court, arguing that their plan to respond in the case of a Great Lakes pipeline oil spill is inadequate, The Detroit News reported on Aug. 22.The suit is part of a larger push to shut down Enbridge's Line 5 pipeline that runs under the Straits of Mackinac between Lakes Huron and Michigan and comes as indigenous activists have set up campsprotesting the line that could damage 400 miles of shoreline in a spill."Until we decommission this aging, risky pipeline, we need the best-possible spill response plan to protect our Great Lakes, our communities, our wildlife and our economy," National Wildlife Federation staff attorney Oday Salim said in a statement reported by The Detroit News.National Wildlife Federation and the Environmental Law & Policy Center (ELPC) are suing based on comments made by former Coast Guard Commandant Admiral Paul Zukunft during a congressional hearing in November during which he said the Coast Guard was not prepared for a pipeline spill in the Great Lakes."Between 2014 and 2017, Coast Guard personnel have publicly stated that the agency is ill-equipped to adequately remove a spill from the open waters of the Great Lakes—let alone one as severe as a worst case discharge," the lawsuit states, Courthouse News Service reported.The suit argues that the Coast Guard's 2017 approval of the North Michigan Area Contingency Plan violates the Oil Pollution Act of 1990, which was written in response to the Exxon-Valdez oil spill and mandates contingency plans in any areas where oil is transported through water, according to The Detroit News.The case further argues that, if the contingency plan is invalid, the facility response plan (FRP) required to allow Enbridge to run its pipelines under the Great Lakes would also be invalid, according to Courthouse News Service."You are not allowed to operate without a facility response plan," ELPC senior attorney Margrethe Kearney told The Detroit News. "If the court agrees, as they should, that the area contingency plan is not valid then certainly one of the outcomes could be someone requesting that Line 5 be shut down."

Enbridge, Fond du Lac Band reach deal to route Line 3 through reservation -- Enbridge Energy and the Fond du Lac Band of Lake Superior Chippewa have reached an agreement to build the Line 3 replacement oil pipeline through the band's reservation near Cloquet in northeast Minnesota. The financial terms of the deal are confidential. But the agreement provides Enbridge with easements through 2039 for the six existing oil pipelines that cross the reservation. The easements were scheduled to expire in 2029. Enbridge will construct the new pipeline in an expanded right-of-way next to the existing pipeline corridor. The Calgary-based company will also remove the old pipeline from the reservation after the new line is built and in service.Enbridge plans to replace the existing, degraded Line 3 pipeline with a new line that will be able to carry nearly twice as much Canadian oil across northern Minnesota. The Minnesota Public Utilities Commission approved a certificate of need and route permit for the Line 3 project in June.  The new pipeline will follow a different route across the state than the current oil pipelines Enbridge operates. It will follow the existing corridor from the Alberta tar sands to just outside Clearbrook, Minn., but will then move south toward Park Rapids, Minn., before veering east toward the company's pipeline terminal in Superior, Wis.

The fight to stop the Dakota Access Pipeline continues in the bayous of Louisiana -- Cherri Foytlin is Din’e, Cherokee, and Latina, the mother of six children ages 10 to 21, and lives in Rayne, Louisiana, a small struggling town just off the interstate. She is one of a council of four indigenous women who lead an activist camp here called L’Eau Est La Vie (Water is Life). Other core members call her “a badass.” For the last year and a half, Foytlin and the other activists have planned and executed dozens of direct actions from the camp’s several buggy acres, which belong by heritage to the Atakapa-Ishak, a Gulf Coast Native American tribe. At first glance, there isn’t much to see. A row of tents. A kitchen inside a garage. A carport that shelters an above-ground pool, half filled, and a truck currently under repair. Yet from this scrappy home base, Foytlin and a handful of people have put their bodies in the way of the construction of the Bayou Bridge Pipeline again and again and again. This pipeline is a project of Energy Transfer Partners, a Fortune 500 company that is also the parent company of the Dakota Access Pipeline. Much like that higher-profile project, this one runs through a vital watery ecosystem, the Atchafalaya Basin, and threatens not only the water people drink but also the ways of life of indigenous and other local people. To prevent its potential havoc, Foytlin and the other L’Eau Est La Vie activists have battled the project from trees, on land, and by kayak. They have been cuffed, tasered, and arrested.  This Labor Day weekend, L’Eau Est La Vie put out a national call for reinforcements for a new wave of actions. It offered newcomers training in using ropes and climbing gear to scale a cypress tree and then establish and defend a tree sit, and led lessons in boat-based resistance, in which “kayaktivists” row up to remote swamp construction zones. Hands were also needed for ongoing construction projects: compost toilets, showers, and a library. I came down to learn why they are so determined. I also wondered why their fight has been almost completely ignored.

First Nations and farmers are marching across Iowa to stop the Dakota Access Pipeline -  Many think that the fight to stop the Dakota Access Pipeline in the Midwest is long over. That couldn’t be further from the truth.On September 1, a group of 30 landowners, farmers, environmentalists, and indigenous peoples under the banner First Nation Farmer-Climate Unity March set out by foot on a 90-mile journey from Des Moines, Iowa, to Fort Dodge, Iowa. The march is, in part, an effort to raise awareness about the ongoing legal battles landowners in Iowa face against the 1,172-mile long crude oil pipeline. They plan to arrive at their destination Saturday. A 2016 lawsuit challenging the Iowa Utilities Board’s permit granting eminent domain to developer Energy Transfer Partners is heading to the Supreme Court of Iowa later this month. A group of landowners and environmental organizations like the Sierra Club are arguing that eminent domain shouldn’t have been used to take private land for this pipeline. The hope is that the judge’s final ruling would require it to move elsewhere. “We feel that first nation people and farmers have a much closer connection to the Earth and that we need to be listened to when we talk about environmental disasters and climate change,”  Pipeline opponents worry about the impact oil spills can have on the land, especially farmland. This march aims to highlight these concerns and heighten the public interest in the ongoing lawsuit.

Anadarko shuts in oil production, US Coast Guard secures USGC ports ahead of Gordon - US independent Anadarko on Monday shut production at two Gulf of Mexico platforms, Horn Mountain and Marlin, while the US Coast Guard began preparing ports in preparation for Tropical Storm Gordon. "We have ... shut-in production at both platforms to protect the environment," Anadarko said in a statement Monday, adding that production was continuing at its other platforms. Anadarko operates 10 platforms in the Gulf of Mexico with production of approximately 160,000 b/d of oil equivalent, according to the company's website. At the key Louisiana Offshore Oil Port, operations are running normally while port officials continue monitoring the storm, officials said. Gordon's track looks set to make landfall east of the LOOP operation, which is near Port Fourchon south of New Orleans, early Wednesday. However, further to the east, the port of Mobile, Alabama, is already at Port Condition Zulu, according to the USCG website. This means it is closed to all incoming and outgoing traffic with gale force winds expected within 12 hours. This includes the port of Pascagoula, Mississippi, which serves Chevron's a 330,000 b/d refinery, where the company was monitoring the storm as of Sunday, Chevron spokesman Braden Reddall said in an email. The Lower Mississippi ports of Baton Rouge and New Orleans are on Port Condition Yankee, according to shippers, which means gale force winds are expected within 24 hours. While the port remains open to all commercial traffic, vessels in port need to report their intention to the USCG to stay and batten down the hatches or move out. ExxonMobil's 502,500 b/d Baton Rouge, Louisiana, refinery is on watch ahead of Gordon, where heavy rainfall in excess of 12 inches is expected to cause flash flooding.

US Energy Operations Begin Recovering After Tropical Storm Gordon (Reuters) - Energy companies and port operators along the U.S. Gulf Coast took steps on Wednesday to resume operations after Tropical Storm Gordon shut more than 9 percent of the region's oil and gas output. Gordon never became a hurricane as forecast and weakened into a depression on Wednesday, just hours after making landfall near the Alabama-Mississippi border, helping to keep production and refining operations running unimpeded at most energy facilities in the Gulf and along the Louisiana coast. Coast Guard inspectors flew over ports in Mississippi and Alabama to evaluate the facilities, which remained closed on Wednesday morning to most traffic, Petty Officer 3rd Class Alexandria Preston said. In New Orleans, pilots began moving cargo ships through the mouth of the Mississippi River after the storm, said Matt Gresham, a spokesman for the Port of New Orleans. "We had no impacts from the storm and operations resumed as normal this morning," said Gresham. The lock connecting the Mississippi River to the intracoastal waterway that stretches to Texas and Florida was opened and pilots began escorting ships out of the area, he said. U.S. crude futures prices slipped more than 1 percent as Gulf production constraints appeared temporary and global trade disputes came into the forefront. U.S. crude futures were off $1 at $68.85 per barrel in afternoon trade. In all, company shut-ins lopped 315,992 barrels of oil and nearly 500 million cubic feet of natural gas from Gulf output in the last two days, according to Wednesday's estimate by the U.S. Bureau of Safety and Environmental Enforcement. The bureau, which regulates offshore drilling, said 9.4 percent of oil production and 10.4 percent of natural gas output was halted by the storm's path through the U.S. Gulf of Mexico. Workers were evacuated from 48 production platforms, it said in an updated statement on Wednesday. Offshore oil production accounts for 17 percent of total U.S. oil production and 5 percent of the nation's natural gas production. Companies including Exxon Mobil Corp, Chevron Corp , Talos Energy Inc and Anadarko Petroleum had evacuated offshore platforms ahead of the storm. By Wednesday afternoon, Chevron said it has begun to restaff and restore production at its Petronius platform. Anadarko also said it plans to begin moving workers back to two offshore sites and will restart production as quickly as possible. 

Vessel accident causes oil spill near Port Arthur - Clean up efforts are underway after a vessel collision caused an oil spill near Port Arthur, Texas. The U.S. Coast Guard said an estimated 13,272 gallons of marine diesel fuel was discharged after an accident involving the towing vessel Savage Pathfinder and the motor vessel Endurance on Wednesday evening. No injuries were reported. Containment boom was placed around the vessel, and the source of the leak has been secured, the Coast Guard said. Coast Guard Marine Safety Unit Port Arthur and Texas General Land Office personnel are involved in the investigation and response efforts. "We are working with TGLO, the responsible party and all maritime stakeholders to minimize impact as quickly as possible," said Capt. Jackie Twomey, federal on scene coordinator and commanding officer of MSU Port Arthur. An urgent marine information broadcast has been sent cautioning mariners transiting around Texaco Point and Port Arthur. The cause of the incident is under investigation.

 More than 1,000 gallons of oil spilled near Flint Hills East Dock - — Several agencies are responding to a major oil spill near the Port of Corpus Christi. The United States Coast Guard is reporting that an estimated 1,176 gallons of oil was spilled from an overloaded barge. The incident happened Thursday evening near the Flint Hills East Dock. Representatives with the U.S. Coast Guard's Incident Management Division, Corpus Christi Oil Spill Association, Flint Hills and crew members from the barge were on the scene to help with clean-up efforts. The Coast Guard says a sheen of about 100 yards by 450 yards could be seen. Crews placed boom in the water and around the barge to contain the spill. There is no word on how long the clean-up will take.

 US oil production rises to record as Texas ups drilling - — US crude oil production rose 231,000 barrels per day, or 2 percent, to a record 10.674 million bpd in June, the US Energy Information Administration said in a monthly report on Friday. The agency also revised its estimate for May up by 1,000 bpd to 10.4 million bpd. US output has been closely watched by crude oil markets, which have contended with concerns about oversupply as oil production ramps up and trade tensions between the United States and China weigh on global demand forecasts. The gains reflected growing production on land in Texas, where output climbed 165,000 bpd, or 3.9 percent to 4.4 million bpd. Output also rose in the Gulf of Mexico, climbing 10.3 percent, or 154,000 bpd to 1.7 million bpd. US natural gas production in the lower 48 states rose to an all-time high of 90.8 billion cubic feet per day (bcfd) in June, up from the prior record of 89.9 bcfd in May, according to EIA's 914 production report. Output in Texas, the nation's largest gas producer, increased 1.5 percent in June to 23.9 bcfd. In Pennsylvania, the second biggest gas producing state, production rose 2.2 percent to 16.5 bcfd in June. The United States has been the world's biggest producer of gas since 2009, ahead of Russia.

ETP, Partners Pull Trigger on Permian Gulf Coast Oil Pipeline - A 30-inch diameter pipeline to carry Permian Basin oil supply to the Texas Coast has enough support to move forward, a quartet led by Energy Transfer Partners LP (ETP) said Tuesday. The 600-mile Permian-Gulf Coast (PGC) pipeline is expected to be operational by mid-2020 with “multiple” origins in West Texas, including Wink, Crane and Midland. ETP already had partnered with Magellan Midstream Partners LP (MMP) to build the system, with MPLX LP and Delek US Holdings Inc. announced as partners on Tuesday. ETP offered few details. However, the system initially is to be designed to transport Permian oil to its Nederland terminal southeast of Houston and to MMP’s East Houston terminal. They each have access to the Houston Ship Channel. Ultimately, the four partners may increase the pipe diameter to expand capacity, based on additional commitments received during an upcoming open season, which is expected to be launched this week. ETP management indicated during first and second quarter conference calls this year that the PGC initially would transport up to 600,000 b/d, expandable to 1 million b/d. In addition to transporting Permian oil to Nederland and the East Houston terminals, the system could provide shipper capacity to ETP’s storage facility and pipeline header systems, as well as deliveries into Bayou Bridge, which moves oil from Nederland to Lake Charles, LA.

With pipelines full, oil and gas companies turning to trucks, rail - Oil producers in the Permian Basin, dealing with a shortage of pipelines, are increasingly turning to trucks and rail to ship the flood of crude from the West Texas oil field to refineries and export terminals on the Gulf Coast. These transportation shifts are driven by two simple math problems. First, crude oil production in the Permian has reached 3.6 million barrels a day, while pipeline capacity out of the region is just 3.5 million barrels a day, according to the energy research firm Wood Mackenzie. Next, crude is selling for as much as $10 more a barrel in South Texas, the Gulf Coast and other markets outside of West Texas, where inventories are building in part because of the lack of pipeline capacity The latest effort to move oil to more lucrative markets was launched earlier this week, when the Houston oil transport company JupiterMLP signed a deal with Vista Proppants and Logistics of Fort Worth to ship West Texas crude by rail from Vista’s loading terminal in Pecos. Vista plans to ship about 400,000 barrels a month from its Pecos terminal through 2019 and potentially into 2020, depending on when pipeline projects are completed. Pipeline capacity has become a particular problem in the Permian, as booming production of both crude and natural gas has exceeded capacity and created bottlenecks. Several companies, including Kinder Morgan and Phillips 66 Partners, both of Houston, are racing to complete pipeline projects, but most are not expected to begin operations until at least next year. The bottlenecks, meanwhile, are not only having an impact on prices in West Texas prices, but also production. The Railroad Commission of Texas, which oversees the oil and gas industry, recently reported that oil production in the state — most of it concentrated in the Permian — declined about 2 percent in June, compared to the same month a year earlier, the first year over year decline since early 2017. Analysts attributed the decrease to the pipeline shortage.

Burn, baby, burn- Natural gas is cheap, and Texas drillers are flaring more of it - Oil drillers are burning excess natural gas to keep the crude oil flowing. Natural gas is mostly a byproduct of crude oil drilling in the Permian Basin. So the shortage of pipeline capacity to transport the gas to market has played a role in companies burning — or flaring — large amounts of natural gas to keep that roadblock from slowing oil production. State data and analysts' reports show large increases in flaring permits and volumes in Texas. A similar situation happened — although with much larger percentages flared — several years ago in North Dakota. That prompted state regulators to rein in the practice. Texas Railroad Commissioner Ryan Sitton said this summer he expects to address the situation within the next six months.  "The regulatory side is going to start to be a problem as we continue to try to flare more gas in order to get the commodity we're looking for, which is crude oil. The flaring is not only value lost to the operator, but it's also value lost to the state in terms of tax dollars."  --Sarp Ozkan, senior oil and gas marketing analyst, Drillinginfo  Drillers want to sell their gas but not if it slows oil production.

New Mexico’s Permian-Heavy Lease Sale Draws Record Bids at Nearly $1B In a year in which New Mexico has already set milestones for oil production and lease sale revenues, it has set a record for the 3Q2018 federal land auction grossing nearly $1 billion, according to a U.S. Bureau of Land Management (BLM). A two-day online sale by the Carlsbad office brought in more than $972 million, which exceeds the proceeds from all of lease sales in New Mexico last year. The sale also surpasses BLM's previous best sales year. Most of the parcels were in the heart of southeastern New Mexico's Permian Basin in Eddy (56 parcels) and Lea (68) counties, and a small amount in Chaves County (18). In total, 142 parcels covering 50,797 acres were included in the two-day sale. On Wednesday, the first day of the sale, New Mexico set a national record for the highest bid for a single parcel and the highest per-acre bid ever placed -- $81,889/acre for a 1,240-acre parcel in Eddy County, bringing in $101.5 million. The previous records all have been set in New Mexico. The previous record for a single parcel was $76.6 million for a September 2016 auction, and the previous per-acre record was set last December at $40,001/acre. In the first day alone, 71 parcels totaling more than 28,000 acres were sold for a total of $386 million, more revenue than BLM 2017 proceeds of $358 million. BLM's previous overall record for lease sales nationally was $408 million set in 2008. 

Industrial group warns Congress of gas pipeline threat    - Lobbyists representing U.S. manufacturing and chemical companies are urging Congress to secure natural gas pipelines against physical and cyber attack. In letter sent to the Senate Energy and Natural Resources Committee and the House Energy and Commerce Committee this week, Industrial Energy Consumers of America President Paul Cicio said Congress should create mandatory security standards similar to those required of electric utilities."When so much is resting on the reliability of natural gas pipelines, we cannot help but be concerned that the security requirements under the Transportation Security Administration are voluntary, not mandatory," Cicio wrote. "Natural gas pipelines are the weak link in U.S. national energy infrastructure."  The letter comes as the Trump administration is weighing the creation of a federal subsidy for coal and nuclear power plants on the grounds their on-site supply of fuel provides a more secure power supply. Natural gas plants, on the other hand, are reliant on a near constant supply of gas delivered via pipelines.In building support for such an action, which has been opposed by groups as diverse as the Sierra Club and the American Petroleum Institute, Energy Secretary Rick Perry has cited the potential for pipeline disruption through terrorist attack.The Interstate Natural Gas Association of America, which represents pipeline companies and has argued against creating a national security standard, declined to comment on the letter from IECA. IECA describes itself as an "association of leading manufacturing companies with $1.0 trillion in annual sales, over 3,700 facilities nationwide, and with more than 1.7 million employees worldwide." A membership list posted by the Natural Resources Defense Council in 2015 listed the group's membership as including Dow Chemical, Marathon Refining, LyondellBasell and Goodyear Tire & Rubber Co.

Schlumberger CEO Warns Transport Constraints To Slow Shale Gains (Reuters) - The chief executive of the largest oilfield service provider, Schlumberger, warned on Tuesday that bottlenecks in the largest U.S. shale basin would slow oil production growth and investments in the region. A surge in oil and gas production in the Permian basin of west Texas and New Mexico has outstripped transport capacity, pushing the local price of oil to four-year lows and threatening to curtail drilling activity. Any slowdown could hurt oilfield service companies that have only recently started to recover from the 2014 oil-price crash. "These challenges will likely have a dampening effect on production growth, wellhead prices and investment levels in the coming year," CEO Paal Kibsgaard said at a Barclays conference in New York. The lack of transportation capacity would be resolved by the end of 2019, he said. Kibsgaard said market consensus that Permian production will continue to climb by 1.5 million barrels per day annually is "starting to be called into question." The Permian produced about 3.4 million barrels of oil per day in August, or about 46 percent of all U.S. shale production, according to an estimate from the U.S. Energy Information Administration (EIA). The hydraulic fracturing market, which had been seen as a bright spot in the North American services sector, also has softened more than expected, Kibsgaard said, as more producers hold off completing wells until oil prices climb and more pressure-pumping fleets enter the market. 

Oklahoma Teachers Just Purged the Statehouse of Their Enemies -- For nearly a decade, Republican officials have been treating ordinary Oklahomans like the colonial subjects of an extractive empire. On Governor Mary Fallin’s watch, fracking companies have turned the Sooner State into the earthquake capital of the world; (literally) dictated policy to her attorney general; and strong-armed legislators into giving them a $470 million tax break — in a year when Oklahoma faced a $1.3 billion budget shortfall.To protect Harold Hamm’s god-given right to pay infinitesimal tax rates on his gas profits (while externalizing the environmental costs of fracking onto Oklahoma taxpayers), tea party Republicans raided the state’s rainy-day funds, and strip-mined its public-school system. Between 2008 and 2015, Oklahoma’s slashed its per-student education spending by 23.6 percent, more than any other state in the country. Some rural school districts were forced to adopt four-day weeks; others struggled to find competent teachers, as the GOP’s refusal to pay competitive salaries chased talented educators across the border into Texas. Students who were lucky enough to have both five-day weeks and qualified instructors still had to tolerate decaying textbooks. Polls showed overwhelming public support for raising taxes on the wealthy and oil companies to increase investment in education. GOP lawmakers showed no interest in those polls.   But then, Oklahoma teachers decided to give their state a civics lesson. Inspired by their counterparts in West Virginia, Oklahoma teachers went on strike to demand long-overdue raises for themselves, more education funding for their students, and much higher taxes on the wealthy and energy companies — to ensure that those first two demands would be honored indefinitely.  They won one out of three. Despite the fact the teachers had no legal right to strike — and that the Oklahoma state legislature requires a three-fourths majority to pass tax increases of any kind — the teachers galvanized enough public support to force Fallin to give an inch. As energy billionaire (and GOP mega-donor) Harold Hamm glowered from the gallery, Oklahoma state lawmakers passed a tiny increase in the tax on fracking production (one small enough to leave Oklahoma with the lowest such tax rate in the nation), so as to fund $6,100 raises for the state’s teachers. The strikers were pleased, but unappeased. They promised to make lawmakers pay for refusing to finance broader investments in education with larger tax hikes.  Last night, Oklahoma’s GOP primary season came to an end — and the teachers beat the billionaires in a rout. Nineteen Republicans voted against raising taxes to increase teacher pay last spring; only four will be on the ballot this November.

Fracking can cause earthquakes up to 10 km away - Assessing how far from a well earthquakes might occur has practical consequences for regulation and management. At first glance, one might expect that the most likely place for wastewater disposal to trigger an earthquake is at the site of the injection well, but this is not necessarily true. Since the 1970s, scientists and engineers have understood that injecting water directly into faults can jack the faults open, making it easier for them to slide in an earthquake. More recently it has become clear that water injection can also cause earthquakes in other ways. For example, water injected underground can create pressure that deforms the surrounding rock and pushes faults toward slipping in earthquakes. This effect is called poroelasticity. Because water does not need to be injected directly into the fault to generate earthquakes via poroelasticity, it can trigger them far away from the injection well.Deep disposal wells are typically less than a foot in diameter, so the chance of any individual well intersecting a fault that is ready to have an earthquake is quite small. But at greater distances from the well, the number of faults that are affected rises, increasing the chance of encountering a fault that can be triggered.  Of course, the pressure that a well exerts also decreases with distance. There is a trade-off between decreasing effects from the well and increasing chances of triggering a fault. As a result, it is not obvious how far earthquakes may occur from injection wells.To assess this question, we examined sites around around the world that were well-isolated from other injection sites, so that earthquakes could clearly be associated with a specific well and project. We focused on around 20 sites that had publicly accessible, high-quality data, including accurate earthquake locations.We found that these sites fell into two categories, depending on the injection strategy used. For context, oil and gas deposits form in basins. As layers of sediments gradually accumulate, any organic materials trapped in these layers are compressed, heated and eventually converted into fossil fuels. Energy companies may inject wastewater either into the sedimentary rocks that fill oil and gas basins, or into older, harder underlying basement rock.

Idle oil, gas wells threaten Indian tribes while energy companies, regulators do little -- An estimated 3.5 million oil and gas wells have been drilled throughout North America. No federal agency or national organization chronicles exactly how many of these are, like those in the Chuska Mountains, in purgatory: They are no longer producing oil and gas but for various reasons they have yet to be shut down, a process that involves cementing in the well bore, clearing off equipment, cleaning up any pollution in the soil or water and grading and seeding the land to resemble what it once was. How many of these idle wells pockmark lands owned by tribes and tribal members isn’t well documented. A 2015 Government Accountability Office report found that the inventory of oil and gas wells on tribal lands is incomplete. In the San Juan Basin, an oil and gas field that extends eastward from Red Valley and includes parts of the Ute Mountain Ute, Southern Ute, Jicarilla Apache and Navajo reservations, a back of the envelope calculation concludes there are certainly more than 500 and possibly several thousand inactive oil and gas wells[1]. (These wells have a lot of different legal definitions – abandoned, temporarily abandoned, orphaned, shut-in, lost. They can also be designated as producing but, like the wells near the Benallys’ cabin, have not been active for months or years. For simplicity’s sake, this article will refer to all such wells as inactive or idle.)

