Fed's Balance Sheet Shrinks The Most Since Start Of QT; QE Unwind Hits $321 Billion - One month after the Fed quantitative tightening entered its peak monthly unwind phase, during which the Fed's balance sheet is scheduled to shrink by "up to" $30 billion in Treasuries and "up to" $20 billion in MBS a month, for a total of “up to” $50 billion a month, on October 31 the balance sheet declined by $33.8 billion - the biggest weekly total yet - consisting of $23.8 billion in Treasuries, $8 billion in Mortgage Backed Securities, and a modest decline in various other assets. As a result of Wednesday's maturities, the Fed's balance sheet has now shrunk by $321 billion to $4.140 trillion, the lowest since February 12, 2014; since October 2017, when the Fed began its QE unwind, it has now shed $321 billion, or just over 7% from its all time highs. While MBS totals shifted around over the month, the Treasury decline took place in one day as there were no Treasury securities maturing on Oct. 15, while three security issues matured all in one day on Oct. 31, totaling $23 billion. Those were allowed to “roll off” entirely without replacement. In other words, the Treasury Department paid the Fed $23 billion for them, money which the Fed will promptly "shred", digitally speaking. Total October TSY maturities were $7BN below the $30BN cap, and while December sees $59N in Treasuries maturing, the Fed's maturity cap means that roughly half of this amount will be allowed to rollover, while $29 billion worth of new Treasuries will be repurchased. Then, one month later, One month later, in December, another $18 billion in Treasuries are scheduled to mature, and so forth as determined by the maturity schedule of the Fed's current Treasury holdings (shown below) until such time as the Fed finally halts QT and/or launches even more QE. Finally, for traders hoping to time the unwind of the balance sheet "to the day", this is problematic as there are discrete steps in the process of actual liquidity extraction: as WS notes, the drains runs from the bond market through Treasury auctions and then the Treasury Department’s cash account to the Fed. Throughout the process, the timing of the drainage gets disbursed – as does the impact on the markets.
As the Fed Tightens, Where Will the Credit Crunch Pinch First? - Memories are short and recent lessons are quickly unlearned. Market participants have so quickly forgotten that the financial crisis did not descend upon us out of nowhere. It was the result of seven-years of artificially low interest rates. It was the result of herding behaviors that reduced consideration of credit and liquidity risks coupled with demands, by investors, for instruments with higher yields than could be gotten on an unlevered basis. As a result, issuers benefitted from an ability to originate riskier loans and sell much of those volumes to charter constrained investors who forgot that “risk is the price you never thought you would have to pay”.The Federal Reserve began raising rates in the third quarter of 2004 and, within 24 months banks had withdrawn liquidity to third party mortgage originators and had tightened underwriting standards. As liquidity reversed and homeowners lost their ability to refinance (on an economic basis) investors began to wake up to the withdrawal of liquidity and the risks of rising credit losses which then reinforced the negative feedback loop that claimed homeowners, investors, financial institutions and Main Street.As investor appetite for securitized mortgage assets collapsed, and banks were neither able or willing to hold loans they once had either been able to package into MBS, or as the non-investment grade tranches of MBS packaged into CDOs, we then saw bank loan growth – long supported by mortgage origination and refinancing – collapse. Now, ten-years later, as the Fed has begun to drain liquidity from the system, investors are ignoring structural changes in bank lending markets that have occurred during this economic expansion. If the Fed is successful in reshaping the yield-curve we will again be faced with new and expressible opportunities in many banks, private equity firms, business development corporations (BDCs) and underlying commercial credits. Assuming the Fed continues on its stated path we are approaching the prelude to one of the most significant distressed and restructuring cycles in modern history. As shown in the chart above, the lag between Federal Reserve rate hikes and their impacts on the real economy is usually 12-24 months. As a result, it is time to begin identifying the resulting current and future opportunities. We have begun to drill down into the specific exposures of the publicly traded BDCs and those banks which have been most reliant to C&I originations.
On Maximizing Employment, a Case for Caution - Atlanta Fed’s Macroblog - Over the past few months, I have been asked one question regularly: Why is the Fed removing monetary policy stimulus when there is little sign that inflation has run amok and threatens to undermine economic growth? This is a good question, and it speaks to a philosophy of how to maintain the stability of both economic performance and prices, which I view as important for the effective implementation of monetary policy.In assessing the degree to which the Fed is achieving the congressional mandate of price stability, the Federal Open Market Committee (FOMC) identified 2 percent inflation in consumption prices as a benchmark—see here for more details. Based on currently available data, it seems that inflation is running close to this benchmark.The Fed's other mandate from Congress is to foster maximum employment. A key metric for performance relative to that mandate is the official unemployment rate. So, when some people ask why the FOMC is reducing monetary policy stimulus in the absence of clear inflationary pressure, what they really might be thinking is, "Why doesn't the Fed just conduct monetary policy to help the unemployment rate go as low as physically possible? Isn't this by definition the representation of maximum employment?"While this is indeed one definition of full employment, I think this is a somewhat short-sighted perspective that doesn't ultimately serve the economy and American workers well. One important reason for being skeptical of this view is our nation's past experience with "high-pressure" economic periods. High-pressure periods are typically defined as periods in which the unemployment rate falls below the so-called natural rate—using an estimate of the natural rate, such as the one produced by the Congressional Budget Office (CBO). As the CBO defines it, the natural rate is "the unemployment rate that arises from all sources other than fluctuations in demand associated with business cycles." These "other sources" include frictions like the time it takes people to find a job or frictions that result from a mismatch between the set of skills workers currently possess and the set of skills employers want to find. When the actual unemployment rate declines substantially below the natural rate—highlighted as the red areas in the following chart—the economy has moved into a "high-pressure period." For the purposes of this discussion, the important thing about high-pressure economies is that, virtually without exception, they are followed by a recession. Why? Well, as I described in a recent speech:
The Fed needs better rules. This Democratic bill is a start. The Federal Reserve has two jobs. Unfortunately, over the past few decades, it's been doing one of them quite poorly: Ensuring unemployment remains low and wage growth high.Rep. Ro Khanna (D-Calif.) thinks this is an issue Democrats should take on. And this afternoon he's releasing a bill to get the ball rolling.The "Coretta Scott King Full Employment Federal Reserve Act of 2018" — named after the African-American activist who made full employment a hallmark of her civil rights efforts — would amend the Federal Reserve's obligations in several ways.Right now, the mission statement Congress gave the Federal Reserve says the central bank should promote "stable prices" (i.e. low inflation) and "maximum employment." These responsibilities have an inverse relationship: When the Fed raises interest rates, it lowers prices but also holds down job growth. When it lowers rates, it promotes jobs but also risks creating more upward pressure on prices. Striking a balance is obviously very important. But the law also lets the central bank decide for itself what "stable prices" and "maximum employment" mean. For the former, the Fed has picked a 2-percent inflation rate target. For the latter, well, it's not really clear. As a result, the Fed's record on monetary policy since the 1980s looks like a clear case of tolerating unemployment (in red) to keep down inflation (in blue).
PCE Price Index: September Headline & Core - The BEA's Personal Income and Outlays report for September was published this morning by the Bureau of Economic Analysis. TThe latest Headline PCE price index was up 0.12% month-over-month (MoM) and is up 1.99% year-over-year (YoY). The latest Core PCE index (less Food and Energy) came in at 0.15% MoM and 1.97% YoY. Core PCE is just about at the Fed's 2% target rate. The adjacent thumbnail gives us a close-up of the trend in YoY Core PCE since January 2012. The first string of red data points highlights the 12 consecutive months when Core PCE hovered in a narrow range around its interim low. The second string highlights the lower range from late 2014 through 2015. Core PCE shifted higher in 2016 with a decline in 2017 only to bounce back later in the year. The first chart below shows the monthly year-over-year change in the personal consumption expenditures (PCE) price index since 2000. Also included is an overlay of the Core PCE (less Food and Energy) price index, which is Fed's preferred indicator for gauging inflation. The two percent benchmark is the Fed's conventional target for core inflation. However, the December 2012 FOMC meeting raised the inflation ceiling to 2.5% for the next year or two while their accommodative measures (low FFR and quantitative easing) are in place. More recent FOMC statements now refer only to the two percent target.The index data is shown to two decimal points to highlight the change more accurately. It may seem trivial to focus such detail on numbers that will be revised again next month (the three previous months are subject to revision and the annual revision reaches back three years). But core PCE is such a key measure of inflation for the Federal Reserve that precision seems warranted. For a long-term perspective, here are the same two metrics spanning five decades.
Q4 GDP Forecasts --From Goldman Sachs: Q4 2.6% (qoq ar). [Oct 29 estimate]. From Merrill Lynch: [W]e revise down 4Q GDP to 2.8% from 3.0% [Nov 2 estimate]. And from the Altanta Fed: GDPNow:The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in thefourth quarter of 2018 is 2.9 percent on November 2, down from 3.0 percent on November 1. [Nov 2 estimate] From the NY Fed Nowcasting Report The New York Fed Staff Nowcast for 2018:Q4 stands at 2.6%. [Nov 2 estimate]CR Note: These early estimates suggest GDP in the high 2s for Q4.
What Are the Fiscal Costs of a (Great) Recession? St Louis Fed - The Financial Crisis of 2008 and related Great Recession raised the U.S. federal debt and fiscal deficit to record peacetime levels. Figure 1 shows these two variables: Federal debt increased from 62 percent of gross domestic product (GDP) in 2007 to over 100 percent in 2013. Recessions, especially large ones, can be costly affairs for taxpayers. Why is that? Figure 1: The Federal Debt and Deficit Through the Financial Crisis and Great Recession. One can decompose changes in the federal deficit into automatic stabilizers and discretionary policies. Automatic stabilizers are government policies that fluctuate automatically with the business cycle and may help stabilize the economy. For instance, during recessions, higher unemployment leads the government to spend more money on unemployment benefits, while lower incomes reduce income tax revenues. Thus automatic stabilizers generate predictably larger deficits during recessions. These policies comprise the bulk of the federal budget—three-quarters of total federal spending is on entitlement programs, many of which fluctuate substantially with business conditions. Congress also annually sets discretionary spending to fund departments, such as for defense and education; agencies, such as NASA and the Environmental Protection Agency (EPA); and a variety of other programs. Discretionary spending accounts for one-quarter of total spending before interest payments.
Treasury Announces Record Debt Sale In Upcoming Refunding Auction - According to the latest quarterly refunding statement, the US Treasury is about to sell a record amount of debt, surpassing levels seen both in the aftermath of the Great Depression and the Global Financial Crisis. On Wednesday, the US Treasury Borrowing Advisory Committee unveiled that it will increase the amount of debt to be sold at the upcoming quarterly refunding auctions to $83 billion from $78 billion three months earlier. This will be the fourth straight quarter of increasing refunding auction sizes and is driven by the soaring US deficit shortfall, which in 2018 hit $779 billion the highest since 2012, as well as the Fed's ongoing balance sheet shrinkage. Here are the details of the TBAC's proposal:
- Auctions for 2-, 3- and 5-year notes will increase by $1 billion in both of the next two months; last quarter Treasury implemented increases in all three months
- As a result, the size of 2-, 3-, and 5-year note auctions will increase by $2 billion, respectively, by the end of January.
- Auctions for 7-, 10-, 30-year notes to be raised by $1 billion in November and then kept steady through January
- Auctions for 2-year floating-rate note will rise by $1 billion in November
- Auctions for TIPS will see various changes with total tips issuance rising $20 billion-$30 billion in 2019, however there will be no TIPS supply changes over next three months; a new CUSIP 5-year will be added to the TIPS calendar, with the new security to be introduced October 2019
In total, the Treasury will sell $83 billion in long-term debt next week - consisting of $37BN in 3 Year notes, $27BN in 10 Year notes and $19BN in 30 Year notes, versus $78 billion in August’s refunding week sales.
Yellen says rising deficit is unsustainable: 'If I had a magic wand, I would raise taxes' - The United States is taking on too much debt right now, a problem that is will only worsen moving forward, former Federal Reserve Chair Janet Yellen said Tuesday. "If I had a magic wand, I would raise taxes and cut retirement spending," Yellen told CNBC's Steve Liesman at the Charles Schwab Impact conference in Washington, D.C., who characterized the U.S. debt path as "unsustainable." The U.S. fiscal deficit rose to $779 billion in fiscal 2018, up 17 percent from the previous fiscal year. This happened after President Donald Trump signed a bill late last year slashing the corporate tax rate to 21 percent from 35 percent. Spending levels climbed to their highest in six years while revenue only increased slightly.Yellen noted this will only get worse as more baby boomers retire and spending on retirement and health care programs grow. The former Fed chair also said she worries about the "role of the U.S. economy" as the two countries slap tariffs on each other's goods.
How Trump Boosted GDP (In 1 Simple Chart) - It's all about catering to the military-industrial-complex. There is a big spender in the White House who loves the military. In the goofy land of highly questionable macro measurements, the U.S. economy has expanded at a 2.9% annual rate since April of 2017, according to the Commerce Department. Faster government spending, (government spending is more accurately measured than other parts of the economy), accounted for nearly half of the acceleration, according to a Wall Street Journal analysis.And get this, 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. Defense outlays grew 6% in the fiscal year that ended Sept. 30, thanks in part to a bipartisan budget agreement to boost government spending this year and next by nearly $300 billion above limits set in a 2011 law, including $165 billion more for military. WSJ notes: Lockheed Martin Corp. , the world’s largest defense contractor, said Tuesday it expects revenue to increase up to 6% in 2019 as it boosts production of missiles and F-35 combat jets. The company reported a $1.47 billion profit for the quarter ending Sept. 30, compared with $963 million a year earlier. Its order backlog rose to $109 billion. Boeing Co. , the world’s largest aerospace company by sales, raised its revenue and profit outlook for the year, thanks in part to strong demand for defense projects. The company won a trio of Pentagon contracts in recent weeks, after four years of sales declines in its defense unit.Gus Faucher, chief economist at PNC Financial Services Group, said"“I would expect that, with the increase in the defense discretionary caps, that its contribution is going to increase, and in fact it will be leading overall GDP growth by mid-2019.” We're gonna need moar war.
Mattis: Talks with Europe on U.S. withdrawal from arms pact yield no alternatives WaPo - — U.S. Defense Secretary Jim Mattis said his talks with European allies so far have not resulted in any suggestions for addressing Russia’s violation of a Cold War-era arms control pact other than for the United States to withdraw. Mattis said he asked European allies for ideas at a North Atlantic Treaty Organization meeting in Belgium earlier this month, about two weeks before President Trump announced that the United States planned to pull out of the Intermediate-Range Nuclear Forces Treaty, or the INF Treaty. During his consultations with allies, Mattis said, he reiterated his position that the status quo — with Russia violating the treaty and the United States abiding by it — was unsustainable and wouldn’t last. He asked the other 28 nations in the alliance to offer suggestions about what the United States could do other than pull out of the treaty. “I said, ‘We need to know if you have any ideas,’ ” Mattis recounted in comments on a trip from Bahrain to the Czech Republic. “So far we have not been able to find any.” Mattis consulted European allies for suggestions more than two weeks before President Trump announced on Oct. 20 that he planned to withdraw the United States from the bilateral pact, which Ronald Reagan and Mikhail Gorbachev signed in 1987, marking a breakthrough in Cold War arms control diplomacy. Despite Mattis’s consultation with NATO allies, it’s unclear how many of them were aware in advance that Trump was going to announce a decision by the United States to withdraw from the pact. Speaking at a news conference with Mattis in Prague, Czech Prime Minister Andrej Babis described Washington’s decision to pull out of the treaty as “bad news” and expressed hope that relations between the United States and Russia would improve.
Nuclear Treaty Abrogation Imperils Global Security – Yale Global -- On October 20, Donald Trump told reporters of his intention for the United States to withdraw from the Intermediate-Range Nuclear Forces Treaty because “Russia has violated the agreement.” Article VI of the US Constitution specifically includes treaties in describing the supreme law of the land, and the treaty includes a process for amendments and withdrawal. “Trump’s proposed abrogation of the Intermediate-Range Nuclear Forces Treaty reveals once again his dangerous lack of preparation for dealing with urgent strategic matters,” explains Louis René Beres, professor emeritus of international law at Purdue University. “Trump's latest seat-of-the pants policy prescription does not concern only Russia, and could backfire catastrophically by encouraging nuclear proliferation in other parts of the world.” The Constitution does not effectively check the president’s ability to start nuclear war, either deliberately or accidentally. Beres urges the US National Command Authority, the US Congress and citizens to remind the president that terminating the treaty would exacerbate a nuclear arms race and the ability to prepare for all plausible scenarios.
U.S. Withdrawal From the INF Treaty and the End of the Bilateral Era - Carnegie Moscow Center
After INF, is New START next to go? - Brookings esident Donald Trump has announced that the United States will withdraw from the 1987 Intermediate-range Nuclear Forces Treaty. His National Security Advisor, John Bolton, discussed that with Russian officials in Moscow earlier this week. The president’s decision is a mistake. Will he make an even bigger error by withdrawing from — or not extending — the 2010 New Strategic Arms Reduction Treaty? To be sure, Trump had grounds for abandoning the INF Treaty. Moscow violated the agreement by deploying a prohibited intermediate-range cruise missile. The Russians have resisted U.S. entreaties since 2013 to come back into compliance. The president’s decision now, however, ensures the United States gets the blame for the treaty’s demise. It has already provoked criticism from NATO allies. Withdrawal will leave Russia free to deploy land-based intermediate-range missiles to target Europe and Asia, missiles for which the U.S. military currently has no counterpart. Once the INF Treaty lapses, only one agreement will remain to constrain U.S. and Russian nuclear forces: the 2010 New Strategic Arms Reduction Treaty. New START limits the United States and Russia each to no more than 1,550 deployed strategic warheads and no more than 700 deployed strategic missiles and bombers. Its provisions for data exchanges, notifications and inspections yield a huge amount of information on Russian strategic forces New START is in the U.S. interest. It nonetheless has several strikes against it. First, it was signed by Barack Obama. We know how Trump feels about anything his predecessor did. In January 2017, he dismissed New START as a bad Obama deal in his first Oval Office phone conversation with Vladimir Putin. Second, Trump enjoys tearing up agreements. The INF Treaty will join the Trans-Pacific Partnership, Paris Climate Accord, Joint Comprehensive Plan of Action with Iran and others in the growing list of international pacts trashed by his administration. Third, Bolton disdains arms control. He opposed New START, in part because the treaty entailed equal limits for the United States and Russia. Unlike the INF Treaty, however, Russia has complied with New START’s limits. The U.S. military very much approves of the treaty. A decision to withdraw would provoke a political firestorm, including from Republican ranks.
Russia Eyeing Military Base In Cuba As US Prepares To Leave Nuclear Missile Deal -A senior Russian official proposed that his country is seriously considering establishing a military base in Cuba in response to Trump’s plan to quit the INF treaty, predicting that "a new Cuban crisis" could erupt if the US and Russia fail to come to terms.According to General Vladimir Shamanov, the head of the Russian lower house of parliament's defense committee and a former airborne troops commander, with the US planning on walking away from the Cold War-era Intermediate-Range Nuclear Force (INF) treaty, Russia's response should be in the "spirit of those times", by reactivating Russian military facilities in Cuba. The U.S. and Russia have accused one another of violating the agreement, but President Donald Trump has announced his intention to now end it, paving the way for new nuclear and conventional weapons systems at a time of heightened tensions, Newsweek reported. "In order to strengthen our military presence in Cuba, we need at least the consent of the Cuban government. After all, this question is more political than military, and today, it’s probably premature to talk about any specific measures in response to a possible U.S. withdrawal from INF," Shamanov told the Interfax news agency."Now the active phase of assessing this scenario is underway and proposals will next be prepared with estimates," he added.This issue may be raised when Cuba’s new president, Miguel Diaz-Canel, visits Russia in early November. Diaz-Canel, a fresh face of Cuba’s Communist Party, is wary of foreign military presence, but “politics is living matter,” Shamanov said, adding that “Cuba has its own interests and it was hurt by US sanctions."The Russian politician went on to say that he would "not exclude" the prospect of a Russian military base in the Caribbean country coming up during these talks, which would also reportedly include a $50 million Russian loan for Cuba to buy weapons. Selected by his country's National Assembly to replace 86-year-old Raúl Castro in April, Díaz-Canel will then go on to visit the world's four other communist countries—China, North Korea, Vietnam and Laos.
Mattis- US Needs 'Offensive Space Weapons' To Counter China, Russia - Unsurprisingly given the intense focus on Saudi Arabia's brutal proxy war, coverage of Defense Secretary James Mattis' appearance at the US Institute of Peace in Washington on Tuesday focused on his call for a ceasefire in the Yemeni civil war. But the former Marine general's wide-ranging interview touched on a number of other topics, including his support for building out the US's offensive capabilities in space.As RT highlighted in its coverage of Mattis's talk, when asked about the nascent US 'Space Force', Mattis explained that dominance in space is essential for preserving the American way of life. And in order to counter geopolitical rivals who might abuse their own space superiority, the Pentagon must pursue the development and deployment of space weapons."We're going to have to be prepared to use offensive weapons in space should someone decide to militarize it and go on the offensive. You cannot simply play defense. No sport in the world, no competitive sport in the world, can simply play defense and win. And this is not an area where we want to be second place."Mattis, who once said that he "wasn't against" the space force, has previously warned about Russia and China's efforts to develop their own space firepower and described their efforts as a direct threat to American autonomy. To counter this, the US will need to deploy more advanced satellites and weaponry, which in addition to their defense capabilities, will also have an economic component.As Mattis explained, space is "critical to our economy, it’s critical to our way of life, we’ve grown reliant on it," Mattis said. In addition to the surveillance capabilities, US satellites are used for navigation, communication, commerce, and banking.And while he hopes the US will never have to resort to space warfare, as competing powers deploy more resources in the final frontier, eventually the US will be forced to reckon with the possibility that rival powers might not abide by the longstanding policy of space neutrality that has existed between nations since the 1960s. One example of this happened more than a decade ago, when China carried out its first test of an anti-satellite weapon back in 2007. "We're going to have to recognize if nations are not willing to live by those rules...we're going to have the ability to defend, and the ability to do offense.
U.S. Navy’s Costliest Carrier Was Delivered Without Elevators to Lift Bombs - The $13 billion Gerald R. Ford aircraft carrier, the U.S. Navy’s costliest warship, was delivered last year without elevators needed to lift bombs from below deck magazines for loading on fighter jets. Previously undisclosed problems with the 11 elevators for the ship built by Huntington Ingalls Industries Inc. add to long-standing reliability and technical problems with two other core systems -- the electromagnetic system to launch planes and the arresting gear to catch them when they land. The Advanced Weapons Elevators, which are moved by magnets rather than cables, were supposed to be installed by the vessel’s original delivery date in May 2017. Instead, final installation was delayed by problems including four instances of unsafe “uncommanded movements” since 2015, according to the Navy. . The elevator system is “just another example of the Navy pushing technology risk into design and construction -- without fully demonstrating it,” said Shelby Oakley, a director with the U.S. Government Accountability Office who monitors Navy shipbuilding. Problems with the elevators add to questions about the Navy’s plan to bundle the third and fourth carriers in the $58 billion Ford class into one contract. It’s part of the service’s push to expand its 284-ship fleet to 355 as soon as the mid-2030s.
Paper Cuts: The American President and the Prince of War – Even though President Trump has increased U.S. troop levels in Afghanistan by as much as 90 percent since taking office, he is exasperated by the elusive nature of “victory” in America’s longest running hot war. It’s understandable: the quagmire that has bedeviled three presidential administrations with 17 years of U.S., NATO, and Afghan forces fighting Taliban insurgents has required “a massive international development effort involving 40 countries, and hundreds of billions of dollars.” Enter Erik Prince, a wealthy, well-connected former Navy SEAL who has spent over two decades providing contracted security services and training for the U.S. government. Prince has made it clear to the Trump Administration he wants to lift the Afghan burden from the U.S. government and instead install an efficient corporate-style approach, supervised by Western upper level “mentor” managers and funded largely by extracting and trading Afghanistan's valuable mineral assets. It may only be a matter of time before the President decides to put the war—and the resources to fund it—in the hands of private interests. If it happens, it would be quite a coup. Contracting under the company name Blackwater and smaller related companies, Prince’s businesses were awarded more than $1 billion in contracts for classified work for the CIA and for private security provided to the U.S. State Department in the early years following the terrorist attacks of September 11, 2001. However, a staggeringly violent incident in 2007 temporarily derailed the fortunes of this soldier of fortune. Blackwater contract employees, hired to protect American diplomats, in a tragic overreaction to a mistaken threat, killed 17 Iraqi civilians at a busy traffic circle in Baghdad.With the election of Donald Trump and the new incoming administration, Prince found a more favorable political environment in the United States. Prince was a friend of President Trump’s then-chief strategist Stephen K. Bannon and supported by President Trump’s son-in-law, Jared Kushner. Additionally, the billionaire businessman was a generous contributor to the President’s election campaign. (Coincidentally, Prince’s sister, Betsy DeVos, is President Trump’s education secretary.)
John Bolton Praises Openly Fascist Jair Bolsonaro as ‘Like-Minded’ Ally — Declaring not just sympathy but outright admiration for a fascist who has threatened violence against his leftist political opponents, celebrated the use of torture, and promised to give the police free rein to murder at will, U.S. national security adviser John Bolton on Thursday praised Brazil’s newly elected strongman President Jair Bolsonaro as a “like-minded” partner who shares the Trump administration’s commitment to so-called “free market principles.”“The recent elections of like-minded leaders in key countries, including Ivan Duque in Colombia, and last weekend Jair Bolsonaro in Brazil, are positive signs for the future of the region, and demonstrate a growing regional commitment to free-market principles, and open, transparent, and accountable governance,” Bolton said during a speech at Miami-Dade College.“[T]oday, in this hemisphere, we are also confronted once again with the destructive forces of oppression, socialism, totalitarianism,” Bolton added.But Bolton went on to proclaim that with the rise of Bolsonaro, “the Troika of Tyranny in this hemisphere—Cuba, Venezuela, and Nicaragua—has finally met its match,” coining a phrase that immediately drew comparisons to former President George W. Bush’s infamous “Axis of Evil” line, which was used repeatedly to justify America’s disastrous invasions of Iraq and Afghanistan.Vox‘s Alex Ward described Bolton’s remarks as a “modern-day ‘Axis of Evil’ speech.” Intensifying fears that the Trump administration could be considering military action against Latin American nations it has deemed enemies, Bolton announced that the White House plans to take “direct action against” Cuba, Venezuela, and Nicaragua “to defend the rule of law, liberty, and basic human decency in our region.”
US Continues to Support the Bloody Dictatorship of Saudi Arabia - The U.S. continues to support the dictatorship of Saudi Arabia—as a key ally—even after the horrific murder of Jamal Khashoggi and the horrendous five-year bombing campaign on Yemen. — Killing is not new for Saudi Arabia. While the world’s media has been focused on the horrific murder and dismemberment of Saudi defector Jamal Khashoggi in the Saudi Consulate in Istanbul the Saudi’s horrendous five-year bombing campaign on Yemen has been overshadowed.This bombing has killed over 16,000 people, destroyed water and sewage infrastructure, left one million people with cholera and created a naval blockade that has starved 13 million of the most vulnerable: children and the elderly. The United States facilitates the bombing by selling weapons to Saudi Arabia, refueling Saudi bombers and providing intelligence reportedly to decrease the number of civilian casualties, which it appears it has not done. On Oct. 13, just after midnight, after the closing ceremonies of the conference I was attending in Istanbul, I travelled to the Saudi Consulate to stand in vigil for the disappearance and, believed at that time to be the probable murder of Khashoggi. I was also there to acknowledge the catastrophic Saudi war on Yemen and U.S. complicity in that war. New friends from Istanbul whom I met at the conference, accompanied me. They had been to many vigils at the consulate in the past 10 days. Other than offering mild condolences to Jamal Khashoggi’s family, the Trump administration has slowly indicated concern about what happened in the Saudi diplomatic compound. But in a recent campaign stop, Trump applauded the actions of an official who “body-slammed” a journalist, and recall that in a Feb. 17, 2017, tweet, President Trump called the media “the enemy of the people.” Journalists I spoke with in Istanbul cited President Trump’s comments on the U.S. press as one of the causes of the impunity of authoritarian governments to jail critical journalists, though such arrests certainly predate Trump’s presidency. Istanbul is filled with journalists who are exiled from their countries for their views on authoritarian regimes—Saudi Arabia, Egypt, Iraq, Syria, Libya, Somalia, Yemen. Journalists that I spoke with in Istanbul are fearful that the authoritarian governments from which they fled may attempt to silence their dissent by violent means such as the Saudi government used against Jamal Khashoggi.
Jamal Khashoggi: Saudi crown prince described journalist as a dangerous Islamist in call with White House, officials say -- Saudi Crown Prince Mohammed bin Salman described slain journalist Jamal Khashoggi as a dangerous Islamist days after his disappearance in a phone call with President Trump’s son-in-law Jared Kushner and national security adviser John Bolton, according to people familiar with the discussion.In the call, which occurred before the kingdom publicly acknowledged Khashoggi’s death, the crown prince urged Kushner and Bolton to preserve the U.S.-Saudi alliance and said the journalist was a member of the Muslim Brotherhood, a group long opposed by Bolton and other senior Trump officials.The attempt to criticize Khashoggi in private stands in contrast to the Saudi government’s later public statements decrying his death as a “terrible mistake” and “terrible tragedy.”“The incident that happened is very painful, for all Saudis,” Mohammed, the kingdom’s de facto leader, said during a panel discussion last week. “The incident is not justifiable.”The Saudi ambassador to the United States, Khalid bin Salman, described Khashoggi last month as a “friend” who dedicated “a great portion of his life to serve his country.” In a statement released to The Washington Post, Khashoggi’s family called the characterization of the columnist as a dangerous Islamist inaccurate.
US Senators Call on Trump to Suspend Nuclear Agreement Talks With Saudi Arabia — Five Republican US senators have called on President Donald Trump to suspend talks to reach a civilian nuclear cooperation agreement with Saudi Arabia over the recent killing of journalist Jamal Khashoggi.In a letter sent to the president on Wednesday, the politicians said they have been concerned by Riyadh’s ongoing refusal to adopt policies and technologies that limit the enrichment of uranium and reprocess plutonium, among other nuclear fuel-making activities.The killing of Khashoggi, a prominent Washington Post columnist, on 2 October at the Saudi consulate in Istanbul raises even more questions about the current thinking of Saudi decision-makers, they said.“The ongoing revelations about the murder of Saudi journalist Jamal Khashoggi, as well as certain Saudi actions related to Yemen and Lebanon, have raised further serious concerns about the transparency, accountability and judgment of current decision-makers in Saudi Arabia,” the letter reads.The letter was signed by five Republican senators, including Marco Rubio and Rand Paul, who have been vocal in their criticism of Saudi Arabia in the aftermath of Khashoggi’s murder.Four of the senators – Rubio, Paul, Cory Gardner and Todd Young – are on the powerful Senate Committee on Foreign Relations, which writes legislation related to foreign policy.The senators said they would block “any agreement at this time” in light of their concerns. Trump has been under increasing pressure to hold Saudi Arabia – and Crown Prince Mohammed bin Salman, in particular – accountable for the death of Khashoggi.Asked on Wednesday if he believed the Saudis had betrayed him in relation to the Khashoggi case, Trump responded: “They haven’t betrayed me … maybe they have betrayed themselves”. “We’ll have to see how it all turns out,” the president said.
‘Extraordinarily Important’: Top US General Defends Saudi Relationship, Yemen War - The top U.S. general in charge of troops in the Middle East defended America’s ties to Saudi Arabia and said on Monday that military relations between Washington and the kingdom are not changing, as public outrage over the murder of Washington Post columnist Jamal Khashoggi and the war in Yemen recedes from recent headlines. “There’s no change with any military relationship we have with Saudi Arabia. From the military perspective, I characterize the relationship as strong, deep, and I think a beneficial one for us. They have been a – they’re an extraordinarily important security partner in the region,” said Gen. Joseph Votel, the top commander of U.S. troops in the Middle East, told Defense One on Monday. Saudi Arabia, and particularly Crown Prince Mohammed bin Salman, has been accused of orchestrating Khashoggi’s gruesome dismemberment inside the Saudi consulate in Istanbul, Turkey. Outraged members of Congress and public critics have called for President Trump to respond to the murder by ending or curbing U.S. arms sales to the kingdom, cutting off relations, enacting sanctions, or withdrawing U.S. support for the Saudi-led coalition fighting in Yemen. Commentary pages have been flooded by a cacophony of hoped-for retributions and declaratory statements that the U.S.-Saudi relationship would never be the same. Punishment should happen, they say, if not for Khashoggi’s murder, then for the regime’s inaccurate air-war in Yemen that has caused civilian casualties. For the military, that doesn’t appear to be the case — at least, not yet. Defense Secretary Jim Mattis said on Sunday that U.S. support for Saudi Arabia would continue unabated. “We do not accept that there is any reason for a slow-down in the effort to bring this to a negotiated end,” he said, one day after meeting Saudi Minister of Foreign Affairs Adel Jubeir at the Manama Dialogue, an annual gathering of Persian Gulf country security leaders.
Khashoggi fiancee hits at Trump response, warns of ‘money’ influence (Reuters) - The fiancée of Jamal Khashoggi on Monday criticized President Donald Trump’s response to his killing, urging him to set aside U.S. trade interests in the push for truth, and demanded Riyadh disclose more details to bring those who ordered it to justice. The death of Khashoggi - a Washington Post columnist and a critic of Saudi Arabia’s de facto ruler, Crown Prince Mohammed bin Salman - sparked global outrage and pitched the world’s top oil exporter into crisis. Trump has hedged his criticism of Saudi leaders over Khashoggi, insisting he does not want to imperil a “tremendous order” of $110 billion of weapons he says will support 500,000 U.S. jobs - figures that experts say are highly exaggerated. His fiancée, Hatice Cengiz, told an audience on a visit to London she was disappointed with Trump’s approach. “I am disappointed by the actions of the leadership in many countries, particularly in the U.S.,” she said. “President Trump should help reveal the truth and ensure justice be served. He should not pave the way for a cover-up of my fiance’s murder. Let’s not let money taint our conscience and compromise our values.”
Regime Change In Riyadh- The CIA Has Just Publicly Dumped MbS - A fascinating FT article suggests Western intelligence agencies have now dumped Saudi crown prince Mohammed bin Salman after he's been personally accused by world leaders — foremost among them Turkey's President Erdogan and US President Trump — for ordering the brutal murder and dismemberment of journalist Jamal Khashoggi. Implicit in the article, rich with quotes from current and former US and Western intelligence officials, is the further suggestion that these very intel operatives appear to now be actively seeking MbS' ouster. But the other fascinating aspect to FT's commentary is what it reveals about both the mainstream media and intelligence 'deep state' perspective on the kingdom and Middle East politics in general: a head of state is deemed good or bad insofar they are amenable to the goals of Western intelligence agencies. While this might be obvious to any student of the history of covert action in the 20th century, it is rare to see it acknowledged so out in the open in a mainstream publication. The FT article reads like a "bragging rights" competition over which crown prince could be better formed by US intelligence: MbS or his recently ousted cousin Mohammed bin Nayef (MbN)?For the intelligence officials interviewed, some named but most unnamed, the ultimate problem is not that a sadistic crown prince just ordered that a prominent journalist be literally hacked up while still breathing, but that the resulting PR nightmare has damaged CIA and MI6 inroads into Riyadh. According to FT: The slow collapse in trust, played out in public, represents a dramatic departure from the close and covert relationship that the CIA and MI6 developed with his ousted cousin and rival for power, Mohammed bin Nayef. Essentially this translates to an absurd cry of "gone are the good ole days when the Saudi crown prince was a dutiful CIA asset!" Such CIA confessions to FT are astounding for their unabashed and barefaced frankness over just what US foreign policy actually values in an allied foreign leader. Now that MbS has quickly fallen out of favor with the "global community," FT can openly print its following conclusion: When Mohammed bin Salman was promoted to crown prince last year, he did not just become heir to the Saudi throne. He also displaced a darling of western intelligence.
The Foreseeable Disaster in Yemen - Michael Hanna and Thanassis Cambanis call for ending U.S. complicity in the war on Yemen: In almost every case, the war has made old problems worse while creating new ones.The Houthis were not by any stretch an Iranian proxy at the outset of the current conflict, but welcomed ever greater levels of assistance and coordination from Tehran as they responded to the Saudi-led escalation. Today, the Houthis are much more strategically aligned with Iran than ever before—as a result of a military campaign that was supposed to curtail Iranian reach. Furthermore, the harm to civilians is a clear result of the air war and blockade: Saudi and Emirati talking points on this part of the conflict have failed to convince most Yemen observers. The Saudi coalition supposedly sought to combat the minimal Iranian influence in Yemen that existed in 2015, but Iranian influence has grown as a direct result of their intervention. This was predictable, and anyone paying close attention could see that this is what was going to happen. In April 2015, just a couple weeks after the Saudi-led intervention began, I wrote: Perversely, the war on Yemen could increase Iranian influence by forcing Yemenis to look for help against the attack on their country. Iran’s influence has grown in Yemen, but it still remains quite limited. Wars fought to “prevent” future threats tend to create the dangers that they were supposedly going to eliminate. As I said back in 2015: Waging a war now in an attempt to squelch a threat that does not yet exist is always a bad bargain: it inflicts damage that didn’t have to happen, it imposes costs on all involved that could have been avoided, and it turns a potentially manageable situation into a prolonged and ruinous conflict. More than three years after I wrote that, 14 million people are at risk of starving to death, a new cholera epidemic is starting, and as many as 66,000 children are already dying each year from preventable causes. None of this had to happen, and most of it has happened because outside governments chose to interfere in a conflict and made it far worse than it could have been without their intervention. The U.S. should never have been involved in this war, and it is imperative that the U.S. end that involvement and pressure the Saudi coalition to accept a ceasefire and lift the blockade on the country.
Secretary of State Pompeo calls for end to fighting in Yemen (Reuters) - U.S. Secretary of State Mike Pompeo called on Tuesday for a cessation of hostilities in Yemen and said U.N.-led negotiations to end the civil war should begin next month. In a statement, Pompeo said missile and drone strikes by Iran-allied Houthi rebels against Saudi Arabia and the United Arab Emirates should stop, and the Saudi-led coalition must cease air strikes in all populated areas of Yemen. Yemen is one of the poorest Arab countries and faces the world’s worst humanitarian crisis, exacerbated by a nearly four-year-old war that pits the Houthis against the internationally recognized government backed by Saudi Arabia, the UAE and the West. “The time is now for the cessation of hostilities, including missile and UAV strikes from Houthi-controlled areas into the Kingdom of Saudi Arabia and the United Arab Emirates,” Pompeo said, using an acronym for unmanned aerial vehicles. “Subsequently, Coalition air strikes must cease in all populated areas in Yemen,” he added. The United States helps the coalition by refueling its jets and providing training in targeting. Pompeo said last month that he had certified to the U.S. Congress that Saudi Arabia and the UAE were working to reduce civilian casualties in Yemen. Three-quarters of Yemen’s population, or 22 million people, require aid and 8.4 million people are on the brink of starvation.
U.S. Says Talks to End Yemen’s War Must Start in November The U.S. said talks to end the war in Yemen must start in November, pressuring Saudi Arabia to dial back its aggressive foreign policy following the murder of a vocal critic of the kingdom. In separate remarks, Secretary of State Mike Pompeo and Defense Secretary James Mattis said the Saudi-led coalition that entered the conflict in 2015 and Iran-backed Houthi rebels must move toward a political resolution to a war that has created one of the world’s worst humanitarian disasters. Mattis said the warring parties should meet in Sweden in 30 days. British Prime Minister Theresa May told lawmakers the U.K. is backing efforts to reach a political agreement. “A nationwide cease fire will only have an effect on the ground if it’s underpinned by a political deal between the conflict parties,” she said. The killing of Jamal Khashoggi, a former Saudi court insider, in the kingdom’s consulate in Istanbul has focused international attention on the policies of Saudi Crown Prince Mohammed Bin Salman. In addition to the war in Yemen, the 33-year-old has led an unprecedented political and economic embargo against neighboring Qatar and engaged in diplomatic confrontations with Germany and Canada. “The time is now for the cessation of hostilities,” including missile and drone strikes by Houthi rebels against Saudi Arabia and its ally the United Arab Emirates, Pompeo said in a statement. “Subsequently, coalition air strikes must cease in all populated areas in Yemen.” While the statements are the strongest yet from U.S. officials against the war in Yemen since the Saudi campaign began, forcing the Houthis into an agreement at a time when their chief backer, Iran, is increasingly isolated by American sanctions could prove difficult. “The question becomes what enforcement measures the U.S. has in mind?” Saudi Arabia assembled a coalition of mainly Sunni-ruled countries to restore the government of Yemen President Abd Rabbuh Mansur Hadi after it had been forced out of much of the country by the Shiite Houthis. The war has created a humanitarian catastrophe in the impoverished country, with thousands of civilians killed, and displacement, hunger and sickness rampant. Three-quarters of the country’s 28 million people need aid to stave off hunger and disease, and half of those require it urgently to survive, according to the UN. Hadi’s forces have since regained large parts of Yemen, yet the Houthis still control the capital, Sana’a, and have resisted attempts to force them to negotiate a solution that would diminish their influence. Mattis in a speech on Tuesday said Saudi Arabia and the U.A.E. were ready for talks. “We’ve got to move toward a peace effort and we can’t say we’re going to do it some time in the future,” he said. “We need to be doing this in the next 30 days.”
US Officials Unexpectedly Call for Immediate End to War in Yemen — Mohammed Ali al-Houthi, the head of Ansar Allah’s Supreme Revolutionary Committee, welcomed U.S. Secretary of Defense James Mattis’ recent remarks urging an end to the three-year-long Saudi-led war in Yemen. In a tweet, Al-Houthi urged Mattis to announce an immediate end to the war, as well as to the Saudi coalition’s blockade that has triggered a famine in the world’s poorest nation.Yemen’s Ansar Allah (Houthis) and its allies have been receptive to previous initiatives to end the war, which has killed tens of thousands of civilians. Al-Houthi stressed on Wednesday that any initiative would be welcomed so long as it does not undermine Yemen’s independence and sovereignty.Dr. Yaser al-Houri, Secretary of the Supreme Political Council, the highest political authority in Sana’a, told MintPress:“We welcome any call for peace that will end the war and we will deal responsibly with any future peace talks under the umbrella of the United Nations.”United Nations Envoy for Yemen Martin Griffiths called on Wednesday for all concerned parties to engage constructively with UN efforts to resume political consultations and to agree on a framework for political negotiations. The United Nations says it hopes to resume Yemen peace talks within a month.The UN call comes a day after Mattis’ urgent call. Mattis said, during a discussion on Tuesday at the U.S. Institute of Peace (USIP) in Washington, that Saudi Arabia and the United Arab Emirates were ready for talks:“We have got to move toward a peace effort here, and we can’t say we are going to do it sometime in the future. We need to be doing this in the next 30 days.”France’s Defence Minister Florence Parly also called for an end to the war in Yemen on Tuesday, saying:“It is more than time that this war ended and it is also important — even France’s priority — that the humanitarian situation must improve and that humanitarian aid can get through.”
Yemen – After 200,000 Died An Embarrassed U.S. Finally Calls For Negotiations - The war on Yemen moved towards the most violent form of war. A siege on a whole country with the obvious intent to cause a genocidal famine of the resisting population.The attacking nations, the U.S., Saudi Arabia, Britain and the UAE, planned to grab Yemen's resources but failed in their war. They are now making first moves to end the war. They finally recognized that they are unable to win while the financial and reputational costs of the stalemate steadily increases. It is not by chance that this move comes after clown prince Mohammad bin Salman's recent Khashoggi disaster. It was that murder that moved the attention to his leading role in the genocidal war on Yemen.A recent large reportage by the New York Times drew attention to the war induced famine. It includes haunting pictures of starving small children. In another censorship idiocy Facebook removed mentions of the piece that included pictures because they showed 'naked' dying children with no flesh on their bones. That might have been a friendly gesture by Facebook owner Mark Zuckerberg to his chap Mohammad bin Salman, but it only increased the coverage of the issue. More reports about the true casualty numbers of the war on Yemen emerge. A year ago Moon of Alabama criticized the often quoted "10,000 dead" that the media continue to repeat as the official casualty count of the war: Up to July 2017 the U.S.-Saudi coalition had flown more than 90,000 air-sorties over Yemen. Most of those will have involved weapon releases. Are we to believe that only 10,000 civilians have been killed by all these bombs and the additional artillery, sharpshooters and suicide attacks? That would be inconsistent even with western reports of the known mass incidents during the war. 100,000 dead civilians caused by the war so far is a more likely number than the never changing 10,000.
Saudi Arabia Answers Pompeo's Call For Yemen Ceasefire By Ramping Up Airstrikes - The Saudi Air Force has unleashed a massive attack across the Sana’a Governorate over the last 48 hours, reports Middle East-based Al Masdar News citing Yemeni sources on the ground. This appears to be the Saudi response to the U.S. call for a ceasefire "in the next 30 days" announced by Secretary of Defense Jim Mattis and Secretary of State Mike Pompeo a mere two days ago.According to the reports from Sana'a, the Saudi Air Force heavily bombarded the capital city and its surroundings, hitting a number of sites that allegedly have a Houthi presence. The string of airstrikes also hit civilian neighborhoods, including the area around Sana'a International Airport — all resulting in an unknown number of casualties. Given the timing it appears the Saudis are ready to unleash as many bombs as possible ahead of a potential US negotiated ceasefire suggested by Pompeo and Mattis; or alternately it could be the Saudis are now quickly escalating the war further to ensure a ceasefire cannot be obtained. This comes as the Trump administration has released early details of a UN-brokered peace plan aimed at ending the war in Yemen, beginning with a ceasefire within a month along with talks to be held in Sweden.
GOP senators want Trump to halt nuclear technology talks with Saudis after Khashoggi killing -Five Republican senators have asked the Trump administration to suspend talks to transfer U.S. nuclear technology to Saudi Arabia following the killing of journalist Jamal Khashoggi at the kingdom's consulate in Turkey.The lawmakers, led by Senator Marco Rubio, threatened to block any agreement to export civilian nuclear technology to Saudi Arabia, potentially setting up a showdown with the White House. The Trump administration has courted the Saudis as they seek to build 16 nuclear power reactors over the next 25 years, an endeavor that would generate tens of billions of dollars in economic activity.In a letter to President Donald Trump, the senators say the slaying of Khashoggi, as well as other foreign policy issues, raise questions about whether the Saudi leadership should be entrusted with U.S. nuclear technology and know-how."The ongoing revelations about the murder of Saudi journalist Jamal Khashoggi, as well as certain Saudi actions related to Yemen and Lebanon, have raised further serious concerns about the transparency, accountability, and judgment of current decisionmakers in Saudi Arabia," the lawmakers wrote in a letter to Trump."We therefore request that you suspend any related negotiations for a U.S.-Saudi civil nuclear agreement for the foreseeable future."The letter was also signed by Cory Gardner of Colorado, Dean Heller of Nevada, Rand Paul of Kentucky and Todd Young of Indiana. Rubio, Young, and Gardner were part of a bipartisan group of senators that earlier asked the administration to start an investigation into Khashoggi's death and determine whether the United States should impose human rights sanctions on Saudi individuals.
Saudi Arabia's DC Lobbyists Reassess Ties to Kingdom -- Saudi Arabia has been a windfall for Washington's influence industry, but the killing of journalist Jamal Khashoggi has left K Street lobbying firms hunkered down and reassessing their ties to the kingdom. Over the past decade, Washington lobbyists have raked in $76.9 million advocating for the Saudis on everything from nuclear power to fending off legislation that would leave the kingdom liable in lawsuits filed by family members of victims in the Sept. 11 terrorist attacks. Those ties are now facing their biggest test in years as Khashoggi's death this month inside the Saudi consulate in Istanbul draws worldwide criticism. Even President Donald Trump, who has built his Middle East policy around close relations with the kingdom, has said the Saudis' shifting explanations amounted to "one of the worst in the history of cover-ups." Five lobbying firms announced shortly after Khashoggi disappeared that they were exiting their Saudi contracts. But at least 18 firms appear to be sticking by the kingdom, even as some expressed concern. Among them are Hogan Lovells LLP, Hill & Knowlton Strategies and MSLGroup, some of the kingdom's longest-serving Washington hands. "This is so embarrassing that they don't know what to do," said Jean-Francois Seznec, a senior fellow at the Atlantic Council who has worked extensively in the Gulf region. "No one knows what's going to happen and everybody's been hit by a two-by-four and they're just totally stunned." This year, Saudi Arabia has spent $2.9 million on lobbying, according to federal filings, as the kingdom orchestrated a revamp of its image with a U.S. tour by Crown Prince Mohammed Bin Salman that included a gala dinner at the Saudi Embassy in Washington and stops at U.S. finance, business and entertainment capitals.
Authorities probing immigrant Saudi sisters’ mystery deaths — Police are investigating the mysterious deaths of two sisters from Saudi Arabia whose bodies, bound together with tape, washed up on New York City’s waterfront last week. The sisters, Tala Farea, 16, and Rotana Farea, 22, were discovered Oct. 24 on a bank of the Hudson River, about 225 miles from Fairfax, Virginia, where they lived and were reported missing in August. As of Tuesday, investigators still had not determined how they died. The sisters’ bodies were taped together and facing each other, but had no obvious signs of trauma, police said. They were both fully clothed. Their mother told detectives the day before the bodies were discovered, she received a call from an official at the Saudi Arabian Embassy, ordering the family to leave the U.S. because her daughters had applied for political asylum, New York police said Tuesday. Saudi Arabia’s Consulate General in New York said in a statement that it had “appointed an attorney to follow the case closely.” New York City police sent a detective to Virginia to learn more about the sisters. Chief of Detectives Dermot Shea said they were particularly interested in finding out what happened since they were reported missing and what led them to New York City.
Defending Saudis on Khashoggi to Take Down Iran -The murder of Saudi journalist Jamal Khashoggi has exposed the many sinister tentacles of the U.S.-Saudi alliance. It has revealed the American role in perpetuating the war crimes and humanitarian disaster in Yemen, and demonstrated how Saudi money influences Congress, DC think tanks, the U.S. media, and even Donald Trump and his family. These forces in recent weeks have worked hard to muddy the waters and deflect blame for Khashoggi’s murder or to downplay its significance. But one part of this Saudi support network has largely flown under the radar. Its primary focus isn’t necessarily to promote Saudi Arabia and whitewash its autocracy or human rights abuses. Nor is there much love for Trump personally or any seeming motive to prop up his financial ties to Saudi Arabia. Instead, these DC operators are interested in maintaining the status quo with the Saudi monarchy for one purpose: confronting Iran.A recent interview BBC World News conducted with Foundation for Defense of Democracies President Clifford May perfectly encapsulates how this wing of the pro-Saudi network has operated since Khashoggi’s murder. The argument that May unfolded during the BBC segment is almost formulaic. He tried to sow confusion about the details of the Khashoggi murder, questioned whether Crown Prince Mohammad bin Salman (MbS) was involved, raised fears about the consequences of holding MbS and the Saudi government responsible, and shifted the conversation to why the United States should continue business as usual with Saudi Arabia. May then engages in a little fear-mongering by alluding to unwelcome internal power struggles to oust MbS from power. “It is not in the U.S. interest to see … instability in Saudi Arabia to the point where you have an ultra-Wahabi government or an ISIS government or something like that.” May has obviously failed to notice that Saudi Arabia already has an ultra-Wahabi government. Finally, he pivots to the main point: Iran “There’s also the problem of Iran which seeks hegemony in the Middle East. And the U.S. doesn’t want that, the Saudis don’t want that,” May concludes, suggesting the two countries need to continue to work together to confront Iran. Ultimately, it doesn’t matter what Saudi Arabia does, since it’s a necessary ally in the fight to take down Iran.
US Blames Iran for Impoverishing Civilians While Prepping Further Sanctions - Caitlin Johnstone — The United States government is preparing to implement an additional level of sanctions against Iran for its refusal to meet a dozen demands that are so absurdly unreasonable that they have been called a regime change policy in all but name. The sanctions which have already been implemented have already badly hurt the Iranian economy, the sting of which is being felt first and foremost by Iran’s poor and sickly. In an article titled “Iran’s poor to bear brunt of Trump’s oil sanctions”, Financial Times documents how poor Iranians are already strained to the breaking point from the cutbacks they’ve had to make in food and groceries. An article titled “In Iran, US sanctions are being felt, with harsher measures to come” by the Christian Science Monitor details difficulties Iranian charities are having getting medicine to sick children, including chemotherapy treatment, having already run out of four life-saving drugs. In an article titled “US fails to shield humanitarian trade with Iran as sanctions loom”, Al Monitor details the way humanitarian aid, while ostensibly exempt from the sanctions, has been severely impacted by their economic aspect because humanitarian aid costs money. The Wall Street Journal further explains the effects of America’s economic warfare on ordinary Iranian civilians in an article titled “Iran Moves to Shelter Millions as U.S. Sanctions Bite”. This is before the US implements a new level of attacks upon Iran’s oil industry, a primary economic lifeline, which is scheduled to begin on November fifth. If Iran can’t find a way to get around these crushing sanctions in a significant way, many civilians already stretched far too thin will be pushed past the breaking point. And who is the US government blaming for the consequences of its economic warfare? Why, the Iranian government, of course.The International Monetary Fund @IMFNews is projecting a 3.6% decline in #Iran’s economy next year. That’s what happens when the ruling regime steals from its people and invests in Assad—instead of creating jobs for Iranians, they ruin the economy.— Secretary Pompeo (@SecPompeo) October 29, 2018
New Iran Sanctions Risk Long-term US Isolation - The next step in the Trump administration’s “maximum pressure” campaign against Iran comes this Sunday, Nov. 4, when the most severe sanctions will be imposed on the Islamic Republic. Crucially, they apply not only to Iran but to anyone who continues to do business with it. It’s not yet clear how disruptive this move will be. While the U.S. intention is to isolate Iran, it is the U.S. that could wind up being more isolated. It depends on the rest of the world’s reaction, and especially Europe’s. The issue is so fraught that disputes over how to apply the new sanctions have even divided Trump administration officials. The administration is going for the jugular this time. It wants to force Iranian exports of oil and petrochemical products down to as close to zero as possible. As the measures are now written, they also exclude Iran from the global interbank system known as SWIFT.It is hard to say which of these sanctions is more severe. Iran’s oil exports have already started falling. They peaked at 2.7 million barrels a day last May—just before Donald Trump pulled the U.S. out of the six-nation accord governing Iran’s nuclear programs. By early September oil exports were averaging a million barrels a day less. In August the U.S. barred Iran’s purchases of U.S.-dollar denominated American and foreign company aircraft and auto parts. Since then the Iranian rial has crashed to record lows and inflation has risen above 30 percent. Revoking Iran’s SWIFT privileges will effectively cut the nation out of the dollar-denominated global economy. But there are moves afoot, especially by China and Russia, to move away from a dollar-based economy.The SWIFT issue has caused infighting in the administration between Treasury Secretary Mnuchin and John Bolton, Trump’s national security adviser who is among the most vigorous Iran hawks in the White House. Mnuchin might win a temporary delay or exclusions for a few Iranian financial institutions, but probably not much more.
US threatens to smack SWIFT with sanctions if it fails to cut off financial services to Iran - US Treasury Secretary Steven Mnuchin has warned global financial messaging service SWIFT on Friday that it could be penalized if it doesn’t cut off financial services to entities and individuals doing business with Iran. The warning comes as the Trump administration announced the re-imposition of all US sanctions on Iran that had been lifted under the 2015 nuclear deal. The latest sanctions take effect November 4 and cover Iran's shipping, financial and energy sectors. "SWIFT is no different than any other entity," Mnuchin told reporters, adding "We have advised SWIFT that it must disconnect any Iranian financial institutions that we designate as soon as technologically feasible to avoid sanctions exposure."The Trump administration is pressuring its allies to cut Iranian oil imports to “zero” next month. By cutting the country off from SWIFT, Iran would lose its ability to be paid for its exports and to pay for imports.Washington has been pressuring SWIFT to cut Iran from the financial system as it did in 2012 before the nuclear deal. Six years ago the EU imposed sanctions on Iranian banks, forcing SWIFT, which is subject to EU laws, to cut financial transactions with at least 30 of Iran’s financial institutions, including the central bank.Iranian banks were reconnected to the network in 2016 after the Iran nuclear deal came into force, allowing much needed foreign cash to flow into Tehran’s coffers.The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a financial network that provides high-value cross-border transfers for members across the world. It is based in Belgium, but its board includes executives from US banks with US federal law allowing the administration to act against banks and regulators across the globe. It supports most interbank messages, connecting over 11,000 financial institutions in more than 200 countries and territories.
Trump will grant 8 waivers to buy Iranian oil, allowing imports beyond US sanctions deadline - Secretary of State Mike Pompeo listens during a cabinet meeting with U.S. President Donald Trump in the Cabinet Room of the White House, July 18, 2018 in Washington, DC. The Trump administration will grant eight jurisdictions special exceptions to continue importing oil from Iran after U.S. sanctions on the country snap back into place on Monday, according to cabinet members.President Donald Trump gave oil buyers 180 days to wind down purchases of Iranian crude when he pulled out of the Iran nuclear deal in May. The eight waivers will allow the jurisdictions to more gradually reduce their purchases after the Nov. 4 deadline.Oil market watchers have been closely monitoring the situation to determine how forcefully the Trump administration will enforce the sanctions. State Department officials initially said importers must cut their purchases to zero by November, but administration officials subsequently telegraphed that some exceptions would be made.Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin on Friday declined to name the eight jurisdictions during a conference call with reporters. The officials said all of the countries or territories have significantly reduced their purchases and will be given more time to further reduce their imports.Two of the countries have almost entirely stopped buying Iranian oil, and could be to zero within a few weeks, Pompeo said.Japan, India and South Korea are among the countries, and China is still negotiating a waiver, Bloomberg News reported earlier on Friday, citing a senior administration official. Pompeo confirmed on Friday that the European Union is not one of the jurisdictions that will receive a waiver.The revenue from Iranian oil purchased through waivers will sit in foreign accounts and can only be used by Iran to purchase humanitarian goods and non-sanctioned items, Pompeo said.
How the Media Encourages Political Warfare — Since his inauguration, President Donald Trump has been waging war against the American press by dismissing unfavorable reports as “fake news” and calling the media “the enemy of the American people.”As a countermeasure, The Washington Post has publicly fact-checked every claim Trump has labeled as fake. In August, The Boston Globe coordinated editorials from newspapers across the nation to push back against Trump’s attacks on the press. The Associated Press characterized this effort as the declaration of a “war of words” against Trump.News organizations might frame themselves as the besieged party in this “war.” But what if they’re as much to blame as the president in this back-and-forth? And what if readers are to blame, as well?In an unpublished manuscript titled The War of Words, the late rhetorical theorist and cultural critic Kenneth Burke cast the media as agents of political warfare. In 2012, we found this manuscript in Burke’s papers and, after working closely with Burke’s family and the University of California Press, it will be published in October 2018. In The War of Words, Burke urges readers to recognize the role they also play in sustaining polarization. He points to how seemingly innocuous features in a news story can actually compromise values readers might hold, whether it’s debating the issues further, finding points of consensus, or, ideally, avoiding war.
Media Waging 'Psychological Warfare' Against Trump With Warnings Of Looming 'Staff Exodus' - Even as polls have shown that Democrats' efforts to stymie the confirmation of Supreme Court Justice Brett Kavanaugh, as well as their continued support for open borders as a migrant caravan trudges ever closer to McAllen, Texas, have only galvanized Republican voters ahead of the Nov. 6 midterms, the mainstream media has continued to push the narrative that the imminent blue wave will almost certainly wrest control of the House away from the GOP, forcing Trump and his cabinet officials into an uncomfortable position, as Democrats leverage their newfound power to subpoena staffers, senior officials and perhaps even the president himself. Fearful of being caught up in a drama with potential legal ramifications, Trump administration officials are preparing for a mass exodus during the lame-duck session that could leave the West Wing and the bureaucracy dangerously understaffed, according to Politico, Bloomberg and several other media organizations, all of which have in recent days published stories about rumored staff departures.The message from the mainstream media is clear: After a surprisingly successful run at the helm, the Trump administration is finally sinking under the weight of the profusion of scandals, and with key officials like White House counsel Don McGahn II already on their way out, it's unclear who, exactly, will act as a bulwark between Trump and his political enemies.As Steve Bannon said, staffers, the majority of whom aren't well paid, are worried that they will find themselves embroiled in some legal fiasco that might force them to blow all of their savings on legal fees.“How do you restaff with top quality folks knowing that you’re going to be subpoenaed? If you go in, you better be wealthy because you’re going to need to pay a lawyer,” said Steve Bannon, the former White House adviser who has had to hire his own lawyer to respond to inquiries about his time in the administration. “This whole thing is psychological warfare, and it’ll affect the ability to attract great people.”According to Bloomberg, the White House is bracing for a "staff exodus" after Nov. 6 as many in the administration believe Democrats will almost certainly take back the House. Anxious staffers, according to BBG, are worried that Democrats could unleash a flurry of subpoenas and investigations. According to an aggregate poll from Real Clear Politics, Democrats are leading by 8 points, which suggests that they will take back the House.
Trump offers Heather Nauert role of US ambassador to the United Nations - President Donald Trump has told State Department spokesperson Heather Nauert that he wants to nominate her to be U.S. ambassador to the United Nations, a senior White House official told ABC News. It is unclear whether she has accepted his offer concerning the position, now held by Nikki Haley, who said she would leave by the end of the year. But when asked about Nauert later Thursday, President Trump said while she is "under very serious consideration," he had not yet made a final decision and wouldn't until next week." "She's been a supporter for a long time, and she's really excellent," he said of Nauert. Nauert has been the department spokesperson since April 2017 after a career as a broadcast journalist at ABC News and an anchor at Fox News. After Secretary of State Rex Tillerson was fired, she was promoted to acting under secretary of state for Public Diplomacy and Public Affairs. Nauert met President Trump at the White House on Monday, two sources told ABC News -- her second meeting with the president about the role. The role requires Senate confirmation.
So Far, the Big Trade War Loser Is China, Not the U.S. - Marshall Auerback: Trade wars are neither easy nor costless, in spite of the insouciant assertions of President Trump to the contrary. But it is also the case that those who predicted that the far-sighted mandarins who guide China’s economic policy would win this battle might be similarly guilty of misplaced confidence.It’s early days, but so far the constellation of economic data that has come out of both countries suggests that it is China, not the U.S., which is bearing the brunt of this particular skirmish. And so long as the U.S. economy continues to grow, the corollary is that we should stop regarding these protectionist measures as temporary aberrations in America’s internationalist policies, especially on free trade. Rather, this is the new normal: an expression of a rabid 19th-century-style nationalism, reversing decades of globalization and shifting the worldwide economy into a series of competing regional blocs and alliances in the process. Maybe even a new Cold War (with China this time, not Russia).Beijing has just reported its weakest quarterly official growth figure in a decade, and its currency has recentlyfallen to its lowest level since 2017. The 6.5 percent year-on-year growth reported for the third quarter is the official figure, and Chinese officials themselves have long conceded that many of their economic measuring sticks are doctored (which means that the unofficial, but real, number is probably much worse). By contrast, the U.S. economy has remained relatively robust and shows little sign of a slowdown yet. The fact that the recently imposed tariffs in this growing trade war have not yet caused any significant economic dislocation domestically will likely embolden Trump and his trade team to up the ante as far as sustaining additional pressure on China, or to consider similarly aggressive action against other countries that conduct policy in a manner Trump considers deleterious to American trade interests. This will play well in swing states considered crucial to the president’s ongoing political success.
US reportedly planning tariffs on remaining $257 billion in Chinese goods if Trump-Xi talks fail - The United States is preparing new tariffs against all remaining Chinese imports if trade talks between Presidents Donald Trumpand Xi Jinping fail to reconcile the ongoing trade dispute, according to Bloomberg News. An announcement of new taxes against goods from China could occur as early as December and target the rest of the imports from the Asian nation that are not already subject to tariffs. The total would amount to about $257 billion worth, according to the Bloomberg report.The U.S. stock market fell immediately after the report, with shares of global aerospace and aircraft maker Boeing falling 6.5 percent by the closing bell, its worst day on Wall Street since February 2016. The Dow Jones Industrial Average fell more than 200 points following the trade news, erasing a 350-point gain earlier in the session; the S&P 500 fell 0.6 percent. The new tariffs, if enacted, would be the final step in the Trump administration's efforts to force Chinese leadership to the negotiation table through pressure on Chinese goods.Asked for clarification on the new tariffs, Press Secretary Sarah Sanders said in a conference Monday afternoon that she's "not going to get ahead of the president's meeting and I hope it goes well." The United States Trade Representative's office referred CNBC to Sanders' response when asked for comment. Sources familiar with the administration's plans later told CNBC'sEamon Javers that there are no new developments to the U.S.-China trade relationship.The White House levied tariffs of 10 percent on $200 billion of Chinese products in September, with the rate set to increase to 25 percent by the end of the year barring a breakthrough in the trade talks. In response, Beijing said it would impose taxes on 5,207 U.S. imports worth about $60 billion.The two nations had already imposed tariffs on $50 billion of each other's goods before the September sanctions. While China is targeting U.S. goods including coal, grease, Vaseline, asphalt and plastic products, the U.S. is taxing items such as appliances and furniture.
Trump- If You Want Stocks To Fall, Vote Democrat - After another round of discouraging US-China trade headlines on Monday hammered US stocks further into the red for the year, President Trump chimed in on Twitter early Tuesday to offer a new narrative to explain the "shocktober" selloff. Shifting his criticism away from the Federal Reserve, Trump noted that "the Stock Market is up massively" since the 2016 election, and assured nervous retail investors that stocks were merely "taking a pause" ahead of the Nov. 6 midterm vote. But if Democrats win, investors will have good reason to panic, as the they pursue their "Venezuela" agenda of unwinding the Trump tax cuts (which have been credited for helping goose corporate earnings, helping to power the rally in 2018) and opening America's borders.The Stock Market is up massively since the Election, but is now taking a little pause - people want to see what happens with the Midterms. If you want your Stocks to go down, I strongly suggest voting Democrat. They like the Venezuela financial model, High Taxes & Open Borders!— Donald J. Trump (@realDonaldTrump) October 30, 2018 Trump has a point here, as most analysts would attest. If Democrats retake both the House and the Senate (which is, to be fair, an unlikely scenario given the number of red state Democratic senators up for reelection) they would almost certainly attempt to unwind the fiscal stimulus that has, in theory at least, helped drive the rally. But, realistically, Trump is probably screwed either way. Because, even as Trump's criticisms have inspired the market to shift its expectations for the course of Fed rate hikes, Fed Chairman Jerome Powell is apparently determined to move ahead with Fed hikes. Meanwhile, the unwinding of the Fed's balance sheet continues unabated, as Morgan Stanley's Mike Wilson pointed out on Monday.
U.S. curbs exports to Chinese chip firm Fujian Jinhua as trade war intensifies – Opening a new front in its trade and technology disputes with China, the Trump administration on Monday took action to cut off a Chinese state-backed semiconductor maker from U.S. exports of components, software and technology goods. The Commerce Department said it has put Fujian Jinhua Integrated Circuit Co. Ltd. on a list of entities that cannot purchase such products from U.S. firms, citing a “significant risk” that the Chinese firm’s new memory chip capacity will threaten the viability of American suppliers of such chips for military systems. It said in a statement that Fujian Jinhua “poses a significant risk of becoming involved in activities that are contrary to the national interests of the United States.” The action is similar to a Commerce Department move that nearly put Chinese telecommunications equipment company ZTE Corp. out of business earlier this year by cutting it off from U.S. suppliers. ZTE, which had violated a deal to settle violations of sanctions on Iran and North Korea, was allowed to resume purchases of U.S. products after a revised settlement and payment of a $1 billion fine. The action against Fujian Jinhua is likely to ignite new tensions between Beijing and Washington since the company is at the heart of the “Made in China 2025” program to develop new high-technology industries.
Trump expands his China attack strategy - The Trump administration looks beyond tariffs in its campaign to rein in China’s trade practices, launching a new initiative aimed at stopping Chinese economic espionage. The Department of Justice is now a major player in the U.S. fight against Beijing’s trade practices, which the administration says includes blatant theft of technology and trade secrets from U.S. companies. The first — and unlikely to be the last — target of the initiative is Chinese state-owned company Fujian Jinhua Integrated Circuit Co., which Justice alleges was part of a conspiracy to steal, convey, and possess trade secrets stolen from Idaho-based Micron Technology. Taiwanese semiconductor foundry United Microelectronics Corp. and three Taiwanese nationals were also named in the indictment as being part of the scheme.The action represents an increasingly multi-pronged approach at punishing China’s alleged theft of U.S. intellectual property and policies that require U.S. companies to transfer their technology to Chinese partner companies as a condition for doing business there. Tariffs have already hit more than $250 billion worth of Chinese imports. On Monday, Jinhua was sanctioned by the Commerce Department.“They’re going after a number of Chinese companies going forward. This is just the beginning,” a source close to the effort told Morning Trade. Attorney General Jeff Sessions unveiled a new initiative on Thursday that will target Chinese economic espionage. One of the goals of the new “China Initiative” is to address supply chain threats to the telecommunications sector as it transitions to 5G networks — a technology that China is racing to dominate. Doug has more on the DOJ action here.
More U.S. tariffs on China goods not 'set in stone': White House adviser (Reuters) - U.S. President Donald Trump has not “set in stone” any decisions on escalating tariffs on Chinese goods and may withdraw some duties if there are promising policy discussions with China, White House economic adviser Larry Kudlow said on Wednesday. Kudlow said on CNBC that the meeting agenda between Trump and Chinese President Xi Jinping at the end of November in Buenos Aires has not yet been worked out, but “we may have a very good meeting in Argentina with President Xi.” Asked about whether Trump would proceed with tariffs if the meeting fails to ease trade tensions, Kudlow said: “I would say nothing is set in stone right now. By the way, the president on one of the cable shows, did say - it didn’t get picked up - that if some kind of amicable deal with China were to happen, then a lot of tariffs might be pulled back.” Kudlow, who heads the White House’s National Economic Council, added that Trump wasn’t making a promise, but giving a “very important hypothetical.” Bloomberg reported on Monday that the Trump administration was preparing to announce tariffs on the remaining Chinese imports, about $257 billion worth, if the meeting fails to ease the U.S.-China trade war, citing unnamed sources. Trump has long threatened to impose tariffs on all $500 billion-plus goods imports from China if Beijing fails to meet his demands for sweeping changes to its policies on intellectual property, technology transfers, industrial subsidies and local market access. Kudlow said there was no specific trigger point for a decision to impose more tariffs on Chinese goods. “The policy talks determine this, not an arbitrary timetable. If the policy talks go well, then we’ll have a much better situation. If the policy talks don’t, it may deteriorate,” Kudlow said.
Stocks Jump After Trump Says He Spoke To President Xi On Trade , Discussions Moving Along Nicely - Moments after stocks stumbled briefly in the red after the latest disappointing, and rather stagflationary Manufacturing ISM print, the S&P spiked higher following a Trump tweet in which the president said he just had a "very good" conversation with Chinese' president Xi, in which the emphasis was on trade and added that "discussions are moving along nicely." Just had a long and very good conversation with President Xi Jinping of China. We talked about many subjects, with a heavy emphasis on Trade. Those discussions are moving along nicely with meetings being scheduled at the G-20 in Argentina. Also had good discussion on North Korea! — Donald J. Trump (@realDonaldTrump) November 1, 2018 Of course, with China keeping radio silence on the topic of trade talks, it is likely that Trump is simply posturing ahead of the mid-term election next week; alternatively he may simply be building up hope for something positive out of the G-20 meeting. The optimistic tweet reversed much of the early morning pessimism, which had nearly brought the Dow to the unchanged line, and sent the Dow Jones to session highs, up as much as 150 points, as sentiment once again shifts on trade, this time with markets now expecting a favorable outcome from the G-20 meeting between the two presidents. The Chinese Yuan also spiked to session highs following Trump's tweet: As Bloomberg notes, "alongside the Brexit deadline and mid-term elections and November could be a watershed moment for deciding where the market goes from here." Ironically, the news comes at the very same time that AG Jeff Sessions is said to announce a new initiative in response to China’s economic espionage, according to a U.S. official. The Initiative will be led by agency’s National Security Division Head John Demers and will increase the use of DOJ tools to counter China’s activities. According to Bloomberg, Sessions is ordering the FBI and NSD to step up enforcement, and DOJ will select five U.S. attorneys to be part of the initiative. The announcement will be coupled with unsealing today of a criminal case by the U.S. Attorney for the Northern District of California that involves a Chinese co. that stole trade secrets from a U.S. company. However, as shown above, stocks are ignoring the DOJ news and focusing solely on Trump's tweet as the market's bipolar nature once again emerges to the surface.
Trump, Xi upbeat on trade after phone call; U.S. targets more Chinese firms (Reuters) - U.S. President Donald Trump and Chinese President Xi Jinping, who spoke by telephone on Thursday, expressed optimism about resolving their trade dispute ahead of a high-stakes meeting at the end of November in Argentina. But within hours of upbeat assessment, the U.S. Justice Department took aim at another Chinese firm it accused of unfair practices, part of an across-the-board pressure campaign by the Trump administration targeting China. Still, investors cheered the resumption of dialogue and a report that Trump was taking steps to resolve the tariff war, with shares in Asia hitting three-week highs on Friday and the dollar softening. Trump said on Twitter that trade discussions with China were “moving along nicely,” and that he planned to meet Xi on the sidelines of a G20 summit, in Argentina, after the two had a “very good” phone discussion. Bloomberg, citing people familiar with the matter, later reported that Trump wants to reach a trade agreement with China at the G20 meeting and that after the call with Xi, he had asked officials to begin drafting possible terms. The news agency said it was not clear if Trump was easing up on demands that China has resisted, and it cited one person as saying intellectual property theft was a sticking point on a possible deal. In comments in state media, Xi said he hoped China and the United States would be able to promote a steady and healthy relationship, and that he was willing to meet Trump in Argentina. “The two countries’ trade teams should strengthen contact and conduct consultations on issues of concern to both sides, and promote a plan that both can accept to reach a consensus on the China-U.S. trade issue,” Xi said on CCTV state television. Xi was quoted as saying after the call with Trump that they had hoped to expand trade cooperation. Neither leader specified any details of possible progress in their first known direct discussion in several months.
Trump Asks Cabinet To Draw Up Trade Deal After Conversation With China's Xi- BBG -- Is a harmonious conclusion to the six-month-long US-China trade battle finally within reach? Or this just a ploy to push US stocks higher ahead of an election that will decide which party controls Congress for the balance of Trump's term? That's the question that traders will be asking themselves as they try to suss out the implications of a Bloomberg report claiming that President Trump has asked his cabinet to begin drawing up the terms of a deal following a "long and very good" conversation with Chinese President Xi Jinping on Thursday - the first phone call between the leaders of the world's two largest economies in months. According to Bloomberg, Trump has asked key cabinet secretaries to have their staff draw up a draft deal that he hopes will signal an end to the trade conflict, BBG's anonymous sources said. What remains unclear is whether Trump will drop the list of demands that have reportedly been a sticking point in negotiations since the spring. Among those demands are that China scale back state support for its 'Made in China 2025' initiative, drop policies that support the siphoning of intellectual property from foreign companies and reduce the country's trade surplus with the US. Predictably, the news ignited a torrid rally in Asian shares, with the Hang Seng Index rising 4.2%, the biggest gain since 2011, while the Shanghai Composite Index climbed 2.7% to cement its first four-day winning streak since February. The Chinese yuan, meanwhile, traded back below 6.9 to the dollar, while US stock futures moved higher, signaling that shares could be on their way to a fourth straight day of gains.
Trump's top economic advisor says the Cabinet was not asked to draw up trade plan for China - President Donald Trump has not asked his Cabinet to put together a trade deal with China, White House economic advisor Larry Kudlow said Friday, contradicting an earlier report."There's no massive movement to deal with China," Kudlow, director of the National Economic Council, told CNBC's "Halftime Report." "We have already put out asks to China with respect to trade.""We're doing a normal, routine run-through of things that we've already put together and normal preparation," he said. "We're not on the cusp of a deal."Bloomberg reported earlier Friday that Trump had asked officials to prepare a draft for a U.S.-China trade deal. Three senior administration officials told CNBC there was not indication of an imminent trade deal with China.Equities fell to their lows of the day following Kudlow's comments, with the Dow Jones Industrial Average dropping more than 200 points. Kudlow's comments come a day after Trump tweeted he had a "long and very good conversation" with Chinese President Xi Jinping on trade.Kudlow did say, however, that Trump and Xi will meet at the G-20 summit and discuss trade.Concern over global trade has rattled investors for most of 2018 as the Trump administration takes a protectionist stance on the matter. The U.S. has slapped tariffs on billion of dollars worth of Chinese imports. China has retaliated with levies of its own on U.S. goods. "We have more to do, if the president chooses to do it, on tariffs," Kudlow said. "They just have to show us concrete responses to our asks."
WTO Dispute Over Metal Tariffs Delayed With Countries Blocking Action - Requests for the World Trade Organization to hear disputes related to U.S. steel and aluminum tariffs were delayed on procedural grounds Monday, putting off any action until November.In a volley of filings this month, WTO members including the European Union, China and the U.S. escalated disputes over the new metal duties, justified on national security grounds, and the European response to them. Each member can block an initial call for a dispute panel once -- a fairly standard WTO maneuver -- meaning the applications could be granted at the next meeting in November. The move sets the stage for a showdown that some fear could lead to the U.S. abandoning the Geneva-based WTO. If officials avoid that outcome, they could see a flood of new protectionist measures invoking the same national security argument used by the Trump administration, a ploy that has rarely been used in the past. The U.S. has disputed claims that it risks undermining the international trading system by invoking national security threats.“This is erroneous, and completely backwards,” Deputy U.S. Trade Representative Dennis Shea wrote in a statement on Monday. “What threatens the international trading system is that China is attempting to use the WTO dispute settlement system to prevent any action by any member to address its unfair, trade-distorting policies.” China, the EU, Canada, Mexico, Norway, Russia and Turkey requested that the WTO investigate the American tariffs, according to an Oct. 19 WTO statement. And the U.S. asked for reviews of the retaliatory actions of Canada, China, the EU and Mexico.
Third-Quarter Data Shows Record U.S. Trade Deficits During Trump Presidency - Eyes on Trade - Government data released today reveals the highest U.S. goods trade deficit in a decade for the first three-quarters of 2018, contradicting President Donald Trump’s midterm campaign trail triumphalism on trade. During Trump’s presidency, the U.S. trade deficit with China has risen to the highest ever recorded, while the deficits with the world and with North American Free Trade Agreement (NAFTA) nations have steadily grown, reaching nine-month levels in 2018 higher than any year since before the 2008-2009 financial crisis. “Instead of the speedy reduction in the trade deficit that Trump promised as a focal point of his campaign, during his presidency, the U.S. trade deficit with the world, China and NAFTA countries has steadily grown,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “This alarming data spotlights that the Trump administration has chosen not to employ all of the tools at its disposal to bring down the trade deficit.” Today’s U.S. Census Bureau release of the nine-month 2018 trade data reveals a global deficit and a China deficit that is higher than the nine-month level of Trump’s first year, which was higher than the nine months of President Barack Obama’s last year (all figures adjusted for inflation). The U.S. also is on track to end 2018 with the highest goods trade deficit with NAFTA partners since 2008. This is being driven by increasing imports from Canada and Mexico since 2016, but especially from Mexico this year. As our Trump trade deficit tracker shows, the nine-month 2018 data indicate:
- The U.S. trade deficit with China sets another all-time record. The goods trade deficit with China over the first nine months of 2018 was the highest deficit ever recorded for the first three quarters of a year – a 13 percent increase over 2016. Comparing the first nine months of Trump’s first year to his second year, the China goods deficit increased 8 percent, from $280 billion in 2017 to $301 billion in 2018. This compares to $268 billion for the first three quarters of 2016, Obama’s last year in office.
- After increasing steadily during the Trump presidency, with a total increase of 23 percent over 2016, the U.S. goods trade deficit with NAFTA partners during the first three quarters of 2018 was the highest in a decade. The U.S. trade deficit with NAFTA partners during the first nine months of the year increased 11 percent, from $144 billion in 2017 to $160 billion in 2018 after falling to $130 billion in 2016, the last year of Obama’s term. The 2008 nine-month deficit, before the effect of the crisis was felt, reached a record $188 billion before falling to $101 billion in 2009 over the same nine-month period.
- The overall U.S. goods trade deficit with the world over the first nine months of 2018 was the highest in the decade since before the financial crisis and up 13 percent over 2016. The U.S. trade deficit with the world over the first nine months of 2018 increased 7 percent, from $599 billion in 2017 to $643 billion in 2018, up from $570 billion in 2016, the last year of Obama’s term. The 2008 nine-month deficit, before the effect of the financial crisis was felt, had reached a record $744 billion before falling to $420 billion over the same period in 2009.
The growth of the NAFTA trade deficit has been overshadowed by focus on U.S.-China trade conflicts. But it is notable that the growth of the U.S.-Mexico deficit is accelerating, with 11 percent growth from the first nine months of 2017 to the same period in 2018 compared to 6 percent growth over that period from 2016 to 2017. The U.S. deficit with Canada is still growing, but the rate has not accelerated.
The cold military logic behind Trump’s trade war - (Reuters) - The U.S. military has a tent problem. The only domestic supplier of the specialist polyester fibre used in its tents has gone out of business with potential “significant impact to multiple tent and fabric systems”, according to a multi-agency assessment of weaknesses in the U.S. defence complex. Tents are just one of nearly 300 strategic frailties identified in the country’s military supply chains. The list ranges from the cold-rolled aluminium used for armour plating through submarine shaft maintenance to the silicon power switches used in missile systems. And that’s just the handful of examples that made it into the declassified section of the report. “All facets of the manufacturing and defense industrial base are currently under threat, at a time when strategic competitors and revisionist powers appear to be growing in strength and capability,” the report states. Topping the list of “strategic competitors” is China. It is this linking of trade, particularly of raw materials such as metals, with defence that forms the ideological underpinning of President Donald Trump’s tariffs. When the U.S. Administration imposed tariffs on imports of steel and aluminium, it did so on national security grounds. The use of the so-called “Section 232” provisions has been dismissed by most market analysts as a fig-leaf for good old-fashioned protectionism. A lot of governments feel the same, judging by the flurry of appeals to the World Trade Organization. However, from a U.S. perspective, there is an indisputable logic to identifying China as a strategic competitor and then seeking to break supply chain dependence on that competitor. Particularly since the U.S. believes that “the erosion of parts of our industrial base, is, in part, attributable to the industrial policies of major trading partners that have created an unfair and non-reciprocal trade environment.” Seen from the Oval Office, it is not the United States that is weaponising trade but rather the United States that is responding to ongoing weaponisation by China. An extreme example is the near total reliance of the U.S. defence sector on rare earths mined and processed in China. “China has strategically flooded the global market with rare earths at subsidized prices, driven out competitors, and deterred new market entrants,” the authors of the report write, noting pointedly the flexing of rare earth export quotas to pressure Japan at the time of the two countries’ 2010 maritime dispute. But similar arguments play out across a wide spectrum of metals, including the likes of aluminium and steel. China, it’s worth remembering was the largest single supplier of aluminium products to the U.S. last year. Russia, another country specifically identified as a threat in the report, was the second largest supplier of primary aluminium. Markets may not like the message, but they should take President Trump at his word when he argues that “a healthy (...) industrial base is a critical element of U.S. power”.
US Manufacturers Not Coming Back To North America, Says New Poll - A new poll this week showed more than 70% of U.S. firms operating in Southern China are considering delaying further investment in the country and are moving manufacturing facilities to other countries as the trade war deepens, said Reuters.According to the poll by the American Chamber of Commerce in South China, which surveyed over 200 companies, U.S. firms operating in China warned - they are experiencing extreme difficulties from trade disputes than firms from other countries. 64% of the companies said they were planning to relocate supply chains outside of China, but only 1% said they would consider establishing manufacturing bases in North America. “While more than 70% of the U.S. companies are considering delaying or canceling investment in China, and relocation of some or all manufacturing out of China, only half of their Chinese counterparts share the same consideration,” the AmCham report said.As the trade war deepens, supply chains in China are being forced to shift to Southeast Asia, the survey found.U.S. firms reported that trade wars have increased competition from rivals in Vietnam, Germany, and Japan; while Chinese companies said they faced increased competition from Vietnam, India, the U.S., and South Korea.Harley Seyedin, president of AmCham South China, told Reuters that customers are slowing down orders or not placing them at all. An ominous sign that global growth is now waning and a possible worldwide recession could be near.“It could very well be that people are holding back on placing orders until times are more certain or it could very well be that they are shifting to other competitors who are willing to offer cheaper products, even sometimes at a loss, in order to get market share,” he said. “One of the most difficult things about market share is once you lose it, it is very hard to get back.”
'Migrant Caravan' Refuses Mexico's Promise Of 'Food, Shelter And Jobs' As Grueling March North Continues - Aside from offering members the opportunity to seek asylum in Mexico, local authorities have done little to impede the progress of the Honduran migrant caravan that has continued its journey to the US southern border, aided by foreign aide groups like Pueblo Sin Fronteras and others. And as several thousand have already turned back thanks to the rampant crime and other grueling aspects of the journey, the pervasive atmosphere of lawlessness nearly cost one member of the caravan his life after he was badly beaten this weekend by a gang of vigilantes who had accused him of "child stealing." Blaming the tensions associated with the searing heat and little access to food, a local police chief described to the Associated Press how the man was viciously beaten after a dispute in a food line spiraled out of control. Raul Medina Melendez, security chief for the tiny municipality of Tapanatepec in Oaxaca state said the town was distributing sandwiches and water to migrants camped in the central square Saturday night. When a man with a megaphone asked people to wait their turn, some men hurled insults at him. "Finally people got really angry and those below began to attack the guy," Medina said. As the man ran, a false rumor spread that he had grabbed a child for protection and he was caught and beaten. Police rescued him and took him to a hospital for treatment, though his condition wasn’t immediately clear. On Sunday, several members of the caravan denounced the attack, as the man lay wounded in a nearby hospital, his condition unclear. "Is that the way we’re going to always behave?" a woman from Honduras asked. "Anytime there’s a rumor everyone is going to run to beat up someone?" Others complained of a few smoking marijuana or complained that images of litter and uneaten food made them appear disrespectful.
Militia Groups, Far-Right Activists Plan To March On Border (AP) – Militia groups and far-right activists are raising money and announcing plans to head to the Mexican border to help stop the caravan of Central Americans, echoing President Donald Trump’s attacks on the migrants making their way toward the U.S. Exactly how many militia members will turn out is unclear, and as of Friday, the caravan of about 4,000 people was still some 1,000 miles and weeks away from reaching this country. But the prospect of armed civilians at the border – and the escalating political rhetoric over immigration – have fueled fears of vigilantism at a time when tensions are already running high because of the mail bomb attacks against some of Trump’s critics. The U.S. Border Patrol this week warned local landowners in Texas that it expects “possible armed civilians” to come onto their property because of the caravan. Three activists told The Associated Press that they were going to the border or organizing others, and groups on Facebook have posted dire warnings about the caravan. One said it was “imperative that we have boots on the ground.” Another wrote: “WAR! SECURE THE BORDER NOW!” The militia members said they plan to bring guns and equipment such as bulletproof vests and lend a hand to the Border Patrol to protect against people unlawfully entering the country. “They’re just laughing in our face,” said Shannon McGauley, president of the Texas Minutemen. “It’s a free-for-all in America.” McGauley said he already has members at three points of the state’s border with Mexico and expects to add 25 to 100 more people in the coming days.
US to Deploy 5,000 Troops to Mexico Border; Military Actively Moving Equipment — The US military will deploy 5,000 troops to the southern border – up from initial estimates of 800, according to the Wall street Journal, citing US officials. The troops will be sent to Texas, Arizona and California as Central American migrant caravan makes its way north through Mexico.Defense Secretary Jim Mattis told reporters Sunday that the military has already started to deploy countermeasures to the southern border, following weekend reports that Mexican police had abandoned their own blockades as a massive Central American migrant caravan continues their march north, reports AP.On Monday, President Trump warned the caravan, tweeting: “Many Gang Members and some very bad people are mixed into the Caravan heading to our Southern Border. This is an invasion of our Country and our Military is waiting for you!”Many Gang Members and some very bad people are mixed into the Caravan heading to our Southern Border. Please go back, you will not be admitted into the United States unless you go through the legal process. This is an invasion of our Country and our Military is waiting for you!— Donald J. Trump (@realDonaldTrump) October 29, 2018 The additional troops will provide logistical and other support to the Border Patrol, and will bolster the efforts of the approximately 2,000 National Guard forces already there. The new forces are expected to provide logistical assistance such as air support and equipment, including vehicles and tents.National Guard troops routinely perform those same functions, so it is not clear why active duty forces are being used. –AP Mattis’s comments come amid a vow by Homeland Security Secretary Kirstjen Nielsen that the caravan “is not getting in.” “My general message to this caravan is: Do not come,” Nielsen said. “You will not be allowed in. … There is a right way to immigrate to the United States,” she continued, “and this is not it.”
