No. The Fed Was Wrong to Raise Interest Rates - Brad DeLong --I see this argument a bunch of places. Here it is from the sharp Felix Salmon. But I think it is wrong: Felix Salmon: Why the Fed Was Right to Hike: "When interest rates stay very low for an extended period of time, that has the effect of creating asset bubbles like the credit and housing boom of the mid-2000s.... If your stocks, bonds and real estate holdings were worth the same today, relative to GDP, that they were worth in 1995, they would have to crash in value by 33%, or $43 trillion. That's more than enough to trigger another financial crisis... ..."Asset bubbles have been a far greater source of economic disruption over the past 25 years than any increase in inflation," says David Kelly of JPMorgan Funds. "While the Fed has kept policy tight enough to restrain general inflation, this has not been enough to slow a too-fast increase in asset prices." The only way to prevent another catastrophic asset bubble is to allow interest rates to revert to something much more normal. That's what the Fed is doing today. The rate hike also gives the Fed some much-needed ammunition for when the next recession arrives. Cutting rates to zero is easy; then you run into difficulties. By hiking rates, the Fed also does what it said it was going to do. Making sure that the Fed delivers on its promises is the best way for Powell to preserve the Fed's credibility in the face of onslaughts from the president... First, the 2%/year inflation target is simply inappropriate. It runs much too great a risk of cxrashing again into the ZLB when the next recession comes. Second, with respect to ”preserving the Fed’s credibility”: When the Fed said that it was going to keep raising interest rates, that was back when it thought the stock market would now be significantly higher than it is. You can preserve a reputation for mulish stubbornness by being a stubborn mule that fails to process and react to new information. But why would you want a reputation for mulish stubbornness that fails to process and react to new information? Is there some reason that you should be an idiot in order to gain a reputation for acting like an idiot that I am not seeing?Third, the idea that you should raise interest rates now so you can cut more in the future—there is more than a superficial similarity to the argument that you should let the others run a lap before you start running at all, because then you will be fresher and so can run faster and so win the race. People should be prohibited from making this argument unless they can posit some mechanism for it. Yet Felix does not posit a mechanism. And I have never seen a plausible mechanism set out and defended. I ask: show me the model; I am met with what I can only interpret as declarations of intellectual bankruptcy.
The Fed’s Risky Plan to Boost Unemployment - Narayana Kocherlakota - The U.S. Federal Reserve appears to be planning a risky endeavor: Sometime in the first half of the next decade, it intends to slow the economy enough to increase unemployment by about 1.4 million people — all in the name of reducing inflation by around a tenth of one percent. I can’t help but wonder whether the costs will outweigh the benefits. Earlier today, the policy-making Federal Open Market Committee released its latest projections for variables such as unemployment and gross domestic product. These are particularly interesting because they assume appropriate monetary policy: They show not just where Fed officials think the economy will go, but where they intend to take it. The projections show that officials expect the unemployment rate to fall to 3.5 percent in 2019, from the current 3.7 percent — already the lowest in almost five decades. After that, they expect the rate to rise back to 4.4 percent — which, given a labor force of 160 million, would add up to about 1.4 million extra unemployed people. To achieve such an increase in unemployment, the Fed will have to hit the brakes hard enough to bring economic growth below its long-run normal pace, which officials currently estimate at 1.9 percent a year. Yet the central bank isn’t saying exactly when that will happen. Its forecasts for the next two years are at or above 1.9 percent, with a slight slowing in 2021. All we know is that most of the adjustment will have to come sometime after 2021. It’s hard to know exactly how much the Fed will need to slow the economy to increase the unemployment rate by almost one percentage point. A rough guess is that it would have to shave about 2 percent off cumulative growth in real GDP. So if the Fed wanted to accomplish the unemployment increase in one year, it would have to shrink the economy by 0.1 percent in that year. If it wanted to take four years, it should hold annual growth to 1.4 percent. All this assumes that the economy returns to normal growth after the target is hit. This seems like a perilous plan. After all, it might not be easy to increase unemployment to 4.4 percent without overshooting to 5 percent or even 7 percent. So why would the Fed take such a risk? Because it wants to hit its 2-percent target for inflation. Its economic models suggest that, if the unemployment rate stays at 3.5 percent, inflation will remain above 2 percent for years to come. Specifically, the models predict that inflation would be around 2.1 percent to 2.2 percent. In other words, the Fed is planning to eliminate over a million jobs — and put millions more at risk — in order to avoid a tiny deviation from its inflation target. I’ll leave it for readers to judge whether this is a desirable gamble.
Fed's Kaplan Sets A New Message - Says Fed Should Wait A Couple Of Quarters Before Hiking --- Dallas Fed President Robert Kaplan just took his dovishness to a whole new level on Thursday when he set the Fed's "new message" - in the words of Nomura's Charlie McElligott - saying during a Bloomberg TV interview that he believes the Fed should hold off on its next interest-rate hike until the second half of 2019 - echoing the house view from Goldman Sachs, which now sees just 1.2 (yes, one point two) rate hikes in 2019. Asked whether the year-end volatility in markets had impacted his view on monetary policy following the Fed's not-quite-dovish-enough policy outlook from the December meeting, Kaplan said that the Fed must be "very vigilant" about how its QE unwind is impacting markets and the economy...and be ready to "make adjustments" to its plans when needed. "This is unprecedented. There's no textbook for exiting quantitative easing...we should be very vigilant and be very open-minded to making adjustments in this balance sheet runoff if we need to." And in a comment that we imagine delighted President Trump, Kaplan repudiated Jerome Powell's infamous comment that the Fed's balance sheet unwind would be on "autopilot", saying he would be open to making adjustments in the pace or size of the roll-off of the Treasurys and mortgage bonds on the central bank's balance sheet. Asked for his view about what year-end volatility explosion says about the underlying global economy, Kaplan cited three issues that have given him reason for pause: slowing global growth - adding that the US likely won't be immune to a slowdown in China and elsewhere - weakness in interest-rate sensitive industries, and notably tighter financial conditions. "Let me answer it this way: There are three big issues that I see reflected in the markets tah are consistent with what I'm seeing in the economy: Global growth decelerating...interest-sensitive industries are showing weakness...and financial conditions have tightened and credit spreads have widened. Those three issues are affecting the markets but they're also affecting my thinking on monetary policy. It's going to take some time to see the depth and breadth of those three issues." Because of all this, if Kaplan had his druthers, the Fed wouldn't hike rates again until the second half of 2019.
Wolf Richter: Markets Are in a Tizzy. So What Will the Fed Do? - Markets are in a tizzy. They’re finally reacting to the Fed’s rate-hike cycle, the slowest rate-hike cycle in history. It took three years to nudge up the effective federal funds rate from near zero to 2.40% now. Throughout, the Fed has communicated its goals of “removing accommodation” from the “financial conditions” in the markets — thus tightening “financial conditions” that had become loosey-goosey during years of zero-interest-rate policy and QE. And suddenly, financial conditions in the markets started tightening in October. So let’s see where we are — and how this might impact the Fed’s decisions. “Financial conditions” is a key term in the Fed’s official communications. For example, in the minutes from the November FOMC meeting, the most recent available, the term was used five times:
- Once, when “participants” discussed the interest the Fed pays banks on “excess reserves” on deposit at the Fed. This rate, it said, provided “good control of short-term money market rates in a variety of market conditions and effective transmission of those rates to broader financial conditions.”
- Two times, when it discussed financial conditions directly: “Participants observed that financial conditions tightened over the intermeeting period, as equity prices declined, longer-term yields and borrowing costs for most sectors increased, and the foreign exchange value of the dollar rose. Despite these developments, a number of participants judged that financial conditions remained accommodative relative to historical norms.”
- Once, when it discussed that its “policy was not on a preset course,” and that it could change its policy in one direction or the other, depending on the incoming data, including “the recent tightening in financial conditions….”
- And one more time, to make sure everyone gets it: “Financial conditions, although somewhat tighter than at the time of the September FOMC meeting, had stayed accommodative overall….”
These “financial conditions” indicate how easy and cheap, or how hard and expensive it is for borrowers to borrow. Tightening financial conditions mean that investors are reluctant to fund high-risk companies. This shows up, for example, as the difference (the “spread” or risk premium) between the yields of risky corporate bonds and “risk-free” Treasury securities. In the riskiest category of corporate bonds, CCC-and-below-rated bonds, just above D for default, yields started surging in October 2018, after being somnolent through the entire rate hike cycle. The average yield surged in three months from 9.6% at the beginning of October to 13.58% yesterday at the close. In other words, for these companies, the cost of borrowing over those three months has surged by 41%.
Forget Fed Hikes, Traders Are Now Fully Pricing a Cut by April 2020 - Bond traders are showing little sign of stepping back from their fight with the Federal Reserve over the path of interest rates and the market is now positioned for cuts on the horizon. Just over a month ago the market was pointing to a quarter-point hike in 2019, but it’s now factoring in a more than 50 percent chance of a reduction this year. That’s in stark contrast to the median projection of two increases projected by Fed officials last month. On top of that, traders are now fully pricing in a cut by April 2020. The rate on the June 2020 U.S. dollar overnight index swap, which was close to 3 percent less than two months ago, dropped as low as 2.04 percent on Thursday -- suggesting a benchmark rate more than 30 basis points below the current effective fed funds rate by the middle of 2020.The latest move was fueled by a global slide in riskier assets and data showing the steepest drop in U.S. manufacturing activity since October 2008. Add to that a ‘flash crash’ move in the yen, gridlock over the U.S. government shutdown and a warning from iPhone maker Apple Inc., and traders have plenty of reasons to reappraise the Fed’s path. The swiftness of the recent shift in rates markets has raised some eyebrows, however. Boris Rjavinski, a strategist at Wells Fargo & Co., says that Chairman Jerome Powell and other members of the Federal Open Market Committee are still likely to press on with hikes in March and September and that the market will shift back to pricing in tightening.
Trump’s growing anger with Fed chief poses market risks - President Trump would likely find himself in murky legal waters if he attempts to dismiss Federal Reserve Chairman Jerome Powell, but experts say the bigger concern is that any move on that front would ignite a chain of calamities that could derail the global economy and financial markets. Trump has frequently criticized Powell and the Fed for raising interest rates, and the president has reportedly polled advisers on whether to fire his hand-picked chairman. While it’s uncertain whether Trump could remove Powell, making a drastic move against the central bank’s chief policymaker could unleash economic chaos at a time when the president prepares to seek reelection. An attempt to fire Powell would be an unprecedented test of the Fed’s independence and the laws meant to protect the central bank from politics in Washington. The move could also trigger a staggering stock market meltdown, spark intense congressional backlash and damage the country’s role as the world’s largest economy. “If he were to actually be stupid enough to do it, it would trigger a massive reaction from financial markets that would be catastrophic to his entire presidency,” said Daniel Alpert, managing partner at investment firm Westwood Capital. “There will be all sorts of hell to pay.” Trump has grown furious with Powell since July, when the president blasted the Fed chief following the second of what would end up being four rate hikes in one year. Despite previously insisting he wouldn’t encroach on the Fed’s independence, Trump reportedly mulled firing Powell last month during a brutal time for U.S. stocks, the worst December since the Great Depression. Trump appointed Powell, a Republican, to chair the Fed in October 2017, five years after he was confirmed to the central bank as a governor on the board. The Senate confirmed Powell in January 2018 in an 84-13 vote, with almost all Republicans and a vast majority of Democrats supporting him. Trump’s public rage with Powell breaks from decades of presidential restraint when it comes to monetary policy. And while Trump isn’t the first Oval Office occupant to attempt to sway the central bank, his predecessors kept their complaints largely behind closed doors.
Fed's Powell says he will not resign if asked by Trump - Federal Reserve Chairman Jerome Powell said Friday morning that he would not resign his post if asked to do so by the president, adding that he has not received any direct communications from the White House regarding his tenure leading the central bank. Asked during a conference of the American Economic Association in Atlanta whether he would resign if requested by the White House, Powell answered simply: “No.” He added that he has not been asked to resign and has had no direct communications with the White House and does not have any imminent plans to meet with the president, though he said such a meeting would be consistent with precedent. “Meetings between presidents and Fed chairs do happen,” Powell said. “I can’t think of any Fed chairs who didn’t eventually meet with the president. But again, nothing has been scheduled and I don’t really have anything to report on that.” Powell added that the public should be aware that the Fed as an institution is committed to conducting monetary policy without considering political ramifications — and that culture extends beyond the chairmanship. “People should know that the Fed has a very strong culture around nonpolitical activity,” Powell said. “We are committed to achieving the goals that the law gives us, and we are committed to doing so in a completely nonpolitical way ... and we are always going to do that. I would want the public to be assured that we have a strong culture. It’s not a fragile one. It’s not subject to being disrupted. We will always do things that way.”
Unhappy new year: bond yield curve inversion spreads - A month ago, when the 2- through 5-year bond yield curve first inverted, I wrote that while it might be a case of "the camel's nose is in the tent," i.e., the rest of the camel (yield curve) was likely to follow, there were a bunch of caveats: In short, a one-day inversion over a limited portion of the bond yield curve, while more often than not heralding a full-on inversion and bad consequences to come, is by no means dispositive.Generally speaking, for a yield curve inversion to give a true signal, it should last longer than a few days, spread out further along the yield curve, especially towards shorter yields (e.g. 6 month or 1 year yields), and deepen. As of this morning, here's what bond yields look like: About a week ago, for the first time, the inversion spread out to the 1-vs.5-year yield, and a secondary inversion opened up between the 1 month and 3 month yield. Then, on Monday, the inversion spread out to the 1-vs. 7-year yield. Further, as of this morning, the 1 year vs. 10 year yield spread has shrunk to .04%. That's a big move and about .07% tighter than it has been at any point in the last year. Note that the inverted spread between the 1 year and 3 year bond yields has deepened to -0.155%. So, all three of my criteria for a true signal have been met: (1) the inversion has persisted; (2) the inversion has spread out along the yield curve, especially towards shorter term maturities; and (3) the inversion has deepened. A recession in the next 12 to 24 months is still not a sure thing. There were deeper and more persistent inversions in 1966 and 1998 without a recession following in that time frame -- although 1966 was a very deep slowdown that just missed being a recession. But there is simply a very strong possibility that we are looking, at very least, at a big slowdown soon.
2, 3 and 5-Year Treasury Yields All Drop Below The Effective Fed Funds Rate - Things are getting increasingly more crazy in bond land, where moments ago the 2Y Treasury dipped below 2.40%, trading at 2.3947% to be exact, and joining its 3Y and 5Y peers, which were already trading with a sub-2.4% handle. Why is that notable? Because 2.40% is where the Effective Fed Funds rate is, by definition the safest of safe yields in the market, that backstopped by the Fed itself. In other words, for the first time since 2008, the 2Y (and 3Y and 5Y) are all trading below the effective Fed Funds rate. That the curve is now inverted from the Fed Funds rate all the way to the 5Y Treasury position suggests that whatever is coming, will be very ugly as increasingly more traders bet that one or more central banks may have no choice but to backstop risk assets and they will do it - how else - by buying bonds, sending yields to levels last seen during QE... i.e., much, much lower.
Bond Market Rocked As 10Y Yield Soars Most In Two Years - One day after a powerful, short-squeeze driven rally in US Treasurys, as a flight to safety pushed investors out of tumbling stocks and into the "safety" of bonds on Thursday, Friday has seen a dramatic U-turn, with the 10Y yield surging from a low of 2.54% to as high as 2.6712%... ... a 4.2% increase, which was the biggest one-day percentage gain in the 10Y yield in two years, or since a 4.5% jump in the 10Y yield on January 18, 2017. The recent sharp moves in the Treasury complex have sent the MOVE Treasury volatility index, which hit an all time low on October 1 to the highest level since the February flash crash. What is remarkable about today's TSY selloff is how coordinated it has been across the entire curve, which shifted almost entirely in parallel, with 2 year yields similarly rising the most in over a year as the market's fascination with imminent rate cuts was put on the backburner. The rebound in yields has pushed all tenors from 2Y to 5Y back above the 2.40 effective Fed Funds rate, a level all three TSY dipped below during yesterday's violent rally. This comes as bats on a rate cut in 2019 have faded modestly despite today's somewhat dovish comments by Powell which contrasted with the strong payrolls report. Ironically, the violent reversal comes just days after investors plowed a near record $1.7 billion into the IEF iShares 7-10 Year Treasury bond ETF... ... and comes at a time of record government bond inflows.
Goldman Slashes US Growth Forecast, Now Sees Just 1.2 Rate Hikes In 2019 - It was just three weeks ago that Goldman, having long held a painstakingly upbeat outlook on the US economy for 2019, finally capitulated and trimmed its hawkish forecast for 4 rate hikes in 2019, calling for less than a 50% probability of a rate hike in the March, even as the bank continued to sneers at the market's current pricing for the funds rate, which now anticipates no full hike in all of 2019.Not anymore.In the last economic note for 2018, Goldman chief economist Jan Hatzius says that in light "of the recent FCI tightening [i.e. market turbulence] and weaker US data" the bank has not only slashed its near-term GDP outlook, but taken down its full year rate hike forecast to a paltry 1.2 for all of 2019 (keep in mind, this number was 4 as recently as the start of December), to wit:We have revised down our US growth forecast for the first half of 2019 from 2.4% to 2%; we continue to expect growth of 1¾% in H2.To justify its abrupt reversal, Hatzius presents three "strong" reasons why we should expect slower growth in 2019 vs recent years.
- "First, a slowdown is already evident in the numbers. As shown in Exhibit 1, both real GDP and our current activity indicator (CAI) were running at 3½-4% over the summer, but the pace has recently fallen to the 2-2½% range."
- "Second, the impulses from fiscal policy and financial conditions are turning more negative. In the second half of 2018, fiscal policy contributed nearly ¾pp to growth via lower taxes and higher spending, but this number will gradually diminish to roughly zero by the end of 2019. In addition, financial conditions have turned into a significant headwind and could take more than 1pp off real GDP growth in the first three quarters of 2019. This means that the demand-side case for above-trend growth is weakening significantly."
- "Third, the economy needs to slow in order to limit the risk of a dangerous overheating down the road. Unemployment is already ¾pp below our 4½% estimate of the rate consistent with a 2% inflation rate in the medium term. And Exhibit 3 shows that a variety of other measures of labor market slack confirm the message of labor market tightness. Given the close correlation between labor market overheating and subsequent recession, Fed officials will want to see a significant slowdown in growth. This means that if financial conditions reverse too much of their recent tightening, Fed officials would likely turn more hawkish to keep growth from rebounding too much."
U.S. economy flashes warning signs of impending slowdown (Reuters) - U.S. manufacturers reported the broadest slowdown in growth last month for more than a decade, as the trade conflict with China, falling equity prices and increasing uncertainty finally started to take a toll on the economy. The Institute for Supply Management’s purchasing managers’ index slumped by 5.2 points in December from the previous month, the largest monthly fall since October 2008 (https://tmsnrt.rs/2Sy98Mh ). Manufacturers reported increases in orders, output, employment and inventories, indicating the sector continues to expand, but at a much slower rate than before, according to survey results published on Thursday. The new orders component slumped by 11 points and remained barely above the 50-point threshold that divides expanding activity from a contraction, suggesting the loss of momentum could extend into early 2019. Major U.S. equity indices have been trending lower for months, suggesting investors were anxious about the earnings outlook, even as the purchasing managers survey continued to point to strong expansion. That contradiction has now been resolved - with the decline in the survey results confirming the signal coming from the equity markets. Until recently, the United States had appeared immune to the slowdown in growth evident in most other major economies since the middle of 2018. But the loss of momentum reported at the end of last year shows the economy is not immune from broader global trends. The slowdown in the United States is consistent with other indicators suggesting a significant deceleration in global export orders and trade flows. Oil prices and calendar spreads have been falling since October, as traders anticipate weaker consumption growth in 2019. Through tariffs, sanctions and other actions that have heightened uncertainty for businesses, policymakers have taken the expansion for granted and pushed the global economy to the brink of a slowdown.
Q4 GDP Forecasts: Mid 2s -- From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 2.5% for 2018:Q4 and 2.1% for 2019:Q1. [Jan 4 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 2.6 percent on January 3, down from 2.7 percent on December 21. The nowcasts of fourth-quarter real consumer spending growth and fourth-quarter real private fixed investment growth decreased from 3.7 percent and 2.7 percent, respectively, to 3.6 percent and 2.4 percent, respectively, after this morning’s Manufacturing ISM Report On Business from the Institute for Supply Management. [Jan 3 estimate] CR Note: These estimates suggest GDP in the mid-2s for Q4.
Government shutdown: How it could hurt the economy -- As the partial federal government shutdown heads into its second week, economists are starting to weigh the potential damage to an economy already beset by a trade war with China and market turmoil. If the standoff – centered on President Donald Trump’s demand for more funding for a border wall with Mexico -- is resolved in the next week, the impact on the U.S. economy will likely be trivial, economists say. “I don’t think (a two-week shutdown) shows up on the radar screen,” especially since government work typically slows down anyway during the Christmas and New Year’s holidays, says Mark Zandi, chief economist of Moody’s AnalyticsBut if the impasse drags into late January or beyond, it could take a noticeable toll by dampening federal workers’ productivity, temporarily halting their paychecks, closing national parks, suspending federal funding for loans and delaying tax refunds, among other impacts.The biggest damage could be inflicted on consumer and business confidence that’s already been dented by the recent stock market selloff.“It doesn’t help at a time markets are on edge,” says economist Nancy Vanden Houten of Oxford Economics. If the shutdown lasts until the end of January, Zandi estimates it will knock $8.7 billion off gross domestic product, shaving first-quarter economic growth by about two-tenths of a percentage point. Economist Jesse Edgerton of JPMorgan Chase predicts it could trim growth by a half a percentage point. That’s about how much the 16-day partial government shutdown reduced growth in late 2013.JPMorgan Chase estimates the economy will grow at a 2.2 percent annual rate during the first three months of 2019, before figuring any shutdown impact. The shutdown is affecting about a quarter of the federal government, or about 800,000 workers. About half of them are working without pay. But the rest are on furlough and so the hours they would have clocked aren’t counted toward the nation’s GDP. All 800,000 workers aren’t getting paid. That means they’ll spend less on dining out and buying clothing, TVs, toys and other goods. The workers almost certainly will be paid retroactively after the shutdown is resolved, and so many purchases are simply delayed. But outlays for things like eating out and possibly vacations are unlikely to be recouped, Zandi says.
Federal employees prepare for long government shutdown (CNN) — A quarter of the federal government will likely begin the new year out of work or working without pay. For the 380,000 federal employees on furlough and the other 420,000 working without pay, this means it’s time to start making plans for how to pay January bills without the promise of their next paycheck as part of the government remains shutdown. The US Office of Personnel Management tweeted out sample letters for federal employees to send to their creditors, mortgage companies or landlords. The letters suggest that employees ask to pay a reduced amount or create a payment plan in the coming months because they are out of work and not getting paid during the shutdown. Each sample letter ends with, “I appreciate your willingness to work with me and your understanding during this difficult time.” The sample letter for employees to send to their landlords suggests they offer to trade services like painting or carpentry work “in exchange for partial rent payments.” On Christmas Day, speaking from the Oval Office, Trump said that many federal workers support the shutdown. He said, “But many of those workers have said to me and communicated, stay out until you get the funding for the wall.” On Thursday, he tweeted, “Do the Dems realize that most of the people not getting paid are Democrats?” Trump offered no evidence that most of the 800,000 people working without pay or not working belong to the Democratic Party.
Trump formalizes federal pay freeze for 2019 - President Donald Trump issued an executive order Dec. 28 formalizing the 2019 federal employee pay freeze that he announced his intent to enact four months earlier. Employee organizations decried the freeze as adding insult to injury during a partial government shutdown that has kept hundreds of thousands of feds out of work for over a week. “This is just pouring salt into the wound,” Tony Reardon, National Treasury Employees Union national president, said in a statement. “It is shocking that federal employees are taking yet another financial hit. As if missed paychecks and working without pay were not enough, now they have been told that they don’t even deserve a modest pay increase.” “Both the shutdown and the pay freeze impose real economic costs on federal employees and our country,” Ken Thomas, National Active and Retired Federal Employees Association national president, said in a statement. “Both undermine the effectiveness of the work our government does — from ensuring the national defense and homeland security to safeguarding taxpayer dollars from fraud — by damaging its ability to recruit and retain a highly qualified and talented workforce. Refusing to provide a nominal raise for our nation’s hardworking federal employees amid a partial government shutdown shows clear contempt for those who carry out public service.” The pay freeze is effective starting with the first pay period of the new year, though Congress still has the opportunity to counteract it if they pass the 1.9 percent federal pay increase included in the original Senate version of general government appropriations.
House Democrats have prepared spending bills to end shutdown without funding border wall - Democrats in the House of Representatives have prepared bills that would end the ongoing partial government shutdown, a senior Democratic aide told CNBC on Monday. The plan would fund the Department of Homeland Security through Feb. 8. The remaining government agencies affected by the shutdown would be funded through September via separate bills. Democrats will gain control of the lower chamber of Congress on Thursday. The funding for the DHS would not include the $5 billion that President Donald Trump has demanded to fund his proposed border wall. The proposal from Democrats, which has not yet been formally announced, is likely to face strong opposition from Trump, who has vowed to do "whatever it takes" to secure funding for the wall. Trump's endorsement could prove key to moving any plan forward, given the obstacles to overcoming a presidential veto. And the GOP-dominated upper chamber is unlikely to vote on any bill the president hasn't approved. "It's simple: The Senate is not going to send something to the President that he won't sign," David Popp, a spokesman for Senate Majority Leader Mitch McConnell, R-Ky., told CNBC on Monday. To overcome a presidential veto, at least 55 Republicans would have to vote with every Democrat in the House. Overcoming a veto would also require the votes of 67 senators. Republicans will control 53 senate seats in the next Congress. Rep. Mark Meadows, R-N.C., who chairs the conservative House Freedom Caucus and is considered a close ally of Trump's, said a proposal without funding money for a border wall is a "non-starter."
Democrats maneuver to end shutdown, without Trump wall money (Reuters) - Democrats in the U.S. House of Representatives plan to vote on Thursday on a funding package to end the 10-day-old partial U.S. government shutdown, without providing the $5 billion President Donald Trump has demanded for a U.S.-Mexico border wall. The planned vote sets up a Democratic showdown with Trump’s fellow Republicans on an issue dear to the president on the first day of divided government in Washington since he took office in January 2017 with a Congress led by his own party. Democrats formally take control of the House from the Republicans after winning a majority of seats in November’s congressional elections. The two-part Democratic package filed on Monday in the House includes a bill to keep funding for the Department of Homeland Security at current levels through Feb. 8 with no new wall funding, as well as a bundle of six measures worth nearly $265 billion combined that would fund the other shuttered agencies through the Sept. 30 end of the current fiscal year. The two parts will be voted on separately on the House floor on Thursday, said Democrats, who will hold a 36-seat majority. If approved in the House, the funding package would go to the Republican-led Senate. Its prospects there appear unpromising, although Trump’s unpredictability makes it hard to gauge how the shutdown showdown will play out. “It’s simple: The Senate is not going to send something to the president that he won’t sign,” said a spokesman for Senate Republican leader Mitch McConnell. The Democratic legislation will mark the first major battle pitting the incoming Democratic House majority led by Nancy Pelosi against Trump and McConnell.
White House- Pelosi’s plan to reopen the government ‘a non-starter’ - White House press secretary Sarah Huckabee Sanders late Tuesday said that House Democrats' plan to reopen the government was a "non-starter," calling the proposal "the Pelosi plan" and saying that it "fails to secure the border and puts the needs of other countries above the needs of our own" "President Trump made a serious, good faith offer to Democrats to open the government, address the crisis at our border, and protect all Americans," Sanders said. "We have heard nothing back from the Democrats, who so far have refused to compromise. Speaker Designate Nancy Pelosi [(D-Calif.)] released a plan that will not re-open the government because it fails to secure the border and puts the needs of other countries above the needs of our own citizens," she continued. Sanders's statement came on the eve of a briefing with top congressional leaders and Department of Homeland Security officials. President Trump, earlier in the day, invited leaders in both parties to the White House for a briefing on border security on Wednesday amid the ongoing partial shutdown. "The Pelosi plan is a non-starter because it does not fund our homeland security or keep American families safe from human trafficking, drugs, and crime. The President has invited Republican and Democrat leaders in Congress to the White House for a border security briefing from senior Department of Homeland Security (DHS) officials on Wednesday, and he remains committed to reaching an agreement that both reopens the government and keeps Americans safe," Sanders added. The partial shutdown, already in its second week, began late last month after lawmakers were unable to come to an agreement on funding for border security. The impasse was spurred largely by Trump's demand for $5 billion for his proposed U.S.–Mexico border wall. Democrats have indicated they will not give in to the president's demands, instead offering $1.3 billion for border security.
IRS Will Take Your Money but Won’t Issue Tax Refunds During Shutdown— While most Americans thought they wouldn’t be affected by the partial government shutdown, anyone with a federal tax refund coming to them will have to wait until the stalemate is over, according to the Wall Street Journal.As one of the agencies which now lacks funding, the IRS and the US tax collector are operating with roughly 1/8 of their usual staff under a shutdown plan it’s operating under outside the tax-filing season.“During a shutdown, the IRS can continue activities that protect government property, and the agency may bring in more workers soon to prepare for the income-tax filing season. Even during a shutdown, the agency still processes some tax returns that include payments, keeps computer systems running and continues criminal investigations. But the IRS generally doesn’t conduct audits, respond to taxpayer questions outside the filing season or—brace yourself—pay refunds.A shutdown that gets resolved within a few weeks would have little ultimate effect on taxpayers, but lawmakers have made little or no movement toward a deal. That stalemate raises the prospect of an unprecedented extended closure during the individual income-tax filing season, which typically starts in mid-to-late January. The IRS hasn’t announced a start date yet for the 2019 filing season, the first under the tax law that Congress passed in 2017.” – WSJ“We’re in uncharted territory as each day gets longer,” said Mark Steber, chief tax officer at Jackson Hewitt Tax Service Inc.This means that early filers won’t receive their expected refunds – which may put pressure on President Trump and congress to hammer out a deal. President Trump says he won’t sign any legislation that doesn’t include $5 billion for his border wall, while Congressional Democrats say that’s not happening. If last year’s tax refund figures are any indication, there are potentially hundreds of billions of dollars on the line for more than 55 percent of US households.
McConnell suggests shutdown could last for weeks -- Senate Majority Leader Mitch McConnell (R-Ky.) after a White House meeting with President Trump and other congressional leaders said Wednesday that the partial government shutdown could continue for days or even weeks. "It was a civil discussion. We're hopeful that somehow in the coming days and weeks we'll be able to reach an agreement," McConnell told reporters, opening the door to a lengthy shutdown that is already in its 12th day. McConnell and other members of congressional leadership of both parties met with Trump and members of the Department of Homeland Security (DHS) for what was billed as a "briefing" on the border. But lawmakers say that was quickly derailed with Republicans accusing Democrats of interrupting and Democrats stressed their time would be better spent talking about the partial shutdown. McConnell added that they had a "good discussion" on border security but acknowledged they had not yet found a way to break the stalemate over Trump's U.S-Mexico border wall. "I don't think any particular progress was made today, but we talked about all aspects of it. It was a civil discussion," he said. The shutdown began Dec. 22 after Democrats refused to agree to Trump's demand for $5 billion in funding for a wall on the Mexican border. House Democrats are expected to vote on Thursday on a package to reopen the government. One bill would fund DHS through Feb. 8. The second would fund the remaining six bills through Sept. 30, the end of the 2019 fiscal year. But the White House and Senate Republicans have vowed not to move the bill once it reaches the Senate.
Pelosi, Schumer go to White House as shutdown over Trump border wall persists - The partial government shutdown entered its 12th day Wednesday, as bipartisan congressional leaders headed to the White House for a briefing on President Donald Trump's proposed border wall.Nine federal departments remain unfunded and hundreds of thousands of federal workers face missing paychecks amid an impasse over funding for the barrier. Democrats have pledged to pass spending legislation without wall money when they take control of the House on Thursday. But Trump has already promised to oppose the measure, leaving Congress and the White House still far from a solution.Eight lawmakers attended the White House briefing on border security at 3 p.m. Wednesday. The group includes House Minority Leader Nancy Pelosi, who will likely become speaker Thursday, and Senate Minority Leader Chuck Schumer. In the lead-up to the shutdown last month, the Democratic leaders got into a televised Oval Office spat with the president over the wall.The briefing comes as neither side has shown willingness to cave on the president's demand for $5 billion in taxpayer money for the project. Trump has insisted on funding for the barrier, a core campaign promise that excited supporters at political rallies when he promised Mexico would pay for it. Democrats have flatly opposed the funding, calling a wall both inhumane and ineffective.Trump's own messaging muddied his push for a wall as talks stalled over the holidays. The president has not made it clear what exactly he wants — calling at various times for a concrete barrier, fencing or a structure made of steel slats. Some Democrats have worried about the White House using the briefing as a political ploy rather than a piece of an effort to reach a deal to end the shutdown. Asked Wednesday as he entered Pelosi's office if he thought the event was a stunt, Schumer said "I hope he's serious, but I'm worried that it's another one of his events for show," according to NBC News.Leaving Pelosi's office later, Schumer said he and the California Democrat are "always" on the same page. The Democrats "hope" the shutdown will end soon, but "it's up to President Trump," he added. A tweet Wednesday morning also raised questions about why Trump still demands taxpayer money for the wall. He claimed "Mexico is paying for the wall" through a replacement of the North American Free Trade Agreement. The Trump administration has struggled to explain that assertion, and Congress still needs to approve the deal for it to take effect.
Pelosi digs in as shutdown drags on; White House meeting ends without deal - Democratic leaders emerged from a White House meeting Wednesday to say they’ll plow ahead with spending bills this week that have already been rejected by the GOP, signaling that a change in Congress doesn’t mean a quick end to the government shutdown.Speaker-designate Nancy Pelosi led a contingent of her party to the Situation Room at the White House where they were to receive a briefing on the need for a border wall.But the conversation quickly devolved into political sniping, according to attendees, with no substantive discussion of a deal on President Trump’s demand for $5 billion in border wall money.Democrats say they won’t negotiate until the 25 percent of government that lost funding on Dec. 22 is restored. They will offer a plan Thursday that would fund eight of the nine shuttered departments for all of 2019, and fund Homeland Security through Feb. 8.That, they said, will separate the wall fight from the rest of government — and they said it mirrors a plan Senate Republicans have previously backed.“We have given the Republicans a chance to take yes for an answer,” Mrs. Pelosi said.Democrats brushed aside pointed questions from reporters about their reluctance to engage in negotiations. The White House has already rejected the Democratic plan, and Senate Majority Leader Mitch McConnell has said the next vote he holds on the chamber floor will have to be on a deal that has the sign-off of Mr. Trump, as well as Democratic leaders. That would appear to rule out action on Mrs. Pelosi’s bill.
Second White House meeting scheduled as shutdown drags toward week three A partial government shutdown showed no signs of ending Wednesday as congressional leaders left what appeared to be an unproductive meeting with President Trump. Before and after the meeting, there was little talk of compromise as Trump and Democrats battled over his demand for border-wall funding, all but assuring the shutdown will barrel into a third week. Trump invited congressional leaders back to the White House for another round of talks on Friday, the day after Democrats assume the House majority, according to House Republican Leader Kevin McCarthy (Calif.) But it remains unclear how they will resolve the funding impasse. House Democratic Leader Nancy Pelosi (Calif.) said she planned to move ahead with a plan to vote Thursday on a spending bill without funding for a border wall, upon formally taking control of the House from Trump’s fellow Republicans. “We are asking the president to open up the government,” Pelosi said outside the White House following the meeting. “We are giving him a Republican path to do that. Why would he not do it?” Senate Minority Leader Charles Schumer (D-N.Y.) said he asked Trump directly to give him “one good reason” why he would not accept Pelosi’s offer to reopen the government while border talks continued and claimed the president could not come up with one. “I would look foolish if I did that,” Trump responded, according to a source familiar with what happened in the room.
Federal shutdown, payless paydays could continue for “weeks” - A 90-minute meeting at the White House between President Donald Trump and congressional leaders of both the Democratic and Republican parties saw no movement towards a resolution of the budget deadlock that has forced a partial shutdown of the federal government, with 800,000 workers either furloughed or compelled to work without pay.Trump appeared to escalate his demands for a border wall, demanding the $5.6 billion figure passed by the lame-duck session of the House of Representatives last week, while it was still under Republican control, repudiating the “compromise” proposal by Vice President Mike Pence, who suggested a deal with Democrats at $2.5 billion, including about $1 billion for the wall. The two top Democrats, Nancy Pelosi and Chuck Schumer, reiterated their support for $1.3 billion in spending on “border security”—limited to technology like drones and sensors, and more personnel, and an additional $300 million for repairs to existing barriers, but no money for building any new structures along the US-Mexico border.The newly elected House of Representatives, with a Democratic majority, takes office Thursday. Pelosi indicated that the first action after she takes office as speaker will be passage of two separate bills: one to provide full funding for six of the seven federal departments affected by the shutdown, at levels already approved by the Republican-controlled Senate; the other to provide short-term funding for the Department of Homeland Security through February 8, while talks continue on “border security” and the wall. According to press reports of the White House meeting, Trump said that he would not sign either bill into law, because to do so would make him “look foolish,” in other words, it would anger his fascistic base. Senate Majority Leader Mitch McConnell said he would not bring up either bill for a vote in the Senate without Trump’s support. Trump said that the shutdown would continue for “as long as it takes.”
Senate will only consider shutdown-ending bills Trump would sign: McConnell (Reuters) - U.S. Senate Majority Leader Mitch McConnell on Thursday laid out the terms for taking up legislation to end the current government shutdown, saying his Republican-dominated chamber would not consider any bill President Donald Trump would refuse to sign. “Let me say it again: The Senate will not take up any proposal that does not have a real chance of passing this chamber and getting a presidential signature,” McConnell said on the Senate floor.
McConnell insists he has no role in ending standoff - Senate Majority Leader Mitch McConnell said Thursday he has not been "sidelined" in talks to reopen parts of the government but that he has "no particular role" to play in ending the standoff, a responsibility he said falls to President Donald Trump and congressional Democratswho wield expanded power in the new Congress. Since he donned a Christmas sweater on the Senate floor 13 days ago -- a sign that he wanted to fund the government before the holiday -- the long-serving Republican leader has diligently distanced himself from negotiations to end the shutdown. He had opposed shutting down the government and seemingly succeeded in avoiding it until Trump abruptly reversed course and said he would not sign a continuing resolution without $5 billion for the border wall. In a brief hallway interview, McConnell explained that his role is now reversed from when he and then-Vice President Joe Biden worked to avoid a fiscal cliff and negotiated other tough issues during the Obama administration. "Well, it's not complicated. I was in this role when Obama was President, and Biden and I did deals because they needed some of our votes. So, now the role is reversed and ultimately the solution to this is a deal between the President and Nancy and Chuck because we need some of Chuck's votes and obviously we need Nancy's support," he said, referring to newly installed House Speaker Nancy Pelosi of California and Senate Minority Leader Chuck Schumer, a New York Democrat. "So, I haven't been sidelined," McConnell added. "It's just that there's no particular role for me when you have this setup."
House Defies Trump; Votes To Reopen Government With No Wall Funding - In what what can only be described as theatre, the Democrat-controlled House of Representatives voted late Thursday to pass two bills that would reopen parts of the government affected by the partial shutdown. The only problem is that neither of the bills contain funding for what House Speaker Nancy Pelosi (D-CA) called an "inhumane" border wall - leaving Republicans and Democrats without any possible way forward during a Friday meeting at the White House following President Trump's vow to veto any legislation that does not include money for perhaps his greatest election promise. Trump will meet at 11:30 a.m. with Pelosi and House Majority Whip Steny Hoyer (D-MD) along with other congressional leaders, according to the Washington Examiner. "We’ll go down there, we’ll talk," said Hoyer on Thursday. "We’ll try to come to an agreement."That said, House Democrats held a Thursday afternoon hallway press conference where they took turns proclaiming how they would stand their ground against Trump's wall. "We are not doing a wall," said Pelosi - calling it "an immorality." Pelosi said the $5 billion Trump is requesting for the wall diverts money from other critical needs, although it is a tiny fraction of all federal spending. Still, she said the wall was a distraction put forward by President Trump who wants to shield his base from the negative impact of his agenda. “It’s a wall between reality and his constituents, his supporters,” Pelosi said. Shortly after Christmas, White House officials said they told Democratic leaders they would accept about half of their initial $5 billion request. But when asked about the offer, Pelosi suggested the Trump administration backed away from that idea. “You can’t have an agreement that people walk away from,” she said. “Go to them and say, 'Why don’t you stick to what you offered?'" -Washington Examiner So at this point, tomorrow's White House meeting looks like it will be a massive waste of everybody's time - especially considering that Senate Majority Leader Mitch McConnell (R-KY) said on Thursday that he will not consider any House-passed bills that Trump won't sign.
Senators warm to immigration deal as shutdown solution - Lawmakers are opening the door to reviving deeply polarizing immigration negotiations as they search for a way out of the partial government shutdown, which hit the two-week mark on Friday. An agreement to overhaul the nation’s immigration laws has eluded Congress for years, underscoring the difficult path awaiting lawmakers and the White House if they decide to broaden the divisive border wall fight. But with President Trump and congressional Democrats at a stalemate with no signs of reaching an agreement to reopen roughly 25 percent of the government, making immigration reform part of the negotiations is gaining traction among senators on both sides of the aisle who are eager for a way out of the shutdown. “It’s come back to life again,” said Sen. Richard Shelby (R-Ala.), the chairman of the Senate Appropriations Committee, of a potential immigration deal. “We’ll see if it has legs.” There’s been no formal agreement among leadership or the White House to insert an immigration overhaul into the shutdown talks, where funding for Trump’s proposed wall along the U.S.-Mexico border is the key sticking point. Immigration reform was brought up during Wednesday’s closed-door meeting at the White House that included Trump, congressional leaders and Homeland Security Secretary Kirstjen Nielsen. Sen. Dick Durbin (D-Ill.), who attended the meeting, said the topic was broached “in a bleak way,” and he appeared wary of wading into negotiations on immigration without Trump’s clear support. “I’ll tell ya, it’s such a bitter experience a year ago. And I told the president that I had a bitter experience,” Durbin told The Hill, referring to the White House meeting. “We’re not going to jump back in that until there’s a pretty clear public commitment from the president.”
Trump Says He May Declare National Emergency To Build Wall - Mere minutes after ABC News published a report claiming that the Trump Administration had considered declaring a national emergency to circumvent Congress and start construction on the rest of President Trump's border wall, President Trump confirmed as much during a raucous White House press conference on Friday. After saying that the federal government could use eminent domain to secure the land for the wall, Trump responded to a question about using his emergency powers to build the wall with a definitive "yes.""Absolutely, we can call a national emergency. I haven’t done it. I may do it. I may do it. We can call a national emergency and build it very quickly.""It’s another way of doing it. If we can do it through a negotiated process, we’re giving that a shot."According to the ABC News report, discussions about declaring a national emergency have been happening at "a working level" and that discussions have intensified as Democrats have continued to insist that they won't approve any funding for a border wall, and Trump has i nsisted that he has no intention of capitulating. On Friday, Trump rattled anxious furloughed federal workers by saying the shutdown could persist for "months or years".
Schumer: Trump threatened to keep government shut down for years - President Trump on Friday threatened to keep roughly a quarter of the federal government closed for years amid a dispute over border-wall funding, the latest sign the president and congressional Democrats remain far apart on resolving the two-week-long shutdown. Trump confirmed after a heated, closed-door meeting that he “absolutely” told Democrats the shutdown could last more than a year, which was first revealed by Senate Minority Leader Charles Schumer (D-N.Y.) following the negotiation session inside the White House Situation Room. “We told the president we needed the government open,” Schumer told reporters on the West Wing driveway after the meeting. “He resisted. In fact, he said he’d keep the government closed for a very long period of time, months or even years.” Addressing the news media later in the Rose Garden, the president expressed hope that the shutdown would not last that long, citing what he believes is Democrats’ willingness to strike a deal. Despite the Democrats’ description of the two-hour meeting as “contentious,” Trump called it “productive” and said he appointed a working group of top administration officials to continue talks with lawmakers through the weekend. “I thought it was really a very, very good meeting. We're all on the same path in terms of wanting to get government open,” the president said during a news conference that lasted roughly an hour. But the president refused to back away from what he called his “very firm” demand for $5.6 billion in funding for a wall along the U.S.-Mexico border. Democrats have repeatedly rejected that demand. Trump also threatened to use emergency powers to build the wall, a move that would inflame tensions with Congress, where Democrats have taken control of the House, and raise legal questions about his executive authority.
Trump threatens to extend partial government shutdown for years - President Trump on Friday threatened to keep roughly a quarter of the federal government closed for years amid a dispute over border-wall funding, the latest sign the president and congressional Democrats remain far apart on resolving the two-week-long shutdown.Trump confirmed after a heated, closed-door meeting that he “absolutely” told Democrats the shutdown could last more than a year, which was first revealed by Senate Minority Leader Charles Schumer (D-N.Y.) following the negotiation session inside the White House Situation Room. “We told the president we needed the government open,” Schumer told reporters on the West Wing driveway after the meeting. “He resisted. In fact, he said he’d keep the government closed for a very long period of time, months or even years.” Addressing the news media later in the Rose Garden, the president expressed hope that the shutdown would not last that long, citing what he believes is Democrats’ willingness to strike a deal. Despite the Democrats’ description of the two-hour meeting as “contentious,” Trump called it “productive” and said he appointed a working group of top administration officials to continue talks with lawmakers through the weekend. “I thought it was really a very, very good meeting. We're all on the same path in terms of wanting to get government open,” the president said during a news conference that lasted roughly an hour. But the president refused to back away from what he called his “very firm” demand for $5.6 billion in funding for a wall along the U.S.-Mexico border. Democrats have repeatedly rejected that demand. Trump also threatened to use emergency powers to build the wall, a move that would inflame tensions with Congress, where Democrats have taken control of the House, and raise legal questions about his executive authority.
The Impact Will Multiply - Government Shutdown Aftershocks Are Hitting the U.S. Economy - The effects of the government shutdown are starting to reach their way across various industries and affecting the U.S. economy. As Bloomberg reports, some examples include airlines that cann't get permission to add new planes and mortgage lenders who are unbale able to verify income for borrowers. Worse, breweries can’t sell new beer while they’re waiting for approval of new labels. This is just a small cross section of the aftershocks occurring from shutting down nine major departments of the government. Longtime congressional budget aide Stan Collender stated: "The impact will multiply as the days and weeks continue". Friday marked the 14th day of the shutdown that is the consequence of President Trump not getting the funds he needs for his border wall. Despite a somewhat upbeat press conference that the president held Friday afternoon after meeting with Nancy Pelosi and Chuck Schumer, additional effects from the shutdown are still making their way across the broader economy. Pres. Trump confirms he told Sen. Chuck Schumer during their meeting over the shutdown that it could extend for "months or even years." In one example, Southwest Airlines said that the shutdown will likely delay its plans to expand service to Hawaii. Delta is unable to begin service with a new airliner, an Airbus SE A220. Not only are airliners having trouble adding new aircraft to their fleet, they're also having difficulty starting new pilot training programs. These tasks necessitate FAA approval, and most of the FAA's 5,000 employees aren't working. Air traffic controller training has been suspended as well, at a time when staffing for the position is at a 30 year low. Meanwhile, homebuyers and lenders are also feeling the sting of the shutdown. Lenders rely on IRS income verification, which has gone dark as a result of the shutdown, delaying mortgage approvals across the nation. The IRS has said it is "barred" from this type of paperwork until a spending deal happens. Pete Mills, senior vice president of policy at the Mortgage Bankers Association says that if the delay goes on another week, "it's going to delay closings". As we reported overnight, the IRS will also be unable to process tax refunds during the shutdown. Government reviews of foreign investment decisions and mergers have also been affected: the expected approval of mergers like T-Mobile’s bid for Sprint Corp still hangs in the balance, awaiting the nod from the FCC.
Trump, in profanity-laced meeting with lawmakers, said he preferred 'strike' to refer to government shutdown: reports - - President Trump reportedly opened a meeting Friday with congressional leaders with an incendiary rant before saying he preferred the word “strike” to refer to the ongoing government shutdown, according to multiple reports. The Wall Street Journal reported that Trump began Friday's heated closed-door negotiations with Senate Minority Leader Charles Schumer (D-N.Y.) and newly minted Speaker Nancy Pelosi (D-Calif.) with a 15-minute, profanity-laced rant. Sources familiar with the meeting also confirmed the account to CNN and the Daily Beast. The president’s speech centered on his $5.6 billion demand for a border wall, according to CNN. The outlet reported that Trump said he would be unwilling to negotiate for any less. The Daily Beast reported that Trump also blamed Pelosi, without being prompted, for freshman Rep. Rashida Tlaib (D-Mich.) vowing at a party on Thursday that House Democrats would “impeach the motherf---er.” The Hill has reached out to the White House for comment. Trump reportedly told lawmakers that he was too popular to impeach, a claim he has repeated frequently on Twitter. “How do you impeach a president who has won perhaps the greatest election of all time, done nothing wrong (no Collusion with Russia, it was the Dems that Colluded), had the most successful first two years of any president, and is the most popular Republican in party history 93%?” Trump tweeted Friday morning before the meeting.
Trump: 'I don’t care' that most federal employees working without pay 'are Democrats' -- President Trump said Saturday that he wants to end the partial government shutdown that is stretching into its third week while reiterating his claim that most of the federal workers being furloughed or forced to work without pay are Democrats. “I don’t care that most of the workers not getting paid are Democrats, I want to stop the Shutdown as soon as we are in agreement on Strong Border Security!” the president tweeted. “I am in the White House ready to go, where are the Dems?” The government entered a partial shutdown on Dec. 22, shuttering about 25 percent of the government and leaving hundreds of thousands of workers furloughed or forced to work without pay for the time being. The shutdown began amid an impasse between the White House and lawmakers over Trump's demand for billions of dollars in funding for a wall along the U.S.-Mexico border. Trump gathered with congressional leaders at the White House on Friday for the latest round of negotiations over a potential funding deal. The president has also commissioned a working group to continue negotiating on Saturday. The president dug in on Saturday on his demand for $5.6 billion to fund his proposed wall as part of any deal to end the shutdown. He has also threatened to keep parts of the government shut down for years until he gets his desired funding to build the border wall.
With 800,000 Public Employees Facing Pay Freeze and Shutdown, Pence and Other Top Trump Officials to Get $10K Raise - While 800,000 federal workers are currently either working without pay or furloughed and not entitled to retroactive pay, President Donald Trump's top appointees as well as Vice President Mike Pence are scheduled to get pay raises averaging about $10,000 per year on Saturday—and the shutdown is to blame for the glaring inequity.An executive pay freeze, which caps the salaries of top government employees and has been in place since 2013, lapsed on Dec. 21 because Congress was unable to pass the spending bill in which it was included, leading to the government shutdown that's now gone on for two weeks.Without the salary caps in place, Pence is entitled to a $13,000 raise on Saturday, bringing his compensation to $243,500 per year. Cabinet secretaries will be given raises of about $11,000, bringing their pay to $210,000, while their deputies and other top agency administrators will be given significant raises as well. On social media, critics were incensed Friday at the hypocrisy of cabinet members collecting raises while employees go without any pay at all. The news of the executive pay raises was especially galling for many due to the executive order Trump signed just last week, freezing the pay of about two million public employees in 2019. The president claimed the government can't afford a 2.1 percent raise for workers, in a move that National Treasury Employees Union president Toney Reardon likened to "pouring salt into the wound."
The Left Is Taking Aim at Pelosi’s Deficit Obsession - The Congressional Progressive Caucus has had a surprisingly productive and savvy post-election session. Co-chairs Pramila Jayapal of Washington and Mark Pocan of Wisconsin cut a deal with presumptive House Speaker Nancy Pelosi to increase the number of CPC members on five key committees, through which nearly all major domestic policy flows. Member Barbara Lee was given a new House leadership position, co-chairing the panel that doles out those committee assignments. Progressives also convinced leadership to scrap a House rule, implemented by Republicans in 1994, requiring a super-majority vote for raising taxes on the majority of wage-earners, making priorities like Medicare for All or tuition-free college harder to finance. And they are fighting to establish a Select Committee on climate change that would develop “Green New Deal” legislation. But these advances did not come easy, nor are they ensured to stick. There’s also one major hurdle left to topple: the “pay as you go” rule, commonly known as “pay-go,” which demands that all new spending get offset with budget cuts or tax increases. Progressive critics argue that this creates an unlevel playing field, where Republicans blow giant holes in the tax code, as they did last year, while Democrats must pay fealty to the deficit. These critics are now mounting a fight to unshackle a future activist government. Earlier this year, amid “internal divisions” in the party, Pelosi signaled her intentionto put pay-go into the rules package. “Democrats are committed to pay-as-you-go,” her spokesman, Drew Hammill, said in June. Former Progressive Caucus chair Raúl Grijalva (D-AZ) responded by calling pay-go “an absurd idea,” saying it’s “irresponsible to try to tie up Congress’s ability to respond to economic downturns or, in the current discussion, to slash programs.” Pelosi has defended and expanded pay-go for over a decade. She first instituted it as a standing rule the day she received the speaker’s gavel in 2007, and was a driving force in passing the Statutory Pay-As-You-Go Act in 2010, signed by Barack Obama. That law puts the burden on the president to enforce across-the-board cuts if Congress violates pay-go. The prospect of any president implementing an unpopular hatchet job like that is remote. So the House rule looms large in this fight by constraining new spending at its source.
Ocasio-Cortez, Khanna to oppose Pelosi-backed rules package -- Top progressive lawmakers Rep. Ro Khanna (D-Calif.) and Rep.-elect Alexandria Ocasio-Cortez (D-N.Y.) said this week they will vote against bylaws to govern the 116th Congress that are backed by House Minority Leader Nancy Pelosi (D-Calif.), the likely next Speaker. They are objecting to the inclusion of what's known as a pay-as-you-go budgetary rule, which requires that legislation be deficit neutral, meaning any costs would need to be offset with new revenue or cuts elsewhere. Budget watchers say pay-go is an important budget tool for keeping the federal deficit in check, but Khanna and Ocasio-Cortez have railed against it. "It is terrible economics. The austerians were wrong about the Great Recession and Great Depression. At some point, politicians need to learn from mistakes and read economic history," Khanna tweeted on Wednesday. Khanna said he's not whipping on the rules package but thinks that a few other members share his opinion. He said many members want pay-go to be eliminated from the rules package so that they are not put in a difficult position. Ocasio-Cortez echoed previous criticism among progressives that the rule is "a dark political maneuver designed to hamstring progress on healthcare+other leg." Pelosi spokesman Drew Hammill shot back, arguing pay-go would be an improvement from current GOP rules, which he called "CUTGO," that prohibit tax increases from being used to pay for legislation. Without a pay-go rule in the House, he said, the White House budget office would be required by law to offset deficits from new legislation by cutting certain mandatory spending, such as Medicare. "We must replace CUTGO to allow Democrats to designate appropriate offsets (including revenue increases). A vote AGAINST the Democratic Rules package is a vote to let Mick Mulvaney make across the board cuts, unilaterally reversing Democratic initiatives and funding increases," he wrote, referencing the director of the White House Office of Management and Budget. The pay-go rule would not block deficit-producing legislation from going forward, but it would create a legislative roadblock.
Ocasio-Cortez Breaks With Pelosi in Key Early Vote for Democrats - Progressive incoming House Democrat Alexandria Ocasio-Cortez plans to lay down an early marker with party leaders on Congress’s first day by voting against a package of legislative rules because it contains an austerity provision demanded by centrists.The rules measure, set for a vote on Thursday when the new Congress convenes, will reimpose a "pay as you go" requirement that would allow challenges to legislation that adds to the deficit. The rules were negotiated by likely House Speaker Nancy Pelosi to satisfy concerns among members of the new the 235-member majority representing more conservative areas of the country.Ocasio-Cortez, a 29-year-old representative-elect from New York City, said on Twitter Wednesday that the system referred to as paygo "isn’t only bad economics," but is "also a dark political maneuver designed to hamstring progress on healthcare+other leg. We shouldn’t hinder ourselves from the start." Her tweet came after California Democrat Ro Khanna said he will oppose the rules package because of the paygo provision. Democratic leaders can lose as many 17 votes within their ranks and still pass the rules package, which is usually a mundane vote for House majorities. Many Democrats don’t like the paygo policy but are willing to support the overall rules package because they favor other provisions.The decision by Ocasio-Cortez is an early signal that the incoming lawmaker won’t be shy about using her vote and social media megaphone — she already has more than 1.7 million followers on Twitter — to oppose Pelosi when she considers it necessary. Ocasio-Cortez, a self-described democratic socialist, has become a star on the left for her pugnacious attitude in advancing liberal causes. But Ocasio-Cortez may not be joined by many of her fellow progressives in opposing the Democratic rules. Congressional Progressive Caucus co-chairs Mark Pocan of Wisconsin and Pramila Jayapal of Washington said in a joint statement Wednesday they plan to vote for the rules package after receiving assurances that paygo can be waived and won’t be an impediment to progressive priorities.House Rules Chairman Jim McGovern of Massachusetts said there had been "a lot of misunderstanding" over the proposed rules. "I’m not happy anyone wants to vote against the rules package," McGovern said, but he expressed confidence it would pass.
Progressives To Put Up Last-Minute Fight To Stop ‘Pay-Go’ Budget Rules ― A small group of progressive lawmakers are trying to derail a fiscally conservative proposal put forward by the incoming House Democratic leadership ― one that could potentially block votes on ambitious policy proposals like Medicare for All unless it’s completely paid for. The pay-as-you-go rules, commonly known as “pay-go,” would require Congress to offset any increased spending with equal cuts or revenue increases elsewhere. The provision is contained in a larger package of rules for the incoming 116th Congress, which convenes on Thursday. The fact that Democrats are using their newfound power to stress fiscal responsibility is baffling to some progressives. Fiscal responsibility was hardly mentioned in the 2018 elections, whereas big legislative ideas ― which could be harmed by pay-go rules ― were popular with voters. But the incoming leaders of the Congressional Progressive Caucus, Reps. Pramila Jayapal (D-Wash.) and Mark Pocan (D-Wis.), said they will not oppose the overall House rules package based on the pay-go provision because they’re satisfied with promises from Democratic leaders that they would waive pay-go if it interfered with significant bills, including Medicare for All. “With the assurances that PAYGO can be waived, we do plan to vote for the House rules package and proceed with legislation to fix the statute,” Jayapal and Pocan said in a joint statement. If leadership waives pay-go rules, it would allow such legislation to come up for a vote on the House floor and for the House to pass it. But that legislation would still not be able to become law unless both chambers of Congress voted to exempt it from “statutory pay-go,” a restriction enshrined in law that leadership alone cannot change.
One year since Trump’s tax cuts: a balance sheet - December marked one year since the passage of Trump’s corporate tax windfall legislation, cutting the corporate tax rate from 35 percent down to just 21 percent. Officially known as the “Tax Cuts and Jobs Act of 2017,” the legislation handed some $1.5 trillion to the major corporations and the super-rich while leaving the working class to shoulder the burden. In October, the United States Treasury announced that the federal budget deficit has risen to $779 billion, up 17 percent from the previous fiscal year. The Congressional Budget Office (CBO) issued a report in April projecting the national debt will now increase by $1.9 trillion over the next decade. The spike in the deficit will precipitate a new round off assaults on the few remaining social programs in the US—above all, Social Security, Medicare, and Medicaid. After-tax profits rose nearly 20 percent in the third quarter from the previous year as a result of the cuts, while wage growth remained static. After-tax corporate profits are now growing nearly 10 percent faster than pre-tax profits, a phenomenon which usually only occurs around recessions. The first three quarters of this year saw enormous tax savings for some of America’s largest corporations. Walmart saved $1.6 billion, with Bank of America saving $2.4 billion. AT&T and Verizon saved $2.2 billion and $1.75 billion, respectively. Apple alone has collected a whopping $4.5 billion. . A recent report by the Economic Policy Institute estimated that bonuses gave workers only 2 cents more per hour over the past year. Wages overall have increased only 3.1 percent over the course of the year, barely keeping up with the rate of inflation. By comparison, dividend payouts to corporate shareholders have set a new annual record of $420 billion. The majority of the payouts went to the wealthiest 10 percent of the US population, which owns 84 percent of all stock holdings. Capital investment—intended to fund research and development and create jobs—rose at the beginning of the year only to fall sharply in the third quarter. Conversely, stock buybacks—a method by which a corporation repurchases shares in order to artificially inflate their value without creating anything or hiring employees—surged to previously unseen heights. The total amount of S&P 500 company buybacks alone neared $200 billion in the third quarter, with a total buybacks reaching $579 billion for the first nine months of 2018. The total amount of buybacks is expected to top $1 trillion by the end of the year, according to Goldman Sachs analysts. This is almost double the amount of the previous annual buyback record of $589 billion in 2007—the year that began the financial meltdown that triggered the worst recession since the Great Depression.
Command responsible for country’s nukes tweets, then deletes, video of bombs dropping in New Year’s message (video) WAFB - – U.S. Strategic Command tweeted an unusual New Year’s Eve message on Monday, then later deleted it. The tweet read: "Times Square tradition rings in the New Year by dropping the big ball … if ever needed, we are ready to drop something much, much bigger.” The tweet included a video of B-2 bombers dropping 30,000-pound "bunker buster" bombs at a test range. A Strategic Command spokesperson said the post was all about reassuring the American people the military is ready at all times, even on New Year's Eve. Later Monday, Strategic Command tweeted an apology, saying the original post was in poor taste and does not reflect its values. Strategic Command is responsible for the nation’s nuclear weapons.
U.S. Navy pursuing block buy of two aircraft carriers: senator (Reuters) - The U.S. Navy has informed lawmakers of its intent to pursue a block purchase of two Ford-class aircraft carriers, Senator Tim Kaine’s office said on Monday, a step officials have said could save billions of dollars as the Trump administration tries to expand the size of the fleet. The decision comes nine months after the Navy expressed interest in a block buy and asked shipbuilder Huntington Ingalls Industries for detailed pricing on the cost of two aircraft carriers as it considered doubling its order for the most expensive ship in the U.S. fleet in a bid to save money. The Navy commissioned the first Ford-class aircraft carrier, the USS Gerald R. Ford, in July 2017, three years behind schedule and billions of dollars over budget. The Ford cost about $13 billion. The Navy has said it would spend about $43 billion in total to build the first three ships in the Ford class. Huntington Ingalls Chief Executive Mike Petters has said multi-ship purchases are the best way to reduce costs. Kaine, of Virginia and a member of the Senate Armed Services Committee, said a block buy would save billions and provide more stability to the Hampton Roads shipbuilding community in southeastern Virginia. “This smart move will save taxpayer dollars and help ensure the shipyards can maintain a skilled workforce to get the job done,” he said in a statement. The Navy released a force structure goal in 2016 that calls for a 355-ship fleet. Previously it had a goal of 308 ships, and the actual size of the Navy had generally been between 270 and 290 ships, according to the Congressional Research Service. A 355-ship fleet would include 12 aircraft carriers, one more than the previous goal. The United States currently operates 11 aircraft carriers, several times more than any other country.
How women took over the military-industrial complex -From the executive leadership of top weapons-makers, to the senior government officials designing and purchasing the nation’s military arsenal, the United States’ national defense hierarchy is, for the first time, largely run by women. As of Jan. 1, the CEOs of four of the nation's five biggest defense contractors — Northrop Grumman, Lockheed Martin, General Dynamics and the defense arm of Boeing — are now women. And across the negotiating table, the Pentagon's top weapons buyer and the chief overseer of the nation's nuclear stockpile now join other women in some of the most influential national security posts, such as the nation's top arms control negotiator and the secretary of the Air Force. It’s a watershed for what has always been a male-dominated bastion, the culmination of decades of women entering science and engineering fields and knocking down barriers as government agencies and the private sector increasingly weigh merit over machismo. Nearly a dozen female executives and defense leaders who spoke to POLITICO said having more women at the top affects companies and defense agencies in ways large and small — from questioning stale assumptions about the smartest way to develop weapons and provide services for the military; to negotiating better deals for the taxpayers when buying airplanes, tanks, rockets and ships; to recruiting and retaining the best and the brightest engineers and policy wonks. And they all contend the nation needs these different perspectives to confront a host of highly complex global challenges on the horizon. “To me, it’s a national security issue: We need every mind, every person engaged — male, female, every race, every level of experience,” said Lynn Dugle, a former vice president at Raytheon who is now CEO of Engility, an engineering and IT services firm that did more than $750 million of business with defense and intelligence agencies last year. “In the long term, we need to make sure talent wins."
This Is Everything That Is Wrong With Mainstream Feminism - Caitlin Johnstone --Outlets like MSNBC and Politico have been excitedly running headlines titled “The military-industrial complex is now run by women” and “How women took over the military-industrial complex“. Apparently four of America’s five top defense contractors are now women, whose names I will not bother to learn or report on because I do not care. These headlines are being derided by skeptics of the establishment mindset for the cartoonish self-parody of the corporate liberal mindset that they so clearly are, and rightly so. Pretty much everything in American mainstream liberalism ultimately boils down to advancing mass murder, exploitation and ecocide for profit while waving a “yay diversity” banner so that the NPR crowd can feel good about themselves while signing off on it. But the fact that these stories exist and have an audience can also be blamed more specifically on the failures of mainstream feminism. A lot of men (and the occasional cultishly servile woman) like to bitch about the problem with modern feminism as though it is something that hurts men, threatens men, demonizes men, or robs men of their place in society or anything else they feel entitled to. This is all dopey nonsense which amounts to nothing other than a childish temper tantrum over men losing control over women that they never should have had in the first place; it’s people whining about losing their slaves. That imaginary piffle is not what is wrong with mainstream feminism. What is wrong with mainstream feminism is exemplified perfectly in a mass media parade celebrating the rise of women to the top of the most depraved industry on earth. The problem that true feminism seeks to address is not that there aren’t enough women at the top of the corporate ladder, or that Americans refused to elect a woman to do the bombing, exploiting and oppressing in 2016. The problem has always been that we’re trying to value women with a value system created by a few very powerful men. By leaving in place the value system created by patriarchy (i.e. capitalism), we are now valuing women but only for their ability to play men’s games. Nobody has ever become a billionaire by being a mother, even the very best mother in the world, and nobody ever will because capitalism was designed by men, for men, to value men’s qualities. This has created a species-threatening imbalance because inequality is baked in to the system. When men reluctantly allowed women out of their house-shaped cages in the sixties, they did so on the condition that they would not change a thing about themselves. Women could play, but it was the women who had to change. As usual.
Reporter Quits NBC Citing Network’s Support For Endless War - Caitlin Johnstone - A journalist with NBC has resigned from the network with a statement which highlights the immense resistance that ostensibly liberal mass media outlets have to antiwar narratives, skepticism of US military agendas, and any movement in the opposite direction of endless military expansionism.“January 4 is my last day at NBC News and I’d like to say goodbye to my friends, hopefully not for good,” begins an email titled ‘My goodbye letter to NBC’ sent to various contacts by William M Arkin, an award-winning journalist who has been associated with the network for 30 years. “This isn’t the first time I’ve left NBC, but this time the parting is more bittersweet, the world and the state of journalism in tandem crisis,” the email continues. “My expertise, though seeming to be all the more central to the challenges and dangers we face, also seems to be less valued at the moment. And I find myself completely out of synch with the network, being neither a day-to-day reporter nor interested in the Trump circus.” The lengthy email covers details about Arkin’s relationship with NBC and its staff, his opinions about the mainstream media’s refusal to adequately scrutinize and criticize the US war machine’s spectacular failures in the Middle East, how he “argued endlessly with MSNBC about all things national security for years”, the fact that his position as a civilian military analyst was unusual and “peculiar” in a media environment where that role is normally dominated by “THE GENERALS and former government officials,” and how he was “one of the few to report that there weren’t any WMD in Iraq” and remembers “fondly presenting that conclusion to an incredulous NBC editorial board.”
American Exceptionalism Is a Dangerous Myth - Having a global hegemon that preaches human rights — while propping up dictators and incinerating schoolchildren — is bad. But having one that does those things while preaching nihilism is worse; not least because even a nominal commitment to liberal values can function as a constraint against their violation. Trump’s distaste for the whole “shining city on a hill” shtick has, among other things, enabled the Pentagon to tolerate higher levels of civilian casualties in the Middle East, the Israeli government to accelerate settlement expansion in the occupied West Bank, and the Saudi crown prince to take a bonesaw to international law.It’s understandable, then, that many liberal intellectuals are eager to revive the national myths that Trump has busted. Such thinkers concede that Trump has highlighted flaws in the triumphalist, Cold War narrative about American global leadership. And they acknowledge the necessity of rethinking what “leading the free world” truly requires of the United States. But they nevertheless insist that America’s self-conception as an exceptional power — which is to say, as a hegemon whose foreign policy is shaped by universal ideals (as opposed to mercenary interests) — isn’t just a beneficent fiction, but an actual fact. And that compulsion is unfortunate; because it will be difficult for liberals to realize their vision for America’s exceptional future, if they refuse to grapple with its unexceptional past. In the current issue of The Atlantic, former Hillary Clinton adviser Jake Sullivan presents one of the more compelling cases for making America exceptional again. Against Dick Cheney’s arrogant, unilateralist approach to world leadership — and Trump’s nihilistic disavowal of America’s international obligations — Sullivan offers a call for restoring the U.S. to its former role as a benevolent hegemon, one whose global supremacy is legitimated by its demonstrable commitment to spreading peace, democracy, and shared prosperity. Sullivan argues that America should strive to build (and/or fortify) multilateral institutions of global governance; shape its geopolitical strategy around the interests of working people (by, among other things, cracking down on tax havens and international corruption); shift resources away from military pork and toward diplomacy, development, and technology; and exercise more humility when contemplating foreign intervention.
Russia announces plans to set up its first ever military base in the Caribbean - the country's largest presence in the region since the Cuban Missile Crisis in 1962 - Russia has announced plans to set up its first ever military base in the Caribbean after striking a deal with cash-strapped Venezuela. The state-sponsored TASS news agency reported that Russian experts had selected the island of La Orchila, 125 miles northeast of Caracas, as a possible military base up to 10 years ago. According to the agency, Russia will now be 'deploying Tu-160 strategic aircraft to the island', after seeking permission from Venezuelan leader Nicolas Maduro. The deployment will represent the one of the largest semi-permanent postings of Russian military hardware to the region since the Cuban Missile Crisis in 1962 - which marked the height of the Cold War. A Russian Tu-160 heavy strategic bomber is seen after landing in Maiquetia, Venezuela last Monday as part of an exercise in the Caribbean Venezuelan law reportedly prohibits a full-time military base from being set up within its borders. However, the deployment of supersonic Russian jets would be 'temporary' - according to official sources. 'Our strategic bombers will not only not have to return to Russia every time, but also won't perform aerial refueling while on a patrol mission in the Americas. The news comes just days after two of Russia's nuclear-capable Tu-160 strategic bombers flew over the Caribbean sea during a 10-hour training mission with the Venezuelan Air Force amid escalating tensions between Moscow and Washington.
Putin Tells Trump That Russia Is Open For Dialogue On An Extensive Agenda -In the latest attempt by Russia to offer an olive branch to the US, on Sunday Russian President Vladimir Putin told his U.S. counterpart Donald Trump in a New Year letter that Moscow was ready for dialogue on "the most extensive agenda”, the Kremlin said following a series of failed attempts to hold a new summit, most recently in November, when Trump abruptly canceled a planned meeting with Putin on the sidelines of a G20 summit in Argentina, citing tensions about Russian forces opening fire on Ukrainian navy boats and then seizing them.Trump and Putin also failed to hold a full-fledged meeting in Paris on the sidelines of the centenary commemoration of the Armistice. The two leaders held their one and only summit in Helsinki in July.An official statement by the Kremlin said that "Vladimir Putin stressed that Russia-US relations are the most important factor behind ensuring strategic stability and international security, and reaffirmed that Russia is open to dialogue with the United States on the most extensive agenda."Moscow also said one of the key issues it wanted to discuss with the United States is Washington’s plans to withdraw from a Cold War era nuclear arms pact.In a separate letter to Syrian President Bashar al-Assad, Putin pledged continuation of aid to the Syrian government and people in the “fight against terrorism, in defense of state sovereignty and territorial integrity”. Putin also sent New Year greetings to other world leaders including prime ministers Theresa May of Britain, wishing “well-being and prosperity to the British people”, the Kremlin said in a year that saw a dramatic deterioration in relations between the two nations; according to Reuters, Russia’s embassy in London said on Friday that Moscow and London had agreed to return some staff to their respective embassies after they expelled dozens of diplomats early this year. Diplomatic relations ground to a halt after Britain expelled 23 Russian diplomats over accusations the Kremlin was behind a nerve toxin attack in March on former double agent Sergei Skripal and his daughter in the English city of Salisbury.
North Korea Threatens To Abandon US Talks If No Sanctions Relief Offered - Following what was a landmark 2018 for isolated North Korea, Kim used a New Year's Eve address to try and browbeat the US into offering some sanctions relief. In a veiled threat to break off talks, Kim threatened to take a "new path" on nuclear talks if the US doesn't acquiesce to the Hermit Kingdom's demands. While Kim affirmed his willingness to meet with Trump (the leaders have agreed to a second summit, but the details have not been set), he didn't offer any concessions to help advance negotiations, which have stalled over the US's insistence that the North finish the process of denuclearlization before economic sanctions are lifted. Meanwhile, the North has demanded that the US gradually lift sanctions as the North hits certain benchmarks. The North has continued to flout sanctions by arranging ship-to-ship transfers of oil and other energy products. These have often been facilitated by China, Russia and Iran - a sign that the North has continued to cozy up to Moscow, Tehran and Beijing even as it pursues warmer relations with Washington and Seoul. Some intelligence analysts cite this - as well as satellite images revealing more secret missile bases - as evidence that the North is merely toying with the US to try and wrangle some relief from stifling sanctions, and that Kim has no intention of following through on his denuclearization promises. According to Bloomberg, Kim said he'd be willing to work out a compromise that would be "welcomed by the international community.""I am willing to sit with the U.S. president any time in the future and will strive to produce outcomes that would be welcomed by the international community," Kim said, wearing a suit and tie and seated in a plush leather chair overlooked by paintings of his father and grandfather at work."However, if the United States does not deliver its promise and misjudge our people’s patience, making unilateral demands to continue sanctions and put pressure on us, we will have no choice but to seek a new path to protect the country’s independence, interests and peace on the Korean Peninsula," Kim said. The speech was well received by the North's neighbors, with South Korea heralding Kim's decision to publicly reference "complete denuclearization for the first time. Kim also demanded that any deal between the US and the North include a permanent halt to military exercises on the Korean peninsula.
A looming threat to the US-South Korea alliance - The alliance between the Republic of Korea and the United States may be about to go off the rails. Two critical events occurred in December 2018 that do not bode well for the future of this crucial alliance. First, talks between the ROK and U.S. governments collapsed without reaching a new Special Measures Agreement (SMA) to fund U.S. troops on the Peninsula before the current deal expired on December 31. At the same time, President Trump has firmly reiterated his transactional view of alliances in his decision to withdraw U.S. forces from Syria, substantially draw down troops in Afghanistan, and in his tweets condemning Secretary Mattis’ resignation letter, which expressed the fundamental differences in views on the importance of alliances to the U.S.Trump may see the SMA impasse as an opportunity to end the U.S. presence. At his press conference on June 12th at the Singapore summit, he declared that he wanted to bring U.S. troops home. In June and August, he proclaimed that military exercises in Korea were not only “provocative war games” but they were too expensive. His December 24 tweet, now infamous in Korea, may be most ominous for the alliance: “We are substantially subsidizing the Militaries of many VERY rich countries all over the world, while at the same time these countries take total advantage of the United States, and our TAXPAYERS, on Trade. General Mattis did not see this as a problem. I DO, and it is being fixed!” The SMA is negotiated every five years and establishes the funding levels the ROK government provides to support the stationing costs of U.S. forces in Korea. These funds cover logistics, utilities, maintenance and construction of facilities, and local Korean workers’ salaries. After ten meetings, no agreement could be reached and, according to Korean reports, the negotiators are back to square one. Trump seems not to recognize that the ROK makes significant contributions to its own defense. In 2017, 2.7 percent of its GDP went to defense — a higher percentage than any member of NATO except the U.S. Furthermore, the ROK’s 2018 defense budget increased by 9.9 pecent, or $40 billion, the largest in history. It has an active force of 625,000 troops with 28,000 Americans stationed in South Korea. Under the current SMA, the ROK covers half of the roughly $1.6 billion basing cost for American troops, but according to reports, Trump wants Seoul to pay 100 percent.
Iran Rejects Pompeo Warning To Halt Its Space Launches -- Hours after Secretary of State Mike Pompeo threatened Iran via Twitter statement over plans to fire off Space Launch Vehicles with, as Pompeo claimed, "virtually the same technology as ICBMs" in a "defiant" launch that will "advance its missile program," Iran has responded. Iranian Foreign Minister Javad Zarif shot back via Twitter saying "Iran's launch of space vehicles — & missile tests — are NOT in violation of Res 2231," which is the UN resolution which endorsed the Joint Comprehensive Plan of Action (JCPA) on Iran's nuclear program — which the Trump administration pulled out of last May. FM Zarif wrote on Thursday in response to Pompeo while warning "threats engender threats" and linking to the UN text: Iran's launch of space vehicles — & missile tests — are NOT in violation of Res 2231. The US is in material breach of same, & as such it is in no position to lecture anyone on it. Reminder to the US: 1. Res 1929 is dead; 2. threats engender threats, while civility begets civility. Iran’s defense ministry previously announced plans for three Space Launch Vehicle (SLV) launches in “the coming months,” according to an official statement. This after in late November Iranian Deputy Defense Minister General Qassem Taqizadeh first unveiled plans to send three Iranian made satellites into space soon. “The satellites have been made by domestic experts and will be put on various orbits,” Taqizadeh said.