Oil's Next Hotspot: The Cowboy State -- As the crude powerhouse that is Texas’ Permian Basin becomes old news, oil explorers are looking for the next big thing--and they have found it in the more-than 4000 feet of stacked pay in Wyoming’s Powder River Basin. In Powder River, Big Oil has found less-congested pipelines, cheaper land, and more importantly, a whole lot of oil.  It’s not the first time that the Powder River Basin has garnered industry attention. In 2014, when oil prices were soaring, many industry players were already eyeing the basin as the next big thing, but when oil prices waned in the following years many drilling plans in Powder River were abandoned for established operations. Now, as United States crude prices ballooned by nearly 50 percent over the last year, there has been a renewed rush for land deals in oil rich areas, and the Powder River Basin is no exception. Although the deals are largely undisclosed, we know that there have been a number of deals in Wyoming, bringing industry-wide interest to the conventional and shale formations found there.  In the last month the state of Wyoming has seen Oklahoma-based firm Rebellion Energy pay more than $100 million for 19,000 acres, Vermilion Energy spend $150 million for 55,000 acres, and Navigation Powder River LLC spend about $10 million for 3,000 acres. Not bad for a month’s work.Another potential catalyst for growth in Wyoming oil is currently underway just south in neighboring Colorado, where votes will decide on November 6th whether to further limit the drilling of oil by increasing the buffer zone between dwellings and oil and gas wells to 2,500 feet. If the Colorado electorate votes to increase the buffer, drilling will become impossible in much of the state, a development that with almost certainly push even more investors over the state line into Wyoming, where the laws are friendlier to oil and gas extractors. To highlight this fact, Wyoming gubernatorial candidates were tripping over each other to proclaim their love for fossil fuels, the state’s major jobs creator, in the run-up to the August 21st election, and winner Mark Gordon is strongly backed by Peter Wold of Wold Oil Properties, a prominent figure in Wyoming oil.

Trump admin rejects environmental concerns over Dakota Access pipeline | TheHill: The Trump administration cleared the Dakota Access oil pipeline on Friday, saying that further environmental review didn’t bring up any new concerns. The Army Corps of Engineers said it completed the new analysis more than a year after a court ordered the review after American Indian tribes and environmentalists sued to shut the project down. The agency, which was responsible for approving the pipeline’s crossing of various waterways, quoted on Friday Washington, D.C., federal Judge James Boasberg’s June 2017 ruling that ordered the review. Army Corps of Engineers said it completed an “analysis of available information and considered materials in the administrative record and has fully considered ‘the impacts of an oil spill on fishing rights, hunting rights, or environmental justice, or the degree to which the pipeline's effects are likely to be highly controversial.’”“The Corps’ review on remand did not reveal ‘significant new circumstance[s] or information relevant to environmental concerns,’” the agency said, quoting from the statute for environmental reviews. Boasberg’s decision last year was a victory for opponents of Dakota Access, a project that the Obama administration had tried to hold up amid high-profile protests, including the creation of a protest camp near North Dakota’s Standing Rock Indian Reservation that was used for months. President Trump directed the Army Corps to issue the pipeline’s final permits shortly after taking office in January 2017. While Boasberg did not order the pipeline — which had started operation by that point — to shut down, his ruling nonetheless opened the door to a potential shutdown or changes to its operation. But Friday’s filing, for the time being, puts that possibility to rest. 

ACLU: Government plotted to surveil, disrupt Keystone XL protesters | TheHill: Members of the American Civil Liberties Union (ACLU) and its Montana affiliate are suing the Departments of Defense, Homeland Security, Interior and Justice, seeking proof of what the groups allege is a plot to surveil and potentially hamper people trying to protest the Keystone XL pipeline. The ACLU says it uncovered documents showing “substantial evidence of federal preventative measures against Keystone XL protests, such as a Department of Justice [DOJ] ‘anti-terrorism’ training in Fort Harrison, Montana, and a DOJ ‘Social Networking and Cyber Awareness’ training in the town of Circle, Montana,” according to the ACLU’s announcement of the suit.The documents also allegedly show “discussions between federal officials about the creation of an ‘interagency team’ to ‘deal with safety and security concerns related to the Keystone XL project.’” “Evidence that the federal government plans to treat Keystone XL protests with counterterrorism tactics, coupled with the recent memory of excessive uses of force and surveillance at the Standing Rock protests, raises immense concerns about the safety of indigenous and environmental protesters who seek to exercise their First Amendment rights,” wrote Jacob Hutt, the lawyer who filed the ACLU’s first request for documents, about the suit. The original 2016 demonstrations against the Keystone XL pipeline ended in violent clashes between law enforcement and protesters. The two groups clashed in October of that year when activists confronted construction crews, according to The Wall Street Journal. A law enforcement spokeswoman said four private security guards and two guard dogs were injured in the fray. A spokesman for the Standing Rock Sioux said protesters reported that security dogs bit six people, including a young child, and that 30 people were pepper-sprayed. A law enforcement spokeswoman said the authorities had not received any reports of protesters being injured. 

SLO County map shows fracking could occur at Morro Rock - A new map released by a Central Coast environmental watchdog group shows areas in San Luis Obispo County that the Bureau of Land Management could open for fracking — including Morro Rock and a portion of Montaña de Oro State Park.  Los Padres ForestWatch — a Santa Barbara-based organization focused on protecting public lands — on Tuesday released an interactive map showing 273,000 acres of federal land and mineral holdings in San Luis Obispo, Santa Barbara and Ventura counties. The Bureau of Land Management (BLM), part of the U.S. Department of the Interior, is required to evaluate the environmental impacts of fracking on this land as part of a settlement reached after a 2015 lawsuit. !ForestWatch and the Center for Biological Diversity filed the suit after the BLM developed a Resource Management Plan for the Bakersfield Field Office region — which includes San Luis Obispo County — in 2014.The organizations wanted BLM to look more deeply into the impacts of hydraulic fracturing, commonly known as fracking, which involves injecting liquid into the ground to extract oil or gas.The lawsuit settlement requires the BLM to study federal holdings and prepare an environmental impact statement that will serve as a supplement to the 2014 Resource Management Plan. The agency also cannot lease any new land until the study is finished.According to a recent Sacramento Bee story, the BLM hasn’t issued new energy leases in California since 2013, when a federal judge ruled the agency violated environmental laws after it opened oil leases in Monterey County without studying fracking. San Luis Obispo County voters in November will consider a ballot measure banning new fracking in the region, but that would not apply to federally owned land.

Halliburton CEO Cites Lack of ‘Customer Urgency’ in North America; 3Q Outlook Cut - U.S. onshore well completions expert Keane Group Inc. joined Halliburton Co. this week in reducing third quarter forecasts on less demand than anticipated, with customer drilling efficiencies beginning to level off.The oilfield services (OFS) operators, both based in Houston, each acknowledged at the Barclays CEO Energy-Power Brokers Conference in New York City that activity has been lower than predicted in 3Q2018. Halliburton CEO Jeff Miller presented at the conference, while Keane’s management team provided its outlook to investors.Miller, who leads the No. 1 pressure pumping provider in North America, said the macro supply and demand outlook “is the best it has been in four years...Global demand for hydrocarbons is solid,” with the International Monetary Fund’s global gross domestic product growth outlook at 3.9% for 2019.However, he repeated what he said during a second quarter conference call about near-term issues impacting North America, which include a shortage of pipeline takeaway capacity, particularly in the Permian Basin, along with rising inflation, labor shortages and logistics issues to get equipment where it needs to be.The short-term has challenges, Miller said. “For example, regarding pipeline takeaway in the Permian Basin, some operators will reallocate capital to other basins, some will slow down, others will build DUCs,” aka drilled but uncompleted wells. In Appalachia, producers exhausted their 2018 budgets early, “followed by a reevaluation...Some customers are choosing to do more work while others decided to stop or slow down.”

Fracking As The Next Financial Meltdown (Or Not) - Two new books attack fracking from different perspectives, Amity and Prosperity by Eliza Griswold and Saudi America:  The Truth about Fracking and how it’s Changing America by Bethany MacLean. The first discusses the health and environmental problems in a small town where fracking is being done, the latter argues that “Fracking is such a fragile industry that it is not hard to make it go bust.” (I have ordered but not read both books, and am basing this on two book reviews of the former and an opinion piece written by the author of the latter.) The first book appears to do little more than relate specific instances of contamination and health problems, apparently taking a human approach rather than an epidemiological one. Possibly it does more than that, but the table of contents doesn’t show a list of figures or tables with graphs. I have no doubt that the family’s travails described in the book are real, but it is not clear (at this point) if the author has proven their causes nor shown their broader relevance. Any number of books can be written about the horrors of living near a pig farm, a daycare center, or a cookie factory, but until I read this, I can’t say if this goes beyond that level of rational analysis. Stay tuned. The second book, by Bethany McLean needs to be taken seriously, given the author’s track record of exposing the Enron scandal. One would like to think that it is much more analytical, but since it hasn’t been published yet (although Amazon says it’s a bestseller!  Kudos), that can’t be judged. On the other hand, the arguments made in herSunday NYT piece give me cause for concern. Without a doubt, large amounts of money was poured into the shale industry, a good portion of it without due diligence. However, I have several times listened to financial analysts argue, in the most extreme case, that not a single fracked well is profitable, while industry executives counter that their profits are very large.

United States Sells 11M Oil Barrels to ExxonMobil, Others --The United States intends to release 11 million barrels of oil from its Strategic Petroleum Reserve of 660 million barrels, following a regular draw-down schedule devised to generate funds for government programs. The sour crude is expected to reach the market in October and November, after being sold as a fund generator for a drug program. The oil will be supplied from sites in West Hackberry, LA and Bryan Mound and Big Hill, TX.With the target of reducing budget deficit, President Trump proposed the sale of half of the Strategic Petroleum Reserve. So far, the Congress has authorized the sale of about 240 million barrels of oil during 2017-2027. Several energy companies bought the oil from the U.S. Department of Energy’s (DOE) Office of Fossil Energy following the notice provided at August-end. The largest publicly traded energy company, Exxon Mobil Corporation XOM bought around 3.3 million barrels of oil from the stockpile. Motiva Enterprises LLC of Saudi Arabia bought 2.4 million barrels, while downstream energy company Phillips 66 PSX bought more than 2 million barrels. Royal Dutch Shell plc RDS.A bought crude of almost 1.6 million barrels from the stockpile and Marathon Petroleum Corporation MPC purchased nearly 1.4 millions. Currently Marathon Petroleum has a Zacks Rank #2 (Buy). Also, Valero Energy Corporation VLO agreed to purchase 330 thousand barrels of crude. The selling price of the crude was in the range of $67.66-$69.05 per barrel. Although the recent sale of crude from the stockpile is not enough to reduce the negative effect on oil supply in the international oil market, it can definitely ease the tightness of the same to some extent. Per analysts at ClearView Energy Partners, the timing of the crude sale indicates the concern of President Donald Trump related to the oil market. More such decisions from the Trump administration will help to maintain the smooth supply of oil. The President can release up to 30 million barrels of oil during emergency periods.

Oil spill reported on the Onion Lake Cree Nation -  An oil spill has been reported in a community some 40 kilometers north of Lloydminister. On Aug. 26, an oil release at a well on the Onion Lake Cree Nation was reported by BlackPearl Resources. A brief statement from Jim Billington, the director of communications for the SaskParty noted officials from the Ministry of Energy and Resources were on hand monitoring the situation. The statement indicated no bodies of water were affected by the release and no injuries were reported in the incident. BlackPearl Resources responded to paNOW's request for comment Sept. 4. In a statement it said 12 cubic meters of spill oil and fresh water spilled at a wellsite located within its Onion Lake Heavy Oil Project and spill response procedures were followed successfully. The amount is the equivalent of over 3,000 gallons. The statement added no waterbodies, streams, or marshy areas were impacted and clean up of oil stained soil and vegetation is complete and was disposed of at a third party waste handling facility. The company laid the blame for the spill as "improper procedures" and noted "our operational procedures have been updated to prevent this from re-occurring."

 Mr. Trump, NAFTA 2.0 Must Promote Natural Gas Trade With Canada – Forbes - Any new U.S. trade deal with Canada must build upon the great energy partnership that we already have.  Most Americans probably don't realize that although U.S. natural gas production has surged almost 40% since our shale revolution took flight in 2008, we still import a lot of gas from Canada. Today, we get about 8.1 Bcf/d of piped gas from our northern neighbor. The main importing points of entry are in the West and Midwest: Idaho (26%), Montana (18%), North Dakota (17%), Minnesota (16%), and Washington (14%) taking in over 90% of all volumes last year. These areas sit remote from our shale sites, namely Texas and Appalachia that produce over 60% of U.S. gas. Taking in low cost gas from Canada makes economic sense and is obviously no threat to U.S. energy security.In fact, Canada is our largest energy partner, with energy constituting 20% of all trade that we get from Canada. We are a net energy importer from Canada. In recent years, the value of U.S. energy imports from Canada have been in the $50 to $60 billion range, well above the $15 billion value of U.S. energy exports to Canada. Canada supplies over 10% of our gas and 20% of the crude oil that we use.But, let me focus on natural gas in particular, the most vital source of new energy supply here and around the world. Our total gas imports from Canada are valued at about $6 billion. Producing 17 Bcf/d (which is more than Pennsylvania does), Canada is fourth globally in total gas production, above China and even LNG leader Qatar, behind only the U.S., Russia, and Iran. As for U.S. gas to Canada, our exports average over 2 Bcf/d, mainly going from Michigan and New York into the eastern provinces. Taking Appalachian gas from the Marcellus and Utica shale plays, the Rover(3.25 Bcf/d capacity) and Nexus (1.5 Bcf/d capacity) pipelines will be shipping more gas up through eastern Michigan into Canada's Dawn Hub in Ontario.  It's looking forward where the importance of Canada's energy becomes crystal clear. Canada has nearly unlimited oil and gas deposits, and importing nations around the world are seeking out the country to supply. That's mostly because Canada has a slow growing population and a mature energy demand market so incremental domestic needs are quite low. The expanding capacity to export is perhaps Canada's greatest energy advantage.

Kinder Morgan Completes Sale of Trans Mountain Project - Kinder Morgan Canada Limited, a subsidiary of Kinder Morgan, Inc KMI, announced that the Trans Mountain Pipeline system and the Trans Mountain Expansion Project have been indirectly purchased by the Government of Canada. The transaction was completed through Trans Mountain Corporation, a subsidiary of the Canada Development Investment Corporation. The total purchase consideration was $4.5 billion in cash. A final decision related to the utilization of the after-tax net proceeds of the transaction is expected to be announced after market close on Sep 4, 2018, once the board of Kinder Morgan Canada concludes ongoing negotiations. With respect to the closing, Kinder Morgan Canada also swapped existing $500-million secured revolving credit facility with a period of four years with a new $500-million unsecured revolving credit facility for working capital purposes. The Trans Mountain Pipeline system, which is intended to nearly triple the transportation capacity to carry crude from Alberta's oil sands to a facility in the Pacific province of British Columbia, is struggling with approval issues and oppositions from various groups. The Government of Canada approved the Trans Mountain expansion project on Nov 29, 2016. The pipeline expansion has been facing antagonism from various provincial governments of British Columbia as well as municipalities, native groups and environmental activists. These emphasize the uncertainty over the key energy projects in Canada. The shortage of pipelines and rail transportations has disrupted the production schedule of the companies in Western Canada. The companies had to slow activities due to obstruction in crude transportation. In view of this, Alberta's provincial government supports the project that has also received approval from Canada's federal government. 

Trans Mountain Pipeline a Serious Misstep for Trudeau - Jerri-Lynn here:  As Bloomberg reported last week, in Nafta Crunch Caps a Pretty Dreadful Week for Justin Trudeau: This has not been a good week for Justin Trudeau. It began with a surprise U.S.-Mexico trade pact that excluded Canada from a Nafta rewrite, sending the prime minister’s negotiating team scrambling to strike a deal ahead of the Trump administration’s deadline. Then a key pipeline he spent billions to nationalize got sideswiped by a court decision, and the most important ally in his climate change plan abandoned him. And now the White House has informed Congress of its intent to sign an new agreement with or without the northern nation.  As this post spells out, Trudeau has received his well-deserved comeuppance for attempting to “play politics in a very ham-fisted way” on the Trans Mountain pipeline issue. What now follows? To highlight what Grandia says below:Regardless of the election outcome, Trudeau missed an opportunity to be the leader many of us desperately wanted him to be.Sound familiar? (For further background on this issue, see this previous Kevin Grandia cross-post, Canada Oil Pipeline: Trudeau Just Knocked Over the First Domino.) In a serious blow to Kinder Morgan’s Trans Mountain pipeline project, Canada’s federal court of appeal ruled today that the pipeline cannot proceed with construction due to a lack of consultation with First Nations.In their ruling, the court stated that the Canadian National Energy Board’s [NEB], “process and findings were so flawed that the Governor in Council could not reasonably rely on the Board’s report; second, Canada failed to fulfil the duty to consult owed to Indigenous peoples.”What appears at the heart of the decision is that while Kinder Morgan undertook consultation with concerned communities, the consultations did not lead to any real meaningful changes in the plan. In other words, First Nations leaders felt they were paid lip service over their concerns raised about important issues like how risks to our freshwater aquifers would be mitigated in the case of a spill.At a press conference held after the decision, Coldwater Band Chief Lee Spahan said that, “they [the NEB] can say they consulted but they never ever ever got our consent. Our fight is about our aquifer, the very importance of water.”Just 30 minutes after the court ruling was announced, Kinder Morgan Canada shareholders voted 99.98% in favor of approving the sale of the Trans Mountain pipeline to the Canadian government.  This is a move that will no doubt be heavily scrutinized in the days that follow. But even more scrutiny will be heaped on Prime Minister Justin Trudeau, who turned what was a longstanding controversy in Canada into a complete and utter quagmire.

Trans Mountain Expansion Kerfuffle Frustrating Trudeau, Alberta Premier - Canadian Prime Minister Justin Trudeau failed Wednesday to revive a pipeline construction alliance with Alberta that the province’s government shelved after a court verdict last week sided with native protesters to halt the Trans Mountain Expansion Project (TMEP).During Edmonton meetings, Alberta Premier Rachel Notley voiced frustration and held back from restoring support to Trudeau. In their discarded bargain she endorsed his environmental agenda in exchange for federal approval of the overseas export project.“We absolutely cannot be held hostage to a regulatory merry-go-round that never ends,” she said. After a meeting behind closed doors with Trudeau, she let her annoyance show by giving only a two-word comment when asked how it went: “It was.” The Canadian government’s decision to buy the pipeline was completed last week even after a unanimous ruling by a federal appeals court, which concluded that the government’s review was flawed and said Indigenous groups had not been adequately consulted. The C$4.5 billion ($3.6 billion) deal closed last Friday (Aug. 31) and on Tuesday, Kinder Morgan Inc. (KMI) announced that its share of the proceeds, valued at about US$2 billion, would be used to pay down debt. The remaining assets for Kinder Morgan Canada Ltd. (KML), which are underpinned by multi-year take-or-pay contracts, include the Edmonton terminals, the Cochin Pipeline and the Vancouver Wharves terminal. Edmonton is expanding the Base Line Terminal, which is ahead of schedule and under budget, according to Kean. The expansion is expected online in 2019.

Mexican energy sector likely to ride out AMLO's shale ban – Axios - Mexican President-elect Andrés Manuel López Obrador (AMLO) proposed a ban on fracking last month, which would prevent the country from tapping its potentially vast shale resources. Despite Mexico's rising natural gas demand and increasing dependence on natural gas imports, the country's shale reserves so far have not figured into its energy reform.  While a shale ban might have long-term effects on Mexico's economy, it's unlikely to do so during AMLO's term, which is limited to six years. Because of structural barriers to shale extraction that would nevertheless persist in that timespan, even a complete ban on fracking wouldn't significantly impact the Mexican energy sector.  Mexico’s declining oil and natural gas production has motivated comprehensive energy reform that opened the oil and gas sectors to private investment. Though not without challenges, the reform promises to lift hydrocarbon production, mostly in the form of offshore crude oil. Despite past criticism of the reform, AMLO has hasnow seemingly come to accept its necessity. In Mexico several factors hinder a rapid success akin to that of the U.S. shale revolution:

  1. Mineral rights are owned by the state, reducing the likelihood that potential landowners will accept disruption to their property.
  2. The lack of well-developed private oil, gas and service sectors precludes shale production's high-intensity drilling.
  3. The lack of pipeline and road infrastructure, as well as worker housing and facilities, makes it difficult to tap shale resources located in sparsely populated and underdeveloped areas.
  4. Equipment, supplies, transport security and personnel concerns related to drug cartel activity and violence are likely to impede the development and make it more costly — as will the aridity of the areas where shale is located.

Given the prospects for crude production offshore, a shale ban would not hurt Mexico’s crude market. But a long-term ban on shale development — however slowly it might otherwise occur — would eventually impact Mexico's natural gas market, making the country increasingly dependent on imports. Most of those supplies would likely come from U.S. shale companies propped up by a large market at its Southern border.

Venezuela Oil Price Jumps for Second Week: -- The price Venezuela receives for its mix of medium and heavy oil rose for a second consecutive week during the week ending August 31. According to figures released by the Venezuela Ministry of Petroleum and Mining, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending August 31 rose to $68.80, up $2.85 from the previous week's $65.95. WTI in New York averaged $69.18 -- up $2.10 -- for the week, while Brent crude traded in London averaged $76.58 -- up $3.34 from the previous week. According to Venezuelan government figures, the average price in 2018 for Venezuela's mix of heavy and medium crude for 2018 which Caracas now prices in Chinese Yuan is now $60.45. Venezuela's average oil price for 2017 was $46.66, up from 2016's $35.15. It is higher than 2015's $44.65 but lower than 2014's $88.42, 2013's $98.08, 2012's $103.42 and 2011's $101.06, 2010's $72.43. The 2009 average was $57.01. In 2017, WTI averaged $50.88 -- up from 2016's $43.32 -- while Brent averaged $54.73 -- up from 2016's $44.98. Historically, Venezuela's basket set its highest weekly average ever on July 18, 2008, when it hit $126.46 before economies around the world began crashing under the weight of expensive oil. The recent low was set January 22, 2016, when Venezuela's basket averaged just $21.63. The United States is the largest importer of Venezuela’s oil exports.

The Collapse Of Venezuela’s Imaginary Oil Currency -- Earlier this year, Venezuelan President Nicolas Maduro rolled out his latest scheme to rescue his economy, offer an alternative to the increasingly worthless bolivar, and skirt U.S. sanctions on financial transactions. But Maduro’s cryptocurrency, supposedly backed by Venezuela’s oil reserves, is a very hollow promise.To be sure, few analysts expected much from the “petro,” Maduro’s hastily launched cryptocurrency. One petro was supposed to be backed by one barrel of oil, and the vast reserves of oil located in a specific part of Venezuela were promised as a backstop for the new cryptocurrency. It was always an odd scheme. After all, what makes the petro any different from the bolivar, Venezuela’s official currency? Isn’t the value of and faith in the bolivar also effectively backed by the country’s oil wealth?Well, the bolivar is worthless, and Maduro wanted to start anew. Maduro thought the petro would help the government avoid the reach of U.S. sanctions, at least in theory. But the new cryptocurrency has unsurprisingly failed to catch on.The petro is supposed to be backed by 5 billion barrels of oil located in Atapirire, a small town in Venezuela’s remote savanna in the middle of the country. Reserves in this region are the lynchpin of the petro, and as such, they are intended to underwrite the regime’s plan for economic recovery.But as Reuters details in a special report, the region is not only lacking in oil production, but there is no visible effort at developing oil in this area at all. The only evidence of an oil presence were old rigs that have clearly been inoperable for a long time, as they are rusted out and covered in weeds. “There is no sign of that petro here,” a local resident told Reuters. Worse, the town suffers from blackouts, hunger, poverty and decrepit infrastructure, an increasingly common plight for the country on the whole. More broadly, there is “little evidence of a thriving petro trade,” Reuters correspondent Brian Ellsworth concluded, after interviewing dozens of cryptocurrency experts over a period of months. Maduro says that the sale of the petro have translated into $3.3 billion in funds for the government, a claim that is suspect, to say the least.

Colombian Oil Company Tries to Contain an Oil Spill After Blasting Oil Pipeline - State-owned Empresa Colombiana de Petróleos (Ecopetrol) was trying to contain the oil spill caused by the blast on Tuesday of a section of the Caño Limón Coveñas pipeline in the rural area of Teorama (northeast).“We have activated the contingency plan after the attack in the rural area of Teorama (Norte de Santander) after the attack by groups outside the law,” Ecopetrol said in a statement.A crew of 45 workers was working on the site to contain the spill that has contaminated the La Llana creek and the Catatumbo river.On the night of September 4, the municipal administration ordered the evacuation of the neighbouring residents, but in the morning they were allowed to return to their homes, although Ecopetrol maintains the prohibition of lighting kitchens, bonfires, cigarettes or similar near the place of the oil spill. “In Ecopetrol, we reiterate the rejection of any illicit activity that puts the lives of the communities at risk and negatively impacts the environment; thus, we work for the environmental restoration in the La Llana creek and in the Catatumbo river, “the oil company said in its Twitter account. The company did not identify the name of the illegal group that committed the sabotage, but the police blamed the guerrilla of the National Liberation Army (ELN), which has a presence in the area. “This fact is attributed to the members of the ELN, who commit crimes in this sector of the Catatumbo,” said Colonel George Quintero, commander of the police in Norte de Santander, according to statements published by the newspaper El Tiempo.  The official said that about 30 families have been affected by the pollution of the tributaries.

