Goldman- The Fed Will Deliver Significantly More Hikes Than Are Priced In , Here's Why - Fed chair Powell has made abundantly clear the Fed's intentions to tighten enough to slow down the economy are now front and center, and with the Fed Funds rate now above 2% and set to rise above 3% in the coming year, the market is not only paying close attention but is no longer mistaking rate hikes for cuts. But with trillions in excess reserves still sloshing around the financial system, has the Fed really tightened enough for risk assets to notice (and slide)? Here opinions remain mixed, although what is clear - at least judging by president Trump's belligerent attitude toward Fed Chair Powell - is that the Fed is now willing to sacrifice the stock market and risk assets if it means to get ahead of the curve on its two core mandates: inflation and unemployment. What does that mean in practical terms? According to a note released by Goldman late last week, the Fed is nowhere near done yet - either based on its dot plot or certainly more dovish market expectations - and "needs to generate a significant tightening in financial conditions to slow the economy to its potential growth pace sooner rather than later." The bad news - for stock bulls - is that "this will require delivering significantly more hikes than priced in the curve." But as Goldman writes, the financial conditions tightening over the last two weeks appears to pose a challenge to the view of even more hikes than priced in by the Fed, as the bank's Financial Conditions Index (FCI) has tightened by 32bp since October 2, despite some reversal over the last few days. The recent stock sell-off was the major driver of the tightening, as shown in Exhibit 1. Furthermore, when Goldman takes the sum of its FCI and fiscal impulses as an estimate of GDP growth vs. potential, "it seems that we have now seen enough tightening to slow the economy to its potential growth pace as soon as the first half of 2019 (Exhibit 2)." This is important as it would imply that the Fed would not not need to deliver much more than the 2 hikes that are now priced to slow growth to Goldman's 1¾% estimate of potential. Yet while an end to the hiking cycle would be great news to bulls, not to mention president Trump, Goldman then goes on to note that it is also the case that the economy is sharply outperforming what would be implied by this approach at present. This means that while the combined FCI and fiscal impulses imply a growth pace about ¾pp above potential, the actual growth pace is instead about 1¾-2pp above potential, with our Q3 GDP estimate at 3.5% and our CAI at 3.8%.
Fed's Bostic Supports More Hikes, Warns of Running Economy Hot- Federal Reserve Bank of Atlanta President Raphael Bostic said he supports further gradual interest rate hikes and warned that running the economy “hot’’ with too much stimulus could end in a recession hurting lower-income Americans. “Unless the data talk me out of it, I view a continued, gradual removal of policy accommodation as appropriate until we get to a neutral policy rate,’’ Bostic said Tuesday in the text of a speech in Baton Rouge, Louisiana. While there’s uncertainty about neutral -- the level of rates that neither speed up nor slow down economic activity -- he said “my assessment is that we are still a few rate hikes away.’’ A voting member this year of the Federal Open Market Committee, Bostic backed the decision in September to raise the target range for the federal funds rate to 2 percent to 2.25 percent, the third hike in 2018. The panel projected a fourth increase by December, according to officials’ median estimate, as unemployment has fallen and inflation has met the group’s 2 percent target. The location of the neutral rate is the subject of debate inside the Fed, with estimates within the committee ranging from 2.5 percent to 3.5 percent. Chairman Jerome Powell has emphasized economists’ inability to know precisely where it lies. A number of Fed officials have noted there could be temporary benefits from running the economy hot -- pushing the unemployment rate lower to encourage more people to look for jobs and to help lower-income Americans get pay raises. The jobless rate has fallen to 3.7 percent, a 48-year low. “The key question isn’t whether the high-pressure economy brings new people from disadvantaged groups into the labor market,’’ Bostic said. “Rather, the right question is whether these benefits are durable in the face of the recession that appears to inevitably follow.’’ Citing research from the Atlanta Fed, he added: “We ought to guard against letting the economy slip too far into these high-pressure periods that ultimately impose heavy costs on many people across the economy. Facilitating a prolonged period of low -- and sustainable -- unemployment rates is a far more beneficial approach.”
Will the Federal Reserve make a mistake by shifting to inflation? - Persistent low inflation in the United States during the past 25 years has been the gift that keeps on giving for Federal Reserve policymakers. It gives the central bank greater flexibility around its dual mandate goal of maximum employment consistent with price stability. With inflation just now reaching the 2 percent target, monetary policy after the financial crisis has focused squarely on the goal of full employment. Critics labeled the dual mandate as “mission impossible” following the financial crisis. They argued the unprecedented measures the Fed took with monetary accommodation to prop up the economy and boost employment could only be realized at the expense of price stability. Easy money by the Fed would devalue our currency and boost inflation, or as Speaker Paul Ryan once suggested, “put the fiat” in fiat money. Ten years and three rounds of quantitative easing later, the inflation bogeyman has yet to arrive in the United States. Instead, the Fed is gradually unwinding stimulus, with inflation, and more importantly inflation expectations, entrenched near the 2 percent target. Even though Chairman Jerome Powell sees “no clear sign of an acceleration” in inflation, the removal of “accommodative” from the last Federal Open Market Committee statement is a sign that the Fed is shifting its focus from economic growth and employment to price stability. Disinflationary secular forces, including globalization, technology, the sharing economy, and an aging demographic, have so far outweighed typical late stage cyclical pressures for higher inflation in the United States and other developed countries, as mentioned in a blog post by the Federal Reserve Bank of Saint Louis earlier this year. The absence of inflation in the midst of record tight labor market conditions has perplexed Fed officials and called into question the usefulness of economic forecasting tools such as the Phillips curve, which posits that inflation and unemployment rates are inversely related. At a recent speech, Powell best summarized the challenges by remarking that the Federal Open Market Committee “has been navigating between the shoals of overheating and premature tightening with only a hazy view.”
Bonds Flash a Warning Sign to the Fed - The Treasury market did exactly what’s expected during a global stock-market rout: It staged a strong rally. The U.S. 10-year yield plunged 7 basis points, the most in almost five months, as investors flocked to havens. Yet when looking at a 2018 chart of the global borrowing benchmark, the move barely seems to register. At 3.13 percent, the yield is still firmly above where it started the month, and it isn’t anywhere close to the moving averages that technical strategists love to watch for a crucial reversal. For shorter-dated maturities, the move seems even less pronounced. Beneath the surface, though, lies a trend that should give traders pause about the Federal Reserve’s capacity to keep up its gradual rate hikes. The five-year U.S. break-even rate, which is the market’s measure of inflation expectations over the next half-decade, tumbled to the lowest since February. At less than 1.95 percentage points, it’s below the level that policy makers target to meet their mandate for stable price growth. Of course, some of the decline is just tracking the price of oil, which has fallen from the highest since December 2014. But any lingering concerns about global growth also take their toll. Tuesday’s earnings results from Caterpillar Inc. and 3M Co., along with some European tech companies, suggest that corporate profits may have peaked, or are at least close to the top. Earnings are the one pillar that’s been keeping the U.S. equity markets near record highs throughout this Fed tightening cycle. When traders cringed at a 3 percent 10-year yield and what that might mean for the American housing market and corporate borrowing, robust profits soothed them. Investors brushed off mounting geopolitical risks from China, Italy and Saudi Arabia as long as they didn’t harm company balance sheets. The early indications, at least, signal that earnings are no longer the impenetrable foundation they once were. Bond traders are now barely pricing in two rate hikes between year-end 2018 and year-end 2020, the least since Oct. 2, according to eurodollar futures data. The Fed projects twice as many over that period. The difference may only become more pronounced if the market’s inflation expectations for the coming years continue to wane.
Trump Steps Up Attacks on Fed Chairman Jerome Powell — President Trump escalated his attacks on Federal Reserve Chairman Jerome Powell, saying the head of the nation’s central bank threatened U.S. economic growth and appeared to enjoy raising interest rates. In an interview Tuesday with The Wall Street Journal, Mr. Trump acknowledged the independence the Fed has long enjoyed in setting economic policy, while also making clear he was intentionally sending a direct message to Mr. Powell that he wanted lower interest rates. “Every time we do something great, he raises the interest rates,” Mr. Trump said, adding that Mr. Powell “almost looks like he’s happy raising interest rates.” The president declined to elaborate, and a spokeswoman for the Fed declined to comment. Mr. Trump said it was “too early to say, but maybe” he regrets nominating Mr. Powell. Fed officials have raised their benchmark rate three times this year, most recently in September to a range between 2% and 2.25%, and most officials expect to raise it again at their December meeting. Mr. Powell has said the Fed wants to raise rates at least to a so-called neutral level that seeks to neither spur nor slow economic growth. The president’s caustic comments about Mr. Powell came as Mr. Trump repeatedly described the economy in personal terms. He referred to economic gains during his time in office as “my numbers,” saying, “I have a hot economy going.” He described his push for growth as a competition with former President Obama’s record, saying that increases under his Democratic predecessor were skewed because of low-interest rates. In the 30-minute interview in the Oval Office, Mr. Trump also touched on his approach to tariffs, the controversy unfolding over the death of Saudi Arabian dissident Jamal Khashoggi, his eagerness to pass a second tax cut, and his thoughts on his former attorney, Michael Cohen. Asked an open-ended question about what he viewed as the biggest risks to the economy, Mr. Trump gave a single answer: the Fed.
Chicago Fed "Index Points to a Moderation in Economic Growth in September" --From the Chicago Fed: Index Points to a Moderation in Economic Growth in September: The Chicago Fed National Activity Index (CFNAI) decreased to +0.17 in September from +0.27 in August. Two of the four broad categories of indicators that make up the index decreased from August, but three of the four categories made positive contributions to the index in September. The index’s three-month moving average, CFNAI-MA3, moved down to +0.21 in September from +0.27 in August. This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967.
BEA: Real GDP increased at 3.5% Annualized Rate in Q3 - From the BEA: Gross Domestic Product: Third Quarter 2018 (Advance Estimate) Real gross domestic product (GDP) increased at an annual rate of 3.5 percent in the third quarter of 2018, according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.2 percent.The Bureau emphasized that the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency see “Source Data for the Advance Estimate” on page 2). The "second" estimate for the third quarter, based on more complete data, will be released on November 28, 2018. The increase in real GDP in the third quarter reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, state and local government spending, federal government spending, and nonresidential fixed investment that were partly offset by negative contributions from exports and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased. The deceleration in real GDP growth in the third quarter reflected a downturn in exports and a deceleration in nonresidential fixed investment. Imports increased in the third quarter after decreasing in the second. These movements were partly offset by an upturn in private inventory investment. The advance Q3 GDP report, with 3.5% annualized growth, was close to expectations. Note the Change in Private Inventories contributed 2.07 percentage points to GDP growth in Q3, and this will probably unwind in Q4.Personal consumption expenditures (PCE) increased at 4.0% annualized rate in Q3, up from 3.8% in Q2. Residential investment (RI) decreased 4.0% in Q3. Equipment investment increased at a 0.4% annualized rate, and investment in non-residential structures decreased at a 7.9% pace.
Q3 GDP Advance Estimate: Real GDP at 3.5% - The Advance Estimate for Q3 GDP, to one decimal, came in at 3.5% (3.50% to two decimal places), a decrease from 4.2% for the Q2 Third Estimate. Investing.com had a consensus of 3.3%.Here is the slightly abbreviated opening text from the Bureau of Economic Analysis news release: Real gross domestic product (GDP) increased at an annual rate of 3.5 percent in the third quarter of 2018 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.2 percent. The Bureau emphasized that the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see “Source Data for the Advance Estimate” on page 2). The "second" estimate for the third quarter, based on more complete data, will be released on November 28, 2018. [Full Release] Here is a look at Quarterly GDP since Q2 1947. Prior to 1947, GDP was an annual calculation. To be more precise, the chart shows is the annualized percentage change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product. We've also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.22% average (arithmetic mean) and the 10-year moving average, currently at 1.80%.Here is a log-scale chart of real GDP with an exponential regression, which helps us understand growth cycles since the 1947 inception of quarterly GDP. The latest number puts us 13.5% below trend. A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change. The average rate at the start of recessions is 3.35%. Six of the eleven recessions over this timeframe have begun at a higher level of current real YoY GDP. In summary, the Q3 GDP Advance Estimate of 3.5% was slightly better than expected and worse than the Q2 Third Estimate.
Q3 GDP: The economy grew at annual rate of 3.5 percent - The U.S. economy grew at a strong 3.5 percent annual growth rate in the third quarter, buttressing Republican claims that President Trump is presiding over a boom, with just 11 days remaining before congressional elections. Growth dipped from the second quarter’s 4.2 percent rate, but the economy still posted its best back-to-back quarters in four years — thanks to free spending by consumers and the federal government — and is within reach of the Trump administration’s 3 percent annual growth target. “Despite all the hand-wringing about the [stock] market, the economy is looking pretty good,” “The story here is a double dose of caffeine from tax cuts and spending increases.” Vice President Pence on Friday touted the 3.5 percent growth, writing on Twitter that, under Trump, “the American economy is making a REAL COMEBACK after nearly a decade of slow growth.” The strong headline growth number capped a volatile week on Wall Street, where the Dow Jones industrial average surrendered all its gains for the year. The Commerce Department report Friday also offered a mixed verdict on prospects for the president to deliver an enduring era of improved economic performance and suggested that rising interest rates are beginning to bite. “The details for growth were not as impressive as the 3.5% headline,” The administration advertised last year’s corporate tax cut as a spur to business spending on new machines, computers and factories. Yet the evident gains earlier this year seem to be fading, the report showed. Business investmentgrew by 0.8 percent in the quarter after an 8.7 percent gain in the previous three months. Spending on new structures fell by 7.9 percent after increasing by 14.5 percent during the prior period. “That’s probably telling us that growth in Q4 will be a bit slower paced,” said Ben Ayers, senior economist for Nationwide Insurance. Another major negative: Trade sapped the $20.7 trillion economy’s strength as imports outpaced exports by a rising margin, the report said. The president has made shrinking the trade deficit a key goal but has yet to see progress after 21 months in office. Since January, Trump has slapped tariffs on foreign-made solar panels, washing machines and industrial metals and roughly half of the $505 billion in products that the United States imports each year from China. His threats of additional tariffs on Chinese products may have encouraged U.S. companies to ramp up imports to beat rising prices, economists said. The third-quarter results fell short of expectations set by the president, who had promised in July that the third-quarter figure would be “a lot higher” than the second quarter’s 4.2 percent.
Econoday Economic Report: GDP October 26, 2018 - Consumer spending is the driver that it should be, leading a solid third-quarter GDP report that, however, does raise some fundamental questions about the outlook for the economy. GDP came in at a 3.5 percent annualized rate in the quarter which is 2 tenths above Econoday's consensus. Consumer spending, with strength centered in the key durable-goods subcomponent, easily beat high expectations, at a 4.0 percent rate that outdoes the second quarter's very strong 3.8 percent showing. Business investment wasn't the major star as it has been in prior quarters but still was in the plus column at 0.8 percent growth. Yet the slowing, following growth rates of 8.7 and 11.5 percent in the second and first quarters, may hint at a quick fade for the stimulative effects of this year's corporate tax cut. Residential investment extended its dismal run, falling at a 4.0 percent rate for the fifth contraction of the last six quarters which underscores housing as a problem sector. Another problem that may be unfolding for the economy is trade. The deficit in net exports widened by a very steep $99.0 billion in the quarter and, by itself, pulled the quarter's GDP down by 1.8 percentage points. Whatever tariff effects there are in the quarter, whether on metals or agriculture, they didn't hold down imports which surged at a 9.1 percent growth rate. Also negative for GDP is exports which posted their first contraction in 2-1/2 years at minus 3.5 percent. Coming to the rescue and outmatching the trade effect, however, is a constructive $76.3 billion build in inventories which, when measured against the prior quarter, contributed 2.1 percentage points to GDP. Inventories were a major negative in the second quarter, having been drawn down sharply and positioning the third-quarter for what proved to be a major build. Government purchases round out the components, rising at a 3.3 percent clip and adding 0.6 percentage points to the quarter for one of the strongest showings of the expansion. But stimulus from government purchases is no surprise given the government's massive $4.1 trillion in annual outlays. Another impact the government has on the economy is monetary policy where interest rates, given the perceived need at the Federal Reserve to cool demand, are going up to fight the risk of inflation. Yet inflation didn't show much life at all in the third-quarter as the GDP price index came in at only 1.7 percent. This misses the consensus by 3 tenths and is the most subdued result since the second-quarter last year. But the real surprise in the report is the strength of consumer spending where the outlook, given the enormous level of demand for labor, looks very positive. Not positive, however, is the weakness in housing and also trade where the unfolding effects of tariffs and counter-tariffs are a major risk to future quarters. Uncertain in the outlook are inventories which may, however, continue to build given the underlying strength of consumer demand. But inventories, whose effects are abstract, added disproportionately to the quarter's results, without which GDP would have come in no better than 1.4 percent.
U.S. GDP Grows Above-Forecast 3.5% on Consumers, Inventories - The U.S. economy expanded at a 3.5 percent pace in the third quarter as consumers opened their wallets, businesses restocked inventories and governments boosted spending, marking the strongest back-to-back quarters of growth since 2014. The annualized rate of gains in gross domestic product compared with the 3.3 percent median estimate in a Bloomberg survey and followed a 4.2 percent advance in the prior three months, according to Friday’s report from the Commerce Department. Consumer spending, which accounts for about 70 percent of the economy, unexpectedly accelerated to a 4 percent increase -- the best since 2014 -- while the 0.8 percent gain in nonresidential business investment was the weakest in almost two years. In two volatile categories, inventories provided the biggest contribution since early 2015, while the drag from trade was the largest in 33 years. Government spending rose by the most since 2016. The data indicate a robust job market and lower taxes continued to propel demand, giving President Donald Trump an opportunity to showcase his policies heading into the midterm congressional elections. At the same time, tariff-related bottlenecks and the trade war with China are headwinds for the nation’s second-longest economic expansion on record, while the weakness in business investment suggests the boost from corporate tax cuts may be wearing off. The pickup in private and public consumption is “what you would expect” from fiscal stimulus, but the burst in business spending “looks to be fading,” said Michael Gapen, chief U.S. economist at Barclays Plc and a former Federal Reserve official. “What we’re trying to ascertain is, is fiscal stimulus transitory or will it help sustain economic growth longer-term? This report shows the fiscal stimulus has a transitory response.” Investors have become less sanguine on the outlook amid the latest run of U.S. company earnings reports. U.S. stocks and Treasury yields were lower on Friday, with shares dragged down by disappointing earnings reports from technology bellwethers Amazon.com Inc. and Alphabet Inc. on Thursday.
Q3 GDP Of 3.5% Beats Expectations As Inventories Soar; Trade, Investment Tumble - With the US economy firing on all four cylinders heading into the 3rd quarter, largely thanks to the latent effects from Trump's fiscal stimulus, moments ago the BEA reported that in its first estimate of Q3 GDP, the US economy continued to surprise to the upside, growing at an annualized rate of 3.5%, modestly below the second quarter's 4.2% print but above the 3.3% expected. However, a quick look at the internals reveals some ugly details below the surface. While Personal consumption was indeed strong, rising 4.0% in Q3 after 3.8% in Q2, the largest increase since Q4 2014, and contributing 2.69% of the bottom line 3.49% GDP print, the main reason why the US economy grew as fast as it did in the third quarter was a build up in inventories, which contributed 2.07%, or 59% of the bottom line number. This was the biggest quarterly inventory stocking since the first quarter of 2015. All the other components of GDP were ugly, with nonresidential fixed investment, or spending on equipment, structures and intellectual property collapsing to just 0.8% in 3Q after rising a blistering 8.7% in the prior quarter. Commenting on this drop, CIBC economist Royce Mendes noes that "business fixed investment showed up only flat on the quarter, possibly a sign that the most potent effects of the tax cuts are now in the rearview mirror."Here is a breakdown of the less than stellar components:
- Fixed Investment subtracted -0.04% from the bottom line number
- Exports subtracted -0.45% from the bottom line number
- Imports subtracted -1.34% from the bottom line number
In other words, between CapEx and Net Trade, the US economy actually contracted by over 1.83%. The final offset was government consumption which added 0.56% in Q3, resulting in the following breakdown: Commenting on the report, Bloomberg economist Carl Riccadonna observed the following: "The composition of growth in the third quarter has some important implications. The economy has reverted back to the `same old' model of consumers accounting for most of the growth. Supply-siders will be disappointed to see business fixed investment essentially stalling out after a robust first half. As a result, the implication is that the surge in growth is not the onset of the economy evolving toward a new speed limit; rather, the frothiness in the second and third quarters really does appear to be largely due to a sugar high from tax cuts. Unfortunately this is not sustainable barring tax cuts 2.0."
US Growth Slowed In Q3, But Annual Pace Continued To Improve -- US GDP growth beat expectations in today’s “advance” estimate of third-quarter data. Output increased by an annual 3.5% (seasonally adjusted real rate), the Bureau of Economic Analysis reported earlier today. The gain is slightly above The Capital Spectator’s 3.3% nowcast (based on several sources) from earlier this week. Although the Q3 advance marks a solid rise, today’s results reaffirm expectations that growth has decelerated following Q2’s sizzling 4.2% surge. Despite the softer quarter gain, on a year-over-year basis the upward trend for GDP comparisons remained intact in Q3. The inflation-adjusted annual jump in real GDP ticked up to just above 3.0%, marking the ninth-straight quarterly improvement. The 3.0% increase in Q3 vs. the year-ago quarter reflects the strongest annual gain in three years, a sign that the nine-year-old economic expansion — the second-longest on record — still has room to run.The nominal measure of GDP (before adjusting for inflation) also ticked up in year-over-year terms in Q3, although just barely. Output increased 5.5%, fractionally faster than Q2’s 5.4% gain. The generally unchanged annual pace at the nominal level raises the possibility that recent rebound in economic growth may have peaked While headline GDP growth decelerated on a quarterly basis in Q3, consumer spending – the main driver of economic activity – picked up. Real personal consumption expenditures grew 4.0% in the July-through-September period, up from 3.8% in Q2. The latest gain in spending marks the strongest increase since 2014 for quarter-over-quarter comparisons. Overall, today’s results reaffirm that economic growth remains healthy and so recession risk remains low, as noted in last week’s business-cycle profile and this week’s issue of The US Business Cycle Risk Report. But with expectations now focused on the potential for an ongoing slowdown in the macro trend, the focus in the weeks ahead turns to incoming data for early clues on what to expect for Q4.
Strong GDP growth, weak fundamentals - James Hamilton - The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 3.5% annual rate in the third quarter. That’s the second quarter in a row that the number has come in above the 3.1% average for the U.S. economy over the last 70 years, and is well above the 2.2% average rate since the recovery from the Great Recession began Real GDP growth at an annual rate, 1947:Q2-2018:Q3, with the 1947-2018 historical average (3.1%) in blue and post-Great-Recession average (2.2%) in red. This brings the Econbrowser Recession Indicator Index all the way down to 1.1%, among the lowest levels we ever see. The U.S. remains clearly in the expansion phase of the business cycle. GDP-based recession indicator index. The plotted value for each date is based solely on information as it would have been publicly available and reported as of one quarter after the indicated date, with 2018:Q2 the last date shown on the graph. Shaded regions represent the NBER’s dates for recessions, which dates were not used in any way in constructing the index, and which were sometimes not reported until two years after the date. But the details behind that GDP growth concern me a little. Increased government spending contributed 0.6 percentage points to the GDP annual growth rate, with more than half of this coming from state and local government spending. Falling exports were a drag on growth– that much was expected. New Housing construction continued its three quarter decline, and nonresidential fixed investment was also weak. Most of the growth came from inventory build-up. GDP measures what is produced. If goods are produced but not purchased, inventories accumulate, so GDP can look strong even though spending is weak. Subtracting off inventories, real final sales were only up at a 1.4% annual rate in the third quarter. I conclude that the fiscal stimulus continues to help give us a favorable headline number. But I am concerned about weak investment spending and final sales.
Q3 GDP- Investment - The first graph below shows the contribution to GDP from residential investment, equipment and software, and nonresidential structures (3 quarter trailing average). This is important to follow because residential investment tends to lead the economy, equipment and software is generally coincident, and nonresidential structure investment trails the economy. In the graph, red is residential, green is equipment and software, and blue is investment in non-residential structures. So the usual pattern - both into and out of recessions is - red, green, blue. The dashed gray line is the contribution from the change in private inventories. Residential investment (RI) decreased in Q3 (-4.0% annual rate in Q3). Equipment investment increased slightly at a 0.4% annual rate, and investment in non-residential structures decreased at a 7.9% annual rate. On a 3 quarter trailing average basis, RI (red) is down slightly, equipment (green) is positive, and nonresidential structures (blue) is also up. Recently RI has been soft, but the decrease is fairly small. The second graph shows residential investment as a percent of GDP. Residential Investment as a percent of GDP decreased in Q3, however RI has generally been increasing. RI as a percent of GDP is only just above the bottom of the previous recessions - and I expect RI to continue to increase further in this cycle. The increase is now primarily coming from single family investment and home remodeling. I'll break down Residential Investment into components after the GDP details are released. Note: Residential investment (RI) includes new single family structures, multifamily structures, home improvement, broker's commissions, and a few minor categories. The third graph shows non-residential investment in structures, equipment and "intellectual property products". Investment in equipment and non-residential structures - as a percent of GDP - declined.
A Big Reason U.S. Economy Is Accelerating: Government Spending - A stark pickup in government spending, particularly in defense, has helped fuel a broad acceleration in U.S. economic growth in the past year and a half, according to a Wall Street Journal analysis of Commerce Department data. The U.S. economy has expanded at a 2.9% annual rate since April of 2017, according to the Commerce Department’s tabulations of the nation’s gross domestic product, or output. That growth rate is faster than the 2.2% annual growth rate between mid-2009—when the expansion started—and April 2017. Faster government spending accounted for nearly half of the acceleration, according to The Wall Street Journal analysis. The Commerce Department breaks down various contributors to economic growth, including government spending, business investment, consumer outlays and exports. Defense shifted from contracting at a 2.1% annual rate between June 2009 and March 2017, to growing at a 2.9% rate since April 2017. The turnaround added 0.21 percentage points on average to the nation’s overall economic growth rate, according to Commerce Department figures. When including faster spending on nondefense items and spending at the state and local levels, increased government spending accounted for 0.34 percentage point of the 0.7 percentage point increase in the growth rate since April 2017, or nearly half. Other factors are at play. Faster business investment, due in part to energy investing, has contributed 0.3 percentage point to the growth rate, while faster consumer spending accounts for about a third of the pickup. A slowdown in home building has subtracted about 0.2 percentage point from the growth rate. Economic growth is an important point of debate in the midterm elections. President Trump and Republicans say tax cuts and less regulation have accelerated growth. Democrats say faster growth is uneven and unsustainable. The role of government spending has gotten less attention from either side.
Americans Are Spending Like Crazy On Eating Out - While today's GDP print had its good and bad sides, with personal consumption rising to the highest level since Q4 2014 offset by a surge in inventories alongside a sharp drop in net exports, one aspect of today's GDP report is especially notable: spending on eating out (i.e., food service chains) has continued to grow. As shown in the chart below, in Q3 the boost to the economy from Americans eating out amounted to 0.31%, just fractionally below the 0.36% print in Q2 which was the highest since the last quarter of 1999. In fact, if one combines the data from the most recent two quarters, the contribution from eating at restaurants is the highest going back all the way to 1992. And while recent hurricanes may have provided a modest boost to this number, one possible explanation for the recent jump is that Americans are spending their extra cash from tax cuts on dining out. In addition, major restaurant companies have recently hiked menu prices to keep up with higher minimum wages and rent costs. Recent industry data show restaurant sales are growing while customer traffic declines, resulting in higher average checks, according to MillerPulse figures cited by Bloomberg Intelligence. What is surprising is that just a few days ago, McDonald US same-store sales missed expectations as guest counts dropped amid a rise in menu prices and fierce competition from Restaurant Brand’s Burger King, Wendys, Chick-fil-A and Yum Brands’ KFC and Taco Bell. Meanwhile, across the industry, restaurants are increasingly pushing delivery and discounts to attract diners. Chipotle this year is muscling its way into the delivery market with DoorDash and Postmates tieups. Meanwhile, fast-food chains are locked in a battle to offer the cheapest burger. Whatever the reason for the recent surge, it is clear that whatever money Americans have left over from he Trump tax cuts, instead of saving it, they are promptly spending on their favorite food outside the house.
Q2 Real GDP Per Capita: 2.83% Versus the 3.50% Headline Real GDP - The Advance Estimate for Q3 GDP came in at 3.5% (3.50% to two decimals), down from 4.2% in Q2. With a per-capita adjustment, the headline number is lower at 2.83% to two decimal points.Here is a chart of real GDP per capita growth since 1960. For this analysis, we've chained in today's dollar for the inflation adjustment. The per-capita calculation is based on quarterly aggregates of mid-month population estimates by the Bureau of Economic Analysis, which date from 1959 (hence our 1960 starting date for this chart, even though quarterly GDP has is available since 1947). The population data is available in the FRED series POPTHM. The logarithmic vertical axis ensures that the highlighted contractions have the same relative scale. The chart includes an exponential regression through the data using the Excel GROWTH function to give us a sense of the historical trend. The regression illustrates the fact that the trend since the Great Recession has a visibly lower slope than the long-term trend. In fact, the current GDP per-capita is 8.1% below the pre-recession trend.The real per-capita series gives us a better understanding of the depth and duration of GDP contractions. As we can see, since our 1960 starting point, the recession that began in December 2007 is associated with a deeper trough than previous contractions, which perhaps justifies its nickname as the Great Recession. The standard measure of GDP in the US is expressed as the compounded annual rate of change from one quarter to the next. The current real GDP is 3.50%. But with a per-capita adjustment, the data series is lower at 2.83%. The 10-year moving average illustrates that US economic growth has slowed dramatically since the last recession.
A 10% Drop In Stocks Would Send GDP Sharply Lower In 2019, Goldman Finds - In addition to boosting the intangible "wealth effect" by raising consumer confidence and encouraging spending, rising stock prices have a benign effect on the broader economy by directly stimulating US economic growth and GDP. And vice versa: when stocks drop, tightening financial conditions, US GDP is impacted adversely.That's the observation made in a Friday note from Goldman economists, which tries to quantify the growth effect of the equity sell-off, and finds that "the stock market is likely to turn from a significant contributor to strong growth at the start of the year into a modest drag next year, barring a further rebound in equity prices."Picking up where another recent Goldman note left off, which as we discussed yesterday concluded that the Fed will have to hike rates more than the market expects in order to substantially tighten financial conditions and slow down the economy, bank economists Jan Hatzius and Dean Struyven write that "the 6% decline in the stock market since late September has been the most important driver of the recent tightening in financial conditions." As a result, the bank now estimates "that the 0.5% boost to GDP growth from higher equity prices at the start of the year has already disappeared."As shown in the chart above, Goldman explains that the run-up in the equity component, i.e. rising stock prices, of the Financial Conditions Index drove most of the 185 basis points easing from the start of 2017 till late January, when the index hit its record low. Conversely, the 6% sell-off in the S&P 500 since the September all-time high has been the biggest factor in the tightening of financial conditions and has accounted for two thirds of the roughly 50bp FCI tightening over the last month (other factors include the rise in rates and the dollar which account for about half of the -1.5% swing in the FCI impulse from +0.75pp at the start of the year to -0.75pp in the first half of next year).
A chart shows how everything has changed since Trump became president - Since Donald Trump won the presidency, he has presided over both one the most tumultuous political times in recent memory, as well as the best economy the country has seen since well before the financial crisis. Consumer and small business confidence is up — but so are both the national debt and budget deficit.The chart above, using mostly data compiled by Goldman Sachs, quantifies just how much things changed from the days just before the election in November 2016 through September 2018.Of course, the stock market has weakened in October, which has been its historically most volatile month. The chart doesn't include GDP, which has averaged 2.72 percent since Trump took over, compared to the 1.6 percent gain in 2016. But the numbers provide a solid overview of how conditions have evolved during the 45th president's time in office.
How conservatives are turning against one of their core economic principles: efficiency - What if conservatives' longstanding obsession with maximizing GDP growth and efficiency has actually been a catastrophic blunder? Many leftists and progressives might respond, "Well, duh."The news is that one of conservatism's big thinkers may agree.Oren Cass is a senior fellow at the Manhattan Institute, a premier conservative think tank. Before that he was the domestic policy director for Mitt Romney's 2012 presidential bid and a prolific writer on matters of politics and policy. He has a big new piece out in the American Interest — coupled with a new book — that poses a pretty straightforward critique: "In making GDP growth and rising consumption the central objectives of public policy, economic piety represents a truncated and ultimately self-undermining concept of prosperity," he writes.American discourse tends to treat gross domestic product as the catch-all measure for society's prosperity and well-being. But ultimately, GDP just measures how much we consume. As plenty of people note, the measurement tells us nothing about how consumption is distributed.But Cass cuts even deeper: "What if people's ability to produce matters more than how much they can consume?" This is a 180-degree turn from the orthodoxy that's ruled economic thinking — especially conservative economic thinking — for decades. As the economist Milton Friedman once argued, "jobs are a price" we pay to consume. According to Friedman, our goal should be to minimize jobs: to create as much as possible with as few jobs as possible. In other words, to maximize efficiency. And plenty of economists since have lamented American politics' fixation on "jobism."
Trump proposes tax cut; GOP lawmakers privately skeptical - President Trump on Monday said he would propose a tax cut for middle-class Americans next week “of about 10 percent” and that Congress would vote on it soon, but he offered few details and lawmakers did not appear to have any plans to act on his announcement. Speaking to reporters before a trip to Texas, Trump said the White House was looking at putting out a proposal next week, which he said would be “a very major tax cut for middle-income people. And if we do that it’ll be sometime just prior to November.” “We’ll do the vote after the election,” Trump said, again suggesting a cut after floating the idea on Saturday. Aside from saying the tax cut would be about 10 percent, the president offered no details. Republican legislative leaders, who would need to guide any tax cut through Congress, appeared caught off guard once again by Trump’s comments. Representatives of House Speaker Paul D. Ryan (R-Wis.) and House Ways and Means Committee Chairman Kevin Brady (R-Texas) referred questions back to the White House. At a rally in Texas Monday evening, Trump said he had been working on the new tax-cut plan for several months with Brady. Brady, however, has not mentioned anything about such a plan in public. Legislation enacting such a cut has not been planned on Capitol Hill, and congressional Republicans were privately skeptical that a vote could happen during the post-election lame duck session, which might be dominated by a fight over Trump’s border wall. Congress passed a massive tax-cut plan last year. The law’s biggest change permanently cut the corporate tax rate from 35 percent to 21 percent. It also reduced income tax rates at all levels, while changing the structure of many tax deductions. Nonpartisan analyses of the plan found that the law’s individual tax cuts overwhelmingly benefit the wealthy. While the corporate reduction is permanent, the cuts for individuals and families would expire after seven years. Republicans drafted the law that way to limit its projected additions to the deficit, and they have said a future Congress will extend the individual cuts. House Republicans have approved a bill that would make those tax cuts permanent, but the Senate has not taken up the measure.
Republicans and Democrats prepare bipartisan agenda of social cuts and war - With only two weeks until Election Day, November 6, early voting has already begun in many states to select 435 members of the House of Representatives, 35 state governors and 36 US senators, as well as thousands of members of state legislatures. The Democrats and Republicans are raising and spending a record amount, more than $5 billion, to carry out mudslinging attacks on each other and promote the illusion that voters have a real choice between these two equally right-wing parties controlled by the corporations and the wealthy. The election campaign has unfolded under conditions of deepening alienation of the population from both big-business parties. At least half the population will vote for neither party, under conditions where Trump, the Democratic Party, and the Republican Party are all “under water”—far more disapprove than approve, according to the polls—and Congress as an institution has an approval rating of barely ten percent. No amount of attack ads and media propaganda can alter the reality that both parties uphold the profit system, defend the interests of the super-rich, and regard the working people, the vast majority of the population, with a combination of fear and contempt. The Republican Party, led by President Trump, is campaigning on a program of undisguised racism directed at immigrants, rejection of even the mildest domestic reform proposal as “socialism,” and militaristic bluster. Trump chose campaign rallies last week as occasions to make a series of belligerent threats: to send troops to the US-Mexico border, to tear up the Intermediate Nuclear Forces treaty with Russia, to step up trade war with China. The Democratic Party has retreated steadily over the past two years before Trump’s ultra-right barrage, offering only token opposition to such measures as the persecution of immigrants, the $1.5 trillion tax cut for the wealthy, and the installation of two far-right justices on the Supreme Court. They have embraced Trump’s policies of militarism and economic warfare, joining in the near-unanimous passage of a record $716 billion military budget, and applauding his trade war measures against China and other countries. Behind the strident denunciations and recriminations between the two capitalist parties, however, preparations are well under way for a new stage of bipartisan collaboration against the working class once the election is safely past.
Will Trump Really Cut Defense Spending by 5%? It’s Way Too Early To Say - The Pentagon’s No. 2 confirms that the president’s surprise order will affect the military, but experts say there may ultimately be no decline at all.The U.S. military will indeed be affected by a 5 percent cut in federal spending ordered by President Trump at a cabinet meeting last week, Deputy Defense Secretary Patrick Shanahan said Friday.“We will do as directed by the president and give him a $700 billion budget and then everybody gets to decide how to work with that,” Shanahan said Friday at the Military Reporters and Editors Conference in Arlington, Virginia.Since that $700 billion includes the Energy Department’s nuclear funding, as is customary, it heralds a dip from 2019’s budget of $716 billion and a planned $733 billion for 2020. But defense budget experts put little stock in that number, which they called just an opening salvo in the battle over the next budget. “I don’t even take this number seriously — it’s meaningless,” said Gordon Adams, who ran defense budgeting at the Office of Management and Budget during the Clinton administration. “It’s an opening shot in the game.”
Air Force Ends Purchase of Pricey Coffee Cups After Senator Complains The Air Force isn't going to put in an order for more thousand-dollar coffee cups anytime soon. Air Mobility Command officials on Wednesday said that leaders have instructed units they've entered a "do not order until further notice" on hot cups that can reheat beverages on refueling tankers and cargo aircraft. "The Air Force suspended buying the cups to address the cost and deliver potential alternative solutions, such as using 3D printing and capability in house, to best use of taxpayer dollars," said AMC spokesman Col. Chris Karns. Now, any units "attempting to requisition the hot cup through the Air Force Supply System will be advised 'Do Not Order Until Further Notice,'" Karns said in an email Wednesday. Air Force Times was first to report the stoppage. The announcement follows a minor uproar over the cost of the cups, which caught the attention of a lawmaker known for campaigns against government waste.
Russia liquidates nearly all its holdings of US debt & invests money in gold -- The Central Bank of Russia has continued getting rid of US Treasury bonds in August. The share of Russian investments in American debt is getting close to zero. Russian investments in US securities as of August have fallen to just $14 billion. Back in 2011, Russia was one of the largest holders of US debt with a $180 billion investment.The reason is not only about politics and US sanctions against Russia, a broker at Otkritie bank Timur Nigmatullin told RIA Novosti. The US Federal Reserve is hiking interest rates, which makes American bonds cheaper, he said. “Russia has almost dropped out of the list of holders of US government debt, being the 54th largest holder.” “A further sale of US Treasury bonds by Russia will most likely be compensated by buying gold and opening short-term deposits at banks,” he said. The share of precious metals in the country's foreign reserves has reached a record 18 percent, closely approaching the share of dollar investments.The largest investors in US debt, China and Japan, have also cut their holdings. Chinese holdings of US sovereign debt dropped to $1.165 trillion in August, from $1.171 trillion in July, marking the third consecutive month of declines. Japan has slashed its holdings of US securities to $1.029 trillion in August, the lowest since October 2011. The reason for holding money in US bonds is global trade, which is still dominated by the dollar, director of macroeconomic analysis at Expert RA Anton Tabah told Izvestia daily. So, countries are forced to have a lot of dollars in cash, and US bonds are the best option for that.
Trump says US will withdraw from nuclear arms treaty with Russia - Donald Trump has confirmed the US will leave an arms control treaty with Russia dating from the cold war that has kept nuclear missiles out of Europe for three decades.“We’ll have to develop those weapons,” the president told reporters in Nevada after a rally. “We’re going to terminate the agreement and we’re going to pull out.”Trump was referring to the 1987 Intermediate-range Nuclear Forces treaty (INF), which banned ground-launch nuclear missiles with ranges from 500km to 5,500km. Signed by Ronald Reagan and Mikhail Gorbachev, it led to nearly 2,700 short- and medium-range missiles being eliminated, and an end to a dangerous standoff between US Pershing and cruise missiles and Soviet SS-20 missiles in Europe. The Guardian reported on Friday that Trump’s third national security adviser, John Bolton, a longstanding opponent of arms control treaties, was pushing for US withdrawal. The US says Russia has been violating the INF agreement with the development and deployment of a new cruise missile. Under the terms of the treaty, it would take six months for US withdrawal to take effect.US hawks have also argued that the INF treaty ties the country’s hands in its strategic rivalry with China in the Pacific, with no response to Chinese medium-range missiles that could threaten US bases, allies and shipping. Bolton and the top arms control adviser in the National Security Council (NSC), Tim Morrison, are also opposed to the extension of another major pillar of arms control, the 2010 New Start agreement with Russia, which limited the number of deployed strategic warheads on either side to 1,550. That agreement, signed by Barack Obama and Dmitri Medvedev, then president of Russia, is due to expire in 2021.
Trump says US will withdraw from Intermediate Range Nuclear Forces treaty- President Donald Trump said Washington will repudiate the 1987 Intermediate-Range Nuclear Forces (INF) treaty and develop intermediate range nuclear missiles. “We’ll have to develop those weapons,” he said. “We’re going to terminate the agreement and we’re going to pull out.”With this decision, Washington is scrapping the entire nuclear arms control framework that emerged from the Cold War. In 2001, Washington repudiated the 1972 Anti-Ballistic Missile (ABM) treaty, so it could begin working on a “Star Wars” anti-ballistic missile system to shoot down enemy ballistic missiles. Now it is scrapping the 1987 treaty that bans US or Russian manufacture and deployment of nuclear missiles with ranges of 500-5,500 kilometers (310-3,420 miles). For the first time since 1972, there is to be no treaty limiting the major powers’ deployment of nuclear arms.Washington is aggressively stoking a nuclear arms race, with Russia and China first in its gun-sights, which would provoke stepped-up missile deployments across Europe and East Asia. It points to the immediate and growing risk of nuclear war between the major powers.Trump blamed his decision to scrap the INF treaty on Moscow and Beijing: “Russia has violated the agreement. They’ve been violating it for many years and I don’t know why President Obama didn’t negotiate or pull out. … Unless Russia comes to us and China comes to us and they all come to us and they say, ‘Let’s all of us get smart and let’s none of us develop those weapons,’ but if Russia’s doing it and if China’s doing it and we’re adhering to the agreement, that’s unacceptable. So we have a tremendous amount of money to play with with our military.”Moscow condemned Trump’s statement as “blackmail” against Russia. Deputy Foreign Minister Sergey Ryabkov told TASS: “At first glance, I can say that apparently the INF Treaty creates problems for pursuing the line towards the US total domination in military sphere…This would be a very dangerous step, which, I’m sure, won’t be just understood by the international community, but arouse serious condemnation of all members of the world community.”Ryabkov said he would discuss it with US National Security Advisor John Bolton, who supports killing the INF treaty. Bolton arrived yesterday in Moscow for two days of talks starting today.
Trump’s threat to tear up nuclear pact with Russia met with alarm in Europe, silence from Democrats --The threat issued over the weekend by US President Donald Trump to unilaterally rip up a key disarmament treaty with Russia has provoked vows from Russia to retaliate, expressions of sharp concern among Washington’s NATO allies and near total silence from Trump’s ostensible opposition in the Democratic Party. Two weeks before the US midterm elections, not a single candidate, Democrat or Republican, is raising the growing danger of a new nuclear arms race and of direct military confrontation between the world’s two largest nuclear powers as an issue. No section of the ruling political establishment has any interest in alerting the population to the real and present danger of a catastrophic nuclear war. The Intermediate-Range Nuclear Forces (INF) treaty that Trump has vowed to scuttle was negotiated in 1987 between US President Ronald Reagan and Mikhail Gorbachev, whose “perestroika” and “glasnost” policies paved the way to capitalist restoration and the dissolution of the Soviet Union.The deal banned the production and deployment by the US and Russia of land-based ballistic missiles—both conventional and nuclear—with ranges between 500 and 5,500 kilometers (310–3,420 miles). It represented a significant concession by Moscow—previously rejected by Gorbachev’s predecessors and the Soviet military command—resulting in the destruction of 1,752 Soviet missiles, including SS-20s aimed at Washington’s European NATO allies, as compared with 859 less powerful US missiles, most of them Pershing IIs pointed at Moscow and other Soviet targets. The deployment of the US missiles had provoked mass protests, particularly in Germany, over the fear that the arms buildup threatened to turn Europe into the main battlefield in a US-Soviet nuclear war. Washington has charged Moscow with developing and deploying a new intermediate range nuclear missile, which Russia denies.The danger that the dispute over the so-called intermediate-range nuclear missiles could turn into a direct military conflict between the world’s two largest nuclear powers became all too apparent earlier this month, when the US NATO ambassador, Key Bailey Hutchison, threatened a pre-emptive military strike against Russia. Hutchison told a press conference at NATO headquarters in Brussels that if Moscow continued its development and alleged deployment of the missile that Washington claims violates the INF treaty, the Pentagon was prepared to “take out” the missile.
Quitting the INF Treaty Is a Serious Mistake - The Trump administration is preparing to quit the Intermediate-Range Nuclear Forces (INF) Treaty thanks to the arms control-hating John Bolton: The Trump administration has told U.S. allies that it wants to withdraw from the landmark Reagan-era Intermediate-range Nuclear Forces Treaty, or INF, and plans to inform Russian leaders of its position in the coming days, said foreign diplomats and other people familiar with the deliberations.The planning is the brainchild of Trump’s hawkish national security adviser, John Bolton, who has told U.S. allies he believes the INF puts Washington in an “excessively weak position” against Russia “and more importantly China,” said a diplomat who spoke on the condition of anonymity to discuss the sensitive issue.The president confirmed the intention to withdraw from the treaty this weekend:President Donald Trump said Washington will exit the Cold-War era treaty that eliminated a class of nuclear weapons due to Russian violations, triggering a warning of retaliatory measures from Moscow. The treaty has served U.S. and European security well for three decades. Casting aside a landmark arms control agreement risks starting a new destabilizing arms race with Russia at a time when relations with Moscow are already extremely poor. Withdrawing from the treaty amounts to letting Russia off the hook for its recent violations, and it gains the U.S. nothing except the ability to waste more resources on nuclear weapons that we don’t need. Killing the treaty isn’t going to remedy any of the things that critics complain about. China isn’t a party to the treaty and hasn’t been bound by its limitations, but it is difficult to see why the U.S. needs to be able to have land-based intermediate-range ballistic missiles in East Asia in any case. Giving up on an arms control treaty that has been largely successful for European security because it does not address new developments in another part of the world just creates a new problem without fixing any of the others. Quitting the INF Treaty is just one example of Bolton’s reflexive hostility to any and all nonproliferation and arms control agreements. In addition to supporting withdrawal from the INF Treaty, Bolton is also resisting an extension of New START:
Russia nuclear treaty: Gorbachev warns Trump plan will undermine disarmament - Former Soviet President Mikhail Gorbachev says US President Trump's plan to withdraw from a key Cold War nuclear weapons treaty is a reversal of efforts to achieve nuclear disarmament. Mr Gorbachev - who signed the Intermediate-Range Nuclear Forces (INF) treaty with President Reagan in 1987 - questioned the plan's intelligence. Mr Trump said Russia had been "violating [the INF] for many years". Russia has condemned the plans and threatened to retaliate. The Kremlin said President Vladimir Putin would be seeking an explanation from visiting US National Security Adviser John Bolton. Germany was the first US ally to criticise the move, with Foreign Minister Heiko Maas urging Washington to consider the consequences both for Europe and for future disarmament efforts. The INF banned ground-launched medium-range missiles, with a range of between 500 and 5,500km (310-3,400 miles). It was signed near the end of the Cold War, a period of relations between the US and the Soviet Union from 1945 to 1989 marked by intense international tension and overshadowed by the threat of nuclear conflict. In the past five decades the US and Russia have signed a range of joint agreements to limit and reduce their substantial nuclear arsenals. President Trump said the US would not let Russia "go out and do weapons [while] we're not allowed to". "I don't know why President [Barack] Obama didn't negotiate or pull out," the president said of the INF treaty after a campaign rally in Nevada.
US issues warning to Russia about helping Iran escape upcoming oil sanctions - The United States warned Russia on Sunday about assisting any potential Iranian attempts to evade an upcoming round of U.S. sanctions against the Islamic Republic, scheduled to take effect on Nov. 4, months after U.S. President Donald Trump withdrew America from the 2015 nuclear deal. “Iran might be pushing the idea of Russia selling their oil on the world market to evade sanctions,” a senior administration official told The Financial Times. “I would discourage Russia from even considering this. It would be in Russia’s best interests not to facilitate Iranian evasion of U.S. sanctions.” This development comes as U.S. National Security Advisor John Bolton is expected to meet senior Russian officials in Moscow early next week. Russia supported the nuclear deal and supports Iran’s proxies, such as Syrian President Bashar Assad and Hezbollah in Lebanon. Additionally, U.S. Treasury Secretary Steve Mnuchin, visiting Israel this week, said on Sunday that it will be difficult for countries to receive waivers on Iran oil sanctions. “I would expect that if we do give waivers, it will be significantly larger reductions,” he said in an interview with Reuters. In light of Bolton’s remarks in August about completely eliminating Iranian oil exports, “I don’t expect we will get to zero in November, but I do expect we will eventually get to zero,” added Mnuchin. “There have been already very significant reductions in advance of this date.”
What sanctions on Russia and China really mean - Pepe Escobar - A crucial Pentagon report on the US defense industrial base and “supply chain resiliency” bluntly accuses China of “military expansion” and “a strategy of economic aggression,” mostly because Beijing is the only source for “a number of chemical products used in munitions and missiles.”Russia is mentioned only once, but in a crucial paragraph: as a – what else – “threat,” alongside China, for the US defense industry.The Pentagon, in this report, may not be advocating total war against both Russia and China – as it was interpreted in some quarters. What it does is configure the trade war against China as even more incandescent, while laying bare the true motivations behind the sanctioning of Russia.The US Department of Commerce has imposed restrictions on 12 Russian corporations that are deemed to be “acting contrary to the national security or foreign policy interests of the US.” In practice, this means that American corporations cannot export dual-use products to any of the sanctioned Russian companies.There are very clear reasons behind these sanctions – and they are not related to national security. It’s all about “free market” competition.At the heart of the storm is the Irkut MC-21 narrow-body passenger jet – the first in the world with a capacity of more than 130 passengers to have composite-based wings.AeroComposit is responsible for the development of these composite wings. The estimated share of composites in the overall design is 40%.The MC-21’s PD-14 engine – which is unable to power combat jets – will be manufactured by Aviadvigatel. Until now MC-21s had Pratt & Whitney engines. The PD-14 is the first new engine 100% made in Russia since the break up of the USSR. Aviation experts are sure that an MC-21 equipped with a PD-14 easily beats the competition; the Airbus A320 and the Boeing-737. Then there’s the PD-35 engine – which Aviadvigatel is developing specifically to equip an already announced Russia-China wide-body twinjet airliner to be built by the joint venture China-Russia Commercial Aircraft International Corp Ltd (CRAIC), launched in May 2017 in Shanghai. Aviation experts are convinced this is the only project anywhere in the world capable of challenging the decades-long monopoly of Boeing and Airbus. Will these sanctions prevent Russia from perfecting the MC-21 and investing in the new airliner? Hardly. Top military analyst Andrei Martyanov convincingly makes the case that these sanctions are at best “laughable,” considering how “makers of avionics and aggregates” for the ultra-sophisticated Su-35 and Su-57 fighter jets would have no problem replacing Western parts on commercial jets.
Trump Threatens US Will Increase Nukes Until Russia, China Come To Their Senses -- After hours of closed door talks in Moscow between US National Security Advisor John Bolton and his Russian counterpart Secretary of the Russian Security Council, Nikolay Patrushev, Bolton told reporters that the United States has yet to take a decision on whether it plans to deploy missiles in Europe if the Intermediate-Range Nuclear Forces Treaty (INF) is scrapped. Bolton further said that he now understands Russia’s position on nuclear arms regulations and treaties much better, and added that more consultations on arms treaties are needed, while further denying prior Russian charges that a US pullout of the INF was an attempt at "blackmail," according to Russian state media sources. He subsequently had a 90-minute meeting with Russian Foreign Minister Sergey Lavrov and later in the trip is expected to meet with President Vladimir Putin. John Bolton shakes hands with Russian Security Council Secretary Nikolai Patrushev. This comes following President Trump's shock weekend announcement concerning the Reagan-era treaty with the Soviet Union, wherein he said after a campaign rally in Elko, Nevada: "We’re not going to let them violate a nuclear agreement,” and indicated, “We’re going to terminate the agreement." The Guardian had the day prior to the Saturday statement revealed that Bolton - in what some described as an overreach of the position's typical role - had been pushing Trump to abandon the Intermediate Range Nuclear Forces Treaty. Moscow's reaction on Sunday was fierce with Russia's Deputy Foreign Minister Sergei Ryabkov warning that Trump's pledge to "terminate" the treaty was "very dangerous" and that "[Withdrawal] won't be understood by the international community, but [instead] arouse serious condemnation of all members of the world community, who are committed to security and stability and are ready to work on strengthening the current regimes in arms control." While in Moscow for his two day working visit with Russian officials, Bolton explained in an interview with the Ekho Moskvy radio station that the weapons systems the INF concerns are no longer exclusively operated by the US and Russia, but other countries like China and North Korea are in the process of producing and testing such systems. Thus, he said, the issue can't be solved merely between the US and Russia, and has to be revised. He further cited "concerns" that Russia is in violation of the treaty but didn't go into detail as to exactly how. Should the INF treaty collapse, the Strategic Arms Reduction Treaty (START) would remain one of last obstacles before uncontrolled nuclear proliferation. It is set to expire in 2021, and Bolton said that Washington has not formulated its position on START just yet. Meanwhile, with Bolton in Moscow President Trump words were more direct as he spoke to reporters from the White House steps on Monday. Trump said of the INF that “Russia has not adhered to the agreement,” and warned that the United States intends to build up its nuclear arsenal until “people come to their senses.” Trump was also addressing China, which both he and Bolton have implied to be part of any newly formulated nuclear arms control treaty. In response to reporters' questioning whether this is a "threat" Trump said: It's a threat to whoever you want to include China and it includes Russia and it includes anybody else that wants to play that game... [Russia has] not adhered to the spirit of that agreement or to the agreement itself.
"No Chance INF Will Be Renegotiated" Says Top Russian Official Ahead Of Trump-Putin Meeting - On Wednesday a top Russian defense official warned that it's impossible that Moscow will renegotiate the the Intermediate-Range Nuclear Forces (INF), said to likely be at the top of the agenda when Presidents Vladimir Putin and Donald Trump are set to meet in Paris on November 11 on the sidelines of commemorative events of the 100th anniversary of the end of the First World War. Chairman of the Defense Committee of the State Duma, Vladimir Shamanov, is reported to have said there's "no chances that the nuclear treaty will be renegotiated" citing Russia's position of there being "no turning point" away from the Reagan and Soviet-era 1987 treaty placing restrictions on nuclear-capable missiles and outlining arms reduction agreements.This comes after Russian officials reportedly urged US National Security Advisor John Bolton to stay in the treaty during his trip to Moscow this week, something he rebuffed while saying, “There’s a new strategic reality out there,” and described the INF Treaty as a “bilateral treaty in a multipolar ballistic missile world,” that remains insufficient as it does not account for countries like China, Iran or North Korea.
Trump's missile treaty withdrawal: “Prepare for nuclear war” -- On Saturday, US President Donald Trump announced that the United States will withdraw from the Intermediate-Range Nuclear Forces (INF) treaty, which prohibited Washington and Moscow from developing short- and medium-range missiles. It is difficult to overstate the criminality and recklessness of this action. The lives of billions of people in Europe and East Asia have been deliberately placed in the crossfire of Washington’s nuclear buildup against Beijing and Moscow.American military planners are intent on not only building, but using, nuclear weapons in combat. They aim to demonstrate to their potential adversaries that no humanitarian or moral constraints exist for them, and that Washington out-does its rivals not just in weapons, but in bloodlust.These plans are being laid in secret. The New York Times has treated the US withdrawal from the treaty as a non-issue. It was not even front-page news, and the newspaper published no editorial or columns about it. Nor was it discussed on the Sunday talk shows. In the foreign policy press and the publications of think tanks, however, nuclear war is a preeminent issue. Even before the White House’s announcement, Foreign Affairs dedicated its current issue to a discussion of nuclear war, with its cover featuring a missile launch.The issue features a column by Elbridge A. Colby, one of the principal authors of the National Defense Strategy published by the Pentagon in January, which proclaimed the effective end of the “war on terror” and the beginning of “great-power competition.”Colby, the former deputy assistant secretary for strategy and force development, titled his article, “If You Want Peace, Prepare for Nuclear War.” He writes: “The risks of nuclear brinkmanship may be enormous, but so is the payoff from gaining a nuclear advantage over an opponent.”“Any future confrontation with Russia or China could go nuclear,” Colby warns. “In a harder-fought, more uncertain struggle, each combatant may be tempted to reach for the nuclear saber to up the ante and test the other side’s resolve, or even just to keep fighting.”A sane person would see this as an argument for the abolition of nuclear weapons. But in the minds of the Pentagon’s professional killers, it speaks to the urgent need to build and use such weapons.
“Peace Comes Through Strength”: Pence Won’t Rule Out Nukes in Space — The 1967 Outer Space Treaty, of which the United States is a signatory, strictly forbids the positioning of nuclear weapons anywhere in outer space. With the Trump Administration’s rush to militarize space, however, that may be a temporary deal.Vice President Mike Pence said that the US has flexibility on its military activities in outer space, and refused to rule out the idea that the US would position nuclear weapons there in the future, saying it would “advance the principle that peace comes through strength.”Pence further said that the question of nuclear weapons is “the president’s determination,” and that while it’s in the interest of every nation to keep nukes out of space for now, at some point this may prove to be an way to show more “strength.” Pence further insisted that space is a “warfighting domain” for the United States, and that for the time being, the Outer Space Treaty does not strictly get in the way of America’s militarization efforts.
Pence Won’t Rule Out Nuclear Weapons in Space as Plans for New Force Begin -- If officials can advocate for reusable rockets to deliver cargo to troops from space ports, perhaps more firepower in space is possible, too. Vice President Mike Pence on Tuesday didn't immediately rule out positioning nuclear weapons in space sometime in the future. In a conversation with the Washington Post during its "Transformers: Space" summit, Pence was asked if the United States was looking to renegotiate the terms of the 1967 Outer Space Treaty, which currently bans "weapons of mass destruction," but still allows for conventional weapons in orbit. "That treaty...doesn't ban military activity," Pence said. "It gives nations a fair amount of flexibility in operating in their security interests in outer space. At this time we don't see any need to amend the treaty, but as time goes forward, the hope that we could continue to see outer space as a domain where peace will reign will require military presence."Post reporter Robert Costa, who interviewed Pence onstage at the forum, asked him if he thought nuclear weapons should be banned from space. "Well, look. I think what we need to do is make sure that we provide for the common defense of the people of the United States of America. And that's the president's determination here," Pence replied. "What we want to do is continue to advance the principle that peace comes through strength." The vice president on Tuesday headlined a few events to promote plans for the Trump administration's proposed Space Force, intended to be the sixth military branch.
How To Get Distracted From What Is Most Important - Barkley Rosser - Of course as the midterm elections are nearly upon us, there is a rising cacophony of issues bubbling up, especially as Donald Trump attempts to excite his extremist base with base fears, while trying to distract most voters from threats by GOPs in Congress to cut the social safety net. So we are now going to have a spectacle every day from now to the election of having top stories on nearly all media focusing on this caravan of Hondurans approaching the US. Trump declares this to be a national security crisis, which his fervent followers clearly hysterically accept. OTOH, we have the news over the weekend that Trump is planning to withdraw the US from the INF nuclear treaty, signed in 1987 by Reagan and Gorbachev. The still living Gorby has declared that doing so is “stupid.” That is putting it mildly. This appears to be the brainchild of super-hawk John Bolton, now in Moscow, where he is also soft soaping Russian meddling in US elections. But talk is that if INF goes, so will New START, leaving almost no nuclear arms treaties in place between Russia and the US. Yes, Russia has been reportedly violating the INF treaty in some cases, but is just throwing out an arms control apparatus that took so long to negotiate the way to go? Bolton clearly thinks so, but he has also talked about how maybe we should use nuclear weapons, echoing loose similar talk coming out of some Russians earlier. There is also talk of a renewed arms race, which our military-industrial complex would love. Really, this seems to be coming basically out of nowhere. Are we to return to a Cold War and arms race and fearing a nuclear war? It took decades for Thomas Schelling to convince world leaders with nuclear weapons to foreswear the first use of them. Now he is dead, and we are suddenly hearing all this loose talk and possible unraveling. Frankly, this is far more dangerous than this Honduran caravan, but it is back page news, and I fear most people are unaware of it, more worried about Central American immigrants than that the threat of nuclear destruction of the entire human species is suddenly increasing. We must not be so easily distracted.
U.S. Withdrawal from the INF Treaty: The Facts and the Law – Lawfare - On Oct. 20, President Trump announced that the United States would pull out of the Intermediate-Range Nuclear Forces (INF) Treaty, a 1987 bilateral agreement prohibiting the United States and Russia from possessing, producing or test-flying ground-launched ballistic and cruise missiles with a range of 500 to 5,500 kilometers and their launchers. Speaking at a rally in Elko, Nev., Trump cited Russian violations as the chief reason for the U.S. withdrawal and said the United States would develop intermediate-range missiles until Russia and China—which is not party to the INF Treaty—agreed to cease development of their own intermediate-range missiles. Interestingly, prior to Trump’s announcement, White House officials had indicated that the administration had not yet decided to withdraw from the treaty. Shortly after the president’s statement, national security adviser John Bolton traveled to Moscow to discuss Russia’s violations and the prospect of a U.S. withdrawal. The INF is the latest in a series of treaties and international agreements that the administration has decided to terminate, and the pace of withdrawals appears to have accelerated since Bolton replaced H.R. McMaster as Trump’s national security adviser. The INF Treaty has long been in Bolton’s sights. In a 2014 Wall Street Journal piece co-authored with John Yoo, entitled “An Obsolete Nuclear Treaty Even Before Russia Cheated,” Bolton criticized the Obama administration for “engaging in contortions to save the INF” in the face of renewed Russian aggression and called on Washington to withdraw from the treaty. Bolton’s personal views aside, there are also real strategic concerns underlying the U.S. INF withdrawal, should the administration follow through. Moreover, Trump’s announcement is hardly the first time Russia has been accused of significant breaches of the treaty.The INF was a Cold War success story. The process that culminated in the adoption of the INF began in the late 1970s, when the Soviet Union introduced a new nuclear-capable intermediate-range missile, the SS-20, to replace older models of intermediate-range missiles. The SS-20 was mobile, accurate and more easily concealable, and its 5,000 kilometer range could reach Western Europe, North Africa, the Middle East, most of Asia, Southeast Asia and Alaska from Soviet territory. The United States was concerned that this development would give the Soviet Union a strategic edge, and reshape the security environment in Europe and elsewhere.
Mr. Putin Goes to Washington? - Russian President Vladimir Putin has been invited to visit Washington in early 2019, according to John Bolton, President Donald Trump’s national security advisor. That meeting would come as the administration confronts fresh challenges on Russia, China, and North Korea. “We have invited President Putin to Washington after the first of the year for, basically, a full day of consultations,” Bolton, recently in Russia, said on Friday in Georgia. The announcement was light on specifics: “What the scheduling of that is we don’t quite know yet.” The trip had been floated as early as this past summer, but if confirmed, it would set up a high-stakes summit to kick off next year’s calendar. Putin’s visit would come after the midterm elections, and if it takes place in early January, it would coincide with the swearing in of a new Congress. The Kremlin strongman could face an Democratic-controlled legislature, or an emboldened, fully Trumpified GOP that managed to survive a worst-case election scenario. The trip could also come after the release of Special Counsel Robert Mueller’s report on Russian interference in the 2016 election. Neither the Kremlin nor the White House had confirmed Bolton’s remarks as of this afternoon. Putin, in Russia this week with Bolton, held out hope of eventually repairing his relationship with America, but appeared frustrated at the current pace of progress.
Who profits from the end of the mid-range nuclear treaty? - The Bulletin of the Atomic Scientists has moved its Doomsday Clock to only 2 minutes to midnight. It might be tempting to turn this into a mere squabble about arrows and olives if this wasn’t such a terrifying scenario. US president Ronald Reagan and Mikhail Gorbachev, secretary-general of the USSR, signed the Intermediate-Range Nuclear Forces Treaty (INF) in 1987. The Arms Control Association was extremely pleased. “The treaty marked the first time the superpowers had agreed to reduce their nuclear arsenals, eliminate an entire category of nuclear weapons, and utilize extensive on-site inspections for verification.”Three decades later, the Trump administration wants to unilaterally pull out of the INF Treaty.Earlier this week President Trump sent his national security adviser John Bolton to officially break the news to Russian President Vladimir Putin in Moscow. As they were discussing extremely serious issues such as implications of a dissolving INF Treaty, the perpetuation of anti-Russia sanctions, the risk of not extending a new START Treaty and the deployment, in Putin’s words, of “some elements of the missile shield in outer space”, the Russian President got into, well, arrows and olives: “As I recall, there is a bald eagle pictured on the US coat of arms: it holds 13 arrows in one talon and an olive branch in the other as a symbol of peaceful policy: a branch with 13 olives. My question: has your eagle already eaten all the olives leaving only the arrows?” Bolton’s response: “I didn’t bring any olives.” By now it’s clear the Trump administration’s rationale for pulling out of the INF Treaty is due, in Bolton’s words, to “a new strategic reality”. The INF is being dismissed as a “bilateral treaty in a multipolar ballistic missile world”, which does not take into consideration the missile capabilities of China, Iran and North Korea. But there is a slight problem. The INF Treaty limits missiles with a range from 500 km to 5,000 km. China, Iran and North Korea simply cannot pose a “threat” to the United States by deploying such missiles. The INF is all about the European theater of war. So, it’s no wonder the reaction in Brussels and major European capitals has been of barely disguised horror. EU diplomats have told Asia Times the US decision was a “shock”, and “the last straw for the EU as it jeopardizes our very existence, subjecting us to nuclear destruction by short-range missiles”, which would never be able to reach the US heartland.
John Bolton Behind Whisper Campaign To Oust Mattis - Long before President Trump declared that his defense secretary, whom he had previously praised as "the real deal", was actually "kind of a Democrat", National Security Advisor John Bolton and his deputy, Mira Ricardel, had launched a "whisper campaign" within the West Wing to try to oust the longtime general, eventually succeeding in cutting him out of presidential briefings due to the view that Mattis wasn't "ideologically aligned" with the administration, according to Foreign Policy. According to two anonymous West Wing sources, Bolton and Ricardel are "trying to build a sense that [Mattis] is done for." "They have their knives out," one official added. However, the campaign to oust Mattis has been met with resistance by lawmakers and some inside the administration, who believe Mattis is one of the few members of Trump's cabinet who enjoys genuine bipartisan respect and support. Bolton has successfully managed to cut down on the number of National Security Council meetings, ensuring that he is the closest to Trump on issues involving national security - where Bolton is known for his fervent interventionism and continued support of the Iraq war. Though one source aligned with Bolton said the idea that the NSC isn't meeting regularly enough is "100% Mattis spin." One Trump administration official noted, "Mira and Bolton are the only ones who benefit if Secretary Mattis leaves." The secretary is "highly regarded" within the cabinet and by lawmakers on both sides of the aisle, the official said.The question of Mattis’s departure is closely watched in Washington, in part because he’s viewed as an experienced professional with a steady hand in an administration often plagued by turmoil. In countries that have had disputes with the Trump administration - on Iran or NATO, for example - knowing that Mattis has a voice in decision-making has been reassuring.The former official said the irregularity of National Security Council meetings—in which the president gets assessments and opinions from an array of officials, including the defense secretary—is a point of frustration for the Pentagon.
Another US provocation against China: Two warships sail through Taiwan Strait - In another provocative move, the US sent two warships on Monday through the narrow Taiwan Strait between the Chinese mainland and the island of Taiwan. The naval operation—the second such passage this year—follows an inflammatory speech by US Vice-president Mike Pence earlier this month criticising China on all fronts. It also comes as the Trump administration has pulled out of the Intermediate-Range Nuclear Forces Treaty enabling the US to develop mid-range nuclear missiles to counter China as well as Russia.A bland statement issued by US naval spokesman Nate Christiansen declared that the USS Curtis Wilbur, a guided missile destroyer, and the USS Antietam, a guided missile cruiser, made a “routine” transit through the Taiwan Strait “in accordance with international law.” He said that the operation was to demonstrate “the US commitment to a free and open Indo-Pacific.”While the US navy might be operating in strict accordance with international law, the sailing of two warships close to the Chinese mainland is calculated to further raise tensions with China and make a show of US support for Taiwan. If Chinese military vessels or aircraft appeared in international waters close to the American coastline, the US media would be filled with denunciations of a “Chinese provocation”. The Taiwan Strait is just 130 to 220 kilometres wide.The Chinese government is yet to make any official statement, but is likely to criticise the US operation as it did after two American warships transited the Taiwan Strait in July. The foreign ministry “expressed concerns” to the US and urged Washington to “at once scrupulously abide by the One China principle” and “avoid harming China-US relations and peace and stability in the Taiwan Strait.”In reality, the Trump administration has systematically heightened tensions over Taiwan as part of its increasingly aggressive confrontation with China over trade, the South China Sea and unsubstantiated claims that China is interfering in American politics. Even before formally assuming office, Trump suggested last year that continuing US adherence to the One China principle was dependent on concessions by China on trade and economic issues.
Why today’s troops fear a new war is coming soon Nearly half of all current military troops believe the United States will be drawn into a major war soon, a jarring rise in anxiety among service members worried about global instability in general and Russia and China in particular, according to a new Military Times poll of active-duty troops. About 46 percent of troops who responded to the anonymous survey of currently serving Military Times readers said they believe the U.S. will be drawn into a new war within the next year. That’s a jarring increase from only about 5 percent who said the same thing in a similar poll conducted in September 2017. Another 50 percent think the country will not end up in a major conflict during the next year. But that number is falling, down from more than two-thirds of those surveyed last fall who said a war was unlikely. The fears of war come as President Donald Trump in the last year has repeatedly emphasized improving military readiness in the face of growing threats from foreign adversaries, both loosely affiliated terrorist groups and traditional major power rivals. At the same time, top Pentagon officials have spoken publicly about the need to prepare for a conflict against a “near-peer" adversary. When asked about specific countries, troops said Russia and China were among their top concerns. The poll showed a big increase in the number of troops who identify those two countries as significant or major threats: About 71 percent of troops said Russia was a significant threat, up 18 points from last year’s survey. And 69 percent of troops said China poses a significant threat, up 24 points from last year.
Over 1,000 Women March on the Pentagon to Demand “No More War” -- Fed up with ongoing wars depleting innocent lives and the U.S. Treasury, more than a thousand women marched on the Pentagon on Sunday to declare their opposition to the continuing slaughter. (CN) — About 1,500 women and allied men marched on the Pentagon on Sunday to demand an end to perpetual war and the funding of education, health care and other social needs instead.Stopping U.S. military involvement in Syria and Yemen and closing U.S. military bases around the world were among the demands voiced by the protestors who set out from Pentagon City and marched to the seat of American military power along a one-mile route. With the Pentagon in the background, the protestors shouted slogans and waved signs calling for, “No More War.” Walter Teague, an activist, spoke of taking part in the mass protest of 35,000 people against the Vietnam War that converged on the Pentagon building on October 21, 1967. That was 51 years ago to the day of Sunday’s women’s march, which took place after five more decades of American wars. In 1967 one could walk right up to the Pentagon’s front door, unlike now when the building is fenced off on all sides, hundreds of yards from the public. And unlike militarized police in heavy armor on guard at mass demonstrations these days, those 1967 protestors were confronted by military police wearing only helmets and carrying a single M-16 rifle. (Though there were 6,000 armed troops inside the building.) The only police present on Sunday were those who escorted the protestors through the gates. Among the speakers on a stage set up in a Pentagon parking lot, with the five-sided war headquarters in the background, was Jill Stein, the 2016 Green Party candidate for president. Stein told the crowd: “There’s not a lot of democracy going on out there because they’ve got the new McCarthyism going … The era of censorship, of warmongering and of political suppression is back big time.” “Just because there’s radio silence out there doesn’t mean there isn’t a rebellion in full swing. You’ve got to go to the communities to see it. Do you know why our communities are crumbling? Because our tax dollars are going over there,” she said pointing to the Pentagon. Last tax day Americans paid an average $3,400 each “to keep that thing doing what it’s doing,” said Stein, gesturing to the building. “While we were digging deep for the Pentagon … $80 of the average taxpayer went to support social programs and $40” to support the Environmental Protection Agency. Photos by Emma Fiala:
China and Russia listen in on Trump’s personal phone calls: NYT -- U.S. spy agencies have determined that Russia and China are eavesdropping on President Trump's personal phone calls in order to gain information that they can use to influence American policy,according to a New York Times report. Although Trump's aides have repeatedly warned him that his three personal iPhones are not secure, the president refuses to give them up, the Times reported. He continues to use them to chat with friends and confidants. China has reportedly been keeping track of the people whom Trump speaks to the most, compiling them into a list of figures to target with pro-Chinese messaging. While Russia's efforts are reportedly less coordinated, they are listening in to conversations in order to seek insight into the Trump's thinking. Two of those people who Beijing has identified as frequent Trump contacts are Stephen Schwartzman and Steve Wynn, businessmen and friends whom Trump speaks with regularly, the Times reported. Chinese businessmen have reportedly been deployed to feed strategic messages to both men in the hopes that they will then report pro-Chinese arguments to the president. A spokeswoman for Schwartzman, who is a chief executive with asset management company Blackstone Group, said he "has been happy to serve as an intermediary on certain critical matters between the two countries at the request of both heads of state." A lawyer for Wynn, a former casino magnate, said he had no comment.None of Trump's three iPhones is completely secure. Two of them have been made more secure by the National Security Agency, but the third iPhone is no different than any other personal cellphone, the Times reported. Trump aides told the Times that they hope he does not share confidential information during those phone calls with friends, due to Chinese and Russian spies likely listening in. The president has reportedly refused to swap out his official phones every 30 days, as is typical, citing the inconvenience it causes, the Times reported.
China Responds To Report It Spies On Trump's Cell Phone- You Can Change To Huawei Phones - President Trump was quick to respond to The New York Times' story that China and Russia were eavesdropping on President Trump's calls because he is reportedly using unsecured iPhones. Dismissing the story as more "fake news", Trump tweeted that "The so-called experts on Trump over at the New York Times wrote a long and boring article on my cellphone usage that is so incorrect I do not have time here to correct it," confirming that:"I only use Government Phones, and have only one seldom used government cell phone. Story is soooo wrong!" The so-called experts on Trump over at the New York Times wrote a long and boring article on my cellphone usage that is so incorrect I do not have time here to correct it. I only use Government Phones, and have only one seldom used government cell phone. Story is soooo wrong!— Donald J. Trump (@realDonaldTrump) October 25, 2018Russia was quick to dismiss the story as "fake news"...“We already treat such publications with humor,” Kremlin spokesman Dmitry Peskov told reporters on a conference call, while not directly denying the report.But what is more interesting is that Beijing (amid increasing trade tensions and negative rhetoric) also took a shot at The New York Times 'fake news' story.While it is not a surprise that China would deny spying on Trump (even if they were), Bloomberg reports that Chinese Ministry of Foreign Affairs spokeswoman Hua Chunying’s comment earlier Thursday that: “...certain people in the U.S. are sparing no efforts to win the best screenplay award for the Oscars.”“This just provides more evidence of the New York Times creating fake news,”And in the ultimate come back, Hua left reporters with the following perfectly placed comment... “If there are concerns about Apple calls being listened-in on, then you can change to Huawei phones."
Putin Gloats Over America's Downfall Under Trump -- In his annual public address before the nation, Russian President Vladimir Putin proclaimed that America’s global influence has come to end — a development he attributed in large part to Trump’s presidency. Speaking about the position of the U.S. on the global stage, Putin celebrated the waning influence of what he described as America’s “monopoly” on power, saying it would give Russia the ability to exert more influence in the world. “Empires often think they can make some little mistakes. Because they’re so powerful,” Putin said, according to the Financial Times. ”But when the number of these mistakes keeps growing, it reaches a level they cannot sustain.” He admonished the U.S. for having a “sense of impunity,” saying, “This is the result of the monopoly from a unipolar world.” “Luckily this monopoly is disappearing,” he added. “It’s almost done.” And Russia’s time has come, he said, claiming that America’s downfall meant that Russia had an opportunity to establish itself as a major player on the global stage. As the Financial Times described, “Putin continually returned to the idea that US hegemony was the cause of many global ills — but that its twilight offered opportunities for Russia and its friends.” Putin also noted that since Trump took office, punitive actions in response to Russian aggression in Ukraine and Syria had lessened in severity and were no longer having the impact they once did. He hit back at media reports describing his relationship with Trump as poor, noting that Trump listens to what he says, and that he wants a better relationship with Russia.
NYTimes report shows how Twitter, McKinsey were complicit in helping Saudi Arabia silence critics - The Saudi Arabian government enlisted a Twitter army to silence its critics online. It groomed a Twitter employee in the United States to try to get him to spy on certain accounts. And an American-based consultancy company helped the government identify and target dissidents on Twitter who were later punished and silenced.The New York Times on Saturday detailed the efforts of the Saudi government and Crown Prince Mohammed bin Salman to quiet dissenters in the country and around the world. The report lands amid increased scrutiny on the Saudis and MBS over the disappearance and murder of dissident journalist Jamal Khashoggi, who went missing after entering the Saudi consulate in Istanbul on October 2.The report reveals the dangers for American tech companies, which have until recently single-mindedly focused on growth. Like Facebook, Twitter is beginning to see the downsides of a completely open platform — particularly when it intersects with authoritarian regimes.The Times report details how the Saudi government has been manipulating the power of Twitter According to the Times, Saudi operatives have “mobilized to harass critics on Twitter” to keep them from speaking out. They’ve employed a number of tactics, including swarming critics with memes, creating distractions from relevant conversations, and reporting content they don’t want seen to Twitter as “sensitive.” The government has created its Twitter army by paying young men about 10,000 Saudi riyals, or $3,000, a month to tweet.One of the most disturbing parts of the Times’ story is its account of how the Saudis identified and groomed a Twitter employee, Ali Alzabarah, to spy on accounts from within. He joined Twitter in 2013, during which time he obtained an engineering position that allowed him to access users’ phone numbers and IP addresses.
McKinsey Is ‘Horrified’ That Saudi Arabia Report May Have Been Misused - McKinsey & Co. said it’s “horrified” that a report it prepared to measure public perception of Saudi Arabia’s policies may have been used by the kingdom to silence dissidents.The consulting firm responded on Twitter to a New York Times articlethat detailed a report in which it identified several people driving conversations on Twitter. Those people were later arrested or had their social-media accounts shut down.In a nine-page report, the consulting firm said responses to the country’s economic policies received twice as much coverage on Twitter than in the country’s traditional news media, and that negative sentiment was more common than positive statements on social media. The document was a brief overview of social-media usage and meant for internal use, McKinsey said.The New York-based firm said it wasn’t working in tandem with the Saudi government, and that when it does work with governments, the company “has not and never would engage in any work that seeks to target individuals based on their views,” according to a statement released on Saturday night.“We are horrified by the possibility, however remote, that it could have been misused in any way,” the statement said. “At this point, we have seen no evidence to suggest that it was misused, but we are urgently investigating how and with whom the document was shared.”
Warren Asks McKinsey to Provide Information on Work for Saudis Senator Elizabeth Warren is urging McKinsey & Co. to be transparent about its relationship with Saudi Arabia and its consulting services that she said may have enabled the kingdom to crack down on dissent. “I am concerned that McKinsey’s report on public perception may have been weaponized by the Saudi government to crush criticism of the kingdom’s policies, regardless of McKinsey’s intended purpose for the information,” Warren, a Massachusetts Democrat, wrote in a letter to Kevin Sneader, a McKinsey global managing partner. The letter was sent in the wake of a New York Times article that said McKinsey had prepared a nine-page report in 2015 on reaction within the kingdom to government austerity measures, which included traffic on social media. Some people who were thought to be driving negative comments were later arrested or had their online accounts shut down, according to the Times article. Warren said that after the killing of Jamal Khashoggi, a Saudi journalist and critic of the Riyadh government, and apparent efforts to cover up the crime, “it is important for McKinsey to be transparent about its consulting services used by the Saudi government and how these services may have enabled the kingdom to limit dissent.” In her letter to Sneader, Warren laid out 13 questions she wanted answered. Those included explaining the rationale behind preparing the report, who had access to it, and which Saudi officials obtained the report. She also asked for details about McKinsey’s evaluation process for working with foreign governments. She also requested “a full and unredacted copy of this report,” communications related to it, and a list of all McKinsey contracts “with or for the benefit of the Saudi government or entities affiliated with the government.”
Inside the Saudis’ Washington influence machine: How the kingdom gained power through fierce lobbying and charm offensives - In March 2018, the Saudi ambassador to Washington summoned a cadre of high-priced Washington lobbyists to his embassy to grapple with a delicate, double-pronged challenge.Crown Prince Mohammed bin Salman was preparing for his first official visit to the United States, just four months after he consolidated power by ordering the detention of members of the royal family and business elite. At the same time, Congress was facing a vote on a bipartisan resolution seeking to end U.S. support for a Saudi bombing campaign in Yemen that has killed tens of thousands of civilians since 2015. During an afternoon meeting on March 12, Saudi Ambassador Khalid bin Salman sat at the head of a long table in an embassy conference room, flanked by a whiteboard detailing the prince’s itinerary. His assembled advisers included Norm Coleman, the former Minnesota senator; Marc S. Lampkin, a veteran Capitol Hill adviser who served on President Trump’s transition team; and Democratic strategist Alfred E. Mottur, according to people familiar with the gathering. Eight days after their meeting, the congressional resolution aimed at extracting the United States from what the United Nations labeled “the worst humanitarian crisis in the world” would be defeated — hours after Mohammed was warmly welcomed at the White House at the start of his nationwide tour. Those twin successes reflected the power of a sophisticated Saudi influence machine that has shaped policy and perceptions in Washington for decades, batting back critiques of the oil-rich kingdom by doling out millions to lobbyists, blue-chip law firms, prominent think tanks and large defense contractors. In 2017, Saudi payments to lobbyists and consultants in Washington more than tripled over the previous year, public filings show. The strength of the Saudi operation is now being tested amid a global condemnation of the killing of Washington Post contributing columnist Jamal Khashoggi earlier this month in the Saudi consulate in Istanbul — a death the kingdom belatedly acknowledged last week.
Why Jamal Khashoggi Was Killed - America has stumbled from position to position in the region, primarily because we’ve continued to make the same mistakes that we made in Anbar—we’re losing in the Middle East because we’re on the wrong side, a side that is represented by leaders like Mohammed bin Salman. Khashoggi knew this better than anyone. Last August, Khoshoggi authored a Washington Post article cataloguing these stumbles, and offering a solution. Khoshoggi wrote that America’s failure in the Middle East was the result of its failure to recognize the importance of the region’s Islamist parties—primarily the Muslim Brotherhood. “There can be no political reform and democracy in any Arab country without accepting that political Islam is a part of it,” he wrote. Khashoggi’s critique was both eloquent and controversial. It’s why he was murdered. “The United States’s aversion to the Muslim Brotherhood,” he wrote “. . . is the root of a predicament across the entire Arab world. The eradication of the Muslim Brotherhood is nothing less than an abolition of democracy and a guarantee that Arabs will continue living under authoritarian and corrupt regimes.” While eloquent, Khoshoggi’s views weren’t a surprise. He had made the same point to me back in 2005 (we were only acquaintances, though we found ourselves singing from the same songsheet), during a conference of Islamist organizations in Beirut, which included the senior leaders of the Brotherhood. America was fated to fail in the Middle East, Khoshoggi told me then, because it was “unable to distinguish real enemies from true friends.” More simply, since 9/11 (as he described it), the U.S. had failed to distinguish between Islamists who have constituencies and are political parties (like the Muslim Brotherhood), with those who have no constituencies and are networks—like al-Qaeda and, later, ISIS. Conversely, the leaders whom we then and continue to identify as secular reformers and our closest friends and allies (a list that includes General Abdul Fattah al-Sisi in Egypt and Crown Prince Mohammed bin Salman in Saudi Arabia) are neither. They are policemen.
Why is the media ignoring the most glaring questions about Jamal Khashoggi? -- To begin with, Obama-era CIA director John Brennan should know more than he makes out about Khashoggi’s links in high American places. As the Hudson Institute’s Lee Smith pointed out in a recent column, Khashoggi must have been important to the United States, ‘because even though he reportedly moved to the United States in 2017, he already had a green card.’ Indeed, as David Ignatius wrote in the Washington Post, ‘Friends helped Khashoggi obtain a visa that allowed him to stay in the United States as a permanent resident.’ What friends? Khashoggi’s green card materialised during John Brennan’s tenure as director of Obama’s CIA from 2013-2017.For those uninitiated with Brennan’s checkered past, he is most likely responsible for leaking to the media the unverified dossier that connected Donald Trump to Russia. He appeared to later cash in on those leaks by joining NBC News as a ‘senior national security and intelligence analyst.’ To say that he has his own bone saw to grind against Trump would be an understatement. Nevertheless, someone should ask Brennan and Ignatius how Khashoggi obtained a green card.There are more unexplored connections. Before becoming CIA director, Brennan was the agency’s station chief in Riyadh, Saudi Arabia from 1996 until 1999. That overlaps with Saudi Prince Turki bin Faisal’s long tenure as the head of the General Intelligence Directorate, a post he held from 1977 until about a week before September 11, 2001. It would be impossible to imagine that the two weren’t rather familiar with each other, given that the US-Saudi relationship is largely predicated on intelligence sharing. Prince Turki also happens to be on the wrong side of the House of Saud’s Game of Thrones-style succession contest. He is, however, the Saudi royal that Khashoggi was most connected to – enough that he was selected to be Turki’s adviser and media spokesman when he became ambassador to London and then Washington from 2003-2006.It’s clear that Prince Turki’s relationship with Khashoggi predates the attacks of 9/11. But how far back does the relationship stretch? Does it go back to May 1988, when Khashoggi was planted with Osama bin Laden in Afghanistan to write a couple of articles for the Saudi-owned Arab News? Khashoggi interviewed bin Laden, let’s not forget.
US ready to move on from Khashoggi case but will Turkey play along? - Donald Trump has vacillated in his response to Riyadh’s explanations, describing them as lies at one moment, credible the next. But he has been consistent in insisting a ban on arms sales is not on the table.It will now be tempting for Saudi Arabia’s allies – above all the US – to sweep Khashoggi’s body under the carpet, recognising that Saudi Arabia is an indispensable partner in the struggle against Iran, Washington’s primary chosen adversary in the Middle East.Nothing moves on quite like politics, and it is possible the US president, a master of distraction, will succeed in changing the political agenda before the midterms, leaving the Saudi relationship and the Crown Prince Mohammed bin Salman intact. Washington will continue to deal with the Saudi regime, but from a greater distance. The glowing orb that Trump touched in Riyadh will be put away for another day. That assumes other key actors are willing to play along with what the former head of MI6 Sir John Sawers has in effect described as a fictional explanation by the Saudis of what happened to Khashoggi. Few states believe the Saudi line that he died when an attempt to persuade him to return home went wrong. The issue is whether they pretend to do so.The key response lies with Turkey. The country’s president, Recep Tayyip Erdoğan, spoke to Bin Salman on Friday night to hear the results of the Saudi investigation and the planned response. Turkey’s own investigations are coming to a close and Erdoğan promised on Sunday to unveil the “naked truth” on Tuesday.Turkey may yet find Khashoggi’s dismembered body, and it may yet be able to prove – possibly via audio – that his death was no accident but a premeditated assassination, so discrediting even the revised explanations from Riyadh. It may reveal damaging details about the Saudi cover-up.It will be hard, however, to prove Bin Salman directly ordered Khashoggi’s killing. All the relevant agents have been arrested in Saudi Arabia and are hardly likely to be given their day in open court to explain that they were carrying out specific orders from the top. If Bin Salman is to be ousted or weakened, it will require demands from within the royal family, the Saudi business community and possibly the religious establishment. The crown prince’s appointment to oversee the reform and modernisation of Saudi’s intelligence department, announced on Friday night does not, however, suggest he has yet been weakened internally.
Lawmakers point fingers at Saudi crown prince in Khashoggi’s death - Lawmakers on both sides of the aisle expressed increasing confidence on Sunday that Saudi Crown Prince Mohammed bin Salman is culpable in the death of journalist Jamal Khashoggi, even as the president defended the young leader."If he's gone forth and murdered this journalist, he's now crossed the line. And there has to be a punishment and a price paid for that," Sen Bob Corker (R-Tenn.) said on CNN’s "State of the Union.""I'm not rushing to judgment," he added. "Do I think he did it? Yes, I think he did it."Corker, the chairman of the Senate Foreign Relations Committee, was one of four prominent senators who indicated on Sunday shows that they believe the 33-year-old crown prince ordered Khashoggi’s killing. "I feel certain that the crown prince was involved and that he directed this," Sen. Rand Paul (R-Ky.) said on "Fox News Sunday.""The crown prince has his fingerprints all over this," Sen. Dick Durbin (D-Ill.) said on NBC’s "Meet the Press.""It looks like it based on the people who were involved in the actual act," Sen. Thom Tillis (R-N.C.) said on NBC when asked if the crown prince ordered the killing. While the crown prince and his father, King Salman, initially denied knowing what happened to the journalist and outspoken critic of Saudi leadership, the kingdom announced on Friday that Khashoggi died in a physical altercation gone awry, and that it had detained 18 people in connection with the incident.
Mnuchin Heads to Saudi Arabia to Bolster Iran Policy as Uproar Grows Over Journalist Death – video —The Trump administration, under pressure to sanction Saudi Arabia over the killing of journalist Jamal Khashoggi, is seeking ways to maintain the two countries’ strategic alliance. An array of lawmakers from both parties urged sanctions on the kingdom as Treasury Secretary Steven Mnuchin prepared to visit Saudi Arabia on Monday. Mr. Mnuchin told a small group of reporters that the administration’s relationship with Riyadh was critical to the U.S. campaign to counter Iran’s bid to become the region’s dominant power.
Mnuchin meets with Saudi crown prince amid Khashoggi crisis - Treasury Secretary Steve Mnuchin on Monday met with Saudi Crown Prince Mohammed bin Salman in Saudi Arabia amid an ongoing international crisis over the death of U.S.-based journalist Jamal Khashoggi. The Saudi Foreign Ministry tweeted a photo of the two men with a caption touting "the importance of Saudi-US strategic partnership." Mnuchin's spokesman Tony Sayegh in a statement to The Washington Post confirmed the meeting. He said the two men discussed the Saudi investigation into Khashoggi's killing, sanctions against regional power Iran, and combating terrorism financing. The Treasury Department did not immediately respond to The Hill's requests for comment. Mnuchin was scheduled to meet with Middle Eastern leaders in Riyadh to discuss terror financing, but it was not previously reported that he would be meeting with the crown prince. The Treasury secretary on Monday said Saudi Arabia's initial explanation of Khashoggi's death was "a good first step but not enough." He said it is too soon to discuss sanctions against the kingdom over the incident, Reuters reported. Mnuchin pulled out of a Saudi investment conference happening this week but agreed to visit Saudi Arabia for the terrorism finance meeting as part of a trip to the Middle East.