Trump: Iran “Can Frankly Do Whatever They Want” in Syria — In a long and rambling interview with reporters at the White House on Wednesday, US President Donald Trump said he doesn’t care about Iran’s presence in Syria, refused to give a timetable on when US troops will be leave and referred to the war-torn country as “sand and death”. “Iran is no longer the same country,” he told reporters at the end of a cabinet meeting. “Iran is pulling people out of Syria. They can do what they want there, frankly, but they’re pulling people out,” he added. Trump also refused to give a specific timeline on when a complete withdrawal of the US troops stationed in Syria will take place, but officials told the New York Times on Monday that he had caved to the military on a four-month withdrawal. The US has at least 2,000 troops stationed in the region, where it has also waged an aerial campaign in support of the Kurdish-led Syrian Democratic Forces (SDF) in the fight against the Islamic State (IS) group. The White House said in mid-December last year that it had already started withdrawing troops as the battle against IS was moving into a new phase. Contradicting Trump’s claim, France’s defence minister said on 20 December that IS had been weakened but not been wiped from the map in Syria and that the fight to defeat them definitively in their remaining pockets needed to carry on. The decision to get out of Syria reportedly prompted US Secretary of Defense James Mattis to quit, where in his resignation letter he cited policy differences as the reason to step down. Trump also touched on his thoughts on Kurdish groups fighting in Syria, saying the US should “protect the Kurds” but called the country “sand and death”. “We want to protect the Kurds but I don’t want to be in Syria forever. It’s sand and it’s death,” Trump said.
Trump’s Syria Withdrawal is a Chance for Peace – Jeff Sachs – President Donald Trump’s announced withdrawal of US forces from Syria has met with near-universal condemnation by Democrats and Republicans alike. That says less about Trump than it does about the US foreign policy establishment’s blinkered vision. The mainstream of both political parties exhibits certain reflexive judgments: that the US must maintain a troop presence all over the world in order to prevent adversaries from filling a vacuum; that US military might holds the key to foreign policy success; and that America’s adversaries are implacable foes impervious to diplomacy. Trump’s withdrawal from Syria could indeed be a dangerous prelude to an expanded regional war; yet, with imagination and diplomacy, the withdrawal could be a critical step on the path to an elusive peace in region. The US foreign policy establishment had rhetorically justified America’s presence in Syria as part of the war on the Islamic State (ISIS). With ISIS essentially defeated and dispersed, Trump called the establishment’s bluff. Yet suddenly, the establishmentdeclared the actual reasons for the extended US presence. Trump’s move, it was charged, would hand geopolitical advantages to Syria’s Bashar al-Assad, Russia’s Vladimir Putin, and Iran’s Ali Khamenei, while imperiling Israel, betraying the Kurds, and causing other ills that are essentially unrelated to ISIS. This shift had the benefit of unmasking America’s real purposes in the Middle East, which are not so obscure, after all, except for the fact that mainstream pundits, US establishment strategists, and members of Congress tend not to mention them in polite company. The United States has not been in Syria (or Iraq, Afghanistan, Yemen, the Horn of Africa, Libya, and elsewhere in the region) because of ISIS. In fact, ISIS was more a consequence than a cause of the US presence. The real purposes have been US regional hegemony; and the real consequences have been disastrous. The truth about the US presence in Syria has rarely been told. But one can be sure that the US has had no scruples about democracy in Syria or elsewhere in the region, as its warm embrace of Saudi Arabia amply demonstrates. The US decided to promote an insurgency to overthrow Bashar al-Assad in 2011 not because the US and allies like Saudi Arabia longed for Syrian democracy, but because they decided that Assad was a hindrance to US regional interests. Assad’s sins were clear: he allied with Russia, and he received support from Iran.
Trump “Reconsidering” Withdrawal of US Troops From Syria Thanks to Lindsey Graham — President Trump is “reconsidering” his strategy to pull US forces out of Syria following an “eye-opening trip to Iraq” the day after Christmas, Bloomberg reports.Sen. Lindsey Graham (R-SC) who sits on the Senate Armed Forces Committee – a harsh critic of Trump’s announced pullout, said earlier Sunday that he would try to change Trump’s mind during a private lunch since the Islamic state isn’t quite defeated in the region as the President had previously stated. “I feel better about Syria than I felt before I had lunch,” said Graham after he left the White House. “I think the president is taking this really seriously, and the trip to Iraq was well timed.” Trump has apparently devised a strategy with his generals in the field that “makes sense” according to the Senator.Lindsey Graham said it was a successful lunch and the discussion he had with Trump made him "feel much better" about the decision to pull troops out of Syria >> https://t.co/tTa161IN8Apic.twitter.com/jNvIrkuxYt On Sunday morning, Graham told CNN‘s “State of the Union” that Trump had spoken with General Joseph Dunford, chairman of the Joint Chiefs of Staff. “I got a call from General Dunford,” said Graham. “The president is reconsidering how we do this.” The White House didn’t immediately respond to a request for comment on whether Trump is considering reversing the decision, announced by tweet earlier this month, to pull U.S. troops from Syria. That move, which came against the advice of the president’s top national security advisers, triggered the resignation of Defense Secretary Jim Mattis.Trump has already has backed away from the notion of an immediate withdrawal, saying a week ago that the pullout of U.S. troops from the area would be “slow & highly coordinated.” –Bloomberg When asked whether President Trump would be to blame if ISIS became more powerful after US troops leave Syria, Graham responded that the blame belongs to former President Barack Obama due to his decision to withdraw from Iraq in 2011.“Everything we’re dealing with today falls on Obama’s watch. He’s the one who withdrew from Iraq,” said Graham.
Under Pressure, Trump Sought Pledges From Erdogan About Fate of Syrian Kurds — After announcing the US withdrawal from Syria in the wake of a phone call with Turkish President Recep Tayyip Erdogan, President Trump held a second call days later seeking assurances from Erdogan about what would happen to the Syrian Kurdish territory Turkey is about to invade. Trump told Erdogan he was “under pressure,” and needed a pledge from Erdogan that the Turkish invasion wouldn’t lead to a humanitarian crisis or destabilize the region. Exactly how this result was envisioned is unclear. Erdogan’s pledges weren’t super reassuring either, as he only told Trump he had no quarrel with Syrian Kurds per se, and reiterated his position that the Kurdish YPG are terrorists that need to be confronted militarily. Yet the YPG is also the de facto regional government of Rojava, the Syrian Kurdish territory, and invading that region, encompassing one third of Syria, and destroying that faction through force of arms, can be expected to both destabilize the region and cause a big humanitarian crisis.
Donald Trump considering delay to US withdrawal from Syria - UAE National -- President Donald Trump appears to be considering keeping US troops in Syria longer than he originally planned after talks with one of his biggest backers in the Senate and pressure from his security advisers and the State Department. The Trump administration announced two weeks ago an imminent withdrawal of the roughly 2,000 US troops in Syria that was initially slated to start in 30 days, but Senator Lindsey Graham told reporters after a two-hour lunch meeting with the president on Sunday that the process was in a state of re-evaluation.“I think we are in a pause situation where we are re-evaluating what is the best way to achieve the president’s objective of having people pay more and do more,” Mr Graham said.“He [Trump] promised to destroy ISIS. He’s going to keep that promise. We’re not there yet, but as I said today, we’re inside the 10-yard line and the president understands the need to finish the job,” Mr Graham said. He later tweeted that any US withdrawal would take place only after ensuring three conditions: the permanent defeat of ISIS; blocking Iran from filling the void; and ensuring that US-backed Kurdish forces were protected. The President will make sure any withdrawal from Syria will be done in a fashion to ensure:
- 1) ISIS is permanently destroyed.
- 2) Iran doesn’t fill in the back end, and
- 3) our Kurdish allies are protected. — Lindsey Graham (@LindseyGrahamSC) December 30, 2018
Mr Graham quoted Mr Trump as being “worried about Iranian influence” and the prospect of Tehran establishing a land bridge from Iraq into Lebanon through Syrian territory. While these concerns contradict Mr Trump’s past assertions that the only mission for US forces in Syria was defeating ISIS and that this had been accomplished, it is not uncommon for the president to change his mind.
Trump- Syria Is Sand And Death , US Exit Will Be Over A Period Of Time - After early this week Trump's promised "full" and "immediate" US troop withdrawal from Syria was put on shaky ground following a prior meeting with hawk Sen. Lindsey Graham, and following immense push back from the career Washington deep state, the president is showing signs that he could be changing his tune. President Trump said on Wednesday the US will get out of Syria "over a period of time" and in such a way that will protect America's Kurdish partners on the ground, at a moment pro-Turkish forces backed by Turkey's army are set to invade and annex Kurdish enclaves in the north of the country. President Donald Trump: ...”United States wants to protect Kurds in Syria even as it pulls forces out.” pic.twitter.com/jNcP0a30Ot— Mutlu Civiroglu (@mutludc) January 2, 2019 During a Wednesday Cabinet meeting in front of reporters - the first of the new year - Trump did not provide a timetable for a planned military exit while strongly emphasizing he would "not forget" the extraordinary sacrifices the Kurds made in the fight against ISIS. The president said: We have to help them, I want to help them...They fought with us, they died with us... thousands of Kurds died fighing ISIS. they died for us and with us, and for themselves... I don't forget. He did, however, deny widespread reports that he had discussed setting a four month timetable for the withdrawal of 2000+ American troops. Previous language of a "hasty" pullout decision reportedly in part prompted Defense Secretary Jim Mattis to resign. On Monday Trump appeared to back off prior language of an "immediate" and hasty pullout while emphasizing the operation would be slow. "We're slowly sending our troops back home to be with their families, while at the same time fighting Isis remnants," he stated on Twitter Monday.
Trump says there is no set date for Syria troop withdrawal - In a meandering and at times incoherent White House cabinet meeting held in front of the media, US President Donald Trump defended his surprise December 19 announcement of his decision to withdraw all US troops from Syria, while indicating that there is no set timetable for doing so. Initially there were reports from within the administration that US forces—officially numbered at 2,000 but possibly consisting of as many as twice that number—would be brought out of Syria within 30 days. Subsequently, the time frame was put at 60 to 100 days. Since the beginning of the new year, it has been reported that the deadline has been extended to 120 days. The withdrawal decision provoked the resignation of Defense Secretary General James Mattis, who penned a letter implicitly criticizing Trump for abandoning allies and failing to confront Russia, as well as that of Brett McGurk, the US envoy to the so-called war on the Islamic State of Iraq and Syria (ISIS). The announcement likewise provoked a storm of criticism from both Democratic and Republican members of Congress.At Wednesday’s cabinet meeting, Trump answered a reporter’s question on the timetable for the Syria withdrawal by denying that he had signed off on a three-month period or that he had ever used the words “fast or slow.” Instead, he merely reiterated, “I’m getting out—we’re getting out of Syria.” CNN reported that the 120-day framework had been presented by the US military command, which claimed that it would be impossible to organize a safe and orderly pullout any sooner. Part of the problem is the huge amounts of weaponry and ammunition that the US military has sent into Syria, which cannot be removed as quickly as the troops themselves and which the Pentagon refuses to leave behind.
How Critics of Trump’s Syria Withdrawal Fueled the Rise of ISIS — President Donald Trump’s announcement of an imminent withdrawal of US troops from northeastern Syria summoned a predictable paroxysm of outrage from Washington’s foreign policy establishment. Former secretary of state and self-described “hair icon” Hillary Clinton perfectly distilled the bipartisan freakout into a single tweet, accusing Trump of “isolationism” and “playing into Russia and Iran’s hands.” Actions have consequences, and whether we’re in Syria or not, the people who want to harm us are there & at war. Isolationism is weakness. Empowering ISIS is dangerous. Playing into Russia & Iran’s hands is foolish. This President is putting our national security at grave risk. — Hillary Clinton (@HillaryClinton) December 21, 2018 Michelle Flournoy, the DC apparatchik who would have been Hillary’s secretary of defense, slammed the pull-out as “foreign policy malpractice,” while Hillary’s successor at the State Department, John Kerry, threw bits of red meat to the Russiagate-crazed Democratic base by branding Trump’s decision “a Christmas gift to Putin.” From the halls of Congress to the K Street corridors of Gulf-funded think tanks, a chorus of protest proclaimed that removing U.S. troops from Syria would simultaneously abet Iran and bring ISIS back from the grave. Yet few of those thundering condemnations of the president’s move seemed able to explain just why a few thousand U.S. troops had been deployed to the Syrian hinterlands in the first place. If the mission was to destroy ISIS, then why did ISIS rise in the first place? And why was the jihadist organization still festering right in the midst of the U.S. military occupation? Too many critics of withdrawal had played central roles in the Syrian crisis to answer these questions honestly. They had either served as media cheerleaders for intervention, or crafted the policies aimed at collapsing Syria’s government that fueled the rise of ISIS. The Syrian catastrophe was their legacy, and they were out to defend it at any cost.
Majority of Americans Back Trump’s Drawdowns in Syria, Afghanistan: Poll — In the weeks since the White House announced an upcoming withdrawal from Syria, media coverage and comments from lawmakers on the matter have been almost uniformly critical. In many cases, the coverage has been hysterically so, warning of an imminent second 9/11 over it.Yet this consistent narrative isn’t informing the public nearly so much as opinion-makers likely expected it to. A new Harvard CAPS/Harris poll showed a narrow majority of American voters remain in favor of the withdrawal of US troops from Syria and Afghanistan.The polling figures showed 52% in favor of the Trump-announced drawdowns, and 48% against. The polls also showed a narrow 54-46% majority in favor of keeping troops “in places like Syria and Iraq,” though no Iraq drawdown is being contemplated at the moment.After weeks of condemning the Syria pullout, media analysts are trying to downplay the significance of the poll showing a majority of voters supporting it, suggesting that there isn’t deep support for either position. In reality, the persistence of the majority support speaks volumes, after weeks of consistent media portrayals of it as a colossal mistake. While there may always be some ambivalence on the margins, for 52% to remain in favor of a pullout shows a lot of resilience.
After Syria, Trump Should Clean Out His National Security Bureaucracy - President Donald Trump has at last rediscovered his core foreign policy beliefs and ordered the withdrawal of U.S. troops from Syria. Right on cue, official Washington had a collective mental breakdown. Neocons committed to war, progressives targeting Trump, and centrists determined to dominate the world unleashed an orgy of shrieking and caterwauling. The horrifying collective scream, a la artist Edvard Munch, continued for days. Trump’s decision should have surprised no one. As a candidate, he shocked the Republican Party establishment by criticizing George W. Bush’s disastrous decision to invade Iraq and urging a quick exit from Afghanistan. As president, he inflamed the bipartisan War Party’s fears by denouncing America’s costly alliances with wealthy industrialized states. And to almost everyone’s consternation, he said he wanted U.S. personnel out of Syria. Once the Islamic State was defeated, he explained, Americans should come home. How shocking. How naïve. How outrageous. The president’s own appointees, the “adult” foreign policy advisors he surrounded himself with, disagreed with him on almost all of this—not just micromanaging the Middle East, but subsidizing Europeans in NATO, underwriting South Korea, and negotiating with North Korea. His aides played him at every turn, adding allies, sending more men and materiel to defend foreign states, and expanding commitments in the Middle East. Last spring, the president talked of leaving Syria “very soon.” But the American military stayed. Indeed, three months ago, National Security Advisor John Bolton announced an entirely new mission: “We’re not going to leave as long as Iranian troops are outside Iranian borders and that includes Iranian proxies and militias.” That was chutzpah on a breathtaking scale. It meant effectively that the U.S. was entitled to invade and dismember nations, back aggressive wars begun by others, and scatter bases and deployments around the world. Since Damascus and Tehran have no reason to stop cooperating—indeed, America’s presence makes outside support even more important for the Assad regime—Bolton was effectively planning a permanent presence, one that could bring American forces into contact with Russian, Syrian, and Turkish forces, as well as Iranians.
Trump hasn’t ordered Pentagon to withdraw troops from Afghanistan - A White House spokesman said Friday that President Trump has not yet ordered the Pentagon to pull troops out of Afghanistan, contradicting reports last week that the president has called for the withdrawal of 7,000 troops. “The president has not made a determination to drawdown U.S. military presence in Afghanistan and he has not directed the Department of Defense to begin the process of withdrawing U.S. personnel from Afghanistan,” Garrett Marquis, a spokesman for the National Security Council, said in an emailed statement to Bloomberg. The official statement contradicts previous reports published by Bloomberg and various media outlets from unidentified U.S. officials who said the Pentagon was withdrawing around 7,000 troops stationed in Afghanistan. There are currently more than 14,000 U.S. service members in Afghanistan, primarily to advise and assist Afghan Security Forces in the fight against al Qaeda and other militant groups. Trump has long railed against the 17-year-old war, the longest military conflict in U.S. history. He campaigned on the promise to end “nation-building” missions such as efforts to train Afghan troops but was persuaded by defense officials and then-national security adviser H.R. McMaster to send 4,000 more troops to the country. Reports of troops' possible drawdown from Afghanistan came after Trump’s announcement that the U.S. would be withdrawing troops from Syria. Trump claimed that the U.S. “defeated ISIS in Syria” and called for more than 2,000 U.S. service members fighting the Islamic State in Iraq and Syria and backing Syrian Kurdish forces in the mission to return home. The sudden decision to pull troops out of Syria was highly criticized and has been widely credited with prompting Defense Secretary James Mattis to resign. Mattis wrote in a striking resignation letter that Trump should choose a replacement "whose views are better aligned with yours."
Time to Get Out of Afghanistan - NYT - The decision by President Trump to withdraw 7,000 of the roughly 14,000 American troops left in Afghanistan, possibly by summer, has raised new concerns about his impulsive behavior, especially given his nearly simultaneous decision to pull out all American forces from Syria against the advice of Defense Secretary Jim Mattis. But the downsizing of the Afghan mission was probably inevitable. Indeed, it may soon be time for the United States to get out of the country altogether. No other country in the world symbolizes the decline of the American empire as much as Afghanistan. There is virtually no possibility of a military victory over the Taliban and little chance of leaving behind a self-sustaining democracy — facts that Washington’s policy community has mostly been unable to accept.While many American troops stay behind steel-reinforced concrete walls to protect themselves from the very population they are supposed to help, it is striking how little discussion Afghanistan has generated in government and media circles in Washington. When it comes to Afghanistan, Washington has been a city hiding behind its own walls of shame and frustration.While the Chinese, Pakistanis, Indians and Iranians are all developing competing energy and mining projects in and next door to Afghanistan, the United States appears to have little commercial future in the country, even though it spends about $45 billion there annually. The total cost of the war could reach as high as $2 trillion when long-term costs are factored in, according to Brown University's Cost of War Project. All that to prop up an unstable government that would most likely disintegrate if aid were to end.Indeed, Afghanistan represents the triumph of the deterministic forces of geography, history, culture, and ethnic and sectarian awareness, with Pashtuns, Tajiks, Uzbeks and Hazaras and other groups competing for patches of ground. Tribes, warlords and mafia-style networks that control the drug trade rule huge segments of the country.
How the War Party Lost the Middle East - Patrick Buchanan - “Assad must go, Obama says.” So read the headline in The Washington Post on August 18, 2011. The story quoted President Barack Obama directly: “The future of Syria must be determined by its people, but President Bashar al-Assad is standing in their way. …[T]he time has come for President Assad to step aside.” France’s Nicolas Sarkozy and Britain’s David Cameron signed on to the Obama ultimatum: Assad must go! Seven years and 500,000 dead Syrians later, it is Obama, Sarkozy, and Cameron who are gone. Assad still rules in Damascus, and the 2,000 Americans in Syria are coming home. Soon, says President Donald Trump. But we cannot “leave now,” insists Senator Lindsey Graham, or “the Kurds are going to get slaughtered.” Question: Who plunged us into a Syrian civil war, and so managed our intervention that were we to go home after seven years our enemies will be victorious and our allies will “get slaughtered”? Seventeen years ago, the U.S. invaded Afghanistan to oust the Taliban for granting sanctuary to al-Qaeda and Osama bin Laden. U.S. diplomat Zalmay Khalilzad is today negotiating for peace talks with that same Taliban. Yet according to former CIA director Mike Morell, writing in The Washington Post today, the “remnants of al-Qaeda work closely” with today’s Taliban. It would appear that 17 years of fighting in Afghanistan has left us with these alternatives: stay there and fight a forever war to keep the Taliban out of Kabul, or withdraw and let the Taliban overrun the place. Who got us into this debacle?
Opinion: We were winning when we left – by Presidents Barack Obama and George W. Bush - As former Presidents of the United States, we feel obligated to address President Donald Trump’s sudden and reckless decision to withdraw U.S. troops from Afghanistan after a mere seventeen years of combat operations. We are not sure how the war could have gone so wrong in just the two years he has been president, but rest assured that we were winning in Afghanistan when we left the White House. In October 2001, the United States launched Operation Enduring Freedom, sending American Soldiers and Marines to drive the Taliban out of Afghanistan. By the time Trump was inaugurated as president, we had managed to retake all of Afghanistan’s provinces from the Taliban, some as many as six times. In January 2009, at the end of the Bush presidency, we had 30,000 Americans deployed to Afghanistan. Security had improved, shops were reopening, elections were being held, and the Afghan army was learning how to fight. In January 2017, at the end of the Obama presidency, we had 8,000 Americans deployed to Afghanistan. Security had improved, shops were reopening, elections were being held, and the Afghan army was learning how to fight. It is hard to argue with this continuous record of success. Any decade now, the people and government of Afghanistan will stop relying on U.S. soldiers and U.S. aid money to defend their homes. We urge President Trump to reject his failed policy of withdrawing from Afghanistan and instead embrace our failed policy of remaining. After all, it’s not like any of our kids will be going. George W. Bush served as the 43rd President of the United Sates. In the eight years he was president, 641 Americans died in Afghanistan. Barack Obama served as the 44th President of the United Sates. In the eight years he was president, 1,747 Americans died in Afghanistan.
Donald Trump pleased Europeans are unhappy with him - In his first Cabinet meeting of 2019, US President Donald Trump reflected on his lack of popularity in Europe. The president told reporters on Wednesday that he was unfazed by low approval ratings among Europeans, saying it was his job to demand that Europe treat the US more fairly. "That's why I got elected," Trump said, reiterating that European countries must be pushed to increase their share of defense spending, a point he has made repeatedly when talking about NATO funding and defense and security in Europe. "I shouldn't be popular in Europe. If I was popular in Europe, I wouldn't be doing my job," he added. Trump said Europe was treating the US unfairly on both trade and defense, but he blamed past US presidents for allowing the US to pay for the security of nations. "Germany pays 1 percent; they should be paying 4 percent," Trump said, referring to German defense spending.
The Mattis Dilemma - The resignation letter of Secretary of Defense James Mattis that was published last Thursday revealed much of the Deep State mindset that has produced the foreign policy catastrophes of the past seventeen years. Mattis, an active duty general in the Marine Corps who reportedly occasionally reads books, received a lot of good press during his time at Defense, sometimes being referred to as “the only adult in the room” when President Donald Trump’s national security and foreign policy team was meeting. Conveniently forgotten are Mattis comments relating to how to “Be polite, be professional, but have a plan to kill everybody you meet.” His sobriquet in the Corps was “Mad Dog.” In the media firestorm that has followed upon General Mattis’s resignation, he has been generally lauded as a highly experienced and respected leader who has numerous friends on both sides of the aisle in Congress. Of course, the press coverage should be taken with a grain of salt as it is designed less to praise Mattis and more to get at Trump over the decision to leave Syria, which is being assailed by both neoliberals and neoconservatives who believe that war is the health of the state. The arguments against the Trump decisions to depart from Syria and downsize in Afghanistan are contrived for the most part and based on the premise that American intervention in places that Washington deems not to be sufficiently promoting democracy, rule of law and free trade is a good thing. Peter Ford, former British Ambassador to Syria, put it nicely when discussing the reaction in the media: “Trump's critics…will have the vapors about 'losing ground to Russia', 'making Iran's day', and 'abdicating influence,' but their criticism is ill-founded. Contrary to their apparent belief, the US does not have a God-given right to send its forces anywhere on the planet it deems fit. The central argument of the Mattis resignation letter that is being cited by critics relates to Washington’s relationship with the rest of the world and is framed as a failure by President Trump to understand who are friends and who are enemies. General Mattis does indeed hold views that were shaped by four decades of experience, but most of it was bad and produced wrong conclusions about America’s place in the world. The Cold War was essentially a bi-polar conflict pitting two adversaries that had the ability to destroy all life on the planet. It generated a Manichean viewpoint on good vs. evil that did not reflect reality which was succeeded by a global war on terror declared by Washington that also exploited the good and evil paradigm. Mattis was a product of that kind of thinking, which was also fueled by the concept of American exceptionalism, which saw the United States as the proper promoter and enforcer of universal values.
Kelly repeatedly told aides Trump wasn't up for job as president: report - Outgoing White House chief of staff John Kelly has frequently told aides that President Trump is not up for the task of being president, according to The New York Times. The newspaper, citing two former administration officials, also reported that Kelly was known to tell aides that he had the “worst job in the world." The report arrived after Kelly, who is set to leave the White House next month, made critical statements about the administration and Trump in an expansive interview with the Los Angeles Times. Among other things, Kelly said that the border wall that Trump has repeatedly demanded is not actually a wall. "To be honest, it’s not a wall,” Kelly said to the newspaper. “The president still says ‘wall’ — oftentimes frankly he’ll say ‘barrier’ or ‘fencing,’ now he’s tended toward steel slats. "But we left a solid concrete wall early on in the administration, when we asked people what they needed and where they needed it." Kelly added that Customs and Border Protection agents told him during his brief stint as Homeland Security secretary that they need physical barriers in some areas. But they largely indicated a desire for new technology and additional personnel, he said. The Times noted that this isn't the first time Kelly has taken issue with Trump's stances related to immigration. He said on Fox News earlier this year that Trump's views on the issue weren't "fully informed," a comment that reportedly made the president furious. “The Wall is the Wall, it has never changed or evolved from the first day I conceived of it,” Trump wrote on Twitter.
Lashing Out At Mattis And Kelly, Trump Says Failed Generals Need To Stop Complaining - President Trump once prided himself in the fact that he had stocked his administration with capable military men like ex-Defense Secretary James Mattis and now-former Chief of Staff John Kelly. But as both men have departed his administration - with Mattis explicitly citing Trump's decision to pull US troops out of Afghanistan and Syria, and Kelly criticizing these decisions in an exit interview - Trump Monday morning lashed out at "failed generals" who "complain" about Trump's decision to fulfill his campaign promise to finish the "never-ending" wars in the US. ...I campaigned on getting out of Syria and other places. Now when I start getting out the Fake News Media, or some failed Generals who were unable to do the job before I arrived, like to complain about me & my tactics, which are working. Just doing what I said I was going to do! — Donald J. Trump (@realDonaldTrump) December 31, 2018 Trump also reminded Americans that he campaigned on ending wars like Afghanistan, which has dragged on for 17 years, while circumstances in the country have only seemed to deteriorate further. ...Except the results are FAR BETTER than I ever said they were going to be! I campaigned against the NEVER ENDING WARS, remember! — Donald J. Trump (@realDonaldTrump) December 31, 2018 Taking another shot at Kelly, who left the administration during an acrimonious battle over President Trump's promised border wall, Trump responded to Kelly's exit-interview claim that the 'border wall' isn't actually a wall (he said 'barrier' or 'fence' would probably be more appropriate). President Trump was unsurprisingly less than pleased to hear Kelly once again publicly question the president's dedication to building a wall, and in a Monday morning tweet, Trump contradicted Kelly's assertion that plans for a concrete border wall had been abandoned during the early days of the administration after consulting with CBP agents. Instead, Trump insisted that "some sections" of the wall would be made of concrete, while other portions would be "see through" in accordance with the wishes of border patrol experts.
Status Quo Seekers Fear This Senator is Advising Trump - American Conservative - “Welcome to the world of President Rand Paul,” blared the headline at The Washington Post. In the piece that followed, columnist Josh Rogin took President Donald Trump to task for reportedly listening to the Kentucky senator too much. “Several U.S. officials and people who have spoken directly to Trump since his Syria decision tell me they believe that Paul’s frequent phone conversations with Trump, wholly outside the policy process, are having an outsize influence on the president’s recent foreign policy decisions,” Rogin writes. “Officials told me that, throughout the national security bureaucracy, everyone is aware that Paul’s voice is one to which the president is paying increasing attention.”“The existing concern over Paul’s influence on Russia policy has now boiled over with respect to Syria,” Rogin worries. He also warns, “In the run-up to 2020, Trump should realize that most Republicans—and most Americans—favor a robust U.S. foreign policy.”This is Washington groupthink disguised as mainstream consensus. Polling this year has showed that most Americans are opposed to “robust” endless wars. Trump shouldn’t fear Republicans becoming disenchanted with his recent foreign policy decisions: according to a recent Morning Consult poll, the president’s support within his party remains sky high. The idea that promoting a more restrained foreign policy is somehow a political liability reflects more what elites think voters should believe, not what they necessarily believe. But why let reality get in the way of a good Beltway narrative? “Ideally, Trump will soon realize that adopting Paul’s vision for the future of U.S. foreign policy is not only dangerous for our national security but bad politics as well,” Rogin insists. Is this even remotely true given what we know about America’s recent foreign policy and political history?That Trump has now roundly bucked the advice of virtually all of his foreign policy advisors—so much so that his secretary of defense resigned in protest—is certainly unprecedented in modern American politics.
Top Pentagon spokeswoman resigns amid internal investigation - The Defense Department’s top spokeswoman, who had been under investigation since May over whether she mistreated employees, abruptly resigned Monday night within hours of the departure of Defense Secretary Jim Mattis. Dana W. White said on Twitter: “I appreciate the opportunity afforded to me by this administration to serve alongside Secretary Mattis, our service members and all the civilians who support them. It has been my honor and privilege. Stay safe and God bless.” A Defense Department spokesperson on Tuesday confirmed White had resigned from her position as assistant to the Secretary of Defense for public affairs. Charles E. Summers, Jr., replaced White, becoming “acting” assistant to the defense secretary, according to the Pentagon. Patrick Shanahan, a former Boeing executive and the No. 2 man at the Pentagon, became acting secretary Monday night, replacing Mattis who resigned after disagreements with President Trump. It is not clear whether White’s departure was related to reports of the probe by the inspector general to determine whether she mistreated staff members or retaliated against them after they raised concerns. The Pentagon’s media operations office Tuesday did not respond to emailed questions about the status of the investigation.
In a post-James-Mattis South China Sea, can the next US defence chief do what needs to be done to prevent war? - The South China Sea is one of the world’s major flashpoints. But it takes two to tango – or tangle. So it is critical for regional stability that the United States gets its South China Sea policy right. Although former US defence secretary James Mattis was tough on China, he was seen by many as reliable and measured. He was not unnecessarily confrontational, unlike more bellicose voices in and outside the administration.Amid the deterioration of overall US-China relations, he provided some stability in military-to-military relations. Now pundits are pondering the implications of his abrupt departure. The views and style of his eventual successor will be a crucial factor in US-China military relations. With regard to the South China Sea, the US’ strategic and political interests remain more or less the same, but may present problems requiring policy decisions.The US-China tensions in the South China Sea spring from a deeper contest over the future of the Asian regional order and the two countries’ roles in it. To put it simply, the US wants to remain the leading strategic power in Asia, and China wants to replace it.President Xi Jinping has declared: “No one is in a position to dictate to the Chinese people what should or should not be done.” With its burgeoning wealth and power, China is unlikely to be intimidated and begin to act more cautiously in the region.Indeed, it is more likely to meet threats and provocative actions with its own. Nationalists in the government, in the Chinese navy, and among netizens might push for responses to provocations. More military-to-military incidents are likely, and past international episodes might seem minor by comparison.The next defence secretary’s decision-making will also be influenced by US President Donald Trump’s isolationist “America first” approach, including his scepticism of alliances that Mattis supported.Trump seems wary of expending more American blood and money on defending allies like Japan, the Philippines and Taiwan, especially if they provoke China but expect the US to back them up. This could hamper any appointee’s ability to flex military muscles in Asia. Moreover, with Trump’s sudden, unilateral withdrawal of US troops from Syria, friends and allies in Southeast Asia may realise that they, too, are probably on their own and that they should act accordingly.
After Trump touts 'Big progress' in trade talks, China expresses willingness to work with US through 'storms' -- China’s foreign ministry said in a statement Sunday that Beijing is willing to work with the United States through “storms” in their relationship toward the goal of global stability. The statement from ministry spokesman Lu Kang mentioned the consensus agreement that U.S. President Trump and Chinese President Xi Jinping reached during the Group of 20 Summit in Argentina earlier this month, Reuters reported. On Saturday, Trump wrote in a Twitter message that “big progress” was being made in U.S.-China trade talks and that a potential deal was coming together “very well.” “Just had a long and very good call with President Xi of China. Deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas and points of dispute. Big progress being made!” Trump wrote on Twitter. Following the call, President Xi expressed hope that the two countries could advance toward a more cooperative relationship, Reuters reported Saturday. The U.S. and China have been involved in a tit-for-tat trade battle throughout the course of 2018. The countries – the world’s two largest economies – have slapped tariffs on one another’s goods, though Washington and Beijing agreed on Dec. 1 to postpone further hikes in an effort to negotiate a deal that satisfies both sides. If no trade deal is reached, the U.S. is ready on March 2 to increase tariffs on $200 billion in Chinese goods to 25 percent from 10 percent, which could potentially have a significant effect U.S. industries – such as electronics, furniture and machinery -- that depend on Chinese imports, the Wall Street Journal reported. A tariff increase also could stall China’s economy, potentially slowing global growth, the report said.
First Details From US-China Trade Talks Emerge - With roughly a week left before the first round of in-person trade-deal talks, the White House has leaked a rough outline of its expectations for a deal reportedly gleaned from preliminary conversations between President Trump and President Xi (Trump tweeted on Saturday that he and Xi had made "big progress" toward a deal during their early calls). If nothing else, the report in the Wall Street Journal offers a benchmark against which the final deal can be judged. According to WSJ, the talks are focusing on boosting US exports and loosening regulations that discriminate against US firms operating in China (something the Chinese have been hinting at in recent policy decisions to lift import bans and remove retaliatory tariffs, while also reportedly weighing a decision to scrap their "Made in China 2025" policy). However, as with anything leaked from the West Wing, WSJ cautions its readers to take the report with a grain of salt, especially since given the market volatility Trump is liable to be exaggerating the chances of a deal, especially since trade optimism is expected to boost markets, Trump's favorite "barometer" of his administration.But people familiar with the state of negotiations said the president may be overstating how close the two sides are to an agreement. They note Mr. Trump has looked to calm markets, which have gyrated in recent days, in part, because of concern that the trade fight between the US and China could spin out of control. One other notable detail from the WSJ report is that the US likely won't seek a commitment from China to end its cyberespionage practices. Instead of bundling this in with the trade talks, Treasury is pushing for China's espionage program (which recently won it the condemnation of the US and a group of its allies, as well as a host of indictments of hackers and agents allegedly affiliated with the Ministry of State Security), to be put off for a separate round of negotiations (showing that the US is being practical about setting realistic expectations for a deal, since China has repeatedly promised to rein in these practices, only to allow them to continue).
An ‘atheist’ empire? Trump aides rally evangelicals in China fight - Vice President Mike Pence infuriated Beijing when he gave a speech in October warning that China had become a dangerous rival to the United States. While he focused on familiar issues such as China’s trade policies and cyber espionage, Pence also denounced the country’s “avowedly atheist Communist Party.” Citing a crackdown on organized religion in the country, Pence noted that Chinese authorities “are tearing down crosses, burning Bibles and imprisoning believers.” “For China’s Christians,” Pence said, “these are desperate times.” Pence’s remarks, which also addressed the repression of Chinese Buddhists and Muslims, illustrated how religious freedom is a growing theme of President Donald Trump’s confrontation with Beijing, which some foreign policy insiders warn could develop into a new Cold War. It is a subject that resonates in the U.S. heartland, some Christian leaders say — parts of which, including rural areas, are disproportionately at risk of fallout from Trump’s trade fight with the Asian giant. The issue has gained new resonance with Beijing’s arrest this month of a prominent Christian pastor and more than 100 members of his congregation. The arrests have drawn close coverage from evangelical outlets such as Pat Robertson’s Christian Broadcasting Network (CBN), whose website published an open letter by the jailed pastor, Wang Yi, declaring his “anger and disgust at the persecution of the church by this Communist regime.”
US issues China travel warning about ‘arbitrary’ law enforcement -- The US State Department issued a warning on Thursday that officials in China “have asserted broad authority” to prevent US citizens from leaving the country and to beware of “arbitrary enforcement of local laws.” The travel advisory follows the detention last month of two Canadians in China, which has accused them of harming China’s security. Those detentions occurred days after Canadian police arrested Huawei Technologies’ chief financial officer Meng Wanzhou in Vancouver at the request of the United States. The new State Department warning also follows the arrest of several Chinese nationals in the US on charges of espionage. They include Hongjin Tan, who was arrested on December 20 and charged with stealing trade secrets from the American petroleum company that employed him. The US Justice Department announced on the same day criminal indictments against two accused hackers associated with the Chinese government. Zhu Hua and Zhang Shilong, who the US say acted on behalf of the Chinese Ministry of State Security (MSS), were charged with conspiracy to hack into a dozen companies and government agencies in the US and around the world. Detentions of individuals on both sides, based on allegations of espionage and national security, have become the newest front among many confrontations in the US-China relationship. The downturn in relations started with a tariff war that has now dragged on for half a year and threatens to worsen if US President Donald Trump and his Chinese counterpart Xi Jinping are not able to settle their dispute in the next two months. The US government has also strengthened oversight of foreign investments in the country following a push by national security policymakers and lawmakers to more closely scrutinise acquisitions by Chinese entities. “China uses exit bans coercively: to compel US citizens to participate in Chinese government investigations, to lure individuals back to China from abroad, and to aid Chinese authorities in resolving civil disputes in favour of Chinese parties,” the announcement said. The State Department warning suggested that US citizens of Chinese descent face higher risks.
US-China tensions to rise over Taiwan-- Taiwan is looming as a major flashpoint between the US and China as the Trump administration steps up its confrontation with Beijing over a range of issues, from trade and allegations of intellectual property theft, to provocative operations by the US Navy in the South China Sea and the Taiwan Strait. US President Trump signed the Asia Reassurance Initiative Act (ARIA) into law on Monday. The legislation provides $1.5 billion for a comprehensive and “multifaceted US strategy” for the Indo-Pacific in line with Trump’s National Defense Strategy which explicitly targets China and Russia as US rivals. The Act specifically calls on the White House to sell arms to Taiwan on a regular basis as well as urging top US military and civilian officials to visit Taipei for talks with their counterparts. Both steps are likely to raise tensions between the US and China, which regards Taiwan as an integral part of its territory. On assuming office, Trump called into question Washington’s adherence to the One China policy under which it effectively recognised Beijing as the legitimate ruler of all China, including Taiwan. Trump suggested that he would tear up the One China policy if Beijing did not make major concessions on trade and other issues. The Trump administration has already approved two major arms deals to Taiwan of $1.4 billion in June 2017 and $330 million last month. It is providing assistance to Taiwan to develop its own diesel-powered submarines. The ARIA legislation suggests that such sales will occur more regularly. The Taiwan Travel Act, which Trump signed into law last year, authorises top level contact between US and Taiwanese officials even though the US officially ended all diplomatic relations with Taiwan in 1979. Beijing is highly sensitive to US talks with officials from what it regards as a renegade province. The Trump administration’s steps towards closer ties with Taiwan has encouraged the administration of President Tsai Ing-wen, whose Democratic Progressive Party (DPP) advocates a more independent stand by Taiwan. China has repeatedly threatened to use force to take control of Taiwan should it ever formally declare independence.
US and China must step off ‘path to disaster’, warns Jeffrey Sachs after storm of criticism over Huawei defence -- Renowned economist Jeffrey Sachs has said diplomacy is needed between the US and China to prevent “utter disaster” as he defended his controversial criticism of Washington’s targeting of Chinese telecoms giant Huawei Technologies. The Columbia University professor faced a firestorm of criticism on social media after he accused the US of hypocrisy for its targeting of Huawei senior executive Sabrina Meng Wanzhou, who was arrested by the Canadian authorities last month at the behest of the US. Sachs told the South China Morning Post he had been taking a break from the social media site since deleting his Twitter account late last month. “I found Twitter to be time-consuming and distracting,” he said. Meng was arrested on suspicion of violating US sanctions against Iran, a move Sachs called “reckless” in a syndicated article he published on December 11 with the headline “The War on Huawei”. He wrote that, by contrast, no major executives from American financial institutions had been arrested even though their companies had been fined for violating their country’s own sanctions on Iran or other nations. “The US attacks on Huawei, in my view, are not about Huawei’s actions but about technological competition,” Sachs said on Tuesday. “I don’t think we should take claims against Huawei by the US at face value.” “We need diplomacy to stop an IT arms race,” he said. “Right now we are on the path to disastrous cyberwarfare. “This is reckless and should not be left to the hardliners on both sides. We need global rules, globally supervised, just as in the areas of other armaments.” He added that the US targeting of Chinese firms should be seen against the background of the Trump administration’s attempt to assert American “exceptionalism” and to fight the perceived challenge of China and Russia to US power. “It is a very dangerous and utterly false idea that China is ‘attempting to erode American security and prosperity,’” he said, referring to the US national security doctrine issued by the White House a year ago.
The US and China are in a quantum arms race that will transform warfare - In the 1970s, at the height of the Cold War, American military planners began to worry about the threat to US warplanes posed by new, radar-guided missile defenses in the USSR and other nations. In response, engineers at places like US defense giant Lockheed Martin’s famous “Skunk Works” stepped up work on stealth technology that could shield aircraft from the prying eyes of enemy radar. The innovations that resulted include unusual shapes that deflect radar waves—like the US B-2 bomber’s “flying wing” design (above)—as well as carbon-based materials and novel paints. Stealth technology isn’t yet a Harry Potter–like invisibility cloak: even today’s most advanced warplanes still reflect some radar waves. But these signals are so small and faint they get lost in background noise, allowing the aircraft to pass unnoticed. China and Russia have since gotten stealth aircraft of their own, but America’s are still better. They have given the US the advantage in launching surprise attacks in campaigns like the war in Iraq that began in 2003.This advantage is now under threat. In November 2018, China Electronics Technology Group Corporation (CETC), China’s biggest defense electronics company, unveiled a prototype radar that it claims can detect stealth aircraft in flight. The radar uses some of the exotic phenomena of quantum physics to help reveal planes’ locations. It’s just one of several quantum-inspired technologies that could change the face of warfare. As well as unstealthing aircraft, they could bolster the security of battlefield communications and affect the ability of submarines to navigate the oceans undetected. The pursuit of these technologies is triggering a new arms race between the US and China, which sees the emerging quantum era as a once-in-a-lifetime opportunity to gain the edge over its rival in military tech.
The Failure of the United States’ Chinese-Hacking Indictment Strategy - Just before Christmas, the U.S. Department of Justice unsealed an indictment against two Chinese nationals who allegedly conducted a twelve-year “global campaign[] of computer intrusions” to steal sensitive intellectual property and related confidential business information from firms in a dozen states and from the U.S. government. This is only the latest round of indictments against Chinese nationals for computer hacking in the United States. [...] The cyber indictment strategy is a central element of the United States’ response to the ravages of theft and destruction by China that it has suffered in the cyber realm in the last decade. Is the indictment strategy working? First consider deterrence, an oft-stated aim of such indictments. The indictments rarely result in prosecution but do expose the alleged wrongdoers publicly, prevent them from traveling and perhaps embarrass them in certain circles. These costs are not nothing; would-be state-sponsored cyber-intruders and their principals surely take them into account. But it has always been unclear how these relatively miniscule costs are supposed to influence Chinese macro-decision-making when the benefits of the cyber-intrusions by the Chinese—untold billions of dollars in commercial benefits, plus a massive reticulate database of information on American citizens with unending intelligence and other benefits—are so huge. Nonetheless, many were optimistic that the indictment strategy would work. [...] But state-sponsored commercial cybertheft from China never came close to ceasing, as the Xi-Obama deal requires. Indeed, several criminal incidents detailed in the 2017 and 2018 indictments occurred after Xi’s 2015 pledge, as did (for example) parts of the China hack of Marriott, which vacuumed over three hundred million passport numbers among other valuable information. It is now better understood that the apparent slowdown in China’s cybertheft after the 2014 agreement was more likely due to two factors: (1) China’s hackers grew more operationally sophisticated and began to hide their tracks (or their connections to state entities) better; and (2) Xi’s centralization reforms and anti-corruption campaign cracked down on unauthorized cybertheft freelancing.
Foreign Hackers Cripple US Newspapers, Cause Widespread Delivery Disruptions -- Foreign hackers infiltrated computer systems shared by several major US newspapers, "crippling" newspaper production and delivery systems across the country on Saturday, according to the Los Angeles Times, citing a source with knowledge of the situation. The attacks, which began after Thursday night, appear "to have originated from outside the United States," according to the Times, and resulted in distribution delays in the Saturday edition of The Times, the San Diego Union-Tribune, the Chicago Tribune, Baltimore Sun and several other major newspapers which share the same production platform. West coast editions of the Wall Street Journal and New York Times were also affected, as they are all printed at the LA Times' Olympic printing plant in downtown Los Angeles. The hackers were able to disable several crucial software systems which store news stories, photographs and administrative information - which complicated efforts to make the physical plates used to print the papers at The Times' downtown plant. "We believe the intention of the attack was to disable infrastructure, more specifically servers, as opposed to looking to steal information," according to the source who wishes to remain anonymous. All papers within The Times’ former parent company, Tribune Publishing, experienced glitches with the production of papers. Tribune Publishing sold The Times and the San Diego Union-Tribune to Los Angeles businessman Dr. Patrick Soon-Shiong in June, but the companies continue to share various systems, including software. “Every market across the company was impacted,” said Marisa Kollias, spokeswoman for Tribune Publishing. She declined to provide specifics on the disruptions, but the company properties include the Chicago Tribune, Baltimore Sun, Annapolis Capital-Gazette, Hartford Courant, New York Daily News, Orlando Sentinel and Fort Lauderdale Sun-Sentinel. -LA Times The problem was first detected Friday, however technology teams were unable to completely fix all systems before press time. It is unknown whether the company has contacted law enforcement regarding the incident.
What we still don't know about the cyberattack on Tribune newspapers - News operations are returning to normal for the Los Angeles Times and outlets owned by Tribune Publishing, but significant questions remain about a cyberattack that disrupted computer systems for a host of publications around the country and hampered newspaper deliveries over the weekend. On Saturday the Los Angeles Times reported that Tribune, which owned the Times until June but still shares production software with the newspaper, “suspected the cyberattack originated from outside the United States.” But Tribune did not say whether the suspected hackers may have ties to a foreign government, how they infiltrated the company’s network or what their motives may be. “Tribune Publishing continues to investigate the diagnosis and remediation of the malware that impacted a portion of our back-office systems,” Marisa Kollias, a spokeswoman for Tribune Publishing, told The Washington Post in a statement Monday. “We continue to make significant progress across the organization that set up Monday’s delivery of newspapers for a successful delivery schedule through extraordinary dedication and effort.” The Times, citing an unnamed source with knowledge of the situation, reported that the goal of the attack was to disable news operations rather than to steal information. The newspaper cited other anonymous sources who suggested that the cyberattack came in the form of a type of ransomware, known as “Ryuk.” Ransomware attacks work by encrypting the data on a victim’s computer and then demanding a ransom to restore access to the files, which are locked from access by the owner. Such malicious software has been used in high-profile breaches, including a sprawling attack last year that the Trump administration pinned on North Korea, which affected more than 230,000 computers in more than 150 countries. Security experts say criminals and state-tied groups have relied on ransomware to profit from desperate victims and disrupt critical infrastructure. But the Ryuk ransomware believed to have been deployed against Tribune has been used in a more targeted way. Hackers search for computer networks that have digital vulnerabilities and companies and users that have the resources to pay a hefty ransom.
Trump pulled out of a massive trade deal. Now 11 countries are going ahead without the US (CNN)A major 11-country agreement goes into effect Sunday, reshaping trade rules among economic powerhouses like Japan, Canada, Mexico and Australia — but the United States won't be a part of it. That means that Welch's grape juice, Tyson's pork and California almonds will remain subject to tariffs in Japan, for example, while competitors' products from countries participating in the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership will eventually be duty-free. Japan will offer similar tariff relief to the European Union, in a separate trade deal set to go into effect on February 1. "Our competitors in Australia and Canada will now benefit from those provisions, as US farmers watch helplessly," said US Wheat Associates President Vince Peterson at a hearing on the potential negotiations with Japan. It's the opposite of what the Obama administration planned when it began negotiating the Trans-Pacific Partnership, known as TPP. The proposed deal, which never passed Congress, formed the backbone of the US strategy to counter Chinese economic influence, but it was one of the first things President Donald Trump moved to undo when he took office, pulling the United States out of the deal in January of 2017. Instead, he's pursued a series of direct bilateral agreements, launching a trade war with escalating tariffs on $250 billion in Chinese goods to force Beijing to the negotiating table.The strategy has led to a new round of talks between Trump and his counterpart Xi Jinping — but leaves US producers out of broader regional arrangements with other Pacific Rim nations, for now. The current signatories have left open the possibility that the United States and other countries — including China — could join in the future if they agreed to the terms. "They're trying to say, 'We're moving forward and we hope you come to your senses at some point and join us, too'," Withdrawing from the TPP fulfilled a campaign pledge for Trump, who had called the agreement a "disaster" and argued that it would harm American workers and manufacturing. He's also renegotiated the 1994 North American Free Trade Agreement, replacing it with a successor deal, the US-Mexico-Canada Agreement, which still needs congressional approval before it can take effect. And the Trump administration is currently pursuing bilateral accords with the European Union as well as with Japan. The stakes will be even higher now that the Trans-Pacific deal is going into effect — especially for American farmers who were eager to take advantage of more open markets abroad. Creating a variety of standards through a number of bilateral and trilateral trade deals could wind up hurting small and mid-sized American companies that may find it costly to keep up with the differences.
American farmers brace for more pain as Pacific trade deal kicks in without the US -- American farmers, already hit by low commodity prices and China's punitive trade tariffs, are poised to endure further pain in 2019 now that a major Pacific trade deal has come into effect.The Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, was ratified by seven of its member countries on Sunday. Now that the massive free trade pact is a reality for Australia, Canada, Japan, Mexico, New Zealand,Singapore and Vietnam, the remaining four members — Brunei,Chile, Malaysia and Peru — are soon expected to follow suit.The milestone agreement, a refurbished version of the Trans-Pacific Partnership, will slash tariffs among the 11 nations that cover 14 percent of global growth, making their exports cheaper in each other's markets. Around 90 percent of planned tariff cuts will be immediately take place, HSBC said in a note on Sunday, adding that businesses will benefit from reduced administrative costs thanks to other benefits such as pre-arrival customs clearance. The goods of non-CPTPP members such as the United States are now expected to be pricier and less competitive in the 11 CPTPP countries. American meat and agricultural products are particularly expected to suffer in CPTPP nations that don't have free trade arrangements with Washington. Japan is a prime example. The Asian giant is the top market for U.S. beef, but Australia's products could now take over America's spot since foreign beef tariffs in Japan will be cut by 27.5 percent for Australian producers under the CPTPP, The National Cattlemen's Beef Association has warned."The US beef industry is at risk of losing significant market share in Japan unless immediate action is taken to level the playing field," Kevin Kester, the association's president, said in a statement earlier this month.It's a similar story for American wheat.Thanks to CPTPP, Canadian and Australian wheat exports to Japan now immediately benefit from a 7 percent drop in the Japanese government's mark-up price, which will become a 12 percent reduction in April, U.S. Wheat Associates President Vince Peterson said in a recent statement. By April, American wheat will face a $14 per metric ton resale price disadvantage to Australia and Canada, he warned, adding that his industry faces "imminent collapse" in Japan. The U.S. and Japan don't have a free trade deal in place, something on which Trump has been pressing Tokyo. In comparison, European nations, which also aren't part of the CPTPP, are expected to fare better given the E.U-Japan bilateral trade deal.
Promised tariff relief for farmers uncertain in government shutdown - Payments to farmers designed to make up for the for the loss of revenue stemming from retaliatory tariffs imposed on U.S. agricultural products by China are in jeopardy as long as the government is shut down, according to the Associated Press. The U.S. government will be shut down until the President and Congress reach a deal to reopen it, but the deadline for farmers to apply for the second round of payments remains Jan. 15. The shutdown affects the USDA's Farm Service Agencies (FSA), local offices that administer USDA farm programs. Growers of soybeans, corn, wheat and sorghum, among other commodities, were offered a subsidy in August, and a second round was announced in December. President Trump reported that Chinese President Xi Jinping committed to purchasing more U.S. agricultural products at the leaders' last meeting. With [USDA’s Farm Service Agencies (FSA)] shut down, U.S. farmers have lost their main method of interaction with the federal government. FSA offices were open until Dec. 28, after which they remain closed until a new deal to end the shutdown is reached. With harvests finished now, farmers must decide whether to sell their wares at a historically low prices or store their produce to wait for a more favorable market, assuming that is financially realistic. On top of uncertainty in the promised payouts, the USDA’s year-round programs are also suspended including farm lending programs. Plus, many storage facilities and silos are also already full.”
Trump- Treasury Has Taken In Many Billions Of Dollars From Tariffs - With the fate of President Trump's USMCA trade deal still uncertain at the beginning of the 116th Congress, President Trump tweeted Thursday morning to remind Americans that his trade war with China and his other tariffs - measures that have horrified free-trade lawmakers and American business leaders - have actually netted billions of dollars in income for the US. In other words: While it hasn't entirely compensated for the shortfall, Trump's tariffs have helped plug the hole in the budget deficit left by Trump's tax reform package. "The United States Treasury has taken in MANY billions of dollars from the Tariffs we are charging China and other countries that have not treated us fairly. In the meantime we are doing well in various Trade Negotiations currently going on. At some point this had to be done!" The United States Treasury has taken in MANY billions of dollars from the Tariffs we are charging China and other countries that have not treated us fairly. In the meantime we are doing well in various Trade Negotiations currently going on. At some point this had to be done! — Donald J. Trump (@realDonaldTrump) January 3, 2019 Indeed, according to Goldman Sachs research, tariff revenues have soared to nearly $5 billion a month since the first tariffs were imposed nearly one year ago. In other words, if Congress were to simply monetize the tariff revenues, it would already have enough money to pay for Trump's wall.
Trump Blames Democrats For Deaths Of Migrant Children - In a series of tweets that are tailor made to elicit howls of outrage from Trump's political opponents, President Trump on Saturday blamed the Democrats for the deaths of two migrant children who have died in the custody of the border patrol over the past month, arguing that if Democrats had only approved money to build the wall, that migrants wouldn't even try to cross into the US in the first place. The tweet is the first comment from the White House since the death of the second child on Christmas Eve. Following the death of the first migrant child earlier this month, the White House released a statement saying that the "horrific, tragic" death of a child from dehydration was not its responsibility. According to Trump, "Any deaths of children or others at the Border are strictly the fault of the fault of the Democrats and their pathetic immigration policies that allow people to make the long trek thinking they can enter our country illegally. They can't. If we had a Wall, they wouldn't even try!" On the surface, Trump's tweets would seem to contradict a statement made by Secretary of Homeland Security Kirstjen Nielsen following the death of the second child. Nielsen said the death on Christmas Eve of an 8-year-old Guatemalan boy in federal detention was a "deeply concerning and heartbreaking" tragedy - though she also cited failings in the "US immigration system" for facilitating the tragedy. She also called for more medical exams for children taken into custody.
US Border Patrol Hits Women, Children, and Journalists in Mexico With Tear Gas — In what human rights groups condemned as a “cruel and inhumane” act that must be independently investigated, agents with President Donald Trump’s Customs and Border Protection (CBP) on Tuesday reportedly hit women, children, and journalists near the U.S.-Mexico border with tear gas, smoke, and pepper spray.According to an Associated Press photographer present at the scene, CBP agents fired “at least three volleys of gas” into Mexico at around 150 asylum-seekers who approached the border in the early hours of Tuesday morning.Contradicting CBP’s claim that the tear gas was used to deter migrants who were throwing rocks over the border fence, the AP photographer said rocks were thrown “only after U.S. agents fired the tear gas.”In a statement Tuesday night, Justin Mazzola, deputy director of research at Amnesty International, said CBP’s actions should be viewed as part of the Trump administration’s sweeping anti-immigrant agenda.“Using tear gas against men, women, and children seeking protection is cruel and inhumane,” Mazzola declared. “There needs to be a thorough and independent investigation into the reported use of tear gas and other agents in this incident. However, this incident needs to be examined within the broader context of US policies at the border.” “The Trump administration is defying international law and orchestrating a crisis by deliberately turning asylum-seekers away from ports of entry, endangering families who see no choice but to take desperate measures in their search for protection,” he continued. “These dangerous policies must end immediately. The U.S. must welcome people safely into the country while their asylum claims are reviewed.”
More Troops To Be Deployed To Southern US Border; Will Build 160 Miles Of Fencing - More US troops will be deployed to the Southern border to "construct or upgrade" 160 miles of fending, as well as provide medical care to thousands of migrants arriving from Central America, reports NPR, citing military sources. The Pentagon will foot the bill out of its discretionary funding for the deployment and fence construction along the California and Arizona borders with Mexico.Word of the deployment comes amid a heated battle over $5 billion in funding President Trump has demanded for a southern border wall, which is currently at the center of a partial government shutdown. The move comes as President Trump continues to demand $5 billion from Congress for border security and a wall along the U.S.-Mexico border. Congressional Democrats oppose the move, and parts of the federal government have been shut down because of the impasse.The Department of Defense has not been affected by the shutdown. -NPRThe request for more troops to shore up the US-Mexico border was made by the Department of Homeland Security - which will add to the deployment of some 2,300 active duty troops on the border as well as 2,100 National Guard troops. Those deployed will include aviation units and combat engineers.
ICE Now Locks Up Everyone - As the Trump administration continues its anti-immigrant salvos at the border, Immigration and Customs Enforcement (ICE) has ramped up its aggression domestically. ICE is now not only arresting more people than it has in years, it’s also opting to lock them up whenever possible, whether they’re criminals or not. In an attempt to accommodate President Trump’s anti-immigrant posture, the agency has launched indiscriminate raids on immigrant communities, borrowed funds from other Homeland Security agencies to pay for more jail beds, and even tweaked its own risk assessment software to recommend mandatory detention for every person in its custody. It’s this last change, carried out silently by by the agency in 2017, which has become the target of a recent lawsuit by the New York Civil Liberties Union (NYCLU), the state branch of the American Civil Liberties Union. The Risk Classification Assessment (RCA) program has been used by field agents since 2013 to help determine whether a person arrested by ICE should be kept in detention or be released on bond until their day in immigration court. Whereas before this computer program might have recommend letting go of an undocumented immigrant with no criminal history, ICE has now completely removed the “release” option from the system. The NYCLU lawsuit, filed last month with U.S. District Court for the Southern District of New York, accuses ICE of stonewalling information requests on how the system makes its recommendations and the effect that the agency’s recent changes have had on levels of detention nationwide. These requests have been met with “radio silence”, NYCLU wrote in an accompanying blog post.“We want to know what questions people are being asked by ICE agents, what weight is assigned to each answer, and what the national outcomes have been,” says NYCLU attorney Paige Austin. “The entire process has been obscured. Just imagine this happening in a criminal context—it would be crazy if you had no idea what the standards for release were.”
FBI, New Jersey AG Obtains Evidence Trump Golf Club May Have Given Illegals Fake Documents - Federal and state investigators are reportedly analyzing employment documents of illegal immigrants who allegedly worked at President Donald Trump's New Jersey golf club, according to their attorney, Anibal Romero. Anibal Romero, a Newark attorney who represents five undocumented immigrants who say they worked at the Trump National Golf Club in Bedminster, said in an interview Saturday that he met with investigators from the New Jersey state attorney general's office and two FBI agents in November, before the workers began to go public with their stories. -SF GateRomero says he turned over fake green cards and Social Security numbers "that supervisors at the golf club allegedly gave one of his clients," a 44-year-old Guatemalan national named Victorina Morales. Romero also produced pay stubs for Costa Rican native Sandra Diaz who now has legal status, but says she was undocumented during her three years of employment at the club. Romero says he reached out to special counsel Robert Mueller's office since he was afraid to loop in the Justice Department - then headed by former Attorney General Jeff Sessions. "I wasn’t sure, one, if they’d take me seriously and, two, if this could backfire on my clients," Romero told the NY Daily News. Mueller’s office, which is separately investigating Trump’s campaign for possible collusion with Russians during the 2016 election, made contact and informed Romero the matter was not within their jurisdiction. -NY Daily News Mueller's office referred the matter to the FBI, after which an agent in New Jersey called Romero.
FBI investigating Trump golf club for hiring undocumented workers after tip to Mueller - New Jersey investigators and the FBI have obtained fake green cards given to undocumented workers by managers at President Trump’s National Golf Club in Bedminster, an attorney for the workers told the Washington Post. Anibal Romero, a New Jersey lawyer representing five undocumented immigrants who say they worked at the golf club, told the Post that he turned over fake green cards and Social Security numbers that supervisors at the club allegedly gave at least one of his clients to the FBI and the New Jersey state attorney general’s office. Neither the FBI or the attorney general’s office would confirm or deny the investigation, according to the New York Daily News. Romero said he first contacted special counsel Robert Mueller in October about the employees’ allegations. The FBI called him several weeks later. “The agent told me that he had received a referral from Robert Mueller’s office and that he had been briefed on the case and he wanted to meet with me in person,” Romero said. Romero said Trump’s golf club didn’t just hire undocumented employees as the president ratcheted up his anti-immigrant rhetoric but that they actively “recruited” undocumented workers, such as his client Victorina Morales. “The important point that I think has been left out is that Americans think these hard-working women get these jobs on their own — that’s not what happened,” Romero said. “People employed by the golf club recruited her and made her the phony documents.”
Here’s how federal inmates made an Alabama sheriff $1.5 million - Towering high above the streets of Gadsden, the Etowah County Detention Center is an outsized presence in the small northeast Alabama town. As one of the largest buildings downtown, the facility seems too big to house only the county’s thieves, drug dealers and other accused and convicted criminals.Indeed, the jail serves an additional purpose.The detention center has a federal contract to incarcerate hundreds of undocumented immigrants who face lengthy legal battles over their immigration status and alleged crimes.Etowah County Sheriff Todd Entrekin runs that jail. And he makes a lot of money doing it.Earlier this year, he acknowledged that he keeps money budgeted for jail food that goes unspent, saying in a press conference that he kept more than $750,000 between January 2015 and December 2017.But records show he had already pocketed more than twice that amount.An AL.com review of hundreds of pages of county and sheriff’s office records has revealed for the first time the extent to which Entrekin and the county’s general fund benefited from the federal immigrant-detention contract. For example, beginning in October 2011, the surplus from feeding federal inmates over the next three years was more than $3 million – half of which Entrekin pocketed and half of which went to the county’s general fund, according to the documents and interviews with county officials.
Pelosi Burns Republicans To The Ground By Invoking Reagan During Speech Marking New Session Of Congress After two years of Republican rule that accomplished nothing allowed Trump to reign unchecked, Democrats officially took over the gavel as House Minority Leader Kevin McCarthy handed it to Pelosi in a civil transfer of power that must have made Trump throw quite a temper tantrum in the Oval Office or wherever he is watching television in the White House. Pelosi laid out the Democratic agenda piece by piece, vowing to fight for better healthcare, stronger environmental laws, stop and reverse climate change, hold lawmakers accountable, rebuild our infrastructure and re-establish ethical and transparent governance that has been missing since Trump took office. Indeed, a new sheriff is in town, and Pelosi took no prisoners as she looked Republicans squarely in the eyes and invoked Reagan in defense of Dreamers, immigrants who were brought to this country as children and is the only home they have ever known. “And we will make America more American by protecting our patriotic, courageous Dreamers!” she declared. “And when we are talking about the Dreamers let us remember what President Reagan said in his last speech as President of the United States: “If we ever closed the door to new Americans, our leadership role in the world would soon be lost.” Republicans sat dumbfounded as if Pelosi had just thrown a concussion grenade into their side of the chamber. They literally could not bring themselves to even applaud the words of Ronald Reagan because they are frightened of Trump or are too racist and hateful towards immigrants to care. They remained silent and unmoved as Democrats cheered. “No applause for Ronald Reagan?” Pelosi quipped. Here’s the full speech via YouTube. Pelosi’s remarks about Reagan are at the 14:35 mark.
Trump administration considers rollback of anti-discrimination rules - WaPo - The Trump administration is considering a far-reaching rollback of civil rights law that would dilute federal rules against discrimination in education, housing and other aspects of American life, people familiar with the discussions said. A recent internal Justice Department memo directed senior civil rights officials to examine how decades-old “disparate impact” regulations might be changed or removed in their areas of expertise, and what the impact might be, according to people familiar with the matter. Similar action is being considered at the Education Department and is underway at the Department of Housing and Urban Development. Under the concept of disparate impact, actions can amount to discrimination if they have an uneven effect even if that was not the intent, and rolling back this approach has been a longtime goal of conservative legal thinkers. Past Republican administrations have done little to erode the concept’s application, partly out of concerns that the Supreme Court might disagree, or that such changes would be unpopular and viewed as racist. Civil rights advocates said diminishing this tool could have sweeping consequences. “Disparate impact is a bedrock principle,” said Kristen Clarke, president and executive director of the Lawyers’ Committee for Civil Rights Under Law. “Through the courts, we’ve been able to marshal data and use the disparate-impact doctrine as a robust tool for ferreting out discrimination.”
Judge clears the way for appeal of ruling against health law (AP) — A federal judge in Texas who recently declared the Affordable Care Act unconstitutional has stayed his ruling to allow for appeals. That means “Obamacare” remains in effect while litigation continues. In a ruling issued Sunday, Judge Reed O’Connor in Fort Worth wrote that he stands by his earlier conclusion that the entire law is invalidated by congressional repeal of its fines on people who remain uninsured, like a house of cards collapsing. However, because “many everyday Americans would ... face great uncertainty” if that ruling were immediately put into effect, O’Connor issued a stay to allow for appeals. A group of Republican-led states brought the lawsuit. A coalition of Democratic state attorneys general, led by California’s Xavier Becerra, intends to appeal. Congressional Democrats also plan to appeal.
Medicare for All – How Can We Pay for It? – Real News Network video & transcript - Prof. Robert Pollin and Michael Lighty discuss the findings of a new study by the Political Economy Research Institute at UMass Amherst. The study finds Medicare for All could reduce total healthcare spending by 10 percent, while creating stable access to good care and improving the health of all U.S. residents
Democrats Winning Key Leadership Jobs Have Taken Millions From Pharma - Three of the lawmakers who will lead the House next year as Congress focuses on skyrocketing drug costs are among the biggest recipients of campaign contributions from the pharmaceutical industry, a new KHN analysis shows. On Wednesday, House Democrats selected Rep. Steny Hoyer of Maryland to serve as the next majority leader and Rep. James Clyburn of South Carolina as majority whip, making them the No. 2 and No. 3 most powerful Democrats as their party regains control of the House in January. A new Kaiser Health News database tracks campaign donations from drugmakers over the past 10 years. Both lawmakers have received more than $1 million from pharmaceutical company political action committees in the past decade. Just four members of Congress hold that distinction, including Rep. Kevin McCarthy of California, whom Republicans chose as the next House minority leader earlier this month. Adding Rep. Nancy Pelosi, the California Democrat expected to be the next speaker, the three-person House Democratic leadership team has collected more than $2.3 million total in campaign contributions from drugmakers since the 2007-08 election cycle, according to KHN’s database. High drug prices surfaced as a major campaign issue in 2018. With almost half of Americans saying they were worried about prescription drug costs last summer, many Democrats told voters they’d tackle the issue in the next Congress. But the large amount of money going to key Democrats, and Republicans, raises questions about whether Congress will take on the pharmaceutical industry. In the past decade, members of Congress from both parties have received about $81 million from 68 pharma PACs run by employees of companies that make drugs and industry trade groups.
US House Democrats reaffirm right-wing program of austerity, bipartisanship - The 116th Congress opened Thursday with a nearly unanimous vote by the Democrats in the House of Representatives reaffirming their commitment to austerity by adopting a rules package which includes a “pay as you go” provision, requiring any increased spending on social programs or tax cuts to be offset by equivalent budget cuts or tax increases. The Democrats took control of the House for the first time in eight years following November’s midterms while the Republicans increased their majority in the Senate.The new rules were moved by Democratic Representative Nancy Pelosi who was re-elected to the position of Speaker of the House earlier in the day, giving her effective control of its legislative agenda. Pelosi became the first woman to be elected Speaker when she held the position from 2007 to 2011. As Speaker, she is now second in line of succession for the presidency behind Vice President Mike Pence. Pelosi’s great “achievement” in her first stint as Speaker was the 2010 passage of the Affordable Care Act, better known as Obamacare, aimed at shifting much of the burden of paying for health insurance from businesses and the government onto the backs of workers. In 2007, she worked closely with her top aides, Majority Leader Steny Hoyer and Majority Whip James Clyburn, to block any efforts to impeach President George W. Bush and ensure an unending stream of funding for the wars in Iraq and Afghanistan. Hoyer and Clyburn have been returned to those positions for the 116th Congress.
White House press deputy says he expects bipartisan movement on infrastructure - White House deputy press secretary Hogan Gidley on Friday said that he expects there to be bipartisan movement on infrastructure in the future, despite the partisan gridlock that has led to the two-week government shutdown. "Infrastructure is a great example," Gidley told Hill.TV's Buck Sexton on "Rising. "Our team went up to the hill to have these conversations about these issues." "Look at criminal justice reform, something we just passed with massive bipartisan support. We expect the same thing to occur with something like infrastructure," he continued. "Our roads are crumbling, our bridges are crumbling. Our infrastructure is in bad disrepair, and the president wants those things fixed. So do Democrats." "How we get there, of course, is a different story, but it's time to fix those for the American people as well," he said. There was bipartisan progress on the issue of criminal justice reform last month, with the passage of the First Step Act. However, partisan gridlock is on full display in Washington as Democrats and Republicans are digging in their heels on the issue of border security as a partial government shutdown extends into its second week. The new Democratic-controlled House on Thursday passed legislation to put an end to the shutdown, however, Senate Majority Leader Mitch McConnell (R-Ky.) has indicated the measure would be dead on arrival in the Senate because it does not include Trump's demanded $5 billion in border wall funding.
A More Diverse Oligarchy - The corporations that effectively own the place don't need to be taxed or prosecuted in order to alleviate wealth inequality and stop corruption. They simply need to install a few more women and black and brown people at the top, and all will be status quo glorious for the oligarchy and continuously bad for the majority of people. Look at how well (until Russophobia, Inc. anyway) that's worked out for Facebook and its chief operating officer, billionaire Sheryl "Lean In" Sandberg. Having a woman in charge of the massive theft of personal data from users while she sells corporate feminism to minimum wage workers is just what the ruling class needs to pretend that we still have a democracy. With that bullshit in mind, Maxine Waters, the incoming Democratic chairwoman of the House Financial Services Committee, vows to hold corporations' feet to the fire and force them to disclose how many women and black and brown people they have placed in their top executive positions. This will absolve the Democrats of not doing anything so drastic as investigating corporate malfeasance and rectifying our worsening wealth inequality. It will make the public forget that they have no intention of reversing Trump's massive tax give-away to the rich. The viewing public, they figure, will be further placated when said corporations play their own parts of pretending to be seriously rattled by this bold new plan. The Democrats' pretense of meddling in private corporate affairs for the greater public good will then have the contrived salutory effect of Republicans accusing them of overreach and socialism. Regular people will take sides over which oligarchic cartel they'll be rooting for. Conservatives will accuse snowflake liberals of wanting too many safe spaces, and liberals will accuse conservatives of racism and misogyny. And it is so unfair, because all that the Democrats want is to make CEOs making about 300 times the salary of their average workers feel just a little bit "uncomfortable" before they lap up all that good press about their brave noble decisions to do the right diversionary diverse thing.The only real winners will be the neoliberal corporatists, both within and without Congress. They'll be able to continue lecturing poor and dark-hued people that all they need to succeed, like their latest brown female corporate vice president, is to transform themselves into bootstrapping entrepreneurial strivers.
Senate throws hundreds of Trump nominees into limbo - The Senate has sent hundreds of nominations back to the White House, throwing their fate into limbo. Senators sent back more than 270 nominations from the previous session on Thursday, which marked the official start of the 116th Congress. The list of nominations bounced back to the White House was printed in the Congressional Record, published Friday afternoon. In addition to the more than 270 nominations, the Senate also returned scores of foreign service nominees who were not listed individually. The setback will force President Trump to decide if he will renominate each of the individuals and start the Senate confirmation process over again. Trump and administration officials have repeatedly lamented the pace of confirmations on Capitol Hill. Of 707 key positions that require Senate confirmation, Trump has gotten 434 confirmed, according to a tracker from the Partnership for Public Service and The Washington Post. Trump in a pair of tweets on Monday knocked Senate Minority Leader Charles Schumer (D-N.Y.) saying he was holding up 360 "great and hardworking people," including ambassador picks. "More than a year longer than any other Administration in history. These are people who have been approved by committees and all others, yet Schumer continues to hold them back from serving their Country! Very Unfair!" Trump said. The Senate did confirm dozens of nominations on Wednesday in a final package of picks during the 115th Congress as part of a deal between Schumer and Majority Leader Mitch McConnell (R-Ky.). Scheduling a nomination vote is up to McConnell, but any senator can force him to eat up days of floor time before getting to a final vote.
Dem lawmaker to introduce articles of impeachment against Trump on first day of new Congress -- Rep. Brad Sherman (D-Calif.) intends to introduce articles of impeachment against President Trump on Thursday as the new session of Congress convenes. The Los Angeles Times reported that Sherman's measure will accuse Trump of obstruction of justice in the firing of former FBI Director James Comey, among other things. "There is no reason it shouldn’t be before the Congress,” Sherman told the news outlet. “Every day, Donald Trump shows that leaving the White House would be good for our country.” Sherman said he doesn't believe that introducing the resolution in the new Congress will cause any issues for his Democratic colleagues, despite party leadership giving indications that they'd prefer to focus on legislating and oversight. “Every member of the House will have to address [the issue] whether there are formal articles of impeachment pending,” Sherman told the Times. The California Democrat previously filed articles of impeachment on similar grounds in July 2017 and was among the nearly 60 Democrats who voted in favor of launching impeachment proceedings in December 2017. The measure overwhelmingly failed. Democrats will retake the House majority on Thursday, giving the party a greater ability to bring impeachment measures to the floor. Rep. Nancy Pelosi (D-Calif.), who is expected to be elected Speaker on Thursday, has said she does not intend to seek grounds for impeachment unless there is clear evidence and bipartisan consensus on the issue. Other Democrats have called for special counsel Robert Mueller to finish his investigation into Russian interference in the 2016 election before pressing impeachment.
Democrats lay impeachment trap, but will the president step into it? -- President Trump said he was not at all concerned because “you can’t impeach somebody that’s doing a great job.” The president was hopefully making an aspirational, not a literal, point — because a president can be entirely successful in office yet rightfully be impeached for committing “treason, bribery, or other high crimes and misdemeanors.” Indeed, no matter how successful a president may be in various policies, the commission of any impeachable offense means, by definition, that he or she is not doing a “great job.” Trump’s statement was unnerving not only because he has said it before but because he is entering the most dangerous period of his term so far. With Democrats now controlling the House of Representatives — and some already stating their intentions, intemperately or even profanely like Rep. Rashida Tlaib (D-Mich.) — the White House is about to be hit with a torrent of document demands and subpoenas from a half-dozen committees. Committee chairmen have promised to demand answers on Trump’s taxes, foreign business dealings, family charity and other areas beyond the still-ongoing Russia investigation. These moves reflect a strategy that not only targets Trump but is counting on Trump to be successful. They are relying on Trump’s self-description as a “counterpuncher” to supply the grounds of his removal. Yes, a president can counterpunch himself into impeachment. Despite the filing of articles of impeachment on the first day of House Democratic control, there is not a strong basis for a single article at this time. Thus far, the strongest basis is the money paid to two women to silence them about alleged affairs with Trump before the election. Yet, while highly damaging, these allegations can be difficult to prosecute and occurred before Trump took office. An in-kind campaign contribution simply is not a strong stand-alone issue for impeachment. Likewise, there still is no compelling basis to allege a crime based on obstruction or theories of collusion. That leaves Democrats with a House majority secured, at least in part, on promises of impeachment but without a clear, impeachable act.
Former NY Times Boss Slams Newspaper Over Anti-Trump Coverage - A former New York Times executive editor has slammed her former employer for being "unmistakably anti-Trump," while invoking Steve Bannon's claim that the mainstream media has become the "opposition party" united against the president, according to Fox News. Jill Abramson, who led the Times from 2011 to 2014, knocked the newspaper for exploiting financial incentives to bash Trump and says that the bias has eroded the paper's credibility.In her upcoming book, "Merchants of Truth," Abramson puts the news industry under a microscope - at times defending her former employer, while levying harsh criticism for her successor, Dean Baquet. "Though Baquet said publicly he didn’t want the Times to be the opposition party, his news pages were unmistakably anti-Trump," writes Abramson - who says the Washington Post is no different. "Some headlines contained raw opinion, as did some of the stories that were labeled as news analysis." Abramson describes a generational split at the Times, with younger staffers, many of them in digital jobs, favoring an unrestrained assault on the presidency. “The more ‘woke’ staff thought that urgent times called for urgent measures; the dangers of Trump’s presidency obviated the old standards,” she writes. Trump claims he is keeping the “failing” Times in business—an obvious exaggeration—but the former editor acknowledges a “Trump bump” that saw digital subscriptions during his first six months in office jump by 600,000, to more than 2 million. -Fox News "Given its mostly liberal audience, there was an implicit financial reward for the Times in running lots of Trump stories, almost all of them negative: they drove big traffic numbers and, despite the blip of cancellations after the election, inflated subscription orders to levels no one anticipated," she writes.