The US is sending 5,000 troops to the border. Here’s what they can and can’t do. President Donald Trump has ordered an additional 5,200 troops to “harden” the US-Mexico border before the so-called caravan of migrants from Central America seeking asylum and a new life in the US arrives. The group of about 4,000 migrants from mostly Honduras and Guatemala is currently 1,000 miles and weeks away from the US border. Senior officials from the Pentagon and the Customs and Border Protection told reporters on Monday that 800 service members are already headed to Texas, with the remaining 4,400 arriving over the coming days. The forces, deployed as part of “Operation Faithful Patriot,” will include military police, pilots, and engineers and will be in the area from November 5 to December 15. The goal is to “harden our ports of entry,” in California, Arizona, and Texas, Customs and Border Protection chief Kevin McAleenan said. That would increase the number of US military personnel at the Southern frontier to roughly 7,000 — about 5,000 more than America has in Syria to fight ISIS and approximately one-third the size of the entire Border Patrol force at the US-Mexico line. The problem for Trump, though, is that the military won’t actually be able to participate in detaining or deporting any of the migrants the way the president likely wants. That’s because US law forbids them from physically detaining individuals at the border. So while the troops at the border will be armed, they will only legally be able to assist US border officials by doing things like helping transport border agents and providing emergency medical care to those who need it. The armed forces can also work to reinforce infrastructure around the border, like putting additional razor wire on border fences. In other words, while it may be intended to look as if the US is preparing for a massive invasion of immigrants at the Southern border, the reality is that it’s mostly just sending backup logistical support to help border agents address the arrival of a few thousand migrants — around half of whom are girls and women — who have been traveling by foot for weeks over.
Defense Secretary Mattis On Doubling Troops At The Border: ‘We Don’t Do Stunts’ Defense Secretary Jim Mattis on Wednesday denied accusations that the Trump administration was deploying 5,200 troops to the Mexican border as a political stunt to bolster Republican support for the Nov. 6 midterm elections. While taking questions from the press after a meeting with South Korea’s national defense minister, Mattis rejected the accusation and said that the Department of Defense doesn’t “do stunts.” Trump administration officials announced Monday that the additional troops would be deployed to join the estimated 2,100 National Guard troops that are already at the U.S.-Mexico border to assist with the approaching migrant caravan making its way from Honduras. The total number of troops deployed at the border will be more than double the estimated 3,500 people currently marching in the caravan. According to The Wall Street Journal, there will be more troops deployed to the border than there are currently serving in Iraq and Syria. When asked by a reporter whether the deployment was a political stunt, Mattis pointed out the additional troops were a request from U.S. Customs and Border Protection. “The support that we provide to the secretary of Homeland Security is tactical support based on the request from the commissioner of customs and border police,” Mattis said. “So we don’t do stunts in this department, thank you.”
Trump Says Military May Fire on Rock-Throwing Migrants - Following reports of migrants from a Central American caravan attacking Mexican forces, President Trump said that the US military currently amassing at the Southern border will treat rock throwers as gunmen. "I hope there won't be that, but I will tell you this – anybody throwing rocks... we will consider that a firearm, because there's not much difference," said Trump. On whether the military at southern border might fire on migrants, Pres Trump says "I hope not." "I hope there won't be that, but I will tell you this – anybody throwing rocks... we will consider that a firearm, because there's not much difference." https://t.co/fyk1ncmiwj pic.twitter.com/OGbFHFhB3A — ABC News (@ABC) November 1, 2018 Trump's comments come on the heels of several clips featuring violent migrants, including this one of rocks being thrown at Mexican security forces on the Guatemalan border. Here is video of the migrant caravan throwing rocks & molotov cocktails at Mexican security forces on the Guatemalan border.I reached out to the man who took this video.He confirms it's authenticity.Watch it.The caravan is violent. pic.twitter.com/WqnffoH6yH
The inconvenient truth about the US-bound migrant caravan - In mid-October, what has come to be known as the "migrant caravan" departed Honduras for a weeks-long trek through Guatemala and Mexico to the United States.The size of the caravan has fluctuated, but the United Nations calculated that, as of 22 October, some 7,200 people had joined up - many of them fleeing abysmal contexts of poverty and violence.While the journey is an arduous one, the decision to travel as a large group mitigates the dangers generally faced by northward-bound migrants, including murder, disappearance, rape, and theft.Of course, other obstacles still abound - among them US President Donald Trump, who quickly took to Twitter to announce that "criminals and unknown Middle Easterners are mixed in" with the caravan and that "I have alerted Border Patrol and Military that this is a National Emergy [sic]".After all, what better way to attack the US than by walking there from Honduras? Though Trump subsequently admitted that there was actually "no proof" of the presence of "unknown Middle Easterners", the "National Emergy" continues to rage - conveniently in the runup to midterm elections, for which Americans need to be repeatedly reminded of the ongoing existential battle against invading hordes of "Others". On October 25, the Washington Post reported that "800 to 1,000 more [US] troops, most of them active-duty forces from the Army", will be deployed to the US-Mexico border in response to the caravan. Additional spontaneous policy adjustments have also been proposed by Trump, who complained on Twitter that the governments of Guatemala, Honduras and El Salvador "were not able to do the job of stopping people from leaving their country and coming illegally to the US." Which brings us to the following short history lesson: US foreign policy in Central America over the past several decades - comprising "massive aid" to dictators, death squads, and other violent entities - is itself largely to thank for US-bound migration in the first place. Honduras, for example, was utilised as a launchpad for the US Contra assault on neighbouring Nicaragua in the 1980s, a bloody affair described by Noam Chomsky as a "large-scale terrorist war" that was accompanied by "economic warfare that was even more lethal".
Trump administration considers travel-ban-like order for Mexican border, sources say — The Trump administration is considering an executive action that could use travel-ban-like authority to block certain asylum seekers at the Mexican border, sources familiar with the discussions said Thursday. The proposal is not yet final and could be cast aside, said the sources, who spoke on condition of anonymity because the plan is in the formative stages. If President Trump approved such a plan, it would represent a dramatic escalation in border enforcement as a migrant caravan works its way north through Mexico. The administration is working rapidly to draft the possible executive action, which could effectively use the same legal authority that Trump invoked last year in imposing a ban against people from several mainly Muslim countries on traveling to the U.S., said a government source who has seen a working version of the plan and several sources who had it described to them. “The administration is considering a wide range of administrative, legal and legislative options to address the Democrat-created crisis of mass illegal immigration,” a White House official said on condition of anonymity. “No decisions have been made at this time. Nor will we forecast to smugglers or caravans what precise strategies will or will not be deployed.
Trump: We will 'build tent cities' for migrant caravan - President Trump during an interview on Monday said that the administration is planning to "build tent cities" for the thousands of migrants seeking asylum who are heading toward the southern border. Trump in recent days has been stoking fears that violent gang members may be part of the so-called migrant caravan, which includes thousands of Central Americans fleeing violence and dire economic conditions in their home countries. The migrants are still weeks away from reaching the border.The president during a prerecorded interview with Fox News's Laura Ingraham said the administration will "hold" the migrants who apply for asylum rather than releasing them pending their court dates, as previous administrations have done."If they applied for asylum, we’re going to hold them until such time as their trial takes place," Trump told Ingraham. "Where? We have the facilities?" she asked."We’re going to put up — we’re going to build tent cities," Trump replied. "We’re going to put tents up all over the place. We’re not going to build structures and spend all of this, you know, hundreds of millions of dollars — we’re going to have tents.""They're going to be very nice," he added.Trump has called the caravan of Central American migrants an "invasion." He has also referred to the midterms as the election of the "caravan."Democrats and immigration-rights activists have accused the president of drawing on xenophobic and racist images in an effort to frighten the electorate ahead of Election Day. The migrants are still more than 1,000 miles away.
Mexicans shower the caravan with kindness — and tarps, tortillas and medicine - Everything Pedro Osmin Ulloa was wearing, from the black felt shoes with the gold buckles to the shimmery blue button-down, was as new to him as he was to Mexico.The 30-year-old Honduran corn farmer and dogged sojourner in the migrant caravan was dressed head-to-toe in donated clothes. His 3-year-old son, Alexander, played with donated toys. And the rest of the family — his wife, his two brothers and a cousin — sat on the sidewalk eating beef stew and tortillas ladled out for them by residents of this bustling market town in Mexico’s southern Chiapas state.“These people have been beautiful,” he said. “Everyone’s helping us out.” Who is financing the caravan? There is no sign here of George Soros or the Russians. Instead, the responsibility of feeding, clothing and sheltering several thousand migrants has been embraced by the small Mexican towns along the route, with residents jumping into charity mode as if they are responding to a natural disaster. It was hard to walk a block in this town without seeing crates of free bottled water, tables packed with ham and cheese tortas or relief stations filled with medical supplies donated by the community to help the people on this grueling march.“We’re supporting them 100 percent,” Rafael Trinidad, a municipal employee, said as he passed out sandwiches to migrants arriving along the main road. “At least here, they can feel good.” While President Trump is looking for ways to block the caravan at the U.S. border, Mexicans are pitching in to ease the travelers’ journey. Residents along the route say they are motivated by the Catholic tradition of charity, a shared familiarity with migration to the United States and a sense of solidarity in the face of Trump’s anti-migrant rhetoric. While they acknowledge the caravan could be a problem if it lingered, many do not seem to mind a brief stopover.
Trump keeps spotlight on immigration, but punts on asylum changes President Trump on Thursday sought to keep the spotlight on his hard-line immigration policies, saying he is "finalizing a plan" to deny asylum claims from people who enter the country illegally. The White House had signaled the president would be announcing the legally questionable change to the nation's asylum system during a Roosevelt Room event days before the midterm elections. Instead, Trump announced no new policies, but suggested an official announcement on the asylum plan could come in an executive order "next week." "Under this plan, the illegal aliens will no longer get a free pass into the country by lodging meritless claims in seeking asylum," the president said in a speech delivered before leaving the White House for a campaign rally in Missouri. Trump said asylum applications would have to be made at ports of entry only under the proposal. The Immigration and Nationality Act of 1965 says any immigrant in the U.S. may apply for asylum regardless of whether they entered through a legal port of entry. But Trump insisted his plan would be "totally legal." Any asylum-seekers who are caught crossing the border illegally will be held in tents instead of being released pending a legal hearing, he said. "We are building massive numbers of tents and we will hold them in tents," he said. The president's comments were aimed at a caravan of migrants from Central America traveling toward the U.S., which reportedly includes many who are fleeing poverty and violence and seeking asylum. Trump called the caravan an "invasion" that poses a major security threat.
Organized Busing Operation Exposed, Moving Migrants Closer To US Border - Traveling at a sluggish pace of 10 miles per day, the migrant caravan probably wouldn't arrive at the nearest US border crossing at McAllen, Texas until February, according to one observer, who debunked claims widely circulated by the media that the caravan would arrive before the Nov. 6 midterm election. But as it turns out, the organizations that have been aiding the caravan since it first formed in Honduras nearly three weeks ago have already accounted for this. And to help ensure that images of border patrol agents arresting families and separating small children from their parents are flashing across cable news in the days and hours before the polls open, these groups are employing a new tactic: Busing.That's right. As Fox News report on Tuesday showed, migrants traveling with the caravan are being loaded on to chartered buses and transported to the next stop on the trail to the US, having refused Mexico's offer of asylum, shelter and jobs should they opt to stay in the country. Fox News reporter Griff Jenkins revealed that multiple professional buses have lined up to board the migrants, as footage from the report showed.As more than 5,000 troops mass on the border and a second caravan crosses into Mexico from Guatemala, Jenkins exposed more than 11 buses carrying some of the migrants organized in the state of Oaxaca. While the buses can't carry every member of the caravan - that would require more than 80 buses, by Fox's count, they can speed members closer to their next stop. Meanwhile, two more caravans in Guatemala and El Salvador. "Something new that’s developing here," Jenkins said as he wandered the bus loading zone. "We’ve seen the 5,000 strong caravan walking to the border but now they’re waiting for a ride to the border. This is the first time I have seen an organized bus operation from the state of Oaxaca actually getting volunteer buses to put people … on them and take them to their next location." The buses are just the latest example of the support the migrants have received from local townspeople and organizations from within Mexico, as the country's police and military have largely stood aside despite President Trump's demands that the Mexican government do something to slow or stop the caravan.
Texas Border Residents Warned Of Armed Civilians Confronting Caravan; Trump Says Military Mobilized - Texas landowners along the US-Mexico border have reportedly been told this week by the US Border Patrol to expect a possible influx of "armed civilians" on their property as a Central American migrant caravan makes its way towards the United States, reports AP. The Associated Press reported that these civilians say they intend to support the National Guard and Border Patrol to prevent the illegal migrants from crossing into the U.S.But some see the move as a negative, arguing that the armed civilians' presence would add even more tension should there be a confrontation. Three activists told the AP they were going to the border or organizing others, and groups on Facebook have posted warnings about the caravan. One said it was “imperative that we have boots on the ground.” Another wrote: “WAR! SECURE THE BORDER NOW!” -Associated Press Texas Minuteman militia president Shannon McGauley told AP that the group has members stationed at three points throughout the state's border, and expects 25-100 more arriving in coming days. Militia border patrols are nothing new, as civilians will typically alert border patrol to apprehend trespassers. On Wednesday, President Trump issued a new warning about the caravan and its "very tough fighters and people," tweeting: "The Caravans are made up of some very tough fighters and people. Fought back hard and viciously against Mexico at Northern Border before breaking through. Mexican soldiers hurt, were unable, or unwilling to stop Caravan. Should stop them before they reach our Border, but won’t!” — Donald J. Trump (@realDonaldTrump) October 31, 2018 Trump then reiterated that the US military "is being mobilized at the Southern Border" with "Many more troops coming."
Fake Soros scares bid to draw US voters ahead of mid-terms - Disinformation about George Soros and untrue stories detailing his alleged connection to the migrant caravan in Mexico are making headway among American voters on social media. Right-wing media organisations have portrayed the Hungarian-American billionaire as a leftist bogeyman using his money to derail the US political system, usually through unproven rumours that his largesse not only funds NGOs and campaign groups but also the migrants in Mexico. It's a narrative pushed by President Trump himself, who claimed on Twitter that women protesting the Justice Kavanaugh confirmation hearing were "paid for by Soros and others". He's also made the migrant caravan and immigration issues central part of his mid-term election push. Both "real" social media users and what appear to be bot accounts have been spreading disinformation aimed at Mr Soros and his Jewish background, even after the Pittsburgh synagogue shooting which left 11 worshippers dead. Many Twitter users have been enthusiastic in following the right-wing narrative that George Soros is deeply involved in funding liberal causes, from paying people to protest against Brett Kavanaugh, to handing out cash to encourage migrants in the south of Mexico to move toward the American border. Rumours that Mr Soros has been funding migrant caravans go back months, with one item on right-wing website One News Now dated 1 May bluntly proclaiming that "Leftist billionaire George Soros is funding the well-organised anti-Trump migrant caravan invasion from Central America" which is "attacking the US border" as part of a "refugee invasion". It takes as its source, other right-wing websites, WorldNetDaily and CNS News. Among the slurs against the financier is the continued spreading of the discredited story that he was a member of the Nazi SS.
Trump 'Wouldn't Be Surprised' If Soros Helped Finance 'Migrant Caravan' - In the wake of the deadliest attack on Jews in American history, President Trump late Wednesday doubled down on his support for the theory that financier and liberal donor George Soros may be financing the caravan - a theory that was originally propagated by Florida Rep. Matt Gaetz - during a brief huddle with reporters.Asked if he believed that Soros or other Democratic donors have been financing the caravan, Trump said that, while he didn't know, he "wouldn't be surprised.""I wouldn't be surprised. I don't know who, but I wouldn't be surprised. A lot of people say yes," he told a Daily Mail journalist who asked him what he thought of the idea that Soros was funding the caravans.The comments are almost guaranteed to provoke another round of outrage as some in the media have blamed Trump for inspiring suspect Robert Bowers' attack on the Tree of Life synagogue in Squirrel Hill Pittsburgh with rhetoric blaming Soros - whom liberals see as a stand-in for antisemitism - for the caravan. Before embarking on his rampage, Bowers posted on the social media network Gab that Jewish aid organization HIAS, which helps resettle refugees, needed to be stopped. Helping to validate the claims of those who say Republicans have taken their criticisms too far, Soros was the first of more than a dozen prominent Democrats to find a pipe bomb in his mailbox during last week's spate of attempted mail bombings, which have been blamed on a Florida man who fervently supported the president and was said to have deliberately targeted his critics.
Here’s How Much Bots Drive Conversation During News Events -- LAST WEEK, AS thousands of Central American migrants made their way northward through Mexico, walking a treacherous route toward the US border, talk of "the caravan," as it's become known, took over Twitter. Conservatives, led by President Donald Trump, dominated the conversation, eager to turn the caravan into a voting issue before the midterms. As it turns out, they had some help—from propaganda bots on Twitter. Late last week, about 60 percent of the conversation was driven by likely bots. Over the weekend, even as the conversation about the caravan was overshadowed by more recent tragedies, bots were still driving nearly 40 percent of the caravan conversation on Twitter. That's according to an assessment by Robhat Labs, a startup founded by two UC Berkeley students that builds tools to detect bots online. The team's first product, a Chrome extension called BotCheck.me, allows users to see which accounts in their Twitter timelines are most likely bots. Now it's launching a new tool aimed at news organizations called FactCheck.me, which allows journalists to see how much bot activity there is across an entire topic or hashtag.Take the deadly shooting at the Tree of Life synagogue in Pittsburgh over the weekend. On Sunday, one day after the shooting, bots were driving 23 percent of the Twitter activity related to the incident, according to FactCheck.me. "These big crises happen, and there’s a flurry of social media activity, but it's really hard to go back and see what’s being spread and get numbers around bot activity," says Ash Bhat, a Robhat Labs cofounder. So the team built an internal tool. Now they're launching it publicly, in hopes of helping newsrooms measure the true volume of conversation during breaking news events, apart from the bot-driven din.
Younger generations are actually better at telling news from opinion than those over age 50 - Nieman Labs. Those pesky kids with their smartphones don’t know the days of print newspapers separating the news pages from the opinion section. But they’re not necessarily the ones we have to worry about discerning news statements from opinions, according to a new analysis from the Pew Research Center. Based on a survey Pew conducted in February and March, Americans ages 18–49 were more likely to accurately categorize factual statements as facts and opinion statements as opinions. A third of that age range correctly identified all five news items in a test, compared to 20 percent of those over age 50, and 44 percent of the younger grouping correctly identified all opinion items, compared to 26 percent of their elders. “Beyond digital savviness, the original study found that two other factors have a strong relationship with being able to correctly classify factual and opinion statements: having higher political awareness and more trust in the information from the national news media,” Pew researcher Jeffery Gottfried wrote. “Despite the fact that younger adults tend to be less politically aware and trusting of the news media than their elders, they still performed better at this task.”This corroborates the footnote of a recent American Press Institute study which found that only 43 percent of Americans thought it was easy to distinguish opinion from news on digital news sites and social media. The API researchers found that 52 percent of adults under age 30 said it’s at least somewhat easy to tell them apart on social media, versus 34 percent of adults 60 and older: “The level of ease was about the same for younger adults across all media types.” The study also noted that the young folk were understandably less familiar with print jargon like “op-ed” than the older adults.
Trump says he will sign executive order banning birthright citizenship - President Trump said in a new interview released Tuesday that he will sign an executive order intended to end the practice of birthright citizenship."It was always told to me that you needed a constitutional amendment. Guess what? You don't," Trump said during an interview with Axios.Axios reports that the White House is preparing an order that would declare an end to the longstanding staple of America's immigration system. That would set up a new battle for Trump at the Supreme Court over the 14th Amendment, which states that all persons "born or naturalized in the United States" are "citizens of the United States and of the State wherein they reside."Trump in the interview with Axios insisted it was possible to make the change through an executive order in addition to an act of Congress. "You can definitely do it with an act of Congress. But now they're saying I can do it just with an executive order," the president added, before stating incorrectly: "We're the only country in the world where a person comes in and has a baby, and the baby is essentially a citizen of the United States ... with all of those benefits”
Trump Wants to Change the 14th Amendment of the Constitution — Denouncing the U.S. right to birthright citizenship—guaranteed by the 14th Amendment of the U.S. Constitution—as “ridiculous,” President Donald Trump has falsely claimed that he has the power to subvert that guarantee by presidential fiat – his latest effort to mainstream a noxious lie and xenophobic trope while also furthering what critics call his authoritarian approach to governance by once more exploiting certain members of the White House press corps willing to carry his water for him. Injected into a White House interview by Axios‘ Jonathan Swan, a reporter who prides himself on receiving inside information from anonymous top-level Trump officials, the president appeared surprised (or feigned surprise) that anybody knew his internal desire and plan to end birthright citizenship but said “it will happen” and that “now they’re saying I can do it just with an executive order.”It’s not clear who Trump is referring to when he says “they,” but it’s reasonable to assume—given that Trump says he didn’t think anybody else knew about it—that it’s the very same staff person or people who told Swan to ask him the question in the first place. Watch:
The White House Counsel and the Pending Birthright Citizenship Executive Order -And so we come to this moment, an inaugural moment for White House Counsel Pat A. Cipollone, when the president has announced his intention to issue an executive order that by fiat would deny birthright citizenship to children born in the United States to noncitizens. He wishes to unilaterally refashion constitutional law with a forced reading of the 14th Amendment and spurious reasons for not following controlling Supreme Court precedent. He is doing so with an announcement that is plainly timed for political effect, only weeks before the midterm elections. Trump has already left troubling clues about the decision-making process leading to his conviction that he can issue such an order. He said to Axios that he was originally told that no such order would be lawful and then informed that the opposite is true. But who told him what and when? Now, of course, there are theories afoot and available to Trump that the settled constitutional understanding is incorrect and that the president does in fact have the leeway to press his novel case for presidential power to end birthright citizenship. But the odds are heavily against success with these arguments. And in taking this aggressive position on such a sensitive issue in these highly political circumstances, Trump yet again puts at risk the credibility of his administration before the courts. The institutional responsibility for dissuading the president from this course falls largely on the White House counsel, as it does to some extent in almost every administration—but perhaps more so in this one, in which the president has effectively declared war on his own Department of Justice. This, of course, puts the counsel on a collision course with the president’s demagogic politics and conception of his authority. As he did with the travel ban early in his term, and with notable trouble in the courts, Trump has once again cast his claims of executive authority in the most politically heated terms. It is particularly in the light of the travel ban experience that his counsel must contend with and advise the grave institutional costs of this latest initiative. This is a large part of what it means for a White Counsel to represent the presidency, not just the person—and personal politics—of the president.
Lindsey Graham To Introduce Bill Ending Birthright Citizenship - With one week left before the Nov. 6 midterm vote, President Trump and his allies in Congress have managed to establish immigration policy as the de facto dominant issue with the revelation that Trump is planning an executive order to eliminate birthright citizenship in the US. But in the event that Trump's order is challenged and overturned by the federal courts (which is extremely possible despite the confirmations of Neil Gorsuch and Brett Kavanaugh), South Carolina Sen. Lindsey Graham, a former adversary turned staunch Congressional ally, said Tuesday that he would introduce legislation to eliminate what he described as an "absurd" policy. First, Graham - who is rumored to be on Trump's shortlist of candidates for a cabinet role after a post-election cleanout - applauded Trump for his decision (which he made public in an Axios interview published Tuesday morning)...Finally, a president willing to take on this absurd policy of birthright citizenship. https://t.co/kCa0ko7P76— Lindsey Graham (@LindseyGrahamSC) October 30, 2018...then followed this up by declaring that he has always supported eliminating birthright citizenship, noting that the US is "one of only two countries in the world" that establishes citizenship by birth (though the accurate number is closer to 30). He argued that the policy is a magnet for illegal immigration and is "out of the mainstream" for the developed world and "needs to come to an end." I’ve always supported comprehensive immigration reform – and at the same time – the elimination of birthright citizenship.The United States is one of two developed countries in the world who grant citizenship based on location of birth.This policy is a magnet for illegal immigration, out of the mainstream of the developed world, and needs to come to an end. — Lindsey Graham (@LindseyGrahamSC) October 30, 2018 To help eliminate birthright, Graham said he would introduce legislation "along the same lines" as the executive order.
Vulnerable Senate Dem open to legislation ending birthright citizenship - Sen. Joe Donnelly, the vulnerable Democratic candidate running for reelection in Indiana, said he was open to looking at legislation that would end birthright citizenship during a Tuesday debate."I’m the only person on this stage who voted three times for a border wall. I voted against sanctuary cities. I’ve stood for secure borders with John McCain when in 2013, we passed legislation that would have provided an additional 20,000 border agents to the border," he said when asked about birthright citizenship. "I heard you say that Lindsey Graham is going to put legislation forward" to rescind the law, Donnelly continued. "We have to take a look at that legislation." "I’d want to see that legislation, make sure it was constitutional and review it first," he added. Donnelly's Republican opponent Mike Braun also declined to commit his support to one side of the issue, but said that "if Lindsey Graham’s introducing it, it will be something I take a look at." President Trump made his intentions to use an executive order to end birthright citizenship known in an interview aired Tuesday. Legal experts quickly almost unanimously said that such a move would be unconstitutional and challenged in court. Senate Judiciary Committee head Chuck Grassley (R-Iowa) said Tuesday that changing birthright citizenship would take a constitutional amendment.
Trump Claims He Can Overrule Constitution With Executive Order Because Of Little-Known ‘No One Will Stop Me’ Loophole —Saying his latest executive order was legal due to an “underutilized but totally feasible workaround,” President Trump claimed Tuesday that he could overrule the U.S. Constitution by means of the relatively obscure “no one will stop me” loophole. “My critics say a constitutional amendment or at least an act of Congress is necessary to end birthright citizenship, but what they don’t realize is that a seldom-evoked administrative guideline ensures I can do whatever I want, whenever I want, because zero people will stand in my way,” said Trump, adding that the largely unheard-of clause allows him to circumvent normal legal proceedings because it’s not like anyone in any branch of government remains effective enough to prevent him from doing so. “Though few modern presidents have made use of it, this loophole has always given the nation’s chief executive unilateral power over the Constitution. Its provisions dictate that the president can sidestep any checks and balances on his power once he has abused his authority so many times that no one can keep track anymore.” Trump added that while his opponents may try to challenge his executive order in court, the loophole also states that by then he will have achieved his immediate political aims.
Poll: Majority says Trump will have 'a lot' of impact on midterm vote - A majority of Americans in a new poll says President Trump will influence how they vote in next month's midterms. The USA TODAY/Suffolk University Poll released Thursday found that 58 percent of likely voters said Trump will have "a lot" of impact when they head to the voting booth. Just more than one-third -- 35 percent -- of the respondents said they will oppose Trump and 23 percent will vote to support him. Twenty-five percent of likely voters said Trump won't have any effect on their midterm votes, according to the poll. Trump has previously told supporters that he believes he will factor into the midterms, but he also told The Associated Press in an interview this month that he won't accept the blame if Republicans lose control of the House. “No, I think I’m helping people,” he said at the time. “I don’t believe anybody’s ever had this kind of an impact.” Prediction models and polling show that the Democrats are likely to retake the House, but that the GOP should retain control of the Senate and possibly expand its majority in the upper chamber. The USA TODAY/Suffolk University Poll published Thursday found that Democrats have an 8-point advantage on the generic congressional ballot, with 51 percent of likely voters saying they'll support Democrats and 43 percent saying they'll back Republicans. The poll's results were based on phone interviews with 1,000 likely voters from Oct. 18 through Oct. 22. It has a margin of error of 3 percentage points.
Republicans and Democrats Don’t Just Disagree About Politics. They Have Different Sexual Fantasies. According to the largest and most comprehensive survey of sexual fantasies ever conducted in the United States, it would appear that there are also political differences in our private sexual fantasies. I surveyed 4,175 adult Americans from all 50 states about what turns them on and published the findings in a book entitled Tell Me What You Want. As part of this survey, participants were given a list of hundreds of different people, places and things that might be a turn-on. For each one, they reported on how frequently they fantasized about it. I learned a lot about the nature of sexual desire in modern America, but one of the more intriguing things I uncovered was the political divide in our fantasy worlds. While self-identified Republicans and self-identified Democrats reported fantasizing with the same average frequency—several times per week—I found that Republicans were more likely than Democrats to fantasize about a range of activities that involve sex outside of marriage. Think things like infidelity, orgies and partner swapping, from 1970s-style “key parties” to modern-day forms of swinging. Republicans also reported more fantasies with voyeuristic themes, including visiting strip clubs and practicing something known as “cuckolding,” which involves watching one’s partner have sex with someone else. By contrast, self-identified Democrats were more likely than Republicans to fantasize about almost the entire spectrum of BDSM activities, from bondage to spanking to dominance-submission play. The largest Democrat-Republican divide on the BDSM spectrum was in masochism, which involves deriving pleasure from the experience of pain. Why is that? Why do Republicans seem to be drawn to nonmonogamy and Democrats to power play in their sexual fantasies?
Suspicious packages spotlight vast mail surveillance system - As law enforcement investigates possible mail bombs sent to prominent Democratic Party figures and liberal activists, the tools available at their disposal include digital images and delivery metadata commonly associated with mail sent in the United States. The U.S. Postal Service regularly photographs the front and back of every piece of U.S. mail, or about 150 billion parcels, envelopes, and postcards every year. A longstanding practice known as the “mail cover” program enables law enforcement to obtain address information and images of the outsides of mail as part of an investigation without the need for a warrant through the Postal Inspection Service, the U.S. Postal Service’s policing arm. Photos of the bomb and package sent to CNN pic.twitter.com/nBq3ArtChJ — Jim Acosta (@Acosta) October 24, 2018 According to a report from CBS News, authorities are currently using “data analytics” to spot similar packages to those identified as containing bombs. Images of packages shared with the press show a common return address, using the misspelled name of Representative and former Democratic National Committee chair Debbie Wasserman Schultz. The Postal Inspection Service doesn’t generally comment on its investigative techniques. The agency referred questions from Fast Company to the Federal Bureau of Investigation, the lead agency on the case, which declined to comment, citing an ongoing investigation. As part of the mail cover program, mail is routinely digitally photographed as part of the sorting process and even available for recipients to digitally preview in some areas. Apart from threats like bombs, the department says its main focus is on mail theft, fraud, and narcotics cases. Because a mail cover involves reading only information on the outside of the envelope or package, courts have not ruled it a violation of the Fourth Amendment. But that hasn’t stilled concerns about privacy and abuse.For decades, the relatively obscure program has come under criticism for its lack of protections, for allowing data to be shared in broader cases than postal regulations allow, and for operating largely outside of public view. Critics have also warned that extensive surveillance of someone’s mail, especially combined with other surveillance, could create privacy violations.
Grinning Trump Encourages Lock Him Up Chant Against George Soros - Shortly before telling a group of reporters who had asked President Trump to "tone down" his rhetoric that he felt like he had already been "toned down" - and that he felt there was more room for him to "tone it up" instead - Trump incited howls of outrage from liberals and progressive journalists when he chuckled after an audience member shouted "lock him up!" about billionaire George Soros, who was one of more than a dozen people targeted by a flurry of mail bomb scares this week. Trump met with a "passionate audience" at the White House Young Black Leadership Summit on Thursday. Throughout his speech about globalism and his trade agenda, Trump was repeatedly interrupted by applause, cheers and chants. And when Trump arrived at a part of his speech where he criticized foreign nations for "cheating our workers," some members of the crowd started calling out "Soros," who has been widely criticized among conservatives for championing progressive, globalist principles with his "Open Society" foundation. One member even shouted "lock him up." In response, Trump chuckled and repeated the chant himself, saying "Lock him up" and pointing a finger at the audience member who shouted it. An outpouring of outrage followed, as progressives condemned Trump for allegedly contradicting himself when he had said earlier that "Americans must unify" and "never allow political violence to take root" in response to the spate of bombings this week. Soros, of course, has criticized Trump on numerous occasions, going so far as to call his administration "a danger to the world" and predicting that the US president won’t get a second term - or might even "disappear" before that, according to the Guardian. Earlier during his speech, delivered to a crowd full of African Americans wearing "MAGA" hats, Trump praised Kanye West for purportedly helping to improve Trump's approval rating among black Americans by 26 percentage points. Kanye may be "a little different" Trump said - an obvious reference to West's unhinged rant during a White House press conference earlier this month - but he also might be "the most powerful man in politics," Trump said.
Words Matter, Mr. President - Eleven people died on Saturday. And while the President of the United States and his supporters will vehemently deny it, he is partially to blame. The eleven were riddled with bullets while I was sitting at home eating breakfast less than a mile away. They were shot by a man carrying three handguns and a military-style assault rifle as they attended services at their synagogue. Their attacker, Robert Bowers, had posted numerous anti-Semitic rants on his social media account, and the assumption was made by many that he was motivated by his hatred of Jews. While that hatred no doubt is one reason for his crimes, it was not the only one. There are a dozen synagogues in and around the Squirrel Hill neighborhood where he carried out his attack. The killer’s residence is far to the west and only four miles from another synagogue and less than seven miles from a Jewish Community Center. And yet he decided to drive 13 miles to attack the Tree of Life Synagogue in Squirrel Hill. The reason he chose that particular temple to attack can also be found in his social media posts. He chose Tree of Life because it was working with the Hebrew Immigrant Aid Society. HIAS was established in 1881 to help Jewish refugees fleeing Eastern Europe. Over the years it shifted its focus and, about two decades ago, began to help refugees of different faiths and from other parts of the world. Less than two hours before he chose to act, Bowers made one last post. He wrote, “HIAS likes to bring in invaders that kill our people. I can’t sit by and watch my people get slaughtered. Screw your optics. I’m going in.” Whether it is the caravan from Central America, the Muslim ban, building a wall on the border, Trump has made anti-immigrant paranoia and hysteria a fundamental part of his speeches at his endless series of campaign rallies. There is simply no plausible way to ignore the fact that his language validated the perverted and paranoid worldview of Bowers and thereby encouraged his actions. When Trump recently described himself as a “nationalist,” he didn’t even bother with his usual dog whistle. He bellowed his xenophobia and intolerance, and the message to people like Bowers could not have been clearer.
Rabbis Tell Trump He's 'Not Welcome' In Pittsburgh Until He 'Denounces White Nationalism' -- As President Trump plans to visit Pittsburgh and the Squirrel Hill neighborhood that was the cite of Saturday's horrific shooting, a group of 11 rabbis have published an open letter condemning the president, saying he wouldn't be welcome in Pittsburgh unless he "denounces white nationalism" and stops targeting minority groups, migrants and refugees - effectively laying the blame for the shooting at Trump's feet. By blaming Trump for this latest incident, the rabbis who signed the letter have apparently forgotten about the more than 600 incidences of uncivil and threatening behavior directed at conservatives. More to the point, Trump's allies stepped up to defend him. And last night, as he took the stage at a rally in Illinois where he condemned the shooting, Trump again blamed the media for inciting violence.The Fake News is doing everything in their power to blame Republicans, Conservatives and me for the division and hatred that has been going on for so long in our Country. Actually, it is their Fake & Dishonest reporting which is causing problems far greater than they understand!— Donald J. Trump (@realDonaldTrump) October 29, 2018The rabbis were members of Bend the Arc: A Jewish Partnership for Justice. And in the letter they accused Trump of attacking minority groups from transgender people to immigrants and demanded that he let up on his attacks."Our Jewish community is not the only group you have targeted," the group wrote. "You have also deliberately undermined the safety of people of color, Muslims, LGBTQ people, and people with disabilities. Yesterday’s massacre is not the first act of terror you incited against a minority group in our country." The letter was reminiscent of the backlash that Trump faced after he said there was "blame on both sides" after last summer's "Unite the Right" rally in Charlottesville, Va. Using familiar phrasing, the group accused the president of "spreading lies and sowing fear."
America Is on the Brink of a Nervous Breakdown — Yet another shooting.Yet another smear of ugliness, hatred and violence.Yet another ratcheting up of the calls for the government to clamp down on the citizenry by imposing more costly security measures without any real benefit, more militarized police, more surveillance, more widespread mental health screening of the general population, more threat assessments and behavioral sensing warnings, more gun control measures, more surveillance cameras with facial recognition capabilities, more “See Something, Say Something” programs aimed at turning Americans into snitches and spies, more metal detectors and whole-body imaging devices at so-called soft targets, more roaming squads of militarized police empowered to do more stop-and-frisk searches, more fusion centers to centralize and disseminate information to law enforcement agencies, and more government monitoring of what Americans say and do, where they go, what they buy and how they spend their time.All of these measures play into the government’s hands.All of these measures add up to more government power, less real security and far less freedom.As we have learned the hard way, the phantom promise of safety in exchange for restricted or regulated liberty is a false, misguided doctrine that has no basis in the truth.Things are falling apart. When things start to fall apart or implode, ask yourself: who stands to benefit?
Fox News Incites Domestic Political Violence More Than Trump - How did we get here? Why is America a country where, in just one week, two African-American senior citizens were gunned down in Kentucky, pipe bombs arrived in the mailboxes of over a dozen prominent liberals, and 11 members of a Pittsburgh synagogue were slaughtered at a bris? Our current reality only makes sense if we comprehend Fox News and its origin story, revealed in a startling 1970 memo from the Nixon White House. President Donald Trump and the White House have strongly denied that he bears any responsibility for this streak of atrocities. In a sense, they’re right. It’s easy to imagine the three recent perpetrators doing exactly the same things under a President Hillary Clinton. On the other hand, it’s nearly impossible to conceive of all the politicized violence happening without Fox News. It’s tough to miss how Cesar Sayoc’s vehicle looked like Fox News in van form. Fox is America’s central clearinghouse for hateful conspiracism, including the violent delusions that animated Sayoc and Robert Bowers. A rich cosmopolitan Jew is scheming to help dangerous foreigners invade and despoil the homeland. Barack Obama, Tom Steyer, and Robert DeNiro are trying to destroy America for reasons known only to themselves. Black people want to steal everything for which you’ve worked so hard.
The powerful weapon House Republicans handed Democrats - Democrats eager to investigate the Trump administration if they seize the House would have the GOP to thank for one of their most potent tools — a sweeping subpoena authority that Democratic lawmakers denounced as an abusive power grab three years ago.House Republicans changed the rules in 2015 to allow many of their committee chairmen to issue subpoenas without consulting the minority party, overriding Democrats objections that likened the tactic to something out of the McCarthy era.Now the weapon that the GOP wielded dozens of times against President Barack Obama’s agencies could allow Democrats to bombard President Donald Trump’s most controversial appointees with demands for information. And many Democrats are itching to use it.“The Republicans have set the standard and, by God, we’re going to emulate that standard,” Rep. Gerry Connolly (D-Va.) told POLITICO. Oversight would be one of the few concrete goals that Democrats could accomplish with control of only one chamber of Congress and Trump still in the White House. They have a long list of potential targets, including likely demands for Trump’s tax returns and probes into Cabinet members such as Education Secretary Betsy DeVos and Interior Secretary Ryan Zinke.
How a Democratic majority could undermine Mueller probe - If Democrats retake the House in the midterm elections, they’re prepared to use their newfound subpoena power to aggressively open probes into U.S. President Donald Trump’s finances and connections to Russia. But doing so — just as Mueller appears to be entering the final laps of his own probe — would create tensions between the special counsel and a newly crowned majority party replenished by scores of freshman lawmakers who rode into Capitol Hill on an anti-Trump wave. House Democratic aides have been meeting informally in recent months to discuss ways to do their jobs while avoiding stepping on Mueller’s toes in 2019, even toying with the idea of calling the special counsel in for a private bipartisan briefing. “The House may want to start their oversight by bringing in special counsel Mueller to hear from him,” said former California Representative Henry Waxman, who chaired the House Oversight Committee during the final two years of the George W. Bush administration and has been meeting informally with House Democrats to discuss investigation strategies. Dut Democrats concede that poking around could inadvertently draw out the special counsel’s own investigative interests far sooner than the special counsel might like. Potential conflicts could come on many fronts. For starters, Democrats will be eager to see Mueller’s findings and hard-pressed to give him space if he’s not finished yet. If Mueller’s Justice Department supervisors resist making the special counsel’s work public, a clash could emerge. Perhaps most potentially disruptive: Democrats could cause Mueller problems if they start granting immunity to witnesses whom the special counsel still wants to question or prosecute.
Mueller Accused Of Sexual Assault; Says Women Were Offered Money To Make False Claims - Update: The Gateway Pundit has removed the documents from their website containing the Mueller allegations after receiving information on Jacob Wohl - a TGP employee believed to be linked to the Mueller accusation. Earlier today we were given information on accusations against former FBI Director Robert Mueller.We took the documents down and we are currently investigating these accusations.There are also very serious allegations against Jacob Wohl. We are also looking into this.— Jim Hoft (@gatewaypundit) October 30, 2018 The Atlantic covered the Mueller accusation in detail on Tuesday, claiming a woman who says a company called "Surefire Intelligence," allegedly hired by Burkman, offered to pay her "to make accusations of sexual misconduct and workplace harassment against Robert Mueller." Wohl's alleged involvement in the Surefire Intelligence can be read by clicking the link below and following the thread: Sure looks like this weird "private intel agency" is the one that made the dodgy Mueller accusation. They claim to have been founded by ex-Mossad lol pic.twitter.com/jzjvLwhw4t — Aric Toler (@AricToler) October 30, 2018 * Special Counsel Robert Mueller has told the FBI that women were "offered money" to make "false claims" about him, according to CNBC. Mueller has referred the allegations to the FBI.
Trump Nails Stormy Daniels With $341,000 Demand For Legal Fees - President Trump has demanded $341,559.50 in legal fees from Stormy Daniels after a federal judge threw out her defamation case against the president earlier this month, reports the Washington Examiner.US District Judge James Otero dismissed the case against Trump after ruling that an April tweet calling a forensic sketch of a man Daniels claims threatened her was a "total con job." Otero said Trump's tweet constitutes "rhetorical hyperbole" covered by the First Amendment, and ordered Daniels (real name Stephanie Clifford) to pay Trump's legal fees. "The court agrees with Mr. Trump’s argument because the tweet in question constitutes ‘rhetorical hyperbole’ normally associated with politics and public discourse in the U.S.," Otero said in his October 15 ruling.In a Monday court filing, Trump's attorneys demanded $341,559.50 from Daniels, claiming that she "filed this action, not because it had any merit, but instead for the ulterior purposes of raising her media profile, engaging in political attacks against the president by herself and her attorney, who has appeared on more than 150 national television news interviews attacking the President and now is exploring a run for the presidency himself in 2020."Of note, Trump is seeking reimbursement for more than 500 hours of attorneys' fees, with hourly rates ranging from an average of $841.64 for high-profile attorney Charles Harder (who represented Hulk Hogan in his $140 million lawsuit against Gawker), to $756.49 an hour for Los Angeles attorney Ryan Stonerock, all the way down to $307.60 for Harder LLP attorney Ted Nguyen. Avenatti told the Examiner: "This is a number created out of whole cloth," adding "And it is nothing compared to what he will owe my client from the main NDA case."
Judge denies Trump’s request for stay in emoluments case - WaPo - A federal judge on Friday denied President Trump’s request to stay a lawsuit alleging he is violating the Constitution by doing business with foreign governments, a decision that paves the way for plaintiffs to seek information about customers at his hotel in the District.U.S. District Judge Peter J. Messitte in Greenbelt, Md., denied the Justice Department’s request that he pause the case to allow a higher court to intervene. And Messitte sharply questioned the president’s position that his business does not improperly accept gifts or payments — called emoluments — as defined by the Constitution. By Trump’s analysis, Messitte wrote, the term emoluments is the subject of such “substantial grounds of disagreement” that payments his business received from foreign governments could not qualify. The judge did not agree: “The Court finds this a dubious proposition.” Messitte ordered the plaintiffs, the attorneys general for the District and Maryland, to submit a schedule for discovery — the process of producing evidence for the case — within 20 days. That decision is subject to appeal. The judge has limited discovery to information related to the president’s District hotel. This is the second civil case in which Trump’s business is now subject to discovery, after Trump agreed Tuesday to produce portions of his calendar from 2007 and 2008 in a defamation lawsuit brought by former “Apprentice” contestant Summer Zervos. In his 31-page opinion, Messitte rejected Trump’s argument that this case should be halted so it could be appealed midstream — a request typically granted in extraordinary circumstances, where an unresolved legal question makes it hard to go on. Justice Department attorneys argued that the lawsuit should ultimately be dismissed because it was a burden for Trump, distracting from his duties as a sitting president. The department issued a statement signaling it would appeal again. “The Department of Justice disagrees with and is disappointed by this ruling,” said spokeswoman Kelly Laco. “This case, which should have been dismissed, presents important questions that warrant immediate appellate review.”
33 Trillion More Reasons Why The New York Times Gets it Wrong on Russia-gate - The Times‘ claim last month that Russian Facebook posts reached nearly as many Americans as actually voted in the 2016 election exaggerated the significance of those numbers by a factor of hundreds of millions, as revealed by further evidence from Facebook’s own Congressional testimony. Th further research into an earlier Consortium News article shows that a relatively paltry 80,000 posts from the private Russian company Internet Research Agency (IRA) were engulfed in literally trillions of posts on Facebook over a two-year period before and after the 2016 vote. That was supposed to have thrown the election, according to the paper of record. In its 10,000-word article on Sept. 20, the Times reported that 126 million out of 137 million American voters were exposed to social media posts on Facebook from IRA that somehow had a hand in delivering Trump the presidency. The newspaper said: “Even by the vertiginous standards of social media, the reach of their effort was impressive: 2,700 fake Facebook accounts, 80,000 posts, many of them elaborate images with catchy slogans, and an eventual audience of 126 million Americans on Facebook alone.” The paper argued that 126 million was “not far short of the 137 million people who would vote in the 2016 presidential election.” But Consortium News, on Oct. 10, debunked that story, pointing out that reporters Scott Shane and Mark Mazzetti failed to report several significant caveats and disclaimers from Facebook officers themselves, whose statements make the Times’ claim that Russian election propaganda “reached” 126 million Americans an exercise in misinformation. The newspaper failed to tell their readers that Facebook account holders in the United States had been “served” 33 trillion Facebook posts during that same period — 413 million times more than the 80,000 posts from the Russian company.
Michael Cohen: Trump said 'black people are too stupid to vote for me' - President Donald Trump once said, "Black people are too stupid to vote for me" and suggested that all countries run by blacks are "s---holes," Trump's former lawyer Michael Cohen says in a new bombshell interview.Also in the Vanity Fair interview, Cohen said he once was traveling to Chicago with Trump in the late 2000s, "we drove through what looked like a rougher neighborhood.""Trump made a comment to me, saying that only the blacks could live like this," Cohen recalled in the article, entitled "Michael Cohen says Trump Repeatedly Used Racist Language Before His Presidency."And Cohen said that when he and Trump once talked about the first season of Trump's reality show "The Apprentice," the president was "explaining his back-and-forth about not picking" Kwame Jackson, a black investment manager as the winner. "There's no way I can let this black f-g win," Trump said, according to Cohen's account. The White House did not immediately respond to CNBC's request for comment. Vanity Fair, in its article, said the White House didn't respond to multiple requests.Trump, for his part, has made a point of claiming he has been reaching out to black voters. Last month, he hosted entrepreneur and music star Kanye West and football hall-of-famer Jim Brown at the White House. During that visit, West rejected the notion that Trump, who has a history of making incendiary comments about race, doesn't deserve the support of minorities."A liberal would try to control a black person through the concept of racism, because we know we're very proud emotional people," West said. "So when I said I like Trump to like someone who is liberal, they'll say, 'Oh, but he's racist.' You think racism can control me? Oh, that don't stop me. That's an invisible wall." West has since said he is distancing himself from politics.
"They All Look The Same" - Hillary Cracks Racist Joke After Booker/Holder Mix-Up - Being the paragon of political-correctness and queen of virtue-signaling opportunism, Hillary Clinton sat down with Recode's Kara Swisher this weekend to answer questions about just how evil and awful conservative opponents have been in the last few months. The conversation began normally, with Clinton hypocritically toeing the progressive line of identity politics by explaining how each of the groups are different but can be managed by the same liberal movement:"What’s often called political correctness is politeness,” Clinton said.“It’s not being rude and insulting to people. It’s respecting the diversity that we have in our society,” she said.“The Democratic Party is a much more diverse political party, attracting people who are African-American, Latino, LGBT, whatever the reason why people feel more comfortable where they are taken in, where they are included as part of a political movement or party."“And I don’t think it’s politically correct to say we value that. And I don’t want to go around insulting people. I don’t want to paint with a broad brush every immigrant is this, every African-American is that, every, you know, other person with different religious beliefs or whatever - that’s childish."Childish, indeed. Insulting, indeed.Just 30 seconds later, as Swisher asked: "what do you think of Cory Booker... saying ‘kick them in the shins,’ essentially...” incorrectly recalling Eric Holder's recent comments. Which Clinton quickly corrected: “Well that was Eric Holder..." Adding, rather extraordinarily, "Yeah, I know they all look alike,” Clinton joked, triggering howls of laughter from the apparently mind-numbed audience. Sorry Hillary, we don't think they look anything alike? Or did u mean all black people? Finally, we have one question - what would have happened if Trump said it?
Yet another reason why Megyn Kelly does not need your sympathy --Megyn Kelly is out at NBC after an uproar over her comments in defense of blackface Halloween costumes during an episode of her television show last week. NBC has canceled “Megyn Kelly Today” and Kelly will be negotiating an exit from her contract. Speculation that Kelly would get a full payout for her three-year, $69 million contract drew a bitter response from people on Twitter. “Congrats to Megyn Kelly for getting $69 million for thinking blackface is fine,” one person tweeted.Kelly’s unfathomable severance package isn’t the only thing separating her from regular working people. She actually may have a say in her noncompete clause. According to The Hollywood Reporter, her legal representation is “attempting to keep her noncompete clause as short as possible. Six months is the standard in the television news industry.” Nearly one in five U.S. workers are bound by noncompete agreements, which block them from working for a competitor for a set period of time if they leave their current job. That’s nearly 30 million people who have essentially lost their full right to leave their jobs. And it’s not just highly paid workers who are required to sign them—14.3 percent of workers without a four-year college degree and 13.5 percent of workers earning up to $40,000 a year have noncompetes. If you are a typical worker and you are not in a union, one of the most important points of leverage you have to negotiate for a raise or fight back against abuse is the fact that you can quit and work somewhere else. A noncompete agreement weakens your power: you have to stay with your employer because you can’t seek or accept a better-paying job with a competitor. Most ordinary people don’t have the capacity to hire a high-priced litigator to protect their interests when it comes to noncompete clauses. Many people don’t even know that they signed a noncompete clause—or understand what it means. There is no justifiable reason that a sandwich maker should be prohibited from working for a competing establishment for two years after leaving his job at a sandwich shop.
Twitter apologizes for failing to respond to a user who reported bomb suspect Cesar Sayoc, Jr. days before nationwide bomb scare - Twitter said it is "deeply sorry" for failing to act on threatening tweets made by Cesar Sayoc, Jr., the 56-year-old Florida man who is suspected of sending improvised explosive devices to Democratic leaders and critics of President Donald Trump. On October 11, Sayoc published a threatening tweet to former congressional press secretary Rochelle Ritchie by telling her "We will see you 4 sure." Ritchie alerted Twitter of the tweet made from Sayoc's account, which contained several disturbing images and statements. "Hug your loved ones real close every time you leave you [sic] home," Sayoc said in the tweet with Ritchie's picture and a screenshot of a news story of a dead teenager. Ritchie, who called the tweet a "bad idea," reported the incident to the company. Twitter, in what appeared to be a boilerplate statement, said it "carefully" reviewed her case but "found that there was no violation of the Twitter Rules against abusive behavior," according to a screenshot uploaded by Ritchie. On Friday, police arrested and charged Sayoc, a pro-Trump activist seen attending a Trump campaign rally in 2017. His suspected social media accounts also featured threatening messages to other Trump critics, including those whose names were on the explosive packages sent to Democratic lawmakers. Ritchie complained to Twitter after Sayoc's tweets were publicized: "Hey @Twitter remember when I reported the guy who was making threats towards me after my appearance on @FoxNews and you guys sent back a bs response about how you didn't find it that serious. Well guess what it's the guy who has been sending #bombs to high profile politicians!!!!" By Friday afternoon, Sayoc's Twitter account was suspended. "We made a mistake when Rochelle Ritchie first alerted us to the threat made against her," the company said in a statement. "The Tweet clearly violated our rules and should have been removed. We are deeply sorry for that error."
PayPal Bans Social Network Gab.com After Synagogue Attacker Revealed As User - Hours after it was revealed that Saturday's Tree of Life Synagogue shooting suspect was a user of social media network Gab.ai, PayPal severed all ties with the platform with no explanation. The shooter, 46-year-old Robert Bowers, posted anti-Semitic and anti-Trump rhetoric over Gab, which bills itself as the "home of free speech" due to the minimal censorship employed by the site. Shortly before the shooting, he posted a message to Gab which condemns the Hebrew Immigrant Aid Society (HIAS) which he wrote "likes to bring invaders in that kill our people," before writing: "Screw your optics, I'm going in." Following the shooting, Gab quickly removed Bowers' account and sent all information to the FBI and DOJ. Torba then issued a full statement confirming the alleged attacker's presence on the site, and noting that Gab had taken immediate action - unlike other social media platforms. That apparently wasn't enough for PayPal (which, we would note, didn't sever ties with Facebook despite Bowers' presence on the site, or Instagram after it was revealed that Parkland shooter Nikolas Cruz posted pictures of weapons to the network). In a letter addressed to Gab CEO Andrew Torba, PayPal wrote: "We are hereby notifying you that we are terminating our relationship with your pursuant to PayPal's User Agreement. Under the PayPal User Agreement, PayPal, at its sole discretion, reserves the right to terminate your account for any reason and at any time upon notice to you."
Gab.com goes down after GoDaddy threatens to pull domain - Gab, the controversial social network with a far-right following, has pulled its website offline after domain provider GoDaddy gave it 24 hours to move to another service. The move comes as other companies including PayPal, Medium, Stripe, and Joyent blocked Gab over the weekend. It had emerged that Robert Bowers, who allegedly shot and killed eleven people at a Pittsburgh synagogue on Saturday, had a history of posting anti-Semitic messages on Gab.GoDaddy confirmed its decision in a statement to The Verge.“We have informed Gab.com that they have 24 hours to move the domain to another provider, as they have violated our terms of service. In response to complaints received over the weekend, GoDaddy investigated and discovered numerous instances of content on the site that both promotes and encourages violence against people.”Gab is presently inaccessible through its website, with a message stating that the company is “under attack” and “working around the clock to get Gab.com back online” with a new provider. “We have been smeared by the mainstream media for defending free expression and individual liberty for all people and for working with law enforcement to ensure that justice is served for the horrible atrocity committed in Pittsburgh,” the statement reads.Yesterday Gab’s Twitter account said that the network would “likely be down for weeks” because of hosting provider Joyent’s decision to pull support, though a more recent tweet today suggests it will be “back soon.” GoDaddy similarly cut off support for neo-Nazi news site the Daily Stormer following an article that was published about Heather Heyer, who was killed during the protests in Charlottesville last year. Meanwhile, major companies like Apple, Google, and Microsoft have taken various steps to remove Gab from their platforms.
In Wake of Synagogue Shooting, Social Media Purge Continues With Removal of Gab — In the wake of the mass shooting at the Pittsburgh Tree of Life Synagogue on Saturday, action has been taken to remove an alternative social media network on which the shooter responsible for Saturday’s massacre, Robert Bowers, had posted. The decision comes not long after a coordinated effort by Facebook and Twitter that deleted hundreds of anti-establishment accounts and pages.Gab, a Twitter alternative that has thus far been largely dominated by “alt-right” users and those that have been “banned” or “shadow banned” on Twitter, has now been booted by both its hosting company, Joyent, and the domain registrar GoDaddy, after both companies stated that the posts Bowers had made on the social network violated their terms of service. Bowers allegedly posted just minutes before the shooting on the Gab platform, writing “I can’t sit by and watch my people get slaughtered. Screw your optics, I’m going in.” Bowers had allegedly blamed the Jewish people for “committing genocide” against white Americans.Upon learning of the shooter’s account on the platform, Gab deleted the account and backed up the data, which it also provided to the Department of Justice and FBI. In addition, via a statement, Gab disavowed “all acts of terrorism and violence” and said its mission is “to defend free expression and individual liberty online for all people” by offering an uncensored social networking platform.Gab later noted that its coordination with the DOJ and FBI regarding the shooter’s account helped provide law enforcement with “concrete evidence” and a “clear motive” for the crime, adding that “more speech is always the answer.”Nevertheless, despite the extent of the cooperation between Gab and the legal authorities, Gab subsequently posted on Twitter that it was “being forced off the internet for the disgusting actions of one man.” Notably, Robert Bowers also had accounts on other social media platforms including Twitter, but those social networks were not targeted for those accounts or any of the posts created by those accounts. Breaking: @joyent, Gab’s new hosting provider, has just pulled our hosting service. They have given us until 9am on Monday to find a solution. Gab will likely be down for weeks because of this. Working on solutions. We will never give up on defending free speech for all people.pic.twitter.com/YvnBOFoQQn
Tearing Down Social Media Platforms Like Gab Won’t Stop the Violence — Last weekend, a horrible tragedy occurred when a gunman opened fire in a Pittsburgh synagogue, killing 11 people. In the wake of this tragedy, a devastated public has been seeking to make sense of this act of mass violence. But as is common when dealing with grief, sadness often turns to anger and confusion, and there is then a sense that justice must be served, not just on the perpetrator but even on those indirectly involved. When an individual commits a violent act, only that person should be held directly responsible. But our country has lost its sense of personal responsibility, and when something goes wrong, the default response is to widely cast blame on anyone or anything that can conceivably be linked to the act. Following the Pittsburgh shooting, many have decided that punishing alternative social media platforms will somehow avenge the lives lost. Unfortunately, this is not the case. And by arbitrarily pointing fingers, we completely abandon the principle of personal responsibility.Immediately following the massacre, it was discovered that the suspected gunman had made several anti-semitic social media posts, many originating on the platform Gab. In response, PayPal sent a letter to Gab stating that it would no longer offer payment services to the network. PayPal gave no specific reason for this action aside from specifying that it had the right to terminate business relationships at its own discretion, which, as a private company, it absolutely does. Shortly thereafter, Gab received word that its web hosting provider, Joyent, would also be ending their business relationship in light of the gunman’s social media presence on its site. GoDaddy has cut its ties with the platform, as well. Gab told its users that it would be working on finding alternatives, but these losses will surely cause the social networking site many problems in the coming weeks. Adding expropriation to injury, the payment processing company Stripe sent a letter to Gab, saying:“While we continue our investigation, we are suspending transfers to your bank account, effective immediately. Your Stripe account will continue to be able to receive payments from your customers, but you will not receive payouts until we re-enable them.” Gab is not the only social media platform that has been used by murderers and other monsters of humanity. At its peak, the terrorist group ISIS frequently made use of Twitter as a means of recruiting members. Twitter has also been used by several other users who were later discovered to be murderers. However, Twitter itself was never held responsible for these users’ actions.
Luongo- The Attack On Gab Proves Speech Was Never Free - The First Amendment protects your right to say whatever you want free from government prosecution. It does not protect you from saying hateful things on private properties or privately-owned forums without fear of repercussion.That is the very definition of freedom of association.Friday’s attack by an unhinged, vile piece of human excrement on a Synagogue in Pittsburgh wasn’t hours old before real world agendas pushed to the top of the news.Twitter alternative Gab was immediately dropped by PayPal without specific reasons.Then immediately, Gab’s latest hosting service unilaterally gave the company a 48-hour termination notice of its contract.This is the second time Gab has had to switch providers this year. They have been denied an app in the iOS store. Google will not allow their Android app to be in the Play Store. Why is Gab targeted? Because Gab is a true alternative to Twitter which exists outside of the control of the financial and political oligarchy.With the recent passing of the EU’s “Link Law” which is designed to shut down opposition voices, the merged corporate/political oligarchy are moving to ensure that all speech is criminalized.But to do that they first have to square the circle around that pesky First Amendment in the U.S.And that means outsourcing the censorship to the companies who own the internet access points – the app platforms, the social media giants, the hosting firms and payment processors.If you can’t build and maintain a business then you can’t oppose their rule.This is classic barrier-to-entry stuff that the government engages in to protect the market share of the favored companies over their competition.And despite the roadblocks put up in front of Gab it has continued to grow.The platform has improved. I know. I’ve been a member since 2016 when it was only a haven for the vilest of people. That early culture drove me away along with its limitations, but then again, I’m pretty bad at this whole social media thing.But, today that is not the case. Gab simply doesn’t censor you. If you want to be a jackass in public, that’s your business. What content you consume and produce is your responsibility and CEO Andrew Torba has given you those tools to speak freely and freely be ignored.In fact, the censorship tools are stronger than they are on Twitter.Gab is more stringent in enforcing its policy to remove speech which is a clear incitement to violence than Twitter is.And that’s the irony of this. The Synagogue shooter was a member of Gab. He also had a Facebook, Twitter and Instagram account. They did this to Gab because they could and because they were told to.
Twitter "sorry" for "mistake" of posting "Kill All Jews" as a trend --"Yeah, sure, sorry, whatever," muttered Twitter, while making the "wanking" hand motion. "This phrase should not have appeared in trends, and we’re sorry for this mistake," a Twitter spokesperson said in a statement. "This was trending as a result of coverage and horrified reactions to the vandalism against a synagogue in New York. Regardless, it should not have appeared as a trend." Everything Twitter has said or done about trolls, abuse, harassment, threats, Nazis or "the health of conversations" treats it as someone else's problem. To Twitter these are PR issues, and its solutions are oriented to media coverage. This is why nothing ever really changes, least of all its enthusiasm for product features that might accomplish more. I suspect they can't do better because it is incomprehensible to them. Its understanding of its own product prohibits an understanding of what's bad about promoting "Kill All Jews" a week after 11 were slaughtered by a wingnut. Much that is human is alien to them.
Post-Pittsburgh Gab-Crackdown Proves Need For Alternative Internet Architecture - As is widely known by now, Gab, the ad-free social media service that was/is devoted to “preserving individual liberty, the freedom of speech, and the free flow of information on the internet” – the exact things, incidentally, that the invisible comptrollers of the Internet fear the most – is facing an Internet sanctions regime when it became know that Bowers had posted an anti-Semitic rant over their platform. Gab suffered coordinated sanctions by PayPal, the online payment service, and Joyent, the cloud computing server, two IT powerhouses that refused to continue business relations with the social media platform, even though Gab continues to cooperate with the authorities in the case. Later, Stripe, Godaddy and Medium also joined the boycotters.Attacking a social media platform for the content that one of its users posted is almost the same as attacking the Ford Motor Company because one of its customers drove their Mustang around town with hateful messages smeared on the window. Gab, just like Twitter, Facebook and all the others, is simply a vehicle for disseminating messages; and, try as they might, they will not always be able to control what their millions of users will write on that vehicle at any given moment. Moreover, such an unpredictable scenario, where a maniac suddenly throws up a social media post just minutes before committing a horrific crime could have happened to any company. Gab did not create Robert Bowers any more than Facebook, Twitter or Donald Trump did. And as the above post shows, hateful messages left on Gab were not significantly more numerous than that of Twitter, its powerful competitor who would love nothing more than to see its market challenger fall to a million arrows of public acrimony. Yet, it’s only due to sheer luck that Facebook and Twitter, judging by the unfathomable amount of hate speech that regularly features on their platforms, have not suffered the same sort of bad luck as Gab.
Facebook Censorship Of Alternative Media Just The Beginning, Warns Top Neocon Insider - At a Berlin security conference, hardline neocon Jamie Fly appeared to claim some credit for the recent coordinated purge of alternative media... 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.
Brutally Honest- Facebook Removes, Then Restores, Images From Yemen - Mish - A couple of questions describe the problem with censorship: Who controls the censors? What biases do they have? Please consider Photo of a Starving Girl in Yemen Prompts Facebook to Remove Posts of Article.For a few hours after The New York Times published an article about conflict and hunger in Yemen, Facebook temporarily removed posts from readers who had tried to share the report on the social platform.At issue was a photograph of a starving child. The article included several images of emaciated children. Some were crying. Some were listless. One, a 7-year-old girl named Amal, was shown gazing to the side, with flesh so paper-thin that her collarbone and rib cage were plainly visible. Tens of thousands of readers shared the article on Facebook, but some got a message notifying them that the post was not in line with Facebook’s community standards.Facebook had addressed the issue by Friday night.“As our community standards explain, we don’t allow nude images of children on Facebook, but we know this is an important image of global significance,” a spokeswoman said in an emailed statement. “We’re restoring the posts we removed on this basis.”It took Facebook a few hours to realize it made a mistake in removing brutally honest images of the effects of the civil war in Yemen.The images expose the blatant hypocrisy of the US in backing the corrupt Saudi Arabia regime in its war in Yemen.This was not a nude image. It is not a "community standards" image. Nor was there any doubt about the authenticity of the image.Any censor can judge "community standards" however they want, but Facebook is an international phenom, not Podunk USA.Facebook could have and should have said "we f*ed up yet again" but never expect that.Rather than rejecting that image, Facebook should have promoted it. Instead, we had temporary censorship. Next time it might not be temporary.
Facebook Approves Political Ads From 100 Out Of 100 Fake Senators Facebook approved political ads by journalists pretending to be political candidates 100 out of 100 times, according to a report by VICE. One of Facebook’s major efforts to add transparency to political advertisements is a required “Paid for by” disclosure at the top of each ad supposedly telling users who is paying for political ads that show up in their news feeds. But on the eve of the 2018 midterm elections, a VICE News investigation found the “Paid for by” feature is easily manipulated and appears to allow anyone to lie about who is paying for a political ad, or to pose as someone paying for the ad. -VICETo test Facebook's system, VICE News applied to run ads on behalf of all 100 sitting US senators, "including ads "Paid for by" Mitch McConnell and Chuck Schumer." Each and every one was approved, suggesting that anyone can buy a political ad and pretend to be a major US politician. While VICE didn't actually buy any advertising, Facebook granted permission for the fake senators to share ads from fake political groups such as "Cookies for Political Transparency," and "Ninja Turtles PAC." Last week, VICE conducted a test in which they sought and received approval to run political ads pretending to be Mike Pence, DNC Chairman Tom Perez and the Islamic State Group. An attempt to place an ad posing as Hillary Clinton was not approved. But these tests show that compliance with the feature is entirely voluntary, meaning a tool that Facebook introduced to increase trust in advertising can also be used as a vector for misinformation, and another way bad actors can game Facebook’s platform. –VICE
Facebook warned Wall Street that it’s going to spend a lot of money fixing problems that can never be fixed – After a catastrophic Q2 report, which sent Facebook shares crashing nearly 24% in July, Tuesday was a more stable picture in which the stock fell and then rallied again in after-hours trading.Wall Street was reassured that Facebook is moving in the right direction amid what must be the most difficult year in the firm’s history. It was a story of “stabilisation,” as Deutsche Bank put it. But amid the relief rally, Facebook offered loud and repeated warnings that its controversies are not a thing of the past. During its earnings call, the company said 2019 will be a year of significant investment in the “arms race” against security breaches, fake news, and inappropriate content.Facebook’s seemingly perpetual grapple with these issues was laid bare just hours later, when Business Insider revealed that it was able to run a fake political ad from Cambridge Analytica, the disgraced political consultancy that was banned from Facebook over a giant data breach.Facebook CEO Mark Zuckerberg told investors that costs will rise to meet this challenge. “The last few years and next year are probably going to be the biggest growth in the investment in the security efforts that we will see,” he said on Tuesday’s earnings call.What does that look like in cash? Facebook’s total costs and expenses were nearly $US20.4 billion in 2017 and it has already spent $US21.2 billion this year, with one quarter to go. UBS said the firm’s total costs could rocket by as much as 50% next year as Facebook protects its users.And even then, Facebook may never be fixed. Here’s the key quote from Zuckerberg (emphasis ours):“When you’re talking about security issues and some of the safety and content issues, these are not problems that we fix, right? They’re problems that you manage over time and try to reduce and prevent issues from coming up, but there’s no silver bullet where you do the thing and then you’re done.”
Hundreds Of Google Employees Plan Walkout Over Accused Sexual Deviant's $90 Million Exit Package - Over 200 Google employees will participate in a company-wide walkout Thursday after the New York Times reported that the company paid a $90 million exit package to Android mobile software creator, Andy Rubin, despite sacking 48 people over sexual harassment claims over the last 24 months. The Times report claimed that Rubin coerced a woman into performing oral sex in a hotel room in 2013, and granted his severance package in 2014 after the allegations came to light. What Google did not make public was that an employee had accused Mr. Rubin of sexual misconduct. The woman, with whom Mr. Rubin had been having an extramarital relationship, said he coerced her into performing oral sex in a hotel room in 2013, according to two company executives with knowledge of the episode. Google investigated and concluded her claim was credible, said the people, who spoke on the condition that they not be named, citing confidentiality agreements. Mr. Rubin was notified, they said, and Mr. Page asked for his resignation. -NYTAnd as the Times notes: "Google could have fired Mr. Rubin and paid him little to nothing on the way out. Instead, the company handed him a $90 million exit package, paid in installments of about $2 million a month for four years, said two people with knowledge of the terms. The last payment is scheduled for next month." Google, meanwhile, fired 13 senior managers out of the 48 fired for misconduct, according to BuzzFeed, and "None of these individuals received an exit package."
Google staff walk out over women's treatment - Staff at Google offices around the world have staged an unprecedented series of walkouts in protest at the company's treatment of women. The employees are demanding several key changes in how sexual misconduct allegations are dealt with at the firm, including a call to end forced arbitration - a move which would make it possible for victims to sue. Google chief executive Sundar Pichai has told staff he supports their right to take the action. "I understand the anger and disappointment that many of you feel," he said in an all-staff email. "I feel it as well, and I am fully committed to making progress on an issue that has persisted for far too long in our society… and, yes, here at Google, too." A Twitter feed titled @googlewalkout documented the movement at Google's international offices. Google staff in Singapore, Zurich, London, Tokyo, Berlin and New York were among those to take part.
Google Workers Across the World Walkout to Protest Sexual Harassment of Women — Thousands of Google employees across the globe walked out of their offices at 11:10am local time on Thursday to demand improvements to workplace culture including an end to sexual harassment and misconduct. The walkout comes on the heels of an executive resigning this week after the New York Times reported that he allegedly harassed a female job applicant and that the company gave another executive accused of harassment a “hero’s farewell” and a $90 million exit package. The first of many coordinated #GoogleWalkout protests has begun – this is at the firm’s office in Singapore. (Pic via https://t.co/h44RZYGGHV ) pic.twitter.com/QeFgmPbHnN Those who are participating in the Google Walkout For Real Change are leaving flyers at their desk that read: “I’m not at my desk because I’m walking out in solidarity with other Googlers and contractors to protest sexual harassment, misconduct, lack of transparency, and a workplace culture that’s not working for everyone. I’ll be back at my desk later.” Very proud to participate in the #googlewalkout today showing solidarity with my colleagues, fighting for equality and demanding real change ! pic.twitter.com/QN5gzkigPr “I’m here protesting against harassment in the workplace, to make sure that we don’t protect or support those perpetrators of harassment,” a demonstrator in London told Sky News. “I think people are supporting those who have been harassed in any workplace situation, by any employer, and this is just part of the movement.” "I'm here protesting against harassment in the workplace" – @rowlsmanthorpe is outside Google's London office where workers have staged a walkout in protest against the treatment of women at the company. For more on the story, head here: https://t.co/GmbvyGrrlx pic.twitter.com/6h4PXI7U1k
Quick Thoughts on the Google Walkout - Yves Smith - The Google walkout is the highest profile incident yet of employees demanding that the the Silicon Valley giant take action. Google said it would stop providing artificial intelligence for a Department of Defense drone program after thousands of employees signed a petition opposing it. In August, Google staffers were in an uproar over the company’s involvement in a censored search engine in China. James Damore was fired after publishing an article internally that argued that women were inferior coders. A New York Times article last week, on how the “creator” of the Android operating system, Andy Rubin, received $90 million when he left Google in the face of allegations that he’d pressured an employee into preforming oral sex, a charge Google investigators deemed credible, triggered the walkouts. Wired summarized some of the related issues:Recent allegations about inequity inside Google include a Department of Labor investigation into systemic gender pay gap, a lawsuit alleging gender bias in pay and promotion, a lawsuit alleging sexual harassment, and the doxxing and harassment of diversity advocates after a since fired Google engineer argued in a memo that women were less biologically suited for technical roles.The demands: We, Google employees and contractors, will walkout on November 1 at 11:10am to demand these five real changes. #googlewalkout pic.twitter.com/amgTxK3IYw — Google Walkout For Real Change (@GoogleWalkout) November 1, 2018 I particularly like #1 and am glad they put that first. Mandatory arbitration clauses are designed to deprive employees and consumers of legal redress. #2 is an “obey the law” demand; #5’s board member is similar to the German practice of having labor representatives on the board.
IBM to Acquire Linux Distributor Red Hat for $33.4 Billion -- IBM agreed to acquire software maker Red Hat Inc. in a $33.4 billion bet on jump-starting its efforts to catch up in the cloud.International Business Machines Corp. will pay $190 a share in cash for Raleigh, North Carolina-based Red Hat, according to a statement from the companies Sunday, confirming an earlier Bloomberg News report. That’s a 63 percent premium over Red Hat’s closing price of $116.68 per share on Friday. "The acquisition of Red Hat is a game-changer. It changes everything about the cloud market," said Ginni Rometty, IBM’s chairman and chief executive officer, in the statement. Rometty, 61, has been trying for years to steer the 107-year-old technology giant toward more modern businesses, such as the cloud, artificial intelligence and security software. The Red Hat purchase will give IBM an immediate cloud revenue boost growth as well as a suite of proven software products to sell through its global sales force. “We will scale what Red Hat has deeply into many more enterprises than they’re able to get to,” Rometty said in a phone interview.
Net Neutrality on Pause: California Agrees Not to Enforce New Rules as States Fight FCC in Court - California agreed Friday not to enforce its new net neutrality rules -- the toughest state-level internet protections in the nation -- while court deliberations continue over the federal government's underlying rollback of net neutrality. The Department of Justice and internet service provider trade associations, which sued the state for enacting a law that sets different ground rules for internet protections in California, have also agreed to put that lawsuit on hold until 2019. Gov. Jerry Brown last month signed a bill that in effect restored net neutrality rules put in place in 2015 under the Obama administration and overturned by an order of the Federal Communications Commissions in December. The state law, which had been scheduled to take effect Jan. 1, would ban internet service providers (like Comcast or Verizon) from giving certain websites or apps special treatment, such as speeding up downloads of video services that pay the provider additional fees. Within minutes of Brown signing SB822, the Justice Department sued to undo it, arguing that states do not regulate interstate commerce, rather, the federal government does. "Once again the California Legislature has enacted an extreme and illegal state law attempting to frustrate federal policy," Attorney General Jeff Sessions said in a statement announcing the suit. More than 20 states' attorneys general along with public interest groups and private businesses filed a lawsuit against the Federal Communications Commission for removing earlier net neutrality rules. Arguments in that case are scheduled to begin Feb. 1.
4 questions ahead of Fed proposal to overhaul regional bank rules - American Banker — For regional banks with more than $100 billion of assets, all eyes will be on the Federal Reserve Wednesday as the U.S. central bank proposes changes to its prudential supervision program for large banks. The proposal will be a key indicator of how the Fed will implement the regulatory relief bill signed in May by President Trump. The law was hailed for limiting the Fed's toughest regime to the biggest banks, but the agency retained discretion to maintain certain standards for regional banks, leaving them somewhat in limbo. Specifically, the Fed will unveil details on how it may supervise banks with between $100 billion and $250 billion of assets. The new law raised the asset cutoff for determining which banks are "systemically important financial institutions" — and subject to heightened post-crisis standards — to $250 billion, from $50 billion. But banks in the middle range could still face SIFI-like supervision in certain areas. 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. Meanwhile, even larger banks are hoping the Fed delivers relief for them too. Many expect the central bank to consider tailoring requirements for certain banks above $250 billion. Those institutions are still considered SIFIs, but the Fed has been urged to differentiate banks above the cutoff that are not among the eight U.S.-based “globally systemically important banks" — a special designation limited to the most complex institutions. On top of this all, Republicans lawmakers are also urging the Fed to reduce the G-SIB surcharge, an additional capital charge for the largest banks based on their reliance on wholesale funding. Here are four key questions ahead of the Fed's board meeting:
- Will regional banks be satisfied with Fed's proposed changes? Behind the scenes, regional banks have been pushing the Fed to ease supervision in accordance with the new law. Trade groups and some lawmakers have advocated on the banks' behalf more publicly.
- How will Congress react? Republican lawmakers have largely pushed the Fed to relieve all banks under the $250 billion asset threshold from the enhanced prudential standards. But the progressive wing of the Democratic Party, which voted against S 2155, will likely view any significant relief as a giveaway to Wall Street. More moderate Democrats who supported the legislation may also weigh in on whether the Fed struck the right balance.
- Will the Fed address banks above $250 billion? Perdue and other Republicans have called on the Fed to ease supervisory requirements for certain banks with more than $250 billion of assets. They argue that those banks should not be in the same boat as the eight most complex institutions designated as “globally systemically important banks.”
- Will the Fed propose changes to the G-SIB surcharge? The eight U.S.-based G-SIBs — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley, Goldman Sachs, State Street and BNY Mellon — are required to apply an additional 1% to 4.5% to their minimum capital requirements, depending on their size, risk and complexity.
Fed unveils overhaul of large-bank supervision — The Federal Reserve Board published a pair of proposals Wednesday to create a tiered structure for holding companies with over $100 billion of assets. In a memorandum released ahead of an open meeting Wednesday morning, the Fed outlined the details of how it plans to restructure several key aspects of its post-crisis regulatory framework, thereby reducing capital, liquidity and procedural requirements for many of the bank holding companies it supervises. The two proposals — one drafted by the Fed alone and another issued jointly with the Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. — would create four tiers of bank and thrift holding companies with more than $100 billion in assets. That structure would distinguish between banks with assets of $100 billion to $250 billion; banks with more than $250 billion of assets that exceed certain risk thresholds; firms with more than $700 billion of assets or more than $75 billion of cross-border assets; and U.S. global systemically important banks, or G-SIBs. Banks in the first, least risky, category would “no longer be subject to standardized liquidity requirements or" have to "conduct and publicly disclose the results of company-run capital stress tests,” the memo said. Firms in the next category, which includes banks with over $250 billion, would be subject to “enhanced standards that are tailored to the risk profile” of the firms. The Fed said that it would “largely keep existing requirements in place” for riskier firms in the remaining two categories: G-SIBs and banks with more than $700 billion of assets or $75 billion of foreign assets. The regulations for G-SIBs would remain unchanged. Federal Reserve Chairman Jerome Powell said in a prepared statement that the proposal is meant to tailor regulations to meet the risk profiles of the covered institutions, and that means both reducing stringency for banks with the least systemic risk and maintaining stringency for those whose failure could shake the financial system. Fed Vice Chairman for Supervision Randal Quarles said the purpose of the changes is not to reduce the capital or liquidity in the banking system, but rather to direct the capital that is already being retained in the system to the firms that pose the most risk. “The total amount of capital maintained by large bank holding companies that are subject to stress testing requirements is currently about $1.3 trillion,” Quarles said. “The cumulative effect of the proposed changes we are considering today would result in a decrease of $8 billion of required capital, or a change of 0.6%.” Fed Gov. Lael Brainard — a nominee of former President Barack Obama — was critical of the proposal, however, saying that the proposals “weaken the buffers that are core to the resilience of our system.” “The proposed reduction in core resiliency comes at a time when large banks have comfortably achieved the required buffers and are providing ample credit to the economy and enjoying robust profitability,” Brainard said. “In short, I see little benefit to the institutions or the system from the proposed reduction in core resilience that could justify the increased risk to financial stability and the taxpayer.”
Fed To Ease Liquidity Requirements For Regional Banks As Brainard Warns Of More Bailouts - On Wednesday the Federal Reserve is set to vote on proposals that would further ease capital requirements for banks with assets of $700 billion or lower, expanding on Trump's promise to deregulate Wall Street.The biggest benefits will come to banks with between $100 billion and $250 billion of assets - or the bulk of regional banks - who would no longer have to adhere to liquidity coverage ratio and proposed net stable funding ratio, according to prepared remarks by Fed Vice Chairman of Supervision Randal Quarles. Firms between $100 billion and $250 billion would also face stress tests every two years, instead of annually"A reduction of this magnitude is appropriate because most U.S. banking firms in this group are not engaged in complex activities and have more stable funding than systemic banks given their relatively traditional business models," said Quarles.At the same time, Non-Wall Street banks that have more than $250 billion of assets would move to a “calibrated” liquidity coverage ratio that is in the range of 70% to 85% of full LCR, Bloomberg notes.Meanwhile, large banks will generally see little benefits from today's deregulation: Quarles said that large bank holding companies now have about $1.3 trillion of capital, and the Fed proposals would reduce that by only $8 billion.Curiously, Fed Governor Lael Brainard said she plans to vote against proposals, arguing they would raise “the risk that American taxpayers again will be on the hook” to bail out banks.“I see little benefit to the institutions or the system from the proposed reduction in core resilience that could justify the increased risk to financial stability and the taxpayer,” Brainard says in prepared remarks. Her caution is warranted in light of the recent earnings shock unveiled by Bank OZK which unveiled a deeply distressed commercial real estate portfolio, which sent its stock plunging and prompted questions whether banks are covering up deterioration in some of their CRE holdings.
Fed draws line in sand on easing big banks’ burden — The Federal Reserve Board's proposal Wednesday to revamp many aspects of its post-crisis regulatory framework was as much about what the central bank left out of the plan.As expected, the biggest winners are regional banks with assets of $100 billion to $250 billion. The Fed sought to differentiate those banks, as well as some above the $250 billion cutoff, from the eight largest "global systemically important banks."Yet much of the post-crisis supervisory program was preserved. The framework for G-SIBs was virtually unchanged, while stress tests and other requirements are still a reality for all banks above $100 billion of assets. Greg Baer, president and chief executive of the Bank Policy Institute, said the proposal does not go far enough, unnecessarily deferring larger conversations about the applicability of foreign banking organizations, stress testing and other matters for a later discussion. Yet others said the Fed struck the right balance. The proposal was required as a result of the regulatory relief law enacted in May, which raised the initial $50 billion asset threshold for "systemically important financial institutions" in the 2010 Dodd-Frank Act to $250 billion. But the law also gave the Fed discretion to develop standards for banks above $100 billion of assets. The Fed's plan, released in two parts Wednesday, would establish four separate buckets of rules for banks over $100 billion. Category IV banks would be those with assets of $100 billion to $250 billion; Category III banks are those with more than $250 billion of assets and that exceed certain risk thresholds; Category II firms are those with more than $700 billion of assets or more than $75 billion of cross-border assets; and Category I banks would be made up of U.S. G-SIBs. Those categories bring with them differing enhanced prudential requirements, but the primary beneficiaries of the proposals are the category IV banks. Those institutions would only have to undergo biannual (rather than annual) public stress tests, and face less stringent liquidity requirements. The would also enjoy an exemption from the countercyclical capital buffer, and the ability to opt out of "accumulated other comprehensive income" reporting.Category III banks also got significant relief, with the Fed adjusting the Advanced Approaches thresholds to exempt those institutions, and proposing to allow them to opt out of AOCI reporting. They would also have to maintain a lower Liquidity Coverage Ratio and Net Stable Funding Ratio, and only have to carry out biannual company-run stress tests. Yet the only concession for Category I banks was that semiannual internal stress tests would be eliminated.Initial reactions to the proposal were mixed. Several banking industry critics said the proposal went to far, a view shared by Fed Gov. Lael Brainard, who voted against the proposal during Wednesday’s open board meeting. In particular, Brainard said the rollback of the LCR, which she said imposed "relatively low" compliance burdens, for banks over $100 billion could put the financial system at greater risk.
Fed revises supervisory rating system for large banks — The Federal Reserve Board unanimously voted Friday to finalize changes to its supervisory ratings system to better reflect the agency’s post-crisis emphasis on bank capitalization, liquidity and governance. The final rule eliminates the so-called RFI ratings system, which the Fed has used to assess banks’ safety and soundness since 2004. The RFI system focuses on risk management, financial condition and the impact of a firm's non-depository activities on its depository subsidiaries. But the central bank will now use a "large financial institution" — or LFI — ratings system, which parallels a supervisory program the central bank established in 2012 to emphasize capital, liquidity, and governance and controls. In the wake of the financial crisis, the Fed began to apply new attention to other aspects of bank safety and soundness, particularly with respect to the role that liquidity plays in in bank solvency. The Fed said in a press release that the final rule simply conforms what had been an outdated ratings system to the newer supervisory program, which “is aligned with the core areas most important to supporting a large firm's safety and soundness and U.S. financial stability.”
FDIC chief adds dose of caution about nontraditional bank owners - The head of the Federal Deposit Insurance Corp. expressed a hint of caution Thursday about opening the banking door to tech firms and other nontraditional providers without applying the same level of oversight faced by more traditional banks. Since arriving at the FDIC, Jelena McWilliams has signaled a willingness to move more quickly on industrial loan company applications than the agency has in the past. But asked her thoughts on letting fintech companies like Social Finance and larger firms such as Apple access to the banking system, McWilliams said regulators should not let down their guard. “We need to be very careful about allowing firms that are not traditional banks or don’t look like traditional banks into the banking space,” she said in remarks at a New York forum hosted by the Financial Times. However, McWilliams, who became FDIC chairman in June, also touted the potential of technological advances to enable community banks to be more competitive and allow regulators to conduct examinations more efficiently. “Looking at five years ahead, we’re going to probably see a regulatory framework that is perhaps more open to technological advances and what that does for the banks,” she said. While the Office of the Comptroller of the Currency has been developing a limited-purpose charter for fintech firms, the FDIC presents an alternative option for tech companies through the ILC charter. The state-chartered banking license — supervised at the federal level by the FDIC — affords federal deposit insurance. Charter recipients are exempt from bank holding company requirements, and it is one of the last banking options available to non-financial firms. Ever since the controversy around Walmart’s 2005 ILC bid, FDIC charters approvals have been virtually nonexistent. But after she was nominated, McWilliams indicated she was open to firms obtaining the charter.
Regulators propose new formula for estimating derivative exposures — The federal bank regulators have proposed to update the methodology banks use to calculate their derivative exposures when determining capital requirements. Large banks typically use an approach known as the "current exposure methodology" to calculate the amounts they owe or are owed in swaps, futures or options contracts. But in the proposal issued Tuesday by the Federal Reserve Board, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency, that methodology would be replaced by the "standardized approach for calculating credit risk." The change would apply to large banking organizations that have opted to use internal models to calculate their capital requirements rather than standardized Fed models. Under the proposal, the new approach — known as SA-CCR — would establish a floor below which derivative exposures could not fall. Large banks have to date been using both CEM and internal model methodologies to calculate derivatives-related risks, with CEM acting as a floor. The primary difference between CEM and SA-CCR is that the former does not appropriately consider the risk-reducing effect of collateral that banks put up as part of a derivatives contract, thus requiring the firms to hold more capital against their failure than is necessary, the agencies said. “The agencies intend for the proposed implementation of SA-CCR to respond to these concerns, and to be substantially consistent with international standards issued by the Basel Committee on Banking Supervision,” the proposal said. The agencies will accept comment on the proposed rule for 60 days after its publication in the Federal Register. The rule will then be phased in on July 1, 2020. Subscribe Now
CFPB's payday rollback plans don't go far enough for some lenders - Payday lenders have already scored a huge victory as the Consumer Financial Protection Bureau moves forward on revising unpopular underwriting requirements imposed by the agency's past leadership. But many in the industry say they still want more. Those affected by the CFPB's payday lending rule hailed the agency's announcement last week of plans to propose changes next year. But they expressed disappointment that the CFPB will address just the rule's "ability-to-repay" provisions, and not limits on how often a lender can debit a borrower's account. “We would prefer to have the CFPB redo the whole rule,” said Mary Jackson, CEO of the Online Lenders Alliance. “The payment section of the rule is already outdated, and if the current rule goes into effect it seems duplicative and unnecessary.” The agency under acting Director Mick Mulvaney has long been committed to easing the payday lending rule, drafted under former Director Richard Cordray, but the effort faces numerous obstacles. The bureau faces a deadline to revamp the rule by August 2019, when many of the Cordray-era requirements are set to take effect. Consumer groups, meanwhile, appear poised to challenge any rule rewrite in court, arguing that an overhaul of an existing rule violates the Administration Procedure Act. "They do have a burden in justifying the changes and what is new,” said Jane Luxton, an attorney at Clark Hill. “They can’t just revoke" the ability-to-repay provision "by fiat." But now, the CFPB is also hearing concerns that its changes to the rule may not go far enough. Under the existing rule, a covered lender cannot make more than two unsuccessful attempts to debit a payment from a consumer's checking account. Those restrictions were designed to protect borrowers from having their funds garnished by payday lenders or from incurring repeated overdraft fees. But lenders affected by the rule say that limit is artificially low, and conflicts with industry standards that predate the CFPB regulation.
