Trump Slams Fed's "Misguided" Tightening, Warns "Far More Costly" To Wait To Cut Rates - Members of the FOMC might be in their "quiet period" ahead of the July Fed meeting, where the board is expected to cut interest rates by at least 25 bp, but President Trump's attacks on the central bank continue. In a series of tweets, Trump combines his criticisms of the central bank's "misguided" policy with accusations that other countries are manipulating their currencies and Trump warned that it would be "Far more costly" for the Fed to wait to cut interest rates should a downturn take place, than to cut now and prevent a downturn by being proactive.With almost no inflation, our Country is needlessly being forced to pay a MUCH higher interest rate than other countries only because of a very misguided Federal Reserve. In addition, Quantitative Tightening is continuing, making it harder for our Country to compete. As good.... ....as we have done, it could have been soooo much better. Interest rate costs should have been much lower, & GDP & our Country’s wealth accumulation much higher. Such a waste of time & money. Also, very unfair that other countries manipulate their currencies and pump money in! It is far more costly for the Federal Reserve to cut deeper if the economy actually does, in the future, turn down! Very inexpensive, in fact productive, to move now. The Fed raised & tightened far too much & too fast. In other words, they missed it (Big!). Don’t miss it again! — Donald J. Trump (@realDonaldTrump) July 22, 2019 In other words, Trump has basically strung together all of his prior criticisms of the Fed to remind policy makers with just over a week to go before their next policy meeting that he's expecting a cut.
Mixed signals on rate cut prompts Trump to demand the Fed enlist in US trade war against rivals - The US Federal Reserve has landed itself in controversy and confusion over how much it will cut interest rates at the meeting of its Federal Open Market Committee (FOMC) at the end of this month. The markets had priced in a rate cut of 0.25 percent after Fed Chairman Jerome Powell indicated in testimony to Congress earlier this month that the central bank was moving to a more “accommodative” policy in light of concerns over global growth, the impact of the US trade war against China, low US inflation and a fall in business investment. But in a speech on Thursday, Federal Reserve Bank of New York President John Williams set the financial hares running when he seemed to indicate that the rate-cutting could go beyond expectations. Speaking to the annual meeting of the Central Bank Research Association, he likened early monetary policy easing to vaccination for children to guard against future illnesses. “It’s better to deal with the short-term pain of a shot than take the risk that they’ll contract a disease later on,” he said. In a clear pointer to bigger-than-expected rate cuts, he said policymakers should not keep their “powder dry” and ease monetary policy only after there was more hard evidence of a downturn. “When you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first signs of economic distress,” he declared. There was a significant market reaction to Williams’ remarks. The yield on US Treasury bonds fell and investors priced in a 66 percent chance of a rate cut of 0.5 percentage points (50 basis points) at the end of the month, compared to a 40 percent chance before he spoke. The New York Fed then decided to intervene, with a spokesman issuing a statement cautioning against reading too much into its president’s remarks. “This was an academic speech on 20 years of research. It was not about potential policy actions at the upcoming FOMC meeting,” the statement said. Academic speech or not, Williams and others would have known full well the impact of his remarks just days before the cut-off point for public comment by Fed officials in the lead-up to the FOMC meeting. President Trump intervened, as could be expected, given that he has issued strident demands that the Fed cut rates and boost Wall Street by a further 10,000 points on the Dow. In an initial tweet, issued after the intervention by the New York Fed, he said: “I like New York Fed President John Williams’ first statement much better than his second. His first statement is 100 percent correct in that the Fed ‘raised’ far too fast and too early.” In a later tweet, he added a new component to his attack on the Fed, indicating that it should become more closely aligned with the global economic warfare being waged by the US administration.
