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

Saturday, July 13, 2019

week ending Jul 13

Jerome Powell Flags Rate Cut as Global Chill Outweighs Good U.S. News - The Federal Reserve is preparing to cut interest rates for the first time in a decade because it sees a cooling global economy and no sign of overheating in the jobs market at home. Since the Fed opened the door to lower borrowing costs last month, plenty more data has arrived to back up the view that “manufacturing, trade and investment are weak all around the world,” Chairman Jerome Powell told Congress at a hearing on Wednesday.He said June’s jobs report, which showed stronger-than-expected hiring in the U.S., was “great news” -- but not enough to tilt the balance, because wages aren’t rising fast enough to trigger much inflation. In fact, Powell made it clear that inflation is still too low. Markets saw his comments as confirmation that rates are headed lower at the Fed’s next meeting on July 30-31. Traders stepped up bets that the reduction will be by half a percentage point, though the consensus still foresees a quarter-point cut. Powell didn’t respond directly when asked about the possibility of a 50 basis-point cut.Treasuries climbed with gold after he spoke, while U.S. stocks advancedtoward all-time highs. Fed officials had mounting risks firmly in view when they met three weeks ago, according to minutes of their June 18-19 gathering published later on Wednesday that showed many saw additional policy easing warranted in the “near term.”Powell’s semi-annual testimony to lawmakers at a House Financial Services Committee in Washington lasted about three hours, and the Fed chief is due back on Thursday when he’ll appear before the Senate Banking Committee. Lawmakers kept asking about Facebook Inc.’s proposed digital currency, and Powell said it raises “serious concerns” and will need intense scrutiny. He also fielded questions about the threat to his job from President Donald Trump. Trump has attacked the Fed for keeping rates too high, breaking with the recent convention of presidents not intervening in monetary policy. He has also explored ways he could replace Powell.With several lawmakers voicing support for Fed independence, Powell was asked how he’d respond if Trump tried to fire him. “My answer would be no,” Powell said. “The law clearly gives me a four year term and I intend to serve it."

Fed's Powell bolsters rate cut view on trade, global growth concerns - (Reuters) - Federal Reserve Chairman Jerome Powell on Wednesday set the stage for the first U.S. interest rate cut in a decade later this month, pledging to ‘act as appropriate’ to defend an economic expansion threatened by trade disputes and a global slowdown. In testimony to a congressional committee, Powell pointed to “broad” global weakness that was clouding the U.S. economic outlook amid uncertainty about the fallout from the Trump administration’s trade conflict with China and other nations. Though the U.S. government reported strong job growth for June, other major economies’ “data have continued to disappoint. That is very broad across Europe and around Asia, and that continues to weigh,” the head of the U.S. central bank said. “Manufacturing, trade and investment are weak all around the world ... We have agreed to begin (trade) discussions again with China, and that is a constructive step. It doesn’t remove the uncertainty.” To the suggestion that the current low U.S. unemployment rate could lead to a breakout of inflation, Powell noted that the overall pace of price increases remains “muted” and wage gains remain modest, signs the Fed could reduce rates without risk of an overheating economy. “We don’t have any evidence for calling this a hot labour market,” Powell told the U.S. House of Representatives Financial Services Committee. “To call something hot we need to see some heat.” The hearing, part of the Fed chief’s semi-annual testimony on monetary policy to Congress, took place against the backdrop of U.S. President Donald Trump’s frequent criticism of the Fed and the White House’s demands that the central bank lower rates. .

FOMC Minutes: "the case for somewhat more accommodative policy had strengthened" - From the Fed: Minutes of the Federal Open Market Committee, June 18-19, 2019. A few excerpts: In their discussion of monetary policy decisions at this meeting, participants judged that the risks and uncertainties surrounding their outlooks, particularly those related to the global economic outlook, had intensified in recent weeks. Moreover, inflation continued to run below the Committee's 2 percent objective; similarly, inflation for items other than food and energy had remained below 2 percent as well.  The increase in risks and uncertainties surrounding the outlook was quite recent and nearly all participants agreed that it would be appropriate to maintain the current target range for the federal funds rate at 2-1/4 to 2-1/2 percent at this meeting. However, they noted that it would be important to monitor the implications of incoming information and global economic developments for the U.S. economic outlook. A couple of participants favored a cut in the target range at this meeting, judging that a prolonged period with inflation running below 2 percent warranted a more accommodative policy response to firmly center inflation and inflation expectations around the Committee's symmetric 2 percent objective. With regard to the outlook for monetary policy beyond this meeting, nearly all participants had revised down their assessment of the appropriate path for the federal funds rate over the projection period in their SEP submissions, and some had marked down their estimates of the longer-run normal level of the funds rate as well. Many participants indicated that the case for somewhat more accommodative policy had strengthened. Participants widely noted that the global developments that led to the heightened uncertainties about the economic outlook were quite recent. Many judged additional monetary policy accommodation would be warranted in the near term should these recent developments prove to be sustained and continue to weigh on the economic outlook. Several others noted that additional monetary policy accommodation could well be appropriate if incoming information showed further deterioration in the outlook. Several participants noted that a near-term cut in the target range for the federal funds rate could help cushion the effects of possible future adverse shocks to the economy and, hence, was appropriate policy from a risk-management perspective. Some participants also noted that the continued shortfall in inflation risked a softening of inflation expectations that could slow the sustained return of inflation to the Committee's 2 percent objective. Several participants pointed out that they had revised down their estimates of the longer-run normal rate of unemployment and, as a result, saw a smaller upward contribution to inflation pressures from tight resource utilization than they had earlier. A few participants were concerned that inflation expectations had already moved below levels consistent with the Committee's symmetric 2 percent objective and that it was important to provide additional accommodation in the near term to bolster inflation expectations.

Forget Rates, The Fed Is Still Quantitative-Tightening At A Record Pace – Wolf Richter - In June, the Fed shed Treasury securities at the slower pace announced in its new plan for QT, but it dumped Mortgage Backed Securities (MBS) at the fastest rate since the QE unwind started, breaching its “up to” cap for the first time. And it is experimenting with the opposite of its QE-era “Operation Twist” – Operation Untwist? Total assets at the Fed fell by $34 billion in June, as of the balance sheet for the week ended July 3, released Friday afternoon. This includes $15 billion in Treasury securities and a record $23 billion in MBS, for a total of $38 billion, less some other balance-sheet activities unrelated to the QE unwind. This trimmed its total assets to $3.813 trillion, the lowest since September 2013. Since the beginning of the “balance sheet normalization” era, the Fed has shed $648 billion. Since peak-QE in January 2015, it has shed $687 billion:The Fed doesn’t sell its Treasury holdings outright. But when securities mature, the US Treasury Department pays them off, and the Fed then doesn’t reinvest this money in new securities. Instead, it destroys this money in the reverse manner in which it created it during QE. But the Fed has announced caps — the “up to” amounts. If the amount of Treasuries that mature in a given month exceed the cap, the Fed reinvests the overage in new Treasuries. Under the Fed’s new regime, the maximum amount of Treasury securities allowed to roll off when they mature was $15 billion in June. And that’s what happened.In June, three issues matured, for a total of about $21 billion. The Treasury Department redeemed them and paid the Fed for them. The Fed reinvested $6 billion of this money into new Treasury securities but allowed $15 billion to roll off without replacement. So the balance of Treasuries dropped by $15 billion, to $2.095 trillion, the lowest since September 2013: Over the past couple of months, the Fed began replacing longer-term Treasury notes with short-term Treasury bills. It’s the reverse of “Operation Twist,” which had been part of QE, layered between QE-2 and QE-3. During Operation Twist, it had replaced its short-term T-Bills with longer-term T-Notes and T-Bonds in order to force down the recalcitrantly high long-term yields.Now it is starting to do the opposite, albeit in only small amounts. Short-term bills cropped up for the first time on its May-dated weekly balance sheets. In the current balance sheet, it lists $5 million, with the first batch maturing on July 9, the second batch in August. The Fed seems to be testing what it said would be implemented after September: Replacing long maturities with short-term bills to bring down the average maturity of its portfolio. If Operation Twist worked to bring down long-term yields during QE – doubts remain – then “Operation Untwist” should do the opposite and put upward pressure on long-term yields.

Why a Fed rate cut makes sense -  Jared Bernstein and Mark Zandi - This is a post about one-quarter of one percent. That’s the amount by which the Federal Reserve is expected to reduce the federal funds rate, the key interest rate they control, when they meet at the end of this month. If that sounds like too small a change to get worked up about, we assure you, Fed rate changes can be a big deal, especially when they change direction. The central bank had been steadily raising rates over the past several years, and only just a few months ago was predicting further rate increases this year and next. The decision to cut rates has become a bit more complicated, as last week’s solid jobs report weakened the case for the cut. Why add interest-rate stimulus to an economy that’s already going strong?   First, for all the July fireworks around last week’s strong job gains (224,000 jobs created, compared to 72,000 the month before), the job market is slowing. The monthly data are noisy, so to get at the underlying trend, you’ve got to average out the noise. Over the first half of this year, employers have added about 170,000 jobs per month. That’s a healthy clip, no doubt, but last year the monthly gain was 235,000.  This slowdown could intensify, courtesy of President Trump’s trade war.  Moody’s Analytics measure of global business confidence is as weak as it has been since the economy began to recover from the financial crisis a decade ago. Similarly, businesses’ expectations as to how well they think they’ll be doing later this year have slid to where they were just prior to the financial crisis. Two-thirds of respondents to Duke University’s quarterly survey of company CFOs say a recession is likely by the end of 2020; Morgan Stanley’s business conditions index, designed to capture turning points in the economy, suffered its largest one-month decline on record in May.  If these sentiments and weak investment behavior persist, eventually businesses will cut back on their hiring. If so, and unemployment rises, even a little bit, and even from very low levels, recession becomes a real possibility. That’s because those consumers powering the economy will quickly sense the weakening job market and turn more cautious in their spending. Businesses will see this and pull-back further on jobs. The virtuous economic cycle that characterizes the economy today, will turn into a vicious one. A one-quarter percent Fed rate cut at their late July meeting can help forestall this possibility. A small cut is a way by which monetary policy takes out an insurance policy against the impact of the trade war, or any of a litany of other threats from Brexit to another government shutdown.

Merrill: "Data cools call for July cuts" - A few excerpts from a Merrill Lynch research note: The June employment report was strong with job growth of 224K ... leaving us comfortable with our view that the Fed will not cut in July and wait until September to deliver the first rate reduction. … last week's data were extremely important in dictating Fed action. So what did we learn? No fireworks from the G20 meeting, the ISM manufacturing index held in expansion territory at 51.7 and job creation was robust. The combination does not point to an immediate cut. At a minimum, this takes a 50bp cut off the table but should also prompt the Fed to argue for waiting for more data. This puts the spotlight on Fed Chair Powell at the Semi-Annual Monetary Policy testimony on Wednesday. … We would argue that since the June meeting, the evidence suggests more positive news ... Indeed, even on the inflation front, the data have been better with an upward revision to 1Q core PCE inflation to 1.2% q/q saar from 1.0%, and the University of Michigan long-run inflation expectations revised up to 2.3% from 2.2%. … Powell ... can make the case that the data have been better than expected [and] note that the Fed remains vigilant and stands ready to act to prevent below-trend growth.

Fed Chair Powell: "Semiannual Monetary Policy Report to the Congress" - From Fed Chair Powell: Semiannual Monetary Policy Report to the CongressOur baseline outlook is for economic growth to remain solid, labor markets to stay strong, and inflation to move back up over time to the Committee's 2 percent objective. However, uncertainties about the outlook have increased in recent months. In particular, economic momentum appears to have slowed in some major foreign economies, and that weakness could affect the U.S. economy. Moreover, a number of government policy issues have yet to be resolved, including trade developments, the federal debt ceiling, and Brexit. And there is a risk that weak inflation will be even more persistent than we currently anticipate. We are carefully monitoring these developments, and we will continue to assess their implications for the U.S economic outlook and inflation.

Merrill: "The Fed cut is on for July" - A few excerpts from a Merrill Lynch research note: The Fed cut is on for July: Fed Chair Powell delivered a dovish testimony, hinting strongly at an upcoming cut. We now expect a 25bp cut at the July 31st meeting followed by two more cuts at the next two meetings. We are sticking with our forecast of a cumulative 75bp of easing … The Fed seems to be willing to dismiss the better data from the US and instead is focusing on the weaker global data. Indeed, when Powell was asked if the strong jobs report changed his views on cuts, he stated "no". Rather Powell emphasized that "it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook. Inflation pressures remain muted."

Morgan Stanley Calls For 50bps Of Rate Cuts In Three Weeks - Now that Powell telegraphed a rate cut at the July 30/31 FOMC meeting is virtually certain, the question is whether the Fed will cut once or twice. And while many still believe that the Fed's "insurance" cut will be just 25bps, or 1 rate cut, as Bloomberg's Elena Shulyatyeba writes, "we do not see support for a 50-bp cut given limited interest-rate ammunition compared with previous economic cycles", noting that the current level of the fed funds rate gives policy makers the capacity for 9 rate cuts compared to 20 at the start of the last recession and 25 ahead of the 2001 downturn, others disagree. Case in point, Morgan Stanley's Chief Economist Chetan Ahya, who is bucking the trend and writes this morning that "a  strong policy response is necessary to guard against risks of a further, sharper loss of economic momentum." Specifically, the "weak incoming data" - which is an odd statement for an economy which just added so many jobs it surpassed even the most optimistic forecast - "lingering trade tensions, and preventing both financial conditions from tightening and a non-linear adverse impact on growth are key reasons for a front-loaded adjustment."Echoing what Powell lamented in his prepared remarks, MS writes that "corporate confidence and the capex cycle have remained weak", even if that means that the stock buyback cycle has never been stronger. Furthermore, "uncertainty over trade tensions – the key overhang on the macro outlook – lingers. Against this backdrop and in the context of preventing the downside risks and attendant non-linear impact from materializing" Morgan Stanley argues that a strong policy response is necessary to arrest the recent sharp decline in economic momentum. To justify its uber dovish outlook, Morgan Stanley lays out the following four arguments why a strong policy response is needed:

  • 1. The global economy has lost significant momentum in the past 9 months
  • 2. Lingering trade tensions remain an overhang on corporate confidence
  • 3. Inflation expectations are slipping again
  • 4. Protecting against the risk of a non-linear tightening in financial conditions

Fed rate cut would ease pressure on China’s central bank, analysts say - A widely expected interest rate cut by the U.S. Federal Reserve would give China more breathing room in shoring up its slowing economy, some analysts said. Overnight, markets took Fed Chairman Jerome Powell’s comments during the first of a two-day Congressional testimony as affirming expectations for easier monetary policy in the U.S. The S&P 500 briefly topped 3,000 for the first time, and Treasury yields edged lower. A looser monetary policy environment would reduce pressure on China’s central bank to ease monetary policy. Amid trade tensions with the U.S., China’s economy has struggled to gain momentum. Private surveys released last week by Caixin showed services activity fell in June to its lowest since February, and the manufacturing sector contracted, after three months of expansion. Among several measures to support the economy over the last several months, the People’s Bank of China (PBoC) has made targeted attempts to lower financing costs to privately run enterprises, which account for the majority of the country’s economic growth and employment. “If the Fed does go ahead and cut rates, which I don’t think is a given ... it simply means the PBoC has a little breathing room to see if the policies it has implemented have an impact on the real economy,” Hannah Anderson, global market strategist at J.P. Morgan Asset Management, told CNBC on Thursday by phone. The central bank will also face less pressure to allow the yuan to depreciate, making it easier to maintain a goal of keeping the exchange rate stable, she said, while higher Treasury prices would boost the paper value of the PBoC’s holdings, increasing confidence. The U.S. dollar index fell about 0.4% overnight amid Powell’s comments. The People’s Bank of China set the mid-point of the yuan mildly stronger against the greenback on Thursday at 6.8677.

Ocasio-Cortez finds herself on same side as Trump regarding the Federal Reserve - National Economic Council Director Larry Kudlow praised Democratic Rep. Alexandria Ocasio-Cortez on Thursday after the left-wing lawmaker urged Federal Reserve Chair Jerome Powell to keep monetary policy loose because inflation was not an issue, something that President Donald Trump and his administration have been pushing for. “I know I’m a supply side conservative and so forth, but I want to note in the hearings yesterday with Fed Chairman Jay Powell, it was Ms. AOC who asked him about the Phillips curve,” Kudlow told Fox News on Thursday. “Why is rising growth and low unemployment bad? Why does that cause higher inflation and interest rates? Powell said ‘well, you’re right. That thing hasn’t worked in decades.’” “I’ve got to give her high marks for that. She got that out of the chairman. By the way, that’s been my position. That’s been the president’s position. Strong growth does not cause higher inflation,” Kudlow said, adding he would like to discuss “supply-side economics” with Ocasio-Cortez in the future. Powell testified in front of the House Financial Services Committee on Wednesday. During the Q&A portion of the testimony, Ocasio-Cortez said economists “are increasingly worried” that the Phillips curve is “no longer describing what is happening in today’s economy.” She then asked Powell if the Fed was considering this deteriorating relationship between inflation and unemployment. Powell responded in the affirmative, noting: “We have learned that the economy can sustain much lower unemployment than we thought without troubling levels of inflation.” Ocasio-Cortez’s questioning showcased a rare moment of agreement between the lawmaker and the Trump administration. Since last year, Trump has urged the Fed to keep rates lower, noting that tighter monetary policy would hinder economic growth as well as corporate profits. While Ocasio-Cortez’s questioning of Powell suggests she also believes the Fed shouldn’t tighten monetary policy right now, she also had another motive. Some economic policies of the politically left are often shot down by Republicans on fears they would cause inflation. “Do you think that could have implications in terms of policy making? That there is perhaps room for increased tolerance of policies that have historically been thought to drive inflation?” Ocasio-Cortez asked Powell. “One of the arguments about minimum wage or other policies that directly target middle-class Americans is that they could drive inflation.” Powell responded by saying the Fed has learned “that downward pressure on inflation around the globe and in here is stronger than we thought.

The Case for People's Quantitative Easing -- Frances Coppola --Last night, the Resolution Foundation hosted a debate to launch my book, "The Case for People's Quantitative Easing".  . You can watch the debate here. In 2008, QE did a great job of supporting asset prices and preventing the disastrous deflationary spiral of the 1930s. But since then, enormous quantities of asset purchases by central banks around the world have proved unable to raise aggregate demand and kickstart growth.Although central banks didn't do a bad job in the last recession, many of the tools they used won't work in the next one, not least because the legacy of the tools themselves has not yet dissipated. Interest rates are on the floor, central bank balance sheets are enormous, and the private sector is still weighed down with debt. When the next recession hits, central banks will need more radical tools to support aggregate demand. "Helicopter money" - distributing money to ordinary people - would provide a more effective short-term aggregate demand stimulus than QE, without its unfortunate distributional consequences. And governments can, by taking advantage of central banks' ability to support asset prices, invest in their economies to restore growth and rebalance the economy over the longer term. But to make it work, governments and central banks need to cooperate. No monetary stimulus can be effective if the government is determinedly extracting money from the private sector as fast as the central bank is pouring it in. This raises questions about the relative responsibilities of central bank and Treasury, the limits of monetary policy, and the democratic and institutional framework within which aggregate demand management must work. When fiscal and monetary policy are blurred, can there really be effective separation of central bank and Treasury?

Judy Shelton and her sponsor—President Trump—want to tie the hands of the Fed - by Jared Bernstein - -- When someone seeking confirmation to high office has a paper trail fraught with positions antithetical to their confirmation, their theme song quickly becomes Shaggy’s It Wasn’t Me, as they flip and flop to disavow their earlier convictions. The most recent purveyor of this strategy is Judy Shelton, one of President Trump’s most recent likely nominees for the Federal Reserve. Ms. Shelton, who worked on Trump’s campaign and transition team, currently holds a Senate-confirmed position as the U.S. representative to the European Bank for Reconstruction and Development. After reviewing her writings and comparing them with what she’s saying in her current campaign to get the Fed job, I’m convinced that her appointment would be extremely problematic for at least two reasons. One, she would try to undermine the flexibility that’s so important to today’s monetary policy, and two, she’d give the president a voice inside of the Fed, compromising the essential independence of the central bank.This judgement stems in part from the extent to which Ms. Shelton is trying to remake herself into an easy-money dove in the president’s image, or at least his image since he’s taken office. Before that, both Trump and Shelton lambasted the Fed for helping Obama by holding interest rates down (in fact, the Fed was fighting the recession and initially weak recovery). Now, of course, he wants them to cut rates to help him. And contrary to everything she’s stood for in the past, Ms. Shelton agrees with him.To understand the real Ms. Shelton, as opposed to her current incarnation, you need to understand why Larry Kudlow, one of Trump’s top economic advisors, called her “a leading hard money conservative.” “Hard money,” in this context, refers to wresting control of economic policy away from institutions like the Fed and linking the value of money to a fixed base, most typically gold. And, in fact, Ms. Shelton has not only called for the U.S. to go back on the gold standard, but for the world to do so.

Trump Asked Fed Board Nominees For Their Views On The Dollar -  President Trump has renewed his attacks on the greenback lately by ratcheting up pressure on the Fed to deliver a steep rate cut this month (which, in Trump's mind, would help Powell stay one step ahead of the uber-dove Mario Draghi and his probable successor, Christine Lagarde), and accusing Europe and China of manipulating their currencies to disadvantage the US.And according to the most recent report from Bloomberg, Trump has tasked his aides with figuring out exactly what can be done to safely weaken the greenback, and he has also asked both Judy Shelton and Christopher Waller, his two latest nominees to fill the empty Fed board seats, about their views on the dollar.So far, Trump's attacks on the dollar have been mostly bluster. But as Bank of America pointed out in a conspicuously prescient research note published last month, jawboning is one of Trump's most reliable tools for knocking down the dollar. BofA affirmed that the dollar is trading 13% above its long-term average, a sign that Trump is correct to call it overvalued. BofA warned that the administration might soon take direct action to weaken the dollar, either through jawboning, or perhaps even direct intervention via the New York Fed's markets desk. Pressing the Fed to ease - although the odds of a rate cut have fallen since Friday's surprisingly robust jobs report - is another option outlined by BofA. A weaker dollar would, in theory, help bolster US exports and act as a shot in the arm for the economy as Trump prepares to battle it out for a second term. Of course, when moving to weaken the dollar, the Trump administration must tread carefully or risk igniting an all-out currency more among its G-20 allies. In a communique, the group agreed to avoid targeting exchange rates for the purposes of competitive devaluation. Though there is some wiggle room: temporary interventions to stabilize one's currency would be permitted under the agreement. During his interview with Trump, Waller, currently the head of research at the St. Louis Fed, led by the dovish James Bullard, said the Fed doesn't explicitly target exchange rates (then again, that's what they all say). But one of Trump's top economic officials, Larry Kudlow, appeared to come around to his boss's position during an interview with CNBC on Tuesday, where he said that "price level stability and a steady dollar" should be the primary objectives of Fed policy, not employment.

Weaponizing The Dollar Has Accelerated The Demise Of The US Empire - The Trump administration’s incessant sanctions wars are curbing the dollar’s global hegemony and speeding the demise of U.S. empire... The signs are mounting steadily now. As the Trump administration weaponizes the dollar in defense of American hegemony, it is prompting many other nations to find alternatives to the U.S. currency as the default medium of exchange. The long-term implications of this swiftly advancing trend, evident among allies as well as those Washington considers adversaries, cannot be overstated: At stake is the longevity of America’s global preeminence. The just-concluded Group of 20 session in Osaka, Japan, was a dramatic demonstration of how quickly “de-dollarization” efforts are coalescing. And the pattern could not be clearer: The Trump administration’s incessant use of unilateral economic and financial sanctions against perceived enemies, which is almost certainly without precedent, is high among the reasons these efforts now gather momentum at a pace few in the financial markets or in official circles anticipated. The impulse to international trade and financial transactions has been evident for some time. Russia has actively encouraged its trading partners to avoid the dollar in favor of local currencies since Washington imposed sanctions against Russia following the U.S.–cultivated coup in Ukraine five years ago. Russia is now recruiting other nations to participate in its alternative to the U.S.–controlled SWIFT bank-messaging system. China has set up a parallel mechanism, the Cross­–Border Interbank Payments System.    China launched an oil-futures market denominated in yuan little more than a year ago. Its annual turnover is already the equivalent of $2.5 trillion. The Shanghai Futures Exchange, where oil futures are traded, recently announced plans to offer forward contracts in rubber, nonferrous metals, and other commodities — all to be transacted in yuan. The G–20 gathering marked an important step for these de-dollarization efforts. France, Germany, and Britain announced on the opening day that a trading system developed over the past year to circumvent U.S. sanctions against Iran — and any entity transacting with it — is now operational. The Instrument in Support of Trade Exchanges, or Instex, replaces the Special Purpose Vehicle Europeans devised a year ago. All three sponsors, along with Russia, China, and the U.S., are signatories of the 2015 accord governing Iran’s nuclear programs, which the U.S. repudiated last year.

Michael Hudson: De-Dollarizing the American Financial Empire -  Yves here. Another meaty Michael Hudson interview on Guns and Butter. However, I have to vehemently disagree with the claim made by Bonnie Faulkner at the top of the discussion. No one holds guns to other countries’ heads to make them hold dollars. The reason the dollar is the reserve currency is the US is willing to export jobs via running persistent trade deficits.  The US moved away from  having rising worker wages as the key metric of sound economic policy in the 1970s, when labor was blamed for stagflation (too powerful unions supposedly hobbling US manufactures, when the performance of Toyota at the famed NUMMI joint venture showed that to be false; formal or informal cost of living adjustments to pay credited with institutionalizing inflation). Recall also that the Democrats had started to abandon labor unions even before that.Anyone who runs a trade surplus with the US winds up holding dollars. The idea that China holds a lot of dollars because US diplomats browbeat them is absurd. China can hold its dollars as cash, or it can put them in Treasuries and pick up some yield, or hold riskier dollar investments.  If it sells its dollars and buys other currencies, it will at the margin drive the dollar down and push its currency up, which would hurt its competitiveness in exports, which contradicts its imperative of keeping employment high and using trade surpluses to help achieve that end.Most countries as a matter of policy actually do or aspire to running trade surpluses because they get the mirror image: they can achieve higher employment levels than they would if they relied only on domestic demand.Smaller economies can and regularly do get themselves in trouble by borrowing in dollars because the borrowing rate at the time appeared to be lower than in their own currency. This pretty much always ends in tears because the home currency depreciates, greatly raising the cost of the formerly cheap dollar loan. However, it is true that having established the dollar as the reserve currency (and further going to considerable lengths to make the world safe for US banks and investment banks), the US is now thuggish in how it uses its influence over the dollar payments system. No major financial institution can afford to be cut off from dollar clearing.

Q2 GDP Forecasts: Around 1.5% -From Merrill Lynch: We continue to track 1.7% for 2Q GDP growth. [July 12 estimate]  From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 1.5% for 2019:Q2 and 1.8% for 2019:Q3. [July 12 estimate]. And from the Altanta Fed: GDPNow The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in thesecond quarter of 2019 is 1.4 percent on July 10, up from 1.3 percent on July 3. [July 10 estimate] CR Note: These estimates suggest real GDP growth will be around 1.5% annualized in Q2.

Make America's deficits great again - Two and a half years into his term, President Trump has little to show for breaking with erstwhile Republican Party orthodoxy on trade and budget policy. Indeed, far from delivering on his promise to cut America’s trade deficit, Trump has presided over a ballooning deficit that’s on pace to be some 25 percent higher than when he took office. This is happening at a time when the budget deficit is widening and the country’s public debt is well on its way to exceeding 90 percent of GDP. Sadly, the Trump administration seems unfazed by the country’s deteriorating long-run financial position. It shows no indication of correcting policy course to put the economy on a sounder long-run economic footing. This makes it all too likely that the country’s incipient twin deficit problem will only worsen in the remaining 18 months of Trump’s first term. That in turn will further mortgage the country’s economic future and diminish the U.S. dollar’s attractiveness as an international reserve currency.  Two defining pillars of the Trump administration’s macroeconomic policy have flown in the face of pre-Trump-era Republican Party orthodoxy.  The first involved the ready resort to import tariffs and the repeated calls for a weak dollar with the supposed intention of leveling the international playing field and eliminating the trade deficit. The second involved the introduction in 2017, a time of relative economic strength, of a massive unfunded tax cut centered on a large reduction in the corporate tax rate. This budget-busting tax cut gave short shrift to earlier Republican Party strictures that budget deficits mattered and that a rising public debt effectively mortgaged our children’s future. The supposed intent of the Trump tax cut was to spur corporate investment as a means to put the country on a faster growth track.   Needless to say, it is far too early to make a definitive assessment of the major shift in U.S. trade and budget policy on Trump’s watch. But the initial indications give reason for considerable concern.  Far from strengthening the country’s external accounts, the Trump import tariffs and budget largesse are doing the reverse, as indicated by a widening U.S. trade deficit. The import tariffs are doing so by raising the prospect of a world trade war, by sowing economic uncertainty in our trade partners, and by contributing to a generalized economic slowdown abroad. That in turn is inducing our trade partners to demand less of our exports and to loosen their monetary policies. By causing the dollar to appreciate, that relative monetary policy loosening worsens the international competitive position of our exporters in foreign markets. For its part, our widening budget deficit is damaging our external position by reducing the country’s saving level. That perpetuates a situation whereby the U.S. continues to consume more than it produces, thereby forcing it to import more than it exports.

High anxiety hits Senate over raising debt ceiling - Senators are growing anxious that they might have to vote to raise the nation’s debt ceiling in a matter of weeks given new estimates that the government could hit its borrowing limit earlier than expected. The debt limit was exceeded earlier this year, and the Treasury Department is now taking steps known as “extraordinary measures” to prevent the government from going over its borrowing limit. Lawmakers had hoped they would be able to avoid the politically painful vote to raise the debt ceiling until the fall — and that it could be packaged with other legislation to fund the government and set budget caps on spending. But that could be much more difficult if Treasury’s ability to prevent the government from going over its borrowing limit ends in mid-September — just days after lawmakers would be set to return from their summer recess. “I think we need to hustle to a caps deal as soon as we possibly can and include the debt limit in it, no doubt,” said Sen. Shelley Moore Capito (R-W.Va.), a member of the Senate Appropriations Committee. The debt limit has been far from the front page and has been essentially put on the back burner as lawmakers debate the treatment of migrants at the border and battle over nominations and spending bills. Members of the Appropriations Committee on Tuesday were openly skeptical about whether their colleagues would jump on the issue. “The question is, will anybody act until the urgency is on top of us?” said Senate Appropriations Committee Chairman Richard Shelby (R-Ala.). “We need to avoid the brink.” Failing to raise the debt ceiling would be a catastrophic move that could roil worldwide financial markets. Shelby said the mere possibility that the debt ceiling could be breached in September should give “more sense of urgency” to Congress taking quick action, while Capito said it was not in “anybody’s best interest to have that fight in September up against the debt limit.” A study released this week by the Bipartisan Policy Center said there was a “significant risk” that the government could reach its debt limit in early September unless Congress raises the cap. The estimate was a shift from its previous forecast, which estimated the debt limit could be reached in October or November, which would give Congress more breathing room. The earlier timeline comes after Treasury Secretary Steven Mnuchin told Congress in May that the debt ceiling increase could happen in “late summer.”

Mnuchin urges Congress to raise debt ceiling before August recess  - Treasury Secretary Steven Mnuchin is urging Congress to raise the debt ceiling before splitting for summer break, warning Wednesday that there may be a "need" to do that before the August recess amid stalled negotiations on a broader budget deal. Mnuchin was among President Donald Trump’s budget negotiators who met with Republican leaders at the Capitol Wednesday to try and wriggle out of a stalemate with Democrats ahead of a series of key fiscal deadlines. Attendees said afterward that forging a new two-year budget deal will be up to Mnuchin and Speaker Nancy Pelosi (D-Calif.), who did not attend the meeting but has been in contact with the Treasury secretary this week. Congressional leaders are hoping to lift the debt ceiling, which could be breached in mid-September, as part of the budget talks. But the stalled spending negotiations have raised the prospect of increasing the debt limit separately from efforts to fund the government past September and avoid automatic budget cuts known as sequestration. "Everybody knows that there's been some outside effort talking about the debt ceiling and that is something we are having discussions about ... and potentially the need to do something before everybody leaves," Mnuchin told reporters after meeting with GOP leaders on Wednesday. Asked if he wants action before the August recess, he replied: "It would be my preference to see them pass something." GOP leaders are still holding out hope of cutting a budget deal and attaching the debt ceiling to the package, which would make it far easier to pass. Considering the debt ceiling on its own, an unpalatable vote for both fiscal conservatives and liberals who dislike Trump, is a "last resort," said Senate Majority Whip John Thune (R-S.D).

Pelosi says debt limit should be dealt with in next few weeks - Speaker Nancy Pelosi (D-Calif.) said Thursday Congress should act on a budget caps deal to raise the debt limit in the next few weeks. Lawmakers had long expected that they wouldn't need to act on raising the debt limit until the fall. But a new study from the Bipartisan Policy Center earlier this week concluded that the Treasury Department could run out of so-called extraordinary measures by early September. "I am personally convinced that we should act on the caps and the debt ceiling,” Pelosi told reporters, “prior to recess.” The House and Senate are only scheduled to be in session for another few weeks before leaving for the August recess. The House is set to adjourn on July 26 and the Senate is expected to be in session through Aug. 1. Both chambers aren't scheduled to come back until Sept. 9. When asked if she’s optimistic about a budget deal, Pelosi said, “I am realistic.” “We will see. We are going back and forth,” Pelosi said. Treasury Secretary Steven Mnuchin, after leaving a meeting with House and Senate GOP leaders on Wednesday, said that it would be his "preference" for Congress to act before the August recess. "That is something we’re having discussions about, updating the numbers and potentially the need to do something before everybody leaves," Mnuchin said. A Pelosi aide later told The Hill that Pelosi and Mnuchin spoke twice on Thursday by phone, once at 4:45 p.m. and again at 7 p.m. The two agreed to speak again Friday morning, the aide said. Both parties have sought to attach a debt limit hike to a budget deal that establishes spending levels for the next two years.

Trump Couldn’t Ignore the Contradictions of His Foreign Policy Any Longer - On June 30, John Bolton was sent to the capital of Outer Mongolia, Ulaanbaatar, while President Donald Trump stepped into North Korea to meet Kim Jong Un. Trump was accompanied by loyalists—Mike Pompeo, Mick Mulvaney, Jared and Ivanka Trump—and a new adviser, Fox News’s Tucker Carlson, who is credited with talking the president out of striking Iran as his Cabinet had recommended. Trump invited Kim to the White House, and reports swirled that the United States would settle for a nuclear freeze by North Korea instead of denuclearization. In response, Bolton tweeted, “Neither the NSC staff or I have discussed or heard of any desire to ‘settle for a nuclear freeze by North Korea.’ This was a reprehensible attempt by someone to box in the President. There should be consequences.” The words NSC staff or I were doing a lot of work, implying that others in the administration were behind the move. We now know that Stephen Biegun, the State Department’s special envoy to North Korea, briefed reporters on Pompeo’s plane back from Korea that the administration was considering a “complete freeze” to unlock the talks.Trump’s foreign policy has been full of twists and turns, but it has also followed a clear narrative arc. The 10-day period from June 20—when Trump reversed himself on Iran strikes—to the DMZ visit was among the most significant of his presidency, as he was forced to come to terms with the consequences and contradictions of his own decisions. Over the course of three decades, Trump has carefully nurtured two images of himself—as a dealmaker, and as a militarist. Bolton did all he could to encourage the latter. But even from faraway Ulaanbaatar this past weekend, it was clear that, when made to choose, Trump would opt for the former.

Exclusive: Iran's release of Lebanese prisoner was failed overture to U.S. - (Reuters) - Iran’s release last month of Nizar Zakka, a Lebanese businessman with U.S. permanent residency, after four years in prison was meant as an opening for U.S.-Iranian talks, according to three Western sources familiar with the issue. The gesture, however, was not enough for Washington, which did not pursue it. “It was a missed opportunity,” one U.S. source said of Zakka’s June 11 release and the U.S. decision not to pursue talks. “We should have explored whether there was something there.” A second source — who is familiar with Iran’s thinking and spoke on condition of anonymity — said Iran freed Zakka as a signal it wanted to cool tensions that have fueled fears of a war, and described his release as “a goodwill gesture.” “This was seen as a de-escalation step from their side, which obviously they expected to be somehow reciprocated from the American side,” said the second source, adding that the United States did not take up the overture. A State Department spokesman declined to address whether Washington had missed an opportunity to engage with Iran after Zakka’s release, and said if Tehran wanted to reduce tensions it should free an American citizen. “If Iran wants to reduce tensions and engage with the United States government, it should make a humanitarian gesture such as releasing one of the innocent American citizens it is holding hostage,” the spokesman told Reuters.

Trump’s Version of the Iran Accord: Heads I Win, Tails You Lose - Trump’s Iran policy is akin to that of a schoolyard bully. More worrying is the passivity of the rest of the world and the dangerous drift to another devastating war in the region. The U.S., after walking out of the Iran accord, is now shouting foul as Iran has breached the 300 kg enriched-uranium stockpile limit of the accord. Does the U.S. expect Iran to be bound by the accord while it happily reneges on it? Or is its concept of international accords the playground bully’s version of a coin toss, “Heads I win, tails you lose”?The Iran accord, or the Joint Comprehensive Plan of Action(JCPOA), between six countries and Iran was signed in 2015. The six countries are France, Germany, the Russian Federation, the United Kingdom, China and the United States. JCPOA brought down Iran’s stockpile of processed uranium (uranium hexafluoride) from 10,000 kg to just 300 kg or only 2 percentof what it had before the agreement was signed—the same JCPOA agreement from which Trump walked out in May last year, calling it the“worst deal ever.”Those media sections hyping up Iran breaching the 300 kg limit in JCPOA as a step toward acquiring nuclear weapons capability are simply providing an alibi for the Trump administration’s warmongering.The U.S.has termed Iran’s exceeding the 300 kg limit as an example of how it was never serious about the agreement. In an Orwellian doublespeak, the White House press secretary Stephanie Grisham said, “There is little doubt that even beforethe deal’s existence, Iran was violating its terms” (emphasis mine).IAEA, the governing body on this issue, has certified as late as March 31, 2019, that Iran was fully in compliance with the agreement even after putting the U.S. and other signatories on notice on its future steps.Trump and Bolton’s game plan is, and has always been, to beat Iran into total submission: no enrichment, no rocket or missile capability and no alliances or supporting groups or countries in the region thatthe U.S.and its allies don’t like. This is what the U.S.tried in the Bush years with no success. This is the trajectory that led to Iran continuously building up its nuclear capability—centrifuges, stockpile, reactors, etc. It is the recognition that this was a route to nowhere, or another devastating warin the region, that forced the Obama administration to come to the negotiating table and finally the Iran accord.

“Pretty Please” – Trump Asked Iran To Allow Him To Bomb It - On June 20 Iran shot down a U.S. spy drone. U.S. President Trump decided not to retaliate. The White House and the media claimed that Trump had ordered a strike on Iran but pulled it back at the last minute. We said that this was likely bullshitA strike in retaliation for the downed drone may have never been on the table. An alternative interpretation is that the U.S. sought agreement for a symbolic 'strike' from Iran. It would hit some empty desert place to allow Trump to save face. Iran would have disagreed with that plan.  The British ambassador to the U.S., who's briefings to London leaked yesterday, agrees with that take: [Sir Kim Darroch] questioned Trump's recent claim that he aborted a missile strike on Iran because it would have caused a predicted 150 casualties, saying it 'doesn't stand up'.  'It's more likely that he was never fully on board and that he was worried about how this apparent reversal of his 2016 campaign promises would look come 2020' – at the next Presidential election.   Elijah Magnier reported that Trump had asked Iran to allow him to strike back, but was rebuffed:  According to well-informed sources, Iran rejected a proposal by US intelligence – made via a third party – that Trump be allowed to bomb one, two or three clear objectives, to be chosen by Iran, so that both countries could appear to come out as winners and Trump could save face. Iran categorically rejected the offer and sent its reply: even an attack against an empty sandy beach in Iran would trigger a missile launch against US objectives in the Gulf. An Iranian general yesterday confirmed Magnier's take (also here): A senior Iranian general has revealed that Washington, through diplomatic channels, recently asked Tehran to allow it to conduct a small-scale operation in the Iranian airspace in order to save its face following the IRGC’s shoot-down of a US spy drone.

How Fake News Could Lead to Real War - Who really bombed the oil tankers in the Gulf of Oman three weeks ago? Was it Iran, as the Trump administration assured us? Or was it Saudi Arabia, the United Arab Emirates or Israel—or some combination of the three? Here’s a confession from two former senior government officials: For days after the attacks, we weren’t sure. Both of us believed in all sincerity there was a good chance these actions were part of a false flag operation, an effort by outsiders to trigger a war between the United States and Iran. Even the film of Iranians hauling in an unexploded limpet mine from near the side of tanker, we reasoned, might be a fabrication—deep fake footage just like the clip of House Speaker Nancy Pelosi staggering around drunkenly. Perhaps you felt that way too. But for the two of us, with 30 years of government service and almost 20 more as think tankers between us, this was shocking. Yes, we are card-carrying members of the "Blob," the all-too-conventionally minded Washington foreign policy establishment, but we weren’t sure whether to believe our government. This was more than a little disconcerting. Imagine waking up one morning and catching yourself thinking that alt-right conspiracy theorist Alex Jones was making good sense, that perhaps the Sandy Hook shooting was faked or that the 9/11 attacks were really an inside job? Imagine what it might be like to be in the grip of a conspiracy theory, when you’ve spent your whole professional life being one of those policy mandarins who could smell a conspiracy theory a mile away? And we weren’t alone. In conversations with former colleagues—ambassadors, undersecretaries and the like—we found that plenty of others also bought the notion that the tanker attacks were a false flag op. To these eminences, it seemed plausible the Saudis or others had staged the bombings. After all, Crown Prince Mohammed bin Salman has practically been cheerleading for a conflict, and the idea that the Iranians would risk a U.S. attack seemed risible. It wasn’t obvious why Iran would court humiliation in a military showdown, or, for that matter, attack a Japanese tanker while the Japanese prime minister was visiting Tehran.

Iranian, US Delegations Reportedly Held Secret Talks In Iraq Last Week  In a report that is intended either as a warning to President Trump or as gloating over the state of the Iranian regime, Israeli TV station i24 reports that over the past week, a delegation from the US has been holding talks with a group of senior Iranian officials in Erbil, the de facto capital of Iraqi Kurdistan. The meetings are a sign of "nascent upheaval" in the Iranian government, the report said, as the country's economic crisis worsens. Another sign is the arrest of 125 Iraqi government officials, many of which have been charged with espionage. Others have been removed from their posts, while some have simply disappeared.As the Israelis tell it, Iran made the first overtures about holding talks with the US - though President Trump has repeatedly insisted that he'd be open to talking. Tehran reportedly contacted the Kurdish opposition parties based in Iraq, hence the location of the meeting. Unfortunately, an Iranian source said the talks proved 'useless'. One State Department official effectively denied the report, saying rumors about a US-Iran meeting were "highly doubtful." However, the Israelis' Iranian sources warned that the leadership is worried about a possible soft coup brewing in the IRGC.

Bolton Losing Ground On Venezuela, Iran... But Far From Down-And-Out - The wave of wishful thinking articles, including some by friends of mine whose judgment I usually respect was entirely wrong. President Donald Trump has not fired John Bolton for the failed fiasco of his latest inept attempt to topple the legitimate democratically-elected government of Venezuela: At least not yet. Bolton remains National Security Advisor of the United States with his fingerprints all over the latest “incident” of limpet mine attacks on the two oil tankers in the Persian Gulf. That is not to see that daylight has perceptibly opened up between Trump and Bolton, first on Venezuela and now on Iran. It most clearly has.Had Trump still been fully in Bolton’s pocket, he would by now have ordered the ferocious air strikes against Iran that Bolton desperately craved. It is greatly to the president’s credit that he did not.The failure of Bolton – eagerly supported by Secretary of State Mike Pompeo, Special Envoy Elliott Abrams and Vice President Mike Pence – to secure the toppling of President Nicolas Maduro of Venezuela a month ago clearly cost him badly. Trump is a lifelong businessman. He would have gone for what he regarded as a good deal – the toppling of Maduro in a US–orchestrated coup but Bolton and his gang made an utter hash of it.Bolton was therefore eager to turn the president’s attention – and that of political Washington – to Iran as soon as possible. The compliant, spineless jellyfish of the US Mainstream Media (MSM) accommodated him as always. Not a whisper of doubt about Bolton’s evident incompetence in the Venezuela Escapade has been allowed to appear in the New York Times and the Washington Post.

Holy War? Pompeo Preaches to Pro-Israel Christian Confab -- Secretary of State Mike Pompeo gave a pointedly religious speech Monday that sounded like he was rallying fellow Pro-Israel Christians around the inevitably of a U.S. confrontation with Iran. Pompeo delivered his 2,000-plus word speech, titled “The U.S. and Israel: a Friendship for Freedom,” before a 5,000-plus gathering of Christians United for Israel (CUFI) in Washington, D.C. Led by founder and chairman John Hagee, the annual event also boasted speeches from Israeli Prime Minister Benjamin Netanyahu, Vice President Pence, and National Security Advisor Ambassador John Bolton. In other words, every member of Trump’s inner circle who has spent the last several weeks of escalating tensions banging the drums of war against Iran. Members of CUFI, which calls itself the largest pro-Israel organization in the U.S., have been spending the early part of the week lobbying lawmakers on Capitol Hill. “Fourteen years ago, I invited 400 of America’s leading evangelicals to come to Cornerstone Church in San Antonio to give birth to CUFI. Today, by the grace of God, we are seven million-plus standing united in defense of Israel and the Jewish people,” Hagee told the crowd assembled in the cavernous Washington Convention Center. Pompeo was clearly taking his case against Iran to Hagee’s faithful in his own remarks Monday, beginning with a brief history lesson on the modern state of Israel, and then asking the audience to “compare Israel’s reverence for liberty with the restrictions on religious freedom facing Christians and people of all faiths throughout the rest of the Middle East,” where “if a Muslim leaves Islam it is considered an apostasy, and it is punishable indeed by death.” From lines like “can I get an amen?” to “this is what it must have looked like to be part of the crowd for the fishes and loaves,” Pompeo’s address was filled with religious metaphors that were right on cue for the massive Evangelical convocation. “Christian support in America for Zion—for a Jewish homeland—runs back to the early Puritan settlers, and it has endured for centuries,” said Pompeo. “Indeed, our second president, a couple years back, said… ‘I really wish the Jews again in Judea an independent nation.'”

The Untold Story of Christian Zionism’s Rise to Power in the United States— The largest pro-Israel organization in the United States is not composed of Jews, but of Christian evangelicals, with a total membership of 7 million, more than 2 million more members than the entirety of the American Jewish community.Members of this organization, Christians United for Israel (CUFI), met in Washington on Monday, attracting thousands of attendees and featuring speeches from Israeli Prime Minister Benjamin Netanyahu, Secretary of State and former CIA Director Mike Pompeo, Vice President Mike Pence, and National Security Advisor John Bolton. CUFI’s leader, controversial evangelical preacher John Hagee, has met with President Donald Trump several times and was recently part of an exclusive White House meeting in March on the administration’s upcoming “peace plan” for Israel and Palestine. CUFI is but one of many organizations throughout American history that have promoted the state of Israel and Zionism on the grounds that a Jewish ethnostate in Palestine is a requirement for the fulfillment of end-times prophecy and necessary for Jesus Christ to return to Earth — an event Christians often refer to as “the Second Coming.”While organizations like CUFI and its predecessors have long seen the creation of the state of Israel in 1948, and the later Israeli victory and conquest of Jerusalem in 1967, as the fulfillment of Biblical prophecy, there is one prophecy that this sect of evangelical Christians believes is the only thing standing between them and the Second Coming. There are estimated to be more than 20 million of these Christians, often referred to as Christian Zionists, in the United States and they are a key voting bloc and source of political donations for the Republican Party.

Washington Weighing 'Snapback' Of UN Sanctions On Iran - Washington is about to squander whatever goodwill it gleaned from the series of mysterious tanker attacks that it blamed on Iran by leveraging its veto power at the UN Security Council to impose special 'snapback' sanctions on Tehran. In the latest sign that the Trump Administration is planning to redouble its pressure campaign against the Islamic Republic in response to Tehran's uranium enrichment, Bloomberg reports that senior US officials are debating whether to impose the 'snapback' sanctions - which would further elevate tensions between Washington and Tehran - in response to Iran's breach of thresholds for the size of its uranium stockpile and the level of enrichment. Though the US formally withdrew from the treaty last year, officials believe Washington could still invoke the mechanism, which would ultimately trigger a return to UN Security Council sanctions beyond those the US is already imposing unilaterally.A return to the sanctions straightjacket that first drove Tehran to the negotiating table would destroy whatever is left of the European signatories' effort to salvage the deal. It would also seriously piss off the other signatories, particularly since the US has already quit the deal, and therefore shouldn't have a say.But ultimately, even Obama era officials agree that there's "an argument to be maid" for triggering the snapback sanctions.

U.S. House of Representatives Creates Requirement That There Be Some Basis for Any Foreign Bases - By a vote of 219 to 210, at 2:31 p.m. on Thursday, the U.S. House of Representatives passed an amendment introduced by Congresswoman Ilhan Omar requiring that the U.S. military provide Congress with the cost and the supposed national security benefits of every foreign military base or foreign military operation.World BEYOND War had flooded Congressional offices with the demand for Yes votes.Here is the text of the amendment to the National Defense Authorization Act as passed:At the end of subtitle G of title X, insert the following: SEC. 10. REPORT ON FINANCIAL COSTS OF OVERSEAS UNITED STATES MILITARY POSTURE AND OPERATIONS. Not later than March 1, 2020, the Secretary of Defense shall submit to the congressional defense committees a report on the financial costs and national security benefits of each of the following for fiscal year 2019: (1) Operating, improving, and maintaining overseas military infrastructure at installations included on the enduring location master list, including adjustments that take into account direct or in-kind contributions made by the host nations of such enduring locations. (2) Operating, improving, and maintaining overseas military infrastructure supporting forward-deployed forces at overseas contingency locations, including adjustments that take into account direct or in-kind contributions made by the host nations of such enduring locations. (3) Overseas military operations, including support to contingency operations, rotational deployments, and training exercise.In this video from Wednesday on C-Span, at 5:21, Rep. Omar makes the case for a need to justify foreign military bases, not just blindly fund unlimited and unknown empire. At 5:25 Rep. Adam Smith makes the case as well. One of their colleagues argues in opposition, but it’s difficult to find coherent meaning in what he says, and it’s hard to imagine what a persuasive case could be for the 210 No votes recorded. What could be the advantage of coating the globe with military bases without bothering to know what each one costs or whether each one plausibly makes you safer or actually endangers you?The closing o f U.S. bases and the removal of U.S. military personnel are critical to the elimination of war.

House Votes To Block Trump From Iran War As Senate Showdown Looms - The Democrat-led House voted Friday to block President Trump from taking military actions against Iran without first seeking Congressional approval - a vote which had the support of more than two dozen Republicans, much to John Bolton's chagrin. According to the Washington Post, the vote will likely ensure a showdown with the GOP-controlled Senate over whether the restriction will be included in the final bill negotiated between the two chambers. Of note, the House version contains an exception for cases of self-defense. Republicans in both the House and Senate have argued that such language would embolden Tehran amid a 'divided' Congress. "Our national security is not a game. But that is exactly how Democrats are treating it," said House Minority Leader Kevin McCarthy (R-CA) on Friday morning. House Armed Services Committee Chairman Rep. Adam Smith (D-WA) pushed back, saying that Republicans "can opposite it, that’s fine, but to say we don’t care about national security . . . is a baldfaced lie." "In fact, our bill isn’t just good, it’s better than the ones that the Republican Party has put together, because we believe the Pentagon should be accountable," added Smith.  At the center of the Iran amendment is a dispute over how much money should be allocated to the Pentagon and military this year. While Trump and the Republicans want $750 billion, the House bill limits it to $733 billion - a figure Smith says military leaders have previously endorse.

U.S. House passes $733-billion defense policy bill after Trump threatens veto – (Reuters) - The U.S. House of Representatives approved a $733-billion defense policy bill on Friday, defying President Donald Trump’s veto threat by including provisions like a clampdown on funding for his planned wall on the border with Mexico. The House passed its version of the 2020 National Defense Authorization Act, or NDAA, by a 220 to 197 vote, without a single Republican voting in favor of the bill and after some of the most liberal Democrats opposed it as they pushed for a reduction in defense spending. Republican opposition to the bill sets the stage for a stiff fight over its provisions later this year that could threaten Congress’ record of passing the NDAA annually for nearly six decades. The version of the bill passed by the Democratic-controlled House has several provisions that angered Republican Trump, including providing $17 billion less for the military than he wanted and denying funds he wants to fulfill his campaign promise to build a wall on the border with Mexico. The House bill also includes an amendment that would bar Trump from attacking Iran without first obtaining Congress’ approval. That amendment was considered key to winning enough support from the most liberal Democrats for the NDAA to pass the House. That bipartisan amendment passed by 251-170 and prevents federal funds from being used for any military force in or against Iran without congressional authorization. Representative Ro Khanna of California said: “Although President Trump campaigned on ending costly wars oversees, his chosen advisors, one which includes the architect of the Iraq war, and actions to increase tensions with Iran, prove he is far from living up to that promise.” Because it is one the few pieces of major legislation Congress passes every year, the NDAA becomes a vehicle for a broad range of policy measures as well as setting everything from military pay levels to which ships or aircraft will be modernized, purchased or discontinued.

Amazon, Microsoft wage war over the Pentagon’s ‘war cloud’ - Amazon and Microsoft are battling it out over a $10 billion opportunity to build the U.S. military its first “war cloud” computing system. But Amazon’s early hopes of a shock-and-awe victory may be slipping away. Formally called the Joint Enterprise Defense Infrastructure plan, or JEDI, the military’s computing project would store and process vast amounts of classified data, allowing the Pentagon to use artificial intelligence to speed up its war planning and fighting capabilities. The Defense Department hopes to award the winner-take-all contract as soon as August. Oracle and IBM were eliminated at an earlier round of the contract competition. But that’s only if the project isn’t derailed first. It faces a legal challenge by Oracle and growing congressional concerns about alleged Pentagon favoritism toward Amazon. Military officials hope to get started soon on what will be a decade-long business partnership they describe as vital to national security. “This is not your grandfather’s internet,” said Daniel Goure, vice president of the Lexington Institute, a defense-oriented think tank. “You’re talking about a cloud where you can go from the Pentagon literally to the soldier on the battlefield carrying classified information.” Amazon was considered an early favorite when the Pentagon began detailing its cloud needs in 2017, but its candidacy has been marred by an Oracle allegation that Amazon executives and the Pentagon have been overly cozy. Oracle has a final chance to make its case against Amazon — and the integrity of the government’s bidding process — in a court hearing Wednesday. “This is really the cloud sweepstakes, which is why there are such fierce lawsuits,”

WSJ Exposes Conflicts Of Interest Involving Amazon, Pentagon Over $10B JEDI Contract --After years of explosive growth, Amazon Web Services’ revenue growth has started to slow in recent quarters. Which has made securing a multi-billion-dollar DoD cloud-computing contract all the more important to Bezos & Co. Unfortunately for them, the process for awarding the contract to build the Joint Enterprise Defense Infrastructure, or JEDI, has become embroiled in controversy, as rivals have sued alleging they were unfairly excluded from the bidding. On Monday, WSJ raised more questions about the influence campaign by Bezos and some of his top executives to win the DoD's favor even before the bidding process for JEDI began. WSJ has obtained a tranche of emails detailing contacts between Amazon and the DoD that the paper said could give the plaintiffs - a group that includes Oracle and IBM - more ammunition to question the bidding process.  That's because the emails show that on March 31, 2017, former Defense Secretary Jim Mattis attended a dinner in London with Teresa Carlson, the Amazon executive in charge of selling cloud-computing services to governments. An organizer of the dinner said cloud computing never came up, but still, that meeting helped lay the groundwork for a meeting in August 2017 between Mattis and Bezos. Emails showed that other Pentagon officials helped connect Carlson with Mattis's chief of staff and other senior Pentagon officials at around the same time. In response to questions from WSJ, a spokesman for Amazon insisted that AWS received no preferential treatment during the bidding process. The Pentagon defended the process as "open, transparent, and full." These pre-bid meetings would, at least at first glance, support Oracle's contention that the Pentagon designed the proposal with Amazon in mind. But there's a more pernicious collusion at the heart of Oracle's lawsuit, filed in the US Court of Federal Claims: The company alleges that a former Amazon employee working at the Pentagon helped guide the deal to favor Amazon, then returned to work at Amazon. The Pentagon has maintained that this employee didn't impact the bidding process. "It is highly irregular that the Secretary of Defense attended a small, private dinner for 'off-the-record' discussions with an Amazon sales executive," said Kenneth Glueck, who runs Oracle’s Washington office. Republican Sen. Chuck Grassley even told WSJ on the record that these emails support his belief that the Pentagon should restart the bidding process. "We shouldn’t have to tolerate conflicts or appearances of conflicts of interest in any government contracting process," Grassley said in a statement. The contract has already been delayed once as the Pentagon investigated the role of the Amazon employee cited in Oracle's lawsuit. And as pressure mounts from the media and Congress, it's looking increasingly likely that - at the very least - the contract, which was supposed to be awarded in the coming weeks, will be delayed again. It might even result in Amazon being excluded from consideration from the massive contract, which would be a huge blow to Bezos and AWS.

Britain’s man in the US says Trump is ‘inept’: Leaked secret cables from ambassador say the President is ‘uniquely dysfunctional and his career could end in disgrace’ Britain's Ambassador to Washington has described Donald Trump as 'inept', 'insecure' and 'incompetent' in a series of explosive memos to Downing Street. Sir Kim Darroch, one of Britain's top diplomats, used secret cables and briefing notes to impugn Trump's character, warning London that the White House was 'uniquely dysfunctional' and that the President's career could end in 'disgrace'. His bombshell comments risk angering the notoriously thin-skinned President and undermining the UK's 'special relationship' with America. In the memos, seen by The Mail on Sunday following an unprecedented leak, Sir Kim:

  • Describes bitter conflicts within Trump's White House – verified by his own sources – as 'knife fights';
  • Warns that Trump could have been indebted to 'dodgy Russians';
  • Claims the President's economic policies could wreck the world trade system;
  • Says the scandal-hit Presidency could 'crash and burn' and that 'we could be at the beginning of a downward spiral... that leads to disgrace and downfall';
  • Voices fears that Trump could still attack Iran.

In one of the most sensitive documents, Sir Kim writes: 'We don't really believe this Administration is going to become substantially more normal; less dysfunctional; less unpredictable; less faction riven; less diplomatically clumsy and inept.' He also says that he doesn't think Trump's White House will 'ever look competent'. In reference to Trump's ability to shrug off controversies in a life which has been 'mired in scandal', he says that the President may nonetheless 'emerge from the flames, battered but intact, like [Arnold] Schwarzenegger in the final scenes of The Terminator'.

Trump hits back over UK ambassador’s leaked memos - Donald Trump has said Britain’s ambassador to the US has “not served the UK well” as he hit back following the leak of confidential internal memos that presented an unflattering portrait of the president and his administration. Earlier, the Foreign Office ordered an inquiry into the leaking of the cables, written by the ambassador, Kim Darroch, in which Trump’s White House is described as “uniquely dysfunctional” and “inept”. Darroch said in the memos that media reports about vicious administration rows (“knife fights”, as he put it) were mostly true. He cast doubt on whether the Trump regime would ever become more stable, described the president as insecure, and suggested Trump’s career might end in disgrace. Asked about the controversy in New Jersey by reporters on Sunday night, Trump said: “The ambassador has not served the UK well, I can tell you that. We are not big fans of that man … I can say things about him, but I won’t bother.” Darroch’s comments were made in a series of briefings sent to London over the past two years, which were published by the Mail on Sunday. Although Darroch’s assessments are in line with a lot of mainstream commentary on the Trump regime, the publication of such remarks from the UK’s top diplomatic representative in the US is an embarrassment. Commenting on the leak, the British foreign secretary, Jeremy Hunt, said: “This was a personal view. It’s not the view of the British government. It’s not my view. We continue to think that under President Trump the US administration is not just highly effective, but the best possible friend of the United Kingdom on the international stage.” David Gauke, the justice secretary, told the BBC it was important for ambassadors to be able to give “honest, unvarnished advice” to ministers, and he said the leak of the cache of memos was “disgraceful”.

Trump: ‘Wacky’ UK ambassador a ‘very stupid guy’ - President Trump early Tuesday ramped up his criticism of the British ambassador to the United States, who called Trump "inept" in leaked cables, saying Kim Darroch is “a very stupid guy” and a "pompous fool." “The wacky Ambassador that the U.K. foisted upon the United States is not someone we are thrilled with, a very stupid guy. He should speak to his country, and Prime Minister May, about their failed Brexit negotiation, and not be upset with my criticism of how badly it was handled,” Trump tweeted. Trump also again attacked British Prime Minister Theresa May over Brexit, saying he told her “how to do that deal, but she went her own foolish way-was unable to get it done.” “A disaster!” he continued. “I don’t know the Ambassador but have been told he is a pompous fool. Tell him the USA now has the best Economy & Military anywhere in the World, by far and they are both only getting bigger, better and stronger.....Thank you, Mr. President!” Darroch reportedly described Trump as “incompetent” and “inept” in memos and notes sent to the United Kingdom's Foreign and Commonwealth Office. Barroch also described conflicts within the Trump administration as “knife fights” and said he doesn’t believe the White House will “ever look competent.” Trump tweeted on Monday after the leaked cables were reported that he would “no longer deal with” Darroch. "I do not know the Ambassador, but he is not liked or well thought of within the U.S. We will no longer deal with him,” he said. Shortly after Trump’s tweet, an administration official said Darroch was disinvited from a Monday night dinner hosted by Treasury Secretary Steven Mnuchin with Trump and the emir of Qatar.

Trump ‘disrespectful’ to PM and UK, says Jeremy Hunt -- Donald Trump has been "disrespectful" towards the prime minister and the UK, Foreign Secretary Jeremy Hunt has said. His comments come after President Trump called Sir Kim Darroch, the UK ambassador to the US, "a very stupid guy" amid a row over leaked emails. He went on to criticise Theresa May over Brexit, saying she had ignored his advice and gone her "own foolish way". On Sunday emails revealed the ambassador had called the Trump administration "clumsy and inept". Meanwhile, International Trade Secretary Liam Fox's scheduled meeting with the US Commerce Secretary Wilbur Ross in the US was cancelled on Tuesday. Mr Hunt responded to Mr Trump's latest outburst by tweeting: "Friends speak frankly so I will: these comments are disrespectful and wrong to our prime minister and my country." The Tory leadership hopeful also said he would keep Sir Kim in his post until he retires at Christmas.

Ambassador 'has PM's full support' despite Trump criticism - BBC News  -Downing Street has reaffirmed its "full support" for the UK's ambassador to the US after Donald Trump said he will no longer work with him. The US president was responding after leaked emails revealed Sir Kim Darroch had called his administration inept. In a series of tweets Mr Trump also criticised Theresa May's handling of Brexit saying she had created "a mess".Number 10 called the leak "unfortunate" but said Sir Kim was continuing to carry out his duties.BBC New York correspondent Nick Bryant said Sir Kim was still planning to join International Trade Secretary Liam Fox for a scheduled meeting with the president's daughter, Ivanka Trump, on Tuesday.Mrs May told members of the Cabinet the leaked memos did not reflect the closeness of the relationship between the UK and the US.She told ministers they were "absolutely right" to give their support to Sir Kim and stressed the importance of ambassadors being able to give "honest and unvarnished" assessments to ministers. "The UK has a special and enduring relationship with the US based on our long history and commitment to shared values and that will continue to be the case," the prime minister's official spokesman added.

Donald Trump: we will no longer deal with the British ambassador - Donald Trump has launched a scathing attack on Theresa May and said the US would no longer deal with the British ambassador to Washington after the diplomat’s frank assessments of the president as “inept” and “dysfunctional” were leaked to the Mail on Sunday.In a sign of the damage to the US-UK relationship, Trump hit out at Sir Kim Darroch for a second day in a row, threatening to cut ties over the memos that described him as “radiating insecurity”.The US president also said May and her representatives had made a “mess” over Brexit, contrary to his advice. Just weeks ago, he praised the prime minister in person on his state visit to the UK, saying she had done a “very good job”.Trump launched a tirade against Darroch, saying: “I do not know the Ambassador, but he is not liked or well thought of within the U.S. We will no longer deal with him. The good news for the wonderful United Kingdom is that they will soon have a new Prime Minister. While I thoroughly enjoyed the magnificent State Visit last month, it was the Queen who I was most impressed with!” The tweets are a sign that Trump’s displeasure with Darroch has intensified since he told reporters on Sunday: “We are not big fans of that man and he has not served the UK well … so I can understand it and I can say things about him, but I won’t bother.”

UK Ambassador Who Insulted Trump Resigns - The UK ambassador to the US whose abrasive criticisms of President Trump triggered a mini-diplomatic crisis right in the middle of the Tory leadership contest to decide the next PM has resigned. In an emailed statement, Kim Darroch resigned, saying the "current situation is making it impossible for me to carry out my role as I would like." Here's the full text of his resignation letter: Since the leak of official documents from this embassy there has been a great deal of speculation surrounding my position and the duration of my remaining term as ambassador. I want to put an end to that speculation. The current situation is making it impossible for me to carry out my role as I would like. Although my posting is not due to end until the end of this year, I believe in the current circumstances the responsible course is to allow the appointment of a new ambassador. I am grateful to all those in the UK and the US, who have offered their support during this difficult few days. This has brought home to me the depth of friendship and close ties between our two countries. I have been deeply touched. I am also grateful to all those with whom I have worked over the last four decades, particularly my team here in the US. The professionalism and integrity of the British civil service is the envy of the world. I will leave it full of confidence that its values remain in safe hands.

In Major Provocation To China, US Approves Sale Of $2.2 Billion In Weapons To Taiwan - For those wondering how to make sure that any trade "ceasefire" between the US and China falls apart faster than a trip on board the Lolita Express, here is a suggestion: today the US State Department approved the possible sale to Taiwan of M1A2T Abrams tanks, Stinger missiles and related equipment at an estimated value of $US2.2 billion despite vocal Chinese criticism of the deal, AAP reported. As a reminder, one month ago China's Foreign Ministry last month said it was seriously concerned about US arms sales to self-ruled Taiwan, and urged the United States to halt the sales to avoid harming bilateral ties. The proposed sale also comes at a perilously sensitive moment: at the start of June, during the Shangri-La Dialogue in Singapore, China’s Defense Minister Wei Fenghe warned the United States not to meddle in security disputes over Taiwan and the South China Sea. He also launched into a bellicose attack on opponents to China’s expansionist plans towards the South China Sea and Taiwan, declaring: “If they want to fight, we will fight till the end”. In response, acting U.S. Defense Secretary Patrick Shanahan told the meeting that the United States would no longer “tiptoe” around Chinese behavior in Asia. Confirming that, a sale of more than $2 billion in weapons to Taiwan would be seen as a provocation to China's national interest in the region, and a clear signal that the gloves are now off when it comes to geopolitical claims, potentially resulting in a worrisome escalation of a war which has so far been confined to the sphere of trade.The sale of the weapons requested by Taiwan, including 108 General Dynamics Corp M1A2T Abrams tanks and 250 Stinger missiles, would not alter the basic military balance in the region, the Pentagon's Defense Security Cooperation Agency said. DSCA has notified Congress of the possible arms sale, which it said could also include mounted machine guns, ammunition, Hercules-armoured vehicles for recovering inoperative tanks, heavy equipment transporters and related support.

China demands US cancel proposed $2.2bn arms sale to Taiwan  - China has demanded that the United States"immediately cancel" a potential $2.2bn arms sale to Taiwan, including battle tanks and anti-aircraft missiles.The move would be Washington's first big-ticket military sale to the democratically-governed island in decades, and comes amid deteriorating ties between the US and China, the world's two largest economies that have been locked in an acrimonious trade war. It risks further heightening tensions with China, which considers Taiwan a breakaway province and has not ruled out the use of force to bring the self-ruled island under its control.Addressing reporters on Tuesday, Chinese foreign ministry spokesman Geng Shuang said that Beijing had lodged formal complaints through diplomatic channels expressing "strong dissatisfaction and resolute opposition" to the proposed sale.Shuang called the proposed deal a "crude interference" in Chinese internal affairs that harmed "China's sovereignty and security interests"."China urges the US to ... immediately cancel the planned arms sale and stop military relations with Taipei to avoid damaging Sino-US relations and harming peace and stability in the Taiwan Strait," he added. "Nobody should underestimate the Chinese government's and people's firm determination to defend the country's sovereignty and territorial integrity and oppose foreign interference."

Chinese Investments In US Grind To Halt, Trade War Blamed  - Chinese foreign direct investments in the US, including new factories, has collapsed: down to just $5 billion last year, from $29 billion in 2017 and $46 billion the prior year, according to the Rhodium Group, a New York-based economic research firm with a focus on China. The US and China trade war has been well underway for one year with both sides imposing punitive tariffs on each other's goods. President Trump has already imposed a 25% tax on $250 billion worth of imports from China. In a tit-for-tat effort, Beijing imposed 25% tariffs on $110 billion worth of US goods. The escalation of the trade war has since triggered a significant increase in investments in South and Southeast Asia, but very little in the US, contrary to President Trump's claims that a trade war would bring companies back to US.There is some hope that a recent trade war truce between President Trump and President Xi could spark more direct investments into the US from China. But in our opinion, that won't happen in the near term because a global synchronized slowdown that started before the trade war (1Q18) is being amplified by trade uncertainties, spooking corporate investment and confidence in US markets.

U.S., China to relaunch talks with little changed since deal fell apart (Reuters) - The United States and China are set to relaunch trade talks this week after a two-month hiatus, but a year after their trade war began there is little sign their differences have narrowed. After meeting with Chinese President Xi Jinping in Japan just in late June, U.S. President Donald Trump agreed to suspend a new round of tariffs on $300 billion worth of imported Chinese consumer goods while the two sides resumed negotiations. Trump said then that China would restart large purchases of U.S. agricultural commodities, and the United States would ease some export restrictions on Chinese telecom equipment giant Huawei Technologies. But sources familiar with the talks and China trade watchers in Washington say the summit did little to clear the path for top negotiators to resolve an impasse that caused trade deal talks to break down in early May. White House economic adviser Larry Kudlow said Washington was still waiting for China to make good on what he called a “very, very important” pledge to quickly buy more agricultural products, but said there was no firm deadline for such purchases, or for finalizing an overall deal. Kudlow underscored the divergent perspectives of the world’s two largest economies. He said the United States was seeking remedies and correctives for what it sees as decades of unfair and illegal trading practices, but that would necessarily clash with China’s push for a fair and equitable agreement. Those differences could still be overcome in negotiations, Kudlow, director of the White House’s National Economic Council, told an event hosted by CNBC, adding, “It’s not impossible. Where there’s a will, there’s a way.”

Trump says China is ‘letting us down’ by not buying US agricultural products - China is not purchasing U.S. crops as the world’s two largest economies scramble to end their trade war, President Donald Trump said Thursday. The president tweeted that Beijing “is letting us down” by not buying American agricultural products “that they said they would.” The development could bode poorly for efforts to reach a trade agreement, as U.S. officials have said they expect China to purchase crops as part of ongoing talks. “Hopefully they will start soon!” Trump said. Washington and Beijing have reengaged in trade talks in recent weeks after discussions collapsed in May. At the time a developing deal fell apart, Trump accused China of backing out of major commitments. Stock market watchers have followed the conflict between the U.S. and China closely. A sustained trade war could damage not only American businesses but also the global economy. After Trump and Chinese President Xi Jinping met at the G-20 summit in Japan last month, the sides agreed to move forward with talks and hold off on imposing new tariffs. But the U.S. president left the meeting with the expectation that China would buy American crops. “We’re holding on tariffs, and they’re going to buy farm product,” he said. Increased agricultural purchases serve more than one purpose for Trump. He has long pushed for the U.S. to cut its trade deficit with China. Trump also seeks to help farmers in key electoral states recently punished by flooding, low crop prices and the U.S. trade conflict with Beijing. On Tuesday, Trump’s top economic advisor Larry Kudlow said the White House considers it “very, very important” for China to buy farm products as the trade talks continue. The U.S. has put tariffs on $250 billion in Chinese goods. China has slapped duties on $110 billion in American products. After trade talks collapsed in May, both Washington and Beijing increased rates for some of the existing tariffs.

Ceasefire Over? - Trump Demands New Sanctions On Beijing Over Iranian Oil Imports - Once again, it appears Robert Lighthizer and the Trump Administration's trade hawk faction have won over the more moderate advisors. Only a week ago, reports surfaced claiming the US might exempt China from Iran sanctions, for fear that the US would have no choice but to crack down otherwise (since Beijing has made clear exactly how it feels about Washington dictating which countries it can trade with).Now, that idea, which was being pushed by senior State Department officials, has been abandoned, according to a Politico report. Instead, senior administration officials believe there's no avoiding the fact that Beijing has repeatedly violated the ban on importing Iranian crude. Because of this, a group of China hawks on the National Security Council are now pushing for the US to slap secondary sanctions on Chinese businesses. Aggressive tactics like this would almost certainly sink the recently revived and still extremely delicate 'trade truce' brokered between Trump and Xi in Osaka.You might remember the exact violation in question. In June, a tanker carrying up to a million barrels of Iranian oil docked near the Chinese port city of Qingdao. Republican lawmakers complained, demanding that the Trump Administration pressure Beijing to stop these purchases. China later welcomed a second batch of Iranian oil since the waiver expired in May.The problem is Beijing's defiance is undermining the administration's efforts to drive Iranian exports to zero, the explicit goal of National Security Advisor John Bolton and the other Iran hawks. So here we are, with the Iran hawks and the trade hawks likely both in agreement, and President Trump likely resisting to avoid pissing off Xi and ending the talks. After all, Beijing is still waiting for concrete action from the US on Huawei. The internal debate also comes at a precarious moment for Iran. The Islamic Republic was just accused of trying to seize a UK oil tanker in retribution for the seizure of two tankers carrying Iranian crude. And the Islamic Republic's threats to enrich its growing uranium stockpile beyond the 20% threshold, taking it closer to weapons grade (though still far from the 90%+ needed to build a bomb), certainly aren't helping.

Risks aside, Trump's team sees China trade stance as strength in 2020 - (Reuters) - As trade talks resume between China and the United States, President Donald Trump’s advisers are confident he can portray his stance against Beijing as a strength in the 2020 election, despite making concessions and having no deal in sight. Trump and Chinese President Xi Jinping agreed in Japan last month to another truce in the year-long trade war between the world’s two largest economies, thanks largely to Trump’s promise not to impose new tariffs on Chinese goods and to ease restrictions on technology company Huawei Technologies Co Ltd. The agreement in Osaka kick-started talks that had been stalled since May. Chinese and U.S. negotiators spoke by phone on Tuesday and are discussing a face-to-face meeting in the future. But no deadline has been set for the process to conclude, leaving the possibility of a protracted negotiation that lasts well into next year and Trump’s re-election fight. “I think you’re into 2020 before there’s any resolution to this,” said Steve Bannon, Trump’s former chief White House strategist, who has advocated for a tough stance against Beijing. He applauded Trump’s decision to take new tariffs off the table and be flexible on Huawei because it got the talks between the two countries going again. “I think it will help him politically because it’s the reality of the world that we live in,” Bannon said.

Trump says India tariffs on American products are ‘no longer acceptable’ - President Donald Trump said Tuesday the U.S. needs to stand up to India on the trade front.  In a tweet, Trump said: “India has long had a field day putting Tariffs on American products. No longer acceptable!”  The iShares MSCI India ETF (INDA) ETF fell more than 1% in the premarket after the tweet was sent. It later recovered to trade along the flatline, however.Earlier this year, the Trump administration stripped India of a preferential status that exempted billions of dollars worth of products made there from U.S. levies. “I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets,” Trump said in a proclamation.India has tariffs on U.S. products such as Harley-Davidson motorcycles and U.S.-grown apples, among others. In June, Trump said India’s 50% levy on Harley-Davidson bikes was “unacceptable.” The latest escalation comes as the U.S. tries to broker a trade deal with China. U.S. officials are expected to meet with Chinese trade negotiators this week.

India-U.S. trade talks end without major progress: sources (Reuters) - U.S. and Indian trade negotiators ended talks on Friday without making major progress on a range of disputes over tariffs and other protectionist measures imposed by both sides that are straining bilateral ties, according to officials with knowledge of the discussions. Many of the toughest questions on agricultural commodities, e-commerce, and steel and aluminum, have been put off until Indian Commerce and Industry Minister Piyush Goyal goes to Washington for talks with United States Trade Representative Robert Lighthizer next month. The dates for that trip are yet to be settled. “No breakthrough,” said one of the senior Indian officials involved in the talks in New Delhi, which lasted a little over three hours. He declined to make any further comment. Two other Indian officials said they hoped that some of the issues will be resolved when Goyal goes to Washington. Friday’s talks were more about understanding each other’s positions in various disputes, they said. In a short statement issued late on Friday, the Indian government said the countries agreed to continue their discussions for “addressing mutual trade concerns”. The two sides resumed talks after U.S. President Donald Trump and Prime Minister Narendra Modi met on the sidelines of the G20 summit in June and agreed to seek to deepen the two countries’ relationship. Trump said at that summit that there would be a “very big trade deal” with India, though he set no timeline, and has only this week used Twitter to attack what he calls high Indian tariffs on American goods as “no longer acceptable”. The U.S. sought the rollback of Indian tariffs imposed on some agricultural products, such as almonds, when the two sides met on Friday, said one of the Indian government sources. Those tariffs were imposed in response to the Trump administration’s decision to remove trade privileges from Indian products under the Generalized System of Preferences. India has asked for those privileges, effectively zero tariffs on a range of Indian products entering the United States, to be reinstated.

Trade War Spurs Biggest De-Globalization Shift Since The Cold War - From an office in Tijuana, Mexico, Roberto Durazo has been capitalizing on one of the biggest shifts in global trade since the end of the cold war. His company, Ivemsa, has been helping dozens of companies move their factories out of China and other parts of Asia and into Mexico to make goods to be sold domestically and in the United States. Operating in what is known as the “shelter industry”, firms like Ivemsa help international companies operate in Mexico without having to maintain a legal entity. “We have talked to many companies from Asia who are interested in Mexico as a platform to manufacture and send their products north to the US – that's really where the market is,” Durazo said. “A lot of automakers are doing business here, for example Kia Motors from South Korea established a big facility in Mexico. And they moved at least 30 of their suppliers from Asia into Mexico. Their key suppliers followed them because if they don’t, they may lose the business.”This example illustrates a wider movement that predates the trade war between China and the US, but one which experts now say is irreversible. After decades in which globalization seemed to be an unstoppable force, the trade war is accelerating a complete transformation of global trade towards a more fragmented model, and Durazo is operating at ground zero. The post-1990 trend towards globalization was driven by the integration of cheap labor from emerging markets such as China, India and the former Soviet Union bloc nations into the world economy. This benefit was eroded as these low-cost hubs developed and their factory workers demanded better compensation. A McKinsey Global Institute study, released this year, found that “low skill labor is becoming less important as a factor of production. Contrary to popular perception, only about 18 percent of global goods trade is now driven by labor-cost arbitrage”. The political risks and financial costs of the trade war over the past year have only served to accentuate what some experts are calling a “balkanization” or “deglobalization” of supply chains, with companies seeking to produce closer to their consumer markets to avoid uncertainty in the changeable trading environment, as well as to mitigate the costs of tariffs. “Companies globally have been looking at a trend of regionalism. So you're getting investments into Eastern Europe to supply the [European Union], and investments going into Mexico to be close to the US,” At the same time, locations that were previously hotbeds of low-cost manufacturing are becoming vibrant consumer markets. As millions join the ranks of the middle classes in China, India and Southeast Asia, many companies are choosing to have localized supply chains to service them.

Some big farms collect big checks from Trump aid package - When President Trump’s administration announced a $12-billion aid package for farmers struggling under the financial strain of his trade war with China, the payments were capped. But many large farming operations had no trouble finding legal ways around them, records provided to the Associated Press under the Freedom of Information Act show. The government paid out nearly $2.8 million to a Missouri soybean-growing operation registered as three entities at the same address. More than $900,000 went to five other farm businesses — one each in Indiana, Illinois and Tennessee and two in Texas. Three other farming operations collected more than $800,000. Sixteen more collected more than $700,000. And the data list more than 3,000 recipients who collected more than the $125,000 cap. Recipients who spoke to the Associated Press defended the payouts, saying that the aid didn’t cover all their losses from the trade war and that they were legally entitled to the money. U.S. Department of Agriculture rules let farms file claims for multiple family members or other partners who meet the department’s definition of being “actively engaged in farming.” But critics including Sen. Charles Grassley, an Iowa Republican who has long fought for subsidy limits, say it’s the latest example of how loopholes in federal farm subsidy programs allow large farms to collect far more than the supposed caps on that aid. Grassley said in a statement that some of the nation’s largest farms are receiving huge subsidies “through underhanded legal tricks. They’re getting richer off the backs of taxpayers while young and beginning farmers are priced out of the profession. This needs to end. The Department of Agriculture needs to reevaluate its rules for awarding federal funds and conduct more thorough oversight of where it’s funneling taxpayer dollars.”

 Trump aide threatens one million immigrants with deportation - In appearances on two Sunday television interview programs, a top aide to President Trump on immigration issues said that Immigration and Customs Enforcement was preparing to deport all one million immigrants who have been issued final removal orders by federal immigration judges. Ken Cuccinelli, nominated by Trump to head the unit of the Department of Homeland Security (DHS) that handles refugee claims, appeared on both Fox News Sunday and the CBS program “Face the Nation” to represent administration policy on immigration. He was speaking after Trump told reporters Friday that the mass deportation campaign would begin “fairly soon.” The former Republican attorney-general of the state of Virginia, Cuccinelli is an immigration hard-liner in the mold of top White House aide Stephen Miller. Last month he suggested that the Salvadoran father who drowned in the Rio Grande, along with his 23-month-old daughter, was to blame for his own death for attempting the risky crossing after Customs and Border Protection agents would not allow him to file a claim for refugee status. Asked about Trump’s statement on June 22 that the administration was delaying mass raids by Immigration and Customs Enforcement (ICE) agents on immigrant neighborhoods by two weeks, Cuccinelli said the raids were being prepared. “At this point, it's been put in Matt Albence's hand, the acting director at ICE,” he said. “He’s a career ICE officer. He came up through the ranks. And they're ready to just perform their mission, which is to go and find and detain and then deport the approximately one million people who have final removal orders.” Asked about the figure of one million deportations, he said, “I am just pointing out that the pool of those with final removal orders is enormous.” He added, “Who among those will be targeted for this particular effort or not is really just information kept within ICE at this point.”

The Stuff of Nightmares: Inside the migrant detention center in Clint, Texas — Since the Border Patrol opened its station in Clint, Tex., in 2013, it was a fixture in this West Texas farm town. Most people around Clint had little idea of what went on inside. Agents came and went in pickup trucks; buses pulled into the gates with the occasional load of children apprehended at the border, four miles south. But inside the secretive site that is now on the front lines of the southwest border crisis, the men and women who work there were grappling with the stuff of nightmares. Outbreaks of scabies, shingles and chickenpox were spreading among the hundreds of children who were being held in cramped cells, agents said. The stench of the children’s dirty clothing was so strong it spread to the agents’ own clothing — people in town would scrunch their noses when they left work. The children cried constantly. One girl seemed likely enough to try to kill herself that the agents made her sleep on a cot in front of them, so they could watch her as they were processing new arrivals.“It gets to a point where you start to become a robot,” said a veteran Border Patrol agent who has worked at the Clint station since it was built. He described following orders to take beds away from children to make more space in holding cells, part of a daily routine that he said had become “heartbreaking.” The little-known Border Patrol facility at Clint has suddenly become the public face of the chaos on America’s southern border, after immigration lawyers began reporting on the children they saw — some of them as young as 5 months old — and the filthy, overcrowded conditions in which they were being held.