UK Councils Invest Billions in Fracking, Including Companies Tied to Donald Trump - DeSmog (blog) -- Council pension funds across the UK have invested billions in companies involved with fracking, new data claims. Authorities in areas where the controversial practice is set to take place also have millions invested such companies.Some of the funds also have investments in companies with close ties to members of President Trump’s administration, which is currently embarking on a major climate and environmental regulation roll-back. New data from campaign groups Platform,, and Friends of the Earth claims council pension funds across the UK collectively have over £9 billion in companies involved with fracking.  Dumfries and Galloway council’s pension fund has the largest portion of its investments in companies involved with fracking, with almost seven percent invested, according to the data.  Greater Manchester council’s fund has £989 million invested in fracking activities - the largest overall investment, and second largest by proportion of its fund. Lancashire County Council, home to the UK’s only functioning fracking site at Preston New Road, has £186 million invested in fracking activities through its pension fund, according to the data. After tremors were felt during testing at the site in 2012, an 18-month moratorium was placed on fracking across the UK. Cuadrilla Resources has been subject to daily protests since it restarted operations in 2017.  Third Energy has a controversial fracking site at Kirby Misperton in North Yorkshire, while the council’s fund has £81 million invested in other companies fracking across the world.  West Sussex’s fund has £119 million invested in companies with fracking activities. The county is home to the controversial Balcombe site, which Cuadrilla Resources tried and failed to frack in 2013. The company was given the go-ahead to restart testing at the site in January 2018, despite opposition from the local community.

Nord Stream 2 Pipeline On Track Despite Sanction Risk, Operator Says (Reuters) - The Nord Stream 2 pipeline to transport Russian gas to Germany is progressing on schedule, its operator said on Friday, with European investors still committed to the project despite criticism from the United States and the threat of sanctions. In July, Washington repeated a warning to Western firms invested in the pipeline that they were at risk of sanctions, saying Moscow was using the project to divide Europe. Berlin and Moscow have been at odds since Russia annexed Crimea four years ago, but they have a common interest in the Nord Stream 2 project. The pipeline will allow Russia to bypass Ukraine, where its gas giant Gazprom has faced past disruptions. Disputes between Gazprom and Ukraine, a key Russian gas export route, over gas prices and transit fees have resulted in a number of supply stoppages to Europe in the past decade. "The project is progressing according to schedule," Nord Stream 2 AG, the Swiss-based project's operating company, told Reuters in an emailed statement. Gas is due to start flowing at the end of 2019 to bypass routes through Ukraine. Nord Stream 2 AG, which will double the existing Nord Stream 1 capacity from a current 55 billion cubic metres of gas a year, is owned by Gazprom, which is taking on half of the planned costs of 9.5 billion euros ($11 billion). The rest is divided between five European energy companies - Germany's Uniper and Wintershall, Anglo- Dutch group Royal Dutch Shell, France's Engie and Austria's OMV. By the end of June, 4.8 billion euros had already been invested in the 1,200-kilometre (746 miles) pipeline project, and pipelaying in the Baltic Sea started in July. "Uniper will remain one of the financing partners of this project and we are - as before - fully committed to the project," Uniper's Chief Financial Officer Christopher Delbrueck said in a statement this week. "We will continue to adhere to our contractual obligations to Nord Stream 2." 

German refinery explosion: Eight injured and 1,800 evacuated-- An explosion and fire at an oil refinery in southern Germany has injured eight people, officials say. The incident at the refinery near Ingolstadt, which is about 80km (50 miles) north of Munich, happened at 05:30 local time (03:30 GMT). Hundreds of firefighters are at the scene, and a police statement said there was "a risk of more explosions". Authorities ordered 1,800 residents to evacuate their homes, but local media report they are now able to return. Images and video shared on social media show a major fire and huge plumes of smoke billowing into the air. Image copyright Reuters / Twitter @I_LECTRON Image caption The explosion is said to have been felt within a radius of several kilometres Image copyright AFP Image caption Hundreds of firefighters have been deployed to the site The cause of the explosion, which was reportedly felt within a radius of several kilometres, is not yet known. In a statement, police said three of the victims had suffered "medium or serious injuries". They added that work to extinguish the flames was continuing. Residents within a 20km radius of the site have been advised to keep their doors and windows closed because of the smoke. The refinery is owned by the Bayernoil group, which employs nearly 800 people across two sites in the region.

Transocean Banks on Ultra-Deepwater Recovery with Ocean Rig Deal - Transocean Ltd. and Ocean Rig UDW Inc. have struck a definitive agreement under which the former will acquire the latter in a cash and stock transaction valued at approximately $2.7 billion, inclusive of Ocean Rig’s net debt, Transocean announced Tuesday.“The proposed acquisition of Ocean Rig provides us with a unique opportunity to continue enhancing our fleet of ultra-deepwater and harsh environment floaters, without compromising our liquidity or overall balance sheet flexibility,” Jeremy Thigpen, Transocean’s president and CEO, said in a written statement announcing the proposed merger. “The combination of constructive and stable oil prices over the last several quarters, streamlined offshore project costs and undeniable reserve replacement challenges has driven a material increase in offshore contracting activity.” Along those lines, adding Ocean Rig’s assets will augment Transocean’s fleet of ultra-deepwater drillships “and better position us to capitalize on what, we believe, is an imminent recovery in the ultra-deepwater market,” Thigpen noted.According to Transocean, Ocean Rig’s fleet includes:

  • Nine high-specification ultra-deepwater drillships
  • Two harsh environment semisubmersibles
  • Two high-specification ultra-deepwater drillships under construction

Transocean’s website states that its existing fleet includes:

  • 24 ultra-deepwater rigs
  • 12 harsh-environment semisubmersibles
  • Two deepwater semisubmersibles
  • Five midwater semisubmersible floaters

North Sea assets up for sale top $8.8bn - Billions of dollars worth of assets are up for sale in the North Sea as some of the world’s largest oil and gas companies scale back their presence in the region and smaller ones come to the fore. Majors including BP and Royal Dutch Shell are still keeping their positions in key areas such as the west of Shetlands but for most of them, the central North Sea is less core. There has been considerable deal activity in the region over the past two years as an influx of private equity money sparked a new momentum. Companies such as Chrysaor, Siccar Point and Neptune Energy have emerged. Wood Mackenzie said equity commitments of $10bn have helped fuel $12bn of M&A in the North Sea since 2014. “A new independent sector is emerging,” said Philip Lambert of Lambert Energy Advisory. “The existing companies are getting bigger and there is blue-chip private equity money coming in from around the world.”

Offshore oil production shows signs of turnaround -- Offshore oil production is showing signs of a turnaround as crude prices rise and operations become more efficient, giving energy compaies in Houston and elsewhere the confidence to resume deepwater projects stalled during the oil bust. The sector’s recovery, which has lagged the broader industry rebound, is concentrated in regions including Scandinavia, West Africa, Southeast Asia and Latin America, where new discoveries and lower costs of of production have piqued the interest of companies looking to make money outside of shale, according to a recent analysis by research firm IHS Markit. “This the last stage of the recovery,” said Patrick Jankowski, senior economist with the Greater Houston Partnership. “When you start to see activity in this sector, you know the bust is over.”

Outages At Norwegian Gas Fields To Cut Supply Up To Four Weeks -  Unplanned works on fields and systems pumping Norwegian gas to other European countries will reduce Norway’s outbound gas flows for up to four weeks, which, according to traders, will further boost natural gas prices in Europe. According to Norwegian gas operator Gassco, two unplanned events are currently reducing day-ahead and within-day supplies and may continue to do so for up to four weeks.On Sunday, an outage affecting the fields delivering gas into the SEGAL pipeline system occurred, and according to Gassco data as of Monday morning local time, unplanned corrective maintenance on fields delivering into the SEGAL system will reduce gas availability by 5.8 million cubic meters for a period of between one and two weeks.This outage adds to an outage at the Åsgard field, where a compressor failure requires unplanned works and flows would be reduced by 8.6 million cu m for between three and four weeks.Prices at the Dutch TTF gas hub have been moving up on the news of the outage, a European gas trader told S&P Global Platts on Monday.In the UK, wholesale gas prices rose slightly on Friday, with the Norwegian outage at Åsgard contributing to the rise along with rising exports and withdrawals from storage. Prices further rose on Monday morning UK time, as planned maintenance at some UK sites and unplanned outages at others combined to push prices up.This summer, natural gas prices in the UK surged to the highest for a summer season, with Europe’s natural gas market the most bullish in years as higher-than-expected summer demand and a tighter market drive natural gas price futures to levels last seen during this past winter’s supply crunch. The past winter season in Europe was one of the coldest this decade, sending gas demand soaring and the level of natural gas stored in tanks across Europe dropping to below average levels.

Denmark Becomes Net Oil Importer For First Time In 25 Years - For the first time since 1993, Denmark is on track to become a net oil importer this year, as oil production in the Danish part of the North Sea will be lower than the country’s consumption, the Danish Energy Agency said on Thursday, revising down its oil production forecasts. The new forecast by the agency is a change from last year’s assessment and forecasts, which had expected that Denmark would continue to be a net oil exporter for a number of years, the agency said.Now, the country is expected to be a net oil exporter for every year until 2024, when oil production is forecast to exceed consumption due to expected start-up of new developments. The Danish Energy Agency revised down its oil production forecast by 8 percent compared to last year’s forecast, mostly due to a downward revision of the resources, delays, and a “greater uncertainty regarding the development of several fields and discoveries.”For this year, the agency expects Denmark’s oil production to average just 128,000 bpd, a figure 10 percent lower than last year’s 2018, mainly due to what is expected to be lower production from some of the larger oil fields.Between 2018 and 2022, the oil production estimate was revised down by an average 14 percent, attributable again to lower production expected at some larger oil fields.The outlook for Denmark’s natural gas exporter status is rosier. Denmark is expected to remain a net natural gas exporter until 2035, except for the years 2020 and 2021 when the Tyra field redevelopment—approved last year—will be underway, the Danish agency noted.“The approval of the rebuilding of the facilities on the Tyra field implies that the uncertainty in this regard is less than before. However, great uncertainty remains with regard to the development of a number of projects hence contributing to the forecast being somewhat uncertain,” the agency said.

Russian Oil Giants Offer Bright Spot in Cloudy Economy (Bloomberg) -- Russia’s oil companies are on a tear. The nation’s top crude producers more than doubled their combined profit in the first half, trouncing estimates thanks to a weaker ruble and rebounding prices. And with output curbs easing, the influx of cash is set to continue. “Russian oilmen feel financially better than any other crude producer in the world,” said Andrey Polischuk, an energy analyst at Raiffeisen Centrobank in Moscow. “Operating costs are low, production is either already at a record or close to a record, and oil in rubles is setting new historical records.” Russia’s currency crisis, which has seen the ruble halve against the dollar since the first U.S. and European sanctions hit in 2014, has made it cheaper for local companies to pump oil, while boosting the price of crude in ruble terms. That paved the way for bumper half-year profits, while European and U.S. rivals delivered a mixed bag. The combined revenue of Russia’s top five oil producers jumped 32 percent to more than 9.9 trillion rubles ($145 billion), while total net income doubled to almost 1.25 trillion rubles. Yet the risk of more sanctions weighs heavily on the companies, clouding an otherwise sunny outlook. Shares of Rosneft PJSC, Russia’s biggest oil producer, are trading at seven times estimated 12-month earnings compared with about 11 times for Royal Dutch Shell Plc, more than 12 times for BP Plc and 15 times for Exxon Mobil Corp. 

Russia’s Huge Natural Gas Pipeline To China Nearly Complete - Gazprom’s Power of Siberia natural gas pipeline from Russia to China is 93 percent complete, the Russian gas giant said in an update on its major projects.A total of 2,010 kilometers (1,249 miles) of pipes are laid for the Power of Siberia gas pipeline between Yakutia and the Russian-Chinese border, or on 93 percent of the route’s length, Gazprom said in a statement.The natural gas pipeline is expected to start sending gas to China at the end of 2019 and its completion is among Gazprom’s top priorities.The two-string submerged crossing of the Power of Siberia pipeline under the Amur River is 78 percent complete, and the Atamanskaya compressor station adjacent to the border is also under construction, the Russian company says.Gazprom has a 30-year contract with CNPC for the supply of an annual 1.3 trillion cu ft of natural gas via the infrastructure.This year, Gazprom plans to invest nearly US$3.2 billion (218 billion Russian rubles) in the pipeline project, up from the US$2.3 billion (158.8 billion rubles) investment last year, according to Russia’s TASS news agency.Gazprom and CNPC have also discussed another pipeline from Russia to China via the western route—the so-called Power of Siberia 2 pipeline—that would source gas from Western Siberian gas fields, but little progress has been made regarding the specifics of this project.Gazprom is dominating gas supplies to many European markets while it vies to meet the surging Chinese natural gas demand as the country is in the middle of a massive switch from coal-fired to gas-fired heating in millions of homes. Although Chinese companies are looking to boost domestic natural gas production, local production won’t come even close to meeting surging demand, and China is expected to increasingly rely on gas imports.

Guyana Can Become Richest Corner of the Continent - Analysis from WoodMac says ExxonMobil's latest discovery offshore Guyana will help the country create the greatest value of any offshore basin.Following Exxon Mobil Corp.’s latest Hammerhead-1 discovery, the company’s ninth discovery offshore Guyana, it’s believed the country will create the greatest value of any offshore basin since the downturn, according to Maria Cortez, Wood Mackenzie’s Latin American upstream senior research manager.Cortez referred to the Hammerhead discovery as a “another play-opener” that adds to more than four billion barrels of oil equivalent of reserves through an exploration program that has a current success rate of 82 percent.She said with almost 18 prospects left to pursue in the Stabroek block, the project is bound to get bigger. However, she does note challenges to the “high-risk exploration” such as the need for infrastructure and ensuring good natural resource governance.Guyana must first develop institutional and regulatory framework in order to effectively manage the emerging sector, noted Cortez. “Guyana has hit the jackpot,” Cortez said. “If this small South American nation with a population of about 750,000 can properly manage the billions of dollars of revenue about to come its way, it may become the richest corner of the continent.”

South-East fracking ban set to be legislated by South Australian Government - A decade-long ban on hydraulic fracturing — better known as fracking — in South Australia's Limestone Coast region looks set to be enshrined in law. The State Government has backflipped on its opposition to legislating a moratorium, and will support a bill put forward by Mt Gambier independent MP Troy Bell, a former Liberal."It's not that the South-East is against mining or gas extraction, it's this technology, in that location over limestone where there's aquifers that the entire region relies on." In July, the Liberals sided with Labor to block a Greens bill in the Upper House that would have achieved the same thing. The Government argued that its ministerial direction to reject any applications for fracking went far enough. The Liberal Party promised a 10-year moratorium on fracking in the South-East ahead of the March state election. "This bill tries to play politics by bringing into question that moratorium," Investment Minister David Ridgway said at the time. "We made a commitment for a 10-year moratorium, and that is what the people of the Limestone Coast and the South-East have." Speaking after a rally of South-East locals on the steps of Parliament House today, Liberal MP for MacKillop Nick McBride declined to say whether he would have crossed the floor on the issue. "I'm going to work within the party lines — I've taken on board the community sentiment and I've put that in the party room as strongly as possible," Mr McBride said. 

Next Australian federal election favorite Labor wants stronger LNG export controls — The Australian Labor Party, which is a strong favourite to win the next federal election, plans to put in place permanent LNG export controls, party leader Bill Shorten said Monday.  w "Right now, up and down the eastern seaboard of Australia, there are a lot of companies doing it hard with their energy prices and there is a cloud over a lot of jobs in Australia," he told journalists in Brisbane. "Labor's policy to have a permanent export control trigger, a national interest test and greater strength for the [Australian Competition and Consumer Commission], will make sure that Australian gas is available at reasonable prices for Australian interests first," he said. The shadow minister for resources and northern Australia, Jason Clare, said Labor would expand upon and strengthen the trigger the Liberal-National Coalition government put into place last year. "When the government put that gas trigger into place, we backed it, we supported the government. We actually urged them to pull the trigger but they failed to do that," he said. "The gas trigger that the government put into place last year is temporary and it expires in 2023. What we are saying today is, let's make that power that the Commonwealth has, permanent -- a permanent gas trigger," he said. In addition, Labor will make it so the export controls can be put into place, not just if there is a lack of gas -- as is the case with the current mechanism -- but if the gas being offered to companies is at a price which they can't afford, or at uncompetitive prices, he said. "So, we'll give the ACCC the power to set a benchmark price and if companies are being offered prices that are well above that, we can put into place export controls to make sure the Australian companies get access to the affordable gas they need to do the jobs that they do," he said.

Why China’s Gas Guzzling Isn’t a Home Run for PetroChina - It’s boom times again in the oil industry but PetroChina,Asia’s largest energy company, still seems to have the summer blues. Maybe that’s because investors are looking ahead to the winter with trepidation. One explanation could be that what PetroChina—the listed part of China’s largest state-owned oil and natural-gas producer—is doing well, its two big state-owned rivals are doing even better. Sinopec, China’s refining heavyweight, posted its best ever half-year results earlier this month. And both Sinopec and China National Offshore Oil Corp. raised dividends by a higher percentage than their larger rival.PetroChina has other, more structural problems.  China’s demand for clean-burning natural gas, particularly during the smoggy winter, is rising quickly—thanks to quality-of-life concerns raised by President Xi Jinping at the previous Communist Party congress. That would be great news for PetroChina and its unlisted parent China National Petroleum Corp., which together dominate the gas business in China—not so much for the country’s pesky price controls.For PetroChina, these controls mean that when demand surges, it often ends up making deeper losses on pricey imported gas. The problem is compounded by the fact that PetroChina’s domestic gas production is growing much slower than the country’s demand: Its marketable output was up 2.5% on the year in the first half, while gas consumption rose 15% last year. In turn, PetroChina’s first-half losses on imported gas rose 13% to 13.4 billion yuan, while its natural-gas gross profit margin contracted nearly a percentage point to just 10%, against nearly 20% in its upstream oil division. A new pricing policy harmonizing pipeline offtake rates for residential and industrial use announced in May will help mitigate, but probably not eliminate those losses. PetroChina’s crude output also remains a concern: it was up just 0.4% on the year, and excluding overseas output it would have fallen 1.3%.

China’s Natural Gas Imports Soar Despite Domestic Output Growth - PetroChina—the country’s largest oil and gas producer—is betting big on boosting natural gas production in line with the Chinese policy to increase its gas production and industrial and residential gas use.Yet, planned production increases at the biggest upstream company will not even come close to reducing China’s dependence on oil and natural gas imports—they are set to further rise as the country’s energy demand grows, while domestic oil and gas production capacities struggle in vain to keep up with growth.PetroChina will also look to raise its crude oil production as the world’s largest oil importing country tries to reverse a decline in its domestic crude oil production while its oil demand continues to grow.To this end, PetroChina is planning to raise natural gas production at a faster rate than oil production. “Domestic oil and gas resources are not good enough for significant production increases,” PetroChina’s vice chairman Zhang Jianhua told S&P Global Platts on the sidelines of the firm’s first-half earnings briefing last week. PetroChina’s domestic crude oil production dropped by 1.3 percent in the first half of 2018, but domestic natural gas production rose by 2.5 percent, the company said in its H1 2018 earnings filing.

China Will Buy More LNG, But Wants It Smoother (Reuters) - Russell-China appears set to once again boost its purchases of liquefied natural gas (LNG) for the northern winter, but unlike last year's rush, this time the process is likely to be more organised and stable. In recent weeks there have been several indicators that China is planning on increasing the use of natural gas in winter heating, replacing boilers that use more polluting coal. Curbing winter air pollution has been a major aim of the authorities in Beijing, but they were stung by criticism last year that the switch to natural gas was made too quickly and the resulting shortages left some people without adequate heating. A sign that Beijing is putting more effort into ensuring sufficient natural gas supplies came last week when Vice-Minister of Finance Liu Wei was quoted by the Communist Party newspaper as saying that gas supply agreements must be in place when converting coal-fired boilers to the cleaner fuel. These comments were followed by an announcement by state-owned oil and gas major Sinopec that it is putting in place a range of measures to boost winter natural gas supplies, including increasing purchases of spot LNG cargoes and boosting distribution. It's often a challenge with China to work out exactly how official pronouncements will translate into real world action, but in all likelihood China is going to increase LNG imports in coming months. This will come on top of an already strong year so far, with both official customs data and vessel-tracking data compiled by Thomson Reuters showing impressive gains. China imported about 4.55 million tonnes of LNG in August, the highest since January, according to the shipping data. Imports for the first eight months totalled 32.2 million tonnes, up 46.4 percent from the same period last year. Customs data for the January to July period shows imports of about 28.05 million tonnes, up 47.6 percent from the same period in 2017. 

ExxonMobil May Build World-Scale Cracker in Pearl River Delta -- ExxonMobil Corp. has signed a cooperative framework deal with the Guangdong Provincial People’s Government to advance talks surrounding a proposal to construct a chemical complex in the Huizhou Dayawan Petrochemical Industrial Park in southern China, the supermajor reported late Wednesday. “Our agreement with the Guangdong Provincial Government demonstrates ExxonMobil’s interest in advancing this project from concept to completion,” John Verity, ExxonMobil Chemical Co.’s president, said in a written statement. “We value the government’s support and its experience in moving such a large-scale project forward.” The proposed complex – subject to a final investment decision – would include a 1.2-million ton per year ethylene flexible feed steam cracker as well as two performance polyethylene lines and two differentiated performance polypropylene lines,    According to ExxonMobil, the proposed Huizhou complex would help to advance the Chinese government’s national petrochemical development priorities such as self-sufficiency, diversified feedstock sources and rebalancing fuels versus chemicals. In addition to promoting discussions about the project, the framework agreement also confirms Guangdong province’s support for progressing the Huizhou liquefied natural gas (LNG) import terminal, the company stated. ExxonMobil noted that it would supply LNG to the receiving terminal. Located in the Pearl River Delta in southern Guangdong province, the Huizhou Dayawan Petrochemical Industrial Park already hosts the CNOOC-Shell Nanhai Petrochemical Project joint venture.  According to Shell, the Nanhai complex can produce 950,000 tonnes per annum of ethylene and various volumes of other chemicals. 

China's slowing demand for oil is a serious concern for the Middle East -- The risk of declining Chinese demand for oil is worrying Middle East officials more than Iran's supply curbs as a result of U.S. sanctions.  Bahrain and Oman's oil and gas ministers both told CNBC Monday that China's demand for oil could decline on the back of its trade dispute with the U.S. that has seen tariffs imposed on a wide range of Chinese imports.   "I think there is a risk on the demand side," Bahrain's Oil Minister Sheikh Mohammed bin Khalifa Al Khalifa told CNBC's Hadley Gamble in Muscat, Oman. "Is demand going to continue as strongly as it did?""Obviously the trade issue is going to impact demand in a negative fashion if it continues and persists. You've got the strong dollar, which is another factor."Oil prices have stabilized over the last two years largely thanks to a deal between OPEC and non-OPEC oil producers, including Bahrain and Oman, to curb oil output. The deal has worked with prices now between $70 and $80 a barrel. However, the deal has come under fire from President Donald Trump, who said in July that higher oil prices are hitting consumers too hard. OPEC and Russia, the world's largest producers, promised to boost supply a few days afterwards.Nonetheless, Trump's decision-making is affecting oil market stability too. His decision to re-impose sanctions on major OPEC oil producer Iran (with the restrictions due to kick in in November) could push prices even higher as Iran's contribution to global oil supply is restricted.But Trump's attack on cheap Chinese imports, and his decision to impose trade tariffs on a wide range of Chinese goods entering the U.S., could damage China's economic growth and in turn lower its demand for oil.

India may not be able to cut Iranian oil imports, despite U.S. demands - Washington's demand for countries to cut all Iranian oil imports is going to be a massive headache for India.As the world's third-largest oil importer and the second-largest buyer of Iranian crude after China, complying with the U.S. sanctions — enacted following President Donald Trump's withdrawal from the 2015 Iranian nuclear deal — will require India to find new sources of crude at a higher cost.At a time of rising oil prices globally and a weakening national currency amid an emerging markets sell-off, this is going to hurt.Washington may grant waivers for major importers of Iranian crude but still expects them to ultimately comply with sanctions, top U.S. officials said. Discussions on the issue, as well as on security issues and trade more generally, took place Thursday as the U.S. Secretaries of Defense and State, James Mattis and Mike Pompeo, met with their Indian counterparts in Delhi."We will consider waivers where appropriate but that it is our expectation that the purchases of Iranian crude oil will go to zero from every country or sanctions will be imposed. So we'll work with the Indians, we committed that we will do that," Pompeo told press at the summit.India imports 70 percent of its energy needs, and fuel costs are hitting multi-year highs in the rapidly growing country of 1.3 billion people. And the rupee fell to a record low against the dollar this week as rising global interest rates and trade war fears rock emerging market currencies across the board. This, combined with the elimination of a major source of cheap crude, could have significant impacts on India's inflation and economic growth.