CIA chief to Turkey as officials seek to clarify prince's role in Khashoggi’s death - (Reuters) - CIA Director Gina Haspel was traveling to Turkey on Monday to help investigate the death of Saudi journalist Jamal Khashoggi, two sources familiar with the matter said, as security agencies examined what role Saudi Crown Prince Mohammed bin Salman may have played in the case. Khashoggi, who was living in Washington, disappeared after entering the Saudi consulate in Istanbul on Oct. 2 to get documents for his forthcoming marriage. Earlier on Monday, U.S. President Donald Trump said he was still not satisfied with what he had heard from Saudi Arabia about the killing. Saudi Arabia said on Saturday that Khashoggi, 59, was killed in a fight in the consulate. A Saudi official later told Reuters that 15 Saudi nationals sent to Turkey to confront Khashoggi had threatened him with being drugged and kidnapped and then killed him in a chokehold when he resisted. The Khashoggi case has caused international outrage and frayed political and business ties between Western powers and U.S. ally Saudi Arabia, the world’s No.1 oil exporter. Three weeks after Khashoggi disappeared, U.S. and European security agencies still have an incomplete picture of what happened at the consulate. Six U.S. and Western officials said on Monday they believed the crown prince, who is Saudi Arabia’s de facto ruler, was ultimately responsible for Khashoggi’s disappearance because of his role overseeing the Saudi security apparatus but that they lacked hard proof. Turkish officials suspect Khashoggi, a Washington Post columnist, was killed inside the consulate on Oct. 2 by a team of Saudi agents and his body cut up. The Western security officials, speaking on condition of anonymity, said they were far from having a complete picture of what happened to Khashoggi. They do not know how he died and where his body was taken. Despite extensive news leaks alleging that Turkey has audio recordings documenting Khashoggi’s torture and murder, neither U.S. nor allied government agencies had been granted access as of Monday to such evidence, the officials said.
Trump ‘not satisfied’ after talk with Saudi leader MBS - President Trump on Monday said he is dissatisfied with Saudi Arabia's explanation for the death of dissident journalist Jamal Khashoggi, even after speaking to Crown Prince Mohammed bin Salman.Trump said he has talked with Prince Mohammed since Khashoggi's death, but urged the kingdom to be more forthcoming about how the journalist was killed."I’m not satisfied with what I’ve heard," Trump told reporters at the White House before leaving for a campaign rally in Texas. Trump also indicated he would not accept the kingdom's request to have one month to complete its full investigation into the killing."I think that's a long time," the president said. "There's no reason for that much."Trump vowed he would "get to the bottom of" Khashoggi's death and said he would know more on Tuesday after "top intelligence people" in Turkey return to the U.S. But he also stressed his reluctance to cancel or suspend arms sales to Saudi Arabia, claiming without evidence that losing Saudi investments in the U.S. could cost 1 million jobs."I don't want to lose all of that investment that's being made in our country. I don't want to lose a million jobs," Trump said. Trump is seeking to fend off criticism of his response to the death of Khashoggi, who was killed inside the Saudi consulate in Istanbul on Oct. 2.The Saudi government said last Friday that Khashoggi, a critic of the Saudi royal family who was living in Virginia, died during a physical altercation with officials who sought to bring him back to the kingdom. The government said the officials were not officially approved.The S audi explanation was immediately rejected by many world leaders and members of Congress, but Trump said last Friday he found the Saudi's initial investigation to be credible.
The Saudis Keep Changing Their Story On Khashoggi. What Should We Do? - Ron Paul - The Saudi version of the disappearance and murder of journalist Jamal Khashoggi seems to change every day or so. The latest is the Saudi government claim that the opposition journalist was killed in a “botched interrogation” at the Saudi consulate in Istanbul. Or was it a fist-fight? What is laughable is that the Saudi king has placed Crown Prince Mohammad bin Salman, a prime suspect, in charge of the investigation of Khashoggi’s murder! Though the official story keeps changing, what is unlikely to change is Washington’s continued relationship with Saudi Arabia. It is a partnership that is in no way beneficial to Americans or the US national interest. President Trump has promised “severe punishment” if the Saudi government is found to have been involved in Khashoggi’s murder, but he also took off the table any reduction in arms sales to prop up the murderous Saudi war on Yemen. It’s all about jobs, said President Trump. So the Saudi killing of thousands in Yemen can go on. Some murders are more important than others, obviously. The killing of Khashoggi puts the Trump Administration is in a difficult situation. President Trump views Iran as designated enemy number one. Next month the US Administration intends to impose a new round of sanctions designed to make it impossible for Iran to sell its oil on the international market. To keep US fuel prices from spiking over this move Trump is relying on other countries, especially Saudi Arabia, to pump more and make up the difference. But the Saudis have threatened $400 a barrel oil if President Trump follows through with his promise of “severe punishment” over the killing of Khashoggi. The Saudis have also threatened to look for friendship in Moscow or even Tehran if Washington insists on “punishing” the regime in Riyadh. For a super-power, the US doesn’t seem to have many options. What this whole mess reveals is just how wise our Founding Fathers were to warn us against entangling alliances. For too many decades the US has been in an unhealthy relationship with the Saudi kingdom, providing the Saudis with a US security guarantee in exchange for “cheap” oil and the laundering of oil profits through the US military-industrial complex by the purchase of billions of dollars in weapons. This entangling relationship with Saudi Arabia should end. It is unfortunate that the tens of thousands of civilians dead from Yemen to Syria due to Saudi aggression don’t matter as much as the murder of one establishment journalist like Khashoggi, but as one Clinton flack once said, we should not let this current crisis go to waste. This is not about demanding that the Saudis change their ways, reform their society on the lines of a liberal democracy, or allow more women to drive. The problem with our relationship with Saudi Arabia is not about Saudi Arabia. It is about us. The United States should not be in the business of selling security guarantees overseas to the highest bidder.
Why You Should Be Skeptical of the Khashoggi Narrative - Caitlin Johnstone — The Trump administration has ended its weeks-long silence on the disappearance of the Saudi Arabian Washington Post journalist Jamal Khashoggi. Following a briefing from Secretary of State Pompeo who has just returned from a visit to Riyadh and Ankara, the president has said that contrary to some hopeful speculation that had emerged early on after his disappearance, Khashoggi does indeed appear to have been killed at the Saudi consulate in Istanbul. If it is determined that the Saudis were responsible, Trump warned that there will be “very severe” consequences. Secretary of the Treasury Steve Mnuchin has announced that he will not be attending the Future Investment Initiative summit in Riyadh next week. I’ve been following this story with some interest, but I haven’t been writing about it until now. This is one of those rare stories that has drawn the focus of both mainstream and alternative media, the latter because it’s seen as an opportunity to criticize the west’s extremely immoral involvement in the depraved activities of a murderous theocracy, and because it’s an opportunity to attack the hypocrisy of the establishment in decrying the murder of a single man while ignoring Saudi Arabia’s far more unconscionable behavior like its war crimes in Yemen and facilitation of bloodshed in Syria. Killing one man is very, very far from the top of the list of the most horrific things Saudi Arabia has done; criticizing them for that is like criticizing Henry Kissinger for not tipping well at restaurants. The dominant anti-establishment criticism of the mainstream coverage of this story has been that they’re only upset at the Saudi royals now because their bloodshed finally touched a member of the political/media class, who are meant to be untouchable. And hey, that could be it, who knows. It is possible that all that we are looking at is the Saudi monarchy killing and killing with impunity until it killed someone the pundits and politicians are likely to meet at a cocktail party, and that’s the sole reason for the extensive coverage this story has been receiving about a government whose crimes are normally ignored. I remain very skeptical that that is the whole truth, however.
Only 4% Of Americans Consider Saudi Arabia An Ally - Saudi Arabia is still at the center of an international storm of condemnation following the now confirmed murder of journalist Jamal Khashoggi. Even though President Trump has continued to defend the Washington's most important Arab partner, a new YouGov poll has found that only 4 percent of the U.S. public consider Saudi Arabia an ally.. As Statista's Niall McCarthy notes, views are similarly grim along party lines with 3 percent of Democrats and 5 percent of Republicans considering the Saudis an ally.When it comes to whether Saudi Arabia is friendly to the U.S., the share agreeing rises to 23 percent. Despite the fact that the U.S. government has sold billions of dollars of sophisticated weaponry to Saudi Arabia, 27 percent of the U.S. public consider Riyadh unfriendly while 15 percent would go as far as saying the Saudis are America's enemy. Of course, the less politically-palatable title for this post is "96% Of Americans Know Saudis Did 9/11 And Got Away With It"
Jamal Khashoggi investigation: CIA director Gina Haspel heard alleged recording of Saudi journalist's killing - CIA director Gina Hapsel has heard the purported audio that Turkey alleges is of Jamal Khashoggi's killing, two sources have told CBS News. Haspel, who visited Turkey earlier this week, was set to brief President Trump about what she learned in her investigation into the Saudi journalist's death. Turkish officials have leaked details of an alleged recording of Khashoggi that apparently proves he was murdered and dismembered. Up until now, both U.S. officials and Turkish officials have said the alleged recording had not been shared by Turkey. The existence of such a recording has not yet proven. Khashoggi, a frequent critic of the Saudi government and Crown Prince Mohammed bin Salman, disappeared on Oct. 2 after going into the Saudi consulate in Istanbul. After weeks of claiming Khashoggi had walked out of consulate, the Saudi government said on Oct. 19 that Khashoggi was dead after a "fist fight" at the consulate and 18 people had been detained.The international community largely rejected the initial Saudi explanation into Khashoggi's death. And less than a week after the initial report of his death, Saudi prosecutors said Thursday that an investigation found that Khashoggi's death was planned. The U.S. State Department has already announced that it will revoke visas of 21 Saudis suspected to be connected to Khashoggi's death. Turkish President Recep Tayyip Erdogan said on Monday that he would reveal to the world the "naked truth" about what happened in the Saudi consulate, but addressing lawmakers in the Turkish parliament on Tuesday, the Turkish leader added little more than rhetoric to the scandal, accusing the Saudi government of a "savage," premeditated "political murder," but offering no solid evidence to back the claim. He did not mention any audio or video evidence in the case.
CIA director briefs Trump on Khashoggi torture tape --Gina Haspel, the director of the US Central Intelligence Agency (CIA), briefed President Donald Trump Thursday on her trip to Ankara, Turkey, this week in which she met with her counterparts at the Turkish National Intelligence Organization (MIT) and other senior officials to review evidence related to the savage murder of journalist and former Saudi insider Jamal Khashoggi at Saudi Arabia’s consulate in Istanbul on October 2. According to the pro-government Turkish newspaper Sabah, the evidence presented to Haspel included both audio and video tapes (apparently obtained through the bugging of the consulate by Turkish intelligence) of the torture and murder of Khashoggi and the subsequent dismemberment of his body. Haspel’s findings appear to have had no immediate effect on US policy toward Saudi Arabia, with the Trump administration thus far responding to the assassination of Khashoggi, a US resident who was employed by the Washington Post as a columnist, with only visa revocations for 21 Saudi citizens, all of them either charged by the Saudi monarchy in connection with the killing or fired from their posts. The Saudi regime, meanwhile, has once again shifted its account of Khashoggi’s death in its Istanbul consulate, which for 17 days it had denied ever happening. After claiming that he was killed in a “fist fight” with the 15-member death squad dispatched from Riyadh and then suggesting he was killed in a “chokehold” as part of a kidnapping attempt gone wrong, the country’s attorney general issued a statement Thursday acknowledging that the murder was premeditated. “The public prosecution received information from the Turkish side through the Joint Working Group between the Kingdom of Saudi Arabia and the Turkish Republic, indicating that the suspects in Khashoggi’s case premeditated their crime,” Attorney General Shaikh Suood bin Abdullah Al Mo’jab said in a statement posted on the state Saudi news agency’s website. Whether the latest change in the official Saudi account came in response to Haspel’s trip to Turkey and viewing of the evidence is not clear. The claims of some kind of accidental death, however, had become increasingly untenable under the steady flow of leaks from Turkish authorities exposing grisly details of Khashoggi’s death. Among the latest revelations was that his killers severed his fingers while he was still alive, reportedly to take back to Saudi Arabia’s de facto ruler Crown Prince Mohammed bin Salman as evidence of the mission’s success. Bin Salman had reportedly vowed to cut off the fingers of any Saudi writers criticizing his regime.
US Announces Punishment for Saudi Officials Tied to Khashoggi’s Murder —The United States has announced plans to penalise 21 Saudi officials it says are responsible for the killing of journalist Jamal Khashoggi.While the US State Department did not specify on Tuesday which Saudi citizens would be affected by the punitive measures, it said the individuals will have their US visas revoked or be made ineligible to enter the US.“These penalties will not be the last word on the matter from the United States,” US Secretary of State Mike Pompeo told reporters.“We’re making very clear that the United States does not tolerate this kind of ruthless action to silence Mr Khashoggi, a journalist, through violence.”The vast majority of the 21 individuals affected already have US visas, State Department Spokesperson Heather Nauert said.US President Donald Trump said to reporters on Tuesday: “There should have never been an execution or a cover-up because it should have never happened.“It was a total fiasco,” Trump added.Saudi officials have changed their story repeatedly since Khashoggi disappeared.For more than two weeks, the Saudis insisted that the journalist left the building minutes after he arrived. However, on Friday, Saudi officials said Khashoggi was killed after a fight broke out inside the consulate.Critics of Saudi Arabia have said they believe the Gulf kingdom is seeking to shield the crown prince from having to take any responsibility for Khashoggi’s death.Over the weekend, Saudi state media reported that King Salman had sacked Saud al-Qahtani, a former top aide to MBS, and four other officials over the killing.And while a Saudi official told Reuters this week that MBS had no knowledge of the operation that led to Khashoggi’s death and “certainly did not order a kidnapping or murder of anybody”, that has left many unconvinced. World leaders and human rights groups have criticised the latest Saudi version of events, saying their explanation lacks any credibility, as calls for an independent probe into what happened have grown louder. Also on Tuesday, US Vice President Mike Pence said CIA Director Gina Haskell has been sent to Turkey to meet with investigators probing Khashoggi’s murder. He said Haskell will return to the US to brief the president, himself and members of the US administration on what the Turkish investigation has turned up. Last week, a Turkish source who listened in full to the audio recording told Middle East Eye that Khashoggi was killed in seven minutes and his body was dismembered inside the consulate. Two weeks ago, US senators invoked a human rights law to call on Trump to formally investigate the Khashoggi case and possibly determine appropriate sanctions against those involved. Pompeo on Tuesday said he will work with the US Treasury Department to review the applicability of the sanctions triggered by the Magnitsky Law on those Saudi individuals that the US deems played a role in Khashoggi’s death.
Trump Defers to Congress on U.S. Response to Khashoggi Killing - President Donald Trump said he is passing responsibility to Congress for responding to the killing of Jamal Khashoggi at a Saudi consulate in Istanbul, and he criticized the conflicting accounts from Saudi Arabia afterward as “one of the worst” cover-ups in history. Donald Trump on Oct. 23.Photographer: Ron Sachs/Pool via Bloomberg “In terms of what we ultimately do I’m going to leave it very much -- in conjunction with me -- up to Congress,” Trump told reporters Tuesday in the Oval Office. He added that he wants to receive a bipartisan recommendation on penalties. Secretary of State Michael Pompeo later said the U.S. is moving against individuals it suspects were involved in the killing, without identifying their names or nationalities. The U.S. is revoking or blocking visas for 21 suspects in the incident, according to State Department spokeswoman Heather Nauert. Pompeo said the U.S. is also reviewing the possibility of sanctions against those people. “These penalties will not be the last word,” Pompeo told reporters at the State Department Tuesday. “We’ve learned a lot over the past few days” and hope to learn a great deal more over next 2-3 days, Pompeo added. The crisis over the Khashoggi killing continued for a third week as Turkish President Recep Tayyip Erdogan laid out his case Tuesday for why he believes Khashoggi’s death was premeditated and not the result of an interrogation or interview gone awry. The same day, Crown Prince Mohammed bin Salman showed up at a global investment summit in Riyadh that has seen its luster diminished as details of the killing -- and Saudi responsibility -- prompted a number of high profile leaders to skip the gathering. Trump on Tuesday offered some additional criticism of the Oct. 2 killing and Saudi Arabia’s response to it, saying that it was “a very bad original concept.” “It was carried out poorly,” Trump added. “And the cover-up was one of the worst in the history of cover-ups.” Trump said of the attack on the journalist that “whoever thought of that idea, I think, is in big trouble.” And in an interview with the Wall Street Journal published on Tuesday evening, the president, asked about Prince Mohammed’s possible involvement in the killing, said, "he’s running things and so if anybody were going to be, it would be him." Trump also told the newspaper that he didn’t think the Saudi ruler, King Salman, knew that Khashoggi was a target.
Donald Trump’s actions in the Middle East will damage his position far more than the Russia probe ever could - Cockburn - The Middle East has a century old tradition of being the political graveyard of American and British political leaders. Will the same thing happen to Donald Trump as he struggles with the consequences of the alleged murder of Jamal Khashoggi? I always suspected that Trump might come unstuck because of his exaggerated reliance on a weak state like Saudi Arabia rather than because of his supposed links to Russia and Vladimir Putin. Contrary to the PR company boosterism of Crown Prince Mohammed bin Salman (MBS) and his ambitious projects, Saudi Arabia has oil and money, but is demonstrably ineffective as an independent operator. The Middle East disasters that toppled so many Western leaders have a certain amount in common. In all cases, the strength of enemies and the feebleness of friends was miscalculated. The political debacle most similar to Trump’s ill-judged reliance on the Crown Prince and Saudi Arabia over the last three years was American policy towards the Shah and Iran in the years leading up to his overthrow in 1979. US humiliation was rubbed in when its diplomats were taken hostages in Tehran which torpedoed Carter’s hope of a second term in the White House. Vulgar display was a feature of the Shah’s Iran 40 years ago as it is of Saudi Arabia today. In his case, there was the celebration of 2,500 years of the Persian Empire at Persepolis in 1971, which fed the ruling elites of the world with exotic delicacies such as 50 roast peacocks with tail feathers restored and stuffed with foie gras along quail eggs filled with caviar, The Saudi equivalent to Persepolis is the much-publicised “Davos in the Desert” or, more prosaically, the “Future Investment Initiative” being held this week in Riyadh and from which politicians and businessmen have been very publicly dropping out as mystery over the disappearance of Khashoggi has deepened. Much of the media is treating their decision to stay at home as some sort of moral choice and never asks why these luminaries were happy to act as cheerleaders for Saudi Arabia in the same time the UN was warning that 13 million Yemenis are on the verge of starvation because of the Saudi-led military intervention. It is no excuse for the Trump administration or the defecting guests in Riyadh to claim that they did not know about Saudi Arabia’s potential for random violence. As long ago as 2 December 2015, the German federal intelligence agency, the BND, published a memo predicting that “the current cautious diplomatic stance of senior members of the Saudi royal family will be replaced by an impulsive intervention policy.” It went on to say that the concentration of so much power in the hands of Prince Mohammed bin Salman “harbours a latent risk that …he may overreach.”
Trump’s Record of Failure in the Middle East Ten months ago, I responded to the claim that Trump’s foreign policy in the Middle East had been “moderately successful” and argued that it was just the opposite: When we judge these policies all together, they don’t add up to being “moderately successful.” On the contrary, these policies are almost all failed, costly, and unwise, and in many cases Trump has inherited bad situations and made them worse. Since I wrote that, the Trump administration has reneged on the JCPOA, reimposed sanctions on Iran without justification, supported the dangerous Hodeidah offensive in Yemen, committed fully to an open-ended mission in Syria that risks war with Iran, indulged the Israeli government as it gunned down unarmed protesters week after week, relocated the U.S. embassy to Jerusalem, starved Palestinian civilians of essential aid, and most recently joined in an effort to cover for the Saudi government’s murder of a prominent critic. That is not an exhaustive list of their destructive behavior, but it gives us a picture of how much worse things have become in the last ten months. In this same period of time, conditions in Yemen have deteriorated significantly. More than 8 million people were on the verge of starvation then, and now the U.N. is warning that as many as 13 million innocent Yemenis could die from hunger. The U.S.-backed bombing campaign has also contributed to the worsening conditions. There were multiple high-profile massacres committed by Saudi coalition forces over the summer, including the Aug. 9 school bus massacre. The administration has promoted the fiction that U.S. military assistance reduces the number of civilian casualties in Yemen, but in the last few months both the number of casualties and the frequency of attacks on civilian targets have increased. The Yemen Data Project’s latest report shows the increase in attacks on non-military targets in the month of September: Almost half of all coalition air raids in Yemen in Sept hit civilian targets, nearly three times the number that targeted military sites. Of the 154 air raids where the target could be identified over 70% targeted non-military sites https://t.co/WI99aaE2FP pic.twitter.com/kvsbALglwd There is obviously no improvement in Saudi coalition targeting, and there isn’t going to be any. U.S. support for the war does not make the Saudi coalition less likely to kill civilians because they intentionally make a regular habit of attacking civilian targets. The Trump administration’s determination to keep U.S. support for the coalition flowing despite ample evidence of deliberate attacks on civilians ensures that more Yemeni civilians will die. That is the cost of the administration’s lies to Congress about Yemen.
Blaming Saudis for Corrupting Otherwise Human Rights–Loving US As FAIR has noted for years, one of the primary ideological functions of US corporate media is to maintain the mythology that the US is a noble protector of democracy and arbiter of human rights. When material facts—like wars of aggression, massive spying regimes, the funding and arming right-wing militias and the propping up of dictators—get in the way of this mythology the response by most pundits is to wave away these inconsistencies (FAIR.org, 2/1/09), ignore them altogether (FAIR.org, 8/31/18) or spin them as Things That Are Actually Good (FAIR.org, 5/31/18). As more information about Washington Post columnist Jamal Khashoggi’s brazen murder at the hands of the Saudi government comes to light, some in the US press are positioning Saudi Arabia as having “corrupted” Washington—as Khashoggi’s own editor lamented on Twitter last week. The Saudis have “corrupted,” “played” or “captured” an otherwise benevolent, values-based US government. It's important to note that it’s not a product of a foreign boogeyman, but core to the US imperial project. Historically, the US hasn’t embraced despotic regimes despite their oppressive nature, but precisely because of it. In a report on why Khashoggi’s killing was unlikely to fundamentally alter the US/Saudi relationship, NBC News (10/17/18) casually threw out this highly contestable claim:Adam Coogle, a Middle East researcher with Human Rights Watch, said the longstanding economic and security ties with Saudi Arabia have forced the US to tolerate a lot of questionable Saudi behavior. Due to “economic and security ties” somehow outside of its control, the most powerful country in the history of the world is “forced” to “tolerate” what’s called “questionable” behavior—a phrase that sweeps together the wholesale destruction of Yemen, the beheading of dissidents, the disappearing of women drivers and the brutal murder of Khashoggi. (In the case of Yemen, to “tolerate” means, among many other forms of active support, providing targeting instructions for a vicious airstrike campaign.)
Saudi foreign agents’ political donations top $1.6 million in 2018 elections - Political donations made by foreign agents hired to act on behalf of Saudi Arabian interests have exceeded $1.6 million in the 2018 election cycle, according to a new analysis by the Center for Responsive Politics.Of the money flowing into U.S. elections from lobbyists, political operatives, firms and other foreign agents who have disclosed contracts to represent the political interests of Saudi Arabia in the United States, political donations from operatives working for Saudi interests exceed half a million in 2018 elections while PACs affiliated with lobbying and public relations firms account for an additional $1.1 million this election cycle.The total amount of political donations made by Saudi foreign agents is a conservative estimate by CRP based on reported political contributions by individuals and firms registered as foreign agents of Saudi Arabia, excluding individual lobbyist or operative contributions to their firm’s affiliated PAC to ensure no funds are double-counted — meaning the total flow of money to politicians from lobbyists, firms and political operatives representing Saudi interests is likely much larger.For example, this estimate does not include donations to House Armed Services Committee members from leftover funds in the campaign committee of former Congressman Howard “Buck” McKeon while he was working as registered foreign agent of Saudi Arabia and lobbying for defense contractors with major interest in legislation related to arms deals under the committee’s purview. McKeon and his lobbying firm, the McKeon Group, signed on to represent the Saudi government’s political interests shortly after he left Congress, where he was the Republican chairman of the House Armed Services Committee. During his time on the Hill, McKeon himself was a top recipient of defense contractor funds as well. Saudi interests have spent more than $24 million to influence U.S. policy and public opinion during the 2018 election cycle, according to disclosures to the Department of Justice made in compliance with the Foreign Agents Registration Act (FARA) and made available through CRP’s Foreign Lobby Watch tool. Around $18 million of that was paid to foreign agents acting on behalf of Saudi interests in 2017 and another $6 million in spending has already been reported this year, making Saudi Arabia one of the top 10 countries spending on influence and lobbying in the United States.
MSNBC and Daily Beast Feature UAE Lobbyist David Rothkopf With No Disclosure: a Scandalous Media-Wide Practice – Greenwald - On Thursday, the Daily Beast published an article about the Saudi/US relationship by David Rothkopf, a long-time member in good standing of the U.S. Foreign Policy elite. Until last year, he was the editor-in-chief of the establishment journal Foreign Policy, named to that position in 2012 when it was owned by the Washington Post. He’s also a visiting scholar at the Carnegie Endowment for International Peace and a visiting professor at the Columbia University School of International and Public Affairs. He was previously deputy undersecretary of commerce for international trade policy in the Clinton administration and managing director of Kissinger Associates, the advisory firm founded by former U.S. Secretary of State Henry A. Kissinger.But, unbeknownst to Daily Beast readers consuming his commentary about Saudi Arabia, Rothkopf is something else: a paid lobbyist for the Saudi regime’s close ally, the equally despotic regime of the United Arab Emirates. Last month, Rothkopf formally registered as a foreign agent for the Emiratis. On September 12, Rothkopf personally signed a contract with the UAE regime to be paid $50,000 every month, for a period of three years, to, among other services, “provide day-to-day advice on the development of messages”; to work on “media projects [and] outreach efforts”; and to “prepare memoranda [and] talking points” for the “Embassy of the United Arab Emirates to develop and support specific programs and initiatives within the United States.” Rothkopf has the audacity to criticize Trump for having “repeatedly shown great fondness for foreign leaders—even despots and known murderers, human rights abusers and criminals”, while Rothkopf himself is literally a paid agent working to disseminate propaganda for one of the most repressive regimes on the planet, one that does much of the Saudis’ dirty work for it in Washington. And the fact that the Daily Beast makes no disclosure of any of this is what makes this practice – having paid lobbyists and consultants for foreign regimes and corporations masquerade as objective and neutral analysts of the news – such a massive journalistic scandal and fraud. As the Intercept has extensively reported by obtaining his emails, the UAE ambassador who agreed to pay Rothkopf, Yousef al-Otaiba, is one of the most sinister influence-peddlers in Washington. If Daily Beast readers had been told who Rothkopf really is and how he makes large amounts of money, they would have known that he’s one of the least credible people on the planet to sanctimoniously denounce those who harbor “great fondness for foreign leaders—even despots and known murderers, human rights abusers and criminals.”
Iran's Rouhani- 'Saudi Wouldn't Have Killed Khashoggi Without US Approval' - With roughly one week left before the US reimposes sanctions on Iranian exports that could hamper Iranian crude-oil exports, Hassan Rouhani, the president of the Islamic Republic, accused the US of officially sanctioning the murder of Saudi journalist-turned-critic Jamal Khashoggi, arguing that no country would carry out such a heinous crime "without the protection of America." While the US probably won't bother to dignify Rouhani's allegations with a response, reports that US intelligence agencies had intercepted communications about the plot to ambush Khashoggi suggest that the US had an idea that Khashoggi might be killed upon returning to the consulate. And knowing this, they did nothing to warn Khashoggi or the Saudis, despite Khashoggi's status as a US resident writing for a prominent national newspaper. According to Reuters, which cited a transcript from the official Iranian news agency, Rouhani said that such a brutal killing taking place at a foreign consulate was almost "unthinkable"."No one would imagine that in today’s world and a new century that we would witness such an organized murder and a system would plan out such a heinous murder," Rouhani said, according to IRNA."I don’t think that a country would dare commit such a crime without the protection of America."And as Rouhani pointed out, US protection has allowed KSA to continue its brutal bombing campaign in Yemen, while Crown Prince Mohammad bin Salman has engaged in an authoritarian crackdown on domestic dissent."If there was no American protection, would the people of Yemen still have faced the same brutal bombing?" Rouhani said. On a separate note, Rouhani declared that Iran would "defeat" US sanctions on Iranian exports.
US Is Negotiating With SWIFT To Disconnect Iran From Network -- Treasury Secretary Steven Mnuchin said that unlike Obama's 2013 Iran blockade, it would be harder for countries to get waivers on Iran oil sanctions as the US is already working on disconnecting Iran from the SWIFT network and dismissed concerns that oil prices could rise, saying the market had already factored in the output losses. Speaking in an interview with Reuters in Jerusalem on Sunday at the start of a Middle East trip, Mnuchin said countries would have to reduce their purchases of Iranian oil by more than the roughly 20% level they did from 2013 to 2015 to get waivers. "I would expect that if we do give waivers it will be significantly larger reductions," said the US Treasury Secretary. To achieve the US goal of further isolating Iran from the global financial community, Mnuchin said that the U.S. Treasury was already in negotiations with the Belgian-based financial messaging service SWIFT which intermediates the bulk of the world’s cross-border dollar-denominated transactions, on disconnecting Iran from the network. Washington has been pressuring SWIFT to cut Iran from the system as it did in 2012 before the nuclear deal. Validating European concerns that the US can and will weaponize the dollar at will and use the reserve currency as a global bargaining chip, Mnuchin's threats confirmed that although the United States does not hold a majority on SWIFT’s board of directors, the Trump administration could impose penalties on SWIFT unless it disconnects from Iran, pressuring it to comply with US demands. "I can assure you our objective is to make sure that sanctioned transactions do not occur whether it’s through SWIFT or any other mechanism,” he said, “Our focus is to make sure that the sanctions are enforced." While Mnuchin declined to give details of the talks with SWIFT executives, he said that the Treasury Department would identify “as quickly as possible” banks that would be allowed to process transactions for humanitarian funding to Iran, and by implication identifying all the banks that would be isolated. "We want to get to the right outcome, which is cutting off transactions,” he said, declining to comment on which banks would be selected. While Iran believes that it can ward off severe economic damages from the U.S. sanctions for the remainder of Trump’s term, Mnuchin predicted a significant impact on its economy as major companies exit the Iranian market for fear of U.S. reprisals.
In Major Concession, Trump Will Allow Iran To Remain Connected To SWIFT - In a stark reversal from its position just days earlier, the Trump administration is expected to allow Iran to remain connected to the SWIFT banking system the Washington Examiner reports, in what amounts to a major concession to European allies who have been pressuring senior U.S. officials to keep this key lifeline to the Islamic Republic open.As recently as this weekend, Reuters reported that in order to further isolate Iran from the global financial community, Treasury Secretary Mnuchin said that the U.S. Treasury was in negotiations with the Belgian-based financial messaging service SWIFT which intermediates the bulk of the world’s cross-border dollar-denominated transactions, on disconnecting Iran from the network. Washington has been pressuring SWIFT to cut Iran from the system as it did in 2012 before the nuclear deal. The latest reversal comes as a result of 'ongoing talks between top U.S. officials and European allies "who have been pressuring the Trump administration to take a softer line on Tehran" ahead of the Nov. 4 implementation of new sanctions on Iran. The unexpected move has been met with "frustration" by Iran hawks both on Capitol Hill and elsewhere who have argued that SWIFT continues to provide Iran with a critical financial lifeline which it is using to fund terrorist operations across the region despite its ailing economy. Yet despite opposition from the "hawks", Iran will remain connected to the SWIFT system As reported previously, Trump has been under pressure for months from European allies to keep Iran connected to SWIFT, despite fierce opposition to the move among some inside the administration and many legislative allies on Capitol Hill. In August, Germany’s Foreign Minister Heiko Maas called in August for a system that was an alternative to SWIFT and would allow "financial independence" from Washington, that would possibly keep the nuclear agreement with Iran alive.Meanwhile, as Europe scores a diplomatic victory, the internal battle over Iran's access to SWIFT - which has been brewing for months - will likely remain at the forefront ahead of the implementation of new sanctions next month due to opposition by the Israelis and others who aim to see Iran completely iced out of the international banking system.
Trump strikes a blow in US-China struggle with Build Act to contain Xi's Belt and Road - Democrats and Republicans in the United States may be deeply divided on almost every aspect of President Donald Trump’s inconsistent foreign policy, but on one issue they are in unison: China’s US$1.1 trillion “Belt and Road Initiative” must be contained.That rare spirit of bipartisanship was clearly evident this month with the passing of the Better Utilisation of Investment Leading to Development (Build) Act by supermajority votes in both chambers of the American legislature.Signed into law by Trump on October 5, the act – latched onto must-pass legislation reauthorising the Federal Aviation Administration – will create a new agency that, just like the belt and road plan, will make available loans and guarantees to developing countries, particularly in Asia and Africa.While the soon-to-be-formed US International Development Finance Corp (IDFC) will have an exposure cap of US$60 billion – a drop in the ocean compared with Chinese-backed development financing – the American effort is viewed by some quarters as having an edge because it could prove a catalyst for attractive private sector financing.The IDFC’s set-up, meanwhile, comes as most eyes have been on the US-China trade war. Regional observers say the ratification of the Build Act could well be of greater significance as the rivalry between the world’s two biggest economies heats up.
“He wants them to suffer more”: Inside Trump’s China bet --President Trump has no intention of easing his tariffs on China, according to three sources with knowledge of his private conversations. Instead, these sources say he wants Chinese leaders to feel more pain from his tariffs — which he believes need more time to fully kick in. "He wants them to suffer more" from tariffs on $200 billion of Chinese goods, said a source with direct knowledge of Trump's thinking, and the president believes the longer his tariffs last, the more leverage he'll have. Trump's trade war with China is at the "beginning of the beginning," according to a source familiar with Trump's conversations. And his team doesn't expect much from the tentatively planned meeting between Trump and Chinese President Xi Jinping on the sidelines of the G20 summit in Buenos Aires next month. The Trump economic team has done no substantive planning so far for the bilateral meeting's agenda, largely because the purpose of the meeting is for Trump and Xi to reconnect, eyeball each other, and feel each other out amid their escalating trade war. "It's a heads of state meeting, not a trade meeting," a source with direct knowledge told Axios. "Trump is thinking about this meeting as a personal reconnection with President Xi, not a meeting that's going to evolve into detailed discussions," said a source familiar with Trump's thinking. "The sides are very far apart. ... Right now, there's not the common basis for proceeding." Trump isn't focused on the details of a potential China deal. He's focused on creating more leverage, according to another source who recently discussed the U.S.-China standoff with the president. Trump has privately boasted that his China tariffs have driven down the country’s stock market. Experts say the trade war has hurt market sentiment, but the stock market has never been a reliable barometer of Chinese economic strength. The generic point Trump makes to aides, per a source with direct knowledge: "'We are strong and they are weak.' ... He believes more pressure will bring them to the table to make a deal."
China’s cheap shipping advantage explained - A seemingly illogical calculation in a 2015 report by the US Postal Service was the justification for President Donald Trump’s decision on Wednesday to pull out of the Universal Postal Union, one of the world’s oldest international organisations. According to the US Postal Service, it would cost around US$20 to mail a small parcel of 2kg (4.4lbs) from one US state to another, but mailing the same package from China would only cost US$5. Trump claimed China was paying discounted rates for international delivery under the system and that was hurting the US Postal Service. The move to withdraw from the Universal Postal Union, which oversees international mail exchanges, is Trump’s latest protectionist measure aimed at revoking China’s competitive edge over the US.It follows his recent accusations that China is meddling in next month’s midterm elections and the continuing strain of the US-China trade war. While Trump has distanced the US from several international organisations and treaties, the move to pull out of the UPU could directly impact the daily lives of consumers in an age of e-commerce and globalisation.From mailing a letter to receiving an online shopping parcel, the postal rates paid are determined every four years by UPU for its membership of 192 countries. This seemingly obscure, Swiss-based organisation coordinates rates and standards between nearly every national postal system in the world. The UPU’s system of determining terminal dues is at the core of Trump’s accusation that China has benefited from the arrangement, as poor and developing countries pay lower rates than wealthier countries. All postal operators pay terminal dues to compensate foreign postal services for delivering their overseas mail. When a letter or parcel is mailed overseas, the postal administration of the sender’s country – which has received payment for postage, usually in the form of a stamp – pays terminal dues to the destination’s postal service for its share of the delivery process.
Pompeo warns Panama against doing business with China - Secretary of State Mike Pompeo said Thursday that he had warned President Juan Carlos Varela of Panama about doing business with China, criticizing Chinese state-owned enterprises that engage in “predatory economic activity.” As his plane left Panama City, Pompeo recounted his talks with Varela and local journalists. Clearly concerned that Panama could become a beachhead for growing Chinese economic influence in the Western Hemisphere, he emphasized that Panamanians should be cautious when considering business ties with China. Pompeo said he intended to tell the entire region that “when China comes calling, it’s not always to the good of your citizens,” and that countries had to watch out for Chinese companies that “show up with deals that seem too good to be true.” His warning came more than a year after Panama cut diplomatic relations with Taiwan — which China views as a part of its territory — in favor of establishing ties with Beijing. Pompeo visited Panama City for an afternoon, stopping at the presidential palace to meet with Varela before going to the U.S. Embassy to address employees there. Pompeo told reporters on his plane that he had discussed a range of issues with Panamanian leaders, from economic ties to counternarcotics, and that China was one of the priorities. “The importance isn’t that China is out competing in the world,” he said. “We welcome that. It’s when state-owned enterprises show up in a way that is clearly not transparent, clearly not market-driven and designed not to benefit the people of Panama, but rather to benefit the Chinese government.” “Those are the kind of things we think are both inappropriate and not good for the people of Panama or any other country where China is engaged in this kind of predatory economic activity.” Pompeo declined to cite specific projects that he considered questionable.
Chinese broadens its propaganda drive to heartland America - China's propaganda machine has taken aim at American soybean farmers as part of its high-stakes trade war with the Trump administration.The publication last month of a four-page advertising section in the Des Moines Register opened a new battle line in China's effort to break the administration's resolve. U.S. farmers are a key political constituency for Trump, and Beijing has imposed tariffs on American soybeans as retaliation for Trump's tariffs on hundreds of billions in Chinese imports.China regularly disseminates propaganda in the West through its China Daily newspaper to try to influence public opinion. But the advertorial in the Register was unusual for deploying not a national publication in New York or Washington but a newspaper in the farm state of Iowa."It's the first time I've ever seen anything like this in a heartland city," said Matt Schrader, who edits the China Brief newsletter for the Jamestown Foundation, a Washington research institute that monitors China's actions. The Iowa newspaper section was explicitly labeled a product of China Daily, China's official English language newspaper. The articles were clearly geared to try to soften the image of China and its president, Xi Jinping. With headlines ranging from "Dispute: Fruit of a president's folly" and "Book tells of Xi's fun days in Iowa" to Kung Fu skill helps light up life path" and "China seeks pacts on robotics," the message was a not-very-subtle one about the friendly way Beijing wants to be seen in the farm belt.
China seeks framework for November deal with Trump - Ahead of a possible meeting next month between US President Donald Trump and his Chinese counterpart, Xi Jinping, the White House tempered any optimism that a trade truce with Beijing is imminent when top economic advisor Larry Kudlow accused China on Sunday of doing “nothing” to defuse trade tensions.But some Chinese officials and government advisers recently emphasized that China will show patience in addressing American trade demands, postponing if necessary some of its plans to become self-sufficient in high-tech industry.Raising per capita income from the present US$9,000 a year to mid-five figures over the next ten years or so is the country’s top priority, and the leadership views trade war with the United States as a distraction. China, they believe, is prepared to make concessions to American demands for changes in the country’s industrial policy without changing its long-term trajectory.Several officials said they hoped that a meeting between Trump and Xi at the Group of Twenty summit in Argentina next month might break the ice. Earlier this year, China encouraged the US to give it a shopping list of items it might buy to reduce the bilateral trade deficit. To China’s consternation, the American side added the demand that China reduce subsidies to a manufacturing industry that competes with the United States.Support for capital-intensive industry in China rarely takes the form of direct subsidies. Instead, it is embedded in the provision of credit and the control of the supply chain of China’s state-owned enterprises. It is not clear how to measure such subsidies, let alone eliminate them. Washington, to paraphrase an old joke, made Beijing an offer it can’t understand.China’s “Made in China 2025” plan, which envisions a rapid expansion of domestic high tech industry, figures prominently in the US administration’s complaints about Chinese economic policy. US negotiators accuse China of using state subsidies to gain an unfair advantage against US competitors, quite apart from tariffs, non-trade barriers, theft of intellectual property and pressure on Western joint-venture partners to transfer technology. China told the United States that it would buy whatever the United States wanted to sell in order to reduce the trade deficit, and is ready to work with Washington on improving intellectual property protection, but the American challenge to China’s economic model is a deal-breaker.
Trade war holds no fears for China, official warns US business chiefs- China does not want a trade war with the United States but has no fears and will not back down, a senior official from the country’s top political advisory body has warned a group of American business leaders visiting the capital. Zhang Qingli, vice-chairman of the Chinese People’s Political Consultative Conference, made the comments at a Monday meeting with a 25-member delegation led by the American Chamber of Commerce in Hong Kong. “We don’t fear a trade war. We don’t want it, but we don’t intend to back down,” Dan Eberhart, chief executive of oilfield drilling services company Canary LLC, quoted Zhang as saying at the meeting. Zhang’s warning comes amid an escalating trade war between the world’s two largest economies. US President Donald Trump is pressing Beijing to change its “unfair trade practices” by imposing additional tariffs on Chinese imports, something China regards as an effort to contain the country’s rise. Zhang “probably spoke for over one hour” about three main issues, Eberhart recounted on Tuesday: China’s positive economic statistics, the Greater Bay Area scheme and the trade friction with the US. He called it a “one-way conversation” and there was no question and answer session. Asked whether Zhang spoke of any chance for renewed trade negotiations between China and the US, Eberhart said the mainland official dropped few hints and his stance was firm. “It doesn’t seem like we are on the brink of a solution, really. It seems more like a warning that China is digging in its heels, ready to play this out with the Trump administration,” he added.
US Won't Continue Trade Talks Until China Commits To Ending Forced Tech Transfers Two days ago, the algos driving trading in US equity futures markets largely ignored a pre-open headline reporting that President Trump would meet with Chinese President Xi Jinping at the G-20 - dashing the hopes of administration officials who probably hoped their strategic leak would help push stocks higher at the open. Sadly, stocks ignored the latest "on again" signal in what has become a tedious back-and-forth (so much so that even the algos have learned to ignore them). And with futures markets already in green on Thursday, it appears US government officials are up to their usual tricks as they try to goose the market at the open to prove that the Shocktober selloff, which hit its nadir on Wednesday as the S&P 500 and Dow crossed into the red YTD, will be remembered as little more than another dip to buy. Fortunately for Trump, futures have similarly ignored (so far, at least) a WSJ headline Thursday morning reporting that Trump and China wouldn't resume trade negotiations, which were abruptly halted in September when China cancelled a Washington trip by Liu He and Vice Commerce Minister Wang Shouwen, and have yet to resume. While Trump and Xi are still expected to meet on the sidelines of next month's G-20 meeting in Buenos Aires, negotiations likely won't make any progress unless the two sides can agree on a framework beforehand. The sticking point appears to be US demands that Beijing develop a proposal to address key US concerns such as forced technology transfers and other economic issues. The impasse threatens to undermine a meeting between Presidents Trump and Xi Jinpingscheduled for the end of November at the Group of 20 leaders summit in Buenos Aires. Both sides had hoped the gathering would ease the trade tensions. U.S. businesses have been counting on sufficient progress at the meeting for the Trump administration to suspend its plan to increase tariffs on $200 billion of Chinese imports to 25% on Jan. 1, from the current 10%. Such a move would be a blow to U.S. importers and consumers.
US Stops Trade Talks With China: Posturing or Impasse? -Yves Smith - The Wall Street Journal has a very useful snapshot of the current state of play on the US-China trade talks, which is that they are going nowhere fast. This has been the situation for some time, if you’ve been paying attention. As we’ll discuss in more detail, the two sides are engaged in a fight over the shape of the table, as to how the negotiations will proceed, which isn’t a good sign. Reading between the lines, the reason for the jockeying now appears to be to try to prevent Trump from making commitments to Xi at meeting set to take place at a G-20 summit at the end of next month, since Trump is particularly fond of making a show of his authority.However, even if Trump gives up ground by shooting from the hip next month,1 it’s not hard to infer that China is not where it expected to be now.When Trump started with his tariff threats and then action against China, some China watchers, who claimed to represent the thinking of well-placed insiders, were close to smug in their dismissiveness. The Chinese government had a long term perspective and was set up to execute on it, while the US could be guaranteed to change course with elections. Trump would be weakened by the midterms and out after 2020, if not sooner. US business was sure to be unhappy about Trump’s tariffs hurting their interest and they would reduce their support. At worst, the Chinese would just stay the course and ride out this inconvenience. But the Chinese appeared not to have anticipated that the US would move to impose tariffs on an additional $200 billion of tariffs after the earlier rounds that targeted $34 billion and then an additional $16 billion of imported items. In a departure from past practice, the US Trade Representative is not allowing any exceptions to the $200 billion round of tariffs that come into effect in January, a decision that has retailers up in arms. Moreover, the tariff imposition does not appear likely to have much impact on the midterms. Trump’s ratings are on the high end of his range as President. Conventional wisdom has long been that the Democrats would pick up 20 to 40 seats in the House. Thanks to the Democrats focusing on identity politics, which cuts both ways, their prospects in the House don’t seem to have improved even with ongoing Trump outrages; Kavanaugh has improved the odds of Republicans picking up seats in the Senate and may even mitigate their losses in the House. The Chinese expected Trump to be walking wounded after the midterms, particularly after choosing goods for their retaliatory tariffs with the goal of undermining Trump support. That doesn’t look like it will be the case. By contrast, as Marshall Auerback has pointed out, China will come out the bigger loser in a trade war. So even though the Chinese may contend that tariffs won’t have that much impact on the economy, Trump may have caught China in a window where the tariffs could do disproportionate damage.
U.S. Won’t Resume Trade Talks Without Firm Proposal From a Wary China - The U.S. is refusing to resume trade negotiations with China until Beijing comes up with a concrete proposal to address Washington’s complaints about forced technology transfers and other economic issues, officials on both sides of the Pacific said. The impasse threatens to undermine a meeting between President Trump and President Xi Jinping of China that is scheduled for the end of November at the Group of 20 leaders summit in Buenos Aires. Both sides had hoped the gathering would ease the trade tensions. U.S. businesses have been counting on sufficient progress at the meeting for the Trump administration to suspend its plan to increase tariffs on $200 billion of Chinese imports to 25% on Jan. 1, from the current 10%. Such a move would be a blow to U.S. importers and consumers. Negotiations have been on hold since mid-September, when the Chinese canceled a trip to Washington after the U.S. announced levies on the $200 billion of Chinese imports. Since then, Beijing has sought to re-engage, including asking U.S. Treasury Undersecretary David Malpass to resume talks. He declined—with the backing of the White House trade team—until the Chinese present a formal offer, U.S. officials said. “If China wants [the G-20 session] to be a meaningful meeting, we need to do the groundwork,” a senior White House official said. “And if they don’t give us any information, it’s just hard to see how that becomes fruitful.” The impasse comes as tensions between the world’s two largest economies are spreading from trade to national-security issues. Vice President Mike Pence, in a recent speech, railed against China’s acquisition of sensitive technology and its confrontational military posture. Mr. Pence accused Beijing of meddling in U.S. politics, leaving China’s leadership perplexed over the scope of their mounting challenges with Washington, said Craig Allen, president of the U.S.-China Business Council, a trade group of large U.S. firms. For Beijing, making a formal offer presents a number of risks, individuals briefed by the Chinese said. First, it would reveal China’s negotiating position. Second, Beijing fears Mr. Trump could make any offer public in a tweet or statement as a way to lock in any concessions by China. There is history behind Beijing’s concerns...
China cutting rare earth output, unnerving global manufacturers (Reuters) - The Chinese government is limiting domestic production of rare earth minerals in the second half of the year, a move likely to crimp international exports and send prices for the critical materials higher, according to data from Adamas Intelligence. China is by far the world’s largest producer and consumer of rare earths, a group of 17 elements used to make electric vehicles and consumer electronics. The move is already forcing manufacturers to scour the globe for alternative supplies. For the second half of 2018, China’s quota for rare earth separation and smelting has been cut 36 percent, an attempt to better control the market, according to Adamas, a research firm that closely tracks the rare earths industry. China’s decision to limit domestic rare earth production to 45,000 tonnes for the second half of 2018 - announced in August and the lowest in more than five years - provides only enough supply for China’s domestic buyers, according to Adamas. The semi-annual quota had risen to 70,000 tonnes in the first half of 2018, 40 percent higher than the first half of 2017. But that move was largely seen by analysts and electronics manufacturers as a step to legitimize black market production, with Chinese manufacturing consuming most of that supply. While China is likely to attend to its own needs before exporting, increased exports would require the country to draw on already-low inventories of neodymium (Nd), prasesodymium (Pr) and dysprosium (Dy), used in electric vehicle motors, said Ryan Castilloux of Adamas. Prices for one key rare earth mineral, PrNd Oxide, could increase by 10 percent to 50 percent within the next 12 months, and is on track to double in price within next five years as demand outpaces supply, Castilloux said. Chinese exports typically supply around 80 percent of the globe’s rare earth needs, about 156,000 tonnes annually.
Report: Trade deficit with China has cost millions of U.S. jobs - A report shows the U.S. trade deficit with China has ballooned since Beijing joined the WTO. Sen. Rob Portman today will discuss how the Trump administration needs to push Beijing to make structural reforms — not just reduce its trade surplus with the U.S. Canada and Mexico continue to stand united against Trump’s steel tariffs, while former U.S. Ambassador to Mexico Roberta Jacobson notes how Mexican trust in the U.S. is being destroyed. The U.S. trade deficit with China has ballooned since Beijing joined the World Trade Organization in 2001, eliminating 3.4 million American jobs, according to a new report from the Economic Policy Institute out this morning. China has propelled into the second-largest economy at the expense of many U.S. manufacturing plants and jobs, the report shows.“China’s trade-distorting practices, aided by China’s currency manipulation and misalignment and its suppression of wages and labor rights, resulted in a flood of dumped and subsidized imports that greatly exceeded the growth of U.S. exports to China,” the report explains. It also adds that Beijing failed to implement certain policies that would have allowed for a “promised surge” of U.S. goods to China. Job loss has hit every state and congressional district to a varying degree, according to the report. The most affected states, based on share of net jobs displaced, are New Hampshire, Oregon, California, Minnesota and North Carolina. Manufacturing jobs make up almost 75 percent of those displaced by the deficit, the report adds, with more than 1.2 million U.S. jobs lost in the computer and electronic parts industry. While President Donald Trump has sought to rein in the U.S. trade deficit, the overall number has increased nearly 10 percent during his first year in office, to $552 billion — and is on track to swell further this year. Most economists say the trade deficit generally grows as a sign of a strong economy with increased consumer spending. The U.S. goods trade deficit with China grew from $83 billion in 2001 to $375.2 billion in 2017. The August deficit with China was the highest on record, at $38.6 billion, a Commerce Department report shows.
This Is Just The Very Tip Of The Iceberg - Spike In Tariffs Paid By US Businesses -- President Trump is about to get an earful from Americans hurt by the escalating trade war.New data shows, American businesses and consumers just paid a 45% spike in duties, according to Tariffs Hurt the Heartland, a campaign that highlights the negative impacts of President Trump's trade war on US businesses and the economy.Trade data released last Thursday during a town hall meeting in Pennsylvania discussed the tariffs' impacts, featuring distillers, pork producers, frame manufactures, and other industry experts. "For the most recent months available, August 2018, the amount of tariffs paid increased by $1.4 billion -- or 45% -- as compared to tariffs paid in August 2017. Tariff costs in Michigan tripled to $178 million and more than doubled in multiple states -- to $424 million in Texas, $193 million in Illinois, $50 million in Alabama, $29 million in Oklahoma, $23 million in Louisana, and $7.3 million in West Virginia. These costs strain businesses of all sizes but are particularly painful for small business, manufacturers, and consumers who bear the burden of tariff increases in the form of higher prices," via the data compiled by The Trade Partnership and released by Tariffs Hurt the Heartland. "These tariffs are taxes on American businesses and consumers," said Tariffs Hurt the Heartland spokesperson Angela Hofmann. "They aren't paid by other countries. They are paid here at home. What this data shows is that we are already seeing a steep increase both nationally and at the state level in the tariff costs businesses and consumers are paying." "This is just the very tip of the iceberg. The data released today offers a glimpse at what the coming pain from the trade war looks like. Once the tariffs on an additional $200 billion in goods kick in -- these numbers will continue to trend sharply upward. We are hopeful that this data, combined the personal stories of harm that we're sharing across America, will encourage this administration to move away from tariffs and to find new solutions to growing access to foreign markets," Hofmann said. The graduation of the trade war, and respective GDP hit, is shown by the Bloomberg chart below.
The Steel Industry Gets What It Wants on Tariffs - U.S. steel producers, which prevailed in their push for the Trump administration to impose tariffs on imported steel and aluminum, have also proven equally effective—and far more effective than many other industries—at avoiding tariffs they don’t want. Steel producers petitioned the U.S. Trade Representative in September for relief on 132 tariff lines, primarily for raw materials and chemicals used in the steelmaking process that members of the Steel Manufacturers Association import from China. They were able to get 66, or half, of them removed from the final list. Overall, the U.S. took nearly 300 tariff lines off the list, meaning about one out of every five removals was backed by the steel industry. A tariff line can refer to a single product but sometimes includes more than one. Most other major industry groups had a much lower success rate in petitioning for exemptions on the grounds that tariffs would hurt members’ ability to do business, according to a Wall Street Journal review of letters from more than a dozen groups that filed such requests to the USTR. The National Retail Federation and National Restaurant Association were granted less than 5% of their requested exemptions. The National Association of Home Builders got two of its nearly 500 requested exemptions removed from the list. The greater rate of success seen by the steel industry, which has close ties to the Trump administration, has sparked criticism of preferential treatment. The process of petitioning for relief from tariffs requires hiring international trade lawyers, a group of attorneys that Mr. Packard said is “relatively small and expensive to retain.” Career staffers at the USTR made all the decisions regarding exclusions, a USTR spokesman said in a written statement. “By far, the sector that received the most exclusions by value was consumer products,” the spokesman said. The 27-member Steel Manufacturers Association, whose biggest member is Nucor Corp. , said the tariff lines it pushed to remove include products that aren’t available from domestic sources, either because there are no U.S. producers or because domestic producers can’t supply enough of them. Many of the petitions for relief from other industries made similar claims. The industry continues to support the tariffs and the Trump administration’s trade objectives broadly. But “we wanted to inform the U.S. trade representative about the impact these tariffs would have on certain products that are critical for domestic steelmakers,”
Ford Says US Steel Most Expensive In The World Due To Trump's Tariffs - John Hinrichs, Ford's head of global operations, said the Trump administration's metal tariffs have made U.S. steel prices the most expensive in the world thanks to the President's trade war with China, reported The Detroit News. "U.S. steel costs are more than anywhere else in the world," Hinrichs said Monday at a Michigan Assembly plant marking the start of Ranger pickup production. Hinrichs said Ford officials have been communicating with the Trump administration about the tariffs: "The government knows our position about where we need to be in order to be competitive globally. We tell them that we need to have competitive costs in our market to be able to compete around the world." Ford CEO Jim Hackett called on President Trump last month to resolve trade disputes, warning that the second-largest American automaker could experience severe financial damage. He said the steel and aluminum tariffs were projected to cost Ford roughly $1 billion because it sources most of its metals from U.S. companies. Ford, General Motors Co., and Fiat Chrysler Automobiles have all readjusted full-year earnings outlooks in the second quarter due to soaring costs of domestic sourced metals. "Domestic hot-rolled coil -- the benchmark price for American-made steel -- has gained 28% in 2018 as the Trump administration implemented tariffs on imports. The levies helped push prices to about $920 a metric ton earlier this year, the highest in a decade. U.S. steel currently costs about $260 more per short ton than steel in China, which accounts for more than half of global demand," said Bloomberg. President Trump has called American companies "babies" for complaining about the tariffs. He accused Harley-Davidson, which just reported its biggest revenue drop in more than 8 years, using them as an excuse to move some operations to Europe and Asia. Rising steel and aluminum prices make Ford less competitive in global markets, which have not been the Trump administration's only policy that has damaged the company. In August, the automaker abandoned plans to sell a new model called the Focus Active in America. Ford cited a 25% tax on vehicles imported from China, where the car would have been built. Ford also reduced American exports to China because President Xi Jinping has played a tit-for-tat game with President Trump, matching his 40% tariff on imported vehicles.
Made in China: Buick, Cadillac and Volvo pull US imports of some cars over Trump trade tariffs -- On Friday, Ford cancelled plans to import from China its small new crossover, the Focus Active. Company executives cited President Donald Trump's escalating trade war in deciding to kill the plan. The administration already imposed 25 percent tariffs on cars imported from China in July and is calling for even more on $200 billion in other Chinese goods. Trump is separately evaluating a proposal to impose tariffs on all imported vehicles on national security grounds.Manufacturers have halted imports of each of the cars below since the tariffs took effect, making the future of Chinese-built cars in the U.S. auto market grim. These are the cars most at risk of becoming more expensive or being pulled from the U.S. market altogether.
Trump succeeds in forcing WTO shakeup - The U.S. and China will be left out of a meeting in Ottawa today that aims to find solutions to a number of challenges facing the WTO. Meanwhile, EU and U.S. officials are meeting in Washington through Friday to start talks on regulatory issues. Plus, the new North American trade pact promises stronger LGBTQ protections. Let’s start here: Trade ministers from 13 economies — including Canada, Mexico, the European Union and Japan — gather in Ottawa today as part of a high-stakes effort to rescue the World Trade Organization from the trade fight sparked by the world’s two largest economies, Pro Trade’s Adam Behsudi reports.And while the United States and China weren’t invited, the two economic powerhouses are expected to loom large over the talks today and Thursday. It also appears that the Trump administration’s “disruptively constructive” policies — a phrase used recently by U.S. envoy to the WTO Dennis Shea — are accelerating efforts to review and potentially rewrite the WTO rules and legal system. A big issue confronting officials is how to control a superpower like China, which subsidizes industries, grants special treatment to state-owned companies, and still gets some of the same preferential treatment that developing nations do under international trade rules. “The issue is either China is going to have to figure out a way to change in order to fit its economic system within market-oriented rules or there is going to be a breakdown of the WTO, because the two at this point are clearly not compatible,” said Jennifer Hillman, a law professor at Georgetown University and former member of the WTO’s Appellate Body. Adam has more from Ottawa here.
The Trade War Has Claimed Its First Victim – Foreign Policy -The World Trade Organization (WTO) might be the first victim of the trade war between China, the United States, and the European Union. Today, each is in flagrant violation of its rules, and the institution’s credibility as the protector of a rules-based trading system is in serious doubt.U.S. President Donald Trump initiated the trade war in March when he announced the imposition of a 25 percent tariff on steel imports and 10 percent tariff on aluminum imports from most countries. In May, he expanded the duty to include imports from Canada, Mexico, and the EU. In a move that surprised few, China reacted by imposing tariffs of its own on an equivalent volume of steel and aluminum imports from the United States. Canada, Mexico, and the EU eventually joined China in retaliating, too.As legal cover for its decision, the United States invoked a rarely used WTO clause that allows members to suspend some trade concessions on national security grounds. Trump’s tariffs undoubtedly violated the spirit of the clause—it is hard to see how steel and aluminum imports that mostly come from friendly nations endanger U.S. national security. But WTO scholars agree that Trump did not violate the letter of the law, which means that he will probably get a pass. Even so, several WTO members, including Canada, China, Mexico, Norway, Russia, Turkey, and the EU, have requested that the organization establish a dispute panel to review the United States’ new trade barriers. Washington’s defense has been quite clear: According to the national security clause, the WTO cannot “prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests,” and only the United States can decide what is required to protect those interests. As such, not only are its actions valid under WTO rules, but they are also, in fact, beyond review. . WTO rules require that whenever one member country believes that another has violated its trading rights, it must bring the matter to the WTO Dispute Settlement Body. Only this body can authorize retaliation. Since these countries acted wholly unilaterally in retaliating to Trump’s gambit, there is no question that they broke the rules. Unsurprisingly, the United States has already formally asked the WTO for a review.
US watchdog: Agencies ‘unaware’ of child separation policy - US government agencies were blindsided by the White House's policy to separate families caught illegally crossing the border, reports a government watchdog. The Government Accountability Office discovered the agencies tasked with enforcing the policy in April "did not plan" for an influx in jailed children. The "zero tolerance" policy saw nearly 3,000 migrant children separated from parents before it was suspended. The report comes as a caravan of nearly 7,000 migrants seek refuge in the US. The new findings were released to the public on 24 October, though the report had been published on 9 October. Congressional investigators with the Government Accountability Office (GAO) interviewed officials from the Department of Homeland Security (DHS) and Department of Health and Human Services (HHS). They found that these agencies had not planned for the increase in children separated from parents or guardians as a result of the "zero tolerance" policy, because they were unaware the policy was forthcoming. "These officials told GAO that they were unaware of the memo in advance of its public release," the report - which was requested by House Democrats - states. "Prior to April 2018, DHS and HHS did not have a consistent way to indicate in their data systems children and parents separated at the border." In April and July, border officials and the Office of Refugee Resettlement (ORR) were able to update databases to mark separated children, according to the report. However, GAO notes that it is too soon to know if those changes "will consistently indicate when children have been separated...or will help reunify families". As of 10 September, 437 children remain in ORR custody "for various reasons, such as ineligibility for reunification", GAO reported.
Central American caravan reaches Mexico chanting “We are international workers!” --The caravan of more than 7,200 refugees escaping desperate poverty and rampant violence in Central America has successfully crossed into Mexico on its way to the United States. The caravan, which has taken on the character of a mass political demonstration, is mostly composed of Hondurans and includes about 2,300 children and 2,200 women. With hundreds of miles behind them and hundreds of miles ahead, the migrants marched on Sunday toward the Mexican city of Tapachula in the state of Chiapas.In spite of the scorching sun and military helicopters hovering overhead, the spirited caravan chanted, “Migrants are not criminals, we are international workers!” and “Why kill us? We are the hope!” The 3.5-mile-long caravan, which departed as a group of about two thousand Hondurans from San Pedro Sula ten days ago, reached the Guatemala-Mexico border Friday. After they easily overran a fence set up by the Guatemalan authorities, they made their way across the Rodolfo Robles bridge and the port of entry into Mexico. However, they were tackled and attacked with tear gas by 400 Mexican riot police. After the violent assault and as only a miniscule stream of migrants were being allowed in to begin applying for asylum, the caravan held discussions Friday night about the days or weeks they would have to wait and the high likelihood of being deported. Thus, the decision was taken to join the hundreds of others who had already risked crossing the Suchiate river into Mexico and to re-group at the central plaza in Ciudad Hidalgo, state of Chiapas. Throughout Saturday, they crossed en masse. After being welcomed similarly by the Guatemalans, the migrants were received by hundreds of Chiapas residents— chiapanecos —with food, clothes, other supplies and cheers. On Sunday, the caravan re-assembled to continue their trip north in the form of a massive column that thanked, greeted, and invited locals with the chant: “Mexico, Mexico!” Appeals aimed at American workers and youth for “help” are already being reported.
Mexico opens border to migrant women and children from Honduras; caravan plans to travel to US Mexican authorities on Saturday allowed dozens of women and children from the Honduran migrant caravan to pass into its territory, the country's ambassador to Guatemala said. Luis Manuel Lopez told AFP the women and children would be processed by immigration authorities and taken to a shelter in the city of Tapachula, 40 kilometres away. The women ran forward when immigration officers unchained a gate that had been pinning back migrants at the crossing. "I'm happy, happy! At last!" shouted a relieved Gina Paola Montes, 21, as she ran onto Mexican territory. One of the women fainted, alarming her relatives. Eva Hernandez, 42, a Honduran activist, says the group had been promised they will receive refugee permits and a safe place to stay. "We better find that shelter today," she said. The women and children are part of a group of thousands of Honduran migrants on the Mexican border with Guatemala hoping to reach the US.
Thousands in U.S.-bound migrant caravan pour into Mexican city (Reuters) - A U.S.-bound caravan of thousands of mostly Honduran migrants whom President Donald Trump has declared unwelcome, crowded into the Mexican border city of Tapachula on Sunday, setting up impromptu camps in public spaces under a heavy rain. Members of the caravan, exhausted from the hours-long trek on foot from the Guatemalan border, mostly ignored police offers to board buses heading to a migrant shelter because of suspicions they might be deported instead. The migrants have defied threats by Trump that he will close the U.S.-Mexico border if the caravan advances, as well as warnings from the Mexican government that they risk deportation if they cannot justify seeking asylum in Mexico. On Sunday, Trump said on Twitter that “full efforts are being made to stop the onslaught of illegal aliens,” arguing that the migrants must apply for asylum in Mexico before attempting to petition U.S. authorities. In southern Mexico, police in riot gear shadowed the caravan’s arrival along a southern highway, but did not impede their journey. In Guatemala, local media reported that around 1,000 migrants were traveling north en route to the Mexican border. A large column of people marched under a burning sun Sunday as a military helicopter circled low overhead. Many migrants said they were fleeing a toxic mix of violence, poverty and corruption in Central America. Most said they felt safer advancing in a large group.
Trump asserts migrant caravan headed to US includes 'unknown Middle Easterners,' offers no evidence -- As thousands of Central American children, parents, elderly and other adults intent on migrating to the United States awoke from a night sleeping on concrete in far-southernMexico, President Donald Trump resumed tweeting about the migrant caravan as the fault of Democrats and a danger to the U.S. The caravan of migrants mostly from Guatemala and Honduras bedded down Sunday night on the concrete of a town square in Tapachula, Mexico, but awoke Monday determined to resume their arduous journey to the U.S. border still some 1,700 miles away. Trump, meanwhile, in a series of tweets asserted that "criminals and unknown Middle Easterners" are amid the crowd, for which he offered no evidence. He also again said Democrats are to blame for not working with his administration on immigration reform. "Every time you see a Caravan, or people illegally coming, or attempting to come, into our Country illegally, think of and blame the Democrats for not giving us the votes to change our pathetic Immigration Laws! Remember the Midterms! So unfair to those who come in legally," Trump tweeted Monday morning.
Trump: US to 'begin cutting off' aid to countries associated with migrant caravan -- President Trump on Monday said that the U.S. will begin to cut off or reduce aid to Honduras, Guatemala and El Salvador as citizens of those countries flee for the U.S. as part of a so-called caravan of migrants. In a trio of tweets, the president escalated his rhetoric surrounding the group of migrants, declaring a national emergency as they approach the border and claiming that "unknown Middle Easterners" had joined the group. Trump, in the tweets, did not offer any evidence for the charge that people from the Middle East were among those crossing the border. "Guatemala, Honduras and El Salvador were not able to do the job of stopping people from leaving their country and coming illegally to the U.S. We will now begin cutting off, or substantially reducing, the massive foreign aid routinely given to them," Trump wrote in a tweet. "Sadly, it looks like Mexico’s Police and Military are unable to stop the Caravan heading to the Southern Border of the United States. Criminals and unknown Middle Easterners are mixed in. I have alerted Border Patrol and Military that this is a National [Emergency]. Must change laws!
Migrant Attack Caravan Regroups; 5,000 Push North As Mystery Men Hand Out Cash - A Central American migrant caravan which was temporarily delayed by the Mexican government has regrouped, resuming their advance towards the US border on Sunday, according to AP. The number of migrants swelled overnight to approximately 5,000 as the mile-long caravan set out toward the Mexican town of Tapachula. Several hundred asylum seekers have reportedly applied for refugee status in Mexico, while an estimated 1,500 remain on the Guatemalan side of the Suchiate River in the hopes of entering Mexico legally. It was not immediately clear where the additional travelers had materialized from since about 2,000 had been gathered on the Mexican side Saturday night. They seemed likely to be people who had been waiting in the Guatemalan town of Tecun Uman and who decided to cross during the night.They marched on through Mexico like a ragtag army of the poor, shouting triumphantly slogans like “Si se pudo!” or “Yes, we could!”As they passed through Mexican villages on the outskirts of Ciudad Hidalgo, they drew applause, cheers and donations of food and clothing from Mexicans. Maria Teresa Orellana, a resident of the neighborhood of Lorenzo handed out free sandals to the migrants as they passed. “It’s solidarity,” she said. “They’re our brothers.” -APThe group has been referred to as an "attack caravan" by former GOP House Speaker Newt Gingrich, who cited a figure by Fox News host Laura Ingraham that the caravan would cost around $7,000 per person, or $28 million total when the size of the group was estimated at 4,000 people. At 5,000 strong, the caravan would cost $35 million. If the new reports are correct the “attack caravan” from Central America is up to 4,000 people. If Laura Ingraham’s estimate is right and it costs about $7,000 per person where is the $28 million coming from. This is $28 million to attack American sovereignty.— Newt Gingrich (@newtgingrich) October 19, 2018 Meanwhile, two men in white t-shirts were seen handing out what appears to be cash to the migrants last week, fueling speculation that the second such group this year has been professionally organized and funded.
"National Emergency" - President Trump To Cut Central American Aid As Mexico Loses Control Of Migrant Army - Since President Trump threatened to close the Southern border due to Honduras' unwillingness to comply with his requests for assistance in stopping a migrant caravan marching toward the US, the migrants have successfully crossed into Mexico and on Sunday regrouped after being temporarily delayed at the Mexican border by border guards who failed to force the migrants to turn back. So, for the second time this year, it appears President Trump is ready to send more US troops to the border, as he said in a tweet Monday morning that he'd notified the border patrol and military that this is a "national emergency" while reiterating that the blame lay with Democrats for refusing to change our "pathetic" immigration laws. The president also claimed that "unkown Middle Easterners" had become "mixed in" with the caravan.And since Honduras and Guatemala did nothing to stop the migrants despite Trump's requests for assistance, the president added that we would be cutting off aid: "We will now begin cutting off, or substantially reducing, the massive foreign aid routinely given to them."Sadly, it looks like Mexico’s Police and Military are unable to stop the Caravan heading to the Southern Border of the United States. Criminals and unknown Middle Easterners are mixed in. I have alerted Border Patrol and Military that this is a National Emergy. Must change laws!— Donald J. Trump (@realDonaldTrump) October 22, 2018 Every time you see a Caravan, or people illegally coming, or attempting to come, into our Country illegally, think of and blame the Democrats for not giving us the votes to change our pathetic Immigration Laws! Remember the Midterms! So unfair to those who come in legally.— Donald J. Trump (@realDonaldTrump) October 22, 2018 Guatemala, Honduras and El Salvador were not able to do the job of stopping people from leaving their country and coming illegally to the U.S. We will now begin cutting off, or substantially reducing, the massive foreign aid routinely given to them.— Donald J. Trump (@realDonaldTrump) October 22, 2018
Trump’s Cuts to Central America Aid Will Lead to More Caravans As several thousand Central American migrants moved through Honduras, Guatemala and into Mexico on their way toward the United States, President Trump tweeted that he would begin cutting off foreign aid to these countries. Given Congress’s power of the purse, acting on these threats is likely illegal. More importantly, however, it would be counterproductive. Not only would such a pullback swell this human tide, it would squander the hard-earned gains and lessons of a decade-long effort to make Central American nations better places to live than to leave. Sadly, a combination of events and continuing difficult circumstances has already had a profound negative impact, pushing people to pull up stakes. Since April, an average of nearly 14,000 Central Americans have made it to the U.S. southern border every month. And this isn’t the first time migrants have banded together in their trek, though few groups have reached this size or garnered such media attention. This exodus of groups is likely less a convoluted plot by nefarious political forces than the conclusion by millions of citizens that matters in their countries have reached a tipping point. Afflicted by crime, violence, drought and poverty, inspired by the examples of others bold enough to leave home, and swayed by misinformation peddled by human smugglers eager to make a buck, they have convoyed together for safety and headed north.U.S.-funded programs have made a difference. There are hundreds of stories of kids who stayed in school, businesses begun, criminal cases investigated, domestic violence cases adjudicated, and lives that became better, leading more people to stay than would otherwise have done so. And dollar for dollar, individual by individual, programs designed to give Central Americans a better future at home are arguably much more cost-effective than the thousands of dollars it can cost per capita to detain, prosecute and then deport them. For an administration that wants to stop immigration, cutting aid to improve, however modestly, day-to-day conditions in Central America is nonsensical. By undermining hard-fought and fragile pockets of stability in Central America’s northern triangle nations, reducing present or future aid will just send more Central Americans north. This is not policy, but politics aimed at riling up the 25 percent of Republicans who identify immigration as their No. 1 voting issue.
Migrant Declares That Trump Is The Antichrist As Caravan Swells To 14,000 People - With midterm elections just two weeks away, it is the massive caravan of migrants currently headed toward the U.S. border that is garnering most of the top headlines, with their arrival on the US border seemingly well-timed to coincide with Americans going to the polls. President Trump had been hoping that this caravan would be stopped at Mexico’s southern border, but that did not happen, and now it appears that we could be looking at a major international incident along the U.S. border with Mexico not many days from now. As you will see below, it is being reported that the population of “the caravan” has grown to 14,000 people, and many of them are extremely angry with Donald Trump. One that was interviewed by CNN even called him “the Antichrist”… The Mexicans had closed their border with Guatemala as “the caravan” approached, but migrants started using boats to cross into Mexico and the Mexican police failed to stop them. Now the caravan is steamrolling north, and one Mexican newspaper is reporting that the number of people involved has grown to 14,000…Mexican police, who failed to stop them at that country’s border with Guatemala, now serve as escorts for the caravan as it barrels north, its members clear that they have no intention of staying in Mexico, and have eyes only for the U.S.New estimates cited by El Universal, a Mexican newspaper, say the caravan now has 14,000 people, many of them already in Mexico while others still wait.If that number is accurate, that means that the number of migrants has doubled, and it will likely grow even more as the caravan travels northward through Mexico.
Trump to deploy hundreds of troops to the border against Central American migrants - The US Defense Department is expected to approve as early as next week the deployment of 800 to 1,000 active duty troops, mostly from the Army and Air Force, to the US-Mexico border, according to Trump administration officials. While media reports indicated that details have not been finalized, this is the most concrete indication so far that the Pentagon plans to deploy troops domestically against the “caravan” of thousands of Central American migrants, mostly families with women and children that are currently crossing Mexico and seeking to reach the US. The comments made by the US officials and media commenters sought to minimize the significance of the deployment, stating that the troops will be composed of engineers, aviation support, doctors and lawyers. Troops can still carry arms, CNN cites a military official, but “solely for self-defense.” However, the unofficial announcement comes exactly one week after Trump first threatened to “call up the U.S. Military and CLOSE OUR SOUTHERN BORDER!” He called the caravan an “onslaught” and said that the impoverished workers and peasants are “hardened criminals,” while making unfounded and racist claims that “Middle-Easterners” have joined it. On Thursday morning, Trump restated his threat to deploy the military on Twitter, calling it a “National Emergency” and adding, “They will be stopped!” The previous night at a rally in Wisconsin he said the military was “all set” to be sent against the migrants. Such a move would violate the Posse Comitatus Act, which prohibits the armed forces from carrying out domestic law-enforcement activities, excluding the National Guard. While US officials speaking to CNN denied that troops would deal directly with the caravan, a myriad of provocations can be construed to justify their direct intervention, which could turn into a massacre of unarmed workers and children on the basis of “self-defense.” Last weekend, at the Guatemala-Mexico border, about 400 Mexican antiriot police began an assault against the migrants by tackling and shooting tear-gas canisters against the defenseless families seeking to cross the bridge toward the port of entry. Some migrants responded by throwing rocks, sandals and other objects, which led to an even more aggressive attack by the police. While not confirming the deployment, Captain Bill Speaks, spokesman for the Office of the Secretary of Defense, wrote in an email to Military Times that the Department of Defense will “ensure the safety and security of the CBP [Customs and Border Patrol] personnel involved in border security operations.”
Trump Considers Closing Southern Border to Migrants — President Trump is considering taking executive action to bar migrants, including asylum seekers, from entering the country at the southern border, according to people familiar with the plan. The effort would be the starkest indication yet of Mr. Trump’s election-season push to play to his anti-immigrant base as his party fights to keep control of Congress. The proposal amounts to a sweeping use of presidential power to fortify the border and impose the kind of aggressive immigration restrictions and enforcement measures that Mr. Trump has made his signature pursuit. The plan is expected to prompt a swift challenge in federal courts. The move would be the most drastic in a series of steps that Mr. Trump has taken or threatened to take in recent days — including preparations on Thursday to send as many as 1,000 active-duty Army troops to help secure the southern border — as he works to stop what he has called an “onslaught” of immigrants only days before the midterm elections. As part of that effort, the president has capitalized this month on the thousands of Central American migrants trekking north through Mexico. Many in the group are women and children believed to be seeking refuge from violence and economic hardship. He said without evidence this week that criminals and “unknown Middle Easterners” were “mixed in” among the people in the migrant caravan, and has blamed its formation on Democrats, falsely charging that they support allowing immigrants to stream, unchecked, into the country. The caravan is still more than 1,000 miles south of the border, and it is unclear when or whether the migrants will arrive, or how many will seek to cross into the United States. The White House did not respond to requests for comment on the plan for executive action on the border, and referred questions about the troop deployment to the Defense Department and the Department of Homeland Security.
As 'Caravan' Crosses Mexico, Trump's 'Temporary' Tent City For Migrant Kids Balloons In Size - A new report from the U.S. Department of Health and Human Services (HHS) shows President Trump's temporary tent city for unaccompanied alien children (UAC) at the U.S. Customs and Border Protection's (CBP) Tornillo, Texas Land Port of Entry (LPOE) has dramatically expanded its capabilities over the last several months. Tornillo's tent city was designed to temporarily house 450 children under the supervision of HHS in June, when Trump's zero-tolerance policy separated over 2,500 migrant children from their parents. Now, the temporary shelter has 3,800 beds for UACs between ages 13 and 17, 1,400 of those beds are on special reverse status. The Department of Homeland Security (DHS) and HHS said the expansion of the facility was imperative due to the influx of immigrant children arriving at the Mexico-US border without family members. The official in charge of Tornillo's facility told NBC on Friday, "there is no question whatsoever," that the rise in migrant children being detained by the CBP is due to the "extra precautions" the Trump admin is now preparing to match children with family members, including their biological parents, if possible. The official said that as of Oct. 12th, 826 out of the 1,500 children in Tornillo were awaiting background checks before they could be transferred to family members or homes within the US. Children at Tornillo stay an average of 59 days, up from roughly 30 days under the Obama administration, according to HHS. Federal officials have been strict with journalists on tours of the facility; there are no cameras, recorders, and or cell phones allowed inside. The official notes that children have access to legal services, medical care, outside activities, cable television, and religious services. DHS and HHS released new footage last week showing a rare glimpse inside the Tornillo facility:
Wife of Supreme Court justice spreads fake news about the migrant caravan - News travels fast, but fake news travels even faster, especially when there’s a political agenda attached to it.One glaring example took place over the weekend, when someone on Twitter posted a photograph of an injured police officer, with a caption that he’d been “brutalized” by the migrant caravan on its way to the United States. Soon, it would spread across the internet, as these things do. Same picture. Mostly the same caption. But, as you can see by these examples, different accounts.The problem, according to a deep dive from Snopes: It’s not true. The main image, which was taken during a clash in Mexico City in 2012, is just another attempt to demonize the refugees and spread fears over immigration.You can see the image used in this 2012 story. “These pictures do not capture police officers who were brutalized by members of the immigrant caravan making its way toward the U.S. in October 2018,” Snopes explained. “They’re all several years old and depict the aftermath of altercations between police officers and protesters in Mexico. ”Nevertheless, plenty believed it. That long list apparently includes Ginni Thomas, wife of Supreme Court Justice Clarence Thomas, who posted it on her page: Mike Burkons, pointed out the clear falsehood. “Ginni, do you even care that the pic you posted isn’t from the caravan and is from 2012?” he wrote. “I hope your husband actually thinks facts are important before he decides a case unlike his wife.”
Is Orwell’s Big Brother Here? Bezos & Amazon Team up With Defense, CIA & ICE -- Real News Network video & transcript - Amazon CEO chief Jeff Bezos has been in the news for quite a while now for many reasons: becoming the world’s richest man, giving a $2 billion gift to build schools and help the homeless, buying the Washington Post. Most recently we saw the result of his being hounded by Senator Bernie Sanders and Congressman Ro Khanna over working conditions and salaries of Amazon employees, which prompted Bezos to give his workers a raise to $15 an hour. Most these stories are important and vital, but there’s one story that seems to have fallen through the cracks and has not been given the same kind of media attention. And that’s the close working relationship between Amazon, the Department of Defense, CIA, Immigration and Customs Enforcement, or as we know it, ICE, local law enforcement, and the secretive datamining firm Palantir. It appears that the intertwined relationship ominously involves the intersection of mass surveillance and military contracts. At Wired’s 25th anniversary celebration last week, Jeff Bezos defended Amazon’s contracting with the Department of Defense, being very clear that he won’t be intimidated like other Silicon Valley tech companies whose employees are protesting their company’s involvement in the advancement of war and their role in increased mass surveillance. My guest today is Robert Scheer, who wrote the book They Know Everything About You: How Data Collection Operations and Snooping Government Agencies are Destroying Democracy. He’s also the host of the podcast Scheer Intelligence, hosted by the local NPR station KCRW in LA, and is the editor of Truthdig.com. And once again, great to have you with us. Thank you for joining us, Bob.
Trump Falsely Claims Puerto Rico Wants to Use Aid to Pay Its Debt - President Donald Trump falsely asserted that Puerto Rican politicians are seeking to use federal disaster aid to pay off the crippling debts that pushed the island into a record bankruptcy. The people of Puerto Rico are wonderful but the inept politicians are trying to use the massive and ridiculously high amounts of hurricane/disaster funding to pay off other obligations. The U.S. will NOT bail out long outstanding & unpaid obligations with hurricane relief money! Puerto Rico is expecting billions in disaster recovery aid to help rebuild from last year’s Hurricane Maria, an influx that has improved the island’s economic prospects by bringing in capital for infrastructure and promising to create jobs. This week it prompted a federal oversight board to project fiscal surpluses for the island through 2023, after accounting for a planned program of economic reforms. But the island’s leaders are not proposing using disaster recovery aid to directly pay off bondholders or other lenders, who have been squaring off in federal court and stand to recover only part of their investments once the government emerges from bankruptcy.
Entire broadband industry sues Vermont to stop state net neutrality law - The nation's largest broadband industry lobby groups have sued Vermont to stop a state law that requires ISPs to follow net neutrality principles in order to qualify for government contracts.The lawsuit was filed yesterday in US District Court in Vermont by mobile industry lobby CTIA, cable industry lobby NCTA, telco lobby USTelecom, the New England Cable & Telecommunications Association, and the American Cable Association (ACA), which represents small and mid-size cable companies.CTIA, NCTA, USTelecom, and the ACA also previously sued California to stop a much stricter net neutrality law, but they're now expanding the legal battle to multiple states. These lobby groups represent all the biggest mobile and home Internet providers in the US and hundreds of smaller ISPs. Comcast, Charter, AT&T, Verizon, T-Mobile US, Sprint, Cox, Frontier, and CenturyLink are among the groups' members. While the California law applies to all consumer broadband providers, Vermont's law is narrower and may be more likely to survive legal challenge. Vermont's law creates a process in which ISPs can certify that they comply with net neutrality guidelines, and it says that state agencies may only buy Internet service from ISPs that obtain those certifications.
Majority of Republicans supports ‘Medicare for all,’ poll finds The Hill - More than half of Republicans in a new American Barometer poll say they support "Medicare for all," also known as a single-payer health-care system. The survey, conducted by Hill.TV and the HarrisX polling company, found that 52 percent of Republicans polled said they supported the option, while 48 percent said they opposed it. Twenty-five percent said they "strongly" supported "Medicare for all," while 27 percent said they "somewhat" supported it. Twenty-two percent said they "somewhat" opposed the idea, while 26 percent said they "strongly" opposed it. The poll comes as Democrats aim to make health care, along with "Medicare for all," a central campaign issue. Republican leaders, including President Trump, have slammed the idea, saying it would ultimately fail if it were put into action. "In practice, the Democratic Party’s so-called Medicare for All would really be Medicare for None," Trump wrote in a USA Today op-ed. "Under the Democrats' plan, today’s Medicare would be forced to die."However, other polling has shown that the increased attention on "Medicare for all" could be peeling away senior citizens' support of Republicans in the midterms. A Morning Consult survey released last week found that 52 percent of voters whose top issues are Medicare and Social Security said they would vote for a Democrat in the midterms. Reid Wilson, campaign reporter for The Hill, told Hill.TV's Joe Concha that Republicans have yet to find their messaging on the issue.
Buried in “Hilariously Stupid” White House Attack on Socialism, An Accidentally Strong Argument for Medicare for All - From its heavy-handed comparisons between mild-mannered democratic socialist Sen. Bernie Sanders and militant communist revolutionary Mao Zedong to its bizarre assertion that the Scandinavian economic model is a failure due to the high weekly costs of owning a pickup truck in Finland and Sweden (seriously), a White House attack on socialism was roundly mocked almost as soon as it was released on Monday, with informed critics arguing that the report reads as if it was plagiarized from a college freshmanwith a serious Ayn Rand obsession.Titled “The Opportunity Costs of Socialism,” the Council of Economic Advisers’ (CEA) new 72-page paperpurports to offer an empirical analysis of socialist policies—but what it actually does is make what analysts described as “hilariously stupid” and “intellectually embarrassing” claims accompanied by charts and footnotes that give off the appearance of scholarly diligence.Characterizing the CEA’s report as a “truly bizarre document,” Vox‘s Dylan Matthews notes that the paper’s bibliography contains “a mix of books about mass atrocities in Communist regimes, economics papers on the distortionary effects of taxation, and works by socialists, like the essay Voxpublished by Jacobin staff writer Meagan Day defending democratic socialism.”But a look beyond the CEA’s hysterical rants against socialism’s supposedly totalitarian nature reveals that the White House accidentally makes a strong case for Medicare for All, which the paper describes as the “headline American socialist proposal.”After attempting to discredit single-payer healthcare programs—which multiple polls now show mostRepublicanvoters support—as “similar in spirit to Lenin and Mao,” the CEA produced a chart showing short wait times for seniors under the current U.S. healthcare system compared to those under the Canadian and Nordic systems.As Vox‘s Sarah Kliff notes, the CEA conveniently omits the fact that “America’s seniors are essentially in a single-payer system”: it’s called Medicare. “The Trump chart doesn’t say what the White House seems to think it says,” Kliff concludes. “It isn’t telling us that single-payer healthcare has long wait times. If anything, it says that it is possible to build a single-payer system with short wait times—and our Medicare program has already done it.”
Trump Proposes to Lower Drug Prices by Basing Them on Other Countries’ Costs — President Trump proposed on Thursday that Medicare pay for certain prescription drugs based on the prices paid in other advanced industrial countries — a huge change that could save money for the government and for millions of Medicare beneficiaries. As part of a demonstration project covering half the country, Medicare would establish an “international pricing index” and use it as a benchmark in deciding how much to pay for drugs covered by Part B of Medicare. “This is a revolutionary change,” Mr. Trump said in a speech on Thursday at the Department of Health and Human Services. “Nobody’s had the courage to do it, or they just didn’t want to do it.” Mr. Trump’s announcement was part of a flurry of initiatives emerging from the White House ahead of next month’s midterm elections, in which Democrats hope to take control of the House and possibly the Senate. Democrats have focused their campaigns on health care, hammering Republicans on the high cost of prescription drugs and asserting that Republicans would undo protections for people with pre-existing medical conditions — one of the most popular provisions of the Affordable Care Act. On Thursday, the Trump administration offered an answer — but the drug proposal would take effect in late 2019 or early 2020 at the earliest. Trump administration officials said they had the authority to use the Center for Medicare and Medicaid Innovation created by the Affordable Care Act to carry out the proposal. That agency has wide discretion to conduct demonstration projects. The Trump administration will accept public comments before starting the project. But the proposal will most likely face fierce political resistance from drug makers, some health care providers and some Republicans in Congress, and it could also be subject to legal challenges. “The administration is imposing foreign price controls from countries with socialized health care systems that deny their citizens access and discourage innovation,” said Stephen J. Ubl, the president and chief executive of the Pharmaceutical Research and Manufacturers of America, the main trade group for the industry. He said the proposal would “threaten patient access to innovative lifesaving medicines.”
Trump Adds A Global Pricing Plan To Wide Attack On Drug Prices, But Doubts Persist -- President Donald Trump’s new pledge to crack down on “the global freeloading” in prescription drugs had a sense of déjà vu. Five months ago, Trump unveiled a blueprin to address prohibitive drug prices, and his administration has been feverishly rolling out ideas ranging from posting drug prices on television ads to changing the rebates that flow between drugmakers and industry middlemen. Thursday, Trump proposed having Medicare base what it pays for some expensive drugs on the average prices in other industrialized countries, such as France and Germany, where prices are much lower. The proposal is in the early stages of rule-making and awaiting public comments. The U.S., Trump said, will “confront one of the most unfair practices, almost unimaginable that it hasn’t been taken care of long before this.” The proposal was met with hope and skepticism, with several experts saying they were happy the administration was taking on Medicare Part B’s rising drug prices but questioning its approach. Walid Gellad, director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh, said in an online post that the administration’s proposed solutions were unclear. And, he said, they would “face insurmountable challenges.” While some industry watchers pointed to the announcement as a political move, Wells Fargo pharmaceutical analyst David Maris said that this is a broader effort by the president and his administration to attack the root causes of high drug prices. “The reality is he could very easily not take this on and do what other administrations have done and let the prices keep rising.” Nothing would happen overnight. The proposal to require drug prices in TV ads could be delayed by litigation and notably, if implemented, does not include any penalties for companies who fail to post their prices.
No More Health Care Half-Fixes - Since Bernie Sanders made it a cornerstone of his 2016 presidential run, Medicare for All has become an increasingly popular and obvious demand. The system, which works by eliminating the private insurance market and relying on the government as the sole payer of health care costs, has been used by many other countries for decades.Americans, by contrast, pay costly monthly premiums to private insurance companies and still can’t even use their benefits because of outrageously high deductibles. And if you’re fortunate enough to receive decent health insurance through your employer, you are left vulnerable to an otherwise hostile workplace, since keeping your health care depends on keeping your boss happy.The failure of Obamacare to rein in costs and reliably expand coverage has led people to a logical conclusion: why not just get rid of private insurance altogether? Unfortunately, under the present administration, a federal improved Medicare for All program is unattainable — just recently, President Trump felt compelled to attack Medicare for All in a USA Today op-ed. As a result, many have retreated to state legislation. But state single-payer efforts face a number of major challenges. One would be navigating the existing, fragmented federal health care system.To streamline this process, Rep. Pramila Jayapal, D-WA, has put forward a bill that would make it easier for any state to request permission to opt out of programs like Medicare and Medicaid and receive federal waivers in their place — a prerequisite for any state single-payer health care program — via a single application to the US Secretary of Health and Human Services.While Jayapal’s plan would put some blue-state voters half a step closer to their own state health programs, it does very little to require that those programs do anything more than further balkanize our existing system. The most glaring issue with her plan is that it has few minimum requirements for what a state single-payer plan would need to provide in order to allow federal funds to be redirected to state health plans. After the fanfare around and then failure of Obamacare, one would hope that Democrats had seen the problem with tinkering around the edges of American health care, trying to preempt objections to a single-payer system by being “reasonable.” Jayapal should be commended for trying to bring us closer to winning Medicare for All, but she’s put forward a bill that repeats many of the same mistakes. Especially when compared to the Medicare for All legislation she is already a co-sponsor of, it’s hard to explain why this overly complicated and much less politically inspiring bill even exists.
