Trump's Fight With The Fed Over Interest Rates Is A Scripted Farce --There is a very bizarre narrative being circulated in the mainstream economic media and it goes a little something like this: “The Federal Reserve has capitulated on liquidity tightening yet the US economy is “stronger than ever”, isn't that weird?” There are a couple things wrong with this statement. First, the Fed has not yet capitulated on its tightening policy. In fact, we have been hearing since last November from the mainstream media and some alternative media that the Fed was going to lower its Fed Funds Rate and end monthly balance sheet cuts at “any moment”, yet several months later it still has not happened. Secondly, the US economy is not “stronger than ever”, it is at its weakest since just before the credit crash of 2008. And here is where the disconnect begins in Fed policy versus public expectations and the behavior of the Trump Administration. Almost EVERYONE, including the Federal Reserve, Donald Trump and the media are talking about how the US economy is “booming”. So why all the fuss over the Fed's interest rates? The truth is it's just more theater for the masses. The battle between Trump and Fed Chairman Jerome Powell over Fed policy is a farce and always has been. Consider the facts – Trump ran his election campaign partly by taking a stance against central bank stimulus measures and ultra low rates. He explicitly attacked the notion that the US economy and stock markets were strong under Barack Obama, warning that the markets were in a bubble created by the Fed's easing measures. Then, as soon as he entered the White House Trump flipped narratives and claimed the economy and the markets were strong, and that they were strong because of him. Trump also said a little over a year ago that he wanted a strong US dollar, now he has reversed completely and says he wants a weaker dollar. In an indirect manner Trump has recently called for a monetary race to the bottom in competition with other nations. This display of bewildering policy gymnastics could be taken one of two ways – one, Trump is bipolar, or two, Trump is following the script that is given to him by the money elite day-to-day just like every president before him for at least the past hundred years. But what is the point of this absurd show?
Fed Chair Powell: "Monetary Policy in the Post-Crisis Era" -- From Fed Chair Jerome Powell: Monetary Policy in the Post-Crisis Era. Excerpt: In our baseline outlook, we expect growth in the United States to remain solid, labor markets to stay strong, and inflation to move back up and run near 2 percent. Uncertainties about this outlook have increased, however, particularly regarding trade developments and global growth. In addition, issues such as the U.S. federal debt ceiling and Brexit remain unresolved. FOMC participants have also raised concerns about a more prolonged shortfall in inflation below our 2 percent target. Market-based measures of inflation compensation have shifted down, and some survey-based expectations measures are near the bottom of their historical ranges. Many FOMC participants judged at the time of our most recent meeting in June that the combination of these factors strengthens the case for a somewhat more accommodative stance of policy. We are carefully monitoring these developments and assessing their implications for the U.S economic outlook and inflation, and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.
Protecting The Fed - Mark Thoma has a post up on Facebook. Apparently, Trump intends to nominate Dr. Judy Shelton to the Fed. I knew Trump was bat-sh*t crazy and now he has confirmed he is bat-sh*t stupid too (if you did not already know this). It is hard to know which is worse as they come in a daily stream of excesses. I do not necessarily agree with my former Econ Prof (not Mark) from time to time; but, he does have a deeper knowledge on the topic than I even though our politics differ. I do get the impression he is deeply concerned as is Mark Thoma and disappointed with the present administration and their impact on the nation, its financial status, and the economy.Dr. Judy: “How can a dozen … people meeting eight times a year decide what the cost of capital should be versus some kind of organically, market supply determined rate? The Fed is not omniscient. They don’t know what the right rate should be. How could anyone?” Given the alternatives of Congress or the President determining national economic policy, I would stick with the dozen. I can figure out what they are doing. Crazy and/or political people are off the books. I will not get too deep into this as you can read the article “Protecting the Federal Reserve” at Money Banking yourself. “Following the 2007-2009 recession, during the weakest post-WWII recovery on record, with inflation below the Federal Reserve’s stated target, she argued against ‘suppression of interest rates’ (see quote above). By contrast, despite the lowest unemployment rate since the 1960s, in recent weeks she has argued for cutting rates ‘as expeditiously as possible.‘ This apparent willingness to pander to President Trump’s preferences, rather than setting policy to meet the Federal Reserve’s longer-term goals of stable prices and maximum sustainable employment, would diminish the Fed’s independence,” Dr. Judy “argued for replacing the Federal Reserve’s inflation-targeting regime with a gold standard, along with a global fixed-exchange rate regime. In our view, this too would seriously undermine the welfare of nearly all Americans.”
What Does Judy Shelton Believe GDP Growth and Inflation Is in 2019? -- Menzie Chinn - In a 2015 Cato Institute session, Fed Board Nominee Judy Shelton discusses whether to trust or not official GDP and inflation statistics (she says no — see 1:07:07) (h/t Sam Bell). This makes me wonder (1) what is the basis for her beliefs, and (2) what would she use that is different. Let’s consider inflation, presumably CPI inflation. One recent innovation is the Billion Prices Project’s price value indicator (see Jim’s post on this subject). For the US, the comparison against the official CPI series is depicted below. With both series rescaled to July 2008, the price levels are virtually the same at July 30, 2015, the day of Dr. Shelton’s speech. It might be that Dr. Shelton is consulting Shadow Government Statistics; if so, I hope she will immediately cease and desist (per discussion by Jim Hamilton, and subsequent “debate” with ShadowStats’ John Williams). What about GDP? Well, here she might be on slightly firmer footing, although it leaves open the question of what would be a better indicator of total economic activity. In point of fact, with revisions based upon more detailed data, GDP was actually 1.6% higher than estimated in 2015Q2 (she had access to an advance estimate of GDP as of 30 July 2015). I suspect her view at the time was that reported GDP was lower than actual economic activity… How about alternative indicators to GDP. Well, there are numerous, but they usually aim at detecting cyclical fluctuations in advance. I suspect that Shelton is uninterested in this high-frequency/cyclical aspects, and more in the trend. Here, I compare the July 2015 and latest vintage of GDP measures, plotted against the Philadelphia Fed coincident indices of comparable vintages. Note that the advance GDP release available to Shelton in 2015 understated real GDP as we understand it in 2019. The coincident indices also suggest that economic activity is higher than indicated by GDP, although given the normalization on end-of-recession (June 2009), the gap is only 2% in log terms, using the latest vintages. So, we are left with wondering exactly what Dr. Shelton believes those key price and activity variables that the Fed follows (technically, it’s PCE deflator rather than the CPI, but you get the idea). Of course, if as indicated elsewhere, she wants the price of gold as a nominal anchor, this discussion is moot — and she’s just a data-conspiracy crank like so many others.
Central Bank Independence: Myth and Misunderstanding - Randy Wray, Levy Institute - ABSTRACT: It is commonplace to speak of central bank “independence”—as if it were both a reality and a necessity. While the Federal Reserve is subject to the “dual mandate,” it has substantial discretion in its interpretation of the vague call for high employment and low inflation. Most important, the Fed’s independence is supposed to insulate it from political pressures coming from Congress and the US Treasury to “print money” to finance budget deficits. As in many developed nations, this prohibition was written into US law from the founding of the Fed in 1913. In practice, the prohibition is easy to evade, as we found during World War II, when budget deficits ran up to a quarter of US GDP. If a central bank stands ready to buy government bonds in the secondary market to peg an interest rate, then private banks will buy bonds in the new-issue market and sell them to the central bank at a virtually guaranteed price. Since central bank purchases of securities supply the reserves needed by banks to buy government debt, a virtuous circle is created, so that the treasury faces no financing constraint. That is what the 1951 Accord was supposedly all about: ending the cheap source of US Treasury finance. Since the global financial crisis hit in 2007, these matters have come to the fore in both the United States and the European Monetary Union, with those worried about inflation warning that the central banks are essentially “printing money” to keep sovereign-government borrowing costs low. This paper argues that the Fed is not, and should not be, independent, at least in the sense in which that term is normally used. The Fed is a “creature of Congress,” created by public law that has evolved since 1913 in a way that not only increased the Fed’s assigned responsibilities but also strengthened congressional oversight. The paper addresses governance issues, which, a century after the founding of the Fed, remain somewhat unsettled. While the Fed should be, and appears to be, insulated from day-to-day political pressures, it is subject to the will of Congress. Further, the Fed cannot really be independent from the Treasury, because the Fed is the federal government’s bank, with almost all payments made by and to the government running through the Fed. As such, there is no “operational independence” that would allow the Fed to refuse to allow the Treasury to spend appropriated funds. Finally, the paper addresses troubling issues raised by the Fed’s response to the global financial crisis; namely, questions about transparency, accountability, and democratic governance.
Trump Was [Selectively] Right About the Dollar - Trump has been very vocal about his dislike for the Fed’s hawkish policies, repeatedly drumming up the fact that higher interest rates lead to an overly brawny dollar and slow down the economy. Trump has even, reportedly, asked White House aides to explore ways to weaken the currency in order to boost exports and boost economic growth.Trump’s open criticisms have mostly been viewed as unconventional going by the central bank’s presumption of independence, though, of course, no president wants to be associated with an economy weakening under his or her watch. And now, the president’s call for lower rates and a weaker dollar have just have found fresh impetus from an unexpected source—the IMF now says the American currency is 6%-12% overvalued. But in a potentially big knock on Trump’s assertions against Beijing, the IMF says the Chinese yuan appears to be fairly valued, though it does concede that there are ‘large uncertainties’ around the currency that could mean it’s undervalued by 11.5 percent or overvalued by up to 8.5 percent. You can expect Trump to take full advantage of the fresh ammunition that the IMF has just handed him–the fact that he has never been a big fan of multilateral institutions such as the IMF or the World Bank notwithstanding.In a tweet earlier this month, Trump accused China and Europe of manipulating their respective currencies in order to gain unfair advantage of the U.S.And, you can hardly blame him for going out on a limb to stop real or perceived injustices.The dollar has strengthened considerably over the past decade, with the dollar index–a measure that pits the greenback against a basket of six major currencies (euro, Japanese yen, Canadian dollar, British pound, Swedish krona and Swiss franc)–climbing 26 percent over the timeframe. An overly strong dollar compared to currencies from major trade partners makes U.S. exports less competitive.
Earlier Fed's Beige Book: Economic Growth "Modest", Labor Market "Tight" - Fed's Beige Book "This report was prepared at the Federal Reserve Bank of San Francisco based on information collected on or before July 8, 2019. " excerpt: Economic activity continued to expand at a modest pace overall from mid-May through early July, with little change from the prior reporting period. In most Districts, sales of retail goods increased slightly overall, although vehicle sales were flat. Activity in the nonfinancial services sector rose further. Tourism activity was broadly solid, with Atlanta and Richmond recording robust growth in this sector. Although some Districts continued to report healthy expansion in the transportation sector, others noted that activity declined modestly. On balance, home sales picked up somewhat, but residential construction activity was flat. Nonresidential construction activity increased or remained strong in most reporting Districts, and commercial rents rose. Manufacturing production was generally flat, but a few Districts noted a modest pickup in activity since the last reporting period. Agricultural output declined modestly following unusually heavy rainfall in some areas, and oil and gas production fell somewhat. Increased demand for loans was broad-based, with all but two Districts noting some growth in financing activity. The outlook generally was positive for the coming months, with expectations of continued modest growth, despite widespread concerns about the possible negative impact of trade-related uncertainty. ... On balance, employment grew at a modest pace, slightly slower than the previous reporting period. Labor markets remained tight, with contacts across the country experiencing difficulties filling open positions. The reports noted continued worker shortages across most sectors, especially in construction, information technology, and health care. A few reports highlighted concerns about securing and renewing work visas, flagging this as a source of uncertainty for continued employment growth. Compensation grew at a modest-to-moderate pace, similar to the last reporting period, although some contacts emphasized significant increases in entry-level wages. Most District reports also noted that employers expanded benefit packages in response to the tight labor market conditions.
'Leading Economic Indicators' Slump Most In Over 40 Months - The Conference Board Leading Economic Index (LEI) for the U.S. tumbled 0.3% in June to 111.5, following no change in May, and a 0.1% rise in April. This is the biggest MoM drop since January 2016...
- The biggest positive contributor to the leading index was leading Credit index at 0.12
- The biggest negative contributor was building permits at -0.18
"The US LEI fell in June, the first decline since last December, primarily driven by weaknesses in new orders for manufacturing, housing permits, and unemployment insurance claims," said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. "For the first time since late 2007, the yield spread made a small negative contribution. As the US economy enters its eleventh year of expansion, the longest in US history, the LEI suggests growth is likely to remain slow in the second half of the year."
Q2 GDP Forecasts: 1.4% to 2.3% -- From Merrill Lynch: Strong retail sales in June boosted our 2Q GDP tracking by 0.6pp to 2.3% qoq saar. [July 19 estimate] From Goldman Sachs: We left our Q2 GDP tracking estimate unchanged at +1.4% (qoq ar). [July 17 estimate] From the NY Fed Nowcasting Report: The New York Fed Staff Nowcast stands at 1.4% for 2019:Q2 and 1.9% for 2019:Q3. [July 19 estimate]. And from the Altanta Fed: GDPNow The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2019 is 1.6 percent on July 17, unchanged from July 16. [July 17 estimate] CR Note: These estimates suggest real GDP growth will be around 2% annualized in Q2.
Treasury Snapshot: 10-Year Yield at 2.12%, 30YR Mortgage 3.75% (see graphs) Let's take a closer look at recent activity in US Treasuries. The yield on the 10-year note ended July 12, 2019, at 2.12% and the 30-year mortgage rate is at 3.75%. Here is a table showing the yields highs and lows and the FFR since 2007 as of the July 12th close. The chart below shows the daily performance of several Treasuries and the Fed Funds Rate (FFR) since the pre-recession days of equity market peaks in 2007. A log-scale snapshot of the 10-year yield offers a more accurate view of the relative change over time. Here is a long look since 1965, starting well before the 1973 Oil Embargo that triggered the era of "stagflation" (economic stagnation with inflation). Note the 1987 closing high on the Friday before the notorious Black Monday market crash. The S&P 500 fell 5.16% that Friday and 20.47% on Black Monday. The latest Freddie Mac Weekly Primary Mortgage Market Survey puts the 30-year fixed at 4.07%. Here is a long look back, courtesy of a FRED graph, of the 30-year fixed rate mortgage average, which began in April of 1971. Now let's see the 10-year against the S&P 500 with some notes on Federal Reserve intervention. Fed policy has been a major influence on market behavior. For a long-term view of weekly Treasury yields, also focusing on the 10-year, see our latest Treasury Yields in Perspective update.
Foreigners Dump US Treasurys, Liquidate A Record $216 Billion In US Stocks In 13 Consecutive Month - The latest TIC data for the month of May, released just after the close, showed that China continued to sell US Treasurys for the third straight month, bringing its total to just $1.11 trillion, down another $3 billion, and the lowest since May 2017... ... Even as Japan bought a whopping $37 billion in US paper in May, its largest monthly purchase since August 2013, and bringing its total to $1.101 trillion, just $9BN shy of China's $1.110 trillion. Meanwhile, in a surprising development, the UK - which has been aggressively buying US paper either for itself, or in proxy for other purchasers - saw its holdings jump once again, rising to $323.1 billion, an increase of $22.3 billion in the month. Similar to Belgium and Euroclear, it is far more likely that this surge is simply the result of some offshore fund serving a sovereign, but based in the UK, is doing the buying. Whether it's China or someone else, will be revealed in due course. Yet despite the occasional purchaser, foreign official institutions (central banks, reserve managers, sov wealth funds) have seen their holdings of US TSYs slide by another $22 billion, the 9th consecutive drop in the holdings of foreign official institutions, and yet because the decline this May was smaller than the drop in May of 2018, the LTM net sales posted a modest drop. Overall, May - and the past 12 months in general - were not good for US Treasurys, as foreigners, both public and private sold a total of $33.8 billion in US Treasurys and $1.4 billion in corporate stocks, offset by purchases of $15.1 billion in Agencies and $14.9 billion in Corporate bonds. However, for yet another month, the real action was away from the bond market, and in US stocks, where TIC data showed that foreigners sold US stocks for a record 13th consecutive month and 153 of the past 16: The aggregate $215 billion in sales in the past 13 months, is the largest liquidation of US equities by foreigners on record. And while it is perhaps not surprising that in May foreigners dumped US stocks - after all it was the worst month for the S&P in 2019 - what is odd, is that in June and July, US stocks barely noticed the ongoing liquidation, and after several attempts at taking out 3,000 in the S&P, finally pushed right through in July, despite what we showed just this weekend continues to be relentless selling by both individual and institutional investors, and - now - also by foreigners. So with the S&P at all time highs, are we going to find out in two months that foreigners continued to dump anything that wasn't nailed down? Which again begs the question, just how powerful are stock buybacks - which were the only official buyers of stocks in the past few months - to not only offset selling by virtually everyone else, but also push the market to new highs?
US government posts $8 billion deficit in June - The U.S. government posted an $8 billion budget deficit in June, according to data released on Thursday by the Treasury Department.Analysts polled by Reuters had expected a $6.35 billion deficit for the month.The Treasury said federal spending in June was $342 billion, down 12% from the same month in 2018, while receipts were $334 billion, up 6% compared with June 2018.The deficit for the fiscal year to date was $747 billion, compared with $607 billion in the comparable period the year earlier. When adjusted for calendar effects, the deficit for June was $55 billion compared with an adjusted deficit of $30 billion in June 2018. Calendar adjustments had little effect on the year to date figures.
The Numbers Are In, and Trump’s Tax Cuts Are a Bust -- By Marshall Auerback - The most commonly heard refrain when Donald Trump and the GOP were seeking to pass some version of corporate tax reform went something like this: There are literally trillions of dollars trapped in offshore dollar deposits which, because of America’s uncompetitive tax rates, cannot be brought back home. Cut the corporate tax rate and get those dollars repatriated, thereby unleashing a flood of new job-creating investment in the process. Or so the pitch went. So did reality correspond to the theoretical case made for the tax reform bill? We now have enough information to make a reasonably informed assessment. Unless you think that tax havens like Ireland, Bermuda or the Cayman Islands, all of which continue to feature as major foreign holders of U.S. Treasuries, have suddenly emerged as economic superpowers, the more realistic interpretation of the data shows the president’s much-vaunted claims about the tax reform to be bogus on a number of levels. Even though some dollars have been “brought home,” there remain trillions of dollars domiciled in these countries (at least in an accounting sense, which I’ll discuss in a moment). But here’s the key point: instead of investing in new plants and equipment, a large proportion of these dollars have instead been used for share buybacks or distributed back to shareholders via dividend payments. Anne Marie Knott of Forbes.com quantifies the totals: “For the first three quarters of 2018, buybacks were $583.4 billion (up 52.6% from 2017). In contrast, aggregate capital investment increased 8.8% over 2017, while R&D investment growth at US public companies increased 12.5% over 2017 growth.” So the top tier again wins in all ways: net profits are fattened, shareholders get more cash, and CEO compensation is elevated, as the value of the stock prices goes higher via share buybacks. The dollars, in other words, have only been “trapped” to the extent that corporate management has chosen not to deploy them to foster real economic activity. “Punitive” corporate tax rates, in other words, have been a fig leaf. But the American worker has derived no real benefit from this repatriation, which was the political premise used to sell the bill in the first place. Since the passage of the tax bill, the data show no significant evidence of corporate America bringing back jobs or profits from abroad. In fact, there is much to suggest the opposite: namely, that tax avoidance is accelerating in the wake of the legislation’s passage, rather than decreasing. Consider that the number of companies paying no taxes has gone from 30 to 60since the bill’s enactment. But it’s worse than that, as Setser highlights: “Well over half the profits that American companies report earning abroad are still booked in only a few low-tax nations—places that, of course, are not actually home to the customers, workers and taxpayers facilitating most of their business. A multinational corporation can route its global sales through Ireland, pay royalties to its Dutch subsidiary and then funnel income to its Bermudian subsidiary—taking advantage of Bermuda’s corporate tax rate of zero.”
WARNING: another “debt ceiling debacle” is looming, and could cause nearly immediate recession --It’s time to start to get seriously worried about another “debt ceiling debacle.” In 2011, the GOP refused to authorize a “clean” debt ceiling hike. The hike in the debt ceiling, for those who may not know, is necessary for the US government to pay debts that *it has already incurred.*In 2011, as a result of the impasse, US creditworthiness was downgraded from AAA to AA. Consumer confidence plummeted: Note the next largest spike downward occurred during the government shutdown at the beginning of this year. In both cases - the debt ceiling debacle and the government shutdown - Long bond rates (mortgages, shown in blue below) plunged in a “flight to safety,” and stock prices (red) also plunged about 15%: We know, of course, that the stock market is not the “real” economy. In 2011, consumers nevertheless continued to spend (red in the graph below) and industry continued to expand (blue), but during the government shutdown at the beginning of this year, both went sideways or declined: As I write this, it is almost certain that the economy is already in a slowdown. It is dicey enough that, although I see slowdown as the most likely scenario, I already am on “Recession Watch” for a possible downturn centered on Q4 of this year. Another knock like the “mini-recession” we had from December through February as the result of the government shutdown is the last thing we need. But we may be about to get it. Congress is scheduled to go on recess after August 2, and not return until after Labor Day in September. According to various news organizations,Treasury Secretary Steven Mnuchin put his request on paper for Congress to act on the debt ceiling before the August recess, writing to congressional leaders Friday that there’s a chance Treasury could run out of cash in early September. There have been some negotiations: Pelosi and Republican leaders are looking to strike a multi-year deal to lift the nation’s $22 trillion debt limit and nix Congress’ stiff spending caps, which threaten billions of dollars of cuts at year’s end. “I am personally convinced that we should act on the caps and the debt ceiling,” Pelosi told reporters on Thursday evening, adding that it should be done “prior to recess.” But here is a giant sticking point: Meanwhile, Mitch McConnell, who may be evil but is nevertheless by far the shrewdest operator in Washington, is keeping his cards close to his vest: “Time is running out, and if we’re going to avoid having either short- or long-term CR or either a short- or long-term debt ceiling increase, it’s time that we got serious on a bipartisan basis to try to work this out [...]” But as cagey as McConnell may be, as we saw with the government shutdown, Trump is not only willing to hold hostages, but to execute some in order to try to get his way and please his base. All it will take is a few segments on Fox TV for him to once again blow up any deal McConnell brokers. There are three workweeks left until Congress’s summer recess. If for any reason we actually go over the brink this time, there is an excellent chance that the slowdown almost immediately tips into recession.
Congress pushes for debt ceiling deal to avoid default on US debt - Congress will have to scramble to raise the U.S. debt limit and avoid a potential default that would rattle the world economy. On Wednesday, House Speaker Nancy Pelosi said she would like to vote on a bill to hike the debt ceiling by July 26 — the chamber’s last day of activity before an August recess. She hopes it would give the Senate enough time to pass legislation before it leaves the following week. Of course, negotiators in Washington will first have to find an agreement that can get through both chambers of Congress. Pelosi said she hopes lawmakers and the White House can reach a deal by Friday, which would allow them to post legislative text over the weekend. She and Senate Minority Leader Chuck Schumer spoke to Treasury Secretary Steven Mnuchin earlier Wednesday. While officials have cited progress in the talks, sticking points remain. “It’s all about money, right?” Pelosi told reporters Wednesday. The White House disputed Pelosi’s optimism about striking a deal. A senior administration official said Wednesday that “Pelosi’s new timeline sounds like happy talk from the Speaker who has been absent from talks for the last 3 months and now is trying to create momentum after a bad couple weeks.” “The reality is, we have a way to go,” the official said. The House speaker and Treasury secretary have discussed a two-year budget deal that would also raise the U.S borrowing limit. The issue took on more urgency last week, when Mnuchin wrote to Congress saying the Treasury Department could run out of cash “in early September, before Congress reconvenes.” Lawmakers hope to avoid a government shutdown before they leave, as current government funding expires at the end of September. Democrats want to strike a budget deal to avoid automatic across-the-board spending cuts known as sequestration. A two-year spending agreement tied to a debt ceiling increase would accomplish all of those in one swoop. Democrats have opposed a short-term debt limit hike.
An MMTer Explains MMT In 320 Words - “Imagine Congress appropriates $1BN to refurbish Air Force One,” said Warren Mosler, pioneer of Modern Monetary Theory.We were discussing the financial architecture that allows the Fed to create money. “The Department of Defense hires General Dynamics to upgrade the airplane. The US Treasury instructs the Fed to credit General Dynamic’s account at JP Morgan with +$1bln.The Fed simultaneously debits the US Treasury account with -$1bln and the books are balanced.” Notice, the government did not need to collect taxes or issue bonds.“The US Treasury basically now has a -$1bln overdraft at the Fed. There’s no practical limit to how high the US Treasury overdraft at the Fed could become, but politicians don’t want the Treasury balance to be negative, so the Treasury issues $1bln in bonds, and deposits those proceeds at the Fed to eliminate its -$1bln overdraft.”The $1bln the Fed created is trapped in the banking system and finds its way to purchase the $1bln in bonds the Treasury issued to balance its Fed account. “Even if General Dynamics chooses to move the $1bln into Euros, it will do so by instructing JP Morgan to buy Euros from Deutsche Bank, which also has a Fed account. The Fed will debit JP Morgan’s account by -$1bln and credit Deutsche Bank’s account by +$1bln. The ECB will debit Deutsche Bank’s Euro account by -$1bln and credit JP Morgan’s.”The dollar’s exchange rate may fall, but that’s what Washington wants. “People misunderstand debt and money. Government debt is simply money the government has spent that hasn’t yet been used to pay taxes. Holders of that debt prefer saving over consuming or they wouldn’t own bonds. At some point, these people may choose to spend more than they save, and if that sparks excess demand and inflation (in Warren’s experience, large inflations are caused by other factors), then that’s easily dealt with. The government simply raises taxes or cuts spending.” Easy eh?
House Democrats ratify $733 billion for US military - By a near-party-line vote Friday, the Democratic-controlled House of Representatives approved the National Defense Authorization Act, providing $733 billion for the Pentagon, with the bulk of the spending directed toward preparing the US military for future wars with China and Russia. Not a single Republican House member voted for the bill, which passed 220–197, because they objected to a series of “progressive” amendments incorporated into the NDAA to ensure a top-heavy Democratic vote for the overall legislation. All of these amendments will be stripped out of the bill in the House-Senate Conference Committee, which will now ensue. The resulting military authorization bill will come back to the House as unamendable “must pass” legislation, which most “progressive” Democrats will claim they have no choice but to support. The eight Democrats who voted against the bill included four newly elected representatives who have been frequent targets of House Speaker Nancy Pelosi—Alexandria Ocasio-Cortez, Ilhan Omar, Rashida Tlaib and Ayanna Pressley—and four other liberals—Mark Pocan, Barbara Lee, Earl Blumenauer and Adriano Espaillat. The amendments approved included one barring President Trump from waging war on Iran without congressional approval. A similar amendment has already been defeated in the Senate. Others on the wish list include repeal of the 2002 Authorization for the Use of Military Force, the legal basis for the Bush administration’s invasion of Iraq; a one-year prohibition for using US military funds to support the Saudi-led war in Yemen; a provision blocking the deployment of low-yield nuclear weapons on US submarines; another barring the transfer of new prisoners to the Guantanamo Bay prison; reinstatement of eligibility for military service of transgender soldiers; and a ban on the use of Defense Department funds to build Trump’s wall on the US-Mexico border or to house people detained by Immigration and Customs Enforcement.
Trump axed Iran deal to spite Obama: How the British ambassador called the President’s actions ‘diplomatic vandalism’ fueled by ‘personality reasons’ – as revealed in more explosive cables that have sparked a free speech row while Iran tensions mount Donald Trump abandoned the Iran nuclear deal as an act of ‘diplomatic vandalism’ to spite his predecessor Barack Obama, Britain’s Ambassador to Washington wrote in a bombshell memo to Downing Street. Sir Kim Darroch’s claim – made after Boris Johnson made a doomed trip to the White House to change the President’s mind – is revealed in leaked cables and briefing notes which led to Sir Kim’s resignation last week. The new revelation comes after an extraordinary row over the freedom of the press blew up this weekend, with Mr Johnson and leadership rival Jeremy Hunt leading the condemnation of Scotland Yard over its threats to prosecute this newspaper.Responding to Assistant Commissioner Neil Basu’s incendiary claim that publishing the contents of the documents could be ‘a criminal matter’, Mr Johnson said prosecution ‘would amount to an infringement on press freedom and have a chilling effect on public debate’. Mr Hunt said that he would ‘defend to the hilt the right of the press to publish those leaks if they receive them and judge them to be in the public interest’. Health Secretary Matt Hancock goes further today by calling on the police to withdraw Mr Basu’s statement. Writing in this newspaper, he says: ‘The press must be free to publish what it believes to be in the public interest.
U.S., Iran send conflicting signals on their disputes - (Reuters) - Iran and the United States sent mixed signals on Tuesday about resolving their disputes as Iran’s supreme leader threatened to further breach the 2015 nuclear deal while the U.S. president cited “a lot of progress.” Tensions have risen since U.S. President Donald Trump last year abandoned the major powers’ nuclear deal with Iran under which Tehran agreed to curtail its nuclear program in return for the lifting of global sanctions crippling its economy. Washington has since reimposed draconian sanctions to throttle Iran’s oil trade in a “maximum pressure” policy to force Tehran to agree stricter limits on its nuclear capacity, curb its ballistic missile program and end support for proxy forces in a regional power struggle with U.S.-backed Gulf Arabs. Fears of direct U.S.-Iranian conflict have risen since May with several attacks on oil tankers in the Gulf, Iran’s downing of a U.S. surveillance drone, and a plan for U.S. air strikes on Iran last month that Trump called off at the last minute. Iran’s supreme leader on Tuesday said Tehran would keep removing restraints on its nuclear activity in the deal - struck with Britain, China, France, Germany Russia and the United States - and retaliate for the seizure of an Iranian oil tanker.
Pompeo’s Nuclear Deal Nonsense - Mike Pompeo went on the Sean Hannity Show to tell more lies about the nuclear deal: “Remember, that was the fundamental flaw of the Kerry-Obama deal, the JCPOA, the Iran deal. They allowed Iran to have enormous wealth, lots of money, put cash on pallets and sent it to Iran, and then let them continue to enrich uranium so they had the capacity to build out their nuclear weapon system and foment terror. Those were the failures of the previous agreement the President identified, and I think we’ve made real progress.” Pompeo isn’t telling the truth here, and he must think that his audience is stupid enough to believe the whoppers that he’s telling them. There was no flaw in the deal. What Pompeo is describing is the compromise required in any negotiated deal. He is dismissing reasonable compromise itself as a flaw, which reminds us that neither he nor anyone else in the administration has any interest in diplomacy with Iran. Iran was allowed to enrich uranium at a very low level. That had nothing to do with a “nuclear weapon system.” Iran doesn’t possess a “nuclear weapon sytem” and can’t build one because of the deal that Pompeo routinely trashes. The agreement did not have any failures. Until the U.S. reneged on it, it was working exactly as planned, and in spite of U.S. violations of the agreement it has continued to function remarkably well because of continued Iranian compliance. It has been one of the most successful nonproliferation agreements ever made. To the extent that Iran is now reducing its compliance, that is entirely the fault of the destructive “maximum pressure” campaign that Pompeo has championed for more than a year. When a nonproliferation agreement is based on an exchange of sanctions relief for compliance with restrictions on a nuclear program, the sanctioned party is going to gain access to their own money again. That is how a negotiated agreement works. Iran was always going to regain access to frozen assets under any agreement, so faulting the agreement for delivering on our end of the bargain is about as dim-witted as it gets. Sanctions “work” only to the extent that they contribute to the targeted government’s willingness to make concessions on the disputed issue. If there is no realistic chance of obtaining sanctions relief, sanctions just produce resistance and intransigence. That is why the Trump administration’s sanctions have failed and will continue to fail. The administration has made such excessive and unreasonable demands, and it has already proven that they can’t be trusted, so Iran has no reason to believe that promises of sanctions relief would ever be honored in the future.
US Grants Visa To Iran FM But Movements Near UN Building Sharply Curtailed - An opening that could cool tensions? Or just a brief pause in the continued build-up to a near-future war? On Sunday, Iranian President Hassan Rouhani said in a televised speech he's ready to hold talks with the United States if it lifts sanctions and returns to its commitments under the 2015 nuclear deal. “We have always believed in talks... if they lift sanctions, end the imposed economic pressure and return to the deal, we are ready to hold talks with America today, right now and anywhere,” Rouhani said. However, in an interview following the overture, Secretary of State Mike Pompeo dismissed it as “the same offer that he offered to John F. Kerry and Barack Obama.” Pompeo concluded, “President Trump will obviously make the final decision. But this is a path that the previous administration had gone down and it led to the (Iran nuclear deal) which this administration, President Trump and I both believe was a disaster.” Pompeo also said during the Sunday night interview that the US has granted a visa to Iranian Foreign Minister Javad Zarif — who just earlier this month was reportedly the focus of potential US sanctions alongside top IRGC commanders and officials — but that his movements would be greatly limited and "sharply curtailed". “U.S. diplomats don’t roam around Tehran, so we don’t see any reason for Iranian diplomats to roam freely around New York City, either,” Pompeo said.“It’s absolutely appropriate that we provide Foreign Minister Zarif and his delegation with all the rights that they are due under the U.N. headquarters agreement, and nothing more than that,” he said further.According to The Washington Post:Pompeo said in a telephone interview that Foreign Minister Mohammad Javad Zarif and his delegation will be permitted to travel between U.N. headquarters and the Iranian mission six blocks away, and to the residence of Iran’s U.N. ambassador nearby. The group arrived in New York on Sunday morning. The "restricted" travel and movement regimen comes after President Trump said last week that sanctions on Iran would soon increase "substantially".
Iran makes 'substantial' nuclear offer in return for US lifting sanctions - Iran has offered a deal with the US in which it would formally and permanently accept enhanced inspections of its nuclear programme, in return for the permanent lifting of US sanctions. The offer was made by the Iranian foreign minister, Mohammad Javad Zarif, on a visit to New York. But it is unlikely to be warmly received by the Trump administration, which is currently demanding Iran make a range of sweeping concessions, including cessation of uranium enrichment and support for proxies and allies in the region. Zarif insisted, however, that his offer was “a substantial move”. “It’s not about photo ops. We are interested in substance,” he told reporters at the Iranian mission to the UN in New York on Thursday. “There are other substantial moves that can be made.” He said: “If they [the Trump administration] are putting their money where their mouth is, they are going to do it. They don’t need a photo op. They don’t need a two-page document with a big signature.” Iran has faced a steadily tightening US-driven oil embargo and severe banking sanctions since May last year, when Donald Trump withdrew the US from the 2015 multilateral nuclear deal with Iran known as the Joint Comprehensive Programme of Action (JCPOA). The embargo has triggered a standoff in the Gulf that has escalated dramatically in recent months: on Thursday, Trump said a US warship, the USS Boxer, had shot down an Iranian drone that had come within a kilometre of the vessel. “The drone was immediately destroyed,” the president said. “This is the latest of many provocative and hostile actions by Iran against vessels operating in international waters.” Earlier in the day, Iran said it had seized a foreign-owned vessel suspected of being used for oil smuggling out of Iran. Zarif dismissed the seizure as a routine marine policing matter.
Trump To Turkey- We're Not Going To Sell You The F-35 After Russian Missile Purchase - Turkish President Recep Tayyip Erdogan celebrated the delivery of the first S-400 anti-air missiles on Tuesday, even going so far as to suggest that Turkey and Russia (the system is made by Russian defense contractor Almaz-Almaty) might collaborate on building weapons. But across the Atlantic, President Trump was less than amused. Washington has repeatedly insisted that if Turkey bought the S-400 over a steeply discounted Patriot missile system, that the US would block the sale of Lockheed Martin's F-35 fighter jets - and unprecedented punishment for a NATO member. And as it turns out, that's exactly what President Trump is planning to do. During a Cabinet meeting on Tuesday, Trump said "we are now telling Turkey...we're not going to sell you the F-35 fighter jets." Trump added: "It’s a very tough situation that they’re in. And it’s a very tough situation that we’ve been placed in the United States," Trump said. "With all of that being said, we’re working through it. We’ll see what happens, but it’s not really fair."But Trump was mum on a more pressing issue: Whether Washington will subject Ankara to sanctions under the Countering America’s Adversaries Through Sanctions Act, or CAATSA. While Erdogan has suggested that Trump would find a way to avoid the sanctions, last year, Congress set a high bar for waiving sanctions under CAATSA.And what's more, if Washington doesn't make an example of Ankara, it could have a full-blown mutiny on its hands, as New Delhi is also eyeing the S-400. Trump isn't the only senior US official talking tough about the S-400. During his Senate Armed Services Committee confirmation hearing, Esper said that he has told his Turkish counterpart that "you can either have the S-400 or the F-35, you cannot have both."
US-China trade negotiations at virtual standstill -- Two weeks after US President Trump and Chinese President Xi Jinping agreed to the resumption of trade talks at a meeting on the sidelines of the G20 summit meeting in Osaka, there is no sign they are any closer to a deal.Telephone conversations between representatives of the two sides were held last week, but so far there has been no indication of when face-to-face negotiations might take place.While Beijing continues to maintain it is open to discussions, everything indicates it has all but given up on the prospect of reaching an agreement in the absence of any move by the US to pull back on its demands that led to the breakdown of discussions in May.These demands centre on Washington’s insistence that the 25 percent tariffs it has imposed on $250 million worth of Chinese goods remain in place even after reaching an agreement as part of an “enforcement” mechanism. The US is also demanding that the Chinese government, under Washington’s direction, write into law measures on the protection of intellectual property rights.Beijing has rejected both these demands on the grounds they breach the principle of equality and constitute an infringement of Chinese national sovereignty, and thus amount to a 21st century repeat of the unequal treaties imposed on China in the early part of last century. In addition to these issues, the future of US bans imposed on the Chinese telecom giant Huawei has now become a key question. Following the breakdown of the talks in May, the Commerce Department placed the company on its entity list, meaning that US firms supplying it with components had to obtain a licence to do so.
Trump’s Fixation on Intellectual Property Rights Serves the Rich - Dean Baker - Between making threats of actual war with North Korea and Iran, Donald Trump has also gotten us into a trade war with China. A major theme in Trump’s campaign was that China is a world-class currency manipulator that deliberately keeps down the value of its currency to give its products an advantage in international trade. If Trump focused on currency, he would likely be able to reach an agreement with China, which would reduce its trade surplus with the United States. This would create more jobs for US manufacturing workers, which would likely be a boost to the large segment of the work force without college degrees (roughly two-thirds). Instead, he is pushing for policies like requiring China to show more respect for the intellectual property claims of US corporations. That may be good for Boeing, Pfizer, Merck and other companies that are heavily dependent on intellectual property for their profits, but it is bad news for most American workers. If major US companies know that they can offshore operations to China without having to worry about transferring technology to China (a frequent complaint), they will be more likely to offshore operations to China. If China has to pay Merck and Microsoft more money for their patents and copyrights, it will have less money to spend on other US goods and services. The way this works out practically is that, other things being equal, the money China needs to pay Merck and Microsoft, will increase their demand for dollars. That will raise the value of the dollar against the yuan, making other US goods and services less competitive than if China was not paying Merck and Microsoft for their intellectual property. By increasing the enforcement of intellectual property claims, both in the US and overseas, our government is redistributing even more income to those at the top. If you need a visual aid to understand this point, think of Bill Gates, one of the world’s richest people. If the government did not threaten to imprison anyone who made copies of Microsoft software without Gates’s permission, it is likely that he would still be working for a living.
Trump Slams Faltering Chinese Economy, Declares US 'Winning' Trade War - The leadership in Beijing probably wasn't too disappointed with the country's slowest in nearly 30 years 6.2% annualized GDP print published early Monday morning local time, after all, in keeping with China's "no surprises" mandate on economic data - every number is goalseeked to perfection to match the consensus, even if the Q2 number was slightly lower than Q1.But with stocks at record highs, allowing Trump the upper hand in the interminable trade war, it appears the president couldn't resist a few minutes to gloat. As Trump has long claimed, thousands of companies are leaving China for other non tariiffed countries (though, the rest of China's economic data wasn't nearly so downbeat as the GDP number, which suggests that, once again this is merely more Trump showmanship).China’s 2nd Quarter growth is the slowest it has been in more than 27 years. The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. Thousands of companies are leaving. This is why China wants to make a deal.......with the U.S., and wishes it had not broken the original deal in the first place. In the meantime, we are receiving Billions of Dollars in Tariffs from China, with possibly much more to come. These Tariffs are paid for by China devaluing & pumping, not by the U.S. taxpayer!— Donald J. Trump (@realDonaldTrump) July 15, 2019 China "wishes it hadn't broken the original deal in the first place," Trump says. But the US has plenty of time to hold out for better terms, since money is pouring into the coffers of our Treasury - taxes paid by American importers, but we magine Trump will continue to pretend our adversaries in China are footing the bill.
Beijing Slams Trump's Totally Misleading Trade Deal Claims - Virtually since the trade war began back in the spring of 2018, President Trump has warned in tweets, speeches and comments to reporters that the US has the upper hand for one simple reason: The pace of China's economic growth is slowing, which is a serious problem for the Communist Party - whose mandate to rule is dependent on its ability to lift more Chinese out of poverty. In Trump's view, Beijing needs a swift resolution to the trade war to boost growth back above the 6.5% threshold.The Chinese leadership doesn't see it that way - and so far at least, they've given no indication that they're in a rush to strike a deal (if anything, the opposite is true). But after the historically poor GDP print from last week (which was, of course, goalseeked to match expectations) President Trump couldn't help himself and once again bashed Beijing in a tweet, gloating that President Xi and Vice Premier Liu He probably regret sabotaging the original deal. Even though it's US importers who must bear the costs of Trump's tariffs, the president again insisted that "tariffs are paid for by China devaluing and pumping not the US taxpayer."China’s 2nd Quarter growth is the slowest it has been in more than 27 years. The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. Thousands of companies are leaving. This is why China wants to make a deal.....with the U.S., and wishes it had not broken the original deal in the first place. In the meantime, we are receiving Billions of Dollars in Tariffs from China, with possibly much more to come. These Tariffs are paid for by China devaluing & pumping, not by the U.S. taxpayer!— Donald J. Trump (@realDonaldTrump) July 15, 2019During comments on Tuesday while chairing a symposium attended by a group of economists and entrepreneurs, Chinese Premier Li Keqiang offered a different perspective: China's economy has seen steady performance. He blamed the recent weakness on global factors, like slowing trade and a weak global recovery, according to Xinhua.He also pointed out that some indicators have beat expectations, which is accurate: All three core June economic indicators - retail sales, industrial output and fixed investment - beat sharply lowered expectations.
Trump Says He Could Impose More China Tariffs If He Wants -President Donald Trump reiterated that he could impose additional tariffs on Chinese imports if he wants, after promising to hold off on more duties in a trade-war truce he reached with China’s Xi Jinping last month. “We have a long way to go as far as tariffs where China is concerned, if we want. We have another $325 billion we can put a tariff on, if we want,” Trump said. “So, we’re talking to China about a deal, but I wish they didn’t break the deal that we had.” China said Wednesday that further levies would complicate the negotiations. “If the U.S. imposes new tariffs, this would create a new obstacle for U.S. and China trade negotiations, would make the road to coming to an agreement longer,” Foreign Ministry spokesman Geng Shuang told reporters in Beijing. “China still hopes to resolve U.S.-China trade frictions through consultation and dialogue.” Trump and Xi called a tariff ceasefire and agreed to resume trade talks after meeting at the Group-of-20 summit in Japan in late-June, breaking a six-week stalemate. The U.S. president said he’d hold off on a threat to impose tariffs on an additional $300 billion in Chinese imports, and that Xi had agreed to buy large amounts of U.S. farm goods in exchange. No such deal to increase agricultural purchases was made, Chinese officials familiar with the discussions said earlier. There hasn’t been any large-scale buys since the meeting in late June. Stocks fell from a record after Trump made the remarks at a cabinet meeting Tuesday at the White House. Treasury 10-year yields surged earlier in the day after solid economic data added to signs the U.S. expansion is holding up even as central bank officials indicated they’re ready to cut rates. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer expect to have another call this week with top trade negotiators in China, and the two may travel to Beijing for meetings if the discussions by phone are productive, Mnuchin said Monday.
Trump and Xi Are Struggling to Find Path Forward in Trade Talks - Slow progress and disagreement on key initial demands from Presidents Donald Trump and Xi Jinping is raising doubts about whether the U.S. and China will actually return to the negotiating table to overcome their much deeper differences. Trump complained again this week that China wasn’t buying the large volumes of U.S. agricultural goods that he claims Xi promised to purchase. Meanwhile, there’s been no change in how the U.S. treats telecommunications giant Huawei Technologies Co., a key demand of China. With the conflict dragging on, reaching a comprehensive trade deal as Trump gears up for re-election next year increasingly seems like a remote possibility, according to people familiar with the matter, who spoke on the condition of anonymity. “I’ve said repeatedly this is not a 10-minute process,” Commerce Secretary Wilbur Ross told Fox Business on Wednesday. “This is a long, involved process.” Trump’s trade team is now debating whether it would serve his re-election bid well to reach a trade deal with Beijing, which he then has to sell domestically in an environment that’s increasingly hostile toward China. “As some in the U.S. administration are looking to 2020 as their guide for how and whether to proceed with an agreement with China, the Chinese leadership will be very cautious -- fearing that any agreement reached may not last beyond the Twitter news cycle,” said James Green, who until recently was the senior official from the U.S. Trade Representative in Beijing and is now a senior adviser at McLarty Associates. “So it’s a political decision in China as well.” In addition to differing interpretations of what the two sides agreed to at the Group of 20 summit in late June, the countries have to decide whether to resume talks based on the draft agreement that collapsed in May, or to start again. Trump boasted at a press conference after his meeting with Xi that the Chinese had agreed to buy “tremendous” amounts of agricultural goods. But a member of the Chinese delegation told the U.S. team after the leaders’ meeting that Beijing won’t make concessions on agriculture regardless of what Trump announced publicly, a person familiar with the exchange said. According to that person, Beijing wants to see the Trump administration issue special licenses for U.S. suppliers to resume shipments to Huawei before buying more crops.
Huawei Planning Extensive US Layoffs - Huawei Technologies Co. is expected to slash hundreds of jobs at a US-based R&D subsidiary, according to the Wall Street Journal. The 'extensive' layoffs will affect workers at Futurewei Technologies, which employes around 850 people at labs across the country, including California, Texas and Washington State. The exact number of layoffs couldn't be determined, but one of the people said they were expected to be in the hundreds. Some of Huawei’s Chinese employees in the U.S. were being given the option of returning home and staying with the company, another person said. -Wall Street Journal Following the May 16 decision by the Commerce Department to place Huawei on its so-called 'entity list,' which blocks companies from supplying US-sourced technology to Huawei without a license, Futurewei employees have faced difficulties communicating with their China-based colleagues. The company employs over 180,000 people worldwide. Huawei has been virtually unable to buy critical US components and software for its telecommunications products - including smartphones and cellular base stations which are sold worldwide. Last year alone the company bought $11 billion worth of US tech. It is the largest maker of telecommunications equipment in the world, and the #2 vendor of smartphones - ahead of Apple but behind Samsung.
China Vs. The U.S. Treasury: Why Beijing Won’t Use The ‘Nuclear Option’ Of Selling American Debt -- At the present, China is America’s largest foreign creditor, holding $1.1 trillion in U.S. Treasury bonds. That accounts for 4–5 percent of America’s national debt, which is now a staggering $22.22 trillion. America’s addiction to debt and China’s willingness to buy it is nothing new, but the continual escalations of the U.S.-China trade war have revived worries that China will “weaponize” its U.S. Treasury holdings with a large-scale dump into the open markets. Described here, the economic mechanisms of a U.S. Treasury holdings sell-off are fairly straightforward: If China’s holdings were sold into the open market, it would create a seismic shift in the supply and demand for U.S. bonds. Consequently, the price for bonds would fall and their yields would surge. Because Treasury bond yield rates are benchmarks for interest rates on borrowing throughout the country, the sudden, unexpected spike in interest rates would roil the U.S. economy, derail growth, weaken the U.S. dollar, and cause global panic in holdings of U.S. debt and dollars. Essentially, this is what’s been referred to as China’s “nuclear option.” Admittedly, it makes for a good headline. But most analysts dismiss the possibility out of hand. As former Treasury official Brad Setser wrote last year when the U.S.-China trade war started to kick off: “On the surface, it looks like the U.S. is extraordinarily vulnerable,” Setser said. But upon further examination, “there are no shortage of technical options to limit the impact of China’s sales.” After the trade war ratched up a few more notches, the economists at Trivium made a “public service announcement” in their October 2018 Tip Sheet to say there are plenty of reasons China wouldn’t sell its holdings, the top three being, in their words:
- “It would be ineffective — the Fed could buy up the treasuries that China sold.
- China would be giving up a huge safety net — the point of the FX reserves (i.e., U.S. treasury holdings) is to have them in case of emergency.
- It would send the CNY soaring — the move would inflict massive pain on China by tightening financial conditions dramatically.”
Markets Don't Believe Trump's Trade War Is Zero-Sum - Olivier Blanchard and Christopher G. Collins - The Trump administration views trade mostly as a zero-sum game. In the past, it argues, China has won and the United States has lost. It is thus time to turn the tables, for the United States to win and for China to lose. Most economists, by contrast, believe that trade is a mostly positive-sum game, that both countries can gain from more open trade and both can lose from less open trade. We thought it would be interesting to test what market participants think. To do so, we looked at the joint response of the Chinese and US stock markets to President Donald Trump’s China-trade-related tweets. The bottom line: If markets believed that trade was indeed mostly a zero-sum game, one would have expected the two markets to move in opposite directions. In fact, both markets typically reacted in the same direction. Some tweets were good news for both countries, some tweets were bad news. Few, if any, were good news for one and bad news for the other. In short, markets did not see trade negotiations as a zero-sum game. We first collected all Trump tweets from www.trumptwitterarchive.com, starting on June 11, 2018 and ending on June 11, 2019, and containing the word “China.” We removed all retweets and tweets that were duplicate versions of past tweets and combined all the tweets that were part of the same thread into a single event. We removed all tweets unrelated to trade. This left us with 71 tweets. We then collected stock market responses following the tweets using futures prices for the S&P 500 and FTSE China A50 indexes. We used futures prices because most tweets were issued when the Chinese spot market was closed. Some tweets were issued when the futures markets were closed at the start or the end of the window, either in China or in the United States, and we had to drop those observations. This left us with 36 to 46 usable tweets depending on the size of the post-tweet window. We then looked at changes in stock prices after 30 minutes, 60 minutes, 2 hours, and 6 hours. The scatter diagrams are presented in the figure below, with the change in the A50 index on the horizontal axis and the change in the SP&500 index on the vertical axis, both in basis points.
A Blockchain solution for the technology war between China and the US “ - There is broad support among economists and policy makers for the notion that a certain degree of protection of property rights with patents and trade-marks provide incentives to innovations and fosters growth. The existing system of national patent offices, however, imposes lengthy and costly processes. Moreover, as the ongoing dispute between the US and China vividly illustrates, they fall well short of protecting property rights effectively in the context of international trade in goods, services, and assets.Blockchain technology is particularly well suited to decentralize certification processes and could be applied to the design and development of a Global Patent Office (GPOX) under the auspices of Trade-Related Aspects of Intellectual Property Rights agreement of the World Trade Organization.Blockchain has the potential to be applicable wherever ledger-based record keeping has a role to play. Examples include medical record-keeping, land and property registry, financial contracting, accounting standards and certification, and so on. The idea to use blockchain to decentralise the functions of a patent office is not too far-fetched. Bitcoin is already used by private companies in the patenting field to store the hash value of documents related to inventions, or to timestamp the creation of a document, taking advantage of the sequence of characters that can be inserted when marking a transaction output as invalid. And these hash values can be admitted, like any other piece of evidence, in national enforcement proceedings. However, blockchain usage for this purpose can be pushed much further to fully manage the submission, editing, review, and storage of content subject to intellectual property right protection.
Trump’s next trade war target: Vietnam - The popular consensus is that Vietnam has been one of the world’s biggest US-China trade war winners, as global supply chains shift production away from tariff-hit China and towards the low-cost Southeast Asian nation. That upshot, one that may have added as much as 8% to Vietnam’s gross domestic product (GDP) according to one bank’s research, has apparently already run its full course as US President Donald Trump slaps new punitive tariffs on Hanoi’s exports. In May, Vietnam was added to the US Treasury Department’s list of possible currency manipulators, a designation that could result in punitive measures if proved. That threat presaged this month’s imposition of a whopping new 400% US duty on Vietnamese steel imports that originate from South Korea and Taiwan. The US could next slap punitive tariffs on certain Vietnamese imports based on allegations Hanoi is allowing Chinese-made products to be rebranded as Vietnamese goods before export to the US to circumvent tariffs on China, a process officials refer to as “transshipment.” Some economists predict that, for instance, if the US moves to impose a 25% tariff on Vietnam’s exports, as it has done with China for reasons of national security, the move would cause Hanoi’s exports to fall by a quarter and shave off more than 1% from GDP. That could be in the offing, analysts reckon, in light of Trump’s scathing comment last month that Hanoi was “almost the single worst abuser of everybody” in regard to trade and that “Vietnam takes advantage of us even worse than China.” That critique was aimed at Vietnam’s high and rising trade surplus with the US, which hit a record US$40 billion last year, up slightly from 2017 and in spite of a concerted Vietnamese effort to buy more from the US.
Trump on course for new trade war with France over plans to slam US tech firms with giant new taxes - US President Donald Trump has ordered an investigation into French plans to slam big tech companies, like Amazon, Apple, Google, and Facebook, with giant new taxes.The probe, known as a Section 301 investigation, was announced Wednesday night by US Trade Representative Robert Lighthizer. It could culminate in retaliatory tariffs, which might open up a new trade war.France's digital-services tax, which was approved by the French Senate on Thursday, would require tech firms with revenue of more than $845 million to pay a 3% tax on their French sales.This could raise about €500 million, or $563 million, for the French public purse every year, which French Finance Minister Bruno Le Maire has said would amount to "justice."Taxing revenue is meant to counter the complex arrangements most US tech firms have in place to avoid paying high taxes on their profits. Lighthizer's office said it had reason to believe that France was "unfairly targeting the tax" on US companies. As a result, Trump has called for the investigation. "The United States is very concerned that the digital-services tax which is expected to pass the French Senate tomorrow unfairly targets American companies," Lighthizer said Wednesday. "The president has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce."
Global trade was slowing down before the tariff war started - This gross exports series shows that between 2000 and 2008 there was a frenzy of activity in global supply chains. Indeed, as Mr Shin explained, gross exports relative to GDP exploded by a cumulative 16 per cent, due to intense supply chain activity between China and the west. However, when the 2008 financial crisis hit, gross exports crumbled. No surprise there, perhaps. But what is more remarkable is that, while gross exports recovered in 2009, they have never returned to anything like the pre-2007 figure. More striking still, since 2011 gross exports have steadily declined relative to GDP — meaning, Mr Shin noted, that “the slowdown in trade predates the retreat into protectionism and trade conflicts in the last couple of years”.Why? One explanation might be that services are becoming more important in the global economy than manufacturing. Another might be technological innovation: automation has cut the cost of western manufacturing, reducing the need to outsource production to low-wage locations such as China. However, Mr Shin thinks another crucial — and overlooked — factor is finance. Companies need hefty amounts of working capital to run their supply chains, and about two-thirds of this typically comes from their own resources, with the other third coming from bank and non-bank finance."
Executive Order on Maximizing Use of American-Made Goods, Products, and Materials --By the authority vested in me as President by the Constitution and the laws of the United States of America, and to promote the principles underlying the Buy American Act of 1933 (41 U.S.C. 8301-8305), it is hereby ordered as follows:
- Section 1. Policy. (a) As expressed in Executive Order 13788 of April 18, 2017 (Buy American and Hire American), and in Executive Order 13858 of January 31, 2019 (Strengthening Buy‑American Preferences for Infrastructure Projects), it is the policy of the United States to buy American and to maximize, consistent with law, the use of goods, products, and materials produced in the United States. To those ends, my Administration shall enforce the Buy American Act to the greatest extent permitted by law.
- (b) In Executive Order 10582 of December 17, 1954 (Prescribing Uniform Procedures for Certain Determinations Under the Buy-American Act), President Eisenhower established that materials shall be, for purposes of the Buy American Act, considered of foreign origin if the cost of the foreign products used in such materials constitutes 50 percent or more of the cost of all the products used in such materials. He also established that, in determining whether the bid or offered price of materials of domestic origin is unreasonable or inconsistent with the public interest, the executive agencies shall either (1) add 6 percent to the total bid or offered price of materials of foreign origin, or (2) add 10 percent to the total bid or offered price of materials of foreign origin less certain specified costs as follows. Where the foreign bid or offer is less than $25,000, applicable duty is excluded from the calculation. Where the foreign bid or offer is more than $25,000, both applicable duty, and all costs incurred after arrival in the United States, are excluded from the calculation.
Trump weighs ousting Commerce chief Wilbur Ross after census defeat - President Donald Trump has told aides and allies that he is considering removing Commerce Secretary Wilbur Ross after a stinging Supreme Court defeat on adding a citizenship question to the census, according to multiple people familiar with the conversations. While Trump has previously expressed frustration with the 81-year-old Ross, in particular over failed trade negotiations, Ross’s long personal relationship with the president has allowed him to keep his job. And after the departure of Labor Secretary Alex Acosta, the Cabinet’s only Hispanic who resigned on Friday amid questions about his role in a controversial 2008 plea agreement with sex offender Jeffrey Epstein, Ross may yet receive another reprieve. But some White House officials expect Ross to be the next Cabinet secretary to depart, possibly as soon as this summer, according to advisers and officials. Frustrated by Ross’ leadership of the Census Bureau, which is within the Commerce Department, Trump has been making calls to allies outside the White House musing about replacing Ross. The White House declined comment.
Democrats back mass deportations - Popular revulsion and anger mounted this weekend ahead of nationwide immigration raids announced by President Trump.In the working class and among broad sections of the middle class, there is deep disquiet and shock over the horrific treatment of immigrants. But in the ruling elite, the political and media establishment is responding to opposition from below by closing ranks behind Trump and his fascistic advisers.Tens of millions of immigrant workers and their families are living in fear as the state apparatus begins a military-style crackdown. Many immigrants have gone into hiding.The Guardian reports that some immigrants are stockpiling food, because, as one Atlanta, Georgia resident explains, “Who knows when we’ll leave the house.” NBC News reports that many US citizens in immigrant neighborhoods have begun carrying their US passports for fear of getting swept up in raids. The growth of popular opposition found expression in the larger-than-expected demonstrations that took place this weekend in 700 cities across the country. In many areas, neighbors are using social media to warn immigrants of police activity. The Wall Street Journal reported that residents of two buildings in Harlem turned Immigration and Customs Enforcement (ICE) agents away during a raid on Saturday.
Progressives blame Nancy Pelosi for 'horrendous' migrant aid bill - — Rep. Pramila Jayapal and Sen. Jeff Merkley, both progressive Democrats, blamed Democratic leadership for the passage of a humanitarian aid package for the US southern border that many Democrats believe doesn't contain strong enough protections for migrants. Jayapal and Merkley spoke on Friday afternoon at Netroots Nation, the country's largest gathering of progressive activists. Merkley blamed House Speaker Nancy Pelosi for giving into Republicans and moderate Democrats for deciding not to allow Democrats to conference on the aid package last week. He said that Senate Democrats were under the impression that it would go to conference — a chance to hash out differences between House and Senate bills — rather than the House voting on the Senate version of the bill. "The complete assumption on the Senate side was that Speaker Pelosi would take it to conference, and she didn't," Merkley said, calling the outcome "horrendous." The House ultimately passed the bipartisan legislation without the support of almost 100 Democrats. Outspoken progressives, including Rep. Alexandria Ocasio-Cortez, were infuriated by the process, which they argued failed to leverage Democratic power to strengthen the bill. While Jayapal blamed Senate Democrats — the majority of whom voted for the bill — she said Friday that she'd since had a "very good conversation" with Senate Majority Leader Chuck Schumer and that there would be more communication between House progressives and senators in the future. Merkley, who introduced a bill this week that would end migrant family separations and improve health and safety standards for detainees, said he considers the migrant detention facilities "internment camps," but wouldn't use the term "concentration camp," which Ocasio-Cortez has controversially used to describe the facilities. "What we are seeing in these child prisons is horrific ... I've referred to them as prisons, I think that's accurate. I've referred to the family prisons as internment camps because to me they closely resemble the Japanese-American internment camps," he told INSIDER in an interview on Friday. "I'll leave it to others to use other terminology."
Trump to end asylum protections for most Central American migrants at US-Mexico border - The Trump administration is moving to end asylum protections for most Central American migrants, the Departments of Justice and Homeland Security announced Monday. According to text of the rule set to publish in the Federal Register on Tuesday, asylum seekers who pass through another country before reaching the United States will be ineligible for asylum when they reach the southern border. The move marks an acceleration in the Trump administration’s efforts to reduce the number of migrants crossing the U.S. border with Mexico and has the potential to considerably reduce the number of asylum claims. The Departments of Homeland Security and Justice announced the Interim Final Rule (IFR) in a joint statement Monday. “The Departments are amending their respective regulations to provide that, with limited exceptions, an alien who enters or attempts to enter the United States across the southern border after failing to apply for protection in a third country outside the alien’s country of citizenship, nationality, or last lawful habitual residence through which the alien transited en route to the United States is ineligible for asylum,” states the text of the rule. Under the rule, those who have been the victims of trafficking are granted exceptions. The rule also allows exceptions for migrants passing through countries that have not signed major international refugee treaties and for migrants who have been denied asylum in the countries they traveled through. Trump administration officials described it as necessary to reduce the burden placed on the U.S. by the growing number of immigrants seeking asylum at the southern border by allowing agencies to more quickly process cases by weeding out individuals trying to “exploit” the asylum protections.
Trump abolishes right to asylum on US southern border - The Trump administration is today implementing an “interim final rule” drafted by the US Justice and Homeland Security Departments that will effectively seal the US southern border to men, women and children seeking asylum from violence and repression in Central America and beyond. In yet another assertion of untrammeled executive power, Trump’s asylum decree rides roughshod over both US and international law. The interim rule orders US border officials to summarily deny asylum to anyone who “enters or attempts to enter the United States across the southern border after failing to apply for protection in a third country outside the alien’s country of citizenship, nationality, or last lawful habitual residence through which the alien transited en route to the United States.” This means that those attempting to apply for asylum at ports of entry along the US southern border will simply be asked if they applied for asylum in Mexico or Guatemala and, if they say no, will be turned away. Meanwhile those crossing the Rio Grande and the desert and turning themselves in to the border patrol will be deported on the same grounds without any semblance of due process. The measure represents a qualitative tightening of already draconian and cruel immigration policies implemented by the Trump administration. This includes a “remain in Mexico” order that has forced immigrants seeking asylum in the US to stay in Mexican border towns until their cases are adjudicated, without adequate housing, food or services, and prey to widespread violence. The text of the interim order is a mockery of legal—not to mention democratic—principles. Its main argument is that the number of families and children arriving on the US border has created too much of a strain on the departments who issued the new ruling and, in response, they are simply going to impose a blanket denial of asylum.
Pentagon Sends 2,100 More Troops To Southern Border - Less than a month after Congress passed and Trump signed a $4.6 billion emergency spending bill to address the still-raging humanitarian crisis at the border, the Pentagon has authorized the deployment of another 1,100 active-duty troops and 1,000 Texas National Guardsmen - which will increase the number of American military personnel at the southwestern border by 45%.The new arrivals will join the roughly 4,500 personnel currently stationed at the border. Richard Spencer, who has temporarily assumed the role of acting defense secretary while Mark Esper, President Trump’s nominee to permanently fill the position, faces confirmation hearings in the Senate. According to the Pentagon’s announcement, the additional troops will assist in securing points of entry and provide support in migrant holding facilities.These facilities will include the one in Donna, Texas that Vice President Mike Pence visited last week.A report this month by the Department of Homeland Security’s inspector general cited unsanitary living conditions in holding facilities, and Democrats have seized on conditions in the facilities to attack the Trump Administration for running "concentration camps" (though some of these same politicians have seized on the opportunity for their own personal PR purposes).Mexico has also recently deployed more troops to its side of the border, as President Trump's tariff threats still loom large over the bilateral relationship between the two neighboring countries. The deployment comes as the Trump Administration is trying to push through a policy that would restrict which migrants are allowed to declare asylum by requiring them to declare asylum in at least one country during their route to the US.’
Armed man killed during attack on ICE detention center, police say - An armed man was fatally shot Saturday after throwing what authorities called “incendiary devices” at an immigration detention center in Washington state and trying to set a commercial-size propane tank on fire, according to Tacoma police. About 4 a.m., 69-year-old Willem Van Spronsen threw “lit objects” at buildings and at cars in a parking lot, police said, causing a vehicle to go up in flames. Court records show the man was arrested last year at a protest at the privately owned detention center, and Immigration and Customs Enforcement called the man an “anti-immigration-enforcement protester.” The man, a Vashon Island resident, died at the scene after shots were fired, police said. “This could have resulted in the mass murder of staff and detainees housed at the facility had he been successful at setting the tank ablaze,” Shawn Fallah, who heads the ICE Office of Professional Responsibility, said in a statement. “These are the kinds of incidents that keep you up at night.” No ICE employees or detainees were hurt, agency spokeswoman Tanya Roman told The Washington Post. The detention center canceled visitations for the day but did not go into lockdown, Roman said. The facility returned to its full operations Sunday.
Few ICE raids, but much-hyped plans stoke fears in immigrant communities - A mass federal crackdown on undocumented immigrants did not materialize Sunday in San Francisco or the other nine cities expected to be targeted. There were only a few reports of actions in Florida, Chicago and New York City, and none in the Bay Area. Federal officials altered their plans for sweeping nationwide raids targeting people who have been ordered deported after news reports alerted immigrant communities on what to expect, current and former Department of Homeland Security officials told the New York Times.But the absence of reported raids Sunday did not allow immigrant advocates to lower their guards. The Rev. Deborah Lee, executive director of Oakland’s Interfaith Movement for Human Integrity, said leaders at dozens of Bay Area churches were informing their congregations about resources such as immigration hotlines. “In a way, I feel like we’ve been preparing for a raid as soon as the president was elected,” Lee said. “These threats from the president are designed to create panic and fear. If you’re going to raid people, why tell them three weeks in advance? He’s obviously doing this as a strategy to instill fear and put people back into the shadows. It’s a form of repression.”
Amazon is the invisible backbone behind ICE’s immigration crackdown - In June, when the US Immigration and Customs Enforcement agency (ICE) began separating migrant children from their parents, several tech companies came under fire for providing the agency with the software that helped them do it.At the center of the criticism was data mining company Palantir, which designed the Investigative Case Management system. The ICM is a critical component of ICE’s deportation operations—it integrates a vast ecosystem of public and private data to track down immigrants and, in many cases, deport them. Little is known about how the software actually works or how extensively ICE uses it. But within the first nine months of the Trump administration, ICE arrests increased 42% compared with the same period in the previous year. According to civil rights and immigration activists, ICM is fueling the mass surveillance and targeting of immigrants at an unprecedented scale. Now a new investigation, published today, sheds more light on the web of tech companies involved in supporting ICE and its parent agency, the Department of Homeland Security. The report, commissioned by activist organizations Mijente, the National Immigration Project, and the Immigrant Defense Project, found that Amazon has played as central a role as Palantir in providing the backbone infrastructure for many of ICE’s, and DHS’s, key programs. Amazon has also enjoyed a cozy relationship with the federal government that has helped it secure an outsize number of government contracts.In 2017, an Intercept investigation found that ICM pulled together data from an array of federal and private law enforcement entities to create detailed profiles that were then used to track immigrants. That data could include a person’s immigration history, family relationships, personal connections, addresses, phone records, biometric traits, and other information. All of that data and the algorithms powering ICM are now being migrated to Amazon Web Services (AWS) in their entirety; Palantir pays Amazon approximately $600,000 a month for the use of its servers, according to the report’s authors.
Dozens Arrested as Over 1,000 Jewish Activists and Allies Shut Down Entrances to ICE Headquarters Demanding Closure of Trump Detention Camps - Over a thousand progressive Jewish activists and allies on Tuesday shut down the entrances to ICE headquarters in Washington, D.C. to protest President Donald Trump's treatment of migrants and demand the closure of the administration's detention camps.As The Daily Beast reported, ICE employees "were forced to walk around the protesters, looking for ways to enter the building, as people outside caught glimpses of workers inside checking the doors.""We will not allow them to get to their destructive place of work," said one activist who attended the demonstration, which was organized by Jewish advocacy group Never Again Action and immigrant rights campaigners with Movimiento Cosecha.Protesters locked arms in the middle of the street leading to ICE headquarters and faced off with city police. Dozens of demonstrators were reportedly arrested during the action, which lasted around five hours. “It's not just symbolic—we're actually shutting down ICE," one organizer told Buzzfeed. "More than a thousand Jews, immigrants, and allies shut down DHS/ICE headquarters for hours today," wrote historian Angus Johnston. "This is a more significant development in the history of this administration than the House censure resolution."
Why Does The American Media Only Care About Dead Migrant Kids Under Trump? - The tragic image of a drowned father and child washed ashore on the Rio Grande is being used as easy ammunition against Donald Trump - but where was the outpouring of grief when migrants were dying under the Obama administration?There is no good argument to be made that journalists should not be critical in their coverage of the Trump administration. After all, to hold the president to account, to inform the public on the consequences of his policy choices, “to comfort the afflicted and afflict the comfortable” as that famous saying goes, is all in the job description. It’s just a pity they only decided to take the responsibility seriously when Trump took office. Why should anyone believe that their showy displays of grief and horror are sincere now, given their silence during the Obama years, when many of the same policies causing outrage now were also in place then?The same thing goes for the Democrats, who are eagerly attempting to cast themselves as the party of compassion. Joe Biden railed against Trump’s “deportation state” in the Miami Herald this week, despite having served as vice president under Obama, dubbed the ‘Deporter in Chief’ by immigrants rights activists. The Obama administration deported more migrants than any previous administration, with children “moved to the head of the line” to be turfed out. Two years before Trump appeared on the scene, in 2014, 445 people died attempting to cross an increasingly militarized border. It would be inaccurate to say that there was no coverage of the crisis while Obama was president. There was some bland, less-emotional coverage. There was also some in-depth reporting which captured the extent of the crisis — but there was no mass media mobilization against Obama himself. The facts and death tolls were not plastered across the cable news networks night and day. No one argued that Obama was shaming America.
Yes, Obama deported more people than Trump but context is everything - President Donald Trump wants to deport a lot of people this weekend. "You know what? They came in illegally. They have to go out," he told reporters Friday as he confirmed that planned immigration raids would go ahead in certain cities starting this weekend. That's triggered a national outcry and anxiety in immigrant communities. But immigration advocacy groups criticized then-President Barack Obama as the "deporter in chief" during his bid for reelection in 2012. It's a perception that former Vice President Joe Biden will have to answer for as he campaigns to carry on Obama's legacy. The issue is complicated. The Bush administration moved toward removing people from the country with a court order. What's more commonly known as deportation is referred to now by the government as a "removal." This sparked increased criticism from immigrant rights organizations. In previous administrations, far more people attempted to enter the country, and far more were turned away, often without a hearing before an immigration judge. That procedure used to be known as a "voluntary departure" but is now called a "return" by the government. They all have the effect of a deportation, but there are more legal consequences for a removal than for a return. In totality, President George W. Bush deported even more people than Obama -- and President Bill Clinton deported more than Bush.
Trump is expected to sign order to send people seeking asylum in the US to Guatemala instead, according to report - President Donald Trump is expected to announce a safe-third-country agreement with Guatemala next week, a major immigration deal, reports Jonathan Blitzer of The New Yorker. Blitzer cited a Department of Homeland Security official as his source.A draft of the deal reportedly obtained by The New Yorker says that people seeking asylum from any country who arrive at US ports of entry or are apprehended while crossing between ports of entry could be sent to seek asylum in Guatemala instead.The US must give asylum seekers a chance to bring their claims before authorities by law. Under the new agreement, asylum seekers wouldn't have a chance to make their case in the US — instead, any asylum seekers, not only Central Americans, could be sent to Guatemala.The deal, if signed, would be the latest move by the Trump Administration to limit immigrants entering into the US. On Friday, President Trump released a slew of tweets saying that his immigration deal with Mexico included secret concessions. Trump threatened tariffs on Mexican imports if the country didn't act to slow the flow of Central American migrants from its border.In the last year, tens of thousands of migrants have sought asylum in the US, according to The New Yorker. The US currently has a backlog of about one million cases in immigration courts. It is unclear if Guatemala could truly absorb this kind of volume. Trump has attempted to reach a similar agreement with Mexico, even though many immigration activists say that its legal system could not handle the responsibility. The potential agreement with Guatemala goes even further than proposals with Mexico, even though more people are leaving the country than any other in the same part of Central America. The country is coping with poverty, corruption, crime, and climate change which has made large parts of it unlivable.