India Joins China In Defying Trump, Will Allow Imports Of Iranian Oil --  Two weeks after China - the top importer of Iranian crude oil - defied the White House, disclosing that it would continue importing Iranian oil ignoring US sanctions on Tehran, India, the second biggest buyer of Iranian oil exports, has given permission to its state refiners to import Iranian oil using a similar scheme as China in which Tehran would arrange tankers and insurance after firms including the country’s top shipper Shipping Corp of India halted voyages to Iran due to U.S. sanctions. According to Reuters, New Delhi’s attempt to keep Iranian oil flowing mirrors a step by China, where buyers are shifting nearly all their Iranian oil imports to vessels owned by National Iranian Tanker Co (NITC). China previously said that it would not stop buying Iranian oil despite U.S. efforts to bring the Iranian exports down to ‘zero.’ But Beijing is also said to have agreed not to increase its oil purchases from Iran.The decisions by Iran's two top crude oil customers confirm that the Islamic Republic will not be fully cut off from global oil markets from November, when U.S. sanctions against Tehran’s petroleum sector are due to start.“We have the same situation (as most Western shippers) because there is no cover, so we cannot go (to Iran),” an SCI official told Reuters.New Delhi turned to the NITC fleet after most insurers and reinsurers had begun winding down services for Iran, wanting to avoid falling foul of the sanctions given their large exposure to the United States. As a reminder, President Trump ordered the reimposition of economic curbs after withdrawing the United States from a 2015 nuclear deal between Iran and six world powers. No one trading with Iran will do business with America, he said although that threat appears to not be too concerning to either China or India. "The shipping ministry has given refiners permission to buy Iranian oil on a CIF (cost, insurance and freight) basis,” a government source told Reuters.  Under the CIF arrangement, Iran will provide shipping and insurance, enabling Indian refiners to continue purchases of the country’s oil despite the non-availability of cover from Western insurers due to the restrictions imposed by Washington.The move will benefit Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and MRPL, which plan to lift Iranian cargoes during the rest of the fiscal year ending on March 31. India wants to continue buying oil from OPEC member Iran as Tehran is offering almost free shipping and an extended credit period.

 OPEC August oil output hits 2018 high - The Organisation of Petroleum Exporting Countries (OPEC) oil output has risen this month to a 2018 high as Libyan production recovered and Iraq’s southern exports hit a record, a Reuters survey found, although a cut in Iranian shipments due to U.S. sanctions limited the increase. The 15-member OPEC has pumped 32.79 million barrels per day in August, the survey on Friday found, up 220,000 bpd from July’s revised level and the highest this year. OPEC and allies agreed in June to boost supply as U.S. President Donald Trump urged producers to offset losses caused by the renewed sanctions on Iran and to dampen prices, which this year hit $80 a barrel for the first time since 2014. In June, OPEC, Russia and other non-members agreed to return to 100 percent compliance with oil output cuts that began in January 2017, after months of underproduction in Venezuela and elsewhere pushed adherence above 160 per cent. Top exporter Saudi Arabia, which promised a “measurable” boost in its own output, said the decision would translate into an output rise of about 1 million bpd. Even so, OPEC’s adherence with supply targets has actually risen to 120 percent in August from a revised 117 per cent in July, the survey found, because extra barrels from Saudi and others did not fully offset losses in Iran and declining output in Venezuela and Angola. The biggest increase in supplies this month has come from Libya, whose output remains volatile due to unrest. Production at the Sharara oilfield, the country’s largest, increased after the restart of a control station that had been closed due to the kidnapping of two workers, and other fields also pumped more. The second-largest increase came from Iraq, where southern exports reached a record high. Shipments also increased from the north, leaving Iraq as OPEC’s least compliant member in August according to the survey.

 Libya oil production hits highest level this year after Sharara oil field resumes pumping - OPEC oil production has risen this month to its highest level this year due to the recovery of Libyan oil production, Reuters reported on Friday. OPEC clarified that Libya has recorded a major increase in supplies this month, despite the fluctuations of production due to the repeated turbulence in the Oil Crescent region. The increase of production is attributed to the resumption of work at Sharara Oil field at its full capacity, in addition to other oil fields, which provided additional supplies of crude oil.

Reuters Survey- OPEC August Oil Output Hits 2018 High Despite Iran Losses (Reuters) - OPEC oil output has risen this month to a 2018 high as Libyan production recovered and Iraq's southern exports hit a record, a Reuters survey found, although a cut in Iranian shipments due to U.S. sanctions limited the increase. The 15-member Organization of the Petroleum Exporting Countries has pumped 32.79 million barrels per day in August, the survey on Friday found, up 220,000 bpd from July's revised level and the highest this year. OPEC and allies agreed in June to boost supply as U.S. President Donald Trump urged producers to offset losses caused by the renewed sanctions on Iran and to dampen prices, which this year hit $80 a barrel for the first time since 2014. In June, OPEC, Russia and other non-members agreed to return to 100 percent compliance with oil output cuts that began in January 2017, after months of underproduction in Venezuela and elsewhere pushed adherence above 160 percent. Top exporter Saudi Arabia, which promised a "measurable" boost in its own output, said the decision would translate into an output rise of about 1 million bpd. Even so, OPEC's adherence with supply targets has actually risen to 120 percent in August from a revised 117 percent in July, the survey found, because extra barrels from Saudi and others did not fully offset losses in Iran and declining output in Venezuela and Angola. The biggest increase in supplies this month has come from Libya, whose output remains volatile due to unrest. Production at the Sharara oilfield, the country's largest, increased after the restart of a control station that had been closed due to the kidnapping of two workers, and other fields also pumped more. The second-largest increase came from Iraq, where southern exports reached a record high. Shipments also increased from the north, leaving Iraq as OPEC's least compliant member in August according to the survey. Saudi Arabia, after a big increase in June output, apparently backtracked on plans for a further boost in July and cut supply last month to 10.40 million bpd. Supply has edged up to 10.48 million bpd in August, the survey found, still lower than June's 10.60 million bpd. Supply in Nigeria, which like Libya is exempt from the OPEC supply cut pact because its output is often curbed by unplanned outages due to unrest and conflict, rose by 30,000 bpd. Kuwait and the United Arab Emirates, after raising output in July following the OPEC deal, kept supply steady in August, the survey found. Among countries with lower output, the biggest drop of 150,000 bpd was in Iran. Exports fell as returning U.S. sanctions discouraged companies from buying the country's oil. Production also slipped in Venezuela, where the oil industry is starved of funds because of economic crisis, and in Angola due to natural decline at oilfields. 

OPEC crude oil production rises to 32.89 mil b/d in Aug as cuts unwind: Platts survey — OPEC's crude oil production in August, not including newest member Congo, rose to a 10-month high, with Iraq surging to record output and Libya recovering from militia fighting, more than offsetting Iran's slide as the sanctions-hit country struggles to keep its customers, according to the latest S&P Global Platts survey. The 15 members of OPEC pumped 32.89 million b/d in the month, the survey found. Taking away Congo, which joined the organization in June, OPEC's August output of 32.57 million b/d is the highest since it produced the same amount in October 2017, as it unwinds supply cuts that have been in place since January 2017. Pressure from US president Donald Trump to moderate oil prices, plus fears of an overtightening market due to US oil sanctions on Iran that go into effect in November, prompted OPEC and 10 allies to agree June 23 in Vienna to reduce overcompliance with their cuts and increase output by 1 million b/d in the months ahead. The 12 OPEC members with firm quotas achieved 115% compliance in August, according to Platts calculations. Libya and Nigeria are exempt, while Congo has yet to be given an allocation. Iranian production has already begun to suffer in advance of the sanctions, falling to 3.60 million b/d in August, the lowest in more than two years, according to the survey. Oil exports from the country plunged 17% from July, as key buyers China and India significantly cut their purchases, data from Platts trade flow software cFlow showed. Platts Analytics estimates that some 1.4 million b/d of Iranian oil is expected to leave the market by November. Meanwhile, Iraqi production swelled to 4.68 million b/d in August, up 110,000 b/d from July and the highest recorded in the 30-year history of the Platts OPEC survey, as exports from both the country's southern port of Basra and through the Turkish port of Ceyhan saw increases. Saudi Arabia, OPEC's biggest producer and the world's largest crude exporter, pumped 10.49 million b/d in August, the survey found. That is far above its quota of 10.06 million b/d under the supply cut agreement, but below the 10.8 million to 11 million b/d that it had signaled it would produce at the June meeting.  Libya added the most barrels in August within OPEC, as output recovered to 940,000 b/d with the lifting of force majeure in July on loadings from the country's eastern ports, which had been blockaded for about a month by a militia group, as well as the ramping up of production from the Sharara field after the kidnapping of some workers there in mid-July was resolved. Libyan production in July was 670,000 b/d, the lowest it had been since April 2017. Nigeria increased its production by 70,000 b/d in August, according to the survey, with loadings up in the month. Venezuela continued its production decline, as output slumped to 1.22 million b/d in August, a year-on-year plunge of 680,000 b/d, the survey found.

Oil demand to hit 100 million barrels per day sooner than projected - OPEC's Barkindo (Reuters) - World oil consumption will reach 100 million barrels per day (bpd) later this year, hitting that level much sooner than previously forecast, OPEC’s secretary-general said on Wednesday. Mohammad Barkindo also told an energy conference in South Africa’s Cape Town that a stable environment was needed to encourage oil industry investment to meet the rising demand. “The world will attain the 100 million barrels a day mark of consumption later this year, much sooner than we all earlier projected. Therefore stabilising forces which create conditions conducive to attracting investments are essential,” he said. “The priority ... is on ensuring stability is sustainable, spreading confidence in the industry and encouraging an environment conducive to the return of investments,” he added. The Organization of the Petroleum Exporting Countries with Russia and other producers have implemented a deal since January 2017 on cutting 1.8 million bpd from output to prop up prices that fell below $30 (23.4 pounds) a barrel in 2016 from over $100 in 2014. On Wednesday, benchmark Brent LCOc1 was trading at just below $78. Barkindo said oil industry confidence was returning and OPEC was exploring ways of institutionalising cooperation between OPEC and its non-OPEC allies on their production levels. Barkindo also told reporters at the conference that global trade disputes could hurt energy demand in future, although he said he was hopeful the uncertainty would lift soon. 

 In Response to Trump, Saudis Increase Oil Exports into the U.S-- Saudi Arabia has markedly increased oil exports to America, a sign OPEC’s leading producer is responding to pressure from U.S. President Donald Trump to cool down the energy market. While the export boost started earlier this year, it accelerated over the past three months after Trump repeatedly -- both through private diplomacy and public Twitter harangues -- asked the Saudis to lift production to keep energy prices in check. Saudi oil shipments into the U.S. reached a four-week average of one million barrels a day last week for the first time since late 2017, according to government data, and are up roughly 250,000 barrels a day since late May. "The Middle East producers are becoming much more aggressive, wanting to bring their barrels back into this market,"  The increase in Saudi exports into the U.S. equates to almost half the overall output increase the kingdom has implemented since late May after the Organisation of Petroleum Exporting Countries and allies including Russia agreed in June to boost output. Saudi oil shipments into the U.S. plunged to a 30-year low in October last year. This prompted talk that America’s freedom from Saudi oil -- a rhetorical aspiration for generations of American politicians, from Jimmy Carter to George W. Bush -- was within reach, even if it was largely the choice of supplier rather than customer. In late October, the four-week average of U.S. imports of Saudi crude hit a low of 506,000 barrels a day, compared with last week’s four-week average surge to 1,009,000 barrels a day, according to government data.

Baker Hughes wins major Saudi offshore oil field expansion deal  — Saudi Aramco has awarded Baker Hughes a major services contract to boost crude oil production from Saudi Arabia's offshore Marjan oil field. Baker Hughes will start drilling work this month to help increase production capacity from the 500,000 b/d field, Aramco said in a statement Tuesday. The services include drilling, along with coiled tubing and drilling fluid engineering services for the field, the statement said. Marjan, which lies off Saudi Arabia's eastern coast in the Persian Gulf, is the first of three major offshore expansions in a wider plan to raise offshore production at the 800,000 b/d Zuluf and 200,000 b/d Berri fields. Adding another 1 million b/d by 2023 of capacity from the three fields will help offset reduced output from older fields. Although it holds the world's largest proven reserves, estimated to be above 260 billion barrels, many of Saudi Arabia's most productive fields have been operating for decades. "The Marjan oil field is one of the major upstream developments this year that will contribute to the kingdom's oil production strengths, helping maintain capacity and meet domestic and global demand," according to Mohammed al-Qahtani, Aramco's senior vice president of upstream. Saudi Arabia maintains around 1.7 million b/d of spare production capacity based on its 10.63 million b/d output in July, according to the latest S&P Global Platts survey of OPEC producers.

Prices Little Changed As The End Of Summer Approaches While Still Low Storage Levels Support Prices --Highlights of the Natural Gas Summary and Outlook for the week ending August 31, 2018 follow. The full report is available at the link below.

  • Price Action: The October contract rose 0.3 cents (0.1%) to $2.917 on a 9.0 cent range ($2.993/$2.903).
  • Price Outlook: Although weather forecasts remain very bullish, a larger than expected EIA storage report restrained prices with the market posting a new weekly low, after 5 consecutive weeks higher. Although above national normal temperatures are still bullish, that will change in coming weeks with above normal temperatures turning decidedly bearish in northern climes in coming weeks. The storage deficit to the 5-year average did contract noticeably this week, but is likely to expand this week. Until the storage deficit to the 5-year begins to contract consistently, price downside is considered somewhat limited, recognizing overall sentiment remains bearish. For daily updated storage projections, subscribe to our joint publication with RBN Energy. CFTC data indicated a (15,064)contract reduction in the managed money net long position as longs liquidated and shorts covered. Total open interest fell (56,766)to 3.772 million as of August 28. Aggregated CME futures open interest rose to 1.618 million as of August 31, a new record. The current weather forecast is now warmer than 10 of the last 10 years. Pipeline data indicates total flows to Cheniere’s export facility were at 2.6 bcf. Cove Point is net exporting 0.7 bcf.
  • Supply Trends: Total supply rose 0.5 bcf/d to 79.8 bcf/d. US production rose. Canadian imports fell. LNG imports fell. LNG exports fell. Mexican exports rose. The US Baker Hughes rig count rose +4. Oil activity increased +2. Natural gas activity increased +2. The total US rig count now stands at 1,048 .The Canadian rig count fell (1) to 228. Thus, the total North American rig count rose +3 to 1,276 and now exceeds last year by +132. The higher efficiency US horizontal rig count fell (2) to 917 and rises +123 above last year.
  • Demand Trends: Total demand fell (1.9) bcf/d to +70.0 bcf/d. Power demand fell. Industrial demand rose. Res/Comm demand rose. Electricity demand fell (5,552) gigawatt-hrs to 85,509 which exceeds last year by +441 (0.5%) and exceeds the 5-year average by 174 (0.2%%).

The cooling season is now entering its final stretch. With a forecast through September 14 the 2018 total cooling index is at 5,126 compared to 4,584 for 2017, 5,296 for 2016, 4,170 for 2015, 3,303 for 2014, 4,722 for 2013, 7,058 for 2012 and 6,519 for 2011.

The natural gas market should be panicking, but whatever - America is awash in natural gas.  Production will jump 10 percent this year, according to the Department of Energy, hitting a new record— just ahead of probably hitting another one in 2019. Export terminals can’t be built fast enough. This isn’t helpful for the dogged, if shrunken, cohort of gas bulls still out there. What is helpful, though, is that, for all the gas coming out of the ground, there’s a surprising shortage of it underneath — in storage.  We’re only a few months away from reminiscing about the heat instead of complaining about it, and the gas tank looks light. Stocks are 20 percent below the five-year seasonal average, something that’s only happened in three other periods since the beginning of 1999:  Ordinarily, this would light a fire under gas prices, as it did late in the winter of 2013 and 2014. But, as I wrote here three months ago, something has put the market in a coma; futures have traded below $3 per million BTU for most of the year. That something is associated gas, the stuff that gets produced alongside oil and which is spewing out of the Permian shale basin, among others. This isn’t dictated by gas prices, so the usual signals to producers aren’t working. It’s no accident that the breakdown has coincided with the discount at which gas trades in west Texas blowing out beyond its usual limit of around 50 cents per million BTU to as much as $1.40. Still, with storage having dropped below even the minimum level expected for August and winter not far off, it is striking that prices are still so moribund. The market is implicitly taking the view that even if the usual buffer against a cold snap looks thin, the frackers can bring on enough new supply to fill the gap. Similar thinking has helped to cap the rally in oil prices even as those stocks have drained and supply risks around Venezuela and Iran have sprung up. It sets up a risky dynamic in the U.S. gas market this winter. Dedicated gas frackers can respond relatively quickly to higher prices and there was about six months-worth of drilled but uncompleted wells in the Appalachian region at the end of July. But quickly isn’t the same as instantaneous. Throw in the bottlenecks affecting Permian oil production (and thereby, potentially, gas too) and there’s a decent risk of gas-price spikes this winter. The wrinkle in all this is that even a winter spike may not do much for the stocks of dedicated gas producers. Amid broad ambivalence toward the E&P sector in general, gas producers haven’t fared well even when prices spiked briefly during the past two winters.

Natural Gas Fails To Reach $3 And Falls To A Support Level - The little engine that could, couldn't over recent sessions, as the price of natural gas failed to reach the $3 per MMBtu level and declined to the middle of its trading range since mid-June. October natural gas futures hit a high of $3.025 on June 18 and fell to a low of $2.6880 on July 19. On August 14, in a repeat of a mid-month move to the upper or lower end of its trading range, natural gas futures reached a peak at $2.979, and after attempts to challenge the June high and level of technical resistance, the price fell back to lows of $2.83 last week. There continue to be bullish and bearish factors at play in the energy commodity. Inventories are at the lowest level in years, while production is at a record high. The midpoint of the range since for most of 2018 in the October futures contract is at just under $2.86 per MMBtu, and the energy commodity closed last week at $2.88 in the middle of the trading band. The summer of 2018 has come to a conclusion with the Labor Day holiday on Monday, September 3. In the natural gas market, the summer season was a time where production of the energy commodity rose to a record level. Technological advances in fracking, fewer regulations, and corporate tax reform has reduced costs and increased profits for natural gas producers in the United States. Then quadrillions of cubic feet of reserves in the Marcellus and Utica shale regions dramatically increased the supply side of the fundamental equation in the natural gas market. At the same time, increased demand from the replacement of coal with natural gas in lots of power generation in the United States and exportation of liquified natural gas or LNG to areas of the world where the price is much higher has increased the demand side of the equation. Last week, China said that they are considering slapping a 25 percent tariff on U.S. exports of LNG to the Asian nation, which may have contributed to some selling in the natural gas futures market over the past week. As the daily chart of October NYMEX natural gas futures highlights, the price dropped to a low of $2.83 per MMBtu on Wednesday, August 29, but the price reversed and rallied over the final three days of last week closing at the $2.92 per MMBtu level on Friday. Technical metrics are in neutral territory, but open interest is at a record high at over 1.6 million contracts as we move into the fall season. The end of summer means that the number of weeks left in the 2018 injection season is dwindling with stock levels at a very low level for this time of the year. The record level of production is not apparent in the stockpile numbers reported by the Energy Information Administration each week. Last Thursday, the EIA told markets that stocks increased by 70 billion cubic feet for the week ending on August 24.

Don't Expect A Price Shock In Natural Gas  - A few months from now, the U.S. will enter the winter heating season with natural gas inventories at their lowest level in years, setting the stage for pricing risks, particularly if there is a cold snap. However, the tightness could be temporary as shale gas drillers continue to break production records. A growing number of analysts are waking up to the fact that natural gas storage levels are “dangerously low.” For the week ending on August 17, U.S. gas stocks stood at 2,435 billion cubic feet (Bcf), or 684 Bcf below the same week in 2017 and 599 Bcf below the five-year average. On its face, a thin margin of supply raises the risk of a price spike this winter when millions of people crank up the heat. Back in the winter of 2014, prices shot up during the “polar vortex” that saw unusually low temperature sweep across much of the country. And earlier this year, prices in New England briefly spiked to $25 per million Btu (MMBtu) during a bout of cold weather.The same could happen this winter if the mercury drops too low for an extended period of time, especially because inventory levels are so low. Moreover, gas demand is rising on a structural basis. Coal plants are shutting down, with natural gas – in addition to solar and wind – scaling up to replace them. Tens of billions of dollars poured into downstream petrochemical complexes over the last few years have also resulted in higher levels of gas usage. Finally, new LNG export terminals are diverting U.S. supply overseas.With inventories low and demand on the rise, the ingredients are in place to finally shake natural gas prices out of their multi-year slumber – prices have been stuck in a narrow band between $2.75-$3/MMBtu for the past few years. However, while the landscape looks worrying, the market could dodge a bullet and return to another extended period of ample supply. “We anticipate a tight market in 4Q18 before another year of strong production growth drives natural gas prices lower in 2019,” Barclays wrote in an August 28 note.  The investment bank acknowledged that low inventories create some bullish pressure, but only revised up its Henry Hub pricing forecast for the fourth quarter of this year to $2.83/MMBtu, up from a previous estimate of $2.53/MMBtu. “Lower assumed end-October storage should shrink the cushion for winter demand, while higher LNG demand partially offsets production gains,” Barclays wrote in its explanation for raising its pricing forecast.

US natural gas storage volume rises 63 Bcf to 2.568 Tcf: EIA — US natural gas in storage increased by 63 Bcf to 2.568 Tcf for the week ended August 31, Energy Information Administration data showed Thursday. Not registered? Receive daily email alerts, subscriber notes & personalize your experience. Register Now The build was slightly more than an S&P Global Platts' survey of analysts calling for a 60-Bcf addition. The injection was more than the 60-Bcf build reported during the corresponding week in 2017 but less than the five-year average addition of 65 Bcf, according to EIA data. As a result, stocks were 643 Bcf, or 20%, less than the year-ago level of 3.211 Tcf, and 590 Bcf, or 19%, less than the five-year average of 3.158 Tcf. The injection was less than the 70-Bcf build reported the week prior as population-weighted temperatures increased by 2 degrees across the Lower 48 states, adding 9 Bcf of additional gas-fired power demand, according to S&P Global Platts Analytics. The NYMEX October Henry Hub natural gas futures slid down 1.3 cents to $2.782/MMBtu following the 10:30 am EDT storage announcement. The prompt month has fallen by 18 cents over the past two weeks despite the low storage inventory. Even though Platts Analytics expects slightly larger builds over the next two weeks, they are still less than the five-year average and will further widen the deficit. Platts Analytics expects storage to peak at approximately 3.3 Tcf before the switch to withdrawals in early November. If so, it would be the lowest level to start the heating season since 2005, when stocks peaked at 3.2 Tcf. A colder-than-normal winter could push up prices due to the low inventory despite production gains.

Why Diesel Prices Are Set To Soar | - The world is ticking down to a deadline that promises to have major ramifications in the global fuel markets. On January 1, 2020, the International Maritime Organization (IMO) will require the sulfur content in marine fuel to drop from a maximum of 3.5 percent down to 0.5 percent.The rule is meant to curb pollution from ships. Combustion of high-sulfur fuels leads to the production of compounds like sulfur dioxide, which causes respiratory problems and produces acid rain. This rule continues a trend of limiting the sulfur content in fuels (which originates from the sulfur contained in crude oil). Europe began tightening sulfur specifications in the 1990s, and the U.S. began to phase in ultra-low-sulfur diesel (ULSD) in 2006.  Prior to implementation of the ULSD standard in the U.S., gasoline often traded at a premium to diesel. But meeting the ULSD standards required refineries to invest billions of dollars into equipment to remove the sulfur. This drove up diesel prices in two ways.First, the cost to produce diesel was simply higher due to additional capital and operating costs.Second, this meant that refiners had to be more selective about purchasing high-sulfur (i.e., “sour”) crude oils. This drove down the demand for sour crudes and drove up the demand for lower sulfur (i.e., “sweet”) crudes, increasing the price differential between the two. So refiners had to pay more for sweet crudes, or invest heavily into new equipment that could remove the sulfur from the sour crudes. The net result was that after 2006, the price differential between gasoline and diesel flipped. According to data from the Energy Information Administration (EIA), in the decade prior to the implementation of ULSD, retail gasoline traded on average at a $0.04/gallon premium to retail diesel. And in the decade following implementation, diesel averaged $0.23/gallon over the price of gasoline. It has been estimated that the new IMO rules will apply to 3.5 million barrels per day of high-sulfur fuel oil, although post combustion gas scrubbers may allow some vessels to continue using the high-sulfur fuel. Most marine vessels will have to switch to cleaner distillate fuels like low-sulfur diesel, which will increase demand significantly.

Oil Production Vital Statistics September 2018 -- Four months have passed since the last update in May 2018 and it is time to take a fresh look at the global oil market, especially in light of the unique OPEC+Russia+others dealcoming to an effective end in July. This led to a predictable fall in the oil price, Brent losing >$6 / bbl on the news, but it has since recovered to >$77 / bbl and looks like it could head north of $80 in the coming weeks. What is going on in the oil markets? Global total liquids production hit a record high of 99.00 million barrels per day in July 2018 while the wheels once again appear to be coming off the wagon in Libya. Under-reported in the main stream news (MSN) is the fact that unrest seems to have spilled over once more in Libya knocking production back from 970,000 bpd in May to 670,000 bpd in July (inset image up top, Figure 17 below). The FT reported this on July 2: Libya’s national oil company has suspended crude loadings at two major oil terminals, which together with a separate port blockade is estimated to trigger a drop in production of 850,000 barrels a day just as global outages have tightened the market and fuelled prices. The dramatic fall in the country’s output, equivalent to almost 80 per cent of its production, comes as Brent has again been rising towards $80 a barrel. This spurred US president Donald Trump to call on Saudi Arabia to release 2m b/d of extra oil on to the market to offset a drop in Venezuela’s output and an expected fall in Iranian barrels.  FT: Political upheaval in Libya threatens oil production. The drop so far is less than anticipated by the FT – but perhaps there is more to come? While the MSN is alert to the political, economic and oil production woes in Venezuela, they seem less aware of the production woes else where in OPEC weak countries that saw  production fall well below the agreed targets. Comparing July with May production provides a clear picture of OPEC strengths and weaknesses:  [Table: Country - July – May = difference] The total for OPEC + Russia + others ~ 700,000, still short of the extra 1 Mbpd that was promised. Only time will tell if the OPEC strong are able to pull barrels out of the hat. And there are darker clouds for oil supplies on the horizon with sanctions on Iran expected to bite in the 4/4. Analysts expect a fall in Iranian crude exportsof between 0.5 and 1.0 Mbpd. Oil prices may be heading sharply higher by Christmas.