Why Whistleblowers Come Forward, And What Happens Next - In a culture that professes to prioritize safety, why, in just the last two years, have over a dozen Southwest Airlines Aircraft Maintenance Technicians brought whistleblower complaints to the FAA? These technicians risk retaliation and personal losses, and yet, still come forward, bringing to light accounts of coercion, information suppression and unlawful maintenance practices. While Southwest portrays themselves as stalwarts for transparency and, of course, safety, the reality is much more concerning. Of the cases brought to the FAA, many include mechanics who found technical issues with an aircraft that were subsequently told by management not to stray from their explicit scope of work. In one case, a mechanic documented two cracks on the aircraft’s fuselage resulting in it being taken temporarily out of service. He was then sent a letter from Southwest stating, “any further violations of MPM [maintenance procedural manual] may result in further disciplinary action.” For those outside the industry, the need to question scope of work in aircraft maintenance may seem counterintuitive. The aircraft is the scope and maintaining it should be the work. Any measure that adds to overall safety should be encouraged. But as many aircraft mechanics know, especially those in AMFA, the strict parameters of the job are major sources of contention between mechanics and management. More pressing, this disconnect over the mechanics’ overall mission is hugely important for the flying public’s safety. In one whistleblower investigation, the FAA described Southwest’s hostile reaction to an employee’s discovery of corrosion, stating, “Rather than being praised for finding a serious airworthiness issue [the inspector was] questioned as to how and why he came to notice the damage.” In a separate investigation of the carrier’s Los Angeles operations, the FAA concluded, “All of the mechanics interviewed except two felt pressured and under scrutiny as to whether they were either doing their job correctly or if they were finding too many things wrong with the aircraft.” FAA investigators described an environment characterized by “Fear of threats or reprisal. This ultimately leads to a degraded level of safety.”
Giuliani Says Assange Should Not Be Prosecuted - Donald Trump’s lawyer said on Monday that WikiLeaks publisher Julian Assange should not be prosecuted and he compared WikiLeaks publications to the Pentagon Papers. Rudy Giuliani, a lawyer for President Donald Trump, said Monday that WikiLeaks publisher Julian Assange had not done “anything wrong” and should not go to jail for disseminating stolen information just as major media does.“Let’s take the Pentagon Papers,” Giuliani told Fox News. “The Pentagon Papers were stolen property, weren’t they? It was in The New York Times and The Washington Post. Nobody went to jail at The New York Times and The Washington Post.” Giuliani said there were “revelations during the Bush administration” such as Abu Ghraib. “All of that is stolen property taken from the government, it’s against the law. But once it gets to a media publication, they can publish it,” Giuliani said, “for the purpose of informing people.” “You can’t put Assange in a different position,” he said. “He was a guy who communicated.” Giuliani said, “We may not like what [Assange] communicates, but he was a media facility. He was putting that information out,” he said. “Every newspaper and station grabbed it, and published it.” The U.S. government has admitted that it has indicted Assange for publishing classified information, but it is battling in court to keep the details of the indictment secret. As a lawyer and close advisor to Trump, Giuliani could have influence on the president’s and the Justice Department’s thinking on Assange.
John Roberts Praises Efforts To Rid Judiciary Of Sexual Misconduct, Ignores Sexual Misconduct Of His Colleagues - Chief Justice John Roberts accidentally summed up the judiciary’s reluctance to seriously root out sexual harassment in half a paragraph of his year-end report: inappropriate workplace conduct is not pervasive within the Judiciary, but it also is not limited to a few isolated instances involving law clerks. The Working Group concluded that misconduct, when it does occur, is more likely to take the form of incivility or disrespect than overt sexual harassment, and it frequently goes unreported. Sexual misconduct is “not pervasive,” not “overt” (according to a bunch of people who have not proven they can identify “overt” sexual harassment when it’s happening right in front of them), and anyway it’s really the victims’ fault for not coming forward. The working group’s report was widely panned by both Democrats and Republicans when it was released in June. And June 2018, you might remember, was a more innocent time, before Republicans put an alleged attempted rapist on the Supreme Court. Roberts’s decision to focus on it so heavily in his year-end review suggests that he doesn’t view sexual harassment in the judiciary as a big problem, but desires to look like he cares. I find Roberts’s decision to couch allegations of judicial misconduct as “incivility” to be particularly disturbing. Incivility is the cloak under which these assholes keep their sexual harassment off of the radar. Incivility is how women are gaslighted into thinking that the treatment they are experiencing is “normal” and that they just need to “toughen up” to work under powerful people. Incivility is how Alex Kozinski got away with it for so long, and how he made so many people complicit in his behavior. “Incivility or disrespect” IS “overt sexual harassment.” Roberts should stop using the euphemism. Roberts resolved to keep the working group in place for another year, which is an indication that underwhelming and tepid suggestions made by the working group are as far as Roberts is willing to go to protect law clerks from sexual harassment.
Ajit Pai thanks Congress for helping him kill net neutrality rules - Ajit Pai today celebrated a victory in his ongoing quest to prevent the US government from enforcing net neutrality rules. The Pai-led Federal Communications Commission repealed Obama-era net neutrality rules, but the repeal could have been reversed by Congress if it acted before the end of its session. Democrats won a vote to reverse the repeal in the Senate but weren't able to get enough votes in the House of Representatives before time ran out. "I'm pleased that a strong bipartisan majority of the US House of Representatives declined to reinstate heavy-handed Internet regulation," Pai said in a statement marking the deadline passage today. Pai claimed that broadband speed improvements and new fiber deployments in 2018 occurred because of his net neutrality repeal—although speeds and fiber deployment also went in the right direction while net neutrality rules were in place. "Over the past year, the Internet has remained free and open," Pai said, adding that "the FCC's light-touch approach is working." Pai didn't mention a recent case in which CenturyLink temporarily blocked its customers' Internet access in order to show an ad or a recent research report accusing Sprint of throttling Skype (which Sprint denies). "As usual, Ajit Pai is full of it," Deputy Director Evan Greer of advocacy group Fight for the Future told Ars. "His claim that broadband speeds are up is the tech policy equivalent of 'it's snowing outside, therefore climate change is a hoax.'"
Google wins lawsuit, can continue to use facial recognition tech on users without consent - A federal judge has thrown out a lawsuit that alleged Google’s nonconsensual use of facial recognition technology violated users’ privacy rights, allowing the tech giant to continue to scan and store their biometric data. The lawsuit, filed in 2016, alleged that Google violated Illinois state law by collecting biometric data – as biologically unique to users as fingerprints – without their consent. The data was harvested from their pictures stored on Google Photos.The plaintiffs wanted more than $5 million in damages for “hundreds of thousands” of users affected, arguing that the unauthorized scanning of their faces was a violation of the Illinois Biometric Information Privacy Act, which completely outlaws the gathering of biometric information without consent. Google countered that the plaintiffs were not entitled to any compensation, as they had not been harmed by the data collection. On Saturday, US District Judge Edmond E. Chang sided with the tech giant, ruling that the plaintiffs had not suffered any “concrete harm,” and dismissing the suit.As well as allowing Google to continue the practice, the ruling could have implications for other cases pending against Facebook and Snapchat. Both companies are currently being sued for violating the Illinois act.Amid rising alarm from privacy activists, biometric scanning has become ever more ubiquitous in recent years. The technology has been deployed at American airports, Russian railroads, and by British police – despite being unreliable and unregulated in most jurisdictions.Facial recognition can be used to identify faces in crowds from CCTV footage, track the movements of people on public transport networks, and monitor public places for wanted criminals. In Ireland, the technology has found a quainter and less Orwellian use, w here it is used to track and monitor the moo-vements of dairy cows.
Hackers hijack thousands of Chromecasts to warn of latest security bug -Hackers have hijacked thousands of exposed Chromecast streaming devices to warn users of the latest security flaw to affect the device. But other security researchers say that the bug — if left unfixed — could be used for more disruptive attacks. The culprits, known as Hacker Giraffe and J3ws3r, have become the latest person to figure out how to trick Google’s media streamer into playing any YouTube video they want — including videos that are custom-made. This time around, the hackers hijacked forced the affected Chromecasts to display a pop-up notice that’s viewable on the connected TV, warning the user that their misconfigured router is exposing their Chromecast and smart TV to hackers like themselves.Not one to waste an opportunity, the hackers also asks that you subscribe to PewDiePie, an awful internet person with a popular YouTube following. (He’s the same hacker who tricked thousands of exposed printers into printing support for PewDiePie.) The bug, dubbed CastHack, exploits a weakness in both Chromecast and the router it connects to. Some home routers have enabled Universal Plug and Play (UPnP), a networking standard that can be exploited in many ways. UPnP forwards ports from the internal network to the internet, making Chromecasts and other devices viewable and accessible from anywhere on the internet.
Leaked Documents Reveal Facebook's Biased, Convoluted Censorship Policies - Facebook's thousands of moderators have been relying on outdated, inaccurate and biased "maze of PowerPoint slides" to police global political speech, according to a trove of 1,400 internal documents obtained by the New York Times. Moderators say they often rely on Google Translate to read posts, while facing pressure to make decisions on acceptable content within a matter of seconds, according to the report. The guidelines - which are reportedly reviewed every other Tuesday morning by "several dozen Facebook employees who gather over breakfast," are filled with "numerous gaps, baises and outright errors," according to the Times. Moderators were once told, for example, to remove fund-raising appeals for volcano victims in Indonesia because a co-sponsor of the drive was on Facebook’s internal list of banned groups. In Myanmar, a paperwork error allowed a prominent extremist group, accused of fomenting genocide, to stay on the platform for months. In India, moderators were mistakenly told to flag for possible removal comments critical of religion. -NYTThe guidelines, set by "mostly young engineers and lawyers," must be interpreted by Facebook's fleet of mostly outsourced moderators which employ largely unskilled workers, "many hiredo out of call centers." Moderators express frustration at rules they say don’t always make sense and sometimes require them to leave up posts they fear could lead to violence. “You feel like you killed someone by not acting,” one said, speaking on the condition of anonymity because he had signed a nondisclosure agreement. –NYT
Apps sending users' data to Facebook without their consent - Some of the most popular apps for Android smartphones, includingSkyscanner, TripAdvisor and MyFitnessPal, are transmitting data to Facebookwithout the consent of users in a potential breach of EU regulations. In a study of 34 popular Android apps, the campaign group Privacy International found that at least 20 of them send certain data to Facebook the second that they are opened on a phone, before users can be asked for permission. Information sent instantly included the app’s name, the user’s unique ID withGoogle, and the number of times the app was opened and closed since being downloaded. Some, such as travel site Kayak, later sent detailed information about people’s flight searches to Facebook, including travel dates, whether the user had children and which flights and destinations they had searched for. European law on data-sharing changed in May with the introduction of General Data Protection Regulation (GDPR) and mobile apps are required to have the explicit consent of users before collecting their personal information. Fines for breaching GDPR can be up to 4 per cent of revenues or €20 million, whichever is greater. The researchers looked at apps with built-in Facebook trackers and intercepted data as it was sent. Many of the apps are free, suggesting that they make money from data-sharing and advertising.
These Apps Send Data To Facebook Without You Knowing It - User data is still not safe with Facebook and many other apps. A recent study has found that many popular Android apps have been secretly sending private data to Facebook without asking permission from users. Privacy International disclosed in its study shared via a paywalled Financial Times article that at least 20 out of 34 popular Android apps are sending personal data to Mark Zuckerberg’s social network without asking permission from users. Some of the apps that were identified in the report were TripAdvisor, MyFitnessPal, Skyscanner and Kayak. Aside from oversharing sensitive information, another big concern that the report pointed out was the likelihood of these apps violating the EU’s GDPR (the General Data Protection Regulation) privacy rules. This is because the identified apps are transmitting user info without consent and for potentially identifying users’ identities. User data shared to Facebook by these apps include analytics, Android ID, and many others. For instance, Kayak, which is a travel search engine, was found to be sending flight and destination search data, travel dates and even information on whether or not a user is bringing kids along to a flight. The controversial apps can also identify users based on the apps they have installed and if they typically travel around with the same person, as pointed out by Engadget. Among the apps that were identified in the study, Skyscanner insisted that it was “not aware” that it was sending user data without consent. It’s possible that the app could still be using an older version of Facebook’s developer kit. Facebook only came up with the option to ask for permission after GDPR was implemented, so those that are using the newer version can only send data to Facebook once the user has permitted it. Facebook has been in hot water since early last year when it was revealed that the company exposed data of around 87 million users to a Cambridge Analytica researcher, who was working for the Trump campaign. The data breach eventually caused the political consulting firm to shut down and it also tarnished Facebook’s reputation badly, as per Vox.
Graphic ‘deepfake’ porn videos are being weaponised to humiliate women – and everybody is a potential target - The video showed the woman in a pink off-the-shoulder top, sitting on a bed, smiling a convincing smile. It was her face. But it had been seamlessly grafted, without her knowledge or consent, onto someone else’s body: a young porn actress, just beginning to disrobe for the start of a graphic sex scene. A crowd of unknown users had been passing it around online. She felt nauseous and mortified: what if her colleagues saw it? Her family, her friends? Would it change how they thought of her? Would they believe it was a fake? “I feel violated – this icky kind of violation,” said the woman, who is in her 40s and spoke on the condition of anonymity because she worried that the video could hurt her marriage or career. “It’s this weird feeling, like you want to tear everything off the internet. But you know you can’t.” Airbrushing and Photoshop long ago opened photos to easy manipulation. Now, videos are becoming just as vulnerable to fakes that look deceptively real. Supercharged by powerful and widely available artificial-intelligence software developed by Google, these lifelike “deepfake” videos have quickly multiplied across the internet, blurring the line between truth and lie. But the videos have also been weaponised disproportionately against women, representing a new and degrading means of humiliation, harassment and abuse. The fakes are explicitly detailed, posted on popular porn sites and increasingly challenging to detect. A growing number of deepfakes target women far from the public eye, with anonymous users on deepfakes discussion boards and private chats calling them co-workers, classmates and friends. Several users who make videos by request said there’s even a going rate: about $20 per fake.
Hacker group threatens to leak 9/11 ‘truth’ unless paid in bitcoin - The Dark Overlord hacker group has threatened to leak thousands of “secret” documents stolen from insurers and government agencies that they claim reveal the truth about 9/11 – unless they’re paid not to. The Dark Overlord, a “professional adversarial threat group” known for their hacks of Netflix, plastic surgery clinics, and other sensitive targets, posted a link to a 10GB encrypted archive of documents related to 9/11 litigation, promising to release the encryption keys if their demands were not met in a post on Pastebin on Monday.The group claims the documents tell the story of what really happened on one of the most notorious dates in recent history, tweeting “We’ll be providing many answers about 9.11 conspiracies through our 18,000 secret documents leak.” They published a “teaser” consisting of letters, emails, and various documents that mention law firms, the Transport Security Administration, and the Federal Aviation Administration, with a promise of more to come. They claim to have hacked documents from not only major global insurers like Lloyds of London and Hiscox, but also Silverstein Properties, which owned the World Trade Center complex, and various government agencies. The material, which supposedly includes confidential government documents that were meant to be destroyed but were instead retained by legal firms, allegedly reveals “the truth about one of the most recognizable incidents in recent history and one which is shrouded in mystery with little transparency and not many answers.” Anyone worried they might be named in the documents can have their names redacted – for a fee, according to the announcement. “Terrorist organizations” and “competing nation states of the USA” are also offered first dibs on the info – if they pay up. Otherwise, the hackers write, the insurers can pay an unspecified bitcoin ransom – or “we’re going to bury you with this.” Some of the documents were nabbed in an April hack of a law firm associated with Hiscox that the firm acknowledges could have exposed 1,500 of its US commercial policyholders. The Dark Overlord claims that while their ransom was paid in relation to that earlier hack, their victim violated the “agreement” by cooperating with law enforcement, necessitating further extortion.
"Pay The F*ck Up": Hackers Threaten To Dump Secret 9/11 Attack Files If Bitcoin Ransom Not Met - A hacking collective known as The Dark Overlord announced on New Year's Eve that it had broken into the computer systems of a law firm and obtained files related to the September 11 attacks - threatening to publicly release a large cache of internal files unless a hefty ransom was paid, according to Motherboard. Dark Overlord's demands targeted several insurers and legal firms, including Lloyds of London, Silverstein Properties and Hiscox Syndicates. It is unclear what exact files were stolen by the group, however the hacking collective tweeted "We'll be providing many answers about 9.11 conspiracies through our 18.000 secret documents leak from @HiscoxComms and others." "Hiscox Syndicates Ltd and Lloyds of London are some of the biggest insurers on the planet insuring everything from the smallest policies to some of the largest policies on the planet, and who even insured structures such as the World Trade Centers," the group's announcement reads. According to a spokesperson for the Hiscox Group, the hackers had breached a law firm which advised the company and had likely stolen files linked to litigation tied to the 9/11 attacks. "The law firm’s systems are not connected to Hiscox’s IT infrastructure and Hiscox’s own systems were unaffected by this incident. One of the cases the law firm handled for Hiscox and other insurers related to litigation arising from the events of 9/11, and we believe that information relating to this was stolen during that breach," the spokesperson told Motherboard in an email. "Once Hiscox was informed of the law firm’s data breach, it took action and informed policyholders as required. We will continue to work with law enforcement in both the UK and US on this matter," they added.
FBI Probing Theft Of 18,000 Documents Linked To Sept 11 Attacks -- The FBI is investigating the theft of 18,000 documents related to the September 11 attacks on the World Trade Center by a hacking collective known as The Dark Overlord, according to FT, citing two people familiar with the matter. Posting under the name “The Dark Overlord”, the hacker or hackers claimed on New Year’s Eve that they had taken emails and non-disclosure agreements relating to the 9/11 attacks that were sent and received by groups including insurers Hiscox and Lloyd’s of London and the law firm Blackwell Sanders Peper Martin, now called Husch Blackwell. The Dark Overlord said it would sell the documents for bitcoin, inviting Isis, al-Qaeda and nation states to bid for them online. –FT "Pay the fuck up, or we're going to bury you with this. If you continue to fail us, we'll escalate these releases by releasing the keys, each time a Layer is opened, a new wave of liability will fall upon you," reads the hacking group's demand letter. "If you're one of the dozens of solicitor firms who was involved in the litigation, a politician who was involved in the case, a law enforcement agency who was involved in the investigations, a property management firm, an investment bank, a client of a client, a reference of a reference, a global insurer, or whoever else, you're welcome to contact our e-mail below and make a request to formally have your documents and materials withdrawn from any eventual public release of the materials. However, you'll be paying us," the note continues. Images of some of the documents began circulating on Wednesday after the group released decryption keys, which appear to show communications related to the World Trade Center. The FBI is one of multiple law-enforcement agencies who are now investigating the breach, according to FT. The Dark Overlord, meanwhile, says that it has been under investigation for years, and that it had also gathered other information from Lloyd's and Silverstein Properties - founded by former WTC owner Larry Silverstein.
The One Issue the Left and Right Can Agree On - Matt Stoller - In November, not long after Amazon announced that it would build its second headquarters in New York City and northern Virginia, Alexandria Ocasio-Cortez, the newly elected representative from Queens and the Bronx, tweeted that she’d been getting calls from residents all day. “The community’s response?” she wrote. “Outrage.” Amazon, as legal scholars were quick to point out, had become a monopoly so powerful it was using its economic heft to exploit not only competitors and suppliers, but entire states. New York and Virginia had agreed to subsidize helipads for Amazon CEO Jeff Bezos; Virginia even promised to help the company fight Freedom of Information Act requests. It would be easy to assume that most of the objections to Amazon’s HQ2 deal would come from the left. Senator Elizabeth Warren was, after all, one of the first politicians tocriticize Amazon for monopolistic practices, arguing that the e-commerce giant and companies like it had eroded what was once a “strong, robust middle class.” But disdain for corporate concentration is one of the rare things in contemporary American politics that transcends ideological divisions.Take Montana Senator Jon Tester, one of only two Democrats in the Senate to be reelected in a blood red state. Last year, heattacked the secretary of agriculture, complaining that meatpackers continue to “exploit farmers and ranchers” by manipulating the price they pay for livestock. Even corporate-friendly Democrats can sound downright populist on the subject. Senator Mark Warner of Virginia, a former venture capitalist who made his $200 million fortune off early cell phone technology, has emerged as a leading critic of the tech giants, noting how they kill competition and threaten national security. Opposition to monopoly also brings the left and the center together with unlikely allies. Perhaps the most powerful critique of corporate concentration in recent months has come from The Economist, which has attacked the American antitrust establishment for laxness. And when Ocasio-Cortez spoke out against the Amazon deal, The Wall Street Journal’s editorial board and the National Review both praised her. “I hate to admit it, but Alexandria Ocasio-Cortez has a very good point,” said Fox News’s Tucker Carlson. “It’s hard to argue with the internal logic.... The richest man in the world just got $2 billion in taxpayer subsidies. How does that work?” Monopolies penetrate almost every sector of the U.S. economy, airlines to pharmaceuticals, candy to coffins, often leading to unfair prices, lower wages, or both. Facebook and Google have so much power in the advertising market—they control 66 percent of online ad revenue—that they are undermining newspapers. Two companies make 64 percent of American diapers, one company builds 52 percent of America’s mobile homes, two companies produce 78 percent of its corn seeds, and one company assembles 61 percent of syringes.
Why France's Yellow Vest Protests Have Been Ignored By The Resistance In The US - In less than two months, the yellow vests (“gilets jaunes”) movement in France has reshaped the political landscape in Europe. For a seventh straight week, demonstrations continued across the country even after concessions from a cowed President Emmanuel Macron while inspiring a wave of similar gatherings in neighboring states like Belgium and the Netherlands. It turned out that a crisis was not averted but merely postponed when Macron defeated his demagogue opponent Le Pen in the 2017 French election. While it is true that the gilets jaunes were partly impelled by an increase on fuel prices, contrary to the prevailing narrative their official demands are not limited to a carbon tax. They also consist of explicit ultimatums to increase the minimum wage, improve the standard of living, and an end to austerity, among other legitimate grievances. Since taking office, Macron has declared war on trade unions while pushing through enormous tax breaks for the wealthy (like himself) — it was just a matter of time until the French people had enough of the country’s privatization. It is only a shock to the oblivious establishment why the former Rothschild banker-turned-politician, who addressed the nation seated at a gold desk while Paris was ablaze, is suddenly in jeopardy of losing power. The status quo’s incognizance is reminiscent of Marie Antoinette who during the 18th century when told the peasants had no bread famously replied, “let them eat cake” as the masses starved under her husband Louis XIV. While the media’s conspicuous blackout of coverage is partly to blame, the deafening silence from across the Atlantic in the United States is really because of the lack of class consciousness on its political left. With the exception of Occupy Wall Street, the American left has been so preoccupied with an endless race to the bottom in the two party ‘culture wars’ it is unable to comprehend an upheaval undivided by the contaminants of identity politics. A political opposition that isn’t fractured on social issues is simply unimaginable. Not to say the masses in France are exempt from the internal contradictions of the working class, but the fetishization of lifestyle politics in the U.S. has truly become its weakness. We will have to wait and see whether the yellow vests transform into a global movement or arrive in America, but for now the seeming lack of solidarity stateside equates to a complicity with Macron’s agenda. It serves as a reminder of the historically revisionist understanding of French politics in the U.S. that is long-established.
Sealed vs. Sealed: The U.S. Supreme Court might hear a secret case about a grand jury subpoena - A sealed and secret court case about a grand jury subpoena made its way from the federal district court (trial court) to the Court of Appeals for the District of Columbia Circuit. Now the supreme court has opened its door slightly and, after receiving some papers, has whispered back that it is thinking about whether it will hear the case. The current deadline for a response is Monday at High Noon on New Year's Eve. However, one was filed by the government (possibly through the "special counsel" Robert Mueller group) on Friday, 28 December-- https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/18a669.html https://turcopolier.typepad.com/files/sealed_gj_case_sup_court_docket.pdf This case started out anonymously in a federal district court in Washington D.C. At some point, when it was at the court of appeals, a reporter or staffer for the Politico website was in the appellate court clerk's office when a lawyer came in, and was overheard asking for a copy of the special counsel's latest sealed filing. When approached by the Politico person, the lawyer refused to give his name or identify his client [1]. This started an ongoing rumor that a closed court proceeding was going on that might have to do with the Robert Mueller investigation about the Russian government and the Trump presidential campaign. When the matter was appealed to the D.C. Circuit Court of Appeals, that court clerk's docket sheet was public, although it consisted mostly of the word "sealed". Backtracking from it to the district clerk's file, the trial court's docket sheet itself was secret, containing only the case number, the name "Sealed vs. Sealed", and a statement that the case is not available to the public. But a few clues appeared in the court of appeals docket sheet, giving us a case number in the district court (1:18-gj-00041-BAH), the judge presiding over the case there (Beryl A. Howell), the fact that it involves a grand jury matter (the 'gj' in the case number), and the day the proceeding began in the trial court (16 August 2018) [2]. --
A Holiday Mystery: Why Did John Roberts Intervene in the Mueller Probe? - A mysterious grand jury subpoena case has been working itself through the D.C. courts since August. Doughty reporting by Politico linked the grand jury case to special counsel Robert Mueller. Some of us, connecting the dots, wondered whether Mueller’s antagonist in this secret subpoena battle might be President Donald Trump himself. Speculation heightened two weeks ago when the D.C. Circuit cleared an entire floor of reporters assembled for the oral argument, in order to protect the identity of the litigants.Four days later, the D.C. Circuit judges burst the speculative bubble with a decision that halfway revealed the identity of the party litigating against the government: not Trump, but an unnamed corporation (“the Corporation”) owned by an unnamed foreign state (“Country A”). Although the case is still plenty mysterious (What foreign state? What records of what transactions? Why the hard-fought litigation?), the evident fact that Trump was not directly involved in the litigation seemingly drained further proceedings of direct suspense. Mueller watchers headed off for the holidays. And then, last week, on the Sunday before Christmas, Chief Justice John Roberts personally intervened in this matter.That’s right: The chief justice of the United States himself issued an order on a Sunday, in this very case. If you think that’s highly unusual, you’re right. And the action he took was equally unusual. At least for the moment calling into question the unanimous decisions of the courts below, the chief justice blocked the District Court’s order requiring the foreign corporation to comply with the grand jury subpoena, until the government’s lawyers could respond to the Corporation’s briefings.So now, in abrupt fashion, Mueller’s investigation has suddenly reached the Supreme Court, and with the personal attention of the chief justice, no less. What does this all mean? Let’s try to unpack it.
Exculpatory Russia evidence about Mike Flynn that US intel kept secret - For nearly two years now, the intelligence community has kept secret evidence in the Russia collusion case that directly undercuts the portrayal of retired Army general and former Trump national security adviser Michael Flynn as a Russian stooge. That silence was maintained even when former Acting Attorney General Sally Yates publicly claimed Flynn was possibly “compromised” by Moscow.And when a Democratic senator, Al Franken of Minnesota, suggestedthe former Defense Intelligence Agency (DIA) chief posed a “danger to this republic.” And even when some media outlets opined about whether Flynn’s contacts with Russia were treasonous. Yes, the Pentagon did give a classified briefing to Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) in May 2017, but then it declined the senator’s impassioned plea three months later to make some of that briefing information public.“It appears the public release of this information would not pose any ongoing risk to national security. Moreover, the declassification would be in the public interest, and is in the interest of fairness to Lt. Gen. Flynn,” Grassley wrote in August 2017. Were the information Grassley requested made public, America would have learned this, according to my sources:
- Before Flynn made his infamous December 2015 trip to Moscow — as a retired general and then-adviser to Donald Trump’s presidential campaign — he alerted his former employer, the DIA.
- He then attended a “defensive” or “protective” briefing before he ever sat alongside Vladimir Putin at the Russia Today (RT) dinner, or before he talked with Russian Ambassador Sergey Kislyak.
- The briefing educated and sensitized Flynn to possible efforts by his Russian host to compromise the former high-ranking defense official and prepared him for conversations in which he could potentially extract intelligence for U.S. agencies such as the DIA.
- When Flynn returned from Moscow, he spent time briefing intelligence officials on what he learned during the Moscow contacts. Between two and nine intelligence officials attended the various meetings with Flynn about the RT event, and the information was moderately useful, about what one would expect from a public event, according to my sources.
DIA spokesman James Kudla on Wednesday declined comment about Flynn. Rather than a diplomatic embarrassment bordering on treason, Flynn’s conduct at the RT event provided some modest benefit to the U.S. intelligence community, something that many former military and intelligence officers continue to offer their country after retirement when they keep security clearances.
New Studies Show Pundits Are Wrong About Russian Social-Media Involvement in US Politics - The release of two Senate-commissioned reports has sparked a new round of panic about Russia manipulating a vulnerable American public on social media. Headlines warn that Russian trolls have tried to suppress the African-American vote, promote Green Party candidate Jill Stein, recruit “assets,” and “sow discord” or “hack the 2016 election” via sex-toy ads and Pokémon Go. “The studies,” writes David Ignatius of The Washington Post, “describe a sophisticated, multilevel Russian effort to use every available tool of our open society to create resentment, mistrust and social disorder,” demonstrating that the Russians, “thanks to the Internet…seem to be perfecting these dark arts.” According to Michelle Goldberg of The New York Times, “it looks increasingly as though” Russian disinformation “changed the direction of American history” in the narrowly decided 2016 election, when “Russian trolling easily could have made the difference.” The reports, from the University of Oxford’s Computational Propaganda Research Project and the firm New Knowledge, do provide the most thorough look at Russian social-media activity to date. With an abundance of data, charts, graphs, and tables, coupled with extensive qualitative analysis, the authors scrutinize the output of the Internet Research Agency (IRA) the Russian clickbait firm indicted by special counsel Robert Mueller in February 2018. On every significant metric, it is difficult to square the data with the dramatic conclusions that have been drawn. 2016 Election Content: The most glaring data point is how minimally Russian social-media activity pertained to the 2016 campaign. The New Knowledge report acknowledges that evaluating IRA content “purely based on whether it definitively swung the election is too narrow a focus,” as the “explicitly political content was a small percentage.” To be exact, just “11% of the total content” attributed to the IRA and 33 percent of user engagement with it “was related to the election.” The IRA’s posts “were minimally about the candidates,” with “roughly 6% of tweets, 18% of Instagram posts, and 7% of Facebook posts” having “mentioned Trump or Clinton by name.”
US intelligence think tank conducted “false flag” operation impersonating Russian election interference --A series of articles published in the past week have revealed that the New Knowledge think tank conducted a “false flag” operation to influence the 2017 Alabama state election and make it appear that Russia was conducting a Twitter campaign to back its preferred candidate. New Knowledge is closely connected to the US intelligence agencies and has been widely cited as an impartial investigator of “Russian meddling” in US politics.The story was first reported by the Washington Post on December 18 and the New York Times on December 19. Only a day earlier, both newspapers had carried lead front-page articles based largely on a New Knowledge report that claimed to provide new evidence of Russian social media operations to influence American politics.As is the now well-established procedure, the report by New Knowledge was presented by the Times and Post as “independent” and scientific. The articles in the Times and Post were then made the basis for countless news articles and television reports breathtakingly reporting the latest nefarious activities of the Kremlin as established fact.The New Knowledge report, entitled “The Tactics & Tropes of the Internet Research Agency,” cited hundreds of predominantly left-wing social media posts on Facebook, including on police violence and government spying, to argue that Russian activities were sowing political divisions in the United States. It amounted to a brief for mass internet censorship directed against working-class political opposition. (See: “The disinformation campaign behind the allegations of Russian ‘disinformation’”) In its December 19 article, the Times admits that New Knowledge CEO Johnathon Morgan was involved in an effort to promote the election of Democrat Doug Jones against Republican rival Roy Moore in the 2017 Alabama Senate election. The operation, codenamed “Project Birmingham,” included creating fake Facebook pages to attract conservative voters and promote an obscure write-in conservative Republican candidate likely to draw votes away from Moore. The operation also sought to artificially inflate click rates on anti-Moore news stories in order to encourage more such articles. Moore ultimately lost the election. Most significantly, the Times report includes the admission that the project “involved a scheme to link the Moore campaign to thousands of Russian accounts that suddenly began following the Republican candidate on Twitter, a development that drew national media attention.”
Irony alert: Firm that warned Americans of Russian bots...was running an army of fake Russian bots - The co-founders of cybersecurity firm New Knowledge warned Americans in November to “remain vigilant” in the face of “Russian efforts” to meddle in US elections. This month, they have been exposed for doing just that themselves. Ryan Fox and Jonathan Morgan, who run the New Knowledge cybersecurity company which claims to “monitor disinformation” online, penned a foreboding op-ed in the New York Times on November 6, about “the Russians” and their nefarious efforts to influence American elections. Morgan and Fox, intrepid cyber sleuths that they are, claimed in the article they had detected more “overall activity” from ongoing Russian influence campaigns than social media companies like Facebook and Twitter had yet revealed — or that other researchers had been able to identify.The New Knowledge guys even authored a Senate Intelligence Committee report on Russia's alleged efforts to mess with American democracy. They called it a "propaganda war against American citizens." Impressive stuff. They must be really good at their job, right? This week, however, we learned that New Knowledge was running its own disinformation campaign (or “propaganda war against Americans,” you could say), complete with fake Russian bots designed to discredit Republican candidate Roy Moore as a Russia-preferred candidate when he was running for the US senate in Alabama in 2017. The scheme was exposed by the New York Times — the paper that just over a month earlier published that aforementioned oped, in which Fox and Morgan pontificated about Russian interference online.New Knowledge created a mini-army of fake Russian bots and fake Facebook groups. The accounts, which had Russian names, were made to follow Moore. An internal company memo boasted that New Knowledge had “orchestrated an elaborate 'false flag' operation that planted the idea that the Moore campaign was amplified on social media by a Russian botnet.”
The Only Meddling Russian Bots Were Actually Democrat-Led Experts - Cybersecurity “experts” in the United States have long alleged that “Russian bots” were used to meddle in the 2016 elections. But, as it turns out, the authors of a Senate report on “Russian election meddling” actually ran the false flag meddling operation themselves. A week before Christmas, the Senate Intelligence Committee released a report accusing Russia of depressing Democrat voter turnout by targeting African-Americans on social media. Its authors, New Knowledge, quickly became a household name. Described by the New York Times as a group of “tech specialists who lean Democratic,” New Knowledge has ties to both the U.S. military and the intelligence agencies. The CEO and co-founder of New Knowledge, Jonathon Morgan, had previously worked for DARPA (Defense Advanced Research Projects Agency), the U.S. military’s advanced research agency known for horrific ideas on how to control humanity. Morgan’s partner, Ryan Fox, is a 15-year veteran of the NSA (National Security Agency) who also worked as a computer analyst for the Joint Special Operations Command (JSOC). Their unique skill sets have managed to attract the eye of authoritarian investors, who pumped $11 million into the company in 2018 alone, according to a report by RT. Morgan and Fox have both struck gold in the “Russiagate” scheme, which sprung into being after Hillary Clinton blamed Moscow for Donald Trump’s presidential victory in 2016. It is worth noting that the 600 “Russia-linked” Twitter accounts monitored by the dashboard is not disclosed to the public either, making it impossible to verify these claims. This inconvenience has not stopped Hamilton 68 from becoming a go-to source for hysteria-hungry journalists, however. Yet on December 19, a New York Timesstory revealed that Morgan and his crew had created the fake army of Russian bots, as well as several fake Facebook groups, in order to discredit Republican candidate Roy Moore in Alabama’s 2017 special election for the U.S. Senate. “From the way it was formed to the secrecy of its "methods" to the blatantly false assumptions on which its claims rest, "Hamilton68" is probably the single most successful media fraud & US propaganda campaign I've seen since I've been writing about politics. It's truly shocking.” — Glenn Greenwald (@ggreenwald) February 22, 2018
U.S. Stocks End Worst Year Since Financial Crisis: Markets Wrap - U.S. stocks ended the worst year since the financial crisis with a narrow gain in thin pre-holiday trading. Treasuries rose to a 10-month high. The S&P 500 finished a choppy session higher and the Nasdaq Composite capped its first four-day advance since August amid optimism that President Donald Trump will move toward a trade deal with China. The advance trimmed the worst December rout for the S&P 500 since 1931 to 9.2 percent. That monthly rout capped a 6.2 percent slide in the year, the biggest of the record bull market. Stocks around the world limped into the end of a dismal year that’s seen bear markets in equities from Japan to Germany. Europe’s main stock gauge fell 13 percent drop in the year -- the biggest since 2008. The 10-year Treasury yield slid to 2.68 percent, the lowest since February. The dollar edged lower as a government shutdown continued, while the yen climbed to a four-month high. In commodities, crude slumped to its first annual loss since 2015, completing a reversal that saw it drop from a four-year high set just three months ago. Natural gas futures slid on Friday below $3 for the first time since September, giving the front-month contract its worst December since 1991. Gold barreled into 2019 near a six-month high on haven demand.
El-Erian- 1000-Point Swings In The Dow Are The New Reality - While even some of the most dogged bulls are throwing in the towel on their optimistic forecasts for the US (see Goldman taking the axe to its 2019 GDP forecast noted earlier), there are those who steadfastly believe that 2019 will be a solid year for the US economy, and that no recession is still in sight.One among them is Allianz chief economic advisor Mohamed El-Erian, who dismissed concerns that the US is facing a recession in the coming year, saying in an interview on Fox News Sunday that the economy is likely to continue growing at 2.5-3%."[A recession] is certainly not becoming a reality. You need either a major policy mistake or a massive market accident to push us into recession. But we will slowdown unless we build on the pro-growth policies."On the same day that he penned a Bloomberg op-ed, explaining why "life is getting harder for central banks" in which he concluded that "whichever way you look at it central banks will be exposed to more criticism from politicians, market participants and analysts" - and rightfully so, after all it was the central banks that engaged in the biggest can-kicking experiment in history by injecting $16 trillion in liquidity and the time to pay the piper is fast approaching, El-Erian said that "Trump’s frequent criticism of Fed policy is unusual" (in fact, as Goldman observed earlier it is not at all unusual and that "it is far from unprecedented on a longer-term comparison"), adding that the independence of the central bank is important to economic security (at this point we could go into a tangent how only career economists believe the Fed is "independent", especially from commercial bank pressure but we won't).And yet, adding his own set of criticism to US monetary policy, El-Erian said that the Fed realizes that it can’t put its key policy tool, the federal funds rate, on autopilot, and that "it needs to better communicate its policy choices." El-Erian also said that the turmoil in Washington, including a government shutdown now in its ninth day, is a factor in the market’s recent decline, which is also open for debate considering that the market is up nearly 3% since the government was officially shutdown at midnight on December 21.
Stocks Slide After OCC Unexpectedly Says US Banks Well Positioned For Crisis - Curious what prompted US stocks to swoon lower around 2:45pm, having traded closely around the unchanged line? It may have been a reported by Reuters according to which the Office of the Comptroller of the Currency said that the U.S. banking system has "strong capital and liquidity" and is "well-positioned" to manage more adverse market conditions. If this sounds suspiciously close to what Steven Mnuchin said the weekend ahead of the Christmas Eve market massacre when, inexplicably, the Treasury Secretary announced that US bank liquidity levels are sufficient and that he had spoken to bank CEOs and summoned the Plunge Protection team, is because it is. Readers will hardly need a reminder that the market's response to Mnuchin's statement was one of shock: after all, nobody had even suggested that there may be any concerns with US bank, so Mnuchin's statement stunned everyone, and prompted question about what if anything may be wrong with US banks for Mnuchin to try to "calm" markets in such a bizarre way which was last deployed during the financial crisis. Well, now it was the OCC's turn. In a statement to Reuters, OCC spokesman Bryan Hubbard said the banking regulator was monitoring the effects of falling stock markets on the nearly 1,300 institutions it oversees and would share any relevant systemic information with fellow supervisors through the appropriate interagency forums. "The federal banking system ... is strong with capital and liquidity near historical highs and improved earnings and risk management. From this strength, the federal banking system is well positioned to manage more adverse market conditions.” He added that OCC expects supervised institutions to understand exposures within their portfolios and take appropriate action to mitigate any risks, although just like in the case of Mnuchin, it was not at all obvious why the OCC would address bank liquidity levels all of a sudden: after all not even the biggest market skeptics have warned about bank liquidity, or solvency for that matter. In any case, a few more "assurances" such as this one and the investing world will observe first hand just how prepared for a crisis US banks truly are.
Bizarre Repo Rate Surge Continues And Nobody Can Explain Why - Yesterday we showed what was arguably the strangest move that took place on the last trading day of 2018, when the overnight general collateral repo rate shot up from 2.5% last Friday to as high as 6.125% on Monday, the biggest one day move on record, bringing overnight GC repo to the highest level since January 2001. While violent year-end moves are well-known in the overnight funding markets, the magnitude of yesterday's surge was simply unprecedented, and commenting on the GC Repo surge, Scott Skyrm, EVP at Curvature Securities said that "the cash never came in," noting that while "funding pressure should be about 50 basis points" and yet what we got was "350 basis points." While clearly there was something amiss with year end liquidity - in a day in which the 1 Year yield closed above both 5Y and 7Y yields - the record spike in repo still left rates traders scratching their heads, with Skyrm warning that market participants may have to start pricing in the fact that if repo rates "spike up a bit, they could go much higher." He was right, because one day after GC repo normalized on January 1, it has since exploded higher once again, and on Wednesday, the overnight GC repo rates spiked again, and this time one couldn't blame it on year-end funding pressures for the simple reason that it is no 364 days until the next year-end. As shown in the chart below, GC was averaging about 3.25% as of 8:30am ET, according to Nex data after averaging 3.50% at the 8am open after dropping back to 2.50% on Tuesday, and rising as high as 4.525% on January 2, after the new year. Commenting on the move, Stone & McCarthy said that overnight GC has been “very volatile again already this morning,” ranging anywhere from 3.30% to above 4%, in a move which was not supposed to happen if all the Dec 31 volatility reflected was year-end "window dressing" liquidity plumbing (again: it's now Jan 2). Another attempt to explain these unprecedented moves came from Wrightson ICAP economist Lou Crandall, who said that the confluence of declining reserves at the Fed, banks’ increasing presence in Treasury repo and the same institutions pulling back at year-end to shore up balance sheets led to an “eye-popping” surge in the overnight funding rate on Monday. Furthermore, with the supply of Fed balances declining, banks have increased their Treasury repo investments to meet liquidity objectives; in other words the year-end surge was merely a reflection of regulatory requirements. And, as Bloomberg further notes, "one complication is that these same banks tidy their balance sheets at year-end when regulatory surcharges are calculated. As part of their bid to lessen these regulatory imposts, banks tend to pare their exposure to repo, which in turn makes it more expensive for borrowers."
‘Flash-Crash’ Moves Hit Currency Markets - It took seven minutes for the yen to surge through levels that have held through almost a decade. In those wild minutes from about 9:30 a.m. Sydney, the yen jumped almost 8 percent against the Australian dollar to its strongest since 2009, and surged 10 percent versus the Turkish lira. The Japanese currency rose at least 1 percent versus all its Group-of-10 peers, bursting through the 72 per Aussie level that has held through a trade war, a stock rout, Italy’s budget dispute and Federal Reserve rate hikes. Traders across Asia and Europe are still seeking to piece together what happened in those minutes when orders flooded in to sell Australia’s dollar and Turkey’s lira against the yen. While some pointed to risk aversion triggered by Apple Inc. cutting its sales outlook, others said Japanese retail investors were bailing out of loss-making positions. Whatever the cause, the moves were exacerbated by algorithmic programs and thin liquidity with Japan on holiday. “The moves were very violent,” . “It would have caught some by big surprise.” With Japan on a four-day holiday this week, traders said they struggled to handle a flood of sell orders with pricing erratic. Once the yen strengthened past 105.50 against the dollar, others were forced to cover their short yen positions, said traders who asked not to be identified as they aren’t permitted to speak publicly. “It looks more like a liquidity event with the move happening in the gap between the New York handover to Asia,” . “It was exacerbated by a Japan holiday and retail stops getting filled on the way down especially in yen crosses.” As a result, the yen surged against every currency tracked by Bloomberg, and was up 1 percent against the dollar at 107.78 by 9:30 a.m. in London. The haven asset has strengthened against all its major counterparts over the past 12 months as concerns over global economic growth mounted and stocks tumbled. It rose 2.7 percent against the dollar last year, the only G-10 currency to gain versus the greenback. “Yen strength has been omnipresent since mid-December, cementing the status of the yen as the only true safe haven these days amid political risks elsewhere,” That hasn’t stopped investors in Japan from piling into foreign currencies as the central bank’s negative-interest-rate policy made the yen a source of cheap funding. Individuals boosted their net Aussie long positions by 45 percent in the two weeks through Dec. 18, according to the latest data from Tokyo Financial Exchange Inc. These retail accounts’ net Turkish lira long positions were also at a four-month high.
The Bad Stuff That the Stock Market Worried About Is Starting to Happen - All of a sudden, the fundamentals aren’t looking as strong. First it was Apple Inc.’s $5 billion revenue miss, hints of which lopped 30 percent from its stock over three months. Now it’s a closely watched gauge of U.S. factory activity, which dropped to a two-year low and missed every estimate in a Bloomberg survey. What’s going on? Over and over in the fourth quarter, as the S&P 500 plunged 19.8 percent to the brink of a bear market, investors heard the same refrain: don’t panic, the economy, and corporate earnings, look strong. In the last 24 hours, confidence in those assurances has taken a hit. The Dow Jones Industrial Average fell more than 600 points, or 2.6 percent, Thursday morning, while losses in the Nasdaq 100 spiraled toward 3 percent. “The market is the wisdom of all investors -- it was discounting this type of news-flow with the sharp and violent sell-off we got in December,” Alec Young, managing director of global markets research at FTSE Russell, said in a phone interview. “When it makes a big move, up or down, it’s telling you positive or negative things about future developments. The extreme move down was telling you we’d get this type of news-flow.” All the bad news has put an abrupt halt to what had been the equity market’s best five-day run since 2011, a surge in the S&P 500 that reached 7.2 percent at yesterday’s high point. It’s reprising anxiety that left stocks within points of a bear market on Christmas Eve. While plenty of real-time irritants existed to explain the fourth-quarter tumble -- tariff wars, the Federal Reserve, stretched valuations -- many bulls expressed bewilderment about the velocity of the plunge given estimates for growth. The U.S. economy is forecast to expand by 2.6 percent in 2019 and corporate earnings, while off this year’s torrid pace, are expected by analysts to rise 8.3 percent.
Libor is going dark in 2021, and some banks aren’t ready — Industry insiders are worried some banks are not paying enough attention to the likely switch to a new interest rate benchmark. Regulators appear ready to replace the London interbank offered rate — marred by scandal in recent years — with a new benchmark known as the secured overnight financing rate as early as 2021. But concern is growing that not all financial institutions are focused on adopting the new rate. “As we look at this transition from Libor to a new index at the end of 2021, we see 2019 as a year to increase awareness and to encourage banks to begin preparing,” said Mike Wilson, president of the Federal Home Loan Bank of Des Moines. “It’s not a doomsday situation, but it’s really time to start thinking through how the transition is going to work and how it affects their balance sheet.” Hu Benton, vice president of banking policy at the American Bankers Association, said the challenge for the industry right now is that, while many banks know their exposures or are working to quantify their exposures, some banks just aren’t thinking about reference rates at all right now. “Anybody you ask who cares … all believe there is work to do to get it on the radar screen of everybody whose screen it should be on,” Benton said. In 2014, the Federal Reserve Board and the Federal Reserve Bank of New York convened an Alternative Reference Rate to identify a successor to Libor, with SOFR emerging as the strongest contender. Whereas the past scandal involving major banks' manipulation of Libor laid bare a central problem with the rate — that it is based on only a small number of actual transactions — SOFR is based on overnight reverse repurchase agreements that offer a deep and liquid market with far more transactions to use as a base. In April, the New York Fed began publishing the daily the SOFR along with two other reference rates based on overnight repos.
Wells Fargo agrees to $575 million settlement affecting all 50 states in wake of fake accounts - Wells Fargo will pay $575 million to resolve claims the bank violated state consumer protection laws as part of a major settlement agreement covering consumers in all 50 states and the District of Columbia, Iowa Attorney General Tom Miller announced Friday.Wells Fargo will also create a consumer restitution review program, the attorney general's office said in a statement. Consumers who haven't been fully reimbursed through restitution programs already in place may seek review by a bank escalation team.Wells Fargo has been under fire since it was revealed in 2016 that employees had fraudulently opened millions of fake accounts to meet sales goals. According to the attorney general's office, the settlement addresses allegations that Wells Fargo:
- Opened millions of unauthorized accounts and enrolled customers into online banking services without their knowledge or consent;
- Improperly referred customers for enrollment in third-party renters and life insurance policies;
- Improperly charged auto loan customers for force-placed and unnecessary collateral protection insurance;
- Failed to ensure that customers received refunds of unearned premiums on some optional auto finance products;
- Incorrectly charged customers for mortgage rate lock extension fees.
The Malaysia Scandal Is Starting to Look Dire for Goldman Sachs - Matt Taibbi - Goldman Sachs, which has survived and thrived despite countless scandals over the years, may have finally stepped in a pile of trouble too deep to escape. There’s even a Donald Trump angle to this latest great financial mess, but the outlines of that subplot – in a case that has countless – remains vague. The bank itself is in the most immediate danger. The company’s stock rallied Thursday to close at 165, stopping a five-day slide in which the firm lost almost 12 percent of its market value. The company is down 35 percent for the year, most of that coming in the past three months as Goldman has been battered by headlines about the infamous 1MDB scandal. Just before Christmas, Malaysian authorities filed criminal charges against Goldman, seeking a stunning $7.5 billion in reparations for the bank’s role in the scandal. Singapore authorities also announced they were expanding their own 1MDB probe to include Goldman. In the 1MDB scheme, actors tied to former Malaysian Prime Minister Najib Razak allegedly siphoned mountains of cash out of a state investment fund. The misrouted money went to lavish parties with celebrity guests like Alicia Keys, a $35 million jet, works by Monet and Van Gogh, property in New York, Los Angeles and London, and (ironically) the funding of the movie The Wolf of Wall Street. The cash for this mother of all bacchanals originally came from bonds issued by Goldman, which earned a whopping $600 million from the Malaysians. The bank charged prices for its bond issuance that analysts believe were suspiciously high – like a massage price that suggests you’re probably getting more than a massage. Najib lost re-election in May, ending a 61-year reign for his party. National anger over 1MDB was a major reason for his downfall. The prime minister was allegedly central to the scam, which involved luring investors to national development projects that mostly never took place. Trump hosted Najib at the White House last year, thanking the soon-to-be-ousted leader for “all the investment you’ve made in the United States.” At least at one time, the two men were pals. They golfed together once at the Trump National Golf Club in Bedminster, New Jersey. On November 30th of this year, the Justice Department filed a civil forfeiture suit targeting more than $73 million funneled into the country by 1MDB players. There is email evidence the money may have been intended to help influence the Trump administration to drop the case. But Najib’s electoral loss changed the picture. With his ouster, the new Malaysian government was suddenly eager to help outside investigators.
MBA Political Action Committee raised record amount in 2018 - With its bolstered fundraising cache, the Mortgage Bankers Association Political Action Committee should hold an increased influence over the industry's policy and regulation issues in the coming year.MORPAC raised over $2.1 million in the 2017-18 cycle and a projected $1.2 million for just 2018, setting its single-cycle and single-year fundraising records. The increase was due to a 70% deeper contributor base consisting of 571 new funders from 2017.The transfer of power within the House of Representatives should open opportunities for GSE reform and mortgage policy. "On Capitol Hill, we expect the shift in the political continuum will provide additional opportunities to improve access to mortgage credit that build on the successes of 2018. For example, a long-term reauthorization of the National Flood Insurance Program is still awaiting action," the MBA said in a press release."Cybersecurity and consumer data issues will be an area of interest in both chambers. And of course, housing finance reform will continue to be a central focus for members of the Senate Banking Committee, the House Financial Services Committee and the White House and the Federal Housing Finance Agency, as policymakers look to finally address the long-term realignment and role of our secondary mortgage market system," the press release continued. "Our policy successes of the past year would not have been possible without extensive engagement with our members. Through more than 20 committees, forums, networks and working groups, our members helped MBA develop and sharpen our advocacy positions with legislators, regulators and other policymakers," the release stated.
December 2018: Unofficial Problem Bank list declined to 77 Institutions, Q4 2018 Transition Matrix - Note: Surferdude808 compiles an unofficial list of Problem Banks compiled only from public sources. Here is the unofficial problem bank list for December 2018.Here are the monthly changes and a few comments from surferdude808: Update on the Unofficial Problem Bank List for December 2018. During the month, the list fell by one to 77 institutions after three removals and two additions. Assets increased by $915 million to $54.8 billion. A year ago, the list held 103 institutions with assets of $20.9 billion. This month, actions have been terminated against Persons Banking Company, Forsyth, GA ($312 million); The Citizens State Bank, Okemah, OK ($86 million); and Bison State Bank, Bison, KS ($10 million). Additions this month include Patriot Bank, National Association, Stamford, CT ($915 million Ticker: PNBK); and Quontic Bank, Astoria, NY ($407 million). With it being the end of the fourth quarter, we bring an updated transition matrix to detail how banks are moving off the Unofficial Problem Bank List. Since the Unofficial Problem Bank List was first published on August 7, 2009 with 389 institutions, a total of 1,738 institutions have appeared on a weekly or monthly list since the start of publication. Only 4.4 percent of the banks that have appeared on a list remain today as 1,661 institutions have transitioned through the list. Departure methods include 976 action terminations, 406 failures, 261 mergers, and 18 voluntary liquidations. Of the 389 institutions on the first published list, only 6 or 1.5 percent, are still designated as being in a troubled status more than nine years later. The 406 failures represent 23.4 percent of the 1,738 institutions that have made an appearance on the list. This failure rate is well above the 10-12 percent rate frequently cited in media reports on the failure rate of banks on the FDIC's official list.
New CFPB chief’s memo to staff- Enforce law, but don’t presume guilt -- Kathy Kraninger, the director of the Consumer Financial Protection Bureau, said in an email to staff that the bureau will “vigorously enforce the law,” but also must weigh the “costs and benefits to consumers” of enforcement activities and rulemakings. The email, which was sent Wednesday to the CFPB’s staff and obtained by American Banker, is one of the first indications of how Kraninger plans to approach policy and leadership. “We must do our work with an open mind and without presumptions of guilt, and to always carefully weigh the costs and benefits to consumers of our enforcement activities and regulatory rulemakings,” Kraninger wrote in the brief email. “On my watch as Director, the CFPB will vigorously enforce the law. I also want the Bureau to respect the rights of all we serve and interact with, to safeguard their personal information, and to be transparent in its operations.” The email, addressed simply to “All,” began with greetings about the new year that offered “a fresh start” and “a new beginning.” “In my first few days I have met many of you, and each interaction has strengthened my opinion that the Bureau is home to dedicated professionals with a firm grasp of often sensitive subjects and complex policies,” Kraninger wrote. “I deeply respect the work we do.” Kraninger has echoed many views of her predecessor, White House budget director and acting Chief of Staff Mick Mulvaney. Still, Kraninger has staked out her own ground by scrapping Mulvaney's rebranding of the CFPB’s name that purportedly would have cost businesses up to $300 million. She appeared to want to send a unifying message to staff in the memo. “Let’s move forward as a team to make sure the American people are treated fairly, that the financial institutions that serve them are competing on a level playing field, and the marketplace is innovating in ways that enhance both choice and the needs of the consumer,” she wrote.
USAA mishandled payday disputes, opened unauthorized accounts: CFPB - USAA Federal Savings Bank will pay over $15 million in restitution and fines to settle claims by the Consumer Financial Protection Bureau that the bank neglected stop-payment requests and reopened deposit accounts without customers' consent. The CFPB's consent order, announced Thursday, alleged the bank refused to investigate when customers asserted that funds had been debited in error. The agency specifically singled out USAA's process for responding to disputed payday loan transfers as a source of the bank's faulty practices. The CFPB said USAA also engaged in unfair acts or practices from 2011 to 2016 by reopening closed consumer deposit accounts in certain circumstances without providing timely notice. The order said that USAA reopened 16,980 closed accounts without obtaining consumers’ authorization, and that 5,118 customers incurred roughly $270,000 in fees. In July 2017, USAA reimbursed those customers' fees plus interest. The $82.2 billion-asset San Antonio bank agreed to pay a $3.5 million fine and $12 million in restitution to 66,000 members for violations of the Electronic Fund Transfer Act, Regulation E and the Consumer Financial Protection Act of 2010, the CFPB said. The 39-page consent order said USAA had refused to stop or correct payments payday loans after customers notified the bank about suspected errors on electronic fund transfers that they said were incorrect, unauthorized or exceeded the authorization granted by the consumer.
Conventional mortgage shortage may spark boom for non-QM securities - Rising rates will drive growth in the non-qualified mortgage securitization market, which could be accelerated if a shortage of conventional loans increases investor appetite for the paper, said Tom Millon of the Capital Markets Cooperative. Millon is the president, chairman and chief executive of the CMC, which also has a lending subsidiary that he heads as well. Plus Millon is on the advisory board for the Common Securitization Platform. National Mortgage News asked Millon five questions about his take on the secondary market for 2019. Responses have been edited for length and clarity.
The specter of deflation is haunting risk markets - One thing stands out in another day of wild swings in equity indices: The worst performing sectors in the S&P 500 today are, respectively, Residential Real Estate Investment Trusts (-3.7%), Industrial REITS (-3.5%) and Office REITS (-3.5%). These are supposed to be low-volatility income instruments that trade like bonds. They are supposed to rise when bond yields fall. The US 30-year bond today rose by almost 1 percentage point, and the broad equity indices closed with marginal losses. But real estate got crushed. That’s not a good sign. It says that investors don’t believe that home renters, office renters and industrial companies will continue to pay today’s high rents. Bottom line: the Federal Reserve will put itself on perma-hold out of fear of financial crisis. Shelter, the US Bureau of Labor Statistics estimates, makes up nearly 40% of US consumer expenditures, so a drop in rents implies a substantial decline in the overall price level. The Zillow Rental Index was flat year-on-year as of November, and today’s price action says investors think it will turn negative. The two worst days for residential REITS in the past five years were today and Christmas Eve, and the bond market rallied on both days. That can’t be good. As the chart below shows, REIT prices for the past year moved in the opposite direction of government bond yields, until the past month or so. The Federal Reserve has been watching the collapse of inflation expectations, which follow oil prices. Since October 1, the expected inflation rate (change in the US Consumer Price Index) during the next five years has fallen from around 2.1% to 1.5%, as the so-called breakeven inflation rate implied by Treasury bond yields fell in lockstep with oil prices. Most analysts have tended to dismiss the collapse in inflation expectations as a one-off event due to a drop in the oil price. But what if the drop in the oil price is not the result of supply and demand imbalances, but reflects a tightening of credit conditions leading to deflation? It’s not a good sign when the S&P 500 and the price of oil trade together tick for tick. A measure of credit tightness in the banking system is the spread between LIBOR, the rate at which banks lend to each other, and the rate at which the government lends to banks. Since the beginning of October, this spread has widened from about 0.16% to 0.4%. That’s a small increment, but it reflects rationing of lending among the major banks. As the chart shows, the decline in the price of oil and the fall in the broad US equity market both track this gauge of credit tightness. It’s a fair surmise that the oil price collapse occurred in large part because banks pulled credit lines on customers stockpiling oil and forced them to liquidate inventories into the open market.
Trump’s Gentrification Scheme to Enrich Real Estate Developers - Buried within the more than 500 pages of Donald Trump’s 2017 tax cut was an unobtrusive line item with potentially damaging consequences. Proposed by Senator Tim Scott of South Carolina, the provision allows governors to select certain census tracts in their states, in economically distressed areas, as “opportunity zones.” The Treasury certified the last of these zones in June, bringing the total number to 8,700. Now, investors who fund projects in these areas will get sizable tax breaks—even on unrelated investments. As long as they dump profits into a fund earmarked for the opportunity zones, they can defer or even eliminate the capital gains they would otherwise have owed. Some of the census tracts that have been identified as opportunity zones may be truly distressed. But it’s dubious whether others should qualify—this summer, for example, much of Long Island City in New York was named an opportunity zone. Now that Amazon has announced it’s moving one of its two HQ2 branches there, the retail behemoth couldnab a $225 million tax break simply because the site happens to fall in one such zone—this, on top of the $1.7 billion New York has already offered Amazon. Investors who purchase apartment buildings for the influx of tech employees will also see tax breaks. So will anyone building office parks, or grocery stores. That money may well be better spent elsewhere, but during the debate over the tax bill, such questions received very little attention. Neither, really, did the zones themselves. Since its passage, though, President Donald Trump has enthusiastically promoted the plan, issuing press releases boasting that “new investment will flow into blighted developments, stalled infrastructure projects, and other desperately needed economic enhancements” and create fiscal improvements that will “help turn dreams to reality.” Trump promised to spend $1.5 trillion on the country’s infrastructure, but when the details of his plan were released a month before the election, it was merely a proposal to privatize roads, bridges, and waterways. Trump has similar plans for the nation’s air traffic control system, the Department of Veterans Affairs, and even the Postal Service. Each one offers huge upsides for a select group of financiers and business owners, but does little to nothing for the American people.
Freddie Mac executes first non-LIHTC deal since crisis - Freddie Mac issued its first non-low-income housing tax credit forward commitment since the financial crisis, providing financing for an affordable housing development in Minnesota. Mortgage banking firm Merchants Capital obtained the financing from the government-sponsored enterprise on behalf of Real Estate Equities for the development of a $19.7 million mixed-income workforce housing community in Rochester, Minn. The Greater Minnesota Housing Fund is also a partner in the project. With Rochester ranked among the lowest metropolitan statistical areas for housing affordability, according to a Nationwide Economics report, the 164-unit complex, known as Technology Park Apartments, will help ease the city's low-income rental crisis. The project closed on Sept. 5, according to Merchants Capital. Freddie's commitment was for a 10-year loan with the interest rate locked at the closing of the construction loan. The apartments will be priced in an affordable range for consumers with an annual income of $40,000, or 60% of the city's annual median income. Freddie Mac recently made its first post-crisis equity investment into an LIHTC thorough a partnership with Enterprise Community Investment in October.
Regulators urged to hold hearing on proposed appraisal relief - Community banking FDIC OCC Federal Reserve Appraisal Institute WASHINGTON — Sixteen appraisal organizations have called on the federal bank regulators to hold a public meeting on a proposal to reduce the scope of residential real estate transactions that require an appraisal. In November, the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency proposed raising the threshold on transactions requiring a lender to arrange for an outside appraisal from $250,000 to $400,000. But appraisers have argued that that change could thin their ranks and result in less reliable valuations. Appraisal industry groups — including the American Society of Appraisers, the Appraisal Institute and the American Society of Farm Managers and Rural Appraisers — sent a recent letter to the bank regulatory agencies requesting a hearing to understand the reason behind the proposed increase. The groups announced the letter Thursday. “We feel strongly that a hearing is not only appropriate but necessary for the agencies to have as complete a record as possible upon which to base their decision on regarding this proposal,” Robert Morrison, the international president for the American Society of Appraisers, said in a statement. In releasing their proposal, the agencies had claimed it would make appraisal requirements less burdensome without threatening the safety and soundness of financial institutions. If adopted, the proposal would require lenders involved in residential real estate sales under $400,000 to obtain an evaluation “consistent with safe and sound banking practices” instead of an appraisal. Evaluations, which are less costly than appraisals, have been mandatory for real estate sales exempted from the appraisal requirement since the 1990s.
Fannie Mae delinquencies drop but government shutdown bodes change - Fannie Mae's overall single-family serious delinquency rate dropped another notch in November, according to its most recent report, but the current government shutdown raises questions about whether that trend will continue. The rate at which all single-family loans went unpaid for 90 days or more fell to 0.76% from 1.12% a year ago. Fannie's serious delinquency rate for single-family loans was 0.79% in October. However, the rate of serious delinquencies in loans originated between 2009 and 2018 remained the same at 0.33%. Mortgages originated during this span of time represent 92% of Fannie's outstanding book of business. The serious delinquency rate for loans originated during the housing boom-and-bust cycle between 2005 and 2008 dropped to 4.5% from 6.26% a year ago. The serious delinquency rate for this vintage in October was 4.82%. These loans make up 5% of Fannie's current book of business. Loans originated in 2004 or earlier had a 2.62% serious delinquency rate in November, down from 3.05% a year ago and 2.73% in October. These loans make up the remaining 3% of Fannie's book of business. Single-family loan performance at Fannie could potentially deteriorate going forward, depending on the length of the government shutdown and the effect it has on the broader mortgage market. While Fannie continues to operate during government shutdowns because of its status as a quasi-governmental agency, the situation can affect a borrower's ability to make scheduled payments. Affected borrowers can be offered forbearance under Fannie's policies, the government-sponsored enterprise noted in a letter to lenders. The shutdown may affect borrowers' ability to pay or close a loan if, for example, they are employed by the federal government, and their employment is impacted, Fannie noted. During a shutdown, lenders may have trouble obtaining certain employment or income verifications needed for loan closing, which Fannie offers workarounds for.
Challenges mount for mortgage lenders as shutdown persists — Although the partial government shutdown has not yet been long enough to significantly hamper the mortgage market, lenders and borrowers may already be feeling the strain.The Federal Housing Administration has continued to process government-backed loans during the shutdown, but with the mortgage insurance agency operating with just a fraction of its work force, industry watchers expect a backlog in FHA endorsements that could extend beyond when the government reopens.And while the FHA is endorsing loans, it has halted assisting financial institutions in underwriting them. This may not affect larger lenders that use the agency's automated underwriting system, but smaller institutions may temporarily need to adjust their underwriting process or wait for the FHA to be back at full speed.Meanwhile, the processing of both government-insured and conventional loans is likely being affected by reduced operations at the Internal Revenue Service. Some lenders may be wary of closing loans without IRS documentation known as Form 4506-T, which provides official income verification and tax return transcripts. The form is unavailable with the government partially closed. “It makes lending more difficult, especially in light of we are in the post-bubble-crash era where the income documentation is more thoroughly reviewed,” said Lawrence Yun, the chief economist at the National Association of Realtors. The FHA is under the umbrella of the Department of Housing and Urban Development, one of nine cabinet-level agencies currently without funding. Official details on how the shutdown, which began Dec. 22, has affected the housing market are unavailable. But HUD has warned of an increasingly negative impact on homebuyers and the market as a whole with each day that the shutdown continues. “A protracted shutdown could see a decline in home sales, reversing the trend toward a strengthening market that we’ve been experiencing,” the department wrote in its contingency plan for a possible lapse in appropriations for 2018. In HUD's Office of Housing, which includes FHA, there are 2,386 employees. Yet only 103 employees of those employees are working during the shutdown, and up to 300 employees on any given day can be called to work on projects that are exempted from the shutdown on an intermittent basis.
Servicers treating government shutdown like a natural disaster - As the government shutdown enters its third week, mortgage servicers are activating the response plans they normally use during hurricanes and wildfires to assist federal workers who may have trouble paying their mortgages. On Jan. 4, the president said he's prepared to keep the shutdown going for "months or even years." With that kind of ambiguity surrounding Washington, federal employees need fallbacks for their mortgages. During the shutdown in 2013, the FHA, Fannie Mae and Freddie Mac all called for temporary postponement on mortgage payments for furloughed workers. Lenders are offering paycheck loan assistance programs this time around. Credit unions like Navy Federal and PenFed, are providing 0% APR loans for impacted members who have established direct deposit accounts with them. "Our members deserve peace of mind during a government shutdown, and eligible members can register to get some relief," Tynika Wilson, Navy Federal senior vice president of debit card and fund services, said in a press release. Mortgage servicers offer forbearance to bridge the gap. "LoanCare is working with customers who have been impacted by the federal government shutdown, which may include normal forbearance or other relief," Tim O'Bryant, senior vice president of customer experience at LoanCare, said in a statement to National Mortgage News. "Mortgage servicers can offer assistance, such as forbearance, to customers who are struggling to make their mortgage payment. Federal government employees who will experience difficulty paying their mortgage due to delays in receiving a paycheck should contact their mortgage servicer to discuss assistance options," Ruth Green, the chief operating officer of Primary Residential Mortgage, said in a statement to NMN.
Single-family rental loans lack uniform credit standards: Freddie Mac -- Single-family rental loans lack consistent credit standards, and the secondary market opportunities for them are limited, Freddie Mac found in a preliminary test of expanded government-sponsored enterprise involvement in the sector.“The single-family rental market is an important segment of the housing market and the data reveal it to be an affordable housing option for many American families,” said Steve Guggenmos, vice president of multifamily research and modeling, in a press release. “Much of the SFR market is primarily driven by small investors, and there is not a uniform set of terms and credit standards for loans on SFRs." The Federal Housing Finance Agency halted GSE pilots testing the expansion of their roles in SFR earlier this year, calling such a move "premature" without "significantly more extensive research and analysis."Single-family housing stock now represents more than half of the rental market overall, and two thirds of the market in rural areas, according to Freddie Mac.Most single-family homes remain owner-occupied, but a recent study of sales on two online real estate platforms suggests the share purchased by institutional investors that rent out homes is growing.
CoreLogic: House Prices up 5.1% Year-over-year in November --Notes: This CoreLogic House Price Index report is a three month weighted average and is not seasonally adjusted (NSA). From CoreLogic: CoreLogic Reports November Home Prices Increased by 5.1 Percent Year Over YearCoreLogic® ... today released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for November 2018, which shows home prices rose both year over year and month over month.Home prices increased nationally by 5.1 percent year over year from November 2017. On a month-over-month basis, prices increased by 0.4 percent in November 2018. (October 2018 data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results each month.)Looking ahead, the CoreLogic HPI Forecast indicates home prices will increase by 4.8 percent on a year-over-year basis from November 2018 to November 2019. On a month-over-month basis, home prices are expected to decrease by 0.8 percent from November to December 2018. The CoreLogic HPI Forecast is a projection of home prices calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.“The rise in mortgage rates has dampened buyer demand and slowed home-price growth,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Interest rates for new 30-year fixed-rate loans averaged 4.9 percent during November, the highest monthly average since February 2011. These higher rates and home prices have reduced buyer affordability. Home sellers are responding by lowering their asking price, which is reflected in the slowing growth of the CoreLogic Home Price Index.” CR Note: The CoreLogic YoY increase has been in the 5% to 7% range for the last few years. This is near the bottom of that range - and slowing. The year-over-year comparison has been positive for almost seven consecutive years since turning positive year-over-year in February 2012.
U.S. construction spending report has been postponed - U.S. construction spending report has been postponed. The November report (a Census Bureau release) originally slated for Thursday, has been put on hold due to the government shutdown. This joins last week's postponement of the November new home sales and Advance indicators releases. The ADP, ISM, and vehicle sales reports are private, and hence not affected by the shutdown. Neither is the nonfarm payroll report, which is released by the BLS, as the Labor Department has been funded.
Reis: Office Vacancy Rate unchanged in Q4 at 16.7% -- Reis reported that the office vacancy rate was at 16.7% in Q4, unchanged from 16.7% in Q3 2018. This is up from 16.4% in Q4 2017, and down from the cycle peak of 17.6%. From Reis Economist Barbara Denham: The office vacancy rate was flat in the quarter at 16.7%. At year-end 2017 it was 16.4%, while at year-end 2016 it was 16.3%. Both the national average asking rent and effective rent, which nets out landlord concessions, increased 0.7% in the fourth quarter. At $33.43 per square foot (asking) and $27.13 per square foot (effective), the average rents have increased 2.6% and 2.7%, respectively, from the fourth quarter of 2017, barely above the rate of inflation: 2.5%. Following three quarters of decelerating occupancy growth, net absorption rose to 7.3 million square feet. The fourth quarter tends to see the highest activity in both office completions and leasing; one year ago, net absorption was 7.6 million square feet, higher than the previous quarters of that year. For construction, office inventory expanded by 10.4 million square feet in the fourth quarter, above the previous quarter’s 8.9 million square feet but below the three prior quarters’ average of 11.9 million square feet. Completions will be higher in 2019 – close to 50 million square feet including 6.7 million square feet in Hudson Yards alone – while office employment is expected to decelerate. This should push vacancy rates up a bit, but rent growth should remain positive and in line with recent growth rates. This graph shows the office vacancy rate starting in 1980 (prior to 1999 the data is annual).Reis reported the vacancy rate was at 16.7% in Q4. The office vacancy rate had been mostly moving sideways at an elevated level, but has increased slightly recently..
As a grocery chain is dismantled, investors recover their money. Worker pensions are short millions.- WaPo — Once the Marsh Supermarkets chain began to falter a few years ago, its owner, a private-equity firm, began selling off the vast retail empire, piece by piece. The company sold more than 100 convenience stores. It sold the pharmacies. It closed some of the 115 grocery stores, having previously auctioned off their real estate. Then, in May 2017, the company announced the closure of the remaining 44 stores. Marsh Supermarkets, founded in 1931, had at last filed for bankruptcy. “It was a long, slow decline,” said Amy Gerken, formerly an assistant office manager at one of the stores. Sun Capital Partners, the private-equity firm that owned Marsh, “didn’t really know how grocery stores work. We’d joke about them being on a yacht without even knowing what a UPC code is. But they didn’t treat employees right, and since the bankruptcy, everyone is out for their blood.” The anger arises because although the sell-off allowed Sun Capital and its investors to recover their money and then some, the company entered bankruptcy leaving unpaid more than $80 million in debts to workers’ severance and pensions. For Sun Capital, this process of buying companies, seeking profits and leaving pensions unpaid is a familiar one. Over the past 10 years, it has taken five companies into bankruptcy while leaving behind debts of about $280 million owed to employee pensions. The unpaid pension debts mean that some retirees will get smaller checks. Much of the tab will be picked up by the government’s pension insurer, a federal agency facing its own budget shortfalls. “They did everyone dirty,” said Kilby Baker, 70, a retired warehouse worker whose pension check was cut by about 25 percent after Marsh Supermarkets withdrew from the pension. “We all gave up wage increases so we could have a better pension. Then they just took it away from us.”
The lies Comcast allegedly told customers to hide full cost of service --A new lawsuit filed against Comcast details an extensive list of lies the cable company allegedly told customers in order to hide the full cost of service. Minnesota Attorney General Lori Swanson sued Comcast in Hennepin County District Court on December 21, seeking refunds for all customers who were harmed by Comcast's alleged violations of the state's Prevention of Consumer Fraud Act and Uniform Deceptive Trade Practices Act. The complaint alleges, among other things, that Comcast reps falsely told customers that the company's "Regional Sports Network (RSN)" and "Broadcast TV" fees were mandated by the government and not controlled by Comcast itself. These two fees, which are not included in Comcast's advertised rates, have gone up steadily and now total $18.25 a month. Comcast has responded to some lawsuits—including this one—by saying that the company had already stopped the practices that triggered the court actions. But Minnesota says that Comcast's lies about the sports and broadcast fees continued into 2017, which is after Comcast knew about identical allegations raised in a separate class action complaint filed in 2016. (That case was settled out of court.)
The Weather Channel app sued over claims it sold location data - The Los Angeles City Attorney’s office issued a cloudy forecast with the possibility of civil penalties for the popular Weather Channel app Friday, claiming it repeatedly violated the privacy of consumers. In a civil lawsuit filed in Los Angeles Superior Court, city prosecutors allege that The Weather Channel app led users to believe that it would use location data to provide them with “personalized local weather data, alerts and forecasts” but instead transmitted that data to third parties. The 15-page suit seeks to stop TWC Product and Technology LLC, a subsidiary of IBM, from using consumers' information and seeks civil penalties up to $2,500 for each violation by the company. Prosecutors allege that the firm profited from that data for purposes entirely unrelated to weather or the app.
California Becomes 1st State to Ban Retail Sale of Dogs, Cats, Rabbits - Retail pet stores in California will only be able to sell kittens, rabbits, and puppies if they come from a rescue organization after a new state law goes into effect Tuesday. With AB 485, California became the first state to implement such strict new rules on pet stores. Retailers are banned from selling live dogs, cats or rabbits unless the animal was obtained from a public animal control agency or shelter, humane society group, society for the prevention of cruelty to animals shelter or a rescue group that’s in a cooperative agreement with at least one private or public shelter. Suna and Mitch Kentdotson were visiting the SD Humane Society to adopt a new kitten on Friday. They said they'd like to see the state restrict neglectful breeders from profiting off the sale of puppies and kittens. “I think it’s better to rescue these animals instead of having like a puppy mill or something like that where these animals are raised super inhumanely," Suna Kentdotson said. “It takes the emphasis off the profit of animals and puts the emphasis back on caring for and getting these cats and dogs a good home," Mitch Kentdotson said. San Diego County has a few retail pet stores left, including Broadway Puppies in Escondido, which has a sister store in National City. According to the company’s website, they only use responsible licensed breeders. Come Tuesday, they'll only be able to sell pets from shelters. The Humane Society said it hasn't been contacted by any local retail pet stores inquiring about the purchase of its animals. But even if they do contact the group, the Humane Society isn't sure it would partner with the stores.
Overflowing With Excess Inventory, US Companies Turn To Truck Trailers -- While on the surface the latest Q3 GDP print of 3.4% was impressive, one quick look at its components revealed that the bulk of GDP growth came from inventories, which at 2.33% of the total number - the highest since Q4 2011, accounted for 69% of the annualized growth rate; in fact, stripping away the inventory contribution resulted in a concerningly low 1.1% GDP print, the lowest since Q4 2016. As a result of this unprecedented buildup, the WSJ reports that U.S. companies are so flooded with excess inventory that some are renting truck trailers to use for storage space, parking them on warehouse lots or behind storefronts to hold goods until a surge in imports is cleared from crowded distribution hubs. And in order to accommodate more customers seeking trailers to hold goods, many of them pulled in from China during 2018 to get ahead of impending tariffs, transportation equipment lessor Milestone Equipment Holdings has launched a “mobile warehousing and storage” business year, with companies such as Home Depot and several other major retailers and manufacturers reportedly using the service. “It’s like a warehouse on wheels,” said Sarah Johnson, who heads the new mobile storage business at Milestone. “We now think about our trailers as more of a real-estate alternative than just a trailer.”While the inventory surge in the last few months of the year is nothing new, as that's when warehouse space is often eaten up as retailers stock up for the holiday season, the strains emerged this year as many companies boosted their reserves of imports to get ahead of a rise in tariffs, originally expected on Jan. 1 but later postponed to April. Meanwhile, as virtually every US retailer is scrambling to compete with Amazon on delivery, warehouses have become a hot commodity, and across the U.S., warehouse vacancy currently stands at 4.3%, the lowest rate that real-estate firm CBRE has recorded since it started tracking the figure in 1980. “Warehouses are running as full as they ever have,” said David Egan, head of industrial and logistics research for CBRE. Many companies build in flex space to their operations, in order to have room to expand during busier months, Mr. Egan said. “Now you’re seeing that excess space—and then some—is all being used,” he said.