There are 16 million slaves around the world making our stuff - Slavery has been illegal worldwide for just about four decades, since Mauritania finally abolished it in 1981.But slavery didn’t end there. According to the latest report by the Walk Free Initiative, presented today (July 17) at the UN Headquarters in New York, there were 40.3 million people living in conditions of slavery in 2018, most of them women.There isn’t an official legal definition of modern slavery, but the UN describes it as the condition of people whose work “is performed involuntarily and under the menace of any penalty.” Modern slaves can be coerced to work through explicit measures like violence, but also through subtler means like financial pressure, or by limiting someone’s movement by retaining their identification.While it’s easy to believe that slavery is limited to poor or underdeveloped countries, or countries with a questionable human rights record, it is actually happening everywhere. Recently, for example, there was two cases where diplomats kept staff in their US residencies who were working in conditions of slavery.The UN and its member states committed to eliminating slavery by 2030, along with human trafficking, forced labor, and child labor. The commitments are part of the UN’s sustainable development goals—a set of ideals the world’s governments pledged to tackle in 2015.But progress has been little, and slow. According to the report, which surveyed 183 countries (out of 193 UN member states), only 31 countries have ratified the UN-developed protocol on forced labor, a legal framework for countries to identify and target exploitation. The US and many European countries are among those that have yet to ratify it, and all over the world there is a lack of procedures to identify victims of slavery, or provide the support they require.
Leave the US, Trump tells liberal Democratic congresswomen - (AP) — President Donald Trump on Sunday assailed a group of Democratic congresswomen of color as foreign-born troublemakers who should go back to the "broken and crime infested places from which they came," ignoring the fact that the women are American citizens and all but one was born in the U.S. Trump's tweets drew a sharp rebuke from House Speaker Nancy Pelosi, who said the president wants to "make America white again." Republican Rep. Justin Amash of Michigan, a Trump critic who recently took steps to leave his party, called the remarks "racist and disgusting." Trump was almost certainly referring to Rep. Alexandria Ocasio-Cortez of New York and her allies in what's become known as the squad. The others are Reps. Ilhan Omar of Minnesota, Ayanna Pressley of Massachusetts and Rashida Tlaib of Michigan. Only Omar, from Somalia, is foreign-born. With his remarks, Trump again inserted himself into a rift between Pelosi and the liberal congresswomen, after offering an unsolicited defense of the Democratic speaker days earlier. Pelosi has been seeking to minimize Ocasio-Cortez's influence in recent days, prompting Ocasio-Cortez to accuse Pelosi of trying to marginalize women of color. "She is not a racist," Trump said Friday. "So interesting to see 'Progressive' Democrat Congresswomen, who originally came from countries whose governments are a complete and total catastrophe, the worst, most corrupt and inept anywhere in the world (if they even have a functioning government at all), now loudly and viciously telling the people of the United States, the greatest and most powerful Nation on earth, how our government is to be run," he said in tweets. "Why don't they go back and help fix the totally broken and crime infested places from which they came.
Trump doubles down after telling Democratic congresswomen to 'go back' to their countries - President Trump on Sunday night doubled down amid a growing backlash over his earlier tweets telling a group of Democratic congresswomen that they should "go back" to the countries that they came from."So sad to see the Democrats sticking up for people who speak so badly of our Country and who, in addition, hate Israel with a true and unbridled passion. Whenever confronted, they call their adversaries, including Nancy Pelosi, 'RACIST,'" Trump said in a pair of tweets."Their disgusting language and the many terrible things they say about the United States must not be allowed to go unchallenged. If the Democrat Party wants to continue to condone such disgraceful behavior, then we look even more forward to seeing you at the ballot box in 2020!" he continued.Trump was responding to outrage over comments he made earlier on Sunday in which he targeted a group of unnamed progressive congresswomen "who originally came from countries whose governments are a complete and total catastrophe." In the tweets, which appeared to be directed at Reps. Alexandria Ocasio-Cortez (D-N.Y.), Ilhan Omar (D-Minn.), Rashida Tlaib(D-Mich.) and Ayanna Pressley (D-Mass.), the president suggested they "go back and help fix the totally broken and crime infested places from which they came."
Born in the U.S.A. - Menzie Chinn - Today, Mr. Trump tweeted about four congresspersons of color: ….viciously telling the people of the United States, the greatest and most powerful Nation on earth, how our government is to be run. Why don’t they go back… It needs to be emphasized that this statement is part of a continuing Trump program to characterize non-caucasian Americans as “un-American” or “foreign”, even when born in the United States. Of “The Squad”, Ayanna Pressley was born in Chicago, Alexandria Ocasio-Cortez was born in NYC, and Rashida Tlaib was born in Detroit. Only Ilhan Omar is not native born American (Somalia). There is a long tradition of America welcoming (intermittently) immigrants and refugees from foreign shores, but as we know, Mr. Trump does not subscribe to that view (unless they come from Norway, apparently). If you are inclined to give Mr. Trump some slack, allowing that he just might not have realized these individuals were born in the United States (after all, I truly believe he didn’t know Puerto Rico was part of America when Hurricane Maria struck), the fact that he has stated a desire to eliminate birthright citizenship points to a darker intent. From NYT:President Trump said he was preparing an executive order that would nullify the long-accepted constitutional guarantee of birthright citizenship in the United States, his latest attention-grabbing maneuver days before midterm congressional elections as he has sought to activate his base by vowing to clamp down on immigrants and immigration. “We’re the only country in the world where a person comes in and has a baby, and the baby is essentially a citizen of the United States for 85 years, with all of those benefits,” Mr. Trump told Axios during an interview that was released in part on Tuesday, making a false claim. “It’s ridiculous. It’s ridiculous. And it has to end.”As a matter of record, Mr. Trump is wrong in his characterization of the u niqueness of the US and birthright citizenship; there are at least 30 countries that also grant some form of birthright citizenship. See also this post.
Pelosi announces House resolution to condemn Trump's 'xenophobic tweets' - Speaker Nancy Pelosi (D-Calif.) on Monday urged House Democrats to support a resolution to condemn President Trump for tweeting that four Democratic congresswomen of color should "go back" to their countries, even though all are U.S. citizens. "The House cannot allow the President’s characterization of immigrants to our country to stand. Our Republican colleagues must join us in condemning the President’s xenophobic tweets," Pelosi wrote in a letter to House Democrats announcing a "forthcoming" resolution from Reps. Tom Malinowski (D-N.J.), who was born in Poland, Jamie Raskin (D-Md.), and other Democratic members who were born abroad. "This weekend, the President went beyond his own low standards using disgraceful language about Members of Congress," Pelosi added. "Rather than attack Members of Congress, he should work with us for humane immigration policy that reflects American values." In Trump's tweets, which appeared to be directed at freshmen Democratic Reps. Alexandria Ocasio-Cortez (N.Y.), Ilhan Omar (Minn.), Rashida Tlaib (Mich.) and Ayanna Pressley (Mass.), the president suggested they "go back and help fix the totally broken and crime infested places from which they came." Omar, who came to the U.S. as a refugee from Somalia, is the only one among the four who was born outside the U.S. "So interesting to see 'Progressive' Democrat Congresswomen, who originally came from countries whose governments are a complete and total catastrophe, the worst, most corrupt and inept anywhere in the world (if they even have a functioning government at all), now loudly and viciously telling the people of the United States, the greatest and most powerful Nation on earth, how our government is to be run," Trump wrote in a series of tweets Sunday morning. The House resolution would offer Democrats a chance to unite after internal strife over the past week when the four freshman lawmakers sparred with party leaders. Ocasio-Cortez had suggested in an interview with The Washington Post last week that Pelosi was engaging in a pattern of "explicit singling out of newly elected women of color."
Trump Denounced for 'Incitement to Violence' Against Ilhan Omar After Latest Racist Attack on Congresswoman - Democrats in Congress condemned President Donald Trump Monday after he doubled down on his weekend attacks on progressive women of color in the House, this time focusing his racist comments on Rep. Ilhan Omar. At the White House, Trump told reporters that the Minnesota Democrat "hates Jews," months after Omar was attacked for her criticism of the pro-Israel lobby's hold on lawmakers. Trump also fabricated a claim that Omar had praised Al Qaeda and expressed pride in the group. The press conference came hours after the president had tweeted that Omar and Reps. Alexandria Ocasio-Cortez (D-N.Y.), Ayanna Pressley (D-Mass.), and Rashida Tlaib (D-Mich.) should apologize to him and the entire country for expressing criticism of his administration and Israel's treatment of Palestinians. Over the weekend he wrote that the lawmakers should "go back" to the countries they and their families came from. Trump's latest comments drew outcry from Omar and others who came to her defense. The president and his allies, Omar tweeted, "are working to silence the voices of the people who see themselves represented in me. I will stay in the ring, fighting for what is right and will never back down in the face of these attacks."
Representatives Omar, Pressley, Ocasio-Cortez, Tlaib News Conference - C-SPAN - Representatives Ilhan Omar (D-MN), Ayanna Pressley (D-MA), Alexandria Ocasio-Cortez (D-NY), and Rashida Tlaib(D=MI) held a news conference in response to recent tweets by President Trump in which he said the four Democratic freshman lawmakers should “go back” to the countries “from which they came.” Representative Pressley told reporters, “We will not be silenced” and said the tweets were a “disruption and distraction.”
Republicans scramble to contain Trump fallout | TheHill - Senate Majority Leader Mitch McConnell (R-Ky.) on Tuesday sought to dispel the uproar over President Trump’s controversial tweets targeting four nonwhite Democratic lawmakers, but also defended the president by declaring he is not a racist.McConnell tried to quell the controversy that has raged since Sunday when Trump tweeted that four minority Democratic lawmakers should “go back” to their home countries — even though all of them are U.S. citizens — by calling for a broad ceasefire in Washington.“The president is not a racist,” McConnell responded after reporters pressed him Tuesday afternoon on whether Trump’s tweets were racist or whether the GOP leader himself would ever use such language.Yet in his prepared remarks he also acknowledged that the president as well as the House Democratic freshmen with whom Trump has feuded over Twitter are responsible for letting things spin out of control.“I think there’s a consensus that political rhetoric has really gotten way, way overheated all across the political spectrum,” he said.McConnell’s two-pronged strategy, distancing his party from Trump’s rhetoric while also being careful not to alienate the president and his core supporters, mirrored the balancing act that many GOP lawmakers are trying to pull off, with mixed results.Trump’s tweet from Sunday, which he backed up with similar rhetoric during a Rose Garden ceremony Monday, set GOP lawmakers scrambling to control the political fallout.A handful of Republican lawmakers facing potentially tough races next year in Colorado, Maine, Iowa, North Carolina, Georgia and Arizona took different tacks in their responses, signaling the lack of a general plan on how to react to the president’s most incendiary and unexpected statements.Sen. Martha McSally (Ariz.), one of the GOP’s most vulnerable incumbents, let it be known through a spokeswoman that she would not comment on the matter.Sen. Cory Gardner (R-Colo.), who has a tough race in a state Democratic presidential nominee Hillary Clinton carried in 2016, said he disagreed with Trump’s language, though stopped short of calling it racist.“I disagree with them. I wouldn’t have said them. I wouldn’t have done that,” he said. “That’s not what we ought to focus on in this country.”Sen. Joni Ernst (Iowa), a member of Senate GOP leadership and a top Democratic target in 2020, acknowledged Monday that she thought Trump’s comments were racist.“Uh, yeah. They’re American citizens,” she said, referring to Reps. Alexandria Ocasio-Cortez (D-N.Y.), Ilhan Omar (D-Minn.), Rashida Tlaib(D-Mich.) and Ayanna Pressley (D-Mass.). Only Omar, who was born in Somalia, is an immigrant. Sen. Susan Collins (R-Maine), who is up for reelection in another state that voted for Clinton, on Monday urged Trump to delete his tweets.
Republican support for Trump rises after racially charged tweets: Reuters/Ipsos poll - Republican support for Trump rises after racially charged tweets: Reuters/Ipsos poll - (Reuters) - Support for U.S. President Donald Trump increased slightly among Republicans after he lashed out on Twitter over the weekend in a racially charged attack on four minority Democratic congresswomen, a Reuters/Ipsos public opinion poll shows.The national survey, conducted on Monday and Tuesday after Trump told the lawmakers they should “go back and help fix the totally broken and crime infested places from which they came,” showed his net approval among members of his Republican Party rose by 5 percentage points to 72%, compared with a similar poll that ran last week.Trump, who is seeking re-election next year, has lost support, however, with Democrats and independents since the Sunday tweetstorm. Among independents, about three out of 10 said they approved of Trump, down from four out of 10 a week ago. His net approval - the percentage who approve minus the percentage who disapprove - dropped by 2 points among Democrats in the poll.Trump’s overall approval remained unchanged over the past week. According to the poll, 41% of the U.S. public said they approved of his performance in office, while 55% disapproved. The results showed strong Republican backing for Trump as the Democratic-led U.S. House of Representatives passed a symbolic resolution on Tuesday, largely along party lines, to condemn him for “racist comments” against the four Democratic lawmakers.
AOC And 'Snot-Nosed Punk' Chief-Of-Staff Alienating Moderate Democrats, Helping Trump: Rahm Emanuel - In a recent Maureen Dowd WSJ Op-Ed, Scaling Wokeback Mountain, former Chicago mayor Rahm Emanuel said that Rep. Alexandria Ocasio-Cortez and her "snot-nosed punk" chief-of-staff Saikat Chakrabarti are essentially destroying the Democratic party and handing Republicans a win. Chakrabarti sent shock waves through the Democratic caucus when he posted a tweet about the border bill comparing moderate and Blue Dog Democrats — some of whom are black — to Southern segregationists in the ’40s. -WSJ"What votes did you get?" said Emanuel, slamming the 33-year-old Chakrabarti. "You should only be so lucky to learn from somebody like Nancy who has shown incredible courage and who has twice returned the Democratic Party to power." "We fought for years to create the majorities to get a Democratic president elected and re-elected, and they’re going to dither it away. They have not decided what’s more important: Do they want to beat Trump or do they want to clear the moderate and centrists out of the party? You really think weakening the speaker is the right strategy to try to get rid of Donald Trump and everything he stands for?" said Emanuel. Dowd, in turn, called Chakrabarti a "real instigator," noting that the Justice Democrats co-founder and "former Silicon Valley Bernie Bro assumed he could apply Facebook's mantra, "Move fast and break things," to one of the oldest institutions in the country." But Congress is not a place where you achieve radical progress — certainly not in divided government. It’s a place where you work at it and work at it and don’t get everything you want. The progressives act as though anyone who dares disagree with them is bad. Not wrong, but bad, guilty of some human failing, some impurity that is a moral evil that justifies their venom. –WSJ Meanwhile, internal Democratic polls reveal that swing voters are absolutely turned off by AOC and other progressive Democrats.
Federal Law Says ‘Go Back To Where You Came From’ Counts As Discrimination - Lawmakers spent most of Tuesday hashing out whether to condemn President Donald Trump’s racist comment that four congresswomen of color should “go back” to their ancestral countries, but a federal agency has already made the decision for them.The U.S. Equal Employment Opportunity Commission (EEOC) has written specific rules that protect people, mostly immigrants, against employment discrimination on the basis of their national origin. The agency is responsible for enforcing laws that prohibit discrimination and harassment based on race, color, sex, religion, national origin, age and disability.“Ethnic slurs and other verbal or physical conduct because of nationality are illegal if they are severe or pervasive and create an intimidating, hostile or offensive working environment, interfere with work performance, or negatively affect job opportunities,” the commission said on its website to describe harassment based on national origin.“Examples of potentially unlawful conduct include insults, taunting, or ethnic epithets, such as making fun of a person’s foreign accent or comments like, ‘Go back to where you came from,’ whether made by supervisors or co-workers,” it continued. Trump and his followers insist he was not being racist when he tweeted Sunday that Democratic Reps. Ayanna Pressley (Mass.), Alexandria Ocasio-Cortez (N.Y.), Ilhan Omar (Minn.) and Rashida Tlaib (Mich.) should “go back and help fix the totally broken and crime infested places from which they came” after the lawmakers, all four American citizens, criticized him.
Trump rally crowd chants 'send her back' about Ilhan Omar - Supporters at President Trump’s campaign rally on Wednesday chanted “send her back” about Rep. Ilhan Omar (D-Minn.) after the president launched into a diatribe against the first-term lawmaker and Somali refugee.Trump tore into Omar early on in his rally in Greenville, N.C., a continuation of his days-long attacks against her and three other progressive minority congresswomen. The crowd raucously booed Omar at the first mention of her name.The president went on to accuse Omar of demeaning U.S. service members and minimizing the Sept. 11, 2001, terrorist attacks.“She looks down with contempt on the hard-working Americans saying that ignorance is pervasive in many parts of this country,” Trump said. The crowd then broke into a chant of “send her back” in reference to Omar, who came to the U.S. as a Somali refugee as child.The president has in recent days targeted Omar and Reps. Alexandria Ocasio-Cortez (D-N.Y.), Rashida Tlaib (D-Mich.) and Ayanna Pressley (D-Mass.), claiming the lawmakers "hate our country" and suggesting they should leave rather than complain about the government.He sparked an uproar on Sunday morning when he tweeted that progressive congresswomen "who originally came from countries whose governments are a complete and total catastrophe" should "go back and help fix the totally broken and crime infested places from which they came." All four are U.S. citizens, and only Omar was born outside the U.S.
Al Green calls for additional security funding for House members after Trump rally - Rep. Al Green (D-Texas) is calling for additional security funding for House members following President Trump’s campaign rally in North Carolina on Wednesday night where he ramped up attacks on four minority congresswomen. Trump used his rally in Greenville, N.C., to escalate his attacks on Democratic Reps. Alexandria Ocasio-Cortez (N.Y.), Rashida Tlaib (Mich.), Ilhan Omar (Minn.) and Ayanna Pressley (Mass.). At one point, the crowd broke into chants of “send her back” when Trump went after Omar, a first-term lawmaker and Somali refugee.“The president now has pushed the envelope to an extreme by taking this beyond his words to the words of other people,” Green, who serves as ranking member on a House Oversight and Investigations subcommittee, told Hill.TV on Thursday. “This is very serious and what was said about someone being hurt is something I take seriously and to this end, I’m announcing to you for the very first time that I will be asking for additional money for security for all members of the House,” he added.Green, who has been an outspoken critic calling for Trump's impeachment, said even though House leadership has security, not all members are afforded the same protection. “We must secure every member of this House because we are headed into uncharted waters and someone can be hurt,” he told Hill.TV.
Green to file articles of impeachment against Trump on Tuesday night - Rep. Al Green (D-Texas) said that he plans to introduce his articles of impeachment against President Trump on Tuesday night and will force a House floor vote on them in the coming days. Green said in a statement that he will read his articles of impeachment "before the close of the business today." A spokeswoman for Green said that he has informed Democratic leaders of his plans. The House is scheduled to vote later Tuesday on a resolution to formally condemn Trump for tweets in which he told four nonwhite, progressive freshman congresswomen — Reps. Alexandria Ocasio-Cortez (D-N.Y.), Ayanna Pressley (D-Mass.), Ilhan Omar (D-Minn.) and Rashida Tlaib (D-Mich.) — to "go back" to their countries. Only Omar, a Somali refugee who is an American citizen, was born outside the U.S. Green said the comments pushed him to force a vote on impeachment, which will be the first since Democrats took over the House majority in January. Green previously forced two procedural votes on his articles of impeachment in December 2017 and January 2018 while Republicans controlled the House. Both efforts drew the support of about 60 Democrats.
Effort to force Trump impeachment vote fails in House of Representatives -- Most Democrats in the House of Representatives joined every Republican to prevent a vote on impeaching President Donald Trump Wednesday. Using a procedural tactic known as a privileged resolution, Rep. Al Green (D-TX) forced the House to take action on articles of impeachment — something Democratic leaders opposed. But the House did not directly vote on whether Trump should be impeached. The vote was instead about whether Green’s impeachment resolution should be set aside (“tabled”), as leaders of both parties wanted. A “yea” vote meant shelving impeachment for now (though not necessarily forever). A “no” vote would have meant keeping Green’s resolution on the House floor and proceeding to an actual vote on impeaching Trump.As expected, though, Republicans and most Democrats came together to vote “yes,” tabling the measure, 332-95. The overall split in the Democratic Party: 137 voted to table and 95 voted against doing so.Green’s move was a response to Trump’s racist tweets from Sunday, when the president wrote that “‘Progressive’ Democrat Congresswomen” who came from “corrupt” countries should “go back” where they came from. The tweet appeared to refer to Reps. Ilhan Omar (D-MN), Rashida Tlaib (D-MI), Alexandria Ocasio-Cortez (D-NY), and Ayanna Pressley (D-MA). But even the dozens of Democrats who have spent months calling for Trump’s impeachment aren’t necessarily on board with Green’s tactics here. Politico’s Kyle Cheney and Andrew Desiderio reported that some of these Democrats feared Green’s “rogue move” would end up flopping and hurting their overall effort to build support. Meanwhile, as Vox’s Ella Nilsen has been tracking, a lot of Democrats are more comfortable calling for an “impeachment inquiry” than straight-up impeachment.
Rand Paul blocks Senate from approving 9/11 victim compensation fund - Sen. Rand Paul (R-Ky.) on Wednesday blocked an attempt by Democrats to pass an extension of the September 11th Victim Compensation Fund. Sen. Kirsten Gillibrand (D-N.Y.) tried to win the Senate's consent to approve the House-passed bill, which would reauthorize funding until fiscal 2090. The bill cleared the House in a 402-12 vote last week. But Paul objected, pointing to the country's growing debt and arguing that any new spending should be offset by cuts to other spending. "It has long been my feeling that we need to address our massive debt in the country," he said. "And therefore any new spending … should be offset by cutting spending that's less valuable. We need to, at the very least, have this debate." He added that if the House bill was brought up for a vote in the Senate he is planning to offer an amendment, "but until then I will object." A spokesperson for Paul later told The Hill that Paul "is not blocking anything," adding that he is "simply seeking to pay for it." "As with any bill, Senator Paul always believes it needs to be paid for. Senator Paul is simply offering an amendment, which other senators support, to pay for this legislation,” the spokesperson said in an emailed statement. Under Senate rules, any one senator can try to get consent, which requires the sign-off of the entire chamber, to pass a bill or resolution, but any one senator can also block that request. Gillibrand, after Paul objected, said she was "deeply disappointed" in his decision, adding, "Enough of the political games." "I am deeply disappointed that my colleague has just objected to the desperately needed and urgent bill for our 9/11 first responders," she added. Despite the back-and-forth on the floor, the Senate is expected to pass the bill before leaving for their summer recess by Aug. 2.
Republicans ready to dive off a cliff on Obamacare - Republicans have no real plan to establish a new health care system if the courts strike down the Affordable Care Act before the 2020 election. But plenty of them are rooting for its demise anyway — even if it means plunging the GOP into a debate that splits the party and leaves them politically vulnerable. After a decade of trying to gut Obamacare, Republicans may finally get their wish thanks to a Trump administration-backed lawsuit. Its success would cause chaos not only in the insurance markets but on Capitol Hill. And Republican senators largely welcome it — even if they don’t know what comes next. “I’m ready for it to succeed,” said Sen. Mike Rounds (R-S.D.). “I would love to get back in and actually deal with health care again.” “Do I hope the lawsuit succeeds? I do,” said Sen. Kevin Cramer (R-N.D.). “What I wish is we had some idea where we are going if it does succeed, as it looks more and more like it might.” Even Republicans not known for taking a hard line are eager for a forcing mechanism to take on Obamacare. “I have a plan that I would be delighted to have Congress pick up and go forward with,” added Sen. Mitt Romney (R-Utah) of a proposal to protect pieces of the law. “Necessity is the mother of acceptance. I hope that we reach that necessity and that would propel my proposal to see a good deal of support.” Both Cramer and Romney said GOP discussions were picking up about how to step in if the law falls after a U.S. appeals court indicated last week it could kill all or part of the law, though the Supreme Court would have the final say. Democrats and Republicans are also working on a modest package of bills intended to lower health care costs.
"Can't Change a Corrupt System by Taking Its Money": Sanders Urges All 2020 Democrats to Reject Insurance, Big Pharma Cash - Arguing that fundamental changes to America's profit-driven and deadly healthcare system will be impossible to enact as long as political leaders continue to accept industry cash, Sen. Bernie Sanders on Wednesday will deliver a Medicare for All speech calling on 2020 Democratic presidential candidates to join him in rejecting campaign donations from insurance and pharmaceutical lobbyists, executives, and PACs. "You can't change a corrupt system by taking its money," Sanders will say in the address, according to an excerpt released by his campaign. "If we are going to break the stranglehold of corporate interests over the healthcare needs of the American people, we have got to confront a Washington culture that has let this go on for far too long."In his speech, Sanders will introduce and take the "No Health Insurance and Pharma Money Pledge," which states: "I pledge to not take contributions from the health insurance or pharmaceutical industry and instead prioritize the health of the American people over health industry profits.""Taking the pledge means that a politician or candidate's campaign will adopt a policy to not knowingly accept any contributions over $200 from the PACs, lobbyists, or executives of health insurance or pharmaceutical companies," according to Sanders's website. "The pledge does not apply to rank-and-file workers employed by pharmaceutical giants and health insurance companies."
As Trump claims credit for decline in opioid deaths, others see signs of danger ahead — Ahead of a 2020 race already focused on health care, President Trump is boasting that his administration played a huge role in achieving the first annual drop in overdose deaths in three decades. The drop, he crowed recently, is “tremendous.”But behind the scenes, his administration’s efforts to address the opioid crisis are increasingly contentious. Two federal agencies are feuding over how to classify certain drugs too dangerous for public consumption. And in the two-plus years since his inauguration, his White House has yet to nominate a leader for the Drug Enforcement Administration.Public health experts caution that not only is Trump claiming victory too early — his sometimes-chaotic approach might actually be setting back public health efforts to rein in a broader drug crisis that currently claims 70,000 lives per year. “They’re going to make the political argument that they’re winning,” said Regina LaBelle, the former chief of staff for the Office of National Drug Control Policy during the Obama administration. “Which they can say, since deaths are down. But I get concerned that we’re going to take our eye off the ball on the broader issue of addiction.” Trump’s triumphant declaration he had succeeded in helping to lower the overdose death rate came a month ago, at an event touting the administration’s drug policy victories and the White House’s success in pushing major addiction legislation through Congress last year.There’s a compelling sway to Trump’s political argument. The hard-hit states Trump advisers like Kellyanne Conway point to as beacons of progress last month in the Roosevelt Room of the White House include many critical to his reelection hopes: Pennsylvania, Ohio, Florida, and Iowa. The braggadocio will set him up, too, to take on the slew of Democrats challenging the president in 2020, nearly all of whom have already unveiled ambitious plans to improve addiction and mental health care.
House orders Pentagon to say if it weaponized ticks and released them -The House quietly voted last week to require the Pentagon inspector general to tell Congress whether the department experimented with weaponizing disease-carrying insects and whether they were released into the public realm — either accidentally or on purpose.The unusual proposal took the form of an amendment that was adopted byvoice vote July 11 during House debate on the fiscal 2020 defense authorization bill, which lawmakers passed the following day. The amendment, by New Jersey Republican Christopher H. Smith, says the inspector general “shall conduct a review of whether the Department of Defense experimented with ticks and other insects regarding use as a biological weapon between the years of 1950 and 1975.”If the answer is yes, then the IG must provide the House and Senate Armed Services committees with a report on the experiments’ scope and “whether any ticks or insects used in such experiments were released outside of any laboratory by accident or experiment design.” The amendment is an attempt to confirm or deny reports that Pentagon researchers — at places such as Fort Detrick in Maryland and Plum Island in New York — implanted diseases into insects to learn about the effects of biological weapons and also looked into using such insects to disseminate biological agents.President Richard Nixon banned U.S. government research into biological weapons in 1969, but research into protecting U.S. military personnel from such agents may have continued, Smith said in an interview Monday.
'Progressive' Dems Threaten To Kill Minimum Wage Bill To Spite Moderates - If you have been tempted to dismiss the growing progressive insurgency within the Democratic caucus as a mirage produced by a handful of outspoken voices - as Nancy Pelosi has suggested - well, think again. In what appears to be one of the most deliberate examples yet of the Democrats progressive caucus sabotaging the party's own agenda because it didn't get exactly what it wanted, the Hill reports that some House Dems are prepared to scuttle a bill to raise the national minimum wage to $15 an hour if a procedural motion from the Republicans is added to the bill. It's meant to be a gesture to moderate Democrats who have sometimes voted with Republicans on procedural issues: The progressives are in no mood to compromise. Reps. Pramila Jayapal and Mark Pocan, the co-chairs of the House Progressive Caucus, issued a statement accusing the Republicans of supporting a "disingenuous" motion that would amount to a "poison pill". "We have no doubt that Congressional Republicans will try to divide the Democratic Caucus with a disingenuous Motion to Recommit. It’s up to all of us to stand unified and reject their bad faith effort to undermine this bill," Pocan and Jayapal said in a statement. "After consulting with our Members this week, we are confident that any bill that includes a poison pill Republican Motion to Recommit will lack the votes to pass on the House Floor." According to the Huffington Post, a vote on the minimum wage is slated for Thursday. However, even if progressives don't kill it, the bill will face an almost certain death in the Senate. The federal minimum wage is currently $7.25 an hour, and it hasn't been raised since 2009. It's the effective minimum wage in 19 states.
House passes bill to hike the federal minimum wage to $15 per hour The House passed a bill Thursday to hike the federal minimum wage to $15 per hour in a win for liberal activists who have long pushed to give low-wage workers a raise. The Democratic-held chamber passed the plan in a 231-199 vote. Six Democrats opposed it, while three Republicans supported it. The measure would gradually hike the U.S. pay floor to $15 by 2025, then index further hikes to median wage growth. It would also phase out lower minimum wage paid to tipped workers. House Democrats view the legislation as a core piece of their agenda to boost pay and economic growth. As President Donald Trump runs for reelection in 2020, the party argues strong economic growth and a roaring stock market have not done enough to lift the workers who most need relief. Congress last raised the federal minimum wage to $7.25 per hour about a decade ago. Now, 29 states and Washington, D.C., have higher pay floors than the U.S., while seven states have approved $15 per hour minimum wages. Those increases have boosted pay for the working class despite the federal inaction. The bill has little chance of becoming law before next November’s election. Senate Majority Leader Mitch McConnell has no plans to bring the legislation up in his chamber. On Thursday, he told Fox Business Network that it would “depress the economy at a time of economic boom,” adding, “we’re not going to be doing that in the Senate.” The White House also warned this week that Trump would veto the measure if it came to his desk. The Trump administration argued its policies are “driving economic growth and increasing workers’ take-home pay far more effectively and efficiently” than the Democratic plan. The White House contended it would “eliminate jobs and reduce total wages for American workers.”
Why “Incremental Change” Is Worse Than No Change At All - Caitlin Johnstone -- Another reason why the so-called “centrists” pose such a grave threat to our world is because their platform of slow, moderate, incremental change is actually worse than no change at all. President Obama was elected on the platform of hope and change. He promised big, sweeping changes, and, at the end of eight years, had continued and expanded all the most depraved foreign and domestic policies of his predecessor while killing the push for universal healthcare and creating a climate initiative which was the equivalent of a band-aid on a sucking chest wound. He now defends his near-complete lack of progress by claiming that compromising with the plutocrats and achieving a small amount of change is better than not compromising and achieving no change at all. We see this trend continuing under the current Democratic leadership, with the House Speaker continually working to passive aggressively undermine the center-left progressive wing of her party while simultaneously calling for party unity. We see it also in the current administration, which, despite all the fuss about Trump’s destroying “norms” and challenging the establishment, has actually managed to preserve and bolster status quo power structures in every way that matters. Voters are aggressively discouraged from voting for third parties, assured that there is no need to do this because the mainstream party will provide the changes you seek, and then no changes happen. Ever. This happens over and over and over again. This pattern is not an accident. I say that “incremental change” is worse than no change at all because it is deliberately designed to kill all push for change while effectively delivering no change whatsoever. If mainstream political parties were honest about having no real interest in taking power away from the plutocratic class which is exploiting us all and driving us toward extinction, people would immediately stop supporting them. Keeping change on the menu without ever actually serving it keeps people coming back to the table again and again, knowing that they’re starving to death but trusting that nourishment will eventually appear.
Ajit Pai’s New Gift To Cable Companies Would Kill Local Fees and Rules - Ajit Pai is continuing his multi-year battle against local broadband regulation with a plan that would stop cities and towns from using their authority over cable TV networks to regulate Internet access. Chairman Pai's proposal, scheduled for a vote at the Federal Communications Commission'sAugust 1 meeting, would also limit the fees that municipalities can charge cable companies. Cable industry lobbyists have urged the FCC to stop cities and towns from assessing fees on the revenue cable companies make from broadband. If approved, Pai's proposal would "Prohibit LFAs [local franchising authorities] from using their video franchising authority to regulate most non-cable services, including broadband Internet service, offered over cable systems by incumbent cable operators." Pai's proposal complains that "some states and localities are purporting to assert authority" to collect fees and impose requirements that aren't explicitly allowed by Title VI, the cable-regulation section that Congress added to communications law with the Cable Act of 1984. Pai's proposal says: These efforts appear to have followed the decision by the Supreme Court of Oregon inCity of Eugene v. Comcast, which upheld a local franchising authority's imposition of an additional 7% "telecommunications" license fee on the provision of broadband services over a franchised cable system with mixed-use facilities. To address this problem, we now expressly preempt any state or local requirement, whether or not imposed by a franchising authority, that would impose obligations on franchised cable operators beyond what Title VI allows.
Judges Attending FedSoc Are Almost Certainly Committing Ethical Violations, But What Else Is New? --For the purposes of tax status, the Federalist Society presents itself as a nonpartisan educational group. This claim is roughly as plausible as the NCAA’s claim to be a nonprofit organization while simultaneously running March Madness, but it’s the sort of fiction everyone agrees to accept with a wink and nod when it comes to the tax status of lobbying interests.In reality, the Federalist Society is a well-funded political operation designed to advance contemporary right-wing policy goals through the judicial system. And to buy Chick-Fil-A for law students to own the libs. For years, the organization has spearheaded a form of mostly white, mostly male affirmative action by offering access to the upper echelons of legal industry power toany law student willing to troll women, minorities, the poor, the LGBTQ community, or immigrants by granting them fast-tracked status to judicial clerkships with like-minded jurists and, with any luck, an opportunity to convert those clerkships into another generation of judges. A key component of this revolving door was the organization’s ready access to a plethora of friendly judges willing to lend star power to the group’s events. It was always a little unsavory and smacked of a potential ethical violation. Now a new opinion released to little fanfare may actually put some teeth to the problem.Judge James Donohue, a former federal magistrate, highlighted this new ethical opinion in the Washington Post this week: For many years, the Code of Conduct committee ducked the issue of judicial participation in the Federalist Society, in part, it seemed, because many powerful judges… either have been or are associated with the organization. The committee now appears to have drawn a line with its issuance ofadvisory opinion No. 116 expanding the scope of prohibited political activity. The Federalist Society is not mentioned by name, but the opinion is directed to the propriety of participation by judges in programs or membership in groups engaged in public-policy debates.
Kellyanne Conway defies congressional subpoena at Trump’s direction - White House counselor Kellyanne Conway defied a congressional subpoena demanding her testimony Monday on instructions from President Trump, raising the likelihood the House Oversight and Reform Committee will soon vote to hold her in contempt. White House counsel Pat Cipollone notified the committee in a letter Monday that Trump had directed Conway to evade the appearance, arguing that she is immune from mandated congressional testimony about her work in the West Wing. “The long-standing principle of immunity for senior advisers to the President is firmly rooted in the Constitution's separation of powers and protects the core functions of the Presidency,” Cipollone wrote to Oversight and Reform Committee Chairman Elijah Cummings (D-Md.) on Monday. “We are adhering to this well-established precedent in order to ensure that future Presidents can effectively execute the responsibilities of the Office of the President,” Cipollone wrote. The committee convened briefly for the hearing Monday afternoon without Conway. Cummings said he would schedule a business meeting on July 25 to vote to hold Conway in contempt if she does not appear for testimony. “We hope Ms. Conway will reconsider,” Cummings said in opening remarks. “Our goal is to hear from Ms. Conway. If she does not change course, we have no choice but to hold her accountable.” Rep. Jim Jordan (Ohio), the committee’s top Republican, called the hearing “pure politics” and part of an effort “to silence one of the president’s top advisers.” White House press secretary Stephanie Grisham accused Democrats on the committee of waging a “purely political campaign to harass the President and his close advisers.” “Democrats continue to overreach and politicize the Office of Special Counsel — this time, by trying to silence Kellyanne Conway with ill-founded, phony allegations about the Hatch Act,” Grisham said in a statement, asserting that the committee “clearly knows” Conway cannot be compelled for congressional testimony.
New CNN Assange Smear Piece Is Amazingly Dishonest, Even For CNN - Caitlin Johnstone -CNN has published an unbelievably brazen and dishonest smear piece on Julian Assange, easily the most egregious article of its kind since the notoriously bogus Assange-Manafort report by The Guardian last year. It contains none of the “exclusive” documents which it claims substantiate its smears, relying solely on vague unsubstantiated assertions and easily debunked lies to paint the WikiLeaks founder in a negative light. And let’s be clear right off the bat, it is most certainly a smear piece. The article, titled “Exclusive: Security reports reveal how Assange turned an embassy into a command post for election meddling”, admits that it exists for the sole purpose of tarnishing Assange’s reputation when it reports, with no evidence whatsoever, that while at the Ecuadorian embassy Assange once “smeared feces on the walls out of anger.” Not “reportedly”. Not “the Ecuadorian government claims.” CNN reported it as a fact, as an event that is known to have happened. This is journalistic malpractice, and it isn’t an accident. Whenever you see them citing this claim as a concrete, verified fact, you are witnessing an especially aggressive and deliberate psyop. The Ecuadorian embassy was easily the most-surveilled building in the world during Assange’s stay there, and the Ecuadorian government has leaked photos of Assange’s living quarters to the media in an attempt to paint him as a messy houseguest in need of eviction, so if the “feces on the walls” event had ever transpired you would have seen photos of it, whether you wanted to or not. It never happened. “New documents obtained exclusively by CNN reveal that WikiLeaks founder Julian Assange received in-person deliveries, potentially of hacked materials related to the 2016 US election, during a series of suspicious meetings at the Ecuadorian Embassy in London,” the article begins. In its very first sentence the article invalidates all the claims which follow it, because its use of the word “potentially” means that none of the documents CNN purports to have contain any actual evidence. It’s worth noting at this time that there is to this day not one shred of publicly available evidence that any of the Democratic Party emails published by WikiLeaks in 2016 were in fact “hacked” at all, and could very well have been the result of a leak as asserted by former British ambassador Craig Murray, who claims to have inside knowledge on the matter. The glaring plot holes in the Mueller report’s assertions about Russia being the source of the 2016 WikiLeaks drops have already been ripped wide open by journalist Aaron Maté’s meticulous analysis of the report’s timeline in an article accurately titled “CrowdStrikeOut: Mueller’s Own Report Undercuts Its Core Russia-Meddling Claims”. The CNN smear piece, which claims to “add a new dimension to the Mueller report”, is entirely relying on this porous timeline for its reporting. Plot holes include the fact that Mueller claims (and CNN repeats) that the Russians transferred the emails to WikiLeaks on or around July 14, which Maté notes is “a full month after Assange publicly announced that he had them.”CNN kicks off its smear piece with the inflammatory claim that “Assange met with Russians and world-class hackers at critical moments”, mentioning both “Russians” and “hackers” in the same breath in an attempt to give the impression that the two are related. It’s not until paragraph 43 and 46, long after most people have stopped reading, that the articles authors bother to inform their readers that the “hackers” in question are German and have no established connection to the Russian government whatsoever.
Mueller, Dems Scramble as Russiagate Falls Apart -- Friday’s surprising report that Robert Mueller had successfully sought an extra week to prepare for his House testimony on Russiagate (now set for July 24) must have come as scary news to those of his fans who can put two and two together. Over the past few weeks, it has become clearer that each of the two frayed findings of Russian interference in the 2016 U.S. presidential election has now come apart at the seams. Saturday’s New York Times reports that “the Democrats said they chose to delay at the request of Mr. Mueller” after a day of negotiations, “as both Democrats and Republicans were deep in preparations for his testimony” earlier scheduled for July 17. The Washington Post, on the other hand, chose not to say who asked for the delay. Rather, it explained the abrupt change in timing with a misleading article entitled, “Mueller, House panels strike deal to delay hearing until July 24, giving lawmakers more time to question him.” As the truth seeps out, there will be plenty of crow to go around. To avoid eating it, the Democrats on the House Judiciary and Intelligence Committees, the stenographers who pass for journalists at the Times andPost, and the “Mueller team” will need all the time they can muster to come up with imaginative responses to two recent bombshell revelations from the United States District Court for the District of Columbia.Perhaps the most damning of the two came last Monday, when it was disclosed that, on July 1, Judge Dabney Friedrich ordered Mueller to stop pretending he had proof that the Russian government was behind the Internet Research Agency’s supposed attempt to interfere via social media in the 2016 election. While the corporate media so far has largely ignored Judge Friedrich’s order, it may well have been enough to cause very cold feet for those attached to the strained Facebook fable. (The IRA social-media “interference” has always been ludicrous on its face, as journalist Gareth Porter established.) Ten days is not a lot of time to conjure up ways to confront and explain Judge Friedrich’s injection of some unwelcome reality. Since the Democrats, the media, and Mueller himself all have strong incentive to “make the worst case appear the better” (one of the twin charges against Socrates), they need time to regroup and circle the wagons. The more so, since Mueller’s other twin charge – Russian hacking of the DNC – also has been shown, in a separate Court case, to be bereft of credible evidence.
Mueller witness George Nader charged with transporting 14-year-old boy for sex, child porn - George Nader, a key witness in special counsel Robert Mueller’s probe, has been charged in a new federal indictment with transporting a 14-year-old boy for sex two decades ago, child pornography and carrying obscene materials into the United States.The new charges against Nader, a 60-year-old Middle East power broker, were revealed Friday in U.S. District Court for the Eastern District of Virginia.Nader — who has been an advisor to Crown Prince Mohammed bin Zayed Al-Nahyan of the United Arab Emirates — already was being held in jail without bail after his arrest at a New York City airport in early June on a charge of transporting child pornography.The charge used to arrest Nader at that time was based on an allegation his iPhone contained images of minors engaged in sexually explicit conduct when he flew into Washington Dulles International Airport in January 2018.That same allegation is contained in the new indictment charging him with transportation of visual depictions of minors, as well as another count accusing him of importation or transportation of obscene materials.The third count accuses Nader of knowingly transporting a 14-year-old boy from Europe to Washington Dulles Airport in February 2000 and then allegedly engaging in sexual acts with that child after taking him to Nader’s home in Washington.The boy was from the Czech Republic, a prosecutor reportedly said at Nader’s arraignment on Friday. The Washington Post reported Friday that in 2003 “Nader was convicted in the Czech Republic of what his attorney Christopher Clark described in court as ‘contributing to the moral corruption of society’ after ‘having a relationship with two young men two years under the age of consent.’ ”The Associated Press said he was sentenced to one year in prison in that earlier case. Nader pleaded not guilty to the charges during his arraignement in federal court in Alexandria, Virginia, where a judge refused to grant him bail, noting, “the nature of the charges and [his] extensive overseas connections,” The Post reported.
Case against Jeffrey Epstein ‘getting stronger,’ prosecutors say as judge delays bail decision - A federal prosecutor on Monday said the evidence against accused child sex trafficker Jeffrey Epstein is “already significantly stronger and getting stronger every single day” since his arrest last week.Alex Rossmiller, the prosecutor, at a detention hearing in Manhattan federal court told a judge that multiple witnesses have contacted authorities since Epstein was arrested, and that prosecutors are trying to corroborate their allegation.And Rossmiller also said that federal investigators had found in Epstein’s Manhattan townhouse a locked safe containing cash, diamongs and an expired passport from another country that has Epstein’s photograph on it, bit with a different name and a stated residence of Saudi Arabia.At that same hearing, which was attended by some of Epstein’s accusers, Judge Richard Berman said he would not rule on Epstein’s bail request on Monday, but instead would decide the issue on Thursday. Until then, at least, Epstein will continue being held at a downtown Manhattan jail.Rossmiller, arguing that Epstein should be denied bail, said his “dangerousness” to the public included his prior efforts at “witness tampering.” He said that in addition to prosecutors, the federal office of pre-trial services believes Epstein should be detained without bail.The prosecutor said that he and his colleaguees recently learned of Epstein paying $350,000 to two possible co-conpirators.Prosecutors have also called Epstein a serious flight risk, given his significant wealth.In a court filing last Friday, they said that Epstein i s worth at least $500 million. Rossmiller said Monday that Epstein had a single account that contained more than $100 million.
Epstein Safe Had Expired Passport Claiming Saudi Residency and “Piles of Cash” — FBI agents who cracked open a safe in Jeffrey Epstein’s Manhattan mansion discovered “piles of cash,” dozens of diamonds and an expired passport from the 1980s that listed his residence as Saudi Arabia, according to the Daily Beast – which notes that it is unclear whether this is the same safe that contained nude or semi-nude photographs believed to be of underage girls. It’s also a different safe than the one allegedly in an ‘off-limits’ room on his private island in the Caribbean. Federal prosecutors revealed the findings during a Monday bail hearing, for which US District Judge Richard Berman said he would announce a ruling on Thursday. Some of Epstein’s accusers were present during the courtroom session to oppose his request for release on house arrest pending trial for sex-trafficking underage girls. Both federal prosecutors and a federal probation office have recommended against letting Epstein out on bail, suggesting that he is a flight risk who should remain detained. Monday’s hearing follows a flurry of filings in which Epstein’s defense team and federal prosecutors dueled over whether the filthy-rich money manager would go on the lam if he was released.The government argued that Epstein’s international connections and wealth—estimated at more than $500 million in a court document—meant it would be easy for him to get beyond the arm of the law. Even if he didn’t turn fugitive, prosecutors argued, Epstein has a history of witness-tampering, including wiring $350,000 late last year to two alleged accomplices after the Miami Herald published its expose on his Florida plea deal. –Daily Beast
Fresh out of jail, Jeffrey Epstein was welcomed by the rich and powerful - — A strange thing happened when Jeffrey Epstein came back to New York City after being branded a sex offender: His reputation appeared to rise. In 2010, the year after he got out of a Florida prison, Katie Couric and George Stephanopoulos dined at his Manhattan mansion with a British royal. The next year, Epstein was photographed at a “billionaire’s dinner” attended by tech titans like Jeff Bezos and Elon Musk. A page popped up on Harvard University’s website lauding his accomplishments, and superlative-filled news releases described his lofty ambitions as he dedicated $10 million to charitable causes. Powerful female friends served as social guarantors: Peggy Siegal, a gatekeeper for A-list events, included him in movie screenings, and Dr. Eva Andersson-Dubin, a champion of women’s health, maintained a friendship that some felt gave him credibility. Epstein put up a website showing Stephen Hawking and other luminaries at a science gathering he had organized. “If you looked up Jeffrey Epstein online in 2012, you would see what we all saw,” Leon Botstein, president of Bard College, said in an interview. He seemed “like an ex-con who had done well on Wall Street,” who was close to the Clintons and gave money to academic pursuits, Botstein said. That was why, he noted, Bard accepted an unsolicited $50,000 in 2011 for its high schools, followed later that year and in 2012 by another $75,000 in donations. More than a decade ago, when Epstein was very publicly accused of sexually abusing girls as young as 14, he minimized the legal consequences with high-powered lawyers, monetary settlements that silenced complaints, and a plea deal that short-circuited an FBI investigation and led to the resignation announcement Friday of a Trump Cabinet official who had overseen the case as a prosecutor. Socially, Epstein carried out a parallel effort, trying to preserve his reputation as a financier, philanthropist and thinker. Some of the respect Epstein, 66, drew on was manufactured, the accomplishments recycled. The gathering with Hawking had taken place back in 2006. The positive online notices appeared to have been paid for by Epstein: A writer employed by his foundation churned out the news releases, and the supposed author of a Forbes story calling Epstein “one of the largest backers of cutting edge science” conceded in an interview that he was given $600 to post the pre-written article under his own name.
A Plausible Theory Of What Jeffrey Epstein Was Actually Doing - A question that no one could so far answer is how Epstein got as rich as he appears to be. A person who calls himself Quantian has an interesting theory of what Epstein was actually doing. Here is the short version: Epstein offered the post puberty teenyboppers he seduced and/or bribed to the rich people he knew. He invited lots of interesting people - artists, scientists, politicians, rich businessman - to his exclusive parties. There were always these young girls around. There was always a free bedroom. There were also cameras in place. When one of the rich guys messed with a girl Epstein would blackmail him. But instead of taking cash he asked them for investments in his offshore hedge fund. For someone who owns billions it is peanuts to put a few dozen millions into a fund. It is legal. The money isn't gone. It will even bear interests. Epstein is not known for having done much currency trades or other larger Wall Street transactions. His company is small, he didn't work a lot. It is likely he mostly re-invested the money in a simple index stock fund which follows the S&P 500. Those type of funds brought over the years quite a good profit. Epstein would have taken the typical hedge fund fee of 2/20 which is 2% of the investment per year plus 20% of the profits. The hedge fund would be completely legal and there would be no tax troubles. The entrapped people would simply have to stay invested to keep Epstein quiet and the video tapes off the broadsheet market. Some billionaires might have invested upfront to gain access to the girls. For Epstein the scheme would have been a very elegant way to pursue his personal 'hobby' while creating an ever growing income.
Meet the Madam: Epstein Arrest Casts Spotlight on Ghislaine Maxwell — Following the arrest of pedophile financier Jeffrey Epstein last Saturday, many outlets have turned their attention to his longtime confiante, socialite heiress Ghislaine Maxwell – who has been accused by three women of procuring and training young girls to perform massage and sexual acts on the 66-year-old registered sex offender and his associates. Maxwell, 57, comes from money. Her father was publisher Robert Maxwell – who himself faced accusations of being a Mossad double (and possibly triple) agent and a “bad character” who was “almost certainly financed by Russia,” according to the British Foreign Office. It is unknown exactly how Epstein and Ghislaine Maxwell met – however they reportedly dated around 1992, shortly after her father’s death. After breaking up, they remained good friends. In 1995, Epstein renamed a now-defunct Palm Beach company “Ghislaine Corp,” which was dissolved in 1998 per the Wall Street Journal. In 2003, Epstein described Maxwell as his “best friend,” who was not on his payroll – yet “seems to organize much of his life.” The Oxford-educated Maxwell, described by many as a man-eater (she flies her own helicopter and was recently seen dining with [Bill]Clinton at Nello’s on Madison Avenue), lives in her own townhouse a few blocks away. Epstein is frequently seen around town with a bevy of comely young women but there has been no boldfaced name to replace Maxwell. Maxwell was accused by allgeged Epstein victim Virginia Giuffre of recruiting the then-15-year-old into sexual slavery while she was working at a towel girl at President Trump’s Mar-a-Lago club. Giuffre asserts in her complaint that Maxwell, the sole defendant in the suit and the daughter of late publishing magnate Robert Maxwell, routinely recruited underaged girls for Epstein and was doing so when she approached the $9-an-hour locker room attendant at Mar-a-Lago in 1999 about giving massages to the wealthy investment banker. Giuffre alleges that Maxwell ultimately trained her in how to give “massages” to Epstein that involved sex acts and, essentially, prostitution. When Maxwell publicly denied the allegations and called Giuffre a liar in 2015, that gave her the opening to head to federal court and file the defamation suit now headed for trial. –Politico According to court filings, Maxwell was said to have hired, supervised and fired household staff, while directing the visits of dozens of “massage therapists” to Epstein’s residence, according to the Journal. In depositions taken in 2009 and 2010 as part of civil lawsuits against Mr. Epstein, household employees said Ms. Maxwell was a central figure in Mr. Epstein’s private life. Several said Ms. Maxwell hired, supervised, and fired household staff, while directing the visits of dozens of “massage therapists”—typically young women. 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. –WSJ
Inside the Victoria’s Secret pipeline to Jeffrey Epstein -- In 2004, Elisabetta Tai was a 21-year-old Italian model with big dreams. A month after arriving in Manhattan, her booker gave her an Upper East Side address and told her he had set up a meeting with the man who would be able to get her a gig modeling for the Victoria’s Secret catalog. “He told me this is one of the most important people in modeling,” Tai told The Post. “He said that this man is in charge of Victoria’s Secret and he’s going to change your life.” Jeffrey Epstein did end up changing Tai’s life — but not in the way she expected, she said. Epstein, a financier, was close friends with Ohio billionaire Leslie Wexner, who owned Limited Brands — now L Brands — the parent company of Victoria’s Secret. Wexner was so close to Epstein that both men shared ownership of the sprawling East 71st Street mansion where Tai went for the meeting. The deed was transferred in 2011 to Epstein’s Virgin Islands LLC. The woman with the short hair introduced Tai to Epstein, who was dressed casually in a shirt and jeans, she said. As Epstein started to ask her questions about her background, she noticed a massage table near his desk. She said she didn’t think anything of it, and reached for her portfolio to show Epstein her previous modeling work in Italy. As Tai talked about her experience in halting English, she said Epstein moved to the massage table and began to remove his clothes. He then handed her a vibrator, she said.“I froze,” she said. “I didn’t know what to do. “I just grabbed the vibrator and threw it at his head,” she said. Epstein, who was an investor in a Manhattan modeling venture, has been accused by prosecutors of using his connections to the modeling company to “audition” girls to give him massages that often ended up in sexual abuse. “Over the years, it seems Epstein relied on … [the] modeling business to source underage girls for sex,” writes Conchita Sarnoff, an investigative reporter, in her book “Trafficking.” A former Manhattan-based model agent, who spoke on the condition of anonymity, also alleged an Epstein-Victoria’s Secret pimp pipeline. “He [Epstein] portrayed himself as the back door to get a girl into Victoria’s Secret. Some of those girls got in,” he said.nHe promised the catalog and ad-campaign jobs, not the supermodel fashion-show gigs, he added. “It was still significant cash for a young model doing the catalog,” said the agent. “They weren’t making hundreds of thousands but they could make about $5,000 a week modeling for the campaigns or the catalog. Not all the girls sent to him got jobs, but a lot of them did.”
A Video Shows Trump And Jeffrey Epstein Laughing And Discussing Women's Looks At A 1992 Mar-A-Lago Party - President Donald Trump — who has recently asserted that he is not a "big fan" of accused sex trafficker Jeffrey Epstein — is seen chatting and laughing with the wealthy financier at a 1992 party at the Mar-a-Lago resort in Florida, according to footage uncovered in the NBC archives Wednesday. The tape appears to show Trump and Epstein discussing women's appearances at the party, which was held at what Trump now calls his "Winter White House." The footage was shot for a piece on Trump's newly divorced lifestyle on Faith Daniels' talk show, A Closer Look. In the video, Trump is seen dancing closely with women, many of whom were cheerleaders for the Buffalo Bills. Trump can also be seen, according to NBC News, pointing in the direction of women dancing and telling Epstein, "She's hot." Epstein, 66, who has long been associated with rich and powerful people including Trump and Bill Clinton, was charged earlier this month with running a sex trafficking operation and sexually abusing dozens of underage girls, some as young as 14, in his New York and Florida homes between 2002 and 2005. The federal charges against Epstein come more than 10 years after a previous investigation in Florida ended in a lenient plea deal. The prosecutor at the time was Alexander Acosta, Trump's secretary of labor who resigned last week amid scrutiny over how he handled Epstein's case. While Trump and Epstein have socialized in the past, the president downplayed their friendship after the disgraced financier was charged in New York. "I knew him like everybody in Palm Beach knew him," Trump told reporters earlier this month. "He was a fixture in Palm Beach. I don't think I have spoken to him in 15 years."
Judge denies Jeffrey Epstein bail in child sex trafficking case, citing ‘danger’ to public - A federal judge on Thursday denied bail to wealthy investor Jeffrey Epstein, citing the potential danger he poses to the public and the risk Epstein will flee to avoid prosecution for child sex trafficking charges. The decision by Judge Richard Berman means that the 66-year-old Epstein will remain in jail pending trial in the case, where he faces up to 45 years in prison if convicted. “I doubt any bail package could overcome dangerousness .... to community,” Berman said during a hearing in U.S. District Court in Manhattan, agreeing with the recommendation by prosecutors to keep Epstein locked up. Berman said that risk was “the heart of this decision” to deny the financier release on bond. He noted that two women who claim they were abused by Epstein gave “compelling testimony” at a court hearing Monday, where they had expressed “fear for their safety.” The judge also called Epstein’s proposal for bail “irretrievably inadequate.” Epstein, a former friend of Presidents Donald Trump and Bill Clinton, had asked Berman to release him on a bond as high as $100 million or more. Epstein had also suggested strict bail conditions, which could include requiring him to remain in his New York City mansion, round-the-clock security monitoring and an electronic tracking device. But Berman said that prosecutors had established that Epstein could be dangerous by “clear and convincing evidence,” and had shown by a “preponderance” of evidence that he could flee. The judge noted Epstein’s “great wealth and his vast resources,” which include private planes and a residence in Paris. And Berman said Epstein’s possession of a passport issued by Austria worried him. That expired passport has Epstein’s photo but a different name on it, as well as a stated residence in Saudi Arabia. It was used in the 1980s for travel, according to prosecutors.
Epstein Lied About Austrian Passport Under Different Name, According to New Filing - An Austrian passport found in Jeffrey Epstein's 21,000 square-foot Manhattan townhome, containing Epstein's photograph but listing a different name, contains customs stamps indicating that he used it to enter at least four countries, - contradicting a defense argument that it was only on hand in the event of a hijacking. In a late Wednesday court filing, US Attorney Geoffrey Berman writes "The defendant's July 16, 2019 letter asserts: "[A]s for the Austrian passport the government trumpets, it expired 32 years ago. And the government offers nothing to suggest -- and certainly no evidence -- that Epstein ever used it." Berman rebuts this claim, writing: "In fact, the passport contains numerous ingress and egress stamps, including stamps that reflect use of the passport to enter France, Spain, the United Kingdom, and Saudi Arabia in the 1980s." "The Government further notes that the defendant’s submission does not address how the defendant obtained the foreign passport and, more concerning, the defendant has still not disclosed to the Court whether he is a citizen or legal permanent resident of a country other than the United States."
Epstein Sexually Abused Girls During Work-Release Jail Sentence; Settled With Accusers For Millions --Jeffrey Epstein sexually abused girls during his 13 month work-release prison sentence during which he was allowed to 'work' out of his West Palm Beach office for up to 12 hours a day, six days a week, according to attorney Brad Edwards, who represents some of Epstein's alleged victims. During a Tuesday press conference in New York City, Edwards introduced a woman named Courtney Wild, who says Epstein began abusing her when she was 14-years-old, according to Business Insider. Edwards said during the press conference that he raised the accusation to challenge the idea that Epstein was a model citizen while in jail. Edwards also said that Epstein was in his office most of the day during his 18-month sentence, of which he served 13 months, and that he had female visitors under the age of 21.Edwards said Epstein had sexual interactions with the female visitors that constituted abuse and were similar in nature to the abuses described in the indictment and charges Epstein faces in court, which are one count of sex trafficking of minors and one count of conspiracy to engage in sex trafficking of minors. -Business InsiderWild appeared in court on Monday during Epstein's bail hearing, saying "I was sexually abused by Jeffrey Epstein starting at the age of 14," while standing just feet from the pedophile money manager. Meanwhile, Bloomberg reveals that Epstein paid millions of dollars to silence accusers - including Wild. Some of Epstein’s civil settlements exceeded $1 million, according to a person with knowledge of the matter. Three were for a total of $5.5 million, court records show. The total amount of Epstein’s civil payments is unknown, but it’s likely a small fraction of the $559 million that prosecutors say Epstein has claimed as his net worth....More than two dozen lawsuits were ultimately resolved in private settlements after Epstein signed a non-prosecution agreement in 2008 that allowed him and four accomplices to avoid federal charges. –Bloomberg Epstein's attorneys also used aggressive tactics with the women, according to the report - interviewing friends, neighbors and employers in abusive ways. The girls were grilled about their lives - including criminal records, drug use, and in one case - a history of abortions.
Jeffrey Epstein’s jail work release in Florida under investigation after sex contact claims - The supervision that Jeffrey Epstein, now accused of child sex trafficking, received from jailers in Florida a decade ago is now the subject of an internal investigation on the heels of claims he had sexual contact with at least one young woman, authorities said Friday.Epstein was allowed out of the Palm Beach County lockup for up to 12 hours a day on work release, six days each week, during his 13-month jail stint there after pleading guilty to prostitution-related charges filed by state prosecutors in 2008. That cushy arrangement had already sparked outrage.So had Epstein being allowed to cut a nonprosecution deal with federal prosecutors in Florida in 2007 that let him off the hook for potentially much more serious federal charges related to sexual misconduct with underage girls.Earlier this week, a lawyer said Epstein, a former friend of Presidents Donald Trump and Bill Clinton, had “improper sexual contact” with at least one woman under the age of 21 in Epstein’s business office in West Palm Beach, Florida, during his work release, as Palm Beach sheriff deputies waited outside.The lawyer, Brad Edwards, represents some of the women who claim they were sexually exploited by the now-66-year-old Epstein as underage girls from 2002 through 2005. Their allegations and ones by other women led federal prosecutors in New York to charge Epstein earlier this month with child sex trafficking crimes.
Tax Filing Suggests Child Sex Offender Jeffrey Epstein Made His Wealth Flipping Hot IPOs on Wall Street - Pam Martens - The public’s right to know how Epstein made his money is essential to understanding just how much he has gotten away with under the nose of the FBI and U.S. Department of Justice and a full listing of just whom his co-conspirators are. Powerful men flew on his private planes, one of which was called the Lolita Express, and stayed at his private mansions. Were they paying him to secure young women for them or getting him access to hot IPOs? The Miami Herald investigative reporter, Julie K. Brown, who may have forced New York prosecutors into revisiting the case against Epstein through her in-depth series of articles in November of last year, stated this recently on television: “We don’t know how much, how deep this went, how far-reaching it went in government, but there have been a lot of names that I could see on these message pads [listing clients] on a regular basis as part of the evidence. These message pads where they would call and leave Epstein messages, such as, ‘I’m at this hotel.’ Why do you do that, unless you’re expecting him to send you a girl to visit you at your hotel? ” Or Epstein may have been like Bernie Madoff, making money through numerous illegal activities, including a Ponzi scheme. (See JPMorgan and Madoff Were Facilitating Nesting Dolls-Style Frauds Within Frauds.) According to an affidavit filed in court by Epstein’s former business partner, Steven Hoffenberg of Towers Financial, Epstein’s early wealth derives from a Ponzi scheme that put Hoffenberg behind bars for 20 years. If Epstein was a hedge fund manager, it was a big secret to other well-known hedge fund managers on Wall Street. Doug Kass, who has his ear very close to the street and has managed money on Wall Street for decades, told New York Magazine last week: “I went to my institutional brokers, to their trading desks and asked if they ever traded with him. Not one institutional trading desk, primary or secondary, had ever traded with Epstein’s firm.” But there is some anecdotal evidence that Epstein may have been trading. In the 2016 nonfiction book, Filthy Rich: A Powerful Billionaire, the Sex Scandal that Undid Him, and All the Justice that Money Can Buy – The Shocking True Story of Jeffrey Epstein,by James Patterson, John Connolly and contributor Tim Malloy, there is a reference to one of the planes then owned by Epstein, a Boeing 727 that the writers say was “customized with its own trading floor.” So we did some digging into one of the few financial documents involving Epstein that are not under seal – a Federal 990 tax filing for his nonprofit called…wait for it…Gratitude America. The last page of that document lists dozens of publicly traded stocks that were held in the portfolio, the majority of which were bought and sold on the same day. In the lingo of Wall Street, that’s called “day trading,” and it is virtually unheard of in an investment portfolio for a taxpayer-subsidized nonprofit charity…
Jeffrey Epstein’s Curiously Nimble Trading in LinkedIn Stock Raises Red Flags - Pam Martens --Is Jeffrey Epstein, the accused sex trafficker and sexual assaulter of dozens of underage girls potentially guilty of financial crimes as well? His criminal profile suggests that may well be worth investigating. The criminal profile that emerges for Jeffrey Epstein is that of a man so arrogant and confident of his genius that he felt he could beat anybody – by hook or by crook, or by hiring ruthless lawyers to intimidate and compromise Federal prosecutors. Armed with an aptitude for physics and math, Epstein became a math teacher at the exclusive Dalton School in Manhattan – despite the fact that he lacked a college degree. He traded up from that position to work for Wall Street investment bank Bear Stearns, which blew itself up in the early days of the financial crash of 2008. Epstein’s exit from Bear Stearns coincided with an SEC investigation of the firm, the details of which remain murky. No charges were brought. Epstein moved on to collect $25,000 a month from Towers Financial, whose CEO Steven Hoffenberg went to prison for 20 years for turning the company into a $450 million Ponzi scheme. Hoffenberg has alleged in an affidavit filed in a previous court case that Epstein was a major participant in the Ponzi scheme. But other than billionaire Les Wexner, founder of The Limited retail clothing chain and the parent company of Victoria’s Secret, it’s unclear if Epstein actually managed money for other people in a hedge fund. What is clear is that Epstein, unlike Bernie Madoff, actually did know how to make money trading stocks – especially when he was gifted with hot Initial Public Offerings (IPOs), something that the average American rarely has access to at a Wall Street brokerage firm.The question for Federal investigators is what did Epstein do to obtain these hot IPOs. Since he is charged with sex trafficking of minors, the obvious question is was he providing young girls to get in on these highly sought-after deals on Wall Street. . (See our reporting yesterday: Tax Filing Suggests Child Sex Offender Jeffrey Epstein Made His Wealth Flipping Hot IPOs on Wall Street.) Now another potential red flag has emerged in the curious timing of the purchase and sale that Epstein made in the shares of LinkedIn stock, which had a surprise offer from Microsoft to buyout the company for $196 a share, in cash, before the market opened on Monday, June 13, 2016. Any brazen Wall Street insider trader who knew about this deal ahead of time would not only have purchased shares of LinkedIn but might have also bought put options on Microsoft, betting its share price would decline, which it did, on the announcement.
Banks Again Hoist on Their Cost-Cutting Petard: Burgeoning Credit Card Fraud - Yves Smith - it’s hard to miss the regular stories about data, including sometimes financial account details, being hacked. But in addition to that, credit card companies also face ongoing attacks from fraudsters who obtain credit card information and put through bogus charges. You’d think the banks that participate in the Visa and Mastercard networks would be vigilant about this issue. After all, the customer is liable only for $50 of loss even if his credit card goes missing. In my experience of actually having had my wallet stolen and having big charges run up with impressive speed, the banks don’t even hit customers with that allowed $50. On top of that, the merchant charges on credit cards are hefty, which you’d think would give them more than enough in the way of funding to create decent protections. Think again. Banks fetishize cost reduction as a way to increase profits, and they do it with particular zeal via headcount cuts of low-level employees, such as in customer-facing activities like call centers. There are regular examples of how they overdo it, such as cutting so many branches after a merger that they lose customers, forcing them to go back and reopen some. Banks executives, if anything more so than their peers in the rest of Corporate America, also have enormous faith in technology as a magic bullet. Yet as our many readers who have done time in bank IT will tell you, operations are treated like an orphan child. One of the key bits of evidence is the industry-wide shoring up of legacy software, which at some point is going to start seizing up even more than it has. The reason banks haven’t migrated off isn’t just the enormity of the task and the virtual impossibility of identifying all the interdependencies of various systems; it’s also that, even if they could find a path through this problem, it would cost them on the order of all their net income for several years. A wee example of these bad tendencies is how banks have been taking the cheap and easy road with credit card fraud to the degree that it is coming back to haunt them. I’ve run into this myself with the two cards I use for pretty much all my card charges, one a personal and one a business card at Citigroup. (anecdotes follow)
Deutsche Bank job cuts are tip of the iceberg for the finance industry - Deutsche Bank caused a recent stir with the seemingly sudden announcement that it would cut 18,000 jobs – one fifth of its global staff. It is part of a reorganisation designed to return the bank to its core business of corporate banking, private banking and asset management. Most of the job losses will be in the global equity traders and investment banking division Deutsche Bank stated in an announcement made on July 7. Some may read the bank’s problems as the result of a bad strategy, bad execution, bad luck, or a combination of these three. I, however, think that the German bank’s problems reflect the profound transformations currently taking place in the financial industry in general, and in investment banking especially. Let me start by saying that the value of the financial industry is not easy to justify in terms of social and economic benefits. It is true that banks perform a useful function of redistributing financial risk, allocating capital and providing credit. But there are too many banks, and what is even worse, there are too many bankers. Looking at the case of Deutsche Bank, between 2009 and 2018 the bank lost US$14.8 billion in market value (including dividends paid to shareholders). This is the total value loss, with some ups and downs. In 2016 the market value of Deutsche Bank dropped by almost US$27 billion, while in 2017 it grew by US$21.5 billion. This means Deutsche Bank destroyed US$15,370 per employee, per year. And, on average, the 100,000 employees of Deutsche Bank were paid more than what they have generated. Hence the logic that firing 18,000 bankers creates value. Corporate bureaucracies in banking, and in particular trading, back office jobs, risk management, human resources, finance are then undesirable for two reasons: they do not create value internally, and they also employ people in companies that do not create social and economic value at all. Add to this another big transformation that is taking place with the use of technology in the corporate world, and especially in the services sector. As technology is replacing jobs (particularly mechanical, but also repetitive and bureaucratic jobs), we are moving into a world of banks without bankers.
Bank Run- Deutsche Bank Clients Are Pulling $1 Billion A Day – Now that questions about the viability of Deutsche Bank are swirling - yes, it won't be insolvent overnight, but like the world's biggest melting ice cube, there is simply no equity value there any more - everyone else has decided to cut their counterparty risk with the bank with the €45 trillion in derivatives, and according to Bloomberg Deutsche Bank clients, mostly hedge funds, have started a "bank run" which has culminated with about $1 billion per day being pulled from the bank.As a result of the modern version of this "bank run", where it's not depositors but counterparties that are pulling their liquid exposure from DB on fears another Lehman-style lock up could freeze their funds indefinitely, Deutsche Bank is considering how to transfer some €150 billion ($168 billion) of balances held in it prime-brokerage unit - along with technology and potentially hundreds of staff - to French banking giant BNP Paribas.One problem, as Bloomberg notes, is that such a forced attempt to change prime-broker counterparties, would be like herding cats, as the clients had already decided they have no intention of sticking with Deutsche Bank, and would certainly prefer to pick their own PB counterparty than be assigned one by the Frankfurt-based bank. Alas, the problem for DB is that with the bank run accelerating, pressure on the bank to complete a deal soon is soaring.Here are the dynamics in a nutshell, (via Bloomberg): Deutsche Bank CEO Christian Sewing is pulling back from catering to risky hedge-fund clients, i.e. running a prime brokerage, as he attempts to radically overhaul the troubled German lender while BNP CEO Jean-Laurent Bonnafe wants to expand in the industry. A deal of this magnitude would be a stark example of the German firm’s retreat from global investment banking while potentially transforming its French rival from a small player in the so-called prime-brokerage industry to one of Europe’s biggest.Of course, publicly telegraphing that DB is in dire liquidity straits and needs an in-kind transfer of its prime brokerage book would spark an outright panic, and so instead the story has been spun far more palatably, i.e., "BNP is providing “continuity of service” to Deutsche Bank’s prime-brokerage and electronic-equity clients as the two companies discuss transferring over technology and staff", according to a July 7 statement. The ultimate goal of the talks is for BNP to take over the vast majority of client balances, which are slightly less than $200 billion currently. There is just one problem: nothing is preventing those clients who would be forcibly moved from a German banking giant to a French banking giant from redeeming their funds. And that's just what they are doing. Or rather, nothing is preventing them from moving their exposure for now, which is why they are suddenly scrambling to do it before they are suddenly gated.