 Oil prices higher as U.S. sanctions limit Iran exports (Reuters) - Oil prices rose on Monday, supported by concerns that falling Iranian output will tighten markets once U.S. sanctions bite from November, but gains were limited by higher supply from OPEC and the United States. Brent crude oil was up 37 cents at $78.01 a barrel by 2:54 p.m. EDT (1854 GMT). U.S. crude was 30 cents higher at $70.10. The two benchmarks have risen strongly over the last two weeks with Brent gaining more than 10 percent on expectations that global supply will tighten later this year. During the U.S. trading day the markets saw thin volumes due to the U.S. Labor Day Holiday. The Saudi-led coalition fighting in Yemen said on Monday it had intercepted and destroyed a ballistic missile fired at the southern Saudi city of Jizan by the Iranian-aligned Houthis, who said separately they were targeting a Saudi Aramco facility. There were no reports of damage by the coalition, in a tweet by Saudi-owned Al Arabiya TV, or the Houthis, in a tweet by their al-Masirah TV. U.S. sanctions are already curbing exports from Iran. “Exports from OPEC’s third-biggest producer are falling faster than expected and worse is to come ahead of a looming second wave of U.S. sanctions,” said Stephen Brennock, analyst at London brokerage PVM Oil Associates. “Fears of an impending supply crunch are gaining traction.”

Oil Nears $80 Per Barrel - Oil prices rose a bit on Monday, with stronger gains in early trading on Tuesday, building on last week’s rally. Expectations of significant supply losses from Iran helped lift prices. “Exports from OPEC’s third-biggest producer are falling faster than expected and worse is to come ahead of a looming second wave of U.S. sanctions,” said Stephen Brennock, analyst at London brokerage PVM Oil Associates. “Fears of an impending supply crunch are gaining traction.” A tropical storm heading for the Louisiana coast could form into a hurricane before it makes landfall on late Tuesday or early Wednesday. “It is possible that Gordon could peak as a Category 1 hurricane after 36 hours, just before landfall occurs,” Senior Hurricane Specialist Stacy Stewart wrote in his forecast on Monday. As of now, there could be life-threatening storm surge for the coast, but little effect on oil and gas infrastructure is expected. A couple oil companies, including Anadarko Petroleum announced temporary closures at oil fields in the Gulf, but the interruptions are expected to be temporary. The region produces about 17 percent of the nation’s oil and 5 percent of its natural gas. Despite reports last week that suggested that U.S. oil production fell in June, the EIA said that output rose by 231,000 bpd in June compared to a month earlier. Production stood at 10.674 million barrels per day, dispelling fears that U.S. shale output was grinding to a halt because of pipeline problems. Midstream bottlenecks are an obstacle to the Permian, but so far there is inconclusive evidence that the industry is suffering from a slowdown. Iran’s oil minister alluded to the fact that his nation could try to work around U.S. sanctions to ensure oil exports continue. Offering discounts, bartering and even smuggling are just a few of the tactics on hand. Estimates obviously run the gamut, but FGE, a consultancy, says that Iran could keep oil exports at around 800,000 bpd using some of these strategies.

U.S. oil prices rise as Gulf platforms shut ahead of hurricane -  Oil prices rose on Tuesday as the market prepared for potential supply disruptions due to a hurricane forecast to hit the U.S. Gulf Coast, but gains were capped by a report that Cushing, Oklahoma, stockpiles rose last week.U.S. West Texas Intermediate (WTI) crude futures rose 7 cents to $69.87 a barrel after hitting a session high of $71.40. U.S. markets were closed on Monday for Labor Day.Brent crude, which traded on Monday, hit a session high of $79.72 before paring gains.Both benchmarks jumped earlier after the evacuation of two Gulf of Mexico oil platforms in preparation for Tropical Storm Gordon. The storm was expected to become a hurricane before it makes landfall as a Category 1 hurricane near the Mississippi-Alabama border.Vessel traffic along the U.S. Gulf Coast on Tuesday was under restrictions ahead of Gordon.The Gulf of Mexico is home to 17 percent of U.S. crude oil production and 5 percent of natural gas output daily, according to the U.S. Energy Information Administration. On land, the Gulf Coast serves as a major U.S. refining hub.Prices moved lower in mid-morning trading, however, as market participants saw the market as overbought, said Phil Flynn, analyst at Price Futures Group in Chicago."That doesn't mean the storm premium buying is over by any stretch of the imagination," Flynn said. "It was just a little ahead of itself. There's still a few hours to see what the storm is going to do and what other infrastructure is going to be impacted." Prices also pulled back from earlier highs after Cushing, Oklahoma, crude inventories rose nearly 754,000 barrels from Aug. 24 to Friday, traders said, citing a report from market intelligence firm Genscape.

Oil steady ahead of Storm Gordon; weighed by dollar, Cushing build (Reuters) - Oil prices were little changed on Tuesday, as energy infrastructure on the U.S. Gulf Coast braced for a hurricane, but gains were capped as a stronger dollar and report of rising stockpiles at the Cushing, Oklahoma hub weighed. U.S. West Texas Intermediate (WTI) crude futures rose 7 cents to settle at $69.87 a barrel after earlier hitting a session high of $71.40. U.S. markets were closed on Monday for Labor Day. Brent crude, which traded on Monday, was ended 2 cents firmer to settle at $78.17 a barrel, down from a session high of $79.72. Both benchmarks jumped earlier in the session as more oil producers pulled employees out of Tropical Storm Gordon’s path and shut-in 9 percent of U.S. Gulf of Mexico oil and gas production on Tuesday. But the storm, expected to make a nighttime landfall as a category 1 hurricane, shifted eastward, reducing its threat to major production areas and most Gulf Coast refineries. Vessel traffic along the U.S. Gulf Coast was also under restrictions ahead of Gordon. The Gulf of Mexico is home to 17 percent of U.S. crude oil production and 5 percent of natural gas output daily, according to the U.S. Energy Information Administration. On land, the Gulf Coast serves as a major U.S. refining hub. Prices moved lower, however, as market participants saw the market as overbought. “Initial reaction this morning appeared exaggerated as disruption to Gulf of Mexico production infrastructure isn’t likely to extract a major amount of crude from the market," “The larger impact of the storm is apt to fall on Gulf coast refinery activity that could be affected by power outages.” Weighing on oil prices, Cushing, Oklahoma, crude inventories rose nearly 754,000 barrels from Aug. 24 to Friday, traders said, citing a report from market intelligence firm Genscape. A rising U.S. dollar index also pushed crude futures lower. A stronger dollar makes greenback-denominated oil more expensive for holders of other currencies.

Crude Oil Prices Settle Higher Ahead of Storm Gordon - WTI crude oil prices settled marginally higher Tuesday amid expectations for supply disruptions as a hurricane is expected to make landfall on the U.S. Gulf coast. But gains were limited by a report of rising supplies at Cushing, Okla. On the New York Mercantile Exchange, crude futures for October delivery rose 7 cents to settle at $69.87 a barrel, while on London's Intercontinental Exchange, Brent fell 0.44% to trade at $77.81 a barrel. Oil prices made a bright start to the session after reports that two Gulf of Mexico oil producers took precautionary measures ahead of the arrival of Tropical Storm Gordon. The storm is expected to become a hurricane before it makes landfall as a Category 1 hurricane near the Mississippi-Alabama border. The storm threatens oil production and refinery activity in the oil-rich Gulf area, which makes up about one-sixth of U.S. oil production and 45% of its refining capacity. The initial surge in oil prices, however, came under pressure after a report of rising supplies at a domestic delivery hub at Cushing, Oklahoma. Information provider Genscape reportedly said U.S. crude inventories at Cushing had risen in the week, according to traders. Stockpiles at the hub rose by 0.754 million barrels from Aug. 24 to Friday. The prospect of rising domestic supplies comes against a backdrop of fears that global supplies are set to come pressure amid signs that Iran's oil exports are facing pressure ahead of U.S. sanctions slated for early November. President Donald Trump pulled the United States out of the Iran nuclear agreement in May, allowing sanctions against Iran to snap back into place. The first wave of sanctions went into effect last month and a second set of sanctions on Iran's crude exports are slated for early November. 

Oil drops towards $77 as U.S. storm threat eases (Reuters) - Oil fell towards $77 a barrel on Wednesday as a tropical storm hitting the U.S. Gulf coast weakened and moved away from oil-producing areas, easing supply concerns. Crude had jumped the previous day as oil companies shut dozens of offshore platforms in anticipation of damage from tropical storm Gordon. But by Wednesday the storm was weakening, reducing its threat to oil producers. “Tropical storm Gordon made an uneventful landfall after dashing expectations that it would strengthen to a hurricane,” said Stephen Brennock of oil broker PVM. “Instead, it weakened considerably and deviated away from oil-producing areas, which, as a result, has taken the wind out of bulls’ sails.” Brent crude, the global benchmark, fell 78 cents to $77.39 a barrel by 1113 GMT. On Tuesday prices had climbed to $79.72, their highest since May. U.S. crude was down 88 cents at $68.99. “Storm in a teacup,” said analysts at JBC Energy, referring to Gordon’s limited impact on oil pricing. Oil could draw some support if weekly reports on U.S. inventories show a drop in crude inventories, as expected. Analysts estimate, on average, that stocks fell by about 1.9 million barrels last week. The American Petroleum Institute, an industry group, releases its supply report at 2030 GMT on Wednesday, a day later than usual because of the Labor Day holiday on Monday. Official government figures are due on Thursday.

Oil falls more than 1 percent as storm fears ease, demand concerns mount - (Reuters) - Oil prices fell more than one percent on Wednesday after a U.S. Gulf storm weakened and moved away from oil-producing areas and as concerns mounted about global trade disputes and Turkey’s currency crisis hurting demand. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell $1.15 to settle at $68.72 a barrel, a 1.65 percent loss. Brent crude LCOc1 futures fell 90 cents to settle at $77.27 a barrel, a 1.15 percent loss. The global benchmark had climbed in the previous session to $79.72 a barrel, its highest since May. Both benchmarks fell further in post-settlement trade after data from industry group the American Petroleum Institute showed a slightly smaller than expected draw in U.S. crude inventories. Data was published a day later than usual because of the U.S. Labor Day holiday on Monday. [API/S] Crude prices had jumped on Tuesday as oil companies shut dozens of offshore platforms in anticipation of damage from Tropical Storm Gordon. The storm, however, never became a hurricane and by Wednesday energy companies and port operators along the U.S. Gulf Coast took steps to resume operations. “Prices yesterday rose in anticipation that the storm could inflict some damage on the production and refining sector, but after all was said and done we lost a little bit of production and the refineries in Mississippi and Louisiana continued to run as Gordon made landfall,” In all, companies halted 156,907 barrels per day of oil production, according to estimates Tuesday by the U.S. Bureau of Safety and Environmental Enforcement. Oil also weakened as the United States-China trade dispute raised demand worries. Trump could impose levies on $200 billion more of Chinese imports after a public comment period on the new tariffs ends on Thursday. OPEC Secretary-General Mohammad Barkindo said global trade disputes could hurt energy demand in the future. Also weighing on crude futures was a currency crisis in Turkey. The lira has fallen more than 40 percent this year. “Fears of Turkey’s currency crisis spreading to other emerging markets have prompted demand-side concerns,” 

WTI Extends Losses After Smaller Than Expected Crude Draw - WTI continued to drift lower today into the inventory data amid concern that “emerging-market contagion is going to suppress economic growth and limit demand,” said Gene McGillian, manager of market research at Tradition Energy.  API reported a third weekly draw in a row for Crude inventories but WTI extended the day's losses as the 1.17mm draw was smaller than the expected 2.99mm draw (and stocks rose at Cushing and for gasoline and distillates). API:

  • Crude -1.17mm (-2.9mm exp)
  • Cushing +613k (+600k exp)
  • Gasoline +1.0mm
  • Distillates +1.8mm

“The market was clearly overheated on storm concerns,” said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida. “The real sharp run-up yesterday was quite an overreaction.”   WTI sat right around $69 ahead of the API data but extended the day's losses

 Saudi Arabia raises October crude prices to Europe, cuts Asia  (Reuters) - Saudi Aramco has raised the European price for its Arab Light crude grade for October, the state oil producer said on Wednesday, as Russian Urals prices rally and European refiners seek to replace Iranian oil supplies ahead of the November U.S. sanctions deadline.  Aramco has raised the official selling price (OSP) to Northwest Europe by $1.45 a barrel from the previous month, putting it at a discount of $1.80 per barrel to ICE Brent. Russian Urals crude prices have rallied in recent weeks as European refineries’ appetite for crudes similar to Iran’s has pushed up prices. Urals prices in NorthWest Europe are currently at the strongest this year, and are not far off a five year high. Iran’s oil exports are already dropping fast as refiners scurry to find alternatives ahead of a reimposition of U.S. sanctions in early November. Aramco also cut its October OSP for Arab Light to Asia by $0.10 a barrel versus September, putting it a premium of $1.10 a barrel to the Oman/Dubai average. Saudi Arabia was expected to keep prices for the light crude grades it sells to Asia largely unchanged in October from the previous month to keep its oil competitive against other suppliers, according to a Reuters survey. The Arab Light OSP to the United States was set at a premium of $1.00 a barrel to the Argus Sour Crude Index (ASCI) for October, up $0.10 a barrel from the previous month.

The Bearish Case For Oil -- A relatively new development in global oil markets has unfolded in recent months, one that has replaced another new development that also has the ability to also roil oil markets. Renewed concerns of a heightened trade war between Washington and Beijing are bringing more pressure on global oil markets than the impending removal of more than 1 million barrels per day (bpd) of Iranian oil due to fresh U.S. sanctions, ushering in two market movers that traders did not have to wrestle with just a few months ago. Iran is OPEC’s third largest crude oil producer.On Friday, global oil bench mark Brent crude fell 35 cents to settle at $77.42 per barrel,while NYMEX-traded U.S. benchmark West Texas Intermediate (WTI) was down 45 cents for the day to settle at $69.80 per barrel. Granted, oil closed the month of August higher, with Brent up 4.3 percent for the month, and WTI up 1.5 percent, but going forward, those gains could be pared by growing trade war concerns and economic fallout from increased tariffs between the world’s two largest economies. President Trump will likely move ahead this week with more duties for Beijing, putting in place another $200 billion in tariffs on Chinese goods, Bloomberg reported on Friday, citing six people familiar with the matter. The move would mean that around 50 percent of Chinese exports to the U.S. would be subject to extra duties. Companies and the public have until September 6 to submit comments on the extra proposed tariffs before the president puts them in place. The administration could levy the new duties all at once or put them in place in stages. Beijing, for its part, has threatened to retaliate with $60 billion worth of new duties on U.S. imports to China. Trump has threatened to up the ante even more, stating recently that he’s ready to put new tariffs on all $505 billion worth of Chinese products imported to the U.S. The problem for China is manifold since it simply can't go toe to toe with the U.S. in a retaliatory tit-for-tat fashion since the U.S. imports nearly five times the dollar value in goods from China than China imports from the U.S. According to the U.S. Census Bureau, China imported only $129.9 billion in U.S. goods last year compared to some $505 billion the U.S. imported from China.

Oil prices fall on emerging market woes, looming tariff deadline - Oil prices dipped on Thursday as emerging market turbulence weighed on sentiment, while a deadline neared for a potential new round of U.S. tariffs on another $200 billion of Chinese goods. U.S. sanctions against Iran, however, prevented prices from falling further as they are expected to tighten the market after being implemented from November, traders said. U.S. West Texas Intermediate (WTI) crude futures were at $68.59 per barrel at 0645 GMT, down 13 cents, or 0.2 percent, from their last settlement. Brent crude futures fell by 4 cents, to $77.23 a barrel. Emerging market woes are weighing on global economic growth prospects, with Asian shares on Thursday heading for their sixth straight session of losses. Meanwhile, a public comment period on possible U.S. tariffs on another $200 billion of Chinese goods ends on Thursday, with expectations that U.S. President Donald Trump will impose the additional levies. "The prospects of increased supplies from OPEC and her allies, and weaker demand from China and other emerging markets could weigh further on oil prices going forward, or at least limit the upside potential," said Fawad Razaqzada, analyst at futures brokerage Forex. "This is because of the U.S. dollar's strength, weighing heavily on emerging market currencies, including the yuan, which in turn has pushed up the costs of all dollar-denominated commodities," he said. U.S. crude stockpiles fell last week as refineries boosted output amid strong consumption, data from industry group the American Petroleum Institute showed on Wednesday. Crude inventories fell by 1.17 million barrels to 404.5 million barrels in the week to Aug. 31, while refinery crude runs rose by 198,000 barrels per day (bpd), the data showed. The Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday it expected global oil demand to break through 100 million bpd for the first time this year. Meanwhile, there are concerns that U.S. sanctions against Iran, which will target the OPEC-member's oil industry from November, will tighten global supply.

WTI Tumbles On Inventory, Demand Disappointments - WTI has traded sideways (below $69) since last night's smaller than expected crude draw from API, but algos could not figure out what to do as crude inventories dropped notably but products and Cushing saw stocks rise.Investors “will look at export numbers to get a handle on global demand to see if it is softening,” Phil Flynn, senior market analyst at Price Futures Group, says. At the same time, focus will be on refiner demand for crude with fall maintenance season beginning, he says.NOTE - Tropical Storm Gordon won't have any impact on this week's report. It should show up in next week's report. DOE:

  • Crude -4.302mm (-2.9mm exp)
  • Cushing +549k (+600k exp)
  • Gasoline +1.845mm (-1.5mm exp)
  • Distillates +3.199m (+700k exp)

Crude inventories drewdown by a4.3mm - considerably more than API and expectations - but Cushing stocks rose for the 4th week in a row and Gasoline and Distillates also both saw inventory builds.  Production was unchanged last week (remember that unless production rises by 100k, the incremental change in the new data is ignored). Interesting, as the 2018 summer driving season draws to a close, Bloomberg notes that it hasn't been a memorable one as far as gasoline demand is concerned. Consumption -- measured on a four-week moving average basis -- has lagged last year's level, as stubbornly high pump prices crimped driving. Low deliveries in early August may support demand for a couple of weeks, but the trend is likely to be downward over September and October.

China Trade War Fears, EIA Report Keep Crude in Check -  Concerns about trade between the United States and China, coupled with a mixed U.S. government report, contributed to bearish crude oil price movement Thursday. “West Texas Intermediate has retreated a bit from the $70 level, primarily due to ongoing fears of a trade war with China,” said Robert Rapier, Chief Energy Analyst for Investing Daily, told Rigzone. Also influencing the crude oil benchmark was the latest inventory data report from the U.S. Energy Information Administration (EIA), which indicated mixed results, Rapier noted. The October WTI futures price settled at $67.77 a barrel Thursday, losing 95 cents for the day after trading within a range from $67.00 to $69.02. The November Brent contract also ended the day lower, settling at $76.50 – a 77-cent decline. “The EIA reported a bullish 4.3-million-barrel decline in domestic crude oil stocks, while the market had been expecting a 2.5-million-barrel decline,” Rapier said. “That puts overall U.S. crude inventories right in the middle of the five-year average range, but inventories in Cushing, Okla., are still quite low. Nevertheless, after falling for 12 straight weeks, they have now reversed direction and shown a build for four straight weeks. I think that gives traders a bit more confidence that the market is adequately supplied.” Rapier also pointed out that the EIA report’s gasoline and distillate inventory figures surprised traders by revealing an unexpected build. “Combined, inventories for these two finished products rose by nearly 5 million barrels, contrary to an expected 1.5-million-barrel draw,” Rapier explained. “That puts downward pressure on gasoline prices.” 

Crude Oil Prices Settle Lower on Surging Fuel Stockpiles - - WTI crude oil prices settled lower Thursday as a draw in U.S. crude supplies was offset by sharp builds in product inventories.  On the New York Mercantile Exchange crude futures for October delivery fell 1.4% to settle at $67.64 a barrel, while on London's Intercontinental Exchange, Brent fell 0.79% to trade at $76.66 barrel. Inventories of U.S. crude fell by 4.302 million barrels for the week ended Aug. 31, beating expectations for a draw of 1.294 million barrels, according to data from the Energy Information Administration (EIA).The large draw in crude supplies comes despite a modest climb in imports by about 0.500 million barrels per day (bpd), while exports declined by 0.271 million bpd, data from EIA showed. Production was unchanged at 11.0 million bpd for the second-straight week, which also supported the draw in crude supplies.Gasoline inventories unexpectedly rose by 1.845 million barrels, confounding expectations for a draw of 0.810 million barrels, while supplies of distillate -- the class of fuels that includes diesel and heating oil -- rose by 3.119 million barrels, against expectations for a build of just 0.742 million barrels.The build in products emerged as refinery activity rose to 96.6% of their capacity last week from 96.3% the prior week, with crude inputs averaging about 17.65 million barrels per day during, up 0.081 million barrels from the prior week, the EIA said.Oil prices were also pressured by concerns that U.S.-China trade war could intensify as traders await confirmation on whether the Trump administration will move ahead with a 25% tariff on $200 billion more of Chinese imported goods.China, the world's largest oil importer, has seen its economic growth wane in the wake of a trade dispute with the U.S., and some fear that another round of tariffs on Beijing could exacerbate the decline, pressuring oil demand growth.Still, analysts continued to tout a bullish backdrop for oil prices, citing oil supply risk from looming U.S. sanctions on Iran's oil industry, and the prospect of disruptions to domestic oil production, owing to U.S. hurricanes. "Attempts by the three largest oil producers -- U.S., Russia and Saudi Arabia -- to manage oil markets to prevent further rises in oil prices, have been superseded by geopolitical supply-side concerns, with Iranian supply and U.S. hurricanes at the top of the list," 

Oil prices climb as U.S. crude inventories drop -- Oil prices rose on Friday after U.S. crude inventories fell to their lowest levels since February 2015.  U.S. West Texas Intermediate (WTI) crude futures were at $67.90 per barrel at 0056 GMT, up 13 cents, or 0.2 percent, from their last settlement.  International Brent crude futures climbed 12 cents, or 0.2 percent, to $76.62 a barrel.  "Oil inventory data released last night showed a larger-than-expected draw in crude inventories," said William O'Loughlin, investment analyst at Australia's Rivkin Securities.  U.S. commercial crude oil inventories fell by 4.3 million barrels to 401.49 million barrels in the week to Aug. 31, the lowest since February 2015, U.S. Energy Information Administration (EIA) data showed on Thursday. Despite that, analysts said prices were curbed by a rise in refined product stocks and a relatively weak U.S. peak fuel consumption season this summer.  Gasoline stocks rose by 1.8 million barrels, while distillate stockpiles, which include diesel and heating oil, climbed by 3.1 million barrels, the EIA data showed.  "Gasoline and distillates inventories both rose substantially. The U.S. summer driving season has proven to be a lacklustre one in terms of gasoline demand," said O'Loughlin.  U.S. crude oil production last week remained at a record 11 million barrels per day (bpd), a level it has largely been at since July.

US Rig Count Holds Steady As Oil Prices Slip -  Baker Hughes reported no change to the number of active oil and gas rigs in the United States on Friday. Oil and gas rigs held at 1,048 according to the report, with the number of active oil rigs falling by 2 and the number of gas rigs increasing by 2. The oil and gas rig count is now 104 up from this time last year. At 12:23pm. EDT on Friday, WTI Crude was trading down 0.63 percent at $67.35—almost $3 per barrel from this time last week, while Brent Crude traded down 0.25 percent at $76.31—about $1.50 below last week’s levels—as Iran’s oil exports continue to slip heaving into November when the US sanctions kick in and as troubled Venezuela concocts plans to pump and export more oil to no avail. Canada’s oil and gas rigs for the week fell sharply, by 24, bringing its total oil and gas rig count to 204, which is just 2 more than this time last year, with an 18-rig decrease for oil and a 6-rig decrease for gas for the week. The price of Western Canada Select (WCS) was trading down on Friday, trading down 2.45% at $37.77, essentially flat week on week.  While the Permian basin still boasts 102 more rigs than this time last year, the Utica, Arkoma Woodford, Barnett, Cana Woodford, DJ-Niobrara, Granite Wash, and the Mississippian basins each have fewer rigs than they did a year ago. While the number of rigs in the United States are 104 more than this time last year, the EIA’s estimates for US production for the week ending August 31 were for an average of 11 million bpd, compared to 8.78 million bpd a year ago this week. By 1:09pm EDT, WTI was trading down 0.59% (-$0.40) at $67.37. Brent crude was trading down 0.24% (-$0.18) at $76.32 per barrel.