AAR: December Rail Carloads up 2.9% YoY, Intermodal Up 5.0% YoY - From the Association of American Railroads (AAR) Rail Time Indicators. U.S. freight rail traffic in December and the full year 2018 was mixed, but for the most part was positive. Intermodal finished the year strong, rising 5.0% in December 2018. The first and second weeks of December (weeks 49 and 50 of the year) were the two highest-volume intermodal months in history, exceeding 300,000 units in a single week for the first time.Intermodal set a new annual record in 2018: total volume was 14.47 million containers and trailers, up 5.5%, or 751,217 units, over 2017. Total carloads, meanwhile, rose 2.9% in December 2018 over December 2017, their 9th year-over-year increase in 2018. For the full year, total carloads were up 1.8%, or 238,857 carloads. This graph from the Rail Time Indicators report shows U.S. average weekly rail carloads (NSA). Light blue is 2018. Rail carloads have been weak over the last decade due to the decline in coal shipments. U.S. railroads (excluding the U.S. operations of Canadian railroads) originated 1.022 million carloads in December 2018, up 2.9%, or 29,139 carloads, over December 2017. December was the ninth yearover- year monthly increase for total carloads in 2018 and reversed a slight decline in November. Total carloads averaged 255,495 per week in December 2018, the most for December since 2014. The second graph is for intermodal traffic (using intermodal or shipping containers): U.S. railroads originated 1.10 million containers and trailers in December 2018, up 5.0% over December 2017. Weekly average intermodal volume in December 2018 was 274,029, easily the highest weekly average for December for intermodal in history. In fact, the first and second weeks of December 2018 (weeks 49 and 50 of the year) were the highest volume intermodal weeks in history for U.S. railroads, regardless of month, with 303,225 and 301,407 intermodal units originated, respectively. That’s the first time ever that intermodal originations exceeded 300,000 in a single week. So much for intermodal peaking in September or October. The top 10 intermodal weeks in history were all in 2018, as were nine of the top ten intermodal months 2018 was another record year for intermodal traffic.
PMI Manufacturing Index - Highlights: Report after report are pointing to tangible easing in manufacturing activity and optimism at year-end, the likely result of falling oil prices but also tough comparisons with prior strength. The manufacturing PMI ended December at a 15-month low of 53.8 vs a mid-month reading of 53.9 and 55.3 for the month of November. December employment for the PMI sample was the softest in 18 months with both production as well as overall optimism at 15-month lows. The easing is reflected in inflation pressures as growth in input costs was the softest in 11 months and traction in selling prices the softest of 2018. But there is some good news in orders as backlogs continue to rise which is a positive indication for future employment. And though growth in new orders was the weakest in 16 months, export orders rose to their best level in 12 months. This report as well as a run of regional data from Richmond, Kansas City and especially Dallas all point to trouble for December as the manufacturing sector appears to have ended a very strong year on a very soft note.
ISM Manufacturing index Decreased Sharply to 54.1 in December -- The ISM manufacturing index indicated expansion in December. The PMI was at 54.1% in December, down from 59.3% in November. The employment index was at 56.2%, down from 58.4% last month, and the new orders index was at 51.1%, down from 62.1%. From the Institute for Supply Management: December 2018 Manufacturing ISM® Report On Business®: “The December PMI® registered 54.1 percent, a decrease of 5.2 percentage points from the November reading of 59.3 percent. The New Orders Index registered 51.1 percent, a decrease of 11 percentage points from the November reading of 62.1 percent. The Production Index registered 54.3 percent, 6.3-percentage point decrease compared to the November reading of 60.6 percent. The Employment Index registered 56.2 percent, a decrease of 2.2 percentage points from the November reading of 58.4 percent. The Supplier Deliveries Index registered 57.5 percent, a 5-percentage point decrease from the November reading of 62.5 percent. The Inventories Index registered 51.2 percent, a decrease of 1.7 percentage points from the November reading of 52.9 percent. The Prices Index registered 54.9 percent, a 5.8-percentage point decrease from the November reading of 60.7 percent, indicating higher raw materials prices for the 34th consecutive month. Here is a long term graph of the ISM manufacturing index. This was well below expectations of 58.0%, and suggests manufacturing expanded at a slower pace in December than in November.
December ISM manufacturing points to sharp slowdown -- To breifly recap, my long leading indicators turned neutral 7 months ago and haven't improved since, even going negative for a few weeks. As a byproduct of that, I have been waitiing on short leading indicators to decelerate as well, which they have shown strong signs of doing recently. As part of that, two months ago I wrote that "I expect slowing [in the ISM new orders index] to continue." Today the ISM reported for December that: Manufacturing expanded in December, as the PMI® registered 54.1 percent, a decrease of 5.2 percentage points from the November reading of 59.3 percent. “This indicates growth in manufacturing for the 28th consecutive month. The PMI®recorded a substantial softening in December and retreated to a level not seen since November 2016, when it registered 53.4 percent,” says Fiore. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. I have been using an average of the five regional Fed new orders indexes to forecast the direction of the ISM indicator. Here's a comparison of the regional Fed averages (left) and ISM new orders (right) for all of 2018: October's 57.4 ISM reading, while very positive, was nevertheless the lowest since November 2016. Today's reading is not just below that, but also October 2016's reading of 52.1. Here's the longer-term graph (not including this morning) from Briefing.com: The sharp decelerating trend in the Fed new orders indexes since May's high is apparent. Now the ISM has confirmed the deceleration in spades. I suspect this reflects both the feeding through of the weakness in the long leading indicators, and also the nearly immediate impact of Trump's trade war policies. In other words, poor Administration economic policy may have taken a slowdown that was likely to happen in a few months, and moved it forward. The silver lining is that a slowdown, however sharp and however much "baked in the cake" at this point, is not a recession.
December Markit Manufacturing PMI: 15-Month Low - The December US Manufacturing Purchasing Managers' Index conducted by Markit came in at 53.8, down 1.5 from the 55.3 final November figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction. Here is an excerpt from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release: "Manufacturers reported a weakened pace of expansion at the end of 2018, and grew less upbeat about prospects for 2019. Output and order books grew at the slowest rates for over a year and optimism about the outlook slumped to its gloomiest for over two years. The month rounds of a fourth quarter in which manufacturing production is indicated to have risen at only a modest annualised rate of about 1%." [Press Release] Here is a snapshot of the series since mid-2012. Here is an overlay with the equivalent PMI survey conducted by the Institute for Supply Management (see our full article on this series here, note that ). The next chart uses a three-month moving average of the two rather volatile series to facilitate our understanding of the current trend.
Dallas Fed: "Texas Manufacturing Expands Modestly, Outlook Worsens" --From the Dallas Fed: Texas Manufacturing Expands Modestly, Outlook WorsensTexas factory activity continued to expand rather modestly in December, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, inched down one point to 7.3.Other indexes of manufacturing activity also suggested modest growth in December, although demand growth picked up a bit. The capacity utilization index fell from 9.4 to 7.6, and the shipments index dipped to 6.1. Meanwhile, the new orders index moved up five points to 14.4, and the growth rate of new orders index edged up to 5.8. Perceptions of broader business conditions turned slightly negative in December. The general business activity index plummeted 23 points to -5.1, hitting its lowest level since mid-2016. The company outlook index also fell markedly, dropping 17 points to -3.4, also a two-and-a-half-year low. More than 20 percent of manufacturers noted their outlook worsened this month. Labor market measures suggested continued but slightly slower employment growth and longer workweeks in December. The employment index retreated five points to 11.0, a level still above average. This was the last of the regional Fed surveys for December. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
November 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 and “is undergoing a process of data and methodology revision. 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 December is 12.6, down from the previous month's 19.9. It is below its all-time high of 25.1, set in May 2004.
Weekly Initial Unemployment Claims increased to 231,000 - The DOL reported: In the week ending December 29, the advance figure for seasonally adjusted initial claims was 231,000, an increase of 10,000 from the previous week's revised level. The previous week's level was revised up by 5,000 from 216,000 to 221,000. The 4-week moving average was 218,750, a decrease of 500 from the previous week's revised average. The previous week's average was revised up by 1,250 from 218,000 to 219,250. The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.
ADP: Private Employment increased 271,000 in December -- From ADP: Private sector employment increased by 271,000 jobs from November to December according to the December 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. “We wrapped up 2018 with another month of significant growth in the labor market,“ said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Although there were increases in most sectors, the busy holiday season greatly impacted both trade and leisure and hospitality. Small businesses also experienced their strongest month of job growth all year.” Mark Zandi, chief economist of Moody’s Analytics, said, “Businesses continue to add aggressively to their payrolls despite the stock market slump and the trade war. Favorable December weather also helped lift the job market. At the current pace of job growth, low unemployment will get even lower.” This was well above the consensus forecast for 175,000 private sector jobs added in the ADP report. The BLS report for December will be released Friday, and the consensus is for 180,000 non-farm payroll jobs added in November.
First Look at December: ADP Says 271K New Nonfarm Private Jobs - Today we have the ADP December estimate of 271K new nonfarm private employment jobs, an increase over the ADP revised November figure of 157K. The 271K estimate came in above the Investing.com consensus of 179K for the ADP number.The Investing.com forecast for the forthcoming BLS report is for 175K new nonfarm private jobs and the unemployment rate to remain at 3.7%. Their forecast for the December full nonfarm new jobs is (the PAYEMS number) 177K.Here is an excerpt from today's ADP report press release:“We wrapped up 2018 with another month of significant growth in the labor market,“ said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Although there were increases in most sectors, the busy holiday season greatly impacted both trade and leisure and hospitality. Small businesses also experienced their strongest month of job growth all year.” Mark Zandi, chief economist of Moody’s Analytics, said, “Businesses continue to add aggressively to their payrolls despite the stock market slump and the trade war. Favorable December weather also helped lift the job market. At the current pace of job growth, low unemployment will get even lower.” 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 December estimate of 271K new nonfarm private employment jobs from ADP, an increase over November's revised 157K. The popular spin on this indicator is as a preview to the monthly jobs report from the Bureau of Labor Statistics. But the ADP report includes a wealth of information that's worth exploring in more detail. Here is a snapshot of the monthly change in the ADP headline number since the company's earliest published data in April 2002. This is quite a volatile series, so we've plotted the monthly data points as dots along with a six-month moving average, which gives us a clearer sense of the trend. As we see in the chart above, the trend peaked 20 months before the last recession and went negative around the time that the NBER subsequently declared as the recession start. At present, the six-month moving average has been hovering in a relatively narrow range around 200K new jobs since around the middle of 2011. ADP also gives us a breakdown of Total Nonfarm Private Employment into two categories: Goods Producing and Services. Here is the same chart style illustrating the two. The US is predominantly a services economy, so it comes as no surprise that Services employment has shown stronger jobs growth. The trend in Goods Producing jobs went negative over a year before the last recession. Interestingly, the Goods Producing jobs saw an uptick in late 2016 that has continued. For a sense of the relative size of Services over Goods Producing employment, the next chart shows the percentage of Services Jobs across the entire series. The latest data point is just fractionally below the record high. There are a number of factors behind this trend. In addition to our increasing dependence of Services, Goods Production employment continues to be impacted by automation and offshoring. The percentage in the chart above began decreasing in early 2015 with no true bounceback since.For a better sense of the components of the two Goods Producing and Service Providing cohorts, here is a snapshot of the five select industries tracked by ADP. The two things to note here are the relative sizes of the industries and the relative trends. Note that Construction and Manufacturing are Production industries whereas the other three are Service Providing. Another view of the relative trends of the five select industries is an overlay of the year-over-year comparison.For a longer-term perspective on the Goods Producing and Service Providing employment, see our monthly analysis, Secular Trends in Employment: Goods Producing Versus Services Providing, which is based on data from the Department of Labor's monthly jobs report reaching back to 1939.
Economy adds robust 312K jobs in December, well above expectations The U.S. economy added robust 312,000 jobs well above expectations in December as the labor market continues to expand even as worries grow about an economic slowdown and turbulent stock markets. The unemployment rate ticked up to 3.9 percent from 3.7 percent, the Labor Department reported on Friday. Economists had expected about 182,000 jobs to be added last month. Jobs growth should ease some fears about a broader economic slowdown. Employment gains in October and November combined were 58,000 more than previously reported. The economy has added jobs for 98 straight months, beginning in October 2010 under former President Obama. It is the longest streak of monthly jobs growth on record. President Trump's strategy to hit China with billions of tariffs to coax them to change their bad trade behavior has been rattling markets even as the president says the world' two largest economies try to hash out an agreement. Trump told reporters Wednesday that there was a "glitch" in the stock market in December but he expects a recovery as his administration completes trade deals with China and other allies. "It's going to go up once we settle trade issues and a couple of other things happen," Trump said. "It's got a long way to go." The Dow Jones industrial average plunged on Thursday as Apple slashed its earnings forecast. The S&P 500 posted its worst performance since 1931, falling more than 9 percent. The Dow average fell 5.6 percent while the Nasdaq composite plunged 12.2 percent. The broader stock index had its worst annual showing since 2008 — when it plunged more than 38 percent during the financial crisis.
December Employment Report: 312,000 Jobs Added, 3.9% Unemployment Rate - From the BLS: Total nonfarm payroll employment increased by 312,000 in December, and the unemployment rate rose to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, food services and drinking places, construction, manufacturing, and retail trade. The change in total nonfarm payroll employment for November was revised up from +155,000 to +176,000, and the change for October was revised up from +237,000 to +274,000. With these revisions, employment gains in October and November combined were 58,000 more than previously reported. In December, average hourly earnings for all employees on private nonfarm payrolls rose 11 cents to $27.48. Over the year, average hourly earnings have increased by 84 cents, or 3.2 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 312 thousand in December (private payrolls increased 301 thousand).Payrolls for October and November were revised up 58 thousand combined. This graph shows the year-over-year change in total non-farm employment since 1968.In December the year-over-year change was 2.638 million jobs. The third graph shows the employment population ratio and the participation rate. The Labor Force Participation Rate increased in December to 63.1%. 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 was unchanged at 60.6% (black line).. The fourth graph shows the unemployment rate.The unemployment rate increased in December to 3.9%. This was well above the consensus expectations of 180,000 jobs added, and October and November were revised up 58,000, combined. A strong report.
December jobs report: 2018 goes out with a bang - HEADLINES:
- +312,000 jobs added
- U3 unemployment rate rose +0.2% from 3.7% to 3.9%
- U6 underemployment rate unchanged at 7.6%
- Not in Labor Force, but Want a Job Now: declined -70,000 from 5.397 million to 5.327 million
- Part time for economic reasons: declined - 124,000 from 4.781 million to 4.657 million
- Employment/population ratio ages 25-54: unchanged at 79.7%
- Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $.09 from $22.95 to $23.05, up +3.4% 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 +24.000/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 rose +600 for an average of +175/month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month
- the average manufacturing workweek rose +0.1 hours from 40.8 hours to 40.9 hours. This is one of the 10 components of the LEI.
- construction jobs rose by +32,000. YoY construction jobs are up +284,000.
- temporary jobs rose by +10,300. The strong YoY trend remains intact.
- the number of people unemployed for 5 weeks or less fell by -2,000 from 2,128,000 to 2,126,000. The post-recession low was set seven months ago at 2,034,000.
- Overtime rose +0.1 hour from 3.5 hours to 3.6 hours.
- Professional and business employment (generally higher-paying jobs) increased by +43,000 and is up +583,000 YoY.
- the index of aggregate hours worked for non-managerial workers rose by 0.3%.
- the index of aggregate payrolls for non-managerial workers rose by 0.7%.
SUMMARY: This was a blockbuster report. About the only negative is the increase in the headline unemployment rate, which may be an artifact of the year-end household survey rebalancing (rather than revise each of the last 12 months, they simply add the revisions into the January number). Everything else, including the leading portions of the report, was positive to strongly positive. At first glance, the gains look widespread, but I'll update if necessary once I am able to take a longer look. The gains to ordinary workers nominal wages are particularly welcome. Needless to say, this report is in stark contrast to what many of the leading indicators are telling us. Since employment and production are the Queen and King of coincident indicators, respectively, I think workers will need to enjoy this while it lasts. Now would be a good time to start preparing for the downshift in trend that I think is inevitable at this point.
Jobs Blowout- December Payrolls Soar By 312K As Wages Jump Most Since 2009 - In our preview of the December payrolls report, we said that the big risk is a big upside surprise in the form of "good news being bad news", and sure enough, and that's precisely what happened when the BLS reported that in December the US added a whopping 312K jobs, far above the 184K expected, and the highest since February 2018. The total number of payrolls surged above 150 million for the first time ever, to 150.263 million to be specific. Meanwhile, November's print was revised up from +155,000 to +176,000, and the change for October was revised up from +237,000 to +274,000. With these revisions, employment gains in October and November combined were 58,000 more than previously reported. After revisions, job gains have averaged 254,000 per month over the last 3 months.In case there was any confusion, this was a blowout number, as Bloomberg economist Tim Mahedy writes:This is the strongest employment report of this economic cycle -- hands down. While we've seen greater job gains in some months, the plus-300,000 number along with another increase in average hourly earnings clearly signals that the economic expansion ended 2018 on strong footing. Perhaps most surprising was the two-tenths rise in the unemployment rate due to an increase in participation. It's one month of data, but talk of the Fed cutting rates in the near future should be off the table for now.Putting the number in context, this was the biggest beat since June 2016... which may not be such a good thing as the last 2 big beats both saw a big plunge the next month. Some more details from the report:
- Payroll employment rose by 2.6 million in 2018, compared with a gain of 2.2 million in 2017.
- Employment in health care rose by 50,000 in December. Within the industry, job gains occurred in ambulatory health care services (+38,000) and hospitals (+7,000). Health care added 346,000 jobs in 2018, more than the gain of 284,000 jobs in 2017.
- In December, employment in food services and drinking places increased by 41,000. Over the year, the industry added 235,000 jobs, similar to the increase in 2017 (+261,000).
- Construction employment rose by 38,000 in December, with job gains in heavy and civil engineering construction (+16,000) and nonresidential specialty trade construction (+16,000). The construction industry added 280,000 jobs in 2018, compared with an increase of 250,000 in 2017.
- Manufacturing added 32,000 jobs in December. Most of the gain occurred in the durable goods component (+19,000), with job growth in fabricated metal products (+7,000) and in computer and electronic products (+4,000). Employment in the nondurable goods component also increased over the month (+13,000). Manufacturing employment increased by 284,000 over the year, with about three-fourths of the gain in durable goods industries. Manufacturing had added 207,000 jobs in 2017.
- In December, employment in retail trade rose by 24,000. Job growth occurred in general merchandise stores (+15,000) and automobile dealers (+6,000). These gains were partially offset by a job loss in sporting goods, hobby, book, and music stores (-9,000). Retail trade employment increased by 92,000 in 2018, after little net change in 2017 (-29,000).
- Over the month, employment in professional and business services continued to trend up (+43,000). The industry added 583,000 jobs in 2018, outpacing the 458,000 jobs added in 2017.
Payrolls up big as a strong jobs report caps a strong year for the US labor market - Jared Bernstein -Well, it appears that the US jobs market didn’t get the memo that a recession is just around the corner.Payrolls rose a very strong 312,000 in December, bringing the full count of jobs added for 2018 up to 2.6 million, the strongest year for job gains since 2015. Unemployment ticked up to 3.9 percent, but largely because more people were drawn into the labor market, as the participation rate ticked up two-tenths to 63.1 percent, its highest level since early 2014, and yet another reminder that the job market has more capacity to expand than many observers heretofore believed. Nominal wage growth accelerated slightly and, at 3.2 percent for all private sector workers and 3.3 percent for mid-level earners, both measures tied cyclical highs. Weekly hours edged up slightly, jobs gains for the prior two months were revised up, and a very high 70 percent of private industries added jobs on net.In other words, not only is the US labor market holding its own, it’s actually gained momentum in recent months. Moreover–and remarkably–these uniquely strong results are occurring against a backdrop of low, stable inflation, implying that the Federal Reserve could still conceivably pause in their rate-hiking campaign, accommodating job market improvements that are so essential to middle and low-wage workers.To boost the underlying signal from the jobs data, our monthly smoother takes 3, 6, and 12-month averages of the monthly job gains from the payroll data. First, note that the bars show relatively high levels of job creation at this stage in the expansion, as many economists believed monthly gains would be slowing by now as the job market neared peak capacity. But at 254,000, the average monthly gain over the past quarter has been slightly higher than the earlier trends. Tighter labor markets continue to noticeably boost wage growth, as shown in the two figures below. Nominal hourly wages were up 3.2 percent, year-over-year, for all private-sector workers, and 3.3 percent for middle-wage workers. The smoothed, 6-months moving average shows evidence of “wage-Phillips curve” awakening in 2018: low unemployment finally started to correlate with rising pay pressures. As discussed next, thanks largely to low energy prices, I expect real wage growth of over 1 percent for middle wage workers in 2018. While not a particularly high real growth rate in historical terms, it represents an important gain for working families. With today’s report, we can evaluate the 2018 job market in historical context, as in the two tables below. The first focuses on jobs and the second on wages. Annual changes are for December 2017 over December 2018; level variables are for December 2018 (all these values may undergo some revisions).
The economy has made great strides since the recession, but some weakness lingers - EPI Blog - With today’s Bureau of Labor Statistics (BLS) jobs report we can look at the entirety of 2018—putting the year as a whole in perspective and comparing 2018 with other years. Yesterday, I provided a fairly broad overview of the first 11 months of 2018 including context since the last business cycle peak before the Great Recession (2007) and the last time the U.S. economy was at full employment (2000).As the recovery has strengthened we’ve seen improvements in all measures of employment, unemployment, and wage growth. These measures tell a consistent story—an economy on its way to full employment, but not there yet. Taking a data-driven approach to policymaking would mean continuing to push to reduce slack, keeping interest rates from rising further and letting the economy recover for Americans across races, ethnicities, ages, levels of educational attainment, and areas of the country. Payroll employment growth in December was 312,000, bringing average job growth in 2018 up to 220,000. As shown in the figure below, job growth during this time period was a bit higher than in 2017. This can be attributed to the shift in federal policy from austerity to stimulus in the form of both tax cuts and a nearly $300 billion increase in government spending.In December, the unemployment rate rose to 3.9 percent, but notably for the “right” reasons as the labor force participation rate also rose 0.2 percentage points as workers returned to the labor market in search of job opportunities. Taking 2018 as a whole, the unemployment rate averaged 3.9 percent. It’s useful to compare today’s economy back to 2000, when the unemployment rate averaged 4.0 percent, and fell below 4.0 percent for five months. With a similar unemployment rate, 2000 saw no pronounced acceleration of inflation. Inflation has only recently even brushed the Fed’s target after years of being significantly below it, and a much longer spell of being on or above the target is needed. It’s safe to say that the unemployment rate can continue to fall without risking rapidly accelerating inflation. And, there’s evidence to suggest that the current unemployment rate is overstating strength in the labor market. At times with similarly low unemployment, other indicators were stronger than today. For instance, in 2000, when the unemployment rate averaged 4.0 percent, the prime-age employment to population ratio (EPOP) averaged 81.5 percent. In December 2018 the prime-age EPOP held steady at 79.7 percent. Taken over the year, the average prime-age EPOP in 2018 was 79.4 percent, more than 2 full percentage points lower than in 2000. Remember the prime-age EPOP includes only those 25–54 years old, removing any potential baby boomer retirement effect. The figure below shows the trends in prime-age EPOP since 1989. While there’s been clear improvement since the depths of the Great Recession and its aftermath, the current level remains below the immediate pre-recession peak and even further below the 2000 peak.What’s clear is that despite the low unemployment rate, there are still workers sitting on the sidelines because of residual weakness in today’s economy. But, month after month, those sidelined workers are returning to the labor force. In fact, more than 7 in 10 newly employed workers are coming from out of the labor force. These workers weren’t counted among the unemployed in the previous month but are now employed. From a historical perspective these flows into employment from out of the labor force are at record highs.
Only Old Workers Found Jobs In December - Two things stood out in the December jobs report: first, the magnitude of the monthly increase in payrolls, which at 312K was the highest in 10 months and second, the stark increase in annual wage growth.As Reuters Jeoff Hall notes, 12 of the 15 major industry sectors (4 in goods-producing, 11 in service-providing) have 12-month growth rates in avg hourly earnings that exceed the Fed's 2.0% inflation target (with exceptions being Transportation & Warehousing (+0.7%), Nondurable Gds Mfg (+0.9%), Other Services at +1.8%). However, reading between the lines reveals another somewhat unpleasant signal and may explain the impressive wage growth: the bulk of jobs in December went to aged workers, those 55 and older, who increased by 183K (according to the Household Survey). Meanwhile, the prime age group, those aged 25-54, actually declined by 11K in December. And since it was the younger age cohorts that saw virtually no job growth in December - i.e., those workers who have the least wage negotiating leverage - it explains the impressive wage growth, but it is also a potentially troubling indicator as it confirms that employers are primarily focusing on hiring those workers who already have experience, instead of permitting younger entrants to join the labor force. How does the data look on an annual basis, from December 2017 to December 2018: a little better, with the biggest age cohort, those 25-54 rising by 1.3 million, but it was once again the oldest workers, those 55 and older that have seen the bulk of job gains in the past year, confirming that younger Americans are having an increasingly harder time to find jobs when they are, well, competing with their parents, who have been unable to retire as a result of ten years of ZIRP which in turn crushed savings for an entire generation of (elderly) Americans, forcing them to stay in the job market well beyond their retirement age.
Comments on December Employment Report --The headline jobs number at 312 thousand for December was well above consensus expectations of 180 thousand, and the previous two months were revised up 58 thousand, combined. However, the unemployment rate increased to 3.9%. This was a strong report. Earlier: December Employment Report: 312,000 Jobs Added, 3.9% Unemployment RateIn December, the year-over-year employment change was 2.638 million jobs. That is solid year-over-year growth, and makes 2018 the third best year for employment growth in the current expansion (behind 2014 and 2015). Wage growth was above expectations in December. From the BLS: "In December, average hourly earnings for all employees on private nonfarm payrolls rose 11 cents to $27.48. Over the year, average hourly earnings have increased by 84 cents, or 3.2 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 3.2% YoY in December. 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 December to 82.3%, and the 25 to 54 employment population ratio was unchanged at 79.7%. From the BLS report:"The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 4.7 million, changed little in December but was down by 329,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. "The number of persons working part time for economic reasons has been generally trending down. The number decreased in December. 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 was unchanged at 7.6% in December. This graph shows the number of workers unemployed for 27 weeks or more.According to the BLS, there are 1.306 million workers who have been unemployed for more than 26 weeks and still want a job. This was up from 1.259 million in November.Summary: The headline jobs number was well above expectations. However, the headline unemployment rate increased to 3.9%. Also wage growth was above expectations, and above 3% YoY for the third consecutive month. Overall, this was a strong report. For 2018, job growth was been solid, averaging 220 thousand per month.
U.S. Jobs Report Highlights Economy’s Strength Despite Market Tumult - For weeks, markets have lurched over fears of an incipient economic downturn. But on Friday, a blockbuster jobs report and reassuring comments from the Federal Reserve chairman reminded investors to relish, at least for now, the economy’s undeniable strengths. Employers delivered one of the strongest months of job gains in the last decade, adding 312,000 to payrolls in December, the Labor Department reported. Wages, which had been lagging until recently, showed impressive gains. Jerome H. Powell, the Fed chief, cheered the report, while offering assurances that policymakers would not move quickly to raise interest rates. Investors had been concerned that additional rate increases would weigh on growth. “2018, by so many measures, was a good year for the United States economy,” he said at an economic conference in Atlanta. He also sought to ease concerns about the stability of the central bank. When asked whether he’d resign if President Trump asked him to, Mr. Powell simply said, “No.” Wall Street responded enthusiastically to the day’s development. The S&P 500 index closed up more than 3 percent. “It’s an unequivocally phenomenal report all the way around,” said Ellen Zentner, chief United States economist at Morgan Stanley. “Anyone that finds something negative in this report is simply cherry picking.” Construction workers erecting scaffolding last month in Manhattan. Builders continued to hire last year even as the housing market slowed. Economists offered raves that could appear on a movie poster or a book jacket — “Extraordinary!” “Blowout,” “Wow!” The figures, they said, offer a resounding response to the question of whether a recession is imminent: “Never mind!” said David Berson, chief economist of Nationwide. “The fears of the economy tipping into a recession now have clearly been overstated.” Mr. Trump welcomed the stellar showing in televised remarks delivered in the White House Rose Garden. “312,000 jobs was a tremendous number and obviously having a big impact on the stock market today,” he said, adding that the pickup in wage growth was “beautiful to watch.” But the latest report comes in the context of flashing yellow lights elsewhere, which Mr. Powell acknowledged on Friday. There is an unresolved trade war with China, a nation already contending with an economic downturn that could dampen global demand. In the United States, there is a slowdown in the housing sector, with hints that the auto industry could be next.
Didn’t Get the Job? The Robots May Not Have Liked Your Social Media Activity - WSJ (video)
I See No Way Out - Countless Americans Still Living Paycheck To Paycheck - A recent Philly.com article noted that, despite the supposed economic "boom", professionals like real estate agents, farmers, business executives and even computer programmers are all still living paycheck to paycheck. Responding to a Washington Post inquiry on Twitter, millennials, Generation Xers and baby boomers that work in a range of geographic areas claim that they have simply been unable to save as rent, childcare and student loans have all gotten in the way. Americans living paycheck to paycheck were highlighted in a recent report from the Federal Reserve that showed four in ten adults say they couldn’t produce $400 in an emergency without going into debt or selling something. And now a partial government shutdown that is seeing nearly 800,000 federal workers not getting paid has fueled the discussion on Twitter about how brief income lapses can be disastrous for some households. My husband is a Park Ranger in the Great Smoky Mountains National Park, and he had to sign his furlough papers. We have a 4 yr old and a 4 month old, and we don't know when his next check will come. Mortgage is due, Christmas 2 days away. #ShutdownStories — Taylor Futch (@TaylorFutch1) December 24, 2018Another Twitter user wrote: “Broke my lease to accept new fed job for which I have to attend 7 months of training in another state. Training canceled with shutdown. Homeless. Can’t afford short(?)-term housing/have to work full-time for no pay/returning Christmas presents.”Those involved in the conversation on Twitter have been using the hashtag #ShutdownStories in response to Rep. Scott Perry of Pennsylvania, who asked reporters last week: "Who's living that they're not going to make it to the next paycheck?" Heidi Shierholz, a former chief economist at the Department of Labor, has the answer: “It’s astronomical what people need just to make it month to month. Given the high cost of transportation, housing, health care. … There is often no wriggle room.”
If You’re Over 50, Chances Are the Decision to Leave a Job Won’t be Yours - Money is hardly the only trade-off Steckel has made to hang onto the South Dakota post. He spends three weeks of every four away from his wife, Mary, and the couple’s three children, who live 700 miles away in Plymouth, Wisconsin, in a house the family was unable to sell for most of the last decade. Steckel keeps photos of his wife, Mary, and their three children on the mantel at his rented place in Pierre. With Christmas approaching, he set off late on Dec. 18 for the 11-hour drive home. When the holiday is over, he’ll drive back to Pierre. “I’m glad to be employed,” he said, “but this isn’t what I would have planned for this point in my life.” Many Americans assume that by the time they reach their 50s they’ll have steady work, time to save and the right to make their own decisions about when to retire. But as Steckel’s situation suggests, that’s no longer the reality for many — indeed, most — people. ProPublica and the Urban Institute, a Washington think tank, analyzed data from the Health and Retirement Study, or HRS, the premier source of quantitative information about aging in America. Since 1992, the study has followed a nationally representative sample of about 20,000 people from the time they turn 50 through the rest of their lives. Through 2016, our analysis found that between the time older workers enter the study and when they leave paid employment, 56 percent are laid off at least once or leave jobs under such financially damaging circumstances that it’s likely they were pushed out rather than choosing to go voluntarily. Only one in 10 of these workers ever again earns as much as they did before their employment setbacks, our analysis showed. Even years afterward, the household incomes of over half of those who experience such work disruptions remain substantially below those of workers who don’t. “This isn’t how most people think they’re going to finish out their work lives,” said Richard Johnson, an Urban Institute economist and veteran scholar of the older labor force who worked on the analysis. “For the majority of older Americans, working after 50 is considerably riskier and more turbulent than we previously thought.”
Deep underground, new NYC train hub slowly takes shape - Deep in the bedrock 15 stories below the famous Grand Central Terminal, a cavernous construction site is slowly — and expensively — taking shape as a commuter rail hub that will accommodate more than 150,000 passengers a day. East Side Access has been dogged by massive cost overruns and delays since construction began nearly a dozen years ago. But Gov. Andrew Cuomo has brought in a manager who is focused on bringing the $11 billion project to completion by a new deadline in four years. “We can all see the proverbial light at the end of the tunnel,” said Janno Lieber, who came to the state-run Metropolitan Transit Authority a year ago, drawing upon his private-sector experience planning the rebuilding of skyscrapers around the World Trade Center. Massive boring machines that excavated the space have been replaced by workers clanging, sawing and hammering against concrete and steel to create a concourse and two levels of platforms with eight tracks in all. The aim is to create a direct route for riders of the Long Island Rail Road (LIRR) to and from Manhattan’s East Side, alleviating traffic that now flows through the chaotically congested Penn Station, on the West Side.
Texas Police Made Over $50 Million in 2017 From Seizing People’s Property — Under a process known as civil asset forfeiture, law enforcement can take cash and property they believe to be related to criminal activity, even if the person involved is never charged with a crime. Prosecutors then file suit against the property, and if successful, police may keep much of it for their own purposes. Civil asset forfeiture is a tool supported by law enforcement leaders, who say it is necessary for fighting crime, but panned by both liberals and conservatives who see it as a violation of Americans’ civil liberties and sometimes refer to it as “policing for profit.” It’s a longstanding, nationwide practice that has regained steam under the Trump administration but faces constitutional challenges in court.When police seize a person’s property, the onus falls on the owner to prove the property was “innocent,” or not linked to a crime. If a person doesn’t fight the seizure in court — which is what happens in the majority of cases — they lose their property automatically. Many cases involve property worth no more than a few thousand dollars, and attorneys’ fees can end up being more costly than the value of the property itself.Last year alone, law enforcement agencies and prosecutors throughout Texas grew their coffers more than $50 million by seizing cash, cars, jewelry, clothing, art and other property they claimed were linked to a crime. That includes property seized under both criminal forfeiture — which requires someone to first be found guilty of a crime — and civil forfeiture, which allows the state to sue the property itself and doesn’t require a criminal charge. The Texas Attorney General’s Office, which tracks these figures, does not distinguish between the two. How much property and money was seized from people, like Rodriguez, who weren’t charged with any crime? That information isn’t collected in any meaningful way in Texas, and state lawmakers, at the urging of prosecutors and law enforcement, have resisted attempts to report more detailed information about asset forfeiture to the public.
“Prison Reform” Is Not Enough. In 2019, Let’s Fight for Decarceration. Prison reform is now in vogue, but police power remains as brutal as ever. Policing in the US continues to include the power to cage as well as the power to kill — a reality that is spectacularly evident at the southern US border. By all accounts, 2019 promises to be another brutal year in the arena of prisons and policing. President Trump signed the First Step Act in late December, while threatening a government shutdown to secure funding for a border wall. The act makes it easier for some federal prisoners to seek early release, widens federal judicial discretion in some low-level sentencing issues and limits some mandatory minimum sentences in federal cases. It is a limited reform program, less because federal prisoners account for just over 10 percent of the prison system and more because the crafters of the bill had such limited ambitions. The Koch-backed act defines reform through expanded “e-carceration,” the use of surveillance technologies like ankle monitors that turn people’s homes into their prisons. This move follows similar efforts at the state level. In eliminating cash bail, for instance, California implemented similar digital surveillance and algorithmic “risk assessment.” The move led many activists who had campaigned against cash bail to withdraw their support for the bill before it passed.The growing significance of e-carceration is not the only warning sign about how politicians broker criminal legal reform. In Florida, the incoming Republican governor and some state legislators are threatening to block the will of nearly two-thirds of the state’s electorate by refusing to honor a ballot initiative that called for the restoration of voting rights to 1.5 million formerly incarcerated people. Reaction is also on the march in St. Louis, where assistant prosecutors joined a police union in seeming protest of the election of reform-minded City Council member Wesley Bell to the district attorney position. Bell, the first Black person elected as St. Louis County prosecutor, defeated Bob McCulloch, the district attorney whose cavalier approach to the shooting of Michael Brown led officer Darren Wilson to escape accountability for the killing.
Report: 452 child workers died in the US from 2003 to 2016 --About 452 child workers died in the United States from 2003 to 2016, according to a December 20 analysis by the Washington Post. Over 16 percent of those, or a total of 73, were children aged 12 years and younger. The age groups with the next highest number of deaths were 16- and 17-year-olds, with 110 and 145 deaths during those years, respectively.A child worker is recognized by the US government as any worker under 18 years of age. According to the Fair Labor Standards Act—a set of federal laws which set age, hours worked, wage and safety requirements for minors in the US—14 is the minimum age for most non-agricultural work.However, there are many exemptions to the law. In the US, children are legally allowed to deliver newspapers, perform in radio, television, movies or theatrical productions at any age. They are also allowed to work in businesses owned by their parents (except in mining, manufacturing or what are deemed to be “hazardous jobs”), perform babysitting or minor chores around a private home, and work as homeworkers to gather evergreens and make evergreen wreaths. The majority of child deaths from 2003 to 2016—52 percent, or a total of 235—occurred in agriculture, although agricultural workers account for less than one-fifth of the total number of child laborers in the US. The disproportionate number can be attributed to the fact that the agricultural, forestry, fishing and hunting sector, which accounted for over 11 percent of total workplace deaths in 2017, is one of the most dangerous occupations in the US. Another cause is that small family farms are exempt from most government regulations of child labor in the US. The US Occupational Safety and Health Administration (OSHA), the federal organization that regulates workplace safety, states that “youths of any age may work at any time in any job on a farm owned or operated by their parent or person standing in place of their parent.” Children younger than 14 are allowed to work on a farm with their parents’ permission. Children younger than 12 can work only on farms so small that they’re not required to pay the minimum wage. Children are prohibited from working during school hours, which means they must work either in the early morning or evening hours. In some seasons, these are the hours with the least amount of sunlight, meaning that they make working conditions more dangerous.
Basic Income vs Guaranteed Jobs: What If We Paid Stay-At-Home Moms? - Wouldn’t it be great if we just paid women for the work they already do? We know that when women earn more money, families do better, because women tend to make economic choices that benefit the family: they invest in education, in healthy food choices, and in other things that lift kids and parents out of cycles of poverty. What if we paid women (and some men) for the jobs they already do — in the home, raising kids? We have adopted some of these ideas within the in-home childcare space or in-home care providers, but what if we took it a much larger step forward?Consider what would happen if we decided to pay women and men who choose to stay home with children from birth until they enter full-time school. The government could train those interested in the program in skills like first aid, CPR, basic childcare, on parenting techniques, early brain development. We can use the program itself to create jobs in training and coaching moms through the structured process. And then, most importantly, we can pay women who make it through the program for the primary role they already occupy — dedicated moms. I’ve long believed that modern feminism has lacked respect for and has not given credit to the inherent dignity women hold in the work they already do.Nothing has to dramatically change, except now the hard work women are doing today would be compensated. We know if those kids were in daycare or with a nanny, that those services have market value, so does staying home with your kids. There is real value in the science that supports babies being bonded to their mothers with longer breast-feeding and close parental care in early childhood. But let’s be super clear, it also has market value in the childcare being provided. Most studies estimate that at least five million women choose to stay home and raise their children. We should pay them.
Link Between Social Media and Depression Stronger In Teen Girls Than Boys, Study Says -- According to a new study published in the journal EClinicalMedicine, the link between social media use and depressive symptoms in 14-year-olds may be much stronger for girls than boys. CNN reports:Among teens who use social media the most -- more than five hours a day -- the study showed a 50% increase in depressive symptoms among girls versus 35% among boys, when their symptoms were compared with those who use social media for only one to three hours daily. Yet the study, conducted in the UK, showed only an association between social media use and symptoms of depression, which can include feelings of unhappiness, restlessness or loneliness. The findings cannot prove that frequent social media use caused depressive symptoms, or vice versa. The study also described other factors, such as lack of sleep and cyberbullying, that could help explain this association. For the study, researchers analyzed data on 10,904 14-year-olds who were born between 2000 and 2002 in the United Kingdom. The data, which came from the UK Millennium Cohort Study, included information from questionnaires on the teens' depressive symptoms and social media use. Depressive symptoms were recorded as scores, and the researchers looked at which teens had high or low scores. They found that on average, girls had higher depressive symptom scores compared with boys. The researchers also found that girls reported more social media use than boys; 43.1% of girls said they used social media for three or more hours per day, versus 21.9% of boys. The data showed that for teens using social media for three to five hours, 26% of girls and 21% of boys had depressive symptom scores higher than those who used social media for only about one to three hours a day.As for the gender gap, Yvonne Kelly, first author of the study and professor of epidemiology and public health, believes it has to do with "the types of things that girls and boys do online." "In the UK, girls tend to more likely use things like Snapchat or Instagram, which is more based around physical appearance, taking photographs and commenting on those photographs," she said. "I think it has to do with the nature of use."
Teacher unions in Washington state back Democrats’ regressive school taxes - Months after the statewide struggle waged by teachers in Washington state, the Democratic Party and the teacher unions are uniting to implement regressive taxes in the name of funding public education. Earlier in December, Democratic Governor Jay Inslee released a budget proposal for 2019-2021 that claims to meet pressing social needs in the state, especially education. The proposal is for $54 billion in total expenditures, a 20 percent increase from the 2017 budget. This would be funded by a meager capital gains tax and an expansion of the state’s preexisting regressive tax system. The capital gains tax would take nine percent of the revenue made from selling investments, such as stocks and rental properties, excluding homes, farms, forestry land, and retirement accounts. These taxes are only projected to raise $1 billion for the next two years. Another $2.6 billion is expected to be raised from a proposed increase of the tax rate on professional and middle-class business services, and other funding would come from minor changes to out-of-state retail taxes and real estate sales. Even though the proposal would only have a minor impact on the massive wealth of business owners, corporate executives and investors, the governor’s capital gains tax proposal faces stiff opposition from state Republicans and sections of the Democratic Party who claim that the proposal violates the state constitution. Inslee, who handed over the biggest corporate tax cut in history to Washington-based Boeing ($8.7 billion) in 2015, has proposed several regressive taxation measures. For education funding specifically, Inslee proposes removing the cap on local levy taxes that was passed in 2017. Local levies, which primarily consist of additional sales and property taxes, have increasingly filled the gap as state and federal funding declined over the last decade. These are tacked on to the state and federal taxes families already pay.
Strike looms in Los Angeles as struggles by educators set to continue in 2019 - The new year is set to begin with teachers around the world determined to reverse decades of attacks on jobs, working conditions and the right to high quality public education. Fearing the continued escalation of the teacher rebellion of 2018, the US News and World Report and other corporate media outlets are already warning that “2019 could bring more of the same.” All indications point to an even more explosive series of struggles. Following a powerful rally of 50,000 educators, students and parents in Los Angeles on December 15, more than 30,000 teachers are scheduled to walk out January 10. A walkout in the second largest school district in the US would be the first since 1989. “The issues facing LA teachers are part of a national calamity that has been taking place over the last 30 to 40 years,” said one teacher, Brett, to the World Socialist Web Site. True, indeed! The worldwide social counterrevolution against the working class, which was escalated after the 2008 global financial crash, has already propelled millions into struggle against social inequality.
- • Thousands of French teachers and students have, since November, joined tens of thousands of workers and taken to the streets in yellow vests against the “President for the Rich” Emmanuel Macron. They haveopposed national cuts in education and the rise of contract labor, calling for increased wages among educators, among many other social necessities.
- • As the year begins, 45,000 para teachers in the east Indian state of Jharkhand are already on strike over mass layoffs and low pay in rural India. On December 24, they began a hunger strike in front of the homes of legislators to strengthen their fight for increased wages.
- • On January 2, the Kenyan National Union of Teachers will strike. At issue has been Kenyan President Uhuru Kenyatta’s policy of “delocalization,” which has already forcibly transferred thousands of teachers from their home districts. The measures are linked to overall attacks on public education by Uhuru (worth over $500 million and one of Africa’s wealthiest individuals) packaged under the ubiquitous international appellations of “professional development” and “accountability.”
- • Iranian teachers have held sit-ins in more than a dozen cities, in protests beginning in the summer and continuing through November. They described “painfully low wages” and the degradation of quality public education. Recent teacher strikes and struggles have gripped New Zealand, Pakistan, Cyprus, Sierra Leone, Tasmania and more.
- In the US, the struggle in California takes the center stage, continuing the teacher rebellion sparked by the determined initiative of rank-and-file teachers in the coal fields of West Virginia earlier this year. That upsurge, which the unions sought to prevent and then betray, led to mass walkouts of educators in Oklahoma, Arizona, Colorado, Kentucky and the state of Washington.
Los Angeles school officials hire strikebreakers as teachers prepare for walkout -- With a walkout by 33,000 teachers in Los Angeles, California set to begin on January 10, school officials are hiring hundreds of strikebreakers and have threatened to keep schools open during the strike. “We have hired substitutes,” Los Angeles Unified School District (LAUSD) Superintendent Austin Beutner declared Monday. “We have made plans as to alternate curriculums for days that there is a strike, but our goal is to make sure schools are safe and open, so kids continue to learn.”The hiring of an estimated 400 substitutes is largely symbolic and will not keep the 600,000-student school district operating in the event of a walkout. Nevertheless, Beutner and other district officials, acting on behalf of powerful corporate and political interests in the city and the state, are throwing down the gauntlet to teachers. The political establishment, dominated by the Democratic Party, has no intention of acceding to the teachers’ demands for increased pay and school funding, let alone an end to the privatization of public education. Beutner’s professed concerns for the well-being of school children is a fraud. Beutner is not an educator, but a highly-skilled Wall Street operator. In 1993, Beutner was tapped by the Clinton administration to manage a special USAID fund involved in the pillaging of state-owned assets in the former Soviet Union, enriching himself and other US investors while leaving behind a social catastrophe. He has been tasked with the same job in Los Angeles: the dismantling of the public schools and handing over its assets to charter school operators and other for-profit businesses. The Los Angeles Unified District already has the highest number of charter schools (244) and students enrolled in these privately run, but publicly funded schools in the nation. The charter operations siphon off an estimated $600 million from public schools every year. With Beutner’s “Reimagining LAUSD” plan, which will break up the district into 32 “networks,” teachers anticipate that school authorities will escalate their plans to use standardized testing to close so-called “failing schools” and vastly expand the privatization of the nation's second largest district. At the same time, the insulting 3 percent wage increases offered by the school district would be contingent on slashing the health care benefits of future teachers.
I Had To Quit For My Sanity - Teachers Resigning At Highest Rate Ever Recorded - Teachers and other public education employees are quitting their jobs at the fastest pace on record after roughly 10% of the industry quit over a 12 month period ending in October, according to data from the Labor Department. While US workers overall at the highest rate since 2001 amid a tight labor market and historically low unemployment, quitting a job in education is notable since the field is known for stability and rewarding longevity, reports the Wall Street Journal's Michelle Hackman and Eric Morath. The educators may be finding new jobs at other schools, or leaving education altogether: The departures come alongside protests this year in six states where teachers in some cases shut down schools over tight budgets, small raises and poor conditions.In the first 10 months of 2018, public educators quit at an average rate of 83 per 10,000 a month, according to the Labor Department. While that is still well below the rate for American workers overall—231 voluntary departures per 10,000 workers in 2018—it is the highest rate for public educators since such records began in 2001. –WSJ The rising number of departures among public education workers is in contrast with 2009, when the economy was first emerging from a deep recession. Then, the rate was just 48 per 10,000 public education workers, a record low.“During the recession, education was a safe place to be,” said Julia Pollak, labor economist at ZipRecruiter.That year, the unemployment rate touched 10%, the highest since the 1980s. This year, the jobless rate fell to 3.7%, the lowest reading since 1969. That has created very different incentives for teachers and their public education colleagues.“It’s a more boring place now, and they see their friends finding exciting opportunities,” Ms. Pollak said. –WSJ Since 2015 school districts have reported a shortage of qualified teachers to fill open slots, which resulted in more states opening temporary teaching jobs to underqualified applicants, according to the Learning Policy Institute. Qualified teachers leaving the field at a record pace will likely exacerbate that trend, according to the Journal. In the 12 month period ending in October, one million people quit the public education sector according to the most recent Labor Department data, out of more than 10 million Americans in the field.
Chinese students miss out on early places at MIT but what’s to blame for the change in fortune? - No students from mainland Chinese schools have been admitted to the prestigious Massachusetts Institute of Technology (MIT) through its early admission programme this year, intensifying concerns that candidates are facing growing difficulty in entering the United States’ best universities. Unlike in the past, when at least a handful of students from Chinese schools made it through the early admission system, according to official results released by the college earlier this month this year there were none. The news epitomised the falling success rate of mainland Chinese students seeking places at top US colleges in recent years amid growing uncertainty about immigration and visa policies, and the increased importance placed on applicants’ soft skills, some industry insiders have said. Why China’s overseas students find things aren’t always better back home The MIT offered early admission to more than 700 students chosen from 9,600 applicants from around the world. While five of them were Chinese nationals, they all graduated from US high schools. “This is in line with the overall trend,” said Sun Rui, founder of Insight Education, a company based in the south China city of Shenzhen that helps Chinese students apply for undergraduate programmes in the United States. “We feel that it’s harder each year to apply for top universities,” she said. The number of students from Shenzhen who secured a place at one of the top four colleges in the US had been falling year by year, she said. “Last year, a couple of students from Shenzhen made it to Stanford. This year it was none.” While Chinese students had a reputation for getting high exam scores, Sun said they were often at a disadvantage when it came to soft skills, such as leadership and citizenship. Chinese schools did not care about the latter, but American schools valued them greatly, she said.
College Board invalidates student’s SAT after she retakes test and improves scores - The College Board invalidated a Florida high school student’s SAT results after she retook the exam to improve her score by 330 points. Kamilah Campbell of Miami Gardens, Fla., originally got a score of 900 after her first attempt at the college entrance exam without any prep work, CNN reported Thursday. Campbell told CNN’s Alisyn Camerota on Friday's “New Day” that she took the test the first time to get a “baseline.” She also said that guidance counselors recommended taking the test the first time without any prep. “I just took it to get a feel for how I was so I could know my strengths and weaknesses in the test,” Campbell said. Campbell, who wishes to study dance at Florida State University, got a tutor, took online classes and studied with a copy of a prep book from The Princetown Review before retaking the test again seven months later. Instead of finding out her new results, Campbell said she was sent a letter from The College Board essentially accusing her of cheating. "We are writing to you because based on a preliminary review, there appears to be substantial evidence that your scores ... are invalid," it said. "Our preliminary concerns are based on substantial agreement between your answers on one or more scored sections of the test and those of other test takers. The anomalies noted above raise concerns about the validity of your scores." Campbell called College Board and was told she received a combined score from the reading, writing and language, math and essay sections of 1230 at her second attempt. A perfect SAT score is 1600, CNN noted. "I did not cheat. I studied, and I focused to achieve my dream," she told reporters Wednesday. The student has turned to a prominent civil rights attorney and Florida State alum, Ben Crump, for help.
David Hogg Goes to College - David Hogg, supposed victim of the Parkland shooting and anti-gun activist, got the letter 42,749 applicants hope to receive from Harvard: an acceptance letter. In 2018, Harvard accepted only 4.59 percent of applicants, roughly 1,900 persons. Once Hogg’s tweet that announced the good news went viral, eyebrows across the United States were raised in befuddlement.Hogg’s highest SAT score is 1270, and the average SAT score for admissions into Harvard is roughly 1480.* Americans who ascribe to the ideology of meritocracy rightfully struggle with the idea that Hogg is able to meet Harvard requirements with a score approximately 200 points below the average acceptance score. Furthermore, Hogg already received rejection letters to several universities in California, but the premier Ivy League school of America found a place for the anti-Second Amendment activist.According to a report by Reuters, Harvard is already embroiled in a racial-profiling case of Asian-American applicants. In essence, Harvard chose Caucasian males over Asian males based not on the merits of academic performance but instead on personality. The fact that a university discriminates against minorities, especially in an anti-progressive ethos, is baffling. Such acts raise the question as to what agendas do universities in America like Harvard have by discriminating against minorities who have meritoriously earned their place at a school?Furthermore, outlets such as the LA Times and the Washington Post admit universities teem with progressive professors in comparison to a minority of conservative professors. Depending on which study you peruse, progressive professors outnumber conservative professors 12 to 1. Likely, the majority of public institutions have very few conservative professors with the majority of conservative professors located at private religious institutions across the United States.
In Letter, Hundreds of Students Call for Changes to University Econ Depts Following Fryer Allegations - More than 285 graduate students and research assistants — at least 18 of them at Harvard — signed a letter Thursday calling for changes within the field of economics in response to allegations of sexual harassment against Economics Professor Roland G. Fryer, Jr. The signatories asked economics departments at universities across the country and the American Economic Association to implement a set of three changes — to better listen to graduate students, create codes of conduct, and implement a reporting system to “document bad behavior.” At least two former research assistants at the Education Innovation Lab — the think tank Fryer founded — signed the letter. The Crimson first reported the existence of at least one Title IX investigation into Fryer in May, and another in December. Fryer is the subject of two additionalHarvard-led investigations — one into allegations of sexual harassment and one into his lab’s finances — according to the New York Times. He also faces a state-level investigation led by the Massachusetts Commission Against Discrimination based on a complaint filed separately by one of the Harvard complainants. Multiple complainants allege Fryer engaged in unwelcome sexual conduct towards female employees and created a hostile environment for women at EdLabs. In a May interview with The Crimson and a December op-ed published in the Times, Fryer denied the sexual harassment allegations against him. Harvard’s Office for Dispute Resolution — which conducts investigations into formal complaints of sexual- and gender-based harassment — issued a report this fall on one investigation, but at least one other ODR inquiry remains ongoing.
When Jewish Leaders Decide To Harass College Kids — To ‘Support’ Israel - American-born Israeli rabbi Daniel Gordis mounted the podium at the AJC conference, his conservative grey suit and tie and small dark kippah the very uniform of the moderate establishment. “Fabienne Roth lives someplace,” Gordis said in front of the crowd, referring to a blonde-haired college junior at UCLA who had asked, and then apologized for asking, an allegedly anti-Semitic question at a student government meeting months earlier. “We can find out where that place is, and she should not be able to come in or out of her house, in or out of her apartment, without being reminded, peacefully, morally, legally, that we know who you are.” Gordis said that Roth’s future employers should be protested and boycotted. Days later, he used his Jerusalem Post column to make the suggestion that the Roth’s future children should also be punished for what she had done. Gordis’ words constituted an open endorsement in the heart of the Jewish establishment of the sorts of aggressive tactics that had been whispered about on the edges of the Jewish communal landscape for years. Leaders who favored aggressive confrontation with perceived enemies, particularly critics of Israel, won out. Jewish and pro-Israel groups both in the U.S. and Israel used significant resources to direct hard-line, often secretive tactics against their targets. In recent months, the Forward has reported on how this strategy played out: An online blacklist called Canary Mission, which went live in 2015, targeted college students critical of Israel. Professional pro-Israel operatives posed online as college students. Pro-Israel campus groups hired top-tier professional Washington, D.C. political consultants and sent them to work on college campuses. An Israeli spy firm pitched U.S. Jewish donors with a proposal to covertly undermine the movement to boycott, divest from and sanction Israel. “At the highest levels, the conversations were beginning to shift,” said one person who worked in 2015 as a pro-Israel campus professional, and who was involved in Jewish communal strategy discussions. They were “about how to move from being on a defensive footing to take a more offensive approach.” No one asked the students and Jewish professionals on campuses around the country about this strategy before it was adopted. Some Jewish students have publicly condemned aspects of it. “There’s no winning in this. It creates a toxic environment,” one Hillel professional told the Forward early this year, in describing anonymous websites that had appeared on her campus attacking BDS advocates. “It makes our work doing Jewish engagement incredibly harder.”
Art-School Confidential -In April, 51 of the 54 students slated to graduate from Columbia University’s visual-arts M.F.A. program came to the provost with an unusual demand: a full tuition refund for the 2017-18 academic year. These candidates had reportedly been working in decrepit conditions. Limestone had fallen from studio ceilings and hallways had flooded, damaging works of art. Room temperatures often dropped below 40 degrees. The environment outside the studio was equally chilly: Star professors took repeated sabbaticals. The university had cheated the students out of an education, they claimed. (One year of tuition at Columbia’s fine-arts program is $63,961.)The state of Columbia’s highly ranked program — a "disgrace," the provost acknowledged as he declined their refund request — may be unusual. But the ceiling has yet to crumble on the M.F.A. market more broadly. The degree has increasingly become a prerequisite for people trying to break into the art world, especially those seeking the attention of the leading New York galleries. More than half of the 500 most successful American artists at auction hold M.F.A.s. But what is really happening inside these programs? And what effects do they have on contemporary art?Gary Alan Fine’s Talking Art (University of Chicago Press, 2018), a report on three M.F.A. programs in the Chicago area, offers us an ethnography of visual-arts education: a dispatch from M.F.A. island. Art school, Fine finds, is a subculture, with an austere patois and peculiar rites of praise and humiliation.
A $21,000 Cosmetology School Debt, and a $9-an-Hour Job - When she was in cosmetology school, Tracy Lozano had a love-hate relationship with weekday mornings. Those predawn moments were the only time she saw her infant daughter awake, and she savored them. When the time came to hand the baby to her own mother, she said in a recent interview, she would stifle her tears, letting them roll only when she had closed the door behind her.She would put on her game face when she pulled into the parking lot of the Iowa School of Beauty, just outside Des Moines. From what Ms. Lozano could tell, a cosmetology license was a realistic way to ensure a better life, and she was willing to make sacrifices. While also working nights at a Pizza Hut, she borrowed $21,000 to cover tuition and salon supplies and put in eight-hour days at the school for the better part of a year.The amount of time Ms. Lozano spent learning to give haircuts, manicures and facials was enormous, but the requirement was set by the state, and she didn’t much question it. She was determined to earn enough money to move out of her mother’s house. Only a few weeks after getting her cosmetology license in 2005, she was hired at a local Great Clips. The job, though, paid just $9 an hour, which meant that her days double-shifting at Pizza Hut weren’t over. Even with tips, Ms. Lozano didn’t earn more than $25,000 in any of her first few years as a cosmetologist. For years, she relied on food stamps and health insurance from the state. She couldn’t cover living expenses and keep chipping away at her loan payments. Thirteen years after graduating, she still owes more than $8,000. What Ms. Lozano didn’t know was that the state-regulated school system she had put her faith in relies on a business model in which the drive for revenue often trumps students’ educational needs. For-profit schools dominate the cosmetology training world and reap money from taxpayers, students and salon customers. They have beaten back attempts to create cheaper alternatives, even while miring their students in debt. In Iowa in particular, the companies charge steep prices — nearly $20,000 on average for a cosmetology certificate, equivalent to the cost of a two-year community-college degree twice over — and they have fought to keep the required number of school hours higher than anywhere else in the country.
Career Education Corp., Tied to DeVos Aides, Pays Millions to Settle State Claims of Illegal Practices - For-profit college chain Career Education Corp., a company closely tied to top officials of the Betsy DeVos Department of Education, announced today it has settled with the attorneys general of 48 states and the District of Columbia a law enforcement investigation that the state AGs have been pursuing since 2014, focusing on CEC’s abusive and deceptive recruiting and student loan practices. To resolve the matter, CEC has agreed to stop trying to collect hundreds of millions in private loans it claims that former students still owe the company, and to make commitments to reform its operations. CEC admitted no wrongdoing. CEC, headquartered in Schaumburg, Illinois, now offers mostly online career education courses through its American InterContinental University and Colorado Technical University. In the past decade, CEC has phased out various troubled campus-based brands, including the Sanford-Brown chain. A group of state AGs have been doing extraordinary work over the past seven years, exposing for-profit college abuses and providing some compensation and a measure of justice for injured students, who often have been left with overwhelming debt and no meaningful career training. But it’s doubtful that the AGs received much support in their case against CEC from the DeVos Department, which has worked consistently to eliminate protections for students from predatory college behavior. Remarkably, DeVos’s top three higher education aides all have an association with CEC. Acting Under Secretary of Education Diane Auer Jones was from 2010 to 2015 senior vice president and chief external affairs officer at CEC. Robert Eitel, senior advisor to DeVos at the Department, was vice president of regulatory operations at CEC from 2013 to 2015. And the acting head of the Department’s student aid office, James Manning, was, sometime between 2015 and 2017, a consultant to a student loan company run by William Hansen, who now sits on the CEC board of directors; Manning was Hansen’s chief of staff when Hansen served as deputy education secretary under George W. Bush. In addition, the DeVos Department’s general counsel, Carlos Muniz, according to his federal disclosure form, “provided consulting services” to Career Education Corp. as a private lawyer before coming to the department.
Lord Abbett Affiliated v. Navient Corporation: “We cheat the other guy and pass the savings on to you!” --- More than a year ago, Lord Abbett Affiliated Funds sued Navient Corporation for fraud and securities violations, claiming it was deceived by Navient's representations about its student loan portfolio. Navient is a student-loan servicing company that manages about $300 billion in student-loan debt owed by 12 million borrowers. According to Lord Abbett's second amended complaint (80 pages long), Navient "regularly and indiscriminately" granted forbearances to struggling student-loan borrowers, allowing those borrowers to temporarily stop making monthly loan payments Lord Abbett alleged that Navient did this in order to artificially report high income and to hide the fact that Navient was a riskier investment than it was portraying itself (para. 5). Personally, I don't give a fig whether Lord Abbett and its investors lost money in Navient stock. After all, Lord Abbett apparently didn't care about Navient's nefarious practices so long as it was making money. It's as if Navient was making that old used-car dealer pitch: "We cheat the other guy and pass the savings on to you!" Lord Abbott's complaint, however, is strong evidence that Navient's reckless practice of granting forbearances to distressed student borrowers obscures the number of people who are not paying back their student loans. According to Lord Abbett (para 47), Navient granted four consecutive forbearances to more than half a million student-loan borrowers over a five-year period, allowing borrowers to skip their monthly loan payments while interest accrued and capitalized on their loans. How many of these half million borrowers will ever pay off their individual student loans? I venture to say none of them will.
Minnesota mom says 26-year-old son died because he couldn't afford the cost of insulin -- A Minnesota mother is advocating for lower insulin prices after she said her 26-year-old son died because he couldn’t afford the cost.Nicole Smith-Holt told CBS News in a report published on Friday that her son, Alec, was a Type 1 diabetic, which meant he needed to take daily doses of insulin in order to survive. But when he turned 26, his monthly payment reportedly skyrocketed to $1,300 because the drug could no longer be covered by his parents’ insurance. That’s when Smith-Holt said her son, without her knowledge, began to ration his insulin to get by.Shortly after, she said, her son fell into a diabetic coma while he was alone in his apartment and later died."My son died because he could not afford his insulin," Smith-Holt told the publication. "Nobody to be there with him, to hold his hand or to call for help … and then I think about if he had never moved out, if he had lived at home, somebody would've, you know, seen the signs," Smith-Holt continued. "And I'll probably feel guilty every day for the rest of my life."
Big Pharma Would Like Your DNA - 23andMe has always planned to sell access to its customers’ DNA—a fact it has not exactly kept secret.When the company’s DNA-testing service launched in 2007, Wired touted its quest to amass a “treasure trove of data ... to drive research forward” as a “key part of the 23andMe business plan.” Co-founders Anne Wojcicki and Linda Avey outright told the San Francisco Chronicle that selling kits was only the first step. “The long game here is not to make money selling kits, although the kits are essential to get the base level data,” a 23andMe board member said to Fast Company in 2013. “Once you have the data, [the company] does actually become the Google of personalized health care.” So this week’s announcement that GlaxoSmithKline is investing $300 million in 23andMe and using the DNA company’s de-identified, aggregate customer data for drug research is very much in keeping with the long-term business plan. You don’t make that kind of money selling $99 spit kits.23andMe customers can opt of out their data being used in research, but the vast majority of its 5 million customers have opted in. The deal comes at a time as pharmaceutical companies are increasingly looking to DNA for new drug ideas. In 2015, 23andMe announced its first partnership with a pharmaceutical company—in which it would study Parkinson’s with Genentech. The deal was reportedly just the first of ten at the time, according to Forbes. 23andMe has also since published studies with scientists from Pfizer, Janssen, and GlaxoSmithKline.
Opioid overdose deaths triple among US teens and young children -- Opioid overdose death rates among US teens and children have tripled over the past 17 years, a new study shows. The study, published online in JAMA Network Open, examined a group of almost 9,000 children and adolescents (under age 20) who died in all settings from opioid poisonings between 1999 and 2016.Researchers found that young children have either died from accidentally ingesting narcotics or from intentional poisoning. Teens, meanwhile, have more often died from unintentional overdoses, using prescriptions painkillers found in their homes or drugs bought on the streets. These include prescription opioids, heroin, fentanyl and other legal and illicit drugs. “These deaths don’t reach the magnitude of adult deaths from opioids, but they follow a similar pattern.” The study shows the depth of the opioid crisis facing the youngest segments of the population and points to the woefully inadequate response of the government in dealing with this social catastrophe as it spirals out of control.The study notes: “What began more than two decades ago as a public health problem primarily among young and middle-aged white males is now an epidemic of prescription and illicit opioid abuse that is taking a toll on all segments of US society, including the pediatric population.” Drug overdose deaths in the US topped 72,000 in 2017, according to estimates released earlier this year by the Centers for Disease Control and Prevention. This staggering figure was 6,000 more deaths than 2016 estimates, a rise of 9.5 percent. Some 43,000 of drug overdose deaths in 2016, the latest year examined by the JAMA study, are attributed to opioid overdoses. Other causes include alcohol poisoning and other drug overdoses.
Opioid Crisis Leaves 700,000 Americans Dead: "Epidemic Continues To Worsen And Evolve" - More than 700,000 Americans died from drug overdoses from 1999 to 2017, about 10% of them in 2017 alone, according to a new report published by the US Centers for Disease Control and Prevention (CDC). In total, there were a staggering 70,237 drug overdose deaths last year, which is more deaths than all US military fatal casualties of the Vietnam War. Opioids were involved in 67.8%, or 47,600 of those deaths. Of those opioid-related overdose deaths, 59.8% of them, or 28,466, were due to synthetic opioids. The report, which was published online in the CDC's Morbidity and Mortality Weekly Report (MMWR), also examined drug overdose deaths from 2013-17. During that time, "drug overdose death rates increased in 35 of 50 states and DC, and significant increases in death rates involving synthetic opioids occurred in 15 of 20 states," the report said adding that the rapid increase was driven by fentanyl.Of the 35 districts reporting data, 23 states and DC noticed increased rates of death directly linked to synthetic opioids. Fentanyl overdose deaths surged 150% from 2016 to 2017. In prior reports, synthetic opioid-related deaths primarily occurred east of the Mississippi River. The latest CDC data now shows 8 states west of the Mississippi had significant increases in such deaths: Arizona, California, Colorado, Minnesota, Missouri, Oregon, Texas, and Washington. The CDC said overdoses were seen in both men and women, as well as non-Hispanic blacks, non-Hispanic whites and Hispanics, blacks, had the largest relative change, which was 25.2%. The most significant increase in deaths occurred among 25 to 44-year-old men, a sobering reality that demonstrates America's prime working age men are deteriorating. "Through 2017, the drug overdose epidemic continues to worsen and evolve, and the involvement of many types of drugs (e.g., opioids, cocaine, and methamphetamine) underscores the urgency to obtain more timely and local data to inform public health and public safety action," the report said.
Belgian pharmaceutical companies have supplied drug substances to a Mexican drug lord - The federal magistrate confirmed on Wednesday that they're pursuing seven senior business executives who are representing Belgian pharmaceutical companies suspected of supplying medical substances to a Mexican drug lord. With these substances, the drug trafficker has been able to produce millions of methamphetamine pills. The court will decide on 5 April if the seven men will be taken to trial. The supplied medical substances contained ephedrine, which is normally a harmless product used in cough syrups. However the substance can also be used in the production of particularly strong methamphetamine, also known as “crystal meth of ice”. The Belgian companies have supplied 66 million ephedrine pills to Ezio Figueroa-Vasquez, who used the pills to produce drugs sold at the market for 360 million euros. The companies claim that they had simply ignored the final destination of the pills they sold. However, following a closer look at email and telephone exchanges, the court estimates that they companies knew where they went.
Louisiana Police Departments Offering Home Visit To Test Meth For Zika Virus -- This is not The Onion, but an actual public safety notice issued by police in Louisiana. The Harahan Police Department is asking people who might have crystal meth in their possession to get it tested for the deadly Zika Virus by bringing it to their local police station. The invitation and warning was posted to the department's Facebook page to spread awareness of the "threat" while offering "test" batches of meth "for free" at their department, and further advising all state residents possibly in possession of crystal methamphetamine to bring it to a local police department. And in what appears the most epic police attempt yet at uncovering and busting meth labs across the state, the department goes so far as to offer a home visit for "those not comfortable going to the police station." The post is signed Officer Moody. The Harahan Police Department announcement adds to the dubitable offer:For those not comfortable going to the police station, if you make the call, an officer will be glad to come to you and test your Meth in the privacy of your home. Please spread the word! We can only imagine the paranoid and hilarious conversations to ensue among area meth producers and addicts. Perhaps police will have the "success" stories later posted online as well in the form of police reports and mug shots?
Zuckerberg Funds Wireless Mind Control Using Game-Changing Brain Implant - When Mark Zuckerberg isn't smoking meat or cooking up excuses for data harvesting scandals, the 34-year-old Facebook CEO and his wife Priscilla Chan are high-fiving over their investments in the mind-control game, according to Business Insider. Funded by their for-profit biomedical research company, the Chan Zuckerberg Initiative (CZI), the Silicon Valley power couple is helping to fund research that could vastly improve the lives of people suffering from neuromotor disorders - or create an army of compliant cyborgs trained to take Mark seriously. Mark Zuckerberg and his paediatrician wife Priscilla Chan have sold close to 30 million shares of Facebook to fund an ambitious biomedical research project, called the Chan Zuckerberg Initiative (CZI), with a goal of curing all disease within a generation.A less publicised component of that US$5 billion programme includes work on brain-machine interfaces, devices that essentially translate thoughts into commands. One recent project is a wireless brain implant that can record, stimulate and disrupt the movement of a monkey in real time. -Business Insider In a new paper published in Nature on Monday, the ZCI-funded researchers outline a wireless brain device implanted in primates that can record, stimulate and modify brain activity in real time - at least in primates. The device can sense a normal movement and immediately stop it, according to researchers at the Chan Zuckerberg BIohub, a non-profit medical research group within the CZI. If the technology translates to humans, it could be used therapeutically for those suffering from diseases like Parkinson's or epilepsy by stopping involuntary muscle movements just as they start. "Our device is able to monitor the primate’s brain while it’s providing the therapy so you know exactly what’s happening," said study co-author Rikky Muller - a professor of computer science and engineering at UC Berkeley, and a Biohub investigator. The applications of brain-machine interfaces are far-reaching: while some researchers focus on using them to help assist people with spinal cord injuries or other illnesses that affect movement, others aim to see them transform how everyone interacts with laptops and smartphones. Both a division at Facebook formerly called Building 8 as well as an Elon Musk-founded company called Neuralink have said they are working on the latter.
‘This disease is a monster’: Furious moms blast CDC for failing to act on mystery polio-like virus which has left hundreds of kids paralyzed since 2012, killed at least two and is now expected to hit unprecedented levels in 2020 - Furious mothers of children who have been left partially disabled and fully paralyzed by the polio-like illness of Acute Flaccid Myelitis (AFM) have blasted the CDC for failing to act - and say they warned the organization that 2018 was going to be the worst year yet. Several parents of children who were diagnosed with the illness up to four years ago have spoken to DailyMail.com and revealed their anger that more has not been done to educate doctors and stop the illness in its tracks. This year the number of cases reached its highest yet with 341 children taken ill across 39 states - 186 of those cases have so far been confirmed with investigations underway on the rest. That is a steady climb from the 35 confirmed in 2017, 149 in 2016, 22 in 2015 and 120 in 2014. The illness appears to surge every other year with every resurgence worst than the last. More than 17 countries have reported the odd AFM case, however, only the US has biannual surges and now experts are warning ahead for 2020. The disease has been likened to polio, which struck tens of thousands of children a year in the US before its vaccine was introduced in the 1950s. However, this virus is not thought to be responsible for the outbreaks. It may be caused by the EV-D68 virus, which is a distant relative of polio and coincided with many cases in 2014. CDC doctor Dr Ruth Lynfield calls EV-D68 'the leading hypothesis'. EV-A71, another polio relative, and rhinovirus are also suspects but no conclusions have been reached. In past cases it has robbed children of the use of limbs but has also left many fully paralyzed and even in need of ventilators to breathe. At least two children have died. Parents of those affected say many could have been saved in this year's outbreak if only the CDC had acted sooner to raise awareness of the condition.
A Trump county confronts the administration amid a rash of child cancers — The children fell ill, one by one, with cancers that few families in this suburban Indianapolis community had ever heard of. An avid swimmer struck down by glioblastoma, which grew a tumor in her brain. Four children with Ewing’s sarcoma, a rare bone cancer. Fifteen children with acute lymphocytic leukemia, includingthree cases diagnosed in the past year. At first, families put the illnesses down to misfortune. But as cases mounted, parents started to ask: Could it be something in the air or water? Their questions led them to an old industrial site in Franklin, the Johnson County seat, that the federal government had ordered cleanedup decades ago. Recent tests have identified a carcinogenic plume spreading underground, releasing vapors into homes. Now, families in a county that voted overwhelmingly for President Trump are making demands of his administration that collide directly with one of his main agendas: the rolling back of health and environmental regulations. On Wednesday, a group representing dozens of concerned parents called for a federal investigation by the Environmental Protection Agency’s Office of Inspector General — the same watchdog that examined the government’s slow response to the water crisis in Flint, Mich. — into why Franklin’s toxic plume of trichloroethylene, or TCE, persists. The group accuses the E.P.A. of “serious mismanagement” and “significant delays” at the site, even after the dangers became apparent this summer, according to a letter the group said it sent to the E.P.A.’s Office of the Inspector General. But the parents’ demands also reach well beyond immediate concerns about the chemicals under their feet. Families across the political spectrum have also spoken out against the Trump administration’s drive to weaken restrictions on TCE, a colorless fluid with a subtle, sweet odor used by as many as four-fifths of the nation’s 65,000 dry cleaners, as well as about 2,200 factories and other facilities. Decades ago, it was used at the Franklin site.
9/11-related cancers killed 15 police officers in 2018 -- Fifteen police officers died in 2018 from cancers related to the terrorist attack on the World Trade Center on September 11, 2001, according to a new report. The 9/11-related deaths were part of an overall uptick in fatalities among law enforcement officers this year. Police officer deaths nationwide increased by 12 percent this year, climbing to 144 fatalities as of December 27, up from 129 in 2017, according to the National Law Enforcement Officers Memorial's annual fatalities report. Firearms were the leading cause of death in the line of duty, claiming the lives of 52 officers, a 13 percent increase from 2017, according to the report. The Another 50 officers were killed in traffic-related incidents in the line of duty. The report also detailed the growing toll of cancer-causing toxins present during the search and recovery effort at Ground Zero after the 9/11 attacks. These illnesses were responsible for 15 police officer deaths in 2018, a four-fold increase from the year before, according to the report. Nearly 10,000 people have suffered from similarly caused cancers, according to data from the World Trade Center Health Program, an arm of the Centers for Disease Control and Prevention that provides health care for first responders and lower Manhattan residents impacted by the 9/11 attacks. More than 580 people, including first responders, survivors and Manhattan residents, have died from 9/11-related cancers as of September 30 of this year, according to the CDC. "[The 9/11 first responders] are a fraternity that's shrinking," said John Feal, an advocate for World Trade Center first responders. "9/11 hasn't ended, it's the longest day in the history of days."
Facing a grim New Year: Nearly 40 die from 9/11 illness in last four months - They survived the most horrific terror attack in our nation's history — but may not make it through another year. Nearly 40 people who either responded to, or lived and worked near the twin towers when terrorists brought them down 18 years ago, have died from a 9/11-related illness since September, health care advocates told the Daily News. That's a rate of roughly 10 a month. "Every time someone dies, a part of me dies," said 9/11 survivor advocate John Feal, who’s taken on the somber duty of tabulating the grim numbers. “You can have a week without posting a death, and then you can get four in a week. It’s just weird.” Feal said at the current rate, the number of 9/11 illness deaths by September 2019 will either match or exceed 163 — the total accumulated between Sept. 1, 2017, and last Sept. 1, which is considered the highest World Trade Center yearly death toll since the terror attacks. At the same time, increasing numbers of victims suffering from the toxic effects of the terror attacks and the recovery effort at Ground Zero are applying for compensation from the federal September 11th Victim Compensation Fund to offset treatment and living expenses. By the end of November, 41,729 compensation eligibility claims were filed with the VCF — 3,000 more than the 38,502 victims who filed claims by the end of August, or 1,000 a month. Each Sept. 11, Feal adds the names of those who died of a 9/11 illness during that year on his Wall of Heroes in Nesconset, L.I. Everyone listed was either near the WTC when it was destroyed or worked on the recovery effort, and sought treatment through the WTC health program, dying of an illness treated by the program. “Every time someone dies of a 9/11 illness, that’s a family suffering,” said Feal. “But there is such a lack of empathy for the 9/11 community.” Feal and other 9/11 health care advocates plan to turn 2019 into the year of the WTC survivor. Beginning in January, he and a team of 9/11 survivors plan to descend on Washington, D.C., to get VCF extended. The $7.3 billion fund is slated to expire in 2020, but so many victims have been requesting compensation there are concerns the fund will run out money before the deadline.
Two of a kind: China's first pet cloning service duplicates star pooch (Reuters) - Juice is a one-foot tall canine wonder who has starred in dozens of Chinese film and television productions. As he gets older and his illustrious career peaks, his Beijing-based master has one wish for the mutt - to live on. Maybe forever. A mongrel stray adopted off the streets, the nine year-old Juice — or “Guozhi” in Mandarin — is unable to reproduce since he was neutered from an early age. But his master, animal trainer He Jun, wants to continue his star pooch’s image by making a genetic clone. “Juice himself is a piece of intellectual property with social influence,” said He. To achieve that, He went to Sinogene, China’s first biotech company to provide pet cloning services. Sinogene made headlines when it successfully cloned a gene-edited beagle in May last year. A month later, it launched commercial cloning services. For at least 380,000 yuan ($55,065), pet owners can clone their pets. Sinogene’s CEO Mi Jidong said the company’s pet cloning business is in its initial stages, but he plans to expand services to eventually include gene editing. “We’ve discovered that more and more pet owners want their pets to accompany them for an even longer period of time,” said Mi. China’s biotech industry is growing rapidly and, compared with similar enterprises in the West, faces relatively few regulatory barriers. Earlier this year, a Shanghai lab produced the world’s first monkey clones, two long-tailed macaques. More controversially, He Jiankui of China’s Southern University of Science and Technology last month claimed he used gene-editing technology to alter the embryonic genes of twin girls.