Senate’s Out? Nobody’s Around? Perfect Time To Advance Trump’s Court Picks, Says GOP. ― The Senate is in recess and nobody is around, which means Republicans think it’s the perfect time to hold confirmation hearings for President Donald Trump’s controversial nominees to lifetime courts seats. Sen. Chuck Grassley (R-Iowa), the chairman of the Judiciary Committee, has held two hearings in the past week, despite virtually every senator being back home ahead of the Nov. 6 elections. Even Grassley wasn’t at his hearings: Sen. John Kennedy (R-La.) chaired the first one, last week, and Sen. Mike Crapo (R-Idaho) chaired Wednesday’s hearing. Not a single Democrat could attend either hearing. Only one other Republican, Sen. Orrin Hatch (Utah), was present. That means, between those two hearings, that three of Trump’s circuit court nominees and seven of his district court nominees sailed through without any real questions. The committee will likely vote to advance their nominations sometime after the elections. Not only are Republicans breaking from precedent by holding hearings while the Senate is in recess before an election, but their brazenly partisan move only intensifies the already toxic environment on Capitol Hill that couldn’t get much worse after this month’s ugly Brett Kavanaugh confirmation fight. “Today’s hearing and last week’s were jokes,” said Carl Tobias, a University of Richmond law professor and expert on judicial nominations. “No Democratic senators and two GOP senators and no real questions asked?” In his opening remarks in last week’s hearing, Kennedy read aloud a statement from Grassley suggesting that the top Democrat on the committee, Sen. Dianne Feinstein (Calif.), had given the green light to move forward with hearings without Democrats. Feinstein, along with every other Democrat on the committee, made it clear last week that they weren’t on board with this. They all signed a letter to Grassley urging him to postpone any hearings until after the elections, when everyone would be back and could ask questions of the judicial nominees up for lifetime seats on federal courts. .
Kavanaugh once lobbied for judge now handling ethics complaints against him - Supreme court justice Brett Kavanaugh once lobbied in support of a controversial judge who is now tasked with reviewing more than a dozen ethics complaints filed against him during his own confirmation process. Emails sent to the Senate judiciary committee and obtained by the Guardian show that beginning in 2001, Kavanaugh was involved in a high-stakes campaign to ensure that Timothy Tymkovich, another staunch conservative and a former Colorado solicitor general, would secure a lifetime appointment as a federal judge.Kavanaugh, who was confirmed to the supreme court this month, worked on the judicial campaign in his role as a senior staff member for President George W Bush. Tymkovich was confirmed in 2003, after a long delay in the Senate. He is now chief judge on the 10th circuit court of appeals, in Colorado.The revelation could create new concerns about the politicization of the supreme court and cast doubt on whether Kavanaugh will face any formal disciplinary action over his fiery and emotional testimony before the Senate judiciary committee earlier this month. Critics, including hundreds of law professors, legal experts and senators, have said that Kavanaugh’s performance, in which he lashed out at Democrats over allegations he committed sexual assault, lacked judicial temperament. Kavanaugh fiercely denied the sexual assault allegations.The chief justice of the supreme court, John Roberts, asked Tymkovich to examine more than a dozen judicial ethics complaints filed against Kavanaugh while he was technically still a circuit court judge. The complaints were not sent to Tymkovich until after Kavanaugh was confirmed to sit on the supreme court, where judges are in effect immune to disciplinary action by lower-court justices and are meant to police their own actions.The complaints are not public but according to the Washington Post they allege Kavanaugh lied under oath and that his behaviour before the Senate was ill-suited for a judge. Some legal experts have questioned whether it was appropriate for Roberts to wait until after Kavanaugh was confirmed to send the ethics complaints for review. But there has been little scrutiny of the man Roberts chose to conduct the review and his past relationship with Kavanaugh.
New York witches aim hex at Supreme Court’s Brett Kavanaugh despite death threats (Reuters) - Melissa Madara was not surprised to receive death threats on Friday as her Brooklyn witchcraft store prepared to host a public hexing of newly confirmed U.S. Supreme Court Justice Brett Kavanaugh this weekend. The planned casting of an anti-Kavanaugh spell, one of the more striking instances of politically disgruntled Americans turning to the supernatural when frustrated by democracy, has drawn backlash from some Christian groups but support from like-minded witch covens. “It gives the people who are seeking agency a little bit of chance to have that back,” Madara said. The ritual was scheduled to be livestreamed on Facebook and Instagram at 8 p.m. EDT on Saturday (1200 GMT Sunday). Seated at a desk phone among bird skulls and crystal balls at Catland Books, the occult shop she co-owns, Madara said the Kavanaugh hex is expected to be the most popular event the store has hosted since its 2013 opening, including spells aimed at President Donald Trump. Madara declined to provide details of what the latest ritual will entail. More than 15,000 people who have seen Catland Books promotions on Facebook have expressed interest in attending the event, vastly exceeding the shop’s 60-person capacity.
Chuck Grassley refers Michael Avenatti and Julie Swetnick for investigation- Senate Judiciary Committee Chairman Chuck Grassley on Thursday referred lawyer Michael Avenatti and a woman he represents to the Justice Department and the FBI for criminal investigation, claiming they made potentially false statements to Congress about Supreme Court Justice Brett Kavanaugh and alleged sexual misconduct. Grassley, a Republican from Iowa, cited "contradictions" between what Avenatti's client, Julie Swetnick, originally told the Judiciary Committee about Kavanaugh in an affidavit in late September, and what she said about the then-Supreme Court nominee days later in an interview with NBC News. In his letter Thursday to Attorney General Jeff Sessions and FBI Director Christopher Wray asking for an investigation, Grassley listed "potential violations" of federal criminal code, specifically "conspiracy, false statements and obstruction of Congress." "Swetnick made her allegations in a sworn statement to the committee on September 26. In an October 1 interview with NBC News, however, Swetnick specifically and explicitly back-tracked or contradicted key parts of her sworn statement on these and other allegations," the Judiciary Committee said in a statement. "In subsequent interviews, Avenatti likewise cast serious doubt on or contradicted the allegations while insisting that he had thoroughly vetted his client," according to the statement. The committee said there was a "lack of substantiating or corroborating evidence" about Swetnick's claims, and also cited "overarching and serious credibility problems pervading the presentation of these allegations."
Judge Orders Mueller To Prove Russian Company Meddled In Election -- A Washington federal judge on Thursday ordered special counsel Robert Mueller's team to clarify election meddling claims lodged against a Russian company operated by Yevgeny Prigozhin, an ally of Russian President Vladimir Putin, according to Bloomberg. Concord Management and Consulting, LLC. - one of three businesses indicted by Mueller in February along with 13 individuals for election meddling, surprised the special counsel in April when they actually showed up in court to fight the charges. Mueller's team tried to delay Concord from entering the case, arguing that the Russian company not been properly served, however Judge Dabney Friedrich denied the request - effectively telling prosecutors 'well, they're here.' Concord was accused in the indictment of supporting the Internet Research Agency (IRA), a Russian 'troll farm' accused of trying to influence the 2016 US election. On Thursday, Judge Freidrich asked Mueller's prosecutors if she should assume they aren't accusing Concord of violating US laws applicable to election expenditures and failure to register as a foreign agent. Concord has asked Dabney to throw out the charges - claiming that Mueller's office fabricated a crime, and that there is no law against interfering in elections. According to the judge’s request for clarification, the Justice Department has argued that it doesn’t have to show that Concord had a legal duty to report its expenditures to the Federal Election Commission. Rather, the allegation is that the company knowingly engaged in deceptive acts that precluded the FEC, or the Justice Department, from ascertaining whether they had broken the law. –Bloomberg On Monday, Friedrich raised questions over whether the special counsel's office could prove a key element of their case - saying that it was "hard to see" how allegations of Russian influence were intended to interfere with US government operations vs. simply "confusing voters," reports law.com.
Robert Mueller Reportedly Has Recordings Of Trump Aide Roger Stone Boasting About Coordinating With Wikileaks - Republican operative and longtime Donald Trump ally Roger Stone could expect some tough times ahead.According to CNN, special counsel Robert Mueller has obtained recordings where Stone can be heard boasting about “talking to Trump regularly” early during his 2016 presidential campaign while reportedly also claiming that he should receive “credit” for coordinating with WikiLeaks.WikiLeaks was responsible for releasing the hacked emails from the DNC server back in 2016, which, in retrospect, seems to have had a massive impact on the results of the elections. Stone has maintained that he never shared any information about his correspondence with WikiLeaks with the Trump campaign, but Mueller is looking into the roles played by his aides — conspiracy theorist Jerome Corsi and Randy Credico.Stone knew that WikiLeaks intended to release the hacked information in October of 2016 but claimed he had never shared this information with the Trump campaign, something underlined once again by his attorney Grant Smith. “We have said over and over again that he shared nothing with the campaign because he had nothing to share,” he said.
What To Expect When You’re Expecting a Mueller Report - Once the midterms are past, Americans can resume their reveries about a hypothetical report from the special counsel’s office. There’s no telling how much Robert Mueller knows, but onlookers can speculate about how much the country is likely to find out, and how it’s likely to do so. A Mueller Report? A Rosenstein Report? An Impeachment Report? All three? Although some of the issues raised by these notions are familiar, they’re worth revisiting during this lull of attention to the Mueller investigation, in the context of law and regulation rather than hope and fear, and without the summertime chaff of misfired forecasts. A couple of caveats. First, lots of legal issues remain murky. For instance, Jack Goldsmith has suggested that because of the manner of the appointment, the Justice Department special counsel regulations may apply to Mueller but not to his boss, Deputy Attorney General Rod Rosenstein. That might make it easier for Rosenstein to release information from the investigation. Second, Mueller and his monolithically tight-lipped staff have surprised Americans before. They may do it again. Accordingly, take these predictions, and all others about the Russia investigation, with a grain of salt. That said, here’s my take on the reports that Mueller and Rosenstein may prepare and the odds that the public will see them.
- There will be a Mueller Report. Justice Department regulations require a special counsel, at the end of the investigation, to prepare “a confidential report explaining the prosecution or declination decisions” and submit it to the attorney general—here, because of Attorney General Jeff Sessions’s recusal, Rosenstein.
- The public probably won’t see it. At least not the full, unredacted version. Under the regulations, a special counsel’s final report is not for public release; it’s “a confidential document,” the same as “internal documents relating to any federal criminal investigation.”
- There probably will also be a Rosenstein Report. The regulations require the attorney general to inform the chair and ranking minority members of the House and Senate Committees on the Judiciary when a special counsel has finished the job. If he follows the regulations, Rosenstein won’t provide a full accounting.
- The Rosenstein Report probably will be made public, but it’s not a sure thing. Under the regulations, the attorney general gets to decide whether to release the reports submitted to the judiciary committees. If the Justice Department didn’t release Rosenstein’s report, of course, Congress could do so on its own initiative.
- Rosenstein may be disinclined to disclose much information. “[O]ur default position is that when there’s a Justice Department investigation,” Rosenstein told a Senate hearing in 2017, “we do not discuss it publicly....” Remember, he’s the guy who provided justification for the firing of FBI Director James Comey.
- If there’s an Impeachment Report, it probably will be something different. Neither the Mueller Report nor the Rosenstein Report would seem an apt vehicle for summarizing evidence that may give rise to presidential impeachment. The Mueller Report is likely to have too much detail about prosecutorial decision-making and unindicted wrongdoing, and the Rosenstein Report won’t have much detail at all.
- Mueller won’t prepare an Impeachment Report without Rosenstein’s authorization. The Justice Department regulations require a special counsel to notify the attorney general whenever “significant events” arise in the investigation, ordinarily at least three days in advance.
U.S. Says ‘Others’ Are Under Scrutiny in Cohen Grand Jury Probe The grand jury investigating President Donald Trump’s former lawyer Michael Cohen is also scrutinizing “others” who may not be aware of prosecutors’ interest in them, the U.S. said in a court filing. Prosecutors made the disclosure Thursday in opposing a media request to obtain papers related to the search warrants used in the April 9 raid of Cohen’s home, hotel and business. Federal prosecutors in New York filed a public brief that doesn’t specify who is targeted in the investigation or named in the warrant papers. “Numerous uncharged third parties” are named in the documents, the government said. Protecting their privacy interests make it impractical to release the warrant papers in redacted form, they argued. “The disclosure would almost certainly result in a very public guessing game in which the media and members of the public attempted to guess the identities of the uncharged parties described in the materials -– particularly the campaign finance portions” of the investigation, prosecutors said in the filing. Cohen has spent at least 50 hours meeting with investigators for Special Counsel Robert Mueller, the Manhattan U.S. attorney’s office and the New York state attorney general’s office, according to a person familiar with the matter. Those meetings were first reported by CNN. Cohen pleaded guilty Aug. 21 to five counts of tax evasion, one count of making a false statement to a financial institution and two federal campaign finance violations. Cohen pleaded guilty to his role in hush-money payments made to two women who claimed to have had extramarital affairs with Trump before he ran for president, to keep their stories from becoming public before the 2016 election. Cohen is hoping to receive a recommendation of leniency from federal prosecutors to reduce his potential federal sentence, which is capped at 51 months. He’s currently scheduled for sentencing Dec. 12.
FBI Admits It Used Multiple Spies To Infiltrate Trump Campaign - The Department of Justice admitted in a Friday court filing that the FBI used more than one "Confidential Human Source," (also known as informants, or spies) to infiltrate the Trump campaign through former adviser Carter Page, reports the Daily Caller. “The FBI has protected information that would identify the identities of other confidential sources who provided information or intelligence to the FBI” as well as “information provided by those sources,” wrote David M. Hardy, the head of the FBI’s Record/Information Dissemination Section (RIDS), in court papers submitted Friday. Hardy and Department of Justice (DOJ) attorneys submitted the filings in response to a Freedom of Information Act (FOIA) lawsuit for the FBI’s four applications for Foreign Intelligence Surveillance Act (FISA) warrants against Page. The DOJ released heavily redacted copies of the four FISA warrant applications on June 20, but USA Today reporter Brad Heath has sued for full copies of the documents. -Daily Caller Included in Hardy's declaration is an acknowledgement that the FBI's spies were in addition to the UK's Christopher Steele - a former MI6 operative who assembled the controversial and largely unproven "Steel Dossier" which the DOJ/FBI used to obtain a FISA warrant to spy on Page.
Attorneys for alleged Russian agent Maria Butina accuse government of withholding evidence - Lawyers for alleged Russian agent Maria Butina said in a Monday court filing that the U.S. government is withholding evidence that could help their client. The claim was made in a letter to Assistant U.S. Attorney Erik Kenerson requesting an indexed and detailed list of evidence produced in discovery. Butina has been indicted on charges of conspiracy and acting as an agent of Moscow without notifying the attorney general. The FBI says she cultivated a network of U.S. contacts in order to help advance Russia’s interests politically. Butina’s attorneys Robert Driscoll and Alfred Carry accuse the government suppressing information discoverable under the Brady rule, which requires prosecutors to disclose exculpatory evidence it has to the defense. Driscoll and Carry said the information “would undermine the allegations in the indictment, attack the credibility of the government’s case, impeach government witnesses, and demonstrate that Maria Butina was, in fact, nothing more than a student with lofty aspirations who was acting on her own and not as a foreign agent.” The attorneys said they have sent the government five total requests for the information in August and October, but no response has been forthcoming. “Instead, the government has refused to produce the information sought, stating it ‘cannot confirm or deny,’ its existence,” they wrote. “This position is untenable and tantamount to prosecutorial misconduct.” Butina's attorneys further argued that the National Security Section of the U.S. Attorney’s Office is not immune from disclosing exculpatory information under Brady. “The fact that Maria Butina is Russian does not reduce the government’s Brady obligations,” they said. The U.S. Attorneys Office in D.C. said it typically does not comment on pending cases and has no comment on this matter.
Explosive Device Found in Mailbox at George Soros’s Westchester County Home - NYTimes - The explosive device found in a mailbox at the home of George Soros, the billionaire philanthropist, on Monday afternoon was relatively small, a senior law enforcement official said on Tuesday. The device was “proactively denotated” by bomb squad technicians from the Westchester County Police Department. The bomber’s motive remained unclear. Mr. Soros is a favorite target of right-wing groups. He was not home at the time. The investigation has been taken over by the New York offices of the F.B.I. and the federal Bureau of Alcohol Tobacco and Firearms, said the senior law enforcement official, who spoke on the condition of anonymity because the investigation is open.
Day After Bomb Found at Soros Home, ‘Explosive Devices’ Sent to Clinton, Obama, and CNN — Just 24 hours after a suspected bomb was found in the mailbox of billionaire financier and philanthropist George Soros, the U.S. Secret Service said on Wednesday that it has intercepted two “potential explosive devices” addressed to former Secretary of State Hillary Clinton’s residence in New York and former President Barack Obama’s home in Washington, D.C.“The packages were immediately identified during routine mail screening procedures as potential explosive devices and were appropriately handled as such,” the Secret Service announced in a statement. “The protectees did not receive the packages nor were they at risk of receiving them.”Minutes after the Secret Service made its announcement on the potential explosives targeting Clinton and Obama, news broke that a suspicious package was sent to the Time Warner Center in New York City, the location of CNN‘s headquarters. The Time Warner Center was forced to evacuate. Law enforcement officials are reportedly treating the incidents as if they are all related. While reports initially suggested a suspicious package was also addressed to the White House, Reuters later refuted these reports, citing an official familiar with the situation. UPDATE: Reuters reports, citing a person familiar with the situation, that there was no suspicious package addressed to the White House. https://t.co/dybJYYrl6b Speaking anonymously to the Washington Post, a law enforcement official said the device sent to Clinton’s home in Chappaqua, New York was a “homemade bomb” that is “suspected to be the work of the same person who sent a similar device” to Soros on Tuesday. The Secret Service said it has “initiated a full scope criminal investigation that will leverage all available federal, state, and local resources to determine the source of the packages and identify those responsible.” In a statement on Wednesday, White House Press Secretary Sarah Huckabee Sanders said, “These terrorizing acts are despicable, and anyone responsible will be held accountable to the fullest extent of the law.”
Explosives mailed to Obama, Clintons; Suspicious package sent to CNN - The Secret Service said Wednesday it found two "potential explosive devices" in mail sent to former Secretary of State Hillary Clinton in New York and the home of former President Obama in Washington, D.C. The devices were "immediately identified during routine mail screening procedures" and "were appropriately handled as such," the Secret Service said in a statement. Obama and Clinton "did not receive the packages nor were they at risk of receiving them," according to the agency. Separately, the Time Warner building in New York City was evacuated after reports of a suspicious package to CNN. "We are working with authorities to determine the severity of the situation," CNN president Jeff Zucker said in a memo to staff after his network's anchors had to leave their studio to broadcast from the streets outside their building after an alarm went off on air. "We are also checking all bureaus around the world, out of a complete abundance of caution," Zucker said.
'Explosive devices' sent to Clinton, Obama, CNN, and other US officials - Suspected explosive devices have been sent to top Democrats including Barack Obama and Hillary Clinton, as well as CNN, US officials have said. It comes two days after a pipe bomb was found at the home of liberal philanthropist and financier George Soros in the suburbs of New York City. CNN's New York office was evacuated on Wednesday morning after a suspected bomb was sent to their mailroom. President Donald Trump said that these threats "have no place in America". Speaking at the White House, Mr Trump said that he has been briefed by the FBI and "a major federal investigation is now under way". "The safety of the American people is my highest and absolute priority," he said. When asked about the pattern of these attempted attacks, during a news conference, New York Police Commissioner O'Neill said law enforcement is proactively contacting people to ensure other mail rooms "follow proper protocol". The FBI in New York said they were aware of the suspected packages, and that their Joint Terrorism Task force is aiding in the investigation. New York Mayor Bill de Blasio decried the attempted attacks as "an act of terror attempting to undermine our free press and leaders of this country". "To all public officials, to all partisan affiliations - don't encourage violence, don't encourage hatred, don't encourage attacks on media you can disagree but you have to show respect." The packages were addressed to former President Obama, ex-Secretary Clinton and former CIA Director John Brennan. Additional suspicious packages addressed to Democratic Representative Maxine Waters and former Attorney General Eric Holder are currently being investigated by law enforcement. The packages to Mr Obama and Mrs Clinton were intended to arrive at their residences. FBI Special Agent Bryan Paarman told reporters the device for Mr Brennan, which appeared to be live, had been sent to CNN's mailroom. One of the packages sent had listed Congresswoman Debbie Wasserman Schultz, the former chairwoman of the Democratic National Committee, as the sender. The package intended for Mr Holder was sent to an incorrect address and returned to the congresswoman's office in Sunrise, Florida, US media say.
Donald Trump attacks ‘media hostility’ after mail bombs - President Donald Trump has called on the media "to stop the endless hostility", after suspected explosives were posted to high-profile US figures. He was speaking after parcels were sent to CNN and top Democrats, including Barack Obama and Hillary Clinton. None of the packages exploded. The FBI has launched a hunt for their sender. The president's critics called his comments hypocritical, as he often uses vicious language against his opponents and the press. In scripted remarks at a Wednesday night rally in Wisconsin, the president vowed to catch the perpetrator, while calling on the media to end "constant negative and oftentimes false attacks and stories". Mr Trump also called for more civility in public life, saying: "Those engaged in the political arena must stop treating political opponents as being morally defective. "No one should carelessly compare political opponents to historic villains, which is done often." However, the president made no specific reference to the intended recipients of the packages. Earlier CNN worldwide president Jeff Zucker criticised President Trump and the White House press secretary for not understanding that "words matter". "There is a total and complete lack of understanding at the White House about the seriousness of their continued attacks on the media," he said.
Nation Hypnotized in Horror by Toy Bombs While Killing Civilians With Real Ones - Caitlin Johnstone - — Media headlines have been dominated for the last two days by the news that pipe bombs are being sent to Democratic Party elites and their allies, a list of whom as of this writing consists of Bill and Hillary Clinton, Barack and Michelle Obama, Joe Biden, George Soros, Maxine Waters, Eric Holder, Robert De Niro, and the CNN office (addressed to former CIA Director John Brennan who actually works for NBC).As of this writing nobody has been killed or injured in any way by any of these many explosive devices, and there is as of this writing no publicly available evidence that they were designed to. As of this writing there is no evidence that the devices were intended to do anything other than what they have done: stir up fear and grab headlines. And of course it is a good thing that nobody has been hurt by these devices. It is a good thing that none of America’s political elites were targeted by the sort of explosive device that America drops on people in other countries every single day. You know, the kind that actually explode. Apparently some Acme comedy bombs mailed to a number of extremely rich people, which thankfully did not hurt anybody at all, are infinitely more newsworthy than the real bombs which maim and destroy children in Yemen on an industrial scale. — Craig Murray (@CraigMurrayOrg) October 24, 2018. It is good that Barack Obama was never sent anything resembling the 26,171 bombs that his administration dropped in the final year of his presidency, for example. It is good that neither the first US president to serve every minute of his administration under wartime, nor those who served as part of that administration like Joe Biden or Hillary Clinton, were targeted with the kinds of weapons which were deployed against impoverished people in other nations every single day for all eight years. People would have been killed and badly injured if anyone had been sent anything like those kinds of explosive devices, their bodies ripped to shreds like the countless civilians killed in the airstrikes which resulted from the Obama administration’s expansion of Bush’s so-called “war on terror”. President Trump, whose administration has been dropping even more bombs than its predecessor after expanding the use of drone strikes and peeling back regulations on air strikes designed to protect civilians, was quick to condemn the headline-grabbing pipe bomb campaign which did not hurt anyone whatsoever. “A major federal investigation is now underway,” said the president who continues to assist Saudi Arabia in murdering untold tens of thousands of civilians in Yemen.
Donald Trump: The First U.S. President Who’s Openly Traumatized By ‘Saturday Night Live’ -- The end of summer and arrival of fall not only means cooler temperatures and shorter days; it also means the return of NBC’s long-running “Saturday Night Live,” which launched its 44th season on September 29. For President Donald Trump, a new “SNL” season brings with it the fear of being lampooned by Alec Baldwin—and sure enough, “SNL’s” October 13 show opened with a skit poking fun at Trump’s recent meeting with rapper Kanye West(played by Chris Redd). Baldwin’s impression of Trump has been wildly popular, but the president is not a fan. And Trump is the first president in “SNL’s” 43-year history who has been deeply upset by a humorous impression of him. “SNL’s” lampooning of presidents of the United States is a time-honored tradition going back to 1975,when Chevy Chase (who was part of the show’s original cast along with comic giants like John Belushi, Dan Aykroyd and Gilda Radner) unveiled his impression of President Gerald R. Ford. Chase was unmerciful, portraying Ford as an accident-prone klutz who would leave the Oval Office in shambles. Over the years, “SNL” has lampooned eight different presidents: five Republicans (Ford, Ronald Reagan, George H.W. Bush, Sr., George W. Bush and Trump) and three Democrats (Jimmy Carter, Bill Clinton and Barack Obama). And sometimes, the real-life presidents would show up, such as President George H.W. Bush, Sr. himself appearing and humorously critiquing Carvey’s impression of him. When it comes to mocking presidents, “SNL’s” nonpartisan rule has always been that both Democrats and Republicans are fair game. But Trump is the first president who has gotten into a bitter war of words with the person doing an impression of him. Showing how thin-skinned he is, Trump (who hosted “SNL” in 2015) has repeatedly attacked Baldwin on Twitter. On October 16, 2016, Trump posted, “Watched Saturday Night Live hit job on me. Time to retire the boring and unfunny show. Alec Baldwin portrayal stinks. Media rigging election!”
Survey Reveals What Really Scares Americans- #1 On The List May Surprise You - Every year, Chapman University conducts a Survey of American Fears. The annual survey provides an in-depth examination into the concerns of average Americans, tracking changes and trends over the years. The survey asks participants about topics including government, health, environmental concerns, disaster preparedness, the paranormal, and personal anxieties.What’s the number one thing Americans fear? For the fourth year in a row, that dishonor goes to government corruption. That fear far exceeds any other that was asked about in the survey. In 2018, 73.6% said they fear corrupt government officials. In 2017, it was 74.5%, and in 2016, 60.6%. “It is worth noting that the fears regarding corruption and the environment have increased significantly following the election of President Trump in 2016 and all top 10 fears continue to reflect topics often discussed in the media,” said Christopher Bader, Ph.D., professor of sociology. Pollution of oceans, rivers, and lakes, polluted drinking water, money worries, and loss of loved ones also are of high concern. Here are some of the other fears Americans have:
- Cyber-terrorism: 52.5%
- The US being involved in another world war: 51.6%
- Islamic extremists: 49.3%
- White supremacists: 49.3%
- Economic/financial collapse: 49.2%
- Identify theft: 46.6%
- Corporate tracking of personal data: 46.3%
- Government tracking of personal data: 46%
- Widespread civil unrest: 43%
- Nuclear weapons attack: 42.9%
- Random mass shooting: 41.5%
- The collapse of the electrical grid: 39%
- Pandemic or major epidemic: 38.6%
- Government restrictions on firearms and ammunition: 37.8%
- Nuclear accident/meltdown: 36%
For the full list, click here.
Facebook Erases Hundreds of Alternative Media Pages in Mass Purge -- Jerri-lynn Scofield:This Real News Network segment with journalist Max Blumenthal and EFF’s David Greene discusses Facebook’s new practice of erasing popular alternative media pages that had millions of likes and suspending anti-war and anti-police brutality accounts, in coordination with Twitter.
Where Does The Latest Social Media Purge Leave The State Of Social Discourse- Disobedient Media previously reported the tightening stranglehold of censorship across social media. Unfortunately, events that have taken place since the publication of this writer's opinion that Julian Assange was the first domino to fall in a series of increasingly draconian censorship measures have far exceeded even this author's worst expectations. Before we discuss the details of the latest social media purge, though, we ask: Is the unabashed, coordinated censorship of Twitter, Facebook, and other social media platforms an illegal affront to freedom of speech?In the case of Twitter, at least, we do appear to have an affirmative answer to the question. As CNBC reported earlier this year, a Federal judge ruled that Donald Trump could not legally block Twitter users. The judgment in effect defined the platform as a "public forum" which may be regulated by government to defend First Amendment-protected free speech. CNBCwrote:"Judge Naomi Reice Buchwald said in her ruling that Trump is violating the U.S. Constitution by preventing certain Americans from viewing his tweets on @realDonaldTrump.The social media platform, Buchwald said, is a "designated public forum" from which Trump cannot exclude individual plaintiffs. She rejected an argument by the Justice Department that the president had a right to block Twitter followers because of his "associational freedoms." [Emphasis added]Buchwald's ruling states in part: "Our inquiry into whether the speech at issue is protected by the First Amendment is straightforward. The individual plaintiffs seek to engage in political speech, Stip. 46-52, and such “speech on matters of public concern” “fall within the core of First Amendment protection,” Engquist v. Ore. Dep’t of Agric., 553 U.S. 591, 600... We readily conclude the speech in which individual plaintiffs seek to engage is protected speech."
The New Social Media- Alternatives To Facebook, YouTube, Twitter, And Other Big Tech Platforms - Lately, I’ve written a lot about the alternative media purge and how Big Tech social media platforms are attempting to control the narrative, the elections, and public perception through censorship and financial blacklisting. Lots of people are ready to leave websites like Facebook, Twitter, and YouTube for less-censored pastures. But what are the social media alternatives that are currently available? Before we get into the alternatives, please understand that all of them will start small. None of them will be able to take on Big Tech without a lot of help and support. We’ve gotten used to free social media because the companies with whom we’ve dealt have virtually raped us, reading our so-called “private” messages, and pillaging our date to sell to the highest bidders. So really, it isn’t that free after all.You probably won’t find your parents, your best friend from kindergarten, and your Aunt Suzie on these platforms – not yet, anyway. But what you WILL be able to do is speak without fear of censorship. You’ll be able to find your favorite alternative media sources there and find answers that simply aren’t supported by the mainstream. The only way to change this dystopian atmosphere is to actually make changes ourselves. Go where the freedom is!
Facebook Censorship of Alternative Media ‘Just the Beginning,’ Warns Top Neocon Insider - This October, Facebook and Twitter deleted the accounts of hundreds of users, including many alternative media outlets maintained by American users. Among those wiped out in the coordinated purge were popular sites that scrutinized police brutality and U.S. interventionism, like The Free Thought Project, Anti-Media, and Cop Block, along with the pages of journalists like Rachel Blevins.Facebook claimed that these pages had “broken our rules against spam and coordinated inauthentic behavior.” However, sites like The Free Thought Project were verified by Facebook and widely recognized as legitimate sources of news and opinion. John Vibes, an independent reporter who contributed to Free Thought, accused Facebook of “favoring mainstream sources and silencing alternative voices.”In comments published here for the first time, a neoconservative Washington insider has apparently claimed a degree of credit for the recent purge — and promised more takedowns in the near future.“Russia, China, and other foreign states take advantage of our open political system,” remarked Jamie Fly, a senior fellow and director of the Asia program at the influential think tank the German Marshall Fund, which is funded by the U.S. government and NATO. “They can invent stories that get repeated and spread through different sites. So we are just starting to push back. Just this last week Facebook began starting to take down sites. So this is just the beginning.”Fly went on to complain that “all you need is an email” to set up a Facebook or Twitter account, lamenting the sites’ accessibility to members of the general public. He predicted a long struggle on a global scale to fix the situation, and pointed out that to do so would require constant vigilance. Fly made these stunning comments to Jeb Sprague, who is a visiting faculty in sociology at the University of California-Santa Barbara and co-author of this article.
Facebook Fined $645K For Its Role In The “Serious” Cambridge Analytica Data Breach -- Facebook has been fined £500,000 ($645,000) in the UK as a result of its role in the Cambridge Analytica scandal. The social media platform was fined by the UK’s Information Commissioner’s Office for the “serious” data breach, which affected over 80M users.The ICO’s investigation found that as a result of Facebook allowing personal data to be given to app developers, Aleksandr Kogan and his company GSR was able to harvest the data with some of this information shared with organizations such as Cambridge Analytica parent company SCL.It noted that event after the misuse of the data was discovered in December 2015, Facebook “did not do enough” to ensure those who continued to hold it had taken adequate and timely remedial action.The fine was served under the Data Protection Act 1998. However, this was replaced earlier this year by an updated version of this law, which alongside the EU’s General Data Protection Regulation, meaning that Facebook could have been served a maximum fine of £17M or 4% of global turnover.
This AI can search for people by height, gender, and clothing in surveillance videos -A team of AI researchers from India developed a tool to search for people in surveillance footage by height, clothing color, and gender. It’s like a search engine that can find people in a video. The scientists used deep learning (and Microsoft’s COCO dataset) to train a convolutional neural network (CNN) how to recognize certain human features, called soft biometrics, using computer vision.Basically, you can tell this AI some details about the person you’re looking for and it’ll scour whatever video you give it. For example, a request for “females wearing red shirts who are 153 cm tall” would, potentially, narrow down an entire video clip to just frames featuring people who meet that criteria. According to researchers, the algorithm “correctly recovers 28 persons out of 41 in a very challenging dataset with soft biometric attributes.” Currently it only searches by height, torso (clothing) color, and gender. At first glance the idea of identifying people in videos who meet relatively vague descriptions, and with accuracy that’s a little better than half, doesn’t sound like an important technological advance. But this early work shows plenty of potential. It’s worth asking what it would mean if accuracy could be improved beyond human capabilities. This experimental CNN would be perfectly suited for use cases where we need to put together a timeline surrounding a specific individual, based on available historic surveillance footage.
Now Apps Can Track You Even After You Uninstall Them - If it seems as though the app you deleted last week is suddenly popping up everywhere, it may not be mere coincidence. Companies that cater to app makers have found ways to game both iOS and Android, enabling them to figure out which users have uninstalled a given piece of software lately—and making it easy to pelt the departed with ads aimed at winning them back. Adjust, AppsFlyer, MoEngage, Localytics, and CleverTap are among the companies that offer uninstall trackers, usually as part of a broader set of developer tools. Their customers include T-Mobile US, Spotify Technology, and Yelp. (And Bloomberg Businessweek parent Bloomberg LP, which uses Localytics.) Critics say they’re a fresh reason to reassess online privacy rights and limit what companies can do with user data. “Most tech companies are not giving people nuanced privacy choices, if they give them choices at all,” says Jeremy Gillula, tech policy director at the Electronic Frontier Foundation, a privacy advocate. Some providers say these tracking tools are meant to measure user reaction to app updates and other changes. Jude McColgan, chief executive officer of Boston’s Localytics, says he hasn’t seen clients use the technology to target former users with ads. Ehren Maedge, vice president for marketing and sales at MoEngage Inc. in San Francisco, says it’s up to the app makers not to do so. “The dialogue is between our customers and their end users,” he says. “If they violate users’ trust, it’s not going to go well for them.” Adjust, AppsFlyer, and CleverTap didn’t respond to requests for comment, nor did T-Mobile, Spotify, or Yelp.
The Real Reason Why We’re So Crazy and Miserable All the Time - Caitlin Johnstone — We are surrounded by screens full of voices that are always lying to us, and experts wonder why we’re so crazy and miserable all the time. The screens tell us, “This is a perfectly normal and sane way of doing things. It is perfectly normal and sane to strip the earth bare and poison the air and the water in an economic system which requires infinite growth on a finite planet. People who say otherwise are raving lunatics!” And the social engineers wonder why there’s increasing disaffection and alienation among the populace. The screens tell us, “Just spend your time in this world turning the gears of the machine and you will be happy. The machine is your friend. The machine takes care of you. Work hard pulling its levers and greasing its cogs until you are old and you will gain satisfaction,” and then they wonder why we’re all gobbling up antidepressants like candy. The screens tell us, “We need to drop explosives on Nation X because they need Freedom and Democracy™. We know we said that about Nation Y and Nation Z and that went terribly wrong, but that’s because it wasn’t managed properly. Trust that it is good and proper for the citizens of Nation X to be killed with bombs and bullets,” and then they wonder why people keep snapping and committing mass shootings. The screens tell us, “You are crazy and stupid if you want a functioning healthcare system. Are you trying to put our billionaires and military out of business?” and then they wonder why people are becoming paranoid and angry. The screens tell us, “Look at that gibbering maniac trying to get a third party up and running in the most powerful nation in the world! Only someone who is deeply awful and defective would believe that the two party system isn’t serving us,” and they wonder why everyone feels disempowered and unheard. The screens tell us, “Of course this is the way things are; it’s the only way things could ever be. Anyone who would try to change any part of this is either mentally ill or a Russian propagandist,” and they wonder why people shut down and numb themselves with opiates. The screens tell us, “Everything is great. Everyone is doing fine. Everyone is happy. Look how happy everyone is on this sitcom. If you aren’t happy like that, it’s not because of the machine, it’s because of you. People need to be protected from your insanity. You mustn’t be allowed on any screens. You need to be silenced on social media. Trust us. Don’t trust yourself. Don’t trust that growing, gnawing sense that everything is fake and everything you’ve been taught is a lie. We have never lied to you. We have never been caught red-handed deceiving you and then acted like nothing happened. We have never gaslit you. You are misremembering things because you are confused. Shut up. You are dangerous. Shut up. You are foolish. Shut up. You are insane. The machine is sanity. The machine is freedom. Everyone is equal here. Everyone matters. Everyone gets a voice. Except you.”
For Next Weapon in Anti-Protest Arsenal, US Military Building Plasma Gun Capable of Vaporizing Human Flesh - — From wood batons to stun batons to water cannons to sound cannons to. . . frickin’ plasma lasers that can “vaporize” your skin? Recent reporting out of the Pentagon reveals that the U.S. military is working on perfecting what they called a Scalable Compact Ultra-short Pulse Laser System (SCUPLS)—or plasma gun, for short—intended for mounting on a truck or a tank.Billed as the military’s latest “crowd control” technology, what this has typically meant is a new “non-lethal” weapon designed for use by militaries or police forces against unruly demonstrators or those standing against powerful state actors or corporate forces. According to U.S. government documents, the aim of the ongoing project is to develop “a lightweight and energy efficient next-generation Ultra-Short Pulse Laser (USPL) system that can produce sustainable and controllable plasma at range capable of inducing a full spectrum of scalable non-lethal effects.” As a so-called “scalable” weapon, it will be able to shoot not only piercing sounds, but also “burn off” or “vaporize” human skin, and ultimately could be used to kill its target. As the Daily Mail recently explained, the weapon will be able to “produce a range of effects”:
- At the lowest setting, the weapon can produce speech, and it will be able to warn people up to 3,200 feet (1,000m) away by delivering voice messages.
- When it gets closer, the weapon will deliver a ‘Flash-bang effect’ by sending an ‘acoustic blast of ~ 165+ dB at minimum distance of 100 meters’.
- It will also be able to send a ‘Flash blind effects (6-8 million candela)’ momentarily blinding people at minimum distance of 100 meters
- The highest setting of the current model will let loose ‘Full scalable thermal ablative effects’ through common natural clothing (i.e., fabric, denim, leather, etc.) at minimum distance of 100 meters. This would painfully vaporize the outer layer of skin – rather than burning it will be turned into gas.
Saudi Crisis Shows Wall Street Struggle Between Ethics and Cash - As chief executive of the world’s biggest asset manager, Larry Fink began the year with a call to the thousands of companies that the firm holds stakes in: Show how they make a “positive contribution to society.” Now Fink’s BlackRock Inc., overseeing more than $6 trillion of other people’s money, is facing a comparable challenge, stuck between conscience and the implacable demands of the bottom line.While BlackRock and the rest of the financial industry have targeted Saudi Arabia as a massive revenue generator, they’ve also been compelled to act in the wake of reports that U.S.-based dissident journalist Jamal Khashoggi was allegedly killed inside the Saudi consulate in Istanbul.“The world for businesses is not black and white,” Fink said in an interview on Tuesday. If history is any guide, human rights have never been too persuasive in Wall Street’s calculus. In Saudi Arabia, the response by industry leaders including Fink, Blackstone Group’s Steve Schwarzman and JPMorgan Chase’s Jamie Dimon has been to pull out of an economic summit in Riyadh next week, an event meant to showcase the reform efforts of Crown Prince Mohammed bin Salman. But many banks are still sending delegations in the hopes of minimizing the damage to ties to the House of Saud. HSBC Holdings, Societe Generale and Credit Suisse Group planned to send senior investment bankers, even as their CEOs backed out. “It’s easy to pull out of the conference because it’s just a conference, and it’s a nice statement,” said John Wilson, head of research and corporate governance at Cornerstone Capital Group. But bigger questions remain, he added. “Speaking strictly from a values perspective, you want to avoid complicity in whatever human rights violations are going on.”
Report: Cryptocurrency hackers earned $20M with 51-percent attacks in 2018 - Powerful attacks on blockchains are increasing. So far this year, hackers have effectively executed a minimum of five separate “51-percent attacks” on cryptocurrency projects, with profits amounting to almost $20 million. This represents a remarkable increase in success, after renowned cybersecurity firm Group-IB recorded no completed 51-percent attacks last year.Group-IB has just released the full version of its annual report on trends in high-tech crime, which it has shared with Hard Fork. It showed that in 2018, hackers have pocketed $19.5 million worth of cryptocurrency and caused havoc for fledgling blockchains. The report also revealed cryptocurrency hackers went on a veritable rampage between April and June of this year. 51% attacks guarantee free money A 51-percent attack consists of (as the name implies) an attacker taking control over at least 51 percent of the overall mining power of a Proof-of-Work blockchain, which known as its hashrate. “They can be either carried out by one miner with a large number of computers or a group of miners forming a mining pool,” Group-IB explains. “Control over 51-precent of the network power itself is not necessarily an attack — unless there has been intentional use of this advantage.” An attacker controlling a majority of a blockchain’s hashrate can freeze the system, stop transaction verification, suspend mining, prevent other miners from verifying transactions, and the ultimate perk: double spending. Double spending involves the creation of a hidden, alternative blockchain that 51-percenters can use to verify their own (fake) transactions. This often leads to hackers creating of large amounts of cryptocurrency out of thin air.
Stocks Tumble; S&P Touches Lowest Level Since May: Markets Wrap U.S. stocks slumped, with the Dow Jones Industrial Average tumbling more than 500 points, after results from Caterpillar and 3M added to concern that corporate profit growth has peaked. The yen, gold and Treasuries all rallied on demand for haven assets. The Nasdaq Composite Index fell as much as 2.8 percent, taking the benchmark more than 10 percent below its August record as it flirts with a correction. Trading volume was 75 percent higher than average for the Dow, and about 40 percent above the midday figure for the S&P 500 Index. The Russell 2000 Index turned negative for the year as investors grow concerned that the trade war and rising interest rates have put an end to runaway expansion of corporate profits. “The general sentiment among investors is they’ve gotten accustomed to having stable markets so when volatility rears its ugly head, they worry about it a lot more,” said Andy Kapyrin, director of research at RegentAtlantic, which has $3.7 billion in assets under management. “Investors risk appetites have changed. It’s causing more angst." Caterpillar sank as much as 10 percent after flagging concern over rising materials costs, while 3M dropped more than 8 percent after cutting its forecast. The Dow pared losses, aided by positive earnings results from other index members. Shares of McDonald’s and Verizon rallied after the companies beat estimates. Energy and tech companies were the biggest losers in the S&P. The Stoxx Europe 600 Index slid to the lowest level since December 2016 and Asian equities teetered on the verge of a bear market. Some of the steepest losses were in Japan, Hong Kong and China, where shares had posted the biggest jump in more than two years a day earlier. Disappointing earnings from Renault and some European tech companies added to the pain in Europe. Investor nerves are on full display in the flight to quality beginning to take shape after global equities tried and failed to stem this month’s declines. U.S. growth data later in the week as well as earnings from companies including Amazon, Alphabet, Microsoft and Intel could be key to how far much further the drop will go. In the meantime, uncertainty over the death of a Saudi journalist, Italy’s budget and Brexit are among the factors weighing on sentiment. Equities failed to get any reprieve after China announced fresh measures to ease the funding strains of private companies, as top officials seek to restore confidence in the world’s second-largest economy.
Bank of America- History Says We've Got 21 Months - At the end of May, Bank of America caused a stir when it announced that another of its proprietary "guaranteed bear market" indicators created by the bank's quant team had been tripped, bringing the total to 13, and up from 11 at the end of January.Fast forward nearly half a year forward, when overnight Bank of America provided an update on its bear market checklist, noting that of the signposts that have occurred ahead of bear markets, 14 have been triggered (74%) at this point. Specifically, the VIX rose above 20, and a net 20% of responders in Conference Board's Consumer Confidence Survey expect stocks to be higher, causing these two signposts to flip to positive. At the same time, another trigger was "switched off" as trailing 12 month S&P 500 total returns dropped below 11%.As the bank further adds, going forward, factors to watch for are deteriorating credit conditions and improving investor sentiment, a contrarian indicator.This is how Bank of America itself previously explained this particular creeping "very late cycle" indicator:we compiled a list of bear market signposts that generally have occurred ahead of bear markets. No single indicator is perfect, and in this cycle, several will undoubtedly lag or not occur at all. But while single indicators may not be useful for market timing, they can be viewed as conservative preconditions for a bear market.Today, 14 of 19 (74%) have been triggered, or in other words, we are now more than two-thirds of the way to the next crash/recession/depression. There is a (somewhat forced) silver lining:While around 2/3 of them have triggered so far, 80% or more were triggered before previous market peaksWhich means that the tripping of just one more indicator would be a "guaranteed" trigger of Bank of America's bear market signal. Below is the full breakdown of bear-market signposts as of Sunday night:
Markets Edgy Over China, Italy Budget Staredown, Saudis, Brexit, Too Much Private Debt, Strained Valuations - Yves Smith - The cliche is that the markets climb a wall of worry. But sometimes worry wins, and for good reasons. After a sharp two day rally, Chinese stocks swooned, triggering global stock and stock futures market selloffs. There are plenty of reasons for fund managers to think of lightening up on risky assets, such as nosebleed valuations across all major asset classes in a very long-in-tooth “recovery” while central banks are tightening (as in the US) or at least no longer engaging in monetary stimulus. And that’s before factoring in that private debt levels are high around the world and all sorts of authoritative bodies like the IMF and Bank of International Settlements have talking up crisis risk, which is out of character for them. So that would be enough to make money managers trigger happy, even before getting to the fact that it’s October. The overnight news reports suggest that so the spectacle of so many serious-looking situations precipitated the selling. In China, even though the government launched a new stimulus program, asset holders fret that it won’t be enough to compensate for the damage that a US-China trade war could inflict. And recall that outsiders have ben concerned about a crisis for years in the face of massive investments in un or underproductive assets and more and more debt needed to produce an additional dollar of GDP growth. From the Financial Times: China’s main equities indices went into sudden reverse on concern that government policies to boost its economy will be offset by the impact of its trade dispute with the US. Mainland China’s CSI 300 closed down 2.7 per cent, with declines for every sector on the market. It represented a sharp reversal from Monday’s rally of over 4 per cent…. “The geopolitical whipsaw just keeps on coming . . . and its getting harder and harder to keep track of all of the issues that are out there now,” said Brad Bechtel, managing director at Jefferies. “Talk from Steven Mnuchin, the US Treasury secretary, that he might be open to changing the way the US evaluates currency manipulators is not helping the cause for China. The US keeps ratcheting up the pressure and China keeps responding any way it can. I don’t see this dynamic changing anytime soon.” Analysis from Société Générale said that while Beijing’s efforts to boost confidence — which included speeches by top officials, tax cuts and funding for local governments — were “striking the right tone”, China’s falling current account balance meant more changes will be needed. As of this hour, the DAX was down by 2% and US stock futures were off by roughy 1%.
This Stock Market Is “Gradually” Rotting Under the Covers - Wolf Richter- And some of the rot is oozing to the surface. The sell-off on Tuesday didn’t weigh on the scale of sell-offs: The Dow, the S&P 500, and the Nasdaq were down only around 0.5%, give or take a little. But in the broader sense, declines of individual stocks were widespread, and this situation has been going on for months.On the surface, it still looks hunky-dory. For the 52-week period, the Dow is up 7.5%, the S&P 500 is up 6.7%, and the Nasdaq is up 12.7%.Yet, even as major indices rose so nicely over the 52-week period, 496 individual stocks of those on the New York Stock Exchange dropped to new 52-week lows today, while only 8 reached 52-week highs. How many stocks are listed or traded on the NYSE depends on who you ask. The WSJ data sectionshows 2,080; others go over 2,400. If there are 2,080 stocks actively traded on the NYSE, this means near a quarter hit new 52-week lows today. And according to my own math, 176 stocks on the NYSE have by now plunged at least 50% from their 52-week highs.
Pension, Retirement Crisis Is Becoming An Underfunded Tsunami , SEC Warns --- We have detailed this problem over the past 3-4 years warning people about how bad the pensions around the nation have become nothing more than another ponzi scheme. Most, if not all, state, local and federal pension programs are underfunded by 40% or more. What we stated a mere two months ago, in September 2018! The steam that is building began in earnest in 2012 and has been picking up speed ever since. Look no further than some of the recent events we have documented time and again – Detroit, CALPers, Jeremy Stein, Teamsters and Dallas Pension Fund. All of these events have taken place in less than five years. What will the next four-plus years bring? How much longer should one sit on their hands and watch as thousands upon thousands of people either have retirement stolen or placed on lock-down as is the case with the Dallas Police Pension fund? We have studied, researched and written about this for well over four years. Harry Markopolous, in 2011, tried to warn us about the ongoing theft, within the pension funds, on a daily basis by the banking cabal – link. CALPers pension program is north of 50% underfunded and losing a little more each and every quarter. – link. These are merely two of the articles that paint a picture of a tsunami of pension bankruptcies in the near future. That’s a lot of people around the country that are directly impacted by unfunded, underfunded or otherwise completely insolvent pension funds. It appears either the Forbes writer Elizabeth Bauer or SEC Commissioner Kara Stein read the article we published in September as they are now using the exact same language we used in September – ‘tsunami’ of pension failures. SEC Commissioner Warns: A Retirement Crisis ‘Tsunami’ Is Approaching Commissioner Kara M. Stein spoke to the Brookings Institution on Tuesday, giving a talk titled “The New American Dream: Retirement Security.” Here’s what she had to say: Since World War II, Americans have planned their retirements around the expectation of combining a pension, Social Security benefits, and personal savings to provide sufficient income for their golden years.Due to a number of factors, the financial health of the Social Security trust fund has been declining. According to the 2018 Trustees Report on Social Security, the fund will be depleted by 2034.That is only 16 years away. At the same time, the availability of employer-provided pension plans has also been declining. Few private sector workers today have access to a pension, and many public sector pension plans are facing severe financial problems.
How Wall Street Drove Public Pensions Into Crisis and Pocketed Billions in Fees - Thousands of Kentucky public school teachers swarmed the state Capitol earlier this year, angry not about low salaries, but about their shrinking pensions. Among their concerns: the high portion of their money that has ended up in the hands of Wall Street in opaque, high-cost products that seem to benefit no one aside from the people who sold them. Rising pension costs helped to send teachers in Colorado into the streets in protest a few weeks later. In the last year, pension woes have also prompted teachers in Ohio and Oklahoma to march. And police, firefighters, and other public employees in Michigan have been staging protests since at least 2016 to preserve their public pensions, more than one-third of which is invested in “alternatives”: private equity, hedge funds, commodities, distressed debt, and other opaque Wall Street investment vehicles. A “Wall Street coup” — that’s how pension expert Edward “Ted” Siedle describes it. Public pensions across the country now squander tens of billions of dollars each year on risky, often poor-performing alternative investments — money public pensions can ill afford to waste. For all the talk of insolvency, $4 trillion now sits in the coffers of the country’s public pensions. It’s a giant pile of money of intense interest to Wall Street — one generally overseen by boards stocked with laypeople, often political appointees. “Time and again,” Siedle has written, “hucksters successfully pull the wool over these boards’ eyes.” Under ERISA, the Employee Retirement Income Security Act, companies are required to adequately fund their pensions and follow what was then called the “prudent man” rule, which barred those in charge from putting pension dollars into overly risky investments. Except Congress left out public employees entirely — with a yawning loophole that granted an exemption to public pensions. ERISA expressly exempts public pensions operated by state and local governments — the plans that provide for the country’s teachers, firefighters, police officers, and librarians in their retirement. Forty-four years after the passage of ERISA, these public workers comprise the majority of active employees still contributing to pension plans. And they have been left largely unprotected. Siedle calls it “the loophole that is swallowing America.”
How Private Equity Bankrupted Seven Major Grocery Chains for Fun and Profit - Yves Smith - Eileen Appelbaum and Rosemary Batt explain in a new article scheduled for American Prospect, Private Equity Pillage: Grocery Stores and Workers at Risk, the seven large grocery chains that filed for bankruptcy since 2015 all were victims of private equity firms overloading them with debt, which in turn kept them from investing in updating stores and their product lines. The bankruptcy of Southeastern (SE) Grocers, owned by private equity firm Lone Star Funds, provides a classic example of how PE drives companies into bankruptcy while extracting millions of dollars for themselves and their investors. It is the owner of well-known brands BI-LO, Fresco y Más, Harvey’s Supermarket, and Winn-Dixie, located in seven southeastern states… Lone Star first bought out the predecessor of SE Grocers, BI-LO, in 2005 in a leveraged buyout and took the company private. It ran the company into bankruptcy by 2009 and emerged from Chapter 11 in 2010. It tried to sell the chain to publicly-traded Kroger and employee-owned Publix Super Markets, but they were not interested. After 6 years of ownership, Lone Star was overdue in paying promised outsized returns to its investors. So it executed a ‘dividend recapitalization” – meaning that it loaded the company with even more debt and used the debt to pay dividends to itself and its investors. Between 2011 and 2013, it paid itself and its investors $838 million in dividends – money that could have been used to make the stores more competitive. The struggling company, meanwhile, became saddled with interest payments on these loans. One loan of $475 million used to pay dividends required SE Grocers to pay $205 million in interest between 2014 and 2018. Lone Star’s owner, John Grayken, is a billionaire who famously renounced his U.S. citizenship to avoid paying taxes. As if this wasn’t enough debt, Lone Star sent SE Grocers on a buying spree rather than invest in existing stores. In 2012, it bought out Winn-Dixie for $590 million, adding 660 stores and 63,000 employees. In 2013, it added another 165 stores (Harveys, Sweetbay, and Reids) in an LBO worth $265 million, as well as 22 Pigggly Wiggly stores in an LBO worth $35 million. Lone Star renamed the company ‘Southeastern Grocers’. By 2014, the company had an unsustainable debt overhang of $1.32 billion due to dividend payments and leveraged buyouts. Looking for cash, the company sold the real estate of a distribution center for $100 million and several stores for $45 million, and then required the affected entities to pay rent on the buildings they used to own – further undermining their financial stability – referred to in financial parlance as a ‘sale/leaseback.’ In need of more cash, Lone Star managed to obtain a series of revolving credit loans and debt financings between 2014 and 2017, but the loans weren’t enough to keep it going.
Tax Reform and U.S. Effective Profit Taxes: From Low to Lower - NY Fed- The Tax Cuts and Jobs Act (TCJA) reduced the federal corporate profit tax rate from 35 percent to 21 percent. Adding in state profit taxes, the overall U.S. tax rate went from 39 percent, one of the highest rates in the world, to 26 percent, about the average rate abroad. The implications of the new law for U.S. competitiveness depend on how these statutory tax rates compare with the actual rates faced by U.S. and foreign companies. To address this question, this post presents new evidence on tax payments as a share of profits, as well as analytical measures of tax impacts on profitability. We find that the U.S. effective tax rate was already below the average rate abroad prior to enactment of the TCJA, and that it is now well below the rate in most countries.
California's Unconstitutional Gender Quotas for Corporate Boards - California recently passed Senate Bill 826, a law requiring all publicly held corporations based in the state to have a minimum number of women on their boards. A corporation with four or fewer directors must have at least one woman on its board. If the board has five members, at least two women must be on it. If it has six or more, there must be at least three women. In his official signing statement, California Governor Jerry Brown praised the law, but also noted that "serious legal concerns have been raised" and that "these potential flaws may... prove fatal to its ultimate implementation." Governor Brown is right to worry. The law is clearly unconstitutional under current Supreme Court precedent. If it survives the nearly inevitable legal challenges, it is also likely to cause more harm than good. The Supreme Court has long held that laws that discriminate on the basis of sex are subject to heightened "intermediate scrutiny" under the Equal Protection Clause of the Fourteenth Amendment. This test requires all such laws to be "substantially related" to an "important" state interest. In other words, the law must serve an important objective and there has to be a close fit between the discriminatory policy and the interest it supposedly advances, so as to prevent the state from engaging in any more sex discrimination than is actually needed to achieve its "important" objective. In United States v. Virginia (1996), the Court arguably tightened up the standard still further, emphasizing that sex-discriminatory laws must have an "exceedingly persuasive justification." It is important to emphasize that this kind of heightened scrutiny applies even if the law is well-intentioned and not motivated invidious prejudice or by a desire to subordinate one gender to the other. Indeed, Indeed, Craig v. Boren (1976), the case where the Supreme Court first ruled that gender classifications are subject to heightened judicial scrutiny struck down an Oklahoma law that forbade 18-20 year old men, but not 18-20 year old women to buy 3.2% beer. No one could plausibly claim that the Oklahoma state legislature in the 1970s was some kind of matriarchy seeking to persecute men. But the law was invalidated anyway.
Volcker 2.0 unites banks and their critics in opposition — The industry has eagerly awaited revisions to the Volcker Rule, but so far regulators' proposal to simplify the compliance process is getting panned both by critics of the proprietary trading ban and by its most ardent supporters. Bankers and industry representatives argue in comments letters that a set of changes unveiled in May by five federal agencies may do more harm than good, particularly a new proposed definition of prohibited trades that they say could eliminate positions not intended to be part of the ban. "We appreciate and support the ... goal of simplifying compliance" but "we are concerned that aspects of the proposal would add new complexity and compliance burdens that do not have a commensurate policy benefit, which would lead to unnecessary impairment of financial intermediation," wrote Kevin Fromer, the president and CEO of the Financial Services Forum, in a comment letter to the regulators. The focus of industry criticism is a proposed alternative to how regulators identify short-term trades banned by the rule. Under the current regulation, positions held for less than 60 days are presumed to be part of a bank's "trading account" and are therefore prohibited. Yet banks can attempt to rebut that determination. But the regulators' definition for short-term intent has been seen as unwieldy, leading them to propose replacing it with a new category that applies the ban to accounts where trading instruments are recorded at fair value. However, commenters said the so-called "accounting prong" would only exacerbate the problem. "The Accounting Prong would expand the 'trading account' well beyond what is contemplated by the statute or established in the Final Rule," wrote Gregg Rozansky, senior vice president and senior associate general counsel for the Bank Policy Institute. "It would also import accounting standards that have no relation to the Volcker Rule's objectives and are developed by an organization that has no bank regulatory focus, and has discretion to change those standards at any time without needing to consider how the changes could affect the Volcker Rule's definition of 'trading account.'" Yet on the other side, investor and consumer advocates — who had hailed the ban, first proposed by former Federal Reserve Board Chairman Paul Volcker, when it was added to the Dodd-Frank Act — as well as some Democratic lawmakers see the effort to ease banks' compliance burden as a capitulation. “The New Volcker Rule proposal … is premised on an overly optimistic view of the compliance culture and risk management incentives of banking entities," wrote Dennis Kelleher, president and CEO of Better Markets, and Joseph Cisewski, special derivatives consultant and special counsel for the group. They added that the proposed plan "impedes effective supervision and enforcement of… the Final Volcker Rule, and is based on unsupported assertions of banking entities subject to the trading prohibitions and restrictions.” The American Bankers Association recommended that the accounting prong be abandoned and that the regulators instead focus on revising the current "rebuttable presumption."
Fed board to consider proposed revamp of big-bank supervision - —The Federal Reserve Board will release a proposed framework next week on how it will supervise large banks following enactment of a recent law that provided some institutions with regulatory relief. The reg relief bill passed in May raised the Dodd-Frank Act threshold for banks facing enhanced prudential standards from $50 billion to $250 billion of assets. The Fed retained discretion to still apply standards to certain banks above $100 billion, and bankers have awaited guidance on how the central bank will exercise that discretion. The proposal before the Fed board at an open meeting Oct. 31 is expected to address supervisory standards for banks with between $100 and $250 billion of assets. In July, Fed Vice Chairman for Supervision Randal Quarles suggested that banks falling within the midsize range could see less frequent stress tests and a break from filing resolution plans. Bloomberg News The Fed is also expected to consider tailoring certain standards for institutions above $250 billion of assets that do not hold the designation of "global systemically important banks" — or G-SIBs. In July, Fed Vice Chairman for Supervision Randal Quarles suggested that banks falling within the midsize range could see less frequent stress tests and a break from filing resolution plans. Quarles also said that some large banks that exceed assets of $250 billion should be provided some regulatory relief to differentiate them from the eight banks that are considered G-SIBs. Meanwhile, the Fed is also being urged to cut the G-SIB surcharge, an additional capital charge for the largest banks based on their reliance on wholesale funding. In July, a group of Republicans on the House Financial Services Committee sent a letter to Quarles urging him to recalibrate the G-SIB surcharge. However, also in July, Fed Chairman Jerome Powell told the committee that he is “not really seeing that case is made at this point” that any such relief is warranted for the nation’s largest banks, signaling that a G-SIB surcharge may not be among the regulator’s top priorities. Subscribe Now
Former Fed chair warns of new financial crisis -- In the midst of increasing volatility on global financial markets, the former chair of the US Federal Reserve, Janet Yellen, has pointed to a potential source of major instability with “systemic risks.”In an interview with the Financial Times to be published today, Yellen said there had been a “huge deterioration” in the standards of bank lending to corporations as a result of moves to lessen regulation.Her focus of concern is so-called leveraged loans which are provided to companies with weaker credit ratings—a market which amounts to $1.3 trillion in the US.“I am worried about the systemic risks associated with these loans,” she said. “There has been a huge deterioration in standards; covenants have been loosened in leveraged lending.”In remarks unprecedented for a former central banker, Yellen told the newspaper that the lessons of the financial crash of 2008 were being forgotten as banks were pushing to water down regulations that had been put in place since then.“There are a lot of weaknesses in the system, and instead of looking to remedy those weaknesses I feel things have turned in a very deregulatory direction.”Yellen’s remarks echo views expressed during the meeting of the Fed’s Open Market Committee at its last meeting in September. According to the minutes published earlier this month: “Some participants commented about the continued growth in leveraged loans, the loosening of terms and standards on these loans, or the growth of this activity in the nonbank sector as reasons to be mindful of vulnerabilities and possible risks to financial stability.”The Fed had pointed to the rise of leveraged loans to highly indebted companies in previous meetings. But the September meeting was the first time such loans had been mentioned as a possible risk to financial stability. These warnings were underscored in remarks made by Todd Vermilyea, the Fed’s head of risk and surveillance, at a finance industry conference in New York on Wednesday. He said there could be “weaknesses in risk management.”
Former Fed Chair Yellen just joined the chorus of warnings about $1.6 trillion 'leveraged loan' market - Former Federal Reserve chair Janet Yellen said she is concerned about increasingly lax standards in the market for leveraged loans, the Financial Times reported. Yellen echoes warnings from the Fed, the Bank of England, the Reserve Bank of Australia about the corner of the debt market that, according to the Institute of International Finance, has ballooned to $1.6 trillion. "I am worried about the systemic risks associated with these loans," the former central banker said in an interview with the FT. "There has been a huge deterioration in standards; covenants have been loosened in leveraged lending." Central banks are starting to worry that the corporate world may have taken on too much debt, and that the stock of risky debt overhanging the global economy might start to behave the way subprime mortgages did before 2008. The Bank of England recently suggested that leveraged loans might become a bigger problem than subprime mortgages were: "The Committee is concerned by the rapid growth of leveraged lending, including to UK businesses," the BOE's Financial Policy Committee said earlier in October. "The global leveraged loan market is larger than — and growing as quickly as — the US subprime mortgage market was in 2006." In the UK, leveraged loans to British companies have hit a record, at about £40 billion ($52 billion) in 2018 alone, according to the Bank of England. Compare that figure to before the crisis, when new issuances of such loans only totalled £30 billion ($39 billion). In 2013, the "issuance" of new leveraged loans peaked at $607 billion globally. But regulators under President Obama frowned publicly upon excess leverage, and the market declined through 2015 to a low of $423 billion. After President Trump took office, however, his appointees told the banking sector that they were going to be less strict about loan leverage. In 2017, new loan issuance went back up, to $650 billion — a new record. Put simply, leveraged loans are given to troubled companies who can't get access to cheaper credit via a normal loan from a bank or by raising an investment-grade corporate bond.
Fed Fires Warning Shot at Wall Street’s Riskier Loan Deals - In the Trump era, Wall Street banks have been testing the limits of what they can get away with in piling risky loans onto highly indebted companies. They may have finally crossed a line.A top Federal Reserve official fired a rare public warning Wednesday, saying that banks appear to be chasing increasingly dangerous deals and forgoing protections against borrowers going bust.“There may be a material loosening of terms and weaknesses in risk management,” Todd Vermilyea, the Fed’s head of risk surveillance and data, told bankers at a conference in New York. “Some institutions could be taking on risk without the appropriate mitigating controls.”The warnings come after watchdogs have spent most of the year expressingconfidence about the health of the $1.3 trillion market for leveraged loans. They acknowledged that some firms were putting together transactions that were risky by the standards of just a few years ago, but said it was happening outside the tightly regulated banking sector, thus mitigating threats to the financial system.For now, the Fed might not be doing much more than waving caution flags. Federal regulators have made clear in recent months that banks aren’t likely to face punishments for financing risky loans. What changed? Deals like one from September in which underwriters including Citigroup Inc., Morgan Stanley and Goldman Sachs Group Inc. joined KKR Capital Markets in arranging $6.7 billion of loans and bonds in the buyout of Envision Healthcare Corp. That saddled Envision with a debt load that was around seven times a measure of its earnings, a level well above the six times limit that regulators offered as guidance for banks in 2013. More and more loans are leaving borrowers with debt above that limit.
State regulators refile suit to block OCC's fintech charter — State regulators have refiled their lawsuit against the Office of the Comptroller of the Currency in attempt to block the national regulator from offering a federal bank charter for fintech firms. The Conference of State Bank Supervisors Thursday filed a complaint in the U.S. District Court for the District of Columbia, arguing that the special purpose national bank charter recently being offered by the OCC goes beyond its statutory authority by allowing nonbanks into the banking system. The CSBS and New York’s Department of Financial Services separately filed suits in 2017 while the OCC’s fintech charter was still a proposal. But the courts dismissed that case saying it was not ripe for consideration. The OCC finalized the fintech charter July 31, causing the NYDFS to refile its suit Sept. 14. The CSBS signaled that it, too, would refile its suit on similar grounds. "The New York State Department of Financial Services (DFS) strongly supports the action taken today by the Conference of State Bank Supervisors,” said NYDFS Superintendent Maria T. Vullo, in a statement responding to the CSBS suit. The OCC’s fintech charter “threatens to create an entirely new federal regulatory regime, threatening state sovereignty, community banking, and strong state consumer protection laws, including New York’s usury laws.” An OCC spokesperson said Thursday that the OCC is “confident” in its authority to issue a fintech charter and has offered special purpose charters in the past.
FDIC to launch innovation office to help banks compete with fintechs — The Federal Deposit Insurance Corp. will set up an office of innovation to foster a more welcoming environment for banks to adopt financial technology changes, the agency's chief said Tuesday. FDIC Chairman Jelena McWilliams told an American Bankers Association conference in New York that federal bank regulators could do a better job of encouraging institutions to innovate, which is partly why the most dynamic changes are occurring outside the banking industry. "We have created the regulatory framework where we have actually discouraged banks from innovating for a number of years,” McWilliams said. “So innovation has been happening outside of the banking primarily and a very small percentage of it has happened within the community banks in particular that don’t have the resources, nor are they able to enforce the compliance mechanisms in place that would be needed where the regulators would look positively at innovation.” FDIC Chairman Jelena McWilliams An FDIC innovation office would come on the heels of other banking agencies establishing tech-focused units. The Office of the Comptroller of the Currency has developed a limited-purpose charter for fintech firms, and the Consumer Financial Protection Bureau's Office of Innovation has proposed a "disclosure sandbox" to test new forms of customer communications. McWilliams said the FDIC currently has the ability to look at innovation in three ways. The first is through the industrial loan company, a specialized banking charter supervised by the FDIC that has already drawn some interest but also some hesitation from fintech firms. The second is how the FDIC regulates banks' third-party vendor relationships. The third is by working with technology companies to get better processing, service and efficiency at banks.
There are fewer unbanked, but still too many: FDIC — Even though the rate of U.S. households without a bank account continues to decline, over 14 million people in the county still lack a banking relationship, the Federal Deposit Insurance Corp. said Tuesday. In the latest installment of a survey that the FDIC performs every two years, the agency found that 6.5% of households were “unbanked” in 2017, marking the lowest rate since 2009, when the FDIC began its survey. However, that percentage translates into 8.4 million households — or 14.1 million adults — without ties to a federally insured institution. And levels of the unbanked continue to be disproportionately higher among lower-income families and minorities, the report said. “The good news is that our nation’s banking system is serving more American households than ever before,” said FDIC Chairman Jelena McWilliams in a press release. “The bad news is that even as the overall number of people who are unbanked has declined, 8.4 million households continue to lack a banking relationship.” The FDIC attributes the decline in unbanked to “improvements in the socioeconomic circumstances of U.S. households.” The previous survey performed in 2015 showed that 7% of U.S. households were unbanked and nearly 20% were “underbanked,” which means the household had an FDIC-insured account but also used financial products outside the traditional banking system. The number of underbanked dropped to 18.7% in 2017, or 48.9 million adults in 24.2 million households. The survey found that the levels of unbanked and underbanked households were relatively higher in lower-income areas, less educated households, homes with younger residents, black and Hispanic families, and households headed by working-age individuals with a disability. The survey also found that black and Hispanic households were more likely to lack a credit score. Overall, 22.7 million households, or one in five homes, did not use mainstream credit in the last year and therefore lacked a credit score.
October 2018: Unofficial Problem Bank list declines to 75 Institutions --Note: Surferdude808 compiles an unofficial list of Problem Banks compiled only from public sources.Here is the unofficial problem bank list for October 2018. Here are the monthly changes and a few comments from surferdude808:Update on the Unofficial Problem Bank List for October 2018. The list had a net decline of four insured institutions to 75 banks after six removals and two additions. Aggregate assets declined during the month by $772 million to $56.2 billion. A year ago, the list held 111 institutions with assets of $26.6 billion.Actions were terminated against First Chatham Bank, Savannah, GA ($369 million); Bank of Eastman, Eastman, GA ($170 million); Pinnacle Bank, Orange City, FL ($89 million); and American Investors Bank and Mortgage, Eden Prairie, MN ($69 million). Removals through other ways include Sage Bank, Lowell, MA ($143 million) finding a merger partner and Merchants Bank of California, National Association, Carson, CA ($3 million) exiting through a voluntary liquidation.Additions this month were AllNations Bank, Calumet, OK ($51 million) and Sainte Marie State Bank, Sainte Marie, IL ($20 million). Lastly, we updated the name of Illinois-Service Federal Savings and Loan Association, Chicago, IL ($133 million) to GN Bank.
Top Democrat on House banking panel among those targeted with suspicious packages - — The office of Rep. Maxine Waters, D-Calif., ranking member of the House Financial Services Committee, was targeted with a suspicious package on the same day that pipe bombs were reportedly sent to former President Barack Obama and former Secretary of State Hillary Clinton.“I have been informed by U.S. Capitol Police that my Washington, DC office was the target of a suspicious package that has been referred to the FBI,” the California Democrat said in a press release. “I am appreciative of the law enforcement entities who intercepted the package and are investigating this matter. I unequivocally condemn any and all acts of violence and terror.” Earlier Wednesday, numerous news outlets reported that explosive devices were addressed to Obama in Washington and Clinton's home in Chappaqua, New York. Those packages were also intercepted by law enforcement authorities. CNN also reportedly received a similar package addressed to Obama’s Central Intelligence Agency Director John Brennan, which led to the evacuation of the Time Warner Center where CNN is based in New York City.
Three big states account for nearly a third of complaints to CFPB — Over 30% of the customer complaints lodged about a financial institution and submitted to the Consumer Financial Protection Bureau January 2017 through June 2018 originated in one of three states: California, Florida and Texas. A report released by the CFPB Tuesday, providing a snapshot of the consumer complaint database broken down by state, showed California leading the way with residents there submitting just over 63,000 complaints — nearly 13% of the 494,540 total complaints the bureau received during that period. Florida was second with 46,366, followed by Texas with 45,593. However, the District of Columbia had the most complaints per 100,000 people at 358, followed by Georgia with 270 and Delaware with 228. State breakdown of CFPB consumer complaint database The bureau said it analyzed complaints in order to present a “high-level overview” of trends to supplement its consumer response annual report. In total, the CFPB saw a 9% increase in monthly complaints from 2017 to 2018. Whereas in 2016 consumer complaints focused on debt collection more than than any financial service, credit and consumer reporting issues was the most prevalent area drawing complaints in 2017, particularly consumer reporting that contained inaccurate information. People living in D.C, Delaware, Texas and California complained most often about debt collection issues, while people living in Georgia and Florida complained most often about credit and consumer reporting. Wyoming was the source of the fewest total complaints of any state, with just 386. Iowa had the least amount of complaints per 100,000 people at just 63, followed by West Virginia, Wyoming and South Dakota. The top complaint in these states was also about debt collection.
CFPB fines Tennessee payday lender over claims it misled borrowers - — The Consumer Financial Protection Bureau has hit a Tennessee-based small-dollar lender with a consent order alleging the company deceived customers in collection letters. Cash Express LLC, of Cookeville, Tenn., allegedly sent borrowers threats of legal action even though the time for taking legal action had expired. It was also not the company’s practice to file lawsuits against consumers in these situations, the CFPB said in a press release. Under the consent order issued Wednesday, the company — which operates retail lending outlets in Tennessee, Kentucky, Alabama and Mississippi — will pay a $200,000 civil money penalty and about $32,000 in compensation to customers. Cash Express declined to comment on the settlement. Up until April 2016, Cash Express had mailed more than 19,000 collection letters to 11,315 consumers who still owed debts, even though the legal period of enforcement had elapsed, the CFPB said. The majority of the letters threatened legal action, with some even including drafts of court documents and listing response deadlines, according to the bureau’s consent order. The CFPB also found that Cash Express had implied in collection letters, loan applications and agreements that it would report negative credit information to credit reporting agencies, even though the business did not actually provide customer information to these agencies. Subscribe
FICO Gets Creative With Credit Scores to Facilitate Getting More Americans in Debt –Yves Smith . From the Wall Street Journal: Fair Isaac Corp. creator of the widely used FICO credit score, plans to roll out a new scoring system in early 2019 that factors in how consumers manage the cash in their checking, savings and money-market accounts. It is among the biggest shifts for credit reporting and the FICO scoring system, the bedrock of most consumer-lending decisions in the U.S. since the 1990s.The UltraFICO Score, as it is called, isn’t meant to weed out applicants. Rather, it is designed to boost the number of approvals for credit cards, personal loans and other debt by taking into account a borrower’s history of cash transactions, which could indicate how likely they are to repay….This is occurring at the same time the consumer-credit market appears relatively healthy. Unemployment is low and consumer loan balances—including for credit cards, auto loans and personal loans—are at record highs, and lenders are looking for ways to keep expanding loan volume. Before we go further, you need to understand what this is about. Banks sell a substantial majority of the consumer loans their originate, typically via securitization. Investors use FICO heavily in evaluating these risks. So the FICO move is to enable banks to make more consumer loans by putting its Good Housekeeping Seal of Approval on them so banks can hawk them to investors. Oh, and they’ve been testing this new fancy model in a super long, albeit not terribly robust expansion. So one also has to wonder how well they stress tested it. Back to the Journal:The UltraFICO score will function as an appeal of sorts, likely boosting many applicants with less-than-ideal records. If an applicant’s traditional FICO score falls short, a lender can offer to have the score recalculated to reflect banking activity….Applicants will be able to choose which accounts they want considered when the score is recalculated….FICO said about seven million applicants who have low credit scores as a result of thin borrowing histories would likely see their scores improve under the new system. Separately, some 26 million subprime borrowers will end up with higher credit scores, FICO said, with nearly four million seeing an increase of at least 20 points. Consumers with an average balance of at least $400 who haven’t overdrawn in the prior three months would likely get a boost, FICO said.
Mortgage firms spend less than others on fraud, but costs still add up -- Larger mortgage companies are paying less than other creditors when fraud occurs, but the expense is still detracting enough from their revenue to cause concern. Bigger digital mortgage firms are paying $3.27 for every $1 of fraud, while other digital creditors in the same size range are paying $3.47, according to LexisNexis Risk Solutions' 2018 True Cost of Fraud report. Also, digital mortgage firms that earn $50 million or more in revenue annually also are experiencing fraud attempts at just half the rate equivalent digital creditors are. LexisNexis fraud But large mortgage companies' fraud-related spending is still a high-enough percentage of revenue on average that they are starting to take more notice of it. A large mortgage lender that generates at least half of its business remotely, for example, typically spends almost 3% of its revenue on costs related to fraud. "The mobile channels seem to be driving much of this," according to the report. "With higher fraud through mobile web browsers and third party and branded mobile apps, identity verification is cited as the top challenge with the mobile channel." Because expenses related to digital channel exposure to fraud can be high, bigger lenders and servicers in the mortgage industry are spending more on cybersecurity, according to Kevin Brungardt, CEO of RoundPoint Mortgage. "Especially for larger servicers, what's really striking now is the cost that's associated with the appropriate cybersecurity infrastructure," he said in an interview. "As a cost, it used to be something that was almost immaterial. It's become a budget item now."
FHA eases document requirements for reverse mortgage insurance claims — The Federal Housing Administration is making it easier for reverse mortgage servicers to submit insurance claims by expanding the types of supporting documentation it will accept on defaulted loans. The relaxed requirements, which take effect immediately, are designed to give servicers of Home Equity Conversion Mortgages more options when filing claims and speed up the payment process, the FHA said in a mortgagee letter. For example, the agency will now accept documents from a hazard insurance provider instead of the previously-used declaration page, as well as alternative evidence of a borrower's death, such as an obituary or documents from a health care institution, in lieu of a death certificate. The policy changes will also reduce financial burdens on servicers, which typically carry default-related costs on their books until they get reimbursed by FHA mortgage insurance and the foreclosure process. "Streamlining the HECM claim payment process makes us more responsive to participating lenders and helps continue our effort to put the program on a more financially viable path," FHA Commissioner Brian Montgomery said in a statement. The FHA will also now require a detailed explanation of all pre-due and payable corporate advances in the compliance package, consisting of the date of the disbursement and the expense that was paid. The streamlining of documentation requirements will help FHA reduce the time it takes to make claim payments to servicers, the agency said. Servicers will also now be required to file claims for insurance benefits within 60 days after the preliminary title approval is issued, or the approval will be rescinded. Since returning as FHA director in June, Montgomery has made reforming the agency's reverse mortgage program a priority. Last month, it added a requirement for reverse mortgage lenders to obtain a second appraisal as a check against inflated valuations.
Foreclosure risk is now propelled by natural disasters- Attom -Natural disasters are now the leading driver of lenders' foreclosure risk, with last year's hurricanes causing a rise in third-quarter filings in affected markets, according to Attom Data Solutions. Overall, total foreclosure filings — properties with a default notice, scheduled for auction or repossessed by a bank — fell to their lowest level since the end of 2005. There are 177,146 properties with a foreclosure filing, down 6% from the second quarter and 8% from the third quarter of 2017. Lenders started new foreclosures on 91,849 properties in the quarter, down 6% from the second quarter and 3% from the year prior. "The biggest foreclosure risk in today's housing market comes from natural disaster events such as the twin hurricanes of a year ago," Daren Blomquist, senior vice president at Attom Data Solutions, said in a press release. "Foreclosure starts spiked in the third quarter in many local markets impacted by those hurricanes." There are typically moratoria and forbearances following natural disasters like hurricanes and wildfires, but once those end borrowers who are unable to cure can be subject to a foreclosure action. On the other hand, the foreclosure risk associated with the poorly underwritten mortgages from the mid-2000s faded, he said, as "average foreclosure timelines have dropped to a two-year low, and the share of foreclosures tied to 2004 to 2008 loans has dropped well below 50%." Among the 15 states that posted year-over-year increases in foreclosure starts in the third quarter were Florida, up 25%, and Texas, up 3%. Nationwide, one in every 757 properties had a foreclosure filing. New Jersey had the highest rate, one in every 267 properties, and that was an improvement of 8% from the second quarter and 11% from one year prior. Florida had the fourth highest rate, one in every 449 properties, up 7% from the second quarter and 2% from the third quarter of 2017. It has the most filings of any state at 20,382. In Texas, the rate was one in every 1,020 properties, down 14% compared with the second quarter but up 6% from the third quarter last year.
Freddie Mac: Mortgage Serious Delinquency Rate Unchanged in September -Freddie Mac reported that the Single-Family serious delinquency rate in September was 0.73%, unchanged from 0.73% in August. Freddie's rate is down from 0.86% in September 2017.Freddie's serious delinquency rate peaked in February 2010 at 4.20%.This ties the lowest serious delinquency rate for Freddie Mac since January 2008.These are mortgage loans that are "three monthly payments or more past due or in foreclosure".
Black Knight: National Mortgage Delinquency Rate Increased in September From Black Knight: Black Knight’s First Look: Seasonal, Calendar and Hurricane-Related Pressures Result in Largest Single-Month Mortgage Delinquency Increase in Nearly a Decade:
• Mortgage delinquencies rose more than 13 percent in September, the largest single-month rise since November 2008According to Black Knight's First Look report for September, the percent of loans delinquent increased 13.2% in September compared to August, but decreased 9.8% year-over-year.
• 16 of the last 19 Septembers have seen delinquencies increase, averaging a 5.2 percent rise over that time frame, the largest of any month during the calendar year
• September 2018 also ended on a Sunday, which typically creates strong upward pressure on delinquencies
• Hurricane Florence-related delinquencies spiked 38 percent month-over-month, with more than 6,000 borrowers already missing a payment as a direct result of the storm
• Foreclosure starts posted a double-digit monthly decline, hitting a nearly 18-year low at just 40,000 for the month
• Both the inventory of loans in active foreclosure and the foreclosure rate have now fallen below their pre-recession averages for the first time since the financial crisis
The percent of loans in the foreclosure process decreased 4.5% in September and were down 26.0% over the last year. Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 3.97% in September, up from 3.52% in August.The percent of loans in the foreclosure process decreased in September to 0.52% from 0.54% in August. The number of delinquent properties, but not in foreclosure, is down 196,000 properties year-over-year, and the number of properties in the foreclosure process is down 90,000 properties year-over-year.
MBA: Mortgage Applications Increased in Latest Weekly Survey - From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey Mortgage applications rose 4.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 19, 2018. The previous week’s results did not include an adjustment for the Columbus Day holiday.... The Refinance Index increased 10 percent from the previous week. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 0.2 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 its highest level since February 2011, 5.11 percent from 5.10 percent, with points decreasing to 0.52 from 0.55 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
FHFA House Price Index: Real Index Up 0.07 Percent in August - The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for August. Here is the opening of the report: – U.S. house prices rose in August, up 0.3 percent from the previous month, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). The previously reported 0.2 percent increase in July was revised upward to 0.4 percent. [Read more] The chart below illustrates the monthly HPI series, which is not adjusted for inflation, along with a real (inflation-adjusted) series using the Consumer Price Index: All Items Less Shelter.
Does Climate Change Affect Real Estate Prices? Only if You Believe In It - In some coastal areas such as Hawaii and Florida, roughly one-tenth of all homes are expected to be underwater if sea levels rise by six feet. Zillow estimates that the value of homes at risk of being underwater is US$882 billion.However, not everyone in the general public seems to agree about the future effects of climate change: In aGallup survey from last year, 42 percent of Americans agreed that global warming will pose a serious threat to their way of life, while a hefty 57 percent disagreed.Our recent research suggests that beliefs about the effects of projected climate change may impact real estate prices decades before the projected damages are expected to occur.The valuation of a real estate asset depends on many parameters. The asset's distance from the coast endows it with both scenic coastal views and inevitable exposure to coastal flooding.Our study, published online on Sept. 11, explored how residential real estate prices are impacted by beliefs about climate change. Using a novel set of data, we were able to uncover a relationship between differences in beliefs about the occurrence and the effects of climate change—that is, the change in the long-term likelihood of adverse weather events—and the real estate valuation of the homes exposed to those risks.We used a comprehensive data set on coastal home transaction prices in the U.S. that maps individual homes to future inundation projections, employing proprietary data from Zillow and scientific forecast data on sea levels from the National Oceanic and Atmospheric Administration. We matched this to survey data on U.S. population beliefs about climate change from the Yale Program on Climate Change. We discovered that homes projected to be underwater sell for more in counties with more climate change deniers, relative to believers. In other words, houses projected to be underwater in "believer" neighborhoods tend to sell at a discount compared to houses in "denier" neighborhoods. One standard deviation increase in the fraction of believers leads to a 7 percent difference in the price of a home projected to be underwater.
The Smallest Home Ever Listed In San Francisco Can Be Yours For $650k - A 480 square foot tiny home in Visitacion Valley, an ultra-trendy neighborhood in San Francisco, California, is one of the smallest homes ever to be listed in the area. With a price tag of $650,000, it is an affordable piece of real estate for the first-time millennial home buyer, in the country's most overvalued housing market. This small Visitacion Valley wooden shack looks similar to a mobile home from the Canadian television series Trailer Park Boys is a real fixer-upper, with the opportunity to remodel and rebuild on much of the 2,500-square-foot-lot. "There aren't many homes in San Francisco listed at this price," listing agent, Linda Ngo of Compass Real Estate, said to SF Gate. "You just have to be willing to put in some elbow grease."
New Home Sales decrease sharply to 553,000 Annual Rate in September -The Census Bureau reports New Home Sales in September were at a seasonally adjusted annual rate (SAAR) of 553 thousand. The previous three months were revised down significantly. "Sales of new single‐family houses in September 2018 were at a seasonally adjusted annual rate of 553,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 5.5 percent below the revised August rate of 585,000 and is 13.2 percent below the September 2017 estimate of 637,000." The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate. Even with the increase in sales over the last several years, new home sales are still somewhat low historically. The second graph shows New Home Months of Supply. The months of supply decreased in September to 7.1 months from 6.5 months in August. The all time record was 12.1 months of supply in January 2009. This is above the normal range (less than 6 months supply is normal). Starting in 1973 the Census Bureau broke inventory down into three categories: Not Started, Under Construction, and Completed. The third graph shows the three categories of inventory starting in 1973. The inventory of completed homes for sale is still somewhat low, and the combined total of completed and under construction is also somewhat low. New Home Sales, NSAThe last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate). In September 2018 (red column), 41 thousand new homes were sold (NSA). Last year, 50 thousand homes were sold in September. The all time high for September was 99 thousand in 2005, and the all time low for September was 24 thousand in 2011. This was well below expectations of 625,000 sales SAAR, and the previous months were revised down significantly.
New home sales bombed in September -- Needless to say, this morning's report on new home sales was another big miss in the housing sector. Not only were sales a new 12 month low, they were the lowest in nearly 2 years, and are off over -150,000 from their peak 10 months ago: Typically new home sales are down about -200,000 when a recession starts. That median prices have fallen in sync with sales, and not with their typical lag: makes me think that the tax law change of last December, which capped the mortgage tax deduction in a way calculated to hit the highest priced housing markets the hardest, is a big driver of the decline.Obviously this is not good for the economy next year, and bodes poorly for fixed private residential investment, which will be reported as part of Q3 GDP on Friday. BUT, one important caveat: new home sales are among the most volatile, and most heavily revised, of all data series, which is why I pay more attention to housing permits. So it wouldn't be a surprise at all for most of this month's decline to be revised away in next month's report.
A few Comments on September New Home Sales - Bill Mcbride - New home sales for September were reported at 533,000 on a seasonally adjusted annual rate basis (SAAR). This was well below the consensus forecast, and the three previous months were revised down significantly. A very weak report. Sales in September were down 13.2% year-over-year compared to September 2017. This was a large YoY decline, although some of the decline might be related to the impact of the hurricanes. However the largest declines were in the North East and the West, and those declines were not hurricane related. It is not time to panic - or start looking for a recession - but this was a very weak report. Months of inventory is now above the top of the normal range, however the number of units completed and under construction is still somewhat low. Inventory will be something to watch very closely. This graph shows new home sales for 2017 and 2018 by month (Seasonally Adjusted Annual Rate). New home sales had been up year-over-year every month this year prior to this report. Not only were sales down YoY in September, but with revisions, sales were down slightly YoY in June too. Sales are only up 3.5% through September compared to the same period in 2017. This is below my forecast for 2018 for an increase of about 6% over 2017. As I noted early this year, there were downside risks to that forecast, primarily higher mortgage rates, but also higher costs (labor and material), the impact of the new tax law, and other possible policy errors. Also new home sales had a strong Q4 2017, so the comparisons will be more difficult - and sales might even be down for the year. And here is another update to the "distressing gap" graph that I first started posting a number of years ago to show the emerging gap caused by distressed sales. Now I'm looking for the gap to close over the next several years. Distressing GapThe "distressing gap" graph shows existing home sales (left axis) and new home sales (right axis) through September 2018. This graph starts in 1994, but the relationship had been fairly steady back to the '60s. Following the housing bubble and bust, the "distressing gap" appeared mostly because of distressed sales. The gap has persisted even though distressed sales are down significantly, since new home builders focused on more expensive homes. I still expect this gap to slowly close. However, this assumes that the builders will offer some smaller, less expensive homes. If not, then the gap will persist. Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So the timing of sales is different.
NAR: Pending Home Sales Index Increased 0.5% in September - From the NAR: Pending Home Sales See 0.5 Percent Increase in September - Pending home sales rose slightly in September and saw substantial increases in both the West and Midwest, according to the National Association of Realtors.The Pending Home Sales Index, a forward-looking indicator based on contract signings,increased 0.5 percent to 104.6 in September from 104.1 in August. However, year-over-year, contract signings dropped 1.0 percent make this the ninth straight month of annual decreases....The PHSI in the Northeast dropped 0.4 percent to 92.3 in September, and is now 2.7 percent below a year ago. In the Midwest, the index rose 1.2 percent to 102.4 in September and is 1.1 percent lower than September 2017.Pending home sales in the South fell 1.4 percent to an index of 119.6 in September; however, that is 3.3 percent higher than a year ago. The index in the West increased 4.5 percent in September to 93.1 and plunged 7.4 percent below a year ago. This was above expectations for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in October and November.
NMHC: Apartment Market Tightness Index remained negative for 12th Consecutive Quarter -- The National Multifamily Housing Council (NMHC) released their October report: October Apartment Market Conditions Experience Headwinds The Market Tightness Index was below 50 (looser conditions) for the 12th consecutive month. The Index came in at 41 in October. This index helped me call the bottom for effective rents (and the top for the vacancy rate) early in 2010. And it also helped me call the bottom in vacancy rate more recently. This graph shows the quarterly Apartment Tightness Index. Any reading below 50 indicates looser conditions from the previous quarter. This indicates market conditions were looser over the last quarter. This is the twelfth consecutive quarterly survey indicating looser conditions - it appears supply has caught up with demand - and I expect rent growth to continue to slow.