Feds Crack Down On Traders Spoofing To Manipulate Prices Amid Record Number Of Cases - Federal regulators with the Commodity Futures Trading Commission (CFTC) are ramping up efforts to bust traders using a tactic known as "spoofing" to manipulate market prices, reports the Wall Street Journal, citing enforcement officials. Earlier this year, the CFTC began receiving daily sets of market data from the world's largest futures exchange - the CME Group, which handles around 85% of all futures trading by volume. Thanks to the data sharing arrangement, regulators have had unprecedented access to daily trading data with a one-day delay, giving them the ability to analyze trading activity for fraud. The result has been a record number of manipulation cases brought against traders. Regulators at the CFTC had previously relied on CME staff and whistleblowers to spot the practice. The data-sharing agreement, effective as of February, comes as the CFTC and Justice Department both pursue traders engaged in spoofing, a practice outlawed by the 2010 Dodd-Frank Act. When spoofing, traders place fake orders to create the illusion of supply or demand, causing prices to swing up or down. The traders then profit from the move back as the market reverts to normal levels.The CFTC brought a record 26 cases related to manipulative conduct and spoofing in the fiscal year ended Sept. 30. Several of those civil cases were accompanied by criminal charges filed by the Justice Department. Between 2009 and 2016, the average number of such cases brought was just five a year. –WSJ While spoofing is also a big problem in stock and bond markets, futures regulators and exchanges have been particularly concerned after the 2010 stock-market flash crash, which British trader Navinder Sarao caused after using an automated trading program to manipulate the market for S&P 500 futures contracts. Sarao was charged with fraud by US authorities.
GE Locked Out Of Commercial Paper Market After Moody's Downgrade - Yesterday we asked if, as a result of its ongoing operational troubles and recent downgrade by S&P, GE was facing another Commercial Paper "moment", with a Moody's downgrade now imminent. The reason is that GE has traditionally been one of the biggest issuers of Commercial Paper to fund daily operations, and used to be one of the biggest issuers of the debt:.Since then, GE's reliance on commercial paper was material, and in the second quarter, GE had on average around $16.6 billion of the debt outstanding - a sizable portion of its total $116 billion in debt.A warning shot came in early October, when S&P cut GE’s short-term grade to A-2, a level below the top tier. That’s a rating of commercial paper that some classic prime money market funds are reluctant to buy. In fact, prime money market funds historically had to have at least 97% of their securities rated at least A-1 from S&P and P-1 from Moody’s, but those rules were loosened amid this decade’s money market reform. Fast forward to today when moments ago GE found itself completely shut out of the Commercial Paper market, when Moody's downgraded its senior unsecured rating to Baa1, from A2, and downgraded the short-term rating to P-2, from P-1, making future sales of CP impossible.The silver lining is that GE had a pretty good hint that the downgrade was coming, and in the quarter ended Sept. 30, it brought its total Commercial Paper outstanding to just $3 billion, while noting that GE Capital will exit that market entirely by the end of this year. In lieu of CP access, on its earnings call GE said it would replace that funding with a net $40.8 billion of available credit facilities committed from banks. In other words, GE will now use its revolver, which carries a higher interest rate, to fund what it previously achieved using CP. At the same time, GE said it had been working to reduce its reliance on short-term financing: Rising U.S. rates have increased the cost of borrowing short term, and regulatory changes have effectively penalized the use of commercial paper relative to other financing methods.
What General Electric Is Doing to Dodge the Question: “When Will GE File for Bankruptcy?” - General Electric — at one time the world’s most formidable manufacturing company and now one of the world’s most mismanaged conglomerates — suffered more financial indignities this week: Its bond ratings got hit with back-to-back two-notch downgrades: Today by Fitch Ratings, from A to BBB+ due to the “deterioration at GE Power”; and earlier this week by Moody’s, from A2 to BAA1. This follows a similar move by Standard & Poor’s earlier in October.The rating agencies also downgraded the company’s commercial paper (CP) program, a form of short-term borrowing. Moody’s cut GE’s CP ratings from P-1 to P-2. The new, lower CP ratings effectively prevents GE from further issuance of CP. However, GE still retains access to other, higher cost bank financed short term funding vehicles. But still, not a good look.Also this week, GE virtually eliminated its quarterly dividend, slashing it from 12 cents to a penny. A belated Halloween themed headline could read, “Boston Slasher Strikes Again.” A year earlier GE’s board voted to cut its dividend from 24 cents to 12 cents.In our view the previous dividend reduction was better anticipated than the most recent one. Why the hurried need for a cut last week? Probably for cash conservation reasons. GE badly needs the $3.9 billion in cash saved per year to meet financial needs such as $5 billion required for an underfunded pension fund and $3 billion to shore up the capitalization of GE’s finance arm (or what remains of it).GE also requires considerable cash to retire existing debt. One of GE’s stated financial goals is to improve ratios of debt-to-EBITDA (earnings before interest, taxes, depreciation and amortization) to 2.5 times by 2020. In the present climate, we might refer to this as virtue signaling. Except here GE’s principal goal is to keep its respectable, investment-grade bond ratings.The debt burden that GE’s management is presently struggling with stems from a strategy of borrowing heavily for M&A over the past decade. The biggest (and probably worst) was its purchase of French electrical equipment manufacturer Alstom in 2015 in which GE outbid arch rival Siemens. GE paid top dollar just as the market for electrical equipment began a sharp slide. This acquisition was recently written down by $22 billion reflecting the rather subdued prospects for the global power generation. Talk about a winner’s curse.In order to raise cash and simplify its business, GE has arranged the sale of GE Transportation (locomotives, electric motors and propulsions systems for mining equipment, etc.), plans to dispose of its Baker Hughes oil services business, and intends to spin off (while retaining control) its profitable health services division.The power division will be split into two businesses: gas turbines and everything else. This last strategic endeavor is probably the one that rankles the most insofar as it’s about two decades too late. A true house that Edison built would have pitted the fossil vs renewables organizations and let the markets sort it out.
Reverse mortgage program remains threat to FHA’s financial health — The mortgage industry is closely watching the Federal Housing Administration’s reverse mortgage program as the agency prepares to release its annual actuarial report sometime this month, which will reveal whether the historically volatile program is continuing to threaten the FHA's financial soundness. Home equity conversion mortgages, or HECMs, helped drag down the FHA's capital reserve ratio to 2.09% in the last fiscal year, barely above the 2% statutory minimum to cover losses. The product presents greater risks to the agency than conventional mortgages, including higher interest rates and more borrowers defaulting on loans. As a result, the FHA claims and losses have also risen, and as of last year’s report, the reverse mortgage program is projected to generate $15.5 billion in loan losses for the agency’s mutual mortgage insurance fund over the next 30 years. Although the FHA kicked off fiscal year 2018 by lowering principal limit factors for all reverse mortgages, which changed the amount a borrower could withdraw, and adjusting the initial and annual mortgage insurance premium, it’s unlikely that this year’s actuarial report — which will be released this month — will show major changes. “The changes FHA made to the principal limit factor and the adjustments HECM premium in 2017 were designed to help, but did not and were not intended to fully solve the financial volatility of the program,” FHA Commissioner Brian Montgomery said on a recent phone call with reporters. The HECM program is especially hard to manage because the results of policy adjustments usually don’t appear in the data for “many, many, many years,” unlike changes to the forward mortgage program, said Pete Mills, a senior vice president at the Mortgage Bankers Association. That the FHA "has made two rounds of significant changes to the HECM program just in the past year suggests that they’re still having trouble managing that program,” he said.
FHLB housing goals would change under new proposal — The Federal Housing Finance Agency has released a proposal to change the way the Federal Home Loan Banks set housing goals. The proposed rule would establish a new benchmark for small Federal Home Loan Bank System members to pursue housing goals, set a new housing goal for members that is calculated as a share of total asset purchases and eliminate a volume threshold for meeting the goals in favor of different categories of mortgage purchases. Home Loan banks purchase mortgages through the system's "acquired member asset" purchases (AMA) program, which is voluntary. “To be successful, housing goals should lead the FHLBanks to make affordable housing part of their business plans for AMA," FHFA Director Mel Watt said in a statement. “The overall approach of the proposed amendments will encourage FHLBanks and their members to build on the strengths of the AMA program to assist targeted borrower groups in a safe and sustainable manner." A Federal Home Loan bank is subject to the housing goals if its AMA purchases exceed a volume threshold of $2.5 billion, which is consistent with market levels. The public is invited to submit comments on the proposal within 90 days after it is published in the Federal Register. The FHFA is also holding a webinar Nov. 8 to further explain the proposal and answer questions.
Mortgage market is ripe for fraud (again) -- Today, increased pricing combined with rising interest rates is ushering in a climate in which demand for refinances and purchases is limited. As we know from the last crisis, when the mortgage industry gets squeezed, we see a spike in “creative” financing. These unusual instruments helped turn the American dream of homeownership into a terrifying financial situation and played a key role in bursting one of the largest bubbles in recent economic history.Opportunistic lending houses and financial institutions wagered that American consumers would do anything and everything possible to make mortgage payments, and therefore “eased” their underwriting guidelines to grant borrowers nearly any sum toward a real estate purchase, provided that property could pass appraisals. Borrowers with little or no experience in the real-estate market were lured in by the promise of low payments and low interest rates on properties they once thought were completely out of reach. In some of the worst cases of fraud, forged documents, fraudulently reported (inflated) income and even stand-in “straw” buyers worked hand-in-hand with mortgage originators and even lenders themselves to process what were essentially fictional borrowers with minimal oversight or due diligence. With more “money” to spend, property prices in major markets skyrocketed due to a competitive sellers’ market and ever-increasing bids for properties that could not sustain such prices. This created a tremendous secondary market for existing homeowners who were tempted by the opportunity to take out thousands and thousands of dollars in property equity for any number of purposes ranging from debt payoff, to property improvements, to vacations and more. Unfortunately for lenders and borrowers alike, the continuous cycle of irresponsible lending never had any chance of being sustainable long term.
“Fatally Flawed” Paper on HAMP Mortgage Program Gets Program Design Backwards, Botches Regression Analysis, Yielding Propagandistic Findings - naked capitalism - Yves here. The pipe-bombing attempts of foreclosure victim Cesar Sayoc is a reminder that the damage done by the mortgage crisis lives on in many ways. Carolyn Sissoko does an in depth takedown of a new paper on the HAMP mortgage program, which was a major tool that Treasury Secretary Timothy Geithner used to “foam the runway” for banks servicers. To put it more bluntly, its objective was spread out foreclosures over time by (merely) delaying the onset of some. As many parties, including your humble blogger, argued at the time, even when borrowers did get modifications, they were typically only payment reductions and not even forgiveness of some of the interest. The term of the mortgage and the principal were often both increased, meaning the borrower was merely allowed to defer some of his outlay. By contrast, we argued that meaningful reductions in principal were economically sound, particularly since, due to the high level of foreclosures, losses were much higher than historical norms. Lenders used to recover ~70% in a foreclosure. In the post crisis era, 30% to 40% was more common, giving vastly more room for principal writedowns that would help investors, borrowers, and communities.The wee problem with this line of thinking was that mortgage servicers were paid to foreclose, not to modify loans, and modifying loans well is a lot of work. Second, in a mortgage securitization, the owners of the most junior bond tranche that was still paying out would lose out in a modification (they’d be getting interest only payments, which would disappear in a principal mod due to the interest obligation being reduced along with the principal) and they’d fight modifications.1 Today, we will post Sissoko’s overview and first post, and will publish her second installment Thursday and her final piece Friday. Originally published at Synthetic Assets
What’s the Problem with Financialization? - Carolyn Sissoko, Originally published at Synthetic Assets. In post 1 I explained how the framing of their paper focuses entirely on the short-run, as if the long run doesn’t matter – and even uses language that indicates that people who take their long-run financial condition into account are behaving improperly. I call this exclusive focus on the short-run the ideology of financialization. I note at the end of post 1 that this ideology appears to have influenced both Geithner’s views and the structure of HAMP.So this raises the question: What’s the problem with the ideology of financialization? The short answer is that it appears to be designed to trap as many people into a state of debt peonage as possible. Debt peonage, by preventing people who are trapped in debt from realizing their full potential, is harmful to economic performance more generally. Here’s the long answer. By focusing attention on short-term payments and how sustainable they are today, while at the same time heaping heavy debt obligations into the future, modern finance has had devastating effects at both the individual and the aggregate levels. Heavy long-term debt burdens are guaranteed to be a problem for a subset of individual borrowers, such as those who are unexpectedly disabled or who see their income decline over time for other reasons. Mortgages with payments that balloon at some date in the future (such as those studied in Ganong and Noel’s paper) are by definition a gamble on future financial circumstances. This makes them entirely appropriate products for the small subset of borrowers who have the financial resources to deal with the worst case scenario, but the financial equivalent of Russian roulette for the majority of borrowers who don’t have financial backup in the worst case scenario. (Remember the probabilities are in your favor in Russian roulette, too.)
Mischaracterizing HAMP and Principal Reduction: A Regression Discontinuity Test Error - Carolyn Sissoko, Originally published at Synthetic Assets - Please find the Sissoko’s first post on HAMP, principal reduction and financialization here and her second post here. For the introductory post see here. The series is motivated by Peter Ganong and Pascal Noel’s argument that mortgage modifications that include principal reduction have no significant effect on either default or consumption for underwater borrowers. In post 1 I explained how the framing of their paper focuses entirely on the short-run, as if the long run doesn’t matter – and characterize this as the ideology of financialization. In post 2 I explain why financialization is a problem.In this post I am going to discuss a very technical problem with Ganong and Noel’s regression discontinuity test of the effect of principal reduction on default. The idea behind a regression discontinuity test is to use the fact that there is a variable that is used to classify people into two categories and then exploit the fact that near the boundary where the classification takes place there’s no significant difference between the characteristics of the people divided into the two groups. The test looks specifically at those who lie near the classification boundary and then compare how the groups in the two classifications differ. In this situation, the differences can be interpreted as having been caused by the classification.
Michael Olenick: The Real Story of “MAGA Bomber” Cesar Sayoc’s Foreclosure -- MAGA bomber and Trump fanatic Cesar Sayoc lost his home to foreclosure where it was purchased, at auction, then flipped by a company controlled by condo and casino developer Bruce M. Goldstein. Sayoc is the man who allegedly mailed 14 bombs to anti-Trump people and news organizations.. Federal law enforcement says that although none of the bombs exploded, and the one’s we’ve seen look like they were ordered by Wile E. Coyote, they were real bombs. Sayoc is one strange dude, a 56 year-old testosterone pumped male stripper who lived in his MAGA sticker-covered van after his mom threw him out. Among other jobs, he delivered pizzas and told his lesbian manager, Debra Gureghian, she should be shipped to an island and nuked along with all gay people. Whereas death-threats usually get people fired, or at least written up, she shrugged it off, this being Florida. Getting to the foreclosed house, Sayoc purchased it on June 6, 2006, from an individual with the initials JRS for $400,000. JRS had purchased the house in November, 1992 for $107,000 and refinanced it a few times, the last being Dec 14, 2000 with an $85,000 mortgage. After selling the house to Sayoc, JRS walked from the table with over $300,000 cash, retiring in a small community in north-central Florida. To complete the purchase, Sayoc took out a $360,000 mortgage from Countrywide with an interest rate of 9.88% fixed for two years. Ten percent down, plus closing costs, is ten percent more than most people brought to the table back then and the interest rate, given the down payment, seems exorbitant. Sayoc refinanced the house with Indymac for $385,000 on June 1, 2007 at 7.875% fixed for five years. The $15,000 difference is indicative of financed closing costs, not the more typical cash out mortgages popular during that era. In other words, Sayoc bought a house not as an investment but to live in, refinancing it not to cash out but only to lower his interest rate. The MAGA bomber is naïve, irresponsible, but about the only person whose behavior in this odd story bears some semblance of good faith.As the Florida economy started to tank in 2008, and Sayoc aged up, it’s likely his income as a stripper began to slip. He predictably couldn’t afford his $2,791.52 P&I payment, plus homeowners insurance, private mortgage insurance, and real-estate taxes. I can’t vouch for Sayoc’s skills as a stripper but in most other areas of life he seems to be a bumbling idiot, an easy target for Countrywide, Indymac, Stern, Goldstein, and Obama with his ignored promises for hope and change. Then, finally, like so many others who’d been abandoned and forgotten, Donald J. Trump.
FHLB housing goals would change under new proposal — The Federal Housing Finance Agency has released a proposal to change the way the Federal Home Loan Banks set housing goals. The proposed rule would establish a new benchmark for small Federal Home Loan Bank System members to pursue housing goals, set a new housing goal for members that is calculated as a share of total asset purchases and eliminate a volume threshold for meeting the goals in favor of different categories of mortgage purchases. Home Loan banks purchase mortgages through the system's "acquired member asset" purchases (AMA) program, which is voluntary. “To be successful, housing goals should lead the FHLBanks to make affordable housing part of their business plans for AMA," FHFA Director Mel Watt said in a statement. “The overall approach of the proposed amendments will encourage FHLBanks and their members to build on the strengths of the AMA program to assist targeted borrower groups in a safe and sustainable manner." A Federal Home Loan bank is subject to the housing goals if its AMA purchases exceed a volume threshold of $2.5 billion, which is consistent with market levels. The public is invited to submit comments on the proposal within 90 days after it is published in the Federal Register. The FHFA is also holding a webinar Nov. 8 to further explain the proposal and answer questions.
What’s keeping the Senate from confirming Ginnie Mae chief? — Policymakers will have to make difficult decisions in the coming years on the future of housing finance, yet Congress hasn't even finalized the appointment of a new agency head who appears to have ample support. Michael Bright's nomination to become president of Ginnie Mae has been pending since May and the agency that provides funding for government-insured mortgages has been without a permanent chief for almost two years. But even though Ginnie Mae has increasingly been at the forefront of policy deliberations over reforming the government-sponsored enterprises, observers say Bright's nomination is being held up with other appointments as Congress prioritizes other issues and the focus shifts to the midterm elections. Acting Ginnie Mae CEO Michael Bright Michael Bright appeared to face reluctance from Democrats at his nomination hearing in July over a paper he had co-written at the Milken Institute envisioning an expanded role for Ginnie Mae in a GSE reform plan. Bloomberg News “The bottom line is simply that the Senate’s failure to confirm Michael Bright as president is not indicative of anything other than prioritization in the Senate,” said Thomas Wade, the director of financial services policy at the American Action Forum. Bright, now the acting head of Ginnie Mae, appeared to face reluctance from Democrats at his nomination hearing in July over a paper he had co-written at the Milken Institute envisioning an expanded role for Ginnie Mae in a GSE reform plan. But he is seen as a middle-of-the-road choice in a highly partisan Congress. When the Senate Banking Committee advanced his nomination in August, two Democrats, Mark Warner of Virginia and Jon Tester of Montana, both praised him. “The administration is lucky to have him,” Warner said at the committee markup. But it is unclear when the full Senate will vote on his confirmation. He has joined other pending nominees waiting for Senate action, including Kathy Kraninger to run the Consumer Financial Protection Bureau and Nellie Liang to fill a seat on the Federal Reserve Board. Another Fed board nominee, Michelle Bowman, is scheduled for a Senate floor vote for after the midterm elections. The full Senate’s attention has been focused elsewhere, relegating the confirmation of Bright and others to the back burner.
Q3 2018 GDP Details on Residential and Commercial Real Estate -The BEA has released the underlying details for the Q3 advance GDP report.The BEA reported that investment in non-residential structures decreased at a 7.9% annual pace in Q3. Investment in petroleum and natural gas exploration decreased slightly in Q3 compared to Q2, but has increased substantially recently. Without the increase in petroleum and natural gas exploration, non-residential investment would only be up about 4% year-over-year. The first graph shows investment in offices, malls and lodging as a percent of GDP. Investment in offices increased in Q3, and is up 10% year-over-year. Investment in multimerchandise shopping structures (malls) peaked in 2007 and was down about 7% year-over-year in Q3. The vacancy rate for malls is still very high, so investment will probably stay low for some time. Lodging investment increased in Q3, and lodging investment is up 7% year-over-year. The second graph is for Residential investment components as a percent of GDP. According to the Bureau of Economic Analysis, RI includes new single family structures, multifamily structures, home improvement, Brokers’ commissions and other ownership transfer costs, and a few minor categories (dormitories, manufactured homes). Home improvement was the top category for five consecutive years following the housing bust ... but now investment in single family structures has been back on top for the last six years and will probably stay there for a long time - although single family investment has been down a little recently. However - even though investment in single family structures has increased from the bottom - single family investment is still very low, and still below the bottom for previous recessions as a percent of GDP. I expect some further increase. Investment in single family structures was $286 billion (SAAR) (about 1.4% of GDP), and was down slightly in Q3 compared to Q2. Investment in multi-family structures decreased in Q3. Investment in home improvement was at a $264 billion Seasonally Adjusted Annual Rate (SAAR) in Q3 (about 1.3% of GDP). Home improvement spending has been solid.
Elizabeth Warren’s New Housing Proposal Is Actually a Brilliant Plan to Close the Racial Wealth Gap Last month, Sen. Elizabeth Warren released a $450 billion housing plan called the American Housing and Economic Mobility Act. The proposal is a comprehensive and bold step toward providing affordable housing for the most vulnerable Americans. The bill is the first since the Fair Housing Act with the explicit intent of redressing the iterative effects of our nation’s sordid history of housing discrimination. Critically, it has the potential to make a substantive dent in closing our enormous and persistent racial wealth gap. Government discrimination played a big role in creating that gap. President Franklin D. Roosevelt’s New Deal built an American middle class, but many programs were discriminatory in practice, bifurcating the nation into wealth-building white communities and segregated black communities. Warren’s bill is a monumental step forward that acknowledges injustice of the past and invests real money to redress it. Her bill would seek to address the racial wealth gap by establishing a down payment assistance program designed to support families who were historically excluded from government programs. The bill directs HUD to provide a grant that would be equivalent to an FHA loan down payment to all low- and middle-income first-time homebuyers who live in formerly redlined communities that are still low income. While many first-time homebuyers have help from family in putting together a down payment, government discrimination robbed most families in redlined neighborhoods of that opportunity. And so this provision has the potential to facilitate homeownership for hundreds of thousands of black families. .
Fannie Mae: Mortgage Serious Delinquency rate Unchanged in September - Fannie Mae reported that the Single-Family Serious Delinquency rate was unchanged at 0.82% in September, from 0.82% in August. The serious delinquency rate is down from 1.01% in September 2017. These are mortgage loans that are "three monthly payments or more past due or in foreclosure". The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.This ties last month as the lowest serious delinquency for Fannie Mae since September 2007.
MBA: Mortgage Applications Decreased in Latest Weekly Survey -- From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey: Mortgage applications decreased 2.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 26, 2018... The Refinance Index decreased 4 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 0.4 percent lower than the same week one year ago. ...The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) remained unchanged at 5.11 percent, with points decreasing to 0.50 from 0.52 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
Mortgage applications drop as year-over-year purchase volume falls - Mortgage applications decreased 2.5% from one week earlier as purchase activity compared with 2017 fell for the first time in nearly three months, according to the Mortgage Bankers Association. The MBA's Weekly Mortgage Applications Survey for the week ending Oct. 26 found that the seasonally adjusted purchase index decreased 2% from the previous week. On an unadjusted basis the purchase index decreased 2% compared with the previous week and was 0.4% lower than at this time last year. "The 30-year fixed-rate mortgage held steady over the week, but total applications decreased overall. Purchase applications inched backward from the previous week, as well as compared to one year ago — the first year-over-year decline in purchase activity since August," Joel Kan, the MBA's associate vice president of industry surveys and forecasts, said in a press release."Purchase applications may have been adversely impacted by the recent uptick in rates and the significant stock market volatility we have seen the past couple of weeks," he said.The refinance index decreased 4% compared with the previous week and the refinance share of mortgage activity decreased to 39.4% of total applications from 39.8% the previous week."Additionally, the ARM share of applications increased to its highest level since 2017, but since this is a compositional measure, it was driven by a greater decrease in applications for fixed-term loans relative to the decrease in ARM applications," Kan said. Adjustable-rate loan activity increased to 7.6% from 7% of total applications, while the share of Federal Housing Administration-guaranteed loans increased to 10.3% from 10.1% the week prior.
Case-Shiller: National House Price Index increased 5.8% year-over-year in August --S&P/Case-Shiller released the monthly Home Price Indices for August ("August" is a 3 month average of June, July and August prices).This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.Note: Case-Shiller reports Not Seasonally Adjusted (NSA), I use the SA data for the graphs. From S&P: Annual Gains Fall Below 6% for the First Time in 12 Months According to the S&P CoreLogic Case-Shiller Index The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.8% annual gain in August, down from 6.0% in the previous month. The 10-City Composite annual increase came in at 5.1%, down from 5.5% in the previous month. The 20-City Composite posted a 5.5% year-over-year gain, down from 5.9% in the previous month. Las Vegas, San Francisco and Seattle reported the highest year-over-year gains among the 20 cities. In August, Las Vegas led the way with a 13.9% year-over-year price increase, followed by San Francisco with a 10.6% increase and Seattle with a 9.6% increase. Four of the 20 cities reported greater price increases in the year ending August 2018 versus the year ending July 2018. ...Before seasonal adjustment, the National Index posted a month-over-month gain of 0.2% in August. The 10-City and 20-City Composites did not report any gains for the month. After seasonal adjustment, the National Index recorded a 0.6% month-over-month increase in August. The 10-City Composite and the 20-City Composite both posted 0.1% month-over-month increases. In August, 12 of 20 cities reported increases before seasonal adjustment, while 17 of 20 cities reported increases after seasonal adjustment. “Following reports that home sales are flat to down, price gains are beginning to moderate,” “There are no signs that the current weakness will become a repeat of the crisis, however. In 2006, when home prices peaked and then tumbled, mortgage default rates bottomed out and started a three year surge. Today, the mortgage default rates reported by the S&P/Experian Consumer Credit Default Indices are stable. Without a collapse in housing finance like the one seen 12 years ago, a crash in home prices is unlikely.” The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).The Composite 10 index is off 0.8% from the bubble peak, and up 0.1% in August (SA).The Composite 20 index is 2.4% above the bubble peak, and up 0.1% (SA) in August.The National index is 10.4% above the bubble peak (SA), and up 0.6% (SA) in August. The National index is up 49.3% from the post-bubble low set in December 2011 (SA) The second graph shows the Year over year change in all three indices. The Composite 10 SA is up 5.1% compared to August 2017. The Composite 20 SA is up 5.5% year-over-year.The National index SA is up 5.8% year-over-year.Note: According to the data, prices increased in 17 of 20 cities month-over-month seasonally adjusted.
Annual Home Price Gains Fall Below 6% in August - With today's release of the August S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.10% month over month. The seasonally adjusted national index year-over-year change has hovered between 4.2% and 6.7% for the last two-plus years. Today's S&P/Case-Shiller National Home Price Index (nominal) reached another new high. The adjacent column chart illustrates the month-over-month change in the seasonally adjusted 20-city index, which tends to be the most closely watched of the Case-Shiller series. It was up 0.10% from the previous month. The nonseasonally adjusted index was up 5.5% year-over-year. Investing.com had forecast a 0.1% MoM seasonally adjusted increase and 6.0% YoY nonseasonally adjusted for the 20-city series.Here is an excerpt from the analysis in today's Standard & Poor's press release.“Following reports that home sales are flat to down, price gains are beginning to moderate,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Comparing prices to their levels a year earlier, 14 of the 20 cities, the National Index plus the 10-city and 20-city Composite Indices all show slower price growth. The seasonally adjusted monthly data show that 10 cities experienced declining prices. Other housing data tell a similar story: prices and sales of new single family homes are weakening, housing starts are mixed and residential fixed investment is down in the last three quarters. Rising prices may be pricing some potential home buyers out of the market, especially when combined with mortgage rates approaching 5% for 30-year fixed rate loans.“There are no signs that the current weakness will become a repeat of the crisis, however. In 2006, when home prices peaked and then tumbled, mortgage default rates bottomed out and started a three year surge. Today, the mortgage default rates reported by the S&P/Experian Consumer Credit Default Indices are stable. Without a collapse in housing finance like the one seen 12 years ago, a crash in home prices is unlikely.” [Link to source]The chart below is an overlay of the Case-Shiller 10- and 20-City Composite Indexes along with the national index since 1987, the first year that the 10-City Composite was tracked. Note that the 20-City, which is probably the most closely watched of the three, dates from 2000. We've used the seasonally adjusted data for this illustration.
Zillow Case-Shiller Forecast: Slower House Price Gains in September --The Case-Shiller house price indexes for August were released yesterday. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close. From Skylar Olsen at Zillow: August Case-Shiller Results and September Forecast: A Slowdown in Home PricesThe Case-Shiller home price index climbed 5.8 percent in August from a year earlier, marking the first time in 12 months that home price gains have dropped below 6 percent.It’s more welcome news for would-be home buyers, who must be breathing a collective sigh of relief that home price growth finally has slowed. Softening appreciation after the rapid growth of just a few months earlier is a sign that fierce competition is dying down. Potential buyers who were intimidated during the heat of the market may find the breathing space now to make a calm, considered decision about whether to lock in a mortgage before rates rise further. Zillow forecasts an even slower 5.5 percent annual gain for September. The Zillow forecast is for the year-over-year change for the Case-Shiller National index to be smaller in September than in August as house price growth slows.
Home prices in 20 U.S. cities rise at slowest pace since 2016 -- Home-price gains in 20 U.S. cities cooled in August to the slowest pace since 2016, as high borrowing costs and property values limit buyer interest, according to S&P CoreLogic Case-Shiller data released Tuesday. The 20-city property values index increased 5.5% year-over-year (the estimate was 5.8%) after 5.9% the prior month, the smallest gain since December 2016. The national home-price gauge rose 5.8% year-over-year, the slowest since mid-2017. The seasonally adjusted 20-city index rose 0.1% month-over-month (matching the estimate). August marks the fifth consecutive month that annual price gains in the 20-city index decelerated, reinforcing signs that the housing market is cooling. Other recent reports showed purchases of previously owned U.S. homes fell in September to the weakest pace in three years, while new-home sales tumbled to the lowest since December 2016. Housing starts also declined in September amid disruptions from Hurricane Florence. The report showed three cities recorded monthly price declines in August, led by a 1% drop in Seattle, which had been one of the nation's hottest housing markets. Las Vegas had the fastest increase, at 1.1%. Continued job gains and elevated consumer sentiment have helped boost demand for housing, but shortages in available and affordable listings persist. Meanwhile, mortgage rates near a seven-year high have limited buyer interest. "Following reports that home sales are flat to down, price gains are beginning to moderate," David Blitzer, chairman of the S&P index committee, said in a statement. "There are no signs that the current weakness will become a repeat of the crisis, however." Las Vegas had the biggest annual increase at 13.9%, followed by San Francisco at 10.6% and Seattle at 9.6%. New York and Washington had smallest gains, each at 2.8%.
Californians are home shopping in Texas by the thousands - Thousands of homeowners in San Francisco, Los Angeles and Chicago are headed out of town. And many of them are on the way to Atlanta, Phoenix and Dallas. Home sales firm Redfin looked at migration by homeowners away from high-cost metro areas to more affordable markets. And the Dallas area was on the top 10 list of U.S. cities where residents are moving to find more affordable housing and living costs, researchers with the residential brokerage firm found. The biggest share of newcomers to Dallas were from Los Angeles. Redfin said that almost a quarter of its home searches in the Dallas area were by people relocating to the area. Austin and Houston are also getting a lot of home purchases by out-of-state movers. A quarter of Redfin's customers in the third quarter were moving to different metro areas. "Rising mortgage rates are exacerbating affordability issues that have been driving people out of expensive coastal metros for the past few years," Redfin Chief Economist Daryl Fairweather said in the report. "With [interest] rates no longer near historic lows, buyers are increasingly cost-conscious, seeking more affordable homes in low-tax states in the South and middle of the country." Sacramento, Calif., Portland, Ore., Miami and Nashville also made the list of top markets for relocations, Redfin found. The cities seeing the most moveouts include New York, Washington, D.C., and Denver. In those markets, more people were looking to leave compared with the number of people looking to move in. "The metro areas seeing the biggest inflows of new residents are the big cities where home prices are still relatively affordable and job markets are strong," Redfin researcher said. With the median home price still slightly below the national average, Dallas-Fort Worth remains one of the most affordable big-city housing markets. And, despite home prices going up by more than 40% over the last five years, DFW home costs are still well below what buyers pay in most coastal markets.
The Housing Affordability Crisis -- This morning both the Case-Shiller House Price Indexes for September, and Third Quarter Median Asking Rent were reported, as was the rental vacancy rate. Together they reveal that all types of shelter costs, whether housing or apartments, are at or near record levels. The Case Shiller 20 City index was reported up 5.5% YoY, and the National Index was up 5.8% YoY. Meanwhile median household income, as reported by Sentier Research one month ago, was only up 2.8% YoY. So while the media is generally reported the "good news" that house prices are appreciating less than the 6%+ rate they had been recently, "real" homeownership costs continue to be near a record multiple of household income, as shown in this graph from Political Calculations: Meanwhile median asking rent increased about 5% just in the last Quarter, and is up over 10% from one year ago: Because, *relatively speaking,* renting is still less expensive than purchasing a house, the rental vacancy rate continues near record lows: A few years ago, HUD put out a report speaking of a "rental affordability crisis." I think we are past that now. All forms of housing costs, whether ownership or renting, are at crisis levels
The "Rental Affordability Crisis" Explained In Three Charts - Four years ago, the United States Department of Housing and Urban Development (HUD) warned of "the worst rental affordability crisis ever," citing data that: "About half of renters spend more than 30% of their income on rent, up from 18% a decade ago, according to newly released research by Harvard's Joint Center for Housing Studies. Twenty-seven percent of renters are paying more than half of their income on rent."This is a significant problem for US consumers, and especially millennials, because as we have noted repeatedly over the past year, and a new report confirms, "rent increases continue to outpace workers' wage growth, meaning the situation is getting worse."In the second quarter of 2017, median asking rents jumped 5% from $864 to $910. In the first half of 2018, they have remained at levels crushing the American worker. While the surge in median asking rents has triggered an affordability crisis, new data now shows just how much a person must make per month to afford rent. According to HowMuch.Net, an American should budget 25% to 30% of monthly income for rent, but as shown by the New Deal Democrat, workers are budgeting about 50% more of their salaries than a decade earlier. The report specifically looked at the nation’s capital, where a person must make approximately $8,500 per month to afford rent. In California, the state with the largest housing bubble, the monthly income to afford rent is roughly $8,300, followed by Hawaii at $7,800 and New York at $7,220. In contrast, the Rust Belt and the Southeastern region of the United States, one needs to make only $3,500 per month to afford rent. “Based on the rule of applying no more than one-third of income to housing, people living in the Northeast must earn at least twice as much as those living in the South just to afford rent for what each market considers an average home,” HowMuch.net’s Raul Amoros told MarketWatch. Which, however, is not to say that owning a house is a viable alternative to renting. In fact, as Goldman notes in its latest Housing and Mortgage Monitor, "buying is looking increasingly less affordable vs. renting with home prices growing faster than rents."
Home Ownership Rate: Up 0.8% YoY in Q3 - Over the last decade, the general trend has been consistent: The rate of home ownership continues to struggle. The Census Bureau has now released its latest quarterly report with data through Q3 2018. The seasonally adjusted rate for Q3 is 64.4 percent, unchanged from Q2. The nonseasonally adjusted Q3 number is 64.4 percent, up fractionally from the Q2 64.3 percent figure.The Census Bureau has been tracking the nonseasonally adjusted data since 1965. Their seasonally adjusted version only goes back to 1980. Here is a snapshot of the nonseasonally adjusted series with a 4-quarter moving average to highlight the trend. The consensus view is that trend away from homeownership is a result of rising residential real estate prices in general and limited supply of entry-level priced homes that would attract first-time buyers. Here is the YoY version of the chart going back to 1965.
HVS: Q3 2018 Homeownership and Vacancy Rates -- The Census Bureau released the Residential Vacancies and Homeownership report for Q3 2018. This report is frequently mentioned by analysts and the media to track household formation, the homeownership rate, and the homeowner and rental vacancy rates. However, there are serious questions about the accuracy of this survey. . The Census Bureau is investigating the differences between the HVS, ACS and decennial Census, and analysts probably shouldn't use the HVS to estimate the excess vacant supply or household formation, or rely on the homeownership rate, except as a guide to the trend. The Red dots are the decennial Census homeownership rates for April 1st 1990, 2000 and 2010. The HVS homeownership rate increased to 64.4% in Q3, from 64.3% in Q2.I'd put more weight on the decennial Census numbers - given changing demographics, the homeownership rate has bottomedThe HVS homeowner vacancy increased to 1.6% in Q3.The rental vacancy rate increased to 7.1% in Q3.The quarterly HVS is the most timely survey on households, but there are many questions about the accuracy of this survey. Overall this suggests that vacancies have declined significantly, and my guess is the homeownership rate has bottomed - and that the rental vacancy rate has bottomed for this cycle.
Construction Spending increased slightly in September -- From the Census Bureau reported that overall construction spending increased slightly in September: Construction spending during September 2018 was estimated at a seasonally adjusted annual rate of $1,329.5 billion, nearly the same as the revised August estimate of $1,328.8 billion. The September figure is 7.2 percent above the September 2017 estimate of $1,240.4 billion. Private spending increased and public spending decreased: Spending on private construction was at a seasonally adjusted annual rate of $1,020.4 billion,0.3 percent above the revised August estimate of $1,016.9 billion. ... In September, the estimated seasonally adjusted annual rate of public construction spendingwas $309.1 billion, 0.9 percent below the revised August estimate of $312.0 billion. This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.Private residential spending had been increasing - although has declined slightly recently - and is still 18% below the bubble peak.Non-residential spending is 12% above the previous peak in January 2008 (nominal dollars). Public construction spending is now 5% below the peak in March 2009, and 18% above the austerity low in February 2014. The second graph shows the year-over-year change in construction spending.On a year-over-year basis, private residential construction spending is up 5%. Non-residential spending is up 7% year-over-year. Public spending is up 11% year-over-year. This was below consensus expectations, however spending for July and August were revised up.
Hotels: Occupancy Rate Increased Slightly Year-over-year --From HotelNewsNow.com: US hotel results for week ending 20 October The U.S. hotel industry reported positive year-over-year results in the three key performance metrics during the week of 14-20 October 2018, according to data from STR.In comparison with the week of 15-21 October 2017, the industry recorded the following:
• Occupancy: +0.4% to 73.2%
• Average daily rate (ADR): +3.2% to US$135.67
• Revenue per available room (RevPAR): +3.6% to US$99.32
…Houston, Texas, registered the steepest declines in each of the three key performance metrics: occupancy (-23.8% to 66.0%), ADR (-8.8% to US$107.41) and RevPAR 30.6% to US$70.85). Houston’s hotel performance was lifted in the weeks and months that followed Hurricane Harvey in 2017 as properties filled with displaced residents, relief workers, insurance adjustors, media members, etc.The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.
Consumer Confidence Up Again in October -- The latest Conference Board Consumer Confidence Index was released this morning based on data collected through October 18. The headline number of 137.9 was an increase from the final reading of 135.3 for September, a downward revision from 138.4. Today's number was above the Investing.com consensus of 136.0. “Consumer Confidence increased in October, following a modest gain in September, and remains at levels last seen in the fall of 2000 (September 2000, 142.5),” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of present-day conditions remains quite positive, primarily due to strong employment growth. The Expectations Index posted another gain in October, suggesting that consumers do not foresee the economy losing steam anytime soon. Rather, they expect the strong pace of growth to carry over into early 2019.”The chart below is another attempt to evaluate the historical context for this index as a coincident indicator of the economy. Toward this end, we have highlighted recessions and included GDP. The regression through the index data shows the long-term trend and highlights the extreme volatility of this indicator. Statisticians may assign little significance to a regression through this sort of data. But the slope resembles the regression trend for real GDP shown below, and it is a more revealing gauge of relative confidence than the 1985 level of 100 that the Conference Board cites as a point of reference.
Personal Income increased 0.2% in September, Spending increased 0.4% -- The BEA released the Personal Income and Outlays report for September: Personal income increased $35.7 billion (0.2 percent) in September according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $29.1 billion (0.2 percent) and personal consumption expenditures (PCE) increased $53.0 billion (0.4 percent).Real DPI increased 0.1 percent in September and Real PCE increased 0.3 percent. The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent. The September PCE price index increased 2.0 percent year-over-year and the September PCE price index, excluding food and energy, also increased 2.0 percent year-over-year. The following graph shows real Personal Consumption Expenditures (PCE) through September 2018 (2012 dollars).The dashed red lines are the quarterly levels for real PCE. The increase in personal income was below expectations, and the increase in PCE was at expectations. PCE growth was strong in Q3, and inflation is close to the Fed's target.
Personal Income, Spending Growth Tumbles In September As Savings Rate Slumps - Following August's spending and income growth slowdown, September saw MoM growth in spending and income slow with income missing expectations notably.
- Personal Income rose just 0.2% MoM (versus 0.4% revised higher for August and expectations of a 0.4% rise)
- Personal Spending rose 0.4% MoM (versus 0.5% revised higher for August and expectations of a 0.4% rise).
So both shopwed slowing growth MoM... Year over year spending growth is at its slowest since May, and income growth at its slowest since March... Government workers wages grew slightly faster YoY (+2.4%) as Private worker wage growth slipped lower to +5.0% YoY... This sent the savings rate down to its lowest since Dec 2017... A slumping savings rate and slumping spending smells like the consumer is at their limit.
Year-over-year Change in Real Personal Consumption Expenditures (PCE) -Earlier I posted a graph showing real monthly personal consumption expenditures (PCE) based on the monthly BEA report.Here is a graph showing the year-over-year change in real PCE since 2003.In September, the YoY change was 3.0%, about the same level as for the last few years. There was a significant decline in real PCE during the great recession, and real PCE was fairly weak during the first few years of the recovery - partially due to the ongoing weakness in housing following the housing bubble and bust. More recently real PCE has been increasing at a fairly steady rate around 3.0% per year.
Wages and salaries jump by 3.1%, highest level in a decade - Employment costs rose more than expected in the third quarter in a sign that more inflation could be brewing in the U.S. economy.The Labor Department's employment cost index rose 0.8 percent for the period, ahead of the estimate of 0.7 percent from economists surveyed by Refinitiv.Wages and salaries rose 0.9 percent, well ahead of expectations for 0.5 percent. Benefit costs were up 0.4 percent.On a yearly basis, wages and salaries jumped 3.1 percent, the biggest increase in 10 years.Wage increases have been the missing link in the economy since the recovery began in mid-2008. Average hourly earnings have been rising steadily but have stayed below the 3 percent level as slack has remained in the labor market.However the unemployment rate is now at 3.7 percent, the lowest since 1969, and wage pressures have begun to build. The Federal Reserve has been raising interest rates in an effort to stave off future inflationary pressures, though the central bank's preferred gauge of inflation rose just 2.5 percent in the third quarter, including a 1.9 percent increase for health benefits.The wage data came the same day that ADP and Moody's reported private payroll growth of 227,000 in October, easily beating Wall Street expectations. The combination of news sent Treasury yields higher in morning trading.Overall compensation costs for civilian workers rose 2.8 percent, tamped down in part by the small rise in benefit costs, which rose 1.9 percent for the 12-month period ending in September. Employers have been looking for non-salary measures to retain workers, but may have to start increasing wages to attract and retain talent. In addition to the tighter job market, various states, communities and private companies have passed minimum wage increases, adding to inflation pressures. At an occupational level, compensation costs increased 4.8 percent for information technology and 3.5 percent for sales and office and service occupations.
Many Americans Say They Haven’t Benefited From Trump’s Economy. A majority of Americans reports that their financial situation has not improved since the 2016 presidential election, despite low unemployment and a booming stock market. More than six in 10 Americans said that they’re no better-off financially than they were two years ago, according to a Bankrate.com report released Wednesday. Low earners, women and those of retirement age were most likely to report that they are no wealthier than before. The Bankrate.com poll was conducted on Sept. 25-30 by research firm SSRS, using a national sample of 1,001 people. The study echoes the findings of a recent survey by investment advising company Stash, which found that 44 percent of Americans reported their financial situation had not improved, and an additional 20 percent said their financial prospects had worsened. “We know there’s a disconnect between the broad economic metrics we’ve seen day-to-day and the lived personal experience,” said Bankrate’s senior economic analyst Mark Hamrick. “There’s still more work to be done to improve Americans’ financial condition.” A whopping 78 percent of Americans earning less than $30,000 a year report that their financial situation has not improved over the last two years, while 27 percent said their financial situation has actually worsened. Americans of retirement age reported the lowest rate of financial improvement of any generation surveyed. Seventy-six percent of Americans 65 and older feel their financial situation has not improved over the past two years, while 18 percent said it has gotten worse. Women were also less likely than men to report financial gains. Sixty-seven percent of women said they haven’t benefited from Trump’s economy, compared to 56 percent of men. Meanwhile, 19 percent of women have seen their financial situation worsen, in contrast with 15 percent of men.
Why American Consumers Are About To Be Blindsided By An Inflationary Shockwave - While unsuspecting U.S. consumers continue to expect low, sub-2% inflation according to the latest YTD low breakeven rate, little do they know they are about to be blindsided by a coming inflationary shock, according to a new WSJ reportwhich notes that many U.S. consumer staple and industry-leading companies are either already in the process of raising prices, or have set concrete plans to do so in the very near future. Once these price increases are passed through to consumers, it will likely mark the end to a long period of "low inflation" that the Fed has constantly leaned on as an excuse to keep rates low for nearly a decade.Take Clorox for example, which is raising prices on everyday products like cat litter. Coca-Cola also reported higher prices for the past quarter. Mondelez International also plans to raise prices in North America next year according to an interview with its CEO on Monday. The food giant said that it is passing along rising costs, including ingredient and transportation costs, to consumers.Airlines are also passing on costs as they are paying about 40% more for jet fuel than they were a year ago. Delta, jetBlue and American have all raised fees, fares, or both. Trucking costs were up 7% annually in September and private sector wages and salaries in the September quarter rose 3.1%.Arconic was able to widen its operating margins this past quarter on its aluminium products by using tariffs to justify price hikes. Manufacturers are paying about 8% more for aluminium and 38% more for steel than they were a year ago. Looming potential tariffs with China to the tune of $200 billion also continue to weigh on input costs. Even such supposedly immune to day-to-day price fluctuation companies as Apple ,recently raised prices on its new MacBook Air and iPad Pro products by between 20% and 25%.
October Vehicles Sales: 17.5 Million -- The BEA released their estimate of October vehicle sales. The BEA estimated sales of 17.51 million SAAR in October 2018 (Seasonally Adjusted Annual Rate), up 0.5% from the September sales rate, and down 2.0% from October 2017. Through October, light vehicle sales are on pace to be mostly unchanged in 2018 compared to 2017. This would make 2018 the fifth best year on record after 2016, 2015, 2000, and 2017. This graph shows annual light vehicle sales since 1976. Source: BEA. Sales for 2018 are estimated based on the pace of sales during the first ten months. The second graph shows light vehicle sales since the BEA started keeping data in 1967. My guess is vehicle sales will finish the year with sales lower than in 2017 (sales in late 2017 were boosted by buying following the hurricanes), and will probably be just over 17 million for the year (the lowest since 2014). A small decline in sales this year isn't a concern - I think sales will move mostly sideways at near record levels. As I noted last year, this means the economic boost from increasing auto sales is over (from the bottom in 2009, auto sales boosted growth every year through 2016).
September Trade Deficit at $54.02B -- The U.S. International Trade in Goods and Services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 1992. The monthly reports include revisions that go back several months. This report details U.S. exports and imports of goods and services. Here is an excerpt from the latest report: The U.S. monthly international trade deficit increased in September 2018 according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. The deficit increased from $53.3 billion in August (revised) to $54.0 billion in September, as imports increased more than exports. The previously published August deficit was $53.2 billion. The goods deficit increased $0.6 billion in September to $77.2 billion. The services surplus decreased $0.1 billion in September to $23.2 billion. Today's headline number of -54.02B was worse than the Investing.com forecast of -53.50B. This series tends to be extremely volatile, so we include a six-month moving average.
Trade Deficit increased to $54.0 Billion in September --Earlier from the Department of Commerce reported:The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $54.0 billion in September, up $0.7 billion from $53.3 billion in August, revised. September exports were $212.6 billion, $3.1 billion more than August exports. September imports were $266.6 billion, $3.8 billion more than August imports. Exports and imports increased in September. Exports are 29% above the pre-recession peak and up 7% compared to September 2017; imports are 15% above the pre-recession peak, and up 10% compared to September 2017. In general, trade has been picking up. The second graph shows the U.S. trade deficit, with and without petroleum. U.S. Trade Deficit The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products. Oil imports averaged $61.35 in September, down from $62.63 in August, and up from $45.13 in September 2017. The trade deficit with China increased to $40.2 billion in September, from $34.50 billion in September 2017.
U.S. Factory Orders Climb More Than Expected In September - - New orders for U.S. manufactured goods increased by more than expected in the month of September, according to a report released by the Commerce Department on Friday. The Commerce Department said factory orders climbed by 0.7 percent in September after spiking by an upwardly revised 2.6 percent in August. Economists had expected factory orders to rise by 0.5 percent compared to the 2.3 percent jump originally reported for the previous month. Durable goods orders increased by a downwardly revised 0.7 percent in September after soaring by 4.7 percent in August. Orders for transportation equipment led the way higher once again, surging up by 1.9 percent. The report said orders for non-durable goods also rose by 0.6 percent in September, matching the increase seen in the previous month. The Commerce Department also said shipments of manufactured goods increased by 0.9 percent in September after climbing by 0.7 percent in August. Inventories of manufactured goods also rose by 0.5 percent in September following a revised 0.1 percent uptick in the previous month. With shipments rising more than inventories, the inventories-to-shipments ratio dipped to 1.33 in September from 1.34 in August.
ISM Manufacturing index decreased to 57.7 in October - The ISM manufacturing index indicated expansion in October. The PMI was at 57.7% in October, down from 59.8% in September. The employment index was at 56.8%, down from 58.8% last month, and the new orders index was at 57.4%, down from 61.8%. From the Institute for Supply Management: October 2018 Manufacturing ISM® Report On Business®: “The October PMI® registered 57.7 percent, a decrease of 2.1 percentage points from the September reading of 59.8 percent. The New Orders Index registered 57.4 percent, a decrease of 4.4 percentage points from the September reading of 61.8 percent. The Production Index registered 59.9 percent, a 4 -percentage point decrease compared to the September reading of 63.9 percent.The Employment Index registered 56.8 percent, a decrease of 2 percentage points from the September reading of 58.8 percent. The Supplier Deliveries Index registered 63.8 percent, a 2.7-percentage point increase from the September reading of 61.1 percent. The Inventories Index registered 50.7 percent, a decrease of 2.6 percentage points from the September reading of 53.3 percent. The Prices Index registered 71.6 percent, a 4.7-percentage point increase from the September reading of 66.9 percent, indicating higher raw materials prices for the 32nd consecutive month.Here is a long term graph of the ISM manufacturing index. This was below expectations of 59.1%, and suggests manufacturing expanded at a slower pace in October than in September.
ISM new orders lowest reading since --- The ISM reported this morning that The October PMI® registered 57.7 percent, a decrease of 2.1 percentage points from the September reading of 59.8 percent. The New Orders Index registered 57.4 percent, a decrease of 4.4 percentage points from the September reading of 61.8 percent. On Tuesday I said that "the first thing I am looking for is decelerating growth which will show up in a reading below 15 in the average of Regional Fed reports, and below 60 in ISM new orders."The regional Fed average is still above 15, but this morning we got the reduction in the ISM. Here's what the baseline chart for the regional Fed averages (left) and ISM new orders (right) for 2018 now looks like: While 57.4 is a very positive reading on an absolute scale, nevertheless this was the lowest iSM new orders reading since November 2916, almost two years ago. I expect slowing to continue.
Markit Manufacturing PMI: Strong Improvement in October - The October US Manufacturing Purchasing Managers' Index conducted by Markit came in at 55.7, up 0.1 from the 55.6 final September figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.Here is an excerpt from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release:"The manufacturing sector saw a strong start to the closing quarter of 2018, with new order inflows rising sharply and business optimism spiking higher in an encouraging sign that firms expect the good times to continue into 2019." [Press Release] Here is a snapshot of the series since mid-2012.
Dallas Fed: "Texas Manufacturing Continues to Expand, but Pace Slows" From the Dallas Fed: Texas Manufacturing Continues to Expand, but Pace Slows Texas factory activity continued to expand in October, albeit at a slower pace, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, was positive but declined another six points to 17.6, indicating output growth continued to abate.Some other indexes of manufacturing activity also suggested slower expansion in October. The capacity utilization index retreated six points to 15.4, while the shipments index fell four points to 16.6. Meanwhile, the new orders index rose—pushing up four points to 18.9—and the growth rate of orders index held steady at 11.0.Perceptions of broader business conditions improved this month. The general business activity index inched up to 29.4, and the company outlook index climbed seven points to 25.0. Fewer than 3 percent of firms noted that their outlook worsened, the lowest share since 2004. The index measuring uncertainty regarding companies’ outlooks retreated 13 points to 6.9.Labor market measures suggested rising employment levels and longer workweeks in October. The employment index rose six points to 23.9, a level well above average. Twenty-eight percent of firms noted net hiring, compared with 4 percent noting net layoffs. The hours worked index remained positive but moved down to 6.5. Price increases accelerated further in October, and wage pressures remained elevated.This was the last of the regional Fed surveys for October.Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
October Regional Fed Manufacturing Overview - Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia.Regional manufacturing surveys are a measure of local economic health and are used as a representative for the larger national manufacturing health. They have been used as a signal for business uncertainty and economic activity as a whole. Manufacturing makes up 12% of the country's GDP.The other 6 Federal Reserve Districts do not publish manufacturing data. For these, the Federal Reserve’s Beige Book offers a short summary of each districts’ manufacturing health. The Chicago Fed published their Midwest Manufacturing Index from July 1996 through December of 2013. According to their website, "The Chicago Fed Midwest Manufacturing Index (CFMMI) is undergoing a process of data and methodology revision. In December 2013, the monthly release of the CFMMI was suspended pending the release of updated benchmark data from the U.S. Census Bureau and a period of model verification. Significant revisions in the history of the CFMMI are anticipated." Here is a three-month moving average overlay of each of the five indicators since 2001 (for those with data). The latest average of the five for October is 20.5, down from the previous month's 22.2. It is below its all-time high of 25.1, set in May 2004.
Chicago PMI Decreased in October - From the Chicago PMI: Chicago Business Barometer Declines to to 58.4 in October The MNI Chicago Business Barometer declined to 58.4 in October, the lowest reading since April, down 2.0 points from 60.4 in September. Business activity continued to expand at a healthy rate this month, despite the pace of activity decelerating for the third month in a row. A decline in order book growth and unfinished orders more than offset a rise in output, delivery times and employment, sending the Barometer to its lowest reading in six months. On the year, the Barometer was down 10.7%, the biggest year-over-year fall since December 2015.Hiring activity intensified this month, with the Employment indicator up for the first time since July. Firms continued to report ongoing difficulties recruiting both skilled and unskilled workers, while others prioritized retention of their existing workforce.…“The MNI Chicago Business Barometer continued to revert back towards trend-levels in October, cooling off after a hot and unsustainable run last year,” said Jamie Satchi, Economist at MNI Indicators.“Production continues to be restrained by issues between firms and their suppliers, reflected by Supplier Deliveries at a 14-year high, while the latest raft of tariffs on Chinese goods appears to be exacerbating uncertainty across firms,” he added. This was below the consensus forecast of 60.0, but still a decent reading.
Chicago PMI Plunges Back To 'Hard' Data Reality -- For the third month in a row, Chicago Purchasing Managers signaled declining optimism about business. After some hopeful bounces mid-year PMI drops to 6-month lows (58.4 vs 60.0 expectations), catching down to the 'hard' data reality underlying the US "strongest economy ever." Only 3 components rose relative to last month.
- Prices paid rose at a slower pace, signaling expansion
- New orders rose at a slower pace, signaling expansion
- Employment rose at a faster pace, signaling expansion
- Inventories rose at a slower pace, signaling expansion
- Supplier deliveries rose at a faster pace, signaling expansion
- Production rose at a faster pace, signaling expansion
- Order backlogs rose at a slower pace, signaling expansion
Wisconsin’s $4.1 billion Foxconn factory boondoggle – It was a veritable lovefest in Milwaukee in July 2017 when Republican Gov. Scott Walker and Foxconn chairman Terry Gou announced their plan to create a heavily subsidized manufacturing plant in southeastern Wisconsin. Walker gushed that Gou, who founded his Taiwan-based company in 1974, was “one of the most remarkable business leaders in the world.” Gou returned the favor by saying, “I’ve never seen this type of governor or leader yet in this world.” Effusive, yet ambiguous. The details of the deal were famously written on the back of a napkin when Gou and the Republican governor first met: a $3 billion state subsidy in return for Foxconn’s $10 billion investment in a Generation 10.5 LCD manufacturing plant that would create 13,000 jobs. The size of the subsidy was stunning. It was far and away the largest in Wisconsin history and the largest government handout to a foreign company ever given in America. Like most states, Wisconsin had given subsidies to companies in the past, but never higher than $35,000 per job. Foxconn’s subsidy was $230,000 per job. But Walker was elected in 2010 on a promise of creating 250,000 new jobs in the state in his first term as governor. Six years into his tenure, he still was far short. Running for a third term in 2018, he badly needed a big win. And the Foxconn deal was beyond big. Some predicted that bringing the company that manufactures devices for Apple and many other tech giants to the state would create the “Silicon Valley of Wisconsin,” which is no small claim in a state that’s far from a high-tech hotbed. Conservatives predicted Walker’s re-election would be a slam dunk on the back of the deal. But what seemed so simple on a napkin has turned out to be far more complicated and messy in real life. As the size of the subsidy has steadily increased to a jaw-dropping $4.1 billion, Foxconn has repeatedly changed what it plans to do, raising doubts about the number of jobs it will create. Instead of the promised Generation 10.5 plant, Foxconn now says it will build a much smaller Gen 6 plant, which would require one-third of the promised investment, although the company insists it will eventually hit the $10 billion investment target. And instead of a factory of workers building panels for 75-inch TVs, Foxconn executives now say the goal is to build “ecosystem” of buzzwords called “AI 8K+5G” with most of the manufacturing done by robots.
Weekly Initial Unemployment Claims decreased to 214,000 -- The DOL reported: In the week ending October 27, the advance figure for seasonally adjusted initial claims was 214,000, a decrease of 2,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 215,000 to 216,000. The 4-week moving average was 213,750, an increase of 1,750 from the previous week's revised average. The previous week's average was revised up by 250 from 211,750 to 212,000. The following graph shows the 4-week moving average of weekly claims since 1971.
ADP: Private Employment increased 227,000 in October -- From ADP: Private sector employment increased by 227,000 jobs from September to October according to the October ADP National Employment Report®. ... The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis...“Despite a significant shortage in skilled talent, the labor market continues to grow,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.”We saw significant gains across all industries with trade and leisure and hospitality leading the way. We continue to see larger employers benefit in this environment as they are more apt to provide the competitive wages and strong benefits employees desire.” Mark Zandi, chief economist of Moody’s Analytics, said, “The job market bounced back strongly last month despite being hit by back-to-back hurricanes. Testimonial to the robust employment picture is the broad-based gains in jobs across industries. The only blemish is the struggles small businesses are having filling open job positions.” This was above the consensus forecast for 180,000 private sector jobs added in the ADP report.
First Look at October: ADP Says 227K New Nonfarm Private Jobs - The economic mover and shaker this week is Friday's employment report from the Bureau of Labor Statistics. This monthly report contains a wealth of data for economists, the most publicized being the month-over-month change in Total Nonfarm Employment (the PAYEMS series in the FRED repository). Today we have the ADP October estimate of 227K new nonfarm private employment jobs, an increase over the ADP revised September figure of 218K.The 227K estimate came in above the Investing.com consensus of 189K for the ADP number.The Investing.com forecast for the forthcoming BLS report is for 184K nonfarm private new jobs and the unemployment rate to rise to 3.8%. Their forecast for the October full nonfarm new jobs is (the PAYEMS number) is 191K.Here is an excerpt from today's ADP report press release:“Despite a significant shortage in skilled talent, the labor market continues to grow,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.”We saw significant gains across all industries with trade and leisure and hospitality leading the way. We continue to see larger employers benefit in this environment as they are more apt to provide the competitive wages and strong benefits employees desire.”Mark Zandi, chief economist of Moody’s Analytics, said, “The job market bounced back strongly last month despite being hit by back-to-back hurricanes. Testimonial to the robust employment picture is the broad-based gains in jobs across industries. The only blemish is the struggles small businesses are having filling open job positions.” Here is a visualization of the two series over the previous twelve months.
A Closer Look at Today's ADP Employment Report - In this morning's ADP employment report we got the October estimate of 227K new nonfarm private employment jobs from ADP, an increase over September's 218K. The popular spin on this indicator is as a preview to the monthly jobs report from the Bureau of Labor Statistics. But the ADP report includes a wealth of information that's worth exploring in more detail. Here is a snapshot of the monthly change in the ADP headline number since the company's earliest published data in April 2002. This is quite a volatile series, so we've plotted the monthly data points as dots along with a six-month moving average, which gives us a clearer sense of the trend. As we see in the chart above, the trend peaked 20 months before the last recession and went negative around the time that the NBER subsequently declared as the recession start. At present, the six-month moving average has been hovering in a relatively narrow range around 200K new jobs since around the middle of 2011.ADP also gives us a breakdown of Total Nonfarm Private Employment into two categories: Goods Producing and Services. Here is the same chart style illustrating the two. The US is predominantly a services economy, so it comes as no surprise that Services employment has shown stronger jobs growth. The trend in Goods Producing jobs went negative over a year before the last recession. Interestingly, the Goods Producing jobs saw an uptick in late 2016 that has continued. For a sense of the relative size of Services over Goods Producing employment, the next chart shows the percentage of Services Jobs across the entire series. The latest data point is just fractionally below the record high.There are a number of factors behind this trend. In addition to our increasing dependence of Services, Goods Production employment continues to be impacted by automation and offshoring. The percentage in the chart above began decreasing in early 2015 with no true bounceback since. For a better sense of the components of the two Goods Producing and Service Providing cohorts, here is a snapshot of the five select industries tracked by ADP. The two things to note here are the relative sizes of the industries and the relative trends. Note that Construction and Manufacturing are Production industries whereas the other three are Service Providing.
October Employment Report: 250,000 Jobs Added, 3.7% Unemployment Rate ---From the BLS:Total nonfarm payroll employment rose by 250,000 in October, and the unemployment rate was unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in manufacturing, in construction, and in transportation and warehousing. Hurricane Michael made landfall in the Florida Panhandle on October 10, 2018, during the reference periods for both the establishment and household surveys. Hurricane Michael had no discernible effect on the national employment and unemployment estimates for October, and response rates for the two surveys were within normal ranges. ..The change in total nonfarm payroll employment for September was revised down from +134,000 to +118,000, and the change for August was revised up from +270,000 to +286,000. The downward revision in September offset the upward revision in August.... In October, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $27.30. Over the year, average hourly earnings have increased by 83 cents, or 3.1 percent.The first graph shows the monthly change in payroll jobs, ex-Census (meaning the impact of the decennial Census temporary hires and layoffs is removed - mostly in 2010 - to show the underlying payroll changes). Total payrolls increased by 250 thousand in October (private payrolls increased 246 thousand). Payrolls for August and September were unchanged combined. This graph shows the year-over-year change in total non-farm employment since 1968. In October the year-over-year change was 2.516 million jobs. The third graph shows the employment population ratio and the participation rate. The Labor Force Participation Rate increased in October to 62.9%. This is the percentage of the working age population in the labor force. A large portion of the recent decline in the participation rate is due to demographics and long term trends. The Employment-Population ratio increased to 60.6% (black line). The fourth graph shows the unemployment rate. The unemployment rate was unchanged in October at 3.7%. This was above consensus expectations of 190,000 jobs. A strong report.
October jobs report: probably the best report of the entire expansion - HEADLINES:
- +250,000 jobs added
- U3 unemployment rate unchanged at 3.7%
- U6 underemployment rate declined -0.1% from 7.5% to 7.4%
- Not in Labor Force, but Want a Job Now: rose +72,000 from 5.237 million to 5.309 million
- Part time for economic reasons: fell -21,000 from 4.642 million to 4.621 million
- Employment/population ratio ages 25-54: rose +0.4% from 79.3% to 79.7%
- Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $.07 from $22.82 to $22.89, up +3.2% YoY. (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)
- Manufacturing jobs rose +32,000 for an average of +21,000/month in the past year vs. the last seven years of Obama's presidency in which an average of +10,300 manufacturing jobs were added each month.
- Coal mining jobs fell -200 for an average of -8/month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month
- August was revised upward by 16,000. September was revised downward by -16,000, for no net change.
- the average manufacturing workweek fell by -0.1 hours to 40.8 hours. This is one of the 10 components of the LEI.
- construction jobs rose by +30,000. YoY construction jobs are up +330,000.
- temporary jobs rose by +3300.
- the number of people unemployed for 5 weeks or less decreased by -8,000 from 2,065,000 to 2,057,000. The post-recession low was set five months ago at 2,034,000.
- Overtime was unchanged at 3.5 hours.
- Professional and business employment (generally higher-paying jobs) increased by +35,000 and is up +516,000 YoY.
- the index of aggregate hours worked for non-managerial workers rose by +0.2%.
- the index of aggregate payrolls for non-managerial workers rose by +0.5%.
- the alternate jobs number contained in the more volatile household survey increased by +600,000 jobs. This represents an increase of 2,748,000 jobs YoY vs. 2,516,000 in the establishment survey.
- Government jobs increased by +4,000.
- the overall employment to population ratio for all ages 16 and up increased +0.2% from 60.4% m/m to 60.6% and is +0.4% YoY.
- The labor force participation rate rose +0.2% from 62.7% to 62.9 and is up +0.2% YoY.
SUMMARY: This was probably the single best report of the entire expansion. The only flies in the ointment were a slight increase in people not in the labor force who want a job now, and a slight decline in the manufacturing workweek. The headline unemployment rate was unchanged at its expansion low. Aside from that, virtually everything moved in the right direction, in many cases to expansion highs. For the first time, wages for ordinary workers grew over 3% a year. Participation increased across the spectrum. The headline job growth number was excellent, and the more volatile household survey trend was even better.
October Payrolls Surge By 250K, Smashing Expectations As Wage Growth Soars - With a number that many warned would be impacted by not one by two hurricanes and as such the forecast range was extremely wide, from 105K to 253K, moments ago the BLS reported that indeed consensus was way off when it announced that in October payrolls soared by 250K, just shy of the highest Wall Street estimate, and more than double last month's downward revised 118K (down from 134K). At the same time, August was revised up from +270,000 to +286,000, offseting the upward revision in August. After revisions, job gains have averaged 218,000 over the past 3 months. Still, like last month, one should be careful with today's weather-affect month: as Bloomberg economist Tim Mahedy writes, "just as economists should have avoided conclusions last month when payrolls surprised on the downside at 118k, today’s strong print of 250k should be understood in the context of payback from Hurricane Florence.'"Oddly, while the BLS reported that a whopping 198K workers were unable to work due to bad weather... ... what is curious about the number is that according to the BLS, "Hurricane Michael had no discernible effect on the national employment and unemployment estimates for October, and response rates for the two surveys were within normal ranges."Commenting on the weather, Bloomberg economist Yelena Shulyatyeva said that "Hurricane Michael had a significant impact on employment and hours worked in October, even though there was no discernible impact on the headline payroll print. Absences from work due to bad weather (198k) were three times higher than the average of 62k for the month in the previous 10 years. Weather-related hour curtailments (1020k) were five times above their historical average of 208k.''Going back to the data, the unemployment rate in October remained unchanged at 3.7%, as the number of employed workers (Household Survey) soared by 600K to a record 156.562MM employed Americans, while the number unemployed rose modestly to 6.075MM from 5.964M.One data point that will no doubt be seized upon by Trump with the midterms next week, is that Hispanic unemployment dropped to a record low (even as joblessness for black Americans rose fractionally) White and Asian unemployment are hanging in the low 3s. The people not in the labor force shrank by nearly half a million, from 96.364MM to 95.877M. The labor force participation rate rose from 62.7% to 62.9%, well above the 62.7% consensus estimate.
US Companies Accelerated Hiring In October - Private payrolls in the US surged 246,000 in October, according to this morning’s update from the Labor Department. The gain, which was well above the consensus forecast, marks a sharp rebound following September’s weak 121,000 rise. Some analysts say that the latest numbers may be due to the temporary effects from hurricanes. Perhaps, but looking through the monthly volatility reaffirms that the trend remains solid, based on the year-over-year change for private-sector job creation. For a second month in a row, payrolls at US firms grew by roughly 2.0% in annual terms. The pace for the past two months marks the strongest year-over-year trend for the labor market in two years. The key takeaway: concern that the US economy is weakening appears overblown, according to the data du jour. Wage growth also strengthened last month via a 3.1% annual increase — the strongest jump in nearly a decade. Today’s figures give the Federal Reserve new reasons to argue that another interest-rate hike is prudent. Fed funds futures are currently estimating a 72% probability that the central bank will lift its target rate at the December FOMC meeting by 25 basis points to a 2.25%-to-2.50% range, according to CME data.“The labor market is definitely healthy and we’re bringing more people into the labor force,” says Scott Anderson, chief economist at Bank of the West.
October Delivers A Solid Jobs Report - So far this year, the word governing the jobs market has been “inconsistent.” In January and February we saw numbers that, notwithstanding the fact that most of the nation was undergoing a cold and harsh winter, were fairly strong, suggesting that 2018 could be a good year for jobs growth notwithstanding the fact that we are rather late in the recovery from the Great Recession and nearing a point in the jobs market where we’ve typically seen equilibrium in the past. The following two months, though, March and April, turned disappointing as net jobs growth missed even modest target numbers by wide margins, The job situation improved slightly in May, but even those numbers were about the same as what we saw for most of the final two years of the Obama Administration, numbers which are more consistent with a mature recovery reaching what economists refer to as “full employment.” The same was true for the report for June which was somewhat better than where expectations had been set. The July Report, though, fell short of expectations, and the August report was slightly ahead of expectations. Then, in last month’s report, we saw jobs growth fall below expectations while the top-line unemployment number dipped to 3.7%, level we have not seen in about 50 years. While the Administration and its supporters have touted these numbers as indicative of “amazing” growth, truth is that they aren’t much different from what we saw throughout President Obama’s second term in office. Indeed, as I noted in my post about the December 2017 report, the jobs market seems to be at the point where expecting massive increases in job creation are probably out of the question. Instead, we’re likely to see modest but healthy jobs growth, but not anything spectacular. Rather than the jobs number, though, most analysts have been keeping an eye on wage growth, which has remained stubbornly lagging for the better part of the past two or three years. At an annualized rate, for example, wages have been growing at roughly 2.7%, which is slowly starting to be not enough to keep up with an inflation rate that has quietly increased as the economy has heated up. With the pool of eligible worker shrinking somewhat and unemployment at rates that are generally considered to be “full employment,” there should be more movement on wages as employers seek to attract workers. So far, though, that hasn’t been happening. This has left some analysts wondering if, thanks to increases in worker productivity and investments in automation, employers are no longer seeing the need to raise wages, something that could have a real impact on workers if prices continue to rise. This is especially important given the fact that other economic statistics are showing that inflation at the wholesale and consumer levels was starting to increase at a faster rate than we’ve seen in the past and that, without more rapid wage growth, Americans would effectively see real wages decline in terms of their purchasing power. In any case, heading into the release of today’s October Jobs Report, the expectation of analysts and traders was that we would see roughly +188,000 new jobs, with the U-3 Unemployment Rate staying at the 3.7% rate it hit last month. Instead, we got a much better number than that, and at least some sign that wage growth may finally be picking up:
Another strong jobs report yields critical insights - Jared Bernstein - The nation’s payrolls added 250,000 jobs last month, the unemployment rate held steady at a 49-year low, the closely watched labor force participation rate increased, and year-over-year wage growth broke 3 percent for the first time since 2009. Given that inflation has been running a bit short of 2.5 percent, this means workers are finally seeing real gains in the buying power of their paychecks.Wages were up 3.1 percent for all private sector workers and 3.2 percent for middle-wage workers, suggesting that the tight labor market is generating broad gains, not just helping those at the top of the earnings scale. One slight caveat re wage growth is that in the previous October (2017), hourly pay in this series fell four cents in nominal terms, a rare event. Thus, the base off to which this October’s wage gain is compared was unusually low. However, the moving-average figures below, which smooth out such monthly noise, show clear acceleration in the pace of wage gains. Also, averaging over the past three months shows hourly wages growing at a very strong 3.6 percent annual rate compared to the prior three months. This represents a clear acceleration over the prior two “quarters,” when annualized growth was 2.6 and 3 percent, respectively. In other words, the U.S. job market is tighter than it has been in decades and this dynamic is revealing at least two important insights. The first, which we knew, is that slack matters: the absence of full employment saps worker bargaining power and constrains wage growth. When we move toward full capacity in the job market, workers get back some of the clout they lacked, and employers must share more of the gains with them. Second, and this most economists did not know, is that there was and still probably is more room-to-run in the labor market than conventional wisdom believed and thus more room for non-inflationary gains. The distributional implications of this critical insight cannot be overstated: full employment provides the biggest gains to the least advantaged, too many of whom have long been left behind in previous economic expansions. Our monthly smoother, which averages over 3, 6, and 12-month windows to get a better look at the underlying trend of job growth, shows that trend job gains are north of 200,000, more than enough to push our already low unemployment rate down even further. Is this trend persists, and even if it fades some, it will likely take the jobless rate down to below 3.5 percent in coming months. As noted, the tighter job market has delivered faster wage growth. The smooth trend in the next two figures show a slow staircase of wage gains, from around 2 percent in 2013, to 2.5 percent around 2016, to closing in on around 3 percent now. Contrast this staircase with the “elevator down” shortly after the recession. This pattern of sharp wage-growth losses and slow wage-growth gains is precisely why it is so important for policy makers to preserve and build on the gains generated by the close-to-full-capacity job market. This admonition is especially the case when we consider how “anchored” price growth has been. The next figure shows that as the unemployment rate has fallen well below the Fed’s estimate of the “natural rate”—the lowest rate they believe to be consistent with stable inflation—price growth remained at the Fed’s 2 percent target. This anchored inflation dynamic has held even as wage growth has picked up.
Where The Jobs Were In October- Who's Hiring And Who Isn't - After a disappointing payrolls report last month, which was downward revised to 118K jobs mostly due to a hurricane impacting hiring and resulting in a sharp drop in retail and hospitality jobs, October was the payback month with many of the jobs "lost" in September coming back and headline payrolls printing at 250K, 50,000 more than the 200K expected. Notably, it was not just last month's hurricane which impacted the data, but also last year's duo of Hurricanes which negatively impacted hourly earnings in Oct 2017 as SouthBay Research notes. It was this weakness that created the "base effect" wage spike this month, resulting in the artificially high 3.1% average hourly earnings print, the highest since April 2009. Hurricanes aside, the job market continues to grow at a blistering pace with the following key highlights of greatest impact:
- Manufacturing has soared with +296,000 jobs added this year
- Construction wages +4.2%, beating overall 3.1% rate (best in nearly a decade)
- Lowest Hispanic unemployment rate ever
To be sure, much of this overheating in the US labor market is the result of Trump's fiscal stimulus, whose impact will soon begin to fade at a rapid pace as payback time comes. Until then, however, the labor market remains especially strong - in fact not a single major category saw a drop in employment - with the following industries especially hot right now:
- Employment in the well-paying professional and business services increased by 35,000.
- Health care employment rose by 36,000 as hospitals added 13,000 jobs, and employment in ambulatory health care services continued to trend up, +14,000.
- Employment in transportation and warehousing rose by 24,000. Job gains occurred in warehousing and storage (+8,000) and in couriers and messengers (+8,000).
- Construction employment continued to trend up in October, up +33,000.
- Employment in manufacturing continued to trend up in September, rising +18,000
- Employment in mining, employment in support activities for mining rose by +5,000
College Grads Vs High School Dropouts- A Disturbing Observation - A surprising trends has emerged when comparing the labor force participation rate of those with a college degree or higher versus high school dropouts. As the chart below shows, over the past 2 decades, the participation rate of college graduates has been steadily declining. At the same time, the LFPR of high school dropouts - those with less than a high school education - has been rising ever since the mid 1990s, and is now just why of all time highs hit during the peak of the financial crisis. To be sure, there are many ways to analyze, or spin, this data: college grads are getting older and as a result of hitting their retirement years, are dropping out of the broader labor force at an accelerating rate. Meanwhile, high school dropouts, mostly younger people, do not face the same demographic pressures and continue to gain "market share." Alternatively, high school dropouts are increasingly in demand due to their non-existent wage demand leverage while college grads are increasingly pricing themselves out of the job market; Or simply employers don't need to hire as many college grads and would rather hire cheap, unqualified, easily accessible workers whom they then train for their specific needs. Whatever the reason, the difference in the labor force participation between college grads and high school dropouts has never been lower. Extending and extrapolating this trend suggests that some time over the next two decades, the labor force participation rate of high school dropouts in the US labor pool may be the same, if not higher, than that of college grads. And while one can debate what is causing this troubling compression, the implications for future US productivity should the US labor force become increasing saturated with minimally skilled workers at the expense of qualified college grads, is rather dire. Then again, Bloomberg has yet to start tracking the labor force participation rate of robots: something tells us that the growth rate in this category will soon be off the charts.
Comments on October Employment Report -- Bill Mcbride - The headline jobs number at 250,000 for October was above consensus expectations of 190 thousand (probably boosted by some bounce back from Hurricane Florence), and the previous two months were unrevised combined. The unemployment rate was unchanged at 3.7%. Overall this was a strong report. Earlier: October Employment Report: 250,000 Jobs Added, 3.7% Unemployment Rate In October, the year-over-year employment change was 2.516 million jobs. This is solid year-over-year growth. Wage growth was above expectations in October. From the BLS: "In October, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $27.30. Over the year, average hourly earnings have increased by 83 cents, or 3.1 percent." This graph is based on “Average Hourly Earnings” from the Current Employment Statistics (CES) (aka "Establishment") monthly employment report. The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees. Nominal wage growth was at 3.1% YoY in October. Wage growth has generally been trending up. Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old. In the earlier period the participation rate for this group was trending up as women joined the labor force. Since the early '90s, the participation rate moved more sideways, with a downward drift starting around '00 - and with ups and downs related to the business cycle. The 25 to 54 participation rate increased in October to 82.3%, and the 25 to 54 employment population ratio increased to 79.7%. From the BLS report: "The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 4.6 million in October. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs." The number of persons working part time for economic reasons has been generally trending down. The number decreased slightly in October. The number working part time for economic reasons suggests there is still a little slack in the labor market. These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 7.4% in October. This graph shows the number of workers unemployed for 27 weeks or more. According to the BLS, there are 1.373 million workers who have been unemployed for more than 26 weeks and still want a job. This was down slightly from 1.384 million in September. Summary: The headline jobs number was above expectations. The headline unemployment rate was unchanged at 3.7%, tying last month for the lowest rate since 1969. And wage growth was above expectations, and above 3% YoY for the first time in over 9 years. Overall, this was a strong report. For the first ten months of 2018, job growth has been solid, averaging 213 thousand per month.
Despite Slowing, US Productivity Growth Best Back-To-Back Quarters Since 2015 - US Productivity growth in Q3 disappointed expectations, slowing from an upwardly revised 3.0% QoQ in Q2 to 2.2% in Q3... Productivity gains in the U.S. posted the best back-to-back quarters since 2015. Compared with a year earlier, productivity rose 1.3 percent, the same pace as in the second quarter and equal to the average annual rate from 2007 to 2017. That’s well below the 3 percent pace of the late 1990s. As unit labor costs rose more than expected (up 1.2% QoQ) in Q3. Elsewhere in the productivity report, inflation-adjusted hourly earnings rose at a 1.4 percent annualized pace after a 0.3 percent increase, while hours worked rose 1.8 percent. Output advanced at a 4.1 percent rate, following 5 percent. Among manufacturers, productivity rose at a 0.5 percent pace after a 1.2 percent rate in the prior quarter. That compares with an annual average gain of 0.7 percent from 2007 to 2017.
Millennial Men Leave Perplexing Hole in a Hot U.S. Labor Market - Nathan Butcher is 25 and, like many men his age, he isn’t working. Weary of long days earning minimum wage, he quit his job in a pizzeria in June. Ten years after the Great Recession, 25- to 34-year-old men are lagging in the workforce more than any other age and gender demographic. About 500,000 more would be punching the clock today had their employment rate returned to pre-downturn levels. Many, like Butcher, say they’re in training. Others report disability. All are missing out on a hot labor market and crucial years on the job, ones traditionally filled with the promotions and raises that build the foundation for a career. “At some point, you can have a bit of an effect of a lost generation,” according to David Dorn, an economist at the University of Zurich. “If you get to the point where you’re turning 30, you’ve never held a real job and you don’t have a college education, then it is very hard to recover at that point.” Men -- long America’s economically privileged gender -- have been dogged in recent decades by high incarceration and swollen disability rates. They hemorrhaged high-paying jobs after technology and globalization hit manufacturing and mining. The young ones have fared particularly badly. Many of them exited high school into a world short on middle-skill job opportunities, only to be broadsided by the worst downturn since the Great Depression. Employment plummeted across the board during the 2007 to 2009 recession, and 25- to 34-year-old men fell far behind their slightly-older counterparts.
U.S. top court wary of limiting company power to arbitrate disputes (Reuters) - U.S. Supreme Court justices signaled on Monday they may issue more pro-business rulings giving companies wide latitude to use arbitration to resolve disputes with employees, customers or other businesses rather than the courts. The nine justices heard arguments in two cases testing the scope of company agreements forcing disputes to be handled by an arbitrator instead of a judge, one involving a California lamp retailer and the other involving a Texas dental equipment distributor. In their questioning of the parties in the cases, the justices indicated a reluctance to limit the ability of companies to keep such disputes out of court. The conservative-majority Supreme Court in recent years has issued a series of decisions endorsing the power of arbitration and curbing class-action claims of various types. Both cases heard on Monday involved appeals of lower court rulings that business groups complained would harm the ability of companies to use arbitration as a way to resolve conflicts and would undermine federal arbitration law. Companies prefer to arbitrate claims because it is cheaper and faster than litigation in court, which carries a greater risk. Businesses also prefer to handle disputes with individuals - instead of groups in class-action lawsuits - because such litigation can result in hefty damages awards by juries and is harder to fight. In May, the justices upheld the legality of compelling workers to sign arbitration agreements waiving their right to bring class-action claims in a blow to employee rights. Critics have said arbitration can make it tougher to root out misconduct such as discrimination within companies because the proceedings generally are kept private, an issue that has taken on greater resonance with the #MeToo movement against sexual harassment and misconduct.
Economists reverse claims that $15 Seattle minimum wage hurt workers, admit it was largely beneficial - Earlier this year, a group of business school researchers from the University of Washington and NYU, as well as Amazon, published an influential paper claiming that the rising Seattle minimum wage had decreased take-home pay for workers by 6% due to cuts to work hours -- the paper was trumpeted by right-wing ideologues as examples of how "liberal policies" hurt the workers they are meant to help. But a new paper by the same authors (Sci-Hub mirror) shows that the rising minimum wage generated major increases for the workers who had the most hours, whose hours were only cut a little, but still came out ahead thanks to the wage increase; workers with fewer hours saw no financial harm from the rising minimum wage, working fewer hours and bringing home the same sum; and they found some harm to people who had the smallest number of hours) (which may actually reflect stronger demand for workers and fewer workers in this category of very-low-hour work). The study's authors explain that their findings are all consistent with one another, but people who found methodological flaws in the first study say that the reversal is inevitable. Here's Barry Ritholz (previously) in Bloomberg: When thinking about the impact of raising minimum wages, one can’t simply omit most of the biggest minimum-wage employers in the region, such as McDonald’s and other fast-food chains, or Wal-Mart and other major retailers. These are the very employers that were the main target of the minimum-wage law; indeed, the law established an even higher minimum wage of $15.45 an hour for companies with 500 or more employees.There were two other glaring defects in the first study that are worth mentioning. The first is that its findings contradicted the vast majority research on minimum wages. As was demonstrated back in 1994 by economists Alan Krueger and David Card, modest, gradual wage increases have not been shown to reduce employment or hours worked in any significant way. Ignoring that body of research without a very good reason made the initial University of Washington study questionable at best. Second, there potentially is a problem with having a lead researcher — economist Jacob Vigdor, whose affiliations among others include the right-leaning Manhattan Institute — whose impartiality is open to question.
Americans Are Willing to Forgo a 56% Pay Raise for Best Job Perks It’s not all about the paycheck.Americans are willing to give up “substantial” earnings in exchange for non-wage perks and benefits, according to a National Bureau of Economic Research working paper this month by researchers from Harvard Medical School, the Rand Corp. and the University of California at Los Angeles. Paid vacation, low or moderate level of physical activity among non-wage job characteristics workers prizeThe study’s survey data show switching from a job with the worst mix of non-wage characteristics -- such as no paid time off, heavy physical activity and inflexible hours -- to the best mix is equivalent to an overall 56.1 percent wage increase.Almost 40 percent of respondents preferred a relatively lower-wage job with flexible hours and telecommuting over one without such perks, the research showed. Setting one’s own schedule is equivalent to a 9 percent pay bump, while autonomy at work is worth 3.8 percent of the wage relative to a position with well-defined tasks.With U.S. economists and policy makers focused on wage growth, the research sheds light on some of the less-measurable perks, benefits and conditions affecting job satisfaction, particularly the premium employees place on paid time off. While 10 days represents just 4 percent of a standard 250-day work year, respondents value such a break as worth 16.4 percent of wages, suggesting they associate paid vacation with more job security, according to the authors. The premium rises to 23 percent for a total of 20 days off. A sustained increase in average hourly earnings -- which rose 2.8 percent in September from a year earlier -- has been the missing piece of the almost decade-long expansion. Meanwhile, benefits -- including paid time off, insurance, and sick leave -- have risen in recent years as a share of total compensation, Labor Department data show.
Income Inequality’s Most Disturbing Side Effect: Homicide - Income inequality can cause all kinds of problems across the economic spectrum—but perhaps the most frightening is homicide. Inequality—the gap between a society's richest and poorest—predicts murder rates better than any other variable, according to Martin Daly, a professor emeritus of psychology at McMaster University in Ontario, who has studied this connection for decades. It is more tightly tied to murder than straightforward poverty, for example, or drug abuse. And research conducted for the World Bank finds that both between and within countries, about half the variance in murder rates can be accounted for by looking at the most common measure of inequality, which is known as the Gini coefficient. The murders most associated with inequality, it seems, are driven by a perceived lack of respect. Like most killings, these are mostly perpetrated by males—and in societies with low inequality, there tend to be very few murders. To an outsider, these deaths, which make up more than a third of the homicides with known motives reported to the FBI, seem senseless: a guy looks at someone else the wrong way, makes a disrespectful remark, or is believed to have winked at another man's wife or girlfriend. These incidents seem too trivial to be matters of life and death. “A prosperous guy like me, if someone [insults me] in a bar, I can roll my eyes and leave,” Daly says. “But if it's your local bar, you are unemployed or underemployed, and your only source of status and self-respect is your standing in the neighborhood, turning the other cheek looks weak, and everyone soon knows you are an easy mark.” Some argue that in these cases, the real issue is poverty, not inequality. For example, William Pridemore, dean of criminology at the University at Albany, S.U.N.Y., says that the inequity correlation is a methodological artifact. He gives a theoretical example of a country in which everyone is meaningfully employed, can afford vacations and other small luxuries, and lives in a safe neighborhood with free health care—but some of them are billionaires. He asks whether this sort of place would have the same level of violence as places where those at the bottom are in abject poverty instead. Whereas the size of gaps between rungs on the financial ladder may be identical in both cases, the level of relative deprivation experienced by people at the bottom rung may not be—inequality is not just about having less when others have more; it is about how low status is perceived. That, Daly argues, is what can make status differences deadly. The living standards of poor people in developed countries today would be beyond the dreams of kings in the past because of technology—but we do not rate our social status by comparing ourselves with medieval lords; we do so by looking at those around us.
The Supreme Court could make it harder for workers to sue over issues like sexual harassment and pay discrimination It has gotten harder for American workers to bring lawsuits against their employers in recent years. It could get harder still. The Supreme Court will rule on a number of cases this term over whether workers can bring disputes against their employers in a court of law or if they will have to submit to arbitration behind closed doors. Arbitration proceedings are generally favored by employers because they can be more efficient and save money. Labor advocates say arbitration tilts in favor of big business and shields employers from having to make public embarrassing information about hostile work environments and pay disparities. It sounds technical, but the difference between a court hearing and an arbitration matters. The average arbitration can be completed in six months, versus multiple years for a federal jury trial, according to Julianna Thomas McCabe, who heads the national class-action practice group at the law firm Carlton Fields. More than half of nonunion private-sector employers now use mandatory arbitration procedures — and the rate is even higher as the size of the business increases. "The major driving force behind arbitration agreements is an effort to reduce the cost of litigation, and particularly with class actions," said Lauren Novak, who specializes in labor and employment issues and is a partner at the law firm Schiff Hardin. In three cases, including two set for argument on Monday, the justices will decide when exactly employees can be forced into arbitration. Having three cases on the docket suggests "the court is extremely interested in this issue," McCabe said.