Everything’s Fine Until Suddenly it Isn’t: How a “Leveraged Loan” Blows Up - Golden Gate Capital – the private equity firm now infamous for asset-stripping its portfolio company Payless ShoeSource into bankruptcy and liquidation – strikes again with another of its portfolio companies, Clover Technologies, whose $693-million leveraged loan has suddenly gone to heck.Slices of that leveraged loan are traded like securities. But because leveraged loans are loans, not securities, the SEC doesn’t regulate them. No one regulates them, though the Fed wrings its hands about them periodically. And there are $1.3 trillion of them.The market for them is very illiquid, even during good times, and before Clover disclosed some issues on July 9, the loan still traded at 97 cents on the dollar, according to Bloomberg. This was the day investors, such as leveraged loan mutual funds and institutional investors that held these slices, suddenly woke up with the foul odor of debt restructuring and bankruptcy in the air. Within just a few days, the price of the loan plunged 35% to 62.625 cents on the dollar.The loan was “covenant-lite,” giving fewer protections to investors and allowing the company and its owners to get away with all kinds of things. This included the absence of certain disclosure requirements.Not that we feel sorry for investors that suddenly got whacked: They knew that leverage loans are risky, that they’re issued by junk-rated over-leveraged companies with iffy cash-flows, often to fund their own leveraged buyout by a PE firm, and to fund special dividends back to the PE firm. Both factors apply to Clover’s leveraged loan. Investors don’t care. They’re chasing yield no matter what the risks, in a world where yield has been repressed by central-bank policies. These slices are not liquid and they take a long time to trade, and trading is thin even in good times. But when investors want to unload, there are suddenly no buyers and the price just collapses (chart via Bloomberg, click to enlarge):
Regulators need more tools to keep system safe: Boston Fed chief — Eric Rosengren, who heads the Federal Reserve Bank of Boston, has gone on record as praising the advantages of central banks having a clear view inside financial services firms. "That can only occur when you actually have supervisors from the central bank that are actively engaged in the largest banks, which is the case in the United States,” Rosengren said in a recent interview on the sidelines of a stress test conference hosted by the Boston Fed. But Rosengren, who took the reins of the bank in 2007 just before the financial crisis, says U.S. regulators' knowledge of firms' inner workings could run deeper. While the United States has some regulatory advantages over other countries, Rosengren says the Fed’s macroprudential toolkit lacks some of the authorities that other countries entrust to their regulators — particularly the extension of prudential authorities beyond the banking sector. “We don't have all the macroprudential tools that we might need in the future,” Rosengren said. “Ideally, financial stability is worried about risks wherever they are in the financial system, not just at the largest banks. So the coverage in the United States is quite limited.” What follows is a transcript of the interview, which has been edited for length. Q: How would you assess the Fed’s stress testing program compared to stress testing programs elsewhere? ROSENGREN: The stress test in the United States, I think, is the gold standard relative to most international stress tests. We had an advantage that, during the financial crisis, we took the stress test quite seriously. We also had the advantage, even though it was politically unpopular, to have the [Troubled Asset Relief Program] funding that would help recapitalize banks. The result is that our banks became recapitalized much more quickly than banks in other parts of the world. That had the benefit that, rather than decreasing lending, it had an impact on the banks [of] preserving capital as quickly as they could, get the government money out, but didn't do it by shrinking their institutions and cutting back on lending. That started in the financial crisis, but it also set a standard for reporting publicly on the results of the stress tests, and I think the public at large has a high degree of confidence in what the stress test is designed to do. That's not as true in some other parts of the world where there have been instances where stress tests occurred, and shortly thereafter banks were undercapitalized and need to recapitalize themselves. We've yet to have it completely tested by another recession. So I think it's a little premature to know how successful it is until we've weathered a recession, and it's not that there can't be improvements to a stress test — this conference is going to highlight some of the improvements that at least the paper givers and discussions think are important.
Agencies won't enforce Volcker Rule for foreign funds until July 2021 — Banking regulators announced Wednesday that they will not penalize certain foreign banking firms under the Volcker Rule for an additional two years. The Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. issued a joint statement extending the longstanding moratorium on enforcing the proprietary trading ban for certain foreign funds organized outside the U.S. The agencies said they will not take any action related to a foreign fund until July 21, 2021. In general, funds organized outside the U.S. are not part of the scope of the Volcker Rule, which was mandated under the 2010 Dodd-Frank Act. However, after the completion of the joint agency regulation to implement the ban in 2013, certain foreign banking organizations with U.S.-based intermediate holding companies complained that the rule as written could subject them to Volcker Rule enforcement because of their ownership stakes in these foreign funds. The agencies said in a joint policy statement in July 2017 that they would examine how to amend the Volcker rule to clarify the status of foreign funds, and they would not issue enforcement actions against FBOs until they decided on a fix. The agencies issues a proposed revision to the Volcker rule last year, further extending the deadline until July 21 of this year.
FDIC eases requirements on deposit tracking - Dodd-Frank — The Federal Deposit Insurance Corp. voted 3-1 on Tuesday to give large banks additional time to comply with new rules that force them to keep better track of insured deposits. The agency also unanimously approved a final rule giving banks additional ways to verify joint deposits and issued a new proposal designed to make it easier for institutions to receive a safe harbor for backing certain residential securitizations. The FDIC had already mandated that banks with at least 2 million deposit accounts comply with heightened IT standards in order to better track insured deposits. The rule was intended to help the FDIC pay out insurance claims in the event of a bank failure. The agency initially gave institutions until April 1, 2020, to comply. But the final amendment approved Tuesday extended the compliance date by a single year so long as institutions give FDIC notice. The amendment also makes other changes designed to address concerns by affected banks. “In the two years since the rule came into effect covered institutions have made substantial progress toward compliance,” FDIC Chairman Jelena McWilliams said at a board meeting discussing the changes. “During this time it became clear that there are features of the rule that could be improved.” The move was opposed by former FDIC Chairman Martin Gruenberg, who remains a member of the agency's board and argued that an extension was unnecessary and the changes went too far. Gruenberg did support a separate final rule that allows a bank additional ways of verifying the signature of each joint account holder, such as through debit card transactions, in addition to the current requirement that it be an actual “wet” signature. The change would help a bank more quickly verify that each person can qualify for up to $250,000 in deposit insurance.
FASB extends CECL deadline for most lenders - Most banks and credit unions are getting a temporary reprieve from a controversial accounting standard for projected loan losses. The Financial Accounting Standards Board voted on Wednesday to extend the deadline for conversion to the Current Expected Credit Loss methodology to January 2023 for all but the nation’s biggest publicly traded banks. FASB is also laying plans to consult with banks registered with the Securities and Exchange Commission — those lenders must still comply next January — auditors and regulators in hopes of identifying points of confusion and unnecessary procedures. Before Wednesday’s vote, smaller publicly traded banks that aren't registered with the SEC were scheduled to convert to CECL on Jan. 22, followed a year later by privately held banks and credit unions. Adopted in June 2016, CECL has become a contentious topic, with detractors claiming it would divert capital away from lending and lead to longer, deeper recessions. Legislation in the House and Senate, aimed at delaying CECL until a quantitative impact study is conducted, has attracted bipartisan support. The new standard requires lenders to forecast and reserve for lifetime credit losses as soon as they add loans to their portfolios. Under the current incurred-loss standard, lenders recognize credit losses when default becomes imminent.
Senior House Republican proposes credit reporting changes — A senior House Republican is proposing to give the Consumer Financial Protection Bureau supervision and examination authority over large credit reporting firms. Rep. Patrick McHenry, R-N.C., the ranking member of the House Financial Services Committee, has proposed several reforms to the credit reporting industry aimed at improving consumers’ access to credit. McHenry is touting his bill as a bipartisan approach to reforming the credit reporting industry, yet the bill had no co-sponsors as of Friday morning. “While Republicans and Democrats agree it’s time for change, my colleagues across the aisle have taken a one-sided approach, which will ultimately decrease Americans’ access to credit,” McHenry said in a press release. “Instead, my legislation combines bipartisan solutions that provide thoughtful oversight and examination of this industry, helping achieve our goal: protecting American families.” The legislation comes roughly two years after Equifax disclosed a data breach that compromised the personal information of roughly 148 million Americans. McHenry’s bill would give the CFPB authority to oversee the cybersecurity efforts of credit reporting agencies such as Equifax, TransUnion and Experian. It would also bar credit reporting agencies from using Social Security numbers to verify consumers. If a court finds that a consumer's credit profile was damaged because of a predatory loan or some other financial abuse, McHenry's bill would require that the information be removed from the individual's credit report.
CFPB urges financial institutions to report elder fraud cases - The Consumer Financial Protection Bureau is recommending that banks report suspected financial crimes against the elderly to local, state and federal authorities. On Wednesday, the CFPB updated a 2016 advisory by recommending that financial institutions file suspicious activity reports on elder fraud to law enforcement agencies. The CFPB reiterated that elder fraud is “widespread and damaging,” with an average loss of $41,800 among victims over the age of 70. “The Bureau is renewing its efforts to alert banks and credit unions to elder financial exploitation as they are uniquely positioned to detect that an older account holder has been targeted or victimized, and to take action,” CFPB Director Kathy Kraninger said in a press release. “The Bureau stands ready to work with federal, state and local authorities and financial institutions to protect older adults from abusive financial practices that rob them of their financial security.” A 2019 study found that just 28% of SARs related to financial abuse of the elderly also indicated that the activity was reported to law enforcement or other authorities. While financial institutions are filing an increasing number of SARs identifying elder abuse, in most cases the reports do not indicate that the financial institutions are reporting directly to law enforcement, the bureau said. “More reporting to the relevant law enforcement agencies can increase investigation and prosecution,” the CFPB said. The bureau's study listed relevant laws on the 26 states and the District of Columbia that mandate reporting of elder financial exploitation.
House Democrats mull bill to ban Facebook cryptocurrency project - Democrats on the House Financial Services Committee are considering a bill that would ban major social media and technology companies from providing financial services and offering digital currencies. The measure, outlined in a discussion draft obtained Monday by The Hill, appears to target Facebook’s Project Libra, a proposed cryptocurrency-based payments system. Called the “Keep Big Tech Out of Finance Act,” the bill would apply to any company with at least $25 billion in annual revenue that offers “an online marketplace, an exchange, or a platform for connecting third parties.” Covered firms would be banned from creating and operating digital currencies, a provision clearly targeted at Facebook’s Project Libra. But the measure’s broad parameters could also effectively outlaw financial products offered other major tech firms. Companies subject to the bill — which appear to include Facebook, Google, and Amazon — would also be banned from offering a slew of financial services such as banking, investment management, securities exchanges, financial advice and money transmission. Lawmakers and regulators in both parties have expressed fears about Libra and Facebook’s ambitions in the financial services industry. Even so, the proposed bill would likely face substantial opposition from Senate Republicans concerns about regulatory overreach in the financial sector. The emergence of the bill, first reported by Reuters and Bloomberg Law, comes a day before Libra chief David Marcus testifies before the Financial Services panel. Marcus is expected to tell Congress this week that the company will launch its digital coin after related regulatory concerns are "cleared up.” Facebook is but one of more than two dozen companies backing Libra, which will be run by a Swiss nonprofit separate from the social media giant. But the system will employ a digital wallet called Calibra, which is run by a Facebook subsidiary.
Facebook’s Crypto Woes Deepen as Mnuchin Joins Parade of Critics Facebook Inc. faced its latest Washington crisis Monday, with Treasury Secretary Steven Mnuchin joining a parade of policy makers and politicians who’ve bashed its proposed cryptocurrency, demonstrating the hurdles the company must overcome to ever make the token a reality. Speaking from the White House, Mnuchin said he has serious concerns about the national security implications of Facebook’s coin and other virtual currencies. He said the potential for money laundering and other illicit activities is high, and vowed that Treasury would crack down on law breakers when it finds them. “This is indeed a national security issue,” Mnuchin said in a briefing for reporters at the White House. “We will not allow digital asset service providers to operate in the shadows.” Bitcoin pared an earlier decline after Mnuchin’s comments, and was down 9.6 percent to $10,765.78 at 2:42 p.m. in New York. He is far from the first official to express skepticism. President Donald Trump took to Twitter July 11 to criticize Facebook’s effort, saying he’s not a fan of Bitcoin and that cryptocurrencies are often used to facilitate “unlawful behavior.” And some of Trump’s staunchest foes in Congress, including Representative Maxine Waters, have also faulted Facebook, going so far as to demand that the company halt all work on the coin, called Libra. Federal Reserve Chairman Jerome Powell chimed in last week, telling lawmakers that he has “serious concerns’’ about the token and cast doubt on Facebook’s timeline for launching it by next year. The opposition from both Republicans and Democrats might put fresh pressure on Facebook -- already under fire in Washington over scandals tied to data privacy -- to assess whether its cryptocurrency is worth it. The fireworks will start again tomorrow when the company faces a hearing before the Senate Banking Committee followed by another Wednesday before the House Financial Services Committee.
‘Breathtaking arrogance’: senators grill Facebook in combative hearing over Libra currency - Facebook was greeted with hostility in the US Congress as the tech giant sought to defend its proposed digital currency to lawmakers on the Hill. Members of the Senate’s banking committee grilled the Facebook executive David Marcus on Tuesday on the company’s privacy and security plans for Libra, a proposed digital currency that would allow Facebook’s billions of users to make financial transactions across the globe. Senator Sherrod Brown of Ohio said Facebook shows “breathtaking arrogance” to attempt to launch a digital financial service after the privacy scandals that have affected the company and its users in the past year. “Facebook is dangerous,” Brown said, likening the company to a toddler playing with matches. “It has burned the house down repeatedly and called every attempt a learning experience. Do you really think people should trust you with their bank accounts and their money?” Tuesday morning’s hearing on Libra was the first of several hearings this week questioning the growing power of big tech firms. On Tuesday afternoon, representatives of Facebook, Google, Apple and Amazon faced questions on online monopolies at the House subcommittee on antitrust, commercial and administrative law. And on Wednesday morning, it will be the House’s turn to question Facebook over its cryptocurrency venture.
Sen. Sherrod Brown slams Facebook's cryptocurrency ambitions - Sen. Sherrod Brown came out swinging at Facebook on Tuesday to kick off the Senate Banking Committee hearing on the company’s new cryptocurrency project, Libra. “Facebook is dangerous,” the Ohio Democrat and ranking committee member began his opening statement. “Now Facebook may not intend to be dangerous, but surely they don’t respect the power of the technologies they’re playing with. Like a toddler who has gotten his hands on a book of matches, Facebook has burned down the house over and over and called every arson a learning experience.” Brown repeatedly referenced what he called Facebook’s “competing missions” to make the world more connected and to make money for themselves. “Facebook has demonstrated through scandal after scandal that it doesn’t deserve our trust. It should be treated like the profit-seeking corporation it is, just like any other company,” Brown said. He also criticized Facebook’s early motto of “move fast and break things.” He referenced Facebook’s role in facilitating the spread of propaganda in Myanmar that lead to violence and genocide in the country. He also referred to the company’s role in disrupting the business models of journalistic publications. “They moved fast and broke our political discourse. They moved fast and broke journalism. They moved fast and helped incite a genocide. They moved fast and they’re helping to undermine our democracy,” Brown said. “Now Facebook asks people to trust them with their hard-earned paychecks. Takes a breathtaking amount of arrogance ... to look at that track record and think, ’You know what we really ought to do next? ... Let’s run our own bank and our own for-profit version of the federal reserve. Let’s do it for the whole world.” Later in the hearing, Brown asked David Marcus, the head of Facebook’s new cryptocurrency subsidiary Calibra, whether he trusts Libra so much that he would accept all of his salary in the new currency. Marcus initially skirted the question, saying “Libra is not designed to compete with bank accounts.” But he later said he would accept his salary in Libra.
Senator Compares Facebook’s Libra Association to Spectre in James Bond Movie - Pam Martens - Yesterday the U.S. Senate Banking Committee assembled to hear Facebook’s David Marcus explain how the company wants to create a global digital currency called Libra, to be run by a Switzerland-based global organization called the Libra Association, made up of 27 members from the fields of payment systems, technology, telecommunications, blockchain services, venture capital, nonprofits and academic institutions.Given Facebook’s serial history of abusing the privacy rights of its users and selling their data without their permission, not to mention its role in facilitating Russian interference in the 2016 presidential election, we immediately went to check out thenames of the nonprofits that had signed up to monitor this sprawling international monetary system cooked up in a Facebook lab in a year’s time. We were hoping to see names like American Civil Liberties Union, Public Citizen, Consumer Federation of America, or Center for Constitutional Rights. No such luck. Here’s who Facebook lists under nonprofits, multilateral organizations and academic institutions: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking. We have to admit to ignorance of any of these groups.At the end of the hearing, after Facebook’s Marcus had struggled to explain the checks and balances of his short-on-specifics plan, Senator Chris Van Hollen (D-MD) said he suspected that Americans were going to view this organization as something like Spectre (the evil international surveillance organization) from the James Bond movie series.It felt like Van Hollen had just read our minds. Senator Sherrod Brown (D-OH), the ranking member of the Committee, made opening remarks at the hearing that were so on-point and poignant to the interests and concerns of the American people that we’ve printed them in full below.
Swiss group that’s supposed to oversee privacy for Libra says it hasn’t heard from Facebook at all - Facebook said on Tuesday that Switzerland’s data protection agency will oversee data and privacy protections for its new cryptocurrency, Libra. But Facebook hasn’t reached out to the Swiss regulator, a spokesman for the agency told CNBC. In his testimony before the Senate Banking Committee on Tuesday, David Marcus, the head of Facebook’s digital currency project, said, “For the purposes of data and privacy protections, the Swiss Federal Data Protection and Information Commissioner (FDPIC) will be the Libra Association’s privacy regulator.” Asked about the agency’s role regulating Libra, Hugo Wyler, head of communication at the FDPIC, said in a statement to CNBC: “We have taken note of the statements made by David Marcus, Chief of Calibra, on our potential role as data protection supervisory authority in the Libra context. Until today we have not been contacted by the promoters of Libra,” Wyler said. “We expect Facebook or its promoters to provide us with concrete information when the time comes. Only then will we be able to examine the extent to which our legal advisory and supervisory competence is given. In any case, we are following the development of the project in the public debate.” A Facebook spokesperson confirmed that the company hasn’t yet met with the FDPIC.
Billionaire investor Peter Thiel says the FBI and CIA should investigate Google - Billionaire investor Peter Thiel said Sunday that the FBI and the CIA should investigate if Google has been infiltrated by Chinese intelligence, according to a report from Axios. Thiel, a Facebook board member, was speaking at the National Conservatism Conference in Washington, D.C. and his speech focused on three questions that should be presented to the tech giant, Axios said. “Number one, how many foreign intelligence agencies have infiltrated your Manhattan Project for AI (artificial intelligence)?” Thiel reportedly asked. “Number two, does Google’s senior management consider itself to have been thoroughly infiltrated by Chinese intelligence?”He said those questions “need to be asked by the FBI, by the CIA.”Thiel also blasted Alphabet-owned Google for its work in China.“Number three, is it because they consider themselves to be so thoroughly infiltrated that they have engaged in the seemingly treasonous decision to work with the Chinese military and not with the US military,” Thiel said, according to Axios. Google did not immediately respond to CNBC’s request for comments.
Google’s Search Bias On Trial In Washington --Does Google have bias?It's the question that's at the center of a hearing Tuesday by a Senate Judiciary subcommittee.The hearing is probing into Google's search engine and whether it censors conservative media and bloggers out of the top search results.Sen. Ted Cruz, R-Texas, the subcommittee chairman, called the hearing after Google failed to attend an April hearing on the topic. Facebook and Twitter attended.Cruz said he's concerned about Google's control over what people see on the Internet, and said previous legislation passed to protect tech companies was not created to "empower large technology companies to control our speech." "When you submit a video, people at YouTube determine whether you've engaged in hate speech, an ever-changing and vague standard meant to give censorship an air of legitimacy," Cruz said. "This is a staggering amount of power to ban speech, to manipulate search results, to destroy rivals and to shape culture."President Trump has alleged that big tech companies have an anti-conservative bias. On Dec. 18, 2018, the president tweeted: "Facebook, Twitter and Google are so biased toward the Dems it is ridiculous!"Google has denied the claim."Google needs to be useful for everyone, regardless of race, nationality or political leanings," Google's Vice President for Government Affairs and Public Policy Karan Bhatia said at Tuesday's hearing. "We have a strong business incentive to prevent anyone from interfering with the integrity of our products, or the results we provide to our users. Our platform reflects the online world that exists."
YouTube’s Trampled Foes Plot Antitrust Revenge - The story is familiar to advertising and media entrepreneurs who built businesses around YouTube, only to be hobbled when the video giant changed the rules of engagement. Google used YouTube’s popularity to lure creators, media companies and tech firms onto the service, gaining access to more videos and ad space. YouTube then used that supply to control ad prices and amass data about viewers, squeezing out anyone that tried to compete, according to interviews with more than a dozen partners, rivals and former employees. Many asked not to be identified discussing sensitive information about a powerful industry player. YouTube didn’t wipe out competition in one fell swoop, or act maliciously, according to these people. Instead, YouTube made decisions to consolidate the video ad-buying process, with little regard for partners or competition, and few regulatory checks. That left a graveyard of failed companies in its wake and fewer choices for advertisers, the people said. In digital video advertising, YouTube has no peers. The U.S. market harnessed $16.3 billion in ad spending last year, according to the Interactive Advertising Bureau. YouTube accounted for the majority of that. YouTube disputes this depiction of its dominance. The company said it shares more than half its ad sales with video producers, and competes in a much bigger market than just online video ads. But U.S. regulators and politicians are now listening to claims that Google and YouTube may have run afoul of the law. The Department of Justice is considering an antitrust investigation of Google. The Federal Trade Commission is probing allegations that YouTube violated privacy laws protecting children, Bloomberg reported earlier this year. Congress, which has multiple investigations into Google and its peers, recently requested an interview with a former YouTube business partner, according to some of the people who spoke with Bloomberg.
EFF Hits AT&T With Class Action Lawsuit for Selling Customers’ Location to Bounty Hunters - Tuesday, the Electronic Frontier Foundation (EFF) filed a class action lawsuit against AT&T and two data brokers over their sale of AT&T customers' real-time location data. The lawsuit seeks an injunction against AT&T, which would ban the company from selling any more customer location data and ensure that any already sold data is destroyed. The move comes after multiple Motherboard investigations found AT&T, T-Mobile, Sprint, and Verizon sold their customers' data to so-called location aggregators, which then ended up in the hands of bounty hunters and bail bondsman. “To sell this information without any notification to users is deceptive, extraordinarily invasive of their privacy, and illegal,” Thomas D. Warren, a lawyer at Pierce Bainbridge, which is working on the suit with the EFF, said in a statement. The lawsuit, focused on those impacted in California, represents three Californian AT&T customers. Katherine Scott, Carolyn Jewel, and George Pontis are all AT&T customers who were unaware the company sold access to their location. The class action complaintsays the three didn't consent to the sale of their location data."Plaintiffs were emotionally distressed by the discovery that their location data was sold to the Aggregator Defendants and additional unknown third parties without their consent," the class action complaint, which also seeks monetary damages, reads. "Had Plaintiffs known about the real-time location practices complained of herein, they would not have signed up for AT&T wireless cell phone service or would have paid less for its services," the complaint adds.
Privacy concerns over viral photo apps are totally valid. But they’re also often overblown -If you’ve been on Twitter or Instagram recently, you may have noticed that every person you know is suddenly 80 years old. There’s been a huge spike in use of the Russian photo-editing application FaceApp, which allows a user to submit a photo of their face and be shown an elderly version of themselves.Of course, there is a moment in every fad where someone loudly points out that the fad is bad, and that moment has come for FaceApp this week because of a heated conversation around the app’s terms of service and privacy policy.In a representative article from Fast Company published Wednesday morning, it’s noted that FaceApp uploads photos to its servers, and “the age effects are crunched by the AI there, off your device.” The piece also includes, in bold, “FaceApp does not alert the user that their photo has been uploaded to the cloud, nor does it specify in its policies if the company retains your original photo.” Many worried citizens on Twitter have screenshotted and shared a section of FaceApp’s terms of service, which discusses what the company may do with photos that users upload:
Snowden Warns, Big Tech Will Indenture Entire Populations Into Servitude To Corps & Govts --Tech giants such as Google or Facebook store vast amounts of personal data for their own gain but they are also “happy to hand over” this data to governments, making people vulnerable to persecution, Edward Snowden warned during an interview with RT. Any person can pretty much be sure that “everything you've done, everything you've typed into their search box, everything you have clicked on, everything you've liked” is duly recorded and stored in the enormous databanks of the big tech corporations, the NSA whistleblower said addressing the UK Open Rights Group Conference (ORGCON19) in London via a video link from Moscow. “Your communications, as they happen largely today, don't actually take place between you and the person that you are talking to. They happen between you and Facebook, who then provides a copy of it to the person you are talking to, or you and Gmail, who then gives a copy of it to the person that you are talking to and every time these transactions occur through these service providers, they keep a record of it.” The corporations do that primarily to advance their own financial and economic interests, yet they seek to not only “better their class” but also to “better their state” and are, thus, more than happy to share the data they obtained with governments, which, in turn, make a use of it in its mass surveillance programs, Snowden warned.
Toxic Tech- How Social Media Is Making Us Dumb, Angry, & Addicted - - It’s unfortunate that social media not only makes such debate more difficult on its platforms, but also, it seems, rewires people’s brains in such a fashion as to make such debate more difficult everywhere else. It is made worse by the fact that Twitter in particular seems to be most heavily used by the very people – pundits, political journalists, the intelligentsia – most vital to the sort of debate that Emerson saw as essential. In fact, the corruption of the political/intellectual class by social media is particularly serious, since their descent into thoughtless polarization can then spread to the rest of the population, even that large part that doesn’t use social media itself, through traditional channels. Twitter is also the most stripped down of the social media platforms, and thus the most illustrative of social media’s basic flaws. Just as sad people repetitively pulling the levers on gas station slot machines illustrate the essence of gambling without the distracting glamour of casinos and racetracks, so Twitter, without a focus on “friends” or photos, or other sidelines, displays raw online human political nature at its worst.Social media is addictive by design. The companies involved put enormous amounts of thought and effort into making it that way, so that people will be glued to their screens. As much as they’re selling anything, they’re selling the “dopamine hit” that people experience when they get a “like” or a “share” or some other response to their action. We’ve reached the point where there are not merely articles in places like Psychology Today and The Washington Post on dealing with “social media addiction,” but even scholarly papers in medical journals with titles like “The relationship between addictive use of social media and video games and symptoms of psychiatric disorders: A large scale cross sectional study.” One of the consulting companies in the business of making applications addictive is even named DopamineLabs, making no bones about what’s going on. Nor is this addiction limited to young people. In fact, as a recent article in Wired by Clive Thompson reported, the evidence is that older people – the middle aged Generation Xers in particular – are the most hooked. It’s also a terrible way to learn empathy, as the emotional response to one’s behavior, normally displayed in things like facial expressions, body language, and tone of voice, is reduced to text and emojis. Perhaps this is one of the reasons for the shame mobs: To the mobs, their targets don’t really seem human. But while the shame mobs throw their stones in a sort of play, their victims’ lives and careers are ruined in earnest.
Here’s How Much The Top CEOs Of S&P 500 Companies Get Paid – infographic, tables - How much do the CEOs from some of the world’s most important companies get paid, and do these top CEOs deliver commensurate returns to shareholders? Today’s infographic comes to us from HowMuch.net and it visualizes data on S&P 500 companies to see if there is any relationship between CEO pay and stock performance. To begin, let’s look at the highest and lowest paid CEOs on the S&P 500, and their associated performance levels. Data here comes from a report by the Wall Street Journal. Below are the five CEOs with the most pay in 2018: Last year, David Zaslav led top CEOs by taking home $129.4 million from Discovery, Inc., the parent company of various TV properties such as the Discovery Channel, Animal Planet, HGTV, Food Network, and other non-fiction focused programming. He delivered a 10.4% shareholder return, when the S&P 500 itself finished in negative territory in 2018. Of the mix of highest-paid CEOs, Bob Iger of Disney may be able to claim the biggest impact. He helped close a $71.3 billion acquisition of 21st Century Fox, while also leading Disney’s efforts to launch a streaming service to compete with Netflix. The market rewarded Disney with a 20.4% shareholder return, while Iger received a paycheck of $65.6 million. Now, let’s look at the lowest paid CEOs in 2018: On the list of lowest paid CEOs, we see two tech titans (Larry Page and Jack Dorsey) that have each opted for $1 salaries. Of course, they are both billionaires that own large amounts of shares in their respective companies, so they are not particularly worried about annual paychecks.Also appearing here is Warren Buffett, who is technically paid $100,000 per year by Berkshire Hathaway plus an amount of “other compensation” that fluctuates annually. While this is indeed a modest salary, the Warren Buffett Empire is anything but modest in size – and the legendary value investor currently holds a net worth of $84.3 billion. Finally, it’s worth noting that while J. Jayson Adair of Copart was one of the lowest paid CEOs at $203,000 in 2018, the company had the best return on the S&P 500 at 82.2%. Today, the company’s stock price still sits near all-time highs.
Jeff Bezos flaunts obscene wealth with $80 million Manhattan penthouse purchase - When Amazon’s owner and the world’s richest person, Jeff Bezos, recently bought an $80 million triplex penthouse in New York City it didn’t set a record. In a city that boasts some of the most extravagantly expensive real estate and is home to the highest concentration of billionaires in the world, Bezos has competition.The record for priciest penthouse is still held by Ken Griffith, founder and CEO of the hedge fund Citadel, whose $238 million property is the most expensive in the US.Still, Bezos’ acquisition exposes the obscene sums spent by the ultra-wealthy on luxury real estate in contrast to the abysmal housing conditions for masses of working people.In a city where there are close to 62,000 homeless people—including 14,826 homeless families with 21,709 homeless children, and where 44 percent of the population pays more than a third of their income in rent—these residences sit empty much of the time. According to insurance giant AIG, their ultra-high net worth (UHNW) owners split their time among an average of nine properties abroad in addition to their US residences.The wealth generated by the super-exploited Amazon workforce, concentrated in the hands of the richest individual in the world, is not available for their housing and other basic needs. “Affordable housing” is considered to be one third of income, which for an Amazon fulfillment worker earning $15 an hour would be about $800 a month.This is nowhere near the median monthly rent in more expensive cities in the US—$2,360 in New York, $2,890 in Los Angeles, $2,170 in Washington, DC. In Amazon’s hometown of Seattle, the current median rent in the metro area is $1,959 a month. Many Amazon workers across the US live doubled and tripled up, and in some cases have been forced to live in their cars. By contrast, what did Bezos get for $80 million? A penthouse combined with the two apartments below resulted in a 12-bedroom, 17,000-square-foot triplex that reportedly boasts a seven-room “master suite” with views of the Empire State Building from the bathtub. The home also features a $23,000 glass “foosball” table and a $5,000 dog bed, among other amenities.
Foreign purchases of American homes plunge 36% as Chinese buyers flee the market - Challenging conditions in the U.S. housing market, along with tighter currency controls by the Chinese government, caused a stunning drop in foreign demand for American homes. The dollar volume of homes purchased by foreign buyers from April 2018 through March 2019 dropped 36% from the previous year, according to the National Association of Realtors. The decline was due to a drop in the number and average price of purchases. Foreigners bought 183,100 properties with a total value of about $77.9 billion, down from 266,800 valued at $121 billion in the previous period. They paid a median price of $280,600, which is higher than the median for all existing homebuyers ($259,600), but it was down from $290,400 the previous year. “A confluence of many factors — slower economic growth abroad, tighter capital controls in China, a stronger U.S. dollar and a low inventory of homes for sale — contributed to the pullback of foreign buyers,” said Lawrence Yun, NAR’s chief economist. “However, the magnitude of the decline is quite striking, implying less confidence in owning a property in the U.S.” The Chinese were the leading buyers for the seventh consecutive year, purchasing an estimated $13.4 billion worth of residential property. Yet that was a 56% decline from the previous 12 months and comparatively the biggest percentage drop of all foreign buyers. Chinese economic growth slowed to 6.3% in 2019 compared with 6.9% in 2017, when the previous buyer survey began. The Chinese government also tightened its grip on the outflow of cash to purchase foreign property. The Chinese may also be souring on U.S. real estate due to the current political climate. Anecdotally, real estate agents in California have seen a pullback in Chinese buyer demand. Southern California had been particularly popular with Chinese parents hoping to send their children to American colleges. In the first quarter of this year, Chinese buyer inquiries for U.S. properties on Juwai.com, a Chinese real estate site, were down 27.5% from a year ago. Inquiries have been down in four of the last five quarters.
Tropical Storm Barry puts 340K properties at risk from flash flooding - Damage related to flash flooding from Tropical Storm Barry has the potential to affect 339,480 homes, according to CoreLogic's latest analysis. Reports estimate a worst-case total of $10 billion in reconstruction cost value. The mortgage delinquency rate plummeted to 20-year lows and properties in default fell to the lowest rate since 2005. However, with the recent earthquakes in California and Barry's descent on the Gulf Coast, distressed mortgages could rise in the near future because of these natural disasters. "Safety is our top priority for those in Louisiana and nearby states as Barry approaches," Yvette Gilmore, Freddie Mac's vice president of single-family servicer performance management, said in a press release issued before the storm made landfall. "Once safe from this dangerous storm, we strongly encourage homeowners whose homes or places of employment have been impacted by the storm to call their mortgage servicer — the company to which borrowers send their monthly mortgage payments — to learn about available relief options. We stand ready to ensure that mortgage relief is made available." New Orleans has the most at-risk properties to flash flooding with 192,613. Baton Rouge with 40,389 and Lafayette with 29,393 properties follow. Barry made landfall on Saturday in Louisiana. The storm, downgraded to a tropical depression, was located 145 miles south of Springfield, Mo., and 70 miles west of Little Rock, Ark., at 10 a.m. Central Daylight Time on Monday, as it makes its way north and then northeasterly, according to the National Weather Service. There is the potential for additional flooding as Barry passes through.
Not one state posted annual growth in its mortgage delinquency rate - Not a single state posted annual gains in overall or serious mortgage delinquency rate in April as the national rate plummeted to a low not reached in over 20 years, according to CoreLogic. Unemployment lows, home price growth and responsible underwriting supported the drop. "Thanks to a 50-year low in unemployment, rising home prices and responsible underwriting, the U.S. overall delinquency rate is the lowest in more than 20 years," Frank Nothaft, chief economist at CoreLogic, said in a press release. CoreLogic About 3.6% of mortgages were in some state of delinquency in April, a decline from 4.3% over the same period last year; the overall delinquency rate has been falling for 16 straight months. The serious delinquency rate, measuring mortgages 90 or more days past due, shot down to 1.3% — a share that hasn't been matched since August 2005. The foreclosure inventory rate, accounting for mortgages in any state of the foreclosure process, has held steady for the previous five months at 0.4%, the lowest for any rate since at least January 1999. "However, a number of metros that suffered a natural disaster or economic decline contradict this national trend. For example, in the wake of the 2018 California Camp Fire, the serious delinquency rate in the Chico, Calif., metro area this April was 21% higher than one year ago," said Nothaft. Recent flooding in the Midwest could also signal an increase in delinquency rates in hard-hit areas, similar to the results of hurricanes, according to CoreLogic President and CEO Frank Martell.
More distressed mortgages could emerge in the West: Auction.com - The Western states are the most likely to experience an increase in distressed loan activity in the second half of 2019, a survey of mortgage servicers by Auction.com found.The West was identified as the region most prone to a rise in distressed mortgages by 40% of the respondents to the survey conducted at Auction.com's Disposition Summit. The percentages of respondents who identified other regions as more likely to show signs of increased distress by the second half of the year were as follows: the Midwest, 23%, the Northeast, 20%, and the South, 17%. "These forward-looking sentiments represent somewhat of a shift from trends seen early in the year," Auction.com said in its report.Indicators earlier this year suggested distress was rising most quickly in the South. However, the recent survey results suggest the concern may be more long term in the West.Foreclosure starts in the South increased 15% from a year ago in the first quarter. This was the only year-over-year increase among the four regions, according to an analysis of data from Attom Data Solutions.But the rise in foreclosure starts in the South is partly attributed to the lingering effects ofthe 2017 hurricane season in Texas and Florida. On a quarter-to-quarter basis, the West had a 10% rise in foreclosure starts in the first quarter, tied with the South, and above the nationwide increase.There was an even split between the share of servicers that expected higher foreclosure and real estate owned activity across the board for the rest of the year and those that expected a decrease, with 44% anticipating a slight increase, 6% forecasting a substantial rise, 36% calling for a slight decrease and 14% expecting a substantial drop. A surprisingly higher number, 72%, are planning to increase their loss mitigation activity — either slightly (56%) or substantially (16%) — in the second half of the year. Those activities include repayment and forbearance plans, charge-offs in lieu of foreclosure, and loan modifications. Only 3% of respondents said they expected a substantial decrease in their loss mitigation activities.
The US Housing Bust In 20 Charts - In "Where The American Dream Goes To Die", we published some of the most recent, concerning observations on the current state of the US housing market. Now, courtesy of Deutsche Bank, for our lazier readers, here is a visual recap of the recent turning point in US housing, in which DB's Torsten Slok uses an array of charts to demonstrate that "US Housing is cooling down" as the the negative SALT impact is overshadowing low mortgage rates, high consumer sentiment, and record-low unemployment rate. Here are the main highlights:
- Single-family starts and permits rolling over despite lower mortgage rates and low unemployment rate
- Existing single-family home sales and new single-family home sales not rebounding despite very low mortgage rates
- Single-family starts cooling down, multi-family sideways
- Lower mortgage rates and low unemployment not doing much to boost consumer plans to buy a house
- Residential investment is shrinking despite low mortgage rate and low unemployment rate
- Year-over-year growth in housing components contribution to GDP
- Interest in home buying rolling over
- Home price appreciation trending down
- Fewer subprime borrowers today. And more people with top credit scores. And still housing is cooling down
- 30% of the population have a subprime credit score
- Almost no distressed home sales
- Homeownership rate still far below its peak despite low mortgage rate and low unemployment rate
- Since the homeownership rate peaked in 2006 the number of households renting has increased by roughly 10 million
- Fewer people plan to buy a home within 12 months despite low unemployment rate and low mortgage rate
- Mortgage refi application activity up but not much when taking into account how much mortgage rates have declined
- Purchase applications up but not much when taking into account how much mortgage rates have fallen
- Manhattan home prices falling at the fastest rate since the financial crisis
- Lumber prices down recently
- Home ownership rates still below pre-crisis level across age groups
- Geographical distribution of housing boom/bust
MBA: Mortgage Applications Decreased in Latest Weekly Survey --From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey: Mortgage applications decreased 1.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 12, 2019. Last week’s results included an adjustment for the Fourth of July holiday.... The Refinance Index increased 2 percent from the previous week and was 87 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index increased 21 percent compared with the previous week and was 7 percent higher than the same week one year ago....“Mortgage rates increased across the board, with the 30-year fixed rate mortgage rising to its highest level in a month to 4.12 percent, which is still below this year’s average of 4.45 percent,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Coming out of the July 4th holiday, applications were lower overall, with purchase activity slipping almost 4 percent. Refinance applications increased, with activity reaching its highest level in a month, driven mainly by FHA refinance applications. Historically, government refinance activity lags slightly in response to rate changes.” Added Kan, “Buyer interest at the start of the second half of the year continues to outpace year ago levels, with activity last week up 7 percent.”... The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.12 percent from 4.04 percent, with points increasing to 0.38 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
30 Year Mortgage Rates increase to 4.0% --From Matthew Graham at Mortgage News Daily: Mortgage Rates Slightly Higher to Begin Risky Week Mortgage rates moved decisively higher this week as the underlying bond market finally began shifting gears. After the Fed meeting in June, rates moved to the lowest levels in more than 2 years and had been holding in a narrow range since then. [30YR FIXED - 4.0%] This is a graph from Mortgage News Daily (MND) showing 30 year fixed rates from three sources (MND, MBA, Freddie Mac). Go to MND and you can adjust the graph for different time periods.
Home sales take a dive in June, normally the strongest month: Remax --The onset of summer typically comes with the largest volume of home sales, however exorbitant prices kept potential buyers at bay, according to Remax's National Housing Report. Home sales dropped 7.8% in June from the year before and 4.7% from a healthy May while reaching the highest median sales price of $276,000 in the 10-year history of the report. June has set the mark for highest annual median price for the last six years. Boise, Idaho, had June's biggest median price increase at 10.7%, followed by Albuquerque, N.M., at 10.4% and Philadelphia's 10%. The only metro areas to decrease were San Francisco by 2% and Hartford, Conn., with a 0.1% dip. Despite the big dollar figures, properties didn't stay on the market long, however. The average number of days between listing and sale fell three days from May to 44 — the second fastest for this figure since 41 in June 2018."Record prices appear to have kept June sales figures from topping a strong May," Adam Contos, Remax chief executive officer, said in a press release. "Nevertheless, there are indications, including the return of very favorable mortgage rates, that the pace could pick up in July. Several encouraging longer-term trends — ongoing demand, improving inventory levels, low interest rates — are helping the market make incremental progress on multiple fronts. But supply remains a concern, so we need more homes to be built."Housing inventory had mixed results in June. The total homes for sale rose 1.3% year-over-year while edging down 0.6% month-over-month. The supply fell to 2.8 months from 3.1 months the year prior, while staying static from May.
Black Homeownership Plunges To All-Time-Low Despite Record-Low Unemployment - One of President Trump's favorite talking points is promoting how his economic policies have lifted all Americans. He routinely cites the record low rate of black unemployment and how the economy is the "greatest ever." "African American unemployment has reached its lowest rate ever recorded — ever! Ever! Remember 'What do you have to lose?' What do you have to lose, right? 'What do you have to lose?' I said." — Trump, at a campaign rally in Southaven, Miss., Oct. 2018 "You look at our economy. You look at jobs. You look at African American — the lowest in the history of our country, unemployment numbers — the best numbers they've ever had." — Trump tweeted July 2019. New census data, reported via The Wall Street Journal, tells an entirely different story in the African-American communities across the country, one where the black homeownership rate has plunged to the lowest on record. The black homeownership rate increased for three decades and reached nearly 50% in 2004, but all those gains were wiped out in the last decade, hitting a new record low in 1Q19. The rate stabilized from 1Q16 through 3Q18, has since dove under the 2.5-year range to 41.1%. The rate plunged 1.8% from 3Q18 to 1Q19, which was a period in the economy where the most recent industrial slowdown started.
Housing Starts at 1.253 Million Annual Rate in June --From the Census Bureau: Permits, Starts and Completions - Privately‐owned housing starts in June were at a seasonally adjusted annual rate of 1,253,000. This is 0.9 percent below the revised May estimate of 1,265,000, but is 6.2 percent above the June 2018 rate of 1,180,000. Single‐family housing starts in June were at a rate of 847,000; this is 3.5 percent above the revised May figure of 818,000. The June rate for units in buildings with five units or more was 396,000. Privately‐owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,220,000. This is 6.1 percent below the revised May rate of 1,299,000 and is 6.6 percent below the June 2018 rate of 1,306,000. Single‐family authorizations in June were at a rate of 813,000; this is 0.4 percent above the revised May figure of 810,000. Authorizations of units in buildings with five units or more were at a rate of 360,000 in June. The first graph shows single and multi-family housing starts for the last several years. Multi-family starts (red, 2+ units) were down in June compared to May. Multi-family starts were up 24% year-over-year in June. Multi-family is volatile month-to-month, and has been mostly moving sideways the last few years. Single-family starts (blue) increased in June, and were down 0.8% year-over-year. Total Housing Starts and Single Family Housing StartsThe second graph shows total and single unit starts since 1968. The second graph shows the huge collapse following the housing bubble, and then eventual recovery (but still historically low). Total housing starts in June were slightly below expectations, and starts for April and May were revised down.
June residential construction report a decidedly mixed bag -- The Census Bureau’s report on residential construction for June was a decidedly mixed bag. Here’s their graph of permits, starts, and completions: On the positive side, even though starts declined slightly in June, the three month average, which is the best way of looking at this measure due to its noisy m/m readings, improved to the best number in 13 months. Starts are real economic activity, and bode well for 2020. Single family permits (not shown above) - the least noisy of all the leading housing indicators - also improved to 813,000, suggesting that April’s reading of 786,000 may have been their low. On the negative side, total permits declined to 1.22 million annualized, which is the lowest reading in over 2 years, and is -13.2% below their March 2018 peak of 1.406 million. This is a bigger decline than that which preceded the 2001 recession. In other words, it is consistent with what might be seen in advance of a producer-led recession. Additionally, total completions (green in the graph above) fell to a five month low. Since residential construction employment generally turns shortly after completions turn, this renewed decline in the past several months means that we can expect to see declines in this leading employment sector as well in the next several months. As I said at the beginning, a very mixed bag. I’ll have a more detailed post up at Seeking Alpha probably tomorrow.
Comments on June Housing Starts – McBride - Earlier: Housing Starts at 1.253 Million Annual Rate in JuneTotal housing starts in June were slightly below expectations, and starts for April and May were revised down.The housing starts report showed starts were down 0.9% in June compared to May, and starts were up 6.2% year-over-year compared to June 2018. Single family starts were down 0.8% year-over-year, and multi-family starts were up 25.3%.This first graph shows the month to month comparison for total starts between 2018 (blue) and 2019 (red). Starts were up 6.2% in June compared to June 2018. Year-to-date, starts are down 3.7% compared to the same period in 2018. Last year, in 2018, starts were strong early in the year, and then fell off in the 2nd half - so the early comparisons this year were the most difficult. My guess was starts would be down slightly year-over-year in 2019 compared to 2018, but nothing like the YoY declines we saw in February and March. Now it looks like starts might be up slightly in 2019 compared to 2018.Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).These graphs use a 12 month rolling total for NSA starts and completions. The rolling 12 month total for starts (blue line) increased steadily for several years following the great recession - but turned down, and has moved sideways recently. Completions (red line) had lagged behind - however completions and starts are at about the same level now. As I've been noting for a few years, the significant growth in multi-family starts is behind us - multi-family starts peaked in June 2015 (at 510 thousand SAAR). The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. The blue line is for single family starts and the red line is for single family completions. Note the relatively low level of single family starts and completions. The "wide bottom" was what I was forecasting following the recession, and now I expect some further increases in single family starts and completions.
Building Permits Plunge Most In 3 Years Despite Tumbling Rates - After weak home sales data and re-weakening in mortgage applications (but a modest recovery in homebuilder sentiment), expectations were for a slowdown in starts and permits but the June prints were shockingly bad.Housing Starts dropped 0.9% MoM (worse than the 0.7% expected) but Building Permits plunged 6.1% MoM - the worst drop since March 2016. This occurred despite a collapse in mortgage rates during the reporting period. This is the 6th month in a row of YoY declines in Building Permits... Under the surface, multi-family starts tumbled 9.4% MoM as single-family jumped 3.5% from 818K to 847K And multi-family permits collapsed 20.7%, from 454K to 360K, the lowest since Feb 2017. Two of four regions posted an increase in housing starts last month, led by a 31.3% rise in the Northeast and a 27.1% advance in the Midwest. New construction declined 9.2% in the South and 4.9% in the West.
House Prices and Median Household Income -- 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. Last week I posted House Prices to National Average Wage Index. I mentioned another measure - house prices to the Median Household income. This graph uses an annual average of the Case-Shiller house price index - and the nominal median household income through 2017 (from the Census Bureau). This graph shows the ratio of house price indexes divided by the Median Household Income through 2017 (the HPI is first multiplied by 1000). This uses the annual average National Case-Shiller index since 1976. As of 2017, house prices were above the median historical ratio - but far below the bubble peak.
“Where the American Dream Goes to Die”: Changes in House Prices, Rents, and Incomes since 1960 by Region & Metro - Wolf Richter - The “San Francisco Housing Crisis,” as it’s called on a daily basis, is an extreme. But housing costs in major urban areas in the US have been eating up more and more of household incomes, as house prices and rents have soared and as incomes have crept up painfully slowly. In many cities, not just San Francisco, this condition is now called a “housing crisis” where families with median incomes can no longer afford to rent or buy adequate housing, or where too much of their income is spent on housing, with not enough left over for other things. They have no savings, they barely make it to the next paycheck, and they can’t help the local economy because housing saps their spending power.Just how out-of-whack this discrepancy between income versus rents and house prices has become over the years is depicted in a new study with long-term charts, released by the research department of Clever Real Estate. Based on Census data going back to 1960 for median household incomes, median gross rents per month, and median house prices, all adjusted for inflation, it shows that nationally, incomes since 1960 have risen just 29%, while rents have risen 72%, and house prices have soared 121%: But the national values above reflect everything thrown into one bucket, from the more affordable areas to the biggest housing bubbles. So we will separate them out by region and metro – and there are stunning differences. All values in the charts are indexed to 1960. The charts only include data for the depicted years: 1960, 1970, 1980, 1990, 2000, 2008, 2010, and 2017. The data for the years in between those years are not included. For example, if in one metro, the housing bust bottomed out in 2012, the low point falls between the data points of 2010 and 2017 and is not depicted. But you get the idea. In the West — a vast diverse region that spans Alaska, Arizona, California, Colorado, Hawaii, Montana, New Mexico, Oregon, Utah, Washington, and Wyoming — the median house price, adjusted for inflation, soared 195% since 1960. And rents, adjusted for inflation rose 72%. But household incomes adjusted for inflation ticked up only 26%.The growth rate (vertical axis) is on a different scale in the charts. For example at the chart above it tops out at 150% growth from 1960; in the chart below, it tops out at 200% growth from 1960; in one chart further down, it tops out at 550% (yup, San Francisco):
AIA: "Design services demand stalled in June, Project inquiry gains hit a 10-year low" Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment. From the AIA: Design services demand stalled in June, Project inquiry gains hit a 10-year low: Demand for design services at architecture firms decreased in June in comparison to the previous month, according to a new report today from The American Institute of Architects (AIA). AIA’s Architecture Billings Index (ABI) score for June was 49.1, which is down from 50.2 in May. Any score below 50 indicates a decrease in billings. Both the project inquiries index and the design contracts index continued to soften in June but remained positive. “With billings declining or flat for the last five months, it appears that we are settling in for a period of soft demand for design services,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “With the new design contracts score reaching a 10-month low and the project inquiries score hitting a 10-year low, work in the pipeline may start to get worked off, despite current robust backlogs.”
• Regional averages: South (51.9); West (49.3); Midwest (48.9); Northeast (46.1)
• Sector index breakdown: mixed practice (54.3); commercial/industrial (52.3); institutional (47.0); multi-family residential (46.3)
This graph shows the Architecture Billings Index since 1996. The index was at 49.1 in June, down from 50.2 in May. Anything below 50 indicates contraction in demand for architects' services.Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions. According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction. This index has been positive for 10 of the previous 12 months, suggesting some further increase in CRE investment in 2019 - but this is the weakest five month stretch since 2012.
Michigan Consumer Sentiment: Still Favorable in July - The July Preliminary came in at 98.4, down 0.2 from the June Final reading. Investing.com had forecast 98.6. Surveys of Consumers chief economist, Richard Curtin, makes the following comments: Consumer sentiment remained largely unchanged in early July from June, remaining at quite favorable levels since the start of 2017. Moreover, the variations in Sentiment Index have been remarkably small, ranging from 91.2 to 101.4 in the past 30 months. Perhaps the most interesting change in the July survey was in inflation expectations, with the year-ahead rate slightly lower and the longer term rate moving to the top of the narrow range it has traveled in the past few years. Given the heightened interest in Fed policy, it is of some interest to examine the relationship between consumers’ inflation expectations and the anticipated strength in the economy as well as prospective shifts in interest rates and unemployment. Inflation expectations were divided into three groups based on responses to the January to July 2019 surveys: those who expected a year-ahead inflation rate less than or equal to 0%, an inflation rate of 1% to 3%, and those who expected an inflation rate equal to or greater than 4% (see the chart). The Consumer Expectations Index falls as inflation expectations rise, signifying that consumers view higher inflation as a threat to economic growth. Higher inflation was related more frequently to rising interest rates and was associated with higher unemployment expectations. Consumers’ views appear to be more consistent with the stagflation thesis, which holds that inflation and unemployment move in the same direction. This thesis is more consistent with how consumers process and organize diverse bits of news about the economy. [More...] See the chart below for a long-term perspective on this widely watched indicator. Recessions and real GDP are included to help us evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.
Retail Sales: Up 0.43% in June, at 3.4% YoY - The Census Bureau's Advance Retail Sales Report for June was released this morning. Headline sales came in at 0.4% month-over-month to one decimal and was better than the Investing.com forecast of 0.1%. Core sales (ex Autos) came in at 0.35% MoM (to two decimals). Here is the introduction from today's report: Monthly retail sales estimates were revised on June 25, 2019 based on the results of the 2017 Annual Retail Trade Survey and the Service Annual Survey. Advance estimates of U.S. retail and food services sales for June 2019, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $519.9 billion, an increase of 0.4 percent (±0.5 percent)* from the previous month, and 3.4 percent (±0.7 percent) above June 2018. Total sales for the April 2019 through June 2019 period were up 3.4 percent (±0.5 percent) from the same period a year ago. The April 2019 to May 2019 percent change was revised from up 0.5 percent (±0.5 percent)* to up 0.4 percent (±0.2 percent). [view full report] The chart below is a log-scale snapshot of retail sales since the early 1990s. The two exponential regressions through the data help us to evaluate the long-term trend of this key economic indicator.
Retail Sales increased 0.4% in June --On a monthly basis, retail sales increased 0.4 percent from May to June (seasonally adjusted), and sales were up 3.4 percent from June 2018. From the Census Bureau report: Advance estimates of U.S. retail and food services sales for June 2019, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $519.9 billion,an increase of 0.4 percent from the previous month, and 3.4 percent above June 2018. … The April 2019 to May 2019 percent change was revised from up 0.5 percent to up 0.4 percent. This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).Retail sales ex-gasoline were up 0.7% in June. The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993. Retail and Food service sales, ex-gasoline, increased by 3.9% on a YoY basis. The increase in June was above expectations, however sales in April and May were revised down. Overall a solid report.
Retail Apocalypse- 12,000 Stores Are Forecasted To Close This Year - As the economy cycles down through summer, there is new, alarming data that shows retail store closings are accelerating.Coresight Research says there have already been 20% more store closings announced in the first six months of 2019 than in all of 2018. The research firm examined figures and retailers' earnings reports, found that more than 7,000 are expected to close this year with many locations already shut down.Bankrupted Payless ShoeSource closed its remaining stores last week, accounts for 37% of the closing this year.Coresight estimates closures could hit at least 12,000 stores by the end of 4Q19. The firm already tracked 5,864 closings in 2018, which included all Toys R Us, Kmart and Sears.The retail apocalypse reared its ugly head in 2017 when a record 8,139 store closures were reported.In a separate reported, noted by USA Today, UBS said 25% tariffs on $250 billion worth of Chinese products could jeopardize $40 billion of retail sales and puts 12,000 stores at risk of closing."The market does not realize how much brick & mortar retail is incrementally struggling and how new 25% tariffs could force widespread store closures," UBS analyst Jay Sole wrote in the May report. "We think the potential 25% tariffs on Chinese imports could accelerate pressure on these company's profit margins to the point where major store closures become a real possibility." It'll take several months for the new round of tariffs to filter through the economy, raise retail prices, force consumers to shop online or not at all, and then lead to a new wave of closings in 1H20. As for the economy, growth rates are indeed declining as an industrial slowdown is spread to other sectors. Here is Coresight's complete list of store closures so far for this year:
Nomads travel to America’s Walmarts to stock Amazon’s shelves - Chris Anderson moves through the Target clearance racks with cool efficiency, surveying the towers of Star Wars Lego sets andIncredibles action figures, sensing, as if by intuition, what would be profitable to sell on Amazon. Discontinued nail polish can be astonishingly lucrative, but not these colors. A dinosaur riding some sort of motorcycle? No way. But these Jurassic Park Jeeps look promising, and an Amazon app on his phone confirms that each could net a $6 profit after fees and shipping. He piles all 20 into his cart.It’s not a bad haul for a half-hour’s work, but it’s not great either. He consoles himself that he hit upon a trove of deeply discounted Kohl’s bras the day before as he left East Brunswick, New Jersey, on his way here to Edison. Home is still 300 miles away, in Tyrone, Pennsylvania, and there are plenty of stores between here and there.Anderson is an Amazon nomad, part of a small group of merchants who travel the backroads of America searching clearance aisles and dying chains for goods to sell on Amazon. Some live out of RVs and vans, moving from town to town, only stopping long enough to pick the stores clean and ship their wares to Amazon’s fulfillment centers. The majority of goods sold on Amazon are not sold by Amazon itself, but by more than 2 million merchants who use the company’s platform as their storefront and infrastructure. Some of these sellers make their own products, while others practice arbitrage, buying and reselling wares from other retailers. Amazon has made this easy to do, first by launching Fulfillment by Amazon, which allows sellers to send their goods to company warehouses and have Amazon handle storage and delivery, and then with an app that lets sellers scan goods to instantly check whether they’d be profitable to sell on the site. A few sellers, like Anderson, have figured out that the best way to find lucrative products is to be mobile, scouring remote stores and chasing hot-selling items from coast to coast.
Export Prices Tumble As China Exports Most Deflation Since 2007 -Following May's drop into deflation for both import and export prices, June data was expected to show further contraction as China's exported deflation washes across the global supply chain. The impact appears to even worse as both import (-0.9% MoM vs -0.6% MoM exp) and export (-0.7% MoM vs -).2% MoM exp) prices both missed dramatically.
- Import prices ex-fuels fell 0.3% m/m after falling 0.3% in May
- Import prices ex-petroleum fell 0.4% m/m after falling 0.3% in May
- Import prices ex-food and fuel fell 1.6% y/y in June
- Industrial supplies prices fell 3.3% after rising 0.5% in May
- Capital goods prices fell 0.2% m/m after falling 0.1% in May
- Auto prices rose 0.1% m/m after no change in May
- Consumer goods prices fell 0.1% m/m after no change in May
On a year-over-year basis, both import and export prices are deeper into deflation…. With China exporting the most deflation since Aug 2007... So much for the Trump-tariff-driven inflationary surge?
Recession Looms- Cass Freight Index Negative For 7th Month According to Cass, "Freight shipments signal economic contraction". The Economic Outlook from Freight’s Perspective is not promising.
- With the -5.3% drop in June following the -6.0% drop in May, we repeat our message from last month: the shipments index has gone from “warning of a potential slowdown” to “signaling an economic contraction.”
- May and June’s drops are significant enough to pose the question, “Will the Q2 ’19 GDP be negative?”
- We acknowledge that all of these negative percentages are against extremely tough comparisons; and the Cass Shipments Index has gone negative before without being followed by a negative GDP.
- The weakness in spot market pricing for many transportation services, especially trucking, is consistent with the negative Cass Shipments Index and, along with airfreight and railroad volume data, strengthens our concerns about the economy and the risk of ongoing trade policy disputes. Weakness in commodity prices and the decline in interest rates have joined the chorus of signals calling for an economic contraction.
- We are concerned about the severe declines in international airfreight volumes (especially in Asia) and the ongoing swoon in railroad volumes, especially in auto and building materials.
- We see the weakness in spot market pricing for transportation services, especially in trucking, as consistent with and a confirmation of the negative trend in the Cass Shipments Index.
- As volumes of chemical shipments have lost momentum, our concerns of the global slowdown spreading to the U.S., and the trade dispute reaching a ‘point of no return’ from an economic perspective, grow.
Boeing 737 Max ordered by Ryanair undergoes name change - A Boeing 737 Max due to be delivered to Ryanair has had the name Max dropped from the livery, further fuelling speculation that the manufacturer and airlines will seek to rebrand the troubled plane once it is given the all clear to fly again. Photos have emerged of a 737 Max in Ryanair colours outside Boeing’s manufacturing hub, with the designation 737-8200 – instead of 737 Max – on the nose. The 737-8200 is a type name for the aircraft that is used by aviation agencies.The Max aircraft remains grounded worldwide after two crashes in Indonesia and Ethiopia killed a total of 346 people. Boeing has yet to convince regulatorsthat software modifications are sufficient to ensure the plane’s safety.Ryanair has 135 of the 737 Max models on order, the first five of which are due for delivery in the autumn, once regulators have declared the plane safe. The airline’s fleet order is comprised entirely of a larger version of the Max 8, with 197 seats, which it has until now referred to in official Ryanair announcements as the 737 Max 200.Neither Ryanair nor Boeing has commented on nor confirmed the substitution of the 737-8200 for the better known Max, as seen on the photographs taken at Renton in Washington, US, and posted on social media by Woodys Aeroimages. In previous photos from the same source, new Ryanair 737 Max 200 planes from Boeing are shown with 737 Max on their noses. It is understood that what is painted on the plane is a matter for the airline rather than the manufacturer. According to sources reported in the Wall Street Journal, the Max plane is unlikely to return to the skies before 2020.
737 Max May Stay Grounded into 2020; Why Does Boeing CEO Muilenburg Still Have a Job? - Boeing is imposing yet more losses on carriers that were hapless enough to have purchased its 737 Max. Early on Sunday, United Airlines and American Airlines announced they were keeping Boeing 737 Max aircraft out of their flight schedules through early November. That’s two months later than their most recent plans. The Wall Street Journal swung into action and got more detail. Its take? That the scandal-plagued model may not fly until 2020. That would hit airlines that own the plane with lower capacity during the big volume holiday season. From the Journal:Boeing Co.’s 737 MAX planes are unlikely to be ready to carry passengers again until 2020 because of the time it will take to fix flight-control software and complete other steps, an increasing number of government and industry officials say….The situation remains fluid, no firm timeline has been established and Boeing still has to satisfy U.S. regulators that it has answered all outstanding safety questions. But under the latest scenario, the global MAX fleet is now anticipated to return to the air in January 2020, a full 12 months after the plane maker proposed its initial replacement of software eventually implicated in a pair of fatal crashes—one in October and one in March—according to some Federal Aviation Administration officials and pilot-union leaders….Boeing executives, FAA engineers and international aviation regulators have steadily expanded their safety analyses to cover a growing list of issues spanning everything from emergency recovery procedures to potentially suspect electronic components. Some of those assessments are further complicated because they also cover earlier 737 models. The article acknowledges that Boeing and the FAA are shooting for an earlier date but increasingly recognize that January is more realistic. And given all the missed deadlines, that supposedly conservative target may again prove to be optimistic.
Trump's tariffs trip up the all-American RV industry (Reuters) - Carrie Gray points to a stack of unwelcome mail on a conference table at the offices of Renegade RV, one of the leading U.S. manufacturers of high-end recreational vehicles. She’s buried in bad news from most of her about 350 suppliers. “We got letters from 75 percent of them demanding tariff-related price increases,” explains Gray, Renegade’s materials manager. About 85% of the recreational vehicles sold in the United States are built in and around Elkhart County, making it a popular stop for politicians to tout their visions for U.S. manufacturing – including President Donald Trump, who staged a rally here last May. And yet this uniquely American manufacturing sector has been caught in the crossfire of Trump’s trade war, according to interviews with industry insiders and economists, along with data showing a steep sales decline amid rising costs and consumer prices. The industry has taken hits from U.S. tariffs on steel and aluminum and other duties on scores of Chinese-made RV parts, from plumbing fixtures to electronic components to vinyl seat covers. Shipments of RVs to dealers have fallen 22% percent in the first five months of this year, compared to the same period last year, after slipping 4% in 2018, according to the Recreational Vehicle Industry Association. The RV industry’s woes illustrate how even the most “American” of manufacturers, the kind of industries Trump has vowed to protect, can be heavily exposed to tariffs in a world of globalized supply chains. Tariff-related price hikes have forced manufacturers to pass on some of the increased costs though higher RV prices, which in turn has contributed to slower sales. As dealers cut orders, many plants furloughed workers or reduced hours, including Renegade, which has reduced its headcount of 160 by about 10 workers since May at its two factories here.
US Industrial Production Slows In June Despite Jump In Auto Manufacturing - After May's modest rebound from a six-month downtrend, the plunge in global PMIs suggested that June US Industrial Production would decelerate and it did, printing unchanged from May to June.However, both the headline and manufacturing sector saw year-over-year growth slow... Under the hood:
- Utilities fell 3.6% in June after rising 2.4% in May (Fed says utility output fell on milder-than-usual temperatures that reduced the demand for air conditioning)
- Production of motor vehicles and parts rose 2.9% in June after rising 2.3%.
US Manufacturing rose 0.2% in May (its first MoM rise since Dec 2018) and June saw a better than expected 0.4% MoM rise but YoY manufacturing growth slowed to +0.4%... For the second quarter, factory production declined at an annual rate of 2.2% for the first back-to-back declines since 2016… Finally, notice the dramatic regime shift between US Industrial Production and the Dow Jones Industrial Stock Index. Until 1987 - when Greenspan unleashed the Fed Put - the stock average traded at around 18x the Industrial Production index. It now trades at 230x!! Intervention has consequences it seems.
Industrial Production Unchanged in June --From the Fed: Industrial Production and Capacity Utilization Industrial production was unchanged in June, as increases for both manufacturing and mining offset a decline for utilities. For the second quarter as a whole, industrial production declined at an annual rate of 1.2 percent, its second consecutive quarterly decrease. In June, manufacturing output advanced 0.4 percent. An increase of nearly 3 percent for motor vehicles and parts contributed significantly to the gain in factory production; excluding motor vehicles and parts, manufacturing output moved up 0.2 percent. The output of utilities fell 3.6 percent as milder-than-usual temperatures in June reduced the demand for air conditioning. The index for mining rose 0.2 percent. At 109.6 percent of its 2012 average, total industrial production was 1.3 percent higher in June than it was a year earlier. Capacity utilization for the industrial sector decreased 0.2 percentage point in June to 77.9 percent, a rate that is 1.9 percentage points below its long-run (1972–2018) average.This graph shows Capacity Utilization. This series is up 11.4 percentage points from the record low set in June 2009 (the series starts in 1967). Capacity utilization at 77.9% is 1.9% below the average from 1972 to 2017 and below the pre-recession level of 80.8% in December 2007. Note: y-axis doesn't start at zero to better show the change. Industrial ProductionThe second graph shows industrial production since 1967. Industrial production was unchanged in June at 109.2. This is 26% above the recession low, and 4.0% above the pre-recession peak. The change in industrial production and decrease in capacity utilization were below consensus.
NY Fed: Manufacturing "Business activity rebounded modestly in New York State" --From the NY Fed: Empire State Manufacturing Survey Manufacturing firms in New York State reported that business activity grew modestly in July.After declining substantially last month, the general business conditions index returned to positive territory, rising thirteen points to 4.3.After falling below zero last month, the index for number of employees slid further, dropping six points to -9.6, pointing to a decline in employment levels. The average workweek index, at 3.8, signaled somewhat longer workweeks. This was slightly above the consensus forecast.
Philly Fed Mfg "Current Manufacturing Indicators Suggest Continued Growth in July" - From the Philly Fed: July 2019 Manufacturing Business Outlook Survey: Manufacturing conditions in the region showed improvement this month, according to firms responding to the July Manufacturing Business Outlook Survey. The survey’s indexes for general activity, new orders, shipments, and employment remained positive and increased from their June readings. Most of the survey’s future activity indexes increased, suggesting improved optimism about growth for the next six months. The diffusion index for current general activity more than recovered from its decline last month, increasing from 0.3 in June to 21.8 this month. ... The firms reported increases in manufacturing employment and longer workweeks this month. Over 36 percent of the firms reported higher employment, compared with 25 percent last month. Only 6 percent reported decreases in employment this month. The current employment index increased 15 points to 30.0, its highest reading since October 2017. This was well above the consensus forecast. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
Weekly Initial Unemployment Claims increased to 216,000 - The DOL reported: In the week ending July 13, the advance figure for seasonally adjusted initial claims was 216,000, an increase of 8,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 209,000 to 208,000. The 4-week moving average was 218,750, a decrease of 250 from the previous week's revised average. The previous week's average was revised down by 250 from 219,250 to 219,000. The previous week was revised down. The following graph shows the 4-week moving average of weekly claims since 1971.
BLS: June Unemployment rates at New Series Lows in Alabama, Arkansas, New Jersey, and Texas - From the BLS: Regional and State Employment and Unemployment Summary: Unemployment rates were lower in June in 6 states and stable in 44 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Three states had jobless rate decreases from a year earlier and 47 states and the District had little or no change. The national unemployment rate, 3.7 percent, was little changed from May but was 0.3 percentage point lower than in June 2018. .. Vermont had the lowest unemployment rate in June, 2.1 percent. The rates in Alabama (3.5 percent), Arkansas (3.5 percent), New Jersey (3.5 percent), and Texas (3.4 percent) set new series lows. (All state series begin in 1976.) Alaska had the highest jobless rate, 6.4 percent.This graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 1976. At the worst of the great recession, there were 11 states with an unemployment rate at or above 11% (red). Currently only one state, Alaska, has an unemployment rate at or above 6% (dark blue). Note that the series low for Alaska is above 6%. Two states and the D.C. have unemployment rates above 5%; Alaska and Mississippi. A total of nine states are a series low: Alabama, Arkansas, Iowa, Maine, New Jersey, North Dakota, Pennsylvania, Texas and Vermont.
No question, the unemployment rate paints an incomplete picture…and yet… - Jared Bernstein - It’s long been understood by anyone trying to assess the labor market that the unemployment rate is, by itself, not up to the task. Most importantly, it leaves out those not looking for work, but it’s also not adjusted for demographic change, nor does it factor in those who are working fewer hours than they’d like. It combines racial groups with persistently different levels of unemployment. At times like now, these shortcomings can lead this premiere indicator to underestimate the extent of slack in the job market.This WSJ article from yesterday–“For decoding labor market, unemployment rate may not do the job”–is but the latest salvo in this healthy discussion about the need for a dashboard, not a single dial.And yet, most of us, when trying to provide a quick overview of economic conditions, still cite the top-line rate, a practice I’d like to defend here, with at least moderate conviction, based on the correlation matrix below. The data run from 1994 through now, and the variables are the u-6 underemployment rate, the prime-age employment rate, the Richmond Fed’s non-employment index, both with and w/out those involuntary part-timers, and the black unemployment rate. As you see, if we’re comparing levels, the unemployment rate correlates highly–close to unity in most cases–with the other variables in the table. Even the non-employment index, “an alternative to the standard unemployment rate that includes all non-employed individuals and accounts for persistent differences in their labor market attachment,” correlates with unemployment at 0.99. Of course, we don’t just look at levels. We also pay a lot of attention to changes in these variables, and, as is always the case, change correlations are a lot lower than level correlations. We also see some interesting variation. When it comes to both prime-age epops and the black unemployment rate, changes carry different information relative to the topline jobless rate than do the levels. For African-Americans, this is due to their “high-Beta” relationship with the overall rate: a one-point change in unemployment correlates with a 1.5 change in the black rate. That’s a great elasticity to tap in high-pressure labor markets, and a hugely negative one in recessions.
The Top 25 Metro Areas Make Up Half Of US GDP - The top 25 metro areas make up half of the U.S. GDP. The other 359 smaller cities account for a little over 38 percent of national GDP. As Statista's Sarah Feldman points out, it only takes 19 of the biggest powerhouse cities to make up the same percent of total GDP as the other 359 cites. The rural-urban divide gets a lot of press, while the divide between major metropolises and smaller ones often gets overlooked. These smaller cities often face the struggles of aging populations, young workers leaving to coastal cities, and shrinking economies, once bolstered by manufacturing jobs and industries. These U.S. cities, like Cleveland, Columbus, and Buffalo have been struggling to jump start economic development.The division between bigger cities and smaller cities has a geographic component to it too. Over half of the top 25 economic powerhouses are located on one of the coasts, further playing into the divide between coastal metro areas and the interior of the country.
Abigail Disney visited Disneyland undercover. She is ‘livid’ about what she saw CNN - In an interview with Yahoo this week, Abigail Disney said she decided to check out Disneyland's worker conditions after a worker sent her a Facebook message. She said every employee delivered a similar message to her: "I don't know how I can maintain this face of joy and warmth when I have to go home and forage for food in other people's garbage."After the visit, she said she was "so livid" that the company didn't respect its workers enough.The Disney heiress, who is also a filmmaker and activist, said Disney CEO Bob Iger needs to fix the huge wage gap between his pay and that of an average worker at the company."Bob needs to understand that he is an employee just the same as the people scrubbing gum off the sidewalk are employees, and they're entitled to the same dignity and human rights that he is," Abigail Disney said.She said she emailed Iger about her concerns recently but received no response."You're a great CEO by any measure, perhaps even the greatest CEO in the country right now," she wrote Iger. "You know, your legacy is that you're a great manager. And if I were you, I would want something better than that. I would want to be known as the guy who led to a better place, because that is what you have the power to do." Iger earned $66 million last year. The median salary of a Disney employee is $46,127, the company reported. In a statement to CNN Business, the company responded to Abigail Disney's criticism by pointing out it pays workers above the federal minimum wage, with a starting hourly wage of $15 at California's Disneyland. The company has committed $150 million to its Disney Aspire program that pays for workers to earn a college, high school or vocational degree.
Protests erupt in Puerto Rico after leaked texts from governor reveal conspiracy to loot island - Mass protests have erupted throughout the island of Puerto Rico demanding the resignation of Governor Ricardo Rosselló after 889 pages of text messages from the governor's phone were leaked to the public by the Center for Investigative Journalism. Police in riot gear have been firing tear gas, pepper spray, and rubber bullets at thousands of protesters outside of governor Ricardo Rosselló’s mansion, La Fortaleza, and throughout San Juan as the public outcry grows more intense. Dozens have been arrested during several days of protests. The leaked messages from the governor’s chat group graphically confirm what everyone on the island already knows: that the Rosselló government conspired to downplay the death toll resulting from Hurricane Maria in September 2017, and used the catastrophe to push through long sought after privatization schemes and austerity measures to benefit Wall Street at the expense of the working class. In one exchange with Sobrino Vega, the former chief financial officer of the island and the governor’s representative to the Financial Oversight Board, Rosselló asks about the budget for forensic pathologists. Vega responded with a joke about the growing pile of dead bodies at the morgue in the aftermath of Hurricane Maria, writing, "Now that we are on the subject, don't we have some cadavers to feed our crows?"Aside from the blatant corruption, the exchanges are also noteworthy for their vulgar and violent character. In another exchange with Vega the two made jokes about shooting San Juan Mayor Yulín Cruz with Vega writing: "I am salivating to shoot her.""You'd be doing me a grand favor," Governor Rosselló responded. At one point, the governor writes that Yulín Cruz must be "off her meds" by deciding to run against him.