Permian, Haynesville Decline, but BHGE U.S. Rig Count Steady - The overall U.S. rig count held flat at 1,048 for the week ended Friday (Sept. 7) as rigs departed the Permian Basin, Cana Woodford and the Haynesville Shale, according to data from Baker Hughes. The United States added two natural gas rigs to offset the departure of two oil rigs. The domestic drilling tally saw a net gain of one horizontal unit, offsetting a net loss of one vertical. Two land units packed up, while one returned to the Gulf of Mexico and one came back to inland waters, according to BHGE. The U.S. rig count finished the week 104 rigs above its year-ago tally of 944. In Canada, 24 rigs exited the patch for the week, including 18 oil-directed units and six gas-directed. That left the combined North American rig count down on the week to 1,252 but still higher than the 1,146 rigs running at this time last year. Among plays, the Permian Basin dropped two rigs from its total to end at 484 (382 a year ago). The Cana Woodford dropped one rig to fall to 66 (67 a year ago), with a breakout of BHGE data by NGI’s Shale Daily showing the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties (aka, the STACK) losing one unit for the week to fall to 36 from 49 in the year-ago period. The Haynesville Shale and Mississippian Lime each dropped a rig for the week, while the Denver Julesburg-Niobrara formation and Williston Basin each added one rig, BHGE data show. Among states, Louisiana picked up three rigs on the week to grow its tally to 58 (65 a year ago), while Wyoming added two rigs to reach 31, improving on its year-ago tally of 25. New Mexico and Oklahoma each saw two rigs exit the patch. Alaska added one rig for the week, while Kansas and Utah each fell by one.

Crude Oil Prices Settle Down to Extend Losing Streak as Trade Concerns Weigh -  WTI crude oil prices settled marginally lower Friday, as signs of tightening U.S. output were offset by a stronger dollar and fears rising U.S.-China trade tensions could hamper oil demand. On the New York Mercantile Exchange, crude futures for October delivery fell 2 cents to settle at $67.75 a barrel, while on London's Intercontinental Exchange, Brent rose 0.38% to trade at $76.80 a barrel. Oilfield services firm Baker Hughes reported on Friday that the number of U.S. oil drilling rigs in operation fell by 2 to 860. The fall in rig counts, pointing to signs of contracting crude output, echoed data from a day earlier showing U.S. output remained unchanged from the prior week at 11.0 million barrels a day. Crude oil prices were pressured by a rising dollar on the back of upbeat U.S. labor market data, and signs that President Donald Trump remains committed to impose fresh tariffs on imported Chinese goods. “I hate to say this, but behind that there is another $267 billion ready to go on short notice if I want,” Trump said, referring to levies on additional goods imported from China. China, the world's largest commodity importer, has seen econonomic performance hit in the wake of the trade war with the U.S. and a further escalation could dent growth, forcing Beijing to rein in crude imports. Beyond trade, analysts continued to highlight supply risks, owing to production outages within OPEC that could support oil prices. SEB Markets said OPEC's spare capacity is "running thin," at just about 1 million barrels a day, as "supply is disturbed within the group," following ongoing production outages in Venezuela and already declining Iranian crude exports a result of U.S. economic sanctions. 

Emirates boss says oil price is too high and should be at $52 per barrel -- Airline fuel is overpriced, and the underlying cost of oil should sit around $52 per barrel, Tim Clark, President of Emirates told CNBC Friday. "I am one of these people that says it is hugely overpriced. If you are at $77 or $83 dollars (per barrel) it should be at $52. That's where it needs to be," Clark said in an interview with CNBC's Joumanna Bercetche on the side-lines of The Aviation Festival in London."Those people, those countries, those entities that say they can't make money on $52, they need to be doing something else," he added.The oil price has risen about 20 percent in 2018, and on Friday morning, Brent crude futures traded at around $76.48. U.S. West Texas Intermediate (WTI) crude futures sat at $67.76.Clark added that as spot prices for oil were now roughly matching the futures price, the market had sensed the oil price was unlikely to rise further from this point."I think fuel is now capped out. The forward curve is flat," he said before adding "There's a certain amount of flakiness going forward that fuel will rise above where it is today. That's my view," Clark said.Emirates, which employs approximately 25,000 cabin crew staff around the world, has seen growth hampered by a prolonged period of lower oil prices in recent years — a key driver of wealth in the Gulf region.Clark said fuel prices for his airline were now running at roughly 44 percent higher than the same time last year. However, he warned however that many oil producers weren't exhibiting a traditional response to a higher price."As the oil producing countries, largely in the Middle East get a benefit of that, historically there was an uptick very rapidly in demand, but we are not seeing that," Clark said.

Iraq Is Facing A Major Internal Crisis - Despite the fact that production and export figures presented by Iraqi sources are showing a significant improvement, optimism should be tempered. Iraq continues to head towards a major showdown between the two main political rival blocks, led by Prime Minister Al Abadi and former PM Al Maliki. Both are currently in a race to lead the country, while being confronted by internal and external threats.Iraqi oil production and export figures are showing very positive developments, even though internally, the country is teetering on the brink. The latest data from the Iraqi ministry of oil shows that it has boosted its southern crude oil exports to 3.583 million b/d in August, 40,000 bpd higher than in July. Since the OPEC meeting in Vienna, Baghdad has been pushing to increase its total production to a three-month average of 3.549 million b/d, an increase of 109,000 b/d from the first five months of 2018.It is surprising to see that even with continuing unrest in the Basra region, exports from its southern terminals are up. Loadings from the Khor al-Amaya terminal have been suspended since the start of 2018. Iraq’s State Oil Marketing Organization (SOMO) reported that 2.727 million b/d of Basrah Light have been shipped from the terminals, along with 856,000 b/d of Basrah Heavy crude. At present another seven tankers have berthed, while four are waiting for their turn, with a total of around 7 million barrels.Northern Iraqi oil figures are also promising, as exports from the semi-autonomous Kurdistan Regional Government to the Turkish Mediterranean port of Ceyhan are have kept up. Kurdish sources indicate that the KRG is currently 445,000 bpd to Ceyhan, which is a 40 percent increase in comparison to July. Government oil production in the north however is still blocked, as there is no agreement still between Baghdad and the KRG. A potential 200,000 bpd is currently not being exported due to this issue. The future could however be less bright than the above data suggests. The country is facing a total shutdown if the competing political blocks are not able to reach a deal in the parliament soon. Several days ago the Iraqi parliament met for the first time since the May elections. At present, current Prime Minister Haider al-Abadi is still trying to reach a majority coalition, but is until now blocked by his rivals, led by former Prime Minister Nouri al-Maliki. After several heated discussions, no solution has been reached.

Basra Oil Facility Stormed By Protesters, 2 Hostages Taken In Growing Chaos - The situation in the southern Iraq city of Basra is continuing to escalate after rioters burned down the city's sprawling Iranian consulate, and amidst unconfirmed rumors that the local American consulate may be under threat, though said to be under heavy guard by Iraqi national forces. During the night hours Friday protesters have reportedly stormed an oil facility and are holding two staff workers hostage. The incident is unfolding at the West Qurna 2 oilfield, which is run by the Russian multinational energy company Lukoil. According to a breaking Reuters report:Protesters entered a water treatment facility linked to the West Qurna 2 oilfield, managed by Lukoil, and held two Iraqi employees hostage on Friday, according to a Lukoil source and a source with Basra’s energy police.The precise identities of the hostages or the particular group holding them is still unknown at this point. Lukoil is a Moscow-based corporation. Reuters continues: West Qurna 2 oilfield lies 65 km (40 miles) north-west of Basra - a city hit by days of protests. The field produces 390-400,0000 barrels per day and a disruption of three days would be enough to completely shut down the field, the Lukoil source added. Iraqi authorities in Basra have declared a city-wide curfew as well as a state of emergency.  Meanwhile, Iraq’s highest-ranking Shia cleric, Grand Ayatollah Ali al-Sistani, on Friday condemned the violence, which has left multiple protesters dead and scores wounded in clashes with security forces, and after buildings across the city have been torched.  But Sistani also expressed solidarity with their grievances, saying that Iraqis "no longer tolerate more government failures in providing basic services."

Mass social unrest leaves Iraq’s oil capital in flames - Iraq’s southern city of Basra, the country’s oil capital and center of its Shia majority, has seen mass protests that have left many of the buildings housing offices of the government, the main political parties, Shia militias and even the Iranian consulate in flames.Iraqi security officials announced a curfew Friday across this city of 2 million, warning that anyone found in the streets would be arrested. An earlier attempt to impose such a curfew was rescinded after crowds defied the government and set up blockades across the Basra-Baghdad highway and the main port of Umm Qasr on the Persian Gulf, through which flow both Iraqi oil exports and food supplies as well as other goods imported into the country.At least a dozen protesters have been killed in the course of the demonstrations, many of them victims of live fire by security forces. One demonstrator died Thursday night after being shot in the head with a teargas cannister.Hundreds have been arrested, with reports that detainees have been routinely tortured. Two lawyers who came forward to represent the arrested demonstrators were assassinated.Among the buildings torched by demonstrators were the offices of the state-run Iraqiya TV, the headquarters of the ruling Dawa Party, the Supreme Islamic Council and the Badr Organization, all of whose leaders are in Baghdad conducting corrupt, but so-far unsuccessful, attempts to cobble together a new ruling coalition government.Protesters set fire to the offices of the Shia armed militia, Asaib Ahl al-Haq, as well as those of the Hikma Movement. They also stormed the house of the acting head of the provincial council. The attack on the Iranian consulate stemmed at least in part from the fact that Iran cut off electricity supplies to the region after the Iraqi government failed to pay for them. The Iranian government has also been identified with the leading Shia parties that have dominated the regime in Baghdad, and the Iranian media had denounced earlier protests as the work of “infiltrators,” much as it had reacted to similar protests in Iran itself.

The major uprising in Basra and southern Iraq is what the world should be worrying about in the Middle East right now -- The current protests in Iraq are the most serious seen in the country for years, and are taking place at the heart of some of the world’s largest oilfields. The Iraqi government headquarters in Basra was set ablaze, as were the offices of those parties and militias blamed by local people for their wretched living conditions. Protesters have blockaded and closed down Iraq’s main sea port at Umm Qasr, through which it imports most of its grain and other supplies. Mortar shells have been fired into the Green Zone in Baghdad for the first time in years. At least 10 people have been shot dead by security forces over the last four days in a failed effort to quell the unrest.If these demonstrations had been happening in 2011 during the Arab Spring then they would be topping the news agenda around the world. As it is, the protests have so far received very limited coverage in international media, which is focusing on what might happen in the future in Idlib, Syria, rather than on events happening now in Iraq.Iraq has once again fallen off the media map at the very moment when it is being engulfed by a crisis that could destabilise the whole country. The disinterest of foreign governments and news outlets has ominous parallels with their comatose posture five years ago when they ignored the advance of Isis before it captured Mosul. President Obama even dismissed, in words he came to regret, Isis as resembling a junior basketball team playing out of their league.The causes of the protests are self-evident: Iraq is ruled by a kleptomaniac political class that operates the Iraqi state apparatus as a looting machine. Other countries are corrupt, notably those rich in oil or other natural resources, and the politically well connected become hugely wealthy. However big the rake-off, something is usually built at the end of the day. In Iraq it does not happen that way, and among the angriest victims of 15 years of wholesale theft are the two million inhabitants of Basra. Once glorified as the Venice of the Gulf, its canals have turned into open sewers and its water supplies are so polluted as to be actually poisonous.

Facebook blocked in Tripoli and other cities as fighting rages: residents  (Reuters) - Facebook has been blocked in the Libyan capital of Tripoli and other cities, residents said on Monday as fighting between rival groups raged. Facebook is the main platform for news in Libya with officials, ministries and armed groups that effectively control the country posting statements there. The blockage started at noon, angry users wrote on Twitter. Several Libya residents confirmed they could not access Facebook. Tripoli has been shaken by more than a week of clashes between rival groups, the latest episode of chaos in the North African country since the toppling of Muammar Gaddafi in 2011. There was no clear response from officials over who was behind the blockage. Non-Facebook websites could be accessed, residents said. Libyan utility LPTIC, which owns the two state telecoms firms, said in a statement that a lack of security had led to outages. Maintenance engineers were unable to reach some stations which had stopped working due to a lack of power. It did not address the Facebook issue. Access to the web is controlled by state firms and monitored by security bodies which are effectively controlled by armed groups working with the powerless U.N.-backed government in Tripoli. Newspapers play no role in Libya and independent national media based inside the country scarcely exists as journalists often face threats from armed groups or officials unhappy with critical coverage. 

Saudi Arabia plans to dig canal turning Qatar into an island - A senior adviser to Saudi Crown Prince Mohammed bin Salman appeared to confirm that the kingdom is considering digging a canal along the border with the Qatari peninsula, effectively turning it into an island."I am impatiently waiting for details on the implementation of the Salwa island project, a great, historic project that will change the geography of the region," Saud al-Qahtani posted on Twitter Friday.Reports of the canal first emerged back in April on Sabq, a news website with close links to the Saudi royal family. However, al-Qahtani's remarks were the clearest reference yet that the Saudi regime is serious about the initiative.  The original report suggested that the canal would stretch some 60 kilometers (37 miles) along the Qatari border and measure around 200 meters (650 feet) in width. The cost of the project is expected to reach up to 2.8 billion riyals (€645 million, $750 million). Part of the canal is expected to host a nuclear waste facility. Further reports in the Makkah newspaper suggested that five unnamed construction companies had been invited to bid on the project, with a winner set to be announced in September.

Iran’s Response To Sanctions? Ignore Them - The current Iranian narrative—that economic problems stem from domestic mistakes rather than foreign pressure—complicates the U.S. policy of using sanctions to force change.On August 28, President Hassan Rouhani answered questions before the Majlis about Iran’s economic problems, only the second time in the Islamic Republic’s history that a president has come before the parliament. He was asked about unemployment, slow economic growth, the fall of the rial, cross-border smuggling, and the fact that Iranian banks still lack access to global financial services. The Majlis formally voted to reject his explanations on most of these issues; only his answers about bank access were accepted.This came on the heels of the parliament’s August 26 vote booting out Finance Minister Masoud Karbasian. In fact, the president is under pressure to change his entire economic team: he already sacked the Central Bank governor, while the Majlis threw out the labor minister and is now considering a motion against the minister of industry, mine, and trade. U.S. officials may argue that most of Iran’s economic problems are due to renewed American sanctions, and they are largely correct—but that is not the central complaint being voiced in Tehran. In an August 16 speech, Supreme Leader Ali Khamenei spoke at length on the theme, concluding that “although sanctions have played a role, the main source of the current economic problems can be traced back to internal mismanagement and actions.” Indeed, for all the Western focus on the problems that Iran’s banks have had connecting to the world financial system, that was the one issue on which Rouhani could satisfy the Majlis. If U.S. officials aim to increase public pressure on the regime, they will need to address a domestic narrative in which perception is rapidly becoming reality.  Indeed, many Iranians blame the recent currency collapse on corrupt manipulation of the gaps between official and free market rates. Khamenei voiced this widely heard complaint in his speech: “The foreign currencies provided were either used by a small group or sold to smugglers who took it abroad or sold it to those who hoarded it, to sell it later for two or three times the value and gain an overnight fortune.” Ahmad Araqchi, the Central Bank deputy governor in charge of foreign currency affairs, was arrested on exactly this charge.

How Iran Could Counter U.S. Sanctions - Donald Trump is targeting Iran’s oil, but U.S. sanctions alone might not be enough to shut down the Islamic Republic’s economic lifeline. Discounts, bartering and smuggling — even disabling the tracking systems on its fleet of tankers — are among the tactics Iran may lean on to keep almost 800,000 barrels a day of its exports flowing after U.S. restrictions resume in November, Ellen Milligan writes. The sanctions will still hit hard, but sales abroad at those levels would cushion the impact for a ruling establishment rocked by a sharp depreciation in its currency and bubbling discontent over rising prices. China, Turkey and India will likely continue to buy Iran’s oil, while other major purchasers including Japan, South Korea and European nations are already shunning its crude. Trump, meanwhile, is looking to inflict maximum pain on Tehran after pulling the U.S. out of the 2015 nuclear deal in May. The president wants a total oil-export shutdown to force its leaders back to the negotiating table as he pursues a new accord that rolls back Iranian influence in the Middle East. That’s a cherished goal of America’s two biggest regional allies — Israel and Saudi Arabia.

Iran's reaction to US sanctions could cause an 'unintended' military conflict, says RBC's Helima Croft - Iran's reaction to the re-imposition of U.S. sanctions in November could lead to some kind of "unintended military escalation" – a risk currently underappreciated by markets, RBC Capital Markets closely-watched oil market expert Helima Croft said on Wednesday. "We maintain that Iran 's response to the coercive measures will play an important role in determining the potential upward trajectory of prices," Croft and her team of oil analysts said in a note Wednesday. The note titled "Winter is coming" warned that "if the Iranian regime restarts its nuclear program, increases support for regional proxy groups, or makes a genuine effort to restrict maritime traffic through vital chokepoints, fear price premium calculations will become of paramount importance." RBC Capital Markets' base-case scenario is that Iran's Supreme Leader Ayatollah Khamenei will opt for an approach of "contained escalation" and will seek to avoid a direct military confrontation with its regional rivals, like Saudi Arabia and Israel, that support the U.S. sanctions. Still, there's a risk that any retaliatory measures could get out of hand. "An unintended military escalation through miscalculation continues to be one of the most underappreciated risks in our view," Croft and her team warned. "Even if the probability of such a scenario remains relatively low, it would serve as the ultimate high-impact event for oil prices." The type of Iranian "provocation" will matter materially for oil prices, RBC's team said, as will the reactions of powerful rivals such Saudi Arabia, Israel, and the U.S. "If Tehran opts to avoid escalatory measures and attempts to wait out the Trump administration, the impact on oil prices would be more muted and largely limited to how many of its barrels are removed from the market by sanctions,"

Israel signals it could attack Iranian weaponry in Iraq (Reuters) - Israel signaled on Monday that it could attack suspected Iranian military assets in Iraq, as it has done with scores of air strikes in war-torn Syria. Citing Iranian, Iraqi and Western sources, Reuters reported last week that Iran had transferred short-range ballistic missiles to Shi’ite allies in Iraq in recent months. Tehran and Baghdad formally denied that report. Israel sees in Iran’s regional expansion an attempt to open up new fronts against it. Israel has repeatedly launched attacks in Syria to prevent any entrenchment of Iranian forces helping Damascus in the war. “We are certainly monitoring everything that is happening in Syria and, regarding Iranian threats, we are not limiting ourselves just to Syrian territory. This also needs to be clear,” Defence Minister Avigdor Lieberman said. Asked if that included possible action in Iraq, Lieberman said: “I am saying that we will contend with any Iranian threat, and it doesn’t matter from where it comes ... Israel’s freedom is total. We retain this freedom of action.” There was no immediate response from the government of Iraq, which is technically at war with Israel, nor from U.S. Central Command in Washington, which oversees U.S. military operations in Iraq. U.S. Secretary of State Mike Pompeo said on Saturday he was “deeply concerned” by the reported Iranian missile transfer. According to regional sources, Israel began carrying out air strikes in Syria in 2013 against suspected arms transfers and deployments by Iran and its Lebanese ally, the Shi’ite Hezbollah militia. These operations have largely been ignored by Russia, Damascus’s big-power backer, and coordinated with other powers conducting their own military operations in Syria. A Western diplomat briefed on the coordination told Reuters last year that, while Israel had a “free hand” in Syria, it was expected not to take any military action in neighboring Iraq, where the United States has been struggling to help achieve stability since its 2003 invasion to topple Saddam Hussein. Despite their formal state of hostilities, Israel and Iraq have not openly traded blows in decades.

Intelligence Sources Accuse Iran Of Supplying Missiles To Hezbollah Via Civilian Airline  -- A new story published in the Times of Israel, based on a Fox News interview with the intelligence officials, describes:According to the report, two flights operated by Qeshm Fars Air flights made trips from Tehran to Beirut, flying an irregular route. One Boeing 747 flight on July 9 made a stop in Damascus, Syria. The second flight on August 4, directly from Tehran to Beirut, but followed “a slightly irregular route north of Syria”...While at first glance we might note that of course civilian airline flights would prefer to take an "irregular route" flying over a war zone in which jihadist insurgents possess MANPADS and o ther advanced weaponry that could take out aircraft flying above, it's also no earth-shattering revelation that Tehran has long supplied the powerful Lebanese paramilitary group. But perhaps more worrisome is the new information or angle to this story: after a bombshell Reuters report last week quoted Iranian, Iraqi, and US sources as saying Iran has transferred short range ballistic missiles to Shia allies in Iraq, the new allegations suggest Iran is also ramping up missile manufacturing capabilities in Lebanon as well, which would put Israel within even closer proximity to powerful Iranian missile systems. The original Fox report fingers Qeshm Fars Air flights as being part of the Iranian clandestine missile and weapons transports: Western intelligence sources said the airplane carried components for manufacturing precise weapons in Iranian factories inside Lebanon. The U.S. and Israel, as well as other western intelligence agencies, have supplied evidence that Iran has operated weapons factories in Lebanon, Syria and Yemen.   The establishment of such Iranian-sponsored facilities in Lebanon, should the allegations be confirmed, would indeed be an escalation. Israeli defense officials will no doubt seize upon such reports to potentially justify further violations of Lebanese and Syrian airspace, and more military intervention in the Syrian theatre. 

Grave Mistake - Trump Threatens Assad Over Impending Idlib Assault -- It seems to happen just about every September and April over the past years: every time the Syrian proxy war seems to have receded from international media attention for a period of a long summer or a winter, a mass attention-grabbing event or massacre happens to suddenly yank the world's (and the White House's) focus right back on the war and a return to intervention and escalation mode.  And curiously, this seems to occur the moment Assad and the Syrian Army alongside the Russians are on the path to overwhelming victory.  On Monday evening of Labor Day, President Donald Trump weighed in with what's clearly a veiled threat warning Syria and its allies via Twitter:President Bashar al-Assad of Syria must not recklessly attack Idlib Province. The Russians and Iranians would be making a grave humanitarian mistake to take part in this potential human tragedy. Hundreds of thousands of people could be killed. Don’t let that happen! And immediately following, US Ambassador to the United Nations Nikki Haley tweeted her own statement based on the president's words, while specifically invoking the US charge that Assad plans to use chemical weapons.Haley wrote: All eyes on the actions of Assad, Russia, and Iran in Idlib. #NoChemicalWeapons   These latest threats confirm what we previously reported over the weekend: that the US is seeking to create a quagmire for Russia and Iran in order to pressure both countries to acquiesce to Washington's demands. In the case of Iran the White House is seeking new negotiations after the US pulled out of the 2015 nuclear deal (JCPOA) last May. 

 Psychic Nikki Haley: If There Is A Future Chemical Weapons Attack, Assad Did It - Caitlin Johnstone --UN Ambassador and Clairvoyant Prognosticator of the Transmundane Nikki Haley has foreseen that, if there are any future chemical weapons attacks in the Syrian province of Idlib, it will most definitely be the Syrian government that is responsible and not the multiple terrorist factions in the area.“If they want to continue to go the route of taking over Syria, they can do that,” said Nikki Haley at a UN press conference today, without explaining how a nation’s only recognized government can ‘take over’ the country it governs. “But they cannot do it with chemical weapons. They can’t do it assaulting their people. And we’re not gonna fall for it. If there are chemical weapons that are used, we know exactly who’s gonna use them.Haley was referring to the Syrian government’s impending push to complete its military campaign of recapturing its land from the terrorist factions and militias who, with extensive help from the US and its allies, have been holding communities hostage in a failed attempt to take over Syria. Her supernatural prophecy is just the latest in an increasingly bizarre string of claims being advanced by political figures and establishment media that the Assad government is planning to use chemical weapons to complete that campaign in Idlib.Their narrative is that the Russian government’s warnings of a plot by the Al Qaeda-linked terrorist factions occupying the region to stage a chemical weapons attack and frame the Syrian government for it are actually just a preemptive “smoke screen” to allow them to get away with committing war crimes. When Haley said “we’re not gonna fall for it,” this is the ‘it’ she was referring to.So let’s unpack that a bit. I’m going to propose two different possibilities to you, and you decide for yourself which one is the more likely event to occur in the future:

Chinese Bonds Feel the Chill as Deadly Swine Fever Spreads - A rapidly spreading African swine fever in pigs has become a risk for China’s bond investors, who’re worried that the disease will quicken inflation and deepen a note sell-off.That’s adding to concerns of the supply deluge of municipal bonds that analysts expect may siphon funds away from the inter-bank bond market. Average yields on China’s local top-rated corporate notes have climbed 39 basis points in the last four weeks to 4.44 percent.Since early August, the outbreak of hog fever-- with new cases confirmed in the eastern provinces of Jiangsu and Anhui on Monday -- has driven up pork prices by about 10 percent. A flood in the northern province of Shandong, one of the country’s largest vegetable producers, has pushed crop prices higher. “Bond investors are quite sensitive to any inflation concerns,” said Wang Wenhuan, fixed-income analyst from Huachuang Securities Co. “The sudden occurrence of the swine fever, together with flood and rising housing rentals in major cities will definitely curb sentiment on the bond market.” Food accounts for roughly 30 percent of China’s consumer inflation basket. Consumer prices advanced 2.1 percent in July from a year earlier, quicker than June’s 1.9 percent. A further rise in bond yields could erase all the compression in July caused by stimulus measures from Chinese authorities to boost its economy and lower borrowing costs for the corporate sector to cushion the impact of trade conflicts with the U.S.  So far, consumer prices are forecast to increase 2.1 percent this year, but analysts say concerns about the disease spreading will add pressure for prices to accelerate.