Is Politics Getting to the Fed? - Robert Barro - From the early 1980s until the start of the financial crisis in September 2008, the US Federal Reserve seemed to have a coherent process for adjusting its main short-term interest rate, the federal funds rate. Its policy had three key components: the nominal interest rate would rise by more than the rate of inflation; it would increase in response to a strengthening of the real economy; and it would tend toward a long-term normal value. Accordingly, one could infer the normal rate from the average federal funds rate over time. Between January 1986 and August 2008, it was 4.9%, and the average inflation rate was 2.5% (based on the deflator for personal consumption expenditure), meaning that the average real rate was 2.4%. The long-term normal real rate can be regarded as an emergent property of the real economy. From an investment and saving standpoint, economic equilibrium balances the benefit from a low safe real interest rate (which provides low-cost credit for investors) against the benefit from a high real rate (which implies higher returns for savers). In the Great Recession, the federal funds rate dropped precipitously, reaching essentially zero by the end of 2008. That was appropriate, owing to the depth of the crisis. But what few expected was that the federal funds rate would remain close to zero for so long, through the end of then-Fed Chair Ben Bernanke’s term in January 2014 and beyond. The Fed’s prolonged low-interest-rate policy, which was supplemented by quantitative easing (QE), seems misguided, considering that the economy had long since recovered, at least in terms of the unemployment rate. Throughout the period up to late 2016, the negative real federal funds rate was well below its own long-term normal. It is hard to view today’s nominal federal funds rate of 2.4% as high. With an inflation rate of 1.7%, the real federal funds rate is only 0.7%. And yet the Fed’s “high”-interest-rate policy was fiercely attacked by Wall Street, which regarded it as a mistake, and as the cause of the weak stock market from the end of 2018 through early 2019. Many financial commentators argued that the Fed should pause its monetary-policy “normalization” and eventually shift to interest-rate cuts. That view is not crazy if you are focused solely on boosting the stock market. On average, interest-rate cuts do tend to stimulate the stock market by making real returns on bonds less competitive. But that does not mean it is good economic policy always to be cutting rates, as US President Donald Trump seems to think.
Presidential Candidate Tulsi Gabbard Co-Sponsors Audit The Fed Bill - Representative Thomas Massie (R-KY) told Luke Rudkowski of "We Are Change," a libertarian media organization, that Democratic presidential candidate Tulsi Gabbard has just signed on as a co-sponsor of Audit the Fed bill, officially known as H.R.24 The Federal Reserve Transparency Act of 2019. The bill authorizes the General Accountability Office to perform a full audit of the Fed's conduct of monetary policy, including the Fed's mysterious dealings with Wall Street, central banks and governments.During the interview, Massie said the latest development in attempting to audit the Federal Reserve is that Gabbard signed on as co-sponsor. He believes the topic will "get some airtime" in the upcoming presidential debates. He said there are four Democratic co-sponsors and 80 Republican co-sponsors for the bill; it was recently passed in the House of Representatives as it heads to the Senate. Massie said:"We have passed it in the House but have never passed it in the Senate. Because of a lot of these people in the House of Representatives who vote for it and support it in the House go to the Senate and decide it's not such a good idea."Rudkowski then tells Massie about interesting parallels between some presidential candidates (Gabbard and Bernie Sanders), who have an anti-interventionists view along with being critical of the Federal Reserve. Massie responds by saying, "Well if you're just trying to sorta tie the anti-war people to the Federal Reserve. I think the closest connection is the Federal Reserve enables the endless Wars that are being funded by controlling the value of our currency and without the massive borrowing and printing of money and controlling of interest rates - we wouldn't be able to sustain a permanent state of war."