Pence views overcrowded, bad-smelling facility for detained migrants in Texas - (Reuters) - Vice President Mike Pence viewed an overcrowded, foul-smelling facility in Texas on Friday where nearly 400 men are detained after being accused of crossing the U.S. border illegally. Some 384 single men were corralled behind metal fences inside the sweltering facility in McAllen, according to a pool reporter on the scene. The men did not have mats or pillows and some were sleeping on concrete. The cages were so crowded, according to the reporter, that it would have been impossible for all the men to lie down at the same time. Some of the men said that they had been there for 40 days or longer, were hungry, and wanted to brush their teeth. Some agents guarding the cages wore face masks. Water was available outside the fences, the pool reporter said, citing agents who said the men had access to the water when journalists were not present. After visiting the facility, Pence said at a news conference that he was not surprised by what he saw. “I knew we’d see a system that was overwhelmed,” Pence told reporters. “This is tough stuff.” A patrol agent, Michael Banks, said the men were allowed to brush their teeth once a day. “We currently have 88,000 toothbrushes,” he said. Many of the men had not showered for 10 to 20 days because the facility did not previously have showers, according to Banks, who said it now had a trailer shower.  The men were given three hot meals a day from local restaurants but could not have cots for sleeping because there was not enough room for them.

ICE Just Quietly Opened Three New Detention Centers, Flouting Congress’ Limits  -  Mother Jones has learned that ICE has started using three new for-profit immigration detention centers in the Deep South in recent weeks. One of them has seen the death of three inmates following poor medical treatment and a violent riot in 2012 that left a guard dead. Interviews with lawyers and prison officials and ICE records reveal that the agency has begun detaining migrants at the Adams County Correctional Center, a Mississippi prison operated by CoreCivic; the Catahoula Correctional Center, a Louisiana jail run by LaSalle Corrections; and the South Louisiana ICE Processing Center, run by GEO Group in Basile, Louisiana. ICE has not previously disclosed its use of the Adams County and Catahoula centers, though GEO Group did announce in April that ICE would soon begin using the Basile facility. On Tuesday, ICE spokesman Bryan Cox confirmed that all three facilities started housing ICE detainees late last month. Together, the three detention centers can hold about 4,000 people, potentially expanding ICE’s presence in Louisiana and Mississippi by 50 percent. Conditions at the Adams County prison have been particularly bad. Complaints by inmates there about inadequate medical care, staff mistreatment, and rotten food contributed to a 2012 riot that left one guard dead and more than a dozen people injured. The Justice Department announced in May that it would stop using the prison. ICE has decided to fill that void. ICE had the capacity to detain only about 2,000 people in Louisiana and Mississippi at the start of Donald Trump’s presidency. But contracts signed with private prison companies in the past year have pushed ICE’s capacity in those states above 10,000 people. The horrifying conditions uncovered by Mother Jones at the Winn Correctional Center in Louisiana and by The Nation at Adams County helped push Barack Obama’s Justice Department to move to end its use of private prisons. Since June, ICE has started sending asylum seekers to both of those prisons. Concentrating asylum seekers in Southern states makes it particularly likely that they will lose their cases because of the region’s harsh judges and shortage of immigration lawyers. There are not enough judges in Louisiana to hear the new cases, and there are no immigration courts in Mississippi. As a result, many of these new asylum seekers will be forced to represent themselves in video hearings with out-of-state judges. (The Southern Poverty Law Center and American Civil Liberties Union of Louisiana are suing ICE to try to force it to release more asylum seekers from detention in Louisiana and other Southern states.)

Migrant kids in overcrowded Arizona border station allege sex assault, retaliation from U.S. agents— The poor treatment of migrant children at the hands of U.S. border agents in recent months extends beyond Texas to include allegations of sexual assault and retaliation for protests, according to dozens of accounts by children held in Arizona collected by government case managers and obtained by NBC News. A 16-year-old Guatemalan boy held in Yuma, Arizona, said he and others in his cell complained about the taste of the water and the food they were given. The Customs and Border Protection agents took the mats out of their cell in retaliation, forcing them to sleep on hard concrete. A 15-year-old girl from Honduras described a large, bearded officer putting his hands inside her bra, pulling down her underwear and groping her as part of what was meant to be a routine pat-down in front of other immigrants and officers. The girl said "she felt embarrassed as the officer was speaking in English to other officers and laughing" during the entire process, according to a report of her account. A 17-year-old boy from Honduras said officers would scold detained children when they would get close to a window, and would sometimes call them "puto," an offensive term in Spanish, while they were giving orders. Earlier reports from investigators for the Department of Homeland Security's Office of the Inspector General from the El Paso and Rio Grande Valley sectors in Texas detailed horrific conditions for children and other migrants held in overcrowded border stations where they were not given showers, a clean change of clothes or the space to sleep. The reports from the Yuma CBP sector describe similar unsanitary and crowded conditions but go further by alleging abuse and other misconduct by CBP officers.In a statement about the Yuma allegations, a CBP spokesperson said, "U.S. Customs and Border Protection treats those in our custody with dignity and respect and provides multiple avenues to report any allegations of misconduct. ... The allegations do not align with common practice at our facilities and will be fully investigated. It’s important to note that the allegation of sexual assault is already under investigation by the Department of Homeland Security’s Office of Inspector General."

Warren pledges to create commission to investigate 'crimes committed by the United States against immigrants' - Sen. Elizabeth Warren (D-Mass.) said Saturday that she will create a commission to investigate "crimes committed by the United States against immigrants" if she is elected president. “On my first day, I will empower a commission in the Department of Justice to investigate crimes committed by the United States against immigrants,” she said at the progressive Netroots Nation conference. Warren accused President Trump of looking the other way at abuse, but said she will not do so. “To anyone out there who’s working in this system, understand you abuse immigrants, you physically abuse immigrants, you sexually abuse immigrants, you fail to get them medical care that they need, you break the law of the United States of America and Donald Trump may be willing to look the other way, but President Elizabeth Warren will not,” she said. She also said that we need to treat those who come to the U.S. "with humanity and we need to follow the law." Warren this week unveiled her immigration plan which included designating a Justice Department task force to investigate accusations of medical neglect and physical and sexual assault and "give it independent authority to pursue any substantiated criminal allegations." "Let there be no ambiguity on this: if you are violating the basic rights of immigrants, now or in the future, a Warren administration will hold you accountable," she wrote in a Medium post.

Democratic Chicago Mayor Bans ICE From City Police Databases Ahead Of Planned Raids - The mayor of Chicago, Lori Lightfoot, said that the city was to ban ICE from accessing police databases in the city, according to Breitbart.The news comes after reports of potential raids set to take place in more than 10 U.S. cities on Sunday.   The mayor said about the city's police: "They will not team up with ICE to detain any resident. We have also cut off ICE access from any CPD databases and that will remain permanent. Chicago is and will always be a welcoming city that will never tolerate ICE tearing our families apart." Police spokesman Anthony Guglielmi confirmed that the city's Citizen and Law Enforcement Analysis and Reporting database will not be available to ICE officials.  He stated: “All other federal agencies still have access to these systems, as sharing this information is crucial to active criminal investigations in which we are partnering with federal agencies along with intelligence sharing functions that are vital to national homeland security functions.”

 Tucker Carlson: Omar 'living proof' US immigration laws are 'dangerous' -  Fox News host Tucker Carlson on Tuesday night launched an attack on Rep. Ilhan Omar, who came to the U.S. as a refugee from Somalia, saying the outspoken progressive is “living proof” that U.S. immigration laws are “dangerous.” “Omar isn’t disappointed in America. She’s enraged by it,” Carlson said, citing Omar’s discussions about various forms of discrimination in the U.S. “That should worry you, and not just because Omar is a sitting member of Congress. Ilhan Omar is living proof that the way we practice immigration has become dangerous to this country.”Carlson went on to say that Omar, who moved to the U.S. as a child after living in a Kenyan refugee camp, shows that immigration laws are “undermining” America. “Maybe that is our fault for asking too little of our immigrants. We aren’t self-confident enough to make them assimilate so they never feel fully American. Or maybe the problem is deeper than that. Maybe we are importing people from places whose values are simply antithetical to ours. Who knows what the problem is but there is a problem and whatever that cause this cannot continue. It’s not sustainable,” Carlson said.  “No country can import large numbers of people who hate it and expect to survive. The Romans were the last to try that with predictable results. So be grateful for Ilhan Omar, annoying as she is. She’s a living fire alarm, a warning to the rest of us.”

Civil Rights Groups Have Been Warning Facebook About Hate Speech In Secret Groups For Years — Facebook says its standards apply just as much in private groups as public posts, prohibiting most slurs and threats based on national origin, sex, race and immigration status.  But dozens of hateful posts in a secret Facebook group for current and former Border Patrol agents raise questions about how well if at all the company is policing disturbing postings and comments made outside of public view.  Many of the posts ProPublica obtained from the 9,500-member “I’m 10-15” group (10-15 is Border Patrol code for “alien in custody”) include violent or dehumanizing speech that appears to violate Facebook’s standards. For example, a thread of comments before a visit to a troubled Border Patrol facility in Texas by Democratic Reps. Alexandria Ocasio-Cortez, of New York, and Veronica Escobar, of Texas, included “fuck the hoes” and “No mames [fist].” Another post encouraged Border Patrol agents to respond to the Latina lawmakers visit by hurling a “burrito at these bitches.” And yet another mocked a video of a migrant man trying to carry a child through a rushing river in a plastic bag. A commenter joked, “At least it’s already in a trash bag” — all probable violations of the rules.  Facebook, citing an open federal investigation into the group’s activities, declined to answer questions about whether any posts in the 10-15 group violated its terms of service or had been removed, or whether the company had begun scrutinizing the group’s postings since ProPublica’s story was published. It also refused to say whether it had previously flagged posts by group members or had received complaints.

Marines arrested for smuggling illegal immigrants near southern border Two Marines were busted last week in California for allegedly smuggling a trio of illegal immigrants near the US-Mexico border. Marines Bryon Darnell Law II and David Javier Salazar-Quintero were caught about 10 a.m. last Wednesday by a US Border Patrol agent while driving three illegal immigrants on Interstate 8 in Jacumba Hot Springs — seven miles north of the border, according to court documents filed last Friday in the US District Court for the Southern District of California. The three passengers admitted to authorities that they were Mexican citizens in the country illegally — and had been picked up from the side of the road by a black car driven by Law. Two of the three immigrants said they planned to fork over $8,000 to get into the US. They expected to settle in Los Angeles and New Jersey, court documents say. Law and Salazar-Quintero, who are stationed at Camp Pendleton in California, said they also picked up another illegal immigrant near the same place about 10:30 p.m. last Tuesday. They drove the man to a McDonald’s parking lot in Del Mar, where he was picked up by somebody else. After being caught, the Marines blamed each other for initiating the smuggling.

Pelosi: Census citizenship question is effort to ‘make America white again’ - Speaker Nancy Pelosi (D-Calif.) argued Monday that President Trump's push to include a citizenship question on the 2020 census is an effort to "make America white again" in an adaptation of his campaign slogan. "This is about keeping — you know his hat — make America white again," Pelosi said at an event in San Francisco about election security legislation, referring to the red "Make America Great Again" hats that are popular among Trump supporters. Pelosi, like other critics of adding the citizenship question to the 2020 census, argued that it could result in racial minorities being undercounted so that legislative maps can be drawn more favorably for Republicans. "They want to make sure that people, certain people, are counted. It's really disgraceful. And it's not what our founders had in mind," Pelosi said. "What they want to do is put a chilling effect so certain populations will not answer the form." President Trump told reporters late last week that he is considering an executive order to ensure the citizenship question is included on the census after the Supreme Court blocked the effort in a ruling last month. The Supreme Court ruled 5-4 that the Trump administration's argument that the citizenship question is needed to enforce a federal voting rights law didn't hold up to the evidence provided in the case. The court said that the Trump administration would have to offer a different legal justification for adding the question.

Majority Of Americans Want Citizenship Question Included On 2020 Census -  If President Trump follows through on his threats to issue an executive order to try and force the 'citizenship question' on to the 2020 census, a majority of Americans would have his back. The latest Economist-YouGov poll found that 53% of Americans feel the census should include a question asking respondents whether or not they are citizens. Only 32% said they would oppose including such a question. Another 14% said they weren't sure how to answer. This was how the question from the Economist-YouGov poll was worded: "Do you think the federal government should, or should not, ask people whether they are American citizens as part of the 2020 census?" The Supreme Court rejected including the question - or at least the way the Trump Administration would have worded it - on the 2020 census, but left the door open to another version, which Trump is reportedly considering, as the president revealed in a tweet last week. The News Reports about the Department of Commerce dropping its quest to put the Citizenship Question on the Census is incorrect or, to state it differently, FAKE! We are absolutely moving forward, as we must, because of the importance of the answer to this question. — Donald J. Trump (@realDonaldTrump) July 3, 2019 Legal expert and George Washington University Law professor John Banzhaf told the Washington Examiner that what Trump is suggesting in the tweet above could absolutely be accomplished.

 Trump abandons fight to put citizenship question on census, says data can come from existing records - President Donald Trump on Thursday dropped a fight to put a citizenship question on the upcoming 2020 census — but ordered federal agencies to give the Commerce Department all records requested that could detail how many citizens and non-citizens live in the United States. Trump did not, as had he had been expected earlier in the day, order the question to be asked on the census. Attorney General William Barr said at a press conference that the question will not be asked on the census, acknowledging that a recent Supreme Court ruling had made doing so difficult, if not impossible. “We’re not going to jeopardize our ability to carry out the census,” Barr said. Trump defended his original plan to have the question asked, and claimed that his order directing agencies to share citizenship data would make the actual count of non-citizen “far more accurate” than it would have been if the question was on the census. But Dale Ho, director of the ACLU’s Voting Rights Project, who argued the Supreme Court case challenging the citizenship question, said afterward: “Trump’s attempt to weaponize the census ends not with a bang but a whimper.” “He lost in the Supreme Court, which saw through his lie about needing the question for the Voting Rights Act,” Ho said. “It is clear he simply wanted to sow fear in immigrant communities and turbocharge Republican gerrymandering efforts by diluting the political influence of Latino communities.” Ho added: “Now he’s backing down and taking the option that he rejected more than a year ago. Trump may claim victory today, but this is nothing short of a total, humiliating defeat for him and his administration.”

Americans Shocked to Find their Rights Literally Vanish at U.S. Airports - If you’re traveling outside the United States this summer you might want to rethink taking your electronics along. Government agents have been detaining American citizens without arrest, searching, and in some cases downloading the entire contents of phones, tablets, laptops, and other devices. And this all happens without a warrant or access to an attorney. “The border has become a rights-free zone for Americans who have to travel,” Senator Ron Wyden said in a statement to TAC. “The founders never could have imagined that the government would be able to sift through your entire digital life, from pictures to emails and even where you’ve been, just because you decide to take a vacation or travel for work.” Border searches of electronic devices have exploded at an exponential rate in recent years: in 2018, U.S. Customs and Border Protection (CBP) searched over 33,295 smartphones, laptops, and other electronic devices; up nine percent from fiscal year 2017 and over six times the number searched in 2012. And that’s just the statistics from CBP; Immigration and Customs Enforcement (ICE) does not maintain records of the number of electronic device searches it conducts. “The government is accessing all your private data,” Sophia Cope, senior staff attorney with the Electronic Frontier Foundation (EFF), told TAC. These “deeply intrusive” searches of electronic devices “reveal a lot about you: your emails, contacts, bank history, internet searches, medical history, social media usage, and political beliefs.”   The “border is not a Constitution-free zone,” said Cope. But right now, it’s essentially functioning as one, as laws that protect Americans privacy are being run over roughshod by agents at the border.  In a unanimous decision in 2014, the Supreme Court ruled that when a person has been arrested, law enforcement need a warrant to search their electronic devices. But government agents at the border assert that they can search anyone’s device, at any time, for any reason, or for no reason at all. CBP has largely been operatingunder its own rules; they say they do not need a warrant, or even probable cause, to conduct this digital invasion because of the “border search exception” to the Fourth Amendment’s requirement for probable cause or a warrant. A lawsuit brought by EFF and the American Civil Liberties Union (ACLU) argues that these searches are in violation of the First and Fourth Amendments of the U.S. Constitution.

FBI, ICE Using Facial Recognition To Bulk-Scan DMV Photos In "Unprecedented Surveillance Infrastructure" - The Federal Bureau of Investigation (FBI) along with Immigration and Customs Enforcement (ICE) has been using state driver's license databases to run photos of millions of Americans through facial-recognition systems without their knowledge or consent, according to the Washington PostThousands of facial-recognition requests, internal documents and emails over the past five years, obtained through public-records requests by Georgetown Law researchers and provided to The Washington Post, reveal that federal investigators have turned state departments of motor vehicles databases into the bedrock of an unprecedented surveillance infrastructure.Police have long had access to fingerprints, DNA and other “biometric data” taken from criminal suspects. But the DMV records contain the photos of a vast majority of a state’s residents, most of whom have never been charged with a crime. -Washington PostDisturbingly, neither Congress nor state legislatures have authorized this type of system, and none of us agreed to it when we obtained licenses. "They’ve just given access to that to the FBI," said Rep. Jim Jordan, ranking GOP member of the House Oversight Committee. "No individual signed off on that when they renewed their driver’s license, got their driver’s licenses. They didn’t sign any waiver saying, ‘Oh, it’s okay to turn my information, my photo, over to the FBI.’ No elected officials voted for that to happen."  "Law enforcement’s access of state databases," and in particular those of the DMV, is "often done in the shadows with no consent,"

Alexandria Ocasio-Cortez suggests dissolving Department Homeland Security - As Democrats continue to decry the Trump administration's strict immigration policies, calling for agencies like the U.S. Immigration and Customs Enforcement (ICE) to be disbanded, freshman Congresswoman Alexandria Ocasio-Cortez is going one step further, suggesting that the Department of Homeland Security should be broken up. During an interview with The New Yorker Radio Hour's David Remnick, Ocasio-Cortez appeared to blame the Bush administration for initially forming the agency back in 2002 in the wake of the terrorist attacks on September 11th. "I feel like we are, at a very, it's a very qualified and supported position, at least in terms of evidence, and in terms of being able to make the argument that we never should've created DHS in the early 2000s," said Ocasio-Cortez. She went on to say that she supported abolishing ICE, a common rallying cry among House Democrats. "Would you get rid of the Department of Homeland Security, too?" Remnick asked. "I think so," she replied. "I think we need to undo a lot of the egregious mistakes that the Bush administration did." Ocasio-Cortez cited her recent visit to a border detention facility in El Paso, Texas as grounds for disbanding the agency. She described the conditions in the facility as "horrible" and said she witnessed "some of the most inhumane behavior."

Rough total for Trump's July Fourth extravaganza: $5.4 million - President Donald Trump’s July Fourth extravaganza — featuring tanks, a military flyover, and a Trump speech at the Lincoln Memorial — cost an estimated $5.4 million, according to rough figures Thursday. Interior Secretary David Bernhardt provided the latest share of costs, $2.45 million for his agency, in a letter to lawmakers, saying his agency pulled money from operating funds for national parks, recreation fees, and another source to help fund Trump’s Salute to America. The event included donated fireworks, a military flyover, and Trump’s speech to a rained-on crowd at the Lincoln Memorial. Trump announced Monday he would do it all again next year , calling the event “remarkable.” Democratic lawmakers have condemned the extra expenditures for the Independence Day celebration, which came in addition to the traditional concert, fireworks and events held at near the U.S. Capitol. Arizona Democratic Rep. Raul Grijalva, chairman of the House Natural Resources Committee and one of several Democrats who had demanded a full cost accounting, said in response to Interior’s funding estimates that the public funds were spent to “celebrate President Trump.” Bernhardt called the use of public funds justified, and cited past administrations’ spending for concerts, parades and other celebrations in and around the National Mall. Interior’s costs included crowd accommodations such as temporary fencing and portable toilets. In addition, the Department of Defense says its costs came to $1.2 million. Despite repeated requests, the Pentagon as of Thursday refused to provide a precise breakdown. 

Judge rules against Trump on drug pricing disclosures -  A federal judge on Monday sided with a coalition of drug companies and blocked the Trump administration from implementing a policy that would require prescription drug manufacturers to disclose list prices in TV ads.The pharmaceutical companies — Amgen, Merck, and Eli Lilly — werejoined in the lawsuit by the Association of National Advertisers. The rule was scheduled to take effect Tuesday. U.S. District Court Judge Amit P. Mehta in Washington, D.C., agreed with the drug companies that the Department of Health and Human Services (HHS) does not have the authority to compel drug companies to disclose prices. “To be clear, the court does not question HHS’s motives in adopting the [rule],” Mehta wrote. “Nor does it take any view on the wisdom of requiring drug companies to disclose prices. That policy very well could be an effective tool in halting the rising cost of prescription drugs. But no matter how vexing the problem of spiraling drug costs may be, HHS cannot do more than what Congress has authorized. The responsibility rests with Congress to act in the first instance.”Under the rule, which was announced by HHS Secretary Alex Azar in May, drug manufacturers would have to state the list price of a 30-day supply of any drug that is covered through Medicare and Medicaid and costs at least $35 a month.Azar argued that forcing drugmakers to disclose their prices in direct-to-consumer TV advertising could shame companies into lowering their prices. In announcing the rule, Azar said there’s no reason patients should be kept in the dark about the full prices of the products they’re being sold.“Patients have a right to know, and if you’re ashamed of your drug prices, change your drug prices. It’s that simple,” Azar said in May when the administration announced the final rule. Drug companies fought the rule from the start, arguing it would confuse consumers because a drug’s list price — which doesn't reflect the discounts negotiated with insurers or through patient assistance programs — is often higher than what the patient actually pays.

Majority Backs ‘Medicare for All’ Replacing Private Plans, if Preferred Providers Stay - Though the dividing line between Democratic presidential candidates on “Medicare for All” concerns the elimination of the private insurance market, new Morning Consult data suggests that anxiety among voters may be misplaced fear about losing their providers rather than their private plans.According to a Morning Consult/Politico survey conducted after the first Democratic presidential primary debates, support among voters for Medicare for All falls to 46 percent from 53 percent when respondents are told the government-run health system would diminish the role of private insurers — but rises back to 55 percent when voters learn that losing their private plans would still allow them to keep their preferred doctors and hospitals. “These numbers only affirm what the senator has said many times: people don’t like insurance companies, they like their doctors and their hospitals,” Sanders’ campaign said of the data in an email to Morning Consult. “Despite what the pharmaceutical and insurance industries will tell you, Medicare for All is the only proposal that gives Americans the freedom to control their own futures — change jobs, start a family, start a business  — and keep their doctor.”Several polls have demonstrated that support for Medicare for All plummets when Americans learn the system would replace employer-sponsored coverage with one sweeping plan, forcing single-payer supporters to go on the defensive to alleviate concerns from voters. But as candidates attempt to persuade voters that Medicare for All would not require diminishing the role of private insurers — further adding to confusion among the electorate about what exactly the system would entail — the new data suggests that the consequences of that argument can be mitigated by clarifying that losing private insurers would not affect access to preferred providers.

The Medicare drug price proposal you’re not hearing about - A July 10 STAT article began: A trio of key White House advisers on Tuesday hinted for the first time that they could support a progressive proposal to cap price increases for certain medicines, speaking at a closed-door Capitol Hill briefing of Republican senators. That trio includes HHS Secretary Alex Azar and Domestic Policy Council Director Joe Grogan. The proposal, offered by Senator Wyden according to STAT, would cap Medicare drug price growth to that of the Consumer Price Index.  This is intriguing! I’d love to know more, but there is “an agreement with [Senate Finance Committee Chairman Chuck] Grassley not to divulge details to reporters before negotiations are complete.” Phooey!  A July 9 article in The Hill included that  Drug companies would have to pay money back to Medicare if their prices rose too quickly. And, Some GOP senators say that approach is akin to price controls, which are anathema to many Republicans. This is exactly the kind of pushback I’d expect, but it is not a good argument. The government, in regulating drug manufacturers, granting monopolies, and subsidizing drug coverage, is aleady in the price and market control (or support!) business.  Former FDA Commissioner Scott Gottlieb (now a member of Pfizer’s board of directors) reacted to the Hill article in a Twitter thread: Thread: In near term, this could actually be *inflationary* as, right now, overall net drug price increases have fallen below CPI for first time. This could lock in CPI WAC price increases across entire portfolios. CPI could be automatic floor and ceiling  — Scott Gottlieb, MD (@ScottGottliebMD) July 9, 2019   Forbes’ Avik Roy disagreed with Gottlieb on Twitter. Last month, Roy wrote a piece that touched on the idea.  Congress should require that drug companies selling drugs into Part D rebate any price increases above consumer inflation to Medicare, to offset the program’s taxpayer-funded subsidies.  The above is all I’m aware of about the Medicare drug price growth cap proposal. It seems like an idea that deserves more discussion, no?  @afrakt

US lawmakers look to legalize pot in ‘historic’ marijuana reform hearing - U.S. lawmakers weighed reforming pot laws in what advocates called a “historic” hearing Wednesday, with numerous members of Congress saying they wanted to loosen federal laws, even legalize marijuana. “Marijuana decriminalization may be one of the very few issues upon which bipartisan agreement can still be reached in this session,” said Rep. Tom McClintock, R-Calif., adding “it ought to be crystal clear to everyone that our laws have not accomplished their goals.” Eleven states have legalized adult recreational use and a majority of Americans support legalization. A number of bills are on the table that would reform federal marijuana laws. The House Judiciary Subcommittee on Crime, Terrorism and Homeland Security sought input on how to reform federal laws in a hearing Wednesday titled “Marijuana Laws in America: Racial Justice and the Need for Reform.” “There is a growing consensus in this country that current marijuana laws are not appropriate and we must consider reform,” said Rep. Karen Bass, D-Calif. “Today’s hearing is a first step in that process.” Despite the optimism, lawmakers did not appear to have a clear consensus on the best approach, such as whether to give states the right to legalize on their own, remove marijuana from schedule 1 of the Controlled Substances Act, legalize it or include promote social and racial equity in marijuana laws. The STATES Act is among the most popular cannabis bills. It would amend the Controlled Substances Act and exempts state-approved marijuana activity from federal enforcement. Proponents say the legislation would eliminate federal concerns in states where marijuana is legal. Yet some say the bill does not go far enough because it does not address any racial or social concerns. “We need to reinvest in those individuals and those communities that have been disproportionately impacted [by marijuana prohibition],” Baltimore State’s Attorney Marilyn Mosby told the committee. “The STATES Act does not do that, and that’s one of the reasons why I’m opposed to it.”

Amazon asks FCC to greenlight its internet satellite plan -- Amazon has taken another step toward providing global broadband internet from space through its Project Kuiper. The company filed paperwork with the US government to launch the thousands of satellites needed for the plan.Amazon submitted its application with the FCC for Project Kuiper on July 4.  The internet heavyweight asked the commission for permission to "launch and operate a non-geostationary satellite orbit system using Ka−band frequencies." Satellites will orbit 366 to 391 miles above Earth. "Submitting to the FCC is the first step – next, the FCC will thoroughly review our application and we look forward to working with them throughout this process," an Amazon spokesperson said in an email Monday. Project Kuiper will use 3,236 low Earth orbit satellites to provide broadband internet globally. "The Kuiper System will deliver satellite broadband communications services to tens of millions of unserved and underserved consumers and businesses in the United States and around the globe," the company said in the filing.Meanwhile, Starlink is the SpaceX plan to provide broadband access across the world from space, and the company launched its first batch of satellites back in May. Billionaire Richard Branson started this race when his companyOneWeb launched satellites for his own high-speed internet space project back in February.

As NASA Aims For The Moon, An Aging Space Station Faces An Uncertain Future  - It has now been more than 18 years that the station has been continuously occupied by people. The place is impressive, with more living space than a six-bedroom house and with two bathrooms and a large bay window for looking down at Earth. NASA and its international partners have spent decades and more than $100 billion to make the station a reality. The trouble is, as the agency sets its sights on returning people to the moon, the aging station has become a financial burden. And it's not clear what its future holds. NASA spends between $3 billion and $4 billion a year operating the station and flying people back and forth. That's about half the agency's budget for human exploration of space. The United States and other participating nations have pledged to fund the space station until at least 2024, but it will surely last longer than that. Gilles Leclerc, head of space exploration at the Canadian Space Agency, says there's no way that the international partners would come together in five years and decide to just crash the station into the ocean so that resources could be directed to other space goals. "It would be a waste. We cannot ditch the International Space Station. There's just too much invested," Leclerc says. "It's quite clear, it's unanimous between the partners that we continue to need a space station in low Earth orbit."So NASA has floated one money-saving idea: Turn the space station over to the private sector. That's why, a few weeks ago, NASA officials held a big press event at the Nasdaq stock market's MarketSite in New York City. "NASA is opening the International Space Station to commercial opportunities and marketing these opportunities as we've never done before," said the agency's chief financial officer, Jeff DeWit. "The commercialization of low Earth orbit will enable NASA to focus resources to land the first woman and next man on the moon by 2024, as the first phase in creating a sustainable lunar presence to prepare for future missions to Mars."

Nancy Pelosi Has Chosen Her War, and it’s With Her Own Party’s Future - From climate change to student debt to migrants in detention, progressive House Democrats Alexandria Ocasio-Cortez, Ilhan Omar, Rashida Tlaib, and Ayanna Pressley have been energetic and outspoken since getting elected last November — and, as a result, have become inured to constant attacks from congressional Republicans and, of course, Fox News. But how about from their own boss? In an interview with the New York Times’ Maureen Dowd, House Speaker Nancy Pelosi dismissed the Squad as “four people” who have their “public whatever and their Twitter world” but don’t “have any following.”  Ouch. This isn’t the first time Pelosi has trolled the left-wing quartet. In April, when she was asked by Lesley Stahl on “60 Minutes” to comment on the newly emboldened progressive wing of her party, Pelosi responded: “That’s like five people.” In the wake of November’s midterms, Pelosi mocked calls from AOC and her allies for a Green New Deal: “The green dream or whatever they call it, nobody knows what it is, but they’re for it right?” To be clear: None of these freshmen Democrats have personally attacked Pelosi, and all four of them backed her bid for the speakership. As CNN’s Nathan McDermott tweeted, “It is pretty notable that the most vocally anti-Pelosi Democrats (ala the moderates in swing districts who opposed her leadership) don’t get as much criticism from her as the left-wing of the party.”  Pelosi is willing to criticize Trump — “I’ve never encountered, thought about, seen within the realm of my experiences as a child or an adult, anybody like this” — but only criticize. Nothing more. Not impeachment, that’s for sure. The top Democrat in the House told Dowd that the president has engaged in criminal behavior but — wait for it — “you can’t impeach everybody.”

'Do not tweet': Pelosi scolds progressives in closed-door meeting - Speaker Nancy Pelosi chided progressives in a closed-door meeting Wednesday, calling on them to address their intraparty grievances privately rather than blasting their centrist colleagues on Twitter. Pelosi’s comments, which were described as stern, came during the first full caucus meeting since a major blowup over emergency border funding last month between progressive and moderate lawmakers as well as a recent spat with Rep. Alexandria Ocasio-Cortez (D-N.Y.) and her freshman allies. "So, again, you got a complaint? You come and talk to me about it," Pelosi told Democrats, according to a source in the room. "But do not tweet about our members and expect us to think that that is just OK." Democrats in the room said they interpreted that remark, in part, as a shot at Rep. Mark Pocan of Wisconsin and co-chair of the Congressional Progressive Caucus, who called moderate Democrats members of the “Child Abuse Caucus” in a tweet over their support for the Senate’s version of the emergency humanitarian package. But a Pelosi spokesman said the speaker’s comments were about the use of Twitter in general and not targeted at any individual member.

Ocasio-Cortez accuses Pelosi of 'persistent singling out' of women of color: It's 'outright disrespectful' -  Rep. Alexandria Ocasio-Cortez (D-N.Y.) accused Speaker Nancy Pelosi (D-Calif.) of repeatedly singling out newly elected women of color in the House, saying that the veteran congresswoman's criticism has become "outright disrespectful." Ocasio-Cortez made the remarks in an interview with The Washington Post late Wednesday after a day of heightened tensions between Pelosi and House Democrats. “When these comments first started, I kind of thought that she was keeping the progressive flank at more of an arm’s distance in order to protect more moderate members, which I understood,” Ocasio-Cortez told the Post. “But the persistent singling out … it got to a point where it was just outright disrespectful … the explicit singling out of newly elected women of color,” she added. The remarks came hours after Pelosi, at a closed-door meeting of the caucus earlier Wednesday, admonished her party for openly attacking one another over policy disputes. Pelosi has consistently dismissed some of the policies floated by the more liberal members of the caucus, most recently using a New York Times interview over the weekend to question the influence of four outspoken freshmen known as “the squad” — Reps. Ilhan Omar (D-Minn.), Rashida Tlaib (D-Mich.) Ayanna Pressley (D-Mass.) and Ocasio-Cortez. “All these people have their public whatever and their Twitter world,” she said to The New York Times. “But they didn’t have any following. They’re four people and that’s how many votes they got.” Ocasio-Cortez, who has been outspoken on a bevy of issues since being sworn in, responded to the comment on Twitter on Saturday, saying, "That public 'whatever' is called public sentiment." "And wielding the power to shift it is how we actually achieve meaningful change in this country," she added. In a closed-door caucus meeting Wednesday, Pelosi called on Democrats to stop taking public shots at one another, according to a source in the room. “You got a complaint? You come and talk to me about it. But do not tweet about our members and expect us to think that that is just OK,” Pelosi said. 

Pelosi Says She's Done Talking With AOC Squad  - Nancy Pelosi is subjecting insubordinate Congresswoman Alexandria Ocasio-Ortez to the 'Trump treatment'. After AOC again attacked her in an interview with the Washington Post, Pelosi said during her regular press briefing on Wednesday that she is done talking in public about the New York City Congresswoman and her 'girl gang' of POC progressive lawmakers, the Hill reported. Pelosi said she'd said what she wanted to say at a closed door caucus meeting, where she asked those in attendance to avoid attacking other party members with whom they don't agree. The speaker shrugged off any offense that AOC, or the three other members of her 'squad', might have taken (for the record: that includes Massachusetts Rep. Ayanna Pressley, Michigan's Rashida Tlaib and Minnesota's Ilhan Omar.Part of the impetus for Pelosi's admonishment was a comment from AOC's chief of staff comparing New Dems and Blue Dogs to pro-segregationist Southern Democrats. "They took offense because I addressed, at the request of my members, an offensive tweet that came out of one of the members' offices that referenced our Blue Dogs and our New Dems essentially as segregationists," Pelosi said. "Our members took offense at that. I addressed that. How they're interpreting and carrying it to another place is up to the."  “But I'm not going to be discussing it any further," Pelosi said. "I said what I'm going to say."

Two Republicans sue Ocasio-Cortez over Twitter blocks - Two New York Republicans announced this week that they are suing Rep. Alexandria Ocasio-Cortez (D-N.Y.) over being blocked from her personal Twitter account. Former state assemblyman Dov Hikind and congressional candidate Joseph Saladino, who is running in a Republican primary for the chance to battle Rep. Max Rose (D-N.Y.), announced lawsuits this week against the freshman Democratic congresswoman, seeking injunctive relief in the form of a court order demanding they be unblocked. Saladino announced in a press release that he had filed suit in the Southern District of New York, while Hikind told Fox News that he had filed his claim in the state's Eastern District. "I have officially filed my lawsuit against AOC for blocking me on twitter," Saladino tweeted. "Trump is not allowed to block people, will the standards apply equally? Stay tuned to find out!"

Appeals court dismisses Emoluments Clause lawsuit in win for Trump -- The 4th U.S. Circuit Court of Appeals on Wednesday dismissed a lawsuit filed by Maryland and the District of Columbia alleging that President Trump is violating the Emoluments Clause of the Constitution, finding that they did not have the standing to sue the president. The ruling is a major win for Trump, who has frequently sought to prevent others from reviewing his private financial records. And it's a sign that other lawsuits alleging similar violations of the Emoluments Clause — including one brought by more than 200 Democratic members of Congress — will face an uphill battle in succeeding. Trump claimed victory in a tweet shortly after the opinion was issued, saying that he "won a big part of the Deep State and Democrat induced Witch Hunt." "I don’t make money, but lose a fortune for the honor of serving and doing a great job as your President (including accepting Zero salary!)." In the opinion, Judge Paul Niemeyer wrote that the claims that government officials are staying at Trump's Washington, D.C., hotel in order to benefit the president and not due to other factors "requires speculation" and are "simply too attenuated." "Indeed, there is a distinct possibility — which was completely ignored by the District and Maryland, as well as by the district court — that certain government officials might avoid patronizing the Hotel because of the President’s association with it," Niemeyer, who was appointed by former President George H.W. Bush, wrote. "And, even if government officials were patronizing the Hotel to curry the President’s favor, there is no reason to conclude that they would cease doing so were the President enjoined from receiving income from the Hotel," he continued. "After all, the Hotel would still be publicly associated with the President, would still bear his name, and would still financially benefit members of his family." Maryland and D.C. filed the lawsuit two years ago, alleging that Trump has violated both the foreign and domestic emoluments clauses of the Constitution by continuing to profit from his ownership of the Trump International Hotel while in office. A district court in Maryland originally ruled in their favor, finding that the local governments had standing to file the complaints, as the president's hotel may draw guests away from government-owned properties. But Wednesday's ruling found that the lower court did not fully consider the "novel" legal questions raised by such a lawsuit. "To allow such a suit to go forward in the district court without a resolution of the controlling issues by a court of appeals could result in an unnecessary intrusion into the duties and affairs of a sitting President," Niemeyer wrote.

'Severe, Serious Abuses' By FBI, CIA Are 'Going To Come Out'- Rep. Peter King - Rep. Peter King (R-NY) says that he's "confident" that the American people will learn of "severe, serious abuses" carried out by the FBI and CIA against President Trump and his campaign during the 2016 US election.   Speaking with New York radio host an billionaire John Catsimatidis, King said "There was no legal basis at all for them to begin the investigation of his campaign," when asked about the ongoing probe by Attorney General William Barr, referring to the FBI's application for a FISA warrant to spy on former Trump campaign adviser Carter Page. "Just from evidence I’ve seen over the last several years being on the Intelligence Committee, being a member of Congress," said King, "there’s no doubt to me there were severe serious abuses that were carried out in the FBI, and I believe the top levels of the CIA." Listen:   While Democrats dispute that anything untoward took place against Trump or his campaign, Republicans have called out the FBI for relying on an unverified dossier compiled, and possibly fabricated, by a former UK spy on behalf of the Clinton campaign. Republicans, including California Rep. Devin Nunes, claimed that federal authorities did not fully disclose their reliance on an unverified dossier compiled by Christopher Steele, which was part of opposition research for Hillary Clinton’s campaign.Democrats dispute the notion that anything improper took place. They claim the dossier did not play a major role, and point to a footnote in the warrant application that acknowledged that some of the information came from research on Trump that was likely meant to hurt his campaign, even if it did not spell out exactly who paid for it.Republicans are now waiting on a report from Justice Department Inspector General Michael Horowitz, following an investigation of possible FBI abuses of the FISA system. Fox News has learned that key witnesses have come forward, after previously holding out. -Fox NewsMeanwhile, special counsel Robert Mueller is set to appear on July 17 before the House Intelligence Committee, where he will face questions about his investigation into the events surrounding the 2016 US election.

 We hired the author of 'Black Hawk Down' and an illustrator from 'Archer' to adapt the Mueller report so you'll actually read it - It feels as if nobody read the Mueller report. That's a shame, because it's an important document, depicting possible crimes by a sitting US president. But not reading it makes sense. As a narrative, the document is a disaster. And at 448 pages, it's too long to grind through. For long stretches, it reads less like a story and more like a terms-of-service agreement. The instinct to click "next" is strong. And yet, buried within the Mueller report, there is a narrative that reads in parts like a thriller, like a comedy, like a tragedy — and, most important — like an indictment. The facts are compelling, all the more so because they come not from President Donald Trump's critics or "fake news" reports, but from Trump's own handpicked colleagues and associates. The story just needed to be rearranged in a better form. So we hired Mark Bowden, a journalist and author known for his brilliant works of narrative nonfiction like "Black Hawk Down," "Killing Pablo," and "Hue 1968." Our assignment for him was simple. Use the interviews and facts laid out in the Mueller report (plus those from reliable, fact-checked sources and published firsthand accounts) to do what he does best: Tell a story recounting Mueller's report that's so gripping it will hold your attention (and maybe your congressional representative's). We also hired Chad Hurd, an illustrator from the art department of "Archer." We asked him to draw out scenes from the report to bring them to life. Here's what Bowden and Hurd gave us …

Mueller to give extended testimony after appearance postponed - Former special counsel Robert Mueller will give extended testimony when he appears before Congress on July 24, one week later than originally anticipated, the Democratic chairmen of the House Judiciary and Intelligence committees announced Friday. Mueller has agreed to testify for three hours before the Judiciary panel, allowing all members the opportunity to question him. He was previously scheduled to testify July 17 under subpoena, but his appearance was to be limited to approximately two hours per committee, meaning some Judiciary members would not get a chance to ask questions."We are pleased to announce that Special Counsel Mueller will provide additional public testimony when he appears before our committees. At his request, we have agreed to postpone the hearing for one week, until July 24, at which time Mr. Mueller will appear in public before the House Judiciary Committee followed by the House Permanent Select Committee on Intelligence," Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) and Intelligence Committee Chairman Adam Schiff (D-Calif.) said in a statement.The Judiciary panel will convene at 8:30 a.m. on July 24 to hear Mueller’s testimony on his two-year investigation into Russian interference and potential obstruction of justice by President Trump, the chairmen said. After a brief break, Mueller will testify at noon before the Intelligence panel.  “All members — Democrats and Republicans — of both committees will have a meaningful opportunity to question the Special Counsel in public, and the American people will finally have an opportunity to hear directly from Mr. Mueller about what his investigation uncovered,” Nadler and Schiff said.

Trump dossier author Steele gets 16-hour DOJ grilling -Christopher Steele, the former British spy behind the infamous “dossier” on President Donald Trump’s ties to Russia, was interviewed for 16 hours in June by the Justice Department’s internal watchdog, according to two people familiar with the matter. The interview is part of an ongoing investigation that the Justice Department’s inspector general, Michael Horowitz, has been conducting for the past year. Specifically, Horowitz has been examining the FBI’s efforts to surveil a one-time Trump campaign adviser based in part on information from Steele, an ex-British MI6 agent who had worked with the bureau as a confidential source since 2010.Horowitz’s team has been intensely focused on gauging Steele’s credibility as a source for the bureau. But Steele was initially reluctant to speak with the American investigators because of the potential impropriety of his involvement in an internal DOJ probe as a foreign national and retired British intelligence agent.Steele’s allies have also repeatedly noted that the dossier was not the original basis for the FBI’s probe into Trump and Russia.The extensive, two-day interview took place in London while Trump was in Britain for a state visit, the sources said, and delved into Steele’s extensive work on Russian interference efforts globally, his intelligence-collection methods and his findings about Trump campaign adviser Carter Page, who the FBI ultimately surveilled. The FBI’s decision to seek a surveillance warrant against Page — a warrant they applied for and obtained after Page had already left the campaign — is the chief focus of the probe by Horowitz. The interview was contentious at first, the sources added, but investigators ultimately found Steele’s testimony credible and even surprising. The takeaway has irked some U.S. officials interviewed as part of the probe — they argue that it shouldn’t have taken a foreign national to convince the inspector general that the FBI acted properly in 2016. Steele’s American lawyer was present for the conversation.

Isikoff, Who First Peddled The Fake Steele Dossier, Invents New ‘Russian Influence’ Story  - Michael Isikoff was the first reporter who peddled the fake Steele dossier about alleged Russian influence over Donald Trump. He later admitted that the claims therein were 'likely false'. Today Isikoff came up with a new fake story about 'Russian influence'. Isikoff claims that the conspiracy theory, that Seth Rich, a DNC staffer, was killed because he stole the DNC emails which Wikileaks later published, was planted by Russia's foreign intelligence service. Exclusive: The true origins of the Seth Rich conspiracy theory. In the summer of 2016, Russian intelligence agents secretly planted a fake report claiming that Democratic National Committee staffer Seth Rich was gunned down by a squad of assassins working for Hillary Clinton, giving rise to a notorious conspiracy theory that captivated conservative activists and was later promoted from inside President Trump’s White House, a Yahoo News investigation has found.  Russia’s foreign intelligence service, known as the SVR, first circulated a phony “bulletin” — disguised to read as a real intelligence report —about the alleged murder of the former DNC staffer on July 13, 2016, according to the U.S. federal prosecutor who was in charge of the Rich case. That was just three days after Rich, 27, was killed in what police believed was a botched robbery while walking home to his group house in the Bloomingdale neighborhood of Washington, D.C., about 30 blocks north of the Capitol. Isikoff points to the whacky website On July 13 2016 it published this: A somber Foreign Intelligence Service (SVR) report circulating in the Kremlin today says that a top American Democratic Party staffer preparing to testify against Hillary Clinton was assassinated this past Sunday during a secret meeting in Washington D.C. he believed he was having with Federal Bureau of Investigation (FBI) agents, but who turned out, instead, to be a “hit team”—and who, in turn, were captured yesterday after a running gun battle with US federal police forces just blocks from the White House.   According to this report, SVR “electronic specialists” performing counter intelligence “missions/operations” noted on 7 July an “enormous/gigantic” increase of computer and telephonic traffic between the Democratic National Committee (DNC) headquarters in Washington D.C. and the Clinton Foundation (CF) offices in New York City. That report, says Isikoff, was planted by the SVR and was the first to make the connection between the murder of Seth Rich and his work at the Democrat National Councils (DNC).

Jeffrey Epstein sexually abused and trafficked ‘dozens of minor girls,’ prosecutors charge -- An indictment accusing wealthy financier Jeffrey Epstein of sex trafficking of underage girls was unsealed Monday morning in New York City, in advance of a court appearance by the former friend of President Donald Trump and former President Bill Clinton.Epstein, 66, is accused in the indictment of sexually exploiting and abusing “dozens of minor girls” between 2002 and 2005 in New York and Florida. Some of the girls were as young as 14 at the time of the alleged abuse, according to court records unsealed in Manhattan federal court in advance of his presentment there Monday to face the charges of two counts of sex trafficking. The indictment says Epstein, who was arrested on Saturday after flying back to the United States from France, would give the girls “hundreds of dollars in cash” after engaging in sex acts with him at his mansion on East 71st Street on Manhattan’s Upper East Side, or at his Palm Beach, Florida, estate. The girls allegedly were originally lured into contact with Epstein under the pretext that they would be giving him “massages,” according to the indictment. And “in order to maintain and increase his supply of victims, Epstein also paid certain of his victims to recruit additional girls to be similarly abused by Epstein,” the indictment said. “In this way, Epstein created a vast network of underage victims for him to sexually exploit.”  Trump in 2002 had said he knew Epstein for more than a decade, and called him a “terrific guy” who is “a lot of fun to be with.” “It is even said that he likes beautiful women as much as I do, and many of them are on the younger side,” Trump told New York Magazine at the time.  “No doubt about it – Jeffrey enjoys his social life.”

With Jeffrey Epstein locked up, these are nervous times for his friends, enablers - Jeffrey Epstein spent a second night in a New York jail cell Sunday, with a federal indictment expected to be unsealed Monday, charging him with sex offenses involving underage girls he and others allegedly trafficked in New York and Florida, sources have told the Miami Herald. His Saturday arrest capped months of investigating, led by federal agents and prosecutors with the Southern District of New York’s Public Corruption Unit, assisted by investigators with the sex trafficking division. Although details of the case remain undisclosed, there are indications that others involved in his crimes could be charged or named as cooperating witnesses. Among those potentially on the list: Ghislaine Maxwell, a 57-year-old British socialite and publishing heir who has been accused of working as Epstein’s madam; and Jean-Luc Brunel, who, according to court records, was partners with Epstein in an international modeling company. Epstein, 66, was arrested at Teterboro Airport in New Jersey shortly before 4 p.m. Saturday, as he arrived on his private jet from Paris, where he had been vacationing since June 14, aviation records show. About an hour after they picked him up, federal agents arrived at his imposing Manhattan townhouse, breaking down the door to execute search warrants.   Lawyers for Epstein’s victims, in court filings, have often likened Epstein’s sex operation to an organized crime family, with Epstein and Maxwell at the top, and below them, others who worked as schedulers, recruiters, pilots and bookkeepers. For her part, Maxwell, whose social circle included such friends as Bill and Hillary Clinton and members of the British Royal family, has been described as using recruiters positioned throughout the world to lure women by promising them modeling assignments, educational opportunities and fashion careers. The pitch was really a ruse to groom them into sex trafficking, it is alleged in court records.

If You Flew Epstein’s ‘Lolita Express’ Private Jet—the Feds Want to Talk to You  --- After Jeffrey Epstein’s latest arrest on sex trafficking charges, some famous people may be squirming. His notorious little black book and private-jet manifests contained a long list of boldface names, including Victoria’s Secret mogul Leslie Wexner and former president Bill Clinton.U.S. prosecutors on Monday encouraged anyone with information about Epstein’s conduct to come forward, not just potential victims. To the socialites, celebrities and politicians who attended lavish parties at Epstein’s homes in Manhattan or Palm Beach in the early 2000s -- or hitched rides on his private jet nicknamed the “Lolita Express” by the tabloids -- the request carried a clear message: Come talk to us before we seek you out. “You would much rather be visiting the Department of Justice and engaging a conversation about what you saw rather than making the DoJ find you,” said Jacob Frenkel, a former federal prosecutor now at Dickinson-Wright. “There’s a much greater potential for influencing the parameters of an interview and the scope of cooperation by going in voluntarily than becoming a compulsory guest” of the government, he said.Considering the dozens of alleged victims and hundreds of names on Epstein’s contact list, the Epstein affair could be far from over. Some of the alleged victims have claimed they were farmed out to other men.  Although the alleged crimes date back to 2002, new information continues to arise. Epstein’s little black book was published by Gawker in 2015, years after he pleaded guilty in Florida for soliciting an underage prostitute. On Saturday the FBI, using a crowbar on one of the most expensive properties in Manhattan, executed a search warrant on Epstein’s Manhattan townhouse.  Agents gathered a “vast trove of lewd photographs of young-looking women or girls” according to prosecutors, who urged a judge not to release Epstein on bail. The call to action by prosecutors and the discovery that Epstein, a registered sex offender, possessed explicit photos could lead to additional charges, Frenkel said. In this way, prosecutors’ request for more evidence poses a threat to any of Epstein’s associates who also engaged in sex with minors. It also raises the stakes for those who attended his parties and might have inferred that something was wrong with the fact that so many grown men were surrounded by girls who appeared to be teenagers.The black book contains more than 1,000 names, ranging from close friends like Wexner to peripheral contacts from the worlds of politics, business, the media and European high society. The U.K.’s Prince Andrew and members of the Trump family make appearances. There’s even an entry for the main number to the White House. The names include well known performers, including Ralph Fiennes, Alec Baldwin, David Blaine, Jimmy Buffett and Courtney Love; media figures including Charlie Rose, Mike Wallace and Barbara Walters; former Israeli prime minister Ehud Barak, former British prime minister Tony Blair, industrialist David Koch and the late Salomon Brothers chief executive officer John Gutfreund and his wife, Susan.

Trump hosted an exclusive party with Jeffrey Epstein at his Mar-a-Lago estate, a new report claims. It was just the 2 of them and '28 girls' - Donald Trump once hosted a party with a guest list made up of just himself, Jeffrey Epstein, and “28 girls,” according to The New York Times, and ignored an organizer’s warning about Epstein’s conduct. The “calendar girl” event is reported to have taken place at Trump’s Mar-a-Lago in 1992. George Houraney, who ran American Dream Enterprise, claimed in an interview that he organized the event after a request from Trump. “I arranged to have some contestants fly in,” said Houraney. “At the very first party, I said, ‘Who’s coming tonight? I have 28 girls coming.’ It was him and Epstein.” Houraney added that he warned Trump about his friend’s conduct, recalling: “I said, ‘Look, Donald, I know Jeff really well, I can’t have him going after younger girls.’... He said, ‘Look I’m putting my name on this. I wouldn’t put my name on it and have a scandal.’” The Times report also claims Epstein has told people since the election that he was the one who introduced the president to his third wife, first lady Melania Trump. The White House didn’t respond to the newspaper’s request for comment.

Trump says he’s ‘not a fan’ of Jeffrey Epstein — won’t explain ‘falling out’ with accused child sex trafficker --President Donald Trump on Tuesday said “I was “not a fan” of accused child sex trafficker Jeffrey Epstein — but repeatedly refused to reveal what led to a “falling out” that he now claims to have had with the wealthy financier about 15 years ago.Trump’s comments came a day after Epstein, 66, appeared in New York federal court to face new charges that he sexually abused dozens of underage girls, some as young as 14, in his Manhattan and Florida mansions from 2002 to 2005.Epstein has pleaded not guilty in the case, and is being held pending a detention hearing next week.In 2002, Trump told New York magazine that at that time he had known Epstein for more than a decade and called him a “terrific guy” who is “a lot of fun to be with.”“It is even said that he likes beautiful women as much as I do, and many of them are on the younger side,” Trump told the magazine at the time. “No doubt about it – Jeffrey enjoys his social life.”Trump, during a photo opportunity in the Oval Office on Tuesday, told reporters that he had known Epstein “like everyone in Palm Beach,” Florida.“He was a fixture in Palm Beach,” Trump said of Epstein, who is also known for having been friends with former President Bill Clinton. “I had a falling out a long time ago with him,” Trump said. “I don’t think I’ve spoken to him in 15 years.”“I was not a fan of his,” Trump said.

Bill Clinton issues statement on Epstein charges - Former president Clinton on Monday issued a statement on new sex trafficking charges against billionaire financier Jeffrey Epstein, saying he knew nothing about the “terrible crimes” Epstein is accused of.“President Clinton knows nothing about the terrible crimes Jeffrey Epstein pleaded guilty to in Florida some years ago, or those with which he has been recently charged in New York,” the statement from a Clinton spokesperson reads.“In 2002 and 2003, President Clinton took a total of four trips on Jeffrey Epstein’s airplane: one to Europe, one to Asia, and two to Africa, which included stops in connection with the work of the Clinton Foundation,” the statement adds.Epstein has previously been tied to Clinton and President Trump. Flight logs from Epstein’s private jet published by Gawker in 2015 put Clinton on the plane more than a dozen times. Epstein was arrested over the weekend on new sex trafficking charges and has pleaded not guilty. U.S. Attorney Geoffrey Berman said nude photos of apparently underage girls were recovered from the financier’s Manhattan mansion.“We are asking anyone who may have been victimized by Jeffrey Epstein, or anyone who may have information about his alleged criminal behavior, to please call us," FBI Assistant Director William Sweeney said in a statement Monday. The new charges have also led to increased scrutiny of Labor Secretary Alexander Acosta, who as U.S. attorney approved Epstein’s 2008 plea deal on charges of soliciting underage girls that allowed him to serve just over a year and spend 16 hours a day outside prison.

Bill Clinton Lying About Epstein Relationship- Report - Bill Clinton is lying about his involvement with arrested pedophile Jeffrey Epstein, according to investigative journalist Conchita Sarnoff - who first revealed the former president's extensive flights on Epstein's "lolita express" in a 2010 Daily Beast exposé.  Clinton claimed in a Monday statement that he only took "a total of four trips on Jeffrey Epstein's airplane" in 2002 and 2003, and that Secret Service accompanied him at all times. According to Sarnoff's research as well as flight logs obtained by Fox News in 2016, that's a complete lie. Sarnoff, who heads up the Alliance to Rescue Victims of Trafficking and the author of "Trafficking," told Fox News Monday evening: "I know from the pilot logs and these are pilot logs that you know were written by different pilots and at different times that Clinton went, he was a guest of Epstein's 27 times," adding "many of those times Clinton had his Secret Service with him and many times he did not." "I'm saying, sadly, that he is not telling the truth," added Sarnoff."First of all, Gerald Lefcourt, who was one of Epstein's attorneys back during the original arrest and the original investigation, wrote a letter which has been made public ... In that letter, Gerald Lefcourt claims that Epstein was one of the original funders of Clinton Global Initiative. He gave President Clinton four million dollars, according to a source who knows a story about that."  This appears to be confirmed by a 2007 letter sent to federal prosecutors by Epstein's then-attorneys Alan Dershowitz and Gerald Lefcourt, which reads: "Mr. Epstein was part of the original group that conceived the Clinton Global Initiative, which is described as a project ‘bringing together a community of global leaders to devise and implement innovative solutions to some of the world’s most pressing challenges."

‘Underage Girls’ On Epstein’s Plane When Clinton Flew On It, Says Investigative Journalist - Investigative journalist Conchita Sarnoff told Fox News' Shannon Bream on Monday night that there were "underage girls" on accused pedophile Jeffrey Epstein's plane when former President Bill Clinton traveled on it — at times without his Secret Service detail. Fox News' Lukas Mikelionis reports that Sarnoff is the executive director of Alliance to Rescue Victims of Trafficking and is the author of the book "TrafficKing: The Jeffrey Epstein Case." The Fox News segment followed the recent developments in the Epstein case that have occured after the financier was arrested on Saturday on child sex trafficking charges. Sarnoff made the remarks in response to the following statement from Clinton on Monday:President Clinton knows nothing about the terrible crimes Jeffrey Epstein pleaded guilty to in Florida some years ago, or those with which he has been recently charged in New York. In 2002 and 2003, President Clinton took a total of four trips on Jeffrey Epstein’s airplane: one to Europe, one to Asia, and two to Africa, which included stops in connection with the work of the Clinton Foundation. Staff, supporters of the foundation, and his Secret Service detail traveled on every leg of every trip. He had one meeting with Epstein in his Harlem office in 2002, and around the same time made one brief visit to Epstein’s New York apartment with a staff member and his security detail. He’s not spoken to Epstein in well over a decade, and he has never been to Little St. James Island, Epstein’s ranch in New Mexico, or his residence in Florida. "I have read too much information and I have spoken to too many people on the inside," Sarnoff said. "I actually attempted to interview Clinton but he did not agree to do so and I know from the pilot logs and these are pilot logs that you know were written by different pilots and at different times, that Clinton went, he was a guest of Epstein's 27 times."

 Jeffrey Epstein’s Sick Story Played Out for Years in Plain Sight - A couple of years ago, I was interviewing a former senior White House official when the name Jeffrey Epstein came up.   Unaware of my personal history with Epstein, this person assured me that the New York financier was no serious harm to anyone. He was a good guy. A charming guy. Useful, too. He knew a lot of rich Arabs, including the crown prince of Saudi Arabia, and, further, he had clever ideas about creating bond issues for them. “OK, so he has a girl problem,” this person threw on, almost as an afterthought.  Epstein’s name, I was told, had been raised by the Trump transition team when Alexander Acosta, the former U.S. attorney in Miami who’d infamously cut Epstein a non-prosecution plea deal back in 2007, was being interviewed for the job of labor secretary. The plea deal put a hard stop to a separate federal investigation of alleged sex crimes with minors and trafficking. “Is the Epstein case going to cause a problem [for confirmation hearings]?” Acosta had been asked. Acosta had explained, breezily, apparently, that back in the day he’d had just one meeting on the Epstein case. He’d cut the non-prosecution deal with one of Epstein’s attorneys because he had “been told” to back off, that Epstein was above his pay grade. “I was told Epstein ‘belonged to intelligence’ and to leave it alone,”  And so, it seemed—until the news of Epstein’s arrest on Saturday for allegedly trafficking minors—thus continuing a pattern of blatant exceptionalism that surrounded him, and his social and business nexus. For almost two decades, for some nebulous reason, whether to do with ties to foreign intelligence, his billions of dollars, or his social connections, Epstein, whose alleged sexual sickness and horrific assaults on women without means or ability to protect themselves is well-known in his circle, remained untouchable. I spent many months on his trail in 2002 for Vanity Fair and discovered not only that he was not who he claimed to be professionally, but also that he had allegedly assaulted two young sisters, one of whom had been underage at the time. Very bravely, they were prepared to go on the record. They were afraid he’d use all his influence to discredit them—and their fear turned out to be legitimate. As the article was being readied for publication, Epstein made a visit to the office of Vanity Fair’s then-editor, Graydon Carter, and suddenly the women and their allegations were removed from the article.  Epstein had also leaned heavily on my ex-husband’s uncle, Conrad Black, to try to exert his influence on me, which was particularly unwelcome, given that Black happened to be my ex-husband’s boss at the time.   But much worse was to come from Epstein’s army of willfully blind lobbyists. In 2007 and 2008, as the FBI prepared a 53-page indictment that would charge Epstein with sex crimes, Epstein’s powerful legal team played the influence card.  After the one meeting with then-U.S. Attorney Acosta, where presumably “intelligence” was mentioned, the indictment was shelved and, instead, Epstein signed a non-prosecution agreement with federal prosecutors, pleading guilty to one count of solicitation of prostitution and one count of procurement of minors for prostitution, which earned him a cushy 13 months in county jail, from where he was allowed to leave to work at his office and go for walks.  The deal granted immunity to “any potential co-conspirators.” Most significantly, federal prosecutors agreed to keep the deal secret from Epstein’s victims, which meant they would not know to challenge it in court. As it turned out, this actually broke the law, because victims have a right to know of such developments, under the Crime Victims’ Rights Act.

Jeffrey Epstein's Wikipedia Page Stealth-Edited To Remove Ties To Democrats - In the wake of Jeffrey Epstein's weekend arrest, an observant Twitter user noticed that someone has edited the billionaire pedophile's Wikipedia page to remove all mention of Democrats who have flown on the "Lolita Express" - the nickname given to his private Boeing 727 jet which was reportedly outfitted with a bed.  On Sunday, the sentence "Epstein flew Bill Clinton, Kevin Spacey, and Chris Tucker to Africa in his private jet. Flight records show Bill Clinton flew on Epstein's plane 26 times" (a charge Clinton denied on Monday, claiming it was only four times).  A reference to having 'attended parties' with Donald Trump was left untouched.  Seems Wikipedia has altered Epstein’s bio already. First screenshot of Epstein’s bio was at 8:27 a.m. The 2nd was at 10:30 a.m. omitting Bill Clinton & Spacy yet leaving Trump! That is frightening. Same exact bio of Epstein, different times.— Desiree Mills (Dez) (@Blondiedez) July 7, 2019 And as Steve Straub of the Federalist Papers points out, "This comes after Christine Pelosi, Daughter of Speaker of the House Nancy Pelosi, and a top official with the Democratic National Committee (DNC), sounded the alarm over the weekend arrest of Jeffrey Epstein on sex trafficking charges. Pelosi speculated that "some of our faves" may be indicted in the wake of Epstein’s arrest, the Daily Mail reports."

Charities say they never got the donations Jeffrey Epstein claims he made - Press releases from Jeffrey Epstein's foundation paint the wealthy registered sex offender as a generous donor to large American hospitals, top research universities, and children's and youth charities in the U.S. Virgin Islands, where he owns an island.But Epstein's largesse was much smaller than what he represented, according to an NBC News review of public records and interviews with officials at the institutions named as recipients of his gifts. In reality, Epstein's contributions — whether personal or via his foundation — were a drop in the bucket compared to the donations of other wealthy philanthropists such as Bill Gates and Warren Buffett.In press releases for the Jeffrey Epstein VI Foundation, Epstein claims he donated to more than 100 organizations after pleading guilty to a state charge in a deal with federal prosecutors in Florida and registering as a sex offender in 2008. From 2015 to 2017, Epstein's foundation, Gratitude America Ltd., which was first revealed by the Daily Beast, gave away $1.84 million to charities around the country, according to federal tax filings. Epstein also said he gave $30 million to Harvard University prior to his 2008 plea deal. But some of the alleged recipients of Epstein's donations said they had not received any donations or they disputed the size of his gifts. In addition, the Chronicle of Philanthropy keeps a running database from 2006 of major gifts more than a million dollars and has no record of any gifts from Epstein, according to staff writer Maria DiMento. NBC News reached out to 56 charities that were listed as grant recipients in multiple press releases from Epstein's foundation or his foundation's IRS filings between 2010 and 2017. Thirty-two organizations did not return requests for comment. Of the 24 organizations that responded, 10 said they had no record of any donations from Epstein or Gratitude America.

Epstein Begs Judge For House Arrest At $77 Million, 21K Sqft Mansion With 'Artificial Eyeball Wall' - Jeffrey Epstein's attorneys have informed Judge Richard M. Berman that their client wants out of his 100 sqft holding cell at the Metropolitan Correctional Center (MCC) in lower Manhattan he's been in since his arrest last Saturday at Teterboro airport.  Instead, the registered sex-offender and self-admitted pedophile would agree to house arrest at his palacial 21,000 sqft, $77 million 1930s Manhattan mansion where investigators found a cache of child porn.  Epstein will also agree to wear a GPS monitoring device, install surveillance cameras inside and out (as if he doesn't have any?), and deregister his cars and aircraft if released on bail "in an amount set by the court after reviewing additional information regarding Mr. Epstein's finances," according to the Daily Mail.   According to the New York Times,"The seven-story residence at 9 East 71st Street, between Fifth and Madison Avenues, sprawls across 21,000 square feet and has five bathrooms, a two-story reception room and many bedrooms, including three three-room suites on the fourth floor.It also has a heated sidewalk in front to melt the snow during the winter months. On the second floor is a mural that Mr. Epstein had commissioned in recent years: a photorealistic prison scene that included barbed wire, corrections officers and a guard station, with Mr. Epstein portrayed in the middle.... At the base of the stairwell, one of the visitors said, Mr. Epstein had placed a chess board with custom figurines, many dressed suggestively — each piece, he noted, was modeled after one of his staffers.

  The Mystery Surrounding Jeffrey Epstein’s Private Island - From the harbor on St. Thomas, the boat skims eastward across the crystalline Caribbean, takes a turn and there it is: the palm-fringed paradise that was the private redoubt of Jeffrey Epstein. An American flag on a towering pole flutters in the breeze. A blue-and-white building that resembles a temple sits atop one of the hills. The pool and cabanas are visible in the distance. There’s no traffic on the winding dirt roads, no people on the dock or the beach.It’s quiet now on the island of Little St. James. Epstein dubbed it Little St. Jeff’s. Locals have other names for it: Pedophile Island and Orgy Island. This is where Epstein –- convicted of sex crimes a decade ago in Florida and now charged in New York with trafficking girls as young as 14 –- repaired, his escape from the toil of cultivating the rich and powerful.Over the years, the 66-year-old crossed paths with former and future presidents, as well as a Who’s Who of wealthy business figures and celebrities. On St. Thomas, he has been a subject of lurid speculation for as long as anyone can remember. Tourists still take boats out to get a glimpse of the island, where, according to a former employee, Epstein hosted young women who flew into St. Thomas with him and were ferried over in groups aboard a 38-foot vessel called the “Lady Ghislaine,” apparently named for his friend Ghislaine Maxwell.“It’s part of the tour and has been forever,” said Kristi Query, owner of Virgin Islands Yacht Charters in Compass Point Marina on St. Thomas, the gateway isle of the U.S. Virgin Islands. Few here doubt that Epstein is wealthy. He routinely touched down on St. Thomas aboard his private jet before being whisked by helicopter to his 72-acre retreat. He spent many millions after buying it for $7.95 million in 1998, carving roads, planting scores of 40-foot palms, building several villas and the temple structure, which was topped by a gold-colored dome until Hurricane Irma blew it off, according to locals.Yet the size and source of Epstein’s fortune are as much a source of speculation here as they are on Wall Street. Bankers and money managers wonder exactly what his business entailed, with theories ranging from helping the ultra-rich reduce their taxes to buying and selling currencies. The properties Epstein owns certainly suggest he knew his way around the world of big money. He has a second private island, Great St. James, mansions in Palm Beach and Manhattan, an apartment in Paris and a ranch in New Mexico that, according to an October 2009 deposition in a civil lawsuit, has its own 4,500-foot airstrip. The New York townhouse alone is worth more than $100 million, according to Dolly Lenz, a luxury real estate agent who has viewed it. “Literally, only billionaires have these kind of assets,” she said.

Major Red Flags Are Causing Many To Doubt Whether Justice Will Be Done In The Epstein Sex Scandal - It won’t just be Jeffrey Epstein that will be on trial in the months ahead.  As this scandal unfolds, the entire U.S. legal system will be on trial, and if justice does not prevail many Americans will lose faith in the system for good. And of course the rest of the world will be watching too, and so what are they supposed to think about us if we are not able to put Epstein and all of his dirty friends in prison?  As I detailed in part three of this series, the evidence against Jeffrey Epstein and his partners in crime is mounting.  If Jeffrey Epstein is put behind bars that will be a step in the right direction, but it will not nearly be enough.  At this point it is exceedingly clear to everyone in America that many of Epstein’s famous friends also regularly had sex with underage girls, and they must be held accountable.  In my most recent book I talked about how fundamentally broken our current legal system is, but if federal prosecutors are able to nail Epstein and all of his elite friends that were involved in these sex crimes, I might have to reconsider my position. However, at this point I am not holding my breath. Let me try to explain why.  As I have already discussed in this series, one of Epstein’s closest friends during the heyday of “the Lolita Express” was Bill Clinton.  And it turns out that the federal judge that will be presiding over Epstein’s case was appointed to his position by Clinton in 1998Richard Berman was appointed by Bill Clinton in 1998. He presided over Dinesh D’Souza’s case where D’Souza was convicted of re-imbursing friends to evade campaign contribution limits in a New York election. Meanwhile, disgraced former FBI director James Comey’s daughter Maurene is one of the prosecutors in the case. So will Berman recuse himself?He should, but I doubt that it will actually happen. Also, the fact that James Comey’s daughter is one of the prosecutors is a major red flag.  I have a gnawing suspicion that something is up, and hopefully I am wrong.  Nailing Epstein should be pretty easy, and things got even easier for prosecutors after a “treasure trove” of photographic evidence was found during a raid on Epstein’s New York home.The tricky part will be nailing Epstein’s famous friends.  In the old days he regularly partied with some of the biggest names in America, and going after them will not be easy. But it must be done, because the reputation of our entire nation is at stake.  If the rich and famous can sexually abuse underage girls for years and get away with it, how are any of us supposed to have faith in the system?

Ann Coulter Thinks Epstein Had A State Sponsor & Was Running A Blackmailing Operation -- Conservative commentator Ann Coulter says that sex trafficker Jeffrey Epstein had a “state sponsor” backing him and that his operation was a way to blackmail powerful men.  During an appearance on 790 KABC, Coulter suggested that Epstein is merely the front man for a far more powerful network. “Epstein according to both the girls accounts, he wanted them to have sex with powerful men, come back to him and report on it, describe what they wanted what their fetishes were and he had cameras throughout the house so this is obviously for blackmailing purposes,” said Coulter. “It just seems to me something much bigger is behind this — perhaps a state sponsor — powerful enough just seems to me there’s something a very powerful force behind what’s going on here and I am still nervous about this not coming to a conclusion, somehow this getting compromised,” she added. Coulter said that it remained a mystery as to how Epstein became a billionaire and that the source of his money should be investigated.Former President Bill Clinton attempted to distance himself from Epstein last night, claiming he only flew on the infamous ‘Lolita Express’ private jet four times despite flight logs showing at least 26 trips.As we reported yesterday, speculation is swirling that Epstein may give up names of influential people who used his network in order to secure a maximum prison sentence of no more than five years.

Epstein Accused Of Paying Witnesses $350K In Hush Money -- Federal prosecutors allege in a new court filing that Jeffrey Epstein may have engaged in witness tampering by paying off two potential witnesses days before the Miami Herald began publishing a series of explosive exposés about the registered sex offender and his victims.   According to financial records, Epstein wired $350,000 to two 'possible co-conspirators' who could testify against him. $100,000 was wired from "Institution-1" to one person, while just three days later $250,000 was wired to another individual. Neither of the payments appear to be recurring based on five years of bank records.  Is one of the co-conspirators Ghislaine Maxwell?   The daughter of a British media barron, Maxwell was described by one Epstein accuser in a 2017 lawsuit as "the highest ranking employee" of his alleged enterprise, in which she was said to have managed both Epstein's household and his sex life.  Via the Wall Street Journal:Ghislaine Maxwell, daughter of a British media baron, was a fixture for years in Manhattan’s social scene, often written about in tabloids for her close ties to British royalty and to a mysterious financier named Jeffrey Epstein. But Mr. Epstein’s arrest last week on sex-trafficking charges has brought renewed attention to her alleged role as one of his top aides. Ms. Maxwell, 57 years old, has been accused by three women in affidavits and other court filings of recruiting young women for Mr. Epstein and training them for sex. Two of the women have alleged that Ms. Maxwell, together with Mr. Epstein, sexually assaulted them, according to the filings.What's more, "Juan Alessi, who said in one of the depositions that he served as the Palm Beach house manager from around 1992 through 2002, described a basket of sex toys in Ms. Maxwell’s bathroom closet. He said he would find them around when he cleaned up after visits from the young women," according to the Journal. Alessi also says Maxwell asked him to make a list of massage parlors and massage schools in the area - asking him to then drive her around to the location where she collected business cards.  Maxwell was also a guest at Chelsea Clinton's wedding.

They Have No Fear - A Dozen New Epstein Abuse Victims Come Forward - Jeffrey Epstein's defense team is arguing that their client should be released on house arrest until his trial. They're also arguing that the charges being brought against Epstein in New York were previously resolved in Florida ten years ago, where Epstein struck his sweetheart deal with prosecutors led by now-Labor Secretary Alex Acosta. But it appears the FBI's request that any other victims of Epstein come forward succeeded in convincing more than a dozen women, whose cases were not part of the Florida prosecution, to come forward and testify about the abuse they suffered at the hands of Epstein.  According to the Miami Herald, which revived prosecutors' interest in Epstein with its 'Perversion of Justice' series of investigative reports about how Epstein was let off with a slap on the wrist and minimal jail time despite evidence that he was an inveterate, unrepentant pedophile. At least four women have contacted David Boies, the New York power-lawyer who represents some of Epstein's victims, and at least 10 others have approached other lawyers who have previously represented Epstein's victims.Following Epstein’s arrest Saturday in New Jersey, four women have reached out to New York lawyer David Boies, and at least 10 other women have approached other lawyers who have represented dozens of Epstein’s alleged victims in the past.Jack Scarola, a Palm Beach attorney, said at least five women, all of whom were minors at the time of their alleged encounters with Epstein, have reached out to either him or Fort Lauderdale lawyer Brad Edwards."The people we are speaking to are underage victims in Florida and in New York. They are not individuals whose claims have previously been part of any law enforcement investigation," Scarola said.[...]"I believe that there was a fairly effective message that was delivered by New York authorities that victims need not fear that they will be treated in the same way that victims had been treated in South Florida," Scarola said

Jeffrey Epstein’s Arrest Forces Us To Ask: Which Dirtbag Lawyers In This Case Will Face Their Own Music?  - Jeffrey Epstein was ostensibly a hedge fund manager who molested underaged girls and allegedly ran a human trafficking operation for the rich and powerful. A few years back, he pleaded guilty to a watered down version of his crimes and served 13 months in the Palm Beach County Jail. Or at least some of the 13 months… he was allowed to leave and go to his office for 12 hours a day. Epstein even got a non-prosecution agreement that stifled evidence of the wide-ranging nature of his activity.With his arrest at the behest of the SDNY USAO, Epstein may finally face some measure of justice. There aren’t any statutes of limitations to deal with when it comes to child exploitation, and the way the original plea went down may itself be cause for charges.The accused always deserve a robust defense, and while lawyers have to be cognizant of their competing obligations or protect their credibility with clients, generally speaking lawyers shouldn’t be knocked for zealously representing clients within the bounds of the law. Yet what the Epstein case reveals is the sickening quasi-law created by the outsized and largely unchecked power of prosecutors. A world where the rich and powerful and their professional mouthpieces spend less time arguing the finer points of law and fact, and more time negotiating how “we can all just get along” with pedigreed perpetrators. If this case goes forward, every single one of these lawyers should face scrutiny — if not legal repercussions — for their role in enabling Epstein all these years. What’s really amazing is how the Venn diagram of “lawyers who enabled a sexual predator” and “lawyers we routinely blast here at Above the Law” is a perfect circle.

Jeffrey Epstein accuser sues Alan Dershowitz as new sex trafficking victim reveals herself - A woman who claims to have been trafficked by Jeffrey Epstein sued the multimillionaire’s perv’s attorney Alan Dershowitz Tuesday, claiming the prominent lawyer was lying when he denied having sex with her.The lawsuit filed in Manhattan Federal Court by Virginia Giuffre was the latest volley in the ongoing Epstein saga and featured a sworn statement by a new accuser of the registered sex offender, Maria Farmer. Giuffre seeks unspecified damages from Dershowitz for defamation. It comes as the 2nd Circuit Court of Appeals considers whether to unseal thousands of pages related to the case.“Dershowitz’s claims that he was never present where Ms. Roberts was trafficked, and never in the presence of young girls, are a lie intended to cover up his culpability,” the suit reads.  Dershowitz, who has invited the lawsuit for months, said he was ready to go to court.“This is the opportunity I’ve been looking for,” he told the Daily News.“This is not a gray area case — I never met this person. She’s made up the story from whole cloth. She’s lied repeatedly and her lies will finally be exposed.”The News exclusively reported in December that a second Epstein accuser, Sarah Ransome, claimed the perv had “directed” her to have sex with Dershowitz when she was in her 20s. The 80-year-old Dershowitz told The News then that “none of this happened” and slammed Ransome as mentally unstable. Giuffre’s lawsuit provides a behind-the-scenes look at Dershowitz’s efforts to convince her attorney David Boies to release a statement that she may have been mistaken when she recalled having sex with the noted Harvard Law professor between 2000 and 2002, beginning when she was 16 years old.

'Acosta Enables Sex Trafficking' projected onto the Labor Department building --Activists projected condemnations of Labor Secretary Alexander Acostaon the Department of Labor building Wednesday to protest his role in a controversial non-prosecution agreement with financier Jeffrey Epstein, who was arrested again over the weekend.  Progressive advocacy groups, including CREDO Action, MoveOn, UltraViolet and the American Federation of Teachers, projected the words “Acosta Enabled Sex Trafficking” and “Acosta Must Go” on the building.“Secretary Acosta’s actions in not disclosing the plea deal of a politically well-connected predator to the victims of that predator were illegal and unconscionable. By breaking the law and hiding the deal from victims, he’s shown that we cannot trust him,” American Federation of Teachers President Randi Weingarten said in a statement.“A labor secretary is supposed to protect everyday people – Alex Acostaproposed an 80% cut to his department’s bureau that combats human trafficking, and gave a sweetheart deal to a known predator,” she added.In 2008, as a U.S. Attorney, Acosta approved a deal that allowed Epstein to serve only 13 months and spend 16 hours a day outside of prison. Epstein was arrested on new federal charges of sex trafficking over the weekend. He has pleaded not guilty.In a press conference Wednesday, Acosta defended the arrangement. “We believe that we proceeded appropriately,” Acosta told reporters at the Labor Department. “We did what we did because we wanted to see Epstein go to jail. He needed to go to jail.”

Acosta Scrapped 53-Page Epstein Indictment In 2008 After Secret Negotiations - Fmr State's Attorney -    Former Palm Beach County state's attorney, Barry Krischer, says that Labor Secretary Alexander Acosta's account of a 2008 plea arrangement his office cut with pedophile financier Jeffrey Epstein is "completely wrong," and that Acosta "should not be allowed to rewrite history," according to a Wednesday statement by Krischer.   Earlier in the day Acosta held a press conference in which he vehemently defended the deal to serve just 13 months in county jail - saying that Krischer would have let Epstein walk otherwise. "Simply put, the Palm Beach State Attorney's Office was willing to let Epstein walk free. No jail time. Nothing," said Acosta. "Prosecutors in my former office found this to be completely unacceptable, and we became involved." Not true says Krischer - who said that Acosta abandoned a 53-page federal indictment "after secret negotiations between Mr. Epstein's lawyers and Mr. Acosta," according to The HillThe Miami U.S. Attorney’s Office had prepared a federal indictment against Epstein, but it was never filed. Acosta has also faced criticism for failing to disclose the plea deal to Epstein’s victims, something he said would have jeopardized the agreement. Krischer downplayed his office's role in the eventual plea deal, and alleged the U.S. Attorney's Office abandoned its federal indictment after "secret negotiations between Mr. Epstein's lawyers and Mr. Acosta.""If Mr. Acosta was truly concerned with the State’s case and felt he had to rescue the matter, he would have moved forward with the 53-page indictment that his own office drafted," Krischer said. -The Hill That said, Palm Beach police told the Miami Herald that they felt pressured by Krischer to downgrade Epstein's case to a misdemeanor or to drop it entirely

Trump Labor Secretary Alex Acosta resigns amid pressure from Jeffrey Epstein sex traffic case - Labor Secretary Alex Acosta said Friday he will resign amid controversy over the way he handled a sex crimes case against wealthy businessman Jeffrey Epstein a decade ago when he was U.S. attorney for southern Florida.Acosta made the announcement to reporters while standing next to President Donald Trump outside the White House. Trump said Acosta had called him Friday morning and that it was Acosta’s decision to quit.“This was him, not me, because I’m with him,” Trump said in a lengthy exchange with the press before departing the White House en route to events in Wisconsin and Ohio. “I said, ‘You don’t have to do this.’”Acosta told reporters that he did not want his involvement in Epstein’s controversy to overshadow the administration’s accomplishments. Acosta said he will officially resign a week after his announcement. Deputy Labor Secretary Patrick Pizzella will take his place in an acting capacity, Trump said.In his resignation letter to Trump, Acosta said, “It has meant so much to me that you have offered your steadfast support in our private discussions and in your public remarks.” But “your agenda, putting the American people first, must avoid any distractions,” Acosta wrote.The resignation came two days after Acosta gave a news conference in which he defended a controversial non-prosecution agreement he had made with Epstein’s lawyers in 2007, when Acosta was the top prosecutor in Miami. The issue resurfaced on July 6, when the politically connected Epstein, whose friends have included Trump and former President Bill Clinton, was arrested on sex trafficking charges by federal prosecutors in New York.

Deutcshe Bank only cut ties with Jeffrey Epstein a few MONTHS AGO after an extensive relationship, lending him money and providing trading services, despite being warned he was a ‘reputational risk’ because he was such a lucrative client  - Deutsche Bank continued to do business with Jeffrey Epstein after his 2008 conviction for soliciting prostitution and only severed ties with him a few months ago ahead of his latest arrest on child sex trafficking, it has been revealed.  The New York Times reports that until earlier this year, Epstein was being given loans by the bank and was considered a 'lucrative' client within its private-banking division. It is unclear what prompted the bank to suddenly end their years-long relationship several months ago. Epstein was arrested dramatically on the tarmac at Teterboro airport last Saturday while getting off his private jet. Whether Deutsche Bank knew ahead of time that he was facing legal woes remains uncertain. Sources who were familiar with his accounts told the Times that compliance officers once raised concerns that he was a reputational risk to them because of his past but managers overruled them. How much money Epstein actually has has also come into question since his arrest. Prosecutors described him as having 'infinite means' and he is routinely described as a billionaire.