Quarterly Housing Starts by Intent - Here is a graph I haven't updated in some time. From the Census Bureau "Started and Completed by Purpose of Construction" through Q2 2018. This graph shows the NSA quarterly intent for four start categories since 1975: single family built for sale, owner built (includes contractor built for owner), starts built for rent, and condos built for sale. Single family starts built for sale were up about 8% in Q2 2018 compared to Q2 2017. Owner built starts were unchanged year-over-year. And condos built for sale not far above the record low, but up 11% compared to Q2 2017. The 'units built for rent' (blue) had increased significantly following the great recession, but are now moving mostly sideways.
AIA: "Architecture firm billings slow but remain positive in September" -- Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment. From the AIA: Architecture firm billings slow but remain positive in September: Architecture firm billings growth slowed in September but remained positive for the twelfth consecutive month, according to a new report today from The American Institute of Architects (AIA).AIA’s Architecture Billings Index (ABI) score for September was 51.1 compared to 54.2 in August. However, continued strength in new projects coming into architecture firms points to billings growth in the coming months.“Similar to the strong conditions we’ve seen nationally, architecture firms located in the Midwest and Southern regions of the country continued to report very strong billings in September,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “However, billings were soft at firms located in the Northeast again, where they have declined or been flat for the entire year so far.”
• Regional averages: Midwest (59.7), South (54.1), West (53.1), Northeast (46.6)
• Sector index breakdown: institutional (55.1), multi-family residential (54.9), mixed practice (53.4), commercial/industrial (50.8)
Smile! The Secretive Business of Facial-Recognition Software in Retail Stores - Have you been to a Lowe’s in the last year? Or Madison Square Garden? Or Kennedy International Airport? If so, there’s a good chance that you were photographed by a security camera. Depending on where you were and the technology being used, your face may have been analyzed by bots and checked against a database of criminals and “known shoplifters.” It doesn’t need to have been a Lowe’s or MSG, either: For all we know, the same technology could also be in use at dozens of other places around New York City, from department stores to megachurches, but no one can say for sure except the companies supplying the software. Facial-recognition software, which has been in development since the 1960s and has been gaining popularity with police for more than a decade, has taken off with retailers and event spaces during the last couple of years, consultants say. It’s marketed to them as an unparalleled tool for cutting down on shoplifting, and sold to the public as a security tool — helping identify would-be terrorists at sports games, for instance, or protecting consumers against identity theft by making sure that they are who they say they are. It’s also almost completely unregulated. “The technology is in some environments where I’m sure millions of people, in a year, or even in a month, are subjected to it,” said Donna Lieberman, executive director of the New York Civil Liberties Union. “Nobody has any idea that it’s happening, or what data is being collected, or how it’s being stored, or for how long, or who has access to it.”
October Auto Sales Tumble- Our Car Sales Are Down 12 Percent - The downward spiral in the US auto industry is accelerating, and there may be no improvement anytime soon. According to a new report by CNBC, October is shaping up to be another terrible month for the industry, after an already abysmal September, as auto dealers around the country have been plagued by marked drops in retail sales and customer traffic in their showrooms. Scott Adams, the owner of a Toyota dealership in Lee’s Summit, Missouri, told CNBC: “We are definitely seeing business pull back. September was off some, but this month our car sales are down 12 percent and our truck sales are down 23 percent." The report notes that the drop in sales was most pronounced last weekend. Another dealer in Tampa Bay, Florida said that sales this month were down 13%. Mark Scarpelli, president of Raymond Chevrolet and Kia in Antioch, Illinois stated that "Customer traffic has moderated. There is a little bit more of a pause because of the higher interest rates." He said that although sales are keeping pace with the prior year, people are taking longer to buy. Recall that in September, the average new car loan jumped $724 year-over-year to $30,958 in Q2 2018, while used vehicle loan amounts increased $520 to reach $19,708, both records.
Airlines Face Rising Fuel Costs. Blame Cruise Ships. - Airline fuel budgets are about to get squeezed by unlikely competitors. Next year, shipowners are expected to start switching to cleaner-burning diesel fuel, part of new emissions controls taking effect globally in 2020.Airline executives are now warning that the shift could boost the price of fuel for the world’s fleet of commercial jets. Delta Air Lines Inc. finance chief Paul Jacobson said earlier this month that rising crude prices and the fuel switch for oceangoing vessels represented a “net ‘bad’ for the airlines,” adding that Delta’s in-house refinery should help offset the negative impact.Refineries produce three main categories of fuel: gasoline for cars; “distillates,” including both diesel and jet fuel; and heavier fuels used for a variety of industrial purposes, including to power many ships. By a marketing convention, jet-fuel prices are usually pegged to diesel prices, typically selling for a few cents more a gallon.Airline and refining industry officials are bracing for a surge in diesel demand as shipowners switch from heavier bunker fuels. Should diesel prices rise, jet fuel could follow.“Jet fuel is the unintended consequence” of the new maritime regulations, said Mason Hamilton, petroleum markets analyst at the U.S. Energy Information Administration. “There is a high degree of uncertainty over what is going to happen,” he said.A big unknown is how much demand might increase. Shipowners have various ways to reduce emissions. Switching fuel is one; but some might simply install scrubbers in their smoke stacks, meaning no need for cleaner diesel. The International Maritime Organization, the United Nations body that sets standards for the global marine industry, is demanding ships slash the sulfur content of their exhaust by more than 85% by 2020.
U.S. Manufacturers See Signs of New Risks – WSJ - Caterpillar and 3M Co. provided a gut check for U.S. manufacturers, revealing in their third-quarter reports mounting risks that spooked investors. Industrial shares sold off on Tuesday after manufacturers flagged challenges including rising costs, a stronger dollar and concerns over growth in China. Shares in Caterpillar closed down 7.6% on Tuesday, having been 10% lower at one point, and 3M lost 4.4%. Shares in Harley-Davidson Inc. fell 2.2% after the motorcycle maker said it sold fewer Hogs in the third quarter than a year earlier. The S&P machinery index is down 4.2% this week. The selloff is the clearest signal yet that fortunes could be turning for manufacturers after a year of strong production and sales driven in part by tax cuts and high consumer confidence. “There are chinks in the armor,” for major U.S. manufacturers, said Jefferies analyst Steve Volkmann. The earnings reports shook the broader market, which stabilized after Caterpillar executives on a call with analysts offered assurances that the tariff costs and higher inventories of its equipment at dealerships were manageable. But rising costs, including from tariffs on trade between the U.S. and China, were top of mind for many investors. Caterpillar said tariffs the Trump administration implemented earlier this year on foreign steel and aluminum made parts for the machinery it manufactures in the U.S. more expensive. Caterpillar said tariff-related costs for this year would likely come in at the low end of the previous range of $100 million to $200 million it forecast. 3M expects the tariffs to push up costs by about $20 million this year and $100 million next year. 3M also said sales of its face masks and other products in China were dropping as economic growth there cools. Paint-and-coatings maker PPG Industries Inc. said last week that demand in China was falling due to lower spending on cars. China’s economic growth of 6.5% in the third quarter was its weakest pace since the financial crisis. China’s economic troubles are due in part to the trade fight with Washington that has seen officials in both countries apply tit-for-tat tariffs to hundreds of billions of dollars in bilateral trade. Lennox International Inc., a maker of heating and cooling systems, said Monday that it would move some production out of China to avoid those hurdles. Harley, meanwhile, said a stronger U.S. dollar had dented its earnings from the international sales the company is increasingly relying on to drive growth. Milwaukee-based Harley said the stronger dollar cost it $7.4 million in the latest quarter.
Companies Say They're Ready to Move Supply Chains From China -Earnings reporting season is underway, and analysts are eager to hear from executives about how an escalating trade war between the U.S. and China is impacting their businesses. A common theme is that they are ready to relocate supply chains if the cost of importing Chinese goods becomes prohibitive.U.S. President Donald Trump imposed a 10 percent tariff on $200 billion of Chinese imports in September -- following an earlier round of tariffs on $50 billion of goods -- and promised to raise the duty to 25 percent in January. He’s also threatened to expand the levy to all products imported from China -- an amount that totaled $531 billion in the 12 months through August, according to the latest data from the U.S. Department of Commerce. Here’s what companies are telling analysts:
- Lennox International Inc. "We’re pro-actively taking action," Todd Bluedorn, chief executive officer of the Texas-based HVAC company, told analysts during an Oct. 22 earnings call. "I’m not sure the Chinese tariffs are going to be short term. And so we’re taking action to sort of avoid the tariffs by moving to southeast Asia and other low-cost countries that can meet our requirements."
- Philips "We have various levers to pull to mitigate the impact," Frans van Houten, CEO of the Dutch healthcare and lighting technology company, said during an Oct. 22 earnings call. "One is rearranging our supply chain. Of course, that is perhaps the easiest because we have manufacturing facilities in the United States, in Europe, and in Asia: about one third, one third, one third."
- Acme United Corp. - "There is a possibility of sourcing in other places for some of those products, but we currently don’t have the quality control teams in some of these countries where we might be sourcing," Johnsen said. "If it was a 25 percent tariff, which is what we’re talking about at year-end, if they can implement it on these items, that would probably drive us to put some people to be looking at quality control in some additional countries on a transient basis as we produce."
US Goods Trade Deficit Hits Record High (Don't Tell Trump) - Do not show this to President Trump, he will not be happy. In the few months since President Trump unleashed his trade war, predicated on managing back America's massive merchandise trade deficit, things have gone very wrong, judging by the numbers. Against expectations of a modest improvement in the deficit to $75.1 billion, September's goods trade balance slumped again to $76.036 billion from a revised $75.5 billion, and just barely surpassing the July 2008's record high deficit of $76.025 billion, making the September print a record in this series. Whether this reflects pre-emptive actions ahead of actual tariffs is unclear, although the silver lining was that at least exports rebounded modestly, if not enough, compared to last month when exports declined once more:
- Imports rose 1.5% in Sept. to $216.988b from $213.878b in August
- Exports rose 1.8% in Sept. to $140.952b from $138.422b in the prior month.
How Trump will react to this record print is unclear, although with the stock market cracking and trade war with China only escalating, the president - and certainly Peter Navarro - will hardly be happy; keep an eye on his twitter feed for any kneejerk response.
Headline Durable Goods Orders Up 0.8% in September - The Advance Report on Manufacturers’ Shipments, Inventories, and Orders released today gives us a first look at the latest durable goods numbers. Here is the Bureau's summary on new orders: New orders for manufactured durable goods in September increased $2.0 billion or 0.8 percent to $262.1 billion, the U.S. Census Bureau announced today. This increase, up three of the last four months, followed a 4.6 percent August increase. Excluding transportation, new orders increased 0.1 percent. Excluding defense, new orders decreased 0.6 percent. Transportation equipment, also up three of the last four months, led the increase, $1.8 billion or 1.9 percent to $97.4 billion. Download full PDF The latest new orders number at 0.8% month-over-month (MoM) was better than the Investing.com consensus of -1.3%. The series is up 7.9% year-over-year (YoY).If we exclude transportation, "core" durable goods came in at 0.1% MoM, which was worse than the Investing.com consensus of 0.5%. The core measure is up 5.9% YoY.If we exclude both transportation and defense for an even more fundamental "core", the latest number is down 2.3% MoM and up 2.9% YoY.Core Capital Goods New Orders (nondefense capital goods used in the production of goods or services, excluding aircraft) is an important gauge of business spending, often referred to as Core Capex. It is down 0.1% MoM and up 1.9% YoY. For a look at the big picture and an understanding of the relative size of the major components, here is an area chart of Durable Goods New Orders minus Transportation and Defense with those two components stacked on top. We've also included a dotted line to show the relative size of Core Capex.
Chemical Activity Barometer "Begins to Cool" in October Note: This appears to be a leading indicator for industrial production.From the American Chemistry Council: Chemical Activity Barometer Begins To Cool At Start of 4th Quarter; Year-Over-Year Growth Continues To Ease The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), posted a 0.2 percent gain in October on a three-month moving average (3MMA) basis. The barometer is up 3.8 percent (3MMA) year-over-year. The pace of growth has slowed form earlier in the year. The unadjusted measure of the CAB declined 0.2 percent in October....Applying the CAB back to 1912, it has been shown to provide a lead of two to fourteen months, with an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research. The median lead was also eight months. At business cycle troughs, the CAB leads by one to seven months, with an average lead of four months. The median lead was three months. The CAB is rebased to the average lead (in months) of an average 100 in the base year (the year 2012 was used) of a reference time series. The latter is the Federal Reserve’s Industrial Production Index.
Richmond Fed: "Fifth District Manufacturing Activity Expanded Moderately in October" -From the Richmond Fed: Fifth District Manufacturing Activity Expanded Moderately in OctoberFifth District manufacturing activity expanded moderately in October, according to the results from the most recent survey by the Federal Reserve Bank of Richmond. The composite index fell from 29 in September to 15 in [October], as indexes for shipments and new orders dropped, while the third component, employment, rose. However, survey respondents were optimistic, expecting to see positive growth across most measures in the coming months.While the employment index rose in October, the indexes for wages and workweek dropped but remained positive, indicating continued but weaker growth. Firms were unable to find workers with skills they needed, as the skills index dropped to an all-time low of −22. Respondents expect this struggle to continue in the next six months. Still solid, but slower growth in October.
Kansas City Fed: Regional Manufacturing Activity "Expanded at a Slower Pace" in October -- From the Kansas City Fed: Tenth District Manufacturing Activity Expanded at a Slightly Slower Pace The survey revealed that Tenth District manufacturing activity continued to expand, but at a slower pace. Expectations for future activity eased slightly, but remained positive.“While regional factories reported another month of growth, a number of firms engaged in international trade noted negative effects of tariffs on supply chains,” said Wilkerson...The month-over-month composite index was 8 in October, down from 13 in September and 14 in August. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The decline in factory growth was driven by slower expansion at durable goods plants, especially for machinery, computer and electronic products, and transportation equipment, while activity at nondurable goods plants increased. Month-over-month indexes were mixed in September, but positive overall. The production and new orders indexes declined slightly, while the order backlog and new orders for exports indexes inched up. The shipments and employment indexes both increased. The materials inventory index declined and the finished goods inventory index was unchanged from last month’s reading. This is the lowest level for this index since 2016. The regional surveys for October have mostly indicated slower growth in October as compared to September, and these surveys suggest the ISM index will still be solid, but could be close to the lowest level this year.
Weekly Initial Unemployment Claims decreased to 215,000 -- The DOL reported: In the week ending October 20, the advance figure for seasonally adjusted initial claims was 215,000, an increase of 5,000 from the previous week's unrevised level of 210,000. The 4-week moving average was 211,750, unchanged from the previous week's unrevised average of 211,750. The previous week was unrevised. The following graph shows the 4-week moving average of weekly claims since 1971.
Philly Fed: State Coincident Indexes increased in 39 states in September -- From the Philly Fed: The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for September 2018. Over the past three months, the indexes increased in 44 states, decreased in five states, and remained stable in one, for a three month diffusion index of 78. In the past month, the indexes increased in 39 states, decreased in six states, and remained stable in five, for a one-month diffusion index of 66. Note: These are coincident indexes constructed from state employment data. An explanation from the Philly Fed: The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing by production workers, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.
How China’s economic rise killed off 3.4 million US jobs - More than 3.4 million jobs in the United States have been lost since China joined the World Trade Organisation 17 years ago.At least 1.3 million jobs have disappeared in the past decade, fueling the trade war between Beijing and Washington and adding US$100 billion to the US deficit.“The growth of the trade deficit with China between 2001 and 2017 was responsible for the loss of 3.4 million [American] jobs, including 1.3 million since 2008, [which was] the first full year of the Great Recession,” a report released by the Economic Policy Institute, a non-profit, liberal think tank based in Washington, revealed.“Nearly 74.4% [or] 2.5 million of the jobs lost were in manufacturing,” co-authors Robert E Scott and Zane Mokhiber pointed out.The sheer depth and scale of the problem affected 50 states, and demolished the computer and electronic parts industries, the study showed, as major US companies relocated manufacturing to China.Other sectors which were badly hit included apparel, electrical equipment and appliances.This, in turn, “contributed heavily to the crisis in US manufacturing employment,” triggering anti-China sentiment and the broader economic Cold War between President Donald Trump’s administration and President Xi Jinping’s government.“The trade deficit in the computer and electronic parts industry grew the most [and up to] 1,209,000 jobs were lost,” the report highlighted. “Surging imports of steel, aluminum and other capital-intensive products [have also] threatened hundreds of thousands of jobs in key industries such as primary metals, machinery and fabricated metal products.”Again, this strikes at the heart of Washington’s dispute.Yet in Beijing, Trump’s bruising battle is seen increasingly as a way to contain China’s growing economic and military might. By weaponizing tariffs on more than $250 billion worth of Chinese imports, the White House hopes to force Xi to change course and recast the “Made in China 2025” high-tech program, as well as adding a thick layer of transparency to the $1 trillion Belt and Road Initiative. “[But] In China’s view, what the US is really reacting to is not only the specifics of its trade policy but also its overall development model and its aspirations to become a major global power – aspirations that are not out of reach.”
Globalization Has Hollowed Out Rural America - What do we make of an economy in which a handful of bubblicious urban areas are magnets for jobs and capital while rural communities have been hollowed out? The short answer is that this progression of urbanization has been one of the core dynamics of civilization for thousands of years: opportunities are greater in cities, and so people move from rural areas with few opportunities to cities with greater opportunities. But that's not the only dynamic hollowing out America's rural communities: globalization plays a key role, too. Rural economies can rarely muster economies of scale that enable globally competitive enterprises. Rural communities generally lack the capital, expertise, global supply chains and cheap transportation costs that are the building blocks of successful global production and distribution. In a global economy characterized by over-capacity, over-production and mobile capital, localized rural economies can't compete with the low cost of commoditized products distributed by finely tuned global supply chains and cheap transportation. Pre-globalization and cheap transport, local bakeries imported bulk flour and baked bread that was lower in cost than loaves shipped in from afar. The local bakeries held the competitive price advantage, and so local bakeries could pay local labor and local taxes that then supported the rest of the local economy. But in today's economy, commoditized bread can be delivered rural communities at prices local bakeries cannot match. The same holds true for virtually all globally tradable goods-- foods, clothing, etc. The only economic sectors with a toehold in rural communities are corporate farms, the occasional small specialty corporate factory making non-commoditized components and non-tradable services such as hair salons, motels, thrift shops, cafes, etc. Proponents of globalization claim the few hundred dollars in annual household savings generated by shipping in commoditized goods are so beneficial nothing else matters. But if the cost of these paltry, essentially meaningless savings is the destruction of the local economy except for a handful of global corporate outposts and jumble shops, was this trade-off a good deal for rural communities?
Trump’s NLRB Just Quietly Ruled to Make Union Pickets Illegal - An all-Republican panel of President Trump’s National Labor Relation Board (NLRB) recently ruled that janitors in San Francisco violated the law when they picketed in front of their workplace to win higher wages, better working conditions and freedom from sexual harassment in their workplace. The ruling could result in far-reaching restrictions on picketing that limit the ability of labor unions to put public pressure on management. The NLRB reached its conclusion by using the complex and convoluted employment structure created by the janitors’ employers. The janitors were technically employed by one company, Ortiz Janitorial Services, which was subcontracted by another company, Preferred Building Services, to work in the building of a third company. This type of confusing employment relationship is increasingly common, resulting in workers being put in a position where it’s difficult to negotiate higher wages and better working conditions, or protect their basic employment rights. The NLRB based its decision on a particularly onerous provision in federal labor law that prohibits employees from engaging in boycotts, pickets or other activities that are aimed at a secondary employer. The provision was added as part of the 1947 Taft-Hartley Act, taking away one of labor’s most powerful weapons.
Silicon Valley’s dirty secret: Using a shadow workforce of contract employees to drive profits As the gig economy grows, the ratio of contract workers to regular employees in corporate America is shifting. Google, Facebook, Amazon, Uber and other Silicon Valley tech titans now employ thousands of contract workers to do a host of functions — anything from sales and writing code to managing teams and testing products. This year at Google, contract workers outnumbered direct employees for the first time in the company's 20-year history. It's not only in Silicon Valley. The trend is on the rise as public companies look for ways to trim HR costs or hire in-demand skills in a tight labor market. The U.S. jobless rate dropped to 3.7 percent in September, the lowest since 1969, down from 3.9 percent in August, according to the Bureau of Labor Statistics. Some 57.3 million Americans, or 36 percent of the workforce, are now freelancing, according to a 2017 report by Upwork. In San Mateo and Santa Clara counties alone, there are an estimated 39,000 workers who are contracted to tech companies, according to one estimate by University of California Santa Cruz researchers. Spokespersons at Facebook and Alphabet declined to disclose the number of contract workers they employ. A spokesperson at Alphabet cited two main reasons for hiring contract or temporary workers. One reason is when the company doesn't have or want to build out expertise in a particular area such as doctors, food service, customer support or shuttle bus drivers. Another reason is a need for temporary workers when there is a sudden spike in workload or to cover for an employee who is on leave. "At the end of the day, TVC (temporary, vendor and contractual workers) are an important part of the workforce, but they are not Google employees and not privy to the same confidential company information that full-time Googlers are," the spokesperson said. "Our vendor workers are valued members of our Facebook community, and we are committed to providing a safe, fair work environment to everyone who helps Facebook bring the world together," said Anthony Harrison, director of media relations at Facebook. Spokespersons at Amazon and Netflix did not respond to requests for comment.
Another Nonprofit Resists a Fair Labor Measure - In 2016, NPQ published an article by Andy Schmidt, a labor lawyer, entitled “Is Exploiting Workers Key to Your Enterprise Model? Nonprofits and the New Overtime Requirements.” Maybe this deserves a reread in Washington state, where some nonprofits oppose a proposal its Department of Labor and Industries put out for public comment that would increase the number of workers eligible for overtime pay. The measure comes on top of a graduated minimum wage hike to $12.00 next year and to $13.50 in 2020. “More and more of us are working more and more hours,” the nonprofit Working Washington says on its website, “but we’re not getting paid for it. Pretty much all an employer has to do is call someone a manager and pay them a salary of at least $24,000 a year, and they can make them work as many hours as they feel like.” And, indeed, that appears to be the assumption being made by some nonprofit managers, who somehow manage to craft an appeal for a continuation of unfair labor practices based on the needs of low-income children—some of whom, one could presume, live in those very families. At Boys & Girls Club of Spokane County, the state’s higher minimum wage already has added about $50,000 to payroll costs, said Dick Hanlin, the executive director. The nonprofit serves about 2,000 local kids ages 6 to 18, mostly from low-income families. Stricter overtime rules could force the Boys & Girls Club to reduce hours for entry-level managers or hire more part-time workers, Hanlin said. While it’s unusual for entry-level managers to work more than 40 hours per week, he said it sometimes is necessary during special events or big club fundraisers. “It doesn’t necessarily help the workplace; it hurts,” Hanlin said of the proposed rules. Higher operating costs also force the club to either raise more money or consider fee increases for its low-income clientele, he said.
12 relatives of GOP Nevada governor candidate pen op-ed opposing him A dozen relatives of a Republican running for governor in Nevada wrote an op-ed in the Reno Gazette Journal on Monday opposing him. Adam Laxalt, Nevada’s attorney general, is the wrong choice to lead the state, the group wrote. “The decision to write this column has not been an easy one for us,” their op-ed stated. “We are writing as members of the Laxalt family who have spent our lives in Nevada, and feel compelled to protect our family name from being leveraged and exploited by Adam Laxalt, the Republican candidate for governor.” Laxalt is the grandson of Paul Laxalt, the former chairman of President Reagan's presidential campaigns who went on to serve as a U.S. senator and governor of Nevada. The op-ed was written by an aunt of Laxalt's and several cousins. In their letter, they predicted that if Laxalt responds, it will be to say that he "hardly knows the people writing this article." They said the fact that Laxalt grew up on the East Coast and not in Nevada prevented them from knowing him better. Parker Briden, a spokesman for Laxalt, told the Post that the candidate “has a large family and some distant relatives are lifelong liberal activists, donors and operatives." But the Laxalts who signed on to the letter said their opinion piece was not about politics. “We would be proud to have a Laxalt running for office on Nov. 6, regardless of whether they were Republican or Democrat or independent, so long as we believed that they would be good for Nevada,” they wrote. “We’re writing because we care about Nevada and because we know the truth about this candidate. We think that you should, too.”
More Than Half A Million People- America's Homelessness Crisis Is Rapidly Exploding On Both Coasts - The homelessness crisis in the United States is getting a lot worse, and it is happening at a pace that is absolutely frightening. Did you realize that more than half a million Americans are homeless right now? One out of every four homeless Americans actually has a job, but thanks to rapidly rising housing prices they are not able to afford a place to live. So every night in this country, hundreds of thousands of people are sleeping in shelters, in their vehicles or on the streets. It is a national crisis that isn’t going away, and during the next economic downturn it is only going to intensify. I have written about our exploding homelessness crisis on numerous occasions, but I had no idea that the numbers had gotten so large until I came across this article…Recent estimates indicate that more than 550,000 people experience homelessness in the US on any given night, with about two-thirds ending up in emergency shelters or transitional housing programs, and one-third finding their way to unsheltered locations like parks, vehicles, and metro stations. According to the Urban Institute, about 25% of homeless people have jobs.I find that it is difficult for me to wrap my head around pain and suffering on such an immense scale. Americans often think of the homeless as drug-addicted men that don’t want to work, but the truth is that about a quarter of the homeless population is made up of children. And things are getting particularly bad on both the east and west coasts. If the U.S. economy really was “booming”, the truth is that homelessness in Los Angeles would not be up by 50 percent.
Triggered- NYC Millennials Unloading Feelings In Rage Rooms - Angry New Yorkers with pent-up rage have been going to safe-spaces for destruction to unload their triggerings, according to reports by the Wall Street Journal and Vox. The Rage Cage and the original Wrecking Club are two "rage rooms" conveniently located under Penn Station - used by over 600,000 passengers a day, making it the nation's busiest - and perhaps most enraging, rail hub. At the Rage Cage, customers pay $45 to $120 to come in and smash dishes and electronics. Packages at the Wrecking Club, meanwhile, range from $25 for a “Hit It and Quit It,” 15-minute option to $245 for an “Extra Mad House” half-hour session for up to six participants. –WSJ After signing waivers, participants are handed protective gear, including a construction helmet and gloves, before unbottling their rage on a wide variety of inanimate objects ranging from kitchen plates to computer equipment to furniture. Wrecking Club founder and co-owner Tom Daly, a former accountant, says he came up with the rage room idea on his own and only later learned there were similar venues in other cities—and one that operated in New York City in the 1970s. He chose his location in a former restaurant because it was the only place he could rent. When you’re opening a rage room, he says, not many landlords want your business. “Beggars can’t be choosers.” –WSJ
They look like cops, but they’re not. And they’re all over Michigan. They have guns, wear badges and patrol Michigan’s streets. They're even in uniform. But they’re not real cops. Across Michigan, police departments have enlisted civilians to work alongside licensed officers to patrol communities and even assist real cops with arrests. But unlike the regular officers licensed by the state, these armed civilians are unregulated. A Detroit Free Press investigation found there are no state-established training requirements for reserve officers, as they are commonly known; no standards for screening their qualifications, and no process for monitoring their conduct. The state agency responsible for police licensing and training is not regulating reserve officers — despite gaining authority last year to do just that — and has no idea how many such unlicensed volunteers there are statewide. This lack of oversight continues despite numerous incidents of questionable — even illegal — conduct by reserve officers in recent years.
Hundreds of improperly stored remains found in Detroit funeral homes -- A series of grisly discoveries at two local funeral homes last week shocked Detroit-area residents and prompted news coverage around the world. Dozens of fetuses and bodies of infant children were found in cardboard boxes, concealed in a drop ceiling or otherwise improperly stored at the Cantrell and Perry funeral homes, which have both been shut down. State and city authorities have launched a full-scale criminal investigation into the handling of corpses and cremated remains at the two funeral homes, one on the city’s east side, the other near Wayne State University. Many questions remain about what combination of gross negligence, profit-gouging and sheer indifference is involved, but one thing is certain: This macabre episode demonstrates the continuing decay of Detroit, the poorest urban center in America. So far over a hundred fetuses, infant bodies and adult corpses have been found improperly stored, as well as 269 sets of cremated remains. Other funeral homes are being searched. An attorney for the parents of one of the deceased children believes there could be hundreds more improperly disposed bodies. The first report came on October 12. Michigan state inspectors got a tip that the bodies of infant children and fetuses were improperly stored in the Cantrell Funeral Home on Mack Avenue on Detroit’s east side. Police and state investigators uncovered the body of a newborn infant and the remains of 10 fetuses hidden in a drop ceiling. Last April, the Michigan Department of Licensing and Regulatory Affairs (LARA) closed Cantrell after they found 21 improperly stored bodies, “some of then covered with mold,” according to the Detroit News. As of October, a total of 38 unattended bodies and 269 containers of cremated remains have been discovered at the facility. The police raided Perry Funeral Home on October 19, discovering the remains of 63 fetuses or bodies in cardboard boxes or freezers. There are indications that the funeral home charged Medicaid for the cost of burial when the child’s remains were actually stored in a mortuary school connected to Wayne State University.
Hundreds of bodies and other remains hidden in Detroit funeral homes -- Last week, state authorities raided two Detroit funeral homes following the shocking revelation that hundreds of bodies and cremated remains had been hidden or stuffed away for months if not years. The scandal has brought to light not just the devastating increase in poverty in Detroit, but the fact that increasing numbers of people throughout the United States cannot afford to bury their loved ones. In the former Motor City, lawsuits have been initiated by parents and family members against the Cantrell Funeral Home where the remains of 11 infants, including 10 fetuses, were found hidden in a drop ceiling. An earlier raid in April uncovered the cremated remains of 269 people as well as bodies covered with mold in a garage. A raid at the Perry Funeral Home near Wayne State University similarly revealed the remains of 63 fetuses or infants . Both funeral homes have been closed down by the Michigan Department of Licensing and Regulatory Affairs (LARA).While the Detroit situation seems to involve elements of fraud and outright criminality, the underlying crisis is the poverty of residents. With an average cost for a funeral with cremation at $6,800 and burial at $10,000, the phenomenon of unclaimed bodies and burial crises is nationwide.An Associated Press article published in February stated that bodies of the deceased are piling up across the country as public resources for burials for the poor dwindle. “About 15 states provide some funding for unclaimed body burials or cremations,” states the AP, “while the rest have pushed the cost to local governments, said Scott Gilligan, general counsel for the National Funeral Directors Association.” West Virginia’s indigent burial program has run out of money every year since 2004. The state has paid for more than 10,000 indigent burials since 2011. Indiana’s appropriations do “not meet the current demands on the program” stated a spokesman for the Family and Social Services Administration. The $1,100 reimbursement provided to funeral directors in Massachusetts to bury the indigent and unclaimed has stayed the same over the past 35 years, AP noted.
Nearly 150,000 New York City public school students are homeless -- The ever-growing crisis of housing and homelessness in New York City is forcefully emphasized by newly released data which documents that during the last school year more than one in ten public school students, approximately 150,000 out of 1.1 million, were without permanent housing. This is the highest number ever recorded, and the third year in a row that the total has exceeded 100,000. The report, prepared by Advocates for Children of New York based on data collected by the State of New York, shows the dramatic growth of youth homelessness since the start of the economic crisis a decade ago. The number of homeless students was just short of 51,000 during the 2007-08 school year, demonstrating a nearly three-fold increase over the last decade.Homeless students include both those living in city shelters, approximately 38,000 in 2017, and those temporarily living “doubled up” with relatives or friends. According to the city, so far this year the number of families with children living in shelters is over 40,000. Another 5,600 were staying in cars, parks, campgrounds, trailers or abandoned buildings. The problem is especially severe in 144 of the city’s 1,800 public schools, where a third of the students are homeless. The homeless student population is concentrated in the city’s poorer neighborhoods: most especially the Bronx (nearly 40,000), but also northern Manhattan, and sections of Brooklyn and Queens. Students living in shelters tend to have a significant number of absences, averaging 30 days in 2017-18. Due to the distance between shelters and schools, some students have substantial commutes, adding to stress and loss of time. The city’s band aid solution is to move some families to shelters closer to their children’s schools. So far, only 200 have been relocated.Statistics indicate that homelessness has a severe impact on academic performance. Only 12 percent of students living in shelters passed the state math exam, and only 15 percent passed the English exam in 2015-16. They are also less likely to graduate high school on time. The negative effects of homelessness on young people will have consequences throughout their lives.
Self-driving school bus test halted in US - French-based transport firm Transdev has been ordered to stop an "unlawful" test of a driverless school bus in Florida by US regulators. The regulator said the firm had not been authorised to transport schoolchildren in Florida, and said the test was "irresponsible" and "inappropriate". Transdev said it would stop the test a week early. The firm said it believed the pilot met testing requirements. But the National Highway Traffic Safety Administration (NHTSA) said the test of the EZ10 Generation II driverless shuttle in the Babcock Ranch community in Florida was outside the scope of what the firm had been authorised to do. "Innovation must not come at the risk of public safety," Heidi King, NHTSA deputy administrator said in a statement on Monday. "Using a non-compliant test vehicle to transport children is irresponsible, inappropriate, and in direct violation of the terms of Transdev's approved test project," she added. The NHTSA said it had given Transdev permission in March to import the driverless shuttle on a temporary basis for testing and demonstration purposes, but not as a school bus. The regulator said it had sent a letter to the firm ordering it to "immediately stop transporting schoolchildren" or risk fines, "the voiding of the temporary importation authorisation, and/or the exportation of the vehicle".
U.S. regulator orders halt to self-driving school bus test in Florida (Reuters) - The National Highway Traffic Safety Administration on Monday said it had ordered Transdev North America to immediately stop transporting school children in Florida in a driverless shuttle, as the testing could be putting them at “inappropriate” risk. Transdev’s use of its EZ10 Generation II driverless shuttle in the Babcock Ranch community in southwest Florida was “unlawful and in violation of the company’s temporary importation authorization,” the auto safety agency, known as NHTSA, said in an order late on Friday. “Innovation must not come at the risk of public safety,” its deputy administrator, Heidi King, said in a statement. “Using a non-compliant test vehicle to transport children is irresponsible, inappropriate, and in direct violation of the terms of Transdev’s approved test project.” In March, NHTSA gave Transdev permission to temporarily import the driverless shuttle for testing and demonstration purposes, but not as a school bus. Late on Monday, the company confirmed it had voluntarily agreed to stop what it called a planned six-week pilot project one week earlier “out of deference to NHTSA.” In a written statement, Transdev said the “small pilot was operating safely, without any issues, in a highly-controlled environment.” The company said it believed the pilot met the requirements of the testing and demonstration project approved by NHTSA for adults and children to ride on the same route. It added that it did not sacrifice safety for progress, would never do so, and was committed to complying with regulations.
In many schools, 'climate change is playing catch-up' - On a hot sunny day, right in the middle of August, a couple of teachers from Martha’s Vineyard are sitting at picnic tables in the shade at the Cape Poge Wildlife Refuge, writing down observations about different shells that have been sitting in sea water or vinegar, and then smashing them with a hammer, to see how easily they break. They’re trying out a lesson Shannon Hurley has come up with for middle schoolers, on the connection between climate change and ocean acidification. Hurley runs educational programs for schools across the Vineyard, going into schools and taking classes on field trips, for the Trustees of Reservations, a non-profit that preserves land across Massachusetts.Last year was the first year the Trustees ran a climate-change specific program, on erosion, for second graders. This is the first year they’re expanding into middle school. They’re able to do that, in part, because climate change is now officially in the state science standards in Massachusetts, as of 2016.“Oftentimes what we have to do is hit the standards, to make it valuable, time-wise,” said Hurley, adding that now that climate change is part of what teachers have to address in certain grades, particularly in middle school, the Trustees are able to “expand our offerings a lot more.” For a lot of teachers, “professional development with organizations like the Trustees is the way to continue to grow your base knowledge that you already have,” said Casey Hayward, who teaches fifth and sixth grade at Martha’s Vineyard Public Charter School. She took a day out of her summer vacation to go to Hurley’s workshop on Chappaquiddick. “If we didn’t have the Trustees doing programs like this, we would have to be doing a lot of this on our own.”
Billionaires v teachers- the Koch brothers' plan to starve public education - Arizona has become the hotbed for an experiment rightwing activists hope will redefine America’s schools – an experiment that has pitched the conservative billionaires the Koch brothers and Donald Trump’s controversial education secretary, Betsy DeVos, against teachers’ unions, teachers and parents. Neither side is giving up without a fight. With groups funded by the Koch brothers and DeVos nudging things along, Arizona lawmakers enacted the nation’s broadest school vouchers law, state-funded vouchers that are supposed to give parents more school choice and can be spent on private or religiously affiliated schools. For opponents, the system is not about choice but about further weakening the public school system. A half-dozen women who had battled for months against the legislation were angry as hell. Embed Convinced that the law would drain money from Arizona’s underfunded public schools, these women complained that Arizona’s lawmakers had ignored the public will and instead heeded the wishes of billionaires seeking to build up private schools at the expense of public schools. “We walked outside the Capitol Building, and we looked at each other, and said, ‘What now?” said one of the women, Dawn Penich-Thacker, a mother of two boys in public school and a former army public information officer. “We had been fighting this for four months. We realized that there’s something we can do about it. It’s called a citizens’ referendum. We said, ‘Let’s do it.’” They would need 75,321 signatures to get their referendum on the ballot to overturn the law. They formed a group, Save Our Schools, and set out to collect the needed signatures. Opposing lobbyists sneered, saying no way could they do that. The six women inspired a statewide movement and got hundreds of volunteers to brave Arizona’s torrid summer heat to collect signatures – in parks and parking lots, at baseball games and shopping malls. Their message was that billionaire outsiders were endangering public education by getting Arizona’s legislature – in part through campaign contributions – to create an expensive voucher program. “We knew something was rotten in the state of Arizona,” said Beth Lewis, a fifth-grade teacher who is president of Save Our Schools. “We drew a line in the sand. We said, ‘We’re not going to let this happen.’”
Union, Democrats use “fact-finding” ploy to block Los Angeles teachers’ strike - Last August, angry Los Angeles teachers voted by more than 98 percent to strike the nation’s second-largest school district. The overwhelming vote followed nearly a year and a half of failed negotiations and more than a year in which the United Teachers Los Angeles (UTLA) ordered members to work without a contract. The UTLA has still refused to set a strike date for 33,000 educators but instead triggered “fact finding.”The UTLA kept teachers working without a contract throughout the spring’s walkouts in West Virginia, Oklahoma, Kentucky and Arizona, as well as during the recent strikes in Washington state—in line with the national policy of the American Federation of Teachers and National Education Association of isolating and betraying each struggle.The UTLA is now preoccupied with preventing a walkout prior to the midterm elections. The union does not want any action that would expose the anti-working class character of the Democratic Party and undercut the turnout of voters for the Democrats. “The most important thing we teachers can do now is make sure that Gavin Newsom is elected governor of California,” UTLA President Alex Caputo-Pearl recently stated. To that end, the union has now invoked “fact-finding,” a procedural runaround that will delay any possible walkout until after Thanksgiving at the earliest. The mechanism, established by Democratic Governor Jerry Brown in 2011, involves a state-appointed chairperson, supposedly a “neutral” arbiter, to assess the demands of both sides and submit a nonbinding report on the financial state of the district. Not only is this a thinly veiled delaying tactic to get past the elections and wear down public sector workers, it is designed to further water down the already pitifully inadequate demands of the union.
What Is Harvard Trying to Hide? - The long war over affirmative action turned hot again last week, as Harvard and lawyers for Asian-American applicants duked it out in a federal courtroom in Boston in a closely watched case that could end consideration of race in college admissions. I’m a veteran of that war. Nearly three decades ago, as a student, I was at the vanguard of a movement that took no side in the then-intense debate over affirmative action but advocated for something more radical than it might first appear: breaking down the secrecy over how elite colleges choose whom to admit to their ranks. Winning the chance to attend an Ivy League school is an increasingly daunting feat. If schools aren’t just going to auction spots to the highest bidder, these colleges (which receive millions in federal funding and a slew of tax benefits) have a moral responsibility to defend their admission policies. Students, parents, faculty and alumni are also entitled to know that the schools’ claims about how they dole out the coveted slots aren’t just hot air. [.. My role in that crusade also led to a federal courtroom.. […] Harvard is right about one thing: Notwithstanding claims last week that the current trial isn’t about affirmative action, SFFA wants the school’s secrets told because it thinks that will bring down the curtain on the use of race in college admissions. The Trump administration has also weighed in on the case, apparently hopeful that it could be a vehicle to get the Supreme Court to bury affirmative action once and for all. (though the Justice Department’s filing takes no position on whether preferences for alumni are defensible).But the fact that those demanding transparency have a particular ideological bent is no justification for perpetuating secrecy around the process. Those defending Harvard’s system—whether its use of race, its approach to diversity or its preferences for athletes and so-called legacies—should do so on the facts, not by hiding the facts.
Education Corporation of America files for receivership: Using lawyers’ tricks to suck up more federal student-loan money Education Corporation of America (ECA), a for-profit college chain, filed a lawsuit a few days ago in an Alabama federal court. The lawsuit seeks to put ECA into receivership, and it asks the court to halt all litigation against it. ECA also wants Betsy DeVos and the Department of Education to keep showering it with student-loan money while it straights out its financial affairs. ECA is closing more than two dozen of its campuses; and it needs to keep getting federal student-loan money, it argues, so it can do a "teach out" at campuses it intends to close. If it allows current students to finish their academic programs (through a teach-out), those students won't be eligible to have their student loans forgiven under the "closed school" rule. That will save the Department of Education a lot of money, ECA says. ECA operates under numerous brand names, including Virginia College, New England College of Business, Brightwood College, and Golf Academy of America; and it is in big financial trouble. It submitted a list of legal claims against it to the Alabama court, which is 15 pages long. Landlords are suing for back rent and other litigants have sued for breach of contract, fraud, failure to pay wages, race discrimination, age discrimination, false advertising and some other stuff. Why doesn't ECA just file for bankruptcy? One reason: Under federal law, ECA would immediately lose access to all federal money if it filed for bankruptcy. It is hoping to keep federal money flowing as a long as possible. I hope Judge Abdul Kallon sees through ECA's dodgy litigation ploy and refuses its plea for a receiver and an injunction against its creditors. (Judge Kallon granted ECA a temporary restraining order on October 19, but he will have to extend it to keep ECA's creditors at bay.) ECA needs to close, and it needs to close NOW. Every day it continues operating is another day uninformed students will be taking out student loans to pay for an ECA education that probably won't get them a good job. In fact, ECA's own accrediting agency scored ECA's campus-level job placement rate at only 16 percent.
Ex-student loan official- 'We dropped a trillion dollars of debt into the market' with little thought or oversight - We’ve been talking about America’s student-loan problem all wrong, according to the former top student-loan official in the country.Seth Frotman, who resigned in protest earlier this year from his role as the Consumer Financial Protection Bureau’s student loan ombudsman, made the case Thursday that solving our nation’s student-debt challenges requires acknowledging policy makers’ and company executives’ role in creating it.In his speech, Frotman painted a picture of a crisis built on policy makers’ choices. He highlighted how state officials cut funding for public higher education, pushing up prices and requiring students to increasingly rely on debt to finance college. At the same time, policy makers did little to put regulations in place to handle the rapid rise in student loans, according to Frotman.“Simply put, we dropped a trillion dollars of debt into the market without any thought of the oversight, consumer protection, or accountability that is necessary to manage it,” he said. In remarks delivered at a conference for consumer rights attorneys hosted by the National Consumer Law Center, Frotman derided pundits and experts who have attempted to minimize the consequences of America’s $1.5 trillion in student debt. Too often, they frame it as a temporary problem of individuals who will likely benefit down the road from investing in their education.His former boss is one of the most egregious promoters of this rhetoric, Frotman suggested. “Some even go so far as to declare on CNBC that student-loan borrowers are not suffering amid a debt crisis, but are instead themselves an economic and moral hazard to the rest of us,” Frotman said, according to prepared remarks.Though Frotman didn’t mention him by name, the comment is likely a reference to a September CNBC appearance by CFPB acting director Mick Mulvaney, who said on the network that he’s worried from “a moral standpoint” about borrowers not repaying their student loans.Frotman added, “Minimizing average folks’ struggle, and blaming others is always easier than acknowledging our role — our collective decisions and policies — in how we ended up here.”
The Student Loan Debt Crisis Is About to Get Worse – Bloomberg - Federal student loans are the only consumer debt segment with continuous cumulative growth since the Great Recession. As the costs of tuition and borrowing continue to rise, the result is a widening default crisis that even Fed Chairman Jerome Powell labeled as a cause for concern. Student loans have seen almost 157 percent in cumulative growth over the last 11 years. By comparison, auto loan debt has grown 52 percent while mortgage and credit-card debt actually fell by about 1 percent, according to a Bloomberg Global Data analysis of federal and private loans. All told, there’s a whopping $1.5 trillion in student loans out there (through the second quarter of 2018), marking the second-largest consumer debt segment in the country after mortgages, according to the Federal Reserve. And the number keeps growing. Student loans are being issued at unprecedented rates as more American students pursue higher education. But the cost of tuition at both private and public institutions is touching all-time highs, while interest rates on student loans are also rising. Students are spending more time working instead of studying. (Some 85 percent of current students now work paid jobs while enrolled.) Experts and analysts worry that the next generation of graduates could default on their loans at even higher rates than in the immediate wake of the financial crisis. Student loan debt currently has the highest 90+ day delinquency rate of all household debt. More than 1 in 10 borrowers is at least 90 days delinquent, while mortgages and auto loans have a 1.1 percent and 4 percent delinquency rate, respectively, according to Bloomberg Global Data. While mortgages and auto loans have experienced an overall decrease in delinquencies since 2010, student loan delinquency rates remain within a percentage point of their all-time high in 2012. Students attending for-profit universities and community colleges represented almost half of all borrowers leaving school and beginning to repay loans in 2011. They also accounted for 70 percent of all defaults. As a result, delinquencies skyrocketed in the 2011-12 academic year, reaching 11.73 percent.
Federal Student Loan Concerns Not Reflective of CU Student Lending - A Bloomberg article, “America’s Student Loan Debt Crisis Is About to Get Much Worse,” published in CU Times Oct. 18 sounded the alarm regarding the challenges faced by many college graduates in dealing with mounting student loan debt. While no one would dispute that this is a serious matter, it is important to differentiate between the concerns associated with federal student loan programs and the private student loan market. A lack of understanding about private student loans is a major factor in the unfortunate reality that less than 13% of credit unions currently provide student loan financing, and private education loans represent only 0.31% of total credit union assets, SNL Financial reported. As of Q1 2018, the total amount of private student loans outstanding was approximately $117 billion, a fraction (less than 8%) of the estimated $1.5 trillion in student loan debt nationwide, according to NerdWallet. Besides sheer volume, private student loans differ from federal loans in another important way: Credit quality is substantially better. Because they require a credit history or qualified co-signer, the default rate on private student loans has historically been about 1% per year, comparable to the default experience on residential mortgages and well below the 11%-plus three-year default rate on federal student loans. As with all student loan borrowing, it is important that individuals look at potential outcomes before taking on student loan debt by understanding what kind of income stream their future careers will generate. A rule of thumb is that total student loan debt should not exceed the borrower’s expected income in their first year out of school.
How a Gang of Hedge Funders Strip-Mined Kentucky’s Public Pensions - After Chris Tobe was removed, the remaining members of the committee approved a $200 million investment in a hedge fund called Arrowhawk Capital Partners. Tobe, though he remained a trustee, only learned about the deal after the fact, while reading the magazine Pensions & Investments. In the years since that big Arrowhawk play, Kentucky’s public pensions have descended into financial crisis, a crisis that threatens to have ripple effects across the state. “Poor, rural counties in Kentucky have two major economic drivers,” state Rep. Jim Wayne explained. “One is the school system and the other is the courthouse. Most of them have no other industry.” Of the 120 counties in Kentucky, Wayne said, “government jobs is the No. 1 employer.” By 2016, the credit rating agency Standard & Poor’s declared Kentucky’s the worst-funded state pension system in the country. At that point, the state was meeting only 37.4 percent of its funding obligation — half the national median of 74.6 percent.Tobe had never heard of Arrowhawk, and he quickly figured out why: Arrowhawk was a new fund whose first investor was the Kentucky Retirement Systems, or KRS. During his tenure as a trustee, KRS staff had proposed moving 5 percent — roughly $650 million — of the pension’s total holdings, then invested almost entirely in a mix of stocks and bonds, into large, established “funds of funds” — vehicles that allow investors to buy a basket of hedge funds, rather than risking everything on a single fund. Instead, the staff had steered the investment committee in 2009 to a startup fund with no track record. Tobe pressed the issue at several public meetings of the KRS board and eventually, in 2010, an internal audit revealed that Arrowhawk paid more than $2 million to a middle man named Glen Sergeon to land Kentucky as a client. KRS’s chief investment officer resigned during the course of the investigation (only to land a private-sector job as a managing director at a giant investment consulting firm). “Bad publicity, along with mediocre performance, sealed the fate of Arrowhawk,” Tobe wrote in his self-published book, “Kentucky Fried Pensions.” Two and a half years after Kentucky selected the firm for its first-ever hedge fund investment, Arrowhawk shut its doors.
Cocaine Deaths Hit Record High; Next Wave Of Addiction Crisis Is Here - While the total number of fatal drug overdoses nationwide has plateaued for six consecutive months, stimulants such as methamphetamine and cocaine have triggered the next wave of the addiction crisis. In the 12-month period ending in March 2018, the Centers for Disease Control and Prevention (CDC) reportedthat overdose deaths from cocaine spiked 22% from prior year to 14,205. Annual drug overdose data shows the addiction crisis has been developing for almost four decades, and the explosion in the rate of growth increased sharply after the financial crisis of 2007-2008 with the introduction of the opioid epidemic. In the 12-month period ending in March 2018, 46,655 people died from opioid overdoses, a small decline of 2.7% from the top of 47,944 in 2017. Daniel Ciccarone, a professor at the University of California at San Francisco, told Bloomberg, CDC figures suggest the opioid epidemic is in its later stages. "We could interpret this as good news because the heroine cycle could be peaking or waning," he said. According to the National Institute on Drug Abuse, cocaine overdose deaths could be connected to opioids. There has been a surge in drug users knowingly and unknowingly ingesting cocaine cut with synthetic opioids, which could explain the recent acceleration of cocaine deaths. Historically, opioid epidemics are followed by a rise in the use of stimulants such as methamphetamine and cocaine, Ciccarone said. "As people's heroine habits deepen they grow increasingly tolerant, cocaine comes in as a booster -- the speedball." "The system has set us up for failure," said one Baltimore junkie, who shoots up heroin in front of the camera, then overdoses before he can smoke his crack cocaine.
UN’s 10-year plan to tackle world’s drug problem has been ‘spectacular failure’ as production and consumption soar, report says The UN’s 10-year global strategy to eradicate the world’s illegal drugmarket has been “a spectacular failure of policy”, a report by a network of 174 NGOs has concluded.The report said there had been a 145 per cent increase in drug-related deaths over the last decade, culminating in around 450,000 deaths per year in 2015.It also found that despite a specific target to eliminate or reduce the “illicit cultivation of opium poppy, coca bush and cannabis plant”, there was a 130 per cent increase in the cultivation of opium poppies, a 34 per cent rise in the coca bush production and no sign of a reduction in cannabis growing.The report, by the International Drug Policy Consortium (IDPC) – Taking stock: A decade of drug policy – evaluated the UN Office of Drug and Crime’s 10-year plan, which it said “continues to generate a catastrophic impact on health, human rights, security and development, while not even remotely reducing the global supply of illegal drugs”. By analysing data from UN, government, academic and civil society sources, the report says it “illustrates the carnage that the war on drugshas wreaked over the past decade”.
Cosmonaut brains show space travel causes lasting changes --Our fleshy forms evolved to work within the tug of gravity. Take that pull away, and the clockwork operation of bodily functions just doesn't keep ticking at the same steady beat. From fluids floating the wrong way to DNA expressing differently, space travel is tough on even the healthiest human body. Now, a study of recently active cosmonauts adds to the concern for one particularly vital organ: the brain. The results suggest that deformations to brain tissue caused by weightless conditions can linger even after space travelers have had their boots back on Earth for seven months. The research, published this week in the New England Journal of Medicine, documents the impacts of space travel on cosmonauts who each spent roughly 189 days on the International Space Station. Led by scientists at the University of Antwerp, the team captured images of 10 male cosmonauts' brains using magnetic resonance imaging before and after each mission. They repeated the scans seven months later for seven of these space adventurers.As previous studies have demonstrated, spaceflight seemed to increase the noggin's cerebrospinal fluid, a clear liquid that acts as a cushion for your brain during motion or impacts and helps maintain the correct pressure.“We were designed for standing in gravity on Earth, and once that force is released, all the bodily fluids move upward,” says study author Peter zu Eulenburg of the Ludwig Maximilian University of Munich. The latest study suggests that the excess cerebrospinal fluid seems to compress the brain's grey matter—the dark-colored neural tissue that contains nerve fibers and nerve-cell bodies. Though the brain largely bounced back after seven months on Earth, some effects seemed to linger.
Sperm Counts Continue to Fall - Men’s sperm have been decreasing in number and getting worse at swimming for some time now—and, at least in the United States and Europe, new research says it’s getting worse. A pair of new studies unveiled this week at the Scientific Congress of the American Society for Reproductive Medicine (ASRM) in Denver suggest that American and European men’s sperm count and sperm motility—that is, the “swimming” ability of sperm cells—have declined in the past decade, which follows a similar, broader trend observed by many scientists over the past few decades. One study presented at the ASRM summit, conducted jointly by a fertility center in New Jersey and a fertility center in Spain, found that the percentage of nearly 120,000 male infertility patients whose total motile sperm count (TMSC) numbered more than 15 million (sperm counts below which are considered low, according to the Mayo Clinic) decreased from 85 percent in the 2002–05 period to 79 percent in the period of 2014–17. The percentage of patients whose TMSC clocked in between zero and 5 million, meanwhile, increased from 9 percent to more than 11.5 percent. The other study, conducted by researchers at Mount Sinai’s Icahn School of Medicine in collaboration with the California Cryobank and Reproductive Medicine Associates of New York, compared more than 124,000 samples from 2,600 sperm donors between the ages of 19 and 38 in Los Angeles, Palo Alto, Houston, Boston, Indianapolis, and New York City. The researchers found that total sperm count, sperm concentration, and TMSC all decreased over time from 2007 to 2017—except in New York City, where all three parameters held steady. (In Boston, too, the researchers note, sperm count held steady, while concentration and TMSC declined.) “Given that donors have higher than average sperm counts, these trends would likely be magnified in the general population,” writes the lead study author, Sydney Chang, a fellow at Reproductive Medicine Associates of New York.
Rates Of STDs Rise Sharply- We Are Sliding Backward - The rate of sexually transmitted diseases is rising sharply. In fact, the rates of three sexually transmitted infections are at all-time record highs in the United States. Last year, nearly 2.3 million US cases of these sexually transmitted diseases were diagnosed, according to preliminary data. This data was reported on by Fox 13 out of Salt Lake City, Utah. That’s the highest number ever reported nationwide, breaking the record set in 2016 by more than 200,000 cases, according to the Centers for Disease Control and Prevention. “It is time that President Trump and [Health and Human Services] Secretary [Alex] Azar declare STDs in America a public health crisis,” David Harvey, executive director of the National Coalition of STD Directors said Tuesday. Harvey’s group co-hosted the National STD Prevention Conference in Washington Tuesday where the CDC made the announcement that the rates of syphilis, gonorrhea, and chlamydia have climbed upward again for the fourth year in a row.“What goes along with that is emergency access to public health funding to make a dent in these STD rates and to bring these rates down and to ensure that all Americans get access to the health care that they need,” he said.Others say this trend should not come as a surprise. “I think over the last five years, we’ve seen a rapid increase in the prevalence of sexually transmitted infections in the US, and we’re also starting to see a plateau in our fight against the HIV epidemic, as well,” said Rob Stephenson, a professor and director of the Center for Sexuality and Health Disparities at the University of Michigan in Ann Arbor. Stephenson added that “it’s not a surprising trend.”But the focus of concern is with syphilis, gonorrhea, and chlamydia. “We’re talking about millions of infections with just these three infections,” said Dr. Edward Hook, endowed professor of infectious disease translational research at the University of Alabama at Birmingham’s School of Medicine and scientific committee chair of the National STD Prevention Conference. Hook says this trend is concerning because the increase in these three STDs is significant. “Gonorrhea diagnoses that were reported to the CDC increased by nearly 67%. Diagnoses of primary and secondary syphilis increased over 75%, and chlamydia rates continued to increase,” he said according to Fox 13. “It’s important to remember that while these are preliminary data, and the data are eight months out of date. There’s absolutely no reason to think that the increases that are being described by the CDC haven’t continued into 2018.”
Polluted Air Sends Up to 33 Million People to the ER Each Year - Earlier this week, President Trump posted a false tweet that boasted about the U.S. having the "cleanest air in the world - BY FAR!" But a new study has found that millions of people around the world—including U.S. citizens—are going to the ER for asthma attacks because they are breathing dirty air.Between 9 to 33 million visits to the emergency room for asthma worldwide may be triggered by breathing in air polluted by ozone or fine particulate matter, a first-of-its-kind global study from George Washington University has found.Ozone pollution is created when emissions from industrial facilities, electric utilities, motor vehicle exhaust and other sources interacts with sunlight. Fine particulate matter—or extremely tiny particles of pollution often associated with industrial emissions—can lodge deep into the lungs. These two forms of air pollution that are linked to asthma as well as a vast array of negative health impacts.In the study, published Wednesday in the journal Environmental Health Perspectives, the researchers examined emergency room visits for asthma in 54 countries and Hong Kong and then combined that information with pollution levels around the globe.Here are some of the key findings:
- Nine to 23 million annual asthma emergency room visits globally (8 to 20 percent of total global asthma ER visits) may be triggered by ozone.
- Five to 10 million asthma emergency room visits every year (4 to 9 percent of total global asthma ER visits) were linked to fine particulate matter.
- About half of the asthma emergency room visits attributed to dirty air were estimated to occur in South and East Asian countries, notably India and China.
- Although the air in the U.S. is relatively clean compared to South and East Asian countries, ozone and particulate matter were estimated to contribute 8 to 21 percent and 3 to 11 percent of asthma ER visits in the U.S., respectively.
Six children dead in virus outbreak at US health centre --A viral outbreak at a New Jersey long-term medical care centre has killed six children and left a dozen more infected. State officials confirmed a total of 18 cases of adenovirus among paediatric patients at the Wanaque Center for Nursing and Rehabilitation on Tuesday. Adenoviruses typically cause "mild illness" but the children affected are "medically fragile", officials say.The state investigation is ongoing. The centre is now closed to new patients.The children involved have "severely compromised immune systems" rendering them more susceptible to the virus, the health department said. “The combination of a worse strain of adenovirus together with a fragile population has led to a more severe outbreak," it added. The health facility in Haskell is privately owned. The centre did not immediately respond to a request for comment from the BBC.According to a Department of Health release, state officials began investigating on Sunday and continued on Tuesday.On Sunday, an inspection team found "minor handwashing deficiencies" at the centre, which also provides short- and long-term adult nursing and rehabilitation services.It is still unclear how and when exactly the outbreak began.Local news site NewJersey.com reported that a letter had been sent to parents of patients about an outbreak on 18 Oct, but officials did not confirm any details about the virus until Tuesday.The state health department is "continuing to work closely with the facility on infection control issues".Children in the centre's paediatric ward are seriously ill - many are disabled, in comas, or cannot walk or speak, the North Jersey Record reported. The children affected have not been identified.
Europe Still Struggling With Major Measles Outbreak - So far this year, Europe has experienced 41,000 measles cases and 40 deaths according to the World Health Organization.As Statista's Niell McCarthy notes, the number of cases is far higher than any other 12-month total reported so far this decade. 2017 was the previous worst year with 23,927 cases in total. Seven countries in the WHO European Region have seen over 1,000 infections this year: France, Georgia, Greece, Italy, the Russian Federation, Serbia and Ukraine. In the 12 months from September 2017 to August 2018, Ukraine was the worst affected country by far with 32,618 measles cases. Serbia came second with 5,710 while Russia was third with 3,940.
The risks of synthetic biology in the information society -- The instructions for making viruses from synthetic strands of DNA are on the internet. And, the strands themselves are available for purchase online. It's called synthetic biology. Right now it's not easy to get the strands to you need to make dangerous viruses or to put them together. But it is becoming easier.That's the issue that exploded concerning the synthetic construction of an thought-to-be extinct horsepox virus. The problem is that the instructions for making horsepox are distressingly useful for constructing a smallpox virus, a virus responsible for hundreds of millions of deaths in the 20th century alone until its eradication. Smallpox, you'll recall, was eradicated through a successful worldwide effort led by the World Health Organization. After 1980 it was no longer necessary to vaccinate people against the disease and very few people alive today have been vaccinated against it. Not surprisingly, an outbreak resulting from, say, the inadvertent or possibly intentional release of a synthetic smallpox virus from a lab could prove devastating worldwide. Synthetic biology perhaps most clearly illustrates that the benign assumption most modern people share about new technology is dangerously misguided. We have many other examples. Synthetic biology poses an altogether different and more severe threat. It's not just our hearts and minds at stake. It is our very lives. And, yet the risks of this biology are very much linked to the information revolution we've experienced in the last few decades. Which is why the online publication of the findings of the team that assembled the horsepox virus created such a stir. The headline in Science promised a disturbing account: "How Canadian researchers reconstituted an extinct poxvirus for $100,000 using mail-order DNA." The headline probably overplayed the threat a bit. But not by much.
Massive Study Finds Eating Organic Slashes Cancer Risks --Eating organic foods free from pesticides is strongly correlated with a dramatic reduction in the risk of cancer,according to a groundbreaking study published today in an American Medical Association journal.The observational study led by a team of French government scientists tracked the diets of nearly 69,000 people. Four years later, those who consumed the most organic foods were 25 percent less likely to develop cancer.For people consuming the highest amount of organic food, the study found a significantly lower risk of non-Hodgkin lymphoma, all lymphomas and postmenopausal breast cancer. The authors conclude, "Although our findings need to be confirmed, promoting organic food consumption in the general population could be a promising preventive strategy against cancer."Pesticides linked to cancer include the weed killer glyphosate, the active ingredient in Monsanto's Roundup, and the organophosphate pesticides malathion and diazinon."This study provides more evidence suggesting pesticides in food may be harmful," said EWG Toxicologist Alexis Temkin, Ph.D. "Low levels of synthetic pesticides, including those linked to cancer and other serious health problems, are found in some conventionally grown fruits and vegetables. Especially for those items, choosing organics is better for health as well as for the environment." The scientists focused on 16 different organic food and beverage products, including fruits and vegetables, soy-based foods, eggs, dairy, grains, meat and fish, among others.
America Has A Milk Problem - Not only does America have milk - it’s got a surplus of over 8 million metric tons, forcing dairy farms to shutter and farmers to simply start dumping millions of gallons of milk that far exceeds domestic and foreign demand. Declining consumption, increased production, retaliatory tariffs and lower prices in the face of increased costs have been walloping American farmers for some two years now, according to the Reedsburg Times Press. Northeastern states are the most affected by the glut. The State of Wisconsin has seen a net loss of more than 400 dairy farms this year alone, and in December last year, the state’s farmers dumped a record 160 million pounds of skim milk they couldn’t sell. That’s three times the amount they were forced to dump in 2012, according to CSMonitor. By July, farmers in the Northeast had dumped 145 million pounds of milk, and 23.6 million pounds of that was dumped in July alone, according to Bloomberg. Much of the blame will be laid on Canada, which moved last year to implement its own supply management by restricting dairy trade from the U.S. But the blame isn’t all about Canada, and you have to follow some less direct paths to the end of this glut. For instance, the European Union has also seen a surge in its exports of dairy, and because Russia in 2014 largely banned all dairy exports from the EU, the EU has tapped up other markets, pushing out American dairy. Nor is it just about exports. Americans, while enjoying a brief flirtation with a yogurt craze, are now weaning themselves off milk, which has always been the dairy farmers top revenue generator. But American farmers aren’t necessarily like other industries from an operational perspective. They milk cows whether the market wants them to or not. They keep producing, even when supply is at the glut level. Then, it’s either shut down or find another way to put all the milk to use.
More than one-third of Americans report eating fast food every day --From 2013 to 2016, more than one-third of adults in the United States ate fast food or pizza every day, a new survey shows from the Centers for Disease Control and Prevention. The percentage of adults who consumed fast food increased with higher family income. 42% of families of four with a total income per year greater than $112,950 reported they ate fast food daily, compared to only 32% for families with a total income of less than $32,360. Time, financial resources, price and availability has influenced America's fast food consumption, the survey explains. Fast food, which is broadly defined as any item obtained from a "fast food/pizza" establishment, is notorious for high caloric, low nutrition meals. The survey used physical examinations and in-person interviews of about 10,000 adults to produce demographic, socioeconomic and health data, including dietary information.
- 44% of Americans will eat fast food for lunch and 42% for dinner.
- Men are more likely to grab fast food at lunch while women consider it more of a snack.
- The most enthusiastic consumers are 20 to 39 years old, 45% of them eat fast food on any given day.
- Only 1 in 10 Americans eat the recommended amount of fruits and vegetables, per CDC.
The fitness industry is booming and yet Americans are more likely to be obese today than ever before, a NCHS National Health Interview Survey shows. Health and wellness are booming, but we're fatter than ever.
Lab-Grown Meat Debate Overlooks Cows' Range of Use Worldwide - A battle royale is brewing over what to call animal cells grown in cell culture for food. The narrative posited by, for now let us call it cultured meat, proponents is that animal agriculture requires large amounts of land and water, and produces high levels of greenhouse gases (GHG). The problem with this dichotomous framing is that it overlooks the rest of the story. Cattle produce more than just hamburgers for well-off consumers, and they typically do so by utilizing rain-fed forage growing on non-arable land. Additionally, cellular hamburger patties are themselves not an environmental impact-free lunch, especially from the perspective of energy use.Cultured meat requires the initial collection of stem cells from living animals and then greatly expanding their numbers in a bioreactor, a device for carrying out chemical processes. These living cells must be provided with nutrients in a suitable growth medium containing food-grade components that must be effective and efficient in supporting and promoting muscle cell growth. A typical growth medium contains an energy source such as glucose, synthetic amino acids, antibiotics, fetal bovine serum, horse serum and chicken embryo extract.If cultured meat is to match or exceed the nutritional value of conventional meat products, nutrients found in meat not synthesized by muscle cells must be supplied as supplements in the culture medium. Conventional meat is a high-quality protein, meaning it has a full complement of essential amino acids. It also provides a source of several other desirable nutrients such as vitamins and minerals, and bioactive compounds.Therefore to be nutritionally equivalent, a cultured meat medium would need to provide all of the essential amino acids, along with vitamin B12, an essential vitamin found solely in food products of animal origin. The process for making cultured meat has technically challenging aspects. It includes manufacturing and purifying culture media and supplements in large quantities, expanding animal cells in a bioreactor, processing the resultant tissue into an edible product, removing and disposing of the spent media, and keeping the bioreactor clean. Each are themselves associated with their own set of costs, inputs and energy demands. One study concluded that "in vitro biomass cultivation could require smaller quantities of agricultural inputs and land than livestock; however, those benefits could come at the expense of more intensive energy use as biological functions such as digestion and nutrient circulation are replaced by industrial equivalents." This idea of "industrial replacement of biological functions" emphasizes the point that nature has already developed a fully functional biological fermentation bioreactor for the conversion of inedible solar-powered cellulosic material, such as grass, into high-quality protein. It is called a cow. Ruminants have evolved, along with their large vat of rumen microbes, to digest cellulose, an insoluble carbohydrate, that is the main constituent of plant cell. That is their super power.
Scientists have found new evidence that tiny pieces of plastic might be accumulating in your poop -A group of Austrian researchers have found evidence that microplastics — extremely small particles of plastic beads, fibers, or fragments — accumulate in human feces. Scientists from the Environment Agency Austria and the Medical University of Vienna analyzed the stool samples of eight participants from all over the world, including Italy, Japan, Poland, the Netherlands, Russian, the United Kingdom, Finland, and Austria. Throughout the study, the participants recorded what they ate in the week prior to their stool sampling. They all drank from plastic bottles or consumed plastic-wrapped foods in that time, according to the study. All eight stool samples tested positive for microplastics. According to the study, published Monday in the United European Gastroenterology Journal, up to nine types of plastic were found in the stool samples.Researchers noted that the microplastics, which can form when larger pieces of plastic break down, could help transmit toxic chemicals and pathogens into the human body. They also noted that the particles could weaken the immune response of the gut. Monday's study may be the first to show the presence of plastics in the human gut, and it comes a few months after the World Health Organization announced it would investigate the potential effects of plastic on human health. The WHO launched the review in March after a separate study found microplastics in 90% of 259 bottles. Previous studies have shown that plastic is present in the food and drinks we consume, including fish and water, though it remains unclear how microplastics affect our bodies.
In 'first study of its kind', researchers detect microplastics in human waste - A new study has found microplastics – particles of plastic smaller than five millimeters – to be present in human stools, the Environment Agency Austria said Tuesday. Eight participants, from Finland, Italy, Japan, the Netherlands, the U.K., Austria, Russia and Poland took part in the pilot study, which was conducted by researchers at the Medical University of Vienna and the Environment Agency Austria.Those taking part – none of whom were vegetarian – kept a food diary in the week preceding their stool sampling. All diaries showed that they were exposed to plastics by either eating food that had been wrapped in plastic or drinking from plastic bottles. Six of the participants ate sea fish.Their stools were analysed at the Environment Agency Austria for 10 types of plastic. As many as nine different plastics, ranging between 50 and 500 micrometers in size, were detected. Polypropylene and polyethylene terephthalate were found to be the most common. "This is the first study of its kind and confirms what we have long suspected, that plastics ultimately reach the human gut," Phillip Schwabl, the study's lead researcher, said in a statement Tuesday. "Of particular concern is what this means to us, and especially patients with gastrointestinal diseases."
CDC's Salmonella Warning- Don't Dress Up Chickens For Halloween - The Centers for Disease Control and Prevention has had to warn Americans about the dangers of dressing up their chickens for the upcoming Halloween festivities. The CDC warns that putting your chickens in a costume could result in a salmonella infection. The agency says handling chickens to put on a costume on them and cuddling the birds can lead to salmonella exposure and an eventual infection. However, for some chicken owners, like Stephanie Morse, the birds are family and their owners enjoy dressing them up each year.“I just like to put a t-shirt on them or a sweater,” Morse said according to KOAA News 5, an NBC affiliate. This Salmonella outbreak appears to be dominated by a strain of bacteria that seems to be resistant to drugs making it much more difficult to treat if a person is sickened. Antibiotics resistance is becoming worrisome to health officials too, as many in developed countries overuse antibiotics, or take them for a virus such as the common cold or the flu. Symptoms of a salmonella bacterial infection, which typically begin 12 to 72 hours after exposure to the bacteria, include diarrhea, fever, and stomach cramps and can last four to seven days. Most people infected with Salmonella recover without treatment, though in rare cases, antibiotics are needed for treatment. This particular strain of Salmonella has demonstrated resistance to multiple antibiotics, meaning treatment may be more difficult for the more severe cases. –SHTFPlan As of right now, the CDC is still tracking and investigating a current salmonella outbreak and so far it’s reached 29 states, and infected 92 people. The agency says handling chickens could be a contributing factor to the outbreak. But for chicken owners like Morse, it’s as if she was told to not pet her dog.. “Can you ever imagine not being able to dress up your chickens? Or hold them?” she asked reporters. “No. No. I love to hold them, I love to talk to them. Everybody has names,” Morse said.
Would you eat insects to save the planet from global warming? - There isn’t much time left to figure out how to bring global warming closer to the forefront of people’s minds and persuade us to reduce our carbon footprints. In fact, we have just 12 years left to keep global warming to 1.5C, according to last week’s landmark UN report. Anything beyond this will massively worsen the risks of drought, floods, extreme heat and poverty for hundreds of millions of people. Reducing our meat intake is crucial to avoiding climate breakdown, since food production accounts for about a quarter of all human-related greenhouse gas emissions, and is predicted to rise. In western countries, this means eating 90% less beef and five times as many beans and pulses. Edible insects have been hailed as a solution to both global food shortages and reducing emissions from animal agriculture, but despite the industry’s best efforts, our response when faced with a cockroach is disgust. Even in London edible insects are seen as nothing more than a gimmick, and there are only a handful of restaurants serving them up. But new research from Switzerland and Germany may have found out how to persuade people to eat insects – and it could have a huge impact on lowering human-led carbon emissions. The researchers concluded that we need to switch the message about saving the planet from altruism to pleasure. They back up their argument with previous studies showing that attitudes based on emotions are more malleable than those grounded in rational claims.
Why scientists are so worried by the huge, sudden loss of insects -- In Puerto Rico’s rainforest, scientists have observed an astounding loss of life at the very base of the food web. It’s the insects.As an alarming new study in Proceedings of the National Academy of Sciences outlines, between 1976 and 2013, the number of invertebrates (like insects, spiders, and centipedes) in the Luquillo rainforest caught in survey nets plummeted by a factor of four or eight. When measured by the number caught in sticky traps, invertebrates declined by a factor of 60. These dramatic drops occurred despite the fact that the forest is a protected wildlife area.The researchers note that this loss of invertebrates — which serve as food for many other forms of life in the ecosystem — has also coincided with losses of birds, lizards, and frogs. “The food web appears to have been obliterated from the bottom,” the Washington Post’s Ben Guarino reported on the study. Guarino’s story quotes one invertebrate expert who called the research “hyper alarming.”The report is just one example of a larger, troubling trend: Insects — including yes, bees — and other critters are rapidly disappearing around the world. A 2017 study in Germany noted a 75 percent decline in flying insects over three decades. “The widespread insect biomass decline is alarming,” the authors wrote, “ever more so as all traps were placed in protected areas that are meant to preserve ecosystem functions and biodiversity.” There’s no one reason why so many critters are dying, and researchers are still unclear on what’s driving the change. Climate change (and changing drought and weather conditions) is strongly implicated. And it’s also partly due to environmental toxins and possibly pesticides. But it’s fair to say they’re mainly dying because humans are changing the world for the worse
Judge Upholds Verdict That Found Monsanto’s Roundup Caused a Man’s Cancer — Having successfully, closed on its $66 billion purchase of the agrochemical company Monsanto in June, we suspect Germany’s Bayer AG, is more than a little concerned now after failing to persuade a judge to set aside a jury’s $289 million verdict in the first trial over allegations that its Roundup weed killer causes cancer.As a reminder, in August, a San Francisco Jury awarded $289 million in damages to a former school groundskeeper, Dewayne Johnson, who said Monsanto’s Roundup weedkiller gave him terminal cancer. The award consists of $40 million in compensatory damages and $250 million in punitive damages.Johnson’s trial was fast-tracked due to the severe state of his non-Hodgkins lymphoma, a cancer of the lymph system he says was triggered by Roundup and Ranger Pro, a similar glyphosate herbicide that he applied up to 30 times per year. His doctors didn’t think he’d live to live to see the verdict.Johnson testified that he had been involved in two accidents during his work in which he was doused with the product, the first of which happened in 2012. Two years later, the 46-year-old father of two was diagnosed with lymphoma – which has covered as much as 80% of his body in lesions. Monsanto said it would appeal the verdict. Appeal they did and today the verdict came down. San Francisco superior court judge Suzanne Bolanos had suggested in an initial written ruling this month that she was considering granting a new trial, but her final ruling today largely sided with Dewayne “Lee” Johnson, denying Monsanto’s request to overturn the verdict.
Cheerios, Quaker Oats and Snack Bars Test Positive for Glyphosate -- An environmental advocacy group has discovered yet more traces of a potentially cancer-causing chemical in popular oat breakfast and snack food marketed to children.The Environmental Working Group (EWG) announced Wednesday that tests it commissioned foundglyphosate, the active ingredient in Monsanto's Roundup weed killer, in nearly 30 General Mills and Quaker brand products made with conventionally-grown oats. The tests found glyphosate in 28 of 28 products including several types of Cheerios, instant oatmeal and snack bars. In 26 of them, the levels surpassed EWG's own safe limit of 160 parts per billion (ppb)."How many bowls of cereal and oatmeal have American kids eaten that came with a dose of weed killer? That's a question only General Mills, PepsiCo [owner of Quaker] and other food companies can answer," EWG President Ken Cook said. "But if those companies would just switch to oats that aren't sprayed with glyphosate, parents wouldn't have to wonder if their kids' breakfasts contained a chemical linked to cancer. Glyphosate and other cancer-causing chemicals simply don't belong in children's food, period."This round of tests comes two months after initial tests commissioned by EWG also turned up glyphosate in 43 of 45 products tested that used conventionally grown oats. More than two thirds had levels above EWG's safety limit. The EWG also found glyphosate in one third of 16 products made with organic oats.The Environmental Protection Agency (EPA) said in a statement to ABC News that consumers should not worry about the results, which showed amounts far below its safety limit of 30,000 ppb. "EPA's review of available data does not support recent claims that glyphosate, the active ingredient of RoundUp, found in cereal (and other foods containing commodities like wheat and oat) is cause for concern," an EPA spokesman said in a statement.
Study: Dozens more breakfast foods test positive for trace amounts of weed killer - Dozens of common breakfast cereals and snack bars have trace amounts of a controversial herbicide found in the weed killer Roundup, according to a report released today by an environmental advocacy group. The Environmental Working Group (EWG) found that 26 of the 28 products it tested had levels of Roundup’s main ingredient, glyphosate, that were “higher than what EWG scientists consider protective of children’s health.” An earlier report found similar results in over thirty oat-based foods. Manufacturers say their products are safe, but the EWG report argues that the vast majority of foods tested — such as Honey Nut Cheerios and Quaker Simply Granola Oats — have glyphosate levels that might pose a cancer risk with long-term consumption. None of the foods violated EPA limits on the herbicide, but the EWG uses a far more conservative health benchmark. California’s proposed glyphosate limit, which would be the most restrictive in the country, still allows for glyphosate levels that are over a hundred times higher than the EWG’s threshold. The environmental group says its lower threshold includes an added buffer for children, as “exposure during early life can have more significant effects on development later in life,” according to Dr. Alexis Temkin, the lead scientist on EWG report. But manufacturers dispute that threshold. Quaker said in a statement that the “EWG report artificially creates a ‘safe level’ for glyphosate that is detached from those that have been established by responsible regulatory bodies in an effort to grab headlines.” General Mills, whose products were also cited in the report, maintained that glyphosate levels in its foods do not pose any health risks. “The extremely low levels of pesticide residue cited in recent news reports is a tiny fraction of the amount the government allows,” the company said in statement to CNN.
The weed-killing chemical involved in a Monsanto lawsuit was found in Cheerios and Quaker Oat bars. Here’s how worried you should be. Ten weeks after the nonprofit Environmental Working Grouppublished a report that found the presence of a weed-killer in breakfast foods, a new round of tests is likely to generate additional concerns.In August, the EWG said it discovered traces of glyphosate, the most widely used agricultural pesticide in the world, in dozens of Quaker, Kellogg's, and General Mills products, including cereals like Cheerios and Lucky Charms.The timing of the report aligned closely with a $289 million lawsuit against Monsanto (recently acquired by Bayer), which uses glyphosate as the active ingredient in its popular herbicide Roundup. On Monday, a judge denied the company's motion for a new trial after ruling that Monsanto knew its product was "dangerous" and could lead to cancer.The EWG said in its August report that it tested the levels of glyphosate in 45 samples of conventionally grown oats and determined that 31 fell below its safety criteria. Its latest study tested another 28 samples, focusing exclusively on Cheerios and Quaker Oats products, and found that all but two showed harmful levels of glyphosate, according to its measures. As it stands, most published research has found that glyphosate isn't a health threat at the low levels that consumers are exposed to. Certain scientific groups have insisted there is a link between glyphosate and cancer, but others aren't convinced. Organizations such as the Environmental Protection Agency, the European Commission, Canada's Pest Management Regulatory Agency, and the World Health Organization's International Program on Chemical Safety have determined that glyphosate does not present a public health concern. Much of the argument surrounding glyphosate boils down to a report published by the WHO's International Agency for Research on Cancer that said the herbicide was "probably carcinogenic in humans." But an extensive review of the material by Reuters found that the IARC had edited parts of the document that didn't align with its conclusion.
Entire Pesticide Class Must Be Banned to Save Children’s Health, Landmark Study Says - A first-of-its-kind study has reviewed the data and concluded that an entire class of pesticides should be banned because of its impact on children's health, The Huffington Post reported.The study, published in the journal PLOS Medicine on Wednesday, said that even low-levels of organophosphate exposure can cause brain damage in children. The news comes as Trump's U.S. Environmental Protection Agency (EPA) is currently fighting a court order to ban just one of this class of toxicchemicals―the pesticide chlorpyrifos."We have compelling evidence from dozens of human studies that exposures of pregnant women to very low levels of organophosphate pesticides put children and foetuses at risk for developmental problems that may last a lifetime. By law, the EPA cannot ignore such clear findings: It's time for a ban not just on chlorpyrifos, but all organophosphate pesticides," study lead author and University of California, Davis Environmental Health Sciences Center Director Irva Hertz-Picciotto told The Guardian. Children exposed to organophosphates in the womb have an increased risk for lowered IQ, reduced memory and attention and autism, the study found. To reach its conclusions, it drew on a UN database that includes 71 countries and cross referenced it with a wide variety of studies."We found no evidence of a safe level of organophosphate pesticide exposure for children. Well before birth, organophosphate pesticides are disrupting the brain in its earliest stages, putting them on track for difficulties in learning, memory and attention, effects which may not appear until they reach school-age. Government officials around the world need to listen to science, not chemical lobbyists," study author and Simon Fraser University scientist Bruce Lanphear told The Guardian.More than 10,000 tonnes (approximately 11,023 U.S. tons) of these pesticides are sprayed in 24 European countries every year, and more in the U.S. U.S. regulators have already banned 26 of 40 organophosphates considered dangerous without much fanfare.
Denmark wants to make climate impact labels mandatory for food "If the rest of the world produced food the way we do in Denmark, the world would be a better place." These words were spoken earlier this month by Morten Høyer, director of the Danish Agriculture and Food Council, which made international headlines for its proposal to add climate impact labels to food.The council would like to oblige food manufacturers and supermarkets to rate their products' impact on the climate and environment, in order to help shoppers make more educated decisions. As CNN reports, the council also sees it as an opportunity to "promote best practices when it comes to mitigating the effects of farming on climate change." Denmark has apparently been working with the European Union for ten years to develop a climate impact label for food, but after the International Panel on Climate Change published its jarring report earlier this month, stating that extreme measures are required within the next 12 years if global warming is to be kept below 1.5C, the Danish government included food labelling in its 38-point plan for a greener future, issued the same week as the IPCC report. As climate minister Christian Lilleholt stated,
Eating Locally and in Season: Is It Really Better for the Environment? All those trucks, trains, ships and planes are emitting carbon dioxide into the atmosphere while logging thousands of “food miles” — the distance a food product travels from the farmer or producer to the supermarket and finally, to your dinner table. Wouldn’t it be more eco-friendly to only buy food that is seasonal and locally grown? When it comes to greenhouse gas emissions (GHGs), it might not make such a huge difference, particularly for certain foods. According the Oregon Department of Environmental Quality, “Differences in agricultural production and the realities of transportation impacts may favor sourcing from other regions from an environmental impact perspective.” The agency writes: In general, the contribution of food transportation relative to the total greenhouse gas emissions of a given food product represents a small percentage of the carbon footprint for many foods. Fresh foods transported by air freight can have significant distribution-related carbon impacts, but on average, distribution of finished foods (from farm or factory to retail stores) contributes less than 4 percent, on average, of the greenhouse gas emissions of foods consumed in the US.
Politicians say nothing, but US farmers are increasingly terrified by it – climate change - Farmers around here are itching to go after that amber wave of soya beans, but there was that 5in rain a couple of weeks ago and then a 7in rain, and it drives even the retired guys batty. This year, crops in north-west Iowa are looking spotty. Up into Minnesota they were battered by spring storms and late planting, and then inundated again in late summer. Where they aren’t washed out, they’re weedy or punky. Welcome to climate change, Iowa-style. It’s the least debated issue of the midterm political season. The weather is the top topic of conversation at any cooperative elevator’s coffee table, along with the markets. Everyone knows that things have been changing in sweeping ways out here on the richest corn ground in the world. It’s drought in the spring and floods in the fall – what were considered 500-year floods in Cedar Rapids and Des Moines 30 years ago are now considered 100-year floods. Iowa has been getting soggier in spring and fall, with scary dry spells interspersed, and more humid at night by as much as a third since 1980. Everyone knows it has been getting wetter and weirder, especially Dr Gene Takle, a Nobel prize-winning climate scientist at Iowa State University. Takle predicted 20 years ago the floods we see today, already linking it to climate change back then. Farmers just saw ponding and called the tiling company to install more. We’re on our way to doubling the size of the northern Iowa drainage system in the past 30 years as the upper midwest has grown more humid and extreme. This drainage system is delivering runoff rich in farm fertilizer to the Mississippi river complex and the Gulf of Mexico, where the nitrate from Iowa and Illinois corn fields is growing a dead zone the size of New Jersey. The shrimping industry is being deprived of oxygen so Iowa farmers can chase 200 bushels of corn per acre – and hope against hope that corn will somehow increase in price as we plow up every last acre. That flow also is creating a toxic source for Des Moines Water Works, which is facing up to $100m in improvements to remove agricultural chemicals from the Raccoon river that supplies 500,000 thirsty denizens. The waterworks sued our county over it, along with two others, but a federal judge threw out the case because you simply can’t sue an Iowa drainage district. And that means that there is no way to regulate agriculture as it responds to extreme weather and market consolidation that seeks immediate return. Meanwhile, those huge rainfalls on exposed black dirt wash it to the vales even from the flat ground of our neighborhood. We are losing soil at two to three tons an acre a year. Nature can regenerate the soil at only a half-ton a year. So we are washing our black gold down the river four to six times faster than we can regrow it.
Trump orders fewer ‘regulatory burdens’ for diverting water to CA farms - President Trump dived headfirst into one of California’s most contentious fights Friday, signing a memorandum intended to divert more water to farmers and “reduce regulatory burdens” that include protections for endangered species and environmental laws. Senior officials in the Trump administration said the memo allows for speedy environmental reviews of major water projects in the West, including the federally operated Central Valley Project, and will cut federal regulations that get in the way. Trump called for strict timelines to ensure more water makes it to farmers. Trump’s memo directs his interior and commerce secretaries to streamline regulatory processes and remove “unnecessary burdens” and develop a timeline for completing compliance requirements for major water projects. “And you’ll have a lot of water. I hope you’ll enjoy the water you’ll have,” Trump said. Trump signed the memo less than three weeks before midterm elections in which several California Republicans are locked in competitive races, including Denham of Turlock (Stanislaus County), Valadao of Hanford (Kings County) and Nunes of Tulare. After signing the memo, Trump handed his pen to Nunes, the House Intelligence Committee chairman and one of the president’s most loyal defenders in Congress. “This will move things along at a record clip,” Trump said after signing the memo in Arizona alongside California GOP Reps. Kevin McCarthy, the House majority leader, and Devin Nunes, David Valadao, Jeff Denham and Tom McClintock. All represent Central Valley districts with substantial agricultural interests.e
War and drought have produced Syria's smallest wheat crop in 30 years - Syria's wheat crop this year was the smallest in three decades as war and drought cut production by around 30 percent, the United Nations Food and Agriculture Organization said on Tuesday. Output of 1.2 million tonnes in 2018 was the lowest since 1989 and compared with a pre-crisis average of 4.1 million tonnes a year, FAO said.That puts pressure on the government as flat bread is a subsidised staple for Syrians, who have suffered under a conflict estimated to have killed several hundred thousand people and forced millions to flee their homes.The slump in wheat production this year occurred despite better access to agricultural land due to an improved security situation. Infrastructure has been badly damaged after years of war combined with drought hitting bread-producing regions.Of the total wheat produced, government state grain buyer Hoboob is estimated to have purchased only 250,000 tonnes."There is a new dynamic in the country, as most farmers in these situations will sell to those offering the highest prices and so some of the wheat is sold to private traders and some filters across the borders to Turkey and Iraq," Adam Yao, deputy FAO representative in Syria, told Reuters.Syria used to produce upwards of 4 million tonnes in a good year and was able to export 1.5 million tonnes. The fall in output has put President Bashar al-Assad's government under increasing pressure to import the grain. Syria's Internal Trade Minister told Reuters in June that Syria planned to import around 1.5 million tonnes of mostly Russian wheat this year.
West’s rivers are hot enough to cook salmon to death. Will this court ruling keep them cool? -- It might be the most gruesome element of the drought conditions that have gripped the West in recent years: salmon being cooked to death by the thousands in rivers that have become overheated as water flows dwindle. Now a federal judge in Seattle has directed the Environmental Protection Agency, in a ruling with implications for California and the Pacific Northwest, to find a way to keep river waters cool. U.S. District Judge Ricardo Martinez, ruling in a case filed by environmental and fishermen’s groups, told the agency last week it must develop a plan to keep water temperatures low in the Columbia River and its main tributary, the Snake, to protect multiple varieties of salmon and steelhead that are covered by the Endangered Species Act. The ruling comes at a tense time. Environmentalists and state officials throughout the West are trying to grasp the implications of a memorandum President Donald Trump signed last week to streamline environmental regulations in order to increase water deliveries to farms and cities in the region. At the same time, drought-like conditions persist: The federal government’s U.S. Drought Monitor says 48 percent of California is in moderate to severe drought, along with 39 percent of Washington and 36 percent of Idaho. Just a month ago, the U.S. Commerce Department issued a disaster declaration for commercial salmon fishing on the West Coast, making communities that depend on those fisheries eligible for financial assistance. Martinez’s ruling last week was sparked by an ecological catastrophe in 2015, when an estimated 250,000 sockeye salmon died on the Columbia and Snake because the waters got too warm. In California, more than 95 percent of juvenile winter-run Chinook salmon perished in the Sacramento River in 2014 and 2015 when temperatures spiked during the worst of the drought. The Chinook are protected under the Endangered Species Act. The massive fish kills of 2015 represent “a glimpse into the future as we get hotter and drier,” said attorney Miles Johnson of Columbia Riverkeeper, an environmental group that spearheaded the Seattle case. He said conditions haven’t improved much since the 2015 debacle. “On the Columbia and the Snake we’re in a crisis for water temperature; we’re in danger of losing some of our salmon and steelhead stock,” he said. “Every summer the Columbia and the Snake get too warm for the fish.”
Almost Rs 4,000 Crore Spent, but the Ganga Is More Polluted Under Modi’s Watch - The Narendra Modi government has initiated many projects to clean up the Ganga, but pollution has increased at several sites where the river's water is monitored. The water is not fit for drinking, bathing or domestic purposes. Professor G.D. Agarwal, the prominent environmentalist who spent several years for the cause of cleaning up river Ganga, passed away on October 11. He had been on a fast for 112 days. Professor Agarwal wrote to Prime Minister Narendra Modi thrice, demanding that the government ensure uninterrupted flow of Ganga. He sought to remind the PM of his visit to Varanasi in 2014 and his proclamation that “maa Ganga had called him”. However, the prime minister’s office did not respond to Agarwal. He eventually sacrificed his life. Read: G.D. Agarwal’s Third and Final Letter to PM Modi on Saving the Ganga. The Ganga has not become any cleaner under the Modi government. In fact, the river’s contamination levels have increased at many places since 2013, even though Rs 5,523 crore was released for cleaning the Ganga between 2014 and June 2018. Of the funds released, Rs 3,867 crore has already been spent. According to information provided by Central Pollution Control Board (CPCB), an organisation under the ministry of environment, forest and climate change, the amount of Biochemical Oxygen Demand (BOD) in the Ganga river was very high in 2017. BOD is the amount of oxygen needed by biological organisms to break down non-essential organic material in the water. The higher the BOD level, the faster oxygen present in water would deplete. A high BOD level is harmful for both the river and the organisms that live in it. Dissolved oxygen in another parameter used to measure pollution. A high DO level means the water is less polluted.When pollution rises, the oxygen is used to decrease it. If BOD level exceeds 3 mg/l, the water is not suitable for even domestic purposes, let alone consumption. In 2017, the BOD level of Ganga was more than 3 mg/l at 36 of the 80 sites and 2-3 mg/l at another 30. In 2013, it was more than 3 mg/l at 31 sites and 2-3 mg/l at 24.