China's Consumers Are On Point to Defend Economy From Trump -- Life for many in China’s most sophisticated consumer markets is getting harder, with soaring rents gnawing at disposable incomes. As Donald Trump’s trade war with China begins to threaten the economy in earnest, with tariffs on another $200 billion of goods potentially arriving this week, the resilience of the economy will depend to a large extent on the confidence, or otherwise, of shoppers outside those zones. Take Fu Ran, a 29-year-old architect in Beijing. His rent already sucked up about half his monthly income when he was told last month that it would increase another 30 percent, to 4000 yuan a month. Though he trained at the prestigious Tsinghua University nearby, Fu now mocks himself as "highly-educated, but broke." With little funds left each month Fu says he’ll have to cut expenses on dining out, socializing and travel. His case resonates with the so-called “consumption downgrade” that’s become part of social media chatter. But as consumption including some government spending now contributes more than two thirds of annual output growth, such a development matters for policy makers. Elsewhere, things are different though, and the massive shift of China’s population upward in the wealth stakes is still continuing. While retail sales growth slowed sharply in 2018 to below 9 percent year on year, that may not capture the full picture and, indeed spending as recorded by the government’s quarterly household survey has accelerated. “Many people might feel the pressure to cut expenses, for example like young graduates hit by the rising rents, or the savers who lost money due to defaults of peer-to-peer lending platforms,” said Tommy Xie, an economist at Oversea-Chinese Banking Corp Ltd in Singapore. “But if you look at spending on overseas tourism, which is a good indicator of how wealthy people feel about themselves and how optimistic they are, the number is quite sound.”

Smaller Chinese manufacturers hit hard by trade war in August, new data shows - Smaller Chinese manufacturers continue to be the most vulnerable segment of the world’s second-largest economy, new data shows, with growth in their business activity slowing to a 14-month low in August amid Beijing’s drive to reduce financial risks and the trade war with the United States.Caixin’s monthly purchasing managers survey showed that export orders shrank for a fifth straight month and employers continued to cut staff.The Caixin manufacturing PMI, which gives weight to small and medium-sized, mostly privately owned, manufacturing firms, declined to 50.6 last month, from 50.8 in July. Figures above 50 indicate an expansion of activity in the manufacturing sector, those below 50 indicate contraction. The further above or below the 50 mark, the faster the expansion or contraction.This result contrasted with the official purchasing managers index released on Friday, which rose 0.1 point to 51.3. The official survey, conducted by the National Bureau of Statistics, focuses on larger manufacturing firms, many of them state-owned, and the rebound suggested the government had scored some success in its effort to stabilise the economy.Analysts said the smaller firms would continue to be weighed down by a lack of access to credit and the trade war’s impact. The trade conflict is likely to worsen in the near term, with the US expected to impose 25 per cent tariffs on an additional US$200 billion of Chinese goods as early as this week.

US push for sanctions of China over treatment of Uyghur minority --As the Trump administration escalates its trade war measures with China, a powerful group of US lawmakers headed by Senator Marco Rubio issued a letter last week calling for sanctions against Chinese officials allegedly responsible for human rights abuses against the Muslim Uyghur minority in the western province of Xinjiang.  There is no doubt that the Chinese police-state apparatus is responsible for gross violations of democratic rights against the Uyghurs and other ethnic minorities, as well as the Chinese working class as a whole. Under conditions of slowing economic growth and rising social tensions, the Chinese Communist Party (CCP) regime is terrified that any opposition can become the focus for a broader movement that could threaten its rule. Washington’s selective spotlighting of human rights abuses, however, has nothing to do with defending the Uyghur minority. It is aimed at whipping up anti-Chinese sentiment and encouraging separatist movements. Rubio chairs the Congressional-Executive Commission on China (CECC)—an anti-China body that last month tabled a report replete with unsubstantiated allegations of Chinese interference in American politics (see: US report on Chinese “United Front Work” seeks to whip-up hostility towards China).  The letter signed by Rubio and 16 other members of congress called on Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin to impose sanctions on Chen Quanguo, CCP secretary for the Xinjiang Uyghur Autonomous Region, and other officials involved in human rights abuses. It also called for sanctions against Chinese companies, such as Hikvision and Dahua Technology, that allegedly profit from government contracts for surveillance projects.

China's plan for conquest of the South Pacific | Asia Times: What’s gone less noticed, however, is how Beijing could use those emerging forward bases to project power into the South Pacific, where critics say Beijing harbors “neo-colonial” ambitions and the United States maintains crucial naval and air force bases on Guam. A Pentagon report released last month that said China was likely training for air strikes against US and allied targets will have brought China’s emerging power projection capabilities into the Pacific into stark and urgent relief among policymakers in Washington.The report indicates these training flights are also designed to influence island nations in the South Pacific, where China’s advance southward is already viewed with concern by the US. “With a strong foothold in the [South China Sea] now, China can project military power across the Pacific Islands at a time when its fishing fleets are also increasing their presence there,” said Ben Bohane, a Vanuatu-based reporter who has written extensively about Beijing’s growing presence across Oceania. China’s bases in the South China Sea’s Spratly and Paracel island chains, from which Peoples Liberation Army Air Force strategic bombers can reach well into Oceania, now back Beijing’s economic and political ambitions in various Pacific Islands. Naval and aviation support facilities on Fiery Cross, Subi, and Mischief Reefs in the South China Sea are roughly 1,500 miles closer to Oceania than mainland China bases. Ongoing construction on these three major outposts supports Beijing’s ability to impose force in the poorly defended region. 

China Accused Of New Colonialism With $60 Billion Investment In Africa - Speaking at the opening of a major conference with African leaders, Chinese President Xi Jinping proposed $60 billion in financing for projects in Africa in the form of assistance, investment and loans. Xi also said that Beijing is willing to write off Chinese interest-free loans due by the end of 2018 for the most impoverished African nations as China furthers the effort to complete the “One Belt, One Road” initiative on the continent, or as others called it "new colonialism." China's ambitions for Africa are hardly new, and were discussed here over 6 years ago for the first time in "The Beijing Conference": See How China Quietly Took Over Africa" And while back then few noticed, this time the western media was quick to label the latest round of Chinese financing a "debt trap", to which a top Chinese official responded on Tuesday saying Beijing is helping Africa develop, rejecting criticism it is loading African countries with unsustainable financial burdens.Over the last five years, China’s outreach for economic development in Africa has created new trade routes, investments, and increased political ties. More recently, many African counties have asked China to restructure their debts, which has served as a wake-up call for Beijing."If we take a closer look at these African countries that are heavily in debt, China is not their main creditor,” its special envoy for Africa, Xu Jinghu, told a news conference Tuesday, she added, “it’s senseless and baseless to shift the blame onto China for debt problems."As Xi completes his grand vision of the "One Belt, One Road" initiative, China pledged billions of dollars of infrastructure investment in countries along the old Silk Road, linking it with a network of countries in Europe, Asia, and Africa. Jinghu said China would use feasibility studies to select new projects that aid African countries the most and steer clear of debt or financial woes.

Why the billions China is pouring into Africa might not be smart money - Africans are no longer the soft touch they once might have been. They know the cost and the value of everything and are more than able to make highly educated choices. The United States remains the biggest investor in Africa but China is catching up. The China Africa Research Initiative of Johns Hopkins University calculates that China is also a major creditor, having lent US$136 billion to Africa since 2000.  Chinese businesses are fast acquiring raw materials, farmland, and influence unencumbered by worries of corruption, waste, and environmental damage. African leaders themselves are keen on low-cost foreign investment in roads, railways and reservoirs. Foreign cash speeds up development and creates jobs.  However, the first Chinese firms to arrive made a schoolboy error, bringing in labour from China and provoking anger and resentment among Africans . Suggestions that resources were sold at below-market prices because of cosy agreements with local leaders did not help. Resources extracted with machines generated no added value for Africans. And the lending model may be creating unrepayable levels of debt. Angola alone has been granted loans of US$42.2 billion, about half of the annual gross domestic product of the entire country. Zambia may soon have to restructure its debt, and it is a mixed blessing that the Ethiopian economic miracle is supported by US$4 billion of Chinese money. Worse are accusations of colonialism, though they have been roundly denied by African leaders. They are right. They can see the Chinese coming, and they are in control. China just needs to avoid any sign of patronising Africans – for that is the least redeeming aspect of colonialism. To safeguard its access to cheap resources and extend its influence, China promised Africa US$60 billion in Beijing this week. It extends the pledge of US$60 billion three years ago, but is not a big sum for a continent. The cost of the Belt and Road Initiative is thought to be in the region of US$4 trillion to US$8 trillion.

DPRK leader reconfirms commitment to complete denuclearization - (Xinhua) -- Top leader of the Democratic People's Republic of Korea (DPRK) Kim Jong Un reconfirmed his firm commitment to the complete denuclearization of the Korean Peninsula, a South Korean presidential special envoy said Thursday after visiting Pyongyang the previous day. Chung Eui-yong, South Korean President Moon Jae-in's top national security adviser who led the five-member special delegation, told a press briefing that the DPRK leader reconfirmed his firm commitment to the denuclearization of the peninsula, and expressed his willingness to closely cooperate with South Korea and the United States for the denuclearization. Chung and four other delegates met Kim in Pyongyang during their one-day mission as special emissaries, delivering Moon's letter to the DPRK leader. Chung said the two Koreas agreed to hold the third Moon-Kim summit in the DPRK's capital city from Sept. 18-20.

US Pharma Giant J&J Faces Heat in India -- The multinational drugmaker Johnson & Johnson is being accused in India of suppressing key facts on the aftermath of surgeries conducted on thousands of patients using what were alleged to be faulty hip replacements manufactured by a UK subsidiary. One of the world’s biggest pharmaceutical manufacturers, Johnson & Johnson includes 250 subsidiaries with operations in 60 countries and sells products in more than 175 countries. A telephone call to the company’s New Brunswick, New Jersey corporate offices was ignored by a receptionist who said she didn’t have a telephone number for media representatives. The allegedly faulty devices – the ASR XL Acetabular Hip System and ASR Hip Resurfacing System – manufactured by J&J subsidiary Deputy International Ltd (DePuy) UK –were recalled globally in 2010. The drug company is accused of also failing to inform India’s national pharmaceutical and medical devices regulator, the Central Drugs Standard Control Organization, about the exact number of patients who were implanted with the hip replacements, the adverse reports following such surgeries and the corrective operations subsequently necessary. Nor did J&J provide compensation to those affected, according to a devastating report released this week by a committee set up by the Union Ministry of Health & Family Welfare to investigate complaints against J&J in India. The investigations, which constitute the first official indictment in India against J&J, allege that more than 3,600 patients with the faulty implants remain untraceable, and that at least four deaths have been reported from those who underwent surgeries using the devices. The committee has recommended that J&J be made liable to pay Rs2.12 million (US$30,000) to each affected patient, and that the reimbursement program for revision surgeries should continue until August 2025.

Two Years Ago, India Lacked Fast, Cheap Internet—One Billionaire Changed All That - India’s richest man is catapulting hundreds of millions of poor people straight into the mobile internet age.   Mukesh Ambani, head of Reliance Industries,  one of India’s largest conglomerates, has shelled out $35 billion of the company’s money to blanket the South Asian nation with its first all-4G network. By offering free calls and data for pennies, the telecom latecomer has upended the industry, setting off a cheap internet tsunami that is opening the market of 1.3 billion people to global tech and retailing titans. The unknown factor: Can Reliance reap profits itself after unleashing a cutthroat price war? Analysts say the company’s ultimate plan, after connecting the masses, is to use the platform to sell content, financial services and advertising. It could also recoup its massive investment in the years to come by charging for high-speed broadband to consumers’ homes and connections for various businesses, according to a person familiar with the matter.Mr. Ambani’s project has the potential to give India the largest—and most diverse—connected population in the world, with low-cost access to data helping to level the playing field between rich and poor. It also could revolutionize retail. Mr. Ambani’s success or failure could affect Alphabet Inc.’s Google and Facebook Inc.’s WhatsApp, which have poured resources into developing products for the Indian market, and Walmart Inc. and Inc., which have invested billions here on logistics for online shoppers. To profit, they all need people connected to the internet.

India: Demonetization Debacle -- Jerri-lynn Scofield - Earlier this week, the Reserve Bank of India (RBI) published its annual report, which included further assessment of the government’s demonetization policy, imposed on November 8, 2016, when Prime Minister Narendra Modi announced the immediate cancellation of Indian Rupees (Rs) 500 and Rs 1000 notes– 86% of all cash then in circulation in what’s largely a cash-based economy. As I wrote here:The government estimated that demonetization would flush up to 1/3 of currency then in circulation from the economy, with holders of black money choosing to trash or abandon their holdings rather than admit its shady provenance. Central bank liabilities were expected to decline, and the government to reap a windfall.Widespread and immediate chaos followed, as I observed firsthand as I was visiting India at that time (and discussed here, here, here, here, here, here and here.)The latest RBI report reaffirms that far from ferreting out large sums of illicit money, most of the cancelled banknotes were exchanged for new currency, as reported by The Wire in It’s Finally Official: RBI Says 99.3% of Demonetised Money Returned to Banking System: The Reserve Bank of India (RBI) has finally finished counting the money that was returned to the central bank after the Modi government’s decision to demonetise Rs 500 and Rs 1000 notes in November 2016. The result of the RBI’s calculations: 99.3% of the scrapped notes came back into the formal banking system. [Jerri-Lynn here: see especially pp. 147-154 of the RBI report.] The latest RBI report refines and finalises preliminary calculations made in last year’s annual report, which I discussed further here. Yet as this piece in The Wire, How Successful was Demonetisation? Four Takeaways From the RBI’s Annual Report, makes clear: Now, even if 100% of demonetised currency returned to the system, it does not mean all of this cash was ‘white’ or money that was generated through wholly legal means. It is the job of the income tax department and various investigative agencies to determine how much of it is ‘black’ or illegally obtained and which depositors need to be examined for trying to cheat the system.

Crashing currency chaos spreads across the Global South - Asia Times. - The Iranian rial: crash. The Turkish lira: crash. The Argentine peso: crash. The Brazilian real: crash. There are multiple, complex, parallel vectors at play in this wilderness of crashing currencies. Turkey’s case is heavily influenced by the bubble of easy credit created by European banks.Argentina’s problem is mostly to do with the neoliberal austerity of President Mauricio Macri’s government admitting it won’t be able to fulfill payment targets agreed with the IMF less than three months ago. Iran’s has to do with harsh United States sanctions imposed after the Trump administration’s unilateral pullout from the Iran nuclear deal.Brazil’s has to do with what the Goddess of the Market considers anathema: a victory by the imprisoned Lula (former president Luiz Inácio Lula da Silva) or his appointed candidate in the  presidential election next October.  This is a serious currency crisis affecting key emerging markets. Three of these – Brazil, Argentina and Turkey – are G20 members, and Iran, absent external pressure, would have everything to qualify as a member. Two – Iran and Turkey – are under US sanctions while the other two, at least for the moment, are firmly within Washington’s orbit. Now, compare it with currencies that are gaining against the US dollar: the Ukrainian hryvnia, the Georgian lari and the Colombian peso. Not exactly G20 heavyweights – and all of them also inside Washington’s influence. Independent analysts from Russia and Turkey to Brazil and Iran largely agree that the overwhelming factor in the current currency crisis is a reversing of the US Federal Reserve quantitative easing (QE) policy.As investment banker and risk manager Jim Rickards noted, QE for all practical purposes represented the Fed declaring a currency war against the whole planet – printing US dollars at will on a trillion-dollar scale. That meant mounting US debt was devalued so foreign creditors were paid back with cheaper US dollars. Now, the Fed has dramatically reversed course and is all-out invested in quantitative tightening (QT). No more liquid dollars flooding emerging markets such as Turkey, Brazil, Argentina, Indonesia or India. US interest rates are up. The Fed stopped buying new bonds. The US Treasury is issuing new bond debt. Thus QT, combined with a global, targeted trade war against major emerging markets, spells out the new normal: the weaponization of the US dollar. It’s no wonder that Russia, China, Turkey, Iran – nearly every major regional player invested in Eurasia integration – is buying gold with the aim of progressively getting out of US dollar hegemony. As JP Morgan himself coined it over a century ago, “Gold is money. All else is credit.”

New Video Shows More Atrocities by Cameroon, a Key US Ally in Drone Warfare  --Gunshots ring out as the troops advance down a dirt road.  It quickly becomes clear exactly what type of mission this actually is. It’s of the same type that soldiers carried out at El Mozote, El Salvador, in 1981, at My Lai, South Vietnam, in 1968, and at Oradour-sur-Glane, France, in 1944. It is a massacre. And it is filmed. This particular mass killing takes place in Cameroon, a key U.S. ally and staging ground for America’s drone operations in Africa. While the number of victims is likely smaller than other notorious mass killings, it’s the second atrocity video involving Cameroon’s armed forces to be made public this summer.“Lay down, lay down. Put your head there,” a soldier shouts at about 12 unresisting people who are seated or lying on the ground. Around the one minute and 44-second mark in the footage, troops aim at the group and fire with their assault rifles for an extended period of time.“There are some who are not dead,” says one of the soldiers when the shooting subsides. “The dudes still move. They move,” says another.A soldier then walks forward and fires at close range. Bodies jerk from the impact of the bullets. A voice then calls out, “It’s not us. It’s Yaounde” — the capital of the country, and an apparent reference to the national government. “This shocking video shows armed men lining people up face down or sitting against a wall and shooting them with automatic weapons,”said Ilaria Allegrozzi, Amnesty International’s Lake Chad researcher. “A second round of shooting ensures no survivors. Here is yet more credible evidence to support the allegations that Cameroon’s armed forces have committed grave crimes against civilians, and we are calling for an immediate, thorough, and impartial investigation. Those suspected to be responsible for these abhorrent acts must be brought to justice.”

Fire Devastates Brazil’s Oldest Science Museum  - Major pieces of Brazil's scientific and cultural heritage went up in smoke on Sunday night, as a devastating fire ripped through much of Rio de Janeiro's Museu Nacional, or National Museum. Founded in 1818, the museum is Brazil's oldest scientific institution and one of the largest and most renowned museums in Latin America, amassing a collection of some 20 million scientifically and culturally invaluable artifacts. The Museu Nacional's holdings include Luzia, an 11,500-year-old skull considered one of South America's oldest human fossils, as well as the bones of uniquely Brazilian creatures such as the long-necked dinosaurMaxakalisaurus. Because of the auction tastes of Brazil's 19th-century emperors, the Museu Nacional also ended up with Latin America's oldest collection of Egyptian mummies and artifacts.Even the building holds historical importance: It housed the exiled Portuguese royal family from 1808 to 1821, after they fled to Rio de Janeiro in 1807 to escape Napoleon. The complex also served as the palace for Brazil's post-independence emperors until 1889, before the museum collections were transferred there in 1902.In a Monday interview, Federal University of Espírito Santo paleontologist Taissa Rodrigues said that some of the metal cabinets containing fossils may have withstood the fire, though it's unclear whether the fossils inside survived. Duane Fonseca, a biologist at Brazil's Federal University of Rio Grande, reported on Twitter on Monday that technicians had saved some of the museum's more than 40,000 mollusk specimens. But now, many of the fossils, the Egyptian collection, the museum's invertebrate specimens, and more artifacts housed in the main building are probably destroyed.  “The importance of the collections that were lost couldn't be overstated,” says Luiz Rocha, a Brazilian ichthyologist now at the California Academy of Sciences who has visited the Museu Nacional several times to study its collections. “They were unique as it gets: Many of them were irreplaceable, there's no way to put a monetary value on it.”

The Absurd Loss of the National Museum Lifts the Veil on Brazil’s National Project - Last night was difficult. I lost sleep, I lost my voice—and for a few minutes, I lost my will. I don’t want to go on about the absurdity and sadness of the definitive loss of our National Museum to flames—especially when it’s just the culmination of a process of corruption that has dragged on for years, experienced and repeatedly denounced by researchers, students, and staff. The museum is lost—perhaps it already was—but the symbolism of fire and the images generated are a very powerful and especially painful endpoint to 200 years of history. But let’s not fool ourselves. Yesterday, not only did one of the largest collections in Latin America burn down—but a political project was set in motion for a country that is determined to give up on science and knowledge, determined to forget its history, determined to condemn its future. The museum did not burn because the country lacks money (remember, the museum is a federal institution). The museum burned down because the country decided that its priority is being a haven for speculative capital appreciation—while freezing investments in health, education, culture, and history. The museum burned down because the country decided that the logic of profit must be widely adopted: in the government itself and by auctioning off its institutions to private initiatives. But the university is defiant, so it burns. There have been several fires at the Federal University of Rio de Janeiro (UFRJ) in the past three years. Yet we persist. Producing science in Brazil is a political act—it is resistance, it is defiance. It is to believe in a better country for everyone, in a future that keeps on living in our hearts despite the (sometimes literal) flames of reality.

Jair Bolsonaro, Brazil’s presidential front-runner, stabbed at rally - BBC - The front-runner in Brazil's presidential election, Jair Bolsonaro, has been stabbed at a campaign rally. The far-right politician was attacked in a crowd in the south-east state of Minas Gerais. A suspect was arrested. Mr Bolsonaro had surgery for injuries to his intestines and is expected to recover, hospital officials said. The controversial politician, who has outraged many in Brazil with racist and homophobic comments, has performed strongly in recent opinion polls. The polls suggest he will get the most votes in the first round of the October presidential elections if former President Luis Inácio Lula da Silva remains blocked from standing, but he is unlikely to win a run-off.  Left-wing Lula had been the long-standing favourite but he is currently in prison, appealing against a ban on his candidacy that was imposed after his conviction for corruption.  Some of Mr Bolsonaro's past comments have caused uproar, including equating homosexuality with paedophilia, and saying a congresswoman was too ugly to be raped.

Space station air leak: someone drilled the hole, say Russians - An air leak on the International Space Station might have been sabotage, according to the head of Russia’s Roscosmos space agency, and an investigation is under way. Dmitry Rogozin said the hole detected last Thursday in a Russian Soyuz module docked at the ISS was caused by a drill and could have been done deliberately, either back on Earth or by someone in orbit. “There were several attempts at drilling,” Rogozin said late on Monday in televised comments, adding that the drill appeared to have been held by a “wavering hand”. “What is this: a production defect or some premeditated actions?” he asked. “We are checking the Earth version. But there is another version that we do not rule out: deliberate interference in space.” Astronauts used tape to seal the leak after it caused a small loss of pressure that was not life-threatening. A state commission would seek to identify the culprit by name, Rogozin said, calling it a “matter of honour” for Russia’s Energiya company that makes the Soyuz. Asked for comment on allegations of possible sabotage, a Nasa spokeswoman referred all questions to the Russian space agency which is overseeing the commission’s analysis. Rogozin had initially said the hole in the side of the ship used to ferry astronauts was most likely caused from outside by a tiny meteorite, but later admitted that had been ruled out. 

Erdogan Vows To Abandon Dollar, Doesn't Need Permission To Buy Russian Missiles - Another day, another angry rant by Turkish President Recep Tayyip Erdogan aimed at the US, who on Sunday vowed Ankara would abandon the dollar in transactions with Russia and other countries, accusing the US of behaving like "wild wolves.""America behaves like wild wolves. Don't believe them," Erdogan told a business forum during the Turkey-Kyrgyzstan Business Forum in Kyrgyzstan, according to AFP.Erdogan also echoed the dedollarization call from Russia's deputy foreign minister Serkey Ryabkov, saying said that Turkey country was in negotiations with Russia over non-dollar trade. "Using the dollar only damages us. We will not give up. We will be victorious," Erdogan told the meeting, attended by Kyrgyz and Turkish businessmen as well as government officials.On August 24, Moscow said it would respond to Washington’s latest sanctions by accelerating efforts to abandon the American currency in trade transactions: "The time has come when we need to go from words to actions, and get rid of the dollar as a means of mutual settlements, and look for other alternatives," said Russia's Deputy Foreign Minister Ryabkov."Thank God, this is happening, and we will speed up this work,” Ryabkov said, explaining the move would come in addition to other “retaliatory measures” as a response to a growing list of US sanctions.Erdogan also said that Ankara doesn’t need permission from anyone to purchase Russian S-400 missile systems, just days after the US once again  warned the country against buying the hotly discussed air-defense system.