Bank will exit global equities business and slash 18,000 jobs in sweeping overhaul - Deutsche Bank announced Sunday that it will pull out of global equities sales and trading, scale back investment banking and slash thousands of jobs as part of a sweeping restructuring plan to improve profitability. Deutsche will cut 18,000 jobs for a global headcount of around 74,000 employees by 2022. The bank aims to reduce adjusted costs by a quarter to 17 billion euros ($19 billion) over the next several years. The German bank’s decision to scale back investment banking comes just two days after investment banking chief Garth Ritchie stepped down by “mutual agreement.” Deutsche expects its restructuring plan to cost 7.4 billion euros by the end of 2022. The German bank may report a net loss of 2.8 billion euros in the second quarter of 2019. It will release second quarter results on July 25. Deutsche Bank’s supervisory board met on Sunday to hash out the restructuring plan. The bank’s CEO, Christian Sewing, had broadcast “tough cutbacks” during a shareholders’ meeting in May. “Today we have announced the most fundamental transformation of Deutsche Bank in decades,” Sewing said Sunday in a corporate press release. Deutsche had previously considered merging with rival Commerzbank to shore up its position, but merger talks collapsed in April. An industry source told CNBC that there wasn’t enough support for a merger within Deutsche. The German lender once sought to compete with America’s big banks on Wall Street, but has been pummeled by scandals, investigations and massive fines stemming from the financial crisis and other issues in recent years. Deutsche reached a $7.2 billion settlement with the U.S. Justice Department in January 2017 for allegedly misleading investors in the sale of mortgage-backed securities in the lead-up to the 2008 financial crisis. Weeks later, the bank was slapped with a $630 million fine over allegations of Russian money laundering.

Deutshe Bank Throws in the Towel, Announces Restructuring into Bad Bank/Good Bank, Firing of 18,000 -  Yves Smith - Deutsche Bank has been the poster child for how long a sick but ginormous bank can be allowed to limp along. The last desperate effort to shore up the clearly listing Deutsche was the idea of merger with wobbly Commerzbank. The scheme was met with remarkably open skepticism, including from nearly all of Deutsche’s big shareholders. After those talks failed, Deutsche was back to Plan A, of year another restructuring, but one intended to be big enough to have a hope of getting the bank on the right path. Deutsche had already been through a series of “Yes we are really gonna fix this garbage barge” plans over the years, which did not satisfy Mr. Market. One analyst pegged Deutsche’s market cap at a mere 1/5 of its book value before the restructuring was announced, reflecting considerable skepticism over the value of the bank’s assets.On Sunday, Deutsche announced its program, The cornerstone is moving significant operations and the related assets, including its global equities sales and trading, into a “bad bank” to be liquidated over time. Key elements of the plan include:

    • Sequestering €288 billion of assets (€74 billion risk-weighted assets) in the “bad bank”; the language used by Deutsche hinted that this number could grow
    • Shutting down global equities sales and trading; the bank says it will still provide underwriting to corporate clients, but it’s hard to see how it will be competitive given the lack of distribution and much (any) research support1
    • Eliminating 18,000 jobs by 2022 out of a workforce of 91,000 and recognizing €7.4 billion in “restructuring charges” over time, starting with €3 billion in the quarter just ended
    • Halting dividends for 2019 and 2020

The official story, per the Financial TimesThe axe will fall hardest on the investment bank, where the balance sheet allocated to trading will be slashed by 40 per cent. Job cuts will start first thing on Monday morning in London and New York, and three top executives have been replaced…. The new strategy signals a retreat from Deutsche’s global ambitions and its aim to be Europe’s main rival to Goldman Sachs. One year ahead of Deutsche’s 150th anniversary, [CEO] Mr [Christian] Sewing is refocusing the lender on its historic foundations — financing German and European corporate clients and domestic retail banking…. Deutsche has also struck an agreement with regulators to gain more breathing space on its minimum common equity tier one ratio, the most important measure of balance sheet strength.

"The Deutsche Bank As You Know It Is No More": DB Exits Equities In $8.4 Billion Overhaul, To Fire Thousands - The bank which only a decade ago dominated equity and fixed income and sales trading and investment banking across the globe, and was Europe's banking behemoth, is no more. On Sunday afternoon, in a widely telegraphed move, Deutsche Bank announced that it was exiting its equity sales and trading operation, resizing its once legendary Fixed Income and Rates operations and reducing risk-weighted assets currently allocated to these business by 40%, slashing as many as 20,000 jobs including many top officials, and creating a €74 billion "bad bank" as part of a reorganization which will cost up to €7.4 billion by the end of 2022 and which will result in another massive Q2 loss of €2.8 billion, as the bank hopes to slash costs by €17 billion in 2022, while ending dividends for 2019 and 2020 even as it hopes to achieve all this without new outside capital. "Today we have announced the most fundamental transformation of Deutsche Bank in decades. We are tackling what is necessary to unleash our true potential: our business model, costs, capital and the management team. We are building on our strengths. This is a restart for Deutsche Bank – for the long-term benefit of our clients, employees, investors and society", CEO Christian Sewing said in a statement. In what has been dubbed a "radical overhaul", the biggest German lender, unveiled one of the most comprehensive banking restructurings since the financial crisis, closing most of its trading unit and splitting off €74bn of its assets as the struggling German lender calls time on its "20-year attempt to break into the top ranks of Wall Street." The highlights of the "radical transformation" as published by the bank:

  • Creating a fourth business division called the Corporate Bank which will be comprised of the Global Transaction Bank and the German commercial banking business.
  • Exiting the Equities Sales & Trading business and reducing the amount of capital used by the Fixed-Income Sales & Trading business, in particular Rates.
  • Returning 5 billion euros of capital to shareholders starting in 2022, facilitated by a new Capital Release Unit (CRU) to which the bank plans initially to transfer approximately 288 billion euros, or about 20% of Deutsche Bank’s leverage exposure, and 74 billion euros of risk weighted assets (RWA) for wind-down or disposal.
  • Funding the transformation through existing resources including maintaining a minimum Common Equity Tier 1 ratio of 12.5%. The bank expects to execute its restructuring without the need to raise additional capital.
  • As a result, the bank’s leverage ratio is expected increase to 4.5% in 2020 and approximately 5% from 2022.
  • Reducing adjusted costs by 2022 by approximately 6 billion euros to 17 billion euros, a reduction by a quarter of the current cost base.
  • Targeting a Return on Tangible Equity of 8% by 2022.
  • Investing 13 billion euros in technology by 2022, to drive efficiency and further improve products and services.

The Mood Is Pretty Hopeless - Scene Outside Deutsche Bank Offices Evokes Lehman Collapse -At the end of the day, all of the frenzied whispers in the press about Deutsche Bank CEO Christian Sewing's sweeping restructuring hardly did it justice. Instead of moving slowly, the bank started herding hundreds of employees into meetings with HR, first in its offices in Asia (Hong Kong, Sydney), then London (which got hit particularly hard) then New York City.  By some accounts, it was the largest mass banker firing since the collapse of Lehman, which left nearly 30,000 employees in New York City jobless. Although the American economy is doing comparatively well relative to Europe, across the world, DB employees might struggle to find work again in their same field. According to Bloomberg, automation and cuts have left most investment banks much leaner than they were before the crisis, and the contracting hedge fund industry, which once poached employees from DB's equities business, isn't much help. Some employees will inevitably find their way to Evercore, Blackstone - boutique investment banks and private equity are two of the industry's top growth areas - or family offices, which, thanks to the never-ending rally in asset prices (and the return of bitcoin), are also booming.Oh, and of course, there's always crypto. Some evidence has surfaced to suggest that many young bankers are already looking to make the leap.  For the highest-paid employees being let go this week, many will need to get used to lower pay. Some 1,100 'material risk takers' have been let go. On average, they earned $1.25 million, with almost 60% of that in cash.

Meet the JPMorgan Whale that Ate Deutsche Bank’s Stock Trading Business - Pam Martens - Yesterday, Deutsche Bank announced it would be cutting its payroll by approximately 18,000 jobs over the next three years and exiting its stock trading business, along with other restructuring moves like creating a “bad bank” to hold toxic assets. What could possibly force a global bank to shed stock trading? According to the most recent report from the Office of the Comptroller of the Currency (OCC), the regulator of national banks in the United States, four U.S. commercial banks made $8.79 billion in trading revenues in the first quarter of this year. Of that amount, JPMorgan Chase Bank NA represented 60 percent or $5.29 billion. (The other three banks were Citibank, Goldman Sachs Bank USA and Bank of America.)  When it came to stock trading (equity trading), JPMorgan Chase Bank NA really sticks out like a sore thumb. All 5,362 commercial banks and savings associations in the U.S. had stock trading revenues in the first quarter of $2.9 billion, of which just the four banks listed above represented $2.8 billion. And of that $2.8 billion in stock trading revenues, JPMorgan Chase Bank NA captured $2.3 billion or 82 percent. It captured 79 percent of all of the equity trading revenues for all 5,362 banks and savings associations in the U.S. JPMorgan’s stock trading prowess was so overwhelming that Goldman Sachs Bank USA actually lost $63 million trading stock in the first quarter.  If Goldman Sachs Bank USA is having trouble making money trading stocks versus JPMorgan Chase Bank NA, it would seem to follow that Deutsche Bank might be having the same problem. There are two reasons behind JPMorgan’s outsized performance. One reason is captured in this 300-page report by the U.S. Senate Permanent Subcommittee on Investigations’ into the London Whale trading scandal at JPMorgan Chase where it used hundreds of billions of dollars of its bank depositors’ money to engage in risky trading gambles out of London and lost at least $6.2 billion of depositors’ money. As a result of that episode, the OCC issued a cease and desist order against JPMorgan Chase, finding the following: “inadequate oversight and governance to protect the bank from material risk, inadequate risk management processes and procedures, inadequate control over trade valuation, inadequate development and implementation of models used by the bank, and inadequate internal audit processes.” The Senate report also referred to JPMorgan Chase’s equity trading in numerous passages but the bulk of that was redacted so that the American people still have no idea what was really going on. (See Senate Censors Part of Report on JPMorgan About Its Stock Trading.) Despite an FBI investigation into the matter, the bank was never criminally charged for its London Whale conduct.

Mr. Market and the Press Diss Deutsche Bank’s Turnaround Plan - Yves Smith - The beached financial whale known as Deutsche Bank is going to find it awfully hard to get itself back into the drink, let alone find good feeding grounds. After a pop over the news that Deutsche was Doing Something Big, the stock skittered as the CEO Christian Sewing presented more details of the turnaround plan. As we’ll discuss, it didn’t help that the press was unusually skeptical, reflecting the lack of confidence in Deutsche’s scheme among investors and experts.The Wall Street Journal worked up this helpful chart:   Stock prices matter more for sick concerns than for healthy ones1 since their access to credit is usually risky or costly, and if they need more capital or need to fund losses, they have nowhere to go but sell assets or sell new equity. In 2008, leveraged financial firms like the monolines went into death spirals due to the one-two punch of credit and equity funding becoming prohibitively expensive.Mind you, we’re not saying that Deutsche will come to that sort of end. A combination of zombification and amputations is more likely.Nevertheless, shareholders, who were initially relieved that the German bank said it wouldn’t need to raise new capital to implement its makeover, saw upon further inspection that those plans are awfully, erm, ambitious. Everything has to break Deutsche’s way for the bank to claw its way back to mere so-so returns. It has not gone unnoticed that the estimated cost of the cleanup of the bad bank, €7.4 billion, is about half Deutsche’s current market value, and Deutsche has also budgeted €13 billion for patching up its IT systems and another €4 billion on improving controls. As Clive put it yesterday, “So where is the inevitable capital needed to support the restructuring going to come from?” The Financial Times published a long and unusually critical article Monday on Deutsche’s restructuring plan, amplifying doubts that market participants expressed over the weekend about Deutsche’s projected returns:

Deutsche Bank bosses fitted for £1,500 suits as thousands of employees are laid off --Some managing directors at Deutsche Bank’s office in the City of London on Monday were being fitted for suits costing more than £1,000 ($1,250). The same morning, the bank began massive layoffs across the world.Tearful workers were told to pack up their belongings at the bank’s London headquarters just hours after it revealed that 18,000 people would be sacked worldwide by 2022. According to some estimates, around 3,200 people could lose their jobs at the London office. Some 100 people were made redundant from a single floor.Two tailors from Fielding & Nicholson Tailoring were among those pictured leaving the Deutsche London office, holding several suit bags. They were wrongly identified as the bank’s laid-off staff, with their image widely used on Twitter and by the media. One of them, Ian Fielding-Calcutt, who owns the firm, told the Financial News: “Our timing was not great… I think a lot of the people getting laid off were traders of some sort, who don’t wear suits, and so we just went ahead as normal with our clients who obviously weren’t affected by the cuts.”

Deutsche Bank Facing DOJ Probe Over 1MDB After Goldman Throws It Under The Bus  -Just when it seemed that the biggest (if not for long) German bank, already reeling from the biggest mass layoffs since Lehman, couldn't possibly bear any more bad news, along comes the US government with yet another potentially criminal investigation, this time over Deutsche Bank's involvement with the sprawling, multibillion-dollar Malaysian development fraud scandal that toppled a prime minister, crippled Goldman Sachs stock and stretched from Hollywood to Wall Street.According to the WSJ, the DOJ is investigating whether the German bank violated foreign corruption or anti-money-laundering laws in its work for the 1Malaysia Development Bhd. fund, or 1MDB, which included helping the fund raise $1.2 billion in 2014 as concerns about the fund’s management and financials had begun to circulate.So how did Deutsche Bank get thrown into yet another scandal? It turns out that DB was snitched out by former Goldman banker, Tim Leissner, the man who was ground zero in the original 1MDB scandal, and who ended up costing Goldman billions in dollar in market cap as its stock tumbled last year as its role in the biggest Malaysian corruption scandal got exposed, and according to some, cost Lloyd Blankfein his job. As it turns out, Leissner is now cooperating with authorities, and among his "good Samaritan" duties decided to throw the one bank that has more dirt on it than Goldman: Deutsche Bank. As we have reported extensively in the past, prosecutors have been investigating similar issues at Goldman, where Leissner, a former managing director, pleaded guilty last year and admitted to earlier helping siphon off billions of dollars from the fund.  The DOJ has sid the stolen money totals at least $4.5 billion and that it was used to pay bribes to government officials, pad a slush fund controlled by the former prime minister and purchase hundreds of millions of dollars in luxury goods including jewelry, artwork and real estate.

With Three Felony Counts Already, Did JPMorgan Chase Really Need to Own a Ship Containing 20 Tons of Cocaine? -- Pam Martens - Jamie Dimon, Chairman and CEO of the Wall Street mega bank, JPMorgan Chase, has weathered one scandal after another during his tenure, including the bank pleading guilty to an unprecedented three criminal felony counts in the past five years. Now the bank is back in the news for owning a massive container ship which was seized last week in the Philadelphia seaport by U.S. Customs and Border Protection following the discovery of 20 tons of cocaine located in containers on the ship on June 17. The cocaine is estimated to have a street value of $1.3 billion. The vessel is the largest ever to be seized in the 230-year history of U.S. Customs and Border Protection, according to the CBP’s publicly issued statement. Why is a complex bank like this, that clearly doesn’t have adequate risk controls to stay on the right side of the law, being allowed to own a container ship that ended up with $1.3 billion in cocaine in its hull (resulting in about the same dollar amount of damage to JPMorgan’s already sullied reputation)? According to an article in Institutional Investor in June 2017, this one vessel is just a drop in the ocean when it comes to JPMorgan’s shipping assets. The publication states that “J.P. Morgan Global Alternatives has $1.26 billion in institutional client capital dedicated to shipping strategies, and says it ranks in the top 5 percent of ship owners globally.” JPMorgan Chase owns a federally-insured, taxpayer-backstopped bank with more than 5,000 retail branches with mom and pop customers across America. It holds $1.6 trillion in deposits. When it gets charged with criminal felonies or exposed for owning a vessel transporting 20 tons of cocaine, it puts taxpayer money at serious risk and raises safety and soundness issues. There is something perversely insane about the largest bank in America being in “the top 5 percent of ship owners globally.” But JPMorgan Chase is not alone in its stealth ownership of industrial assets. The Federal Reserve Bank of New York issued a study in July 2012 titled “A Structural View of U.S. Bank Holding Companies.” The report revealed an astonishing level of encroachment by the mega banks on Wall Street into the industrial side of the U.S. economy.

Fed official hints at changes to large-bank capital buffer — The Federal Reserve Board's top regulatory official on Thursday suggested the central bank is is reviewing the framework behind the countercyclical capital buffer. The Fed can use the buffer, often referred to as the CCyB, to require banks with more than $250 billion in assets or $10 billion in nonbank liabilities to hold additional capital while economic conditions are robust to offset potential losses from elevated risk. But in public remarks, Fed Vice Chairman for Supervision Randal Quarles said the CCyB essentially had become redundant. The central bank has never actually deployed the tool, yet Quarles said that is a technicality. More standard capital levels have grown so high that banks' total amount of loss protection has reached a level consistent with a buffer being in place. “As we calibrated our through-the-cycle requirements in the United States, we calibrated them at the very high end everywhere, in some cases doubling what the international minimums were agreed to,” he said at an event hosted by the Bipartisan Policy Center. “It’s perfectly sensible to do that, but the effect of it is, is that our countercyclical capital buffer is effectively on.” Although the CCyB has never technically been used, the Fed has “created an extra amount of capital so that every time we sit down and look at financial stability risks, the capital in the banking sector is such that it says the risks are not meaningfully above normal,” said Quarles. As such, the capital cushions banks are required to hold effectively combat any financial stability risks, he added. “The reason for a countercyclical capital buffer would be to say that as you come to a place where financial stability risks are rising, you would add more capital into the sector in order to reduce that leverage so you could get to the conclusion that we keep coming to, which is that risks are not meaningfully above normal,” he said. “We have never had to do that.” Quarles suggested the British model for a countercyclical capital buffer framework might be more appropriate and is something the U.S. “should think about.” “They’ve increasingly come to view that the principal benefit of this buffer is less, if you will, to row against the current in the boom time and more to be able to turn something down in the down part of the cycle,” he said. In that sense, the buffer is “always on as a flexible layer of capital at the top,” he added.

Simplified stress test metric will be ready by 2020: Fed’s Quarles — The Federal Reserve Board could have a simpler measure of a bank's capital adequacy ready for use by the next round of stress tests in 2020, the agency's top regulatory official said Tuesday. Randal Quarles, the Fed's vice chairman for supervision, said the central bank will finalize the so-called stress capital buffer “in the near future,” deploying one of the most significant revisions to the Fed’s post-crisis stress testing program. Under the current stress test methodology, banks must hit minimum targets for roughly 20 metrics of their capital strength. But last year the Fed proposed replacing several of those measures with the stress capital buffer, or SCB, a unique baseline for each bank to meet based on its capital losses in the previous year's test. Quarles said he believes the SCB would make the Fed’s capital framework simpler, without making it any more or less stringent. He suggested that the rule would be completed swiftly; presumably it would be in place ahead of next year’s stress tests. In some cases, the number of metrics banks would have to meet would be reduced by over half. “The stress capital buffer would not reduce the stringency of the regulatory capital framework for large banks, but it would affect a substantial simplification of that framework,” Quarles said at a conference on stress testing hosted by the Federal Reserve Bank of Boston. “I expect that we will move forward with a revised stress capital buffer proposal in the near future, reflecting many of the comments received on our original proposal.” Quarles emphasized that neither the SCB proposal nor any of the Fed’s other proposals are meant to reduce bank capital. “Stress tests should be regular, rigorous, and dynamic,” Quarles said. “And the banks’ performance on these tests will continue to be the most risk sensitive and consequential assessment of the affected banks’ capital requirements.”

Banks push for greater relief on foreign bank regs, living wills — The banking industry is urging federal regulators to go further in streamlining oversight of foreign banks and resolution-planning requirements, while critics are warning that the plans could weaken safeguards put in place after the financial crisis. At issue are two separate proposals required by the regulatory relief law enacted last year — one tackling foreign banks' supervisory requirements and the other concerning the quality and timing of so-called living wills that banks are required to file. While the industry largely supported both, many financial institutions were particularly critical of a plan to boost liquidity requirements for certain foreign firms. Under the new guidance, all intermediate holding companies that house the U.S. operations of foreign firms would be subject to liquidity requirements, which would rise by roughly 0.5% to 4% in aggregate. But banking industry representatives argue the plan inappropriately disadvantages foreign banks in the U.S. because of a perceived mistrust of their parent company. “The proposed framework appears predicated on the view that an FBO," or foreign banking organization, "is a source of risk — rather than a source of strength — for its U.S. operations,” wrote Greg Baer, CEO of the Bank Policy Institute, and Rob Nichols, the president and CEO of the American Bankers Association, in a joint comment letter. The proposal to raise capital and liquidity requirements was issued jointly by the Fed, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency. The central bank also issued its own proposal to implement four new risk-based categories — with different degrees of corresponding requirements — for foreign banking giants' U.S. subsidiaries to establish enhanced prudential standards. Taken together, banks warned, the new regulation could actually punish foreign banking organizations and undermine fairness and transparency. A number of commenters also expressed concern that intermediate holding companies would be judged on a parent institution’s combined U.S. operations, which could result in an imbalance between how IHCs and U.S. bank holding companies are treated, according to the Committee on Capital Markets Regulation. 

Regulators exempt community banks from Volcker Rule — Federal regulators on Tuesday finalized a proposal excluding community banks with less than $10 billion in assets from the Volcker Rule. Last year’s bill reforming the Dodd-Frank Act required the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corp., National Credit Union Administration, Securities and Exchange Commission and Commodity Futures Trading Commission to issue a regulation exempting smaller banks from the proprietary trading ban. The agencies' February proposal exempted banks with less than $10 billion in assets or trading assets that represent less than 5% of total consolidated assets from the rule on Feb. 8. The exemption will be effective upon publication in the Federal Register. Banks of all sizes have opposed the Volcker Rule since it was conceived by former Fed Chairman Paul Volcker in 2009. The agencies have been working for years to come up with regulatory fixes for the trading ban for banks still covered by it, but a proposal last year left many in the industry unsatisfied, leading some to call on the regulators to scrap the proposal and start over.

 Wall Street Banks Are Starting To Give Up On Lending To Farmers - After years of farm income falling and the U.S./China trade war now taking its toll on the sector, Wall Street banks look as though they are giving up on lending to farmers, according to Reuters. Meanwhile, total U.S. farm debt is slated to rise to $427 billion this year, up from an inflation adjusted $317 billion just 10 years ago. The debt is reaching levels not seen since the 1980's farm crisis. Agricultural loan portfolios of the nation's top 30 banks was lower by $3.9 billion, to $18.3 billion between their peak in December 2015 and March 2019. This is a 17.5% fall.An analysis performed by Reuters identified the banks by their quarterly filings of loan performance with the FDIC and grouped banks that were owned by the same holding company.The slide in farm lending is happening as cash flow worries surface for farmers. We've highlighted numerous instances of farmers under pressure due to the U.S./China trade war and poor conditions, like this report from early June and this report on farmer bankruptcies from May.   Sales of products like soybeans have fallen significantly since China and Mexico imposed tariffs in retaliation to U.S. duties on their goods. The trade war losses exacerbated an already strained sector, under pressure from "years over global oversupply and low commodity prices."Chapter 12 bankruptcy filings for small farmers were up from 361 filings in 2014 to 498 in 2018. Minneapolis-St. Paul area bankruptcy attorney Barbara May said: “My phone is ringing constantly. It’s all farmers. Their banks are calling in the loans and cutting them off.”At the same time, surveys are showing that demand for farm credit is growing. The demand is most pronounced among Midwest grain and soybean producers. Having fewer options to borrow could threaten the survival of many farms, especially when incomes have been cut in half since 2013.  Gordon Giese, a 66-year-old dairy and corn farmer in Mayville, Wisconsin, was forced to sell most of his cows, his farmhouse and about one-third of his land last year to pay off his debt obligations.

Wall Street Beware: The Public Banking Movement Is Coming for You - It may not come as a surprise to hear that the majority of Americans don’t trust the banking system in this country. Only 27 percent of those surveyed in a 2016 Gallup poll said they had “a great deal” or “quite a lot” of confidence in the institution — less than half of the record high set in 1979. And the lack of trust is spread relatively evenly across the political spectrum — it’s not just liberals or those on the left: Almost everyone is fed up with the banks.  And if banking institutions don’t exactly spark joy, their lead characters — morally bankrupt investment bankers whose greed and arrogance almost singlehandedly collapsed the entire country’s economy — certainly don’t spark joy either. It’s an old story: Bankers made obscene amounts of money destroying the economy, we bailed them out, they walked away from it all without a shred of accountability and there’s nothing anyone can do about it. But that’s not where the story has to end. Spurred by the need for an alternative to the for-profit, extractive model of finance exemplified by Wall Street, there is a budding movement in the United States that is working to reimagine banking as an institution that truly serves the public. Public banking is an old idea, but it has never been very common in the United States. The first and only public bank in the country was founded exactly 100 years ago in North Dakota, and it wasn’t until relatively recently that the idea has begun to find new life in cities and states across the country. Growing largely out of the need for more democratic ownership over capital, the aim of this budding movement is to create a robust public banking infrastructure across the nation that is rooted in the principles of economic, environmental, racial and social justice.

Credit Derivatives Are Losing Popularity As Corporate Bond Managers Shift To ETFs For Hedging - Investors in corporate bonds are seeking out new ways to reduce their risk and gain market exposure as bond prices soar - and they're looking increasingly toward ETFs instead of traditional credit derivatives, according to Bloomberg.Trading volume in products like exchange traded funds and total return swaps is increasing at the same time as volume for credit derivatives has stagnated or, in some cases, fallen. For example, volume for the Markit iTraxx Europe Crossover credit default swap index has dropped around 40% this year. This goes to show that credit derivatives are beginning to lose their popularity after being an important way for investors to hedge market exposure quickly. While the corporate bond markets were tanking last year, liquid high-yield bonds weakened more than the high-yield credit derivative index. Matt Toms, chief investment officer for fixed income at Voya Investment Management said: "Credit hedges don’t need to match underlying bonds perfectly -- ideally, they should be more liquid and volatile to provide better protection." He continued:  "This is an environment where you’re meant to be looking for what’s the most effective and cheapest hedge for your portfolio. We think there are reasons to use both swaps and ETFs."  Investors have complained about tracking errors in credit derivatives for years and, despite improvements, a number of money managers are embracing new products like ETFs that can more closely track the market. Trading in the largest high-yield ETF was up more than 30% from the same period last year in Q1.

Hedge Funds Post Best First Half In A Decade, But Quants Crippled - Six months after the worst year for hedge funds since 2011, the 2 and 20 community is enjoying a renaissance of sorts, with the hedge funds universe reporting the best first half performance since 2009, as equity managers piggybacked on surging stocks. According to Hedge Fund Research, funds rose 5.7% from January through June, with equity funds were the best-performing broad strategy, gaining almost 9% in the period, if still underperforming the S&P significantly.  Using a trite cliche, Rob Christian, head of investment research at K2 Advisors, told Bloomberg TV that "it’s a stock-picking market, definitely” even though what he really meant is that it's a dovish central bank-picking market as the main reason for the stock surge in 2019 had everything to do with the surprise dovish reversal by the Fed, which is now expected to cut rates in three weeks, something that has "been most favorable for equity long-short managers, and particularly managers with a growth tilt." Courtesy of Bloomberg, this is how some of the more notable hedge funds did in the first half. Of course, as noted above, the hedge fund gain pales in comparison to the S&P 500 Index, which returned almost 19% in this year’s first six months. Furthermore, one did not have to pay 2% of assets and 20% of the upside to some billionaire if one simply had bought SPY ETFs on January 1, thanks to central banks who for the past decade have been the market's chief risk officers, springing to action when there is a risk of even a modest 10% correction.

 Why Morgan Stanley Just Cut Its Stock Allocation To The Lowest On Record - As we first reported on Sunday afternoon, after weeks of warning that the fun was coming to an end, Morgan Stanley's head of cross-asset strategy Andrew Sheets, had enough foreplay and writing that he was "Putting Our Money Where Our Mouth Is", downgraded Morgan Stanley's allocation to global equities from equal-weight to underweight, effectively telling the bank's millions of "wealth managed" clients to sell stocks.Then, overnight, Morgan Stanley's entire cross-asset team, including equity doomsayer Michael Wilson, published a n ote explaining the bank's rationale for this unprecedented move to turn bearish at a time when penguin after penguin analyst after analyst was chasing the S&P into record high territory, and revising their forecasts higher by the day (here's looking at you Barclays and your "Melt-up scenario now the base case").As the bank writes, "we're reducing our overall equity weight via reduction in US and EM equities, the regions with the lowest upside to our 12-month price targets. Our global equity weight is now -4 (on a scale of +10 to -10)" which is the lowest since the bank initiated coverage in 2014, in other words on record. The reason for the bank's sudden bearish turn is that in its view, the expected risk-adjusted returns for global equities have fallen sharply, "under both Morgan Stanley forecasts and our top-down cycle-adjusted numbers", and combined, the average expected return for global stocks is near a six-year low. What are the reasons for this gloomy forecast? As the bank explains, three broad dynamics drive a more cautious equity view:

  1. Valuations/expected return: Higher prices now mean our expected 12-month returns for global equities are near their lowest levels in six years. That result is similar based on bottom-up Morgan Stanley forecasts or top-down approaches.
  2. Fundamentals: Those valuations face additional pressure as we think consensus earnings in the US, Europe, Japan and emerging markets remain too high. Meanwhile, continued weakness in global PMIs and commodity prices suggests that the economic risks are real.
  3. Technicals: While positioning isn't heavy and sentiment is far from 'euphoric', we see worrying signs in other 'technical' factors including market leadership and seasonality. Meanwhile, crowding does look significant within sector and style

Charts Suggest the Dow Index Is Being Painted to Get “New Highs” in the Market – Pam Martens - What we need today is a real life character like Vinny Gambini in the movie My Cousin Vinny to take over the questioning for the U.S. Senate Banking Committee – like Ferdinand Pecora did in the early 1930s to root out the systemic frauds in the stock market of that era. Gambini would haul the heads of equities trading for each of the major Wall Street banks and their Dark Pools to a hearing, put them under oath, and grill them about the highly suspicious trading activity that is going on in today’s markets.Let’s start with what happened yesterday. In the face of punk earnings forecasts for the rest of this year and a growing global economic slowdown, the Dow Jones Industrial Average hit a historic milestone, closing above 27,000 for the first time. But the rising tide didn’t lift all boats: eight of the Dow’s 30 stock components closed in the red. Those stocks were Chevron, Verizon, McDonald’s, Apple, Travelers, Johnson and Johnson, Pfizer, and Merck.There was something else that raises suspicious red flags to veteran chart watchers. A big spurt in some of the Dow stock components magically occurred in the final 15 minutes of trading, like some mystical, invisible hand had decided to levitate these share prices before the closing bell.To the thinking of Wall Street veterans who are still capable of human intelligence, as opposed to relying solely on algorithms and artificial intelligence software, when there is an unnatural spike in prices toward the end of the day and it occurs on abnormal trading volume, it’s not likely an intervention by the Gods of the market but far more likely that someone (or a cartel that we see so frequently these days) is painting the tape. It only takes a handful of high-priced stocks to really move the needle in the Dow. That’s because it’s a price-weighted index of just 30 stocks. As Mark DeCambre at Dow Jones’ MarketWatch reported yesterday after the market closed, just three stocks in the Dow have been responsible for 970 points of that 1,000-point move in the Dow since its 26,000 milestone on January 17, 2018. Visa accounted for 390 points; Microsoft accounted for 324 points and McDonald’s accounted for 256 points. That’s not exactly what one would call a broad-based rally. The share price of both Microsoft and Visa spiked in the final 15 minutes of trading yesterday on unusually heavy volume compared to the rest of the day. (See charts below.) And the same thing happened in Verizon and WalMart, also components of the Dow.

Facebook’s Libra Currency Monetizes Identity and Threatens Privacy - NEP’s Bill Black appears on The Real News Network and discusses Feacebook’s new proposed crypto-currency, called “Libra.” Facebook could use this technology to standardize identity and create a world of ultimate surveillance, and then profit from it. You can view here with a transcript.

Libra and Financial Inclusion - Adam Levitin, Credit Slips - Facebook’s proposed Libra cryptocurrency project has truly stirred up a hornet’s nest of controversy.  Critics have generally focused on Libra as a currency and the power of Facebook in society and its appropriation of users’ privacy.  I think that discussion misses a key point.  Libra will be, first and foremost, a payment system.  It will be a payment system that happens to operate using a currency index, rather than a single country’s currency, and clear using blockchain rather than other clearing software, but it’s still a payment system, that is a system for moving value between parties.  The payment system aspect is what both makes me incredibly skeptical about Libra’s financial inclusion claims and about Libra’s prospects for success.  Libra Brings Nothing New to the Table for Financial Inclusion. The Libra white paper pitches the product as facilitating financial inclusion.  The little discussion it has, however, is completely confused and shows just how little the Libra team has thought about financial inclusion.  For starters, the Libra folks are conflating three very different problems:  developed countries under-banked, developed country unbanked, and developing country unbanked.  To wit, the white paper starts by talking defining the problem that Libra hopes to solve.  Thus, in the first paragraph, it cites some global figures for the unbanked, virtually all of whom are in the developing world, but then gives an example of the high cost of payday loans, a developed world product that is available only to people with bank accounts.  Not an auspicious start, although in fairness, there's a lot of confused discussion on the underbanked/unbanked even from academics.Now Libra does explain some of the m ain reasons that people in the developed world are unbanked:  insufficient funds (which I think encompasses the volatile financial lives of low-income households), high and unpredictable fees, lack of convenient locations, and lack of necessary documentation.  So let’s ask how a blockchain-based cryptocurrency payment system addresses these problems.

Winklevoss Twins Offer Truce To Zuckerberg- May Join Libra Project  -In what appears to be a peace offering, ending years of bad blood between some of the world's richest people, Tyler and Cameron Winklevoss, co-founders of the New York-based crypto exchange Gemini, and the people who lost out on tens of billions after Mark Zuckerberg stole their Facebook concept website, HarvardConnection, may soon join the Libra Association, the consortium governing Facebook’s proposed cryptocurrency.“We’re definitely looking at it in earnest and we’re excited about the project,” Cameron told CoinDesk Tuesday.Tyler, who along with his brother made billions by being early investors in bitcoin, added that in their view, Libra is a harbinger of cryptos to come:“Our feeling is, this is the first of many FANG [Facebook, Amazon, Netflix and Google] companies to have a token project. Our prediction is in the next 24 months almost every FANG company will have a coin or be working on some sort of project.”  As Coindesk notes, while joining Libra might be a surprise move to some, considering the Winklevoss brothers’ legendary fight over control of Facebook with their former Harvard classmate, CEO Mark Zuckerberg, they now want to be “frenemies”with a mutual goal of promoting mainstream crypto adoption. Additionally, the twins are aiming to diversify Gemini’s token offerings by 2020, and recently applied for a broker-dealer license through the FINRA, which would allow Gemini to list digital securities.   The Libra white paper, unveiled last month, envisions “a competitive network of exchanges buying and selling Libra,” enabling holders to easily convert the coin, backed by a basket of stable government currencies, into local fiat. So far, only one crypto exchange, Coinbase, has joined the Libra Association, whose ranks also include traditional financial players such as PayPal, Visa and Mastercard and VC firms such as Union Square Ventures and Andreessen Horowitz. Additionally, since the Winklevoss are also invested in both Filecoin and Tezos, those might offer examples of the types of “utility tokens” they’d like to offer on the exchange with regulatory approval, Tyler said.

Jerome Powell: Facebook's Libra poses potential risk to financial system- Federal Reserve Chairman Jerome Powell on Wednesday said Facebook's planned Libra digital currency raises "many serious concerns" including potential risks to the stability of the financial system because of the huge user-base of the social media giant. At a House Financial Services Committee hearing, Powell said the central bank has a working group that's looking at Libra. He added that the Financial Stability Oversight Council — a group that includes top financial regulators across the government — convened a staff-level meeting last week on Facebook's plans. "While the project's sponsors hold out the possibility of public benefits, including improved financial access for consumers, Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability," he said. "These are concerns that should be thoroughly and publicly addressed before proceeding." Powell's comments illustrate the growing concern in Washington about Facebook's sweeping plans to become a force in the financial system. The company will face questions about Libra in back-to-back House Financial Services and Senate Banking Committee hearings next week.

Bitcoin falls sharply as Fed’s Powell flags ‘serious concerns’ about Facebook’s cryptocurrency - Bitcoin is sliding after Federal Reserve Chairman Jerome Powell poured cold water on Facebook’s plans to launch a cryptocurrency. The world’s best-known digital coin — which has experienced a meteoric rise in 2019 — fell 12% to about $11,300 on Thursday, according to CoinDesk data. Bitcoin had hit a 17-month high above $13,000 just two weeks ago. It’s currently up about 200% since the start of the year, having gathered momentum as large companies like Facebook and Fidelity get involved in the space. But it began sliding as Powell said that he held “serious concerns” about Facebook’s planned digital currency Libra. The social network is looking to launch the token alongside a consortium of companies including Uber and Visa. “Libra raises serious concerns regarding privacy, money laundering, consumer protection, financial stability,” Powell said at a congressional committee Wednesday. “These are concerns that should be thoroughly and publicly addressed.” Facebook’s Libra takes the form of what’s known as a stablecoin. These are cryptocurrencies that are often pegged to currencies like the dollar. In Libra’s case, the token is backed by a group of government currencies and debt securities. Analysts have been bullish on Libra, at least from the perspective that it could pave the way for more adoption of cryptocurrencies. But the Facebook-led project has been clouded by regulatory concerns, with central bankers and politicians around the world expressing skepticism.

Fed Chief Calls For Facebook To Halt Libra Project Until Concerns Addressed (Reuters) - U.S. Federal Reserve Chairman Jerome Powell said on Wednesday that Facebook’s (FB.O) plan to build a digital currency called Libra “cannot go forward” until serious concerns are addressed, comments that pressured the project and dented the price of the original cryptocurrency bitcoin. The strong comments from the most powerful U.S. financial regulator underscored the growing regulatory hurdles facing the proposed cryptocurrency, which has drawn scrutiny from policymakers globally. “Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability,” Powell said during his semi-annual testimony on monetary policy before the U.S. House of Representatives Financial Services Committee. “I don’t think the project can go forward” without addressing those concerns, he added later. Powell said any regulatory review of the project should be “patient and careful.” He noted that existing rules do not fit digital currencies. “It’s something that doesn’t fit neatly or easily within our regulatory scheme but it does have potentially systemic scale,” he said. “It needs a careful look, so I strongly believe we all need to be taking our time with this.” “We are very much aligned with the Chairman around the need for public discourse on this,” Facebook spokeswoman Elka Looks said in an email. “This is why we along with the 27 other Founding Members of the Libra Association made this announcement so far in advance, so that we could engage in constructive discourse on this and get feedback.”

Trump plows into Libra debate as politicians face crypto learning curve - For those politicians who put off their crypto education, Facebook's Libra is a wake-up call. And President Trump's Twitter account made that call impossible to ignore. Overnight, Trump slammed cryptocurrency as being "based on thin air," calling it "unAmerican," and praised the U.S. dollar as the "only one real currency" and "by far the most dominant currency anywhere in the world." Trump also suggested Facebook should apply to become a fully licensed bank. Trump's tweets coincided with his Thursday social media summit, and came shortly ahead of congressional hearings that should discuss a complex bill to bring clarity to how Facebook's project will be regulated. And Federal Reserve Chairman Jerome Powell this week cast doubt on Facebook's readiness to operate Libra. Politicians in other countries are also pouncing on Libra. In China, which is in the midst of a trade dispute with Trump, officials are calling for the central government's digital currency project to move faster. Regulators in Japan have expressed concern about Facebook's multicurrency stablecoin model for Libra, and officials in Europe have accused Facebook of planning a "shadow bank." Even so, the issue wasn't top of mind for most politicians — until Facebook got involved. In the U.S., the main bill that would create U.S. policy regarding Libra, the Token Taxonomy Act of 2019, was introduced in late 2018 and reintroduced in April 2019 with added sponsors. The bill would exclude certain currencies from a definition of “security” that dates to the New Deal, creating a new form of “currency,” and would take a step toward much-needed regulatory clarity for merchants and consumers when using cryptocurrencies such as Libra for retail payments. But the underlying issues remain complex, and members of Congress are still getting up to speed on how the cryptocurrency market operates, according to Mike Minihan, a partner and tax specialist at BX3 Capital, an advisory firm. “When we discussed the Token Taxonomy Act with [congressional staff] around the December introduction, one issue they said they were having was members of Congress didn’t have an educational foundation to pass the Token Taxonomy Act,” Minihan said. “One thing Libra will do is force the issue. It will get the Taxonomy Act to the head of the line.”

Facebook to be slapped with $5 billion fine for privacy lapses, say reports - The Federal Trade Commission approved an approximately $5 billion settlement with Facebook over the company’s 2018 Cambridge Analytica scandal, a person familiar with the matter told The Wall Street Journal. Several other news outlets separately reported the approval.The fine represents the largest ever imposed by the FTC against a tech company. Previously, the agency’s largest fine against a tech company came in 2012 when Google agreed to pay a $22.5 million penalty due to its privacy practices. The fine would represent approximately 9% of Facebook’s 2018 revenue.The settlement drew criticism from a number of senators and Congress members, including Democratic Sen. Mark Warner.  “Given Facebook’s repeated privacy violations, it is clear that fundamental structural reforms are required,” Warner said in a statement on Friday. “With the FTC either unable or unwilling to put in place reasonable guardrails to ensure that user privacy and data are protected, it’s time for Congress to act.” Republican Congressman David Cicilline called the settlement “a slap on the wrist.”“This fine is a fraction of Facebook’s annual revenue,” he said in a statement on Friday. “It won’t make them think twice about their responsibility to protect user data.”Facebook took a one-time charge of $3 billion in anticipation of the FTC fine in April in the company’s first-quarter results. The FTC approved the settlement by a 3-2 vote along party lines with Republicans in favor and Democrats against, and will now be reviewed Department of Justice, the report said.

Google workers can listen to what people say to its AI home devices -  Google acknowledged its contractors are able to listen to recordings of what people say to the company’s artificial-intelligence system, Google Assistant.The company admitted on Thursday that humans can access recordings made by the Assistant, after some of its Dutch language recordings were leaked.Google is investigating the breach.The recordings were obtained by the Belgian public broadcaster VRT, which reviewed more than 1,000 audio clips and found 153 had been captured accidentally.Google Assistant begins automatically recording audio when prompted by a user, usually by saying a wake-up word or phrase like, “OK, Google”.Google says contractors listen to recordings to better understand language patterns and accents, and notes that recordings may be used by the company in its user terms. This feature can be turned off, but doing so means Assistant loses much of its personalized touch.A spokesman for the company told Wired only 0.2% of all recordings are accessed by humans for transcription, and that the audio files are stripped of identifying user information.However, the report from VRT found recordings of users that had identifiable information, including one person’s address and other personal information, like a family discussing their grandchildren by name, another user discussing their love life, and one user talking about how quickly a child was growing. In 2017, Google confirmed a bug in its Home Mini speaker allowed the smart device to record users even when it was not activated by the wake up word. A Bloomberg report earlier this year also revealed Amazon’s Alexa voice technology uses contractors to review recordings, which Amazon later confirmed.

Agencies release update on capital proposal for CRE assets -- — The federal banking regulators issued a new proposal Friday asking for further public comment on changing the definition of a “high volatility commercial real estate exposure.” The agencies initially including HVCRE assets among a series of capital-related changes for small banks in a September proposal. But in a rule published Tuesday, the agencies — including the Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency — finalized the other capital changes but said they would address HVCRE in a subsequent proposal. The September proposal asked for public comment on matching the definition of a “high volatility commercial real estate exposure” with that of a “high volatility commercial real estate acquisition, development or construction loan.” The regulators also proposed that one- to four-family residential properties be excluded from the definition of an HVCRE exposure. But after reviewing comments from that proposal, the agencies decided that the regulatory capital treatment of those high-risk commercial real estate loans should be clarified further. The September proposal would still stand, but the regulators now want to add a new paragraph making clear that credit facilities that finance land development activities would not be exempt from an HVCRE exposure. “Allowing banking organizations to apply a consistent definition of one- to four-family residential property and land development in this manner would simplify reporting requirements, reduce burden and promote uniform application of the capital rule,” the regulators said in their new notice of proposed rulemaking. In 2017, the regulators first proposed making changes to the capital treatment of HVCRE and other assets for banks that opt out of using the “advanced approaches” framework for calculating their capital requirements, which tend to be banks with less than $250 billion in assets.

In reversal, FHFA defends constitutionality of its leadership structure — The Federal Housing Finance Agency has reversed course and will now defend the constitutionality of its single-director structure.Similar to claims about the Consumer Financial Protection Bureau's structure, investors in the mortgage giants Fannie Mae and Freddie Mac have argued the FHFA violates the separation of powers because its single-director structure means shareholder interests may not be considered. Currently, the director of FHFA can only be fired by a president “for cause.” After a federal appeals court reversed a previous court’s decision last year and agreed with the shareholders, former acting FHFA Director Joseph Otting’s decision said in January that the agency would no longer keep fighting the case. But that decision has been overturned by FHFA Director Mark Calabria, who was confirmed as head of the agency in April.In a letter Tuesday to the U.S. Court of Appeals for the Fifth Circuit in Texas, a counsel for Calabria said that the FHFA’s position moving forward is that its structure under the Housing and Economic Recovery Act is constitutional. Calabria was a Senate staffer when HERA was being drafted.“FHFA respectfully requests that, to the extent the Court finds it necessary to reach the constitutional issue, the Court uphold FHFA’s structure,” wrote Robert J. Katerberg, a partner at Arnold & Porter, who is representing Calabria and the FHFA.The appeals court had ruled that the FHFA was “unconstitutionally insulated from executive control” since its single director — as opposed to a board or commission — cannot be fired by a sitting president without cause.

House votes to protect VA loans, promote counseling for FHA borrowers — The House passed two bipartisan financial services bills Tuesday that would aim to preserve affordable mortgage options for military veterans and encourage first-time time homebuyers to participate in housing counseling programs. The Protect Affordable Mortgages for Veterans Act of 2019 was introduced by Reps. David Scott, D-Ga., and Lee Zeldin, R-N.Y. It would clarify that certain refinanced loans backed by the Department of Veterans Affairs can be securitized by Ginnie Mae. This legislation would address technical complications that arose from last year’s regulatory relief law, the Financial Services Committee said in a press release. Sens. Kyrsten Sinema, D-Ariz., and Thom Tillis, R-N.C., have sponsored a Senate version that passed in June. “This bipartisan legislation will preserve critical VA refinancing protections for our veterans while at the same time allowing for these orphaned veteran loans to be securitized,” Scott said in a statement. “Making this change will free up liquidity, enabling lenders to make new loans and ensuring that veteran borrowers have access to the VA home loan benefits they have earned.” The bill would “allow lenders greater compliance certainty and better ensure that loans are not erroneously pooled into Ginnie Mae securities going forward,” Bill Kilmer, the senior vice president of legislative and political affairs at the Mortgage Bankers Association, said in a statement. The Housing Financial Literacy Act of 2019, which was introduced by Reps. Joyce Beatty, D-Ohio, and Steve Stivers, R-Ohio, would offer first-time Federal Housing Administration borrowers a 25-basis-point discount on insurance premiums if they were to complete a housing counseling program. “Motivating first-time homebuyers to seek vital pre-purchase counseling and equipping them with the much-needed financial skills and tools to make informed financial decisions benefits their families, the surrounding neighborhood, and our entire economy,” Beatty said in a statement when the bill passed the Financial Services Committee in June. Both bills passed the House by voice votes. The Protect Affordable Mortgages for Veterans Act of 2019 now moves to President Trump’s desk for final approval before it becomes law. Subscribe

Pre-Foreclosures Are Spiking Across New York City - Pre-foreclosures are spiking in New York City according to a new PropertyShark analysis. On a quarter over quarter basis, they are up an astounding 31%. Analysis for New York indicated that the city saw 3,070 properties entering pre-foreclosure for the first time in Q2. According to the report, foreclosures are likely to increase in coming quarters based on these numbers. And it wasn’t just Manhattan: each borough saw a significant spike, with Brooklyn coming in at 43%, Staten Island coming in at 43% and the Bronx coming in at 41%. Manhattan and Queens were both at 17%. At least for now, foreclosures seem to be holding steady in the city. But that likely won’t last. First time foreclosures were down 4% year-over-year in Q2 with a total of 847 properties foreclosed during the quarter. The city saw a drop of 3% in unique foreclosure cases. Cases in Queens dropped 9% but the borough saw the largest number of foreclosure cases with 324 in Q2. At 13%, Brooklyn saw the largest quarter over quarter percentage increase in foreclosures as well as a 7% rise in foreclosures year-over-year. 242 properties were foreclosed on in Brooklyn and the borough saw 1,040 unique cases of pre-foreclosure filings in Q2, marking year-over-year growth of 21%. Staten Island saw foreclosure activity of 9% with 159 homes being foreclosed. The steepest drop in foreclosure activity happened in the Bronx, where just 96 homes headed to the auction block in Q2. Foreclosure cases were down 24% year-over-year and 36% sequentially in the borough. Foreclosures in Manhattan remained largely unchanged on a year over year basis. But based on the pre-foreclosure numbers, we expect these foreclosure numbers will eventually tick much higher in coming quarters.

MBA: Mortgage Applications Decreased in Latest Weekly Survey  From the MBA: Mortgage Applications Decreased in Latest MBA Weekly Survey Mortgage applications decreased 2.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 5, 2019. This week’s results include an adjustment for the Fourth of July holiday.... The Refinance Index decreased 7 percent from the previous week and was 88 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index decreased 18 percent compared with the previous week and was 6 percent higher than the same week one year ago....“Mortgage applications were down slightly, even after adjusting for the July 4th holiday, as we saw opposing moves in purchase and refinance applications over the week. Purchase applications increased from the previous week and were up 5 percent from a year ago, a continuation of the strong annual growth that we saw in the first half of 2019. Refinance activity decreased over 6 percent and the refinance share of applications fell back below 50 percent, even as the 30-year, fixed-rate declined 3 basis points to 4.04 percent," said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. "Borrowers have been less sensitive to low rates as many borrowers have either recently refinanced or are likely waiting for rates to fall even further. Other mortgage rates in our survey were unchanged or slightly higher than in the previous week.” ...  The average contract interest rate for 30-year, fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.04 percent from 4.07 percent, with points increasing to 0.37 from 0.36 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

House Prices to National Average Wage Index - One of the metrics we'd like to follow is a ratio of house prices to incomes. Unfortunately most income data is released with a significantly lag, and there are always questions about which income data to use (the average total income is skewed by the income of a few people).  And for key measures of house prices - like Case-Shiller - we have indexes, not actually prices.  But we can construct a ratio of the house price indexes to some measure of income.  For this graph I decided to look at house prices and the National Average Wage Index from Social Security. Note: For a different look at house prices and income, see this post (using median income). This graph shows the ratio of house price indexes divided by the National Average Wage Index (the Wage index is first divided by 1000). This uses the annual average National Case-Shiller index since 1976. As of 2018, house prices were somewhat above the median historical ratio - but far below the bubble peak.  Prices have increased a little more in 2019, but house prices relative to incomes are still way below the 2006 peak (but slightly above the 1989 peak). Going forward, I think it would be a positive if wages outpaced, or at least kept pace with house prices increases for a few years.  Note: The national wage index for 2018 and 2019 is estimated as increasing at the same rate as in 2017.  House prices in 2019 are estimated to increase the same as the Year-over-year change in April (3.5%)

Lots of folks over 65 are spending a lot on housing. - The Census has a nice tool that allows one to map American Community Survey data by counties (at least counties with sufficient population to develop estimates based on samples).  I drew two today.  This first one is the share of those renters over the age of 65 who pay more than 30 percent of their income on rent.  The second one is the share of those owners over the age of 65 who spend more than 30 percent of their income on homeowning. The picture for elderly renters is pretty grim: in most counties that are mapped 45 percent or more are spending more than 30 percent of their income on rent.  So one may take a small amount of comfort in the fact that the 78 percent of those over 65 are homeowners.  But in the median county mapped here,  a quarter of those over the age of 65 pay more than 30 percent on housing cost.  This is because such people have either not paid off their mortgage, or have high property taxes. Altogether, about 55 percent of those 22 percent of the 65+ households who rent pay more than 30 percent of their income in rent, and 26 percent of the 78 percent who own pay more.  This means nearly 1/3 of those over the age of 65 live in an unaffordable house. It is hard to imagine things getting better.  The old population is growing quickly--the very old population is growing even more quickly.  As people age, their incomes fall, so absent falling housing costs, the share that will be pressured by housing costs will increase in the years to come.    

Consumer Credit Hits All Time High As Credit Card Debt Surges - Two months after an unexpectedly poor March consumer credit print, when just $10.3 billion (since revised to $10.9 billion) in revolving and non-revolving debt was created to fund another month of US purchases on credit, moments ago the Fed reported that in May, things went back to normal, as total consumer credit jumped by $17.1 billion - just shy of April's $17.5 billion - the highest since November's $21.6 billion, and to a new all time high in consumer credit of $4.088 trillion, which in turn was up 5.2% from a year earlier, rising roughly twice as fast as overall GDP. This was entirely thanks to a surge in credit card debt as the latest revolving credit print was a whopping $7.2 billion injection, up from adraw of $2 billion in March, and from $7 billion in May, and not only more than all the credit card debt issued in the first three months of the year but the highest since last October when Americans were racking up credit card debt to pay for Thanksgiving. Meanwhile, as credit card debt soared, nonrevolving credit - auto and student loans - posted a surprisingly soft print, with only $9.9 billion in new debt created. This was over $600 million below last month's print, and the lowest since June 2018. And while the combined April and May rebound in credit card use may ease concerns about the financial stability and propensity of the US consumer to spend, one place where there were no surprises was in the total amount of student and auto loans: here as expected, both numbers hit fresh all time highs with a record $1.6 trillion in student loans outstanding, a whopping increase of $30 billion in the quarter, while auto debt also hit a new all time high of $1.16 trillion, an increase of $8 billion in the quarter.

BLS: CPI increased 0.1% in June, Core CPI increased 0.3% --From the BLS: -- The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in June on a seasonally adjusted basis, the same increase as in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.6 percent before seasonal adjustment...The index for all items less food and energy rose 0.3 in June, its largest monthly increase since January 2018....The all items index increased 1.6 percent for the 12 months ending June, a smaller increase than the 1.8-percent rise for the period ending May. The index for all items less food and energy rose 2.1 percent over the last 12 months, and the food index increased 1.9 percent. The energy index, in contrast, declined 3.4 percent over the last 12 months. Inflation was above expectations in June.

Cleveland Fed: Key Measures Show Inflation Close to 2% YoY in June, Core PCE below 2% - The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning: According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.3% (3.7% annualized rate) in June. The 16% trimmed-mean Consumer Price Index rose 0.2% (2.2% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report.  Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.1% (0.7% annualized rate) in June. The CPI less food and energy rose 0.3% (3.6% annualized rate) on a seasonally adjusted basis.Note: The Cleveland Fed released the median CPI details for June here. Motor fuel was down 36% annualized.

Consumer Price Index: June Headline at 1.65% - The Bureau of Labor Statistics released the June Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 1.65%, down from 1.79% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 2.13%, up from the previous month's 1.99% and above the Fed's 2% PCE target.Here is the introduction from the BLS summary, which leads with the seasonally adjusted monthly data:The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percentin June on a seasonally adjusted basis, the same increase as in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.6 percent before seasonal adjustment.Increases in the indexes for shelter, apparel, and used cars and trucks more than offset declines in energy indexes to result in the seasonally adjusted all items monthly increase in June. The energy index fell 2.3 percent as all of the major energy component indexes declined. The food index was unchanged as the index for food away from home rose but the index for food at home declined.The index for all items less food and energy rose 0.3 in June, its largest monthly increase since January 2018. Along with the indexes for shelter, used cars and trucks, and apparel, the indexes for household furnishings and operations, medical care, and motor vehicle insurance were among the indexes that increased in June. The indexes for recreation, airline fares, and personal care all declined in June.The all items index increased 1.6 percent for the 12 months ending June, a smaller increase than the 1.8-percent rise for the period ending May. The index for all items less food and energy rose 2.1 percent over the last 12 months, and the food index increased 1.9 percent. The energy index, in contrast, declined 3.4 percent over the last 12 months. [More…] was looking for no MoM change in seasonally adjusted Headline CPI and 0.2% in Core CPI. Year-over-year forecasts were 1.6% for Headline and 2.0% for Core. The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since the turn of the century. The highlighted two percent level is the Federal Reserve's Core inflation target for the CPI's cousin index, the BEA's Personal Consumption Expenditures (PCE) price index.

June 2019 CPI Inflation --Here is my monthly inflation update.  We continue along in the same pattern.  This month there was a bit of a bump in non-shelter inflation, but the trailing 12 month rate remains about 1.1% and shelter inflation remains about 3.4%. Going forward, I think inflation may become a less important indicator.  The Fed has shifted to a more dovish posture and they are not insisting on holding the target rate at a plateau.  It would be a shock if they don't lower rates this month.  So, I am happy to say that my worst fears appear not to have come to pass.  Monetary policy is on the margin of neutral.  Unless the Fed reverses course, I suspect there will either be a slight contraction or a continuation of the expansion.  For now, I will call that a tentative prediction, but it seems to be where we have moved.

Here Come The China Tariffs- Core Inflation Hotter Than Expected, Pain For Powell - Having slowed and disappointed for the last two months, all eyes are on US consumer price index growth (which was expected to slow once again in June) this morning as the next Fed rate-cut narrative confirmation. The problem for rate-cut-hopers is that the picture is mixed at best. Headline CPI slowed to +1.6% YoY (exactly as expected) - below The Fed's mandated 2.0% 'stability' level; but the more important core CPI rose 0.3% from the prior month, the most since January 2018, and 2.1% 2.1% YoY (hotter than the expected 2.0%) and above the Fed's 2 target: The 12-month change for Core CPI has been in the range of 2.0 to 2.2% for 11 months in a row. Transitory? Under the hood, weakness in energy prices dominated the downside while used car prices rose more than expected The tariff effect is beginning to hit perhaps - The index for household furnishings and operations rose 0.8 percent in June, its largest increase since February 1991, as the index for gardening and lawncare services rose 6.1 percent. Rent and shelter costs are re-accelerating - rent inflation highest since August 2017, shelter inflation highest since July 2018... Both Goods and Services prices picked up in June (with Goods back into positive territory YoY) and Services rise 2.8% YoY... The firmer inflation readings follow Fed Chairman Jerome Powell's testimony to lawmakers Wednesday that there’s “a risk that weak inflation will be even more persistent than we currently anticipate.’’

June Producer Price Index: Core Final Demand Up 0.3 MoM - Today's release of the June Producer Price Index (PPI) for Final Demand came in at 0.1% month-over-month seasonally adjusted, unchanged from last month. It is at 1.7% year-over-year, down from 1.8% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at 0.3% MoM, up from 0.2% the previous month and is unchanged YoY NSA at 2.3%. MoM consensus forecasts were for 0.1% headline and 0.2% core.Here is the summary of the news release on Final Demand:The Producer Price Index for final demand advanced 0.1 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.1 percent in May and 0.2 percent in April. (See table A.) On an unadjusted basis, the final demand index rose 1.7 percent for the 12 months ended in June, the lowest rate of increase since advancing 1.7 percent in January 2017.In June, the rise in final demand prices is attributable to a 0.4-percent increase in the index for final demand services. Conversely, prices for final demand goods fell 0.4 percent. More…  The BLS shifted its focus to its new "Final Demand" series in 2014, a shift we support. However, the data for these series are only constructed back to November 2009 for Headline and April 2010 for Core. Since our focus is on longer-term trends, we continue to track the legacy Producer Price Index for Finished Goods, which the BLS also includes in their monthly updates. As this (older) overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated.

US Producer Price Index (PPI) - June 2019: US producer prices rose slightly in June - U.S. producer prices rose slightly in June as the cost of energy and other goods fell for a second straight month, offsetting an acceleration in services, leading to the smallest annual increase in producer inflation in nearly 2-1/2 years. The Labor Department said on Friday its producer price index for final demand edged up 0.1% last month after a similar gain in May. In the 12 months through June, the PPI rose 1.7%, the smallest gain since January 2017, slowing further from a 1.8% increase in May. Economists polled by Reuters had forecast the PPI unchanged in June and increasing 1.6% on a year-on-year basis. Underlying producer prices slowed last month, a sign that overall inflation could remain moderate despite strong gains in prices of most consumer goods and services in June. Excluding the volatile food, energy and trade services components, producer prices were unchanged in June after rising 0.4% for two straight months. The so-called core PPI increased 2.1% in the 12 months through June after advancing 2.3% in May. Low inflation and growing risks to the economy from a trade war between the United States and China, and slowing global growth are likely to see the Federal Reserve cutting interest rates this month for the first time in a decade. Fed Chairman Jerome Powell on Wednesday told lawmakers the U.S. central bank would “act as appropriate” to protect the economy against these risks. The Fed, which has a 2% inflation target, tracks the core personal consumption expenditures (PCE) price index for monetary policy. The core PCE price index increased 1.6% year-on-year in May and has undershot its target this year. In June, wholesale energy prices fell 3.1% after slipping 1.0% in the prior month. Goods prices decreased 0.4% last month after declining 0.2% in May. A 5.0% drop in gasoline prices accounted for nearly 60% of the decline in the cost of goods last month. Wholesale food prices rebounded 0.6% in June. Core goods prices were unchanged for three straight months. The cost of services increased 0.4% in June, the most since October 2018, after rising 0.3% in May. Services were boosted by an increase in margins received by wholesalers and retailers.

LA area Port Traffic Down Year-over-year in June -- Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic. The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container). To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.On a rolling 12 month basis, inbound traffic was down 0.4% in June compared to the rolling 12 months ending in May.   Outbound traffic was down 0.3% compared to the rolling 12 months ending the previous month. The 2nd graph is the monthly data (with a strong seasonal pattern for imports). Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March depending on the timing of the Chinese New Year (February 5th in 2019).  In general imports have been increasing, and exports have mostly moved sideways over the last 8 years.

U.S. Heavy Truck Sales up 12% Year-over-year in June, Near All Time High -- The following graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the June 2019 seasonally adjusted annual sales rate (SAAR).  Heavy truck sales really collapsed during the great recession, falling to a low of 180 thousand in May 2009, on a seasonally adjusted annual rate basis (SAAR). Then sales increased more than 2 1/2 times, and hit 479 thousand SAAR in June 2015.  Heavy truck sales declined again - mostly due to the weakness in the oil sector - and bottomed at 366 thousand SAAR in October 2016. Since 2016, heavy truck sales have increased to near the all time high (the high was 561 in April 2006).  Heavy truck sales were at 544 thousand SAAR in June, up from 537 thousand SAAR in May, and up from 485 thousand SAAR in June 2018.

 Class 8 Truck Orders Crash 70% In June After A 71% Drop In May  --Class 8 heavy duty truck orders were down for the eighth month in a row, falling a stunning 70% in June to 13,000 units, according to FTR data. The figure was up 20% sequentially, but still follows a 71% decimation in May. Jefferies' Stephen Volkmann wrote in a note that the figures indicate a SAAR of ~178,000 Class 8 trucks and noted that the sequential growth compares to a sequential drop of 27% in May, when SAAR estimates were 139,000 units.  Kenny Vieth, ACT’s President and Senior Analyst said: "Fraying freight market and rate conditions along with a still-large Class 8 order backlog contributed to the worst NA Class 8 net order performance since July of 2016. May saw NA Class 8 orders fall below the 15,900 units averaged through the year’s first trimester, and year-to-date Class 8 net orders have contracted 64% compared to the first five months of 2018." The industry has been dealing with bloated backlogs as a result of aggressive ordering in 2018, coupled with headwinds from the ongoing trade war and the onset of a recession.  The good - and bad - news is that the backlog is starting to decline, and is expected to continue eroding until late summer. However, there is still downside risk for the industry in 2020 as a result of a slowing manufacturing, coupled with recessionary caveats. On the medium duty market, Vieth commented: “While the US manufacturing/freight economy has been droopy since late 2018, the medium-duty market continues to benefit from the underlying strength in the consumer economy. In May, NA Classes 5-7 net orders were 19,300 units, down 21% year-over-year and 19% from April. One has to look back 22 months to find a weaker medium-duty order month on an actual basis or just 2 months when looking at the data on a seasonally adjusted basis.”

Boeing setback after Saudi airline scraps $5.9bn order for 737 MAX planes  - US plane maker Boeing has suffered a fresh setback after a Saudi budget airline chose not to go through with a $5.9bn (£4.7bn) order for 30 of its 737 MAX aircraft.The decision by flyadeal comes after two 737 MAXs were involved in deadly crashes in 2018 and earlier this year. A total of 346 people were killed in the Lion Air disaster in Indonesia last October and the Ethiopian Airlines tragedy near Addis Ababa in March, which led to all such aircraft being grounded and billions of dollars being wiped off the company's value. Flyadeal has now had a rethink about the provisional Boeing order and decided instead to take delivery of a fleet of 30 rival Airbus A320neo jets.The Saudi airline said: "This order will result in flyadeal operating an all-Airbus A320 fleet in the future."Flyadeal, which has operated leased A320 jets since launching in September 2017, will take delivery of the new Airbus aircraft from 2021. The announcement comes just weeks after International Airlines Group – the owner of British Airways - signed a letter of intent to order 200 Boeing 737 MAX jets.

Boeing loses first big 737 Max order to rival Airbus, sees big drop in deliveries last quarter - Boeing officially lost its first order to European rival Airbus in the aftermath of two deadly 737 Max crashes and the subsequent grounding of the plane by global regulators. Some analysts think this cancellation won't be the last. Indeed, orders for all 737 models including the Max fell by more than half through June, figures released by Boeing on Tuesday show. The planemaker delivered 113 of the model plane through June compared to 269 of all 737s in the first half of 2018. Boeing doesn't break out deliveries for the Max from other 737 aircraft.In the quarter running April, May and June, combined deliveries of 737 models fell to just 24 from 137. The company reports second-quarter results July 24, when it typically provides an update on its order and delivery outlook. The first lost order for a 737 Max was from Flyadeal, the budget airline run by Saudi Arabian Airlines. It announced Sunday it will buy up to 50 Airbus A320neo planes, the competing narrowbody model to Boeing's 737 Max, and operate an all-Airbus fleet. The move reverses a December plan to buy up to 50 737 Max planes valued at $5.9 billion, based on list prices.While it's the first official switch since the 737 Max was grounded, Indonesian carrier Garuda said earlier this year it was talking to Boeing about canceling its order after Boeing delivered just one of the 50 737 Max jets. Together, the two orders are valued at roughly $10 billion, at list prices, though carriers are often offered substantial discounts. "I don't think we've seen the ends of these announcements," industry analyst Henry Harteveldt of Atmosphere Research Group told CBS News' Kris Van Cleave. "The big issue is Airbus' production capacity. Airbus needs to find ways to increase its production capacity for its A320 line of aircraft, which isn't easy to do."

Cutting corners in aerospace costs a fortune - The development of a new civil airliner requires somewhere between 50,000 and 100,000 work years. The total development cost lands below or above $10bn depending on the size of aircraft and its capabilities. This is a lot of work years and a lot of money but the 737 MAX crisis shows there are no possibilities to avoid this magnitude of effort. There are no shortcuts possible in this business. The tiniest oversight or shortcut and it has major consequences.The MCAS software fix for the 737 MAX pitch instability was such a shortcut. An aerodynamic solution to the problem could have been made but a software fix was easier and cheaper to implement.By using the base functions from Speed Trim System (STS) with an adapted logic triggered by Angle of Attack (AoA) instead of Speed change, a fix was produced which allowed the MAX to pass certification.Its implementation was badly engineered and its testing, including the FMEA (Failure Mode & Effects Analysis), didn’t detect how flawed the fix was. The fix bears the signs of a fast and cheap solution, a shortcut to a needed result.The end result of the management culture which produced this engineering shortcut is horrendous:

  • Two aircraft and 346 lives lost.
  • Boeing in eight months transformed from an admired civil aviation leader to a distrusted brand, subject to several criminal investigations.
  • The economic losses are not yet clear but they will approach the costs of a new aircraft development.

Airbus on course to overtake Boeing as biggest planemaker - Airbus is on track to overtake Boeing as the world’s biggest planemaker as the US company reported a slump in deliveries of new commercial jet airliner deliveries after two fatal crashes involving the 737 Max. Boeing, which has led its European rival since 2012, is struggling after safety regulators worldwide grounded its best-selling 737 Max following the Ethiopian Airlines and Lion Air disasters that killed 346 people. Boeing reported 239 commercial plane deliveries in the first half of the year, a 37% fall from 378 in the same period last year, highlighting the extent to which the crashes have damaged its reputation in the market. Rival Airbus has reported 389 deliveries in the first half, up 28% on the same period last year, and is on track to deliver a record number of planes this year, overtaking Boeing for the first time in seven years. Before the crash, Boeing was delivering planes at a rate of 50 a month in the first quarter. Output has since slumped to only 30 a month in the second quarter. Boeing halted deliveries of the top-selling plane since it was grounded in mid-March. There are more than 150 undelivered Max planes parked at sites around the US as well as 380 owned by airlines that remain grounded. June was the third month running that Boeing booked no new orders of its Max aircraft. Air regulators are not expected to clear the model to fly again before the end of September as the company continues to work on fixing the aircraft’s flight-control systems. Airbus has been ramping up the pressure on Boeing by pushing its best-selling A320neo, a direct rival to the Max, and publicly announcing an increase in production. This week Boeing lost a provisional deal for 50 737 Max planes from flyadeal, the budget arm of Saudi Arabian Airlines, which instead ordered the Airbus rival. The deal, with a value of more than $5.5bn (£4.4bn), is one of the first direct signs that the Max crashes have resulted in business shifting to Boeing’s rival.

European Regulator Says Boeing Has To Fix These 5 Major MAX Issues - Boeing hopes to have the 737 MAX back in the air by December. But a list of five major requirements issued by the European aviation regulator EASA lets one doubt that the time frame can be kept.EASA’s checklist includes a number of issues that have been disclosed: the potential difficulty pilots have in turning the jet’s manual trim wheel, the unreliability of the Max’s angle of attack sensors, inadequate training procedures, and a software issue flagged just last week by the FAA pertaining to a lagging microprocessor. But the agency also listed a previously unreported concern: the autopilot failing to disengage in certain emergencies.We will discuss the five issues below.It is not clear if EASA will insist on all the points to be fixed:“Any of these could significantly affect the return to service, but we don’t know if they are actually going to become requirements or are they just items for discussion," said John Cox, a former 737 pilot who is president of the aviation consulting company Safety Operating Systems.As usual the regulators will not tell Boeing how to fix the problems. Whatever solution Boeing offers for those items simply has to comply with the general demands the regulations make. Some of the listed items seem to require hardware changes that will have to be applied to all 737 MAX and maybe even to the older 737 NGs.

 Small Business Optimism Index Decreased in June - CR Note: Most of this survey is noise, but there is some information, especially on the labor market and the "Single Most Important Problem". From the National Federation of Independent Business (NFIB): June 2019 Report: Small Business Optimism Index Optimism faded modestly in June, with the Small Business Optimism Index slipping 1.7 points to 103.3, reversing the gain posted in May but still leaving optimism at historically high levels. Thirty-six percent of all owners reported job openings they could not fill in the current period, down 2 points from May but still high. A seasonally-adjusted net 19 percent plan to create new jobs, down 2 points.

Weekly Initial Unemployment Claims decreased to 209,000 --The DOL reported: -- In the week ending July 6, the advance figure for seasonally adjusted initial claims was 209,000, a decrease of 13,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 221,000 to 222,000. The 4-week moving average was 219,250, a decrease of 3,250 from the previous week's revised average. The previous week's average was revised up by 250 from 222,250 to 222,500. The previous week was revised up.The following graph shows the 4-week moving average of weekly claims since 1971.

 Year-To-Date Job Cuts Highest Since 2009 - Much has been made about the spike this year in job cuts probably because the other labor reports such as the BLS monthly report and the weekly jobless readings have been relatively strong. Layoff announcements can be thought of as a leading indicator because the announcements occur before they happen. The spike is no longer happening, so the bears don’t have that point to add to their thesis.  As you can see in the chart below, the number of job cuts in June fell from 58,577 to 41,977.    BUT...  This report is highly volatile and can be manipulated by a few big companies. That’s why it’s best to look at quarterly averages. In this case, it tells us the same thing as quarterly cuts fell 26% in Q2. There were 190,410 cuts in Q1 and 140,577 cuts in Q2.  On the other hand, year to date cuts are still up 35% from last year and this is the highest first half total since 2009.  As you can see in the first chart above, the biggest spike in the past 4 years occurred early in the 2nd half of 2015. Is that what is coming in H2 2019?

Dollar Impact On U.S. Manufacturing Employment -  We came across a very interesting find tonight when looking at the monthly year-on-year change in the value of the trade-weighted dollar index relative to the 3-month change in manufacturing payrolls since 2014.   We found that when the change in the value of the dollar is lagged 9-months in the past 58 months, there is a -0.74 correlation with the 3-month moving average in the change in manufacturing payrolls.  Rather surprising to find such a relatively tight fit.  Yeah,  we hear you, “introduce and add leads, and lags to torture the data until it confesses.”  Not our intention, however, just trying to find a better prediction model.Theoretically, it makes sense as manufacturers do not change their hiring decisions based on short-term moves in demand, relative price changes, or competitiveness.   A sustained move in the dollar for one year may incentivize management to change production and hiring decisions, which then takes months to ramp up.The chart reflects the relationship.  Note the change in the dollar (right-hand side) axis has been inverted. That is a move up in the red line is the 9 month lagged year-on-year weakening of the dollar index for that particular month. During the first 29 months of the Trump administration, the economy created 485k manufacturing jobs versus the 128k during the last 29 months of the Obama administration.   However, during Obama’s last 29 months in office, the trade-weighted value of the dollar appreciated 21.1 percent, a huge headwind for the manufacturing sector and the economy. The same dollar-index has appreciated only 0.4 percent in Trump’s first 29 months and actually declined almost 10 percent his first year in office, creating a nice economic headwind during his honeymoon.Also, interesting to note the S&P500 has pretty much gone nowhere since the January 2018 peak, up only 4.1 percent even in the midst of the all the Sturm und Drang over the past 360 trading days.

BLS: Job Openings "Mostly Unchanged" at 7.3 Million in May - Notes: In May there were 7.449 million job openings, and, according to the May Employment report, there were 5.888 million unemployed. So, for the fifteenth consecutive month, there were more job openings than people unemployed. Also note that the number of job openings has exceeded the number of hires since January 2015 (over 4 years).  From the BLS: Job Openings and Labor Turnover Summary The number of job openings was little changed at 7.3 million on the last business day of May, the U.S. Bureau of Labor Statistics reported today. Over the month, hires fell to 5.7 million and separations edged down to 5.5 million. Within separations, the quits and the layoffs and discharges rates were unchanged at 2.3 percent and 1.2 percent, respectively. ... The number of quits was little changed in May at 3.4 million. The quits rate was 2.3 percent. The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS..  Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for May, the most recent employment report was for June. Note that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs. Jobs openings decreased in May to 7.323 million from 7.372 million in April.The number of job openings (yellow) are up 3% year-over-year.Quits are up 2% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits"). Job openings remain at a high level, and quits are still increasing year-over-year. This was a solid report.

May JOLTS report is weak, consistent with last month’s weak jobs report - The jobs report one month ago was poor, so as expected the JOLTS report for May, released this morning, followed suit. To review, because this series is only 20 years old, we only have one full business cycle to compare. During the 2000s expansion:

  • Hires peaked first, from December 2004 through September 2005
  • Quits peaked next, in September 2005
  • Layoffs and Discharges peaked next, from October 2005 through September 2006
  • Openings peaked last, in April 2007

as shown in the below graph (normed to 100 as of May 2018): As shown above, in today’s report, all of the above series, as well as job openings, declined month over month. Additionally, the only series that were higher compared with one year ago were job openings (+2.8% but significantly off its November 2018 high) and quits (+2.5%) Next, here is the history of the “hiring leads firing” (actually, total separations) metric, measured quarterly to cut down on noise): And here is the monthly measure for the last five years (plus job openings in blue): As you can see, both hires and fires have essentially gone sideways for the last twelve months. It is possible both are at a turning point, but it is impossible to know. Only layoffs and discharges have shown an improving trend over the last year, although they ticked higher in May: To sum up, job openings have declined about -4% from their peak six months ago. Hires, quits, and total separations have been rangebound, with the only improvement in layoffs and discharges. While the absolute levels are solid, this month’s report, just like last month’s jobs report, does not show an improving jobs market. But since the June jobs report was strong, we can expect the JOLTS report next month to be stronger as well.

Debunking The Myth Of The Tight U.S. Labor Market - As the U.S. election cycle gets underway, expect much debate over just how strong the economy really is after becoming the longest uninterrupted expansion in America’s history. After all, the jobless rate is at a half-century low and the S&P 500 Index is at a record high. The bond market, though, is signaling that the Federal Reserve will soon be forced to ease monetary policy to shore up the economy. How can that be?A key part of the answer lies with jobs “growth,” which has been slowing much more than most probably realize. Despite the better-than-forecast jobs report for June, the fact is the labor force has contracted by more than 600,000 workers this year. And we’re not just talking about the disappointing non-farm payroll jobs numbers for April and May.Certainly, that’s caused year-over-year payroll growth, based on the Labor Department’s Establishment Survey – a broad survey of businesses and government agencies – to decline to a 13-month low. But year-over-year job growth, as measured by the separate Household Survey – based on a Labor Department survey of actual households – that is used to calculate the unemployment rate is only a hair’s breadth from a five-and-a-half-year low. (The data in the charts below don’t reflect Friday's employment report.)Multiple indicators suggest a significant slowdown in the labor market is underway. Growth in the Economic Cycle Research Institute’s more comprehensive U.S. Coincident Employment Index (USCEI), which includes both those figures and more, has fallen to its worst reading since late 2013. Because it subsumes data from both surveys, its verdict about overall job growth is more reliable than the others.But there’s even more cause for concern. Months from now, the Establishment Survey will undergo its annual retrospective benchmark revision, based almost entirely on the Quarterly Census of Employment and Wages conducted by the Labor Department. That’s because the QCEW is not just a sample-based survey, but a census that counts jobs at every establishment, meaning that the data are definitive but take time to collect. Since it is retrospective, few pay any attention but the QCEW offers critical information for those wanting to verify that the job market is as strong as the headlines would lead you to believe.The latest QCEW data are available through 2018, but note how much worse the 2018 QCEW data look than the Establishment Survey data, even though the two appear fairly similar in previous years, for which the latter has already undergone the requisite revisions. The Establishment Survey’s nonfarm jobs figures will clearly be revised down as the QCEW data show job growth averaging only 177,000 a month in 2018. That means the Establishment Survey may be overstating the real numbers by more than 25%. Separately, according to the Household Survey, the number of people unemployed has dropped by more than 400,000, or 6.50%, since December. But the number employed has also declined, by almost 200,000. So their sum total – the labor force – has fallen by almost 600,000, or about 0.33%.

CBO report shows broad benefits from higher minimum wage - This afternoon, Congressional Budget Office (CBO) released a report assessing the economic impact of raising the minimum wage to $15 in 2025 in six steps (this is a similar policy to the Raise the Wage Act, which would increase the minimum wage to $15 in 2024). The key fact coming out of the report is that CBO finds that the benefits to low wage workers of a $15 minimum wage far exceed the costs. The report finds that a $15 minimum wage would increase the wages of millions of low wage workers, increase the average incomes of low and lower-middle-income families, reduce poverty, shift money from corporate profits to the wages of low-wage workers, and reduce inequality.In particular, CBO finds that $15 in 2025 could raise the wages of 27.3 million low-wage workers, would increase the income of families who earn below three times the poverty rate by $21.9 billion, and would reduce the number of people living in poverty by 1.3 million, nearly half of them age 0-18. CBO finds that the overwhelming share of low-wage workers would benefit from a $15 minimum wage and that as a group, low-wage workers would be unambiguously better off. While CBO’s bottom line is that the benefits to low-wage workers of a $15 minimum wage would outweigh the costs, CBO nevertheless substantially overstates the costs. CBO finds that the policy would lead to a decline in employment of 1.3 million—though in choosing the parameters that resulted in that conclusion it failed to appropriately weight the highest quality studies in the vast academic literature on this issue. As a result, policymakers must be skeptical of their assessment of the employment impact, given that other careful reviews of the minimum wage literature have shown that the average study finds small-to-no employment effects of minimum wage increases.

More evidence–this time from CBO–that higher (even much higher) minimum wages largely do what they’re supposed to do. --Jared Bernstein - Raising the federal minimum wage to $15 per hour by 2025 would lift the pay of 27.3 million workers—17 percent of the workforce—according to a new report from the Congressional Budget Office. It would raise the incomes of poor families by 5 percent and thus reduce the number of people in poverty by 1.3 million. Since these low-end gains would be partially financed out of profits, the increase in the wage floor would reduce inequality.CBO also estimates that “1.3 million workers who would otherwise be employed would be jobless in an average week in 2025.” Because economists’ estimates of the job-loss effects from minimum wage increase are so wide-ranging—some studies find little-to-no job loss impacts; other find more—CBO estimates that there’s a two-thirds chance that the actual change in employment is between 0 and -3.7 million. Interestingly, -1.3 million is not the midpoint between 0 and -3.7, suggesting the budget office gave a bit more weight to studies finding less evidence of job-loss effects.Thus spoke Zarathustra the CBO. Should this lead objective policy makers to embrace or eschew the policy to increase the federal minimum wage to $15 in 2025 (assume for this exercise that “objective policy makers” exist)?I’d give a solid push towards embrace. It’s a progressive policy that’s long been shown to largely hit its goals of boosting the earnings of low-wage workers whose families seriously need the income. Yes, the report warns that some will be hurt by the increase, but the best research suggests their job-loss estimate may be too high. Moreover, even if they’re right, the ratio of helped-to-hurt is 21 (27.3m/1.3m). And given the extent of turnover in the low-wage labor market, many of those 1.3 million workers will eventually find new jobs, jobs which pay a lot better than their old ones. Full disclosure: I’ve long advocated for minimum wage increases, so my “embrace” won’t surprise those who’ve followed that work. But the reason why I—and, more importantly, progressive institutions like the Economic Policy Institute, CBPP, CAP, and many others—have long advocated for minimum wage increases is that a deep body of uniquely high-quality research finds that prior increases have had their intended effects of raising low-wage workers’ incomes without leading to significant job loss.

Foxconn will only create 1500 jobs, says Wisconsin governor -- The Foxconn factory in Wisconsin will only create 1,500 jobs when it starts production next May, Gov. Tony Evers told CNBC yesterday. That’s the same number Foxconn has been saying since it shifted plans for the factory a few months ago, and far short of the 13,000 jobs that were promised when President Trump broke ground a year ago. Evers has been negotiating with Foxconn since he replaced former Wisconsin governor Scott Walker, and he says he now has “clarity” on Foxconn’s plans.1,500 jobs is short of the 1,800 jobs required for Foxconn to get the next set of tax credits under its $4 billion deal with the state. Foxconn already missed its first jobs target under that contract, hiring only 156 employees instead of the required 260 last year. Instead, Foxconn has bought a series of empty buildings for “innovation centers” around the state as part of a promised “AI 8K+5G ecosystem” (although it’s never specified what that ecosystem actually is). While Foxconn initially disputed The Verge’s reports of the buildings being empty, it has now been 89 days since the company promised a statement or correction regarding the plans for the innovation centers. The sharp decline in the number of jobs is due to Foxconn canceling the promised 20 million-square-foot Generation 10.5 LCD fab to produce 65-inch TVs, which was specified in the contract with Wisconsin, and instead breaking ground on a 1 million-square-foot facility that the company claims will be a Generation 6 fab that produces smaller LCDs. That plant will also assemble servers and networking equipment, according to Foxconn, which might also explain why display manufacturing experts have said that the construction plans submitted to the state do not appear to show a fab.