India: why collecting water turns millions of women into second-class citizens A family in India needs fresh water. But this family can’t just turn on a tap. Instead, the women in the household must walk to fetch it, sometimes travelling miles carrying plastic or earthenware pots, possibly with a child or two in tow, to the nearest safe source – regularly repeating the journey up to three times a day. In the scorching summer months of April and May, when temperatures regularly exceed 40C, it is a particularly gruelling daily ritual – and when they get home they must complete their other household chores: cooking, washing, bringing up the children, even helping on the family farm.These women are reminiscent of the many-armed Hindu goddess, Durga – they have so many daily tasks, they could doubtless do with an extra set of hands. But they aren’t the exception. This is the reality for millions of women in India. From the Western Ghats and the mountainous north-east to the arid desert state of Rajasthan, women across the country act as water collectors. And this gender specific role has a severe impact on every aspect of their lives, from their health and social life to education and their ability to have a real say in the community. It is estimated that 163m Indians still don’t have access to clean, running water. Until that’s fixed, this significant national problem will prevail, with women paying the biggest price. Water collection in India is a woman’s job, irrespective of her physique – and there’s no respite, even when she’s menstruating, ill, or has something else to do. As groundwater resources are placed under increasing pressure due to over-reliance and unsustainable consumption, wells, ponds and tanks can also regularly dry up, escalating the water crisis and placing a greater burden on women to travel long distances. Access to unsafe drinking water also results in the spread of water-borne diseases. And women are often the first victims of both water scarcity and water pollution.
When drought and extreme heat strike forests at the same time - The frequency of extreme weather events is going up around the world, and droughts and heatwaves are no exception. When the globe warms by 3-4 degrees – a possibility during this century under a ‘business as usual’ scenario – about 40 percent of the world’s land surface is predicted to experience drought. The tropics are all set to experience high temperatures as the new normal. With drought and heat posing individual threats, there is also the looming threat of frequent ‘double whammies’ of drought and heat: concurrent drought and heatwaves, across India and the globe. A recent study has found that the area under concurrent drought and heatwaves is more in recent years (1981-2000) compared to an earlier time period (1951-1980) in India. Moreover, there is an increase in frequency of concurrent heatwaves and drought. “We divided 60 years of data into two halves taking 1951-1980 as a base period. At each grid, we computed the differences in number of concurrent droughts and heatwaves for the period 1981 to 2010 with respect to the base period. These results indicate that simultaneous occurrence of droughts and heatwaves have increased,” said Shailza Sharma, an author of the study. The study found that concurrence of extreme drought and longer, more severe heatwaves is increasing in Gujarat, Central India and Peninsular India.The response of vegetation to a combination of drought and stress is complex, ranging from short-lived local mortality events to regional-scale forest die-offs. A variety of forest types have shown mortality in the face of concurrent heat and drought: dry savannas which are adapted to seasonal rainfall, coniferous forests with a Mediterranean climate to tropical rainforests.
With 23 Asiatic lions dead in Gir, here’s what the authorities can do to preserve India’s pride - All is not well for the only free-ranging population of Asiatic lions in the world. In an unprecedented and unexpected development, 23 lions died in Gujarat’s Gir forest in two weeks starting September 12 in what the regional press described as “topotap maut” or back-to-back deaths. According to a report by the Indian Council for Medical Research, Canine Distemper Virus was confirmed in five of them. The deaths of the endangered animals has sent shock waves across the country, with several questions being asked. Were there effective monitoring and screening practices in anticipation of such a contingency? Were authorities prepared to deal with such a situation? Could these deaths have been prevented? In a country where wildlife populations are spiralling towards extinction, the success of the conservation of Asiatic lions has been exhilarating and inspiring. According to the available literature on the subject, the clinical manifestation of Canine Distemper Virus in lions varies with individuals. Serosurveillance or analysis of the blood serum has indicated seropositivity or confirmation of Canine Distemper Virus in the dead Gir lions. Does that automatically prove that Canine Distemper Virus was the cause of death? All animals that carry the Canine Distemper Virus may not die as its expression is dependent on various factors such as host immunity and the virulence of the virus.The enormity of the current situation will therefore be evident only when the clinical symptoms, post-mortem findings and other detailed tests are all examined together. Given these complexities in understanding the disease, its impact and expression, confirming these confounding factors in the wild would be even more challenging. At this juncture, based on available information, we may be able to say that Canine Distemper Virus had manifested as a symptom in Gir lions, and then went on to become fatal. Diseases like Babesiasis, a protozoan disease transmitted through tick bites (that has been confirmed in some lions too), I believe, are most expressed when in combination with another disease. Therefore, the role of the parasite Babesia for cause of death with other infections needs to be clearly understood. We now need answers to the following questions: Whether lions in the Gir forest carry the Canine Distemper Virus? If they do, was it the cause of death for the lions who died? If the animals carry Canine Distemper Virus, is it widespread in the entire population? Have some adult lions developed an immunity to Canine Distemper Virus?
Local Inaction Threatens China’s Snow Leopards, Report Says - A lack of conservation practices by local governments has become one of the major threats to snow leopards in China, according to a new report released Tuesday. Inadequate funding, manpower, and conservation training in government departments — especially those in the northwestern Qinghai province and the southwestern Tibet Autonomous Region — have made it challenging for state-employed conservationists to conduct field surveys and monitor the large cats, the report said. Xiao Lingyun, the report’s lead researcher, told Sixth Tone that the authorities should play an active role and invest more in protecting the threatened species. She added that strengthening policy is key to conservation. “No matter how much we local organizations do, it cannot compare with government policy in terms of the scale of funding and effort,” she said. With fewer than 7,000 remaining in the wild, snow leopards have been classified as a “vulnerable” species by the International Union for Conservation of Nature. The snow leopard population is spread across 12 countries, but scientists say that 60 percent of the animals can be found in western China. Experts surveyed five provinces and regions in the country’s west for the report and noted area-specific challenges in protecting the leopards. While feral dogs pose a high risk to snow leopards in Qinghai, increased human activity and overgrazing in the southwestern Sichuan province as well as poaching in the northwestern Gansu province — known for both its legal and unlawful sales of animal furs — have proven to be the greatest dangers to the big cats.
Man, 72, killed by group of aggressive “rogue” monkeys throwing bricks at him from tree - A man has been 'stoned to death' by a group of "rogue" monkeys who threw bricks at him from a tree, according to reports.Dharampal Singh, 72, suffered head and chest injuries in the attack and was later pronounced dead in hospital.Mr Singh was collecting pieces of dry wood when the group of monkeys launched their attack on Thursday.It is believed the monkeys had armed themselves with bricks they had collected earlier from a run down building nearby in Tikri, Uttar Pradesh. Villagers have repeatedly complained that aggressive monkeys in the area have made their lives hell, but the animals are a protected species so little can be done. Mr Singh’s brother Krishnapal told The Times of India : "Monkeys threw more than 20 bricks at Dharampal on Thursday. "Thrown from quite a height, the bricks were enough to kill him. "These rogue monkeys are the real culprits and must pay for it." Mr Singh's family has lodged a formal complaint and named monkeys as the accused but police insisted they cannot prosecute monkeys and have declared Mr Singh’s death was an accident. Chitwan Singh, station officer at Doghat police station, said: "How can we register the case against monkeys?
It’s Giant Mice Vs. Rare Seabirds on This Remote South Atlantic Island -- On a remote island in the South Atlantic, a evolutionary battle is playing out between giant mice and rare sea birds. So far, the mice are winning.That's the conclusion of a study published Monday in Ibis- International Journal of Avian Science that looked at the impact of invasive house mice (Mus musculus) on 10 seabird species on Gough Island, a UNESCO World Heritage Site and one of the most important seabird colonies in the world. The study found that the mice ate two million eggs or chicks a year and were putting some endangered species at risk for extinction."In a very short space of time, the Tristan albatross will be lost and this is also true for a number of other species," study author Dr. Anthony Caravaggi, from University College Cork in the Republic of Ireland, told BBC News.The Atlantic petrel and MacGillivray's prion are also at severe risk, the study found. All three species are endemic to Gough Island, which makes them especially vulnerable. Mice were first introduced to the island by sailors in the 19th century and have since adapted to their new surroundings and diets, growing to be 50 percent larger than domestic mice. Seabird chicks and eggs, which are small and nested in burrows, have no escape route from the ravenous mice.
NOAA Forecast: Great Barrier Reef Could Face Third Mass Bleaching Event in 4 Years - One of the most sobering pieces of information from this month's Intergovernmental Panel on Climate Change (IPCC) report was that global warming of just two degrees Celsius above pre-industrial levels could kill off 99 percent of tropical coral reefs. And even if we act quickly and successfully limit warming to 1.5 degrees, 70 to 90 percent of these invaluable ecosystems will still be lost. Now, an alarming forecast from the National Oceanic and Atmospheric Administration (NOAA) shows that process could begin as early as this Australian summer in one of the most iconic reefs of all: the Great Barrier Reef. The forecast shows a 60 percent chance that the entire reef will face extreme heat stress and coral bleachingbetween November 2018 and February 2019. "This is really the first warning bells going off that we are heading for an extraordinarily warm summer and there's a very good chance that we'll lose parts of the reef that we didn't lose in the past couple of years," marine biologist and Global Change Institute at the University of Queensland Director Ove Hoegh-Guldberg told The Guardian. "These are not good predictions and this is a wake-up call."The forecast further warns that the southern half of the reef has a 60 percent chance of experiencing a level two bleaching event, at which point coral death is likely, Australia's ABC reported. The Great Barrier Reef suffered back-to-back bleaching events for the first time in 2016 and 2017, which killed 50 percent of the coral in shallow waters. If the reef suffers bleaching again in 2019, it will be the third time in four years, a frequency not predicted until the second half of the 21st century.
A cruise ship spills thousands of liters of waste in the Great Barrier Reef, harming coral already in troubled water - A cruise ship spilled thousands of gallons of liquid food waste in the Great Barrier Reef in August, according to an ongoing investigation by the Australian Maritime Safety Authority -- potentially damaging a reef already plagued by pollution and coral bleaching. Carnival, which owns the P&O cruise ship, said the spill was unintentional and amounted to 7,000 liters (1,849 gallons). But Green Party Senator Larissa Waters and local media report the spill was 27,000 liters (7,133 gallons), citing an Australian Maritime Safety Authority report presented to the Senate. That amount is equivalent to more than 100 bathtubs full of waste water. The P&O ship spilled the polluted water on August 26, but authorities were not notified until two days later when Carnival self-reported the incident. Australian authorities detained the ship when it returned to Sydney in early September, according to an Australian Maritime Safety Authority representative. Carnival had to pay a fine of about $1.5 million (2.1 million Australian dollars) to release the vessel.
Plastic Watch: Recycling Woes -- Jerri-lynn Scofield - Regular readers of my plastics posts know that I’m skeptical of the premise that the recycling fairy will be able to rid the world of the problems raised by overuse of plastics – and their inappropriate disposal.But I don’t deny that better recycling strategies would alleviate some damage that our current mis- and over-use of plastics creates.Alas, today I bring to readers’ attention a Guardian exclusive report, published Friday, UK plastics recycling industry under investigation for fraud and corruption. Over to the Guardian:The plastics recycling industry is facing an investigation into suspected widespread abuse and fraud within the export system amid warnings the world is about to close the door on UK packaging waste, the Guardian has learned.The Environment Agency (EA) has set up a team of investigators, including three retired police officers, in an attempt to deal with complaints that organised criminals and firms are abusing the system.Six UK exporters of plastic waste have had their licences suspended or cancelled in the last three months, according to EA data. One firm has had 57 containers of plastic waste stopped at UK ports in the last three years due to concerns over contamination of waste.Allegations that the agency is understood to be investigating include:
- Exporters are falsely claiming for tens of thousands of tonnes of plastic waste which might not exist
- UK plastic waste is not being recycled and is being left to leak into rivers and oceans
- Illegal shipments of plastic waste are being routed to the Far East via the Netherlands
- UK firms with serial offences of shipping contaminated waste are being allowed to continue exporting.
I encourage interested readers to read the Guardian’s account in full. Perhaps the most striking claim:The Guardian understands information has been passed to the EA – the regulators – which shows huge discrepancies between the amount of packaging exports recorded by HM customs, compared to the amount UK exporters claim to have shipped. The data, analysed by the Guardian, reveals British export firms claim to have shipped abroad 35,135 tonnes more plastic than HM Customs has recorded leaving the country.
Swamped with plastic waste: Malaysia struggles as global scrap piles up (Reuters) - Hundreds of sacks filled with plastic waste from the United States, Britain, South Korea and Spain spill onto the streets of an industrial zone in Pulau Indah, an island town just an hour’s drive from Kuala Lumpur and home to Malaysia’s biggest port. The stench of burning plastic and fumes from nearly a dozen recycling factories wafts through the neighborhood, even as more container-loads of plastic waste are unloaded. Pulau Indah - ironically, the name means “beautiful island” in Malay - is one of many towns in Malaysia where illegal plastic recycling factories have popped up in recent months as the Southeast Asian nation became the top choice for plastic waste exporters from around the world. The trigger for this dumping deluge was a Chinese ban on waste imports from the beginning of this year, which disrupted the flow of more than 7 million tonnes of plastic scrap a year. Malaysia quickly became the leading alternative destination, importing nearly half a million tonnes of plastic waste between January and July from just its top 10 source-countries. Dozens of factories have opened up in Malaysia to handle that waste, many without an operating license, using low-end technology and environmentally harmful methods of disposal. “The situation is getting worse, especially with more and more illegal plastic recycling factories,” Yeo Bee Yin, Malaysia’s minister of energy, technology, science, climate change and environment, told parliament last week. Used plastic is recycled into pellets, which are then used to manufacture other plastic products, but the process comes with pollution risks. Plastic unsuitable for recycling is burnt, which releases toxic chemicals into the atmosphere. Or it ends up in landfill, potentially contaminating soil and water sources. Yeo said she does not want Malaysia to be the “trash can” for developed nations, but Housing Minister Zuraida Kamaruddin, who oversees the waste management department, told Reuters that the government also does not want to miss out on a business that could be worth billions. Both ministers are members of a government committee studying its options for dealing with the growing pile of plastic waste.
Trump Threatens to Cut California Firefighting Aid Over ‘Old Trees’ -- President Donald Trump lashed out at Democrat-governed California on Wednesday, warning its leaders to clean up forests that he said are full of dead trees posing a wildfire risk. “California’s a mess,” Trump remarked at a Cabinet meeting after Agriculture Secretary Sonny Perdue said his department is “making forests work again.”“It’a a disgraceful thing,” the president continued. “Old trees are sitting there rotting and dry and instead of cleaning them up, they don’t touch them, they leave them, and we end up with these massive fires.”California has experienced 5,322 fires that burned about 621,000 acres so far this year, costing it $773 million for firefighting, according to the state. Fire is a perennial threat in the state, though it has experienced more than twice as much burned acreage so far this year than average.Scientists believe climate change and rising temperatures are making California’s fires worse, but Trump blamed state leaders.“I say to the governor or whoever is going to be the governor: you better get your act together,” he said. “They don’t want to clean up their forests because they have environmental problems cleaning it up -- it should be the opposite, you’re going to lose your forest, you’re going to lose it.”He threatened to cut off federal aid for firefighting in California, which he said costs “hundreds of billions of dollars” -- an exaggeration. Total federal firefighting costs in 2017 were less than $3 billion, according to the National Interagency Fire Center.
Former Monsanto Executive Picked by Trump to Lead Wildlife Agency -- President Donald Trump said he will nominate a former Monsanto executive to head the Fish and Wildlife Service (FWS), the Associated Press reported Tuesday. Aurelia Skipwith, who Western Values Project Executive Director Chris Saeger called "a darling of corporate special interests," worked at the agribusiness giant for more than six years. She has since worked at the U.S. Department of Agriculture, the U.S. Agency for International Development and the Department of the Interior (DOI). A biologist and lawyer by training, Skipwith has been at the DOI since April 2017 overseeing policy and regulations at FWS and the National Park Service. She said she shared Interior Secretary Ryan Zinke's goals to "protect our species, increase public access and ensure science is at the forefront of our decisions" in a statement reported by the Associated Press. If she is confirmed by the Senate, she would be the first African American woman to run FWS. FWS has been without an official head since Trump took office. Greg Sheehan, who served as deputy director for 14 months before stepping down in August, could not serve as acting director because he lacked a science degree, the Associated Press reported. Under his lead, FWS has moved forward with policies that have worried environmentalists and animal lovers, including:
- Weakening the Endangered Species Act: A massive DOI proposal included a provision removing the "blanket rule" giving threatened species the same protections as endangered species.
- Reversing the ban on imported elephant trophies: Last November, FWS undid an Obama-era ban on importing the remains of elephants killed legally in Zambia and Zimbabwe back into the U.S.
- Allowing bee-killing pesticides in national wildlife refuges: In August, FWS lifted another Obama-era ban on the use of genetically modified crops and certain pesticides in national wildlife refuges. Some of the newly-allowed pesticides are made by Monsanto, The Guardian pointed out.
The Center for Biological Diversity (CBD) told The Guardian it was unlikely that Skipwith would improve the situation, calling her "utterly unqualified" because she had no training in either wildlife management or fisheries.
Assessing the Global Climate in September 2018 -- The global land and ocean temperature departure from average for September 2018 tied with 2017 as the fourth highest for the month of September in the NOAA global temperature dataset record, which dates back to 1880. The year-to-date was also fourth warmest on record. The September temperature across global land and ocean surfaces was 1.40°F above the 20th century average of 59.0°F and tied with 2017 as the fourth highest for September in the 1880-2018 record. The 10 warmest September global land and ocean surface temperatures have occurred since 2003, with the last five years (2014-2018) comprising the five warmest Septembers on record. September 2015 is the record warm September at 1.67°F above average. September 2018 also marks the 42nd consecutive September and the 405th consecutive month with temperatures, at least nominally, above the 20th century average. Record warm temperatures during the month were present across parts of the Atlantic and Indian Oceans and across parts of North America, South America, Europe, Africa and Asia. The area with record cold September temperatures was in southwestern Canada. The September globally averaged land surface temperature was 1.84°F above the 20th century average of 53.6°F. This value was the sixth highest September land temperature in the 139-year record. The most notable warm land temperatures were present across southern South America, Alaska, the southwestern and eastern contiguous U.S., much of Europe, the Middle East, as well as western and eastern Russia, where temperature departures were 3.6°F above average or higher. The most notable cool temperature departure from average during September was in central and western Canada, where temperatures were 5.4°F below average or less. Warmer-than-average temperatures were present across much of Europe during September 2018, giving way to the warmest September, at 3.64°F above average, since continental records began in 1910. This value surpassed the previous record set in 2016 by more than 0.20°F. September 2018 marks the first time since continental records began that Europe had a September temperature departure from average that was 3.6°F or higher. South America had its second warmest September on record at 2.72°F above average. This value trails behind the record set in 2015 by 0.23°F. Africa and Asia had their third and fourth warmest Septembers, respectively. Meanwhile, North America had its smallest temperature departure from average for September in 10 years (since 2008) at 0.49°F above average. The September globally averaged sea surface temperature was 1.24°F above the 20th century monthly average of 61.1°F – the fourth highest global ocean temperature for September in the record. The years 2014-2018 comprise the five warmest Septembers on record, with 2015 the warmest September at 1.49°F above average.
El Nino Threatens North America In New Weather Report - Big East Coast Systems Capable Of Snow - El Nino conditions are quickly developing across the central and eastern equatorial regions of the Pacific Ocean, with meteorologist now indicating a high chance of development by December. Warmer-than-normal temperatures for most of the country are expected, according to NOAA's Climate Prediction Center's official winter weather forecast released Thursday. Current models show El Nino has a 70 to 75% probability of forming. "We expect El Nino to be in late fall to early winter," Mike Halpert, deputy director of NOAA's Climate Prediction Center. "Although a weak El Nino is expected, it may still influence the winter season by bringing wetter conditions across the Southern United States, and warmer, drier conditions to parts of the North." El Nino is a massive ocean-atmosphere climate event linked to a periodic warming in sea surface temperatures across the central and east-central Equatorial Pacific waters. The swings between warmer and cooler waters in the tropical Pacific are the primary factors for either El Nino (warmer seawater) or La Nina (cooler seawater), which government meteorologist watch closely in determining the North American winter weather forecast. Here is the 2018 U.S. Winter Outlook report (Dec. through Feb): Warmer-than-normal conditions are expected across much of the northern and western U.S., with higher probabilities of warmer temperatures in Alaska and from the Pacific Northwest to the Northern Plains, Halpert said in a statement. The forecast does not show any region in the US below-average temperatures for the season. Much of the Southeast, Mid-Atlantic, and Ohio Valley regions will remain within average ranges. Halpert said wetter-than-average conditions are favored across the southern tier and Mid-Atlantic, with the highest odds for above-average precipitation in northern Flordia and south Georgia. Drier conditions are expected in areas of the northern Rockies and northern Plains, as well as in the Great Lakes and northern Ohio Valley.
In pictures: Rome suffers freak hailstorm and flooding - A wave of extreme weather bringing hail, floods and strong winds has brought parts of Italy to a standstill. After a long spell of hot weather, Rome suffered damage from a major hailstorm and torrential rains overnight. Firefighters were called out nationwide, from Milan in the north to Sicily in the south. Local authorities issued an orange alert - one below the highest - for the region of Calabria, where cities and towns ordered schools to stay closed. Parts of Molise, Basilicata and Puglia are also on orange alert - while a lesser, yellow warning was issued for Abruzzo, Calabria, Sicily and Lazio. Some drivers were forced to abandon their cars trapped in ice or flooded streets in Rome
Hurricane heading toward Mexico strengthens to Category 4 - A hurricane heading toward Mexico strengthened Sunday to a Category 4 storm as it prepares to make landfall this week. Hurricane Willa is now an "extremely dangerous" Category 4 storm that will "produce life-threatening storm surge, wind, and rainfall," the National Hurricane Center said in an advisory notice Sunday.The hurricane is expected to make landfall Tuesday over portions of southwest and west-central Mexico. The storm is expected to continue strengthening before making landfall, according to the National Hurricane Center.A hurricane watch is in effect along a portion of Mexico's western coast, from San Blas to Mazatlan. Additionally, a tropical storm warning is in effect from Playa Perula to San Blas. Willa is the latest storm in a hurricane season that has included Hurricane Florence and Hurricane Michael, storms that wreaked havoc in the southeastern United States earlier this fall.
10,000+ Flee as 'Life-Threatening' Hurricane Willa Menaces Mexico -- Thousands were evacuated from Mexico's Pacific coast Monday as Hurricane Willa is expected to make landfall as a "life-threatening" Category Four storm Tuesday afternoon, Reuters reported.As of late Monday night, the storm was 80 miles west of Las Islas Marias islands opposite the state of Nayarit. It is expected to be one of the most powerful hurricanes ever to strike Mexico from the Pacific, CNN reported."Let's not play the macho. Let's not act like superheroes," Nayarit Gov. Antonio Echevarria said, according to Reuters. "It's a very strong hurricane, very potent, and we don't want any tragedies." Nayarit said he had closed schools and evacuated more than 10,000 people.The storm is currently blowing at 130 miles per hour and expected to bring an "extremely dangerous" storm surge to southwestern Mexico and rainfall of six to 12 inches, with some local areas receiving as much as 18. The rain could produce "life-threatening" flooding and landslides, The National Hurricane Center said in itsmost recent forecast.A hurricane warning is in effect for Las Islas Marias and along the Pacific coast from San Blas in the south to Mazitlan in the north, around where it is first expected to hit."People are really scared," Mazitlan gas station attendant Zulema Pardo told Reuters, as customers stocked up on water and gasoline and emptied the shelves of bread. "People are crazy and worked up."Hurricane Willa is another example of a storm, like Hurricane Michael, that intensified rapidly due to warmer-than average ocean temperatures, a phenomenon that has been linked to climate change. Willa formed Saturday as a tropical storm and grew into a Category Five storm Monday before weakening into a Category Four, CNN reported. The waters off of Mexico are one to two degrees Fahrenheit warmer than average for late October. Along with Tropical Storm Vincente, a weaker system moving south of Willa that is expected to make landfall as a tropical depression, also on Tuesday, it will make this hurricane season the most active ever for the northeast Pacific in terms of "Accumulated Cyclone Energy," a metric that accounts for both the number of storms and their intensity.
Hurricane Willa makes landfall as Category 3 storm on Mexico -- Hurricane Willa, a fierce Category 3 storm, closed in on Mexico's Pacific coast making landfall near Isla del Bosque, Sinaloa state, in Mexico, according to the National Hurricane Center (NHC). Estimated winds speeds were recorded at 120 mph with a wind gust of 95 mph reported. The storm had prompted more than 4,000 evacuations in coastal towns.Forecasters warn the storm will bring life-threatening storm surge, wind and rainfall to parts of western Mexico. Federal officials said late Tuesday there were early reports of blackouts in some places and damage to flimsy structures with tin roofs.The storm had battered the Islas Marias, a group of Mexican islands about 60 miles off the mainland that include a nature preserve and a federal prison. Federal authorities gave no immediate details on any damage to the prison or what steps were taken to protect the inmates. As Willa closed in, the beach in Mazatlan almost disappeared, with waves slamming against the coastal boulevard, black clouds looming overhead. The area is home to high-rise hotels and about 500,000 people, including many U.S. and Canadian expatriates. A few surfers had taken advantage of the high waves even as workers boarded up windows on hotels, shops and homes. Schools were closed and the streets nearly empty. Hurricane-force winds extended 35 miles from the storm's center, and tropical storm-force winds were up to 115 miles out. Forecasters said Willa could bring 6 to 12 inches of rain, with up to 18 inches in some areas. Farther to the south, the remnants of Tropical Storm Vicente continued to bring heavy rain that caused deadly flooding and mudslides in southern and southwestern Mexico. Federal disaster agency chief Luis Felipe Puente said 11 people died as a result of Vicente. Local officials earlier put the figure at 12.
One-time Hurricane Willa dumping heavy rain on Mexico, on path for U.S --- Hurricane Willa lost power rapidly overnight after roaring over a stretch of beach towns, fishing villages and farms on Mexico's Pacific coast as a Category 3 storm with 120 mph winds. By 2 a.m. EDT, the National Hurricane Center had downgraded Willa to a tropical storm with maximum sustained winds of 45 mph.By 5 a.m., Willa was a tropical depression with top sustained winds of 30 mph. The hurricane center said Willa was about 75 miles east-northeast of Durango, Mexico, racing northeast at 25 mph.The center predicted the storm would dissipate altogether by afternoon as it moved farther inland over west-central and northern Mexico. Nonetheless, it forecast "additional rainfall totals of 2 to 4 inches with maximum totals of 6 inches possible from eastern Durango, northern Zacateca and southern Coahuila. "This rain will cause life-threatening flash floods and mudslides," the center warned.Meteorologist Jeff Berardelli, a CBS News climate and weather contributor, predicts Willa's remnants will cross the Gulf of Mexico, dump heavy rain on parts of Texas and the Southeast already hard hit then merge with a cold front to form a powerful nor'easter that will hug the eastern Seaboard form Virginia to New England.Assessments of damage done by Willa in Mexico were scanty during the night because of darkness and poor communications, but federal officials said power had been knocked out in some spots and there were early reports of flimsy structures with tin roofs sustaining damage.
Hurricane Willa to become nor'easter, hit East Coast this weekend after slamming Mexico - As Hurricane Willa moves onshore as a major hurricane today in Mexico, its next move is already planned. The storm is on track to become the East Coast's first major nor'easter of the season, bringing damaging winds, pounding surf and even some heavy, wet inland snow this weekend. Currently located more than 2,000 miles away from New York City, Willa is making landfall today on the Pacific coast of Mexico, just south of the resort town of Mazatlan. Willa briefly hit Category 5 strength on Monday, becoming the third Category 5 storm of the Eastern Pacific season, which is now the most energetic on record. Willa is carrying supercharged Pacific energy and even moisture from another tropical system, Vincente, as it slams ashore in Mexico. While the storm is forecast to lose strength as it crosses the mountains of Mexico, it will retain its identity as it moves towards Texas. And that is where the transition from tropical storm system to nor'easter will begin. In Texas, up to several inches of rain will fall on already saturated ground. Having endured major flooding in the Hill Country less than a week ago, Texans are preparing for round two Wednesday. This time flash flooding is a threat in localized downpours. On Thursday, strong thunderstorms will pound some of the same areas ravaged by Hurricane Michael. Torrential downpours and isolated tornadoes are possible from Louisiana to Mississippi, Alabama, northern Florida and Georgia. The largest threat for tornadoes will be the Florida Panhandle and South Georgia. Then the system re-energizes. The remnants of Willa will merge with a cold front, round the corner and then hug the Eastern Seaboard, becoming a significant nor'easter for all of the East Coast as we head into the weekend. That raw weather will barrel up the Eastern Seaboard and make for a miserable Saturday in the Northeast. At this point the storm will be a full-fledged nor'easter, and a very strong one for this early in the season. Gusts of 50-70 mph and ocean waves up to 20 feet will lash coastal areas from Virginia to New England. Coastal flooding is possible in normally vulnerable areas. The snow will be heavier farther north, from the Catskills into the mountains of Northern New England. Some areas in Vermont, New Hampshire and Maine could pick up a foot. The cement-like snow will weigh down power lines and, combined with gusty winds, may cause scattered power outages.
Hurricane Michael caused 1.7 million electricity outages in the Southeast United States - EIA - Hurricane Michael resulted in outages for up to 1.7 million electricity customers across six states, according to situation reports from the U.S. Department of Energy’s Office of Cybersecurity, Energy Security, and Emergency Response. On Wednesday, October 10, 2018, the storm made landfall as a Category 4 storm near Mexico Beach in the Florida panhandle. During the following two days, Hurricane Michael traveled through Georgia, the Carolinas, and Virginia with heavy rainfall and up to 65 mile-per-hour winds. Outages were highest in Virginia, where peak outages reached 523,000 customers, or about 14% of the state, on October 12. North Carolina also saw significant outages on that day, reaching 492,000 customers, or 10% of the state. As of October 19, power had been restored to 93% of customers who experienced a storm-related outage. Of the 125,000 customers still without power on October 19, more than 80% were in Florida. Gulf Power, which serves 459,000 customers in northwestern Florida, estimates that some customers may not have power restored until October 24. Duke Energy, which serves Mexico Beach, cannot currently estimate recovery times because much of the infrastructure in the area where the storm made landfall will need to be rebuilt.
Death toll from Hurricane Michael rises to 36 - At least 36 people have been confirmed dead as a result of Hurricane Michael, according to authorities. The number rose Saturday after a local medical examiner confirmed the death of a woman in Bay County, Florida, bringing the death toll in Florida alone to 26. Authorities did not offer additional details on the death. Officials in four states -- Florida, Georgia, North Carolina and Virginia -- have each confirmed people died as a result of the storm. The latest death toll comes 20 days after Michael ravaged the Florida Panhandle and wrought havoc in a slew of Southern states that were battered by powerful winds and inundated with floodwater.
Hurricane Michael leaves a seaside Florida town in an existential crisis - For generations, families have come to Mexico Beach to soak up old-style Florida: the mom-and-pop seafood shacks, the dinky one-story motels and pastel bungalows, the retro ice cream parlor with claw machines and vintage arcade games.But Hurricane Michael, which less than two weeks ago pummeled the tiny seaside town with 155-mph winds and demolished roughly three out of every four buildings, has left the community in an existential crisis. Nobody is sure what comes next. Many residents and business owners, anticipating massive insurance shortfalls, have yet to decide whether to commit to the daunting challenge of rebuilding structures strong enough to withstand the next big storm.About a third of the town’s 1,200 full-time residents are senior citizens. Many homes were not covered by flood insurance. A vast swath of older ranch-style homes and commercial structures sat at ground level and did not meet the state’s current elevation and windstorm requirements. “They’re gonna make you build so heavy duty, you can’t afford to rebuild,” said Charles "Chuck" Smith, 56, owner of the Gulf View Motel, a modest 1940s-era building that his parents bought in the mid-1980s. Now it is rubble. Wind, water and debris wrecked the concrete walls, gutting the kitschy rooms with tiny kitchenettes, sweeping away the queen beds with peach and turquoise bedspreads patterned with seashells. Mexico Beach was woefully unprepared for a Category 4 hurricane: While new structures across South Florida must be built to withstand winds of around 175 mph, buildings in this stretch of Florida’s panhandle are required to sustain winds of only 130 mph. Older buildings are exempt. As residents began to grapple with insurance claims and apply for federal assistance, engineering experts and policymakers said current building codes should be tightened to make future homes more resilient. Some questioned whether, in an age of rising sea levels, it made any sense to rebuild so close to the beach. “I’m afraid we’re going to run into a situation where only the wealthy can afford to rebuild and the people that work in the economy — the teachers, the nurses, the paramedics, firefighters, police officers, sheriff’s deputies, people who work at the grocery store — may very well be priced out of their homes.”
Hurricane Michael’s homeless hunt places to live and rebuild - Noel Santiago, 53, dragged his friend, 34-year-old Rosa Perez, and her two children, down to the first story of Macedonia Garden Apartments in Panama City just as the howling winds of Hurricane Michael ripped the roof off their second-story apartment. A week later, many of the residents of the public housing complex are still here. They’re camping out amid the mouldering remains of their shredded apartments and cars, cooking over fires in common areas and lighting their mildewing spaces with candles when night falls.Like the tens of thousands displaced by the storm, many of these people don’t have places to go — or a way to get there if they did.There are rumors circulating that residents have three days to leave their ruined apartments or they won’t be able to be transferred to a new apartment building. Residents huddle in hallways, smoking cigarettes and anxiously discussing their next moves. Perez has been making the rounds, insisting to other residents that management can’t make them leave.“Legal services came and told us,” she said. “They can’t do that. They want FEMA to put us in a hotel and not take the rental voucher.”“Everybody is scared by that,” she added.Perez and her family lost everything in the storm. They’re living with a friend until Perez gets her FEMA voucher for two months’ worth of rent. She doesn’t have a bank account, so she’s been waiting a week for the mail to be delivered with her voucher.For many in the community, the world has narrowed to what’s within walking distance. The nearest aid station is just over two miles away at a Baptist church. Without a vehicle or a shopping cart to carry the goods home in the scorching heat, it’s out of reach.
Armed looters target homes devastated by Hurricane Michael in Florida -- Armed looters are targeting homes and businesses that remain without electricity after being ravaged by Hurricane Michael a week ago. Sheriff's Maj. Jimmy Stanford said deputies have arrested about 10 looters each night since Florida's Bay County took a direct hit from the strong Category 4 storm last Wednesday. In some parts of the county, residents have spray-painted signs warning that "looters will be shot."Callaway resident Victoria Smith told the News Herald that thieves came into her townhome while she and her four children were sleeping with the front door open to allow a breeze inside."I must've been so exhausted from everything in the past days I didn't even hear them come in," Smith said. "They just snatched my purse out of my hands and ran. ... It was all we had."Often the looters have been armed, Stanford said."Most of our officers lost their homes, have been working 16- to 18-hour shifts with no sleep, no shower, and now they're encountering armed individuals," he said. "It's a stressful time for everyone in Bay County." The storm killed at least 16 people in Florida, most of them in the coastal county that took a direct hit from the storm, state emergency authorities said Tuesday. That's in addition to at least 10 deaths elsewhere across the South.
It will be years' before life at Tyndall Air Force Base returns to normal - Jillian Arrowood and her two daughters had just joined her husband William, her son and her father-in-law, an Army retiree who had recently had a stroke, in their new home by the water on Tyndall Air Force Base in Florida on October 8. There was no indication of the bad weather that was headed their way. Just as the sun was setting, a nearby airman who had been fishing told them that Tyndall received evacuation orders. Less than six hours after Jillian and her daughters arrived on base, the Arrowood family was packing up to leave, and they haven't been back since. They are one of hundreds of military families that have been displaced from Tyndall Air Force Base as a result of Hurricane Michael. The eye of the Category 4 storm cut straight through the base on October 10, causing catastrophic destruction. The storm reduced houses to splinters, blew off roofs and busted open hangars where top-grade aircraft such as F-22 planes were housed. In total, Brig. Gen. Edward Thomas, the Air Force Director of Public Affairs, estimated that there were more than 860 housing units on the base, and about 11,000 airmen and their families assigned there. He likened the damage to that seen on Keesler Air Force Base after Hurricane Katrina. He used Keesler as a comparison when estimating how long restorations would take. "I think it would be fair to say it will be years to make Tyndall look like it did before the hurricane hit," he said at a press conference this week. Those who have been displaced from Tyndall are stuck in limbo, uncertain of what will happen next. Tyndall was home to about 55 out of the total 187 F-22s in the U.S. fleet. Some were flown to Wright-Patterson Air Force Base in Ohio, but the Air Force refused to say how many were left behind.
Category 5 Super Typhoon Yutu is Lashing U.S. Territories of Saipan, Tinian in the Northern Mariana Islands - Super Typhoon Yutu is striking parts of the Northern Mariana Islands in the Western Pacific Ocean and has become the strongest typhoon of record to pass near the U.S. territories of Saipan and Tinian. The eye of Yutu has now pushed west of the islands of Saipan and Tinian in the U.S. Commonwealth of the Northern Mariana Islands, located about 120 miles north-northeast of Guam.Maximum sustained winds remain solidly Category 5 intensity, near 175 mph, as of the latest advisory from the U.S. Joint Typhoon Warning Center. The intense eyewall of Yutu was clearly visible from the National Weather Service Doppler radar at Andersen Air Force Base, Guam, early Thursday before the radar stopped transmitting data. There were numerous lightning strikes within Yutu's eyewall, indicative of an intense tropical cyclone.Winds gusted to 103 mph at Saipan International Airport before wind data stopped transmitting as the eyewall moved in. Some gusts over 50 mph have been measured on Guam, along with bands of rain. Typhoon warnings continue for the islands of Saipan, Tinian and Rota, and a tropical storm warning remains in effect for Guam, as well as the far northern islands of Alamagan, Pagan and Agrihan. Typhoon-force winds (at least 74 mph) will continue to lash Saipan, Tinian and Rota through late Thursday morning local time. Guam and the Northern Mariana Islands are 14 hours ahead of U.S. EDT. The NWS is forecasting seas to increase to 30 to 40 feet near the center of Yutu, with life-threatening rip currents expected from this surf. High surf and rip currents will be felt throughout the Marianas through at least Thursday as Yutu passes through. Winds of Category 5 magnitude are capable of the following impacts, according to the National Hurricane Center:
- High percentage of framed homes destroyed, with total roof failure and wall collapse.
- Fallen trees and power poles will isolated residential areas.
- Power outages will last for weeks to possibly months.
- Most of the area will be uninhabitable for weeks or months.
The eastern Pacific Ocean has seen its most active hurricane season on record - The Atlantic has endured a bad hurricane season, thanks to Florence and Michael, but it could be worse. The eastern Pacific Ocean, whose storms have affected Mexico’s west coast and Hawaii, has notched its most active season on record. And we still have more than a month left in the “official” window of eastern Pacific hurricane season.Already featuring three Category 5 hurricanes east of the international date line, the Pacific has been furiously cranking out storms since shortly after the season began May 15. Aletta formed on June 6, with Bud quickly spinning up three days later. Before long, a seemingly ceaseless barrage of storms blew up, largely dodging land save for a few brushes with coastal Mexico and Hawaii.Added up, this season tops the charts as the most energetic on record. Meteorologists evaluate how busy the hurricane season is by relying on a metric ACE — Accumulated Cyclone Energy — a measure of the intensity and duration of all the storms that form. Climatologists keep a running tally of ACE throughout the season to see how it stacks up against those from the past.The average season-to-date ACE for this time of year is 125.7 units. Through Oct. 23, storms had churned up a combined 311 units. That’s more than two and a half times the typical expectation. Even more staggering is the fact that no other season in recorded history has climbed above 295 units, reached in 1992. 2015 came in third place, at 287 ACE units. With five weeks left to go, we’re truly in uncharted territory.The season featured many highlights, among them the distinction of being only the third eastern Pacific season to boast three Category 5s. Just Monday afternoon, Willa metastasized into a 160 mph beast. Willa became the 10th major hurricane, Category 3 or higher, to form in the eastern Pacific this year. So far, 2018 is tied with 1992 for the second-most major hurricanes on record in this region.’
2018 Atlantic, Pacific Hurricane Season Most Active on Record - This hurricane season is the busiest we've ever seen—and we still have more than a month to go before it's over.If you combine all the hurricanes and tropical storms that formed in both the Atlantic and eastern Pacificoceans this year, the 2018 hurricane season is the most active in recorded history, USA TODAY reported, citing Colorado State University meteorologist Phil Klotzbach.To measure the activity of a hurricane season, meteorologists use the Accumulated Cyclone Energy (ACE) index which takes into account the combined number, strength and duration of tropical cyclones that formed. The average ACE for the Atlantic and eastern Pacific seasons together is 221 units of energy. But this year? The combined Atlantic/Pacific ACE is 432, breaking the previous record of 371 set in 1992, according to Klotzbach.This year's major storms included Florence and Michael in the Atlantic, as well as Lane, Rosa, Sergio andWilla in the Pacific. Hurricane season ends on Nov. 30.It's been such an active season in the Pacific that we're even starting to run out of names. After Willa became the 23rd named storm, we only have three more names on the list—Xavier, Yolanda and Zeke—before we have to switch to letters of the Greek alphabet to name storms.In the Atlantic, storm names only go to the letter "W" before reverting to Greek letters. The only time we had to do that was in 2005, NBC's Texas-based DFW noted. After Wilma, we named six more storms: Alpha, Beta, Gamma, Delta, Epsilon and Zeta.What's more, Klotzbach said we've had more major hurricane days this year than ever before in the Pacific."The 2018 Northeast Pacific (to 180°) #hurricane season has generated a whopping 34.5 major (Category 3+) hurricane days to date—shattering the old seasonal record of 24 major hurricane days set in 2015," he tweeted on Tuesday. The record hurricane season is driven by warmer-than-average ocean surface temperatures.
‘Oh My God, It’s Gone!' Hawaiian Island Important for Seals and Turtles Washed Away By Hurricane --A small Hawaiian island that was an important habitat for endangered species has entirely disappeared, The Huffington Post confirmed Tuesday.East Island in the French Frigate Shoals, an atoll around 550 miles northwest of Honolulu that formed part of the Papahanaumokuakea Marine National Monument, was entirely washed over by storm surge fromHurricane Walaka this month, Fish and Wildlife Service (FWS) satellite images show."I had a holy shit moment, thinking 'Oh my God, it's gone,'" University of Hawaii climate scientist Chip Fletcher told Honolulu Civil Beat. "It's one more chink in the wall of the network of ecosystem diversity on this planet that is being dismantled."East Island was only 11 acres—around a half mile long and 400 feet wide. But it was an important habitat for endangered Hawaiian monk seals, Hawaiian green sea turtles and several species of seabirds.National Oceanic and Atmospheric Administration (NOAA) protected species division director Charles Littnan told The Huffington Post he was not yet sure what the island's loss would mean for the wildlife that depended on it, but that similar small islands were increasingly likely to disappear as climate change leads to sea level rise. This event is confronting us with what the future could look like," Littnan said. Another nearby island, Trig Island, also disappeared this year due to wave activity, but its erosion had been predicted for years, Honolulu Civil Beat said.
1.2 Million Coastal Homes in England at Risk from Sea Level Rise by 2080 -- "We are not prepared." That's the major takeaway from a new report by the UK's Committee on Climate Change (CCC) looking at the potential impact of sea level rise on England's coastal homes and infrastructure, as one report author Prof. Jim Hall told The Guardian. The report, released Thursday, found that a third of current plans to shore up coastlines are not affordable, and that the country has not honestly confronted the level of risk. "There genuinely will be homes that it will not be possible to save," CCC's adaptation committee chair Baroness Brown told The Guardian. "The current approach is not fit for purpose. This report is really a wake-up call to the fact that we can't protect the whole English coast to today's standard. We could see as much as a meter of sea level rise before the end of the century, so within the lifetime of today's children, and that has a major impact on coastal flooding and erosion." The management plans currently in place have no funding or enforcement, the report said. Further, plans to protect more than 150 kilometers (approximately 93 miles) of coastline would cost more than the land they would save. BBC News and The Guardian summarized the report's major findings. Currently 520,000 properties, including 370,000 homes, face a 0.5 percent or greater risk from annual coastal flooding. 8,900 properties are at risk from coastal landslides. Around 7,500 kilometers (approximately 4,660 miles) of road, 520 kilometers (approximately 323 miles) of railway, 205,000 hectares (approximately 506,566 acres)of agricultural land and 3,400 hectares (approximately 8,401 acres) of potentially toxic landfill face a 0.1 percent or greater risk of coastal flooding each year. By 2080 1.5 million properties, including 1.2 million homes, could be at risk from floods. Another 100,000 properties could be at risk from landslides caused by erosion. About 1,600 kilometers (approximately 994 miles) of major roads, 650 kilometers (approximately 404 miles) of railway, 92 railway stations and 55 historic landfill sites could be at risk from flooding or erosion.
Alaska's growing season is getting longer thanks to climate change -If climate change remains unchecked, the growing season in Alaska may get longer, potentially offsetting some losses in crop yields in the contiguous 48 states, according to Earth Interactions, a journal published by the American Meteorological Society.Models show the growing season extending by an average of 48 days near Fairbanks as early as 2071 and 63 days on the Aleutian Islands, according to a paper published as an early online release. Some areas may see the season increase 87 days, between the last frost of spring and the first one of fall. Rick Lader, of the Department of Atmospheric Sciences at the University of Alaska at Fairbanks, was the lead author. Along with a longer growing season, Alaska may also get more days when heat stress presents a problem for crops. Because of the state’s harsh climate, farmland makes up less than 0.5 percent of its area. Oat, wheat and barley, along with some vegetables, berries and fruits grow there now.
PIOMAS October 2018 --Arctic Sea Ice by Neven - Wipneus has just updated his PIOMAS graphs to mid-October. More on that below, but first I'll discuss the minimum.---Another month has passed and so here is the updated Arctic sea ice volume graph as calculated by the Pan-Arctic Ice Ocean Modeling and Assimilation System (PIOMAS) at the Polar Science Center: As always, the minimum was reached in September. This year, the lowest amount of sea ice volume, according to PIOMAS, was reached on September 15th, and ended up 6th lowest on record, after 2010, 2011, 2012, 2016 and 2017. And thus, because the maximum was second lowest on record, total melt was 9th lowest on record:
If we look at the data for the end of September, 2018 has already crept to 5th lowest on record, almost on a par with 2017. Where most years gain a bit of volume during September, 2018 actually lost 119 km3, thus reducing the gap with all years that were lower at the end of August (dipping below 2010), as can be seen on this table showing how the differences with previous years have evolved from last month: If we then look at Wipneus' most recent graph with data up to mid-October, we see that 2018 has gone down even further in the ranking and is now in 3rd place: So, basically, what we're seeing, is the recent slow re-freeze reflected in PIOMAS volume data as well. Further confirmation is provided by SMOS, the satellite that measures sea ice thickness up to 1 metre (hat-tip to seaice.de): This means that the anomaly trend line on the PIOMAS volume anomaly graph is still hovering above the linear trend line (and will continue to do so until next summer, the only question is by how much): Both average thickness graphs, my crude calculation (by dividing PIOMAS volume numbers with JAXA extent) and the Polar Science Centre version, aren't showing anything spectacular: An end has now come to the slow re-freeze, although things still aren't progressing ultra-fast and 2018 is (among the) lowest on some extent graphs. Temperatures are still relatively high in the Arctic, as can be seen on Zack Labe's version of the DMI 80N graph, probably caused this time around by Arctic waters releasing their heat rather than heat getting imported from lower latitudes:
Media Is Ignoring The Escalating Militarization Of The Arctic - Europe, the Middle East and Asia-Pacific are not the only potential theaters of military operations. The Arctic is an area of geopolitical rivalry. The situation there is undeservedly kept out of media spotlight. Meanwhile, 2018 has brought new record lows in the extent of sea ice in the region. Russia has presented a 1.2 million square kilometers Arctic claim to the UN. Under the UN Convention on the Law of the Sea (UNCLOS), a Coastal state may claim rights to the continental shelf beyond 200 nautical miles by presenting scientific proof that it is a natural prolongation of its continental margin. The Russian Coastal exclusive economic zone can be extended, giving the state exclusive rights to exploit natural resources in the seabed and the ocean. Actually, Russia sits on $8.5 trillion oil reserves.Moscow considers the Northern Sea Route (NSR) lying east of Novaya Zemlya and specifically running along the Russian Arctic coast from the Kara Sea, along Siberia, to the Bering Strait as the water area within Russia's exclusive economic zone (EEZ) in accordance with Article 234 of the 1982 UN Convention on the Law of the Sea. This article grants all littoral states the right, within their exclusive economic zones (200 nautical miles), to pass non-discriminatory laws and regulations concerning navigation in ice-field areas. The US is a signatory but Congress has not ratified the document. Washington does not recognize the Russia’s claims and seeks to internationalize the region.The US, Canada, Denmark and Norway have their own claims. The Arctic is believed to hold more than $22 trillion worth of resources hidden beneath the ice, including 90 billion barrels of oil and 47 trillion cubic meters of natural gas. It’s only natural for states to have disputes as long as they are addressed on the basis of international law through negotiations. But the gradual escalation of tensions in the Arctic is a fact. According to the Danish government’s 2018-2023 defense guidelines, there will be an impressive 20 percent increase in defense spending in the next six years. The Arctic is mentioned as an area of increased activity and military presence. In summer, Norway recommitted itself to NATO defense spending target of at least 2% of GDP with its new long-term plan for 2021-2024 having this commitment as a key premise. Oslo is to invest in "strategic capabilities", such as the new F-35 stealth fighter, submarines and P-8 maritime patrol aircraft. Canada is to deploy an Arctic naval flotilla. Last year, Ottawa unveiled a plan to boost its defense spending by 70 percent (or more than $30-billion) over the next decade – much of it going to new warships and fighter jets. The Lomonosov Ridge is the main object of territorial dispute between Russia and Canada. It stretches 1,800 km from the New Siberian Islands cross the Arctic Ocean to the Canadian Ellesmere Island. Canada conducts military exercises in the area.
Canada earthquake- Three strong quakes strike off British Columbia coast - Three strong earthquakes, of between 6.5 and 6.8 magnitude, have struck off the coast of the Canadian province of British Columbia, according to the United States Geological Survey.All the quakes occurred in less than an hour on Sunday night. There were no immediate reports of casualties or of any damage from the earthquakes.A 6.6 magnitude quake struck first, at 10.39 pm local time. The quake hit at a depth of 33 km, about 190 km southwest of Port Hardy, a town on the northeast end of Vancouver island.A 6.8 magnitude quake and a 6.5 magnitude one occurred in succession shortly afterwards. Geophysicist Amy Vaughan said that there were possibly some smaller quakes as well as some aftershocks.Ms Vaughan added that the earthquakes were lightly felt onshore. British Columbia sits in the North American portion of the Ring of Fire, an arc of volcanoes and fault lines in the Pacific Basin.Its position means it is at risk of being hit by earthquakes. The US National Tsunami Warning Center said that a tsunami is "not expected."
New York Sues Exxon for Deceiving Investors on Climate Change - New York Attorney General Barbara Underwood filed a lawsuit against Exxon Mobil on Wednesday alleging the company defrauded shareholders and downplayed the risk of climate change to its business. The suit, first reported by the New York Times, is the culmination of a years-long investigation—colloquially known as the #ExxonKnew probe—into the energy giant's business practices and whether it lied to investors and the public about the risks of climate change.In a press release, Underwood's office said the investigation uncovered an alleged fraudulent scheme to systematically and repeatedly deceive investors about the significant impact that future climate change regulations could have on the company's assets and value. The alleged fraud reached the highest levels of the company, including former chairman and CEO Rex Tillerson."Investors put their money and their trust in Exxon—which assured them of the long-term value of their shares, as the company claimed to be factoring the risk of increasing climate change regulation into its business decisions. Yet as our investigation found, Exxon often did no such thing," Attorney General Underwood said in the press release. "Instead, Exxon built a facade to deceive investors into believing that the company was managing the risks of climate change regulation to its business when, in fact, it was intentionally and systematically underestimating or ignoring them, contrary to its public representations."The suit, filed in New York Supreme Court, New York County, seeks an order prohibiting Exxon from continuing to misrepresent its practices in this area and requires it to tell investors the truth. It also asks the court to award damages, although no dollar amount was specified. The impact of the alleged fraud on the company's value could be massive. Underwood's office listed the following:
- For 14 of Exxon's oil sands projects in Alberta, Canada, Exxon's failure to apply its publicly represented proxy costs resulted in undercounting of projected greenhouse-gas related expenses by more than $25 billion over the projected lifetime of the projects.
- Exxon undercounted projected greenhouse gas-related costs by as much as 94 percent—equal to about $11 billion—in an economic forecast for its Kearl oil sands asset in Alberta.
- Exxon failed to apply the proxy costs it represented to the public in estimating company reserves at Cold Lake, a major oil sands asset in Alberta, resulting in an overestimation of its projected economic life by 28 years, and an overestimation of company reserves volumes by more than 300 million oil-equivalent barrels, representing billions of dollars of revenues.
The fossil fuel corporation has tried to block the climate probe in courts in three states, the Times noted. A company spokesman told The Hill that there "is no evidence to support these allegations."
Supreme Court Grants Government’s Extraordinary Appeal, Pauses Kids Climate Case -- The U.S. Supreme Court has put the brakes on the landmark youth-led climate lawsuit, Juliana v. United StatesIn a one-page order issued Friday by Chief Justice John Roberts, Jr., the court granted a request made earlier this week by the Trump administration to stay discovery and trial pending review of its newly filed petition for writ of mandamus.Roberts also ordered the plaintiffs to respond to the government’s mandamus petition no later than Wed. Oct. 24.Trial in the case was previously set to begin on Oct. 29 in U.S. District Court in Eugene, Ore.The Trump administration has repeatedly asked both the Supreme Court and the Ninth Circuit Court of Appeals to stop the trial via writ of mandamus, a rarely used and even more rarely granted appeal in which a higher court overrules a lower court before a verdict has been issued. The Ninth Circuit has twice turned down the request for mandamus (and a third is pending) and the Supreme Court turned down a previous one as well.“We are confident once Chief Justice Roberts and the full Court receive the youth plaintiffs’ response to defendants’ mischaracterization of their case, the trial will proceed,” said Julia Olson, co-counsel for the young plaintiffs. The case has survived numerous attempts by the government to dismiss the case since it was originally filed in 2015. The 21 young plaintiffs from around the country argue that the federal government is violating their Constitutional rights to life, liberty and property by promoting an energy system that exacerbates climate change. They are asking for a science-based program to reduce carbon emissions and protect the climate for future generations.
Teen Climate Activist to Crowd of Thousands: 'We Can't Save the World by Playing by the Rules' - Addressing some 10,000 people in Helsinki on Saturday at what some campaigners are calling Finland's largest ever climate demonstration, 15-year-old Greta Thunberg urged marchers to fight for the major systemic changes that experts have said are necessary to limit greenhouse gas emissions and avert a looming climate catastrophe. "Today we use 100 million barrels of oil every day. There are no politics to change that. There are no rules to keep that oil in the ground, so we can't save the world by playing by the rules because the rules have to change. Everything needs to change and it has to start today," declared the Swedish teenager, who traveled to the capital city of her nation's Nordic neighbor for Saturday's massive march. "A lot of people say that Sweden or Finland are just small countries and that it doesn't matter what we do," Thunberg added. "But I think that if a few children can get headlines all over the world just by not going to school for a few weeks, imagine what we could do together if we wanted to." Thunberg garnered international media attention when, ahead of Sweden's September election, she refused to attend school and instead protested outside the Swedish parliament, handing out educational pamphlets to passersby. Now that the election has passed, the self-described "climate radical" and others who have joined the strike return to school for four days each week but still protest on Fridays. "We young people don't have the vote, but school is obligatory," she told The Local in August. "So this a way to get our voices heard." At her "now-famous" protest spot and in interviews with the press, Thunberg has stuck to the same message she delivered Saturday about the necessity of a rapid global shift away from fossil fuels and toward sustainable energy sources. "I think the election didn't matter," she said to The New Yorker about Sweden's latest batch of political races. "The climate is not going to collapse because some party got the most votes. The politics that's needed to prevent the climate catastrophe—it doesn't exist today. We need to change the system, as if we were in crisis, as if there were a war going on."
Trump thinks scientists are split on climate change. So do most Americans - When queried about the most recent IPCC report, Republican lawmakers delivered a consistent, false message – that climate scientists are still debating whether humans are responsible. The previous IPCC report was quite clear on this, attributing 100% of the global warming since 1950 to human activities. As Nasa atmospheric scientist Kate Marvel recently put it, “We are more sure that greenhouse gas is causing climate change than we are that smoking causes cancer.” Donald Trump articulated the incorrect Republican position in an interview on 60 Minutes: We have scientists that disagree with [human-caused global warming] … You’d have to show me the [mainstream] scientists because they have a very big political agenda To paraphrase, ‘I know scientists. I have the best scientists.’ And of course Trump thinks he has “a natural instinct for science” which, as astrophysicist Katie Mack noted, is not a thing: There is no "natural instinct for science." This is not a thing. There is curiosity, there is exploration, and there is the desire to learn & grow & test one's naive notions against cold hard data. Believing in a "natural instinct for science" is anathema to everything science is…Numerous papers have shown that over 90% of climate science experts agreethat humans are the main cause of global warming since 1950, and when considering peer-reviewed papers, the consensus exceeds 97%. And yet as surveys by Yale and George Mason universities have found, only about 15% of Americans are aware that the expert climate consensus exceeds 90%.
The Vileness of “Progressives” on the Climate Crisis -- Russell Bangs - There is one and only one way to avert the worst of the climate crisis: Stop emitting greenhouse gases; stop destroying sinks; rebuild sinks on a massive scale. All else is a lie. Most of all, the Big Lie is that anything constructive can be done within the congenitally destructive framework of capitalism, productionism, the economic civilization. Anyone who says otherwise is a liar who really cares nothing about the climate crisis or any other part of the great ecological crisis, other than seeing these as an opportunity to tout scams.For example, our “progressives” and “the left” are peas in a pod with George Bush in proclaiming that “the American way of life”, in all its wastefulness, destructiveness, and ugliness, “is non-negotiable.” Therefore, for them just as much as for corporations and rightists, the only true solution, which requires the complete end of this nightmarish “way of life”, is a non-starter, indeed is inconceivable.For progressives just as much as for ExxonMobil the ecological assault not only must continue but must escalate at all times. In the case of those who cry crocodile tears over the climate, the general assault must be augmented with yet another vicious assault in the name of “doing something about the climate.” Yes, they want to do something all right: They want massive, ecologically destructive industrial projects in order allegedly to “capture” carbon. In reality none of these would work. The only way to capture carbon is to stop emitting; stop destroying natural sinks; rebuild natural sinks on a massive scale. But that would require them to give up their worthless appliances, their worthless gadgets, their worthless industries, most of all their worthless cars. And like I said, “progressives” are every bit as materialistic, every bit as much nothing but the appendages of their machines and gadgets, and have every bit as much a hatred and destruction-lust toward the Earth as the fattest, most civilization-dependent conservative.
Our Constitutional Right to Protest Is Under Assault - A new proposed rule from the National Park Service is aiming to restrict peaceful protest in parks and even sidewalks within the District of Columbia—just one effort on a long list of anti-protest laws popping up all around the country.Our right to free speech and peaceful protest is so fundamental to our democracy that it's one of the first points the authors of the Constitution felt must be guaranteed—centuries of state-sponsored oppression and persecution was bad enough to deem free speech a top priority for the new republic. Without this protection, think of the dozens of modern critical moments shaping our country that might not have happened otherwise—from the 1969 Moratorium to End the War in Vietnam, which bolstered the anti-war sentiment for many families, or the 1963 March on Washington for Jobs and Freedom, where Martin Luther King Jr gave his iconic "I have a dream speech." In moments like these, protests gave ordinary people like me and you a space and place to speak in the public interest, allowing us to practice of our First Amendment rights and hit an emotional cord, shaping the national discourse. But now this freedom to express ourselves is under serious threat, thanks to Trump's Interior Department.Under a new proposal introduced by Interior Secretary Ryan Zinke, the National Park Service is looking to dramatically limit the right to demonstrate near the White House and the National Mall, block 80% of the White House sidewalks, impose strict limits on spontaneous demonstrations, and even charge people for protesting.
Climate change and compassion fatigue - I’m a climate scientist, and I don’t worry about climate change very much. I think about it every day, but I don’t let it in. To me climate change is a fascinating math problem, a symphony unfolding both slowly and quickly before our very eyes. The consequences of this math problem, for myself and my family and our future, I keep locked in a tiny box in my brain. The latest IPCC special report tells the world what I and all of my colleagues have known for years: we’re seriously running out of time. In order to keep climate change in the category of “expensive inconvenience” rather than “civilisation destroyer”, we’re going to have to decarbonise the global economy in less time than many of the people reading this have been alive. But given the priorities of most of the world’s governments, it seems uncomfortably plausible that we’ll be facing the sort of post-apocalyptic wasteland I’ve only ever seen in movies. But I can’t seem to imagine my future intersecting with this future. I can’t picture myself or my family as part of the movie, only as part of the audience. It feels deeply intangible, like my own death. Instead I surround myself with the comforting minutia of academic life. I worry about small things, like how I’m going to fix the latest problem with my model, and slightly larger things, like what I’m going to do when my contract runs out and whether I will ever get a permanent job. But mostly I just really enjoy studying the disaster. An ice sheet which is falling apart is far more interesting than a stable ice sheet, and I feel privileged to have access to such a good math problem. And I don’t worry about climate change, I don’t open that box, for months at a time. “Compassion fatigue” is a term used to describe healthcare professionals who become desensitised to tragedy and suffering, and lose the ability to empathise with their patients. It begins as a coping strategy, because fully absorbing the emotional impact of such harrowing work would eventually make it impossible to get up in the morning. I think I have compassion fatigue with climate change. The more I study it, the less I actually think about it. The scarier it gets, the less I seem to care.
The Climate Won’t Stop Changing In 2100 - To suppose that climate change is somehow reversible in the natural course of events on any meaningful timescale is tantamount to denial. The science states clearly that the choices made in climate policy in the coming decades will likely affect the planet for millennia. Nothing will be reversible, except perhaps on geologic time scales—tens of thousands of years, by which time whatever remains of Trump’s towers will likely be under literal, if not financial, water. Still, there are limits to our understanding about climate change in the very long term. That’s because climate models tend to aim at the year 2100, because of both practical and technological limitations on what can be modeled. After that, we’re looking at very long-term timescales. But no matter how we model, the effects will clearly be irrevocably catastrophic unless emissions are reduced, and fast. The 2 degrees Celsius of global warming above preindustrial levels, once considered the limit for avoiding catastrophe, is now recognized as having catastrophic consequences. Wildfires, coral reef die-offs, droughts and floods will all get worse by 2040. And ambitious geoengineering tech that doesn’t exist yet could be crucial in mitigating some of warming’s worst effects. But even these reports have to stop somewhere, and the date is 2100, when most of the IPCC’s climate projections end. The reason for the cut-off is simple: computing power and time. When the IPCC started its work in the late 1980s and early ’90s, the computers simply didn’t have the capacity to run models that reached beyond 2100 in a reasonable amount of time. The models that have been developed since have grown increasingly sophisticated, but still largely take aim at the end of the century. That explains why the reports from the IPCC have so far only hinted at what might happen after 2100. Running these models on tennis-court-sized supercomputers uses up a ton of energy, too. A dismal side effect of figuring out how bad things will be in a future climate is that it takes a lot of power to do it. Of course, it doesn’t take a supercomputer—or even a clairvoyant—to imagine what happens next. Neither the cataclysmic events of climate change nor warming will stop in 2100, even if emissions do miraculously taper off in time to level off warming at 1.5 or 2 degrees Celsius above preindustrial levels. “What we’re doing right now is we’re putting a big spike of carbon into the atmosphere—instantaneously on geologic time scales,” . “Even 50,000 years in the future there will still be more carbon in the atmosphere than there was before.”
Y Combinator plans to back carbon removal ventures The prominent early-stage investor has invited startups exploring novel ways of sucking greenhouse gases from the atmosphere to apply for its accelerator program. Background: A growing amount of research concludes it will be nearly impossible for the world to avoid a dangerous 2 ˚C rise in global temperatures merely by cutting greenhouse-gas emissions, given the concentrations already in the atmosphere and the slow pace at which nations are shifting to clean energy. At this stage, the UN’s climate change panel and other institutions have said various methods of capturing and storing carbon dioxide will be required as well. The problem is that scientists and companies haven’t yet figured out a way to do so economically at anywhere near the scale required. “It’s time to invest and avidly pursue a new wave of technological solutions to this problem—including those that are risky, unproven, even unlikely to work," Four to focus on: Several startups, including Climeworks and Carbon Engineering, have raised money and built facilities to capture carbon dioxide directly from the atmosphere. But Y Combinator highlighted four even earlier-stage approaches to removing greenhouse gases where it would be willing to fund startups, or potentially nonprofit research. They include using an electrochemical method to accelerate the natural process of mineral weathering, which pulls carbon dioxide out of the atmosphere and oceans; creating genetically engineered phytoplankton that can use photosynthesis to capture and store carbon dioxide in the ocean; artificially flooding deserts to create oases that can support phytoplankton for the same purpose; and engineering enzymes that can efficiently capture and store carbon, and then be disposed of or used to create other products.
Trump Gives Hydropower A Major Boost With Water Spending Bill - The U.S. hydropower industry came out as a big winner after President Donald Trump signed a bipartisan water infrastructure bill into law. “As a candidate I called for a great rebuilding of America’s crumbling infrastructure,” Trump said Tuesday as he put his signature onto America’s Water Infrastructure Act of 2018, a comprehensive water infrastructure bill that will authorize $6.1 billion for 12 new projects administered by the Army Corps of Engineers. “This bill authorizes needed funding and tools to enhance our coastal ports, reduce flood risks, restore ecosystems, keep our inland waterways — which are in deep, deep trouble, but they won’t be for very long — upgrade our dams, hydropower and irrigation systems,” Trump explained, listing the many beneficiaries of the legislation. One clean energy resource, in particular, came out on top from the bill: hydroelectricity. Under America’s Water Infrastructure Act, the federal government will be able to expedite the construction of electricity-producing dams. More specifically, the bill establishes two separate task forces that speed up the licensing procedures that transition conventional dams into clean energy power plants. The bill also increases the number of hydropower pump storage facilities. Despite the growing attention placed on wind and solar, hydropower remains the largest source of renewable in the United States by far. Hydroelectricity makes up about 44 percent of total renewable energy generation and 7 percent of the country’s total electricity production, according to the U.S. Energy Information Administration.
Trump says EPA acting chief 'doing well,' may become permanent (Reuters) - President Donald Trump said on Tuesday that U.S. Environmental Protection Agency Acting Administrator Andrew Wheeler, a former coal industry lobbyist, was doing a good job and could be nominated to permanently take on the role. “He’s acting, but he’s doing well, so maybe he won’t be so acting so long,” Trump said at an event alongside Wheeler. Wheeler took the reins at EPA after the agency’s former head, Scott Pruitt, resigned in July following a slew of ethical controversies that included his first-class travel, round-the-clock security detail, and expensive office equipment. Pruitt had aggressively moved to roll back Obama-era climate regulations and other environmental protections to unfetter the oil and coal mining industries. In Wheeler, Trump has seen another strong supporter of his deregulatory agenda and advocate for the fossil fuels industry, but without the constant criticism over alleged mismanagement that plagued Pruitt. Wheeler had worked at the EPA in the 1990s and later in the Senate under Republican Senator Jim Inhofe, a skeptic of mainstream climate science, before moving to the private sector as a lobbyist and consultant. He has said that he is “not at all ashamed” of his lobbying for the coal company Murray Energy Corp, the focus of criticism by environmentalists. Wheeler also lobbied for utility Xcel Energy Inc and consulted for biofuels industry group Growth Energy, agricultural merchant and biofuels producer Archer Daniels Midland Co, and International Paper Co, according to his public disclosures. He has been in the job in an acting capacity for more than 100 days, one of the longest tenures for an acting chief at the agency in decades. The next permanent EPA administrator must be nominated by Trump and confirmed by the Senate.
Canada's Trudeau vows to impose carbon tax, opponents push back (Reuters) - Canadian Prime Minister Justin Trudeau on Tuesday said he would fulfill a promise to impose a carbon tax on provinces unwilling to combat climate change, prompting instant protests from a voter-rich part of the country. Trudeau, whose ruling Liberals face an election in October 2019, told a news conference that all the money collected would be returned directly to taxpayers in the four provinces without plans to curb the emission of greenhouse gases. Starting in April 2019 carbon pollution will initially cost C$20 ($15.27) a tonne, rising by C$10 a year until it reaches C$50 in 2022. Ottawa unveiled the proposal in 2016. “Putting a price on pollution is the best way to fight climate change,” said Trudeau. Official data regularly shows that Canada has little chance of meeting its climate change goals of reducing emissions by 30 percent from 2005 levels by 2030. Canada’s Conservatives, the largest opposition party in the federal Parliament, say they will scrap the levy if they take power next year. Party leader Andrew Scheer, who has yet to unveil his own climate change plan, dismissed the tax as “an election gimmick.” The new tax will have the most impact in Ontario, Canada’s most populous province, where the new right-of-center Conservative government of Premier Doug Ford says it will take Ottawa to court over the plan. “The Trudeau carbon tax will force our seniors to pay more for home heating ... (and) make parents pay more to fill up their car when they drive their children to and from soccer practice,” Ford tweeted
Despite climate pledges, China struggles to break coal habit (Reuters) - In a former mining district in eastern China, authorities have shut dozens of pits and invested billions of yuan to resculpt the broken landscape, creating gardens, forest walks and wetland parks, as well as a small museum dedicated to coal. “There were many villages specializing in running coal mines and when the mines were shut down we lost around four-fifths of our income - we were under huge economic pressure,” said Meng Qinqxi, a senior Communist Party official in Mazhuang, a village on the outskirts of the heavy industrial city of Xuzhou. “This problem is not ours alone... but a national policy, and no one can resist it.” Xuzhou, in the Yangtze River delta manufacturing hub of Jiangsu, shut its coal pits a decade ago after 130 years of mining, one of many districts to stop producing the filthiest of fossil fuels in line with central government directives. But despite an unprecedented surge of investment in alternative energies, together with caps on coal use and the establishment of “no-coal zones” throughout the country, China’s overall consumption and production are again rising. When U.S. President Donald Trump said he was pulling the United States out of the Paris climate accord last year, China reaffirmed its commitments to tackle the problem of coal, by far the biggest source of its climate-warming carbon emissions. The Intergovernmental Panel on Climate Change (IPCC) said in a landmark report this month that “unprecedented” changes were needed to keep global temperature rises to within 1.5 degrees Celsius, including profound cuts in burning coal. China has made efforts to cut the share of coal in total energy use, with the figure expected to drop to 58 percent by 2020, down more than 10 percentage points in a decade. It has also already met a 2020 target to cut the amount of carbon dioxide it emits per unit of growth. But the absolute volumes of both coal and CO2 remain by far the world’s highest, and are still set to rise.
SC judge expected to strike down controversial nuclear law - A state judge soon will find unconstitutional the infamous law that enabled South Carolina’s $9 billion nuclear construction fiasco, according to a state senator. That ruling could reduce how much SCE&G’s 730,000 electric customers pay for power monthly by slashing the amount the Cayce-based utility can charge them to pay off the failed V.C. Summer Nuclear Station expansion project, which the utility abandoned in July 2017. The ruling could be disastrous for SCE&G, which has threatened to file for bankruptcy if its shareholders are forced to eat the nuclear project’s costs.Stock in SCE&G’s parent company, SCANA, plummeted Monday as news of the impending ruling spread. SCANA shares were down more than $6 a share at one point Monday before closing at $36.40, down almost 11 percent. SCANA shares were down, in part, because the judge’s ruling could cause Dominion Energy to walk away from its proposed buyout of SCANA. The Virginia-based utility has said it will pull out of that deal if lawmakers or a court throw out the 2007 Base Load Review Act, blocking SCE&G from charging its customers to recover its almost $5 billion in nuclear-related costs. State Sen. Brad Hutto, D-Orangeburg, said the 2007 law would be declared unconstitutional at a Charlotte energy conference Friday, according to the Charlotte Business Journal. Several sources independently confirmed to The State Hutto’s understanding of Circuit Judge John Hayes’ upcoming order, which could be announced as early as next week. After its stock plunged Monday, SCANA confirmed in a statement to investors that Hayes had asked attorneys suing the utility to draft orders for him ruling the Base Load Review Act violates the S.C. Constitution.
Perry Says White House Still Backs Nevada Nuclear Dump - Energy Secretary Rick Perry said the White House still supports construction of a planned repository for nuclear waste in Nevada, despite President Donald Trump’s suggestion over the weekend that he was reconsidering. When asked if the Trump administration still supports Yucca Mountain, Perry swiftly said “Yes.” “I’m making this presumption by looking at a budgeting process and there was money in the president’s budget to manage Yucca,” Perry said, after giving remarks at the department’s Brookhaven National Laboratory in Upton, New York. Trump requested $120 million in his budget proposal for the geologic repository 90 miles north of Las Vegas. “I’m going to follow the law. And the law says, ‘here are the things you’re going to do.’ Those have to be funded. And so, we’re following the law,” Perry said. “If Yucca is to be closed, then I’m sure that Congress will deal with it and I’ll follow their instructions.” Trump told a Nevada television station he was reconsidering his support after campaigning last weekend with Senator Dean Heller, an embattled Republican senator who opposes the project and is in a tight re-election battle.
Atmospheric Radiation Increasing from Coast to Coast in the USA -High-altitude balloon flights conducted by Spaceweather.com and Earth to Sky Calculus show that atmospheric radiation is intensifying from coast to coast over the USA–an ironic result of low solar activity. Take a look at the data: Since 2015, we have been monitoring X-rays, gamma-rays and neutrons in the stratosphere–mainly over central California, but also in a dozen other states (NV, OR, WA, ID, WY, KS, NE, MO, IL, ME, NH, VT). Everywhere we have been there is an upward trend in radiation–ranging from +20% in central California to +33% in Maine. The latest points, circled in red, were gathered during a ballooning campaign in August-October 2018. How does Solar Minimum boost radiation? The answer lies in the yin-yang relationship between cosmic rays and solar activity. Cosmic rays are the subatomic debris of exploding stars and other violent events. They come at us from all directions, 24/7. Normally, the sun’s magnetic field and solar wind hold cosmic rays at bay–but during Solar Minimum these defenses weaken. Deep-space radiation surges into the solar system. Cosmic rays crashing into our planet’s atmosphere produce a spray of secondary particles and photons. That secondary spray is what we measure. Each balloon flight, which typically reaches an altitude greater than 100,00o feet, gives us a complete profile of radiation from ground level to the stratosphere. Our sensors sample energies between 10 keV and 20 MeV, spanning the range of medical X-ray machines, airport security devices, and “killer electrons” in Earth’s radiation belts. Cosmic radiation at aviation altitudes is typically 50 times that of natural sources at sea level. Pilots are classified as occupational radiation workers by the International Commission on Radiological Protection (ICRP) and, according to a recent study from researchers at the Harvard School of Public Health, flight attendants face an elevated risk of cancer compared to members of the general population. There are studies (one recently published in Nature) asserting that heart rate variability and cardiac arrhythmias are affected by cosmic rays in some populations. If true, it means the effects reach all the way to the ground.
Nuclear Hanford Vit plant workers sent ‘take cover immediately’ alert over ‘incident’ with plutonium and uranium tunnels - WORKERS at a nuclear plant in the US have been told to "take cover immediately" following an incident involving plutonium and uranium tunnels.A text message alert was sent to workers at the Hanford plant in Washington around 6am local time today - or around 2pm in the UK. The message read: "WTP Alert: The WTP Site is in Take Cover. Go to the closest Take Cover facility now. Avoid eating or drinking until further notice."Await further instructions." NBC reported the warning was issued as a precaution to workers in the 200 East Area of Hanford after steam was observed coming from Plutonium/Uranium Extraction Facility (PUREX) Tunnel 2 during a tunnel filling operations. There was no indication of a release of hazardous material.
‘US would be history if Russia nukes Yellowstone volcano with mega-bombs’ – expert In order to curb the aggression from the West, Moscow shouldn’t compete with Washington in number of nukes, military expert Konstantin Sivkov wrote in a new article. The president of the Academy of Geopolitical Problems believes that an “asymmetrical response” would work much better for Russia, as it is able to produce nuclear weapons with a yield of more than 100 megatons. If “areas with critically dangerous geophysical conditions in the US (like the Yellowstone Supervolcano or the San Andreas Fault)” are targeted by those warheads, “such an attack guarantees the destruction of the US as a state and the entire transnational elite,” he said. The production of around 40 or 50 such mega-warheads for ICBMs or extra-long-range torpedoes would make sure that at least a few of them reach their target no matter how a nuclear conflict between the US and Russia develops, the expert said. Such scenario “again makes a large-scale nuclear war irrational and reduces the chances of its breakout to zero,” Sivkov said. The possession of such weapons by Russia is what would finally make Washington start talking to Moscow and give up on its sanctions policy towards Russia, the expert said.
State Says NE Ohio Well Linked to Quakes Has Way to Reopen (AP) — The state has suggested that a shuttered injection well linked to two small earthquakes in northeast Ohio could resume operations if the owner submits an acceptable plan. The Ohio Division of Oil & Gas Resources Management urged the Ohio Supreme Court in an Oct. 11 filing not to hear American Water Management Services' appeal of a lower court decision regarding the company's Weathersfield Township Well No. 2, near Youngstown, The Vindicator in Youngstown reports. The well pumped brine wastewater from hydraulic fracturing operations into the earth. Earthquakes were detected below ground in July and August of 2014. On the day of the well's first earthquake in July 2014, the company had started injecting about 2,000 barrels per day, and then increased the volume to 5,500 barrels. The division, a part of the Ohio Department of Natural Resources, suspended well operations. The company owned by Howland-based Avalon Holdings has argued the state abused its discretion in shutting down the well. The case led to appeals to a state oil and gas commission, a Franklin County Common Pleas Court judge, and eventually the 10th District Court of Appeals in Columbus, which affirmed the state's position. The division told the Supreme Court justices in its Oct. 11 filing that the case is "routine" and doesn't present issues of statewide interest. Regulators said a process exists for re-opening the well if the company submits a comprehensive plan for safely restarting it. The filing also said Ohio no longer plans to develop statewide injection well guidelines but will use a "case by case approach." The state's filing said the well's operations were "likely responsible for two earthquakes of increasing severity in an urban area populated by schools, residences, businesses and a fire department."
Reject eighth try for ban on fracking - Youngstown Vindicator Editorial - October 27, 2018 - What part of “no” – multiplied tens of thousands of times over in votes over five years – do the self-appointed do-gooder backers of the Youngstown Drinking Water Protection Bill of Rights don’t understand? Apparently not much, given their foolish and unrelenting pursuit of their misguided and foolhardy proposal. After all, responsible and civic-minded Youngstown residents have convincingly and resoundingly said no to the jobs-killing initiative seven times over now – from 2013 to the 2018 primary election.We therefore urge the city’s 43,874 voters registered for next month’s general election to do likewise at the polls on or before Nov. 6.Various versions of the amendment to ban hydraulic fracturing and other related gas and oil exploration activities in the city have been on the ballot in those five years. Each time voters said no by credible margins. They said no to the illogical premise of the initiative. The anti-frackers’ bill of goods would remain unenforceable and unconstitutional as the Ohio Constitution clearly gives the state Department of Natural Resources exclusive authority to oversee and regulate all oil and gas drilling activity in every nook and cranny of the Buckeye State, including its cities.Just as illogical is the fact that no fracking activity is taking place or is planned in Youngstown proper.Those same voters – including 3,590 of them in last May’s failed attempt alone – also said no to the potential adverse economic impact the charter amendment would invite. Even though no fracking activities are taking place in the city, hundreds of jobs here are directly tied to the health and well-being of drilling for oil and natural gas. Most notably among them in Youngs-town is Vallourec Star, which is currently in the midst of a major hiring boom.
Kinder Morgan Cancels Fracked Liquids Pipeline Plan, and Pursues Another - After years of battling local opposition and volatile economics, pipeline giant Kinder Morgan has abandoned a plan to send natural gas liquids from Ohio across six states to Texas via a repurposed 75-year-old pipeline.Kinder Morgan's line, the Utica Marcellus Texas Pipeline, has been carrying natural gas the other way, from the Gulf Coast to gas-rich Ohio, like carrying coal to Newcastle. After the fracking boom of the past decade the company wanted to reverse the 964-mile long line's direction, extend it, and change its cargo from gas to liquid byproducts.The drilling frenzy has created a glut of these liquids that are used in petrochemical production. Kinder Morgan was hoping to give its old pipeline a new economic lifeline by carrying them to markets in the Gulf region.The proposal was approved by federal regulators, but challenged in court after stirring intense opposition in Kentucky, where the pipeline passes.Pipeline safety advocates consider natural gas liquids more dangerous than natural gas because they not only carry an explosion risk, but also an asphyxiation risk, and can pollute ground or surface water supplies. The company shifted course this week in a quarterly earnings report. Its chief executive officer, Steven Kean, told analysts on Wednesday that Kinder Morgan had not signed up a single customer to pay for shipments of the liquid byproducts through its line.Plan B, the company said, is to use the same reversal, but continue shipping natural gas, drawing from wells in Appalachia and taking the gas south, Kean said. One thing that's changed since Kinder Morgan's original proposal is that exports of natural gas are expanding, including to Mexico.
New gas-fired generation to boost Appalachia gas demand - — With about 21,000 MW of new gas-fired power generation planned in the Appalachian Basin, demand for gas is expected to rise as it overtakes coal in power generation market share. Twenty-six combined-cycle gas-turbine power plant projects are likely to be built in the states of Pennsylvania, West Virginia and Ohio over the next several years, according to S&P Global Market Intelligence data. The majority of the generation projects are slated to be built in Pennsylvania, where 15 projects, contributing 14,730 MW of capacity, are likely. In Ohio, the eight projects listed as planned would add 7,695 MW of capacity, according to Market Intelligence. Three gas-fired power projects have been proposed for West Virginia, representing more than 2,000 MW of capacity. But all three are opposed by interests thought to be allied with the state's coal lobby and have been delayed in the state permitting process. The proposed projects range in size from the large -- such as Apex Power Group's Guernsey Power Station in Ohio, with a projected capacity of 1,650 MW -- to the small -- an Ohio State University Cogeneration Plant, owned by Axium Infrastructure, with a 60 MW capacity. Proposed power generation in the three states that is expected to come on line in the 2018-2020 time frame is expected to add about 1.16 Bcf/d of gas demand, assuming a 70% capacity factor and 6,500/Btu/kWh heat rate, according to S&P Global Platts Analytics data. This increased demand for gas is likely to be met with gas produced from the Marcellus and Utica shales, which currently produce about 29 Bcf/d, according to the US Energy Information Administration. Construction of new gas-fired generation in the Appalachian region reflects a trend for gas to eventually overtake coal as the top fuel for power generation in the PJM Interconnection, despite attempts by the Trump administration to retain coal-fired plants slated for retirement.
Fracking conference and opposing tribal rally highlight competing visions for Western Pennsylvania's future - —As acting EPA administrator Andrew Wheeler and natural gas industry representatives descend on Pittsburgh for the annual Shale Insight Convention this week, tribal leaders are rallying against the continued expansion of fracking operations and a proposed ethane cracker that would reshape the local economy and landscape.Wheeler will deliver the keynote address at the Shale Insight Convention, which kicks off on Tuesday. The three-day convention, hosted by the Marcellus Shale Coalition, is a meeting between policymakers, researchers, and major players in the fracking industry: High-level executives from Shell, Chevron, ExxonMobil, EQT Corporation, Dominion Resources, and People's Natural Gas, among others, are usually in attendance.Meanwhile, on Wednesday morning, more than 50 Native American tribal and community leaders will gather at downtown Pittsburgh's Point State Park fountain, which marks the place where the Monongahela, Ohio, and Allegheny Rivers converge. The opposing gatherings epitomize an ongoing national struggle between indigenous groups, environmentalists and the oil and gas industry. As the Appalachian region is set to transform into a petrochemical hub through the proposed development of a vast network of plastics plants, local resistance to that shift mirrors a broader national movement questioning the safety of running pipelines through residential areas, fracking's impact on air and drinking water, and the lack of consideration given to indigenous communities when development gets underway."There's a lot of information and statistics about all the devastation these pipelines can cause to the environment," Guy Jones, an Ohio resident and member of the Standing Rock Sioux who will participate in Wednesday's ceremony and rally, told EHN, "but we also need to be thinking about the spiritual and cultural importance of water to Native people."While the Shale Insight Convention-goers are checking into their hotels and picking up their name badges, Native Americans representing tribes from across the country will gather at the Point to perform a ritual water ceremony, during which they'll sing and pray over the three rivers and commingle their waters with small containers of water brought from the rivers near their homes.
Water ceremony kicks off protest against shale gas and petrochemical industries - Pittsburgh Post-Gazette Environmental activists and Native American leaders from across the nation marched through Downtown Pittsburgh Wednesday morning to highlight threats to area waterways and the climate posed by expanding shale gas drilling, pipelines and petrochemical facilities. About 100 joined the “Defend Our Water -- Day of Action” event, which began in Point State Park with a tribal water ceremony at the headwaters of the Ohio River. Members of the Seneca Nation, Ojibwe, and Standing Rock Sioux tribes participated in the ceremony, march and rally. After hiking up Liberty Avenue, the group gathered along the Allegheny River next to the David L. Lawrence Convention Center where U.S. Environmental Protection Agency Acting Administrator Andrew Wheeler had just finished telling industry leaders at the “Shale Insight 2018” conference that the Trump administration will continue deregulating their industry. “The insight I have,” Terrie Baumgartner, an Aliquippa resident, said addressing the rally outside, “is that this shale gas madness must end.” Ms. Baumgartner, who lives six miles from the petrochemical complex that Shell is building in Potter, Beaver County, and 2 ½ miles from where Energy Transfer’s Revolution pipeline exploded last month, said area residents could expect a proliferation of facility construction problems and health impacts if the petrochemical industry is allowed to continue its buildout. “It’s not about energy independence. It’s about making stuff we don’t need,” said Ms. Baumgartner, a member of the Clean Air Council, an environmental organization. “We’re already drowning in a sea of plastic trash. And microplastics are in our blood, our urine, our embryonic fluid and breast milk.”Guy Jones, a tribal leader of the Standing Rock Sioux who has been fighting pipelines on native land since the 1980s, said the world has a need for “spiritual ecology.” “We are gathered here today because they (the shale gas conference goers) are gathered here. . .and as caretakers of the land, we must uplift them,” Mr. Jones said. “At one time they were leaders, but those leaders have gone away because of corporate greed. But we haven’t gone away. We are still here.”
This is what indigenous resistance to fracking looks like in Pennsylvania - —Just after 10 a.m. today, Degawenodas, a water protector of the Wolf Clan of the Seneca Nation stood facing the place where the Ohio, Monongahela, and Allegheny rivers converge, and let out three sharp cries as a coal barge drifted beneath one of the city's iconic bridges. The October sky was a clear, bright blue, and a cold wind blew fluffy clouds by overhead. A crowd of about 70, bundled up in coats and hats, gathered behind Degawenodas, surrounding the fountain in downtown Pittsburgh's Point State Park. Despite its size, the crowd remained silent—aside from from the water protector's cries, the only other sounds were the rushing of the waters and the shriek of distant train whistles.Degawenodas was one of two indigenous tribal faith leaders who traveled to Pittsburgh to lead a water ceremony aimed at protecting the three rivers. The event, which was followed by a rally, was planned to coincide with a massive fracking convention taking place in downtown Pittsburgh at the same time. Both the ceremony and the rally, which were coordinated in collaboration with at least 15 local and national environmental groups, were in opposition to the profusion of new fracking wells, pipelines, and petrochemical industry infrastructure currently under development in Southwestern Pennsylvania, and the threats they pose to waterways in the region and beyond.The opposing events epitomize an ongoing national struggle between indigenous groups, environmentalists, and the oil and gas industry."The extractive relationship we have with this water and this land is like that of an addict to a drug," Sharon Day, an Ojibwe "Water Walker" from Minnesota who co-lead the ritual, told the crowd. "That boom and bust—we always tell ourselves that this time it will be different, but deep down we know that it won't."During the hour-long water ceremony (which the leaders requested not to be photographed or recorded), incense was burned and sacred herbs were strewn on the ground and into the rivers. Day led the crowd in the singing of an Ojibwe water song with lyrics that translate to, "Water, we love you, we thank you, we respect you."
Fracking wastewater accumulation found in freshwater mussels' shells - Elevated concentrations of strontium, an element associated with oil and gas wastewaters, have accumulated in the shells of freshwater mussels downstream from fracking wastewater disposal sites, according to researchers from Penn State and Union College. "Freshwater mussels filter water and when they grow a hard shell, the shell material records some of the water quality with time," said Nathaniel Warner, assistant professor of environmental engineering at Penn State. "Like tree rings, you can count back the seasons and the years in their shell and get a good idea of the quality and chemical composition of the water during specific periods of time." In 2011, it was discovered that despite treatment, water and sediment downstream from fracking wastewater disposal sites still contained fracking chemicals and had become radioactive. In turn, drinking water was contaminated and aquatic life, such as the freshwater mussel, was dying. In response, Pennsylvania requested that wastewater treatment plants not treat and release water from unconventional oil and gas drilling, such as the Marcellus shale. As a result, the industry turned to recycling most of its wastewater. However, researchers are still uncovering the long-lasting effects, especially during the three-year boom between 2008 and 2011, when more than 2.9 billion liters of wastewater were released into Pennsylvania's waterways. "Freshwater pollution is a major concern for both ecological and human health," said David Gillikin, professor of geology at Union College and co-author on the study. "Developing ways to retroactively document this pollution is important to shed light on what's happening in our streams."
High levels of toxic fracking chemicals are found in shellfish near former disposal sites - YEARS after companies were forced to recycle waste -- Shellfish are showing long-term signs of contamination from toxic chemicals linked to fracking. Academics at Pennsylvania State University found strontium in the crustaceans' outer layers -seven years after authorities first banned the dumping of toxic wastewater into local rivers.The discovery is being touted as proof that the well-stimulation technique - which sources oil and gas by injecting liquid at high pressure into subterranean rocks - has a negative, long-term impact on the environment. Moreover, researchers believe the freshwater animals could be used to further monitor pollution levels caused by fracking.This is because shellfish naturally feed by filtering water, leaving a residue of pollutants in their hard shells. This is because shellfish naturally feed by filtering water, leaving a residue of pollutants in their hard shells. This, in turn, acts as proof of contaminants in the surrounds - which may also affect fish and various mammals that feed on them, including humans.'Freshwater pollution is a major concern for both ecological and human health,' said Professor David Gillikin, co-author on the study. 'Developing ways to retroactively document this pollution is important to shed light on what’s happening in our streams.' Before 2011, when local fracking companies were forced to recycle their waste, a whopping 2.9 billion litres of contaminated water were dumped into Pennsylvania’s rivers. The findings were published in the journal Environmental Science and Technology, last month. It comes after a 2014 study suggested that people living near fracking sites are twice as likely to suffer from respiratory and skin problems.