Georgia’s Kemp Purged 340,134 Voters, Falsely Asserting They Had Moved - Greg Palast, Truthout - Last year, Brian Kemp, Georgia’s secretary of state canceled the registrations of over half a million Georgians because they left the state or moved to another county. Except they didn’t. The nation’s top experts in address location reviewed Kemp’s list of purged voters — and returned the names and addresses of 340,134 who never moved at all. John Lenser, CEO of CohereOne of San Rafael, California, led the team analyzing the purge list. He concluded, “340,000 of those voters remained at their original address. They should have never been removed from the voter registration rolls.” This is the story of the mass exodus from Georgia that never happened, and the mass purge of voters by Kemp, GOP candidate for governor, through methods guaranteed to disproportionately take away the vote from the young, the poor and voters of color. It began five years ago, when Kemp stonewalled my first requests for information on purges in Georgia, first for Al Jazeera and Rolling Stone, now for Truthout and Democracy Now! It took my lawyer’s threat of a federal lawsuit, filed last week in Atlanta federal court, to blast the list of the electorally doomed from Kemp’s hands. The files recorded 530,510 voters as moved from “inactive to cancelled.” We could not decode about 80,000 addresses — and discovered that 19,118 of the voters had passed away. And the rest of the voters of this supposed mass migration? The experts ran the names through an “advanced address hygiene process,” that is, digging through dozens — up to 200 — dynamically updated databases (such as cell phone bills and tax filings), as well as limited-access files at the post office, to get the location of voters. They accomplished this with astonishing accuracy — something the state of Georgia should have done. The result: GregPalast.com has a list of 340,134 voters who never moved an inch. Kemp has sent them no notice — none — but they have lost their right to vote.
Georgia Election Server Wiped After Suit Filed - A computer server crucial to a lawsuit against Georgia election officials was quietly wiped clean by its custodians just after the suit was filed, The Associated Press has learned.The server’s data was destroyed July 7 by technicians at the Center for Elections Systems at Kennesaw State University, which runs the state’s election system. The data wipe was revealed in an email sent last week from an assistant state attorney general to plaintiffs in the case that was later obtained by the AP. More emails obtained in a public records request confirmed the wipe.The lawsuit, filed July 3 by a diverse group of election reform advocates, aims to force Georgia to retire its antiquated and heavily criticized election technology. The server in question, which served as a statewide staging location for key election-related data, made national headlines in June after a security expert disclosed a gaping security hole that wasn’t fixed six months after he reported it to election authorities. It’s not clear who ordered the server’s data irretrievably erased. The Kennesaw elections center answers to Georgia’s secretary of state, Brian Kemp, a Republican running for governor in 2018 and the suit’s main defendant.
How Stupid Do Stacey Abrams, Lucy McBath, and Most Progressive Democrat Congressional Candidates Think We Are? - Black Agenda Report - The midterm elections are a week away and I can’t find anybody worth voting for. I live in Georgia, the 6th congressional district, where Stacey Abrams is the Democrat running for governor, and Lucy McBath is the Democrat congressional candidate. McBath is running four points behind Republican incumbent Karen Handel. Stacey Abrams has been polling only two points behind Brian Kemp well within the polling margin of error for months now.For those outside Georgia, if Donald Trump is some kind of horrible bad grandpa Brian Kemp is an especially mean uncle out of Athens GA, normally a pretty liberal college town. Kemp ran commercials in which he blew up stuff, fired up his big chainsaw to cut regulations, waved his guns that nobody better try to take, and slammed the door of that big truck he’s got in case he has “...to round up some criminal illegals and take ‘em home myself.”Republican Kemp has been GA Secretary of State, in charge of Georgia’s elections for eight years now, during which time he’s struck about a million or so mostly minority voters off the rolls, interfered with voter registration drives, and caused several tens of thousands of other new voter registrations to simply disappear. This is standard Republican practice across the country because the numbers of their dependable vote are shrinking. So Republicans try to hold down the vote in Democratic areas, and Democrats try to maximize registration and turnout. 6th district congresswoman Karen Handel was Brian Kemp’s predecessor in the office of Georgia Secretary of State for eight years. In that capacity she disappeared her own share of minority votes and voters. She also had a hand in cooperation with the crooked Democrat who held that office before her, in bringing Diebold’s faith based voting machines into Georgia.
Uncovering Project Blitz: Fighting A Secret, Coordinated Legislative Strategy To Undermine Religious Freedom In The States - Every legislative session, AU tracks hundreds of state bills that, if passed, would undermine religious freedom in nearly every state. We often see trends arise across states. Lawmakers in different states introduce similar bills, and sometimes even the same exact bills with the same exact language. And we can usually figure out why that happens: conservative lobbying groups like the American Legislative Exchange Council (ALEC) and state Focus on the Family affiliates often shop model bills around to state legislators, who then introduce these model bills in their states. The lobbying groups also share strategies with legislators to help pass their bills. The result: Similar harmful bills appear and pass in many different states in a nationwide onslaught. This year, we started seeing a trend we couldn’t explain. Why were there suddenly dozens of new bills introduced, all over the country, requiring public schools to post the national motto “In God We Trust”? Last year, there were three of these bills introduced, but this year, there were over 25. Why were there suddenly dozens of new bills introduced, all over the country, requiring public schools to post the national motto “In God We Trust”? Last year, there were three of these bills introduced, but this year, there were over 25. Why were these “In God We Trust” bills at the top of legislators’ priority lists – passing in Alabama, Arizona, Florida, Louisiana and Tennessee – when states are currently facing so many other pressing issues? Thanks to an important discovery by longtime Americans United ally and veteran researcher of the Religious Right Fred Clarkson, we now know why. Fred shared the Project Blitz playbook: a 116-page guide for state legislators published by the Congressional Prayer Caucus Foundation (CPCF), WallBuilders and other evangelical Christian political groups. CPCF is so closely entwined with state legislators that they organize “prayer caucuses” in many statehouses – with, for example, 65 public officials on board in Iowa and 28 in Tennessee. The playbook includes 20 model bills and a variety of strategies state legislators could use to pass them. And of those 20 model bills, “In God We Trust” bills are the first ones on their list.
Killings at Kentucky store were hate crime, police say -- Jeffersontown Police Chief Sam Rogers visited the First Baptist Church Sunday to tell the congregation that the gunman who attempted to attack the black church last week and then went on a shooting rampage at a nearby Kroger store was a white racist.Gregory Alan Bush, 51, was arrested and charged in the shooting deaths of Maurice Stallard, 69, and Vickie Lee Jones, 67, who were both black. During the shooting spree, Bush made statements to the effect that “whites don’t kill whites” and he was targeting only African-Americans.Bush had approached the church on the morning of October 24, shortly after a church service attended by some 70 people had let out. Less than a dozen people remained, and the doors had been locked. Those inside saw him on the surveillance cameras pounding on the doors and refused to let him in. Eventually he turned away. Chief Rogers told the congregation, “I won’t stand here and pretend that none of us know what could have happened if that evil man had gotten in the doors of this church.”Ten or fifteen minutes after leaving the church, Bush walked up to Maurice Stallard at a Kroger supermarket and shot him multiple times. He then left the store and shot and killed Vickie Lee Jones in the parking lot. A bystander who was armed fired back at Bush and he fled the store. Police arrested him a few minutes later. According to press reports, Bush had a history of both mental illness and violence, frequently accompanied by racist outbursts, many directed at his ex-wife, who was African-American. A conviction for domestic violence resulted in a judicial order stripping him of the right to possess firearms, but this did not stop him from regularly carrying a gun.
Electric chair builder worried Tennessee execution will fail— If Tennessee electrocutes Edmund Zagorski on Thursday (Nov. 1), it will be in an electric chair built by a self-taught execution expert who is no longer welcomed in the prison system and who worries that his device will malfunction.Fred Leuchter had a successful career in the execution business before his reputation was tainted by his claim that there were no gas chambers at Auschwitz.Tennessee's chair, which hasn't been used since 2007, is just one of many execution devices Leuchter worked on between 1979 and 1990, according to an article by Fordham University professor Deborah Denno in the William and Mary Law Review. In addition to electric chairs, Leuchter built, refurbished and consulted on gas chambers, lethal injection machines and a gallows for at least 27 states. After his comments about the Holocaust, it came to light that he had neither an engineering degree nor a license, even though he promoted himself as an engineer. His concern is that Tennessee's chair will fail because of changes others made to it after he was no longer allowed to service it. "What I'm worried about now is Tennessee's got an electric chair that's going to hurt someone or cause problems. And it's got my name on it," Leuchter said. "I don't think it's going to be humane."
How the Charter School Wars Turned an Obscure Race Into California’s Second Most Expensive Election - The California charter school lobby is testing its influence in the race for Superintendent of Public Instruction, turning an election for a somewhat obscure statewide position into a notably expensive battle.More than $50 million has flown into the contest between two Democrats for a nonpartisan office with little statutory power. For perspective, this is more money raised than in any U.S. House race this cycle and most Senate races, not to mention every other race in California, save for the governor’s.The race, largely understood as a proxy war for the future of California charter schools, is the second attempt by the state’s charter school lobby to demonstrate its influence this election cycle. The candidates, Marshall Tuck and Tony Thurmond, both insist that the race is about far more than charters, which currently enroll 10 percent of the state’s 6.2 million public school students, though they admit that they hold different visions for the publicly funded, privately managed schools. That’s something their funders also acutely recognize.Tuck, a second-time candidate for the position who has never held elected office, has received endorsements from the San Francisco Chronicle, the San Jose Mercury News and the San Diego Union Tribune, among others. He’s is backed by the charter school movement, which has spent close to $30 million in support of his campaign. Three individuals alone — real estate developer Bill Bloomfield, Gap co-founder Doris Fisher, and venture capitalist Arthur Rock — have given a combined $11 million. Tuck’s campaign has also raised over $5 million, something he says challenges the notion that he’s bought and paid for by the charter lobby, which did not directly give money to his campaign. “People focus on the independent expenditures, but I go the opposite way. We’ve raised money from over 4,000 individuals in direct contributions, ranging from high income to low income, people who support charters to people who oppose them, and everything in between,” he said. “People backing me just believe public schools aren’t working for all.”
Wealthy Applicants Have A Much Easier Time Getting Admitted To Better Law Schools Many readers of this column understand that it costs an insane amount of money to become a lawyer. Individuals must typically borrow hundreds of thousands of dollars to attend law school, and spend thousands of dollars to study for and take the bar exam. However, it also costs a lot of money to simply take the LSAT and apply to law schools. As a result, less-wealthy students can struggle with the law school admission process. It is pretty well-understood that applicants can score higher on the LSAT (and other exams) by taking test prep classes and reviewing the right materials. However, test prep classes often cost thousands of dollars, and many students like myself did not have the resources to pay for these courses. In addition, numerous prospective law students do not want to take out loans to pay for test prep classes, because they will need to borrow large sums of money to attend law school. Since I did not have the money to take an LSAT prep class, I had to create my own study system in order to prepare for this test. I bought (and was gifted) a bunch of second-hand LSAT prep materials, and most of these materials were already marked up by prior owners of these books. I spent many months studying for the LSAT, but I do not think that I reached my full potential, since I couldn’t afford a test prep class. Many of my wealthier friends took test prep courses in order to guide their studying for the LSAT. Not only did these classes explain how to work through LSAT questions in a way not possible by simply reading a book, but LSAT prep classes also gave these students a regimented study system. From my own experience, it seems that applicants who could afford to take LSAT prep courses scored better on the test. Since the LSAT is a huge factor in the law school admission process, applicants who can afford to pay for this resource have an easier time getting admitted to better law schools.
Princeton Issues Checklist For Inclusive Halloween - Princeton University’s Undergraduate Student Government (USG) issued a checklist to students on Thursday to ensure that their Halloween costumes fostered an "inclusive experience for all students." USG distributed its checklist to Princeton’s undergraduate students in an email obtained by Campus Reform. The email contained several questions that students were to "take some time out and ask [themselves]" before attending the Ivy League school’s annual Halloween function, dubbed "Princetoween." Students were to ask themselves whether "my costume [is] making fun of a group of people," or whether it "reduce[s] cultural differences to jokes and stereotypes."
- "Are you altering your skin color, facial/body features to make it darker or indicative of a particular race, ethnicity, or cultural group?" another question reads.
- "Is your costume ‘funny'," another asked, "because you’re dressing up as someone from a particular race, gender, ethnicity, or culture?" Another question warned students to consider whether their costumes "have the potential to create an unsafe or hostile environment."
- "As always, we want to make sure that you all respect and take care of each other," the list concluded.
Princeton’s USG President Rachel Yee, who sent the email, did not return a Campus Reform request for comment.
Cultural Appropriation Turns Halloween Into A Nightmare - Halloween is again upon us. Across the United States, the prospect of frightening images have some pledging to skip the holiday or closely shield their children. It is not the scary decorations or costumes but “cultural appropriation” that has triggered a tradition of recrimination and anger. Colleges and universities have warned students not to dress as Indian chiefs or Mexican bandits, while parents have publicly debated whether they can allow their children to dress as the Black Panther or Moana without being accused of cultural appropriation or racism. “Cultural appropriation” has become a common term on campuses and is receiving broader meaning with each passing year. In Utah, a high school student was denounced for wearing a Chinese dress to her prom. White students wearing hoop earrings or dreadlocks have been denounced, while there have been protests over serving sushi at Oberlin College, holding yoga classes at the University of Ottawa or having a “Mexican food night” at Clemson University. The reason behind such limitless forms of cultural appropriation is its limitless meaning. Fordham University law professor Susan Scafidi has defined the term as encompassing the “unauthorized use of another culture’s dance, dress, music, language, folklore, cuisine, traditional medicine, religious symbols” and more. That makes Halloween a nightmarish orgy of cultural appropriation. Colleges and universities now post warnings not to dress as Native Americans, geishas, samurai, or other images. Syracuse University even threatened a few years ago to have its campus police force students to remove “offensive” costumes. There is remarkably little debate over such directives because many faculty members fear being labeled as racist or insensitive. What is increasingly rare is any dialogue or willingness to accept that people can hold good faith views on both sides. CNN political analyst Kirsten Powers dismissed the concerns of white people who object to being labeled racist over Halloween costumes, tweeting, “Dear white people who are upset that you can’t dress up as another race or culture for Halloween: your feelings don’t matter.” She went on to add that the only feelings that matter are of those who feel disrespected or mocked by appropriating their culture.
Over 50% Of College Students Afraid To Disagree With Peers, Professors - As more and more college professors express their social and political views in classrooms, students across the country are feeling increasingly afraid to disagree according to a survey of 800 full-time undergraduate college students, reported by the Wall Street Journal's James Freeman. When students were asked if they’ve had “any professors or course instructors that have used class time to express their own social or political beliefs that are completely unrelated to the subject of the course,” 52% of respondents said that this occurs “often,” while 47% responded, “not often.”A majority—53%—also reported that they often “felt intimidated” in sharing their ideas, opinions or beliefs in class because they were different from those of the professors. -WSJWhat's more, 54% of students say they are intimidated expressing themselves when their views conflict with those of their classmates.The survey, conducted by McLaughlin & Associates on behalf of Yale's William F. Buckley, Jr. Program (which counts Freeman among its directors), was undertaken between October 8th and 18th, and included students at both public and private four-year universities across the country. This is a problem, suggests Freeman - as unbiased teachers who formerly filled universities have been replaced by activists who "unfortunately appear to be just as political and overbearing as one would expect," and that "perhaps the actual parents who write checks can someday find some way to encourage more responsible behavior." Read the rest below via the Wall Street Journal:
Surgery students ‘losing dexterity to stitch patients’ A professor of surgery says students have spent so much time in front of screens and so little time using their hands that they have lost the dexterity for stitching or sewing up patients. Roger Kneebone, professor of surgical education at Imperial College, London, says young people have so little experience of craft skills that they struggle with anything practical. "It is important and an increasingly urgent issue," says Prof Kneebone, who warns medical students might have high academic grades but cannot cut or sew. "It is a concern of mine and my scientific colleagues that whereas in the past you could make the assumption that students would leave school able to do certain practical things - cutting things out, making things - that is no longer the case," says Prof Kneebone. The professor, who teaches surgery to medical students, says young people need to have a more rounded education, including creative and artistic subjects, where they learn to use their hands. Prof Kneebone says he has seen a decline in the manual dexterity of students over the past decade - which he says is a problem for surgeons, who need craftsmanship as well as academic knowledge. "An obvious example is of a surgeon needing some dexterity and skill in sewing or stitching," he says. Image copyright Getty Images "A lot of things are reduced to swiping on a two-dimensional flat screen," he says, which he argues takes away the experience of handling materials and developing physical skills. Such skills might once have been gained at school or at home, whether in cutting textiles, measuring ingredients, repairing something that's broken, learning woodwork or holding an instrument.
Amid global uproar, some US colleges rethink Saudi ties -— U.S. colleges and universities have received more than $350 million from the Saudi government this decade, yet some are rethinking their arrangements in the wake of the killing of a journalist that has ignited a global uproar against the oil-rich nation. The Associated Press analyzed federal data and found that at least $354 million from the Saudi government or institutions it controls has flowed to 37 American schools since 2011. Much of the money was provided through a scholarship program that covers tuition for Saudis studying in the U.S., but at least $62 million came through contracts or gifts from the kingdom’s nationally owned companies and research institutes, the AP found. Those benefiting the most from Saudi contracts include Northwestern University, which has received $14 million from a top Saudi research center since 2011, and the University of California, Los Angeles, which accepted $6 million from the same institute, known as the King Abdulaziz City for Science and Technology. Meanwhile, Saudi Arabia’s national oil company, Saudi Aramco, has channeled $20 million to American universities, including $9 million to Texas A&M University and $4 million to the Massachusetts Institute of Technology. A national chemical company known as SABIC steered another $8 million to U.S. schools. Although some of the contracts halted before last year, questions surrounding Saudi writer Jamal Khashoggi’s death at the Saudi Consulate in Istanbul have spurred some schools to reconsider current or future deals. On Oct. 22, MIT announced it will undertake a “swift, thorough reassessment” of the institute’s partnerships with Saudi Arabia, calling Khashoggi’s disappearance a “grave concern.” Richard Lester, an associate provost, said faculty who work with the kingdom can “make their own determinations as to the best path forward.” The institute pairs with Saudi universities on numerous research projects and has a long history working with Saudi Aramco. In March, the oil company pledged $25 million to MIT for research in areas including renewable energy and artificial intelligence. But many other schools have given no indications they’re reconsidering ties.
Education Corporation of America brazenly uses an Alabama court to delay lawsuits against it. Is this a great country or what? - Education Corporation of America (ECA), a for-profit college chain, brazenly filed a federal lawsuit in Alabama last month, asking Judge Abdul Kallon to put it into receivership and enjoin all litigation against it. ECA hopes to delay its creditors and other litigants while continuing to receive federal student-loan money. What a cocky, shameless and impudent strategy! Judge Kallon initially obliged ECA, ordering a halt to all litigation against ECA until October 29. Then, on October 29, the judge extended the injunction until November 5. Parties opposing ECA's Alabama litigation must find lawyers to represent them in Alabama, which will be costly. For example, Gleneagles Office, LLC, a Maryland corporation, filed a lawsuit in Maryland last month, seeking to collect almost $100,000 in back rent and late fees from Virginia College, which ECA owns. Judge Kallon's injunction, issued seven days after Gleneagles filed its lawsuit for back rent, halted that litigation. Gleneagles hired an Alabama law firm to oppose ECA's attempt to enjoin lawsuits against it. Gleneagles pointed out that ECA guaranteed the Virginia College lease and agreed that any dispute about the lease would be litigated in Maryland. Gleneagles also argued that Judge Kallon does not have jurisdiction over it. A Texas company also joined the Alabama lawsuit to oppose ECA's request for an injunction. The Texas company is landlord to a Brightwood College campus in Arlington, Texas. Brightwood is another college owned by ECA.
Drowning In Student Loans? Move To Maine! - In a bid to attract new residents, Maine has the ultimate incentive for those drowning in student loans; move there and they'll help pay them off. The catch? You have to make enough money to pay taxes - unless you're a STEM major! The Educational Opportunity Tax Credit program was originally established in 2008 as a retention tool targeting young professionals living in Maine, which allowed them to use their student loan payments as tax credits. Thanks to a labor shortage, however, the program's pitch evolved to lure qualified employees to the state. When you move to Maine, the money you spend toward paying your student loan debt each year is subtracted from your state income taxes.For instance, if you pay $1,800 toward your loan and owe the state $2,000 in taxes, you'll only end up paying Maine $200. -CNN"Over time, the employer community spoke out loud and clear that even if 100% of college graduates in Maine chose to stay here and work, that still (wouldn't) fulfill our workforce need," Nate Wildes, engagement director for "Live + Work in Maine," told CNN. "We need to import people," Wildes said. "We need to attract people from other states for our workforce"STEM majors, meanwhile, who specialized in Science, Technology, Engineering and Math, may even receive money back from Maine: STEM majors -- who study science, technology, engineering and math -- could even get a check back from the government -- if their loan payoff amount outweighs their taxes. Non-STEM majors fall under a non-refundable tax credit program, which means they'd owe $0 in state taxes under the same scenario. -CNN
These Candidates Want to Eliminate Your Student Loan Debt - If recent poll numbers from Harvard are accurate, young Americans are set to turn out for the 2018 midterms in record numbers. A survey of about 2,000 people between 18 and 29 conducted by the university’s Institute of Politics (IOP), found that 40 percent definitely planned to vote. Obviously saying "yes" on a survey takes less effort than waiting in a line on election day or wrangling with the US Post Office (which as a recent piece by New York Magazine illustrated, young people seem to have a ton of trouble with). But still, those numbers are high. If even 22 percent of eligible voters in that age cohort bothered to cast a ballot, it would be the highest turnout in more than three decades.In an interview, Abrams argued that today's young people are going through a similar realization to the one she had a decade ago—that the higher education system is rigged against them. In fact, she said that higher education was among the biggest issues for millennial voters like her—and that we're at a unique point in history, with 10 percent of members of Congress actually grappling with debt of their own. "I remember five or six years ago when this started to become a much bigger issue, we would hear things like, 'I got a part-time job job to pay for college,''" she told me. "That's no longer the case." In fact, according to money lender Laurel Road—which had market research firm Centiment poll 1,000 millennials who just graduated from or were currently enrolled in college—83 percent said the cost of college or the issue of student loan debt would influence how they voted in November.Women are likely to be on the forefront of this, as a record-breaking number of them are running for office, and they also bear nearly two-thirds of the $1.5 trillion in outstanding student loan debt. The gender component of this generational disaster has been visible on the campaign trail. For instance, there's Stacey Abrams, who's running for governor of Georgia and has been vocal about the fact that student loan-debt does not equally affect everyone. Alexandria Ocasio-Cortez, a progressive candidate running for congresswoman in the Bronx who also has outstanding loans, supports free college and cancelling student debt.
Anti-Pension Illinois Governor Made Billions Off Pensions -Earlier this year, the New York Times ran a front-page story about the outrageous pensions being paid out to a few Oregon retirees. The story, headlined “A $76,000 Monthly Pension: Why States and Cities Are Short on Cash,” featured a former college football coach collecting more than $550,000 a year, and a retired university president pocketing $913,000. The story feeds into a popular myth that retired public-sector workers are getting fat and rich thanks to ordinary taxpayers, who are shouldering the costs of pensions so generous they have triggered a cascade of fiscal crises.In reality, most retired public workers are living far more modestly. In 2014, the suburban Chicago Daily Herald looked at nine statewide and local pensions, including those enjoyed by teachers, legislators, and university professors. The average pensioner, they found, received $32,000 a year. The Illinois municipal retirement fund pays an average pension of only $22,284 a year, low enough for seniors to qualify for food stamps. Most retired civil servants, moreover, don’t receive Social Security. Despite the rhetoric, public workers are generally paid less than their private-sector counterparts, even when factoring in benefits — 11 to 12 percent less, according to a 2010 analysis of two decades of data from the Bureau of Labor Statistics. The Illinois Policy Institute, a conservative think tank with offices in Chicago and Springfield, is one of several organizations that have helped exaggerate the pension crisis myth. Its specialty has been manipulating the numbers to make the state’s pension problems seem even more outsized than they are. Illinois is facing, according to the Chicago Federal Reserve, a substantial unfunded $129 billion pension liability. But Ted Dabrowski, then the group’s vice president for policy, told me, “The state’s really looking at a deficit of $250 billion,” a figure he reached by making the unlikely assumption that the state invested only in low-yield bonds. Yet such research provides the ballast for attacks on pensions by organizations such as the Civic Committee of the Commercial Club of Chicago, a group made up of some of the city’s wealthy, politically active business leaders. The committee uses its influence to push a message that cutting public pensions is critical to Illinois’s well-being.
California Workers, Retirees Are Unwittingly Financing an Anti-Proposition 10 Campaign When San Francisco’s local government endorsed a state ballot initiative to permit rent control measures earlier this month, it appeared to be a victory for housing rights advocates in a city where stratospheric prices have sown social unrest and class animosity. The measure has found similar support from other California cities and unions representing public employees who can’t afford to live in cities where they work.Those advocates, however, may be unwittingly financing the opposition to the rent control measure. Documents reviewed by Capital & Main and MapLight reveal that a private equity giant with ties to President Donald Trump has boosted the campaign to defeat Proposition 10 with money taken from real estate investments funded by California public employees and the state university system.Campaign finance records show entities controlled by private equity giant Blackstone have been among the biggest sources of cash for opponents of the ballot measure. More than $5.6 million has come from a Blackstone holding company and four of its investment funds.But unlike typical corporate political donations, the Blackstone contributions didn’t come from the firm’s executives or its corporate treasury. Instead, they came from pools of capital from investors, which include dozens of state and local pension systems, as well as public university endowments. The move has been described as the equivalent of mutual fund executives taking money out of customers’ accounts to make political contributions. In effect, Blackstone’s maneuver means the opposition to the rent control initiative is being bankrolled by everyone from San Francisco municipal workers to university employees to public school teachers — all of whose retirement savings are in the Blackstone funds that have been tapped for the Proposition 10 fight.
A Sense of Alarm as Rural Hospitals Keep Closing - Hospitals are often thought of as the hubs of our health care system. But hospital closings are rising, particularly in some communities. “Options are dwindling for many rural families, and remote communities are hardest hit,” Beyond the potential health consequences for the people living nearby, hospital closings can exact an economic toll, and are associated with some states’ decisions not to expand Medicaid as part of the Affordable Care Act.Since 2010, nearly 90 rural hospitals have shut their doors. By one estimate, hundreds of other rural hospitals are at risk of doing so.In its June report to Congress, the Medicare Payment Advisory Commission found that of the 67 rural hospitals that closed since 2013, about one-third were more than 20 miles from the next closest hospital. A study published last year in Health Affairs by researchers from the University of Minnesota found that over half of rural counties now lack obstetric services. Another study, published in Health Services Research, showed that such closures increase the distance pregnant women must travel for delivery. And another published earlier this year in JAMA found that higher-risk, preterm births are more likely in counties without obstetric units. (Some hospitals close obstetric units without closing the entire hospital.) “What’s left are maternity care deserts in some of the most vulnerable communities, putting pregnant women and their babies at risk.” In July, after The New York Times wrote about the struggles of rural hospitals, some doctors responded by noting that rising malpractice premiums had made it, as one put it, “economically infeasible nowadays to practice obstetrics in rural areas.” Many other types of specialists tend to cluster around hospitals. When a hospital leaves a community, so can many of those specialists. Care for mental health and substance use are among those most likely to be in short supply after rural hospital closures. The closure of trauma centers has also accelerated since 2001, and disproportionately in rural areas, according to a study in Health Affairs. The resulting increased travel time for trauma cases heightens the risk of adverse outcomes, including death. Another study found that greater travel time to hospitals is associated with higher mortality rates for coronary artery bypass graft patients.In many communities, hospitals are among the largest employers. They also draw other businesses to an area, including those within health care and others that support it (like laundry and food services, or construction). A study in Health Services Research found that when a community loses its only hospital, per capita income falls by about 4 percent, and the unemployment increases by 1.6 percentage points.
Black doctor who tried to help sick passenger claims flight attendants didn’t trust her credentials A physician says she was subject to racial discrimination by two flight attendants on Tuesday as she tried to help a sick fellow passenger on a Delta Air Lines flight. Dr. Fatima Cody Stanford says she was on a flight home to Boston from Indianapolis when she said she noticed a woman next to her was hyperventilating. Stanford, who is a doctor specializing in obesity at Massachusetts General Hospital and teaches at Harvard Medical School, said she was already helping the sick passenger when a flight attendant approached her and asked if she was a doctor. Before even being asked, Stanford said she showed her medical license to a flight attendant — and was not believed. As she worked to calm the panic-stricken passenger, Stanford said a second flight attendant asked for a clarification and questioned if she was "a real M.D." "I was infuriated by the whole experience," she told NBC News on Thursday. Stanford said she found the entire encounter remarkable because she had just attended a conference on medical bias on Oct. 19 at which she interviewed another doctor, Tamika Cross, who had a similar experience in October 2016 aboard another Delta flight. Stanford said she'd invited Cross to be a guest speaker at a conference two weeks ago about bias in medicine and finds the two incidents eerily similar. Cross herself took to Instagram on Wednesday and posed the question: "Where have we come since 2016?" "I found it uncanny the fact that this happened almost two years to the day as Dr. Cross," Stanford said Thursday.
102 Million in US Have Pre-existing Conditions, Study Says. Here's Why That Figure Is Suddenly Important - More than 100 million Americans live with pre-existing conditions and are not enrolled in a public health insurance program such as Medicaid or Medicare. And with the 2018 midterm elections just weeks away, those numbers could signal how voters cast their ballots, with Congress debating whether or not to repeal of the Affordable Care Act.If the ACA, also known as Obamacare, is repealed, a total of 102 million individuals—not to mention their immediate families—could face higher health insurance premiums and significant out-of-pocket costs related to their medical care, according to a new study from national health care research and consulting firm Avalere.A pre-existing condition includes most major health conditions, including cardiovascular disease, diabetes, and obesity, as well as a variety of mental health conditions and even arthritis and pregnancy. If you think you have a pre-existing condition, well, you just might. It’s a sweeping categorization that—prior to the ACA’s passage—gave insurers cover to exclude individuals from health insurance coverage.“Protections for pre-existing conditions are the only reason some Americans are able to afford health insurance,” Avalere’s director Chris Sloan said in a statement.President Donald Trump tweeted about the issue on Wednesday, claiming that Republicans will protect those individuals living with pre-existing conditions.Republicans will totally protect people with Pre-Existing Conditions, Democrats will not! Vote Republican.— Donald J. Trump (@realDonaldTrump) October 24, 2018The president’s claim is a strange one, given that Republican lawmakers have been the ones fighting to actively dismantle the Affordable Care Act—not Democrats. It seems possible the Trump administration’s war on Obamacare could be a boon for Democrats come the midterm elections on Tuesday, November 6.
Judges Shouldn’t Have the Power to Halt Laws Nationwide --That’s the headline to an article of mine, co-authored with Sam Bray of Notre Dame Law School and published today in The Atlantic. We highlight the disquieting possibility that a single district court in Texas might soon enter an injunction prohibiting the enforcement of all or part of the Affordable Care Act across the entire country.Something is very wrong with this picture. Under the Constitution, the federal courts are vested with the “judicial Power,” which has traditionally been understood to limit them to resolving disputes between the parties who appear before them. That makes sense in a democracy: Unelected judges shouldn’t adjudicate the rights of non-parties or referee abstract political fights.In a quiet shift over the last 60 years, however, the courts have gradually assumed the power to enter national injunctions against federal statutes and regulations, at least under some (not very well-defined) circumstances. The trend has accelerated dramatically in the last three-and-a-half years, as claims of executive overreach have proliferated.The Supreme Court has not expressly ruled on the legality of these national injunctions, though it has recently shown some interest in the issue. In our judgment, it should curtail the practice.The point is not a partisan one. (One of us is a Republican, the other a Democrat.) Before courts entered national injunctions against the Trump administration, they used them to thwart the Obama administration’s rule for overtime pay and its signature immigration policy, Deferred Action for Childhood Arrivals. National injunctions are equal opportunity offenders.
Here’s what happened after California got rid of personal belief exemptions for childhood vaccines Health authorities in California have more power to insist that a dog is vaccinated against rabies than to ensure that a child enrolled in public school is vaccinated against measles. That’s just one of the frustrations faced by health officials in the first year after California did away with “personal belief exemptions” that allowed parents to send their kids to school unvaccinated, according to a study published Monday in the journal Pediatrics. In the 2014-15 school year, when parents could still opt out of vaccinations for any reason they chose, only 90.4% of kindergartners in California public schools were fully immunized. That’s below the 94% threshold needed to establish community immunity for measles, according to experts. Gaps like that helped persuade state lawmakers to pass Senate Bill 277, which was signed into law in 2015. It requires every child taught in public school classrooms to be fully immunized against 10 diseases: diphtheria, hepatitis B, haemophilus influenzae Type B, measles, mumps, pertussis (a.k.a. whooping cough), poliomyelitis, rubella, tetanus and varicella (a.k.a. chickenpox) — unless a doctor provides a medical reason for why it would be unsafe to do so. It was the first time in 35 years that a state had gotten rid of personal belief exemptions, and it made California only the third state — along with Mississippi and West Virginia — to have such a strict requirement. By the most basic measure, it worked. In the 2017-18 school year, 95.1% of kindergartners had all of their immunizations, according to the California Department of Public Health. However, the elimination of personal belief exemptions was offset to some degree by an increase in medical exemptions. Prior to the passage of SB 277, only 0.2% of students had a medical exemption, the health department said. By 2017-18, that figure had more than tripled, to 0.7%. Part of that increase was legitimate, the study authors explained: Some parents whose children could have qualified for medical exemptions obtained personal belief exemptions instead because they were easier to get. But many of the additional medical exemptions were bogus, health officials suspect. Though they’d like to crack down and see more kids get vaccinated, there are numerous obstacles in their way, new study revealed.
FDA Grants 'Breakthrough Therapy' Status to Psychoactive Psilocybin Mushrooms, Says Startup - Various parts of the cannabis plant have already received full FDA approval; a drug consisting of cannabidiol, better known as CBD, has already been approved to treat two rare forms of epilepsy. Researchers have been pushing for years for relaxed legal status to study the possible medicinal benefits of hallucinogenic drugs, and now the FDA has given psilocybin—magic mushrooms—a conditional form of research approval, according to Compass Pathways, the company granted that approval. Allowing researchers to study the effects of otherwise banned substances is tricky; the DEA's legal definition of schedule 1 drugs requires that they have "no accepted medical use." That's an immediate barrier to study, and also throws the drug into question if an "accepted medical use" is discovered. Can the drug even be a schedule 1 drug in that case? The DEA has generally refused to remove substances from the list, regardless of research, though CBD—which is not psychoactive at all—was recently rescheduled. Anyway! Psilocybin has been casually used both recreationally and medicinally for decades, and international studies have indicated that controlled, somewhat low-level doses of psilocybin can be useful in treating depression. Earlier this month, researchers at Johns Hopkins wrote an analysis of existing studies, recommending that psilocybin be re-classified to enable more thorough study. Compass Pathways says they have received designation as a Breakthrough Therapy treatment. That's the official name (rather than a hype-filled description) for an FDA program designed to expedite the approval process for drugs that have proved promising in treating serious conditions. As part of that designation, Compass Pathways will be able to conduct the largest North American clinical trial of psilocybin ever done: 216 patients with treatment-resistant depression.
Stoned Driving On The Rise As Marijuana Overtakes Alcohol As Most Commonly Detected Intoxicant --Marijuana has overtaken alcohol as the most commonly detected intoxicant found in US drivers, according to Science Daily, citing a new article published in the Journal of Drug Policy Analysis. According to the report, approximately 13% of drivers pulled over by police test positive for marijuana, compared to 8% with a measurable amount of alcohol (measurable, not necessarily over the limit). That said, cannabis remains detectable for much longer than alcohol - which makes it difficult to gauge the number of actively stoned drivers vs. drunk drivers. The average drunk driver (BAC > 0.01%) is around 6.5 times more likely to crash than someone driving sober, however those with a BAC of .09% or more are 11 times more likely to be involved in a fatal crash as a sober driver. Drivers with a BAC of 0.125% are 30 times more likely to be involved in a fatal crash, while those driving plastered with a BAC of 0.22% or higher are 380 times more likely to be involved in a fatal crash. Age matters too. A 16-year-old male with a BAC of .09% is five times as likely as the average driver with the same BAC. Overall, drivers with a BAC above 0.08% are responsible for over 80% of all deaths involving detectable amounts of alcohol according to the report, citing a 2014 NHTSA study. The effects of stoned driving, meanwhile, is much more difficult to gauge - however "three relevant facts are clear" according to the report; driving under the influence of cannabis adds to crash risk, especially in combination with alcohol and other drugs; the risk of driving under the influence of cannabis alone, even at high levels, is much lower than the risk of driving under the influence of high levels of alcohol; and the pharmacokinetics of cannabis make it difficult to to empirically demonstrate impairment. Further, drivers subjectively under the influence of cannabis are generally aware that they are impaired and adjust their driving accordingly by taking fewer risks and acting less aggressively–indeed, there is evidence they may overestimate their impairment, which is the opposite reaction of those under the influence of alcohol.
Pressure mounts as fentanyl from China floods into the US - Pressure is mounting on China as many believe it is failing to do enough to stop the flood of fentanyl into the United States – contributing to the opioid epidemic which claimed more than 27,000 American lives in 2017 alone. In late October, US President Donald Trump signed into law new legislation to address the problem and the US Department of Justice hosted its first “National Opioid Summit” on October 25, with US Attorney General Jeff Sessions delivering the keynote address. Trump also moved to eliminate a loophole that has previously enabled Chinese drug dealers and distributors to mail their drugs into the US without giving details on either the sender or the contents of the package. This did not apply to packages handled by FedEx, UPS and other private carriers as they must provide such information in advance to customs inspectors.Prior to the summit, US Deputy Attorney General Rod Rosenstein said in an interview with the Los Angeles Times that “this is a real crisis. The Chinese government has the ability to stop this if they want to. We believe they should want to do that.”A growing number of US politicians agree that it is now time to take the necessary steps to ensure the arrest and punishment of people working in Chinese drug labs and operating huge distribution channels that lead to the deaths of thousands of Americans. As well as the steps being taken by the Trump administration to address the problem, New Jersey Congressman Jeff Smith (R), who chairs the Global Health Subcommittee, has introduced legislation aimed directly at China. Smith is making it clear that further Congressional action is urgently needed to get Beijing to exercise more control over its huge underground industry.
The Children The Opioid Crisis Has Left Behind ― There were about three agonizing weeks between the moment Jodie Hicks called child protective services on her son and the moment her granddaughter, Tessa, was taken out of his care. She didn’t want to make the call. What kind of mother calls the authorities on her son? And worse, what if her call made Tessa’s situation more difficult? She knew her son would be furious when he found out about it. If authorities didn’t find anything wrong at his home and he cut off contact, Tessa would be left to languish. But she had seen what went on in her drug-using son’s house and felt she had no other options. Her granddaughter, 4, was living in a filthy place where drug users came and went. She spent most of her time alone. She wasn’t properly being cared for. . Those weeks ― during which, Hicks said, her son quickly figured out she had made the call and inundated her with angry messages ― she had no sense of what Tessa could be facing. “There’s this little being there, who has no control over her life and is being subjected to things she has no say over,” Hicks said of her granddaughter. “Anything can happen during that time.” Tessa ― now 7 and in the first grade ― is part of a generation of children who are having unprecedented contact with child welfare system as the opioid crisis continues to ravage the lives of the adults around them. In Indiana, where Tessa lives, the situation is especially dire.
How to Have a Mail-Order Abortion - Women in the U.S. who have trouble accessing an abortion—because of cost, geography, waiting periods, or other reasons—now have another option: the mail. Aid Access, an online organization that allows women to order abortion-inducing medications shipped directly to their home, has been discreetly operating in the United States for the last six months, according to the Atlantic, serving an estimated 600 women so far. Aid Access isn’t a new idea—it’s a spinoff of Women on Web, a site founded in 2005 by Dutch physician Rebecca Gomperts to supply abortion-inducing drugs to women in countries where abortion is outlawed—but it is new to the U.S., offering a more reliable alternative to shady online sites already selling the drugs. Here’s everything you need to know about the service, also founded by Gomperts, that promises American women access to a safe abortion by mail.
‘The Blowj*b Paper:’ Scientists Processed 109 Hours of Oral Sex to Develop an AI that Sucks D*ck - The Autoblow AI, a sex toy made for penis-possessing individuals, consists of a rubbery sleeve and a motor housed inside a canister that aims to simulate oral sex. It launched its Indiegogo campaign last week and quickly hit its goal of $50,000. Its biggest advertised advantage over the original model from 2014, the Autoblow 2, is a machine learning algorithm that “continually changes technique” in order to pleasure the user in new and exciting ways. Instead of repetitive, mechanical motions, this "AI mode" promises to replicate the nuanced and unpredictable motions of a real, human blowjob. In order to do this, the company asked a team of six people to watch and annotate 109 hours of porn and hired machine learning engineers to create a model to take all that data and translate it into what the toy does. This entire process took three years. The result of this research is the Blowjob Paper, a (definitely not peer-reviewed) study that’s full of sexy—or at least, sexually-themed—algorithmic research: “In this work, we seek to quantify the ‘common’ or ‘typical’ movements involved in oral sex performed on males,” the paper begins. “ To do so, we analyze a dataset containing over 108 hours of pornographic video, annotated at each frame with the position of the lips along the shaft of the penis. We use quantization techniques to discover sixteen distinct motions, and using these motions we design and evaluate a system that procedurally generates realistic movement sequences using deep learning. We quantitatively show that this system is superior to simple Markov Chain techniques.”
Guns Send over 8,000 US Kids to ER Each Year, Analysis Says - Gun injuries, including many from assaults, sent 75,000 U.S. children and teens to emergency rooms over nine years at a cost of almost $3 billion, a first-of-its-kind study found.Researchers called it the first nationally representative study on ER visits for gun injuries among U.S. kids. They found that more than one-third of the wounded children were hospitalized and 6 percent died. Injuries declined during most of the 2006-14 study, but there was an upswing in the final year.The researchers found that 11 of every 100,000 children and teens treated in U.S. emergency rooms have gun-related injuries. That amounts to about 8,300 kids each year. The scope of the problem is broader though; the study doesn’t include kids killed or injured by gunshots who never made it to the hospital, nor does it count costs for gunshot patients after they’re sent home.
Mystery Polio-Like Illness Spreading; Baffled CDC Under Fire; Doesn't Appear To Be Transmissible - - The CDC has confirmed another 10 cases of Acute Flaccid Myelitis (AFM), the mystery illness that's been paralyzing children across the country, bringing this year's total number of cases to 72. AFM has been reported in 24 states, while there have been 396 confirmed cases from August 2014 through October 2018 according to the CDC. While the CDC still doesn't know the cause of AFM, the risk factors, long-term effects, or why the number of cases spiked beginning in 2014, the agency has learned the following:
- Most patients are children.
- The patients’ symptoms have been most similar to complications of infection with certain viruses, including poliovirus, non-polio enteroviruses, adenoviruses, and West Nile virus.
- All of the AFM cases have tested negative for poliovirus.
- Enteroviruses most commonly cause mild illness. They can also cause neurologic illness, such as meningitis, encephalitis, and AFM, but these are rare.
- CDC has tested many different specimens from AFM patients for a wide range of pathogens (germs) that can cause AFM. To date, no pathogen (germ) has been consistently detected in the patients’ spinal fluid; a pathogen detected in the spinal fluid would be good evidence to indicate the cause of AFM since this condition affects the spinal cord.
- The increase in AFM cases in 2014 coincided with a national outbreak of severe respiratory illness among people caused by enterovirus D68 (EV-D68). Among the people confirmed with AFM, CDC did not consistently detect EV-D68 in every patient. During 2015, CDC did not receive information about large EV-D68 outbreaks in the United States, and laboratories reported only limited EV-D68 detections to CDC’s National Enterovirus Surveillance System (NESS). During 2016, CDC was informed of a few localized clusters in the United States. .
In a CBS This Morning interview Tuesday, CDC director Dr. Robert Redfield said that while the agency still doesn't know what causes AFM, "it doesn't appear to be transmissible from human to human," adding "[the] CDC's been working very hard on this, since 2014, to try to understand causation and etiology. As we sit here today, we don't have understanding of the cause. We are, you know, continuing to strengthen our efforts, working in partnership with state and territorial health departments, and academic experts to try to figure this out."
The Next Generation Of Warfare- Genetically-Engineered Viruses - Genetically engineered viruses could very well become the next generation of warfare. Deadly viruses modified in labs could be released eliminating entire communities of people as they infect making them a valuable asset to militaries worldwide. As dystopian as that sounds, the Defense Advanced Research Projects Agency (DARPA) is already working on a project called Insect Allies which will use insects to infect crops with genetically modified viruses that edit the crops’ genetic profile to make them more resilient Joe Joseph of The Daily Sheeple said a quick Google search would give you enough information to let you know how horrific this kind of technology can be. “…and you’ll find it fascinating just at how unbelievable a weapon this could be, how unintentionally mistakes can be made that can cause irreversible damage…irreparable damage…to the human race. And I mean, FAST!” Joseph said. “A gene drive…if let’s just say there’s a mistake, you could feasibly wipe out the human race in a very very short period of time. It’s an unbelievable tool at the disposal of madmen.” –SHTFPlan DARPA attempted to squash rising fears about their Insect Allies project and issue reassurances after German and French scientists voiced questions and concerns about the program’s efficacy earlier this month. Those scientists also suggested that it could be “widely perceived as an effort to develop biological agents for hostile purposes and their means of delivery, which—if true—would constitute a breach of the Biological Weapons Convention.” If the know-how and means exist to transmit genetic viruses that supposedly create beneficial crop mutations, the opposite will also be possible. DARPA will be able to use insects to deliver gene editing viruses that destroy crops, ruin harvests and adversely affect the wider ecosystem, RT accurately pointed out. This means that those who fear this program are not far off at all for doing so. Another project receiving DARPA funding involves releasing genetically modified mosquitoes in the Florida Keys area to transmit a sterilizing genetic virus to their malaria-carrying counterparts. Apart from the unknown effects upon the wider ecosystem, the knowledge gleaned from such research could one day make it possible for a state, a non-state actor, or a non-state actor working on behalf of a state to accidentally or deliberately use insect vectors to unleash a variety of biological agents and genetic viruses upon an unsuspecting population.
EPA Continues to Approve Toxic PFAS Chemicals Despite Widespread Contamination - - Even as the Environmental Protection Agency has been trumpeting its efforts to find and clean up contamination from industrial chemicals known as PFAS, it has been allowing new chemicals in this class to enter into commerce, according to data from the agency. The EPA has allowed more than 100 new PFAS compounds to be made and imported in large quantities in the U.S. after it became aware of the health risks associated with them, and many more have entered commerce through loopholes that allow them to be omitted from the official inventory of chemicals and to bypass a basic safety review. Since 2002, the agency has allowed 112 new PFAS chemicals to be made or imported in very large quantities, according to a list of compounds kept by the agency known as the Chemical Data Reporting database, or CDR. Companies have to report a chemical on the CDR if they make 25,000 pounds or more of it in a year in a single location. At that point, the agency was already working on a risk assessment of PFOA, which it released the next year with the grim warning that the chemical “raised a number of potential toxicity concerns,” and required additional study. “To ensure consumers are protected from any potential risks, the Agency will be conducting its most extensive scientific assessment ever undertaken on this type of chemical,” the EPA assistant administrator said at the time. The EPA has had clear evidence of the dangers of PFOA and PFOS since at least 2000, when 3M sent the agency results of its internal research, showing that the chemicals accumulated in blood and caused health problems in people and animals. 3M, which first produced PFOS and PFOA, shared documentation of the harms of both chemicals, including two troubling monkey studies in which the exposed animals had immune impacts and some died. The next year, attorney Rob Bilott, who was suing DuPont on behalf a West Virginia farmer whose entire herd of cattle had died after PFOA contaminated their drinking water, mailed a packet of more than 100 documents to the EPA detailing evidence of the association between PFOA exposure and tumors, hormonal changes, and reproductive issues and other health problems.
'Clear evidence' of mobile phone radiation link to cancers in rats, US health agency concludes - A long-running US study on the effects of radio wave radiation, the sort emitted by mobile phones, has found “clear evidence” of high levels of exposure and heart cancers in male rats.Some evidence of links to brain and adrenal gland tumours was also found in male rats, but in female rodents and male mice signs of cancer weren’t clear, the National Toxicology Programme (NTP) concluded in its final report on Thursday. The programme is run by the US Department of Health and Human Services and was tasked with reviewing the toxicity of mobile phone radiation in response to the devices’ near ubiquity in modern life. Radiation exposure in the trial was well above the levels most humans would experience, but researchers said the findings show the link between radio frequencies and tumours – at least for rats – “is real”. “The exposures used in the studies cannot be compared directly to the exposure that humans experience when using a cell phone,” said Dr John Bucher, a senior scientist at the NTP. “In our studies, rats and mice received radio frequency radiation across their whole bodies. By contrast, people are mostly exposed in specific local tissues close to where they hold the phone.“In addition, the exposure levels and durations in our studies were greater than what people experience.”But he added: “We believe that the link between radio frequency radiation and tumours in male rats is real, and the external experts agreed.”The studies took a decade to complete and cost more than $30m (£23m) to run. The animals’ tissues were combed over for signs of tumours after experiencing nine hours a day of radiation for most of their natural lives, beginning in the womb in the case of the rats. This is the most controlled study on exposure to date, and it raises many questions about the conclusions for humans – particularly as the lowest exposure levels were at the maximum levels allowed for mobile phones.
San Francisco’s planned $8 billion neighborhood has a radioactive past, and it may put people at a higher risk of cancer than experts thought - The news keeps getting worse for workers and future residents of the as-yet-undeveloped areas at the San Francisco Shipyard — a former nuclear testing site that is now being transformed into an $8 billion neighborhood. Following the discovery of a dangerous radioactive deck marker -near the site's luxury condos, experts are now claiming that the site's poor safety standards could also subject workers and residents to a higher risk of cancer. The US Navy is spearheading a massive cleanup effort led by the US Navy, which tasked a contractor, Tetra Tech, with removing radioactive contaminants. In May, two former Tetra Tech employees were sentenced to eight months in prison for falsifying soil tests.Now, a team of academic researchers claims that the standards used by the Navy to evaluate the site are "grossly outdated," aligning with the standards used by the Environment Protection Agency for buildings in 1974 and for soil in 1991, as the San Francisco Chronicle first reported. These standards have become far more restrictive over time.The EPA has developed a threshold for the amount of chemicals allowed in an exposure area, and the researchers concluded that the Navy and Tetra Tech followed cleanup standards that were well below these levels.In their new report, they contend that the Navy's cleanup standard for radium — the toxic substance that's responsible for 99% of the site's contamination — is almost 900 times higher than the level permitted by the EPA. This could lead to a cancer risk that's much greater than previously determined.
Children choke on toxic air in the shadow of Delhi’s burning mountain of garbage - Monu Yadav is 11 years old. He lives in Bhalswa, an area in North Delhi best known for a landfill spread over 40 acres, where garbage has piled up 164 feet. On October 20, the mountain caught fire. It took four days to bring it under control. Ten days later, smoke continued to rise from the garbage mound, contributing to the worsening air quality in the area. Delhi is currently the world’s most polluted city, with levels of particulate matter reaching alarming rates – PM 2.5 levels touched 217, and PM 10 touched 368 on November 1, far exceeding the permissible limits of 40 and 60. Fires are a regular occurrence in Bhalswa. They are caused by an accretion and leakage of methane gas from the landfill. “Sometimes when we light a match on the landfill, big flames come out of it,” said Yadav. “In school, my teacher asked me how I live here. I told her I am used to it.” Toxic air is just one of the hazards that the 40,000 residents of Bhalswa live with. The narrow lanes of the jhuggi-jhopdi or slum cluster are bordered with open drains, which see a constant flow of leachate that seeps out from the landfill. “Every evening at 5 pm, trucks come in with garbage,” said Paras Nath, 36, a vegetable vendor who lives just yards away from the slope of the landfill. “They come at such high speed, releasing dust, we have to lock our doors and windows. The dumping goes on till late at night. If the wind is too much, then the garbage topples and falls right into our house.” All that separates his house from the dump is a three-foot high wall painted with graffiti and slogans about the right to clean air and clean toilets. “There is not a single person here who has not suffered from tuberculosis,” “The survival rate of patients in tuberculosis in this area is very low,” said Dr Chandra Shekhar. At least seven of his patients had a drug resistant strain, which is common in areas with weak tuberculosis control programmes.
WHO says air pollution kills 600,000 children every year - (Reuters) - Air pollution kills an estimated 600,000 children every year and causes symptoms ranging from loss of intelligence to obesity and ear infections, but there is a limited amount parents can do, a World Health Organization report said on Monday. Parents should try to avoid household air pollution by using less polluting fuels for cooking and heating and not smoking, but to reduce child exposure to ambient pollution they need to lobby politicians to clean up the environment, WHO experts said. "Polluted air is poisoning millions of children and ruining their lives," WHO Director-General Tedros Adhanom Ghebreyesus said in a statement. Large parts of Asia, Africa and Latin America are among the worst affected. “This is inexcusable. Every child should be able to breathe clean air so they can grow and fulfil their full potential."The WHO report, "Prescribing clean air", summarised the latest scientific knowledge on the effect on children of air pollution, which affects about 93 percent of children globally.Maria Neira, WHO's head of environmental determinants of health, said the worrying findings highlighted in the study, including evidence of pollution causing stillbirth and preterm birth, as well as diseases into adulthood, should lead to policy changes globally. "Something that is critical as well is this issue of the neuro-development," she said. "Imagine that our children will have less cognitive IQ. We are talking about putting at risk a new generation of having a reduced IQ. This is not only new but terribly shocking." There was clear, consistent evidence of an association between ambient air pollution and otitis media, or ear infections, the study said, as well as some evidence of it causing obesity and insulin resistance in children. Air pollution can also cause childhood cancers, asthma, poor lung function, pneumonia and other types of acute lower respiratory infection, the report said.
It's Time to Stop Paying for Pesticides With Our Health: Organic for All Must Become the Norm - A groundbreaking new study in the prestigious Journal of the American Medical Association reveals that you can cut your cancer risk by eating an organic diet. The findings are dramatic. In a study that followed nearly 70,000 people, those who ate the most organic food lowered their overall risk of developing cancer by 25 percent. The relationship was strongest for two types of cancer: participants who frequently ate organic had 76 percent fewer lymphomas and 34 percent fewer breast cancers that developed after menopause.This research confirms what is intuitive and supports what the President's Cancer Panel told us nearly a decade ago: reducing exposure to cancer-causing chemicals, including pesticides, reduces your risk of cancer.Here's why this is intuitive. First, we know that eating organic foods reduces our exposure to pesticides. Research has shown that the level of pesticides we can measure in people's bodies drops significantly within days of switching from a non-organic to an organic diet.And second, we know that many of the pesticides commonly used on U.S. farms and found as residues on our food are associated with cancers and a host of other health problems, from ADHD and autism to infertility and Alzheimer's.More than 90 percent of Americans have detectable pesticides in our bodies. The food we eat is the most significant way we're exposed for those of us who don't work with pesticides at our jobs. Farmers, farmworkers and groundskeepers are most at risk of exposure, like Dewayne Johnson, who just won a lawsuit against Monsanto linking his occupational glyphosate exposure to his non-Hodgkin's lymphoma.Some of us are more vulnerable than others. Infants are born pre-polluted with pesticides in the U.S., and nearly all children are exposed to pesticides through the foods they eat. Infants and children have unique susceptibilities to the harms of pesticides because their brains and bodies are developing so rapidly. Early life exposure can impact children for life. It can permanently decrease a child's IQ, increase the risk of autism or lead to cancers later in life. Another new study calls for a ban on all organophosphate pesticides, likechlorpyrifos, because of their link to brain damage in children.
Zika Spraying Could Wipe Out 13 Percent of U.S. Honeybee Colonies - Pesticides sprayed in the southern U.S. to stop the spread of the Zika virus could turn the nation's honeybees into collateral damage.That is the warning issued by a study from the University of Exeter and the University of California, Berkeleypublished Friday in the Journal of Agricultural Research. The study found that 13 percent of U.S. honeybee keepers are at risk of losing their colonies from Zika spraying."A colony unexpectedly exposed to pesticide spraying for mosquitoes would almost certainly be wiped out," study lead author Lewis Bartlett of the University of Exeter's Center for Ecology and Conservation said in auniversity press release. "Beekeepers in the U.S. move their colonies around to support farmers, so a beekeeper with all their bees in one area at a given time could lose them all."The study was prompted by 2016 reports that the spraying of an organophosphate pesticide to stop the spread of Zika in South Carolina killed millions of honeybees. At the time of the spraying, there had been 43 cases of Zika in the state, but none of them had been contracted from in-state mosquitoes. Residents said they were given less than 10 hours notice of the spraying.Researchers wanted to see if other honeybee colonies could be impacted by similar incidents, so they compared data on the density of honeybee colonies with areas at risk from Zika. They found that the places best for the bees also had favorable conditions for virus that causes brain defects in unborn children. Those regions include Florida, the Gulf Coast and potentially California's Central Valley.While Florida has a system in place to control mosquitoes while protecting bees and other pollinators, other states are less prepared. This could be devastating both for bees and their keepers.
Judge rules in favor of Trump administration in California federal lands case - The Trump administration scored a legal victory on Thursday when a federal judge in California blocked a state law that sought to limit the transfer of federal lands.The California legislature passed Senate Bill 50, which would give the California State Lands Commission the first right of refusal over government proposals to sell federal land, in 2017. Environmentalists encouraged its adoption to allay fears that the Trump administration would sell large swaths of federal land to be used for drilling, mining or real estate development.But the Justice Department sued the state in April, with federal officials claiming that the law already slowed down a number of planned transfers. In its ruling handed down Thursday in the U.S. District Court for the Eastern District of California, Judge William Shubb said the California law violated the Constitution because it interferes with the federal government’s right to regulate the sale of federal property.
Scientists Warn That World’s Wilderness Areas Are Disappearing — Scientists are warning that if human beings continue to mine the world’s wildernesses for resources and convert them into cities and farms at the pace of the previous century, the planet’s few remaining wild places could disappear in decades.Today, more than 77 percent of land on earth, excluding Antarctica, has been modified by human industry, according to a study published Wednesday in the journal Nature, up from just 15 percent a century ago.The study, led by researchers from the University of Queensland in Australia and the Wildlife Conservation Society in New York, paints the first global picture of the threat to the world’s remaining wildernesses — and the image is bleak. “We’re on a threshold where whole systems could collapse and the consequences of that would be catastrophic,” said James R. Allan, one of the study’s authors. Mr. Allan and his colleagues urged the participants of a United Nations conference on biological diversity, scheduled for next month in Egypt, to protect all of the world’s remaining wilderness areas.“We cannot afford to lose more,” he said. “We must save it in its entirety.” The parts of the world most in need of protecting are in some of the largest and most powerful nations, the study found. More than 70 percent of wilderness areas can be found in Russia, Canada, Australia, the United States and Brazil. Wilderness, the study’s authors said, is defined as an area not subject to direct human use.These areas are the only places on earth that have natural levels of biodiversity, and can continue to sustain plant and animal species on an evolutionary time scale. Moreover, these spots often act as the world’s lungs, storing carbon dioxide that would otherwise be released into the atmosphere.
5 Countries Control 70% of the World’s Remaining Wilderness - This week began with the disturbing news that human activity has caused a 60 percent decline in wildlife since 1970. Now, a group of researchers from the University of Queensland and the Wildlife Conservation Society (WCS) have released a stunning map showing that just five countries are home to more than 70 percent of the world's last, undisturbed wilderness areas. Those five countries? The U.S., Brazil, Canada, Russia and Australia. The five countries that control most remaining wilderness area are Brazil, the U.S., Canada, Russia and Australia. In a series of studies over two years, the researchers found that more than 77 percent of land, excludingAntarctica, and 87 percent of oceans, has been modified by human activity in some way. "In this new analysis we've created a global map and intersected it with national borders to ask: who is responsible?" lead author and University of Queensland conservation scientist James Watson told The Guardian. The answer is that just 20 countries control 94 percent of the remaining wilderness, excluding Antarctica and the open ocean. The researchers published their map in a "Comment" published in Nature Wednesday, in which they urge the international community to protect these remaining wilderness areas when it comes together for the 14th Conference of the Parties to the Convention on Biological Diversity (CBD) in Cairo this month. "We urge participants at the meeting to include a mandated target for wilderness conservation. In our view, a bold yet achievable target is to define and conserve 100% of all remaining intact ecosystems," the authors wrote. However, their call comes at a perilous political moment in many of the countries responsible for these last wildernesses. Brazil's Amazon, for example, is newly under threat by the election of far-right politician Jair Bolsonaro, who has promised to collapse the country's environment and agriculture ministry and open more of the rainforest to farming and mining. Most of the wild land in the U.S. is in the Arctic tundra of Alaska, and the Trump administration has just approved a controversial oil drilling island and underwater pipeline that could put Arctic ecosystems and communities at risk.
The Amazon rainforest faces ‘genocide’ under Brazil’s new far-right president - It is not hyperbole to wonder if the outcome of Sunday’s presidential election in Brazil is a planetary game over when it comes to climate change. Proto-fascist Jair Bolsonaro handily won the presidency on Sunday on a platform of xenophobia, homophobia, and a promise to silence political dissidents. It’s a dark day for the world’s ninth-biggest economy and the 47 million Brazilians who didn’t vote for Bolsonaro or subscribe to his views. But his plans for the Amazon are what will reverberate far beyond the country’s borders and well into the future. “[Bolsonaro] wants to massacre our diversity sexual, gender, cultural, racial, and biological,” Felipe Milanez, a humanities and political ecology expert at Brazil’s Universidade Federal da Bahia, told Earther. “It means turning the Amazon into a huge soya field and killing all the diversity.” The Washington Post reports that Bolsonaro has a plan to privatize vast swaths of the forest, turning it over to agribusiness and mining. In addition, he would like to expand hydropower and nuclear power in the region, and has indicated he will not let outside environmental groups have much sway over conservation. He also said he would like to pull Brazil out of the Paris Agreement, meaning two of the world’s six largest carbon emitters will have potentially turned their back on international climate action. His policies of environmental and cultural violence could work in tandem in the Amazon to devastating effect. The forest is already in a weakened state after decades of logging, extraction, and agribusiness interests taking their toll. And while previous governments have paid lip service to protecting the region, degradation has continued. How Bolsonaro proceeds has the potential to ripple across the Amazon and its people. Brazil is home to the largest chunk of Earth’s largest rainforest, but that forest stretches across eight other countries. “The boundaries of ecosystems don’t follow political boundaries just like the atmosphere doesn’t,” Adrian Forsyth, the founder of the Andes Amazon Fund who has spent decades studying the region, told Earther. “If you dam the Amazon or disrupt the forest, you will destroy the food base for people in other countries.”
Mountain birds on ‘escalator to extinction’ as planet warms — A meticulous re-creation of a 3-decade-old study of birds on a mountainside in Peru has given scientists a rare chance to prove how the changing climate is pushing species out of the places they are best adapted to. Surveys of more than 400 species of birds in 1985 and then in 2017 have found that populations of almost all had declined, as many as eight had disappeared completely, and nearly all had moved to higher elevations in what scientists call “an escalator to extinction.” “Once you move up as far as you can go, there’s nowhere else left,” said John W. Fitzpatrick, a study author and director of the Cornell Laboratory of Ornithology. “On this particular mountain, some ridgetop bird populations were literally wiped out.” It’s not certain whether the birds shifted ranges because of temperature changes, or indirect impacts, such as shifts in the ranges of insects or seeds that they feed on. These findings, published Monday in the Proceedings of the National Academy of Sciences, confirm what biologists had long suspected, but had few opportunities to confirm. The existence of a 1985 survey of birds on the same mountain gave scientists a rare and useful baseline. Past research has documented habitats of birds and other species moving up in elevation or latitude in response to warming temperatures. But Mark Urban, director of the Center of Biological Risk at the University of Connecticut, who was not involved in the study said it was the first to prove what climate change models predicted: that rising temperatures will lead to local extinctions. “A study like this where you have historical data you can go back to and compare is very rare,” said Urban. “As long as the species can disperse, you will see species marching up the mountain, until that escalator becomes a stairway to heaven.” .
Two generations of humans have killed off more than half the world’s wildlife populations, report finds -- Human activity has annihilated wildlife on a scale unseen beyond mass extinction, and it has helped put humans on a potentially irreversible path toward a hot, chaotic planet stripped clean of the natural resources that enrich it, a new report has concluded. Populations of mammals, birds, fish, reptiles and amphibians have declined by 60 percent since 1970, according to a report released Monday by the advocacy group World Wildlife Fund. The animals that remain will fight against warming oceans choked with plastic, toppled rain forests may zero out fragile species, and refuges such as coral reefs may nearly die off.That will transform life as humanity knows it, said Carter Roberts, the chief executive of the WWF in the United States, if societies do not reverse course to protect the food, water and shelter needed for survival. “The numbers are astonishingly bad,” Roberts told The Washington Post. “It’s death by a thousand cuts.”The Living Planet Report, released every two years, is a biopsy of sorts for wildlife and the numerous threats to it. The group points to overexploitation of the environment — activity such as mining and deforestation — unsustainable agriculture and climate change as some of the engines driving the death of species worldwide. The consumption and discarding of materials have entered a vicious feedback loop of destruction. For instance, in three decades nearly all seabirds will carry shards of plastic in their digestive tracts, the report found.Toxic plastic also ends up in fish, which could hasten consequences for people who rely on fishing for industry or those who consume it. More than 4 billion people eat fish for at least some daily protein, the report said.
Humanity has wiped out 60% of animals since 1970, major report finds - Humanity has wiped out 60% of mammals, birds, fish and reptiles since 1970, leading the world’s foremost experts to warn that the annihilation of wildlife is now an emergency that threatens civilisation.The new estimate of the massacre of wildlife is made in a major report produced by WWF and involving 59 scientists from across the globe. It finds that the vast and growing consumption of food and resources by the global population is destroying the web of life, billions of years in the making, upon which human society ultimately depends for clean air, water and everything else. “We are sleepwalking towards the edge of a cliff” said Mike Barrett, executive director of science and conservation at WWF. “If there was a 60% decline in the human population, that would be equivalent to emptying North America, South America, Africa, Europe, China and Oceania. That is the scale of what we have done.” “We are rapidly running out of time,” said Prof Johan Rockström, a global sustainability expert at the Potsdam Institute for Climate Impact Research in Germany. “Only by addressing both ecosystems and climate do we stand a chance of safeguarding a stable planet for humanity’s future on Earth.”Many scientists believe the world has begun a sixth mass extinction, the first to be caused by a species – Homo sapiens. Other recent analyses have revealed that humankind has destroyed 83% of all mammals and half of plants since the dawn of civilisation and that, even if the destruction were to end now, it would take 5-7 million years for the natural world to recover.The Living Planet Index, produced for WWF by the Zoological Society of London, uses data on 16,704 populations of mammals, birds, fish, reptiles and amphibians, representing more than 4,000 species, to track the decline of wildlife. Between 1970 and 2014, the latest data available, populations fell by an average of 60%. Four years ago, the decline was 52%. The “shocking truth”, said Barrett, is that the wildlife crash is continuing unabated.
83% Decline of Freshwater Animals Underscores Need to Protect and Restore Freshwaters - This year's Living Planet Report shows that populations of animals—including mammals, birds, fish, reptiles and amphibians—plummeted by 60 percent between 1970 and 2014. But those living in freshwater are experiencing a far more drastic decline: 83% since 1970. It's a sobering statistic and one tied directly to the ever-increasing pressures that people are putting on natural habitats.We can learn a lot about the health of freshwater habitats overall by studying the animals that live in them. If freshwater animals are on the decline, that's a sign that the entire ecosystem is in trouble. Freshwater habitats face a host of threats, including increases in the amount of water we take from them; drainage of wetlands; pollution from industry, sewage and farms; invasive plant and animal species; climate change; and infrastructure development in and along waterways.Perhaps the most urgent threat to freshwater animals and their homes is the dams, bridges, roads and other infrastructure that interfere with the natural flow and connectivity of rivers. Many freshwater fish, for example, rely on free-flowing rivers to eat, reproduce and access nutrients necessary for their survival. Connected rivers help people, too. Free-flowing rivers move sediment to floodplains and deltas downstream, providing nutrients and soil for floodplain agriculture, allowing for healthy fisheries and supporting the resilience of delta habitats under a changing climate.
China reverses 25-year ban on trade and use of rhino horns and tiger bones, alarming conservationists - China is allowing scientific and medical uses of tiger bone and rhinoceros horn, after banning such uses and trade in the materials for 25 years, the government announced on Monday. “Under special circumstances, trading or using of tiger bone, rhino horn or any products containing them should apply for permission,” China’s cabinet, the State Council, said on Monday. The move was immediately condemned by the conservation group World Wildlife Fund (WWF). “It is deeply concerning that China has reversed its 25-year-old tiger bone and rhino horn ban, allowing a trade that will have devastating consequences globally”, Margaret Kinnaird, WWF’s wildlife practice leader, said in a statement on Monday. “The resumption of a legal market for these products is an enormous setback to efforts to protect tigers and rhinos in the wild.” Tiger bone or rhino horn for medical treatments can be prescribed by doctors certified by the State Administration of Traditional Chinese Medicine, according to the announcement. Scientific research such as genetic studies that require tiger or rhino products may submit applications, and the products should be used only for the purpose specified. Antique tiger and rhino products are also permitted if they are gifted or inherited assets. The new regulation limits the sources of products used for medical treatments. “Rhino horn power for medical use can only be obtained from captive bred rhinos, and tiger bones from those of natural death.” “Even if restricted to antiques and use in hospitals, this trade would increase confusion by consumers and law enforcers as to which products are and are not legal, and would likely expand the markets for other tiger and rhino products,” WWF said.
New Chinese Law a ‘Death Warrant’ for Endangered Rhinos and Tigers - China alarmed animal rights activists around the world Monday when it weakened a 25-year-old ban on the trading of tiger bone and rhinoceros horn, the Huffington Post reported.China said the controversial parts would now be allowed to be used for medicine and research at certified hospitals. The government further said the parts would only be sourced from farmed animals, but conservationists say that it is hard to tell whether parts come from legal farming or illegal poaching."With this announcement, the Chinese government has signed a death warrant for imperiled rhinos and tigers in the wild who already face myriad threats to their survival," Humane Society International wildlife program and policy senior specialist Iris Ho said in a statement. "It sets up what is essentially a laundering scheme for illegal tiger bone and rhino horn to enter the marketplace and further perpetuate the demand for these animal parts. This is a devastating blow to our ongoing work to save species from cruel exploitation and extinction, and we implore the Chinese government to reconsider.The are currently only 3,900 tigers and 30,000 rhinos left in the wild, and poaching is the greatest threat to the endangered species. Tiger bones and rhino horns are both valued for their use in traditional Chinese medicine, but no data has confirmed their health benefits. The World Federation of Chinese Medicine Societies issued a statement in 2010 saying there was no proof that tiger bone had medicinal properties, CNN reported. The group also removed both tiger bone and rhino horn from its list of approved treatments, National Geographic reported.
Genetic Testing Confirms Nine Tiger Subspecies -- One-Third Are Already Extinct - For years, the wildlife community has debated whether or not all of the 4,000 wild tigers left on Earth represented one species, stalemating many conservation efforts that would otherwise tailor to more specific needs of a diverse genetic pool. Now, researchers present the strongest evidence yet that suggests modern tigers fall into six genetically distinct groups. While it may present a new opportunity to protect endangered felines around the world, the findings come too late for three subspecies that have already gone extinct: the Caspian (1970), the Bali (1937), and Javan tigers (1976, although some claim to have since spotted it). Publishing their work in Current Biology, the authors note their work could help save the Bengal, Amur, South China, Sumatran, Indochinese, and Malayan subspecies still alive today. "The lack of consensus over the number of tiger subspecies has partially hindered the global effort to recover the species from the brink of extinction, as both captive breeding and landscape intervention of wild populations increasingly requires an explicit delineation of the conservation management units," said study author Shu-Jin Luo of Peking University in a statement. "This study is the first to reveal the tiger's natural history from a whole-genomic perspective. It provides robust, genome-wide evidence for the origin and evolution of this charismatic megafauna species." Taking a “whole genome approach”, the team analyzed the complete genomes of 32 representative tiger specimens. “We are now able to reconstruct, for the first time, the most comprehensive evolutionary pathways in modern tigers,” wrote the authors. Despite the low genetic diversity, the six subspecies have evolutionary histories unique among big cats. (Jaguars, for example, intermix across entire continents.)
These Whales Are Suffering a Slow-Motion Extinction - Whether southern resident killer whales, North Atlantic right whales or Maui's dolphins, a handful of cetacean species are facing the prospect of a slow-motion extinction they can't breed their way out of.It's easy to point the finger at humans, either directly or indirectly, for causing the crisis. But each of these species is dealing with a unique set of problems including boat strikes, bycatch where they become unintentionally entangled in fishing gear, low food supply and toxic chemicals."They are all anthropogenic issues, but they're all very different issues," said Renee Albertson, a cetacean biologist at the Marine Mammal Institute of Oregon State University in Newport. One major, and shared, obstacle in their path to possible recovery: a slow reproduction cycle. "If you can't reproduce effectively or efficiently, that's just going to make the problem worse," Long lives and slow breeding mean that, some of these species could go extinct within a decade, though it might take others a couple human generations. Many cetaceans face challenges. But for a handful of species or populations, the situation has become particularly dire. The decline of southern resident killer whales in the inland waters around Washington state and southern British Columbia, is still partly a mystery. The population is now at a 30-year low likely due to a combination of problems, including increased noise and overcrowding from boat traffic, and an influx of toxic chemicals in their aquatic ecosystem. Another major concern is the drop in the chinook salmon the orcas depend on, prompted in part by overfishing and the damming of fresh waterways that the fish need for spawning, She said that southern residents are down to around 74 individuals, with the population losing a critical newborn this past summer. On the East Coast, ship strikes in U.S. and Canadian waters may have been responsible for some of the 17 North Atlantic right whales known to have died in 2017. The population did not breed a single calf over the winter season of 2017 to 2018. Only 451 individuals remained as of late 2016.
With Only 74 Left, New Protections Announced for Iconic Killer Whales- With only 74 remaining in the wild, time is running out to save southern resident killer whales, especially after two died this summer.This week, the Canadian government announced a slew of measures to save the critically endangered species. The $61.5 million (US$50 million) initiative will address three key threats to the orcas: a lack ofchinook salmon, the whales' favored prey; contaminants in the water; and vessel traffic and noise that interferes with their hunting abilities, according to a news release from the Fisheries and Oceans department.The Canadian government is also looking to create new areas of critical habitat off the west coast of Vancouver Island for the killer whales, fisheries minister Jonathan Wilkinson told The Canadian Press on Wednesday. The Swiftsure in the Juan de Fuca Strait between Vancouver Island and Washington state, and La Perouse Bank off Tofino will be areas that the marine animals can call home, he said."We are in the process of consulting on those new critical habitat areas and expect to be able to move forward on them in the next couple of months," Wilkinson explained. "We are also talking about creation of killer whale sanctuaries, which essentially are within the areas of critical habitat ... which means that we can prohibit a range of different activities, not simply fisheries, where you can regulate that ships cannot go." These efforts are part of a previously announced $167.4 million Whales Initiative to save the southern residents, whose population has dipped to only 74 individuals, down from 98 in 1995.Their plight was underscored this summer when a mother whale Tahlequah, or J35, carried her dead calf for at least seventeen days and 1,000 miles in her heartbreaking "tour of grief" this August, according to the Center for Whale Research. The next month, the ailing J50, another member of Tahlequah's pod, was declared missing and presumed dead after a three-day search in the waters between Washington state and Canada.
Brutal Hunt That Has Already Killed Thousands of Porpoises in Japan Resumes Again Today - Otsuchi, in northern Japan, is the focal point of the hand harpoon hunt which has claimed up to 15,000 Dall's porpoises in previous years.In the most recent hunting seasons for which information is available, Japan allocated itself a quota of 13,493 Dall's porpoises in 2013/14, 12,928 in 2014/15 and 12,364 in 2015/16. The catch, however, has been significantly less than the quota for many years. In 2016, just over a thousand porpoises were killed.The Dall's porpoise hunts, along with dolphin hunts at the notorious cove in Taiji, continue to supply Japanese consumers with cetacean meat loaded with dangerous pollutants, including mercury and polychlorinated biphenyls (PCBs).Eight Dall's porpoise blubber products analyzed by Japanese scientists, commissioned by us, revealed high PCB levels, with one product purchased in Shizuoka, near Tokyo, having a concentration of 4ppm, a startling eight times higher than the regulatory level of 0.5ppm. Once landed, porpoises and dolphins are processed and sold in supermarkets and fish markets throughout the country, sometimes illegally mislabelled as "whale meat" to increase the value of the meat. We have been documenting the annual Dall's porpoise hunts for some 20 years, to raise awareness of the hunts themselves and their negative impact on marine conservation, "The vast majority of Japanese citizens are kept in ignorance of the Dall's hunt, of dangers posed by the toxic meats the government is allowing them to purchase and even, in many cases, of the actual species they are eating," said Clare Perry, ocean campaigns leader.
'Fish are vanishing' - Senegal's devastated coastline - Mor Ndiaye, 34, has lived all his life in St Louis, a bustling fishing town in northern Senegal. Its sandy streets are crammed with children and roaming goats. Life here was good until a few years ago when everything changed. "The fish just vanished, what can we do? We used to catch enough fish in a day or two. Now we need to go out at sea for weeks to catch the same amount. It's terrifying, we can only rely on God," he says, standing next to men carrying fish in large plastic crates over their heads from the few traditional wooden boats arriving ashore. St Louis, a former French West African colonial capital, lies at the heart of one of the world's richest fishing areas. Fish caught here - mainly sardinella and other so-called pelagic or open sea fish migrating up and down the coast - have provided up to 75% of the protein consumed by millions of people in Senegal and across Africa's interior in countries like Burkina Faso and Mali. But decades of mainly European and Asian trawlers scouring its coastline have meant that its waters have been overfished. As fish run out, artisanal fishermen are building larger boats to go further out to sea, making overfishing even worse.
We Cannot Recycle And Beach Clean Our Way Out Of A Plastics Crisis - In the few minutes it will take you to read this article, another five truckloads of plastic will have been dumped in the ocean. The consequences of this are far-reaching, and evidence is growing that people around the world are ingesting microplastics through their food and drinking water. We have reached a point where even the air we breathe can contain plastic, and if we fail to act, there could be more plastic than fish in the ocean by 2050. The problem starts long before plastic reaches our oceans, rivers and beaches, and so must the solutions. We turn too many barrels of oil into plastic, and design plastic packaging without fully considering what happens to it after it’s used. As well as the environmental damage, the financial loss is vast. The global economy misses out on an estimated $80 billion to $120 billion a year because of plastic waste. There is widespread agreement that urgent action is needed. Around the world there has been investment and innovation, as well as community-led efforts, to clean up plastic pollution. Yet we know that while cleaning up is vital, it does not stop the tide of plastic entering the oceans each year. We cannot recycle and clean our way out of this crisis ― we must move upstream to the source of the flow. When the boat is sinking, bailing out buys you time, but what you really need to do is fix the hole. That is why on Monday we launched the New Plastics Economy Global Commitment, in collaboration with the United Nations Environment program. It is based on the principles of a circular economy ― a radically different approach to economic development where waste and pollution are designed out, products and materials are kept in use, and natural systems are regenerated.
Typhoon triggers deadly landslides in Philippines, dozens trapped (Reuters) - Landslides killed four people and trapped at least 31 others on Tuesday in a mountainous region of the Philippines, officials said, as Typhoon Yutu barrelled across the country with strong winds and rains. Yutu, the 18th typhoon to hit the Philippines this year, swept across the main island of Luzon with wind speeds of 140 km per hour (87 miles per hour) and gusts of up to 230 kph (142 mph), before heading west over the South China Sea, the state weather agency said. Roads blocked by collapsed earth prevented rescue teams from reaching the 31 people trapped in a landslide late in the afternoon that engulfed a local government building in the country's Mountain province, local authorities said. Another landslide in neighbouring Ifugao province killed a 48-year-old man and three children aged between 8 and 11, according to a police report. The typhoon, named Rosita by Philippine authorities, comes just six weeks after super typhoon Mangkhut dumped massive rains on Luzon, triggering dozens of landslides that killed more than 70 people in the mountainous Cordillera region. At first light helicopters would fly rescue teams and search dogs to the 31 people trapped, who included public highways contractors, security guards and people sheltering from the storm, said Ruben Carandang, head of civil defence in the Cordilleras. Footage from Yutu's path captured by local television showed winds bending trees and signs, sheets of rain lashing down and loose materials flying through the air. Local television reported one person was electrocuted and killed and another missing in Isabela, the province where Yutu made landfall.
Death toll rises to 11 as storms hammer Italy (Reuters) - Violent storms battered Italy for a third consecutive day on Tuesday, killing at least 11 people, and flooding much of Venice. The lagoon city’s St. Mark’s Square remained under water for a second day while the adjacent St. Mark’s Basilica was also inundated, with its baptistery totally flooded and its historic, mosaic floors covered by 90 cm (2.95 ft) of water. “The basilica has aged 20 years in just one day, and perhaps I am being overly optimistic about that,” said Carlo Tesserin, the church’s chief administrator. Italian media said it was the second time this century that the basilica had been flooded, and just the fifth time it had seen such high water within the body of the cathedral in its 1,000-year history. “It is becoming ever more difficult for us and indeed could become impossible for us to repair the damage, especially in an age of climate change,” Tesserin said. Widespread damage was also reported in towns and cities in the north, south and center of Italy. Many of the 11 deaths were caused by falling trees as winds as strong as 150 km/h (90 mph) whipped the country. One of the hardest hit regions was Liguria, in the northwest. The breakwater walls in the chic seaside resort of Rapallo were destroyed by pounding waves, allowing in a surge of water that toppled dozens of luxury yachts and inflicted heavy damage on the port area. Local media said a yacht owned by the family of former prime minister Silvio Berlusconi was one of those badly damaged. Slideshow (17 Images) The nearby resort town of Portofino was cut off by a landslide while video showed sea water pouring through the picturesque fishing village of Vernazza further to the south.
New study: Freak summer weather and wild jet-stream patterns are on the rise because of global warming -- In many ways, the summer of 2018 marked a turning point, when the effects of climate change — perhaps previously on the periphery of public consciousness — suddenly took center stage. Record high temperatures spread all over the Northern Hemisphere. Wildfires raged out of control. And devastating floods were frequent.Michael Mann, climate scientist at Pennsylvania State University, along with colleagues, has published a new study that connects these disruptive weather extremes with a fundamental change in how the jet stream is behaving during the summer. Linked to the warming climate, the study suggests this change in the atmosphere’s steering current is making these extremes occur more frequently, with greater intensity, and for longer periods of time.The study projects this erratic jet-stream behavior will increase in the future, leading to more severe heat waves, droughts, fires and floods. The jet stream is changing not only because the planet is warming up but also because the Arctic is warming faster than the mid-latitudes, the study says. The jet stream is driven by temperature contrasts, and these contrasts are shrinking. The result is a slower jet stream with more wavy peaks and troughs that Mann and his study co-authors ascribe to a process known as “quasi-resonant amplification.”The altered jet-stream behavior is important because when it takes deep excursions to the south in the summer, it sets up a collision between cool air from the north and the summer’s torrid heat, often spurring excessive rain. But when the jet stream retreats to the north, bulging heat domes form underneath it, leading to record heat and dry spells. If the excursions in the jet stream endure long enough, it can then set the stage for floods where the jet dips, and wildfires and drought where it ascends. “What made these events [in the summer of 2018] so devastating was not just the extreme nature of the meteorological episodes but their persistence,” Mann said in a blog post discussing the implications of the new study. The study, published Wednesday in Science Advances, finds that these quasi-resonant amplification events — in which the jet stream exhibits this extreme behavior during the summer — are predicted to increase by 50 percent this century if emissions of carbon dioxide and other greenhouse gases continue unchecked.
Here's How Much El Niño Influences Winter Temperatures in the United States - El Niño conditions are an important factor in weather conditions in the United States – particularly in the winter – but they might not mean as much as you think regarding temperature outlooks.When El Niño conditions develop, this can alter the jet stream pattern over the U.S., and this is particularly noticeable in the winter. Often in El Niño winters, the Pacific jet stream is amplified and reaches across the southern tier of the Lower 48. This can result in wetter-than-average conditions across the South due to the placement of the storm track. The influence of El Niño on winter temperatures isn't as reliable as its influence on precipitation.Temperatures during El Niño winters can vary greatly, but it generally brings colder-than-average temperatures in the South and warmer-than-average conditions from the Northwest to the northern Great Lakes. Every El Niño event is different, but some patterns emerge.The strength of the El Niño event is one factor, and that's based on the value of the Oceanic Niño Index (ONI). The ONI indicates how much above- or below-average monthly sea-surface temperatures are in the east-central equatorial tropical Pacific region known as Niño 3.4.As a reminder, the criteria for El Niño conditions are that the average sea-surface temperatures in the ONI region need to be at least a half-degree Celsius warmer than average in the preceding month, and the anomaly has persisted or is expected to persist for three consecutive months. Additionally, the atmosphere over the tropical Pacific also needs to exhibit certain characteristics.When looking at strong El Niño winters in the U.S., warmer-than-average temperatures were present for most of the country in four of the six such winters. However, the exact location of the warmest temperature anomalies varied, although it was often located near the northern Plains. Moderate El Niño winters are not as warm as strong ones; much of the U.S. has experienced near-average or colder-than-average conditions when there is a moderate El Niño. Half of the El Niño events that have taken place since 1950 have been in the weak category.During a weak El Niño winter, temperatures are more likely to be warmer than average in the West and near-average or colder for areas from the Plains to the East Coast. However, there have been great variations in the temperature patterns, even within a given El Niño strength.
Record Low Water Levels Are Causing Chaos in Germany - In Lake Constance, a new island has emerged. In Berlin, a river is flowing backward. A large number of lakes and ponds are seeing dead fish along their banks. Barges are hardly being loaded so they don't run aground. This is the scene in Germany after a long and dry summer has left the country's lakes and rivers at record low levels. The levels are causing chaos for the inland shipping industry while causing environmental damage and billions of dollars in losses. Experts fear this could be a sign of what's to come as global temperatures rise. The drought-like conditions have hit nearly 90 percent of the country this year. In Magdeburg, the Elbe River has been so low that no ships carrying goods south to Leipzig or on to the Czech Republic have been able to pass through since the end of June, said Hartmut Rhein of the city’s waterways and shipping department. The river’s down to a depth less than 20 inches there when at least double that level is needed for normal shipping traffic, he said. “At the moment the only possibility is to completely unload ships and transfer their cargoes to other means of transportation,” he said. The situation is similar across Germany. The mighty Rhine has hit its lowest water levels ever at several points, and other major rivers like the Danube, the Weser and the Main are all far below normal. On the waterways that are still navigable, the lower water levels have actually led to increased shipping traffic, as companies pack less weight onto boats so they don’t ride so low in the water. That means they must send more vessels out to carry the same amount of freight.
An Aquifer From the Ice Age Becomes a Battleground in New Mexico - Imagine: a deep, pristine aquifer persists without incident for more than 11,700 years in the Valley of San Augustin. It is revered and left unmarred by the community members who know of its existence, utilizing it respectfully and sustainably, leaving it intact—from the Ice Age until 2008. That is when a New York-based company, Augustin Plains Ranch LLC, owned by an Italian billionaire, decided to set up its operation and apply for a permit to invade the aquifer by extracting 54,000 acre feet of water per year.Located in west-central New Mexico, the groundwater present in the aquifer dates back to the latest Ice Age and is fed by no permanent streams. The basin is replenished primarily from the intense thundershowers during late summer months. Southern New Mexico generally averages less than 10 inches of rain a year. For more than 10 years, neighbors of the ranch have fought to oppose water mining and potential destruction of the aquifer. With present drought conditions and rising temperatures, it's possible that if allowed, this volume of extraction would render the aquifer non-existent.This lengthy battle has united improbable allies: conservative ranchers, indigenous people, small business owners, rural residents and conservationists in a broad coalition of local opposition. Why? New Mexicans get 85 percent of their drinking water from groundwater. Water mining in huge quantities eventually causes a "cone of depression." As water continues to be pumped at an unsustainable rate, the underground flow moves toward the wells that are pumping. As nearby wells begin to dry up, the cone of depression widens, and more and more wells go dry. Only about 700 people live in the area of the San Augustin Valley. It is a sparse but elegant landscape, also home to the Very Large Array (VLA), a component of the National Radio Astronomy Observatory (NRAO). The plan, if approved, called for 17 billion gallons of water per year to be extracted through 37 wells. Ageological study concluded that "data used to generate storage estimates, aquifer properties, subsurface geology are sparse, making it difficult to accurately assess impact of the proposed project." This prehistoric underground lake could potentially be drained, leaving residents, livestock and wildlife with no water source and changing the fragile desert ecosystem forever.
Austin lifts widespread boil water notice after 6 days - A boil water notice in Austin has been lifted Sunday after city officials warned residents of unsafe water for the past six days.