Divorce Is Destroying the Finances of Americans Over 50 - In one sense, Amazon.com Inc. founder Jeff Bezos and his ex-wife,MacKenzie Bezos, are nothing special. By finalizing their divorce this month, they join the millions of Americans now splitting up in middle age. The rate of divorce after age 50 has doubled in the U.S. since 1990.The billionaire exes are unique, though, in escaping divorce with their finances relatively unscathed. He’s still the world’s richest person, worth $123.1 billion, and she has a $39.7 billion fortune, according to theBloomberg Billionaires Index. Amazon shares climbed 19% since they announced the end of their 25-year marriage in January. There are few things more devastating than divorce. Even the very wealthy can find it financially draining, emotionally harrowing and just plain messy. Academic studies document serious health effects. A 2009 papernoted that recently separated or divorced adults have higher resting blood pressure. Last year, a German study found “divorce led to considerable weight gain over time, especially in men.”Splitting up after age 50 -- often called “gray divorce” -- may be particularly hazardous to your emotional and financial health, far worse than doing so at younger ages. A wave of new research is quantifying the damage.“It’s a grim picture,” said Susan Brown, a Bowling Green State University sociology professor and co-director of the National Center for Family & Marriage Research, which has generated many of the new findings. According to one study, people who’ve gone through a gray divorce report higher levels of depression than those whose spouses died.The economic effects are even more stark. As more and more Baby Boomers end marriages, sometimes for the second or third time, they’re wrecking their finances on an unprecedented scale.
Here’s why so many Americans can’t come up with $400 to pay for an unexpected expense - The statistic is used to show how unequal things have become in the U.S.: Some 40% of Americans would struggle to come up with even $400 to pay for an unexpected bill. If — or, more likely, when — they’re confronted with such an expense, they’d probably have to sell something or go into debt. The now oft-cited figure comes from the Federal Reserve’s 2018 Survey of Household Economics and Decision Making, in which some 12,000 households were asked about their financial well-being. Just how have so many Americans become so short on cash? Anqi Chen at the Center for Retirement Research at Boston College recently tried to answer that question. “If that many people can’t cover a very small, unexpected expense, how can we expect them to save for retirement?” Chen said, explaining the center’s interest in the bleak finding. At first, only more questions emerged. Mainly, there appeared to be a gulf between what people said they could afford and what they actually could. Two surveys — both administered by the Federal Reserve — seemed to produce conflicting results.The Survey of Consumer Finances, which asks respondents for their bank account balance, found the share of households who have less than $400 in their checking or savings accounts was closer to 20%.For some reason, many people who had $400 on hand still said they’d struggle to come up with the money. “We were scratching our heads,” Chen said.Ultimately, the researchers landed on a plausible explanation for both the discrepancy and why so many Americans are living paycheck to paycheck — debt. Many of the people who have $400 or more available to them likely have already earmarked that money for another obligation (and so, in other words, the cash isn’t really available to them). Frequently, Chen said, it’s an upcoming credit card bill tying up the money. Indeed, after the researchers at Boston College subtracted people’s outstanding credit card debt from their account balances, the disparity between the two surveys all but closed.
Their Family Bought Land One Generation After Slavery. The Reels Brothers Spent Eight Years in Jail for Refusing to Leave It. - Many assume that not having a will keeps land in the family. In reality, it jeopardizes ownership. David Dietrich, a former co-chair of the American Bar Association’s Property Preservation Task Force, has called heirs’ property “the worst problem you never heard of.” The U.S. Department of Agriculture has recognized it as “the leading cause of Black involuntary land loss.” Heirs’ property is estimated to make up more than a third of Southern black-owned land — 3.5 million acres, worth more than $28 billion. These landowners are vulnerable to laws and loopholes that allow speculators and developers to acquire their property. Black families watch as their land is auctioned on courthouse steps or forced into a sale against their will. Between 1910 and 1997, African Americans lost about 90% of their farmland. This problem is a major contributor to America’s racial wealth gap; the median wealth among black families is about a tenth that of white families. Now, as reparations have become a subject of national debate, the issue of black land loss is receiving renewed attention. A group of economists and statisticians recently calculated that, since 1910, black families have been stripped of hundreds of billions of dollars because of lost land. Nathan Rosenberg, a lawyer and a researcher in the group, told me, “If you want to understand wealth and inequality in this country, you have to understand black land loss.” By the time of Melvin and Licurtis’ hearing in 2011, they had spent decades fighting to keep the waterfront on Silver Dollar Road. They’d been warned that they would go to jail if they didn’t comply with a court order to stay off the land, and they felt betrayed by the laws that had allowed it to be taken from them. They had been baptized in that water. They expected to argue their case in court that day. Instead, the judge ordered them sent to jail, for civil contempt. The brothers hadn’t been charged with a crime or given a jury trial. Still, they believed so strongly in their right to the property that they spent the next eight years fighting the case from jail, becoming two of the longest-serving inmates for civil contempt in U.S. history.
I-Team: Florida DMV sells your personal information to private companies, marketing firms - WFTS — A local woman is blaming the state government for an onslaught of robocalls and direct mail offers – accusations that come as the I-Team uncovered the DMV makes millions by selling Florida drivers personal information to outside companies, including marketing firms. I-Team Investigator Adam Walser obtained records showing the state sold information on Florida drivers and ID cardholders to more than 30 private companies, including marketing firms, bill collectors, insurance companies and data brokers in the business of reselling information. The Florida Department of Highway Safety and Motor Vehicles raked in more than $77 million for driver and ID cardholder information sales in fiscal 2017. The I-Team wanted to know how much of that money came from marketing firms, but the agency in charge of driver information estimated it would take 154 hours of research and cost nearly $3,000 for the state to give taxpayers an answer. A Lakeland woman and her sister told the I-Team they blame DMV sales for an onslaught of recent robocalls and direct mail offers.Tonia Batson moved from Idaho to Florida last year to live with her twin sister Sonia Arvin, who is now her legal guardian because Batson has an intellectual disability. “We take her to get an ID because she’s a Medicaid patient,” said Arvin.Days later, Arvin said Batson started receiving direct mail offers for lawn service, credit cards, cell phones and insurance. She also now receives constant robocalls and salespeople have even started showing up at her door. “I really don’t understand about credit cards or checkbooks or nothing,” said Batson.
Social Media, Not Video Games, Linked To Teen Depression - The use of social media has been linked to an increase in depressive symptoms in teenagers, according to researchers at Montreal's Sainte-Justine Hospital, according to the CBC. In a new study led by University of Montreal psychiatry professor Patricia Conrod, adolescents were studied over a four-year period to investigate the relationship between depression and various forms of screen time. "What we found over and over was that the effects of social media were much larger than any of the other effects for the other types of digital screen time," said Conrod. The researchers studied the behaviour of over 3,800 young people from 2012 until 2018. They recruited adolescents from 31 Montreal schools and followed their behaviour from Grade 7 until Grade 11.The teenagers self-reported the number of hours per week that they consumed social media (such as Facebook and Instagram), video games and television.Conrod and her team found an increase in depressive symptoms when the adolescents were consuming social media and television. –CBC The study was published in the JAMA Pediatrics journal on Monday.
Alaska governor cuts $400 million from education, social services - The University of Alaska (UA) faces an unprecedented budget crisis, after governor Mike Dunleavy used a line-item veto last month to slash its state funding by $130 million, or 41 percent. Dunleavy issued 182 line-item vetoes on June 28 in order to defund $444 million from the budget passed by the Alaskan state legislature. These cuts took effect at the beginning of July. In addition to the cuts at UA, these vetoes will reduce funding for homeless shelters, senior benefits and senior care, Medicaid and other healthcare funding, the Alaska State Council on the Arts, and basic emergency funding. A special cut was also made to the state’s appellate court system, essentially as punishment for a state Supreme Court ruling allowing abortion to be covered by Medicaid. The legislature failed to override the vetoes and reverse the cuts by the deadline, which passed last Friday at midnight. The absence of a significant number of Republican lawmakers, who refused to take their seats in the Capitol building and instead met separately at a middle school in suburban Anchorage, made it impossible for the legislature to achieve the two-thirds majority required to overturn a veto. In response to these imminent cuts, the University of Alaska has frozen hiring and sent furlough notices to 2,500 employees, including faculty and staff, set to last for 10 days. Should the cuts not be reversed, the university is expecting to lay off about 700 people, eliminate 40 out of its 105 degree programs, and possibly close a campus. The university expects to be able to teach about 3,000 fewer students, almost 10 percent of its current student body, which would in turn result in a further income loss from in the form of tuition. The university “cannot absorb an additional, substantial reduction in state general funds without abruptly halting numerous student career pathways midstream, eliminating services or shutting down community campuses or universities,” UA president Jim Johnsen said. The University of Alaska flagship campus in Fairbanks, which is less than 200 miles south of the Arctic Circle, is home to the International Arctic Research Center. The cuts could jeopardize the ability of the Center to pay for its operations, threatening research on the effects of climate change on the Arctic involving the collaboration of researchers from the United States and Japan.
Closure of Detroit’s Marygrove College will worsen teacher shortage crisis --Marygrove College, a private Catholic college in Detroit which primarily offers advanced teacher training, has announced that it will terminate all graduate programs by this coming December. The school had offered unique Master of Arts programs with concentrations in autism spectrum disorders, curriculum assessment, and reading and literacy K–6. Two years ago, the school ended its undergraduate programs. Officials have cited lack of enrollment as the reason for the closure. Founded in 1905 by the Immaculate Heart of Mary sisters in Monroe, Michigan, the school moved to its current 53-acre Detroit location in 1927. At present, 300 students and 50 faculty and staff will be affected by the closure. A spokesman for the school is claiming the fall semester will be devoted to placing students at other schools so they can complete their education. The announcement comes as education departments at universities in Michigan and across the country are shrinking. Fewer students are opting for education as a career, and a high percentage of those who become teachers leave the profession within three years.
Woman Shocked She Can't Get A Business Loan After Borrowing $500,000 To Learn Acupuncture - More student loan borrowers are now carrying six-figure balances, according to CNBC. A recent article highlighted a woman named Elisha Bokman, who carries a student loan balance of nearly half a million dollars. Even better is the fact that her massive debt load is a result of getting a doctorate degree in naturopathic medicine and master’s in acupuncture from Bastyr University. Bokman now owes $499,322.69 as a result. Instead of taking responsibility, she now blames the student debt for her divorce ("He felt like he couldn’t live his life or do the things he wanted to do") and was stunned that nobody wanted to lend her more money to open her own acupuncture practice after already being extended nearly $500,000 in credit to get her "doctorate" degree.Exasperated that there was no more free money for her to live her dreams, Bokman commented: “It really effects the remainder of your life. There’s no o The article notes that the average graduate now leaves school with $30,000 in student debt, which is up from $10,000 in the 1990s. However balances like Bokman's are becoming more common.About 178,000 graduate students owed more than $100,000 during the 2015–2016 academic year, up from 51,000 in 2003-2004.In the first quarter of 2019, more than 6% of all borrowers owed more than $100,000, which is up from 5.4% in 2017.Rebecca Grable, who works as a pharmacy manager at Walgreens, borrowed more than $310,000 to study at the University of Oklahoma and said she was denied by more than 11 banks when she tried to buy a car a few years ago.She said: “I feel like I’m stuck under it. I just never imagined being a professional who still lives paycheck to paycheck.”
Healthcare Triage: Does Better Education Mean Better Health? – Dr Aaron Carroll - Many, many studies have associated better and more education with better health outcomes? But which way does the causality go? Do people attain more education because they’re healthy? Or maybe those who are in an economic position to attain education also tend to be able to afford good healthcare? We’re here to sort out the studies. Does Better Education Mean Better Health? – YouTube This video was adapted from a column Austin wrote for the Upshot. Links to sources can be found there.]
Another Echo of the Fall of the House of AHERF: Hahnemann University Hospital to Close Its Doors, Stranding Patients, Leaving Trainees without an Educational Site, and Leaving Staff and Health Care Professionals Unemployed - The impending closure of a big teaching hospital in Philadelphia did not get much national attention, but should have. On June 26, 2019, the Philadelphia Inquirer reported: Hahnemann University Hospital will close in early September, with the wind-down of services at the 496-bed facility starting immediately, hospital officials said Wednesday. Officials representing American Academic Health System LLC, which bought Hahnemann and St. Christopher’s Hospital for Children early last year for $170 million, said the closing 'on or about Sept. 6' would be orderly. The closure would likely have big impacts on health care and medical education in Philadelphia, and on health care professionals and other hospital workers. Oddly enough, I could not find much more in the media about projected impacts on patients. A July 2 Philadelphia Inquirer article stated Hahnemann University Hospital’s pending closure and immediate move to turn away critically ill emergency patients threatens a safety net that has served close to 150 emergency room patients a day — many of them poor minorities who rely on the hospital for even primary care. Close to half of the people admitted to Hahnemann were on Medicaid and two-thirds are black or Latino, according to an Inquirer analysis of state inpatient billing data. The plight of the hospital's current house staff got a bit more attention. An Inquirer article on July 3, stated, The impending closure of Hahnemann University Hospital is forcing about 570 residents who work at the Center City institution to find a new place to continue their training. Also, Hahnemann’s closure is causing 'the largest orphaning of medical residents in the history of the United States,' Drexel University said in a Philadelphia Court of Common Pleas lawsuit against Hahnemann and its corporate parents. Drexel handles the educational side of Hahnemann’s residency programs. And then there were the other employees of the hospital to think about. An NBC10 Philadelphia article on June 26 included, The closure would leave around 800 union nurses, said the union, which represents around 8,500 nurses across the state. A major teaching hospital will close, abandoning many poor and vulnerable patients, orphaning 570 house-staff and leaving about 800 nurses and about 1700 other staff unemployed, and the national media take no notice? The numbness is striking.
Largest U.S. drug companies flooded country with 76 billion opioid pills, DEA data shows - America’s largest drug companies saturated the country with 76 billion oxycodone and hydrocodone pain pills from 2006 through 2012 as the nation’s deadliest drug epidemic spun out of control, according to previously undisclosed company data released as part of the largest civil action in U.S. history. The information comes from a database maintained by the Drug Enforcement Administration that tracks the path of every single pain pill sold in the United States — from manufacturers and distributors to pharmacies in every town and city. The data provides an unprecedented look at the surge of legal pain pills that fueled the prescription opioid epidemic, which has resulted in nearly 100,000 deaths from 2006 through 2012.. Just six companies distributed 75 percent of the pills during this period: McKesson Corp., Walgreens, Cardinal Health, AmerisourceBergen, CVS and Walmart, according to an analysis of the database by The Washington Post. Three companies manufactured 88 percent of the opioids: SpecGx, a subsidiary of Mallinckrodt; Actavis Pharma; and Par Pharmaceutical, a subsidiary of Endo Pharmaceuticals. Purdue Pharma, which the plaintiffs allege sparked the epidemic in the 1990s with its introduction of OxyContin, its version of oxycodone, was ranked fourth among manufacturers with about 3 percent of the market. The volume of the pills handled by the companies skyrocketed as the epidemic surged, increasing about 51 percent from 8.4 billion in 2006 to 12.6 billion in 2012. By contrast, doses of morphine, a well-known treatment for severe pain, averaged slightly more than 500 million a year during the period. Those 10 companies along with about a dozen others are now being sued in federal court in Cleveland by nearly 2,000 cities, towns and counties alleging that they conspired to flood the nation with opioids. The companies, in turn, have blamed the epidemic on overprescribing by doctors and pharmacies and on customers who abused the drugs. The companies say they were working to supply the needs of patients with legitimate prescriptions desperate for pain relief.
A Bacterial Invasion- East-Coast-ers Face Flesh-Eating Disease Epidemic In 2019 - For years, flesh-eating bacterial infections were so rare in the U.S. that even a single case would make national headlines. But here in 2019 the news is telling us that we are seeing flesh-eating infections “at a rate much higher than in previous years”, and this outbreak really seems to have escalated dramatically over the last couple of months. In fact, I found so many cases as I was doing research for this article that I had to simply stop reading at one point or I would have never gotten this article done in time. So in this article I will be sharing quite a few examples with you, but it is far from an exhaustive list. Let’s start with a Tennessee man that was just killed by flesh-eating bacteria after a trip to the Florida panhandle. This is what his daughter had to say about his death…“About 4:00 a.m. Saturday morning, 12 hours after we were in the water, he woke up with a fever, chills and some cramping. … They got to the hospital in Memphis around 8 p.m.,” Wiygul said in the post. “They took him back immediately. As they were helping him get changed into his hospital gown they saw this terribly swollen black spot on his back that was not there before.”The man’s condition worsened over the next several hours. His immune system had been weakened by a bout with cancer, the daughter said, and he died Sunday afternoon.That is how fast flesh-eating disease can kill you. If it is not treated immediately, there is a good chance you will die.And it doesn’t take much. One woman that had just moved to Florida recently died after getting a small cut on her leg “while walking along the coast on Anna Maria Island”… A woman died two weeks after cutting her leg while walking along the coast on Anna Maria Island, Florida, according to her family. Her leg became infected with necrotizing fasciitis, commonly called flesh-eating bacteria. And one man recently contracted flesh-eating disease in Florida without even going in the water… Tyler King was at work in Santa Rosa Beach, Florida, last week, when he noticed his left bicep starting to swell. He tried taking Benadryl but just a few hours later his arm had nearly tripled in size. He rushed to the emergency room. “If I had gone to sleep … and had woke up with it at the rate it was spreading, I might not have an arm right now.”
Ebola outbreak in Congo declared a global health emergency — The deadly Ebola outbreak in Congo is now an international health emergency, the World Health Organization announced Wednesday after a case was confirmed in a city of 2 million people . A WHO expert committee declined on three previous occasions to advise the United Nations health agency to make the declaration for this outbreak, even though other experts say it has long met the required conditions. More than 1,600 people have died since August in the second-deadliest Ebola outbreak in history, which is unfolding in a region described as a war zone. A declaration of a global health emergency often brings greater international attention and aid, along with concerns that nervous governments might overreact with border closures. The declaration comes days after a single case was confirmed in Goma, a major regional crossroads in northeastern Congo on the Rwandan border, with an international airport. Also, a sick Congolese fish trader traveled to Uganda and back while symptomatic — and later died of Ebola. While the risk of regional spread remains high, the risk outside the region remains low, WHO chief Tedros Adhanom Ghebreyesus said after the announcement in Geneva..Those working in the field say the outbreak is clearly taking a turn for the worse despite advances that include the widespread use of an experimental but effective Ebola vaccine.
New Research Shows Malaria Can Spread In Cooler Climates - For nearly a century, scientists thought that malaria could only spread in places where it is really hot. That's because malaria is spread by a tiny parasite that infects mosquitoes, which then infect humans — and this parasite loves warm weather. In warmer climates, the parasite grows quickly inside the mosquito's body. But in cooler climates, the parasite develops so slowly that the mosquito will die before the it is fully grown.At least that was the prevailing understanding. New research suggests parasites don't mind the cold as much as scientists thought.It appears that parasites can thrive in slightly cooler temperatures that were once believed to be inhospitable for them. This means that slightly warmer weather in more temperate regions could prompt parasites to reach their full potential—a situation that will put thousands or more people in danger of contracting malaria. Not only will rising temperatures spur mosquitoes to move to new areas that were formally too cold to inhabit, hotter weather will also nurture the growth of the disease-carrying parasites that live inside those mosquitos. "Our results show that not only is it possible for the mosquito to become infectious with malaria parasites at cool temperatures, but that it happens considerably faster than has been previously thought," said Jessica Waite, a senior scientist at Penn State and a co-author of the study with Matthew Thomas, professor and Huck scholar in ecological entomology at Penn State. Their findings could help predict the spread of malaria in cooler climates. The paper, which also included researchers from the University of Exeter, appears in the journal Biology Letters.
Ticks Spread Plenty More for You to Worry About Beyond Lyme Disease - When it comes to problems caused by ticks, Lyme disease hogs a lot of the limelight. But various tick species carry and transmit a collection of other pathogens, some of which cause serious, even fatal, conditions. In fact, the number of tick-borne disease cases is on the rise in the U.S. The range where various species of ticks live in North America may be expanding due to climate change. Researchers continue to discover new pathogens that live in ticks. And new, invasive tick species keep turning up. Certain very small species of bacteria that can cause human diseases, such as rickettsia, ehrlichia and anaplasma, live in ticks. Ticks ingest these bacteria when they drink animals' blood. Then when the ticks take a subsequent blood meal, they pass the bacteria along to the next animal or person they feed on. Probably the most well known of these bacterial diseases is Rocky Mountain spotted fever, the most frequently reported rickettsial disease in the U.S., with about 6,000 cases each year. The number of diagnoses seems to be increasing nationwide, especially among Native Americans, probably due to exposure on reservations to free-roaming dogs that can carry ticks. When people get sick with Rocky Mountain spotted fever, they usually come to a clinic with three things: fever, rash and history of tick bite. They may also report severe headache, chills and muscle pains, and gastrointestinal symptoms such as abdominal pain and diarrhea. A skin rash is usually present after a few days, but not always. Mental confusion, coma and death can occur in severe cases. Untreated, the mortality rate is about 20%; and even with treatment, 4% of those infected die. Ehrlichiosis is another bacterial disease transmitted from ticks to people. In the U.S. it's most commonly caused by Ehrlichia chaffeensis bacteria, carried by lone star ticks which are common in the eastern U.S. Ehrlichia bacteria infect a type of blood cell called leukocytes. Human monocytic ehrlichiosis occurs mostly in the southern and south-central U.S.; 1,642 cases were reported to the CDC in 2017. Ehrlichiosis patients usually have fever, headache, muscle aches and a progressive low white blood cell count. As opposed to Rocky Mountain spotted fever, people get a rash only about 20% to 40% of the time. Doctors usually treat ehrlichiosis with doxycycline. Another tick-borne bacterial disease to worry about is human granulocytic anaplasmosis. In human granulocytic anaplasmosis, Anaplasma phagocytophilum bacteria infects a type of white blood cell called granulocytes. It mostly occurs in the upper midwestern and northeastern U.S., and the incidence is increasing, with 5,762 cases of human granulocytic anaplasmosis reported to the CDC in 2017. Symptoms include fever, headache, muscle aches and progressive low white blood cell count. It's the deer tick Ixodes scapularis — famously also responsible for Lyme disease — that transmits the Anaplasma bacteria to humans. There's the unlucky chance that a bite from a deer tick could infect you with both diseases.
House orders Pentagon to review if it exposed Americans to weaponised ticks - The US House of Representatives has called for an investigation into whether the spread of Lyme disease had its roots in a Pentagon experiment in weaponising ticks. The House approved an amendment proposed by a Republican congressman from New Jersey, Chris Smith, instructing the defence department’s inspector general to conduct a review of whether the US “experimented with ticks and other insects regarding use as a biological weapon between the years of 1950 and 1975”.The review would have to assess the scope of the experiment and “whether any ticks or insects used in such experiment were released outside of any laboratory by accident or experiment design”. The amendment was approved by a voice vote in the House and added to a defence spending bill, but the bill still has to be reconciled with a Senate version. Smith said the amendment was inspired by “a number of books and articles suggesting that significant research had been done at US government facilities including Fort Detrick, Maryland, and Plum Island, New York, to turn ticks and other insects into bioweapons”. A new book published in May by a Stanford University science writer and former Lyme sufferer, Kris Newby, has raised questions about the origins of the disease, which affects 400,000 Americans each year. Bitten: The Secret History of Lyme Disease and Biological Weapons, cites the Swiss-born discoverer of the Lyme pathogen, Willy Burgdorfer, as saying that the Lyme epidemic was a military experiment that had gone wrong. Burgdorfer, who died in 2014, worked as a bioweapons researcher for the US military and said he was tasked with breeding fleas, ticks, mosquitoes and other blood-sucking insects, and infecting them with pathogens that cause human diseases. According to the book, there were programs to drop “weaponised” ticks and other bugs from the air, and that uninfected bugs were released in residential areas in the US to trace how they spread. It suggests that such a scheme could have gone awry and led to the eruption of Lyme disease in the US in the 1960s.
Fireflies’ Glow Could Soon Be Extinguished by Human Actions - In the Midwest, fireflies are dying off. But the die-offs aren't just limited to fireflies — or to the American heartland. As anyone who's been paying attention to the news this summer knows, species across the globe are taking a nosedive toward extinction. The United Nations report on biodiversity that came out in May is just the latest assessment to warn that the health of our ecosystems is "deteriorating more rapidly than ever." Humans are largely to blame. By spraying toxic pesticides, polluting our air and water, degrading the landscape, and emitting ever more carbon, we've essentially captured nature in a big glass Mason jar, screwed the lid tight, and neglected to punch holes in the top. According to the UN report, these unsustainable actions are causing nature to decline at unprecedented rates and accelerating the rate of species' extinction. Around 1 million animal and plant species — more than ever before in human history — are now threatened with extinction, many within decades. Scientists say that the estimated 2,000 species of fireflies have been declining for years. Losing these glowing creatures, also known as "lightning bugs" in some parts of the U.S., robs future generations of one of the simplest and most pleasurable joys of childhood. It also robs doctors and researchers of a valuable diagnostic tool. By injecting chemicals found in a firefly's tail into human cells, researchers can detect diseases like cancer and muscular dystrophy. On a broader scale, losing plant and animal species at an accelerated rate threatens "the very foundations of our economies, livelihoods, food security, health and quality of life worldwide," warn the UN researchers. Up to $577 billion in annual global crops are at risk from pollinator loss alone.
US Beekeepers Lost 40% Of Honeybee Colonies Last Year, UMD-Led Survey Finds - Recent budget cuts by the Trump Administration slashed funding for the US Department of Agriculture's annual Honey Bee Colonies report that has recently detailed a collapse in the bee population across the nation. Now researchers will be observing a new study, one that hasn't been affected by spending cuts, shows beekeepers lost 40.7% of their bee colonies from April 2018 to April 2019. The nationwide survey administered by the University of Maryland-led nonprofit Bee Informed Partnership warns of declining honey bee populations, could soon have an impact on food crops because these pollinating insects play a significant role in the pollination of plants. Survey results reveal the annual loss of 40.7% honey bees, a marginal increase over the yearly average of 38.7%. The study noted that the winter losses were the highest since the survey began 13 years ago. "These results are very concerning, as high winter losses hit an industry already suffering from a decade of high winter losses," said Dennis vanEngelsdorp, associate professor of entomology at the University of Maryland and president for the Bee Informed Partnership. The survey asked more than 4,700 beekeepers managing 320,000 colonies from all 50 states and the District of Columbia, represents about 12% of the nation's estimated 2.69 million managed colonies. One of the most significant concerns respondents had about the winter colony losses is varroa mites, an external parasitic mite that attacks and feeds on the colony. "We are increasingly concerned about varroa mites and the viruses they spread, said vanEngelsdorp. "Last year, many beekeepers reported poor treatment efficacy, and limited field tests showed that products that once removed 90% of mites or more are now removing far fewer. Since these products are no longer working as well, the mite problem seems to be getting worse," vanEngelsdorp said. "But mites are not the only problem," continues vanEngelsdorp. "Land use changes have led to a lack of nutrition-rich pollen sources for bees, causing poor nutrition. Pesticide exposures, environmental factors, and beekeeping practices all play some role as well."
Bayer Monsanto Damages Reduced to $25.27 Million by U.S. Judge --U.S. District Judge Vince Chhabria announced his ruling in San Francisco on Monday. Chhabria reduced the amount that Germany's Bayer AG has to pay the claimant to $25.27 million (€22.4 million). Bayer bought Roundup maker Monsanto for $63 billion last year. Following a four-week trial in March a federal jury awarded $5 million (€4.4 million) in compensatory and $75 million in punitive damages to a man who blamed his cancer on glyphosate-based weed killer Roundup. Edwin Hardeman was diagnosed with non-Hodgkin's lymphoma in 2014. At a hearing to discuss Bayer's request to overturn the verdict earlier this month, Chhabria said, "It's quite clear that under the Constitution I'm required to reduce the punitive damages award and it's just a question of how much." U.S. Supreme Court rulings limit the ratio of punitive to compensatory damages to 9 to 1. The judge said he would also take into account the fact that Hardeman was now in full remission and unlikely to suffer as much as he had in the past. Bayer says Roundup — and its active ingredient glyphosate — are safe for human use and not carcinogenic. However, in 2015 the World Health Organization's cancer arm reached a different conclusion, classifying glyphosate as "probably carcinogenic to humans."
Trump’s EPA Won’t Ban Brain-Damaging Pesticide - President Donald Trump's U.S. Environmental Protection Agency (EPA) will not ban the agricultural use ofchlorpyrifos, a toxic pesticide that the EPA's own scientists have linked to brain damage in children, The New York Times reported Thursday. The decision, announced Thursday, was a response to a petition from public health and environmental groups who had pushed for a ban. The agency ruled that "critical questions remained regarding the significance of the data" on the pesticide's health effects, according to The Guardian. The ruling is the latest in a series of Trump EPA decisions that weaken chemical safety rules, The New York Times pointed out. In April, it opted against a full ban on asbestos in favor of restrictions that critics say could usher in new uses. Also this year, it issued restrictions on a paint-stripping chemical that were weaker than a ban proposed during the Obama years. Finally, just last week, it widely expanded the use of the pesticide sulfoxaflor, which its own scientists have shown can harm bees, as HuffPost reported. "Siding with pesticide corporations over the health and well-being of kids is the new normal at the EPA,"Environmental Working Group President Ken Cook said in a statement. "Today's decision underscores the sad truth that as long as the Trump administration is in charge, this EPA will favor the interests of the chemical lobby over children's safety." The EPA's decision came after a federal court ordered the agency to make a final call on the ban by mid-July. Chlorpyrifos has been banned for home use since 2000, but farmers have continued to spray it on crops like apples, strawberries, broccoli and corn. The Obama administration had initiated a ban on agricultural uses of the pesticide, but Trump's EPA reversed it, setting off a legal battle with environmental advocates. In the absence of federal action, states have moved against the pesticide on their own. Hawaii became the first state to ban chlorpyrifos in 2018, and California announced it would ban the chemical in May. New York is also moving towards a ban, The New York Times reported. Research has linked chlorpyrifos exposure to lower IQ, memory loss, breathing problems and increased risk of autism in babies born to mothers who lived near farms where it was sprayed, according to The Guardian.
How to Avoid Brain-Damaging Chlorpyrifos in Milk and Produce -- You may know that many conventional oat cereals contain troubling amounts of the carcinogenic pesticide glyphosate. But another toxic pesticide may be contaminating your kids' breakfast. A new study by the Organic Center shows that almost 60 percent of the non-organic milk sampled contains residues of chlorpyrifos, a pesticide scientists say is unsafe at any concentration. Chlorpyrifos is a neurotoxin — it affects the nervous system and brain, and even small amounts of exposure can cause permanent health damage to babies and children. These health effects can include impairment of children's IQ and harm to the parts of the brain that control language, memory, behavior and emotion. A new study from the University of Southern Denmark also links chlorpyrifos exposure in pregnant women to ADHD in their children.Because millions of pounds of chlorpyrifos are sprayed on crops every year, most Americans are exposed to it through milk, fruit and other produce. Research by the U.S. Environmental Protection Agency (EPA) found that babies and developing fetuses are exposed to about five times more chlorpyrifos than what the EPA's standard deems safe, and children consume chlorpyrifos at 11 to 15 times the EPA standard. Despite this, in 2017 the Trump EPA decided to ignore science in favor of the pesticide industry and cancelled a proposed ban on chlorpyrifos. Now the EPA won't act to keep it out of milk and produce for at least another five years. While the EPA waits to evaluate chlorpyrifos again, roughly 30 million pounds of this chemical will be sprayed on crops, risking the health of children across the U.S.The EPA's failure to ban chlorpyrifos has even more harmful consequences for farm workers and their families. According to The Guardian newspaper, parents in California's Central Valley, which has some of the heaviest use of chlorpyrifos in the country, fear that drifting clouds of pesticides are causing their children's chronic health problems, including learning problems and attention deficit disorders. They're just not sure about possible solutions. "We know this is dangerous for the kids," said one mother of five, "but what are we supposed to do?"
Drone Startup Gets First-Ever Approval In Iowa To Spray Chemicals On Crops - A tech startup in Iowa became the first legally authorized company to fly drones for aerial application of agrichemicals in the state of Iowa, reported Crop Life. “Our drone technology had been ready for a few months; we just needed the regulatory landscape to get sorted out,” Rantizo CEO, Michael Ott explained. “Building the technology is the easy part,” he continued. Record rainfall this spring has decimated the Midwest, including many parts of Iowa. Rantizo, which developed an easy-to-use drone spraying platform, could soon hit the fields spraying fungicide over crops to ensure parasitic fungi does not spread in the unusual wet conditions.“Rain prohibited farmers from getting their corn crops in within the timeline they are used to this year. When I last checked at the end of June, only 96% of corn crop had been planted whereas typically they’re at 100% by this time,” Ott said.“This will undoubtedly affect yields,” he continued, citing that the USDA recently lowered the national average corn yield projection to 166 bushels per acre.A Rantizo representative told The Gazette in April that the drones will replace traditional sprayer vehicles in the future because the technology is more precise and cheaper to use.“Our drone technology offers new improvements to agricultural crop applications such as increased field access, reduced headcount and ability to spot apply,” Ott stated. “In other words, we can get in the fields to treat pests faster, with less people and in more effective ways that require less chemicals.”
PFAS Crisis Expands As Millions Of Americans In 43 States Are Exposed To Toxic Chemicals - Tens of millions of Americans in 43 states may have been exposed to toxic fluorinated compounds known as PFAS in their drinking water.In a report from May, the non-profit Environmental Working Group (EWG) showed how PFAS had exposed upwards of 19 million Americans through contaminated groundwater. EWG found 610 contaminated locations ranging from public water systems, military bases, military and civilian airports, industrial plants, dumps, and firefighter training sites. Now the environmental advocacy group has identified 58 more military sites where high levels of PFAS used in firefighting foam have been detected in groundwater or drinking water, from Elmendorf Air Force Base and Fort Richardson, Alaska to Fort Eustis, Virginia, reported the Military Times. Many of the new locations contain PFAS levels over 100,000 parts per trillion."The EPA and the Department of Defense have utterly failed to treat PFAS contamination as a crisis demanding swift and decisive action," said Ken Cook, president of EWG, in a statement announcing the additional contaminated sites."'It's time for Congress to end new PFAS pollution and clean up legacy contamination," Cook said. For decades, the military and other civilian agencies used firefighting foams that contained PFAS. These dangerous chemicals are also in hundreds of everyday household products. The Centers for Disease Control and Prevention (CDC) has warned that the toxic chemicals are present in the blood samples of the general population. Prior studies have shown the dangerous chemicals have been linked to weakened childhood immunity, thyroid disease, cancer, and other major health issues.
Health groups sue over Trump rollback of Obama-era emissions rule - Two major health organizations have sued the Trump administration over its rollback of an Obama-era rule on power plant emissions.The American Lung Association and the American Public Health Association are challenging President Trump’s newly unveiled American Clean Energy (ACE) rule, the administration’s replacement for the Obama administration's Clean Power Plan. Critics have widely panned the Environmental Protection Agency (EPA) under Trump for introducing a rule opponents say will do little to reduce pollution from power plants.“In repealing the Clean Power Plan and adopting the ACE rule, EPA abdicates its legal duties and obligations to protect public health under the Clean Air Act, which is why we are challenging these actions,” the two groups said in a statement Monday.“EPA has legal authority and obligation under the Clean Air Act to protect and preserve public health and welfare, including by regulating carbon dioxide pollution from coal-fired power plants," they added. "However, it is simply not lawful for EPA to use its legal authority in ways that will increase dangerous air pollutants and harm the health of Americans.” The Trump administration's replacement rule is designed to give states more time and authority to decide how to implement new technology to lower net emissions from coal-fired plants. The administration argues that the Obama rule was too extreme, and that the replacement rule focuses more narrowly on technology power plants can use to reduce their pollution. "This regulation does not cap emissions, does not set a statewide cap or a facility cap — we don't cap emissions, we limit emissions rates," a top EPA official told reporters on a call when the ACE rule was announced.
E.P.A. Plans to Curtail the Ability of Communities to Oppose Pollution Permits — The Environmental Protection Agency is preparing to weaken rules that for the past quarter-century have given communities a voice in deciding how much pollution may legally be released by nearby power plants and factories. The changes would eliminate the ability of individuals or community advocates to appeal against E.P.A.-issued pollution permits before a panel of agency judges. However, the industrial permit-holders could still appeal to the panel, known as the Environmental Appeals Board, to allow them to increase their pollution. “This is outrageous,” said Richard Lazarus, an environmental law professor at Harvard. “Individuals in communities will lose a way to seek relief from pollution that has historically been very effective. But industry will still be able to seek relief to pollute more.” The proposed change is the latest in the Trump administration’s long-running effort to roll back environmental regulations and reduce regulatory burdens on industry, including the June announcement of a new E.P.A. rule that would weaken regulations on planet-warming greenhouse pollution from power plant smokestacks, the expected late-summer announcement of a similar plan to weaken rules on vehicle tailpipe pollution, and a 2018 proposal to open much of the United States coastline to oil drilling. The planned changes follow a Monday speech by President Trump in which he sought to frame himself as a conservationist and protector of public land. “What E.P.A. is proposing means communities and families no longer have the right to appeal a pollution permit that might affect them,” said Patrice Simms, a former staff lawyer for the Environmental Appeals Board who is now an attorney at Earthjustice, an advocacy group. When the agency issues pollution permits, “they may or may not get it right,” Mr. Simms added. Lawyers for industrial interests said the proposed change would eliminate burdensome red tape, speeding up a process that is ultimately decided by the courts anyway.
Government Watchdog: EPA Broke Ethics Rules as It Replaced Academic Advisers With Industry Appointees - President Donald Trump's Environmental Protection Agency (EPA) violated ethics rules when it replaced academic members of advisory boards with industry appointees, the Government Accountability Office (GAO) reported Monday. The federal watchdog found that, in 2018, the EPA did not gather documents from staff explaining the rationale for appointing new members to two key advisory committees and failed to ensure that all committee members appointed as special government employees met ethics requirements. "This report shows that the Trump administration rigged influential advisory boards to favor its polluter backers," Sen. Sheldon Whitehouse (D-R.I.) said in a statement reported by The New York Times. The EPA failed to follow its own process when it appointed 20 new members to the Science Advisory Board and Clean Air Scientific Advisory Committee in fiscal year 2018, GAO said. EPA staff typically provide rationales for why a person was recommended, but the appointment packets reviewed by the GAO for the two committees did not include those documents.Further, the agency is supposed to ensure that board members appointed as special government employees do not have conflicts of interest that would prevent them from giving unbiased advice. But 23 percent of the financial disclosure forms reviewed by the GAO were not signed and dated by ethics officials. The composition of some boards also significantly changed during the first year of the Trump administration, the report found. The number of academics on the Scientific Advisory Board fell 27 percent and, on the Board of Scientific Counselors, 45 percent. In contrast, the number of academics on the boards remained stable during the first year of the Obama administration, The New York Times reported. The composition changes coincided with a rule by former EPA Administrator Scott Pruitt barring anyone who had received EPA funding from sitting on a board. This posed a problem for academics, InsideClimate News explained, because the EPA funds a lot of environmental research. But the hole left by the academic members was filled by industry-linked scientists and private consultants, the report confirmed.
Indoor carbon dioxide levels could be a health hazard, scientists warn - Indoor levels of carbon dioxide could be clouding our thinking and may even pose a wider danger to human health, researchers say. While air pollutants such as tiny particles and nitrogen oxides have been the subject of much research, there have been far fewer studies looking into the health impact of CO2. However, the authors of the latest study – which reviews current evidence on the issue – say there is a growing body of research suggesting levels of CO2 that can be found in bedrooms, classrooms and offices might have harmful effects on the body, including affecting cognitive performance. Writing in the journal Nature Sustainability, Hernke and colleagues report that they considered 18 studies of the levels of CO2 humans are exposed to, as well as its health impacts on both humans and animals. Traditionally, the team say, it had been thought that CO2 levels would need to reach a very high concentration of at least 5,000 parts per million (ppm) before they would affect human health. But a growing body of research suggests CO2levels as low as 1,000ppm could cause health problems, even if exposure only lasts for a few hours. The team say crowded or poorly ventilated classrooms, office environments and bedrooms have all been found to have levels of CO2 that exceed 1,000ppm, and are spaces that people often remain in for many hours at a time. Air-conditioned trains and planes have also been found to exceed 1,000ppm. “Indoor environments are of much more concern presently and for many people that is where they spend 60-80% of their time,” said Hernke, although projections suggest by 2100 some large cities might reach outdoor CO2 levels of 1,000ppm for parts of the year. In one study of 24 employees, cognitive scores were 50% lower when the participants were exposed to 1,400ppm of CO2 compared with 550ppm during a working day. The team additionally looked at the impact of CO2 levels on animals, finding that a few hours’ exposure to 2,000 ppm was linked to inflammatory responses that could lead to damage to blood vessels. There is also tentative evidence suggesting that prolonged exposure to levels between 2,000 and 3,000ppm is linked to effects including stress, kidney calcification and bone demineralisation.
Rising CO2, climate change projected to reduce availability of nutrients worldwide - One of the biggest challenges to reducing hunger and undernutrition around the world is to produce foods that provide not only enough calories but also make enough necessary nutrients widely available. New research finds that, over the next 30 years, climate change and increasing carbon dioxide (CO2) could significantly reduce the availability of critical nutrients such as protein, iron, and zinc, compared to a future without it. The total impacts of climate change shocks and elevated levels of CO2 in the atmosphere are estimated to reduce growth in global per capita nutrient availability of protein, iron, and zinc by 19.5%, 14.4%, and 14.6%, respectively.The study, "A modeling approach combining elevated atmospheric CO2 effects on protein, iron and zinc availability with projected climate change impacts on global diets," [LINK] was co-authored by an international group of researchers and published in the peer-reviewed journal, Lancet Planetary Health. The study represents the most comprehensive synthesis of the impacts of elevated CO2 and climate change on the availability of nutrients in the global food supply to date. Improvements in technology, and markets effects are projected to increase nutrient availability over current levels by 2050, but these gains are substantially diminished by the negative impacts of rising concentrations of carbon dioxide. While higher levels of CO2 can boost photosynthesis and growth in some plants, previous research has also found they reduce the concentration of key micronutrients in crops. The new study finds that wheat, rice, maize, barley, potatoes, soybeans, and vegetables are all projected to suffer nutrient losses of about 3% on average by 2050 due to elevated CO2 concentration.The effects are not likely to be felt evenly around the world, however, and many countries currently experiencing high levels of nutrient deficiency are also projected to be more affected by lower nutrient availability in the future.
Cigarette butts hamper plant growth—study - New research has discovered that cigarette butts—the most common form of litter on the planet—significantly reduce plant growth. Led by academics from Anglia Ruskin University (ARU) and published in the journal Ecotoxicology and Environmental Safety, the study is the first to show the damage that cigarette butts can cause to plants. The researchers found that the presence of cigarette butts in the soil reduces the germination success and shoot length (the length of the stem) of clover by 27% and 28% respectively, while root biomass (root weight) reduced by 57%. For grass, germination success reduced by 10% and shoot length by 13%. Most cigarette butts contain a filter made of cellulose acetate fibre, a type of a bioplastic. Filters from unsmoked cigarettes had almost the same effect on plant growth as used filters, indicating that the damage to plants is caused by the filter itself, even without the additional toxins released from the burning of the tobacco. Control experiments contained pieces of wood of identical shape and size as the cigarette butts. It is estimated that around 4.5 trillion cigarette butts are littered every year, making them the most pervasive form of plastic pollution on the planet. As part of this study, the academics sampled locations around the city of Cambridge and found areas with as many as 128 discarded cigarette butts per square metre.
"Due To A Poor Harvest Season, We're Experiencing Shortages On Many Canned Vegetable Items" --I know that this headline is alarming, but it is actually a direct quote from a notice that was recently posted in a Kroger supermarket. And as you will see below, similar notices are being posted in the canned vegetable sections of Wal-Mart stores nationwide. I would encourage you to examine the evidence in this article very carefully and to come to your own conclusions about what is happening. At this moment, social media is buzzing with reports of shortages of canned vegetables all around the country. But so far, the mainstream media is being eerily quiet about all of this. Is there a reason why they aren’t saying anything? For months, I have been reporting on the extremely bizarre weather patterns that are causing crop failures all over the planet. But I certainly did not expect that we would already begin to see product shortages on the shelves of major U.S. supermarkets this summer. What I am about to share with you is shocking, but the truth needs to get out. For those that share my articles on your own websites, I know that all of the images in this article are going to be an inconvenience, but it is imperative that you include them when you republish this article because they tell a story. All of the images are taken directly from Facebook, and they prove that we are now facing a nationwide shortage of canned vegetables. This first image was posted on Facebook by Scott L. Biddle, and it shows a “product shortage” notice that was posted in the canned vegetable section of a Wal-Mart in Tennessee… All the way over on the west coast, similar notices were photographed by Gina Helm Taylor in the state of Oregon on July 12th… And here are a couple of notices that Daniel Moore was able to photograph during his lunch break at his local Wal-Mart… It appears that the exact same notices were sent to Wal-Mart stores all across America. Here is another one from Carol Guy Hodges… And lastly, here is a photo that was shared by Randy Sevy… This certainly isn’t the end of the world, and we can definitely survive without canned vegetables for a few weeks. But as crop failures around the globe continue to intensify, will shortages such as this start to become increasingly common?
Sudden Oak Death detected in Ohio after stores receive infected shipments of plants - - The state Department of Agriculture reports that cases of the Sudden Oak Death disease have been found in Ohio. The plant pathogen, also known as phytophthora ramorum, was found on rhododendron and lilac plants shipped to Walmart and Rural King stores in Ohio. Officials estimate that 1,600 infected plants were shipped to stores throughout the state. Shipments also went to at least 17 other states. The disease can kill oak, other tree species and woody ornamentals like rhododendron, Viburnum and Pieris. Signs of the disease can include leaf spots, shoot dieback and cankers (dead wood material) on the tree’s trunk, which can lead eventually to the death of the tree or plant. Sudden Oak Death can be difficult to diagnose because symptoms are similar to infections from fungi or insects and other conditions. The disease has devastated oak trees in California and Oregon and can be spread by splashing rainwater on the spores of a diseased plant. The pathogen does not readily produce spores or spread naturally under dry conditions and is not common in urban or suburban areas where native vegetation has largely been removed. Anyone who purchased rhododendron or lilac plants from Walmart or Rural King between March and May should immediately dispose of the plants in a way to prevent further spread of the disease, officials with the state agriculture department’s Division of Plant Health said. Infected plants can be destroyed by burning, deep burial or double-bagging the plant — including the root ball — in heavy duty trash bags for disposal. To prevent further spreading, do not compost. Also to prevent spreading the disease, garden tools used on infected plants must also be sanitized with bleach or 91% or higher alcohol before they are used again.
Researchers think they know what’s killing London’s iconic sparrow -Once a common sight around London, house sparrow (Passer domesticus) populations have been declining for decades; they’re down 71% since 1995. Now, researchers believe they know why: a mosquito-borne disease called avian malaria.Scientists collected 3 years of data from 11 sparrow colonies around London where the birds breed. They counted raw numbers of birds each year, and collected blood and excrement from a number of individuals.Seven out of the 11 colonies were losing birds, and roughly 74% of the sparrows carried avian malaria (Plasmodium relictum). That’s the highest rate of infection with this parasite seen in any wild bird population in Northern Europe, the researchers report today in Royal Society Open Science. Avian malaria may be causing declines in Western Europe, North America, and India as well, the team says. Similar to other forms of malaria, avian malaria is spread when mosquitoes bite birds and feed on their blood. The disease can lead to infections that can be fatal to the birds, and they can pass the infection on to their offspring. Most sparrows carried the parasite, but the quantity of parasites found in each bird’s system was significantly higher in declining populations, especially in younger birds, the team found. The scientists don’t know why avian malaria is particularly prevalent in house sparrows, but they say further research may provide clues.
Florida’s Corals Are Dying Off, But It’s Not All Due To Climate Change, Study Says -- Brian Lapointe, a research professor at Florida Atlantic University's Harbor Branch Oceanographic Institute, has spent his career studying corals at the Looe Key Reef, in a National Marine Sanctuary in the Florida Keys. Over that time, he's witnessed an alarming trend. In the past 20 years, half of Florida corals have died off. Lapointe is lead author on a new paper in the journal Marine Biology. It analyzes 30 years of data he's collected. When he started his research, in 1984, coral covered 33% of the Looe Key Sanctuary Preservation area, 5.3 square nautical miles of protected ocean at the southern tip of the Florida Keys. By 2014, the coral cover had dropped to just 5%. But Lapointe thought his study would show that warming temperatures were killing off corals. Instead, the data show that the coral's biggest problem has been another human source: nitrogen Too much nitrogen, from poorly treated sewage, as well as fertilizer and topsoil from yards and farms, is messing up the water quality in the coral habitat, his data show. And when it comes to a fix, it's easier to reduce nitrogen levels than to reverse climate change, Lapointe says. His conclusion? "There actually is hope for coral reefs after all." Excess nitrogen feeds blooms of algae that block out the light. It also throws off the nutrient balance in the water in ways that disrupt the coral's life cycle. As the nitrogen has increased, it hasn't been balanced by a similar increase of phosphorus, a mineral corals need to grow. The imbalance, according to Lapointe, is starving the corals of phosphorus."This [nitrogen to phosphorus imbalance] is what we now realize is increasingly stressing the corals at Looe Key, and probably other areas of Florida and the world," he says. It makes the corals unhealthy, and more susceptible to disease, to go through coral bleaching, and to die, he says.
Waste Watch: Why Do We Discard So Many Edible Fish We Pull From the Sea? -- Why, in an age of declining fish stocks and persistent global hunger, do we discard so many edible fish we pull from the sea?The short answer, as the Guardian reported yesterday in Ban on discarding edible fish caught at sea has failed – Lords report:The wasteful practice of discarding edible fish at sea has been one of the key charges levelled against the EU’s common fisheries policy, which requires fishing vessels to throw back fish if they have already exceeded their quota for certain species.The practice of discarding, which has resulted in an estimated 1m tonnes of fish a year being thrown back into the water, dead or in too poor a condition to carry on living, has been targeted for reform since 2011, when the EU said it would phase it out over several years in order to conserve fish populations.But fishermen still have an incentive to carry on with the practice, because it generates more money and allows them to spend longer at sea.The House of Lords conducted an inquiry into the so-called landing obligation, which came into effect at the beginning of this year, and was supposed to address this problem at least with respect to fishing in EU waters – but has not done so. As the Guardian notes: The ban on the wasteful discards of healthy and edible fish at sea has failed, according to a Lords report. Despite its enormous popularity with the British public, the measure has been poorly implemented in the UK and the result is more fish being needlessly wasted. According to a December 2018 piece in The Conversation, There aren’t plenty of fish in the sea, so let’s eat all that we catch, “bycatch” also afflicts Australia: Discarded fish accounts for 8% of the total global catch by volume. In Australia our reluctance to eat many types of fish makes the bycatch problem even worse. This region of the Southern Ocean is fished mostly for deepwater flathead and bight redfish. There are, in fact, 120 different species that can be caught, but only 60 of these are eaten. The means up to 56% of any catch is discarded
U.S. customs seizes 32 pounds of rat meat at Chicago O’Hare airport - Agents from the U.S. Customs and Borders Protection seized 32 pounds of rat meat at Chicago O’Hare Airport, the agency’s spokesman Steven Bansbach said Wednesday. The incident occurred on June 26 when a passenger traveling from the Ivory Coast declared he had meat upon arrival in Chicago, according to Bansbach. Yet upon inspection, agents determined it was African rat meat and needed to be destroyed. “It was destroyed because the meat may have carried diseases that aren’t allowed into the U.S.,” Bansbach said, though he declined to specify any specific diseases. The man who brought the meat was not issued a penalty.
Nearly 600 suspects arrested in largest anti-wildlife-trafficking operation ever -The World Customs Organization and INTERPOL retrieved thousands of endangered animals during a sweep of arrests across 109 countries.Every day, all day long, wildlife crime is happening – and it usually feels like a supremely depressing thing that seems somehow impossible to stop.But today we have been given a glimmer of hope. The World Customs Organization (WCO) and the International Criminal Police Organization (otherwise known as INTERPOL) have announced the success of Operation Thunderball. According to the WCO, in June the two agencies conducted nearly 2,000 seizures in a historic joint-operation, noting that “Initial results have led to the identification of almost 600 suspects, triggering arrests worldwide. Further arrests and prosecutions are foreseen as ongoing investigations progress.” Operation Thunderball made 1,828 seizures, including:
- 23 live primates
- 30 big cats and large quantities of animal parts
- 440 pieces of elephant tusks and an additional 1200 pounds of ivory
- Five rhino horns
- More than 4,300 birds
- Just under 1,500 reptiles and nearly 10,000 turtles and tortoises
- Almost 7,700 wildlife parts from all species
- 2,550 cubic meters of timber (equivalent to 74 truckloads)
- More than 2,600 plants
- Almost 10,000 marine wildlife items
Among the wildlife parts were seven packages of pangolin parts weighing 1200 pounds bound for Asia seized in Nigeria.
‘The Numbers Are Just Horrendous.’ Almost 30,000 Species Face Extinction Because of Human Activity - Overfishing, hunting and land development have pushed more species closer toextinction, according to a new report.The Red List report by the International Union for Conservation of Nature(IUCN) found that 27% of the more than 105,000 species the organization has analyzed are at risk of extinction, a total of 28,338 different species.IUCN also found that no species on its list have shown any sign of improvement since it was last updated in December 2018.“Things are not getting better, they are getting worse,” Craig Hilton-Taylor, head of the IUCN Red List unit, tells TIME.The Red List places the 105,732 species of plants and animals that it analyses into different categories: the number of species that are considered threatened fall into the categories of vulnerable, endangered and critically endangered. However, there are an additional 6,435 species that fall into the near-threatened category.The endangerment of species is not only a critical issue for animal and plant life but can also have a detrimental impact for humans. “The future of humanity — food, fresh water, drinking water, clean air — is all dependent on maintaining the biodiversity around us,” Hilton-Taylor says. “We can’t afford to lose any of these species.” Particularly threatened are species of Rhino Rays that have been overfished, in part for shark fin soup, a specialty in China and parts of Asia. There are also seven species of primates that have been hunted almost into extinction for bushmeat, and freshwater fish in Japan and Mexico that have declined in population because of pollution, invasive species and loss of free flowing rivers. Even deep-sea species are at risk because of deep-fishing and the oil and gas industries, according to IUCN.
Who Eats Lemurs — and Why? - For years now conservationists have warned that many of Madagascar's iconic lemur species face the risk of extinction due to rampant deforestation, the illegal pet trade and the emerging market for the primates' meat. Yes, people eat lemurs, and the reasons they do aren't exactly what we might expect. One 2016 study found — perhaps not surprisingly — that Madagascar's extreme poverty drives the poorest families to hunt and eat lemurs and other wildlife. The study was conducted in Masoala National Park, home to ten of Madagascar's 110-plus lemur species, including several critically endangered species. Local hunters know that killing lemurs is against the law, but there's a reason that doesn't stop them. The study, published in Biological Conservation, found that "almost all children in lemur-hunting households were malnourished." Wild-caught meat, tragically, is the only readily available solution for hungry families. The authors concluded that "unless lemur conservation efforts on the Masoala [peninsula] prioritize child health, they are unlikely to reduce lemur hunting or improve lemur conservation." Although poverty is endemic in Madagascar, it's not the only factor driving lemur consumption. Two additional studies published that year in PLOS One and in Environmental Conservation revealed that Madagascar's wealthier and middle-class citizens are equal participants. The studies uncovered a massive supply chain that transports meat from lemurs and other endangered species into urban and semi-urban areas, where it is sold in restaurants, open-air markets and even supermarkets. The studies, the result of almost 2,000 interviews throughout the northern half of Madagascar, found that the meat trade in these more urban areas is not about poverty. Instead, it's because people have a preference for wild-caught meat over more commercially grown livestock. mCombined with the first study, the two supply-chain papers reveal a complex answer as to who is eating lemurs and why.
3 million gallons of untreated sewage spills into Puget Sound - Officials are investigating after failures at sewage treatment plants in Seattle have led to the spill of an estimated 3 million gallons of untreated sewage into Puget Sound. Washington state's Department of Ecology said in a statement that the spill was due in part to power disruptions."The West Point Wastewater Treatment Plant released an estimated 3 million gallons of untreated sewage for approximately 27 minutes, after backup pumping systems failed during power disruptions at the plant," their statement reads."The release of sewage into Puget Sound has prompted local health departments to issue several beach closures," the agency said.Officials say there was also separate power failure on July 18 at the Renton Wastewater Treatment Plant. That incident may have resulted in some wastewater not being entirely disinfected over a nearly hourlong period.Local officials initially listed nine beaches as closed in response to the spill, but as of 3:30 p.m. local time their list had been updated to just two beaches in Discovery Park.
‘Disgusting dumpsters’: Rome garbage crisis sparks health fears -Landfills in flames and rats feasting on waste in the streets have sparked health fears in Rome, as doctors warn families to steer clear of disease-ridden curbside garbage and locals launch a disgusting dumpster contest online. Crowds of summer tourists are forced to navigate overflowing bins in the stifling heat, as the pungent perfume of neglected garbage draws scavenging animals and the threat of disease to the Eternal City and locals fume over the city's refuse management. Rome's chief physician Antonio Magi has issued a "hygiene alert", telling AFP this could be upgraded to a health warning, with disease spread through the faeces of insects and animals banqueting on rotting waste. His warning prompted local prosecutors to open an investigation this week into the city's refuse collection. In the meantime, furious Rome residents have launched a contest on Twitter to find the most fetid dustbins. Adding to the indignation of Rome residents is the steep price they are paying for their garbage to rot in the streets. The city spent more than 597 euros ($670) per inhabitant on household waste treatment in 2017 -- by far the highest in the country, ahead of Venice (353 euros) and Florence (266 euros), according to a report by the Openpolis Foundation. But the city lacks infrastructure: of its three main landfills, one has closed and the others were ravaged by fire in recent months. And two biological treatment sites have reduced their activities for maintenance work.
Thousands protest in central China against proposed waste incinerator - Thousands demonstrated in the central Chinese city of Wuhan recently in a week-long protest to denounce a planned garbage incinerator. The Chinese government mobilised police to quash the protests while, at the same time, mass demonstrations were continuing in Hong Kong. The Wuhan protests began on June 28, triggered by local government plans to establish the waste incinerator in densely-populated Yangluo in the Xinzhou district. While authorities claimed that a location for the incinerator had not yet been approved, this did little to assuage the fears of residents. As many as 10,000 people marched that weekend to voice their opposition. The suspected site is close to housing, surrounded by 300,000 residents and two universities within a three-kilometre radius. According to reports, the protest was violently broken up by over 1,000 police, who beat and arrested demonstrators, including the elderly. According to protesters, those detained were released a few days later. Assurances from the local government that the incinerator would not be installed without further environmental studies and community approval were met with deep distrust. Smaller protests continued on July 1 and 2, then 10,000 demonstrators defiantly marched back onto the streets on July 3 for two days. Protesters chanted “give us back the green mountains and clear waters” and “garbage burning plant get lost from Yangluo.”
Cambodia to Return 1,700 Tons of Plastic Waste to U.S., Canada - Cambodia is the latest Asian country to reject the wealthy world's plastic waste. Government officials said Wednesday that they would send 1,600 tonnes (approximately 1,764 tons) of waste back to the U.S. and Canada after the trash was discovered in 83 containers Tuesday in the country's port of Sihanoukville, CNN reported. "Cambodia is not a dustbin where foreign countries can dispose of out-of-date e-waste, and the government also opposes any import of plastic waste and lubricants to be recycled in this country," said Neth Pheaktra, secretary of state and spokesman of the Ministry of Environment, as CNN reported. In addition to returning the waste, Cambodia is also investigating how the containers, which were misleadingly labeled as "recyclable products," ended up there in the first place. The companies behind the shipment could face fines if found out. Seventy of the containers came from the U.S. and 13 from Canada, Pheaktra said, as The Guardian reported. Social media users also reacted to the delivery, The Guardian reported. Cambodia's decision follows similar moves by Asian countries in recent months, who have gotten fed up with the influx of foreign waste after China banned imports in 2018. Malaysia vowed in May to return 3,300 tons of waste shipped from countries including the U.S., UK, Australia and Canada. The Philippines, meanwhile, recalled its ambassador to Ottawa after Canada missed a May 15 deadline to take back tons of rubbish. Canada later agreed to pay for its return by the end of June.
Large earthquakes rock Indonesia, Western Australia --A massive 7.3 earthquake has hit off the remote Maluku Islands in eastern Indonesia, damaging homes and sending panicked residents running into the streets and fleeing to temporary shelters. The quake comes hours after Western Australia felt its strongest ever earthquake, which shook residents from Broome to as far south as Perth.The Indonesian quake struck about 165 kilometres south-southwest of the town of Ternate in North Maluku province at 6:28pm local time, at a depth of 10 kilometres, according to the US Geological Survey. Officials were assessing the situation but there were no immediate reports of casualties, Mansur said. No tsunami warning is in place. The province was also hit by a 6.9-magnitude tremor last week but no extensive damage was reported. The Australian quake registered at 6.6 magnitude off the Kimberley coast in the Indian Ocean about 3.39pm AEST.It was followed by a series of aftershocks including a 4.1 quake. No damage or casualties have been reported.The United States Geological Survey said that quake hit at a depth of 33km, about 203km offshore from Broome.WA residents from Broome, Port Headland, Karratha, Busselton and Perth all reported feeling shakes from the quake.
Friday earthquakes on a crustal fault show it’s not only the ‘Big One’ we should fear - Seattle Times - The Cascadia Subduction Zone may get most of the attention, but as Friday’s earthquakes north of Seattle show, the monster fault off the coast isn’t our only seismic threat.Western Washington is also crisscrossed by more than a dozen large, shallow faults — cracks in the Earth’s crust capable of unleashing damaging earthquakes. Seattle, Tacoma, Everett, Olympia and Bremerton all sit uncomfortably close to crustal faults. And new evidence suggests that in the aggregate, those faults might rupture more frequently than previously thought. The magnitude 4.6 quake that struck early Friday morning near Monroe originated more than 17 miles down on a previously unknown fault and in an area seismologists don’t understand well. The focus, or point where the fracture started, was several miles beneath the Southern Whidbey Island Fault (SWIF) zone — a wide swath of fractures that cuts diagonally across the state from Victoria, B.C, to the Tri-Cities area on the Columbia River. Washington’s major crustal faults can generate quakes as big as magnitude 7 to 7.5, Sherrod said. While that’s far less powerful than a magnitude 9 subduction zone megaquake, a quake of that size near any city in the state would be devastating. Geologists used to think large crustal fault quakes in Washington struck very rarely — only every thousand years or so, on average. But Sherrod and his colleagues recently analyzed all the geologic data from 15 faults in the Puget lowlands, and found evidence of 21 quakes of magnitude 6.6 or greater in the last 4,000 years. After statistical analysis, the researchers concluded that means a big quake rocks one fault or another every 250 years on average.
Quick Fixes Are Worsening Chennai’s Water Crisis --An article in The Hindu celebrates the fact that Metrowater – Chennai’s Metropolitan Water Supply and Sewerage Board – has arranged for a water train that will bring in 2.75 million litres of water from Jolarpet. Just the transportation component will cost the body Rs 8.67 lakh. That works out to Rs 3.17/litre, or Rs 3,170 per kilolitre (kl).At that price, the water that arrives from Jolarpet is thrice as expensive as the water provided in the bubble-top plastic containers. This additional cost is merely for transportation. The costs of extraction at the source, pumping, treatment and distribution are not factored in. Distribution of this water through tanker lorries is a costly proposition, and will add to the financial burden of the city.Compare the transportation cost – Rs 3,170/kl – of Jolarpet water with that from other sources. If you had your own well/borewell with sufficient water, your cost would be 1,000 times lower – about Rs 3/kl. Water from Redhills (when available) costs Rs 4/kl excluding distribution costs. Veeranam water costs Rs 22/kl, not counting distribution costs. Even desalinated water – already the most expensive option – costs Rs 45 per 1,000 litres or 5 paise/litre. Desperate times require desperate measures, I agree with that. I do not wish to make the task of Metrowater officials more difficult. As it is they are dealing with a horrible situation created by the lapses of other departments of the city administration, namely the Tamil Nadu Pollution Control Board, the Public Works Department, the Chennai Municipal Corporation, the Chennai Metropolitan Development Authority, the Chennai Rivers Restoration Trust etc. That being said, the least Metrowater can do is to play an important role in influencing the activities of the city. It has, in fact, allowed rampant encroachment into wetlands and water recharge zones, and continues to do so.
Deaths, displacement as heavy rain and floods hit northeast India - Rain-triggered floods and mudslides in India's northeast have killed over a dozen people and displaced more than a million from their homes, with officials warning the situation could worsen in the coming days. Heavy monsoon rains in Assam state killed at least 10 people in the past 72 hours, state authorities said on Saturday, while six people were reportedly killed in Arunachal Pradesh, which borders China's Tibet region. "Ten people have died in separate incidents of drowning in the past three days and more than one million people [have been] affected, with the flood situation turning grave," a flood bulletin issued by the Assam government said. The Brahmaputra River, which flows from the Himalayas into India and then through Bangladesh, has burst its banks, swamping more than 1,800 villages in the state, which is on maximum alert due to heavy rains. Torrential rains have affected at least 25 of Assam's 33 districts and the federal water resources body said water levels in the Brahmaputra were expected to rise, with more rains forecast over the next three days. "The flood situation remains extremely critical," Assam's Water Resources Minister Keshab Mahanta told Reuters news agency.Elsewhere in Assam, the Kaziranga National Park - home to the endangered one-horn rhinoceros - has been flooded. The park is located 185km from the state capital, Dispur. "The rhinos and other animals are taking shelter in artificially created higher ground or have crossed the highway to higher areas," said Jukti Borak, a park official. Authorities prohibited vehicles from speeding on the highway that runs along the park. Apart from the estimated 2,500 rhinos, Kaziranga is home to a variety of wild animals that cross the highway in search of higher ground during floods.
Scores killed, millions displaced as monsoon batters South Asia - More than 100 people have been killed and millions of others forced from their homes across Nepal, India, Pakistan and Bangladesh as rain-triggered floods and landslides left a trail of destruction in parts of South Asia. The death toll was the highest in Nepal, where torrential rains unleashed mudslides and caused rivers to overflow, killing at least 67 people and leaving 30 others missing, officials said on Monday.The annual deluge, which hit the country on Thursday and has impacted around a third of all districts, has so far displaced at least 10,000 people there.The downpours have eased but authorities still fear the death toll could rise, according to police spokesman Bishwaraj Pokharel."There are the challenges of resettlement of the displaced as many houses ... have been swept away. We are also cautious about the risk of epidemics due to polluted water," Pokharel told AFP news agency.The June to September monsoon causes widespread death and destruction across South Asia each year. In the latest monsoon-related tragedy in India, a four-storey building on a hillside in the northern state of Himachal Pradesh collapsed due to heavy downpours, trapping those who had gathered for a party inside.At least 14 people were killed, including 13 soldiers, according to a statement from the chief minister's office. Floods have also devastated much of the northeastern state of Assam, where some 4.3 million people have been forced from their homes in the last 10 days due to rising waters across the mostly rural region, according to a government release on Monday."The flood situation has turned very critical with 31 of the 32 districts affected," Assam Chief Minister Sarbananda Sonowal told reporters. "We are working on a war footing to deal with the flood situation."
Heatwave rages on as monsoon pauses - The southwest monsoon has lost momentum, making only marginal progress since reaching the Andaman and Nicobar Islands two weeks ago. An intense heatwave in parts of northern, central and western India has raised temperatures above 50° Celsius.The India Meteorological Department (IMD) said rains will hit the Kerala coast on June 6. Private forecaster Skymet, which initially forecast a June 4 arrival, now says it will take another three days.The arrival date has little bearing on the subsequent progress of the monsoon, which has a significant influence on rural income and demand for consumer goods, automobiles and gold. Farmers can also put up with some delay without taking a hit on yields. However, Skymet said monsoon will remain weak even after arrival. “In fact, it may go silent soon after its onset,” it said in a recent update.The IMD says the monsoon will resume its journey towards the subcontinent in the next 24 hours. In an updated forecast, it said June-September rainfall will be normal, or within 4% of average. Adding to the anxiety is the severe heatwave that is seeing soaring temperatures. Chu-ru, Rajasthan, tops the charts with a maximum of 50.8°C. Apart from the obvious health hazards, farmers face severe depletion of soil moisture.There has also been a surge in power demand as refrigerators and airconditioners consume that much more energy. The scorching heat is forecast to intensify. “Maximum temperatures are very likely to rise gradually by 2-4°C over major parts of northwest India in the next three to four days. They are likely to remain above normal by 2-3°C over some parts of south peninsula in the next three days. No significant change in maximum temperatures is likely over rest of the country in the next two to three days,” said IMD’s latest weather bulletin.
Earth Experiences Hottest June Ever on Record in 2019 - As per the data released by the American space agency NASA on Monday, the global average land-ocean temperatures were 0.93°C above the normal temperature (taking 1951 to 1980 as base years). Such high temperatures have never been observed on Earth in recorded history since 1880. June of 2016 was the second-highest at 0.82°C above normal temperatures. A strong El Niño in 2015-16 was behind the high temperatures that year. Despite being a weak El Niño year, the margin with which this year’s June temperatures have breached the 2016 levels is a cause of concern for the climate community. As the push to declare climate emergency is gaining pace across the globe, the record temperatures of June is likely to feed the movement. In India, June witnessed intense heatwaves across the country due to the delayed arrival of monsoon. The temperatures breached 50°C in parts of Rajasthan, and the national capital Delhi recorded the highest ever June day temperature on June 10. Moreover, the temperatures skyrocketed across Europe with many countries witnessing the highest ever temperatures on record. Earlier, European climate institution Copernicus also reported that June 2019 was the warmest on record. Moreover, experts believe that July is also well on track to be the hottest ever, as North America and the middle-east continue to record extreme temperatures.
Historic heat wave is double whammy for climate change - Nearly two-thirds of the U.S. is expected to be hit by a massive weekend heat wave, forcing energy companies to brace for maxed out grids and potential blackouts. It will also create a spike in carbon emissions, as the use of fossil fuels by people seeking to cool down expands. In Texas, the Midwest, the mid-Atlantic and New England, states are facing historic heat advisories, with temperatures expected to reach into the 100s in some places. Some weather experts estimate that more than 85 percent of the lower 48 states will experience temperatures of at least 90 degrees between Friday and Tuesday. Almost 50 percent of those states will experience temperatures higher than 95 degrees. All of that will lead to spikes in energy use. “A lot of Americans don’t really have a deep understanding of the energy they are using and the fact that time of the day and peak energy is peak fossil fuel use. It’s a double whammy in terms of climate,” said Kiran Bhatraju, CEO of Arcadia Power. Increasing temperatures will likely result in increased air conditioning usage, a phenomenon power companies are keeping an eye on to make sure energy demand doesn’t exceed availability. New York’s Independent System Operator said it’s expecting peak energy loads between Friday and Sunday in excess of 30,000 megawatts (MW).
July 2019 El Niño update: I think I’ll go for a walk - Emily Becker, NOAA --El Niño is hanging on by its fingernails, but forecasters predict this event will wind down within the next couple of months. It’s likely that the temperature of the tropical Pacific Ocean surface will return to near-average soon, qualifying for “ENSO-neutral” conditions. Neutral conditions are favored to remain through the fall and winter. The June Niño3.4 index, our primary ENSO measurement, was 0.6°C above the long-term average, just above the El Niño threshold of 0.5°C. There is some evidence that theatmosphere over the central Pacific is still responding to that extra heating, as a bit more clouds and rain than average were present in June. The Southern Oscillation Index and Equatorial Southern Oscillation Index were both slightly negative in June, also indicating some continuation of the weakened Walker circulation we expect to see with El Niño. But the upper-level and near-surface winds over the equatorial Pacific, another component of the Walker circulation, were close to average during June. All in all, El Niño is still present, but just barely. As frequent readers of this blog will know, we closely monitor the temperature of the water under the surface of the tropical Pacific. This can tell us if there is a source of warmer-than-average water to supply the surface, continuing to fuel El Niño, or not. In early June, there was a small downwelling Kelvin wave of warmer waters moving eastward under the surface of the Pacific, but this wave has dissipated recently. Overall, the heat content in the top 300 meters of the equatorial Pacific is just about average now, in early July. This is one of the major factors in our forecast for a return to near-average surface temperatures and neutral ENSO conditions. Once the surface temperatures return to average, and the source of extra heat to the air above the central Pacific is gone, the atmospheric component of El Niño—that weakened Walker circulation—will also return to average.