Gas pipeline limits create potential crisis in New England - The National Weather Service may be predicting a mild winter for New England and the rest of the country. Based on that prediction, you might expect the organization that manages the regional power grid might be in for a stress-free season. However, ISO realizes that it’s only one severe cold snap away from a crisis situation, like the one that occurred last winter. The arctic air that blanketed the region couldn’t have occurred at a more inopportune time — during the Christmas and New Year’s holidays — when electricity consumption registers above normal usage. During that period, due to the region’s insufficient natural gas pipeline infrastructure, gas, also used to fuel power plants, had to be diverted to provide heat for homes. That forced the power plants to resort to oil and coal. The lack of natural gas supplies forced New England power providers to use twice the yearly average amount of oil in just weeks — 2 million barrels. In fact, ISO indicated that during this cold spell it was just one power supply disruption away from instituting rolling blackouts.
Analysis: Winter temps to lift New England gas demand, prices — An early winter chill in the US Northeast will see temperatures in Boston and New York approach freezing by later this week, potentially lifting gas demand and prices to their highest since last April. According to a US National Weather Service forecast, conditions should reach their coldest from Thursday to Friday, before more seasonal autumn-like temperatures return by next weekend. Although short-lived, the cold spell is expected to lift residential-commercial gas demand in the Northeast to over 12.7 Bcf/d, or its highest since early spring, according to S&P Global Platts Analytics. Including a modest uptick in gas demand from the region's power generators, total Northeast consumption is forecast to hit 22.1 Bcf/d, potentially lifting gas prices at market-area hubs. In Monday trading, the cash market at Boston's Algonquin city-gates was unchanged from Friday's settlement at $3.33/MMBtu. At New York's Transco Zone 6, prices were up about 11 cents/MMBtu to $3.22/MMBtu, according to preliminary settlement data from Intercontinental Exchange. Last winter, Northeast demand levels significantly above 20 Bcf/d were typically correlated with prices above $4/MMBtu at Algonquin, suggesting that the hub could see upward pressure by mid-week. At Transco Zone 6, the regional demand threshold for $4/MMBtu gas was significantly higher -- closer to about 30 Bcf/d. Following the recent increase in Zone 6 gas supply on Transcontinental Gas Pipe Line, though, that threshold is likely to move higher this winter compared to last. The recent startup of Transco's 1.7 Bcf/d Atlantic Sunrise expansion has significantly boosted gas supply in the Zone 6 market area, thanks to a disproportionate expansion in capacity down the pipe's mainline. In the 10 days immediately following its startup, Platts Analytics estimated that the gas balance in Zone 6, which includes delivery points north of the Maryland-Virginia border, grew by an average 700 MMcf/d compared with 30 days prior. While that surplus has since declined by about 150 MMcf/d, the expansion is likely to have an enduring impact on prices in Zone 6 this winter, mostly notably at Transco's non-New York hub. The longer-term increase in Zone 6 supply comes as a consequence of the Atlantic Sunrise project's design. At the terminus of the greenfield pipeline, modifications to Transco's mainline allow 1.2 Bcf/d from the project to flow southbound, with 850 MMcf/d of that volume contracted to station 85 in Alabama and another 350 MMcf/d contracted to the Cove Point Pipeline in Maryland. But with a total capacity of 1.7 Bcf/d, the project now leaves an incremental volume of up to 500 MMcf/d in the Zone 6 market area, which is likely to keep prices there lower this winter.
New Deadline For Merrimack Valley Gas Restoration Is Now December 2-16 – Columbia Gas will miss the November 19 deadline for complete gas restoration in the Merrimack Valley, Governor Charlie Baker said Friday. The new deadline has been set for sometime between December 2 and December 16. At a news conference in Lawrence, Baker said 1,400 more people will be brought in to move the gas restoration along. Those jobs will included plumbers, electricians and contractors. Joe Albanese, who has been in charge of the restoration project, said the main pipeline repair is two-and-a-half weeks ahead of schedule, but the “house ready repairs” process is taking longer than expected, so they will not make the original Nov. 19 deadline. As a result, it’s been moved past Thanksgiving into the first half of December, although Albanese predicted that most impacted residents will have heat and hot water before then. “As the temperatures drop, we recognize there’s an incredible sense of urgency to get people back in their homes with heat and hot water as soon as possible. We are racing against the winter,” Albanese said. Columbia Gas is saying all 45 miles of gas pipeline will be replaced by next week. The problem is relighting all the customers, house to house. So Columbia Gas is employing what it is calling a “rapid relight strategy,” making temporary repairs to boilers and houses that are gas ready, to get the heat and hot water going. Restoration crews then plan to come back after the winter to replace those appliances as they have pledged. To do this, they’re tripling the personnel to get the work done.
Gas storage inventories are near historic lows. What if this winter turns frigid? - U.S. natural gas supply continues to set all-time records, and strong production growth is expected to continue. Most of these supply gains will come from the Northeast, where another round of pipeline capacity additions are being completed. But despite all this incremental gas output, a combination of cold weather last winter and hot weather this summer means that U.S. gas storage inventories are likely to end the fall season at their lowest levels since 2005. And even this comparison understates how low inventories are — gas consumption has grown dramatically in the past 10 years, and storage inventories are at all-time lows when considered in terms of the number of days of average consumption. Today, we begin a series on the implications of historically low gas storage inventories, including what the gas market might look like if this winter turns out to be colder than normal. Thirteen years is a lifetime in energy markets — and especially the last 13 years in the U.S. But U.S. gas storage inventories are going to enter the winter at their lowest levels since 2005. During this period, the national expectations for long-term domestic gas production flipped from one of gradual decline to one of everlasting abundance. With the supply situation so night-and-day, how do you go about comparing the significance of unusually low gas storage inventories in 2018 and 2005? The fall hurricane season is as good a barometer as any for understanding how the gas market has changed in the intervening years. In last week’s LNG Voyager, we discussed the impact of Hurricane Michael on offshore gas production in the Gulf of Mexico: the Category 4 storm took about 10% of offshore production out of the market, equivalent to a few hundred million cubic feet per day. Back in 2005, though, hurricanes Katrina and Rita — each a weaker storm than Michael — combined to reduce federal Offshore Gulf of Mexico production from an average of 10.2 Bcf/d in the April-July period in 2005, to just 4.3 Bcf/d for October of that year. So it’s hardly a surprise that post-Katrina/Rita prices skyrocketed to more than $10/MMBtu and late-summer storage injections slowed to a crawl. This fall’s low storage inventories (blue line), though, aren’t catching anybody by surprise. Sure, summer weather meant more gas was used in domestic power generation than would have been the case if temperatures had been normal. But all summer long, weather-normalized injections were lagging the five-year average, despite coming into injection season with low inventory levels after a cold winter. And our latest NATGAS Billboard points to an end-of-October inventory level of just 3,187 Bcf. If we restrict our time horizon to just the past 10 years — the Shale Era — this inventory is the lowest by a remarkable 400 Bcf.
After tax changes, shippers pick apart some pipeline filings at FERC— The first batch of interstate natural gas pipeline filings to comply with the US Federal Energy Regulatory Commission's altered tax policies is also attracting an early round of protests from shippers who say returns would still be too high. The shippers want FERC to begin Natural Gas Act Section 5 probes to rein in rates for some of the pipelines. FERC in July issued a final rule that could have a major effect on pipeline rates for years to come. It set out steps for carrying out both corporate income tax cuts enacted in 2017 and a more restrictive policy on tax allowances for master limited partnerships. Protests and motions to intervene are flowing in now -- after a first set of 20 pipeline companies earlier this month were required to submit Form 501-G, a one-time informational filing meant to help FERC decide whether rates are unjust and unreasonable in light of the tax changes. The Process Gas Consumers Group and American Forest and Paper Association objected to Algonquin Gas Transmission's October 11 filing (RP19-57) showing a 15.4% rate of return on equity. The customers offered a "corrected" form that would put the ROE at 21.1% instead, and asked FERC for a Section 5 probe into the justness and reasonableness of the existing rates. Among other things, they contended Algonquin improperly eliminated a regulatory liability related to excess accumulated deferred income taxes (ADIT) which if not eliminated would have increased the ROE. New Jersey Natural Gas similarly argued that FERC should compel Algonquin through a rate probe to pass along substantial rate savings to customers. El Paso Natural Gas' filing also drew a protest from the PGCG/AFGA group. A coalition of industrial and commercial gas end users who are customers of Northern Natural Gas asked FERC to toss that company's finding that a rate adjustment is not needed. The customers contended the filing was missing capital structure information, and argued the proposal to use excess ADIT to fund capital improvements would deprive shippers of benefits of the tax cuts and contravene FERC policy. Shippers calling themselves the Tennessee Customer Group also said a filing by Bear Creek Storage (RP19-51) showed that company was "substantially over-recovering its costs" and in need of a Section 5 rate probe. NJR Energy Services said "it is vital that the commission press forward quickly," because of FERC's limited refund authority.
Key Permit for Mountain Valley Pipeline Suspended – — Late Friday, at the request of a coalition of clean water advocates including the Sierra Club and Appalachian Mountain Advocates, the Pittsburgh District of the Army Corps of Engineers suspended a third permit that the fracked gas Mountain Valley Pipeline (MVP) must have in order to build through waterways in Wetzel and Harrison Counties in West Virginia. This action follows MVP’s loss of a stream crossing permit in southern West Virginia in a federal court decision, and the Army Corps’ suspension of MVP’s Virginia stream crossing permit. MVP is required to have Nationwide Permit 12 authorizations from three Army Corps of Engineer districts in order to continue construction; it now has zero. As a result, MVP is now prohibited from any construction in any stream or wetland in its path.The clean water advocates who brought this challenge are now calling on Federal Energy Regulatory Commission (FERC) to halt all work on the pipeline, as FERC’s order approving the project requires that all permits be in place for construction to take place anywhere along its 303-mile route. The action is the result of an October 11, 2018 request to the Corps by attorneys from Appalachian Mountain Advocates on behalf of the Sierra Club, West Virginia Rivers Coalition, West Virginia Highlands Conservancy, Indian Creek Watershed Association, New River Conservancy, Appalachian Voices, and Chesapeake Climate Action Network. In response, Sierra Club Beyond Dirty Fuels Campaign Representative Joan Walker released the following statement: “No matter the area, there is no way to build fracked gas pipelines that doesn’t endanger or water, our communities, or our climate. We’re pleased to see today’s suspension, and demand that FERC immediately halt all construction on the dirty and dangerous Mountain Valley Pipeline. We cannot allow corporate polluters to lock us in to decades more of fossil fuels when clean, renewable energy is available and ready to use now.”
Mountain Valley Pipeline loses another water-crossing permit - Federal regulators have pulled another permit for the Mountain Valley Pipeline construction project, which now lacks authority to build through streams and wetlands along the project’s entire 303-mile route. The U.S. Army Corps of Engineers suspended its authorization of water body crossings for the first 32 miles of the natural gas pipeline, starting where it originates in Wetzel County, West Virginia. In a letter Friday to Mountain Valley officials, Jon Coleman of the Corps’ regulatory division in Pittsburgh cited an Oct. 2 federal appeals court decision that vacates a similar permit issued by a different division for the rest of the pipeline’s route through West Virginia. A third such approval, which covers more than 500 streams and wetlands in Southwest Virginia, was suspended earlier for the same reason. Pipeline opponents pointed to the most recent suspension in calling anew for the Federal Energy Regulatory Commission to order a stop to all other work on the pipeline, which continues at a brisk pace on land between the streams. “Frankly, it is astounding that the Commission has not yet issued a stop work order in response to Mountain Valley’s loss of its Clean Water Act authorizations,” attorneys Ben Luckett and Derek Teaney of Appalachian Mountain Advocates wrote Monday in a letter to FERC. FERC’s approval for the massive pipeline a year ago was conditioned on Mountain Valley having all of its required permits from other federal agencies, including the Army Corps, the attorneys wrote. The 4th U.S. Circuit Court of Appeals “has stated that a natural gas company violates its FERC certificate when it continues construction in the absence of all federal approvals,” the letter states. FERC spokeswoman Tamara Young-Allen said Tuesday that the agency is considering requests for a stop-work order made by Appalachian Mountain Advocates and several other organizations and individuals. She declined to elaborate.
Following Permit Suspension, Mountain Valley Pipeline Barred from All Water Crossings - A major natural gas pipeline under construction in West Virginia and Virginia cannot continue construction under streams, rivers and wetlands across its entire 303-mile route, following the decision late last week by a federal agency.In a letter sent Friday, the U.S. Army Corps of Engineers' Pittsburgh District told Mountain Valley Pipeline officials they were suspending the project's water crossings permit, also known as the Nationwide Permit 12, for Wetzel and Harrison counties. The decision marks the third suspension or invalidation of the project's water crossings permits. Earlier this month, a federal court threw out the Mountain Valley Pipeline’s water crossings permit issued by the Army Corps of Engineers’ Huntington District, which covered pipeline construction through much of West Virginia.Three days later, the Army Corps’ Norfolk District in Virginia suspended all water crossings there."Friday’s suspension makes clear yet again that the permits hastily given to the fracked-gas Mountain Valley Pipeline don’t stand up to scrutiny," said Anne Havemann, general counsel at Chesapeake Climate Action Network, in a statement. "Key permits for the Mountain Valley Pipeline have been thrown out again and again, confirming that this pipeline — and the similarly destructive Atlantic Coast Pipeline — is too dangerous to ever be built."A coalition of environmental groups that oppose the pipeline have asked federal regulators at the Federal Energy Regulatory Commission to issue a full stop-work order for all pipeline construction. They argue the invalidation of the Army Corps' water crossings permit means the project lacks full approvals and should be temporarily stopped.Mountain Valley Pipeline spokeswoman Natalie Cox said in a statement the project expects to receive a new or resissued water crossings permit in early 2019. After that happens, she said the pipeline expects the two suspended permits in West Virginia and Virginia to be reinstated.Until then, Cox said the pipeline will continue other construction and does not expect the lack of water crossings to affect the pipeline's projected in-service date of late 2019. The Army Corps estimates the Mountain Valley Pipeline will be constructed under streams, rivers or wetlands 1,146 times, inclduing 59 stream crossings and 62 wetland crossings in Wetzel and Harrison counties.
Atlantic Coast Pipeline receives key approval from VA agency - — Dominion Energy’s Atlantic Coast Pipeline received a key regulatory approval from a Virginia agency Friday.The Virginia Department of Environmental Quality approved the pipeline’s erosion and sediment control plans and stormwater management plan, according to ACP spokesman Aaron Ruby.The approval was the project’s final one needed in Virginia, and Dominion has requested a notice to proceed with full construction in Virginia from the Federal Energy Regulatory Commission, Ruby said.The pipeline will cross more than 600 miles between Harrison County and Greensville County, Virginia, to transport natural gas produced in West Virginia to energy users in Virginia and North Carolina.The agency’s process was the most sweeping and rigorous regulatory review of any energy infrastructure project in Virginia history, according to Ruby. “The agency spent more than a year reviewing site-specific environmental controls for every inch of the pipeline’s path in Virginia,” he said. “No other project in the state’s history has received as much regulatory scrutiny or been developed with greater attention to public safety and the environment. We’ve put in place some of the strongest environmental protections ever used by the industry to keep soil and sediment out of our streams and rivers during construction. These protections have proven effective in West Virginia and North Carolina, where construction has been underway for several months.”
Virginia regulators grant key approvals to Atlantic Coast pipeline, clearing the way for construction— Virginia regulators say they have cleared the controversial Atlantic Coast Pipeline to begin construction on its 300-mile track across the state with the approval of three crucial environmental protection plans. The state Department of Environmental Quality said late Friday that it had signed off on plans to control erosion and sediment, manage water runoff from storms and limit damage to the fragile “karst” geography of certain mountainous areas as blasting and digging for the natural gas pipeline gets underway. Dominion Energy, which is leading a consortium of companies in building the $6 billion project, said that it will now seek final approval from the Federal Energy Regulatory Commission to get work started. The Atlantic Coast Pipeline will run about 600 miles from West Virginia, into Virginia’s Highland County, across the Shenandoah region and through central Virginia into North Carolina. Construction has already begun in the other two states, and some tree-cutting took place in Virginia early this year.But the state DEQ had held up on final approval of the key environmental-protection plans as regulators wrestled with the unusual demands of a gigantic, 42-inch-diameter pipeline that would run through steep terrain and make thousands of waterway crossings.Another major project, the Mountain Valley Pipeline, got similar approval a year ago and is further along in construction. That project, which is being built by a consortium led by EQT Midstream Partners of Pittsburgh, follows a 300-mile route from West Virginia through the far southwest of Virginia and into North Carolina.Environmentalists vehemently oppose both projects, as do many landowners whose property is being taken against their wishes through eminent domain. Several legal challenges have led federal judges to delay the projects at various points this year.
Some West Virginia work OK'd for Dominion's Atlantic Coast pipeline - Dominion Energy's request to proceed with construction in parts of West Virginia on the Atlantic Coast natural gas pipeline is approved by the Federal Energy Regulatory Commission.But FERC says the authorization does not include construction on National Forest Service lands, which is the subject of a legal dispute, or in some areas where the endangered Indiana Bat lives; the company would need to obtain confirmation from the U.S. Fish and Wildlife Service that its activities would not harm the bats’ habitat. Atlantic Coast is a partnership between units of operator Dominion, Duke Energy and Southern Co. Earlier: Atlantic Coast pipeline construction gets OK from final state (Oct. 22)
ACP & MVP Pipelines are Struggling Forward in Virginia - The Virginia Department of Environmental Quality has cleared the way for Dominion Energy’s 600-mile, deeply divisive Atlantic Coast Pipeline to begin construction here in Virginia. The agency has signed off on plans for how workers will manage erosion, sediment and stormwater along the route, which will cross hundreds of waterways and some of Virginia’s steepest terrain, the final approval the project needs before beginning to blast, trench and lay the pipe. The Federal Energy Regulatory Commission will issue the actual go-ahead for this work to start. The DEQ announced the decision just after 5 p.m. Friday. The approval came with a report to the State Water Control Board, a condition of the water quality certification the board issued for the project in December under section 401 of the federal Clean Water Act. “DEQ’s erosion sediment and stormwater regulations, and our extensive 401 certification gives the agency several enforcement tools to protect water quality and ensure compliance with Virginia’s rigorous requirements,” said DEQ Director David Paylor. “Our engineers and staff spent 15 months reviewing ACP’s site plans to further ensure water quality protections were accurately incorporated.” The Virginia League of Conservation Voters wasn’t impressed, saying there’s little reason to think the failures to contain mud and stormwater that have plagued the separate Mountain Valley Pipeline, which is being built in Virginia now, won’t befall the ACP, though on a much wider scale because of its bigger footprint here. “The certification comes even as evidence mounts in Southwest Virginia that state regulations did little to keep communities safe from the Mountain Valley Pipeline, which has clogged some of our state’s cleanest waters with mud and sediment as crews trenched across steep, rugged, flashflood-prone terrain,” the group said. Two sitting FERC commissioners have said the massive gas project, which relies on subsidiaries of the companies building it to justify the need for the gas and comes with a 14 percent rate of return for the developers, isn’t in the public interest. “We simply don’t need hundreds of miles of costly and environmentally destructive gas infrastructure to keep the lights on in Virginia, but sadly, this approval is a step toward marrying Virginia to a future of higher energy costs and volatile fossil fuels for years to come while Dominion Energy profits handsomely at our expense,” Francis said.
The con at the heart of the Atlantic Coast Pipeline - It can’t be said enough, and it’s something that’s easy to lose sight of amid the labyrinthine legal and permitting debates around the Atlantic Coast Pipeline, which could be getting federal approval to start full construction in Virginia any minute now. The need for Dominion Energy’s 600-mile Atlantic Coast Pipeline is far from proven — certainly not in Virginia — despite the propaganda piece extolling the virtues of the project that company CEO, president and CEO Thomas Farrell got published Sunday in the Richmond Times-Dispatch. Your case should be ironclad before a federal agency gives your company the authority to blast, trench and tunnel your way across 600 miles in three states, trampling on private property rights, national forests and parks, sensitive habitats and waterways and through aquifers remote communities rely on for drinking water. In fact, the preponderance of evidence points to Dominion being well on its way to foisting a massive con on its 2.5 million ratepayers here, as opponents of the pipeline have warned all along. Another newspaper editorial page, The Virginian-Pilot, also recently parroted the company line on the project, that the hundreds of landowners and communities along its 600-mile path are the unfortunate eggs that must be broken to cook a reliable, affordable energy omelet for the rest of us. The only way you can still believe that is if you steadfastly refuse to look behind the curtain. Dominion will point you to the voluminous work done as part of the Federal Energy Regulatory Commission’s certification process for natural gas projects, but what they won’t tell you is the agency’s review of actual public need is stunningly cursory. “The shippers on the ACP project supply gas to end users and electric generators, and those shippers have determined that natural gas will be needed and the ACP project is the preferred means of obtaining that gas.” the commission wrote in its certificate authorizing the project last year. Who are those shippers? They’re almost all subsidiaries of the energy companies developing the project, which comes with a 14 percent rate of return they’ll try to recoup from their ratepayers.
Editorial: Pipeline giant wisely drops dangerous refit plan - Morehead News -- We’re glad that Kinder Morgan decided to abandon a pipeline project that would have endangered tens of thousands of residents in Kentucky – including Rowan County – and five other states from Texas to Ohio. The news was celebrated by environmental activists, state and local governments and individual property owners who have battled the company’s proposal to push hazardous gas liquids through a 75-year-old natural gas pipeline. In Kentucky, the pipeline extends 254 miles, including 20.4 miles across Rowan County, 19.6 miles in Greenup County and 12.4 miles in Carter County. But the company still wants to continue using the pipeline for fracked natural gas by reversing the flow from north to south. Kinder Morgan's line, the Utica Marcellus Texas Pipeline, has been carrying natural gas from the Gulf Coast to gas-rich Ohio since 1943. Pipeline safety experts claim natural gas liquids are more dangerous than natural gas itself because they carry explosion and asphyxiation risks, and can pollute ground or surface water. The liquids include propane and butane and other highly toxic byproducts. In a surprising report to investors last week, Kinder Morgan said it had not found any customers to buy the liquids on the Gulf Coast. Instead, Kinder Morgan’s now wants to use the old pipeline to ship natural gas from Appalachia to new customers like Mexico. We don’t know for sure what motivated Kinder Morgan to change its plans but it was great decision for those living near that pipeline. And lots of anxious folks will be watching for what happens next.
Enbridge and Michigan's long-awaited deal on Line 5. - For 65 years, Enbridge’s Line 5 has been a critically important conduit for moving Western Canadian and Bakken crude oil and NGLs east across Michigan’s upper and lower peninsulas and into Ontario, where the now-540-Mb/d pipeline feeds Sarnia refineries and petrochemical plants. Some crude from Line 5 also can flow east from Sarnia to Montreal refineries on Line 9. But Enbridge has been under increasing pressure to shut down Line 5 over concern that a rupture under the Straits of Mackinac might cause major environmental damage. At long last, the state of Michigan and Enbridge have reached an agreement to replace the section of Line 5 under the straits by the mid-2020s, and to take steps in the interim to enhance the existing pipeline’s safety. In today’s blog, we consider the significance of the Enbridge pipeline and of the newly reached accord. Enbridge’s Line 5 (purple line in Figure 1) is a 645-mile pipeline that is part of the company’s much larger Canadian Mainline and Lakehead systems. Line 5 originates at the company’s terminal in Superior, WI, and runs east/southeast through Michigan to Sarnia, ON. The Superior terminal is the end point for five elements of the Mainline/Lakehead systems — Line 1, Line 3 and Line 4 from Edmonton, AB; Line 67 from Hardisty, AB; and Line 2B from Cromer, MB — and has the capacity to handle 2.8 MMb/d of incoming and outgoing liquid hydrocarbons (most of them light, medium or heavy crudes). Line 5 is one of five pipelines out of Superior; it transports “batches” of either light crude, light synthetic crude or NGLs that are sourced primarily in Western Canada (and also in the Bakken) and bound for either Michigan, Sarnia or Montreal (see Refined, Piped, Delivered – They’re Yours for an explanation of how batching works.) At the Straits of Mackinac (dashed red oval) — the four-mile-wide water passage between Michigan’s upper and lower peninsulas (and Lake Michigan and Lake Superior) — the 30-inch-diameter, single-pipe Line 5 splits into two 20-inch-diameter, parallel pipes that are anchored along the strait’s lakebed.
An oil spill you've never heard of could become one of the biggest environmental disasters in the US - In 2010, the Deepwater Horizon oil tragedy commanded the nation's attention for months. Eleven lives were lost and communities around the Gulf of Mexico ground to a halt under hundreds of millions of gallons of oil. Yet, lurking underneath the fresh disaster, an older spill was spewing ever faithfully forth: A leak that began when another oil platform was damaged six years earlier. The Taylor oil spill is still surging after all this time; dumping what's believed to be tens of thousands of gallons into the Gulf per day since 2004. By some estimates, the chronic leak could soon be larger, cumulatively, than the Deepwater disaster, which dumped up to 176.4 million gallons (or 4.2 million barrels) of oil into the Gulf. That would also make the Taylor spill one of the largest offshore environmental disasters in US history. In September, the Department of Justice submitted an independent study into the nature and volume of the spill that claims previous evaluations of the damage, submitted by the platform's owner Taylor Energy Co. and compiled by the Coast Guard, significantly underestimated the amount of oil being let loose. According to the filing, the Taylor spill is spewing anywhere from 10,000 to 30,000 gallons of oil a day. As for how much oil has been leaked since the beginning of the spill, it's hard to say. An estimate from SkyTruth, a satellite watchdog organization, put the total at 855,000 to 4 million gallons by the end of 2017. If you do the math from the DOJ's filing, the number comes out astronomically higher: More than 153 million gallons over 14 years. Dr. Oscar Garcia-Pineda, who authored the DOJ's commissioned analysis, declined to comment to CNN, citing ongoing litigation.
A 14-year-long oil spill in the Gulf of Mexico verges on becoming the worst in US history - — An oil spill that has been quietly leaking millions of barrels into the Gulf of Mexico has gone unplugged for so long that it now verges on becoming one of the worst offshore disasters in U.S. history. Between 300 and 700 barrels of oil per day have been spewing from a site 12 miles off the Louisiana coast since 2004, when an oil-production platform owned by Taylor Energy sank in a mudslide triggered by Hurricane Ivan. Many of the wells have not been capped, and federal officials estimate that the spill could continue through this century. With no fix in sight, the Taylor offshore spill is threatening to overtake BP’s Deepwater Horizon disaster as the largest ever.As oil continues to spoil the Gulf, the Trump administration is proposing the largest expansion of leases for the oil and gas industry, with the potential to open nearly the entire outer continental shelf to offshore drilling. That includes the Atlantic coast, where drilling hasn’t happened in more than a half century and where hurricanes hit with double the regularity of the Gulf.Expansion plans come despite fears that the offshore oil industry is poorly regulated and that the planet needs to decrease fossil fuels to combat climate change, as well as the knowledge that 14 years after Ivan took down Taylor’s platform, the broken wells are releasing so much oil that researchers needed respirators to study the damage. The Taylor Energy spill is largely unknown outside Louisiana because of the company’s effort to keep it secret in the hopes of protecting its reputation and proprietary information about its operations, according to a lawsuit that eventually forced the company to reveal its cleanup plan. The spill was hidden for six years before environmental watchdog groups stumbled on oil slicks while monitoring the BP Deepwater Horizon disaster a few miles north of the Taylor site in 2010.
Frackers Bet on New Terminals to Boost Oil Exports – WSJ - As pipeline bottlenecks crimp the U.S. shale boom, some companies are racing to address the next potential constraint on American oil output: the terminals to export crude to foreign markets. Oil exports have been a key release valve for U.S. producers in the three years since Congress lifted a longtime ban on overseas crude sales. Exports topped 2.1 million barrels daily in September and are projected to approach four million barrels within two years, according to S&P Global Platts Analytics. .Yet a surge of crude from prolific West Texas wells, which has already pushed regional pipeline networks to capacity and made it more expensive for some companies to move their oil to market, could next challenge port infrastructure. Existing U.S. shipping terminals are already ill-equipped to handle the growing load, because only one can fully accommodate the giant tankers used to ship oil to Asia and Europe. That has at least four companies, including commodities trader Trafigura Group Pte. Ltd. and pipeline builder Enterprise Products Partners L.P., planning new or expanded terminals to load up the big ships. “You need more efficient ways of loading oil out of the Gulf Coast,” said Kevin Jebbitt, head of crude oil trading for Trafigura, which has requested permits to build a deepwater port near Corpus Christi, Texas. The terminals can cost more than a billion dollars to build, and some experts believe there won’t be sufficient long-term demand for all of the facilities being proposed. So companies interested in constructing these terminals are racing to complete their projects quickly to ensure success. The Permian basin of West Texas and New Mexico has been the primary engine behind soaring U.S. crude production, which recently topped 11 million barrels daily. Inadequate pipeline capacity has reduced prices of oil in the area and forced some companies to curtail drilling. Crude in Midland sold for $23 a barrel below the Houston price in August, reflecting the added costs companies have to shoulder to move crude to market without pipelines, though that differential has since contracted to about $10, according to S&P Global Platts Analytics. The firm estimates that by the end of this year, Permian drillers will be producing about 400,000 barrels of oil a day less than they would have without pipeline constraints.
Crews working to clean up oil spill in McClain County - Officials have responded to an oil spill in McClain County late Sunday afternoon. According to McClain County Emergency Management, the spill is near Turkey Creek, just south of 180th between Sooner Ave. and Ladd Ave. Officials say a storage tank leaked out 150 barrels of oil along the creek and some oil leaked into the water. The Oklahoma Corporation Commission is on scene as crews clean up.
In Colorado, a Bitter Battle Over Oil, Gas and the Environment Comes to a Head – NYT — On stage at the Adams County fairgrounds, the M.C. wore cowgirl boots and a pink T-shirt that read “Mothers in Love With Fracking.” In the audience, more than a thousand oil and gas workers looked on as local leaders issued dire warnings about the effects of a Colorado ballot measure that, if passed, could drastically reduce oil and gas drilling in the state.Thousands of jobs: gone. Millions of dollars: lost. Conservative families: driven out.“The wolves are at the front door,” insisted one speaker.After years of bitter fights over oil and gas development, Colorado voters have managed to get a statewide anti-fracking measure on the November ballot. The initiative is unprecedented in its scope — potentially barring new wells on 95 percent of land in top-producing counties — and industry executives are watching with concern, fearful that it could encourage similar measures across the nation.So far, only New York, Maryland and Vermont have banned fracking altogether. But none of those states have anything close to the reserves of Colorado, which is among the top six states in both oil and gas production.Not surprisingly, the initiative has deepened political fissures in a purple state whose economy counts on oil, but whose lifestyle hinges on access to pristine wilderness. As Colorado’s population has climbed, driven by the cost of living, a growing technology sector and the appeal of the outdoors, the state’s new and old industries have collided. At the same time, environmentally-oriented companies like Patagonia are pressing to become bigger political players in the region, often putting them at odds with the oil and gas lobby. If passed, the measure — Proposition 112 — would require companies to place new wells at least 2,500 feet from homes, schools, waterways and other areas designated as “vulnerable,” two-and-a-half to five times the current state regulation. Even as the measure faces fierce resistance, industry leaders and environmentalists alike acknowledge that it could succeed. One recent industry poll obtained by The New York Times showed 43 percent of voters in favor, with 41 percent opposed.
Study finds Proposition 112 passing could eliminate access to 58% of Colorado's subsurface minerals — If passed, Colorado's Proposition 112 ballot initiative might not completely destroy the oil and natural gas industry in the state as producers could employ longer laterals to reach molecules while still complying with increased setback rules, according to a study released by the Colorado School of Mines. Proposition 112, which will appear on the November 6 ballot, would increase new oil and gas drilling setbacks from 500 feet to 2,500 feet from occupied structures, parks and waterways. It would eliminate 85% of all non-federal surface land from use for drilling, according to separate analysis by the Colorado Oil and Gas Conservation Commission. But Peter Maniloff, a professor at the Colorado School of Mines, determined more than 15% of subsurface minerals could be reached through modern drilling techniques. "With the recent advent of horizontal drilling, some subsurface resources beneath the 2,500 foot buffer may be reachable from within the 15% available surface area," he said. "I calculated what area of the subsurface is within 1 mile of a surface location, which would remain accessible under Prop 112. That is, how much of the subsurface would be available, assuming that firms could drill horizontally for 1 mile from any accessible surface location. I find that 42% of the non-federal subsurface would be accessible, or nearly three times the available surface area." However, he noted that restricting oil and gas operations to such a small portion of surface space would "impose substantial operational difficulties." This includes limiting the placement of wellbores in order to achieve the highest production rates as well as the difficulty of adding new surface infrastructure, such as roads. Also, Maniloff's analysis did not consider the varying quality of rock. Most of the core areas of the Denver-Julesburg Basin are located in densely populated areas along Colorado's Front Range, which would become basically inaccessible under Proposition 112. Research by S&P Global Platts Analytics finds Proposition 112 would curtail gas production by 45% and oil production by 54% within five years. It would render 78% of Weld County, Colorado's surface land off-limits to new oil and gas development. The county currently accounts for more than 95% of all Denver-Julesburg Basin production. Since Colorado's approved drilling permits are valid for two years, the analysis assumes drilling will continue as is for the next two years and 2021 would start to show the impact as 78% of the surface land would be off limits due to the setback restriction. The number of new wells drilled in the Denver-Julesburg Basin would be reduced by 78% starting in 2021, and oil production would decrease by 54% to 275,000 b/d by the end of 2023, according to Platts Analytics. Applying the same analysis to gas, if the number of new wells drilled is reduced by 78%, the impact on production would be a decrease of 45% to 1.9 Bcf/d by the end of 2023.
Taxpayers could have to pay for oil and gas made inaccessible by Prop 112 - Complete Colorado - One of the issues surrounding Proposition 112, the ballot measure to increase the setback for oil and gas drilling to 2,500 feet, is the potential that Colorado taxpayers could be on the hook for billions of dollars worth of claims that the state has unconstitutionally taken away the property rights of mineral owners and lessees.Speaking of the fiscal impact to the industry not including impacts to schools, infrastructure and tax revenues, Craig Kaiser, President of PetroValues, an oil and gas tech company that specializes in the valuation of minerals said, “We came up with a dollar amount of $470 billion dollars that will be lost. We calculated what each one of those [potential] individual wells would look like if they were taken away.” “I think it’s very clear that a mineral estate or a mineral lease is a property right that is capable of being taken under the Colorado or U.S. Constitutions, so I think to the extent that Prop 112 deprives a mineral estate owner or a lessee of its right to access minerals, then yes, I think that could constitute a taking,” said oil and gas attorney Wayne F. Forman of the law firm Brownstein Hyatt Farber Schreck. University of Denver Associate Professor of Law Kevin Lynch disagrees, saying, “The industry, although they claim otherwise, have never put this issue to the test and in fact they have taken a lot of actions such as supporting Amendment 74 and supporting a number of takings bills in recent years at the state legislature that would have explicitly made restrictions on oil and gas a taking, which to me indicates that under existing law they agree with me that it wouldn’t be a taking.”
White House backed drillers over EPA on plugging methane leaks - White House officials pushed the EPA to maximize savings for the oil industry despite the agency’s concern that weakening regulations would allow more methane to escape into the atmosphere, according to newly released documents.The White House pressure campaign came as the Environmental Protection Agency honed a proposal to relax Obama-era requirements governing how frequently oil companies have to check for and repair leaks of methane, an intense greenhouse gas that warms the atmosphere 84 times more than carbon dioxide. Every move to dial back required inspections and reduce industry costs triggered a corresponding climb in projected methane emissions, a jump that appeared to trouble some EPA officials, according to internal documents filed in a government docket Tuesday. The documents show EPA officials also repeatedly resisted White House pressure to dramatically decrease the frequency of required inspections at oil wells and compressor stations in the name of saving money. In one case, officials with the White House Office of Information and Regulatory Affairs argued that less-frequent inspections would provide “the highest net benefits.” But the EPA rejected that argument in May, countering that less-frequent inspections also would allow more methane to escape. The behind-the-scenes debate, revealed in hundreds of pages of correspondence, analysis and drafts from a White House-led review of the plan, offers a rare look at how the Trump administration is pursuing a deregulatory agenda it says is saving the U.S. $1.6 billion annually. First the Trump administration overstates the costs to industry of environmental safeguards, then it ignores the costs to society of dismantling them, Hayes said. The result is “one-sided,” with claims of deregulatory cost savings from not requiring industry to protect human health and the environment -- while ignoring the cost to everybody else. The entire process was driven by an attempt to maximize corporate profits at the expense of public health and the environment.”
Pemex awards tender for 1.4mn bl of Bakken (Argus) — Mexico's state-owned Pemex has awarded a tender to import four 350,000 bl cargoes of US Bakken light crude, the first such crude import in around a decade. The cargoes will be delivered in November and will mainly serve the Salina Cruz refinery in Oaxaca state, Pemex said today. Traditionally a crude exporter, Pemex announced earlier this year that its downstream company, Pemex Transformacion Industrial, would start importing up to 100,000 b/d of light crude in an effort to boost flagging refining rates at its six refineries, particularly at its Salina Cruz refinery. Refining rates have declined in recent years due to aging infrastructure, accidents and declining domestic crude production. Refineries have run at below 50pc capacity on average in 2018. Pemex produced 1.82mn b/d of crude in August, down by 1.2pc from July and down by 6pc from August last year, according to the latest information from Pemex. This is Pemex's second attempt this month to tender crude imports, following a failed tender launched on 1 October for a 350,000 bl cargo of US Light Louisiana Sweet crude. The tender did not attract any bids due to "pricing issues," Pemex chief executive Carlos Trevino said at a press conference earlier this month. Pemex will reveal the name of the tender winner once contracts have been signed, it said. Incoming president Andres Manuel Lopez Obrador has pledged to re-boot Mexico's refinery system with a $2.5bn investment in maintenance of existing refineries as well as an $8bn new refinery project.
Dakota Access expansion takes step forward - A potential expansion of the Dakota Access Pipeline took a step forward Friday.Energy Transfer Partners announced it is seeking commitments from shippers to transport more Bakken crude to the Gulf Coast.The proposed expansion would increase the pipeline’s capacity to 570,000 barrels per day, said company spokeswoman Vicki Granado.Energy Transfer Partners CEO Kelcy Warren discussed the possibility of an expansion in August during a roundtable discussion in Bismarck with U.S. Energy Secretary Rick Perry. At that time, the pipeline was transporting about 500,000 barrels per day, according to the company.Granado said the expansion would require “minimal asset modifications” within the existing pipeline right-of-way. Justin Kringstad, director of the North Dakota Pipeline Authority, said companies can increase the capacity of a pipeline by adding a chemical to the oil that makes it flow easier in the pipeline system. Another option is to add additional horsepower or pumping stations, Kringstad said. Dakota Access connects with the Energy Transfer Crude Oil Pipeline, which transports oil from Illinois to Nederland, Texas.
The Lessons We Didn’t Learn From the Largest Gas Leak in U.S. History - Almost 15,000 residents of Los Angeles' Porter Ranch neighborhood evacuated their homes in the fall of 2015, many of them suffering from headaches, breathing problems and nosebleeds. The culprit: a massive leak of carcinogenic chemicals at SoCalGas's nearby Aliso Canyon underground gas storage facility. From October 2015 until February 2016, the facility expelled more than 100,000 metric tons of methane into the atmosphere.Three years later, community residents continue to suffer severe health effects. In a lawsuit filed on Oct. 15, Los Angeles firefighters who responded to the leak stated that they also continue to experience "nosebleeds, migraine headaches, dizziness, skin rashes, sleeping difficulties, and breathing difficulties. Some now battle cancer."And yet, agencies and underground gas storage operators continue to show a shocking lack of initiative to regulate and share information about the toxic pollutants in stored gas. No regulatory agency has tried to force operators to reveal the gas' chemical composition. Without this information, scientists cannot determine the leak's risks to human health. "The public health department consistently delivered messages to the community that are misleading," one Porter Ranch resident told the Los Angeles Daily News this week. "They showed no justice and had unexplained delays and inactions." This problem isn't limited to Aliso Canyon. California has 12 underground gas storage facilities: four in southern California, seven in northern California, and one in central California with a total capacity to store just under 400 billion cubic feet of gas. California's underground gas storage facilities are in depleted gas or oil fields. These were not originally designed for high-pressure gas storage.
Responders monitoring oil spill on Columbia River — State and federal officials are responding to an oil spill on the Columbia River between Oregon and Washington. Coast Guard officials said the oily sheen was estimated at about 3 miles long Wednesday afternoon and appeared to be dissipating since it was first reported that morning. Officials said the source of the spill was no longer actively discharging into the river and pollution responders also determined that the oil was too thin to recover. The spill was first reported near Kalama and was moving downriver. Responders with the state Department of Ecology also went out on the water to collect samples to find the spill's source. Officials said there have been no signs of animals in distress.
Arctic Oil Drilling Project Approved by Trump Administration - The Trump administration's unrelenting quest for Arctic oil and gas took a major step on Wednesday as it approved an energy company's controversial production plan.Hilcorp Alaska received the green light to build the Liberty Project, a nine-acre artificial drilling island and 5.6-mile underwater pipeline, which environmentalists warn could risk oil spills in the sensitive Beaufort Sea and threaten polar bears and Arctic communities.Once built, it will be the first oil and gas production facility in federal waters off Alaska, Interior Secretary Ryan Zinke boasted Wednesday in a press release."American energy dominance is good for the economy, the environment, and our national security," Zinke said. "Responsibly developing our resources, in Alaska especially, will allow us to use our energy diplomatically to aid our allies and check our adversaries. That makes America stronger and more influential around the globe."Environmental worries about the Liberty Project are emphasized by Hilcorp's struggle last year to fix a natural gas leak from its underwater pipeline in Alaska's Cook Inlet. For nearly four months, the ruptured pipeline released roughly 200,000 cubic feet of methane a day into the inlet. "If this company can't prevent or stop a gas leak in the Cook Inlet, it has no business in the Beaufort Sea," Miyoko Sakashita, the oceans program director at the Center for Biological Diversity, wrote last year in aMedium post.
The Trump administration just approved a plan to drill for oil in Alaska’s federal waters--it’s a major first - Interior Department officials announced their approval Wednesday of a company’s plan to drill for oil six miles off the Alaskan coast in the shallow waters of the Beaufort Sea. If the development by Hilcorp Energy moves forward, it would be the first oil and gas production facility in federal waters in Alaska, Interior Secretary Ryan Zinke said in the announcement, a major victory for the oil industry and a blow to conservation groups that fought it, fearing a possible leak in a sensitive and pristine natural environment. Zinke said the approval was a step forward for President Trump’s “American energy dominance” agenda that promotes the widespread development and production of fossil fuels such as coal and oil. “American energy dominance is good for the economy, the environment, and our national security,” Zinke said. “Responsibly developing our resources, in Alaska especially, will allow us to use our energy diplomatically to aid our allies and check our adversaries. That makes America stronger and more influential around the globe.” Contrary to Zinke’s pitch, the vast majority of scientists say the use of fossil fuels contributes to carbon pollution that fuels climate change, a driver of sea-level rise, warmer oceans and hurricanes that rely on warm water to grow in size and ferocity. Hilcorp, based in Houston, plans to build a nine-acre gravel island about 20 miles east of Prudhoe Bay, not far from the Arctic National Wildlife Refuge. The Liberty Project proposes to tap into a reservoir of oil on the state’s North Slope, containing as much as 150 million barrels. The project is expected to take two years to complete, produce up to 70,000 barrels a day at peak production about two years after it begins, with “a life expectancy of 15 to 20 years,” according to the project’s website. Hilcorp, a major player in Alaska, has had a few environmental mishaps. In December 2017, Hilcorp Alaska discovered crude oil leaking from a subsea pipeline that connected a pair of oil production platforms in the Cook Inlet. Nine months before that discovery, the Coast Guard was dispatched to investigate a Hilcorp oil leak from an abandoned well head in the Gulf of Mexico. A news release by the Coast Guard reported “an estimated 840 gallons of crude oil in the water,” according to an article in the New Orleans Times Picayune.
Why Is Canadian Crude Selling For $20? -- Oil prices in Canada plunged late last month, with the losses continuing throughout much of October. Canadian oil producers exposed to the low prices are now fetching around $40 to 50 per barrel less than their counterparts in the United States.Western Canada Select (WCS), which tracks heavy oil from Canada, typically trades at a discount relative to WTI. The lower price reflects quality issues, as well as the cost of transport from Alberta to refineries in the U.S.In early 2018, the discount started to grow significantly, the result of Canadian pipelines filled to the brim. The inability of the Canadian oil industry to build a major pipeline from Alberta to either the U.S. or the Pacific Ocean is increasingly dragging down WCS. Keystone XL, Northern Gateway, Energy East, Trans Mountain Expansion – all of these pipeline projects have run into years of delays, and in the case of Northern Gateway and Energy East, scrapped all together.That left WCS prices languishing at discounts in excess of $30 per barrel at times this year. But the problem blew up into a deeper crisis in late September. Maxed out pipelines are still a problem, but now refineries in the U.S. Midwest are in maintenance season, curtailing demand for Canadian oil. BP’s massive Whiting refinery in Indiana, Phillips’ Wood River and Marathon’s refinery in Detroit all undertook maintenance, according to CBC. WCS plunged to the low $20s per barrel, implying a discount of about $50 per barrel to WTI. The recent decline of WTI below $70 per barrel has somewhat narrowed the differential to the mid-$40s per barrel.The discounts mean that the oil industry in Alberta is losing around $100 million per day, according to GMP FirstEnergy and CBC.Wood Mackenzie told CBC that the refineries should come back online “within the next few weeks.” Producers are turning to rail to ship their product to the U.S., a much more expensive route. Oil-by-rail shipments from Canada to the U.S. hit an all-time high of 204,000 bpd in June, according to Rory Johnston of Scotiabank. By the end of the year, rail shipments could reach 300,000 bpd.
New restrictions could derail oil-by-rail shipments - The discount on Canadian crude oil hit a record last week – about US$50 per barrel – due in part to severe pipeline constraints that have forced more oil to move by rail. In July, a record 206,624 barrels per day of Canadian oil was shipped by rail to American refineries. Now, even that option could be severely crimped, thanks to accelerated Canadian railcar safety regulations and a unilateral move by the BNSF Railway (NYSE:BNI) in the U.S. that could potentially take a significant number of oil cars off the tracks. All major oil pipeline expansions in Canada and the U.S. have faced regulatory delays: the Trans Mountain pipeline expansion, the Keystone XL and Line 3. That has forced more oil to move by rail, which is more expensive and, in some cases, more hazardous than moving it via pipelines. The 2013 Lac-Mégantic explosion that killed 42 people underscored that danger, although in that case, the oil cars were carrying Bakken shale oil, which contains explosive methane gases, unlike the heavier crude that Alberta produces. To address safety concerns arising from oil shipped by rail, Transport Canada has ordered some 21,367 “unjacketed” oil cars to be retired as of November 1. That alone could decrease capacity to move oil by rail and exacerbate the already steep discount for Canadian oil. Transport Canada and U.S. regulators have accelerated the phase-out of older unjacketed railcars. They were to be phased out 17 months from now but are now scheduled for retirement November 1. These cars, which go by the model number 1232, must be replaced either with the new TC-117 or a retrofitted 1232 called the TC-117R. But following a massive derailment in Iowa in June involving some 117R cars, the BNSF Railway said it plans to restrict the use of the 117R oil cars as well. When there is a derailment, the railway operator is responsible for the damage it causes, so companies like BNSF are understandably concerned that the 117R still isn’t safe enough, based on the Iowa derailment. That derailment resulted in 160,000 gallons of oil spilling into the Little Rock River. Some of the oil cars punctured in that accident were the retrofitted 117R oil cars.
Maritime rule change stirs fears of diesel shortage- Kemp (Reuters) - The International Maritime Organization (IMO) has so far resisted pressure to soften or postpone the implementation of new regulations requiring ships to use bunker fuels with a lower sulphur content from the start of 2020. That has prompted warnings from some analysts that the regulations will squeeze the availability of low-sulphur diesel and jet kerosene required by trucks, trains, aircraft, farmers and industry, resulting in big price increases. The regulations and any associated rise in fuel prices will occur in the run up to the next U.S. presidential election so there is considerable political sensitivity around the timing and cost of the changes. But most IMO members are confident there will be enough low-sulphur fuel available to meet the needs of both the shipping industry and other users of middle distillates without an unacceptable spike in prices. From Jan. 1, 2020, ships will be required to use fuel oil containing no more than 0.5 percent sulphur, down from a maximum of 3.5 percent at present, and an actual average of around 2.5 percent. Ships operating in emission control areas in the Baltic Sea, North Sea, most of the coast of Canada and the United States, and parts of the Caribbean are already subject to a lower limit of 0.1 percent, which will not change. Reduced sulphur limits for the rest of the world were originally approved by IMO members in 2008 and the deadline was reconfirmed following a fuel availability assessment in 2016. A detailed study of the fuel market commissioned by the IMO before it confirmed the deadline examined multiple scenarios for marine fuel consumption and production at the end of the decade. The study concluded that "in all scenarios the refinery sector has the capability to supply sufficient quantities of marine fuels … to meet demand for these products while also meeting demand for non-marine fuels". Capacity increases in crude distillation as well as sulphur-removing hydrocracking and hydroprocessing would be enough to meet increased demand for low-sulphur distillates and fuel oil (“Assessment of fuel oil availability”, CE Delft, 2016).
API: US petroleum demand in September slowed from August - With seasonal slowing after the summer driving season, US petroleum demand was 20.1 million b/d in September, down 3.5% from August but up 2.4% compared with September 2017. This is according the latest monthly statistics report from the US American Petroleum Institute. Year-to-date through September, US petroleum demand remained at its strongest since 2007, averaging 20.4 million b/d. This was an increase of nearly 500,000 b/d over the same period in 2017. Total motor gasoline deliveries were 9.3 million b/d in September, which was a decrease of 4.4% from August and 1.4% from September 2017. Although crude oil price rose, with lower demand, the average price of regular-grade gasoline in September held steady at $2.92/gal in September. In September, demand for reformulated gasoline, consumed primarily in urban areas, increased 3.8% year over year to 3.1 million b/d, while conventional gasoline, used more in rural areas, decreased 3.7% year over year to 6.2 million b/d. In September, distillate deliveries of 4 million b/d decreased 2.7% from August but remained up 1.4% compared with September 2017. Through the first 9 months of the year, distillate demand was at its highest since 2007. About 97% of distillate demand in September was for ultralow-sulfur distillate (ULSD), driven by road freight transportation activity. The US Bureau of Labor Statistics’ Producer Price Index for freight trucking increased by 7.8% year over year in September but slowed for the third consecutive month. The remaining 3% of distillate demand was high-sulfur distillate fuel (HSD). In September, HSD deliveries decreased 31.1% from August and 35.4% compared with September 2017. This was a decrease from unseasonal strong demand in August, and monthly changes in HSD demand have been volatile this year. Jet fuel demand growth has remained solid. In September, kerosene jet fuel deliveries of 1.7 million b/d increased by 3.7% compared with September 2017. This was the second-strongest September monthly demand on record and highest since 2000.
Big Oil Resists Urge to Spend -- Forget "Drill, baby, drill!" The world’s biggest oil companies aren’t returning to their spendthrift ways, despite crude’s recovery. Equinor ASA and ConocoPhillips kicked off the earnings season for the energy majors on Thursday with an emphasis on restraint despite reporting their highest profits in four years, a possible indication of what to expect from the rest of the industry. Analysts are forecasting record cash flows for crude drillers after oil prices surged, prompting fears the industry would return to lavish spending. Morgan Stanley last week said that the 46 percent advance in international oil prices from the third quarter of 2017 will fuel the biggest profit jump since prices began to crash in 2014. Equinor Chief Executive Officer Eldar Saetre pledged to keep a sharp focus on costs as the market recovers. His words were met by actions as the company trimmed its 2018 budget by 9.1 percent to $10 billion, even as cash flow surged. ConocoPhillips, the largest independent explorer, disclosed results that trounced analysts’ estimates, but Chief Executive Officer Ryan Lance said on an earnings conference call it’s being "laser-focused on discipline." Conoco raised its full-year spending estimate 1.7 percent to $6.1 billion, citing decisions outside the company’s control such as drilling partners expanding operations. The Houston-based explorer handed almost $1 billion back to shareholders, part of a $9 billion expansion of buybacks announced in July. For 2019, Conoco expects capital spending to be roughly in line with this year’s drilling budget. Lance said that after years of cost-cutting and efficiency gains following the price crash, Conoco’s profits are back where they were in 2014, when Brent was closer to $100 a barrel. Brent traded at around $77 Thursday.
U.S. Shale Has A Glaring Problem - Oil prices are down a bit, but are still close to multi-year highs. That should leave the shale industry flush with cash. However, a long list of U.S. shale companies are still struggling to turn a profit. A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) and the Sightline Institute detail the “alarming volumes of red ink” within the shale industry.“Even after two and a half years of rising oil prices and growing expectations for improved financial results, a review of 33 publicly traded oil and gas fracking companies shows the companies posting negative free cash flows through June,” the report’s authors write. The 33 small and medium-sized drillers posted a combined $3.9 billion in negative cash flow in the first half of 2018.The glaring problem with the poor financial results is that 2018 was supposed to be the year that the shale industry finally turned a corner. Earlier this year, the International Energy Agency painted a rosy portrait of U.S. shale, arguing in a report that “higher prices and operational improvements are putting the US shale sector on track to achieve positive free cash flow in 2018 for the first time ever.”The improved outlook came after years of mounting debt and negative cash flow. The IEA estimates that the U.S. shale industry generated cumulative negative free cash flow of over $200 billion between 2010 and 2014. The oil market downturn that began in 2014 was supposed to have changed profligate spending, pushing out inefficient companies and leaving the sector as a whole much leaner and healthier.“Current trends suggest that the shale industry as a whole may finally turn a profit in 2018, although downside risks remain,” the IEA wrote in July.“Several companies expect positive free cash flow based on an assumed oil price well below the levels seen so far in 2018 and there are clear indications that bond markets and banks are taking a more positive attitude to the sector, following encouraging financial results for the first quarter.”But the warning signs have been clear for some time. The Wall Street Journal reported in August that the second quarter was a disappointment. The WSJ analyzed 50 companies, finding that they spent a combined $2 billion more than they generated in the second quarter.The new report from IEEFA and the Sightline Institute add more detail the industry’s recent performance. Only seven out of the 33 companies analyzed in the report had positive cash flow in the first half of the year, and the whole group burned through a combined $5 billion in cash reserves over that time period.Even more remarkable is the fact that the negative financials come amidst a production boom. The U.S. continues to break production records week after week, and at over 11 million barrels per day, the U.S. could soon become the world’s largest oil producer. Analysts differ over the trajectory of shale, but they only argue over how fast output will grow.Yet, even as drillers extract ever greater volumes of oil from the ground, they still are not turning a profit.
U.S. Shale's Glory Days Are Numbered - There are some early signs that the U.S. shale industry is starting to show its age, with depletion rates on the rise. A study from Wood Mackenzie found that some wells in the Permian Wolfcamp were suffering from decline rates at or above 15 percent after five years, much higher than the 5 to 10 percent originally anticipated. “If you were expecting a well to hit the normal 6 or 8 percent after five years, and you start seeing a 12 percent decline, this becomes more of a reserves issue than an economics issue,” . As a result, “you have to grow activity year over year, or it gets harder and harder to offset declines.” Moreover, shale wells fizzle out much faster than major offshore oil fields, which is significant because the boom in shale drilling over the past few years means that there is more depletion in absolute terms than ever before. A slowdown in drilling will mean that depletion starts to become a serious problem. A separate study from Goldman Sachs takes a deep look at whether or not the shale industry is starting to see the effects of age. The investment bank says the average life span for “the most transformative areas of global oil supply” is between 7 and 15 years. U.S. shale is entering the lower end of this range at about 7 years. While shale is still growing, there are some signs that the “Shale Tail,” which Goldman says is “the phase when shale becomes a less meaningful driver of global oil supply,” may not be that far off. Goldman lays out the five signals to watch out for, which would indicate that the glory days of shale are over. Although Goldman says the real trouble may be a few years off, there is some evidence that some of those dynamics are beginning to occur. The investment bank offers a breakdown as follows:
- 1. When inventory is being revised down, not up. This is already occurring in some areas, such as the Eagle Ford. Goldman notes that EOG Resources’ inventory fell in the Eagle Ford in the second quarter, with the company having drilled more wells than it added in new areas.
- 2. When well productivity stops improving. This one is inconclusive although perhaps it is beginning to become a concern. Goldman notes that the industry posed explosive productivity gains in 2017, but those gains slowed this year. Decline rates have accelerated in the Eagle Ford and Delaware Basin, but in the aggregate, there may still be some room for improvement for a little while.
- 3. When supply cost rises for structural reasons. Costs have climbed recently, but largely because of cyclical reasons, Goldman argues. High rates of drilling have created bottlenecks and pushed up costs, but those would come down if the cycle soured. It is still early for this metric.
- 4. When capital shifts to other regions. This looks the least threatening of the five warning signs. U.S. shale remains a top priority and the oil majors have stepped up their spending in shale, pivoting out of other regions. Spending on non-OPEC non-shale crashed post-2014 and hasn’t recovered. There has been some shifting of capital within shale plays – such as from the Permian to the Eagle Ford and the Bakken – but this is mostly due to pipeline constraints.
- 5. When growth is no longer impactful/meaningful (lagging indicator). Goldman Sachs still sees U.S. shale adding 1 million bpd+ at least through 2020. This indicator won’t become clear until the production gains actually start slowing down.
Why U.S. Shale May Fall Short Of Expectations - The U.S. shale industry may not grow as much, or at least as fast, as everyone thinks it will, according to a top industry executive.The drilling frenzy in West Texas is not only facing pipeline constraints – an issue that is very well-publicized at this point – but also some operational problems. Schlumberger’s CEO Paal Kibsgaard says that the shale industry is running into some productivity issues that might mean that shale growth ends up undershooting many of the heady growth forecasts.“[T]the well-established market consensus that the Permian can continue to provide 1.5 million barrels per day of annual production growth for the foreseeable future is starting to be called into question,” Kibsgaard said in an earnings call with analysts. Pipeline woes are indeed causing a slowdown in the Permian, but this isn’t the only problem. “Instead, we believe the main challenge in the Permian going forward is more likely to be reservoir and well performance as the rate of infield drilling continues to accelerate,” Kibsgaard said.At issue is the density and proximity of the zillions of shale wells drilled in places like the Eagle Ford and the Permian. In recent years, the industry increased the density of shale wells, stacking them closer and closer together. One well pad could host a greater number of wells. Companies also drilled longer laterals, used more sand and more water, and the improved returns seemed obvious. However, more recently, this intensification is bumping up against their limits. In the Eagle Ford, there is evidence to suggest that packing too many wells too close together actually reduces productivity, as wells interfere with each other. It’s a problem known as “parent-child” well interference, or “well-to-well” interference, as each additional well shooting off from a main “parent” well adds productivity, but only up to a certain limit. Beyond that threshold, additional wells start to reduce productivity
Prices Edge Higher As Storage Deficits Remain Large And Weather Remains Bullish - Highlights of the Natural Gas Summary and Outlook for the week ending October 19, 2018 follow. The full report is available at the link below.
- Price Action: The November contract rose 8.9 cents (2.8%) to $3.250 on an 18.5 cent range ($3.340/$3.155).
- Price Outlook: Prices continued higher but were unable to post either a new high or low and thus had a rare inside week. Since 2000, only 92 weeks of the 981 weeks witnessed an inside week. Physical data turned bearish this week with storage changes now indicating more bearish temperature adjusted changes. See our daily publication for more details. There will not be another +100 bcf injection this year with the +106 injection from May 11 the only one record for 2018.
- Weekly Storage: US working gas storage for the week ending October 12 indicated an injection of +81 bcf. Working gas inventories rose to 3,037 bcf. Current inventories fall (609) bcf (-16.7%) below last year and fall (596) bcf (-16.4%) below the 5-year average.
- Supply Trends: Total supply rose 0.6 bcf/d to 82.6 bcf/d. US production rose. Canadian imports rose. LNG imports rose. LNG exports fell. Mexican exports fell. The US Baker Hughes rig count rose +4. Oil activity increased +4. Natural gas activity increased +1. The total US rig count now stands at 1,067 .The Canadian rig count fell (4) to 191. Thus, the total North American rig count was unchanged at +0 to 1,258 and now exceeds last year by +143. The higher efficiency US horizontal rig count fell (1) to 926 and rises +155 above last year.
- Demand Trends: Total demand rose +0.8 bcf/d to +70.2 bcf/d. Power demand rose. Industrial demand rose. Res/Comm demand fell. Electricity demand fell (4,278) gigawatt-hrs to 74,100 which trails last year by (800) (-1.1%) and exceeds the 5-year average by 2,294 (3.2%%).
- Nuclear Generation: Nuclear generation fell (5,035)MW in the reference week to 77,759 MW. This is (8,933) MW lower than last year and (4,855) MW lower than the 5-year average. Recent output was at 78,851 MW.
The heating season has begun. With a forecast through November 2 the 2018/19 total cooling index is at (82) compared to (103) for 2017/18, (31) for 2016/17, (37) for 2015/16, (72) for 2014/15, (101) for 2013/14, (105) for 2012/13 and (101) for 2011/12. Natural Gas Summary and Outlook for the week ending October 19, 2018 (pdf)
Long-Range Warming, Record Production Send Nymex Natural Gas Futures Plunging - Despite significant cold in medium-range weather outlooks, natural gas futures prices plummeted Monday as milder risks showed up in longer-range forecasts and production reportedly set fresh highs during the weekend. The Nymex November futures contract fell 11.2 cents to $3.138, while December dropped 9.5 cents to $3.214 and the winter strip (November-March) plunged 9.5 cents to $3.173. Spot gas prices were mixed as cooler weather in the Southeast drove prices lower there, while colder conditions in the eastern United States drove up prices in the Northeast and Appalachia. The NGI National Spot Gas Avg. rose 11 cents to $3.235. With weeks to go before winter, unseasonably chilly temperatures for much of October so far have kept weather front and center for the natural gas market. The last two weeks of trading have seen the Nymex futures curve flip flop throughout the week depending on which way the latest weather models trended. Monday was no different as the November contract opened the session several cents lower and then dropped as low as $3.137 before eventually settling just a few notches above that. Since last Thursday, both the Global Forecasting System and European weather models have been struggling to deal with a typhoon in the Western Pacific, leading to a huge range of possible outcomes in ensemble outlooks and large day-to-day and intraday forecast swings, according to EBW Analytics Group. Model guidance during the weekend added a rather significant amount of heating demand in the medium range, while also showing more clear signs of a pattern adjustment in the long range that would allow for more widespread ridging across the East with the Pacific/North American pattern gradually turning negative, Bespoke Weather Services said. The result would be to refocus any colder air back across the Great Plains later in Week 2 into Week 3, with heating demand quickly falling far below average across the eastern third of the country.
October 25 Natural Gas Storage Report: Is December Contract Heading Towards 3.080? - Last week, the number of total degree-days (TDDs) jumped by more than 35% w-o-w, as heating demand more than doubled - particularly, in the Midwest and Northeast parts of the country. We estimate that total energy demand (as measured in total degree-days - TDDs) was no less than 60% above last year's level. Please note that during this time of the year, heating degree-days (HDDs) are driving natural gas consumption, while cooling degree-days (CDDs) no longer have any meaningful impacts. This week, the weather conditions cooled down again, but to a lot lesser extent. We estimate that the number of HDDs will increase by 8% w-o-w in the week ending October 26. However, total energy demand (measured in TDDs) should still be some 30% above last year's level. Next week, the weather conditions are expected to remain broadly unchanged. The number of HDDs is currently projected to remain flat w-o-w for the week ending November 2. On balance, total energy is projected to drop by 2.0% w-o-w (see the chart below). The latest numerical weather prediction models are showing above normal HDDs and TDDs over the next 15 days (October 24-November 8). Consumption-wise, the latest weather models are bullish in absolute terms, but not as bullish as previously. Total demand is expected to average 80.0 bcf/d over the next 15 days (some 20% above 5-year average), supported (in part) by strong exports - specifically, into Mexico, which hit 5.2 bcf on October 24, an all-time record. Natural gas consumption is also supported by a number of non-degree-day factors such as higher nuclear outages. As of Wednesday, there were a total of 22,300 MW of nuclear power generation offline (-200 MW from Tuesday, but +15% vs. 5-year average). Although the deviation of nuclear outages from the historical norm has been moderating lately, the absolute figures are still high. \ Overall, while total demand remains strong, its deviation from historical norm is declining. We currently estimate that it will drop to only 5% by mid-November, before growing again (see the chart below). At the same time, we estimate that total natural gas supply will remain no less some 15% above 5-year average over the next three months (at least).
Loose Storage Print, Potentially Mild Mid-November Pressure Natural Gas Futures Overnight - November natural gas futures were trading 4.7 cents lower at $3.155/MMBtu shortly before 9 a.m. ET Friday, with the market processing the implications of loose government storage data as forecasters pointed to milder long-range temperature risks. Bespoke Weather Services increased its total gas-weighted degree day expectations overnight for the next two weeks, factoring in less intense warmth in the long-range and a stretch of above average demand beginning next Friday (Nov. 2) through Nov. 5. “However, climate guidance continues to show that the middle of November will have sizable warm risks across the East, something we agree with as well,” Bespoke said. “European guidance similarly shows any cold shot being fleeting in the medium-range, as though it may briefly boost heating demand it is unlikely to stick around, and the upstream tropical forcing signal favors further warming to the forecast.” In addition to the medium-range cold potential, Bespoke also pointed to “evidence of balance tightening” weighed against Thursday’s “incredibly loose” Energy Information Administration (EIA) storage report. “A small cash bounce is possible with cash trading so far above prompt month prices yesterday, but any morning bounce appears likely to fail with these more bearish forecasts and easing storage concerns,” the firm said. Despite tightening from nuclear outages, record liquefied natural gas exports and low Canadian imports, with record-level production and “forecasts expected to only trend in a more bearish direction through the weekend,” the $3.10 area could be tested Friday and is “quite likely to break on warmth next week.” The EIA reported a 58 Bcf injection into storage inventories for the week ending Oct. 19, although the implied flow was an even greater 63 Bcf build because of a reclassification of 5 Bcf that decreased working gas in South Central non-salt gas stocks. Working gas in storage as of Oct. 19 was 3,095 Bcf, 606 Bcf less than last year at this time and 624 Bcf below the five-year average of 3,719 Bcf. While the inventory deficit to the five-year minimum increased with this week’s EIA report, “weather-adjusted, the market was about 3.0 Bcf/d oversupplied,” “U.S. dry gas production continues to ramp up about 0.85 Bcf/d week/week (w/w) to 86.5 Bcf/d as the Northeast has increased 3.1 Bcf/d since the end of June.
Analysis: US LNG to Asia in question as prices fall, shipping costs rise Falling spot LNG prices in Asia and record-high shipping rates could deter the movement of US cargoes to the region this winter as offtakers seek higher-value markets for export. Not registered? Receive daily email alerts, subscriber notes & personalize your experience. Register Now On Wednesday, the prompt-month Platts JKM, the benchmark price for spot-traded LNG in northeast Asia, slumped to $10.20/MMBtu, S&P Global Platts data shows. After climbing to a four-year high at over $12/MMBtu in September, the prompt-month contract has since lost more than 15% of its value, trading as low as $9.87/MMBtu earlier this month. Weaker prices have come mostly on limited prompt-month buying interest from northeast Asian end-users in recent weeks. Falling prices for Brent crude, which sank below $80/b on Tuesday, have also made oil-linked supply contracts cheaper, putting additional pressure on the spot-market. As the JKM continues to trend lower, record-high LNG shipping rates are also narrowing the margin for profit on US exports. On Wednesday, the Asia Pacific rate climbed to its highest on record at $170,000/d. In the Atlantic Basin, the Platts-assessed rate of $140,000/d is now at its highest since 2012. In just the past two weeks, tightening supply in the spot-shipping market has seen rates in both basins surge from around $100,000/d to current levels. With 2018 expected to be a record growth year for the global LNG shipping fleet, the market isn't fundamentally short on tonnage. But with many chartered vessels currently unavailable for hire, there's no telling how long the spot-shipping crunch could last.
Ship scarcity threatens LNG market growth more than tight supply – IEA - The lack of timely investments in building the LNG carrier fleet threatens market development and security of supply, which could materialize earlier than insufficient liquefaction capacity, Keisuke Sadamori, Director of the Office for Energy Markets and Security at the International Energy Agency, said earlier this week. The Paris-based energy watchdog's comments come against the backdrop of LNG carrier spot rates hitting record levels. The Pacific and Atlantic shipping rates have touched $170,000/day and $140,000/day respectively, and Atlantic and Pacific ballast rates remain steady at 125% and 150% respectively, according to S&P Global Platts data.The IEA's projections show that spare fleet capacity in the LNG market was sustained well above 15% between 2015 and 2018, but starts to decline sharply from 2019 onwards into single digits, and drops below zero by 2022-2023, indicating severe vessel shortages. "Changes in the LNG market challenge the traditional LNG shipping business model," Sadamori said on the sidelines of the LNG Producer Consumer Conference in Nagoya on Monday. He said current liquefaction projects led to many new vessel deliveries, which reach a peak in 2018, but this may not be sufficient for new supply by 2020. Shipping investment has been under pressure as the banking sector has pulled bank due to sharp losses and write-downs incurred in the last decade as shipping companies reeled from heavy losses and oversupply. Rising interest rates and tighter money supply have raised concerns about new investment in LNG shipping. "Under the move towards a more volatile and flexible business environment, the shipping industry must find new ways of mitigating credit risks to incentivize shipping investment,"
The low-cost gas supply driving the LNG Canada project, part 2. - LNG Canada, the newly sanctioned liquefaction/LNG export project in British Columbia, is an entirely different animal than its operational and under-construction counterparts in the U.S. The Shell-led LNG Canada project is being developed without any of the long-term offtake contracts that financed Sabine Pass, Cove Point and the projects now being built along the Louisiana and Texas coasts, and it requires the construction of a new, long-haul pipeline — Coastal GasLink. What’s also different is that the BC project’s co-owners have been developing their own gas reserves to supply the project, though they may also turn to the broader Montney and Duvernay markets for the gas they will need. Today, we conclude a two-part series with a look at how the project expects to undercut its U.S. competitors. As we said in Part 1 of this series, the initial phase of LNG Canada that achieved final investment decisions (FIDs) by Shell and its four project partners will consist of two 7-million-tonne-per-annum (MMtpa) liquefaction trains, each demanding about 900 MMcf/d of gas. The project site (yellow triangle in Figure 1) is near the mouth of the Douglas Channel in Kitimat, a town about 400 miles up the BC coast from Vancouver. Natural gas to supply the liquefaction trains will be transported from northeastern BC via TransCanada’s planned 420-mile, 2.1-Bcf/d Coastal GasLink pipeline (dashed orange-and-black line). The LNG export project is a long-term boon to Western Canadian gas producers, but it won’t come online until at least 2023 or 2024. That’s an eternity for producers in the region’s Montney and Duvernay shale plays, who through much of 2018 have been enduring profit-crushing price discounts for their gas relative to Henry Hub. We’ve chronicled the challenges faced by these producers in a number of blogs (including Montney’s Python, Don’t Do Me Like That and On the Border); an overriding theme is that while producers in the Montney and Duvernay have competitively low production costs, they are being squeezed out of many of their traditional markets — especially the U.S. Northeast and Midwest, plus Eastern Canada — because of soaring gas output in the Marcellus/Utica.
B.C. Faces Gas Shortage As Winter Approaches - A natural gas pipeline explosion that occurred earlier this month near the city of Prince George will reduce supply to British Columbia by between 20 and 50 percent this winter, the gas distribution company said in a statement.FortisBC said that although it had planned on having the ruptured pipe up and running by mid-November, it will not be able to fill it to capacity. At best, it would operate at 80 percent of capacity for the winter.To compensate, FortisBC said it was in talks with TransCanada to increase the flow along the Southern Crossing pipeline from Alberta. At the same time, the company said, it was working with industrial gas consumers to optimize their consumption. In its update, the company appealed to household consumers to also try and optimize their consumption of the fuel during peak demand season.The Enbridge-operated pipeline that exploded in early October is what FortisBC uses to transport as much as 85 percent of the natural gas it supplies to customers in British Columbia. The blast led to the evacuation of 100 people and forced the residents of British Columbia and the state of Washington to cut their gas consumption. At the time, FortisBC announced as many as 700,000 customers faced a temporary lack of access to natural gas because of the explosion. That’s more than two-thirds of the company’s customer base.Now that the inconvenience for gas consumers is set for a considerable extension, chances are that the anti-pipeline sentiment in the province, which became notorious for its opposition to the Trans Mountain expansion project, will deepen as the necessary cutbacks highlight consumers’ dependence on the pipeline network.Yet at the same time B.C. has just become the proud home of Canada’s first-ever LNG production and export project, LNG Canada, which received its final investment decision earlier this month.
Electricity can defuse LNG’s ‘carbon bomb,’ study says -- A liquefied natural gas industry can be developed without blowing B.C.’s carbon diet, but only if the industry is extensively electrified, according to a new Clean Energy BC white paper. “In all but the most aggressive decarbonization pathway scenarios, liquid and gaseous fossil fuels – including liquid natural gas (LNG) – will continue to play a leading role well into the decades of this century,” the white paper states. But without extensive electrification, an LNG industry would make it difficult for B.C. to meet its greenhouse gas (GHG) reduction targets, the white paper states. It estimates “extensive electrification” of the Montney region in northeastern B.C., where the natural gas for the $40 billion LNG Canada project would be produced, could reduce upstream emissions by 60%. Some electrification of the natural gas sector in northeastern B.C. has already occurred, as a recent tour of Shell Canada’s Groundbirch operation showed. And more is on the way, thanks to BC Hydro’s new $298 million Peace Region Electricity Supply (PRES) project, which is now in early construction. Shell’s Groundbirch region, south of Fort St. John, includes 500 natural gas wells, two large natural gas processing plants and two smaller ones. The newest and largest, the Saturn plant, is something of a showpiece for the industry. It is fully electric, with power transmission lines provided through the Dawson Creek-Chetwynd Area Transmission (DCAT) project. According to the BC Oil and Gas Commission, 13 of 110 gas plants in B.C. are electrified. Clean Energy BC estimates that electrifying the Peace region’s gas sector has already reduced emissions by two million tonnes of carbon dioxide equivalent (CO2e).
Minor earthquakes detected near fracking site in Lancashire - A series of small earthquakes have been detected in Lancashire close to the site where fracking operations began this week. The British Geological Survey (BGS), which provides impartial advice on environmental processes, recorded four tremors in the vicinity of the energy firm Cuadrilla’s site on Preston New Road near Blackpool on Friday.Fracking was stopped in 2011 after two earthquakes, one reaching 2.3 on the Richter scale, were triggered in close proximity to the site of shale gas test drilling. A subsequent report found that it was highly probable that the fracking operation caused the tremors.On Monday Cuadrilla began drilling again after campaigners lost a high court legal challenge.The BGS said: “Since hydraulic fracturing operations started at Preston New Road, near Blackpool, we have detected some small earthquakes close to the area of operations.“This is not unexpected since hydraulic fracturing is generally accompanied by micro-seismicity. The Oil and Gas Authority (OGA) has strict controls in place to ensure that operators manage the risk of induced seismicity.“All of the earthquakes detected at Preston New Road so far are below the threshold required to cease hydraulic fracturing.” One of Friday’s tremors measured 0.3, the level beyond which t he BSG says hydraulic fracking should proceed with caution. Tremors above 0.5 would force operations to cease.
Blackpool suffers FOUR earthquakes in just two days after fracking restarts in the area despite protests - Blackpool has been hit by four earthquakes in two days – after fracking was restarted in the area this week.The most recent quake occurred yesterday afternoon at an amber level on the official monitoring scale, which means ‘proceed at caution’.Firms stopped fracking in Lancashire in 2011 after two earthquakes, and experts now fear further disturbances. Blackpool has been hit by four earthquakes in two days – after oil and gas firm Cuadrilla started fracking in the area again. But oil and gas firm Cuadrilla started drilling again on Monday after campaigners lost a last-ditch legal battle to stop them at the High Court.David Smythe, emeritus professor of geophysics at the University of Glasgow, warned that ‘there may be trouble ahead’ if work continues.He said: ‘Recent research by Stanford University shows that these tiny tremors can be indicators of bigger quakes to follow – like canaries in a coal mine. The problem for Cuadrilla is that if it carries on regardless, bigger earthquakes may well be triggered. Blackpool has been a focal point for the anti-fracking movement after the 2011 quakes. One reached 2.3 on the Richter scale on April 11. Fracking for shale gas was ceased in the UK in 2011 after one tremor of magnitude 2.3 hit the Fylde coast. Pictured: Protesters campaigned against the process being restarted Cuadrilla was ordered to stop all work shortly after the second smaller shock on May 27, 2011. Preliminary studies by the British Geological Society suggested the tremors were linked to fracking. Blackpool was hit by three minor quakes on Thursday at 3.48pm, 10.54pm and 11.44pm. They were at minus levels of seismic activity, only picked up on specialist equipment. Yesterday at 1.20pm the area was hit by an earthquake with a 0.3 magnitude – which would still not have been felt by residents.
Tremors Interrupt First UK Fracking Attempt in 7 Years -- A little over a week after fracking restarted in the UK, it's been paused again due to seismic activity, The Guardian Reported.Cuadrilla Resources, the company fracking two wells at the Preston New Road site in Lancashire in northwest England, confirmed Tuesday they had paused operations for the day after a tremor registered a magnitude of 0.4. Tuesday's tremor was only the largest of six that have been detected near the site since Cuadrilla began fracking again, The British Geological Survey said."It is only what we've been expecting as it is an undisputed consequence of extreme energy extraction," Gail Hodson of Frack Free Lancashire told The Guardian. "It highlights the fact that all the regulation in the world, even if it was gold standard, cannot stop seismic activity.Fracking was originally stopped in the UK in 2011 because of two earthquakes near the fracking site, one reaching a magnitude of 2.3. When British energy and clean growth minister Claire Perry approved the two new wells in July and September of this year, the government set up a traffic light system to monitor seismic activity and stop fracking if any tremor exceeded a magnitude of 0.5. Since Tuesday's tremor wasn't quite that high, Cuadrilla explained their actions as an abundance of caution in a statement reported by ITV News: This is an extremely low level of seismicity, far below what could possibly be felt at the surface but classed as an amber event as part of the Traffic Light System (TLS) in place for monitoring operational activity. As such we are required to reduce the rate we are pumping fracturing fluid once it has been detected.
Fracking firm Cuadrilla vows to carry on after SIXTH earthquake - Fracking firm Cuadrilla has vowed to carry on after halting drilling on Tuesday following another tremor which broke out on their site in Lancashire. The seismic event, which measured 0.4 on the Richter Scale, was detected yesterday on the actual grounds of their operation in Little Plumpton while drilling was carried out, and is the sixth quake in the past six days in the area.Cuadrilla, which only resumed fracking on Monday last week, adheres to the 'traffic light system' regulations which measure tremors and registered this one on the amber level, which means 'proceed with caution'.It halted drilling for the rest of the day but confirmed operations were back to normal today. The firm said: 'This is an extremely low level of seismicity, far below what could possibly be felt at the surface.'But it was classed as an amber event as part of the Traffic Light System (TLS) in place for monitoring operational activity.'As such we are required to reduce the rate we are pumping fracturing fluid once it has been detected. 'In fact we have adopted extra caution and have stopped pumping for the day.''Seismicity will, as always, continue to be monitored closely around the clock by ourselves and others and we plan to continue hydraulic fracturing again in the morning.'Local residents should be reassured that the monitoring systems in place are working as they should.
Fracking halted again in Lancashire after 17th earthquake in 9 days - Another earthquake has hit a fracking site in Lancashire – this time reaching levels where operations must be stopped.It is the 17th earthquake in 9 days and has officially been classed as a ‘red event.’ The latest – and biggest – tremor happened this morning on land where energy firm Cuadrilla is drilling for shale gas. Campaigners are calling for an end to fracking after the latest quake in Lancashire (Picture: Getty)M 0.8 "red" event recorded at the hydraulic fracturing site in Lancashire, UK by the BGS and confirmed by the operator, Cuadrilla. Regulations mean that injection operations must be paused for at least 18 hours – i.e. probably until Monday.https://t.co/MHey0chBaN The seismic event, measured 0.8 on the Richer Scale, and was detected on the grounds of their Preston New Road site. Earlier this week, the group voluntarily stopped drilling after a 0.4 event was detected. However regulations mean that injection operations must be paused for at least 18 hours although the firm plan to start again tomorrow. Campaigners, who lost a High Court bid to stop fracking, have demanded the firm stop following the latest set of quakes. Rose Dickinson, Friends of the Earth campaigner, said: ‘Fracking only started 11 days ago. In that time there have been 17 earthquakes, including one today that has reached a red warning level – which means work at the site has to stop. ‘This is obviously deeply concerning for those living nearby and why the industry must be closely monitored. ‘We’ve known all along that fracking poses risks to our environment and our climate. When is the government going to realise that fracking is the wrong choice for Lancashire, the UK and our global climate?’ In 2011, fracking was halted for seven years after experts said two Lancashire tremors – one registering 2.3 magnitude – were caused by shale gas test drilling.
$43B Slated for North Sea Projects Through 2025 - Sixty-seven oil and gas projects offshore four North Sea countries should start up through 2025, representing $43.1 billion in investment, according to a new report from GlobalData.“In 2025, key projects in the North Sea are expected to contribute about 1,327.4 thousand barrels of oil per day (Mbd) of global crude and condensate production and about 1,924.4 million cubic feet per day (MMcfd) of global gas production,” Jonathan Markham, GlobalData energy analyst, said in a written statement emailed to Rigzone.In its report, “H2 2018 Production and Capital Expenditure Outlook for Key Planned Upstream Projects in the North Sea, GlobalData states that approximately $18.9 billion will be spent to bring the planned projects online and $24.2 billion will go toward key announced projects. Markham pointed out that the U.K. sector of the North Sea boasts 11 planned oil and gas projects – the highest number among the countries. Norway will host eight projects and the Netherlands two, he added.“The UK also leads in terms of announced projects with 25, followed by Norway and the Netherlands with 18 and two, respectively,” said Markham.A breakdown of anticipated project starts in the North Sea countries, including Denmark, appears in this graph provided by GlobalData. In terms of capital expenditure through 2025, Norway tops the list with an anticipated $21.2 billion, stated GlobalData. Of this total, $12.8 billion will go to key planned projects and the remaining $8.4 billion is slated for announced projects, the consultancy noted. The planned UK CAPEX for the period follows at $20.2 billion - $5.6 billion for key planned projects and $14.6 billion on announced project, added the firm
At least 26 beaches affected by oil spill in southern France - Oil has washed up on at least two dozen beaches in the south of France following a collision between two cargo ships near Corsica some two weeks ago, according to local authorities and media reports. On Friday, officials from the prefecture of Toulon said a total of 26 beaches in nine municipalities had been affected, warning local residents not to touch the oil. On Sunday, the Var-Matin regional newspaper reported that the Almanarre beach, south of the town of Hyeres, had also been affected and was closed to visitors. The prefecture had previously reported that the town of Saint-Tropez on the French Riviera was affected, along with two other nearby towns. Clean-up operations continued over the weekend, local media reported. Citing a high-ranking official from the prefecture, news agency AFP reported that a complete elimination of the oil could take months. French and Italian authorities launched a clean-up operation after the two freight ships collided, but were unable to contain all of the oil.
Europe’s liquefied natural gas imports have increased lately, but remain below 2011 peak - Imports of liquefied natural gas (LNG) to the 28 countries that make up the European Union (EU-28) averaged 5.1 billion cubic feet per day (Bcf/d) in 2017, increasing for the third consecutive year but remaining below their 2011 peak. In 2017, imports of LNG into EU-28 accounted for 13% of the global total. LNG import capacity in EU-28 currently stands at 20 Bcf/d, or almost one-fifth of the global total, but utilization of EU-28 LNG import facilities has declined from about 50% in 2010 to between 20% and 25% in recent years as expansions in regasification capacity far exceeded demand for LNG imports. Currently, 13 of the EU-28 member countries import LNG. In 2017, LNG accounted for 11% of EU-28’s overall natural gas supply. Domestic natural gas production in EU-28, two-thirds of which is in the United Kingdom and the Netherlands, has steadily declined in recent years and in 2017 accounted for 25% of EU-28 natural gas supply. European natural gas production is expected to continue to decline because of an aging, mostly depleted resource base. In addition, the Netherlands’ largest natural gas field, Groningen, has been subject to increasingly strict production reduction measures. Imports of natural gas by pipeline, in particular from Russia and Norway, have increased. In 2017, natural gas imports from Russia provided 35% of the total EU-28 supply and Norway provided 24%. In the first six months of 2018, pipeline imports from Russia continued to increase, averaging a record 17.1 Bcf/d, 8% higher than in the same period last year, based on data from S&P Global Platts.
Berlin mulls terminal for US Liquefied Natural Gas - Chancellor Angela Merkel’s spokesman Steffen Seibert said that “private investors are now studying the construction of an LNG terminal at various potential sites … and the government is studying options for funding under existing federal programmes”. The terminals would be needed to unload and store LNG from American tankers and convert it back into gas. According to the US daily, Merkel wants to help finance a 500 million euro ($575 million) project, through either subsidies, loans, credit guarantees or loss protection for investors or a mixture of the four. Merkel’s spokesman insisted that any decision to build an LNG terminal would be made regardless of US pressure but “based on Germany’s and Europe’s interest in having a diversified, secure, competitive and affordable infrastructure for energy imports”.
Europe's Gas Game Just Took A Wild Twist -- Despite the almost unprecedented divisive nature of Donald J. Trump’s presidency, he is chalking up some impressive foreign policy victories, including finally bringing Beijing to task over its decades long unfair trade practices, stealing of intellectual property rights, and rampant mercantilism that has given its state-run companies unfair trade advantages and as a result seen Western funds transform China to an emerging world power alongside the U.S. Now, it looks as if Trump’s recent tirade against America’s European allies over its geopolitically troubling reliance on Russian gas supply may also be bearing fruit. On Tuesday, The Wall Street Journal reported that earlier this month German Chancellor Angela Merkel offered government support to efforts to open up Germany to U.S. gas, in what the report called “a key concession to President Trump as he tries to loosen Russia’s grip on Europe’s largest energy market.”Over breakfast earlier this month, Merkel told a small group of German lawmakers that the government had made a decision to co-finance the construction of a $576 million liquefied natural gas (LNG) terminal in northern Germany, people familiar with the development said.The project had been postponed for at least a decade due to lack of government support, according to reports, but is now being thrust to the center of European-U.S. geopolitics. Though media outlets will mostly spin the development, this is nonetheless a geopolitical and diplomatic win for Trump who lambasted Germany in June over its Nordstream 2 pipeline deal with Russia.In a televised meeting with reporters and NATO Secretary-General Jens Stoltenberg before a NATO summit in Brussels, Trump said at the time it was “very inappropriate” that the U.S. was paying for European defense against Russia while Germany, the biggest European economy, was supporting gas deals with Moscow.Both the tone and openness of Trumps’ remarks brought scathing rebukes both at home and among EU allies, including most media outlets. However, at the end of the day, it appears that the president made a fair assessment of the situation. Russia, for its part, vehemently denies any nefarious motives over its gas supply contacts with its European customers, though Moscow’s actions in the past dictate otherwise.Moscow also claims that the Nordstream 2 gas pipeline is a purely commercial venture. The $11 billion gas pipeline will stretch some 759 miles (1,222 km), running on the bed of the Baltic Sea from Russian gas fields to Germany, bypassing existing land routes over Ukraine, Poland and Belarus. It would double the existing Nord Stream pipeline’s current annual capacity of 55 bcm and is expected to become operational by the end of next year.
Russia Discusses Big Projects With Exxon As New Sanctions Loom - While U.S. legislators are discussing new sanctions on Russia that would increase economic pressure on Moscow by possibly expanding sanctions to the banking and energy industries, Russia is said to be in talks with U.S. supermajor ExxonMobil over possible new oil and gas projects currently beyond the scope of the sanctions.Russia’s discussions with Exxon could potentially lead to increased cooperation between the American company and Russia’s state-held Rosneft, the biggest oil producer in the country, Bloomberg reports, quoting Russian government officials.Russia has drafted several proposals to put up for discussion with Exxon for projects in natural gas, chemicals. These projects are for now outside the scope of the existing U.S. sanctions on Russia, two unnamed Russian officials told Bloomberg.If Exxon were to decide to go ahead with any of the possible projects, an agreement may come by the end of this year, one official told Bloomberg.The Russian offer for new cooperation projects comes as U.S. lawmakers discuss extending sanctions on Russia to energy and oil projects and sovereign debt markets in what Republican Senator Lindsey Graham called a “sanctions bill from hell.”Earlier this year, U.S. officials said that existing sanctions had limited “important investment in exploratory energy projects needed to help grow Russia’s oil and gas production capacity.” Total foreign direct investment into Russia has declined more than 5 percent since 2013, while U.S. investment has plunged by 80 percent since then
Are Claims Of Peak Oil Production In Russia Overblown? - Russian authorities have announced that domestic oil production hit 11.36 million barrels per day (bpd), on average, in September (Vedomosti, October 2). This marks a new historic peak, reached despite the often-cited poor shape of the Russian economy and negative impact of Western sanctions, not to mention the restrictions self-imposed on Moscow by the 2016 deal with the Organization of the Petroleum Exporting Countries (OPEC) (see Jamestown.org, March 8). Could Russia’s oil output continue to grow in the years to come? To compare, oil output in Kazakhstan was, in 2017, 3.3 times higher than in 1989; while last year’s production in Azerbaijan, whose deposits were previously considered the most exhausted in all of the Union of Soviet Socialist Republics (USSR), were 2.9 times greater than that recorded in the Azeri SSR for 1990 (Bp.com, June 2018, accessed October 17). This data proves a simple fact: output figures in the former Soviet space have depended strongly on the presence of Western technology in the domestic industry and upon the governments’ efforts to explore new oil fields in order to substitute old and overexploited ones. Even after around two decades of increasing investment, Russian oil companies still produce only 28–33 percent of oil from their wells; the average figure for British producers reaches 42–43 percent (Neftegaz.ru, December 18, 2013; Ogauthority.co.uk, September 2017). Were the recovery rates to rise at least to the average level of European firms, Russia would be able to add (at least theoretically) up to 800,000 barrels to its daily output. In fact, it would also result in longer service lives for existing oilfields. Russia’s oil output has for years been held back by a lack of competition in the domestic energy market. In too many cases, private companies are banned from exploring new deposits. Illustratively, only those corporations that are majority-controlled by the state may drill offshore or in the Far North territories. Additionally, giant (or so-called “strategic”) fields can be awarded to state-owned corporations (first of all to Gazprom, Rosneft, or Gazpromneft) without obligatory auctions, and sometimes even for free (RBC, July 30, 2015). The result of these uncompetitive policies has been, in part, to keep overall production levels lower than they might otherwise have been.
First LNG Shipment Departs Ichthys - Inpex confirms that the first shipment of liquefied natural gas has departed from its operated Ichthys LNG project. Inpex Corporation confirmed Tuesday that the first shipment of liquefied natural gas (LNG) has departed from its operated Ichthys LNG project. The first LNG shipment is destined for the Inpex operated Naoetsu LNG terminal in Niigata Prefecture in Japan. Approximately 70 percent of the LNG produced by Ichthys LNG is scheduled to be supplied to Japanese customers, Inpex said in a company statement posted on its website. Ichthys is scheduled to gradually increase its production volume of LNG to approximately 8.9 million tons per year. “First cargo from Ichthys LNG is a historic moment for Inpex Japan and Australia. It demonstrates our commitment to being a safe, reliable long-term energy supplier,” Inpex President Director Australia, Seiya Ito, said in a company statement. “Ichthys is an iconic project for Australia. With an operating life of around 40 years, Ichthys LNG will be delivering benefits to the Australian economy and community for decades to come,” he added. The Australian Petroleum Production & Exploration Association (APPEA) Chief Executive, Malcom Roberts, said “industry applauds this first LNG shipment”. “This world-class LNG Project – seven years in the making – will deliver jobs, taxation and export revenues for Australia for decades to come,” Roberts added.