Officials said customers no longer need to boil water for drinking, cooking and making ice, and that testing showed tap water is meeting all regulatory standards deemed safe for human consumption. Austin Water has lifted the boil water notice that has been in place since Monday, Oct. 22, 2018. Customers no longer need to boil water used for drinking, cooking and making ice. Details and frequently asked questions at http://www.austintexas.gov/BoilH2O The notice was sent on the heels of recent flooding that had filled the lakes that feed Austin's supply with silt, mud and debris. At the time the notice was announced last Monday, officials said the water needed extended filtration and treatment before it is safe to consume. There was no indication of bacterial infiltration.
Pollution And Climate Change Cause 'Dead Zones' In World's Oceans To Spread - In 2017, an 8,000 square mile large "dead zone," (an area with low-oxygen levels in the ocean) developed along the coasts of Louisiana, Texas and Florida. This anoxic event was in part caused by human activity along the Mississippi River, flowing into the Gulf of Mexico. Wastewater from cities contains a lot of nitrates and phosphates, acting as a fertilizer in the water. Sediments washed by rain from the agricultural fields into the river also provide nutrients and elements like iron that are important for plant growth. Fast-growing algae, living in the surface layer of the ocean that receives sunlight, benefit from this surplus of nutrients and minerals. As the algae grow and multiply, they consume all the free oxygen in the water. Decreasing oxygen levels are followed by a mass mortality, at first of larger animals followed by smaller creatures and finally also the algae. The dying animals and plants provide a sudden surplus of nutrients for bacteria. As the bacteria multiply and feed on the decaying organic matter, they consume the last traces of oxygen and the dead zones exponentially grow in size. Geological evidence suggests that such oceanic anoxic events (OAE) happened 95 million years ago during the Cretaceous. The exact cause of the past OAE is still debated, but it's likely that volcanic eruptions provided nutrients as volcanic ash dispersed into Earth’s atmosphere, and that the warmer climate of the Cretaceous also played a role. Warm water can hold less dissolved oxygen than cold water. Warmer oceans are therefore more vulnerable to oxygen depletion during an algal bloom as cold oceans. A warmer climate also favors plant growth, making algal blooms more likely. Research has shown that in the past 50 years and as the climate warms such modern dead zones multiplied, especially along the coasts of the continents, which are most exposed to human activity and wastewater. In our modern times, anoxic events are not only disastrous for marine ecosystems, but also for the fishing industry. Fish or shrimp farms along the coast can't simply relocate in areas not affected by low-oxygen events. Also, the small-scale traditional fishing industry, especially in developing nations, can't follow the fish swarms away from the coast to the open ocean.
Oceans Have Absorbed 60% More Heat Than Scientists Thought - The landmark report from the UN's Intergovernmental Panel on Climate Change published last month warned that humans needed to reduce greenhouse gas emissions 45 percent below 2010 levels by 2030 for us to have a shot at limiting global warming to 1.5 degrees Celsius above pre-industrial levels.Now, another study published in Nature Wednesday found we might have even less time than that. This is because the oceans have been absorbing much more heat than previously calculated, meaning the earth is more sensitive to carbon dioxide emissions than scientists thought."We thought that we got away with not a lot of warming in both the ocean and the atmosphere for the amount of CO2 that we emitted," research leader and Princeton University geoscientist Laure Resplandy told The Washington Post. "But we were wrong. The planet warmed more than we thought. It was hidden from us just because we didn't sample it right. But it was there. It was in the ocean already." In the past 25 years, the oceans have warmed 60 percent more than previously thought. It means that policy makers now have even less leeway when it comes to reducing greenhouse gas emissions if they want to keep warming to 1.5 or even 2 degrees above pre-industrial levels. The findings reduce the total amount of carbon dioxide humans can safely burn before crossing those thresholds by 25 percent.They also have implications for the ocean-related impacts of climate change: the health of marine life and the pace of sea level rise. "A warmer ocean will hold less oxygen, and that has implications for marine ecosystems," Resplandy told BBC News. "There is also sea level, if you warm the ocean more you will have more thermal expansion and therefore more sea level rise."
Startling new research finds large buildup of heat in the oceans, suggesting a faster rate of global warming - The world’s oceans have been soaking up far more excess heat in recent decades than scientists realized, suggesting that Earth could be set to warm even faster than predicted in the years ahead, according to new research published Wednesday.Over the past quarter-century, Earth’s oceans have retained 60 percent more heat each year than scientists previously had thought, said Laure Resplandy, a geoscientist at Princeton University who led the startling study published Wednesday in the journal Nature. The difference represents an enormous amount of additional energy, originating from the sun and trapped by Earth’s atmosphere — the yearly amount representing more than eight times the world’s annual energy consumption.In the scientific realm, the new findings help resolve long-running doubts about the rate of the warming of the oceans before 2007, when reliable measurements from devices called “Argo floats” were put to use worldwide. Before that, differing types of temperature records — and an overall lack of them — contributed to murkiness about how quickly the oceans were heating up.The higher-than-expected amount of heat in the oceans means more heat is being retained within Earth’s climate system each year, rather than escaping into space. In essence, more heat in the oceans signals that global warming is more advanced than scientists thought. “We thought that we got away with not a lot of warming in both the ocean and the atmosphere for the amount of CO2 that we emitted,” said Resplandy, who published the work with experts from the Scripps Institution of Oceanography and several other institutions in the United States, China, France and Germany. “But we were wrong. The planet warmed more than we thought. It was hidden from us just because we didn’t sample it right. But it was there. It was in the ocean already.”
Mount Etna is sliding into the sea. History shows that could be catastrophic. - Sicily’s Mount Etna is one of the world’s most active volcanoes, but scientists say eruptions aren’t the only major threat posed by this smoldering peak.A new study shows that Etna is slowly sliding toward the sea, raising the prospect that it may suddenly collapse and trigger a massive tsunami that could devastate the region around the eastern Mediterranean Sea.“Etna is a big and heavy volcano, so gravity is pulling it down,” Morelia Urlaub, a research scientist at the GEOMAR Helmholtz Centre for Ocean Research in Kiel, Germany, and the study’s lead author, told NBC News MACH in an email. “It can spread more easily towards the sea as there is nothing to 'stop' it.”The volcano’s slow subsidence has been known since the 1990s. But Urlaub and her colleagues used a network of underwater sensors along the volcano’s southeastern flank to get a detailed look at its movement.Etna typically moves about 2 to 3 centimeters (about 1 inch) per year, according to Urlaub. In the recent study, published Oct. 10 in the journal Science Advances, the sensors showed that Etna’s creeping motion occasionally speeds up for weeks or months at a time as molten rock (magma) builds up underground before spewing out in an eruption; in 2017, the sensors detected a slip of 4 centimeters (about 2 inches) over eight days, without an associated eruption. The sensors also detected motion in parts of the volcano’s flank that lie underwater, far from the heart of Etna’s volcanic activity — an unexpected finding that suggests that magma alone can’t account for the continuing slide. “If rising magma would cause flank movement, then we would expect the largest movement to take place very close to the magma source,” Urlaub said. “But our measurements show that the flank moves even very far from the magma source.”
USGS- Yellowstone Super Volcano Threat Set To High - The United States Geological Survey has increased the Yellowstone supervolcano threat to “high.” This is the first time that the USGS has updated its volcano threat assessments list since 2006. The USGS said that 11 of the 18 volcanoes they have classified as a “high threat” or a “very high threat” are located in Washington, Oregon, or California, “where explosive and often snow- and ice-covered edifices can project hazards long distances to densely populated and highly developed areas.” According to the Epoch Times, the danger list is topped by Kilauea in Hawaii, which has been erupting continuously in 2018. Mount St. Helens as well as Mount Rainier in Washington, Alaska’s Redoubt Volcano, and California’s Mount Shasta are also in the top five, according to what the USGS has said. Although the Yellowstone supervolcano is a “high” threat, it’s only the 21st most dangerous volcano in the United States. According to Forbes, the assessment that Yellowstone supervolcano was only high was not assigned on a whim. While the Yellowstone supervolcano does have the potential for a large eruption, other factors are at play. Such as the fact that it erupts so infrequently, shows no signs of increasing eruption risk today, and is located in a relatively sparsely populated area of the United States which decreases the threat. To be clear, the USGS still ranked the supervolcano as a “high” threat, but it is clearly not the most dangerous volcano in the United States.Despite the recent gradual uptick in thermal activity in the caldera directly below the supervolcano, the new USGS threat assessment is showing Yellowstone as stable, but dangerous when it does happen to erupt in the future, according to a report by the Missoulan.The Yellowstone supervolcano is one of the most feared volcanoes on the globe, however, scientists are constantly reminding everyone that the chance of it erupting in a violent and globally devastating fashion is rather small, even though it is said to be “past due” for such an explosion.
Melting Glaciers Dramatically Alter Canada's Yukon -- Glaciers in Canada's Yukon territory are melting at an alarming pace, causing bodies of water to dry up and whipping up dust storms in the region, CBC News reported. Researchers have determined that the rapidly retreating Kaskawulsh Glacier in the Yukon's St. Elias Mountain region cannot compensate for the volume it is losing now each year. In the 2018 report, State of the Mountains, experts estimated that the glaciers in the St. Elias Mountains are losing more ice than any other alpine area in the country. The mountain range runs from British Columbia, the Yukon and Alaska, and is part of the largest ice field in the world outside of Antarctica and Greenland. "We as Canadians are stewards of about a third of the world's mountain glaciers and ice caps, so this is our responsibility," Glaciologist Gwenn Flowers told CBC. Flowers said that the Kaskawulsh glacier is losing a half meter (1.6 feet) of ice a year. "What the glaciers and ice sheets do makes a big difference to global sea levels, and makes a big difference to local environments where they form a water source," she added. .
‘We’ve never seen this’: massive Canadian glaciers shrinking rapidly Scientists in Canada have warned that massive glaciers in the Yukon territory are shrinking even faster than would be expected from a warming climate – and bringing dramatic changes to the region. After a string of recent reports chronicling the demise of the ice fields, researchers hope that greater awareness will help the public better understand the rapid pace of climate change. The rate of warming in the north is double that of the average global temperature increase, concluded the US National Oceanic and Atmospheric Administration in its annual Arctic Report Card, which called the warming “unprecedented”. “The region is one of the hotspots for warming, which is something we’ve come to realize over the last 15 years,” said David Hik of Simon Fraser University. “The magnitude of the changes is dramatic.” In their recent State of the Mountains report published earlier in the summer, the Canadian Alpine Club found that the Saint Elias mountains – which span British Columbia, the Yukon and Alaska – are losing ice faster than the rest of the country. Previous research found that between 1957 and 2007, the range lost 22% of its ice cover, enough to raise global seal levels by 1.1 millimetres. “When I first went to the St Elias range, it felt like time travel – into the past,” said Hik, who co-edited the report. “What we’re seeing now feels like time travel into the future. Because as the massive glaciers are retreating, they’re causing a complete reorganization of the environment.” The accelerating melt of the glacier has resulted in major shifts to water sources at lower elevations.
The great Himalayan thaw - Nepal is one of the most vulnerable countries in the world to climate change. For the country and its people to successfully adapt, it is necessary to better understand changing rainfall hazards so new strategies can be developed for farming, drought management, flood risk reduction, a healthier landscape and more robust infrastructure and services. The inability of global and regional circulation models to capture climate dynamics over Nepal due to low spatial resolution means that it is difficult to project future rise in temperature and changes in rainfall. The models incorporate some differentiation between the country’s east, centre and west but do not account for the north-south topographic gradient of the Himalaya. This means existing simulations do not accurately represent the changes in monsoon circulation. The higher elevations in the Himalaya involve three dimensions critical for the health of the water cycle of the Ganga Basin downstream: snowfall, snow and ice reserves, and glaciers. There is now better understanding of the risks of glacial retreat, but there is not much on-the-ground study of the impact of snow and ice recession on regional hydrology. A report in 2014 by the Kathmandu-based International Centre for Integrated Mountain Development (ICIMOD) and the Department of Hydrology and Meteorology (DHM) said that there were 3,808 glaciers in Nepal covering a total area of 3,902 km2 with an estimated ice reserve of 312 km3. It said the total glacier area decreased by 24% between 1977 and 2010 and the estimated ice reserves by 29% (129 km3). This means that in the three decades since, the tributaries of the Ganga River were deprived of an average base flow of 123 cubic metres per second of water.
Iceberg 5x the Size of Manhattan Breaks Off Pine Island Glacier - The Pine Island Glacier, the fastest-retreating glacier in Antarctica, lost another massive chunk of ice earlier this week.A 115-square-mile section calved off the ice shelf on Oct. 29. That's roughly the five times the size of Manhattan.The piece was expected to take weeks or months to break off after the first cracks were observed about a month ago, according to Stef Lhermitte, an assistant professor in the Department of Geoscience and Remote Sensing at Delft University of Technology in the Netherlands.But "I was a bit surprised" it broke off that quickly, he told Live Science. "It turned out to be on the quick side." This GIF of satellite imagery shows just how rapidly the rift across Pine Island Glacier, also known as PIG, was formed. The newly formed iceberg eventually broke into smaller pieces. "Iceberg B-46 did not live very long, as it already fragmented in several pieces today, one day after calving from Pine Island Glacier," Lhermitte tweeted Tuesday. PIG is the fastest shrinking on the planet and is contributing to sea level rise faster than any other glacier, according to the iSTAR science program, which works to understand the stability of the West Antarctic Ice Sheet.
Business As Usual: Running on Empty - Sandwichman - A little over a year ago, Robert Watson, former chair of the IPCC, and two co-authors published a report titled “The Economic Case for Climate Action in the United States.” Based on trends over the past few decades, the authors estimated the current total annual cost in the U.S. of losses from weather events intensified by climate change and health damage from fossil fuel pollution to be $240 billion, which they described as “about 40 percent of current economic growth of the United States economy.”At around the same time, Mark Jacobson, Mark Delucchi and a carload of co-authors published an article in which they projected damages to health and property in the U.S. from climate change and pollution under “business as usual” to be around eight trillion dollars in 2050. A simple linear extrapolation between the two estimates suggests that the annual cost of climate change is increasing at around an 11 percent annual rate. Based on that extrapolation, the health and property damage cost of climate change can be projected to exceed annual GDP growth by 2026.But wait. Watson’s 40 percent figure compares average annual damage with some of the better recent years of growth. Even excluding years of recession and stagnation, in which growth was less than $240 billion, the remaining eight of the last 12 years averaged only around $430 billion a year in real GDP growth. Counting the recession and stagnation years, it’s virtually break even.But there’s more. Part of that economic growth simply reflects expansion of the population. Real economic growth per capita in the U.S. has been even more anemic in the 21st century. Of course this means the cost of damage can be spread more thinly as well but the crucial point is still what happens to per capita income relative to the damage.The future is hard to predict, so I tried a number of scenarios. First, if per capita growth continues at the rate it has since 2009, the U.S. has already entered the red zone where the cost of climate change exceeds growth by an increasing amount each year. If real per capita growth accelerates to 1.5 percent per annum that fateful point won’t be reached until the year after next. A growth rate of 2 percent would postpone the day of reckoning until 2024, six years before the IPCC deadline for achieving net zero carbon emissions. To make it to 2030 without crossing permanently into the red would require a sustained rate of real per capita growth that hasn’t been achieved since 1960-1970.
The EPA Has Disappeared Its Climate Page - "We want to help you find what you are looking for."That is the message you get if you type epa.gov/climatechange into your web browser, along with a link to the archived U.S. Environmental Protection Agency (EPA) mainpage as of Jan. 19, 2017, the day before Donald Trump became president. In April 2017, the EPA replaced its "climate change" page with an update message saying the site was being changed to "reflect the agency's new direction under President Donald Trump." But now even the promise of an update is gone, a new report from the Environmental Data & Governance Initiative (EDGI) discovered Thursday."It's an embarrassment. It is a ghost page," Obama-era EPA Regional Administrator Judith Enck told The Guardian. "It's a bit like Amazon not allowing the public to order books via its website – it's that fundamental. There's no other issue at the EPA more important than climate change; it affects air, water, health and whether large parts of the world will survive."The EDGI report said that the changes occurred between 5:12 p.m. Oct. 16 and 3:04 a.m. Oct. 17. In addition to changing the main text of the page, the website also replaced a link to a snapshot of the EPA's Obama-era climate change page with a snapshot of the EPA's Obama-era mainpage and deleted a link to a press release explaining the changes. In September, the EPA also removed a link on the page to the EPA's searchable archive and technical support request form. "The cumulative effect of removing these links from the splash page is the substantial reduction of access to EPA's historical public information about climate change," the EDGI report said.
We need a fossil fuel non-proliferation treaty – and we need it now - How did government respond to the recent scientific conclusion that only “rapid, far-reaching and unprecedented changes in all aspects of society” can deliver the globally agreed target for stopping climate breakdown? In the UK, fracking for fossil fuels was given the green light, plans were announced for a huge new road in the south-east, incentives for electric vehicles withered, the expansion of Heathrow airport is still going ahead and Gatwick airport is trying to expand too by bringing a back-up runway into use. It’s like seeing a sign that says “Danger: vertical cliff drop” and pulling on your best running shoes to take a flying leap. Something isn’t working. The head of the oil company Shell responded to the new climate science warming by clarifying that “Shell’s core business is, and will be for the foreseeable future, very much in oil and gas.” BP announced new North Sea oil projects. Immediate choices are being made with blank disregard to avoiding climate breakdown. Currently, global demand for coal, oil and gas are all growing, with fossil fuels accounting for 81% of energy use. A new line in the sand is needed to underpin the existing climate agreement, to exert influence over the immediate choices of policymakers. At the very least, the science should mandate a moratorium in rich countries on any further expansion of the fossil fuel industry, or any infrastructure dependent on it. A moratorium could take the form of a fossil fuel non-proliferation treaty. The threat of nuclear catastrophe provides a precedent for how, quickly, to stop a bad situation getting worse. The nuclear non-proliferation treaty (NPT), agreed 50 years ago between 1965-68, was a triumph of rapid diplomacy, at the height of cold war mistrust, and against an immense security threat. We could even adapt the classic “three pillar” structure of the NPT. The first is “non proliferation” itself. The second pillar of the NPT is disarmament. This means rapid substitution of clean energy for fossil fuels. The final pillar concerns the promotion of the “peaceful” use of technology. In a climate context, that would mean massively expanding existing initiatives to compensate poorer countries for leaving fossil fuels in the ground, while ensuring access to clean energy and the technology needed for development.
There's so much CO2 in the atmosphere that planting trees can no longer save us -- Humans emit roughly 30 to 40 billion tons of the greenhouse gas, carbon dioxide, into the atmosphere each year. If we keep it up, Earth will continue to heat up and ultimatelydevastate our way of life.So what can we do about it?Most scientists agree that we need a way to capture some of that CO2 out of the atmosphere. One idea is to plant lots of trees. Trees use CO2 in order to grow. They also release oxygen, so it's a win-win.But studies indicate that we simply can't grow enough trees to capture the necessary amount of CO2 that would help us meet the goals set by the Paris Agreement.In truth, we would have to cover the entire contiguous US with trees just to capture 10% of the CO2 we emit annually.There's just not enough room on this planet to have the farmland it takes to feed the world plus the space to plant the necessary number of trees. In other words, many of us would starve if we tried using trees to solve our emissions problem.
Best Way to Fight Climate Change? Put an Honest Price on Carbon - Editorial Board, NYT - Will voters in Washington State breathe new life into the idea of taxing carbon emissions? Plenty of people worried about the earth’s future certainly hope so.Climate scientists and economists have long argued that the single best way to slow global warming is to put a price on greenhouse gas emissions from fossil fuels and raise that price over time, thus creating a sensible market incentive to reduce emissions and invest in cleaner energy sources. Carbon pricing was also high on the list of urgent recommendations of the United Nations Intergovernmental Panel on Climate Change, which warned in a major report this month that without swift action to control emissions the world will begin suffering global warming’s worst consequences — including, but not limited to, thedisplacement of millions of people by drought and sea-level rise — as early as 2040, much sooner than previously forecast. It is thus encouraging that in this time of torpor and climate denial at the highest levels of the federal government, voters in the state of Washington will soon be given the chance to adopt, by initiative, a carbon pricing plan that would charge polluters like refineries a fee for emitting greenhouse gases. This would be what economists call a Pigovian tax, after the British economist Arthur Pigou. In this case, the fee would factor in the now unaccounted for costs of more frequent and intense hurricanes, wildfires, droughts and other natural disasters linked to climate change. In the words of George Frampton, a senior environmental adviser to Bill Clinton and co-founder of a group that favors carbon taxes, Partnership for Responsible Growth, it’s an overdue stab at “honestly pricing carbon,” which industry has until now been able to hurl into the atmosphere pretty much for free. Polling so far suggests a close vote. Opponents of the measure, including such big oil companies as BP and Chevron, have raised more than $25 million to get people to vote no; in addition, Washington voters soundly defeated a carbon tax the last time it appeared on the ballot, in 2016. But other powerful forces, including Bill Gates and Michael Bloomberg, the former New York mayor, have ponied up in support this time.
Canada passed a carbon tax that will give most Canadians more money --- Last week, Prime Minister Justin Trudeau announced that under the Greenhouse Gas Pollution Pricing Act, Canada will implement a revenue-neutral carbon tax starting in 2019, fulfilling a campaign pledge he made in 2015.The federal carbon pollution price will start low at $20 per ton in 2019, rising at $10 per ton per year until reaching $50 per ton in 2022. The carbon tax will stay at that level unless the legislation is revisited and revised.This is a somewhat modest carbon tax – after all, the social cost of carbon is many times higher – but it’s a higher carbon price than has been implemented in most countries. Moreover, a carbon tax doesn’t necessarily have to reflect the social cost of carbon. The question is whether it will be sufficiently high to meet the country’s climate targets. The Preamble begins by noting “there is broad scientific consensus that anthropogenic greenhouse gas emissions contribute to global climate change” (this is somewhat understated – carbon pollution is the dominant factor). It also notes that Canada is already feeling the impacts of climate change through factors like “coastal erosion, thawing permafrost, increases in heat waves, droughts and flooding, and related risks to critical infrastructures and food security.” The Preamble also notes that Canada ratified the Paris Agreement, whose aims include limiting global warming to less than 2°C above pre-industrial temperatures. Canada’s Paris commitment requires cutting its carbon pollution by 30% below 2005 levels by 2030. Prior to the implementation of the carbon tax, its policies were rated Highly Insufficient to meet that goal. Instead Canada’s emissions were on track to fall only about 4% below 2005 levels by 2030. So, the carbon tax is an important policy to close that gap. A $20/ton carbon tax translates into a 16.6 cent per gallon surcharge on gasoline. So, in 2022, the $50/ton carbon tax will increase Canadian gasoline prices by about 42 cents per gallon (11 cents per liter). For comparison, the average price of gasoline in Canada is $1.43 per liter, so that would be about an 8% gasoline price increase in 2022.All the taxed money will be distributed back to the provinces from which they were generated. The provinces will in turn rebate about 90% the revenues back to individual taxpayers. The rebates are anticipated to exceed the increased energy costs for about 70% of Canadian households.
Unions helped write Washington’s carbon fee initiative. Some also want to sink it. Washington state’s main labor organization lives by a proud motto: “Working people standing together.” But as voters cast their ballots in the midterm elections, they will have to decide on a carbon fee initiative that has divided the state’s labor movement, causing disunion among scores of unions.The product of a year of deal-making, Initiative 1631 would create the nation’s first fee on oil refineries and other fossil fuel industries, raising an estimated $1 billion annually for clean energy and other projects. Oil companies are spending millions of dollars to defeat the initiative, while business leaders concerned about climate change, such as Bill Gates and Michael Bloomberg, have contributed millions to pass it. But it could be the state’s union members — roughly of 580,000 them — who could provide the decisive margin for victory or defeat. Several of the state’s top labor leaders, including the president of the Washington State Labor Council, helped write the initiative, ensuring that it included provisions favored by organized labor. “Right now is no time for small changes. We have to be bold,” said Jeff Johnson, president of the Washington State Labor Council and an architect of 1631. The initiative, he said, could help labor unions become part of the solution to climate change, while accelerating the state’s transition to a more carbon-free economy. But unions that represent the building trades and refinery workers have come out against the carbon fee, fearing it could cost them jobs. Lee Newgent, former executive director of the Washington State Building & Construction Trades Council, says the initiative’s supporters exaggerate the clean-energy jobs that might result and downplay the jobs threatened. “This whole idea of green jobs is bunk,” said Newgent, a paid consultant to the “No on 1631” campaign. “The supporters can’t tell what green jobs will be created, just that they will. That is not enough for me.”
Pension Funds Point Finger at Lobbyists of Polluting Companies - A group of pension funds that control $2 trillion are pushing for 55 large European energy, mining and transportation companies to scale back their anti-climate lobbying. Sweden’s AP7, Legal & General Group Plc, the Church of England’s pension fund and Robeco of the Netherlands wrote to the chairman of each company, asking them not to use organizations that try to ease governments’ environmental rules and to be transparent about their own lobbying. The list of recipients includes 10 oil and gas companies such as Royal Dutch Shell Plc and Total SA as well as Renault SA, Glencore Plc and Airbus SE. “If these lobbying positions are inconsistent with the goals of the Paris Agreement, we would encourage you to ensure they adopt positions which are in line with these goals,” they said in the letter. Lobbying by large companies and industry associations can have a significant impact on a government’s stance on an issue. A study by Drexel University showed that the oil and gas industry spent $2 billion between 2010 and 2016 to try to influence the U.S. government on climate legislation. This is a significant barrier to governments delivering on their Paris agreement promises. In 2015, nearly 200 countries signed a landmark deal pledging to try to keep temperatures from rising more than 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial levels. “Long-term investors have a clear interest in the Paris Agreement being implemented to support the necessary transition to a low-carbon global economy,” said Stephanie Pfeiffer, chief executive officer of the Institutional Investors Group on Climate Change. “Shareholders should rightly expect companies in which they invest to advocate for the climate policy required for this to happen.” Central banks are warning financial institutions that climate risk isn’t adequately priced in to asset valuations. Bank of England governor Mark Carney has previously said that this could result in a “climate Minsky moment,” a term for the sudden collapse of asset values. Two key issues are physical risk from extreme weather and transition risk, which could result in rapid repricing and stranded assets.
China's Greenhouse Gas Emissions -- China is the world’s largest emitter of greenhouse gasses so we should be particularly interested in the level of its emissions, as well as the success of the practices and policies it pursues to reduce them. After all, China’s emissions are likely to have the greatest influence on future global warming and our ability to keep average global temperature rise to less than 2°C above those of the pre-industrial era. However, CO2 emissions in 2017 for China are not known with any accuracy, even by the Chinese government. Some estimates suggest 9.8 gigatonnes (Gt.), while others claim it to be 11.7 Gt. Clearly both can not be right and it is possible that both estimates could be wrong. The 1987 Montreal Protocol has been signed by China and 197 other countries. The Protocol commits all countries to abolish production and use of ozone depleting halocarbon gasses to zero by 2010 because they destroy the ozone layer which protects the earths surface from harmful ultra violet radiation. Halocarbons are also very powerful greenhouse gasses, particularly CFC-11 which has a lifetime in the atmosphere of 45 years or more The Kigali Amendment (2016) further requires phase-down of all hydrofluorocarbon gasses which have a greenhouse effect, some of which can be used as a substitute for halocarbons. If all countries had complied with the Montreal Protocol, it should have been expected that global CFC-11 emissions would have fallen sharply after 1995 when developed countries were required to reduce their production and use and to zero by 2010 when all other countries ceased production. However, as show in Fig. 1, this is not what has happened. On the basis of air samples taken in South Korea, NOAA’s Dr Montzka concluded that the likely source of CFC-11 emissions was in east Asia, even though all countries in that region reported to the UN administering authority that they remained in compliance with the Montreal Protocol. Apart from being an ozone destroyer, CFC-11 is also a very potent greenhouse gas with Global Warming Potential 4,750 times that of CO2. Measurement of CFC-11 concentration in the atmosphere show that around 67,000 tonnes of CFC-11, or 0.3 Gt CO2eq. are reaching the atmosphere each year from these sources. The Chinese Government has not previously been ‘officially’ aware of these and possibly other emissions when compiling statistics on greenhouse gas emissions. The Environmental Investigation Agency (EIA) determined that China was the source of these emissions. In 2018 the EIA published its report ‘Blowing It’ which concluded that at least 18 Chemical Companies in 10 Provinces are actively engaged in the production of CFC-11 and that it is used throughout China as a blowing agent for production of insulating foam products used in the building and other industries. The reason for its on-going use? It was easier to use and more profitable than use of alternative gasses.
Scientists Push for a Crash Program to Scrub Carbon From the Air -- With time running out to avoid dangerous global warming, the nation’s leading scientific body on Wednesday urged the federal government to begin a research program focused on developing technologies that can remove vast quantities of carbon dioxide out of the atmosphere in order to help slow climate change.The 369-page report, written by a panel of the National Academies of Sciences, Engineering and Medicine, underscores an important shift. For decades, experts said that nations could prevent large temperature increases mainly by reducing reliance on fossil fuels and moving to cleaner sources like solar, wind and nuclear power.But at this point, nations have delayed so long in cutting their carbon dioxide emissions that even a breakneck shift toward clean energy would most likely not be enough. According to a landmark scientific report issued by the United Nations this month, taking out a big chunk of the carbon dioxide already loaded into the atmosphere may be necessary to avoid significant further warming, even though researchers haven’t yet figured out how to do so economically, or at sufficient scale.And we’ll have to do it fast. To meet the climate goals laid out under the Paris Agreement, humanity may have to start removing around 10 billion tons of carbon dioxide from the air each year by midcentury, in addition to reducing industrial emissions, said Stephen W. Pacala, a Princeton climate scientist who led the panel. That’s nearly as much carbon as all the world’s forests and soils currently absorb each year.
As Prairies Get Plowed for Biofuels, Greens Demand EPA Act - More than a dozen environmental and conservation groups filed a petition Tuesday alleging that the EPA is illegally looking the other way as farmers plow over prairies and wetlands to grow corn needed to satisfy a U.S. biofuel mandate. The Sierra Club, the National Wildlife Federation and other organizations asked the Environmental Protection Agency to force biofuel producers to prove the crops they use come from lands cultivated before Dec. 19, 2007, a benchmark under U.S. law. The petition acts as a warning shot, signaling that if the EPA doesn’t address the issue, the groups could take the agency to court over it. The move marks the escalation of a battle over the U.S. Renewable Fuel Standard, a law that compels refiners to use corn-based ethanol and soybean-based biodiesel. Once heralded as a cleaner, safer alternative to foreign oil, biofuels are now being questioned by environmentalists who dispute their green credentials. “Millions of acres of previously uncultivated land have been converted to cropland” to satisfy the biofuel mandate “with far-reaching, deleterious environmental impacts,” the environmentalists say in their filing. “Our air, water, land and wildlife are all suffering as a result.” It wasn’t supposed to be this way. When Congress expanded the Renewable Fuel Standard as part of broad energy legislation in 2007, environmentalists pushed for safeguards designed to prevent land conversion, including a requirement that biofuels accepted under the program only come from previously farmed tracts. But instead of verifying that biofuel comes from crops grown on eligible, already cultivated land, the EPA chose to assess agricultural land use in aggregate. The activists say the EPA’s broad approach of only looking at national cropland totals obscures the real picture on the ground, because net acreage can remain the same nationwide if native grasses are plowed to grow corn for ethanol while existing farms are turned into subdivisions and shopping malls. The EPA approach also violates the Renewable Fuel Standard’s “clear and unambiguous restriction” on land conversion, while undermining the measure’s intended climate and environmental objectives, they argue.
Trump Admin E15 Boost Concerns Voters in Poll -- President Trump recently instructed the U.S. Environmental Protection Agency (EPA) to take steps that would allow gasoline blends containing up to 15 percent ethanol (E15) to be sold year-round rather than just eight months out of the year.When it announced the move, the administration claimed that expanding the availability of E15 “will strengthen America’s domestic energy production and provide a boost to America’s farmers.” According to the results of a new national poll commissioned by the American Petroleum Institute (API), most voters surveyed have reservations about the administration’s E15 proposal.“Consumers are speaking loud and clear,” API Vice President of Downstream and Industry Operations Frank Macchiarola said in a written statement outlining the results. “E15 is a symptom of the broken Renewable Fuel Standard (RFS) and it’s time for real reform. There is bipartisan agreement that the RFS is a failure and we urge the administration to support consensus legislation to significantly reform the RFS for the benefit of all consumers.” The telephone survey of 1,001 registered voters, conducted Oct. 12 through 16, 2018, by Harris Poll, concluded that:
- 79 percent of voters are concerned about expanded E15 sales and vehicle incompatibility
- 83 percent of voters are concerned that consumers could pay higher pump prices if fuel retailers need to invest in new infrastructure to accommodate certain fuel types
- 68 percent of voters are concerned about consumers accidentally using E15 and subsequently damaging their engines
- 81 percent of voters are concerned that government requirements could exceed the 10-percent level of ethanol in the U.S. fuel supply and, according to API, could raise gasoline prices by up to 26 cents per gallon
“These numbers reinforce the need for the administration to reconsider the need to allow year-round sale of E15,” said Macchiarola. “Voters understand that allowing sale of a fuel that is not designed for nearly 75 percent of cars on the road today puts consumers at risk. American families should not have to be burdened with an unexpected car repair bill because of a fuel that our government essentially pushed into the marketplace against the clear letter of the law.” According to the pro-ethanol Renewable Fuels Association (RFA), the administration’s actions would lift a “de-factor summertime ban” on selling E15 throughout most of the United States.
The Death Of Algal Biofuel - During the advanced biofuel craze of the past decade, many companies made claims that weren’t remotely credible. A long list of companies claimed they could economically convert biomass like straw or wood chips into fuel for around a dollar a gallon.Investors and taxpayers funded many ventures that were destined to fail. Technologies that were abandoned decades ago because the economics weren’t viable were revived and received government funding to once again prove that the economics aren’t viable.Cellulosic ethanol was probably the biggest offender. It isn’t cheap to convert straw into ethanol, but companies continue to try. In fact, “commercial” cellulosic ethanol is now being sold into the fuel supply, albeit it is heavily subsidized via the Renewable Fuel Standard and being produced at only a tiny fraction of the projected amounts.But right behind cellulosic ethanol in hype was biofuel produced from algae. It is true that some species of algae produce oils that can be converted into fuel. It is also true that crude oil originated from algae and plankton that lived millions of years ago, died, sunk to the bottom of the ocean, and were ultimately converted into oil. So the notion of converting algae into fuel isn’t far-fetched. However, executing this process in real time is quite expensive.. Just the act of removing the water is energy-intensive, but then the oil must be removed from the algae, and it must be converted into fuel. But that didn’t stop companies from claiming they could do it economically and seeking (and receiving) government funds to do so. One by one these companies went out of business. Last year, Greentech Media published an extensive list of these companies, some of which claimed “an acre of algae could yield 5,000 to 10,000 gallons of oil a year.” The Greentech Media story provided a pretty good overview of all the things that had gone wrong. But then last week I received a damning email from The National Algae Association (NAA) that highlighted the waste of taxpayer dollars.Quoting from the email:
California blasts Trump proposal to freeze fuel-efficiency standards as ‘flawed’ and ‘illegal’- California is coming out swinging in its official response to one of the Trump administration's most consequential attempts at rolling back regulations to date — to freeze fuel-efficiency standards for cars and trucks through 2026. In a 400-page comment on the proposed rule that will be filed today to the federal government, the California Air Resources Board warns that proposal will worsen air quality and "forfeit our best chance to fight climate change." That's according to a report by The Post's Brady Dennis and Michael Laris.The Trump administration's plan seeks to take away from California its long-standing legal ability to set its own pollution standards for cars. That tool has proved key to California cleaning up the air in its smoggy cities.During the Obama administration, the federal government and California agreed to be on the same page and craft a uniform set of standards. That meant car manufactures did not have to produce automobiles under two regulatory regimes. Along with the Obama-era Clean Power Plan, which was meant to rein in climate-warming emissions from coal-fire power, the fuel-economy standards for cars were one of President Obama's main efforts to halt the nation's contributions to climate change. In response, the National Highway Traffic Safety Administration and the Environmental Protection Agency did something unexpected under Trump: They, unlike the president himself, acknowledged climate change is happening. But they argued that since the world is already on track to warm by seven degrees Fahrenheit by the end of the century, there was little the federal government could — or should — do to curb the release of greenhouse gases today.California officials call the Trump administration's way of thinking "a nihilistic and fatalistic view that future generations will necessarily be subject to a climate in which human civilization as it currently exists is impossible.""It is also illegal,” state officials say in the filing. They point to a 2007 Supreme Court decision that ultimately compelled the federal government to address climate change.
California escalates fight with Trump administration over clean vehicle rules - Los Angeles Times: California officials upped the ante Friday in their fight with President Trump over vehicle fuel economy standards, urging the administration to withdraw its proposal to weaken federal rules and eliminate the state’s ability to set its own greenhouse gas emission guidelines. “This is high-stakes poker that's being played by the federal government,” said California Atty. Gen. Xavier Beccera, alongside Gov. Jerry Brown and California Air Resources Board Chairwoman Mary Nichols, at a news conference overlooking Interstate 5 in Sacramento. “It's not just the issue of climate change that's in the balance. It's also the health of the American people.”Becerra and 20 other state attorneys general across the country filed formal written comments in a letter Friday to the U.S. Environmental Protection Agency and National Highway Traffic Safety Administration. The letter was in response to the federal government’s August proposal to freeze federal vehicle mileage targets and end California’s autonomy to implement more stringent rules. California vows to fight Trump EPA's move to freeze fuel economy rules » The letter contends that the Trump administration’s plan “presents a significant threat to the health and safety of our citizens and our environment,” and is illegal under the federal Clean Air Act. Rather than change the proposal, the coalition of states is asking the administration to scrap it entirely. Current Obama-era federal fuel economy standards call for the nation’s cars and trucks to average more than 50 miles per gallon by 2025. California also has authority to require automakers to sell a specified number of electric vehicles, a crucial step in the state’s efforts to meet its goals to reduce greenhouse gas emissions by 40% below 1990 levels by 2030. The Trump administration plan would instead freeze vehicle mileage targets in 2020 for six years at around 37 miles per gallon and revoke California’s ability to set its own vehicle emissions standards, which 13 other states now follow. Environmental Protection Agency officials have conceded the proposal would lead to fewer emissions reductions, but argue that it would not improve vehicle and highway safety. The agency has also said California’s decades-long authority to implement emissions rules stronger than those set by the federal government isn't justified because greenhouse gases and climate change don't affect the state differently than anywhere else in the country.
Brazil elects Bolsonaro, who has threatened Amazon and global climate efforts -- Jair Bolsonaro is the next president of Brazil, sparking fears for the future of the Amazon rainforest and the global climate.In Sunday’s run-off, the right-winger won 55% of the vote, beating Fernando Haddad of the Workers’ Party.Bolsonaro has courted the mining and farming lobbies, pledging to roll back environmental protections and gut federal enforcement. Early in the campaign, he threatened to withdraw Brazil from the Paris Agreement, but backtracked last week after an outcry at home and abroad.Scientists have warned his proposed policies will send deforestation soaring, predicting clearances the size of the UK each year within a decade. That would make it “all but impossible” for Brazil to meet its climate commitments, four experts wrote in Mongabay. Bolsonaro has made grim threats to the Amazon and its people The authoritarian leader’s praise for dictatorship and hostile comments towards minorities and political activists have also raised concerns about democratic freedoms.In a televised victory speech, Bolsonaro described the result as a “celebration of freedom by a country”. He struck an inclusive tone, emphasising Brazil’s diversity, and assured the people his would be a “constitutional and democratic” government. “What I most want is to follow the teachings of God, alongside the Brazilian constitution, inspired by great world leaders,” Bolsonaro added in a video broadcast on his Facebook page, brandishing a copy of Brazil’s constitution and a biography of Winston Churchill.
Brazil’s New President Could Spell Catastrophe for the Amazon, Indigenous Rights and Global Climate - Far-right congressman Jair Bolsonaro, whose hostile campaign rhetoric has earned him comparisons to U.S. President Donald Trump, won Brazil's presidential election Sunday, a development that has raised concerns about the future of human rights and environmental action in the world's sixth-largest greenhouse gas emitter,CNN reported.Like Trump, Bolsonaro has made homophobic, sexist and racist statements and emboldened right wing groups who share his views.Also like Trump, he has talked tough about prioritizing his nation's economy over environmental regulations, at one point even threatening to withdraw Brazil from the Paris agreement, as the Huffington Post reported, though he has since walked that back.Here's how a Bolsonaro presidency might impact Brazil's environment, and the world's. Deforestation in the Amazon decreased by an impressive 70 percent from around 2005 to 2011 as a growing popular movement to protect the rainforest led to increased government regulations. From 2011 to 2017, as the country entered a more chaotic political period, the decrease in deforestation stopped, but it didn't reverse.Bolsonaro's leadership could change that. He has promised to open more of the Amazon to development and to merge the country's environment ministry with its agriculture ministry, which is controlled by agribusiness interests, The Guardian reported. He also wants to reconsider dams in the Amazon that were stopped because they posed too much of a risk to the forest. Part of Bolsonaro's plans to open more Amazon regions to industry also trample on the rights of the indigenous communities that call them home. "[Not one centimeter of land will be demarcated for indigenous reserves," Bolsonaro said during his campaign,Reuters reported. He also vowed to open existing reserves to mining and farming. "Brazil is a 'champion' of killings in the countryside. Last year, 110 indigenous people were murdered in Brazil, largely for defending their land. This can be aggravated by these statements ... because people's acts follow such signals," Paulo Barreto of Imazon told Reuters.
Electric Rickshaws Taking Off in India -- An electric-vehicle revolution is gaining ground in India, and it has nothing to do with cars. The South Asian nation is home to about 1.5 million battery-powered, three-wheeled rickshaws -- a fleet bigger than the total number of electric passenger cars sold in China since 2011. But while the world's largest auto market dangled significant subsidies to encourage purchases of battery-powered cars, India's e-movement hardly got a hand from the state. Rather, drivers of the ubiquitous three-wheelers weaving through crowded, smoggy streets discovered that e-rickshaws are quieter, faster, cleaner and cheaper to maintain than a traditional auto rickshaw. They also are less strenuous than cycle rickshaws, which require all-day peddling. So with more rides possible in a day, the e-rickshaws are proving more lucrative. As many as 11,000 new e-rickshaws hit the streets every month, and annual sales are expected to increase about 9 percent by 2021, according to Rahul Mishra, a principal at consulting firm A.T. Kearney. Three-wheeled vehicles make up a $1.5 billion market... India is the world's fourth-largest auto market, but previous attempts to boost private electric-car ownership flopped. The government likely scaled back because it fears disrupting an industry that contributes about 7 percent of the total gross domestic product, according to a Bloomberg NEF report in March.Unlike the estimated 1.35 million passenger EVs cruising around China, the number of electric cars plying Indian roads is a paltry 6,000, according to BNEF data. Chinese automakers sell more than that in three days. India's largest automaker, Maruti Suzuki India Ltd., won't sell its first EV until 2020.
Carbon dioxide emissions from the U.S. power sector have declined 28% since 2005 – EIA - U.S. electric power sector carbon dioxide emissions (CO2) have declined 28% since 2005 because of slower electricity demand growth and changes in the mix of fuels used to generate electricity. EIA has calculated that CO2 emissions from the electric power sector totaled 1,744 million metric tons (MMmt) in 2017, the lowest level since 1987. In the United States, most of the changes in energy-related CO2 emissions have been in the power sector. Since 2005, as power sector CO2 emissions fell by 28%, CO2 emissions from all other energy sectors fell by only 5%. Slower electricity demand growth and changes in the electricity generation mix have played nearly equal roles in reducing U.S. power sector CO2 emissions. U.S. electricity demand has decreased in 6 of the past 10 years, as industrial demand has declined and residential and commercial demand has remained relatively flat. If electricity emand had continued to increase at the average rate from 1996 to 2005 (1.9% per year) instead of its actual average rate of -0.1% per year, U.S. power sector CO2 emissions in 2017 would have been about 654 MMmt more than actual 2017 levels. If the mix of fuels used to generate electricity had also stayed the same since 2005, U.S. power sector CO2 emissions would have been another 645 MMt higher in 2017. The power sector has become less carbon intensive as natural gas-fired generation displaced coal-fired and petroleum-fired generation and as the noncarbon sources of electricity generation—especially renewables such as wind and solar—have grown. The substitution of natural gas for other fossil fuels has largely been market driven, as ample supplies of lower-priced natural gas and the relative ease of adding natural gas-fired capacity have allowed it to pick up share in electric power generation in many markets. In 2016, natural gas generation surpassed coal as the largest source of electricity generation. Increases in electricity generation from noncarbon power sources since 2005 also had an effect on emissions from power generation. This growth has been driven largely by state policies and federal tax incentives that encouraged adoption of renewables. In 2005, noncarbon sources accounted for 28% of the U.S. electricity mix. By 2017, that share had grown to 38%. Almost all of this growth was in renewables, including wind and solar, as shares for other noncarbon sources such as nuclear and hydroelectricity remained relatively flat.
Data show no big turnaround for coal production, employment - President Donald Trump is touting his efforts to aid the U.S. coal sector as he supports his party’s midterm election candidates, but the latest data shows that coal volume and coal jobs have remained fairly flat over the past two years as strong export markets have been offset by an ongoing structural decline in domestic demand.Among U.S. coal producers reporting third-quarter data, output rose 7.3% to 194.0 million tons, the first quarter-over-quarter increase in coal production in a year. Average coal mining employment at the same mines, as reported to the U.S. Mine Safety and Health Administration by mine operators, fell by just under 1% quarter over quarter.U.S. average coal mining jobs had been declining for years but took a steep dive in 2015 and the early months of 2016 to match rapidly declining coal production and demand from U.S. utilities. After reaching a low of 50,571 workers in the third quarter of 2016, average employment bounced slightly up in the second half of 2016 and into the first half of 2017 as international demand began to improve, but it has stayed relatively flat ever since.Third-quarter coal production at the reporting mines was the highest since the third quarter of 2017. Prior to the most recent quarter, coal production had declined three quarters in a row.Whether production continues to increase in the Powder River Basin could largely depend on how high electricity demand goes this winter. While natural gas prices have risen to levels more favorable for coal demand, Cloud Peak Energy Inc. and Arch Coal Inc. executives commented on recent earnings calls that domestic utility buying activity has remained tepid.
US Coal On Track For Record Capacity Decline, Closing 15.4 Gigawatts – The closure of coal-fired power plants across the United States is currently on track to set a new record this year, with at least 22 plants in 14 states worth 15.4 gigawatts (GW) going dark, according to a new report published by the Institute for Energy Economics and Financial Analysis.The Institute for Energy Economics and Financial Analysis (IEEFA) currently expects a total of 15.4 GW of coal-fired capacity to close during 2018 — made up of 44 units at 22 plants in 14 states across the United States. Already this year 11 GW has been closed, and IEEFA expects the trend to continue through to the end of the year, “easily” exceeding the record 14.7 GW worth of coal-fired generation capacity which was closed in 2015. “The competitive environment for coal-fired power in the generation marketplace is becoming ever more challenging as the price of renewables continues to fall and as natural gas prices are expected to remain low for the foreseeable future,” said Seth Feaster, and IEEFA data analyst and author of the report. Further, the IEEFA expects an additional 21.4 GW of coal-fired capacity closing over the next six years. This will bring the total coal-fired capacity closed between 2018 and 2024 to 36.7 GW — made up of 117 units. This will cut the country’s 246 GW coal-fired power fleet by 15% through to 2024.In 2018, coal plant closures have taken place or are expected to take place in Florida, Indiana, Kansas, Kentucky, Maryland, Minnesota, Missouri, Ohio, Pennsylvania, Tennessee, Texas, Virginia, West Virginia, and Wisconsin. Among those expected to be particularly hard-hit by the transition away from coal-fired generation are coal-plant economies in the Ohio River Valley, with employees from FirstEnergy Solutions, Murray Energy, and Westmoreland Coal expected to be among those affected — although this is just a snapshot from a particular region, and not restricted solely to this region or these companies.
Energy-Hungry Bitcoin Would Be a Climate Disaster, Study Finds - When new technologies like electricity or the dishwasher took off in the 20th century, most of the people racing to adapt them had no idea what trading candles for light bulbs would do to the Earth's climate.Researchers at the University of Hawaii have set out to make sure that doesn't happen again when it comes to a 21st century technology that has some people very excited: Bitcoin.In a study published Monday in Nature Climate Change, they calculated that if Bitcoin were adapted at the rate of other modern technologies, it would generate enough carbon dioxide emissions to push global temperatures two degrees Celsius above pre-industrial levels in less than 30 years."If this takes off it will be something that we will not be able to control," study lead author and University of Hawaii Associate Prof. Camilo Mora told Bloomberg.This is because Bitcoin requires a massive amount of energy. Bitcoin is a digital currency that is only exchanged computer-to-computer. New Bitcoin enters the system through an energy-intensive process called mining that requires computers to solve difficult mathematical problems. Last year, the use of Bitcoin generated 69 million tons of carbon dioxide, equal to the emissions of Austria, USA Today reported. The researchers found that if Bitcoin is incorporated into widespread use at the slowest rate of other new technologies, the planet would warm two degrees Celsius in 22 years; if it is incorporated at an average rate, we would pass that marker in 16 years."Currently, the emissions from transportation, housing and food are considered as the main contributions to ongoing climate change," paper co-author and University of Hawaii student Katie Taladay told USA Today. "In our paper, we show that bitcoin should now be put in the list of additional concerns."
Bitcoin can push global warming above 2 degrees C in a couple decades -- A new study published in the peer-reviewed journal Nature Climate Change finds that if Bitcoin is implemented at similar rates at which other technologies have been incorporated, it alone could produce enough emissions to raise global temperatures by 2°C as soon as 2033. "Bitcoin is a cryptocurrency with heavy hardware requirements, and this obviously translates into large electricity demands," said Randi Rollins, a master's student at the University of Hawaii at Manoa and coauthor of the paper. Purchasing with bitcoins and several other cryptocurrencies, which are forms of currency that exist digitally through encryption, requires large amounts of electricity. Bitcoin purchases create transactions that are recorded and processed by a group of individuals referred to as miners. Miners group every Bitcoin transaction made during a specific timeframe into a block. Blocks are then added to the chain, which is the public ledger. The verification process by miners, who compete to decipher a computationally demanding proof-of-work in exchange for bitcoins, requires large amounts of electricity. The electricity requirements of Bitcoin have created considerable difficulties, and extensive online discussion, about where to put the facilities or rings that compute the proof-of-work of Bitcoin. A somewhat less discussed issue is the environmental impacts of producing all that electricity. A team of UH Manoa researchers analyzed information such as the power efficiency of computers used by Bitcoin mining, the geographic location of the miners who likely computed the Bitcoin, and the CO2 emissions of producing electricity in those countries. Based on the data, the researchers estimated that the use of bitcoins in the year 2017 emitted 69 million metric tons of CO2. Researchers also studied how other technologies have been adopted by society, and created scenarios to estimate the cumulative emissions of Bitcoin should it grow at the rate that other technologies have been incorporated. The team found that if Bitcoin is incorporated, even at the slowest rate at which other technologies have been incorporated, its cumulative emissions will be enough to warm the planet above 2°C in just 22 years. If incorporated at the average rate of other technologies, it is closer to 16 years. "We cannot predict the future of Bitcoin, but if implemented at a rate even close to the slowest pace at which other technologies have been incorporated, it will spell very bad news for climate change and the people and species impacted by it," said Camilo Mora, associate professor of Geography in the College of Social Sciences at UH Manoa and lead author of the study.
World's Biggest NO2 Emissions Hotspots Revealed -- Greenpeace has revealed the world's largest nitrogen dioxide (NO2) air pollution hotspots across six continents, and identified Mpumalanga, South Africa as the biggest NO2 hotspot, even outranking areas in China, India and the U.S.The lush, green province is home to the southern half of Kruger National Park and the iconic Blyde River Canyon. At the same time, it's home to a dozen coal fired power plants owned and operated by the power utility Eskom.NO2 is a dangerous pollutant that's emitted when fossil fuels such as coal, oil, gas or diesel are burned at high temperatures, and also comes from transportation, forest fires and crop burning. The gas can react to create smog, acid rain and is central to the formation of fine particles and ground ozone, which are both linked to adverse health effects."The health toll from these emissions shows the need for an energy revolution that eliminates our reliance on fossil fuels: renewable power generation, energy efficiency, transport and mobility systems that rely less on private cars, as well as electric vehicles," Greenpeace explained in a report.Greenpeace's new analysis is based on data produced by the European Space Agency's Sentinel 5P satellite, which measures air pollution in the atmosphere, between June to August 2018. Besides Mpumalanga being the biggest NO2 hotspot, the findings show that China has the world's highest number of individual hotspots, followed by the Middle East, the European Union, India, the U.S. and the Democratic Republic of Congo, Quartz Africa noted from the study.
Justices to decide whether villagers can sue over coal plant -- A long-running battle over a coal-fired power plant in India lands at the Supreme Court this week in a case that could have big implications for international environmental law. The justices are set to hear arguments in Budha Ismail Jam v. International Finance Corp., a dispute that pits Indian fishermen and farmers against an arm of one of the globe's most powerful financial institutions, the World Bank Group. The Indian villagers say the International Finance Corp., the World Bank's private lending arm, must answer for environmental and economic damage caused by a coal plant it financed in the coastal province of Gujarat. The IFC provided a $450 million loan for the Tata Mundra Ultra Mega Power Project in 2008 to help supply electricity to the region. IFC officials helped craft a plan to address potential environmental and social impacts and left the plant operator in charge of ongoing management of those risks. Fishermen and farmers say the organization should have ensured the environmental protection measures occurred. Instead, they say, air pollution and cooling system discharges from the facility are harming local communities, groundwater and fish. The villagers made their case in federal court in Washington, D.C., arguing that the U.S.-based IFC violated its own procedures and failed to enforce the loan agreement to minimize environmental impacts. The district court found the organization is immune from lawsuits in American courts, and an appellate court agreed. The immunity question now goes to the Supreme Court, which will decide whether challengers like the Indian fishermen have the right to take the IFC to court. Environmental law experts say the Supreme Court's ruling could have broader effects, making international organizations more accountable for their actions.
French public opinion growing against nuclear power - The French public is becoming less and less in favour of nuclear power, as awareness and concern for the environment grows, according to a new study. Over half (53%) of French people said they were now opposed to nuclear power, in the survey by pollster Odoxa. This is compared to 67% who said they were in favour, in a another poll five years ago. The change in opinion has been attributed to the growth and improvement in renewable energy sources, and the rising awareness of the public towards the environment. The safety of nuclear reactors has also been in question recently, after a spike in breakdowns, and more and more people living within 80 km of a central reactor. Environmental campaigner Greenpeace, said: “We have gone from a world in which French society believed that nuclear was the only choice. But now, with the rise in renewable energy, with sun and wind, we can bypass nuclear completely.”
Belgium faces winter blackouts amid nuclear reactor shutdowns -- A forced shutdown of one nuclear reactor in the lead up to winter may be regarded as unfortunate. But the closure of six of the seven reactors responsible for supplying 40% of Belgium’s electricity is raising eyebrows, even in a country so prone to chaotic administration.An emergency “load shedding” plan has been updated, under which motorway lights will be switched off, industrial production suspended and rolling three-hour blackouts launched in homes nationwide should temperatures drop in the coming months and demand outstrip the now limited electricity supply.Residents have also been warned bills could increase, despite the suggestion that they might need to iron less and use just one pot to cook.The impending crisis stems from the discovery at the end of last month of “concrete degradation” at the Tihange nuclear power plant, west of Liege, forcing the closure of its three reactors. Unfortunately, three of the four reactors at Belgium’s second nuclear plant, in Doel, near Antwerp, are also out of action due to planned repairs.. A gas-fired power plant in Vilvoorde has been restarted to fill some of the supply gap. A deal has been struck for France to provide electricity, but that might not be possible if it is hit by a cold snap. There are also technical obstacles emerging to plans to source power from Germany.
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. “I think you should do things where people want them to happen, so I would be very inclined to be against it,” Trump said in Oct. 20 interview with KRNV-News 4. “We will be looking at it very seriously over the next few weeks, and I agree with the people of Nevada.”
DOE comments show little support for FirstEnergy bailout request - Most stakeholders weighing in on FirstEnergy Solutions Corp.’s plea in March for federal intervention to support its financially struggling coal-fired and nuclear power plants in the PJM Interconnection were opposed to the request, according to documents obtained from the U.S. Department of Energy.Out of 152 responses on the request the DOE received through May 24, the vast majority urged the department not to grant FirstEnergy Solutions’, or FES’s, application, according to documents S&P Global Market Intelligence received through a Freedom of Information Act request. The DOE has yet to announce a decision on the company’s petition or other agency efforts to prop up vulnerable coal and nuclear units.The DOE did not open a formal comment period on the request but said in April that it would accept stakeholder input on the agency’s ability to declare an emergency under FPA 202(c), including in response to the FES application. The DOE has invoked its 202(c) authority sparingly in the past, mostly in response to temporary energy shortfalls following hurricanes and other emergency events.As a result, several gas and power industry groups said the statute should not be used to provide the market relief FES sought in its 202(c) application. More fundamentally, most stakeholders backed PJM’s assertion that no grid emergency existed in the region to justify subsidizing FES’s at-risk plants. “The proposed actions would tilt the table and not only undermine, but potentially destroy, new private competitive investment, and perhaps more importantly, substantially add to the cost of power to consumers in the region,” independent power producer Calpine Corp. said in comments to the DOE.
U.S. OKs wider startup of Enbridge Ohio-Michigan NEXUS natgas pipe (Reuters) - U.S. energy regulators on Friday approved part of Canadian energy company Enbridge Inc’s request to put more of its $2.6 billion NEXUS natural gas pipeline from Ohio to Michigan into service. In a filing, the U.S. Federal Energy Regulatory Commission (FERC) said it approved the company’s request to put the Clyde compressor station in Sandusky County, Ohio, into service, but not the Wadsworth compressor in Medina County, Ohio. FERC said once NEXUS demonstrates restoration progress at Wadsworth, it would reconsider the company’s request to put that facility in service. Enbridge sought FERC permission to put both compressors into service on Oct. 19. NEXUS is one of several gas pipelines designed to connect growing output in the Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio with customers in other parts of the United States and Canada. Earlier in October, FERC allowed Enbridge to put facilities into service that would enable NEXUS to transport about 0.97 billion cubic feet per day (bcfd). One billion cubic feet of gas is enough to fuel about 5 million homes for a day. Once the 255-mile (410-km) NEXUS project is fully in service, it will be able to carry up to 1.5 bcfd of gas from the Marcellus and Utica shale fields to the U.S. Midwest and Gulf Coast and Ontario in Canada. NEXUS is a partnership between Enbridge and Michigan energy company DTE Energy Inc. Separately, Enbridge said it put part of its $200 million Texas Eastern Appalachian Lease (TEAL) gas pipeline project into service earlier in October. TEAL is an expansion of Enbridge’s Texas Eastern system designed to deliver 0.95 bcfd to NEXUS. When it started construction of NEXUS in late 2017, Enbridge estimated it would be able to complete TEAL and NEXUS in the third quarter of 2018. Enbridge said it completed NEXUS in September when it asked FERC for permission to put part of the pipeline into service. New pipelines built to remove gas from Appalachia have enabled shale drillers there to boost output to an estimated record high of around 29.8 bcfd in November from 26.1 bcfd during the same month a year ago. That represents about 36 percent of the nation’s total dry gas output of 81.1 bcfd expected on average in 2018. The Appalachia region produced just 1.6 bcfd, or 3 percent of the country’s total production, in 2008.
Chesapeake completes $2B Utica asset sale; closes quarter with profit - The company that pioneered Utica Shale drilling in Ohio has completed the sale of its holdings in the state. Chesapeake Energy announced Tuesday morning during a conference call with investors it closed its $2 billion sale to Encino Acquisition Partners on Monday. EAP is a partnership between the Canada Pension Plan Investment Board and Encino Energy, a private oil and gas company based in Houston. When announcing the sale in July, the companies said the deal included 900,000 acres and approximately 900 wells, with related equipment and property. On Tuesday, Chesapeake said it was running two rigs in the Utica and placed 11 wells into production during the third quarter. The Oklahoma City-based company’s Utica wells averaged daily production of 10,000 barrels of oil, 488 million cubic feet of natural gas and 28,000 barrels of natural gas liquids during the quarter. Chesapeake’s earnings were originally scheduled for release Wednesday, but the company moved up the date to announce its nearly $4 billion deal to buy Houston-based WildHorse Resource Development, a company with operations in the Eagle Ford Shale and Austin Chalk formations in Texas. Chesapeake closed the quarter with a profit of $60 million or 7 cents per diluted share for common stockholders.
Eclipse Resources Encouraged By First Pennsylvania Utica Well - Eclipse Resources Corp. said Thursday that its first Utica Shale well in north-central Pennsylvania came online at 32 MMcf/d and has continued to perform at that rate for more than 30 days, exceeding the company’s expectations in an underdeveloped part of the play. “After initial cleanup, the well’s production quickly achieved our target rate of approximately 32 MMcf/d, which was expected to continue for an initial flat period of 30 days,” said CEO Benjamin Hulburt. “The well’s production continued at this level after reaching the 30-day period, which is encouraging to us and we will be continuing to monitor this well’s performance closely.”The Painter 2H is the latest Utica well to come online in Tioga County, hundreds of miles east of the Utica core in southeast Ohio. Eclipse brought the well online during the third quarter, nearly a year after it announced the 44,500 net acre acquisition of its Flat Castle area in Tioga and Potter counties. The well was completed with a lateral length of 13,800 feet.Hulburt also said the company’s all-stock merger with Blue Ridge Mountain Resources Inc. (BRMR) remains on track to close by the end of this year. BRMR would become an Eclipse subsidiary under the deal.Earlier this week, BRMR, which operates in southeast Ohio and northern West Virginia, updated full-year guidance and is now calling for 187-212 MMcfe/d of production. As a result, Eclipse said the combined company is forecast to produce 560-600 MMcfe/d of production in the fourth quarter instead of the previously forecast range of 500-560 MMcfe/d.During the third quarter, Eclipse produced 346.4 MMcfe/d, a decline from 353 MMcfe/d in the year-ago period, but up from 305.5 MMcfe/d in 2Q2018. The company cut spendingearlier this year and lowered its annual guidance as a result.The company reported record revenue of $130.1 million in the third quarter, a 42% increase from the year-ago quarter, as prices increased on more takeaway in the Appalachian Basin. Including cash settled derivatives and firm transportation, Eclipse earned $3.34/Mcfe during the period, compared to $2.59/Mcfe a year ago.Eclipse reported net income of $4 million (1 cent/share) for the third quarter, versus a net loss of $16.7 million (minus 6 cents) in 3Q2017.
Energy Transfer completes last segments of Rover natgas pipe in W Virginia - (Reuters) - U.S. pipeline company Energy Transfer LP said on Friday that federal energy regulators approved the company’s request to put the last two segments of its $4.2 billion Rover natural gas pipeline into service:
- * The U.S. Federal Energy Regulatory Commission (FERC) allowed Energy Transfer to put its Sherwood and CGT laterals in West Virginia into service.
- * Energy Transfer originally planned to complete Rover in November 2017, but since starting construction in March 2017, has been delayed by numerous notices of violation in Ohio and other states, some of which led to temporary stop work orders from state and federal regulators.
- * The 713-mile (1,148-kilometer) Rover is designed to carry up to 3.25 billion cubic feet per day (bcfd) of gas from Pennsylvania, West Virginia and Ohio to Michigan.
- * One billion cubic feet is enough gas to supply about five million U.S. homes for a day.
- * Rover has been entering service in phases since August 2017 as Energy Transfer completed each section.
- * Major producers signed up to use Rover include units of privately held Ascent Resources, Antero Resources Corp, Range Resources Corp, Southwestern Energy Co, Eclipse Resources Corp and EQT Corp.
- * Rover is one of several pipelines under construction this year to connect growing output from the Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio to customers in other parts of the United States and Canada.
- * New pipelines built to remove gas from the Appalachia region will enable shale drillers there to boost output in to a projected record high of around 29.8 bcfd in November from 26.1 bcfd during the same month a year ago, according to federal energy data.
- * That represents about 36 percent of the nation’s total dry gas output of 81.1 bcfd expected on average in 2018. The Appalachia region produced just 1.6 bcfd, or 3 percent of the country’s total production, in 2008.
Appalachian producers boost natural gas output in Q3 - — Increased takeaway capacity combined with higher prices for natural gas liquids continues to drive gas production increases in the Northeastern US. "This quarter's cash flow was more than 40% higher than the same period last year," said Southwestern Energy CEO Bill Way during an earning's call Friday morning. "Results benefited from our returns-focused growth of liquids as prices improved, from our leading low cost gas transportation portfolio as regional basis tightened and from operational achievements made by our leading operational team." Northeast producers have been readying themselves to take advantage of incremental production takeaway capacity from pipeline projects that are now being placed in-service at long last. In tandem with Energy Transfer Partners' Rover Pipeline and Williams' Transco Atlantic Sunrise expansion placing facilities in-service over the past two months, large drawdowns in well inventory materialized in Ohio and Western Pennsylvania, while rig releases in Northeast Pennsylvania have also strengthened. Southwestern, which was the fourth-largest gas producer in the US during the second quarter, according to the Natural Gas Supple Association, increased its Appalachian production during the third quarter by 22%. Fellow Northeast producer Cabot Oil and Gas, which was the fifth-largest US gas producer during the second quarter, increased its average daily production during the third quarter by 10% to 2.02 Bcf/d on average, according to the company's latest earning's report released Friday. As a result of incremental pipeline takeaway capacity becoming available, forward basis pricing at the Dominion South supply hub has strengthened and could encourage continued production growth. Operators in the Northeast have long-awaited the full in-service of ETP's Rover Pipeline, which is designed to transport 3.25 Bcf/d of Appalachian gas in Ohio, West Virginia and Pennsylvania to the US Midwest and the Dawn Hub in Ontario, Canada. While roughly 1.5 Bcf/d of capacity has been available since September 2017 from Phase I of the project, the lion's share of capacity, coming from Phase II, was delayed into August 2018 due to unforeseen regulatory and construction delays. As most Phase II facilities have received FERC approval and been placed in-service, flows on Rover have reached as high as 3 Bcf/d in recent days, according to S&P Global Platts Analytics. Thus far, a majority of the volumes hitting the pipeline likely were the result of rerouted volumes from other regional pipelines, including Texas Eastern and Columbia Gas, rather than incremental Northeast production.
CNX Expecting Appalachian Output to Rebound By Year’s End - CNX Resources Corp. expects production to peak in the fourth quarter now that the operational issues it faced earlier in the year have been resolved. The company has reported sequential production declines since early this year on asset sales and issues at well pads, such as retrieving downhole equipment and production casing problems, that have forced it to adjust its turn-in-line (TIL) schedule. The company still remains on track to bring 68 wells online by the end of the year, COO Tim Dugan said this week during a call to discuss third quarter results, and expects production to peak after a number of wells were placed to sales late in the third quarter. CNX produced 119 Bcfe during the period, up from 101 Bcfe at the same time last year. Third quarter volumes declined slightly from 122.6 Bcfe in 2Q2018, but the company had guided for the decline on the cadence of its TIL schedule following the operational issues earlier in the year. The company also completed the sale of its Utica Shale joint venture assets to Ascent Resources LLC in August and lost some production. While the midpoint of its guidance remains unchanged, CNX lowered it slightly at the high end. Full-year production now is forecast at 497.5-507.5 Bcfe, compared to the previous range of 490-515 Bcfe. While the Marcellus Shale accounted for the bulk of the company’s third quarter production at 70.6 Bcfe, Utica Shale volumes from Monroe County, OH, and Pennsylvania continued climbing. CNX said it produced 33.6 Bcfe in the play during the third quarter, up 67% from a year ago. As most other Appalachian operators have, CNX said its average quarterly realized prices increased. The company said it earned $2.92/Mcfe during the third quarter, up from $2.50/Mcfe a year ago. Revenue also increased to $397 million from $287 million over the same time. CNX reported third quarter net income of $125 million (59 cents/share), compared with a net loss of $26 million (minus 11 cents) in 3Q2017.
Why Plans to Turn America's Rust Belt into a New Plastics Belt Are Bad News for the Climate - DeSmog (blog) --The petrochemical industry anticipates spending a total of over $200 billion on factories, pipelines, and other infrastructure in the U.S. that will rely on shale gas, the American Chemistry Council announced in September. Construction is already underway at many sites. This building spree would dramatically expand the Gulf Coast’s petrochemical corridor (known locally as“Cancer Alley”) — and establish a new plastics and petrochemical belt across states like Ohio, Pennsylvania, and West Virginia. If those projects are completed, analysts predict the U.S. would flip from one of the world’s highest-cost producers of plastics and chemicals to one of the cheapest, using raw materials and energy from fracked gas wells in states like Texas, West Virginia, and Pennsylvania.Those petrochemical plans could have profound consequences for a planet already showing signs of dangerous warming and a cascade of other impacts from climate change. Some of the largest and most expensive petrochemical projects in the U.S. are planned in the Rust Belt states of Ohio, West Virginia, Pennsylvania, and New York, a region that has suffered for decades from the collapse of the domestic steel industry but that has relatively little experience with the kind of petrochemical complexes that are now primarily found on the Gulf Coast.In November 2017, the China Energy Investment Corp., signed a Memorandum of Understanding with West Virginia that would result in the construction of $83.7 billion in plastics and petrochemicals projects over the next 20 years in that state alone — a huge slice of the $202.4 billion U.S. total. Those plans have run into snags due to trade disputes between the U.S. and China and a corruption probe, though Chinese officials said in late August that investment was moving forward. The petrochemical industry’s interest is spurred by the fact that the region’s Marcellus and Utica shales contain significant supplies of so-called “wet gas.” This wet gas often is treated as a footnote in discussions of fracking, which tend to focus on the methane gas, called “dry gas” by industry — and not the ethane, propane, butane, and other hydrocarbons that also come from those same wells.
Work stopped on pipeline that exploded in Beaver County, after Pa. regulators find environmental violations - Energy Transfer LP, the operator of the Revolution Pipeline that exploded near Monaca last month, has been ordered by state regulators to stop all work on that pipeline because of subsequent environmental violations. The Pennsylvania Department of Environmental Protection issued an order to the Texas-based pipeline company on Monday alleging that its construction practices are failing to control erosion and soil movement and have impacted several streams in the area.The company must stop all earth moving activities, temporarily stabilize its work sites and submit a series of plans before it can continue with its work to get the pipeline back up and running again.Soil movement, specifically a landslide, is believed to be the cause of the early morning rupture on Sept. 10 which burned down a house at the end of a suburban street in Beaver County. The Revolution pipeline, a 45-mile natural gas line that runs through Washington, Allegheny, Beaver and Butler counties, was activated just a week prior to the burst, which burned down a house at the end of a suburban street in Beaver County.According to the Beaver County Conservation District, the construction of the Revolution pipeline was marked by land slips — in part because of the unusually wet conditions in the region, including at the site of the explosion.Jim Shaner, executive director of the Beaver County agency, told the Post-Gazette last month that the company had installed the erosion controls as designed “but they were not working.”The Pennsylvania Public Utility Commission is leading the ongoing investigation into the failure. “The line will remain out of service until (Energy Transfer) can provide documentation that demonstrates that they are compliant with the federal and state codes and can operate the pipeline safely,” PUC spokesman Nils Hagen-Frederiksen said. The DEP, meanwhile, inspected the pipeline work over the course of four days last week and found that poor erosion control practices persisted, causing sediment pollution to flow into Raccoon Creek, Service Creek, Elk Horn Run, and tributaries to Raccoon Creek, Brush Run and Moon Run. Energy Transfer also hasn’t provided the DEP with its inspection reports and failed to report instances of non-compliance, the agency charged.It ordered the company to produce a plan to come into compliance with its permits by Nov. 9. By Dec. 3, Energy Transfer is to outline how it will manage storm water along the pipeline corridor once construction is complete.
A Pipeline, a Protest, and the Battle for Pennsylvania's Political Soul - Mariner East isn’t a typical suburban line, carrying gas to heat people’s homes. When completed, the pipeline will carry highly explosive natural-gas liquids—compressed ethane, butane, and propane—three hundred and fifty miles from the Marcellus shale gas fields in western Pennsylvania to a port in Philadelphia. From there, the chemicals will be transported to Scotland, formed into pellets called nurdles, and made into plastic. The project is owned by Energy Transfer Partners—the parent company of Sunoco, which also owns the Dakota Access Pipeline—and it is part of an ongoing multibillion-dollar effort to monetize the state’s natural-gas resources. The company claims that the pipeline will create nine thousand jobs, and will have an economic impact in the state of more than nine billion dollars. The company also has a dismal safety record: its pipelines experience a leak or accident every eleven days, on average. In Pennsylvania, there is no state agency tasked with deciding where pipelines carrying hazardous liquids can be placed. As a result, E.T.P. can lay the line wherever it wants, without constraints, including through people’s property. If there’s a leak, the company instructs residents to “leave the area by foot immediately and attempt to stay upwind,” but there’s no guidance for people to determine whether they are in a safe area. Within the blast zone, ringing a doorbell, making a phone call, opening a garage door, turning lights on, or running an engine could ignite a fatal explosion. “It makes it hard to imagine how the forty-one schools that sit within the blast zone would manage with small children,” Friel Otten told me. The company did not respond to requests for comment, but it claims that it has recently reduced its rate of accidents per thousand miles by thirty per cent, bringing it into alignment with the rest of the industry.
Mariner East & Atlantic Sunrise Pipeline Contractor Now in Bankruptcy - The main contractor on the Atlantic Sunrise and Mariner East 2 gas pipelines that run through Lancaster County has declared bankruptcy. Ohio-based Welded Construction LP was sued in Oklahoma by Atlantic Sunrise owner Williams Partners. Williams alleges Welded overcharged the company and had accounting failures and other contract breaches.Williams has withheld $23 million from the company. The nearly 300-mile, $3 billion Atlantic Sunrise natural gas project — which goes through 37 miles of Lancaster County — began moving gas on October 6th. Sunoco, owner of the 300-mile Mariner East 2 natural gas liquids pipeline, terminated its contract with Welded, alleging the company failed to comply with environmental requirements.The pipeline, which goes through 8 miles of northeastern Lancaster County, has been beset with spills and fines that have delayed the project. After the legal actions by the two pipeline builders, Welded filed for Chapter 11 bankruptcy.
Residents Speak Out Against Mountaineer Gas Pipeline and Rockwool at Public Hearing in Shepherdstown - The West Virginia Public Service Commission traveled to Shepherdstown this week for a public hearing to address concerns about a pipeline expansion project in the Eastern Panhandle. About a hundred people showed up to rally before the event. Dozens went on to speak during the hearing – and many took the opportunity to mention the controversial Rockwool manufacturing company.Martinsburg resident Stewart Acuff was one of several people who spoke against the pipeline and Rockwool at the PSC’s hearing Wednesday night.“The people of the Eastern Panhandle of West Virginia have said over and over and over again in huge numbers, we don’t want this damn pipeline, and we don’t want Rockwool,” Acuff said. Many attendees asked the PSC commissioners not to approve Mountaineer Gas’ expansion pipeline into the Eastern Panhandle. That pipeline is being built between Berkeley Springs and Martinsburg, and construction began in March. It will be more than 22 miles long.Project developers Mountaineer Gas and TransCanada say the pipeline will bring natural gas to Jefferson and Morgan Counties. Mountaineer Gas has proposed to invest nearly $120 million for infrastructure replacements and system upgrades from 2019 through 2023, including roughly $16.5 million for ongoing investments to expand and enhance service in Morgan, Berkeley and Jefferson counties. But several residents at the hearing shared concerns about the pipeline’s impact on the Panhandle's karst geology of sinkholes, springs and caves. Speakers also mentioned a controversial insulation manufacturing plant being built in Ranson just a few miles from public schools and homes. The plant, Denmark-based Rockwool, will make stone wool insulation. The Ranson facility would feature two, 21-story smokestacks releasing chemicals like formaldehyde. Rockwool has said the gas pipeline would be crucial for its operation.
Dominion Energy 3Q18: Atlantic Coast Pipeline Delayed to 2020 - Dominion Energy shared two bits of big news yesterday during their third quarter 2018 update. The first is that they’ve agreed to sell their 50% stake in Blue Racer Midstream (see Dominion Sells Its 50% Share in Blue Racer Midstream for $1.5B). The second bit of news, big news (for us), is that Atlantic Coast Pipeline (ACP) is now officially delayed–from late 2019 to “mid-2020” for a full startup. The price tag for ACP is going up too: $7 billion (up from $6.5 billion). But it’s not all bad news for ACP. Some pieces of the project will still go online in 2019, just not all of it. Dominion is taking a “phased in-service approach” to bringing the project online. The delays are due to the “FERC stop work order and delays obtaining permits necessary for construction.” We put it this way: The delays due to a myriad of frivolous lawsuits from Big Green groups means everyone will now pay more. Thanks Big Green. Details from the official 3Q18 update about ACP and the related Supply Header Project: The FERC stop work order and delays obtaining permits necessary for construction have impacted the cost and schedule for the project. As a result, project cost estimates have increased from a range of $6.0 to $6.5 billion to a range of $6.5 to $7.0 billion, excluding financing costs.Atlantic Coast Pipeline is pursuing a phased in-service approach with its customers, whereby we maintain a late 2019 in-service for key segments of the project to meet peak winter demand in critically constrained regions served by the project. ACP will be pursuing a mid-2020 in-service date for the remaining segments of the project. Abnormal weather and/or work delays (including delays due to judicial or regulatory action) may result in cost or schedule modifications in the future.The Supply Header project target in-service remains late 2019. “We have been constructing ACP in West Virginia and North Carolina and on October 19 we received the final Virginia permit required to petition FERC to be underway with full mainline construction in all three states,” Farrell said. “Following approval from FERC of our Notice to Proceed filing, we will begin mainline construction in Virginia.”“We continue to achieve key milestones toward the successful completion of this critical energy infrastructure project and look forward to delivering safe, reliable, and affordable energy to our customers in time to meet peak demand for the 2019/20 winter season,” Farrell added. (1) Below are excerpts from CEO Tom Farrell’s prepared remarks on the quarterly analyst conference call. Of note:
- The $1.3 billion Greensville Power Station (Greensville County, VA), Virginia’s largest natgas-fired power station, is 98% done now and will be online producing electricity “in early December.”
- ACP is currently under construction in both West Virginia and North Carolina, and with the recent permits from Virginia, will soon be under construction there too.
- They remain committed to buying South Carolina’s SCANA Corporation and aim to complete it by the end of this year.
Why a Democratic candidate opposing offshore drilling is getting Republican support in Trump country - In his third ad of this year’s midterm elections, a wetsuit-clad Joe Cunningham bobs off the South Carolina coast. Treading water, the ocean engineer-turned Democratic candidate for Congress explains that he’s always opposed offshore drilling and that if elected, he’ll “make sure we never do” drill along South Carolina’s coast.The ad reflects what’s among the biggest issues facing South Carolina’s First District, which is home to the majority of the state’s 2,876 miles of serpentine coastline and barrier islands. Tourists flock to the shores for the sandy beaches and unobstructed views of gently curling waves, driving the region’s economy. But a sweeping offshore drilling plan unveiled earlier this year by the Trump administration threatens to upend all that. And local opposition might just be enough to flip the district blue for the first time in nearly 40 years. When the Trump administration first announced its plan to open 90 percent of U.S. waters in the outer continental shelf to oil and gas extraction, Mark Sanford, the Republican representative for the district, announced that he was against it. But Sanford lost his primary to Katie Arrington, a local state representative who campaigned on supporting Trump’s offshore drilling plan. Though she has since flipped on the issue, her stance presented a contrast for Cunningham who is now challenging her in a tight race for the general election.
Oil industry woos SC African-Americans to support offshore drilling - The oil interest lobbying organization American Petroleum Institute has launched a campaign targeting minority communities, including African-Americans, to promote offshore exploration and drilling for natural gas and oil. The pitch is it’s a job creator.The effort is gauged to counter massive opposition to the offshore alternative that numbers in the millions of individuals and groups.That opposition is largely people who are white — one of its acknowledged weak points.But the institute’s Explore Offshore campaign has sparked some outrage. “I’m not surprised in this political climate,” said Marquetta Goodwine, a Beaufort County resident who goes by Queen Quet. She has been dubbed chieftess of the Gullah/Geechee Nation.She is among the more prominent drilling opponents who are African-American. “Those things make me highly irate,” she said.But the campaign has won some support.“Quite frankly, what I was concerned about was there were a whole lot of white people (at a public meeting on the issue) and not a whole lot of black people,” said Stephen Gilchrist, chairman of the South Carolina African American Chamber of Commerce and the Explore Offshore effort in South Carolina.“African-Americans are economically disenfranchised on the coast,” he said.The campaign has been taken up by the African-American chamber as well as at least 68 other businesses, pro-business groups and anti-tax groups in the Southeast, from Virginia to Florida. In South Carolina, they include thePalmetto Promise Institute and S.C. Association of Taxpayers.Industry analyst Offshore Technology reported the campaign specifically focuses on minority communities and that its support reflects the focus. “These groups include a large representation from black, Hispanic and minority communities, which historically have shown less support for offshore oil and gas exploration than others — something the API is keen to change,” the report said.
Listen: Speculation continues as US Strategic Petroleum Reserve faces uncertain future –Podcast - On this week's Platts Capitol Crude, Ken Vincent, the chief of staff with the DOE's Office of Fossil Energy, talks exclusively about the Strategic Petroleum Reserve as speculation ramps up that the Trump administration may be considering a release from government oil stocks. Listen now...
Entergy investigators: Company knew or should have known about paid actors at council meetings - Executives at Entergy New Orleans “knew or should have known” that actors were hired to appear at City Council meetings and voice support for the company’s proposed eastern New Orleans power plant, a City Council-commissioned investigation concluded.The results of the investigation were released Monday night, and the council will hold a special meeting on Wednesday at 1 p.m. to formally receive it and hear a presentation from the investigators. The council, which regulates Entergy New Orleans, is considering levying a fine of up to $5 million against the company.The council called for the investigation of the so-called “astroturfing” campaign after The Lens reported that dozens of people, including professional actors, were paid between $60 and $200 to come to City Council meetings in October 2017 and February 2018 in support of a proposed power plant in eastern New Orleans. The council hired a team of lawyers from the firm of Sher, Garner, Cahill, Richter, Klein & Hilbert, led by former federal prosecutor Matt Coman. Retired Judge Calvin Johnson was also part of the team. In May, Entergy released the results of an internal investigation, denying that its employees knew anything about the scheme and blaming its public relations contractor, The Hawthorn Group, for hiring a third company, Crowds on Demand, which ultimately recruited the actors. “Even after the revelation that came as a result of the investigative report by The Lens and there was no question that people were paid by Hawthorn or Crowds on Demand, ENO continued to deny it had any knowledge of the payments and maintained it did nothing wrong,” investigators wrote. But the evidence indicates otherwise, the report says.
$10B LNG Facility Starts Commissioning Phase - Cameron LNG has begun the commissioning process for the support facilities and first liquefaction train of Phase 1 of its liquefaction-export project in Hackberry, La., Sempra Energy reported Friday.“All major construction activities have been completed to begin the commissioning and start-up process to produce LNG from the first liquefaction train,” Joseph A. Householder, Sempra’s president and chief operating officer, said in a written statement. “This is a significant milestone for this landmark U.S. energy infrastructure facility – an important step forward in advancing our strategic vision to become North America’s premier energy infrastructure company.” Sempra, which indirectly owns a 50.2-percent stake in Cameron LNG, noted that the commissioning process includes:
- Testing all support systems, combustion turbines and compressors
- Delivery of feed gas from the transmission pipeline
- Production of the first LNG
Once the Federal Energy Regulatory Commission (FERC) approves all of the commissioning steps and all steps are successfully completed for the first train, LNG production will begin and ramp up to fully production for delivery to global markets, Sempra stated. Other Cameron LNG owners include Total, Mitsui & Co., Ltd. and Japan LNG Investment, LLC, which is owned by Mitsubishi Corp. and Nippon Yusen Kabushiki Kaisha (NYK). Phase 1 of the $10 billion Cameron LNG project comprises the facility’s first three liquefaction trains. Sempra stated that all three trains should be producing LNG next year. The company that the facility is projected to export 12 million tonnes per annum (mtpa) – or approximately 1.7 billion cubic feet per day (Bcfd) – of LNG. According to the Cameron LNG website, the second-phase expansion would add two liquefaction trains with an LNG production capacity of 9.97 mtpa (1.41 Bcfd) as well as up to two additional full-containment LNG storage tanks. The full five-train facility would be capable of exporting up to 24.92 mtpa (3.53 Bcfd) of LNG, the website also states.
Brownsville LNG Project Advances - The U.S. Federal Energy Regulatory Commission (FERC) has issued the draft environmental impact statement (DEIS) for Texas LNG’s proposed LNG export facility in the Port of Brownsville, Texas LNG reported Sunday.“Texas LNG is committed to show how our project protects the environment and generates significant benefits for the local community and the Port of Brownsville,” Langtry Meyer, Texas LNG’s founder and chief operating officer, said in a written statement emailed to Rigzone. “This project will bring jobs and investment to Cameron County and deliver clean, safe, abundant Texas natural gas energy to the world.”According to Texas LNG, receiving the DEIS represents a key milestone toward its final investment decision (FID) for the first 2-million-tonne-per-annum (MTA) phase of the proposed two-train, 4-MTA project. “The DEIS further de-risks the project and adds confidence to the dates of remaining milestones in the permitting process,” the company said in its written statement. The company noted that remaining anticipated milestones include:
- Receipt of the final environmental impact statement by March 15, 2019
- A federal authorization decision deadline of June 13,2019
- A FID in late 2019
- Phase 1 production of 2 MTA of LNG to start in early 2023
According to Houston-based Texas LNG, the LNG export facility will be built on a 625-acre site on the Port of Brownsville’s deepwater ship channel near natural gas supplies and pipelines. The project fact sheet on the company’s website notes that the Port of Brownsville is one of the closest U.S. ports to the Panama Canal, which facilitates access to LNG customers in Asia. The facility would receive natural gas from the Agua Dulce trading hub in South Texas, and the company has stated that the Permian Basin associated gas it would liquefy is cheaper than the Henry Hub-indexed gas that would be fed into other Gulf Coast terminals. Samsung Engineering Co., Ltd. owns a minority equity stake in Texas LNG and will oversee engineering, construction and procurement.Texas LNG is the second Gulf Coast LNG project to receive a DEIS from FERC this month. On October 12, NextDecade Corp. reported that FERC had granted the document for its Rio Grande LNG project and associated Rio Bravo Pipeline. Additionally, Venture Global LNG announced last week that FERC had issued the final environmental impact statement for its Calcasieu Pass LNG export facility in Louisiana.
Next-wave LNG race hits hurdles in U.S.-China trade war (Reuters) - The delay of a U.S. Gulf Coast liquefied natural gas (LNG) export project has crystallized fears that the U.S. trade battle with China is hampering efforts to line up buyers needed to move ahead with multi-billion-dollar builds. The United States is positioning itself as the dominant provider of the supercooled fuel as Asian nations shift away from dirtier power sources like coal, and this month’s approval of a giant Canadian project led by Royal Dutch Shell bolstered enthusiasm for the sector overall in North America. That optimism took a hit on Monday, when Australia’s LNG Ltd delayed until next year a planned decision on whether to build its Louisiana-based Magnolia LNG plant due to problems lining up Chinese customers. And it comes when bankers and analysts in the sector had already questioned whether the next wave of projects in the pipeline would pass muster with investors. “Chinese LNG demand growth is the largest piece of demand growth out there, and Chinese buyers have got to feel reluctant to commit to U.S. capacity when the U.S. government sees trade as a means of exerting political leverage,” said Bob Ineson, managing director of North American natural gas at IHS Markit. China set a 10 percent tariff on U.S. LNG imports last month, extending a trade scuffle in which U.S. President Donald Trump imposed tariffs on $250 billion worth of imported Chinese goods and China retaliated with duties on $110 billion worth of U.S. goods. China’s LNG demand has skyrocketed in recent years on Beijing’s pollution crackdown, with imports nearly tripling since 2015. Last year it overtook South Korea as the world’s No. 2 importer of LNG. That boom, along with rising demand from other Asian nations, has helped gobble up an anticipated LNG glut and boosted spot prices to near four-year highs, breaking a multi-year freeze on new project investment. By the mid-2020s, global LNG demand is forecast to range from 360 million to 450 million tonnes, up from about 290 million tonnes in 2017. With China leading that growth, signing deals with its companies is viewed as imperative to get larger projects done. But the tariffs are having a chilling effect, according to two U.S. industry sources. China is not signing any long-term deals with U.S. projects until the spat is resolved, they said.