No Other Banks Are This Exposed to Turkey, Argentina, Brazil…. Emerging Markets Haunt Spanish Banks -- Don Quijones -- Almost exactly six years ago, the Spanish government requested a €100 billion bailout from the Troika (ECB, European Commission and IMF) to rescue its bankrupt savings banks, which were then merged with much larger commercial banks. Over €40 billion of the credit line was used; much of it is still unpaid. Yet Spain’s banking system could soon face a brand new crisis, this time not involving small or mid-sized savings banks but instead its alpha lenders, which are heavily exposed to emerging economies, from Argentina to Turkey and beyond.In the case of Turkey’s financial system, Spanish banks had total exposure of $82.3 billion in the first quarter of 2018, according to the Bank for International Settlements. That’s more than the combined exposure of lenders from the next three most exposed economies, France, the USA, and the UK, which reached $75 billion in the same period.  According to BIS statistics, Spanish banks’ exposure to Turkey’s economy almost quadrupled between 2015 and 2018, largely on the back of Spain’s second largest bank BBVA’s madcap purchase of roughly half of Turkey’s third largest lender, Turkiye Garanti Bankasi. Since buying its first chunk of the bank from the Turkish group Dogus and General Electric in 2010, BBVA has lost over 75% of its investment under the combined influence of Garanti’s plummeting shares and Turkey’s plunging currency.But the biggest fear, as expressed by the ECB on August 10, is that Turkish borrowers might not be hedged against the lira’s weakness and begin to default en masse on foreign currency loans, which account for a staggering 40% of the Turkish banking sector’s assets. If that happens, the banks most exposed to Turkish debt will be hit pretty hard. And no bank is as exposed as BBVA, though the lender insists its investments are well-hedged and its Turkish business is siloed from the rest of the company.In Argentina, whose currency continues to collapse and whose economy is now spiraling down despite an IMF bailout, Spanish banks’ total combined investments amounted to $28 billion in the first quarter of 2018. That represented almost exactly half of the $58.9 billion that foreign banks are on the hook for in the country. The next most at-risk banking sector, the US, has some $10 billion invested.

European Firms Hit Hard By U.S. Sanctions On Iran -- As Iran is turning to the UN’s International Court of Justice to have the US-imposed sanctions against its oil suspended, the EU is preparing for the hit its economies will have to absorb once the full weight of Washington’s punitive measures comes into effect in the fourth quarter of this year.With these latest moves, American intentions are clear: cut off Iranian oil from the market entirely and reduce Tehran’s financial power. As oil prices rise, however, the White House’s policy looks set to hurt more countries than just Iran. Will Europe’s economies take the hit – or will they fight back?Iran is the world’s third largest oil producer within OPEC (after Saudi Arabia and Iraq) with a daily production of 4 million barrels. Currently, major economic regions from North America to Europe and East Asia are witnessing growing economic activity, causing global oil consumption in 2017 to rise by 1.5 million barrels per day, further tightening the market. As Tehran has already warned, OPEC capacity will be unable to meet shortfalls if the US pursues its policy of reducing Iranian oil exports to zero. The risk is that any constraints on Iran’s exports will only further drive up prices and create major headwinds for the economy of major oil consumers. By law, the US must ensure the global oil market is well-supplied before issuing sanctions on Iranian oil exports. But in light of current demand, this might be a tough argument to land – especially since more oil supply shocks can be expected: Venezuela is struggling, and an agreement between OPEC and Russia is curbing daily oil production by 1.8 million barrels, compared to 2017 levels. As foreign firms are closing down their operations in Iran, the sanctions-induced oil price surge is already hurting America’s allies, particularly the EU. The bloc is reliant on oil imports for 98 percent of demand, and with the Euro continuing to perform poorly against the Dollar, the impact of rising prices will only be magnified. Higher oil prices are hitting Germany, the continent’s economic powerhouse, especially hard. Its export-based economy is highly vulnerable to commodity shocks, which lead to higher unemployment because they drag down industrial productivity. The country’s factory orders have been falling since January – and now, business surveys indicate that the knock-on impact of higher oil prices are beginning to kick in. However, if oil prices are already one negative side effect of Iran sanctions, then the EU should also fear their extraterritorial reach. This clause imparts Washington with the right to sanction any entity doing business with Iran. Forced to pull out of Iran or risk losing access to the US markets, many are looking at losses numbering in the billions, as long-term invest deals concluded at the singing of the nuclear deal are rendered void.

Europe will be the big loser in US trade war with China, economist warns - The chief economist for the Edmond de Rothschild asset management firm claimed that Europe is set to be a big loser in the trade war between the United States and China. Speaking at the MEDEF Summer University in Paris on Tuesday, Mathilde Lemoine told CNBC's Joumanna Bercetche that she thought the euro zone would be "the big loser" in the trade war between the U.S. and China. Lemoine said President Donald Trump wanted to develop services exportation to China but Europe was far too fragmented to take advantage. "The euro zone, and France especially, are not organized to export their service sector and especially finance, because there is no single market for services in Europe and therefore it is difficult for Europeans to define a single policy for negotiating with China and the U.S.," said Lemoine. "I think that the euro zone could be the big loser of the trade war and don't forget that the U.S. wants to keep their global leadership," she added. Switching focus, the chief economist added that she foresaw no looming crisis for debt-laden Italy. Italy recorded a government debt equivalent to more than 130 percent of the country's gross domestic product (GDP) in 2017, but has been able to keep repayments down thanks to the interest lowering effect of the European Central Bank's (ECB) asset purchase program. But that program is set to end in December and political instability in Italy, along with the country's wavering commitment to the European Union, have seen Italian borrowing costs spike to levels not seen since 2014.

Greece is done with the bailout. Young people say crisis not over - Each morning for more than a year, Dimitris Chalkitos wakes up, scans the internet for job openings and sends his resume to potential employers. He then walks around Sourmena, the beachside Athens suburb where he lives, and searches for "help wanted" signs at restaurants and retail stores.  Sitting in cafe near a main square, he tensed his face while recalling printing his resume, handing it in to a nearby department store and receiving a familiar response: He didn't have enough work experience, the manager told him."The biggest problem is work experience," Chalkitos told Al Jazeera. "Most of my friends are in the same situation."But work experience is hard to come by in a country where four out of 10 young people are unemployed and where the economy is still in a shambles after nearly a decade of financial trauma, austerity measures, tax hikes, pension cuts and massive bailout packages. On August 20, the Greek government and its European partners celebrated the end of Greece's catastrophic crisis.The following day, Prime Minister Alexis Tsipras applauded a "day of redemption" and "the start of a new era".  "The bailouts of recession, austerity and social desertification are finally over," he declared. The overall unemployment rate sunk below 20 percent last month for the first time in seven years, down from its climactic peak of 27 percent in July 2013. And although youth unemployment is far below the 60 percent it reached in February 2013, few job opportunities and meagre wages have left many young people with little cause to rejoice."When the country doesn't give you anything, you can't give anything back to it," Chalkitos said. "Young people believe the state should care more about them."

Italy And Hungary Create 'Anti-Immigration Axis' - Hungarian Prime Minister Viktor Orbán and Italian Interior Minister Matteo Salvini have pledged to create an "anti-immigration axis" aimed at countering the pro-migration policies of the European Union.Meeting in Milan on August 28, Orbán and Salvini, vowed to work together with Austria and the Visegrad Group — the Czech Republic, Hungary, Poland and Slovakia — to oppose a pro-migration group of EU countries led by French President Emmanuel Macron.  Orbán and Salvini are seeking a coordinated strategy ahead of the March 2019 European Parliament elections to defeat the pro-immigration Party of European Socialists (PES), a pan-European party representing national-level socialist parties from all EU member states. The objective is to change the political composition of European institutions, including the European Parliament and the European Commission, to reverse the EU's open-door migration policies. At a joint press conference, Salvini said:"We are close to a historic turning point at the continental level. I am astonished at the stupor of a political left that now exists only to challenge others and believes that Milan should not host the president of a European country, as if the left has the authority to decide who has the right to speak and who does not — and then they wonder why no one votes for them anymore."This is the first of a long series of meetings to change destinies, not only of Italy and of Hungary, but of the whole European continent."Orbán added: "European elections will be held soon, and many things must change. At the moment there are two sides in Europe: One is led by Macron, who supports mass migration. The other side is led by countries that want to protect their borders. Hungary and Italy belong to the latter."Hungary has shown that we can stop migrants on land. Salvini has shown that migrants can be stopped at sea. We thank him for protecting Europe's borders."Migrants must be sent back to their countries. Brussels says we cannot do it. They also said it was impossible to stop migrants on land, but we did it.

French kids are heading back to school today without their most beloved possessions - French children are going back to school today (Sept. 3) after summer vacation–but, for the first time, they will be forced to give up their mobile phones.On July 30, 2018, the French government passed a law banning the use of phones in primary and middle schools, to come into effect in the beginning of the 2018 school year. The law allows exceptions for disabled children, in cases of emergency, or “within the framework of explicit and specific pedagogical use, supervised by the teachers.”The law also states that high schools can ban cell phones if they choose to, but the decision will be left up to individual establishments (link in French).The purpose of the law, according to the Ministry of Education, is threefold (link in French). It is meant to help kids’ ”attention, concentration and reflection” in class; encourage kids to actually play with each other, make friends, and exercise during recreation times; and to combat racketeering, theft, online bullying, and harassment in schools, as well as limit young children’s exposure “to shocking, violent, or pornographic images.”The ban is expected to change the way that a lot of students and families go about their days, since nearly nine out of 10 young people between 12 and 17 years old own a mobile phone in France (link in French). The law allows schools to choose whether they want to ban all mobile phones on campus, or allow children to bring phones to school but store them away in their bags or lockers. Either way,students caught using a cell phone in school will risk having the phone confiscated.

Trump trade threats bite into German factory orders - (Reuters) - German industrial orders fell unexpectedly in July on weak foreign demand, data showed on Thursday, in a further sign that factories in Europe’s largest economy are feeling the bite of U.S. President Donald Trump’s protectionist trade policies. The Federal Statistics Office said contracts for “Made in Germany” goods were down by 0.9 percent after a revised plunge of 3.9 percent in the previous month. The reading undershot a Reuters poll of analysts who had predicted a rise of 1.8 percent. The Ifo economic institute said, however, that Germany’s economic upswing will continue as a strong domestic economy is providing a buffer against external shocks. “We are currently facing a strong economic upswing in Germany,” Ifo economist Timo Wollmershaeuser said. “It will be largely driven by private consumption this year and next, helped by rising employment and strong income growth.” The Ifo institute raised its 2018 growth forecast for Germany to 1.9 percent from 1.8 percent previously, citing a better-than-expected performance in the first half of the year. It forecasts gross domestic product growth rates of 1.9 percent in 2019 and 1.7 percent in 2020. The DIW economic institute and the IWH research group said separately that they predicted German growth of 1.8 percent in 2018 and 1.7 percent in 2019. “There are no signs of an economic slump,” DIW chief economist Claus Michelsen said. “However, companies are investing only hesitatingly for the time being, among other things because their sales outlook is clouded by trade conflicts,” he added.

 Deutsche Bank's Top Investor Selling Its Entire Stake Under Orders From China - Deutsche Bank stock slumped, and European bank shares dropped to the lowest level since late 2016 after the WSJ reported that Deutsche Bank's top investor, HNA Group - one of China’s largest conglomerates - intends to completely exit its stake in the German bank as it reverses a debt-fueled acquisition spree under pressure from Beijing.The extremely levered and cash-strapped Chinese conglomerate, which most recently still held almost 8% of DB's voting rights, is selling the investment following orders from China that it focus on its core airline business, as what was once the world's most aggressive rollup and acquiror of international companies goes into reverse. It’s not clear how HNA would sell the stake, which it controls through a series of complex derivatives, according to Bloomberg. HNA Group, a company which previously was dubbed as systemically important for China's economy, and an owner of airlines and hotels that amassed more than $40 billion worth of businesses and stakes in companies in an aggressive global acquisition spree from 2015 to 2017, has been dismantling its overseas empire to shrink its balance sheet under renewed pressure from Chinese regulators and its creditors. HNA's sale of its DB stake had been previously speculated, but never actually confirmed.

Angela Merkel- I can’t rule out Brexit talks breakdown - A breakdown of the Brexit talks cannot be ruled out, German Chancellor Angela Merkel told financial leaders Tuesday.In a rare comment on the negotiations, Merkel told a finance conference in Frankfurt that a “very intensive trade deal” is the most likely future relationship with the U.K.  “We don’t want the discussions to break down,” Merkel said, according to Reuters. “But we also can’t fully rule that out because we still have no result. But I promise you that we will use all our force and creativity to make sure a deal happens.” “We must in autumn finalize the question of divorce and set out in a the clearest way possible how the future relations will look like,” she said. “We assume that Britain will be a third country and a very intensive trade deal would be the basis of our future relations.”

Hard Brexit won’t be so soft for Germany - Although Brexit offers obvious benefits for Frankfurt specifically and Germany generally, German financial executives warned at Handelsblatt’s banking summit this week that a hard Brexit on March 29 could offer more risk than reward.“The federal government is doing all it can to get an agreement, but we can’t say that the outcome is clear,” Finance Minister Olaf Scholz said during the event. “Some people will just have to adjust their thinking to the possibility of a hard Brexit.”Mr. Scholz also complained that previous administrations hadn’t done enough to cement Germany’s financial position in the EU – the European Banking Authority, for example, is moving to Paris – and pledged to do better.Preparing for the UK’s exit without treaties similar to the country’s current position within the EU requires extensive planning and adjustment, much of which is already underway, attendees said. As many as 2,000 jobs have already been created in Frankfurt by Brexit. By the end of 2021, that number should increase by 8,000 more jobs, said Hubertus Väth of the Frankfurt Main Finance location initiative. Although they’ve had years to prepare, the unreliability of political moves has left major financial institutions clamoring for more time to prepare for a hard Brexit. “One could then prepare more meticulously,” said Wolfgang Fink, head of Goldman’s German business. The lender has already relocated 500 employees to Frankfurt from London.He says it’s small companies who will suffer the most. “Obviously, as a major organization, you can provide resources. For smaller organizations, however, what is taking place is already extreme.” All in all, Mr. Fink believes people are thinking too small while preparing for a Brexit. “We should play an active role and develop Frankfurt as the financial center in the euro zone,” he said. A hard Brexit would force regulators into a crisis scenario as they try to gauge which businesses have the right to operate within the EU or outside it in the newly separated UK. “We must not, cannot and do not want to be a repair shop for a failure to implement public policy,” Felix Hufeld, head of German securities regulator BaFin said. Still, he is confident the financial sector is steeling itself for the worst – more than 25 institutions have already applied to BaFin for a banking license. “The biggest beneficiary of Brexit will be New York, not Frankfurt,” said Jörg Asmussen, who previously held a high position in Germany’s finance ministry. He is now head of Europe at the investment bank Lazard. “We will have a fragmented financial market. That’s not positive.”

Barnier stands firm on post-Brexit border in Irish Sea -- Michel Barnier is refusing to back down on establishing a border in the Irish Sea to avoid a hard border on the island of Ireland, and has publicly asked the British government for data to prove that the checks on goods flowing within the territory of the UK would be few in number. The EU’s chief negotiator, who has been strident on the issue during the behind-the-scenes negotiations, made public his request for the information as he warned he needed an agreement on Northern Ireland and other outstanding withdrawal issues “by November at the latest”. Brussels wants to show that the flow of goods from the rest of the UK into Northern Ireland is minimal, and that most of it comes via the Republic of Ireland. UK negotiators have insisted it is not the number of checks that matters, but the principle of not having border checks within the sovereign territory of the UK. The UK’s Brexit secretary, Dominic Raab, told a joint press conference in Brussels that the wishes of all communities in Northern Ireland needed to be respected, in an indication that the British government will not allow checks unacceptable to the Democratic Unionist party.  However, Barnier said a solution was “essential to conclude the negotiations”. He said: “With no backstop there will be no agreement.” The EU and the UK have agreed that there will be a backstop solution for avoiding a hard border to snap into place should there not be a trade deal or bespoke technological solution that can satisfy that requirement, after the 21 month transition period that will follow Brexit day. Barnier said the issue was a matter of some urgency, and revealed he had asked Raab to provide data on how the necessary controls and checks take place. Barnier added he was determined to reach an agreement ahead of the European council meeting in October, but both sides have now conceded that there is flexibility for further negotiations, with an extraordinary summit expected in November. 

Brexit: wishing time away --Dancing May, back from her triumphs in Africa, has put her name to a piece for the Sunday Telegraph, staunchly proclaiming by way of a headline: "There will be no second referendum on Brexit – it would be a gross betrayal of our democracy".That's good enough for an opener, I suppose, but she follows that with a sub-heading fraught with ambiguity: "There will be no compromises on Chequers that are not in our national interest". Define "compromise"; better still, define "national interest". We could have an interesting debate on both, especially as the Telegraph translates this into a front-page lead, having Mrs May declare that: "she won't surrender to Brussels over Chequers plan". It wouldn't be Mrs May, however, if she wasn't clear on something, and true to form she manages to be that in the first sentence of her piece, telling us that the coming months "will be critical in shaping the future of our country" and – wait for it – "I am clear about my mission". "This government", she says, "will fulfil the democratic decision of the British people by ensuring that the UK leaves the European Union on 29th March next year – and that as we do so, we build a stronger, more meritocratic Britain that is fit for the future".It is worth persevering with this a little, to learn from the prime minister that, at Chequers in July, "the government came together around a set of proposals that could break the deadlock on the negotiations and bring a fresh dynamic to the talks". And now she asserts: "there are signs over the Summer that this has happened, with real progress in the negotiations". The thing is, though, that Mrs May isn't the only person in this galaxy who can be clear about things. And, from re-reading my own blogpost, I have come to the conclusion that it is pretty damn clear that there hasn't been any progress worth talking about.

Brexit is estimated to have wiped 2% off the UK’s GDP even before the exit date - The U.K.'s exit from the European Union has already cost the U.K. a chunk of its economic output, according to the latest analysis by economists at UBS. "U.K. gross domestic product (GDP) is already 2.1 percent lower in level terms than where it would have been without Brexit," UBS economists Pierre Lafourcade and Arend Kapteyn, and strategist John Wraith, said in a research note published Monday. "Investment is 4 percent weaker, inflation 1.5 percent higher, consumption is 1.7 percent lower and the REER (the real effective exchange rate) is 12 percent more depreciated," the report added. The economics team measured the costs of Brexit so far by analysing what the U.K.'s GDP would have looked like had the U.K. decided to remain in the EU. They based their methodology on a recent academic paper that essentially constructed "a U.K. 'doppelganger' out of GDP data from other OECD countries not affected by Brexit." "Using that methodology we can also construct counterfactuals for consumption, investment, credit, inflation and the exchange rate," the economists said. "To put that 2.1 percent cumulative decline in real growth into context, that's roughly a quarter to a third of the total Brexit costs estimated in the most pessimistic assessments prior to the EU referendum and almost equal to the full costs of some of the more optimistic assessments," the team noted. "Without Brexit, however, we think U.K. GDP could have been 100 basis points per year higher."

If the Troubles Return After Brexit, It Won’t Just be Because of the Irish Border Issue - A dangerous lack of understanding about the nature of the threat that Brexit poses to peace in Northern Ireland is based on a misconception about the causes of the 30-year-long Troubles that ended with the Good Friday Agreement.The conflict was never primarily about the border between Northern Ireland and the Republic, but about the civil and economic rights of the Roman Catholic minority in the north in relation to the Protestant majority. It was the civil rights march in Derry on 5 October 1968, a protest which was brutally attacked by the police in front of the television cameras, which was the crucial moment in the rise of peaceful opposition to a one-party unionist state. When this failed to achieve its ends, the door was opened to violence and the rise of the Provisional IRA.At the heart of the Good Friday Agreement of 1998, which finally ended the most ferocious guerrilla war seen in western Europe since the Second World War, were equal political, social and economic rights. The outcome was potentially a stable balance of power between the two communities underpinned by a legal system, and a means to enforce it, that created a legal non-violent means to redress grievances, prevent discrimination and provide equal justice for all.The role of European courts as the ultimate decision makers in equality and human rights legislation may feel like an undemocratic intrusion to many in the UK. Why should we obey the European Convention on Human Rights or the Charter of Fundamental Rights when we have our own traditional homegrown British liberties?But in Northern Ireland such liberties were never available to a large part of the population living in what one British newspaper in 1968 called “John Bull’s political slum”. The police behaved like a violent sectarian militia and all aspects of political, social and economic life were tainted by discrimination. For victims of this system, a decisive role from European courts was an essential guarantee of equal citizenship under the law. It is this network of laws under an independent non-partisan EU authority that is now under threat from Brexit.

Brexit: the delusions multiply -- Every day now seems to bring a little more of the same thing – confirmation that we are all sitting on a bus with a "no deal" destination board. The latest comes via an intervention from Angela Merkel at a conference in Frankfurt where she was speaking to German finance chiefs.   "We don't want the discussions to break down", she said, adding, "We will use all our force and creativity to make sure a deal happens".  Then, in what some might think is a statement of the bleedin' obvious, she declared: "We don't want these negotiations to collapse. But we also can't fully rule that out because we still have no result". Merkel is said to have generally played a backseat role in the talks, preferring to intervene only at crunch points at European Council meetings. And here we are at another crunch point and, just as the temperature is rising, she is stepping in not with a prediction but with a warning.   That, at least, is the way I see this. Angela Merkel is sending Mrs May a message, telling her that she needs to up her game. Barnier has already made it clear that the Chequers plan is "dead in the water" and now it comes from the topmost level. May is on notice that she needs to come up with something better. The trouble is, as we all know, the cupboard is bare. But that is the least of Mrs May's problems. From all accounts, she seems actually to believe her own propaganda, with Downing Street telling us: "Nobody else in British politics has a detailed plan for our future relationship that delivers on the instruction of the British people and is negotiable with the EU".The real issue, therefore, is a pervading sense of self-delusion, made worse by the prime minister having told her cabinet colleagues that her plan had received a "warm and positive" response from EU capitals during what is being described as a summer-long diplomatic offensive. And now, it seems, Mrs May is pinning her hopes on the informal European Council in Salzburg later this month where, we are told, the EU27 are planning a "carrot and stick" approach to Brexit, offering Theresa May warm words on her plan, which she can take to the Conservative Conference in the hope that it will calm the fevered breasts of the faithful.  Yet nothing of this is real. The basics haven't changed. The talks are still at an impasse, the Irish border is still the sticking point and there is nothing on offer which will get close to solving Mrs May's domestic political problems.

Brexit: emergency planning -- I seriously wonder how much longer we will have to put up with this sort of idiocy in the Mail. Its report has transport secretary Chris Grayling planning to negotiate 27 separate aviation deals with individual EU Member States in the event of a "no deal" Brexit, supposedly so that civil aviation operations can continue uninterrupted. Needless to say, this isn't going to happen. The technical details are complex, stemming from the 2002 ECJ judgement on European air transport policy, discussed here , but with the emergence of an EU external aviation policy, the Commission has established its presence in the policy field. What this means is that Member States are no longer free agents when it comes to negotiating aviation agreements with third countries. The Commission has a right to be involved and, in certain areas – such as aviation safety – it has exclusive competence.  Effectively, without the willing cooperation of the Commission, there can be no deals. In its own inept way, however, the Mail reports that Grayling's move attempts to circumvent the European Commission and "will anger Brussels officials", as if it was a credible option. Yet it could so easily have pulled in any number of experts to tell its readers that Grayling is chasing after unicorns. As always, the media ducks the issue. At least, though, we get the intelligence that aviation is to feature in the next tranche of "technical notices", where there will be an acknowledgement that there is a "theoretical possibility" that UK-registered civil aircraft will not be able to take off and land on the continent after 29 March. It is also accepted that flights from mainland Europe would also be blocked from landing in the UK unless a new agreement is made to replace the single market for aviation. But then we are served up with the usual mantra: ministers "have dismissed the idea that European air traffic will stop if there is no deal". They have, we are told, already negotiated a raft of deals with non-EU countries to ensure flights can continue to those countries after Brexit. And, to that effect, a UK agreement with the US and Canada, to replace the EU-US Open Skies agreement, is expected to be reached imminently. That notwithstanding, it will take more than the Open Skies agreement to keep UK aircraft flying to North America. There are also the safety issues to deal with, requiring complex bilateral agreements on safety in aviation (BASA), for which no plans have been announced.

The baroness, the ICO fiasco, and enter Steve Wozniak - Earlier this year, we brought you news that Scottish lingerie entrepreneur-turned Conservative peer Michelle Mone and her businessman boyfriend Doug Barrowman were launching an initial coin offering (ICO). The plan was to raise money for a token-based crowdfunding venture, EQUI Capital. But the project has ended in a fiasco that exposes the total absence of oversight in the ICO market, and in particular the lack of protection for those at the bottom of the crypto, er, FUD chain: “bounty-hunters” -- essentially online marketers who promote ICOs on social media and across the internet, supposedly in return for digital tokens. EQUI told us in February they hoped to raise up to $80m. Even if they raised less than that, the token offering would be “going live” no matter what, Barrowman said. Lady Mone of Mayfair, OBE, calling herself “one of the biggest experts in Cryptocurrency and Blockchain”, told Business Insider that she and Barrowman were staking their “incredible reputations” on the ICO and that there was “no way [they were] going to do anything untowards (sic) to let these people down”.The reassurance might have been welcome, because initial coin offerings are effectively an unregulated way for companies to raise money from the public, bypassing securities laws designed to protect investors through the use of so-called cryptocurrencies.Regulators may yet step in, with those in the US indicating the rules still apply to what are securities in all but name. For now the ICO boom has prompted a flourishing in the number of businesses offering tokens, with more than $6.8bn raised so far this year alone, according to, which tracks the market. The EQUI ICO didn't go quite to plan, however. It isn't going live, and lots of people seem to be feeling pretty let down. (But as you will see, dear reader, we wouldn't want to say it failed, because EQUI are watching, and they're going to tell our editor, and we might get sued.)

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