Colombia Ecopetrol cleans spill after latest bomb attack on Cano Limon pipeline (Reuters) - Colombia’s state-run oil company Ecopetrol is carrying out a clean-up operation after a bomb attack on the Cano Limon pipeline spilled crude into a waterway, the company said in a statement on Thursday. The attack on Wednesday, the seventy-sixth on the pipeline this year, had no immediate effect on exports or production at the Cano Limon field, operated by Occidental Petroleum, Ecopetrol said. Though the pipeline was not functioning at the time of the attack, some oil spilled into a creek in the La Blanquita area of Boyaca province, the company said. The 485-mile (780-km) pipeline, which can transport up to 210,000 barrels per day, has been off-line for much of this year because of bombings and illegal taps. The company did not name the group responsible for the bombing, but the pipeline is a frequent target of National Liberation Army (ELN) rebels. The ELN, considered a terrorist group by the United States and the European Union, has about 1,500 combatants and opposes multinational companies, claiming they seize natural resources without benefiting Colombians.
Nigeria: Clean-up of Ogoni oil spill to commence soon – Govt --The Minister of State for Environment, Alhaji Ibrahim Jibril, said on Monday that the Federal Government was set to commence the clean -up of oil spills in Ogoni land. Jibril told the News Agency of Nigeria (NAN) on the sideline of the 2018 International Day for Preservation of Ozone Lay in Abuja. He said that the exercise would begin before the end of this year. NAN recalls that the UN Environment Programme (UNEP) had recommended initial release of one billion dollars to be used for the clean-up of oil spills for over a period of five years. The clean-up exercise, according to UNEP, will take 25-30 years to restore the environment. Much of the funding for the clean-up is expected to come from the oil companies. The minister said that out of 200 million dollars expected from oil companies, 177 million dollars had been raised for the operation. "For 2018, 200 million dollars is expected but so far the joint venture partners and NNPC had been able to raise 177 million dollars for the operation, which will commence soon. "Right now, the procurement process is at the very last stage and very soon, we should be able to go to Federal Executive Council meeting to get approval for the contract to be awarded. "We believe that we should be able to go to the field in the fourth quarter of this year to commence remediation exercise," Jibril said.
Big Oil Woos China With $24B Spree-- A Chinese archipelago that served as a pirate’s den in centuries past and was governed by President Xi Jinping in the new millennium is luring the world’s energy giants. State-run Saudi Arabian Oil Co. and U.S. behemoth Exxon Mobil Corp. were among firms that signed $24 billion in preliminary deals last Thursday at the International Petroleum and Natural Gas Enterprises Conference in Zhoushan -- the main island in a group of over 1,300 off China’s east coast. Saudi Arabia’s state oil company agreed to buy a stake in a refinery that his firm, Rongsheng Petrochemical Co., is building there. The high-profile deal illustrated the potential for Zhoushan and the wider Zhejiang province, in which the archipelago is located, to play an outsize role in energy markets. The local government’s ambition for a processing, storage and trading hub is spurring a rush for a piece of the pie. “China’s paramount position in the oil market today” is an important reason why almost 800 attendees were present at the IPEC gathering, said Janet Kong, who heads BP’s Asia trading business. “This position will become even bigger and heavier,” she said in a speech at the Oct. 18 event. While China is currently engaged in a trade war with the U.S. and its economy has slowed from the breakneck speeds of the previous decade, its demand for energy is still growing. It overtook America last year as the world’s biggest buyer of overseas crude and is now also the top importer of natural gas, ahead of Japan. As part of plans to revamp the economy, China has set up several free trade zones that typically feature fewer regulatory hurdles, greater transparency over government rules and looser restrictions for foreign investment. One such FTZ was established last year at Zhoushan in the province where Xi served as governor in the 2000s before he ascended to the nation’s presidency.
US concerned Russia to help Iran avoid oil sanctions -- The US is reportedly concerned that Russia could help Iran avoid sanctions by purchasing oil and then reselling it in the global market.The US is set to reimpose sanctions on 5 November with an aim to halt Tehran’s oil exports.The Trump administration decided to withdraw from 2015 nuclear pact, which provided relief to Tehran from sanctions. Russia has been opposed to the decision of reimposing oil sanctions on Iran and withdrawing from the multilateral pact, which China, the UK, France, Germany and EU were also signatories.Following US decision to reimpose sanctions, its officials are now struggling to convince other countries to cut oil trade ties with Iran. They believe that Iran is exploring other supply channels, according to the Financial Times.A senior administration official was quoted by the financial publication as saying: “Iran might be pushing the idea of Russia selling their oil on the world market to evade sanctions.“Iran might be pushing the idea of Russia selling their oil on the world market to evade sanctions.”“I would discourage Russia from even considering this. It would be in Russia’s best interests not to facilitate Iranian evasion of US sanctions.”This warning was issued just as the Trump administration’s national security adviser John Bolton prepares to meet Russian counterpart in Moscow next week. Bolton would also visit Azerbaijan, which shares borders with Iran.US officials have been visiting countries that are Iran’s key oil consumers, including India, Japan and South Korea in an effort to make them halt their imports.The department spokesperson stated: “Our goal remains to get to zero oil imports from Iran as quickly as possible, ideally by 4 November.”The recent weeks have seen US officials preparing to provide special reduction exemptions to some oil consumers of Iran. This has increased the prospect of Iran continuing its oil exports to countries that indicate that they have reduced the total oil consumption from Tehran. A state department spokesperson told the Financial Times: “The United States is in the midst of an internal process to consider SRE waivers for individual countries.”
US issues warning to Russia about helping Iran escape upcoming oil sanctions - The United States warned Russia on Sunday about assisting any potential Iranian attempts to evade an upcoming round of U.S. sanctions against the Islamic Republic, scheduled to take effect on Nov. 4, months after U.S. President Donald Trump withdrew America from the 2015 nuclear deal. “Iran might be pushing the idea of Russia selling their oil on the world market to evade sanctions,” a senior administration official told The Financial Times. “I would discourage Russia from even considering this. It would be in Russia’s best interests not to facilitate Iranian evasion of U.S. sanctions.” This development comes as U.S. National Security Advisor John Bolton is expected to meet senior Russian officials in Moscow early next week. Russia supported the nuclear deal and supports Iran’s proxies, such as Syrian President Bashar Assad and Hezbollah in Lebanon. Additionally, U.S. Treasury Secretary Steve Mnuchin, visiting Israel this week, said on Sunday that it will be difficult for countries to receive waivers on Iran oil sanctions. “I would expect that if we do give waivers, it will be significantly larger reductions,” he said in an interview with Reuters. In light of Bolton’s remarks in August about completely eliminating Iranian oil exports, “I don’t expect we will get to zero in November, but I do expect we will eventually get to zero,” added Mnuchin. “There have been already very significant reductions in advance of this date.”
Iran has produced and exported less crude oil since sanctions announcement – EIA - Iran's crude oil exports and production have declined since the May 2018 announcement by the United States that it would withdraw from the Joint Comprehensive Plan of Action (JCPOA) and reinstate sanctions against Iran. The announcement included two wind-down periods to allow those doing business that involved Iran time to comply. On August 6, 2018, the first wind-down period ended and triggered the re-imposition of some sanctions. On November 4, 2018, the second wind-down period will end and trigger the re-imposition of full sanctions, including a number of measures that target Iran’s energy sector. According to data from ClipperData, Iran's exports of crude oil and condensate peaked in June at about 2.7 million barrels per day (b/d), more than 300,000 b/d higher than the average during the first four months of the year (before the May announcement of sanctions). In September, Iran’s crude oil and condensate exports fell to 1.9 million b/d. Although some countries, such as France and South Korea, stopped importing crude oil and condensate from Iran in July, other countries continue to import from Iran. The United States has not imported crude oil and condensate from Iran in several decades. ClipperData indicates that China and India collectively received nearly half of Iran's crude oil and condensate exports in the first half of 2018. During this period, China's imports from Iran averaged 644,000 b/d and India's imports from Iran averaged 554,000 b/d. In September, China's imports from Iran dropped to 441,000 b/d, the second lowest level since December 2015, while India's imports from Iran were 576,000 b/d. Whether Iran's energy exports are declining entirely because of the sanctions or for other reasons is unclear. Trade press reports indicate a willingness on India's part to at least partially comply with the sanctions, but China had continued to import from Iran even when previous sanctions were in effect. In response to the announcement of sanctions by the United States, the European Union passed a statute to protect European companies doing business in Iran from the effects of U.S. sanctions. Despite this effort, data from ClipperData indicate that France has not imported any crude oil or condensate from Iran since June. In addition, Italy’s and Spain’s imports from Iran in September were 27,000 b/d and 15,000 b/d lower than their averages for the first half of the year. Some countries could continue to import Iran's crude oil and condensate until the November 4 deadline, at which point they might stop importing from Iran.
Saudi Arabia Has No Plans to Repeat 1973 Oil Crisis -- Saudi Arabia has no intention of using its oil wealth as a political tool in the controversy over the killing of journalist Jamal Khashoggi, and the kingdom plans to boost crude output again soon. "For decades we used our oil policy as a responsible economic tool and isolated it from politics," Energy Minister Khalid Al-Falih said in an interview with Russia’s TASS news agency published on Monday. "So let’s hope that the world would deal with the political crisis, including the one with a Saudi citizen in Turkey, with wisdom," he said. Falih’s comments come just days after Saudi Arabia said Khashoggi, a critic of Crown Prince Mohammed bin Salman, was killed in the country’s consulate in Istanbul. While the official report won praise from U.S. President Donald Trump, many politicians and leaders in America and Europe questioned the official explanation that he was accidentally killed in an altercation. That contradicts details leaked by Turkish officials saying the journalist was murdered. The incident has damaged the kingdom’s image as a future investment hub, with global business leaders from Goldman Sachs Group Inc. to Uber Technologies Inc. distancing themselves from Prince Mohammed and scrapping plans to attend his business forum this week. Last week, Saudi Arabia vowed to retaliate against any punitive measures linked to Khashoggi’s fate, fueling concerns of oil price hikes. Al-Falih said there’s no intention of repeating the 1973 oil embargo, in which the kingdom and several regional allies squeezed supplies to the U.S. and Europe in retaliation for their support for Israel. Saudi Arabia is ready to raise its output to 11 million barrels a day "in the near future" and has the ability to lift production as high as 12 million barrels a day if the market requires it, Al-Falih said. The world needs to show its appreciation of the efforts and multi-billion dollar Saudi investment that made this possible, he added. There are limits to the kingdom’s ability to respond, Al-Falih said. If the supply gap created by disruption in Libya, Nigeria, Venezuela -- as well as U.S. sanctions against Iran -- were to grow as large as 3 million barrels a day, Saudi Arabia would need to tap its oil reserves, he said. Joint work between the Organization of Petroleum Exporting Countries and non-OPEC oil producers needs to continue on a long-term basis, Al-Falih said. He expects the cooperation agreement, initially signed in late 2016, to be extended in December, at a meeting in Vienna. The deal "will allow us to intervene to rebalance the market in any appropriate time from January onward", he said.
Two 'unstable' OPEC nations may decide whether oil takes another run at $100 a barrel - Two OPEC members could soon determine whether oil prices spike back towards $100 a barrel — and those countries are not Saudi Arabia and Iran. With U.S. sanctions choking off Iran's exports and Saudi Arabia hiking output to fill the gap, it's crucial for other major producers to keep crude flowing in the coming months. That's why many analysts are paying close attention to Nigeria and Libya, two nations heading into high stakes elections and where output has swung wildly in recent years. In Nigeria, Africa's largest oil producer, a change of leadership threatens to unsettle the current government's arrangement with militants who wreaked havoc on the country's oil output two years ago. In Libya, it's uncertain whether elections meant to resolve a long-running dispute between rival governments will bring an end to more than four years of civil conflict that has frequently disrupted the nation's crude exports. The situation in the two countries could play a "big role" in determining the price of oil — which is trading near four-year highs — according to Helima Croft, global head of commodity strategy at RBC Capital Markets. "What I always worry about is the stories we should be watching, the unstable suppliers," Croft recently told CNBC's "Worldwide Exchange." RBC has warned clients that 500,000 barrels per day could be periodically lost from the two nations, and elections may bring additional unrest. Half a million bpd represents just half a percent of daily global demand, but a disruption of that scale would have an outsize impact given the anticipated loss of roughly 1 million barrels a day of Iranian crude in the coming months. Iran's exports are shrinking as oil buyers cut off purchases under threat of sanctions from the Trump administration. "If you're going to have Venezuela continuing to decline, a million barrels of Iran off the market, you can't afford to lose another big, major producer," Croft said. Washington is largely depending on Saudi Arabia, Russia and a handful of other producers to keep the market supplied and prevent an oil price spike as Iran's shipments dwindle. Traders recently sent Brent crude to nearly four-year highs above $86 a barrel, as fears that the Saudi alliance will fall short stoked concern about $100 oil.
The IEA's Warning To Oil Producers - In disconcerting news for major oil producing countries, particularly production heavyweights Saudi Arabia and Russia, the Paris-based International Energy Agency (IEA) said on Thursday that the world’s largest oil producing nations are under unprecedented pressure to cut their reliance on energy revenues amid advances in fuel efficiencies and that electric vehicles threaten to undercut demand and erode their finances.The IEA’s special report focuses on energy producing countries where oil and natural gas make up at least one third of all exports and revenues contribute at least one third of total fiscal revenue. The agency said it examined Iraq, Nigeria, Russia, Saudi Arabia, the United Arab Emirates and Venezuela, in particular.The agency, which advises western powers on oil markets strategy and developments, warned that inaction or unsuccessful measures to diversify their revenue sources for these major oil producing nations would compound the risks facing both producer economies and global markets. IEA director Fatih Birol said that “more than at any other point in recent history, I believe there needs to be fundamental change in the development models of those countries.”He added that based on an oil price of $80 a barrel, oil and gas revenues for these countries were on average around $1,800 per capita per year. However, since shale has come into the picture and demand developments such as new technology and efficiencies, that could fall to $1,250 by 2030, a drop my as much as 30 percent.“When we look at these countries, on average they get more than 70 percent of their government revenues from oil and gas,” he said.“Those are under pressure from prices, they are under pressure from the amount of oil they export and under pressure from population growth ... We think it is very different from the past.” The world’s largest oil exporter Saudi Arabia and the world’s largest oil producer Russia have long been vulnerable to over reliance on oil and gas export revenue, while Riyadh is still recovering from a near financial collapse due to a plunge in global oil prices from 2015 to 2017. With oil prices plummeting from over $100 per barrel in mid-2014 to dropping below the $30 price point in January 2016, the kingdom had to enact first time ever and politically unpopular austerity measures as well as issuing its first international bonds to help offset budget deficits.
Hedge funds quit oil as rally reverses- Kemp (Reuters) - Hedge fund managers accelerated their profit-taking in crude oil and refined fuels last week, as confidence in the previous price rally faltered and the market fell. Hedge funds and other money managers cut their combined net long position in the six most important petroleum futures and options contracts by 133 million barrels in the week to Oct. 16. Fund managers have cut their combined position by a total of 187 million barrels in the last three weeks after earlier raising it by 196 million barrels in the previous five weeks. Funds now hold a net position equivalent to 912 million barrels, the lowest since Aug. 21 and before that September 2017, and far below previous peaks of 1.4 billion in April and almost 1.5 billion in January. Liquidation of old long positions again led the change last week (-119 million barrels) while the number of new short positions increased only slightly (+14 million barrels). Portfolio managers reduced their net long positions in Brent (-66 million barrels), NYMEX and ICE WTI (-37 million), U.S. gasoline (-15 million), U.S. heating oil (-6 million) and European gasoil (-9 million). The combined reduction in net long positions was the largest in any one week since the middle of July and before that the middle of February (https://tmsnrt.rs/2OD02A9). As a result, the ratio of bullish long positions to bearish short ones slipped below 8:1, down from a recent high of more than 12:1 at the end of September. While most of the adjustments came from the long side of the market, fund managers boosted short positions in NYMEX WTI by 16 million barrels. The one-week increase in NYMEX WTI short positions was the largest for 52 weeks and took the total number of short positions to its highest level since November 2017.
BP CEO- $80 Oil Is Unhealthy For The World -- Oil prices at $80 a barrel are too high and unhealthy for the world today, Bob Dudley, the chief executive of UK supermajor BP, said on the sidelines of an event on Friday.“There’s a healthy price for oil and energy and I believe that balances producing countries and consuming countries,” Quartz quoted Dudley as saying on the sidelines of the conference One Young World in The Hague. “In my mind, it’s somewhere between $50 and $65 a barrel. The world can live with this,” Dudley noted.Emerging and developing economies like India, South Africa, or Turkey are seeing their highest-ever prices of gasoline because their currencies have rapidly depreciated against the U.S. dollar and because oil prices in dollars are high, BP’s chief executive said.Currently, oil prices are “artificially high” due to Venezuela “defying gravity” and to the U.S. sanctions on Iran, according to Dudley, who said that once those geopolitical events subside, fundamentals will return to rule the market and prices should return back to $60-$65 a barrel.BP won’t be joining any EU special purpose vehicle designed to keep trade with Iran flowing, Dudley stressed, noting that “I think it’s full of risk.”The concerns of BP’s chief executive that $80 oil is unhealthy for the world are shared by major international organizations such as the International Energy Agency (IEA) and the International Monetary Fund (IMF).Expensive energy is back and it is threatening global economic growth, the IEA said in its Oil Market Report last week.Also last week, the IMF slightly downgraded its projection for global growth for this year and next—at 3.7 percent, growth is now expected 0.2 percentage point lower than IMF’s forecast from April this year. The key reasons for the downgrade included trade disputes, geopolitical tensions, and a weaker outlook for emerging economies due to higher oil import bills, among other factors, according to the IMF.
Oil slips below $80 after Saudi pledges rapid output rise - Oil slipped below $80 a barrel on Monday as Saudi Arabia pledged to raise its crude production to a record, two weeks before U.S. sanctions potentially choke off Iranian crude supplies.Benchmark Brent crude oil futures were down 27 cents on the day to $79.51 a barrel by 11:09 a.m. ET (1509 GMT), while U.S. crude futures fell 32 cents to $68.80 a barrel.Several U.S. lawmakers have suggested imposing sanctions on Saudi Arabia over the killing of Saudi journalist Jamal Khashoggi, while the kingdom, the world's largest oil exporter, has pledged to retaliate to any sanctions with "bigger measures."Saudi energy minister Khalid al-Falih told Russia's TASS news agency that his country had no intention of unleashing a 1973-style oil embargo on Western consumers, but rather was focused on raising output to compensate for supply losses elsewhere, such as Iran. Falih said Saudi Arabia would soon raise output to 11 million barrels per day (bpd) from the current 10.7 million. He added that Riyadh had capacity to increase production to 12 million bpd."Oil prices are pointing lower again, with Saudi credit default swaps ballooning ... as the market becomes incredibly uncertain if there will be a shift in power when the crown prince is directly linked with the Khashoggi murder," said Stephen Innes, head of trading at foreign-exchange trader Oanda.Saudi credit default swaps, a form of insurance against a sovereign debt default, have shot to one-year highs, reflecting investor nervousness.U.S. sanctions on Iran's oil sector start on Nov. 4 and analysts believe anything up to 1.5 million bpd in supply could be at risk. "The big unknown is how much Iranian oil will be off the market and we'll know in about a month's time. Then we'll have a clearer picture of what to expect for the first quarter of next year,"
Oil prices shrug off Khashoggi crisis, but US lawmakers and Turkey are turning up the heat on Saudis - The oil market has so far shrugged off rising U.S.-Saudi tensions over the killing of journalist Jamal Khashoggi by agents of the kingdom in Turkey, but the saga appears to be far from over. A chorus of U.S. lawmakers is questioning Saudi Arabia's official story about the murder, raising the prospect of sanctions or a ban on weapons sales to Riyadh. A speech by Turkey's president slated for Tuesday could give the lawmakers fresh ammunition by further undermining the kingdom's narrative. Just one week ago, Saudi Arabia was denying any role in Khashoggi's disappearance and vowing to retaliate against foreign countries that sought to hold the kingdom accountable. The veiled threat raised concerns that the Saudis would exact revenge on the United States and others by cutting oil supply and allowing crude prices to bubble higher. The Trump administration is relying on Saudi Arabia to pump more oil to offset the effect of U.S. sanctions on Iran, OPEC's third biggest producer. By Monday, Riyadh had acknowledged Saudi agents killed Khashoggi in Istanbul, Turkey, and the nation's energy minister was reaffirming the country's commitment to keep the global oil market supplied. Minister Khalid al Falih said the Saudis had no intention of implementing an oil embargo. Oil prices were little changed on Monday, following a 3 percent decline for U.S. crude and a nearly 1 percent drop for international benchmark Brent crude last week. Analysts tell CNBC the market remains unconvinced that the Saudis would take the extraordinary measure of using oil as a tool of political retribution. The Saudis have done a complete 180 since their initial, confrontational statement last week, said John Kilduff, founding partner at energy hedge fund Again Capital. In order for oil prices to react to the scandal, "the Saudis are going to have to get their backs up like they initially did that first weekend," Kilduff said. The Saudis say Khashoggi died in a fight that broke out after agents confronted him in the Saudi consulate in Istanbul. Foreign Minister Adel al-Jubeir told Fox News the operatives overstepped their bounds by killing Khashoggi and then covered up the murder. But on Monday, a spokesman for Turkish President Recep Tayyip Erdogan's political party said the incident was "monstrously planned," ahead of the leader's speech on Tuesday. On Sunday, Erdogan said he would explain Khashoggi's killing. Turkish authorities have reportedly leaked details of the killing, even while the country conducted a joint investigation with Saudi Arabia into the disappearance. The question is whether Erdogan's speech will largely align with the Saudi account of Khashoggi's death or whether the president will shock the market with new information
Oil prices end barely higher as traders monitor U.S.-Saudi tensions- Oil futures ended barely higher Monday as the November U.S. benchmark futures contract expired and traders took stock of U.S.-Saudi tensions over the killing of journalist Jamal Khashoggi. Several U.S. lawmakers from both sides of the aisle called for sanctions on the kingdom over the weekend as Treasury Secretary Steven Mnuchin prepared to visit Saudi Arabia Monday. Mnuchin told reporters that the administration’s relationship with Saudi Arabia was critical to the U.S. plan to thwart Iran’s effort to become the region’s dominant power, according to news reports. Even so, tensions between Saudi Arabia and the international community are “not expected to trigger any meaningful disruption to crude supply and export flows," said Robbie Fraser, commodity analyst at Schneider Electric, in a daily market update. Saudi energy minister, Khalid al-Falih, told Russia’s TASS news agency that there was no intention to repeat the 1973 oil embargo that sent global energy prices soaring. Against that backdrop, West Texas Intermediate crude for November delivery rose 5 cents, or less than 0.1%, to finish at $69.17 a barrel on the New York Mercantile Exchange after spending much of the session trading lower. The expiration of the November contract at the day’s settlement often contributes to volatility. December WTI crude, which is now the front-month contract, added 8 cents or 0.1%, to $69.36. Global benchmark December Brent crude edged up by a nickel, or less than 0.1%, to $79.83 a barrel on the ICE Futures Europe exchange. Saudi Arabia said early Saturday that Khashoggi died in the country’s Istanbul consulate after a fistfight and that 18 Saudi nationals had been detained in connection with the incident. The Saudi account, which came after previous denials that Khashoggi had been harmed, has been met with disbelief by critics. “The Saudi version of events throws up more questions than it answers…Thus the international pressure on the Saudi leadership remains in place, as does the possibility of sanctions,” wrote analysts at Commerzbank, in a note. The market reaction, however, shows traders appear to think there is little chance of such a scenario, the Commerzbank analysts said. But other supply concerns, including a continued fall in Venezuela output and the full implementation of U.S. sanctions on Iranian oil on Nov. 4, remain in place, they said.
Oil falls as Saudi Arabia says it will play 'responsible role' - Oil prices fell on Tuesday after Saudi Arabia said it would play a "responsible role" in energy markets, although sentiment remained nervous ahead of new U.S. sanctions on Iran's crude exports that start next month. Benchmark Brent crude oil fell by $1.91 a barrel, down 2.4 percent, $77.92 by 9:24 (1324 GMT), falling below its 50-day moving average for the first time in two months. U.S. light crude dropped $1.65, or 2.4 percent, to $67.71 a barrel. "Saudi Arabia's energy minister has dealt a fresh heap of bearish fodder onto the energy complex," said PVM Oil analyst Stephen Brennock. U.S. sanctions on Iranian oil begin on Nov. 4 and Washington has said it wants to stop all of Tehran's fuel exports, but other oil producers are pumping more to fill any supply gaps. Saudi Energy Minister Khalid al-Falih told a conference in Riyadh on Tuesday the oil market was in a "good place" and he hoped oil producers would sign a deal in December to extend cooperation to monitor and stabilize the market. "We will decide if there are any disruptions from supply, especially with the Iran sanctions looming," Falih said. "Then we will continue with the mindset we have now, which is to meet any demand that materializes to ensure customers are satisfied." Falih said he would not rule out the possibility that Saudi Arabia would produce between 1 and 2 million barrels per day (bpd) more than current levels in the future. "Saudi Arabia's energy minister has dealt a fresh heap of bearish fodder onto the energy complex,"
Oil market trusts Saudi Arabia for now to temper impact of Iran sanctions --Saudi Arabia, the world's largest oil exporter, has become a source of market uncertainty just as the U.S. is about to curb Iran's oil exports.Yet, oil prices have fallen sharply to five-week lows, and the market does not show any concerns about a potential loss of supply.The Iranian sanctions are expected to remove about 1 million barrels a day from the global market by the end of the year, and some analysts had expected the price of crude to move higher ahead of the Nov. 5 sanctions. That was even before Saudi Arabia became a wild card, with lingering questions about whether its Crown Prince Mohammed bin Salman had any role in the death of journalist Jamal Khashoggi.However, Saudi Arabia still has the confidence of oil markets for now, which have been continuously reassured by Saudi Energy Minister Khalid al-Falih that Saudi will turn on the pumps to make up for less Iranian crude. Al-Falih said on Monday that Saudi can raise its output to 11 million barrels a day and that it will not use oil as a weapon. Saudi output has already increased to about 10.7 million barrels a day."There is no intention," the energy minister told Russia's TASS news agency when asked whether there could be a replay of the 1973-style oil embargo.On Tuesday, the energy minister told the kingdom's major investment conference that OPEC is in "pump as much as you can mode.""We will meet any demand that materializes," said Al-Falih, according to a Bloomberg report."When Khalid al-Falih comes out and says we're going to do 11 million barrels a day, he maintains a lot of credibility with the market," said Helima Croft, RBC head of commodities strategy. "If he changed his tune, the market would take that threat seriously." Another factor holding down oil prices is the fall off in global oil demand. Analysts say for now, trade wars with China and a stronger dollar are working in favor of lower prices, by dampening emerging market demand.
Oil Prices In Free Fall As Iran Fears Fade -- Brent dipped below $80 per barrel last week and crashed even further in early trading on Tuesday. Iran sanctions still loom, but oil prices are trending downwards at a rapid rate. “[T]he latest withdrawal of speculators and the negative price response since yesterday indicate that the market is not nearly as nervous as it was just a few weeks ago. One role in this is doubtless played by the fact that the oil market looks set to ease noticeably in 2019,” Commerzbank said in a note. Halliburton reported that its North American operations are slowing down, a sign that pipeline constraints are taking a toll on the shale industry. Earnings in the third quarter for the oilfield services company were 50 cents per share, up 19 percent from a year earlier, but down from 58 cents per share in the second quarter. The fourth quarter could be even worse. Pipeline bottlenecks are hurting activity, but “our customers’ budget exhaustion” also led to a weakening of demand for its services. However, Halliburton says earnings will rebound strongly next year. Saudi oil minister Khalid al-Falih said that Saudi Arabia and Russia will forge forward to institutionalize the OPEC+ partnership, likely moving to create a Secretariat based in Vienna. The group’s coordination would not have an end date, nor would it target a specific production level. The comments, made in an interview with TASS, suggest the Saudi-Russian partnership could supplant OPEC in terms of importance, even if not in an official way. Al-Falih also tried to reassure the markets that Saudi Arabia would not use its oil production as a weapon in retaliation to any punishment from the U.S. related to the death of journalist Jamal Khashoggi. . Saudi Arabia has long maintained that it can produce 12 mb/d, implying spare capacity of around 1.3 mb/d at this point. Saudi Aramco’s CEO Amin Nasser said on Monday that it would only take 3 months to ramp up to that production rate. Saudi Arabia and Kuwait are still at an impasse on the territorial dispute over the Neutral Zone oil fields, which total around 500,000 bpd of capacity. Chevron said it stands ready to restart production at the Wafra oil field in the Neutral Zone if the negotiations between Saudi Arabia and Kuwait reached a breakthrough. The fields have taken on added importance with the oil market tightening, as the market turns its attention to available spare capacity.
Oil prices fall as Saudi Arabia pledges to play 'responsible role' in market (Reuters) - Oil prices fell on Tuesday after Saudi Arabia said it would play a "responsible role" in energy markets, although sentiment remained nervous in the run-up to U.S. sanctions against Iran's crude exports that start next month. Front-month Brent crude oil futures were at $79.33 a barrel at 0657 GMT, down 50 cents, or 0.6 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $69.14 a barrel, dropping 22 cents, or 0.3 percent, from their last settlement. U.S. sanctions against Iran's oil exports are due to kick off on Nov. 4, and Washington is putting pressure on countries to cut their imports of Iranian crude. South Korea's crude oil imports from Iran fell to zero in September from a year earlier, data from state-run Korea National Oil Corp (KNOC) showed on Tuesday. Top crude oil exporter Saudi Arabia has pledged to keep markets supplied despite its increasing isolation over the killing of Saudi journalist Jamal Khashoggi, and there are signs that crude oil supply from the Middle East is increasing. There has been concern that just as markets tighten with the start of the U.S. sanctions against Iran, Saudi Arabia could cut crude supply in retaliation for potential sanctions against it over the Khashoggi killing. Trying to dismiss such worries, Saudi Energy Minister Khalid al-Falih said on Monday that "there is no intention" for such action, and that Saudi Arabia would play a "constructive and responsible role" in world energy markets. Peter Kiernan, lead energy analyst at the Economist Intelligence Unit in Singapore, said a Saudi cutback would be self-defeating as "Saudi Arabia would ... risk losing market share to other exporters while losing its reputation as a stable actor in the market."
Crude Oil Down Four Percent - Front-month crude oil futures each lost more than 4 percent Tuesday. The December West Texas Intermediate (WTI) crude oil futures price fell $2.93 Tuesday to settle at $66.43 a barrel. The intraday range for the WTI spanned from a high of $69.66 down to $65.74. Brent crude oil for December delivery declined to a greater extent Tuesday, losing $3.39 to settle at $76.44 a barrel. Delia Morris, Houston-based commodity pricing analyst, attributes the down day to traders’ concerns that the market appears oversupplied amid slackening demand. “Oil prices fell sharply in intraday trading following the announcement from Saudi Energy Minister Khalid Al-Falih that the Kingdom would look to increase its current crude output from around 10.7 million barrels per day (MMbpd) to up to 11 MMbpd,” said Morris. “Earlier in the month, oil prices had hit multi-year highs off fears that the market was poised for a severe under-supply situation once U.S. sanctions on Iran would take effect Nov. 4.” Saudi Arabia’s pledge to raise oil production appears to be designed to allay other fears, Morris noted. “The announcement from Saudi Arabia – apparently, in a move to be seen as a stabilizing force in global markets – comes in contrast to more pugnacious rhetoric, which had pointed toward a possible production pullback, following the murder of Saudi journalist (Jamal) Khashoggi,” said Morris. Like crude oil, reformulated gasoline (RBOB) ended the day lower. The November RBOB contract price settled at $1.84 Tuesday, translating into a 7-cent drop. The November Henry Hub natural gas contract price bucked the trend among the benchmarks that Rigzone tracks. Gas futures posted a 7-cent gain to end the day at $3.21.
WTI Slumps Back To A $65 Handle After Huge Crude Build - Having rebounded modestly back off a $65 handle intraday after OPEC/Saudi production comments, all eyes are now on API tonight which printed a huge 9.88mm barrel inventory build (biggest since Feb 2017) sending WTI back to a $65 handle. Saudi Energy Minister Khalid Al-Falih said OPEC and its allies are in “produce as much as you can mode." API:
- Crude +9.88mm (+3.7mm exp) - biggest since Feb 2017
- Cushing +971k (+1.5mm exp)
- Gasoline -2.8mm
- Distillates -2.44mm
After last week's surprise crude build (for the 4th week in a row), API has some catch up to do to DOE data and catch up it did reporting a massive 9.88mm barrel build... WTI was hovering around $66.30 ahead of the API data and dropped back to a $65 handle on the print..."There are several reasons for the slide in crude oil, chief among them is it’s a risk-off day across all financial markets," said Bob Yawger, director of the futures division at Mizuho Securities USA. "You’re seeing people flee the commodities and equities space to most likely put their money in safe haven."
Oil extends declines as Saudi Arabia commits to meet demand --Oil slipped to around $76 a barrel on Wednesday, paring losses after hitting its lowest since late August, pressured by concern that demand is weakening and supply ample even as U.S. sanctions loom on oil exporter Iran.In a sign supply is plentiful, industry group the American Petroleum Institute said on Tuesday U.S. crude stocks had risen by 9.9 million barrels - more than forecast. The U.S. government's supply report is due at 1430 GMT.Brent crude, the global benchmark, was down 10 cents to $76.34 a barrel. It fell earlier in the day to $75.11, the lowest since Aug. 24. U.S. crude was unchanged at $66.43."Rising oil inventories and growing petro-nations' output calm the supply fears related to the Iran oil embargo," said Norbert Ruecker, head of macro and commodity research at Swiss bank Julius Baer.Crude fell sharply in the previous session, with Brent closing down 4.3 percent."This price movement comes as little surprise with attention now clearly being focused on the weakening economic situation and gloomy demand outlook," analysts at JBC Energy said in a report. A sell-off in equities due to concern about the economic outlook also weighed on crude on Tuesday. Forecasters such as the International Energy Agency already expect slower oil-demand growth for 2019 due to a slowing economy.
Analysis: Middle East crude oil complex nosedives on bearish sentiment — Market structure and flat prices came down significantly in the Middle East crude oil complex Wednesday, amid a general sell-off in global crude oil markets, traders told S&P Global Platts. At 4:30 pm Singapore time (0830 GMT), the outright price for December cash Dubai, the most prompt month trading in October, settled at $74.40/b, down 4.42% on the day from $77.84/b. This is the largest day-on-day move in the flat price in about four months. Previously cash Dubai M1 moved 4.55% lower on June 18 to $70.94/b. Prices followed global crude sentiment lower, with a general bearish tune to oil markets on Wednesday, traders said. "I think it's just a general downtrend; everything is coming off," said a Singapore-based crude oil trader. A second trader said: "All risk off today it seems." The plunge in price activity pulled the market structure lower across the board. The spread between cash Dubai M1 and M3 moved to a backwardation of 68 cents/b from $1.09/b Tuesday, Platts data showed at the close of business in Singapore Wednesday. The structure had briefly dipped below $1/b earlier this month, when it was assessed at 95 cents/b on October 18, but has otherwise stayed firmly above that level since September. It was previously lower than 68 cents/b on August 29, at 61 cents/b. The Dubai M1-M3 structure is tracked by traders of Middle East crude grades as an indication of spot market trading sentiment. At 68 cents/b the structure remains in backwardation, implying higher demand for prompt cargoes than for future ones, but with relatively less urgency than if it was above $1/b. Despite the risk off sentiment in global crude oil benchmarks, the December Oman futures contract traded relatively higher Wednesday on the Dubai Mercantile Exchange, Platts data showed.
Oil Holds Loss Near Lowest Level in Over 2 Months -- Oil held losses near the lowest level in more than two months as Saudi Arabia pledged to offset any supply shortfalls and as global investors shunned risk assets. Futures in New York were little changed on Wednesday. Prices retreated about 4 percent on Tuesday following a tumble in American equities, which later pared losses. The Organization of Petroleum Exporting Countries and its allies are in a “produce as much as you can mode,” said Saudi Energy Minister Khalid Al-Falih. An industry report that points to rising U.S. crude inventories added to concerns over excessive supply. Oil has slumped about 13 percent after reaching a four-year high earlier this month as U.S. crude stockpiles continue to grow at a time when an ongoing trade dispute between China and America threatens to hurt global growth that underpins energy demand. Still, traders are concerned about whether OPEC and its partners can fill supply losses from Iran as renewed U.S. sanctions on the Islamic republic are set to take effect in November. Al-Falih’s remarks “signaled they could proactively act and prevent any supply shortages, contributing to a decline in oil prices,” Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp., said by phone from Tokyo. “In addition, as wider financial markets are becoming volatile, risk-off mood is prevailing in the oil market.” West Texas Intermediate for December delivery fell as much as 33 cents to $66.10 a barrel on the New York Mercantile Exchange, and traded at $66.56 at 3:18 p.m. in Tokyo. The contract slumped $2.93 to $66.43 on Tuesday. Total volume traded was about 4 percent above the 100-day average. Brent for December settlement traded at $76.75 a barrel on the London-based ICE Futures Europe exchange, up 31 cents. The contract dropped 4.3 percent to $76.44 on Tuesday. The global benchmark crude traded at a premium of $10.19 to WTI. Saudi Arabia can boost its crude production from 10.7 million barrels a day, near an all-time high, to counter supply losses from Iran, Saudi Minister Al-Falih said at a conference in Riyadh. Meanwhile, Russia suggested its current output level is higher than September.
WTI Settles a Tad Higher - WTI crude oil futures contract reversed its recent downward course Wednesday – at least to a small degree. The West Texas Intermediate (WTI) crude oil futures contract reversed its recent downward course Wednesday – at least to a small degree. The December WTI contract price picked up 39 cents during midweek trading, settling at $66.82 a barrel. The December Brent price, meanwhile, lost 27 cents to settle at $76.17. Movements for both benchmarks was considerably less volatile Wednesday compared to Tuesday, when each contract price shed more than 4 percent. “December WTI crude and Brent crude tested the major support levels,” said Jerry Rafferty, president and CEO of Rockville Center, N.Y.-based Rafferty Commodities Group, Inc., referring to the $66.10 and $75.47 support levels, respectively. “(B)oth markets have moved higher after testing these support levels. Should the market re-approach these levels we would view that as another buying opportunity.” Reformulated gasoline (RBOB) for November delivery ended the day lower, falling about a penny and a half to settle at $1.82 a gallon. Also losing ground Wednesday was front-month Henry Hub natural gas, which declined by a nickel to settle at $3.17.
Oil Resumes Slide -- Oil fell near the lowest level in two months as a rout in U.S. stocks prompted investors to flee risk assets and as American crude inventories continued to rise. Futures in New York dropped as much as 1.2 percent after a 0.6 percent gain on Wednesday. Asia’s main equity gauge entered a bear market after U.S. stocks erased all of this year’s gains on Wednesday. While the stock-market rout spread to risk assets including oil and copper, safe-havens like gold gained. Meanwhile, a government report showed U.S. crude stockpiles climbed more than expected, rising for a fifth week. Oil is poised for the worst monthly decline since July 2016 as ongoing trade tensions stoke concerns over global growth that drives energy demand at a time when American crude stockpiles are increasing. Traders are also closely watching how much Iranian oil will be removed from the market by U.S. sanctions and whether the Organization of Petroleum Exporting Countries and its allies can fill the gap. “Sell-off in equity markets raised concerns over oil demand, contributing to a decline in prices,” said Satoru Yoshida, a commodity analyst at Rakuten Securities Inc. in Tokyo. In addition, the gain in U.S. crude inventories is adding to bearish sentiment, he added. West Texas Intermediate for December delivery declined as much as 83 cents to $65.99 a barrel on the New York Mercantile Exchange, and traded at $66.43 at 7:57 a.m. in London. The contract rose 39 cents to $66.82 on Wednesday. Total volume traded was about 5 percent below the 100-day average. Brent for December settlement fell 41 cents to $75.76 a barrel on the London-based ICE Futures Europe exchange. The contract dropped 27 cents to $76.17 on Wednesday. The global benchmark traded at a $9.32 premium to WTI. In the U.S., nationwide inventories climbed by 6.35 million barrels last week for the longest streak of gains since March 2017, the Energy Information Administration reported on Wednesday. That compares with the median 3.7 million-barrel increase forecast in a Bloomberg survey. Meanwhile, American gasoline stockpiles declined by 4.83 million barrels and distillate inventories dropped for a fifth straight week, according to EIA data. Refinery runs in the country remained low due to seasonal maintenance.
Oil Under Threat As Global Economy Struggles - Warning signs about the slowing of the global economy continue to crop up, and market jitters are taking the steam out of oil prices.U.S. corporate earnings are no longer sky-high, with a range of factors starting to cut into margins. The U.S.-China trade war has not made headlines in the same way it did a few weeks and months ago, but the reality is that the impact of tariffs is only growing as costs work their way through supply chains.“These trade tensions are coming home to roost and they are impacting the fundamentals of the market,” Tally Leger, equity strategist at OppenheimerFunds, told Reuters. “Thanks to trade tariffs we are facing the headwinds of a stronger dollar, higher oil prices, and rising interest rates.”This week, a slew of disappointing earnings came in. Caterpillar said that tariffs cost the company $40 million in the third quarter, and its share price fell roughly 7.6 percent after it reported its figures. Poor figures also came from 3M and Harley-Davidson, prompting selloffs in their stocks as well. 3M said that tariffs could cost the company $20 million this year, a figure that will balloon to $100 million next year. The results spooked the markets, dragging down equities more broadly. The S&P machinery index was down more than 4 percent in the last two days.Evidence of a slowdown in China is also becoming apparent. 3M saw sales dip in China, as did PPG Industries, which makes paint and coatings. “We see other signs of slowing in China; the automotive build rates are down significantly and that has a knock-on effect,” Michael Roman, CEO of 3M, said. Sales of cars in China fell 12 percent in September from a year earlier. A strong dollar is another source of trouble for the global economy. Harley-Davidson said that international sales of its motorcycles were hit by a strong greenback. The Federal Reserve has hiked interest rates multiple times in the last year, and is expected to continue on that course.The array of problems raise the prospect of peak industrial earnings. Strong GDP figures and a massive corporate tax cut temporarily juiced profits, and earnings could fall to more pedestrian levels, particularly as costs start to creep up. Some analysts think the fears of weaker earnings are overblown, but investors have clearly grown worried about the trajectory of the U.S. economy. And it has been the U.S. that has stood out while much of the rest of the world already began to lose steam. The U.S. cannot defy gravity forever.
Oil Prices Fall Amid Global Stocks Sell-off - Oil prices traded lower on Thursday amid sharp selloffs in global stock markets. Crude Oil WTI Futures for December delivery lost 0.7% to trade at $66.38 per barrel by 1:38 AM ET on the New York Mercantile Exchange. Brent Oil Futures for December delivery traded 0.7% lower to $75.72 a barrel on London’s Intercontinental Exchange. "Oil prices fell under extreme selling pressure ... as the steep selloff across stock markets fueled fears over a possible drop in oil demand growth," said Lukman Otunuga, analyst at futures brokerage FXTM. The U.S. stock markets closed with a slump Wednesday evening, with the S&P 500 dropping 3.09% and Nasdaq falling 4.43%. The nosedive prompted Asian markets to tumble Thursday morning, with Japan’s Nikkei down more than 3%. Elsewhere, International Energy Agency director Fatih Birol said the world's biggest oil and gas producers are under more pressure to reduce their reliance on energy revenues amid advancement in fuel efficiencies and electric vehicles. "More than at any other point in recent history, I believe there needs to be fundamental change in the development models of those countries," IEA director Fatih Birol said. Birol said oil and gas revenues for these countries could potentially fall to $1,250 by 2030, a 30% drop. "When we look at these countries, on average they get more than 70% of their government revenues from oil and gas," he said. "Those are under pressure from prices, they are under pressure from the amount of oil they export and under pressure from population growth ... We think it is very different from the past."
Oil prices fall one percent amid global stock market slump -- Oil prices stabilized on Thursday, bouncing back from an early sell-off after Asian and European stock markets plunged in the wake of Wall Street's biggest daily decline since 2011. Brent crude oil fell 82 cents, or 1.1 percent, to a low of $75.35 a barrel before rallying to around $76.94, up 77 cents. The global benchmark has lost more than $10 a barrel since hitting a high of $86.74 on Oct. 3. U.S. light crude settled up 51 cents, or 0.8 percent at $67.33 after touching an intraday low of $65.99. The turnaround followed a rebound in U.S. stocks, with the three major indexes surging more than 1 percent each.City Index market analyst Fiona Cincotta said factors outside the oil market were now leading sentiment."Fear and anxiety about the global economy are currently playing a bigger role in the oil price than the actual fundamentals of supply and demand," Cincotta said.Financial markets have been hit hard by a range of worries, including the U.S.-China trade war, a rout in emerging market currencies, rising borrowing costs and bond yields, as well as economic concerns in Italy.Weakness is also starting to show in container and dry-bulk rates, both of which have declined significantly in October, pointing to a slowdown in global trade.Many investors are concerned about rising oil inventories as supply exceeds demand in some key markets, including the United States. U.S. crude oil production has risen steadily over the past decade and hit a record high of 11.2 million barrels per day (bpd) this month.U.S. commercial crude stocks rose for a fifth consecutive week last week, increasing 6.3 million barrels to 422.79 million barrels, the Energy Information Administration said.Saudi Arabia's OPEC governor said on Thursday the oil market could face oversupply in the fourth quarter."The market in the fourth quarter could be shifting towards an oversupply situation as evidenced by rising inventories over the past few weeks," Adeeb Al-Aama told Reuters. Saudi Energy Minister Khalid Al-Falih said on Thursday that there could be a need for intervention to reduce oil stockpiles after increases in recent months.
Oil Markets Gripped By Supply Glut Fears - Fears of a supply glut have gripped oil markets, sending oil prices down for the third consecutive week and forcing OPEC to consider a production reduction. Saudi Arabia and Russia agreed to extend their pact to manage oil production levels, according to comments from Saudi oil minister Khalid al-Falih. “Saudi Arabia and Russia will interfere together, along with the heads of the other producing states, to prevent the market from falling out of balance,” he said. This echoes his interview earlier this week in which he said he was looking to formalize a partnership with Russia within an official OPEC+ architecture. The fears of $100 oil seem long gone. OPEC suggested that it might need to cut output in 2019 to avoid a return of the supply glut. There are some mixed messages coming from the cartel. Earlier this week, Saudi oil minister Khalid al-Falih said that the group was in “produce as much as you can mode.” But a technical committee offering recommendations to the OPEC+ group said that it would prepare “options” for production plans in 2019 to avoid a glut. Even as OPEC wonders whether or not it should cut output, the IEA pressed the cartel to increase production. “Global oil markets are going through a very sensitive period -- global economic growth as well,” IEA Executive Director Fatih Birol said in a Bloomberg interview on Thursday. “If the oil producers care about the health of the growth of the global economy, which I believe they do, they should take the steps to further comfort the market.” The head of Libya’s National Oil Corp., Mustafa Sanalla, said that Libya is hoping to reach 1.6 mb/d by the end of next year, a level not seen since the days of dictator Muammar Qaddafi. Libya’s production has been volatile since 2011, but seems to be on the upswing, having recently topped 1.25 mb/d. “We’ve put together a plan to boost field production, including pipeline maintenance and addition of new pipelines,” Sanalla said. “We aim to reach 1.6 million barrels a day by the end of next year, and this level can increase.”
Oil Holds Steady As Rig Count Stagnates - Baker Hughes reported a 1-rig increase for oil and gas in the United States this week, bringing the total number of active oil and gas drilling rigs to 1,068 according to the report, with the number of active oil rigs increasing by 2 to reach 875 and the number of gas rigs decreasing by 1 to reach 193. The oil and gas rig count is now 159 up from this time last year.Crude oil rallied somewhat on Friday, but not enough to erase three weeks of bearish activity in the industry that stripped roughly $10 off barrel prices. The slight uptick on Friday came as confused markets wrestle with two opposing ideas: the narrative that paints the oil market as having oil supply troubles as the Iranian sanctions loom, and poor equities performance yesterday combined with the narrative that future oil demand may not be as robust as previously thought.At 12:18pm. EDT on Friday, volatile WTI crude prices were up 0.39% (+$0.26) at $67.59. Brent crude was up 0.64% (+$0.49) at $77.37 per barrel. While up on the day, WTI is still down almost $10 per barrel from early October. Canada’s oil and gas rigs for the week increased by 9 rigs this week after losing 4 rigs last week, bringing its total oil and gas rig count to 200, which is 9 rigs more than this time last year, with a 1-rig increase for oil rigs, and an 8-rig increase for gas rigs.EIA’s estimates for US production for the week ending October 19 were for an average of 10.9 million bpd for the second week in a row, off the forever high of 11.2 million bpd for the week of October 5.By 1:09pm EDT, WTI was trading up 0.40% (+$0.27) at $67.60. Brent crude was trading up 0.70% (+$0.54) at $77.42 per barrel.
US crude posts third straight weekly loss, settling at $67.59, as equities slump - Oil prices were higher on Friday, supported by expectations that sanctions on Iran would tighten supplies, but crude futures still dropped for a third straight week as a slump in stock markets and concerns about trade wars clouded the fuel demand outlook.U.S. crude ended Friday's session 26 cents higher at $67.58, posting a loss of 2.2 percent loss this week. The contract rose in four out of five sessions this week, but the gains were not enough to offset a nearly $3 drop on Tuesday.Brent crude oil was trading around $77.61 a barrel, up 72 cents, by 2:29 p.m. ET , after earlier falling more than $1 to a low of $75.77. The contract is on course for a weekly loss of nearly 3 percent. It has fallen by more than $10 in the last three weeks.Supporting prices on Friday, Iraq will stop trucking crude oil from its northern Kirkuk oil field to Iran in November to comply with U.S. sanctions, two sources familiar with Iraqi oil export operations said on Friday."The market has to wake up to the fact that Iranian sanctions are happening Nov. 4. That's just a couple weeks away," said Phil Flynn, an oil market analyst at Price Futures Group in Chicago.The market for months has weighed concern surrounding potential supply shortages from U.S. sanctions on Iran, due to come into force Nov. 4. Washington has said it wants to reduce Iranian oil sales to zero, although this looks unlikely.Many buyers, including Iran's biggest customer, China, appear to be falling in line, forcing Tehran to store unsold oil on tankers in the hope it can sell the crude once sanctions are lifted.However, a global collapse in equities has roiled oil markets this week. The N asdaq Composite confirmed a correction this week, while the S&P 500 and the Dow Jones Industrial Average erased their gains for the year.
US crude tumbles 12% from high as oil bulls retreat -- Crude oil futures posted their third consecutive weekly loss on Friday as the bulls that pushed oil prices to nearly four-year highs head into retreat. U.S. West Texas Intermediate crude ended this week down 2.2 percent and has now tumbled about 12 percent from its recent high of $86.74 on Oct. 3. Brent crude, the international benchmark for oil prices, fell 2.7 percent this week and is down 10.5 percent from its Oct. 3 high of $86.74.Crude futures have gotten swept up in a wider stock market rout this month, with most of the losses for oil coinciding with a sell-off in equities. But the narrative driving oil prices has also flipped in recent weeks, and traders are closing out bullish bets on the commodity. At the start of October, oil prices were rising on signs that U.S. sanctions are shrinking Iran's crude exports faster than anticipated, potentially leaving the world with a shortage of oil. The sanctions are expected to cut crude exports from Iran, OPEC's third-biggest oil producer, by about 1 million barrels per day.But concerns about faltering demand and rising output from OPEC and Russia now have traders focused on potential oversupply. "The narrative about the supply crunch with Iran got offset by this burst of supply that came on the market from OPEC and Russia and Saudi Arabia," Saudi Arabia says it hiked output to 10.7 million barrels per day in October and will increase production to 11 million bpd next month. Meanwhile, Russia says it pumped at a post-Soviet-era peak of 11.36 million bpd in September. The 15-nation OPEC group also managed to increase its collective output last month, despite supply declines in Iran and Venezuela.
OPEC, allies may need to change course as oil inventories rise: panel (Reuters) - OPEC signaled on Thursday it may have to return to oil production cuts as global inventories rise, in a statement that may further sour relations with U.S. President Donald Trump. The president has repeatedly lashed out at the Organization of the Petroleum Exporting Countries, saying it is not supplying enough oil. OPEC, plus Russia and other allied non-OPEC producers agreed to pump more in June. An OPEC and non-OPEC ministerial panel concluded that supply is “very comfortable” compared to demand and warned producers may need a change of tack because of rising inventories and economic uncertainties. “The committee, however, expressed concerns about rising inventories in recent weeks and also noted looming macroeconomic uncertainties which may require changing course,” a statement issued by OPEC said. Brent crude oil, the global benchmark, has lost about $10 a barrel since hitting a four-year high of $86.74 on Oct. 3, on signs of ample supply even as U.S. sanctions on Iran aimed at cutting the OPEC member’s oil exports loom. For now, producers are making progress in increasing production in line with the June agreement. OPEC and its partners agreed in June to lift oil supplies so that compliance with output curbs in place since January 2017 falls to 100 percent, from closer to 150 percent because of declining production in some countries. Countries complied with 111 percent of pledged supply curbs in September, the statement said, meaning production increased from August when adherence was 129 percent. The panel, called the Joint Ministerial Monitoring Committee, can make recommendations but does not set policy. OPEC and its allies hold their next policy meeting in December. Forecasters, including the International Energy Agency, expect slower growth in global oil demand next year and rising supplies from outside OPEC, which could further increase inventories if OPEC keeps output at the same level. The ministerial panel asked its technical group, called the Joint Technical Committee, to “continue to study the 2019 outlook and present options on 2019 production levels to prevent re-emergence of a market imbalance.”
Crown Prince All Smiles As Saudis Sign $50 Billion In Deals At Davos In The Desert -- Even as lawmakers from the US, to Germany and Canada have weighed some form of economic punishment against Saudi Arabia - be it sanctions, an arms sale prohibition, or both - over the state's involvement in the murder of dissident journalist Jamal Khashoggi, Saudi Crown Prince Mohammad bin Salman was reportedly "all smiles" during the opening day of his second annual Future Investment Initiative, according to a Bloomberg report. The crown prince made his unexpected appearance toward the end of the day, drawing a crowd as people craned to catch a glimpse or take a photo. He sat next to King Abdullah of Jordan and they left together soon after, followed by onlookers and without the prince commenting publicly. Prince Mohammed is due to speak on Wednesday, organizers later announced. It was not clear if he would respond to Erdogan’s accusations, which came closer than ever to laying the blame for Khashoggi’s death at the ambitious young leader’s feet. And why wouldn't he be? Just over three weeks after Khashoggi's killing and purported dismemberment, calls for the Crown Prince's ouster have already subsided. Any hope that the royal family would act to oust him as the kingdom's de facto ruler disappeared when his father, King Salman, announced that MbS would be charged with leading a commission to oversee the restructuring of the Saudi intelligence service. And even as CEOs from Wall Street, Silicon Valley and global industrial giants decided to skip MbS's "Davos in the Desert", their top dealmakers, tucked away from the public glare, were there to represent in their stead and keep the money flowing. Adding to the irony, MbS received a standing ovation from a crowd of 3,000 dignitaries and investors, including hundreds of Saudi citizens.
Jamal Khashoggi case: All the latest updates - Saudi Arabia has admitted Jamal Khashoggi was killed inside its consulate in the Turkish city of Istanbul.Khashoggi - a Saudi writer, American resident, and Washington Post columnist - entered the building on October 2 to obtain documentation certifying he had divorced his ex-wife. He never came out.After two weeks of repeated denials that it had anything to do with his disappearance, the kingdom admitted on Saturday the journalist died in a "fist-fight" inside the consulate. Saudi King Salman and Crown Prince Mohammed bin Salman both called Khashoggi's son, Salah, to express their condolences, the Saudi Press Agency reported.Saudi Arabia has said Khashoggi, 59, died in a fight inside its Istanbul consulate - after two weeks of denials that it had anything to do with his disappearance.Khashoggi's son thanked the king and the crown prince, the report said.Foreign Minister Adel al-Jubeir also extended condolences to Khashoggi's family."This is a terrible mistake. This is a terrible tragedy. Our condolences go out to them. We feel their pain," Jubeir told US broacaster Fox. "Unfortunately, a huge and grave mistake was made and I assure them that those responsible will be held accountable for this." Some observers have speculated the powerful crown prince ordered the killing of Khashoggi - who had criticised bin Salman - but the Saudi leadership has denied any involvement.
Saudi official gives new version of Khashoggi killing: report - A senior Saudi Arabian government official has laid out a new version of the killing of journalist Jamal Khashoggi inside the Saudi consulate in Istanbul, that contradicts previous explanations on key points.The latest account, provided by a Saudi official who requested anonymity to the Reuters news agency, includes details on how the team of 15 Saudi nationals sent to confront Khashoggi on October 2 threatened to drug and kidnap the journalist and then killed him in a chokehold when he resisted.A member of the team then dressed in Khashoggi's clothes to make it appear as if he had left the consulate, the official said.After denying any involvement in the disappearance of Khashoggi, 59, for more than two weeks, Saudi Arabia on Saturday morning said he had died in a fistfight at the consulate.An hour after the first official statement, another Saudi official attributed the death to a chokehold, which the senior official reiterated to Reuters.Turkish officials suspect the body of Khashoggi, a Washington Post columnist and critic of powerful Crown Prince Mohammed bin Salman, was cut up but the Saudi official said it was rolled up in a rug and given to a "local cooperator" for disposal.Asked about allegations that Khashoggi had been tortured and beheaded, the official said preliminary results of the Saudi investigation did not suggest that to be the case. The Saudi official presented what he said were Saudi internal intelligence documents which appeared to show the initiative to bring back dissidents, as well as the specific one involving Khashoggi. He also showed testimony from those involved in what he described as the 15-man team's cover-up, and the initial results of an internal probe.He did not provide proof to substantiate the findings of the investigation and the other evidence. This narrative is the latest Saudi account that has changed multiple times.
Saudis Shocked by Official Flip-Flop on Khashoggi -- Saudi Arabia’s about-face admission that journalist and government critic Jamal Khashoggi was killed inside its consulate in Istanbul earlier this month sent shockwaves through a country where many had believed -- and defended -- initial official claims that the authorities had nothing to do with it.“A very sad day for this nation, to see what the country had descended into,” said one Saudi man, who spoke on condition of anonymity to criticize a government that tolerates virtually no dissent. “No country is perfect, but used to be proud that the country had a certain morality that aligned with Arabian values. We lost that forever unfortunately.” The Saudi government admitted early Saturday that Khashoggi was killed on Oct. 2 after “discussions” turned violent in the diplomatic mission where he’d come for documents for his wedding. Khashoggi died after he was placed in a choke hold, according to a person with knowledge of the Saudi probe. King Salman removed a top royal adviser, and prosecutors said 18 others had been detained in the case.The moves were an abrupt reversal from previous professions of innocence. In an interview with Bloomberg News the day after Khashoggi vanished, Crown prince Mohammed bin Salman said the Washington Post contributor left the premises unscathed. Under mounting international pressure, King Salman ordered an internal investigation last week. While U.S. President Donald Trump welcomed Saturday’s moves as “a good first step,” the admission met widespread skepticism on Capitol Hill and in other capitals. Turkish media have cited unnamed officials as saying they have audio recordings and other evidence Khashoggi was tortured and dismembered by Saudi agents within minutes of arriving at the consulate. The crisis has revealed vulnerabilities for 33-year-old prince Mohammed as he faces the strongest questioning of his rule among skeptics abroad since he was appointed crown prince last year. The adviser the king removed Saturday, Saud al-Qahtani, was a prominent aide to the prince.
Scandal Over Dead Journalist Jolts Heir to Saudi Throne -- Saudi Arabia’s elderly king sent a strong signal this weekend that his handpicked heir, 33-year-old Crown Prince Mohammed bin Salman, remains in good standing despite the gruesome killing of a prominent government critic that many at home and abroad suspect he set in motion.Yet the events of the past few weeks have sharpened differences between the prince and royal family members who were beginning to question his judgment and temperament. And there is no sign that the global backlash over the killing will abate soon, testing Saudi Arabia’s modernization of its economy and its relationship with its most important ally, the U.S.On Saturday, King Salman granted Prince Mohammed new powers over the country’s intelligence bodies, to pair with his sweeping authority over Saudi Arabia’s economy and defense. That same day, the Saudi attorney general effectively exonerated the crown prince, blaming the death of journalist Jamal Khashoggi on “a brawl and physical altercation” in the Saudi consulate in Istanbul. Speaking after a political rally in Nevada on Saturday, President Donald Trump told reporters he wasn’t satisfied with the initial results of the Saudi investigation into the killing the Istanbul consulate. “I’m not satisfied until we find the answer,” Mr. Trump said, adding that he would consider sanctions, but not on military sales. He added that “it’s possible” the crown prince didn’t know about the killing, and that he was still looking to speak with him. People in Prince Mohammed’s camp say his power internally remains largely unchecked, and there is no indication the Saudi monarch is preparing to remove his son. The prospect of a family member pushing him aside is negligible, advisers say, largely because Prince Mohammed has solidified his power base by removing potential rivals.In the kingdom itself, a number of Saudi royals have tried to reach out to King Salman to discuss the crisis, but have been blocked by associates of the crown prince, said two members of the royal family. They have been secretly meeting in small groups to discuss the issue, they said.Among other things, some of these people are challenging the official version of what happened to Mr. Khashoggi. Prince Khalid al Faisal, an envoy of King Salman who was dispatched to Ankara earlier this month, had access to a short audio recording that offers evidence that Mr. Khashoggi was drugged, killed and dismembered minutes after walking into the consulate, these two members say. “The audio does not have this nonsense about a fight that broke after an argument,” said one royal member. “This is not what Khalid told the king and his friends. This is absolutely rubbish.”
Saudi Crown Prince Spoke to Khashoggi by Phone Moments Before He Was Killed — In the latest bombshell report involving the Khashoggi murder, Saudi Crown Prince Mohammed bin Salman reportedly spoke on the phone with journalist Jamal Khashoggi moments before he was murdered in the Saudi consulate in Istanbul. Turkish pro-government daily Yeni Safak disclosed the new alleged details of the case in a report on Sunday, contradicting claims by Saudi authorities that Prince Mohammed played no part in Khashoggi’s murder. “Khashoggi was detained by the Saudi team inside the consulate building. Then Prince Mohammed contacted Khashoggi by phone and tried to convince him to return to Riyadh,” the report said. “Khashoggi refused Prince Mohammed’s offer out of fear he would be arrested and killed if he returned. The assassination team then killed Khashoggi after the conversation ended,” it added. While the report is so far unconfirmed, the New Arab reports that so far Turkish pro-government media have been receiving a steady stream of leaks many of which turned out to be accurate, including pictures of the hit team as they entered Turkey and reports of audio recordings of the murder said to be in the possession of Turkish authorities. Meanwhile, the Saudi version of events has been changing significantly over the past two weeks with authorities conceded Saturday that Khashoggi, the Washington Post columnist and a Riyadh critic, was killed inside the kingdom’s Istanbul diplomatic compound following a “brawl”. The admission came after a fortnight of denials with the insistence that the journalist left the consulate alive, starting on October 5, when Crown Prince MBS told Bloomberg that Khashoggi was not inside the consulate and “we are ready to welcome the Turkish government to go and search our premises”.
Jamal Khashoggi: UK, France and Germany ‘urgently’ demand clarification of ‘exactly what happened’ in Saudi consulate -- Britain, France and Germany have said “nothing can justify” the killing of journalist Jamal Khashoggi inside Saudi Arabia’s Istanbul consulate, as the nations demanded “credible facts” over his death. A joint statement issued by UK foreign secretary Jeremy Hunt and his counterparts in Berlin and Paris, Heiko Maas and Jean-Yves Le Drian, condemned the alleged murder “in the strongest possible terms”. They said there was an “urgent need for clarification on exactly what happened” when Khashoggi, an outspoken critic of the Saudi regime, entered the consulate in Turkey on 2 October. “Defending freedom of expression and a free press are key priorities for Germany, the United Kingdom and France,” the statement added. “The threatening, attacking or killing of journalists, under any circumstances, is unacceptable and of utmost concern to our three nations.
Germany halts arms deals with Saudi Arabia, encourages allies to do the same - In a move that could put further pressure on President Trump to stop arms sales to Saudi Arabia, German Chancellor Angela Merkel announced Sunday evening that her government would not approve new arms exports to the kingdom until further notice.“There is an urgent need to clarify what happened — we are far from this having been cleared up and those responsible held to account,” she said at a news conference. “I agree with all those who say that the, albeit already limited, arms exports an’t take place in the current circumstances,” Merkel said.While the move affects future deals, exports that have already been approved to the second-biggest foreign market for German arms equipment will proceed for now but may be suspended in the coming days.Germany is the first major U.S. ally to cast doubts on future arms sales after the killing of Washington Post contributing columnist Jamal Khashoggi, and the move is likely to put pressure on bigger exporters to do the same. President Trump has ruled out suspending arms exports but faces bipartisan calls to hold the alleged perpetrators behind the writer’s killing accountable.Since the Oct. 2 disappearance of Khashoggi, companies and governments worldwide have come under pressure to abandon their ties to the Saudi Arabian leadership. Saudi Arabia first denied allegations that it was behind the columnist’s disappearance but later claimed that Khashoggi was killed inside the Saudi Consulate in Istanbul in a “fistfight” with more than a dozen Saudi officials. While Trump has sent mixed messages — both calling the Saudi investigation “credible” and accusing the Saudis of “deception” — key U.S. allies in Europe agree that Riyadh’s explanation does not add up.
A Visibly Irritated Macron Evades Question About Halting Saudi Weapon Sales - Just days after Germany announced it was suspending arms sales to Saudi Arabia - just weeks after inking a $500 million weapons deal with Riyadh - while the outrage over Khashoggi's murder lingers, French President Emmanuel Macron on Tuesday was less enthused about following in the footsteps of his ideological icon, Angela Merkel, and refused to take questions about halting arms sales to Saudi Arabia despite Germany's calls on its European partners to follow its example and stop arms exports to the kingdom.During a Tuesday visit to a naval defense show, journalists asked Macron whether France would follow Germany in halting weapons sales to Riyadh after it admitted to the death of dissident journalist Jamal Khashoggi in its consulate, to which the French president with the plunging approval rating was clearly triggered:"This has nothing to do with what we're talking about. Nothing. So I won't answer that question. I'm sorry but as long as I'll be in office this is how it will be, whether people like it or not," he responded, visibly irritated according to Reuters."It's not because one leader says something that I must react to it every time. So I won't answer that," he added in a bout of insecurity, after a journalist asked a follow-up question.As we reported on Monday, Macron's co-leader of Europe's hypocritical progressive movement of ideological purity, Angela Merkel, on Monday called the killing of Khashoggi a "monstrosity" and vowed to halt all German arms exports to Riyadh until the case is cleared up. After her comments, Germany's economy minister - hoping that Germany does not lose market share as it engages in international virtue signaling - Peter Altmaier, called on other European Union member states to follow its example in stopping arms exports to Saudi Arabia to increase pressure on Riyadh over the death of Khashoggi which has caused an international outcry.His appeal failed to stir Macron, however.
Erdogan: Turkey will reveal ‘naked truth’ over Khashoggi killing - Turkey's President Recep Tayyip Erdogan has promised to reveal the "naked truth" over the killing of Saudi journalist Jamal Khashoggi, saying that he will make a new statement on the case on Tuesday. His comments on Sunday are likely to increase speculation that Ankara may be about to reveal some of the results of its investigations into the killing of Khashoggi, a Washington Post columnist, who disappeared after entering the Saudi consulate in the Turkish city of Istanbul on October 2On Saturday, after weeks of denying any involvement in Khashoggi's disappearance, Saudi Arabia said the 59-year-old, a prominent critic of the powerful Crown Prince Mohammed bin Salman (MBS), died in a fistfight at the consulate. "I will make my statement about this issue on Tuesday at the party group meeting," Erdogan said in a speech in Istanbul. "We are looking for justice here and this will be revealed in all its naked truth, not through some ordinary steps but in all its naked truth," Erdogan added.Erdogan has remained largely silent on the case, although Turkey's pro-government newspapers have released information detailing a 15-member team that purportedly arrived in Istanbul to confront Khashoggi at the consulate."Why 15 people came ... why 18 people were detained ... These things have to be told in detail," Erdogan said.Saudi Arabia's public prosecutor on Saturday said 18 people were arrested in connection with the incident.
Turkey Adopts ‘Drip-Drip’ Tactic in Saudi Murder Case —Turkish authorities decided to leak evidence gradually in the days after the killing of a dissident journalist as part of an effort to blunt the international standing of rival Saudi Arabia, Turkish officials said. Turkish investigators quickly determined Jamal Khashoggi had been killed by Saudi operatives but authorities didn’t publicly announce what they knew because they were worried about provoking a confrontation with the rich and powerful kingdom. But as Mr. Khashoggi’s disappearance gained global attention and Saudi Arabia denied any knowledge of it, Turkish officials saw a chance to counter Riyadh’s narrative. “We turned on the drip-drip,” a Turkish official said. More drips came on Monday: Turkish security-camera footage showing a man with a fake beard and dressed to look like Mr. Khashoggi exiting a back door of the Saudi consulate in Istanbul after the journalist was killed. The footage weakens the narrative Riyadh released on Saturday that he died by accident during a brawl. A Saudi official confirmed the kingdom’s use of a Khashoggi double but declined to elaborate. President Trump said Monday that he was “not satisfied” with Saudi Arabia’s new explanation and that he expected to know more about the circumstances on Tuesday with the help of “top [U.S.] intelligence people” in Turkey. Central Intelligence Agency Director Gina Haspel flew on Monday to Turkey to meet with investigators there as the U.S. reviews evidence in the case. President Recep Tayyip Erdogan of Turkey pledged to reveal what happened “in its naked truth” in a Tuesday address to lawmakers from his ruling Justice & Development Party. Turkish officials said they have an audio recording proving the Saudis killed the journalist “in a barbaric way.” The Trump administration has forged a tighter military and political alliance with Saudi Arabia, putting its brash Crown Prince Mohammed bin Salman at the center of a Middle East coalition that is hostile to Iran and to Islamist movements like the Muslim Brotherhood that are supported by Mr. Erdogan’s Turkey.
Jamal Khashoggi: Erdogan says murder was “planned’ – DW - The Turkish president has laid out the first official version of the investigation into the murder of journalist Jamal Khashoggi. Saudi Arabia could face its worst crisis if the crown prince is linked to the killing. Turkish President Recep Tayyip Erdogan told lawmakers on Tuesday that Turkey had "strong evidence" the murder of Saudi dissident journalist Jamal Khashoggi was planned in advance by Saudi officials, contradicting Saudi accounts that the journalist died accidentally in a "fistfight" in the Saudi consulate in Istanbul.The Saudi government's alleged involvement in the journalist's death has caused an international outcry and prompted Germany to halt arms sales to the country. What did Erdogan say?
- Turkey has strong evidence that Saudi officials planned Khashoggi's murder days in advance.
- Saudi team visited forest in Istanbul and Yalova before Khashoggi's disappearance on October 2.
- Consulate security cameras were removed.
- A day before the murder, a number of forensics, intelligence specialists arrived in Istanbul
- A Saudi team of 15 entered the consulate on the day of Khashoggi's murder.
- Eighteen people arrested in Saudi Arabia in relation to the murder matches those identified by the Turkish intelligence.
- Khasoggi was killed in a violent, savage murder.
- He had no doubt to question the integrity of the Saudi King.
- The issue of diplomatic immunity under the Vienna Convention would be discussed in regards to the case.
- The suspects should be tried in Istanbul and not in Saudi Arabia.
Erdogan- Savage Khashoggi Murder Was Planned - Turkish President Erdogan's didn't quite deliver on his promise to reveal "the naked truth" in the killing of Saudi journalist Jamal Khashoggi during a speech on Tuesday before the Turkish parliament, though he did raise important questions while providing the most detailed public statement yet on the killing, which corroborated several anonymously sourced reports that surfaced in recent days. Though it was conspicuously timed to overlap with the opening of Crown Prince Mohammad bin Salman's "Davos in the Desert," Erdogan's speech didn't include any previously unreported bombshell allegations, nor the "smoking gun" to connect the killing directly to MbS, Erdogan did assert that the "savage" killing had been pre-planned by the Saudi government, contradicting the Saudi government's official story that Khashoggi's death was the result of a botched interrogation, and that he died after a brief struggle...with 15 Saudi intelligence operatives, as the Financial Times pointed out. Though his statement was the most aggressive yet from the Turkish government, it notably stopped short of directly accusing the Saudi leadership of murder."We have significant signs that this was not something that happened instantaneously, spontaneously," Mr Erdogan said in speech to members of his parliamentary party. "Khashoggi was murdered in a ferocious manner." Erdogan said the gathering of the 15 intelligence operatives in Istanbul was clearly no accident, and that the Turkish government wants to know "on whose orders" they were sent. While the Saudis had taken "an important step" in admitting to the killing, Erdogan said more details - such as the location of Khashoggi's remains - must be shared with Turkish investigators."People who had qualifications related to the incident gathered in Istanbul," he said. "On whose orders did they come . . .? We want an answer.""Why has the body not been found?" Erdogan also questioned why the Saudis had refused to open their consulate to Turkish investigators until days after Khashoggi's disappearance. Watch the full video of Erdogan's speech below:
Khashoggi Drama – A Deal Is No Longer Possible – Erdogan Demands That MbS Goes -The Khashoggi saga continues to influence Middle East policies.On Friday the Saudi regime admitted that Khashoggi was killed in its consulate in Istanbul. Since then they have changed their story twice:After weeks of denying involvement in Khashoggi's disappearance, Saudi Arabia said that he was killed in the Istanbul consulate, saying his death was the result of a "fistfight". A Saudi source close to the royal palace later told CNN that the Washington Post journalist died in a chokehold. On Sunday, its foreign minister, Adel al-Jubeir, went further, describing Khashoggi's death on Fox News as a "murder" and a "tremendous mistake."Mohammad bin Salman, the Saudi clown prince and effective ruler, does not seem to have any good media advisors. Erdogan's mouthpiece, the somewhat lunatic columnist Ibrahim Karagül, gives an insight into Erdogan's thinking and sets out his aims:The real trap was set against Saudi Arabia. Even though a Saudi Arabia-U.S.-Israel rapport was established and discourse about shielding the Riyadh administration from Iran, the objective was to destroy Saudi Arabia through Salman and Zayed. The next front after the Syria war was the Persian Gulf, Saudi Arabia. They never understood this, they could not understand it. Turkey understood it, but the Arab political mind was blinded. Now Saudi Arabia is in a very difficult situation. The world collapsed over them. Crown Prince Salman is going through a tough test via Zayed, who has control over him. If the gravity of the situation after the facts revealed with the Khashoggi murder is not comprehended, we will witness a “Saudi Arabia front” in less than a few years. The Riyadh administration must dethrone Crown Prince Mohammed bin Salman at once. It has no other choice. Otherwise, it is going to pay very heavy prices. If they fail to quash the trap set up targeting Saudi Arabia through bin Zayed, they will be victims of Trump’s “You won’t last two weeks” statement, and the process is going to start to work in that direction. ...This duo must be taken out of the entire region and neutralized. Otherwise they are going to throw the region in fire. Crown Prince of Abu Dhabi Mohammed bin Zayed is Mohammad bin Salman's mentor and partner in crime in Yemen. MbZ is smarter than MbS - and will be more difficult to dislodge. Erdogan's aim seems clear. The chance for deal is gone. MbS has to go. He will try to play the case out until that is achieved.
How the man behind Khashoggi murder ran the killing via Skype (Reuters) - He ran social media for Saudi Arabia’s crown prince. He masterminded the arrest of hundreds of his country’s elite. He detained a Lebanese prime minister. And, according to two intelligence sources, he ran journalist Jamal Khashoggi’s brutal killing at the Saudi consulate in Istanbul by giving orders over Skype. Saud al-Qahtani, a top aide for Saudi Crown Prince Mohammed bin Salman, is one of the fall guys as Riyadh tries to stem international outrage at Khashoggi’s death. On Saturday, Saudi state media said King Salman had sacked Qahtani and four other officials over the killing carried out by a 15-man hit team. But Qahtani’s influence in the crown prince’s entourage has been so vast over the past three years - his own rise tracking that of his boss - that it will be hard for Saudi officials to paint Qahtani as the mastermind of the murder without also raising questions about the involvement of Prince Mohammed, according to several sources with links to the royal court. “This episode won’t topple MbS, but it has hit his image which will take a long time to be repaired if it ever does. The king is protecting him,” one of the sources with ties to the royal court said. Qahtani himself once said he would never do anything without his boss’ approval. “Do you think I make decisions without guidance? I am an employee and a faithful executor of the orders of my lord the king and my lord the faithful crown prince,” Qahtani tweeted last summer.
Watch- Saudi Consulate Employees Burn Documents Day After Khashoggi Killing - The drumbeat of incriminating leaks from the Turkish investigation into the killing of Jamal Khashoggi has continued apace Monday afternoon. And in the latest salacious piece of evidence that appears to support the theory that Khashoggi's murder was a premeditated act ordered by a senior official in his government, if not the Crown Prince himself, a Turkish TV station has aired footage showing employees from the Saudi consulate in Istanbul burning documents on Oct. 3, the day after Khashoggi disappeared inside the consulate and was never seen again.Per Middle East Eye, Turkish television channel A Haber released on Monday a video seemingly filmed by a small drone of consulate employees throwing documents into a fire outside of the consulate building.BREAKING — Turkish TV @tvahaber broadcasts images showing Saudi Consulate staff in Istanbul are burning documents one day after #Khashoggi murder pic.twitter.com/eeoDiCsn12 — Turkish authorities haven't commented on the latest video, which was shared by a number of Turkish news outlets. The identity of the individuals in the video and the contents of the documents they burned remained unknown as of publication time.Meanwhile, Middle East Eye reported that five more Turkish employees of the Saudi consulate in Istanbul gave witness statements on Monday to investigators in the Khashoggi probe. That brings the total number of consulate employees interviewed to 25 - roughly 20 short of the 45 that investigators hope to interview. On Saturday, Saudi Arabia officially admitted that Khashoggi had been killed inside the embassy during what they described as a "botched interrogation. However on Sunday, Saudi Foreign Minister Adel al-Jubeir appeared to walk back these claims, saying the kingdom didn't know how Khashoggi died. There have also been conflicted reports about how Khashoggi's remains were disposed of, with Saudi sources saying his body was rolled into a carpet and given to a local fixer to dispose of, while Turkish sources insist that he was cut into 15 pieces.
Jamal Khashoggi’s ‘body parts and disfigured face found in Saudi consul’s garden’ as his son stares down Crown Prince THE dismembered body of Saudi journalist Jamal Khashoggi has been found near where he is believed to have been tortured and killed, it's been claimed today. Reports say the butchered remains of the writer - feared murdered by assassins inside the Saudi consulate in Istanbul - had been "cut up" and his face "disfigured". Slain journalist Jamal Khashoggi reportedly spoke with the Saudi Crown Prince just MINUTES before he was killed by a hit squad News of the grisly "find" came as the journalist's devastated son Salah came face-to-face with Crown Prince Mohammad Bin Salman. Members of the journalist's family were invited to meet the royal family in Riyadh so they could "pass on their condolences." Images released by the state-run Saudi Press Agency show King Salman and the Crown Prince shaking the hands of the journalist’s relatives. Salah was pictured looking steely-eyed as he came face-to-face with the man some have alleged was behind his father's killing.The Saudi government insists that the King and Crown Prince had no prior knowledge of the plan to kill Khashoggi.One source claimed the body parts were discovered in the garden of the Saudi consul general's home, reports Sky News. Dogu Perincek, leader of Turkey's Rodina party, earlier alleged the body parts were discovered in a well inside the garden.However, neither reports have been officially confirmed by the authorities in the Turkish city.The news comes after Turkey's president said the body had not been found and called on the Saudis to reveal its whereabouts. Earlier it was revealed one of the Saudi leader's top aides reportedly oversaw the murder via Skype yelling “Bring me the head of the dog”.
A wild rumor claimed Jamal Khashoggi's body had been found in a well, but Turkey's president says it is still missing - Turkey's president has publicly demanded the whereabouts of the body of journalist Jamal Khashoggi, shooting down a wild rumor that Khashoggi's body was found in a well in on the grounds of the Saudi consulate in Istanbul.Recep Tayyip Erdogan told lawmakers of his Justice and Development Party (AKP) on Tuesday that he still wanted to know where Khashoggi's body is."Where is the body of Jamal Khashoggi?" Erdogan said. "No one knows until now."On Monday Doğu Perinçek, the chairman of Turkey's left-wing nationalist Patriotic Party, claimed that parts of Khashoggi's body had been found in a well in the garden of the Saudi consulate in Istanbul.It was unclear where he got that information, or whether he was privy to Turkey's intelligence. He said he expected Erdogan to say as much in his speech, but it ultimately did not come to pass.Surveillance footage published by Turkish newspaper Hurriyet purports to show Jamal Khashoggi entering the Saudi consulate in Istanbul on October 2. Erdogan also alluded to Saudi claims, made anonymously to Reuters on Sunday, that Khashoggi's body had been rolled up in a rug and given to a local person for disposal.That claim comes in contrast to that by Turkish intelligence, which says that Khashoggi's body was dismembered, according to news outlets including The New York Times and The Wall Street Journal.Erdogan said on Tuesday: "There is a claim that the body of Khashoggi has been given to a local person. I am asking: Who is that local person?"No one is talking about this local person. Someone has said that it was a local person. You need to reveal the name of this local person. "No one is allowed to think that this case will come to an end without answering any of these questions."
The global oil market doesn't believe Khashoggi death will lead to a major Middle East conflict - Saudi Arabia, the world's largest oil exporter, is mired in its biggest international crisis since King Salman took the throne in 2015, but one would hardly know it by looking at oil markets.The market remains unconvinced that the killing of journalist and U.S. resident Jamal Khashoggi will cause a conflict that shrinks Saudi supply. At the same time, analysts say traders are taking profits after this month's oil price rally, while investors sell crude as the broader market sheds risky assets.Oil prices have tumbled from nearly four-year highs just three weeks ago, despite rising U.S.-Saudi tension over the killing. U.S. crude dipped below $66 a barrel on Tuesday, hitting a two-month low and dropping more than $11 from its high on Oct. 3. Brent crude, the benchmark for international oil prices, dropped to a more than six-week low, tumbling below $76, more than $10 below its own four-year high.Saudi Arabia acknowledged Friday that several of its agents were involved in Khashoggi's death in the Saudi Consulate in Istanbul. The incident has sparked calls for sanctions against Saudi Arabia, a series of embarrassing intelligence leaks by Turkish authorities that undermined the Saudis' story and threats of retaliation from the kingdom.The scandal initially raised concerns that Saudi Arabia would refuse to hike oil output as planned. The Trump administration is largely depending on the Saudis to fill the gap left by the loss of Iranian oil exports, which are subject to U.S. sanctions beginning Nov. 4. However, Saudi Energy Minister Khalid al-Falih reassured markets over the past two days that Saudi Arabia intends to increase production as previously announced. He said there is no intention to hold back oil exports, after the nation's press agency released a statement last week threatening to retaliate against any foreign government that seeks to punish the country for Khashoggi's killing.
Khashoggi, Erdogan and the Truth -Craig Murray - The Turkish account of the murder of Khashoggi given by President Erdogan is true, in every detail. Audio and video evidence exists and has been widely shared with world intelligence agencies, including the US, UK, Russia and Germany, and others which have a relationship with Turkey or are seen as influential. That is why, despite their desperate desire to do so, no Western country has been able to maintain support for Crown Prince Mohammed Bin Salman. I have not seen the video from inside the consulate, but have been shown stills which may be from a video. The most important thing to say is that they are not from a fixed position camera and appear at first sight consistent with the idea they are taken by a device brought in by the victim. I was only shown them briefly. I have not heard the audio recording. There are many things to learn from the gruesome murder other than the justified outrage at the event itself. It opens a window on the truly horrible world of the extremely powerful and wealthy. The first thing to say is that the current Saudi explanation, that this was an intended interrogation and abduction gone wrong, though untrue, does have one thing going for it. It is their regular practice. The Saudis have for years been abducting dissidents abroad and returning them to the Kingdom to be secretly killed. The BBC World Service often contains little pockets of decent journalism not reflected in its main news outlets, and here from August 2017 is a little noticed piece on the abduction and “disappearance” of three other senior Saudis between 2015-17. The key point is that European authorities turned a completely blind eye to the abductions in that BBC report, even when performed on European soil and involving physical force. The Saudi regime was really doing very little different in the Khashoggi case. In fact, inside Saudi Arabia, Khashoggi was a less senior and important figure than those other three abducted then killed, about whom nobody kicked up any fuss, even though the truth was readily available. Mohammed Bin Salman appears to have made two important miscalculations: he misread Erdogan and he underestimated the difference which Khashoggi’s position as a Washington Post journalist made to political pressure on Western governments.
Khashoggi Drama – A Deal Has Been Made But Will It Hold? -- A preliminary deal has been made between the Turkish president Erdogan and the al-Saud clan in Saudi Arabia. Over the last 36 hours, since Erdogan's speech proved Saudi culpability, there have been no more damaging leaks about the case from the usual Turkish sources. During a podium discussion at yesterday's investor conference in Riyadh Mohammad bin Salman denounced the “heinous crime” committed against Jamal Khashoggi. He praised the "unbreakable relations" with Turkey and lauded Qatar's economic durability. The comments came after a phone call between MbS and Erdogan. The negotiations proved to be difficult. The Saudi King sent the governor of Mecca and Medina to make a deal: Prince Khalid al-Faisal returned home from Ankara with a bleak message for the royal family. “It is really difficult to get out of this one,” Prince Khalid told relatives after his return, one of those family members recalled this week. “He was really disturbed by it.” Early rumors spoke of a Saudi offer of $5 billion to burry the case. That was not enough. On Monday the NYT reported that Erdogan denied that he would make any deal of that kind: Erdogan's current source of money is Qatar, which is under blockade by Saudi Arabia and the UAE. Ending the crisis over Qatar was only one condition he set out to the Saudis. There are other issue related to Syria and more generally the Muslim Brotherhood. The Turkish side still has the leverage needed to 'adjust' any deal and to guarantee that the Saudis stick to it. The tapes of the Khashoggi murder, audio and video, have not been published. The former British ambassador Craig Murray reports: I have been shown stills which may be from a video. The most important thing to say is that they are not from a fixed position camera and appear at first sight consistent with the idea they are taken by a device brought in by the victim. If the Saudis try to cheat away from the deal the photos and audio tapes could still be released. They allegedly prove that MbS himself was very much involved in the killing. The U.S. gave the final push for a deal to fall into place. The CIA's torturer in chief Gina Haspel was sent to show Erdogan her instruments. Whether Erdogan held back in his speech yesterday as a result of Haspel’s intervention I do not know. Haspel listened to the audio tape and found it 'compelling'.
Erdogan- Saudis Must Reveal Who Gave Order To Murder Khashoggi - Now that the Saudis have admitted that the killing of Jamal Khashoggi was a premeditated act, Turkish President Recep Tayyip Erdogan is stepping up his rhetoric, saying in a speech to AKP party officials that whoever ordered the 15-man hit squad to travel to the Saudi consulate on Oct. 2. must reveal himself.Erdogan also demanded that the kingdom reveal the location of Khashoggi's body, adding that the Turks have information about the killing that hasn't been publicly disclosed. If the Saudis truly did hand over Khashoggi's body to a "local cooperator", as they have claimed, Erdogan demanded they share the cooperator's identity with Turkish investigators, per Reuters. The team of Saudi intelligence agents and a doctor specializing in autopsies was lying in wait for Khashoggi when he visited the embassy on that day to pick up documents to allow him to marry his Turkish fiance."Who gave this order?" Erdogan said in a speech to members of his AK Party in Ankara. "Who gave the order for 15 people to come to Turkey?" he said, referring to a 15-man Saudi security team Turkey has said flew into Istanbul hours before the killing. Erdogan also said Saudi’s public prosecutor was due to meet the Istanbul prosecutor in Istanbul on Sunday. While he has so far avoided using his name, the subtext of Erdogan's remarks was clear: the Turkish leader insinuated that Saudi Crown Prince Mohammad bin Salman, who is widely suspected of ordering Khashoggi's murder, admit to his role in the killing.
Khashoggi killing: as Saudi turns to China, for MbS it’s business as usual The warning signs were flashing long before Saudi Crown Prince Mohammed bin Salman’s image as the reformer who would take his kingdom into the 21st century was severely tarnished – at least in the West and a smattering of Muslim nations – by the murder of journalist Jamal Khashoggi.There was his insensitivity to mounting criticism of the military campaign in Yemen, led by Saudi Arabia and the United Arab Emirates, that sparked one of the worst humanitarian crises since the second world war; the debilitating boycott of Qatar; the mass detention and shakedown of hundreds of members of the ruling family and prominent businessmen in a power and asset grab; the confinement of Saad Hariri in an ultimately failed attempt to force the Lebanese prime minister to resign; the arrest of a large number of Islamic scholars, intellectuals and activists, including women who had campaigned for his lifting of the ban on women driving; and the diplomatic crisis with Canada over a tweet criticising the kingdom’s human rights record. Taken together with the killing of Khashoggi in Saudi Arabia’s Istanbul consulate, the signs suggest the 33-year old prince seemingly lacked an understanding of the limits of power and the best ways to wield it. The prince’s critics interpreted his actions as a reflection of his impetuousness, willingness to take risks and gamble without having a credible exit strategy, refusal to tolerate any form of criticism, and his ruthlessness. But until Khashoggi’s disappearance, Western leaders, including US President Donald Trump and British Prime Minister Theresa May, were willing to look the other way and eager to maintain military, energy and other commercial relations.Nonetheless, the reality is that Prince Mohammed may be down, but he is by no stretch of the imagination out. This week’s opening of a showcase investment conference in Riyadh sent a similar message. The standing-room-only conference hall was packed. Saudi, Arab, Asian and African leaders and investors, undeterred by the Khashoggi crisis and allegations of the crown prince’s involvement, took the place of prominent Western CEOs and government ministers who had withdrawn their participation.
"I Think They Might Kill Us": Saudi Dissident Pundit "Undeterred" By Khashoggi Killing, "Tubby Teddy Bear" Threat - A Saudi dissident who makes a living mocking the House of Saud told AFP that he is undeterred by the murder of Jamal Khashoggi at the Saudi embassy in Istanbul. Ghanem Almasarir, who lives in the UK, spoke at a Wednesday protest at the Saudi embassy in London where he said that the murder of Khashoggi revealed a darker side of Prince Mohammed bin Salman - who Almasarir mocks as a "tubby teddy bear." From self-imposed exile in Britain, the video-blogging political satirist, who regularly roasts the ruling Saudi royal family, has racked up more than 200 million views on YouTube. ...On August 31, just over a month before Khashoggi was killed, Almasarir said he was followed and beaten by two Saudi men. The scene -- in which he was punched in broad daylight opposite London's Harrods emporium landmark -- was captured on video. -AFP via Yahoo!"If they are not held accountable, they will continue to do it," said the 38-year-old social media star, adding that several Saudi dissidents living in the UK are "afraid right now to leave their house." Riyadh faces growing incredulity over its explanations about the killing of Khashoggi, a Washington Post contributor and critic of Saudi policies.After he disappeared at the Saudi consulate in Istanbul on Oct. 2, Saudi officials said he left unharmed. But on Friday they announced he had been killed inside in an altercation. World powers including Britain and France are demanding answers and US President Donald Trump has accused Saudi Arabia of lying about the murder. -AFP via Yahoo!