Amazon Is Giving Workers A Chance To Learn To Code Before Robots Take Their Jobs - Amazon is grooming its vast workforce for the automation job apocalypse that the company itself is helping to bring about thanks to its robotics division.As the company introduces more robots and automated systems to sort goods and fill orders at its warehouses, making more of its increasingly better-paid workforce redundant, the company apparently wants to be seen as giving them a chance to learn new skills - like, for example, how to code - before shunting them aside.  As WSJ reports, Amazon is planning to spend $700 million - a drop in the bucket compared with the company's $240 billion annual revenue - to retrain a third of its American workforce to try and give them a fighting chance of still having a job once the robots take over. The program is designed to help workers find new jobs inside - or outside - the company.The company expects to announce Thursday that it will retrain 100,000 workers by 2025 by expanding existing training programs and rolling out new ones meant to help its employees move into more advanced jobs inside the company or find new careers outside of it. The training is voluntary, and most of the programs are free to employees, the company said."Technology is changing our society, and it’s certainly changing work," said Jeff Wilke, chief executive of Amazon’s world-wide consumer business, adding that the initiative is meant to help workers "be prepared for the opportunities of the future."As WSJ points out, the initiative breaks down to about $7,000 per worker. The company plans to save money by pressing some of its employees with a background in academia into teaching roles. As part of the initiative, Amazon will also expand a program for fulfillment-center employees called Amazon Career Choice which pays 95% of an employee’s tuition and fees for certificates and degrees in high-demand fields like being an aircraft mechanic or a nurse - even though the company doesn't hire anyone with those skill sets. It's just another example of Amazon being a magnanimous employer and ensuring that its warehouse workers might still be able to scratch out a living once they're no longer needed on the warehouse floor. Hourly workers in the company's warehouses can retrain "for an IT support role" like...managing the machines that are being used in the warehouses. "Nontechnical" corporate workers can also opt to train on how to become a software engineer.

State Of Indiana Argues In Supreme Court For Right To Seize Any Car For Speeding - Despite losing in the United States Supreme Court, the state of Indiana is still arguing that there are virtually no eighth amendment limits on what it can seize using civil asset forfeiture, according to Reason. In fact, Indiana Solicitor General Thomas Fisher argued in Indiana Supreme Court last week that it would be constitutional to seize any and every car that exceeded the speed limit. It was an argument that drew laughter from the U.S. Supreme Court last year. Fisher said:  "This is the position that we already staked out in the Supreme Court when I was asked by Justice Breyer whether a Bugatti can be forfeited for going over five miles over the speed limit. Historically the answer to that question is yes, and we're sticking with that position here." The issue has been brought to light as a result of the Indiana Supreme Court reconsidering a case where a 2015 seizure of Tyson Timbs' $42,000 Land Rover, after he was convicted of a drug felony, was argued to have violated his eighth amendment protections against excessive fines and fees. In February, the United States Supreme Court reversed the Indiana Supreme Court’s ruling that Timbs "could not challenge the seizure on Eighth Amendment grounds because the excessive fines clause had not yet been applied, or 'incorporated,' to the states."It also brought to light the power of the practice, which allows authorities to seize property suspected of being connected to criminal activity. The Indiana Supreme Court will now have to figure out how to determine whether a civil forfeiture is excessive or not. The result could either check - or reinforce - the state government’s power.Lawyers for the Institute for Justice, a libertarian-leaning public interest law firm, argued that the seizure of Timbs' car, which was not purchased with drug proceeds and was worth four times the maximum fine for his crime, was a disproportional punishment.The Institute for Justice had to petition the US Supreme Court to review the case after the Indiana Supreme Court ruled against Timbs. The state argued that the excessive fines clause did not apply to the practice of civil asset forfeiture which operates under the legal fiction that it is an action against the property itself, not the owner.

US Mayors Resolve Not To Pay Hackers Over Ransomware Attacks More than 225 US mayors have signed on to a resolution not to pay ransoms to hackers. It's a collective stand against the ransomware attacks that have crippled city government computer systems in recent years. The resolution was adopted at the US Conference of Mayors annual meeting, which took place late June and early July in Honolulu. "The United States Conference of Mayors stands united against paying ransoms in the event of an IT security breach," the resolution reads.This could give city leaders across the US some leverage against hackers. The 227 mayors who attended the meeting agreed to adopt the resolution, but the US Conference of Mayors represents more than 1,400 cities with populations over 30,000.Ransomware attacks use malware to lock out users unless the hackers get paid, usually with bitcoin. Cities have been picked off one by one, with seemingly little recourse. They've been prime targets for ransomware attacks because cities can't afford to let certain services remain frozen.According to the resolution, there have been 22 ransomware attacks on city, county and state governments so far this year. Hackers paralyzed government computers in Albany, New York, in April. Then in June, hackers targeted two Florida cities: Lake City and Rivera Beach. The city councils in both Florida cities agreed to pay ransoms that added up to more than $1 million.

The Homegrown Crisis California Refuses To Own - …Anyone who has spent even a short period of time in California’s cities will immediately notice the homelessness crisis that has grown to stunning proportions in recent years. The “explanation” that’s often thrown around is that people who become homeless travel to the Golden State, where, presumably, the mild weather blunts some of the difficulties of living without a roof over one’s head. But this, like most justifications for inhumane problems, is just that: a justification to make Californians feel slightly less terrible every time they come across a person in need on the streets of some of the wealthiest, most progressive cities in the world.  As Tommy Newman, a lawyer and a senior director at the nonprofit United Way, points out in the latest installment of the “Scheer Intelligence” podcast, a quarter of the nation’s homeless live in California, earning it the shameful moniker of “Homeless Capital of America.” That’s not the only staggering number related to the issue. “About 70% of the people who are living outside [in Los Angeles County] last lived indoors in L.A. County, and of that subset, 50% lived here for more than a decade indoors,” Newman tells Truthdig Editor in Chief Robert Scheer on the podcast. The numbers, which clearly debunk the common rationalization about homelessness, should lead us all to the crucial conclusion Newman has drawn from the statistics. “This is a homegrown challenge,” he says. “Some people will come here, but if your whole life falls apart and you’re in Iowa, you’re not going to say, ‘All right, well, I’ve lost everything, and now I’m going to California’—you’re stuck.”

Florida deputy arrested for planting meth, other drugs in nearly 120 cases: what we know (w/ traffic stop video) Fired Jackson County Deputy Zach Wester was arrested on racketeering and numerous other charges for allegedly planting meth and other street drugs on unsuspecting motorists before hauling them off to jail. Agents with the Florida Department of Law Enforcement, who have been investigating Wester for more than nine months, arrested him Wednesday. Wester, expected to make his first court appearance on Thursday, invoked his right to remain silent and declined to speak with investigators.  He was arrested on 52 counts in all. Aside from the racketeering count, he was charged with a number of other felonies, including official misconduct, false imprisonment, fabricating evidence and possession of a controlled substance. He was also charged with misdemeanor charges of perjury, possession of a controlled substance and possession of drug paraphernalia, FDLE said.  Jackson County Sheriff Lou Roberts said Wester’s alleged crimes were “disheartening.” He thanked the community for its patience during the investigation, which got sidetracked after Hurricane Michael hit Oct. 10. “This is something we’re not proud of,” said Roberts, who plans to retire and not seek re-election next year. “No agency wants to go through this kind of situation and face the embarrassment of the public. This is a very serious matter. We’re supposed to set higher standards, and the allegations that were made in this case will be tried.” Eddins and Williams offered new details in the case, including a large amount of drugs found in Wester’s vehicle during an internal affairs probe that began last August. But investigators declined to give a possible motive for Wester’s alleged actions.

It’s better to be born rich than gifted -- Using one new, genome-based measure, economists found genetic endowments are distributed almost equally among children in low-income and high-income families. Success is not. The least-gifted children of high-income parents graduate from college at higher rates than the most-gifted children of low-income parents. First, consider the people whose genome scores in the top quarter on a genetic index the researchers associated with educational achievement. Only about 24 percent of people born to low-income fathers in that high-potential group graduate from college. That’s dwarfed by the 63 percent college graduation rate of people with similar genetic scores who are lucky enough to be born to high-income fathers. Contrast that with a finding from the other end of the genetic scoring scale: about 27 percent of those who score at the bottom quarter of the genetic index, but are born to high-income fathers, graduate from college. That means they’re at least as likely to graduate from college as the highest-scoring low-income students.

Antivaxxers turn to homeschooling to avoid protecting their kids’ health - Anti-vaccine advocates in New York are encouraging parents to homeschool their children rather than protect them from serious diseases, according to a recent report in The Wall Street Journal. The move by New York anti-vaccine groups comes just weeks after state lawmakers eliminated exemptions that allowed parents to opt their children out of standard school vaccination requirements on the basis of religious beliefs. Very few religions actually have objections to vaccinations, and the ones that do tend to have relatively few followers. But many parents who reject vaccines based on falsehoods and misinformation about their safety have claimed religious objections as a way to dodge immunization requirements. As cases of measles in the United States have exploded in recent years—largely due to a small but loud band of anti-vaccine advocates misinforming parents—states are now cracking down on non-medical exemptions. New York, which has faced a massive and prolonged outbreak since last September, is the fifth state to eliminate religious exemptions. It joins California, Maine, Mississippi, and West Virginia. Overall, lawmakers in 26 states have recently introduced bills aimed at tightening rules on who can receive exemptions, according to The Hill. As of July 3, the Centers for Disease Control and Prevention has confirmed 1,109 cases of vaccine-preventable measles in 28 states. That’s the highest number of cases in the country since 1992. In 2000, public health officials declared the disease eliminated from the country (meaning an absence of continuous spread for 12 months, though travelers continued to bring in cases). The country’s measles elimination status is now in question.

California Parents Horrified At New Sex-Ed Agenda - The debate over whether schools should teach sex education to minors has been going on for decades. But now, perhaps more than ever, many parents are horrified by what their children are being taught – especially when parents, despite their religious beliefs, have no say about the teaching materials. In a small California community, parents and clergy were so appalled at the explicit and LGBTQ-inspired lessons, they went undercover to investigate deeper. What they discovered at a Riverside County Comprehensive Health Education meeting so horrified them, they determined to stop the curriculum.Our Watch President Pastor Tim Thompson said: “We don’t want our children exposed to some of these things they are showing, th(is) pornographic, sexually explicit material. It has no place in the classroom. It’s not right, and it won’t be tolerated.” Thompson was referring to Positive Prevention Plus, the text for sex ed classes. John Andrews, parent of a student in the Murrieta School District, was sick over the explicit material depicted in the “educational” materials. He said:“They talk about mutual masturbation. They discuss gender roles, the gender spectrum, and in the support materials … they take it even further. They discuss everything, topics like roleplaying for different genders, blood play, dental dams … fisting is mentioned. I mean, they mention it all.“If I were to show that material to a child, I would be brought up on charges. But somehow our public schools are allowed to teach this to junior high and high school kids.” The graphics in the instructional guides use cartoon images so detailed that many parents found them inappropriate. Wanting to discover more about what children would be learning, Thompson’s group attended meetings held by the school boards. At one particular meeting in Riverside, a woman went “undercover” and recorded the event. Thompson said he was shocked to discover some of the biggest contributors to the new sex ed curriculum included Planned Parenthood and Cardea Services, which he said is a huge advocate for the LGBT community. Another shocker was that the American Civil Liberties Union (ACLU) was on hand to explain how to excuse children from class to get abortions without parents finding out.

There Is Such A Thing As A Free Lunch - Economists who say that there is no such thing as a free lunch are forgetting the Supplemental Nutrition Assistance Program (SNAP) and the National School Lunch Program (NSLP). SNAP, formerly called the food stamp program, is administered by the Food and Nutrition Service (FNS) of the U.S. Department of Agriculture (USDA), but is operated by the 50 states.  ”SNAP “offers nutrition assistance to millions of eligible, low-income individuals and families and provides economic benefits to communities” and is “the largest program in the domestic hunger safety net.” Benefits differ by state.  According to the FNS, in fiscal year 2018, the average monthly benefit was $126.32 per person and $252.55 per household. In fiscal year 2018, the program cost American taxpayers $65.055 billion.  [ZH: Food Stamp participation is at 10 year lows]  Recipients of SNAP benefits receive a deposit on an electronic benefit transfer (EBT) card each month that can be used only for prepackaged food items. To receive benefits, a family’s gross monthly income must be at or below 130 percent of the federal poverty line. Net monthly income must generally be less than or equal to the poverty line. Government payments from other welfare programs are not counted when determining income. Able-bodied adults have minimal work requirements.The NSLP is a federally assisted meal program that operates in more than 100,000 public and nonprofit private schools and residential child-care institutions. Although it began in 1946, it was expanded in 1966, also as part of Johnson’s Great Society. In fiscal year 2018, the program cost American taxpayers $13.8 billion. The NSLP provides free or low-cost lunches to more than 31 million children each school day. It is administered on the federal level by the FNS of the USDA. On the state level, the NSLP is administered by state education agencies, which operate the program through agreements with school food authorities. Participating school districts receive cash subsidies and USDA Foods for each reimbursable meal they serve. Children may be determined “categorically eligible” for free meals through participation in certain federal assistance programs, such as SNAP or Head Start. Children can also qualify for certain programs on the basis of household income and family size. The children in a family having an income at or below 130 percent of the poverty level are also eligible for free meals. An income between 130 percent and 185 percent of the poverty level means that schools may not charge students more than 40 cents for a reduced price lunch. SNAP and the NSLP were recently reauthorized, with overwhelming Republican support, as part of the Agriculture Improvement Act of 2018 (H.R.2).

The school segregation issue Democrats should be talking about -  At the recent Democratic presidential debates, Sen. Kamala Harris (D-Calif.) made waves when she went after former vice president Joe Biden for his opposition to busing back in the 1970s. As welcome as this new frank moral dialogue is, it risks passing over the basic economic infrastructure underlying America's school segregation problem. Simply put, a huge portion of public school district funding in the U.S. is drawn from local property taxes. As a result, school resources have been inextricably tied to disparities in wealth and home ownership which are some of the most clear and obvious manifestations of generations of racial discrimination. That linkage must be broken. Moreover, we should move to a system where most, if not all, school funding is distributed out from the national level. Right now, about 45 percent of all school funding comes from taxes assessed at the local level. For the most part, that means property taxes: i.e. a tax on the value of the home or business establishment you own. Another 45 percent comes from state governments, which can rely on both property taxes and other taxes. Finally, the remaining 10 percent comes from federal spending, which is financed by federal income taxes and capital gains taxes and the like.The problem with this setup is that America is also a brutally unequal country. The gap in both incomes and wealth — like the value of your property — between our richest and poorest citizens is absolutely immense. On top of that, rich and poor tend to cluster, leading to vertiginous inequality from neighborhood to neighborhood. As a result, some school districts sit upon extremely privileged populations with high property values, which leads to generous local and property tax returns, which leads to much more generous funding for that district’s schools. While the bulk of U.S. school districts spend just under $10,000 per student, there is a long tail of districts that extends out well past $30,000. Families, in turn, fight like hell to claw their way into the wealthiest neighborhoods — not just because living in those places gives them access to more economic opportunity, but because it gives their children much more access to educational opportunity.

Teaching global warming in a charged political climate - On this next-to-last week of the school year, Melissa Lau was squeezing in a lesson exploring the link between increased carbon emissions and extreme weather events such as floods and hurricanes. A goal was to give students the knowledge to debunk the argument often made by climate change deniers that a few frigid days disprove climate change; even in a warming climate, there will still be many cold days.  Schools across the United States are wrestling with how to incorporate the study of climate change into the classroom as its proximity and perils grow ever more apparent. According to a recent NPR/Ipsos poll, 86 percent of teachers and more than 80 percent of parents say the subject should be taught in school. But survey results in 2016 showed that while three-quarters of science teachers said they included lessons about climate change, they devoted little time to it and faced an array of obstacles. The science behind climate change is complicated and evolving, and most teachers aren’t prepared to teach it well. Many textbooks don’t touch the topic, according to science educators.“Climate and earth sciences more generally have been historically neglected in American science education,” said Glenn Branch, deputy director of the National Center for Science Education, which tracks anti-science education legislation and develops curriculums like the one Lau was teaching. “Lots of teachers feel they don’t have the content knowledge or pedagogical know-how to teach climate change effectively.”   And then there are the politics, especially in ruby-red Oklahoma. Educators here say they occasionally receive questions and pushback from parents when classes cover climate change. A state agency funded by the oil and gas industry pumps money into teacher training and classroom materials, including books featuring a cartoon character called Petro Pete, with the goal of promoting fossil fuels. And state lawmakers routinely introduce bills that critics say would encourage teachers to spread misinformation on evolution and climate change.

New Railroad Commission leader pushing for high school energy curriculum - In one of his first moves as the Railroad Commission of Texas' new chairman, Wayne Christian is supporting the creation of an energy curriculum for Texas high school students. Christian wrote a letter Monday to Texas Education Agency Commissioner Mike Morath saying the creation of a high school energy cluster would ensure that Texas oil and gas employers had the employees necessary to run their businesses. "Companies are hiring for jobs that have salaries that are on average 132 percent more than other private sector jobs, but from welders to truck drivers to petroleum engineers, they cannot fill them fast enough," he wrote. The letter didn't outline what such a curriculum would look like or how it would differ from the petroleum refining cluster that the Education Agency already supports through grant money. The clusters are created in collaboration with local colleges and businesses, which help high schools implement industry-specific curriculum. The idea of an energy cluster was apparently hatched by Education Agency staff at a meeting with a Railroad Commission workforce development initiative set up by Christian, according to the letter. Christian was elected as the Railroad Commission's 50th chairman on June 18 by his fellow commissioners, taking over from Christi Craddick, who remains a commissioner.

‘Gross Violation of Logic and Sense’: Open Letter From Nearly 140 Scholars Implores SF School Board Not to Destroy Historic Mural - After the San Francisco Board of Education unanimously voted to paint over a Depression-era mural cycle depicting George Washington as a slaveholder and perpetrator of genocide against Native Americans, 139 academics, artists, and activists signed an open letter this week decrying the board's decision as a "display of contempt for history" and urging it to reverse course. "In a recent vote, the board of the San Francisco Unified School District voted unanimously to destroy the murals," reads the letter, which is expected to be delivered Friday to the San Francisco school board. "To repeat: they voted to destroy a significant monument of anti-racism. This is a gross violation of logic and sense.""The undersigned oppose the school board's decision and the wrong-headed approach to art and to history that lie behind that decision. We urge the school board to reverse its decision and take all reasonable steps to preserve the mural and to teach it as a work of art and as a representation of our history." Located in San Francisco's George Washington High School, the 1,600-square foot mural was painted by Russian-born immigrant and communist Victor Arnautoff in 1937 as part of Franklin Delano Roosevelt's Works Progress Administration.As the Associated Press described the mural, "The first president's rise to power is shown across 13 frescoes, including one that depicts slaves working on Washington's property and white men stepping past the body of a slain Native American." The work has been a source of heated controversy for decades, with some students and activists characterizing it as an offensive and racist portrayal of Native and African Americans. Others have said the mural has historical value and should be preserved, but is not appropriate for a public high school.The San Francisco school board said it plans to archive the mural in digital form. "No one has the right to tell us as native people—or our young people who walk those halls everyday—how they feel," Paloma Flores, the San Francisco school district's Native American education program coordinator, said during a hearing on the mural last month. "You're not in those shoes." But the George Washington High School Alumni Association expressed opposition to destruction of the paintings in a statement earlier this year, saying the murals "should be preserved for their artistic, historical, and educational value."

Many College Students Are Too Poor to Eat -- A recent federal watchdog report about the breadth of food insecurity on America’s college campuses came with a caveat: “Nationally representative survey data that would support direct estimates of the prevalence of food insecurity among college students do not exist,” the Government Accountability Office wrote in the report to lawmakers. There is a growing body of research saying that college students are routinely going hungry, but it is not consistent in describing the scale of the problem. Whatever the exact numbers, the report stressed, there are possibly millions of students who don’t have enough to eat. One recent survey from Temple University, for example, found that nearly 50 percent of students at more than100 schools couldn’t afford to eat a balanced meal and 35 percent of students were skipping meals entirely because they did not have enough money for food. Nationally, about 13 percent of Americans are food-insecure, but some surveys have estimated that the percent of college students in the same situation is roughly three times that. This population is particularly vulnerable to going hungry, as many are spending all available funds on costs associated with school, and holding down a full-time job—let alone a lucrative one—can be incredibly difficult. Conservative critics of research on campus food insecurity, who oppose interventions to assist these college students, have used the lack of definitive, nationally representative samples to discount the work. Survey response rates were too low, they argued; there were shifting definitions of insecurity; the surveys were not optimally designed.A new bill, released Thursday by Senator Chris Murphy of Connecticut, with companion legislation sponsored in the House by Representative Jahana Hayes, also of Connecticut, and Representative Marcia Fudge of Ohio, aims to eliminate that doubt. The bill, which they are calling the Closing the College Hunger Gap Act, would require federal data collection on food and housing insecurity. “This bill is important so that we have a real, consistent national window on where student hunger is happening, where it's the worst, and [which] schools are creating interventions that make a difference,” Murphy told me in an interview. “The most important thing is to understand where it exists, and who's doing well to combat it. And until you standardize the data, you can't really compare interventions.”

Put off by US, Chinese students eye other universities - CAUGHT in the crossfire of the US-China trade war, Chinese students are looking for alternative study destinations — threatening to turn off an important source of revenue for American universities. China accounts for nearly a third of foreign students on US campuses who pour billions of dollars into the economy, but in March their numbers dropped for the first time in a decade. Visa delays, concerns over being shut out of research projects and safety fears have turned off Chinese students, according to several admissions consultancies and nearly a dozen parents and students interviewed by AFP. Rival education powerhouses such as Britain, Australia and Canada are the biggest beneficiaries, a survey by New Oriental China’s biggest private education provider said. Japan and South Korea — traditional study abroad destinations for the Chinese elite — and parts of Europe, especially Germany and Scandinavian countries with strong engineering programmes, have also seen an uptick in applications, the survey found. The chilling effect started mid-last year, after President Donald Trump’s administration slashed the visa duration of students in science and technology fields from five years to one in some cases.  Over one third of the roughly 360,000 Chinese students in the US study in “STEM fields” — science, technology, engineering and mathematics — according to the Institute of International Education in New York. But the number of Chinese students in the US dipped by two percent in March compared to the previous year, the first drop since 2009, data from the US Immigration and Customs Enforcement shows. Melissa Zhang, a high school senior in Beijing, said she has abandoned plans to go to the US and was instead taking German lessons, in the hope of getting into a robotics programme in Dresden. “I’ve already wasted a year preparing for my SATs,” the 17-year-old said, referring to the standardised test needed to enter a US university. “But what’s the point in going to the US if I might be shut out of a research lab, just because I am Chinese.”

Did the Value of a College Degree Decline during the Great Recession? – New York Fed - In an earlier post, we studied how educational attainment affects labor market outcomes and earnings inequality. In this post, we investigate whether these labor market effects were preserved across the last business cycle: Did students with certain types of educational attainment weather the recession better?
Focusing on students’ labor market outcomes during 2003-14 (a period that spans both a boom and a bust), we hope to answer the following questions:

  • Did certain majors yield better outcomes than others during the bust? Did graduation status matter more or less during the bust?
  • Did students from certain types of institutions weather the recession better?
  • Were disparities in earnings between majors exacerbated during the bust? Did certain majors and colleges hinder/promote economic mobility more in the bust?
To answer these questions, we use a data set, obtained from the U.S. Department of Education, that matches earnings and employment data of college cohorts with corresponding college-cohort characteristics, college characteristics, and enrollment. We analyze labor market outcomes—earnings and employment status—for 1997-2007 fall freshman college-entry cohorts six years after enrollment (2003-14). We measure college selectivity using Barron’s Profiles of American Colleges (2001), which ranks colleges based on their acceptance rates, students’ median entrance exam scores (on the SAT and ACT), the grade point averages of their freshman classes, and the percentage of freshman ranking in the top of their high school graduating classes. For simplicity, we classify four-year colleges in the top three of Barron’s six tiers as “selective” and the rest as “non-selective.” Students who entered college in the period 1997-2007 experienced a wide range of labor market conditions as they exited college. We define the "Boom" and "Bust" periods as 2003-08 and 2009-14, respectively.  […]  Studying labor market entry during the latest boom-bust cycle, this post finds that returns to educational attainment depend critically on whether a student entered the labor market in the Boom period or the Bust. Importantly, the labor market penalties from recession vary by college type. For example, while for-profit students face an earnings penalty relative to their peers in public and non-profit colleges, regardless of the phase of the cycle, their earnings shrunk markedly more than that of their peers when the economy soured, and they struggled more to find employment. Turning to earnings inequality, we find that a weak economy widens earnings disparities, but there is remarkable variation in the extent of this widening by educational attainment. For-profit enrollment expands the earnings gap even more in the Bust, while public colleges act as equalizers and promote economic mobility, more so in the Bust. These findings highlight the important role of information in students’ decisions about college, major, and whether to persist or drop out of college. These decisions matter more in a weak economy, producing lasting impacts on labor market outcomes, inequality, and economic mobility.

Blindsided by a ‘Devastating’ Veto, Alaska’s University System Pleads for a Lifeline NYT - More than a month after Alaska lawmakers settled on a plan to cut $5 million in support for the state’s universities, Gov. Mike J. Dunleavy shocked the state last month by using a veto to cut much deeper, taking away $130 million more from the system that gave him his master’s degree. Mr. Dunleavy, a Republican in his first year as governor, has seized on a hawkish approach to budgeting, in order to fulfill a campaign promise to increase the amount of oil-revenue dividends the state pays each Alaska resident, to about $3,000 a year. The governor’s slashing of state funding left university leaders blindsided and in turmoil. The university’s supporters have embarked on a desperate scramble to persuade lawmakers to override the governor’s line-item veto, which would reduce the operating funds the university system gets from the state by 41 percent. With a special legislative session convening on Monday, they have just five days to do so before the cuts become official.“I think people are actually frightened,” said Maria Williams, a professor who chairs the University of Alaska’s Faculty Alliance. “I’m frightened because I feel that what is happening is a drastic reshaping of the state of Alaska.” The showdown in the Legislature this week comes at a time of economic trouble in the state. While much of the United States has benefited from robust economic growth in recent years, Alaska’s fortunes have been largely tied to those of the state’s declining oil and gas industry. Falling oil revenues have brought on a persistent recession that has forced the state to confront lingering questions about how to best revive its economy.

Sugar Daddy Business Thrives As More Co-Eds Sign Up To Pay Off Student Debt - President Donald Trump’s administration is partly responsible for a new wave of college students seeking out “sugar daddies” to pay off their student loans, according to a web service dedicated to facilitating such relationships. A recent statement by SeekingArrangement, a website which matches “sugar mommies” and “sugar daddies” with “sugar babies,” argues that U.S. Education Secretary Betsy DeVos* is “seemingly waging war against tens of thousands of student loan borrowers.” “Rather than look to Washington for relief, more than two million students are turning to Sugar Daddies and Sugar Mommies,” the site claims. The company’s announcement comes even as Congress continues to put pressure on websites that appear to aid in the solicitation of sex work. SeekingArrangement pairs wealthy older men and women looking for “companionship” with younger adults who are willing to be paid for their services. Often times, these relationships are expected to be sexual, some of its users have said.  Data from the company show 30 percent of the money earned by sugar babies is spent on tuition and school-related expenses. The site claims 2.5 million of its 20 million users are American college students.In March, the University of North Carolina student newspaper profiled “Anna,” an anonymous student who earned $12,000 a month from three sugar daddies. Every sugar baby interviewed by the paper said they regularly engage in sexual conduct with their sugar daddies, some being flown to New York to do so. “Anna and many other sugar babies said sex is expected by a majority of men on the site,” according to the Daily Tar Heel article. According to a poll conducted in England in 2017, one in three college students is willing to trade sexual favors for help paying for college. The poll found that 59 percent of students were either “a bit,” “mildly,” or “very” interested in becoming a sugar baby.

Pennsylvanian Millennials Are Screwed- Have Most Student Debt, On Average, Than Any Other State -  The student debt crisis is rapidly expanding, hitting a new record high of $1.6 trillion in 2019 and surpassing auto loans and credit card debt post-GFC. About 44 million Americans, or 20% of adults, have insurmountable student debts.According to Douglas McIntyre with 24/7 Wall Street, who examined brand-new student loan data from LendEDU, told KYW Philadelphia that college graduates in Pennsylvania, on average, have highest student loan debts in the US, coming in at $36,000 per graduate.   "There are some other notable things about the state, which is the number of graduates with debt is 67%, which is the fifth highest of all the states," McIntyre said.The life-altering impacts of student loan debt on millions of millennials has been astonishing.Many are financially crippled in the gig-economy, working 2 to 3 jobs while barely affording to service their debts. Home purchasing, weddings, and starting a family have also been put on hold; millennials can no longer afford the American dream.While the Deep South struggles with high amounts of credit card debt; student loan debt is heavily concentrated in the Northeast.As the student debt crisis becomes more urgent ahead of the next recession, Democratic candidates have called for debt forgiveness programs that would wipe out student debts.With the 2020 US presidential election 482 days away, millennials with insurmountable student debts located in Pennslyvania and other states in the Northeast could cast their vote for a Democrat, with hopes that their debts would be erased.

DeVos sued over student loan forgiveness program that denies 99 percent of applicants - One of the nation’s largest teachers unions filed suit Thursday against Education Secretary Betsy DeVos, accusing her agency of mismanaging a major program intended to provide student loan forgiveness to public service workers. The American Federation of Teachers claims the Education Department has improperly rejected the applications of teachers seeking public service loan forgiveness and violated their constitutional right to due process. AFT President Randi Weingarten and eight student loan borrowers who are teachers or work in public service jobs are named as plaintiffs in the suit, which was filed in federal court in Washington, D.C. The Public Service Loan Forgiveness program, which was passed by Congress in 2007, was designed to allow student loan borrowers who work in public service jobs to have their loans discharged after they make 10 years of payments. But relatively few borrowers have been able to obtain the benefit in recent years, as the Education Department has rejected roughly 99 percent of applications. That's left tens of thousands of frustrated borrowers with student loans they thought would be forgiven after they worked a decade on the job. The department has said that the applications are being rejected because borrowers have not met the eligibility requirements of the program. The AFT’s lawsuit accuses the Trump administration of arbitrarily and capriciously rejecting loan forgiveness applications, failing to properly oversee the loan servicers it hires to administer the program and denying borrowers the loan forgiveness benefit without due process.

It Is Time To Start Forgiving Student Loans – And Here Is What It Will Cost -- For the past thirty years, we have been demanding that students pay for college out of their future wages.I prefer that we pay for college out of current taxes on corporations and wealthier individuals. I propose that we move away from user fees, and toward public provision to

  • Relieve the worst economic suffering caused by student debt; and
  • Replace student debt as our primary college funding vehicle.
  • 1. Cancelling all loans for persons over age 65…………..$5 billion a year
  • 2. Cancelling loans from predatory for-profit colleges…..$3 billion a year
  • 3. No income taxes on forgiven debt…………………………$10 billion a year
  • 4. No loan payments due from borrowers who earn less than $40,000 a year….$18 billion a year
  • 4. Easier standards for discharging student loans in bankruptcy……$5 billion a year
  • 5. Expand Pell Grants to $10,000 a year, and for far more Americans…..$55 billion a year
  • 6. Additional federal funding for Community Colleges and vocational schools…..$12 billion a year

Extending the Social Security tax to all incomes is one way to pay these costs. This would be much more reliable revenue than the untested new taxes proposed by Sens. Warren and Sanders.  There are approximately two  million persons over age 65 who still carry student debt. Either they  owe money on their own loans, or they owe money in support of a child’s loans.The total amount owed is approximately $90 billion.Nearly 40 percent of federal student loan borrowers age 65 and older are in default.  By contrast, 29 percent of federal student loan borrowers age 50 to 64 are in default, and 17 percent of federal student loan borrowers age 49 and under are in default. These are all horrible statistics, but they are worst for the oldest debtors.)Over 114,000  seniors have had their Social Security benefits offset because of unpaid student loans. Social Security benefits may be  their only source of regular retirement income. This means that benefit offsets may impose serious financial hardship.The principle  behind our forgiveness for seniors is simple:  “Enough is enough”. People deserve a financially untroubled retirement. Most  debtors over age 65 have been paying on these loans for a long time. Their incomes are not going up. Often they cannot even cover the interest on their student loans. They have likely been hit with extra fees, capitalized interest, and unconscionable collection costs.

Destroying Social Security to Save It - Connecticut Congressman John Larson introduces H. R. 860, Social Security 2100 Actwhich will cuts taxes, strengthen benefits, prevents anyone from retiring into poverty, and ensure Social Security remains strong for generations. It sounds good, but of course he wants it to sound good. In the past we have had to be worried mostly about plans from the “Right,” the crazy people who want to Save Social Security in order to destroy it. Their plans sounded good, too.  To make it easier on myself, I am going to just list Larson’s points and offer a few words about them in the hope you will think twice.

  • Larson: The Social Security 2100 Act Expands Benefits. There is a benefit bump for current and new beneficiaries — Provides an increase of 2%.
  • Me: A 2% increase in benefits would mean nothing to beneficiaries. Unlike the reduced inflation indexing the bad guys were proposing, this increase will not accumulate over time. What Social Security faces is a potential 20% cut in benefits if the payroll tax is not increased to keep up with increases in life expectancy. The increase needed would be about 2% of payroll. 2% of payroll becomes 20% of benefits because the 2% you pay is matched by 2% your employer pays for. That extra 4% over 40 years of working becomes 8% over 20 years of life expectancy, and that 8% becomes roughly 20% due to the effective interest that arises automatically from pay as you go financing.
  • Larson: Protection against inflation. Increases the COLA formula to better reflect costs incurred by seniors.
  • Me: Probably a good idea. But the “normal” inflation adjustment, if paid for by that 2% increase in the payroll tax, will provide increased benefits that may be adequate. The question is how are we going to pay for a higher COLA? My suggestion is that a tiny bit larger increase in the payroll tax would not be felt, and would avoid the politically suicidal “make the rich pay” part of Larson’s plan unnecessary.
  • Larson: Protect low income workers. A new minimum benefit will be set at 25% above the poverty line.
  • Me: Again, probably a good idea. But not if it changes the “worker paid” feature which is so important to Social Security’s political future.

First Look at 2020 Cost-Of-Living Adjustments and Maximum Contribution Base --The BLS reported this morning:The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 1.4 percent over the last 12 months to an index level of 249.747 (1982-84=100). For the month, the index was unchanged prior to seasonal adjustment. CPI-W is the index that is used to calculate the Cost-Of-Living Adjustments (COLA). The calculation dates have changed over time (see Cost-of-Living Adjustments), but the current calculation uses the average CPI-W for the three months in Q3 (July, August, September) and compares to the average for the highest previous average of Q3 months. Note: this is not the headline CPI-U, and is not seasonally adjusted (NSA).   In 2018, the Q3 average of CPI-W was 246.352.The 2018 Q3 average was the highest Q3 average, so we only have to compare Q3 this year to last year. This graph shows CPI-W since January 2000. The red lines are the Q3 average of CPI-W for each year.Note: The year labeled for the calculation, and the adjustment is effective for December of that year (received by beneficiaries in January of the following year).  CPI-W was up 1.4% year-over-year in June, and although this is very early - we need the data for July, August and September - my current guess is COLA will probably be between 1% and 2% this year, the smallest increase since 2016. The contribution base will be adjusted using the National Average Wage Index. This is based on a one year lag. The National Average Wage Index is not available for 2018 yet, but wages probably increased again in 2018. If wages increased the same as in 2017, then the contribution base next year will increase to around $137,600 in 2020, from the current $132,900.  Remember - this is an early look. What matters is average CPI-W for all three months in Q3 (July, August and September).

Prescription Drug Prices Are Skyrocketing At Five Times The Rate Of Inflation - The price of prescription drugs has been surging this year, despite president Donald Trump campaigning on lowering drug prices prior to the 2016 election. According to new data from CBS, more than 3,400 drugs have raised their prices in 2019, which marks a 17% increase compared to the 2,900 increases at the same time in 2018. And the average price hike for these drugs is an astounding 10.5%, which is about five times the rate of inflation as calculated by CPI. Hilariously – or sadly enough - the price of drugs is probably a better representation of real inflation to begin with. 41 drugs have raised their prices by more than 100%, including one version of the antidepressant Prozac, which is up 879% since last year. These increases come at the same time that lawmakers and consumers continue to express concerns about prices outpacing wage growth and cost-of-living. Four out of five Americans believe that prescription drug pricing is unreasonable and about a third of patients say that they’re skipping prescription medicine because of the cost. Michael Rea, founder and CEO of Rx Savings Solutions said: "In the political climate we live in and the conversations we're having, that there are more drug price increases this year -- you would think that wouldn't be the case. It defines the difficulty that consumers have." According to CBS, other drug hikes have included:

  • Mometasone 0.1% Topical Cream. This topical steroid has increased 381% this year, Rx Savings Solutions found.
  • Promethazine/Codeine 6.25-10mg/5mL solution. This pain reliever and cough medication rose 326%, Rx Savings Solutions said
  • Guanfacine 2mg tablet. This ADHD treatment rose 118%, the study found.

Prices are rising primarily due to a combination of shareholder pressure and an inelastic market.  Rea continued: "It's a good that people need, in many cases in order to stay alive. You have a lot of flexibility to drive prices higher and higher."

Hospitals Block ‘Surprise Billing’ Measure In California - Citing fierce pushback from hospitals, California lawmakers sidelined a bill Wednesday that would have protected some patients from surprise medical bills by limiting how much hospitals could charge them for emergency care. The legislation, which contributed to the intense national conversation about surprise medical billing, was scheduled to be debated Wednesday in the state Senate Health Committee. Instead, the bill’s author pulled it from consideration, vowing to bring it back next year. “We are going after a practice that has generated billions of dollars for hospitals, so this is high-level,” said Assemblyman David Chiu (D-San Francisco). “This certainly does not mean we’re done.” Chiu said he and his team would keep working on amendments to the bill that address the concerns of hospitals while maintaining protections for patients. Hospitals focused their opposition on a provision of the bill that would have limited what they can charge insurers for out-of-network emergency services, criticizing it as an unnecessary form of rate setting. “Balance billing,” better known as surprise billing, occurs when a patient receives care from a doctor or hospital — or another provider — outside of her insurance plan’s network, and then the doctor or hospital bills the patient for the amount insurance didn’t cover. These bills can soar into the tens of thousands of dollars. In the absence of federal laws, many states have tried to formulate solutions to balance billing, but health policy experts suggest this issue would be best addressed by the federal government. Congress is discussing different approaches but not without facing fierce opposition and lobbying from two influential groups: health insurers and providers, including doctors and hospitals.

Healthcare Triage: The Malpractice System Doesn’t Deter Malpractice -  Aaron Carroll -  Research indicates that the malpractice system in the United States doesn’t do a lot to deter malpractice. There are several recent studies about malpractice that look at how many doctors have malpractice claims against them, and what happens to their careers after they have a problem.  The Malpractice System Doesn't Deter Malpractice – YouTube   This episode was adapted from a column I wrote for the Upshot. Links to sources can be found there.

Exclusive: FDA enforcement actions plummet under Trump --From monitoring clinical trials and approving medicines and vaccines, to ensuring the safety of blood transfusions, medical devices, groceries, and more, the U.S. Food and Drug Administration (FDA) is one of the nation’s most vital watchdogs. By several measures, however, FDA’s compliance and enforcement actions have plummeted since President Donald Trump took office, Science has found. The agency’s “warning letters”—a key tool for keeping dangerous or ineffective drugs and devices and tainted foods off the market—have fallen by one-third, for example. Such letters typically demand swift corrections to protect public health and safety. FDA records from Trump’s inauguration through 22 May show the agency issued 1033 warning letters, compared with 1532 for the most recent equivalent period under former President Barack Obama. Compared with the start of the Obama presidency, Trump-era letters dropped by nearly half. Warnings from the FDA Center for Devices and Radiological Health, which helps ensure the safety and quality of medical devices, and from some of the agency’s district offices—including Philadelphia, Florida, and New York—have dropped even more steeply, by more than two-thirds. Two district offices have not issued a warning in more than 2 years. The numbers don’t just reflect a new administration’s slow start. FDA sent significantly fewer warning letters in the second year of Trump’s presidency than in his first.

Making the Revolving Door Great Again: Recent FDA Commissioner Dr Scott Gottlieb Joins the Pfizer Board of Directors As we discussed in May, 2019, here, Dr Scott Gottlieb, FDA Commisioner from 2017 to May, 2019,  had been no stranger to the revolving door.  Prior to assuming leadership of the FDA, he had relationships with multiple for-profit health care corporations, which drew wide notice when he was appointed to head the FDA in 2017, as we noted at that time here.  Also, Dr Gottlieb was clearly very comfortable with the pharmaceutical and biotechnology industries.  For example, in 2007-2008, we discussed many examples of Dr Gottlieb's strident promotion of the interests of these industries (look here, here, here and here). Very quickly after leaving the FDA in 2019, Dr Gottlieb rejoined his old venture capital firm, New Enterprise Associates, as a full-time partner investing partner specializing in life sciences companies.Then, as reported by CNBC on June 27, 2019Scott Gottlieb, who stepped down as Food and Drug Administration Commissioner in April, will join Pfizer’s board of directors, the company announced Thursday. Gottlieb resigned from the FDA this spring after nearly two years at the helm.  This seemed like an even more consequential case of the outgoing revolving door, obviously, because Dr Gottlieb held an extremely important position of responsibility in health care regulation, and because he quickly moved on to hold an important position of governance in one of the world's largest pharmaceutical/ biotechnology companies.  It also occurs as the next big thing after an unrelenting stream of revolving door issues affecting health care policy and regulation in the Trump regime (look here)  So this time, not only did dissidents like your obedient servant mutter online, but a US Senator authored a swift rebuke.  As reported by Sheila Kaplan in the New York Times,Senator Elizabeth Warren on Tuesday called on Dr. Scott Gottlieb, the former commissioner of the Food and Drug Administration, toresign from the board of Pfizer, saying his decision to join one of the country’s leading pharmaceutical companies 'smacks of corruption.'Ms. Warren, who is seeking the Democratic presidential nomination, said in a public letter to Dr. Gottlieb that the revolving door between government and industry 'makes the American people rightly cynical and distrustful about whether high-level Trump administration officials are working for them, or for their future corporate employers.'

‘It just really ethically scares me’: Caution urged as scientists look to create human-monkey chimeras - The monkeys in Douglas Munoz’s Kingston lab look like other monkeys. They socialize and move around and eat and drink in the same way. They don’t fall over or stagger around. In fact, the only thing separating the macaques from their unaltered lab mates is the elevated level of a specific human protein implanted inside their brains — proteins that accumulate in the brains of humans with Alzheimer’s disease. The monkeys have been injected with beta-amyloid, a molecule that, in high-enough amounts, is toxic to human brain tissue. Munoz and collaborators are studying the earliest changes in those monkey cerebrums. Normally it takes several decades for Alzheimer’s to unfold in human brains.   The injections speed things up.  If left alone, eventually the monkeys will start to show signs of Alzheimer’s. They make more mistakes on memory tasks and their reaction time slows. Alzheimer’s research relies heavily on rodents. Munoz is trying to develop a monkey model of Alzheimer’s, because one of the biggest reasons for the staggering string of flops in the search for an effective treatment for the brain-ravaging disease is the species gap. The rat brain is a long way away from the human brain. Not so much a monkey’s. Munoz, Canada Research Chair in neuroscience at Queen’s University, has reported his work using brain molecules. Others are implanting monkeys with fragments of human brain tissue extracted from people who died with Alzheimer’s. Now, however, some are going further, and proposing the creation of human-monkey chimeras — part-human beings with entire portions of the brain, like, say, the hippocampus, entirely human derived. For Munoz, the idea of biologically humanizing large portions of a monkey’s brain is  seriously unnerving. “To be honest, it just really ethically scares me,” he said. He believes in animal research as a fundamental way of understanding how the brain works. However, “For us to start to manipulate life functions in this kind of way without fully knowing how to turn it off, or stop it if something goes awry really scares me.”

Ebola in DR Congo: Fear and mistrust stalk battle to halt outbreak - There can be few greater challenges than tackling a lethal epidemic. But imagine trying to do so in a conflict zone ravaged by extreme poverty, insecurity and poor communications amid a population where health workers are feared and distrusted.Yet that is the reality of Ebola in the east of the Democratic Republic of Congo, where more than 1,500 people have lost their lives from the virus in the past year.   In the city of Butembo, in North Kivu province, I see how local and international medical staff and charities are trying to combat the disease. Essentially, it is a gruesome game of whack-a-mole that appears all but impossible to win.  Many Ebola deaths are never reported. Decades of conflict have led to widespread mistrust of the authorities and this has an impact on the disease spreading,according to authors of a recent report.Some deny the disease exists, believing it to be a poison invented by the international community to traffic body parts. Others do not trust trained medical staff to look after the sick.Then there are those who simply do not want their loved ones snatched from them, sealed up in a plastic body bag and buried anonymously by someone else. This matters, because the corpse of an Ebola victim is most contagious at the time of death. So if families are busy cleaning the body as part of customary burial rites, they are all spreading the contagion and almost certainly condemning themselves to a wretched death. Even if a death is reported, that does not solve everything. Not everyone agrees to be vaccinated or provide information about their wider contact groups. There is little the medical staff can do to force them to hand over names and addresses. Some people, even if vaccinated, still contract the disease. It seems inevitable that there can never be enough quick response teams to match the number of Ebola deaths. So the medical staff sometimes come too late and the virus will have spread.

"Massive Loss Of Life": 3,500 Deaths As Simultaneous Ebola & Measles Outbreaks Hit Congo --World Health Organization (WHO) officials released new staggering numbers this week on the death toll from central Africa's latest deadly Ebola virus outbreak. Confirmed deaths in the Democratic Republic of Congo have risen to 1,536 since the outbreak began there a little under a year ago. And by July 7, a total of 2,418 what are deemed confirmed and probable cases have been reported, Bloomberg said, citing the WHO's latest report on the outbreak.   “While the number of new cases continues to ease in former hot spots, such as Butembo, Katwa and Mandima health zones, there has been an increase in cases in Beni and a high incidence continues in parts of Mabalako health zone,” according to the report.The report further noted that in parts of the DRC the "Ebola outbreak continues this past week with a similar transmission intensity," suggesting while it's still largely contained within the country's borders, the outbreak is still going strong despite emergency interventions. "The Ministry of Health (MoH) and other national authorities in the Democratic Republic of the Congo, WHO, and partners are implementing several outbreak control interventions together with teams in the surrounding provinces, who are taking measures to ensure that they are response-ready," the report continued.  Compounding the Ebola crisis further is the simultaneous accelerating measles outbreak raging through the country, resulting an an urgent measles vaccination campaign in Ebola-hit regions. A stunning almost 2,000 people have died from the preventable disease in the DRC this year, the vast majority children under five.  “The combined threat of Ebola and measles for the thousands of families living in overcrowded and unsanitary displacement camps is unprecedented,” Unicef DRC spokesman Edouard Beigbeder told The Guardian. “We have a small window to prevent a potentially massive loss of life.”

B vitamin content of rice declines with rising CO2 - New research has shown that rice grown at carbon dioxide levels that could be reached as soon as 2050 are expected to suffer a one-sixth to nearly one-third loss of their B vitamin content. Globally, rice is humanity’s most important staple food, and for half a billion people, the crop provides more than 50 percent of their daily calories. That poses a serious potential problem: a prior study published by principal research scientist Samuel Myers and colleagues at Harvard found that when atmospheric CO2 reaches 550 parts per million (up from its current 410+ ppm), the reduced protein content of the rice will lead to protein deficiency in an additional 148 million people.That work also documented declines in the iron and zinc content of rice, wheat, barley, legumes, maize and potatoes—all of them important staple foods.. The latest study, published in GeoHealth, focuses on the impact of rising CO2 on the B vitamins folate, riboflavin, and thiamin. Maternal deficiencies in folate can lead to neural-tube defects in unborn children, as well as weakness and loss of appetite in adults; thiamin deficiency causes beriberi; and low levels of riboflavin can cause skin lesions and nervous disorders, including migraines. Using a framework that allows them to estimate the impact of these changes on the global burden of disease, the researchers estimate that an additional 132 million people would suffer folate deficiency based on their consumption of rice alone, 67 million additional people will become deficient in thiamin, and 40 million more people will become deficient in riboflavin. Those numbers almost certainly understate the impact. As Myers and his coauthor, HSPH research associate Matthew R. Smith, write: “Because elevated CO2 concentrations are likely to reduce B vitamins in other crops beyond rice, our findings likely represent an underestimate of the impact of anthropogenic CO2 emissions on sufficiency of B vitamin intake.” And  “CO2-induced nutritional declines could produce a major headwind on progress toward alleviating malnutrition, and deserves attention and concerted action.”

A small glass of juice or soda a day is linked to increased risk of cancer, study finds - A new study has linked drinking just a small glass of a sugary drink per day -- 100 ml, about a third of a typical can of soda -- to an 18% increase in overall cancer risk and a 22% increase in risk for breast cancer. The research, which looked at more than 100,000 French adults, links consumption of sugary drinks to an increased risk of some cancers. This follows a recent study linking sugary beverage consumption to greater risk of premature death. "The results indicate statistically significant correlations between the consumption of sugar-sweetened drinks and risk of all cancers combined, and of breast cancer," said Ian Johnson, nutrition researcher and emeritus fellow, Quadram Institute Bioscience, who wasn't involved in the research.   "What we observed was that the main driver of the association seems to be really the sugar contained in these sugary drinks," said Touvier, who is the research director of the Nutritional Epidemiology Research Team of the National Health and Medical Research Institute at the Paris 13 University. Another possibility is that additives, such as 4-methylimidazole, which is found in drinks that contain caramel coloring, could play a role in cancer formation. Touvier suggested that people should stick to public health guidelines that recommend limiting sugary drinks to a maximum of one glass a day.  The research found no link between diet beverages and cancer. The authors warned that this finding should be interpreted with caution, as this type of beverage had a relatively low consumption among the study participants.

Billions of Air Pollution Particles Found in Hearts of City Dwellers  - The hearts of young city dwellers contain billions of toxic air pollution particles, research has revealed. Even in the study’s youngest subject, who was three, damage could be seen in the cells of the organ’s critical pumping muscles that contained the tiny particles. The study suggests these iron-rich particles, produced by vehicles and industry, could be the underlying cause of the long-established statistical link between dirty air and heart disease. The scientists said the abundance of the nanoparticles might represent a serious public health concern and that particle air pollution must be reduced urgently. More than 90% of the world’s population lives with toxic air, according to the World Health Organization, which has declared the issue a global “public health emergency”.The scientists acknowledged some uncertainties in their research, but Prof Barbara Maher, of Lancaster University, said: “This is a preliminary study in a way, but the findings and implications were too important not to get the information out there.”Maher and colleagues found in 2016 that the same nanoparticles werepresent in human brains and were associated with Alzheimers-like damage, another disease linked to air pollution.While all ages were affected, Maher said she was particularly concerned about children.“For really young people, the evidence is now of very early-stage damage both in the heart and the brain,” she said. “We have a likely candidate [particle] able to access both organs, with the pathological evidence to show damage is happening.” A recent comprehensive review concluded that air pollution may be damaging every organ and virtually every cell in the human body, as tiny particles are inhaled, move into the blood stream and are transported around the body. Much of the evidence of harm, from diabetes to reduced intelligence to increased miscarriages, is epidemiological, as harmful experiments on people are unethical. But one study in 2018 found air pollution particles in the placentas of women who had given birth.

China’s Deadly Air Pollution Is Also Costing Billions in Solar Efficiency --China is leading the way on renewable energy, having installed half the world's solar panels in 2017. But its transformative economic growth fueled by coal and other fossil fuels and its outsized manufacturing sector have coughed up so much air pollution that it has blocked adequate sunlight from reaching its solar panels, according to a new study published this week in Nature Energy. The researchers behind the study analyzed incoming sunlight at 119 different points around China from 1960 to 2015. They found that sunlight dimmed over the 55-year span and that average solar generation declined 11 to 15 percent during that time. If China could clean up its air enough to revert back to the air quality it had in 1960, it could yield a 12 to 13 percent increase in electricity production and save billions each year. The study projects that cleaner air would save $5 to $7 billion in 2030, according to CNET.In economic terms, that 11 to 15 percent decline in solar output cost China the equivalent of $1.9 billion in 2016, which is enough to have powered 1.3 million homes in the U.S. for one year, as Interesting Engineeringreported. As if the gnarly images of dimmed skies, smog so thick it's impossible to see the skyline, and people walking around in face masks were not enough, the statistics behind the health effects of air pollution are enough to justify strict emissions regulations and a push towards renewable energy. Nearly 38 percent of Chinese citizens, or 532 million people, are breathing appallingly polluted air daily, which accounts for nearly 750,000 premature deaths each year, as Interesting Engineering reported. The benefits cleaner air would offer to the economy and the solar industry are an 'energy boost,' but pale in comparison to a healthier citizenry, said Sweerts, as Earther reported.

Leave your shoes at the door: Science says they’re covered in poop and could make you sick --  Your clodhoppers track in dirt, yes, but also fecal germs and diarrhea-inducing bacteria, studies show, and the shoes themselves can get dirtier than a toilet seat. And science has shown just what makes up that filth, too.  For the study, 10 people wore brand-new shoes for two weeks before their kicks were sampled for bacteria. The outside of the shoes averaged 421,000 units of bacteria, compared with 2,887 on the inside. And fecal bacteria appeared on 96% of the shoes.   That fecal bacteria "indicates frequent contact with fecal material, which most likely originates from floors in public restrooms or contact with animal fecal material outdoors," Gerba said for the study.  And here's the, ahem, kicker: The transfer rate bacteria from shoes to clean tiles was 90% to 99%. Bacteria found on the footwear included E. coli, a source of urinary tract infections and diarrhea, as well as other bacteria causing pneumonia (Klebsiella pneumonia) and respiratory tract infections (Serratia ficaria).

Flesh-Eating Bacteria Infects Three as Experts Warn Warming Oceans Could Make It More Common - Within the last month, at least three people have contracted a flesh-eating infection from an ocean-dwelling bacterium — an occurrence that experts warn could become more frequent as the world's oceans warm.  Vibrio vulnificus is an "opportunistic pathogen" responsible for a majority of seafood-related deaths in the U.S., according to an article written by the American Society for Microbiology. The bacteria thrive in warm salty and brackish waters and enter humans either through breaks in the skin or after being consumed with raw seafood. Up to one-third of people with necrotizing fasciitis will die from the infection, which can cause a flesh-eating and commonly fatal bacteria known as necrotizing fasciitis.A woman in Florida died last month after contracting the bacteria when she fell into the water and cut her leg — a wound that measured just three-quarters of an inch, NBC reported. That afternoon she experienced overwhelming pain in her leg. Within days her limb was black and she was put on hospice care, eventually succumbing. She was diagnosed with necrotizing fasciitis and subsequently suffered from two strokes, kidney failure and sepsis. At another Florida beach, a 12-year-old girl similarly complained of pain that started in her leg and traveled through her entire body, wrote her mother in a Facebook post. After an initial visit at a local hospital, doctors told the woman to send her daughter to a hospital in Indianapolis specializing in children's health where she was admitted to the ICU for an infection behind her knee and septic shock, reports Today. Though her recovery is expected to be a long one, a rush to emergency surgery saved the girl's life and prevented the amputation of her leg. Cases in 2019 are adding up at a rate much higher than in previous years: A young boy contracted vibrio in Maryland last week after swimming at a local beach, reports CBS. The Miami Herald reports the story of a man in Florida who contracted the flesh-eating bacteria and whose quick action similarly saved him from losing muscle tissue in the arm.  Necrotizing fasciitis can be caused by a number of different bacteria, but is commonly caused by V. vulnificus when people wade into contaminated water with a cut or wound or eat raw shellfish infected by the bacteria. Endemic along the Southeast U.S. coast, the bacteria doesn't typically extend north of Virginia's Chesapeake Bay. However, a study published in the Annals of Internal Medicine suggests that as temperatures rise and make previously cooler regions more hospitable to the warm-water bacteria, infections will also increase in non-endemic areas.

 Every Mississippi Beach Is Closed Due to Toxic Algae -- A toxic algal bloom has made the Mississippi's Gulf Coast waters dangerous to humans and their pets. The Mississippi Department of Environmental Quality has shut down swimming at all of its beaches due to a blue-green harmful algal bloom, according to CNN.  Toxic algae are dangerous to touch and poisonous when swallowed. It can cause rashes, stomach cramps, nausea, diarrhea and vomiting, the state agency warned.  While the sand on the beaches is still open, the state's DEQ said beachgoers should avoid water contact or consumption of anything from the waters "until further notice," as CNN reported. The agency also advised anyone exposed to the water to wash with soap and water and to not eat fish or any other seafood taken from affected areas.  The blooms are not technically algae, but cyanobacteria — aquatic and photosynthetic bacteria. Many things, including changes in water temperature and fertilizer run-off, can trigger its bloom. Once the conditions are right for the cyanobacteria to spawn rapidly, they produce harmful toxins, as The Week reported.  The National Oceanic and Atmospheric Administration said that the climate crisis and increases in nutrient levels of bodies of water due to fertilizer run-off are potentially causing harmful algal blooms to occur more often and in areas not previously affected, ABC News reported. Warmer waters with a marked increase in surface temperature or a change in sea currents are particularly susceptible to the bloom. A harmful algal bloom can look like foam, scum or mats on the surface of water and can be different colors, according to theCenters for Disease Control and Prevention.

Invasive tick that can reproduce without mating has made its way to Tennessee -- There's a new kind of creepy-crawly to look out for in East Tennessee this summer. The invasive Asian longhorned tick, which can reproduce without mating, has been found on animals in Union, Roane and Knox counties. The parasite was first discovered about two years ago on sheep in New Jersey. "We kind of found the tick accidentally, and that's led a lot of people to question what ticks are here and if there are others missing from what we know of ticks in the country," said Dr. Rebecca Trout-Fryxell, a medical and veterinary entomologist at the University of Tennessee Institute of Entomology and Plant Pathology. "We got together and said well, we're just going to check all the ticks we can," she said. "What we're really trying to do is get a general assessment of what ticks are present in Tennessee." There are no reports of the tick farther south than Tennessee. It has also popped up in Arkansas, Connecticut, Kentucky, Maryland, North Carolina, New Jersey, New York, Pennsylvania, Virginia, and West Virginia, according to the Centers for Disease Control and Prevention. Outside of the United States, the ticks have been shown to carry multiple infections and viruses, but to date, no infectious agents have been identified in the Asian longhorned ticks found in the United States. The Centers for Disease Control has started colonies of the ticks to test whether or not they are able to carry and transmit pathogens found in the United States, like Lyme Disease or Rocky Mountain Spotted Fever. So far, only two people have been bitten in the United States, and Trout-Fryxell said she has found the ticks crawling across her body while collecting them in the field, but has never been bitten. 

Savage tick-clone armies are sucking cows to death; experts fear for humans - Ravenous swarms of cloned ticks have killed a fifth cow in North Carolina by exsanguination—that is, by draining it of blood—the state’s Department of Agriculture and Consumer Services warned this week. Experts fear that the bloodthirsty throngs, which were first noticed in the United States in 2017, will continue their rampage, siphoning life out of animals and eventually transmitting diseases, potentially deadly ones, to humans. Just last month, infectious disease researchers in New York reported the first case of the tick species biting a human in the US. The finding was “unsurprising” given the tick’s ferocious nature, according to Dr. Bobbi S. Pritt, director of the Clinical Parasitology Laboratory in Mayo Clinic. And it’s “extremely worrisome for several reasons,” she wrote in a commentary for the journal Clinical Infectious Diseases.  The tick—the Asian longhorned tick, or Haemaphysalis longicornis—was first found terrorizing a sheep in New Jersey in 2017 and has established local populations in at least 10 states since it sneaked in. Its invasive sweep is due in large part to the fact that a single well-fed female can spawn up to 2,000 tick clones parthenogenetically—that is, without mating—in a matter of weeks. And unlike other ticks that tend to feast on a victim for no more than seven days, mobs of H. longicorni can latch on for up to 19 days.

 Trump’s USDA Suspends Honeybee Survey - The U.S. Department of Agriculture's (USDA) annual honeybee count has fallen victim to budget cuts, CNN reported Saturday. The suspension of the Honey Bee Colonies report is at least the third bee-related data set to be halted or reduced under the Trump administration, and comes three weeks after Trump's U.S. Environmental Protection Agency approved the emergency use of bee-killing pesticide sulfoxaflor on 13.9 million acres. It also comes as the population of bees, which help pollinate a third of edible crops, has been declining since 2006. "This is yet another example of the Trump administration systematically undermining federal research on food safety, farm productivity and the public interest writ large," Union of Concerned Scientists economist Rebecca Boehm told CNN.The survey began in 2015 and tracks the number of honeybees in each state by quarter. The most recent report, scheduled to be released in August, will only include data taken from January 2018 to April 2019, the USDA's National Agricultural Statistics Service said in a statement released July 1."The decision to suspend data collection was not made lightly but was necessary given available fiscal and program resources," the statement said.A USDA spokesperson told CNN the suspension was "temporary" but did not say how long it might last.The loss of the data set comes at a crucial time for honeybees. A University of Maryland-led study released in June found that U.S. beekeepers lost 38 percent of their colonies last winter, the greatest winter loss since the university's research began in 2006, The Washington Post reported. "We don't seem to be making particularly great progress to reduce overall losses,"

Watch- Honey Bees Drop Dead Following California Earthquake -- If the dwindling bee population across the US wasn't enough, new footage uploaded onto social media shows, in one instance, thousands of bees dropping dead upon a series of earthquakes that shook California last week, reported Sputnik. Southern California was hit by two earthquakes late last week: a 6.4 magnitude quake on Thursday, accompanied by a 7.1 magnitude earthquake Friday evening, both with an epicenter near the Mojave Desert. On Saturday morning, blogger Khalil Underwood from California uploaded the footage onto Twitter of thousands of dying bees spread across his driveway following the massive quakes.  A terrified Underwood told his followers: "This is crazy. I've never witnessed anything like this." "Look how many f***ing bees are on the f***ing floor from the earthquake."  He first tweeted there was "like 70 [bees] on the floor just buzzing & dying," but later said, "I wasn't exaggerating or joking..... after the Earthquake thousands of bees were vibrating on the floor and dying.... this shit was so crazy to me." Over 500 responses had people from all walks of life try to explain what exactly happened to the bees.  Some suggested the quake had distorted the magnetic fields the bees' brains were dependent on leaving them disoriented.  ​"I just read that they abandon the hive during earthquakes, and return when it's over. The constant aftershocks could be keeping them from 'homing, which is probably not good", one Twitter user wrote, while another associated the bee deaths to fluctuations in the Earth's magnetic field during quakes.There is no definitive answer as to why the bees died after the quakes.However, a study from Taiwan during two significant earthquakes in 1999 and 2002 showed a catastrophic effect on insect communities, resulting in "large declines in total individual number but also total species number of insects." The US Geological Survey (USGS) had previously said it is "possible" a "seismic-escape response" may have triggered animals' natural instincts to escape predators.

Thousands of dead fish litter Kentucky River after Jim Beam warehouse fire - Crews continue to track the environmental impact of the massive Jim Beam warehouse fire in Northern Kentucky, as run-off from the fire has traveled more than 20 miles along the Kentucky River, killing thousands of fish. No one was injured in the Versailles, Kentucky fire that burned more than 45,000 barrels of bourbon, but the contaminated liquor is beginning to travel from the Kentucky River into the Ohio River. CBS affiliate WKYT-TV reported that an emergency response team is tracking the plume of alcohol that is moving at an estimated .6 miles per hour. Crews are testing for dissolved oxygen and officials with the Kentucky Energy and Environment Cabinet say the alcohol is leading to extremely low oxygen levels in the water. The low oxygen levels have created conditions that threaten the atmosphere of the fish, leading to an increase in deaths. In a Facebook post on Monday, the Kentucky Energy and Environment Cabinet said, "The Department of Fish and Wildlife Resources is on the river again today to continue wildlife assessments and fish kill count. Results are pending." They added, "We continue to see dead and dying fish. People using the Kentucky River in the area of the plume will likely see and smell dead fish." "The bacteria in the water is going after the food source, which is the sugar in the alcohol and so they deplete the oxygen. The fish start to become distressed, and they eventually die," said Robert Francis, the manager of the emergency response team.Officials say the alcohol should dilute significantly once the 24-mile long plume flows into the Ohio River. In the meantime, crews are using barges to aerate the water and bring the oxygen levels up in affected areas. They say the levels have already returned to normal in some areas. According to officials, the dead fish will decompose naturally with no harm to the river, so there is no plan to remove them.

Tens Of Thousands Of Fish Dead After Jim Beam Warehouse Fire Spilled Bourbon Into Local River - "Tens of thousands" of fish are dying from water contaminated with Jim Beam after a previously reported warehouse fire resulted in 45,000 barrels being displaced, Bloomberg has reported. And while the fish aren't dying from alcohol poisoning, they reportedly can’t breathe due to sugar from the alcohol, creating a microbe feeding frenzy in the water where they swim, which is reducing oxygen levels in the water and suffocates the fish.The plume of alcohol in the river stretches 23 miles long, according to a state news release, and the river near the Jim Beam warehouse has seen its fish death toll run into the "tens of thousands".  Barges are now trying to mix air into the water using pumps, hoping to provide more oxygen to the fish. "Optimistic" authorities are predicting that the death count will not reach the hundreds of thousands of fish that the state estimates were killed in a 2000 fire that destroyed 17,000 barrels of Wild Turkey at a nearby warehouse. Jimmy Russell, master distiller with Wild Turkey told the University of Kentucky in an oral history project on the fire that "The reason they quit pumping is they didn’t know whether to charge by the drink or by the gallon coming into town." This doesn't look to be the case with the recent Jim Beam fire: The Jim Beam incident has had a smaller impact on drinking water. There have been some reports of locals saying there’s a slight smell and discoloration to their water, but water treatment plants have tested the water and it’s safe to drink... Last week we reported that the Jim Beam warehouse containing 45,000 barrels of "relatively young whiskey" had caught fire, according to a statement from Beam Suntory, parent of Jim Beam. The warehouse was in Versailles, Kentucky; 40 firefighters from five counties responded especially after a second warehouse also caught fire, but was later contained.

The Invasion of Giant Pythons Threatening Florida - In the campsites of Everglades National Park, raccoons don’t rattle the trash can lids at four in the morning. Marsh rabbits don’t scatter with a nervous rustle on the hiking trails as you walk by. Tires don’t shriek when somebody brakes to avoid an opossum transfixed by headlights in the middle of the road. In fact, roadkill, which used to be common in this wildest part of Florida, is no longer seen. The raccoons and marsh rabbits and opossums and other small, warmblooded animals are gone, or almost gone, because Burmese pythons seem to have eaten them. The marsh’s weird outdoor quiet is the deep, endlessly patient, laser-focused quiet of these invasive predators. About two feet long when hatched, Burmese pythons can grow to 20 feet and 200 pounds; they are among the largest snakes in the world. The pythons are mostly ambush hunters, and constrictors. They kill smaller animals by biting them on or near the head and suffocating them as they are swallowed. Larger animals are seized wherever is convenient, and crushed and strangled in the coils before and during swallowing. Large constrictor snakes have not existed in North America for millions of years. Native wildlife species had never seem them before, and may not recognize them as predators. In Miami, a center of the exotic pet trade, dealers used to import them from Southeast Asia by the tens of thousands. It is now illegal to import or purchase Burmese pythons in Florida. For 25 years they have been eating any animals they can get their mouths around. Given the extremely stretchy cartilage joint connecting their jaws to their heads and their ability to extend their windpipe, snorkel-like, outside their mouths, so they can breathe while their mouths are entirely occupied with swallowing—that’s a lot of animals. A 2013 study found that, of a group of marsh rabbits fitted with radio transmitters and released into python territory, 77 percent of those that died within a year had been eaten by pythons. Scientists say that the snakes are responsible for a recent 90 to 99 percent drop in the small mammal population in the national park.

Mysterious Disease Ravages Caribbean Reefs - Marine biologists are dealing with a mystery. What's killing the coral reefs in the Caribbean? The scientists first noticed a deadly outbreak earlier this year off the coast of St. Thomas in the U.S. Virgin Islands. Big white lesions were breaking up the colorful tissues of stony corals. Some corals died the next day, bleaching completely. Others suffered for weeks, but within four months, more than half the reef died off from the mysterious disease, as Science News reported.Researchers estimate that the mysterious disease is now affecting around a third of the Caribbean's 65 reef-building species, but they remain unsure if the disease is microbial, bacterial, viral or something else."Whatever the cause, it's annihilating whole species," said Marilyn Brandt, a coral ecologist at University of the Virgin Islands, leading a research team studying the outbreak, as Medical Daily reported.Brandt's team is trying to figure out what is causing the disease by looking at the corals' microbiomes — the colonies of microbes that live in and on the corals. The researchers have to perform the arduous task of figuring out what normally belongs on corals and what doesn't, according to Science News.So far, the prime suspect in the outbreak is stony coral tissue loss disease, known by its catchy nickname skittle-D, which was discovered near Florida five years ago when it triggered one of the deadliest coral disease outbreaks on record, according to Science News. That outbreak has continued for five years off the coast of Florida and spread over 580-kilometers, surprising scientists since outbreaks usually die off after a few months.

Hot Dog, Hamburger Buns Recalled Over Possible Plastic Contamination - Georgia-based Flowers Foods is recalling buns and other bakery products sold at major retailers including Walmart, Sam's Club, Dollar General and Target because they might be contaminated with small pieces of hard plastic, WSIL reported.The company announced the recall Tuesday after discovering pieces of hard plastic in production equipment."Consumption of product may cause a choking hazard," Flowers Foods said.However, there have been no reports of injury so far.The recall impacts a number of brand names distributed in Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Missouri, Mississippi, North Carolina, Ohio, South Carolina, Tennessee, Texas, Virginia and West Virginia.Impacted stores include 7-Eleven, Walmart, Target, Piggly Wiggly, Publix, Ingles and IGA, while the recalled brands include Wonder, Great Value, Market Pantry, Nature's Own and Sunbeam, WebMD reported.The affected products all have best-by dates of July 17 to 19. Below is a full list of the impacted products. For UPC codes and lot numbers, check the Flowers website or the Food and Drug Administration.

Japan’s famous Nara deer dying from eating plastic bags -- Authorities in Japan’s ancient capital Nara are warning visitors not to feed the city’s wild deer – a major tourist attraction – after several of the animals died after swallowing plastic bags.Large amounts of plastic waste were found in the stomachs of nine of 14 deer to have died since March, according to a local wildlife conservation group.The bags and wrappers are thought to have been discarded by visitors who fed the animals, ignoring signs in English and Chinese warning them to give the animals only approved senbei crackers that are sold in local shops and do not come in plastic packaging. Officials from the Nara Deer Preservation Foundation discovered masses of bags and other plastic items inside the dead animals’ stomachs, according to Kyodo news agency. One of the deer had swallowed 4.3kg of plastic, it added.The deer are attracted by the smell of food coming from plastic bags discarded by tourists, who flock to Nara to view its shrines and temples and interact with the estimated 1,300 free-roaming deer in the city’s main park.Rie Maruko, a vet and member of the conservation group, said the deer died from starvation after plastic and other foreign objects damaged their complex digestive system.“The deer that died were very skinny and I was able to feel their bones,” Maruko told Kyodo. “Please don’t feed them anything other than the designated senbei snacks.”

A New Look at the “Guts” of the Plastic Pollution Problem | Sierra Club -- During a sweeping shot of a mountain range overlooking the ocean in Newfoundland, Canada, birds caw but can’t be seen and wind blows through the foliage. These are the traditional ancestral lands of the Beothuk and Mi’kmaq, as well as other Indigenous groups. They are lands being overrun by plastic pollution.  When villagers in the area go out to fish now, they see plastic fragments floating everywhere in their waters. Guts, a short documentary curated as part of the Atlantic Selects series, follows scientist Max Liboiron and her work at the Civic Laboratory for Environmental Action Research (CLEAR), an anti-colonial, feminist laboratory that researches marine plastic pollution. Liboiron and her colleagues at CLEAR largely use community-based and citizen-science monitoring to understand the prevalence of microplastics in waters and food webs. CLEAR scientists collect the guts of animals caught for food around Newfoundland to see how much and what kind of plastic is inside. Since wild-caught food is an important part of the diet in and around Newfoundland, CLEAR’s research on how much plastic different fish ingest becomes especially relevant for residents consuming that fish.

Turn back trash: Importers have 90 days to return waste to US, Europe, Australia -The Batam Customs and Excise Office has warned the importers of 49 containers filled with hazardous waste to follow the government’s order of returning the waste to their countries of origin within 90 days.  Office head Susila Brata said the he had sent letters ordering four companies which were responsible for the delivery of the illegal containers—most of which were from the United States—to return them following a recommendation from the Environment and Forestry Ministry. The containers, which were described as containing plastic scraps for industries on their manifests, turned out to contain diapers and toxic waste, which are illegal to import.  Susila said that according to good importation procedures, the importers had 90 days to begin the return process from their arrival on June 13. This means that the companies have to send the containers back to US, Australia, Germany, France and other European countries by the middle of September.   “If they don’t comply, their import licenses will be revoked and the Trade Ministry and the environment ministry will investigate them,” he said.The customs and excise office seized 65 containers at Batu Ampar Port following reports that they contained toxic and hazardous waste. An inspection by the environment ministry and local authorities found that only 16 containers met import standards.  Previously, Royal Citra Bersama director Amin said he was surprised by the seizure and inspection at the port because the delivery of plastic scraps was routine for local industries that produced pellets for China.    “The imported waste is from the US and has been surveyed there to meet the standards for pellet production. We have had no problems so far, I wonder why there is an issue now,” he said. He has run a plastic waste processing plant since 2000. 

 Recycling Woes: Indonesia Sends Waste Shipment Back to Australia - Indonesia this week became the latest Asian country to reject – and return – a shipment of waste sent to it for recycling.As the Guardian reports in Indonesia sends rubbish back to Australia and says it’s too contaminated to recycle: Indonesia says it will send eight containers of household rubbish back to Australia after inspectors declared the material too contaminated to be recycled.It is the latest in a series of announcements by south-east Asian nations that they will not be dumping grounds for overseas waste.Indonesian customs officials said the containers of paper from Australia were contaminated by electronic waste, used cans, plastic bottles, old bottles of engine oil and loose shoes. Some of this was deemed “B3”, an abbreviation of “bahan berbahaya dan beracun”, which refers to toxic and hazardous material.Opening the containers up for the press on Tuesday morning, gloved customs officials held up examples of the offending material, including used nappies and soft drink cans.Speaking at Tanjung Perak port in Surabaya, customs officials said eight containers holding 210.3 tonnes of waste would be returned. The worldwide market for recyclables was upended in 2017, when China – previously the destination for many waste imports, including plastics – announced it would no longer accept such shipments for recycling. Initially, Southeast Asian countries took up the slack and accepted these imports  (see Waste Watch: US Dumps Plastic Rubbish in Southeast Asia). But the volume of such material eventually overwhelmed the ability of these countries to process the waste, and they have more recently reversed course and rejected some shipments, thus in some instances returning waste to its country of origin, according to this post by Kate O’Neill, As Developing Countries Reject Plastic Waste Exports, Wealthy Nations Seek Solutions: On May 28, 2019, Malaysia’s environment minister announced that the country was sending 3,000 metric tons of contaminated plastic wastes back to their countries of origin, including the United States, Canada, Australia and the United Kingdom. Along with the Philippines, which is sending 2,400 tons of illegally exported trash back to Canada, Malaysia’s stance highlights how controversial the global trade in plastic scrap has become. Malaysia, Thailand and Vietnam are all halting flows of plastics that once went to China but were diverted elsewhere after China started refusing it. They are finding support from many nations that are concerned about waste dumping and marine plastic pollution.

What a waste: the G20 and the plastic problem  The recent G20 energy and environment ministers meeting in Osaka delivered an “implementation framework” for reducing the rapidly increasing levels of plastic waste choking the world’s seas and oceans. This year’s framework declaration echoes concern already expressed at the 2017 G20 meeting in Germany, and further focuses both government and public attention on the growing threat marine plastic waste poses not only to the marine environment but also to human food security.But despite the G20’s latest declaration of its commitment to reduce marine plastic waste, there is still little reason to believe anything substantial will be done. There are already several international agreements in place to reduce marine plastic waste; the problem, however, is they are not having much effect. What the Osaka G20 Implementation Framework will do to make these and other measures more effective remains very unclear since it is so short on detail. The first point to make about the Osaka Framework (and its sister agreement, the 2017 G20 Action Plan) concerns what it isn’t and probably never will be, a legally binding agreement. The Framework is aimed at reducing marine plastic waste, but its proposed measures are both voluntary and vague. The Framework thus is not a treaty, only a “declaration” of intent. So unlike the United Nations Framework Convention on Climate Change (UNFCCC) and many other founding environmental agreements, it has no legal status under international law and creates no actual commitment for governments to do anything further. But like the UNFCCC, the Osaka Framework is essentially little more than the formal recognition of a) an important global problem, and b) the need to do something about it. As a treaty the UNFCCC did at least require governments to negotiate binding commitments at some point (the ill-fated Kyoto Protocol). The Osaka Framework received unanimous support from governments but, like the UNFCCC’s creation at the 1992 Rio Summit, its purpose is uncontroversial primarily because supporting the framework is cost free.

Toilet paper is getting less sustainable, researchers warn - - Toilet paper – the one product that the majority of us use just once and flush away – is becoming less sustainable, according to research. Analysis from Ethical Consumer magazine found that major brands were using less recycled paper than in 2011, while only five of the nine major supermarkets (the Co-op, Morrisons, Sainsbury’s, Tesco and Waitrose) offered an own-brand recycled toilet paper. The large-scale use of virgin paper contributes to unnecessary deforestation.The UK uses 1.3m tonnes of tissue a year, according to the Confederation of Paper Industries, with the average British consumer reportedly getting through127 rolls every year. But the growing trend for “luxury” four-ply and quilted toilet roll is fuelling the use of virgin pulp in an effort to create the softest product, the study claims.“There is no need to cut down forests to make toilet roll, yet this is precisely what is happening,” said Alex Crumbie, a researcher for Ethical Consumer. “With consumer attention focused on plastic, some of the big brands have slowed and even reversed their use of recycled paper in the toilet rolls they make.” The study singles out Kimberly-Clark, one of the biggest suppliers of toilet tissue worldwide. The proportion of recycled wood pulp used by the company has fallen over the years. In 2011, just under 30% of the total fibre used was recycled, but by 2017 this figure had fallen to 23.5%. Its popular Andrex brand used to offer a recycled/bamboo range but this was discontinued in 2015.  A 2017 Greenpeace report warned that large parts of Sweden’s Great Northern Forest, and the biodiversity contained within it, were under threat from the timber industry’s growing demand for virgin wood. The new research flags to consumers that the chemicals used in the production of recycled paper are far less toxic than those used to bleach virgin pulp. It also warns consumers to be wary of thinking an FSC label on toilet roll is enough to ease their conscience.

A day's work on Delhi's mountain of trash - From afar, the Ghazipur landfill looks like an arid plateau on the outskirts of India's capital. But this mountain isn't made of earth. It's made of trash. It bakes in 100-degree summertime heat, emitting fumes and oozing toxins into the groundwater. At 20 stories high, and growing, it'll soon be taller than the Taj Mahal. (The Ghazipur mound is 213 feet; the Taj is 240 feet high.) Two years ago, a landslide of soggy garbage killed two local residents. This is one big, smelly, dangerous example of how India is growing, getting richer — and generating more waste than it's able to handle. There are three other major landfills that ring the Indian capital, and hundreds more across the country. A slum of trash pickers has cropped up alongside the Ghazipur landfill, gleaning a living from it — or just barely. They scavenge plastic to sell to recycling plants. "This work is easier in winter," says Sheikh Rahim, 36, a wiry, compact man with one gold hoop earring. "But I like it all right. I'm used it, and anyway, I don't have a choice." Rahim never went to school. He moved here 19 years ago from the city that was then called Calcutta. He married a local woman, and they have four children. Every day at noon, Rahim climbs the trash mountain — in sandals. He prefers to go at the hottest time of day, when there's less competition. Sometimes his 8-year-old daughter Chandini comes with him. First he shimmies under coils of barbed wire, which police put up around the perimeter of the mountain two years ago, after the landslide deaths, to keep people like Rahim out. Then he fords a fetid creek that circles around part of the trash heap like a moat.  He says his hands get cut, and his back gets scraped by the barbed wire. He gets shots regularly, to ward off infection. Atop the mountain, Rahim uses a rod to rifle through the mound. The garbage is mostly gray and decaying, bleached by the sun. Vultures circle above him and dive, plucking bits of plastic in their beaks. Before dusk, Rahim descends with a sack full of recyclables.  Most of India's recycling happens like this. Even if you sort your trash at home, municipal garbage collectors — if they even service your neighborhood — often toss it into the truck all together. It gets sorted again at a landfill — not by the municipality but by the poorest of the poor.

A Ferocious Heat in Delhi - In early April, a fire began to smolder inside the Ghazipur landfill, the trash mountain that stands like a brown, stinking sentinel, two hundred feet high, on the outskirts of New Delhi, the district of the larger city that serves as India’s administrative capital. Journalists in India write that it will rival the height of the Taj Mahal in another year, a statistic presented with a tinge of perverse pride. Ragpickers climb the shifting, treacherous slopes of the landfill, which widens into a low range of hills; hawks, black kites, and other birds of prey circle overhead. Landfill fires break out from time to time. But over the last few years, they have become a signal that summer has arrived in Delhi. Other signs are equally stark—fierce water wars as too many citizens in slums and low-income neighborhoods line up for too few water tankers; temperatures so scorching that if you touch the railing of a city bus you see red blister spots rising on your palm; the thick plume of dust from the Thar Desert that blasts in blinding storms through my burning city. The trash fires send acrid waves of oily, brown, superheated smoke into the already foul air of the world’s most polluted city. Two days after the April fires start, I’m in the Ghazipur area. I step out of the car with the arrogance of a lifelong Delhiwallah, looking up at the burning garbage mountain, convinced that my lungs, already leathered and mummified by the bad air, can take it. Within seconds, my chest feels aflame. My coughs are ratchety, tubercular—a pathetic display of weakness for someone who thought she’d accustomed to the city’s fetid air by now.  A child runs past, a worn cricket bat in his hand. He looks at me with pity and scorn. I’m just one of the many who are too soft for his part of Delhi. * “Heat wave” feels like too mild a term for the changes sweeping Delhi, much of northern India, and Europe. You expect a hot spell to come and go, but the blistering furnace of this summer is a steady assault on the senses, testing health and sanity. I taste dust in the fiery air, dust at the back of my throat; a thick fur of brown dust coats the windows and peels like fungus off the air conditioner filters, no matter how often you clean them. On the last day of April, the temperature reached 113 degrees Fahrenheit, the first time in almost fifty years that the city had seen that kind of heat; on June 9, the government issued a red alert, as the mercury reached 118 degrees. At that temperature, your eyes feel sandblasted, your skin feels on fire, the water is hot from the tap, and the leaves on the neem and amaltas trees wither and shrivel. The worst-affected of the city’s 1.98 million population are those in jobs far from the luxuries of air-conditioning or ceiling fans—construction workers, clerks who cycle for miles to their offices, delivery boys, the women who run pavement stalls. At least 100 deaths across the country have been attributed to the heat, and city hospitals have seen a spike in emergency room visits, mostly for heat stroke, severe dehydration, and lung problems—with parts of the country potentially becoming too hot to be inhabitable.