High water, washouts in southwest Arkansas - Drivers in southwest Arkansas are being urged to use caution as a number of roads in the area are closed due to high water and washouts. The 911 system in Howard County, including in Nashville and Dierks is also out of service due to the flood emergency. . Emergency staff are on standby at the Nashville Ambulance station located at 120 W. Sypert in Nashville. KTBS 3 News viewer Tami Westfall shared incredible video with us of Nashville Primary School. It shows dangerous floodwaters swamping the campus. The area around Nashville City Hall also flooded Tuesday morning according to the Nashville News-Leader. The Arkansas Department of Transportation reports flooding in a number of areas in Howard, Pike, Nevada and Hempstead counties. A culvert has failed just west of Prescott in Hempstead County, according to ARDOT.In Nevada County, a section of U.S. Highway 371 was closed due to a washout. In Howard County, a section of U.S. Highway 70 was closed due to high water. Drivers are urged to use caution and avoid these areas.The Arkansas Department of Transportation has advised that waters have receded enough to re-open eastbound traffic on I-30. Tuesday's flooding is also forcing the University of Arkansas Hope – Texarkana to close both the Hope and Texarkana campuses. The schools are expected to resume normal work hours on Wednesday.
Barry’s 14.58” of Rain in Arkansas Breaks All-Time State Record --Rainfall from Tropical Depression Barry deluged southwest Arkansas over the past three days, with the 14.58” that fell at Murfreesboro on July 14 - 16 breaking the all-time state record for precipitation from a tropical cyclone. Barry’s heavy rains that fell over southwest Arkansas inundated multiple highways, including I-30, and prompted four high-water rescues, according to weather.com. The heaviest rains from Barry have been in Louisiana, though, with 23.58” at Beauregard.On Tuesday, the heavy rains of Barry reached all the way into Michigan--a state unaccustomed to seeing tropical cyclone impacts. Heavy rains obscured visibility on I-96 north of Ann Arbor, causing a 40+ car pile-up that injured six people, and over 4” of rain fell in less than two hours at stations in Ann Arbor and Ypsilanti--not far below the all-time state tropical cyclone precipitation record of 6.07” set in 1961 from Hurricane Carla. Barry’s rainfall record in Arkansas is the fifth state all-time tropical cyclone precipitation record to fall in a span of less than two years, which is a pretty remarkable pace of record-breaking, since all-time state records are difficult to break. Just last year, slow-moving Hurricane Florence shattered the state precipitation record for both North Carolina (35.93”) and South Carolina (23.63”), and Category 5Hurricane Lane broke Hawaii’s all-time record with 52.02” at Mountain View on the Big Island. Back in August 2017, Hurricane Harvey stalled over Texas and brought 60.58” to Nederland, Texas. This smashed the all-time record not only for Texas, but for the entire U.S. A total of 12 states have beaten their all-time tropical cyclone precipitation record since 2000. Update: Dierks, Arkansas reported a 24-hour rainfall amount of 16.17" July 15 - 16, 2019, from Tropical Depression Barry, with an additional 0.42" falling during the previous three days, potentially from Barry. The storm total of 16.17 - 16.59" thus establishes a new all-time state record for rain from a tropical cyclone.
As Flood Risks Rise Across the US, It’s Time to Recognize the Limits of Levees - New Orleans averted disaster this month when tropical storm Barry delivered less rain in the Crescent City than forecasters originally feared. But Barry’s slog through Louisiana, Arkansas, Tennessee and Missouri is just the latest event in a year that has tested levees across the central U.S.Many U.S. cities rely on levees for protection from floods. There are more than 100,000 miles of levees nationwide, in all 50 states and one of every five counties. Most of them seriously need repair: Levees received a D on the American Society of Civil Engineers’ 2018 national infrastructure report card. Levees shield farms and towns from flooding, but they also create risk. When rivers rise, they can’t naturally spread out in the floodplain as they did in the pre-flood control era. Instead, they flow harder and faster and send more water downstream. And climate models show that flood risks are increasing. During this year’s unusually wet winter and spring, dozens of levees on the Missouri, Mississippi and Arkansas rivers were overtopped or breached by floodwaters. Across the central U.S., rivers are becoming increasingly hard to control. Today Kansas City and many other U.S. river towns are fortified behind levees and floodwalls, but faith in the idea of engineered flood control is starting to erode.Disastrous Midwest flooding in the summer of 1993, which killed 50 people and caused US$15 billion in damages, showed the limitations of this strategy. Floodwaters rose to unprecedented levels, eventually breaching or overtopping more than 1,000 levees.After the waters ebbed, federal and state officials paid to move some homes and communities off floodplains to higher ground. However, this trend quickly reversed. By 2008, Missouri had authorized more than $2 billion of new development in zones that were flooded in 1993.Many Kansas City residents still believe that higher, stronger levees will hold back future floods, and Congress has authorized millions of dollars to build them. But experienced engineers like retired Army Brigadier General Gerald Galloway, who coauthored a federal government assessment of the 1993 floods, warn that “there’s no such thing as absolute protection.”For their part, many scientists and engineers have found that levees can exacerbate floods by pushing river waters to new heights. One 2018 study estimated that about 75% of increases in the magnitude of 100-year floods on the lower Mississippi River over the past 500 years could beattributed to river engineering. Kansas City is still an economic hub, but railroads and highways have been more important than barges. The Missouri carries only a fraction of the tonnage shipped on other navigable rivers, such as the Mississippi, even though its channel has been expensively built and maintained for over 100 years.
High-tide flooding on the rise, especially along the east coast, forecasters warn - Sea levels are rising, and that is sending more ocean water into streets, sewers and homes. For people who live and work in coastal communities, that means more otherwise-sunny days disrupted by flooding. "Really the future is now in terms of sea level rise impacts," says William Sweet, an oceanographer for the National Oceanic and Atmospheric Administration. Average sea levels have already started rising as a result of global climate change. "The ocean is at the brim. It's clogging storm water systems and it's spilling into streets." For the last five years, Sweet and a team of forecasters at NOAA have been tracking the number of so-called high-tide flood days in coastal cities, in order to help local officials understand trends and plan ahead. Their latest report, released today, finds that the number of high-tide flood days is rising significantly in more than 40 coastal communities. While West Coast and Gulf Coast cities including San Diego, Seattle, Galveston and Houston are being affected, the biggest increases in flood risk are concentrated on the East Coast. In 2018, 12 communities broke or tied their previous records for the number of days with high-tide flooding, some with more than 20 days of storm-free flooding, according to the report. All were on the Eastern seaboard, from Massachusetts down to Florida."The East Coast has a very highly populated, developed coastline that has experienced relatively high rates of sea level rise over the last several decades," says Sweet. "It has a very active coastline: the water moves when the winds or the ocean currents change," he says. "All of this is creating a situation where high-tide flooding — which is a direct result of sea level rise — is becoming apparent and more problematic throughout the coast."
A floodier future’: Scientists say records will be broken (AP) — The federal government is warning Americans to brace for a “floodier” future. Government scientists predict 40 places in the U.S. will experience higher than normal rates of so-called sunny day flooding this year because of rising sea levels and an abnormal El Nino weather system. A report released Wednesday by the National Oceanic and Atmospheric Administration predicts that sunny day flooding, also known as tidal flooding, will continue to increase. “The future is already here, a floodier future,” said William Sweet, a NOAA oceanographer and lead author of the study. The report predicted that annual flood records will be broken again next year and for years and decades to come from sea-level rise. “Flooding that decades ago usually happened only during a powerful or localized storm can now happen when a steady breeze or a change in coastal current overlaps with a high tide,” it read. The nationwide average frequency of sunny day flooding in 2018 was five days a year, tying a record set in 2015. But the East Coast averaged twice as much flooding. The agency says the level of sunny day flooding in the U.S. has doubled since 2000. Nationwide, the agency predicted, average sunny day flooding could reach 7 to 15 days a year by 2030, and 25 to 75 days a year by 2050. “We cannot wait to act,” said Nicole LeBoeuf, acting director of NOAA’s Ocean Service. “This issue gets more urgent and complicated with every passing day.”
Creditors Start Asking Coastal Cities For Their Climate Plans - Financial credit rating institutions want answers from coastal cities about how they’re preparing for climate-change impacts like sea level rise and whether they can pay for their adaptation plans, the mayor of Honolulu said July 17.Mayor Kirk Caldwell (D), who has been leading Hawaii’s capital city since 2013, said he was asked for the first time by credit raters like Moody’s Corp. and Fitch Ratings Inc. during recent presentations in San Francisco on municipal bonds about how the city is addressing climate change impacts. For example, Moody’s Analytics in a June report found climate change impacts such as rising temperatures, intensifying extreme weather events, and sea level rise would disrupt communities, threaten infrastructure, and hurt economic productivity. His remarks, during the first hearing of the ad hoc Democratic Senate Committee on the Climate Crisis, underscores the attention financial institutions are increasingly paying to climate change risk.For example, Moody’s Analytics in a June report found climate change impacts such as rising temperatures, intensifying extreme weather events, and sea level rise would disrupt communities, threaten infrastructure, and hurt economic productivity. “They sit there and then look like investment banker type guys, and they’re just concerned about, ‘We’re issuing bonds. We’re rating your bonds. And are you going to be able to pay them back given what’s occurring in your city?’” Caldwell told Democratic senators of his recent presentation.
Why ocean acidification could make some geoengineering schemes irrelevant - The idea of runaway ocean acidification has now joined the idea of runaway global warming as a threat so large that it stands almost co-equal in its danger. Part of the problem with ocean acidification is that geoengineering schemes for lowering Earth's temperature by reducing the sunlight that reaches the Earth's surface won't affect ocean acidification. And recent research from the Massachusetts Institute of Technology suggests that there is a tipping point in acidification beyond which the process becomes self-reinforcing and could lead to a mass extinction. The idea of runaway global warming has been around for a while. In its original form it was speculation about whether the Earth could enter an unstoppable process that appears to have occurred on Venus billions of years ago and boiled its oceans away—leaving a planet so hot that surface temperatures today are high enough to melt lead. A less catastrophic but still frightening form of runaway warming has been called "Hothouse Earth," an Earth 4 to 5 degrees Celsius warmer, that is, up to 9 degrees Fahrenheit hotter. Such scenarios have scientists thinking about geoengineering schemes that could stop such extreme scenarios from occurring. The scientists are considering these schemes because human civilization seems incapable of taking the one truly critical step that those scientists believe is the best option: dramatically reducing greenhouse gas emissions. But those geoengineering schemes which block a portion of sunlight do nothing to prevent the ongoing acidification of the oceans. This occurs as more and more carbon dioxide dissolves in ocean waters. The dissolved carbon dioxide turns into a mild acid, carbonic acid, which interferes with the formation of shells of marine life and many other life processes in the ocean. When those shells fail to form, carbon dioxide previously removed from the water by their formation instead increases in a self-inforcing manner. The greater the concentration gets, the worse the effects will be on marine life. It's difficult to predict how mass death in the world's oceans would affect land species like ourselves, but it is highly doubtful it would be anything but negative. The study cited above demonstrates the possibility that beyond a certain concentration, the carbonic acid triggers a cascade of change in ocean chemistry similar to that believed to have occurred during previous mass extinction events. Given the current pace of acidification, the world's oceans are likely to reach this trigger point by the end of the century.
Greenland Was on Fire This Week Amid 'Unprecedented' Arctic Burn Two years ago, Greenland lit ablaze. It was weird, and a harbinger of things to come on our changing planet. It just didn’t seem like they would come again so soon.Satellites spotted another wildfire in western Greenland this week. The blaze first showed up on Wednesday. Though already out and not on the scale of 2017's inferno, this year’s wildfire highlights the increasing risks of fires in high latitudes and comes in a year that’s seeing an “unprecedented” amount of wildfire activity in the Arctic. The fire lit up near Qeqqata Kommunia on Greenland’s western flank. It appears near a shelter on the Arctic Circle Trail and it’s possible that hikers started the fire unintentionally or otherwise. Fire crews were able to smother the flames according to the Greenlandic Broadcasting Corporation. But forecasts from the European Commission’s Global Wildfire Information System shows that the risk of fires remains high to very high over the next week in western Greenland.“We are experiencing a huge drought,” Karl Jørgen Lennert, a commissioner in the region, told the Greenlandic Broadcasting Corporation. “We got up [sic] early spring and the snow melted very quickly. That is why there is drought all over.”
The Arctic burns with unprecedented fires - Smoke is rising over the forests of Alaska and Siberia. The World Meteorological Organization called the wildfires now burning around the Arctic "unprecedented." The United Nations agency noted that over 100 intense fires burned in the Arctic Circle alone over the past six weeks, releasing more carbon dioxide into the atmosphere than Sweden does in an entire year. A rare fire even ignited in Greenland, amid unusually hot and dry weather.Amplified wildfires are an expected, predictable consequence of a warming climate. This is all the more true in the Arctic, a sprawling region that is heating up twice as fast as the rest of the globe. The profound changes here can be easily observed over the Arctic ocean, too, where sea ice has broken records for melting throughout the 2019 summer.Over the course of 10 days in July, Alaskan wildfires burned an area of land the size of Rhode Island. This is way above normal — though this doesn't match Alaska's extreme burning of 2015. Just across the Bering Sea, in Siberia, NASA satellite images from July 13 show dense smoke swirling over eastern Russia, with red spots designating wildfires. The future may have its many unknowns. But it's almost certain that the Arctic will be a smokier place as the region continues a relentless, accelerating warming trend.
Sea Level Rise: West Antarctic Ice Collapse May Be Prevented by Snowing Ocean Water Onto It - The ice sheet covering West Antarctica is at risk of sliding off into the ocean. While further ice-sheet destabilisation in other parts of the continent may be limited by a reduction of greenhouse gas emissions, the slow, yet inexorable loss of West Antarctic ice is likely to continue even after climate warming is stabilised. A collapse might take hundreds of years but will raise sea levels worldwide by more than three meters. A team of researchers from the Potsdam Institute for Climate Impact Research (PIK) is now scrutinising a daring way of stabilising the ice sheet: Generating trillions of tons of additional snowfall by pumping ocean water onto the glaciers and distributing it with snow canons. This would mean unprecedented engineering efforts and a substantial environmental hazard in one of the world's last pristine regions -- to prevent long-term sea level rise for some of the world's most densely populated areas along coastlines from the US to China. "The fundamental trade-off is whether we as humanity want to sacrifice Antarctica to safe the currently inhabited coastal regions and the cultural heritage that we have built and are building on our shores. It is about global metropolises, from New York to Shanghai, which in the long term will be below sea level if nothing is done" explains Anders Levermann, physicist at the Potsdam Institute for Climate Impact Research (PIK) and Columbia University and one of the authors of the study. "The West Antarctic Ice Sheet is one of the tipping elements in our climate system. Ice loss is accelerating and might not stop until the West Antarctic ice sheet is practically gone."
EIA expects U.S. energy-related CO2 emissions to fall in 2019 - After a 2.7% increase in U.S. energy-related carbon dioxide (CO2) emissions in 2018, EIA’s July Short-Term Energy Outlook (STEO) forecasts a 2.2% decrease in CO2 emissions for 2019. Nearly all of the forecast decrease is due to fewer emissions from coal consumption. Forecast natural gas CO2 emissions increase and petroleum CO2 emissions remain virtually unchanged. Based on data in EIA’s Monthly Energy Review, energy-related CO2 emissions in the first three months of 2019 were largely similar to those in the first three months of 2018. In the first quarter of 2019, EIA estimates that U.S. energy-related emissions totaled 1,367 million metric tons (MMmt), which is nearly equal to those in the first quarter of 2018. The first quarter of the year is typically the period with the highest CO2 emissions in the United States, and therefore, heavily influences the overall annual trend. In the past 30 years, only 6 years have had an overall annual emissions trend that was different than that of the year’s first quarter. If EIA’s emissions forecast is realized, 2019 will be the seventh such year, with overall emissions decreasing from 2018 values despite a first-quarter increase.For the remainder of the year, EIA expects that relatively mild forecast temperatures will keep energy demand and resulting energy-related CO2 emissions below last year’s levels. EIA’s expectations for weather are largely based on forecasts produced by the National Oceanic and Atmospheric Administration’s Climate Prediction Center. EIA forecasts that CO2 emissions from coal will decrease by 169 MMmt in 2019, the largest decrease in CO2 emissions from coal since 2015. Conversely, EIA projects CO2 emissions from natural gas to increase by 53 MMmt. Both changes are largely due to forecast changes in the electricity generation mix as natural gas continues to grow as the most prevalent electricity generation fuel.
Moving away from fossil fuels will be costly and slow … but essential, UBS says - Last year saw global energy demand increase at its fastest rate since 2010, according to a research note from analysts at UBS Monday. The note said that although there was a “growing desire” to transition away from fossil fuels, “demand for most energy resources, including fossil fuels” would continue to rise. It added that while renewable fuel supplies were set to increase at a fast pace, diversification from non-renewable resources would be expensive and time consuming, “Despite growing aspirations to diversify away from fossil fuels, we think demand for most energy resources, including oil, coal, and natural gas, is likely to keep rising over the coming decade,” the UBS analysts said in the research. “We believe supplies of renewable energy will keep rising at an unprecedented pace over the next few decades. But diversification of our current energy resource base away from non-renewable energy resources such as oil, coal, and natural gas on a meaningful scale will be costly and time consuming. We expect the transition to occur only gradually.” However, the research team added that the development of renewable energy was “essential” and a “necessary step in securing our energy future.” The environmental benefits of renewable sources of energy were cited as the “key motivator” for the development of renewables in the near term. The note said that diversification would be needed to “mitigate the risk of instability in energy availability and pricing.” This would be especially pertinent in times of supply or demand shocks in the oil and gas markets, it added. The renewable energy sector employed 11 million people in 2018, according to a recent report from the International Renewable Energy Association (IRENA). Most renewable energy jobs were in the solar photovoltaic industry, which employed 3.6 million people, according to IRENA.
Climate Change Lawsuits Increase Globally - Jerri-lynn Scofield - Climate change lawsuits have now been filed in at least twenty-eight countries, according to a new report Global trends in climate change litigation: 2019 snapshot, published last week by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.I was alerted to this report by an account in the excellent Climate Liability News, Climate Litigation Has Become a Global Trend, New Report Shows.The first such lawsuit was filed in 1990. More than three-quarters of these lawsuits have been filed in the US, where as of May 2019, 1,023 cases have been filed(report, p.2). This litigation is at present concentrated not only in the US, but also in other high-income countries, including Australia, the United Kingdom, New Zealand, Canada, and Spain (see Table 1 below).But this phenomenon is not limited to wealthy countries alone. The report noted that “despite significant capacity constraints, the number of legal cases in low- and middle-income countries has been growing in quantity and importance”:These include cases in Pakistan, India, the Philippines, Indonesia, South Africa, Colombia and Brazil. Litigants in these cases are seeking to hold governments to account for implementation and enforcement of existing mitigation and adaptation goals, embedding concerns about climate change in wider disputes over constitutional rights, environmental protection, land use, disaster management and natural resource conservation (Peel and Lin, forthcoming).Climate change litigation in low- and middle-income countries has already seen initial positive and innovative outcomes. These include the recognition of human rights as a legitimate basis for holding government to account for climate change (Ashgar Leghari v. Federation of Pakistan – see Box 4); recognition of a non-human entity as the subject of rights (Future Generations v. Ministry of the Environment and Others); and recognition of climate change as a relevant consideration in environmental planning (EarthLife Africa Johannesburg v. Minister of Environmental Affairs and Others). Governments comprise the bulk of defendants in these lawsuits, brought by citizens, corporations, and NGOs; but plaintiffs are increasingly targeting companies in actions brought by cities and states, and activist shareholders and investors.
Philanthropists Raise $600 Million for Extinction Rebellion and School Strikers - Heeding the call of grassroots campaigners, several wealthy philanthropists announced Friday a new fund that will raise money for climate action groups around the world. Investor Trevor Neilson, filmmaker Rory Kennedy and Aileen Getty of the Getty Oil family have so far raised more than $625,000 for their Climate Emergency Fund (CEF). The philanthropists plan to raise at least 100 times that amount over the next several months by appealing to other rich and powerful contacts around the globe, calling on them to use their immense wealth to help demand that governments take immediate, decisive climate action. Echoing the message that groups like Extinction Rebellion and the School Strike for Climate movement have been spreading for months, Neilson said he recently realized that most people who hold enough wealth to potentially sway lawmakers haven't grasped that incremental progress to fight the climate crisis is not sufficient. "The world's biggest philanthropists are still in a gradualist mindset," Neilson told The Guardian. "We do not have time for gradualism." Extinction Rebellion, which will receive a large portion of the money raised by the fund so far and which inspired Neilson to use his wealth for the cause, welcomed the development of CEF. "It's a signal that we are coming to a tipping point," said a spokesperson. "In the past, philanthropy has often been about personal interest, but now people are realizing that we are all in this together and putting their money forward for our collective well-being." The money raised by CEF will also go to the School Strike for Climate. Other grassroots campaigners will be able to apply for three levels of funding: for start-ups, groups that want to create a permanent structure for their activism work, and established campaigns that are ready to organize large-scale events and pay salaries to organizers..
Extinction Rebellion Protesters Arrested in London - Six Extinction Rebellion protesters were arrested as they blocked off corporations in the UK. The group had increased their actions to week-long nationwide protests. Hundreds of protesters obstructed the entrance to the London Concrete site beginning on Tuesday. They sported banners outside the company entrance including one saying "The air that we grieve."London Concrete is the capital's biggest supplier of ready-mixed concrete.In a statement, Extinction Rebellion member Eleanor McAree said "concrete has a huge environmental impact and building another tunnel will only make air pollution across East London worse.""Air pollution is already at dangerous levels and is affecting the health of children and adults in the area," she added. Police said they had arrested six people after they were caught trespassing and obstructing a highway.The concrete industry is the third largest emitter of CO2 gas in the world, just behind aviation and energy production, according to the online English newspaper Carbon Brief. It produces more emissions than any country other than the U.S. or China. British think tank Chatham House warned this month that around four billion tons of cement are produced a year. To keep to the Paris agreement, this would have to fall by at least 16% by 2030, their report said.
The extinction rebellion should not be streamed - Out of sight, out of carbon-footprint mind. And that, by and large, is the problem with the digital economy. Since we can’t see or feel the pollution emanating from our selfies and videos streams, there’s a perception these services are boundless.But this, notes the think-tank Shift Project, couldn’t be further from the truth.According to its findings, digital technologies now emit 4 per cent of greenhouse gas emissions, which is more than civil aviation. Glaringly, they add, this share could double from now to 2025 because the energy consumption required for digital technologies is increasing 9 per cent a year.A helluva a lot of that growth is related to video streaming.Which is why the think tank is advocating sobriety: digital technology is important, but not all digital technology is equally important. (For example, does the world really need an army of social media influencers who use streaming for the purposes of monetising their used bath water? The jury’s out.) Some other lesser known facts from the report:
- Online video globally emits as much C02 as Spain (over 300 Mt per year).
- Online video services (like Netflix) accounts for 60 per cent of global data flows.
- If you add Skype, live television streaming and video monitoring the figure hits 80 per cent of global data flows.
- The greenhouse gas emissions of video-on-demand services like Netflix and Amazon prime are equivalent to those of a country like Chile (more than 100 Mt per year).
The breakdown of the video streaming subsection, meanwhile, looks like this:
- 34 per cent = video online streaming (like Netflix)
- 27 per cent = pornography
- 21 per cent = Youtube-type services
- 18 per cent = social media streaming
Society Masturbating Its Way Into Climate Catastrophe- Report --Climate activists - and anyone else who views porn online - are part of the problem, according to a new report. A French think-tank, The Shift Project, reveals that adult material accounts for more than 4% of all carbon dioxide emissions linked to digital technologies, while porn constitutes 27% of all videos viewed online. Talk about a carbon handprint... "...viewing pornographic videos in the world in 2018 generated carbon emissions of the same magnitude as that of the residential sector in France," reads the report. The authors then shift to a moral argument against porn, suggesting that "one of the problems mentioned regarding the effects of consuming pornography at the societal level is the phenomenon of shifting norms: during the consumption of content by an individual, a trend towards increased violence in the content viewed, for example, has been observed, leading to harmful effects on the individual’s sexuality and their perceptions of physical relationships." What's more, men can't seem to jerk off without porn.
What Quebec's goal to be the 'battery' of the Northeast means for New York - Times Union 2000s, according to news reports. Francois Legault, elected Quebec premier last October, has made partnerships with New York State and New York City to reduce carbon emissions "a number one priority," said Catherine Loubier, Quebec's delegate general to New York. "It seems almost an anomaly that we're not delivering more power to New York." The Indian Point nuclear power plant in the lower Hudson Valley is set to close in 2021, removing about 1,900 megawatts of capacity. A new power connection, the Champlain Hudson Power Express, could replace as much as 1,250 megawatts of that capacity. In all, Hydro-Quebec says it has 8,200 megawatts of exportable capacity. New England states took 47 percent of its exported power last year, with New York taking 24 percent. According to its 2019 Load & Capacity Data Report, the New York Independent System Operator imported 11,640 gigawatt hours of electricity from Hydro Quebec in 2018. NYISO operates the state's wholesale market for 7/15/2019 What Quebec's goal to be the 'battery' of the Northeast means for New York- Times Union Developers Inc. CEO Don Jessome told Politico last month that the company was considering expanding its capacity to 1,250 megawatts. .
AEP Seeks Approval for 1.5GW Wind Development in Oklahoma - American Electric Power is asking state regulators for the second time in two years to approve a multibillion-dollar investment into wind power, as it races to capitalize on fleeting federal tax credits. On Monday, AEP announced that its Public Service Co. of Oklahoma (PSO) and Southwestern Electric Power Co. (SWEPCO) utilities are seeking regulatory approval to purchase a total of 1,485 megawatts of wind projects being developed by Invenergy. The three projects in Oklahoma were selected through a competitive RFP launched in January, and the roughly $2 billion investment would help save utility customers about $3 billion, net of costs, over 30 years, the Ohio-based utility group said. This is the second attempt in as many years by PSO and SWEPCO to gain approval for a major wind farm investment from utility regulators in Texas, Oklahoma, Arkansas and Louisiana, the four states in which they operate. Last year, Texas regulators rejected a proposal by SWEPCO to purchase 70 percent of the 2-gigawatt Wind Catcher project, which was to be the single-largest wind farm in the country, citing concerns about whether it was putting too much cost risk onto the utility’s ratepayers. AEP announced it was pulling out of the project a day later, saying any further delays could jeopardize the project’s ability to be completed by 2020. That’s the deadline for wind projects to secure 100 percent of the existing federal Production Tax Credit (PTC),which is set to decline to 80 percent for projects completed by the end of 2021, 60 percent for 2022, 40 percent for 2023, and disappear completely by 2024.
New York gives green light for two huge offshore wind projects in waters off Long Island - New York State has awarded two offshore wind contracts with a combined capacity of almost 1,700 megawatts (MW) in waters off Long Island. The contracts were awarded to Norwegian firm Equinor and a joint venture between Danish company Orsted and U.S. business Eversource. The Empire Wind and Sunrise Wind developments were announced as the winners of New York’s first “comprehensive offshore wind solicitation” on Thursday. The companies will now commence negotiations for long-term contracts with the New York State Energy Research and Development Authority for offshore wind renewable energy certificates. Both projects are expected to commence operations in 2024. Equinor’s 816 MW Empire Wind facility will be made up of between 60 to 80 wind turbines, according to the business. It will cover an area of 80,000 acres and be located southeast of Long Island. Total investments in the facility will amount to around $3 billion, and it will be able to power more than 500,000 homes. The Sunrise Wind project, which is a 50-50 joint venture between Orsted and Eversource, will have a capacity of 880 MW and will be built 30 miles east of Long Island’s Montauk Point. New York is aiming for 9,000 MW of offshore wind by the year 2035. The state’s Governor, Andrew M. Cuomo, described the environment and climate change as “the most critically important policy priorities we face.” “With this agreement, New York will lead the way in developing the largest source of offshore wind power in the nation,” he went on to add. While New York’s plans are ambitious, the offshore wind industry in the U.S. is still in its early stages of development. The country’s first offshore wind farm, the five turbine, 30 MW Block Island Wind Farm, only began commercial operations in late 2016. By comparison, Europe is home 18,499 MW of installed offshore wind capacity, according to industry body WindEurope.
Scotland just produced enough wind energy to power all its homes twice over -Wind turbines in Scotland generated 9,831,320 megawatt hours between January and June 2019, WWF Scotland said Monday. The numbers, which were supplied by WeatherEnergy, mean that Scottish wind generated enough electricity to power the equivalent of 4.47 million homes for six months. That is almost double the number of homes in Scotland, according to WWF Scotland. “Up and down the country, we are all benefiting from cleaner energy and so is the climate,” Robin Parker, climate and energy policy manager at WWF Scotland, said in a statement Monday. “These figures show harnessing Scotland’s plentiful onshore wind potential can provide clean, green electricity for millions of homes across not only Scotland, but England as well,” Parker added. By 2030, the Scottish government says it wants to produce half of the country’s energy consumption from renewables. It is also targeting an “almost completely” decarbonized energy system by 2050. As a whole, Europe is home to some of the world’s most ambitious wind energy projects. September 2018 saw the official opening of the Walney Extension Offshore Wind Farm in the Irish Sea. With a total capacity of 659 MW, it’s currently the world’s largest operational offshore wind farm and capable of powering nearly 600,000 homes in the U.K., according to Danish energy business Orsted.
Does renewables pioneer Germany risk running out of power? (Reuters) - Germany, a poster child for responsible energy, is renouncing nuclear and coal. The problem is, say many power producers and grid operators, it may struggle to keep the lights on. The country, the biggest electricity market in the European Union, is abandoning nuclear power by 2022 due to safety concerns compounded by the Fukushima disaster and phasing out coal plants over the next 19 years to combat climate change. In the next three years alone conventional energy capacity is expected to fall by a fifth, leaving it short of the country’s peak power demand. There is disagreement over whether there will be sufficient reliable capacity to preclude the possibility of outages, which could hammer the operations of industrial companies. The Berlin government, in a report issued this month, said the situation was secure, and shortfalls could be offset by better energy efficiency, a steadily rising supply of solar and wind power as well as electricity imports. Others are not as confident, including many utilities, network operators, manufacturing companies and analysts. Katharina Reiche, chief executive of the VKU association of local utilities, many of which face falling profitability as plants close, said the government’s strategy was risky because it had not stress-tested all scenarios. She said if the coal exit plan was not accompanied by a mandatory, risk-oriented monitoring of supply security, it would be like “walking a tightrope without a safety net”. Utilities and grid firms say if the weather is unfavorable for lengthy periods, green power supply can be negligible, while storage is still largely non-existent. Capacity aside, the network to transport renewable power from north to south is also years and thousands of kilometers behind schedule, they add.
The UK government wants to fit all new homes with charging points for electric cars - The UK government unveiled plans which could see all new-build homes fitted with electric-car charging points. The plans, which were laid out in a consultation published Monday, would look to support what the government described as “the growing uptake of electric vehicles within the U.K.” If put into practice, all new-build homes with dedicated parking spaces would have charging points to make vehicle charging cheaper and more convenient for drivers. In addition, authorities want all newly-installed rapid and higher-powered public charge points to take debit or credit card payments by the spring of 2020. In a statement Monday, Transport Secretary Chris Grayling said that there was “an appetite for cleaner, greener transport.” “Home charging provides the most convenient and low-cost option for consumers — you can simply plug your car in to charge overnight as you would a mobile phone,” Grayling added. Currently, electric car users can apply for a grant of up to £500 off the cost of installing a charge point at their residence. While electric vehicles are becoming the car of choice for an increasing number of drivers, they nevertheless face challenges, not least when it comes to perceptions surrounding range and charging infrastructure.
Column: Why the cobalt market needs Congo's illegal miners - The death last month of 43 artisan miners at the Kamoto Copper Company KOV concession in the Democratic Republic of Congo has refocused attention on the human cost of producing what is a key input into electric vehicle (EV) batteries. The KOV concession is majority-owned by a subsidiary of trading and mining group Glencore.The official response to the incident - sending the army to clear around 20,000 “illegal” miners from the area around the mine - merely underlines the problematic nature of the world’s dependence on Congo for its supply of cobalt. The country accounted for around 64% of global mined production last year, according to the United States Geological Survey (USGS). The latest incidents will do nothing to reassure automotive companies about the future stability of sustainable supply and will incentivise them further to try and reduce the amount of cobalt in EV batteries. However, for now they’re stuck with the stuff since nickel-manganese-cobalt chemistry remains the bedrock of passenger vehicle batteries, albeit with varying composition ratios. And that means they’re stuck with the Congo’s artisanal miners, who collectively represent the cobalt market’s swing capacity.In many industrial metal markets swing capacity comes from the small-scale mine sector in China or scrap, which is notoriously price sensitive. In the case of cobalt, swing capacity comes from the hundreds of thousands of artisanal miners operating in the Congolese copper-cobalt belt.
Con Ed warns more blackouts could be coming - Con Edison warned Monday that New Yorkers may have to endure another blackout this weekend, when the temperature is expected to reach a sweltering 97 degrees — and feel like 106.“We expect that there could be service outages — those things happen during heat waves,” company spokesman Mike Clendenin said.Later in the day, Con Ed further fueled fears of a potential power outage when it completely backtracked and blamed a fault in a 13,000-volt power cable that caught fire for triggering Saturday’s blackout.On Sunday, company President Timothy Cawley had called the idea of tying the incident to the failed cable “sort of a non-starter.”AccuWeather predicted four straight days of 90-plus degree temperatures beginning Friday, with a 97-degree peak on Saturday, when humidity and other factors will make it feel even worse.Saturday night’s power outage — which struck while temperatures were merely in the low 80s — led Gov. Cuomo to threaten that the state might revoke Con Ed’s operating license ecause the company “does not have a franchise granted by God” and “can be replaced.”
Why Stimulus Can't Fix Our Energy Problems - by Gail Tverberg - Economists tell us that within the economy there is a lot of substitutability, and they are correct. However, there are a couple of not-so-minor details that they overlook:
- There is no substitute for energy. It is possible to harness energy from another source, or to make a particular object run more efficiently, but the laws of physics prevent us from substituting something else for energy. Energy is required whenever physical changes are made, such as when an object is moved, or a material is heated, or electricity is produced.
- Supplemental energy leverages human energy. The reason why the human population is as high as it is today is because pre-humans long ago started learning how to leverage their human energy (available from digesting food) with energy from other sources. Energy from burning biomass was first used over one million years ago. Other types of energy, such as harnessing the energy of animals and capturing wind energy with sails of boats, began to be used later. If we cut back on our total energy consumption in any material way, humans will lose their advantage over other species. Population will likely plummet because of epidemics and fighting over scarce resources.
Many people appear to believe that stimulus programs by governments and central banks can substitute for growth in energy consumption. Others are convinced that efficiency gains can substitute for growing energy consumption. My analysis indicates that workarounds, in the aggregate, don’t keep energy prices high enough for energy producers. Oil prices are at risk, but so are coal and natural gas prices. We end up with a different energy problem than most have expected: energy prices that remain too low for producers. Such a problem can have severe consequences. Let’s look at a few of the issues involved:
- [1] Despite all of the progress being made in reducing birth rates around the globe, the world’s population continues to grow, year after year.
- [2] This growing world population leads to a growing use of natural resources of every kind.
- [3] The years during which the quantities of material resources cease to grow correspond almost precisely to recessionary years.
- [4] World energy consumption (Figure 4) follows a very similar pattern to world resource extraction (Figure 2).
- [5] The world economy seems to need an annual growth in world energy consumption of at least 2% per year, to stay away from recession.
- [6] In the years subsequent to 2011, growth in world energy consumption has fallen behind the 2% per year growth rate required to avoid recession.
- [7] The growth rates of oil, coal and nuclear have all slowed to below 2% per year since 2011. While the consumption of natural gas, hydroelectric and other renewables is still growing faster than 2% per year, their surplus growth is less than the deficit of oil, coal and nuclear.
- [8] The economy needs to produce its own “demand” for energy products, in order to keep prices high enough for producers. When energy consumption growth is below 2% per year, the danger is that energy prices will fall below the level needed by energy producers.
- [9] There are two different ways that oil and other energy prices can damage the economy: (a) by rising too high for consumers or (b) by falling too low for producers to have funds for reinvestment, taxes and other needs. The danger at this point is from (b), energy prices falling too low for producers.
- [10] The recession that comes closest to the situation we seem to be heading into is the one that affected the world economy in 1991 and shortly thereafter.
Why did the state OK a new natural gas power plant in Killingly when the move is to renewable energy? - Hartford Courant --For those of us who follow the development of energy policy in Connecticut, June 6, 2019, will be remembered as the day of cognitive dissonance in the Nutmeg State.On that day, while the Senate in the state legislature unanimously passed a 2,000 MW off-shore wind turbine bill, which had been previously passed by the House by an overwhelming majority, 134-10), the Connecticut Siting Council approved a controversial proposal to build yet another natural gas power plant — a 650 MW facility — in Killingly, a small town near the border of Rhode Island, already burdened with air pollution from an existing power plant.Wasting no time, Gov. Ned Lamont signed the bipartisan, off-shore wind turbine bill on June 7. On that occasion, the governor stated, “Connecticut should be the central hub of the offshore wind industry in New England. This emerging industry has the potential to create hundreds of good paying jobs for the residents of our state and drive economic growth in towns along our shoreline ... By adopting this new law, we are sending a clear message — Connecticut is serious about becoming a major player in the clean energy economy.” In other words, the state of Connecticut has taken a determined and enterprising step in entering the post-fossil fuel, clean energy age. Yet, the siting council made an unwise decision that negates that bold and timely move by Connecticut’s legislature. Some two years ago, a similar proposal to construct the natural gas power plant in Killingly by the Florida-based company, NTE Energy, was rejected by the siting council. At that time, the siting council stated that “the proposed facility is not necessary for the reliability of the electric power supply of the state or for a competitive market for electricity at this time.” Now that Gov. Lamont and the legislature have taken steps to move the state in a different direction, it is even more puzzling why the siting council has seen fit to approve a fossil-fuel based power plant.
In Appalachia, a massive forest is conserved, but mining can still proceed beneath its roots - A massive land acquisition by the Nature Conservancy has created a block of forestland in the heart of the Central Appalachian coalfields that may be disturbed by an activity typical of the region but atypical of conservation sites: mining.Early Monday morning, the global environmental nonprofit announced it had added 153,000 acres in Virginia known as Highlands-Lonesome Pine to its Cumberland Forest Project. When combined with an existing 100,000 acres of forest in Kentucky and Tennessee, the total footprint of the site amounts to a quarter-million acres, larger than Shenandoah National Park. Unlike Shenandoah, however, mining is likely to occur within the forest’s borders, since the Nature Conservancy only owns the surface rights to the acreage. Rights to mine the coal and oil that lie beneath the land will continue to be held by companies including EnerVest, which is headquartered in Texas but operates an office in Abingdon, and West Virginia-based Natural Resource Partners. Brad Kreps, director of the Nature Conservancy’s Clinch Valley Project in southwestern Virginia, said that he expects that mining will only occur on “a small percentage of the properties,” given declines in the use of coal as an energy source.The Nature Conservancy will receive payments from mine operators as compensation for damages to the land, as well as royalties on any coal produced. Those revenues will then be channeled toward site restoration efforts and local organizations engaged in developing a local nature-based economy.As the surface owner, furthermore, the conservancy will have the right to designate how any mined lands should be reclaimed once mining has ceased. “Since the long-term restoration of the forest is one of our highest priorities, we’re going to be interested in designating post-mining land uses that are focused on restoring native forests,” said Kreps.
Coal-fired power plant putting too-hot water into river, groups say --- The Sierra Club is threatening to sue the owners of a coal-fired power plant near Pittsburgh for releasing water that is too hot into the Allegheny River. The group sent a Clean Water Act 60-day “Notice of Intent” to sue letter to the plant’s owners. It warned of legal action if the plant doesn’t meet requirements under its pollution discharge permits. The Cheswick plant uses steam from its coal-fired boilers to create electricity. Under the terms of a clean water permit, the plant is allowed to release that water into the Allegheny River, but it’s not allowed to raise the river’s water temperature more than two degrees Fahrenheit. A series of tests done by the plant in 2012 found it had raised the river’s temperature much higher than that. The tests revealed the plant discharge was heating the river by 18 degrees Fahrenheit in one case, and the plume of hot water was detected more than a mile downstream. Higher water temperatures can be bad for some fish species because it lowers oxygen levels. The Sierra Club conducted its own survey this month and found the river temperature was increased by seven degrees Fahrenheit near the plant in some cases, said the Sierra Club’s Patrick Grenter. “The Cheswick plant is just dumping superheated water into the Allegheny River every single time they operate,” Grenter said. “We’re seeing temperatures up to 18 degrees Fahrenheit warmer in the water than it should be. This has huge impacts.” Grenter says other plants use cooling towers to lower the temperature of their water before releasing it. “Cheswick is the only coal plant left in Pennsylvania without methods to control this pollution,” Grenter said.
Wetter weather worsens risks from coal ash ponds, environmental advocates report - Ohio’s wettest 12-month period on record highlights the risk flooding can present to power plants’ coal ash ponds, but groundwater contamination remains a continuing concern for environmental advocates.“We know that there’ve been many coal ash spills because of floods in the past,” said policy analyst Gideon Weissman at the Frontier Group in Boston. Just last year, floodwaters from Hurricane Florence swept coal ash into North Carolina’s Neuse River, for example.Coal ash ponds can cause contamination from arsenic, mercury, selenium, lead, boron, bromine and other compounds, Weissman said. Those chemicals can harm human health. Some of them also build up in fish over time. And in some circumstances, coal ash spills can blanket riverbeds and smother species, according to a 2019 report from Frontier Group, Environment America and the U.S. Public Interest Research Group Education Fund. In the Midwest, 21 coal plants have ash ponds within a quarter-mile of the Ohio River, that report noted. “And five of those coal plants were in 100-year flood zones,” Weissman said. “The Ohio River is a critical piece of our landscape. And it also supplies drinking water for more than 3 million people.” Ohio plants near the river include the W.H. Zimmer power plant in Moscow, the J.M. Stuart plant in Aberdeen, the General James M. Gavin plant in Cheshire, and the W.H. Sammis plant in Stratton. June ended Ohio’s wettest 12-month period since record-keeping began in 1895, the National Oceanic and Atmospheric Administration reported earlier this month. “The entire Ohio [River] has been for the most part really elevated for the past year,” NOAA hydrologist James Noel said in mid-June. “We’re running like maybe four times the normal flow” for some of the upper sections, he added. Closer to Cincinnati, the volume was “maybe five times the normal flow.” Yet an Obama-era rule let power plant owners “continue to store coal ash in unlined pits despite the overwhelming evidence that this practice causes dangerous groundwater contamination and is vulnerable to catastrophic flooding events and spill.” Industry reports show that more than 95% of U.S. coal ash ponds are unlined, Earthjustice found. So while catastrophic spills “get a lot of attention, the most tragic harms from coal ash happen in slow motion: from the steady leaking of pollution from unlined pits into groundwater and nearby water bodies,”
As black lung surges among former coal miners, clinics expand to meet growing demand - In a hospital in far Eastern Kentucky this week, a stone’s throw from the West Virginia border, a group of former coal miners wore oxygen masks and heart monitors and walked on treadmills about as far as they could. They are patients of New Beginnings Pulmonary Rehab, a group of clinics in Central Appalachia that focuses on strengthening the lungs of former miners afflicted with black lung disease, a deadly and incurable illness whose prevalence has spiked in recent years. With the disease surging across the region, New Beginnings is scheduled to double its number of clinics with three new openings — one in Harlan on Sept. 1; one in Tazewell, Va., on Oct. 1; and one in Elkhorn City in Pike County, that will open later this year or in early 2020. Marcy Tate, who opened the first clinic six years ago in Norton, Va., said the expansion will create space for dozens more patients and provide easier access to care — some former miners drive more than 100 miles each way to access pulmonary care. The Harlan location already has 46 patients screened and ready to attend when it opens Sept. 1, as well as transfer patients who live in Harlan County but have to drive over winding mountain roads to clinics in Whitesburg or Norton. Read more here: https://www.kentucky.com/news/state/kentucky/article232538227.html#storylink=cpy
Another major coal producer will file for bankruptcy. It employs 2,800 in KY and WV. --Blackhawk Mining, LLC., a coal company with 2,800 employees in Kentucky and West Virginia, plans to file for Chapter 11 bankruptcy later this week, according to documents released by the company.Blackhawk, based in Lexington, said in its proposed filings that the company has enough revenue to continue operating its mines during the bankruptcy and that it does not anticipate layoffs as a result of the reorganization. The announcement marks the latest in a string of bankruptcy cases from coal companies active in Eastern Kentucky.Meanwhile, Kentucky Attorney General Andy Beshear released a letter Tuesday asking the Office of the United States Trustee for “the immediate payment” of hundreds of Kentucky miners left out-of-work by the recent bankruptcy of Blackjewel, LLC, another major coal producer. In that case, employees of Blackjewel had their paychecks removed from their bank accounts earlier this month. Another check, due this past Friday, never came. That left miners and their families with overdrawn bank accounts and uncertainty over their finances.
Death Spiral.” How A Carbon Tax Could End Some Coal Towns … Or Fund A New Future --Declining coal tax revenues place coal-reliant counties in Appalachia at risk of fiscal collapse, according to new research from the centrist Brookings Institution and Columbia University. Policies designed to prevent further climate change would accelerate that decline, the report found, but could also provide a new stream of revenue to help communities rebound from coal’s demise. The report, published by Brookings and the Center on Global Energy Policy at Columbia, quantified how much of a coal-producing county’s budget came from coal, via severance taxes, property taxes, and contracts such as royalties and lease bonuses. Then authors analyzed what it might mean for those county governments if the U.S. instituted a modest price on carbon emissions. The report found that under such a policy, counties that are reliant on coal would be at risk of defaulting on bonds, failing to provide basic services such as waste removal or infrastructure maintenance, and even bankruptcy. Adele Morris, senior fellow and policy director at the Brookings Institution and one of the report’s co-authors, said the loss of tax revenue from coal producers would have far-reaching consequences.“You have the workers who are dislocated, you have the loss of property tax and sales tax revenue, people are closing schools and limiting other government services, and then what happens is, people move away,” she said. “And then you get this sort of death spiral.” The report notes that many coal communities are already experiencing some of these effects without a climate policy in place. Coal employment declined by 50 percent in Appalachia between 2011 and 2016, and according to recent data from the Appalachian Regional Commission, 190 of 420 Appalachian counties are considered distressed or at risk, in no small part due to the downturn in the coal industry.
Coal left Appalachia devastated. Now it’s doing the same to Wyoming -Wyoming is facing a potential crisis. Coal mines have shut down, hundreds of people are out of work, unemployment offices are overwhelmed, and there appears to be worse to come.The coal industry, long seen as a friend and economic linchpin in the state, is falling apart, and the very communities that have supported it most are getting screwed over in the process.This wasn’t supposed to happen in Wyoming. After all, it’s not like Appalachian coal country (West Virginia, eastern Kentucky, and Pennsylvania, along with eastern Ohio and parts of Alabama, Maryland, Tennessee, and Virginia).Appalachia, which has been ground into codependent poverty by the coal industry over the course of a century, has been declining, in coal output and employment, for decades. Lately it has only gotten worse, as companies declare bankruptcy, executives get healthy bonuses, polluted coal mines are abandoned, and miners and retirees are denied long-promised health benefits and pensions. But it has long been industry conventional wisdom that Western coal would continue to prosper, at least for a while. The coal boom in the Powder River Basin — the largest coal basin in the US, the source of 40 percent of American coal, spanning northeast Wyoming and southeast Montana — dates back to the early 1970s. It has resulted in a few large companies with deep local roots, their taxes funding infrastructure and schools. Their steady profitability has made coal the heart of several Western communities. There are 13,000 coal-dependent jobs in the PRB. It’s beginning to look like conventional wisdom was wrong. Western coal is declining too, and as it does, vulture capitalists are buying up mines, squeezing out the last bit of profits, and declaring bankruptcy, leaving behind an environmental mess and workers without jobs or pensions. It’s shaping up to be Appalachia all over again, in communities that were told it would never happen.
Japan shows coal's dilemma: More needed now, less in future - Clyde Russell (Reuters) - The dilemma facing thermal coal miners is neatly encapsulated by the current dynamics of Japan, where robust short-term demand contrasts with a diminishing long-term outlook. Japan, the world’s third-biggest coal importer behind China and India, is planning on returning coal-fired power plants with a combined capacity of more than 10 gigawatts (GW) in the next few weeks in order to meet peak summer demand. The countries utilities are preferring to restart coal generation than use cleaner burning liquefied natural gas (LNG), which is considerably more expensive. A gigawatt of power generation requires about 3.5 million tonnes of a coal a year, so it’s likely that Japan’s imports of the polluting fuel will rise for the next few months. Already vessel-tracking and port data compiled by Refinitiv suggest a boost in imports, with 13.4 million tonnes offloaded in June, up from 12.9 million in May and 12.5 million in June last year. Refinitiv estimates that Japan will import about 14.3 million tonnes of coal in July, which would be the strongest month since March, although lower than 15.3 million tonnes in July last year. These figures include coking coal used to make steel, but it’s likely that the gains will be concentrated in thermal coal given that Japan’s steel output is expected to remain largely steady over the northern summer. If the Refinitiv data for June is borne out by official numbers when they are released at the end of this month, it will mark a reversal of the trend this year to lower coal imports. But while coal exporters, particularly Japan’s biggest suppliers Australia and Indonesia, may relish the return of coal-fired power for summer, the longer-term outlook for Japan isn’t nearly so rosy. Japan’s pipeline of coal-fired power projects is shrinking as utilities, trading houses and banks become increasingly reluctant to propose and finance new generators.
Three Mile Island’s 60-year shutdown: ‘More akin to a marathon than a sprint' --The Three Mile Island Unit 1 nuclear reactor shutdown, which is set to begin no later than Sept. 30, will take nearly 60 years and $1.2 billion to complete. The Nuclear Regulatory Commission (NRC) is outlining Exelon Generation’s plans to decommission TMI Unit 1, whose closure was announced in May after it became clear that the Pennsylvania General Assembly would not approve a financial rescue of the state’s nuclear plants. The federal agency is conducting a public webinar on Tuesday afternoon on the decommissioning, and a public meeting in Harrisburg next week. Exelon’s decommissioning schedule, which was spelled out in a plan released in April, calls for the immediate removal of Unit 1′s nuclear fuel from the reactor after shutdown. The uranium fuel-rod assemblies would cool in spent fuel pools for three years until they are moved to above-ground sealed canisters in 2022. But the reactor’s cooling towers and other large components would remain standing until 2074, according to Exelon’s Post-Shutdown Decommissioning Activities Report. All radioactive material would be safely stored or removed from the site by 2078. A plant decommissioning is “more akin to a marathon than a sprint,” Jack Parrott, senior project manager of the NRC’s reactor decommissioning branch, told reporters in a briefing Tuesday. The NRC’s interest is to oversee decontamination and removal of radioactive material from the site; restoration of the site to a greenfield is managed by the state and the property owner. Under federal regulations, plant operators have 60 years to clean up a site after a plant closes. The long-term decommissioning method, called SAFSTOR, allows radioactive levels to decline for decades before workers have to dismantle contaminated components, the NRC says. Exelon said the $1.2 billion cost to decommissioning the plant would be financed from a trust fund into which the power plant’s customers have paid since the plant went online in 1974. Exelon or its successors would be responsible for paying any fund shortfall. The advantage of the more rapid decontamination strategy is that it allows the owner to employ workers experienced with the plant. It also makes the site available for reuse sooner. Exelon acquired Unit 1 in 1999, two decades after the infamous nuclear accident that destroyed its twin in the nation’s worst commercial accident. The damaged reactor, owned by FirstEnergy Corp., is now dormant and is awaiting full decommissioning in tandem with the shutdown of Exelon’s plant.
Lawmakers quietly explore storing spent nuclear fuel - Wyoming legislative leadership voted by email Monday to explore temporarily storing spent nuclear fuel rods in the state, a prospect one senator says could bring in $1 billion a year.A legislative committee has appointed six of its members to investigate the idea with the U.S. Department of Energy, Sen. Jim Anderson (R-Casper) told WyoFile on Friday. Anderson is co-chairman of the Joint Minerals Business and Economic Development Committee which received approval and funding from the Legislative Management Council in an unannounced vote to study the issue before the next legislative session begins in early 2020.Wyoming’s dependence on an ailing coal industry spurred talk about pursuing the temporary storage idea, Anderson said. Fuel rods would be housed in casks with two-foot-thick walls, he said. “We’re losing a lot of revenue off coal,” he said. ‘We’ve got a huge problem,” with the state budget. Blackjewel LLC, the owner of two coal mines outside Gillette, shut their gates last week amid bankruptcy turmoil, putting some 600 miners out of work. In addition to the lost jobs, Wyoming could miss out on taxes if the mines don’t reopen, accelerating an already bleak decline in state revenues from that industry. The state is looking for other revenue options, Anderson said, and “this is a way.” The federal government could pay up to $1 billion a year for the temporary storage, he said, depending on the size and scope of a Wyoming project. That’s the amount the federal government offered last time Wyoming considered the issue about 15 years ago, he said.
Fewer Inspections for Aging Nuclear Plants, Regulators Propose - NYT — A new report by staff members of the Nuclear Regulatory Commission, which oversees the safety of the nation’s59 aging nuclear power plants, recommends that the commissioners significantly weaken or reduce safety inspections of the plants.The report, published Tuesday, comes after a yearlong consultationand public meeting process, including views from the Nuclear Energy Institute, which lobbies on behalf of the nuclear power plant industry and has long sought weaker safety rules. It also comes amid a broader push by the Trump administration for reduced regulations on industry.Democrats in Congress and nuclear safety advocates criticized the report’s proposals, saying they reflect the influence of an industry seeking to cut regulations rather than improve public safety.The proposal comes as most of the nation’s nuclear power plants, which were designed and built in the 1960s or 1970s, are reaching the end of their original 40- to 50-year operating licenses. Many plant operators have sought licenses to extend the operating life of their plants past the original deadlines, even as experts have warned that aging plants come with heightened concerns about safety. Among the chief recommendations in the new report, sent from Margaret M. Doane, the agency’s executive director for operations, to the panel of commissioners, is to decrease inspections of nuclear operators’ safety programs from once every two years to once every three years. That change would require a vote of approval by the commission.
'An Insanely Bad Move': Experts Sound Alarm as Trump's Nuclear Safety Agency Weighs Rollback of Plant Inspections - After months of experts raising alarm over the nuclear power industry pressuring U.S. regulators to roll back safety policies, staffers at the federal agency that monitors reactors sparked concerns Tuesday with official recommendations that include scaling back required inspections to save money.The Nuclear Regulatory Commission (NRC) has spent months reviewing its enforcement policies—and, as part of that process, sought input from industry groups, as Common Dreams detailed in March. In response, the industry representatives requested shifting to more "self-assessments," limiting public disclosures for "lower-level" problems at plants, and easing the "burden of radiation-protection and emergency-preparedness inspections."According to The Associated Press, which first reported on NRC staffers' suggestions:The recommendations, made public Tuesday, include reducing the time and scope of some annual inspections at the nation's 90-plus nuclear power plants. Some other inspections would be cut from every two years to every three years. Some of the staff's recommendations would require a vote by the commission, which has a majority of members appointed or reappointed by President Donald Trump, who has urged agencies to reduce regulatory requirements for industries.The NRC document that outlines the recommendations reportedly acknowledges that staffers disagree about the inspection reductions but claims that cutting back "improves efficiency while still helping to ensure reasonable assurance of adequate protection to the public."Union of Concerned Scientists nuclear power expert Edwin Lyman, however, charged that the suggestion to decrease federal oversight of nuclear power plants "completely ignores the cause-and-effect relationship between i nspections and good performances."
Russian Nuclear Reactors Taken Offline In 2nd Serious Incident In Under A Week - In a deeply worrisome development related to Russia's network of ten nuclear power plants nationwide, two of them suffered significant operating incidents in under only one week, causing multiple reactors to be take offline. Russia's TASS reported that a "transformer short circuit" at the Kalinin nuclear power plant (NPP) resulted in "a complete shutdown of two and a partial shutdown of another power unit in the Tver region" early on Thursday. In total 3 out of the 4 nuclear plant's reactors had to be unplugged. Hours later, as evening fell, Reuters reported one or more of the units suffering shutdown were back online. Russia is well-known as among the world's largest producers of nuclear energy.The Kalinin plant is north-west of Moscow in central Russia and has been operational since the mid-1980's, with the last major known accident in 2016, in which two workers were injured when a power unit short circuited. Its newest reactor, No. 4, went operational in 2011. Rosenergoatom, a subsidiary of state nuclear corporation Rosatom, issued a statement stressing there was no need for panic or alarm. "The radiation level at the station and surrounding territory remains without change and is in line with normal background levels," the company said.
Radiation from atomic testing in Marshall Islands still too high for human habitation - A team of researchers from Columbia University has found that radiation levels from atomic testing in the Marshall Islands are still too high for human habitation. In their paper published in Proceedings of the National Academy of Sciences, the group describes radiation readings of soil samples from four of the islands, and what they found. Over the years 1946 to 1958, scientists working for the U.S. government carried out 67 nuclear explosion tests in the Bikini and Enewetak atolls in the Marshall Islands. The tests were conducted to learn more about nuclear weapons and their destructiveness. Prior to conducting such tests, officials with the U.S. forcibly removed the atoll residents to other sites in the Marshall Islands. During testing, researchers discovered that fallout was reaching two other inhabited atolls (Rongelap and Utirik), so those people were moved, as well. After testing ended, officials with the U.S. government met with officials from the Marshall Islands to discuss the possibility of cleaning up the test sites, and when the relocated people might return. In this new effort, the researchers ventured to all four of the atolls and tested soil samples for radiation. The researchers tested soil samples on 11 islands that were part of the four atolls, and found that external gamma radiation levels varied greatly from test to test. They further report that some of the levels were much higher than expected, and far exceeded the legal exposure limit that was agreed to by officials with both countries. Levels on Bikini, for example, were measured as high as 648 millirems per year. The "safe" level set by governmental agreement is 100 millirems per year. The researchers note such levels are also much higher than those found around the Chernobyl and Fukushima nuclear accident sites. The same group of researchers also conducted two prior tests—one that involved measuring radiation levels in fruit from trees in the affected areas, and another that studied the crater created by the largest explosion to take place in the region. They reported in papers also published in PNAS that they found radiation levels in fruit too high for human consumption on many of the islands. They also found that radiation levels in soil sediments in the crater were still several orders of magnitude higher than normal levels.
Radioactive coconuts: The legacy of nuclear testing in the Pacific - Radioactivity can still be found in the soil and food decades after the US ended nuclear testing in the Marshall Islands, with the highest levels found at the infamous Bikini Atoll. Three new papers, published in the noted journal PNAS (Proceedings of the National Academy of Sciences of the United States of America), show that gamma radiation can still be found even more than half a century since testing in the region ended. One of the studies showed that fruits, including coconuts, grown in some of the northern Marshall Islands are contaminated with a radioactive isotope of caesium at much higher levels than those found near Chernobyl or Fukushima. Dr David Krofchek from the University of Auckland said the three papers are the "first large scale measurements of radioactive isotopes produced from the US testing of nuclear weapons from 1946 through 1958 in the Marshall Islands". "Foods tested, coconuts and pandanus, show a variety of radioactivity levels with the lowest levels detected in fruits from atolls farthest away from the weapons test sites. Northern atolls where most weapons tests were performed showed the much higher radioactivity levels. Bikini Atoll had considerably larger levels, well above most international norms for food safety. Research needs to be done on local sea food." Krofchek added: "Both Bikini and Naen atolls also had the highest soil radiation, mostly from gamma rays, than any of the southern atolls. Bikini, which maintained the highest population before 1946, is certainly too contaminated to consider for population relocation." The resident population of Bikini was relocated in 1946 before the US began the nuclear testing where 23 devices were tested across seven sites. An attempt was made by some of the residents to return in 1972, after US testing showed that radiation levels were safe.
Radiation in Parts of Marshall Islands Is Higher Than Chernobyl - Radiation levels in some regions of the Marshall Islands in the central Pacific, where the United States conducted nuclear tests during the Cold War, are far higher than in areas affected by the Chernobyl and Fukushima nuclear disasters, according to new research from Columbia University.Three studies published July 15 in Proceedings of the National Academy of Sciences (PNAS) by a Columbia research team, led by Emlyn Hughes and Malvin Ruderman from the Columbia Center for Nuclear Studies, showed that the concentration of nuclear isotopes on some of the islands was well above the legal exposure limit established in agreements between the U.S. and Republic of the Marshall Islands. The studies measured soil samples, ocean sediment and a variety of fruit.Nearly 70 nuclear bombs the United States detonated between 1946 and 1958 left widespread contamination on the islands, a chain of atolls halfway between Australia and Hawaii. The largest nuclear detonation, "Castle Bravo," in 1954 at Bikini Atoll, was 1,000 times more powerful than either of the bombs dropped on the Japanese cities of Hiroshima and Nagasaki.The Marshall Islands have experienced rapid growth since the 1960s. Most of the nation's residents live on two crowded islands and are unable to return to their home islands because of nuclear contamination. Nuclear fallout from the tests is most concentrated on the Bikini, Enewetak, Rongelap and Utirik atolls. "Based upon our results, we conclude that to ensure safe relocation to Bikini and Rongelap Atolls, further environmental remediation... appears to be necessary to avoid potentially harmful exposure to radiation," wrote the study authors, who also include Ivana Nikolic Hughes, associate professor of chemistry at Columbia.
Column: Abundance of shale makes nuclear plants expendable - Opinion - The Columbus Dispatch - It’s time — past due time — to bury nuclear power. A week doesn’t go by without reports of safety and performance problems at decades-old U.S. nuclear plants. More than one-third of the plants are unprofitable or scheduled to close. Cheap natural gas and renewables are threatening the profitability of nuclear plants around the country — and bringing home the reality that America can do better for its money than bailing out money-losing plants. Using nuclear power to provide one-fifth of the nation’s electricity when cheaper and safer alternatives are available is nonsensical. You don’t need science or economics to know that. Goodness knows how much consumers would benefit from closing financially ailing nuclear plants like the Perry and Davis-Besse reactors in Ohio. The nuclear industry still hopes to persuade state governments to provide billions of dollars in financial assistance to keep plants operating. But to say that such subsidies are counterproductive and jeopardize economic growth is a dramatic understatement.One would be hard-pressed to find a better poster child for the nuclear industry’s problems than Ohio. FirstEnergy Solutions, the Akron-based company which operates the Davis-Besse and Perry plants, has said both units are slated to close by 2021 unless the state government steps in and provides financial assistance. Both plants have a long history of safety violations, the most recent being problems with backup emergency diesels that caused the reactor core meltdowns at the Fukushima plant in Japan. Yet some members of the state legislature want to keep the plants in service. A House committee has approved a bill that would provide about $170 million annually for the Davis-Besse and Perry plants. Households and businesses would pay for the subsidies. The shale revolution has made natural gas so cheap that it is displacing coal and emerging as a winner in competition with nuclear power. This has meant lower costs for consumers. In the past decade, natural gas generation has grown from 1.6% of Ohio’s electricity supply to more than 34% in 2018. Price has tilted the playing field to make gas the preferred source of fuel for generating electricity. There is no excuse for the continued use of coal and nuclear power.
New version of nuclear bailout bill would bolster solar projects in state - A Senate committee on Monday rolled out yet another version of a bill that bails out the state’s two nuclear plants, but now increases support for renewable energy in Ohio while still promising lower electricity bills for consumers. The Senate Energy and Public Utilities Committee could vote on House Bill 6 as soon as Wednesday after considering more amendments, said Sen. Steve Wilson, R-Maineville, the committee’s chairman. “We still have more work to do on this bill, but we’re really close,” he said during the committee meeting Monday. As has been the case since the legislation was introduced in the spring, FirstEnergy Solutions, the operator of the Davis-Besse and Perry nuclear plants in northern Ohio, would be the big winner under the proposal. The company, spun off from Akron-based FirstEnergy and operating under bankruptcy protection, has said it will shut down the plants unless it gets help. The plants are the main source of carbon dioxide-free electricity in the state and provide about 1,400 jobs between them. Starting next year, customers would pay 85 cents a month on their electricity bill with nearly 90% of the money raised by that fee, or about $150 million year, used to shore up those plants. The rest of the money, about $20 million a year, would support solar projects to be developed in Ohio. The legislation identifies six solar projects that likely would be eligible for funding. The money for FirstEnergy Solutions would be subject to annual review, so the subsidy could be reduced or eliminated in future years if it were no longer necessary. The subsidy would be discontinued by 2026.
Nuclear bailout bill clears Ohio Senate - The owner of the state’s two nuclear power plants is one step closer to a nearly $1 billion bailout that it says it needs to keep the plants operating.The Ohio Senate approved 19-12 its version of House Bill 6 on Wednesday and returned it to the House to see whether representatives will agree with the substantial changes senators made to the bill the House passed in May. If the representatives don’t, a conference committee made up of representatives and senators will be tasked with working out differences in the bill.Under the bill, consumers would pay an 85-cents-a-month fee on their electricity bill with 90% of that money, about $150 million a year, going to FirstEnergy Solutions, the owner of the Davis-Besse and Perry nuclear plants in northern Ohio. The rest of the money, about $20 million a year, would support solar projects being developed in the state. FirstEnergy Solutions’ finances would be subject to an annual review beginning in 2021 to determine whether the fee could be lowered or eliminated. Either way, the fee expires in 2026.The company, spun off from Akron-based FirstEnergy and operating under bankruptcy protection, has said it will shut down the plants unless it gets help this summer. Backers of the legislation have sold the bill as a clean-energy plan in that it would shore up the state’s main source of carbon dioxide-free electricity. The plants have about 1,400 jobs between them, and are considered key drivers of their local economies.
Environmentalists Criticize New Energy 'Bailout' Bill | WKSU --Environmental advocates say the Senate’s new energy plan is taking Ohio in the wrong direction when it comes to emerging energy sources and innovations. That plan would likely bail out two nuclear power plants through new charges on electric bills. The latest proposal would create a new 85-cent fee on monthly electric bills, with most of the money going to nuclear. It also subsidizes coal plants through a $1.50 fee.To offset the cost to ratepayers, Republican lawmakers want to weaken renewable energy requirements and get rid of energy efficiency programs. Dan Sawmiller with the Natural Resources Defense Council, said the plan boils down to four major steps. “It’s a nuclear bailout, a coal bailout, a reduction in incentives for new renewable energy projects that’s driving new economic development in the state, and a complete elimination of our energy efficiency program in the state which is driving new economic activity in the state of Ohio. So it certainly seems to be a step backwards,” he said.
Nuclear bailout bill clears Ohio Senate - The owner of the state’s two nuclear power plants moved another step closer Wednesday night to collecting a nearly $1 billion bailout that it says it needs to keep the plants operating. The Ohio Senate approved by a 19-12 vote its version of House Bill 6 and returned it to the House to see whether representatives will agree with the substantial changes that senators made to the bill the House passed in May. The House adjourned Wednesday night without considering the revised legislation and is expected to take up the matter again Aug. 1. If the representatives don’t approve the senators’ revisions, a conference committee made up of members from the two chambers will be tasked with working out differences in the bill. Under the bill, consumers would pay an 85-cents-a-month fee on their electricity bill with 90% of that — about $150 million a year — going to FirstEnergy Solutions, owner of the Davis-Besse and Perry nuclear plants in northern Ohio. The rest of the money, about $20 million a year, would support solar projects being developed in the state. FirstEnergy Solutions’ finances would be subject to an annual review to determine whether the fee could be lowered or eliminated. Either way, the fee would expire in 2027. In a last-minute amendment, the Senate delayed until 2021 when the fee would be imposed. The company, spun off from Akron-based FirstEnergy and operating under bankruptcy protection, has said it will shut down the plants unless it gets help this summer. Backers of the legislation have sold the bill as a clean-energy plan because it would shore up the state’s main source of carbon dioxide-free electricity.
Ohio nuclear bailout bill held up because of lawmaker absences - — After hours of debates, negotiation and votes, Ohio lawmakers prepared to give final approval to high-profile legislation to gut Ohio’s green-energy mandates and create large public subsidies for nuclear and coal plants. But there was one problem: because four “yes” votes in the House were gone, supporters fell one vote short Wednesday of getting the 50-vote majority needed to send House Bill 6 to Gov. Mike DeWine, who has indicated support for the measure. “We tried to see if we could round up enough votes to get to 50, and we were a little bit short,” said House Speaker Larry Householder, who has passing made HB6 a priority. One of the lawmakers who voted “yes” during a previous HB6 vote, Republican Steve Arndt, retired, Householder said. Three other House members were absent - Democrats Joe Miller of Amherst and John Patterson of Ashtabula County, and Republican Sara Carruthers of Hamilton. Householder said the House will “probably” try again to vote on the bill on Aug. 1, depending on members’ availability. Under the bill, from 2021 until 2027 every Ohio electricity customer would pay a new monthly surcharge that ranges from 85 cents for residential customers to $2,400 for large industrial plants. Of the $170 million per year brought in from that new surcharge, $150 million of that would go FirstEnergy Solutions to bail out its two Ohio nuclear power plants – Davis-Besse near Toledo and Perry northeast of Cleveland. The remaining $20 million per year will go to support six solar power projects being built in rural areas around the state.
DeWine endorses nuclear bailout bill | Toledo Blade - If a stalled bill to bail out Ohio’s two nuclear power plants on the shore of Lake Erie reaches his desk next month, Gov. Mike DeWine will sign it. Although he had previously endorsed the general concept of saving the roughly 1,400 jobs at Davis-Besse in Oak Harbor and Perry east of Cleveland, Thursday marked the first time the governor has endorsed a specific rescue plan. House Bill 6 stalled in the House on Wednesday shortly after winning Senate approval, but the lower chamber plans to return Aug. 1 to try again. “I am confident that House Bill 6 will be passed,” the governor said Thursday. “It is important to the state of Ohio to be able to have a significant amount of energy that is created to be carbon-free. Having nuclear plants today is frankly the only way that we’re going to achieve that.” He said the goal is to save the plants and their jobs while also keeping energy costs down for consumers. “I think House Bill 6 does that,” Mr. DeWine said. The bill would impose new surcharges — ranging from 85 cents per month for residential customers to $2,400 for big industrial plants — on electric bills statewide to provide $150 million a year for the plants’ owner, FirstEnergy Solutions, and $20 million for five new utility-scale solar fields.
Local pipeline court fights, restoration work continue - Natural gas has flowed for months on the two interstate pipelines built across the region in recent years, but restoration work continues on one of the massive projects, and wrangling continues. The Rover Pipeline and Nexus Gas Transmission pipeline carry natural gas produced by Marcellus and Utica shale wells to users in the United States and Canada. Rover has been in partial or full operation for almost two years, and gas began flowing through Nexus in October of last year. Nexus is a $2.1 billion pipeline backed by Detroit-based DTE Energy and Enbridge, a Canadian company. The 36-inch-diameter pipeline runs 255 miles from Hanoverton in Columbiana County to Michigan and can carry up to 1.5 billion cubic feet of natural gas a day. It crosses Washington, Nimishillen, Marlboro and Lake townships in Stark County and the city of Green in Summit County. The arrival of winter last year delayed work crews for several months from restoring all of the land disturbed by Nexus construction. But last week, restoration crews were working on Easton Street NE in Washington Township and Gans Avenue NE in Lake Township, although other areas remained untouched, or even flooded by recent rains. According to Nexus spokesman Adam Parker, there were crews restoring land in various locations on the pipeline route. “We have developed plans to mitigate the unusual rain conditions and we remain on schedule to complete final restoration activities by the fourth quarter of 2019,” Parker wrote. “Most restoration occurs within the first year following completion of construction. However, the process can take longer, depending on weather and other environmental impacts that may interrupt the restoration process.” As the restoration continues, so do several lawsuits filed by landowners in counties along the Nexus route, including five cases in Stark County. The lawsuits allege Nexus and its construction contractor, Michels Corp.:
- • Pumped or diverted water onto farms and residential properties without permission.
- • Destroyed topsoil and crops on farms and failed to control erosion.
- • Failed to repair damaged drain tiles and properly reclaim land.
- • Caused farmers to lose crops and prevented some landowners from using their properties.