U.S. judge limits evidence in trial over Roundup cancer claims (Reuters) - A federal judge overseeing lawsuits alleging Bayer AG’s glyphosate-based weed killer causes cancer has issued a ruling that could severely restrict evidence that the plaintiffs consider crucial to their cases. U.S. District Judge Vince Chhabria in San Francisco in an order on Thursday granted Bayer unit Monsanto’s request to split an upcoming trial into two phases. The order initially bars lawyers for plaintiff Edwin Hardeman from introducing evidence that the company allegedly attempted to influence regulators and manipulate public opinion. Thursday’s order applies to Hardeman’s case, which is scheduled to go to trial on Feb. 25, and two other so-called bellwether trials which will help determine the range of damages and define settlement options for the rest of the 620 Roundup cases before Chhabria. But Hardeman’s lawyers contended that such evidence, including internal Monsanto documents, showed the company’s misconduct and were critical to California state court jury’s August 2018 decision to award $289 million in a similar case. The verdict sent Bayer shares tumbling though the award was later reduced to $78 million and is under appeal. Under Chhabria’s order, evidence of Monsanto’s alleged misconduct would be allowed only if glyphosate was found to have caused Hardeman’s cancer and the trial proceeded to a second phase to determine Bayer’s liability. Bayer denies allegations that glyphosate causes cancer, saying decades of independent studies have shown the world’s most widely used weed killer to be safe for human use. But the company faces more than 9,300 U.S. lawsuits over Roundup’s safety in state and federal courts across the country. Bayer in a statement welcomed Chhabria’s decision.
Certified organic grains- Certifiably not, prosecutors say - -Prosecutors say thousands of individuals and businesses were victims of a large-scale scheme in which ordinary corn and soybeans were fraudulently marketed nationwide as "certified organic." The U.S. Attorney's Office in Cedar Rapids, Iowa, said in a filing Wednesday that potentially "tens of thousands" were defrauded by Randy Constant and his associates into paying a premium for products that they didn't want. Constant, of Chillicothe, Missouri, and three others have pleaded guilty and are awaiting sentencing. Constant, who owned an Iowa grain brokerage, acknowledged that he sold $142 million worth of corn, soybeans and wheat over a 7 ½ year period that wasn't organic despite his representations. Constant was aware that most of his product was grown using non-organic methods. The buyers included companies that processed the grain into other products that were marketed as organic.
UN Backs Seed Sovereignty as Defense Against Multinational-Led GMO Projects -- On December 17, the United Nations General Assembly took a quiet but historic vote, approving the Declaration on the Rights of Peasants and other People Working in Rural Areas, by a vote of 121-8 with 52 abstentions. The declaration, which was the product of some 17 years of diplomatic work led by the international peasant alliance La Via Campesina, formally extends human rights protections to farmers whose “seed sovereignty” is threatened by government and corporate practices. “As peasants we need the protection and respect for our values and for our role in society in achieving food sovereignty,” said Via Campesina coordinator Elizabeth Mpofu after the vote. Most developing countries voted in favor of the resolution, while many developed country representatives abstained. The only “no” votes came from the United States, United Kingdom, Australia, New Zealand, Hungary, Israel, and Sweden. “To have an internationally recognized instrument at the highest level of governance that was written by and for peasants from every continent is a tremendous achievement,” said Jessie MacInnis of Canada’s National Farmers Union. The challenge now, of course, is to mobilize small-scale farmers to claim those rights, which are threatened by efforts to impose rich-country crop breeding regulations onto less developed countries, where the vast majority of food is grown by peasant farmers using seeds they save and exchange. The loss of seed diversity is a national problem in Zambia. “We found a lot of erosion of local seed varieties,” Juliet Nangamba, program director for the Community Technology Development Trust, told me in her Lusaka office. She is working with the regional Seed Knowledge Iniatiave (SKI) to identify farmer seed systems and prevent the disappearance of local varieties. “Even crops that were common just ten years ago are gone.” Most have been displaced by maize, which is heavily subsidized by the government. She’s from Southern Province, and she said their survey found very little presence of finger millet, a nutritious, drought-tolerant grain far better adapted to the region’s growing conditions.
Climate Change Harming Agriculture, India’s Wheat Production Could Fall By 23%: Ministry - The effects of climate change and increasing pollution cause direct harm not just to the public, but also to the health of agricultural crops. The ministry of agriculture has said in its written response to a parliamentary committee that crops such as paddy, wheat, maize, sorghum, mustard, potato, cotton and coconut are likely to be adversely affected by climate change. The ministry told the parliamentary committee headed by veteran BJP leader Murli Manohar Joshi that wheat production will decrease by 6-23% by 2050 if effective steps are not taken in a timely manner. Wheat production could decrease by 6,000 kilos for every 1°C increase in temperature.The ministry also told the committee that by 2050, the production of maize could fall by 18%. But if appropriate steps are taken, its production could actually be increased by 21%. Production of paddy could fall by 4-6% by 2020 due to climate change. But with the right intervention, paddy production could also be increased by 17-20%. The parliamentary committee headed by Joshi has prepared the 30th report on ‘Demonstrating National Action Plan on Climate Change’. The National Action Plan on Climate Change (NAPCC) includes eight “national missions,” one of which is sustainable agriculture.While preparing the report, the committee had requested data of the various agricultural programmes in effect as well as information on how many were active and to what degree. The committee said that the entire planet is affected by climate change, because of which agriculture has been quite adversely affected.Climate change can adversely affect the quality of fodder. With the increase of carbon dioxide, there is a corresponding decrease in the amount of protein, zinc, iron and other minerals in grains. The production of potatoes could decrease by 2.5% by 2020, 6% by 2050 and 11% by 2080. Soybean is, however, predicted to fare well in the future with its production likely to increase by 8-13% from 2030 to 2080.
Florence bathed NC in raw sewage. New figures show it was even worse than we thought -As Hurricane Florence was soaking the state in September, local creeks and rivers were swirling with germs, chemicals, sewage and other filth from sources that are usually stored safely and not a threat to public health. Polluted flood waters swamped coal ash ponds at power plants. Rising waters engulfed private septic systems in back yards. The unwholesome mix inundated hog waste lagoons on farms. In some cases these waste-handling facilities took on so much water they experienced structural damage and partially collapsed, disgorging their contents into the flood. Some 121 million gallons of untreated and partially treated sewage washed out at more than 200 waste water treatment systems.Some backed up and bubbled out of manhole covers, and some was deliberately released to prevent backups and overflows. The bilge was disgorged in nearly 600 separate incidents, flowing into streets, fields and waterways. The biggest of the spills released 17 million gallons in Troy over multiple days when an overflow-basin wall breached during flooding.The total volume is equivalent to 200 Olympic size swimming pools of sewage. And it is about 28 percent more feces, urine, dishwater and other household waste expelled into the environment than the agency had previously estimated and reported to the state legislature in mid-November. The waste water plants were disabled by flooding, mechanical problems, electrical failures and malfunctioning emergency backup generators, Gregson said. Two weeks after Florence, eight waste water plants were down and nine were partially operational.
Is habitat restoration actually killing plants in the California wildlands? -In 2014, plant biologists with the California Department of Agriculture reported an alarming discovery: native wildflowers and herbs, grown in nurseries and then planted in ecological restoration sites around California, were infected with Phytophthora tentaculata, a deadly exotic plant pathogen that causes root and stem rot. While ecologists have long been wary of exotic plant pathogens borne on imported ornamental plants, this was the first time in California that these microorganisms had been found in native plants used in restoration efforts. Their presence in restoration sites raised the frightening possibility that ecological restoration, rather than returning disturbed sites to their natural beauty, may actually be introducing deadly plant pathogens, such as those related to Sudden Oak Death, into the wild.New work by a UC Berkeley team in the College of Natural Resources shows for the first time just how widespread and deadly the threat of pathogens from restoration nurseries may be. The team surveyed five native plant nurseries in Northern California and found that four harbored exotic, or non-native, Phytophthora pathogens. Strains of the pathogens from native plant nurseries were shown to be at times more aggressive than strains found in the wild, and some of them are rapidly developing resistance to the fungicides that can be used to control them, the researchers found.
California Monarch Butterfly Population Down 86 Percent in One Year -- California's coast, from Bolinas to Pismo Beach, is a popular overwintering site for the western population of monarch butterflies. Historically, you could find millions of the orange and black winged invertebrates around this time of year, using coastal eucalyptus trees as shelter.But there’s been a troubling trend over the past few decades. Each year, fewer monarchs have been showing up to overwinter on the state's coast, according to preliminary numbers from the Xerces Society, an environmental conservation nonprofit. The group's annual Thanksgiving count found the 2018 population of these butterflies is down to 20,456 compared to 2017's 148,000. That's a one year, 86 percent decline."It's been hard for me, as I remember the millions of monarchs of the 1980s," said Mia Monroe, a Bay Area-based Xerces Society member who helps lead California's monarch population count. "We only have less than one percent of the monarchs that we once historically had."Counts typically fluctuate from year to year, but Monroe said this year's dramatic drop is breathtaking. Volunteers, like Monroe, counted the butterflies at 97 sites across California, according to the Xerces Society. There are several historical overwintering sites in the Bay Area for monarchs. Some of the more popular locations are in Marin County near the communities of Bolinas, Stinson Beach and Muir Beach. The exact cause for this year's sharp decline is not known, but Xerces scientists and researchers with U.C. Davis, Tufts University and Washington State University did observe a low population of the monarchs at the beginning of their breeding season last spring. "We think that it has to do with habitat loss, the increasing high use of pesticides and the loss of the milkweed populations, which is the plant the monarch needs to lay its eggs on," Monroe said.
These species went extinct in 2018. More may be doomed to follow in 2019. - They'd been on our planet for millions of years, but 2018 was the year several species officially vanished forever. Three bird species went extinct this year, scientists said, two of which are songbirds from northeastern Brazil: The Cryptic Treehunter (Cichlocolaptes mazarbarnetti) and Alagoas Foliage-gleaner (Philydor novaesi), according to a report from the conservation group BirdLife International. According to BirdLife, the other extinct bird is Hawaii's Po'ouli (Melamprosops phaeosoma), which has not been seen in the wild since 2004 (the same year the last captive bird died). A disturbing trend is that mainland species are starting to go extinct, rather than island species. An additional species of bird – the Spix’s macaw, which was made famous in the 2011 animated movie "Rio" – was declared extinct in the wild. Only a few dozen captive Spix's macaws are alive. That species was wiped out in the wild because of deforestation and other factors such as the creation of a dam and trapping for wild trade. A few other bird species that are near extinction have such exotic names as the New Caledonian Lorikeet and the Pernambuco Pygmy-owl. Beyond birds, other animals such as the vaquita (a dolphin-like porpoise) and the northern white rhino are near the end. "Less than 30 vaquitas remain in the wild, and entanglement in gill nets is driving the species toward extinction." The last male northern white rhino died at a wildlife sanctuary in Kenya last March. Only two females are left. In the USA, only 40 endangered red wolves remain in the wild, and the population could go extinct within eight years, according to a report released last year by the U.S. Fish and Wildlife Service. Earth "is now in the midst of its sixth mass extinction of plants and animals – the sixth wave of extinctions in the past half-billion years," according to the Center for Biological Diversity. The group said, "We're currently experiencing the worst spate of species die-offs since the loss of the dinosaurs 65 million years ago. "Although extinction is a natural phenomenon, it occurs at a natural 'background' rate of about one to five species per year. Scientists estimate we're now losing species at 1,000 to 10,000 times the background rate." In the past 500 years, the center estimates that about 1,000 species have gone extinct, from the woodland bison of West Virginia and Arizona's Merriam's elk to the Rocky Mountain grasshopper, passenger pigeon and Puerto Rico's Culebra parrot.
Small Colorful Fish Gets Endangered Species Protection -- A small, bright fish found in Tennessee, Georgia and Alabama will start the new year on the Endangered Species list, the Center for Biological Diversity (CBD) reported Thursday. The trispot darter fish was thought to be entirely extinct in Alabama for more than 50 years until it was discovered in 2008 in Little Canoe Creek. Now, 10 years later, the U.S. Fish and Wildlife Service (FWS) has finalized protections for the 1.5 inch fish, earmarking more than 180 miles of river as "critical habitat." "Protecting the trispot darter under the Endangered Species Act will safeguard this colorful little fish for future generations and help protect water quality for nearby communities," CBD senior scientist Tierra Curry said in the CBD press release. The trispot darter has lost 80 percent of its historic range. It now lives in the Coosa River watershed in northern Alabama, northern Georgia and southeast Tennessee and the Conasauga River watershed in Georgia and Tennessee. Of the four individual rivers it calls home, only one, the Little Canoe Creek, is considered healthy.
In shutdown, national parks transform into Wild West — heavily populated and barely supervised — The government shutdown has left America’s national parks largely unsupervised. No one is at the gate. No one is collecting a fee. The visitor centers are closed. There are some law enforcement and emergency personnel on site, but certainly nothing as standard as a park ranger who can answer a question. People are streaming into the parks, enjoying the free access, but they’re finding trash cans overflowing and restrooms locked. Vault toilets are not serviced, and there’s hardly a flush toilet to be found anywhere. If nature calls — well, the woods are over that way. At Joshua Tree National Park, in particular, conditions are deteriorating. “Once those port-a-potties fill up, there’s no amount of cleaning that will save them,” said Sabra Purdy, who along with her husband, Seth, owns the rock-climbing guide service Cliffhanger Guides in the town of Joshua Tree. “At that point, I think I’m going to have to tap out.” The 40-year-old Purdy is among dozens of volunteers who have been collecting garbage, cleaning bathrooms and generally keeping an eye on the park. Local business owners and park supporters are donating toiletries and cleaning supplies. “People are doing it because we love this place and we know how trashed it’ll get if we don’t,” she said.
5 Iconic National Parks Face 'Nightmare Scenario' Following Gov't Shutdown -- One-and-a-half-weeks in, the government shutdown is already taking a toll on some of country's most iconic national parks. The parks have remained largely open to the public despite the fact that most of the rangers and other support staff who maintain them are among the hundreds of thousands of government workers now on furlough, and the unsupervised access has led to a buildup of trash and a break-down in visitor behavior, The Associated Press reported Tuesday. During many previous shutdowns, the parks had closed their gates, but the Trump administration chose to keep them open. "We're afraid that we're going to start seeing significant damage to the natural resources in parks and potentially to historic and other cultural artifacts," Senior Budget Director of the nonprofit National Parks Conservation Association John Garder told The Associated Press. "We're concerned there'll be impacts to visitors' safety. It's really a nightmare scenario," Garder said. The shutdown plan does give park superintendents the power to close down certain sites or areas if garbage or other problems pose too great a danger to humans or wildlife, National Park Service spokesman Jeremy Barnum told The Associated Press by email. And some parks have already decided to do just that. Here is a breakdown of how the shutdown has already impacted some beloved parks.
The Terrible Destruction of Pinyon-Juniper Forests Two previous waves of pinyon-juniper deforestation have swept the Great Basin. A third wave is underway. These forests naturally cloak the regions’ arid mountains and slopes. Explorer journals, Mining District records and Interior’s own General Land Office survey records provide irrefutable evidence that pinyon-juniper historically occupied much of the landscape. Traces of old stumps, charred wood and charcoal kilns persist to this day. White settlement and exploitation were fueled by pinyon-juniper wood. Trees were clearcut over vast areas – even their roots dug out – to produce charcoal to process gold and silver ore. The second wave of deforestation followed WWII. In the 1950s-1980s clearcutting, chaining (a ship’s anchor chain is strung between two bulldozers running parallel violently uprooting trees), herbiciding and burning took place. Trees suffered much the same fate as sage did in the government funded War on sagebrush that Rachel Carson wrote of in Silent Spring. Bleak monoculture plantings of exotic crested wheatgrass for livestock forage often followed the carnage – rewarding the same ranchers who had depleted the public lands for private gain. BLM proudly stated the tree destruction was being done for cattlemen. Now sage-grouse are being used as cover for the third big wave of deforestation, as federal agencies try to distract the public from the urgent need to list sage-grouse under the ESA. Grouse have been weaponized, and pitted against the pinyon jay, Clark’s nutcracker, mountain bluebird, black-throated gray warbler, ferruginous hawk, pinon mouse and other forest denizens. Pinyon jay populations have already precipitously declined by an alarming 85%, primarily due to deforestation. Instead of taking better care of the existing sagebrush habitats and protecting them from grazing, development and flammable cheatgrass expansion, or admitting that forested areas are the least likely to burn, the BLM plans focused on radical deforestation. They never considered that forests of younger trees are in the process of recovering from the previous waves of deforestation, re-occupying persistent pinyon-juniper sites. Instead the plans were based on tearing up the Great Basin with a mind-boggling 10,000 linear miles of fuelbreaks devoid of trees or sage, but full of grassy forage plants.
Bolsonaro and the Rainforest - Newly inaugurated Brazilian president Jair Bolsonaro lives up to the label “Trump of the tropics” in many ways, including his misogynistic comments and a racist streak that surfaces in his disparaging treatment of minorities. But the similarity that is likely to have the broadest and most destructive effects is his disregard of the danger of planetary catastrophe through climate change. The presidency of Brazil is an especially important office in this regard because of its power over the fate of most of the Amazon rainforest. Bolsonaro has long made clear his intention to destroy more of the forest, supposedly in the name of economic development and with visions of ever more cattle ranches and soybean farms. He has wasted no time in using his powers to that end. On his first full day in office, he issued an executive order giving the agriculture ministry authority to dispose of lands claimed by indigenous peoples. This measure clearly is a first step toward greater exploitation of the Amazon region by agribusiness. Besides reflecting Bolsonaro’s lack of concern for the environment, it also reflected his disdain for the native peoples of the region. He sees no value in protecting their cultures and way of life. The Amazon is the world’s largest rainforest. It is an enormous carbon sink that breathes in carbon dioxide and breathes out twenty percent of the world’s oxygen. There is no other single ecosystem that is as important in preventing a runaway planetary greenhouse effect. Although parts of the rainforest are in other South American countries, sixty percent of it is in Brazil. Earlier deforestation has meant that the great carbon sink already is absorbing significantly less carbon than it did as recently as a decade ago. The current precariousness of the Amazon rainforest stems not only from the cutting and burning that already has taken place but also from feedback loops in which reduction of the forest sets in train natural processes that lead to further reduction. As the term “rainforest” might suggest, the jungle makes much of its own weather. Less rainforest means less rain. The biological richness is confined to a thin layer, and the soil underneath is mostly poor and infertile. Would-be growers of crops and of grass for livestock come to realize that. But by the time such realization is great enough to have political impact, it may be too late to save the rainforest.
One Species Loves Our Climate-Wrecking Ways: Fire Ants! - The red imported fire ant is one of the world’s mostinvasive species. Its sting delivers a burning poison that kills living tissue. Together groups of ants devour deer fawns, baby birds, reptiles, and almost any other source of protein they can get their mandibles on. They form acres of crisscrossing tunnels with thousands of cooperative workers. And their territory has steadily been spreading. The fire ant’s story is in some ways the opposite of what the insect world as a whole is experiencing. Measuring bug populations is an imperfect science—they’re small, mobile, and hidden. But they are undoubtedly shrinking, due to habitat destruction, climate change, and other human-driven trends. A German study found a 75 percent decline in insect biomass between 1989 and 2017. Another German study found that the butterfly population decreased from 117 species in 1840 to 71 species in 2013. And a 2014 Sciencereview found that of the invertebrate species that are actively being monitored, the majority have decreased by almost half. But for the fire ant, this mass die-off is a blessing. They are experts at filling in the ecological gaps where other organisms have disappeared. That can mean colonizing areas where other insects have slowly died away, or blossoming in the aftermath of a big disaster, like a flood, or expanding their turf after a smaller upset, like a lot of typical human landscaping. “Humans are a fire ant’s best friend,” says Walter Tschinkel, a biology professor at Florida State University and author of The Fire Ants. “In the south, if you have a lawn, you have created a lovely habitat for fire ants.” Fans of warm temperatures, the ants build their homes around sprinklers and irrigation channels that allow them to set up outposts in dry climates. With human-driven climate change not only heating up the world but exacerbating hurricanes and wildfires, fire ants are primed to reap their rewards. They are steadily expanding their territory northward and, in the US, westward.
Listening to Nature: How Sound Can Help Us Understand Environmental Change - (audio) Our hearing tells us of a car approaching from behind, unseen, or a bird in a distant forest. Everything vibrates, and sound passes through and around us all the time. Sound is a critical environmental signifier. Increasingly, we are learning that humans and animals are not the only organisms that use sound to communicate. So do plants and forests. Plants detect vibrations in a frequency-selective manner, using this “hearing” sense to find water by sending out acoustic emissions and to communicate threats. We also know that clear verbal communication is critical, but is easily degraded by extraneous sounds, otherwise known as “noise.” Noise is more than an irritant: It also threatens our health. Average city sounds levels of 60 decibels have been shown to increase blood pressure and heart rate and induce stress, with sustained higher amplitudes causing cumulative hearing loss. If this is true for humans, then it might also be true for animals and even plants.Conservation research puts a heavy emphasis on sight – think of the inspiring vista, or the rare species caught on film with camera traps – but sound is also a critical element of natural systems. Sound is a powerful indicator of environmental degradation and an effective tool for developing more sustainable ecosystems. We often hear changes in the environment, such as shifts in bird calls, before we see them. The United Nations Educational, Scientific and Cultural Organization (UNESCO) has recently formed a sound charter to promote awareness of sound as a critical signifier in environmental health and urban planning. I have spent decades making field recordings in which I create a setup before dawn or dusk, then lie on the ground listening for several uninterrupted hours. These projects have taught me how the density of the air changes as the sun rises or sets, how animal behavior shifts as a result, and how all of these things are intricately linked.
Prosecutors say California utility company PG&E could face murder charges for wildfires - California prosecutors are poised to charge the state's largest utility company with an array of crimes, including murder and manslaughter if it is found responsible for starting two recent deadly wildfires.California Attorney General Xavier Becerra said in a new filing that if Pacific Gas & Electric Co., which provides electricity to about 16 million customers, was found to have mismanaged or failed to maintain power lines, it would face a wide range of charges.Prosecutors wrote they were prepared to pursue a wide range of charges, including minor offenses, felonies or misdemeanors, and implied-malice murder and involuntary manslaughter.In a statement responding to the filing, the company said it was dedicated to assessing its systems and looks forward to recovery from the deadly wildfires."PG&E's most important responsibility is public and workforce safety. Our focus continues to be on assessing our infrastructure to further enhance safety and helping our customers continue to recover and rebuild," a spokesman told the San Francisco Chronicle.The filing is the latest in a long legal battle concerning the company that has been overseen by US District Judge William Alsup who asked last month that the utility company explain whether "reckless operation or maintenance of PG&E power lines" sparked any wildfires. The company was found responsible for 17 fires last year, and in 11 instances investigators found agents had failed to comply with guidelines for installing power lines around vegetation, one of the charges mentioned in the new filing.
PG&E Could Face Murder Charges for California’s Wildfires Yves Smith - Even though readers and members of the public often express their outrage as to what banks have gotten away with, there’s a good case to be made that PG&E has them beat. How many real companies have been the lead bad guys in a movie? And PG&E has decades of misconduct after the case highlighted in Erin Brockovich, where the chemical discharge from a PG&E plant got into the water table of a neighboring community, and one of the compounds was highly carcinogenic. PG&E lied to the residents, telling them the chemical was beneficial to their health! For starters, the mere threat of an indictment is a death sentence for a financial firm. Many customers are prohibited from doing business with a company that had been found guilty of criminal conduct; a high proportion would flee when an indictment was filed, both to minimize controversy and to avoid being caught in a rush for the exits if a case were to be loss or the alleged perp pleaded guilty in a settlement. That’s why in the rare cases when the US has charged a large financial firm, it’s been against a subsidiary. But PG&E is even more too big to fail than big banks. The giant utility can’t be put out of business because so many communities depend on it. Nevertheless, the murder charges are a new angle. If AG Beccera isn’t simply trying to convince the public that he takes PG&E’s misdeeds seriously, perhaps he (and this would presumably also mean key power factions in California) have decided that PG&E needs a whole-scale shakeup, which included replacing the CEO and other key executives and much of the board, and the suits are they way to make sure that gets done. One influential CalPERS stakeholder had taken to regularly e-mailing me about PG&E horrors. In sending a November 2018 San Francisco Chronicle article, California regulator lays groundwork for PG&E bailout, he noted: PG&E CEO Geisha Williams is a Marcie Frost clone. Williams was a mediocre 2007 diversity-hire from Florida responsible for electric infrastructure before becoming CEO. She should be wearing denim at the Women’s Prison at Chowchilla; instead she’ll probably get another $8 Million dollar payday… But even so, how long would it take to turn around such a badly mismanaged company? And how would the new leadership stare down demands to maintain profits, which amount to insisting that the current dangerous skimping on maintenance continues? Here again, court orders may be key to forcing behavior changes.
Devastating Wildfires Force California’s Largest Utility To Plan Sale Of Gas Assets - Facing staggering liability costs for its potential culpability in a series of deadly wildfires, the parent company of California's largest utility is exploring whether to sell off a major part of the company, NPR has learned. Internally, Pacific Gas & Electric has dubbed this strategy "Project Falcon." Under the plan, the company would sell its natural gas division this spring. After years of deadly errors and safety violations, the utility giant is looking for ways to cover liability costs and avoid bankruptcy, a senior company official and a former employee with knowledge of the plan tell NPR. All net proceeds from the sale of PG&E's gas division would be used to set up a fund to pay billions of dollars in potential claims from wildfires, the sources said. They requested anonymity because they were not authorized to speak publicly. The company also is exploring selling key real estate assets, including its San Francisco headquarters, and moving its operations elsewhere in the Bay Area, the sources say. On Friday, the company announced it would be"reviewing structural options" to best position the company to meet customer and operational needs. In addition, PG&E said it is searching for new directors for its board to "augment its existing expertise in safety."
PG&E Shares Plunge 30% On Reports Of Possible Bankruptcy Filing - Hours after NPR reported that troubled California utility PG&E was weighing a sale of its natural gas division to cover potentially billions of dollars in fines that could result if its equipment is found to have caused the deadly and destructive wildfires in southern and northern California late last year and in 2017, Reuters followed up with a report that the company was weighing a(nother) bankruptcy filing for some or all of its business to protect itself from what could be billions of dollars in fines. The report sent shares of the utility plunging 27% in late-day trading, sending them back toward their 15-year lows reached in November. While the bankruptcy filing - which would be the company's second after a similar chain of events left the company filing for Chapter 11 in 2011 - is far from assured, it's one of several measures under consideration as the company braces for fines that could far exceed its insurance coverage, as well as dozens of lawsuits by victims who were impacted by the fires. There's still the possibility that the utility is effectively bailed out by California lawmakers, who could pass a law allowing it to pass on costs associated with the fires to its customers. The company is considering the move as a contingency, in part because it will soon take a significant financial charge for the fourth quarter of 2018 related to liabilities from the blazes.
Departed Interior Sec. Zinke Under Investigation by DOJ -- The Justice Department is looking into whether former Interior Secretary Ryan Zinke lied to investigators at the Department of Interior, The Washington Post reports. Anonymous sources tell the Post that investigators at the Interior's inspector general's office raised the issue with the DOJ after suspecting Zinke may have lied during questioning over his real estate deals in Montana and his review of a Native American casino project in Connecticut. The Justice Department has not yet decided whether Zinke should face legal action, the Post reports. Zinke, who left the agency Wednesday following a series of high-profile scandals, denied the allegations to the Associated Press, blaming conservation groups for creating a "playbook" designed to use "frivolous allegations, sources, rumors, innuendo and false accusations" to boot him and other Cabinet members from office. As reported by The Washington Post:"Zinke, who submitted his resignation last month, had faced intense pressure to step down because of the probes into his conduct, though President Trump had soured on him for other reasons, too, according to one of the people familiar with the matter. In particular, this person said, Trump was upset Zinke would not challenge Sen. Jon Tester (D-Mont.) in last year's election and over how Zinke handled the administration's plan to expand offshore drilling.Last January, Zinke flew to Florida and, without consulting the White House, announced in a news conference with then-Gov. Rick Scott (R-Fla.) that Interior would exempt the state from offshore drilling. The move raised ethics questions, along with an outcry from other governors whose coastal states were affected by the plan." The Associated Press reported that Zinke blamed conservation groups such as Montana Conservation Voters and Western Values Project for making it "impossible for Zinke and other Trump Cabinet members to serve." "A representative of Montana Conservation Voters Education Fund, Whitney Tawney, noted that the group had endorsed Zinke when he was a state lawmaker but expected more out of him in terms of protecting natural resources.
Rise of carbon dioxide–absorbing mountains in tropics may set thermostat for global climate - Hate the cold? Blame Indonesia. It may sound odd, given the contributions to global warming from the country’s 270 million people, rampant deforestation, and frequent carbon dioxide (CO2)-belching volcanic eruptions. But over much longer times, Indonesia is sucking CO2 out of the atmosphere. Many mountains in Indonesia and neighboring Papua New Guinea consist of ancient volcanic rocks from the ocean floor that were caught in a colossal tectonic collision between a chain of island volcanoes and a continent, and thrust high. Lashed by tropical rains, these rocks hungrily react with CO2 and sequester it in minerals. That is why, with only 2% of the world’s land area, Indonesia accounts for 10% of its long-term CO2 absorption. Its mountains could explain why ice sheets have persisted, waxing and waning, for several million years (although they are now threatened by global warming). Now, researchers have extended that theory, finding that such tropical mountain-building collisions coincide with nearly all of the half-dozen or so significant glacial periods in the past 500 million years. “These types of environments, through time, are what sets the global climate,” said Francis Macdonald, a geologist at the University of California, Santa Barbara, when he presented the work this month at a meeting of the American Geophysical Union in Washington, D.C. If Earth’s climate has a master switch, he suggests, the rise of mountains like Indonesia’s could be it.
Ocean-Saving Device to Clean Up Great Pacific Garbage Patch Breaks, Will Return to Port - An ocean-saving device deployed in September to clean up the Great Pacific Garbage Patch has malfunctioned and will have to be towed back to port. During a routine inspection on Dec. 29, crew members discovered that a 60-foot end section of one of the booms that scoops up trash from the surface of the ocean had detached, 23-year-old inventor Boyan Slat wrote in a Jan. 1 blog post. "Although it is too early to confirm the cause of the malfunction, we hypothesize that material fatigue (caused by about 106 load cycles), combined with a local stress concentration, caused a fracture in the HDPE floater," Slat wrote.The young inventor noted that the break in the device did not pose any danger for the crew, environment or passing marine traffic.The team said it will be returning to port to "repair and upgrade" the device that is dubbed "Wilson" by the crew after the volleyball in the Tom Hanks movie "Castaway." They will also be bringing back more than 4,400 pounds of plastic collected from the garbage patch. Slat said he and his team are "quite bummed" that they are required to return to port ahead of schedule but are optimistic for continued success. "We also realize that setbacks like this are inevitable when pioneering new technology at a rapid pace," he wrote.
Eight trillion tonnes of Arctic ice lost since 1971 - We have just completed a study that inventories Arctic land ice loss since 1971. It is available open-access in the current issue of Environmental Research Letters1. While we scientists have a pretty good idea of the health — or mass balance — of glaciers and ice sheets — or land ice — since the advent of satellite altimetry in the early 1990s, there is a need for better understanding of land ice health during the pre-satellite era. Our new study estimates the annual ice loss from all glacierized regions north of 55°N between 1971 and 2017.We use in situ data – mass balance measurements from a handful of continuously monitored glaciers – as indicators for the health of land ice in seven Arctic regions. These hard-fought in situ data are scarce, they are only measured at between 20 and 44 Arctic glaciers every year. Extrapolating these data to entire regions is statistically challenging without additional information. Fortunately, independent estimates of regional mass balance are available from satellite gravimetry during the 2003 to 2015 period. This permits calibrating in situ and satellite-derived mass balance estimates during the satellite era. This makes our pre-satellite era estimates fairly robust. During the 41 years assessed, we estimate that approximately 8,300 Gt of Arctic land ice was lost. It is difficult to contextualize this magnitude of ice loss. The flow of Niagara Falls – which is approximately 2400 m3 per second or about 75 km3 per year – is only equivalent to about half this volume (3500 km3) over the 1971-2017 period. The total Arctic land ice loss that we document represents 23 mm of sea-level rise since 1971. Greenland is by far the largest contributor (10.6 mm sea-level equivalent), followed by Alaska (5.7 mm sea-level equivalent) and then Arctic Canada (3.2 mm sea-level equivalent).
Melting Arctic ice is now pouring 14,000 tons of water per second into the ocean, scientists find - A new scientific survey has found that the glaciers of the Arctic are the world’s biggest contributors to rising seas, shedding ice at an accelerating rate that now adds well over a millimeter to the level of the ocean every year. That is considerably more ice melt than Antarctica is contributing, even though the Antarctic contains far more ice. Still, driven by glacier clusters in Alaska, Canada and Russia and the vast ice sheet of Greenland, the fast-warming Arctic is outstripping the entire ice continent to the south — for now. However, the biggest problem is that both ice regions appear to be accelerating their losses simultaneously — suggesting that we could be in for an even faster rate of sea-level rise in future decades. Seas are rising by about three millimeters each year, according to NASA. That’s mainly driven by the Arctic contribution, the Antarctic and a third major factor — that ocean water naturally expands as it warms. For Arctic ice loss, “the rate has tripled since 1986,” said Jason Box, first author of the new study and a scientist at the Geological Survey of Denmark and Greenland. “So it clearly shows an acceleration of the sea-level contribution.” “Antarctica will probably take over at some point in the future, but during the past 47 years of this study, it’s not controversial that the Arctic is the largest contribution of land ice to sea-level rise,” he said. The Arctic is also losing floating sea ice at a rapid pace, but that loss does not contribute substantially to rising seas (though it has many other consequences). Sea ice losses closely match what is happening on land, which makes sense because both phenomena are being driven by the fast warming of the atmosphere in the Arctic, which has heated up at a rate much faster than seen in lower latitudes. Warming seas are also driving some of the ice loss.
Melting Ice Sheets Release Tons Of Methane Into Atmosphere -- Melting ice sheets release tons of methane into the atmosphere, a study finds. The Greenland Ice Sheet emits tons of methane according to a new study, showing that subglacial biological activity impacts the atmosphere far more than previously thought.An international team of researchers led by the University of Bristol camped for three months next to the Greenland Ice Sheet, sampling the meltwater that runs off a large catchment (> 600 km2) of the Ice Sheet during the summer months.As reported in Nature, using novel sensors to measure methane in meltwater runoff in real time, they observed that methane was continuously exported from beneath the ice. They calculated that at least six tons of methane was transported to their measuring site from this portion of the Ice Sheet alone, roughly the equivalent of the methane released by up to 100 cows. Professor Jemma Wadham, Director of Bristol’s Cabot Institute for the Environment, who led the investigation, said: “A key finding is that much of the methane produced beneath the ice likely escapes the Greenland Ice Sheet in large, fast flowing rivers before it can be oxidized to CO2, a typical fate for methane gas which normally reduces its greenhouse warming potency.” Methane gas (CH4) is the third most important greenhouse gas in the atmosphere after water vapour and carbon dioxide (CO2). Although, present in lower concentrations that CO2, methane is approximately 20-28 times more potent. Therefore smaller quantities have the potential to cause disproportionate impacts on atmospheric temperatures.
Carbon Sinks - Far more carbon is stored, “sunken” in the soil than in the atmosphere and in all living bodies combined. Whenever forest or grassland or wetland is destroyed, and the soil dried out or ripped up, vast amounts of this sunk carbon is released into the atmosphere. (Wetlands destruction is one of the main sources of methane emission; methane is a far more potent greenhouse gas than CO2.) In the same way, to destroy a natural community like a forest or grassland or wetland and replace it with any kind of monoculture or suburbia always means a great emission of carbon contained in the natural network of organisms compared to whatever threadbare monoculture is imposed in place of that network. That’s in addition to all the emissions from the industrial infrastructure within which systems like industrial agriculture are ensconced. (For industrial agriculture: Mining, transportation, oil- and gas-based inputs, farming machinery, transportation, commodity machinery, transportation, food manufacturing, transportation, retailing, transportation, preparation in the residence. We can trace a similar oil/gas/coal infrastructure for industrial “renewables” like wind and solar.) So all “carbon-neutral” claims for industrial systems superimposed over the destruction of natural ecologies are lies. In every case huge amounts of carbon which were sunk in the ground and in natural biomass are emitted to the air, and whatever is imposed in place of the natural order sinks or incarnates only a fraction at best of what the natural ecology used to sink and incarnate. The way to reverse this is:
- 1. Stop destroying what little forest, grassland, wetland still exists. This will halt the destruction of sinks.
- 2. Let these resume the habitats where they naturally would prevail. This will begin to rebuild natural sinks.
- 3. We must transform food production from industrial commodity agriculture which destroys sinks and produces only corporate commodities, from which food for people is then supposed to “trickle down”, to agroecological horticulture.* Organized according to food sovereignty and using agroecology we the people grow abundant wholesome food for ourselves and our community and region, not commodities for globalization. We do so in harmony with natural processes and on the ecologically right kind of land. We disturb the environment far less while producing far more food per acre in terms of both calories and nutrition than industrial monocultures. We use the science of building the soil both for improved food growth and to incorporate the greatest amount of soil organic matter. We can grow food in this way which is truly carbon neutral and even help sink more carbon. The industrial agriculture implicitly or explicitly supported by the whole green capitalism crew never could do this. Quite the extreme opposite.
Green New Deal: what is the progressive plan, and is it technically possible? - Most US voters would support a “Green New Deal”, for the country to transform its infrastructure with a rapid shift to clean energy. But while the idea is gaining attention on Capitol Hill, it lacks key political support.According to a survey from the Yale Climate Change Communicationprogram, 81% of voters backed its description of a Green New Deal.Similar plans vary in detail, but all are inspired by the New Deal that Franklin Delano Roosevelt launched to battle the effects of the Great Depression. The idea was central to the high-profile campaign of Alexandria Ocasio-Cortez, the young Democratic socialist from New York who won a US House seat in November. Ocasio-Cortez and the youth-led Sunrise Movement are encouraging Democrats, who will retake the House majority in January, to produce a blueprint.Their Green New Deal would center around creating new jobs and lessening inequality. Aiming to virtually eliminate US greenhouse gas pollution in a decade, it would be radical compared with other climate proposals. It would require massive government spending.Dozens of Democrats have signaled support, including potential 2020 presidential candidates Bernie Sanders and Cory Booker. This month, New York’s Governor Andrew Cuomo said his state would launch its own Green New Deal, seeking carbon-neutral electricity by 2040. But Nancy Pelosi, Democrats’ nominee to run the House, has not agreed to direct a select committee on climate change to focus on the strategy. With Republicans in control of the White House and Senate, any climate change legislation would be dead on arrival. But supporters of a Green New Deal say Democrats need to lay the groundwork for a plan that could achieve what scientists say is necessary. “If you’re starting to organize on it after you get into power, it’s too late,” said Sunrise Movement founder Varshini Prakash. Scientists say the landmark Paris agreement on climate change, which the US plans to leave, is not strong enough to avoid the worst effects of rising temperatures.
Alexandria Ocasio-Cortez floats 70% tax on wealthy to pay for 'Green New Deal' -- Rep. Alexandria Ocasio-Cortez of New York says her plan to transition the United States away from fossil fuels would require people to "start paying their fair share in taxes."That could mean taxing the wealthiest Americans at a rate of 60-70 percent, the freshman Congresswoman told CBS's "60 Minutes" in an interview scheduled to air on Sunday. Ocasio-Cortez has put forward a "Green New Deal" that includes generating all of the nation's power from renewable sources, building a national smart grid and entirely eliminating industrial greenhouse gas emissions. A proposal from the democratic socialist lawmaker calls for achieving those goals within 10 years.In the "60 Minutes" interview, Ocasio-Cortez acknowledges that taxes would have to rise to underwrite the necessary investments. Asked for a specific proposal, Ocasio-Cortez suggested the plan might require returning to policies that preceded the overhauls of the 1980s, which significantly reduced the top income tax rate."You know, you look at our tax rates back in the '60s and when you have a progressive tax rate system, your tax rate, you know, let's say, from zero to $75,000 may be 10 percent or 15 percent, et cetera," she told "60 Minutes.""But once you get to, like, the tippy tops, on your 10 millionth dollar, sometimes you see tax rates as high as 60 or 70 percent. That doesn't mean all $10 million are taxed at an extremely high rate, but it means that as you climb up this ladder you should be contributing more."The top tax rate dropped to 37 percent following the passage of the 2017 Tax Cuts and Jobs Act.In her written proposal, Ocasio-Cortez previously said "progressive wealth taxes" could be set to fund investments under the Green New Deal. She also suggested imposing taxes on greenhouse gas emissions, tapping the Federal Reserve for credit and having the government take an equity stake in projects. She lost an early battle to establish a Select Committee for a Green New Deal. Speaker Nancy Pelosi has instead announced plans to revive a select committee on climate change that will be chaired by Rep. Kathy Castor, a seasoned lawmaker from Florida.
New Chair of Climate Crisis Committee Owns Shares in Fossil Fuel Fund - House Minority Leader Nancy Pelosi announced on Friday that a dormant global warming committee will be revived in the next session of Congress, and that it will be led by Florida Democratic Rep. Kathy Castor. The new committee, which may not have subpoena or legislative powers, will be called the Select Committee on the Climate Crisis.Castor tweeted on Friday, “We should act with urgency to reduce carbon pollution,” adding that “failure is not an option.”The Florida representative, a member of the Energy and Commerce Committee, has a good environmental voting record, according to the League of Conservation Voters, and has received a relatively small amount of campaign contributions from fossil fuel interests over her six-term career. But Castor’s2017 financial disclosure document shows that she and her husband, Bill Lewis, share an investment worth between $50,001 and $100,000 in a mutual fund comprised mostly of holdings in utility companies that generate power from natural gas, oil, and coal. For a retirement account, the couple purchased shares in the Franklin Utilities Fund—Advisor Class, from July to October of 2017 and earned up to $2,500 in capital gains and dividends from the investment that year.Castor’s office did not provide answers to Sludge’s questions about the representative’s investment. I believe it’s morally unfathomable for our institutions and leaders to be invested in the companies that are responsible for destroying our planet and its people.Varshini Prakash, Founder, Sunrise Movement “It’s troubling that Rep. Castor has personal investments in mutual funds supporting the fossil fuel industry,” Waleed Shahid, communications director of the progressive Justice Democrats, who support an ambitious Green New Deal plan, told Sludge. “There’s a growing movement calling for government, business, and individuals to divest from fossil fuels and we hope Rep. Castor fully joins in the fight to take on Big Oil and Gas executives.”
Economic Growth and Climate Change: Mistaking an Output Variable for an Instrument - Peter Dorman - When I first started arguing against the degrowthers, I thought they were a small, uninfluential fringe, important only because they had a sway over a portion of the left—what we might call the Naomi Klein left. That was then. Today degrowth is entering the mainstream, as can be seen by the latest David Roberts piece in Vox. Roberts reviews a discussion between several economists on the Institute for New Economic Thinking (INET) website. (INET is a Soros-affiliated outfit whose mission is to push economics in a more progressive direction.) The key article is by Enno Schröder and Servaas Storm; using historical data, they test for the potential of decoupling economic growth and carbon emissions, finding the scale of decarbonization we need is incompatible with economic growth—hence the need to reject economic growth as a social objective. A similar perspective is provided by Gregor Semieniuk, Lance Taylor, and Armon Rezai, while a rebuttal comes from Michael Grubb. All three papers are authored or coauthored by important figures in the academic left or center-left, and their point of dispute reflects the expanding influence of the degrowth perspective. If I had more time I’d write up a response in the form of a paper. (Actually I am writing a response, but it will be a book.) For now a blog post will have to do. Here’s what I think these estimable economists are missing:
- 1. Economic growth is not, not, not a policy variable. There is no magic button available to society that delivers a given rate of economic growth, or degrowth for that matter. It’s an outcome of a host of factors, some of which are controllable, others not. Indeed, as we wait for quarterly GDP numbers to be revised several quarters later, we still don’t know what economic growth or contraction we’ve experienced. It is true that politicians often speak of the need to adopt some policy or other for sake of economic growth, but at best they are proposing to push on one of the many factors that influences it. There is no growth dial, and even if there were, twisting it a few notches would have almost no impact on carbon emissions, which need to fall by nearly 100% within two generations.
- 2. It is certainly true that serious action against climate change will require giving decarbonization needs the highest priority. In that sense, economic growth as an objective will have to recede. This doesn’t mean growth is “bad” in any general sense, just that it now needs to rank lower among the many things we want for ourselves. Given any level of decarbonization (and setting aside all the other competing needs, of which there are many), if we can achieve this with more growth, or less degrowth, so much the better. The one point of agreement I have with the degrowth view is that the argument sometimes put forward that we can’t afford to take stringent measures against carbon because it will derail economic growth has to be rejected.
China’s new antenna is five times the size of New York City, but some fear it could be a cancer risk - China has built a giant experimental radio antenna on a piece of land almost five times the size of New York City, according to researchers involved in the highly controversial project.The Wireless Electromagnetic Method (WEM) project took 13 years to build but researchers said that it was finally ready to emit extremely low frequency radio waves, also known as ELF waves. Those waves have been linked to cancer by the World Health Organisation-affiliated International Agency for Research on Cancer.Although the project has civilian applications – officially it will be used for earthquake and mineral detection and forms part of China’s 11th five-year plan – it could also play a crucial role in military communications.Scientists said that its transmissions could be picked up by a submarine lurking hundreds of metres under the sea, thus reducing the vessel’s risk of having to resurface to receive transmissions. The project follows the construction of China’s first military-grade Super Low Frequency transmission station in 2009.The next year, a Chinese nuclear submarine successfully communicated with the station from deep water – making China the third country in the world to have established such a submarine communication system, after the United States and Russia.But the Chinese navy is eager to expand its capacity and has been pouring resources into the more advanced ELF radio technology, which a llows submarines to communicate with the command centre from a greater depth and is harder to disrupt.
Electricity Use Was Up Last Year, But Why? --A decade ago, electricity use in the U.S. stopped rising. It had fallen briefly during recessions before, so the initial dip in 2008 and 2009 wasn’t a shock. But after bouncing back in 2010, consumption remained unchanged even as the economy continued to recover. This unprecedented plateau, plus a shift away from coal in electricity generation, enabled an almost 15 percent decline in U.S. carbon dioxide emissions. It also exacerbated the coal industry’s troubles and forced utilities to grapple with flat demand. Over the past year, though, U.S. electricity use rose almost 2.3 percent, the U.S. Energy Information Administration estimates, by far the biggest increase since 2010. The numbers are preliminary and could be a blip. But any change is worthy of attention. The past decade’s slowdown occurred in part because of a shift toward services and digital products and away from energy-intensive goods, along with efficiency gains driven by government standards, technological advances, and cost concerns. This year’s increase has been almost entirely the doing of consumers. (Industrial consumption fell.) That could mark a setback for energy efficiency or reflect changes in measurement of home solar generation. It could also be tied to greater use of electricity in heating and cooking, mining Bitcoins, and driving electric cars. Or it could be that everybody had air conditioners on: The continental U.S. experienced the sixth-hottest average temperature and the warmest nighttime lows on record from June through August. Keeping electricity use down can slow climate change, but climate change may drive up electricity use. Electricity use by Bitcoin miners dropped recently as prices crashed, but still rose by about 45 terrawatt hours in 2018 overall, based on the Bitcoin Energy Consumption Index compiled by Alex de Vries. But assuming most mining is done overseas, it can’t account for much of an 84TWh increase in U.S. electricity use.
After the fires, solar power advocates seek greater role in California electric grid - Over the summer, Côme Lague received a notice from Pacific Gas and Electric Co. that made him rethink the energy needs at a vineyard and winery he owns in the Sierra Nevada foothills.The letter informed Lague that PG&E could decide to intentionally turn off power lines when extreme weather conditions elevate the risk of utility equipment sparking dangerous wildfires. PG&E had never done a planned power outage but has recently embraced them as a defense measure of last resort, particularly during periods of intense winds and very low humidity levels.But Lague was concerned about the potential impact to his business, La Mesa Vineyards in Amador County. What would he do if a shutoff happened during the fall harvest, when electricity is critical for keeping his business running?Lague, a San Francisco resident, already had a solar system on the property and didn’t want to rely on a generator. He decided to expand the solar system so it can adequately satisfy his business needs if PG&E does shut off the power to prevent a fire.It’s one example of several ways advocates of solar power say the technology can play a bigger role in the state’s electric grid — an opportunity they say has become much more necessary as climate change increases the likelihood of extreme weather with the potential to fuel devastating wildfires.By boosting the usage of solar panels and batteries that store the power they generate, California could theoretically mimic across the state what Lague is doing for his winery, allowing homes and businesses to keep the lights on without turning to a fossil-fuel-powered generator.That would entail an embrace of what’s known as distributed energy, where power is generated across decentralized sources as opposed to a traditional power plant, hydroelectric dam or large-scale solar farm.California has taken great strides to expand the use of solar power, with new laws that require panels on most new homes and promote the i nstallation of energy storage systems. But the state could still do much more, according to the California Solar & Storage Association.
Alliance argues against Vectren's proposed solar project in Indiana — Alliance Resource Partners is urging Indiana regulators to deny Vectren South's application for a certificate of public convenience and necessity to construct a proposed 50-megawatt solar facility, according to filings with the Indiana Utility Regulatory Commission. Debate over what would be one of the largest solar projects in Indiana to date is heating up at the Indiana Utility Regulatory Commission, which is expected to enter a final order in the case in the first half of 2019. Tulsa, Oklahoma-based Alliance, along with the entire Indiana coal industry, is opposing plans by Vectren South to shutter about 700 MW of its coal-fired generating capacity by 2023, keeping open only 270-MW Unit 3 at the Culley power plant in Warrick County, Indiana. Alliance has argued that fuel and generation "diversity" is not a sufficient justification for the $76 million project. Alliance, in a regulatory filing last week, said Vectren has never demonstrated the need for additional generating capacity and is expected to have an approximately 200-MW generation surplus in 2025. Given that projection, building the solar project in Perry County, Indiana, merely to diversify the utility's generation portfolio is ill-advised and could cost Vectren South's 140,000 ratepayers millions of dollars in unnecessary expense over the years, the coal company contends.At the least, Alliance said Vectren should postpone the solar project by several years instead of starting construction later this year, as planned, if it receives the go-ahead from the IURC. EVENTS
Another Win for Fossil Fuels: EPA to Weaken Basis for Calculating Mercury and Future Environmental Standards - Jerri-lynn Scofield - Nearly halfway through his first term, Trump’s domestic policy record is decidedly mixed – despite having enjoyed Republican House and Senate majorities. In 2017, he enacted a massive tax cut for the wealthy and corporations. But plans to fix America’s crumbling infrastructure are stalled, and Congress has opted to shut down the government rather than cave and allow Trump to build his beloved Mexican wall. One area in which the administration has delivered: promoting the interest of the fossil fuels industry. Last Friday provided just the latest example, when – a mere hours before the agency was due to be shuttered at midnight as a result of the impasse between Trump and Congress – the Environmental Protection Agency (EPA) announced its intention to weaken coal-fuelled power plant regulations issued in 2011 to reduce mercury emissions. According to New E.P.A. Plan Could Free Coal Plants to Release More Mercury Into the Air as reported by The New York Times: the Environmental Protection Agency issued a finding declaring that federal rules imposed on mercury by the Obama administration are too costly to justify. It drastically changed the formula the government uses in its required cost-benefit analysis of the regulation by taking into account only certain effects that can be measured in dollars, while ignoring or playing down other health benefits. The result could set a precedent reaching far beyond mercury rules. “It will make it much more difficult for the government to justify environmental regulations in many cases,” While the proposal technically leaves the mercury restrictions in place, by revising the underlying justifications for them the administration has opened the door for coal mining companies, which have long opposed the rules, to challenge them in court. The rule change – combined with the Trump administration’s other big domestic success – seating federal judges – might well allow courts to overturn environmental and other regulations, even once other personnel in future staff the EPA (see Trump After 500 Days: More Lifetime Federal Judges, which also includes links to other relevant posts). And these Trump judges would also have the power to thwart – at least in the first instance – whatever agenda a more progressive Congress and President might enact to redress the Trump policies. Loosening rules that hamper to fossil fuel interests is part of a wider Trump agenda of reducing environmental regulations. The New York Times last week produced an analysis of Trump’s environmental record in 78 Environmental Rules on the Way Out Under Trump. Thirty-seven of these – either pending or completed – concerned air pollution and emissions, and drilling and extraction.
Power Plant Accident Casts New Light On New York’s Dirty Fuel Addiction ― The electrical accident that illuminated the New York City skyline late Thursday night came from a substation next to one of the state’s dirtiest plants, casting new light on the city’s dependence on antiquated oil-burning power stations and bolstering calls for cleaner electricity. This densely populated area of northwestern Queens provides nearly half the city’s electricity from aging plants that burn No. 6 fuel oil, a thick, viscous oil blend considered one of the most polluting energy sources in the world. The Astoria Generating Station, right next to where the sudden release of heat and light caused a stunning electrical arc flash around 9 p.m., burns 3,039,000 gallons of No. 6 fuel oil a year. The Ravenswood Generating Station, the towering four-smokestack facility on the East River in Long Island City, burns another 3,264,000 gallons per year and was ranked as the state’s largest carbon polluter in 2014. The New York City Department of Health found higher air pollution levels in Astoria and Long Island City than the rest of the borough or city. According to the city’s most recent community health report for the neighborhoods, the levels of PM2.5 ― the most harmful type of particulate matter, fine-grain pollutants that wedge into lungs when inhaled ― hit 8.9 micrograms per cubic meter. That compared to 8.4 micrograms per cubic meter in Queens overall and 8.6 citywide. Local officials have long blamed the plants for higher levels of asthma, and last year the city council passed a bill requiring the utility operators to stop using fuel oil No. 6 by 2020 and No. 4 oil by 2030.
Cargo ship grounds near mouth of Mississippi, blocks others – — The Coast Guard says a ship loaded with coal has run aground near the mouth of the Mississippi River, blocking more than 50 incoming and outgoing vessels. A news release says the agency learned Friday morning that the United Kingdom-flagged Anglo Alexandria was blocking the navigation channel at river mile 3.5 near the community of Pilottown. It says there are more queued-up vessels normal because the area’s been very foggy for days. Coast Guard spokeswoman Petty Officer Lora Ratliff says the cargo ship is carrying coal to New Orleans. The cause of the grounding is being investigated. Ratliff says the river’s water level is considered high. New Orleans is about 70 miles (120 kilometers) northwest of Pilottown, but about 88 miles (140 kilometers) away along the winding river.
Kevin McIntyre, Federal Energy Regulatory Commission chairman, dies at 58 - Kevin J. McIntyre, who chaired the Federal Energy Regulatory Commission and last year rejected a Trump administration proposal to aid coal and nuclear plants, died Jan. 2 at his home in Arlington, Va. He was 58.The cause was brain cancer, his family said.Mr. McIntyre, a Republican lawyer, was nominated by President Trump in August 2017 to chair the FERC, which regulates portions of the electricity grid, interstate oil transportation and natural gas pipelines, and electric transmission lines.But in January 2018 Mr. McIntyre led the independent five-member commission in unanimously rejecting a proposal by Energy Secretary Rick Perry that would have propped up nuclear and coal plants struggling to stay afloat in competitive electricity markets. Mr. McIntyre’s death opens up the possibility that Trump could seek to alter the balance of the commission on competitive markets. The commission, which has two Democrats and two remaining Republicans, is also charged with approving utility mergers and the construction of liquefied natural gas facilities.
More coal plants shut down in Trump’s first two years than in Obama’s entire first term --The last time U.S. coal consumption was this low, Jimmy Carter was president. Despite campaigning on a pledge to save the dirtiest of fossil fuels, President Donald Trump has presided over a faster rate of coal plant retirements in his first two years than President Barack Obama saw in his entire first term. The U.S. Energy Information Administration (EIA) reports that while 15 gigawatts of coal-fired plants were shut down in Obama’s first four years, Trump’s first two years have seen some 20 gigawatts retired (with more than two thirds of those occurring last year). As a result, U.S. coal use dropped 4 percent in 2018 to a level not seen since 1979, according to the U.S. Energy Information Administration (EIA). In fact, the EIA now projects that the decline in coal consumption will speed up in 2019 — with power sector coal use forecast to drop a whopping 8 percent this year.So what went wrong? After all, Trump had said he would end Obama’s supposed “war on coal.” The answer is there never was any such war. The fundamental problem for coal was — and still is — economics, not politics. Indeed, as one leading industry analyst explained back in May, “the economics of coal have gotten worse” under Trump.Coal power plants have simply become too expensive to operate compared to natural gas and renewable energy. Indeed, building and running new wind and solar farms is now cheaper than just running existing coal plants in many places.
Nation’s coal consumption in 2018 expected to be lowest since 1979 - Coal consumption in the U.S. for 2018 is expected to be the lowest since 1979, a likely predictor of another drop for Wyoming production given that the state ships more than 90 percent of its coal to users in other states. The coal industry has been in decline since a peak in 2007, tracking the falling use of coal in power plants across the country. The largest coal state in the country, Wyoming produces more coal from its 16 mines than the next six largest producing states combined. Wyoming production of the black rock peaked in 2008, but the state’s coal industry has felt the pinch following that high, suffering a downturn in 2015 and 2016. In just those two years, the state lost about one quarter of its annual coal production. The rally that followed the downturn has been modest, with production rising just 6 percent in 2017 and firms bringing back just five full-time mine employees compared to the nearly 1,000 that were lost. The narrowed coal market continues to represent uncertainty in one of Wyoming’s bedrock industries, with one of the largest coal producers in the state considering a sale. National coal consumption in the final months of 2018 has yet to be counted by federal and state officials, but the U.S. Energy Information Administration — which tracks weekly coal shipments — estimates that consumption will be down 4 percent for the year compared to 2017. The use of coal in the U.S. has fallen by 44 percent in the last decade, with 2018 consumption projected to be 437 million short tons lower than the 2007 peak, according to the EIA.
EPA Bows to Coal Industry, Moves to Weaken Mercury & Air Toxics Standards --In its latest attack on clean air protections, the U.S. Environmental Protection Agency (EPA) released its new proposal to weaken the Obama-era Mercury & Air Toxics Standards (MATS), putting public health at risk from more than 80 dangerous pollutants, some of which are known to cause brain damage in children."This is an unconscionable rollback to serve the coal industry at the expense of all Americans, especially our children," said John Walke, director of NRDC's Clean Air program. "And it says EPA's just fine with allowing brain poisons mercury and lead and toxic carcinogens to fill our skies."The standards were the first national limits on air pollution from coal-fired power plants that release toxins like mercury, arsenic, lead and acid gases into the air. Among those, mercury is especially toxic, especially for pregnant women and their babies. The stakes are high: Each year, the standards prevent up to 11,000 premature deaths, 13,000 asthma attacks and nearly 5,000 heart attacks. In fact, MATS delivers up to $90 billion in health benefits. Nearly everyone supports the standards—including utilities that have already invested $18 billion for pollution-control equipment and are complying with the rules at nearly every coal- and oil-burning power plant in the country. Even Congress is showing bipartisan opposition to a rollback. The standards' few opponents include coal and industry executives. In particular, coal tycoon Bob Murray, the head of Murray Energy, has long been pushing for a rollback—going so far as to include it in a wish list to the Trump administration soon after inauguration. Murray has financial ties to the Trump campaign and is a former client of the EPA's acting head Andrew Wheeler.
Fifteen Indian coal miners trapped, likely killed, in mine disaster --The bodies of 15 workers have remain trapped inside an illegal “rat-hole” coal mine at Ksan village in the northeastern Indian state of Meghalaya since water from the nearby Lytein River gushed into the 370-foot deep mine on December 13.While such mining is officially banned in Meghalaya state it continues because coal seams are close to the surface in this part of India. The mining involves clearing ground vegetation and digging down to find a coal seam. Horizontal shafts are then created that follow the seam. These shafts are so small that miners, including women and children, have to crawl on their knees and use pickaxes to extract the coal, which is carried out in baskets and winched to the surface.According to media reports, only five of the 20 people working in the Ksan mine, located in the state’s East Jaintia Hills District, escaped. Sahib Ali, one survivor, said he was inside the mine, pulling a cart full of coal, when the flooding occurred. “For some unknown reasons, I could feel a breeze inside the mine, which was unusual,” he told reporters. “What followed was the loud sound of water gushing in. I barely made it to the opening of the pit. There is no way the trapped men will be alive. How long can a person hold his breath underwater?” Rescue efforts have been hampered by inadequate equipment and the total indifference of India’s central and state government authorities.
Bill Gates says the US has lost its global leadership in nuclear power, and needs to ‘get in the game’ --Bill Gates is urging the United States to invest in nuclear power research. In his annual year-in-review Gates Notes blog post, Gates noted that, despite the consequences of climate change that people face around the globe, “global emissions of greenhouse gases went up in 2018.” Because burning fossil fuels (oil, coal, and natural gas) releases carbon dioxide and other heat-trapping gases into the atmosphere, Gates wrote that we need breakthroughs in clean energy in order to curb the rise of global temperatures. Generating energy from sunlight and wind does not emit CO2; the same goes for nuclear energy. “The world needs to be working on lots of solutions to stop climate change,” Gates wrote. “Advanced nuclear is one, and I hope to persuade US leaders to get into the game.”
AEP wants to change Stark-Carroll project - AEP Ohio Transmission is rebuilding power line from Carrollton to Canton Twp. An AEP Ohio affiliate wants to modify its plan to rebuild a century-old power line between Canton Township and Carrollton. AEP Ohio Transmission Co. started to rebuild the nearly 20-mile-long transmission line in December 2017. The company is spending $50 million to replace the original steel-lattice towers and copper conductor, built in 1916, with steel poles about 120 feet tall and a new conductor. The transmission line crosses Sandy, Osnaburg and Canton townships in Stark County and Brown, Center and Harrison townships in Carroll County and spans the southern end of Lake Mohawk. The original towers and conductor are far past their original life expectancy and need to be replaced to ensure reliable service. The transmission line brings power from the Ohio River to Canton and is in an area that has seen greater power demand due to Utica Shale processing plants and pipeline compressor stations, according to the company. On Dec. 28, AEP Ohio Transmission Co. asked the Ohio Power Siting Board for permission to modify the project due to engineering considerations and property-owner preferences.
Citizens need to know facts about injection well company - Roxanne Groff - As a service to citizens, it is necessary to provide facts in response to your Dec. 20, 2018, news article, “Injection Rejection – Citizens Make Passionate Case Against Injection Wells”, about the Dec. 18 public hearing hosted by the Athens County Commissioners. Requested by Athens County Fracking Action Network, the hearing allowed citizens to comment on Jeff Harper’s application to the Ohio Department of Natural Resources for a massive fourth injection well at his K&H facility adjacent to Torch, Ohio. Your article quoted extensive pre-hearing statements by Mr. Harper about the three injection wells already receiving toxic radioactive frack waste at the facility. Since confirmation of assertions by the operator of an industrial facility of extreme concern to our community is essential and since the article lacked any such confirmation, I did my own fact checking. Public testimony at the public hearing addressed many areas of concern, including: 1) harm from current air pollution; 2) harm from potential water contamination; and 3) harm from seismicity and potential earthquakes induced by injection. The results of my inquiries follow, with quotes from your article.
Fracking hub could harm our water - Cincinnati.com -- This November, while most of us were focused on election results, the U.S. Department of Energy (DOE) published a report to Congress on "the feasibility of establishing an ethane storage and distribution hub in the United States." The proposed "hub," referred to by its acronym ASTH, would include "hundreds of miles of pipelines, fracked gas processing facilities, and underground storage of petrochemicals and fracked gas liquids… [stretching] along the Ohio-West Virginia border from Pennsylvania to Kentucky along the Ohio River." The report has been accepted, and Congress has given the go-ahead to begin work on this massive infrastructure project.Why should Cincinnatians care about this? The Ohio River, which constitutes one of the "spokes" of the proposed hub, provides the region with 88 percent of its drinking water. Fracking produces massive quantities of radioactive waste water which may well make its way into our river. And legal protections that have prevented companies from dumping waste into the river for over four decades have recently been repealed.That means Cincinnati drinking water may soon be subject to pollutants leftover from natural gas extraction.Other people have reported on the Ohio River Valley Water Sanitation Commission's (ORSANCO) decreasing standards for Ohio River water quality. The Ohio River is a notoriously polluted body of water, and has been for a long time. But the Appalachian Storage and Trading Hub poses a new threat in its scale.
Shale gas production in up Pennsylvania — Shale gas production in Pennsylvania increased 12.9 percent over the first three quarters of this year, compared with the first nine months of 2017. Washington and Greene were the second- and third-most productive counties, respectively, according to data from the state Department of Environmental Protection. DEP reported Susquehanna County, in the northeastern quadrant of the state, was first with 1.07 billion McF of natural gas from 1,352 active wells. (One McF equals 1,000 cubic feet.) Susquehanna, bordering New York state, was a prolific producer, accounting for nearly one-fourth of the commonwealth’s 4.47 billion McF. The two southwesternmost counties weren’t far behind, though. Washington produced 862.4 million McF through September, a 27.2 percent bump year over the year before. More specifically, that was an increase of 184.4 million McF from the three-quarters point of last year. Washington had more active wells — 1,493 — than any county, a 14.1 jump from 1,308. Greene ended the third quarter with 560.7 million McF, a rise of 12.9 percent from the same period of 2017. The county had 1,066 active wells through September, a 14 percent rise. Those three were among nine counties that topped 100 million McF of production during the period. Filling out the top 10, production-wise, were: Bradford, Wyoming, Lycoming, Tioga, Butler, Sullivan and Allegheny. Westmoreland was 11th, Fayette 12th and Beaver 16th.
Too big to fail: How one gas company can leave a mark on Pennsylvania – Diversified Gas & Oil PLC may be the largest operator of old oil and gas wells in the country. Another way of saying that is the Alabama-based company might have the most responsibility for plugging wells across Appalachia. That’s not lost on Pennsylvania regulators. On July 25, the state Department of Environmental Protection announced that it had ordered three companies — Alliance Petroleum Corp., XTO Energy Inc. and CNX Gas Co. — to plug 1,058 abandoned wells statewide after production records showed the wells had not produced any oil or gas for a year. The agency didn’t spell out a key detail: Nearly all of those unproductive wells are now owned by Diversified, which has grown at a breakneck pace over the past year — swallowing up smaller companies and picking up shallow gas assets that the company has referred to as “unloved” and “forgotten” by big shale drillers. Diversified is following a strategy of keeping the conventional wells active as long as possible without drilling new ones — counting on its volume and efficiency to allow it to profit on the fuel production that others have abandoned. And Pennsylvania is increasingly alarmed that, once the wells have been wrung dry, the cost of plugging all of them might overwhelm the company and land in the state’s lap. The state has never before faced such a concentration of liabilities in one company. Diversified now controls more than 50,000 wells. About 24,000 of those are in Pennsylvania. To put that into perspective, in the decade between 2006 and 2016, no one operator had more than 5,700 conventional wells at the same in the state. Mr. Hutson said Diversified has “an active plugging program that’s in place constantly year to year,” and that the company can plug wells in the average range of $8,000 to $10,000 a piece. The high end would be $25,000, he said. Diversified’s numbers are the most optimistic of a variety of sources, which include local conventional and shale gas producers, regulators and plugging companies.“If wells are [shallow and] in good condition, it could be $8,000 to $10,000 a well,” said Mark Cline, who runs Cline Oil in Bradford, Pa., and serves as president of the association of Pennsylvania Independent Petroleum Producers. His company was just quoted a price of $33,000 a well to plug some 3,000-foot-deep holes.Plugging a well means cleaning out the wellbore, removing uncemented pipe and debris, and filling it with cement. How much that costs depends on a number of factors, including the age of the well — one that has been sitting around unserviced for many years is more likely to be in worse shape — the depth, and whether it has an access road to get equipment to the site.
Natural gas pipeline now online, path goes through Cumberland County - The liquid natural gas pipeline that traverses underground through the state, cutting through Cumberland County, is now in operation.Energy Transfer announced Saturday that the Mariner East 2 pipeline is in service.According to the company, the 350-mile pipeline transports domestically-produced ethane, propane and butane east from processing plants in Ohio, across West Virginia and Pennsylvania to Energy Transfer’s Marcus Hook Industrial Complex in Delaware County, where its stored for distribution locally, domestically and overseas.The Mariner East 2X pipeline, which parallels the Mariner East 2, is expected to be in service by late 2019.According to the company, the total impact from construction of the pipelines is estimated to be more than $9.1 billion in Pennsylvania, providing more than 9,500 construction jobs over six years.Through construction, it has been the source of some controversy locally and around the state. Chester County District Attorney Tom Hogan announced earlier this month he opened a criminal investigation into construction of the pipeline that has drawn blame for causing sinkholes and polluting drinking water and waterways, The Associated Press reports. In August, state officials levied a $148,000 fine against the company for harming private wells while building the Mariner East 2 pipeline in Lebanon, Berks and Chester counties.
After years of legal battles, natural gas pipeline spanning Pa. is officially in service - Following years of legal battles and state-mandated shutdowns, Sunoco's Mariner East 2 pipeline officially began service Saturday, according to a news release from its parent company, Energy Transfer LP of Dallas, Texas.The 350-mile pipeline transports domestically produced ethane, propane and butane from processing plants in Ohio across West Virginia and Pennsylvania to Energy Transfer's Marcus Hook Industrial Complex in Delaware County. The news comes shortly after a county prosecutor in Pennsylvania announced he would be opening up a criminal investigation into the construction of the pipeline, looking for potential crimes including causing or risking a catastrophe, environmental violations and corrupt organizations.The Mariner East 2X pipeline, which runs parallel to Mariner East 2, is expected to be in service late 2019. Lisa Dillinger, Energy Transfer spokeswoman, said the Mariner East project is anticipated to create more than 9,500 construction-related jobs a year during construction, and between 360 to 530 permanent jobs.
'Frankenpipe?' Critics take aim at Sunoco's hybrid Mariner East 2 - Sunoco/Energy Transfer has named the long-delayed pipeline, which went online Saturday and started shipping highly volatile liquid gases to a facility in Marcus Hook Mariner East 2. But that's being disputed by the project's critics, who maintain that while the original plan for a 20-inch pipeline was called Mariner East 2, they have a few other names for what now appears to be a mish-mash of three pipelines or what Sunoco says is a “work-around” of 12-inch, 16 inch and 20 inch pipelines is known as the Mariner East 2. Some critics call it the “Dragonpipe,” while others prefer “Frankenpipe.” Nevertheless, the multi-billion dollar project is now in fact delivering product while spanning the entire width of Pennsylvania, starting in Ohio and winding up in Marcus Hook. The original 20-inch Mariner East 2 pipeline is mostly complete and carries the product through much of the state. Butane, ethane and propane, in places, flow along the 16-inch pipe or what was originally called the Mariner East 2X. An 80-year-old 12-inch pipe bypasses about 23 miles of pipe, much of it incomplete, in Chester County and reconnects with the original Mariner East 2 in Delaware County. The pipeline travels 11 miles through Delaware County where Sunoco has been unable to finish work on the original Mariner East 2 pipeline. “This cobbled together 12-inch line, if the allegations are true, has much uncertainty as to its ability to safely transport these products,” Casey said. “But for Sunoco to pull a bait-and-switch to now call this pipeline ‘Mariner’ does a disservice to the intelligence of state regulators.
Mariner East startup renews safety fears for some residents in Delaware County - Homeowners focus on integrity of repurposed 12-inch pipeline first built in 1930s - Lora Snyder was already worried about plans for a natural gas liquids pipeline going past her Delaware County property, but now that the pipeline has started operating, she’s thinking it’s time to sell and move away. The 12-inch pipe, a repurposed gasoline line originally built in the 1930s, has leaked at least twice before, and Snyder predicts that it will do so again – despite a $30 million upgrade in 2016, according to Sunoco – with potentially catastrophic consequences. “Our real concern here is that the 12-inch has leaked at least two times that we know of in Edgmont,” said Snyder, 50, in an interview at her home. “I’m fearful. I don’t know how I will sleep at night, truthfully, because of the history of the pipe. The chances are pretty good that we will see another leak soon. Now we have to worry about being blown up.” Critics’ concerns were renewed over the weekend of Dec. 29-30 when the whole cross-state pipeline finally began pumping ethane, propane and butane after many delays caused by regulatory shutdowns and technical problems during its almost two-year construction. Sunoco said in a statement on Saturday that the pipeline “is in service” effective that day. The startup meets the company’s latest target of beginning operation by the end of 2018.After hoping that the project would hit yet another roadblock, critics began to focus on the reality of living with a pipeline that they say could cause mass casualties if it leaks and explodes highly volatile liquids in a densely populated area like Delaware County. An independent assessment for Delaware County Council said in December that a worst-case rupture of the pipe would kill anyone within about a mile, but that the chance of that happening were less than that of someone dying in a car crash.
Lawmakers introduce comprehensive pipeline legislative package -- State Sens. Andy Dinniman, D-19, and Tom Killion, R-9, announced Wednesday that they have introduced a comprehensive legislative package aimed at reforming Pennsylvania’s pipeline regulatory process to improve safety at schools and in local neighborhoods and communities. “For years, I’ve been working to protect our communities from the potential safety risks of the Mariner East pipeline project. Along the way, I’ve identified several areas that are in dire need of improvement in the Commonwealth,” Dinniman said. “These bills are a result of that ongoing effort and a necessary starting point to refocus and re-energize our efforts in the new year. I am committed to working in the spirit of bipartisanship and for the sake of Chester County residents and families to achieve real and lasting pipeline safety reform in the 2019-2020 legislative session.” “Pipelines are transporting highly flammable and toxic materials under high pressure through densely populated areas. Having new laws in place to ensure the safety of families living in pipeline communities is long overdue,” Killion said. “I look forward to working with Senator Dinniman on passing these bills. Pipeline industry oversight and public safety are top concerns for our constituents, and I’m pleased to be partnering with him on these important issues.” The bipartisan package consists of 12 bills, six sponsored by Dinniman and six sponsored by Killion. Both senators also serve as first prime co-sponsor of each other’s bills. They are as follows:
Pa. PUC prepares to collect millions in past impact fees after 'stripper well' ruling - About 17 natural gas companies are expected to get invoices early this year for millions of dollars of impact fees they owe on low-producing shale wells following a state Supreme Court decision last week.The Pennsylvania Public Utility Commission is in the process of generating invoices for shale gas producers who disputed and did not pay impact fees on some wells in recent years based on a legal debate about what counts as a “stripper well” that is exempt from the annual fees.Judges disagreed about whether a well had to produce more than 90,000 cubic feet of natural gas per day for one month of the year — or every month of the year — for the fee to be imposed.The state Supreme Court settled the debate on Dec. 28, ruling that only wells that fall below the production threshold every month of the year can be considered stripper wells.The decision confirmed the PUC’s interpretation but was a blow to Armstrong County-based natural gas producer Snyder Brothers Inc. and the Pennsylvania Independent Oil and Gas Association, which had argued that the law’s exemption for stripper wells was more expansive.Now the PUC is readying to collect fees that were left in limbo during the years-long case.“We estimate that the recent Pa. Supreme Court decision will involve hundreds of wells with outstanding impact fees totaling millions of dollars,” PUC spokesman Nils Hagen-Frederiksen said. The agency does not yet have precise figures.Last June, Mr. Hagen-Frederiksen said 17 producers disputed that they owed fees on more than 300 wells due to the stripper well debate. That reduced the impact fee collection for 2017 by $6.1 million.Producers disputed impact fees on 160 wells for 2016 and 35 wells for 2015, according to PUC records, although it is not clear if all of those disputes had to do with the stripper well definition. PIOGA general counsel Kevin Moody said producers who agreed with the association’s interpretation of the stripper well definition had little choice but to withhold fees for their disputed wells while the case was being considered, because the law does not allow for refunds once fees are paid.
State of New Jersey continues fight against PennEast pipeline - Last month, Federal Judge Brian Martinotti ruled the PennEast Pipeline project will benefit the public and allowed the project to proceed in the Garden State. On Friday, State Attorney General Gurbir Grewal asked the feds to reconsider the ruling arguing the state has "sovereign immunity" from eminent domain under the 11th Amendment. Tom Gilbert with the New Jersey Conservation Foundation is pleased with the the attorney general's continued pursuit. "It shows they're obviously taking their responsibility for those lands very seriously," said Gilbert. Two weeks ago, Gilbert led a group of elected officials and property owners in protest of the federal court's decision at a resident's home in Hopewell Township, Mercer County. That home sits right in the middle of where the proposed pipeline would be. The pipeline would push a billion cubic feet of natural gas a day through Pennsylvania and New Jersey. But before it can begin construction, PennEast needs approval from both states. "No matter what the outcome here, we know that PennEast has a very, very long way to go," said Gilbert. Grewal has requested a hearing on the matter for later this month. In response to the filing, a PennEast spokesperson said "We are reviewing the State's motions, but are very confident in the well-reasoned and sound rulings from Judge Martinotti."