Are parts of India becoming too hot for humans? -  Intense heat waves have killed more than 100 people in India this summer and are predicted to worsen in coming years, creating a possible humanitarian crisis as large parts of the country potentially become too hot to be inhabitable. Heat waves in India usually take place between March and July and abate once the monsoon rains arrive. But in recent years these hot spells have become more intense, more frequent and longer.India is among the countries expected to be worst affected by the impacts of climate crisis, according to the Intergovernmental Panel on Climate Change (IPCC). Experts at the Massachusetts Institute of Technology (MIT) say that even if the world succeeds in cutting carbon emissions, limiting the predicted rise in average global temperatures, parts of India will become so hot they will test the limits of human survivability. "The future of heat waves is looking worse even with significant mitigation of climate change, and much worse without mitigation," said Elfatih Eltahir, a professor of hydrology and climate at MIT.  The Indian government declares a heat wave when temperatures reach at least 4.5 degrees Celsius (8.1 Fahrenheit) above the "normal" temperature for that area for at least two days. A heat wave becomes "severe" when temperatures climb to 6.4 degrees Celsius (11.5 Fahrenheit) above normal for at least two days. Thresholds for heat waves, therefore, differ across the country -- in the capital New Delhi, a heat wave is declared after two consecutive days of temperatures of at least 45 degrees Celsius (113 Fahrenheit). Last year, there were 484 official heat waves across India, up from 21 in 2010. During that period, more than 5,000 people died. This year's figures show little respite.India's poorest state, Bihar, closed all schools, colleges and coaching centers for five days after severe heat killed more than 100 people. The closures were accompanied by warnings to stay indoors during the hottest part of the day, an unrealistic order for millions of people who needed to work outdoors to earn money.

 Iowa Crops Look Like Food — But No One’s Eating --I was in Iowa last week shooting for the PBS NewsHour Weekend “Future of Food” series. There are some good things going on — and you’ll see them in the segment, which will run later this summer or fall — but I left feeling depressed as hell. It’s bad enough that Iowa plays an outsized role in determining presidential candidates, but its impact on the food system is even greater, and may be even more difficult to change.  Iowa farmers generally do not irrigate, which distinguishes the state from California, of course, as does the astonishing dominance of the almost exclusively two-crop economy based on corn and soybeans.   What were prairie and wetlands are now neatly partitioned grids of intensely cultivated land: the model for the farm as factory. Through a system of underground “tiles” (pipes, really) in the northern half of the state, most of the water has been drained from swamps, prairie potholes, and lakes into creeks and rivers, which in turn have been engineered to maximize flow.  Thus, much of the landscape has been reshaped to make large-scale mechanical farming as productive as possible. Twenty-three million acres are planted in corn and/or soybeans; that’s 63 percent of all the land in the state, and more than the land area of each of 20 states. Nor is Iowa alone. An area the size of Montana is planted in corn every year in the United States; less than 1 percent of that is sweet corn eaten by humans.  The ground is barely used for growing food: The grain elevator — the point of contact between the farmer and the industrial commodity system — buys only corn and soybeans. It’s near impossible for all but the most creative farmers to sell anything else. Fifty percent of the corn in Iowa is used to produce ethanol.  Most of the rest goes to feed animals in confinement, almost all of which are behind closed doors in buildings designed for secrecy. There are 20 million hogs at any given moment in the state, and in four days of crisscrossing a patch northwest of Des Moines, I did not see one. The farmers I spoke to don’t seem to know or care where their crop goes: Ethanol? Chicken feed? (Fifty-nine million mostly invisible chickens produce 16 billion eggs annually, statewide.) Cheetos? It’s all the same.

Wettest 12 Months in U.S. History, Yet Again - Topping a remarkable record that was set just a month earlier, the year-long period ending in June was the wettest 12-month span in U.S. records that go back to 1895. For the 48 contiguous U.S. states, precipitation averaged 37.86” over the period from July 2018 to June 2019. The previous record for any 12-month period was 37.68”, recorded from June 2018 to May 2019. No other year-long spans on record have averaged more than 37 inches for the entire nation. What’s more, going back another month, the period from May 2018 to April 2019 recorded 36.20”, putting it in third place. Another period of sustained wetness in 2015-16, including a peak in spring 2015, led to the fourth and fifth wettest year-long spans on record. Sixth place is now held by April 2015 – March 2016. Put another way, the six wettest spans among all of the 1494 overlapping year-long spans since January 1895—and seven of the eight wettest—have occurred in the last five years. Here is the current top-ten list:

Flooding Disrupts DC as Capital Receives Month’s Rain in 1 Hour -  The Washington, DC region received a month's worth of rain in one hour Monday, leading to the most severe flooding in the area in recent years, The Washington Post reported. The climate crisis has led to an uptick in extreme downpours, since warmer air can hold more moisture,according to the National Climate Assessment. Meteorologist Alex Lamers said that Monday's downpour had a less than 1 percent chance of occurring in a given year.In total, Ronald Reagan Washington National Airport recorded 3.3 inches of rainfall between 9 and 10 a.m. and 3.44 inches total, according to The Washington Post. That number broke DC's total rainfall record for the date, which was previously set at 2.16 inches. Other areas that recorded high rainfall totals included North Potomac, Maryland with 5.55 inches, Gaithersburg, Maryland with 4.64 inches, Oakton, Virginia with 4.93 inches and Arlington, Virginia's Westover neighborhood with 4.5 inches. The deluge delayed flights and trains, including six Amtrak trains stopped "due to flooding/washout conditions," Amtrak spokesperson Jason Abrams told CNN.The flooding was also a danger for commuters, closing several roads in downtown DC and surrounding areas and prompting multiple water rescues, AccuWeather reported. Department of Transportation & Environmental Services Deputy Director in Alexandria, Virginia Jeff DuVal told CNN it could take a while for the flooding to go down and roads to reopen."Even though the rain has slowed down, the intersections and roads will remain flooded because the drains simply can't handle the volume of rain that's being sent their way," DuVal told CNN. "There is no way of knowing how long it will take for the flooding to subside." Underground transport was not spared, as social media users shared videos of water pouring into metro stations.The flooding also reached the halls of power, causing leaks in the Pentagon and flooding in the White House basement. CNN Pentagon correspondent Barbara Starr photographed water entering the second floor of the Pentagon from both rain dripping down from the fifth floor and the Potomac River seeping in from below.

Flash flooding prompts rescues, evacuations in south-central Nebraska — The National Weather Service says up to 9 inches of rain fell Monday evening into Tuesday morning in parts of Buffalo, Dawson, Kearney and Phelps counties. Many streets and businesses are flooded in Kearney. Firefighters have been rescuing a number of people stranded by street flooding. They've been rescuing guests from hotels in the southern part of the city and taking them to higher ground.  So far, there are no reports of any injuries.The University of Nebraska at Kearney is offering dorm space as a temporary housing for people affected in Kearney and surrounding communities. The university is also working with nearby hotels to relocate and house hundreds of travelers who were evacuated. Joey Decker Productions shares a bird's eye view of the flooding near 2nd Avenue in Kearney.The Nebraska State Patrol used a light armored vehicle to navigate the flooded roads in Kearney.Kearney police officers and Nebraska troopers have been checking several businesses impacted by high water.Lexington is also dealing with high water. According to the Dawson County Sheriff's office, several vehicles stalled in high water on U.S. Highway 30. Neighborhoods and highways in town are waterlogged. The American Red Cross also has opened a shelter inside Lexington High School.During the heavy rain, a driver became stuck in the middle of Highway 30 in Lexington Monday night.Holdrege Police Department captured the aftermath of the heavy rain. Photos showed where several feet of water filled up in low spots. Another picture showed what appeared to be a truck possibly floating in the water. Flash flooding wasn't the only factor. Nebraska Public Power District reports the storm knocked down two miles of power lines between Holdrege and Axtell, destroying 36 poles.

Flash flooding hits New Orleans as Mississippi River forecast to rise - Flash flooding from heavy rains battered New Orleans on Wednesday, and the worst might be yet to come. Meteorologists are predicting that the Mississippi River could rise up to about 19 to 20 feet by the weekend, which is the height of the city’s levees. The entire Gulf Coast meanwhile braced for major thunderstorms, tropical storms and possibly a hurricane over the next couple of days. In New Orleans, more than 6 inches of rain fell on the Big Easy between 7:41 a.m. and 10:45 a.m. Wednesday, as residents and visitors to the popular tourist city fled for cover or higher ground. The National Weather Service issued a flash flood warning at 7:41 a.m. and upgraded that to a flash flood emergency at 9:02 a.m., acknowledging that “flash flooding is already occurring with numerous streets and underpasses severely flooded.” “Even though I grew up with Midwestern tornadoes and summer storms, this was next level in terms of the absolute deluge of water coming down so fast,” California high school teacher Ellen Austin, in town for a convention, told NBC affiliate WDSU. “The water just came up in the streets in what felt like no time at all. And we have been cut off, with doors blocked with towels to keep water out, since this morning. It’s been a bit surreal.” A waterspout, a kind of a tornado that forms over a body of water, was spotted over Lake Pontchartain, WDSU reported. Louisiana Gov. John Bel Edwards said heavy rains threaten to be too much for levees protecting Plaquemines Parish which extends southeast, into the Gulf of Mexico. “Right now, we believe that any overtopping of the levees will be relatively short duration of about 12 hours, but that is still a very, very significant hazard,” Edwards said Wednesday morning. “We’re not sure whether the state will be opening any shelters yet.”

New Orleans is already flooded, and the worst may be yet to come: Forecasters are predicting a hurricane - New Orleans is prepping for a hurricane. The flooding has already hit.On the same day that a National Oceanographic and Atmospheric Administration report warned Americans of a "floodier" future, some streets in Louisiana's largest city, including in the famed French Quarter, looked more like rivers.Lines of thunderstorms associated with a weather system that is predicted to develop into a hurricane by Friday struck New Orleans with as much as 7 inches of rain within a three-hour period Wednesday morning, forecasters said. The city was engulfed with water, leaving residents to contend with swampy streets, overturned garbage cans and flooded vehicles. Some even paddled their way down the street in kayaks.  Chandris Rethmeyer said she lost her car to the flood and had to wade through water about 4 feet deep to get to safety.  Rethmeyer said she was on her way home after working an overnight shift when she got stuck behind a car accident in an underpass and the water began to rise.   The tides were reminiscent of sudden flooding that took the city by surprise in August 2017. That flood not only required major repair efforts, but also exposed significant problems within the agency overseeing street drainage and lead to personnel changes at the New Orleans Sewerage and Water Board. Forecasters said that Louisiana could see up to 12 inches of rain by Monday, with some isolated areas receiving as up to 18 inches. That heavy rain could push the swollen Mississippi River dangerously close to the top of the city's levees, officials cautioned.  The river was expected to rise to 20 feet by late Friday at a key gauge in New Orleans. The area is protected by levees 20 to 25 feet high, he said. Louisiana Gov. John Bel Edwards declared a state of emergency: "The entire coast of Louisiana is at play in this storm," Edwards said.

Major flooding inundates New Orleans as Tropical Storm Barry heads towards landfall - Heavy rains from Tropical Storm Barry caused massive flooding in New Orleans, Louisiana on Wednesday morning and into the afternoon. Tornado warnings and flash flood warnings were issued in the city as residents dealt with flooded homes and vehicles. Flooding on Wednesday near downtown New Orleans As many as eight inches of rain fell in only three hours, causing flash floods that took many residents by surprise. However, the city is expected to receive between 10 and 20 inches of rain over the weekend as Barry, which is still in the Gulf of Mexico as of this writing, is projected to strengthen to a Category One hurricane before it makes landfall Saturday morning with wind speeds up to 95 miles per hour. New Orleans Mayor Latoya Cantrell has issued a state of emergency, although she declined to call for mandatory evacuations, while President Donald Trump has issued a federal disaster declaration. A mandatory evacuation order has already been issued to residents of nearby Plaquemines Parish along the east bank of the Mississippi River. On Wednesday, residents waited for drainage pumps to empty flooded streets, as cars floated down city roads and drivers swam to safety. Several restaurants and stores were forced to close as workers were stranded in their homes, unable to travel the dangerously flooded streets. Flooded vehicles along an overpass in downtown New Orleans Drivers abandoning their vehicles were forced to wade through waist high floodwaters, potentially exposing themselves to a toxic slew of bacteria and chemicals usually contained in city floodwater. Hours-long traffic jams slowed travel through the city as flooded and abandoned vehicles littered city streets. Affected neighborhoods included areas that do not normally experience flooding during rainstorms, including areas of the city that occupy higher grounds along the river. For example, residents could be seen on Wednesday afternoon kayaking down Magazine street in Uptown. The famed French Quarter entertainment district, which did not flood even during Hurricane Katrina in 2005, was inundated with water on Wednesday afternoon.

Groundwater Pumping Diminishes Streams Across The Country, Study Finds - Groundwater pumping is causing rivers and small streams throughout the country to decline, according to a new study from researchers at the Colorado School of Mines and the University of Arizona. Scientists have known for a while that there’s a link between groundwater and surface water that runs through streams and rivers. Previous studies have shown pumping near a stream will eventually cause its levels to drop. “If you pump near a stream you’re going to change the amount of water that flows through the stream, because some of that stream water is going to basically get pulled to the well instead of flowing down the stream,” said Reed Maxwell, hydrologist at Colorado School of Mines and the study’s co-author. Maxwell says his new study with hydrologist Laura Condon at the University of Arizona goes broad, quantifying the effect of pumping across the country. “What we found is that we have actually depleted streams quite a bit,” Maxwell said. The study finds that since the 1950s, groundwater pumping has caused some stream flows to decline upwards of 50%. Some streams have disappeared from the surface altogether, seeping underground to refill pumped groundwater, the study finds. Declines are particularly stark in portions of the Colorado River basin and on the Great Plains, Maxwell said. Using a computer model, researchers were able to envision what rivers across the U.S. would’ve looked like without widespread groundwater pumping, which took hold in the 1950s. The U.S. Geological Survey has put the loss of groundwater over the 20th century at 649 million acre-feet. One acre-foot is enough water to supply roughly two households’ water use for a year.

Train Carrying 660,000 Gallons of Water Arrives in India’s Parched Chennai - A special train loaded with 2.5 million liters (approximately 660,000 gallons) of water reached the parched Indian city of Chennai Friday, The Times of India reported. The water was sent to relieve India's sixth-largest city, which is running out of water due to lack of rain.The train left the station in Jolarpet around 7:10 a.m and arrived in Chennai around noon, where it was greeted by state ministers. It was scheduled to depart Thursday, but was delayed due to leaking in the valves connecting the water tank to the railway station, Reuters reported.The train is set to be the first of many: Tamil Nadu Chief Minister Edappadi K Palaniswami promised in June to send trains carrying 10 million liters (approximately 2.6 million gallons) a day, The Hindu Business Line reported. It is part of an attempt to serve a city whose four reservoirs have all run dry.Up until now, water has been transported into the city via some 15,000 tankers a day, more than 9,000 from the city and another 5,000 from private companies, according to The New York Times. People living on the outskirts of the city block roads when the tankers pass out of concern that all the water is being directed towards companies, city residents and hotels, Reuters reported.Palaniswami spoke to the problem of distribution when he announced the plan to send the trains. He said Chennai Metrowater was inundated with requests for extra supplies from apartment owners."We cannot supply water only to the affluent but also need to take care of poor people. Due to the severe shortage, I urge people to use water sparingly," he said, as The Hindu Business Line reported. The crisis has disrupted daily life, causing some schools to close and prompting some businesses to urge their employees to work from home, Reuters reported.

India’s Water Crisis Is Man-Made - One of India’s largest cities, Chennai, is dealing with a crippling crisis: It has run out of water. In the middle of a particularly hot summer, the four lakes that supply the capital of the southern state of Tamil Nadu have dried up; together they contain just 1% of the volume they did last year. Residents don’t have enough water to drink, bathe or wash clothes. People are working from home; malls have closed their bathrooms; and restaurants have shut their doors. The natural instinct is to blame the situation on climate change and, indeed, the last monsoon’s rains were especially weak. While that’s certainly played a role, however, Chennai’s is largely a man-made disaster – one that more Indian metropolises are soon to suffer no matter the weather. According to a study by the federal government think tank NITI Aayog, 21 Indian cities will run out of groundwater by next year, including the capital New Delhi and the information technology hub of Bengaluru. Two hundred thousand Indians already die every year because they don’t have a safe water supply, the report said. A shocking 600 million people face “high to extreme” water stress. That Chennai should have run dry first is instructive. Less than four years ago, the now drought-ridden city was inundated by devastating floods. Though located on a flood plain, the city had paved over the lakes and wetlands that might have helped the process of recharging the water table. As a result, heavy rains couldn’t percolate into aquifers under the city. Water pooled and surged aboveground. That reduced the resources available to deal with a crisis like this year’s. In theory, India receives enough rain every year to meet the needs of over a billion people. According to the country’s Central Water Commission, it requires at most 3,000 billion cubic meters of water annually and receives 4,000 billion cubic meters of rain. But too much water is wasted thanks to inefficiency and misuse. The situation is particularly dire in India’s northwest, irrigated by the great rivers that rise in the Himalayas. Indians are taught to revere the “green revolution” of the 1970s, when the northwest became India’s granary thanks to canals and tube wells that pumped out groundwater. That revolution, however, has turned out to be unsustainable. In 2011, 245 billion cubic meters of water were withdrawn for irrigation — a quarter of the total groundwater depletion globally that year.

Alaska Chokes on Wildfires as Heat Waves Dry Out the Arctic - Under the choking black smoke from the bog and forest fires in Siberia and Alaska, it can feel like the Earth itself is burning. The normally moist, black organic peat soil and lush forests have been drying, and when they catch fire, they burn relentlessly. Global warming has been thawing tundra and drying vast stretches of the far-northern boreal forests, and it also has spurred more thunderstorms with lightning, which triggered many of the fires burning in Alaska this year, said Brian Brettschneider, a climate scientist with the International Arctic Research Center who closely tracks Alaskan and Arctic extreme weather. So far this year, wildfires have scorched more than 1.2 million acres in Alaska, making it one of the state's three biggest fire years on record to this date, with high fire danger expected to persist in the weeks ahead. Several studies, as well as ongoing satellite monitoring, show that fires are spreading farther north into the Arctic, burning more intensely and starting earlier in the year, in line with what climate models have long suggested would happen as sea ice dwindles and ocean and air temperatures rise.  A region of Alaska about the size of California has been sizzling under an intense, record-length heat wave for weeks. And it isn't just the land that's warming: the northern coast is losing its sea ice about two months earlier than average and ocean surface temperatures are as much as 9 degrees Fahrenheit above normal in the Chukchi Sea. Across the state:

  • For the first time in the 95-year record, the year-long July-to-June average temperature for Alaska as a whole was above freezing, showing the persistence of much warmer than average temperatures over the state.
  • For the year to date, the Alaska statewide average temperature was 7.9°F above average, according to NOAA's latest National State of the Climate report.
  • During the last 67 years, Anchorage saw a total of 17 days with a temperature of 81°F or above. This year, 81 was the average temperature for a 12-day stretch in late June and early July, Brettschneider posted on Twitter.
  • On July 4, Anchorage hit 90°F, breaking the city's all-time record by 5 degrees.

In Anchorage this time of year, "our normal high is 66 (degrees Fahrenheit), and today, it's already 74 or 75 degrees at 10:30 in the morning," Brettschneider said via Skype on July 8. "We keep our doors and windows closed at night to keep the smoke out. This morning I got up and it was 80 degrees in the house," he said.

Smoke from Canadian wildfires prompts air quality alert in northern Minnesota - An air quality alert is in effect for the northern third of Minnesota through noon Sunday. The Minnesota Pollution Control Agency reported that smoke from wildfires in Manitoba and Ontario has drifted across northern Minnesota. "Air quality has rapidly deteriorated to unhealthy levels in many areas of northern Minnesota, reaching the Orange (unhealthy for sensitive groups) category," the MPCA reported in a news release. "Visibility has decreased to under 1-2 miles in many locations due to the dense smoke." The air quality alert includes Duluth, Bemidji, Red Lake, Leech Lake, International Falls, the Iron Range and the Boundary Waters. "The smoke is expected to move slowly southward over eastern Minnesota into Wisconsin today, tonight, and into tomorrow morning," the MPCA reported Saturday morning. "Air quality tomorrow morning will remain in the Orange category as a morning inversion further traps the smoke. Gradual relief is expected by tomorrow afternoon as northwest to west winds slowly move the smoke to the east out of most of Minnesota." Officials said the smoke may cause problems for people with asthma and other lung conditions, and said all people in northern Minnesota may want to take precautions and limit physical activity while the smoke is in the air.

Massive forest fire in Germany exposes deadly legacy of World War II -- More than one week after the outbreak of a massive forest fire in the north-eastern German state of Mecklenburg-Western Pomerania the danger is still not over. Munition remains and unexploded ordnance from World War II have severely hampered the fire fighting and made it almost impossible in large areas. The fire on a former military training base near Lübtheen has spread to 1,300 hectares (3,200 acres), making it the largest forest fire in the country's history. Clouds of smoke can still be seen from space, and the smell of burning was at times perceptible in Berlin. The cause of the fire is still unclear; there is talk of arson. But the unusually high temperatures and drought have also likely played a role. A disaster alert was proclaimed last week in the district of Ludwigslust-Parchim. Five villages were evacuated within minutes. Their inhabitants, almost a thousand people in all, had to move to the surrounding villages and the nearby town of Lübtheen. In many cases, they hardly had time to take the bare necessities. Most were able to return by Friday morning, but the village of Alt Jabel, which is closest to the forest fire, remains closed. Up to 3,000 members of the fire brigade, the THW disaster relief organization, the Federal Police and the Bundeswehr were on duty around the clock for five days. They fought the fire from the air with helicopters, and on the ground from a safe distance. First, they had to secure the villages and with the help of specialised clearance vehicles drive miles of tracks through the forest which had to be freed from munitions before the fire department could approach the flames. No one could approach the fire closer than 1,000 meters since there was an acute danger to life. The unexploded ordnance and ammunition in the forest floor could be ignited at any time by the fire’s heat and explode. According to the statement of the state Environment Minister Till Backhaus, trial excavations in this area found up to 45.5 tonnes of munition remains per hectare of forest.

'They Waited For Failure': Report Exposes PG&E's Inability To Replace Equipment That Sparked Deadly Wildfire - The now-bankrupt PG&E has put together a contingency plan that would plunge millions of unsuspecting Californians into rolling blackouts reminiscent of the early 2000s (when the utility was last pushed into bankruptcy protection thanks to the market-manipulation hijinx of Enron and other electricity brokers), but as WSJ revealed in an explosive report published Wednesday - a report that was probably the result of months of battles between the paper's lawyers and California's Freedom of Information Commission - PG&E's long history of deterring maintenance on its lines and towers, a practice that directly contributed to causing the deadliest forest fire in California history. The utility knew for years that hundreds of miles of high-voltage lines running in high-risk fire areas were at risk of failing and sparking a fire. And instead of acting swiftly to make the necessary upgrades, it appears the company routinely failed to identify the infrastructure most in need of maintenance.  Last year, a 100-year old line failed and sparked the Camp Fire, which eventually caused the deaths of 85 people. Documents obtained by WSJ - mostly internal emails and reports - revealed that the utility knew that 49 of the steel towers that carry the electrical line that failed needed to be replaced entirely.For years, PG&E, which operates one of the oldest long-distance electricity transmission systems in the world, much of it having been built in the early 1900s, was able to get away with neglecting its lines and towers. But that changed in 2013, when California entered a punishing and prolonged drought.  It dried out much of the state, exponentially amplifying the risk of wildfires. In a 2017 internal presentation, PG&E said it needed a plan to replace towers and better manage lines to prevent “structure failure resulting [in] conductor on ground causing fire." But inscrutably, the company opted instead to focus its efforts (and billions in capital) on upgrading substations, and instead labeled many of its transmission lines as low-risk projects.

PG&E Neglected Maintenance for Years Despite Known Fire Risk; Judge Demands Prompt and Clear Answers to WSJ Expose - Yves Smith -  Yesterday, the Wall Street Journal published a major story based on extensive Freedom of Information Act disclosures, providing evidence of PG&E’s systematic, willful neglect not just of maintenance but even of inspections of its transmission lines, despite knowing full well that their decrepit state constituted a serious fire risk. At least some officials appear to have labored under the misapprehension that making a point of not knowing about the condition of many of their assets would somehow absolve them of responsibility.The raw facts are appalling and led a judge tasked to monitor PG&E after past safety violations to demand answers, pronto. From a Wall Street Journal story mere hours after it broke its account about the PG&E’s willful negligence:  A federal judge on Wednesday ordered PG&E Corp. to respond, “on a paragraph-by-paragraph basis,” to a Wall Street Journal article that said the company has failed to upgrade hundreds of miles of high-voltage power lines despite knowing they could fail and spark wildfires.  William Alsup, a U.S. district court judge in Northern California, is overseeing PG&E’s probation after the company was convicted of safety-related violations following a natural-gas explosion that killed eight people in 2010. After an online version of the article was published Wednesday, he gave the company until July 31 to file a “fresh, forthright statement owning up to the true extent of the Wall Street Journal report” not to exceed 40 double-spaced pages.  “In the past, the offender has responded to some of the Court’s questions by filing thousands of records and leaving it to the judge to find the needles in the haystacks,” the judge wrote.  Now to the account that got Judge Alsup so riled up. From the Journal: The failure last year of a century-old transmission line that sparked a wildfire, killed 85 people and destroyed the town of Paradise wasn’t an aberration, the documents show. A year earlier, PG&E executives conceded to a state lawyer that the company needed to process many projects, all at once, to prevent system failures—a problem they said could be likened to a “pig in the python.” Even before November’s deadly fire, the documents show, the company knew that 49 of the steel towers that carry the electrical line that failed needed to be replaced entirely.  In a 2017 internal presentation, the large San Francisco-based utility estimated that its transmission towers were an average of 68 years old. Their mean life expectancy was 65 years. The oldest steel towers were 108 years old. Even as fire risks increased starting in 2013 due to sustained droughts, it kept putting off upgrading its oldest transmission lines. But at least as bad is that PG&E was grossly, one might even say deliberately, ignorant of the state of its network. How can you be in the business of operating a network and not have basic information about its historical and current condition?

Southern California on high earthquake alert, bringing anxiety and preparation - LA Times - The seismic one-two combo that hit Southern California last week left residents particularly unnerved because it robbed them of the single bit of solace that normally comes with a big quake: the sense that the worst is over. After the 6.4 magnitude quake hit near Ridgecrest on Thursday, many expected aftershocks that would gradually decrease in strength and frequency. They’d been through it before, in Northridge, Sylmar and Whittier. But when a much larger 7.1 magnitude temblor struck Friday night, the shock quickly gave way to a newfound dread: What’s next? Caltech seismologist Lucy Jones announced an 8% to 9% chance of an even bigger rupture coming within hours and days. Psyches spun out from Las Vegas to Long Beach, even as the risk was reduced to 3% by Saturday afternoon. The good news: Many decided it was finally time to get prepared. “It’s only a matter of time,” said Kim Caldwell, 55, who has lived in Southern California all her life and experienced numerous quakes. She said she and her husband has been lax about keeping their earthquake supplies stocked and up to date at their home in Santa Ana. But if the first temblor didn’t jolt her into action, the second one certainly did.  Seismologists are constantly fighting against earthquake amnesia, trying to get people — many who have never experienced a major quake, with the last devastating one occurring a quarter-century ago in Northridge — to grasp the severity and ultimate inevitability of the threat and get prepared.  Friday’s quake was the largest in Southern California since 1999. Although it hit the Ridgecrest area of the high desert hard, it didn’t cause any notable damage in the Los Angeles area.

The earthquakes in southern California were centered near a naval station contaminated with ‘forever chemicals’ -- The California city of Ridgecrest was rocked by a series of earthquakes last week that caused damage to buildings and residences. Beyond scientists' worrisome predictions that another earthquake might strike in the coming days, questions have arisen about risks associated with the Naval Air Weapons Station China Lake, a large military testing site outside the city.The station was evacuated and later closed amid reports that some of its structures were damaged by the earthquakes. On July 5, the station confirmed via Facebook that the epicenter was located on two faults on its property, which spans an area larger than Rhode Island. Potential damage or leaks at the site could be cause for concern, since the station's groundwater was found to contain elevated levelsof a class of harmful chemicals called per- and polyfluoroalkyl substances, or PFAS, earlier this year.It's unclear whether the earthquake could have affected the levels of PFAS in the local water. But the station encouraged essential personnel who have returned to the site to report "significant cracks, exposed electrical wiring, hazmat spills, water leaks, unusual smells, etc." and to "wear appropriate personal protective equipment" when cleaning their work area. PFAS have been linked to higher risks of cancer, liver damage, and developmental issues. The chemicals are good at resisting heat, grease, stains, and water. Though many have been phased out of manufacturing processes, they still lurk in drinking water and consumer goods such as food packaging, carpets, leather, textiles, and non-stick cookware.

Southern California earth is rumbling with one aftershock every minute - The earth hasn't stopped rumbling under Southern California since Thursday, when a powerful 6.4-magnitude earthquake rattled Ridgecrest and the surrounding area.The quake was followed by more than 1,400 aftershocks, according to scientists. On Friday, an even stronger quake -- with a magnitude of 7.1 --- rattled the region, leaving residents traumatized, Ridgecrest Mayor Peggy Breeden said Saturday morning."Many of them are sleeping outside tonight," Breeden said. "They're fearful to be in their homes. Many are choosing to just be with their neighbors ... in their sidewalks, in their driveways and some of them are in the streets."There's been an average of one aftershock per minute since Friday's quake in the southern part of the state, according to the United States Geological Survey website.More than 4,700 quakes have occurred since Thursday, said USGS geophysicist John Bellini."They are coming in every 30 seconds, every minute," he said. After Friday's 7.1 quake, three quakes of magnitude 5 or greater struck within the first hour, he said.After an earthquake as powerful as the one that hit Friday, residents can expect an aftershock reaching up to a magnitude of 6.0, officials said Saturday, and should even be prepared for a scarier shake.   "I would probably start taking some stuff off the walls if they're not already down," Ridgecrest Police Chief Jed McLaughlin said Saturday morning. "Make sure you're not sleeping under something that's still hung up."The chief warned residents to stay prepared and load up on supplies while stores are still open, "just in case that we have something bigger than we had today." He said residents should remain vigilant for the next two weeks.

 The Shaking Won't Stop- More Than 10,000 Quakes Strike California, Nevada In Last 7 Days - The ground is constantly shaking in southern California right now, and this has many concerned that another large earthquake may be coming.  I have been keeping my eye on Cal Tech’s recent earthquake map, and as I write this article it says that there have been 10,053 earthquakes in California and Nevada over the past 7 days.  I have never seen that number so high, and southern California is being hit by yet another new earthquake every few moments.  Most of the earthquakes are happening out in the Ridgecrest area where we witnessed the magnitude 6.4 earthquake that hit on July 4th and the magnitude 7.1 earthquake that hit on July 5th.  But as you can see from Cal Tech’s map, there has been a tremendous amount of seismic activity along the San Andreas fault as well.  As I discussed the other day, the San Andreas fault is “locked and loaded” and it is way overdue for “the Big One”.  And it isn’t just earthquakes that we need to be concerned about.  According to Fox News, “geologists are nervously eyeing eight nearby volcanoes”…California’s uncanny “earthquake pause” is over. It should have already had several “big ones” by now. All that pressure has to go somewhere. Now geologists are nervously eyeing eight nearby volcanoes. And why has Yellowstone supervolcano been acting so weird?The U.S. Geolo gical Survey (USGS) has warned Southern California to expect more big earthquakes to come. Some, they say, may even be more powerful than those experienced in the past few days.“(These quakes do) not make (the Big One) less likely,” local seismologist Lucy Jones told The Los Angeles Times. “There is about a one in 20 chance that this location will be having an even bigger earthquake in the next few days, that we have not yet seen the biggest earthquake of the sequence.”

Earth’s Ancient Life Forms Are Awakening After 40,000 Years in Permafrost --From about 1550 to 1850, a global cold snap called the Little Ice Age supersized glaciers throughout the Arctic. On Canada's Ellesmere Island, Teardrop Glacier extended its frozen tongue across the landscape and swallowed a small tuft of moss. Since 1850, the plant lay frozen under a 100-foot-thick slab of ice as humans discovered antibiotics, visited the moon and burned 2 trillion tons of fossil fuels.Thanks to this latest exploit, evolutionary biologist Catherine La Farge arrived centuries later at Teardrop's melting edge to find the tuft of the species Aulacomnium turgidum finally free from its icy entombment. The moss was faded and torn but sported a verdant hue - a possible sign of life.  She brought dozens of these curious samples back to Edmonton, lavishing them with nutrient-rich soils in a bright, warm laboratory. Almost a third of the samples burst forth with new shoots and leaves. "We were pretty blown away," La Farge said. The moss showed few ill effects of its multi-centennial deep-freeze. Climate change stories often highlight the teetering fragility of Earth's ecological system. But for a few exceptional species, thawing ice caps and permafrost are starting to reveal another narrative - one of astonishing biological resilience.  Researchers in a warming Arctic are discovering organisms, frozen and presumed dead for millennia, that can bear life anew. These ice age zombies range from simple bacteria to multicellular animals, and their endurance is prompting scientists to revise their understanding of what it means to survive.

PIOMAS July 2019 - Arctic Sea Ice by Neven - Another month has passed and so here is the updated Arctic sea ice volume graph as calculated by the Pan-Arctic Ice Ocean Modeling and Assimilation System (PIOMAS) at the Polar Science Center: This is getting serious. With a total drop of 7066 km3 for June 2019, this was only the second time - after 2012 - that the 7000 km3-mark had been breached. It was just enough to squeeze past 2017 and take the lead in the rankings, while leaving all other years - except for 2012 - in the dust. For instance, the difference with 2008 has grown to 5395 km3, which amounts to a decrease of 30% in just a little over 10 years. The difference with 2016 (member of the 'second lowest minimum' triumvirate, together with 2007 and 2011) went from 208 to 1384 km3. But 2012 is now hot on 2019's tail, only 248 km3 behind, while 2017 is still second with just 108 km3 more volume than 2019 (the difference was 2460 km3 in 2017's favour at the end of January). Here's how the differences with previous years have evolved from last month:  Wipneus' version of the PIOMAS graph clearly shows how 2019 (red line) and 2012 (purple line) have started to move away from the other trend lines: The anomaly trend line on the PIOMAS volume anomaly graph has continued to drop like a rock. It will be interesting to see if it can escape the grey bands of standard deviation: There's also a continuation on the PIJAMAS front. Remember, PIJAMAS is an (imperfect) average thickness measure where we divide the PIOMAS volume numbers with JAXA sea ice extent numbers. As I noted last month, when extent drops steadily, but volume goes down faster, average thickness will decrease faster as well. 2019 continued to drop steadily during June and is now lowest on most charts even, but PIOMAS says volume dropped even faster, and so average thickness shows a massive decrease, even exceeding 2012: And this is corroborated by the Polar Science Centre average thickness graph:  If you want to know what this means or how it came about, I can highly recommend reading last week's blog post: June 2019, one hell of a month The differences in thickness distribution with 2012 make everything doubly interesting. Those red zones are where the ice is thicker now than in 2012, according to PIOMAS, and they are bound to melt out. But the same can be said about the blue zones, where 2012 was thicker than it is now. Here's a visual representation of the differences with 2011 and 2012, that had the two lowest PIOMAS sea ice volume September minimums on record (hat-tip to Wippert):

A 40-y record reveals gradual Antarctic sea ice increases followed by decreases at rates far exceeding the rates seen in the Arctic PNAS Abstract: Following over 3 decades of gradual but uneven increases in sea ice coverage, the yearly average Antarctic sea ice extents reached a record high of 12.8 × 106 km2 in 2014, followed by a decline so precipitous that they reached their lowest value in the 40-y 1979–2018 satellite multichannel passive-microwave record, 10.7 × 106 km2, in 2017. In contrast, it took the Arctic sea ice cover a full 3 decades to register a loss that great in yearly average ice extents. Still, when considering the 40-y record as a whole, the Antarctic sea ice continues to have a positive overall trend in yearly average ice extents, although at 11,300 ± 5,300 km2⋅y−1, this trend is only 50% of the trend for 1979–2014, before the precipitous decline. Four of the 5 sectors into which the Antarctic sea ice cover is divided all also have 40-y positive trends that are well reduced from their 2014–2017 values. The one anomalous sector in this regard, the Bellingshausen/Amundsen Seas, has a 40-y negative trend, with the yearly average ice extents decreasing overall in the first 3 decades, reaching a minimum in 2007, and exhibiting an overall upward trend since 2007 (i.e., reflecting a reversal in the opposite direction from the other 4 sectors and the Antarctic sea ice cover as a whole).

Study Warns Melting of 'One of the World's Most Dangerous Glaciers' Could Cause 20-Inch Sea Level Rise - New NASA-funded research warns that because of human-caused global heating, West Antarctica's massive Thwaites Glacier is at risk of reaching a tipping point that could raise the global sea level by about 20 inches. The study, published Monday in the journal the Proceedings of the National Academy of Sciences, was conducted by researchers at the Georgia Institute of Technology, NASA Jet Propulsion Laboratory, and the University of Washington.Though this team focused on the Thwaites Glacier—which is about the size of Florida or Britain—the report follows several others that have raised alarm about how rapidly ice is disappearing in Antarctica, including one study from May which found that the continent's ice sheets are thinning five times faster than they were in the 1990s.In a statement Monday, Georgia Tech explained that researchers found "instability hidden within Antarctic ice is likely to accelerate its flow into the ocean and push sea level up at a more rapid pace than previously expected."In the last six years, five closely observed Antarctic glaciers have doubled their rate of ice loss, according to the National Science Foundation. At least one, Thwaites Glacier, modeled for the new study, may be in danger of succumbing to this instability, a volatile process that pushes ice into the ocean fast.The Thwaites Glacier is often called "one of the world's most dangerous glaciers" because of its potential contributions to sea level rise. As Common Dreams reported in January, NASA scientists recently discovered a 1,000-foot deep cavity in the glacier large enough to have held about 14 billion tons of ice before it melted, which heightened concerns about the glacier's future.Researchers behind the new study weren't able to project exactly how much ice the Thwaites Glacier will lose in the next 50 to 800 years, "due to unpredictable fluctuations in climate and the need for more data," but they factored the instability into 500 ice flow simulations for the glacier, which "together pointed to the eventual triggering of the instability," according to the Georgia Tech statement. "If you trigger this instability, you don't need to continue to force the ice sheet by cranking up temperatures. It will keep going by itself, and that's the worry,"

Antarctic Glacial Melt May Be Irreversible Causing Sea Rise, Research Says A glacier the size of Florida is melting much faster than expected and may soon trigger a 50cm, or 19.6 inches, rise in sea level, according to a new NASA-funded study published online by the Proceedings of the National Academy of Sciences.The study found that in the last six years, several closely observed Antarctic glaciers have doubled their rate of melting. Their rate of melting was five times faster than in the 1990s. The Thwaites Glacier, one of five recently studied unstable glaciers, which measures about 70,000 square miles is at risk of rapidly melting into the ocean, triggering an unstoppable rise in sea levels. The mathematical models the researchers created make the most catastrophic scenarios of rapid melting and fast rises in sea water levels seems much more likely than the best-case scenarios of a slow sea level rise. Just how much ice the glaciers will shed in the next 50 to 800 years is impossible to predict since the climate is constantly changing and more data is needed. And yet, the researchers at the Georgia Institute of Technology, NASA Jet Propulsion Laboratory, and the University of Washington factored the instability into 500 ice flow simulations for Thwaites with refined calculations, according to the scenarios showed a wide-range of possibilities, they consistently pointed to an irreversible instability in the glacier that would keep pushing the ice out to sea at an enormously accelerated rate over the coming centuries.A complete loss of the West Antarctic ice sheet would be expected to increase global sea levels by about five meters (16ft), which would submerge coastal cities around the world. In some models, the entire ice sheet could be lost within 150 years, even if global temperatures stopped rising, which they show no sign of doing, according to the Guardian.

'Completely Terrifying': Study Warns Carbon-Saturated Oceans Headed Toward Tipping Point That Could Unleash Mass Extinction Event - The continuous accumulation of carbon dioxide in the planet's oceans—which shows no sign of stopping due to humanity's relentless consumption of fossil fuels—is likely to trigger a chemical reaction in Earth's carbon cycle similar to those which happened just before mass extinction events, according to a new study.  MIT geophysics professor Daniel Rothman released new data on Monday showing that carbon levels today could be fast approaching a tipping point threshold that could trigger extreme ocean acidification similar to the kind that contributed to the Permian–Triassic mass extinction that occurred about 250 million years ago.  Rothman's new research comes two years after he predicted that a mass extinction event could take place at the end of this century. Since 2017, he has been working to understand how life on Earth might be wiped out due to increased carbon in the oceans.  Rothman created a model in which he simulated adding carbon dioxide to oceans, finding that when the gas was added to an already-stable marine environment, only temporary acidification occurred.  When he continuously pumped carbon into the oceans, however, as humans have been doing at greater and greater levels since the late 18th century, the ocean model eventually reached a threshold which triggered what MIT called "a cascade of chemical feedbacks," or "excitation," causing extreme acidification and worsening the warming effects of the originally-added carbon. Over the past 540 million years, these chemical feedbacks have occurred at various times, Rothman noted. But the most significant occurances took place around the time of four out of the five mass extinction events—and today's oceans are absorbing carbon far more quickly than they did before the Permian–Triassic extinction, in which 90 percent of life on Earth died out. The planet may now be "at the precipice of excitation," Rothman told MIT News.

Scientist Warns Breaching a 'Carbon Threshold' Could Lead to Mass Extinction Event - The continuous accumulation of carbon dioxide in the planet's oceans — which shows no sign of stopping due to humanity's relentless consumption of fossil fuels — is likely to trigger a chemical reaction in Earth's carbon cycle similar to those which happened just before mass extinction events, according to a new study.MIT geophysics Prof. Daniel Rothman released new data on Monday showing that carbon levels today could be fast approaching a tipping point threshold that could trigger extreme ocean acidification similar to the kind that contributed to the Permian–Triassic mass extinction that occurred about 250 million years ago.​Rothman's new research comes two years after he predicted that a mass extinction event could take place at the end of this century. Since 2017, he has been working to understand how life on Earth might be wiped out due to increased carbon in the oceans.Rothman created a model in which he simulated adding carbon dioxide to oceans, finding that when the gas was added to an already-stable marine environment, only temporary acidification occurred. When he continuously pumped carbon into the oceans, however, as humans have been doing at greater and greater levels since the late 18th century, the ocean model eventually reached a threshold which triggered what MIT called "a cascade of chemical feedbacks," or "excitation," causing extreme acidification and worsening the warming effects of the originally-added carbon.Over the past 540 million years, these chemical feedbacks have occurred at various times, Rothman noted.But the most significant occurrences took place around the time of four out of the five mass extinction events — and today's oceans are absorbing carbon far more quickly than they did before the Permian–Triassic extinction, in which 90 percent of life on Earth died out. The planet may now be "at the precipice of excitation," Rothman told MIT News.

 One climate crisis disaster happening every week, UN warns - Climate crisis disasters are happening at the rate of one a week, though most draw little international attention and work is urgently needed to prepare developing countries for the profound impacts, the UN has warned.Catastrophes such as cyclones Idai and Kenneth in Mozambique and thedrought afflicting India make headlines around the world. But large numbers of “lower impact events” that are causing death, displacement and suffering are occurring much faster than predicted, said Mami Mizutori, the UN secretary-general’s special representative on disaster risk reduction. “This is not about the future, this is about today.”This means that adapting to the climate crisis could no longer be seen as a long-term problem, but one that needed investment now, she said. “People need to talk more about adaptation and resilience.”Estimates put the cost of climate-related disasters at $520bn a year, while the additional cost of building infrastructure that is resistant to the effects of global heating is only about 3%, or $2.7tn in total over the next 20 years. Mizutori said: “This is not a lot of money [in the context of infrastructure spending], but investors have not been doing enough. Resilience needs to become a commodity that people will pay for.” That would mean normalising the standards for new infrastructure, such as housing, road and rail networks, factories, power and water supply networks, so that they were less vulnerable to the effects of floods, droughts, storms and extreme weather.  “We talk about a climate emergency and a climate crisis, but if we cannot confront this [issue of adapting to the effects] we will not survive,” Mizutori told the Guardian. “We need to look at the risks of not investing in resilience.”

It’s the End of the World as They Know It -- On election night 2016, Kim Cobb, a professor at the School of Earth and Atmospheric Sciences at Georgia Tech, was on Christmas Island, the world’s largest ring-shaped coral reef atoll, about 1,300 miles south of Hawaii. A climate scientist, she was collecting coral skeletons to produce estimates of past ocean temperatures. She had been taking these sorts of research trips for two decades, and over recent years she had witnessed about 85 percent of the island’s reef system perish due to rising ocean temperatures. “I was diving with tears in my eyes,” she recalls. In a row house made of cinder blocks on the tiny island in the middle of the Pacific Ocean, she monitored the American election results. When she saw Donald Trump’s victory, she felt shock and soon descended into severe depression. “I had the firm belief that Washington would act on climate change and would be acting soon,” the 44-year-old Cobb says. “When Trump was elected, it came crashing down.” Back home in Atlanta, Cobb entered what she now calls “an acute mental health crisis.” Most mornings, she could not get out of bed, despite having four children to tend to. She would sob spontaneously. She obsessed about the notion that the US government would take no action to address climate change and confront its consequences. “I could not see a way forward,” she recalls. “My most resounding thought was, how could my country do this? Her depression persisted for weeks. “I didn’t recognize myself,” she says. It’s hardly surprising that researchers who spend their lives exploring the dire effects of climate change might experience emotional consequences from their work. Yet, increasingly, Cobb, Shukla, and others in the field have begun publicly discussing the psychological impact of contending with data pointing to a looming catastrophe, dealing with denialism and attacks on science, and observing government inaction in the face of climate change. “Scientists are talking about an intense mix of emotions right now,”  “There’s deep grief and anxiety for what’s being lost, followed by rage at continued political inaction, and finally hope that we can indeed solve this challenge. There are definitely tears and trembling voices. They know this deep truth: They are on the front lines of contending with the fear, anger, and perhaps even panic the rest of us will have to deal with.”

 World’s Biggest CO2 Polluters Failing to Meet Climate Goals - The world's biggest emitters of greenhouse gases are far short of meeting their climate goals, new research says. The research paints a bleak picture, no matter how you look at it. Only one in eight of the world's most-polluting companies are on track to meet their climate goals under the Paris agreement, as Reuters reported. The researchers found that only 20 of the 160 most-polluting companies have made strides to reduce their emissions to a level necessary to keep global temperature from rising 2 degrees Celsius above pre-industrial levels. Another part of the research looked into 274 of the world's highest emitting publicly listed companies and found that almost half of the world's largest companies do not even consider future risks from the global climate crisis in their operational decision-making. Almost 25 percent of the publicly listed companies that are the world's biggest-polluters do not report their greenhouse gas emissions despite regulators and central banks in many countries asking for greater disclosure of climate risks, according to The Guardian. Researchers at the Grantham Institute on Climate Change and the Environment at the London School of Economics carried out the study, which was funded by the Transition Pathway Initiative, a group of investors who manage about $14 trillion and are supportive of the Paris agreement. The researchers analyzed the financial disclosures of companies in key sectors including oil and gas, steel and aluminum, utilities, car manufacturing and air transport, according to The Guardian. The firms examined in the study account for more than 40 percent of emissions from public companies around the world. The findings highlight the distance between the private sector's handling of the climate crisis and the transformation that scientists say is needed to stop the climate crisis from wrecking the planet, according toReuters.

we’re not fixing climate change - This is one of those things where I feel like everybody quietly knows it but we have this sort of tacit agreement not to say it openly in order to preserve some sort of illusion about what our society is and who we are. But, I mean, come on – we’re not fixing climate change. Nobody thinks we are, not really. Everyone’s putting on a brave face, everyone’s maintaining the pretense on behalf of the kids of whatever. But come on. Let us be adults here. We are not, as a species, going to do the things necessary to arrest or meaningfully slow the heating of the planet and thus will be exposed to all of the ruinous consequences of failing to do so. Look, here’s what fighting climate change entails.

  1. Observing slow and gradual change; apprehending the severity of a problem when there is no one clear crisis point or moment of no return.
  2. Thinking long term; prioritizing conditions in the future above conditions in the present.
  3. Being selfless; sacrificing our own personal needs and desires to secure the needs of others.
  4. Acting strategically; working in a coordinated way towards a complex goal even when the connection between those means and goals seems remote.
  5. Behaving parsimoniously; using less, consuming less, not acting as though the we are entitled to have more tomorrow than we had yesterday.

I could go on. And all of this requires cooperation across social, political, and national borders of a kind that as not existed at anything like this scale in the history of the world. Does that all sound likely to you?

7,000 Colleges and Universities Declare Climate Emergency, With a Plan to Fight It - More than 7,000 colleges and universities across the globe declared a climate emergency on Wednesday and unveiled a three-point plan to collectively commit to addressing the crisis. The declaration came in a letter — which other education institutions are encouraged to sign — that was organized by the Environmental Association for Universities and Colleges (EAUC), U.S.-based higher education climate action organization Second Nature, and UN Environment Program's (UNEP) Youth and Education Alliance.The letter, according to a statement from organizers, "marks the first time further and higher education establishments have come together to make a collective commitment to address the climate emergency," and outlines the three-point plan:

  1. Committing to going carbon neutral by 2030 or 2050 at the very latest;
  2. Mobilizing more resources for action-oriented climate change research and skills creation; and
  3. Increasing the delivery of environmental and sustainability education across curricula, campus, and community outreach programs.
"The young minds that are shaped by our institutions must be equipped with the knowledge, skills, and capability to respond to the ever-growing challenges of climate change," the letter says. "We all need to work together to nurture a habitable planet for future generations and to play our part in building a greener and cleaner future for all."The letter, which calls on other institutions and governments to declare a climate emergency and pursue urgent action to combat it, was presented at a Wednesday event hosted by the Higher Education Sustainability Initiative — a partnership of various United Nations agencies — at UN headquarters in New York City. "The expectation is that over 10,000 institutions of higher and further education will come on board before the end of 2019, with governments invited to support their leadership with incentives to take action," said the organizers' statement. So far, the letter has been signed by 25 networks that represent approximately 7,050 institutions and 59 individual institutions that, combined, have about 652,000 students.

 Elizabeth Warren reintroduces legislation requiring corporations to disclose climate risk - Presidential candidate Sen. Elizabeth Warren on Wednesday reintroduced legislation that would force companies to disclose their exposure to climate-related risks. Warren’s Climate Risk Disclosure Act, originally announced last year, would require every public company to disclose to the Securities and Exchange Commission information about climate risks to business, such as greenhouse gas emissions. The measure requires fossil fuel companies to release even more detailed reports and pushes firms to switch more quickly to cleaner and more efficient energy sources. The announcement comes amid growing investor concerns that assets are priced insecurely because of certain climate risks that are not being factored in. More than 200 of the world’s largest firms predict that climate change could cost them a combined total of nearly $1 trillion, according to a June report. “My plan will push more investors to move their money out of the fossil fuel industry, accelerating the transition to clean energy,” the Massachusetts senator wrote. “It will also demonstrate to investors that — if nothing else — climate change represents a serious risk to their money and they need to demand global action to address it.” Climate change has become a big topic among 2020 Democratic presidential contenders and voters. This week, Sen. Bernie Sanders of Vermont introduced a resolution declaring climate change a national emergency and calling for “massive” federal government action to reverse it. Other candidates have announced proposals steering trillions into the economy to combat climate change. Warren’s legislation is cosponsored by several Democratic presidential candidates, including Sen. Kirsten Gillibrand of New York, Sen. Amy Klobuchar of Minnesota and Sen. Kamala Harris of California. Rep. Alexandria Ocasio-Cortez of New York is among sponsors in the House. The measure, however, will likely draw strong Republican opposition. With Republicans controlling the Senate, it is unlikely to come to a vote. Even if Democrats win a Senate majority in 2020, it would be difficult for ambitious climate legislation to gain enough GOP support to meet a 60-vote minimum.

As Activists Push Democratic Climate Debate, DNC Donors Profit from Oil, Gas - The Real News Network (video) After weeks of pressure from climate activists, the Democratic National Committee isofficially considering a pair of resolutions on whether to host a debate focused exclusively on climate change, reversing the earlier position of DNC Chair Tom Perez.This comes after the first two Democratic Party presidential debates in Miami, in which only 15 minutes worth of discussion about the climate crisis ensued within the four hours of debate, both times not until the second hour of the debate. This occurred despite 63-percent of Democrats saying in a recent poll that it is “very important” for them to hear candidate’s policy stances on the climate crisis at debates, the highest percentage of any policy category.Lack of a scheduled climate-specific debate moved activists with the Sunrise Movement to gather outside of the DNC’s headquarters in Washington, D.C. before and during the first round of debates in Miami and demand a climate debate. In response, the DNC locked the door on Sunrise, leaving them outside. Their protest turned into a sit-in with activists camping out for the next two nights. Sunrise Communications Director Stephen O’Hanlon told The Real News that he believed how Democrats treated Sunrise would be different if they were a group of fossil fuel industry lobbyists.“We asked to go up and have a meeting with members of the DNC, and they refused. They locked the doors on us,” O’Hanlon said. “You can bet when the oil and gas lobbyists come here they don’t have the doors locked on them.”In fact, one fossil fuel industry-connected adviser, Ernest Moniz, is connected to one Democratic candidate currently leading in the polls. He is former Vice President Joe Biden’s climate adviser and served as U.S. Secretary of Energy under President Barack Obama. Moniz’s connections to the fossil fuel industry and to high-level Democratic donors with ties to the oil and gas sector show that, despite a push by activists for a Democratic climate debate and for candidates to reject fossil fuel money, the industry still carries significant clout within the party’s highest level.

Sanders and Ocasio-Cortez move to declare climate crisis official emergency  - A group of US lawmakers including the 2020 Democratic presidential contenderBernie Sanders are proposing to declare the climate crisis an official emergency – a significant recognition of the threat taken after considerable pressure from environment groups.  Alexandria Ocasio-Cortez, the Democratic congresswoman from New York, and Earl Blumenauer, a Democratic congressman from Oregon, plan to introduce the same resolution in the House on Tuesday, their offices confirmed.  A Sanders spokesperson said: “President Trump has routinely declared phoney national emergencies to advance his deeply unpopular agenda, like selling Saudi Arabia bombs that Congress had blocked.“On the existential threat of climate change, Trump insists on calling it a hoax. Senator Sanders is proud to partner with his House colleagues to challenge this absurdity and have Congress declare what we all know: we are facing a climate emergency that requires a massive and immediate federal mobilization.” Climate activists have been calling for the declaration, as data shows nations are not on track to limit the dangerous heating of the planet significantly enough. The UN has warned the world is experiencing one climate disaster every week. A new analysis from the economic firm Rhodium Group today finds the US might achieve less than half of the percentage of pollution reductions it promised other countries in an international agreement.

The wrong kind of trees: Ireland's afforestation meets resistance - Ireland is ramping up its response to the climate crisis by planting forests – lots of forests. East, west, north, south, the plan is to plant forests, the more the better. With enough trees, goes the hope, Ireland can compensate for many of the cows, vehicles and fossil-burning power plants that make it one of Europe’s worst climate offenders. From having just 1% forest cover in 1900, Ireland now has 11%, covering 770,000 hectares. It has just committed to planting 8,000 more hectares each year to reach 18% coverage. Research published last week said planting billions of trees across the world was the biggest and cheapest way to tackle the climate crisis. But some in Ireland have a problem with the great green vision. They say Ireland is planting the wrong sort of forests – dark, dank abominations that kill wildlife, block sunlight and isolate communities. “It’s like a wall around you, dead, darkness. It’s suffocating. We’re losing the landscape,” said Edwina Guckian, a member of Save Leitrim, a group that is resisting plantations. “You couldn’t live in the middle of this thing unless you were Grizzly Adams,” said Jim McCaffrey, another member, crouching in a gloomy, tangled copse. “It’s absolute misfortune when you see the plantations coming.”

Trump intervention delaying EPA biofuel waiver action, sources say – Reuters (Reuters) - U.S. President Donald Trump’s request for a review of the administration’s expanded use of biofuel waivers for oil refiners is holding up its decisions on 2018 applications, according to three sources familiar with the matter, two of whom said Trump may soon host a meeting on the issue. FILE PHOTO: A sign advertising E15, a gasoline with 15 percent of ethanol, is seen at a gas station in Clive, Iowa, United States, May 17, 2015. REUTERS/Jim Young Trump had ordered (here) members of his Cabinet to review the controversial waiver program, which exempts small refiners in financial turmoil from their obligation to blend ethanol into gasoline, last month after hearing from farmers angry about the issue during his recent Midwest tour. Since Trump took office, the Environmental Protection Agency has more than quadrupled the number of waivers it has granted to refiners, saving the oil industry hundreds of millions of dollars, but enraging another key constituency - corn growers - who claim the move threatens ethanol demand. Since Trump’s request for a review, the EPA has been scrambling to come up with a solution to move forward with 40 pending applications for the waivers, called Small Refinery Exemptions or SREs, covering 2018. “The SRE decision is being held up because the President wants to have this conversation,” one of the sources familiar with the issue said. Two sources said the White House could host a meeting next week on the issue that would include Trump, Agriculture Secretary Sonny Perdue, EPA Administrator Andrew Wheeler, and senators from both oil and farm states. There was no final decision yet on whether a meeting would be held, or when, they said. 

 France to slap new 'ecotax' on plane tickets from 2020 - The “ecotax” costing between 1.50 euros ($1.7) and 18 euros ($20) will apply to most flights departing in France, Elisabeth Borne said. The only exceptions will be for domestic flights to Corsica and France’s overseas territories, and connecting flights that pass through France. It will not apply to flights arriving in France. Industry group IATA, which favors a system that allows airlines to offset their emissions by paying for carbon reduction efforts elsewhere, called the French ticket charge “misguided.” “National taxes will do nothing to assist the aviation industry in its sustainability efforts,” IATA spokesman Anthony Concil said, warning that instead of helping airlines invest in cleaner fuels and technology it could end up harming the French aviation industry and jeopardize jobs. But the move received a cautious welcome from environmental campaigners, who argue that the airline industry needs to curb its greenhouse gas emissions as part of wider efforts to combat climate change. “This alone won’t do much, but it’s at least a recognition by the French government that more is required,” said Andrew Murphy, an air travel expert at Brussels-based group Transport and Environment. According to Borne, domestic and European flights will be taxed at 1.50 euros for economy tickets and 9 euros ($10) for business class, rising to 18 euros for business flights outside the EU. By comparison, Britain’s air passenger duty for standard passenger planes starts at 13 pounds ($16.20), rising to a maximum of 172 pounds ($214.20), and generates more than 3 billion pounds in Treasury revenue every year. The French tax is expected to raise over 180 million euros ($200 million) from 2020 to invest in eco-friendly transport infrastructure, including rail. It comes on top of a similar ticket charge introduced over a decade ago by former French President Jacques Chirac, the proceeds of which go toward medical aid for poor countries.

Mining and Electric Vehicles: Lithium, Nickel, Cobalt -  Among the many unanswered questions about electric vehicles (EVs) is whether we have enough of the necessary minerals — lithium, cobalt, nickel — to manufacture their batteries. (The vast majority of these factories are not in the United States[1]) Can we — I suppose as a species instead of a polity — keep all these factories running? For how long?    I’m not disposed to take reporting on mineral reserves on faith, and most of the sources I read seemed to be talking their book.   I had hoped to begin from the material characteristics of lithium, nickel, and gold, from which the mining technique would follow, and combine that with the location of deposits to come to some sort of rough estimate of supply, and of the risks involved. For example, lithium (Li) is so reactive that it never occurs freely in nature. It dissolves in brine, so one approach is to look for subsurface brines under dry lake beds, pump the brine into evaporation ponds, and when the brine is sufficiently concentrated, extract the lithium and then pump the result back under the lake bed. This is the approach used for the world’s largest lithium deposits, in the “Lithium Triangle” (Argentina, Chile and Bolivia). By the Monroe Doctrine, we should be controlling that piece on the board, but Germany and China seem to be doing the investing. So, that looks a lot like fracking re-injection to me, an environmental risk, and there’s geo-political risk as well.Cobalt (Co), like lithium and nickel, is only found in chemically combined form, as a metallic-lustered ore, most often as a by-product of copper and nickel mining in the Congo, where there are also seams of cobalt close to the surface. As a result, there are “artisanal miners” — what a phrase — who scour the mine tailings for shiny cobalt, or dig informal shafts. Here there are political risks, the Congo being what it is, and public relations risks, since artisanal miners are often children, and who wants a supply chain (that’s undeniably) tainted by child labor? Nickel (Ni) is mined worldwide (Indonesia, the Philippines, Russia, New Caledonia, Australia, and Canada, among others. “Nickel mining occurs through extractive metallurgy, which is a material science that covers various types of ore, the washing process, concentration and separation, chemical processes and the extraction process.” So we don’t have artisanal nickel mining, and the environmental effects are no more than normally bad for “extractive metallurgy”, which is awful. Given the countries where it’s mined, the political risks seem minimal[2].

U.S. utility-scale battery storage power capacity to grow substantially by 2023 - Utility-scale battery storage units (units of one megawatt (MW) or greater power capacity) are a newer electric power resource, and their use has been growing in recent years. Operating utility-scale battery storage power capacity has more than quadrupled from the end of 2014 (214 MW) through March 2019 (899 MW). Assuming currently planned additions are completed and no current operating capacity is retired, utility-scale battery storage power capacity could exceed 2,500 MW by 2023.EIA's Annual Electric Generator Report (Form EIA-860) collects data on the status of existing utility-scale battery storage units in the United States, along with proposed utility-scale battery storage projects scheduled for initial commercial operation within the next five years. The monthly version of this survey, the Preliminary Monthly Electric Generator Inventory (Form EIA-860M), collects the updated status of any projects scheduled to come online within the next 12 months.Growth in utility-scale battery installations is the result of supportive state-level energy storage policies and the Federal Energy Regulatory Commission’s Order 841 that directs power system operators to allow utility-scale battery systems to engage in their wholesale energy, capacity, and ancillary services markets. In addition, pairing utility-scale battery storage with intermittent renewable resources, such as wind and solar, has become increasingly competitive compared with traditional generation options. The two largest operating utility-scale battery storage sites in the United States as of March 2019 provide 40 MW of power capacity each: the Golden Valley Electric Association’s battery energy storage system in Alaska and the Vista Energy storage system in California. In the United States, 16 operating battery storage sites have an installed power capacity of 20 MW or greater. Of the 899 MW of installed operating battery storage reported by states as of March 2019, California, Illinois, and Texas account for a little less than half of that storage capacity.

Conservative Indiana Chooses Renewables Over Gas As It Retires Coal Early - Los Angeles just announced the largest and cheapest solar+storage project in the world, but that’s the golden land of dreamers and subsidies. About 1,800 miles to the right, conservative Indiana—with no renewable-portfolio standard—is making similar choices. Renewables are so cheap, said Mike Hooper, the senior vice president of the Northern Indiana Service Company (NIPSCO), that the utility can close its coal plants early and return $4 billion to its customers over the next 30 years. “It ends up being a really big number, somewhere in the neighborhood of $4 billion for our customers, and clearly a lot of that comes from the fact that there’s hundreds of millions of dollars in fuel every year from a marginal standpoint that you’re not spending, that the customer gets the advantage of through the check they write us every month.” NIPSCO, which delivers power to the northern third of Indiana, issued a request for proposals in 2018 to transform its energy system away from coal. The company had issued a similar RFP in 2016, but the results it got this time were markedly different. “We kind of made an assumption that as the results came back it would be very much similar to 2016, particularly where we sit in the world, that natural-gas generation would be the most cost-effective option,” Hooper said. “And as we ran this RFP and got our results back, we were surprised to see that wind—especially early wind in service in 2020 and 2021—and then solar, on a levelized-cost-of-energy-basis, were significantly less expensive than new gas-fired generation.”

Ohio agency staffers recommend denial of Seneca Wind project | Toledo Blade - Although a final decision has yet to be made on sPower’s proposed Seneca Wind project, Ohio Power Siting Board staffers recommended Wednesday that the agency’s board of directors reject it.The proposed wind farm would consist of up to 77 of the tallest commercial-scale wind turbines in this part of the country. The company, based in Utah, wants to install the machines in Seneca County’s Scipio, Reed, Venice, Eden, and Bloom townships east of Tiffin.In its report, the state agency’s staff recommends denial until the Federal Aviation Administration and the Ohio Department of Transportation’s Office of Aviation are able to complete their analysis of potential impacts to air navigation. The staff also recommended 50 conditions to meet should the board choose to let the project proceed now, anyway.The report can be viewed online at No board action is expected until after a previously scheduled hearing for the general public is held in the project area, followed by an adjudicatory hearing in Columbus. Makeup dates have not been determined.The Seneca Anti-Wind Union, a citizens group fighting the project, said it would “take a lot of explaining” if OPSB board members do not follow the staff’s recommendation for denial. The company on Tuesday filed a motion seeking a delay of the staff report, claiming it would make more sense for all parties to see the FAA’s analysis of the project first. That request was denied, and the report was issued on Wednesday as previously scheduled.

Public hearing scheduled for Seneca Wind project — Residents finally have their chance to express their views about sPower’s Seneca Wind before the state agency that controls the proposed wind farm’s fate. The Ohio Power Siting Board’s public hearing, rescheduled following a delay in the spring, is now set for 3 p.m. to 8 p.m. on July 23 at Tiffin University’s Marion Center, 235 Miami St., Tiffin. It is to be followed by a formal adjudicatory hearing for lawyers at 10 a.m. on Aug. 26 at the Public Utilities Commission of Ohio headquarters, 180 E. Broad St., Columbus, after which the OPSB could render its decision. Utah-based sPower wants to build the wind farm on 56,900 acres of leased private land in Seneca County’s Scipio, Reed, Venice, Eden, and Bloom townships. With an ability to generate up to 212 megawatts of power, the project would become one of Ohio’s largest wind farms. Plans call for 77 of the nation’s tallest wind turbines to be erected. The company was dealt a setback last week when the OPSB’s staff announced it was recommending denial, pending the outcome of an analysis of potential impacts to air navigation by the Federal Aviation Administration and the Ohio Department of Transportation’s Office of Aviation. The developer told The Blade after the announcement it is compiling evidence that it believes will win back the OPSB staff’s support, and convince it to reverse its decision.

Russia's Putin says wind power harmful to birds and worms - (Reuters) - Russian President Vladimir Putin questioned on Tuesday the use of wind power, saying wind turbines were harmful to birds and worms. Russia, a world-leading producer of fossil fuel, is lagging other countries in its development of renewable energy sources, such as solar and wind-powered energy. Wind power is rarely used in the country to generate electricity. Enel Russia (ENRU.MM) pledged 90 million euros to build a power generation facility by 2024 with a capacity of 71 megawatts. “Wind-powered generation is good, but are birds being taken into account in this case? How many birds are dying?” Putin said at a televised conference on industry in the Russian city of Yekaterinburg. “They (wind turbines) shake, causing worms to come out of the soil. This is not a joke,” he said. Putin added that people would not like to live on a planet dotted with “rows of wind-powered generators and covered by several layers of solar panels”.

Chinese Air Pollution Dimmed Sunlight Enough To Impact Solar Panels -  According to new research, China’s coal-driven air pollution is significantly reducing the output of solar panels by dimming the Sun.China is easily number one in terms of new solar construction right now, accounting for over half of the world’s installs in 2017, for example. Between 2010 and 2017, China went from having less than 1 gigawatt of solar capacity to 130 gigawatts, and the country is headed for around 400 gigawatts by 2030. After a run of transformative economic growth powered by coal and other fossil fuels, China is dealing with choking air pollution that is a major driving factor in this solar push. Recent research has compiled a record of solar radiation measurements around China going back to the late 1950s. The research shows a declining trend in solar radiation until about 2005, when it leveled off and began to tick back upward. That tracks the increasing particulate air pollution due to coal-burning power plants and manufacturing—as well as biomass burning—that has only recently been addressed. The researchers found that, over the entire record between about 1960 and 2015, the average potential solar generation declined by about 13%. Expressed in terms of capacity factor—the fraction of a solar panel’s maximum output that is actually produced on average—the drop from the start to the lowest point in 2008 was 0.162 to 0.142.

China has slashed clean energy funding by 39%, leading a global decline - Worldwide funding of clean-energy projects fell to its lowest level in six years, in a staggering blow to the battle against climate change. BloombergNEF found that global investments in solar, wind, and other clean energy sources added up to $117.6 billion during the first half of 2019, a 14% decline from the same period last year and the lowest six-month figure since 2013.China saw a 39% drop in investments, as the nation eases up on its aggressive solar subsidies to get costs under control. But spending also declined 6% in the US and 4% in Europe, part because of policies that are being phased out and weak demand for additional energy generation in mature markets. The new report suggests last year’s slowdown in renewable-energy construction has extended into 2019, taking the world in exactly the wrong direction at a critical time (see “Global renewables growth has stalled—and that’s terrible news”). Every major report finds that the world needs to radically accelerate the shift to clean energy to have any hope of not blowing past dangerous warming thresholds (see “At this rate, it’s going to take 400 years to transform the energy system”).BNEF found that private investments into clean energy companies also declined, ticking down 2% to $4.7 billion, limiting the pipeline of the innovative new companies needed to solve remaining challenges in the climate puzzle. Preventing the spending dip from solidifying into a sustained trend will almost certainly require more aggressive government policies, both pushing clean energy development and providing incentives to increase private investment.

Board approves air pollution permit for wood pellet plant (AP) — Mississippi environmental regulators have approved an air pollution permit for what could be the largest wood pellet plant in the world, despite objections from environmental groups that the plant would emit too much pollution and have other harmful effects. The state Environmental Quality Permit Board voted unanimously to issue a permit Tuesday for Enviva Partners LP’s $140 million plant in Lucedale. The company also plans a $60 million ship-loading facility in Pascagoula. The two plants are supposed to have 120 direct employees, with as many as 300 loggers and truckers also finding work supplying Enviva. The Bethesda, Maryland, company plans to export the pellets to European and Asian utilities, which burn them the generate electricity in place of coal, seeking to reduce emissions of climate-changing carbon dioxide. Opponents, though, raised questions about the pollutants and dust the plant would release, as well as its effect on forests. They also questioned whether burning wood pellets instead of coal actually reduces greenhouse gases. “The Enviva Lucedale wood pellet plant will have a disastrous effect on the people, wildlife, and climate of Mississippi and it is therefore time for the MDEQ board to listen to the people of Mississippi not just rich, powerful industries,” a group of opponents said in a joint statement. State and local officials have pledged what could be $17 million in aid and tax breaks over the next 10 years, touting the effect on a forestry industry that has been depressed since paper mills in the region closed. Opponents put an unusual amount of effort into fighting the plant, with the nonprofit Environmental Integrity Project filing a detailed challenge of the permit that included a model showing emissions would exceed the state’s standards for toxic air pollutants. “Air quality modeling shows that even with the revised permit, air pollution from the plant will be in violation of federal ambient air quality standards,” opponents said their statement.

Air Conditioning Is the World’s Next Big Threat - The vast majority of Americans have air conditioning but in Germany almost nobody does. At least not yet. 1 So when temperatures in Berlin rose to an uncomfortable 37 Celsius (99 Fahrenheit) this week – a record for the month of June – I was uncommonly delighted to go to the Bloomberg office, where it’s artificially and blissfully cool.By letting people in overheated climates concentrate on their work and get a good night’s sleep, air conditioning has played a big part in driving global prosperity and happiness over the past few decades – and that revolution has still barely begun. About half of Chinese households have this modern tool, but of the 1.6 billion people living in India and Indonesia, only 88 million have access to air conditioning at home, Bloomberg New Energy Finance noted in a recent report.For many, relief is in sight. Because of the combination of population growth, rising incomes, falling equipment prices and urbanization, the number of air-conditioning units installed globally is set to jump from about 1.6 billion today to 5.6 billion by the middle of the century, according to the International Energy Agency.There’s just one glaring problem: What will all this extra demand for electricity do to the climate? Carbon dioxide emissions rose another 2% in 2018, the fastest pace in seven years. That increase was alarming in its own right, given what we know about the unfolding climate emergency. But the proximate cause was especially troubling: Extreme weather led to more demand for air conditioning and heating in 2018, BP Plc explained in its annual review of energy sector. It’s not too hard to imagine a vicious cycle in which more hot weather begets ever more demand for air conditioning and thus even more need for power. That in turn means more emissions and even hotter temperatures. 2 That feedback loop exists at a local level too. Air-conditioning units funnel heat outside, exacerbating the so-called “urban heat island” effect, which makes cities warmer than the countryside. BNEF expects electricity demand from residential and commercial air conditioning to increase by more than 140% by 2050 – an increase that’s comparable to adding the European Union’s entire electricity consumption. Air conditioning will represent 12.7% of electricity demand by the middle of the century, compared to almost 9% now, it thinks.

Booming LNG industry could be as bad for climate as coal, experts warn - The booming liquefied natural gas (LNG) industry will play at least as big a role as new coal investments in bringing on a climate crisis if all planned projects go ahead, US-based energy analysts and campaigners say.The report by the Global Energy Monitor appears at odds with comments by Australia’s emissions reduction minister, Angus Taylor, who has said the country could be proud that the rapidly expanding LNG export industry was displacing coal power overseas.Government analysis identified LNG as the main reason Australia’s greenhouse gas emissions have risen each year since 2015, but the minister and industrysay Australian gas deserves credit for lowering global emissions. The Global Energy Monitor, formerly known as CoalSwarm, is a US-based research and advocacy group that tracks fossil fuel development. It found there were US$1.3tn in planned LNG investments across the globe, including nearly $38bn in Australia, putting it fourth on a list behind the US, Canada and Russia. Ted Nace, the group’s executive director, said the proposed tripling of global LNG capacity risked introducing decades of emissions of methane, a potent and difficult-to-monitor greenhouse gas, at odds with the Paris climate agreement. The Intergovernmental Panel on Climate Change last year estimated methane emissions would need to be reduced by 35% between 2010 and 2050 to meet the Paris goals. A separate study in the journal Nature found existing fossil fuel infrastructure alone, including coal and gas-fired power stations, would almost certainly be enough to push the world beyond 1.5C global heating if not shut down earlier than planned. Australia’s LNG industry has already more than tripled since 2012 as developments have come online in Western Australia, Queensland and the Northern Territory. A recent government Resources and Energy Quarterlyreport forecast the value of Australian LNG exports will be nearly $50bn this year, second only to iron ore.

Coal States’ Futile Bids To Prop Up a Dying Industry | EWG Next Level Energy - The U.S. coal industry is dying, and the Trump administration’s schemes to keep it alive through taxpayer subsidies have likewise hit a dead end. But that’s not stopping coal states’ increasingly desperate efforts to keep it on life support.Wyoming produces more coal by far than any other state: more than 317 million tons in 2017, according to the federal Energy Information Administration. Earlier this year, an internal study by Rocky Mountain Power, the state’s largest electricity supplier, found that closing four money-losing coal-fired power plants and replacing them with renewable energy bought on the open market could save ratepayers in Wyoming and neighboring states more than $248 million. In response, the state legislature passed a bill to force any utility that plans to close a coal plant to try first to sell it to a new operator. The utility would then have to buy back the power and pass the costs through to its ratepayers. Republican Gov. Mark Gordon signed the bill, despite an analysis by University of Wyoming economist Jason Shogren showing that the only way any utility could run Rocky Mountain Power’s plants more cheaply would be to “cut corners on environmental cleanup or slash worker benefits.” Similar legislation in Montana failed.In Ohio, state lawmakers are considering legislation to bail out two money-losing coal plants by charging customers a monthly surcharge that would total $60 million a year. That proposal is included in a bill to give amuch larger bailout to two aging nuclear power plants, which would also cut back state mandates on renewable energy and energy efficiency. Last month, West Virginia reduced the coal severance tax from 5 percent to 3 percent, and gave coal companies a tax rebate for buying equipment to expand their mines. The state is expected to lose more than $60 million annually in taxes beginning in 2021, when the tax is fully implemented, according to the state’s Tax and Revenue Department.    Kentucky lawmakers adopted legislation to prohibit federally certified radiologists from diagnosing black lung disease using X-rays. Legislation was filed the same year that a federally certified physician found the “biggest cluster ever” of black lung disease in central Appalachia. Most diagnoses will now be made by physicians employed by the coal industry, which will have the effect of lessening the financial burden of black lung payouts for mining companies. 

 Is President Donald Trump losing his fight to save coal? Third major company since May files for bankruptcy  - Nearly 2,000 miners across four states may lose their jobs after yet another major coal company filed for bankruptcy this week – the third since May and fourth since last October.The bankruptcy filing from Revelation Energy LLC and its affiliate Blackjewel LLC, the nation's sixth-top coal producing company in 2017, comes amid President Donald Trump's ongoing efforts to boost the flagging industry.The Trump administration rolled out a rule last month aiming to extend the lives of aging coal-fired power plants across the nation. Environmentalists say the Affordable Clean Energy rule would trigger premature deaths, including from lung disease. During his 2016 presidential campaign, Trump promised to revitalize coal and save miners' jobs, despite scientists linking the burning of the fossil fuels to global warming, but the industry has continued to suffer losses. At mines and facilities in Virginia, Kentucky, West Virginia and Wyoming, Revelation Energy and Blackjewel employ 1,800 workers, according to court documents andThe Casper (Wyo.) Star-Tribune. Company officials estimate they owe $156 million for goods and services, West Virginia Public Radio reported. Last month, Cambrian Coal LLC also filed for bankruptcy. The company operating in Kentucky and Virginia blamed its bankruptcy on changes in demand and regulations related to the Clean Air Act. Another coal-producing leader filed for Chapter 11 bankruptcy in May. Once the nation's third-largest coal company, Wyoming-based Cloud Peak Energy employed 1,300 people at the time of its filing. It accounted for 7.4% of total U.S. coal production in 2017, according to the Department of Labor.  And, the nation's ninth-leading coal company went to bankruptcy court late in 2018. Colorado-based Westmoreland Coal Co. had more than $1.4 billion in debt at the time, The Associated Press reported.  Although Trump has touted coal's rebirth, 51 coal plants have closed and eight coal companies have filed for bankruptcy since his election, CBS News reported last month.

Many Kentucky coal miners will go unpaid until bankrupt Blackjewel re-opens its mines --A bankrupt coal company confirmed during a court hearing Saturday that many Kentucky miners will not be reimbursed for clawed-back paychecks until the company can resume its normal operations. Employees of Blackjewel LLC, which employs about 1,100 people in Kentucky, Virginia and West Virginia, were last paid Friday, June 28, but had their paychecks pulled from their bank accounts Monday, July 1. That left many miners who had already paid bills on June 28 and over the weekend with overdrawn accounts and concerns over their finances.During Saturday’s hearing, Travis McRoberts, an attorney representing Blackjewel, said the company hopes to secure additional financing in the coming days to bring back some of its employees for security and other “critical functions.” The loss of the miners’ last paycheck is having an impact on miners and their families. Melissa Cole, a Letcher County woman whose husband worked at a Blackjewel mine near Cumberland in Harlan County, said her account was initially overdrawn $1,088 when the bank first clawed back the money, but more checks she wrote have come in since, so her negative balance is growing. Cole and her husband had their daughter buy them a gallon of milk Friday, and may need to rely on her for more help. Cole said some miners use a check-cashing business in Harlan County to cash their paychecks, and there has been a concern that they could have criminal charges for cashing what turned out to be cold checks. Court documents show the coal company knew there wasn’t money in the bank to cover the June 28 checks issued to employees in Kentucky, but instead hoped to get money the week of July 1 to cover the checks.

Class action suit seeks wages for former employees of Blackjewel coal company - A former employee of a major coal producer filed a class action suit Tuesday that aims to recover wages for employees of Blackjewel LLC., a coal company that filed for Chapter 11 bankruptcy last week and left hundreds of Kentucky miners out of work. The suit claims that Blackjewel broke a federal labor law that requires companies to give workers 60 days notice before their jobs are terminated. It aims to force Blackjewel to pay 60 days wages and benefits for those employees. Stuart Miller, an attorney representing the former employee, said the company’s failure to notify workers constitutes a violation of the Worker Adjustment and Retraining Notification Act. WARN Act class action suits are “opt-out” suits, meaning former Blackjewel employees don’t have to sign up to join. Rather, any former Blackjewel employee who meets the requirements specified in the suit would receive benefits unless the employee chooses to opt out. 

Mercury levels in Sutton Lake fish a concern - -- A March sampling from Sutton Lake found high levels of mercury in largemouth bass, which has resulted in a new fish advisory. “Some kinds of fish contain high amounts of mercury, which can cause health problems in people, especially children,” said Kelly Haight, a spokeswoman with the N.C. Department of Health and Human Services. (DHHS) Based on the analysis, DHHS is recommending people continue to adhere to the statewide mercury advisory for fish, which has been in place since 2008. The guidelines say that women ages 15 to 44, pregnant or nursing women, and children under 15 should not eat these fish because of health issues, especially those associated with brain function, due to the consumption of mercury. Other people can eat up to one meal, or 6 ounces, per week. Although these recommendations have been in place for more than a decade, Sutton Lake, a popular boating and fishing spot, has been the site of environmental concern. Duke Energy operated a coal-fired plant there for more than five decades. One source for mercury is the ash from coal-fired power plants and incinerators. The lake has been the site of coal ash spills over the years, including during Hurricane Florence. “The reason that there are mercury advisories for every waterbody in North Carolina isn’t because of coal ash, it’s because we’ve been burning coal globally and in the Southeast. It settles down to the ground and into the water,” said Kemp Burdette, the Cape Fear Riverkeeper. His concern is that recent studies of coal ash have found many other contaminants, from arsenic to chromium. “There are levels that show contaminants in higher concentrations than in the worst coal ash spill recorded,” he said. “We should be doing much more sampling for many more contaminants.”

Critics say Ameren has made up its mind to leave coal ash in the ground at St. Louis-area power plants - How to regulate coal ash — the coal-combustion byproduct containing mercury, lead and other contaminants — has stoked plenty of debate in recent years, both in states like Missouri and at a national level.The tug-of-war has been defined by uncertainty amid competing pushes aimed to strengthen or loosen guidelines for disposing of the material, experts say. That uncertainty has spiked recently, with an August 2018 federal court decision stating that Obama-era changes to coal ash oversight are not protective enough, even as the current Environmental Protection Agency has sought to undermine them.And meanwhile in Missouri, the state Department of Natural Resources withdrew its own controversial proposals for coal ash oversight in late May, “as a result of the uncertainty created by the ongoing federal litigation,” the agency said. The move makes it unclear how the state might manage sites where the material is kept — including at decades-old ash ponds that can reach 100 feet deep into floodplains along major rivers and threaten groundwater.But despite that uncertainty about which direction coal ash rules could take, groups that track the issue say the St. Louis-based utility, Ameren, sounds certain about plans to close its legacy ash ponds while leaving contaminants in the ground — a sense they said was reinforced at meetings with the public the week after DNR pulled its proposed rules.“They’ve made it clear that’s what they’re doing,” said Maxine Lipeles, the now-retiredformer director of Washington University’s Interdisciplinary Environmental Clinic, speaking to the Post-Dispatch after attending Ameren’s meetings. “The more we learn, the more clear it is that it’s risky to the public and environment to leave the ash in place.”“Ameren is spending a lot of money to convince us that it’s all OK,” added Patricia Schuba, president of the Labadie Environment Organization, a volunteer group focused on the utility’s Labadie Energy Center — the largest coal-fired power plant in Missouri and among the biggest nationally. The Labadie Energy Center is about 45 miles southwest of downtown St. Louis, near the Missouri River. “They make an argument from the very introduction that the only real solution … is that they leave it there and cap it. And that’s unacceptable to anyone who knows anything about this site.”