Energy Transfer Weighs Sale of Rover Pipeline Stake - Energy Transfer LP, the U.S. pipeline giant controlled by billionaire Kelcy Warren, is weighing the sale of its 33% stake in a conduit that carries Appalachian natural gas to customers across the Midwest, according to people familiar with the matter. The Dallas-based pipeline operator has hired an adviser to pursue a potential sale of its operated interest in the Rover pipeline, said the people, who asked not to be named because the information isn’t public. The stake could fetch as much as $2.5 billion, one of the people said. No decision has been made and Energy Transfer could opt not to sell, the people said. A representative for the company declined to comment. Energy Transfer rose 0.6% to close at $14.91 a share. Map Rover is 713 miles (1,148 kilometers) long and can shuttle 3.25 billion cubic feet of gas daily to customers across Ohio and Michigan, and as far away as Ontario. The project was originally expected to cost $4.2 billion and entered full service last year after a series of delays and construction missteps, including the bulldozing of a historic house in Ohio that the company had said it was buying for office space. When the project came online, gas drillers got relief from bottlenecks that had plagued the Marcellus and Utica shale fields in Appalachia, where a production boom aggravated shipping constraints. Rover can handle as much as 10% of total Appalachian gas output. Energy Transfer sold a 32% stake in Rover to funds managed by Blackstone for about $1.57 billion in 2017. Together, Energy Transfer and Blackstone control 65% of Rover through an entity called “HoldCo,” according to a regulatory filing. Traverse Midstream, formed in 2014 by a former affiliate of private equity firm NGP Energy Capital Management, owns the remaining 35%. Proceeds from a sale of the Rover stake could be used by Energy Transfer to make an acquisition. The company is among those looking at a 20% stake in a crude-oil export project in Corpus Christi, Texas, a person familiar with the matter said last month. “We kiss a lot of frogs looking for a prince,” Warren said during a conference call in November. “We are working it hard. I will tell you, though, we are not finding any deals.”
Manchin, environmental activists seek more details on China Energy deal — Normally butting heads, environmental activists and U.S. Sen. Joe Manchin, D-W.Va., are both on the same page when it comes to asking for more details on the multi-billion dollar “deal” with a Chinese company to further develop West Virginia’s natural gas infrastructure. During a hearing Thursday of the U.S. Senate Energy and Natural Resources Committee regarding liquified natural gas exports, Manchin, the ranking minority member of the committee, raised concerns about the memorandum of understanding between the state Commerce Department and the China Energy Investment Group. “What would be their interest? We cannot find out one iota of what the MOU is,” Manchin said. “I have asked them directly and cannot get a direct answer about their investments.” Manchin isn’t the only one wanting to see what’s in the memorandum of understanding between the state and China Energy. Appalachian Mountain Advocates, on June 24, filed an appeal with the state Supreme Court of Appeals of a lower court decision denying a Freedom of Information Act request to the West Virginia University Energy Institute, one of the partners with the commerce department, for the memorandum. On Nov. 9, 2017, Gov. Jim Justice announced the state had entered into an agreement with China Energy valued at $83.7 billion. China Energy committed to investments in Marcellus Shale natural gas production, infrastructure and downstream industries, such as chemical manufacturing interests. The deal was part of a $250 billion trade deal negotiated between China and the U.S. Department of Commerce, with former Commerce Secretary Woody Thrasher traveling to China twice to secure a memorandum of understanding with China Energy officials. “Do you all know about this deal they want to make with West Virginia, my state? They’ve said they’re going to invest $83 billion over 20 years,” Manchin said during Thursday’s committee meeting. “You can imagine that kind of carrot being swung out there, it’s tremendous for a small state. Our budget is only $4 billion a year, and they’re going to invest $83 billion.”
Senate Energy and Natural Resources Committee passes bills aimed at Appalachian natural gas and coal - On Tuesday, the U.S. Senate's Energy and Natural Resources Committee passed numerous bills centered around Appalachian natural gas and coal. Of note was the Appalachian Energy for National Security Act, which if passed by Congress and signed by the president, would require the U.S. Department of Energy to study national security and economic benefits to a proposed natural gas storage hub along the Ohio River Valley. “An Appalachian Storage Hub would have immeasurable benefits for the Appalachian region and our country as a whole," said U.S. Sen. Joe Manchin, D-W.Va., in a news release. "Not only would it be an economic driver for the region but it would also increase our national and economic energy security," Manchin said. "With countries like Russia and China continuing to leverage their energy resources for political influence, it is more important than ever for the United States to secure energy independence. "In West Virginia we have been blessed with an abundance of natural resources and are well-suited to provide this energy security for the rest of the nation." The act, introduced by Manchin who is the ranking Democrat on the committee, would also require the study to look at possible negative impacts of foreign ownership of domestic petrochemical resources and the needed infrastructure to locate such a hub in Appalachia. Along with that bill, Manchin saw eight other bills he sponsored or co-sponsored make it out of committee. Of particular note to southern West Virginia was the Rare Earth Element Advanced Coal Technologies, or REEACT, Act of 2019. REEACT would continue funding to the U.S. Department of Energy in the form of $23 million a year through FY 2027 for the study of the extraction of rare earth elements from coal and coal byproducts.
State Supreme Court says Antero Resources can continue drilling for Marcellus shale — The West Virginia Supreme Court of Appeals sided with the Mass Litigation Panel in an appeal involving Marcellus shale litigation. The appeal arose from claims by surface owners of several tracts of land who argued their use and enjoyment of their land was improperly and substantially burdened by horizontal wells used to develop the Marcellus shale underlying their properties, according to a recent opinion. Justice Evan Jenkins authored the majority opinion. Justice Beth Walker concurred and filed her own opinion. Justice Margaret Workman and Judge Russell Clawges, who was sitting by temporary assignment, dissented. "The MLP resolved the claims based upon property rights arising from relevant severance deeds, and granted summary judgment in favor of the defendants below, who are the leaseholder of the gas and oil estates and the company who is conducting the drilling," Jenkins wrote in the majority opinion.The MLP concluded that the effects on the surface owners resulting from the horizontal drilling were within the implied rights to use the surface granted by virtue of the severance deeds, and did not impose a substantial burden on the surface owners. "Thus, to overcome summary judgment on this issue, the surface owners were required to establish the existence of a genuine issue of material fact as to whether the effects on their surface estates were reasonably necessary to develop the mineral estate, or whether such effects substantially burdened the owners of the relevant surface estates," Jenkins wrote. "Having considered the briefs submitted by the parties and by Amici Curiae,2 the appellate record, the oral arguments presented, and the relevant law, we find no genuine issues of material fact were established in this particular case, and we, therefore, affirm the order of the MLP."
2 pipeline protesters arrested in Montgomery County -- A Giles County man was charged with assaulting a Mountain Valley Pipeline worker during a protest at a construction site Monday. Virginia State Police were called to an area in eastern Montgomery County near where the natural gas pipeline crosses Flatwoods Road and found about 15 protesters blocking access to a worksite, Sgt. Rick Garletts said. The demonstrators were advised they were breaking the law by obstructing the roadway and were told to leave. “After some discussion,” Garletts wrote in an email, “all complied.” Jammie Hale, 46, was charged with assaulting a Mountain Valley employee, a misdemeanor. He was later released on a $2,500 bond. Hale, who said the water system on his farm failed after Mountain Valley began to dig trenches to bury a 42-inch diameter steel pipe nearby, is a regular participant in pipeline protests. “I’ve had to sell my cattle and now I’m watching my friends go to jail,” Hale said. Hale is the latest of more than 40 opponents charged in Virginia and West Virginia along the path of the 303-mile pipeline, which is in its second year of construction and is expected to be completed next year. On Saturday, a man who had previously been in one of the trees at Yellow Finch Lane locked himself to a concrete structure in the pipeline’s right of way, blocking work for about seven hours, according to a news release from Appalachians Against Pipelines. Phillip Flagg, 24, of Austin, Texas, was charged with misdemeanor obstruction and freed on a $1,000 bond. In a statement released by Appalachians Against Pipelines, Flagg said he cherished the several months he spent living about 50 feet off the ground on a wooden platform hanging from a chestnut oak. “But I’m not too proud to admit that the time I spent in the oak simply isn’t enough to stop this pipeline,” he said. “Each of us has our piece to contribute — when one person steps up, others will follow.”
Protester arrested for blocking path of Mountain Valley Pipeline - A protestor has been arrested after blocking the path of the Mountain Valley Pipeline, according to Appalachians Against Pipelines. Around noon on Thursday, Violet, whose last name is unknown, locked herself into her camping spot, blocking the intended path of the pipeline near Elliston in Montgomery County. Police say Ugur had affixed himself to a device buried in the ground using a common protest device called a “sleeping dragon.” Ugur blocked the pipeline easement for five hours before being extracted and arrested. State police made repeated attempts requesting Ugur to voluntarily release himself from the device and offered medical service. He refused all requests. Police charged Ugur with one misdemeanor count of obstructing the right of passage of another and one misdemeanor count of obstruction of justice. Ugur has since been released on $2,500 bail. The spot where Violet locked herself in is not far from where another pipeline protestor, Phillip Flagg, was arrested on July 13. Violet is the seventh person in 2019 to be arrested for locking into the path of the pipeline, according to Appalachians Against Pipelines.
Organic Farm in W.Va. Imperiled by Gas Pipeline Construction - In the four years since finding stakes mysteriously implanted in the ground of their newly acquired farm, Neal LaFerriere and his family have worked as best they could with Mountain Valley Pipeline representatives to preserve the integrity of their organic farm. Having no choice but to sign an easement to allow the gas pipeline to go through their land, LaFerriere and his wife Beth have tried to hold MVP to the management plan it filed with a federal agency.“We have always been willing to sit down at the table and meet with them to try to work out the issues,” LaFerriere said. But even before clearing for construction started on the right-of-way on Monday, the effects of MVP’s actions on the family’s business have been catastrophic, he said, threatening the farm’s organic certification and bringing such financial hardship that their ownership of the farm is in jeopardy. And, already this week, a clumsy accident involving heavy machinery has resulted in a spill of contaminating fluids on the organic farm. . One day last September, he, his wife, four of their children and an intern were harvesting ginseng about a quarter mile away from the right-of-way, when suddenly, a helicopter flew overhead. Little blue pellets started raining down on them, and they were struck on the face and head, resulting in contusions and lacerations on his two daughters’ faces. He called MVP, but the helicopter continued to make several more passes over the farm. The blue pellets were an erosion control product called Earth Guard Edge. He also called state agencies in addition to MVP, but they were unwilling to hold the pipeline company accountable, he said. Someone at the Federal Energy Regulatory Commission (FERC) called him back 8 days later, and a few days after that, FERC and MVP representatives finally came to the farm bringing MVP’s environmental specialist. The specialist said there was nothing they could do to mitigate the damage. Once the pellet gets wet, it gets into the soil.
Construction materials for pipeline washed into Smith Mountain Lake --Large wooden mats, used as temporary roadways for construction equipment building the Mountain Valley Pipeline, have been swept down the Blackwater River by heavy rains in recent weeks. At least two of the so-called timber mats made it into Smith Mountain Lake, where critics say they posed a public safety risk. If a boat were to hit one of the sections of wood floating in the water, “that could be a major catastrophe,” said Mike Carter, a member of the Franklin County Board of Supervisors. At least a dozen of the timber mats placed on construction sites in the county were washed downstream by floodwaters in late June, according to an environmental compliance monitoring report filed this week with the Federal Energy Regulatory Commission. Two of the mats were found in the Blackwater channel, not far from the W.E. Skelton 4-H Educational Conference Center near Union Hall. A contractor using a barge to remove floating debris for Appalachian Power Co. disposed of the mats, spokesman John Shepelwich said. It was the first time officials could recall seeing such materials in the lake. The mats were “not extremely unusual or outsized” compared to some of the tree trunks and other debris the Smith Mountain Project routinely removes from the water to protect its two dams and the public, Shepelwich said. But for pipeline critics — who in the past have raised concerns about sediment being washed from work sites into streams and rivers — the mats were a different kind of problem. “We are concerned,” said Lorie Smith, president of the Smith Mountain Lake Association. “We’re watching as vigilantly as we can.” Natalie Cox, a spokeswoman for Mountain Valley, said as much as five inches of rain swamped a temporary construction bridge that spanned the Blackwater. The bridge had been in place for more than a year, following the suspension of the company’s stream-crossing permit. “Several mats, either 18 feet by 6 feet, or 40 feet by 6 feet, used to build the crossing over the waterbody were subsequently carried away by the current,” Cox wrote in an email.
Virginia legislators seek halt to Atlantic Coast line - Eighteen Virginia legislators have asked the Federal Energy Regulatory Commission to halt construction on the delayed Atlantic Coast natural gas pipeline, Kallanish Energy reports. They have also asked the federal agency to suspend the project’s certificate of need and convenience and urged Ferc to reassess the need for the $7.8 billion pipeline. The three-page letter was signed by four state senators and 14 state delegates. The state has 140 legislators. They cited the increasing project price tag and said the companies behind the project “have never demonstrated public need“ for the pipeline. They added there is “growing evidence that the developers have overstated the demand for gas.” The pipeline is also facing numerous legal challenges, the legislators said. A similar letter signed by 22 North Carolina legislators was sent to Ferc in May with similar requests. Dominion Energy has asked the U.S. Supreme Court to overturn a federal appeals court decision blocking the company from building the pipeline across the Appalachian Trail in Virginia. Last December, the Fourth U.S. Circuit Court of Appeals vacated a permit that had allowed the pipeline to cross the Appalachian Trail on national forest lands. The court ruled the U.S. Forest Service lacks the authority to approve a pipeline right-of-way across the trail. Dominion Energy argues 56 other pipelines have crossed the trail, that stretches from Georgia to Maine. The company has said it hopes to be able to resume construction of the pipeline by Oct. 1, and to complete it by early 2021. Reuters reported some analysts think Dominion could cancel the pipeline if the Supreme Court does not hear the case because of increasing costs due to legal and regulatory delays.
Representing himself, Cumberland County resident battles Sunoco attorneys over pipeline concerns -A Pennsylvania Public Utility Commission hearing Wednesday on a challenge to Sunoco’s Mariner East pipelines revealed few answers about the controversial project, but continued to show the frustration many Pennsylvania residents have with the petroleum giant. It was an unusual matchup. On one side is Wilmer Baker, a Cumberland County resident and former steel worker, representing himself in a legal fight over the safety of the three pipelines Sunoco is operating or constructing across the state. On the other is a trio of lawyers representing Sunoco Pipeline LP, which has been building an intrastate pipeline from Pennsylvania’s western shale fields to ports on the Delaware River for export. In a day-long hearing in front of Administrative Law Judge Elizabeth Barnes, Baker tried to press his case through a cascade of objections from Sunoco and delays to work through procedure. “What I wanted was an alarm system … and better public outreach, including American-made steel instead of foreign steel dumped into this country,” Baker said as he testified as his own witness. In his own handwritten pre-hearing memo, Baker also said he wants an odor added to the pipelines’ combustible cargo — natural gas liquids, such as ethane, butane, and propane — as well as more outreach between Sunoco and emergency response services near the pipeline.
Refinery Explosions Raise New Warnings About Deadly Chemical : NPR - In the predawn hours of June 21, explosions at the Philadelphia Energy Solutions refinery in South Philadelphia shook houses, sent fireballs into the air and woke up nearby residents. "Three loud explosions, one after the other, boom, boom boom!" says David Masur, who lives about two miles from the plant and has two young kids. "It's a little nerve-wracking." Masur watched as the refinery spewed black smoke above the city, easily visible from his home. But what he didn't know at the time was just how close he and his family came to getting exposed to hydrogen fluoride, one of the deadliest chemicals used by refiners and other industrial manufacturers. Philadelphia Energy Solutions knows that's a possibility. Its worst-case disaster scenario includes 143,262 pounds of hydrogen fluoride released over 10 minutes, which could travel as a toxic cloud for more than 7 miles and impact more than a million people, including in schools, homes, hospitals, prisons, playgrounds, parks and a wildlife sanctuary. City, state and federal officials say none of the air monitors in or around the refinery — or the air samples collected by the city's health department — detected the chemical, often referred to as HF. And a spokeswoman for Philadelphia Energy Solutions says no workers were exposed. But two other refineries in the Philadelphia region also use HF, as do some four dozen around the country. The Philadelphia explosions, along with similar accidents in the past four years, are reviving concerns about inadequate safety measures and calls to end the use of the deadly chemical.
Shutdown from Refinery Explosion Impacting East Coast Supply Chain --Last month the largest oil refinery complex on the east coast, Philadelphia Energy Solutions, experienced a major explosion and fire. The site produced 335,000 barrels per day before announcing that it would be shut down, leaving 1,000 workers without jobs. The closure leaves the East Coast with seven total refineries and an operating capacity of 889,000 b/d. The Energy Information Administration estimates that closing the refinery will not only reduce East Coast gasoline supplies but is also likely to reconfigure petroleum product supply chains in the Central Atlantic. The U.S. East Coast is the largest regional consumer of petroleum products in the United States. Because this region consumes significantly more petroleum than regional refineries can produce, it relies on product brought in by a pipeline from the Gulf Coast. In addition to tapping reserves, replacement supplies for these markets will come from various sources. This includes the other refineries around Philadelphia that produce transportation fuels— the Monroe Energy Trainer refinery, the PBF Delaware City refinery, and the PBF Paulsboro refinery. Markets in Western Pennsylvania will also draw on supplies provided by refineries and distribution systems in Ohio and the rest of the Midwest. Markets in upstate New York may resupply from terminals in southern New York and refineries in Canada, although the logistics are more challenging than via a pipeline from Philadelphia. However, most of the lost supply to these markets and the region as a whole is likely to be replaced through imports and increased shipments on the Colonial Pipeline. The East Coast can also import gasoline supplies from the Atlantic Basin, which is supplied by refineries in Northwest Europe, Eastern Canada, India, and the Mediterranean. In 2018, this region imported 586,000 b/d of gasoline. Additionally, increased shipments from refineries in the Gulf of Mexico via pipeline may be possible, but also carry limitations. The Colonial Pipeline, for example, is already at capacity.
PES refinery expected to shut remaining units as crude dwindles: sources - (Reuters) - The Philadelphia Energy Solutions refinery, the oldest and largest on the U.S. East Coast, is expected to shut its remaining units on Monday as the plant uses up the last of its crude supplies, sources said on Wednesday. The refinery is still weighing the economics of running more crude oil to keep the units active for an extended period, the sources said. Crude shipments destined for PES have been diverted in the weeks after the June 21 fire and explosion at the 335,000-barrel-per-day refinery, according to data and trade sources. The fire, which started in an alkylation unit in the Girard Point section of the Philadelphia complex caused PES to begin closing the facility without an intended restart. Roughly 1,000 workers are expected to be laid off and contractors who do business with the refinery will also be affected by the shutdown. PES, which emerged from bankruptcy last year, has multiple owners, including investment bank Credit Suisse and investment firm Bardin Hill. Refinery officials were not immediately available for comment. PES has long been a steady buyer of imported crude oil, particularly from West Africa. Its loss as a buyer threatens to shrink the last steady U.S. market for West African crude. Last year, U.S. refiners imported 180.7 million barrels of crude oil from Africa, according to U.S. Energy Information Administration figures. The PES refinery imported 43.1 million barrels from Africa in 2018, second only to the Phillips 66 refinery in Linden, New Jersey among U.S. refineries.
Delaware refinery hit with nearly $1 million penalty for a decade of air pollution violations - The Delaware City Refining Company, LLC has agreed to pay a $950,000 penalty to the Delaware Department of Natural Resources and Environmental Control for violations of the Clean Air Act that date back to 2010. The settlement also addresses appeals the company made to DNREC-issued air quality permits. The violations include releases of volatile organic compounds, hydrogen sulfide, and sulfur dioxide — pollutants that are known to cause breathing problems, skin irritation, and in some cases nausea, vomiting, and neurological effects such as dizziness. The refinery has also been cited for releases of methane, one of the most powerful heat-trapping gases that contributes to global warming.DNREC has agreed to revise the permit language regarding emissions caps on certain units at the refinery. There is an annual cap on the facility’s emissions, but certain units have shorter-term limits that prevent large releases all at once. The new language allows the company more flexibility on some units under certain circumstances, such as when equipment is malfunctioning. The revised permits will now enter a comment period. Once the comment period closes and the revised permits are issued, pending no major changes, the company has agreed to dismiss its appeals. DNREC has been fighting the refinery over outstanding air and water violations since the facility’s restart in June 2010. DNREC Secretary Shawn Garvin told WHYY that the agency decided to separate the two issues due to the complicated nature of the air quality permit appeals.
Natural Gas Prices Start The Week With A Slide - After initially jumping up at the Sunday evening open, natural gas prices quickly began facing downward pressure, which continued into the day today, with the August contract settling a few cents lower compared to Friday's close. Why the weakness in the face of such strong heat on the way this week? Part of that answer lies in the move cooler in the forecast as we look into the final portion of July, which is expected to bring demand down to at least near normal levels. Here is the forecast demand chart (GWDDs), showing this week's strong cooling demand, followed by the late month weakening: In map form, we see the "blues" introduced in today's 11-15 day outlook for the first time in awhile in the eastern half of the nation. While July is still set go down as a hot-dominated month, this late month cooler move is not a surprise. We highlighted the potential for a weaker 11-15 day in our Pre-Close Update to clients back on Friday. We will have to see now if this is a lasting change, or if we soon migrate back in the hotter direction, offering more chances to boost cooling demand and perhaps lend natural gas prices more support.
It Might Be Too Early For A Significant Rise In Natural Gas - The price of natural gas was at over the $2.45 level at the end of last week, as it recovered from recent lows at below the $2.20 per MMBtu level. The peak of the summer season began following the recent July 4th holiday and will run through Labor Day at the beginning of September. Hotter than average temperatures over the coming weeks will increase demand for cooling power, which would cause the amount of natural gas flowing into storage to decline. However, output remains at record levels given the massive reserves in the Marcellus and Utica shale regions of the US and the technological advances that lowered the cost of production. At the same time, investments in production efficiency and the expansion of pipelines and storage have expanded the US natural gas business. Additionally, regulatory reforms have served to increase production in the US. As natural gas can now flow beyond the pipelines and travel around the globe in liquid form, the addressable market for the energy commodity from the US continues to expand. The growth of both the supply and demand side of the fundamental equation for natural gas has caused the market to mature. Meanwhile, the price remains below the level it broke down from in May and June at just above the $2.50 per MMBtu level. Even though the price recovered from the recent lows, it has yet to challenge the support level that has transformed into technical resistance in the natural gas futures market. The first attempt to move above that level will likely attract selling. The Velocity Shares 3X Inverse Natural Gas ETN product (DGAZ) is a short-term tool for those looking for the price of the energy commodity to move lower. We have witnessed lots of volatility in the natural gas futures market since late last year. As the monthly chart shows, the price rose to a high at $4.929 per MMBtu in November as the amount of natural gas in storage going into the peak season of demand was at the lowest level in years at 3.247 trillion cubic feet late last year. The price moved to the highest level since 2014 when natural gas traded to just under $6.50 per MMBtu. While stocks fell to a low at 1.107 tcf at the end of the winter withdrawal season, the price continued to drop from the late 2018 high. In April, natural gas futures fell below the 2017 and 2018 lows at just over the $2.50 level reaching a bottom at $2.159 on the continuous contract, and $2.134 on the active month August futures contract.
The Role Of Weather In This Summer's Natural Gas Price Action Today was a relatively quiet day on the natural gas front, with the August contract closing just two ticks lower than yesterday. The weekly move has been decidedly lower, however, thanks in large part to the shift cooler in the weather pattern for the balance of July, bringing "blues" to the 6-15 day forecast maps. This is stark contrast to the heat we've seen much of this month, which prompts us to take a look at how weather has played a role in the price action of natural gas so far this summer. Typically, the "weather factor" carries much more weight in winter than in summer. This is because of much higher gas demand in the winter months. The difference between a very cold winter and a very warm one can account for roughly 2 tcf in terms of natural gas demand, while in summer, the difference in demand between a cool summer and a top-end hot summer is only around 25% of that, in the realm of 500-600 bcf. This summer, at least so far, has been a case where weather's influence has been more evident in price action, which can happen in cases where we do not have a notable paradigm shift in the supply / demand picture in the middle of the season. Here is the demand profile since 5/15/19, using the departure from normal in Gas-Weighted Degree Days (GWDDs) as the measure. This includes our 15 day forecast as well. We've highlighted the period where demand ran consistently below normal, as well as the recent weeks where demand has been consistently above normal. As we look at prices, we see that, sure enough, when demand was consistently below normal, the direction of price action was generally lower, and as demand has remained consistently above normal, the direction of price action has generally been upward. Of course, we do have the big drop this week while the pattern is still hot, but as we mentioned, that is the market pricing in the cooler forecast changes for the balance of July. Now, we are not making the case that one should base trades only around weather-based strategies in summer. as results will not be this clean, typically. But is definitely an important piece of the puzzle.
US natural gas in underground storage rises by 62 Bcf: EIA - The US Energy Information Administration reported a 62 Bcf build to US natural gas storage for the week ending July 12, marking the first bullish report from the agency during this injection season. US gas in storage increased to 2.533 Tcf as a result, leaving stocks 291 Bcf, or 13%, above the year-ago level of 2.242 Tcf and 143 Bcf, or 5.3%, below the five-year average level at 2.676 Tcf. Following 15 consecutive above-average builds reported by the EIA, last week’s injection was the first of this injection season to undershoot the five-year average storage addition of 63 Bcf. Last week’s injection was less than an S&P Global Platts’ survey of analysts calling for a 65 Bcf build. Responses to the survey ranged from 56 Bcf and 72 Bcf. The injection was also less than the 68 Bcf and 70 Bcf builds predicted by S&P Global Platts Analytics’ supply-demand model and storage report, respectively. Following Thursday’s announcement from the EIA, the prompt-month NYMEX Henry Hub contract briefly climbed to about 2 cents to $2.35/MMBtu, before edging downward to a settlement at $2.29/MMBtu. Last week’s bullish injection to gas storage comes following a net 1.1 Bcf/d tightening in the US supply-demand balance, according to Platts Analytics. During the week, more seasonal summer temperatures lifted gas-fired power burn by an estimated 900 MMcf/d, which was partially offset by declines in residential-commercial and LNG-feedgas demand. Over the same reference period, US production from offshore fields in the Gulf of Mexico declined by about 500 MMcf/d as Hurricane Barry shuttered operations near the Louisiana and Mississippi coastlines. Weekly gains in onshore production partially offset that decline. For the week ending Friday, Platts Analytics’ storage report and supply-demand model are forecasting bullish injections of 29 Bcf and 30 Bcf, respectively. If realized, a build around that level would undershoot the five-year average injection by 14 to 15 Bcf, according to EIA data. Gas-fired power burn has continued to strengthen through mid-July, helping to tighten this summer’s supply-demand balance. Month to date, burns have averaged 40.6 Bcf/d or about 1.1 Bcf/d above last year’s month-to-date average. On Wednesday, power burn set a new record-high level at 44.6 Bcf/d. For the week ending Friday, aggregate US balances look to be about 4.2 Bcf/d tighter compared with last week. Power burn and LNG feedgas demand are up by 2 Bcf/d and 2.1 Bcf/d, respectively. On the supply side, continuing production declines related to Hurricane Barry have led an overall 2.2 Bcf/d drop in output this week compared with last week.
Market Brushes Aside EIA Number To Continue This Week's Selloff - Natural gas prices extended this week's downward move today, with the prompt month August contract settling 1.7 cents down on the day, breaking below the 2.30-2.32 support zone. Today's move lower came in spite of the EIA report that showed an injection of 62 bcf for last week, which was actually on the lower end of the range of market estimates. This reflected tighter supply/demand balances that were tighter (more bullish) week over week, but that along does not tell the full story. Balances remained on the loose side of the trend line when looking at the same gas week over the last several years, much looser than last year. Also, production declines started in the middle of last week ahead of Hurricane Barry's arrival along the Gulf of Mexico coastline. As a result, the market can more easily discount this number, with the thinking that it would have been higher if not for Barry, hence the tightening may be somewhat artificial. Add in the lack of strong heat in the weather forecasts beyond this weekend, and the bearishness makes a little more sense. One thing is certain, however. This season has not had a shortage of solid price moves, despite fears to the contrary, and it is likely that there will be more to come.
Selling Continues In Natural Gas, With Prices Closing Lower Every Day This Week - This week brought quite the sea of "red" to the natural gas world, and we don't mean the kind on weather maps that is bullish. Prices closed lower every single day this week. The week began with cooler weather changes to the balance of July, a risk that we had highlighted in last Friday's Pre-Close Update. This brought "blues" (cooler than normal temperatures) to our 11-15 day forecast back on Monday for the first time in quite awhile. Monday's forecast: While the bulk of these cooler changes came early in the week, by Wednesday, the cooler weather along with our analysis of supply / demand balances led us to mention the risk of a move to the 2.25 level in the August contract, highlighted in Wednesday's Morning Report. Two days later, here we are, right at the 2.25 level, still with significant cooling on the way next week, but coverage of below normal temperatures had lessened in today's 11-15 day forecast, as seen on today's maps. After falling almost 25 cents from the highs of last week, is this enough to end the selling pressure?
Agency Mulls Review of LNG Terminal Application for Delaware River Basin - NJ Spotlight - The Delaware River Basin Commission said Monday it is reviewing a request to reconsider its approval of plans for a controversial liquefied natural gas terminal at Gibbstown, Gloucester County. The interstate water regulator last month unanimously approved the proposed expansion of an energy-export terminal on a former DuPont explosives site in the face of criticism by environmentalists who say the LNG component of the project would risk major explosions, stimulate the production of climate-altering natural gas, and endanger the water resources that the DRBC is required to protect. The environmental group Delaware Riverkeeper Network previously accused DRBC and other agencies of trying to cover up the plan by Delaware River Partners to transfer LNG produced in Pennsylvania’s Marcellus Shale from trucks or railcars on to ships bound for overseas ports. Now, DRN has formally asked the commission to re-examine the plan at a public hearing. DRN argues that the LNG terminal would violate the “Compact,” a 1960s document that requires it to protect the basin’s water resources, which would be at risk because of dredging to build the port, and because the project could stir up many contaminants at the site. The critics also say that DRBC failed to consider the views of other agencies when it approved the project and has not given the public enough time to discuss it. “The DRBC violated its governing Compact and regulations when it approved the project without having full information on impacts on water resources to the Basin,” DRN said in a letter to the commission on July 11. The agency did not include any mention of the LNG plan in its draft docket on the project, known as the Gibbstown Logistics Center, depriving the public of an opportunity to comment, DRN said. .
LNG export terminal would take 360 trucks a day, 24/7, Army Corps says - NJ Spotlight -- The U.S. Army Corps of Engineers divulged new details yesterday about plans for New Jersey’s first export terminal for liquefied natural gas, showing it would be supplied by as many as 15 trucks an hour — around the clock — to fill an ocean-going tanker every two weeks. The previously unpublished information about the proposed terminal at Gibbstown in Gloucester County, the Army Corps said Tuesday, came from new details it had received about the plan by the developer, Delaware River Partners, since the agency published an earlier notice on the project in April. The new document said LNG — a super-cooled form of natural gas that can explode if its vapor is mixed with air in an enclosed space — would not be processed or stored on site but would be pumped directly from trucks into ships. To limit the impact of the heavy truck traffic on residential areas, Gloucester County is proposing a new access road to a port that would be expanded to accommodate the terminal, the document said. The new road would be about 110 feet from the nearest residential area; the terminal’s loading area would be built at least a mile away from those homes. The developer has also proposed carrying the LNG to the terminal by rail but that idea hasn’t yet been approved by the U.S. Department of Transportation, the Army Corps report said. Disclosure of the new detail may fuel critics who say that DRP and some government agencies have not been fully transparent about a project that would bring explosive materials to a residential area, and which would stimulate the production of fracked natural gas, boosting climate-changing carbon emissions. The gas, harvested from Pennsylvania’s Marcellus Shale would be liquefied at a proposed plant in Bradford County, Pa., built by New Fortress Energy, a LNG company.
National Grid to NYC customers: Support the Williams Pipeline or no new service - On Monday, the leading distributor of natural gas in the Northeast, National Grid, sent an urgent-sounding email to many of its New York customers — not about summer energy savings, but about why they should contact government officials to voice support for a major fracked gas pipeline.“Natural gas supplies are at risk in downstate New York,” the subject line read.In the energy company’s email, National Grid said it will not be able to fulfill requests to expand natural gas service in Brooklyn, Queens, and Long Island unless the Northeast Enhancement Supply Project, a new pipeline that would bring in an additional 400 million cubic feet a day of fracked natural gas to the region, moves forward. The proposed project would span 23.5 miles from Pennsylvania, through New Jersey, to Rockaway Peninsula in New York. If completed, National Grid says it would the company’s capacity by 14 percent.Earlier this year, both New York and New Jersey denied permits for the project, locally called the Williams Pipeline after the entity that would operate it, citing the project’s potential environmental impact on water quality and marine life. Since then, the Williams Companies has adjusted their proposal and reapplied (via a subsidiary) for permits in both states. New York is accepting comments from residents until July 13 — a fast-approaching deadline which may have prompted the email to National Grid customers.“Approval of the Northeast Supply Enhancement (NESE) Project is needed to access the additional natural gas supplies required to support our region,” the company told Grist via email. “Without NESE, National Grid will not be able to supply natural gas to new commercial, industrial and residential customers to heat their homes or run their businesses, putting the region’s economic growth at risk, as well as impeding state and city carbon emission goals.”
Refinery impacts if Enbridge's Michigan crude oil pipeline is shut down -- Line 5 - The battle over the future of Enbridge’s Line 5 light crude oil pipeline through Michigan is heating up. In recent weeks, Michigan’s new attorney general filed suit to throw out the 1953 easement the state granted to allow the pipeline to be laid under the Straits of Mackinac — the narrow waterway between Michigan’s upper and lower peninsulas — and to block implementation of an agreement Enbridge and the state’s then-governor reached last fall to replace the section of Line 5 under the straits by the mid-2020s. Enbridge is pressing ahead, maintaining that the existing pipeline is safe and the 2018 agreement is legal and fully enforceable. All that raises two questions: just how important is Line 5 to the Michigan and Eastern Canadian refineries, and what would those refineries do if the pipeline were to cease operations? Today, we discuss recent developments and examine the issues at hand. Enbridge’s Line 5, part of the Canadian midstream company’s much larger Mainline/Lakehead crude oil pipeline system, has been an important conduit for moving Western Canadian and Bakken crude oil and NGLs across Michigan’s upper and lower peninsulas — and into Ontario — for more than 65 years. Line 5 (purple line in Figure 1) is one of multiple Enbridge pipelines out of the company’s terminal in Superior, WI. The 540-Mb/d pipeline transports “batches” of either light crude, light synthetic crude or mixed NGLs 645 miles east/southeast through Michigan to Sarnia, ON. The crude oils and NGLs are sourced primarily in Western Canada (but also in the Bakken) and are bound for Michigan, Ontario and Quebec. At the Straits of Mackinac (dashed red oval) — the four-mile-wide water passage between Michigan’s upper and lower peninsulas (and Lake Michigan and Lake Huron) — the 30-inch-diameter, single-pipe Line 5 splits into two 20-inch-diameter, parallel pipes that are anchored along the straits’ lakebed.
Indigenous leader of Line 5 opposition is now consulting for Enbridge - Indigenous governments and activists in the Great Lakes have been leaders in the movement to shut down the twin oil pipelines that run under the Mackinac Straits. Now, one of the most visible people in that movement has left his tribal government job and set up his own consulting firm. One of his clients? The pipelines’ owner, Enbridge Energy. This sudden change has upset indigenous communities in the region, and some worry it’s a “divide-and-conquer” tactic. Up until this spring, Desmond Berry directed the Natural Resources Department for the Grand Traverse Band of Ottawa and Chippewa Indians. His tribe has treaty rights in Lakes Michigan and Huron, in and around the Straits of Mackinac. He’s been a fixture at rallies opposing Line 5. At an event in the Straits of Mackinac in 2017, he spoke about the Grand Traverse Band’s interest in shutting down the pipeline: “The twin oil pipeline threatens both our ability to exist as Anishinaabek, and it threatens our ability to harvest fish,” he said then. So, Andrea Pierce was surprised when he quit his job, started a consulting business with a colleague, and picked up Enbridge as a client. “You know, I felt betrayed, hurt, all of the normal things,” said Pierce. Pierce is a citizen of the Little Traverse Bay Bands of Odawa Indians. She collaborated with Berry on Line 5 protest events for years. She also co-chaired the Anishinaabek Caucus for Michigan’s Democratic Party with him. He has since resigned from the caucus. Pierce said his decision was a shock, and created a lot of distrust. She said some people have even been suspicious of her, because of how close she was to Berry. So, she’s adamant about putting it on record that she would never support or work for Enbridge. “We're gonna second-guess a lot of people and a lot of things that happened, but that's what they want and we have to move past that,” said Pierce.
Duluth leaders push for closer look at toxic refinery chemical --Duluth Mayor Emily Larson won't easily forget the day in April 2018 when amassive explosion and fire rocked the Husky Energy oil refinery in neighboring Superior, Wis., sending a towering plume of thick, black smoke into the sky, and forcing the evacuation of much of the city across the St. Louis River."It was a horrifying feeling," she recalls.Luckily, the worst fears of emergency responders were not realized. The explosion sent shrapnel flying, piercing an enormous asphalt tank, which caused the fire. But it missed a nearby tank storing hydrogen fluoride, a highly toxic chemical compound used to make high-octane gasoline. Hydrogen fluoride can be fatal if it's inhaled.The near-miss prompted calls from Larson and Superior Mayor Jim Paine for Husky to discontinue use of hydrogen fluoride. On Monday, the Duluth City Council plans to vote on a resolution asking the federal Environmental Protection Agency to study the use of hydrogen fluoride in refineries to ensure the safety of communities like Duluth and Superior. Larson, who backs the resolution, said the explosion at the Husky refinery was a call to action. Husky officials in April said they planned to continue to use the substance when they rebuild the facility, after an analysis concluded that "alternatives were not commercially viable or introduced significant risks for the Superior Refinery," according to Husky spokesperson Mel Duvall.
Barry Shuts in 69 Percent of GOM Oil Output - Approximately 69.08 percent of oil production in the Gulf of Mexico (GOM) was shut in as of 11:30 a.m. CDT Monday due to Tropical Storm Barry. That’s according to estimates from the Bureau of Safety and Environmental Enforcement (BSEE), which were based on data from company reports. The figure equates to 1.31 million barrels of oil per day according to BSEE, which also estimated that around 60.58 percent of natural gas production in the region, or 1.68 billion cubic feet, had been shut in. As of Monday, personnel had been evacuated from a total of 267 production platforms, or 39.9 percent of the 669 manned platforms in the GOM, BSEE highlighted. The organization also pointed out that personnel had been evacuated from 10 non-dynamically positioned DP rigs, equivalent to 47.6 percent of the 21 rigs of this type currently operating in the GOM. “The team will continue to work with offshore operators and other state and federal agencies until operations return to normal and the storm is no longer a threat to Gulf of Mexico oil and gas activities,” BSEE said in an organization statement on Sunday. On July 14 at 8 a.m. PDT, Chevron revealed that it had begun to redeploy personnel and restore production at its Big Foot, Blind Faith, Genesis, Jack St. Malo, Petronius and Tahiti platforms that were shut-in as a result of Barry. The company added that, at its onshore facilities, including in Pascagoula, Mississippi, and Pasadena, Texas, it was following its storm preparedness procedures and paying “close attention” to the forecast and track of the system. Shell said yesterday that its offshore crews and assets had “weathered the storm well”. “However, we have shut in the Auger, Salsa and the Enchilada assets in the Gulf of Mexico and curtailed production in the Mars Corridor as a result of the effects of this storm,” the company added. “Downstream third-party facilities have experienced weather-related issues, including power loss, that are limiting, restricting or halting some or all of their operating capabilities. We continue to monitor and work with those third-party providers in order to resume normal production as soon as is safely possible,” Shell continued.
Storm Barry cuts 73% of U.S. offshore oil production: U.S. government (Reuters) - Tropical Storm Barry has cut 73%, or 1.38 million barrels per day (bpd), of crude oil production in the U.S.-regulated areas of the Gulf of Mexico, the U.S. Bureau of Safety and Environmental Enforcement (BSEE) said on Sunday. Natural gas output from the northern Gulf of Mexico is down 62%, or 1.7 billion cubic feet per day, BSEE said. A total of 283 production platforms, or 42%, remain shut in the Gulf of Mexico, BSEE said.
Oil and gas producers in the Gulf of Mexico restart after Barry -- U.S. oil companies on Monday began restoring some of the more than nearly 74% production shut at U.S. Gulf of Mexico platforms ahead of Hurricane Barry, the U.S. offshore drilling regulator said. There was 1.3 million barrels per day (bpd) of oil production off line in the U.S.-regulated areas of the Gulf of Mexico on Monday, about 80,000 barrels less than on Sunday, according to the U.S. Bureau of Safety and Environmental Enforcement (BSEE). Workers also were returning to the more than 280 production platforms that had been evacuated. It can take several days for full production to be resumed after a storm leaves the Gulf of Mexico. Anadarko Petroleum, BHP Group, Chevron and Royal Dutch Shell on Monday said they had begun returning staff to evacuated platforms and were in the process of restoring operations. “Redeployment and crew-change flights to some of our assets have begun now that weather conditions in the Gulf and onshore have improved,” said Shell spokeswoman Cynthia Babski. Three Shell platforms remained shut and another at limited production on Monday, she added. Barry came ashore in central Louisiana as a category one hurricane with at least 74-mile-per-hour (119-km-per-hour) winds on Saturday after emerging into the gulf from Florida earlier in the week. By late Monday afternoon, it was a post-tropical cyclone and dropping up to 4 inches (10 cm) of rain on Arkansas. In its wake, offshore natural gas production in the Gulf of Mexico was down 61%, or 1.7 billion cubic feet per day (cfd), on Monday, BSEE said. The amount of gas flowing to Cheniere Energy Inc’s Sabine Pass liquefied natural gas (LNG) export facility in Louisiana, rose to a one-week high of 3.7 billion cfd. Last week, the amount of gas flowing to Sabine fell to a 13-week low of 2.9 billion cfd on Thursday, according to Refinitiv. Most refineries in southeastern Louisiana kept running through the storm except for Phillips 66′s 253,600-bpd Alliance, Louisiana, refinery, which the company began restarting on Monday.
77.8M acres in Gulf of Mexico for August oil, gas lease sale (AP) — The federal government will offer 77.8 million acres (31.5 million hectares) in the Gulf of Mexico for oil and gas exploration and development on Aug. 21. An Interior Department statement says the lease sale will include 14,585 tracts. They’re in water 3 to 231 miles (5 to 370 kilometers) offshore and in water from 9 feet to more than 2 miles (3 to 3,400 meters) deep. Until August 2017, the Interior Department held separate lease sales for the Gulf’s most active area and tracts off Texas. They were consolidated under an Obama administration plan created because bidder numbers were dwindling. In March , 78.5 million acres (31.7 million hectares) were offered and about 1.3 million acres (0.5 million hectares) drew $244.3 million in high bids. The high bid total was about 37% above the previous sale’s and nearly double the March 2018 figure.
Coast Guard responds to oil slick near Port Aransas, Texas - Coast Guard crews responded to a report of oil that washed ashore at the Port Aransas Municipal Boat Ramp in Port Aransas, Texas, Wednesday. At 7:15 a.m., Sector/Air Station Corpus Christi Incident Management Division received notification from the Texas General Land Office of an oil slick at the Port Aransas Municipal Boat Ramp. A Sector/Air Station Corpus Christi IMD duty team responded and estimated the oil slick at 40 gallons. The IMD duty team accessed the Oil Spill Liability Trust Fund and partnered with the Texas General Land Office, the Port Aransas Harbor Master and contractors to remove the oil from the water and decontaminate structures around the boat ramp using a pressure washer, VAC truck, active skimming and absorbents. The cause of the oil slick is under investigation.
Kinder Morgan’s newest Permian Basin pipeline headed to East Texas - Houston pipeline operator Kinder Morgan said it will route its newest natural gas pipeline project from West Texas to East Texas, where it will support the burgeoning liquefied natural gas industry expanding along the Texas and Louisiana Gulf Coasts. In a call with investors, Kinder Morgan CEO Steven Kean said the exact route for the proposed Permian Pass Pipeline is still being researched, but it will begin in the Permian Basin and move 2 billion cubic feet of natural gas per day to LNG export terminals along the Sabine River. The Houston LNG company Cheniere Energy owns and operates an export terminal on the Louisiana side of the Sabine River. The San Diego utility Sempra Energy is building an export terminal in nearby Port Arthur while a joint venture between Exxon Mobil and Qatar Petroleum is redeveloping an import terminal on the Texas side of the Sabine River into an export terminal. “The supply growth out of the Permian Basin and the expected demand growth primarily as a function of demand from the LNG industry is still very robust and should translate itself into a firm, long-term commitment,” Kean said. Natural gas is a byproduct of oil drilling. In the Permian, the natural gas produced with oil is so abundant and pipeline capacity so constrained that most of it is burned off, or flared. Kinder Morgan has three pipeline projects that will move it from the West Texas shale play to customers along the Gulf Coast and in Mexico. Kinder Morgan’s Gulf Coast Express Pipeline is expected to begin moving 2 billion cubic feet of natural gas per day in late September from the Permian to the Agua Dulce Hub near Corpus Christi, where it can be used by customers along the Coastal Bend and in Mexico.
U.S. shale firms put up $16.5 million to build West Texas charter schools (Reuters) - Twenty top U.S. energy companies agreed to contribute $16.5 million to open new schools in West Texas, where an influx of oil and gas workers have strained schools, roads and other civic services. This is the first initiative by the Permian Strategic Partnership, a consortium of shale producers which has pledged to raise $100 million to address civic strains, a spokesman for the group said. The companies all operate in the Permian Basin, the top U.S. shale field. Another $22 million will be donated by local foundations and philanthropists. The funds are earmarked to bring IDEA Public Schools, a national tuition-free charter school, to the region, the group said. The Permian Strategic Partnership aims to address labor and housing shortages, school overcrowding, healthcare and traffic congestion in the Permian Basin. Its founding members are oil and gas producers and suppliers which aim to pump millions of barrels of oil and gas in coming decades. The shale boom has lifted Permian oil production to 4.2 million barrels per day, and made the United States the world’s biggest oil producer and fifth largest exporter, according to the International Energy Agency, a group of major oil consuming nations.
This Shale Fracker's Decision to Sell Says It All - A big deal in the Permian basin should be cause for fanfare in oil and gas circles. And yet, a distinct sad-trombone note sounds as Carrizo Oil & Gas Inc. falls into the arms of Callon Petroleum Co. Callon is offering a 25% premium in an all-stock acquisition, based on Friday’s closing prices. But it’s the absolute price that tells the real story. Carrizo is selling out for $13.12 a share, getting it back to where it traded just less than three months ago – and way below the $23 level where it sold a slug of new shares last August. If Callon is engaging in some bottom-fishing, Carrizo is nonetheless grabbing eagerly at hook, line and sinker. Carrizo’s decision to sell with its stock trading close to its lowest levels in a decade is the salient fact here. It is being paid with stock and its shareholders will own 46% of the enlarged Callon, so they can participate in any gains once the deal is done. They’re better off not looking too closely at their screens on Monday, though: Callon’s stock slumped by as much as 17% Monday morning, wiping out the implied premium. Even so, there is a compelling logic to shale consolidation. A decade of breakneck expansion has left the onshore U.S. exploration and production business overcapitalized, with a long tail of inefficient smaller companies offering lackluster returns (see this). Carrizo is a prime example. Its total return over the past five years is negative 84%, which makes the sector’s negative 64% look good (the S&P 500 has returned a positive 69% in that time). Indeed, activist firm Kimmeridge Energy Management Co. tried last year to nudge the company into streamlining or selling itself to address this. Carrizo, which was trading at about $17 a share back then, disagreed. It is telling that up to $45 million of Callon’s synergies target relates to cutting general and administrative overhead. That is equivalent to more than two-thirds of Carrizo’s G&A line, reinforcing one of Kimmeridge’s lines of argument about the inefficiency inherent in such a fragmented industry. Those cash savings also speak to the other key point in Callon’s marketing push, namely an implied free cash flow number north of $200 million in 2020. Based on Callon’s current price, that implies a pro forma free cash flow yield of about 10%, which may be enough to tempt some investors back into the stock when the smoke clears – although pro forma net debt of two times Ebitda (including synergies) means some of that will have to go toward reducing leverage.
EIA forecasts U.S. shale oil output to climb by 49,000 barrels a day in August - Crude-oil production from seven major U.S. shale plays is forecast to climb by 49,000 barrels a day in August to 8.546 million barrels a day, according to a report from the Energy Information Administration released Monday. Oil output from the Permian Basin, which covers parts of western Texas and southeastern New Mexico, is expected to see an increase of 34,000 barrels a day in August from July. Shale oil output from the Anadarko and Eagle Ford regions, however, are expected to see slight monthly declines, the report showed. The August contract for West Texas Intermediate oil was trading down 64 cents, or 1.1%, at $59.57 a barrel ahead of its settlement on the New York Mercantile Exchange.
The crude oil adjustment accounts for differences in supply and disposition - The U.S. Energy Information Administration’s (EIA) Weekly Petroleum Status Report (WPSR) provides weekly estimates of U.S. crude oil supply, including a measure of how well the supply of crude oil and the disposition of crude oil balance with each other. This measure—referred to as the adjustment—is a derived term equal to the difference between supply and disposition. If the reported supply and disposition of crude oil balanced perfectly each week, the adjustment would equal zero. For several reasons, however, this is rarely the case. Weekly U.S. crude oil supply and disposition data are based on a combination of EIA survey data, U.S. Customs and Border Protection data, and modeled estimates. All statistical samples using survey data have small but unavoidable imprecisions, and model estimated data’s precision can vary. This imprecision in estimating each element of the crude oil balance can result in some over- and under-estimation in both supply and disposition. In recent weeks, the crude oil adjustment has been growing in absolute value, as high as 881,000 barrels for the week ending May 24. However, this is still relatively small, when compared with the entire U.S. crude oil balance, less than 2.5% on a rolling four-week average basis (the sum of production, imports, exports, and refinery inputs) (Figure 1). Although an increased adjustment is, in some part, the result of the inherent challenge of estimating perfectly each reporting period, increasing volumes of U.S. crude oil production and exports and other factors may also play a role. EIA will continue to evaluate crude oil data to identify possible sources of the higher crude oil adjustment. (NB should real 881,000 barrels per day)
Shale Investors Fear Bloodbath As Earnings Season Kicks Off - The oil majors and shale E&Ps will soon begin publishing second quarter results, which will round out a picture of how the industry fared in the first half of 2019. Shale drillers find themselves at a troubling crossroads. Since 2012, North American oil and gas companies have eviscerated $187 billion in cash flow. Production has soared but the profits have not materialized. For years investors shoveled more capital their way, and the money was dutifully injected into the ground. More oil came up, but again, the financial returns did not follow. Wall Street is losing patience. “Investor sentiment continues to be negative heading into 2Q,” Goldman Sachs wrote in a note. “Meetings with investors this week indicated that generalist portfolio managers are largely hiding and not seeking.” By “hiding,” the bank said that investors were sticking with midstream and integrated companies, and also clean energy. They are “not seeking” oilfield services companies, which are particularly out of favor. That doesn’t mean that they are shunning shale altogether, but Goldman’s assessment was that most investors are sticking with “quality,” and the bank cited EOG Resources, Pioneer Natural Resources, as well as the majors, including Chevron and ExxonMobil, as examples. More notably, Goldman said that while analysts have a wide variety of opinions on things like oil production growth levels, “increasingly specialists are not debating whether stocks go up or down but are flat vs. go down.” In other words, if shale drillers do everything right – they keep capex in check and still produce as much as expected – their share prices will merely stay flat.Related: Fracking Under Fire In California On the other hand, if companies need fresh capital injections, decide to spend more, or report disappointing production figures, then their stocks will sink, Goldman warned. There isn’t a huge upside to shale stocks; at best they will tread water. The industry is in the midst of a wave of consolidation. The decision by Callon Petroleum to buy Carrizo Oil & Gas is a telling example of the trouble that some shale drillers find themselves in. As Liam Denning at Bloomberg Opinion noted, Carrizo’s decision to sell out at a time when its share price was at a multi-year low suggests that it saw little chance that it would be able to drill its way out of its financial predicament. That’s a departure from the past, when companies sought fresh capital and another round of drilling.
Finance Costs are Killing the Shale Industry - If the rapid decline rate or the massive debt doesn’t destroy the U.S. Shale Industry, the finance costs most certainly will. The amount of interest expense the shale companies have paid to finance business and increase production is stunning, to say the least. But, the real problem for the shale industry, isn’t the interest expense that they have already paid, but the staggering amount owed in the future. Actually, I was quite shocked by some of the figures I was coming across during my research. You see, many articles on the Shale Industry have focused on the tremendous amount of debt saddling the companies’ balance sheets. However, one surprising statistic that is not mentioned is the “Total Interest Expense” due on all this debt to maturity (or in the future). While I have posted some graphs showing much much the shale companies were paying in interest expense each quarter or annually, I never considered how much their “Total Finance Cost” would be over the life of their loans (debts). For example, one company that I keep track of is Oasis Petroleum. Oasis has focused most of its drilling and production in the Bakken Field in North Dakota. I believe Oasis is in real trouble because their stock price is very close to a critical $5.00 support level: You will notice that Oasis was trading more than ten times its present value at $55 a share in 2014. Currently, Oasis is trading at $5.20 a share, and a significant-close below $5.00 on the monthly chart spells big trouble for the company. Last year, Oasis paid $159 million in interest expense just to finance its debt. Which is terrible news, because the company’s free cash flow was a negative $155 million in 2018. Thus, if Oasis did not have to pay this high-interest expense, it would have been free cash flow positive. But, as I stated, you should see how much Oasis owes in total interest on its remaining debt:
What Looms Behind - Kunstler - Don’t hold your breath waiting for a coherent pre-election debate about the mother-of-all-issues facing this republic, namely, that we can’t afford the living arrangements Americans think of as “normal” anymore. This quandary has stalked us since the millennium turned. It thunders through all the activities of daily life, and the tensions emanating from it are so agonizing and difficult to face that our politics have deflected off into the kind of hysteria spawned by bad dreams. As the great Wendell Berry pointed out years ago, this is about the nation’s home economics: energy and resources in, production out, surplus wealth saved. The shale oil miracle “solved” the energy-in problem.. Shale oil was a neat stunt. Turns out you can produce a helluva lot of it by paying more to pull it out the ground than you get from selling it. You can goose the process nicely by paying for it with borrowed money. And so it has gone. America now produces a new record of over 12 million barrels a day, and most of the companies doing it can’t make a red cent. And since it is increasingly obvious that they won’t ever pay back the money they borrowed before, they are unlikely to get new loans to continue their profitless operations. Notice how rapidly shale oil production shot up after 2008. It’s worth a peek at analyst Steve St. Angelo’s latest essay on shale oil company debt (Finance Costs Are Killing the Shale Industry) to understand just how this stunt worked. As blogger Tim Morgan at Surplus Energy Economics points out, the dis-economics of energy production — and shale oil in particular — are stealthily damaging everyday life: “…the world economy is already suffering from these effects, and these have prompted the adoption of successively riskier forms of financial manipulation in a failed effort to sustain economic ‘normality.’” That tells you exactly why the stock markets are at record highs now, along with US shale oil production. What the nation doesn’t get is that the shale oil industry is sure to collapse, and at least as rapidly as it shot up. So, expect the stock markets to collapse with it, along with tremendous collateral damage to all the other instruments that represent “money” — bonds, currencies, and their derivatives. It will make the 2008 episode look like a mere overturned poker table when it happens. In the meantime, many of the activities enabled by the oil industry are wrecking the planet, not just CO2 emissions, but the plastics and chemical industries especially. So, the oil quandary bites at both ends: damned if it quits on us and damned if it keeps going.
Oil service firms eye new survival tactics amid weak U.S. market (Reuters) - Packers Plus Energy Services, a company built on the North American shale oil boom, is turning to the Middle East to weather a new round of spending cuts by producers amid warnings of a looming oil glut. Oil production has outpaced demand by 900,000 barrels per day (bpd) this year, according to the International Energy Agency, which expects increases to add a net 136 million barrels to the global surplus by March. Spending cuts by producers also have sharply cut service providers’ margins, a June survey of 60 providers by the Dallas Federal Reserve Bank revealed. The last time supplies overwhelmed demand, oilfield service suppliers cut 100s of thousands of jobs and top firms gushed red ink. Memories of that sharp downturn in late 2014 have executives such as Ian Bryant, chief executive officer of privately-held, Calgary-based Packers Plus, again cutting jobs, seeking safe harbors, mergers, or putting business units on the market. These defensive strategies comes as oil and gas drillers are producing vastly more oil with less investment. On average, analysts expect the top 50 U.S. independent oil producers will cut spending by 20% this year, with some by as much as 60%, according to review by researcher DrillingInfo. That drop has Bryant’s Packers Plus, which historically catered to North American onshore producers, looking beyond shale and toward markets in the Middle East for future business. “There are obviously geopolitical risks, but the cycles are not as vicious as they are in North American land,” “Service pricing is unsustainable at present levels.” Weatherford International, once a top four oilfield service provider, filed for protection from creditors this month and has been cutting staff, citing “market headwinds” and lack of access to financing. In the last 18 months, other top service firms, including the world’s top oilfield services company Schlumberger (SLB.N), added or acquired new hydraulic fracturing fleets in a bet that a backlog of uncompleted shale wells would grow their businesses. But across the U.S. the number of yet-to-be-fracked wells hit 8,289 in May, up 22% in a year, according to the U.S. Energy Information Administration.
Oilfield wastewater may trigger earthquakes for 'decades' - The United States is undergoing a boom in oil and gas production as well as fracking, the process of shooting water mixed with sand and chemicals deep into the earth to bring up hydrocarbons trapped inside rock. Wastewater from fossil fuel production has long been associated with tremors, as producers dispose of it by injecting jets into separate wells dug below ground. The United States Geological Survey says that wastewater disposal from oil and gas production is the number one cause of human-induced earthquakes in the central and eastern US. A team of experts from Virginia Polytechnic and State University now believe that the wastewater, due to its higher density, can pose an earthquake risk for years to come, since it displaces existing groundwater stocks that keep the ground stable. They developed a model based on the wastewater flows in two fracking-heavy states, Kansas and Oklahoma. The team found that the wastewater altered the subterranean fluid pressure to such an extent that it posed a quake risk for decades. "That has some very interesting and I think important consequences for how we understand the hazard posed by oilfield wastewater disposal," said Ryan Pollyea, lead author of the study, published in Nature Communications. Tremors of magnitude 3 or greater used to be relatively rare in the central United States. But in the wake of vast fossil fuel exploration, their numbers have skyrocketed from around 20 a year in 2008 to more than 400 annually. One particularly strong quake struck Oklahoma in September 2016, measuring 5.6 magnitude—large enough to be felt in seven states, from Texas to Iowa. A peer-reviewed study a few months later suggested that four of the most five powerful Los Angeles Basin quakes of the early 20th-century oil boom may have been caused by oil and gas production. Pollyea and the team found that the earthquakes were also getting stronger: in the two states analysed the number of magnitude 4 quakes increased 150 percent since 2016, while the number of 2.5-magnitude tremors went down by over a third. They are also getting deeper. "We have found a new mechanism to explain how fluid pressure causes and increases earthquakes deep under ground," Pollyea said.
Trump's Drilling Leases on Public Lands Could Lead to 4.7B Metric Tons of Carbon Emissions - A national conservation group revealed Wednesday that President Donald Trump's drilling leases on public lands could lead to the release of more carbon emissions than the European Union contributes in an entire year. The Wilderness Society estimates that U.S. companies will emit at least 854 million and as much as 4.7 billion metric tons of carbon if they develop leases in public waters and lands. "Taking into account the potency of shorter-lived climate pollutants like methane, lifecycle emissions resulting from the development of these leases could be as high as 5.2 billion metric tons," the group's new reportr eads. The 28 countries in the EU released four billion metric tons in one year, according to the most recent available data. Regardless of exactly how many leases are put to use by oil and gas companies, the Wilderness Society reports, "These leasing decisions have significant and long-term ramifications for our climate and our ability to stave off the worst impacts of global warming." Since taking office in 2017, Trump has offered up 378 million acres of public land to oil and gas companies and has sought to overturn the Obama administration's ban on coal leases.
SMLP Announces Start-Up of DJ Basin Processing Plant - Summit Midstream Partners announced today the successful commissioning of its new 60 MMcf/d cryogenic processing plant in the DJ Basin. The new facility, which substantially increases SMLP's prior processing capacity in the DJ Basin, delivers residue gas to Colorado Interstate Gas and Trailblazer Pipeline and processed NGLs to the Overland Pass Pipeline. In addition, SMLP expects the new plant to operate more efficiently and to generate substantially higher NGL recoveries compared to SMLP's legacy 20 MMcf/d processing facility. Volumes at this new plant are expected to ramp considerably throughout the balance of 2019 based on existing production behind our system and new production associated with our customers' drilling and completion schedules. SMLP's capital investment in the new processing plant was underpinned with monthly demand payments from certain of our customers, and the commissioning of the plant enables SMLP to earn those monthly demand fees, beginning in the third quarter of 2019. SMLP estimates that the new facility will enable annualized DJ Basin segment adjusted EBITDA for the second half of 2019 to more than triple the $7.6 million of DJ Basin segment adjusted EBITDA reported in all of 2018.
North Dakota sues feds over pipeline protest police costs (AP) — North Dakota sued the federal government Thursday to recover the $38 million the state spent policing protests against the Dakota Access oil pipeline. Attorney General Wayne Stenehjem said he filed the claim in Bismarck federal court after the Army Corps of Engineers ignored an administrative claim he filed one year ago. The agency did not immediately return telephone calls seeking comment Thursday. It has 60 days to respond to the state’s 37-page lawsuit. Thousands of opponents of the $3.8 billion pipeline that’s been moving North Dakota oil to Illinois for two years gathered in southern North Dakota in 2016 and early 2017, camping on federal land and often clashing with police, resulting in 761 arrests over six months. Stenehjem said the Corps “allowed and sometimes encouraged” protesters to illegally camp without a federal permit. The Corps has said protesters weren’t evicted due to free speech reasons. The Corps’ inaction required North Dakota to provide law enforcement to prevent deaths and protect property, including that of the protesters, Stenehejem said. “When the protesters finally left, they left behind a spoiled environment and a vast quantity of dangerous waste, garbage and debris that had to be cleaned up by the state at considerable cost,” Stenehjem told reporters.
Pipe spills oilfield wastewater in Missouri River tributary -- Cleanup is underway after 21,000 gallons of brine oilfield wastewater leaked from an underground pipeline in western North Dakota and into an unnamed tributary of the Missouri River, the state Health Department said Monday. State environmental scientist Bill Suess said the pipeline operator, Polar Midstream LLC, on Sunday reported the spill of produced water, a byproduct of oil production that contains saltwater and oil, and sometimes chemicals from hydraulic fracturing operations. The spill occurred about 20 miles (32 kilometers) east of Williston and about a mile from Lake Sakakawea, the largest reservoir on the Missouri River. Suess said Monday it did not appear the spill reached the lake. The cause of the spill was not known Monday. Polar Midstream is a unit of Woodlands, Texas-based Summit Midstream Partners LLC, which was responsible for a 3 million-gallon (11.4 million liter) produced water leak from a pipeline in 2014, the largest of its kind in the state. The company did not immediately return a telephone call Monday. Suess said Sunday’s spill from the underground pipeline affected an area around a drilling site and a nearby tributary, which has been dammed. “We’ve seen some saltwater impacts (to the tributary) but no oil,” he said. “We will make sure any impacted water is pumped out.” The company also will dig up the pipeline and replace it, he said.
Montana, North Dakota push against Washington state rail law -- Attorneys general for North Dakota and Montana asked the Trump administration on Wednesday to overrule a Washington state law that imposed new restrictions on oil trains from the Northern Plains to guard against explosive derailments.In a legal petition to the U.S. Department of Transportation, Montana Attorney General Tim Fox and North Dakota's Wayne Stenehjem said federal authority over railroads pre-empts the state law.Washington Gov. Jay Inslee, a Democrat, in May signed the measure that requires oil shipped by rail through the state to have more volatile gases removed to reduce the risk of explosive and potentially deadly derailments.The move followed a string of fiery and explosive oil train derailments over the past decade, including a 2013 accident in Lac-Megantic, Quebec, that killed 47 people. The explosions drew widespread public attention to the volatile nature of Bakken crude shipments. But opponents say the new restrictions would make Pacific Northwest refineries effectively off-limits to crude from the Bakken region, one of the nation's most productive oil fields straddling the North Dakota-Montana border. That's because the process of treating the oil to make it less volatile would be too expensive to justify, they said."It's pretty clear in this the state of Washington overstepped its bounds," Fox said. "The effect would be terrible, both on the economies of North Dakota and Montana and also how it offends the rule of law."
Chevron Has Spilled 800,000 Gallons of Crude Oil and Water Into a California Canyon Since May --California officials ordered Chevron Friday "to take all measures" to stop a release that has spilled around 800,000 gallons of water and crude oil into a dry creek bed in Kern County, KQED reported. The order, issued by the new acting head of the state's Division of Oil, Gas and Geothermal Resources (DOGGR) Jason Marshall, also said the fossil fuel company had not done enough to stop the spills that had begun May 10. The order came a day after California Gov. Gavin Newsom fired former DOGGR head Ken Harris after a significant rise in fracking permits. "The Chevron spill clearly shows that California needs stronger climate leadership from the governor,"Greenpeace USA Executive Director Annie Leonard said in a statement reported by KQED. "Oil and gas infrastructure will never be free from spills and leaks or from spewing climate pollution. We face a growing public health crisis and climate emergency stoked by rampant oil and gas development."DOGGR had initially issued Chevron with an order of violation and ordered it to stop some extraction in the area. Friday's order upped the ante by mandating the company completely stop the releases and take steps to prevent future ones."Chevron takes these matters seriously," the company said in a statement Saturday. "We will review the order and continue working in a collaborative manner with the involved agencies." Officials began Friday to clean the spill, The Associated Press reported, which is the largest of California's recent oil spills. However, while the spill is larger than both the 2015 spill that dumped 140,000 gallons of crude oil onto Refugio State Beach and the 2007 spill of 54,000 gallons of oil into San Francisco Bay, it has been less devastating since it was not near an active waterway and has not significantly impacted wildlife, both company and state officials said.
California governor orders firing of oil, gas regulator (AP) — Gov. Gavin Newsom ordered the firing of California’s top oil and gas regulator Thursday over an increase in state permits for hydraulic fracturing and allegations of conflicts of interest among senior government officials. Newsom’s chief of staff asked the state’s natural resources secretary to dismiss Ken Harris, who was appointed to lead the Division of Oil, Gas and Geothermal Resources in 2015. She also told Secretary Wade Crowfoot to continue an investigation into reports that employees at the agency own stock in companies that they regulate. Ann O’Leary’s request came hours after advocacy groups Consumer Watchdog and FracTracker Allliance released data showing regulators have been issuing permits for hydraulic fracturing at twice the rate this year when compared to 2018. The number of permits granted for drilling new wells also increased by 35% from January 1 to June 3 when compared to the rate last year, according to the groups’ data. The organizations said that of the 2,365 well permits issued in those months, 45% benefited oil companies in which division officials owned stock. Newsom took office in January and O’Leary told Natural Resources Secretary Wade Crowfoot in an email shared with the Associated Press that the number of hydraulic fracturing permits had increased without his knowledge. “The Governor has long held concerns about fracking and its impacts on Californians and our environment, and knows that ultimately California and our global partners will need to transition away from oil and gas extraction,” O’Leary wrote. “In the weeks ahead, our office will work with you to find new leadership of (the division) that share this point of view and can run the division accordingly.” Consumer Watchdog and FracTracker Alliance noted a deputy director at the division disclosed owning stock in ExxonMobil worth as much as $100,000.
California governor criticizes increase in fracking permits - (AP) — California Gov. Gavin Newsom said Friday he wants to move the nation’s most populous state away from hydraulic fracturing, a day after he fired the state’s top oil and gas regulator for issuing twice as many fracking permits this year compared to last. “I don’t think anyone that was paying attention, including the individual that’s no longer there, is unaware of my position on fracking,” Newsom told reporters. “I’ve been very explicit about it. The fact that they did not exercise consistency with that is one of the reasons he’s not there.” He fired state Oil and Gas Supervisor Ken Harris following reports the state Division of Oil, Gas and Geothermal Resources had doubled the fracking permits it issued in the first half of 2019, and that senior officials at the division held stocks in oil companies they were responsible for regulating. Newsom said he doesn’t have the authority to put a moratorium on fracking, but that he wants to transition the state away from its use and, more broadly, reliance on oil and gas. Several environmental groups disputed his claim that he can’t ban fracking himself and noted the Legislature can ban it. “The governor definitely has the power to instruct the agency to ban fracking, to stop issuing permits for new wells, to stop the expansion of the industry and to protect public health,” said Kassie Siegel, director and senior counsel of the Climate Law Institute at the Center for Biological Diversity. Beyond increasing permits for fracking, the process of extracting oil and natural gas from rock, records show the number of permits for drilling new wells has increased. The advocacy organizations Consumer Watchdog and FracTracker Alliance found of the 2,365 oil well permits issued this year, 45% benefited oil companies in which division officials owned stock.
After 800,000-gallon spill, Chevron site is still leaking oil - On the same day Sen. Dianne Feinstein chastised Chevron Corp. for keeping an 800,000-gallon spill outside Bakersfield “under wraps,” California officials confirmed Thursday that the site was once again seeping a hazardous mix of oil and water. The new leakage occurred in a surface expression vent in the Cymric oil field, near the Kern County town of McKittrick, according to the state Division of Oil, Gas and Geothermal Resources. The vent is one of the locations where three previous leaks released about 800,000 gallons of oil and water. Field inspectors from the agency identified the latest seepage at 3 p.m. Wednesday and released information about the latest spill Thursday. The agency is working to address what they are describing as a large oil release. The leak potentially resulted from a high-intensity steam injection intended to release oil. According to the agency, the first leak occurred on May 10 and was stopped that day. New seepage occurred on June 8 and continued to flow intermittently for a span of five days. The persistent seepage was again recorded June 23 and Wednesday, the agency said. On Thursday, Feinstein (D-Calif.) issued a news release accusing Chevron of failing to inform the public about the leak. “This is something the public should have been alerted to earlier,” she said. “Proper oversight can’t occur if incidents like these are kept under wraps.” Feinstein said that although the company said it had recovered most of the oil, “the full toll to the area is not yet known.” She said it was fortunate that the leak did not occur “during a rainy period or the effects on our environment and wildlife would have been even more tragic.” The Kern County Environmental Health Services Department reports that the Division of Oil, Gas and Geothermal Resources is the lead agency addressing the spill. Kern County Public Health is not legally permitted to enter the site until it is deemed safe. After that time, the county will work alongside appropriate agencies to begin the cleanup. On Thursday, the Natural Resources Defense Council echoed Feinstein’s concerns. “This is not the time for Chevron to keep details about this destructive oil spill from the public,” said Damon Nagami, the council’s senior attorney. “Time and time again, we’ve seen the devastating effects of oil spills on our wildlife, water and communities. Multiple notices of violation signal that is a serious problem, and we expect DOGGR to hold Chevron fully accountable.”
Chevron Aims to Turn Canada LNG Plan Into Electric Design - -- Chevron Corp. is seeking approval to modify its plans for a liquefied natural gas export facility on Canada’s Pacific Coast to an all-electric design that it says will result in the lowest greenhouse-gas emissions per ton of LNG of any large project in the world. Chevron and its partner Woodside Petroleum Ltd. earlier this year had announced they’d applied to expand the capacity of their LNG project in Kitimat, British Columbia, by as much as 80% to 18 million metric tons a year. That triggered a new federal screening of the project that’s expected to “commence shortly,” according to a July 8 letter filed by Chevron to the provincial environmental assessment office. As part of the fresh round of approvals sought, the project is proposing to become an “all-electric plant” powered by hydroelectricity, allowing expanded capacity without the corresponding increase in emissions of a traditional LNG facility, the letter said. LNG is created by cooling gas to minus 260 degrees Fahrenheit (minus 127 degrees Celsius) in an energy-intensive process typically powered by burning natural gas. Kitimat LNG instead proposes electric motor drives totaling 700 megawatts to run all liquefaction, utility compressors, pumps and fans with hydropower bought from the provincial utility, according to its revised project description dated July 8. It will have backup diesel power generators onsite for emergencies. The proposed plant “will achieve the lowest emissions intensity of any large-scale LNG facility in the world,” according to the project description. Kitimat LNG will produce less than 0.1 ton of carbon dioxide equivalent for every ton of LNG compared with a global average of more than 0.3 ton of CO2 equivalent, according to the document.
12,000 L of oil spilled into ocean off Newfoundland... Production has stopped aboard the Hibernia oil platform off the coast of St. John's after an estimated 75 barrels, or 12,000 litres, of oil spilled from a storage cell into the water. An oil sheen was spotted Wednesday, and the company said in a news release that the spill was an "isolated activity." The mixture of oil and water was discharged from one of the six storage cells, which contain oil and water and are always full, on the platform, said Scott Sandlin, president of Hibernia Management and Development Company (HMDC). An "oily water discharge was released during a routine operation associated with lowering the water levels in those cells," Sandlin said. The investigation is continuing, but it's suspected that the discharge was related to an issue with the sensors in the storage cells that indicate the levels of oil and water, he said.