Orphan Wells: States Wrestle With Soaring Costs For Oil & Gas Industry Mess – WOUB - Across the country, many state regulators have few resources to deal with an ever expanding list of abandoned wells. “The states are pretty good at regulating wells that are being explored, are being fracked, are in production, but they kind of lose interest once that happens,” said Alan Krupnick, a senior fellow with the nonpartisan environmental think tank, Resources For the Future. “There’s not enough attention being paid to reducing the risk from these abandoned wells.”Across the Ohio Valley, thousands of oil and gas wells sit idle. An analysis of state data by the Ohio Valley ReSource estimates more than 8,000 oil and gas wells are considered “orphan.” Definitions of orphan and abandoned wells vary by state, but in general, orphan wells lack an operator or company that can pay to plug them. That responsibility then falls to state regulators who are frequently struggling to keep up with demand and scrambling to find money to clean up the mess.. Recent legislation passed in Ohio and West Virginia funnels more money toward plugging orphan wells. In Kentucky and West Virginia, agencies tasked with plugging those wells rely on forfeited bonds. That money is collected in a fund and used to plug the highest priority wells. Well plugging can be an expensive undertaking. Across the Ohio Valley, regulators reported figures as low as a few thousand to upwards of $200,000 to plug a single well. “We may have an emergency repair on a big well and we may have had bonds forfeited on several small wells and those funds just don’t add up,” said Lanny Brannock, a spokesperson with the Kentucky Energy and Environment Cabinet. “So, we’re constantly behind on funding for orphan wells.” Since 2012, Kentucky has plugged 33 wells and has about $950,000 in an orphan well fund. West Virginia’s funding situation is similar. Since 2012, the state has plugged seven wells. The West Virginia Department of Environmental Protection can use a portion of each $150 well work permit application fee as well as any forfeited bonds to plug orphan wells.
PSC gives OK to gas pipeline into Jefferson – After getting hundreds of comments from citizens opposed to Mountaineer Gas Co.’s extending a natural gas pipeline into Jefferson County, the West Virginia Public Service Commission has given the project the green light. The PCS’s decision clears the way for Mountaineer to lay gas lines from Martinsburg to Charles Town, with service to the Rockwool insulation factory site in Ranson along with future commercial and residential customers. The PSC called Mountaineer’s $16.5 million service expansion plans in the Eastern Panhandle “reasonable and in the public interest.” The agency’s approval of Jefferson County gas service involved a five-year, nearly $120 million expansion plans and system upgrades that Mountaineer will pursue across West Virginia. In announcing the move, the PSC acknowledged numerous written and oral public comments filed to oppose the extension. While calling the public concerns over gas service “sincere and deeply held,” the PSC stated the arguments presented against extending Mountaineer’s service did not address state law that directs the agency “to encourage and accommodate the extension of natural gas service to unserved and underserved areas of West Virginia.” Jefferson County households and business have no access to natural gas service. “It is undisputed that, notwithstanding the enormous amount of natural gas available in West Virginia, natural gas utility service is not yet available to many residents and businesses in the Eastern Panhandle,” the agency wrote. Jefferson County economic development officials have said offering natural gas is an important factor needed to attract new commercial and industrial operations to the county. Moses Skaff, a spokesman for Mountaineer, has said the utility has been working with Jefferson officials to bring gas service to the county since at least 2014. Many opposed to the Rockwool factory hope to prevent or delay the facility from obtaining public sewer and water service. Rockwool plans to open its 460,000-square-foot factory on Charles Town Road with natural gas service by the summer of 2020.
Pipeline company wants Elliston-area tree-sitters out - Two people face removal from trees because they are blocking the Mountain Valley Pipeline project near Elliston, a pipeline attorney said in court papers. A person who said he is one of the protesters expressed defiance Thursday. The person, who identified himself as 24-year-old Phillip Flagg, said only “if the pipeline were stopped” would he leave the tree voluntarily. He said he was speaking from about 50 feet above the ground in a chestnut oak near Yellow Finch Lane. He said he has ample supplies to stay alive, and another tree-sitter is nearby. The location is a steep slope below Poor Mountain in eastern Montgomery County, he said. Even though the project has been slowed by legal and regulatory impediments related to alleged environmental violations, Mountain Valley recently said in court papers that the company “intends to seek removal of these individuals,” calling them Tree-Sitter 1 and Tree-Sitter 2. It’s not clear from the filings whether Mountain Valley knows their names. While they don’t own any of the land involved, the tree-sitters can be sued as “persons claiming an interest in the property,” the company’s Dec. 20 filing said. “The tree sitters are occupying the property with the express purpose and intent of preventing MVP from exercising its rights under the Court’s order.” The Roanoke federal court gave Mountain Valley an easement to access the privately owned land where it intends to bury the pipe and where, according to an Appalachians Against Pipelines Facebook post, the Montgomery County tree-sitters have occupied an oak and a pine for 112 days as of Christmas. Landowner Cletus Bohon, who opposes the pipeline’s use of his property, said Thursday the tree-sitters did not seek his permission before entering his land three months ago.
Virginia Landowners Petition US Supreme Court Over Eminent Domain - – A lawsuit involving the Mountain Valley Pipeline may be headed to our nation’s highest court. Wednesday, Virginia landowners filed a reply arguing their case does have merit to be heard after non-decisions by lower courts. They want to challenge the constitutionality of eminent domain before the United States Supreme Court, arguing the system is flawed and needs re-working. It even has the backing of some conservative legal scholars. The Natural Gas Act of 1938 is the groundwork for what we now have today, the Federal Energy Regulatory Commission, otherwise known as FERC. These are the folks that authorized the Mountain Valley Pipeline to use eminent domain to build on private land. Now, the Supreme Court is deciding whether or not they’ll allow Roanoke lawyers to argue why they say the 80-year-old law is unconstitutional, which could change the rules for pipelines across the country. And in the briefing submitted Wednesday, arguing FERC and the private company should have never been given that power to begin with. There’s a real possibility the nine justices of the United States Supreme Court may soon be looking into the Mountain Valley Pipeline. “The case deals with two primary issues, both of which are essential to the preservation of individual liberty,” Gentry Locke lawyer Mia Yugo said. “The first issue is the private non-delegation doctrine and the second issue is the right to private property.” Yugo, alongside Tom Bondurant and other colleagues at Gentry Locke, are petitioning the United States Supreme Court to hear a case on whether the use of eminent domain for private pipeline companies is legal, arguing 80 years ago, Congress made a mistake with the Natural Gas Act of 1938. “So just because Congress passes a statute, doesn’t mean that Congress gets it right,” Yugo said. “And when they don’t get it right the individuals or really anybody can go into court, if you have standing, can go into court and challenge that statute as unconstitutional and that’s precisely what we’ve done.”
Supreme Court deciding whether to hear Mountain Valley Pipeline lawsuit- A lawsuit involving the Mountain Valley Pipeline may be headed to our nation's highest court. Wednesday, Virginia landowners filed a reply arguing their case does have merit to be heard after non-decisions by lower courts. They want to challenge the constitutionality of eminent domain before the United States Supreme Court, arguing the system is flawed and needs re-working. It even has the backing of some conservative legal scholars. The Natural Gas Act of 1938 is the groundwork for what we now have today, the Federal Energy Regulatory Commission, otherwise known as FERC. These are the folks that authorized the Mountain Valley Pipeline to use eminent domain to build on private land. Now, the Supreme Court is deciding whether or not they'll allow Roanoke lawyers to argue why they say the 80-year-old law is unconstitutional, which could change the rules for pipelines across the country. And in the briefing submitted Wednesday, arguing FERC and the private company should have never been given that power to begin with. Pipeline fighters have been giving it their all in the last three years, but their biggest accomplishments may be just around the corner. There's a real possibility the nine justices of the United States Supreme Court may soon be looking into the Mountain Valley Pipeline. "The case deals with two primary issues, both of which are essential to the preservation of individual liberty," Gentry Locke lawyer Mia Yugo said. "The fist issue is the private non-delegation doctrine and the second issue is the right to private property."
As court challenges pile up, gas pipeline falls behind — Protesters banging drums may get more attention, but what has really damaged the controversial Atlantic Coast Pipeline in 2018 has been quiet action taking place in courtrooms. Opponents represented by the Southern Environmental Law Center have won a string of legal victories that have brought work on the $7 billion, 600-mile natural gas pipeline to a halt, at least temporarily. Several rulings are under appeal, while an even bigger case looms in the new year. Taken together, the federal court rulings suggest a permitting and approval process that was hasty and, possibly, misguided.“They all have the same narrative,” said D.J. Gerken, a lawyer in the SELC’s Asheville, N.C., office who has argued some of the cases. “Atlantic was very arrogant in the selection of this route . . . and counted on bullying these agencies to get it through.”The pipeline is planned to carry fracked natural gas through rugged mountain terrain and several national forests from West Virginia through central Virginia and into North Carolina. Investors still seem confident the project will move ahead, but Dominion Energy — the company spearheading the pipeline — has lately complained of painful consequences from the delays.“We’ve been forced to lay-off or delay hiring more than 4,500 construction workers on the project,” Aaron Ruby, a Dominion spokesman, said via email. “We’re confident we will ultimately prevail in the courts and be able to resume construction, but that won’t undo the hardship many working families are going through during the holiday season.” In a report to investors last month, Dominion said delays had increased the cost of the project from $6.5 billion to $7 billion and pushed its completion date from late next year into the middle of 2020.
Court declines to speed review to help with Atlantic Coast Pipeline scheduling woes — Despite Atlantic Coast Pipeline's warnings that the current court schedule could delay the 600-mile, 1.5 Bcf/d natural gas project, a federal appeals court declined to speed the pace for briefing and oral argument for a challenge to federal endangered species permitting. ACP previously has said it paused work on nearly the entire project designed to move Appalachian shale gas to Mid-Atlantic market, after the 4th US Circuit Court of Appeals December 7 stayed the federal approvals in question while litigation proceeded. Seeking to ease the impact on the project schedule, ACP on December 14 asked the court to move up oral argument, tentatively set for March, to the end of January. It contended that time-of-year restrictions that prohibit tree felling after mid-March could mean a delay of up to a year under the current schedule for briefing and oral argument. It also told the court that the cost of stopping construction is about $20 million per week, and that significant delays could mean most of the 3,000 full-time workers in West Virginia and North Carolina would be released. But the 4th Circuit Court of Appeals December 28 denied ACP's motion to expedite briefing and oral argument. ACP still has an outstanding request pending with the court that could help it to get back on track faster, if granted. It has asked the court to clarify that the intended scope of the stay was narrower or to reconsider the stay entirely (Defenders of Wildlife v. US Department of Interior, 18-2090). . Environmental petitioners in the case did not directly oppose ACP's request to expedite the court schedule but have been arguing in the court docket over whether DOI and FWS have withheld important documents and failed to file a complete administrative record in the case. The environmentalists have sought to demonstrate that agency staff were pressed to cut corners in issuing permits to avoid interfering with the applicant's project schedule. Of note, DOI and FWS have asked the court to stay all pending deadlines in light of the lapse of federal appropriations during the partial government shutdown in Washington. The case involves FWS' biological opinion, which determines whether an action is likely to jeopardize continued existence of vulnerable species, and its incidental take statement, which specifies the amount of impacts to species allowed as a result of a project.
State lawmakers sign letter to stop proposed Western Md. pipeline — More than 50 Maryland state lawmakers signed a letter urging the Maryland Board of Public Works to reject a deal that would let TransCanada build a pipeline in Western Maryland. Columbia Gas, owned by TransCanada, hopes to build a 3-mile long distribution line near Hancock, Maryland to allow natural gas to be carried from Pennsylvania to West Virginia. TransCanada has said the construction is needed to allow economic growth in West Virginia. Opponents, including environmental groups and dozens of Maryland state lawmakers including Delegate David Moon, D-Montgomery County, worry the pipeline could threaten waterways and wetlands in the proposed right of way. A proposal for an easement to allow the project to move ahead goes before the Maryland Board of Public Works on Wednesday. The board — made up of Gov. Larry Hogan, State Treasurer Nancy Kopp and Comptroller Peter Franchot — decides all state capital appropriations, preserves and protects all submerged lands and wetlands and handles state contracts. Those who signed the letter argue that since Maryland banned fracking in 2017, it doesn’t make sense to allow a pipeline to run through the state. The pipeline would run underneath the Potomac River and cross part of the Western Maryland Rail Trail.
Hogan votes against ‘Potomac Pipeline’ following years of opposition from activists - Maryland officials voted Wednesday to block Columbia Gas from using state land to build a natural gas pipeline that activists have been fighting for two years. The unanimous vote by the Board of Public Works, which includes Gov. Larry Hogan (R), came after more than 60 members of the General Assembly wrote a letter urging the board to deny a request from Columbia Gas to construct a distribution line under the Western Maryland Rail Trail. The board’s decision presents a serious hurdle for the project, which had been approved by federal and state regulatory agencies. Columbia Gas, a subsidiary of TransCanada, could challenge the board’s decision. The company “will consider our options over the coming days to keep this project on track,” spokesman Scott Castleman wrote in an email. “Today’s vote denying our easement request is unfortunate,” Castleman wrote. “That being said, it does not change the need for, or the company’s commitment to, our Eastern Panhandle Expansion Project.” The 3.5-mile pipeline, known as the “Potomac Pipeline,” would bring natural gas from Pennsylvania to West Virginia, bisecting the narrowest slice of Maryland’s panhandle and running beneath the Potomac River and Chesapeake and Ohio Canal in Western Maryland. Castleman called the pipeline “critical” for West Virginia’s eastern panhandle and said an extensive review process has “confirmed that through proper design and construction our project can be completed in an environmentally responsible and safe manner.” Environmentalists said the pipeline could jeopardize the drinking water supply of about 6 million people, many of them in the Washington area, even though the proposed Maryland route is about 100 miles from the District.
Low natural gas storage stocks contribute to recent natural gas futures price volatility - While the volatility of the Nymex near-month natural gas futures prices at the Henry Hub was low for most of 2018, it has increased significantly since October. The rise in natural gas price volatility coincides with historically low pre-winter levels of working natural gas storage stocks and rising natural gas consumption relative to current natural gas production levels.During most of 2018, record natural gas production moderated natural gas prices and natural gas price volatility. The January 2019 natural gas futures price averaged about $3.12 per million British thermal units (MMBtu) from April through October despite relatively low natural gas inventories, partly because of natural gas production gains. Low winter natural gas futures prices may have reduced the economic incentive for storage customers to inject natural gas over the summer at underground storage facilities for use in winter. Natural gas storage stocks ended the refill season (October 31) at 3,208 Bcf, their lowest level in 13 years. However, natural gas fundamentals shifted during October, driving up natural gas futures price volatility. Cold weather in November led to increases in residential and commercial consumption, along with already high levels of net natural gas exports and natural gas use in the electric sector. Together, this rise in consumption led to sizable early winter natural gas storage withdrawals, which further increased the storage deficit relative to the previous five-year average (covering 2013 through 2017). For the first nine months of 2018, the average daily price range, or difference between the daily high and low value, for the Nymex near-month natural gas futures contract was 8¢ per million British thermal unit (MMBtu); the daily price range averaged 10¢/MMBtu for the same period in 2017. In the final quarter of the 2018, the average range jumped to 22¢/MMBtu, with several trading days in the middle of November seeing ranges nearing $1.00/MMBtu. Inter-day trading, or the difference between average prices on consecutive days, was also unusually stable during much of 2018, averaging 4¢ per day in absolute value terms for the first three quarters of the year, compared to 6¢ per day in the first three quarters of 2017. In contrast, thus far in the final quarter of 2018, the average absolute value of inter-day trading has increased to 11¢, compared to 6¢ in the fourth quarter of 2017. By this metric, natural gas price volatility rose to its highest level since 2009.
Prices Collapse As Mother Nature Has Turned Bearish - Highlights of the Natural Gas Summary and Outlook for the week ending December 28, 2018 follow. The full report is available at the link below.
- Price Action: The February contract fell 44.7 cents (11.9%) to $3.303 on a 52.1 cent range ($3.773/$3.252).
- Price Outlook: This week’s 52.1 cent range remains elevated as the market contemplates the near-term bearish weather forecast against the bulls hope that January may turn cold as some models suggest. While the winter is far from over, each day that passes with above normal temperatures significantly reduces upside price potential as the fears of storage shortages wanes. The current weather forecast is now warmer than 8 of the last 10 years. Pipeline data indicates total flows to Cheniere’s Sabine Pass export facility were at 4.1 bcf. Cove Point is net exporting 0.7 bcf. Corpus Christi is exporting 0.327 bcf. Cameron is exporting 0.01 bcf.
- Weekly Storage: US working gas storage for the week ending December 21 indicated a withdrawal of (48) bcf. Working gas inventories fell to 2,725 bcf. Current inventories fall (607) bcf (-18.2%) below last year and fall (640) bcf (-19.0%) below the 5-year average.
- Supply Trends: Total supply fell (0.3) bcf/d to 81.0 bcf/d. US production fell. Canadian imports fell. LNG imports fell. LNG exports fell. Mexican exports rose. The US Baker Hughes rig count rose +3. Oil activity increased +2. Natural gas activity increased +1. The total US rig count now stands at 1,083 .The Canadian rig count fell (61) to 70. Thus, the total North American rig count fell (58) to 1,153 and now exceeds last year by +88. The higher efficiency US horizontal rig count rose +5 to 945 and rises +149 above last year.
- Demand Trends: Total demand fell (14.3) bcf/d to +87.1 bcf/d. Power demand fell. Industrial demand fell. Res/Comm demand fell. Electricity demand fell (3,693) gigawatt-hrs to 76,247 which trails last year by (146) (-0.2%) and trails the 5- year average by (662)(-0.9%%).
- Nuclear Generation: Nuclear generation rose 1,799 MW in the reference week to 93,393 MW. This is (3,510) MW lower than last year and (1,624) MW lower than the 5-year average. Recent output was at 93,857 MW.
After New Year's Eve Gas Rout Prices Pause - After getting slaughtered almost 11% on the last trading day of 2018, the February gas contract settled up less than a percent today with trading much slower overall. It was only the prompt month February contract that logged a gain on the day, though, with the rest of the gas futures curve still selling off. The result was a decent move higher in the February/March G/H spread even with the February contract not gaining much on the day. Trading today fit our expectations well as we highlighted in our Morning Update that "...we see strong support for prompt gas at $2.92 that should hold without further weather model deterioration..." yet as prices bounces in the AM we similarly highlighted that, "...we are skeptical it is that sustainable." This verified well with bounces generally failing through the day and prices dipping into the settle even as $2.92 held. Later in the day we published our updated Seasonal Trader Report as well, where we highlighted where we saw risk skewed for gas prices over the coming months. We looked at how the strip had moved over the past year as well, and noticed for the first time in a little while the front of the strip was settling below where it was a year ago. We updated our 5-month GWDD forecast as well as our storage modeling out to the end of withdrawal season. This came following our Note of the Day looking at the latest weather-adjusted supply/demand balances in the gas market, where of note was a recent dip in LNG exports. The report highlighted why there was some support today but also that it would be hard to pull prices off $2.92 into the settle, which worked well with afternoon weather model guidance and forecasts not changing much. Now, traders will be watching how balances begin changing with the New Year's festivities behind us. We saw some of the first evidence of what these lower prices are bringing today, but it should be more clear into next week, while Friday's EIA print should show just how loose balances were able to get last week.
The Natural Gas Pause Continues - It was another slower trading day for natural gas today, with the February contract settling down around half a percent as traders weighed a dip in production against weather forecasts that still showed very few cold risks. Losses were about equal at the front of the strip, with the front few contracts generally moving in tandem after the February contract was initially the weakest early this morning. Our Morning Update highlighted a Neutral sentiment again today but said that our $2.92 support level was "at risk" of being temporarily broken today as overnight forecasts did not trend much more impressive. This happened through the morning on cash weakness, but only briefly. Yet we also saw early signs that afternoon model guidance could trend more favorable for cold weather in the long-range for the first time, with our 12z expectations in our Morning Update finally ticking slightly bullish. Sure enough, afternoon GEFS weather model guidance ticked a bit colder in the long-range, helping provide some support at the front of the natural gas strip (images courtesy of Tropical Tidbits). Of course, this colder weather comes after a period of significant warmth, limiting any potential bullish impact. Meanwhile, traders are closely watching tomorrow's EIA print for evidence of just how much balances loosened over the Christmas holiday. While there was a slight tick higher in GWDDs week-over-week, the Christmas holiday destroyed quite a bit of demand and traders are expecting a decently smaller withdrawal. Our Afternoon Update ran through our expectations for the EIA print out tomorrow, and we will release our EIA Rapid Release and Note of the Day immediately after the number tomorrow putting it into context. It will be a matter of how loose, not if it is loose, meaning we'll be closely looking at the front of the gas strip to see just how much loosening it seems traders have already priced in. To read all our latest analysis and make sure you don't miss out tomorrow, try out a 10-day free trial here.
Potential January Cold Helps Natural Gas Futures Shake Off Bearish EIA Storage Report - The natural gas futures market managed to shake off a particularly bearish government storage report Friday as forecasts for a potential shift to colder temperatures later this month seemed to inspire some buying after recent declines. In the spot market, a mild forecast for much of the Lower 48 accompanied continued sub-$3 pricing in most regions, though reports of upcoming maintenance coincided with gains in the Northeast; the NGI Spot Gas National Avg. shed 10.0 cents to $2.700/MMBtu. The February Nymex futures contract closed out the week above the psychologically significant $3 mark, adding 9.9 cents to settle at $3.044 Friday. March added 9.3 cents to settle at $2.905.“Weather model guidance has finally begun to pick up on the colder weather risks we expected to develop in the middle third of January, with a weak cold shot now expected to arrive later” in the week ahead and a “stronger one potentially developing into the following week,” Bespoke Weather Services told clients Friday.Bespoke expects colder trends to gradually creep into forecasts, pointing to shifts in the Eastern Pacific Oscillation and the North Atlantic Oscillation that would “allow for cold to be forced down more across the eastern U.S. Already models are showing a lobe of the tropospheric polar vortex sitting across the Hudson Bay, with just a modest upstream perturbation necessary to force much more cold across the country.The EIA reported a 20 Bcf withdrawal from natural gas stocks for the week ended Dec. 28, sharply to the bearish side of expectations for what already figured to be a lighter-than-normal pull. The report, released a day later than usual because of the New Year’s holiday, initially had a relatively muted impact on Nymex futures, despite the 20 Bcf withdrawal coming in much lighter than estimates and the year-ago and five-year-average comparables. Last year, EIA recorded a 193 Bcf withdrawal for the period, and the five-year average is a pull of 107 Bcf. Estimates ahead of the report pointed to a light withdrawal, but few market participants had pegged a pull as light as the actual number. Responses to major surveys had clustered around minus 44 Bcf to minus 47 Bcf, with estimates ranging from minus 25 Bcf to minus 92 Bcf. Intercontinental Exchange EIA Financial Weekly Index futures had settled Thursday at a 33 Bcf pull.The 20 Bcf withdrawal for the week made a big dent in the hefty year-on-year and year-on-five-year deficits. Total Lower 48 working gas in underground storage stood at 2,705 Bcf as of Dec. 28, 450 Bcf (14.3%) below last year’s stocks and 560 Bcf (17.2%) lower than the five-year average.By region, EIA reported a 20 Bcf build in the South Central that caught a number of market observers by surprise, including a 22 Bcf build into salt stocks. The largest weekly withdrawal was in the Midwest region at 20 Bcf, followed by the East, which withdrew 15 Bcf for the week. The Mountain and Pacific regions each withdrew 3 Bcf, according to EIA. Even after factoring in the typical demand impact of the holidays, Friday’s EIA report stands out as particularly bearish, Genscape Inc. analyst Eric Fell told NGI.
Gas Tries To Set A Bottom Despite Very Bearish EIA Storage Number - Excitement began to return to the natural gas space as the February contract shook off a very small storage draw announced by the EIA to rally over 3%. The February contract was not alone, as the entire natural gas strip rallied today. Such a bullish move was not particularly surprising as this morning in our Morning Update we changed our daily natural gas sentiment to "Slightly Bullish" for the first time as we saw "increased long-range cold risks" that could support prices, with GWDD additions helping cancel out what we said would be, "...a very bearish EIA print..." Yet this very bearish EIA print turned out to be even more bearish than we expected, as we were looking for a -42 bcf net implied flow to be announced by the EIA before they announced a minuscule -20 bcf net implied flow. All last week we had been warning clients that we were looking at the loosest weather-adjusted power burns of the season, and we did see bearish risks with our estimate today, but the magnitude of the miss was certainly a surprise with a large 22 bcf build in Salt storage. While the print was quite loose relative to the last several weeks, there is little doubt that the Christmas holiday played a large role too, as comparatively the storage withdrawal was not *as* loose when looking at just other weeks that held Christmas. Yet gas prices shook this off as we warned was possible in our Morning Update, and some colder risks on afternoon GEFS weather model guidance helped as well (images courtesy of Tropical Tidbits). Following the EIA print we released our EIA Rapid Release, running through our reading of weather-adjusted balances from the storage number, as well as our Note of the Day looking at Week 3 weather forecasts and daily weather-adjusted demand and supply.
State Senator Linda Stewart Files Legislation to Permanently Ban Fracking in Florida – State Senator Linda Stewart (D-Orlando) has filed legislation to permanently ban fracking in Florida. “Fracking poses a dangerous threat to our environment, especially here in Florida,” said Senator Stewart, a leading advocate for protecting Florida’s natural resources. “The fracking process involves a host of toxic chemicals injected in the extraction process which could contaminate the fresh water supply for millions of people and our wildlife. It’s just not worth the risks.” SB 146 is the latest effort to ban the highly controversial energy extraction method. Despite more than 90 such bans filed by local governments throughout the state, and bi-partisan support in both chambers of the legislature, previous legislative measures have fallen short of garnering a hearing or mustering the necessary votes for passage. “This time may well be the charm,” Senator Stewart said. “We’re about to inaugurate a governor whose environmental platform included a ban on fracking. We intend to hold Governor-elect Ron DeSantis to that promise, and I’m sure he’ll be supportive of this good bill.” Senator Stewart’s legislation, which has been filed for the upcoming legislative session, would not only ban fracking in future wells, but would prohibit the extraction process in wells already permitted for drilling or operation. If successful, the measure would take effect immediately.
Whitmer seeks Nessel opinion to block Line 5 tunnel — Michigan Gov. Gretchen Whitmer has asked newly elected Attorney General Dana Nessel for a legal opinion on the Mackinac Straits Corridor Authority in an apparent attempt to block construction of a tunnel for Enbridge’s Line 5 oil pipeline. The authority, assembled days before the close of 2018, voted Dec. 19 to approve an agreement with Enbridge for the construction of the 4-mile-long tunnel underneath the Straits of Mackinac. The project would cost up to an estimated $500 million. The approvals came amid a time crunch before the Jan. 1 inaugurations of Whitmer and Nessel, who campaigned on promises to shut down the aging pipeline rather than allow it to operate for up to 10 years during construction. Whitmer’s letter outlines what appears to be the basis for Democratic elected officials' arguments against the corridor authority. It questions the length of appointments, the title of the law, and potential conflicts with the state Constitution. “Resolving any legal uncertainty” around the agreement “is necessary to assure that we can take all action necessary to protect the Great Lakes, protect our drinking water and protect Michigan jobs,” Whitmer said in statement. “I pledged to take action on the Line 5 pipeline on day one as governor, and I am holding true to that campaign promise.” In a Wednesday statement, Nessel said she welcomed the request regarding “serious and significant concerns” surround the new law that was “passed without the care and compassion” expected for such an issue. She said she would consider the request immediately and encouraged interested parties to send her briefs or legal memos on the issue. “Let me remind those who stand to benefit from this act: take heed that this request raises serious legal concerns,” Nessel said. “In no way should any entity rely on this act to move forward unless and until these matters have been resolved.”
US rigs drop by two, gas rigs post gains — The overall number of US oil and gas rigs dropped by two this past week to 1,145, although that figure reflects more natural gas-oriented rigs added to the fleet and even more oil rigs taken out, S&P Global Platts Analytics data showed Thursday. In all, oil rigs were down by 11 over the New Year's holiday week, leaving 897, while eight rigs chasing gas were added for a total of 226, Platts data showed. In addition, the number of rigs classified as oil/gas, which usually indicates offshore Gulf of Mexico rigs, was up by two to 19. Movements within specific domestic onshore plays were minor at the end of the holiday season. The Eagle Ford Shale in South Texas showed the most positive movement, with an increase of four rigs to 91. Both the Permian Basin, of West Texas/New Mexico, and the Marcellus Shale, which is largely in Pennsylvania, added three rigs apiece for respective totals of 474 and 63. Also, the DJ Basin of Colorado fell by two to 34. In the SCOOP/STACK in Oklahoma, the Williston Basin of North Dakota/Montana and the Utica Shale of Ohio, there was no change. There, rig counts remained at 105, 63 and 16, respectively. The rig count has fallen 7% since its most recent high of 1,233 for the week ended November 14, 2018. That is in keeping with historic trends that typically see the rig count falling 2% to 3% in any given year between the third and fourth quarters, owing to the North American holiday season at year-end. But in January, the tendency is for a flattish rig count for the first couple of weeks. After that, the rig count typically follows oil prices, with a lag of two to three months between price movement and rig adds or reductions. Also, 1,426 permits were added as the new year began this week, up by 563 or 65% as the new year began. The DJ Basin showed the most permitting activity of the eight named basins at 209, up by 161. The Permian was a distant second at 80 permits added, although it was down by five week on week, while the Marcellus added 41 permits, up by 16. The other five prominent basins added fewer than 30 permits apiece, Platts data showed. Commodity prices were slightly lower in the week. WTI for the week ended January 2 averaged $45.49/b, down 26 cents, while WTI Midland in the Permian Basin was $39.68/b, down 73 cents. The Bakken composite price was $42.39/b on average for the week, down 22 cents. For gas, the Henry Hub price averaged $3.03/MMBtu for the week, down 45 cents, while Dominion South prices in Appalachia averaged $2.71/MMBtu, down 36 cents.
Oil Spill Continuing for 14 Years Could Become Nation's Worst Environmental Disaster -- It may be a New Year, but there is an old oil spill that keeps on spilling. The trouble is that you will probably have never have heard about the spill. But you need to know. Because, for more than 14 years, some 10,000 to 30,000 gallons of oil has leaked daily from a sunken oil rig owned by Taylor Energy into the Gulf of Mexico, about 12 miles south of the mouth of the Mississippi River. The disaster began way back in September 2004, when the company's oil platform, known as MC-20 Saratoga, was destroyed by Hurricane Ivan. Although the company contained some of the pollution caused by the loss of the platform, it did not stop all the leaks. Unless the oil spill is stopped, the sunken rig could carry on leaking for 100 years, becoming America's worst environmental disaster. Even now, if you take the high end of the leak estimate, the site may have released an estimated 150 million gallons of oil. This is silently creeping towards the estimated 200 million gallons spilled by BP during the Deepwater Horizon oil spill in 2010. Back in November last year, the U.S. Coast Guard directed Taylor Energy to implement a new containment plan which "must eliminate the surface sheen and avoid the deficiencies associated with prior containment systems." In theory the company could be fined $40,000 a day for failing to comply. As you would expect, the company responsible for the spill, Taylor Energy not only disputes the figures concerning the leaks, but even whether it is to blame for the leak itself. Over the years it has tried to dismiss the leak as nothing more than a mere "trickle." That is hardly surprising because it could cost an estimated $1 billion to fix. The bottom line is that this a slow unseen disaster that could have been stopped years ago. As NOLA reports, some six years ago, Skytruth, an environmental group based in Shepherdstown, measured the oil sheen coming from the platform at over 20 miles long and urged the authorities to act. However, it was not until 2016 that the U.S. authorities began investigating the ongoing pollution.
South Texas feedgas demand ramping up with Corpus Christi LNG - Feedgas demand for U.S. LNG exports has accelerated in recent months with the addition of new liquefaction and upstream pipeline capacity. The latest export facility contributing to the winter surge in feedgas flows is Cheniere Energy’s Corpus Christi LNG (CCL) in South Texas — the first greenfield LNG export terminal in the Lower 48 and the first such terminal, greenfield or otherwise, in Texas. Train 1 has yet to be commercialized, but already it’s added 0.5 Bcf/d of gas demand to the Texas market through December. The facility sources its gas via a number of legacy interstate and Texas intrastate pipelines, many of which have undergone reversals and expansions in order to serve LNG terminals but also another competing export market: Mexico. How will CCL change gas flows in South Texas? Today, we provide an update of feedgas flows to Corpus Christi, including a closer look at the upstream pipeline routes facilitating those flows. This is Part 3 in our blog series examining recent changes in U.S. LNG export demand and the pipeline flows feeding it — a subject we cover comprehensively on a weekly basis in RBN’s LNG Voyager report (published each Tuesday morning). In Part 1 of the series, we started with the latest on Cheniere’s Sabine Pass Liquefaction terminal (SPL) in Cameron Parish, LA, where the start-up activities for Train 5, along with the full in-service of a new feedgas route via Kinder Morgan Louisiana Pipeline’s Sabine Pass Expansion project, have boosted feedgas flows to well over 3 Bcf/d in recent weeks. Then, in Part 2, we shifted our focus to Dominion’s Cove Point LNG export facility in Maryland, where the in-service of two pipeline expansions — Williams/Transco’s Atlantic Sunrise and TransCanada/Columbia Gas Group’s WB Xpress — has improved supply connectivity, with daily volumes consistently near or at capacity for the first time since the single-train facility began producing LNG.
In Booming Oil Field, Natural Gas Can Be Free --"American energy companies have spent billions of dollars in the past decade exploring for natural gas. But in parts of Texas and New Mexico, there is now so much of it that it is sometimes worthless. Some companies have even had to pay buyers to take it away", according to a story in today's Wall Street Journal."Shale drillers in the Permian Basin are producing vast amounts of gas as a byproduct of prospecting for oil. But there aren’t enough pipelines to take all the gas to market, causing some of it to become landlocked, and sending local prices into free fall.""Gas prices in parts of the prolific region hovered near zero last month and some trades went negative, to as low as a negative 25 cents per million British thermal units, according to S&P Global Platts. The price-reporting agency said it was the first time on record that gas traded for less than zero at the Waha hub in West Texas. While prices have since ticked up, averaging $1.68 per million British thermal units for the four weeks through Dec. 21, that is still 40% of the $4.20 per million British thermal units that gas has fetched in that time at the main U.S. benchmark, Henry Hub in Louisiana.""Energy companies say last month’s zero pricing could be a sign of things to come in the Permian area next year, as more oil pipelines get built and companies ramping up production of crude, a far more lucrative product, get stuck with more gas that has nowhere to go. The U.S. Energy Information Administration estimates December gas production will top 12 billion cubic feet a day in the region, up about 34% from a year earlier", according to the Journal article. "“You’ll see things get worse and worse and worse as oil production grows and gas production grows alongside it,” "The situation in the Permian underscores just how plentiful natural gas has become in the U.S. since companies using hydraulic-fracturing and horizontal-drilling techniques began unlocking vast amounts of it from shale-rock formations. Natural gas now helps generate about one-third of U.S. electricity, and it has become a valuable export commodity as ships take liquefied natural gas to Asia and Europe. Still, Henry Hub prices have hovered below $5 a million British thermal units for almost all of the past decade, according to EIA data."
As oil and gas exports surge, West Texas becomes the world’s “extraction colony” — Drilling booms have come and gone in this oil town for nearly a century. But the frenzy gripping it now is different. Overwhelming. Drilling rigs tower over suburban backyards. There’s a housing crunch so severe that rents are up 30 percent in the last year alone. Tax-averse city officials raised fees this spring just to keep basic services afloat. This boom is engulfing the rest of West Texas, too, extending to areas that drilling hasn’t touched before. As communities welcome the jobs and the new business, they’re struggling with an onslaught of problems that include spikes in traffic accidents and homelessness. What’s happening is unprecedented. In December, companies in the Permian Basin — an ancient, oil-rich seabed that spans West Texas and southeastern New Mexico — were producing twice as much oil as they had four years earlier, during the last boom. Forecasters expect production to double again by 2023. Texas Gov. Greg Abbott and others say the drilling spree is ushering in a new era of American energy independence, but American demand isn’t driving it. Foreign demand is.In late 2015, Congress cut a deal to lift 40-year-old restrictions on the export of crude oil. That opened the floodgates. The U.S. sold 230 million more barrels of crude to other countries in the first half of this year than it did three years earlier — a surge made possible by a virtually identical spike in Permian production.The U.S. just surpassed Russia as the world’s top oil producer. The International Energy Agency predicts that American oil — most of it from the Permian — will account for 80 percent of the growth in global supply over the next seven years. That’s bringing big profits to oil companies as well as lung-searing pollution to places where drilling has skyrocketed, while threatening to exacerbate climate change. Hydraulic fracturing — better known as fracking — made this boom technologically possible, but exports are the reason there’s so much new drilling. U.S. refineries built for heavier varieties of oil than the Permian produces can’t handle the enormous new quantities of Texas light crude. Instead, companies are shipping it abroad and finding lucrative new markets.
Why The Permian Basin May Become The World's Most Productive - Consider for a moment that the Permian Basin has been producing oil since the 1920s, and reached the two million BPD mark in the 1970s. Production slowly declined, until dipping back under one million BPD around the turn of the 21st century. Permian Basin oil production slowly crept back up to one million BPD in 2010, and then hydraulic fracturing sent production soaring. By the end of 2018, production had reached 3.8 million BPD, vaulting the Permian into second place among the world's leading oil fields. In under a decade -- and after already producing oil for a hundred years -- Permian Basin production has increased by 3 million BPD: But are there indications that Permian production will continue to grow? Yes. Consider the soaring inventory of drilled but uncompleted (DUC) oil wells. These are oil wells that have undergone the initial process of drilling (i.e., the hole in the ground has been drilled). However, to get the well ready for production requires casing, cementing, perforating, and hydraulic fracturing.The final piece of the puzzle is the amount of oil that remains to be extracted. In just the Texas part of the Permian, ~30 billion barrels of crude and ~75 trillion cubic feet (Tcf) of natural gas have already been extracted. But a new assessment by the U.S. Geological Survey (USGS) has suggested that there's still a lot to be extracted.In 2016, the USGS had estimated that the Wolfcamp shale in the Midland Basin portion of the Texas Permian Basin contains a mean of 20 billion barrels of oil, 16 Tcf of associated natural gas, and 1.6 billion barrels of natural gas liquids (NGLs). This estimate was for undiscovered, technically recoverable resources, and was the largest estimated continuous oil accumulation that USGS had ever assessed in the U.S. In its most recent report, the USGS has included the Wolfcamp shale and Bone Spring Formation of the Delaware Basin portion of the Permian Basin for the first time, and the estimates are eye-popping. The new estimated mean of undiscovered, technically recoverable resources in the Permian basin are 46.3 billion barrels of oil, 281 Tcf of natural gas (17.5 times higher than the 2016 estimate!), and 19.9 billion barrels of NGLs.
How An Oil Boom in West Texas Is Reshaping the World --My view from the window seat of a small regional jet landing in Midland, Texas, is either a testament to the advances of human civilization or a sign of its impending demise, depending on your perspective. Countless oil wells, identified by their glowing red flames, dot the dark landscape.We are descending into the Permian Basin, the heart of American oil country, where the massive oil and gas boom is changing not just Texas but also the nation and the world.This year the region is expected to generate an average of 3.9 million barrels per day, roughly a third of total U.S. oil production, according to the U.S. Department of Energy. That’s enough to make the U.S., as of late 2018, the world’s largest producer of crude. The windfall has turned a nation long reliant on foreign oil into a net exporter in a few short years.Not even the plunge in oil prices in recent months, which led some companies to scale back their plans for the Permian, has stopped the enthusiasm. By 2025, U.S. oil production is expected to equal that of Saudi Arabia and Russia combined, according to the International Energy Agency (IEA). The power of the Permian oil and gas boom is easy to spot in the basin itself, which stretches across more than 75,000 sq. mi. of scrubby ranchland in West Texas and New Mexico. So-called man camps–hastily constructed short-term housing for oil-field workers–have sprung up everywhere, amid new luxury construction projects and shiny billboards advertising Rolexes to laborers pulling in six-figure salaries. But the impact extends far beyond the region.During the past three years, the boom in these parts has transformed the U.S. economy, upended the international energy industry, undermined global environmental efforts and tilted the balance of power among Beijing, Moscow and Washington. In places like Saudi Arabia, uncertainty over future oil profits driven by rising U.S. production contributed to a rethinking of the economy. In theory, less reliance on Saudi oil also gives the U.S. more leverage in other areas, like the war in Yemen, although the Trump Administration hasn’t prioritized such efforts. The vast new U.S. oil reserves have provided cover for the imposition of tough sanctions against nations like Iran and Venezuela, moves that at other times might have crippled global supply. And around the world, the boom in the U.S. has inspired other countries to race to develop their own shale resources
Dallas Fed: Texas energy sector fell flat in fourth quarter -- Growth in the Texas energy sector came to an abrupt halt in the fourth quarter as oil prices plummeted 40 percent in the last three months of 2018, according to survey data Thursday from Federal Reserve Bank of Dallas The survey, which polls oil and gas executives in the region, found that activity virtually flat-lined near the end of the year. The survey’s associated business activity index, which the Dallas Fed considers the the broadest measure of the health of the energy sector, plunged from a score of 43.3 in the third quarter to 2.3 in the final three months of the year. The results remained positive, which mean the sector is still growing, but just barely. Energy executives were less optimistic about what lies ahead. The Fed’s company outlook index, which measures views of future conditions, recorded its first negative result since early 2016 when the last oil bust bottomed out at $26 a barrel. This time around, oil prices have sunk from more than $76 a barrel in early October down to a low of $42 per barrel in late December because of fears of a global glut of oil, driven by the combination of record production from the United States and slowing demand worldwide. Crude settled in New York on Thursday at $47.09 a barrel, up 55 cents for the day. Analysts are watching to see if OPEC nations — led by Saudi Arabia — and allies like Russia decrease their crude oil production levels as promised through the first six months of the year and possibly beyond. Uncertainty about global economic growth and its impact on oil demand, especially in Asia, also is also weighing on prices, said Karr Ingham, an economist for the trade group Texas Alliance of Energy Producers “It seems like we’re at a bit of a precipice right now,” Ingham said. “If prices stabilize in the first quarter and then go up a bit, then we’d be in pretty good shape.” The Federal Reserve district surveyed consists of Texas, northern Louisiana and southern New Mexico. The Dallas Fed survey was conducted from Dec. 12 to Dec. 20 with the participation of 167 energy companies. The U.S. oil benchmark fell from more than $51 a barrel down to below $46 during that time frame.
Dallas Fed: Oil and Gas Firms Start 2019 with Raised Uncertainty - Growth in the Eleventh District’s energy sector slowed significantly in fourth quarter of 2018 amid a decline in oil prices, according to results from the Dallas Fed’s quarterly energy survey released Jan. 3. The survey of oil and gas executives from E&P and oilfield service companies in Texas, northern Louisiana and southern New Mexico revealed a business activity index that barely remained positive. The business activity index, the survey’s broadest measure of conditions facing energy executives, plummeted from 43.3 in 3Q 2018 to 2.3 in 4Q 2018. “Following a dramatic decline in oil prices, the oil and gas sector is entering the new year with heightened uncertainty and a bit of pessimism,” Dallas Fed senior economist Michael D. Plante, said a statement emailed to Rigzone. “While activity remains at a high level, growth stalled in the fourth quarter, and survey respondents reported much greater uncertainty surrounding their outlook.” Survey results also pointed to moderation for both employment and work hours growth in the fourth quarter, particularly for oilfield services, while wage growth accelerated. The Dallas Fed warned last week that job growth in Texas—home to the prolific Permian Basin—would weaken in the first half of 2019 if oil prices remain depressed. Energy executives were also asked special questions related to their firms’ capital spending outlooks. “Lower oil prices are also affecting spending plans for 2019, with 53 percent of respondents reporting they have reduced planned capital spending due to the recent price decline,” Plante said. “Despite this, many still expect capital spending to be higher in 2019 than in 2018, of which about 37 percent expect a slight increase and 16 percent a significant increase.” The company outlook index posted its first negative reading since 1Q 2016, plummeting 57 points to -10.2 in the fourth quarter. This drop was most pronounced among oilfield services firms, with company outlook dropping 64 points to -17.2. The uncertainty index jumped 34 points to 42.4, marking heightened uncertainty regarding firms’ outlooks. Almost 58 percent of firms reported greater uncertainty.
It Turns Out Fracking Is A Water Hog That's Stealing Our Futures - Food and Water Watch - For years, the American people have been assured by energy companies that fracking is harmless and doesn’t use more water than other energy sources. The Duke research team that recently put out a new report begs to differ. They examined data across 12,000 wells and five years of operation. Here are key findings from the report and what they mean for our survival. The Findings:
- Water is staying trapped in the shale, or if it does re-emerge, isn’t treated: Only a small fraction of the fresh water injected into the ground returns as flowback water, while the greater volume of FP (flowback and produced) water returning to the surface is highly saline, is difficult to treat, and is often disposed through deep-injection wells.
- The amount of water used by fracking has been critically underestimated. The study finds that from 2011 to 2016, the water use per well increased up to 770 percent.
- The toxic wastewater produced is a much bigger problem than previously understood. The study found that toxic wastewater produced from fracking had increased up to 1440 percent between 2011 and 2016. There has been no satisfactory practice of water treatment that returns this water to usable condition for humanity — and at this scale, one can reason that fracking is on pace to destroy U.S. water sources and leave us without water for our population’s consumption: The total water impact of hydraulic fracturing is poised to increase markedly in both shale gas– and oil-producing regions. On the basis of modeling future hydraulic fracturing operations in the United States in two scenarios of drilling rates, we project cumulative water use and FP water volumes to increase by up to 50-fold in unconventional gas-producing regions and up to 20-fold in unconventional oil-producing regions from 2018 to 2030, assuming that the growth of water use matches current growth rates and the drilling of new wells again matches peak production.
Oil-patch states brace for change under new leadership - The new year could bring a fresh round of legislative battles to state capitals across the oil patch. Democrats are ready to flex their muscles when legislative sessions open this month, after picking up gains in New Mexico and Colorado. Republicans held onto control in Oklahoma, Texas and North Dakota but could face challenges from Democrats on everything from pipeline regulations to taxes. And falling oil prices could provide a fiscal challenge, as the states dig out from the price crash that stretched from 2014 to 2016. New Mexico, where business is booming thanks to the prolific Permian Basin, could see the most significant changes. Democratic U.S. Rep. Michelle Lujan Grisham will replace Republican Gov. Susana Martinez, and Democratic state Rep. Stephanie Garcia Richard will replace Land Commissioner Aubrey Dunn, a Libertarian.Lujan Grisham has said she plans to create a statewide rule on methane emissions from the oil and gas industry, something that's already on the books in neighboring Colorado. She'll also be able to appoint two members of the state Oil Conservation Division, which oversees energy regulation in New Mexico (Energywire, Nov. 7, 2018). At the State Land Office, Garcia Richard will oversee oil and gas leasing on 13 million acres of subsurface minerals. Money from leasing on state lands goes to a trust fund that supports education. One of her first priorities, which will require action in the state Legislature, is raising the royalty rate on state land from 18.75 percent to 25 percent, the same rate as Texas. A similar dynamic could play out in Colorado. Gov.-elect Jared Polis is widely seen as less friendly to the oil and gas industry than John Hickenlooper, a fellow Democrat who is leaving office because of term limits. Democrats also won control of the state Senate and widened their margin in the House.In the Lone Star State, state Rep. Rafael Anchia (D) of Dallas is drafting legislation to strengthen pipeline safety enforcement at the Railroad Commission of Texas, which oversees the state's energy industry. The bills would speed up replacement of aging pipelines, boost fines for safety violations and require companies to report leaks to the public in a real-time, searchable map. In Oklahoma, Democrats are hoping to preserve a package of tax increases that passed last year in the wake of a statewide teacher walkout. Legislators voted last spring to raise the gross production tax on oil from 2 percent to 5 percent, the first statewide tax increase since 1990, to reverse a string of budget shortfalls that had led to drastic cuts in education spending (Energywire, March 29, 2018).
Weld County oil and gas spill report for Dec. 30 - The following spills were reported to the Colorado Oil and Gas Conservation Commission in the past two weeks. Information is based on Form 19, which operators must fill out detailing the leakage/spill events. Any spill release that may impact waters of the state must be reported as soon as practical. Any spill of five barrels or more must be reported within 24 hours, and any spill of one barrel or more, which occurs outside secondary containment, such as metal or earthen berms, must also be reported within 24 hours, according to COGCC rules. .
- • WHITING OIL & GAS CORPORATION, reported Dec. 25 a tank battery spill about 7 miles northwest of Avalo, near Weld County roads 120 and 133. About nine barrels of produced water spilled. .
- • EXPEDITION WATER SOLUTIONS COLORADO LLC, reported Dec. 23 a well pad spill about 3 miles northeast of Firestone, near Weld roads 20 and 19. Between two and three barrels of oil-based mud spilled. The oil-based mud hauler failed to completely close the valve on the back of his truck.
- • VERDAD RESOURCES LLC, reported Dec. 23 a tank battery spill about 3 miles northeast of Keota, near Weld roads 100 and 109. Between one and five barrels of oil spilled. A leak formed in a line to a tanker truck, spilling oil on roadbase.
- • PDC ENERGY INC, reported Dec. 20 a historical well spill about 4 miles southeast of Kersey, near Weld roads 48 and 61. Less than five barrels of oil spilled. Waters of the state were impacted or threatened.
- • PDC ENERGY INC, reported Dec. 20 a historical tank battery spill about 2 miles east of Garden City, near U.S. 34 and Weld road 47. Less than five barrels of oil spilled. Crews found the spill while abandoning the tank battery.
- • HIGHPOINT OPERATING CORPORATION,reported Dec. 20 a tank battery spill about 2 miles northwest of Hereford, near Weld roads 138 and 79. About 40 barrels of produced water spilled. A hole formed in the tank below the bottom load out valve, spilling produced water into unlined containment.
- • KERR MCGEE OIL & GAS ONSHORE LP,reported Dec. 20 a well spill about 2 miles north of Hudson, near Weld roads 18 and 47. About two barrels of oil spilled outside containment. Overpressure on the tubing caused the stuffing box rubbers to fail.
- • PDC ENERGY INC, reported Dec. 18 a historical tank battery spill about 3 miles northeast of Greeley, near Colo. 392 and Weld road 47. Less than five barrels of oil spilled. Crews found the spill while abandoning the tank battery.
- • PETROSHARE CORPORATION, reported Dec. 17 a historical tank battery spill about 5 miles south of Keenesburg, near Weld roads 6 and 57. Between five and 100 barrels of oil spilled.. The spill was less than 200 feet from the Henrylyn Canal.
North Dakota legislator seeks to deter tampering of pipelines, infrastructure - A legislator from the northeast North Dakota district, where an oil pipeline valve was tampered with in 2016, is pushing for a stronger deterrent for damaging critical infrastructure. Sen. Janne Myrdal, R-Edinburg, is sponsoring a bill that amends the language of state law to better define that it’s illegal to willfully tamper with or damage energy facilities and other infrastructure. Myrdal said the proposal was prompted by the incident in October 2016 involving activists who turned an emergency valve on TransCanada’s Keystone Pipeline in Pembina County, stopping the flow of oil for more than seven hours. “There was concern both from law enforcement and during the trial that we just didn’t have enough teeth per se in our Century Code to go after people who do that,” Myrdal said. Her proposal also would make a fine 10 times greater if an organization is found to be a conspirator with an individual who tampers with or damages infrastructure. “If groups from outside of our state are paying for activists to come here and paying for damage, we need to make them accountable for that as well,” Myrdal said. Michael Eric Foster, the Seattle man found guilty of turning the pipeline valve, said making the law more severe would not have stopped him. Foster and other members of Climate Direct Action were part of a coordinated effort in four states to stop the flow of pipelines that carry tar sands oil from Canada into the United States in protest of the oil industry’s contribution to climate change. “What I did, I did to protect my family because everything else is failing.
Brine spill reported in Williams County -- An equipment failure caused a brine spill at a well site in Williams County on Monday, according to a statement released by the North Dakota Oil and Gas Division on Wednesday. Whiting Oil and Gas Corp. reported that 469 barrels, or 19,698 gallons, of produced water spilled 10 miles southeast of Epping due to a valve connection leak. The brine was contained at the well site and cleanup is underway. A state inspector has been to the site and will monitor cleanup.
Dakota Access pipeline developer slow to replace trees - — The developer of the Dakota Access oil pipeline missed a year-end deadline to plant thousands of trees along the pipeline corridor in North Dakota, but the company said it was still complying with a settlement of allegations it violated state rules during construction. Texas-based Energy Transfer Partners, which built the $3.8 billion pipeline that’s now moving North Dakota oil to Illinois, is falling back on a provision of the September 2017 agreement that provides more time should the company run into problems. The company must provide 20,000 trees to county soil conservation districts along the pipeline’s 359-mile (578-kilometer) route across North Dakota. The deal with North Dakota’s Public Service Commission settled allegations that ETP removed too many trees in some areas and that it improperly handled a pipeline route change after discovering Native American artifacts. The artifacts were not disturbed. The agreement required the company to replant trees and shrubs at a higher ratio in the disputed areas, along with an additional 20,000 trees along the entire route. ETP filed documents in October detailing efforts by a contractor to plant 141,000 trees and shrubs, but the PSC asked the company a month later to provide more documentation that it had complied with all settlement terms.
TigerSwan loses bid for attorney fees in North Dakota case (AP) — A North Dakota judge has refused to award attorney fees to a North Carolina security company that won a court case in the wake of protests over the Dakota Access oil pipeline. North Dakota’s Private Investigative and Security Board sued TigerSwan in 2017, alleging the company that handled security for the pipeline developer illegally operated without a state license. Judge John Grinsteiner dismissed the case, and TigerSwan sought reimbursement for at least $165,000 in attorney fees. Grinsteiner last month rejected the request, saying the board’s case wasn’t frivolous even though the board lost. TigerSwan hasn’t decided whether to appeal. The board has appealed the dismissal of its case to the state Supreme Court and also is seeking up to $2 million in fines against TigerSwan through an administrative complaint .
How TigerSwan Infiltrated Standing Rock and the Dakota Access Pipeline Movement - - For months, a man calling himself Joel Edwards had posed as a pipeline opponent, attending protests, befriending water protectors, and paying for hotel rooms, supplies, and booze. He told some people he had a job with a hotel that allowed him to travel, others that he was a freelance journalist reporting on the pipeline resistance. But five former contractors for TigerSwan, the secretive security firm hired by Energy Transfer to guard the pipeline, confirmed to The Intercept that Joel was an undercover intelligence operative. His real name was Joel Edward McCollough, and he had been sent to collect information on the protesters, explicitly targeting those who were down on their luck. Horne, who struggled with addiction, appeared to be a perfect target. McCollough passed along what he learned to his superiors at TigerSwan, who attempted to use the information to thwart protest activity and identify people or plots that represented threats to the pipeline. Traces of his surveillance turned up in TigerSwan’s daily situation reports, which were written for Energy Transfer and at times passed to law enforcement. The former TigerSwan contractors interviewed by The Intercept, who declined to be named because it would threaten their continued work in the industry, had either worked with McCollough directly or knew of him through internal communications.Like other contractors working for TigerSwan, McCollough had developed the skills he deployed in the Dakota Access pipeline fight during the U.S. war in Iraq, where he served as a Marine Corps interrogator and counterintelligence specialist. McCollough was participating in something akin to a massive experiment in U.S. military-trained operatives applying lessons learned fighting insurgencies abroad to thousands of pipeline opponents engaged in protest against a Fortune 500 energy giant at home. Behind the operation was Energy Transfer, whose pipeline empire has been key to propelling the U.S. oil and gas boom at a moment when the devastating impacts of climate change demand a rapid halt in fossil fuel production.
Halliburton chairman retires amid probe into land deal with Zinke - The chairman of oilfield services firm Halliburton Co. has retired amid a federal investigation into a land deal he negotiated with outgoing Interior Secretary Ryan Zinke. David Lesar’s retirement was planned at least since May 2017. There is no indication that the ongoing probe by the Interior Department’s Office of the Inspector General (OIG) implicates Lesar, since it is focused on whether Zinke violated federal ethics standards in the deal. Lesar’s retirement was effective Monday. Halliburton said Wednesday that Jeff Miller, the current president and CEO, will also serve as chairman going forward.Zinke, through a nonprofit he used to head, negotiated the deal with a development backed in part by Lesar regarding a plot of land the nonprofit owned in Zinke’s hometown of Whitefish, Mont. The deal was first reported by Politico last year.The OIG has since referred the probe to the Justice Department for potential criminal prosecution. The office, which is closed as part of the ongoing partial government shutdown, didn’t respond to a request for comment Wednesday.Zinke resigned last month from Interior, and his last day in the post is Wednesday. He has consistently argued that he did nothing wrong.Shortly after Politico reported on the deal in June 2018, he called the report “fake news.” “Clearly, I'm not on the board anymore. My wife runs the board,” Zinke said of the nonprofit on Montana radio show Voices of Montana. “And they make a letter of intent for my wife that, you know what, the community is for this project, the city approves it, it's a good project for Whitefish, we'll share some parking lots with you. That's it,” he said. Halliburton has refused to comment on the matter, saying it involves Lesar strictly in his personal capacity.
Fracking Bust? Shale Wells Across US Churning Out Less Oil Than Projected - The implementation of hydraulic fracturing has helped propel the U.S. into an energy superpower, but there are signs that the fracking boom might not be as productive as developers assumed. The U.S. surpassed Saudi Arabia and Russia in September to become the largest oil producer in the world. The historic milestone came as American oil production roughly doubled over the course of just eight years. While the fracking boom predates President Donald Trump’s time in office, the gains in production were aided in the Trump administration’s aggressive regulatory rollback and streamline of drilling permits that encouraged development on federal lands. The U.S. shale boom has even rivaled the Organization of the Petroleum Exporting Countries’ (OPEC) influence on the market, with the international oil cartel being forced to work around the vast increase in supply. However, an investigation by The Wall Street Journal suggests that thousands of shale wells in the U.S. are not yielding as much as developers originally projected to their investors. After analyzing around 16,000 wells that are operated by 29 of the largest fracking companies in oil basins in Texas and North Dakota, WSJ found two-thirds of the projections made by producers between 2014 and 2017 in the country’s four top drilling regions were too optimistic. Altogether, fracking companies that made forecasts are on course to pump almost 10 percent less oil and gas than they originally projected, WSJ reported Wednesday. This number is commensurate to nearly 1 billion barrels of oil and gas over three decades, and worth over $30 billion.
California 2018 crude-by-rail imports reach highest level since 2013-14: state — California crude imports by rail in 2018 rebounded from the year prior and are nearing levels not seen since the initial crude-by-rail heyday of 2013-14, according to the latest figures from the state government. California imported an average of 447,063 b/d in the first nine months of 2018, according to the latest figures from California Supply Analysis Office data shared Wednesday with S&P Global Platts. That is the highest level after a record high of 524,731 b/d in 2013 and 478,090 b/d in 2014. California receives crude by rail from New Mexico, Wyoming and Canada. The surge in imports in 2018 is due to exports more than doubling from New Mexico and Canada. New Mexico's crude-by-rail to California in September was about 207,000 b/d compared with just over 80,000 b/d in January. Western Canada sent nearly 275,000 b/d in September compared with 116,000 b/d at the beginning of the year. In comparison, imports over 2018 from Wyoming, home to some of the Bakken shale formation, were essentially stable over the initial nine months at about 90,000 b/d. Canada's oil industry has been forced to take a second look at crude by rail to alleviate what has been a glut of supply and no spare takeaway capacity. Pipelines are full and yet the production has continued to rise there, leading to record-high exports from the country to the US by rail. It is worth noting, however, that there is some discrepancy between California's data and figures from Canada. In May-September of 2018, California reported imports of roughly 306,000 b/d of crude from Canada on average. Canada's National Energy Board figures showed the country exported about 222,000 b/d during that time. Though the two agencies' figures do not exactly align, it is clear Californian refiners are taking advantage of increased oil production in nearby regions as an offset to crude imported by water from outside North America.
Keeping watch, pipeline protesters brave cold nights on Burnaby Mountain - The pipeline protesters aren’t allowed to have heating or a fire but are persisting in their months-long vigil, keeping tabs on the nearby tank farm and standing in opposition to the planned expansion of the pipeline, which carries diluted bitumen from Alberta. The Watch House has stood just meters from the outer gate of the tank farm since March, when it was built in Forest Grove Park by members of the Tsleil-Waututh Nation. The cedar building hasn’t moved since, even as the nearby Camp Cloud protest camp was evicted forcefully by Burnaby RCMP and municipal staff. The Watch House was built in March, during a day of protest against the proposed expansion of a pipeline, which carries diluted bitumen from Alberta. - Jennifer Gauthier In September, Will George, a Tsleil-Waututh man designated as a guardian of the Watch House, told the NOW the structure was set to come down following the Federal Court of Appeal ruling that quashed federal approval of the pipeline’s proposed expansion. But that plan changed when it became clear Prime Minister Justin Trudeau planned to move forward with the project – now owned by the federal government. The nearby support camp, set up in a soccer field, came down voluntarily. Protests raged on the mountain and at the nearby Westridge Marine Terminal throughout the summer, at times resulting in daily arrests of demonstrators who allegedly violated a court injunction. But the blockades also stopped as the FCA ruling put a halt to the controversial expansion project. But the Watch House remains. Layden said he plans to keep sleeping in the cold until it’s time for the building to come down. That will only happen if a court orders its removal or the expansion project is cancelled once and for all, he said. Layden said locals regularly bring food and words of support. And a pair of Squamish carvers are working on a totem pole just outside the Watch House. The pole includes a watchman, the Watch House’s symbol; a wolf, the totem of the Tsleil-Waututh Nation; and Tahlequah, the mother orca also known as J35 who carried her dead calf for 17 days off the coast of B.C. and Washington this past summer.
Oil and Gas Commission Confirms Fracking Caused Earthquakes Felt by Hundreds - TheTyee.ca - British Columbia’s energy regulator confirmed that Canadian Natural Resources Ltd. caused three felt earthquakes while conducting hydraulic fracturing operations south of Fort St. John last month. In an industry bulletin, the regulator also revealed that CNRL well operators expected that “induced seismicity was likely to occur, but events larger than magnitude 3 were not expected.”Instead the company triggered events measuring magnitude 3.0, 4.0 and 4.5 on Nov. 29 that rattled homes and were felt by hundreds of citizens, as well as construction workers at the Site C dam site.“All hydraulic fracture operations within the lower Montney formation will remain suspended” at the CNRL well pad “pending the results of a detailed technical review,” said the bulletin. Gail Atkinson, one of Canada’s top seismic hazard experts, told The Tyee that if the magnitude 4.5 earthquake had occurred in a densely populated area it would have caused property damage. In 2017 fracking operations in Sichuan, China, did just that by triggering a similar sized tremor. Industry operations induced a magnitude 4.7 earthquake that damaged or destroyed nearly 600 homes. According to a 2017 study published in the science journal Nature, China’s fracking industry has triggered four magnitude 4.0 quakes or greater in addition to 2,400 smaller scale tremors in the Sichuan Basin, the country’s richest natural gas deposit. B.C.’s fracking industry has chalked up a similar record of seismic activity in the Montney basin, a major shale gas resource stretching across B.C. and Alberta. Since 2014, B.C.’s fracking industry has triggered thousands of quakes, including 43 greater than a magnitude of 3.0 and three greater than magnitude of 4.0, according to an Oil and Gas Commission presentation at a Banff scientific conference last October.
Opinion- Our house is on fire, and many Albertans want more lighters - Do we want to save the planet or get rich and watch it die? It boils down to this. 1) Albertans have become very wealthy by exporting fossil fuels. 2) Scientists state that the climate crisis is an existential threat to civilization. 3) The only way to minimize catastrophic climate change is to immediately decrease our fossil fuel use as quickly as possible. 4) 3 threatens 1. Let’s unpack some of this, shall we? 1) Due to geographical fortune, our province sits on a vast reservoir of fossil fuels: coal, natural gas and oil. With their high energy content and transportability, they have been highly desired for (historically) a much higher value than their extraction cost, which has made us extraordinarily rich. Even now, in the downturn, even as many people are hurting financially, we still have the highest average monthly income in Canada. Being rich is fun, and we don’t want it to end. The problem is Point 2. As time passes, and we put more and more greenhouse gases into the atmosphere, it’s becoming increasingly clear that all that we love is at risk. Our ecosystems, food systems, economic systems, life support systems. Scientists are talking about a doomsday scenario where it all just collapses, within our lifetimes, if we don’t act now. There is this persistent hope that we here in Alberta we’ll be somehow spared from this fate. We live up in the North, so we’ll just get nicer winters. And the joys of being landlocked is we don’t even have a coastline to deal with as the seas rise. These are false hopes. Of the five most costly natural disasters in Canadian history, three have occurred in Alberta, all in the last decade. And it is going to get much, much worse as temperatures rise. We are not safe
Downtown Gatineau oil spill contaminates Ottawa River - A large but undefined amount of heating oil has found its way into the Ottawa River following a spill in downtown Gatineau. The spill ironically occurred near the offices of the provincial environment ministry. According to ministry spokesperson and Outaouais Environmental Control Center regional director Alexandre Ouellet, the spill happened at 170 rue de l’Hôtel de Ville during a delivery the week before Christmas. An initial statement by the Quebec Ministry of Environment and Fight Against Climate Change said that the spill was between 700 and 1,200 litres. A later report pegged the spilled amount to around 200 to 300 litres. Ouellet said that the oil spilled on to the pavement and found its way into a storm drain, which flows into the Ottawa River. The minister offered assurances that an environmental emergency team has been dispatched to mitigate the damage and to ensure the safety of the public. The minister additionally claimed in a statement on December 23 that the impact of the spill to the river is still low. CBC News reported that the Ottawa River is a source of potable water for up to two million people. “An oil spill in the aquatic environment is never good news,” said Patrick Nadeau, executive director of Ottawa Riverkeeper, a charity organization dedicated to keeping the river and its tributaries safe. Nadeau added that the oil spilled into the river while it was still covered in ice, which could complicate any clean-up.
Arctic refuge moves closer to opening for oil – The Trump administration moved closer on Dec. 20 to opening thousands of miles within Alaska’s pristine Arctic National Wildlife Refuge to oil and gas leasing, issuing a draft report that concluded the polar bears, caribou and other wildlife could safely share their untouched wilderness with oil and gas producers. The report released by the Bureau of Land Management studied the environmental impact of opening between two-thirds and all of 1.65 million acres of coastal plain within the remote refuge for oil and gas leasing. Release of the legally required environmental impact statement marks one of the last major actions in office by Interior Secretary Ryan Zinke, an ardent supporter of the oil and gas industry who leaves office Jan. 2 amid ethics investigations. In a statement, Zinke called the step toward opening Alaska’s North Slope for oil and gas development a move toward an “energy-dominant America.” A strong leasing program within the wilderness area “helps us realize our tremendous energy potential without harming our environment or way of life,” said Sen. Lisa Murkowski, R-Alaska, chairwoman of the Senate’s Energy and Natural Resources Committee, in another statement.The administration’s environmental review acknowledged that opening the coastal plains within the nation’s largest wildlife refuge would impact Alaska Native hunters, as well as caribou herds and other arctic animals and migratory birds that depend upon the refuge. The report concluded, however, that the lease sales could be carried out “while balancing biological and ecological concerns.”
Campaigners win a victory over fracking fiasco - - Anti-frackers were declaring a victory this week as Cuadrilla removed key equipment from its Preston New Road (PNR) site in Lancashire. Five fracking pumps, alongside other key fracking equipment was seen leaving the site near Blackpool on Tuesday of this week. Frack Free Lancashire called on the company to “remove the rest of their equipment and leave once and for all”. Although the company has promised to be back in 2019, it rounds off a year of problems for Cuadrilla. PNR was supposed to be the site of the first high volume frack in Britain since fracking caused earthquakes in 2011. But the area has been plagued by earth tremors since fracking began on 15 October—causing operations to be halted repeatedly. The largest measured 1.5ML (local magnitude)—the same strength as one of the earthquakes that stopped fracking in Preece Hall seven years ago, also carried out by Cuadrilla. Despite the company boasting of an “amazing year”, its share price has tumbled, and campaigners say financial difficulties may be the reason behind withdrawing equipment. Frack Free Lancashire said that it believes “this removal of equipment may be indicative of potential resourcing issues as investors turn their backs on the fracking industry in general, following a series of bad news stories over the last few weeks”.
Oil in Milford Haven estuary 'from pipe leak' contained - The source of a leak which led to an unknown amount of "thick, heavy oil" spilling into a Pembrokeshire estuary has been contained, officials said. It happened at a jetty on the Milford Haven waterway - by the Valero refinery - at about midnight on Wednesday. It is understood the leak came from pipework and booms have been placed in the water to stop the oil spreading. But Milford Haven harbourmaster Mike Ryan said a small amount had reached shore. Valero has apologised. The company said an operation was under way to respond to the spill and it had "activated its contingency response plans". Pembrokeshire council said it was hoped the oil would be collected "over the next day or two" and Cristoffer Tomos, the authority's cabinet member for environment, said the leak was understood to have come from pipework. The Valero jetty, where the spill took place, is on the south side of the Milford Haven estuary Shipping was halted while the spill was evaluated, but the route has since reopened. The spillage was initially reported by Valero which told the Port of Milford Haven a "petroleum product" had been released. Harbourmaster Mr Ryan said the source had been contained and he was expecting an update from Valero on Friday about how much oil went into the water. "There is oil coming ashore and I suspect that will continue for the next few days," he said. "We've had reports later on this afternoon of oil globules of smaller sizes coming ashore at Dale and we're working to put plans in place to recover them tomorrow morning." He added: "We'll see oil emerge in various places and we are primed and ready with our multi-agency colleagues to tackle that situation as and when it arises." Andrea Winterton, from Natural Resources Wales, said: "Our officers have been working with Milford Haven Port Authority, and other organisations, taking action to reduce the impact of an oil spill in the waterway." She added beach surveys were being carried out and booms were being used to protect the salt marshes around Sandy Haven and the Gann estuary. The public - particularly dog owners - has been urged to watch out for pollution on the coastline.
Milford Haven oil spill estimated at 'up to 10,000 litres' - BBC News - A "heavy" oil spill which prompted a major clean-up operation could be as much as 10,000 litres, port chiefs have said. The Valero Jetty in Pembrokeshire, was closed off after the leak on Thursday. Officials said the vast majority of the spill was contained - although more tests are under way. Andrea Winterton, of Natural Resources Wales (NRW), said it was difficult to predict what the environmental impacts will be. "We're not sure where or when any further oil will come ashore... but we'll keep monitoring all the beaches and working with our partners to ensure where it does come ashore, we clean it up appropriately," she said. "The oil has stopped, the leak has stopped... until there's more that comes ashore, it's very difficult to say what's happened to it and what the environmental impacts are going to be." The spillage was initially reported by the Valero refinery, with the firm now estimating that 7,500 to 10,000 litres (1,650 to 2,200 gallons) of "heavy fuel oil" leaked overnight between 2 and 3 January. As a comparison, the average household bath holds 80 litres of water. It is understood the leak came from pipework. Habourmaster Mike Ryan said a "well-rehearsed" clean-up operation involved Natural Resources Wales, Pembrokeshire County Council, Maritime Coastguard Agency as well as Valero. Floating devices called "booms" were used to contain most of the spillage and a drone has been used to see where the oil has spread. Officials said oil has been seen on the shore at Dale and Musselwick Bay. In the meantime, the boom devices will stay put until NRW is "confident the risk" to wildlife and sensitive salt marshes has passed. The agency added a full investigation was under way.
Clean-up work continues after haven waterway oil spill - Multiple agencies continue to carry out work to survey, clean-up and put in place measures to protect the environment and wildlife after an oil pollution incident in the Milford Haven waterway. Mike Ryan, Harbourmaster at the Port of Milford Haven, said: “A multi-agency response is continuing at the Port of Milford Haven following an oil pollution incident at the Valero Pembroke Refinery. “Valero have today estimated that approximately 7.5-10m³ of heavy fuel oil had leaked overnight on 2/3rd January from a pipe connecting the jetty to the refinery but that by first light the leak had been contained. “As soon as the incident was reported, just after midnight, we instigated our well-rehearsed oil pollution plan in which we (Milford Haven Port Authority) have delegated command for the on-water clean-up of oil. Multiple agencies including Natural Resources Wales, Pembrokeshire County Council, Maritime Coastguard Agency and Valero have been working with us since early hours on 3rd January to survey, clean-up and put in place measures to protect the environment and wildlife. “The MCA are supporting the incident response through the loan of equipment to supplement our own assets. The MCA are using their contracted surveillance and verification aircraft and the images provided by this equipment have assisted the teams to locate any surface oil, its direction of travel and dispersal. “The Port’s pollution vessel ‘Sea Sweep’ has patrolled and collected some surface oil; however most of the oil has naturally dispersed and the MCA report from this morning’s flight has confirmed this. “Booming is in place at Sandy Haven and teams are deploying booms around the Gann estuary near Dale, today. “Currently there have been sightings of oil on shore at Dale and Musselwick Bay. A clean-up operation is underway and agencies will continue to monitor the surrounding shoreline over the coming days.”
Pollution fears rise around Svalbard - A particularly sensitive area of Svalbard was under threat of oil pollution this week, after a trawler grounded in bad weather in a remote northern area of the Norwegian-administered island group in the Arctic. On board the trawler are 300,000 liters of diesel oil that may start to leak. “One drop of diesel that makes a mark just the size of a coin is enough to kill a sea bird,” Sigurd Enge of the environmental group Bellona told Norwegian Broadcasting (NRK) on Monday. “Diesel oil destroys the layers of fat that protect the birds.” The Norwegian trawler Northguider, based in Storebø at Austvoll, south of Bergen, was out shrimping when it grounded at Hinlopenrenna on Svalbard’s far north side just before the weekend. All 14 people on board were eventually rescued and taken on board a search and rescue helicopter that brought them safely to Longyearbyen, Svalbard’s main settlement on the island of Spitsbergen. The vessel, however, remained grounded on Monday with concerns rising that its fuel could spill into the Arctic waters that are home to both seafood and birds. “Whatever spills into the sea stays in the sea,” Enge told NRK. “Nor is it possible to carry out any oil spill prevention in the area. There’s no equipment to mop up oil in a sensible manner under the conditions there. As soon as the oil enters the sea, the damage is done.” Enge also worries that the oil can freeze into the ice in the area. “It can keep lying there until the spring, and then we’ll have more pollution when the ice melts and wildlife returns,” he said. “This is an area that has a lot of seabirds in the spring and summer,” Morten Wedege of the local governing office (Sysselmannen på Svalbard). “It’s a resting place for walrus. There’s a lot of other marine life here, like seals and whales. It’s wildlife that’s especially vulnerable to oil and pollution.” The Coast Guard’s largest vessel, named Svalbard, left its home port at Sortland Sunday, bound for the site of the grounding where its crew will attempt to board the Northguider and assess its damage. Nearly round-the-clock darkness at this time of year will make the work difficult, but the crew will also attempt to empty the trawler’s diesel tanks. If the vessel remains afloat, attempts would also be made to pull it off the rocks where it grounded and tow it south.
Natural Gas Market Braces for Slump -- European natural gas prices look set to fall for the first time in four years in 2019 as buyers keep a close eye on flows from Russia that reached a record last year. With a healthy amount of fuel in storage after a mild start to this winter, the outlook is bearish. That’s being exacerbated by an expected increase in imports, which would help offset declining production in the region. While Russia intends to maintain its grip on about 40 percent of the European market, fluctuations in that dependency will be closely monitored. “The question is how much gas Russia ends up delivering into the European markets -- that will be a key determinant,” “Russia expressed publicly it wants to keep deliveries. That could generate a real collapse in prices in the summer months, when we will see a big LNG supply.” The Dutch next-month gas contract is expected to end 2019 at 22 euros a megawatt-hour ($7.35 a million British thermal units), according to the median of seven analysts surveyed by Bloomberg. That’s a bit below the average of 22.28 euros during 2018 and well below the peak for the year of more than 29 euros. Kremlin-backed energy giant Gazprom PJSC reported a record 201 billion cubic meters of natural gas exports to Europe in 2018 and plans to maintain those volumes into 2020. Exports were up 2 percent in the year through Dec. 15.There’s questions whether Russia will be able to follow through on that ambition later in the year when a flood of liquefied natural gas is set to enter European markets. Europe’s LNG imports are expected to increase by 14 percent to 56 billion cubic meters, according to Morgan Stanley, after achieving records over the past month. Russia could follow the initial plan focusing on its market share, or it could decide to protect prices, putting the brakes on exports. “A huge wave of LNG in Europe is pushing the natural gas market,” . “The willingness of the U.S. to sign deals that are not destination-defined are also reframing the market.”
The Mediterranean Pipeline Wars Are Heating Up - Things have been quite active in the Eastern Mediterranean lately, with Israel, Cyprus and Greece pushing forward for the realization of the EastMed pipeline, a new gas conduit destined to diversify Europe’s natural gas sources and find a long-term reliable market outlet for all the recent Mediterranean gas discoveries. The three sides have reached an agreement in late November (roughly a year after signing the MoU) to lay the pipeline, the estimated cost of which hovers around $7 billion (roughly the same as rival TurkStream’s construction cost). Yet behind the brave facade, it is still very early to talk about EastMed as a viable and profitable project as it faces an uphill battle with traditionally difficult Levantine geopolitics, as well as field geology. The EastMed gas pipeline is expected to start some 170 kilometers off the southern coast of Cyprus and reach Otranto on the Puglian coast of Italy via the island of Crete and the Greek mainland. Since most of its subsea section is projected to be laid at depths of 3-3.5 kilometer, in case it is built it would become the deepest subsea gas pipeline, most probably the longest, too, with an estimated length of 1900km. The countries involved proceed from the premise that the pipeline’s throughput capacity would be 20 BCM per year (706 BCf), although previous estimates were within the 12-16 BCm per year interval. The idea of EastMed was first flaunted around 2009-2010 as the first more or less substantial gas discovery in the Eastern Mediterranean, the Tamar gas field in Israel’s offshore zone, paved the way for speculations about an impending gas boom. Then came the 535 BCm (18.9 TCf) Leviathan in 2010 and the 850 BCm (30 TCf) Zohr discovery in offshore Egypt five years later and suddenly it seemed that an Eastern Mediterranean gas expansion is inevitable. Yet over the years, the operators of Leviathan have already allocated part of their total gas volumes to domestic power generating companies and most notably NEPCO, the Jordanian electric power company (1.6-2BCm per year). Egypt has been concentrating on meeting domestic needs and getting rid of LNG imports, moreover once it bounces back to gas exporter status in 2019, it will only use its own 2 LNG terminals in Damietta and Idku. Thus, a pertinent question arises – whose gas would be used to fill the EastMed pipeline? If the pipeline starts in offshore Cyprus, then it would be logical to expect that Cyprus’ gas bounty would be somehow utilized. Yet Cyprus has been lagging behind Egypt and Israel in its offshore endeavors and so far lacks a clear-cut giant field to base its supply future on.