 Coal ash pit will remain at Bull Run, TVA says in new report - The Tennessee Valley Authority will not be digging up 5 million tons of toxic coal ash stored in an unlined pit next to the Clinch River in Anderson County unless ordered to do so, the utility says in a new report. TVA issued its latest and final report July 2 on what it intends to do with a coal ash pit and coal ash wastewater at its Bull Run Fossil Plant, one of TVA's six remaining coal-fired power plants. TVA earlier this year announced it was going to shut down Bull Run, which produces 1,500 tons of coal ash daily, by 2023. The utility also revealed it would leave 5 million tons of coal ash — a stew of 26 toxins, heavy metals and radioactive isotopes — in an unlined clay pit. That pit is partially submerged in groundwater, according to expert analysis, although TVA says its not been confirmed whether that means coal ash in the pit is also submerged. BY HPE Consume Pay-as-You-Go Infrastructure on Your Terms See more → The pit borders the Clinch River, a public drinking water source, and sits atop Bull Run Creek, also a water source for a public water utility, records show. Tennessee regulators in June questioned whether that pit is leaking coal ash contaminants, including arsenic, into water sources or is at risk for collapse. TVA said it would review comments and concerns. A month later, TVA now says it’s sticking to its plan unless the Tennessee Department of Environment and Conservation or the EPA tells the utility otherwise.

New coal ash, stormwater projects for TVA's Bull Run Fossil Plant - Officials with the Tennessee Valley Authority recently announced projects regarding coal ash and stormwater at its scheduled-to-close Bull Run Fossil Plant in the Claxton Community. A July 2 news release from the utility said the purpose of the projects are to “improve the handling of wastewater and stormwater flows.” The projects involve the plant’s property along Melton Hill Lake on the Clinch River. In the release, TVA announced an interim plan to close the main ash impoundment in place and turn a section of the impoundment into a temporary process water basin. “This interim solution would be in place until a permanent decision is made on the management of the underlying coal combustion residuals,” the release stated. The current stilling pond would be permanently closed, with ash from it removed to what was called an “existing onsite landfill.” TVA would then turn the stilling pond into a permanent process water basin. Scott Brooks with TVA’s public relations staff recently defined process water in an email to The Oak Ridger as “water from plant operations, storm runoff and such.”

Pakistan Ramps Up Nuclear Power to Boost Low-Carbon Electricity - Construction of 1,100 MW nuclear power reactor K2 unit in Karachi has been completed by China National Nuclear Corporation, according to media reports. A similar reactor unit K3 will add another 1,100 MW of nuclear power to the grid, bringing the total nuclear power installed capacity of Pakistan to 3,630 MW (12% of total power) by 2022.  Hualong One reactors being installed in Pakistan are based on improved Westinghouse AP1000 design which is far safer than Chernobyl and Fukushima plants.  In addition, Pakistan is also generating  9,389  MW (about 28% of total power) of low-carbon hydroelectric power in response to rising concerns about climate change. It is scheduled to begin operations in 2020. It’s built using the Chinese HPR1000 technology, which features a dual containment design, with the outer containment providing additional protection for the primary containment. KANUPP is Pakistan's first nuclear power plant where construction started in 1966 in Karachi. The plant was connected to the national grid on 18 October 1972. KANUPP, a pressurized heavy water reactor of 137 MW gross capacity was constructed by Canadian General Electric under a turnkey contract. In 1976, vendor support for spare parts and fuel was withdrawn. The PAEC undertook the task of indigenously manufacturing the required spare parts and nuclear fuel on an emergency basis and, since 1980, KANUPP has successfully operated using fuel manufactured by the PAEC, according to International Atomic Energy Agency (IAEA).

Georgia Power moving forward with construction milestones at Vogtle plant - Georgia Power placed the middle containment vessel ring for Unit 4 at the Vogtle nuclear expansion near Waynesboro, Ga. It is one of several projects ongoing at the facility. The 2.4 million-pound, 51-foot tall containment vessel ring – which consists of dozens of individual steel plates — is part of the structure that houses the reactor vessel. The middle ring is the second of three containment vessel rings to be set for Unit 4. Additionally, the placement of more than 930 cubic yards of concrete was completed inside the Unit 3 shield building. The Unit 3 shield building is now more than 80 percent complete. The shield building is made of steel and concrete. Workers also set the fourth and final core make-up tank for the Vogtle 3 & 4 projects. The 330,000-pound stainless-steel tank is part of the safety core cooling system to keep the reactor vessel cool. The tank was placed inside the Unit 4 containment vessel. Finally, the last section of the steel floor that sits atop the in-containment refueling water storage tank (IRWST) has been set inside the Unit 4 containment vessel. The IRWST contains more than 500,000 gallons of borated water and provides heat removal from the reactor. The Vogtle 3 & 4 facility employs more than 400 craft workers, mostly pipefitters and electricians, and more than 8,000 workers overall.

Nuclear Power, Once Seen as Impervious to Climate Change, Threatened by Heat Waves -- Harnessing the enormous power of nuclear fission, plants generate steam, which shoots through pipes to spin a turbine that generates massive amounts of electricity. To keep from getting dangerously hot, the plants suck up surrounding water from the nearby rivers, lakes or oceans around which they're built to cool the steam. Now, increasingly, more frequent heat waves and hotter average temperatures are making those waters so warm that engineers are concerned that it can't do the job. Analysts say climate change is to blame. In little-noticed but publicly available reports to regulators, nuclear plant owners revealed that unusually hot temperatures last year forced them to reduce the plants' electricity output more than 30 times – most often in the summer, when demand from nuclear plants is at its highest. In 2012, such incidents occurred at least 60 times. At one plant in Connecticut a reactor was taken offline for nearly two weeks when temperatures in the Long Island Sound surged past 75 degrees. The incidents, submitted to the Nuclear Regulatory Commission, reflect a sharp uptick from even a decade ago, when plants appear to have submitted only nine such reports in 2009. In 1988, 1989 and 1991, there was just one such report. The dramatic increase mirrors the rise in average U.S. and global temperatures spurred by climate change. "I've heard many nuclear proponents say that nuclear power is part of the solution to global warming," . "It needs to be reversed: You need to solve global warming for nuclear plants to survive."

Senate bill to help communities like Wiscasset 'STRANDED' with nuclear waste -- U.S. Sens. Susan Collins of Maine and Tammy Duckworth of Illinois have introduced the Sensible, Timely Relief for America’s Nuclear Districts’ Economic Development (STRANDED) Act.  The legislation would address the impacts of stranded nuclear waste by providing federal assistance to communities around the country that are burdened with storing this spent fuel, according to a news release.The Senators’ bipartisan legislation would award economic impact grants to local government entities to offset the economic impacts of stranded nuclear waste, establish a task force to identify existing funding that could benefit these communities, and create a competitive innovative solutions prize competition to help these communities find alternatives to nuclear facilities, generating sites, and waste sites. Affected communities would be eligible for $15 per kilogram of spent nuclear fuel stored, which is consistent with the rate for impact assistance established under the Nuclear Waste Policy Act of 1982.The STRANDED Act is supported by the town of Wiscasset, where Selectmen passed a resolution last year calling for passage of the bill. Wiscasset is the home of Maine Yankee nuclear power plant that shut down in 1997.Under the Nuclear Waste Policy Act and a contract with the Department of Energy, waste there was required to be removed by January 1998.  However, more than 60 canisters of nuclear waste are still located at the Maine Yankee site. According to Collins, the STRANDED Act would establish a grant program to support economic development and create jobs in communities that are burdened with the cost of storing spent nuclear fuel.

Why SC is likely stuck with a stockpile of the nation's most dangerous nuclear materials - South Carolina could be stuck with a massive stockpile of the nation’s most dangerous nuclear material for decades, despite a federal mandate and years of promises that the state wouldn’t become America’s plutonium dumping ground. A restricted internal report obtained by the Aiken Standard and The Post and Courier suggests that the state is likely to become a long-term repository for enough plutonium to build the bomb dropped on Nagasaki nearly 2,000 times over. To read the full article click here: South Carolina's Plutonium Problem.

Y-12 waste mislabled; US suspends low-level radioactive waste shipments to Nevada (AP) — A Nevada congressman called for U.S. Energy Secretary Rick Perry’s resignation Wednesday after the department acknowledged multiple shipments of low-level radioactive waste to a site north of Las Vegas may have been mislabeled and out of compliance with safety regulations for years. The department had announced earlier that shipments of the waste from Tennessee to Nevada have been suspended while it investigates whether the materials were “potentially mischaracterized” as the wrong category of low-level waste. Low-level waste can include equipment or worker’s clothing contaminated by exposure to radiation, while mixed low-level waste can include toxic metals. Deputy Energy Secretary Dan Brouillette also has ordered a department-wide assessment of its “procedures and practices for packaging and shipping all radioactive waste types,” according to a memo. Department spokeswoman Shaylyn Hynes said none of the materials shipped to Nevada as early as 2013 from the Y-12 facility in Oak Ridge, Tennessee, posed any health or safety threats to workers or the public. But she acknowledged the shipments slated for disposal at the Nevada National Security Site were not in compliance with the site’s acceptance criteria. The department’s National Nuclear Security Administration has launched an internal investigation “to determine how this went undetected for a six-year period,” Hynes said in a statement on Wednesday. The low-level waste material is unrelated to weapons-grade plutonium that the department secretly shipped to the same Nevada site last year from South Carolina and is currently at the center of a legal battle with the state of Nevada in the 9th U.S. Circuit Court of Appeals. But Rep. Steven Horsford, D-Nevada, said in calling for Perry to “resign immediately” that the new disclosure is further evidence that Nevada has been covertly “coerced” into illegally receiving nuclear materials “through negligence or outright trickery.”

Sisolak slams 'illegal' nuclear waste delivery sent to Nevada --Gov. Steve Sisolak says the Trump administration has again illegally shipped classified radioactive material to Southern Nevada. Sisolak on Wednesday released a letter that accuses the U.S. Department of Energy of transporting and disposing of unapproved low-level radioactive waste at the Nevada National Security Site north of Las Vegas. The letter, sent last week to Energy Secretary Rick Perry, says Nevada was told on July 3 that deliveries received from a nuclear facility in Tennessee were actually mixed low-level waste that “may contain a reactive material.” Such waste is not approved for disposal at the Southern Nevada site, Sisolak said, though he claims new shipments of the material have been arriving monthly for the past 12 years. The first-term Democratic governor demanded that Perry immediately cut off deliveries until Nevada officials are allowed to independently inspect the spent nuclear material. “I was beyond disappointed to learn of problems related to shipments of low-level radioactive waste from the DOE’s Y-12 facility to Nevada,” Sisolak added in a Wednesday statement. “My office worked diligently with our state agencies and federal delegation to immediately compile questions and demand answers in a letter issued to Secretary Perry.”Sisolak said elected leaders told federal officials at an in-person Tuesday briefing that they would “do everything in the state’s power” to hold the federal agency accountable. “There shouldn’t be a single person who attended yesterday’s briefing who didn’t receive that message loud and clear,” he concluded.  

Earthquakes rattle Yucca Mountain debate - Recent California tremors that rattled Las Vegas were seized upon Tuesday by proponents and opponents of a federal plan to store nuclear waste in a seismic zone in Southern Nevada that includes Yucca Mountain. Sen. John Barrasso, R-Wyo., said his legislation to jump start the process to open Yucca Mountain is based on studies that take seismic activity into account with storage at the remote Nevada site. He said the California earthquakes, if anything, showed the need to move spent fuel and radioactive waste from plants where it is currently stored above ground to a more secure repository. “This doesn’t change my view,” Barrasso, chairman of the Senate Environment and Public Works, told the Review-Journal when asked about the earthquakes. “We need to find a permanent location for the storage of nuclear waste. I think it’s much safer in Yucca Mountain than in a hundred different locations,” Barrasso said. But Nevada officials disagree. Sen. Jacky Rosen, D-Nev., said the “earthquakes Nevadans experienced over the weekend highlight the very real dangers” the state would face with nuclear waste storage. The temblors in California near Ridgecrest in the Mojave Desert were felt as far away as Los Angeles and Las Vegas. In between lies Yucca Mountain, designated by Congress in 1987 as the site for the nation’s nuclear waste produced by power plants. Radioactive spent fuel and waste is currently stored at 121 sites in 35 states because the federal government has failed to take possession and store the waste at Yucca Mountain. There’s no waste stored yet at Yucca Mountain, 90 miles northwest of Las Vegas, where an exploratory tunnel was bored into a barren ridge for scientific study. Political opposition in Nevada to radioactive waste storage has halted development. And the 6.4- and 7.1-magnitude tremors over the July Fourth holiday appeared to bolster the arguments by those opposed to the Nevada site.

The Quake to Make Los Angeles a Radioactive Dead Zone - Had last Friday's 7.1 earthquake and other ongoing seismic shocks hit less than 200 miles northwest of Ridgecrest/China Lake, ten million people in Los Angeles would now be under an apocalyptic cloud, their lives and those of the state and nation in radioactive ruin.The likely human death toll would be in the millions. The likely property loss would be in the trillions. The forever damage to our species' food supply, ecological support systems, and longterm economy would be very far beyond any meaningful calculation. The threat to the ability of the human race to survive on this planet would be extremely significant. The two cracked, embrittled, under-maintained, unregulated, uninsured and un-inspected atomic reactors at Diablo Canyon, near San Luis Obispo, would be a seething radioactive ruin.Their cores would be melting into the ground. Hydrogen explosions would be blasting the site to deadly dust. One or both melted cores would have burned into the Earth and hit ground or ocean water, causing massive steam explosions with physical impacts in the range of Hiroshima and Nagasaki. The huge clouds would send murderous radioactive isotopes into the atmosphere that would permanently poison the land, the oceans, the air ... and circle the globe again and again, and yet again, filling the lungs of billions of living things with the most potent poisons humans have ever created. In 2010, badly maintained gas pipes run by Pacific Gas & Electric blew up a neighborhood in San Bruno, killing eight people. PG&E's badly maintained power lines have helped torch much of northern California, killing 80 people and incinerating more than 10,000 structures. Now in bankruptcy, with its third president in two years, PG&E is utterly unqualified to run two large, old, obsolete, crumbling atomic reactors which are surrounded by earthquake faults. At least a dozen faults have been identified within a small radius around the reactors. The reactor cores are less than fifty miles from the San Andreas fault, less than half the distance that Fukushima Daiichi was from the epicenter that destroyed four reactors there.  Diablo cannot withstand an earthquake of the magnitude now hitting less than 200 miles away. In 2014, the Associated Press reported that Dr. Michael Peck, the Nuclear Regulatory Commission's site inspector at Diablo, had warned that the two reactors should be shut because they can't withstand a seismic shock like the one that has just hit so close. The NRC tried to bury Peck's report. They attacked his findings, then shipped him to Tennessee. He's no longer with the Commission.

Russian spy sub crew prevented nuclear accident at cost of their lives -On July 1, 14 Russian sailors—most of them senior officers with ranks equivalent to captain, commander, or lieutenant commander in the US Navy—died in an accident aboard a small nuclear-powered submarine designed for operations near or on the sea floor. The submarineLosharik (named after a Russian children's book character who is a horse made of juggling balls) was operating in the Barents Sea when the accident took place.According to a Russian Navy statement published by TASS, the 14 "died in Russian territorial waters as a result of inhaling combustion products aboard a research submersible vehicle designated for studying the seafloor and the bottom of the World Ocean in the interests of the Russian Navy after a fire broke out during bathymetric measurements." The officers died while combating the fire. In a statement delivered on July 3 from the Russian North Fleet's base in Severomorsk, Russian Defense Minister Sergei Shoigu said that three crew members and a civilian aboard the sub survived the disaster. The crew members who died, he said, "acted heroically in the critical situation. They evacuated a civilian expert from the compartment that was engulfed by fire and shut the door to prevent the fire from spreading further and fought for the ship's survival until the end."  The Kremlin has released a transcript of a meeting between Shoigu and Russian President Vladimir Putin. In it, Shoigu said that "we can repair the submersible quickly," thanks to actions by the crew to seal off the nuclear propulsion systems of the sub from the fire. "The crew has taken the necessary measures to save the unit, which is in working order." In other words, the actions of the officers who died fighting a fire from within a sealed compartment prevented an undersea nuclear disaster in the Arctic.

Russian Nuclear Sub Wreck Leaking Radiation 100,000 Times Higher Than Normal- Report -- Researchers in Norway have discovered radiation levels in excess of 100,000 times normal next to a Soviet-era nuclear submarine which sank in the Arctic 30 years ago - a reading which is higher than those taken 12 years ago, according to Norwegian news outlet TV2.  The Kosomolets went down in the Barents Sea in 1989, killing 42 out of its crew of 69, according to the Moscow Times. It is sitting at a depth of 1,665 meters (5,462 ft) with a severely damaged hull from sitting on the seabed for 30 years.  The radioactivity was detected near a ventilation hole which has been observed to kick up 'mysterious' dust clouds.  We have observed a kind of cloud coming out of this hole once in a while. In connection with the test in which we measured pollution, a cloud came out of the hole. This may indicate that the pollution comes out in pulses, says Heldal. It is assumed that the ventilation hole at the top of the submarine tower is in direct contact with the reactor inside the wreck. This hole will now be monitored extra closely by the researchers the rest of the cruise, which is scheduled to be completed tomorrow. -TV2

Who paid all that money to buy all those nuclear bailout ads in Ohio? - If you're an Ohioan with a TV or radio, you've probably heard about a nuclear power bailout bill that lawmakers are considering in Columbus. But what you can't find out is exactly how much money is being spent on those ads – or who originally gave the money for them.House Bill 6 seeks to tax Ohioans 80 cents a month through their utility bill to bailout First Energy Solutions' nuclear power plants in Northern Ohio. Critics say the bill, which also will boost costs for commercial and industrial customers, will discourage the use of renewable energy for businesses across the state. Proponents say the bill will help Ohio stay energy independent and keep badly needed jobs in the communities around the plants.The bill, which has the backing of powerful House Speaker Larry Householder, triggered up to $8.3 million in ads and other campaign spending, published estimates show. For comparison, a record $45 million was spent in the 2018 Ohio gubernatorial race. Yet an Enquirer analysis of ad purchases for and against House Bill 6 and reported to the Federal Communications Commission shows just $2.7 million in sales. The Cincinnati market, the state's third largest, was the leader in ads on the bailout bill.Why the gap between the $2.7 million hard figure and the $8.3 million estimate? Some broadcasters, including Cincinnati's WCPO-TV, are choosing not to post billings for the ads – and under FCC rules, they don't have to do so. The big money behind the bill hasn't been reserved for ads this year. Groups allied with Householder put $800,000 into ads for Ohio's 2018 campaigns, boosting candidates who put Householder into the speaker's seat. A couple of the winning candidates also are key sponsors of House Bill 6.

Ohio reports quarterly increases in oil, natgas production - Kallanish Energy - First-quarter 2019 was very productive in Ohio in terms of crude oil and natural gas production, Kallanish Energy reports. Crude oil production jumped 28.7%, to more than 5.07 million barrels (Mmbbl). That’s up from 3.94 Mmbbl in the first quarter of 2018, according to production data released last Friday by the Ohio Department of Natural Resources. Natural gas production in Ohio also increased in Q1 2019, growing from 531.95 billion cubic feet (Bcf), to 609.45 Bcf, a 14.57% increase from Q1 2018. The data covers production from 2,277 horizontal shale wells in three Ohio rock formations. Of those wells, 2,228 reported production of oil and/or natural gas, the state said. The typical well produced 2,277 barrels (Bbls) of oil and 273.54 million cubic feet (Mmcf) of natural gas in Q1 2019. Ohio law does not require the separate reporting of condensate and natural gas liquids. They are included in the oil/natural gas totals. The results are available at

Utica Shale well activity as of July 6:

  • DRILLED: 249 (240 as of last week)
  • DRILLING: 165 (173)
  • PERMITTED: 481 (481)
  • PRODUCING: 2,225 (2,223)
  • TOTAL: 3,120 (3,117)
  • Three horizontal permits were issued during the week that ended July 6, and 17 rigs were operating in the Utica Shale.


  • 1. BELMONT: 654 (654 as of last week)
  • 2. CARROLL: 526 (526)
  • 3. HARRISON: 474 (471)
  • 4. MONROE: 433 (433)
  • 5. GUERNSEY: 274 (274)
  • 6. JEFFERSON: 237 (237)
  • 7. NOBLE: 223 (223)
  • 8. COLUMBIANA: 163 (163)
  • 9. MAHONING: 30 (30)
  • 10. WASHINGTON: 22 (22)
  • 14. STARK: 13 (13)


  • 1. EAP OHIO: 764 (764 as of last week)
  • 2. ASCENT RESOURCES UTICA: 588 (585)
  • 3. GULFPORT APPALACHIA: 392 (392)
  • 4. ANTERO: 260 (260)
  • 5. ECLIPSE: 209 (209)
  • 6. CHESAPEAKE: 151 (151)
  • 7. RICE: 149 (149)
  • 8. XTO: 80 (80)
  • 9. HILCORP: 63 (63)
  • t-10. CNX GAS: 53 (53)
  • t-10. GULFPORT ENERGY: 53 (53)

Dominion Energy Pulls the Plug on Gas Pipeline Project in Ohio - Dominion Energy has decided not to push forward with its $48 million pipeline project bringing Marcellus Shale natural gas from Pennsylvania to market in Eastern Ohio. Dubbed "The Sweden Valley Project," the company cited a protracted approval process at the Federal Energy Regulatory Commission (FERC) as its reason for pulling the plug.In a letter to FERC, Dominion said that the environmental assessment issued last August concluded "if Dominion constructs and operates the proposed facilities in accordance with its application and supplements, and the staff's recommended mitigation measures below, approval of the Project would not constitute a major federal action significantly affecting the quality of the human environment."Nonetheless the positive assessment did not add any wind to Dominion sails, leading to a situation where the company will not be able to meet contractual demands for its gas.Don Santa, a former FERC commissioner, said in an email that "in many cases, pipeline applicants request decision dates in order to be able to meet construction schedules and fulfill contractual obligations to the shippers who will transport natural gas using the newly constructed pipeline capacity." Neil Chatterjee, FERC Chairman, reacted to the news on Twitter on Friday afternoon, saying he was "deeply disappointed that the unique circumstances of this case prevented the Commission from approving the project as quickly as the applicant had hoped, and that, as a result they are withdrawing the application."

 Ask the Doctors: Study links fracking to low birth weight - Dear Doctor: Fracking just started near my Ohio hometown, and I remember reading about a connection to the risk of having a baby with low birth weight. I want to get pregnant, but now I'm worried. How close do you have to be to a site to be affected?  Dear Reader: "Fracking" is the common term for hydraulic fracturing, a drilling process that pumps fluid at ultra-high pressure deep into the earth.  There has been no end of controversy regarding the process in recent years, with vigorous debate over whether or not fracking causes air pollution, contaminates surface and groundwater, leads to earthquakes and plays a role in a range of health problems. Among the health questions that have been raised is whether the process affects birth weight among pregnant women who live near fracking sites.Your question refers to a study published a few years ago in the journal Science Advances. The researchers, including one from UCLA, analyzed the outcomes of 1.1 million live births in Pennsylvania between 2004 and 2013. They compared the birth weights of infants born to mothers living at varying distances from active fracking sites, both before the extraction operations had begun, and after the wells became active. They found that women who lived very close to an active fracking operation -- within one-half mile -- had a 25 percent higher risk of delivering a baby of low birth weight than did women who lived at a distance of 2 miles or more. The study found that babies born to women who lived more than one-half mile from a fracking site, but less than 2 miles away, were also adversely affected, but to a lesser degree. When researchers looked at women who lived at least 2 miles from a fracking operation, they found no signs of adverse health effects to newborns.   Low birth weight occurs most often in premature births, when the infant doesn't have the full 37 weeks of gestation to grow and gain weight. Low birth weight is sometimes seen in full-term babies who failed to grow well during gestation due to issues with the mother's health, the placenta or the baby's condition.

Analysts say Philadelphia refinery, shut down after fire, unlikely to find a willing buyer -- More than 1,000 people will be out of work once Philadelphia Energy Solutions’ refinery closes its doors this month. The closure comes in the wake of an explosion and fire that destroyed a crucial part of the plant. But despite pleas from the union, and comments from former Congressman Bob Brady, who told Plan Philly he thought the plant was “too big to fail,” industry analysts say finding a buyer who will keep it as a refinery will be next to impossible.This facility was significantly less sophisticated than the other East Coast refineries,” said Phil Verleger, an economist and industry consultant. “It could barely hang on in a strong market. Once the export ban was gone, it couldn’t survive.”When the shuttered Sunoco refinery was revived in 2012 with the help of Brady, the Obama Administration and state grants, its new owner The Carlyle Group took advantage of cheap North Dakota crude oil traveling to Philadelphia by rail. One reason the Bakken crude was so cheap, Verleger said, is because an export ban meant producers couldn’t fetch a better price overseas. When that was lifted, he said, the PES refinery’s days were numbered.PES filed for bankruptcy in early 2018, citing the rising costs of the Renewable Fuel Standard, a program that forces refiners that don’t blend ethanol to buy credits on the open market.Verleger calls that claim a “fraud.” Nevertheless, the bankruptcy judge allowed the company to retire 138 million outstanding RFS credits.This February, six months after exiting bankruptcy, Reuters reported the plant was again in bad financial shape. In just three months, its cash balance had fallen from $148 million to $87.7 million by the end of 2018. In May, Reuters reportedthe company had deferred payments into employee retirement accounts.Verleger said it doesn’t help that investors aren’t eager to buy refineries these days, let alone one that had already fallen on hard times before the fire and explosion. “Nobody’s going to find the money any place,” Verleger said.  “The energy sector right now represents 5 percent of the S&P 500. In 1980 it was at its peak at 20 percent of the S&P 500. Essentially the energy sector is being shunned by investors.”

Philadelphia Explosion One in String of ‘Near Miss’ Accidents at Refineries Using Deadly Chemical - Next Friday, July 12, the Philadelphia Energy Solutions (PES) refinery in south Philadelphia is slated to close its doors, marking the end of an era that began in 1866, one year after the Civil War ended, when 50,000 barrels of kerosene and chemicals were first stored on site.The plant — which continued to struggle financially after emerging from bankruptcy in August 2018 — experienced a major industrial accident on June 21. That morning, a massive fireball lit up the pre-dawn sky over Philadelphia after leaking hydrocarbon gas had ignited. Five workers were injured, all treated on site. Three explosions shook walls in Philadelphia and the blast was reportedly felt as far away as South Jersey. Emerging evidence suggests that the disaster could have been far more severe — in large part due to a deadly chemical used at the PES refinery and roughly 50 others nationwide.Hydrogen fluoride (HF) is one of the most dangerous chemicals used by industry. When released, it forms rolling clouds that cling low to the ground and can spread rapidly over long distances. On the skin, HF burns and causes ulcers. Mixed with water, it forms hydrofluoric acid. Inhaled into the lungs, it can cause a range of harms, from cough to lung collapse to the deadly destruction of organs and bones. Breathing the gas for as little as five minutes can cause death within “a couple of hours,” according to the University of North Carolina at Chapel Hill. Symptoms can be immediate or delayed for days.“Aging refineries are playing Russian roulette with American population centers,” said Tim Whitehouse, a former enforcement attorney with the U.S. Environmental Protection Agency (EPA), in a statement, noting that more than 22 million people in the U.S. live near sites usingHF. “Counting Philadelphia, three refineries using HF have had major explosions just since 2015, hardly cause for continued complacency.”

Report: Pennsylvania had record year for natural gas production - Pennsylvania had a record year for natural gas production in 2018, the state Department of Environmental Protection said on Wednesday.Unconventional well operators produced 6.1 trillion cubic feet of natural gas in 2018 — an increase of .8 trillion cubic feet over 2017 and the largest volume of natural gas produced in Pennsylvania in a single year, according to DEP’s 2018 Oil & Gas Annual Report.Pennsylvania is the second-largest natural gas producer in the United States, after Texas.Unconventional wells are those that access large reservoirs of underground natural gas through hydraulic fracturing, or fracking. The first unconventional natural gas well was drilled in Pennsylvania in 2004, according to DEP.Since then, production levels have steadily risen, requiring more permitting and inspection activities from DEP.DEP Secretary Patrick McDonnell said Wednesday that the agency’s internal restructuring and continued expansion of electronic tools has increased permitting and inspection efficiency, shortened waiting periods and improved oversight of natural gas producers. “Gov. (Tom) Wolf and DEP have made permitting and inspection efficiency a priority — reducing overall permit backlog by more than 90% since 2016 and improving inspection efficiency while ensuring compliance with our environmental regulations,”

The “Beast” is back, baby! -- Rig counts have doubled in Pennsylvania — up from about 30 at the beginning of the year to 61 in June. Gas production in the basin has jumped from hundreds of millions of units per well a few years ago to billions of units of gas per well this year. With gas production rising to over 18 Bcf/d, Pennsylvania now produces over 20% of the natural gas in the U.S., second only to Texas, which tops out at 22 Bcf/d. In the 10 years since a shale boom skyrocketed in the Marcellus shale play, Pennsylvania’s natural gas production has increased by a monstrous 32-fold. Part of the “uproar” in gas production can be attributed to cost-saving innovations and greater efficiencies in drilling and in the technology being deployed down hole, which helps operators improve their margins and pull a lot more gas out of the well bores with each individual rig. Some of these advancements include: more wells per pad; drilling longer laterals — up to three miles long; sensors that determine how far hydrofracturing is penetrating the shale for more accurate well spacing; sensors that track temperatures, pressure and vibration on equipment down hole; and advanced software that can predict when equipment needs servicing before it breaks down. Another important factor driving the production of natural gas is its increasing use for power generation — the chief use of natural gas in the U.S. In 2018, natural gas-fired power plants surpassed coal-fired plants across the country. The Energy Information Administration forecast the share of U.S. total utility-scale electricity generation from natural gas-fired power plants to rise from 35% in 2018 to 38% in 2020. Nearly 30 new power plants, each with a capacity of 475-megawatts or more, are now in operation, under construction or in the permitting process in Ohio, Pennsylvania and West Virginia.

Trespass Charges Dropped Against Atlantic Sunrise Pipeline Protesters | WSKG – A Lancaster County judge on Monday dismissed trespassing charges against seven protesters who blocked construction of the Atlantic Sunrise natural gas pipeline almost two years ago. Judge Howard Knisely of the Lancaster County Court of Common Pleas released the defendants without charge after the district attorney dropped the misdemeanors in exchange for community service. Marie Cusick/StateImpact Pennsylvania The judge welcomed the agreement and said peaceful, nonviolent protest is protected, albeit with limitations, by state and federal law. Legislatures, not the courts, are the proper place to protect the natural environment and public safety, he said. But he urged citizens to elect lawmakers who truly represent public interests rather than their own. “We must all be more vigilant to elect to those legislative positions persons who are highly concerned with their local constituents and local problems, and not those who merely look for personal advancement or who look to industry to fill their coffers for re-election,” he said in court Monday. The pipeline, which went into service in September 2018, carries natural gas south from the Marcellus Shale through 10 Pennsylvania counties. It has stirred significant opposition in Lancaster County.

Should We Be Afraid of the Mariner East Pipeline? -- Neighbors described it like this: a loud hissing noise. A massive ball of fire. A jet, or a meteor, crashing into the earth. Night turning into day. On September 10, 2018, a section of the Revolution Pipeline — which had begun carrying natural gas just a week earlier — leaked and ignited in rural Beaver County, Pennsylvania, northwest of Pittsburgh. The rupture shot flames 150 feet into the air, destroying one house, collapsing several overhead power lines, and forcing the evacuation of nearly 50 residents.Fortunately, no one was injured; the couple who lost their home had fled in the nick of time.But for residents living along the thousands of miles of natural gas pipelines in Pennsylvania — second only to Texas as the nation’s largest producer of the fossil fuel and home to the newly booming, energy-rich Marcellus Shale region — the fire and the charred earth it left behind serve as a haunting reminder: Something like this could happen in our backyards. That dread is perhaps nowhere more evident than 300 miles southeast of Beaver County, in the dense suburban neighborhoods west of Philadelphia, a city that energy industry leaders have, in the past decade, eyed as a global processing and trading hub. Here, tensions surrounding the cross-state Mariner East pipelines — a project much larger than Revolution and owned by the same parent company, Dallas-based Energy Transfer — are only intensifying. The pipelines (Mariner East 1 and 2 and the not-yet-completed 2x) carry highly compressed natural gas liquids. Once they are fully operational along a 350-mile route from their Marcellus Shale source to a revitalized former oil refinery in Marcus Hook, they promise to be vastly lucrative for Energy Transfer — and for the state, which, the company boasts, could see an economic impact of more than $9 billion from the project. But since work began in February 2017, Mariner East has been plagued by nearly 100 state Department of Environmental Protection violations, multiple sinkholes, service shutdowns and construction chaos. Glaring gaps in state regulatory oversight have been exposed, and opposition has grown into significant pushback from neighbors and a bipartisan group of lawmakers who say Pennsylvania communities are at risk of — and unprepared for — a potential pipeline disaster.  In the meantime, those at the heart of the Mariner East conflict zone live in fear of an incident like Beaver ­County’s — or worse.’

Manchin asks DOE officials for update on Appalachian Storage Hub - U.S. Senator Joe Manchin questioned officials from the U.S. Department of Energy for an update on theAppalachian Storage Hub on Tuesday.Manchin, a Ranking Member of the Senate Energy and Natural Resources Committee, heard testimony on eleven bipartisan bills before the Committee including one that would require a study by the DOE on the benefits of the hub. Manchin is the sponsor of the proposedAppalachian Energy for National Security Act, S. 1064, which would require the study and report on the national security benefits of the proposed natural gas liquids storage hub in Appalachia. During questioning, Manchin said he has been in talks with U.S. Secretary of Energy Rick Perry about his bill and the hub. “I’ve talked with Secretary Perry and he’s seen the model of a class 5 hurricane coming up the Houston Channel and what it can do to cripple the energy of our country and the dependency we have,” he said.“So we are looking for a backup. West Virginia, Pennsylvania, Ohio, with all of the energy we have stored there and the protection of the mountains among everything else – it’s a natural hub.” Shawn Bennett, Deputy Assistant Secretary for Oil and Gas, Office of Fossil Energy at the U.S. Department of Energy, answered Manchin’s question about President Trump’s Executive Order to examine the Appalachian region as a candidate for economic development in the nation’s petrochemical sector.“Secretary Perry has been very fond of talking about creating a petrochemical complex storage hub in the region because he recognizes the importance from an economic security standpoint,” Bennett said. Manchin also stressed to the entire room just how large of a role that West Virginia plays in the energy industry. “We are heavily coal industry. We have an ocean of natural gas under us with properties in propane, ethane, and butane. We have been blessed but also we have a lot of wind which we are taking advantage of and solar is coming in,” Manchin said.

Standing Their Ground in the Path of the MVP - Construction continues on the Mountain Valley Pipeline in southwest Virginia, but several challenges to it remain unresolved. One that is still up in the air-- tree sitting protestors in Elliston. They’ve managed to hold their ground in an encampment along its route for almost a year, preventing construction, at least for now, in one small mountain hollow. There’s been a loud silence since last winter when the Mountain Valley Pipeline company asked federal Judge Elizbeth Dillon to remove protestors camping out on a steep ravine in the path of the pipeline. Tammy Belinski is an environmental lawyer who has been following the legal challenges. “The absence of a ruling so far, in my view, means that she doesn’t have a way to rule in Mountain Valley Pipelines’ favor.” Belinksy points out Judge Dillon has consistently ruled in favor of the pipeline companies on eminent domain cases, that’s when the government can legally take people’s private land for public use and must compensate landowners when they do. Belinksy believes the laws have long been written to favor pipeline companies. “I have incredible respect for the young people who are taking this matter into their own hands because they see the regulatory system isn’t working," Belinsky says. "They see that no one is protecting their future, no one is protecting their water, no one is protecting their air, so, they’re doing it.” Higher up on the mountain, tree sitters have been taking turns at the site known as ‘Yellow Finch,’ standing, sitting and sleeping in the trees.  “It's one thing to walk in a protest line,” says Crystal Mello. She spent a weekend in the tree to give the long-haul sitter a break. She enjoyed it. The experience gave Mello a perspective on what the long-time sitters go through. “It was hot the day I went up but, (over the past year) there’s been snowstorms and floods and a lot of wild weather.  These tree sitters are very resilient.”  Mello lives nearby and helps support the sitters, as do a couple dozen or more people from the region. They say they’ve had visitors from all over the country, and beyond.   But the hardcore live-ins, the ones who have given up their ‘other lives’ to  live on-site, are a dedicated, determined, and quiet crowd.  Most don’t want to call attention to themselves, only their cause.

Powerless: The high cost of cheap gas - CBS News (documentary from ProPublica) When the U.S. declared the discovery of natural gas reserves large enough to propel the country to energy independence, property owners in West Virginia could never have imagined how that discovery might affect them. CBSN Originals and ProPublica traveled to West Virginia's "gas patch" to meet landowners Beth Crowder and David Wentz, a once-married couple who found themselves in the crosshairs of Big Gas and joined forces to fight back.

A resolution condemning pipeline challengers passed easily in the WV House. A pipeline lobbyist wrote it. - It was getting late on March 7 in the West Virginia House of Delegates chamber.There were only two days left in the 60-day legislative session, and lawmakers had been voting for hours. By 8:30 p.m., delegates had moved past bills and onto resolutions — measures that don’t become law but express the legislative body’s sentiment. But one resolution seemed different from the others, Delegate Evan Hansen, D-Monongalia, said. He asked that House Resolution 11, titled “Recognizing the importance of the Atlantic Coast Pipeline,” be read and voted on separately.  House Resolution 11, sponsored by nearly half the delegates, praised the Atlantic Coast Pipeline, a major natural gas project. Then, the resolution sharply condemned the citizens’ groups that challenged the project in court, calling their legal challenge an “all-out assault” with the goal of “forcing its cancelation.”The resolution passed 80-17.What wasn’t mentioned on the House floor that night was that the resolution was drafted by the pipeline company itself. Bob Orndorff, a lobbyist for Dominion Energy, wrote the resolution and sent it to the House of Delegates, according to documents obtained through a public records request filed by the Charleston Gazette-Mail with the clerk of the House of Delegates. At the end of January, as the resolution was being drafted, Orndorff took five Republican delegates -- Eric Nelson, R-Kanawha; Jason Harshbarger, R-Ritchie, who works for Dominion Energy; Scott Cadle, R-Mason; John Hott, R-Grant; and Chris Phillips, R-Barbour -- out to dinner at Fazio’s, an old-style Italian restaurant in Charleston, according to a disclosure filed with the West Virginia Ethics Commission. The bill: $575.  All of those delegates would sponsor House Resolution 11, which was introduced one week later. Then, the day before the resolution passed on the floor, Orndorff, the West Virginia Oil and Natural Gas Association, and Antero Resources, the state’s largest gas producer, hosted a luncheon that cost $830 for the House Energy Committee, in the office of Delegate Bill Anderson, R-Wood, the resolution’s lead sponsor and chairman of the committee, another disclosure filing shows.  On the floor the night the resolution passed, Anderson called natural gas pipelines “absolutely necessary.” It’s not abnormal for a lobbyist to provide insight or help draft legislation. But Orndorff’s resolution was different from other pieces of legislation because it singled out a specific group. It sheds light on the close relationship between West Virginia’s growing natural gas industry and its legislative branch, as the Gazette-Mail and ProPublica chronicled last year.

 Regulators ask Mountain Valley Pipeline developers about the safety about the safety of pipe's coating - A federal agency is asking Mountain Valley Pipeline officials about the safety of a protective coating on the 42-inch diameter steel pipe being buried through West Virginia and Southwest Virginia. Delays in construction of the natural gas pipeline have led to some sections of pipe being stored above ground for more than a year, generating concerns that the coating could degrade over time and contaminate nearby air, soil and water. In a letter Wednesday to Mountain Valley’s corporate attorney, the Federal Energy Regulatory Commission requested “toxicological, environmental and health information” on a coating used to prevent corrosion of the pipe. Tina Smusz, a retired physician from Montgomery County, has been sounding the alarm on what she calls “serious unanswered questions” about the coating, 3M Scotchkote Fusion Bonded Epoxy 6233. “The health and lives of citizens in Virginia and West Virginia, and those yet to be born, depend on your conscientious oversight of energy projects,” Smusz wrote in a Jan. 23 letter to FERC. In March, State Health Commissioner Norman Oliver and Department of Environmental Quality director David Paylor wrote a joint letter to the commission, citing concerns from the public in requesting information about any hazards posed by the coating. That in turn led FERC, the lead agency overseeing construction of the 303-mile pipeline, to ask Mountain Valley for a report on “the toxicity of the FBE [fusion-bonded epoxy] from all potential exposure pathways.” Concerns about the coating are twofold: Exposure to the elements could cause the substance to break down in a process called “chalking,” releasing harmful toxins into the air. And once the pipe is buried, some say, the material could leach into nearby ground water and be spread to streams or private wells. Smusz has cited the product’s safety data sheet, which says the coating contains carcinogens. But according to its maker, 3M Manufacturing Co., the coating is safe if applied properly and allowed to fully cure.

A church is fighting back against the Atlantic Coast Pipeline -  John Laury, Union Grove Missionary Baptist Church, and their neighbors in Union Hill, Virginia—which was settled by freed slaves 150 years ago—are on the front lines of the climate struggle. They’re vying to preserve the health of their community and the health of the planet. They’re aware that over the years communities of color have been disproportionately afflicted with the consequences of environmental degradation. A landmark report commissioned by the United Church of Christ in 1987 showed that 60 percent of African Americans and Latinos in the United States lived near a toxic waste site. The UCC report, titled Toxic Wastes and Race in the United States, is often credited with raising the issue of environmental justice to public consciousness. The term environmental racism, in fact, was coined by Ben Chavis, a protégé of Martin Luther King Jr. As a UCC pastor and field officer for the denomination’s Commission for Racial Justice, Chavis was among 500 arrested while protesting a chemical waste dump in Warren County, North Carolina, which is often cited as the birth of the environmental justice movement. From higher asthma rates in Philadelphia and Milwaukee, to dirty drinking water in San Joaquin Valley, California, and Flint, Michigan, to oil spills and deadly hurricanes along the Gulf shore, to urban landfills in Houston and Harlem, minority populations have been more likely to suffer the consequences of industrial pollution. The Atlantic Coast Pipeline would move up to 1.5 billion cubic feet of fuel per day along a 600-mile route from West Virginia to eastern North Carolina. With that kind of capacity, an $8 billion financial investment, and the potential to export liquefied natural gas from terminals in Maryland and Georgia, the ACP would cement its lead developers, Duke Energy and Dominion Energy, into a long-term commitment to shale gas just at the time when scientists and most world leaders recognize the urgent need to phase out fossil fuels and turn to clean energy. “We’re supposed to leave this earth in the shape we found it or better,” said Laury. “That’s why we’re fighting this monster.”

Brothers Lead Showdown With US Gas Giant -- The nine-month battle for control of America’s largest natural gas producer has come down to a choice: The old guard, or the “shalennials.” Absent a settlement before EQT Corp.’s annual meeting in Pittsburgh on Wednesday, shareholders will decide between competing rosters of candidates for the board of directors. One slate was nominated by EQT, while the other is backed by Toby and Derek Rice, the thirtysomething brothers leading a group of dissident investors who want to overhaul the company. Less than two years after EQT took the top spot among U.S. gas producers with its $6 billion purchase of the Rices’ former company, Rice Energy Inc., the two sides are locked in a bitter dispute. The brothers, who say EQT has underperformed since the acquisition, want a board majority and aim to install Toby Rice as chief executive officer. Though activists rarely grab a board majority through a proxy battle, the Rices’ push may be an exception: They’ve already won the backing of several large investors and two shareholder advisory firms. The brothers, who have used the term “shalennial” to describe their management style, own about 3% of EQT. The conflict between the Rices and EQT hinges on a wider issue for the industry. While U.S. gas drillers have been remarkably successful at ramping up output and turning the country into a net exporter, their track record of doing so profitably has been mixed at best, causing many investors to sour on the sector. The Rices say they’ll implement better technology and revamp EQT’s organizational structure to drill wells more efficiently. 

They've drilled a well on my property, but never finished it. Why?— There are lots of reasons why a well may be drilled, but not finished and producing: The operator could be waiting for a pipeline to be connected, a crew to complete the fracking, or the markets to improve, Or it could be a well drilled to hold a lease, or a test well, and never put into production. A drilled but uncompleted well (DUC) is a new well that has been drilled, but has not been fracked for the first time and put into production. There is also casing, cementing and other steps that need to be done before a well can start producing. When producers are under stress, or when the market prices drops, there’s a slowdown in drilling and completion activity. An uncompleted well could also be waiting for a missing piece of the infrastructure puzzle, like an adjoining pipeline. When prices improve or other market triggers change, operators turn to DUC wells to be able to put them more quickly into production. There will always be some DUCs, and the U.S. Energy Information Administration says one long-term benchmark is the ratio of DUCs to completions of 2:1 for oil regions and just over 4:1 for gas regions.The recent high in the Appalachian region was 1,256 drilled but uncompleted wells in February 2014, and the number remained above 1,000 wells nearly 2 1/2 years later. But since July 2016, operators have been chipping away at that total, completing 95 wells in the second half of 2016; 121 wells in 2017; 212 wells in 2018, and 63 wells in the first five months of 2019, according to the EIA.As of the end of May 2019, there are still 437 drilled, but uncompleted wells in the Appalachian basin of eastern Ohio, West Virginia and Pennsylvania. As of June 15, 2019, Ohio has permitted 3,113 horizontal wells in the Utica and Point Pleasant shale plays, of which 2,626 have been drilled and 2,222 are producing. That means there are 234 drilled wells that are not currently producing. Another 67 permits have been granted in the Marcellus Shale in Ohio, and 44 of those have been drilled, but only 21 are producing. Of the 44, 23 have been drilled but aren’t producing.

Study Finds Thousands Live Near Underground Natural Gas Storage Wells - Thousands of Ohio, Pennsylvania and West Virginia residents live within one city block of highly pressurized underground natural gas storage wells, according to a new research from Harvard University. The study, published this week in the journal Environmental Health, found more than 20,000 homes and an estimated 53,000 people across six states are living within 650 feet of an underground gas storage well.   “Our results were somewhat surprising in that a lot of these wells are in residential suburban areas, which in terms of the entire natural gas supply chain is definitely a unique kind of land use conflict,” said Drew Michanowicz, a research associate at the Center for Climate, Health and Global Environment at the Harvard T.H. Chan School of Public Health and lead author of the study.  To store natural gas, companies often inject natural gas into repurposed decades-old oil and gas wells. The practice gained national attention in 2015, when a well in Aliso Canyon, California failed, leaking natural gas for 118 days. Nearby residents were evacuated and reported suffering from headaches, nosebleeds and rashes.  The leak released almost 100,000 metric tons of the potent greenhouse gas methane into the atmosphere, equivalent to the emissions created by 530,000 cars in a year.  Following the Aliso Canyon disaster, the Harvard team in 2017 set out to map the location of natural gas storage wells. Researchers used a combination of census data, satellite data, land use data and addresses to pinpoint homes located near more than 9,000 underground gas storage wells in Ohio, Pennsylvania, West Virginia, New York, Michigan and California. Their mapping model estimates 10,000 more people live near underground natural gas storage wells than previous models found.  Companies often use older wells built before setback laws were put in place to store natural gas. In West Virginia, the study found half of the state’s underground storage facilities have at least one well that is near at least one home within the state’s 200-foot setback zone. Overall, the researchers found across the six states that 41 percent of underground storage wells are located within one city block of at least one home. In Ohio, more than half of the state’s underground storage wells are located within one block of a residence affected an estimated 12,000 Ohio homes and over 30,000 residents.

50,000 People Live Within a Block of Natural Gas Storage, Harvard Says - About 65% of natural gas storage facilities like the one that sprung a massive leak outside Los Angeles four years ago are in suburban neighborhoods from New York to California, according to a Harvard University study. More than 50,000 people live within a city block of an active gas storage well, researchers at Harvard’s Center for Climate, Health and the Global Environment found. That’s in contrast to shale wells, which are mostly located in rural areas. A 2015 rupture at Sempra Energy’s Aliso Canyon storage facility near Los Angeles forced thousands of residents to evacuate for months and cost the company more than $1 billion. Most of the storage facilities -- used by utilities to stock gas for heating and power generation -- are more than 50 years old and weren’t in populated areas when they were built, according to Harvard. They may also carry safety risks because they weren’t designed for storage, Harvard said. Previous studies using U.S. census data underestimated the number of people living near gas storage wells, according to the study. The new research, published Monday in the Journal of Environmental Health, combines census records with land use and satellite data. The study examined the locations of more than 9,000 wells in Pennsylvania, Ohio, West Virginia, Michigan, New York and California.

The Toxic-Gas Catastrophe Hiding Beneath Your Home - In October 2015, a fragile well casing ruptured at the Aliso Canyon natural gas storage field in Los Angeles, California—and no one could figure out how to stop it. For 118 days, 100,000 metric tons of methane and other hazardous pollutants seeped into the atmosphere. The single worst natural gas leak in American history was not only a disaster for the climate; it displaced thousands of nearby residents for months. Even after returning home, many complained of headaches, rashes, nosebleeds, and other symptoms they blamed on the lingering airborne chemicals. And most of these people didn’t see it coming. The majority of residents near Aliso Canyon claimed they had no idea they lived near a natural gas storage field until the 2015 blowout happened. They didn’t know that if any of the wells ruptured, they were at risk of exposure to a host of toxic chemicals, which could cause serious neurological and respiratory problems and even certain kinds of cancer. They could also be at risk of death from a pipeline explosion, like the victims of the Colorado blast in 2017. The massive Aliso Canyon storage field, which contained more than 110 underground wells, is just a small part of America’s much larger natural gas infrastructure. Approximately 15,000 such wells are active across the United States, and nearly half of them are concentrated in six states: Pennsylvania, Ohio, West Virginia, Michigan, New York, and California. For the many thousands of Americans who live near these wells, as well as federal regulators who are tasked with keeping the public safe, these wells are out of sight, out of mind. And a new study shows their dangers to be far greater than previously believed.  Published Monday in the journal Environmental Health, Drew Michanowicz’s study was directly inspired by Aliso Canyon.  After surveying the surroundings of more than 9,000 active wells in those six states, they found 6,000 located in suburban areas. Some 53,000 people live within 650 feetof a well, about 10,000 more people than previously estimated. The researchers found that most of those people had no idea about the threat lurking sometimes directly under their homes. “Because of suburban encroachment, some of these homes are sitting literally on top of these storage fields, especially in Ohio and Pennsylvania,” Michanowicz said. (For context, the closest home to the Aliso Canyon disaster was a mile away.) “Tens of thousands of people don’t realize that they’re one corroded steel casing away from disaster.” This is especially worrying because most wells at underground storage facilities are more than 50 years old, and most were not even designed to store natural gas,Michanowicz said; his 2017 study estimated that one in five of these wells were built for gas production, not storage, and are thus likely to be missing subsurface safety valves and other equipment needed to store gas under high pressure. (Federal data released after that study also showed Michanowicz’s number was too conservative; two-thirds of these wells are being used in ways they were not intended decades ago.)

The Natural Gas Industry Has a Methane Problem - Natural Resources Defense Council - Just because something is better than something else doesn’t necessarily make it good. This seems like an obvious enough point, yet it often manages to get lost in discussions about natural gas. Ever since certain advances in drilling and extraction technology—especially the technique of hydraulic fracturing, or fracking—ushered in the domestic natural gas boom 15 years ago, much of the conversation regarding this hydrocarbon has been about how much better it is than other fossil fuels. According to the Union of Concerned Scientists, when burned under optimal conditions, natural gas typically emits between 50 and 60 percent less CO2 than coal does, and as an automobile fuel, between 15 and 20 percent less of the greenhouse gases than gasoline. Natural gas also generates far less in the way of harmful pollutants like mercury and nitrogen oxide than do coal, gasoline, and diesel. But the fact that natural gas burns cleaner than other combustible fuels doesn’t mean that it’s clean. The reason why can largely be summed up in one word: methane. Methane leaks go hand in hand with our processes for extracting, storing, and burning natural gas. They’re a big reason that methane accounts for nearly 15 percent of greenhouse gas emissions. Last summer, a study published in the journal Science found that U.S. oil and gas operations are leaking 60 percent more methane than the U.S. Environmental Protection Agency had previously calculated: about 13 million tons more each year. And just last week, thanks to a journalistic collaboration between E&E News, the Center for Public Integrity, and the Houston Chronicle, we learned that Cheniere Energy’s 1,000-acre Sabine Pass terminal in Louisiana has been plagued by dangerous leaks for the past decade. A leak last year resulted from “gashes up to six feet long” in the steel tanks that store super-chilled liquid natural gas (LNG), the stuff that the Trump administration recently and ridiculously rechristened “freedom gas.” The released LNG “quickly vaporized into a cloud of flammable gas” with the potential to ignite and set off “an uncontrollable fire.” One LNG expert proffered a worst-case scenario: a series of “cascading explosions that could destroy a plant and possibly extend damages to the public beyond the facility boundary.” Whether or not these leaks ever catch fire and explode, such methane emissions are still doing substantial harm in the atmosphere. Practically everyone recognizes this—including some of the country’s biggest oil and gas companies, which have called for a tightening of federal rules designed to plug methane leaks connected to fossil fuel production.

Why Natural Gas Prices Collapsed - U.S. natural gas prices have collapsed since the end of winter, even as inventory levels remain below average levels for this time of year. Henry Hub prices spiked in the fourth quarter of 2018 due to record levels of demand, cold weather, and historically low inventories. But prices remained elevated, over $4/MMBtu, for only a brief period of time. Production continued to soar, so traders were not overly concerned about market tightness.As peak winter demand season drew to a close in March, prices continued to ease, and prices have eroded steadily in the last few months. Prices dipped below $2.30/MMBtu recently, hovering in that range for the first time in roughly three years. As recently as December, prices were twice as high as they are now. What’s going on? The main driver of the bearish market is production, which continues to ratchet higher, even as shale gas drillers are suffering from financial strain. Production from the Marcellus shale alone was up about 15 percent in May from the same period a year earlier.Gas markets also go through seasonal swings, seeing a peak in demand in winter and to a lesser degree in summer, while consumption falls sharply in spring and fall. But swings in temperatures from year to year can lead to significant disruption. A cool start to the summer this year led to lower demand than otherwise would be the case, allowing inventories to build back up.In the last week in June, U.S. natural gas storage levels stood at 2,390 billion cubic feet (Bcf), up 89 Bcf from a week earlier. Storage was still 152 Bcf below the five-year average but 249 Bcf higher than last year, which helps explain why prices recently fell off a cliff. Stocks have replenished, at least relative to last year.The multi-year low for natural gas prices are likely to deal a further blow to the coal industry, already caught in a death spiral. At least three coal companies have filed for bankruptcy since May, potentially putting 2,000 mining jobs at risk. Coal has a hard time competing with natural gas prices this low. But low gas prices is also bad news for the gas industry itself. Recently, a former executive at EQT, one of the country’s largest shale gas producers, said that fracking has been an “unmitigated disaster” for the industry, depressing prices and leading to consistent losses. “And at $2 even the mighty Marcellus does not make economic sense,” Steve Schlotterbeck, the former EQT executive said at an industry conference last month. “There will be a reckoning and the only questions is whether it happens in a controlled manner or whether it comes as an unexpected shock to the system.”

Gas Storage Injection In-Line with Expectations, Hurricane Barry Ahead --Natural gas storage inventories increased 81 Bcf for the week ending July 5, according to the EIA’s weekly report. This is in line with the expected injection, which was 80 Bcf.Working gas storage inventories now sit at 2.471 Tcf, which is 275 Bcf above inventories at the same time last year and 142 Bcf below the five-year average.At the time of writing, the August 2019 contract was trading at $2.466 MMBtu, roughly $0.022 higher than yesterday’s close and $0.20 higher than last week. Natural gas prices have been gaining traction over the past couple of weeks as weather forecasts have started to show warming temperatures across the lower-48. Prices rallied during expiration of the July contract, as expiration typically does, but then took a downturn to start the month, dropping as low as $2.24/MMBtu. However, the above-average weather forecasts have garnered support for prices, and prices are now trading in the $2.45 to $2.50 range as power demand is expected to increase. Tropical Storm Barry is now expected to become Hurricane Barry by tomorrow and could have a bearish impact on prices during the next couple of days should LNG terminals are shut in, leaving an over-supplied market. The storm will also likely decrease power burn for southern states (Texas and Louisiana) adding additional bearish sentiment to the market in the very short term. See the chart below for projections of the end-of-season storage inventories as of November 1, the end of the injection season. Dry gas production saw a decrease of 0.7 Bcf/d. The South Central region saw the largest move, decreasing by 0.47 Bcf/d as production is being shut down ahead of the tropical storm in the Gulf.Canadian net imports also decline this week, down 0.1 Bcf/d. Domestic natural gas demand increased 1.1 Bcf/d week over week. Power demand accounted for nearly all the domestic demand increase again this week, gaining 1.4 Bcf/d as temperatures started heating up. Res/Com demand decreased slightly, losing 0.15 Bcf/d, and Industrial demand fell 0.1 Bcf/d. LNG exports were flat week on week, while Mexican exports gained 0.18 Bcf/d.

Rural Macomb County residents plead for better safety from proposed gas compressor - A group of northern Macomb residents are bracing for the construction of a new gas compressor station, saying it lacks a safety feature that could protect them in the event of an explosion. The community near the site on Omo Road in Ray Township is about a mile from the Consumers Energy gas compressor station that was shut down temporarily in January when a fire broke out. Advocates say that's made residents even more fearful than they were before, and that the company that plans to build the new station, Bluewater Gas Storage, has a bad track record in the area. Valerie Brader of Rivenoak Consulting says there were explosions in 2011 and 2014 at Bluewater-operated compressor stations in the area. "These are folks whose homes shook in the Consumers explosion and whose homes shook in the 2014 explosion, so these are folks who have been personally affected," says Brader. Brader says there's a common-sense solution that would add very little to the $40 million dollar cost of the project. She says an earthen berm around the compressor station would protect residents from an explosion or fire that starts at the station - and also prevent drivers from accidentally piling into the station and causing an explosion.

He was calling the gas company when the mall exploded, ‘but by then it was too late’ -  The roads were clear, the cleanup had begun and most nearby businesses had opened their doors Sunday. But the mystery behind the explosion that leveled a Plantation strip mall and injured 23 people remains. “The investigation is going to take awhile,” said Plantation Fire Rescue’s deputy chief, Joel Gordon. “There’s so many things that can cause an explosion.”  Fire rescue officials have walked back from initial reports Saturday that it was a gas leak that caused a blast heard for miles around. The force blew out windows of shops and cars, ripped brick from buildings, caved in ceilings and left the dust-hazed scene looking like “a war zone,” as some witnesses called it.In a Saturday statement, TECO Peoples Gas said technicians “found no natural gas leaks” in their system, although firefighters did report a ruptured natural gas pipe. But tenants of nearby buildings distinctly remember smelling a strong odor of gas Saturday morning. Graig Foulks, the 36-year-old manager of the Total Nutrition store next door to the assumed ground zero of the blast — a vacant store that used to be a pizza place — said he checked with the restaurant next door, Pho Brothers, to find the source of the smell.   Foulks warned Hiep Van, the Pho Brothers cook also known as “Chef Mo,” about the gas smell around 11 a.m. Van, 35, smelled the gas, too, and called his gas company right away. “I was on the phone with TECO when it happened,” he said of the gas company. “I’m pretty sure he heard that. I told them to hurry up and send a technician, but by then it was too late.”

Jay Inslee says Enbridge Line 5 is ‘clear and present threat’ to Great Lakes - Democratic presidential hopeful Jay Inslee called for the closure of an oil and gas pipeline running across the Great Lakes, calling the pipeline and a proposed replacement tunnel a “clear and present threat” to the environment. The Washington governor has made addressing climate change the central message of his campaign for the Democratic Party’s nomination for president. Inslee slammed the 66-year-old pipeline in a statement Wednesday. “They threaten the clean drinking water that millions depend upon,” Inslee said. “And they would lock in decades of climate pollution that we can’t afford. ... This dangerous pipeline must be decommissioned, the proposed oil tunnel must not be built and clean alternatives must be explored immediately.” Inslee backed up his statements on Twitter, saying the “dangerous” pipeline must be decommissioned and the proposed tunnel should not be built. Inslee said the pipeline should be “a major topic” in the upcoming Democratic primary debate in Detroit. He called on his fellow presidential candidates to oppose the Enbridge plan. Inslee’s campaign struggled to gain traction in the crowded Democratic field, but has sought to stand out by presenting a comprehensive plan to reduce fossil fuel use and encourage clean building practices. Inslee’s ambitious “100% Clean Energy for America Plan” lays out clean energy standards for new vehicles, public infrastructure and the construction of new buildings. As president, Inslee said he would use executive action to push some policies through a divided Congress. Inslee said his plan would create 8 million jobs, particularly in manufacturing cities like Detroit.

Enbridge begins geological work for Line 5 tunnel, despite Nessel lawsuit - Enbridge Energy is forging ahead with preparations to build a tunnel in the Straits of Mackinac to protect its controversial Line 5 oil and gas pipeline, even as the state seeks to block the project. Meeting with reporters at the Detroit Wayne County Port Authority along the Detroit River on Wednesday, Enbridge officials outlined $40 million in engineering and geological preparations planned this year as part of a $500 million project to swap the dual pipelines and construct a tunnel around new pipe. Officials of the Calgary-based energy giant said that’s the best option for protecting the Great Lakes from an unlikely rupture without disrupting regional fuel supplies. The highlight of Enbridge’s presentation on Wednesday: a tour of the Highland Eagle, a drilling vessel brought from the Irish Sea for the project. The ship was scheduled to depart Detroit on Wednesday night for a 36-hour voyage to the deepest stretches of the Straits, which separate Michigan’s two peninsulas. Once in the Straits, rotating 38-member crews will drill holes deep into the bedrock and collect rock samples over a 72-day stretch. Meanwhile, a separate jack-up barge will drill six more boreholes – deep, narrow holes – along the lakebed nearer to shore. Geological sampling is a critical step for finalizing designs and determining how to best build the 4-mile, 12-foot in diameter tunnel, Enbridge officials said. Guy Jarvis, Enbridge’s executive vice president of liquids pipelines, called the vessel “tangible evidence” of the company’s commitment to move forward on the tunnel “in the face of the state’s attempts to invalidate prior agreements and shut down the pipeline.”

Tugboats carrying 4,850 gallons of diesel, oil sink into Illinois River - About 4,850 gallons of diesel fuel and oil spilled into the Illinois River near Hardin, Coast Guard officials said Sunday. Three tugboats and a deck barge that were tied together, holding the oil and fuel sank into the river on Sunday at mile marker 21. It was first reported to the Coast Guard that the boats might be sinking on Friday.Coast Guard officials have assessed roughly 11 miles of the river and are working with the tugboat company to contain, remove and prevent the fuel from moving downstream. Efforts to prevent serious environmental damage is also underway.Devices called “booms” have been implemented to contain as much as the oil and diesel as possible. The booms work to guide the substances into an area where it can be absorbed and removed. The booms were placed around the boats. An excavation crew is planned to arrive later this week to attempt to remove the tugboats from the river, Fox 2 News reported Sunday. As of Monday, the tugboat vents from which the fuel leaked are believed to have been shut off by a team of divers, the release stated.Coast Guard spokesman Ian Ross told Fox 2 the spill was contained to an isolated area as of Monday. He said the incident was “unfortunate,” but noted the Coast Guard was “extremely happy” no one was injured.  The sinking of the three tugboats is expected to cause “major” marine casualties and is currently under investigation.Major marine casualties are declared when a non-public vessel results in the loss of six or more lives; the loss of mechanically propelled vessel of 100 or more gross tones, property damaged estimated a $2 million or more or a serious threat to life, property or the environment by hazardous materials.

Groups Oppose Illinois Commerce Commission Granting Dakota Access Pipeline an Increase in Oil Flow Capacity at Pretrial Hearing - Twenty people attended a short rally with speakers outside of the Illinois Commerce Commission offices Wednesday to oppose a request by Energy Transfer Partners to add three pumping stations along the Dakota Access and ETCO pipeline routes, doubling the capacity of oil flow. After the rally opponents sat in on a pretrial meeting at the Illinois Commerce Commission in which opponents announced their intention to intervene to stop the upgrade to the pipelines. Speakers at the rally included Rachel Elfant of Save Our Illinois Lands, Joe Phillips of Extinction Rebellion Chicago and Angie Viands of Rising Tide Chicago. All three speakers addressed the grave environmental and social impacts of burning even more fossil fuels as we are currently experiencing negative climate change impacts. The pumping stations would increase capacity of oil flow from 570,000 barrels to 1,100, 000 barrels. According to Oil Change International, this is the equivalent of 30 new coal plants. Dakota Access Pipeline construction sparked nationwide protests and a large encampment at Standing Rock Sioux Reservation in North Dakota in 2016 and 2017. According to the pretrial hearing, the pumping stations could be approved or denied by early October 2019. 

Bluffton, other communities voice concerns about seismic testing - The South Carolina Department of Health and Environmental Conservation received a letter this week from 16 coastal communities, including Bluffton, opposing seismic testing for offshore oil and gas deposits. The letter was drafted on behalf of the communities by the nonprofit law firm S.C. Environmental Law Project. It was submitted as DHEC begins its review of a federal permit application for the company WesternGeco to perform seismic testing off the coasts of Virginia, North Carolina, South Carolina and Georgia. “The seismic surveys proposed by WesternGeco involve towing an array of airguns that blast acoustic pulses at the ocean floor approximately every ten seconds, twenty-four hours a day, for months at a time,” a news release from the law firm said. ″(It’s) an injurious and extensive process known to harm and injure whales, sea turtles, fish and other marine animals and thus foreseeably harm South Carolina’s $22.6 billion tourism industry and its vital commercial and recreational fishery industries.” Mayor Lisa Sulka said Wednesday the town signed off on the letter last spring after a series of meetings with the S.C. Small Business Chamber of Commerce in conjunction with the firm. The firm held onto the letter until an application like WesternGeco’s came to DHEC for review. The 16 communities, a group that also includes Beaufort and Hilton Head Island, agreed to enter a lawsuit should a federal permit be approved. 

Claims still mounting 9 years after BP oil spill  - As judges and high-powered attorneys gathered inside an ornate Camp Street federal courtroom in April, the defendant in the case they were set to argue was identified only by a long series of numbers: BP Exploration v. Claimant ID 100139132. It was a format well-known to followers of the cases resulting from the 2010 Gulf of Mexico oil spill, where settlements have mostly been paid out under a veil of secrecy. But seconds after the case was called, and with a gleeful tone in her voice, Judge Edith Jones unmasked the party receiving the $9.4 million settlement award that was under protest by BP.  “I can’t do five-digit numbers, and in this case, the claimant is the well-known law firm Phelps Dunbar,” she said. “Now the world knows it.”  Jones, who sits on the 5th U.S. Circuit Court of Appeals, went on to declare it “tacky” of the mega-firm to seek money under the 2012 oil settlement, since the firm had represented paying clients in the massive wave of oil spill litigation that has so far cost BP nearly $12 billion to make people and businesses whole for the massive damage caused.  Phelps Dunbar partner Harry Rosenberg protested that its losses were genuine and that many other law firms had received settlements, too. In February, the appeals court ruled that from now on, BP settlement appeals will be unsealed by default, unless someone successfully objects. So even as the BP litigation crawls to an end, details about claims from some of the thousands of private parties who sought money under the 2012 settlement are coming to light.  The names that have surfaced so far have little in common with the shrimpers and oystermen who became poster boys for the spill’s devastating effects. They include Phelps Dunbar, the Tampa Bay Buccaneers and former New Orleans Hornets player David West. As one judge put it, “various types of businesses with more attenuated connections to conditions in the Gulf have also received compensation.”

Storm could become first hurricane of season and is already shutting down energy operations - The U.S. energy industry has halted about a third of Gulf of Mexico oil production and expects more disruptions, as the industry braces for the first hurricane of the year.The approaching storm, which was still forming over the Gulf Wednesday, was expected to head into the Louisiana coast by Saturday, dumping a large amount of rain. Oil prices jumped Wednesday by 4.5% per barrel on concerns the storm would disrupt oil production and threaten flooding around refineries in the area. Gasoline futures were also higher by about 4%, reaching $2 per gallon. The U.S. Energy Information Administration said Wednesday that U.S. crude stocks fell by 9.5 million barrels last week, triple what was expected by the market. At the same time, the oil industry is shutting in production and major producers evacuated rigs in the Gulf of Mexico, ahead of the approaching storm.The National Hurricane Center is predicting that the storm will develop over the Gulf of Mexico and hit the coast of Louisiana by Saturday. The storm, to be named Barry, would be the first hurricane of the season.Reuters reported that production in the gulf was cut by 602,715 barrels a day, about a third of gulf output, according to the Bureau of Safety and Environmental Enforcement. Natural gas production was reduced by nearly 18%.The U.S. Coast Guard anticipates issuing potential waterway restrictions on the Mississippi River within the next two days. That could limit the movement of tankers to and from refining areas.A U.S. Coast Guard official said, so far “we have not issued any waterway restrictions. We are anticipating that in the next 24 to 48 hours.” The spokesperson said depending on the expectations for wind and rain, the coast guard could act to restrict tanker traffic on the Mississippi River. The Coast Guard could also limit speed and direction in the shipping channel. “The forecasts are showing a significant amount of rain and the potential for flooding along the Mississippi River is a concern in the refining and oil industry,” said Andrew Lipow, president of Lipow Oil Associates. “The market has been moving up on all the issues related to the storm. A number of producers have been evacuating their platforms in the Gulf of Mexico, and curbing production.” Chevron, Royal Dutch Shell, BP, Anadarko Petroleum and BHP Group were evacuating staff from 15 offshore platforms. “From the track, it looks like the landfall is in the Lake Charles area. The concern is on the dirty side, where we get a lot of rainfall, can occur in the New Orleans and Baton Rouge area. We could see a storm surge that backs water into the Mississippi, which is already very high,” said Lipow. Lipow said there are three major refineries in Lake Charles and about 10 in the New Orleans-Baton Rouge area.

U.S. oil companies slash Gulf of Mexico production as storm bears down – (Reuters) - U.S. oil producers on Wednesday cut nearly a third of Gulf of Mexico crude output as what could be one of the first major storms of the Atlantic hurricane season threatened offshore oil production and began soaking Louisiana with heavy rains. Fifteen production platforms and four rigs were evacuated in the north central Gulf of Mexico, according to a U.S. regulator as oil firms moved workers to safety ahead of a storm expected to become a hurricane by Friday. The withdrawals helped push U.S. oil futures up 4.5% to $60.43 a barrel on Wednesday, and lifted gasoline futures more than 4% to the highest price since late May. The U.S. Gulf of Mexico produces 17% of U.S. crude oil and 5% of natural gas. As the potential hurricane, to be named Barry, approached Louisiana, Governor John Bel Edwards on Wednesday declared a state of emergency, warning that up to 15 inches (38 cm) of rain could fall on parts of the Gulf Coast state. New Orleans was under a flash flood warning after receiving about 8 inches of rain early in the day. Vermilion Parish, a coastal community, called for residents of some low-lying areas to evacuate. A tropical depression is expected to form in the Gulf by Thursday, with the potential to strengthen to a hurricane by the weekend, according to the National Hurricane Center. The system could produce a storm surge and heavy rainfall from Louisiana to the upper Texas coast.

Storm Barry cuts half U.S. Gulf Coast oil output, flooding fears close coastal refinery - (Reuters) - An intensifying tropical storm in the U.S. Gulf of Mexico on Thursday cut more than half the region’s oil output, with energy companies evacuating staff from nearly 200 offshore facilities and a coastal refinery. Oil firms shut more than 1 million barrels per day of oil production, 53% of Gulf of Mexico’s output, and 1.2 billion cubic feet per day of natural gas production, according to a U.S. regulator. Tropical Storm Barry’s winds reached 50 miles per hour (85 km/h) late Thursday and are expected to intensify, possibly reaching at least 74 mph, a category one hurricane, as it nears the coast, the U.S. National Weather Service said. It expects as much as 25 inches (64 cm) of rain to fall, with flooding due to the rains and a storm surge. Despite the production cuts, U.S. crude, natural gas and gasoline futures slipped on Thursday after the Organization of the Petroleum Exporting Countries forecast weaker demand for its output next year. Dozens of oil and gas producers have removed staff from 191 production platforms, according to offshore drilling regulator U.S. Bureau of Safety and Environmental Enforcement. It said seven rigs and 11 drill ships were evacuated or moved out of Barry’s path. Phillips 66 (PSX.N) evacuated staff and halted operations at its 253,600-barrel-per-day (bpd) Alliance, Louisiana, refinery and pipeline operator Enbridge Inc (ENB.TO) also evacuated three offshore platforms and halted some deepwater Gulf of Mexico natural gas pipelines. The storm prompted Anadarko, Chevron, Royal Dutch Shell and others to move staff out of the path of the storm and many halted production, according to company reports.

Slow-Moving Barry Threatens Louisiana Ports, Refineries, LNG Facilities - Tropical Storm Barry is expected to make landfall over the central Louisiana Coast Saturday, bringing the potential for extreme flooding, National Hurricane Center information showed Friday.  The NHC forecasts storm winds could reach hurricane strength when Barry reaches the Louisiana Coast. But the slow movement of Tropical Storm Barry will result in a long, heavy rainfall and flooding along the central Gulf Coast. The NHC has warned that extreme rain will flood the coastal regions south of Baton Rouge and New Orleans. This could impact operations at regional refineries.Phillips 66 Friday completed the "orderly shutdown" of its 294,700 b/d Alliance refinery in Belle Chasse, Louisiana, because of the mandatory evacuation of Plaquemines Parish. While crude and feedstock processing has ceased at the plant, Phillips 66 said utilities at the facility "remain active for restart facilities to begin as soon as it is safe to do so." Other regional refiners remain watchful, but are unlikely to shut down plants because they are not in the direct path of Barry.  Valero has two refineries in the New Orleans region -- the 125,000 b/d Meraux plant and the 215,000 b/d Norco facility.Chevron, ExxonMobil, and Shell said their USGC refineries were operating normally.About 1.1 million b/d, or 59%, of oil production and 1.4 Bcf/d, or 49%, of natural gas output in the Gulf of Mexico remained shut-in as Tropical Storm Barry approached, the US Bureau of Safety and Environmental Enforcement said Friday.  Shipping disruptions by US Gulf Coast port closures have supported European diesel and gasoline markets as market players there expect delays in getting product from the USGC, which pushed down refined product futures during morning US trading. In the spot market, USGC USGC RBOB at 7.8 RVP traded at NYMEX RBOB plus 3.50 cents/gal on Friday morning, up from plus 2.25 cents/gal Thursday, a level not seen since early May. Prices were being driven both by storm concerns as well as reports of work planned at Marathon's Galveston, Texas, refinery. A spokeswoman for the Louisiana Department of Environmental Quality said the Stolthaven terminal in New Orleans had shut down. The facility has 85 tanks. There are six US Gulf Coast liquefaction trains with total capacity of about 3.6 Bcf/d in operation at two terminals within range of potential impact from Tropical Storm Barry, based on the current track.Based on feedgas flows, LNG production appeared to be continuing Friday at Cheniere Energy's Sabine Pass terminal in Cameron Parish, Louisiana, and Sempra Energy's Cameron LNG facility in Hackberry, Louisiana. The biggest impact to the terminals in operation could come from vessel traffic restrictions along the intracoastal waterways that serve the terminals. At Cameron LNG, however, the facility was not scheduled to receive any tankers to load for export for the duration of the storm, a spokeswoman said after Lake Charles pilots advised they would be temporarily suspending service along the intracoastal waterway that serves the Louisiana terminal.

Tellurian, Total finalize Louisiana Driftwood LNG export plant agreements - (Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc said on Wednesday that units of French oil major Total SA have agreed to buy LNG from the U.S. company’s proposed $30 billion Driftwood export project in Louisiana. Total will buy one million tonnes per annum (mtpa) of LNG from Driftwood and invest $500 million in Driftwood Holdings LP, it said in a statement. Total will also buy an additional 1.5 mtpa of LNG from Tellurian’s offtake volumes from Driftwood. The deal involves LNG free on board at a price based on the Platts Japan Korea Marker (JKM). Tellurian said it planned to make a final investment decision this year on whether to build Driftwood, which would enable the plant to enter service in 2023. “The agreements we have executed with Total confirm the business model for the Driftwood project, establishing it as an LNG joint venture partnership with an implied value of $13.8 billion,” Tellurian President and Chief Executive Meg Gentle said in the statement.

Booming LNG industry could be as bad for climate as coal, experts warn - The booming liquefied natural gas (LNG) industry will play at least as big a role as new coal investments in bringing on a climate crisis if all planned projects go ahead, US-based energy analysts and campaigners say.The report by the Global Energy Monitor appears at odds with comments by Australia’s emissions reduction minister, Angus Taylor, who has said the country could be proud that the rapidly expanding LNG export industry was displacing coal power overseas.Government analysis identified LNG as the main reason Australia’s greenhouse gas emissions have risen each year since 2015, but the minister and industrysay Australian gas deserves credit for lowering global emissions. The Global Energy Monitor, formerly known as CoalSwarm, is a US-based research and advocacy group that tracks fossil fuel development. It found there were US$1.3tn in planned LNG investments across the globe, including nearly $38bn in Australia, putting it fourth on a list behind the US, Canada and Russia. Ted Nace, the group’s executive director, said the proposed tripling of global LNG capacity risked introducing decades of emissions of methane, a potent and difficult-to-monitor greenhouse gas, at odds with the Paris climate agreement. The Intergovernmental Panel on Climate Change last year estimated methane emissions would need to be reduced by 35% between 2010 and 2050 to meet the Paris goals. A separate study in the journal Nature found existing fossil fuel infrastructure alone, including coal and gas-fired power stations, would almost certainly be enough to push the world beyond 1.5C global heating if not shut down earlier than planned. Australia’s LNG industry has already more than tripled since 2012 as developments have come online in Western Australia, Queensland and the Northern Territory. A recent government Resources and Energy Quarterlyreport forecast the value of Australian LNG exports will be nearly $50bn this year, second only to iron ore.

A Community In America's 'Cancer Alley' Fights For Its Life Against A Plastics Plant - St. James is a rural community of just over 21,000 on the Mississippi River, better known for its plantations than its plastics. Some of its residents, as well as activists from around the state, had come to the hall to strategize how to stop the construction of a $9.4 billion chemical plant proposed by Taiwan-based Formosa Plastics. The facility, to cover 2,400 acres about 2 miles upriver from the meeting, would be the largest in the parish, which already hosts a fertilizer plant, a polystyrene plant and several oil and gas terminals and pipelines. It would also be one of the largest plastic producers in the nation. The sprawling complex is set to comprise 10 separate plants that would use ethane, propane and natural gas to produce the base materials for the plastic bottles being passed around, as well as grocery bags, drainage pipes, clothing, astroturf and antifreeze. In October, Sharon Lavigne, a lifelong resident of St. James and a school teacher, founded a nonprofit group called RISE St. James to fight the Formosa plant after hearing one too many times that it was “a done deal.” “I didn’t buy that,” she told HuffPost. One day on her porch last year, Lavigne says she prayed on what to do and she got a clear answer: Rise and act. So she did. She organized residents to protest the plant, starting at the parish council hearings last year. RISE St. James works to get churches and other residents involved in the fight against the region’s chemical plants. St. James lies in the middle of Louisiana’s petrochemical corridor, called “Cancer Alley” by many people in the state because of the emissions and pollutants released by the many industrial plants in the region. Anyone you speak to here has had cancer or knows multiple people who have died from cancer. One resident told HuffPost she personally knows 70 people in the area who have died from cancer. Parents say their children have trouble breathing and suffer from skin rashes and nose bleeds. Last month, Lavigne and her group participated in a three-day march through Cancer Alley to talk with residents and local and state representatives about stopping construction of new plants in the state and asking for stronger regulations on existing plants. .

$8B Petchems Project Slated for Gulf Coast - CP Chem and QP unveil plans for another world-scale facility, this time in the U.S.  During a White House ceremony Tuesday, officials with Chevron Phillips Chemical Co. (CP Chem) and Qatar Petroleum (QP) signed an agreement to jointly develop a petrochemical complex on the U.S. Gulf Coast estimated to cost $8 billion.According to a written statement from CP Chem, the planned U.S. Gulf Coast II Petrochemical Project (USGC II) will comprise a 2,000-kiloton-per-annum (KTA) ethylene cracker and two 1,000-KTA high-density polyethylene units. The company did not specify the site’s Gulf Coast location but noted that it will enjoy direct access to natural gas liquids from the Permian Basin.CP Chem added that it would own a 51-percent interest in USGC II, with QP owning the remaining 49 percent. The project reportedly would create approximately 9,000 construction jobs and roughly 600 full-time positions during operations.Tuesday’s announcement marks the second recent major collaboration unveiled by CP Chem and QP. As Rigzone reported in late June, the companies are developing another world-scale project in Qatar’s Ras Laffan Industrial City. “Qatar Petroleum is already a terrific partner of Chevron Phillips Chemical on petrochemical plants in Qatar and we look forward to expanding our relationship in the United States as we jointly seek to develop a new petrochemical facility along the U.S. Gulf Coast,” commented CP Chem President and CEO Mark Lashier. “Qatar Petroleum’s financial strength, its commitment to safety as a core value and shared belief in our strategy to build facilities located close to competitive feedstocks make this an ideal relationship.”

Chevron Phillips, Qatar Petroleum sign $8 billion petrochemical deal - (Reuters) - Chevron Phillips Chemical and Qatar Petroleum signed an agreement on Tuesday to develop an $8 billion petrochemical plant along the U.S. Gulf Coast, the second pact between the companies to build such plants in the last few weeks. The U.S. Gulf Coast II Petrochemical Project will include a 2,000 kilotons per year (KTA) ethylene cracker and two 1,000 KTA polyethylene units. The plant will mostly make hard plastics for everything from pill bottles to coolers to kayaks. Chevron Phillips Chemical, a joint venture of Chevron and Phillips 66, will be the majority owner with a 51 percent share, with Qatar Petroleum owning 49 percent of the project. The companies expect a final investment decision no later than 2021 for the project, which has a target of starting in 2024. Mark Lashier, chief executive and president of Chevron Phillips Chemical, said the plants would help fill demand for plastics from an expanding global middle class, which is expected to grow by about 160 million people per year for at least the next decade. Last month the companies announced they would build a petrochemical plant north of Doha in Ras Laffan Industrial City that will come on line by 2025 and tap Qatar’s North Field for natural gas feedstock. Qatar, a tiny but wealthy country, is the world’s largest exporter of liquefied natural gas (LNG). Qatar is broadening its energy interests after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed ties with it in 2017, in one of the worst diplomatic disputes in the region in years. The countries accused Doha of support for Islamist militants and Iran, charges it denies. In February, Qatar Petroleum and Exxon Mobil Corp said they are investing in a $10 billion project to expand an LNG export plant in Texas, as companies race to meet global demand for the fuel.