Rising U.S. crude output sparks race to build export terminals (Reuters) - A high-stakes competition is emerging among energy exporters proposing multi-million-dollar crude terminals along the U.S. Gulf Coast to handle a gusher of shale oil coming from West Texas oilfields. On Monday, private equity firm Carlyle Group became the latest to place a bet, proposing with the Port of Corpus Christi what it said would be the first onshore U.S. export facility able to load the world’s largest crude tankers. The winners of the export terminal race likely will be those best able to navigate a regulatory process that includes multiple government approvals and overcome labor and supply shortages that have already frustrating some early projects to expand export infrastructure. The contest comes as the shale revolution is expected to send the nation’s oil production to 11.8 million barrels per day by the end of 2019, from 9.35 million bpd in 2017, according to the U.S. Energy Information Administration. Existing coastal terminals could be overwhelmed by late next year as a flurry of new pipelines come into operation and move 2 million barrels of oil landlocked in West Texas to the Gulf Coast, say oil companies and analysts. Carlyle’s facility, which aims to begin operations by late 2020, will compete with other Texas and Louisiana projects proposed by Swiss-trader Trafigura AG and pipeline operators’ Enterprise Products Partners LP and Tallgrass Energy LP. Enterprise and Trafigura have not provided timelines, noting permits must be secured first. Each aims to fully load very large crude carriers (VLCCs)tankers able to carry up to 2 million barrels of oil to markets in Asia, Latin America and Europe. Most would require running pipelines away from ports and into the deeper parts of the ocean to allow loading of the larger ships. All of these proposals face significant licensing and other hurdles. Like others, the Carlyle-Port of Corpus Christi project, must pass lengthy state and federal approvals. It also must await completion of an Army Corps of Engineers project that has been delayed about a year, said Sean Strawbridge, chief executive officer of the Port of Corpus Christi Authority. Although shale production is expected to rise substantially, it will not fill all the proposed projects, said John Coleman, an oil market analyst at research firm Wood Mackenzie. “Everyone is racing to throw their hat in the ring and get their project done before everyone else,” he said. Only one or two of the five proposed offshore ports likely will be needed. “There’s simply not enough oil volumes to go around.”
$10B LNG Facility Starts Commissioning Phase - Cameron LNG has begun the commissioning process for the support facilities and first liquefaction train of Phase 1 of its liquefaction-export project in Hackberry, La., Sempra Energy reported Friday. “All major construction activities have been completed to begin the commissioning and start-up process to produce LNG from the first liquefaction train,” Joseph A. Householder, Sempra’s president and chief operating officer, said in a written statement. “This is a significant milestone for this landmark U.S. energy infrastructure facility – an important step forward in advancing our strategic vision to become North America’s premier energy infrastructure company.” Sempra, which indirectly owns a 50.2-percent stake in Cameron LNG, noted that the commissioning process includes:
- Testing all support systems, combustion turbines and compressors
- Delivery of feed gas from the transmission pipeline
- Production of the first LNG
Once the Federal Energy Regulatory Commission (FERC) approves all of the commissioning steps and all steps are successfully completed for the first train, LNG production will begin and ramp up to fully production for delivery to global markets, Sempra stated. Other Cameron LNG owners include Total, Mitsui & Co., Ltd. and Japan LNG Investment, LLC, which is owned by Mitsubishi Corp. and Nippon Yusen Kabushiki Kaisha (NYK). Phase 1 of the $10 billion Cameron LNG project comprises the facility’s first three liquefaction trains. Sempra stated that all three trains should be producing LNG next year. The company that the facility is projected to export 12 million tonnes per annum (mtpa) – or approximately 1.7 billion cubic feet per day (Bcfd) – of LNG. According to the Cameron LNG website, the second-phase expansion would add two liquefaction trains with an LNG production capacity of 9.97 mtpa (1.41 Bcfd) as well as up to two additional full-containment LNG storage tanks. The full five-train facility would be capable of exporting up to 24.92 mtpa (3.53 Bcfd) of LNG, the website also states.
China's tariff on US natural gas delays Louisiana LNG project - An LNG (liquified natural gas) container of CNPC (China National Petroleum Corporation) is under construction next to others at the Yangkou Port in Rudong county, Nantong city, east China's Jiangsu province.A company behind a multibillion-dollar project to export liquefied natural gas from Louisiana is delaying its investment decision due to problems lining up Chinese buyers amid the ongoing U.S.-China trade dispute.The announcement shows the trade tensions are beginning to have a negative impact on an industry that President Donald Trump has championed. Trump has pitched U.S. LNG — natural gas chilled to liquid form — to trade partners from China to Poland.Australia's LNG Limited on Monday said it will not make a final investment decision this year on its Magnolia LNG terminal near Lake Charles, Louisiana. The company previously told investors it expected to announce a decision by year-end."We made that statement prior to the trade tensions that have manifested over the past months, which have caused headwinds for LNG transactions," LNG Limited CEO Greg Vesey said in a letter to shareholders. "We remain hopeful in our ability to bring a final investment decision for Magnolia LNG to the Board of Directors in the first part of 2019." China slapped a 10 percent tariff on American LNG exports in September after the Trump administration imposed an equal levy on $200 billion in Chinese goods. The White House is reportedly preparing to place tariffs on all remaining Chinese imports — about $257 billion in products — if trade talks between Trump and Chinese President Xi Jinping fail to deliver a breakthrough. Vesey, a former natural gas and power executive at Chevron, held out hope that the world's two biggest economies would settle their dispute before Magnolia finds buyers beyond China for its supplies.
Trade War Could Be ‘Pivotal’ For U.S. LNG - Donald Trump’s trade war with China is starting to scare away oil and gas investments, as new trade barriers clouds the long-term outlook on exports. Australia LNG announced that it would delay a final investment decision on its Magnolia LNG plant in Louisiana until next year, citing trouble securing enough buyers in China. “We remain confident in our ability to reach (final investment decision) on Magnolia whether or not China participates,” CEO Greg Vesey said in a tweet, before arguing that “multiple opportunities with customers in Europe and Asia exist, and our discussions with them are proceeding well.”His company might still move forward, but will need to find buyers elsewhere because the U.S.-China trade war shows no signs of abating, at least as of now. The Trump administration has implemented two rounds of tariffs on China. The first round consisted of about $50 billion in tariffs on Chinese goods, which was followed by a much more dramatic 10 percent tariff on $200 billion in imports from China. That 10 percent tariff is set to jump to 25 percent at the end of the year.A possible third and even more dramatic round is still in the cards, which would hit an additional $257 billion in Chinese goods. That would be even more significant because it would amount to just about the entirety of U.S. imports from China and would hit a broader set of consumer goods, and its effects would be felt across U.S. society as everyday items would likely see price increases. However, as it relates to the oil and gas market, the effects of the trade war are already evident. China retaliated to U.S. tariffs a few months ago by slapping a tariff on U.S. LNG. Without a clear path towards resolution, LNG developers cannot move forward with investment in new export terminals.
Cheniere to commission 1st Corpus Christi LNG cargo on Nov 15 - port (Reuters) - Cheniere Energy will commission the first liquefied natural gas (LNG) cargo from its new Corpus Christi export terminal on Nov. 15, the Texas port’s chief executive said on Tuesday. The commissioning of the cargo, months ahead of schedule, will mark the start of operations at Cheniere’s second LNG export facility and only the third major export facility in the United States. The Corpus Christi terminal had been undergoing commissioning work since the summer and while it was scheduled to come onstream in the first half of next year, Cheniere had said previously first LNG would come before the end of the year. Sean Strawbridge, CEO of the Port of Corpus Christi, where the terminal is located, told a London LNG conference that an event to mark the commissioning of the cargo would take place at the port on Nov. 15. LNG supplies from the United States are expected to soar in the coming years, turning the country into the third largest global exporter by 2020 according to some forecasts, as new facilities are built opening the tap for LNG exports. Around 50 million tonnes’ worth of export capacity is currently under construction in the United States, mostly on the Gulf Coast, adding to the 20 million tonnes in operation. Some 290 million tonnes of LNG was traded globally last year. Commissioning cargoes tend to be sold on the small, murky spot market so the timing of their arrivals is anticipated by traders. Analysts estimate between 1.0 and 2.5 million tonnes of LNG will hit the spot market in the first quarter of next year due to start-ups at new U.S. facilities, a significant amount in an industry still dominated by rigid multi-year supply contracts.
First USGC onshore VLCC terminal to be developed on Harbor Island by end-2020 -- The Port of Corpus Christi and global alternative asset manager Carlyle Group have agreed to develop the first onshore VLCC loading terminal at Harbor Island, Texas, by the end of 2020, the companies announced Monday. The terminal project includes the development of at least two loading docks at Harbor Island as well as inland crude oil tank storage across Redfish Bay on land secured by Carlyle. Dredging of the 36-mile main access channel from the Gulf of Mexico to Harbor Island to at least 75 feet from the current depth of 47 feet will be funded privately, the companies said. "Major construction begins in 2019, but civil work and engineering and design have started," Carlyle spokeswoman Christa Zipf told S&P Global Platts. Cost of the project is about $1 billion, she said, adding Carlyle expects about 20 VLCC loads per month. Construction and dredging will require no capital outlay from taxpayers, as Carlyle agreed to arrange for a private funding solution through its global infrastructure fund in addition to the port's realization of regular rental payments, volume-based tariff income and land grants, the companies said. The Harbor Island onshore terminal could come online close to the same time as Trafigura's offshore VLCC crude export terminal, located 12.7 miles off of the coast of North Padre Island and 15 miles from of Corpus Christi in 93 feet of water. Trafigura's Texas Gulf Terminals VLCC loading facility will have the capacity to handle an average 500,000 b/d of crude and fully load one VLCC in 48 hours, or eight VLCCs per month, according to the permit application to the US Maritime Administration and the US Army Corps of Engineers. The company has not set a startup date for the offshore facility.
BP closes $10.5bn BHP US onshore assets acquisition - BP has concluded the acquisition of Australian company BHP’s unconventional onshore assets in the US for $10.5bn to boost its US onshore oil and gas portfolio, as well as pursue long-term growth.BP signed the agreement for the acquisition of BHP’s assets in July in a deal that is set to give the company a significant position in the liquids-rich regions of the Permian and Eagle Ford basins in Texas, in addition to the Haynesville natural gas basin in East Texas and Louisiana.The acquisition comprises oil and gas production of 190,000 barrels of oil equivalent per day (boe/d) and 4.6 billion barrels of oil equivalent of discovered resources.UK-based BP expects the transaction to deliver more than $350m of annual pre-tax synergies and boost upstream pre-tax free cash flow by $1bn, increasing it to $14bn-15bn in 2021. BP Upstream chief executive Bernard Looney said: “By every measure, this is a transformational deal for our Lower 48 business. It is an important step in our strategy of growing value in upstream and a world-class addition to BP’s global portfolio. The company’s existing onshore oil and gas business in the US currently produces around 315,000boe/d with resources of 8.1 billion barrels of oil equivalent.
Chevron shares jump 2% as quarterly profit doubles, oil and gas output hits record - Chevron reported quarterly earnings that beat analysts' expectations on Friday, as record-setting oil and gas production boosted the company's bottom line. Shares of the oil major were rose more than 2 percent on Friday. Chevron posted a profit of $4.05 billion for the quarter, more than double its earnings from a year ago. That came out to a profit of $2.11 per share, slightly beating Wall Street's expectations for $2.06 per share, according to Refinitiv.. The company pumped nearly 3 million barrels per day of oil equivalent, the most it's ever produced in a single quarter. The gains came as Chevron ramped up production from its Wheatstone liquefied natural gas project in Australia and as output continued to surge from its wells in the Permian Basin underlying Texas and New Mexico. That helped drive a nearly seven-fold jump from third-quarter 2017 earnings in Chevron's oil and gas exploration and production business, where profits hit $3.38 billion this quarter. Chevron's other major business line, refining and marketing fuels like gasoline and diesel, saw profits drop 24 percent. The decline was largely due to Chevron's international refining business, where profit margins were lower and the company sold fewer assets compared with a year ago.
Houston driller WildHorse acquired by shale pioneer Chesapeake - Houston Chronicle -The shale drilling pioneer Chesapeake Energy said Tuesday it is acquiring Houston’s WildHorse Resource Development for $3 billion in cash and stock in a consolidation of players in South Texas’ Eagle Ford shale. Chesapeake, of Oklahomas City, is scooping up WildHorse, which exclusively focused on exploration and production in the emerging northeastern corner of the Eagle Ford west of College Station. In addition to its 420,000 acres in the region, WildHorse is about to open a sand mine in the area to service its hydraulic fracturing, or fracking, of wells.The deal combines two top Eagle Ford production companies, diversifying the holdings of Chesapeake, which is primarily focused in the southwestern portion of the shale play south of San Antonio. Chesapeake also is growing in Wyoming’s Power River Basin along with its lrgacy Marcellus shale position in Pennsylvania.Historically a natural gas company, Chesapeake has aimed to expand into higher-value crude oil assets that are ripe for development, and WildHorse proved a prime acquisition target as a pure-play Eagle Ford company with a large block of mostly contiguous acreage. The northeastern Eagle Ford, which is underdeveloped, holds more oil as opposed to natural gas, said David Heikkinen, chief executive and analyst with Heikkinen Energy Advisors in Houston.“I’d call it an emerging region,” Heikkinen said. “WildHorse has gone out and pioneered this region.”Eagle Ford oil arguably sells at the highest prices in the country because of its proximity to refining and port hubs in Houston and Corpus Christi, while the booming Permian Basin in West Texas is facing pricing discounts because of pipeline shortages.Chesapeake Executive Vice President Frank Patterson said the WildHorse acreage is more than 80 percent undeveloped, providing lots of room for growth. Chesapeake will use larger rigs than those deployed by WildHorse to drill longer horizontal wells and to do so more quickly. “It’s a very quick transition to a full field development plan,” Patterson said. “We’ll hit the ground running.”
Having Gone 'Through Hell,' Chesapeake Energy CEO Has 'No Doubt' It's Time To Grow Again – Chesapeake Energy surprised investors Tuesday with the unexpected acquisition of WildHorse Resource Development for $4 billion. The prize here is 420,000 net acres of unconventional oil and gas fields, already producing 47,000 barrels a day, most of it from the oil zone of the Eagle Ford shale of southeast Texas, with an additional gas play in the Terryville field of North Louisiana. It works out to about $7,000 per undeveloped acre and $900,000 per undrilled location. Chesapeake is buying WildHorse, which has a thin public float, mostly from a cadre of private equity backers led by Natural Gas Partners and Carlyle Group, with KKR holding a small piece. Capital owns about 70%, Carlyle Group 24% and KKR about 5%, according to SEC filings. No surprise Chesapeake shares were down 15% on the day. When the deal closes, Wildhorse investors will own a whopping 45% of Chesapeake’s equity. The WildHorse Eagle Ford position is largely contiguous, only 20% developed, and it is in the oil zone of the Eagle Ford, with 80% of its revenues from oil. This asset will enable Chesapeake to more than double its oil production by 2020 to 165,000 bbls/d. “It is absolutely a turning point,” Lawler says. Because he’s buying Wildhorse mostly with stock, the deal will help further deleverage Chesapeake’s balance sheet, while being immediately accretive to cash flow. The geology of the acquired acreage is very similar to that of Chesapeake’s existing position in the Eagle Ford, where it has drilled 2,400 wells, commonly engineering horizontal completions 10,000 feet long. “It’s similar to what we have done, a close fit,” he said. And in a neat twist, WildHorse bought a chunk of its Eagle Ford position from Lawler’s previous employer, Anadarko Petroleum, in 2017 for $600 million. One of his top lieutenants at Chesapeake, Jason Pigott, used to run Anadarko’s Eagle Ford division.
Keystone XL pipeline fight heads to Nebraska Supreme Court - Attorneys for opponents of the Keystone XL pipeline and TransCanada will square off Thursday morning before the Nebraska Supreme Court in a lawsuit that could erect a new roadblock to construction of the $8 billion project.Landowners who oppose the pipeline, as well as environmental groups and Indian tribes, are seeking to nullify the Nebraska Public Service Commission’s 3-2 approval a year ago of a pipeline route across Nebraska.The lawsuit claims, among other things, that TransCanada didn’t formally seek approval of the “mainline alternative” route that was approved, and didn’t prove that the pipeline is in the public interest of the state. The lawsuit maintains that the company should reapply for a pipeline route, which would delay the much-delayed project for several more months.Attorneys for the Canadian pipeline developer have argued that even though the PSC didn’t OK the “preferred route” suggested by the corporation, it followed all state laws in approving the alternative. That route, TransCanada attorneys have said, is a superior route because it affects fewer water wells and passes through 84.6 fewer miles of the migratory path of the endangered whooping crane.It could take the State Supreme Court several weeks to rule after hearing oral arguments.Nebraska has become ground zero in the national environmental debate over the Keystone XL pipeline. The 36-inch pipeline would carry up to 830,000 barrels a day of thick tar sands crude oil from Canada to refineries on the U.S. Gulf Coast that are specially set up to refine such oil. TransCanada officials have said they have sufficient commitments from shippers to use the Keystone XL, but the company has not yet made the final financial commitment to build it.
Living on the Front Lines with Silica Sand Mines -- The horror of fracking damages to life and land remain in the minds of most people who live near the massive land destruction from silica sand mining for what the unconventional oil and gas industry lovingly calls “proppant”. Very often, we in the Midwest wonder if the rest of the country knows that this specialized form of silica sand mining destroys our rolling hills, woodlands, and water sources in order for silica sand to feed the fracking industry’s insatiable proppant demand.. The largest sand mine in Bridge Creek Town lies one mile north of our tree farm. Two years ago, 40 acres of trees were culled for the installation of high intensity power lines to feed anticipated silica sand mine expansion under the legal provision of “Right-of-Way.” That document was signed by a previous land owner in 1948. No specific amount of land was specified on the original right-of-way, thus allowing significant legal destruction and permanent loss against the farm. The adjacent silica Hi-Crush sand mine depletes the hillsides and woodlots in its path. The weekly blasting away of the hillsides sends shock waves – shaking homes and outbuildings weekly, along with our nerves. Visible cracks appear in the walls of buildings, and private wells are monitored for collapse and contamination. The sand mine only guarantees repair to property lying within a half-mile of the mine. The mine blasts the land near Amish schools and has had a noticeable effect on the psyche of countless farm animals. The invisible silica is breathed by every living thing much to the mine’s denial, with deadly silicosis appearing up to 15 years after initial exposure. Our community is left to wonder who will manifest the health effects first. Blasting unearths arsenic, lead, and other contaminants into private wells and into the remaining soil. There has been no successful reclamation of the land after it is mined, with most residents wondering what the actual point is of developing a reclamation plan is if timely implementation and stringent reclamation metrics are not enforced. All useful topsoil has been stripped away and is dead with the land only able to support sedge grasses and very few of them at best. No farming on this mined land can occur even though these mining companies promise farm owners that when they are done mining, soil productivity will meet or exceed pre-mining conditions and much milder slopes than the pre-mining bluffs that contained the silica sand. Needless to say, land values of homes, farms, and property decrease as the mines creeps closer.
Driven by Trump Policy Changes, Fracking Booms on Public Lands - NYT - Reversing a trend in the final years of the Obama presidency, the Trump administration is auctioning off millions of acres of drilling rights to oil and gas developers, a central component of the White House’s plan to work hand in glove with the industry to promote more domestic energy production. Seeing growth and profit opportunities at a time of rising oil prices and a pro-business administration, big energy companies like Chesapeake Energy, Chevron, and Anschutz Exploration are seizing on the federal lands free-for-all, as they collectively buy up tens of thousands of acres of new leases and apply for thousands of permits to drill. In total, more than 12.8 million acres of federally controlled oil and gas parcels were offered for lease in the fiscal year that ended on Sept. 30, triple the average offered during President Barack Obama’s second term, according to an analysis by The New York Times of Interior Department data compiled by Taxpayers for Common Sense, a nonpartisan group that advocates budget discipline. Like the acreage offered for lease, the acreage actually leased by energy companies on federal lands hit its highest level last year since 2012, the height of the initial fracking boom in the United States. After 2012, a combination of Obama administration policy decisions and lower oil prices slowed demand for new drilling rights, a trend reversed since President Trump took office. That reversal has been propelled in part by the Interior Department’s willingness to go along with industry pressure to weaken rules that govern how these federal lands can be used, as regulators follow detailed industry scripts for rollbacks in protections for wildlife, air quality and groundwater supplies, documents show. The push amounts to one of Mr. Trump’s most comprehensive and controversial policy initiatives. It underscores the administration’s eagerness to reshape regulation at the behest of industry, and is playing out more immediately and visibly across big parts of the country than many of the other changes he is making to federal management of the environment.
New Mexico Communities Hand-Deliver Protest Comments On Expanded Fracking In Greater Chaco ― Community groups and advocates hand-delivered more than 10,000 citizen protest comments to the Bureau of Land Management’s New Mexico state office in snowy Santa Fe Wednesday in opposition to an oil and gas lease sale scheduled for December that would auction off close to 100,000 acres of public lands in New Mexico for industrialized fracking. In spite of the serious negative impacts that expanded fracking already has on local communities, the BLM has rolled back opportunities for the public to weigh in on this process, shortening “protest” or appeal periods from 30 days to just 10 days and refusing to hold any public hearings, even near impacted communities. Protest comments must be submitted by mail or hand-delivered, as the New Mexico agency no longer accepts emailed or faxed comments. More than 10,000 individual and unique protest comments were collected by dozens of tribal, community, and environmental organizations. Technical protest comments were submitted by Western Environmental Law Center, along with the Center for Biological Diversity, Chaco Alliance, Counselor Chapter House, Counselor Chapter Health Impact Assessment and Hozhóógó ná adá Committee, Diné Citizens Against Ruining Our Environment, Food & Water Watch, San Juan Citizens Alliance, Sierra Club and WildEarth Guardians. The New Mexico BLM plans to sell more than 84,000 acres of the Land of Enchantment to the oil and gas industry in a Dec. 6 online auction. This includes more than 43,000 acres in the Greater Chaco region of northwest New Mexico and 41,000 acres in southeast New Mexico’s Greater Carlsbad Caverns region. The sale also includes more than 5,000 acres in Oklahoma and Texas. Despite the fact that no additional study or tribal consultation has occurred, the BLM now plans to auction off 43,268 acres of public and tribal land in the area, including an additional 11,000 acres slated for sale in March of next year.
Colorado Proposition 112 Would Require 2500 ft. Setbacks for Human Safety. - The fight over Prop. 112 has lured big money and clashes over interpretation of health studies. “The OEHHA chronic benzene REL considers several studies published after USEPA’s 2002 benzene assessment, which found increased efficiency of benzene metabolism at low doses, decreased peripheral blood cell counts at low doses (800−1860 μg/m3)…” It takes another 20 words — with terms like “metabolic enzymes” and “benzene detoxification” — to close out this sentence from a recent University of Colorado study that looked at the potential health impacts of Front Range oil and gas operations. Thousands of equally abstruse passages fill hundreds of other studies from around the world examining the effects of drilling and hydraulic fracturing on human health. Welcome to the science behind Proposition 112, the oil and gas setbacks measure that will likely be among the most complex ballot issues to ever go before Colorado voters. The initiative aims to increase the required distance of any newly drilled wells from homes, schools and water sources to 2,500 feet. The current setback is 500 feet from homes and 1,000 feet from densely occupied buildings, like hospitals and schools. Opponents say the measure will block off so much acreage to drill rigs — it’s estimated that 85 percent of non-federal land in Colorado would be off-limits — that the $31 billion industry in Colorado would virtually collapse. Backers of 112 say without bigger buffers, Coloradans will continue to be exposed to noxious emissions from well sites, like toluene, formaldehyde, xylene, and cancer-causing benzene, to say nothing of the environmental harm from potent greenhouse gases, like methane. “It’s hard when we ask voters to vote on technical issues like this,” said Tanya Heikkila, a professor at CU Denver’s School of Public Affairs who focuses on environmental policy, management and law. She said few voters have the time, patience or expertise to navigate through the copious scientific research that has been done on energy extraction. As such, she said, they’ll likely turn to the people they know for advice on which box to check on the ballot — their friends, their neighbors, their doctor.
Energy Giants Choose Nuclear Option in Election’s Biggest Fight Over Fossil Fuel - “We have five oil and gas companies that want to amend our Constitution, our controlling document,” says Mark Foote, a dark-haired 45-year-old father of two who has been one of the legislature’s most outspoken critics of oil and gas companies. “They’re putting a lot of money into it, millions and millions of dollars. They may win, and they may buy a portion of our constitution that controls everything that we do.” Foote concedes that the ballot measure’s folksy artifice of frontier fairness seems compelling. On its face, it does not appear to be part of the now-familiar power-grab by Texas energy barons trying to install noxious fracking rigs next to idyllic neighborhoods in Colorado’s fast-growing suburbs. Instead, the amendment taps into fever-dream fears about Gestapo government. “The commercials typically show some salt-of-the-earth guy with a baseball cap that’s driving around a tractor on his farm. Supposedly he’s saying, ‘Well if government takes your property, then they should pay you,’ which sounds good, right?” Foote says as a few heads nod and an affirmative murmur ripples through the white-haired crowd. But, then, eminent domain folklore isn’t necessarily reality — and as its opponents tell it, Amendment 74 is not some good old grassroots common sense spontaneously crafted by hardscrabble ranchers. Foote explains that strong takings laws are already on the books, and that this constitutional initiative was meticulously engineered by a team of high-powered Denver attorneys and political operatives to achieve only one objective: shielding oil and gas corporations from all public interest regulations that may emerge as population growth and energy development collide in the Rocky Mountain West.
Wyoming Watching Colorado's Anti-Fracking Ballot Issue - (AP) — Energy leaders in Wyoming are closely watching the fate of a Colorado ballot initiative that would severely limit fracking on non-federal land in that state.The Wyoming Tribune Eagle reports that Colorado-based opponents of the initiative warn it could drive jobs, capital and production northward into Wyoming.But Wyoming industry leaders say it's way too early to say what impact the initiative could have on the Equality State's economy.Colorado's Proposition 112 would require that new oil and gas wells be at least 2,500 feet (750 meters) from occupied buildings and would allow local governments to enact even greater setbacks. Current requirements are 500 feet (150 meters) from homes and 1,000 feet (300 meters) from schools.It also would increase setbacks between new energy operations and "vulnerable areas" that include parks, creeks and irrigation canals. Current law gives the state jurisdiction over setbacks.It's the latest attempt to harness drilling in Colorado's rapidly expanding Denver metropolitan area. Previous efforts have failed, despite advocates' concerns about health and drilling rigs close to schools.A state analysis suggests the initiative would rule out 85 percent of non-federal land in Colorado to development and drastically reduce property taxes paid by the $32 billion state industry.Proposition 112 is "literally a ban on new development," argued Kathleen Sgamma, president of the Western Energy Alliance, a Denver-based oil and natural gas advocacy group. "So Wyoming would probably immediately see an increase in interest in the Powder River Basin. There's already quite a lot of interest in the Powder right now."The Powder River Basin, which straddles the Wyoming-Montana border, which straddles the Montana-Wyoming border, is the largest coal-producing region in the U.S. and, in Wyoming, hosts oil and natural gas drilling.
Corps: No new impacts found in Dakota Access pipeline review — The U.S. Army Corps of Engineers on Friday completed more than a year of additional study of the Dakota Access oil pipeline, saying the work substantiated its earlier determination that the pipeline poses no significant environmental threats.U.S. District Judge James Boasberg in June 2017 ruled that the Corps "largely complied" with environmental law when permitting the $3.8 billion, four-state pipeline built by Texas-based Energy Transfers Partners.However, the judge also ordered more study because he said the agency didn't adequately consider how an oil spill under the Missouri River might affect the Standing Rock Sioux tribe's fishing and hunting rights, or whether it might disproportionately affect the tribal community — a concept known as environmental justice. It aims to ensure development projects aren't built in areas where minority populations might not have the resources to defend their rights. In its initial analysis of the Missouri River crossing that skirts the northern edge of the Standing Rock Reservation along the North Dakota-South Dakota border, the Corps studied the mostly white demographics in a half-mile (0.8-kilometer) radius, which the agency maintained is standard. But if the Corps had gone another 88 yards (80 meters) — not quite the length of a football field — the study would have included the reservation. The tribe accused the Corps of gerrymandering. The tribe believes an oil spill from the pipeline under the Lake Oahe reservoir on the Missouri River — from which the reservation draws its water — could have a detrimental effect on the tribal community. Standing Rock is leading a lawsuit joined by three other Dakotas tribes that seeks to shut down the pipeline.
is the Bakken facing another round of takeaway constraints? Part 2. - Pipeline capacity constraints are nothing new to producers in the Bakken. Prior to the completion of the Dakota Access Pipeline (DAPL) in mid-2017, market participants had been pushing area pipeline takeaway to the max. When DAPL finally came online following a lengthy political and legal battle, producers and traders were able to breathe a sigh of relief. But with Bakken production steadily increasing over the past 18 months — and primed for future growth — new constraints are on the horizon. Over the next year or so, Bakken output could overwhelm takeaway capacity and push producers to find new market outlets. The questions now are, which midstream companies can add incremental capacity, how much crude-by-rail will be necessary, and is there a chance a major new pipeline gets built? Today, we forecast Bakken supply and demand, discuss some upcoming projects and lay out the possible headaches for Bakken producers heading into 2019. We discussed the history and impact of DAPL in our Take My Crude Away blog, but here’s a quick recap. Prior to the commercial start-up of the new pipeline to Patoka, IL, in June 2017, Bakken producers had long battled with takeaway constraints. As far back as 2012, production (blue area in Figure 1) had outpaced the modest amount of pipeline capacity available (green line) and producers and traders resorted to moving excess production via crude-by-rail (CBR). CBR isn’t inherently bad, and does provide the ability to reach multiple markets, but it’s expensive, logistically challenging, and slow (compared to a pipeline). When DAPL came online, producers were faced with a new market dynamic — excess pipeline takeaway capacity. Bakken crude began to trade at a premium to West Texas Intermediate (WTI) at Cushing, as take-or-pay shippers were forced to compete with one another and pay up to incentivize barrels to move their way. Currently, Bakken barrels at the Clearbrook hub are trading at a $8/bbl discount to WTI at Cushing, influenced by market dynamics related to those also causing wide differentials for Canadian barrels, which we discussed in Part 1 of this blog series.
Big Oil Pours Record $30M to Sway Voters Against Nation's First Carbon Tax - If voters approve Initiative 1631 on Nov. 6, Washington state will take a significant step in climate action by becoming the first state in the nation to enact a fee on carbon emissions. That is, unless Big Oil can stop it.The U.S. oil industry has pumped a record $30 million to stop the carbon tax, which environmentalists havetried to enact for years, Reuters reported, citing state data. Meanwhile, proponents—including green groups and climate activist billionaires Bill Gates, Michael Bloomberg, Tom Steyer and Laurene Powell Jobs, the widow of Apple founder Steve Jobs—have spent $15.2 million."With Big Oil spending $30 million, that makes it a real fight," Bill Holland, state policy director for the League of Conservation Voters, told Reuters. "It has been a frightening amount of money."Washington ranks fifth in the nation in crude oil refining capacity for making gasoline and other petroleum products, according to the U.S. Energy Information Administration.Initiative 1631 imposes a starting fee of $15 per metric ton on carbon emissions, beginning in 2020. This fee rises $2 every year until the state hits its 2035 emissions reductions goals and is on track to meet its 2050 goals. If passed, the tax is expected to generate $2.3 billion in revenue for green infrastructure, clean transportation and help communities most impacted by pollution. A recent statewide Crosscut/Elway Poll among registered voters shows 50 percent approval of the measure, 36 percent opposed and 14 percent undecided.
More than 500 gallons of diesel spills after work crew hits line– Hundreds of gallons of diesel fuel was spilled near a Union Pacific track in Roseville on Friday. The Roseville Fire Department says a construction crew was out along the track near Atlantic Street and Tiger Way when they struck a four-inch diesel line. More than 500 gallons of diesel fuel spilled into the soil, Roseville Fire says. A third party clean-up crew is now at the scene Friday afternoon for mop-up work. No evacuations were ever issued for the surrounding neighborhoods, including nearby Roseville High School. Officials say the lines are owned by oil and gas line company Kinder Morgan. The lines run through the area and go into a pumping station in Rocklin.
Alaska natives call on banks to protect the Arctic national wildlife refuge from drilling - Tiliisia Sisto, a 23-year-old mother of two, lives in Venetie, Alaska, a Gwich’in Alaska Native village, and if she wants to eat affordably while also preserving her culture, hunting is key. So are the Porcupine caribou she and her people rely on. Now, a federal proposal to open the Arctic lands on which these caribou calve to oil and gas drilling threatens the Gwich’in’s primary food source and their way of life. That’s why Sisto traveled all the way to New York City this week to ask major banks to withhold funding for projects seeking to develop the Coastal Plain of the Arctic National Wildlife Refuge (ANWR). The Trump administration has been trying to fast-track an environmental impact statement to get extraction going here since the beginning of the year. “I’m speaking up for my children’s future.” Sisto, along with Bernadette Demientieff, the executive director of the Gwich’in Steering Committee, and two representatives with the Sierra Club, met with officials from eight banks this week—JP Morgan Chase, Barclays, Goldman Sachs, Bank of America, Morgan Stanley, Credit Suisse, UBS, and Citi—to explain why this 1.5 million-acre piece of land is so sacred to them. They want these institutions to understand that drilling in the refuge is not just an environmental issue. “This is a human rights violation,” Demientieff told Earther. Ultimately, the group wants the banks to publicly declare they’re opposed to drilling in this area and pledge they won’t financially support any such efforts. No banks made any promises, but Demientieff, at least, left feeling “hopeful”, she said. Bank of America directed Earther to its environmental website outlining its environmental commitments to regions like the Arctic but offered no additional information on how it plans to proceed. Credit Suisse and UBS confirmed the meetings but offered no specific information outside their commitments to protecting the environment and respecting indigenous communities.
U.S. monthly crude oil production exceeds 11 million barrels per day in August - EIA - U.S. crude oil production reached 11.3 million barrels per day (b/d) in August 2018, according to EIA’s latest Petroleum Supply Monthly, up from 10.9 million b/d in July. This is the first time that monthly U.S. production levels surpassed 11 million b/d. U.S. crude oil production exceeded the Russian Ministry of Energy’s estimated August production of 11.2 million b/d, making the United States the leading crude oil producer in the world. Monthly crude oil production reached a record high in several states. Texas had the highest record level at 4.6 million b/d, followed by North Dakota at 1.3 million b/d. Other states that had record-high production levels were New Mexico, Oklahoma, Colorado, and West Virginia. Production in the Federal Offshore Gulf of Mexico also hit a record high of 1.9 million b/d. The Permian region, which is located in western Texas and eastern New Mexico, accounts for about 63% of total Texas crude oil production and 95% of total New Mexico crude oil production. From January 2018 to August 2018, Texas crude oil production increased by 683,000 b/d (15%) and New Mexico production increased by 182,000 b/d (25%). The growth in Texas and New Mexico since the start of 2018 surpassed EIA’s previous expectations, which assumed that pipeline capacity constraints in the Permian region would dampen production growth in response to the increased differential between the West Texas Intermediate (WTI) crude oil price at Cushing, Oklahoma, and the WTI price at Midland, Texas. In August 2018, this differential had grown to more than $16 per barrel (b), up from $0.43/b in January. However, industry efficiencies in pipeline utilization and increased trucking and rail transport in the region have allowed crude oil production to continue to grow at a higher rate than EIA expected. From May through August, production in the Gulf of Mexico grew by an average of 130,000 b/d every month, a significant increase from the growth rate in the first four months of the year. This increase was primarily the result of a number of fields returning to full production after several months of maintenance and other infrastructure issues that arose from Hurricanes Harvey and Nate in 2017. U.S. crude oil production has increased significantly during the past ten years, driven mainly by production from tight oil formations using horizontal drilling and hydraulic fracturing. EIA estimates of crude oil production from tight formations in August 2018 reached 6.2 million b/d, or 55% of the national total.
U.S. crude output jumps to record 11.35 million bpd in August: EIA (Reuters) - U.S. crude oil production surged by 416,000 barrels per day (bpd) to a record 11.346 million bpd in August the U.S. Energy Information Administration said in a monthly report on Wednesday. The rise came as production climbed in Texas and North Dakota to fresh peaks of 4.58 million bpd and 1.28 million bpd respectively, the data showed. The agency revised its July production figure slightly lower to 10.93 million bpd. Output from the United States has boomed thanks to a shale revolution, with production from the nation’s largest oilfield, the Permian basin that spans West Texas and New Mexico, leading the increase. Meanwhile, natural gas production in the lower 48 U.S. states rose to an all-time high of 94.7 billion cubic feet per day (bcfd) in August, up from the prior record of 92.7 bcfd in July, according to EIA’s 914 production report. In Texas, the nation’s largest gas producer, production increased to a record high 24.9 bcfd in August, up 1.7 percent from July. That compares with output of 21.8 bcfd in August 2017. In Pennsylvania, the second biggest gas producing state, production rose to a record high 17.3 bcfd in August, up 1.8 percent from July. That compares with output of 14.5 bcfd in August 2017.
US oil output surges but growth likely to moderate in 2019- John Kemp (Reuters) - U.S. crude oil production is rising at the fastest rate on record as the increase in prices over the last year boosts drilling and completion activity and energy firms employ more horsepower to fracture larger wells. Crude and condensates output hit a record 11.35 million barrels per day in August, up from 10.93 million bpd in July, according to the U.S. Energy Information Administration (“Petroleum Supply Monthly”, EIA, Oct. 31). Crude output has increased by more than 2 million barrels per day over the past 12 months, an absolute increase that is unparalleled in the history of the U.S. oil industry (https://tmsnrt.rs/2P1FGR7 ). In percentage terms, output is up by nearly 25 percent over the last year, the fastest increase since the 1950s (excluding the recovery from hurricanes). U.S. oil production is now rising faster than at the height of the last drilling and fracking boom before prices slumped in the second half of 2014. Most of the increase is coming from onshore shale fields, where output has risen by more than 1.9 million bpd over the last year, with a smaller contribution from the Gulf of Mexico, where output is up 200,000 bpd. In the first nine months of the year, the number of wells drilled in the United States was up by 26 percent while well completions were up by 24 percent (“Drilling productivity report”, EIA, Oct. 15). Increasing U.S. output has helped alleviate earlier concerns about a possible crude shortage following the re-imposition of U.S. sanctions on Iran with effect from Nov. 5. Surging domestic output coupled with increased production from Russia, Saudi Arabia and a number of other OPEC countries has pushed oil prices lower and driven the futures markets back towards contango. Spot prices and calendar spreads for WTI have weakened rapidly since July, much further and faster than for Brent, in response to the improved availability of crude in the midcontinent of the United States.
Baker Hughes- US rig count down 1 unit to 1,067 - Oil & Gas Journal- The US drilling rig count is down 1 unit to 1,067 rigs working for the week ended Nov. 2, according to Baker Hughes data. The count is up 169 units from the 898 rigs working this time a year ago. Rigs drilling on land remained unchanged at 1,046 units for the week. Offshore units were down a single rig to 18 units working, while those drilling in inland waters remained unchanged at 3 rigs working for the week. US oil-directed rigs were down 1 unit from last week to 874 units working, and up from the 729 rigs drilling for oil this week a year ago. Gas-directed rigs remained unchanged at 193 units, up from the 169 units drilling for gas a year ago. Among the major oil and gas-producing states, Oklahoma saw the largest increase in rigs for the week with a 3-unit gain to reach 144. New Mexico, Louisiana, and Ohio each gained a single rig with 102, 62, and 18 rigs running, respectively. Six states were unchanged this week: North Dakota, 54; Colorado, 32; Wyoming, 30; California, 15; Utah, 6; and Alaska, 5. Texas dropped the most rigs, ending the week down 4 units to 533. Dropping a single unit were Pennsylvania, 43; West Virginia, 13; and Kansas, 0. Canada lost 2 rigs for the week. With 198 rigs running, the count is higher than the 192 units drilling this week a year ago. Canada dropped 3 oil-directed rigs to reach 121 units for the week but gained a single gas-directed rig to reach 77 units.
Prices Slide On Moderating Weather Forecasts And Record US Production -- Kyle Cooper - Highlights of the Natural Gas Summary and Outlook for the week ending October 26, 2018 follow. The full report is available at the link below.
- Price Action: The November contract fell 6.5 cents (2.0%) to $3.185 on a 14.8 cent range ($3.250/$3.102).
- Price Outlook: Prices slid and established a new weekly after last week’s rare inside week. The market moved lower as weather forecasts moderated and the EIA reported a much larger than expected weekly storage change. Physical data has also turned bearish as the non-linear impact moderate temperatures reduced demand at the same time pipeline data suggested US production reached a new record level. However, pipeline data also indicated flows to US LNG export facilities reached a new record as well, partially mitigating rising US production. The current weather forecast is now warmer than 7 of the last 10 years. Pipeline data indicates total flows to Cheniere’s Sabine Pass export facility were at 3.5 bcf. This flow volume suggests feed gas is entering Train 5. Cove Point is net exporting 0.7 bcf.
- Weekly Storage: US working gas storage for the week ending October 19 indicated an injection of +63 bcf. Working gas inventories rose to 3,095 bcf. Current inventories fall (615) bcf (-16.6%) below last year and fall (618) bcf (-16.6%) below the 5-year average.
- Supply Trends: Total supply fell (1.2)bcf/d to 81.3 bcf/d. US production fell. Canadian imports fell. LNG imports fell. LNG exports rose. Mexican exports fell. The US Baker Hughes rig count rose +1. Oil activity increased +2. Natural gas activity decreased (1). The total US rig count now stands at 1,068 .The Canadian rig count rose +9 to 200. Thus, the total North American rig count rose +10 to 1,268 and now exceeds last year by +168. The higher efficiency US horizontal rig count rose +1 to 927 and rises +158 above last year.
- Demand Trends: Total demand rose +2.4 bcf/d to +72.7 bcf/d. Power demand fell. Industrial demand fell. Res/Comm demand rose. Electricity demand fell (4,636) gigawatt-hrs to 69,464 which trails last year by (187) (-0.3%) and trails the 5-year average by (640)(-0.9%%).
- Nuclear Generation: Nuclear generation fell (665)MW in the reference week to 76,458 MW. This is (9,003) MW lower than last year and (3,531) MW lower than the 5-year average. Recent output was at 75,871 MW.
The heating season has begun. With a forecast through November 9 the 2018/19 total cooling index is at (109) compared to (155) for 2017/18, (37) for 2016/17, (76) for 2015/16, (125) for 2014/15, (167) for 2013/14, (186) for 2012/13 and (162) for 2011/12.
Can U.S. Gas Demand Keep Up With Surging Production? - Natural gas production hit another high in the United States at approximately 87 billion cubic feet per day (Bcf/d) over the last weekend. The rise in production contributed to a total gas supply over 91 Bcf/d before we even head into the winter months.The surge in domestic natural gas production comes at the same moment as we are experiencing a shortage in storage going into the season with highest natural gas demand. Storage is vital during the winter months when demand for natural gas spikes and production is not able to keep up, causing the necessity to dip into reserves.Currently storage is at a 10-year low, coming in below 3.2 trillion cubic feet of available storage capacity. What’s more, net imports of Canadian natural gas have been low thanks to Enbridge’s pipeline rupture near Prince George, British Columbia. When the import volumes return to their normal levels, total gas supplies in the U.S. would rise even higher, potentially exceeding 92 Bcf/d.Most estimates for this week’s Energy Information Administration (EIA) weekly storage report project that there will be an injection in the low 50s Bcf, not nearly enough to make a dent in the persistent storage deficit.A Reuters poll of 18 market participants showed a range of 39 Bcf to 65 Bcf, with a median build of 51 Bcf. At this time last year, the build was 63 Bcf, and the five-year average is 77 Bcf for the corresponding period, emphasizing the shortcomings of this week’s storage injection.Natural gas demand can’t be expected to spike in early November either, with a very mild forecast for the coming weeks. We can therefore continue to expect a relatively low heating demand nationwide, despite several cold snaps in the Midwest and Northeast. In the face of this news, natural gas futures have been falling accordingly. Nymex futures settled at $3.166 for November, down 4.6 cents on the day. December plummeted 5.6 cents, ending up at $3.227, and the winter strip (November through March) went down 5.4 cents to $3.174. That being said, weather model volatility and market uncertainty means that big price swings more than likely in the near future. Meanwhile, despite depressed gas prices and major storage shortages, across the country production is natural gas production is ramping up.
NYMEX December gas rises despite warmer winter outlook - — NYMEX December natural gas futures contract rose 7.4 cents and settled at $3.261/MMBtu Wednesday, despite a warmer-than-average weather outlook The front-month contract traded between $3.207/MMBtu and $3.275/MMBtu. The National Weather Service calls for a likelihood of warmer-than-average temperatures over the next six to 10 days across much of the US. But prices were pushing up despite the expected warm start to winter, likely because the market is still indecisive about winter demand as storage stocks sit well below the five-year average. Current national stocks sit at 3.095 Tcf, a deficit of nearly 17%, or 624 Bcf, to the five-year average of 3.719 Tcf, according to the US Energy Information Administration. Bullish storage expectations are likely driving Wednesday's gains. A consensus of analysts surveyed by S&P Global Platts expects a 52-Bcf injection for the week ended October 26, significantly below the five-year average of 62 Bcf. Total US supply is set to drop by 700 MMcf day on day to 88.1 Bcf Wednesday, according to Platts Analytics. Much of the declines are likely to be driven by total dry gas production, which is estimated to drop by 600 MMcf on the day to stand at 84.7 Bcf. Over the past five days, production averaged 85.1 Bcf/d, an increase of 600 MMcf/ d from the prior five days. Output increased 600 MMcf/d month on month to average 84.0 Bcf/d for October. Average production stood at 74.5 Bcf/d in October 2017. Platts Analytics projections show output is likely to average nearly 85 Bcf/d over the next two weeks. US demand is estimated to drop nearly 1 Bcf and slide to 70.2 Bcf Wednesday, according to Platts Analytics data, likely on mild temperature expectations. Over the next seven days, demand is projected to average 70.7 Bcf/d, which is largely in line with the 71.8 Bcf/d demand seen during the same time last year.
Weather Spooks Natural Gas For Halloween - It was a spooky Halloween for natural gas bears as the December natural gas contract shot up over 2% and continued running after the settle on significantly colder afternoon weather model runs. These bullish weather forecasts sent the December/January Z/F contract spread to new narrow levels. This came after firmer cash prices initially spiked the front of the strip higher this morning as well. Our Morning Update for clients did show many of these Week 2 cold risks that intensified overnight but appeared to die off into early Week 3. Though that trend held in afternoon model guidance, cold earlier in Week 2 was seen being even more intense. The result was a forecast with solidly more cold risks for the 8-14 Day time period per the Climate Prediction Center. Traders are now attempting to determine just how intense and long lasting any Week 2 cold shot(s) will be, weighing the latest forecasts against the EIA storage number that comes out tomorrow morning. In our Afternoon Update we broke down all the latest forecasts through the day as well as our thoughts on how intense the cold gets, when it may break, what EIA data should show tomorrow, and what that could mean for prices. To give this all a look, and see all our extensive coverage of weather and natural gas, here
Slightly Smaller Gas Injection Can't Break Prices Up - After strength early this morning, the December natural gas contract settled down a bit less than a percent as record production numbers and bearish fundamental headlines outweighed a slightly smaller than expected storage injection as announced by the EIA. In what was a new development, it was the February contract that saw the largest losses on the day. Prices initially found strength on firm physical prices and overnight forecasts that were still relatively supportive. This was unsurprising as we noted in our Afternoon Update yesterday there was "short-term upside above $3.3 increasingly possible if this cold signal holds overnight..." as it did. Then our Morning Update outlined that "a brief bounce over $3.3 appears likely" but "...bounces above $3.3 appear likely to fail through tomorrow" thanks in part to forecasts that did not cool all that much more overnight, and sure enough prices reversed off a high of $3.318 down to a low of $3.216. Those forecasts did cool this afternoon, though, as we saw another slew of colder weather model guidance. While this did provide support, gas prices were already off solidly following an EIA print that was 5 bcf below our 53 bcf estimate but just a touch below the consensus. Of note was a meager build of just 1 bcf in the East thanks to much colder weather last week. In our Morning Update we outlined "slight downside risks to our +53 bcf estimate today" which played out but also had outlined that the number was expected to be loose overall either way. Then in our Afternoon Update we broke down what the print seems to mean for the natural gas market as well as what next week's print would likely hold as we looked at this week's weather-adjusted balances. We concluded with our view on how current weather forecasts are likely to shift into the weekend and how that should impact natural gas prices. To give this Update a look, and begin receiving all our detailed weather and natural gas-driven analysis, try out a 10-day free trial here.
Crazy Weather Models Shake Up Nat Gas - Weather continues to push around natural gas at will, with far warmer overnight weather models pushing prices far lower before colder afternoon model guidance shot prices back up to new highs. Weather was clearly the primary reason for the spike with the front of the strip making the largest gain on the day.The result was another significant spike in the Z/H December/March contract spread. Prices initially were off significantly this morning as we noted a solid dip in GWDDs in the medium and long-range in overnight forecasts. The Climate Prediction Center noted these trends in the 8-14 Day outlook today, which warmed but did not take into account all of the colder afternoon model guidance. Afternoon GEFS weather model guidance trended significantly colder to start things off, sending prices soaring with a significant medium-range cold shot (model images courtesy of Tropical Tidbits). Headed into the weekend, traders were forced to decide whether these trends would hold or intensify, with clear volatility across weather models. In our Pre-Close Update we outlined how we expected weather models to trend over the weekend, while also looking at how the latest weather-adjusted balances could influence price action as we moved into next week.
Cold Snap Could Send Natural Gas To $5 - The natural gas market is looking rather tight, even as U.S. production continues to set new records. Inventories fell sharply last winter, leaving the country a little light on stocks heading into injection season. That did not concern the market much, with record-setting production expected to replenish depleted inventories. However, the past six months has not led to surging stockpiles, and inventories replenished at a much slower rate than expected. We are about to enter the winter heating season with inventories at their lowest level in 15 years. For the week ending on October 19, the U.S. held 3,095 billion cubic feet (bcf) of natural gas in storage, or 606 bcf lower than at this point last year, and 624 bcf below the five-year average. The reason for this is multifaceted, with seasonal weather playing a role, but also structural increases in demand. “Hot summer weather, LNG liquefaction demand, exports to Mexico, and the industrial sector have all mitigated the impact from a 8.7 bcf/d YoY production growth surge this summer,” Bank of America Merrill Lynch said in a recent note. Low inventories and potential deliverability risks led the investment bank to hike its price forecast for the first quarter of 2019 to $4 per MMBtu, up from a prior estimate of just $3.40/MMBtu. Peak winter demand in the early 2000s stood at around 75 to 85 billion cubic feet per day (bcf/d), according to BofAML. That figure spiked to 100 bcf/d last winter, helping to explain the rapid decline in inventories. There was a cold snap in early January, but the winter on the whole was “near normal,” BofAML argues, making the steep fall in stocks all the more remarkable. In other words, demand is structurally much higher than it used to be; the sudden tightness is not just because of a seasonal anomaly. A cold snap this upcoming winter could lead to a price spike, especially with the inventory buffer so low. “The Polar Vortex winter of 2013-2014 realized a record low salt inventory level of 54 bcf,” BofAML said. Salt inventories are those that can be called upon quickly. “Another Vortex, which on average has occurred once every 7 years in the 1950-2018 period, would be catastrophic,” Bank of America Merrill Lynch warned.
Gastar Exploration Files for Chapter 11 Bankruptcy - Gastar Exploration Inc., a pure play Mid-Continent independent energy company, has entered into a restructuring support agreement (RSA) with Ares Management LLC, the company's largest funded-debt creditor and shareholder, Gastar announced Oct. 26. After Gastar’s failed efforts to repay or refinance debt or sell the company, it decided to file Chapter 11 bankruptcy. The restructuring will eliminate more than $300 million of the company’s debt and will provide $100 million in new, committed financing to fund the Gastar’s restructuring process and ongoing business operations.“The restructuring agreement we signed today is a comprehensive plan that will ensure Gastar remains competitive in its industry,” Gastar’s interim CEO Jerry R. Schuyler said in a company statement. “We can now set our sights on facilitating a smooth, efficient in-court restructuring while continuing to meet our obligations to our employee and vendor constituencies.” Gastar anticipates it will consummate the plan and emerge from Chapter 11 before the end of the year.
Shale oil becomes shale fail (and a nice subsidy for consumers) - I'm tempted to say the following to the writers of two recent pieces (here and here) outlining the continuing negative free cash flow of companies fracking for oil in America: "Tell me something I don't already know."But apparently their message (which has been true for years) needs to be repeated. This is because investors can't seem to understand the significance of what those two pieces make abundantly clear: The shale oil industry in the United States is using investor money to subsidize oil consumers and to line the pockets of top management with no long-term plan to build value.There is no other conclusion to draw from the fact that free cash flow continues to be wildly negative for those companies most deeply dependent on U.S. shale oil deposits. For those to whom "free cash flow" is a new term, let me explain: It is operating cash flow (that is, cash generated from operations meaning the sale of oil and related products) minus capital expenditures. If this number remains negative for too long for a company or an industry, it's an indication that something is very wrong.Only nine of 33 shale oil exploration and production companies reviewed in the report cited above had positive free cash flow for the first half of 2018. This is even though prices had risen all the way from a low of around $30 in 2016 to the mid-$70 range by the middle of this year.To get an idea of just how bad it has been even through periods when the price of oil averaged above $100 in 2011, 2012, 2013 and most of 2014, here are the annual free cash flows in dollars of those 33 companies combined since 2010 and they are all negative: -14 billion (2010), -21.9 billion (2011), -37.8 billion (2012), -16.8 billion (2013), -33 billion (2014), -34.4 billion (2015), -18.3 billion (2016), -15.5 billion (2017). Capital expenditures are what companies invest in future production—in this case, the acquisition of new oil deposits and the drilling and completion of new wells and associated infrastructure. Because operating cash flow has not been sufficient to cover the drilling of new wells, companies must either issue new debt or new shares to raise money to do so. The former makes companies more likely to go bankrupt if oil prices turn down and the latter dilutes the value of the company for existing shareholders. Either way, it's not good news for investors.
US Shale Oil Industry- Catastrophic Failure Ahead -- While the U.S. Shale Industry produces a record amount of oil, it continues to be plagued by massive oil decline rates and debt. Moreover, even as the companies brag about lowering the break-even cost to produce shale oil, the industry still spends more than it makes. When we add up all the negative factors weighing down the shale oil industry, it should be no surprise that a catastrophic failure lies dead ahead. Of course, most Americans have no idea that the U.S. Shale Oil Industry is nothing more than a Ponzi Scheme because of the mainstream media’s inability to report FACT from FICTION. However, they don’t deserve all of the blame as the shale energy industry has done an excellent job hiding the financial distress from the public and investors by the use of highly technical jargon and BS. For example, Pioneer published this in the recent Q2 2018 Press Release: Pioneer placed 38 Version 3.0 wells on production during the second quarter of 2018. The Company also placed 29 wells on production during the second quarter of 2018 that utilized higher intensity completions compared to Version 3.0 wells. These are referred to as Version 3.0+ completions. Results from the 65 Version 3.0+ wells completed in 2017 and the first half of 2018 are outperforming production from nearby offset wells with less intense completions. Based on the success of the higher intensity completions to date, the Company is adding approximately 60 Version 3.0+ completions in the second half of 2018. Now, the information Pioneer published above wasn’t all that technical, but it was full of BS. Anytime the industry uses terms like “Version 3.0+ completions” to describe shale wells, this normally means the use of “more technology” equals “more money.” As the shale industry goes from 30 to 60 to 70 stage frack wells, this takes one hell of a lot more pipe, water, sand, fracking chemicals and of course, money. However, the majority of investors and the public are clueless in regards to the staggering costs it takes to produce shale oil because they are enamored by the “wonders of technology.” For some odd reason, they tend to overlook the simple premise that… MORE STUFF costs MORE MONEY. Of course, the shale industry doesn’t mind using MORE MONEY, especially if some other poor slob pays the bill.
Why Majors Will Take a Bigger Role in US Shale - Independent producers will forever be pioneers of the U.S. shale sector, but as the play matures, expect major oil companies to play a growing and critical role in its future development. Majors, with their financial strength and integrated solutions, are well-equipped to handle the structural challenges that the U.S. shale sector now faces, from insufficient pipeline and export infrastructure in the Permian and Gulf Coast, to excessive gas flaring in Bakken. The time also looks right for majors get more involved and “scale up” in shale. Big Oil remains very light in U.S. shale oil relative to other upstream assets in their portfolio. Majors have traditionally focused on “megaprojects,” schemes such as those in deep water or oil sands, where capital investments are massive and payback periods are long. Giants like Royal Dutch Shell plc and Total S.A. have already exited from Canada’s oil sands, where they believe breakeven costs are too high. The onset of the low-carbon energy transition also must be considered, and the fact is that oil sands emit more carbon dioxide than any other oil projects and must produce for many years—at relatively high oil prices—to deliver sufficient financial returns. U.S. shale oil, on the other hand, has proven its mettle at low prices, having stood up to OPEC in a price war. Breakeven prices for shale have been driven below $40 a barrel and are even lower for companies fracking the best rock. Shale is a “short-cycle” upstream asset, meaning new production can be brought on within months after investment decisions are made. That’s a highly attractive feature to majors, which must not only manage today’s volatile prices but also consider the long-term demand outlook for new “long-cycle” megaprojects. Would majors greenlight a $55-billion project like Kashagan again? Probably not.
Canadian Producers Turn to Oil Trucks -- The highways of Saskatchewan show just how desperate Canadian oil producers are to get their crude to market. Tanker trucks laden with oil are journeying almost 500 miles (800 kilometers) to pipeline and rail terminals. It’s a phenomenon that Ken Boettcher, president of Three Star Trucking Ltd. in Alida, Saskatchewan, started to see three or four months ago when oil shippers around Kindersley, near the Alberta border, began requesting trucks to move their crude, in some cases, as far south as North Dakota. “Its never been a common practice before,” he said in a phone interview. “They can probably buy it cheaper and bring it down here and blend it.” Canada’s pipeline bottlenecks are pushing Canadian crude prices to the lowest in at least a decade, which has made shipping oil by truck more cost effective. At Hardisty, Alberta, heavy Western Canadian Select sold for $52.40 a barrel less than West Texas Intermediate crude futures earlier this month, the biggest discount in Bloomberg data going back to 2008. Almost 230,000 barrels of crude were exported by truck in August, the most in data going back to January 2015, according to data provided by Statistics Canada. Every month since December, more than 100,000 barrels have been exported by truck. A typical tanker truck can carry about 250 barrels of oil, Boettcher said. Hiring a truck to ship crude from the Permian basin of West Texas to Houston, a distance of almost 500 miles, costs about $15 a barrel one way, or double that if the tanker returns empty, said Sandy Fielden, director of research for the commodities group at Morningstar Inc. Pipeline constraints in Canada, combined with a surge of new oil-sands production, have created more demand for oil trucks. One export pipeline, Enbridge Inc.’s Line 3, is scheduled to be expanded by late next year, but other projects continue to face delays, including the planned expansion of the Trans Mountain pipeline to the British Columbia coast.
Repairs completed on ruptured gas pipeline near Prince George, B.C.- Enbridge - Enbridge Inc. says it has successfully completed repairs on the section of a natural gas pipeline that ruptured and burned near Prince George, B.C., three weeks ago. The company says following a comprehensive integrity assessment, it expects to begin safely returning the repaired segment to service within the next two days. It says it will gradually increase flows of natural gas through the repaired segment until it reaches 80 per cent of its normal operating pressure. A smaller pipeline nearby returned to service two days after the explosion, also at 80 per cent of its normal pressure, which the company says helps ensure the ongoing safety and integrity of the system. Once the repaired segment is returned to service, Enbridge says the system is expected to safely deliver between 23 and 25 million cubic metres of natural gas per day to B.C.’s Lower Mainland and the U.S. Pacific Northwest. The return-to-service plan has been reviewed by the National Energy Board and Enbridge says it’s conducting a comprehensive dig to help further validate the integrity of the entire system. The company says until it’s fully satisfied it is safe to operate the lines at full capacity, and subject to regulatory review, both pipelines will continue to operate at reduced pressure. It adds there are a number of assumptions, risks and uncertainties that might delay its plans for returning the pipeline to service.
TransCanada Moves Ahead with $1.5B NOVA Gas Expansion - Calgary-based pipeline company TransCanada Corporation is moving forward with its $1.5 billion NOVA Gas Transmission Ltd. (NGTL) expansion, the company announced Oct. 31.The expansion will move gas from Alberta and British Columbia to markets all over North America.The expansion plan includes about 197 kilometers (122 miles) of large diameter pipeline, three compression units, meter stations and associated facilities.“The NGTL System continues to expand as parties require and contract for greater pipeline capacity to meet the growing demand for clean-burning natural gas from domestic and export markets,” Russ Girling, TransCanada’s CEO, said in a company statement. “This new investment brings the capacity expansion programs underway on the NGTL System to more than $9 billion.”Applications for approvals to construct and operate the facilities are expected to be filed with the National Energy Board in 2Q 2019. Construction could begin as early as 3Q 2020 with most of capital investments happening in 2021 and 2022. TransCanada just reported its third quarter profits at $928 million.
Greenland says China oil majors eyeing Arctic island's onshore blocks (Reuters) - China National Petroleum Corp (CNPC) and China National Offshore Oil Corp (CNOOC) have expressed interest in bidding for onshore oil and gas blocks in Greenland to be offered in 2021, officials from the island said on Tuesday. The Arctic island, a self-ruling part of Denmark, is shifting its oil and gas licensing strategy from offshore to onshore in an effort to generate revenues faster, they said. The next blocks to be tendered will be on the Disko Island and Nuussuaq Peninsula area of West Greenland, industry and energy minister Aqqalu Jerimiassen told Reuters on the sidelines of a Greenland Day event at the Danish embassy in Beijing. Jerimiassen, who took office in May, said he met with the two Chinese oil majors, as well as China’s National Energy Administration, on Monday. The Chinese asked for follow-up meetings to discuss technical issues, said Jorn Skov Nielsen, Jerimiassen’s deputy. “They have not been active in Greenland earlier. It’s a new approach,” he added. “We are moving the short-term strategy of licensing onshore”. CNPC and CNOOC did not immediately respond to a request for comment. In neighbouring Iceland, CNOOC has been exploring the offshore Dreki area but has not reported any finds. Nielsen said it was too early to say how many blocks would be tendered, or to give an estimate for the resources in the “highly prospective” area. The U.S. Geogological Survey puts Greenland’s offshore oil and gas resources at about 50 billion barrels of oil equivalent, he said. Greenland’s domestic energy goal is to be powered 100 percent by clean energy by 2030, Jerimiassen later told a press conference, up from the current 70 percent, which is mostly from hydropower. Greenland will set up a representative office in Beijing “within a year,” to boost trade ties with China, Nielsen said. Denmark and the United States have been concerned about China’s interest in Greenland, notably over potential Chinese involvement in the financing and construction of airports.
Fracking in Lancashire- Second 0.8 tremor in 24 hours - A second tremor of 0.8 magnitude has been recorded within 24 hours at the UK's only active site for fracking. It was detected on Saturday after drilling for shale gas resumed in Lancashire following a 0.8 tremor on Friday. Neither was felt at surface. Since 15 October, Little Plumpton has been the first UK shale fracking site after the process was halted in 2011 when it was linked with earthquakes. Fracking firm Cuadrilla said it aimed to resume operations on Monday. The process restarted on Saturday morning after a 0.8 magnitude tremor on Friday, which is categorised as a "red" event by the monitoring system regulated by the Oil and Gas Authority.Saturday's tremor was detected at the firm's site in Little Plumpton after work ended for the day on Saturday, when operations finish at 13:00.Any tremor measuring 0.5 or above means fracking must be temporarily stopped while tests are carried out. A Cuadrilla spokeswoman said that, as the operations had finished before the detection, "This is not an 'red' incident under the traffic light system operated by the Oil and Gas Authority as we were not pumping fracturing fluid as part of our hydraulic fracturing operations at the time."However we will, as always, continue to monitor the seismic activity closely and plan to resume hydraulic fracturing on Monday 29 October."She said all relevant regulators had been informed.A spokesman for the the Oil and Gas Authority said: "While the operations at the Preston New Road site have been designed to minimise any disturbance, minor events like these were expected." He added: "Provided that the event is in line with the agreed Hydraulic Fracture Plan and the risk of induced seismicity continues to be appropriately managed, then operations may resume on Monday."
Fracking stopped again in Lancashire after 'biggest earthquake so far' - Fracking has stopped at a gas exploration site in Lancashire for the third time in 15 days after the biggest earthquake recorded so far. Energy firm Cuadrilla confirmed work had stopped again as a micro-seismic event measuring 1.1 magnitude on the Richter scale was detected at about 11.30am on Monday. It’s the 27th earthquake – and biggest – since fracking began on October 15, and has officially been classed as a ‘red event.’A Cuadrilla spokesman said: ‘This is the latest micro-seismic event to be detected by the organisation’s highly sophisticated monitoring systems and verified by the British Geological Survey (BGS). ‘This will be classed as a ‘red’ event as part of the traffic light system operated by the Oil and Gas Authority, but as we have said many times, this level is way below anything that can be felt at surface and a very long way from anything that would cause damage or harm. ‘In line with regulations, hydraulic fracturing has paused for 18 hours now, during which seismicity will continue to be closely monitored by ourselves and the relevant regulators.
Cuadrilla hails natural gas flow from Lancashire fracking operation - Gas has begun to reach the surface of the Preston New Road site, after Cuadrilla used hydraulic fracturing to free a small section of shale rock inside an exploration well. “Tthis is a good early indication of the gas potential that we have long talked about,” said chief executive Francis Egan. While the gas volume is small, Cuadrilla has been restricted by several “micro-seismic” tremors at the site, where fracking has been stopped since 2011 after being linked to two earthquakes. The most recent tremor occurred on Monday, leading the firm to pause operations for 18 hours, and marking the fifth such event in six days. However, Cuadrilla said it plans to “fully test” flow from its first two exploration wells towards the end of this year and into early 2019. “This initial gas flow is by no means the end of the story. However it provides early encouragement that the Bowland Shale can provide a significant source of natural gas to heat Lancashire and UK homes and offices and reduce our ever growing reliance on expensive foreign imports.
Minor earthquakes emerge as major threat to UK fracking - Protests, legal challenges and planning rejections have failed to stop the return of fracking in Britain, but the government’s regulations on earthquakes are fast emerging as the biggest threat to the nascent shale gas industry. The energy company Cuadrilla has been forced to stop work at its Preston New Road site in Lancashire twice in four days – on Friday last week and on Monday – due to minor earthquakes occurring while it was fracking. The tremors breached a seismic threshold imposed after fracking caused minor earthquakes at a nearby Cuadrilla site in 2011. Francis Egan, the firm’s chief executive, told the Guardian on Monday that the limits were proving “extremely challenging” and it was time they were reconsidered. But the energy minister, Claire Perry, rejected that call, saying it would be “a very foolish politician” who relaxed standards “when we we are trying to reassure people about safety”. Fracking firms must temporarily halt operations if a quake is triggered above 0.5-magnitude – far below anything that could be felt at the surface. If a 0.5-magnitude tremor occurred at surface-level, it would be akin to the vibrations of a passing car. The architects of the regulations are split on whether there should be a rethink. Peter Styles, one of the geologists who set the threshold, said: “We have started this frack now. If we stop now, we will never learn what happens in the UK situation. My opinion is for better or for worse they’re [Cuadrilla] going to have to tough it out unless we get earthquakes that are significant enough to be disruptive.” Styles, professor emeritus in applied and environmental geophysics at Keele University, said it was right the government rejected calls by Egan to lift the limit.“They [Cuadrilla] don’t like it because it costs them money when they stop, but that’s part of this game. It’s not the time to raise it. Let’s carry it out under these rules, observe it, and then revisit it when we have the data.”
Study suggests why fracking causes earthquakes in some places but not others - New research is digging in to why fracking causes earthquakes in some areas but not in others. A paper published Monday in Geophysical Research Letters suggests the likelihood of an artificial earthquake is heavily influenced by how stable the ground was before the energy industry showed up. "Some places appear to be particularly responsive to (artificially-)occurring earthquakes while other places aren't," said Honn Kao, a seismologist with the Geological Survey of Canada and lead author. Related Stories References to fracking, oil, birth policies removed from CAQ website N.B. Liberals question Tory leader campaigning with Alberta's Jason Kenney N.B. business groups call on province to reconsider fracking ban B.C. conducts study on effects of fracking for natural gas Scientists have known for some time that injecting fluids to dispose of wastewater or to free underground reserves of oil and gas can cause earthquakes. Regulatory records show there have been hundreds of seismic events since 2015 in a heavily fracked area of northwestern Alberta. Those earthquakes around the Fox Creek area have registered as high as 4.5 on the Richter scale -- strong enough to rattle dishes and pictures. Alberta's energy regulator has tightened restrictions on fracking in the area. Meanwhile, other regions see thousands of wells fracked while the earth remains still. While the link between fracking and earthquakes is well-established, precisely how that link works remains mysterious. Other studies have asked if it's related to local geology or particular fracking practices, but Kao said he's found a much more important contributor. "The background tectonic loading rate appear to be one of the predominant factors that control the region's response to injection-induced earthquakes," he said. In other words, the deep, underground shifting of Earth's rocky tectonic plates create zones where tension is concentrated and stored like a coiled spring, called tectonic deformation. The sudden shattering of rock through fracking or the injection of high-pressure wastewater releases that pent-up energy in the form of an earthquake. The finding could help explain why western Alberta and northeast B.C. have a high rate of fracking-induced earthquakes and places such as Saskatchewan, which has thousands of fracked wells, doesn't.
BP profit more than doubles on stronger oil prices -- BP reported third-quarter profits more than doubled on Tuesday, underpinned by stronger oil prices. The British oil giant posted first-quarter underlying replacement cost profit, used as a proxy for net profit, of $3.8 billion for the three-month period ending Sept 30. Analysts at data firm Refinitiv had been expecting third-quarter net profit to come in at around £3.013 billion ($3.847 billion).In the third quarter of 2017, BP reported net profit of $1.865 billion."Overall a good set of results with everything working well," Brian Gilvary, CFO at BP, told CNBC's "Squawk Box Europe" on Tuesday.Here are the key takeaways:
- Underlying replacement cost profit, used as a proxy for net profit, came in at $3.8 for the three-month period ending Sept 30.
- In the third quarter of 2017, BP reported net profit of $1.865 billion.
- Dividend of 10.25 cents a share for the third quarter, 2.5 percent higher than a year earlier
Earlier this year, BP announced the acquisition of BHP's Billiton's shale assets for $10.5 billion. At the time, the oil firm claimed the purchase would allow it to beef up its U.S. business and increase earnings and cash per share.The original deal was agreed with BP offering 50 percent cash and 50 percent shares for BHP Billiton's shale assets. However, the company announced it would now complete the transaction at the end of the month from available cash without resorting to a rights issue as planned.Gilvary said this "simplified the transaction an awful lot." Oil and gas production for the first nine months of the year rose to 2.5 million barrels of oil equivalent per day and was well placed to increase further, BP said, thanks in large part to its acquisition of BHP's U.S. shale business.
Shell Produces One of Its Strongest Ever Quarters - Royal Dutch Shell’s CEO Ben van Beurden announced Thursday that good operational delivery across all Shell businesses produced one of the company’s “strongest ever quarters”. The company reported cash flow from operating activities of $12.1 billion in the third quarter (3Q), which included negative working capital movements of $2.6 billion, compared with $7.6 billion in the third quarter of 2017, which included negative working capital movements of $1.3 billion. “Excluding working capital movements, cash flow from operations of $14.7 billion mainly reflected increased earnings and higher dividends received,” Shell said in its latest results statement. Shell’s CCS (current cost of supplies) earnings attributable to shareholders in 3Q were $5.6 billion, excluding identified items, compared with $4.1 billion, excluding identified items, in 3Q 2017. “Earnings primarily benefited from increased realized oil, gas and LNG prices as well as higher contributions from trading in Integrated Gas, partly offset by lower margins in Downstream, higher deferred tax charges in Upstream and adverse currency exchange effects,” Shell said in its results statement.
Low Rhine River water levels disrupt petroleum product shipments to parts of Europe - Historically low water levels on the Rhine River in Europe have resulted in transportation disruptions for shipments of petroleum products by barge, which in turn have resulted in higher freight costs and higher prices in markets upriver, such as in southern Germany. These disruptions are occurring at a time when markets along the Rhine River typically build inventories of distillate fuel for space heating ahead of the winter. The Rhine River, which runs northwest from Switzerland through Germany, France, and the Netherlands into the North Sea, is a major petroleum product transportation corridor. The navigable portions of the river connect the major refinery and petroleum trading centers of Amsterdam and Rotterdam in the Netherlands and Antwerp in Belgium, collectively known as the ARA, to inland markets. Tanker barges carry petroleum products from the ARA upriver to inland bulk distribution terminals that provide petroleum products to nearby areas. Water levels on the Rhine River fluctuate with seasonal rainfall, and both high and low water levels can create problems for barges: high water levels on the Rhine may put barges at risk of potentially striking bridges over the river, and low water levels mean barges risk becoming stuck and hitting the river bottom. Within safety and operational constraints, barges adjust the amount of cargo they carry to balance bridge clearance and deep draft restrictions based on water levels. Low water levels mean barges must carry less cargo, increasing the freight rate per unit of cargo. Water levels on the Rhine River measured at Kaub, Germany—near the Rhine’s midway point—have recently reached historic lows. The average water level at Kaub in October was 1.7 feet, compared to the five-year average level of 4.8 feet. The record low water levels in October 2018 are a sharp contrast to the water levels of early 2018 when water levels were at more than 20 feet.
NT's fracking emissions could cost more than $4b a year to offset by 2030, report finds - Offsetting emissions generated by fracking could cost up to $4.3 billion per year when the shale gas industry is at full production in the Northern Territory in 2030, according to new research by the Australia Institute. The huge sum is a warning sign of the mammoth task at hand for those responsible for developing a yet-to-be-implemented emissions offset framework in the Territory. The Australian Petroleum Production and Exploration Association has rejected the findings, labelling them a "deliberate attempt" to overstate potential emissions. Chief Minister Michael Gunner is bound by his word after he accepted in-full the fracking inquiry's recommendation that the NT and Australian governments seek to ensure there is no net increase in greenhouse gas emissions from onshore gas produced in the NT. "The Government made a very clear undertaking publicly that it would require all emissions to be offset, it's absolutely essential that it goes ahead," Australia Institute principal adviser Mark Ogge said. Mr Gunner indicated that he is waiting on the Federal Government to take the lead on emissions policy. "There's been a change of Prime Minister since those conversations [about national emissions policy] have started and the current Australian Government's policy is not entirely clear," he said.
Defiant Energy Policy of Mexico’s President-Elect Rattles Moody’s and Fitch - Moody’s has rated the $2 billion of senior unsecured notes due 2029 that Mexico’s state-owned oil company Pemex is in the process of issuing one notch above junk. Pemex is offering to pay a coupon interest rate of 6.5%. In its report on Friday, Moody’s blamed the company’s “weak liquidity, a heavy tax burden and the resulting weak free cash flow, high financial leverage and low interest coverage; and challenges related to crude production and reserve replacement.”Moody’s is also worried about the large amounts of debt coming due in 2020 and beyond. And Pemex will continue to be “dependent on debt capital markets to fund negative free cash flow,” it said.Fitch Ratings downgraded the outlook for Pemex’s debt from stable to negative amid concerns about the incoming government’s proposed energy policies. It rates Pemex three notches above “junk” (BBB+), but only because the company is state-owned. Its standalone credit profile — if Pemex were not backstopped by the Mexican state — is junk, seven notches into junk (CCC). Fitch has also warned earlier that if Pemex’s credit rating drops, so, too, will Mexico’s sovereign debt rating. Even a small deterioration in credit risk could exact a heavy toll on both the company and the country.
Argentina restarts natural gas exports to Chile - Argentina has begun exporting natural gas to Chile after a 12 year interlude, Chilean President Sebastian Pinera said on Tuesday, as the two South American neighbors seek to increasingly integrate their energy supply and electricity grids. The unconventional gas is being piped from Argentina’s oil- and gas-rich Vaca Muerta shale field to Chile’s southern province of Biobio. Argentina, which sits atop the world’s No. 2 shale gas reserves, was once a major supplier of natural gas to Chile, but triggered a diplomatic crisis in the mid-2000s by cutting off shipments when its own supplies ran low. Pinera said the two countries had very different, but often complementary, energy needs, and that depending on the time of year and circumstance, could either export or import fuel and electricity across their shared border. “This will permit us to back one another up without having to spend excess money to do so,” he said.
Oil spill detected in the channel of the Tuapse river Russia - According to the SCC of Rosmorrechflot, the operational duty officer of the Azov-Black Sea branch of the FBU “Morspasluzhba” received a message that pressure drop sensors in the pipeline operated at the Tikhoretsk-Tuapse oil pipeline in the port of Tuapse. ACF FBU MSS received a letter from the Transneft company with a request for help in eliminating the possible ingress of oil products into the open sea. A group of rescuers led by the head of the rescue operations of the port of Tuapse in a vehicle drove to the place of the alleged pollution of the sea area, since it is impossible to do this on the ship immediately due to floating large debris and trees at the place of deployment of the Bonsport Ship Valery Barsky. Visually observed rainbow spots in the river. Then “Valery Barsky” moved to the place of pollution of the waters of the river bed, which flows into the sea and began to explore the area. Separate foci of rainbow spots were discovered, which immediately began to be treated with a sorbent. From the port of Novorossiysk, the tugs Antares and Agat (tugboats owner – Transneft Service) were sent to help with the emergency oil spill response.
IMO meeting eliminates doubts over 2020 delay - - If any doubts remained that the International Maritime Organization’s tighter sulfur emission limits for ships in 2020 could be delayed or otherwise watered down, those doubts should have been laid to rest at a key committee meeting of the UN body last week. The IMO’s global marine fuels sulfur limit is set to drop from 3.5% to 0.5% at the start of 2020, forcing ship operators to use cleaner, more expensive alternatives to heavy fuel oil and bringing wide-ranging other consequences for commodity markets. S&P Global Platts Analytics forecasts a shift of approximately 3 million b/d of marine demand from high sulfur fuel oil to lower sulfur alternatives, and a significant jump in crude prices as refiners increase runs to maximize middle distillate output to meet the new demand. The January 1, 2020 implementation date for the new sulfur limit was decided two years ago, but doubts have repeatedly surfaced since then about whether it would be met, or could be postponed or phased in in a more relaxed manner. Those doubts were given another outing at a meeting of the IMO’s Marine Environment Protection Committee (MEPC) last week. A Wall Street Journal story on October 19 raised the prospect of the US putting obstacles in the way of the sulfur cap, quoting a White House source as saying the Trump administration would seek to “mitigate the impact of precipitous fuel cost increases on consumers.” The oil market reacted as if the Trump administration was opposing the lower sulfur cap outright: the 2020 hi-low fuel oil swap narrowed significantly on the morning of October 19, showing reduced expectations of a large-scale shift in marine demand that year.
Thousands of ships could dump pollutants at sea to avoid dirty fuel ban -Thousands of ships are set to install “emissions cheat” systems that pump pollutants into the ocean to beat new international rules banning dirty fuel. The global shipping fleet is rushing to meet a 2020 deadline imposed by the International Maritime Organization (IMO) to reduce air pollution by forcing vessels to use cleaner fuel with a lower sulphur content of 0.5%, compared with 3.5% as currently used. The move comes after growing concerns about the health impacts of shipping emissions. A report in Nature this year said 400,000 premature deaths a year are caused by emissions from dirty shipping fuel, which also account for 14 million childhood asthma cases per year. But the move to cleaner fuel could see harmful pollutants increasingly dumped at sea. According to industry analysis seen by the Guardian, between 2,300 and 4,500 ships are likely to install an exhaust gas cleaning system known as a scrubber to meet the regulations on low-sulphur fuel instead of buying the more expensive clean fuel. The scrubbers allow ship owners to continue buying cheaper high-sulphur fuel, which is washed onboard in the scrubber. In the case of the most used system, known as open loop, the waste water is discharged into the ocean. Although expensive at around $2-4m per ship fitting, the cost of buying and fitting a scrubber would be recovered in the first year, the industry analysis says. Cleaner low-sulphur fuel is likely to cost between $300 and $500 more a tonne, according to analysts. Ned Molloy, an independent shipping analyst, said that although the scrubbers were allowed by the IMO as a way to meet the lower-sulphur emissions rules, they were little more than an “environmental dodge”. Molloy said the scrubbers that had so far been fitted on the global fleet in advance of the 2020 deadline were mostly open-loop systems, which discharge into the sea, rather than the more expensive closed-loop systems, which require storage of waste water to be discharged into a facility on shore.
Pakistan works to contain oil spill near Karachi - AP News - Authorities in Pakistan have launched an operation to contain an oil spill that has damaged about 1.5 kilometers (nearly 1 mile) of coastline near the southern port city of Karachi. Moazzam Khan, of the Word Wildlife Fund, said Sunday that traces of oil have been found across an 8-kilometer (5-mile) stretch, endangering marine life. Residents suspect the oil leaked from an underwater pipeline at a nearby refinery. Mohammad Abid, of the Pakistan Maritime Security Agency, said two trails of oil can be seen from the air, but that the source is unknown. The refinery denied it was the source of the spill, but suspended operations after been ordered to do so by local authorities.
Damages from massive 2014 oil spill amount to NIS 281 million - The Environmental Protection Ministry said Sunday damages from a 2014 oil spill in southern Israel, considered to be the worst ecological disaster in the country’s history, totaled NIS 281 million ($75 million). According to the ministry, some 5 million liters of crude oil were spilled in December 2014 when a pipeline belonging to state-owned Eilat Ashkelon Pipeline Company (EAPC) ruptured, causing significant environmental damage to the Arava desert and Evrona Nature Reserve. The ministry’s announcement on the cost of the damages was included in a legal opinion it had ordered as part of mediation proceedings on the oil spill. “This opinion is a direct continuation of the ministry’s policies, according to which harming nature has a price, and therefore it must be ensured that companies that fail to protect the environment will fully bear the damages caused to the environment and the public,” the ministry said in a statement. The total damages included NIS 65 million ($17 million) in rehabilitation costs and NIS 216 million ($58 million) in compensation for the environmental damages, according to the ministry, the former of which was already paid by EAPC as part of clean-up efforts. The ministry said a criminal investigation has also been underway, but did not indicate who is suspected.
Red Sea Project to Create 30,000 Jobs - Saudi Aramco and SABIC will develop an integrated industrial complex to convert crude oil to chemicals (COTC) at Yanbu, located on Saudi Arabia’s west coast, the companies said Thursday in a joint statement. On Nov. 26, 2017, Saudi Aramco reported that it signed a memorandum of understanding with SABIC to develop a fully integrated COTC complex in the Kingdom. The facility reportedly will be capable of processing 400,000 barrels per day of crude oil and producing approximately 9 million tons of chemicals and base oils annually using an economically viable and unprecedented configuration. Earlier this year, Saudi Aramco and SABIC selected Wood and KBR to perform the project management and front end engineering work for the complex. In Thursday’s statement, the developers noted that the contractors are finalizing their selection of leading technologies to complement their technologies. According to Saudi Aramco and SABIC, the joint project bolsters the alliance between the top two Saudi global entities and supports the Kingdom’s goal of creating a world-leading downstream sector in country. Additionally, the developers maintain the complex will generate an estimated 30,000 direct and indirect jobs and contribute 1.5 percent to Saudi Arabia’s gross domestic product by 2030. “This venture will contribute to the realization of one of the major aspirations of Saudi Vision 2030, namely achieving economic prosperity by boosting our investment capacity, diversifying the economy and creating jobs for Saudi nationals,” SABIC Vice Chairman and CEO Yousef Abdullah Al-Benyan stated in the companies’ Nov. 26 announcement. “Once completed, this project will not only be the largest crude oil to chemicals complex in the world, it will also set a new competitive threshold thanks to the project’s mass scale and the benefits derived from our joint collaboration.” In the same announcement, Saudi Aramco President and CEO Amin H. Nasser pointed out that COTC will help the national oil company to expand its downstream portfolio and reduce its focus on the transportation sector.
OPEC Should Boost Crude Production at Next Meeting, the IEA Says - OPEC must decide to boost oil output at its next meeting to “comfort” a tightening market, said the head of the International Energy Agency. “Global oil markets are going through a very sensitive period -- global economic growth as well,” IEA Executive Director Fatih Birol said in an interview in London 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.” Without an increase in output from the Organization of Petroleum Exporting Countries, Birol reiterated his warning the global economy will enter “a red zone” because momentum is already slowing amid trade disputes. The world still needs more oil to compensate for losses from Iran and Venezuela, he said. While the oil market is well supplied right now “the next few months might be difficult if the producers don’t increase production or give the signal for it.” Birol’s warning came in contrast to a statement from ministers from Saudi Arabia, Russia and other producers. They gave the clearest sign yet that they could return to cutting production, highlighting the need to prepare “options” for how much oil the group should produce next year to prevent the market slipping back into imbalance. Saudi Arabia’s Energy Minister Khalid Al-Falih said in an interview with state-owned television Al Arabiya that he is concerned about rising oil inventories and will monitor output levels in producing countries including Iran, Venezuela, Libya and Nigeria.In its latest oil market report the IEA cut forecasts for oil demand growth this year and next because of increasing threats to global economic growth. However it also warned that dwindling spare production capacity will keep prices high.Swiss bank UBS Group AG said in a recent report that it sees global oil demand growth slowing to 1.2 million barrels a day in 2019, from 1.5 million barrels a day this year and last year. Supply-side risks will remain in focus until mid-2019, potentially pushing spare capacity to a 10-year low, it said. After surging almost 7 percent in September, Brent crude futures are almost back to where they started due to high U.S. inventories, rising shale output and a stock market rout.
Trump’s sanctions on Iran tested by oil-thirsty China, India (Reuters) - Shortly after U.S. President Donald Trump announced in May he would reimpose sanctions on Iran, the State Department began telling countries around the world the clock was ticking for them to cut oil purchases from the Islamic Republic to zero. The strategy is meant to cripple Iran’s oil-dependent economy and force Tehran to quash not only its nuclear ambitions, but this time, its ballistic missile program and its influence in Syria. With just days to go before renewed sanctions take effect Nov. 5, the reality is setting in: three of Iran’s top five customers – India, China, and Turkey - are resisting Washington’s call to end purchases outright, arguing there are not sufficient supplies worldwide to replace them, according to sources familiar with the matter. That pressure, along with worries of a damaging oil price spike, is putting the Trump administration’s hard line to the test and raising the possibility of bilateral deals to allow some buying to continue, according to the sources. The tension has split the administration into two camps, one led by National Security Adviser John Bolton, who wants the toughest possible approach, and another by State Department officials keen to balance sanctions against preventing an oil price spike that could damage the U.S. and its allies, according to a source briefed by administration officials on the matter. The global price of oil peaked just below $87 a barrel earlier this month, before easing back to their current level around $77 a barrel on Monday. Because of the concern over oil prices, the source said, the administration is considering limited waivers for some Iranian customers until Russia and Saudi Arabia add additional supply next year, while limiting what Tehran can do with the proceeds in the meantime. Revenues from sales could be escrowed for use by Tehran exclusively for humanitarian purposes, the source, who asked not to be named, said – a mechanism more stringent than a similar one imposed on Iran oil purchases during the last round of sanctions under U.S. President Barack Obama. “If you’re the administration, you’d like to ensure you don’t have a spike in the price. So, you are better off from mid-2019 onwards to aggressively enforce the barrels side of reducing to zero and in the interim aggressively enforcing the revenue side,” the source said.
Trump Admin May Stun Iran Oil Waiver Seekers -- The oil market could be in for a surprise when U.S. sanctions on Iranian crude exports are implemented in 10 days, according to Hedgeye Risk Management LLC. Traders who expect the U.S. to hand out waivers allowing certain nations to continue buying oil from the Islamic Republic, "are making a huge miscalculation," Joe McMonigle, head of energy policy at Hedgeye, said in a note. "We see more than a 50 percent chance of an early enforcement of Iran sanctions to send a message and incentivize others to get Iran imports to zero," McMonigle said. "We think this will come as a shock to oil markets." Oil prices this month have tumbled from their highest levels in almost four years, in part on speculation that waivers could blunt the impact of sanctions. Hedgeye sees that reversing, with the loss of at least 1 million barrels-a-day of Iranian exports boosting Brent crude by $5 a barrel. The international benchmark could even hit $90 a barrel for the first time since 2014, before settling back to around $85, McMonigle said.
Iran is still selling a lot of oil just days before Trump's sanctions deadline - The Trump administration has cut down Iran's oil exports more quickly than many expected, but just days before a White House deadline, it is still a long way from achieving its stated goal of zeroing out Iranian oil sales.Iran's oil exports have fallen by about a third in the five months through September. They tumbled by about 800,000 barrels per day since President Donald Trump announced in May that he wasabandoning a nuclear accord with Iran and restoring wide-ranging sanctions on its economy.Still, Iran was selling roughly 1.7 million to 1.9 million bpd of crude oil and condensate, a super light form of oil, in September, according to estimates by investment banks, tanker-tracking firms and the International Energy Agency.That's down from a 2018 peak of 2.7 million bpd in June, according to ClipperData. In the first six months of the year, Iran was averaging 2.4 million bpd in shipments, S&P Global Platts Analytics estimates.Some of Iran's biggest customers, including China and India, are expected to keep buying its barrels. The Trump administration has also indicated it will allow some countries to continue importing limited quantities of Iranian oil, but officials haven't disclosed which nations will receive waivers. Along with China and India, countries like Turkey, Italy, Spain, Greece and Japan have kept purchasing Iran's crude. But analysts widely expect the losses to balloon to between 1 million and 1.5 million bpd by the end of the year. "Iranian crude and condensate exports look set to finish October around a similar level to September, although we expect volumes to drop off next month as sanctions kick in and buyers dissipate," said Matt Smith, director of commodity research at ClipperData, a firm that tracks tanker traffic. Petro-Logistics, another tanker-tracking firm, says Iran probably lost more than 100,000 barrels per day in October.