The Battle To Control Russia's Pipelines - Rosneft is, as usual, involved in these developments, while Transneft is on the other side of the court. Both are under the control of the Russian government – albeit to a different extent (the Russian state owns 78.55 percent of Transneft and 50 percent + 1 share of Rosneft). Both are controlled by people quite close to the Russian President Vladimir Putin, therefore, at least in principle, should count as equidistant to political decision-making authorities. Yet the similarities pretty much end there – Transneft’s actions are controlled and dictated by the Anti-Monopoly Service, whilst Rosneft can act freely, be it in cases of investing in a new endeavor or crashing the Russian ruble with one of its currency machinations. Controlling 46 of Russian crude production (as of December 2018), Rosneft is by far the most newsworthy Russian company, to put it mildly. The first official shot in the Rosneft-Transneft standoff was fired in early 2017 when Rosneft and its newly acquired subsidiary Bashneft filed a claim against Transneft for process losses during pipeline transportation. In it, Rosneft stated that up to 0.7 million tons of crude were illegally misappropriated by Transneft – although other producers were roughly on equal footing and lost 0.13-0.15 percent of the crude transported, no one apart from Rosneft took the issue to court. The second point of contention emerged shortly thereafter when Transneft started to complain about deliberately low pipeline transportation tariffs (which supposedly were set by the Russian authorities with substantial backing, or lobbying you might say, from Rosneft) – instead of the 692 RUB per ton suggested by Transneft, the 2017 tariff was set by the Federal Anti-Monopoly Service (FAMS) at 399 RUB per ton. The latest confrontation took place just two to three weeks ago when Transneft signaled that it would seek damages from Rosneft due to the latter’s non-performance on using the new 8mtpa pipeline to its Komsomolsk Refinery in Russia’s Far East. The transportation company calculated that maintaining the pipeline in an idle condition from April 2018 to the current day cost it 1.5 billion rubles (roughly 25 million USD). Moreover, Transneft built the pipeline in a hurry and now its final ownership structure as well as its tariff regulation is still not settled. Rosneft stated that if it is to take part in the financing of the pipeline, it would want to take respective ownership of the pipeline.
Oil Tanker Firms Scrap Most Ships In Three Decades - Companies around the world have scrapped a record number of large crude tankers in 2018. About 100 vessels of the industry’s main crude carriers have been sent to India and Bangladesh for demolition, according to data from Clarkson Research Services Ltd., the statistical and research service arm of the world’s largest shipbroker. Bloomberg said the shipping bust is no surprise, as of September the vessels, which transport 40% of the world's crude, were on course for the worst charter rates in three decades. In an August report, Bloomberg specified the implosion of charter rates was due to a two-year reduction of OPEC cargoes and environmental regulations. As we have said before, the global growth slowdown has certainly not helped. Morgan Stanley estimates the global fleet of large crude carriers could lack 100 million barrels of transportation capacity in the first half of 2020.“It prolongs the period of profitability after the turnaround,” said Fotis Giannakoulis, a New York-based shipping analyst at the bank.“The more you scrap, the more you bring the recovery forward and accelerate its speed. The market will strengthen with high scrapping even with smallest growth in demand.”In other words, today's scrapping of vessels is seen as a deleveraging period to clear excess and rebalance the industry.
Butchulla Indigenous community condemns fracking on native land in Wide Bay-Burnett An Indigenous group has unanimously signed a declaration calling for fracking to be banned in the Wide Bay-Burnett region of south-east Queensland. It comes as three oil and exploration licences for the region, held by Blue Energy, expire at the end of this year and in March 2019. The Butchulla people, who are in the process of resolving the second part of their Native Title claim over Fraser Island, have called on the State Government to not renew the exploration company's permits. Native Title Applicant Gemma Cronin is worried about the possibility of fracking for coal seam gas or shale in the future. "You'd imagine we'd lose enormous amounts of country if something like that happened," Ms Cronin said. "Yes, there's gas here, yes there's maybe shale oil too, but it's also a seismic place and it's also a beautiful piece of Australia." Exploration company Blue Energy holds exploration licences for more than 2,900 square kilometres in the region, but cannot confirm if it is seeking to renew them. Managing Director John Phillips said the company was in discussion with the Government. "It will be a matter of public record shortly after the expiry date," Mr Phillips said.
Four years after oil spill, Southern Israeli nature reserve remains in Peril - Evrona Nature Reserve, the site of an oil leak followed by a waste pool spill, is still closed to public. On Dec. 4, 2014, a pipeline that carries oil between Eilat on the Gulf of Aqaba and Ashkelon on the Mediterranean Sea burst. Five million liters — about 1.3 million gallons — gushed from the buried pipe, bubbled up to the surface and crossed Highway 90 like a black river at high flood. The oil then snaked in hundreds of rivulets across the Evrona Nature Reserve, slowly flowing downhill through the dry wadis and streambeds into the very heart of the preserve. Photographs taken from drones and helicopters showed dark capillaries on yellow sand. And at the center of it all were the acacia trees, the keystone species giving life to everything else in this unfriendly terrain. What gives life are the rare floods, which allow groundwater to collect, a drop here and there between grains of sand, just a few meters below the surface. The groundwater collects at the center of the preserve, which is where the acacia trees grow. “Which is exactly where the oil flowed,”
U.S. Shale Challenges OPEC's Oil Dominance In Asia - The explosive growth of U.S. shale production has capped gains of international and U.S. oil prices, offsetting OPEC’s production cuts in the first half of the year and contributing to an emerging oil glut in the latter half in 2018. OPEC has now forged a new pact with its Russia-led non-OPEC allies to contain the oil price decline to $50 a barrel Brent—a price that is not enough to balance any budget of a Middle Eastern oil producer. But the consequences of rising U.S. light oil production from the shale fields have also rippled through international oil flows and trade, making OPEC’s heavyweights such as Saudi Arabia fight for keeping market share in their most prized market and the world’s fastest-growing oil consumption region, Asia. Thanks to the booming shale production, U.S. light oil exports have increased, taking market shares out of the lighter grades that Saudi Arabia and its fellow OPEC members are exporting to Asia. Moreover, increased crude oil production in the U.S. has also resulted in higher oil product exports which, combined with higher Chinese refined product exports, have created an oversupply of products in Asia, crashing refining margins earlier in December.U.S. crude oil production has been breaking records in recent months, according to data from the U.S. Energy Information Administration (EIA). Total U.S. petroleum exports have also been setting records over the past year, EIA data shows.U.S. light crude oil exports to Asia have also grown and even with China shunning American crude, U.S. sales to OPEC’s key market Asia have held relatively steady since August this year, according to data from Kpler compiled by Bloomberg.As OPEC is getting ready for another round of production cuts beginning January, Saudi Arabia for example is hell-bent on keeping its market share in Asia and has recently slashed the January prices of all its grades going to Asia, while it raised the prices for all grades bound for the U.S., Northwest Europe, and the Mediterranean. Saudi Aramco’s deepest cuts in Asian pricing were for the Super Light and Extra Light grades, slashed by US$2 and $1.50 a barrel from December’s prices, respectively. The official selling prices (OSPs) of Arab Light, Medium, and Heavy were also cut, by between $0.40 and $1.00 a barrel. The deepest cuts in the lighter grades reflect Saudi Arabia’s effort to keep its market share in Asia as competition from U.S. light oil intensifies, according to analysts.
The New Oil Order - In the decades preceding the arrival of U.S. shale oil, the oil market had only one stabilizing force, namely OPEC. The reason the oil market was structured as such was due to the nature of conventional oil production, most non-OPEC oil production prior to U.S. shale oil fell in one of two categories: major offshore projects that took 5 to 7 years to build (North Sea, Gulf of Mexico … etc.) or mature conventional onshore fields (U.S. conventional fields, Russian Siberian fields … etc.); both of these conventional oil supply sources were either non-responsive, or only slowly reactive, to changes in the oil price, major offshore oil projects tended to come online regardless of the oil price environment, while conventional onshore oil production with shallow decline rates (sub-10 percent) meant that even a slowdown in drilling would not impact total production in any meaningful way for an extended period of time.The aforementioned state of affairs meant that it was up to OPEC to adjust production to balance the market in case of abrupt supply or demand changes, OPEC had (and still has) the flexibility to withdraw millions of barrels from the market within a month or two if such a need arose (OPEC withdrawing 4m barrels from the market following the financial crisis in 2008/2009 is a case in point). The arrival of U.S. shale oil in size to the scene in 2014 has upended the OPEC/non-OPEC balancing act, by introducing a medium-term oil supply balancing mechanism that in the long run will prove supportive to the oil market, and especially so to non-shale oil producers. Non-OPEC production trends following the oil crash in 2014 are instrumental in demonstrating the points discussed in the introduction. Following the oil crash of late 2014, U.S. crude production (lower 48 ex-GOM) declined by one million barrels (EIA data) between December 2014 and December 2016: Shale oil which represented 70 percent of U.S. crude production on December 2014 (5.23M barrels) declined by 690K barrels, representing a 13 percent decline during that same time frame. U.S. shale oil production declined by 5.2 percent in the first year to 4.97M barrels (December 2015), and then declined by an additional 8.6 percent in the following year to 4.54M (December 2016).
Oil prices set for first yearly drop since 2015 - Oil prices gave up early gains on the final day of the year, despite a rising stock market, and were on track for their first annual decline in three years as concerns of a persistent supply glut lingered. Hints of progress on a possible U.S.-China trade deal, with U.S. President Donald Trump saying he had a "very good call" with Chinese President Xi Jinping, helped bolster market sentiment.Brent crude futures was up 13 cents at $53.34 a barrel around 12:22 p.m. ET, on pace for a 20 percent decline in 2018.U.S. West Texas Intermediate crude futures were at $45.29 a barrel, down 4 cents. WTI has fallen about 25 percent this year.Both contracts are down more than a third this quarter, the steepest decline since the fourth quarter of 2014.For most of 2018, oil prices were on the rise, driven up by healthy demand and supply concerns, especially around the impact of renewed U.S. sanctions against major producer Iran, which were introduced in early November.Brent crude, seen as a global benchmark for oil prices, rose by almost a third between January and October, to a high of $86.74 per barrel.That was the highest level since late 2014, the start of a deep market slump amid bulging global oversupply, and many leading analysts and traders at the time said they expected crude to hit $100 per barrel again by the end of 2018. Instead, Brent prices have wiped out all of 2018's gains, plunging by almost 40 percent from the year's high, in what has been one of the steepest oil market sell-offs of the past decades.
Oil prices are set for their worst year since 2015 — here's what went wrong ---In a year when Wall Street predicted oil would surpass $100 for the first time in four years, the oil market instead experienced its worst annual loss since 2015.The oil market's sudden about-face in the fourth quarter has ended a 2½-year recovery for oil prices following the 2014-2016 downturn. Analysts expect oil prices to rebound next year, but the geopolitical risks that have weighed on the market throughout 2018 will remain a big variable in the new year.U.S. crude settled on Monday at $45.41 a barrel, ending the year down nearly 25 percent. At around $54 a barrel, international benchmark Brent crude is down almost 20 percent in 2018. The declines mark the first annual loss and the biggest yearly drop since 2015, when both contracts fell more than 30 percent. Just three months ago, oil was trading at nearly four-year highs. While many analysts said the rally was unwarranted and warned a pullback was in the cards, few predicted the market would sell off so sharply. From peak to trough, U.S. crude has shed nearly half its value. With the benefit of hindsight, it's fairly easy to explain oil's plunge into a bear market. In May, the Trump administration restored sanctions on Iran, OPEC's third-biggest producer, raising concerns about a supply squeeze in the oil market. The following month, OPEC and a group of producers led by Russia abandoned their 2016 agreement to restrict supply. At the urging of Trump and oil customers, Saudi Arabia in particular turned on the taps, adding about 1 million barrels per day to the market between June and November.But by October, forecasters were warning that demand for oil would grow more slowly than previously anticipated. The same month, the stock market plunged, hammered by a sell-off in high-flying technology names, the ongoing U.S.-China trade dispute and rising interest rates.Investors began dumping risk assets, and by the end of the month, oil had plunged about $11 a barrel from its Oct. 3 high. Momentum trading and the rotation out of slumping crude futures and into rising natural gas contracts also deepened losses for oil, analysts say.Making matters worse, when the sanctions officially snapped back into place on Iran on Nov. 5, PresidentDonald Trump surprised the market by granting generous exemptions to the Islamic Republic's biggest customers. That meant Saudi Arabia, Russia and several other producers had been hiking output into a market where demand growth was moderating and fewer Iranian barrels than expected were lost.At year-end, the U.S.-China trade dispute remains unresolved, and the market remains concerned that a full-blown trade war between the world's two biggest economies will dent fuel demand. Meanwhile, American crude output is growing more quickly than expected, with the United States topping Saudi Arabia and Russia to become the world's biggest producer in the second half of 2018.
Oil Prices Rally On US-China Trade Deal Hopes - Oil prices rose sharply on Monday as soothing comments from both the US and Chinese presidents praising progress in trade talks helped spur hopes for a resolution to the US-China trade conflict. Brent crude futures rose nearly 2% to USD54.26 a barrel, but remained on track to post their first yearly drop in three years on concerns over supply glut. US West Texas Intermediate (WTI) crude futures were at USD46.08 a barrel, up 75 cents or 1.68% from their previous close. Brent crude prices fell almost 19% in 2018 while WTI prices dropped about 24%. Investors are pinning hopes for progress in trade talks between China and the US after US President Donald Trump on Saturday said that he had a "long and very good call" with Chinese President Xi Jinping and that a comprehensive trade deal between the US and China is moving along very well, raising hopes for a breakthrough in the trade dispute. Chinese state media also cited President Xi Jinping as saying that he believed both sides wanted "stable progress." Traders expect the downward pressure on oil prices to taper off gradually as an agreement to cut oil production reached between OPEC and its allies takes effect this week.
Oil falls as traders gear up for volatile 2019 - Oil prices fell on Wednesday, under pressure from rising output in major OPEC and non-OPEC producers and due to concerns about an economic slowdown that could weaken demand.Russian production hit a post-Soviet record in 2018, figures showed on Wednesday. Other data showed U.S. output reached a record in October and Iraq boosted oil exports in December.Brent crude fell 74 cents, or 1.4 percent, to $53.06 a barrel at 8:16 a.m. ET (1316 GMT). U.S. crude slipped 71 cents, or 1.6 percent, to $44.70."The omens are far from encouraging," said Stephen Brennock of oil broker PVM, citing rising non-OPEC supply and the likelihood of further increases in oil inventories. "The current bearish bias will therefore continue in the near term and it stands to reason that oil will struggle to break out from its current trough," he said.U.S. President Donald Trump celebrated the low prices. "Do you think it's just luck that gas prices are so low, and falling? Low gas prices are like another Tax Cut!" he wrote on his official Twitter account on Tuesday. Adding to concern about economic slowdown, a series of purchasing managers' indexes for December mostly showed declines or slowdowns in manufacturing activity across Asia — the main growth region for oil demand.
JP Morgan: If OPEC doesn't maintain its cuts, oil could stay lower for longer - If the Organization of the Petroleum Exporting Countries (OPEC) does not follow through with its commitment to reduce oil production throughout this year, Brent crude prices could struggle to rise, according to J.P. Morgan's head of Asia Pacific oil and gas. In an early December meeting, OPEC and non-OPEC countries agreed to take about 1.2 million barrels a day off the oil market — initially for six months — starting January, amid a persistent imbalance between global oil supply and demand. "Well, J.P. Morgan said prior to the OPEC meeting early December, that if OPEC didn't really cut by more than around 1.2 million barrels per day, and they did just for the first half, (not) for the full year, that we could gravitate toward ... our low-oil-price scenario, which is $55 Brent for 2019," Scott Darling told CNBC's "Squawk Box" on Wednesday. On Wednesday afternoon during Asian hours, Brent traded down around 1 percent at $53.28.
Oil Inexplicably Soars Over $2 In Minutes Amid Chinese Fears Over Rout Contagion - Starting just before 10am ET, oil staged a remarkable surge, rising from sessions lows of $44.50 to $46.50 in the matter of minute, a remarkable levitation which helped trim the overall market's losses by more than half which pushing Treasury yields modestly higher. While there was no immediate catalyst for this stunning price spike - some have cited falling Saudi exports which dropped half a million barrels to 7.25mmb/d thanks to lower flows to the U.S. and China, but that makes little sense as i) that was already priced in as part of the latest oil output cuts, and ii) the US is only importing less as a result of its own record production - overnight news which flew under the radar may have something to do with the surge in oil.Readers will recall that last week, the shares of Asia's largest petroleum refiner Sinopec plunged following reports that two senior officials at Unipec, the trading subsidiary of Sinopec, had been dismissed by their Communist Party overseers following major losses on soured bets related to oil prices. While Sinopec confirmed the suspensions saying only they were related to work matters, it only said that Unipec had "made some losses" from crude trading because of a drop in prices, but didn’t link the two. And yet, overnight Bloomberg reported that in a confirmation that this particular story may have a lot of room to run, China’s state assets regulator was checking on the financial status of derivative trading accounts at some major state companies following the Unipex losses, citing people with knowledge of the situation. Specifically, as the Bloomberg source revealed, confirming that quietly Beijing is increasingly concerned afraid potential oil price contagion, the State-Owned Assets Supervision and Administration Commission would inspect accounts of companies with derivative trading operations following the Unipec loss, with said inspections said to focus on the profit/loss status of commodity hedging positions. In other words, Beijing is worried that the Unipec losses may lead to some form of contagion, however good luck to anyone finding out just what has China's top power echolon freaked out.
Oil volatile, ends up 2 percent but demand concerns still weigh (Reuters) - Oil prices rose about 2 percent in choppy trading on Wednesday, supported by a slight recovery on Wall Street, even as concerns remained about weakening global economic growth which could hurt demand for oil. Brent crude futures gained $1.11, or 2.1 percent, to settle at $54.91 a barrel, after trading between $52.51 and $56.56. U.S. West Texas Intermediate (WTI) crude CLc1 ended $1.13, or 2.5 percent, higher at $46.54 a barrel, after hitting a session low at $44.35 and high at $47.78. Oil futures were buoyed by U.S. equity markets as major stock indices pared earlier losses. [.N] Crude futures have recently tracked stocks on Wall Street, which in 2018 recorded its worst year in a decade. However, manufacturing data from China earlier added to ongoing concerns about a slowing global economy and increased output out of countries like Russia. China’s factory activity contracted for the first time in more than two years in December, highlighting the challenges facing Beijing as it seeks to end a bruising trade war with Washington. “We still view some slippage in the Chinese economy as a significant bearish consideration given the fact that they had become the largest crude importer in the world,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note Euro zone manufacturing data also proved disappointing, as activity barely expanded at the end of 2018, according to a survey. Worries about an economic slowdown and excess supply dragged down oil prices from multi-year highs reached in October 2018. Crude futures ended 2018 down for the first year since 2015, with WTI slumping 25 percent and Brent tumbling 21 percent.
OPEC Output Falls Most in Almost 2 Years - -- Before its agreement to cut oil supplies even started, OPEC’s production plunged by the most in almost two years last month. In a sign of the urgency felt by the cartel amid tumbling crude prices, leading member Saudi Arabia throttled back production, according to a Bloomberg survey of officials, analysts and ship-tracking data. The group’s pact to curb output only formally started this week. The kingdom’s deliberate cutbacks were compounded by unplanned losses in Iran, which is being targeted by U.S. sanctions, and in Libya, where protests halted the biggest oil field. As a result, oil output from the Organization of Petroleum Exporting Countries fell 530,000 barrels a day to 32.6 million a day last month. It’s the sharpest pullback since January 2017, when the group first embarked on its strategy to clear the glut created by rising supplies of U.S. shale oil. A global coalition of oil producers known as OPEC+, which comprises both members of the group and other exporters including Russia, agreed on Dec. 7 to reduce output during the first six months of 2019. Crude prices failed to rally however, and instead slumped to the lowest in more than a year. Brent crude futures climbed as much as 5.1 percent on Wednesday as shipping data showed Saudi Arabia was delivering its announced cutbacks, but at about $56 a barrel it remains 35 percent below the four-year peak reached in early October. Investors remain concerned that OPEC+ isn’t cutting enough to make way for another surge of supply anticipated from shale oil drillers in America. They’re also increasingly worried that a slowing global economy, coupled with the U.S.-China trade dispute, will hit fuel demand and swell the pile-up of unwanted crude. The Saudis curtailed production by 420,000 barrels a day to 10.65 million last month, from a record of just above 11 million reached in November, the survey showed. As is often the case with OPEC, not all of the supply restraint seen last month was deliberate. Libya’s production fell by 110,000 barrels a day to 1 million a day. Sharara, the country’s biggest oil field, has been offline since it was stormed in mid-December by an armed group and demonstrators demanding better government services. The situation in the North African nation worsened on Wednesday when bad weather at the Es Sider port forced a separate output reduction of 100,000 barrels a day. Iran’s crude production fell by 120,000 barrels a day last month to 2.92 million a day, the survey showed.
Oil prices wobble as Saudi supply cuts offset economic growth concerns - Oil prices were choppy on Thursday, helped by dollar weakness and Saudi output cuts that offset concerns about a crude glut and signs of slowing economic growth. Crude futures slumped overnight on China growth concerns, rebounded as U.S. trading got under way and then pulled back as stock markets slumped on bearish U.S. manufacturing data. Brent crude futures were up 24 cents at $55.15 a barrel by 10:13 a.m. ET (1513 GMT). U.S. West Texas Intermediate crude oil futures fell 16 cents to $46.38 a barrel. "The feeling is that OPEC is delivering on cuts," SEB head of commodities Bjarne Schieldrop said, citing a Bloomberg survey showing Saudi Arabia had cut production significantly. The dollar added support as it slipped against a basket of currencies, making dollar-denominated oil cheaper for holders of other currencies. OPEC, led by Saudi Arabia, alongside other producers led by Russia, agreed last year to rein in supplies starting from January after oil tumbled from above $86 on worries about surging output. In physical oil markets, Riyadh is expected to cut February prices for heavier crude grades sold to Asia by up to 50 cents a barrel due to weaker fuel oil margins, respondents to a Reuters survey said on Thursday. Libya's closed Sharara oilfield is expected to lose 8,500 barrels per day to looting, state oil company NOC said on Thursday. NOC declared force majeure on Dec. 17 at Sharara, its biggest oilfield, after it was taken over on Dec. 8 by tribesmen, armed protesters and state guards demanding salary payments and development funds. Libya's oil exports have also been suspended as bad weather conditions forced the OPEC country to shut all its export terminals, a local shipping agent and a Libyan oil source told Reuters on Thursday. President Donald Trump took credit for driving down oil prices, saying the drop amounted to a tax cut for Americans.
Oil rises in choppy trade as OPEC supply cuts vie with demand worry (Reuters) - Oil prices rose more than 1 percent on Thursday in volatile trade, drawing support from signs that Saudi Arabia is cutting crude output but pressured by concerns that slowing global economic growth could dent demand. Brent crude
Oil rises on China-US trade talks, OPEC cuts - Oil prices rose on Friday after China said it would hold trade talks with the United States and both countries reported strong economic data, while signs of lower crude supply also lent support. OPEC cut crude output in December, a Reuters survey showed, and the American Petroleum Institute reported a drop in U.S. crude inventories. Government inventory data will be released later on Friday. Brent crude, the global benchmark, rose $1.34, or 2.4 percent, to $57.29 a barrel by 8:46 a.m. ET (1346 GMT). U.S. crude oil was up 97 cents, or 2.1 percent, at $48.06. Futures extended gains after monthly data showed the United States added 312,000 jobs in December, easily beating expectations for 176,000 new positions. China's services sector extended its solid expansion in December, a private survey showed on Friday, bucking a trend of downbeat economic data. A survey from the Institute for Supply Management on Thursday showed U.S. factory activity slowed more than expected in December, and leading economies in Asia and Europe have reported a fall in manufacturing activity. Oil gained further support from the latest supply report from the API industry group, which said on Thursday that U.S. crude stocks fell by 4.5 million barrels last week. Both benchmarks are on track for solid gains in the first week of 2019 trading despite rising concerns that the China-U.S. trade war will lead to a global economic slowdown. But in comments that helped oil to rally, China's commerce ministry said it would hold vice-ministerial trade talks with U.S. counterparts in Beijing on Jan. 7-8. The two nations have been locked in a trade war for much of the past year, disrupting the flow of hundreds of billions of dollars worth of goods, raising concern of slowing growth and roiling financial markets. Despite the demand-side concerns, oil has received some support as supply cuts announced by the global coalition of producers known as OPEC+ kick in. OPEC, Russia and other non-members agreed in December to reduce supply by 1.2 million barrels per day in 2019. OPEC's share of that cut is 800,000 bpd. The Reuters survey on Thursday found OPEC supply fell by 460,000 bpd in December, following assessments by Bloomberg and JBC Energy also showing a sizable decline.
Falling Rig Count Supports Crude Prices - More good news came in today for the oil bulls as Baker Hughes reported a 8-rig decrease for oil and gas in the United States this week. The total number of active oil and gas drilling rigs now stands at 1,075 according to the report, with the number of active oil rigs decreasing by 8 to reach 877 and the number of gas rigs holding steady at 198. The oil and gas rig count is now 151 up from this time last year, 135 of which is in oil rigs. WTI prices were up on Friday following despite a rather bleak EIA report that showed substantial gasoline and distillate inventory builds. The upward price movement for both benchmarks comes on new optimism that the United States and China trade war will simmer down after China said it would hold trade talks with the US. At 12:18pm EDT, the WTI benchmark was trading up $1.12 (+2.38%) at $48.21, with Brent crude trading up $1.32 (+2.36%) at $57.27 per barrel. The most vital industry information will soon be right at your fingertipsJoin the world's largest community dedicated entirely to energy professionals and enthusiasts Canada’s oil and gas rigs for the week increased by 6 rigs this week, a figure that pales in comparison to the 100 rigs or so that were lost in the last three weeks as the industry prepared for winter season. Canada’s total oil and gas rig count is now 76, which is 98 fewer rigs than this time last year, with a 5-rig increase for oil rigs, and a 1-rig increase for gas rigs for the week. The EIA’s estimates for US production for the week ending December 21 is still keeping a lid on prices, fighting OPEC’s production cuts every step of the way. US production averaged 11.7 million bpd for the week. By 1:08pm EDT, WTI had increased by 1.95% (+$0.92) at $48.01 on the day. Brent crude was trading up 2.09% (+$1.17) at $57.12 per barrel.
Oil Rallies On Trade Optimism - Oil prices popped on Friday as signs of a trade thaw emerged and data showed strong OPEC cuts in December. Brent and WTI are set to close out the week with the largest weekly gain since December 2016. This week, crude benchmarks could gain as much as 10 percent, owing to Saudi production cuts and a broader sense that the oil selloff has gone far enough. “Underpinning this wave of buying is mounting evidence that Saudi Arabia has taken an axe to its oil production,” Stephen Brennock, an analyst at PVM Oil Associates Ltd., told Bloomberg. U.S. and Chinese officials are set to meet on Monday to resume trade talks, and news of the meeting bolstered sentiment in financial markets. The three-month truce in the U.S.-China trade war ends in March, but the tone from officials from both countries has thawed recently. The shakiness in the global economy, which the trade war has contributed to, is also putting pressure on both sides to back away from the brink. “China has a strong desire to have a truce on trade war,” Shi Yinhong, a professor of international relations at Renmin University in Beijing, told the FT. “[T]he probability of the two sides reaching an agreement within the 90 days is growing”. The collapse of oil prices in the fourth quarter of 2018 led to a slowdown in the shale patch. The business activity index published by the Federal Reserve Bank of Dallas show that activity decelerated and production growth slowed. The data suggests that the U.S. shale industry was very responsive and sensitive to lower oil prices. The average prediction for year-end WTI prices from oil and gas executives was $59 per barrel. OPEC’s oil production fell in December to 32.68 mb/d, down about 460,000 bpd from a month earlier, according to Reuters. It was the largest monthly decline in two years. The reductions came ahead of the OPEC+ deal, which begins this month, and suggests that Saudi Arabia wanted to unilaterally tighten up the market. Saudi Arabia alone slashed output by 400,000 bpd, and Saudi officials said they would cut deeper in January.
Oil Heads for Biggest Weekly Gain Since 2017 - Brent crude headed for its biggest weekly gain since July 2017 as OPEC’s production cuts outweighed concerns over the health of the global economy. The global benchmark is on track for an 9.3 percent advance this week after rebounding Friday from earlier losses. Prices have rallied as Saudi Arabia slowed pumping even before OPEC’s deal to reduce output went into effect. That’s added to bullish sentiment from progress in trade talks between the world’s biggest economies and helped offset wider stock market turmoil driven by fears of a slowdown in China. Oil’s positive start to 2019 follows its worst quarter in four years and a 20 percent annual loss driven by panic over a growing glut of crude. While OPEC’s output plunged by the most in almost two years last month and producers have pledged to curb supplies through the first half of 2019, concerns about the oversupply prevail as stockpiles at America’s main storage hub show signs of swelling. “While crude seemed to have bottomed out and is expected to edge higher, there’s a possibility for additional drops along the way, driven by seasonal factors and risks from wider financial markets,” said Hong Sungki, a commodities trader at NH Investment & Securities Co. in Seoul. “Still, oil rebounded yesterday, shaking off the slump in equities, which is an encouraging sign.” Brent for March settlement rose as much as $1.11, or 2 percent, to $57.06 a barrel on the ICE Futures Europe exchange, after earlier falling as much as 1.1 percent. The benchmark crude was at $57 a barrel at 8:13 a.m. in London. West Texas Intermediate for February delivery rose $1.04, or 2.2 percent, to $48.13 a barrel on the New York Mercantile Exchange. Prices are up 6.2 percent this week, the most since June. The March contract traded at a discount of $8.68 to Brent. Saudi Arabia, the world’s biggest crude exporter, trimmed production last month, bringing overall output in the Organization of Petroleum Exporting Countries down 530,000 barrels a day to 32.6 million a day, according to a Bloomberg survey of officials, analysts and ship-tracking data. That’s the sharpest pullback since January 2017 when OPEC started on its strategy to clear a glut created by surging supplies from shale producers. Oil has risen for five days, shaking off concern over global growth that’s hammered stock markets this week. Optimism that the U.S. and China are working towards a thaw in trade tensions has helped bolster prices.
Oil rises on China-U.S. talks, gains capped by U.S. fuel build - (Reuters) - Oil rose nearly 2 percent on Friday after proposed trade talks between the United States and China eased some fears about a global economic slowdown, but gains were capped after the United States reported a sharp build in refined product inventories. Brent crude futures rose $1.11, a 1.98 percent gain, to settle at $57.06 a barrel. U.S. West Texas Intermediate (WTI) crude futures increased 87 cents to settle at $47.96 a barrel, a 1.85 percent gain. After both benchmarks fell sharply last year, prices posted solid gains in the first week of 2019, despite recent data that added to concerns about a slowing global economy. Brent increased about 9.3 percent for the week, while WTI rose about 5.8 percent. Prices pared gains on Friday after data from the U.S. Energy Information Administration showed a sharp increase in product inventories as refiners ramped up utilization rates to 97.2 percent of capacity, the highest rate on record for this time of year. Gasoline stocks rose 6.9 million barrels last week, while distillate stockpiles grew 9.5 million barrels, the EIA said, compared with forecasts for builds under 2 million barrels. U.S. crude stockpiles were little changed. “Winter-grade gasoline supplies could be approaching burdensome levels if Gulf Coast runs remain elevated at a near full-out pace,” . U.S. energy firms this week cut oil rigs for the first time in three weeks, reducing the rig count by eight to 877, General Electric Co’s Baker Hughes energy services firm said. Some analysts were forecasting the first decline in the rig count - an indicator of future production - in three years in 2019. Oil drew support from comments by China’s commerce ministry, which said Beijing would hold vice-ministerial trade talks with U.S. counterparts on Jan. 7-8. The news helped boost sentiment across riskier assets including the U.S. equity and oil markets. Washington and Beijing have been locked in a trade war for much of the past year, disrupting the flow of hundreds of billions of dollars worth of goods and hampering growth.
Brother Of Saudi Billionaire Prince Alwaleed Re-arrested - Among the more notable geopolitical events that took place last week, and which was swept away by the chaos in the capital markets, was Thursday's surprising announcement of a Saudi cabinet reshuffle that moved around some of the key players in the Khashoggi murder scandal (most notably the chief Saudi diplomat, Adel al-Jubeir) and removed Prince Mohammed bin Nawaf al Saud as the Kingdom's ambassador to the UK.As a result of the reshuffle, more liberals and progressives will move into positions of power, suggesting that it could be part of the Kingdom's plan to move ahead with its 'liberalizing' reforms to try and rehabilitate MbS's tarnished reputation as a reformer. Amid the reshuffle, the king also ordered the creation of a new political and security council (presumably to help protect his chosen successor's flank) and - in a move that is reminiscent of a controversial decision made by President Trump this year - establishes a new Saudi space agency.The biggest change was the apparent demotion of al-Jubeir to the lesser position of minister of state for foreign affairs and moving Ibrahim al-Assaf, formerly the kingdom's finance minister, to the foreign affairs role. Al-Jubeir who was one of the kingdom's key liaisons with western media during its response to Khashoggi's killing and played an important role in the Saudis PR response to the Khashoggi killing, in addition to being a stalwart supporter of the Crown Prince.But perhaps an even more prominent event took place just ahead of the reshuffle, when on Wednesday the London-based Al-Quds Al-Arabi reported that Saudi authorities have re-arrested the brother of billionaire Prince Al-Waleed bin Talal just days following the death of their "reformist" father, after Crown Prince Mohammed bin Salman ordered the arrest of Khalid bin Talal. "The arrest took place on Tuesday night and until Wednesday evening Khaled was not released despite some promises," the report said according to The New Arab.
Outrage After Netflix Blocks Comedy Show Critical of Saudi Crown Prince — Netflix has removed an episode of comedy show Patriot Act with Hasan Minhaj for viewers in Saudi Arabia after the country complained about the host’s criticism of its war in Yemen and the killing of journalist Jamal Khashoggi, the Financial Times reported on Tuesday.According to the FT, the streaming site confirmed it had removed the episode, which is described on the website as: “Hasan exposes grim truths about Saudi Arabia and the charismatic crown prince known as ‘MBS [Mohammed bin Salman].'”The decision followed a complaint made by Saudi Arabia’s Communications and Information Technology Commission on the grounds that the episode violated the anti-cyber crime law against “material impinging on public order, religious values, public morals, and privacy”. Under Article 6 of Saudi Arabia’s anti-cyber crime law, “production, preparation, transmission, or storage” of such material “through the information network or computers” is punishable by a five-year prison sentence and a 3m Saudi riyal ($800,000) fine.
Saudi Arabia Hires Child Soldiers From Darfur To Fight In Yemen: Report - Saudi Arabia has hired “tens of thousands” of soldiers from Darfur, including many children, part of an outsourced army that is fighting the war in Yemen, the New York Times reports. The kingdom’s war effort in Yemen, headed by Crown Prince Mohammed bin Salman, has been described by Saudi Officials as at attempt to save Yemenis from Iran-backed aggressors. Officials at the United Nations, however, maintain that the conflict in Yemen has spiraled into the world’s most dire humanitarian crisis. A blockade carried out by Saudi Arabia and the United Arab Emirates has put up to 12 million people at risk of starvation and caused the death of 85,000 children, aid groups have reportedly said. According to The Times, up to 14,000 militiamen from Sudan have been fighting alongside Saudi-backed forces in Yemen “at any time for nearly four years.” Many of these militiamen are actually children. Nearly all of these Sudanese fighters appear to be from Darfur, where approximately 300,000 people died over a 12-year period in a fight over farmland and other disappearing resources, The Times reports.
Saudi Arabia Bought Sudanese Children to Use as Soldiers in Yemen: NYT – In 2016 Saudi Arabia offered around $10,000 for families in Darfur, Sudan affected by the Sudanese civil war to send their children to fight in Yemen, the New York Times claimed on Friday. In the article, “On the Front Line of the Saudi War in Yemen? Child Soldiers from Darfur,” the newspaper quoted Hager Shomo Ahmed, 16, saying: “Families know that the only way their lives will change is if their sons join the war and bring them back the money.” He was only 14 when the offer was made to his family, according to the Times. The report also quoted Hafiz Ismail Mohammed, a critic of Sudan’s government and former banker, saying: “People are desperate. They are fighting in Yemen because they know that in Sudan they don’t have a future.” “We are exporting soldiers to fight like they are a commodity we are exchanging for foreign currency,” Mohammed added, according to the daily. Most of the Sudanese fighters come from “the battle-scarred and impoverished region of Darfur, where some 300,000 people were killed and 1.2 million displaced during a dozen years of conflict” in the nation of 40 million in Northeast Africa, said the Times. “At any time for nearly four years as many as 14,000 Sudanese militiamen have been fighting in Yemen in tandem with the local militia aligned with the Saudis, according to several Sudanese fighters who have returned and Sudanese lawmakers who are attempting to track it. Hundreds, at least, have died there,” the daily reported.“Five fighters who have returned from Yemen and another about to depart said that children made up at least 20 percent of their units. Two said children were more than 40 percent,” reported the Times.The newspaper said Saudi Arabia paid Sudanese children a salary starting at the riyal equivalent of around $480 a month, with bonuses for combat, deposited directly into the Faisal Islamic Bank of Sudan, partly owned by Saudis.“At the end of a six-month rotation, each fighter also received a one-time payment of at least 700,000 Sudanese pounds — roughly $10,000 at the current official exchange rate,” the Times claimed.
Food Aid to Yemen 'Snatched From the Starving' by US-Backed Saudi Allies -- Amid famine and rampant disease that have spawned from Yemen's four-year civil war, an Associated Press report out Monday revealed that food aid pouring in from across the globe, meant to curb the world's worst humanitarian crisis, is "being snatched from the starving" by armed forces allied with the Saudi-led, U.S.-backed coalition that supports the Yemeni government as well as the Houthi rebels.As the AP reports:Across Yemen, factions and militias on all sides of the conflict have blocked food aid from going to groups suspected of disloyalty, diverted it to front-line combat units or sold it for profit on the black market, according to public records and confidential documents obtained by the AP and interviews with more than 70 aid workers, government officials, and average citizens from six different provinces.[...]Some observers have attributed the near-famine conditions in much of the country to the coalition's blockade of ports that supply Houthi-controlled areas. AP's investigation found that large amounts of food are making it into the country, but once there, the food often isn't getting to people who need it most—raising questions about the ability of United Nations agencies and other big aid organizations to operate effectively in Yemen. As one senior U.N. official, who spoke on the condition of anonymity, put it, "If there is no corruption, there is no famine."“The army that should protect the aid is looting the aid.” Thousands of Yemeni families are still starving despite a multi-billion-dollar international effort to feed them. The latest in @AP’s year-long coverage of Yemen’s civil war. https://t.co/TMJTm6kOU0— The Associated Press (@AP) December 31, 2018
UAE Arms Al-Qaeda and ISIS in Yemen: Report— A Yemeni warlord who has also been a fundraiser for Al-Qaeda and at one point is believed to have belonged to Daesh is being armed by the United Arab Emirates (UAE) the Washington Post has discovered. In a startling interview, Abu Al-Abbas revealed that he has received millions of dollars in weapons and financial support for his fighters from the UAE, which is one of Washington’s closest Middle East allies, despite the fact that he was once a member of militant groups on the US terrorist list. “The coalition is still supporting me,” he claimed, but he denied that he is a terrorist. “If I really was a terrorist, they would have taken me in for questioning.” The Post points out that Al-Abbas’s case underscores the awkward alliances and odd bedfellows that are found on all sides in Yemen’s four-year war. It also raises questions about the UAE’s conduct in the conflict, highlighting its objectionable alliance as well as its part in the humanitarian disaster unfolding in the southern Arabia Peninsula. Along with its more powerful Gulf neighbor Saudi Arabia, the UAE has been involved in a vicious military campaign in Yemen since 2015. The war is seen widely as a disaster which has created one of the worst humanitarian crises since the Second World War, with an estimated 85,000Yemeni children having died and a further 20 million facing starvation. The Gulf coalition is seeking to defeat the northern Yemeni rebels known as Houthis and restore the country’s government-in-exile. The deadly conflict has been supported by the US, which assists it Gulf allies with intelligence-gathering, logistical support and the sale of billions of dollars’ worth of weapons and equipment.
Anti-ISIS Coalition Airstrikes Killed Over 1,100 Civilians - While it has been reported previously that Saudi airstrikes in Yemen have led to the deaths of over 10,000 inncoent civilians, a finding which according to Reuters suggested the US could be found guilty of war crimes for supporting the Saudi assault, it is time to shift attention to what is taking place a few hundred miles north.The reason: U.S.-led coalition airstrikes against the Islamic State have killed over 1,000 civilians in Iraq and Syria since 2014.In its latest monthly civilian casualty report, the Coalition detailed confirmed deaths of 1,139 civilians in airstrikes conducted since the beginning of Operation Inherent Resolve between August 2014 and November 2018, VoA reports.Combined Joint Task Force - Operation Inherent Resolve Monthly Civilian Casualty Report: https://t.co/iEVL2q3qMM— Inherent Resolve (@CJTFOIR) December 30, 2018"The Coalition conducted a total of 31,406 strikes between August 2014 and end of November 2018. During this period, based on information available, CJTF-OIR assesses at least 1,139 civilians have been unintentionally killed by Coalition strikes since the start of Operation Inherent Resolve," the report read, however noting that nearly eight million Iraqis and Syrians have been liberated from IS-rule during that time (many of which have since fled to Europe thanks to Angela Merkel's disastrous "open door" policy which was the key catalyst in spawning Europe's populist wave). An additional 184 reports of other unintended civilian casualties are still being evaluated.
Turkish TV Shows Men Carrying Jamal Khashoggi’s Body Parts in Bags - video – A Turkish television channel has broadcasted video showing men carrying suitcases purportedly containing the remains of Saudi journalist Jamal Khashoggi into the residence of his country’s consul general in Istanbul, reports Reuters. The footage broadcast by A Haber shows men carrying what it says were a total of five cases through the main entrance of the residence, a short distance from the consulate where Khashoggi, a leading critic of Saudi policies, was killed in early October. Saudi officials have rejected accusations that the crown prince ordered his death. The murder has sparked global outrage and damaged the international reputation of 33-year-old prince, the kingdom’s de facto leader.Sabah said the cases had been brought to the residence in a black minibus at 3:09 pm (1209 GMT). After offering numerous contradictory explanations regarding the fate of Khashoggi, Riyadh later said he had been killed and his body dismembered when negotiations to persuade him to return to Saudi Arabia failed.
HSBC Turkey CEO Under Investigation For Insulting Erdogan - The CEO of HSBC Turkey, one of the country's most high-profile executives, is facing an investigation over allegations that he insulted Turkish President Recep Tayyip Erdogan via social media back in 2013, according to Bloomberg. The investigation is a sign that the Turkish state's crackdown on dissent is intensifying. The probe is related to a five-year-old retweet sent by HSBC CEO Selim Kervanci during a wave of protests against Erdogan’s rule five years ago. Investigators haven't said where they got the information. The footage was reportedly from the 2004 German movie "Downfall," which was set during Adolf Hitler’s last days and depicted the collapse of Nazi Germany (a scene from the movie has been popular fodder for viral Internet jokes in the west). The demonstrations, which began in June 2013, snowballed from a small sit-in against the redevelopment of the Gezi Park in central Istanbul into a weeks-long nationwide protests against Erdogan's rule.Kervanci gave a deposition to Turkish police back in September. Insulting Erdogan is a crime in Turkey, and as the purge inspired by an attempted coup back in 2016 has continued, Turkish police have continued to prosecute thousands of people for allegedly mocking or insulting the president.The attack on the prominent banker is reminiscent of Erdogan's screeds against the "interest rate lobby" - the cabal of senior bankers he accused of pushing for higher rates in the country, to the detriment of the Turkish people.
Turkey's War On Christian Missionaries - The day after American pastor Andrew Brunson was released from Turkish prison, another Christian who had been living for nearly two decades in the country was detained by Turkish authorities, and told that he had two weeks to leave the country -- without his wife and three children. The American-Canadian evangelist, David Byle, not only suffered several detentions and interrogations over the years, but he had been targeted for deportation on three occasions. Each time, he was saved by court rulings. This time, however, he was unable to prevent banishment, and left the country after two days in a detention center.When he tried to return to his family in Turkey on November 20, he was denied re-entry. According to Claire Evans, regional manager of the organization International Christian Concern: "Turkey is making it increasingly clear that there is no room for Christianity, even though the constitution states otherwise. It is no coincidence that Turkey decided to initiate this process the day after Brunson's release from prison and that, in doing so, the authorities ignored a court order. We must keep the Byle family in our prayers during this period of difficult separation." Brunson and Byle are among many Christian clerics who have fallen victim to Turkey's aversion to Christianity. In its annual Human Rights Violations Reports, published since 2009, Turkey's Association of Protestant Churches details Turkey's systematic discrimination against Protestants, including verbal and physical attacks; nor does the Turkish government recognize the Protestant community as a "legal entity," denying it the right to freely establish and maintain places of worship. Turkey's Protestants cannot open their own schools or train their own clerics, forcing them to rely on support of foreign church leaders. Still, several foreign religious workers and church members have been denied entry into Turkey, refused residence permits or deported.
US Commanders Recommend Letting Syrian Kurds Keep US-Supplied Weapons — US commanders planning for the withdrawal of their troops from Syria are recommending that Kurdish fighters battling Islamic State (IS) be allowed to keep US-supplied weapons, four American officials have said, a move that would likely anger NATO ally Turkey. Three of the officials, speaking on condition of anonymity, said the recommendations were part of discussions on a draft plan by the US military.The US told the Kurdish People’s Protection Units (YPG) that they would be armed by Washington until the fight against IS was completed, one of the US officials said.“The fight isn’t over. We can’t simply start asking for the weapons back,” an official told the Reuters news agency.The proposal to leave US-supplied weapons with the YPG, which could include anti-tank missiles, armoured vehicles and mortars, would reassure Kurdish allies that they were not being abandoned. Ankara which views the YPG as an extension of a Kurdish insurgency inside Turkey, has threatened to launch an offensive against the YPG, raising fears of a surge in violence that could harm hundreds of thousands of civilians. Turkey wants the US to take the weapons back, so the commanders’ recommendation, if confirmed, could complicate Trump’s plan to allow Ankara to finish off the fight against IS inside Syria.The Pentagon keeps records of the weapons it has supplied to the YPG and their chain of custody. But, the US officials said, it would be nearly impossible to locate all of the equipment. “How are we going to get them back and who is going to take them back?” one of the officials asked.
US Troops Still Patrolling Syria’s Manbij Despite Trump’s Order to Stop Being There — The Stars and Stripes fluttered above four US armoured vehicles driving through drizzle in the Syrian city of Manbij on Sunday, each visibly carrying an armed soldier on lookout duty.The US patrol inside the strategic city near the Turkish border comes despite President Donald Trump’s shock announcement this month that he is pulling American troops out of the war-torn country.Trump has said the withdrawal will be slow. US-led coalition jets and attack helicopters could still be seen in the skies over Manbij on Saturday, Reuters reported. Local fighters with the US-backed militia that has held the city since 2016, the Manbij Military Council, were conducting their normal patrols wearing red berets and armed with AK-47 assault rifles.Almost eight years into Syria’s civil war, a Kurdish-led alliance called the Syrian Democratic Forces (SDF) controls a large swathe of territory in the country’s northeast, including Manbij. The unexpected US pullout announcement left Syria’s Kurds scrambling to find a new ally in the Damascus government, as they fear losing US support would leave them exposed to a long-threatened Turkish assault.In a statement issued on Friday, Syria’s most powerful Kurdish militia, the People’s Protection Units, or Y.P.G., called on the Syrian government to send troops to the city of Manbij to ward off a possible attack by Turkey. https://t.co/yhhk2jYYql— Adam Goldman (@adamgoldmanNYT) December 28, 2018Still, inside Manbij on Sunday, American troops did not appear to have left yet, an AFP correspondent said, and residents were relieved to have spotted at least two US patrols.“The Americans’ presence is reassuring for people, as the situation has become tense since we heard about their decision to withdraw,” said Mohammed Ahmad, a 28-year-old shop owner.
Kurdish Fighters Withdraw From Syrian City of Manbij — A convoy of Syrian Kurdish fighters has withdrawn from Manbij on Wednesday, according to the Syrian Defense Ministry, which estimates that around 400 of them left. This was, by most accounts, materially all remaining Kurdish forces in Manbij.Manbij has been under the control of Kurdish forces and some small allied factions since 2017, when they seized the city with the support of US forces. Turkey’s military has announced intentions to invade the city, and large numbers of Turkish-backed rebels have gathered in the vicinity for this.At present, the only forces known to remain inside Manbij are US and French troops, while a small number of Syrian Army forces are deployed on the outskirts, intending to prevent Turkey and the rebels from seizing the city.What that’s going to look like with the Kurds’ withdrawal is unclear. Turkey wouldn’t really have a justification to invade the city anymore at this point, but has long coveted the Euphrates River-adjacent city as a staging area for attacks deeper into Syrian Kurdistan. The US presumably doesn’t intend to contest any Turkish advance, though it’s not clear they’ll welcome the city being de facto seized by Islamist rebel groups that are aligned with Turkey.
Iraqi Jets Strike Terrorists In Syria At Assad's Request As US Slowing Troop Pullout - As the United States is reportedly "slowing things down" on Trump's announced full troop withdrawal, Syria's President Assad is apparently speeding things up in terms of reasserting sovereign control over all parts of the country, as he's long promised to "liberate every inch" of natural Syria. On Sunday Assad took the controversial step of authorizing Iraqi forces to attack terror targets inside Syria at will, according to state-run SANA "without waiting for permission from authorities in Damascus" while the two allies coordinate action against remaining ISIS pockets in the country's east. Quickly on the heels of that decision, Iraqi fighters jets bombed ISIS positions across the Syrian border on Monday. According to official reports, "Iraq's Joint Operations Command said F-16s struck a two-storey house in Souseh, close to the border, that was being used as a meeting place for ISIS leaders."Unconfirmed reports say up to two dozen or more ISIS commanders were taken out in the air strikes as a high level meeting had been taking place at one of the locations targeted. Since Trump's Syria pullout announcement, Pentagon leaders have expressed concern over who will fill the remaining power vacuum in Syria's north and east, and have especially feared Iranian entrenchment as a result, as well as the potential of Iraqi Shia pro-Iran militias to fill the gap.Indeed Monday's Iraqi air strikes suggest it is precisely Baghdad — which is ironically an ally of both Iran and the United States, and increasingly of Damascus — which is already stepping up operations while the US is set to move out. According to the Dubai-based The National, Iraqi leaders hope for even closer cooperation with the Assad government in counter-terror efforts, something sure to trigger alarm bells in Washington and Tel Aviv: Prime Minister Adel Abdul Mahdi said Iraq is seeking to move beyond its current arrangement with Damascus — under which it launches air strikes against ISIS militants in the neighbouring country after getting approval — but did not offer further details. “There are groups operating in Syria, and Iraq is the best way to deal with this,” he told reporters in reference to ISIS remnants.
Iraq Rejects Iran Sanctions and US Troop Presence - – In another blow to US control on Iraq, the country’s foreign minister warned that Baghdad would ignore US sanctions on Iran. Speaking to journalists on Wednesday, Iraqi Foreign Minister Mohammed Ali al-Hakim laid out the latest step on the path to independence for Baghdad from the US concerning sanctions on Iran by Washington. Although Iraq currently has a 90-day waiver to trade with Iran issued on December 20th, Hakim let reporters know Iraq would be pursuing their own policy on Iran should the waiver not be renewed. Hakim explained to reporters that “These sanctions, the siege, or what is called the embargo,” imposed by the US is “unilateral, not international,” and Iraq is “not obliged [to follow] them.” This is a big step for Baghdad to take in the face of pressure from Washington for Iraq to become “energy independent” with the help of US corporations exploiting their oil and gas resources. Instead, as explained by Hakim, Iraq would rather choose their own options for energy, even if that includes continuing the annual $12 billion in trade between Iraq and Iran flowing over US objections. There are also discussions ongoing concerning increasing the amount of trade between Baghdad and Tehran despite US pressure. Iraqi President Barham Salih and his Iranian President Hassan Rouhani even doubled down on this during a recent meeting where Rouhani said that Tehran was willing to increase trade with Baghdad from the $12 billion a year mark to $20 billion. Hakim assured reporters Iraq is already thinking of “solutions” to counteract any US threats to increased trade with Iran. According to Hakim, there are multiple options open to Baghdad “including dealing in Iraqi dinars in bilateral trade” as opposed to US dollars. This defiance to US sanctions is only the latest step in Iraq declaring independence from Washington. Another sign that the US is losing their grip on Baghdad was also made apparent last week when, after Trump made a surprise visit to US troops in Iraq, fueling outrage among Iraqi politicians. Many Iraqi leaders called Trump’s surprise visit to their country a violation of their nation’s sovereignty. This has ended up leading to a wider backlash and resulted in multiple Iraqi politicians demanding a complete end to the US military presence in the country.
Iran's Navy Plans To Upgrade Speedboats With Stealth Technology To Counter US Navy - Iran's Islamic Revolutionary Guard Corps (IRGC) navy commander on Monday criticized the presence of US Navy warships patrolling the Persian Gulf and said the IRGC is preparing to upgrade its speedboats with stealth technologies and new missile launchers as tensions increase between Tehran and Washington near the Strait of Hormuz. "The IRGC's navy attaches great importance to high speed and maneuverability of its boats in the missions," Alireza Tangsiri, the top IRGC Navy Commander, was quoted as saying by Press TV."We are planning to equip the IRGC's speedboats with radar-evading stealth technology while increasing their speed in order to conduct their missions," he said, adding that "new missiles moving at very high speed are being installed on the IRGC's naval vessels."According to the Xinhua News Agency, the IRGC has some of the fastest speedboats in the world. Tangsiri said, "we are working on speedboats with the speed of 80 knots (148.16 km) (per hour) and beyond that."The IRGC commander pointed out that the arrival (Dec. 21) of the USS John C. Stennis, a nuclear-powered supercarrier, through the Strait of Hormuz of the Persian Gulf, was met with IRGC vessels shadowing the strike group. Tangsiri said, "we are constantly monitoring them [US Navy] and have full command on these foreign forces" as they move through the Gulf. "The presence of foreign forces in the region disturbs security, noting that regional countries are capable of guaranteeing their security through staging joint military maneuvers and boosting cooperation," he added.On Sunday, Chairman of the Chiefs of Staff of the Iranian Armed Forces Mohammad Baqeri said that the US is inciting new fears in the Gulf through its presence in the region.
Is A 'Land Swap' Between Turkey And Syria Being Brokered By Russia? -- As confusion and tensions continue to mount in the Syrian Kurdish city of Manbij, located just 70 miles north of Aleppo, and as pro-Turkish forces prep for an invasion, is there a land swap in the works in northern Syria being brokered between Russia and Turkey? This is the pressing question as over the weekend US helicopters were filmed hovering above the potential battle lines, even after widespread reports of a US troop pullout from the area and following Kurdish militias quickly calling on the Syrian Army's help to prevent a Turkish invasion and massacre of the province's Kurdish inhabitants.Following a high level Turkish defense delegation visit to Moscow on Saturday, which involved talks between Russian Foreign Minister Sergei Lavrov and his Turkish counterpart Mevlut Cavusoglu, RT reports the future of the Syrian-Turkish border region is on the line. This as many in Washington worry that a rapid American draw down will create a power vacuum :Moscow and Ankara are to “define certain areas of influence and understand who will control what.” There are residual groupings of Islamic State (IS, formerly ISIS/ISIL) fighters who are ready to exploit any no power vacuum in northern Syria...Turkish ambitions to reinstate full control over the northern Syria may not be an option for Damascus, but “it is also important for Russia to not lose Turkey as an ally.”Marianna Belenkaya, a Middle East expert and commentator at Russia’s Kommersant daily, noted: “There’s a possibility that some kind of a land swap will be discussed,” and explained, “What is happening around Manbij is similar to what Russia has suggested a year ago in Afrin.” Essentially this means Moscow is pressuring Kurdish militias to disarm as an independent entity and come under Damascus' jurisdiction; and in exchange the Turks would agree to not invade the Kurdish-populated canton. Regarding Afrin, the Kurds rejected the deal at the time and were forced out during Turkey's 'Operation Olive Branch'.
US withdrawal from Syria leaves China’s investment plans up in air - US President Donald Trump’s surprise decision to withdraw US forces from Syria will leave China’s intended investment into the country’s reconstruction in uncertainty, analysts said, adding that the move might also suggest a stronger strategic focus by Washington on the Indo-Pacific region to put pressure on Beijing. Experts said it remains unclear when the troop withdrawals will be completed but the departure is likely to prolong instability in Syria and delay its reconstruction. “Trump is restarting the game and all parties there will make their own moves. China is watching closely how changes in the Middle East would affect its own interests there,” said Wu Xinbo, director of the Centre for American Studies at Fudan University in Shanghai. China has kept its distance from the Syria conflict but is interested in promoting its economic presence in the war-torn country under the “Belt and Road Initiative”, according to Wang Jian, a Middle East expert at the Chinese Academy of Social Sciences in Beijing. “Chinese companies and investment cannot hurry now,” he said, adding that security would be a major concern with the withdrawal of US troops. “If the security situation worsens, it will affect China’s intended economic cooperation in the region. Security risks may also spill over to other countries such as Turkey, Saudi Arabia and the UAE where China has extensive economic interests.” Although China is the world’s biggest oil importing country and heavily relies on energy imports from the Middle East, it does not have a military presence in the region. Chinese businesses used to invest in and trade with Syria before the civil war broke out in 2011. Bilateral trade between China and Syria amounted to US$2.4 billion that year. Almost all Chinese companies have since pulled out or suspended operations there.But should the situation stabilise, Chinese companies will return and Beijing is keenly interested in reconstruction. Analysts said the belt and road plan emphasises trade and infrastructure construction, and that both will be urgently needed when reconstruction begins. According to United Nations estimates, the seven-year military conflict has wiped out nearly US$400 billion worth of assets in Syria.
The perils of trusting America: A reminder for Asian allies - President Donald Trump's abrupt decision to pull all American troops out of Syria is yet another chilling reminder that those who believe in pledges and assurances made by the United States do so at their grave peril. While his generals and European allies may fret over the geopolitical implications of his capricious move, it is the US-backed Kurdish forces, fighting on America's behalf against the Islamic State in Iraq and Syria group in north-eastern Syria, who will bear the brunt of the repercussions. It is almost certain that Turkey, which has long labelled them as terrorists inciting its Kurdish minority to secede, will carry out its threat to move in and crush them. Deserted by the Americans who have been funding, training and arming them, the Kurds will pay for Mr Trump's perfidy with blood. He may have made good on his campaign promise to pull out US troops but, to the Kurds, he has just stabbed them in the back. And they say this openly, in so many words, to the world's media. South Korea, Japan and Taiwan must be watching this development - which is nothing short of a breach of faith - with great trepidation. So should other economies in the Asia-Pacific region which the US has been courting in its thinly-disguised attempt to contain the rise of China. Seoul and Tokyo, especially, could not have forgotten that soon after President Trump met North Korean leader Kim Jong Un in Singapore in June, he called off a long-scheduled military exercise between South Korean and US forces - just like that, without any prior notice to Seoul. Or that he has signalled more than once his aversion to keeping American troops in South Korea. No one can be sure now that he would not, in a moment of impetuosity, announce a US pullout from there as well, via Twitter at 3 o'clock in the morning. .
Israeli settlement activity appears to surge in Trump era — With little resistance from a friendly White House, Israel has launched a new settlement push in the West Bank since President Donald Trump took office, laying the groundwork for what could be the largest construction binge in years, according to data obtained by The Associated Press.The figures, gathered from official government sources by the anti-settlement monitoring group Peace Now, show an increase in building in 2018 and a sharp spike in planning for future construction. This trend, highlighted last week when an Israeli committee advanced plans for thousands more settlement homes on war-won lands, has only deepened Palestinian mistrust of the Trump administration as it says it is preparing to roll out a Mideast peace plan. Each new settlement expansion further diminishes the chances of setting up a Palestinian state alongside Israel. Both supporters and opponents of settlements confirm a change in atmosphere since early 2017, when Trump took over from Barack Obama, whose administration had tried to rein in construction. “The feeling of the (Israeli) government is everything is allowed, that the time to do things is now because the (U.S.) administration is the most pro-settlement you can ever have,” said Hagit Ofran of Peace Now’s Settlement Watch program. Peace Now uses several measurements of settlement activity. These include “plans,” or the bureaucratic stages of preparing a project, including initial proposals; “tenders,” when bids are solicited from contractors to do large projects; and “construction starts,” when the building actually begins.
Israel’s Opposition Zionist Union Falls Apart Before Election - Israel’s opposition, which just last week stressed the need to merge forces to beat Prime Minister Benjamin Netanyahu in upcoming elections, has splintered instead. Labor chairman Avi Gabbay announced Tuesday he was breaking up the Zionist Union -- his party’s alliance with former Foreign Minister Tzipi Livni’s Hatnua -- which was parliament’s second-largest faction. The bloc has been tanking in the polls, projected to receive less than 10 of parliament’s 120 seats, compared to its current 24. “I hoped and believed that the change and the new partnership would lead to growth, to a real connection and mutual admiration,” Gabbay said. ”But the public is smart and saw that this wasn’t the reality and distanced itself.” Gabbay didn’t elaborate, but The Times of Israel reported Thursday that Livni had approached Benny Gantz to ask the former military chief of staff about joining his new party. The Israeli political landscape has been churning since the governing coalition announced last week that it would dissolve itself and move up elections by more than half a year to April 9, with parties forming and fracturing. On Saturday, Education Minister Naftali Bennett and Justice Minister Ayelet Shaked broke away from the Jewish Home party Bennett led, creating a new right-wing party. Some analysts and one poll have suggested that move could compromise Netanyahu’s grip on power by shrinking the conservative bloc he traditionally depends on to form a coalition government. Other polls show Netanyahu continuing to defeat all comers.
Israel's 'Sea Wall' Complete Along Gaza For Total Air, Sea and Land Blockade -Israel is close to bringing its controversial 'Sea Wall' which runs along side the Gaza Strip to completion, Israeli media Channel 10 reports. The project has come under international condemnation and scrutiny since it began in May 2018, at which point Israeli officials announced the massive sea barrier separating Gazan and Israeli sections of water is necessary to prevent Hamas fighters from infiltrating Israel by sea as they did during the last war in 2014. The barrier is 200 meters long extending from the shore and 50 meters wide, and is the latest in what Israel's defense ministry is calling a security barrier to complement other initiatives, including a bigger, ongoing project to construct "underground walls" to prevent Hamas tunneling. The sea barrier includes underwater boulders lining an interior concrete wall, which is further lined with seismic detectors and other high-tech classified security systems. Topping the wall is a smart fence with detectors rising to a height of six meters, or 20 feet, according to Israeli media reports. When the sea wall's construction began eight months ago, Defense Minister Avigdor Lieberman touted it as necessary to "block any possibility of entering Israel by sea" while specifically mentioning Hamas attempts to circumvent Israeli security measures. Though Hamas attacks or infiltration attempts by sea have not been common, during the 2014 Gaza War, known in Israel as Operation Protective Edge, a Hamas commando unit attempt to infiltrate Israel from the sea at Zikim Beach, just north of the Gaza Strip. The small group of Hamas fighters “stormed the Zionist naval base on the shores of the sea,” according to Hamas claims at the time, before being gunned down by IDF soldiers on the beach. The sea wall has been somewhat controversial among Israel's own domestic population, as its environment ministry lately warned the barrier could damage Israel's beaches by artificially altering sand deposits along the coast. But most importantly it puts Israel a significant step closer to imposing a total air, sea and land blockade on the strip, which has been in effect since 2007.
Egypt Goes Guns-a-Blazing- 40 Terrorists Killed In Mass Raids Following Tour Bus Bombing - In the usual fashion of Egypt's Sisi-led military junta, security forces have gone into "terror hideouts" guns a blazing after Friday's bus bombing which left 4 dead and a dozen injured, mostly Vietnamese tourists visiting the Giza Pyramids outside of Cairo, in a casualty toll that climbed from two to four later in the day. The raids killed 40 terrorists according to Egyptian security officials, and authorities announced further the successful counter-terror operation thwarted a planned "series of attacks on tourist sites, churches and military personnel," according to the BBC. Reports identified that 30 of the militants were killed during early morning raids by police and military personnel in Giza while a further 10 were ambushed by security forces in Northern Sinai, according to the interior ministry. "A group of terrorists were planning to carry out a series of aggressive attacks targeting state institutions, particularly economic ones, as well as tourism... and Christian places of worship," the ministry statement said. And further the raids were ordered "as a continuation of the ministry's efforts in chasing terrorist elements involved in the implementation of hostile operations seeking to destabilize the country's security," the statement said.The interior ministry also said police had seized large quantities of bomb-making materials, ammunition and a caches of weapons during the raids, touting these as proof that terror cells were effectively taken out. Local media circulated government-released images of what are purported to be dead terrorists responsible for planting the roadside bomb in Giza as well as guns and ammunition.
Inside The Country Where You Can Buy A Black Man For $400 - Slavery is thriving in Libya, where thousands of black Africans hoping to get to Europe instead find themselves bought and sold, forced to work for nothing, and facing torture at the hands of their owners. Slavery typically conjures up images of ships transporting black Africans across the Atlantic, or the death marches of the trans-Saharan slave trade. But this modern-day version has added a cruel twist — this time, people from sub-Saharan Africa are often selling themselves into slavery, believing they are buying a ticket from a life of conflict, poverty, or repression to a glittering future in Europe. In a grim irony, the very policies of a European Union that is hardening itself against immigration are largely responsible not only for preventing people from reaching the continent, but their becoming enslaved and dying in their attempts to escape. Few places could be further from the promised land than current-day Libya, where tens of thousands are detained indefinitely, spend years working for arbitrary sums or without pay altogether, and are at constant risk of being kidnapped, sold, and auctioned from one militia to another. In a country where chaos is the rule, some experts argue that such treatment doesn’t amount to slavery, a view that downplays the racism underlying the situation. Ikuenobe had ended up trapped in Libya after leaving his hometown of Benin City, a verdant city of low-rise buildings in southwestern Nigeria, in search of a better life in Europe. He had planned for a two-week journey northward across the Sahara desert into Libya, from where he would set off in a boat across the Mediterranean. Instead, he found himself spending more than two years trying to survive in the underbelly of modern-day slavery.
C.I.A.’s Afghan Forces Leave a Trail of Abuse and Anger - NYT — Razo Khan woke up suddenly to the sight of assault rifles pointed at his face, and demands that he get out of bed and onto the floor. Within minutes, the armed raiders had separated the men from the women and children. Then the shooting started. As Mr. Khan was driven away for questioning, he watched his home go up in flames. Within were the bodies of two of his brothers and of his sister-in-law Khanzari, who was shot three times in the head. Villagers who rushed to the home found the burned body of her 3-year-old daughter, Marina, in a corner of a torched bedroom. The men who raided the family’s home that March night, in the district of Nader Shah Kot, were members of an Afghan strike force trained and overseen by the Central Intelligence Agency in a parallel mission to the United States military’s, but with looser rules of engagement. Ostensibly, the force was searching for militants. But Mr. Khan and his family had done nothing to put themselves in the cross hairs of the C.I.A.-sponsored strike force, according to investigators. It was clear that the raiding force had “committed an atrocity,” . “Everyone we spoke to said they would swear on the innocence of the victims.” At a time when the conventional Afghan military and police forces are being killed in record numbers across the country, the regional forces overseen by the C.I.A. have managed to hold the line against the most brutal militant groups, including the Haqqani wing of the Taliban and also Islamic State loyalists.But the units have also operated unconstrained by battlefield rules designed to protect civilians, conducting night raids, torture and killings with near impunity, in a covert campaign that some Afghan and American officials say is undermining the wider American effort to strengthen Afghan institutions. Those abuses are actively pushing people toward the Taliban, the officials say. And with only a relatively small American troop contingent left — and that perhaps set to drop further on President Trump’s orders— the strike forces are increasingly the way that a large number of rural Afghans experience the American presence.
China’s private economy set for winter ‘colder and longer than expected’, warns billionaire tycoon A winter “colder and longer than expected” is arriving for China’s private business entrepreneurs and Beijing’s supportive rhetoric has yet to translate into concrete policies that will help the private economy, said self-made billionaire Chen Hongtian. Chinese tycoon Chen, 59, expects “the difficulties will be larger than expected” next year for China’s private business owners amid a domestic economic slowdown caused by the continuing trade war with the US. Cheung Kei Group chairman Chen, a self-made billionaire and a member of the Chinese People’s Political Consultative Committee, was speaking last week in his capacity as the chairman of the Harmony Club, a group of about 150 tycoons who are mostly based in Shenzhen and Hong Kong. The club includes Tencent chairman Pony Ma, Wang Chuanfu, the chairman of carmaker BYD, and Wang Wei, the chairman of courier service SF Express. Its members directly and indirectly control over 85 listed companies and more than 3,000 corporate entities, according to the club. More than half of the club’s members had encountered difficulties stemming from China’s trade war with the US, the economic downturn, financing difficulties and stricter regulations, Chen said, while 10 per cent of them had “encountered very big problems”. “I hope the government, the banks, and the tax bureaus can help our businesses to overcome the difficulties and don’t act as the enemy of business,” he said. “The winter will be very cold, I would like to remind again … it’s hard to predict and all that I can say is that difficulties [for private enterprises] are much bigger than people expected.”
China PMI Unexpectedly Plunges Into Contraction - Weakest December Since 2008 -- China's official manufacturing PMI fell to 49.4 in December, from 50.0 in November, the lowest reading since February 2016; and the weakest reading for a December since 2008. Under the hood, it was just as ugly, as Goldman notes, both the production and new order sub-indexes fell in December. The production index declined to 50.8 from 51.9, and the new orders decreased to 49.7 from 50.4. Trade indicators continued to soften as well - the imports sub-index dropped 1.2pp to 45.9 and the new export order sub-index was at 46.6, vs. 47.0 in November. Both indexes were at the weakest levels since late 2015/early 2016. The employment sub-index edged down slightly by 0.3pp to 48.0. Inventory indicators went down - the raw material inventories index was 0.3pp lower, and the finished goods inventory index dropped by 0.4pp in December to 48.2. Inflationary pressures eased meaningfully - the input price index dropped by 5.5pp to 44.8, the lowest level since December 2015, and the output prices index was 3.1pp lower at 43.3. Judging by the official PMI surveys, manufacturing activity growth may have softened further in December. One small caveat though is that NBS manufacturing PMI tends to fall in December (since 2010, on average NBS manufacturing PMI fell by around 0.1pp). The lower commodity prices may have also contributed to the decline in the headline manufacturing PMI reading. Trade data may have continued to slow in December, as implied in the low readings of trade indicators under PMI. Weaker external demand combined with trade tensions have contributed to the slower trade growth. “The next few months will be crucial to the Chinese economy’s direction and policy focus. Signs of domestic demand bottoming have yet to emerge. External pressures may accumulate, with exports possibly slowing as the front-loading effect wanes.” --Chang Shu and David Qu, Bloomberg Economics.
China’s economy slows further as manufacturing contracts for first time in two and a half years - China’s economy slowed further in December, with data released on Monday showing manufacturing sector activity contracted for the first time in two and a half years. The purchasing managers’ index (PMI) fell to 49.4 from 50.0 in November, with December falling below the watershed point between expansion and contraction in the sector for the first time since dropping to 49.9 in July 2016. It was also the lowest since hitting 49.0 in February 2016. "The falling PMI points to further pressure on the economy in the fourth quarter and the first quarter of next year. We expect the future policy will focus more on counter-cyclical adjustment to stablise demand," said Li Chao, chief macro analyst from Huatai Securities. The decline was largely unexpected, with the median forecast in a Bloomberg survey predicting an unchanged reading. The drop in manufacturing activity was led by a contraction in export orders for the seventh straight month to the lowest level since November 2015. Iris Pang, Greater China economist from ING Wholesale banking, noted that it is not too surprising that new export orders contracted to 46.6 in December under the lingering trade war, since it had remained below 50 since June. But with new orders, that includes both domestic and export, dropping below 50 to 49.7 for the first time this year, this shows that the economy is not running well, she said. "December is not a typical silent month for China [in term of economic activity]. So it's quite unusual to have domestic orders also slowing down," Pang said. "If you combine it with last week's industrial profit data [which fell for the first time since 2016], it proves that the domestic economy is in a bad shape."
Chinese manufacturing had an even worse December than expected, more data show - Results of a private survey on China's manufacturing for the month of December showed factory activity contracted for the first time in 19 months amid a trade dispute with the U.S.The Caixin/Markit Manufacturing Purchasing Managers' index (PMI), a private survey, fell to 49.7 in December from 50.2 in November. Analysts' in a Reuters poll predicted the PMI to come in at 50.1 in December.A reading above 50 indicates expansion, while a reading below that level signals contraction.In December, two separate measures for new orders and new export orders showed contraction, the Caixin survey showed."That showed external demand remained subdued due to the trade frictions between China and the U.S., while domestic demand weakened more notably," wrote Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin."It is looking increasingly likely that the Chinese economy may come under greater downward pressure," Zhong added in the press release.Economic data from the world's second-largest economy is being closely watched for signs of damage inflicted by the ongoing trade war between Washington and Beijing.Official manufacturing PMI released on Monday showed a slowdown in activity for the month of December as the sector contracted for the first time in more than two years, dropping below the critical 50 level.The private survey focuses on small and medium-sized enterprises, while the official PMI gauge focuses on large companies and state-owned enterprises.The slide in China's PMI is "worrying" as there will be broader fallout on Asian exporters, said Vishnu Varathan, head of economics and strategy at Mizuho Bank.Even though China's manufacturing PMI typically slows ahead of Chinese New Year holidays — starting on February 5 in 2019 — this particular downturn in the sector "could be even sharper than headlines suggest," Varathan wrote in a note on Wednesday. He added that the sustained downturn in manufacturing PMI in the second half of 2018 "with emphatic year-end slide" is "potentially symptomatic of far sharper underlying demand pullback. Especially as front-running US tariffs on China fade to reveal much softer demand conditions." Indeed, the situation on the ground in China may look worse than any numbers suggest, another analyst told CNBC.
China says will cut banks’ reserve requirements, taxes, as bad news piles up (Reuters) - China will cut banks’ reserve requirement ratios (RRRs), taxes and fees, Premier Li Keqiang said on Friday, as the world’s second-largest economy shows further signs of cooling. The measures will also included targeted RRR cuts aimed at supporting small and private companies, Li was quoted as saying in a statement on the website of the Chinese government. China slashed reserve requirements four times in 2018 to free up more funds for banks to lend and analysts expect three to four more cuts this year starting in the current quarter. Beijing will also step up “countercyclical adjustments” of macro policies and further cut taxes and fees, Li said, largely reiterating previous policy pledges. Li made the comments at a meeting with officials of the country’s banking and insurance regulator after visiting Bank of China (601988.SS), Industrial and Commercial Bank of China (601398.SS) and China Construction Bank (601939.SS). China reported on Monday that factory activity shrank in December for the first time in over two years, highlighting the challenges facing Beijing as it seeks to end a bruising trade war with Washington and reduce the risk of a sharper economic slowdown in 2019. New factory orders - an indicator of future activity - continued to soften, suggesting business conditions in China will likely get worse before they get better. In addition to the central bank’s numerous support measures, the government has also ramped up spending on infrastructure to rekindle sluggish demand and investment, but the moves will take some time to kick in. The government maintains 2018 economic growth will still come in on target at around 6.5 percent this year, slowing from 6.9 percent in 2017. But analysts see a further deceleration this year, with growth cooling to the low 6-percent range even if a trade deal with the United States is reached.
President Xi Defends China's Economy As Growth Collapses -- On Monday, China's official manufacturing PMI fell to 49.4 in December, from 50.0 in November, the lowest reading since February 2016, and the weakest reading for a December since 2008 (to be fair, some weakness in the December PMI is typical due to seasonal factors). Factory orders and other economic indicators released so far this month suggest that China's economy has slowed for the seventh straight month in December. This comes after China's GDP grew 6.5% during the third quarter, the slowest rate since 2009. With negotiations over the US-China trade truce expected to start shortly after the first of the year, Xi insisted that China would remain "resolute" in defending its sovereignty - a reference to China's dominance of the South China Sea - and press ahead with its "One Belt, One Road" initiative. "Looking at the world at large, we're facing a period of major change never seen in a century. No matter what these changes bring, China will remain resolute and confident in its defence of its national sovereignty and security," he said. On the domestic front, Xi touted China's success at lifting another 10 million people out of poverty this year, while praising its efforts to curb pollution in its air, water and soil. "The improvement of the people's well being speeded up and their living standards were steadily improved," he said. "We have also made great strides in our poverty alleviation efforts in the past year. Another 125 poor counties and 10 million poverty-stricken rural residents were lifted out of poverty in 2018," he said referring to progress to his pledge that China will eradicate poverty by 2020. Xi's remarks come after he confirmed that he had a constructive conversation with President Trump over the weekend about a trade war and urged the US to "meet China half way" when striking a trade deal. Watch Xi's address (with English subtitles) below:
China plans 6,800 km of new rail track in 2019 amid infrastructure push (Reuters) - China plans to invest in 6,800 kilometers (4,225 miles) worth of new railway lines in 2019, a 40 percent jump from the length of tracks laid last year, the national railway operator said on Wednesday amid a wider push to boost infrastructure spending. At least 3,200 kilometers of this target will be high-speed rail, the China Railway Corp said in a post on its official WeChat account. China Railway Corp said it invested in 4,683 kilometers worth of new rail lines last year, of which 4,100 were high-speed rail. The country invested 802.9 billion yuan ($117.12 billion) in rail fixed assets in 2018, the company added. It had set an initial budget of 732 billion yuan in January last year. It did not give an investment target for 2019. China has spent billions of dollars in its railway network over the past decade, but there have been signs that this was starting to slow as the network grew and Beijing began to crack down on local government debt. Its 2018 investment target was its lowest since 2013. However, the government began to speed up investment spending in the second half of last year in a bid to spur growth in the country’s slowing economy by approving new railway projects and reviving suspended ones.