The front line of Saudi Arabia's invisible war in Yemen -- The Saudi-led war in Yemen has ground on for more than three years, killing thousands of civilians and creating what the United Nations calls the world's worst humanitarian crisis in the Arab world's poorest country. With the crisis over the killing of dissident Jamal Khashoggi in a Saudi consulate two weeks ago, Saudi Arabia's brash young crown prince, Mohammed bin Salman, now faces a fresh reckoning for his other foreign policy debacles.Outside Yemen, the catastrophic war has been largely overlooked.The Saudis barred foreign journalists from northern Yemen, scene of the biggest airstrike atrocities and the deepest hunger. The conflict is mostly unknown to Americans, whose military has backed the Saudi-led coalition's campaign with intelligence, bombs and refuelling, leading to accusations of complicity in possible war crimes. Since June, the war has centred on the Red Sea port of Hodeida. After a tense journey along a coastal highway prone to bombs and ambushes, we made a rare visit this month to the chaotic battlefield at the city gates. There we saw what Crown Prince Mohammed's war looks like up close, from one side, among those Yemenis who are fighting and dying in it. In 2015, the prince sent Saudi warplanes to bomb Houthi rebels who had seized control of northwestern Yemen and whom he saw as a proxy of Saudi Arabia's regional rival, Iran. Originally a movement of Shiite guerrillas from the mountainous northwest, the Houthis rose to power in the turmoil that followed the Arab Spring in 2011. After capturing the capital, Sanaa, in 2014, they soon controlled Yemen's three largest cities. Iran aided their advance with supplies of military equipment, including missiles. Since 2015, Saudi Arabia and the United Arab Emirates have led a military coalition in a war aimed at ousting the Houthis and restoring an internationally recognised government. But early promises of a swift victory have given way to a bloody stalemate, while the war has inflicted a catastrophic toll on Yemenis that includes widespread hunger and the worst cholera epidemic in history.
AP PHOTOS: Fishermen risk death in Yemen's violent waters (AP) — Every time Ammar Ahmed heads out to sea, he thinks about the helicopter. Earlier this month, after three days without a catch, he and eight other Yemeni fishermen decided to take their small boat into deeper waters, closer to the invisible boundary off the Red Sea coast enforced by the Saudi-led coalition at war with Yemen's Houthi rebels. That's when the Apache helicopter swooped in over the waves, its heavy guns causing a frenzy in the churning waters. "The Apache attacked, firing everywhere," the 70-year-old father of three told The Associated Press in his small port town of Mahwa. "Everyone jumped in the water." The men treaded water for more than 20 minutes as the Apache continued to hover overhead. When it flew off, they returned to their boat and sailed back to port empty-handed. Ahmed was so traumatized by the experience he couldn't go near the water for two weeks. But then a new fear took hold — hunger. The three-and-a-half-year war in Yemen has caused the world's worst humanitarian crisis, with two thirds of the population — some 18 million people — relying on humanitarian aid. International aid agencies say 8 million Yemenis don't know where their next meal is coming from. So an estimated 300,000 fishermen still ply the waters of Yemen's Red Sea coast, where heavy fighting has been underway for months as the coalition tries to pry the port city of Hodeida — a crucial lifeline for aid — from the Iran-aligned rebels. Just days before Ahmed's encounter with the Apache, a frigate opened fire on a fishing boat, killing 18 fishermen from a small village near the port of Khokha and leaving just one survivor. In October 2015, coalition ships and Apaches killed 48 fishermen who were heading to an island some 30 miles (48 kilometers) offshore to rest.
Assassins for Hire: US Citizens, Israelis, and Palestinians Kill for Money in Yemen - Real News Network video & transcript - On Tuesday, Aram Roston of BuzzFeed revealed that the United Arab Emirates, UAE, hired an American mercenary company called Spear Operations Group to assassinate individuals in Yemen, and that they also attempted to plant a bomb at the headquarters of the Islamic party in this operation. The UAE is cooperating with Saudi Arabia in its war against the Houthi ethnic group that is governing Yemen. It is very interesting to note that the UAE did not contact this company directly, but it was Mohammed Dahlan, a Palestinian from Gaza who is a former senior member of the Fatah party who reached out to the Spear Operations Group. And so why was the Spear Operations Group chosen out of dozens of similar mercenary companies? Spear Operations Group was founded by Abraham Golan, a former Israeli military officer and well-known businessman in the private military and security business. Already in February, the Yemeni Transportation Minister Saleh al-Gabwani warned that the U.S. intervenes in Yemen by creating small armies, and fragmenting the territory and its population. SALEH AL-GABWANI: The situation is very bad in all liberated areas, particularly those in the south, where there are tribal armies established and supported by the United Arab Emirates. There are also provincial armies, and there are gangs. Even Al Qaeda is spreading there in large parts of the governorates. Al Qaeda has never been as present as it is right now. GREG WILPERT: Joining me now to discuss the role of the U.S. mercenaries in the Yemen war is Antony Loewenstein. He’s an independent journalist and author of Disaster Capitalism: Making a Killing out of Catastrophe. Thanks for joining us again.
Saudi airstrike kills 21 civilians in Yemen - A United Nations (UN) report released on Thursday confirmed that at least 21 Yemeni civilians were killed and 11 more injured in an October 24 airstrike carried out by Saudi-led coalition forces. The latest civilian target destroyed by Washington’s despotic ally was a vegetable packaging facility, located in the town of Bayt el-Faqih, located approximately 43 miles southwest of Hodeidah. The dead and injured consisted of workers, farmers and children. According to a Yemen health ministry source, as reported to the Middle East Eye, about half of the fatalities were instant. The remaining deaths were a result of rescuers being unable to reach medical facilities in a timely manner. What should be a one-hour drive from Bayt el-Faqih to Hodeidah now takes over six hours to accomplish as the warring factions have set up checkpoints and roadblocks along the contested highway. Houthi rebels were not seen in the area, nor was any military equipment found in the aftermath of the slaughter. The Associated Press and Al-Jazeera have confirmed via an unreleased video that charred human remains were scattered throughout the facility and marketplace. This is third airstrike launched by the Royal Saudi Air Force (RSAF) in the last week that has resulted in civilian casualties. The RSAF is well equipped and supplied by Western imperialism, featuring US manufactured Boeing F-15 Eagles and the British Aerospace (BAE) Panavia Typhoons.
King says Jordan to reclaim land held by Israel under 1994 deal - Jordan has told Israel that it intends to reclaim two tracts of territories remained in Israeli private ownership under a 1994 peace treaty, King Abdullah II has announced, in a move that was welcomed by activists and civil society groups opposing the deal. As part of the agreement, Israel leased about 405 hectares of agricultural land in the southern sector of its border with Jordan called al-Ghumar, as well as the small al-Baqura area near the confluence of Jordan and Yarmouk rivers.The areas are currently regulated through a "special regime" in the peace treaty where Israel recognises Jordanian sovereignty with Israeli private land ownership. The territories - water-rich farmlands currently cultivated by Israeli farmers, kept in Israeli hands for 25 years, with a 12-month notice period needed to prevent an automatic extension. The deadline for renewing the leases is Thursday, October 25."We have informed Israel of an end to the application of the peace treaty annexes regarding al-Baqura and al-Ghumar," the king said on Sunday, according to the Petra state news agency."Al-Baqura and al-Ghumar have always been on top of my priorities. Our decision is to end the annexes of the peace treaty based on our keenness to take all that is necessary for Jordan and Jordanians," the king added. "Al-Baqura and al-Ghumar are Jordanian land and will remain Jordanian." Following the king's announcement, Israeli Prime Minister Benjamin Netanyahu said that Israel would negotiate with Jordan an extension of the leases, which expire next year.
Israel refusing Russian demand to give additional warning before conducting air strikes in Syria - Israel is rejecting reported Russian demands that Israel give the Russian military additional warning before carrying out airstrikes in Syria, Defense Minister Avigdor Liberman claimed on October 25.“We will not accept any restrictions on our freedom of operation, and when it comes to national security, we will take action,” the defense minister told Army Radio in an interview.In an attempt to save the face of the Israeli media, Liberman stated that the Israeli military has carried out more airstrikes on targets in Syria than have been attributed to it by media.“Just because the media did not report on Syria strikes does not mean there were none,” Liberman said. “I don’t think it’s our duty to report what the army must do. An army needs to act.” These remarks were clearly referring to to the fact that there have been no Israeli airstrikes on Syria since the delivery of Russian-made S-300 systems to the Syrian Air Defense Forces in late September.
Russia Accuses US of Coordinating Drone Attack on Russian Military Base in Syria -— Over the past year Russia’s chief military base in Syria, Khmeimim Air Base near Latakia (alternately Hmeimim), has come under sporadic waves of attack by small armed drones, which have appeared increasingly sophisticated.Those attacks were assumed to have been the work of jihadists operating out of Idlib, such as Jabhat Fatah al-Sham, who launched the small makeshift drones in an attempt to penetrate Russian defenses, even targeting the Russian naval facility at the Syrian port city of Tartus in addition. The Kremlin now says, based on new intelligence provided by the Russian defense ministry that a major attack on Khmeimim last January was coordinated by a US spy plane. Kremlin spokesman Dmitry Peskov presented statements confirming Russian intelligence has produced “undoubtedly a very alarming report” which finds a US P-8 Poseidon surveillance plane was behind the nighttime January 8th attack which involved 13 unmanned aerial vehicles (UAVs) in total — 10 approached Khmeimim while 3 attempted an attack on the naval facility in Tartus.Russian Deputy Defense Minister Colonel General Alexander Fomin went public with details of the Russian intelligence report at a plenary session of the Beijing Xiangshan Forum on security on Thursday: “Thirteen drones moved according to common combat battle deployment, operated by a single crew. During all this time the American Poseidon-8 reconnaissance plane patrolled the Mediterranean Sea area for eight hours.” He said that the moment Russia switched on its electronic countermeasures, the drones switched to manual mode while still operating in a sophisticated and highly coordinated fashion. The deputy defense minister noted: “Manual guidance is carried out not by some villagers, but by the Poseidon-8, which has modern equipment. It undertook manual control,” he said. “When these 13 drones faced our electronic warfare screen, they moved away to some distance, received the corresponding orders and began to be operated out of space and receiving help in finding the so-called holes through which they started penetrating. Then they were destroyed,” Col. Fomin continued. Most of the drones during the January attack were intercepted by Russian air defense systems, but six drones were landed by Russian forces after successfully taking control through electronic countermeasures.
American Defense Contractor Accused of Enslaving U.S. Citizen Linguists - A major American defense contractor held its translators in a tent city under slave-like conditions, breaking U.S. anti-slavery laws, according to allegations in a 2016 federal lawsuit that was recently unsealed. Under threat of arrest in Kuwait, the translators were held in tents where the temperature regularly topped 100 degrees. Company representatives seized their passports and indicated they would go to prison if they tried to escape. According to the suit, supervisors weren’t coy about coercing the translators. One plaintiff, a linguist named Edward Youkhana, complained about his treatment in Kuwait to a regional manager. “The linguists are slaves,” the manager replied. Human rights advocates have long lambasted the Gulf states for their widespread practice of trafficking foreign workers and confiscating their passports. But those charges have largely focused on the exploitation of people from developing nations, including India and Nepal. The allegations in this suit, if true, would join the growing evidence that Americans are also vulnerable to slavery—and by companies working for their own government. This isn’t the first lawsuit alleging an American defense contractor treated its employees like slaves; in a a suit unsealed in April, six plaintiffs made similar allegations against ManTech. “These U.S.-citizen linguists are heroes—they go into combat unarmed to help minimize the chaos of the battlefield and gather intelligence,” said Joseph Hennessey, a lawyer representing the plaintiffs in both lawsuits. “To have been treated so horrifically is unfathomable.”
As U.S. sanctions loom, China's Bank of Kunlun to stop receiving Iran payments - sources (Reuters) - Bank of Kunlun Co, the key Chinese conduit for transactions with Iran, is set to halt handling payments from the Islamic Republic under pressure of imminent U.S. sanctions against the country, four sources familiar with the matter told Reuters. Kunlun, the main official channel for money flows between China and Iran, has verbally informed clients that it will stop accepting yuan-denominated Iranian payments to China from Nov. 1, said the sources, who include external loan agents and business officials who trade with Iran. The bank, controlled by the financial arm of Chinese state energy group CNPC [CNPC.UL], had already quietly suspended euro-denominated payments from Iran in late August, the four sources said, declining to be named due to the sensitivity of the matter. Kunlun did not respond to an emailed request seeking comment. A CNPC spokesman declined comment. It was not immediately clear how long the suspension of services will last and how Chinese businesses still selling goods or services to Iran would be able to receive payment. It was also not clear whether the bank’s services settling China’s payments for Iranian oil purchases would be affected. China is the top buyer of Iranian oil and nearly all of its oil payments go through Kunlun. China had been buying some $1.5 billion worth of oil each month from Iran as recently as September. But state refiners have since October been scaling back oil purchases from Iran to comply with looming U.S. sanctions, oil industry sources have said. The previously unreported moves by Kunlun highlight the mounting pressure Beijing faces as Washington reimposes sanctions targeting Iran’s financial and oil sectors from early November. “A Kunlun account manager told us payments from Iran made after that date will be rejected and returned,” said one of the sources, an agent who serves as a go-between for the bank and corporate borrowers.
China's Oil Addiction Is Its Main Weakness As A Superpower - For decades, the U.S. was so reliant on foreign crude oil imports that it dictated much of the country’s foreign policy spanning numerous presidential administrations. As far back as the 1970s, especially after the 1973-74 Arab oil embargo that threatened economic survival, foreign policy decisions became increasingly subservient to OPEC, and mostly Saudi oil imports. Now, however, the U.S. has positioned itself among the top three global oil producers, and it has also removed the vulnerability that saw the U.S. embroiled in several middle eastern conflicts. Additionally, it still has the U.S. Navy’s 5th fleet guarding oil exports leaving the Middle Eastern region, including the volatile and strategic strait of Hormuz. While the U.S. still has to figure out its game plan going forward amid a record 11 million barrels per day (bpd) of oil production, and the increasingly complex relationship with long term key ally Saudi Arabia and other Arab states, China is now also finding itself in an increasingly vulnerable spot as it relies more on both foreign crude oil and natural gas imports to fund its growing economy. Just the numbers coming out of China should be cause for concern for Beijing energy planners. First, China’s gas consumption in 2017 soared to new record highs, reaching 235.2 billion cubic meters (bcm), marking an increase of 17 percent or 34 bcm from the previous year. However, the real story has been China’s LNG demand spikes. China bypassed South Korea last year to become the world’s second largest LNG importer, after Japan, while China’s LNG demand increased by more than 50 percent in 2017 compared with the previous year to around 38 million tonnes. The Paris-based International Energy Agency (IEA) said earlier this year that China will become the world’s top overall imports of natural gas sometime in 2019. Even as China’s growing dependency on imported gas continues, both in the form of LNG and pipeline gas, its oil thirst is even more problematic. In 2017, China's apparent oil demand rose 5.5 percent year on year to 11.77 million bpd. So far this year, in-spite of a bitter trade war with the U.S. and other economic headwinds, refinery throughput in China, the world's largest oil importer, increased in September to a record 12.49 million bpd, government data showed earlier this month. A CNBC report said that the refinery throughput data feeds hopes about oil demand in China, even though economic growth slowed in the third quarter to its weakest since the global financial crisis.
China Adds to Stimulus Drip-Feed as Markets Stumble Again - China is responding to the slump in its stock markets and the slowdown in the economy with a trickle of stimulus to stabilize, rather than rejuvenate, investor sentiment. The central bank plans to give 10 billion yuan ($1.4 billion) to China Bond Insurance Co. to provide credit support for debt sales by private enterprises, Bloomberg reported Tuesday. Along with new tools to boost lending to companies, and a deadline for the reduction of barriers to foreign investment, the measures add to steps already taken to secure funding and investment for the economy. Here’s Everything China Is Doing to Support its Stock Market In response, stocks slumped again Tuesday, signaling that investor worries over the economy haven’t been eased by the policy announcements. The yuan, which has lost more than 6 percent against the dollar this year, gained. As the trade confrontation with the U.S. hardens into a lasting dampener on the economy, investors have taken an ever-gloomier view on the chances of improvement, making domestic stocks the world’s worst performers this year. Analysts are assuming now that the government will keep adding monetary and fiscal stimulus in limited amounts until sentiment improves, as it is unwilling to renege completely on its goal of reducing dependence on debt.
Xi Jinping urges China to become more self-reliant during tour of southern manufacturing hub - Chinese President Xi Jinping has said that China must become “self-reliant”, state media reported, as he toured the country’s manufacturing hub. Xi arrived in the southern province of Guangdong on Monday, and visited the precision moulding plant and a key laboratory at Gree Electric Appliances in Zhuhai, one of the country’s biggest manufacturers. There he said the country must develop its manufacturing industry and technology to become a “strong” country, according to People’s Daily, the official Communist Party mouthpiece. “To go from a big country to a strong one, we must give paramount importance to the development of the real economy,” Xi said in his first official comments during the visit. “Manufacturing is a key to the real economy, and the core strength of manufacturing is innovation, or the control of core technologies. “We must … seek innovation by relying on ourselves, and I hope all enterprises will work in this direction.” The Guangdong visit comes amid the escalating trade war with the United States and slowing economic growth. US President Donald Trump is pressing Beijing to change its “unfair trade practices” by imposing additional tariffs on Chinese imports, something the Chinese government sees as an effort to contain China’s rise.
Alibaba leads China’s drive to secure new blockchain technologies-- Alibaba Group Holding has filed more than 10 per cent of the world's patent applications for blockchain in a sign of China's ambitions to dominate the next generation technology in uses beyond cryptocurrencies.China filed more patent applications than the U.S. last year, with technology companies such as Tencent Holdings and Baiduaccounting for 56% of the worldwide total of 406, according to data collated by Thomson Reuters.Applications from the U.S. came a distant second at 22%. The U.S. still has the largest number of cumulative applications, but on an annual basis, China is in the lead. Chinese companies are keen to exploit blockchain, a rapidly growing technology which ensures that data cannot be altered, for applications such as guaranteeing the origin of brands and products. "Blockchain is a new technological landscape where it could be very profitable for Chinese companies to grab significant territory in their patent claim language," said Taiwan-based John Eastwood, a partner at Eiger Law who specializes in intellectual property and technology. "Holding several patents helps to give an aura of legitimacy that helps many companies in the blockchain field to attract investors or acquirers."Alibaba's payment subsidiary Ant Financial and Alipay last week announced a partnership with the municipal government in Wuchang, in northeastern Heilongjiang Province, to use blockchain to ensure the authenticity of rice produced there. Alibaba alone filed 43 blockchain-related patents in 2017, some of which are still awaiting approval, and Tencent filed 11.
China requires blockchain-based information service providers to register users using real names, censor postings and store user data - Chinese users will have to register their real names before they can use online information services based on blockchain, in the first set of rules specifically targeting the technology behind digital currencies like bitcoin that is known for providing anonymity for users. Under proposed new rules, companies and entities operating in China that provide blockchain-based information services will have to ask users to register their real names and national identification card numbers, censor content deemed to pose a threat to national security and store user data to allow inspection by authorities. The Cyberspace Administration of China published the draft regulations on its website on Friday for public consultation until November 2. It is not clear when the rules will come into effect. The latest rules come after an activist in China published an open letter in April about an alleged cover-up of sexual harassment at a top university more than two decades ago on the ethereum blockchain, after the post attracted censors on social media platforms such as WeChat and Weibo. The anonymous poster attached the letter to an ether transaction to himself, in a move similar to leaving a note in a bank transfer. But since all transaction records are public on ethereum, the letter can be read by anyone. One of the key issues that the new rules did not address is that blockchain is a technology in which data is not changeable or erasable, which runs contrary to Chinese laws governing user data, Beijing-based lawyer Xu Kai wrote in an online column. The new rules also lack enforcement procedures to protect the rights of blockchain platforms, Xu noted. Social media platforms powered by blockchain typically allow users to post in anonymity, without a centralised entity controlling their data.
China's economic growth hits nine-year low News - China's economic growth has slowed down to 6.5 percent in the third quarter - its slowest quarterly growth since 2009 - as a campaign to tackle mounting debt and trade frictions with the US take their toll. The world's second-largest economy expanded 6.5 percent in the July-to-September period year-on-year, according to official gross domestic product (GDP) figures released on Friday by China's National Bureau of Statistics (NBS). The rate is down from 6.8 percent and 6.7 percent in the first and second quarters, respectively, but in line with a growth target of roughly 6.5 percent for the year set by China's economic policymakers. "Faced with an extremely complex environment abroad and the daunting task of reform and development at home, China's economic growth remained generally steady," said NBS spokesman Mao Shengyong.The reading will likely put pressure on the leadership to provide fresh support as investors grow increasingly concerned about a flood of cash leaving the country, which has seen the yuan and stock markets fall to four-year lows. China is in the midst of an increasingly bitter trade row with the United States, with both sides exchanging tariffs on hundreds of billions of dollars worth of goods that have fanned fears about the impact on the global economy. But the standoff comes at a tough time for Beijing, which is battling to tackle a mountain of debt, with credit tightening and infrastructure investment falling. And while exports to the US have held up so far, the trade frictions have sapped confidence.
In Latest Provocation To Beijing, US Plans New Warship Passage Through Taiwan Strait - In Washington's latest attempt to provoke Beijing, the United States is planning to send warships through the Taiwan Strait according to Reuters, a mission meant to ensure "free passage" through the strategic waterway and which will further heighten political tensions with China. Reuters sources did not discuss the potential timing for any fresh passage through the strait.The last time the US conducted a similar crossing under the "free passage" umbrella, China responded angrily over what it saw was the latest US incursion in its geopolitical sphere of influence and a fresh mission would only exacerbate the state of affairs between the two superpowers; meanwhile any repeat would be seen in self-ruled Taiwan as a fresh expression of support by President Donald Trump’s government. China, which views Taiwan as a wayward province, has been ramping up pressure to assert its sovereignty over the island and it raised concerns over U.S. policy toward Taiwan in talks this week with U.S. Defense Secretary Jim Mattis in Singapore.Ironically, even as Washington mulls ordering a fresh passage through the strait in a show of support for Taiwan and defiance of China's growing sphere of influence, it has been trying to explain to Beijing that its policies toward Taiwan are unchanged. Mattis delivered that message to China’s Defense Minister Wei Fenghe personally on Thursday, on the sidelines of an Asian security forum."Minister Wei raised Taiwan and concerns about our policy. The Secretary reassured Minister Wei that we haven’t changed our Taiwan policy, our one China policy. So it was, I think, a familiar exchange" said Randall Schriver, U.S. assistant secretary of defense who helps guide Pentagon policy in Asia. While Washington has no formal ties with Taiwan, it is bound by law to help it defend itself and is the island’s main source of arms, a topic near and dear to president Trump's heart: Washington has sold Taiwan more than $15 billion in weaponry since 2010.
Taiwan To Hold Live-Fire Drill Near Spratly Islands In Preparation For Chinese Invasion - China is preparing for a military invasion of Taiwan in 2020. To counter the threat, Taipei has been conducting live-fire war drills. The latest round of exercises will start next month. Taiwan armed forces are planning a three-day live-fire military exercise on Taiping Island in the heavily disputed waters of the South China Sea to show claim to its sovereignty over the Spratly Islands -- a move that will anger China and maybe Vietnam. According to the South China Morning Post, the exercise is scheduled between 8 am and 9 am from November 21 to 23, is expected to upset Beijing, which has also claimed the Spratlys. Taiwan's Coast Guard Administration said Tuesday that the drill would involve firing into the sea and air in the area around Taiping Islands -- using 40mm grenade machine guns and other heavy weapons. "It is a routine shooting practice, which we have held for years," The drill will be held within a five nautical mile range of Taiping, is aimed at safeguarding the integrity of Taiwan's territory and thwarting an invasion from Beijing. Tsai said the drill would not endanger commercial shipping lanes close to Taiping. South China Morning Post asked what sorts of weapons would be used, Tsai said: "We will test the responsiveness both our light and heavy weapons as well as our personnel." The South China Sea is a heavily disputed economic zone and has overlapping maritime claims by Brunei, China, Taiwan, Malaysia, Indonesia, the Philippines, and Vietnam. An estimated $5 trillion of global trade flows through the region annually, which the U.S. and Australia want shipping channels to remain international waters and have launched "freedom of navigation" operations in the region. Two US Navy destroyers sailed through the Taiwan Strait on Monday, in a move to aggravate China amid heightened trade war tensions with Beijing. The USS Curtis Wilbur and USS Antietam, both Arleigh Burke-class destroyers, conducted routine transit to show U.S. commitment "to free and open Indo-Pacific," said Colonel Rob Manning on Monday. This was the third "freedom of navigation" operation by American destroyers in the second half of this year. Multiple Chinese warships followed the two US ships during the transit, defense officials told CNN. It seems Taiwan has good reason to prepare for a Chinese invasion. Geopolitical intelligence analyst, in a separate report, told the South China Morning Post that Beijing's effort to increase military readiness and defend the "one China" policy, was uncovered in a leaked document specifying Beijing has a secret plan to invade Taiwan by 2020. TagsPolitics
Guns and guards to be removed from Korean ‘truce village’ of Panmunjom - The two Koreas and the US-led United Nations Command have agreed to remove weapons in a border village where troops from both sides face off daily, the latest sign of increasingly warm relations between the once-hostile neighbours.Seoul’s defence ministry said in a statement that, following trilateral talks on Monday, agreement had been reached to withdraw firearms and guard posts from the Joint Security Area (JSA), also known as the truce village of Panmunjom.The parties will then conduct a “three-way joint verification” for another two days, it added.The highly symbolic move comes amid the failure of nuclear talks to yield concrete results the complaints from the US that it had not been properly briefed on military agreements between the two Koreas. The approval of the US-led United Nations Command (UNC) is significant given wariness in Washington about the pace of inter-Korean rapprochement and its earlier order to block shipments across the border. The JSA is the only spot along the tense, 250km (155-mile) frontier where troops from the two countries stand face to face. The area was a site of a dramatic defection by a North Korean solider in December last year, in which the soldier was shot by his own side and South Korean commandos performed a daring rescue operation. It was a designated neutral zone until the “axe murder incident” in 1976, when North Korean soldiers attacked a work party trying to chop down a tree inside the Demilitarized Zone (DMZ), killing two US army officers.
India in a Bind as it Considers How to Respond to Trade Skirmishes with the US - The Narendra Modi government faces a tough call as its November 2 deadline, which has been deferred more than once already, for imposing retaliatory import duty on 29 US products nears. If it goes ahead with proposed punitive tariff changes, the Trump administration could respond with tit-for-tat measures, including withdrawal of Generalised System of Preferences (GSP) benefits to Indian exports. In June, India announced retaliatory action against the US decision to hike tariffs on steel and aluminium imports. However, it has twice extended its imposition deadline to give diplomacy a chance to sort out trade issues with the US. Also Read: India Retaliates Against Trumps’s Tariffs With Raised Duties on Goods Apart from retaliatory tariffs, Trump’s demand for a more open market for agriculture products, automobiles and capping of prices for medical devices are the other potential flashpoints in India-US trade ties. Under the GSP scheme, India exported merchandise worth $5.6 billion to the US at zero or low tariff in 2017-18, which accounted for nearly 12% of its total exports to that country. If India is shut out of the GSP, its exports to the US could become 5-6% costlier. In that case, India could lose US market share to rivals like Vietnam and Bangladesh, which have duty-free access, warn trade experts. Engineering, chemical and textile sector are some of the sectors that could be hit hard in case GSP benefits are withdrawn by the US. This is a worrying prospect, considering all these sectors are dominated by small and medium-sized enterprises. Benefits offered by the US to the developing countries under the GSP scheme are non-reciprocal. However, the US can withhold GSP benefits to a trading partner if it finds that its exports are facing market access hurdles in that country.
Pakistan Desperate After $3 Billion Saudi Bailout, Still Seeking IMF Package -As Turkey continues its slow drip of information surrounding the Saudi murder of journalist Jamal Khashoggi in Istanbul three weeks ago, resulting in a daily PR crisis for the kingdom as the world slowly turns against it, Riyadh seems to have suddenly gotten looser with its checkbook.On Tuesday Pakistan's foreign ministry announced Saudi Arabia agreed to give Pakistan a $3bn bailout amidst its ongoing economic crisis fueled by a mounting balance of payments deficit and dwindling foreign currency reserves. "It was agreed Saudi Arabia will place a deposit of $3bn for a period of one year as balance of payment support," Pakistan's foreign ministry said. The agreement was reached during an official visit by Pakistan's Prime Minister Imran Khan to Ryadh where he met King Salman bin Abdulaziz and Crown Prince Mohammed bin Salman. Khan also attended the now controversial Future Investment Initiative conference held in the Saudi capital - dubbed the "Davos in the Desert" - but which a week before opening was forced to lower its profile as a flood of Western companies and media outlets pulled out, citing the murder of Khashoggi and the kingdom's horrible human rights record. Pakistan's foreign ministry further confirmed in a statement on Tuesday that the Saudis pledged an additional loan worth up to $3bn in deferred payments for oil imports. The deferred payment facility for oil imports is set to be in place for three years, to be reviewed by the close of that period, the ministry said. In a statement to reporters just before departing for Riyadh, Khan indicated his country is "desperate" to shore up its foreign currency reserves, which have reached a four-year low of $8.4m. The central Asian country's balance-of-payment includes an almost $18bn deficit with its public sector debt at $75.3bn, or a whopping 27% of its gross domestic product. During a session at the Riyadh Future Investment Initiative, Khan said, "The immediate concern for our government is to increase exports, bolster our foreign exchange reserves; getting Pakistanis to send remittances through the banking channels
Nearly half the world lives on less than $5.50 a day- World Bank - Despite progress in reducing extreme poverty, nearly half the world's population lives on less than $5.50 a day, with a rising share of the poor in wealthier economies, the World Bank said Wednesday. In a twice-yearly report, the bank took a broader look at poverty to see where countries were lagging, even though the share of those living in extreme poverty—defined as earning less than $1.90 a day—has continued to come down in recent years.Under the expanded criteria for poverty, the report found the number of poor worldwide was still "unacceptably high," while the fruits of economic growth were "shared unevenly across regions and countries."Even though global growth of recent years had been sluggish, the total count of people in poverty declined by more than 68 million people between 2013 and 2015—"a number roughly equivalent to the population of Thailand or the United Kingdom."Despite the improvement, the report said current trends indicated the World Bank's goal of reducing extreme poverty to less than three percent of the world's population by 2030 may be unattainable."Particularly distressing findings are that extreme poverty is becoming entrenched in a handful of countries and that the pace of poverty reduction will soon decelerate significantly," the report said.At the $5.50-a-day threshold, global poverty fell to 46 percent from 67 percent between 1990 and 2015. The bank reported last month that extreme poverty had fallen to 10 percent in 2015.With China's rise, East Asia and the Pacific saw a 60 point drop in the poverty rate to 35 percent, but the region is unlikely to continue to achieve that pace going forward as growth has moderated. And poverty is becoming entrenched in Sub-Saharan Africa, where 84.5 percent of the population still live on less than $5.50 a day, the report said.
Hospitals hold patients who cannot pay medical bills hostage - -- Doctors at Nairobi's Kenyatta National Hospital have told Robert Wanyonyi there's nothing more they can do for him. Yet more than a year after he first arrived, shot and paralyzed in a robbery, the ex-shopkeeper remains trapped in the hospital. Because Wanyonyi cannot pay his bill of nearly 4 million Kenyan shillings ($39,570), administrators are refusing to let him leave his fourth-floor bed.At Kenyatta National Hospital and at an astonishing number of hospitals around the world, if you don't pay up, you don't go home.The hospitals often illegally detain patients long after they should be medically discharged, using armed guards, locked doors and even chains to hold those who have not settled their accounts. Even death does not guarantee release: Kenyan hospitals and morgues are holding hundreds of bodies until families can pay their loved ones' bills, government officials say.An Associated Press investigation has found evidence of hospital imprisonments in more than 30 countries worldwide, according to hospital records, patient lists and interviews with dozens of doctors, nurses, health academics, patients and administrators. The detentions were found in countries including the Philippines, India, China, Thailand, Lithuania, Bulgaria, Bolivia and Iran. Of more than 20 hospitals visited by the AP in Congo, only one did not detain patients."What's striking about this issue is that the more we look for this, the more we find it," said Dr. Ashish Jha, director of the Harvard Global Health Institute. "It's probably hundreds of thousands, if not millions of people, th at this affects worldwide."
South Africa City To Begin Confiscating Land From Whites In National Test Case - The debate about land redistribution in South Africa has been a passionate one, as many South African cities face a housing crunch that has left hundreds of thousands of people living in informal settlements. Just as this debate is starting to reach a fever pitch, one South African city, Ekurhuleni, is about to embark on what mayor Mzwandile Masina calls "a test case" for the nation: the government is going to seize hundreds of acres of land, from white citizens without paying for it, to build low-cost housing.Last month, the city voted in favor of pushing forward with "expropriation without compensation". According to ABC News, this was cited by the African National Congress as a legal rule that is necessary in order to distribute land equitably and correct "historic injustices" that took place in the country.The mayor of Ekurhuleni stated the same thing, saying that landowners in South Africa should not be scared. Mayor Masina told AP: "Our policy is not to take the land by force. Our policy is to make sure the land is shared amongst those that need it." It was unclear what those whom the land is taken from thought about this policy.The total amount of land that’s going to be expropriated amounts to about 865 acres. The land is both private and government owned, and some of it has been vacant for decades. Masina, who heads the local ANC-led coalition, did not specify which landowners will be hit be the measure.
Trudeau’s Human Stimulus Helps Canada Match Trump’s Tax Cuts The U.S. has its fiscal stimulus. The Canadian economy? Well, it has its human stimulus. The biggest population increase in six decades, driven by international migration, is one reason the Bank of Canada has been able to match the Federal Reserve hike-for-hike since June 2017 -- making the two easily the most hawkish central banks in the Group of Seven. In its latest increase Wednesday, the Ottawa-based central bank highlighted how the surge has bolstered consumption and housing activity. “Labor income is being boosted by the larger population,” the Bank of Canada said in a report Wednesday that accompanied its decision to increase borrowing costs for a third time this year, keeping pace with the Fed’s three moves. Under Prime Minister Justin Trudeau, Canada’s population has jumped by 1.4 percent over the past year, double the U.S. pace, driven by a surge in non-permanent residents like students and higher immigration levels. “We’ve called it the ‘human stimulus,’” Brett House, deputy chief economist at the Bank of Nova Scotia, said in a phone interview. Not only does more people equal more demand in the short term, House said, but these highly-skilled human imports have the ability to boost potential growth going forward. As an added bonus, the pattern of where the new arrivals end up helps decrease the odds of a destabilizing bust in home prices in major metropolitan areas.
Putin Lays Down The Law At Valdai - Every year Russian President Vladimir Putin speaks at the Valdai Economic Forum. And each year his talk is important. Putin isn’t one to mince words on important issues. Valdai represented the first time we’ve heard Putin speak in a long-form discussion since Helsinki and the events thereafter — IL-20, Khashoggi, etc. So, this talk is worth everyone’s time. And when I say everyone’s I mean every single person who could be affected by the breakdown of the U.S. political system and how that spills over onto Russia’s shores.In other words, pretty much everyone on the planet.Because what Putin did at Valdai was to lay down the new rules of conduct in geopolitical affairs. He put the U.S. and European oligarchs I call The Davos Crowd on notice.There is a limit to your provocations and attempts to undermine Russia. So don’t cross that line. The big quote from his talk is the one everyone is focusing on, and rightly so, Russia’s policy about using nuclear weapons.It’s not that Putin’s stance was any different than in the past. Russia will strike back at an aggressor under any circumstance where the future of Russia is at stake. It was his assurance that in doing so 1) it would be just and righteous “dying like martyrs” and 2) so swift and brutal the aggressors would “die like dogs” bereft of the chance to ask for salvation. Those are strong words. They are the words of a meek man. And the word meek, as Jordan Peterson reminds us, describes someone who has weapons, knows how to use them and keeps them sheathed until they have no other option.The reaction from the audience (see video above) was nervous laughter, but I don’t think Putin was having one over on anyone.He was serious. This is the very definition of meek. Men like this are not to be tested too hard. And Putin’s response to the shooting down of the IL-20 plane and its crew was to cross a bunch of diplomatic lines by handing out S-300s to Syria and erecting a de facto no-fly zone over Western Syria and the Eastern Mediterranean.
NATO Sends 50,000 Troops to Largest Exercise Since Cold War — US Marines are landing in Iceland and warplanes are flying overhead in Scandinavia, just days ahead of the kickoff of Trident Juncture. The annual exercise, focused on the Arctic Circle and Scandinavia, is set to be the largest operation since the Cold War.31 countries are involved, 29 NATO members and Finland and Sweden. They will overall be sending 50,000 troops, 10,000 vehicles, 150 warplanes and 65 ships. Starting Thursday, the exercise will last a month.And while officials insist it’s not strictly along the Russian border, Russian military officials say it is close enough, and clearly targeted at growing Russian interests in the Arctic Circle, as warmer temperatures open up new route. NATO officials are being two-faced about this, however, on the one hand insisting this is just an annual exercise, and on the other hand presenting it as a “response to Russian aggression,” the same excuse for every massive exercise along the Russian frontier.
World’s billionaires became 20% richer in 2017, report reveals - Billionaires made more money in 2017 than in any year in recorded history. The richest people on Earth increased their wealth by a fifth to $8.9tn (£6.9tn), according to a report by Swiss bank UBS. The fortunes of today’s super-wealthy have risen at a far greater rate than at the turn of the 20th century, when families such as the Rothschilds, Rockefellers and Vanderbilts controlled vast wealth. The report by UBS and accountants PwC said there was so much money in the hands of the ultra-rich that a new wave of rich and powerful multi-generational families was being created. “The past 30 years have seen far greater wealth creation than the Gilded Age” the UBS Billionaires 2018 report said. “That period bred generations of families in the US and Europe who went on to influence business, banking, politics, philanthropy and the arts for more than 100 years. With wealth set to pass from entrepreneurs to their heirs in the coming years, the 21st century multi-generational families are being created.” The world’s 2,158 billionaires grew their combined wealth by $1.4tn last year, more than the GDP of Spain or Australia, as booming stock markets helped the already very wealthy to achieve the “greatest absolute growth ever”. More than 40 of the 179 new billionaires created last year inherited their wealth, and given the number of billionaires over 70 the report’s authors expect a further $3.4tn to be handed down over the next 20 years.
Global economy is running out of momentum- Kemp (Reuters) - The global economic outlook is deteriorating, with a broad range of asset prices and real-time economic indicators pointing to either a slowdown in growth or an outright recession occurring in 2019. South Korea's KOSPI-100 equity index has now fallen by almost 19 percent over the last year, the fastest rate of decline since the financial crisis of 2008/09, in a warning sign for investors and commodity traders. The KOSPI-100 has correlated closely with the growth in international trade, given the South Korean economy's strong export orientation, so the sharp decline suggests trade growth will slow sharply in the months ahead. Germany's DAX index, another share market heavily exposed to international trade, has also fallen by more than 14 percent over the last year, its worst performance since early 2016, and before that 2011. Even in the United States, which is much more closed to international trade and has reported the strongest economy and stock market in 2017/18, there are signs the bull run is running out of momentum. The broad S&P 500 equity index is up just 7 percent compared with the end of October 2017, the smallest year-on-year increase for almost two years, and far below its peak of 24 percent at the start of 2018. The stimulus of corporate tax reductions which went into effect at the start of the year is beginning to fade and more U.S. businesses are struggling with a rising exchange rate, tariffs and slower revenue growth. Revenue growth at U.S. corporations is slowing, with a significant number of S&P500 firms reporting disappointing sales in the third quarter ("Bull market's latest hurdle: slowing sales growth", WSJ, Oct. 21). The U.S. Treasury yield curve remains close to inversion, with rates on 10-year paper just 26 basis points above 2-year notes, a signal that has often preceded a slowdown in growth or recession in the past. The U.S. dollar remains close to its highest value for a quarter of a century against a trade-weighted basket of the currencies of U.S. trading partners (https://tmsnrt.rs/2OKoiAg ). The combination of a rising interest rates, a flattening yield curve, falling share prices and a strengthening dollar represents a significant tightening of financial conditions, not just in the United States but around the world.
Global Banking Stocks Are Crashing Hard – Just like They Did in 2008 -- “Fortress balance sheets?”… “It’s different this time”… “Greatest economy ever.” If all of that is true, then why are the stocks of the most systemically important banks in the world collapsing? And the banking collapse is leading global stocks lower – probably not coincidentally as global central bank balance sheets contract… As The Economic Collapse blog’s Michael Snyder notes, if this reminds you of 2008, it should, because that is precisely what we witnessed back then. Banking stocks collapsed as fear gripped the marketplace, and ultimately many large global banks had to be bailed out either directly or indirectly by their national governments as they failed one after another. The health of the banking system is absolutely paramount, because the flow of money is our economic lifeblood. When the flow of money tightens up during a credit crunch, the consequences can be rapid and dramatic just like we witnessed in 2008.So let’s keep a very close eye on banking stocks. Global systemically important bank stocks surged in the aftermath of Trump’s victory in 2016, but now they are absolutely plunging. They are now down a whopping 27 percent from the peak, and that puts them solidly in bear market territory. U.S. banking stocks are not officially in bear market territory yet, but they are getting close.
Leaders of Asia and Europe sit down for talks, not sanctions -Totally under the radar of a news cycle consumed by the Pulp Fiction in Istanbul saga and the ever-mutating US-China trade war, leaders from no less than 51 Asian and European nations met in Brussels on Friday to talk about developing some measure of global stability.The day before in Brussels had been lost on yet another unresolved soap opera – Brexit, with no credible deal in sight. The Asia-Europe Meeting (ASEM), established in 1996, lists 53 partners – 30 European nations, 21 Asian nations, the EU and the ASEAN Secretariat. Members, apart from the whole EU, include three BRICS nations (China, Russia, India), Japan, Australia and New Zealand – attesting to its importance. Even though ASEM’s decisions are not binding, the 12th summit could not have happened at a more crucial juncture, according to diplomats, in terms of the pressing need for some sanity in international law and relations.Even with the EU focused on Brexit, the fallout of migration and Italy’s open defiance of Brussels in raising its budget deficit; and Asia worried about inter-Korean dialogue, US bombers flying over the South China Sea ahead of an ASEAN summit, and the Rohingya crisis, they still managed to conduct meaningful discussions.After all, Eurasia-wide trade already tops trans-Pacific trade, and the gap will continue to grow. They discussed connectivity and trade and investment, but also sustainable development policies, climate change, terrorism, nuclear non-proliferation, cyber-security and, last but not least, the theme that galvanizes right-wing populism: migration.Arguably the key consensus point of the Asia-Europe entente cordiale is the need to preserve the WTO – for all its faults still hailed as the only rules-based mechanism capable of arbitrating the proliferation of trade wars.
France says planned EU mechanism to enable Iran trade may have wider use (Reuters) - France’s foreign ministry said on Thursday a so-called Special Purpose Vehicle (SPV) that the European Union is considering creating to enable trade with Iran could be used more broadly to help the bloc avoid the extraterritorial reach of U.S. law. EU foreign policy chief Federica Mogherini said in September that the new mechanism would be in place by November as it seeks to keep trade flowing even though new U.S. sanctions on Tehran will take effect from Nov. 4. The idea is to circumvent the sanctions under which Washington can cut off from the U.S. financial system any bank that facilitates an oil transaction with Iran. Until now, the SPV appeared to focus solely on Iran. But in a reply to Reuters, the French foreign ministry said the idea was for the SPV to go beyond Iran and cover a wider range of EU trade. “The ongoing work on the special purpose vehicle should facilitate financial transactions for companies wishing to maintain trade relations with Iran, in accordance with European law,” foreign ministry spokeswoman Agnes Von der Muhll said. “It aims to create an economic sovereignty tool for the European Union beyond this one case. It is therefore a long-term plan that will protect European companies in the future from the effect of illegal extraterritorial sanctions.” Many diplomats and analysts have expressed doubt over whether such a mechanism could ultimately thwart U.S. sanctions given that the United States could amend its sanctions laws to target the SPV itself. The U.S. special envoy on Iran, Brian Hook, told reporters on Monday that European efforts would struggle to gain traction given there was little demand after more than 100 companies had pulled out of Iran.
Civilized Societies Don’t Call It Censorship, but Copyright -- Xnet (https://xnet-x.net/en/), an activist group working for civil rights in the Internet, is the founder member in Spain of the #SaveYourInternet coalition, which has among its participants groups such as the Electronic Frontier Foundation (EFF), European Digital Rights (EDRi) and others. We have come together to organise a campaign to inform the public about the hidden dangers of the new European Copyright Directive. With the approval in the European Parliament of the final text of the Copyright Directive, which will be definitely put to the vote in a very few months’, the European Union has lost a historic opportunity to produce copyright legislation adapted for the Internet in the twenty-first century. What the European Parliament will finally vote on is a technophobic text, tailor-made for the interests of the copyright monopolies which, moreover, doesn’t guarantee the right of authors to have a reasonable standard of living as a result of their work. If the law is eventually passed, it will be used for wholesale curtailment of freedoms and more censorship, in keeping with the bizarre idea that anything that doesn’t produce hard cash for the major players– which doesn’t mean authors! – has to be prohibited and eliminated. This is a tragedy for workers in the domain of culture who (with a few, brave, and praiseworthy exceptions) have once again been frivolously incapable of informing themselves about the real state of affairs. They have passively swallowed the version fed to them by their masters and, avidly playing the victim, have become the chief mouthpiece of freedom-killing propaganda without the slightest understanding that this is not going to enhance their rights but will do away with the rights of everyone. Alarm bells started ringing almost two years ago when we discovered that, rather than being a proposal for an obsolete copyright law, the directive is being used as a Trojan horse to introduce surveillance, automatic data processing, government by opaque algorithms, and censorship without court orders, etc. This threat to such basic rights as freedom of expression and access to culture and information lurks in ruses which are mainly hidden in two articles of the Directive:
- Article 11: no link without a license. Article 11, otherwise known as the “Linktax” article, has created a new economic “right” for magnates of the written press. This ‘right’, moreover, implies indefinitely restricting the possibility of citing the press online. This perverse measure will be the equivalent, on a European scale, to the “Google tax”, which is already in force in Spain and Germany. Even its promoters were soon to regret it, when Google shut down Google News in Spain after it was approved. The Google tax is paradoxical and those responsible for initiating it know very well it won’t work in Europe. For example, Xnet revealed that the big German publishing company Alex Springer was paying itself – having linked up to pay itself – in an outlandish pretence that “everything’s fine”.
- Article 13: no uploading content without a license. Platforms – from medium-sized providers of services storing subject material through to the giants of the Internet – will be considered responsible for any copyright infringement committed by their users, and they are bulldozed into taking preventive measures. In other words, this isn’t a matter of eliminating content but directly preventing people from uploading it.
Italy Responds To EU Commission, Admits Deficit Breach But Refuses To Budge - Initial relief over a favorable Moody's downgrade of Italy, which pushed the rating just one notch above junk but kept the outlook stable (which in turn prompted the following sarcastic remark from Deutsche Bank's Jim Reid "If there’s one thing the outlook isn’t for Italy at the moment it’s stable but rating agencies are unlikely to want to create a vicious circle") faded after Italy’s populist government promised it won’t let its budget deficit widen further than currently planned and called for dialogue with the European Union to address their differences.In its letter response to the European Commission published Monday and seen by Bloomberg, Italy acknowledged Europe's concerns about the budget, but refused to change the proposed plan. Finance Minister Giovanni Tria said the government is ready to act to ensure it doesn’t exceed the 2.4% target for 2019, noting that he’s aware that his spending plans don’t comply with EU rules and he wants "constructive" talks with officials in Brussels. The decision to increase spending was “difficult though necessary,” Tria said in his letter. He cited slow economic growth and the “difficult economic situation the poorest segments of the Italian society are facing.” Seeking to placate Brussels, Prime Minister Giuseppe Conte, speaking in Rome, said the deficit target should be seen as an upper limit and it could still be narrower."We can still reassess during the budget implementation whether to contain the target so we don’t necessarily need to reach that 2.4%, for sure we won’t exceed it" Cointe said even as he refused to budge from the controversial target which assures that Italy remains on collision course with the EU. As Bloomberg notes, Italy's PM and finmin have both come under fire from officials and investors since bowing to pressure from Italy’s coalition heavyweights Matteo Salvini and Luigi Di Maio to allocate resources to their key election promises: tax cuts, more benefits spending, and a lower retirement age. The Commission expressed “serious concern” about Italy’s budget plans in a letter on Thursday.
In Unprecedented Step, EU Tells Italy To Resubmit Budget As Conte Says No Plan B - One day after Italy responded to the EU's critical reception of Rome's budget proposal, all eyes were back on Brussels which some feared may implement the unprecedented step of demanding revisions to the budget as soon as today, something the European Commission has never done before. Well, moments ago Brussels did respond, and just as the worst case scenario predicted, Europe officially rejected the Italian budget proposal telling Rome to take back, revise and resubmit its budget. Stand offThe rejection follows months of discord and tension over the spending targets, which Italy yesterday accepted breach EU rules but refused to adjust. As Bloomberg adds, while actual sanctions are still improbable and wouldn’t be levied for months, European officials have been wary of handing ammunition to Italy’s euroskeptic government that already waged one successful election campaign by blaming the EU for many of the country’s ills. Europe's response came just moments after Italian Prime Minister Giuseppe Conte said in a Bloomberg News interview that his government has no “Plan B” to change its budget, despite the skeptical responses of the European Commission and investors. Conte told Bloomberg that he was looking forward to talking with European commissioners and explaining the 2019 budget to them. He suggested that Italy has some leeway to tweak aspects of the plan, and not actual spending. But if he is asked to change the substance, “it will be difficult for me because I cannot accept that.” “There isn’t any B plan,” Conte said in the interview in English at his Rome office on Tuesday. “I said that the deficit at 2.4 percent of GDP is the cap. I can say this will be our cap,” he said, in reference to the planned budget deficit for next year.
Standoff Between Italy and European Commission Escalates as Commission Rejects Italian Budget - Yves Smith - Even though observers expected the European Commission to reject Italy’s budget, having the standoff move one step further has, at least for now, has both sides digging in. Recall that the proposed Italian budget deficit of 2.4% of GDP for next year is within the normal deficit limits of up to 3% of GDP. And in a point not lost on Italian politicians and voters, France and Germany have broken that limit without having the sanctions gods called down on them. However, the budget rules also call for states with high debt to GDP ratios to reduce their debt loads. The budget forecasts prepared by the Italian government show that happening, but Brussels deemed the forecast growth rates to be too high. The ones they used would at best have the debt to GDP ratio stay more or less the same, an outcome the European Commission deems to be unacceptable. The formal turndown by the European Commission gives Italy three weeks to submit a new, compliant budget. The Italian governments’ defiant posture suggests that either it won’t do anything or will submit a new document that makes only cosmetic changes. From the Financial Times: The move is the first time Brussels has refused to endorse an EU member state’s draft budget…[Valdis] Dombrovskis [EC vice chairman responsible for the euro] and Pierre Moscovici, economics commissioner, urged Italy to immediately enter intensive negotiations… But Italian leaders said the government would “not give up” on its plans. “We know that, if we were to surrender, we would quickly return to the pro-bank and pro-austerity ‘experts’,” Luigi Di Maio, deputy prime minister and leader of the Five Star Movement, said on Facebook. “And so we will not give up. We know that we are on the right track. And so we will not stop.”Matteo Salvini, the other deputy prime minister who leads the far-right League, said Brussels was not “attacking a government, but a people”. Rome had said on Monday it would ignore commission demands for a rethink, triggering Tuesday’s formal rejection by Brussels. If Italy still fails to comply it could ultimately face fines under the EU’s excessive deficit rules…. A post earlier this month from Bruegel described in some detail how the sanctions would work. The EU has two options. One would be for failing to have a budget that converges to Italy’s medium-term objective of 0% deficit This is called “the preventive arm of the Stability and Growth Pact”. Talk about doublespeak. This sanction route would require Italy to pay a deposit: The other provision the European Commission could invoke is the “corrective arm” of the Stability and Growth Pact. As you might guess, this approach is more punitive.
Matteo Salvini to Brussels: ‘We are not changing a comma of the budget’ Matteo Salvini said on Thursday that the Italian government will not change “a comma” of its budget plan for next year, even though it was rejected by the European Commission. “As we are polite, we open the little letters from Brussels, we read them, we respond to them,” Salvini, the interior minister and leader of the far-right League party, said. “They write back and we respond, but we are not changing a comma of the budget.” “If Brussels or some big professors want Italy at zero growth, they have run into the wrong government and the wrong minister,” Salvini added, ANSA reported. “We are tranquil.” The European Commission on Tuesday gave Italy three weeks to rewrite its budget draft — or face further consequences. Prime Minister Giuseppe Conte told Bloomberg TV earlier this week that his government has no “Plan B.” Finance Minister Giovanni Tria wrote to the Commission on Monday, saying: “Italy is aware it has chosen a path that isn’t in line with EU rules. It was a hard decision but necessary in order to bring the country’s GDP back to pre-crisis levels and considering the ongoing economic difficulties for Italians.”
Apple and Samsung fined for deliberately slowing down phones Apple and Samsung fined €10 and €5m respectively by Italian competition authority for slowing older phones with software updates. Photograph: Michaela Rehle/Reuters Apple and Samsung are being fined €10m and €5m respectively in Italy for the “planned obsolescence” of their smartphones. An investigation launched in January by the nation’s competition authority found that certain smartphone software updates had a negative effect on the performance of the devices. Believed to be the first ruling of its kind against smartphone manufacturers, the investigation followed accusations operating system updates for older phones slowed them down, thereby encouraging the purchase of new phones. In a statement the antitrust watchdog said “Apple and Samsung implemented dishonest commercial practices” and that operating system updates “caused serious malfunctions and significantly reduced performance, thus accelerating phones’ substitution”. It added the two firms had not provided clients adequate information about the impact of the new software “or any means of restoring the original functionality of the products”.
Desirée Mariottini killing: Migrants held in Italy over girl’s death - Three migrants from Senegal and Nigeria have been arrested by police investigating the rape and killing of a girl whose death has been seized upon by the populist right. The body of Desirée Mariottini, 16, was found in a derelict building in an area of Rome known for drug trafficking. She had been drugged and gang raped. Right-wing Interior Minister Matteo Salvini hailed the arrests, condemning those behind the murder as "worms". It would not go unpunished, he said. Mr Salvini, who leads the anti-immigration League party, has spearheaded measures aimed at scrapping protection for migrants not given refugee status, as well as stopping NGO ships carrying rescued migrants from landing in Italy. When he visited the scene of Ms Mariottini's murder on Wednesday close to Rome's main Termini station, he was given a mixed reception of cheers and insults. There were shouts of "jackal", an insult used by critics who have accused him of taking political advantage of human tragedy. Investigators believe the victim fell unconscious for several hours last week after being given a cocktail of drugs by several people, and died of an overdose. She was sexually abused before she died.
Mass Wave Of 300 Migrants Storm High Border Fence To Enter Spain, One Dies - Reuters reports more migrant crisis chaos hitting Europe as over the weekend hundreds attempted to storm the border fence separating the small Spanish enclave of Melilla from Morocco. The mass wave of migrants made a daring attempt to climb the fence together — likely so that each would have a greater chance of avoiding being apprehended in the ensuing confusion and chaos — despite much of the particularly high border structure being topped with razor wire in many places. International reports put the figure that initially stormed the fence at about 300, but it appeared the coordinated attempt paid off for most, as authorities say some 200 actually made it onto Spanish soil; however, one man died during the incident. According to Reuters:One African migrant died and three others were injured when around 300 stormed the border fence on Sunday, the local authorities said. About 200 migrants managed to scale the seven-meter high metal barrier and were taken to a reception center in Melilla where officials started the process of identifying them.The man is reported to have suffered a cardio-respiratory event and expired after being treated by emergence services, according to local authorities. Thus far this year over 6,000 migrants have made it to Melilla and Spain’s nearby territory Ceuta according to U.N. refugee agency UNHCR's figures. Migrants have taken extreme risks in climbing the dangerous fence, sometimes using specially devised wooden-handled hooks and shoes fitted with spikes to help the climb. Oftentimes bloody t-shirts and garments can be found left behind hanging on the fence after people attempt to scale it (or rather there are "fences" plural, as the border is made up of three parallel fences).
ECB To End QE In December, Will Keep Rates Unchanged As Long As Necessary - In a statement that was a virtual replica from September, the ECB announced it was keeping its three key rates unchanged (main refinancing operations: 0.00%, marginal lending facility: 0.25%; deposit facility: -0.40%), that it will end its LSAP QE program at the end of December however "subject to incoming data confirming the medium-term inflation outlook", that it will reinvest the principal payments from maturing securities purchased "for an extended period of time" and that in keeping with its prior forward guidance, "rates will remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term."In short, no surprises, even though as Bloomberg notes, the ECB still says it "anticipates" to end new QE purchases in December, while some analysts had suggested the Governing Council might tweak the language to make the commitment stronger. Not yet.Full statement below:At today’s meeting the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term.Regarding non-standard monetary policy measures, the Governing Council will continue to make net purchases under the asset purchase programme (APP) at the new monthly pace of €15 billion until the end of December 2018. The Governing Council anticipates that, subject to incoming data confirming the medium-term inflation outlook, net purchases will then end. The Governing Council intends to reinvest the principal payments from maturing securities purchased under the APP for an extended period of time after the end of the net asset purchases, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation. Here is the redline comparison with the September statement showing the lack of changes.
Theresa May told by the EU to 'take it or leave it' as Brexit talks risk collapse - — The EU is not willing to offer Theresa May any further concessions in order to secure a Brexit divorce deal, a senior EU source involved in the negotiations has told Business Insider. "We've done all we can on this side. It's basically take it or leave it as far as we are concerned," the source told BI at the European Council's October summit in Brussels. The comments follow a difficult week for the prime minister in which she suffered a major backlash from Conservative MPs after telling EU leaders she was willing to extend the Brexit transition period by a "matter of months." May's offer, and the strength of the backlash, caught EU negotiators by surprise. "It was really interesting," a senior EU source told BI. "The UK hasn't formally requested it and the idea has always been there floating around. We don't really know why the prime minister said what she did." But while the timing of May's remarks about the transition came as a surprise, the substance did not. It is a long-standing, widespread belief in Brussels that Britain's departure from the EU would take longer than the 21 months initially agreed between the two sides. "Brexit is a process, not an event," a senior source in the European Parliament told BI. "Switzerland has been negotiating with the EU for years on one thing or another. Imagine what it's going to be for the UK. It'll be decades, a permanent negotiation. "And this is the easy bit. This is only the beginning." The current impasse in Brexit talks hinges on the so-called "backstop" proposals designed to prevent a hard border between Northern Ireland and the Republic after Brexit. Under May's version of the proposal, the whole of the UK would effectively stay in the customs union temporarily after the 21-month transition period has ended if no alternative arrangements have been secured. The EU is open to negotiating this sort of arrangement in the future but is adamant that a backstop covering Northern Ireland alone must be included in the Withdrawal Agreement currently being negotiated. The latter suggestion is toxic for May. Even if unlikely to be used, the mere possibility it could be used is anathema to the Democratic Unionist Party which props up May's government.
Hundreds of thousands rally in UK for second Brexit referendum - Hundreds of thousands of people rallied in central London on Saturday to call for a new referendum on Brexit. The People’s Vote campaign said an estimated 700,000 people turned out for the demonstration. The group argues that Prime Minister Theresa May is negotiating a bad deal with the EU and voters should have the final say on the outcome of the talks. May has ruled out a second referendum, saying the result of the 2016 vote to leave the European Union should be respected. The opposition Labour Party has not ruled out supporting another referendum but its main leaders have been cool on the idea. Labour’s London Mayor Sadiq Khan was among speakers who addressed the crowd, along with politicians from other major parties, the BBC reported. Celebrity speakers included actor Steve Coogan, chef Delia Smith and businesswoman Deborah Meaden. “It’s time for this vital issue is be taken out of the hands of the politicians and returned to the British people,” Khan said.
Almost 700000 march to demand 'people's vote' on Brexit deal - The centre of London ground to a halt as an estimated 700,000 people from all over the UK marched peacefully on parliament to demand a second referendum on Brexit. It was the biggest outpouring of public opposition to government policy since the anti-Iraq war protest in 2003.The number who descended on the capital to call for a “people’s vote” exceeded all expectations of both the organisers and police. Addressing the crowds, which included dozens of MPs from all political parties, the TV personality and food writer Delia Smith said Brexit threatened to cause “unmitigated chaos”.“The only way we can avoid this total madness and win back our future has to be a people’s vote,” she declared to loud cheers.The Liberal Democrat leader Vince Cable said the march showed that British people were beginning to realise that politicians could not deliver a successful Brexit that would protect their jobs, livelihoods and their children’s futures. They were afraid of the havoc that would ensue, and wanted a chance to stop it.“People have woken up to the potential disaster,” Cable said. “We’ve realised there isn’t a good deal coming out of this and a lot of people are frightened, people are worried.” The march coincided with a call from a senior government minister for Tory MPs to drop their “ideological obsessions” over Europe, which he said were now threatening to drive the country “off a cliff”.
Brexit: The Forward March of Remain? It Still Hasn’t Got Out of the Starting Blocks -I voted ‘Remain’. But sheer bloody uselessness of both the original campaign and now the doomed ‘People’s Vote’ / second referendum, needs accounting for, and then some. Forward march? Remain never even got out of the starting blocks – not for the Referendum, and despite their big march, not now either.Back in 2016 “Labour says R-E-M-A-I-N” said it all. The campaign started off bad, got worse and has never recovered. It is not the job of Labour to ever be in the business of remain, don’t change, everything’s fine as it is. Leave that to the Tories, that’s their niche appeal (the clue is in the name; Conservative).Corbyn’s “remain but reform” stance during the referendum campaign was quite right. It could have chimed with millions, most of whom wouldn’t drape themselves in an EU flag in a million years. But – besieged by opposition from his own MPs and the party bureaucracy – Corbyn left the Labour Remain campaign in the clutches of Alan Johnson. Alan writes half-decent memoirs but in the crucial capacity of leading Labour’s Referendum campaign he was a spectacular flop (even his own constituency voted Leave by a large majority). Corbyn should have grabbed control of the campaign and steered it in the direction he was following himself, but he wasn’t in a powerful enough position to do so. The caution killed dead Labour’s chance of swinging a large part of its working class Eurosceptic vote. The PLP ‘chicken coup’ of the summer of 2016 then justified itself mainly by the make-believe idea that Remain losing was all down to Jeremy. Seeing off ultra-Remainer Owen Smith in the second leadership challenge and doing better than expected in the 2017 General Election strengthened Corbyn – but too late to save that vote for Europe.However, the post Remain campaign wasn’t buying any of this. Forget Labour’s existential problem of having both large numbers of Leave-voting constituencies and large numbers of Remain ones. Forget that in a people’s vote, they’d lost. Their solution? Let’s have another one. If such a venture was to be secured, or at the very least to soften the worst excesses of a Tory Brexit, the Remain camp needed to shift popular opinion. In this they have singularly failed. And yet they plough on regardless. The message has stayed the same, the EU treated as an entirely unproblematic institution, a line that convinces no one except the pre-existing adherents.
Brexit could kill off entire industries, says Jaguar Land Rover chief Key industries will be destroyed by a hard Brexit, one of the country’s most powerful chief executives has predicted, amid warnings that Britain’s imminent EU exit has dented investment by four in five businesses. Ralf Speth, the boss of Jaguar Land Rover, said that such an outcome would lead to the closure of plants and major job losses as he warned that some exposed industries would have “no way to survive a hard Brexit”. His stark intervention comes as Downing Street desperately tries to reassure the business community over Brexit, despite senior Tories such as William Hague now putting the chances of a “no-deal” outcome at 50%. Theresa May conducted a conference call on Friday involving around 130 business figures after a chaotic week that veered perilously close to the collapse of Brexit talks. She told them an emergency summit could still be called in November to finalise a deal. Speth stood by his claim that tens of thousands of jobs would be lost. “That’s correct,” he told the Your Money channel during a trip to Australia last week. “Everybody can do the maths. It is very open and very transparent. It is not only at Jaguar Land Rover, but it is also an element for the supplier industry and export industry in the UK.” It will be very, very critical if we see a hard Brexit or no deal. Companies will disappear, plants will be closed. There’s no way to survive a hard Brexit for many industries. But I hope again that the politicians see it and act for the benefit of their own population.” Speaking on the same programme, Hague said he believed that May was at the most precarious moment of her premiership. “That’s the realistic situation,” he said. “If everybody sticks to their current position, a deal won’t happen. There isn’t at this moment a majority in parliament.”
Theresa May faces fight for her leadership as mutinous Tory MPs warn she is ‘drinking in last chance saloon’ Theresa May is facing a fight to save her leadership as mutinous Tory MPs demanded she appears before them to justify her Brexit plans. The prime minister has been urged to attend a so-called show trial at the 1922 Committee of Conservatives on Wednesday, after last week’s crunch summit in Brussels broke up without a deal on Britain exit terms. Amid an outpouring of backbench anger, former Brexit secretary David Davis said Ms May had “managed to anger not just Leavers but ardent Remainers as well”, in an article where he set out his own vision for Brexit, and prompted speculation about his leadership ambitions.It comes as Dominic Raab, his successor, said ministers would not agree to a longer transition period unless Brussels drops its demand for a backstop on the Irish border, following a Tory backlash about plans to keep Britain tied to the EU for another year. Critics of the prime minister claim the 48 letters needed to trigger a no-confidence vote could soon be reached. Tory MP Andrew Bridgen told The Mail on Sunday: “This week, Theresa May will find that she is drinking in the last chance saloon and the bad news for her is that the bar is already dry. “If she doesn’t turn up to the 1922 that will only make the letters go in even faster.” Tory rising star Johnny Mercer, who prompted a major row when he described the government a “shit show”, said he had received “overwhelming” support from within the party after speaking out. “I cannot continue to support an administration that cannot function,” he told The Sunday Times. “We need technocrats and managers – we couldn’t do it without them. But at this defining moment in our history, Britain cannot be led by them.”
Brexit: a total lack of substance I had the misfortune yesterday to read transcript of the interview between Dominic Raab and Andrew Marr. There is something about the way Raab speaks which induces a feeling akin to vertigo. One knows he is saying something, and possibly something significant. But every time one tries to focus on it, the room starts to spin and any meaning from the words gets lost in a multi-coloured blur. In terms of knowing any more about what transpires between the UK and the EU over the latest stages of the Brexit talks, we are not the slightest bit further forward. We simply get told to "listen to the mood music that came out of Brussels" last week, from which we will discern that "actually there's some goodwill and pragmatism on all sides". This, it seems, is something we need to see through. But any more than that is not for us mere mortals to know. Mr Raab is keeping his own counsel on what happens next. Furthermore, reviewing the transcript from the Nathalie Loiseau interview didn't take us very much further either. She is the French Europe minister and all she was able to do is confirm that which we already knew – "we need to fix the question of the Irish border". But we've known that for an awful long time.
The only thing of any interest from the interview was the non-comment about whether there will be a November European Council. Loiseau says – predictably – that if there is "sufficient progress towards a withdrawal agreement", there could be a meeting. But, she says, "there is no use meeting heads of state and government if negotiations have not come to an agreement". So far, that knocks on the head the idea that there is going to be a repurposed meeting to discuss contingency plans for a "no deal". This was something we expected to see, to allow the Commission to set up its legislative programme to deal with the technical issues involved. Alongside that, there has been speculation on whether any transitional period might be extended beyond the planned 21 months. But, according to Donald Tusk, this was not even discussed at last week's European Council. We simply get the same vibes: the Council President stands "ready to convene a European Council on Brexit, if and when the EU negotiator reports that decisive progress has been made". On 18 October, though, Tusk was saying that: "we should be clear that, as for now, not enough progress has been made". With Loiseau saying essentially the same thing yesterday, we can assume that the lack of progress remains.
MPs slam ministers for having NO idea how much extra Britain could pay to the EU if it extended Brexit - MINISTERS have refused to say how much extra the UK could pay to the EU if we extended Brexit, it was revealed today. Brexiteer John Redwood let rip, saying it could cost Britain an extra £15billion a year or more if we stayed in the EU for longer, under plans to extend the transition arrangement if needed. John Redwood said the billions more we could end up paying to the EU would be better spent on the NHS and Universal Credit That's money which could be spent elsewhere - on public services and giving hard-working Brits a tax break, he stormed. Treasury minister John Glen told the House of Commons today that "the length and cost of any extension to the implementation period is subject to negotiations." But Mr Redwood told MPs: "It could be £15billion or more for a year, and we would probably be having to accept liabilities that might extend for several years. "We are desperately in need of more money for our schools, for our hospitals, for Universal Credit, and for our defence... so we can honour our tax cutting pledges which we made in our 2017 manifesto." Ministers have already pledged to pay up to £39billion to leave the EU He urged the Treasury to "do some calculations" and figure out how much it could cost before MPs signed off on it. Brexiteers said that the EU could make us frontend our bill so they could use it in the next Budget. Mr Redwood added: "When will this Government stand up to the EU?
Brexit: Theresa May snubs Brussels over Irish border Theresa May dismissed Brussels’ demands yesterday for a backstop that would divide Northern Ireland from the rest of Britain, relieving pressure from Tory Brexiteers but increasing the chance of a no-deal exit. The prime minister secured a partial reprieve from her internal opponents with a categorical rejection of the EU’s insistence that the province remain subject to its customs and regulations until a final trade deal is struck. Downing Street sources said that she would not countenance such a backstop being contained in the withdrawal agreement that she is negotiating. Mrs May’s concession to the hard Brexiteers came as they faced widespread disgust at lurid, anonymous weekend briefings against her using violent imagery. Boris Johnson maintained the pressure, however, denouncing her efforts to find a compromise Brexit deal as “a cheat and a fraud on those who voted to leave”. The former foreign secretary made the accusation as he became the 44th MP publicly to declare membership of Stand Up 4 Brexit, which backs the hardest of exits, with negotiating demands likely to lead to a no-deal outcome. The group already includes David Davis, a potential leadership rival, Iain Duncan Smith, a former leader, and the former cabinet ministers Priti Patel, Owen Paterson, John Whittingdale and David Jones. As Mrs May fought to save herself and her version of Brexit, she confronted the EU with a demand that it make a legally binding commitment to agree one of two options for a backstop, to meet the guarantee that there would be no hard border in Ireland. Either the EU must allow Britain to extend the transition period beyond its present end-date of December 2020 or sign up to a UK-wide customs deal, she said, adding that either option must end “well before” June 2022. The EU wants a “backstop to the backstop”, which would involve writing into the withdrawal agreement that, if an alternative could not be found, a border would be created down the Irish Sea. This would hive off Northern Ireland from the rest of Britain, a prospect that is unacceptable to Mrs May.
UK will not renege on backstop commitment, says Bradley The British government will not allow a border to be put in place on the island of Ireland “in any situation” Northern Secretary Karen Bradley has told British and Irish parliamentarians. Ms Bradley said Theresa May’s government stands by its commitment to a backstop to guarantee that there would be no hard border after Brexit. Ms Bradley told the British-Irish Parliamentary Assembly in London that the British government was considering a proposal to extend the post-Brexit transition period which is due to end in December 2020. “A suggestion has been put forward last week at the European Council regarding an extension of the implementation period as a way to deal with the Border,” she said. “Now, we are looking at that. It is early days. It is a suggestion that has been put forward by the EU. And I want to be clear that we are committed to everything that we have agreed to in the joint report and we will ensure that there is no border on the island of Ireland.” The Northern Secretary reiterated, however, the British government’s rejection of a Northern Ireland-only backstop that would create a customs barrier in the Irish Sea.
Back down on Brexit or face revolt, May warned Theresa May is facing a rebellion by more than 40 of her MPs if she does not bow to fresh demands from Brexiteers in the next 48 hours. Downing Street has commissioned urgent legal advice to determine whether the prime minister must face down new demands by the European Research Group that could scupper a key part of the Brexit negotiations. Steve Baker, a leading officer for the group, has put down amendments to government legislation that would stop Northern Ireland being placed in a different regulatory and customs territory from the rest of Britain without a vote in the Stormont assembly. The Democratic Unionist Party would be unlikely to vote for this, even if the parliament were not suspended, which it is at present. Sources in the research group said that the move was a conscious attempt to see off the backstop, the insurance policy demanded by the EU to avoid a hard border between Northern Ireland and the Republic. It will be pushed to a vote on Wednesday unless Mrs May gives way — allowing the Brexiteers to show their strength in the Commons. The manoeuvre comes at the start of another challenging week for the prime minister, which will begin with her pleading with her party for more time to finish the Brexit negotiations by claiming that she has concluded 95 per cent of the deal. The backstop is the biggest sticking point.
Brexit deal latest – Theresa May rules out so-called ‘people’s vote’ on Brexit after march through London and insists she WILL honour result of the EU referendum THERESA May today ruled out a second referendum on Brexit - warning that it would destroy the public's trust in politics. After 700,000 activists marched through London calling for a so-called "people's vote", the PM insisted she will respect the result of the Leave vote from 2016. And she said a second referendum would actually be a "politicians' vote" which would show the public their views are not respected. In a Commons statement this evening, Mrs May also called on Brits to "hold our nerve" in order to win the "prize" of a deal with Brussels - as she unveiled her four-point Brexit plan.
Full text of Theresa May’s update to MPs on last week’s European Council Below is the text of Theresa May’s statement just delivered to the House of Commons
The Guardian view on the Tories and Brexit: rage against the facts -- To observe the Conservative party at Westminster on Monday was to watch a party that seems closer than ever to falling apart over Brexit. Paradoxically, however, nothing in the politics of Britain’s planned departure from the European Union had actually changed since last week. Theresa May still leads a minority government and a divided party, as she did before the weekend. Talks with the EU remain stalled over the Northern Ireland backstop arrangement, just as last week. Meanwhile Labour remains just as neuralgic about giving leadership to anti-Brexit concerns in the country as before. Many of the essentials remain unchanged, yet something has changed all the same. That something seems to be the confidence of rightwing Brexiter Conservative MPs that they will get the destructive and comprehensive break with the EU that they crave and are working for. The evidence for this altered mood came in multiple guises. The most chilling was the unusually vicious language which rightwing and Europhobic Tory MPs used over the weekend, under cover of anonymity, to attack Mrs May – that she would be “dead soon”, that the knife would be “stuck in her front and twisted”, that she was “in the killing zone” and that she should “bring her own noose”. These are the words of Tory MPs – male Tory MPs, it can safely be assumed – who have lost sight of propriety and proportion as they rage, not against her but against their own political powerlessness.There were other signs too. In defiance of the reality of their own lack of numbers and the absence of a unifying Tory leadership candidate other than Mrs May herself, there was renewed talk of a vote of no confidence by Tory MPs against her. A group of Brexiters led by the serially disloyal Iain Duncan Smith chose this otherwise inexplicable moment to travel to Brussels to pretend that they speak for Britain when they do not. Back in the Commons, the pro-Brexit schemer Steve Baker, having put down an amendment to the Northern Ireland bill which aimed to kill the backstop, later had to withdraw it for lack of support. Meanwhile the anti-European MP John Redwood and the pro-European Dominic Grieve, two men who barely seem to belong to the same party any longer, each attacked the government’s approach to Brexit from their diametrically opposed standpoints.
EU may offer British PM a UK-wide customs union The European Union will offer British Prime Theresa May a UK-wide customs union as a way around the Irish backstop issue, but it will have to be negotiated beyond the Withdrawal Agreement as a separate treaty, RTÉ News understands. The Withdrawal Agreement will contain a specific commitment to a UK-wide customs arrangement by way of a legal article, but that commitment will say that a formal EU-UK customs union will require a separate agreement. However, the EU, and the Irish Government still insist that a Northern Ireland-specific backstop remains in place, even if a separate UK-wide customs arrangement is negotiated. London has long sought a UK-wide customs arrangement as a way to avoid customs checks on both the Irish land border and along the Irish Sea. Re-worked elements of the draft Withdrawal Treaty have been seen by RTÉ News. They appear to be in conflict with Mrs May’s demand that the Withdrawal Agreement contain a UK-wide customs backstop that is "legally-binding" and temporary, and her position that a Northern Ireland-specific backstop remains "unacceptable". It is not clear that London will be content with a legal "commitment" to arrange a UK-wide customs backstop if it has to be negotiated as a stand-alone agreement that sits outside the Withdrawal Agreement. Yesterday in the House of Commons, Mrs May outlined four steps that the UK was demanding in order for an agreement to be reached, including "the commitment to a temporary UK-EU joint customs territory legally binding, so the Northern Ireland only proposal is no longer needed". RTÉ News understands that the promise of a UK-wide customs backstop will feature prominently near the top of a re-drafted Withdrawal Agreement, and that previous references to Northern Ireland being part of the EU's "customs territory" will be dropped. Northern Ireland will be referred to in more oblique terms further down the text, according to a draft. However, the text will say that in the event of the Northern-Ireland specific backstop coming into effect, a separate annexe will set out how that would work.
Fresh Cabinet split surfaces over post-Brexit immigration system New battle lines have been drawn within Theresa May’s Cabinet over Britain's post-Brexit immigration system, stoking divisions even further and presenting the Prime Minister with yet another headache.Home secretary Sajid Javid is understood to have dropped one of two models being considered under his predecessor, which would have favoured EU citizens by effectively granting them an automatic visa.City A.M. understands that he is pushing for a points-based system, akin to the one used in Australia, which would put EU workers on the same level as those from other parts of the world.However, the proposal – which is favoured by Brexiters and had been pencilled into the upcoming Brexit white paper – has been challenged by chancellor Philip Hammond and business secretary Greg Clark, according to two sources.It is thought the pair object to Javid’s plans because of the immediate impact it would have on businesses used to accessing EU talent without barrier as a result of freedom of movement, which will end when the UK leaves the bloc.One source said: “It was supposed to come before Cabinet three weeks ago so it could be included [in the white paper], but Hammond and Clark don’t like it, so that’s that.”The government has some time before having to commit a position on immigration, as officials await the Migration Advisory Committee (MAC)'s report in September before bringing forward an Immigration Bill to deal with the new regime.However the Brexit white paper is expected to be published on 9 July, giving little wiggle room for dissent on the other key issues to be thrashed out at the Chequers summit this Friday.
UK Readies Apocalyptic Flotilla Of Emergency Supplies In Case Of No-Deal Brexit - UK authorities are drawing up plans to charter a flotilla of supply ships to ferry in emergency food and medicines in the event of a "no-deal" Brexit next March, according to FT, which reports that the move was "greeted with disbelief at a stormy meeting of Theresa May's cabinet on Tuesday." The cabinet was told that the heavily used Dover-Calais route could quickly become blocked by new customs controls on the French side, forcing Britain to seek alternative ways of bringing in “critical supplies”.The warnings about the consequences of a disorderly British exit from the EU came at a cabinet meeting which saw ministers divided into two camps over how to unlock a deal in Brussels. One witness said there was “an almighty row”.The prospect of Britain facing shortages of perishable food and medicines provided a bleak backdrop to the cabinet discussions, as Mrs May urged her ministers to back her attempts to secure a breakthrough. -FTTheresa May announced weekly cabinet discussions on preparations for Brexit, deal or no-deal, saying "The government’s priority is to secure a deal." May's de facto deputy, David Lidington, told the cabinet that under a no-deal Brexit, the Dover-Calais route would be significantly crippled - running at just 12-25% of normal capacity for up to six months. "Whatever we do at our end, the French could cause chaos if they carry out checks at their end," said one UK official. "Dover-Calais would be the obvious pinch point. The French would say they were only applying the rules."If Britain left the EU under World Trade Organization rules, the UK and EU would be in different customs jurisdictions and would be expected to carry out checks on trade across the English Channel.Chris Grayling, transport secretary, has discussed with government colleagues the possibility of chartering ships, or space in ships, to bring supplies into other British ports, thus avoiding the Dover-Calais bottleneck. -FT"The idea of the government running ferry services is slightly farcical," said one person briefed on the plans. UK officials say the idea would be to use less congested sea routes for chartered ships. "We’re talking about bringing in critical supplies like food, medicines, maybe car parts." Around 30% of all the food in the UK is imported, according to the Department for Environment, Food & Rural Affairs. The port at Dover, meanwhile, handles over 2.5m heavy goods vehicles each year.
To Unlock Brexit Talks, Britain Must Atone for a Sin of Empire: the Partition of Ireland - The emotional core of the policy known as Brexit — shorthand for a British exit from the European Union — is not a national obsession with the details of trade policy. There are no passionate debates in pubs up and down the land over customs tariffs. For most people, Brexit is about something more visceral: national identity. The perceived need to “take back control” over Britain’s borders, and sharply limit the number of foreigners permitted to live and work in the country, was endorsed by a narrow majority of voters in the 2016 referendum. For nationalists, Brexit is a simple choice to withdraw from an economic bloc that effectively erases the borders between member states by requiring the free movement of people, as well as goods and services. What few Brexit supporters on the British mainland seemed to realize at the time, though, is that their country, the United Kingdom of Great Britain and Northern Ireland, has just one land border with the EU, and it is a highly contested one — the line of partition that the British Empire imposed on Ireland a century ago. For the past 20 years, it has been easy to forget about the mayhem and death caused by the imposition of that border, since joint membership in the EU facilitated a peace agreement that stopped the bloodshed in Northern Ireland and removed the need for security and customs checks along what one Irish writer has called the “line of malice” dividing Ireland.For all the talk of a British exit, however, it is important to understand that Brexit was primarily an English decision: Eighty-seven percent of the votes in favor of leaving were cast in England, and two-thirds of those who consider themselves more English than British voted to leave. While English nationalists rallied around nostalgia for a British Empire they once dominated, majorities in two other constituent parts of the U.K. — Scotland and Northern Ireland — voted against Brexit, setting the stage for one or both to eventually leave the union. That support for Brexit — like support for the British Conservative party — comes mainly from England helps to explain why talks with the EU over the country’s withdrawal are currently deadlocked over an issue that English nationalists seemed all but unaware of until recently: the frozen but still unresolved conflict in England’s first colony, Ireland.
May sets November date to trigger no-deal Brexit preparations - Theresa May has set a date for Whitehall to trigger a series of no-deal Brexit preparations as her government faces up to the possibility that there will be no agreement with the EU about Britain’s departure. With less than six months to go before the UK leaves the bloc, the cabinet has agreed that a flurry of activity will be triggered in the second week of November as the government prepares to crash out of the EU, informed sources said. Civil servants have also accelerated plans to lay down new laws and secondary legislation so that UK businesses and both British and EU citizens can prepare. The move follows concerns across government that preparations for how the UK might cope with crashing out the EU are still uncertain. The Brexit secretary, Dominic Raab, told cabinet colleagues on Tuesday that Whitehall departments needed to step up their efforts next month and move “from warning businesses to telling them to act”. No-deal Brexit would halt most UK-Spain flights, industry says Read more Whitehall has until now concentrated on the publication of more than 100 technical notices detailing the potential impact on particular industries but not on individual businesses and people. A source said that there would be an acceleration of preparations after MPs return from a short break on 12 November. “We have to get on with no-deal legislation. At the moment, we’re looking at the same legislation for a deal as no deal. In the case of no deal it would need royal assent before we leave. “There will be an awful lot to discuss. It will concentrate minds. Obviously we don’t want to upset the negotiations, but the clock is ticking and it will get harder and harder the later we leave it,” the source said. If May fails to negotiate a deal, the UK would no longer be part of the EU’s regulatory regime, introducing barriers for businesses trading between the UK and EU. It would also create uncertainty about the legal status of EU residents in the UK and Britons living in the other 27 member states.
Theresa May does little to reassure her Brexit critics at crunch backbenchers meeting Theresa May faced down her fractious party this evening but offered no new reassurances to the many critics of her beleaguered Brexit policy. The Prime Minister spoke to a meeting of backbench Conservative MPs - known as the 1922 committee - for just under an hour in a bid to win support for her negotiating stance with the EU. May is under pressure to resist Brussels demands to keep the UK in the EU's customs union indefinitely after Brexit if no trade deal can be brought into force by the end of December 2020. There is also anger her plan to tie the UK to the EU's rules on goods and agriculture will see the government limited in the type of trade deals it can strike after Brexit. The lead up to her appearance had been dominated by lurid language from unnamed Tories, with one claiming she was going to enter the “killing zone” and another saying May should “bring her own noose” to the meeting. Despite the outcry over the comments from politicians on all sides, one former minister repeated the stabbing metaphor as they entered the meeting. Referring to the practice of MPs banging desks to show support for the PM, the MP said: “They can only bang with one hand because in the other hand they have a knife.” May was asked to set out what concessions Brussels had made to the UK in the negotiations, and to give a cast iron guarantee that Britain would not be locked in the EU’s customs union indefinitely.
Nicola Sturgeon sees ‘ever greater’ prospect of no Brexit deal (Reuters) - Britain looks increasingly likely to leave the European Union next year with no deal, Scotland’s First Minister Nicola Sturgeon said on Wednesday. The United Kingdom is due to exit the EU on March 29 but Prime Minister Theresa May’s talks with Brussels have stalled over a fallback plan for the border between Northern Ireland and EU member Ireland. That is stoking concern about a possible failure to reach a Brexit deal, which most economists say would throw the world’s No. 5 economy into disarray. Sturgeon said she believed May’s government was “closing down the negotiating space” to reach a Brexit deal with the EU. “I am increasingly concerned, literally with every day that passes right now, that the prospect of no deal is becoming ever greater,” she told a Scottish parliamentary committee. “We’re in a fluid situation ... I think no deal might actually be the most likely outcome, and that is deeply concerning,” she said. “It is staggering incompetence that the government has allowed it to get to this stage.” Sturgeon, whose party supports Scottish independence, has said she will wait to see the detail of any Brexit deal before deciding on Scotland’s own path. But she has expressed frustration that Scotland will leave the EU reflecting Britain’s overall 52-48 percent vote to leave without, she argues, Scotland having had a proper say in the process. Scotland, one of the United Kingdom’s four nations, voted 62-38 percent to stay in the EU. “I think Brexit is frankly shaping up to the biggest failure of government policy and handling of a situation that any of us have seen maybe in our entire lifetimes,” she said.
Dominic Raab warns that Britain will leave the EU without a deal if Brussels takes a ‘deliberately intransigent’ approach to talks - Dominic Raab has warned that Britain will leave the EU without a deal if Brussels takes a "deliberately intransigent" approach to talks. The Brexit Secretary also said that French authorities in Calais could adopt a "go-slow" approach which would cause chaos for trade across the English Channel. The European Commission rejected Mr Raab's criticisms, insisting it was working to reach a deal. Mr Raab told MPs in the Commons: "There certainly is a risk of no deal, especially if the EU engage in a deliberately intransigent approach." Theresa May claims a deal on the UK's divorce from the EU is 95% complete, but the Irish border remains a major stumbling block. The Government is reportedly considering chartering vessels to ensure food and medicines can be brought in through alternative routes if there are problems on the Calais-Dover crossing in the event of a no-deal Brexit. Mr Raab told MPs: "We ... need to prepare for the worst-case scenario, where the authorities at Calais are deliberately directing a go-slow approach, by supporting a diversion of the flow to more amenable ports in other countries." He added that the Government was looking at "all possible contingencies to ensure that in a no-deal scenario British businesses and livelihoods are safeguarded".
The Democratic Unionist Party Isn’t Bluffing on Brexit. It’s Being ‘Thran.’ The key to understanding the Democratic Unionist Party (DUP), which props up the increasingly unstable British government of Theresa May and has for the past 15 years been the largest party in Northern Ireland, is that it comes from the Scots tradition. And understanding the DUP has never mattered more, thanks to a hung parliament in last year’s U.K. general election, which made the party a kingmaker in Westminster and gave its 10 members (out of 650 in the House of Commons) a disproportionate share of influence over what Brexit would look like. Non-Episcopalian Protestants, such as the DUP’s founders, were historically referred to as “dissenters.” Indeed, “Protestant, Catholic, and Dissenter” was the rallying cry of 18th-century Irish republicans. Dissent in the broadest sense of the word remains deeply ingrained in the DUP. It can regard standing outside the mainstream as a badge of honor—and for most of the party’s existence that also included the unionist mainstream. The DUP was founded by the Presbyterian firebrand and self-styled doctor of theology Ian Paisley in 1971, as violence ramped up at the outbreak of Northern Ireland’s Troubles—a 30-year conflict that Paisley’s street agitation and anti-Catholic rhetoric helped, in part, to inflame. Northern Ireland had been governed since its inception by the Ulster Unionist Party (UUP), a broad coalition of interests from across the Protestant population but with its culture drawn from the English tradition—bourgeois, establishment, and mocked by its detractors as “big-house unionism.” Paisley had no desire to fit under that big house’s roof; he wanted to knock it down. As the Troubles loomed, a fault line emerged within the UUP over whether to make the state of Northern Ireland more politically inclusive or double down on unionist control.
Brexit: ‘Several’ WTO members block Britain’s attempt to fast track deal The US and China are reportedly among 20 countries attempting to block Britain from agreeing a fast-track deal with the World Trade Organisation (WTO) on its post-Brexit terms of trade with the rest of the world. Liam Fox, the international trade secretary, admitted several WTO members had “expressed reservations” about the government’s plan to stay on terms similar to those it still enjoys as a member of the European Union (EU). Britain is a full member of the WTO, but its membership is bound up with the EU, meaning it has to come to an independent agreement with the trade body. Watch more Michel Barnier told to make contingency plans for second referendum Tory MEP says EU citizens in UK should not have voting rights Argentina will use no-deal Brexit to take back Falklands – minister Whitehall is now facing a series of separate negotiations with countries over the limits on the amount of certain goods which will be allowed into Britain, and what tariffs the UK will set on imports. “As expected, some trading partners have expressed reservations about our proposed treatment of tariff rate quotas,” Dr Fox said in a written statement to the commons.
Britain faces trade talks with 20 nations over WTO proposals - Britain is preparing for trade negotiations with almost two dozen nations after they objected to the terms it proposed for its World Trade Organisation membership after Brexit.Liam Fox confirmed yesterday that countries have “expressed reservations” over the draft text put forward by the UK before its departure from the European Union.The trade secretary said that Britain “intends to enter negotiations with relevant partners” over its future rights and obligations at the WTO.About 20 members are understood to have opposed the country’s initial proposal, dashing hopes of an unchallenged arrival at the Geneva-based body that governs global trade. The WTO has 164 members and was set up in 1995 as a regulator and somewhere for countries to negotiate deals and settle disputes. The UK, which is currently a member through the EU, will require its own independent terms of membership after leaving the bloc.
‘Ecuador says Assange must sort out own issues with Britain Ecuador does not plan to intervene with the British government on behalf of WikiLeaks founder Julian Assange in talks over his situation in the South American country’s London embassy, Ecuador’s foreign minister said on Tuesday. Foreign minister José Valencia said in an interview with Reuters that Ecuador’s only responsibility was looking after Assange’s wellbeing, after the Australian national sued the country over new conditions placed on his asylum in the London embassy. “Ecuador has no responsibility to take any further steps,” Valencia said. “We are not Mr Assange’s lawyers, nor are we representatives of the British government. This is a matter to be resolved between Assange and Great Britain.” This position marks a departure from Ecuador’s previous practice of maintaining dialogue with British authorities over Assange’s situation since granting him asylum in 2012, when he took refuge in Ecuador’s London embassy after British courts ordered his extradition to Sweden to face questioning in a sexual molestation case. Julian Assange launches legal action against Ecuador Read more That case has since been dropped but friends and supporters have said that Assange now fears he could be arrested and eventually extradited to the United States if he leaves the embassy. (
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