Why Build An Ethane Steam Cracker In A Time Of Low Ethylene Margins? -- The margin for producing ethylene by steam-cracking ethane has been less than a dime per pound since mid-March 2018, and less than a nickel for nearly nine of the past 15-and-a-half months. In fact, for two weeks last September, the ethylene-from-ethane margin fell below zero. And yet, a joint venture of two of the world’s savviest companies — energy giant ExxonMobil and petchem behemoth Saudi Basic Industries Corp., or SABIC — recently committed to building what will be the world’s largest ethane steam cracker: a 4-billion-pounds/year facility to be constructed near Corpus Christi by 2022. Is this a case of blind optimism? No, not when you factor in the cracker’s location, the JV’s concurrent plan to construct two polyethylene plants and a monoethylene glycol plant right next door, and the co-developers’ global market reach. Today, we discuss the thinking behind ExxonMobil and SABIC’s big investment in Texas’s San Patricio County.   Refinery retrofits to allow more light-sweet shale crude to be processed. Liquefaction plants and LNG export terminals — new crude and LPG export infrastructure too. A slew of new natural gas-fired power plants, accelerating the retirement of coal generators. And, as we’ve discussed at least a few times in the RBN blogosphere, a long list of new, mostly ethane-only steam crackers — almost all of them along the Gulf Coast — to take advantage of the humongous volumes of ethane and other NGLs emerging from wells in the Permian, Eagle Ford, SCOOP/STACK, Marcellus/Utica and other shale plays.  We’ve discussed the planning and buildout of a new generation of steam-cracking capacity in a number of blogs, including in our Ethane Asylum Revisited series. There, we explained that the now more than 40 stream crackers in the U.S. (capacity totaling 76 billion pounds/year as of May 2019) “crack” a variety of feedstocks (ethane, propane, butane, naphtha, gas oil) to produce ethylene as well as smaller volumes of propylene and other useful products. More than half of the plants are designed to crack specific feedstocks (mostly ethane or ethane and propane), while the others can switch between feedstocks to maximize their profitability — a function of the prices of feedstocks (ethane, propane, normal butane, etc.) and products (ethylene, propylene etc.), and the volumes of ethylene and other products that various feedstocks produce (see You're the One That I Want for more about petrochemical feedstock selection). All but a handful of these crackers are located along the Gulf Coast, in large part because of the region’s abundant and generally lower-cost sources of feedstocks and natural gas, its proximity to import and export terminals, and the fact that a number of key locations along the Gulf Coast sit above underground salt formations that could be — and in many cases have been — developed into huge storage tanks for both feedstocks and petchem products.  In Good Margin Gone Bad, which we posted soon after the ethylene-from-ethane margin fell below 10 cents/lb in March 2018, we noted that steam crackers make up about 60% of total U.S. NGL demand and 100% of domestic demand for ethane that is not “rejected” into natural gas. Therefore, high petchem margins are always a good thing for petchem companies and NGL producers — when the petrochemical industry is making lots of money, it buys more feedstocks, supporting NGL prices (and, with that, NGL producers).

Enterprise expanding oil exports and more along Houston Ship Channel - Houston's Enterprise Productions Partners said it will greatly expand its Houston Ship Channel terminals to export more crude oil, propane, butane and petrochemicals. Enterprise said it is concentrating the expansion at its Houston Ship Channel terminal south of Channelview, including the construction of an eighth dock to increase its crude oil-exporting capacity by nearly 45 percent from Houston. Enterprise also will greatly expand its liquefied petroleum gas export capacity - primarily butane and propane - and add new refrigeration storage capacity so it can ship out more propylene, which is the primary petrochemical building block of many plastics. This is all part of an ongoing build out of Enterprise's pipeline, storage, processing and exporting network that has rapidly expanded since the advent of the Texas shale boom. Enterprise has recently built massive crude oil and natural gas liquids pipelines stretching more than 500 miles from West Texas' Permian Basin to the Houston area. "Our integrated midstream system, including our Houston Ship Channel terminal, is providing Texas products with access to the highest value markets, including international markets," said Enterprise Chief Executive Jim Teague. Teague also credited a new Texas law recently signed by Gov. Greg Abbott to cap the number of larger cargo container vessels in the ship channel to ensure better two-way traffic. Enterprise wouldn't provide project cost estimates. The pipeline, processing and exporting firm is the second-largest company headquartered in Houston by Wall Street value, behind only ConocoPhillips. Enterprise also has rapidly expanded its storage and processing hub in Mont Belvieu, and now Enterprise is again adding to its export capacity along the ship channel. In a previously announced project, Enterprise is even planning to build an oil exporting hub offshore of the Texas Gulf Coast to accommodate the largest crude oil tankers from around the world. As for the new Houston Ship Channel expansion, Enterprise said it will add 840,000 barrels per day of crude-exporting capacity, increasing its total potential exports to 2.75 million barrels daily. The new dock will be able to accommodate Suezmax vessels, the largest ship class that can navigate the Houston Ship Channel, Enterprise added.

Permian Poised for Next Pipeline Wave -Thanks to growing production from the Permian Basin, another wave of new crude oil takeaway capacity will be needed by the end of the next decade, according to natural resources consultancy Wood Mackenzie. “As production growth expands well into the 2030s, U.S. Gulf Coast-bound pipeline capacity will tighten,” John Coleman, Wood Mackenzie principal analyst for North American crude markets, said in a written statement emailed Monday to Rigzone. “By the mid-2030s, Permian-to-Gulf Coast pipeline utilization will surpass 92 percent in the absence of further investment, necessitating pipeline expansions or greenfield capacity.” According to Wood Mackenzie, a “moderate overbuild of pipeline capacity” should occur early next decade as the current wave of pipeline projects conclude. By the end of 2022, midstream operators should add approximately 4 million barrels per day (bpd) of new capacity bound for the U.S. Gulf Coast, the firm stated. It assumes seven proposals for new Permian pipelines, with four reaching the final investment decision (FID) stage and 2 million bpd of the capacity flowing into Corpus Christi for export. Wood Mackenzie contends the new capacity should translate into “two to three years of overbuild.” Subsequently, it expects the need for additional pipeline infrastructure as “normal long-haul capacity supply and demand conditions” resurface. “We are in the midst of one of the largest crude infrastructure investment booms in U.S. history, with much of the investment focused on the Permian basin,” stated Coleman. “As massive as this current investment wave is, we don’t think the story is yet finished.”

Kyle adopts pipeline ordinance with new regulations for developers, Kinder Morgan - Kyle City Council approved an ordinance July 2 that will affect both pipeline companies hoping to route projects through Kyle—including the controversial Permian Highway Pipeline slated to be built through the city—and developers with projects near those future pipelines. Citing the city’s obligation “to protect the public health, safety, and welfare that can affect the risks associated with increased human activity in the vicinity of transmission pipelines,” the new rules require additional permits and fees in addition to prohibiting certain types of buildings near pipelines unless the City Council grants an exception.  The ordinance first appeared at a special council meeting May 14, where the four council members present voted to approve it. But when it was brought in front of the council at the regular May 21 meeting, Mayor Travis Mitchell asked to postpone the item. “We’ve had some questions brought up from some of the different developers in the community,” Mitchell said at the time, adding that the issues were related to how the ordinance might affect construction around existing pipelines. The Permian Highway Pipeline is a planned 42-inch oil and gas conduit under development by Kinder Morgan that will run through the Kyle on its way from the Permian Basin to the Gulf Coast. Officials in both the city and Hays County have vocally opposed the development for months, including filing a lawsuitagainst the Texas Railroad Commission—the government agency charged with regulating pipelines—and Kinder Morgan, which was just dismissed by a Travis County judge.

Earthquakes caused by industrial activities: what are the risks and how can they be reduced? - On September 3, 2016, a magnitude 5.8 earthquake struck just northwest of Pawnee, Oklahoma, causing moderate to severe damages in buildings near the epicenter . It was the largest ever recorded in the state. The Pawnee earthquake followed the dramatic increase of seismic events in the central United States beginning in 2009, associated with the increase of underground wastewater disposal byoil and gas operators . This and other events in the area raised public concerns and led governmental agencies to shut down injection wells and establish new regulations regarding wastewater injections . While human-caused earthquakes have been documented for more than a century, their increasing number reported worldwide has drawn much scientific, social and political attention . Such earthquakes are related to industrial activities such as mining, construction of water dams, injection of liquids such as waste water and carbon dioxide, and extractions associated with oil and gas exploitation. With the ever-increasing demand for energy and mineral supplies worldwide, the number of human-caused earthquakes is expected torise in the upcoming years . Some of the largest and more destructive earthquakes of the past few years have been related to man-made activities, such as the 2008 magnitude 7.9 Wenchuan (China) earthquake and the 2015 magnitude 7.8 Nepal earthquake . In most of the cases industrial activities do not induce earthquakes. But this becomes problematic when such activities are close to active faults. In this case, even small stresses underground caused by man-made activities can destabilise faults, inducing earthquakes.Such stresses, such as fluid injections, are even capable of migrating long distances in the planetary crust, can induce earthquakes days, months or even years after the injection.   In Europe, where the population density is higher than the United States, public concern over man-made earthquakes is greater. In thewell-known case of Basel, Switzerland , which took place in 2006, approximately 11,500 cubic metres of water were injected at high pressure into a 5-km deep well to make the extraction of geothermal energy possible. During the injection phase, more than 10,000 earthquakes were induced, including some strong events that were felt in Basel itself. These raised public concern and anger, leading to the termination of the project and to morethan $9 million on damage claims .

Is US Shale Cannibalizing Itself?  - U.S. oil production continues to grow, but the shale industry is in the midst of a deceleration as low oil prices and a financial squeeze slow the pace of drilling.  The U.S. added 246,000 bpd of fresh supply in April, the latest month for which data solid is available. That put to rest concerns that the industry was in the midst of contraction, after production fell in January and February (some of which was due to offshore maintenance). Even as the rig count continues to fall, production grinds higher. The EIA expects output to grow by another 70,000 bpd in July, with the Permian alone adding 55,000 bpd.But the rate of growth is slowing. In April, production was up 1.6 million barrels per day (mb/d) compared to the same month a year earlier. By any measure, that is a massive increase. But it is down sharply from the nearly 2.1 mb/d year-on-year increase seen in August 2018, which looks set to be the peak in terms of the pace of growth.U.S. oil production is not in danger of outright decline, not for the foreseeable future. But growth is clearly slowing. The U.S. could add 1.3 mb/d of new supply this year, according to an average of forecasts from multiple analysts, compiled by Reuters. That figure would be down from 1.5 mb/d of additional supply that came online in 2018.Financial stress is spreading, and top industry executives in Texas are arguably at their gloomiest in years. Consolidation and bankruptcies could pick up pace in the next few months, a bankruptcy attorney told Reuters. Investors have soured on shale drillers, closing the door on fresh capital injections. The “biggest impact has been the rapid and accelerating lack of investor interest in both conventional and unconventional oil and gas. The securities of oil and gas companies now sell at a fraction of what they once commanded. Huge losses in these shares hamper new exploration. It looks like another round of bankruptcies and mergers,” one oil executive said in a survey by the Dallas Federal Reserve in June. Most shale drillers are still not profitable.    To the extent that energy executives could make a compelling case to investors, much of it came down to the notion that costs decline over time, drilling techniques continue to improve, and companies could steadily increase the volume of oil and gas that they recover from individual wells. All of that added up to lower breakeven costs, more production, and – hopefully – profits somewhere down the line. This mantra kept skeptical investors on board, greenlighting the next tranche of capital that was injected into the ground. However, the tweaking of drilling techniques is not registering progress in the same way that the industry experienced in years past. Nor is the progress consistent with what companies have promised.

State regulators to revisit Line 3 environmental review; won't appeal court ruling - Minnesota regulators announced Wednesday that they will revisit their environmental review of the Line 3 pipeline project, rather than asking the state Supreme Court to take up the case. Last June, the state Public Utilities Commission approved Enbridge Energy's $2.6 billion plan to replace its aging Line 3 oil pipeline across northern Minnesota.But early last month, the Minnesota Court of Appeals reversed the PUC's approval of the project's environmental impact statement — a review of potential impacts the pipeline might have on the surrounding environment — saying it didn't adequately address the potential impact of a spill in the Lake Superior watershed.In its ruling, the appeals court determined the environmental impact statement needed to be fixed, and sent it back to the PUC to address the issue.At the same time, the court upheld the majority of the more than 3,000-page environmental impact statement, and rejected most of the arguments made by pipeline opponents, including their contention that the study didn't sufficiently assess the pipeline's impacts on climate change, and didn't adequately analyze possible harm to tribal and cultural resources. Opponents and supporters of the Enbridge Line 3 oil pipeline wait outside of the Minnesota Senate Building before a hearing in St. Paul, Minn. on Nov. 19, 2018. Evan Frost | MPR News 2018The PUC, Enbridge Energy and opponents of Line 3 involved in the appeals court case had until Wednesday to petition the state Supreme Court to review the ruling.PUC chair Katie Sieben said in a statement that the commission had decided to revisit the environmental review, instead of appealing the ruling to the state Supreme Court.

Keystone pipeline opponents again seek to block construction (AP) — Opponents of the Keystone XL oil pipeline asked a judge to again block construction of the $8 billion project after President Donald Trump issued it a new permit. Attorneys for environmental groups made the request Wednesday in a lawsuit before U.S. District Judge Brian Morris in Montana. They say Trump’s permit was illegal. The 1,184-mile (1,900-kilometer) pipeline proposed by TC Energy would carry crude oil from Canada to Nebraska. Opponents contend it would make climate change worse by increasing fossil fuel consumption. Morris temporarily blocked construction last year, saying officials had not fully considered oil spills and other impacts. That ruling was upheld on appeal, only to have Trump issue a new permit in March. Government attorneys say that permit is not subject to environmental laws. They want the lawsuit dismissed. 

'Protesters as terrorists': growing number of states turn anti-pipeline activism into a crime - From the Standing Rock camps in North Dakota to tree-sits in Texas, activists have attempted to stop pipeline construction with massive shows of civil disobedience. Now they could be forced to change those tactics, or face heavy penalties under a wave of new anti-protest laws that civil liberties advocates say violate the first amendment.Conservative lawmakers have put forward laws criminalizing protests that disrupt the construction and operation of pipelines in at least 18 states since 2017.

  • Seven states have passed laws that ratchet up the penalties for activists protesting or even planning protests of oil and gas pipelines and other “critical infrastructure”
  • At least six more states are considering such laws
  • In each case, misdemeanors are elevated to felonies, and criminal and civil punishments are escalated drastically
  • The ACLU and the Center for Constitutional Rights have mounted challenges against such laws in Louisiana and South Dakota.

“This is a trend that shows no sign of slowing, let alone stopping,” said Elly Page, who has been tracking anti-protest legislation for more than two years as a legal adviser for the International Center for Non-Profit Law.  The laws purport to only criminalize violence and property damage in service of pipeline safety, but critics say their greater intent appears to be to deter nonviolent civil disobedience by framing it as potentially violent in itself. The bills have mostly found fertile legislative ground in places where gas and oil companies already wield significant political and economic power and where anti-fossil fuel protests have been especially successful. But watchdogs say there’s every reason to believe more of these types of laws will be passed, and that they will chill activism otherwise protected by the first amendment. “This is a miscasting of protesters as economic terrorists and saboteurs when in fact they’re going out and having their voices heard about why these pipelines are problematic for their communities and the environment,” said Vera Eidelman, a staff attorney with the American Civil Liberties Union. “Even if folks haven’t been charged, the fact that these laws are on the books can seriously chill people and make them fearful of getting their voices out,” she added.

Trump plan to jail protesters: Justice or 'un-American'? -- Anti-pipeline activists knew they might go to prison when they broke into valve stations in 2016 and shut down five pipelines in a coordinated protest against climate change. But the activists, commonly called the "valve turners," netted a total of about six months in lockup. To the oil and gas industry and the Trump administration, that wasn't enough punishment. They think 20 years each would be a better fit. In a proposal to Congress last month, the administration recommended expanding criminal laws protecting pipelines to punish some civil disobedience, even if the act doesn't cause physical damage (Greenwire, June 3). The oil and gas industry has cheered the proposal, warning that "direct action" — like turning valves — risks spills, ruptures, explosions and other problems. "We need more of a deterrent effect," said John Stoody, an executive with the Association of Oil Pipe Lines. Federal law already authorizes prison terms of up to 20 years for damaging or destroying pipelines, but shutting them down in protest doesn't qualify if there's no damage. Existing law also doesn't cover lines under construction. To critics, the administration's wording is too broad and could criminalize peaceful, legitimate protest. The proposal would expand the definition of criminal activity to include "impeding, disrupting or inhibiting" operations. Pipeline opponents say a zealous prosecutor could decide that less-extreme protest techniques, like blocking construction trucks, fits that felony definition. "The Trump administration's PHMSA language and all these state bills are about one thing, and one thing only: chilling speech, stopping protest, and protecting oil and pipeline companies from the costs of project delays," Josh Axelrod of the Natural Resources Defense Council wrote in a recent blog post. "This is un-American." In calling for harsher penalties, the Trump administration is joining lawmakers in industry-friendly states who are trying to crack down on protesters who try to block pipelines. Some state-level efforts have gone beyond imposing consequences for individuals by also targeting organizations that promote and coordinate demonstrations (Energywire, April 24).

Oil well vandalized near Lake Texoma - The Army Corps of Engineers said an unknown amount of oil spilled into Lake Texoma 3,000 feet north of the Roosevelt Bridge. Environmental specialist with the Army Corps of Engineers, James Vincent, said the investigation is still ongoing and it’s suspected the oil well was vandalized. The well released oil and produced water, a term used to describe water as a byproduct along with oil and gas. “We believe that it’s still small to a moderate size release, and we also know that the release has been stopped by the oil and gas producer," Vincent said. The Oklahoma Corporation Commission said Godfrey Oil Properties owns the well and was quick to respond to the spill around 11 a.m. and are involved with the cleanup. Sarah Terry-Cobo with the Corporation Commission said the cleanup includes the usage of containment booms with white absorbent material to soak in the oil and hazardous material. “All of those things are removed, and sometimes are replaced several times to make sure they get as much crude oil as possible," Terry-Cobo said. Vincent said the environmental impact to Lake Texoma is minimal, but will ensure to the public a total recovery of the resources. “It has been reported to the National Response Center that’s operated by the U.S. Coast Guard. That’s one of our steps to show that we are doing a whole recovery," said Vincent. Parts of Lake Texoma are safe to swim, but it’s encouraged to avoid any oil sheens on the water and to report any sightings to the Army Corps of Engineers. The Marshall County Sheriffs will be investigating the damage done to the well.

US oil, gas rig count falls by 17 to 1,040 after holiday weekend: S&P Global Platts Analytics — The US oil and natural gas rig count dropped by 17 week on week to 1,040, S&P Global Platts Analytics said Thursday, as activity continued its seesaw trajectory following a national holiday. Rigs directed to oil saw an even bigger drop -- 20 to 828 -- while the number of gas rigs rose by four to 209. A one rig decrease was posted for rigs not classified as either oil or gas. Despite the overall drop in the rig count, the tally of private operators rose, according to Platts Analytics. That indicates that the privates are going ahead with the mid-year drilling budgets, helped by the recent uptick in crude prices that finally topped $60/b in recent days - although the rig increase was more likely due to the comfort zone that locked-in hedging levels provide. Click here for full-size image   Widespread flooding in Oklahoma and Texas may also have kept some rigs from taking to the field. But in general, the rig count may have found at least a bottom range, Platts Analytics said. Although the rig count has seen a zigzag pattern for the better part of a year that has gradually seen its numbers sift down from a mid-November 2018 high of 1,233, the count has been rangebound between a low of 1,040 -- a figure also seen three weeks ago -- and the mid-1,060s for nearly two months. Within the large domestic plays, the biggest weekly rig count movement came from the Permian Basin, which dropped six to 440.With about 4.2 million b/d of oil production, the Permian is the largest single crude provider in the US, and the second-biggest natural gas basin after the Marcellus Shale.Otherwise, most basins moved up or down a rig or two, or remained the same.Down two rigs apiece were the SCOOP-STACK plays of Oklahoma, at 83, and the Utica Shale of mostly in Ohio, at 17.Also down one rig each this week were the Denver-Julesburg Basin in Colorado, the Dry Marcellus, the Wet Marcellus, and the Williston Basin of North Dakota and Montana. The decreases left the Denver-Julesburg with 32 rigs, the Dry Marcellus at 28, the Wet Marcellus at 24 and the Williston at 60 rigs.The Eagle Ford Shale of South Texas added a rig this week to reach 82 rigs, while the Haynesville Shale of East Texas and Northwest Louisiana remained the same at 55 rigs. The "Other Basins" category also fell by four rigs, leaving a total of 219. Rigs working outside the eight large named basins are classified in that category.

Fracking on the move in California; Did not cause quake, CalTech seismologist states – Dr. Egill Hauksson, a seismologist at CalTech, said unequivocally that fracking had nothing to do with the magnitude 7.1 earthquake that struck on July 5. During a press conference on July 6, a reporter asked Hauksson, “Could fracking in Kern County have anything to do with these earthquakes?” Hauksson replied: “I think that’s — no. I think I can answer that — no. I don’t have to put a qualifier on that.” The seismologist said “There is a geothermal area at the very north end….That’s the coastal geothermal area where there’s a — very large energy production going on where they pump water into the ground to harness heat from the rock. But if they had had something to do with this, we would have expected the activity to maybe start much closer to the geothermal area and then emanate from there.” Hauksson went to say: “But again, the reason we have a geothermal field there is in part due to the active tectonics. It’s due to the ongoing geological deformation. So in that particular area the crust is being thinned and pulled apart so heat can easily rise from the interior of the earth, and we are able to harness that for electricity production.” The Trump administration moved forward in May with a plan to open up federal land in California’s Central Valley and Central Coast to more oil and gas drilling, including fracking. The Bureau of Land Management (BLM) Central Coast Office’s boundaries stretch across 11 California counties: Alameda, Contra Costa, Fresno, Merced, Monterey, San Benito, San Joaquin, San Mateo, Santa Clara, Santa Cruz and Stanislaus. The agency said in a press release that the plan could result in up to 37 new oil and gas wells drilling on new land leases over the next 20 years, primarily in Fresno, Monterey and San Benito counties. BLM estimates that the oil and gas industry directly supports 3,000 jobs and $623 million in tax revenue within those counties. Fracking is currently primarily used in California to enhance oil production in the San Joaquin Valley, home to some of the largest producing oil fields in the United States. The Western States Petroleum Association, an industry lobbying group, said environmental reviews prove that fracking is safe. Laws In Oil & Gas-Producing States Can Force Homeowners To Lease Underground Mineral Rights - 90.5 WESA

Chevron spills 800,000 gallons of oil, water in Kern County — California authorities said Friday that crews are beginning to clean up a massive oil spill that dumped nearly 800,000 gallons of oil and water into a Kern County canyon, making it larger — if less devastating — than the state’s last two major oil spills. The seep, which has been flowing off and on since May, has again stopped, said Chevron spokeswoman Veronica Flores-Paniagua. The last flow was Tuesday.She and California officials said the spill is not near any waterway and has not significantly affected wildlife. Chevron reported that 794,000 gallons of oil and water have leaked out of the ground where it uses steam injection to extract oil in the large Cymric Oil Field about 35 miles west of Bakersfield. The steam softens the thick crude so it can flow more readily and is a different process from fracking, which breaks up underground layers of rock. About 70% of the fluid is water, Chevron said, meaning about 240,000 gallons of the mixture is oil. Earlier this year, a judge fined Plains All American Pipeline nearly $3.35 million for causing what had been the worst California coastal spill in 25 years. A corroded pipeline spilled 140,000 gallons of crude oil in 2015 onto Refugio State Beach in Santa Barbara County, northwest of Los Angeles, tarring popular beaches for miles, killing wildlife and harming tourism and fishing. In 2007, the container ship Cosco Busan leaked nearly 54,000 gallons of heavy fuel oil into San Francisco Bay after the ship hit the San Francisco-Oakland Bay Bridge in thick fog. The state’s worst spill was the 1969 Santa Barbara oil spill that leaked at least 80,000 barrels of crude oil into the Santa Barbara Channel. Each barrel is 42 gallons.

US zeros Venezuela, Kuwait and Nigeria crude imports as Canada flows surge: EIA — Crude oil flows between the US and Canada continued at or near record levels this month, as US importers zeroed out all imports from Venezuela, Kuwait and Nigeria for the first time since the US Energy Information Administration began tracking import data. Overall, the US imported about 7.3 million b/d of crude oil for the week ended July 5, down from an average of 7.8 million b/d in 2018, but above the weekly import average of 7.08 million b/d so far in 2019, according to the EIA. Going by monthly data, the US has imported an average of 6.91 million b/d of crude this year, which, if holds, would mark the lowest annual import average since 1993. The US' annual import average peaked at 10.13 million b/d in 2005. The US imported no crude from Venezuela, Kuwait, and Nigeria last week, due to sanctions, the rise of domestic production and an increase in Canadian imports. US refiners have imported no Venezuelan crude for seven straight weeks and for 12 out of the last 17 weeks, according to the EIA. Imports of Venezuelan crude averaged 713,000 for the week ending September 28, 2018, the highest weekly average over the past year. The US imposed sanctions on PDVSA, Venezuela's state oil company, in January, effectively creating a de facto ban on US imports of Venezuelan crude. The US has not imported a Kuwaiti barrel for four straight weeks and has not imported Nigerian crude eight separate weeks over the past year, data shows. CANADIAN CLIMB While imports are in decline, US crude exports and imports to and from Canada have risen to historic highs. US imports of Canadian crude averaged 3.95 million b/d for week ending July 5, the second-highest weekly average ever and more than half the crude imported into the US last week, according to the EIA. US imports of Canadian crude hit a record earlier this year of over 4.06 million b/d for the week ending January 18. US exports of crude oil averaged 3.05 million b/d last week, down from a record 3.77 million b/d set two weeks earlier, according to EIA. US crude exports are on track to average nearly 2.9 million b/d this year, a nearly 1 million b/d jump from 2018. The US is shipping about 20% of its crude to Canadian refiners.

Plains proposes Canadian pipeline expansions to ultimately connect to Texas - Houston's Plains All American is proposing pipeline expansions in Canada, Montana and Wyoming that would ultimately connect to new pipeline systems to deliver more Canadian crude to Houston and the Texas Gulf Coast. The series of projects would offer more alternatives to deliver lighter-grade Canadian crude to Gulf Coast markets while other controversial projects such as the Keystone XL pipeline system continue to fight legal hurdles. Plains said Tuesday it wants to essentially double the capacity of its Rangeland Pipeline from Edmonton to the U.S. border and then also expand ts connecting Western Corridor pipeline system in Montana and Wyoming. The idea is that these more affordable expansions could ultimately connect to the $2.5 billion Red Oak Pipeline system that Plains and Houston's Phillips 66 announced in June that they would build from Oklahoma to Houston, Beaumont and Corpus Christi. "We remain focused on leveraging our existing systems in creative ways to meet the growing needs of our customers," said Tyler Rimbey, executive vice president for Plains in Canada. 

Canadian oil companies see output cuts easing as rail capacity grows - (Reuters) - Major Canadian oil companies, who publicly disagreed over the Alberta government’s forced curtailments this year, are in lock step over how to end the production limits, saying they should be eased as more rail capacity comes online. Senior executives from Suncor Energy, Canadian Natural Resources, Imperial Oil Ltd and Cenovus Energy said at a TD Securities investor conference in Calgary that they are in talks with Premier Jason Kenney’s Alberta government about how quickly to end the mandatory cuts.

Oil Sands Firms May Ship by Rail for Production Limit Increase -Canada’s oil-sands producers are offering to commit to shipping a certain amount of their crude by rail in return for the Alberta government raising their production limits. When Alberta introduced its curtailment policy last year as a glut weighed on Canadian oil prices, the government was counting on Enbridge Inc.’s expanded Line 3 pipeline coming into service late this year and providing enough space for producers to ship all of their output. That project was delayed amid permitting setbacks in Minnesota, leaving explorers increasingly dependent on shipping crude by rail. But the curtailment program boosted the price for their crude so much that it wasn’t economical for refiners to take deliveries of it by more-expensive rail. That has caused a large portion of Alberta’s rail-shipping capacity to be shut in. Though they didn’t provide details, the deal explorers outlined at the TD Securities Calgary Energy Conference on Tuesday would allow them to produce at full capacity and send all of their output to refineries even without new pipelines coming into service. “The problem right now has been that crude-by-rail has been relatively slow to ramp up,” Cenovus Energy Inc. Chief Executive Officer Alex Pourbaix told reporters on the sidelines of the conference. “What we’ve suggested is that government should consider modifications to the curtailment rules that would allow companies to overproduce their monthly commitments as long as they can demonstrate that that product is moving by incremental rail.” Alberta now has about 260,000 barrels of daily rail shipping capacity that’s sitting idle, Suncor Energy Inc. Chief Executive Officer Mark Little said during a panel discussion at the event, citing industry estimates and Genscape Inc. data. That’s more than the roughly 175,000 barrels of daily volume that has been held back as part of the province’s curtailment program, he said. “We’re within rounding distance of being able to literally get all of the production to market with the excess rail that’s available and get a fair price for it,” Little said. “That’s actually the objective the companies working together with the government are really focused on.”

 Tankers Change Names to Ship Venezuelan Oil to Cuba -- Stopping the flow of Venezuelan oil to its ally Cuba might prove harder than the U.S. expected. Tankers are being renamed and vessels are switching off their transponders to sail under the radar of the U.S. government. The vessel Ocean Elegance, an oil tanker that has been delivering Venezuelan crude to Cuba for the past three years, was renamed Oceano after being sanctioned in May. The ship S-Trotter, another one that’s on the sanctions list, is now known as Tropic Sea, according to data compiled by Bloomberg. The oil tanker Nedas, after being sanctioned in April, made a delivery to Cuba incognito because it turned off its satellite tracking system. It went unaccounted for 42 days, but shipping reports show that it delivered oil to Cuba. After the ghost delivery, it discreetly changed its name to Esperanza. The Nedas/Esperanza has delivered 2 million barrels of crude to Cuba this year, according to shipping reports. Halting the flow between the two countries may prove difficult. There are over 4,500 crude oil tankers in operation globally, and state oil giant Petroleos de Venezuela SA also uses oil products vessels, adding to the complexity of the task. Nevertheless, the U.S. continues to target shipments between the two countries and aims to close loopholes in sanctions, according to a senior U.S. administration official. The goal is to surgically and methodically cut off funds to the regime of President Nicolas Maduro. “The United States will continue to target entities involved in shipping oil between the two countries (Venezuela and Cuba) and aims to further cut off Maduro and his cronies’ access to funds derived from oil sales to Cuba,” National Security Council spokesman Garrett Marquis said by email. “Those who circumvent sanctions do so at their own risk.”

Power outage hits Venezuela’s largest refinery complex, says lawmaker - Venezuela’s largest refinery complex has been hit by a power outage, at a time of acute fuel shortages in parts of the crisis-torn oil producer, an opposition lawmaker said Sunday. Luis Stefanelli, a deputy in the National Assembly, told AFP there was a “general blackout” at the Amuay and Cardon refinery complex Saturday night. “Access to both refineries has been closed and they have been taken over by the National Guard and officials of the SEBIN intelligence service,” he said. “Some workers have been detained,” Stefanelli added. Despite having the world’s largest oil reserves, Venezuela has experienced growing fuel shortages as corruption, mismanagement and, more recently, U.S. sanctions take their toll on the oil industry. Power failures are common in Venezuela and have grown in frequency since March, especially in the interior of the country, which has also seen long lines at gasoline stations. State oil company PDVSA has made no comment on the situation, which Stefanelli said had left most of the Paraguana peninsula where the refineries are located without power. A Paraguana resident told AFP that telephone lines were down and surrounding areas “continue to be without light.”

Cuadrilla to restart fracking at site in Lancashire - The first company to drill for shale gas in the UK plans to restart fracking at its Preston New Road site in Lancashire in a last-ditch effort to convince policymakers to relax safety rules.Cuadrilla will drill a second well near Blackpool after it was forced to abandon the first, which caused multiple earth tremors.It plans to remobilise its drilling and fracking equipment within the coming months to test gas flows from the site before its permission expires in November.Francis Egan, the company’s chief executive, plans to use the data to convince the government and regulators to loosen the safety rules that have slowed the progress of the UK shale industry. He said the work could help to make a case for the UK’s controversial shale ambitions by proving that the Bowland Shale region offers a “hugely exciting opportunity for the UK”. Cuadrilla has struggled to convince the public among growing opposition to shale gas exploration and protests by environmental campaigners. Fracking involves pumping high-pressure water, sand and various chemicals into tightly packed shale rock formations. The process fractures the rocks and releases the gas contained within the shale layers.Egan said it was no secret that Cuadrilla had asked for the “exceedingly low” tolerance for earth tremors to be lifted.“It remains the case that we are the only UK operator currently able to move forward and provide more data to support an expert review of this threshold – and we intend to do so,” he saidIneos, the chemicals giant owned by the billionaire Sir Jim Ratcliffe, has an extensive portfolio of shale sites across North and South Yorkshire, the East Midlands and Cheshire. However, Britain’s richest man has been unable to move ahead with plans for Ineos to become the UK’s largest fracking firm because of opposition from local councils.

Fracking ban in Republic 'null and void' if there is drilling in Fermanagh -  A fracking ban in the Republic introduced two years ago will effectively be rendered “null and void” if Northern Ireland authorities grant permission for drilling in Co Fermanagh, campaigners claim. “It might as well be happening in Sligo and Leitrim, ” according to Jamie Murphy of the Love Leitrim campaign group. “Rossinver in Leitrim is a few minutes away from Garrison in Fermanagh.” In September 2016, Tamboran Resources UK applied to Northern Ireland’s department of the economy’s minerals and petroleum branch for permission to begin fracking across 608sq km in southwest Fermanagh. Love Leitrim, Leitrim County Council and hundreds of other campaigners in the Republic have made submissions opposing the licence ahead of the deadline for submissions on Friday. In its submission Leitrim County Council voiced “fundamental opposition” to the plan, saying it will have “lasting adverse consequences” for the county’s environment and the health of people living there. Shale gas extraction “risks contaminating ground water”, the local authority said. Tamboran’s proposed drilling site is close to both Lough Macnean and Lough Melvin. In its submission Love Leitrim said Tamboran’s application should not even be considered by the North’s department of the economy because the application claimed to cover exploratory drilling only but would in fact clear the way for full-scale production. Mr Murphy said the fact the North remained without a functioning Stormont assembly and Northern executive made matters more difficult “because we are dealing with faceless civil servants”.

U.S. oil makes it to Ukraine in another blow to Moscow - (Reuters) - U.S. crude exports are gaining traction in Europe as even Ukraine turns into a significant consumer of American barrels at the expense of Russian supplies amid heightened U.S. political pressure on Moscow and problems over contaminated Russian oil. Ukraine this month received its first ever barrels from the United States, according to Refinitiv Eikon flows data, as the tanker Wisdom Venture unloaded 80,000 tonnes of Bakken crude in Odessa on July 6 for the Kremenchug refinery, the port said. The oil was sold by BP (BP.L) to Ukrtatnafta, sources said, adding Ukrtatnafta will receive a further similar amount of U.S. crude around July 24, and more purchases were likely in August. “The Ukrainian oil industry is set to rise from the ashes with its new president (Volodymyr) Zelenskiy, so it’s an obvious new market for the United States, though the price matters,” a trader in a European oil major said. Ukraine’s oil sector, formerly mostly operated by Russian companies, has struggled since geopolitical tensions between the countries escalated in 2013-2014. Since then most of the country’s refineries have remained closed and the only oil supplied to Odessa is Azeri Light, sourced by Azerbaijan’s SOCAR. Since January 2019 it has supplied 320,000 tonnes, Refinitiv Eikon flows data shows. U.S. oil has yet to become a common feedstock for European buyers, who complain about volumes and varying quality, but recent market changes have shown American barrels can be a reliable alternative, traders said. The crisis that erupted at the end of April over contaminated Russian oil delivered through the Druzhba pipeline caused buyers to look for alternatives. “Refiners who were solely reliant on Druzhba supplies have been forced to test alternatives and could easily make these their new baseload barrels given the contamination issue has taken so long to sort out,” said Matthew Holland at Energy Aspects. As a result, U.S. supplies to Europe have risen steadily since May and have remained above 2.5 million tonnes a month.

Here's Putin's Answer To The U.S. Shale Boom - Last week saw Japan’s Mitsui and Japan Oil, Gas and Metals National Corporation agree to buy a 10% stake in Novatek’s Arctic LNG (liquefied natural gas) 2 project for an officially undisclosed price, although Russia’s President Vladimir Putin independently stated that the investment would be around US$3 billion. The fact that Putin himself commented on the deal underlines how important the exploration and development of the Arctic region is for the Russian state as a source of potentially vast new oil and gas resources and the accretion of further geopolitical influence, akin to the game-changing shale industry for the U.S.. Russia’s current development of the Arctic region is centered around the Yamal Peninsula and led principally Novatek but further developments are in the offing from Gazprom and Gazprom Neft, even in the face of current and future U.S. sanctions.  Novatek’s main Arctic project, the Yamal LNG (unofficially referred to as ‘Arctic 1’) last week announced that it produced 9.0 million tons of LNG and 0.6 million tons of stable gas condensate in the first half of this year, with all three LNG trains running above the 5.5 million tons per annum (mtpa) nameplate capacity over that period. This resulted in 126 LNG tanker shipments being dispatched in the six month period via trans-shipment from the ice-class LNG carriers to conventional vessels in Norway and delivered onto the global markets, mostly to Russia’s key target markets in Asia. Overall, the Yamal LNG project consists of a 17.4 mtpa natural gas liquefaction plant comprised of three LNG trains of 5.5 mtpa each and one LNG train of 900 thousand tons per annum, utilising the hydrocarbon resources of the South-Tambeyskoye field in the Russian Arctic.  “Additionally supportive of success for further developments is that the Arctic is an absolute priority for the government, aimed at bringing Russia’s LNG standing in the world market into line with its status as a global gas superpower, as its LNG capability has always been way behind what its gas production power would warrant,” he said. In this context, U.S. sanctions imposed after Russia took over Crimea in 2014 only made Putin more determined that the Arctic LNG program would not fail. Moscow not only initially bankrolled Yamal LNG from the beginning with money directly from the state budget but also later in 2014 supported it again by selling bonds in Yamal LNG (the program began on 24 November 2015, with a RUB75 billion 15-year issue). It further provided RUB150 billion of additional backstop funding from the National Welfare Fund.

Russia's Dirty Oil Crisis Leaves Pipe Giant Scarred-- As the biggest disruption to Russian oil flows in decades draws to a close the country’s European market looks remarkably unscathed, but its pipeline operator bears a few scars. For Transneft PJSC -- the giant company that runs enough pipes to wrap five times round the Earth -- the worst didn’t happen. There’s little sign that buyers are turning away from Russian crude, despite the crucial Druzhba supply network being shut down for weeks by chemical contamination. Yet the relief of retaining customers will be tempered by large compensation claims yet to be resolved, and potentially costly changes happening in Transneft’s domestic operations. The Druzhba incident “exposed weak links in the Russian oil transportation system,” said Vitaly Yermakov, senior research fellow at the Oxford Institute for Energy Studies. The way Transneft responds “will become a litmus test” for the company and Russian energy regulators, he said. The Druzhba crisis started small, with warnings in April about high levels of organic chlorides in Belarus’s portion of the pipeline. But it rapidly morphed into an international incident. It emerged that Russia, which has always prided itself on being a reliable energy exporter to Europe, had pumped millions of barrels of tainted oil to customers. The mistake brought the country “very serious damage” economically, financially and in terms of public image, according to President Vladimir Putin. “It’s the first time we are facing such a situation,” Transneft spokesman Igor Dyomin told Bloomberg. “It’s still too early to make any wrap-up analysis but we’ll definitely do it.”

Growth in Argentina’s Vaca Muerta shale and tight gas production leads to LNG exports -- Argentina’s domestic natural gas production has been rising steadily in the past three years, largely because of increasing production from the Neuquén Basin’s Vaca Muerta shale and tight gas play. Production from Vaca Muerta surpassed 1.0 billion cubic feet per day (Bcf/d) in December 2018. As production has grown, Argentina has resumed exporting natural gas by pipeline to neighboring Chile and Brazil and has started exporting liquefied natural gas (LNG). Argentina’s first LNG export cargo was shipped on June 6 from the offshore Tango floating liquefaction unit (FLNG). The growth in Argentina’s shale and tight gas production has partially offset declines in its natural gas production from mature fields. Production from Vaca Muerta accounts for about 23% of Argentina’s total gross natural gas production. The Vaca Muerta shale formation has technically recoverable resources of 308 trillion cubic feet of natural gas and 16 billion barrels of oil and condensate within 8.6 million acres, and it is geologically comparable to the Eagle Ford shale play in southern Texas. Only 4% of Vaca Muerta’s acreage has entered the development phase so far. Argentina’s domestic natural gas production exceeds consumption during warmer months (October through April), but production is insufficient to meet demand during colder months (May through September), which requires Argentina to import natural gas by both pipeline and as LNG. Because Argentina doesn’t have geologically suitable formations to serve as large-scale natural gas storage facilities, natural gas producers have to shut in surplus production to accommodate seasonal consumption patterns. Argentina is conducting feasibility studies to identify potential natural gas storage sites. From 1990 through 2007, Argentina was a net exporter of natural gas. Since then, Argentina has been importing more natural gas both by pipeline (mainly from Bolivia) and as LNG. Argentina imports LNG using a floating storage and regasification vessel (FSRU) moored at the Escobar port near Buenos Aires.

Nigeria oil pipeline fire in Lagos kills two after vandalism - Two people died after a gasoline pipeline owned by Nigeria’s state oil company exploded in an area of Lagos, the commercial capital, the National Emergency Management Agency said.The fire, which began in the early hours of Thursday, was later contained and extinguished while the pipeline was closed for repairs, the Nigerian National Petroleum Corp. spokesman Ndu Ughamadu said by phone from Abuja, the capital.As many as 30 vehicles were burnt, Lagos-based Punch newspaper said, citing the emergency team.

Shell under fire over effect of Bonga oil spill on 170,000 fishermen --The Royal Dutch Shell has come under criticism as a group, Oil Spill Victims Vanguard, OSPIVV, on Thursday said over 170,000 fisher-persons, as well as 350 communities along the coastlines between Bayelsa and Delta States, were negatively impacted by the 2011 Bonga oil spill in Nigeria. OSPIVV Executive Director, Harrison Jalla made the assertion at a press conference held in Effurun, Uvwie Local Government Area, disclosing that the communities were impacted when Royal Dutch Shell and its subsidiaries (Shell International Trading and Shipping Company, SNEPCO) out of alleged gross negligence in their Bonga Field operations discharged over 40,000 barrels of crude oil into the Atlantic Ocean. “The pollution from the discharge which covered a distance of over 185 kilometres along the Nigeria Coastline compelled Fisher persons to desert the sea, polluted farmlands, vegetation and contaminated the environment in Ekeremo, Southern Ijaw and Brass Local Government Areas of Bayelsa State. “While in Delta State, Warri South-West, Warri South, Warri North, BURUTU and some Riverine areas in Ondo.” Jalla however expressed confidence that he will be victorious in the suit he filed against Royal Dutch Shell and its subsidiaries (Shell International Trading and Shipping Company, SNEPCO). Jalla had dragged the Royal Dutch Shell and its subsidiaries since 21st September 2017 before an English Court through his lawyers, John&Steller Solicitors of Hanover Square Mayfair London. He is seeking for benefits of individual claimants and communities negatively impacted by the Bonga Spill by the Bonga Oil Spill of December 20th, 2017. Jalla is praying the English Court to compel Royal Dutch Shell and its subsidiaries to do the clean-up, rectification, restoration, compensation and damages occasioned by the negative impact of the December 20th, 2011 and having adduced our evidence, said, “We are sure of victory”.

KPC moves to investigate oil spill as encroachment bites - Kenya Pipeline Company (KPC) will outsource the services of a contractor to investigate the cause of the recent oil spill in Kiboko, Makueni county, the management has said, even as it remains concerned over encroachment on its land. Chairman John Ngumi on Tuesday told journalists in Nairobi the tendering process will commence “soon”, to find the suitable individuals for the audit of the new Mombasa-Nairobi pipeline. The 450km Mombasa-Nairobi Pipeline, operationalised in July last year, developed leakage problems barely a year after it began moving petroleum products from Mombasa to Nairobi, a move that has raised questions over the quality of work. Line 5, as it is commonly known, was developed by Lebanese-Zakhem Construction through a Sh48 billion tender. Oil spillage hit Kiboko natural springs along the new pipeline on March 30. According to Ngumi, KPC will commission two types of audits-a contractual audit and an inline audit, which will involve a technical aspect of testing the pipe from Mombasa all the way to Nairobi. “An instrument will be placed in the pipeline which will analyse the quality, corrosion and identify whether there is a leakage,” Ngumi said at the KPC headquarters, “This will determine whether we have what was meant to be delivered. As at the moment, we don’t know what happened.”

Penguins rescued in Algoa Bay oil spillageSouth African National Parks marine rangers have managed to rescue four oiled penguins following this weekend's oil spill off the Port of Nquga in Algoa Bay. This follows an incident that occured in the early hours of Saturday morning, where approximately 200 to 400 liters of fuel was spilled into the sea as a result of overflow during an oil transfer.SANParks spokesperson, Fayroush Ludick, says rangers had initially observed six penguins on St Croix but only managed to catch four, while two more were oil covered penguins were seen on Bird Island. She says four of the birds have since been handed over to the animal rescue and rehabilitation organization SANCOBB and that its a matter of waiting for favourable weather conditions to try and recover the other oiled birds. The Eastern Cape Manager of SANCOBB Stacey Webb - says there is the possibility that more birds were affected as the oil spill occurred while they were off Bird Island and St Croix Island feeding. She says they'll be monitoring the Bay's penguin population closely over the next few days.  "Three of them have 90% of their bodies covered in very thick black oil. One of them is 75% covered. It depends on the amount of oil they have ingested. They are strong birds and we hope they will be OK," Webb said.

 Bunkering services oil spill in Port Elizabeth under investigation  -The South African Maritime Safety Authority (SAMSA) over the weekend said that an investigation is underway to establish the cause of the oil spillage incident during a bunkering service off the port of Ngqhura near Port Elizabeth on Saturday morning. This follows confirmed reports of an oil spillage at sea while a trade vessel was being refuelled. It was reported that as much 200-400 litters of fuel spilt into the ocean. However, the bunkering services company involved, SA Marine Fuels, soon activated an oil spillage control exercise to contain its spread on water. A Department of Environmental, Forestry and Fisheries’ statement on Saturday said the vessel involved was the Liberia flag carrying trade ship known as the MV Chrysanthi S. The department said it had been “notified of an oil spill that took place in Algoa Bay in the early hours of Saturday. The incident took place at approximately 04h40 (in the) morning during offshore bunkering operations in Anchorage 1 of the Port of Nqura.“It was reported that approximately 200 to 400 litters of fuel from the receiving vessel MV Chrysanthi S, flag state Liberia, was spilled into the sea as a result of overflow during the fuel transfer.  SA Marine Fuels proceeded to dispatch a commercial oil spill response service provider to mitigate and contain the spread of the spill.“This incident is currently considered a Tier 1 level incident which does not require intervention from the national authorities as local resources are sufficient. The department will provide assistance if the incident escalates and requires it.”

 Refuelling under scrutiny as S.Africa penguins hit by oil spill - Rangers in wet suits have been searching for oil-tarred penguins in shallow water around St Croix Island off the South African coast as a refuelling spill highlights conservationists' fears over pollution. Experts said an unknown number of penguins had been affected on the rocky, uninhabited island, which is home to the largest breeding colony of endangered African penguins in the world. A Liberian-flagged ship spewed between 200 and 400 litres of oil into the sea off Port Elizabeth city during "bunkering" re-fuelling -- the process of filling a ship with fuel from another vessel. The small-scale leakage from the bulk carrier MV Chrysanthi vessel at dawn on Saturday was the second oil spill in the environmentally-sensitive area in three years. "This is exactly the concern with offshore 'bunkering' that we have been voicing concerns about," Stacey Webb, of the Southern African Foundation for the Conservation of Coastal Birds (SANCCOB) charity, told AFP. "The danger is not over yet. Penguins forage up to 100 kilometres (60 miles) away from the islands (St Croix Island and Bird Island) so they could run into the spill out at sea." About 20 penguins covered in black sludge have been rescued by national parks rangers so far. The weekend spill follows one in August 2016 when about 100 birds were affected by a smaller "bunkering" spill. "Bunkering" only started in Ngqura port, part of Algoa Bay, in 2016, with the shipping industry promoting it as an economic boost for the area. Plans to develop the bay into a major re-fuelling hub for international vessels have generated widespread controversy, with conservationists and the tourism sector saying the risk of pollution is too high.

 MV Takana spills oil - Reports and pictures supplied to the Solomon Star alleged the oil spill from the abandoned vessel that sunk last month at Star Harbour is now spilling hazardous oil to the environment. Some pictures provided shows coral reefs covered with brownish colour of thick oil leakage from the vessel. Director of Solomon Islands Maritime Authority (SIMA) Jonah Mitau told the Solomon Star earlier that they will investigate the wreck and see if any danger associated with the environment. But yesterday Mitau told the Solomon Star that SIMA is yet to visit MV Takana due to commitment on Rennell oil spill disaster. He said their officers are yet to complete a full report on the Rennell oil spill, therefore would not able to investigate MV Takana. He said hopefully they would able to complete their report on Rennell next week and may have time to visit MV Takana, if the oil spill there truly occurs. The constituency vessel was left abandoned by out going Member of Parliament (MP) for East Makira Alfred Ghiro and remain floating there until it drifted and overturned in the coastal waters.

China refiners curb fuel output after massive new plants stoke glut (Reuters) - China’s fuel producers are making extended curbs to their output in the third quarter after supply from mammoth new refineries stoked an already-sizeable glut, potentially dragging on crude oil demand from the world’s biggest importer of the commodity. Private refiner Hengli Petrochemical (600346.SS) ramped up its 400,000-barrels per day (bpd) plant in northeast China to full capacity in May, while Zhejiang Petrochemical began trial runs around the same time at a similar-sized refinery on the east coast. In the wake of that wave of fresh supply and amid slowing local demand for fuels such as gasoline and diesel, refiners are cutting their crude processing, or throughput, industry sources and analysts said. That drop should sap their appetite for crude imports, pulling down on international oil prices LCOc1 that have already been hit by fears over a slowing global economy. The swollen surplus of fuel products could also send China’s fuel exports surging to new highs and further pinch Asian refining profits. “For markets that are already consumed with fears about a global recession ... headline numbers of oil demand growth slowing alongside talk of run cuts seem to reinforce a bearish narrative,” 

Hedge funds sell crude as economy fears trump OPEC cuts Hedge (Reuters) - Hedge funds sold more Brent futures and options last week as concerns about the global economy trumped the decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies to extend output cuts. Hedge funds and other money managers sold another 7 million barrels of Brent derivatives in the week to July 2, according to position data published by ICE Futures Europe. Portfolio managers have now sold a total of 158 million barrels over the last eight weeks, after previously buying 270 million barrels since Dec. 4 ( Funds hold a net long or bullish position of just 248 million barrels, which is relatively low compared with the average of 359 million over the last four years. For the moment, the slowdown in global manufacturing and trade, and the associated hit to oil consumption, is upstaging OPEC’s decision to extend production limits for an extra 9 months until March 2020. In contrast, fund managers are becoming slightly less bearish towards middle distillates such as European gasoil, which had previously been hardest hit by slowdown fears. Funds were net buyers of 5 million barrels of gasoil futures and options contracts last week, after buying 3 million the week before, signalling the recent distillate liquidation cycle may be over.

 Brent Short-Selling at 5-Month High - Hedge funds are growing more pessimistic about oil prices as sentiment on the global economy sours. Money managers pushed bets on a decline in Brent crude prices to the highest since mid-January in the week ended July 2, according to data released Friday. It was another sign of waning faith in a week that saw prices drop amid a host of sluggish reports on global manufacturing. That overshadowed a deal by OPEC and its allies to extend supply cuts. Short-selling bets on Brent climbed by 1.5%, according to the ICE Futures Europe exchange. The net-long position -- the difference between wagers on a price increase and those on a decline -- fell 2.7% to 248,006 options and futures contracts, the least bullish since February. The release of data on West Texas Intermediate crude positions was postponed until Monday, due to the July Fourth holiday in the U.S.

Oil prices tread water as market eyes global risks - Crude prices were little changed on Monday as traders weighed geopolitical risks against the impact of the Sino-U.S. trade war on the global economy, although last week’s better-than-expected U.S. jobs data offered some support. Brent crude futures were down 3 cents by 0300 GMT at $64.20. U.S. West Texas Intermediate (WTI) was up 6 cents at $57.57 a barrel.  “Traders remain incredibly cautious about the dimmer global economic overhang.” Both oil benchmarks fell last week as concerns about a slowing global economy outweighed risks to supply. Brent fell more than 3% and WTI shed more than 1.5%. U.S. job growth rebounded strongly in June, with government payrolls surging, the Labor Department’s closely watched employment report showed on Friday, suggesting May’s sharp slowdown in hiring was probably a one-off. Employers added 224,000 jobs last month, the most in five months, the report showed. But the U.S.-China trade war has dampened prospects of global economic growth and oil demand. The lack of concrete progress in resolving the acrimonious trade war between the United States and China, however, means the bar could be very high for the U.S. Federal Reserve not to lower borrowing costs at its July 30-31 policy meeting. White House Economic advisor Larry Kudlow has confirmed top representatives from the United States and China will meet in the coming week to continue trade talks. Still, Japan’s core machinery orders fell for the first time in four months in May, posing the biggest monthly drop in eight months in a worrying sign that global trade tensions are taking a toll on corporate investment. Oil received some support from simmering tensions over Iran and after an extension last week to output cuts by OPEC and its allies. Iran said on Sunday it will shortly boost its uranium enrichment above a cap set by a landmark 2015 nuclear deal, prompting a warning ‘to be careful’ from U.S. President Donald Trump, who pulled out of the pact last year.

Oil Prices Edge Up In Cautious Trade - Oil prices rose on Monday, although the upside remained capped by renewed concerns about a slowing global economy. Benchmark Brent crude edged up 0.25 percent to $64.38 a barrel while U.S. West Texas Intermediate (WTI) futures were up 0.1 percent at $57.55 a barrel. Prices remain somewhat supported by robust U.S. jobs report released last week and a flare up in geopolitical tensions. The latest jobs report showed that U.S. employment surged up by 224,000 jobs in June, the most in five months, after a gain of 72,000 jobs in May. Economists had expected employment to increase by about 160,000 jobs. Geopolitics continue to remain in focus after Iran said on Sunday it would boost its uranium enrichment, in breach of a cap set by a landmark 2015 nuclear deal. The announcement prompted a warning 'to be careful' from U.S. President Donald Trump, who pulled out of the pact last year. On the flip side, the lack of concrete progress in resolving the acrimonious trade war between the United States and China has dampened prospects of global economic growth and oil demand. As top U.S. and Chinese officials organize a resumption of talks for this week to try to resolve a year-long trade war, Chinese Vice President Wang Qishan warned against "protectionism in the name of national security", and called major powers to make more contributions to global peace and stability. 

U.S. oil prices end higher as threat of Washington-Tehran conflict grows - Oil futures diverged Monday, with U.S. prices up a third straight session while global benchmark Brent finished lower, as tensions with Iran, and the possibility of disruptions to oil flow in the Middle East, increased. Concerns surrounding energy demand, however, lingered. Geopolitical tensions with Iran have heated up, while oil demand expectations seem to be coming down, said Phil Flynn, senior market analyst at Price Futures Group. August West Texas Intermediate crude edged up by 15 cents, or 0.3%, to settle at $57.66 a barrel on the New York Mercantile Exchange, posting a gain for a third consecutive session. The contract lost 1.6% for last week, according to Dow Jones Market data. International benchmark September Brent lost 12 cents, or 0.2%, to $64.11 a barrel on ICE Futures Europe. Brent declined 0.8% for last week.Iran is claiming that it is enriching uranium above the levels agreed to in the Iran nuclear deal, said Flynn, in daily commentary. “They are also threatening retaliation for the U.K. taking an Iranian oil tanker [last week]. They have threatened to seize U.K. ships and turn the Persian Gulf into a sea of blood.”  Iran’s Foreign Ministry spokesman Abbas Mousavi called the seizure of the Iranian supertanker “piracy,” but stopped short of suggesting Iran take actions against ships transiting through the Strait of Hormuz, the Associated Press reported Monday. The Strait is the world’s most sensitive oil-transportation choke point. “Iran’s violation of the [nuclear] agreement could now prompt Europe to impose sanctions on Iran, too. For example, the EU could impose an oil embargo on Iran, as it did between 2012 and 2015,” said Carsten Fritsch, energy analyst with Commerzbank. “This would have no direct impact on Iranian oil exports as Europeans have in any case not bought any Iranian oil since the end of 2018 because of the U.S. sanctions; this is presumably one reason for Iran’s dissatisfaction and for the aforementioned ultimatum.”

Persian Gulf Conflict Could Send Oil Beyond $325 -- If attacked by U.S. and allied forces, or if it believes an attack is imminent, Tehran may choose to launch airstrikes and missiles on American military forces and regional allies such as Saudi Arabia and the UAE while it still has the capability to do so. This ‘use them before you lose them’ strategy would largely be based on Saddam Hussein’s experience in Iraq. The impact of a closure of the Strait of Hormuz on global crude prices obviously depends on the amount of oil kept off the world market on a daily basis and the duration of the disruption. Based on the discussion in the previous section, we explore two scenarios that relate directly to the Strait of Hormuz, and a third one that includes a Persian Gulf War. In the Optimistic Scenario, where the Strait of Hormuz is only closed to commercial traffic for a few days, the impact on global oil supplies would be relatively minimal, but we would still see a brief spike above $100 per barrel due to the initial uncertainty surrounding its outcome. Crude prices would then quickly fall back to pre-crisis levels.  The flow of 20.7 million b/d of crude and petroleum product would be curtailed if the Strait of Hormuz is fully closed, but this would be mitigated by almost 4 million b/d of crude being shipped on currently spare pipeline capacity across Saudi Arabia to Red Sea export facilities and the Abu Dhabi Crude Oil Pipeline bypassing the Strait of Hormuz.  Under the Pessimistic Scenario, the world’s oil emergency response system would be taxed to its maximum in the first two months of the crisis – assuming the Strait of Hormuz is fully closed for the first 45 days, and a straight line resumption in oil tanker traffic over the next 45 days – leading to historically high crude oil prices on an inflation-adjusted basis for an extended period. Global strategic oil reserves would be more than enough to cover the shortfall in an overall sense, with 40 percent of the 1.9-billion-barrel total remaining post-crisis, but the rate of daily withdrawal from strategic reserves would pose a challenge. Previous studies suggest that a maximum of 14.4 million b/d of crude and product could be released from the International Energy Agency (IEA) member country reserves in the first month and roughly 12.5 million b/d in the second month, compared to disruptions of 16.9 million b/d and 15.5 million b/d, respectively, based on our assumptions. Finally, in a Doomsday Scenario, where there is significant damage to Persian Gulf oil-producing and export infrastructure as well as a three-month closure of the Strait of Hormuz, crude oil prices would rocket into the stratosphere. They would not begin to fall back until the global economy collapses into deep recession. A direct hit on Saudi Aramco’s Abqaiq oil processing facility alone could deprive the world market of 7 million b/d for a year or more as the plant is repaired.The impact of this and other Persian Gulf production losses could be mitigated somewhat by the remaining 40 percent of the world’s strategic reserves, as well as 200 million b/d of crude that Saudi Arabia holds in reserve at home assuming Saudi export facilities remain relatively intact.

Oil rises towards $65 as supply concerns outweigh trade disputes - Oil rose towards $65 a barrel on Tuesday as OPEC supply cuts and Middle East tensions outweighed the U.S.-China trade dispute that has been dragging down the global economy and oil demand. OPEC and its allies led by Russia agreed last week to extend their supply-cutting deal until March 2020. Brent has risen almost 20% in 2019 supported by the pact and also tensions in the Middle East, especially concerns about the row over Iran’s nuclear program. Brent crude, the global benchmark, rose 33 cents to $64.44 a barrel. U.S. West Texas Intermediate crude was up 26 cents to $57.92. “OPEC and its allies are doing their best to support the market,” said Tamas Varga, an analyst with PVM. “Oil prices are to hold up reasonably well during coming months or at least they are not to fall out of bed.” Rising tensions between Iran and the United States have brought the two countries close to conflict. Last month, President Donald Trump called off air strikes at the last minute in retaliation for Iran shooting down a U.S. drone. The European Union on Tuesday urged Iran to reverse its scaled up uranium enrichment that breaches a nuclear deal it agreed in 2015 with world powers. Washington withdrew from the accord last year and re-imposed sanctions. Oil also gained support from reports expected to show a drop in U.S. crude inventories.

Middle East Tension Boosts Oil Prices - Oil prices edged up at the start of the week due to the OPEC+ cuts and rising U.S.-Iran tension. Trade and economic concerns continue to keep prices in check, however.  Iran said that it exceeded the 3.67 percent uranium enrichment level laid out in the 2015 nuclear deal, and in recent days exceeded 4.5 percent. Iran said that it would continue to pull out of parts of the accord on an ongoing basis until Europe delivers on some of the benefits laid out in the accord. The decision will increase tension with the U.S. and put pressure on Europe to carry out its promises to Iran. But it may also push Europe away and it increases the odds of punitive action from the EU.Russian oil production fell to athree-year low at the start of July, the result of lingering effects from the pipeline contamination crisis. “The Russian story definitely supports prices today. Market participants remain concerned that Russian compliance could deteriorate again, and lower Russian output together with elevated compliance from OPEC nations should rebalance the oil market faster,” said Giovanni Staunovo, oil analyst for UBS, according to Reuters.China’s refiners are cutting runs after a wave of new refineries came online and created a glut of supply. Tepid demand is also exacerbating a fuel surplus. As a result, China’s oil imports could stagnate, a negative for the global oil market. “For markets that are already consumed with fears about a global recession ... headline numbers of oil demand growth slowing alongside talk of run cuts seem to reinforce a bearish narrative,” said Michal Meidan, a London-based analyst at Energy Aspects, according to Reuters. In a move that angered both sides of the ethanol versus oil refining battle, the EPAproposed higher blending requirements for refiners in 2020, but declined to scrap previously issued waivers. The Trump administration more than quadrupled the volume of waivers issued to refiners, roiling the market for ethanol and for credits that can be bought and sold by refiners.  Iran said that the seizure of its ship in Gibraltar by the UK won’t go “unanswered.” BP reportedly rerouted one of its tankers heading for Iraq to Saudi waters over fears of retaliation.  Despite an economic and political crisis and crippling sanctions, Chevron has not pulled out from Venezuela, even as most other international companies have already done so. Chevron received a waiver from the U.S. government to continue operating, and the company expects to profit from production if Maduro stays in power, or be first in line to a potential historic privatization if opposition forces take over.

  U.S. oil prices tally a fourth straight session gain - Oil futures gained on Tuesday, with U.S. prices logging a fourth straight session gain, buoyed by tensions with Iran that threaten the global flow of oil and by expectations for a weekly decline in U.S. crude supplies. Concerns over a slowdown in energy demand, however, have kept prices in check. Traders also awaited Congressional testimony this week from Federal Reserve Chairman Jerome Powell and any hints on the likelihood of an interest-rate cut later this month. August West Texas Intermediate crude rose 17 cents, or 0.3%, to settle at $57.83 a barrel on the New York Mercantile Exchange, following three straight session of gains. The settlement was the highest for a front-month contract since July 1, FactSet data show. International benchmark September Brent, which had diverged from its U.S. counterpart a day earlier, climbed 5 cents, or nearly 0.1%, to $64.16 a barrel on ICE Futures Europe. Rising tensions between Iran and the United States have brought the two countries close to conflict and threatened the security of major oil transportation choke point, the Strait of Hormuz. Last month, President Donald Trump called off air strikes at the last minute in retaliation for Iran shooting down a U.S. drone. The European Union on Tuesday urged Iran to reverse its scaled-up uranium enrichment that breaches a nuclear deal it agreed in 2015, Reuters reported. The Trump administration withdrew from the accord last year and imposed oil-focused economic sanctions. “Geopolitics, and more specifically the threat of more military activity between the U.S. and Iran, is one of the only remaining bullish factors supporting the energy market right now, as the supply fundamentals are roughly balanced between an extension in OPEC+ policy but stubbornly elevated U.S. output,” 

WTI Spikes After Huge Crude Draw - Oil prices gained modestly on the day, with WTI rallying up to $58 ahead of tonight's API inventory data, despite another tanker being seized (by Egypt this time).“Given the continued presence of sanctions and tensions between the U.S. and Iran, the ongoing trade war between the U.S. and China, and the potential for an economic slowdown, oil prices are likely to remain volatile in the short term," said Michael Laitkep, an analyst at Alerian, which tracks energy infrastructure companies.But for tonight, and tomorrow morning, all eyes are on the fundamental side... API

  • Crude -8.129mm (-2.5mm exp)
  • Cushing -754k
  • Gasoline -257k
  • Distillates +3.690mm

Crude inventories were expected to drop in the last week (after 3 previous weeks of draws) but the huge 8.1mm crude draw was a big surprise (everyone is ignoring the distillates build for now)... WTI hovered around $58.00 ahead of the print, and exploded higher (above $59) on the huge draw...

Oil rises more than 1% after US stockpile drop - Oil prices rose on Wednesday, led by U.S. crude after an industry group reported that U.S. stockpiles fell for a fourth week in a row, alleviating concerns about oversupply amid global trade tensions. West Texas Intermediate (WTI) crude had climbed 81 cents, or 1.4%, to $58.64 by 0151 GMT. Brent was up 61 cents, or 1%, at $64.77, having earlier hit $64.95. The U.S. and global benchmarks have gained this year as the Organization of the Petroleum Exporting Countries (OPEC) and big producers such as Russia have honored commitments to cut output. Investors have also been on the lookout for any signs that unrelenting production from the United States is being consumed. U.S. crude stockpiles fell more than forecast last week, while gasoline inventories decreased and distillate stocks built, data from industry group the American Petroleum Institute (API) showed on Tuesday. Crude inventories fell by 8.1 million barrels in the week to July 5 to 461.4 million, compared with analyst expectations for a decrease of 3.1 million barrels, according to the data. Official figures from the government’s Energy Information Administration (EIA) are due later on Wednesday. “Prices are finely balanced right now as investors await fresh stimulus,” said Fawad Razaqzada, technical analyst at “The stimulus could come in the form of a sharp change in U.S. crude oil inventories.” Oil prices have been under pressure from concerns about global economic growth amid growing signs of harm from the U.S.-China trade war that has rumbled on over the last year. Lower economic growth typically means reduced demand for commodities such as oil.

WTI Fails To Extend Gains Despite Huge Crude Draw -  Oil prices have extended their gains overnight after the much bigger than expected crude draw suggested by API, and helped by an uber-dovish Powell and a re-emergence of tensions with Iran (Trump threatening more sanctions imminently). “The crude draws reported by the API yesterday were much larger than the market was expecting,” said Warren Patterson, a senior commodities strategist at ING Bank NV. “That is the key catalyst behind the move higher.”  DOE:

  • Crude -9.50mm (-2.9mm exp)
  • Cushing -310k
  • Gasoline -1.46mm
  • Distillates +3.729mm

After API, and the market's surge, analysts shifted their expectation for a bigger crude draw than before, and rightly so as DOE reported a massive 9.50mm crude draw - the fourth weekly draw in a row. Gasoline also drew for the 4th week as distillate stocks rose. Production is perhaps rolling over but its a little too soon to tell yet (aside from the signaling from rig counts)... WTI traded around $59.50 ahead of the DOE data (having surge overnight), spiked on the big crude draw print before algos sold the news...

Oil prices jump 4.5% on U.S. crude stocks draw, Gulf of Mexico storm (Reuters) - Oil prices rose 4.5% a barrel on Wednesday to their highest level in more than a month after U.S. crude inventories shrank and as major producers cut nearly a third of offshore Gulf of Mexico production ahead of an expected storm. Brent crude futures LCOc1 settled at $67.01 a barrel, up $2.85, or 4.44 percent. U.S. West Texas Intermediate (WTI) crude futures CLc1 settled at $60.43 a barrel, climbing $2.60, or 4.50 percent. Both benchmarks hit their highest prices since late-May. U.S. crude stocks fell 9.5 million barrels in the week to July 5, shrinking more than triple the 3.1 million-barrel draw analysts had expected as refineries ramped up output, the Energy Information Administration (EIA) said. “The inventory draw was much stronger than expected,” which helped to push oil prices higher, said Carsten Fritsch, oil analyst at Commerzbank. “Imports dropped and refinery utilization reached the highest level since the beginning of the year, contributing to the big draw.” A storm expected to form along the Gulf of Mexico also helped oil prices. Major oil firms began evacuating and halting production in the Gulf of Mexico ahead of the storm, which is forecast to become a hurricane by the weekend. [nL2N24B0L0] 

 US oil hits highest in over a month amid Gulf of Mexico storm, Iran tensions - Oil futures hit a six-week high on Thursday as a storm built in the Gulf of Mexico, threatening crude output, while an incident with a British tanker in the Middle East highlighted ongoing tensions in the region. U.S. West Texas Intermediate (WTI) crude futures were up 34 cents, or 0.6%, at $60.77 a barrel by 0337 GMT, after earlier touching the highest since May 23 at $60.83. They gained 4.5% in the previous session. Brent crude futures reversed early losses and were up 30 cents, or 0.5%, at $67.31 a barrel, after rising to as high as $67.38, the highest since May 30. They ended Wednesday up 4.4%. Five boats believed to belong to Iranian Revolutionary Guards approached a British oil tanker on Wednesday and asked it to stop in Iranian waters close by, but withdrew after a British warship warned them over radio, a U.S. defense official said on Thursday. Tensions have been high in the Middle East after attacks on tankers and the downing of a U.S. drone by Iran last month, following President Donald Trump’s unilateral withdrawal from a multi-party agreement with Tehran to end its nuclear program. U.S. oil producers on Wednesday cut nearly a third of Gulf of Mexico crude output ahead of what could be one of the first major storms of the Atlantic hurricane season. Fifteen production platforms and four rigs were evacuated in the north central Gulf of Mexico, according to a U.S. regulator as oil firms moved workers to safety ahead of a storm expected to become a hurricane by Friday. Oil prices were also supported by a decline in U.S. inventories. U.S. crude stocks fell 9.5 million barrels in the week to July 5, the Energy Information Administration (EIA) said, more than triple the 3.1 million-barrel draw analysts had expected as refineries ramped up output.

Oil prices rise amid Gulf of Mexico storm, Middle East tensions - Oil prices rose on Friday, hovering near six-week highs, as U.S. oil producers in the Gulf of Mexico cut more than half their output in the face of a tropical storm and as tensions continued to simmer in the Middle East.Brent crude futures were up 29 cents, or 0.4%, at $66.81 per barrel by 0300 GMT. The international benchmark settled down 0.7% on Thursday after hitting its highest since May 30 at $67.52 a barrel. U.S. West Texas Intermediate (WTI) crude futures were up 31 cents, or 0.5%, at $60.51 a barrel. The U.S. benchmark marked its highest level since May 23 in the previous session at $60.94.By Thursday, oil companies in the Gulf of Mexico had cut more than 1 million barrels per day (bpd) of output, or 53% of the region’s production, due to Tropical Storm Barry which could make landfall Saturday on the Louisiana coast.The storm was forecast to become a category one hurricane with at least 74-mile-per hour (119 km-per-hour) winds.“Brent crude oil ... extended its gains as storms in the Gulf of Mexico halted production of oil and U.S. oil inventories continued to recede more than expected,” ANZ Bank said in a note. U.S. crude oil inventories have decreased for four consecutive weeks. Crude stocks fell 9.5 million barrels in the week to July 5, the Energy Information Administration (EIA) said, a drop that was more than triple the 3.1 million-barrel draw expected by analysts.

Lower anticipated global economic growth reduces expectations for 2019 global oil demand - In its July 2019 edition of the Short-Term Energy Outlook (STEO), EIA forecasts that global liquid fuels consumption, which averaged 99.9 million barrels/day (b/d) in 2018, will grow by 1.1 million b/d in 2019 and by 1.4 million b/d in 2020. EIA has revised down its expectation for global liquids demand growth for six consecutive months. This revision reflects slower expected economic growth in many of the world’s largest oil-consuming countries, lower than expected oil consumption so far this year, and higher crude oil prices. One of the main drivers of EIA’s global oil consumption forecast is global gross domestic product (GDP) based on country-level forecasts from Oxford Economics. EIA calculates an oil-weighted GDP by using relative magnitudes of oil consumption in each country. EIA revised the 2019 oil-weighted GDP growth rate from 2.9% in its January STEO to 2.2% in its July STEO. If realized, this 2.2% growth rate would be the lowest annual growth rate since 2009 and one of the main reasons for slower growth in global liquids consumption.The July STEO forecast for 2019 also includes historical 2019 liquid fuels consumption data for the first quarter of the year for countries that are members of the Organization for Economic Cooperation and Development (OECD). Non-OECD consumption estimates were also updated to reflect new GDP data. Consumption during this period was less than forecast in the January STEO.  EIA attributes lower than expected OECD oil consumption earlier this year to relatively warm weather in Europe in February and March, which reduced heating oil consumption; slowing GDP growth; and a slowdown in Europe’s manufacturing sector. Weather was also a likely cause for U.S. liquid fuels consumption in the second quarter of 2019 to be less than EIA had forecast at the beginning of the year. Initial estimates for May and June support the possibility that flooding in the Midwest affected the planting season for some farms. Because of the flooding, farmers likely reduced their consumption of diesel fuel for farming equipment. In addition, crude oil prices affect the price of refined fuel prices, and higher fuel prices, all other factors being equal, typically cause fuel consumption to decline.

Oil markets will see another glut in 2020, IEA predicts --The International Energy Agency (IEA) expects the return of an oversupplied oil market next year, despite the recent rollover of an OPEC-led pact designed to restrain any glut. The energy agency said the “main message” of its closely-watched report was that oil supply in the first six months of 2019 had exceeded demand by 0.9 million barrels per day. “This surplus adds to the huge stock builds seen in the second half of 2018 when oil production surged just as demand growth started to falter,” the Paris-based IEA said Friday. Neil Atkinson, head of the oil industry and markets division at the IEA, told CNBC on Friday that in addition to the remainder of this year, the outlook for 2020 is also for “considerable oversupply because we are getting big growth from the United States and some other countries.”  “So, as far as the issue of re-balancing is concerned, as we say in the lead article in today’s report, re-balancing is still some way off,” Atkinson said. OPEC and its allies, led by Russia, have kept 1.2 million barrels per day off the market since the start of the year. The energy alliance, sometimes referred to as OPEC+, last week renewed the pact until March 2020 to avoid a build-up of inventories that could hit prices. “The widely-anticipated decision by OPEC+ ministers to extend their output agreement to March 2020 provides guidance but it does not change the fundamental outlook of an oversupplied market,” the IEA said. International benchmark Brent crude traded at around $66.99 Friday morning, up around 0.7%, while U.S. West Texas Intermediate (WTI) stood at $60.52, around 0.5% higher. Concerns that global demand is slowing caused Brent to decline by 10% in June, despite supportive geopolitical factors, the IEA said. The energy agency said Friday that it expects a 2.1 million barrels per day expansion of non-OPEC oil supply next year, largely driven by soaring U.S. production. That would mark a slight increase from 2 million barrels per day in 2019, lowering the requirement of OPEC crude.

Oil flat as tropical storm limits output, glut forecasts weigh - (Reuters) - Oil prices were little changed on Friday as U.S. Gulf of Mexico crude output dropped by more than half from disruptions caused by a tropical storm, but concerns over a global crude surplus in the months ahead limited gains. Brent crude LCOc1 futures settled at $66.72 a barrel, climbing 20 cents. U.S. West Texas Intermediate (WTI) crude CLc1 futures settled at $60.21 a barrel, up 1 cent. Brent has gained 4% this week while WTI posted a 4.7% rise. Both benchmarks fell last week. Tropical Storm Barry, which is expected to become a hurricane just before making landfall this weekend, boosted crude futures as oil companies in the Gulf of Mexico sliced production. Nearly 59%, or 1.1 million barrels per day, of crude oil production in the U.S.-regulated areas of the Gulf of Mexico has been cut because of the storm, the U.S. Bureau of Safety and Environmental Enforcement (BSEE) said. “The crude oil market is being supported by the Gulf of Mexico production shut-in. ... It is going to look to see if Tropical Storm Barry becomes a major flooding event that impacts the refining sector in Louisiana and impacts gas and diesel,” said Andy Lipow, president of Lipow Oil Associates in Houston. The International Energy Agency (IEA) forecast surging U.S. oil output will outpace sluggish global demand and lead to a large inventory build around the world in the next nine months. “The IEA report is tempering any price rise that we might see from Tropical Storm Barry because the market continues to stumble under the weight of slowing economic growth,” Lipow said. The world energy watchdog’s report came a day after the Organization of the Petroleum Exporting Countries predicted a crude glut next year despite an OPEC-led pact to restrain supplies. The weekly U.S. oil rig count, an indicator of future production, fell for the second straight week, General Electric Co’s (GE.N) Baker Hughes energy services firm said. [RIG/U] Drillers cut four oil rigs in the week to July 12, reducing the total to 784, the lowest since February 2018.

Oil rises nearly 5% for the week on tropical storm and geopolitical tensions - Oil prices posted strong weekly gains on Friday as U.S. Gulf of Mexico crude output was halved by disruptions caused by a tropical storm, but concerns over a global crude surplus in the months ahead limited gains. West Texas Intermediate futures rose nearly 5% this week while Brent climbed more than 4%. On Friday, however, U.S. crude gained just 1 cent to settle at $60.21 per barrel while Brent gained 25 cents to trade at $66.77 per barrel. Tropical Storm Barry, which is expected to become a hurricane just before making landfall this weekend, boosted crude futures as oil companies in the Gulf of Mexico sliced production. “The crude oil market is being supported by the Gulf of Mexico production shut-in... it is going to look to see if Tropical Storm Barry becomes a major flooding event that impacts the refining sector in Louisiana and impacts gas and diesel,” said Andy Lipow, president of Lipow Oil Associates in Houston. Companies cut more than 1 million barrels per day (bpd) of output, or 53% of the region’s production, as the storm headed for possible landfall on the Louisiana coast on Saturday. The International Energy Agency (IEA) forecast surging U.S. oil output will outpace sluggish global demand and lead to a large inventory build around the world in the next nine months. The world energy watchdog’s report came a day after the Organization of the Petroleum Exporting Countries predicted a crude glut next year despite an OPEC-led pact to restrain supplies. “The IEA report laid bare what the market is staring down and what OPEC is staring down next year, and really for the balance for this year, and that will continue to be a headwind,”

Why This Oil Rally Won't Last - After weeks of gloom, the oil market is tightening up once again. But it’s not clear how long the upward cycle will last. OPEC admitted this week that it may need to keep the production cuts in place, perhaps beyond the latest extension, because of soaring production from U.S. shale. A combination of geopolitical tension in the Persian Gulf, outages in Venezuela and Iran, a pending interest rate cut by the Federal Reserve, and the brewing storm in the Gulf of Mexico has led to strong price increases in oil over the last few days.The rally might have “further to go,” as Standard Chartered put it in a recent note to clients. “We think the rally is likely to continue, allowing Brent to move well above USD 70/bbl and WTI to test above USD 65/bbl,” the investment bank wrote. “Fundamentals are supportive in Q3; we project a 0.5 million barrels per day (mb/d) global supply deficit,” while data from the IEA and OPEC suggests an even larger deficit, analysts with Standard Chartered said.They are not alone. The EIA reported an enormous 9.5-million-barrel decline in inventories last week.“This fourth consecutive weekly decline in US crude oil stocks shows that the US oil market is now tightening too,” Commerzbank said. Storms in the Gulf of Mexico and rising tension in the Middle East are also bullish factors. “The overall situation points to further rising oil prices in the short term,” Commerzbank concluded.But, some of these are temporary factors that could dissipate, especially with shale supply still growing quickly. In OPEC’s latest Oil Market Report, the group laid out the challenge facing oil exporters. Demand growth may only reach 1.14 million barrels per day (mb/d) this year, but supply growth from non-OPEC countries alone could top 2.05 mb/d. Next year, non-OPEC supply could jump by another 2.4 mb/d, with demand again only growing by 1.14 mb/d. In other words, OPEC+ may be stuck with the production cuts, forced to perpetually extend them in a Sisyphean attempt to keep oil prices from collapsing. The supply curtailments do indeed put a floor beneath prices, but that only serves to prop up even more shale drilling.

 Two Factors That Point To A Bearish 2020 For Oil  - OPEC and allies had little choice but to roll over their production cuts into the first quarter of 2020 amid higher-than-average global inventories, continued uncertainties over the global economy and oil demand growth, and rising rival oil supply, mostly from U.S. shale.The cartel and its non-OPEC partners led by Russia aim to bring the market back to balance and prop up oil prices, or at least put a floor under current prices.While the OPEC+ alliance can and does calibrate its own production, it is not in control of the current key drivers of the oil market - demand growth and rival oil supply.And the current outlook for those two variables point to an ugly oil market in 2020, oil and gas analyst Gaurav Sharma writes for Forbes.Despite rising tension in the Middle East with the U.S.-Iran standoff, despite U.S. sanctions choking off oil supply from Iran and Venezuela, and despite a fragile security situation in Libya, OPEC’s extended cuts failed to excite the market.That’s because supply from outside the OPEC+ group, especially from U.S. shale, continues to grow, inadvertently supported by the restricted supply from OPEC+. But more importantly, because market participants are currently more concerned about the state of the global economy—particularly in a still unresolved U.S.-China trade dispute—and its impact on global oil demand growth, than the likelihood of a major supply outage.Major organizations have downgraded oil demand growth forecasts to reflect uncertainties about the global economy and the U.S.-China trade war. In its June Short-Term Energy Outlook (STEO), the EIA cuts its oil demand growth forecast by 200,000 bpd to 1.2 million bpd for 2019.The International Energy Agency (IEA) also cut in June its demand growth outlook, to 1.2 million bpd this year. World trade growth is now at its slowest pace since the financial crisis ten years ago, the IEA said, citing data from the Netherlands Bureau of Economic Policy Analysis and various purchasing managers’ indices. The consequences for oil demand have already become apparent, with growth in Q1 this year at just 300,000 bpd versus a very strong Q1 2018, the lowest for any quarter since the fourth quarter of 2011.

Libya To Release All Migrants From "Detention Camps" After Tripoli Attack - In a move that will likely result in even greater political instability in Europe, which in recent years has become the primary target for every migrant holed up in Libya and just waiting for the chance to cross the Mediterranean, The New Arab reports that Libya's UN-backed government is contemplating shutting down slave migrant detention centers and releasing all the detainees for their own safety, after airstrikes targeted one such center on Tuesday in a devastating attack which killed at least 53 people.The strike left at least 130 wounded when it hit a hangar in which the migrants were detained in the Tripoli suburb of Tajoura. In the aftermath of the deadly bombing, Fathi Bashagha, the interior minister of Libya's Government of National Accord (GNA) told the assistant to the UN special envoy to Libya, Maria do Valle Ribeiro, his government was accountable for the safety of Libyan civilians, including detained migrants.However, Bashagha said the authority did not have the capacity to protect the centers in the face of airstrikes from advanced F16 jets, according to ministry. Ribeiro also discussed the Tanjoura attack with Mohammed Al-Shibani, Libya's deputy interior minister for migration affairs, agreeing on the need to transfer the hundreds of survivors to safer accommodation. The Libyan justice ministry condemned the attack, vowing to work with humanitarian and migration organisations to repatriate the migrants or resettle them in third countries, because Libya's compromised security situation could not provide them the safety they require. Despite this, it was revealed on Thursday that around 300 migrants of the centre's original 600 detainees were still being held there, while the International Organisation for Migration (IOM) said it was providing humanitarian assistance to the remaining detainees. The IOM was unable to confirm reports that dozens of migrants had fled on Tuesday night after the raid.The UN's humanitarian office OCHA, quoting survivors, said guards at the centre fired on migrants trying to flee causing no casualties, but the GNA interior ministry denied this as "rumours and false information". Needless to say, a similar rumor in the US - where migrant detention centers have become the focal talking point in domestic politics - could well spark a second civil war.