China Is Selling More EVs Than the US - The electric car is becoming prominent China. China registered as many as 352,000 new electric vehicles (EV) in 2016 compared to 159,000 cars registered in the US during the same time period and mostly in California.Automotive analysts suggest China’s numbers could be inflated due to subsidy cheating: but, even the lower estimates remain higher than the US. Navigant Consulting puts China’s 2016 figure at an approximate 250,000, but, it expects new registrations will nearly double this year in 2018.China wants 11% of all vehicle sales to be EV by 2020 and would add up to 3 million sales annually. It is thought most of the next generation will never own a gasoline powered vehicle. Electric two-wheelers have transformed the way people move in most Chinese cities. In just ten years, the growth in the electric two-wheelers category (that includes vehicles ranging from electric bicycles to electric motorcycles) has increased the total number of vehicles in China. Electric bike sales began modestly in the 1990s and started to take off in 2004, when 40,000 were sold. Since then, over 100 million have been sold and now more than 20 million are sold each year. Electric two wheelers, in short, represent the first mass produced and adopted alternative fuel vehicles in the history of motorization. Cobalt is a key ingredient used in lithium-ion batteries to power everything from Apple products to Tesla cars. As it happens, the great cobalt boom of 2017 follows a bumper year for lithium, which rose by around 80% in price in 2016. More than 60% of the world’s Cobalt reserves are in the Democratic Republic of Congo making it one of the hardest things to get a supply of today. The Republic of Congo uses children labor as young as 5 years old to mine the mineral.
What China’s Online Shopping Craze Says About Its Bubble Economy - Michael Pettis - November 11, China celebrated Singles’ Day, a holiday that in the span of a few short years has become the most important day of the year for Chinese e-commerce. Sales on Alibaba, the leading retailer website at the center of the holiday, are the bellwether for its success.Alibaba first adopted the Singles’ Day name for a sales promotion in 2009 to sell winter coats, but the company quickly realized its potential. By 2013, Alibaba was racking up e-commerce sales to the tune of just under $6 billion, and three years later the company hadmore than tripled sales to nearly $18 billion. A year after that, in 2017, sales at Alibaba soared a further 42 percent, to more than $25 billion, and this year the company smashed that record yet again, with an additional 22 percent of total sales, for a total of nearly $31 billion. Notably, this $31 billion figure represents only Alibaba’s share—probably about one half—of China’s total e-commerce spending on the holiday. E-commerce consumer spending on peak days in the United States pales in comparison. Cyber Monday and the following Black Friday each November are the two biggest e-commerce days of the year for the United States, the world’s second biggest e-commerce market. Typically, U.S. e-commerce retailers rack up $11–12 billion in sales between these two days. Online sales for Amazon’s Prime Day each July, the third biggest day for U.S. e-commerce, were estimated to total just over $4 billion in 2018. That means that these three days of peak U.S. e-commerce spending combined are still easily dwarfed by Chinese spending on Singles’ Day, during which perhaps two times the total amount of e-commerce sales changed hands in a single day.
Chinese Scientist Who Genetically Modified Babies Is Under House Arrest - The Chinese scientist who shocked the world by announcing he created the first genetically-edited babies, He Jiankui, and who had been missing since his accomplishment spawned widespread outrage around the globe, has been "kept" in a small university guest house, apparently under lock and key while guarded by "a dozen unidentified men", according to the New York Times. He was spotted for the last time in public in late November at a conference in Hong Kong, where he defended his actions. Over the past couple of weeks, rumors and speculation spread whether or not he was under house arrest. There has been no word from the Chinese government or his university, which placed him under investigation, about his whereabouts (or future).For now, he appears to live in a fourth floor apartment in a university guesthouse on the campus of the Southern University of Science and Technology. He achieved instant global fame (and notoriety) in November, when he claimed that he used genetically edited embryos implanted in a woman who gave birth to twin girls. At the conference, he presented data backing up his claims. However, his work was quickly denounced – not only in China, but also across the world – as a step too far. Chinese scientists said that the project focused too much on scientific achievement and not enough on ethical standards.This past Wednesday, the doctor was seen on the balcony of his guest house, pacing back-and-forth. He could also be seen at one point talking to a woman who appeared to be his wife. It was observed that balconies attached to his apartment were fenced off by metal wiring. That same evening, four plainclothes guards stood outside of his apartment and when prompted, one said “How did you know that Professor He is here?” It wasn’t clear whether the guards were from the University, the government, the police or some type of other organization. Police in Shenzhen did not respond to the New York Times' request for comment.
Schools in China introduce ‘smart uniforms’ with GPS chips to track students’ movements and stop napping - Schools in China have created uniforms with tracking chips to monitor students' whereabouts and stop them playing truant. The so-called “smart uniforms”, which have been criticised on social media, record the time and date a student enters the school and a short video parents can see through a mobile app. Eleven schools in the southwest province of Guizhou have introduced the uniforms, developed by local tech firm Guizhou Guanyu Technology. Skiving off classes triggers an alarm to notify both teachers and parents of the student’s absence and an automatic voice alarm is activated if a student leaves school without permission. If a student falls asleep in class, alarms will sound, and parents will be able to keep tabs on the purchases their child makes at the school and use a mobile app to set spending limits, according to the firm’s website. A GPS system also tracks student movements even once they have left the school premises.
Chinese schools make pupils wear micro-chipped uniforms to thwart truancy -- Schools in southern China are forcing children to wear uniforms embedded with computer chips that track their movement and trigger an alarm if they skip class. More that more than 10 schools in Guizhou province and the neighboring autonomous region of Guangxi are now requiring students to wear “intelligent uniforms”, according to the state-run newspaper The Global Times. Two chips, sown into the shoulders of school jackets, can sustain around 500 wash cycles and temperatures of 150 degrees Celsius, according to the Guizhou Guanyu Technology Company, their manufacturer. On its website, Guizhou Guanyu boasts that the firm was established in response to the Communist Party's call for the creation of "smart campuses". The uniforms allow teachers and parents to track students’ movement, sending out an alert if they are not present in a lesson. Facial-recognition scanners at school gates match the chips with the correct student, meaning that any who try to swap jackets in order to bunk off will be caught. According to The Epoch Times, alarms will also sound if a student falls asleep in class, while parents can monitor the in-school cashless purchases of their child and set spending limits via a mobile app.
University authorities suppress student protest in China - Students at the prestigious Peking University yesterday held a protest against the decision by university authorities to suppress the Marxist student society. While the demonstration only involved about a dozen students peacefully chanting holding up placards, university guards quickly moved in to break it up and drag the protesters away. “Give us back our Marxist student society, resist violence on campus,” the students chanted. Witnesses told the South China Morning Post that the students had locked arms. Some were injured as security guards forced them into a building, manhandling and in some cases carrying them inside. “Several of them were pushed to the ground and suffered cuts to their hands and some had their glasses broken in the struggle,” according to one witness. At least eight of the students were still being held yesterday evening. The protest followed the restructuring of the Marxist student society by university authorities to ensure it was firmly under their political control. It replaced the society’s leaders, including its president Qui Zhanxuan, and installed some 32 new members, many of whom were members of the Communist Youth League or the Chinese Communist Party (CCP). The immediate pretext for the society’s suppression was an attempt by Qui to celebrate the 125th anniversary of the birth of former CCP leader Mao Zedong on December 26 1893. He had invited students throughout the country to take part in online events to mark the occasion. Qui was detained by police on Tuesday, given a written warning for “disrupting campus order” and then released on Thursday. He was among the students protesting yesterday and is still being held. Members of the Marxist student society at Peking University and students from other Chinese elite universities have recently been supporting workers in their struggles. In particular, students have been involved in assisting workers from Jasic Technology, a manufacturer of hi-tech welding equipment in Shenzhen, trying to establish an independent trade union. The Chinese police have repeatedly cracked down on the workers and students involved in the Jasic Technology dispute. These include Zhang Shengye, a recent Peking University graduate, who was detained last month by “men in black clothing” on campus last month. Around 15 students and recent graduates are still in detention after their arrest earlier in the year, according to the Jasic Workers’ Solidarity Group. Four have been denied access to their lawyers.
Worse than Japan: how China’s looming demographic crisis will doom its economic dream China first began to promote population control in 1973 and introduced its one-child policy in 1980. As a result, its total fertility rate, or births per woman, dropped from 4.54 in 1973 to 2.29 in 1989, then to 1.22 in 2000 and 1.05 (then the lowest in the world) in 2015. Japan’s low fertility rate triggered an economic crisis in the 1990s. By 1992, Japan’s median age had increased to 38.5 (China hit that figure in 2016), while its old-age dependency ratio – the number of people aged 65-plus per 20- to 64-year-olds – increased to 18 per cent (China is predicted to hit that figure by 2023). Meanwhile, Japan’s ageing index (those over 65 per 100 people aged under 15) increased to 76 per cent (2018 for China), and the proportion of people aged 15-39 fell to 35 per cent (2020 for China). Japan’s labour force began to decline in 1996 (2014 for China). Therefore, China's demographic structure is similar to that of Japan in 1992, and it may be experiencing an economic crisis similar to that of Japan in the 1990s. Japan’s economic crisis was essentially a demographic crisis. The decline in young people in the labour force has led to a shortage in manufacturing: the workforce employed in industry decreased from 22.9 million in 1992 to 17 million in 2017, and the workforce is ageing, leading to a decline in production and innovation. As a result, Japan’s manufacturing exports as a share of the global total declined from 12.5 per cent in 1993 to 5.2 per cent in 2017, and the number of Japanese firms ranked in the Fortune Global 500 fell from 149 in 1994 to 52 in 2018. In any society, an increase in the number of elderly leads to a drop in savings, and a decrease in the labour force leads to a decline in return on investment, which reduces the investment rate. From 1991 to 2016, Japan’s savings rate fell from 35.7 per cent to 24.5 per cent, and the investment rate fell from 34.2 per cent to 23.6 per cent. The increase in the number of elderly also leads to a rise in medical and social security expenses, thereby increasing government debt. As a share of GDP, Japan’s public health expenditure increased from 4.4 per cent in 1990 to 8.6 per cent in 2014, public spending on pensions rose from 4.9 per cent in 1991 to 10.2 per cent in 2013, and the general government debt increased from 63 per cent in 1991 to 236 per cent in 2016.Since 2000, China’s total fertility rate has been lower than that of Japan. The average in 2010-2016 was 1.18 in China and 1.42 in Japan. This means China's ageing crisis will be more severe than Japan’s, and its economic outlook bleaker.
A Debt Based System Can't Succeed Without Population Growth - A simple idea today... that the end of population growth (where it matters) has long been upon us (detailed below). Absent population growth among the nations that do nearly all the consuming, a debt based economic and financial system (to coerce ever higher levels of debt fueled consumption) can't ultimately succeed. That is, without population growth, assets generally don't appreciate, homes are just shelter rather than "investments", and debt is generally only a drag on future spending. Likewise, without population growth, total global energy consumption is on the precipice of secular decline (detailed HERE).In this reality, the only means of maintaining or lifting asset prices further is ever more central bank monetization (aka, centrally planned and executed counterfeiting). Of course, this monetization scheme is doomed to fail but while it continues, the gains are privatized while the losses are socialized. But ultimately markets (and economies, as a means of honest exchange), will get cleared. So, without further ado, I detail the end of population growth (particularly where it matters): 1- Simply put, topline global population growth (births) ceased increasing almost 30 years ago! Looking solely at the top-line (dashed black line, chart below), note that from 1950 to 1989, annual global births increased 73% (+57 million). Conversely, from 1989 to 2018, annual global births have risen just 1% (+1 million). Based on UN data and UN median (overly optimistic) future estimates. However, the distribution of those births among the differing groupings of nations (by income) has dramatically changed from 1950 to present...and will shift further by 2050. The chart below shows both total births but also the proportion of births among the high income, upper middle income nations, and China have nearly fallen in half since 1950...while the proportion of births among the lower middle and low income nations have soared. More simply put, births among those that consume heavily (about 90% of total global energy) have long since collapsed while births among those who consume relatively little (just over 10%) have soared.
Xi Jinping says Taiwan 'must and will be' reunited with China -- Chinese President Xi Jinping has urged the people of Taiwan to accept it "must and will be" reunited with China. In a speech marking 40 years since the start of improving ties, he reiterated Beijing's call for peaceful unification on a one-country-two-systems basis. However, he also warned that China reserved the right to use force. While Taiwan is self-governed and de facto independent, it has never formally declared independence from the mainland. Beijing considers the island to be a breakaway province and Mr Xi's comments are in line with China's long-standing policy towards reunification. But on Wednesday, Taiwan's President Tsai Ing-wen said the island would never accept reunification with China under the terms offered by Beijing. "I want to reiterate that Taiwan will never accept 'one country, two systems'. The vast majority of Taiwanese public opinion also resolutely opposes 'one country, two systems', and this is also the 'Taiwan consensus'." Under the "one country, two systems" formula, Taiwan would have the right to run its own affairs; a similar arrangement is used in Hong Kong. Hong Kong has its own legal system, and rights including freedom of assembly and free speech are protected - however, there are widespread concerns in the territory that those freedoms are gradually being eroded. In his speech on Wednesday, Mr Xi said both sides were part of the same Chinese family and that Taiwanese independence was "an adverse current from history and a dead end". Taiwanese people "must understand that independence will only bring hardship," Mr Xi said, adding Beijing would never tolerate any form of activity promoting Taiwanese independence. Instead, unification was "an inevitable requirement for the great rejuvenation of the Chinese people", he argued. He also stressed that relations with Taiwan were "part of China's domestic politics" and that "foreign interference is intolerable". Beijing "reserves the option of taking all necessary measures" against outside forces that interfere with peaceful reunification and Taiwanese separatist activities.
South China Sea- Vietnam takes hard line but will Beijing listen? - Tough negotiations lie ahead over a new pact between China and Southeast Asian nations aimed at easing tensions in the South China Sea, as Vietnam pushes for provisions likely to prove unpalatable to Beijing, according to draft documents for a new code of conduct. Hanoi wants the pact to outlaw many of the actions China has carried out across the hotly disputed waterway in recent years, including artificial island building, blockades and offensive weaponry such as missile deployments, according to a negotiating draft of the Asean Code of Conduct (COC). The draft also shows Hanoi is pushing for a ban on any new Air Defence Identification Zone – something Beijing unilaterally announced over the East China Sea in 2013. Chinese officials have not ruled out a similar move, in which all aircraft are supposed to identify themselves to Chinese authorities, over the South China Sea. Hanoi is also demanding states clarify their maritime claims in the vital trade route according to international law – an apparent attempt to shatter the controversial “nine-dash line” by which China claims and patrols much of the South China Sea, the draft shows. “Going forward, there will be some very testy exchanges between the Vietnamese and China in particular over the text of this agreement,” said Singapore-based Ian Storey, a veteran South China Sea expert, who has seen the draft. “Vietnam is including those points or activities that they want forbidden by the Code of Conduct precisely because China has been carrying these out for the last 10 years.”
Beijing Has Detained 13 Canadians Since Arrest Of Huawei CFO - When the US published its latest travel advisory warning its citizens about the "arbitrary law enforcement" risks they could face in China (and offering a list of recommended precautions for those obstinate enough to ignore the government's warnings), some wondered, why now? With trade negotiations set to begin in earnest next week, one would think that the US wouldn't want to kick the hornet's nest (though, in fairness, the DOJ's steady stream of indictments against Chinese government-sponsored hackers have continued, as has the prosecution of Huawei CFO Meng Wanzhou).Well, Canada's Globe and Mail might have just answered that question by confirming that the Beijing's suspected retaliation against Ottawa over Meng's arrest has been even more severe than previously believed. According to the paper, 13 Canadians have been detained in China since Dec. 1 - the day Meng was arrested by Canadian authorities after landing in Vancouver. Until now, the arrests of only three Canadians - those of businessman Michael Spavor, former diplomat Michael Kovrig and teacher Sarah McIver (who has been deported) - had been publicly known.Fortunately, eight of the 13 detainees have been released. And the Canadian government has so far refused to confirm the identities of the other 10.But still, the report begs the question: Why has Justin Trudeau's government been so reluctant to issue a travel advisory of its own, as conservative lawmakers have been urging him to do?
China and US play the Great Game in South Asia -- In the Great Game being played across the Indian Ocean, the U.S. Navy has its eye on Sri Lanka's northeastern port of Trincomalee to serve as a logistics hub for South Asian waters churned by India, Japan and China. Western diplomats in Colombo, the Sri Lankan capital, noted an upping of the stakes when a Nimitz-class aircraft carrier from the U.S. 7th Fleet dropped anchor early this month at Trincomalee, the world's second deepest natural harbor with great strategic value. The visit of USS John C. Stennis followed a Trincomalee port call in August by another 7th Fleet vessel and a unit of marines to assess logistical support for visiting U.S. ships. "Trinco is a logical choice because it is the most important piece of strategic real estate in Sri Lanka," a diplomat told the Nikkei Asian Review. "These are signs of new thinking in Washington regarding this part of South Asia, where over the past six years the Chinese presence has become so obvious and widespread." Veteran Sri Lankan foreign policy observers link the U.S. Navy's new interest in India's backyard to China's growing economic interests around the Indian Ocean. "The U.S. is quite belatedly trying to understand the importance of the Indian Ocean, and this change is because of China," The Sri Lankan government is still seeking clarity on the proposed hub relationship. Its purpose would be to secure "mission-critical supplies and services to U.S. Navy ships transiting through and operating in the Indian Ocean," according to a statement from the 7th Fleet about the call at Trincomalee, where "no enduring U.S. Navy logistics footprint exists." Washington's interest in Sri Lanka comes after a 10-year bilateral naval agreement ended. Under the Acquisition and Cross-Servicing Agreement, Sri Lanka opened its ports to U.S. naval vessels for refuelling and other resupplying from March 2007 onwards. Security analysts say the latest turn in naval relations complement Washington's efforts to court Colombo through military exercises. In August this year, the Sri Lankan navy made its debut at the Rim of the Pacific Exercise, which is the world's largest international maritime warfare exercise and led by the U.S. Navy's Pacific Fleet. In 2017, Sri Lanka hosted the annual Cooperation Afloat Readiness and Training exercise with U.S. Pacific Fleet at Trincomalee for the first time.
Chinese Admiral Wants To Sink Two US Aircraft Carriers Over South China Sea - Mere days after Chinese President Xi Jinping vowed to "resolutely" defend China's security interest - a veiled reference to maintaining its domination of the South China Sea - News.au has published details from a speech delivered two weeks ago by one of China's leading military commanders where he outlined a strategy to rebuff the US Navy should it take an even more interventionist posture within the nine-dash line. Rear Admiral Lou Yuan told an audience in Shenzhen that the simmering dispute over the East and South China Seas could be decisively ended by sinking two US aircraft carriers. Taiwan’s Central News Agency reported that Admiral Lou gave a long speech on the state of Sino-US relations, where he declared that the trade spat was "definitely not simply friction over economics and trade," but a "prime strategic issue." And that if China wants the US to back off, it must be willing to attack US ships when they intrude in Chinese territory. During the Dec. 20 speech to the 2018 Military Industry List summit, Lou declared that China’s anti-ship ballistic and cruise missiles were capable of hitting US carriers, even when they were in the middle of a "bubble" of defensive escorts. "What the United States fears the most is taking casualties," Admiral Lou declared.He said the loss of one super carrier would cost the US the lives of 5000 service men and women. Sinking two would double that toll."We’ll see how frightened America is." Lou also explained what he described as the US's five vulnerabilities, and insisted that China must not hesitate to strike back at any of them should a US fleet even dare to stop in Taiwan. In his speech, he said there were ‘five cornerstones of the United States’ open to exploitation: their military, their money, their talent, their voting system — and their fear of adversaries. Admiral Lou, who holds an academic military rank - not a service role - said China should "use its strength to attack the enemy’s shortcomings. Attack wherever the enemy is afraid of being hit. Wherever the enemy is weak …"
Global Economic Slump Imminent As Korean Exports 'Canary' Crashes - In the latest sign that the slowdown in China and the global trade war is weighing on global commerce, South Korea’s exports fell in December. The 1.2% YoY decline was dramatically below the +2.5% YoY expected and missed even the most pessimistic forecast (which was still a rise). Korean exports were hit by falling memory-chip and oil prices and cooling demand from China and imports also disappointed, rising 0.9% YoY. "The (annual) decline came about a month earlier than I thought, but I expect Korean exports to be weak throughout the first half of this year, posting low single-digit growth at best," said Lee Seung-hoon, an economist at Meritz Securities. Exports to China dropped 13.9% in December over a year earlier, as trade friction with the United States weighed on demand from the largest buyer of South Korean goods. South Korea is the first major exporter to report trade data each month, so provides an early reading of global trade; and as the world's leading exporter of computer chips, ships, cars and petroleum products, December's data is a major red flag for the global economy. As the chart below shows, Global equity market earnings growth (and contraction) is extremely tightly correlated to Korean export growth (or contraction)... So maybe global stocks are on to something with their recent collapse as they increasingly price in an earnings recession.
Bangladesh poll landslide raises democracy fears- analysts - A crushing victory for Prime Minister Sheikh Hasina in an election overshadowed by allegations it was fixed raises fears about the future of democracy in Bangladesh, analysts say. Hasina's Awami League party extended its decade-long grip on power by winning an unprecedented 98 percent of seats while key opposition parties are now floundering in the wilderness with next to no representation in parliament. The Muslim-majority nation is now an entrenched "one-party system", political analyst Ataur Rahman told AFP, likening it to Southeast Asian ruling parties of the 1970s and 80s. "There will be less space for freedom of press, civil society... (and) political parties" after the election, said Rahman, who heads the Dhaka-based Centre for Governance Studies. Hasina, Bangladesh's longest-serving leader, has been accused of locking up dissenters and presiding over enforced disappearances as well as muzzling freedom of speech through a draconian anti-press law toughened this year. She denies any authoritarianism. The main opposition Bangladesh Nationalist Party (BNP) endured its worst ever electoral performance Sunday while the country's largest Islamist party has been crushed in government crackdowns. The Jamaat-e-Islami's leaders and many of its activists have gone underground to avoid arrest since the party was banned from putting up candidates under its own banner in 2012. Five of its top leaders have been hanged over war crimes charges dating back to Bangladesh's 1971 independence war.The BNP has claimed the detention of thousands of its activists ahead of the poll prevented it from running anything close to an effective campaign.
Indian women form nearly 400-mile long wall to support right to enter Hindu temple - Hundreds of thousands of women formed a wall that stretched nearly 400 miles along India’s southern state of Kerala on Tuesday to support the right of females to enter a Hindu temple. Local government officials said more than 5 million people helped the "women's wall" stretch 385 miles, according to CNN. The demonstration occurred after two women defied a longtime ban that prevented females of menstruating age from entering the Sabarimala temple, which is considered one of the holiest sites in Hinduism. India's Supreme Court lifted the temple ban on women of menstruating age in September, but Sabarimala has refused to abide by the ruling, according to Reuters. A video posted online by Asian News International showed the women, Bindu and Kanaka Durga, rushing into the temple at around 3:45 a.m. on Tuesday. The news service noted that previous attempts from women to enter the facility have been blocked by its devotees. The Guardian reported that the women, who are both in their 40s, exited the temple after offering prayers to the deity Lord Ayyappa, who is considered celibate. The temple was later closed for one hour so priests could "purify it."
Millions of Women Link Arms to Form 400-Mile Human Chain in Massive Protest — A day after millions of women stood together in the Indian state to form a nearly 400-mile-long human chain to call for equality, two women made history—and sparked protests and a call for a state-wide shutdown—when they entered the Sabarimala temple in the state of Kerala in the early hours Wednesday.They were the first women to enter the holy Hindu site since a ban on women of menstrual age was lifted just over three months ago, as protests have blocked others from entering previously.The women were identified as 42-year-old Kanaka Durga and 44-year-old Bindu Ammini, who told India Today TV that the two represented “the society fighting for gender justice.” Durga added, “We are not scared at all. We followed our legal right as women. We are 100 percent sure that we didn’t hurt people.” Their 3:30am, police-accompanied entrance to the temple follows the New Year’s Day action called the “Women’s Wall“—a 385-mile (620-kilometer ) human chain. Reuters reports that thousands took part, while other local news outlets put the number at hundreds of thousands, and other local outlets estimated the figure was in the millions. Organizers had expected as many as five million to take part in the government-sponsored event, which was motivated by ongoing protests carried out by the two opposition parties in the state, Bharatiya Janata Party (BJP) and Congress Party, who are opposed to the high court’s ruling from September striking down the ban on 10- to 50-year-old girls and women from entering the temple. According to India’s News Minute, “In what is being seen as a defining moment for feminist politics in Kerala, leaders and members from political parties, socio-political organizations, and progressive Hindu organizations, too, joined the event. There were men, too, who stood up in support and solidarity, affirming their commitment to gender equality.” Kerala Chief Minister Pinarayi Vijayan, for his part, called the Women’s Wall a “movement for equality, gender sensitivity, and social awakening,” while The Times of India framed the event as a “historic moment for gender equality.” Social media users captured images of the “wall”:
Government proposes controversial changes to Aadhaar Act - The Narendra Modi government on Wednesday introduced a bill in the lower house of parliament to propose amendments to the Aadhaar Act. The bill was tabled after the Supreme Court verdict on September 27, 2018 which said that Aadhaar, a digital identification project, can only be used for the implementation of welfare schemes and state subsidies. The judgement barred private companies from using the data in any other way. The Supreme Court had struck down Section 57 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits, and Services) Act, calling it unconstitutional.Section 57 gave companies such as mobile companies, e-wallets, cabs and e-commerce companies, the statutory right to sell meta data to the growing data brokering industry which uses it for targeted advertising or consumer profiling.Contrarily, the proposed amendment by the government will allow private and commercial use of citizens’ Aadhaar-related data.“The Amendment Bill proposes changes to the Aadhaar Act, Telegraph Act and the Prevention of Money Laundering Act, which will circumvent the Supreme Court judgment and allow the continued use of Aadhaar-based e-KYC (know your customer) authentication by private entities for mobile and banking services”, said a statement by Rethink Aadhaar, a non-partisan campaign that is critical of the project. The bill proposes to arm the Unique Identification Authority of India (UIDAI) with more powers, similar to those of regulators.This regulatory power, under Clause 54 of the bill, allows the UIDAI to collect bio-metric or demographic information, which privacy activists regard as highly inimical. However, according to Clause 33 of the bill, no appeal against such an order can be adjudicated without giving a hearing to the UIDAI.The Aadhaar Act, at present, does not empower the body to take enforcement action against errant players in the Aadhaar system. The amendment in the proposed bill includes a fine of 10 million rupees if the entities fail to comply with provisions of the act. In the case of a continuing failure, a penalty of 1 million rupees may be imposed for each day the failure continues.
China disputes ‘misleading’ US$40 billion debt estimate for Pakistan’s belt and road projects -Concerns over Pakistan’s debt problems have deepened after China said “misleading” figures had been released on how much Islamabad owed for its “Belt and Road Initiative” projects. Media reports last week said Pakistan would have to repay China a total of US$40 billion over 20 years for infrastructure and development projects under the scheme. Pakistan newspaper The Express Tribune reported that it was the first comprehensive estimate of Islamabad’s debt repayments for the China-Pakistan Economic Corridor (CPEC), based on documents from the country’s Ministry of Planning and Development. A spokesman for CPEC also told the newspaper that Pakistan’s Ministry of Finance had given the US$40 billion estimate to the International Monetary Fund in November. But China has disputed the figure, its embassy in Islamabad issuing a statement over the weekend calling the estimate “wrong and misleading”. The embassy also released a list of 22 “early harvest projects” in Pakistan totalling US$18.9 billion that have already been completed or are under construction. Other debt was not owed by the government but was from private deals, according to the embassy. “The Chinese companies and their partners invested US$12.8 billion in energy projects in Pakistan,” the statement said, along with nearly US$10 billion raised from commercial banks. Adding to the confusion, Pakistan’s planning ministry also said the US$40 billion estimate was wrong, saying the government owed US$6 billion to Beijing in low-interest loans and grants for infrastructure projects spread over a repayment period of 20 to 25 years. Pakistan has sought support from the International Monetary Fund, but both the IMF and the United States have called for greater transparency about its CPEC debt. IMF officials visited Pakistan last month to discuss possible economic policies and reforms that could be supported by the fund.
Will China seize prized port if Kenya can’t repay belt and road loans? - The prospect that China might at some point be able to seize Kenya’s prized port of Mombasa has caused public confusion and alarm and again raised questions about the risks of participating in China’s “Belt and Road Initiative”. Kenyan President Uhuru Kenyatta has strongly denied a local media report that the East African nation was at risk of having China seize the strategic port in compensation for unpaid debt related to belt and road infrastructure development projects. According to online news portal African Stand, Kenya may soon have to hand over control of its largest and most developed port, while other assets related to the inland shipment of goods from Mombasa, on the Indian Ocean coast, may also be affected. The report cited a recently completed audit by Kenya’s auditor-general which indicated China could seize the port if Kenya was unable to repay its debt. Kenyatta described the report as “propaganda” at a round table discussion with journalists on Friday, according to Nairobi’s The Star newspaper. “We are ahead of our payment schedule for the SGR loan and there is no cause for alarm,” he said. Kenya ranks as Africa’s third most indebted country to China for the period between 2000 to 2017, according to data from the China Africa Research Initiative. The country’s current debt to China is understood to be about US$9.8 billion, which has funded large chunks of national infrastructure, including a number of highways and the Standard Gauge Railway (SGR) which provides a high-speed connection between Mombasa and Nairobi, the country’s capital, to facilitate the import and export of goods.
Top architects are left stunned by giant cracks that appeared in Sydney’s Opal Tower just months after the $165million building opened – as it’s revealed the block was built on a reclaimed swamp - Top architects are 'bewildered' as to how cracks formed in the wall of a brand new tower block, forcing the evacuation of 3,000 people.Hundreds were moved out of the 38-storey Opal Tower in Sydney Olympic Park on Monday along with thousands more from nearby buildings. Residents said they heard loud cracks coming from the 10th floor through the morning and raised the alarm about 2.45pm. A shocking photo from inside the building showed a plaster wall collapsed in a heap and a crack down the length of the wall. Yellow tape was on the door handle. Firefighters and public works engineers found a large crack along an internal support wall after the building moved one to two millimetres. A shocking photo from inside the building showed a plaster wall collapsed in a heap and a crack down the length of the wall. Yellow tape was on the door handle. Some residents said the doors to the building were jammed and police had to break them down with heavy equipment to help residents escape. The cause of the fault in the building, which was completed in March and opened in August, was still unknown, as planning experts slammed the developer. Urban Taskforce chief executive Chris Johnson said the cracks were 'staggering', given the building was essentially brand new. . 'It's a bit bewildering to me that something like this could happen. Buildings like that go through all sorts of checks and balances,' he told the Sydney Morning Herald.
Brazil to inaugurate far-right firebrand Bolsonaro president (Reuters) - Right-wing nationalist Jair Bolsonaro, who has vowed to crack down on political corruption, violent crime and ignite a moribund economy with deregulation and fiscal discipline, will be sworn in as Brazil’s president on Tuesday. The former Army captain and seven-term fringe congressman rode a wave of anti-establishment anger to became Brazil’s first far-right president since a military dictatorship gave way to civilian rule three decades ago. Bolsonaro plans to realign Brazil internationally, moving away from developing nation allies and closer to the policies of Western leaders, particularly U.S. President Donald Trump, who sent Secretary of State Mike Pompeo to his inauguration. As a clear sign of that diplomatic shift, Bolsonaro plans to move the Brazilian embassy in Israel from Tel Aviv to Jerusalem, breaking with Brazil’s traditional support for a two-state solution to the Palestinian issue. Backed massively by conservative sectors of Brazil, including Christian evangelical churches, Bolsonaro would block moves to legalize abortion beyond even the current limited exceptions and remove sex education from public schools, opposing what he calls “cultural Marxism” introduced by recent leftist governments. One-third of his cabinet are former army officers, mostly fellow cadets at the Black Needles academy, Brazil’s West Point, all outspoken backers of the country’s 1964-1985 military regime. Bolsonaro, 63, has faced charges of inciting rape and for hate crimes because of comments about women, gays and racial minorities. Yet his law-and-order rhetoric and plans to ease gun controls have resonated with many voters, especially in Brazil’s booming farm country.
Brazil’s Bolsonaro targets minority rights on first day in office - Within his first few hours of being in office, Brazil's newly elected President Jair Bolsonaro issued a series of executive orders that "targeted Brazil's indigenous groups, descendants of slaves and the LGBT community," the Associated Press reports. The orders will make it difficult to establish new land designated for indigenous groups and descendants of former slaves, while also removing LGBT concerns from the responsibilities of the the human rights ministry. LGBT activist Symmy Larrat told the AP that the community doesn't see "any signs there will be any other government infrastructure to handle LGBT issues." The far-right Bolsonaro has promised to crack down on crime and corruption and revitalize the struggling Brazilian economy through pro-market reforms. The latter pledge helped propel Sao Paulo's stock market to a record close on his first day, per the AP.
- But critics fear Bolsonaro's history of racism, homophobia and praise for military dictators will manifest in policy that undermines human rights, especially for minority groups.
- Secretary of State Mike Pompeo, who traveled to Brazil for the inauguration, told Bolsonaro that President Trump is confident that the U.S.-Brazil relationship "will benefit the world and the set of shared values that we believe we can together advance."
Brazil's Bolsonaro says he is open to hosting a U.S. military base (Reuters) - Brazil’s new President Jair Bolsonaro said on Thursday that he would be open to the possibility of the United States operating a military base on his country’s soil, a move that would form a sharp shift in direction for Brazilian foreign policy. Bolsonaro, who took power on Tuesday, said that Russia’s support of President Nicolas Maduro’s “dictatorship” in neighboring Venezuela had significantly ramped up tensions in the region and was a worrying development. Asked by the SBT TV network in an interview taped on Thursday if that meant he would allow U.S. military presence in Brazil, Bolsonaro responded that he would certainly be willing to negotiate that possibility. “Depending on what happens in the world, who knows if we would not need to discuss that question in the future,” Bolsonaro said. He emphasized that what Brazil seeks is to have “supremacy here in South America.” The far-right leader is upending foreign policy dating back over a decade, which saw the leftist Workers Party emphasizing South-South relations and sometimes tussling on the international stage with the United States. Bolsonaro, a 63-year-old former Army captain and admirer of both Brazil’s 1964 to 1985 military dictatorship and U.S. President Donald Trump, has quickly deepened ties with the Unites States and Israel. Bolsonaro’s national security adviser, retired Army General Augusto Heleno, confirmed earlier on Thursday that the president wants to move Brazil’s embassy in Israel to Jerusalem, but that logistical considerations were standing in the way. Heleno did not elaborate. But the country’s powerful agriculture sector is opposed to moving the embassy from Tel Aviv and angering Arab nations that buy billions of dollars worth of Brazilian halal or “permissible” meat each year. Benjamin Netanyahu became the first Israeli Prime Minister to visit Brazil this week when he attended Bolsonaro’s inauguration. After a private meeting, Netanyahu said that Bolsonaro told him that moving the embassy was a matter of “when, not if.”
Russian Opposition Lacks an Agenda Beyond Getting Rid of Putin, ‘Nezavisimaya gazeta’ Says -- Those individuals and groups collectively known as the Russian opposition are united in their aspiration to get rid of Vladimir Putin, but they have failed to articulate what they would do if and when they were to get power, the editors of Nezavisimaya gazeta say.As a result, they are unable to mobilize people unhappy with this or that Putin program as they would be if they clearly defined their platform and instead play the largely decorative role that the Kremlin has assigned to them rather than becoming a real opposition, the paper suggests (ng.ru/editorial/2018-12-26/2_7474_red.html).Russians are angry about many of the things Putin has done or not done, but because opposition leaders and groups are not explicit about what they would do instead, they aren’t able to mobilize that anger and gain support. Instead, they imply that they will do something better when they come to power. Few Russians are willing to take that chance.The behavior of Kseniya Sobchak and Dmitry Gudkov and their renamed party, the Party of Change, is typical, the editors says. “Already in March, Sobchak stressed that the new party will not have a left or right ideology because the main thing is to ‘give the country a future and to speak out for renewal.'”That is a position taken by “practically all the well-known figures of the opposition” during the past year, including Aleksey Navalny, Ilya Yashin, Grigory Yavlensky, Maksim Kats, “and even Mikhail Khodorkovsky.” And it is weakening the chances of each and every one while allowing the powers that be to continue to run things. In the absence of a clear indication of just what they would do if they had power, “it is impossible to precisely define on what social groups they would relay if they were really struggling for power, if they were able to participate in elections, to receive time on television and so on,” the paper says.
Practice Alert: Russia expands corporate liability for bribery - As previously reported, Russia recently amended its corporate bribery statute (Article 19.28 of the Code of Administrative Violations) to allow companies to avoid prosecution if they assist in the discovery or investigation of the offense or if they can prove that the bribe was extorted. The same amendment also allowed courts to preliminarily freeze the property of companies under investigation up to the maximum amount of the fine. On December 27, President Putin signed another amendment to 19.28 which will, this time, significantly expand the scope of corporate liability for bribery. Article 19.28 allows for the prosecution of a legal entity for any bribe given by it, or a third party "in the interests of" such legal entity. The new version, will, in addition to bribes given in the interests of the defendant company, also cover bribes given in the interests of any other "affiliated" entity (a term not clearly defined in the draft law). It also covers situations where the bribe is given not just to the primary bribe taker (which, under the law, can be a Russian or foreign government official, official of a public international organization or manager of a commercial enterprise) but also to anyone designated to the primary bribe taker receive the bribe. This means that a company, including any foreign company subject to the jurisdiction of 19.28, could be liable for any bribe "in the interests of" (a term not defined in the law, but clearly much broader than "given by") any subsidiary, group company, distributor or any other entity "affiliated with" the company given to anyone designated by a primary bribe taker regardless of whether it knew, or had reason to know, of such payment.
Faltering Global Factories Add to 2019 Central Bank Challenges - Manufacturing gauges across the world’s largest economies stumbled at the end of last year, starting 2019 with fresh challenges for global growth and central banks. The global manufacturing index from JPMorgan Chase & Co. and IHS Markit fell in December to the lowest level since September 2016 as measures of orders and hiring weakened, data showed on January 2. That followed other IHS Markit reports showing factory conditions slumped across Asia’s most export-oriented economies, with China’s signaling contraction for the first time since mid-2017 as Taiwan, Malaysia and South Korea also point to declines. Factory growth in the euro area fell to the lowest in almost three years. In the U.S., evidence is mounting that President Donald Trump’s trade war is becoming a greater headwind for producers. Five Federal Reserve indexes of regional manufacturing all slumped in December, the first time they’ve fallen in unison since May 2016. Another gauge of American manufacturing, due Jan. 3, is projected to fall to an eight-month low. The growing pile of weaker data may increase pressure on the Fed to signal an immediate pause in its quarterly pace of interest-rate increases. Officials have already said they intend to slow down the pace of hikes this year. As policymakers raised rates in December for the fourth time in 2018, they penciled in just two moves for 2019, according to the median projection of Fed governors and district-bank presidents. That’s still more than many investors anticipate, with interest-rate futures pointing to no moves in 2019 and a potential rate cut next year. Amid those expectations, financial markets reacted badly to the December hike and the lack of a stronger signal on when the Fed would take a break. The S&P 500 stock index in December had its worst month since February 2009. Trade tensions between the U.S. and China are hurting demand across Asia’s manufacturing hubs and export-oriented European economies including Germany. The International Monetary Fund in October cut its 2018 and 2019 global growth projections, citing trade uncertainty. China’s central bank said on Jan. 3 it will adjust the calculation of some banks’ reserve ratios, a move aimed at boosting the impact of a previous easing step as the economy slows. Meanwhile, economists project slower U.S. expansion and job growth this year as fiscal stimulus that took effect in early 2018 begins to fade. What’s more, a government shutdown has postponed the release of some U.S. indicators, including those for international trade, adding frustration for economists and investors seeking guidance from fresh data.
Eurozone PMI Plunges To Four Year Lows -- US, China, and now European composite PMIs have all tumbled in December with Eurozone PMI slipping to 51.1 - its weakest in four years. Growth in manufacturing and services slowed more than initially reported in December - weighed down by public protests in France, Germany’s continued struggles in the car industry, and renewed weakness in Italy. Composite gauges for output expectations and new orders were the worst since late 2014. Under the hood, the European nations are highly varied (from best to worst):
- Ireland: 55.5 (9-month low)
- Spain: 53.4 (3-month low)
- Germany: 51.6 (66-month low)
- Italy: 50.0 (3-month low)
- France: 48.7 (49-month low)
Chris Williamson, Chief Business Economist at IHS Markit said:“The eurozone economy moved down another gear at the end of 2018, with growth down considerably from the elevated rates at the start of the year. December saw business activity grow at the weakest rate since late-2014 as inflows of new work barely rose. Levels of unfinished business are now falling for the first time in nearly four years as previously-received orders are not being fully replaced with new work.“While a drop in business activity in France could be partly blamed on the ‘yellow vest’ protests, the rest of the region lacks any such mitigating factors, albeit with the recent weakness of the autos sector hopefully a temporary set-back.“Importantly, with expectations of output dropping to the lowest for over four years, companies are not anticipating any imminent revival in demand. Worries reflect multiple headwinds from trade wars, Brexit, heightened political uncertainty, financial market volatility and slower global economic growth.“Employment growth has already taken a knock as companies take a more cautious approach to hiring in the face of weaker order books. Jobs growth has hit a two-year low.“Better news came in the form of an easing in price pressures to the lowest for over a year, which should provide some breathing space for the European Central Bank to review its policy guidance.”
Slowly but surely, Germany is attracting the skilled workers it needs - Handelsblatt - For many years, fewer than 10 percent of IT experts emigrating from India chose Germany. And when Indian companies dispatched employees here, they often had to sweeten the deal with bonuses. An increasing number of young, well-trained and ambitious Indians are choosing careers in Germany. Indians make up around 14,000 of the more than 53,000 people now working in Germany on the EU Blue Card work permit for highly skilled non-EU citizens. Many end up staying longer than the four years they’re initially entitled to. Of the 28,000 people who once had a Blue Card, 80 percent have a long-term residence permit. The number of Indians who filed applications for a German visa shot up from 60,000 in 2013 to around 183,000 in 2017. The German foreign ministry said there had been a “substantial increase in demand, significantly higher than the global average” in 2017. The anti-immigrant rioting in Chemnitz in August does not appear to have deterred applicants. It certainly hasn’t fazed Akanksha Sharma, a software developer who has been working in Berlin for delivery startup Foodora for the past six months. “Politically all countries in Europe are stable,” she said. “The Germans know what’s wrong. And they stick to the rules.” Sharma opted for Germany because she was sick of constantly having to make twice the effort to prove herself against male colleagues who earned far more than she did. “I had three job offers in India, and none of them was appropriate for the experience I offer,” she said, irritation ringing in her voice. It’s not necessarily that Germany has become more attractive in and of itself. Indians and workers from other non-EU countries are opting for Germany partly because other traditionally immigrant-rich countries have become less inviting, especially Donald Trump’s America and Britain in the era of Brexit.
Hackers Release Personal Data On Hundreds Of German Politicians - The personal data of hundreds of German politicians including Chancellor Angela Merkel have been released in the largest data dump of its kind in the country, according to the Bloomberg. The leaked information includes personal chat transcripts, mobile phone numbers, email addresses and photo IDs, according to a review of the records. The records have been released over the past several weeks beginning right before Christmas via a Twitter account named "G0d," which has been around since mid-2017 and identifies as a Hamburg-based "artist" involved in "security researching" and "satire & irony." Notably, Germany's right-wing party, AfD, was unaffected by the hack. It looks like the hackers got the passwords to Facebook accounts and Twitter profiles and worked their way up from there, said Simon Hegelich, a political scientist at Munich’s Technical University who has studied the manipulation of social networks.“It’s a very elaborately done social engineering attack,” he said Friday by phone. “It’s a lot of data that’s been dumped.”The German government is taking the attack “very seriously,” spokeswoman Martina Fietz said a briefing with reporters on Friday. –Bloomberg "I can confirm that there has been an incident," said a Linke party spokesman, whose members were among those targeted. That said, no politically sensitive documents have been released as part of the breach, and some of the information appeared to be several years old.
Italy Passes Revised 2019 Budget, Marking End Of EU Spending Battle -- In what will likely come as a relief to anxious EU officials who have been hoping to avoid another calamitous confrontation with a restive member state, Italy's ruling populist coalition managed to ram through approval of its revised budget plan - including its laughably precise projected budget deficit of 2.04% (because only economists can come up with such an "accurate" number without laughing at themselves) - ahead of a deadline that would have forced the country to revert to its 2018 spending regimen. The move marks the end of a scuffle between the EU and Italy that could have led to billions of euros in fines levied against debt-burdened Italy and another selloff in Italian bonds. The final budget plan included some cutbacks to campaign promises made by the League and the Five Star Movement - the two partners in the populist coalition - including scrapping plans to lower the retirement aid and limiting a planned welfare expansion, according to Bloomberg.By passing the budget, investors in Italian bonds and stocks will likely drop their fears of an all-out collapse in the country's banking system, a feared result of the country's clash with the EU, which could come as a relief to Italian assets in the new year after the country's sovereign bonds posted their first yearly decline since 2011.The political opposition in Rome objected to the populists' decision to curtail debate on the budget plan, as MPs aligned with former prime minister Silvio Berlusconi's Forza Italia party were escorted from Parliament while members of the center-left Democratic Party are seeking a challenge in a constitutional court.
‘Yellow vest’ protesters try to storm Macron’s holiday hideaway - If Emmanuel Macron is hoping for some holiday respite from the anti-government protests which have rocked France, he might want to avoid the presidential retreat along the Mediterranean coast. Around 40 "yellow vest" demonstrators on Thursday tried to storm the medieval fort of Bregancon that serves as Macron's summer retreat before being turned back by police, the mayor of nearby Bormes-les-Mimosas, Francois Arizzi, told AFP on Friday. "It's madness. For people who want more democracy, they should start by respecting other people's property," Arizzi said, saying many of the protesters had tried to infiltrate the fort by crossing private land. He added that some of the protesters had indicated they would try again on Friday.
Macron ‘lost authority’ after caving to Yellow Jackets, says Oettinger The EU will accept a French budget deficit above the EU’s 3 percent ceiling in 2018 “as a one-time exception,” Budget Commissioner Günther Oettinger said in an interview published Thursday.Oettinger told the Funke media group of German newspapers that French President Emmanuel Macron had “lost authority with his budget for 2019” by upping his spending in response to the Yellow Jackets protests, “but he remains a strong supporter of the European Union.”Brussels reviewed the French budget several weeks ago and won’t be revisiting it, Oettinger added. “It crucial now that Macron continues his reform agenda, especially in the labor market, and that France remains on its growth track. Under this condition, we will tolerate a national debt higher than 3 percent as a one-time exception. However, it must not continue beyond 2019.”Oettinger also told the Funke media group that there’s still a chance Britain’s parliament will vote in favor of Prime Minister Theresa May’s Brexit deal in January and that “there is certainly no majority for a disorderly Brexit or for a new referendum.”If the U.K. leaves the bloc without a Brexit deal, it will become "a third country like Morocco or Azerbaijan," Oettinger said. He added that if Britain withholds its divorce payment in 2019, Germany would be left footing the bill "in the mid-three-digit range" of hundreds of millions of euros.The European commissioner added that the likelihood of Britain remaining in the EU had "somewhat increased " over the past few months, but “nevertheless, I assume there will be a withdrawal at the end of March.”
Yellow Vests Target French TV Station for Spreading ‘Fake News’ — Hundreds of Yellow Vest protesters gathered outside France’s BFM TV station for week seven of nationwide protests.The protesters chanted various versions of “Fake news journalists come down,” and “Macron out!” at the TV station which one protester told RT France spreads false information about the movement, while purposefully understating the size of its demonstrations. Saturday’s protesters were met with tear gas and a heavy police presence, which has become part and parcel to the violent demonstrations of weeks past. Police fired tear gas at “yellow vest” demonstrators in Paris on Saturday but the turnout for round seven of the popular protests that have rocked France appeared low. Several hundred people wearing the symbolic hi-visibility vests had gathered near the offices of France Televisions and the BFM TV channel in the centre of the capital shouting “Fake news” and calling for the resignation of President Emmanuel Macron. – France24 Protesters reportedly torched several cars next to the TV station, with the smoke visible against the Eiffel Tower. Separately, French police deployed tear gas in the city of Rouen in Normandy during a tense stand-off with demonstrators.
French police arrest “yellow vest” spokesman Eric Drouet - Wednesday night, as he went to Paris’s Concord Square to light candles to commemorate “yellow vest” protesters who have died during the movement, police arrested Eric Drouet. The pretext for this arrest, which tramples underfoot the constitutionally protected right to protest, was that this gathering had not been declared previously at the police prefecture. Drouet had called for a gathering on Concord Square in a Facebook video. Surrounded by sympathizers, Drouet was first trapped and then grabbed by the police and finally carted off amid cries of “Shame!”, “Dictatorship!” and “Bastards!” from the crowd. He was placed in preventive detention, while other protesters were arrested for identity checks. Drouet’s lawyer Khéops Lara denounced “a completely unjustified and arbitrary arrest,” which leaves Drouet facing up to six months in jail and a €7,500 fine. Lara explained: “His ‘crime’ was to place candles (…) on Concord Square in Paris to commemorate the fallen ‘yellow vests’ who died from various causes during protests and blockades of highway intersections. Then he wanted to come together with a few friends and loved ones in a private area, a restaurant, to discuss and share viewpoints.”
Yellow Vests’ and the Wages of Violence - Since the morning, black smoke has been rising in column from the burning debris on the Champs-Elysées. For the ‘Acte II’ of their mobilisation, on November 24, thousands of Gilets Jaunes protesters have once again converged on Paris’s most renowned avenue to press their demands. The most determined sections of the movement have set up barricades made of works barriers and street furniture, before setting them on fire. Far from being deterred by the blaze, some elderly Gilets Jaunes literally fuel the fire by casually adding a chunk of wood to the burning barricades as they pass beside them. Meanwhile, younger protesters pose in front of the flames for a selfie. Referring to the imposing structure in the background, partly veiled behind a thick smokescreen, one of them defiantly claims: “Now the Arc de Triomphe looks beautiful!” Since the inception of the movement on November 17, a violent interaction was set in motion between some components of the Gilets Jaunes and the police – despite mostly cordial relations on the ronds-points. Simultaneously asking for the cancellation of a proposed raise of the ‘carbon tax’, an increase of the purchasing power of low-income households and the resignation of President Macron, some participants of the movement decided to gather in Paris on November 17. The anti-institutional streak of the movement, which refused to be ‘recuperated’ by political parties and trade unions, led participants to regroup unofficially outside the usual routes for such demonstrations. The Champs-Elysées are not a traditional venue for protest rallies and are more associated with public performances showcasing the might and awe of the French state, as well as the achievements of its nation – this is where the yearly military parade on Bastille Day is taking place – but also where a jubilant crowd congregated last summer after the victory of the national football team at the FIFA World Cup. Besides, the avenue is located near the presidential palace and other seats of power, which the Gilets Jaunes aimed to reach so as to convey their message directly to the President. Unsurprisingly, state authorities were determined not to let that happen and, if the government avoided proscribing these unauthorised gatherings, a large number of police personnel was deployed in the area to contain the Gilets Jaunes. (part one).
Macron terms yellow vest leaders ‘hateful mob’ in combative New Year’s address - Emmanuel Macron last night delivered a combative New Year's address, vowing to push forward with economic reforms despite two-month long protests from what he termed a "hateful mob". The French President, whose televised address was broadcast form the Elysee Palace, acknowledged that "anger over injustices" lay behind the yellow vest movement that has scarred his second-year in office. He said: "Ultraliberal and financial capitalism, too often guided by short term interests, is heading towards its demise.” But the 41-year-old also strongly condemned protest-leaders. “Those who claim to speak for the people, but in fact speak for a hateful mob - attacking elected representatives, security forces, journalists, Jews, foreigners, homosexuals - are quite simply the negation of France,” he said. The President, who for the first time stood to give the address, promised that his economic reforms would continue despite prolonged clashes between protesters and security forces that turned French cities into battlegrounds. Looking defiant, Mr Macron rejected protesters’ demands for referendums on major policy decisions and for the possibility of ousting elected representatives, including the president himself. “The people is sovereign and it expresses itself at elections,” he said. “We are a state under the rule of law.” 2018 was an “annus horribilis’ for Mr Macron, whose approval ratings plunged from 40 to around 20 per cent, a record low for a president only 19 months into his term. Figureheads of the “yellow vests” movement, which has no unified leadership or structure, were quick to condemn Mr Macron for failing to heed the message from the streets and vowed to continue the protests. Jérémy Clément, a “yellow vest” from near Paris, said: “Mr President, you’ve tried to understand us but you’ve failed. We hope you’ll succeed in hearing us this year.” Laurence Sailliet, spokeswoman for the main conservative opposition party, The Republicans, said Mr Macron “showed that he remains diosconnected.... There was no mea culpa, no admission that he got it wrong.” Alexandra Schwarzbrod, an author and political analyst, argued that the President still lacked a common touch. “He did a creditable job in terms of his political communication, but he still appeared fairly distant from the everyday problems the ‘yellow vests’ have injected into the political agenda," she said.
Poland Wants France To Share Nukes And Voting Seat On The UNSC - According to the Polish Foreign Minister, Jacek Czaputowicz, a nuclear deterrent is the only way for European countries to demonstrate their sovereignty. Czaputowicz proposed that France share its nuclear weapons with the rest of the EU as well hand over to it its place on the UN Security Council. Poland and Ukraine cannot stop provoking laughter from international observers. After the lunatic idea circulating in Ukraine of resurrecting the country’s nuclear arsenal, it is now Poland's turn to send shockwaves around Europe. Polish foreign minister Czaputowicz proposed that France share its nuclear arsenal and hand over its seat on the United Nations Security Council (UNSC) to the European Union. It is is worth noting that this suggestion did not even receive an official comment from Paris, showing that there was little prospect of the Polish idea being taken seriously. Warsaw continues its opposition to the EU's domestic policies on migration and austerity, while in foreign policy, agrees with countries like Ukraine and the United States, particularly the neocon faction opposed to Russia. If there is a distinctive feature in the political proposals that come from Poland, it is an acute Russophobia. The idea of hosting a US base on Polish territory, and assuming its costs, is another Polish proposal. The Americans are serious considering taking them up on the offer. The Poles and the Ukrainians would be willing to sacrifice themselves on behalf of their allies for the privilege of being able to poke the Bear. Fortunately for them, Paris, London and Berlin have neither the military capabilities nor the suicidal intention to challenge Moscow with permanent military bases on its border. Neither do they wish to share their nuclear weapons with other EU countries, nor engage in any such hare-brained ideas that threaten humanity as the American Aegis Ashore system or the planned US withdrawal from the INF Treaty. The proposal that France grant its UNSC seat to the European Union is not such a far-fetched idea if we consider the political evolution of the last 70 years. Certainly the Security Council no longer represents the balance of power of the 1950s. The UNSC is exactly like a nuclear deterrent: once you have it, it becomes virtually impossible to voluntarily give it up. It reflects a guiding principle of the great powers, whereby no concession ought to be given to competitors, allies or enemies, especially concerning matters that are fundamental and strategically important in the short, medium and long term.
Port Tunnel closed off on both ends as protestors block entrance - Both ends of the Port Tunnel in Dublin were closed off after protestors in high vis stood on the road blocking the entrance. The protest was part of a demonstration which took place earlier in Dublin city today. Protestors were wearing high visibility yellow jackets similar to those worn by protestors in Paris, France over the last few weeks. The protest began today at Custom House Quay, and protesters moved on where they blocked the East-Link bridge for a brief amount of time. In a Facebook live video shared by a page called The Irish Citizens Army protestors could be seen walking through the Port Tunnel before they stood at the entrance holding Yellow Vest movement Ireland” banner, an Irish flag. According to the Journal.ie they also held a banner with details of ClimateChangeAgenda.com, a website with promotes chemtrail conspiracy theories. The Yellow Vest Ireland movement describes itself as a “protest against the disproportionate burden of the government’s tax and reforms that are failing the working and middle class citizens of Ireland”.
Tory and Labour MPs to force Brexit delay if May's deal is voted down - Senior Tory and Labour MPs are planning to force the government to delay Brexit by several months to avoid a no-deal outcome if Theresa May fails to get her deal through parliament in January, the Observer has been told. Cross-party talks have been under way for several weeks to ensure the 29 March date is put back – probably until July at the latest – if the government does not push for a delay itself. It is also understood that cabinet ministers have discussed the option of a delay with senior backbench MPs in both the main parties and that Downing Street is considering scenarios in which a delay might have to be requested from Brussels. One senior Tory backbencher said: “I have had these discussions with ministers. They will not say so in public but of course the option of a delay has to be looked at in detail now. If we are determined to avoid a no deal, and the prime minister’s deal fails, we will have to ask to stop the clock, and that will give time for us to decide to go whatever way we decide thereafter.” The Conservative MP and former attorney general Dominic Grieve said he believed that even if May got her deal through, there would probably be insufficient time to push all the necessary legislation through parliament to allow Brexit to happen smoothly and that a delay might well be necessary. But if her deal were voted down, the need to take up the option of a delay would become a “certainty”. He said: “I think that if she does not get her deal passed, a delay would be inevitable to give more time to avoid a no deal, and also there is the possibility that there would be a referendum, so this would allow for that.” Labour’s Brexit spokesman Keir Starmer said that parliament would need to discuss all options, including a possible delay, if and when May failed to get her blueprint through the Commons. “If the prime minister’s deal is voted down in early January, then we will be just nine weeks away from the date we are due to leave the EU,” Starmer said. “If the deal is rejected, parliament will need to have a very serious debate about how to protect the economy from a no-deal scenario and at this stage nothing should be ruled out.”
Brexit- a ship too far - Some of the media has been picking up on the situation in Ramsgate in the aftermath of last week's £107 million ferry contract award by the Department for Transport. Alerted by Conservative County Councillor Paul Messenger, rather than working it out for themselves, we have the likes of the BBC reporting on one of the beneficiaries of the Department's largesse. This is Seaborne Freight, which is taking £13.8 million to provide a ferry service from Ramsgate to Ostend from the end of March next year. What makes this exceptional is that, unlike the other two beneficiaries which are established ferry companies (Brittany Ferries and Danish shipping firm DFDS), Seaborne Freight is a newly established company incorporated only on 5 April 2017 with no track record whatsoever of providing ferry services, and with no ships to its name. With a total equity of £374,275, of its seven current directors, only two seem to have any active shipping links, running a company called Albany Shipping. This itself is only four years old and claims to be focusing on supporting the oil and gas industry in African and Middle Eastern countries. This, on the face of it, does not seem to be the best of backgrounds for providing a high intensity cross-Channel ferry service, in a business where P&O's Spirit of Britain, commissioned in 2011, cost £157 million to build. For its MV Pont-Aven, launched in 2004, Brittany Ferries paid £160 million. These are only a few of the oddities in what looks to be an extremely murky tale. The tale itself seems to start shortly after Seaborne came into existence with a report in the specialist press from October 2017 stating that the company was preparing to start up a new cross-Channel freight service from Ostend to Ramsgate, starting in March 2018 using three ships with six departures a day.
MPs plan to delay Brexit if May’s deal fails: report - Cross-party talks are under way in the U.K. to delay Brexit if the government fails to get its deal through parliament next month, The Observer reported Sunday.Preparations for a no-deal Brexit have intensified in Britain with civil servants and government officials working through the Christmas holiday to prepare contingency plans and thousands of military personnel will be on standby to cope with any fallout.Aiming to avoid such a scenario, MPs from both the ruling Conservatives and opposition Labour party are talking about putting back the March 29 Brexit date by several months if Prime Minister Theresa May's deal is defeated in the House of Commons, The Observer said.“I have had these discussions with ministers. They will not say so in public but of course the option of a delay has to be looked at in detail now,” said one unnamed senior Tory MP quoted by The Observer. “If we are determined to avoid a no deal, and the prime minister’s deal fails, we will have to ask to stop the clock.”Labour’s Brexit spokesperson Keir Starmer said: “If the deal is rejected, parliament will need to have a very serious debate about how to protect the economy for a no-deal scenario and at this stage nothing should be ruled out.” EU leaders have said the deal with May cannot be renegotiated. Britain’s International Trade Secretary Liam Fox told The Sunday Times that if parliament rejects the deal, he would not put the chances of Brexit going ahead on schedule at “much more than 50-50.”
UK needs to get its act together before Brexit vote, Juncker says - Jean-Claude Juncker has told the UK to “get its act together” in the run-up to the delayed House of Commons vote on Theresa May’s Brexit deal. The European commission president said the EU could not be expected to resolve the problems that continue to make it likely the British government will suffer a heavy defeat. “I find it entirely unreasonable for parts of the British public to believe that it is for the EU alone to propose a solution for all future British problems,” Juncker said in a wide-ranging interview with the German newspaper Welt am Sonntag. “My appeal is this. Get your act together and then tell us what it is you want. Our proposed solutions have been on the table for months.” May is set to put her deal, including the contentious Irish backstop, to MPs in the week beginning 14 January, following a week of debate in the Commons. The prime minister pulled a planned vote earlier this month when it became clear the government was likely to suffer a heavy defeat. She then promised to secure “legal and political” assurances that the backstop – which would keep the UK in a customs union with the EU to avoid a hard Irish border – would only be temporary, should it need to be triggered. The backstop would come into force at the end of the transition period, during which the UK effectively remains a member state but without a decision-making role, unless an alternative arrangement has been agreed. The EU’s 27 leaders, however, offered May little hope of any significant sweetener to the deal at a summit earlier this month. Juncker’s comments will be a fresh blow to Downing Street’s hopes of a game-changing last-minute concession.
May launches fresh diplomatic blitz on EU leaders as No10 admits she STILL hasn’t managed to get concessions to help sell her Brexit deal to MPs - Theresa May has launched a fresh diplomatic blitz on EU leaders - as No10 admitted she still has not managed to get concessions to help sell her Brexit deal to MPs. The PM has been ringing round counterparts as she tries to obtain 'legally binding' assurances that the UK will not be stuck in the Irish border backstop. The frantic New Year push comes with just over a fortnight to go until the Commons is due to hold a crunch vote on the package thrashed out with Brussels. The EU has flatly dismissed the idea of reopening the Withdrawal Agreement painstakingly put together over two years of negotiations. The bloc also insists there cannot be a time limit on the backstop - although both sides say it should be temporary and fall away once a wider trade pact is sealed. However, senior Cabinet ministers are understood to be convinced that they will get movement from the EU that could win round enough MPs. Under the backstop arrangements, the whole UK would stay in a customs union with the EU to avoid a hard border on the island of Ireland - while Northern Ireland would obey some single market rules. Brexiteers have condemned the proposals as they could restrict the UK's ability to do trade deals elsewhere. And the DUP, which is propping up Mrs May in power, has voiced fury that it would leave Northern Ireland operating under different rules to the rest of the UK. The PM's spokeswoman conceded today that there was as yet no breakthrough. 'She has been in touch with European counterparts over the break and you can expect more of that to continue this week,' the spokeswoman said.
Brexit: misdirection - A small piece of information has emerged from the Seaborne Freight controversy which has such massive implications that one begins to wonder whether the whole "ferrygate" affair is really misdirection, to steer us away from confronting the real predicament. The information comes via the Financial Times, a beguilingly simple claim that Ministers believe that under a no-deal Brexit, the Dover corridor (port and tunnel) could run at just 12-25 percent of normal capacity for up to six months. This, in itself, does not tell us very much, but once we look at some relevant figures on trade an alarming picture starts to emerge. We start with the latest estimates for trade (in goods) with continental Europe which passes through the corridor. In 2017, this was valued at approximately £220 billion (allowing for currency conversions) - the split roughly £120 billion to the port and £100 billion to the tunnel. And with total trade in goods with the EU recorded at £422.6 billion, this means the proportion of trade with Europe handled by the corridor worked out at about 52 percent by value. If we then take the Minister's worst case scenario for the corridor running at 12 percent capacity for six months, trade levels drop from the expected £110 billion in the period to a mere £13 billion, representing a loss of throughput of just short of £100 billion – roughly equivalent to twice the value of the six-monthly traffic through the Tunnel. This, then, is the crunch. The purpose of the £107 million ferry contract, of which Seaborne is part, is route substitution. But when we look at the figures, we see the scale of the problem. Ministers are faced with a need to provide capacity equivalent to twice the throughput of the Tunnel. Yet the entire (shipping) capacity bought by the contract is only about five percent of the corridor throughput
The United Kingdom is on life support - As 2018 unfolded and details of how Brexit might ultimately play out became clearer, political differences that have existed for years between the United Kingdom's four nations were dragged into the open. Bluntly, Brexit has shone a light on the fact that the foundations holding up the UK had been crumbling for some time.The current deadlock in Westminster -- and what it might mean for the union between England, Scotland, Wales and Northern Ireland -- is spooking politicians from all over the political divide.Jacob Rees-Mogg, a longstanding Conservative Euroskeptic, told me earlier this week: "The two greatest risks to the union are splitting Northern Ireland from Great Britain, as the Brexit Withdrawal Agreement with the EU proposes, and a second referendum, which would legitimize the calls for a second independence vote in Scotland." Over the five years of the coalition, austerity measures were introduced that made most politics junkies certain that Labour would win back power under its then leader, Ed Miliband.But a shock result in 2015 saw Cameron win a majority in Parliament. Scotland voted for the pro-independence Scottish Nationalist Party in huge numbers. After the failed Scottish independence referendum a year earlier, the general election result was a clear sign of just how wide the gap between England and Scotland had become. Fast forward past the Brexit referendum and Cameron's own exit to Theresa May's 2017 snap election for more clues. Many voters in pro-Brexit areas of England snubbed her in favor of Labour's Jeremy Corbyn -- who at the time had an unclear position on Brexit, though much of his party is pro-Europe. She lost her majority, but strangely picked up votes in Remain-supporting Scotland, despite her party backing the very definition of a so-called hard Brexit.
Brexit- Manufacturers stepped up stockpiling in December, survey reveals - Nervous UK manufacturers stockpiled goods and material in December ahead of Brexit, the latest survey of the sector showed. Input inventories subsequently rose at the fourth-fastest rate in the 27-year history of the Purchasing Managers’ Index (PMI).“Stocks of purchases and finished goods both rose at near survey-record rates, while stockpiling by customers at home and abroad took new orders growth to a 10-month high,” said Rob Dobson of IHS Markit, which compiles the PMI. The inventory buildup helped boost the headline activity index to a six-month high of 54.2, up from 53.6 in November. A figure above 50 represents growth from the previous month. But analysts warned the positive impact would probably be temporary. “Though the overall index figure was higher than last month, this should be viewed with some scepticism,” said Duncan Brock of the Chartered Institute of Procurement & Supply, which sponsors the PMI survey.“Whilst the road to Brexit remains mired in the mud of indecision and disagreement, there is likely to be some correction in the sector this year as Brexit buffer stocks are depleted and overall output could fall.”Confidence among manufacturers remained close to a 27-month low in the month, with many firms citing Brexit and the exchange rate as a concern over the next 12 months.
Brexit: Circling the Drain -- Yves Smith - If you follow the Brexit beat, you would have caught that Jean-Claude Juncker chewed the UK, meaning Theresa May, out over “not having its act together” late last week. Recall that at the December EU summit, Theresa May made yet another personal appeal to EU leaders, this time for legally binding assurances regarding the Irish border backstop. The problem is that what May wanted amounted to a renegotiation of terms, such as saying the backstop would only be temporary. For that to be valid, there would need to be a sunset date, which would create the possibility that the backstop would end before a new EU-UK deal was in place, leading to the hard border that the EU (and supposedly the UK) have deemed to be non-starters.EU leaders had said when they approved the draft Withdrawal Agreement in November that there would be no more negotiations. Donald Tusk reaffirmed that on December 10:I have decided to call #EUCO on #Brexit (Art. 50) on Thursday. We will not renegotiate the deal, including the backstop, but we are ready to discuss how to facilitate UK ratification. As time is running out, we will also discuss our preparedness for a no-deal scenario.— Donald Tusk (@eucopresident) December 10, 2018 Yet when Theresa May came to the EU summit in December, she succeeded at the only thing she seems good at, which is alienating EU leaders. The EU had made clear it was willing to give not-legally-binding side statements that it was willing to spin in the manner that would be most helpful to Theresa May, such as saying they wanted the backstop only to be temporary and were as eager as the UK to conclude a trade agreement (which would put an end to the backstop). But to the frustration of EU state heads, May didn’t ask for what was on offer, nor did she make a clear request for anything else. What May appeared to have communicated was that the UK was still not engaging with the reality that Brexit was looming. Their response was to send the Withdrawal Agreement out for approval by national parliaments (yet more confirmation, as if it were needed, that negotiations were over) and stepping up their Brexit planning. That is a long-winded way of demonstrating that Juncker’s remark was simply a blunt summary of the state of play, as well as a reminder that May was still not taking the EU up on its willingness to try to improve the optics. Instead, has kept asking for what she should understand that she won’t get, as one can infer from the Sun’s account over the weekend:
Post-Brexit Britain an ‘invisible chain’ between world democracies - Britain's foreign secretary says he has cut short his Christmas break to travel to Asia, to demonstrate the UK's commitment to increase its engagement with the region after Brexit. Britain was one of just a few European countries with a diplomatic footprint in every ASEAN country, and later this year, it would establish a British mission to ASEAN based in Jakarta, Hunt said in a speech to the International Institute for Strategic Studies think tank in Singapore. “In a world where it is rarely possible for one country to achieve its ambitions alone, we have some of the best connections of any country – whether through the Commonwealth, our alliance with the United States and our friendship with our neighbours in Europe," Hunt said in a speech about Britain's role in the world after Brexit. “Those connections are why Britain’s post-Brexit role should be to act as an invisible chain linking together the democracies of the world, those countries which share our values and support our belief in free trade, the rule of law and open societies.” Hunt is in Singapore and will head later in the week to Malaysia.
Universities raise alarm over no-deal Brexit and EU student enrolment - University leaders have said that a no-deal Brexit would constitute “one of the biggest threats” ever faced by the sector, as figures revealed a further decline in EU student enrolment, particularly in postgraduate research. According to the Russell Group of universities, there was a 9% decrease in the number of EU postgraduate research students enrolling at its institutions this academic year. The fall follows a 9% decline the previous year, and has potential consequences for Britain’s research capacity. Dr Hollie Chandler, a senior policy analyst at the 24-strong group of leading universities, described the decline as “troubling” and said that were the UK to leave the EU without a deal, it would only increase uncertainty among prospective students from the rest of Europe. Overall, the number of EU students who enrolled for the 2018-19 academic year at Russell Group universities fell by 3%. Last year, there was a 1% increase in overall EU student numbers, after years of healthy growth in recruitment. Although enrolment of EU27 citizens at undergraduate level grew by 1% this year, at taught postgraduate level it fell by 5%. The figures come as an open letter from leaders of 150 universities to MPs said the impact of a no-deal Brexit could lead to “an academic, cultural and scientific setback from which it would take decades to recover”. “University leaders are united in the view that the UK leaving the EU without a deal is one of the biggest threats our universities have ever faced,” the letter says. “As a sector which contributes over £21bn to UK GDP every year and supports 944,000 jobs, it is critical to the national interest, to the economy, communities and wider society, that the UK’s universities thrive post-Brexit. “To do so, our government must demonstrate the required ambition, put the right measures and guarantees in place, and, crucially, avoid the UK crashing out of the EU without a deal on 29 March.”
Ministers plan for a ‘practice traffic jam’ to prepare for no deal Brexit: Up to 150 lorries will be sent from Manston Airport to Dover during Monday’s rush hour in last minute test - Up to 150 lorries will be sent from Manston Airport to Dover during rush hour on Monday in a test to see if Britain is ready for a no deal Brexit. The exercise will test the idea of using Manston as a huge lorry park if a no deal causes congestion at Dover because of delays sending goods to Calais. In a letter to hauliers DfT and Kent County Council officials revealed they would run tests during the morning rush hour at 8am, and again at 11am, to 'establish the safest optimum release rate of HGVs' from the airfield to Dover along the A256.It said it would pay for 100-150 hauliers from the local area to take part in the test of Operation Brock. Up to 6,000 lorries could be parked on the site under the plan. Congestion at the Channel ports caused by the reintroduction of customs checks on goods has been one of the most commonly cited negative impacts of a no-deal withdrawal from the EU at the end of March. In the event of congestion, lorries will first be parked on the M20 under Operation Stack in a similar way to when bad weather or strikes close the Dover-Calais route. Once that is full as far as Ashford, trucks would be sent to Manston.
Brexit Does Not Matter - Simon Johnson - It is hard to overstate British influence over global affairs after it became the cradle of the Industrial Revolution. From about 1750, British inventions created a wave of technological innovation that transformed how power was generated and how metal was worked. Railways and steam ships revolutionized transportation. In 1945, the British Empire contained more than 600 million people, about one-quarter of everyone alive, making it (briefly) the most populous political entity ever on the planet. In subsequent decades, the UK’s global impact was felt mostly through a combination of decolonization debacles, including the spectacular humiliation suffered during the Suez Crisis of 1956, and gross macroeconomic mismanagement. In 1976, Britain became the only country issuing an international reserve currency that has been forced to borrow from the International Monetary Fund during the (post-1973) era of floating exchange rates. Nothing about this loss of global influence can be attributed to Britain’s membership of the EU. Overall, Britain has done well from post-war trade, about half of which is currently with Europe. The UK’s total trade (exports plus imports) was around 40% of GDP during the 1950s; it currently runs closer to 60%, with most of that increase occurring after the country joined the European Economic Community in 1973. More broadly, active participation in the global economy over the past four decades has helped close the gap (in terms of GDP per capita) with the United States. Perhaps there is a mad version of Brexit that could have ramifications beyond British shores, but that seems far-fetched. Unlike Trump, no responsible politician in the UK really wants to restore protectionist tariffs to the level of the 1930s. Also unlike the US, no prominent official in Britain is keen to gamble again with the country’s future by weakening financial regulation. A chaotic Brexit could do great damage to ordinary people – as was the case with Britain’s self-ejection from the Exchange Rate Mechanism of the European Monetary System in 1992.1 But those ordinary people will be overwhelmingly British. The days when Britain could move the world are long gone.
U.K. Reportedly Seeks Military Bases in Caribbean and Asia- The U.K. is working on plans to build two new military bases in the Caribbean and southeast Asia, the Sunday Telegraph reported, citing an interview with Defence Secretary Gavin Williamson. The plans are part of an effort to make the U.K. “a true global player” by increasing the country’s role on the international stage after it leaves the European Union, Williamson was quoted as saying. It also marks a shift from the so-called 1968 East of Suez strategy in which the U.K. withdrew from military bases in southeast Asia and the Persian Gulf, the minister told the paper. “We have got to make it clear that that is a policy that has been ripped up and Britain is once again a global nation,” Williamson said. The U.K. already has bases in Cyprus, Gibraltar, the Falkland Islands and Diego Garcia, the newspaper reported. Williamson predicted that the “political focus will shift quite dramatically” after Brexit and the U.K. has to build “deeper relationships with Australia, Canada, New Zealand, Caribbean countries, but also nations right across Africa.” The defense secretary also said in the interview that the U.K. government’s no-deal Brexit contingency plan -- which involves placing 3,500 troops on standby in the event of a chaotic exit from the EU in March -- was “good sensible planning.” “We were always planning to carry a contingency there, just to make sure things run smoothly with or without a deal,” he said. A spokesman for the U.K. Ministry of Defence said he did not dispute the secretary’s comments quoted in the Telegraph’s report.
Slow progress on EU army as states protect sovereignty, national industry - When it comes to military spending, European Union leaders talk Europe but think nationally. More than a year since its inception, the grand plan to coordinate and integrate national armies has made very little progress. The Permanent Structured Cooperation, or PESCO, was agreed last year to eventually enable the EU to manage its own defense with integrated forces and weapons systems, but military experts say the bloc is still far from achieving that goal. The German Council on Foreign Relations (DGAP) and the International Institute for Strategic Studies (IISS) recently reported that the EU at best has only a third of the resources needed for its ambitions to intervene in armed conflicts in Europe or neighboring regions, provide humanitarian aid in catastrophes, help in rebuilding programs, and to free hostages and evacuate civilians. The EU does not have enough ships, planes, aircraft carriers or even reconnaissance equipment to accomplish these goals, especially after the UK leaves the EU. “The dream of becoming independent from the US can be realized, at best, only over a very long timeframe, maybe 20 years,” said DGAP expert Christian Mölling. “And then only if one is willing to spend a lot of money.”
German army plans recruitment of EU foreigners - The German Ministry of Defence plans to recruit tens of thousands of foreigners from the EU into the Bundeswehr. The plans for this are “more concrete than have been known so far,” Der Spiegel reported last week on Thursday. According to a confidential ministry study submitted to the news magazine, Defence Minister Ursula von der Leyen (CDU) wants to recruit mainly young Poles, Italians and Romanians for the German army. According to the paper, there is “quantitative potential” for the Bundeswehr among young men coming from these countries. According to Der Spiegel, the ministry has already “calculated this potential more precisely.” According to the study, about 255,000 Poles, 185,000 Italians and 155,000 Romanians between the ages of 18 and 40 live in Germany. Together, this group represents about half of all EU foreigners in Germany. If at least 10 percent of this targeted population showed interest in the German army, the Bundeswehr would come up with “more than 50,000 possible new applicants for the force.”The inspector general of the Bundeswehr, the highest ranking German military figure, also confirmed the plans. The recruitment of EU citizens for special activities is “an option” that is being examined, Eberhard Zorn told the newspapers of the Funke Media Group. People talk about “doctors or IT specialists, for example,” he said. In times of a shortage of skilled workers, the Bundeswehr had to “look in all directions and strive to find the right young talent.” The plans of the Ministry of Defence and the official debate about them show how aggressively German imperialism and militarism are re-emerging despite Germany’s historical crimes in two world wars. Having caused a social catastrophe in Southern and Eastern Europe in particular with its austerity measures, Berlin is now using the lack of prospects and sheer desperation of young people to recruit cannon fodder for the German war policy. Since leading government representatives officially announced the return of German militarism at the Munich Security Conference in 2014, the government and the Ministry of Defence have been working to increase the Bundeswehr’s troop strength, however, with rather moderate success so far. Since Defence Minister Ursula von der Leyen (Christian Democratic Union, CDU) announced the expansion of the army on May 10, 2016, the Bundeswehr has hardly been able to record any significant growth despite aggressive advertising campaigns. In November, the Bundeswehr officially comprised 180,997 active soldiers, just under 1,000 more than in 2015 (179,633).
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