EU Struggles To Create Iran Oil Trade Payment Vehicle - Although the European Union (EU) has vowed to create a special purpose vehicle to continue trade with Iran after the U.S. sanctions on Tehran’s oil return next week, the bloc is struggling with the set-up of such vehicle because no EU member is willing to host it for fear of angering the United States, the Financial Times reported on Sunday, citing EU diplomats.The EU said last month that the foreign ministers of China, France, Germany, Russia, and the UK - the countries still in the Iran nuclear deal - met with Iran’s foreign minister and decided to create a special purpose vehicle for dealings with Iran. After the meeting, Federica Mogherini, the High Representative of the EU for Foreign Affairs and Security Policy, said that with the planned vehicle:“In practical terms this will mean that EU Member States will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue trade with Iran, in accordance with European Union law, and could be opened to other partners in the world.”But the EU has met several hurdles in the work to setting up a payment mechanism with Iran, including the fact that no EU nation is eager to host the special purpose vehicle.“No EU government wants to cross the US by having the SPV,” one official told FT after meetings within European Commission.The United States will be “aggressive and unwavering” in enforcing the sanctions on Iran and won’t let those sanctions be evaded by the European Union or anyone else, U.S. national security advisor John Bolton said after the EU announced it would be working to create such vehicle.U.S. Secretary of State Mike Pompeo also criticized the EU plan for continuing transactions with Iran, describing it as “one of the most counterproductive measures imaginable for regional global peace and security.”The EU-Iran payment mechanism should be legally in place by November 4, when the U.S. sanctions on Iran return, three EU diplomats told Reuters last week, but added that the mechanism won’t be operational until early in 2019.
Sunday Midnight Will Mark Dividing Line in Oil World -- Midnight on Sunday will mark a dividing line in the world of oil. Beyond that point, anyone unloading a tanker from Iran risks the full wrath of the U.S. government. The Middle East’s third-biggest oil producer has already seen many buyers flee, with sales tumbling 37 percent since President Donald Trump announced that he’d reimpose sanctions. Once those restrictions formally kick in on Nov. 5, the overall supply disruption could become the biggest since Libya erupted in civil war at the start of the decade. There are signs the impact will be mitigated, as some buyers win partial exemptions while other producers -- particularly Saudi Arabia -- pump more to fill the gap. Still, there are doubts about their capacity to do so and the global nature of the oil market means nobody is fully insulated. Even U.S. drivers, whose engines haven’t seen a drop of Iranian crude for decades, have felt pain at the pump. U.S. oil futures climbed to a four-year high near $77 a barrel last month on growing concerns there could be a shortage as sanctions bite deeper. While those fears have eased along with prices in recent weeks, significant risks remain. “Iran’s oil exports are falling rapidly, and perhaps more and more in the weeks to come,” Fatih Birol, executive director at the International Energy Agency, said in a Bloomberg television interview. The Trump administration has sent mixed signals, swerving between saying it’ll send Iranian oil exports to “zero” and dangling waivers that could allow some to keep buying. A senior administration official said this week that the U.S. has agreed to let eight countries -- including Japan, India and South Korea -- keep buying Iranian oil, but only temporarily. While analysts don’t expect a complete halt, there’s a growing consensus that Trump’s tough stance means crude exports will plunge further than during a previous round of sanctions under Barack Obama’s administration in 2012. Back then they were sliced in half to 1 million barrels a day, according to the IEA, which advises industrialized countries on energy policy. This time, 1.1 million barrels a day have already been cut from Iran’s shipments -- a combination of crude and a light oil called condensate that was spared from curbs in 2012, according to data compiled by Bloomberg. The corresponding drop in production has been smaller as some of that output went into storage. That takes total exports to about 1.76 million barrels a day in October -- more than is pumped from the North Sea.
Russia says US sanctions 'illegal', will help Iran trade oil -- Russian Energy Minister Alexander Novak has said Moscow will support Iran to counter US oil sanctions.Washington on Friday restored sanctions on Tehran, which had previously been lifted under the 2015 nuclear deal. The measures are due to come into effect on Monday.In an interview with the British Financial Times newspaper, Novak said that Russia is looking to continue trading Iranian crude oil beyond the Monday cut-off."We believe we should look for mechanisms that would allow us to continue developing cooperation with our partners, with Iran," Novak told the FT. Under a 2014 oil-for-goods deal, Moscow sells Iranian oil to third parties while Tehran uses the revenues from those sales to pay for Russian goods and services.The Russian energy ministry told the FT that the trade would continue next week, while Novak said that Moscow considered the US sanctions to be "illegal". "We already live in the condition of sanctions," he said. "We do not recognise the sanctions introduced unilaterally without the United Nations, we consider those methods illegal per se."
Trump will reportedly allow India and South Korea to keep buying sanctioned Iranian oil - The United States is poised to grant waivers to India and South Korea that will allow the countries to continue buying oil from Iran, despite the renewal of U.S. sanctions next week, according to news reports. The Trump administration gave oil buyers 180 days to wind down purchases of Iranian crude in May, when President Donald Trump announced he was abandoning a nuclear accord with Iran and restoring sanctions on its economy. The administration told importers to completely cut off purchases by Nov. 4, but it is widely expected to allow some countries to continue reducing purchases beyond that date.On Thursday, The Economic Times reported that the administration will allow India to purchase 1.25 million tons of Iranian oil each month through March. A source told the English-language Indian newspaper that India and Washington have "broadly agreed on a waiver" and that "India will cut import by a third."India, the second-largest purchaser of Iranian oil, imported about 22 million tons from Iran in the 2017-2018 period, according to the paper.High crude prices and a deteriorating Indian rupee have caused oil price inflation in the country and sparked protests over fuel costs. While Brent crude is trading at about $75, India is essentially paying double that after inflation, Fatih Birol, executive director of the International Energy Agency, told CNBC this week.The payment mechanism remains uncertain, but India is expected to continue paying for Iranian oil in euros and rupees, sources said. Iran would use rupees to pay for rice, drugs and other items, while the balance of revenues would be held in escrow until sanctions are lifted, The Economic Times reported.Bloomberg News later reported that South Korea, in addition to India, has agreed to the outlines for a waiverwith the United States. Bloomberg also reported that funds from Indian imports would go into an escrow account. Several other oil importing nations are also seeking waivers.Japan's top spokesperson for the government on Thursday said the nation had yet to receive a waiver, Reuters reported. China, Iran's biggest oil customer, has also sought a waiver, and its biggest refiners have reportedly halted imports in November until Beijing gets clarity from Washington. U.S. sanctions have cut Iran's exports by roughly a third, with shipments shrinking to roughly 1.7 million to 1.9 million barrels per day by the end of September, according to estimates from several sources.
US Approves Waivers On Iranian Oil Imports As Supply Panic Fades - With oil prices already extending the drop from their highs as the trader "panic attack" identified by celebrated energy analyst Art Berman abates, and approaching a bear market from recent highs, a Friday morning report from Bloomberg will likely ensure that prices continue to move lower.According to an anonymous "senior administration official", the US will soon approve waivers for eight countries, including Japan, India and South Korea, that will allow them to continue buying Iranian crude oil even after sanctions are reimposed on Monday. China is also believed to be in talks to secure a waiver, while the other four countries weren't identified. The waivers are part of a bargain for continued import cuts, which the administration hopes will lead to lower oil prices. Secretary of State Mike Pompeo is expected to announce the exemptions on Friday.Speculation that waivers could be forthcoming had been brewing for some time, and has been one of the factors driving oil prices lower in recent weeks. Pompeo has acknowledged that waivers were being considered for countries who insist that they depend on Iranian supplies, while adding that "it is our expectation that the purchases of Iranian crude oil will go to zero from every country or sanctions will be imposed." Assuming the US does follow through with the waivers, it's expected that they would be temporary, and the US would expect that the recipients would continue to wean themselves off Iranian crude. The administration will also reportedly ask that these countries reduce their trade in non-energy goods. It's believed that Turkey, another major importer of Iranian crude, may be one of the four working on an exemption, according to Turkish Energy Minister Fatih Donmez told reporters in Ankara on Friday. Iran was Ankara’s biggest source of oil last year, accounting for more than 25% of Turkey’s daily average imports of around 830,000 barrels.
Oil Trades Below $68 -- Oil traded below $68 a barrel as traders assessed mixed supply signals from producers. Futures in New York dropped as much as 0.5 percent after falling 2.2 percent last week. Russia suggested on Saturday the country may keep its output at the current level above the Soviet-era record or raise production further, and warned of a potential supply shortage. That’s just days after the Organization of Petroleum Exporting Countries and its allies signaled they could cut output in 2019. Oil has slumped about 12 percent from a four-year high earlier this month as a rout in global equity markets raised concerns about economic growth and energy demand at a time of growing U.S. crude inventories. With renewed American sanctions on Iran going into full effect in just a week, traders are looking for signs whether OPEC and its partners are able -- and willing -- to increase production to fill any potential supply gap. “I expect investors will take a wait-and-see stance this week before the return of sanctions on Iran and U.S. midterm elections,” Makiko Tsugata, a senior analyst at Mizuho Securities Co., said by phone from Tokyo. Despite a potential decline in Iranian exports, “if both Saudi Arabia and Russia boost output and U.S. production continues to rise, we could have a supply glut.” West Texas Intermediate for December delivery declined as much as 32 cents to $67.27 a barrel on the New York Mercantile Exchange and traded at $67.36 a barrel at 3:38 p.m. in Tokyo. The contract rose 26 cents to $67.59 on Friday. Total volume traded was about 14 percent below the 100-day average. Brent for December settlement fell 29 cents to $77.33 a barrel on the London-based ICE Futures Europe exchange. The contract climbed 73 cents to $77.62 on Friday. The global benchmark crude traded at a $9.99 premium to WTI. Russian Energy Minister Alexander Novak told reporters in Istanbul he sees no grounds for reducing output and that there are risks of a deficit in oil markets. The nation’s oil production in September rose by almost 150,000 barrels a day to 11.356 million, a post-Soviet high, from a month earlier. The country suggested its output rose further in October. Similarly, Saudi Arabia said last week the kingdom can further increase its production to ease supply shortfalls even as it has already boosted output to 10.7 million barrels a day, near an all-time high. Energy Minister Khalid Al-Falih said OPEC and its allies are in “produce as much as you can mode” to meet demand and replace any shortages.
Hedge funds cut bullish bets on oil to lowest for over a year- Kemp (Reuters) - Hedge fund managers continued to liquidate former bullish positions in oil last week and for the first time in more than a year clear signs of fresh short-selling emerged. Rising oil production from Saudi Arabia, the United Arab Emirates, Kuwait and Russia has eased concerns about the availability of supplies once U.S. sanctions on Iran are re-imposed in November. At the same time, intensifying fears about a possible global economic slowdown have hit oil prices and equity markets hard over the last three weeks. The bullish wave of hedge fund position-building in oil and refined products that started in July 2017 and crested in January 2018 has now largely broken. Portfolio managers’ combined positions in crude and refined products climbed from a low of 310 million barrels at the end of June 2017 to almost 1.5 billion barrels in late January but have since fallen back to just over half that level. Fund managers have not yet turned bearish on the outlook for oil prices; U.S. sanctions on Iran are deterring all but the most aggressive sellers. But the hedge fund community is no longer significantly bullish, with most managers opting to realise their profits after a year-long rally and await further developments. Hedge funds and other money managers cut their combined net long position in the six most important petroleum futures and options contracts by 111 million barrels in the week to Oct. 23. Portfolio managers have cut their combined net long position by the equivalent of 298 million barrels over the last four weeks to just 801 million barrels, the lowest level for more than a year. Bullish long positions were cut to just 965 million barrels, the lowest level for 65 weeks, according to position records published by regulators and exchanges. The ratio of long to short positions sank to less than 6:1, down from a recent peak of more than 12:1 at the end of September (https://tmsnrt.rs/2CMzx3Y ).
Oil dips as Russia signals output will stay high (Reuters) - Oil prices edged lower on Monday, with futures on track for the worst monthly performance since mid-2016, after Russia signaled that output will remain high and as concern over the global economy fueled worries about demand for crude. Brent crude LCOc1 futures fell 28 cents to settle at $77.34 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 55 cents to settle at $67.04 a barrel. Global benchmark Brent was on track to drop about 6.6 percent for the month. U.S. crude was on course to fall about 8.5 percent. Both were set for the steepest monthly decline since July 2016. Even with U.S. sanctions on Iranian exports due to come into force on Nov. 4, oil prices have fallen about $10 a barrel since four-year highs reached in early October. Russian Energy Minister Alexander Novak said on Saturday there was no reason for Russia to freeze or cut its oil production levels, noting that there were risks that global oil markets could be facing a deficit. The Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia and non-OPEC member Russia, agreed in June to lift oil supplies, but OPEC then signaled last week that it may have to reimpose output cuts as global inventories rise. “When the Russians start talking about keeping the production levels high and even the possibility that they need to increase it because of a possible tightness in supply, that brought on some selling pressure,” said Gene McGillian, director of market research at Tradition Energy in Stamford, Connecticut. Industrial commodities such as crude and copper have also been rattled by hefty losses in global equities due to concern over corporate earnings, and fears over the impact to economic growth from escalating trade tensions, as well as a stronger dollar. The U.S. dollar index .DXY also rose, supported by robust U.S. consumer spending data. [USD/] A stronger dollar makes greenback-denominated commodities more expensive for holders of other currencies.
Crude Oil Falls on Glut Fears - The two key crude oil benchmarks settled lower Monday amid fears of a potential supply glut. A barrel of West Texas Intermediate (WTI) crude oil for December delivery lost 55 cents Monday to settle at $67.04. The light crude benchmark traded within a range from $66.67 to $67.95. The December Brent futures price posted a more gradual decline, falling 28 cents to settle at $77.34 a barrel. As Bloomberg reported earlier Monday, traders contemplated an uncertain crude supply outlook as implementation of U.S. economic sanctions on Iran approaches. The Bloomberg article notes that Russia has suggested it may not cut its oil production to stave off a “potential supply shortage.” Moreover, it states that Saudi Arabia has indicated it could hike its output further. The article quotes a Saudi official as saying that the Kingdom and other OPEC members are in a “‘produce as much as you can mode.’” Reformulated gasoline (RBOB) often follows the pattern of crude oil, but that was not the case Monday. November RBOB posted a modest increase, ending the day a penny higher to settle at $1.82 a gallon. The settlement price for November Henry Hub natural gas was flat Monday at $3.185. During the early week session, the front-month contract bottomed out at $3.10 and peaked at just under $3.20.
Oil Holds Losses -- Oil held losses near $67 a barrel on speculation that an escalating trade dispute between the U.S. and China will dampen global growth at a time when American crude inventories are growing. Futures in New York were little changed, after a 0.8 percent decline on Monday. The U.S. is said to prepare another round of tariffs on all remaining Chinese imports if talks between the presidents of the two countries fail to ease trade friction. Meanwhile, American crude stockpiles are forecast to have risen for a sixth straight week. Crude has retreated more than 8 percent this month, the worst monthly decline since July 2016. While ongoing trade tensions between the world’s two largest economies stoke concerns over global energy demand, traders continue to watch how much Iranian supply will be taken out of the market when U.S. sanctions hit early next month. Meanwhile, OPEC is likely to keep output policy steady when it meets in December, Nigeria’s oil minister said. “The negative outlook on global growth, which had been spurred by the U.S.-China trade war and economic crisis in emerging markets, is bleeding into the oil market,” Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone. “However, depending on what happens with Iran later this week, oil could go both ways, so the market seems to be taking a cautious stance near $67 a barrel.” West Texas Intermediate for December delivery was up 10 cents at $67.14 a barrel on the New York Mercantile Exchange at 7:28 a.m. in London. The contract dropped 55 cents to $67.04 on Monday. Total volume traded was in line with the 100-day average. Brent for December settlement, which expires Wednesday, traded at $77.15 a barrel on the London-based ICE Futures Europe exchange, down 19 cents. The contract lost 0.4 percent to $77.34 on Monday. The global benchmark crude traded at a $9.99 premium to WTI. In case a planned meeting between presidents Donald Trump and Xi Jinping yields no progress on the sidelines of a Group 20 summit in Buenos Aires next month, U.S. officials are preparing a new list which would apply to the Chinese products that aren’t already covered by previous rounds of tariffs.
Oil Awaits Direction As Iran Sanctions Loom - Oil started out the week seeing some volatility and choppy trading, awaiting more signs of a clear direction. With just days to go before U.S. sanctions on Iran go into effect, it appears that India, China and Turkey are still resisting demands from Washington to eliminate purchases. Reuters reports that there is tension within the Trump administration over how hard to press these countries, with one camp, led by national security adviser John Bolton, pushing for zero tolerance, and others more in favor of offering some waivers. Several top importers are still set to buy some Iranian oil in November. “We have told this to the United States, as well as during Brian Hook’s visit,” a source from the Indian government told Reuters, referring to the U.S.’ special envoy. “We cannot end oil imports from Iran at a time when alternatives are costly.” Crude oil posted steep losses over the past two weeks, the result of growing concerns about the health of the global economy. Other commodities, including copper, have also seen volatility. “It is often said that when stock markets sneeze, commodities catch a cold. This adage was on full display last week as a global rout on equity gauges dragged the energy complex lower,” PVM Oil Associates strategist Stephen Brennock said to Reuters. With Iran sanctions set to take effect in a few days, the market is awaiting further clarity. Saudi Arabia and Russia have vowed to cover any supply shortfall, but Iran’s oil exports likely won’t go to zero. “I expect investors will take a wait-and-see stance this week before the return of sanctions on Iran and U.S. midterm elections,” Makiko Tsugata, a senior analyst at Mizuho Securities Co., told Bloomberg. Even though Iran is set to lose a significant portion of its exports, “if both Saudi Arabia and Russia boost output and U.S. production continues to rise, we could have a supply glut.”
Oil prices down more than 1 pct on rising supply, trade war(Reuters) - Oil prices dropped more than 1 percent on Tuesday on signs of rising supply and concern that global economic growth and demand for fuel will fall victim to the U.S.-China trade war. Brent crude futures fell $1.43, or 1.9 percent, to settle at $75.91 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell 86 cents to settle at $66.18 a barrel, a 1.3 percent drop. Earlier in the session, Brent reached a session low of $75.09 a barrel, the lowest since Aug. 24. WTI slumped to $65.33 a barrel, the weakest since Aug. 17. Prices were little changed in post-settlement trade after industry group the American Petroleum Institute reported U.S. crude inventories rose 5.7 million barrels last week, more than analysts’ forecast for a 4.1 million-barrel build. Investors will look to official government data on U.S. inventories due to be released Wednesday. Both crude benchmarks have fallen about $10 a barrel from four-year highs reached in the first week of October and were on track to post their worst monthly performance since July 2016. Oil has been caught in the global financial market slump this month, with equities under pressure from the trade fight between the world’s two largest economies. The United States has imposed tariffs on $250 billion worth of Chinese goods, and China has responded with retaliatory duties on $110 billion worth of U.S. goods. U.S. President Donald Trump said on Monday he thinks there will be “a great deal” with China on trade but warned that he has billions of dollars worth of new tariffs ready to go if a deal is not possible. Trump said he would like to make a deal now but that China was not ready. He did not elaborate. “One discussion that is developing is that (trade tensions) are hurting demand for crude oil. There’s probably an element of truth to that,” said Bob Yawger, director of futures at Mizuho in New York. The International Energy Agency (IEA) said high oil prices were hurting consumers and could dent fuel demand at a time of slowing global economic activity. Oil production from Russia, the United States and Saudi Arabia reached 33 million barrels per day (bpd) for the first time in September, Refinitiv Eikon data showed.
Vitol sees oil prices falling as demand growth falters (Reuters) - Oil prices will likely fall next year as demand is curbed by trade wars and weakness in emerging market economies, the world’s biggest oil trader Vitol predicted on Tuesday. Chief executive Russell Hardy told the Reuters Commodities Summit that Vitol had revised down its forecast for oil demand growth next year to 1.3 million barrels per day (bpd) from 1.5 million previously. It also cut this year’s forecast to 1.3 million from 1.7 million. “We have never been hyper-bullish. We have always had an expectation that high prices would dent demand,” Hardy said in his first in-depth interview since becoming CEO in March. “Crude markets are not that tight in the immediate term ... and a fair price of oil going into next year is probably closer to the $70 or $65 per barrel mark than the $85-$90 area that some people are talking about.” Oil prices jumped above $85 per barrel earlier this month on fears of a steep decline in Iranian supply as U.S. sanctions on Tehran come into force on Nov. 4. Hardy said he saw Iranian oil exports declining, but not as sharply as previously feared - probably sticking above 1 million bpd because China, India and Turkey were likely to continue buying crude from Tehran. Combined with softer demand, this should help keep the oil market in balance for the first half of next year, provided Saudi Arabia pumped near record-high volumes and the world avoided another major supply disruption, Hardy said. “There’s not much room for things to go wrong in any supply sense, because there is pretty much no spare capacity at the moment,” he said. A potential worsening of the macro-economic environment represents a risk to the downside. If demand worsened further, it could add downward pressure on prices because it would come just as the United States adds more oil to the market in the second half of 2019.
Why Oil Prices Could Still Go Lower - Art Berman - Crude markets had a panic attack in August and September that sent prices soaring. Sanity is now returning. Prices have fallen but are likely to move even lower over the next few months. The panic attack was caused largely by Trump’s August 7 announcement that sanctions would be re-imposed on Iran. Anxiety about the effect on oil supply and prices was reasonable but the reaction was hysterical.From August 15 to October 1, Brent December futures spreads increased $3.01 (175 percent) from $1.72 to $4.73. Brent prices increased $15.53 (22 percent) from $70.76 to $86.29 (Figure 1). Figure 1. Brent Dec spreads collapsed from $4.73 to $1.52 since Oct 1 & are now less than when price rally began after announcement to re-impose Iran sanctions in mid-August. Front-month Brent down from $86.29 to $76.17 but still higher than $70.76 Aug 15 price. Source: Barchart and Labyrinth Consulting Services, Inc.Then spreads and prices collapsed. By October 24, spreads had fallen from $4.73 to $1.52, less than when the price rally began. Front-month Brent price decreased from $86.29 to $76.17. Prices and spreads recovered slightly on October 24 closing at $76.89 and $1.76, respectively. It seems unlikely that the correction is over. The timing depends on how long it takes for markets to fully recover from what Vitol’s Ian Taylor calls the supply fear factor. After 6 weeks of fear, markets must adjust to the reality that the “oil market is adequately supplied for now.” Clearly markets are concerned about more than just Iran. Falling or uncertain output from the problem children Venezuela, Libya and Nigeria, and take-away constraints from the Permian basin are critical. Iran, however, is different because it is a completely artificial supply crisis. It was a choice made by Donald Trump and his advisors. Markets are used to the uncertainty of its problem children but not to the apparent certainty of an executive decision. The reaction was consistent with the cause—certain and linear. It was also wrong.World liquids production has, in fact, increased 2.91 mmb/d so far in 2018. Much of that increase came from producers other than U.S. & OPEC (Figure 2).
WTI Pops Despite Sixth Weekly Crude Build In A Row - Demand concerns and contagion from equity carnage continue to weigh on WTI (overwhelming fears about supply disruptions in Iran and Venezuela) as it tested a $65 handle again today.API reported a bigger than expected 5.69mm crude build, the sixth weekly rise in inventories in a row, as Gasoline and Distillates drewdown.API
- Crude +5.69mm (+3.2mm exp)
- Cushing +1.44mm (+2.1mm exp)
- Gasoline -3.5mm
- Distillates -3.1mm
6 weeks of Crude builds in a row (and 6 weeks of Cushing builds and Distillate draws)... The original 14.4mm build associate with Cushing was a typo from the provider. WTI tested back into the $65 handle once again today, but some are suggesting that is weakness to buy...
Oil Prices Inch Higher Despite Crude Build - The American Petroleum Institute (API) reported yet another crude oil inventory build this week, this time of 5.69 million barrels for the week ending October 26. The build was the fourth in as many weeks as reported by the API. The report was largely in line with analyst expectations that this week would see another substantial build in crude oil inventories of 4.110 million barrels.The string of builds weighed heavily on prices, which were already depressed after IEA warned on Tuesday that the longer trend of higher oil prices would start to dent demand in key oil consuming markets such as India and Indonesia.According to API data, the six-week running tally of crude oil inventory gains equals 27 million barrels.The API reported a draw in gasoline inventories as well for week ending October 26 in the amount of 3.5 million barrels. Analysts had predicted a draw of 2.137 million barrels for the eek. Oil prices were down in afternoon trading prior to the release of the API data on inventories as traders feared additional inventory increases. At 1:58 pm EDT, WTI was trading down 0.88% (-$0.59) at $66.45—nearly flat week on week. The Brent crude benchmark was trading down 1.51% (-$1.17) at $76.20, also flat on the week.
Crude oil is doing something it hasn't done in years - Energy expert John Kilduff sees an unusual phenomenon affecting crude oil and beaten-down stocks.According to the Again Capital founding partner, oil and stocks have embarked on the closest trading relationship since early 2016 and during the financial crisis sell-off."This has been the highest correlation that I've seen in quite some time," he said Tuesday on CNBC's "Futures Now."His latest thoughts came with U.S. benchmark West Texas Intermediate crude on track for its worst month in more than two years. WTI closed at $66.40 a barrel on Tuesday, while Brent crude settled at $76.23."A lot of folks like to trade crude oil and other commodities to get away from the correlations you have in the stock market," said Kilduff, a CNBC contributor. "But over the past 20 days, you can see where stocks peak out in early October. Crude oil peaked out in early October."He suggests that fears of a global economic slowdown could be behind the rare move."It's a real risk off, and the same things that are bedeviling the equity market are bedeviling the crude market," he said.However, Kilduff isn't implying the trend spells more downside ahead. There's a bullish factor hanging over the oil market: Iran.On Sunday, sanctions against Iran exports are scheduled to go back into effect. And, it's unclear how they'll impact oil prices."We'll know in a relatively short amount of time whether the sanctions on Iran are really going to bite or not. I think they are to a degree," he said.
Oil prices rise for first time in three days, but trade war drags - Oil turned positive on Wednesday after government data showed U.S. fuel stockpiles dropped, offsetting a rise in the nation's crude inventories.U.S. sanctions on Iran set to go into full effect next week and a bounce in stock markets from recent losses also underpinned crude futures.Still, crude futures are more than $10 below four-year highs reached on Oct. 3 and on track for their worst monthly performance since July 2016.U.S. light crude was 17 cents higher at $66.435 a barrel by 11:28 a.m. ET (1528 GMT). It hit a two-month low of $65.33 a barrel on Tuesday.Benchmark Brent crude oil was still down 4 cents at $75.87, reversing some of its earlier losses.. The contract fell 1.8 percent on Tuesday, at one point touching its lowest since Aug. 24 at $75.09.U.S. commercial crude stockpiles rose by 3.2 million barrels, the U.S. Energy Information Administration reported, compared with expectations for an increase of 4.1 million barrels in a Reuters survey. The rise was driven by an increase at the Cushing, Oklahoma delivery hub, where inventories jumped by 1.9 million barrels, EIA said.Meanwhile, gasoline held in storage fell by 3.2 million barrels and distillate fuel inventories — including diesel and heating fuel — dropped by 4.1 million barrels.Global oil supply is rising with the top three producers, Russia, Saudi Arabia and the United States, pumping 33 million barrels per day (bpd) in September, Refinitiv data show, an increase of 10 million bpd since the start of the decade. Hedge funds are still overwhelmingly long oil and may have to liquidate positions if prices keep falling, accelerating a market sell-off, analysts say.
WTI Pops Back Above $66 On Big Product Drawdowns - Following API's bigger than expected crude build, WTI's 'odd' jump has been erased, trading back below $66 as DOE data prints. Crude inventories rose for the sixth week in a row (as did Cushing stocks) but WTI popped back above $66 on the heels of big drawdowns in Gasoline and Distillates.Bloomberg Intelligence Senior Energy Analyst Vince Piazza notes that "market sentiment seems to have come around to the view that U.S.-China trade tensions will weigh on global economic growth, suppressing demand for oil."Last week’s DOE report showed an increase in refinery utilization, which “could have been indicative of the end of turnaround season. If we have that occur again this week, it will probably confirm that,” says Thomas Finlon, director of Energy Analytics Group. DOE:
- Crude +3.22mm (+3.2mm exp)
- Cushing (+2.1mm exp)
- Gasoline -3.16mm (-2.25mm exp)
- Distillates -4.05mm - biggest draw since Oct 2017
6th weekly rise in Crude and Cushing stocks and 6th weekly decline in Distillate inventories... US Crude Production jumped notably on the week, back to record highs, rebounding after hurricane interruptions...
Oil prices fall on signs of rising global supply (Reuters) - Oil prices fell on Wednesday and posted the worst monthly performance since mid-2016 on evidence of rising global crude supply, but losses were limited by signs of strong U.S. demand for fuel. The Brent crude December futures contract, which expired Wednesday, fell 44 cents to settle at $75.47 a barrel. The more-active January contract LCOF9 fell 91 cents to settle at $75.04 a barrel. West Texas Intermediate (WTI) crude CLc1 futures fell 87 cents to settle at $65.31 a barrel. Both benchmarks were more than $10 a barrel below the four-year highs reached on Oct. 3. They both posted their worst monthly performance since July 2016, with Brent falling 8.8 percent for the month and WTI dropping 10.9 percent. Investor sentiment across risky asset classes, such as equities and energy, turned negative during the month as U.S.-China trade tensions sparked demand worries. Weighing on market sentiment on Wednesday were signs of rising global output. U.S. crude oil production surged by 416,000 barrels per day (bpd) to a record 11.346 million bpd in August, the U.S. Energy Information Administration said. The United States and other top producers Russia and Saudi Arabia pumped 33 million barrels per day in September, Refinitiv data showed, an increase of 10 million bpd since the start of the decade. Russian oil output has reached 11.41 million bpd in October, a level unseen since the collapse of the Soviet Union in 1991, an industry source told Reuters. The increases in production comes just ahead of new U.S. sanctions on Iran, set to come into force Nov. 4, that are expected to cut supply. “There’s this perception that there’s enough oil in the market right now to get through the Iranian sanctions,” said Phil Flynn, analyst at Price Futures Group in Chicago. Washington has made it clear to Tehran’s customers that it expects them to stop buying any Iranian crude oil from that date. However, on Wednesday U.S. national security adviser John Bolton said that while the United States wants to apply maximum pressure on Iran with sanctions on its crude exports, it does not want to harm countries that are friends and allies that depend on the oil. Imports of Iranian crude by major buyers in Asia hit a 32-month low in September as China, South Korea and Japan sharply cut their purchases ahead of the sanctions, government and ship-tracking data showed.
Crude Oil Extends Downward Trend -- Crude oil continued its downward momentum Wednesday that began at the beginning of this week. The December futures price for a barrel of West Texas Intermediate (WTI) crude oil fell by 87 cents Wednesday to settle at $65.31. The intraday range for the benchmark was a high of $67 even and a low of $65.01. For the Brent, the global benchmark declined 44 cents to settle at $75.47 a barrel. “The daily charts for December WTI and January Brent crude oil show the market holding above major support levels,” said Jerry Rafferty, president and CEO of Rockville Center, N.Y.-based Rafferty Commodities Group, Inc. Despite recent bearish price movements, Rafferty still sees a potential upside. “While the crude markets have declined further than we had expected, as long as December WTI holds above 6495 and January Brent holds above the 7515 to 7476 areas, we remain bullish,” said Rafferty. “We still believe that buying around these levels provides favorable risk/reward. A close below these levels would cause us to change our outlook.” November reformulated gasoline (RBOB) also declined during midweek trading, losing nearly four cents to settle at $1.77. The December Henry Hub natural gas futures price picked up seven cents to end the day at $3.26. Rafferty observed that gas prices have been in a holding pattern lately. “Since breaking out above the previous resistance at the 3100 area four weeks ago, December natural gas has met resistance at the 3350 to 3400 area,” Rafferty said. “The market is now trading within a sideways consolidation pattern defined by the 3100 area at the bottom and the 3350 to 3400 areas on the top.”
Iran's Worst Nightmare Is Coming True - In what must seem like a nightmare scenario for Iran, not only is another U.S. president leveling sanctions against its economy, and particularly that economy’s lifeblood, its oil sector, but the current U.S. president has admittedly made it his mission to drive Tehran to its knees over what he sees as non-compliance over the 2015 nuclear accord between western powers and Tehran. As recently as the start of this month, the oil markets narrative was that perhaps President Donald Trump had pushed a bit too hard by reimposing sanctions against Iran. Oil markets, for their part, were jittery while both global oil benchmark Brent and U.S. Benchmark West Texas Intermediate (WTI) futures hit four-year highs largely on supply concerns. Some predicted that $100 per barrel oil by the end of the year was imminent, while Tehran maintained a defiant tone, stating that neither Saudi Arabia nor OPEC would be able to pump enough oil to compensate for the loss of Iranian barrels, estimated between 500,000 bpd and 1 million bpd.Now, what a different just a few weeks can make. Oil prices are now trending downward, falling for a third consecutive week as global stock markets tumbled and oil markets focused on a weaker demand outlook for crude going forward. Brent crude fell 2.7 percent last week and is down 10.5 percent from its October 3 high of $86.74. WTI ended the week down some 2.2 percent and has now dropped around 12 percent from its recent high of on October 3. Moreover, in a sign of things to come, hedge-fund and money managers are trimming their bets that crude oil prices will rise.Oil market headwinds, perhaps even storm clouds are brewing over a slowdown in economic growth due to trade war tensions between Washington and Beijing, and a stronger dollar weighing on emerging market economies, with those countries seeing an exodus of currency for higher yielding, safer havens like the US Dollar and Japanese Yen. A stronger dollar also increases the price for oil import dependent countries, with India, the Philippines, Indonesia and others particularly vulnerable. “We’ve seen oil prices sell off here throughout the correction we’ve had in the broad market. The concern in the sell-off is clearly global growth, and that’s immediately reflected in oil prices.” How all of this plays out remains to be seen, but with a general downturn in economic growth and a slowdown in oil growth demand going forward, the loss of Iranian barrels now looks easily manageable - a scenario sure to cause consternation for Tehran.
Oil prices fall as economic outlook deteriorates: Kemp - (Reuters) - Global economic momentum is decelerating, according to a broad range of financial and real-economy indicators, which is weighing on worldwide equity markets and oil prices. The depth and duration of the slowdown is impossible to gauge at this point, whether it turns out to be simply a mild and short-lived “soft patch”, a longer but still positive “growth recession” with output falling relative to trend, or an “outright recession” with activity falling in absolute terms. Recent declines in equity markets and softness in freight indicators may turn out to be a false alarm or a pause within an extended cycle rather than mark a cyclical turning point. Most commentary about the economic cycle is still influenced by the last deep and wrenching recession which accompanied the global financial crisis in 2008/09. But severe recessions have not been common since the end of the Second World War and most downturns have proved milder, which therefore seems a more likely prediction for the next cyclical slowdown. In the United States, post-1945 recessions have tended to be short, lasting less than a year in most instances, and in some cases have seen business activity level off rather than decline (https://tmsnrt.rs/2CQDDYT ). If the economy is nearing a cyclical peak, however, the next stage in the cyclical sequence is likely to involve some combination of:
- Fiscal expansion
- Financial easing
- Lower trade tensions
- Lower oil prices
Further tax cuts or an increase in government spending, possibly on highways and other infrastructure, would be one way to ameliorate the slowdown and get the economy growing again. The U.S. federal government is already on course to run an annual budget deficit of more than $1 trillion by the end of the decade but the prospect of even higher deficits is unlikely to forestall demands for fiscal stimulus. If the expansion slows or tips into recession, the Federal Reserve will also come under pressure to cancel planned interest rate increases and rescind some of the rises that have already happened.
Oil Set for Biggest Monthly Slide Since 2016-- Oil’s set for its biggest monthly drop since 2016 as the specter of a slowdown in the global economy haunts the market while U.S. inventories grow and producers relay mixed signals. Futures in New York are poised for an 8.8 percent drop in October, following two months of gains. A global equity rout and an escalating U.S.-China trade war are weighing on the outlook for growth and energy demand, dragging down prices that only weeks earlier surged to a four-year high. Concerns of a supply squeeze due to impending American sanctions on Iran eased after some other OPEC nations pledged to pump more. Still, while Saudi Arabia’s Energy Minister said the Organization and Petroleum Exporting Countries is in a “produce as much as you can mode,” an OPEC committee said it could cut supplies next year, spurring uncertainty in the market. In the U.S., inventories are forecast to climb for a sixth consecutive week. After breaching $76 a barrel earlier this month for the first time since 2014, New York’s West Texas Intermediate has lost over 10 percent. “In the oil market, concerns continue to exist over the ongoing U.S.-China trade spat as well as the risk aversion sentiment that’s caused by a plunge in global shares,” Kim Kwangrae, a commodities analyst at Samsung Futures Inc., said by phone. “Prices couldn’t remain above $75 a barrel this month on rising U.S. inventories and strong indication from Saudi Arabia to ramp up production.” WTI for December delivery traded at $66.78 a barrel on the New York Mercantile Exchange, up 60 cents, at 8:43 a.m. in London. The contract had declined more than 2 percent in the past two sessions. Total volume traded was about 12 percent below the 100-day average. Brent for December settlement, which expires Wednesday, added 81 cents to $76.72 a barrel on the London-based ICE Futures Europe exchange. Prices are on course for a 7.3 percent drop this month, the biggest monthly loss since July 2016. The global benchmark crude traded at a $9.91 premium to WTI.
Oil Extends Losses Near $65 -- Oil extended losses near $65 a barrel after the worst month in more than two years on lingering concern over a supply glut and a stronger dollar. Futures in New York fell as much as 0.9 percent, after falling 1.3 percent on Wednesday. U.S. crude inventories rose for a sixth straight week, according to government data. Russia is said to raise oil and condensate production to a record high in October just as the U.S. signaled some countries may continue importing Iranian crude after sanctions take effect. A rally in the greenback this week has also diminished the appeal of commodities priced in dollars. Oil slumped about 11 percent last month, the most since July 2016, as a global equity rout and trade tensions between the U.S. and China stoked concerns over economic growth and energy demand. Still, Organization of Petroleum Exporting Countries and its allies including Russia are sending mixed signals on whether they will ramp up output to fill any shortfalls as the return of U.S. sanctions next week are set to squeeze the Persian Gulf state’s exports. “While the gain in U.S. crude inventories was in line with the market expectation, it’s still a sixth consecutive week of increase on the back of rising American production,” Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp., said by phone from Tokyo. “Even if it’s temporary, concerns over a supply glut are weighing on prices as Saudi Arabia, Russia and the U.S. all increase production.” West Texas Intermediate for December delivery fell as much as 58 cents to $64.73 a barrel on the New York Mercantile Exchange, and was at $65.03 at 3:47 p.m. in Tokyo. The contract declined 3.4 percent in the past three sessions. Total volume traded was about 0.8 percent below the 100-day average. Brent for January settlement slipped 33 cents to $74.71 a barrel on the London-based ICE Futures Europe exchange. The December contract fell 44 cents to $75.47 before expiring on Wednesday. The global benchmark crude traded at a $9.52 premium to WTI for the same month. The U.S. sanctions enter into full force Nov. 5, with the aim of limiting Iranian supply. Several countries “may not be able to go all the way to zero” right away on purchases of Iranian oil, said White House National Security Adviser John Bolton. The U.S. wants to put maximum pressure on Iran, but doesn’t “want to hurt friends and allies,” he said.
Oil Prices Plunge As Storm Clouds Gather Over Global Economy - Oil declined more than 3% on Thursday, and extended those losses Friday, with ICE West Texas Intermediate (WTI) Light Sweet Crude Oil Futures probing lows not seen since April, due to weakening global demand at a time when the output from the Organization of the Petroleum Exporting Countries (OPEC), Russia, and the U.S. is rising. Record crude production from the U.S. and Russia, along with a surge from OPEC, has once more created oversupplied conditions. Russian, U.S. & Saudi crude oil production (data via Reuters Eikon Graphics) Oil prices started declining in early October on fears that global economic momentum was waning as the U.S-China trade war escalates, and a slowdown in emerging market economic data (primarily in Asia) was becoming more evident. WTI has plunged 17% since its 76-handle probe in early October. Analysts told Reuters they anticipate more selling in coming sessions, noting that oil did not bounce on Thursday on weakness in the dollar, nor did it positively correlate with the rebound in equity markets. Besides global growth momentum waning, another reason for downward pressure in oil could be that Washington just granted several waivers on sanctions on Tehran, allowing countries like South Korea, Japan, and India to continue to import Iranian crude (in other words, more supply). John Kemp, Reuters Senior Market Analyst of Commodities and Energy, believes oil prices are falling as a broad range of financial and real-economy indicators show the global economy is slowing."The depth and duration of the slowdown is impossible to gauge at this point, whether it turns out to be simply a mild and short-lived “soft patch”, a longer but still positive “growth recession” with output falling relative to trend, or an “outright recession” with activity falling in absolute terms.Recent declines in equity markets and softness in freight indicators may turn out to be a false alarm or a pause within an extended cycle rather than mark a cyclical turning point.Most commentary about the economic cycle is still influenced by the last deep and wrenching recession which accompanied the global financial crisis in 2008/09. But severe recessions have not been common since the end of the Second World War and most downturns have proved milder, which therefore seems a more likely prediction for the next cyclical slowdown. Kemp provides historical charts on the business cycle:
Oil under pressure from rising output, but Iran sanctions loom - Oil prices dipped on Friday after a week of heavy falls as markets braced for the imposition next week of U.S. sanctions on Iran, which Washington hopes will halt exports of Iranian oil. Brent crude oil was down 22 cents a barrel at $72.67 by 9:44 a.m. ET (1344 GMT). The contract has fallen 6 percent this week and 16 percent since the beginning of October, when it reached its highest since 2014. U.S. light crude was 31 cents lower at $63.38, down 17.5 percent since hitting four-year highs a month ago.Investors are concerned about the prospects for oil supply when new U.S. sanctions are implemented against Iran on Monday.Washington has said it aims eventually to stop all Iranian oil exports but has granted several countries waivers on sanctions, allowing them to continue imports for a while.The U.S. government has agreed to let eight countries, including South Korea and Japan, as well as India, keep buying Iranian oil after it reimposes the sanctions, Bloomberg reported on Friday, citing a U.S. official."Oil prices look to remain under pressure, as fears of global oversupply have returned with a vengeance," said Ashley Kelty, oil and gas research analyst at Cantor Fitzgerald Europe.A list of all countries getting U.S. waivers allowing them to import Iranian oil is expected to be released officially on Monday, industry sources say.Despite these efforts, waivers are likely to be only temporary. Goldman Sachs said it expected Iran's crude oil exports to fall to 1.15 million barrels per day by the end of the year, down from around 2.5 million bpd in mid-2018.
Soaring U.S. Oil Production Forces Prices Down - Oil prices continued to slide on Friday afternoon, despite a small decline in the U.S./Canadian rig count. Iran sanctions are just days away but the market has come around to the idea that Iranian oil exports won’t be going to zero, despite months of promises from the Trump administration. New reports suggest waivers are in the offing. “Oil prices look to remain under pressure, as fears of global oversupply have returned with a vengeance,” Ashley Kelty, oil and gas research analyst at Cantor Fitzgerald Europe, told Reuters. The U.S. has granted exemptions to eight importers of Iranian oil just days before sanctions on Iran take effect. The countries will be allowed to continue to import oil without fear of retribution from the U.S. as long as they continue to make reductions in those purchases, according to Bloomberg. Four of the countries include Iran’s top buyers – China, India, South Korea and Japan. The other four were not identified in the Bloomberg report, but the decision is expected to be announced on Monday.. The EIA said the U.S. produced more than 11.3 mb/d in August, a massive jump of over 400,000 bpd from a month earlier. The new record high also made the U.S. the largest oil producer in the world. Record output, combined with higher production from OPEC, has dealt sharp losses to crude oil prices amid mounting fears of oversupply. President Trump spoke with Xi Jingping by phone on Thursday, and Trump tweeted that the discussion went well. His economic adviser Larry Kudlow said that there was a “thaw” in relations. The two leaders are expected to meet later this month at the G20 summit in Argentina, and the conversation by phone this week raises the odds of a breakthrough on trade. U.S. diplomats have reportedly stepped in to try to resolve disputes in the Middle East to increase oil flows. According to the Wall Street Journal, the U.S. is trying to broker a deal between Saudi Arabia and Kuwait over the Neutral Zone oil fields, which have 500,000 bpd of capacity but have been offline for years. The U.S. is also trying to help Iraq export more oil through Kurdistan, which would add another 300,000 bpd or so to global supplies. Washington is trying to ease these burdens at a time when it is seeking to shut in Iranian production.
Oil Set for Worst Week Since February - Oil’s set for the biggest weekly loss since February as fears over a supply disruption eased as the U.S. was said to agree on giving waivers to eight nations to continue importing Iranian crude after it reimposes sanctions on the OPEC producer. Futures in New York are on course for a 6 percent weekly decline. While America’s goal remains to choke off revenue to Iran’s economy, exemptions are being granted to countries including Japan, India and South Korea so as not to drive up oil prices, said a senior administration official. Crude earlier pared a weekly drop on signs of a possible trade agreement between the U.S. and China. Oil is approaching a bear market with prices falling more than 16 percent from a four-year high in October as a rout in global equity markets and U.S.-China trade tensions stoked concerns over economic growth. Investors are keeping an eye on the level of global supplies as the Organization of Petroleum Exporting Countries have boosted output to the highest level in October to replace potential shortfalls from Iran at a time when U.S. inventories and production are also growing. “In theory, we could have been in a bullish market because of sanctions against Iran. But rising production from Saudi Arabia and others, coupled with a global equity rout and concerns over economic outlook, is weighing on prices,” Jun Inoue, a senior economist at Mizuho Research Institute Ltd., said by phone from Tokyo. “As South Korea and India reportedly agreed with the U.S. on waivers, the Iran factor is weakening.” West Texas Intermediate for December delivery lost 25 cents to $63.44 a barrel on the New York Mercantile Exchange at 7:51 a.m. in London. The contract fell $1.62 to $63.69 on Thursday. Total volume traded was 30 percent above the 100-day average. Brent for January settlement fell 18 cents, or 0.3 percent, to $72.71 a barrel on the London-based ICE Futures Europe exchange. The contract is down 6.4 percent this week for a fourth consecutive week. The global benchmark crude traded at $9.14 premium to WTI for the same month.
Oil market passes cyclical peak: John Kemp (Reuters) - The recovery in oil prices since the downturn of 2014/15 looks a lot like the upward adjustments that followed the slumps of 2008/09 and 1997/98, which could provide clues about what happens next.The oil market is strongly cyclical, and although no two cycles are the same, they often show similar characteristics (“Cyclical behaviour of oil prices”, Reuters, June 4, 2018).Spot prices and calendar spreads exhibit cyclical movements that correlate closely with the market, alternating between periods of under- and over-supply (https://tmsnrt.rs/2CXAFBR).Brent’s six-month calendar spread seems to have reached a major cyclical peak in April 2018, up from a post-slump trough in January 2015, before trending downwards.Spot prices may have reached a similar peak in early October 2018. Although it is too early to be certain, most hedge funds and other money managers have liquidated a large share of their bullish positions in recent weeks.In the recent recovery, Brent calendar spreads rose for 39 months from trough to the first major peak, which is roughly comparable with recoveries in 1998-2000 (21 months) and 2009-2011 (33 months).Spot prices have risen for 33 months from trough to their peak in October, which is also broadly comparable with recoveries in 1998-2000 (22 months) and 2008-2011 (28 months). Oil prices, spreads and the reactions of producers and consumers suggest the market has passed the first major cyclical peak after the slump of 2014/15.
OPEC oil output rises to highest since 2016 despite Iran: Reuters survey (Reuters) - OPEC has boosted oil production in October to the highest since 2016, a Reuters survey found, as higher output led by the United Arab Emirates and Libya more than offset a cut in Iranian shipments due to U.S. sanctions. The 15-member Organization of the Petroleum Exporting Countries has pumped 33.31 million barrels per day this month, the survey on Wednesday found, up 390,000 bpd from September and the highest by OPEC as a group since December 2016. OPEC agreed in June to pump more oil after pressure from U.S. President Donald Trump to curb rising prices and make up for an expected shortfall in Iranian exports. Oil LCOc1 hit a four-year high of $86.74 a barrel on Oct. 3 but has since eased to $76 as concerns over tight supplies faded. “Oil producers appear to be successfully offsetting the supply outages from Iran and Venezuela,” said Carsten Fritsch, analyst at Commerzbank in Frankfurt. The June pact involved OPEC, Russia and other non-members returning to 100 percent compliance with output cuts that began in January 2017, after months of underproduction in Venezuela, Angola and elsewhere had pushed adherence above 160 percent. In October, the 12 OPEC members bound by the supply-limiting agreement lowered compliance to 107 percent as production rose, from a revised 122 percent in September, the survey found. This is the closest OPEC has moved to 100 percent compliance since the June agreement. UAE, LIBYA The biggest increase has come this month from the UAE. Output in October rose by 200,000 bpd to 3.25 million bpd, the survey found, and could in theory rise further as the UAE says its oil-production capacity will reach 3.5 million bpd by the year-end. The second-largest came from Libya where production averaged 1.22 million bpd, the survey found, a rise of 170,000 bpd. Libyan output remains volatile due to unrest, raising questions about the stability of current OPEC production. Saudi Arabia, after opening the taps in June and then scaling back its plans to pump more, supplied 10.65 million bpd in October, more than in June and close to a record high, the survey found. The kingdom, OPEC’s top producer, has indicated it is concerned about potential oversupply, raising the prospect that its next production adjustment could be to rein in output. OPEC’s second-largest producer, Iraq, also raised output in October.
Khashoggi BOMBSHELL: Britain ‘KNEW of kidnap plot and BEGGED Saudi Arabia to abort plans’ Intercepts by GCHQ of internal communications by the kingdom’s General Intelligence Directorate revealed orders by a “member of the royal circle” to abduct the troublesome journalist and take him back to Saudi Arabia. The orders, intelligence sources say, did not emanate directly from de facto ruler Crown Prince Mohammad bin Salman, and it is not known if he was aware of them. Though they commanded that Khashoggi should be abducted and taken back to Riyadh, they “left the door open” for other actions should the journalist prove to be troublesome, sources said. Last week Saudi Arabia’s Attorney General confirmed that the murder had been premeditated - in contrast to initial official explanations that Khashoggi had been killed after a fight broke out. “The suspects in the incident had committed their act with a premeditated intention,” he said. “The Public Prosecution continues its investigations with the accused in the light of what it has received and the results of its investigations to reach facts and complete the course of justice.” Those suspects are within a 15-strong hit squad sent to Turkey, and include serving members of GID. Speaking last night the intelligence source told the Sunday Express: “We were initially made aware that something was going in the first week of September, around three weeks before Mr Khashoggi walked into the consulate on October 2, though it took more time for other details to emerge. “These details included primary orders to capture Mr Khashoggi and bring him back to Saudi Arabia for questioning. However, the door seemed to be left open for alternative remedies to what was seen as a big problem.
Saudi Arabia won't extradite suspects in Khashoggi killing to Turkey - The suspects in the killing of Saudi journalist Jamal Khashoggi will be prosecuted in Saudi Arabia, the Saudi foreign minister said Saturday. His comments come after Turkey said it wanted to extradite 18 Saudi nationals that authorities say were involved in the murder. However, according to the BBC, speaking at a security conference in Bahrain, Adel al-Jubeir said: “On the issue of extradition, the individuals are Saudi nationals. They’re detained in Saudi Arabia, and the investigation is in Saudi Arabia, and they will be prosecuted in Saudi Arabia.” Speaking at the same conference on a different panel, U.S. Defense Secretary Jim Mattis said the killing of Khashoggi undermined Middle Eastern stability and that Washington would take additional measures against those responsible, Reuters reported. Saudi Arabia initially denied all knowledge of the journalist’s fate, but the Saudi public prosecutor now describes it as a premeditated murder. However, Riyadh denies the ruling royal family was involved and blames “rogue agents.” Al-Jubeir, along with Bahrain’s Foreign Minister Shiekh Khalid bin Ahmed Al Khalifa, told the conference that the Gulf states are playing a critical role in ensuring stability in the region against Iran, Reuters also reported. “We are now dealing with two visions in the Middle East. One is a (Saudi) vision of light … One is a (Iranian) vision of darkness which seeks to spread sectarianism throughout the region,” al-Jubeir said.
Canada upholds $15 billion Saudi arms deal after Khashoggi murder - In the nearly four weeks since the Saudi regime had journalist Jamal Khashoggi murdered, Canada’s Liberal government has gone out of its way to avoid criticizing Riyadh, while insisting Canada must fulfill a $15 billion arms deal with the kingdom—a linchpin of US imperialism’s domination of the oil-rich Middle East. Turkish President Recep Tayyip Erdogan has avoided publicly accusing Crown Prince Mohammed Bin Salman, the kingdom’s effective ruler, of ordering Khashoggi’s murder. But Turkish authorities have systematically leaked information contradicting Riyadh’s claims, including video of the arrival in Turkey of a 15-man Saudi assassination squad. Everything points to the Saudi journalist having been tortured and beheaded inside the consulate, then his dismembered body being smuggled out of the premises. With public outrage over Khashoggi’s gruesome murder mounting, Prime Minster Justin Trudeau and his Liberal government have spent the past two weeks twisting and turning in the face of mounting criticism from sections of the media and opposition over its insistence that Canada must fulfill its $15 billion contract to supply Riyadh with 740 LAVs (Light Armored Vehicles), manufactured at a General Dynamics plant in London, Ontario. For the first week, Trudeau and Foreign Minister Chrystia Freeland claimed, as they have in the past, that Canada’s international reputation would be damaged if it failed to “honour” the contract, while emphasizing that it was the Harper Conservative government that entered into the deal—Canada’s largest ever arms contract—with Riyadh in 2014. However, Prime Minister Justin Trudeau has now come forward with a second argument. Cancelling the contract, he insists, would result in massive financial penalties. Initially, Trudeau spoke of a billion dollars, but by Thursday he was claiming Canadian taxpayers would be on the hook for “billions of dollars.” According to Trudeau, the deal is subject to stringent confidentiality clauses such that the government cannot make the financial penalties section, or any other part of it, public. In other words, the government must be taken at its word.
Trudeau won’t stop $12bn of arms sales to Saudi after Khashoggi’s death because money always wins over murder - Almost 5,000 miles from the city in which his corpse was secretly buried – in one piece or in bits – by his Saudi killers, Jamal Khashoggi’s murder now rattles the scruples and the purse-strings of yet another country. For Canada, land of the free and liberal conscience – especially under Justin Trudeau – is suddenly confronted by the fruits of the bright young prime minister’s Conservative predecessors and a simple question of conscience for cash: should Trudeau tear up a 2014 military deal with Saudi Arabia worth $12bn? When Ottawa decided to sell its spanking new light armoured vehicles (LAVs) to the Saudi kingdom, the Saudis already had a well-earned reputation for chopping off heads and supporting raving and well-armed Islamists. But Mohammed bin Salman had not yet ascended the crown princedom of this pious state. The Saudis had not yet invaded Yemen, chopped off the heads of its Shia leaders, imprisoned its own princes, kidnapped the Lebanese prime minister and dismembered Khashoggi.So the Conservative Canadian government of Stephen Harper had no scruples about flogging off its LAVs – as these little armoured monsters are called – to Riyadh, specifically for the “transport and protection” of government officials.Now you can hardly accuse Trudeau of being a supporter of the Saudi regime. Back in August, Mohammed bin Salman’s lads ordered the expulsion of the Canadian ambassador to Riyadh and closed down trade agreements with Canada after Trudeau’s foreign minister had complained about the arrest of women’s rights campaigners in the kingdom. The Canadians had made “false statements”, claimed the Saudis – whose own reputation for false statements would soon achieve proportions worthy of a Hollywood horror epic. Trudeau was in the Saudi doghouse as well as Washington’s because, only two months earlier,Trump had called him “dishonest and weak”.
Turkey Says Saudis Strangled Khashoggi Immediately On Entering Consulate, Dismembered Body - Hours after the Washington Post published an anonymously sourced story claiming that Saudi Arabia is still refusing to cooperate with Turkish investigators looking into the murder of insider-turned-dissident Jamal Khashoggi, Istanbul's head prosecutor has delivered a statement revealing more incriminating details about the circumstances surrounding the journalist's murder at the hands of a 15-man "hit squad" inside the Kingdom's Istanbul consulate. In a revelation that supports the theory, advanced by a steady stream of leaks to Western and Turkish media from the prosecutor's office, that Khashoggi's murder was a premeditated act ordered by senior intelligence officials and possibly Crown Prince Mohammad bin Salman himself, Istanbul's head prosecutor said Wednesday that Khashoggi was strangled to death as soon as he entered the consulate in a murder that was likely pre-planned. His body was then "cut into pieces" and presumably smuggled it out of the consulate.From the statement: Turkey asked for the extradition of the suspects arrested in Saudi Arabia and the whereabouts of Khashoggi's body. No response from the Saudi side. Finally, adds that the talks with the top Saudi prosecutor were not productive. pic.twitter.com/DUyDvtJPK9 Notably, the statement from the Turkish prosecutor comes shortly after his Saudi counterpart, Saud al-Mojeb, left the country after a meeting between the two. The Saudis have largely stonewalled the inquiry into Khashoggi's disappearance and killing. After denying any involvement, the kingdom admitted earlier this month that Khashoggi was, in fact, murdered inside the embassy, something the kingdom has officially said was the result of a "botched interrogation," the Saudis pledged "full cooperation" with their Turkish counterparts. But that promise was apparently less-than-sincere. The Saudis have rebuffed demands expressed by prosecutors and President Erdogan himself that the kingdom disclose where Khashoggi's body was buried, or the name of the "local cooperator" whom the Saudis claim the killers worked with to dispose of Khashoggi's remains. Turkey has also requested the extradition of the 18 Saudi nationals who were arrested by the kingdom in connection with the murder. But while the international pressure has inspired Germany to suspend arms exports to Saudi Arabia, and US lawmakers have continued to push for some kind of punitive action despite President Trump's obvious reluctance, the fallout from the scandal has been relatively muted. And as the international outrage subsides, many epect MbS will ultimately use this as one more excuse to consolidate power in Riyadh. Though the Turks still have an ace up their sleeve: The rumored audio recording of Khashoggi's murder which has been widely cited in the press, but never released to the public. And while the Turks reportedly played it for CIA Director Gina Haspel, their plans for the record remain unclear.
Did The Saudi Hit Squad Dissolve Jamal Khashoggi's Body In Acid- - Friday will mark one month since Jamal Khashoggi waltzed into the Saudi consulate in Istanbul, planning to pick up paperwork that would allow him to legally marry his Turkish girlfriend, and was never heard from or seen again. And despite repeated demands from Turkish authorities that the Saudi government reveal the location of Khashoggi's remains, or at least identify the "local collaborator" who is said to have disposed of the body, the kingdom has repeatedly refused. The Saudi prosecutor's inexplicable refusal to help with the recovery of Khashoggi's remains has apparently led the Turks to conclude that one of the particularly gruesome rumors about the circumstances of Khashoggi's demise just might have been true. That is, after he was strangled and dismembered inside the consulate, Khashoggi's remains were dissolved in a vat of acid, then dumped either in a well on the property of the consul general, or somewhere on the consulate grounds, according to Washington Post. Initially, Turkish investigators focused their search for Khashoggi’s body on two wooded areas outside of Istanbul, partly inspired by surveillance footage that Turkish authorities said showed Saudi diplomatic vehicles apparently scouting Belgrad Forest the night before the journalist was killed. Last week, investigators suspended the search, focusing instead on the consulate’s grounds and the consul general’s residence. The search focused in particular on a well on consular property, where The Turks believe the assailants may have disposed of Khashoggi’s dissolved remains. According to WaPo, biological evidence uncovered during the search of the consul's residence suggests that Khashoggi's remains were disposed of near where he was dismembered. A senior Turkish official said in an interview that Turkish authorities are pursuing a theory that Khashoggi’s dismembered body was destroyed in acid on the grounds of the Saudi Consulate or at the nearby residence of the Saudi consul general. Biological evidence discovered in the consulate garden supports the theory that Khashoggi’s body was disposed of close to where he was killed and dismembered, the official said. "Khashoggi’s body was not in need of burying," said the official, who spoke on the condition of anonymity to discuss a sensitive investigation.
MbS: The New Saddam of Arabia? - As Mohammad bin Salman (MbS) has terrorized his opponents at home and abroad, fear has spread within the Saudi kingdom. Has he become the new Saddam of Arabia? As Iraq’s Saddam Hussein did in the 1980s, MbS is cementing his power domestically and regionally through fear and economic largesse under the guise of fighting Iran, Islamic radicalism, and terrorism.Much like the tyrant of Baghdad did in Iraq, MbS has crushed his domestic and regional opponents. Both of them have enlisted the support of foreign powers, especially the United States and Britain, to buttress their hold on power in their territories and expand their reach internationally. They both spoke the language of “reform,” which appeals to Western audiences, and both demonized Iran as a promoter of regional instability and a source of evil internationally.They both used chemical weapons against their opponents—Saddam against his Kurdish citizens and against Iran during the Iran-Iraq war; MbS against civilians in Yemen. Saddam threatened and later invaded his neighbor Kuwait. MbS has waged a vicious campaign against his neighbor and fellow Gulf Cooperation Council member Qatar and threatened to invade it.Saddam and MbS also cynically donned the mantle of Sunni Islam in their hypocritical claims against the so-called Shia Crescent and its main proponent Iran. Saddam’s “Republic of Fear” seems to be slowly morphing into a “Kingdom of Fear” under MbS.In his “city-busting” campaign during the Iran-Iraq war, Saddam committed horrible atrocities against civilians in Iranian cities in the 1980s. Thirty years later, MbS is committing equally horrible crimes against innocent civilians in Yemen. The famine and starvation that MbS’s war has wrought on Yemeni children is arguably more calamitous than what Saddam did in Iran. Sadly, both Saddam and MbS have relied on American military, intelligence, and political support in the execution of their bloody wars.Saddam killed thousands of people and arrested and executed hundreds of his opponents, including journalists, academics, and peaceful dissidents. MbS has used the same playbook. The “premeditated murder” of Jamal Khashoggi—a Saudi citizen, a U.S. permanent resident, and a Washington Post journalist—starkly illustrates MbS’s campaign against his critics.
Recep Tayyip Erdogan: Saudi Arabia still has many questions to answer about Jamal Khashoggi’s killing - Recep Tayyip Erdogan is the president of Turkey. The story is all too familiar: Jamal Khashoggi, a Saudi journalist and a family man, entered Saudi Arabia’s Consulate in Istanbul on Oct. 2 for marriage formalities. No one – not even his fiancee, who was waiting outside the compound — has ever seen him again.Over the course of the past month, Turkey has moved heaven and earth to shed light on all aspects of this case. As a result of our efforts, the world has learned that Khashoggi was killed in cold blood by a death squad, and it has been established that his murder was premeditated.Yet there are other, no less significant questions whose answers will contribute to our understanding of this deplorable act. Where is Khashoggi’s body? Who is the “local collaborator” to whom Saudi officials claimed to have handed over Khashoggi’s remains? Who gave the order to kill this kind soul? Unfortunately, the Saudi authorities have refused to answer those questions.We know the perpetrators are among the 18 suspects detained in Saudi Arabia. We also know those individuals came to carry out their orders: Kill Khashoggi and leave. Finally, we know the order to kill Khashoggi came from the highest levels of the Saudi government. Some seem to hope this “problem” will go away in time. But we will keep asking those questions, which are crucial to the criminal investigation in Turkey, but also to Khashoggi’s family and loved ones. A month after his killing, we still do not know where his body is. At the very least, he deserves a proper burial in line with Islamic customs. We owe it to his family and friends, including his former colleagues at The Post, to give them an opportunity to say their goodbyes and pay their respects to this honorable man. To ensure that the world will keep asking the same questions, we have shared the evidence with our friends and allies, including the United States.
In WaPo Op-Ed, Erdogan Says "We Know The Order To Kill Khashoggi Came From Highest Level Of Saudi Government" - With the Jamal Khashoggi grotesque murder by some 18 Saudi agents fading from the public's attention, Turkish President Recep Tayyip Erdogan took the opportunity to remind the world that he now has the upper hand in the Middle Eastern balance of power, and said that the order to kill the U.S.-based journalist and Saudi dissident came from the "highest levels" of the Saudi government. "We know that the perpetrators are among the 18 suspects detained in Saudi Arabia,” Erdogan wrote in a Washington Post op-ed published Friday afternoon. "We also know that those individuals came to carry out their orders: Kill Khashoggi and leave. Finally, we know that the order to kill Khashoggi came from the highest levels of the Saudi government." Some seem to hope this “problem” will go away in time. But we will keep asking those questions, which are crucial to the criminal investigation in Turkey, but also to Khashoggi’s family and loved ones. A month after his killing, we still do not know where his body is. At the very least, he deserves a proper burial in line with Islamic customs. We owe it to his family and friends, including his former colleagues at The Post, to give them an opportunity to say their goodbyes and pay their respects to this honorable man. To ensure that the world will keep asking the same questions, we have shared the evidence with our friends and allies, including the United States. "As responsible members of the international community, we must reveal the identities of the puppetmasters behind Khashoggi’s killing and discover those in whom Saudi officials — still trying to cover up the murder — have placed their trust," he concluded.
Saudi-Led Coalition Sends Over 10,000 Troops to Yemen’s Hodeidah — The Saudi-led military coalition in Yemen has sent more than 10,000 troops towards a strategic rebel-held port city ahead of a new assault, Yemeni government officials said on Tuesday.The pro-government coalition deployed the reinforcements to the Red Sea coast ahead of a new offensive on Hodeidah that will be launched “within days”, a military official told the AFP news agency.He said they would also “secure areas liberated” from the Houthi rebels, and that forces from Sudan, part of the coalition, had moved in to “secure” areas around the city.Houthi rebels have for the past 10 days been stationing fighters on rooftops of buildings in Hodeidah city, government military officials told AFP.The adjacent port is the entry point for three-quarters of imports to the impoverished country, which is teetering on the edge of famine.Saudi Arabia and its allies intervened in Yemen in 2015 to support President Abd Rabbuh Mansour Hadi’s government after the Houthis ousted it and took swathes of territory including the capital Sanaa. The coalition has used air power to push the rebels back from much of Yemen, but the Houthis have held onto Hodeidah and Sanaa.
True Yemen Death Toll Five Times Higher Than Previous Estimate, Researchers Say - At least 56,000 people have been killed in armed violence in Yemen since January 2016, according to data collected by an independent research group, a tally that is more than five times higher than previously reported. The new figure encompasses the deaths of both combatants and civilians in Yemen between January 2016 and 20 October 2018, explained Andrea Carboni, a research analyst at the Armed Conflict Location & Event Data Project (ACLED). It does not take into account the Yemenis who have died as a result of the humanitarian crisis engulfing the country and its related problems, such as diseases and malnutrition. “The fatality numbers refer to the number of people that were killed as a direct consequence of armed violence,” Carboni told Middle East Eye on Monday. That violence includes air strikes and artillery fire from Saudi-led coalition forces currently fighting in Yemen, as well as armed clashes between various factions fighting inside the country, such as the Houthis. Middle East Eye could not independently verify the 56,000 number.The Saudi-led coalition has been accused of committing war crimes in Yemen, such as the deliberate bombing of hospitals, buses and other civilian infrastructure. The Houthis have also been accused of taking hostages and arbitarily detaining and torturing opponents – all potential war crimes.However, as Yemen has become increasingly closed off to outside observers and journalists amid the devastating conflict, reliable information on the number of deaths has been hard to come by. The number was also an underestimate when it was released, Carboni said, since it was based on deaths that were reported at medical facilities in the country. “Most of the people, the casualties, do not get to medical centres. That number was actually missing a lot of the violence and the casualties that are related to it,” he said. Based on an estimate of around 2,000 fatalities every month in Yemen, total deaths between the start of the conflict in 2015 to the end of this year is expected to sit between 70,000 and 80,000, Carboni said.“These are estimates based on the methodology we’ve applied elsewhere. They are likely also to be an underestimate themselves,” he said. He added that three-quarters of all civilian deaths in Yemen are attributable to the Saudi-led coalition.
Saudis Pound Yemen After US Officials Demand ‘Immediate Ceasefire’ — Earlier this week, Defense Secretary James Mattis called for an immediate ceasefire in Yemen. In the course of this, he demanded an end to fighting, and an immediate halt to all airstrikes against populated areas.Friday in Yemen was much like any other, with Saudi warplanes pounding areas in and around the northern cities of Hodeidah and Sanaa. Heavy airstrikes were reported particularly around Sanaa Airport, which is definitely a civilian-populated area.Sanaa was mostly hit with airstrikes, while locals reported heavy clashes around Hodeidah, a vital port city that Saudi forces have been massing around all week. In no case is there any indication that a ceasefire is starting. Saudi and UAE officials have yet to comment on the US call for a ceasefire and peace talks at all. The only response at all from their camp was from Yemeni officials backed by the Saudis, who embraced the idea of peace talks, but similarly showed no signs of stopping fighting in the meantime.
Leaked U.N. Memo Reveals Saudis Demanded Western Propaganda For $1bn Pledged To Aid Agency -- We wonder if the Saudis had never been caught in Jamal Khashoggi's gruesome murder, would such essential stories and leaks now happening such as the below Guardian report ever see the light of day? On Tuesday The Guardian published select contents of a leaked internal United Nations document detailing a "pay to play" scheme orchestrated by Saudi Arabia. According to the leaked document, the Saudis demanded that aid groups and humanitarian agencies operating in Yemen provide favorable publicity for Saudi Arabia in return for Riyadh providing close to a billion dollars to fund their efforts. The document identifies $930m given to the aid groups, even as the Saudi-led coalition bombed the very people the donations were supposed to help. The Guardian report calls the extent of Saudi demands "highly unusual" as part of the requirement for groups to receive aid included floating favorable stories and coverage of "the Saudi humanitarian effort in Yemen" to newspapers like the New York Times and the Guardian — publications specifically named in the internal memo. Thus the nearly $1bn was essentially hush money for the sake of propaganda meant to shield the kingdom from scrutiny over its Yemen actions.
Crown prince Mohammed bin Salman is ‘chief of the tribe’ in a cowed House of Saud — For just over two years, until June 2017, Mohammed bin Nayef was crown prince of Saudi Arabia, the designated heir to the throne. A grandson of the kingdom’s founder, with long experience at high levels of government, he was the first of his generation to reach the direct line of succession. Today, bin Nayef, 59, is rarely seen outside his palace in Jiddah, on Saudi Arabia’s Red Sea coast. Usurped by an ambitious cousin barely half his age who took over his title and froze his once-hefty bank accounts, he reportedly passes his days under heavy guard. The ouster was not completely surprising, since his cousin was the favored son of bin Nayef’s uncle Salman, the current king. But the speed and apparent ruthlessness with which it was done — a late-night summons that left the crown prince with little choice — were shocking to many in the extended royal family, in which decisions had traditionally been made by consensus after extensive consultation. Now well more than a year into the job, the new crown prince, Mohammed bin Salman, enjoys nearly absolute power in the kingdom, directly controlling foreign and domestic policy, the security forces, and the economy. In doing so, Mohammed has replaced “cautious” royal leadership with “impulsive interventionist politics,” as one Western intelligence agency predicted in late 2015, warning that his rapid ascent would lead to trouble at home and abroad. The prescience of that three-year-old analysis, by Germany’s Federal Intelligence Service, appears borne out by events as Mohammed’s command has grown — an endless and seemingly futile war in Yemen, stubborn disputes and peremptory behavior toward neighbors and allies, and crackdowns on even the mildest forms of internal dissent.
Saudi Arabia’s ruling family – annotated family tree (Reuters)
EXCLUSIVE: Saudi dissident prince flies home to tackle MBS succession- Prince Ahmad bin Abdulaziz, the younger brother of King Salman, has returned to Saudi Arabia after a prolonged absence in London, to mount a challenge to Crown Prince Mohammed bin Salman or find someone who can. The septuagenarian prince, an open critic of bin Salman (MBS), has travelled with security guarantees given by US and UK officials. “He and others in the family have realised that MBS has become toxic,” a Saudi source close to Prince Ahmad told Middle East Eye. “The prince wants to play a role to make these changes, which means either he himself will play a major role in any new arrangement or to help to choose an alternative to MBS.” The source said that the prince returned “after discussion with US and UK officials”, who assured him they would not let him be harmed and encouraged him to play the role of usurper. Apart from those western guarantees, Ahmad is also protected by his rank. Last November, bin Salman conducted a sweeping purge of dissident royals, yet was not able to touch any sons of King Abdulaziz, the founder of the modern Saudi state, who are regarded as too senior a target for him. The 33-year-old heir to the Saudi throne’s dominance in the kingdom has come under intense scrutiny following the murder of journalist Jamal Khashoggi on 2 October, leading to speculation that he could be replaced. MEE understands that while Prince Ahmad was in London he held meetings with other members of the Saudi royal family who are currently living outside the kingdom. Prince Ahmad also consulted figures inside the kingdom who have similar concerns and have encouraged him to usurp his nephew.
Summit in Istanbul as ramifications of the Khashoggi debacle roll on – Pepe Escobar - The Russia-Turkey-Germany-France summit in Istanbul today (October 27) is an extraordinary affair. The Kremlin has been deploying a wily strategy, downplaying the summit as just “comparing notes”, and not a breakthrough.Yet Istanbul is a de facto breakthrough in itself – on superimposed layers. It signals the top two EU powers acquiescing that Russia is in control of Syria’s future. It confers extra legitimacy to the Astana format (Russia, Turkey, Iran) on Syria, as well as adding new meaning to the efficacy of a quad. The nominal Quad (US, Japan, India and Australia) is essentially a mechanism of Chinese containment already showing signs of derailment. In contrast, there’s a Eurasian Quad that will be discussing not only the geopolitical chessboard in wider southwest Asia but also the supreme trans-Atlantic dilemma: how to deal with Washington’s sanction obsession.Istanbul, of course, won’t “solve” the tragedy in Syria. President Putin is carefully maneuvering around President Erdogan’s neo-Ottoman ambitions while the EU pair is not exactly in a strong negotiating position.Putin has already appeased Saudi Arabia, and that’s no mean feat. No more funding and weaponizing of any forms of Salafi-jihadism in Syria. The Arab League – with no Saudi objections – is even embarking on normalizing relations with Damascus.Riyadh is now part of the Russian Direct Investment Fund (RDIF), which will in fact be “renamed as the Russian-Chinese-Saudi Fund”, as revealed by its director, Kirill Dmitriev, at the Future Investment Initiative, or “Davos in the Desert”. The fund was originally set up in 2012 by RDIF and China Investment Corporation (CIS) to turbo-charge bilateral economic cooperation between Moscow and Beijing. Davos in the Desert, by the way, yielded a bombshell that was virtually ignored by the 24/7 news-cycle dementia. Prime Minister Imran Khan, fresh from receiving a much-needed Saudi cash injection to his nation’s economy, revealed that Pakistan is mediating a resolution for the tragedy in Yemen between Saudi Arabia and Iran.
Four-nation Syria summit calls for lasting Idlib ceasefire - The leaders of Turkey, Russia, France and Germany on Saturday called for a political solution to Syria's devastating seven-year civil war and a lasting ceasefire in the last major rebel-held bastion of Idlib. A joint statement adopted at the end of a major summit in Istanbul said the countries were committed to working "together in order to create conditions for peace and stability in Syria". It also "stressed the importance of a lasting ceasefire" in Idlib, while hailing "progress" following a deal last month between Syrian-regime supporter Russia and rebel-backer Turkey to create a buffer zone around the northwestern province. Turkish President Recep Tayyip Erdogan spoke for several hours with Russia's Vladimir Putin, France's Emmanuel Macron and German Chancellor Angela Merkel about the Syrian conflict, in which more than 360,000 people have been killed since 2011. Their statement, read by Erdogan, called for a committee to be established to draft Syria's post-war constitution before the end of the year, "paving the way for free and fair elections" in the war-torn country. It also said there was "the need to ensure humanitarian organisations' rapid, safe and unhindered access throughout Syria and immediate humanitarian assistance to reach all people in need". The talks came after a week of escalating violence in Idlib culminated in Syrian regime artillery fire killing seven civilians on Friday, the highest death toll there since the fragile ceasefire began last month.
Germany And France Just Broke The US Boycott Of Syria - There weren't exactly any breakthroughs at the four-way summit involving France, Germany, Russia, and host Turkey in Istanbul on Saturday, but the event itself was a significant victory for one side in terms of optics. Says Syria expert Joshua Landis: "The real importance of France and Germany going to Turkey to meet Putin and Erdogan is that they are effectively hiving off from the US by joining the Astana process." Ultimately, according Professor Landis: They are breaking the boycott of Syria, while preserving the "need for elections" talking point.Alas, as the photo op of summit participants suggests, the United States has indeed effectively been cut out of the Russia and UN-brokered Astana process to bring Syria's war to a close — which has both set the terms for the current shaky Idlib ceasefire agreement, and brought Turkey and Russia into an orbit of cooperation to seek long-term peace and stability. Notably Germany's Merkel and France's Macron now see the Russia-Turkey deal on Idlib as the only workable track that could stave off another mass refugee and jihadi influx into Europe, already reeling from a years-long migrant crisis. And President Putin, sitting beside his European counterparts, still affirmed that Russia is in the driver's seat since its 2015 intervention in the war at the request of Damascus. Putin vowed during the summit: "Should radicals… launch armed provocations from the Idlib zone, Russia reserves the right to give active assistance to the Syrian government in liquidating this source of terrorist threat."
Syria Sitrep – ISIS Defeats U.S. Proxy Force – Again - The U.S. backed proxy force in east Syria again lost positions to the Islamic State. The map shows the positions of ISIS (grey), the US. proxy force SDF (yellow) and the Syrian army (red) at the border with Iraq on October 19. bigger Here are the positions as of today. bigger The U.S. proxy force lost the towns Susah, Hawi al-Susah, Safafinah, Mozan, Shajlah and Baghuz Fawqani and ISIS is back at the Iraqi border. The Iraqi forces were alarmed and sealed the border on their side. The immediate cause of the loss was another sandstorm which ISIS used to counterattack. A similar counterattack during a sandstorm happened two weeks ago. That makes this U.S. spokesman's statement laughable: “The sandstorm allowed an ISIS counterattack, which was surprising given the conditions, but now the air is clear and the Coalition will continue to increase air and fire support to assist our partners,” Col. Ryan said ... Sandstorms disable air and artillery support. That is why ISIS, which lacks an airforce, has for years used each and every sandstorm to attack. That is not surprising at all, but one of its signature forms of fighting. Sandstorms mean that one can expect an ISIS attack. That one has to double one's guard and be ready to defend one's position. The U.S. special forces who are supposed to lead their proxies seem to have neglected that. ISIS jihadis attacked during the sandstorm in their usual manner. A suicide bomber blew up the first position at the frontline and more than 100 fighters stormed through and rolled up their enemie's lines. Since Friday some 60 to 80 SDF were killed, more were wounded and at least 20 were taken prisoners. Others simply fled in panic and ISIS could recapture several villages without a fight. ISIS claims that all the captured fighters were Arabs, not Kurds.
NATO Is At War With NATO In Northern Syria - Not for the first time the Turkish army has attacked U.S.-backed forces in northeastern Syria on Sunday in yet another absurd contradiction of American policy in the region. It highlights the awkward fact that in northern Syria for over the past year one NATO country (Turkey) is at war with another NATO country's proxy force, namely the Pentagon armed and trained Kurdish-led Syrian Democratic Forces (SDF, of which the YPG is a core part).The new flair up of tensions comes as President Turkey's President Recep Tayyip Erdogan again vowed to eliminate "terrorists and separatists" from near its border. Speaking at the four-way Syria summit involving Russia, Germany, and France in Istanbul over the weekend, Erdogan said, "We will continue eliminating threats against our national security at its root in the Euphrates' east as we have done so in its west."Notably the Saturday summit with two major European/NATO powers did not include the United States. Syrian Kurdish groups, for their part, have accused Turkey of committing ethnic cleansing on Syrian soil in a bid to essentially annex territory while conducting a campaign of 'Turkification' — a charge for which there's ample evidence. As a new AFP report finds in the northwest Syrian town of Azaz: "From Turkish-language classes for Syrian children to the state-owned Turk Telekom company erecting its first cell towers on Syrian soil, Ankara's role in the rebel-held region around Azaz has been expanding."And on Sunday amidst a continuing slow onslaught of pro-Turkish forces, the Associated Press reported: The Turkish army shelled on Sunday positions held by the U.S.-backed Kurdish fighters in northeastern Syria, east of the Euphrates River, in a new spike in tension along the borders.The report further noted the timing of Turkey's shelling US-backed fighters east of the Euphrates, coming just after Erdogan, Putin, Macron, and Merkel met in order to talk Syria, and among other things shore up the shaky ceasefire over Idlib brokered between Turkey and Russia.
Russia Ready To Shoot Down U.S. Spy Plane Behind Attacks On Airbase, Says Defense Official - A Russian defense official has doubled down on prior claims that the United States was behind a prior massive drone attack against Khmeimim Air Base near Latakia (alternately Hmeimim), which has further come under sporadic waves of attack by small armed drones which have appeared increasingly sophisticated. Vladimir Shamanov, head of the lower parliamentary house's defense committee and a former airborne troops commander, warned, according to a translation of his Tuesday statement by Russian Market:In case of another U.S. drone attack on Russian Military Base in Syria, Russia is ready to shoot-down that plane. The threat was made against an American spy plane possibly being in the area near Syria to coordinate any future attack. Last week the Kremlin said, based on new intelligence provided by the Russian defense ministry, that a major attack on Khmeimim last January was coordinated by a US P-8 Poseidon surveillance plane.
Russia, India And Iran To Cooperate On New Trade Route Alternative To Suez Canal - After their leaders pledged to strengthen bilateral trade and military cooperation at a bilateral summit last month, Russia and India announced earlier this week that they had sealed a long-discussed $6 billion arms deal despite threats of economic sanctions from Washington. And in the latest indication of the increasingly close relationship between the two countries, Iran, Russia and Iran announced on Thursday that they would meet next month to work out the details of a massive project to open up a new sea-land transport corridor that would that would be a cheaper and shorter alternative to shipping oil and other goods through the Suez Canal. According to RT, the North-South Transport Corridor (INSTC), the name for the new transit route, will connect India to Russia and Europe via a combination of sea routes and an overland passage through Iran, according to Iranian state-owned news outlet Press TV. The 7,200-kilometers long corridor will reduce the time and costs of shipping by up to 40%. Transport time between Mumbai and Moscow will fall to 20 days. The annual capacity of the transport artery is expected to reach 30 million tons.Indian logistics companies presently need to route shipments through China, Europe or Iran to access Central Asian markets. Already, routing shipments through Iran is the least time-consuming option. But the INSTC will have the ancillary benefit of allowing Indian companies to forge a new trade route to Afghanistan without having to travel through Pakistan, as tensions over Kashmir are once again on the rise. The passage corridor through the Persian Gulf will mean billions of dollars in trade for Afghanistan, cutting its dependence on foreign logistics.
Bahrain says ‘Arab NATO’ to be formed by next year -- Bahrain's Foreign Minister Khalid bin Ahmed Al Khalifa has said a planned Gulf security alliance, expected to include Egypt, will be formed by next year.At a security summit in capital Manama on Saturday, Khalifa said the Middle East Strategic Alliance (MESA), an initiative pushed by US President Donald Trump to confront Iran, will help the Gulf remain "a pillar of stability"."It (MESA) is an alliance for security and prosperity for the region and will be open to those who accept its principles," he said, adding that the alliance would also cooperate on economic issues.Relations between Saudi Arabia, which is the lynchpin of the US-backed regional bloc, and its Western allies are strained following the murder of journalist Jamal Khashoggi. Doubts over MESA have also been raised over a protracted dispute between Qatar and four Arab states who launched a blockade against Doha in 2017.Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut off travel and trade ties with Qatar in June 2017, accusing it of backing Iran and supporting "terrorism". Qatar denies the charges and says the boycott impinges on its sovereignty.
Taliban Stronger Than at Any Time Since Afghanistan War Began in 2001 —With Afghan security forces suffering record casualties, and their already tenuous control slipping all the time, things are looking dire in Afghanistan. But from the Taliban perspective, all these same stats add up to things looking pretty good. The Taliban is getting stronger all the time, and now controls more of Afghanistan than at any time since the 2001 US invasion. That control is extending in all regions of the country, with them contesting substantial portions of even vital provinces, or controlling them outright. That’s true even in the capital city of Kabul. According to the most recent SIGAR estimate, 12% of Kabul is under direct Taliban control, with another 32% of the city considered at the very least “contested.” All of this adds up to a Taliban able to contest virtually any part of Afghanistan they choose, able to make a serious run at seizing almost any city in the country, at least temporarily, and can carry out so many simultaneous offensives that the Afghan military can’t react to them all. Afghan officials are determined to not publish death tolls for their forces as they face major pushes from the Taliban. They do, however, admit that the casualties are higher than in any previous comparable period. The record casualties were a bit more closely defied by Defense Secretary James Mattis, who said over 1,000 Afghan security forces suffered casualties in August and September. This was done to praise them for continuing to fight. But they’re fighting and losing. The record casualties are not coming as part of some costly offensive by the Afghan government, but rather amid mounting losses. Afghan government control in the country is shrinking apace, and shows now sign of slowing, despite the eternal optimism of the Pentagon. One of the most immediate concerns with the casualties is that the Afghan government’s official troop figures have always been inflated. In reality, much of the army exists only on paper, and as very real troops suffer casualties, the remaining percentage of the military that is wholly imaginary only grows.
Video Shows Iranian Boats Harassing U.S. Ship With CENTCOM Chief On Board -- A hugely significant incident occurred in the Persian Gulf on Friday, first reported by CNN and now confirmed through official U.S. Navy statements. An American warship — the Wasp-class amphibious assault ship Essex — was approached by two armed Iranian fast boats at a moment that commander of U.S. Central Command, Gen. Joseph Votel, was on board. CNN reported, based on official military sources, that at one point the pair of Iranian boats crossed within 300 yards in front of the Essex; however a Navy statement did not deem the incident as intentionally hostile in spite of video footage revealing what clearly appears to be harassing maneuvers around the much larger U.S. vessel. U.S. Naval Forces Central Command told Marine Corps Times in a statement: “Today’s interaction with U.S. 5th Fleet forces and the IRGCN [Islamic Revolutionary Guard Corps Navy] was characterized as safe and professional" — meaning the US didn't consider it to be an overt or intentional act of aggression. The statement continued: “The U.S. Navy continues to operate wherever international law allows.”As CENTCOM Chief Votel was on board, we can imagine that if for a moment the Navy interpreted the approach as hostile the USS Essex would have blown the Iranian fast boats out of the water. However, stunning video of the incident shows the armed Iranian military boats in an attempt to shadow and harass the Essex.
Iran's Khamenei calls for fight against enemy 'infiltration': state TV (Reuters) - Iranian Supreme Leader Ayatollah Ali Khamenei called on Sunday for the stepping up of efforts to fight enemy “infiltration” in a speech to officials in charge of cyber defense, state television reported. “In the face of the enemy’s complex practices, our civil defense should ... confront infiltration through scientific, accurate, and up-to-date ... action,” Ayatollah Khamenei told civil defense officials, who are in charge of areas including cyber defense. The television report did not give details of the “infiltration” Khamenei was referring to. Iranian officials have long warned about Western cultural influences through entertainment, social media and the Internet as a threat against Islamic and revolutionary values. A decade ago, Iran’s nuclear program was hit by Stuxnet, a virus which was deployed by U.S. and Israeli intelligence agencies against a uranium enrichment facility. Gholamreza Jalali, head of Iran’s civil defense agency, said on Sunday that Iran had recently neutralized a new version of Stuxnet. “Recently we discovered a new generation of Stuxnet which consisted of several parts ... and was trying to enter our systems,” Jalali was quoted as saying by the semi-official ISNA news agency at a news conference marking Iran’s civil defense day. He did not give further details.