Turkey Charged With Running Foreign Terrorist “Rat Line” Into Libya -  Libya was once a key embarkation point for jihadists headed to foreign battlefields - first in the 1980s Afghan-Soviet War where they supported the CIA-backed mujahideen, and more recently in Syria, where both massive jihadist manpower and heavy weaponry were transferred to the killing fields of Aleppo and Idlib (also, it should be noted, in support of CIA regime change efforts against Assad).  But as we described after a recent New York Times report unveiled that US anti-tank missiles have been found in "unknown" Libyan rebel hands fighting within warlord Khalifa Haftar's ranks, the once stable formerly Gadaffi-ruled Arab North African country which was in 2011 "liberated" at the hands of US-NATO forces has once again become ground zero in a grinding proxy war which has allowed jihadists to run rampant amid the chaos.Whereas a jihadi "rat line" previously ran from Libya into Syria via Turkey, we now have an exact reversal of the prior Syria situation given Turkey is becoming more heavily involved militarily in support of Tripoli's GNA government, currently under siege by UAE and US-backed Haftar's LNA.   A Libyan official representing the rival Libyan government loyal to Haftar has alleged in a Russian state media interview that Turkey is actively transferring terrorists to fight in Libya. According to Beirut-based Al-Masdar News:A Libyan official told the Arabic language version of Russia’s Sputnik News Agency on Saturday that Turkey is transferring foreign terrorists to Libya to fight the Benghazi-based Libyan National Army (LNA).Speaking to Sputnik from Tobruk, Libyan parliamentarian ‘Ali Al-Sa’eedi Al-Qaidi said that Turkey has been sending terrorists to Libya for quite some time now, highlighting the fact that these militants only attack the [Tripoli-based] Libyan National Army.“The transfer of terrorists is not new. This is a long story. Many terrorists come from Turkey through Tripoli and Misrata to fight the Libyan National Army in Tripoli and obstruct its advance into the center of the Libyan capital of Tripoli,” Al-Qaidi said further.

EU Mulls Sanctions On Turkey After 2nd Drilling Ship Deployed In Cypriot Waters -- Turkey and Europe are headed for a showdown in the eastern Mediterranean over Turkish plans for oil and gas exploration and drilling in Cypriot-recognized waters, with the European Union reportedly now mulling cutting financial assistance to Turkey over the illegal drilling. EU envoys are reportedly meeting Wednesday to discuss various punitive measures against Turkey, including suspending aviation talks and even sanctions.  The latest crisis was triggered after Turkish drilling vessel Yavuz sailed to an area off Cyprus’ east coast at the start of this week the second to follow a first drilling vessel, Fatih, which had already been exploring in Cypriot waters. Notably, the vessels have been accompanied by the Turkish military, including drones, F-16 fighters, and warships.  Turkish authorities have been brazen in publicizing their territorial claims and actions backing them, even as EU leaders have slammed the now months-long exploration and drilling expansion in solidarity with Cypriot condemnations (since last May). Turkish Vice President Fuat Oktay had warned over the weekend while speaking from the Turkish-occupied north of Cyprus: “Those who move against the legitimate rights of Turkey or the Turkish Cyprus and discount Turkey in the region will not be able to reach their aims,” according to Hurriyet Daily.   However, EU foreign minister Federica Mogherini warned Turkey this week that the EU would respond "appropriately and in full solidarity with Cyprus" after Ankara announced the deployment of the Yavuz drilling vessel. Previously, the Fatih had been deployed a mere 42 miles off the west coast of Cyprus.

Russia-Syria assault on Idlib leaves over 500 civilians dead --  At least 544 civilians have been killed and more than 2,000 people wounded since a Russian-led assault on the last rebel-held bastion in northwestern Syria began two-and-a-half months ago, according to rights groups and rescuers. Russian fighter jets joined the Syrian army on April 26 in the offensive against rebel-held Idlib and adjoining northern Hama provinces, in the biggest escalation in the war between Syrian President Bashar al-Assad's forces and rebel fighters since last summer. The Syrian Network for Human Rights (SNHR), which monitors casualties and briefs various United Nations agencies, said on Saturday that 130 children were among the 544 civilians killed in the hundreds of attacks carried out by Russian jets and the Syrian army. Another 2,117 people were wounded. "The Russian military and its Syrian ally are deliberately targeting civilians with a record number of medical facilities bombed," Fadel Abdul Ghany, chairman of SNHR, told Reuters news agency. Last month, US-based Human Rights Watch said the Russian-Syrian joint military operation had used cluster munitions and incendiary weapons in the attacks, along with large air-dropped explosive weapons, based on reports by first responders and witnesses. The Syrian army and its ally Russia denied the allegations. Moscow says its forces and the Syrian army are fending off attacks by al-Qaeda fighters whom they say hit populated, government-held areas. It also accuses rebels of breaching a ceasefire deal agreed last year between Turkey and Russia.

Denied Iran's Oil, Syria Has Few Options But Russia -  - The noose strangling the flow of oil to Syria tightened a notch last week, when British Royal Marines boarded a tanker carrying Iranian crude into the Mediterranean Sea through the Strait of Gibraltar. With Syria’s Iranian supplies halted, the flow will have to come from somewhere else, and the alternative is troubling. The Very Large Crude Carrier Grace 1 loaded a cargo of Iranian oil from the Kharg Island terminal in mid-April and set off on a long voyage around the southern tip of Africa to the eastern Mediterranean. The ship was apprehended because it was believed to be heading to a refinery that is ultimately owned by Syria’s ministry of petroleum, an entity subject to European Union sanctions. The journey from Iran to Syria around Africa is about 14,500 miles (23,300 kilometers), compared with about 4,100 miles via the Red Sea and Suez Canal. Why take such a circuitous route? Because Iranian crude is not accepted by the owners of the Sumed pipeline, which crosses Egypt to link the Red Sea to the Mediterranean. It is also banned from the Eilat-Ashkelon pipeline across Israel, originally built with the express purpose of carrying the Persian Gulf nation’s output to the Mediterranean.  More recently, ships carrying Iran’s crude to Syria also seem to be prevented from using the Suez Canal. That looks to be a new development, since the oil trade between the two countries between 2016 and 2018 via the waterway averaged 50,000 barrels a day. All of those ships involved in that transport that have not been scrapped or sold appear on a list of vessels undertaking sanctionable activity published in March by the U.S. Department of the Treasury’s Office of Foreign Assets Control. This doesn’t mean Iran’s crude is completely forbidden in the waterway, since ships heading to Turkey are still able to pass. But it does mean that Syrian-bound ships carrying its cargoes have to rely on the much longer route around Africa and that a larger ship would make the journey more economic – the Grace 1 can carry twice as much oil as the Sea Shark. But that route passes through European Union waters as ships enter the Mediterranean and it was here that the Grace 1 was impounded. The government of Gibraltar has denied the claim by the Spanish Foreign Affairs Ministry that the action was carried out at the request of the U.S.  The Syrian government has two big oil-producing friends, Iran and Russia. With the routes from the first apparently closed, it may have to turn to the second. This presents a new host of potential risks. Impounding an Iranian ship in the Strait of Gibraltar is one thing. Stopping a Russian ship in the Aegean Sea is quite another.

US greenlights missiles for al-Qaeda-linked, Turkish-backed Salafi-jihadists occupying Syria’s Idlib - While the US corporate media continues propagating theconspiracy theory that Donald Trump is a secret Kremlin asset, the Trump administration has approved heavy weapons for al-Qaeda-allied, Turkey-backed militants to fight against a Russian-backed offensive in Syria.The Syrian army has relaunched a campaign to retake the northwestern province of Idlib, which has been under the control of Syria’s al-Qaeda affiliate for more than four years. Washington has responded by greenlighting a cache of US-made anti-tank missiles, rocket launchers, and armored vehicles sent from NATO ally Ankara to sectarian Islamist militants in Idlib.Syria’s ally Russia had negotiated a peace deal with Turkey in September 2018. Ankara is militarily occupying part of northern Idlib, and the NATO member has constructed a dozen military bases in the Syrian province. But after seven months, Turkey and its rebel proxies have still failed to uphold their side of this peace agreement.Under the deal, the Syrian government was supposed to regain access by the end of 2018 to major highways running through Idlib that were partially controlled by Islamist rebels. But Damascus still does not have authority over these critically important roads. The peace agreement additionally stipulated that extremist militants in a demilitarized zone on the edge of Idlib were not allowed to launch attacks on Syrian government-held territory. Yet these Salafi-jihadist rebels have continued indiscriminately attacking civilian territories that are controlled by Damascus.  Frustrated with Turkey’s failure to fulfill the peace deal, the Syrian army and Russian military decided to re-initiate their joint campaign to retake Idlib. In April, Moscow began a series of airstrikes; and in early May, Damascus kicked off a ground offensive. The Trump administration immediately condemned this Syrian-Russian campaign to retake Idlib from al-Qaeda militants. US officials also claimed, without providing any evidence, that the Syrian army was using “chemical weapons” in the offensive. (This unsubstantiated accusation came at the same time when a leaked OPCW report suggested that a previous gas attack in Douma, Syria had actually been staged.)

90% Of Palestinians Distrust Jared Kushner's Peace Plan - After White House Senior Advisor Jared Kushner unveiled his highly anticipated plan for peace in the Middle East during a two-day economic workshop in Bahrain, it was greeted with derision and exasperation by Arab leaders. The Palestinian leadership boycotted the event while a long list of commentators from Arab countries described the plan as "a colossal waste of time" and "dead on arrival". In fact, as Statista's Niall McCarthy notes, new polling from the Palestinian Center for Policy and Survey Research has found that nine in ten Palestinians do not trust the goals of the plan. Instead of focusing on the deadlocked political situation, Kushner instead focused on economics, intending to invest $50 billion to fund 179 regional infrastructure projects over the coming decade. $27.6 billion would go to the West Bank and Gaza with the remainder going to Jordan, Egypt and Lebanon. The primary goal of the plan is to allow the Palestinian territories to better access international markets while simultaneously improving key infrastructure such as electricity, water and telecommunications. That would see Palestinian GDP double over the next ten years, generate an estimated one million jobs and halve the poverty rate. The U.S. and Israel would not be responsible for the funding - the Bahrain workshop aimed to raise capital from across the Arab world. As the polling shows, however, an economic plan totally lacking a political dimension is certainly not being viewed as realistic by Palestinians.

Spain Says Iranian Oil Tanker Was Seized by Britain at US Request -  In a move that threatens to hugely escalate tensions between Iran and the US, British Royal Marines raided and seized an Iranian oil tanker at Gibraltar on Thursday. The tanker was accused by British officials of heading to Syria in violation of EU sanctions.Iran’s Foreign Ministry confirmed summoning the British Ambassador to express “very strong objection to the illegal and unacceptable seizure” of the ship. Analysts expressed surprise at the unusually aggressive move against a commercial oil tanker.British Premier Theresa May presented the raid as “firm action to enforce EU sanctions,” though Spain indicated that it was actually done because the Trump Administration asked Britain to do so. Spain said they’re looking into it, since the tanker was captured in Spanish territorial waters. While the US hasn’t taken credit for the move yet, John Bolton was cheering the move, saying it would keep Iran from “profiting off the illicit trade,” which to be clear, is Iran shipping Iranian oil to Syria to sell it, when the US insists Iran isn’t allowed to sell any oil, and the EU says Syria isn’t allowed to buy any.

What’s Next for the Oil Tanker Seized by British Forces - When British Royal Marines helped seize an oil tanker off the southern tip of Spain on Thursday, they opened up a legal wrangle that could drag on for months.The Grace 1, a supertanker able to haul 2 million barrels of crude, was arrested in the early hours of July 4 because Gibraltarian authorities said they had grounds to believe it was going to breach European Union sanctions by delivering crude oil to Syria. The cargo came from Iran, which protested against the seizure.With the vessel now sitting inside the Bay of Gibraltar, close to the shore of the British overseas territory, one question being asked is what will it take for the tanker to be released. There are -- according to Anna Bradshaw, a partner at the law firm Peters & Peters, who specializes in sanctions -- two obvious ways for that to happen. The government of Gibraltar could say that it made a mistake and that it doesn’t think the vessel was in fact breaching EU sanctions.  Though that option could see the ship leave the port and sail away, there’s no guarantee that the U.S. wouldn’t try to ensure that the vessel remained seized again as a result of its own sanctions, according to Bradshaw. In reality, since the U.S. has no such jurisdiction, it might struggle to do that, she said.Alternatively, Iran could also successfully defend itself in the Gibraltarian legal system, allowing the vessel to depart. A more likely sequence of events would see the vessel or its cargo detained for a more prolonged period, Bradshaw says. A sequence of events has already been triggered, that could ultimately lead to the ship being released:

  • 1) Once the vessel is detained, a court will need to extend the period it can be held for, which starts at 72 hours, and has now been extendedto 14 days
  • 2) After that time’s up, the period can be extended again to as long as 90 days
  • 3) By then, the government can look to either legally seize the ship and its cargo -- known as forfeiture -- or possibly sell them; that would see the vessel back on the world’s oceans

All of this could still occur while the ship’s owners and managers answer charges of sanctions breaches. Again, that process is complicated and could be long, particularly given that it’s rare for EU sanctions breaches to have to be tried, and it’s equally rare for a supertanker of oil to be seized mid-transit. A long and wrangling court procedure could also mean that the sale or release of the vessel gets held up. It’s also important to remember that Iran protested against the ship’s seizure, so there is likely to be a much wider political picture going on.

British capture of Iranian tanker won't go 'unanswered' - officer - (Reuters) - Britain’s seizure of an Iranian oil tanker off Gibraltar last week will not be “unanswered”, Iran’s armed forces chief of staff, Major General Mohammad Bagheri, said on Tuesday, according to the semi-official Tasnim news agency. “Capture of the Iranian oil tanker based on fabricated excuses ... will not be unanswered and when necessary Tehran will give appropriate answer,” Bagheri said. British Royal Marines boarded the ship, Grace 1, off the coast of Gibraltar on Thursday and seized it over accusations it was breaking sanctions by taking oil to Syria. Iran has demanded the immediate release of the oil tanker, while an Iranian Revolutionary Guards commander threatened on Friday to seize a British ship in retaliation.

Iran-Backed Attack On Merchant Ship In Red Sea Thwarted- Saudi Coalition - As the tanker and pipeline wars in the gulf continue to heat up, Saudi state sources are claiming to have thwarted a new "terror attack" on a commercial ship targeted by Yemen's Houthis.  Spokesman for the Saudi coalition fighting in Yemen, Col. Turki al-Maliki, announced Monday that "Houthis attempted to attack a commercial ship south of the Red Sea using a booby-trapped boat with explosives," according to a statement from the Saudi Press Agency. Al-Maliki pointed the finger at the "Iran-backed" Shia militia for posing a threat to navigation and international trade, but vowed that the coalition which has since 2015 included US forces would "neutralize" all hostile threats in the region. The statements via the Saudi Press Agency suggest that an active, ongoing operation is underway in response to the alleged Houthi targeting of a merchant vessel in the south Red Sea.The Bab El Mandeb strait, located between Yemen on the Arabian Peninsula to the Red Sea's south, is considered one of the world’s most important trade routes for oil tankers and over the course of the Saudi-Yemen war has been site of multiple military operations launched between the Houthis and Saudis. Impossible to predict Iran’s response vs UK. Expect mischief/hassling of UK tankers in Persian Gulf. Is bigger risk than attack on tanker in Persian Gulf, the wildcard of Iran proxies, in particular the Houthis who have attacked Saudi tankers in the Red Sea/Bab el Mandeb? #OOTT -  Dan Tsubouchi (@Energy_Tidbits) July 7, 2019       The claimed attack comes a day after the Houthis confirmed they conducted drone attacks on military aircraft hangars and other sites at Jizan airport in southern Saudi Arabia, according to Reuters. Airports in the southern part of the kingdom have been under threat of late from increasingly sophisticated Houthi ballistic missile attacks. Washington and Riyadh have for the past year accused Iran's IRGC of supplying the advanced medium range rockets to the Shia rebel force fighting the US-Saudi coalition in Yemen.

Insurance rates have 'increased 10-fold' after attacks in the Strait of Hormuz, shipping CEO says -- Insurance rates for tankers transiting through the world’s most important oil choke point have skyrocketed in recent weeks, according to the CEO of a U.S.-listed shipping company. Six oil tankers and a U.S. spy drone have been attacked since May either in, or near, the Strait of Hormuz — a strategically important waterway which separates Iran, Oman and the United Arab Emirates. “As a shipping company and part of the global shipping industry, we are taking the threat to our crew and ships very seriously,” Anthony Gurnee, CEO of Ardmore Shipping, told CNBC’s “Squawk Box Europe” on Tuesday. Ardmore Shipping is a U.S.-listed company based in Ireland, with a business of owning and operating a fleet of tankers that move refined oil products. “At the moment, it is business as usual (but) insurance to transit the Strait of Hormuz has actually increased 10-fold in the last two months as a consequence of the attacks,” Gurnee said. The attacks brought the U.S. and Iran close to conflict last month. President Donald Trump called off air strikes at the last minute in retaliation for Iran shooting down a U.S. drone over the Gulf, which followed attacks on two oil product tankers in the nearby Gulf of Oman by unidentified assailants. Washington has blamed Iran for the attacks on four oil tankers in the same area on May 12. Tehran has denied the allegations. “Whoever is doing this has demonstrated that they have the ability to be very destructive,” Gurnee said. Every ship needs various forms of insurance, including annual war-risk cover as well as an additional ‘breach’ premium when entering high-risk areas. These separate premiums are calculated according to the value of the ship, or hull, for a seven-day period, Reuters reported. Last month, a Nikkei Asian Review report citing Japanese industry sources said additional insurance for tankers sailing through the Strait of Hormuz now cost 10 times what it did before two ships were attacked earlier in June. CNBC has not been able to independently verify these sources.

Here's why the Strait of Hormuz is the world's most important oil chokepoint - The Strait of Hormuz is a critical gateway to the world’s oil industry, with more than a fifth of global oil supply flowing through a narrow sea channel used by Gulf countries like Iran, Saudi Arabia and the United Arab Emirates. The strategically important waterway links crude producers in the Middle East with key markets across the world. Daily oil flow in the Strait averaged 21 million barrels per day in 2018, according to the U.S. Energy Information Administration (EIA). That’s the equivalent of about 21% of global petroleum liquids consumption — making it the world’s most important oil chokepoint. The EIA defines a chokepoint as a narrow channel along widely used global sea routes that are critical to energy security. Therefore, the inability of oil to transit a major chokepoint, even temporarily, can lead to substantial supply delays and higher shipping costs — resulting in higher world energy prices. Most chokepoints can be circumvented by using other shipping channels but some, such as the Strait of Hormuz, have no practical alternatives. Flows through the narrow channel in 2018 made up about one-third of total global seaborne traded oil. More than one-quarter of global liquefied natural gas trade (LNG) also transited the shipping channel last year. The Gulf region has been shaken by a period of heightened instability in recent months, threatening the flow of oil through the Strait. Six oil tankers and a U.S. spy drone have been attacked since May in, or near, the waterway amid intensifying tensions between the U.S. and Iran.

British Oil Tanker Seeks Shelter Over Fears It Could Be Seized By Iran -- After a former IRGC commander exhorted his government to take a British oil tanker hostage following the seizure by Royal Marines last week of a vessel hauling Iranian crude, an oil tanker run by British Petroleum is sheltering in the Persian Gulf over fears it could soon be seized by Iran in a tit-for-tat response, Bloomberg reports.  The tanker, which is named 'British Heritage', is able to haul about 1 million barrels of crude. It had been sailing toward Iraq’s Basrah oil terminal when it made an abrupt U-turn over the weekend.The ship is now hanging out near Saudi Arabia's coast because BP is reportedly worried that the vessel could be targeted if Iran seeks to retaliate for the seizure of the tanker Grace 1 on Thursday. The Grace 1 was seized after being caught transporting Iranian crude, in breach of sanctions. British Heritage, registered in the Isle of Man and flying under the British flag, had been chartered by Royal Dutch Shell Plc to transport crude from Basrah to northwest Europe. However, it never collected its cargo and the booking was canceled.Of course, the ship won’t be able to pass through the Strait of Hormuz, the chokepoint through which about 1/3 of global oil shipped by sea moves, without sailing close to Iran’s coast. It's unclear how long the ship will be sheltering for.

Oil Tankers Dodge Main Mideast Refueling Hub-- Oil tanker owners are avoiding sending their ships to the Middle East’s main refueling hub after a spate of attacks on vessels in the past two months ratcheted up tensions and highlighted the growing risks of operating in the region. Strikes on tankers just outside the Persian Gulf in mid-June were the second in a month near the Strait of Hormuz, the chokepoint through which about a third of global seaborne oil moves. Now demand for ship fuel at Fujairah, the United Arab Emirates coastal shipping hub close to the Strait, has waned as some tankers stay away, traders involved in the regional market said. “Only expect issues to get worse before they get better,” said Matt Stanley, a senior broker at Star Fuels in Dubai. Fujairah is seeing “a significant drop in demand owing to war-risk premiums” that are levied by ship insurers, he said. The root cause of the slump -- whether ships are avoiding the Middle East altogether or just skipping Fujairah -- isn’t completely clear. But since the attacks in early May, insurance costs have soared and some owners turned wary of sending their carriers to the region. One of the largest, Frontline Ltd., even temporarily paused trading from the Persian Gulf. Fujairah provides tankers with fuel, supplies and repairs as they ply the route from the Persian Gulf through the Strait of Hormuz to refineries the world over. Local officials say that there’s been no slump in refueling from facilities at the port itself, but that only captures a fraction of the trade. Carriers are also supplied at anchorage areas -- where four tankers were attacked in early May -- and it’s there that brokers and traders are reporting the drop-off.

Egypt Seizes Tanker Carrying Iranian Crude -  Tehran's threats of retaliation against the UK for seizing a tanker carrying Iranian crude oil for export have prompted a British vessel to shelter in the Gulf, but the rest of the world doesn't seem to be taking them too seriously. Citing local press reports, Middle East Monitor said Tuesday that a Ukrainian tanker carrying Iranian oil as it passed through the Suez Canal ten days ago was seized by the Egyptian government, just as Egypt's State Security Criminal Court was sentencing six people to lengthy jail terms allegedly for spying for Iran.Those defendants have all been sentenced to between 15 and 25 years in jail, a $30,000 fine and the confiscation of their computers and phones.Egyptian Al-Azhar Professor Alaa Moawad, who was present at the trial on Sunday, was accused of harming Egypt’s national interests and receiving money to spread Iranian Shiism in Sunni Egypt by launching a website, issuing publications and attracting recruits.Egypt is a staunch ally of the US, and as a Sunni-majority country, would naturally align with the UAE and Saudi Arabia in their efforts to contain Iran. Egypt also supports the Saudi-backed coalition in Yemen that is fighting to retain control in that country's brutal civil war. Cairo has  condemned the Houthis for the recent spate of attacks on Saudi infrastructure that have inflamed tensions in the region.Washington and Riyadh have blamed Iran for a series of attacks on oil tankers in and around the Strait of Hormuz, though there is some disagreement on this subject.Egypt's decision to seize the tanker adds another wrinkle to the intensifying tensions in the region, at a time when Iran is threatening to enrich uranium to any level it deems necessary, in contravention of the terms of the JCPOA.

Armed Iranian boats attempted to seize British oil tanker in Persian Gulf: reports - Boats believed to belong to the Iranian Islamic Revolutionary Guard Corps failed to seize a British oil tanker in the Persian Gulf on Wednesday, according to reports. U.S. officials with knowledge of the incident told CNN the British Heritage tanker was approached by five armed Iranian boats while sailing out of the Persian Gulf and crossing the Strait of Hormuz. Iranians told the tanker to change course and stop in nearby Iranian territorial waters, CNN reports. An overhead U.S. aircraft recorded a video of the incident, according to CNN. The Hill reached out to the U.S. Department of Defense for comment. Britain's Ministry of Defense had no immediate comment to Reuters, which reported a U.S. defense official also confirmed the incident. The attempt follows a warning issued from Iranian President Hassan Rouhani earlier in the day that the U.K. will see "consequences" after U.K. Royal Marines and Gibraltar officials reportedly seized an Iranian oil tanker allegedly bound for Syria. "You [Britain] are the initiator of insecurity and you will realize the consequences later,” Rouhani said, according to a Reuters report. CNN reports U.S. Chairman of the Joint Chiefs of Staff Gen. Joseph Dunford said Tuesday U.S. and its allies were working to put together ra coalition to create a system enforcing freedom of navigation in the region.

Iran Keeps Calm While U.S. And Britain Continue Their Provocations - Early today 'two U.S. officials' spread a scare story about Iran which lead to this CNN headline: Iranian boats attempted to seize a British tanker in the Strait of Hormuz Armed Iranian boats unsuccessfully tried to seize a British oil tanker in the Persian Gulf Wednesday, according to two US officials with direct knowledge of the incident.  The Iranians ordered the tanker to change course and stop in nearby Iranian territorial waters, according to the officials. The same 'two U.S. officials' briefed ABCNews: A British warship prevented an apparent attempt by five Iranian small boats to direct a British oil tanker towards Iranian waters on Wednesday, according to two U.S. officials. Remarkably the official British report came later than the U.S. officials briefing. It showed significant differences: The UK defence ministry said that "three Iranian vessels attempted to impede the passage of a commercial vessel, British Heritage, through the Strait of Hormuz."  "HMS Montrose was forced to position herself between the Iranian vessels and British Heritage and issue verbal warnings to the Iranian vessels, which then turned away," the ministry statement said. ..."There has been no confrontation in the last 24 hours with any foreign vessels, including British ones," the Revolutionary Guards said in a statement. The U.S. officials claimed 5, not 3 boats. They claimed the boats tried to seize the ship, while the Brits just say they probably were getting in the way of the ship. The U.S. officials 'direct knowledge of the incident' seems to be lacking. Iran says that nothing happened at all. There are reasons to believe that the Iranian statement is the most truthful one. The BRITISH HERITAGE is a crude oil carrier with an overall length of 274 m, a beam of 49 m and a maximum draft of 17.8 m. How three of the typical 20 feet long fiberglass speedboats of the IRGC could try to 'seize' or even 'impede' such a huge ships is not conceivable.

US State Department Now Says Drone Attack on Saudi East - West Pipeline Originated in Southern Iraq - In a change of the official U.S. assessment of the drone attack on Saudi Arabian oil infrastructure, the American government now says the drone attacks originated in southern Iraq and not Yemen, as previously reported. US officials added that the drones involved in this attack were more "sophisticated' that those used by Houthi rebels in Yemen. The 14 May drone attacks hit two pipeline segments along the major Saudi East-West oil pipeline. The Saudis said supply was not disrupted and that no one was injured. After further review, US officials familiar with the intelligence declared the attacks originated in southern Iraq, a charge which was promptly denied by Iraqi Prime Minister Abdul Mahdi. He said there was no evidence linking southern Iraq with such attacks. The drone attack followed the sabotage of four tankers off of the UAE coast, including two from Saudi Arabia. Just weeks later, two more tankers were attacked in the Gulf of Oman, near the Strait of Hormuz, further escalating tensions in the region.

Iran steps further from nuke deal, adding pressure on Europe (AP) — Iran increased its uranium enrichment Sunday beyond the limit allowed by its 2015 nuclear deal with world powers, inching its program closer toward weapons-grade levels while calling for a diplomatic solution to a crisis heightening tensions with the U.S. Iran’s move, coupled with earlier abandoning the deal’s limit on its low-enriched uranium stockpile, intensifies pressure on Europe to find any effective way around U.S. sanctions that block Tehran’s oil sales abroad. But the future of the accord that President Donald Trump unilaterally pulled the U.S. from a year ago remains in question. While Iran’s recent measures could be easily reversed, Europe has struggled to respond, even after getting a 60-day warning that the increase was coming. Meanwhile, experts fear a miscalculation in the crisis could explode into open conflict, as Trump already has nearly bombed Iran over Tehran shooting down a U.S. military surveillance drone. Trump warned Tehran on Sunday that “Iran better be careful.” He didn’t elaborate on what actions the U.S. might consider, but Trump told reporters: “Iran’s doing a lot of bad things.” International reaction to Iran’s decision came swiftly, with Britain warning Iran to “immediately stop and reverse all activities” violating the deal, Germany saying it is “extremely concerned,” and Israeli Prime Minister Benjamin Netanyahu, a longtime critic of the accord, urging world powers to impose so-called “snapback sanctions” on Tehran. The European Union said parties to the deal are discussing a possible emergency meeting after Iran’s announcement, with EU spokeswoman Maja Kocijancic saying the bloc is “extremely concerned” about the move. U.S. Secretary of State Mike Pompeo tweeted: “Iran’s latest expansion of its nuclear program will lead to further isolation and sanctions. Nations should restore the longstanding standard of no enrichment for Iran’s nuclear program. Iran’s regime, armed with nuclear weapons, would pose an even greater danger to the world.”

Factbox: Iran nuclear row - could U.N. sanctions return? (Reuters) - Iran said on Sunday it would further scale back its commitment to the 2015 nuclear deal with world powers, raising its uranium enrichment level beyond agreed levels to produce fuel for power plants. Tehran vowed to keep reducing its commitments every 60 days unless parties to the deal moved to protect it from U.S. sanctions. Such moves by Iran could ultimately lead to the return of all international sanctions on the country if a party or parties to the deal trigger its dispute resolution process. That process will not be triggered for now, said a source at French President Emmanuel Macron’s Elysee office on Sunday. The French government is giving itself until July 15 to try to get all parties talking again. Most U.N. sanctions were removed in January 2016 when the deal was implemented. It is formally called the Joint Comprehensive Plan of Action (JCPOA) and was agreed by the United States, Iran, Britain, China, France, Germany and Russia. U.S. President Donald Trump withdrew the United States in May 2018 saying the accord did not go far enough and did not address Iran’s missile program or activities in the Middle East. Iran argues that, under the nuclear deal’s dispute resolution process, the U.S. withdrawal and renewed sanctions campaign constitute “significant non-performance” and Tehran can “treat the unresolved issue as grounds to cease performing its commitments in whole or in part.” However, two Western officials with knowledge of the accord, speaking on condition of anonymity, said Iran has never formally triggered the dispute resolution process. Iran also argues that it can reduce in its commitment because, under a separate provision, the agreement said: “Iran has stated that it will treat such a re-introduction or re-imposition of the sanctions ... or such an imposition of new nuclear-related sanctions, as grounds to cease performing its commitments under this JCPOA in whole or in part.” Here is how the dispute resolution process, which could take up to 65 days to play out unless extended by consensus, works:

Netanyahu Compares Iran’s Uranium Enrichment Breach To Nazi March Into Rhineland -  Usually the 'reductio ad hitlerum' argument rolls out shortly before the West or its allies take some kind of military action against a Middle East regime. Following Sunday's announcement out of Iran that it's advancing its uranium enrichment beyond the 3.67% ceiling set by the 2015 nuclear deal with officials telling Reuters over the weekend that enrichment will go to 5% Israeli Prime Minister Benjamin Netanyahu did just that.  Speaking at a weekly cabinet meeting, Netanyahu told his ministers that it's a "mistake" to dismiss Iran's declaration as a mere "small step" given that the Nazis also took "small steps" in the 1930s before blitzing across European territory. He said Iran's enrichment “is for only one thing – to prepare nuclear weapons,” according to The Jerusalem Post.

Iran nuclear deal: Macron and Rouhani agree to look at conditions for talks - France and Iran have agreed to look at conditions for resuming talks to try to save Tehran's nuclear deal with world powers, President Emmanuel Macron says. During a phone call with President Hassan Rouhani, Mr Macron expressed his "strong concern" about the consequences of abandoning the 2015 accord. Mr Rouhani called on European countries to act urgently to save the deal aimed at curbing Iran's nuclear programme. The agreement has been in jeopardy since the US pulled out last year. President Donald Trump later imposed punishing sanctions on Iran. In May, Iran responded by stepping up production of enriched uranium, used to make reactor fuel but also potentially nuclear bombs. Iran has already stockpiled more enriched uranium than the country was supposed to. The country has been expected to announce on Sunday that it will breach another limit by taking the enrichment process to a higher level. It is going to be hard - if not impossible - to get the Americans back on board, BBC Diplomatic Correspondent Jonathan Marcus writes. The Europeans are struggling to do much to relieve the pressure on Iran from US sanctions and the fate of the nuclear deal itself is now more precarious than ever, he adds.  The French presidency published a statement (in French), saying that President Macron had spoken for more than an hour with his Iranian counterpart. Mr Macron said he was very concerned about the "risk of a further weakening" of the treaty and "the consequences that would necessarily follow". The statement said the two leaders had agreed "to explore by 15 July the conditions for the resumption of dialogue between all parties" - beyond a Sunday deadline announced by Iran. Mr Rouhani had previously given the five countries still party to the deal - the UK, France, Germany, China and Russia - until Sunday to meet their commitment to shield Iran from the sanctions' effects. The French statement also said Mr Macron would continue consultations with the Iranian side and international partners to reduce tensions.

US steps up threats as Iran exceeds uranium enrichment cap - The International Atomic Energy Agency (IAEA) Monday confirmed that Iran has breached the limit imposed by the 2015 nuclear agreement on the level at which it is allowed to enrich uranium. Iran had announced its breach of the limit on Sunday, a deliberate step aimed at pressuring the remaining signatories to the nuclear accord—particularly Germany, France and the UK—to take substantive steps to counter crippling US economic sanctions that are tantamount to a state of war. Washington has taken a series of actions that have placed the threat of a war in the Persian Gulf on a hair trigger, raising the specter of a catastrophic military confrontation in a region that is the source of a third of the world’s natural gas and a fifth of its oil. In May 2018, the Trump administration unilaterally abrogated the agreement, known as the Joint Comprehensive Plan of Action (JCPOA), that was reached between Tehran and six major world powers—the US, China, Russia, Britain, France and Germany. It not only reimposed nuclear sanctions that had been suspended with the agreement but implemented a series of even more punishing measures. The increase in the enrichment level—which had been capped at 3.67 percent and has risen to 4.5 percent, according to Iranian authorities—follows last month’s announcement by Iran that it was deliberately exceeding the 300 kg cap imposed by the JCPOA on its enriched uranium stockpiles. The country is supposed to export any excess amounts, but even that option has been undermined by the US “maximum pressure” sanctions regime. Tehran indicated that it will impose another 60-day deadline for the European powers to take concrete steps to ensure that Iran receives the sanctions relief that it was promised in return for its submission to drastic limits on its nuclear program.

Iran declares war on the USA’s covert influence in Iraq.- When US officials visited Baghdad and met with the Iraqi Prime Minister Adel Abdel Mahdi, they had two requests: first, to close all commerce and financial exchanges with Iran to strangle the Iranian economy and bring it to its knees. The second was to neutralise the Iraqi groups (known as Hashd al-Shaabi) which sympathise with Iran and carry a similar ideology. The Iraqi Premier is aware he is being pushed into the heart of two minefields, Iranian and American, and therefore he cannot just walk straight into these fields. He has decided to reject the first US demand because Iraq has religious, commercial and energy bonds with Iran. He is refusing to transform Iraq into a US-Iran battlefield where no winner can be expected to stay on his feet, including Iraq. He wants to force the US administration to back down and agree to provide Iraq with waivers to buy Iranian gas and keep commercial exchange flowing. What were Abdel Mahdi’s reasons for responding to US pressure? He did not want to have the Americans on his back or turn the country upside down. Therefore, though he refused to satisfy US officials in their first request, he did take account of the latter, seeking to avoid a potential coup d’état and a possible US manoeuvre to allow the return of the terrorist group “Islamic State” (ISIS). The Prime Minister issued Diwani Order (decree) no. 237 “to organise Hashd al-Shaabi, where all factions close their headquarters and have the option to either join the armed forces or engage in political activity (unarmed). Any faction acting secretly or publicly bypassing these instructions is forbidden. Compliance with the ultimatum is required by the 31 of July”. The US administration was satisfied with this move, but…

China Backs Iran: Trump ‘Started the Fire,’ ‘unilateral bullying’ ‘a tumor’ – China is openly blaming the Trump administration for the breakdown of the 2015 Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), according to the official Xinhua News AgencyForeign Ministry spokesperson Geng Shuang said at a daily press briefing, “The ‘maximum pressure’ against Iran imposed by the United States is the root cause of the crisis concerning the Iran nuclear issue.” He added that “unilateral bullying has become a tumor.”He added “that the U.S. has not only withdrawn from the deal unilaterally but also created an increasing number of hurdles against Iran and other parties through unilateral sanctions and long-arm jurisdiction.”The spokesman also rebuked Iran for tinkering around the edges with the terms of the nuclear deal.In its roundup for Monday, BBC Monitoring points out that Xinhua called Iran’s decision to enrich uranium to 5% instead of the 3.5% cap set in the JCPOA a “symbolic countermeasure.”This comment is correct. You can’t do anything with uranium enriched to 5%. You only need to enrich to 3.5% for reactor fuel. You’d have to enrich to 95% to make a bomb (something Iran is not known to be able to do and which the CIA has repeatedly assessed it is not trying to do). So enriching to 5% is just a symbolic way of tweaking Trump.Xinhua, BBC Monitoring reports, alleges that Iran has been “forced to fight back”g given severe US sanctions.In an editorial in English, Xinhua rebuked Trump for remarking that Iran is “playing with fire,” observing that “it is clear to all that Washington started the fire by unilaterally withdrawing from the deal and tightening anti-Iran sanctions.”The editorial concluded, “To prevent the situation from spiralling out of control, fully and effectively implementing the Iran nuclear deal is the only realistic and effective way to ease the tensions and eventually solve the Iran nuclear issue.” China continues to buy Iranian oil, apparently often on the sly and in ways that do not show up in official Iranian statistics.

Cholera Rips Through War-Torn Yemen- Nears 500,000 Cases In 2019 -- As the UAE announced this week it would withdraw its forces from Yemen as a longtime lead country in the Saudi coalition which has fought Houthi rebels since 2015, the United Nations issued a damning report on what it previously dubbed the "world's worst humanitarian crisis" and what many analysts have described as the "forgotten war," due to the little coverage it receives in the mainstream media. War-ravaged Yemen has seen more than than 460,000 suspected cholera cases so far this year, which is significantly higher that the total number for all of 2018, at 380,000 the UN stated early this week.This as the over four-year long war is has reached casualty numbers on par with the opening half of the Syrian war, expected to reach an estimated 233,000 deaths by the end of 2019, according to a previous UN report issued in May.  In addition to famine, malnutrition, cholera, and other diseases, the new UN statements noted lack of access to clean drinking water for vast segments of the population, which has facilitated the rapid spread of diseases uncommon in much of the rest of the world, specifically cholera. The AP cited UN deputy spokesman Farhan Haq as noting that the "increased number of cases has led to 705 apparent cholera deaths since January, dramatically higher than the 75 deaths in the same period last year."The UN also estimated that some 10 million Yemenis currently rely on food aid to survive - a figure that's 50% higher compared to pre-war assessments. The UN also confirmed "pockets of famine-like conditions in dozens of places across Yemen."

How UAE's Yemen Exit Is Preparation To Confront Iran Closer To Home - A United Arab Emirates decision to withdraw the bulk of its forces from Yemen shines a spotlight on hard realities underlying Middle Eastern geopolitics. The pullback suggests that the UAE is preparing for the possibility of a US military confrontation with Iran in which the UAE and Saudi Arabia could emerge as prime battlegrounds.  It also reflects long-standing subtle differences in the approaches of Saudi Arabia and the UAE towards Yemen. It further highlights the UAE’s long-standing concern for its international standing amid mounting criticism of the civilian toll of the war as well as a recognition that the Trump administration’s unquestioning support may not be enough to shield its allies from significant reputational damage. The withdrawal constitutes a fine-tuning rather than a reversal of the UAE’s determination to contain Iran and thwart political Islam witness the Emirates’ involvement in the Libyan civil war and support for renegade field marshal Khalifa Belqasim Haftar as well as its support for the embattled Sudanese military and autocrats like Egyptian general-turned-president Abdel Fattah al-Sisi.  While the UAE may have withdrawn the bulk of its troops from key regions of Yemen, it leaves behind Emirati-trained local forces that will continue to do its bidding. The withdrawal, moreover, is not 100 percent with the UAE maintaining its Al-Mukalla base for counterterrorism operations. The UAE’s commitment to assertive policies designed to ensure that the small state can continue to punch above its weight are also evident in its maintenance of a string of military and commercial port facilities in Yemen, on the African shore of the Red Sea, and in the Horn of Africa as well its hard-line towards Qatar and rivalry with Turkey. As part of its regional and international projection, the UAE is keen to maintain its status as a model for Arab youth and preferred country of residence. The UAE’s image contrasts starkly with that of Saudi Arabia, the custodian of Mecca and Medina, Islam’s two holiest cities. Crown Prince Mohammed bin Salman’s policies, including the clampdown on domestic critics and the Yemen war, have prompted embarrassing calls by prominent Islamic scholars for a boycott of the pilgrimage to Mecca, one of the five pillars of Islam.

 Saudi Arabia deports 858,355 illegal residents since November 2017 -- Saudi Arabia has deported at least 858,355 illegal foreigners since November 2017 in a nationwide crackdown that saw more than 3.44 million people rounded up in various parts of the Kingdom for violating residency and labor regulations. The Interior Ministry said security forces apprehended a total of 3,443,455 expatriates in what is dubbed as a Nation Free of Illegals campaign until Thursday, July 4, the Saudi Press Agency reported late Friday quoting campaign officials. The campaign was launched in mid-November 2017 with the participation of 19 ministries and government departments including the Ministry of Labor and Social Development and the Directorate General of Passports. The officials said 2,684,975 people were arrested for violating the system of residency, 531,195 for not adhering to labor regulations and 227,285 for trying to breach border security. They said 58,032 people were arrested while sneaking into the Kingdom through its southern borders. About 47 percent of the infiltrators were Yemenis, 50 percent Ethiopians and 3 percent from various other nationalities. According to the campaign sources, 2,511 people were caught while attempting to leave the Kingdom illegally while 3,988 people were charged with sheltering illegal residents by providing with accommodation and transportation. They included 1,372 Saudi nationals, of whom 1,331 were released after they underwent punishments while 41 others are still under investigation. The sources said 13,000 illegal expatriates, including 11,047 men and 1,953 women, were currently being held in various detention centers in the country. They said 446,179 violators were referred to their respective embassies and consulates to issue them travel documents while 569,346 were completing their flight bookings for final exit from the Kingdom.

The Taliban Have Won In Afghanistan -  On June 26 two US special forces soldiers were killed in Afghanistan, bringing the total of US military personnel who have died in that useless war to 2429, according to iCasualties, an independent casualty tracker.   What did they die for?  According to the US State Department the military are there because “we continue to invest US resources to help Afghanistan improve its security, governance, institutions and economy,” and the Pentagon says the principle goal… is to conclude the war in Afghanistan on terms favourable to Afghanistan and the United States.”  How?  Neither the current occupant of the White House nor any others aspiring to become president in 2020 have produced any workable proposals to end this disastrous conflict, and in an exchange of views on June 27 two of the Democratic contenders cast some light on the darkness of frustration and confusion. Members of Congress Tim Ryan and Tulsi Gabbard had a heated argument that involved Gabbard (who had served in Iraq) declaring that “The Taliban was there long before we came in; they’ll be there long before we leave. We cannot keep US troops deployed to Afghanistan thinking that we’re somehow going to squash this Taliban.” Even if she didn’t offer a solution, she is perfectly right — but it was the rejoinder of Congressman Ryan that was eye-opening. He said “I didn’t say squash them. When we weren’t in there, they started flying planes into our buildings.”  Gabbard was astonished, as well she might be, and replied “The Taliban didn’t attack us on 9/11; al-Qaeda did. That’s why I and so many other people joined the military — to go after al-Qaeda. Not the Taliban.”  Exactly.   Fifteen of the 19 al-Qaeda hijackers were Saudis, two came from the United Arab Emirates and one each from Lebanon and Egypt. USA Today reported that they had “multiple links to associates of Saudi Arabian Prince Bandar, the former longtime ambassador to the United States. The documents show possible conduits of money from the Saudi royal family to Saudis living in the United States and two of the hijackers in San Diego. The documents also indicate substantial support to California mosques with a high degree of radical Islamist sentiment.” Not a Taliban in sight. In spite of the fact that the head man, the evil bin Laden, was in Afghanistan (and was later killed in Pakistan in a US special forces raid) the main 9/11 planning centre was in Hamburg.

Walmart’s Supplier Says Chinese Factories in ‘Desperate’ State - The world’s largest supplier of consumer goods says China’s factories are getting “urgent and desperate” as worried U.S. retailers accelerate a move out of the country amid heightened trade tensions. China will see more factory shutdowns as the trade war that’s roiled the global supply chain exacerbates an exodus, said Spencer Fung, chief executive officer of Li & Fung Ltd. The company, which designs, sources and transports consumer goods from Asia for some of the world’s biggest retailers including Walmart and Nike, is being pushed by American clients to shift production out of China. “U.S. clients are definitely very, very worried,” Fung said in an interview with Bloomberg. “Everyone is making razor-thin margins already and most people have a huge percentage in China. So if the biggest source increases the price by 25%, they are worried,” he said, referring to the scale of tariffs threatened on all Chinese imports to the U.S. by President Donald Trump. Though Fung didn’t specify Walmart by name, the U.S. retailer is the company’s second-biggest customer after Kohl’s, accounting for 7.6% of revenue, according to Bloomberg data. A spokeswoman for Walmart declined to comment. Because of its position as middleman connecting American retail giants to low-cost Asian factories, Li & Fung has a unique, ground-level perspective of the seismic shifts taking place around the world due to the trade war. Although the U.S. and China have resumed talks on a deal, there are growing signs that the global supply chain, long reliant on China as the factory to the world, is being permanently transformed. Intel has said it’s reviewing its global supply chain, while others including Apple and Amazon are reportedly doing the same. “Nobody’s investing, nobody’s buying. The trade war is causing people to stop investment because they don’t know where to put the money,” the Silicon Valley-trained CEO said. “Many people put the money into Vietnam with one tweet,” he said, referring to Trump’s habit of announcing American trade policy over the social media tool.

China Producer Prices Signal Looming Deflation Threat - Despite an avalanche of monetary and fiscal easing, record-breaking credit injections, and the media's insistence that a trade war will cause inflation carnage, China's producer prices were unchanged year-over-year in June - the weakest since August 2016. Producer Goods (-0.3%) and Raw Materials (-2.1%) were the biggest deflationary drivers of PPI's weakness. At the same time, China consumer prices rose 2.7% YoY (as expected), hovering near its highest since Feb 2018. Food As Bloomberg notes, the deceleration brings back fears of a return of deflation which would erode companies’ profit and their ability to repay debt. In the longer term, lower factory prices in China could put pressure on global inflation outlook via exports. Going forward, “a rising base effect will likely help bring down headline CPI, barring sudden surges in food prices; and PPI may be capped due to a rising base and overall lackluster demand,” Eva Yi, economist at China International Capital Corp. wrote in a note. However, given the relationship with China's lagged credit impulse, we suspect deflation will threaten China for at least the next six months, before taking off...

Facebook’s Libra Must Be Regulated by Central Banks: PBOC Official  - Social networking giant Facebook published a white paper on its cryptocurrency project Libra last month, drawing the attention of major regulatory authorities worldwide.  Whether from the perspective of monetary policy or macroprudential management, Libra, a convertible digital currency that can flow freely across borders, should receive support and supervision from central banks and be incorporated into their regulatory frameworks, Mu Changchun, a deputy head of the People’s Bank of China’s Payment and Settlement Department, said in an article published in Caixin Weekly.  Libra won’t be pegged to one specific fiat money, but will be backed by “a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks,” the white paper said.   Read Mu’s full analysis on how Libra will affect monetary policy, macroprudential management and the technology roadmap of digital currency on Caixin Global later today.

Fresh clashes in Hong Kong after huge march - Fresh political violence broke out in Hong Kong on Sunday night as riot police baton-charged anti-government protesters seeking to keep the pressure up on the city’s pro-Beijing leaders, after a mass rally outside a train station linking the finance hub to mainland China. Hong Kong has been rocked by a month of huge marches as well as separate violent confrontations with police involving a minority of hardcore protesters, sparked by a law that would have allowed extraditions to mainland China. Sunday’s clashes came hours after the first demonstration since young, masked protesters stormed parliament on Monday, plunging the city into an unprecedented crisis. The extradition bill has been suspended following the backlash. But that has done little to quell public anger, which has evolved into a wider movement calling for democratic reforms and a halt to sliding freedoms in the semi-autonomous city. Earlier on Sunday tens of thousands of people snaked through streets in the harbour-front district of Tsim Sha Tsui, an area popular with Chinese tourists, ending their march at a high-speed train terminus that connects to the mainland. The march was billed as an opportunity to explain to mainlanders in the city what their protest movement is about given the massive censorship that Beijing’s leaders wield. It passed without incident. But late Sunday police wielding batons and shields charged protesters to disperse a few hundreds demonstrators who had refused to leave. AFP reporters saw multiple demonstrators detained by police after the fracas, their wrists bound with plastic handcuffs. By early Monday only pockets of demontrators remained with police occupying key intersections around the protest area. The scene of the clashes — Mongkok — is a densely-packed working class district, which has previosuly hosted running battles between police and anti-government protesters in 2014 and 2016.

Why the chaos and polarisation in Hong Kong should be blamed on Carrie Lam’s regime, not the protesters --After the break-in of the Parliament by protesters, pro-democracy lawmakers and the Hong Kong public were momentarily caught by a doubt. Did youngsters walk into a carefully choreographed trap set by the government, to swing public opinion against the anti-extradition movement, discredit and divide it?I believe this question is not as relevant as many might have thought, if we remind ourselves of the context of conflict, and ask ourselves what made these young citizens take a move so risky and potentially self-destructive. In recent months, there have been massive marches in protest at the extradition bill. Several million citizens, almost one-third of the population, have taken to the streets, some of them more than once, to oppose the bill.Over a million on the 9th June, over two million on the 16th June, and another half a million on the 1st July poured into the streets in a perfectly civilised and orderly manner to make their voices heard. Three citizens have also fallen to their deaths, leaving messages about the protests.On the morning of June 12, young students, housewives and old men braved rubber bullets, batons, tear gas canisters and beanbag rounds, in an attempt to stop the government bulldozing the bill through the parliament. Our demands were perfectly legitimate and clear: scrap the bill, drop charges against the protestors, and set up a judge-led independent inquiry into police actions. These have all fallen on deaf ears.

Public increasingly backing radical Hong Kong protesters despite unease over violence, say academics, as Carrie Lam’s government faces even greater resistance against extradition bill Hong Kong's pro-democracy movement against the extradition bill received a shot in the arm on Sunday to keep the pressure on the government to completely withdraw the unpopular legislation, political commentators said after the mass rally in Kowloon. The fact the older generation had turned out in force to support youngsters spearheading the movement meant that the recent protest violence, widely condemned across the city, had not turned public opinion in favour of the administration, they said. Speaking after Sunday’s protest in Kowloon that organisers said was attended by more than 230,000 people, Dr Cheung Chor-yung, a senior teaching fellow at the City University’s department of public policy, said: “By whatever measure, the turnout was huge. “Some people are getting more sympathetic to the protesters because they see that the government is too stubborn and has not responded to the demands by the protesters despite rounds of protests, be they peaceful or violent. “The general public may not support the mob that stormed the legislature, but that does not mean they would support the Carrie Lam Cheng Yuet-ngor government’s handling of the issue.”

Hong Kong extradition bill ‘is dead’ says Carrie Lam - BBC - Hong Kong leader Carrie Lam has said the controversial bill that would have allowed extradition to the Chinese mainland "is dead". At a press conference on Tuesday, Ms Lam said the government's work on the bill had been a "total failure". But she stopped short of saying it had been fully withdrawn, and protesters have vowed to continue mass rallies. The bill sparked weeks of unrest in the city and the government had already suspended it indefinitely. "But there are still lingering doubts about the government's sincerity or worries whether the government will restart the process in the Legislative Council," Ms Lam told reporters. "So I reiterate here, there is no such plan. The bill is dead." She had previously said the bill "will die" in 2020 when the current legislative term ends. Protest leaders have reacted angrily to Ms Lam's latest attempt to placate them. Bonnie Leung of the Civil Human Rights Front, which has organised demonstrations, said further protests would be held until the Hong Kong government meets five key demands. These include the full withdrawal of the bill and the dropping of charges against those detained during recent protests.

There's No Escape - One Japanese Bank Owns Over Half A Trillion Dollars In US Bonds - What do you do if you are a major Japanese investor, whose mandate is to invest in safe assets, yet the yield on Japanese govvies is too low to cover the cost of your liabilities?   That's the question that Japan Post Bank Co., the banking unit of Japan Post Holdings, has been grappling with. Its answer: buy and hold over half a trillion dollars, or $577 billion to be precise, worth of foreign corporate bonds. That, as Bloomberg notes, is "more than the investment-grade portfolio at Fidelity Investments or the fixed-income holdings at Britain’s Standard Life Aberdeen Plc." And since Japan Post is a public company, majority-owned by the government, it means that one Japanese bank (really, Japan, due to its state-ownership)  is directly funding countless US-based corporations, resulting in hundreds of billions in stock buybacks , and this bank is also indirectly funding the hiring of thousands of US workers. In this "new normal" era of super low rates, this represents a major change from just a decade ago, when the foreign bond portfolio at Japan Post Bank was virtually nil. This new global bond market "whale" did not emerge voluntarily: as a result of decades of ZIRP and NIRP, Japan Post was effectively pushed out Japan's bond market and forced to look for investment opportunities elsewhere. Long-term yields in Japan are around 0%, far below even the exceptionally slim rates in the U.S, crippling the business model the postal bank used for more than a century.

Passenger vehicle sales fall 18% in June; car sales decline 25%: SIAM -Domestic passenger vehicle (PV) sales declined by 17.54 per cent to 2,25,732 units in June from 2,73,748 units in the year-ago period. Domestic car sales were down 24.97 per cent to 1,39,628 units as against 1,83,885 units in June 2018, according to data released by the Society of Indian Automobile Manufacturers (SIAM) on Wednesday. Motorcycle sales last month declined 9.57 per cent to 10,84,598 units as against 11,99,332 units a year earlier. Total two-wheeler sales in June declined 11.69 per cent to 16,49,477 units compared to 18,67,884 units in the year-ago month. Sales of commercial vehicles were down 12.27 per cent to 70,771 units in June against 80,670 units in the same period a year ago, SIAM said. Vehicle sales across categories registered a decline of 12.34 per cent to 19,97,952 units from 22,79,186 units in June 2018, it added. In fact, all vehicle categories witnessed decline in sales during the month. In the April-June period PV sales declined 18.42 per cent to 7,12,620 units compared with 8,73,490 units in the year-ago period. Vehicle sales across all categories declined by 12.35 per cent to 60,85,406 units in the April-June period against 69,42,742 units in same period of last year.

Apple's India iPhone Sales Crash 42% - According to The Economic Times, Apple’s continuing slowdown in India has translated into a 42% decline in iPhone shipments in 1Q19 from a year before. During the first quarter, Apple shipped 220,000 iPhones in India, followed by an improvement in April thanks to carrier discounts. In May and June, however, iPhone sales plunged again. Neil Shah, research director at Hong Kong-based Counterpoint Technology Market Research, said the full-year estimate for iPhone shipments in India is 1.5 million to 1.6 million, a 10-17% drop from 2018 and as much as 53% collapse from the peak shipment of 3.2 million in 2017. Apple could start manufacturing its iPhones in India through Foxconn, with an initial monthly capacity of 250,000. About 75% of the iPhones may be exported as Apple figures out how to rework its supply chains outside of China. “Apple had a disappointing run in 2018 and the outlook for 2019 looks weaker, with shipments having fallen further compared to last year, with the exception of April, thanks to price correction that month,” said Shah. The Times said Apple is preparing to transform India into a major production hub than a top producing market, and intends to scale up local manufacturing amid US-China trade tensions.

DHL Sounds Alarm On Collapsing World Trade- Significant Downturn Underway - A new quarterly report from logistics company DHL, measured global air and sea cargo trade volumes between March and June, found trade data continues to deteriorate in the US and China as there is still no resolution to end the trade war, reported South China Morning Post (SCMP).Chinese imports were "losing significant momentum," the report stated, indicating the epicenter of the slowdown was situated in basic raw materials, capital equipment and machinery, and consumer fashion goods. The loss of momentum in DHL trade data has also been confirmed in official Chinese import data releases. The report indicated that the US trade outlook is more dangerous than China: DHL expected a "significant downturn, driven by heavy losses in exports outlook." DHL said both air and sea freight have plunged into negative territory in 2Q19, with extreme weakness in basic raw materials, chemicals, and technology. "The declining outlook for US exports indicates that, so far, the US is missing its goal of strengthening its export economy with a harsher trade course against China," DHL said.

Australian police monitoring journalists’ travel and Internet data -- Revelations this week point to intensive Australian Federal Police (AFP) surveillance of journalists, aimed at prosecuting journalists, as well as their sources, to stop the publication of leaks about abuses committed by the military-intelligence apparatus. First came a report that the AFP obtained an Australian Broadcasting Corporation (ABC) journalist’s flight records from Qantas. This was part of a government-ordered investigation of the leak of documents revealing illegal killings and other abuses by Australian Special Forces as part of the US-led invasion and occupation of Afghanistan. By all indications, this is just the tip of the iceberg, involving vague and sweeping police powers. The revelation came just weeks after AFP raids on the Sydney headquarters of the ABC and the Canberra home of a News Corp political editor, Annika Smethurst. At both locations, police spent hours poring through and seizing material. This is part of escalating efforts to criminalise exposures about key military and intelligence operations. Significantly, the Special Forces are on the frontline of all Australian military interventions, while Smethhurt reported plans to legalise domestic surveillance by the Australian Signals Directorate, the country’s US-linked electronic spy agency. Qantas handed over to the AFP the 2016 travel records of ABC reporter Dan Oakes, one of the two journalists involved in the exposure of the Afghanistan war crimes. An AFP statement dated April 1 this year, obtained by Nine Media outlets, was titled “Statement in the matter of R v Daniel Michael Oakes.” That points to the police pursuing a prosecution of Oakes, contradicting earlier comments by Attorney-General Christian Porter. In an attempt to quell the public outrage over the two police raids, Porter had told the media there was “absolutely no suggestion that any journalist is the subject of the present investigations.”

Venezuela opposition, gov’t to resume Norway-backed talks: Guaido Venezuela's self-declared interim President Juan Guaido said on Sunday a new dialogue mediated by Norway between the opposition and President Nicolas Maduro's government would be held in Barbados. He did not specify a date for resumption of the talks at the new venue, in the Caribbean, after earlier discussions were stalled in Norway. "In response to the mediation of the Kingdom of Norway (the opposition) will attend a meeting with representatives of the usurper regime in Barbados, to establish a negotiation on the end of the dictatorship," Guaido said in a statement. Delegations representing the Venezuelan rivals met face-to-face in Oslo for the first time in late May, in a process that began two weeks earlier under Norwegian auspices to find a solution to the South American country's economic and political crises. Oil-rich Venezuela has been ravaged by five years of recession marked by shortages of food, medicine and other basic necessities.

Venezuela’s Maduro ratifies Padrino as defense minister (Reuters) - Venezuelan President Nicolas Maduro on Sunday announced he will maintain Defense Minister Vladimir Padrino in his post, following months of rumors that top military brass would be replaced after a failed uprising in April. The Trump administration identified Padrino among the top officials involved in negotiations with opposition leader Juan Guaido to create a transition government on April 30, in response to the country’s economic meltdown. Since then, Padrino has publicly professed loyalty to Maduro along with the majority of the armed forces, which are seen as the main reason why Maduro held on to power despite a hyperinflationary collapse. “I’ve decided to ratify ... Vladimir Padrino as minister so that he can continue to shine with his disposition, his intelligence, with his military leadership,” Maduro said during a military ceremony broadcast on state television. The U.S. Treasury Department in 2018 sanctioned Padrino for helping Maduro maintain power through control of the military.

After Istanbul voters rejected Turkish strongman Erdogan, he made them vote again — and lost by the biggest landslide in 35 years --Turkish President Recep Tayyip Erdogan (previously) was dealt a stinging rebuke in March, when voters in Istanbul overthrew his AK Party, which had run the city for 25 years; Erdogan had previously said "whoever wins Istanbul, wins Turkey."Erdogan's 15+ years in Turkish high office has been a steady march to authoritarianism, including violent attacks on peaceful protest movements;mass arrests and purges of civil society groups, university faculties, the military and police, the seizure of sweeping dictatorial powers, mass-scale financial misconduct -- even building himself a $1b palace at public expense.So it was not really surprising that Erdogan's response to his electoral loss was to nullify the election, citing imaginary irregularities, and ordering a re-run. Erdogan began his national political career when he was elected as mayor of Istanbul in 1994.The election ran again at the end of June -- and Erdogan lost again, by a landslide. The March election was carried by a margin of 13,000 votes, while AKP and Erdogan lost the re-run by more than 75,000 votes. It's Istanbul's biggest mayoral election victory in 35 years.The new mayor of Istanbul is Ekrem Imamoglu of the Republican People's Party (CHP), whose campaign slogan was "justice, equality, love" and who ran on a promise to end AKP's lavish croynism and waste (the city's annual procurements budget is $4b). During the election, AKP smeared Imamogluwith a variety of ad-hominems: "terrorist, coup-supporter, fraud, Greek, even equating him with the Egyptian autocrat President Sisi,"

Lira Crashes After Erdogan Unexpectedly Fires Turkey's Central Bank Governor - Just as glimmers of hope were starting to emerge that Turkey may finally crawl its way out of the deep hole it dug for itself last summer... and Erdogan happens.   The Turkish Lira has opened in early trading, crashing over 16 handles...  So what will Erdogan do to support the Lira this time? Ziad Daoud, Bloomberg's Mideast economist pointed out:  “If Erdogan’s aim was to get lower interest rates, then the decision to replace the governor could backfire. Now there’s an additional credibility constraint, with financial markets certain to scrutinize the motivation and magnitude of any easing.”  As we detailed yesterday, the world sure can be an ironic place: just one week after the Bank of International Settlements highlighted Turkey as the case study of all the bad things and political costs resulting from political meddling and intervention in a central bank's affairs, when BIS General Manager Agustin Carstens said  "you see the government undermining the autonomy of the central bank and at the same time you see the negative consequences,” adding that looking at Turkey, other countries can "see what happens when the government tinkers with the autonomy", Turkey's president Erdogan had just one message: "hold my bear."  That's right: two weeks after Erdogan appeared to finally throw in the towel on aggressively authoritarian practices when he conceded the loss of the Istanbul election revote to his ruling party's primary challenger in a surprisingly subdued response, the "executive president" reminded everyone just why Turkey remains a consummate economic basket case, when on Saturday morning, Erdogan unexpectedly fired Murat Cetinkaya as central bank governor, after he reportedly refused an informal request to resign, according to Bloomberg which also correctly notes that the decision to terminate the centrist central banker risks a furious market backlash just as foreign money started returning to Turkey, which was expected to start interest-rate cuts in the immediate future.

Italy's 50 Year Bonds Are 6x Oversubscribed As Investors Lose Their Minds -  With over $13 trillion in global notional debt trading with a negative yield, it will hardly come as a surprise that there is a line of investors stretching around the block for even the le ast fundamentally sound bonds which still offer a modest positive yield, such as those which for the past 2 years were only purchased by the ECB. We are of course talking bout Italian bonds, and not just any variety, but 50-year bonds issue offered by Europe's financial problem child.The frenzied demand for Italian bonds that won't be repaid in most investors' lifetimes (they mature in 2067) - or perhaps ever, if Italy defaults on its debt - was such that they attracted demand of over €17.5 billion for the €3 billion offering, making them roughly 6x oversubscribed, despite a yield of just 2.9%, almost a full percent lower than what this paper yielded in late 2018. To Bloomberg this represents the "latest example of the intense hunt for yield spurred by dovish monetary bets. even as the stronger-than-expected U.S. jobs report on Friday clouds the case for aggressive monetary easing." Meanwhile, as Italian bond yields tumble on expectations that the ECB will restart its QE in the coming months, Europe is slowly collapsing under Albert Edwards' ice age, and the number of corporate junk bonds trading with a sub-zero handle in euros now stands at 14, compared to zero at the start of the year. Even emerging-market issuers are joining the not-so-exclusive negative yield club, while a whopping 27% of Europe's investment grade bonds are now trading with a negative yield sign.

Negative-Yielding Junk Bonds Have Arrived in Europe - Wolf Richter - Amid rampant market expectations of another and even bigger and grander round of QE by the ECB, which would also be buying corporate bonds and old bicycles, the total amount of bonds with negative yields has risen to nearly $13 trillion, according to Bank of America Merrill Lynch.The perversion of negative interest rates imposed by central banks such as the ECB, the Bank of Japan, the Swiss National Bank and a slew of others, and the even bigger perversion of negative-yielding corporate debt apparently does a job on investors’ minds.In a negative-yield environment, you can no longer buy bonds to hold them to maturity because you’d be guaranteed a loss. You’d have to buy them solely on the hopes of even more deeply negative yields in the near future that would allow you to slough off these critters to the next guy before they eat you up.And this type of thinking has now completely wiped out whatever was left of investors’ capacity to act rationally. Once you start getting into central-bank mandated negative yields, rationality no longer applies because negative-yielding debt is irrational by definition: Why would you pay someone to borrow money from you?And this type of intellectual short-circuit has now spread to euro-denominated junk bonds. These are risky bonds that are too risky to be considered “investment grate.” They were issued by over-leveraged companies with iffy or negative cashflows and a considerable probability of default, especially during a downturn. And yes, you guessed it: there are now 14 junk-rated companies with euro-denominated bonds that have negative yields, according to Bloomberg: (see list)

EU Top Jobs: Backroom Deal or Member States in Charge? Europe is this week coming to terms with the divisions and drama around the nomination of Ursula von der Leyen as the new European Commission president. Was this a grubby backroom deal, or a case of EU leaders simply reclaiming control over Europe's most coveted post? The bruising process saw Ms von der Leyen win the last-minute support of EU leaders on Tuesday, but the medics are picking their way through the battlefield to see who is most seriously injured. A narrative has developed that the Spitzenkandidat process itself has been irreparably damaged, that Chancellor Merkel is a weakened figure, and that the outcome reflects badly on European democracy. All three notions can be contested. Firstly, a reminder of the Spitzenkandidat process. The idea was championed by the European Parliament in 2013 as a way to help voters feel they had a stake in electing the European Commission president. The main political groups would nominate their "lead candidate" long before the European Parliament elections, who would put forward their ideas so voters could chose and, if they wished, vote for the national party which was a member of the European group whose lead candidate was known. In 2018 Manfred Weber, a German MEP, was overwhelmingly elected the EPP's Spitzenkandidat at a party congress in Helsinki. However, Chancellor Merkel’s public support for Mr Weber was nuanced to say the least. EPP sources suggest that a year previously the Chancellery had their hopes pinned on Peter Altmaier, the Federal Minister for Economic Affairs and Energy and a member of Ms Merkel’s CDU party, as Commission President. Ms Von der Leyen’s name was also mentioned, but only in dispatches. But both politicians had ministerial experience. Mr Weber had not. However, as the European Elections approached, the EPP was sticking by Manfred Weber. Toiseach Leo Varadkar supported him in Helsinki, and publicly supported him when asked in the run up to May’s elections. Other EU leaders continued to question the Spitzenkandidat idea. Xavier Bettel, the Luxembourg prime minister, told reporters in Romania in May: "Spitzenkandidat is a party organisation. Journalists and we speak about Spitzenkandidaten. Ask my voters - they have no clue who is the Spitzenkandidat from any party." Emmanuel Macron was the most explicitly opposed. The French President had never supported the idea, preferring transnational lists as a way to give voters more ownership of appointments of the top jobs. "I don't think this is the right way," he said in early May. "Our citizens have had enough of pre-cooked meals." But Macron had been pointedly dismissive of Manfred Weber, repeatedly talking about the need for "competent" candidates who would shine on the world stage..

Who killed the Spitzenkandidat? - It's a Brussels murder mystery that would flummox even Hercule Poirot: Who killed the Spitzenkandidat?Accusations are flying over the death of the "lead candidate" system for choosing the president of the European Commission, the EU's most powerful job. It's a crime story that's also a political drama — played out over multiple summits including a day-and-night marathon earlier this week — about how the European Union should be governed.Making the case particularly fiendish: Some confessions may not be all they seem and some of the most indignant accusers are also prime suspects.Manfred Weber, the German center-right candidate, has pointed the finger at an unholy alliance of French President Emmanuel Macron and Hungarian Prime Minister Viktor Orbán.French officials and others suggest Weber look closer to home — at himself and his European People's Party (EPP).Members of the European Parliament blame leaders of EU member countries, who cast aside the lead candidate system to choose German Defense Minister Ursula von der Leyen on Tuesday as their surprise nominee for the Commission presidency. But MEPs themselves are also accused of sabotaging a system they claim to hold dear.In time-honored tradition, POLITICO's in-house detectives — combining the steeliness of Taggart, the empathy of Montalbano, and the method of Maigret — have gathered the suspects to go through the case against each one, before revealing the truth.

Greek election: Tsipras out, Mitsotakis in Greece has ended its four-year romance with the far left in a victory for the centre-right New Democracy party in Sunday's (7 July) elections. Its leader, Kyriakos Mitsotakis, a 51-year old ex-banker from a political dynasty, won some 40 percent of the vote, gaining him more than 150 seats out of 300 in parliament under a bonus-seat system. The Greek president will invite him to govern on Monday and his cabinet will be sworn in on Tuesday. Mitsotakis won by promising to cut taxes, privatise services, and create jobs, which his left-wing rivals had failed to do. He travelled the four corners of Greece holding town-hall debates over the past two years. He poached far-right votes by railing against migrants. He also poached them by attacking Greece's recent name deal with North Macedonia, which had angered nationalists by downplaying what they saw as irredentist claims to a Greek region of the same name. His victory pushed the far-left Syriza party of Alexis Tsipras into second place with some 30 percent. Three small left-wing parties also scraped past the three percent threshold to enter parliament, including the MeRA25 party of Tsipras' former finance minister Yanis Varoufakis. The right-wing and pro-Russian Greek Solution also scraped past, initial counts showed. But the neo-Nazi Golden Dawn party looked set not to make it.

Italy arrests 18 for allegedly brainwashing and selling children  Italian police have arrested 18 people including a mayor, doctors and social workers for allegedly brainwashing vulnerable children into thinking their parents had abused them so they could then be sold to foster parents.  Police in the northern city of Reggio Emilia made the arrests after an investigation started in 2018 revealed an alleged network of carers who used methods including electroshock to make the children believe they had been sexually abused.The network then allegedly gave the children to foster families in exchange for cash, while keeping gifts and letters sent to the children by their real parents hidden in a warehouse that was discovered by police. The alleged abuse was reported by Italian media and confirmed to AFP by police in Bibbiano, near Reggio Emilia, on Thursday. "These accusations, if confirmed, are frightening and shocking," Italian Prime Minister Giuseppe Conte said at the G20 meeting in Japan. The accused include psychotherapists working for a social work association in Moncalieri, near Turin, and the mayor of Bibbiano. To brainwash the children, those arrested allegedly forged child-like drawings with sexual connotations and used electroshock therapy as a "little memory machine" to create fake abuse memories, while the therapists are accused of dressing up as "wicked" children's story characters.

Why the EU’s new appointments will not shift the Brexit game – yet -   After three days of gruelling talks, EU leaders announced their preferred choices for the EU’s top jobs. The first two will not require the approval of the European Parliament: Christine Lagarde of France, who will leave the International Monetary Fund, has been nominated for the European Central Bank, while Belgian Prime Minister Charles Michel will head the European Council – the grouping of EU heads of state and government. EU leaders also put forward German Defence Minister Ursula von der Leyen, a less familiar figure, for the role of European Commission President, and Spanish Foreign Minister Josep Borrell for High Representative. If Ursula von der Leyen secures the backing of MEPs, she will become the first woman to head the European Commission. Of course, Brexit will not have been at the forefront of EU leaders’ minds when selecting candidates – after all, Prime Minister Theresa May was in the room. Rather, Eurozone reform and strengthening the EU’s borders will have dominated their thinking. EU countries are also reluctant to let Brexit dominate the agenda. What’s more, the UK will not be negotiating with any of the new appointments on Brexit straightaway. The new European Commission Presidency starts on 1 November – after the UK’s current extension deadline – and Charles Michel will only take up his new role on 1 December. So if a new British prime minister is intent on renegotiation, he will still be negotiating with the current European Commission.In any case, EU governments remain the most important players on Brexit – with the European Commission President and his/her Chief Brexit Negotiator acting under strict joint guidelines from national governments. The power play will not change: the European Commission will not become one player among 28, but instead will continue to act on behalf of the 27 member states. So both this Commission and its successor have limited flexibility to negotiate a new deal unless member states agree.

Conservative leadership race: Voters ‘issued two ballots’ Some Conservative members have been issued with more than one ballot paper to vote for the next party leader and prime minister, the BBC has learned. One party insider estimated that more than a thousand voters could be affected. Members are warned that voting twice will mean they are expelled, the Conservatives said. Meanwhile, Boris Johnson has unveiled his crime policy, while Jeremy Hunt said cuts on policing had gone too far. Ballot papers have been dispatched to around 160,000 Conservative Party members around the country to choose between Mr Johnson and Mr Hunt as the next leader - and the next prime minister. The vote closes on 22 July, with the result announced the following day. BBC Radio 4's Today Programme has learned that some members have received two ballot papers, in some cases because members live and work in different constituencies and may have joined local Conservative Associations in both areas. People who have changed their name, after marriage for example, may also have been affected. The BBC has seen duplicate ballot papers which have been issued to the same person at the same address. The Conservative Party and the independent body hired to scrutinise the running of the leadership election were both unable to say how many ballot papers had been sent in error. "The ballot holds clear instructions that members voting more than once will be expelled," the party said.

Brexit: not just another Irish battle - As the storm clouds gather, there is a "battle for Brexit" emerging, the nature of which will determine the final shape of Brexit, and its outcome for many years to come. That the battlefield is the Irish border is entirely coincidental – the battle could have been fought on any number of grounds. But it has confused the issue, leading people wrongly to believe that we are seeing a straightforward border management dispute, one which is local, arcane and technical. They fail to see it in the broader context as the battle for the heart and mind of Brexit. Reportage, therefore – as one might expect – is fragmented and disjointed. The political soap opera of the Tory leadership campaign is being given the lion's share of attention on Brexit-related issues. The different aspects of the fight in Ireland are reported without a unifying theme, and without the first understanding of the forces involved, obscuring the epic nature of the battle. What is at stake is the survival of the Withdrawal Agreement, as the final instrument which should determine the next stage of Brexit, or whether the published draft is – contrary to the beliefs and assertions of the EU-27 – merely a stage on an ongoing negotiation process, the end point of which has yet to be defined. If it is the former, then it stands as a statement of principle – agreed unanimously by the Member States of the EU-27 – which sets out the conditions on which the EU is prepared to continue to the next stage. It preserves, in their view, the integrity of the EU treaties, and thereby provides a firm legal foundation on which to base negotiations for a longer-term relationship. However, both Tory leadership candidates have unilaterally chosen to take the view that the final draft of the WA, agreed by the UK government but not ratified by the Westminster parliament, is not a definitive document. Rather, they see it as an interim step towards the final settlement, open to a final stage of negotiation.

40% Of Brits Brace For 'No Deal' Brexit By Stockpiling Food, Medicine & Clothes - On July 31, we'll hit the 90-day mark until "Brexit Day 2.0", and with both Boris Johnson and Jeremy Hunt promising to leave with or without a deal, the British pound is hitting fresh 2019 lows as it becomes increasingly clear that whoever wins the Tory leadership contest will opt for a 'no deal' exit later this year, unless the EU caves. And just like that, the same old 'Project Fear'-type stories that were impossible to ignore during the second half of 2018 and the opening months of 2019 have returned to the headlines. This time, it's Business Insider writing about how Britons are stockpiling food, medicine and clothes to prepare for a 'no deal' Brexit. These trends have, of course, already been reported on in exhaustive detail. But it never hurts to remind them again how they should be 'preparing' for the day that voters demanded more than three years ago.To wit, the 'intelligence' company Blis claimed that 40% of Britons have started stockpiling goods in fear that there will be shortages following a no-deal Brexit.The most commonly stockpiled item is food. 56% of those Brits who are stockpiling are doing so with food items. 44% are building up supplies of household items, and well over a third (37%) are doing so with medicine.The public is even stockpiling clothing. Over a quarter of Brits (28%) have bought extra clothes and shoes to prepare for shortages and higher prices in aftermath of the UK leaving the EU without a deal on October 31.Both candidates to replace Theresa May as prime minister, Boris Johnson and Jeremy Hunt, have promised to take the UK out of the EU this year, with or without a deal, with Johnson insisting that leaving on October 31 is "do or die."

’30-plus’ Tory rebels willing to defy whip and block no-deal Brexit - MPs opposed to a no-deal Brexit may try to force a vote on a Northern Ireland bill to stop the next prime minister proroguing parliament in the autumn, Dominic Grieve has confirmed. Grieve, a former attorney general who has played a leading role in limiting what Brexit policy ministers can implement without parliamentary approval, said the Northern Ireland (Executive Formation) bill could be the next opportunity for a Conservative rebellion. He was speaking as another former minister said there were “30-plus” Conservatives willing to defy the whip to prevent the UK leaving the EU without a deal later this year. Theresa May ultimately baulked at the prospect of trying to implement no deal, but both her two potential successors, Boris Johnson and Jeremy Hunt, have said they would if necessary pursue this option, with Johnson committed to deliver Brexit by 31 October “do or die”. On Monday, MPs will debate the second reading of the Northern Ireland bill, which will extend until October, and potentially January 2020, the deadline set for the resumption of the power-sharing executive in Northern Ireland. All remaining stages of the bill are due to be debated in the Commons on another day. Speaking on Radio 5 Live, Grieve said: “Northern Ireland and Brexit go rather closely together. The chances are, if Brexit goes through, a nodeal Brexit, it is going to be the end of Northern Ireland’s union with the United Kingdom, with serious political consequences flowing from it.” Grieve said that was why it was “perfectly legitimate” to use the bill to ensure MPs got the chance to debate the consequences of a no-deal Brexit.

Chris Grayling accused of trying to ‘silence’ road hauliers over no-deal Brexit  - Chris Grayling, the Transport Secretary, has been accused of trying to "silence" road hauliers from raising concerns about a no-deal Brexit. The Road Haulage Association, the trade body representing freight companies, said Mr Grayling threatened to stop involving the organisation after they communicated with the press following a private briefing with the Transport Secretary last August.In a BBC Panorama documentary, which is due to be aired on Monday, Richard Burnett, chief executive of the Road Haulage Association, said Mr Grayling left him a voicemail after the association issued a press release about the meeting. In the voicemail message, Mr Grayling said: "I've got to say how very disappointed I am.  "I had intended to involve you closely in the planning over the next few months, but issuing a press release straight after meeting like that makes it much more difficult for me to do that." Mr Burnett said he felt Mr Grayling was "trying to silence an industry that's trying to help Government guide them". He added: "My sense of that message was - either shut up or you don't engage. "You either play ball with us or you won't be part of the negotiations on behalf of the industry."

Boris Johnson ‘not bluffing’ about quitting EU on 31 October with no deal - Boris Johnson has claimed he is not bluffing over his commitment to take the UK out of the EU on 31 October with or without a deal and has criticised Theresa May for a “diet of miserablism”. The Conservative leadership frontrunner said the EU had to “look deep into our eyes” and realise the UK was prepared to walk away on Halloween. Johnson, who is 48 points ahead of Jeremy Hunt in the leadership contest, according to a polling of party members, lambasted May for a “computer says no” approach in government. Earlier the former foreign secretary was mocked by his sister Rachel for claiming during hustings that “too often” English was not being spoken as a first language in Britain. She tweeted: “We spoke ancient Greek at home, I genuinely don’t know what he’s on about.” Asked if his commitment to the 31 October deadline was a bluff, Johnson told the Sunday Telegraph: “No … honestly. Come on. We’ve got to show a bit more gumption about this.” He added: “We were pretty much ready on March 29. And we will be ready by October 31. And it’s vital that our partners see that. They have to look deep into our eyes and think: my god, these Brits actually are going to leave. And they’re going to leave on those terms. “Everybody who says ‘I can’t stand the idea of a no-deal Brexit’, what they really mean is actually they don’t want to leave at all.”

Sir John Major says he would fight Boris Johnson in court if he tried to prorogue Parliament to force a no-deal Brexit - Sir John Major has vowed to block Boris Johnson through the courts if he attempts to suspend parliament in order to force a no-deal Brexit. The former prime minister told the Today programme that prorogation should be “totally unacceptable” and that he would seek an immediate judicial review if Mr Johnson pursued that course. Mr Johnson, the frontrunner to be the next prime minister, has pledged that Britain will leave the European Union on October 31 with or without an agreement with Brussels. Unlike his rival, Jeremy Hunt, he has refused to rule out suspending parliament to stop MPs blocking a no-deal Brexit. “National leaders must put the interests of the country first . . . not themselves,” Sir John said. “I think the idea of proroguing parliament is utterly and totally unacceptable from any British parliamentarian or democrat. “I for one would be prepared to go and seek judicial review to prevent parliament being bypassed.” Sir John’s detractors pointed out that he prorogued parliament in 1997 before the publication of the report on the “cash for access” scandal. Nikki da Costa, the former head of legislative affairs at No 10, called it the “last tactical prorogation”, but Sir John maintained in his Today interview that parliament had already run its full course on that occasion. One supporter of Mr Johnson decried the idea of a judicial review as “a stunt”. Chris Philp, a Conservative MP, told BBC Radio 5 Live that Sir John’s idea was “not a serious proposition” and prorogation was not Boris Johnson’s “Plan A, B, or even C”. Matt Hancock, the health secretary and key Johnson ally, could only say that he did not believe prorogation would come to pass. Last night MPs backed by a single vote an amendment by Dominic Grieve, the former attorney-general, designed to make it harder to prorogue parliament in the autumn by requiring ministers to give fortnightly statements on attempts to restart power-sharing in Northern Ireland. It stops short of barring a prime minister from proroguing parliament but supporters say it would make such a move more difficult. John Penrose, the Northern Ireland minister, had tried to head off a defeat by announcing that the government would accept one of Mr Grieve’s proposals, to bring forward the date for parliament to receive a progress report on Northern Ireland’s executive, to September 4. However, Mr Penrose made clear the government’s opposition to the idea of regular fortnightly reporting, describing it as a “an excessive and unnecessary level of procedure”. The government was defeated by 294 to 293 after Tory MPs were whipped to reject the amendment.

Boris Johnson Has Already Won The UK PM Election With 12 Days Remaining To Vote - Mish -Johnson is headed for a landslide victory based on votes already cast. Hunt can't win even if he gets 100% of the rest.  Unlike a general election, held on a single day plus a variable number of postal votes, a conservative party election is entirely postal. The voting period ends July 22. On the basis of votes already cast, the Conservative Home Page says "Johnson has Won Already". Today, our survey shows Johnson on 72 per cent and Hunt on 28 per cent. We have varied the standard question and added one to ask whether or not respondents have already voted. Seventy-one per cent of respondents say that they have done so.  If the survey is accurate, it would be reasonable to assume, on the evidence available at the moment, that Johnson will win somewhere between 67 per cent and 72 per cent of the vote. And if the survey is correct, Johnson has won this contest already. Even if the entire 28 per cent of those who haven’t voted yet opt for Hunt, he cannot catch the front-runner. In conclusion, our surveys and YouGov’s poll last weekend are all singing the same song. Johnson has won. The 67-72% prediction takes into consideration a You-Gov poll last week that had Johnson at 67% and Hunt at 29%.

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