Canadian platform spills 3,200 gallons of oil-mix into Atlantic An oil platform off the Canadian island of Newfoundland spilled nearly 3,200 gallons of an oil-water mix into the Atlantic Ocean, and efforts were underway to minimize the environmental impact, ExxonMobil said Thursday. The spill occurred a day earlier during "routine activities related to removing water" from a platform storage cell, the American oil giant said earlier. "The estimated volume of oil released from the Hibernia platform was 75 barrels of oil, equivalent to approximately 12,000 liters (3,170 gallons)," according to aerial surveillance, the Hibernia Management and Development Company (HMDC) said in a statement released by ExxonMobil. That area of the North Atlantic is rich in marine life, including species of whales, but HMDC said "no wildlife has been observed in the area" by specialists who were sent out. "We're disappointed the discharge occurred, but we are working diligently to minimize impacts on the environment," the statement quoted Scott Sandlin, HMDC's president, as saying. On Wednesday the company said it temporarily shut the oil platform after discovering the oil-water spill into the ocean. It was using a range of clean-up measures including a boom-type system deployed over the side of a vessel, assisted by a skimmer. HMDC said it was monitoring a sheen on the ocean surface with an approximate radius of three nautical miles (3.5 miles, 5.6 kilometers), about 204 miles east of St John's Newfoundland. "Vessels have been tasked with monitoring and clean-up of the sheen and requests that all mariners keep a 10 nautical mile berth from this area," it said. Hibernia -- which opened for production in 1997 and is located about 196 miles east of St John's -- is jointly owned by Chevron, Suncor and Equinor (formerly Statoil) in addition to ExxonMobil, which holds the majority share. The oil deposit below Hibernia -- accessed via underwater drilling -- is estimated to contain more than 1.2 billion barrels of oil.
Kirby Corp fined $2.9 million for British Columbia oil spill A fine of $2.9 million was levied against Texas-based Kirby Corp for the October 2016 spill of 110,000 liters of diesel and other heavy oils on the fishing grounds of the Heiltsuk Nation when it ran aground and sunk. The nation says that the fine is “along way from justice,” and is demanding proper restitution and says that the corporation should be banned from territorial waters until it does so. The corporation pleaded guilty to violations of the Migratory Birds Convention Act and the Pilotage Act in may of this year. Birds and fish were affected and the tug did not have a pilot aboard as required. Kirby Corp issued a statement apologizing for the spill and says that they are amending their operating procedures, training and equipment to reduce the chances of a similar event re-occurs in the future.
Ecopetrol's plan for fracking project hits new snag in Colombia (Reuters) - Colombia’s environmental authority said on Friday that it was suspending its evaluation of Ecopetrol’s request to start a fracking pilot project until an administrative court reinstates rules for tapping unconventional crude deposits. The decision was a new snag in the state-owned oil company’s plan to spend $500 million on exploring unconventional deposits. Last year, the Council of State - tasked with ruling on administrative matters - decided to suspend regulations for tapping unconventional deposits, typically shale formations that contain oil and gas. While the court holds hearings on the regulations, the National Authority for Environmental Licenses (ANLA) will suspend its evaluation of Ecopetrol’s request for an environmental license for the massive unconventional crude deposit Guane-A, ANLA said in a statement. The decision will likely mean a longer wait if and when the Council of State authorizes the regulations.
WA fracking ban to be lifted next month - A moratorium on gas fracking in parts of Western Australia is expected to be officially lifted next month. In November, the state government announced its election promise banning the controversial practice in the South West, Peel and Perth regions would remain, but fracking would be allowed on existing petroleum titles in other parts of WA. Its implementation plan, released late on Friday, shows the completion date for lifting the moratorium is August. The Australian Petroleum Production and Exploration Association applauded, saying it would help boost confidence in the sector, and deliver much-needed jobs and economic growth. The state government has been at pains to stress the petroleum titles where fracking will be allowed cover just two per cent of the state. It also says fracking will not be allowed in sensitive areas including the Dampier Peninsula, but has not yet defined the boundary and expects that will be complete by October. "There is still so much work to do," The Wilderness Society's acting state director Kit Sainsbury said on Monday. "Many of the regulations it intends to implement run through to December 2020 before their conclusion."
Traditional owner fracking veto right won't extend to exploration in WA - Traditional owners' right to veto hydraulic fracturing projects will not apply to exploration applications, the WA Department of Mines, Industry Regulation and Safety has confirmed. On Friday the WA government released an 18-month 'implementation plan' that would see the ban on fracking on existing onshore petroleum titles lifted in the state next month. In WA, most fracking activities would target gas between two to three kilometres underground in tight and shale rocks. The lifting of the ban will apply to about 2 per cent of the state. The plan also outlined the heavy regulations companies must meet before they can begin fracking. Companies will need consent from traditional owners and private landowners before production is permitted, but Wilderness Society WA acting state director Kit Sainsbury is worried this would not apply to exploration applications. “The government made a lot of noise about the traditional owner veto, however, the devil is in the detail with these matters and the implementation plan doesn’t effectively review this point,” he said.
Frantic Friday hell as 8-mile oil spill closes M5. THE M5 has been closed in both directions for eight miles this morning due to a massive an oil and diesel spill. The closure is in place between J26 (Wellington) to Junction 24 (Huntsworth). Drivers have been advised to take the diversion route via the A38. There is also heavy traffic on the M5 near Bristol following the outbreak of an industrial fire. It comes as Brits are warned to brace for “Frantic Friday” carnage as 13.4 million of us hit the road for the great summer getaway. Motorists have been warned to face gridlock on major roads this weekend as the busiest summer getaway in five years begins. Today is dubbed "Frantic Friday" as Brits across the country ready to kick off their summer holidays. Research by the RAC and traffic information supplier Inrix indicates that 13.4 million leisure trips will take place by car between Friday and Sunday. This is around four million more than the same weekend last year and would represent the largest summer getaway since 2014, according to the analysis. Motorists have been warned to face gridlock on major roads this weekend as the busiest summer getaway in five years begins.
Oil, Gas Companies Target of Germany's Carbon Levy Plan -- Oil and gas companies that supply Europe’s biggest energy market fuels for cars, trucks and heating may be soon be required to pay for carbon pollution allowances if a panel advising the government gets its way. Chancellor Angela Merkel this month started talks on how to force the transport and building industries to pay for their pollution, widening the number of sectors required to participate in the European Emissions Trading System, or ETS. Merkel hasn’t decided yet whether to push for extending the ETS to those industries or to impose a new tax on carbon. A panel advising Merkel and her ministers favors using the cap-and-trade market. Germany should copy Europe’s ETS and apply it nationally to heating and road emissions, Klaus Schmidt, the group’s co-chairman told reporters on Monday. Setting up separate platforms for trading permits in those sectors would enable the market to squeeze out polluting technologies like road and heating fuels. That’s provided floor and ceiling prices are set, he said. By compelling oil and gas companies like Royal Dutch Shell Plc, BP Plc, Total SA, Wintershall AG and Gazprom PJSC or their German units to buy pollution certificates, Merkel’s coalition would potentially retain the ability to steer CO2 reduction with precision by controlling auction volumes. While Germany has cut emissions from power production, pollution from automobiles, trucks and aircraft remain stubbornly high. Merkel, who as environment minister in the 1990s sketched some of the first international climate deals organized by the United Nations, in 2007 pledged her nation will cut emissions 40% by 2020 from 1990 levels. Germany is set to miss the target, senior ministers have said. In order to hasten carbon dioxide emission reductions, the group envisages forcing oil and gas companies to engage in “upstream permit auctions,” said Schmidt. The group declined to comment on envisaged floor prices for CO2 permits in transport or heating. The proposals “were very well received” by the government, Friedrich Breyer, the group’s co-head, told Bloomberg.
Russia's Transneft, oil firms clash over pipeline system clean-up (Reuters) - Major Russian oil companies have challenged a plan by Transneft that aims to resolve a problem of tainted oil stuck in Russia’s pipeline and storage system by diluting it with clean crude, four company sources said on Wednesday. They said mixing the crude would undermine the quality and price of Russian exports for longer, as it might take until mid-2020 to fully flush out Transneft’s pipeline network, rather than emptying it now and selling the tainted crude at a big discount. The pipeline monopoly’s preliminary plan was discussed at a meeting at the Russian Energy Ministry on Tuesday, the sources said, adding it was unlikely the objections raised by the major oil firms would halt Transneft’s plans to proceed next week. “It is not a good idea to mix clean and dirty barrels. It is a waste of the product. There are other options to get rid of contaminated barrels and we will make our proposals,” one of the four sources told Reuters, asking not to be named. Another source said selling dirty barrels at a steep discount was the best way to swiftly resolve the issue. Russia’s oil industry was plunged into crisis after about 5 million tonnes of oil for export was found in April to be contaminated with organic chloride, a chemical used to help boost oil extraction but which can damage refining equipment. Exports through the Druzbha pipeline that transports oil as far west as Germany were halted and have only partially resumed. Buyers have demanded compensation. Tainted crude has been stuck in pipelines in Belarus and branches further west in Poland, Germany, Ukraine, Slovakia, Hungary and the Czech Republic. About 2 million tonnes have been pumped back from Belarus to Russia, where it is being stored. Russia allows no more than 6 parts per million (ppm) of organic chloride content in oil, while the levels in the pipeline had soared to 150-250 ppm. Before the contamination, levels rarely exceeded 1-3 ppm. Many consumers in Europe and Asia reject oil with organic chloride content above 1 ppm.
EU Agrees To Sanction Turkey For Drilling In Cypriot Waters - A surprisingly muscular response beyond mere threatening rhetoric out of the European Union over Turkey's violations of Cypriot territorial waters related to offshore drilling operations: the EU has agreed to bring financial and political sanctions against Turkey after repeat warnings of the past weeks. European Union officials on Monday agreed political and financial sanctions against Turkey after Ankara went ahead with drilling operations off Cyprus despite repeated warnings, European diplomats said. — AFP"The conclusions on Turkey have been adopted and they will be made public in the coming hours," the EU's foreign policy chief Federica Mogherini told reporters following a meeting of foreign ministers. Austrian Federal Minister for Europe, Integration and Foreign Affairs Alexander Schallenberg also announced prior to Mogherini's remarks Monday from Brussels:"Today, we will adopt a number of measures against Turkey — less money, fewer loans through the European Investment Bank, freeze of aviation agreement talks. Naturally, other sanctions are possible.""We [the] are fully behind Cyprus," Schallenberg added while addressing the crisis, which has involved Turkey laying claim to a waters extending a whopping 200 miles from EU member Cyrprus' coast, brazenly asserting ownership over a swathe of the Mediterranean that even cuts into Greece's exclusive economic zone.Last week the Turkish drilling vessel Yavuz sailed to an area off Cyprus’ east coast — 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.Cyprus has long condemned Turkey's ag gressive oil and gas explorations as a "second invasion" in reference to the creation in 1974 of the breakaway Turkish Republic of Northern Cyprus after a military takeover.
Turkey Rejects EU Sanctions As Not Serious - Will Send 4th Drilling Ship Near Cyprus - Perhaps to be expected, Turkey's response to yesterday's EU announcement of impending economic and political sanctions to be brought against Ankara has been to swiftly and immediately double down on drilling, while dismissing the crisis as "not serious". Turkey has now sent its fourth oil and gas exploration ship to the eastern Mediterranean after European leaders condemned its drilling in EU-member Cyprus' territorial waters. Turkish Foreign Minister Mevlut Cavusoglu responded: "Calling the EU's decision sanctions means taking it seriously. You shouldn't do that, the decision was made to satisfly Greek Cypriots. These things don't have any effect on us."Turkey's Anadolu Agency reports, "Turkey will send its fourth ship to the Eastern Mediterranean region to continue its exploration and drilling, the country’s energy and natural resources minister said on Tuesday. It will join the Fatih and recently deployed Yavuz, and the seismic vessel the Barbaros Hayrettin Pasa which has conducted exploration in the Mediterranean since April 2017."The MTA Oruc Reis seismic research ship, which has been conducting seismic surveys in the Black Sea and Marmara since August 2017, will be sent to conduct seismic surveys in the Mediterranean Sea," Energy minister Fatih Donmez announced.This was accompanied by FM Cavusoglu warning the EU that Turkey plans to increase its drilling and exploration activities in the East Mediterranean while "protecting the rights" of Turkish Cypriots. Ankara's position is that it has the same rights as the Greek Cypriot government to drill in the region, which Turkey interprets as including waters that expand 200 miles from EU member Cyrprus' coast, brazenly asserting ownership over a swathe of the Mediterranean that even cuts into Greece's exclusive economic zone. On Monday, following a meeting of EU foreign ministers in Brussels, the European Union announced that it will bring sanctions against Turkey for violating Cyprus' waters, which has also involved Turkey sending drones, F-16 fighters, and warships to escort the few drilling ships it's already deployed off Cyprus.
The ‘biggest change in oil market history’ is less than six months away -Tens of thousands of ships sailing the world’s oceans burn more than 3 million barrels of sludge-like high-sulfur fuel every single day. But, starting next year, the shipping industry will have to comply with rules that should dramatically reduce sulfur emissions.“It is the biggest change in oil market history,” Steve Sawyer, senior analyst at energy consultant Facts Global Energy, told CNBC.“It is going to affect crude oil producers, traders, ship owners, refiners, equity investors, insurance companies, logistical businesses, banks… Who’s left? I’m struggling to think of anyone it might not affect. That’s why it is a huge transition,” Sawyer said.With less than six months to go before the new rules on marine fuels come into force, CNBC takes a look at the far-reaching consequences of the coming changes. On January 1, 2020, the International Maritime Organization (IMO) will enforce new emissions standards designed to significantly curb pollution produced by the world’s ships.Amid a broader push towards cleaner energy markets, the IMO is set to ban shipping vessels using fuel with a sulfur content higher than 0.5%, compared to levels of 3.5% at present.The most commonly used marine fuel is thought to have a sulfur content of around 2.7%.There is a brick wall coming at the end of December which has been built for over two years. I think you can either run into it head first and say: ‘that hurts,’ or you can find a way around it. ” The new regulations are the result of a recommendation that came from a subcommittee at the United Nations (UN) more than a decade ago and was adopted in 2016 by the UN’s IMO, which sets rules for shipping safety, security and pollution.More than 170 countries, including the U.S., have signed on to the fuel change. Starting in 2020, ships found in violation of the new laws risk being impounded and ports in cooperating countries are expected to police visiting vessels.
China June crude oil throughput rises to record on new plants (Reuters) - China’s crude oil throughput rose to a record in June, up 7.7% from a year earlier, following the start-up of two new, large refineries, official data showed on Monday. Crude processing volumes last month reached 53.7 million tonnes, or about 13.07 million barrels per day (bpd), beating the previous record in April of 12.68 million bpd, according to figures from the National Bureau of Statistics (NBS). The hefty processing rates were supported by the start up of two major new refineries. Private firm Hengli Petrochemical ramped up its 400,000-bpd refinery in Dalian to full capacity in late May and Zhejiang Petrochemical began trial runs at a similar-sized facility on the east coast. “The high output data was mainly due to the two new plants, but still the figure exceeds our estimates as many refineries were shut for maintenance,” said Wang Zhao, an analyst with Sublime Information Co, a local consultancy, based in Zibo in eastern China’s Shandong province. “We expect throughput to be lower in the coming months on extended plant shutdowns, because inventories of gasoline and diesel were at the high end and domestic fuel demand remained weak,” said Wang.
Iran drives unplanned OPEC crude oil production outage to highest levels since late 2015 --Unplanned crude oil production outages for the Organization of the Petroleum Exporting Countries (OPEC) averaged 2.5 million barrels per day (b/d) in the first half of 2019, the highest six-month average since the end of 2015. EIA estimates that in June, Iran alone accounted for more than 60% (1.7 million b/d) of all OPEC unplanned outages.EIA differentiates among declines in production resulting from unplanned production outages, permanent losses of production capacity, and voluntary production cutbacks for OPEC members. Only the first of those categories is included in the historical unplanned production outage estimates that EIA publishes in its monthly Short-Term Energy Outlook (STEO). Unplanned production outages include, but are not limited to, sanctions, armed conflicts, political disputes, labor actions, natural disasters, and unplanned maintenance. Unplanned outages can be short-lived or last for a number of years, but as long as the production capacity is not lost, EIA tracks these disruptions as outages rather than lost capacity. Voluntary cutbacks count toward the country’s spare capacity but are not counted as unplanned production outages. EIA defines spare crude oil production capacity—which only applies to OPEC members adhering to OPEC production agreements—as potential oil production that could be brought online within 30 days and sustained for at least 90 days, consistent with sound business practices. During the fourth quarter of 2015, before the Joint Comprehensive Plan of Action became effective in January 2016, EIA estimated that an average 800,000 b/d of Iranian production was disrupted. In the first quarter of 2019, the first full quarter since U.S. sanctions on Iran were re-imposed in November 2018, Iranian disruptions averaged 1.2 million b/d. Another long-term contributor to EIA’s estimate of OPEC unplanned crude oil production outages is the Partitioned Neutral Zone (PNZ) between Kuwait and Saudi Arabia. Production halted there in 2014 because of a political dispute between the two countries. EIA attributes half of the PNZ’s estimated 500,000 b/d production capacity to each country.
Column- Hedge funds stick to the sidelines in oil - (Reuters) - Hedge funds and other money managers left their petroleum positions essentially unchanged last week as the poor outlook for consumption offset production concerns stemming from tensions in the Middle East. The net long position in petroleum futures and options remained unaltered at 563 million barrels in the week to July 9, according to records published by regulators and exchanges. Portfolio managers made only major changes to their net position in Brent (-4 million barrels), NYMEX and ICE WTI (-5 million), U.S. gasoline (+2 million), U.S. heating oil (+3 million) and European gasoil (+4 million). Summer holidays across much of North America and Europe generally produce lighter trading volumes and smaller position changes during July and August, which likely accounts for the very small adjustments. But the short-covering rally that had lifted hedge funds’ total petroleum positions by 41 million barrels over the previous two weeks ran out of steam (https://tmsnrt.rs/2NSJXGv). Positions and prices are delicately poised between worries over the global economic slowdown and concerns about future supply disruptions stemming from conflict around the Gulf and shortages of middle distillates caused by the introduction of new marine fuel regulations from the start of 2020.
Oil prices edge higher on Chinese economic data - Oil prices rose slightly on Monday as Chinese industrial output and retail data topped expectations but gains were capped by overall figures showing the country’s slowest quarterly economic growth in decades. The positive Chinese data may indicate early success in the government’s stimulus efforts and potentially more oil demand in the world’s second biggest economy. Brent crude futures rose 33 cents, or 0.5%, to $67.05 a barrel, while U.S. crude was up 20 cents, or 0.3%, at $60.41 a barrel. Both contracts last week made their biggest weekly gains in three weeks on cuts in U.S. oil production and diplomatic tensions in the Middle East. Analysts at ANZ bank said China’s crude oil imports year-to-date still looked impressive, even as imports fell in June for a second straight month. China’s crude oil throughput rose to a record of 13.07 million barrels per day in June, up 7.7% from a year earlier, following the start-up of two new, large refineries, official data showed on Monday. Still, economic growth of just 6.2% in the second quarter of 2019 -- the worst in 27 years -- highlighted the impact of trade tensions with Washington and raised the possibility that more incentives might be needed to jump start the economy. Despite a truce agreed between the Chinese and U.S. presidents last month, the trade war remains unresolved. The Paris-based International Energy Agency’s monthly report on Friday said that abundant output and sluggish growth would leave oil markets increasingly over-supplied going into 2020. “The basic message is that the second half of this year will see some depletion in global oil inventories but this will be followed by a dismal 2020, especially the first six months of next year,” PVM analyst Tamas Varga said. Refineries in the path of Tropical Storm Barry continued to operate,
Oil prices end lower after last week’s gains as Gulf storm threat passes - Oil futures settled lower Monday, giving back a portion of last week’s sizable gains, as production in the Gulf of Mexico began a post-storm recovery. “Near-term, the trend is still higher, but the combination of formidable technical resistance in the mid $60s [for WTI] and persistent demand concerns due to the trade war will likely prevent prices from making new highs for the year,” said Tyler Richey, co-editor at Sevens Report Research. “That could change if the pace of [U.S.] stockpile draws, which have averaged 6.6 [million barrels] per week over the last month, holds near current levels,” he said in daily report. August West Texas Intermediate crude fell by 63 cents, or 1.1%, to settle $59.58 a barrel on the New York Mercantile Exchange, pulling back after finishing last week with a 4.7% gain. WTI’s recent trade above $60 had been seen by technical commodity analysts as a bullish sign for the asset, which has recently been in an upward trend, on the back of a pause in tensions between the U.S. and China on tariffs and an agreement to keep production capped until March of 2020 by the Organization of the Petroleum Exporting Countries and other major producers, including Russia. Meanwhile, international benchmark September Brent lost 24 cents, or 0.4%, to $66.48 a barrel on ICE Futures Europe. Brent gained 3.9% last week. The WTI and Brent contracts had reached “key resistance levels” with Brent at $67 and WTI at the $60/61 range — ”levels which were formerly support and now resistance,”
Oil down as US Gulf of Mexico output returns --Oil prices fell for a second day on Tuesday as more production facilities returned to operation in the U.S. Gulf after Hurricane Barry swept through over the weekend, while Chinese economic data dimmed the outlook for crude demand. Brent crude futures were down 10 cents, or 0.2%, at $66.38 a barrel by 0028 GMT. They fell 0.4% overnight. U.S. crude fell by 10 cents, or 0.2% to $59.48 a barrel. The U.S. benchmark fell about 1% in the previous session. Both contracts last week made their biggest weekly gains in three weeks as U.S. oil inventories fell and diplomatic tensions rose in the Middle East. But as producers on Monday began restoring some of the nearly 74% of output that was shut at U.S. Gulf of Mexico platforms ahead of Hurricane Barry, concerns about oversupply returned to the fore. And while Chinese data on Monday showed industrial output and retail data beat expectations, overall figures showed the country’s slowest quarterly economic growth in decades. China’s oil throughput rose to a record 13.07 million barrels per day in June, up 7.7% from a year earlier, following the start-up of two new large refineries, official data showed. Still, economic growth of just 6.2% in the second quarter of 2019 — the weakest in 27 years — highlighted the impact of trade tensions with Washington and raised the possibility that more incentives might be needed to jump-start the economy. “The more significant drag on oil markets is China’s weaker consumption data,” said Stephen Innes, managing partner, at Vanguard Markets. In the U.S. there was 1.3 million barrels per day (bpd) of oil production offline in the U.S.-regulated areas of the Gulf of Mexico on Monday, about 80,000 barrels fewer than on Sunday. Workers also were returning to the more than 280 production platforms that had been evacuated. It can take several days for full production to be resumed after a storm leaves the Gulf of Mexico.
Oil Falls Back As Iran Risk Factor Fades - Oil prices started off the week on a quiet note, but retreated on Tuesday afternoon after Secretary of State Mike Pompeo said that Iran is ready to negotiate its missile program. . New data shows that China’s GDP growth fell to just 6.2 percent in the second quarter, the worst performance in nearly three decades. In the first quarter, growth stood at 6.4 percent.. The European Union’s Court of Justice ruled that a natural gas processing facility owned by ExxonMobil should be classified as an electricity generator, subjecting it to the carbon market. If that decision applies to some 3,000 factories that transfer heat or electricity to the public grid, it could bring in a lot more polluters, which could drive up the cost of carbon. Carbon prices are already at an 11-year high. “It’s backfiring not just on Exxon, but on many companies receiving free allowances for power stations located at factories,” Mark Lewis, global head of sustainability research at BNP Paribas SA’s asset management unit, told Bloomberg. The EIA expects U.S. energy-related carbon emissions to fall this year by 2.2 percent, largely due to the decline of coal-fired power plants. Last year emissions rose 2.7 percent compared to 2017 levels. Meanwhile, NASA said that the world just saw the hottest June on record. Power plant owners do not expect to alter their plans to shut coal plants in the years ahead, despite the Trump administration’s efforts to prop up the industry, according to S&P Global Platts. Top U.S. shale basins may only add 49,000 bpd in August over a month earlier, according to the EIA, a slower-than-usual pace. In an effort to slash costs, drillers are drawing down their inventory of drilled but uncompleted wells (DUCs). The so-called “fracklog” had steadily climbed for the better part of two years, but now, with investor scrutiny putting pressure on shale companies, the fracklog is declining. “They have already sunk their cash into the drilling portion,” Elisabeth Murphy, an analyst at ESAI Energy LLC, told Bloomberg. “Now it’s just a matter of completing rather than drilling new wells.” Roughly 1.3 mb/d of oil production in the Gulf of Mexico, or 69 percent, was still offline as of Monday. Also, 1.7 Bcf/d of natural gas, or 61 percent, was not operating. But companies were beginning theprocess of restarting on Sunday. The energy return on investment (EROI) of oil and gas may be lower than was previously thought. The general consensus has been that the EROI for oil, gas and coal was 25:1, but a new study found that when including refining, the EROI drops to just 6:1. Because of its high energy content, fossil fuels are often considered to be superior to renewable energy, but the lower EROI puts them on level footing.
Oil Plunges As Iran Conflict Cools - Oil prices sank on Tuesday after President Trump and U.S. Secretary of State Mike Pompeo struck a softer tone on Iran. The market acted swiftly, selling off crude oil. The comments come a day after Iran’s foreign minister Javad Zarif spoke with NBC News, where he seemed to crack open the door to negotiations of some sort. When asked what it would take to get Iran to the bargaining table, Zarif took issue with the premise of the question. “No, we are at the bargaining table. It is the United States that left the bargaining table,” he said. “And they are always welcome to return.” He then framed Iran’s recent moves to withdraw from parts of the 2015 nuclear deal as a response to the U.S. not holding up its end of the deal. The Trump administration unilaterally left the agreement in 2018. But again, Zarif seemed to open the door. When NBC News’ Lester Holt asked whether or not Iran’s latest decisions to begin stockpiling low-enriched uranium, among other maneuvers, could be reversed, Zarif was quick to respond. “Of course. It can be reversed within hours.” So, that prompted NBC’s Holt to ask if Iran would negotiate if sanctions were lifted. “The United States is addicted, unfortunately, to sanctions,” Zarif said, noting longstanding restrictions placed on Iran. However, he took particular issue with the sanctions that were implemented since last year under the Trump administration. Those are the sticking point. “Once those sanctions are lifted, then room for negotiation is wide open,” Zarif said. Perhaps even more notable was how Zarif responded when asked about Iran’s ballistic missile program. The U.S. has issued a series of demands regarding Iranian missiles, an issue that was not part of the 2015 nuclear deal. That seemed to be a non-starter, but Zarif didn’t necessarily dismiss it as out of hand. He said that Iran would be willing to talk about anything after the U.S. recommits the deal they already have, referring to the nuclear agreement. He also said that the U.S. needed to stop sending weapons to Saudi Arabia and the UAE. It all seems highly unlikely, but the tone was more open than it had been in the past.Following those comments, Sec. Pompeo said that “for the first time” Iran was “ready to negotiate on their missile program.” Oil prices plunged by 4 percent on Tuesday after Trump and Pompeo seemed to lay the groundwork for de-escalation. There are no formal next steps that the two countries might take, but the positive back-and-forth is long way from where they were a few weeks ago, on the eve of a U.S. military strike. WTI was down to $57 on Tuesday and Brent fell by 3 percent, dipping below $65.
Oil Dives As Trump Says No Iran Regime Change; Pompeo Says They're Ready To Negotiate -- Oil dove sharply on Tuesday after back-to-back comments from President Trump and Secretary of State Mike Pompeo signaling a potential de-escalation of tensions in the region. Earlier in the day President Trump reiterated during a Cabinet meeting, "We're not looking for regime change," adding "We want them out of Yemen." Pompeo, seated next to Trump, said that Tehran is ready to negotiate over its missile program for the first time."For the first time … the Iranians said they are ready to negotiate on their missile program," said Pompeo. Trump added "They’d like to talk, and we’ll see what happens," adding that Iran "can't have a nuclear weapon." The comments sent oil tumbling. Earlier this week Iranian Foreign Minister Mohammad Javad Zarif said that negotiations between Washington and Tehran would be possible if the Trump administration eases sanctions on the Islamic Republic. Zarif told NBC Nightly News in an interview that aired Monday that they're "wide open" to talks if the sanctions are removed. Mr. Zarif offered an initially high price for such negotiations — the halt of U.S. arms sales to both Saudi Arabia and the United Arab Emirates, two key U.S. allies in the Persian Gulf. But the fact that he mentioned it at all potentially represents a change in policy. The country’s ballistic missile program remains under control of the Iranian paramilitary Revolutionary Guard, which answers only to Supreme Leader Ayatollah Ali Khamenei. -Washington Times
Analysts believe US, Iran remain far apart despite Trump's comments on talks - Analysts doubt much headway has been made between the U.S. and Iran, despite President Donald Trump’s comments that Iran would like to engage in talks.Crude oil futures fell sharply, and were down more than 4% in afternoon trading after Trump and Secretary of State Mike Pompeo said Iran was willing to negotiate. But oil erased about 2% of its losses after an Iranian official at the United Nations said Iran’s missile program is not negotiable.“The question is now that the Iranians are disputing this, do they potentially harden their resolve to try to get sanctions relief through escalation?” said Helima Croft, RBC head of global commodities strategy.Croft had said oil’s initial dive was an overreaction, since Iran has said previously it would not negotiate if it remained under sanctions. West Texas Intermediate crude futures settled down 3.3%, at $57.62 per barrel, but was higher in late trading, at about $58.04.On Monday, Iranian Foreign Minister Mohammad Javad Zarif told NBC Newsthat Iran does not want a war, and that the door to negotiations would be wide open if Trump lifts his sanctions. The Trump administration put sanctions on Iranian oil and other parts of its economy, after the U.S. pulled out of the Joint Comprehensive Plan of Action, or the nuclear agreement made between Iran, the U.S. and five other countries.“I think the door is open a crack, and I think all sides have been trying to look for an off-ramp, but there remains a chasm between the U.S. and Iranian position,” said John Kilduff of Again Capital. “I think the sell off was steeped on false hopes of some kind of breakthrough.” Iran has been attempting to get relief from the sanctions from the remaining parties in the nuclear deal but has been expanding activities that wold violate the agreement, including enriching higher levels of uranium.
WTI Extends Losses After Smaller Than Expected Crude Draw -Oil prices plunged today as Trump and Pompeo defused some tensions with Iran and geopolitical risk premiums were squeezed out suddenly.“Bullish catalysts are in short supply,” analysts at London-based broker PVM Oil Associates Ltd. said in a note to clients.“The Gulf Coast of Mexico hurricane premium is fading as offshore operations in the region resume. At the same time, the U.S. shale engine continues to give oil bulls a sleepless night.” API:
- Crude -1.401mm (-3mm exp)
- Cushing -1.115mm
- Gasoline -476k
- Distillates +6.226mm - biggest build since Jan 2019
After last week's big crude draw (the 4th week in a row), expectations were for another sizable draw but API reported a smaller than expected 1.4mm draw. Also a major distillates build weighed on sentiment. WTI bounced back up to around $58 ahead of the API print but slipped lower after the smaller than expected draw...
Oil pares gains after EIA releases weekly inventory data - Oil prices on Wednesday regained little ground lost in the previous session, weighed down by industry data suggesting U.S. crude inventories fell less than expected. Brent crude futures gained 65 cents to $65.00 a barrel. Both benchmarks had shed more than 3% on Tuesday. West Texas Intermediate crude futures were up 34 cents at $57.96 a barrel. Crude prices gave back some of their gains after the Energy Information Administration said gasoline inventories increased by 3.6 million barrels last week, offsetting a 3.1 million barrel drop in U.S. crude. Crude inventories fell by 1.4 million barrels in the week to July 12 to 460 million barrels, the American Petroleum Institute (API) said on Tuesday. That compared with analyst expectations for a drop of 2.7 million. The smaller-than-expected decline suggested production shut-ins caused by Hurricane Barry late last week had little impact on inventories. Gasoline stocks also fell, the API data showed, but less than expected, and distillate inventories rose more than forecast. Official data from the U.S. government’s Energy Information Administration (EIA) is due at 10:30 EST. If confirmed, it would be the fifth consecutive weekly decline, the longest stretch since the beginning of 2018. More than half of daily crude production in the Gulf of Mexico remained offline on Tuesday in the wake of Hurricane Barry, the U.S. drilling regulator said, as most oil companies were re-staffing facilities to resume production. The Bureau of Safety and Environmental Enforcement said 1.1 million barrels per day of oil, or 58% of the region’s total, and 1.4 billion cubic feet per day of natural gas output remained shut. Oil prices slumped on Tuesday on increased hopes for a return of Iranian crude to the global oil market after U.S. President Donald Trump said progress had been made with Tehran, signalling tensions could ease in the Middle East. However, Iran later denied it was willing to negotiate over its ballistic missile programme, contradicting a claim by U.S. Secretary of State Mike Pompeo, and appearing to undercut Trump’s statement.
Oil Algos Confused After Massive Product Inventory Build, Crude Draw, Production Drop - Oil prices reversed some of the losses from yesterday (geopolitical risk reduction and a surprisingly small crude draw from API), pushing WTI back above $58 briefly ahead of this morning's official inventory data. “Crude oil has clawed back a small part of what was lost yesterday when the White House created uncertainty on both the supply and demand side,” said Ole Hansen, head of commodities strategy at Saxo Bank. “The API number from yesterday points towards a limited amount of fireworks later with focus turning to product stocks with a big jump in distillate stocks expected.” DOE
- Crude -3.12mm (-3mm exp)
- Cushing -1.351mm
- Gasoline +3.57mm
- Distillates +5.686mm - biggest build since Jan 2019
Crude inventories fell for the 5th week in a row but investors were surprised by massive product builds (biggest Distillates build since January)... US Crude Production slowed to its lowest since March (the surge has stalled) as oil rig counts have tumbled... WTI was fading below $58 ahead of the official inventory data and pushed lower after the big product builds...
Oil Prices Plunge After Trump Sends Rand Paul To Ease Tensions With Iran - A huge development that could roll back fast escalating tensions between Washington and Tehran in the Persian Gulf: Politico reports that Sen. Rand Paul — the outspoken anti-interventionist Libertarian Republican from Kentucky — has been handpicked by President Trump as his emissary to mediate with Iran after the Kentucky senator proposed the idea. Trump has now reportedly signed off on the plan, first pitched over the past weekend by Paul at a golf outing as a way to avoid escalating toward military conflict with Iran, according to multiple US officials. It's as yet unclear just how far along the plan is, or if a potential meeting with Iranian Foreign Minister Javad Zarif has actually been agreed to, but Sen. Paul would seek to ease tensions while providing a White House exit away from the two bad options of direct conflict or continued "tanker wars" which could sink global oil markets. Politico reported the following details on Wednesday: Over a round of golf this past weekend, Sen. Rand Paul asked President Donald Trump’s blessing for a sensitive diplomatic mission.Paul proposed sitting down with Iranian Foreign Minister Javad Zarif to extend a fresh olive branch on the president’s behalf, according to four U.S. officials. The aim: to reduce tensions between the two countries. Trump signed off on the idea.Like his father Ron Paul, the junior Paul has over the past years been outspoken in favor of drawing down US troops world-wide and ending "regime change wars". He's been a consistent critic since the start of his political career on everything from Afghan policy to the 2003 invasion of Iraq, to US covert efforts to overthrow Assad. For now, it seems the market is viewing this positively as oil prices are re-plunging on the apparent de-escalation (though this will likely frustrate OPEC).
Oil prices at two-week lows as U.S. crude supplies fall less than expected and product stocks climb - Oil futures marked their lowest finish in roughly two weeks on Wednesday, as U.S. government data revealed that domestic crude supplies fell for a fifth straight week, but the stocks were down by less than the market expected and product inventories climbed. August West Texas Intermediate crude shed 84 cents, or 1.5%, to settle at $56.78 a barrel on the New York Mercantile Exchange, after a 3.3% tumble on Tuesday. Prices settled at their lowest since July 3.International benchmark September Brent had spent part of the session moving higher, before following WTI lower. It fell 69 cents, or 1.1%, to end at $63.66 a barrel on ICE Futures Europe, the lowest since July 4.Potential progress toward negotiations between the U.S. and Iran over Tehran’s missile program also put pressure on oil prices Wednesday. “Oil traders know that if there is a chance that oil sanctions get lifted, then that will be bearish” for prices, said Phil Flynn, senior market analyst at Price Futures Group. Senator Rand Paul asked President Donald Trump if he could sit down with Iranian Foreign Minister Javad Zarif in an effort to reduce tensions between the nations, according to Politico. “Paul has been on record against getting involved in foreign entanglements. That’s a sign that Trump is serious about getting a deal” done with Iran, and adding Iranian oil “in a market that is concerned about demand is bearish,” said Flynn. On Tuesday, crude oil prices were under pressure after reports that U.S. Secretary of State Mike Pompeo said Iran is ready to enter negotiations over its missile program, easing concerns about tensions between Washington and Tehran that had put the flow of oil in the Middle East at risk. Iran, however, rejected suggestions that its willing to hold talks with the U.S. over Tehran’s missile program, according to BBC News. Meanwhile, the Energy Information Administration early Wednesday reported that U.S. crude supplies fell for a fifth consecutive week, but by less than the market expected—and petroleum products posted sizable gains. Crude stockpiles were down 3.1 million barrels for the week ended July 12. They were forecast to fall by 4.2 million barrels, according to analysts polled by S&P Global Platts. The American Petroleum Institute on Tuesday reported a decline of 1.4 million barrels, according to sources.
Exclusive: IEA revising oil demand growth forecast down on slowing economy (Reuters) - The International Energy Agency (IEA) is reducing its 2019 oil demand forecast due to a slowing global economy amid a U.S.-China trade spat, its executive director said on Thursday. The IEA is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, Fatih Birol said. Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd but had cut the growth forecast to 1.2 million bpd in June this year. “China is experiencing its slowest economic growth in the last three decades, so are some of the advanced economies ... if the global economy performs even poorer than we assume, then we may even look at our numbers once again in the next months to come,” Birol told Reuters in an interview. He said oil demand was hit by a trade war between the United States and China at a time when markets are awash with oil, due to rising U.S. shale production. U.S. oil output was expected to grow by 1.8 million bpd in 2019, which would be slower than the 2.2 million bpd increase recorded in 2018, Birol said, adding “these volumes will come into a market where demand growth is coming down”. He said the IEA was concerned by rising Middle East tensions, particularly around the Strait of Hormuz, a vital shipping route linking Gulf oil producers to markets in Asia, Europe, North America and elsewhere. Washington has said Iran was behind attacks on tankers near the Strait in May and June, a charge Tehran denies. “We are keeping a close eye on what is happening there. And if something happens we are ready to act quickly and decisively,” he said, after reports that Iran had seized a foreign tanker smuggling fuel in the Gulf.
IEA- Huge Oil Glut Coming In 2020 - The oil market saw a rather significant surplus in the first half of 2019, much larger than previously expected. Looking forward, supplies are set to tighten in the second half of the year, but that may only be a hiatus before the glut returns.Global oil supply exceeded demand by about 0.9 million barrels per day (mb/d) in the first six months of this year, according to the International Energy Agency’s latest Oil Market Report. This retrospective look upends the prevailing sentiment that occurred just a few weeks ago. For instance, the IEA said that the oil market saw a surplus of about 0.5 mb/d in the second quarter, while the agency previously thought there was going to be a 0.5 mb/d deficit.“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 IEA said. “Clearly, market tightness is not an issue for the time being and any re-balancing seems to have moved further into the future.”The extension of the OPEC+ cuts through the first quarter of 2020 removes a major uncertainty, but the IEA said it “does not change the fundamental outlook of an oversupplied market.”The conclusions echo those of OPEC itself, which said in its own report published a day earlier that the “call on OPEC” will be significantly lower next year. Rising U.S. shale production will exceed additional demand both this year and next, which means that the market could see a significant surplus in 2020. In other words, OPEC+ faces a conundrum: Keep its current production cut deal intact and face a worsening glut, or cut further. “On our balances, assuming constant OPEC output at the current level of around 30 mb/d, by the end of 1Q20 stocks could increase by a net 136 mb. The call on OPEC crude in early 2020 could fall to only 28 mb/d,” the IEA said. OPEC produced 29.83 mb/d in June. OPEC put demand for its oil at a higher 29.3 mb/d next year, which, to be sure, is a rather significant discrepancy from the IEA figure. However, the conclusion is the same – OPEC may be forced to slash production further if it wants to head off a price slide. OPEC’s figures imply that it may need to cut output by 560,000 bpd; the IEA implies a deeper 1.8 mb/d reduction might be needed. The IEA was diplomatic, saying that the threat of a renewed surplus “presents a major challenge to those who have taken on the task of market management.” Notably the IEA did not downgrade its demand forecast, sticking with growth of 1.2 mb/d for this year. Days earlier, the U.S. EIA downgraded its demand estimate to 1.1 mb/d. The Paris-based IEA was more optimistic about a rebound in economic growth, even as it downgraded its second quarter demand growth figure by a whopping 450,000 bpd to just 800,000 bpd year-on-year. All three of the major forecasters – OPEC, IEA and EIA – see robust supply growth from U.S. shale. The specific figures vary, but they generally see non-OPEC production (with U.S. shale accounting for most of the total) growing by around 2 mb/d this year, and by even more next year. In other words, non-OPEC supply growth for both 2019 and 2020 exceed demand.
Oil falls despite Iran’s claim that it seized foreign tanker in Gulf - Oil edged lower Thursday despite Iran’s claim that it seized a foreign oil tanker in the Gulf amid rising tensions between Tehran and the West over the safety of shipping in the Strait of Hormuz, a vital gateway for energy exports. Brent crude futures were down $1.85 at $61.81 a barrel by 1:12 pa.m. ET. They fell 1% on Wednesday, and 3% on Tuesday. U.S West Texas Intermediate crude futures were down $1.67 at $55.11. The U.S. benchmark dropped 1.5% in the previous session, and 3% on Tuesday. Iran said the vessel, which it did not identify, was smuggling fuel and had been carrying 1 million liters, or around 6,200 barrels. The price of oil initially rose following Iran’s announcement, but later returned to around flatline. The initial oil price “reaction on Thursday shows once again that the conflict in the Middle East is far from solved and tensions could flare up at any time again. As oil keeps flowing, prices are likely to rise only temporarily,” Iran said the vessel impounded was the same one it towed on Sunday after the ship had sent a distress call. U.S. officials said on Wednesday they were unsure whether an oil tanker towed into Iranian waters had been seized or rescued. Britain urged Iran to ease tensions in the Gulf, while pledging to defend its shipping interests in the region. Oil had fallen on Wednesday in response to a sharp rise in U.S. stockpiles of products such as gasoline that pointed to weak demand during the U.S. driving season. Data from the U.S. Energy Information Administration (EIA) showed a larger-than-expected drawdown in crude stockpiles last week, but traders focused instead on large builds in refined product inventories. U.S. crude inventories fell by 3.1 million barrels, the EIA said, more than analysts’ forecasts for a decrease of 2.7 million barrels. But gasoline stocks rose by 3.6 million barrels, compared with analysts’ expectations in a Reuters poll for a 925,000-barrel drop. Distillate stockpiles grew by 5.7 million barrels, much more than expectations for a 613,000-barrel increase, the EIA data showed.
Oil prices could retest their 2019 lows if they fall below this level: RBC's Helima Croft -- Oil prices have shed 13% since May 1 and nearly 8% in the last week despite spiking tensions in the Middle East, proving out a theory that RBC Capital Markets’ Helima Croft posited in April: that the Trump administration’s sanctions on Iran could lead to a “cruel summer” for the commodity. But, now, with Iran claiming it seized a foreign oil tanker in the hotly contested Gulf of Oman, oil prices haven’t responded as commodity watchers may have expected, and Croft says that’s a sign of more pain to come.“I think that signals that this standoff over Iran is going to continue over the summer,” Croft, RBC’s global head of commodity strategy, said Thursday on CNBC’s “Futures Now.” “The problem for the oil market is there’s still these big concerns about demand.”President Donald Trump said later on Thursday that the U.S. Navy shot downan Iranian drone in a defensive move. Oil prices shed 2% by the end of the day.To Croft, that “underscores the fact that the situation is far from over,” she told CNBC in a phone call Thursday. “The oil price in no way reflects the risk entailed in this crisis.”It also makes things more complicated for investors, who are likely “taking a cautious approach” due to the fact that “they don’t know how this thing could escalate” and pricing in political risk is a difficult task, she said. From these tensions to rising U.S. stockpiles to the U.S.-China trade war to West African crude cargoes “not finding a home” due to weakening demand, there are numerous drivers for worries around demand, Croft said — and, perhaps, not enough to calm them.
Oil rises after US Navy destroys Iranian drone - Oil prices rose more than 1% on Friday after the U.S. Navy destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows, again raising tensions in the Middle East. Brent crude futures were up 82 cents, or 1.3%, at $62.75 by 0100 GMT. They closed down 2.7% on Thursday, falling for a fourth day. West Texas Intermediate crude futures firmed 61 cents, or 1.1%, at 55.91. They fell 2.6% in the previous session. The United States said on Thursday that a U.S. Navy ship had “destroyed” an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone. The move comes after Britain pledged to defend its shipping interests in the region, while U.S. Central Command chief General Kenneth McKenzie said the United States would work “aggressively” to enable free passage after recent attacks on oil tankers in the Gulf. Still, the longer-term outlook for oil has grown increasingly bearish. The International Energy Agency (IEA) is reducing its 2019 oil demand forecast due to a slowing global economy amid a U.S.-China trade spat, its executive director said on Thursday. The IEA is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, Fatih Birol said. “China is experiencing its slowest economic growth in the last three decades, so are some of the advanced economies ... if the global economy performs even poorer than we assume, then we may even look at our numbers once again in the next months to come,” Birol told Reuters in an interview. Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd but had already cut the growth forecast to 1.2 million bpd in June this year.
Oil Prices Push Higher After Iran Seizes Tanker -– Oil prices moved higher Friday on reports that Iran had seized a British-flagged oil tanker in the Strait of Hormuz. The August contract West Texas intermediate crude briefly crossed above $56 a barrel before falling back by the settlement in New York. WTI settled at $55.63, up 33 cents. Brent crude . the global benchmark, settled up 54 cents to $62.46 in London after hitting a high of $63.32. It was not clear why the Iranians seized the tanker; the state-run media said it was for violations of international regulations. But the move injected more uncertainty into global oil markets already struggling for direction in the face of near-constant Middle East tensions and fears of global supply gluts. Despite the reports from the Strait of Hormuz, which connects the Persian Gulf to the Indian Ocean, oil prices fell more than 7% on the week, their worst performance in seven weeks. The tanker seizure is just one more element in the tension-fraught relationship between the Trump Administration and authorities in Tehran. Almost any event can result in "swift policy changes,” New York-based Energy Intelligence said in its Petroleum Intelligence Weekly. “Phases of escalation followed by renewed peacemaking efforts would appear a likely pattern.” Both Washington and Tehran had indicated in recent weeks that despite the grandstanding and hostilities aimed at each other the past year, they want to resolve their more-than-year-long standoff. In a Thursday news conference at the Iranian mission to the United Nations, Foreign Minister Mohammad Javad Zarif suggested that President Donald Trump’s sanctions on Tehran’s oil and leaders be removed so that the two sides could talk.
Oil climbs as Middle East tensions offset demand worries - (Reuters) - Oil prices rose about 1 percent on Friday after steep losses a day earlier, supported by rising tensions between the United States and Iran, even as concerns that slowing economic growth could dent global oil demand cast a cloud.For the week, benchmark crude prices declined, having fallen sharply earlier in the week on demand worries.Brent crude futures settled 54 cents higher at $62.47 a barrel. West Texas Intermediate crude futures rose 33 cents to end the session at $55.63 a barrel. Still, WTI dropped 7% for the week and Brent lost about 5.5% for the week, the steepest losses for both benchmarks since late May.Prices gained late in the session after Iran’s Revolutionary Guards said they had captured a British-flagged oil tanker in the Gulf after Britain seized an Iranian vessel earlier this month, further raising tensions along a vital international oil shipping route. A second oil tanker, the British-operated, Liberian-flagged Mesdar, turned sharply north toward Iran’s coast on Friday afternoon after passing westward through the Strait of Hormuz into the Gulf, according to Refinitiv tracking data. “Our opinion of the complex still favors some wide swinging trade in both directions as pricing continues to be buffeted by an array of cross currents that include a heightening of tensions between the U.S. and Iran on the bullish side and mounting global oil demand concerns on the bearish side,” Jim Ritterbusch of Ritterbusch and Associates said in a note.The episode has injected further geopolitical risk into the oil market. A senior Trump administration official said on Friday the United States will destroy any Iranian drones that fly too close to its ships. A day earlier, the United States said a U.S. Navy ship had “destroyed” an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone. Prices were also buoyed Friday by indications the U.S. Federal Reserve will interest cut rates aggressively to support the economy.
Iran grain ships stuck in Brazil without fuel due to U.S. sanctions (Reuters) - Two Iranian vessels have been stranded for weeks at Brazilian ports, unable to head back to Iran due to lack of fuel, which state-run oil firm Petrobras refuses to sell them due to sanctions imposed by the United States. The vessels Bavand and Termeh came to Brazil a couple months ago carrying urea, a petrochemical product used as fertilizer. They were expected to load corn and return to Iran, but lacked enough fuel for the trip, the port operator in Paranaguá told Reuters. Food is not covered by U.S. sanctions, and Iran is one of the largest buyers of Brazil’s agricultural commodities, importing more than 2.5 million tonnes of Brazilian corn so far this year — more than any other country. However, that trade is not usually carried by ships flying the Iranian flag. When the vessels are Iranian, they usually come with enough fuel to return without refueling.
Strait of Hormuz: The Most Dangerous Place on Earth American Conservative. Scott Ritter. - For the next 60 days, the 90-mile length of waterway known as the Strait of Hormuz will be the most dangerous place on Earth, with the prospects for an incident occurring which will trigger a regional conflict possessing global ramifications high. Following this 60-day period, the risks will only grow higher. On July 1, Iran announced that it was exceeding some of the uranium enrichment restrictions put in place by the Joint Comprehensive Program of Action, or JCPOA (better known as the Iran nuclear agreement), which the U.S. withdrew from a year ago. The decision to blow through the restriction were a response to Washington’s “maximum pressure” campaign to to negotiate a new deal. Iran and the other parties to the JCPOA have sought to keep the agreement alive by finding workarounds so Iran can continue to sell oil, the lifeblood of its economy. These efforts have failed, putting Iran in the difficult position of committing economic suicide by continuing to comply with the nuclear agreement. So backed into the corner, Iran has now exceeded the limits placed on the amount of low-enriched uranium it can stockpile, as well as the level to which it is enriching uranium. While the International Atomic Energy Agency (IAEA) has confirmed that Iran has increased its enrichment level to 4.5 percent, Iran is far removed from the 80 percent or more needed for a nuclear weapon. Tehran, meanwhile, has given the EU 60 days to come up with a solution to the issue of restoration of trade. Otherwise, at the end of that period, Iran will continue to peel away JCPOA restrictions until none remain. The U.S. and Israel have condemned Iran’s actions, and have threatened military action if Iran were to embark on a path that led to the creation of a nuclear weapons. But the more immediate danger, today, it is the continued economic squeeze applied by the U.S. that threatens to ignite the tinderbox that is the Persian Gulf.
US Naval Coalition In Gulf – A Provocation Too Far - America’s top General Joseph Dunford this week announced plans for a US-led naval coalition to patrol the Persian Gulf in order to “protect shipping” from alleged Iranian sabotage. The move is but the latest in a series of efforts by the Trump administration to mobilize Arab allies into a more aggressive military stance towards Iran. It follows recent visits to the region by Secretary of State Mike Pompeo and National Security Adviser John Bolton, both of whom have been urging a more organized military front led by the US to confront Iran.The latest naval coalition proposed by General Dunford will be charged with escorting oil tankers as they pass through the Strait of Hormuz exiting the Persian Gulf to the Indian Ocean, and also through the Bab al Mandab entrance to the Red Sea on the Western side of the Arabian Peninsula. The former conduit serves oil supply to Asia, while the latter position between Yemen and Eritrea leads shipping to the Suez Canal on the way to the Mediterranean and Europe.Both narrow sea passages are strategic chokepoints in global oil trade, with some 20-30 per cent of all daily shipped crude passing through them. The apparently chivalrous motives of the US to “guarantee freedom of navigation” sounds suspiciously like a pretext for Washington to assert crucial military control over international oil trade. That is one paramount reason for objecting to this American proposal. Secondly, the very idea of sending more military vessels to the Persian Gulf under Pentagon command at this time of incendiary tensions between the US and Iran is a reckless provocation too far. One can easily foresee in this already supercharged geopolitical context in the Persian Gulf and the wider region how any additional military forces would be potentially disastrous, either from miscalculation, misunderstanding or more malign motive.
Tankers Urged Against Hiring Mercenaries On Fears Of 'Accidental Escalation' With Iran - Could a private, Blackwater-type private security firm fire the first shot in the gulf which sees Iran and the United States stumble toward a WWIII scenario? That's what has maritime industry analysts which advise shipping companies operating in the Middle East region concerned amid the latest soaring tensions, per a new Reuters report: Shipping companies sailing through the Middle East Gulf are being urged to avoid having private armed security guards onboard as the risk of escalation in the region rises, industry associations say.Following the significant rise in Somali piracy in the Indian Ocean and Gulf of Aden over the past two decades off Africa's east coast — which hit its peak about ten years ago — shipping companies have increasingly relied on private security firms to keep their cargo and personnel safe. However, amid the currently escalating "tanker wars" in the gulf, which has recently included accusations that Iran's elite IRGC attempted to intercept and seize a UK oil tanker, the ‘British Heritage,’ as it was sailing through the Strait of Hormuz to the Persian Gulf, there's growing concern that mercenaries hired by private companies could inadvertently trigger a crisis should they engage with Iran's navy. "An advisory issued in recent days by leading shipping associations warned against using private armed guards in the critical areas," the Reuters report continued. “The use of force against threats recently encountered in the Gulf of Oman carries significant risk and has the potential to escalate security situations to the detriment of the safety of ship and crew,” the advisory said.The advisory recommended unarmed security personnel and advisers: “The use of unarmed maritime advisors to assist with onboard security and watch-keeping is sensible,” it said. However, we wonder what good unarmed guards would do if rapidly boarded by pirates off African coastal waters. But the chief concern remains focused on security policies while ships operate specifically in the Persian Gulf. Guy Platten, secretary general of the International Chamber of Shipping, noted industry guidelines are more stringent for tankers traversing gulf waters: “The message is do not use private armed guards in these waters - it is not advised,” he told Reuters on Friday.
UK Sends 3rd Warship To Gulf As Iran's Khamenei Vows To Answer British Piracy - Escalation appears back on in the Persian Gulf as the question of the "disappeared" UAE tanker remains unanswered, and as US intelligence officials point the finger at Iran's IRGC for "forcing" the tanker into Iranian waters just before its tracking transponder mysteriously switched off over two days ago. And now Britain has announced it will send a third warship and a navy tanker to the gulf, even though the Ministry of Defence is downplaying tensions with Iran. "These long-planned movements do not reflect an escalation in the UK posture in the region and are routine," the MoD said as it announced that the HMS Duncan, a type 45 frigate, is transiting to the region for general maritime security, also as the currently deployed HMS Montrose undergoes maintenance. The HMS Kent is also said to have been freshly deployed, though it will take much longer to reach the Middle East. Prime Minister Theresa May’s office said Tuesday that Britain wanted to avoid escalation. "Escalation in the Gulf is not in anyone’s interests and we have repeatedly stressed that to the Iranians,” May’s spokesman, James Slack, told reporters in London. However, Iranian officials had just days ago warned Britain to avoid sending more warships, saying it's playing a "dangerous game" in following the US lead of military build-up.
What Right Has Britain to Seize an Iranian Tanker Off Spain? What gives the UK the right to seize on July 4 an Iranian oil tanker in Spanish territorial waters, force it to Gibraltar, interrogate its four-man (non-Iranian) crew, and arrest its captain and chief officer? Why, the request of the U.S. of course. The Spanish government has stated that the British marines and Gibraltar port authority operated at the behest of Washington, after Trump threatened then called off airstrikes against the Islamic Republic. (Gibraltar authorities deny this.) The piratical act was naturally denounced by Iran, which threatens to seize a British tanker if London does not return its vessel. The Brits respond that they might return the ship if given assurances it was not headed to Syria; indeed, Foreign Minister Hunt had a “constructive” phone call with his Iranian counterpart Javad Zarif. Iran for its part denies that the ship was heading to Syria, but what if it was? What is wrong with any country selling oil to Syria, whose government is recognized by many large powerful countries and needs oil to recover from its horrific civil conflict? The EU has slapped sanctions on Syria since the Arab Spring protests and outbreak of war in Syria in 2011, in compliance with the U.S. decision to effect regime change through aid to armed rebels, and a concerted U.S.-Israeli campaign to isolate Damascus. The premise is that the U.S. determines a government’s legitimacy; when it withdraws it, Europe must go along. And when Europe tells Iran it must not sell oil to Syria, Iran must go along. Despite Iran’s extraordinary patience in the face of Trump’s provocations, its determination to stick to the JCPOA, its willingness to discuss with France some changes to the deal, it remains a pariah in Washington’s eyes. Despite the fact that Trump himself is deplored by world leaders generally and the U.S. has lost prestige in the world since his election, Britain still does its bidding. The British ambassador to Washington has been obliged to quit his post after the leaking of diplomatic cables accusing Trump of ineptness and incompetence, but still, London marches almost lock-step with Washington in foreign policy. Britain might have told Washington: “We don’t have any right to seize a commercial vessel in foreign waters engaging in legal activities. And why would we want to cooperate with you in exacerbating tensions with Iran?” Instead the British Marines act as Trump’s buccaneers.
UK: Seized Iranian tanker could be released after ‘guarantees’ - British Foreign Secretary Jeremy Hunt has moved to ease tensions with Tehran, saying the Iranian oil tanker being held by authorities in Gibraltar would be released if there was a guarantee it was not heading to Syria. The Grace 1 oil tanker was seized earlier this month by British Royal Marines off the coast of the British Mediterranean territory on suspicion of violating European Union sanctions on Syrian President Bashar al-Assad's government. Iran has since demanded the ship be released and denied it was taking oil to Syria. In a series of Twitter posts on Saturday, Hunt said he had a "constructive call" with his Iranian counterpart, Mohammad Javad Zarif, over the issue. Two more crew members of seized Iran oil tanker arrested (2:01) "I reassured him [Zarif] our concern was destination not origin of the oil on Grace One & that UK would facilitate release if we received guarantees that it would not be going to Syria, following due process in Gib courts," Hunt tweeted. "Was told by FM Zarif that Iran wants to resolve issue and is not seeking to escalate," he added.
Iran nuclear deal: 'Small window' to save deal, says Jeremy Hunt - Foreign Secretary Jeremy Hunt said there was a "small window" to save the Iran nuclear deal, as he launched a fresh bid to ease tensions in the Gulf. Mr Hunt has been meeting EU foreign ministers to raise concerns about Iran breaching some of its commitments. The deal, which involves Iran limiting nuclear activities in return for the easing of economic sanctions, is under pressure after the US withdrew in 2018. The summit comes amid heightened tensions between the UK and Iran. The UK seized an Iranian oil tanker earlier this month and, in response, Iran threatened to detain a British oil tanker. However, Mr Hunt said on Saturday the tanker, Grace 1, could be released if the UK is guaranteed the oil it was carrying is not bound for Syria. Speaking on his way into the meeting in Brussels, Mr Hunt said the Iran nuclear deal was not dead "yet", but he warned that if Iran acquired nuclear weapons it would become "a very, very toxic and dangerous situation". He added: "Iran is still a good year away from developing a nuclear weapon. We think there is still a closing, but small, window to keep the deal alive."
How Europe Can Save What’s Left of the Iran Nuclear Deal - Once the United States withdrew from the 2015 Iran nuclear deal, the remaining parties have made a worthwhile effort to salvage it. Iran’s continued patience was met with more U.S. sanctions. Meanwhile, Iran has been unable to get an economic package from its counterparts in the deal that would offset U.S. sanctions. Tehran has responded in recent weeks by reducing its compliance with the deal by increasing the levels to which it is enriching uranium and has announced plans to lessen its commitments every 60 days. All eyes are now on Europe. The question for officials in European capitals is how to calibrate their reactions in order to minimize the damage. Europe should work toward preventing the deal’s collapse, for as long as feasible. If Europe cannot deliver tangible measures to reverse Iran’s road map, it should attempt to freeze the nuclear escalation through an arrangement that locks in the current status quo, a “nuclear deal-lite,” for an extended period.If Europe cannot deliver tangible measures to reverse Iran’s road map, it should attempt to freeze the nuclear escalation through an arrangement that locks in the current status quo, a “nuclear deal-lite,” for an extended period. In grappling with these new realities, Europe has three main options. First, as French President Emmanuel Macron seems eager to advance, the remaining parties to the deal could enter a phase of shuttle diplomacy in advance of the U.N. General Assembly opening in September. The hope is that diplomats can come up with some creative solutions to persuade Tehran to reverse its noncompliance. A second option is for France, Britain, and Germany to unilaterally or collectively trigger the deal’s dispute resolution process in response to Iranian noncompliance. This would most likely be considered if Iran continues to renege on its commitments at the end of the current 60-day deadline. No party to the agreement has attempted this, but the process is expected to take a couple of months. Once the three European countries begin the formal dispute resolution path, the ultimate result is likely to be the reimposition of U.N. and EU sanctions, which would most likely lead to the deal’s complete collapse. The third option is for Europe to work with China and Russia to formalize an interim arrangement before the deal falls apart. The goal would be to reach a political understanding that freezes Iranian noncompliance in return for realistic economic incentives. Such talks can take place under the existing umbrella of the Joint Commission established by the nuclear deal, with the objective that Iran eventually returns to full compliance.
What a failed Iran deal would mean for oil prices and military tensions - The Iranian nuclear deal looks all but dead just one year after the President Donald Trump administration walked away from it and reimposed crippling sanctions on the Islamic Republic.As Iran’s government starts breaking its agreed uranium enrichment limits, European leaders are floundering to keep it alive. British Foreign Secretary Jeremy Hunt claimed Monday that the Obama-era deal — signed by the U.S., U.K., Iran, Russia, China, France and Germany in 2015 and intended to provide Iran economic relief in exchange for limits on its nuclear program — “isn’t dead yet.” Other European lawmakers frantically stress the dangers of killing the deal, while Tehran says it can always reverse its deal breaches if the EU defies American sanctions and resumes trade with Iran — something it appears largely unable or unwilling to do.For many Iran watchers, the deal has already collapsed. But what will happen if it officially ends, and what are the consequences for the world?The direction of oil prices will depend on what Iran does with its nuclear program in the event of the deal’s termination, and whether Tehran’s strategy triggers a military response.“If the deal dies and Iran starts enriching uranium again at 20% levels and spinning the higher speed centrifuges, we will be closer to a military confrontation involving the U.S. and Iran or potentially Israel and Iran,” Helima Croft, global head of commodity strategy at RBC Capital Markets, told CNBC Thursday. “An actual military confrontation or even limited military strikes could cause prices to temporarily spike.” Iranian leaders have repeatedly claimed they are not after acquiring nuclear weapons, rather civilian nuclear energy. But before the 2015 deal went into action the country was enriching uranium — the fissile material required for a bomb — at 20%, far above the 3.67% level required for an energy program and roughly three months away from reaching 90% enrichment, or weapons-grade uranium.
In Major Threat To Dollar's Reserve Status, Russia Offers To Join European SWIFT-Bypass --Three weeks after a meeting between the countries who singed the Iran nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA), which was ditched by US, French, British and German officials said the trade mechanism which was proposed last summer - designed to circumvent both SWIFT as well as US sanctions banning trade with Iran - called Instex, is now operational.And while we await for the White House to threaten Europe with even greater tariffs unless it ends this special purpose vehicle - it already did once back in May when it warned that anyone associated with the SPV could be barred from the U.S. financial system if it goes into effect - a response from the US is now assured, because in the biggest attack on the dollar as a reserve currency to date, on Thursday, Russia signaled its willingness to join the controversial payments channel, and has called on Brussels to expand the new mechanism to cover oil exports, the FT reported.Moscow’s involvement in the Instex channel would mark a significant step forward in attempts by the EU and Russia to rescue a 2015 Iran nuclear deal that has been unravelling since the Trump administration abandoned it last year.“Russia is interested in close co-ordination with the European Union on Instex,” the Russian foreign ministry told the Financial Times. “The more countries and continents involved, the more effective will the mechanism be as a whole.”... and the more isolated the US will be as a currency union meant to evade SWIFT and bypass the dollar's reserve currency status will soon include virtually all relevant and important countries. Only China would be left outstanding; after the rest of the world's would promptly join.On Thursday, the Kremlin confirmed the foreign ministry's take:“We are tracking the information regarding this. If I’m not mistaken, there have already been statements from our side that, taking into account the first experience of using this system, when it is activated, we cannot rule out interaction in this regard,” Dmitry Peskov, Vladimir Putin’s spokesman, told reporters.
Iran Claims It Rescued Missing UAE Tanker After US Said IRGC Forced It Toward Iran - The saga of the UAE "mystery" tanker which seems to have disappeared after its transponder went dark late Saturday night, and which no one has heard from since it drifted toward Iranian waters in the Strait of Hormuz over the weekend, has deepened after Iran contradicted US media reports of IRGC involvement. The semi-official news agency ISNA said hours after initial reports on Tuesday suggested Iran's military "forced" the vessel into Iranian waters that Iranian navy vessels actually came to the assistance of the disabled foreign oil tanker. The statement indicated the vessel was partially disabled and in desperate need of repairs. "(Spokesman) Abbas Mousavi said... that an international oil tanker was in trouble due to a technical fault in the Persian Gulf... After receiving a request for assistance, Iranian forces approached it and used a tugboat to pull it toward Iranian waters for the necessary repairs to be carried out," ISNA said, as cited by Reuters. The AP reported how it all started over the weekend:Tracking data shows an oil tanker based in the United Arab Emirates traveling through the Strait of Hormuz drifted off into Iranian waters and stopped transmitting its location over two days ago, raising concerns Tuesday about its status amid heightened tensions between Iran and the U.S.The report detailed that the Riah, a 58-meter oil tanker which operates frequently in the region, switched off its transponder for the first time in three months after 11pm on Saturday, based on tracking data. As of Monday "red flags" were raised as US officials began inquiring of the Riah's status. CNN's Pentagon correspondent Barbarra Starr had this to say based on intelligence sources: "US intel increasingly believes UAE tanker MT RIAH forced into Iranian waters over the weekend by #IRGC naval forces. UAE isn't talking."
Tehran: Oil tanker broke down in Persian Gulf, towed by Iran forces for repairs - Iranian forces came to the aid of an oil tanker stranded in the Persian Gulf, a foreign ministry spokesman has said. The tanker is presumed to be the same Panama-registered vessel missing from radar screens since Saturday. The tanker, Iran’s Ministry of Foreign Affairs spokesman Seyyed Abbas Mousavi said on Tuesday, “was in trouble due to technical defects in the Persian Gulf,” the state ISNA agency reported. Mousavi said that Iranian forces towed the ship into Iranian waters, adding that “the necessary repairs will be done.” While Mousavi did not name the tanker, his statement appears to be the first public acknowledgment from an Iranian official of the missing Emirati-based tanker ‘Riah.’ The vessel departed either Dubai or Sharjah ports last week and sailed through the Strait of Hormuz, before deviating from its course and pointing towards Iran. Shortly before midnight on Saturday, its tracking signal abruptly turned off. The disappearance of the ‘Riah’ fueled media speculation earlier on Tuesday. A spokesman for the shipping company that owns the tanker – Sharjah-based Mouj-al-Bahar General Trading – allegedly told TradeWinds that the ship had been “hijacked” by Iranian authorities, while CNN reported that unnamed US sources believed she’d been seized by the naval wing of Iran’s elite Islamic Revolutionary Guard Corps. Attention turned to Tehran, especially as the ‘Riah’ vanished on the same day that Iranian Supreme Leader Ayatollah Ali Khamenei vowed to respond to the UK’s seizure of an Iranian tanker off the coast of Gibraltar earlier this month. The incident also took place after several international tankers were attacked in the region in recent months, with Western leaders blaming Iran.
Trump Claims US Navy Shot Down Iranian Drone in Defensive Action; Iran Denies -President Trump announced on Thursday that the amphibious assault ship, the USS Boxer, shot down an Iranian drone in the Strait of Hormuz in a defensive action. Operators of the drone refused calls to stand down, after which it was “immediately destroyed,” when it came within 1,000 yards of the ship according to the president, “threatening the safety of the ship and the ship’s crew.” In response to President Trump’s announcement earlier in the day that a U.S. Navy ship had “destroyed” an Iranian drone in the Strait of Hormuz on Thursday, Iran’s Foreign Minister Mohammad Javad Zarif said he was not aware of any downing, according to Reuters:“We have no information about losing a drone today,” Zarif told reporters at the United Nations before a meeting with Secretary-General Antonio Guterres. Of course, we wouldn’t expect Iran to admit it just lost a drone, but has anyone asked Israel if it is missing one just in case?
Iran Seizes Foreign Tanker Smuggling Fuel In The Gulf - Iran's Islamic Revolutionary Guard Corps (IRGC) says it has seized a foreign vessel with 12-crew members carrying one million barrels of oil. In an official Iranian media statement early on Thursday, the country's military asserted the tanker was caught "smuggling" the fuel through the Strait of Hormuz. While details to the breaking story remain confused, with some early reports speculating it could be reference to the Riah tanker which since the past weekend disappeared as it drifted toward Iranian waters in the Strait of Hormuz, what is clear is that Tehran is ramping up the pressure, perhaps now making good on its longtime threat to cut off global shipping through the vital oil passageway. "A foreign vessel smuggling one million liters of fuel in the Lark Island of the Persian Gulf has been seized," state run ISNA said, adding that the ship was seized on Sunday. This was the same day Iran had claimed to have "rescued" the UAE-owned, Panamanian-flagged Riah as it was in need of repairs due to technical problems, however, neither Iran's military nor media identified the seized vessel or its country in initial statements. Iran's Press TV has issued the following details in a breaking statement: The incident took place to the south of the Iranian Lark Island on Sunday.IRGC naval forces, which were patrolling the waters on an anti-smuggling mission, acted against the vessel in a “surprise” operation upon ascertaining the nature of its cargo and securing the required legal approval from Iranian authorities.The ship had loaded the fuel from Iranian dhows and was about to hand it over to other foreign vessels in farther waters. The vessel, which had 12 foreign crewmembers aboard at the time of the mission, is capable of carrying two million liters of fuel. The statement hailed the naval forces’ “perceptiveness” in frustrating the smuggling effort. It added that the crime had invoked due legal proceedings.
British say Iran seizes 2 vessels in Strait of Hormuz today — Britain's foreign secretary said Iranian authorities seized two vessels Friday in the Strait of Hormuz, actions signaling an escalation in the strategic waterway that has become a flashpoint in tensions between Tehran and the West. Foreign Secretary Jeremy Hunt said one of the seized ships was British-flagged and the other sailed under Liberia's flag. The crews members comprise a range of nationalities but are not believed to include British citizens, he said."These seizures are unacceptable," Hunt said entering an emergency government meeting to discuss securing the release of the two vessels and their crews. "It is essential that freedom of navigation is maintained and that all ships can move safely and freely in the region." Details of what took place remained sketchy. Iran said earlier Friday that it had seized a British oil tanker in the Strait of Hormuz. The tanker Stena Impero was taken to an Iranian port because it was not complying with "international maritime laws and regulations," Iran's Revolutionary Guard declared.A statement from Stena Bulk, which owns the tanker, said it was unable to contact the ship after it was approached by unidentified vessels and a helicopter in the Strait of Hormuz. The company said the tanker, with 23 crew members aboard, was in international waters when it was approached but subsequently appeared to be heading toward Iran. President Trump addressed the incident from the South Lawn of the White House on Friday. "Well, as you know, we have a very close alliance with the U.K. and we always have. The U.S. has very few tankers going in because we're using our own energy now. We've made a lot of progress over the last two and a half years," Mr. Trump said. "So, we don't have very many tankers going in, but we have a lot of ships there that are warships and we'll talk to the U.K. We have no written agreement but we have an agreement they've been a very great ally of ours. So we heard about it." U.K. Chamber of Shipping chief executive Bob Sanguinetti said the seizure represented an escalation in tensions in the Persian Gulf and made it clear more protection for merchant vessels was urgently needed. He claimed the action is "in violation of international regulations which protect ships and their crews as they go about their legitimate business in international waters."
Iran seizes two UK tankers in Strait of Hormuz – BBC -Foreign Secretary Jeremy Hunt has said he is "extremely concerned" by the seizure of two tankers by Iran. The Stena Impero is British-flagged and the Mesdar is Liberian-flagged but British owned. The Mesdar's operator said the vessel was now free to continue its journey after it was boarded by armed guards at around 17:30 BST on Friday. The Stena Impero's owners say they have been unable to contact their vessel, which was "heading north towards Iran". They say there are 23 personnel on board the British-flagged oil tanker and it was approached by "unidentified small crafts and a helicopter". The Mesdar's Glasgow-based Norbulk Shipping UK said communication had been re-established with the vessel and its crew was "safe and well". The government's emergency committee, Cobra, is meeting in Whitehall for the second time on Friday to discuss the incident. Mr Hunt said the seizures were "unacceptable" and the emergency meeting would review what the UK could do to "swiftly secure the release of the two vessels". "It is essential that freedom of navigation is maintained and that all ships can move safely and freely in the region," he added. He said the tankers' crews were made up of a range of nationalities but no British citizens were understood to be on board either vessel. "Our ambassador in Tehran is in contact with the Iranian Ministry of Foreign Affairs to resolve the situation and we are working closely with international partners," he said. These latest developments come amid heightened tensions between the UK, the US, and Iran.