By Way Of Deception – False Flag Terror Acts Press Europe To Sanction Iran - Israels secret service Mossad, with the CIA behind it, is framing Iran with alleged assassination plots in Europe. In September a terror attack killed some 30 people in Iran. Two entities, an Arab separatist movement as well as the Islamic State terror group ISIS, took responsibility. After an investigation Iran found that it was ISIS which was responsible. It took revenge against the identified culprits. Six weeks later Denmark claims, without providing evidence, that Iran tried to assassinate a leader of the Arab separatist movement over the incident. Iran denies any such attempt. The right wing Danish government uses the claim to urge other European countries to sanction Iran. It is unlikely that Iran would take action in Europe, which it urgently needs to reduce the damage of U.S. sanction, over an incident for which it already punished the Islamic State.The Danish claims are allegedly based on information provided by Mossad. That only increases the suspicion that the assassination plot is a false flag operation similar to a recent one in Belgium. More likely though is that the CIA is behind such false flag incidents.The details:On September 22 gunmen killed 29 and wounded more than 70 participants and onlookers of a veterans day parade in Ahvaz, Iran: "The terrorists disguised as Islamic Revolution Guards Corps (IRGC) and Basiji (volunteer) forces opened fire to the authority and people from behind the stand during the parade," the governor of Khuzestan, Gholam-Reza Shariati, said, according to IRNA. U.S. State Department spokeswoman Heather Nauert said, "We stand with the Iranian people against the scourge of radical Islamic terrorism and express our sympathy to them at this terrible time". The Islamic State as well as an Arab separatist movement claimed responsibility: After Yaqoob Al-Ahvaz claimed responsibility Iran accused Saudi Arabia of involvement in the attack:
Oman says time to accept Israel in region, offers help for peace (Reuters) - Oman described Israel as an accepted Middle East state on Saturday, a day after hosting a surprise visit by its prime minister that Washington said could help regional peace efforts. Oman is offering ideas to help Israel and the Palestinians to come together but is not acting as mediator, Yousuf bin Alawi bin Abdullah, the sultanate’s minister responsible for foreign affairs, told a security summit in Bahrain. “Israel is a state present in the region, and we all understand this,” bin Alawi said. “The world is also aware of this fact. Maybe it is time for Israel to be treated the same [as others states] and also bear the same obligations.” His comments followed a rare visit to Oman by Israeli Prime Minister Benjamin Netanyahu which came days after Palestinian President Mahmoud Abbas paid a three-day visit to the Gulf country. Both leaders met with Oman’s Sultan Qaboos. “We are not saying that the road is now easy and paved with flowers, but our priority is to put an end to the conflict and move to a new world,” bin Alawi told the summit. Oman is relying on the United States and efforts by President Donald Trump in working toward the “deal of the century” (Middle East peace), he added. Bahrain’s foreign minister Khalid bin Ahmed Al Khalifa voiced support for Oman over the sultanate’s role in trying to secure Israeli-Palestinian peace, while Saudi Arabia’s foreign minister Adel al-Jubeir said the kingdom believes the key to normalizing relations with Israel was the peace process. The three-day summit was attended by Saudi Arabia and Bahrain. U.S. Defense Secretary Jim Mattis, and his counterparts in Italy and Germany also participated, but Jordan’s King Abdullah canceled his appearance after a flood that hit the Dead Sea region killed 21 people.
Is Oman Helping Netanyahu Make Peace with Saudi Arabia and Iran? - Sultan Qaboos Al-Said seemingly took the world by surprise when he hosted Israeli Prime Minister Benjamin Netanyahu in Muscat last week. The British-educated Qaboos, who is also the Arab world’s longest serving monarch, has played an indispensible role since assuming power in 1970 to narrow differences between Washington and Teheran and between Israel and the Arab states.For instance, amid rumors of an imminent Israeli attack on Iran in 2011, Qaboos helped the Obama administration with facilitating a secret backchannel with Iran, which led to the Interim Agreement of 2013, the precursor of the Joint Comprehensive Plan of Action (JCPOA) of 2015.Although Netanyahu staunchly opposed the JCPOA and actively lobbied the Trump administration to scrap it altogether, his visit to Muscat was closely coordinated with the White House—and with the blessings of President Donald Trump’s son in-law Jared Kusher in particular—to help lend Arab support for a lasting peace between Israelis and Palestinians.By inviting Netanyahu, Oman demonstrated significant diplomatic bravery by seeking to accommodate two regional powers—Israel and Iran—that its fellow Gulf Arab states do not accept.The preparations for Netanyahu’s visit most likely began last February when Omani Foreign Minister Yusuf bin Alawi visited the Al-Aqsa Mosque in Jerusalem where he called for the need to establish a Palestinian state. But the timing of the Israeli leader’s talks in Muscat coincides with mounting international outrage over the murder of Saudi journalist Jamal Khashoggi at the Saudi consulate in Istanbul.From an Omani perspective, the Khashoggi affair, which is pitting Turkish President Recep Tayyip Erdogan against Saudi Arabia’s Crown Prince and de-facto ruler Mohammad bin Salman (MbS) in a high-stakes zero-sum game, is further contributing to instability in the volatile Middle East. Muscat believes that Israel is a stabilizing force in the Middle East, particularly now amid Saudi Turkish tensions, and thus seeks to strengthen regional stability by supporting the U.S.-led peace process by publicly engaging Netanyahu and Palestinian President Mahmoud Abbas.
Israel wants US mediation in gas dispute with Lebanon - Israel offered on Wednesday to accept US mediation in a dispute with Lebanon over a potentially lucrative block of gas resources in the Mediterranean. As tension rises over the issue, the senior US diplomat for the Middle East, David Satterfield, made a surprise visit to Lebanon this week for talks with senior government officials, and Secretary of State Rex Tillerson is expected to visit on Feb. 15. “We are willing to accept American mediation to resolve the issue diplomatically. There was international mediation on the matter in the past,” Israeli Energy Minister Yuval Steinitz said on Wednesday. “We were close to reaching a compromise in 2013, but the whole thing collapsed at the 11th hour.” There is also growing unease over Israeli plans to build a cement wall on its border with Lebanon. Construction work has already begun at the Ras Al-Naqoura border crossing. Talks took place at Ras Al-Naqoura on Wednesday between representatives of the Lebanese and Israeli armies, brokered by the UN Interim Force in Lebanon (UNIFIL). The two sides discussed the possibility of deciding on the maritime border between the two countries in the same way as the land border was established. “UNIFIL proposed this solution, and Lebanon welcomes it provided the international force undertakes this task,” Lebanese MP Mohammed Qabbani told Arab News. Lebanon’s Higher Defense Council said Israel’s behavior was a violation of UN Security Council Resolution 1701, and threatened border stability. “We grant the armed forces the political backing to act against any Israeli aggression on the border — on land and at sea,” it said. Resolution 1701 was passed after the Israeli war on Lebanon in 2006, and guarantees Lebanon’s territorial integrity and sovereignty. Israeli minister Steinitz said: “I do not need these explicit threats. Energy security and the protection of our energy installations — and to a great extent the gas rigs as well — are at the top of our list of priorities. “Let there be no doubt, the state of Israel is the strongest nation in the region, and we will defend our territorial waters and our gas rigs and fields. “I think both Israel and Lebanon are interested in a diplomatic solution. Lebanese officials are interested in exploiting gas and oil, and they have the right to do so. However, they should not make threats.”
Israeli Forces Launch 87 Overnight Airstrikes Against Gaza Strip — The Israeli army carried out scores of air strikes across the besieged Gaza Strip in the early hours of Saturday, in the highest-intensity offensive on the coastal Palestinian territory since the summer.The Israeli army launched at least 87 air strikes, Israeli news outlet Ynet reported, saying it was in response to some 34 rockets fired from the enclave into southern Israel.Islamic Jihad claimed responsibility for the rockets, saying in a statement that they were in retaliation for the Israeli army’s killing of five Palestinian protesters on Friday.“The resistance will not accept the equation imposed by the enemy on the basis of killing on their part and silence on our part,” the group said in a statement.Following the exchanges, Islamic Jihad’s media office announced on Saturday morning that it had accepted an Egypt-mediated ceasefire with Israel.Locals told Middle East Eye that one four-storey building in central Gaza City that was turned to rubble overnight had hosted charitable institutions and research centres. Gaza’s Ministry of Health, meanwhile, said that air strikes had targeted the perimeter of the Indonesian Hospital in Beit Lahiya in the northern Gaza Strip, causing material damages to the building.
Israel Strikes Gaza Hospital During Massive Response To 'Islamic Jihad' Rocket Attacks - Gazans reported explosions so massive they seemed to turn night into day overnight Friday as Israeli aircraft began pounding the Gaza Strip since the evening in response to Hamas reportedly firing some 30 rockets toward the Israeli city of Sderot.The Israeli Defense Forces (IDF) said it destroyed 80 Hamas targets in the operation, which had been somewhat expected since a week ago the began staging an unprecedented build-up of forces along the Israeli-Gaza border fence. Sporadic bombings continued through Saturday morning. A terrorist group operating in Gaza which often acts independently of Hamas called Islamic Jihad implicitly claimed responsibility for the rocket fire, issuing a statement saying it "can no longer stand idle before the continued killing of innocents and bloodshed by the Israeli occupation". In the immediate aftermath of the most intense part of the overnight bombings there were no reports of casualties on either side, however, the air raid follows one of the deadliest days in weeks as on Friday 5 Palestinians were reportedly shot by Israeli snipers near the border fence. Throughout the night Friday Israeli media reported that multiple Israeli settlements in the south of the country had most of their residents staying in bomb shelters. But on the Gaza side it was chaos as frequent explosions rocked the strip and there were broad power outages. And notably Palestinian authorities have blamed the IDF for a direct strike on an Indonesian-sponsored hospital in the northern Gaza strip — which appears to be confirmed in images and video uploaded to social media.
Israel Crushes Resistance at Home and Abroad -The Jewish-Israeli left is in tatters.They make up just a tiny fraction of the Jewish population of the country, and their numbers have been steadily shrinking since the start of the millennium. No alliance of progressive parties can hold a candle to Israel’s hawkish governing coalitions. No liberal newspaper can pull the public away from the tabloids that back Prime Minister Benjamin Netanyahu and his rivals even further to the right. And no upstart activist group has been able to sway the hearts and minds of significant numbers of young Jews, brainwashed with ever-increasing doses of Zionist propaganda. Top Israeli lawmakers openly incite against leftist figures with frightening regularity, knowing that these attacks will only increase their own popularity among Israeli voters. Even without this egging on, Israeli society is increasingly purging its leftists from positions of influence, as all the Israelis who have lost their jobs in recent years after being outed for their left-leaning views can attest to.But to grasp the cost that Israeli Jews are forced to pay if they harshly criticize their own government’s racist policies, one need only consider a case reported on earlier this month, that of 58-year-old Guri Mintzer of Tel Aviv.Until recently, Mintzer was on top of the world as the CEO of a medical services firm he started from scratch over a quarter-century ago, today employing hundreds of workers – a so-called Israeli success story.But when right-wing activists learned that, in a private capacity, he supported Palestinian rights – even paying some of the legal costs of Palestinian activist Ahed Tamimi – they called to punish Mintzer by boycotting his firm.After a spate of attacks against him, the company’s employees and their property, Mintzer reluctantly sold the firm that was his life’s work. Under duress, he was reportedly forced to sell it off for a price less than its actual worth, by $10m – and possibly several times that figure.
Trade war hitting China economy harder, sooner, than anticipated - China’s economy appears to be slowing faster than expected at the start of the fourth quarter, a bad omen for growth early next year when the full force of the trade war with the United States comes to bear.This situation is likely to spur Beijing to introduce new measures to support growth, analysts said. The government will try to avoid returning to its battle-tested plan of large-scale monetary and fiscal stimulus so as not to exacerbate the country’s already huge stock of debt, but it may have no choice but to move some way in that direction to stabilise growth.Business sentiment in both the manufacturing and non-manufacturing sectors was weaker than expected in October, led by sharp declines in export demand, according to the official purchasing managers’ index published on Wednesday by the National Bureau of Statistics and the China Federation of Logistics and Purchasing.The figures were the first gauges of the trade war’s impact since the US levied 10 per cent tariffs on US$200 billion worth of Chinese goods in late September.The manufacturing sentiment index dropped to 50.2 in October, from 50.8 a month earlier. The reading, which was its lowest in more than two years and barely above the 50 point line that separates expansion from contraction in the sector, suggests the possibility of contraction in November as the US tariffs take effect.That situation could worsen in January, when the tariff on the US$200 billion of Chinese imports is set to rise to 25 per cent. It might also be exacerbated by the “front loading” behaviour of many Chinese exporters – boosting production and shipments now to fill orders for early next year before the scheduled tariff rate increase. Production and unemployment among export manufacturers are at risk of falling sharply from January due to lack of orders to fill, analysts said.
China reveals trade war strain as yuan slides and manufacturing stalls - The Chinese economy has revealed fresh signs of the pressure of a trade war with the US and a wider slowdown at home as manufacturing activity fell and the yuan was fixed at a new 10-year low to the dollar. China’s manufacturing sector barely expanded in October as both domestic and external demand ebbed, according to a closely watched metric released on Wednesday. The official purchasing managers’ index (PMI) fell to 50.2 in October, the lowest since July 2016 and down from 50.8 in September. A figure below 50 represents a contraction. New export orders, an indicator of future activity, contracted for a fifth straight month and at the fastest pace in at least a year. The figures suggest a further slowing in the world’s second-biggest economy and could prompt more policy support from Beijing on top of a raft of recent initiatives. The moves have included pumping tens of billions of dollars into the financial system and other measures to prop up local shares. Raymond Yeung, chief economist for China at ANZ, said he expected more measures, including cutting the amount of capital banks are required to hold in reserve in order to ease liquidity. “All the numbers from China’s PMI release today confirm a broad-based decline in economic activity,” said adding that conditions for the private sector was “much worse” than headline data suggested. “The government’s priority is to avoid a financial blow-up.” In a further sign of stresses in the economy, the central bank fixed the yuan lower at 6.9646 per US dollar compared with 6.9574 one day earlier. The People’s Bank of China (PBOC) allows the yuan to move 2% either side of the fix and it drifted slightly lower in subsequent trading on Wednesday. The move will increase tensions with the Trump administration, which has come close to accusing China of currency manipulation after the yuan has fallen in value and made exports more competitive.
Satellite Imagery Confirms China's Economy Contracted In October - Earlier this week, first China's official PMI and then the small-company focused Caixin PMI report confirmed that while China's economy was slowing, it had yet to contract, as the (famously goalseeked) indices printed just above the 50-level which separates expansion from contraction. Not so according to a third, and more objective measurements of Chinese manufacturing. According to an index based on satellite imagery, China's manufacturing output contracted in October, refuting the official narrative of modest but persistent expansion. The China Satellite Manufacturing Index compiled by the U.S.-based firm SpaceKnow, which uses satellite imagery to track activity levels across thousands of industrial sites, slipped below 50 in October for the first time since June 2017 according to Bloomberg. As with the official purchasing managers index, 50 is the dividing line between expansion and contraction. As we discussed earlier this week, Chinese manufacturers - long the growth dynamo of China's economy - have come under increased pressure from the escalating trade war between the U.S. and China. Trump has warned he will expand tariffs to cover all imported Chinese goods if Chinese President Xi Jinping does not accede to U.S. demands when the two leaders meet in November at a Group of 20 summit in Argentina, although as Trump tweeted earlier today, he "had a long and very good conversation with President Xi Jinping of China. We talked about many subjects, with a heavy emphasis on Trade. Those discussions are moving along nicely." The tweet sparked a broad market rally, as the Trump administration's latest attempt to talk up the market into the midterms has worked for the time being.
China's future rests on 'mending fences with the United States' -- China must find ways to repair its strained relations with its geopolitical rival the United States if Beijing is serious about deepening reforms, according to Chinese and American analysts. At a seminar in Hong Kong looking back at China’s 40 years of opening up to the world, the observers voiced concerns that China’s further rise on the global stage could be affected by the protracted tensions between the two powers over trade and a litany of security and political conflicts.Yuan Peng, president of the China Institutes of Contemporary International Relations, said there was a strong link between China’s rapid rise and the largely conflict-free development of bilateral ties in the past four decades.“A stable US-China relationship is good for China’s reform and opening up, and deeper reform and opening would help stabilise bilateral ties,” Yuan said at the seminar co-organised by the Office of the Commissioner of the Ministry of Foreign Affairs in Hong Kong and the Better Hong Kong Foundation. The South China Morning Post is the media partner of the event. The normalisation of China-US relations, marked by the publication on December 16, 1978, of a joint communique to establish diplomatic ties between the US and China, happened just two days before the historic Third Plenum of the 11th Communist Party’s Central Committee, which was widely seen as the start of China’s reform and opening up. “Without the formal normalisation of relations, it’d be very hard for us to conduct reform and opening up. Without the great decisions by Deng Xiaoping on reform and opening, the full normalisation of China-US relations would not be fulfilled,” Yuan said, referring to China’s late paramount leader.
China Boosts Antarctic Presence With Planned Permanent Airbase, Cites Strategic Needs - China is set to significantly expand its presence in Antarctica as it takes the crucial step of establishing its first permanent airport and large landing strip close to its small research outpost, Zhongshan station. After nearly a decade of planning construction of the airport is set to begin in November, which state media and officials are calling a "permanent" base. Notably, according to Chinese state-run Xinhua News Agency the airfield will support China's Antarctic "strategy needs" and protect China's right to speak on "Antarctic airspace control". The precise location is near the Zhongshan Research Station, which opened in 1989 and is one of two such research outposts, on the east Antarctic coast near the Larsemann Hills, and the project will be overseen by the official Polar Research Institute of China. Chinese media reports details that the airport is to be constructed at a spot about 28 km away from Zhongshan, with a sizable runway at 1,500m long and 80m wide. It is to primarily serve scientists and staff working in the isolated region.However, it's no doubt already gotten the attention of American military planners and China observers as it began making headlines Monday, especially after last month Beijing rolled out with its first domestically built icebreaker, this also following the Chinese government releasing “China’s Arctic Policy” in early 2018 — a white paper outlining how China's Belt and Road Initiative (BRI) will construct infrastructure projects along the northern Arctic routes, and urged its largest shipping companies to conduct trial voyages through the frigid waters. Could Antarctic exploration, on the polar opposite side the globe, be part of a broader vision of a “Polar Silk Road” which aims to find "alternate" routes and spheres of influence to bypass Washington's choke points in the South China Sea and the Indian Ocean (something which the Arctic route attempts to do)?According to Chinese state sources, last February researchers laid the foundation of the country's fifth research facility, which is to be built in the far south of the continent. Construction for the new projects are to begin when the 35th Antarctic expedition departs on November 2 with building to commence later that month. The air field is expected to take two years to complete.
China’s President Orders Military to “Prepare For War” — China’s President Xi Jinping ordered the military region responsible for monitoring the South China Sea and Taiwan to “assess the situation it is facing and boost its capabilities so it can handle any emergency” as tensions continue to mount over the future of the South China Sea and Taiwan, while diplomatic relations between Washington and Beijing hit rock bottom. The Southern Theatre Command has had to bear a “heavy military responsibility” in recent years, state broadcaster CCTV quoted Xi as saying during an inspection tour made on Thursday as part of his visit to Guangdong province. “It’s necessary to strengthen the mission … and concentrate preparations for fighting a war,” Xi said. “We need to take all complex situations into consideration and make emergency plans accordingly. “We have to step up combat readiness exercises, joint exercises and confrontational exercises to enhance servicemen’s capabilities and preparation for war” the president-for-life added. According to the South China Morning Post, Xi’s visit to the military command was one of several he made during a four-day trip to the south China province aimed at bolstering confidence amid an economic slowdown, and growing trade and strategic disputes with the United States. Xinhua reports President Xi “stressed the need to focus on combat research and commanding, to advance work in all areas and accelerate developing strong and efficient joint-operation commanding institutions for theatre commands to comprehensively boost the military’s battle-winning ability.”
France to send aircraft carrier to South China Sea to threaten China - Shortly after US President Donald Trump announced he would repudiate the Intermediate Range Nuclear Force (INF) treaty signed with the Soviet Union in 1997, targeting Russia and China, Paris announced that it would send its aircraft carrier, the Charles de Gaulle, to Asian waters. The carrier’s air wing includes Rafale aircraft bearing missiles with nuclear warheads.In the daily La Provence, French Defence Minister Florence Parly said the carrier, which has been under repair since last year, would be sent to the Indian Ocean and South China Sea: “The fact that the Charles de Gaulle will soon be back at sea at full operational capacity will give back its power projection capacity to our naval air force and reinforce its political dimension. It is also scheduled to travel to the Indian Ocean in 2019.”Parly justified the dispatching of the carrier citing the need to defend freedom of navigation, the pretext Washington and its allies have used for provocative naval operations in the South China Sea: “We have always been on the front line of defending the inalienable right of freedom of navigation in international waters. And each time this fundamental principle of international law is threatened, as is currently the case in the South China Sea, we will make known our freedom to navigate in these waters.”She was thus echoing Washington’s accusations—ever since then-US President Barack Obama announced in 2011 a “pivot to Asia” aiming to politically and militarily isolate China—that Beijing is threatening “freedom of navigation” in the South China Sea.It points to the growing involvement of the European imperialist powers in the war drive in Asia, led above all by Washington, which seeks to defend its fast-crumbling world hegemony against China. At the beginning of this year, France negotiated an agreement with India, a leading rival of China in Asia, allowing it to station military forces in India. At the beginning of May, French President Emmanuel Macron travelled to the French possession of New Caledonia in the Pacific Ocean to call for a new Indo-Pacific “axis” to threaten China. The Charles de Gaulle is to set sail for Asian waters in a context of extreme political tensions. Its deployment can have the most serious consequences for working people in France and worldwide.
Why Democracies Are Turning Against Belt and Road - China’s Belt and Road Initiative (BRI), an enormous international investment project touted by Chinese President Xi Jinping, was supposed to establish Chinese soft power. Since late 2013, Beijing has poured nearly $700 billion worth of Chinese money into more than sixty countries (according to research by RWR Advisory), much of it in the form of large-scale infrastructure projects and loans to governments that would otherwise struggle to pay for them. The idea was to draw these countries closer to Beijing while boosting Chinese soft power abroad. Today, however, China faces a backlash to BRI at home and abroad. Many Chinese complain of the initiative’s wasteful spending. Internationally, some of the backlash is geopolitical, as countries grow wary of Beijing’s growing influence. But much of it is simply political. Unlike Western lenders, China does not require its partners to meet stringent conditions related to corruption, human rights, or financial sustainability. This no-strings approach to investment has fueled corruption while allowing governments to burden their countries with unpayable debts. And citizens of many BRI countries have reacted with anger toward China—an anger that is now making itself felt in elections. Far from expanding Chinese soft power, the BRI appears to be achieving the opposite. Malaysia’s election in May 2018 crystallized the sorts of concerns about Chinese power that have been building within BRI client countries. Mahathir Mohamad defeated the incumbent Prime Minister,Najib Razak by openly campaigning against Chinese influence. He criticized Razak for approving expensive BRI infrastructure projects that required considerable borrowing from China, which Razak used to create an illusion of development while he and his associates plundered state coffers. Since taking office in May, Mohamad has cancelled two of the largest Chinese projects in Malaysia—a $20 billion railroad and a $2.3 billion natural gas pipeline—citing his country’s inability to pay. The backlash has not been limited to Malaysia. Pakistan has received an estimated $62 billion in Chinese lending order to finance projects, including highway and rail infrastructure and Register to read one free article a month.
Japanese PM visits China in bid to improve relations -- Japanese Prime Minister Shinzo Abe late last week made his first visit to China since taking office in December 2012. The trip, aimed at further thawing the frosty relations between the two countries, took place as both China and Japan are being affected by the Trump administration’s trade war measures. Abe took the first steps toward ending the standoff with China by suggesting, in June 2017, that Japan could provide conditional support for Chinese President Xi Jinping’s massive Belt and Road Initiative (BRI) aimed at linking East Asia with Europe and Africa. Chinese Premier Li Keqiang visited Japan in May, after years of bitter exchanges, particularly over the disputed rocky outcrops in the East China Sea known as the Senkakus in Japan and the Diaoyu islands in China. Li, however, barely referred to these divisive issues and stressed instead the value of economic cooperation between two countries. China faces aggressive moves by the Trump administration on all fronts—trade war measures, accusations of Chinese interference in American politics and US military provocations in the South China Sea and Taiwan Strait.Japan has been hit by US trade threats, both directly and indirectly through its exports to China, which is Japan’s largest trading partner. Last financial year, Japan exported $137 billion worth of goods into Chinese markets—much of it semiconductors and other components that are incorporated into items sold in the US.For China, hi-tech imports from Japan are vital as the US seeks to choke off access to such goods on the grounds of “national security.” In the name of halting the alleged theft of American technical secrets, the Trump administration is seeking to undermine China’s efforts to become a global leader in advanced technology. Abe and Li agreed to start talks about cooperation in state-of-the-art technology, while protecting intellectual property rights—a move that Washington will not welcome.Abe brought 500 corporate executives as part of his entourage. According to Li, Chinese and Japanese companies signed deals worth $18 billion during the visit. At the same time, the two central banks signed a three-year credit swap agreement allowing them to exchange $30 billion worth of each others’ currencies and helping to facilitate trade.
Pacific trade pact to start at end-2018 after six members ratify (Reuters) - A landmark 11-member trade deal aimed at slashing barriers in some of Asia Pacific’s fastest growing economies will come into force at the end of December, the New Zealand government said on Wednesday. The deal would move forward after Australia informed New Zealand that it had become the sixth nation to formally ratify the deal, alongside Canada, Japan, Mexico and Singapore. “This triggers the 60 day countdown to entry into force of the Agreement and the first round of tariff cuts,” said New Zealand Trade and Export Growth Minister David Parker. His country is responsible for official tasks such as receiving and circulating notifications made by members of the pact. The original 12-member deal was thrown into limbo early last year when President Donald Trump withdrew from the agreement to prioritize protecting U.S. jobs.. The 11 remaining nations, led by Japan, finalised a revised trade pact in January, called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The success of the deal has been touted by officials in Japan and other member countries as an antidote to counter growing U.S. protectionism, and with the hope that Washington would eventually sign back up. The deal will reduce tariffs in economies that together amount to more than 13 percent of global GDP - a total of $10 trillion. With the United States, it would have represented 40 percent. The five member countries still to ratify the deal are Brunei, Chile, Malaysia, Peru and Vietnam.
India inks $950 million deal for Russian frigates - Russia has inked a $950 -million deal to supply two new warships to India that will be equipped with Brahmos missiles to add to the firepower of the Navy. The two frigates of the Project 11356 class will be bought directly from Russia and a contract to build two more at an Indian yard is likely to be signed at a later stage. Sources told ET that while final clearances for the long-pending project came before the summit earlier this month between President Vladimir Putin and Prime Minister Narendra Modi, the deal was signed last week after price negotiations. Given that the US has implemented sanctions on weapons purchases from Moscow, India could make payments for the ships using the rupee-rouble route. The deal — under a ‘2+2’ scheme where technology will be transferred to an Indian shipyard to construct two of the frigates from scratch — has been in the works since 2015. The two ships to be brought from Russia are expected to be delivered by 2022, given that the hulls have already been fabricated for a Russian navy order that got stalled following the Ukrainian crisis. The ships have been designed to work with Ukraine-made gas turbines.
India Calls Trump's Bluff, Will Pay For Russian S-400s In Rubles - After facing down US threats of possible economic sanctions should it follow through with its plans to purchase nearly $5.4 billion in Russian S-400 anti-ballistic missile systems, India has successfully called the US's bluff. After India stood its ground and insisted on moving ahead with the arms deal, the White House said it would consider giving India a waiver on the deal, according to RT.For anybody who has followed our coverage of the growing mutiny against the dominant dollar-based trade paradigm - a rebellion that's being led by Russia and China - the US's reasons for granting the concession should be self-evident. After the US threatened to block the deal via SWIFT, the supposedly "politically independent" system for international payments over which the US Treasury exercises de facto veto power via economic sanctions, Russia and India found a viable workaround: Carry out the transaction in rubles and rupees. New Delhi and Moscow officially agreed on the deal during a summit earlier this month, where they also pledged to work toward closer military and economic ties, much to the chagrin of the US. In addition to the S-400s, India is also reportedly planning to buy Russian T-14 Armata tanks and guided-missile frigates, and could even pursue the development of next-generation submarines and fighter jets in cooperation with Moscow. By deciding to tolerate the deal, the US is, in effect, acknowledging that Russian President Vladimir Putin had a point when he said earlier this month that the US's willingness to impose economic sanctions is a "colossal strategic mistake." That's because sanctions, as Putin argued, will only further incentivize countries to pursue an alternative to the dollar-based trade system. And as China and Russia increasingly conduct more of their bilateral trade in yuan and rubles, while also pursuing alternatives to paying for oil in dollars, the US may finally be starting to realize that this small mutiny represents a real threat to the dollar's global hegemony.
Despite PR duress, Saudi $6bn to Pakistan comes with strings Pakistani Prime Minister Imran Khan returned home this week from Saudi Arabia with a pledge of $6 billion in loans. Khan was likely able to secure the deal with fewer strings than a previous rejected offer, due to enormous international scrutiny on the kingdom in the wake of the Jamal Khashoggi murder. But the latest package may require a deepening military partnership with Saudi Arabia. Khan headlined on day one of the Future Investment Initiative conference in Riyadh on October 23, even as many western officials withdrew. The kingdom’s generosity comes at a critical time for Pakistan, which is facing a fiscal crisis and last month saw $300 million in US military aid suspended by the Trump administration. “Trump’s decision has stripped the military of resources, forget about the rest of the country,” Pakistani military scientist Ayesha Siddiqa told Asia Times. On Khan’s return to Pakistan, he stated in a televised address that Pakistan will help end the conflict in Yemen. “We are trying our best to act as a mediator to resolve the Yemen crisis,” Khan said. Observers have interpreted this statement by Khan as being linked to the terms surrounding the loans, as there were no other significant points mentioned by the PM regarding his visit. Riyadh in 2015 launched a coalition to fight the Houthi rebels in Yemen and sought military support from Islamabad, but Pakistan’s parliament voted against joining the war. Saudi Arabia just two weeks ago offered loans to ease Pakistan’s financial woes, but Islamabad refused. “There were too many conditions attached,” said Minister of Information Fawad Chaudry. When asked what led to Pakistan shifting its position to accept the Saudi loans, Chaudry said: “ There is a change in politics. Obviously Saudi Arabia needs some support. I think the situation has changed now.”
Jair Bolsonaro, Far-Right Populist, Elected President of Brazil — Brazil on Sunday became the latest country to drift toward the far right, electing a strident populist as president in the nation’s most radical political change since democracy was restored more than 30 years ago.The president-elect, Jair Bolsonaro, has exalted the country’s military dictatorship, advocated torture and threatened to destroy, jail or drive into exile his political opponents.He won by tapping into a deep well of resentment at the status quo in Brazil — a country whiplashed by rising crime and two years of political and economic turmoil — and by presenting himself as the alternative. “We have everything we need to become a great nation,” Mr. Bolsonaro said Sunday night shortly after the race was called in a video broadcast on his Facebook account. “Together we will change the destiny of Brazil.”He appeared eager to dispel concerns that he would govern despotically, saying his government would be a “defender of the Constitution, democracy and liberty.”Mr. Bolsonaro, who will take the helm of Latin America’s biggest nation, is further to the right than any president in the region, where voters have recently embraced more conservative leaders in Argentina, Chile, Peru, Paraguay and Colombia. He joins a number of far-right politicians who have risen to power around the world, including Italy’s deputy prime minister, Matteo Salvini, and Prime Minister Viktor Orban of Hungary.“This is a really radical shift,” said Scott Mainwaring, a professor at Harvard University’s Kennedy School of Government who specializes in Brazil. “I can’t think of a more extremist leader in the history of democratic elections in Latin America who has been elected.”With 98 percent of votes counted, Mr. Bolsonaro was ahead with 55 percent, guaranteeing him a win over Fernando Haddad of the leftist Workers’ Party, who had 45 percent.
“Far More Dangerous Than Trump”: Jair Bolsonaro Wins Brazil’s Presidency — Jair Bolsonaro was elected president of Brazil on Sunday. The far-right congressman received more than 55 percent of the vote. His opponent, ex-São Paulo Mayor Fernando Haddad of the Workers’ Party, received less than 45 percent of the vote. Bolsonaro has already had a phone call from Donald Trump congratulating him on his victory.As incomprehensible as Trump's election was and still is, Bolsonaro's is an order of magnitude worse. This is an epic tragedy for Brazilians, their young democracy, the Amazon, and all of Latin America.— David Lukas (@davidalukas) October 29, 2018“This is a dark day for Brazil; Brazilian democracy is now in complete crisis,” Center for Economic and Policy Research Co-Director Mark Weisbrot warned tonight. “The international community must help preserve Brazil’s democratic institutions and stand up for the rights of its citizens by letting Bolsonaro know that there will be consequences if he follows through on his dangerous and hateful rhetoric.”Human Rights Watch issued a statement calling on Brazil’s judiciary and other institutions to resist any attempt to undermine human rights, the rule of law, and democracy after the election of Bolsonaro, whom they call a “pro-torture, openly bigoted member of Congress.”For any western journalist thinking about comparing Bolsonaro to Trump as shorthand, read this – or anything else from people who actually understand Brazil and Bolsonaro – to see how terribly wrong that is: https://t.co/K4A8sARYpo — Glenn Greenwald (@ggreenwald) October 28, 2018
What Brazil's President-elect Jair Bolsonaro wants to change - Far-right congressman Jair Bolsonaro won Brazil’s presidency Sunday on promises to overhaul several aspects of Latin America’s largest nation. A glance at the top issues that could change in a Bolsonaro administration:
- More than half of the Amazon rainforest is in Brazil, and environmentalists worry Bolsonaro’s presidency will open it up to increased deforestation and mining. He has also called for a halt to recognizing indigenous land in a way that protects it from various kinds of exploitation, saying that “not a centimeter will be demarcated for indigenous reserves.” Bolsonaro vowed to follow in U.S. President Donald Trump’s footsteps and leave the Paris climate accord, though he recently backpedaled on that stance.Many observers believe Bolsonaro’s strong ties to agribusiness leaders in Congress, part of the powerful “ruralist caucus,” will lead to a reduction in environmental protections as farming interests win out.
- At the heart of Bolsonaro’s campaign was his promise to crack down on Brazil’s soaring crime, including allowing police more leeway in the use of force. He has promised more legal protections for police who kill on the job, going so far as to say an officer who kills a “bum” should be “celebrated, not prosecuted.” Human rights activists worry that in a country where police violence is already rampant, officers could kill more innocent people with impunity. Bolsonaro has argued that the current law is too restrictive and that police should be allowed more room to defend themselves.
- Under Bolsonaro, Latin America’s largest economy could see a reduction in the size of government, including a halving of the number of ministries, the privatization of many state-owned companies and the opening up of a closed economy through new trade agreements and lower import tariffs. These proposals have cheered markets about Brazil’s future, but many remain vague, and it’s unclear how much sway Guedes will have.
- By international standards, the Brazilian system allows workers to retire too early and get overly generous pensions, significantly contributing to the government’s unsustainable budget deficit. But any move to reduce benefits will be unpopular, so Bolsonaro will have to build a broad coalition in Congress to get his proposal through. And he will probably have only a brief window when he first takes office to do so. Bolsonaro’s principal proposal on pensions is to create a system of private accounts, in which people save for their own retirement. It’s not clear how or how quickly he would transition to this new system.
- In foreign policy, Bolsonaro has also pledged to emulate Trump. He has said he will favor bilateral trade deals over multilateral ones, transfer Brazil’s embassy in Israel from Tel Aviv to Jerusalem and take a tougher line on neighboring Venezuela. He said frequently that Brazil could suffer an economic collapse similar to Venezuela’s if voters elected his left-wing rival. He has also suggested putting Venezuelans fleeing their country’s chaos in refugee camps. Bolsonaro has talked tough on China, Brazil’s biggest trade partner. In February, he visited Taiwan, which Beijing claims as its territory, and he has resisted talk of Chinese investment in strategic Brazilian state companies. He told a radio station that Brazil cannot “allow China or any other country to come and buy Brazil, instead of buying in Brazil.”
Jair Bolsonaro Is Elected President of Brazil. Read His Extremist, Far-Right Positions in His Own Words. - Jair Bolsonaro was elected president of Brazil on Sunday evening. The far-right candidate received more than 55 percent of valid votes. His opponent, Fernando Haddad of the Workers’ Party, received less than 45 percent. In a country with compulsory voting, almost 29 percent of adults preferred to annul or not cast their ballot.Seven years ago, Bolsonaro was a punchline for the political humor program CQC, where he’d make outrageous statements. A former presenter, Monica Iozzi, said they interviewed him multiple times “so people could see the very low level of the representatives we were electing.” Now, it’s Bolsonaro who is laughing and Iozzi says she regrets having given him airtime. Riding the wave of public discontent, Bolsonaro campaigned against the Workers’ Party, corruption, politicians, crime, “cultural Marxism,” communists, leftists, secularism, and “privileges” for historically marginalized groups. Instead, he favored “traditional family values,” “patriotism,” nationalism, the military, a Christian nation, guns, increased police violence, and neoliberal economics that he promises will revitalize the economy. Despite his actual political platform being short on specific proposals, the energy around his candidacy was enough to win the presidency and turn his previously insignificant Social Liberal Party into the second-largest bloc in Congress.But what has frightened his opponents, many international observers, and even some fervent Workers’ Party critics, are Bolsonaro’s repeated declarations in favor of Brazil’s military dictatorship, torture, extrajudicial police killings, and violence against LGBTQs, Afro-Brazilians, women, indigenous peoples, minorities, and political opponents, as well as his opposition to democratic norms and values. Here is Brazil’s next president in his own words over the years. In the coming months, Brazil and the world will discover if Bolsonaro will make good on these drastic promises when he takes office on January 1, 2019.
The Lessons for Western Democracies from the Stunning Victory of Brazil’s Jair Bolsonaro (video) Glenn Greenwald, The Intercept. The right-wing authoritarian Jair Bolsonaro cruised to a 10-point victory on Sunday night in Brazil, becoming president-elect of the world’s fifth most populous country and the most extremist leader in the democratic world. While some of the dynamics driving his victory are unique to Brazil, many of them are similar to prevailing political currents in North America, Eastern Europe and, increasingly, Western Europe. Bolsonaro’s victory is highly consequential in its own right: For the 210 million people who live within the borders of the country, as well as for the region and the globe, he and his tyrannical movement now dominate. But beyond those consequences, there are valuable lessons to learn for all of the democratic world by understanding the sentiments that led Brazilians en masse to support someone who, a very short time ago, was relegated to the far fringes of political acceptability and whose ascension to power was unimaginable. I explored some of those key lessons in the above eight-minute video.
Latin America braces for ‘Bolsonaro effect’ (AFP) - Brazil's Latin American neighbors are bracing for a regional "Bolsonaro effect" after the far-right leader's crushing victory in presidential elections. The knock-on effect will be felt across the region in foreign policy, trade, policing and even in how political campaigns are waged, analysts said. Bolsonaro's win perpetuates electoral routs for right-wing presidents against leftist governments hostile to the United States, said Argentine commentator Pablo Seman -- citing recent victories for Mauricio Macri in Argentina, Sebastian Pinera in Chile and Mario Abdo Benitez in Paraguay. "The US is taking possession of what has been lost in Latin America, in a context of global struggle with China for natural resources, markets, political support. There is no place in Latin America where Washington has not regained the position it lost" in the 2000s, Seman added. With President Donald Trump in the White House, "strongmen have the edge" in US foreign policy, said US analyst Michael Shifter. Bolsonaro's triumph however raises fears of a return to authoritarian rule in a region which has suffered under a string of military dictatorships. The shift will be stark, according to Mark Weisbrot "This is a guy who said the Brazilian dictatorship didn't kill enough people, that they need to kill another 30,000 people, that the police should be able to kill suspects, that the left will have a choice of going to jail or leaving the country. "Will he do these things? I think he will implement as many of these threats as he can get away with,"
IMF Approves Upsized $56.3BN Bailout Loan For Argentina- Here Are The Implications - On Friday, the IMF Executive Board completed its first review of the Argentine 3-year Stand-By Arrangement (SBA). As a result, the revised SBA was upsized to $56.3 billion (SDR40.71BN), up from $50bn under the original program of which $15bn were disbursed in June. With the approval, the IMF will disburse $5.7bn (SDR 4.1bn) immediately, and likely another $7.7bn before the end of the year. As reported before, the revised SBA augments and frontloads the access to IMF funding: compared with the original SBA access to IMF funding was increased by $19 billion through the end of 2019, to $36.2bn total (up from $17.5bn in the original June SBA). Specifically, US$13.4bn will be disbursed during the remainder of 2018 (on top of $15bn disbursed in June), and another $22.8bn in 2019 (≈$5.7bn/quarter). Finally, $5.9 billion are planned for 2020-21 Furthermore, Goldman notes that the IMF program would no longer be treated as precautionary and the authorities intend to use IMF funds for budget support. On fiscal policy the new program envisages a zero primary fiscal balance in 2019 and primary surpluses starting in 2020 (although in a curious concession by the IMF, the press release does not mention the 1% of GDP surplus for 2020 that the authorities announced a month ago). Under the new program, the main innovations relate to monetary and FX policy: in order to “decisively reduce inflation” and inflation expectations the Central Bank will shift toward a “stronger, simpler, and more verifiable monetary policy regime, temporarily replacing the inflation targeting regime with a monetary base target”. The monetary authority will now target zero nominal growth of the monetary base from now until June 2019 (the targets for December and June will be adjusted for seasonal factors given the usual pick up in money demand in those months). According to Goldman's Alberto Ramos, the new program restrains activism in the FX market. The IMF press release states that “in the event of extreme overshooting of the exchange rate, the BCRA may conduct limited intervention in foreign exchange markets to prevent disorderly market conditions. Such intervention would be unsterilized.”
In Kenya, free cash is the latest solution to poverty – Until recently, Molly struggled to imagine life beyond the end of each repetitive day: work in someone else’s fields and earn enough to eat, rinse, repeat. “It was a vicious circle I could not escape,” says the 25-year-old villager in the Bondo region of western Kenya. Her hardscrabble, rural existence is the same for many in Siaya County where people eke out a living farming maize, millet and cotton in the ochre soil. But that was before the introduction in her village of a cash handout known as “universal basic income”. It’s part of a large, intensive, multi-year study aimed at discovering a new way to end poverty in Africa. Molly began receiving a no-strings, fixed monthly donation of 2,250 shillings ($22, 19 euros) two years ago, and since then “everything has changed”, she says. “I was able to save to study to be a nursery school teacher,” she says proudly inside her tin-roofed cement home as chickens pecked outside. “It was the little bit of help that turned my situation around.” .
NATO chief calls arms buildup unlikely, Putin warns Europe - NATO Secretary-General Jens Stoltenberg said Wednesday that allies blame Russia for violating an important Cold War-era missile treaty but he does not expect them to deploy more nuclear warheads in Europe in response. In Moscow, Russian President Vladimir Putin followed up on U.S. President Donald Trump’s declared intention to pull out of the 1987 arms control pact by warning that if the U.S. deploys the now-banned missiles in Europe, Russia would target the nations hosting them. The European Union has described the Intermediate-Range Nuclear Forces (INF) Treaty as a cornerstone of European security and urged Russia and the United States to uphold it. But Stoltenberg did not encourage the U.S., the biggest and most influential member of NATO, to stay in the treaty. “I don’t foresee that allies will deploy more nuclear weapons in Europe as a response to the new Russian missile,” Stoltenberg told reporters at NATO headquarters in Brussels. However, he noted that the 29 allies were assessing “the implications of the new Russian missile for our security.” Putin said he hoped the United States did not plan to put the kind of missiles the treaty banned in Europe, if it does withdraw from the pact. “If they are deployed in Europe, we will naturally have to respond in kind,” Putin said at a news conference after talks with visiting Italian Prime Minister Giuseppe Conte. “The European nations that would agree to that should understand that they would expose their territory to the threat of a possible retaliatory strike.” The Russian leader strongly rejected U.S. and NATO allegations that Moscow has violated the treaty. He charged it was the U.S. that violated pact with missile defense facilities in Romania that could be used to hold cruise missiles in violation of the INF. With tensions over the treaty’s possible unraveling mounting, NATO on Thursday officially launches its Trident Juncture war games in Norway, its biggest maneuvers since the Cold War. Russia’s defense minister warned that Moscow could be forced to respond to increased NATO military activities near its western border.
Russia Vows It Will Act If Ukraine or Georgia Join NATO - Russia has vowed that they “will act” should Ukraine or Georgia join NATO. Defense Minister Sergei Shoigu voiced his concern over what he described as the “militarization of the European continent,” by promising action instead of empty rhetoric. This statement by Shoigu appears to be a sign of the country’s unease in the wake of President Donald Trump’s decision to pull out the United States out of the Intermediate-Range Nuclear Forces Treaty (INF). Speaking during a meeting with Greek Defense Minister Panos Kammenos, Shoigu said:“We are following with alarm NATO’s policy aimed at the active militarization of the European continent. We see efforts being made to involve more and more NATO member countries, I mean the Balkans first of all.”According to the Express UK, Andrei Kelin, director of the Russian Foreign Ministry’s European cooperation department, made his remarks during an expert discussion NATO’s Future and Russia’s Interests on the platform of the discussion club Valdai.“We will have to create a defense belt near Sochi,” said Kelin. “We will have to spend colossal resources on preventing likely actions by a hypothetical enemy, this is inevitable.” Kelin also cautioned Ukraine against joining NATO saying that action would have equally serious military and economic repercussions for his country. “The length of our common border is enormous. It is utterly unequipped, so we will have to build defense lines there and to shift the emphasis of our defense structures towards the south.”
Varoufakis- Soros Phoned Tsipras In 2015 And Demanded [My Sacking] - With billionaire 'philanthropist' George Soros making enemies and influencing people all around the world, a little more from his sordid puppetmastery background was exposed this week as his successful efforts to have a finance minister of a European Union nation fired have been put under the spotlight of awkward conspiracy fact.Infamous former Greek Finance Minister Yanis Varoufakis claimed on Monday that it was Soros who demanded that he was sacked from the Greek government in 2015.As KeepTalkingGreece.com reports, in an interview with private Skai TV, the former minister and founder of DiEM25 said George Soros phoned Alexis Tsipras in July 2015 and demanded that he be sacked.“Soros has picked up the phone about me only one time. When he contacted Tsipras in July 2015 and demanded my expulsion,” Varoufakis said.He added that his “contact” with Soros was limited to this one phone call.
German firms urged to cut dependence on China (Reuters) - A new strategy paper from Germany’s influential BDI industry federation calls on firms to reduce their dependence on the Chinese market, according to a draft seen by Reuters, in a sign of rising concern over Beijing’s state-driven economic model. The 25-page China position paper from the Federation of German Industries (BDI), which is due to be published in January, argues that a long-promised opening of the Chinese market is unlikely to take place and voices concern about rising Communist party control over society and the economy. Entitled “Partner and Systemic Competitor - How to cope with China’s state-driven economic model?”, the paper makes clear that German firms cannot afford to turn their backs on China. But, in an unusual step, it urges them to reassess their presence there, while offering numerous recommendations for the German government and European Union. The BDI is Germany’s main business lobby group and although its proposals do not always translate directly into policy, they carry significant weight. “Despite the attractiveness of the Chinese market, it will be increasingly important for companies to closely examine the risks of their engagement in China and to minimize their dependence by diversifying supply chains, production sites and sales markets,” reads the draft, which is being vetted by BDI members and could change before publication. A spokesman for the BDI later confirmed that the group was working on a China paper but said it was still at an early stage. Bilateral trade between Germany and China hit a record 188 billion euros last year. And big German firms, notably carmakers like Volkswagen, Daimler and BMW depend heavily on the fast-growing Chinese market. But while their presence there was once seen as a strength, it is now unsettling German politicians and industry as Beijing asserts control over the economy under President Xi Jinping.
Merkel’s CDU makes huge losses in Hesse election -Angela Merkel’s ruling coalition suffered heavy losses for the second time in as many weeks in a German state election that is likely to have national repercussions. The two parties in power in Berlin, the chancellor’s Christian Democratic Union and the center-left Social Democrats, lost 11 percentage points each in a high-stakes vote in Hesse on Sunday. The poor result for Germany’s two biggest parties, just weeks after a similar defeat in Bavaria, underscores voters’ increasing frustration with the embattled “grand coalition” that governs them. According to projections updated around 8pm, Ms. Merkel’s CDU remained the strongest party in Hesse. But its share of the vote plummeted to about 27 percent, its poorest result in half a century in the wealthy state and a far cry from the 38 percent it achieved in the last state election just five years ago. “We suffered painful losses,” said Hesse’s incumbent state premier Volker Bouffier. A staunch ally of the chancellor, Mr. Bouffier said that the election campaign in his state was heavily overshadowed by the incessant squabbling within the federal government in Berlin. “People want less fighting and more actual work done,” he said.
The State Of The Government Is Unacceptable - German SPD Leader Gives Merkel An Ultimatum After Devastating Loss -- Angela Merkel’s junior coalition partners gave her conservatives until next year to deliver more policy results, threatening to end their alliance if there is no improvement after both parties suffered another round of crushing losses in today's regional election in Hesse. As reported earlier, Merkel’s conservative Christian Democrats (CDU) came home first in the election in the western state of Hesse, but took just 27.2% of the vote, a huge drop from the 38.3% the CDU won at the last Hesse election, in 2013 according to projections by German broadcaster ZDF. Meanwhile, Merkel's center-left coalition partner Social Democrats (SPD) fared even worse, winning just 19.6% of the vote, down from 30.7% and its worst result in the western state in history. The party was on a par with the Greens, also on 19.6%.After the disastrous results, SPD leader Andrea Nahles said she would use a "roadmap" with which to measure the progress of the ruling coalition, which has been plagued by infighting, at a mid-term review next year according to Reuters."We could then gauge the implementation of this roadmap at the agreed mid-term review, when we would be able to clearly see if this government is the right place for us," Nahles told reporters. "The state of the government is unacceptable." Her ultimatum to the embattled Chancellor was clear: the SPD needs to show tangible results to its supporters next year or else the party’s leaders will pull out of the coalition with Merkel, resulting in a government crisis in Europe's largest economy.
Merkel Steps Down as Party Leader as Election Setbacks Take Toll - Germany’s Angela Merkel will quit as head of her Christian Democratic party and won’t run for another term as chancellor, taking personal responsibility for the decline in support for the governing coalition. “The image presented by the government is unacceptable,” Merkel said at a press conference in Berlin, a day after her party suffered its latest setback in a regional election. “With this decision, I am trying to do my part to allow the federal government to function well again.” After nearly 13 years in power, 64-year-old Merkel’s authority has been severely tested since a disappointing result in last year’s federal election. It took her six months to piece together a coalition which has been riven by infighting and suffered losses in regional ballots in Bavaria and, on Sunday, Hesse. The shock decision signals the beginning of the end for a chancellor who put her stamp on Europe and beyond defending moderation and liberal values that have increasingly come under attack. As she prepares to leave the stage, Jair Bolsonaro is set to take office in Brazil, the latest in a series of nationalists gaining power around the world. Merkel insisted she intends to remain in power until the end of her term in 2021. But how long she’s able to hang on as chancellor will depend on who wins the race to succeed her as party leader. If Merkel can install her ally Annegret Kramp-Karrenbauer, that may buy her enough time to leave on her own terms. If it’s an enemy like Friedrich Merz -- pushed aside during the chancellor’s rise to power -- then she may be in trouble. In any case, she said the party’s loss of support was too severe to brush off.
Despite Merkel’s withdrawal, German grand coalition accelerates lurch to the right -German Chancellor Angela Merkel announced Monday that she would step down as the head of the conservative Christian Democratic Union (CDU) in December and would not seek re-election as Chancellor in 2021.The move follows massive losses for the CDU and its partner in the Grand Coalition government, the Social Democratic Party (SPD), in this weekend’s election in Hesse. The coalition parties lost more than 22 percentage points: the CDU 11.3 percent and the SPD 9.8 percent. But Merkel has made clear that despite mounting popular opposition to the government’s right-wing policies, the grand coalition will only intensify its policies of military rearmament, police-state buildup, and ties to the extreme right. Her resignation from the party presidency serves to reorganize and reposition the party leadership in order to push ahead with the policies of militarism, internal armament and social dismantling laid down in the coalition agreement, against the declared will and massive resistance of the working population. Although Merkel has announced her gradual withdrawal from all political offices, she wants to ensure that no concessions are made to voter pressure and mass protests. This policy is supported by the SPD, which also strictly rejects new elections. SPD leader Andrea Nahles said that she had great respect for Merkel’s decision and that she hoped that it would help to improve cooperation inside the government.Like a dictatorial regime, the grand coalition is responding to the growing opposition and its massive rejection by the electorate by disregarding the vote. The media are supporting it by denying the real reasons for the electoral defeats—growing social opposition to militarism, austerity and reaction—and by spreading the narrative that voters turned their backs on the grand coalition because it was quarrelling instead of “implementing the coalition agreement.” But it is precisely the content of the coalition agreement that is provoking resistance against the government—the rapprochement with the far-right Alternative for Germany (AfD), the brutal persecution of refugees, the drastic increase in military spending, the systematic build-up of the police, the continuous social austerity, the dramatic increase in rents, and the privatization of public services.
EU Court Upholds Prosecution Of Woman For Comparing Muhammad's Marriage To A Six-Year-Old Girl To Pedophilia - A new decision from the European Court of Human Rights (ECHR) confirms the all-out assault on free speech that has taken hold of Europe. In a chilling decision, the ECHR upheld a fine levied against an Austrian woman who called Muhammad a pedophile for his arranged marriage with a young girl while in his 50s. The court ruled that such views are not protected by free speech because they violate “the right of others to have their religious feelings protected.” The decision confirms the near complete subjugation of free speech to religious and other views in society. In 2009, the defendant held two seminars entitled “Basic Information on Islam,” in which she compared Muhammad’s marriage to a six-year-old girl, Aisha, to pedophilia. Most accounts put Aisha’s birth around late 613 or early 614. She was six or seven years old when she was married to Muhammad in Mecca and he consummated the marriage when she was reportedly ten. Muhammad was around 50 at the time. For most of us in the free speech community, the differing views of this marriage is immaterial to the right of both sides to be free to state their views. However, complainants have sought to silence critics like this woman by seeking criminal fines. Moreover, I am not particularly interested in how the woman expressed her views since they raise core religious and political values. The court said that she stated that Muhammad “liked to do it with children” and “… A 56-year-old and a six-year-old? … What do we call it, if it is not pedophilia?” That was found to be “disparaging religion” and lower courts upheld the conviction.
Thousands Of Europe-Bound Migrants Have Simply Vanished- AP -- Tens of thousands of migrants undertaking dangerous journeys in search of greener pastures throughout the world are dead or missing, according to an AP tally - nearly doubling estimates from the N's International Organization for Migration (IOM). At least 56,800 migrants worldwide have simply vanished since 2014 by AP's count - eclipsing the IOM's October 1 estimate of around 28,500. This year alone, the IOM has documented over 1,900 deaths in and around the Mediterranean. "A growing number of migrants have drowned, died in deserts or fallen prey to traffickers, leaving their families to wonder what on earth happened to them," reports Fox News. "At the same time, anonymous bodies are filling cemeteries around the world." Focusing on Europe alone, AP found almost 4,900 migrants whose families can't account for their lived ones - nearly half of which are children who have been reported missing to the Red Cross. ... many of those who go missing are uncounted, including boatfuls [sic] of young Tunisians or Algerians and children whose parents lost track of them in the chaos of land border crossings. In all, The Associated Press found nearly 4,900 people whose families say they simply disappeared without a trace in Europe or en route, including more than 2,700 children whose families reported them missing to the Red Cross. -Fox News Meanwhile, efforts to identify those who have died in shipwrecks trying to make it to Europe have fallen flat. Of the 400 or so remains interred in a Tunisian cemetery for unidentified migrants, for example, only one has ever been identified since its opening in 2005. "Their families may think that the person is still alive, or that he'll return one day to visit,". "They don't know that those they await are buried here, in Zarzis, Tunisia."
Eurozone GDP Hits 4 Year Low As Italian Economy Flatlines; Euro Slides - Casting doubt on the ECB's hopes to end QE this year, and certainly hike rates some time in 2019, the euro-area economy unexpectedly grew at the slowest pace in more than four years while a reading of consumer confidence hinted at a more protracted slowdown. Euro area GDP increased only 0.2% in Q3, half the pace of the previous three months and half the 0.4% consensus forecast; it was the slowest growth rate since Q2 2014. Commenting on the latest Eurozone disappointment, Bloomberg economists Jamie Murray and David Powell said that "growth of at least 0.3% a quarter is needed to keep the labor market ticking along and for wage pressure to keep firming. A lasting dip below that rate would call for a delay to the ECB’s tightening cycle." Worse, growth in two of the bloc’s four largest economies - Germany and Italy - both missed, and ground to a halt, while confidence among consumers and businesses in the region fell in October to the lowest in 17 months. It was unclear how this sharp economic slowdown will impact the decisions of the ECB whose president Mario Draghi last week acknowledged last week that the euro area lost some momentum but insisted it isn’t headed for a downturn. As Bloomberg notes, after a stellar 2017, this year’s far weaker performance is largely a consequence of slower exports, which have suffered from protectionist policies, even as domestic demand has held up relatively well for now. To be sure, temporary factors likely had an impact in the poor Q3 data: German output was damped by carmakers’ failure to adapt to new emissions tests which hit auto sales last month, while the recent slowdown in construction - the result of unaffordably high costs - has been brushed off by the Bundesbank which said the growth break “shouldn’t be long-lasting.” Separately, Italy’s economy also stalled in the third quarter on weakness in the industrial sector, prompting Banque Pictet to warn there’s "material risk" of a triple-dip recession. GDP was flat 3Q 18, below consensus expectations of 0.2% growth, and the slowest since 4Q 2014. As a result of the latest miss, Rome’s growth assumptions incorporated in its controversial budget proposal, which sees GDP of 1.5% in 2019, are now even more unattainable, raising risks of fiscal slippages and a continued standoff with the European Commission.
A Bundesbank Economist Has a Radical Plan to Halve Italy’s Debt - Italy’s populist government doesn’t need to ask for money from European partners to halve its debt -- it could tap the large private wealth of its citizens, Bundesbank economist Karsten Wendorff suggested. The radical proposal echoes the debate in Italian media over a potential “wealth tax.” Unlike a tax, however, it wouldn’t directly eat into the patrimony of the country’s families, according to its proponent, who heads the German central bank’s public finance department. “Instead of a European fund that buys Italian government bonds and that is ultimately backed by European taxpayers, a national fund should be created,” Wendorff wrote in the Frankfurter Allgemeine Zeitung Saturday. “This fund would buy Italian government bonds.” Such a fund would be financed by “national solidarity bonds” that Italian households would be obliged to purchase -- for example, to the tune of 20 percent of their net wealth. At such a rate “almost half of Italian government debt could be converted into solidarity bonds.” A Bundesbank spokesman said Wendorff was writing in his personal capacity. Rome on Friday avoided a second rating downgrade in a week as S&P Global Ratings decided only to lower its outlook. The move followed another week of acrimonious clashes with the European Commission and European Central Bank President Mario Draghi over plans to expand spending that flaunt EU rules. Prime Minister Giuseppe Conte told Bloomberg on Wednesday that there’s no “Plan B” for the fiscal program. Italy isn’t a poor country, Wendorff argues, it doesn’t need debt relief nor should it be the “plaything” of financial markets. Yet its government’s plans show that European budget rules are toothless, barring the way to further European solidarity and burden-sharing. The way out from this conundrum: making “Italian taxpayers ultimately liable for the debts of their state.”
How the ECB could help Italy — and why it won’t - Mario Draghi is Italian. Italians should help their country. Mario Draghi is president of the European Central Bank. So the ECB should help Italy. That is the reasoning Italian government officials have shared in recent weeks with investors or visitors rushing to Rome to try and understand the true meaning of the budgetary showdown with the European Commission. If push comes to shove — the government has argued — if Italian yields go too high because markets start panicking, if the country’s debt is downgraded to junk level by rating agencies, if Italian banks are caught in a bind, the ECB has the means to come to the rescue. And faced with the possibility of a serious financial meltdown, it will. The first part of the proposition is true. The second, less so. Italian bonds continued their roller-coaster ride this week with yields on the ten-year maturity at some points topping 3.6%. Meanwhile spreads over German bunds widened to more than 300 basis points, their highest in five years. That compares to 505 at the height of the euro crisis in December 2011. Italian vice prime minister Salvini, the leader of far-right party Lega, who speaks with contempt about the “lords of the spread”, has said that he would start worrying when they reach 400 basis points. But Italian spreads remain unstable, noted Isabelle Mateos y Lago, chief multi-asset strategist at BlackRock, the asset management firm. “At their current level they seem too low if you worry about Italy’s ability to finance itself and about its debt sustainability, but too high if on the other hand you're sanguine about it," she explained. As if to illustrate this, the decision on October 19 by Moody’s, the ratings agency, to avoid throwing Italy’s debt into junk territory and keep its outlook “stable” for now, allowed investors to pause. Bond prices even rallied briefly on the news. There are several ways through which the ECB could help Italy weather a crisis. It can try to push Italian rates down by buying Italian debt on the market as part of its quantitative easing programme; it could also try to help the country’s banks, hit by the new market turmoils while in a still-fragile state after years of slow turnaround. Finally, the ECB also has the option of extending to Italy a never-used facility that would be the closest thing to a fully-fledged eurozone bailout. The problem with buying Italian debt is that the ECB already holds a lot of it, and is winding down the massive bond-buying program it embarked on in March 2015. In theory, the central bank has kept open the possibility of keeping QE going after its scheduled end in December, if it deems it necessary. But the program devised to rescue the eurozone when it seemed on the brink of a breakup was never designed for a specific country.
Yanis Varoufakis: How the Italian Budget Fight Helps Brussels and Salvani, Hurts Europeans and the Eurozone --Ladies and Gentlemen, we are here because Italy is being torn by two destructive forces: Brussels and Salvini. By the failed establishment of Renzi-Merkel-Juncker-Moscovici and by the reckless, racist anti-European Salvini project. Tragically, Brussels and Salvini are working very well together against the interests of Italians in particular and of Europeans in general. Salvini is Brussels’ greatest supporter. Juncker, Merkel, Macron et al are hanging on to power with the argument: “Whatever mistakes we have made, après nous… ” Brussels is Salvini’s greatest supporter. By imposing on Italy rules that guarantee Italy’s stagnation and falling income and prospects for a majority of Italians, they enable Salvini’s sortie into xenophobic populism. Both Brussels and the Lega-5S government are profoundly, and intentionally, wrong.Brussels is wrong to impose on Italy fiscal and banking rules that guarantee Italy’s stagnation – rules that were agreed to by the, now, collapsing Italian establishment. The EU’s revamped fiscal rules are analytically baseless. They are forcing Rome to introduce new austerity at a time when growth has fallen to zero – on the false assumption that it is possible to compute Italy’s growth-neutral structural deficit. If the Italian government were to reduce the deficit to 0.8% (as the rules specify), Italy’s debt-to-GDP ratio would rise, not fall, as the result of the certain fall in GDP that would follow. The Lega-5S government is wrong too. Its budget will not boost growth sufficiently to make a difference to most people, the result being a deficit overshoot without much benefit. Cutting the top tax rates will not boost growth: When the rich receive a tax reduction they either save it or send it to… Luxembourg, Switzerland etc. Even worse, both Brussels and the Lega-5S government know that they are profoundly wrong. Brussels is choosing to be wrong because they are more interested in maintaining a semblance of control over our countries than they are in shared prosperity across Europe. And the Lega-5S government is choosing to be wrong because Salvini and Di Maio are more interested in maintaining their precarious alliance that in the prosperity of the Italian people.
Italy’s Conte ‘confident’ about reaching budget deal with Brussels Italian Prime Minister Giuseppe Conte said Thursday that he is “confident” about reaching a deal with the European Commission in a row over Rome’s new budgetary plans. However, he also stressed the need to spend more money to tackle “social and economic emergencies” in Italy. “This government is an expression of demands for change, and it is natural that European markets and institutions want to understand in which direction we intend to move,” Conte told Italian newspaper Il Corriere della Sera in an interview. “But I am confident that in our discussions with the European Commission, we will be able to demonstrate the goodness of a growth manoeuvre such as the one we have planned in order to change Italy,” he added. Italy’s populist government intends to push its budget deficit to around 2.4 percent of GDP to meet campaign pledges to introduce a new flat tax and a basic income for the poor. In an unprecedented move, the Commission last week issued a “negative opinion” on the plans, and gave Rome three weeks to present an alternative budget. Brussels wants Rome to keep its deficit under 1.6 percent of GDP to tackle its public debt, which is currently the second highest in the EU, after Greece, at around 131 percent of economic output. “In my contacts [with the Commission] I register openness and a willingness to dialogue,” Conte said. “We believe that our deficit objective is the correct one to guarantee the implementation of the necessary measures for the country … The economic slowdown and the social and economic emergencies that Italy is facing require us to continue along this path.” Conte said he plans to meet Commission President Jean-Claude Juncker “very soon” to continue discussions.’
Australia is the latest country whose banks are planning to abandon London as Brexit looms Australian banks with UK operations are beginning to put in motion plans to increase their presence in European financial centres outside the UK as the possibility of a no-deal Brexit looms large in their thoughts. Australia's largest bank by assets, Commonwealth Bank of Australia (CBA), has set in motion plans to base around 50 staff in the Dutch capital, Amsterdam, and has applied for a banking licence in the country. Those staff will be focused on the bank's European "passporting" operations — the system by which banks are able to operate across EU borders while possessing just a single banking licence. The financial passport is linked strongly to membership of the European Single Market, and the UK will lose its passporting rights as a result. Commonwealth Bank said on Monday that its plan to base staff in Amsterdam is being put in place "to ensure we can continue to provide the best service to our customers, while limiting disruption to existing business and our employees.
Jeremy Corbyn urged to back amendment for second Brexit vote - A new cross-party group of MPs plans to thwart Brexit by swinging the Commons behind a second referendum as soon as Theresa May requests parliament’s backing for a deal with the EU, as pressure mounts on party leaders to put the issue back to the people.Tory, Labour and SNP members say they will table a “killer” amendment in favour of a public vote. The amendment, if passed, will state that acceptance of the prime minister’s deal must be dependent on a public vote taking place beforehand, in which people would be offered the choice of leaving on the terms of that deal, or staying in the EU.The group, led by the Tory MP and former GP Sarah Wollaston, is determined to maintain the momentum from last weekend’s march through London by 700,000 people in favour of a people’s vote, by showing remainers that MPs in all the main parties are prepared to fight for them in parliament.Wollaston is working with a team of two other GPs – the Tory MP Phillip Lee and Labour’s Paul Williams – and the SNP’s Philippa Whitford, who is a surgeon. They are particularly concerned by the effect Brexit will have on the NHS but warn it will also be a catastrophe for the economy and jobs. They believe the move has the backing of more than 100 MPs, and that they have a chance of pushing the amendment through if the Labour leadership shifts position and whips its MPs in favour of a second vote.
Final Say: One million people sign The Independent’s petition for new Brexit vote One million people have now signed The Independent’s petition calling for the British public to be given a Final Say on Brexit in a new referendum.The petition reached the milestone on Saturday afternoon, just three months after it was launched and amid deadlock in negotiations with Brussels and growing concern over a looming no-deal Brexit or the possibility of a deal that does not prove to be popular with the public..Theresa May has refused to contemplate a new referendum – but the matter may eventually be taken out of her hands, with odds on the prime minister finding any deal parliament can approve dwindling. It was just one week ago that almost 700,000 people took to the streets of London for the People’s Vote and The Independent March for the Future, the biggest mass-demonstration the UK has seen since the Iraq War.The Independent launched its Final Say campaign to secure a vote on the outcome of Brexit in July, with names on the petition quickly soaring into the hundreds of thousands. Labour MP Chuka Umunna told The Independent on Saturday: “Last week over 700,000 people from all over the country and from all walks of life took to the streets to demand a say over the biggest decision this country faces since the Second World War. This week sees The Independent’s petition for a Final Say reach over one million signatures.
Brexit: the Efta/EEA option revisited - Last week, Booker wrote that the core reason why we have been making such an unholy mess of Brexit is how little our politicians seem to understand how the strictly rules-based EU system works. In this week's column (no link yet), he remarks that this was confirmed in spades by a report of last Tuesday's "stormy" Cabinet meeting at which ministers apparently "greeted with disbelief" the news that the Government is planning to charter ships to ensure that, post-Brexit, we can continue to import the 30 percent of all our food which we import from other EU countries. This is something I picked up on the blog last Wednesday and Booker takes up the theme and runs with it, Most of the food imports, he notes, arrives via the hyper-efficient. round-the-clock roll-o roll-off ferry service which carries 2.5 million trucks a year between Calais and Dover. But when we drop out of the Single Market, making inevitable border controls on all our frontiers with the EU (much more than just customs controls), this service will slow to only a trickle. Our politicians, says Booker, should have known this long ago. He has, after all, been writing about this since early last year. Apparently, the Government's idea is that, with the end of the roll-on roll-off ferry service, all these imports in its newly hired ships will have to be diverted to other ports. So most of this food will have to be imported in shipping containers, rather than in trucks which can be driven straight on and off ferries with the minimum of delay. Not only does container-shipping take longer (with loads often having to be checked in 24 hours before sailing), there will be time-consuming border inspections, adding to the inevitable delays. Perishable foods, from dairy products to lettuces and tomatoes from Spain, will lose days from their allocated shelf-lives, reducing marketability and value.
That also assumes that there will be sufficient numbers of the special refrigerated containers (known as reefers) to take the extra traffic, and that low value, high volume products can bear the extra shipping costs, and the inspection and handling fees.
This budget may not survive the coming Brexit hurricane Imagine being the chief financial officer of a corporation whose headquarters is squarely in the path of a high-category hurricane. You are delivering your annual statement to the principal shareholders, many of whom think it would be a good idea to get out of the way of the whirlwind. Others, mysteriously, dismiss the strong advice of “expert” meteorologists and insist that the hurricane will somehow be good for the business, liberating its full potential as it tears the building from its very foundations. Yet another group – the Jeremy and John Consortium – thinks that the battering storm will enable them to transform the business and collectivise its assets. This is pretty much what it will be like for Philip Hammond when he stands up on Monday to deliver his third budget, the last before Hurricane Brexit hits the United Kingdom on 29 March. By definition, the chancellor of the day is always the cabinet’s party-pooper, the minister whose task it is to contain the spending ambitions of his departmental colleagues. But there is a special loathing reserved for Hammond. Many of his fellow cabinet ministers seethe about him in private with a ferocity that is simply not warranted by his love of Microsoft Excel spreadsheets and aversion to political showboating. No: senior Tories hate Hammond because he challenges their magical thinking about Brexit, their faith that our departure from the EU will be a triumph of the will if we dare to embrace the power of positive thinking. Tediously, laboriously, but entirely correctly, the chancellor maintains that bravado and conviction have nothing to do with it: Brexit will be a highly technical, operational matter, not an exercise in pageantry and rightwing performance art. Still, he is obliged, ex officio, not to panic and to deliver a budget that as far as possible cleaves to the rules of normal service. As ever, a series of measures has been heavily trailed before his speech: additional defence spending, a fresh box of sticking plasters for universal credit, help for rough sleepers, money for broadband, a boost for the UK’s beleaguered high streets, an extra £420m for potholes and – pure bathos – the announcement of a review to enable couples to be married in the open air. Next Conservative slogan: Britain Just Got Wetter.
UK chancellor eyes Brexit boost — as long as there’s a deal The Brexit upside is just around the corner, Chancellor Philip Hammond said Monday — as long as the divorce is a smooth one. In a thinly veiled appeal to restive Conservative MPs to get behind Prime Minister Theresa May’s Brexit strategy, Hammond used his final annual budget announcement before the U.K. leaves the European Union to say that securing a deal with Brussels would mean more money for government spending. The budget marks a key test of Prime Minister Theresa May’s brittle authority as she enters the final few weeks in which it is still possible for her to secure agreement with the EU27, avoiding a disorderly exit and economic disruption. Conservative Brexiteer MPs, concerned that the prime minister’s Brexit plan will bind the U.K. too closely to EU rules, had been reported to be planning to vote down the budget but now look very unlikely to do so when the House of Commons votes on the economic plan on Thursday. Likewise May’s Northern Irish backers, the Democratic Unionist Party, who had threatened withdraw support over the budget in order to underline their leverage in the final stages of negotiations with Brussels, also appear placated. Hammond singled out Northern Ireland for investment with £350 million set aside for the Belfast region, among other measures. The party’s Westminster leader, Nigel Dodds, tweeted that the DUP’s confidence-and-supply agreement with the government is “delivering again.” In a sign of a change in the U.K.’s political weather, the chancellor used a surprise boost in tax receipts to spend more on public services, the vast bulk of which will go to the National Health Service, rather than using the windfall to balance the books. In a muted budget statement, Hammond said that “the era of austerity is finally coming to an end,” pledging increased investment in the years ahead. With Brexit overshadowing proceedings, as it has done since the 2016 EU referendum, Hammond did not miss the opportunity to underline the upcoming choice the government is keen to impress upon MPs: Back whatever deal the prime minister can agree with Brussels or leave without one. If there is a Brexit deal, Hammond said, business investment would increase as a result of renewed certainty about the post-Brexit economic landscape. He would also be able to release fiscal reserves held back to pay for government interventions in case the U.K. leaves the EU without a deal.
Brexit Stress Rises: Pound Weakens on S&P Crashout Warning, Norway Nixes “Norway,” Migrant Status at Risk -- The UK press has more than a few stories tonight on how things will come unglued in the event of a disorderly Brexit. S&P gave a warning that is frankly mild in light of the disruption of crash out as May’s efforts to open up the “Norway” option predictably failed and the Home Office looked utterly at sea regarding a disorderly Brexit. More on that shortly. One positive development is the EU has apparently decided that being bloody-minded about forcing derivatives entered into by EU nationals needed to come to EU clearinghouses in the event of a crash out might cause enough problems in the short term so as to undermine the long-term commercial benefits. But the EU is is cooperating only to the degree absolutely necessary. From the Financial Times:Brussels has responded to financial industry calls for continued access to London’s capital markets by providing reassurance that EU groups will temporarily be able to use crucial derivatives clearing services in the UK even after a no-deal Brexit… Mr [Valdis] Dombrovskis, who is responsible for financial regulation, told the Financial Times that the relief, which would allow EU banks and companies to continue using UK-based clearing houses to process derivatives trades if Brexit negotiations fail, would be strictly short term… S&P warns of crash out risk. The big news on the Brexit front, as far as Mr. Market was concerned, was S&P clearing its throat about a disorderly Brexit. The S&P report said:
- Unemployment would rise from current all-time low of 4% to 7.4% by 2020 – a rate last seen in the aftermath of the financial crisis;
- house prices would likely fall by 10% over two years;
- household incomes would be £2,700 lower a year after leaving without a deal;
- inflation would rise, peaking at 4.7% in mid-2019;
- London office prices could fall by 20% over two to three years, similar to the decline following the 2008 financial crash….
S&P said leaving the EU without a deal would make matters much worse, pushing the UK into a moderate recession lasting between a year and 15 months, with GDP contracting by 1.2% in 2019 and 1.5% in 2020. After that, the economy would return to growth, it said, though the pace of growth would be moderate. The pound weakened to 1.27 dollars. The GDP contraction estimate sounds light, given the disruption to food supplies and the greatly reduced production from UK plants that are part of international manufacturing supply chains. Richard North agrees, elaborating on his website: …this brings another day closer to a “no deal” Brexit, which the credit rating agency Standard & Poor’s is now predicting could tip the UK into recession. In my opinion, it makes sense to take a pessimistic view and then to double down on that to expect far worse than the high-level pundits are predicting. And the reason for this is that the trading infrastructure of the UK is far more fragile than we are led to believe, and far less capable of withstanding the shocks of a “no deal” Brexit than is generally assumed.
UK's Brexit minister says he expects a deal by Nov 21, sterling rises - The U.K.'s Brexit secretary, Dominic Raab, told lawmakers Wednesday that he expects the Brexit deal to be finalized by November 21. Sterling surged following the news and was up more than 0.7 percent versus the dollar in afternoon trade Wednesday. Raab stated the date in a letter to Hilary Benn, the chair of Parliament's Brexit committee. The letter, dated October 24, further stated that "the end is now firmly in sight and, while obstacles remain, it cannot be beyond us to navigate them."
Brexit: expecting the worst - To absolutely no one's surprise, Norwegian prime minister Erna Solberg yesterday dismissed the so-called "Norway then Canada" option. This came as Mrs May attended the Northern Future Forum in Oslo, only to be told by Solberg said that for Britain to "enter into an organisation which you're leaving is a little bit difficult for the rest of us".The only possible surprise here could be is that this ill-conceived idea has had so much traction of late, after being promoted by Tory MP Nick Boles. It was readily apparent to anyone who had given it the slightest thought that it was a non-starter. Nevertheless, some argue that at least it has had the merit of raising the profile of the Efta/EEA (aka Norway) option, but the net outcome is that it has given Mrs May yet another opportunity to reject the concept. Thus she says: "The existing relationship that Norway has with the EU is one that has elements that don't, wouldn't, deliver on that vote of the British people", walking away yet again from the only option that can deliver a workable Brexit. Unless there is something waiting in the wings, of which we are completely unaware, this brings another day closer to a "no deal" Brexit, which the credit rating agency Standard & Poor's is now predicting could tip the UK into recession. Why this is even news is only to be imagined. I was pointing out on this blog 18 months ago that this could be the outcome, suggesting that a botched Brexit could rival the Great Depression in its effects on the UK economy. What is different, I suppose, is the S&P is issuing a warning to investors that they should no longer ignore the danger of a "no deal", adding to the growing weight of sentiment which is finding it harder by the day to see any other outcome to the Brexit talks. Even then, the agency is being more optimistic than I would allow. It argues that the UK would only experience a "moderate" recession lasting four to five quarters. This, it says, would shrink the world's fifth-largest economy by 1.2 percent in 2019 and by a further 1.5 percent in 2020.
IATA issues alarm about Brexit impact on global supply chains The International Air Transport Association (IATA) has called for urgent action by the UK and the European Union to put in place contingency planning for the continuation of air services in the event of a “no-deal Brexit,” and to move much faster to bring certainty to three critical air transport issues: •The uninterrupted continuation of air connectivity; •The framework for regulating safety and security; and •The policies and processes needed for efficient border management “These are the most critical areas because there are no fallback agreements such as the WTO framework available in a ‘no-deal’ Brexit scenario, said Alexandre de Juniac, IATA’s Director General and CEO. He added that absent any contingency planning being made transparent to the industry, the risks of not addressing these issues could mean “chaos” for interrupted supply chains. “With less than six months to go, we have little more certainty than we did in June 2016,” said de Juniac. The call for urgent attention to air transport issues in Brexit follows the release of an IATA-commissioned Study of the effects of the United Kingdom leaving the European Union on airlines flying to and from the UK. Chuck Clowdis, managing director of the consulting firm Trans-Logistics Group, Inc., told SCMR in an interview that he shares the view that the situation could be dire. “It is critical that the UK and the EU fully address the importance of a codified air transport protocol in discussions of any Brexit deal,” he said. “The smooth, uninterrupted, safe, orderly border management are vital to a functioning air transport system. To overlook or give short shrift to these areas is perilous to the global economy.”
Employers must check EU workers’ status under no-deal Brexit, says immigration minister Employers will have to check any EU workers living in Britain have a right to be in the country under "a no-deal" Brexit. Immigration minister Caroline Nokes made the announcement, telling firms they would be expected to carry out "adequately rigorous checks". She gave no further clarity on what the government would expect of business to ensure all workers are in the UK legitimately. If there is no Brexit deal, EU citizens already living in the UK will be allowed to stay by applying for "settled status". Sign here to force leaders to debate on TV Thousands have signed our petition for an Independent Leaders' Commission to organise election debates - have you? The scheme had a trial opening and will extend to all EU citizens by March 2019, closing in June 2021. Ms Nokes could not say how EU citizens who wait until the end of that period to apply could be differentiated by employers and admitted in some cases it could be "almost impossible". "We want as many people as possible to go through the settled status scheme as quickly and as efficiently as possible," she told the Commons home affairs select committee on Tuesday. "We want to make sure we don't discriminate against them, which will indeed pose a challenge to government and indeed to employers in differentiating between those two groups of people." The committee's chairwoman, Labour MP Yvette Cooper, called it a "system that in practice is unworkable because employers can't implement it".
Brexit: No 10 denies financial services deal has been reached - Downing Street has quashed speculation that a Brexit agreement has been reached on financial services, after an overnight report that a tentative deal had been struck caused the pound to soar briefly. No 10 sources said no deal had been agreed, although the government added in a statement that “we continue to make good progress reaching new arrangements for financial services”. The remarks came after reports that the two sides had agreed to give UK banks access to European markets as long as British regulation remained broadly equivalent to the EU’s. London is seen as the world’s leader in financial services, mainly due to language, time zone and a business-friendly regulatory framework. It is the world’s biggest market for foreign exchange trading, and the second largest for fund management. London’s global prominence increased following Margaret Thatcher’s 'Big Bang' reforms in 1986, which relaxed regulations in the City. The UK’s capital received another boost when Wall Street firms had to comply with the Sarbanes-Oxley Act of 2002, passed after the collapse of Enron to strengthen corporate governance, which prompted many foreign firms to list on the London Stock Exchange instead. The English language gives London an edge over other European financial hubs such as Frankfurt and Paris. The time zone also helps, as the City's business hours overlap those of Asia, America and the Middle East. Good transport links and a vibrant culture are also commonly cited as making London attractive to foreign banks and other firms. The question is whether London can retain its crown after the UK’s planned departure from the EU on 29 March 2019.
Michel Barnier under mounting pressure to compromise with Britain over Irish Brexit backstop - Michel Barnier was under mounting pressure to agree to a fresh compromise with Britain over the Irish backstop, senior EU sources told The Telegraph on Wednesday night, as Dominic Raab said he expects a divorce deal with the EU by November 21. The Brexit Secretary’s optimistic prediction in a letter to MPs came despite both sides being locked in an apparently intractable impasse over the so-called ‘Irish backstop’ to guarantee no return to a hard border in Ireland. Technical level talks resumed in Brussels this week between Olly Robbins, Theresa May’s Europe adviser, and Sabine Weyand, Mr Barnier’s deputy, as both sides tried to plot a way through the deadlock over Ireland.
BREXIT BOMBSHELL: EU won’t offer UK Irish backstop compromise because they don’t TRUST May Brexit talks have made little to no progress since the Prime Minister agreed to Brussels demand for the backstop insurance policy to be included in the withdrawal agreement. Under the current EU offer, Northern Ireland would be locked in the EU’s customs union and its single market for goods. This has caused uproar amongst Brexiteers and the Democratic Unionist Party, whose 10 Northern Irish MPs prop up the Prime Minister’s minority Government with a supply and confidence agreement. Critics have accused the EU of attempting to “annex” Northern Ireland from the rest of Great Britain, which prompted Mrs May to declare the backstop acceptable to “no prime minister”. But it will not be Brussels who are budging or offering a compromise on the backstop despite efforts to “de-dramatise” the issue by EU negotiator Michel Barnier, according to a report by Andrew Duff, a former MEP and fellow at the European Policy Centre. In his ‘Brexit: Time to compromise’ paper, Mr Duff cites an EU official close to the negotiations who raises concerns over whether Brussels can trust Mrs May’s Government without a legally operable backstop in the withdrawal agreement. The EU official said: “Put simply, it’s a question of trust. “Nobody trusts the May Government to deliver.”
US attacks UK plan for digital services tax on tech giants The US has hit back against a UK plan to impose a new tax on sales by technology giants. US political leaders and business groups say the proposal would violate tax agreements by targeting US firms. They warned the tax could spark US retaliation and hurt prospects for a US-UK trade deal. In a statement on Wednesday, Representative Kevin Brady, a Republican from Texas, called the measure "troubling". "If the United Kingdom or other countries proceed, that will prompt a review of our US tax and regulatory approach to determine what actions are appropriate to ensure a level playing field in global markets," said Mr Brady, who helped shepherd US tax cuts through Congress last year. His statement echoed comments last week by US Treasury Secretary Steven Mnuchin, who voiced "strong concern" about different countries' efforts to develop digital sales tax. A slew of business groups - including the US Chamber of Commerce and the US Council for International Business - have also come out against the UK plan. If enacted, the tax measure could "complicate the United Kingdom's push for deeper US-UK trade relations", said Rufus Yerxa, president of the National Foreign Trade Council.
Downing Street yet to decide on free movement of EU citizens in case of no-deal No 10 has admitted it has yet to decide whether free movement of EU citizens will continue after a no-deal Brexit, with less than five months until departure day. The “work is ongoing”, Theresa May’s spokesman said, after the home secretary and a senior Home Office civil servant contradicted each other within 24 hours. Sajid Javid said there would have to be “sensible transition period” during which new EU arrivals could continue to work – one day after his official said free movement would be “turned off”.Asked which was correct, the spokesman said: “The work is ongoing and we will set out the details in due course.” Privately, ministers are believed to accept that it is inevitable that free movement would have to continue, because it will be impossible to quickly bring down the shutters. Yet, on Tuesday, Shona Dunn, the Home Office’s second permanent secretary, told MPs: “If [a no-deal Brexit] were the case, the prime minister has been very clear that she would want free movement turned off at that point in time."
EU fishing row threatens to snag May’s customs union plan Theresa May is facing fresh opposition from EU countries that have large fishing communities to her demands for an agreement before Brexit day on a temporary customs union to solve the Irish border problem. A number of key member states are expected to oppose a commitment to an all-UK customs deal on the basis that negotiations are yet to start on what access European fishing boats will have to British waters after Brexit. The EU has repeatedly said it will only allow British seafood exporters tariff- and quota-free access to the European market in return for an agreement that its fishing fleets can continue to operate around the UK. Agreeing to a customs union in the withdrawal agreement would mean the EU had ceded its leverage by providing tariff-free trade on seafood into the internal market without reciprocal guarantees on access to British waters. The issue has been discussed by the EU’s chief negotiator, Michel Barnier, with ministers from the member states. The mooted extension to the transition period is a new idea being put forward by the EU to help Theresa May square the circle created by the written agreement last December and the draft withdrawal agreement in March. That committed the UK and the EU to ensuring there was no divergence between Northern Ireland and the Republic of Ireland. But it also, after an intervention by the Democratic Unionist party, committed the UK (not the EU) not to have any trading differences between Northern Ireland and Great Britain. The problem is that these are two irreconcilable agreements. They also impinge on the legally binding Good Friday agreement, which brought peace to Northern Ireland and in some senses pooled sovereignty of Northern Ireland giving people a birthright to be Irish or British or both.
Barnier rejects May’s financial deal – EU ‘will control’ UK’s market access Government sources claim British and European Union negotiators have reached a deal on all aspects on the future partnership on series and the exchange of data. Under the agreement, UK financial services firms would be guaranteed access to European markets as long as British financial regulations remained aligned with Europe. In what would be considered a victory to the Prime Minister, reports said neither would be able to deny access to their markets without first consulting an independent arbitration panel and providing a notice period longer than the 30 days currently in place. But Mr Barnier warned Mrs May that the EU will never give up its right to autonomously deny access to its financial markets. Writing on Twitter, the EU negotiator said: “The EU may grant and withdraw equivalence in some financial services autonomously. “As with other third countries, EU is ready to have close regulatory dialogue with the UK in full respect for autonomy of both parties.” News of the apparent deal broke after days of negotiating between Mrs May’s EU sherpa Oliver Robbins and European Commission officials in Brussels. The so-called “equivalence” arrangement is often used by the EU, but doesn’t extend as far as Britain’s current wishes.
The British and Irish are fighting again — Brexit has poisoned U.K.-Ireland relations. Tensions long-buried by close economic relations and peace in Northern Ireland have risen to the surface once again, infecting Britain’s divorce negotiations with the European Union just as they reach their final stages. Diplomatic neglect and personality clashes have played their part, with the two sides at times descending into undignified sniping, barely-concealed irritation and open hostility, reaching all the way up to Irish Taoiseach (prime minister) Leo Varadkar and the Cabinet table in Westminster. The breakdown not only threatens to damage the longer-term diplomatic relationship between London and Dublin, but also risks seeping into the peace process north of the border with far more profound consequences for Britain, Ireland and the rest of Europe as it continues to snare up the U.K.’s withdrawal from the EU. “Britain has never understood Ireland, but we can’t just wish this away,” said Jonathan Powell, Tony Blair’s former chief of staff and a key figure in the 1998 peace agreement. “If this goes on, we could face really quite a serious problem. If we don’t start paying attention, we could get into trouble.” At the heart of the crisis is Brexit — but it is not the only issue. In the last two years, three seismic events have combined to shake Northern Ireland out of its relative normality. Brexit was the first shock, resurrecting old fears of isolation on both sides of the sectarian divide. Then, in January 2017, the power sharing arrangement, which saw power devolved to the Northern Ireland assembly, collapsed over allegations of corruption in the Democratic Unionist Party. U.K. Prime Minister Theresa May then called a snap election that would strip away her majority, pushing her into the arms of the DUP in an electoral pact that was seen in Dublin and much of Northern Ireland as a betrayal because it undermined any semblance of British neutrality. “Individually each of these events would be bad enough,” said Labour MP Conor McGinn, who grew up in Northern Ireland during the Troubles. “Together they’re toxic.”
Britain Knew of Secret Khashoggi Plot, Begged Saudis Not to Act: Report — British media are reporting that the GCHQ, the British version of the NSA, had intercepts giving them three weeks of advanced notice before the death of Jamal Khashoggi that a plot was in the offing.At the time, the plot was believed to be a kidnapping plot to force Khashoggi to return to Saudi Arabia. This is in keeping with some of the Saudi preliminary reports, which suggest the “kill team” told Khashoggi this is what was going to happen, before ultimately killing him.The intercepts suggested the Saudis were concerned about some forthcoming Khashoggi reports on the war in Yemen, and that was what precipitated the plot. Britain apparently “begged” the Saudis not to follow through, but to no avail.Britain’s intercepts also apparently attributed the plot to a member of the “royal circle” of the Saudis, though they concede they don’t know for sure if this is the crown prince, as would generally be assumed. Legally, it’s unclear if Britain was obliged to tell Khashoggi all of this. It will raise concerns again about the US, who did have a legal obligation to warn Khashoggi, a permanent resident, but chose not to do so.
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