'Extraordinarily brazen' : Iran seizes tanker in Strait of Hormuz, raising tensions with Britain - Iran seized a British tanker in the Strait of Hormuz for alleged marine violations and allowed a second one to proceed after issuing a warning, according to Iran state TV and news reports. The actions were seen as a dramatic intensification of already fraught relations between the U.S. and Iran, and now Britain, which seized an Iranian tanker suspected of carrying oil to Syria several weeks ago. “This is an extraordinarily brazen step here. This is taking tankers under way, then forcing them into Iranian waters, and I think it’s a highly provocative step. It’s something the Iranians tried to do before, when they tried to nab another British ship on the 10th of July but British war ships stopped them,” said Henry Rome, Iran analyst with Eurasia Group. “This is an intentional escalation from what we’ve seen by the Iranians.” The Iranian Revolutionary Guard earlier said it seized the British-flagged tanker Stena Impero, after it failed to follow international maritime regulations. The Guard took the ship to a coastal area to be turned over to maritime authorities, according to Iran state media. The Tasnim news service quoted regional military sources saying the Guard also stopped but released British-operated tanker Mesdar in the Strait of Hormuz. The Mesdar’s owner, Norbulk Shipping UK, also said the ship was released after it was boarded by armed personnel at about 5:30 p.m. BST Friday. It said armed guards had left the vessel, and the crew was unharmed. The ship, which sails under a Liberian flag, was reportedly warned about safety and environmental issues. British Foreign Secretary Jeremy Hunt earlier said he was concerned by the seizure of the two ships by Iranian authorities in the Strait of Hormuz. He said the U.K. is attempting to resolve the situation in Tehran and with international partners. Just after Hunt spoke, reports emerged that the Mesdar was released. “I’m extremely concerned by the seizure of two naval vessels by Iranian authorities in the Strait of Hormuz,” said Hunt. “I will shortly attend a COBR meeting to review what we know and what we can do to swiftly secure the release of the two vessels — a British-flagged vessel and a Liberian-flagged vessel.” COBR is an emergency response committee.
Iran says its seizure of British ship a 'reciprocal' move - (AP) — Iran’s seizure of a British oil tanker near the Persian Gulf was in response to Britain’s role in impounding an Iranian supertanker first, senior figures in Iran said Saturday, prompting condemnation from the U.K. and its European allies as they continue to call for a de-escalation of tensions in the critical waterway. U.K. Foreign Secretary Jeremy Hunt said Britain’s response to Iran’s seizure of a British-flagged ship in the Strait of Hormuz “will be considered but robust.” In comments on Twitter on Saturday, he said he spoke with Iran’s foreign minister and expressed extreme disappointment that the Iranian diplomat had assured him Iran wanted to de-escalate the situation but “they have behaved in the opposite way.” The free flow of traffic through the Strait of Hormuz is of international importance because one-fifth of all global crude exports passes through the waterway from Mideast exporters to countries around the world. The narrow waterway sits between Iran and Oman. The British-flagged Stena Impero was intercepted late Friday by Iran’s powerful Revolutionary Guard forces. The ship’s owner, Stena Bulk, said the vessel was stopped by “unidentified small crafts and a helicopter” during its transit through the Strait of Hormuz. The vessel was seized with a crew of 23 crew aboard, although none are British nationals. A video released by the Revolutionary Guard shows several small Guard boats surrounding the larger tanker. Several men dressed in military fatigues and black masks rappel onto the ship from a hovering helicopter.Hunt said the ship’s seizure shows worrying signs Iran may be choosing a dangerous and destabilizing path. He also defended the British-assisted seizure of Iran’s supertanker two weeks ago as a “legal” move because the vessel was suspected of breaching European Union sanctions on oil shipments to Syria.The view from Iran was different. In comments on Twitter on Saturday, Iran’s Foreign Minister Mohammad Javad Zarif characterized the seizure of Iran’s tanker July 4 as “piracy.” Politician and former Guard commander, Maj. Gen. Mohsen Rezai, wrote that Iran was not seeking conflict, “but we are not going to come up short in reciprocating.”
Live updates: Iran tensions soar after tanker seized - CNN
- A British-flagged oil tanker, the Stena Impero, is in Iranian custody Saturday after the country's Revolutionary Guard Corps (IRGC) said they had seized it in the Strait of Hormuz for "violating international regulations."
- A second tanker was stopped Friday, but has since been allowed to continue its course.
- UK Foreign Secretary Jeremy Hunt says the UK is "not looking at military options" at this time.
- Iran's actions come amid increasing hostility between Tehran and Washington in recent weeks, and have raised tensions in the already volatile region.
A Senior Russian lawmaker has claimed that the United States is “taking advantage” of tensions in the Persian Gulf in order to deploy more troops to the region. “It is already clear who will be the first to take advantage of the escalated situation in the Strait of Hormuz and in the Middle East in general: The Pentagon has just approved the transfer of troops to Saudi Arabia," Russian senator Konstantin Kosachev said in a post on Facebook. The Trump administration is reinforcing its controversial military relationship with Saudi Arabia by preparing to send hundreds of troops to the country amid increasing tensions with Iran, CNN learned Wednesday. Five hundred troops are expected to go to the Prince Sultan Air Base, located in a desert area east of the Saudi capital of Riyadh, according to US two defense officials. A small number of troops and support personnel are already on site with initial preparations being made for a Patriot missile defense battery as well as runway and airfield improvements, the officials said. The UK government is convening its second emergency meeting of national security officials in less than 24 hours to discuss the seizure of a British-flagged tanker in the Persian Gulf, a Downing Street spokeswoman has told CNN. It has warned ships connected to the country's shipping industry to "stay out of the area" in the interim.
Tension in the Gulf: Not Just Maritime Powder Kegs -- A recent interview in which Baloch National Movement chairman Khalil Baloch legitimized recent militant attacks on Iranian, Chinese and Pakistani targets is remarkable less for what he said and more for the fact that his remarks were published by a Saudi newspaper. Speaking to Riyadh Daily, the English language sister of one of Saudi Arabia’s foremost newspapers, Al Riyadh, Mr. Baloch’s legitimization in the kingdom’s tightly controlled media constituted one more suggestion that Saudi Arabia may be tacitly supporting militants in Balochistan, a troubled Pakistani province that borders on Iran and is a crown jewel of China’s infrastructure and energy-driven Belt and Road initiative. The interview followed publication in 2017 by a Riyadh-based think tank with ties to Saudi crown prince Mohammed bin Salman of a call by a Baloch nationalist for support for an insurgency in the Baloch-populated Iranian province that borders Pakistan and is home to the crucial Indian-backed port of Chabahar on the Arabian Sea. It also juxtaposes with Pakistani anti-Shiite, anti-Iranian militants who operate madrassahs along the Iranian-Pakistani border reporting stepped up Saudi funding. The monies are believed to come in part from Saudi nationals of Baloch descent, but the militants suggest the funding has at least tacit government approval.Balochistan has witnessed multiple attacks on its Hazara Shiite minority as well as in May on a highly secured luxury hotel frequented by Chinese nationals in the Chinese-backed Baloch port city of Gwadar and a convoy of Chinese engineers as well as the Chinese consulate in Karachi. Militants killed 14 people in April in an assault on an Iranian revolutionary guards convoy and exploded in December a car bomb in Chabahar.Saudi Arabia is also suspected of supporting the Mujahedeen-e-Khalq, a controversial Iranian exile group that seeks the fall of the Iranian regime and enjoys support of senior Western politicians and former officials as well as US national security advisor John Bolton prior to his appointment and ex-Saudi intelligence chief Prince Turki al-Faisal. For now, tacit Saudi support for Baloch militants is likely to be more about putting potential building blocks in place rather than the result of a firm decision to wage a low-intensity proxy war.
Fox News Is Calling The Persian Gulf “The Arabian Gulf” - For centuries throughout the entire world that crucial body of water has been called “the Persian Gulf,” even though in 1935 the nation of Persia changed its named to “Iran.” I became aware several decades ago when I was in Saudi Arabia that they have a really big fuss that it should be called “the Arabian Gulf.” I think maybe their fellow Arab GCC members have been supporting this nonsense as well, but nobody else did, certainly not the US.But now here it is, and I had noticed in some other US media outlets recently. Is this yet another payoff to the murderous Saudi Crown Prince Mohammed bin Salman (MbS) for funneling piles of money to Jared Kushner and the Trump Organization? I mean, Fox News does what Trump and his flunkies want. So, not only are we not punishing MbS for his awful war in Yemen, which even the UAE is now getting out of, not only are we not punishing him for ordering the assassination of a US-based journalist, Jamal Khashoggi, but, heck, Trump through Fox News and I am not sure who is trying to change the name of this body of water from its historical origin to kiss the ass of this disgusting murderer. Oh, there is also the matter that Trump has gotten himself off into a totally anti-Iran schtick, with his withdrawal from the JCPOA and his imposition of massive sanctions on Iran. But this looks like an attempted permanent punishment. Frankly, I hope the rest of the world does not go along with this bs, but in the US, I fear he may have succeeded, so many people are so ignorant.
They were convicted of minor crimes as teens and now face beheading and 'crucifixion' in Saudi Arabia - When Ali al-Nimr was 17, he says he was suddenly rammed by a Saudi Arabian government vehicle while riding his motorcycle through the eastern district of Qatif. Al-Nimr was taken to a local police station, where he was beaten so badly he had to be transferred to a hospital, his lawyer said. Initially, al-Nimr was hit with relatively minor charges related to his participation in the widespread 2011 to 2012 Arab Spring demonstrations against Shia repression in the eastern part of the country, where most of the population resides.But when his uncle, the reformist Shia cleric and protest leader Sheikh Nimr al-Nimr, was arrested, prosecutors ramped up their case. Instead of minor infractions related to the protests, al-Nimr now stood accused of joining a terrorist organization, throwing Molotov cocktails and arson.After being moved to an adult prison at the age of 18, he confessed to a string of crimes under extreme torture, according to his lawyer, Taha al-Hajji. At trial, al-Nimr rescinded his confession, but this was ignored by the presiding judge, according to al-Hajji.Then, in May 2014, al-Nimr was sentenced to death by "crucifixion," contrary to Article 37 of the U.N. Convention on the Rights of the Child, which states that no individual should be sentenced to death for crimes committed under the age of 18. Saudi Arabia is one of the 196 countries that has ratified the CRC.Al-Nimr, now 24, is not alone. In fact, he is one of three Saudi Arabian men known to be on death row who were arrested and charged with crimes allegedly committed when they were minors. The cases of al-Nimr, Abdullah al-Zaher, 23, and Dawood al-Marhoon, 24, follow the brutally familiar pattern of arrest, torture and then, once they could be tried as adults, being sentenced to death for crimes against the state committed before they turned 18, according to Reprieve, the human rights advocates campaigning for their release.
US preparing to send hundreds of troops to Saudi Arabia amid Iran tensions - The Trump administration is reinforcing its controversial military relationship with Saudi Arabia by preparing to send hundreds of troops to the country amid increasing tensions with Iran. Five-hundred troops are expected to go to the Prince Sultan Air Base, located in a desert area east of the Saudi capital of Riyadh, according to US two defense officials. A small number of troops and support personnel are already on site with initial preparations being made for a Patriot missile defense battery as well as runway and airfield improvements, the officials said. The US has wanted to base troops there for some time because security assessments have shown Iranian missiles would have a difficult time targeting the remote area. The decision comes as US and Saudi relations remain extremely sensitive amid bipartisan congressional anger how the administration has handled the murder of Jamal Khashoggi. But the Trump administration has said it is committed to trying to help protect Saudi Arabia against Iranian aggression. Last month the administration announced it was sending 1,000 additional troops to the Middle East as Iran tensions flared but did not specify which countries they were going to. The forces going to Saudi Arabia are part of this deployment. Congress has not been formally notified of the deployment, although one official told CNN that they had been given an informal heads up and an announcement is expected next week.
Pentagon Fears Turkey To Retaliate Against US Troops In Syria Over New Sanctions - As expected, Turkey blasted the White House's prior day announcement that it has killed Turkey's involvement in the F-35 joint strike fighter program after Ankara received a first batch of S-400 Russian-made air defense components starting last week. Turkey's foreign ministry called on the US to rectify its "mistake". “This unilateral step is incompatible with the spirit of alliance and does not rely on any legitimate justification,” the Turkish Foreign Ministry said in a strong-worded statement immediately following the White House press release. “We call on the United States to come back from this mistake that will cause irreparable wounds in our strategic relations,” it said.The White House had stated while confirming it would indefinitely block transfer of the F-35: “Turkey’s decision to purchase Russian S-400 air defense systems renders its continued involvement with the F-35 impossible,” and added, “The F-35 cannot coexist with a Russian intelligence collection platform that will be used to learn about its advanced capabilities.”Turkey has responded to Trump's firm stance by staying it's "unfair". According to state-run TRT World: "Excluding Turkey, one of the main partners from the F35 program is unfair, and the claim that S-400 system will weaken the F-35s is invalid," the foreign ministry said.Meanwhile, at a moment that looming military conflict between Turkey, the Syrian Army and Damascus' ally Russia is heating up near Idlib, the Pentagon issued a separate statement Wednesday demanding that the Turkish army avoid striking US troops in the region amid a Turkish build-up of forces along the border. The statement warned the US would consider any “unilateral actions into northeastern Syria,” particularly targeting US troops, as “unacceptable”.
Major Gas Pipeline In Syria Knocked Offline In Mysterious 'Sabotage Attack' - Sunday Syrian state media reported that a major gas pipeline running across the country's center has been knocked offline due to a terror attack. The pipeline carries about 2.5 million cubic meters of gas to a processing plant and onward to other power stations. The pipeline specifically links al-Shaer gas field with Ebla Gas Factory in eastern Homs countryside, according to reports. Syria's official SANA reported that “Terrorists vandalized the gas pipeline which extends from al-Shaer field to Ebla Gas Factory as the pipeline went out of service.” The report indicated further that “technical workshops affiliated to the Petroleum Ministry started to work on fixing the gas pipeline in order to pump gas through it again over the coming hours,” and strongly suggested that "remnants of ISIS terrorists" conducted the attack. In 2014 and 2016 ISIS militants briefly seized the Shaer fields, after which pro-government forces returned them to Damascus control in heavy fighting. The AP noted: The SANA news agency didn't name the attackers. The area in the central Homs province is close to where remnants of the Islamic State group are still holed up after losing all the territory they once held in the country. Syria's remnant and heavily weakened oil and gas infrastructure is vital especially considering aggressive oil import sanctions currently imposed on Damascus by the United States, as well as the fact that the country's largest and most valuable oil and gas fields are still under the control of the US-backed Syrian Democratic Forces in Syria's east.
How Russia Uses Israeli-Designed Drones in the Syria War - LAST SUMMER, ISRAEL shot down yet another military drone near the line that separates the Israeli-occupied Golan Heights from the rest of Syria. The confrontation would have been business as usual, if not for a twist: Images of the destroyed drone showed Cyrillic tail markings and other identifiable components of a Forpost belonging to Russia. The findings presented an awkward geopolitical moment: Syria and Russia are allies, and Syria and Israel are bitter enemies — but the Russian Forpost shot down by Israel was designed in Israel itself. How Israeli-designed drones ended up supporting Syrian President Bashar al-Assad is a case study in the complicated relationship between Israel and Russia. Though Russia has been instrumental in protecting the Assad government, which appeared to be on the brink of collapse four years ago, it has also carefully cultivated a military relationship with Israel over the past decade. After more than seven years of war, the skies over Syria are saturated with aircraft from multiple militaries and armed groups, each pursuing their own goals, including using the country as a weapons-testing ground. American airpower and Kurdish ground forces helped grind the Islamic State’s caliphate down to a tiny pocket before it dramatically collapsed this past spring. Meanwhile, Turkish occupation forces and their proxies are conducting a brutal campaign of repression in the Syrian-Kurdish canton of Afrin. In the last five years, Israel has taken full advantage of the Syrian conflict to tighten its grip on the Golan Heights, a part of Syria that Israel has occupied since the Six-Day War in 1967, in violation of international law. Periodically, Israel has shot down unmanned aerial vehicles like the Russian Forpost. The Forpost incident sheds light on one of the worst-kept secrets in the Middle East: that Russia is largely willing to ignore Israel’s air war against Iran and Hezbollah — both of which are Russian allies. The appearance of Israeli-licensed drones in Russia’s arsenal has its roots in an entirely different conflict: the 2008 Russo-Georgian war. When the Georgian military shot down Russian jets, the loss of equipment prompted Russia to invest in the sort of sophisticated UAV program that other nations, like the United States and Israel, already had. In an attempt to close this technological gap and reduce the risk to its pilots, Russia found an unlikely partner in Israel.
UAE scales down military presence in Yemen The United Arab Emirates, a key member of the Saudi-led coalition fighting in Yemen, is scaling back its military presence there as worsening US-Iran tensions threaten security closer to home, Reuters reported four western diplomatic sources saying. The UAE has pulled some troops from the southern port of Aden and Yemen’s western coast, two of the diplomats said, areas where the Gulf state has built up and armed local forces who are leading the battle against the Iran-aligned Houthi group along the Red Sea coast. Three of the diplomats said Abu Dhabi preferred to have its forces and equipment on hand should tension between the United States and Iran escalate further after attacks on oil tankers in the Gulf and Tehran’s downing of a US unmanned drone. “It is true that there have been some troop movements … but it is not a redeployment from Yemen,” a senior Emirati official told Reuters, adding that the UAE remains fully committed to the military coalition and “will not leave a vacuum” in Yemen. The official would not provide details on the movements, the numbers involved or specify whether it was happening inside or outside Yemen, where the alliance intervened in 2015 to try to restore the government ousted from power by the Houthis.
Trump’s Iran Strategy Is Helping China - The Trump administration tends to view Iran in isolation or as a Middle Eastern problem—a regional nemesis with nuclear ambitions that threatens Israel and America’s Arab allies. This is a mistake. Iran sits at the critical cross section of the Middle East, Central and South Asia, and the vital trade routes cutting across the Asian continent. Trump withdrew from the 2015 nuclear deal among Iran, the U.S., and five other world powers, and now wants Iran to come to the table for fresh negotiations in pursuit of a stricter agreement. Trump’s advisers may also be aiming for more: regime change in Tehran. Their instrument of choice is maximum economic pressure—ever-tightening sanctions that will cut Iran off from the world economy. But Iran has so far refused to budge; it has responded by escalating tensions in the Persian Gulf and threatening to resume full-scale nuclear activity. Containing China is another foreign-policy priority. Trump has launched a frontal assault on Chinese trade. But to realize his loftier goal of denying China superpower status, Trump will have to look beyond tariffs to contending with China’s expanding influence across Asia and Africa. The Trump administration’s Iran strategy is getting in the way of its plans for China. China has always viewed Iran as an economic prize; America has now made it easier for Beijing to lay claim to it. Chinese trade and investment in energy and infrastructure are poised to fill the void left by European withdrawal. Slowly, Chinese economic influence will grow, perhaps enough to buoy Iran’s economy as it struggles under Trump’s pressure. Benefits of this burgeoning relationship will run both ways.
22 countries signed an 'unprecedented' letter condemning China's oppression of Muslims. But none of them come from the Islamic world. -- 22 countries have banded together to condemn China's oppression of its Muslim minority, in what activists called an " unprecedented move." But Muslim countries were conspicuously absent from the statement as the Islamic world continues to turn a blind eye. In the Wednesday letter, written by UN Human Rights Council member states, the signatories called on China to "refrain from the arbitrary detention and restrictions on freedom of movement of Uighurs, and other Muslim and minority communities in Xinjiang."Those 22 signatories are: Australia, Austria, Belgium, Canada, Denmark, Estonia, Finland, France, Germany, Iceland, Ireland, Japan, Latvia, Lithuania, Luxembourg, the Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland, and the UK.The US did not sign the letter, having quit the Human Rights Council last year, calling it "hypocritical and self-serving." The Uighurs are a mostly-Muslim ethnic minority group living inXinjiang, western China. Beijing claims the entire group is a threat to national security, and has detained up to 1.5 million of them in prison-like camps where people are reportedly physically and psychologically tortured. Xinjiang residents are frequently arrested or detained for so-called "infractions" including communicating with people outside the region and exhibiting Muslim markers, like a beard or long skirts.
China economy reports lowest GDP growth on record for second quarter as US trade war bites - China’s economic growth slowed to a record low of 6.2 per cent in the second quarter of 2019 as the shock from the protracted trade war with the United States continued to resonate through the world’s second largest economy. Gross domestic product (GDP) growth slid from 6.4 per cent in the first quarter, according to data published by the National Bureau of Statistics (NBS) on Monday. Even during the global financial crisis in 2009, China’s quarterly GDP growth did not dip below 6.4 per cent. The figure, nonetheless, falls within the range of Beijing’s target growth rate for the year of between 6.0 to 6.5 per cent and was generally expected. The median forecast of a poll of analysts conducted by Bloomberg was 6.2 per cent, but some had predicted worse, with many having deep concerns about the effect of the trade war. The data also showed that over the first half of the year, China’s economy grew by 6.3 per cent.“The economic data is still facing downturn pressure [in the second half of the year]. While there are also many positive factors, the market vitality is gradually being stimulated,” said NBS spokesman Mao Shengyong. Other data released on Monday, mostly for the month of June, was better than expected. Industrial production – a measure of the output of the industrial sectors in China’s economy, including manufacturing, mining and utilities – grew by 6.3 per cent from a year earlier. This was up from 5.0 per cent growth in May, which was the lowest since February 2002, and well above the expectations of a poll of economists, which had predicted 5.2 per cent growth. Within industrial production, manufacturing grew by 6.2 per cent year-on-year, up from 5.0 per cent in May. This beat expectations, and contrasts sharply with the weak sentiment among manufacturers surveyed in June’s purchasing managers’ index.
China Reports Slowest GDP Growth On Record, As Retail Sales, Industrial Output And Fixed Investment All Beat - The Chinese goalseek-o-tron was in perfect working order on Monday morning, when moments ago Beijing reported that China's Q2 Y/Y GDP rose at 6.2%, once again precisely as consensus had expected, down from 64% in Q1 and the lowest since "modern" records started to be kept 27 years ago in 1992, dipping below even the financial crisis low of 6.4$ Additionally, 2Q cumulative GDP rose 6.3% y/y, also matching the consensus estimate, and down from 6.4% in Q1."We expect Beijing to ramp up stimulus measures in the second half despite more limited policy room, though markets should not put too high expectations on the scale and duration of these stimulus measures,” Nomura's China economist Lu Ting wrote in a recent research note. “Domestic policies will to a large extent be dependent on the U.S.-China trade tensions.” The disappointing GDP print comes just day after another miss, this time in the value of exports, which sharnk by 1.3% in dollar terms in June, after inching up in May despite the tensions with the US. Property investment moderated to 10.9 per cent in the first six months, compared with growth of 11.2 per cent in the year to May. Strong property sales helped brighten the economy into April, but the sector lost momentum in the second quarter. But while the record Chinese slowdown was widely as expected, there was an unexpected silver lining to the lowest Chinese GDP print on record, as all three core June economic indicators - retail sales, industrial output and fixed investment - beat sharply lowered expectations, to wit:
- Retail Sales: 9.8%, Exp. 8.5%, up from 8.6%
- Industrial Output: 6.3%, Exp. 5.2%, up from 5.0%
- Fixed Asset Investment: 5.8%, Exp. 5.5%, up from 5.6%
China: The Covert Credit Superpower - Yves Smith -An new working paper by Sebastian Horn, Carmen Reinhart and Christoph Trebesch on China’s foreign lending has some important findings, such as that China accounts for more than 40% of the external debt of 50 developing countries. We’ve embedded the document at the end of this post.The study is an ambitious undertaking, seeking to track China’s foreign lending from the start of the current regime, in 1949 to 2017. They identified 1,974 loans and 2,947 grants to 152 countries totaling approximately $530 billion, which is over and above China’s purchases of foreign bonds. The authors conclude that the overwhelming majority of the lending is “official,: meaning by the government or government-owned enterprises, despite its opacity. The authors describe half the funding to developing economies as “hidden,” meaning not included in the statistics of the World Bank, International Monetary Fund or Bank of International Settlements.This data is difficult to compile because China lends to different economies in different ways, and for none of the types of lending is there a central, authoritative data source. On top of that, even where the data is solid, it may not mean what it appears to mean. For instance, former US Treasury official Brad Setser used to post regularly on Treasury’s report on international capital flows and he would regularly attribute most of Treasury purchases attributed to the UK because that’s where the trades were booked, to China. But the biggest gap is not in coming up with estimates of Chinese purchases of foreign government bonds, which is its main source of lending to advanced economies, but its use of loans, foreign direct investment, and even loans to Chinese construction companies operating abroad, which are its major ways of providing funding to developing economies.
Hong Kong, Macau and Taiwan deleted from website for mainland China’s controversial ‘social credit system’ as rumours swirl of implementation Hong Kong, Macau and Taiwan have been removed from a Chinese government “social credit system” website to avoid any misunderstanding that the controversial scheme, which some observers believe will increase the collection and sharing of data about citizens, will be implemented locally. In a message posted on his Facebook page late on Saturday night, Secretary for Constitutional and Mainland Affairs Patrick Nip Tak-kuen said the items on Hong Kong, Macau and Taiwan had been deleted from the “Credit China” website operated by the National Public Credibility Information Centre, after communications between the site administrator and the city’s government. On Tuesday, some Taiwanese newspapers and online platforms in Hong Kong claimed the social credit system would be implemented in the city. Nip rejected the claim the same day. Rumours about imminent implementation may have arisen because the system was included in a three-year action plan, from 2018 to 2020, for developing the Greater Bay Area, the central government’s plan to turn Hong Kong, Macau and nine Guangdong cities into an integrated economic and business hub. The sleepy village testing China’s social credit system The Guangdong provincial government issued the action plan on July 5. “The deletion of Hong Kong, Macau and Taiwan from the website, which was done on Saturday, is aimed at avoiding any misunderstanding that the social credit system will be implemented in Hong Kong,” a Hong Kong government source said. The source said that for completeness the website previously included Hong Kong, Macau and Taiwan along with mainland provinces although there were no links embedded.
Anti-extradition Hong Kong protesters march in Shatin - Tens of thousands of people marched in Shatin, New Territories on Sunday to oppose the controversial extradition bill after armed police used batons and pepper spray to disperse the protesters in Sheung Shui on Saturday. At 3:10pm, protesters began their march at the Chui Tin Street Soccer Pitch next to the Sha Tin Che Kung Temple. They called for withdrawal of the extradition bill, universal suffrage, retraction of the official characterization of the June 12 protest as a “riot,” release of the arrested anti-extradition protesters and establishment of an independent commission to investigate police brutality. They called for the resignation of Chief Executive Carrie Lam Cheng Yuet-ngor. The organizers said it had been the first large-scale protest in Shatin over the last three decades. They said they would play on the street at 8pm the movie Lost In The Fumes, which is about Edward Leung Tin-Kei, spokesperson of the Hong Kong Indigenous. The organizers also said the electoral officer should not have the right to bar Hong Kong people from joining Legislative Council elections. In 2016, several localists, including Edward Leung and Chan Ho-tin, convenor of the Hong Kong National Party, were barred from joining the Legco election. In the same year, six pro-democracy lawmakers were disqualified because they had allegedly failed to fulfill the oath requirements. In 2018, Agnes Chow Ting, standing committee member of Demosistō, and some other candidates were barred from joining the Legco by-election race. Some marchers felt sick due to the hot weather on Sunday. At 4pm, protesters arrived at the public transport interchange near the Shatin MTR station, which was the ending point of the march.
‘No rioters, only a tyrannical regime’: Thousands of Hong Kong seniors march in support of young extradition law protesters Billed as a march for the “silver-haired,” the event drew large crowds to Chater Garden in Central. Organisers said over 9,000 people joined the rally, which ended outside the Admiralty government headquarters. Police said the event turnout was 1,500 at its peak. Marchers voiced opposition to the now-suspended extradition bill, which would allow Hong Kong to transfer fugitives to mainland China. See also: HKFP Lens: ‘Protect Hong Kong’ – seniors rally against extradition bill in solidarity with young protesters Like other protests in recent weeks, the march also reiterated the five core demands put forward by protesters, including calls for an independent investigation into police behaviour and universal suffrage. Activist Yeung Po-hi, one of the protest organisers, read aloud a statement in support of “our youth in their struggle of no return.” “In their fight against the extradition bill, our youth brave truncheons, tear gas, pepper spray, rubber bullets, violent arrest and, harsh punishment,” Yeung said. “We are proud of them – their determination, mobilisation and tactics, teamwork and self-organisation.” The statement also endorsed the storming of the legislature on July 1, describing it as a justifiable response by young people and a “symbolic provocation” to the Chinese Communist Party. Reverend Chu Yiu-ming, a member of the “Occupy trio” behind the 2014 pro-democracy movement, also addressed the crowd, calling on Chief Executive Carrie Lam to “repent.” If Lam was “still a human being,” Chu said, she would have “compassion” and stop arresting young protesters and dividing society. While the event was billed as a silent march, the elderly attendees shouted slogans along the way such as “Carrie Lam step down” and “No rioters, only a tyrannical regime.”
Another massive march in Hong Kong secures approval despite police earlier asking organisers to postpone over safety concerns Organisers will go ahead with another massive march against Hong Kong’s embattled government on Sunday, having secured approval in principle from police who had asked them to postpone it until August because of safety concerns in light of escalating protest violence. After a meeting with police on Wednesday, the Civil Human Rights Front said it was now waiting for a formal letter of no objection, the announcement coming before thousands of mostly senior citizens took to the streets in a silent demonstration in support of youngsters who have been leading regular protests against the government’s now-suspended extradition bill. Organisers said 9,000 people had joined Wednesday’s peaceful, “silver-haired generation” march from Chater Garden in Central to government headquarters in Admiralty, also calling for an independent, judge-led inquiry into the use of force by police against protesters. A pro-establishment source revealed on Wednesday that after the bill was suspended on June 15, Chief Executive Carrie Lam Cheng Yuet-ngor’s political allies had advised her in a closed-door meeting to appoint a formal commission of inquiry. Lam had made it clear that would not happen “as long as she is the chief executive”, the source said. The front, which organised two mass protests that drew historic numbers onto the streets in June, insisted the inquiry was critical, as it announced details of its Sunday march from Victoria Park in Causeway Bay to the Court of Final Appeal in Central.“Only an independent inquiry can settle the rifts and confrontations within society,” front leader Jimmy Sham Tsz-kit said. “The deep anger has originated from the government’s decision not to respond to protesters’ demands.”
Shock Daylight Arson Attack On Japanese Anime Studio Leaves 33 Dead - A popular animation production studio in Kyoto, Japan has gone up in flames after a reported arson attack, leaving a shocking 33 people confirmed or presumed dead, and another 36 injured - some critically - according to Japanese fire department statements. It's Japan's worst case of arson in decades and among the highest mass casualty events in its recent history. The three-story building was quickly engulfed after a man sprayed a flammable liquid onto it while reportedly shouting, "You die!" according to local media reports. Many among the deceased had been trapped on the top floor and perished attempting to to get to the roof. Police arrested a 41-year-old man who had shouted “die” as he poured what appeared to be petrol around the three-story Kyoto Animation building shortly after 10 a.m. — Reuters The suspect has been detained and is being treated for injuries at a hospital. Early reports didn't give a motive or were able to identify whether he had been an employee of Kyoto Animation Co., possibly disgruntled or engaged in revenge attack. An emergency responder told the AFP, "Callers reported having heard a loud explosion from the first floor of Kyoto Animation and seeing smoke." It total some 70 people had been working inside the building at the time of the attack.
Be very afraid: Japan-Korea history war spirals toward trade war - A long-running history war between Japan and South Korea has burst the boundaries of diplomacy, leaving the world’s third- and 11th-largest economies teetering on the brink of a real, live trade war. The stakes are stratospheric. The new battle brewing between Washington’s two democratic allies in Northeast Asia threatens seismic consequences not just for the world’s electronics supply chain, but also for regional geopolitics. Worryingly, both sides look unwilling to de-escalate, while customary mediator Washington stands on the sidelines. The crisis blew up when Tokyo announced this month that South Korean importers of key Japanese semiconductor and display materials are now required to submit to new, and potentially onerous, 90-day government approval processes. The decision was taken, ostensibly, on national security grounds – a move that may have been plucked from US President Donald Trump’s playbook. At face value, it looks highly dubious. There is no evidence that Seoul has dispatched the materials to North Korea. But Japanese Prime Minister Shinzo Abe has taken a broader stance: He considers Seoul, overall, an untrustworthy counterparty. Two actions underscore his contention. Last year, Seoul’s Moon Jae-in administration unilaterally ceased to abide by the terms of a 2015 agreement signed between Tokyo and a previous Seoul administration, via which an apology and compensation was delivered to elderly Korean “comfort women.” Then, in January, Korea’s Supreme Court ordered the seizure of Japanese firms’ assets to compensate Korean workers forced to labor in wartime Japanese factories. A fuming Tokyo insisted the action breached the terms of a 1965 treaty that it claims dealt with the issue, and in which hundreds of millions of dollars of compensation was paid. Tokyo demanded third-party arbitration (a clause in the 1965 treaty). Seoul shot back that it cannot overturn a court decision. It refused.
Worldwide Semiconductor Equipment Sales Collapse In 2019, No Bottom Until 1Q20? - SEMI trade group, whose 2,000 semiconductor manufacturers including Applied Materials of the U.S. and Japan-based Tokyo Electron, published a chilling note this week that warned spending on chipmaking equipment in 2019 would collapse as concern about a global trade recession, fueled by a deepening trade war, could be immient.Semiconductors are closely observed because they sometimes serve as a lead on global macro.The industry trade group said sales are expected to drop 18% this year to $52.7 billion, the first decline in over four years; the trade group initially projected an 8% decline to $59.6 billion.The industrial slowdown reflects uncertainty among major chipmakers that buy fab equipment.Demand for smartphones and data servers fueled the industry in the last four years - but demand has recently dropped as memory chip prices decline.With a global synchronized decline gaining momentum, investment in chip-heavy data centers is one of the biggest drags on the industry. Capital spending by Apple, Google, and IBM declined YoY in 1Q19, U.S.-based Synergy Research Group says. SEMI cited the out of control trade war and sanctions against Huawei Technologies, the third largest semiconductor company in the world, as the leading cause of a downturn in the industry.The group predicts fab equipment spending will fall in every market except Taiwan and North America. The steepest declines will be in South Korea and other APAC countries.In a separate report, Teddy Vallee, CIO of Pervalle Global, indicates that despite Wall Street forecasting a 2H19 rebound, the semiconductor industry will continue to weaken through 1Q20. “Our leads still have semi sales continuing lower into years end/Q12020. The most recent coincident data confirms this, as semi exports from South Korea for the first ten days of July fell by 25%. This was with an extra selling day vs. the prior year as well.”
Global Debt Hits $246 Trillion, 320% Of GDP, As Developing Debt Hits All Time High According to the latest IIF Global Debt Monitor released today, debt around the globe hit $246 trillion in Q1 2019, rising by $3 trillion in the quarter, and outpacing the rate of growth of the global economy as total debt/GDP rose to 320% NEW Global Debt Monitor: Global debt hit $246T in Q1 2019, nearly 320% of GDP. This was the second-highest dollar number on record after the first three months of 2018, though debt was higher in 2016 and 2017 as a share of world GDP. Total debt was broken down as follows:
- Households: 60% of GDP
- Non-financial corporates: 91% of GDP
- Government 87% of GDP
- Financial Corporations: 81% of GDP
And while the developed world has some more to go before regaining the prior all time leverage high, with borrowing led by the U.S. federal government and by global non-financial business, total debt in emerging markets hit a new all time high, thanks almost entirely to China...
Guaido’s Bodyguards Arrested as Venezuela Talks Resume in Barbados– Three men linked to self-declared “Interim President” Juan Guaido were arrested on Friday while allegedly selling weapons stolen during the failed April 30 putsch.According to Communications Minister Jorge Rodriguez, Guaido’s personal bodyguards Erick Sanchez and Jason Parisi, as well as Sanchez’s cousin Eduardo Garcia, were detained while reportedly trying to sell five AK-103 rifles and ten ammunition packs for a sum of US $35,000.The rifles’ serial numbers allegedly match those stolen from the Bolivarian National Guard’s post in Caracas’ Federal Legislative Palace, where the National Assembly sits. Apart from catching the men in possession of the weapons, the government also claims to have accumulated “overwhelming” video and audio evidence against them since April. “How many more articles of the Constitution do[es Guaido’s team] look to violate? Why are they always linked to violent deeds with arms? We need to play clean, don’t try to cover these operations up,” Rodriguez said during a press conference. The arrests were announced as the government and opposition are engaged in Norway-mediated dialogue in Barbados, with both Maduro’s and Guaido’s delegations returning to the island on Monday for a new round of talks. No details of the discussions have been disclosed, with Associated Press reporting that the topic of elections is reportedly being left for last. “These criminals are sitting at the dialogue table on one hand and continue violent acts on the other,” Rodriguez went on to state on Saturday. National Assembly President Juan Guaido led a failed military uprising on April 30 which saw hardline opposition leader Leopoldo Lopez released from house arrest to join him and a handful of soldiers in the Altamira district of east Caracas. The putsch failed after it became apparent that the rest of the armed forces remained loyal to the Maduro government and a march led by Guaido was stopped from reaching the center of Caracas.
Drug kingpin El Chapo sentenced to life in prison, must forfeit $12.6 billion - The Mexican drug lord known as “El Chapo” was sentenced to life in prison plus thirty years on Wednesday at a hearing where he accused the U.S. government of corruption and of torturing him during his confinement. El Chapo, whose real name is Joaquin Guzman Loera, was also ordered to forfeit $12.6 billion during the sentencing hearing in U.S. District Court in Brooklyn, New York. Judge Brian Cogan, who cited what he called Guzman’s “overwhelming evil,” will determine restitution later. The kingpin was convicted earlier this year of presiding over a vast criminal operation that funneled immense quantities of narcotics, including heroin and methamphetamine, into the United States. Guzman did not testify during the three-month trial, but broke that silence during Wednesday’s hearing. Guzman alleged that he was denied justice during his trial and confinement in New York. “Since the government will send me to a jail where my name will not ever be heard again, I take this opportunity to say: There was no justice here,” he said, according to the New York Daily News. “I drink unsanitary water, no air or sunlight, and the air pumped in makes my ears and throat hurt. In order to sleep, I put toilet paper in my ears. My wife had not been allowed to visit, and I can’t hug my daughters,” he said. “This has been psychological, emotional and mental torture 24 hours a day.” “My case was stained and you denied me a fair trial when the world was watching. What happened here is the U.S. is not better than any other corrupt country,” Guzman added. Guzman spoke in Spanish and his comments were translated.
NATO ‘Concerned’ by Turkey’s Acquisition of Russian S-400 System — NATO said Friday it was “concerned” by Turkey’s acquisition of Russia’s S-400 missile defense system after Ankara took delivery of its first batch, AFP reported. The alliance has repeatedly warned Turkey that the Russian system is incompatible with other NATO weapons systems, not least the F-35 fighter jet. “We are concerned about the potential consequences of Turkey’s decision to acquire the S-400 system,” a NATO official told AFP.“Interoperability of our armed forces is fundamental to NATO for the conduct of our operations and missions.” The US fears that if NATO member Turkey integrates the S-400 into its defenses, there is a risk that sensitive data about the F-35, a new generation, multi-role stealth fighter, could leak back to the Russians. President Donald Trump’s pick for Pentagon chief, Mark Esper, confronted the Turkish defense minister about the deal on the sidelines of a NATO meeting last month. Washington has threatened to expel Turkey from its F-35 program, giving Ankara until July 31 to cancel the S-400 purchase or have its pilots kicked off the training course and expelled from the US. But Turkish President Recep Tayyip Erdoğan has refused to back down and said he is confident Turkey will not face US sanctions.
Turkey's Erdogan Vows To "Significantly" Cut Rates As Trump Set To Roll Out Sanctions Over S-400 Purchase - On Sunday, Turkish President Recep Tayyip Erdogan - who last weekend fired the head of the central bank for not cutting rates fast enough, and who has now become the de facto head of the CBRT - promised "significantly lower interest rates by the end of the year", Bloomberg reported. “We aim to reduce inflation to one digit by the end of this year,” Erdogan told journalists in Istanbul, according to the state-run Anadolu news agency. “As we achieve this, we will achieve our year-end interest rate target as well." Of course, should interest rates drop to one digit, the USDTRY will promptly collapse to two, as the rate differential between the lira and the dollar collapses, removing the main incentive to go long the lira at a time when the Turkish economy remains in crisis.Having founded the economic school of Erdoganomics, according to which inflation can be achieved only by lowering rates, the Turkish president and his US counterpart have quickly become kindered spirits when it comes to monetary policy. And just as Trump heaps pressure and insults on Fed Chair Powell, Erdogan has frequently accused the central bank of keeping borrowing costs too high. Last month, he complained that while the Fed was moving toward a rate cut, Turkey’s policy rate of 24% “is unacceptable.”Then, the last trace of any pretense that Turkey under Erdogan will forever be a banana republic came on July 6, when Erdogan unexpectedly dismissed the former central bank head, Murat Cetinkaya and made it clear that he expects his replacement as central bank governor to follow the government’s line on monetary policy. Cetinkaya had held rates steady for more than nine months.Meanwhile, even as Trump and Erdo may be BFFs when it comes to firing head of central banks, the US president and his advisors have reportedly settled on a sanctions package to punish Turkey for receiving parts of a Russian S-400 missile defense system and plans to announce it in the coming days, Bloomberg wrote in a separate report. News of the imminent sanctions was somewhat unexpectedly considering that when Trump and Erdogan met at the G-20 summit in Japan in June, the U.S. president suggested possible leniency on sanctions. He sought to blame the Obama administration for Turkey’s decision to buy the Russian equipment, saying the impasse is “not really Erdogan’s fault.”
Erdogan Celebrates Delivery Of S-400s, Says Turkey Should Build New Weapons With Russia -With few other options at its disposal, Washington has been forced to threaten to withhold deliveries of F-35 fighters to Turkey in retaliation for Ankara's purchase of a batch of Russian-made S-400 anti-air missiles. But with several more shipments of the anti-aircraft missiles due by the end of the summer, Turkish leader Recep Tayyip Erdogan isn't backing down. Rather, during remarks in the capital on Monday, he celebrated the arrival of the missiles, and said he would like to co-produce weapons with Russia, according to RT. Speaking on the third anniversary of the failed coup attempt that set off one of the greatest purges in Turkish history, Erdogan promised that the newly-acquired S-400 weapons systems would be fully deployed in less than a year. Russian cargo planes began delivering the components on Friday, and more parts are expected to be delivered soon. "And as of today, the eighth plane arrived and started being unloaded. Inshallah [God willing], we will be done by April 2020," Erdogan said. Then, he said the Turkish government would "go much further" with a view to setting up "joint production with Russia."Defense Ministry releases close-up footage of Russian S-400 missile system parts being unloaded from cargo planes upon arrival to be re-assembled in Turkeyhttps://t.co/e8swGwHwhG pic.twitter.com/xVnymoIfwK— DAILY SABAH (@DailySabah) July 12, 2019 The purchase of the S-400 systems has elicited threats of retaliation from the US, which has vowed to cut Turkey, a fellow NATO member, off from sales of advanced weapons like the F-35, while also threatening sanctions (last year, Trump terminated a preferential trade agreement with Turkey in the spat over the S-400). If Turkey continues to cooperate with Russia on things like arms purchases, expect Washington to impose sanctions and tariffs as Turkey tests the future of NATO.
This Arms Deal Could Trigger A New "Cold War" --The long-awaited, and feared, delivery of Russian S-400 missile systems to Turkey has started.In spite of US and European warnings that Ankara should reconsider the Russian arms deal, to prevent economic and possibly military sanctions, Turkish president Erdogan has put his foot down. At a Turkish airbase next to Ankara, the Turkish army has received a first batch of S-400 parts. Turkey’s Ministry of Defense has stated. The coming days new deliveries are expected, threatening not only a possible more hawkish military stance by Turkey in Syria, but increasing risks in the East Med. as a whole. Ankara also needs to prepare for severe US sanctions, which could include barring Turkey, as a NATO member, from the US F-35 stealth fighter program and banning its defence firms from the United States. Erdogan’s official reaction until now has always been that the S400s are necessary for the country’s security. Official plans indicate that the S400s will be deployed next to Syrian border, and around Ankara. The coming days a vessel will bring around 100 missiles to Turkey from Russia. And during the next two months, the Turkish military will receive training in Russia. The whole development is causing a severe crisis within NATO, and has put the EU on edge. The ongoing Russian-Turkish military cooperation is worrying, as Turkey is the 2nd largest NATO member in terms of armed forces. The Turkish military is also involved in a troop build-up on the Syrian border in preparation for a possible incursion against U.S.-backed Kurdish militants, Habertürk news reported. The East Med region has been already warned by the growing assertiveness and military power projections in and around Cyprus with regards to offshore drilling operations. With the East Med slowly becoming a major conflict zone, the Russian S-400s could not have come at a more difficult moment. With offshore gas operations off Egypt, Israel and Cyprus being threatened by an ever more hawkish Turkish president Tayyip Erdogan, a military conflict for energy access is already brewing. Even after strong warning signals by Brussels and Washington, Ankara’s maritime forces have set sail and are in contested waters. EC President Donald Tusk has warned that “its continued escalation (Turkey) and challenge to the sovereignty of our Member State Cyprus will inevitably lead the EU to respond in full solidarity”. Brussels already has decided to suspend negotiations on the Comprehensive Air Transport Agreement and agrees not to hold further meetings of the high-level dialogues for the time being. Ankara is confronted by growing involvement of Washington, after the latter has agreed to the so-called East Med Act, which will allow the US to fully support the trilateral partnership of Israel, Greece and Cyprus. It opens also the door for a full US lifting of its long-standing arms embargo on Cyprus.
Secret locations of U.S. nuclear weapons in Europe accidentally included in report from NATO parliament A recently released — and subsequently deleted — document published by a NATO-affiliated body has sparked headlines in Europe with an apparent confirmation of a long-held open secret: U.S. nuclear weapons are being stored in Belgium, Germany, Italy, the Netherlands and Turkey.A version of the document, titled “A new era for nuclear deterrence? Modernisation, arms control and allied nuclear forces,” was published in April. Written by a Canadian senator for the Defense and Security Committee of the NATO Parliamentary Assembly, the report assessed the future of the organization’s nuclear deterrence policy.But what would make news months later is a passing reference that appeared to reveal the location of roughly 150 U.S. nuclear weapons being stored in Europe.According to a copy of the document published Tuesday by Belgian newspaper De Morgen, a section on the nuclear arsenal read: “These bombs are stored at six US and European bases — Kleine Brogel in Belgium, Büchel in Germany, Aviano and Ghedi-Torre in Italy, Volkel in The Netherlands, and Incirlik in Turkey.” The document does not attribute this information to any source. Last week, a final version of the report was published online, and it omits the specific reference to where bombs are stored. Instead, the report refers vaguely to aircraft that could carry nuclear weapons.“The European Allies often cited as operating such aircraft are Belgium, Germany, Italy, The Netherlands, and Turkey,” the document said, with a footnote citing a 2018 report by the Nuclear Threat Initiative, a U.S. nongovernmental organization. Sen. Joseph Day, the author of the report, wrote in an email that the first version of the report was only a draft and that changes may be made to the report until it is dealt with by the NATO Parliamentary Assembly in November. “All information used in this report is open source material,” he wrote. As a rule, neither the United States nor its European partners discuss the location of Washington’s nuclear weapons on the continent. “We do not comment on the details of NATO’s nuclear posture,” said a NATO official, speaking on the condition of anonymity in line with the organization’s rules for talking to the media. “This is not an official NATO document,” the official added, noting that it was written by members of the NATO Parliamentary Assembly.
German Defence Minister to become EU Commission president - For the first time since 1958, a German politician will occupy the most powerful office in the European Union (EU). Christian Democratic Union (CDU) politician Ursula von der Leyen will succeed Jean-Claude Juncker as president of the EU Commission. The former German Defence Minister was elected with a slim majority by the European Parliament on Tuesday evening. Requiring 374 votes, half of the 750 deputies, von der Leyen secured 383 votes. The election was preceded by weeks of conflicts, deals and backroom manoeuvres. The EU Council, the body which represents all EU heads of government, took three summits and several all-night meetings before reaching an agreement. But the deal by no means guaranteed a majority in the European Parliament. Von der Leyen engaged in two weeks of intensive lobbying to cobble together a majority. She was supported by an entire team and promised everyone what they wanted to hear. Her candidacy speech, delivered in German, French and English to the deputies on Tuesday morning, sounded as though it had been scripted by an advertising agency. She emphasised the fact that she is a woman and pledged to occupy half of all Commission posts with women. She declared her support for environmental protection as if she were addressing one of the mass demonstrations organised by Fridays for Future. She also promised an improved minimum wage and better prospects for young people. She expressed her sorrow at the 17,000 deaths in the Mediterranean and vowed to strengthen the European border protection agency Frontex more rapidly than previously planned. She portrayed herself as a fervent European who was born in Brussels and only realised that she was German at the age of 13. The speech was directed above all at Green and Social Democratic deputies so that they could vote for her without being completely discredited in the eyes of their supporters. It worked. In the end, the conservative and liberal party groups, along with two thirds of the social democrats, voted for von der Leyen.
Von Der Leyen’s Election Is a Big Moment for Europe It's good news for Europe because Ursula von der Leyen is a genuine, dyed-in-the-wool European. And it's good for Germany because as defense minister, von der Leyen was simply in the wrong office. Europe suits her much better. Her story could even inspire more people to identify with the EU. It's an added bonus that von der Leyen will form one half of a Franco-German duo at the heart of the EU, with Christine Lagarde as the new head of the European Central Bank making up the other half. Von der Leyen won Tuesday's election by a narrow margin of only nine votes. She may have drawn support from Hungarian parliamentarians loyal to that country's authoritarian leader, Viktor Orbán. Staunch pro-Europeans like the Greens or the aforementioned members of the SPD, however, denied her their votes. Does that make von der Leyen a worse president? Or worse, a president in debt to Orbán? No. It would be intellectually lazy for those who didn't vote for von der Leyen to complain that she wasn't their choice. What's important is what von der Leyen says -- and what she does.
A Third Of All European IG Bonds Have Negative Yields - With much fanfare, and an astronomical (literally) dose of clickbait, Bloomberg leads off today with an article about "The Black Hole Engulfing the World's Bond Markets"... ... which beyond the tantalizing headline says little that has not been already covered for years before, as well as recently, namely the $13+ trillion in negative yielding government bonds thanks to catastrophic central bank policies. Worse, what the article should have been focusing on instead, is the truly noteworthy fact that as a result this glut of negative yielding sovereign paper, there are now hundreds of billions in investment grade corporate bonds that have a subzero yield, and - far more shockingly -there are now at least 14 "high" yield issuers (i.e. junk bonds), that also have a yield below 0%, to wit: […] In other words, instead of focusing on the "black hole" of sovereign yields, which has been widely discussed for years ever since the ECB took rates below zero in what will one day been seen as the beginning of the end of central banking , what Bloomberg should have been looking at is the impact falling rates have had on investment grade corporate bond yields (mostly in Europe,for now), dragging these towards all-time lows, some well below zero. And, as Deutsche Bank notes, duration extension has been one way to reach for non-negative yield, leading to flattening of corporate yield (and spread) curves. Still, as the German bank notes, "one can run but one cannot hide", and as a result, a third of all European investment grade bonds and a third of 1-2y European BB-rated (i.e. junk) bonds now yield less than zero.
Former top executives at France's largest communication company could face jail time after 35 employees killed themselves - The former lead executives of France's largest telecommunication company are facing the end of a two-month trial in which they stand accused of creating a hostile work environment thought to have helped drive dozens of employees into deep depression and, in some cases, to take their own lives.A report from The New York Times says at least 35 employees of France Télécom killed themselves in the period after the company enacted an aggressive plan to eliminate 22,000 jobs in 2007, with many more said to develop depression.Defendants include France Télécom's former CEO Didier Lombard, former human-resources director Olivier Barberot, and former deputy executive director Louis-Pierre Wenes. Each of the seven defendants is facing a charge of moral harassment. If found guilty, they could face up to a year in prison and a fine of 15,000 euros, or $16,790, according to the Associated Press.The company, which rebranded as Orange in 2013, is also on trial and could be forced to pay civil damages to any workers found to be harmed by the company's practices.The trial comes more than a decade after the company decided to cut 22,000 workers from its workforce of 130,000. French officials ordered France Télécom to go private in 2003 as the company struggled to keep customers from abandoning landlines for mobile phones. Two years later, the company had taken on more than $50 billion in debt, forcing executives to find new ways to cut costs. Prosecutors say the executives intentionally created a toxic work culture by harassing employees, intentionally forcing them into the wrong roles and keeping them serially overworked. On a recording from 2007, Lombard, the former chief executive, said he would reach the company's quota of job cuts "by the window or by the door," The Times reports.
Italy seizes 'combat-ready' missile in raids on far right - Anti-terrorism police in northern Italy have seized an air-to-air missile and other sophisticated weapons during raids on far-right extremist groups. Three people were arrested, two of them near Forli airport. Neo-Nazi propaganda was also seized. The raids were part of an investigation into Italian far-right involvement in the conflict in eastern Ukraine, the Turin police said. The missile originated from the Qatari armed forces, the police said. The Turin special police force, called Digos, led the operations, assisted by police in Milan, Varese, Forli and Novara. Italian media named those arrested as Fabio Del Bergiolo, 50, an Italian ex-customs officer and far-right Forza Nuova party activist; Alessandro Monti, 42, a Swiss national; and Fabio Bernardi, 51, also Italian. Initially, on 15 July, the police said the arrests were part of an investigation, started about a year ago, into far-right groups "who have fought in Ukraine's Donbass region against the separatists". But the latest police statement did not mention groups fighting the pro-Russian separatists, referring only to an investigation into Italian extremists who had "taken part in the armed conflict in Ukraine's Donbass region". The police did not make it clear which side the Italians were on in this case. The missile appears to be a French-made Matra Super 530 F. "During the operation, an air-to-air missile in perfect working order and used by the Qatari army was seized," police said in a statement. Separately, a court in Genoa jailed three men on 3 July who were found guilty of fighting alongside the Russian-backed separatists, who control a large swathe of Ukraine's Donetsk and Luhansk regions.
Opponents Of Italy's Salvini Accuse Him Of Being 'Puppet Of Putin' --Matteo Salvini's hope for a "Trump-style revolution" In Italy has not only rankled his center-left opponents, but also his nominal allies, coalition allies - the populist League party - who have joined in an investigation into whether Salvini and his political allies received broke campaign finance laws by receiving money from the Russia government, Bloomberg reports. The scandal over the Russian financing has dogged Salvini - who is not only the leader of the League Party, but also the de facto ruler of Italy, after a close ally, Gianluca Savoini, was caught soliciting illegal party funding from three Russians nationals. The story has dominated the Italian press for the past week, and Salvini has tried - unsuccessfully - to distance himself from the political scandal.Initially, Salvini said he didn't know how Savoini, a close advisor to the Interior Minister, ended up at a fundraiser where Russians had sought to funnel money to Salvini's party.Savoini, a one-time Salvini spokesman, attended a July 4 dinner with Russian President Vladimir Putin in Rome, and the deputy premier has said he doesn’t know how his associate came to be there. On Sunday, however, Prime Minister Giuseppe Conte undermined that account, saying in a statement that Savoini had in fact been invited by Salvini’s office.With western leaders struggling to come to grips with the scope of Russian attempts to undermine their democracies, the...report suggests that the most powerful home-grown opponent of the European Union may have been colluding with the Kremlin. Now, Salvini and Trump have one more thing in common: Not only are they both reviled by leftists in their respective countries, but Salvini's opponents are now blaming his electoral triumph on interference from the Russians. Like Trump, Salvini has broken ranks with other western leaders, but he's openly advocated for the removal of UN sanctions against Russia. What's an even worse look for Salvini, his party has been pushing to ease sanctions on Russia. He has also rejected his fellow Western European countries' findings that Putin's 'meddling is a 'malign influence.'
Brexiteer Jeremy Hunt supporter Liam Fox blasts Boris Johnson's ‘illegal’ plan for an early mission to the US to strike a trade deal with Donald Trump - Boris Johnson is facing a backlash over claims he wants to travel to the US and strike a trade deal within weeks of becoming Prime Minister. The Tory front runner is believed to be keen to rebuild relations with Donald Trump and secure an agreement that could boost the UK economy post-Brexit. Allies said he viewed a UK-US trade deal as 'key' to securing Britain's future post Brexit. However, Trade Secretary Liam Fox, who is supporting Jeremy Hunt for the Tory leadership, cast doubt on the prospects this morning - warning it is illegal to negotiate a pact before the UK leaves the EU. He also cautioned it is very unlikely that a Transatlantic trade deal will be ratified by Congress in a pre-election year. +4 Mr Johnson has based his pitch for Downing Street on a promise to leave the EU by October 31, 'deal or no deal'. However, abruptly cutting ties with the EU could make the need for a closer alliance with America more pressing. A senior source told The Times: 'The key to the whole thing is the US. 'If we get a trade deal with America we will be very quickly in the market for other deals. 'It encourages others to believe that we mean business.' Trade Secretary Dr Fox poured cold water in the idea of an early deal. Asked about Mr Johnson's plan, he told BBC Radio 4's Today programme: 'We can't negotiate anything with the US until after we have left the European Union. It would be in breach of European law for us to do that.'
Hunt and Johnson: the backstop is dead and can’t be in any EU deal - Boris Johnson and Jeremy Hunt have declared the Northern Ireland backstop “dead” and promised to throw it out of any deal they negotiate with the EU, in comments that significantly harden their Brexit positions. The Tory leadership rivals both ruled out trying to tweak the backstop, which critics said could trap the UK indefinitely in a customs union with the EU.They said it would not feature in any deal with the EU, saying it was no good to have a time limit on it or a way of the UK exiting it unilaterally – even though Eurosceptics had previously indicated they could vote for such compromises.Pressed in a Sun and Talk Radio debate on whether he would seek a time limit to the backstop, Johnson said: “The answer is no. The problem is really fundamental. It needs to come out.” He said his policy would be “no to time limits or unilateral escape hatches or these kind of elaborate devices, glosses, codicils and so on which you could apply to the backstop”.“I think the problem is very fundamental. It has been devised by this country as an instrument of our own incarceration in the single market and customs union. It needs to come out,” he added. Hunt agreed, saying “the backstop, as it is, is dead”, adding that there had to be a new way. “I don’t think tweaking it with a time limit will do the trick,” he said. “If we are going to get a deal we must have an absolute cast-iron commitment to the Republic of Ireland that we will not have border infrastructure. So what they liked in the backstop was the fact it guaranteed that. If we are going to solve that we need to find another way of guaranteeing that same thing.” The EU has repeatedly ruled out reopening Theresa May’s withdrawal agreement to revisit the backstop, which Brussels regards as a way of protecting the Republic of Ireland and Northern Ireland from a return to a hard border between them. However, both leadership candidates appeared categorical on Monday that they would throw it out of the deal entirely – or proceed to a no-dealBrexit. Hunt and Johnson endorsed the concept of “alternative arrangements” such as customs checks away from the border or trusted trader schemes.
Conservative leadership race: May withdrawal agreement dead, Stephen Barclay tells Brussels The Times. Brussels is preparing for “brutal” talks with the next prime minister after the Brexit secretary told Michel Barnier five times during a bad-tempered meeting that the withdrawal agreement was dead. Stephen Barclay left Mr Barnier, the EU’s lead negotiator, astonished and dismayed in a “confrontational” exchange last Tuesday.“He told Barnier that the withdrawal agreement was dead — not once but five times,” a senior EU diplomat said. “If this is what is coming then we will be heading for no deal very quickly.” Boris Johnson and Jeremy Hunt have both said that the withdrawal agreement, which was blocked in the House of Commons three times, must be renegotiated. The EU insists that the deal cannot be reopened. Mr Barclay held the private talks a week ago without the usual team of British negotiators and, according to various sources, took an approach described as brutal, bullying, bad tempered and confrontational.One senior diplomat close to the negotiations said it was the most hostile encounter in three years since the Brexit referendum, adding that Mr Barclay had seemed to “tear up the previously constructive approach taken by Theresa May”.“It worked like a megaphone but it has hardened attitudes,” the diplomat said. “It is not the smart thing to do if a new prime minister is serious about getting a withdrawal agreement across the line. I guess Barclay is applying for a job in the Johnson cabinet.”EU officials do not expect Brexit negotiations to resume in earnest until after the summer, following what could be a critical G7 summit in Biarritz between August 24 and 26.
BREXTINCTION Boris Johnson and Jeremy Hunt rule out snap election before Brexit because it would destroy Tories -THE Tories will collapse if Britain ends up holding a snap election before Brexit, Boris Johnson and Jeremy Hunt both warned today. Both candidates to be PM ruled out calling an early General Election as they clashed for the last time at a debate hosted by The Sun and talkRADIO. It came as the two Tory rivals appeared to kiss and make up after a bruising campaign, cracking a string of gags in front of an audience of Sun readers at our London HQ.In a revealing clash:
- The pair disagreed over whether to cut the number of immigrants to Britain
- They both hit out at Donald Trump for tweeting that four non-white US politicians should leave the country
- BoJo refused to reveal if he’ll bring girlfriend Carrie to No10 with him
- He insisted only a true believer can deliver Brexit and convince the EU he’s serious
- Mr Hunt appeared to offer Mr Johnson the job of Chancellor
- Both candidates committed to including at least one woman in their top team
- The rivals accused Jeremy Corbyn of being personally anti-Semitic
- They agreed to go for a pint together when the bruising leadership election ends
The candidates were asked nine questions by Sun readers in a debate broadcast live on this website and talkRADIO.Asked by host Tom Newton Dunn if he’d rule out a snap election, Mr Johnson replied: “Absolutely.”He added: "I think it would be the height of folly. I think the people of this country are utterly fed up with politicians coming back to them offering referendums or elections.”Mr Hunt tore into his rival for rigidly sticking to the October 31 Brexit deadline - warning it could backfire spectacularly.
Brexit: they catch up eventually - I sometimes think I could go on holiday for six months without writing a thing, and I'd still be ahead of the game – by a factor of some years, in the case of some issues such as the effect of a no-deal Brexit on F1 racing.So it comes to pass that the mighty, omniscient Robert Peston has finally discovered that, with nothing between the Tory leadership candidates, we are heading down the path towards a no-deal Brexit.As far as I'm concerned, it was weeks ago that it was blindingly obvious that neither Alexander Boris de Pfeffel Johnson nor Jeremy Hunt had the first idea of how to manage Brexit, both residing in the fiction that they could abandon the backstop and renegotiate the Withdrawal Agreement with the EU. But then, when the likes of Peston start noticing the blindingly obvious, it simply confirms their brilliance, allowing us plebs to stand back in wonderment at their skill and perspicacity which allows them to divine that which has been known for weeks to everyone with a brain. Of course, such brilliant leaders of men will never, ever realise how far behind the curve they are. So deeply rooted in their bubble, listening only to their adoring claque, nothing exists until the likes of Peston have invented it and brought it before the great unwashed. That they are "brilliant" is a given, and we know this because they keep telling us, as in the tail-end of the Telegraph piece which enjoins us to "sign up for our brilliant subscriber newsletter". But there you go. Robert Peston has told us that a no-deal is now "probable". With the public now exposed to such brilliance, this affirms that our intellectual masters have got there – eventually. Give them another three years and they might have worked out what non-tariff barriers mean, and how they impact on third country trading arrangements. Some of them might even begin to understand what "third country" actually means in relation to the EU.
Boris Johnson's New Plan Would Sideline Parliament And Guarantee A 'No Deal' Brexit - The British pound tumbled to its weakest level in more than two years on Tuesday as fears of a 'no deal' Brexit continued to weigh on GBP, which has been steadily sinking during the Tory leadership contest that many expect will send Boris Johnson, a committed Brexiteer, to No. 10 Downing Street. And on Tuesday, Johnson - who said last night that he wouldn't accept any time limits (both he and his rival Jeremy Hunt ruled out such a measure), unilateral escape hatches or any other kind of elaborate device to make the Irish Backstop more palatable - gave investors one more reason to worry: Sky News reports, citing anonymous sources from within Johnson's campaign, that the candidate could delay a customary speech by the Queen that marks the beginning of the Parliamentary session - this would render MPs unavailable on Oct. 31, the day the UK is set to leave the EU. Though Johnson's rival Jeremy Hunt has said he's open to another brief delay, Johnson's position is that on Halloween, Brexit will finally mean Brexit. There have been some negotiations to work out an alternative to Theresa May's withdrawal agreement, but thanks to the inevitability of dealing with the hated Irish Backstop - which conservatives argue would effectively allow Europe to annex Northern Ireland - talks have once again been fraught.
House of Lords passes amendment to help prevent no-deal Brexit - A no-deal showdown is expected in the House of Commons on Thursday after peers passed stronger protections against the prospect of a Boris Johnson administration attempting to prorogue parliament to force an exit from the EU in October. The House of Lords passed an amendment by a majority of 103 on Wednesday that would ensure parliament would sit in the weeks leading up to the 31 October deadline. Fears have been growing that Johnson could prorogue or dissolve parliament in order to allow the deadline to pass without MPs interfering. Thirteen Tory peers rebelled against the government to vote for the amendment from the crossbench peer David Anderson, a former independent reviewer of terror legislation, with support from Labour and the Lib Dems. The amendment to the Northern Ireland (executive formation) bill builds on an amendment passed in the Commons last week, when MPs backed a proposal from the pro-European Tory Dominic Grieve calling for fortnightly reports from the government on the efforts to restore the power-sharing executive. The new Lords amendment would ensure these have to be debated in the weeks before the Brexit deadline. The bill could theoretically make it illegal for the government to prorogue parliament in the autumn if the power-sharing executive in Northern Ireland has not been restored. The Commons vote is likely to be extremely tight on Thursday. Grieve’s amendment passed by a single vote last week, after a government whip forgot to vote. Grieve lost votes on other related amendments.
Michel Barnier: Theresa May ‘never’ threatened EU with no-deal Brexit - British Prime Minister Theresa May "never" attempted to threaten the EU with a no-deal Brexit during divorce negotiations, the EU's chief Brexit negotiator Michel Barnier told the BBC's Panorama program. Britain will have to "face the consequences" if it can't agree to May's Withdrawal Agreement, Barnier said in the interview, which will be broadcast in full this evening but was trailed on the BBC's Today program Thursday morning. Barnier said May's deal, which has been rejected three times by the U.K. parliament, is still the "only way to leave the EU in an orderly manner." Responding to Barnier's comments in a separate interview on the Today program Thursday morning, Jeremy Hunt, the U.K. foreign secretary and a contender to replace May as the head of the Conservative Party and Britain's next prime minister, said no-deal Brexit is a credible threat. Hunt added that he shares Barnier's frustration with the Brexit process, but a renegotiation of May's deal was necessary to get through the impasse. Also speaking to the Today program Thursday morning, Nathalie Loiseau, a member of the European Parliament from France and the country's former Europe minister, echoed Barnier's comments. Asked whether France would allow another Brexit extension, Loiseau said that would require "a huge political change" in the U.K. "It could be a People's Vote, it could be general elections. But if it's just about 'let's think about the deal which is on the table for months' ... it's the only possible deal." Loiseau added: "It's about time that you all make a choice. I think we have been extremely patient ... Please tell us, do you want to stay or do you want to leave? ... If you want to leave, you have two options, you leave with the deal on the table or you leave with no deal. Both have consequences. It is your choice to make. Please take a decision."
EU expected to reject outright Johnson and Hunt’s backstop plan - Boris Johnson and Jeremy Hunt’s Brexit plan to axe the Irish border backstop from the withdrawal agreement will be rejected outright by the European Union, EU sources have said. Informed sources say it is doomed to failure and if the next prime minister goes to Brussels with such a proposal, he will be told in “no uncertain terms” that it amounts to a declaration of no deal. Brussels had already rebuffed such a plan when the Brexit secretary, Steve Barclay, who is part of Johnson’s campaign, met the EU’s chief Brexit negotiator, Michel Barnier, last week. In what was seen as “spinning for a Boris plan”, Barclay told Barnier five times during the meeting that the backstop was dead. Sources say he told Barnier they wanted a series of mini-deals and alternative arrangements for the Irish border. He was told that was Brexit fantasy and a non-starter, and that the “mini-deals” outlined in EU contingency plans were temporary and covered only the “bare bones” such as aviation, mobile phone roaming and haulier driving licences. They did not include the major issues such as trade or the Irish border. The EU is watching developments in the UK very closely and has already prepared responses on a range of possibilities including a call for the EU to endorse the so-called “Brady amendment”, which was passed in the House of Commons in January. It called for the backstop, or the mechanism by which a hard border will be avoided on the island of Ireland in case there is no post-Brexit free trade agreement, to be scrapped. This will also be rejected. Johnson and Hunt have declared the Northern Ireland backstop “dead” and promised to throw it out of any deal they negotiate with the EU, in comments that significantly harden their Brexit positions. While their words may be the source of alarm, the Irish fully expected this and see it as campaign spin. Leo Varadkar, the taoiseach, said in a radio interview over the weekend that he would give whoever became prime minister “a fair hearing” but warned that the victor would be in for a “reality check” when he got the keys to Downing Street..
Dominic Grieve says MPs might not be able to block no-deal Brexit – but they can topple the government Former attorney general Dominic Grieve has warned that while MPs may not be able to block a no-deal Brexit, they could topple a Tory Government trying to take the UK out of the EU without a deal. The Conservative MP acknowledged that blocking a no-deal Brexit is “technically” difficult but sounded a warning to both Boris Johnson and Jeremy Hunt that whoever inherits Number 10 will face a significant rebellion in the Tory Party. Both of the candidates for party leadership has said they are prepared to leave the UK without a deal, with front runner Mr Johnson hardening his position during a debate on Monday night, warning that he wants major changes to the withdrawal agreement. This has been ruled out on numerous occasions by European officials. But Mr Grieve warned that any attempts to give up on negotiations and pursue a no-deal exit would prompt a number of senior Tory MPs to vote against their own Government in a confidence motion, that could mean the end of their time in office. Mr Grieve said that blocking a no-deal Brexit in Parliament is “technically” difficult but added that: “if a government persists in trying to carry out a no-deal Brexit, I think that administration is going to fall.” He told the BBC Radio 4 Today Programme that a purge of pro-EU ministers from the cabinet under a new leader will further boost the ranks of those prepared to rebel. “By the end of next week there are going to be more Conservatives who have indicated very clearly that no-deal is unacceptable and I notice that many of them will no longer be on the front bench,” he said.
“The Ten Brexit Questions No-One’s Giving a Straight Answer To” - naked capitalism - Yves here. It is becoming more and more difficult to fathom what is happening in the UK. Boris Johnson looks certain to become Prime Minister. Even though he is fabulously unprincipled and thus could conceivably do a volte face on Brexit, as Chris Grey pointed out, he appears to be lashing himself to the mast of a no-deal Brexit. The evening news stories report that Johnson plans to ramp up no deal planning. From The Times: Boris Johnson will turn the government’s Brexit department into a ministry focused solely on no-deal planning after his expected victory in the Tory leadership race next week. Under proposals being worked on by Mr Johnson’s team, ministerial responsibility for Brexit talks with Brussels will transfer from the Department for Exiting the European Union to the Cabinet Office. The Brexit department will be charged with increasing preparations for a no-deal departure, including a mass public awareness campaign. While some have suggested that the new prime minister will make an early trip to Brussels or other European capitals, allies say there is little appetite to expose Mr Johnson to hostile briefings from EU bosses. Stephen Barclay didn’t just tell Barnier that the UK regarded the Withdrawal Agreement as off; he was pointlessly rude about it. And while this may not come to pass, the Ultras are trying to install true believers in key positions. From The Sun: Senior Tory Eurosceptics are pushing Boris Johnson to make Iain Duncan-Smith his deputy PM to ensure he doesn’t waver on his Brexit pledges. The Tory leadership frontrunner has begun drawing up his Cabinet in tight secrecy, with only chief of staff Sir Eddie Lister knowing his full thinking. If Boris gets into No10 next week as most expect, it has emerged that as many as 12 Cabinet ministers will resign or be fired by him – the biggest clear out in nine years. Moreover, a BBC interview of Michel Barnier in which the EU negotiator said Theresa May never threatened a no-deal Brexit has been seized on by the hard-core Brexiteers as proof that all they need to do is play that card and they will prevail. Barnier was explicit that May didn’t go down that path because the EU would have ignored it. They “knew from the very beginning that we’ve never been impressed by such a threat. It’s not useful to use it.”
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