Column- Twin-speed U.S. economy poses dilemma for the Fed (Reuters) - The U.S. economy is currently split between a fast-growing consumer sector and a much slower-growing business sector, with the contrasting speeds confirmed by the latest figures for second quarter gross domestic product. Personal consumer expenditures adjusted for inflation increased at an annualised rate of 4.3% in the three months from April to July, according to advance estimates published by the Bureau of Economic Analysis on Friday. Real consumer spending growth accelerated from just 1.1% in the previous three months and was the fastest since the end of 2017, with a broad-based pick-up in spending on durables, non-durables and services. By contrast, business investment in new structures, equipment and intellectual property shrank at an annualised rate of 0.6%, the worst performance since the first quarter of 2016. Final sales to private domestic purchasers, which excludes short-term volatility from foreign trade, inventories and government spending, and is the best measure of underlying momentum, accelerated to 3.2% from 1.6% in the first three months of the year. High levels of employment, wage growth, consumer confidence and rising share prices are supporting very brisk increases in consumer spending. But the trade conflict with China and concern about a future slowdown in growth, or even a recession, are holding back business investment. The gross domestic product estimates are consistent with a broad range of other indicators that show a twin-speed economy (https://tmsnrt.rs/2yh0wkE). Passenger transportation numbers have accelerated since the start of the year even as freight volumes have come close to stalling. Retail sales show strong and quickening growth while manufacturing output is stalling, purchasing managers’ surveys point to the most sluggish conditions since 2016, and construction activity is falling. The Federal Reserve’s policymaking Federal Open Market Committee is widely expected to reduce short-term interest rates when it meets next week. The case for an interest rate cut rests on the need to create a firebreak to prevent the current weakness in the business sector, manufacturing and construction from spreading to the much larger consumer sector and services.
Gundlach- Fed Will Be In Panic Mode When A Recession Hits - If the signs of a recession, like weakness in trucking volume and manufacturing PMIs, prove true, the Fed will be in panic mode, according to Jeffrey Gundlach. The economy will weaken, rates will go up and the Fed will have to “do something,” to protect against a “spiral” of higher rates feeding and slower growth.Gundlach is the founder and chief investment officer of Los Angeles-based DoubleLine Capital. He spoke to investors via a conference call at 4:15pm on July 23. The focus of his talk was DoubleLine’s fixed-income closed-end funds, DBL and DSL.Gundlach devoted most of the call to the positioning of DBL and DSL. I will focus on the last 15 minutes of the call, when he took questions from the attendees, with the focus on a possible recession and the direction of interest rates. Gundlach predicted a “high likelihood” of a recession before 2020 election. The leading economic indicators (LEIs) also point to a weakening economy. As rates rise, so will interest costs incurred by the government, which would translate to further weakness in the private sector. The underlying problem causing the spiral is the large and expanding federal deficit, according to Gundlach.“We’re starting out before the recession with a huge debt problem,” he said, “that will grow faster in a recession.”In response, Fed policy has become more “evolutionary,” he said. It has been talking about quantitative easing (QE) as a “normal” policy tool, instead of one whose use is restricted to crises. The Fed is softening people up, he said, so that if rates rise, it will do QE and then emulate the Bank of Japan and other central banks to take rates negative.A reason rates are so low is that the Fed is “hedging its bets,” Gundlach said. Rates will go up first as the economy weakens and be engineered down. This pre-emptive rate reduction could leave the Fed with nowhere to go, as a recession demands ways to stimulate growth. “There is a real risk of rising rates,” he said, which would slow economic growth and contribute to a more destructive recession. If a recession comes this year, the yield curve will steepen, he said. Indeed, that steepening has already started.
Who’s ready for decades of low or negative U.S. interest rates? - President Trump recently nominated Judy Shelton to the Federal Reserve Board of Governors. She is the U.S. director for the European Bank for Reconstruction and Development, which I had never heard of until her nomination. Shelton is a Republican and believes in the adoption of a gold standard. She currently believes in lowering interest rates, after spending the Obama years criticizing the Fed for lowering interest rates. You may wonder how a person can be in favor of a gold standard and also for lowering interest rates at the same time. I am wondering that, too. I think some folks had fun with Dr. Shelton’s Wikipedia page, because it says: “Before Trump became president, she was a longtime advocate for free trade, but after he became president, she supported his administration’s trade war with China.” We seem to have a case of someone being ideologically inconsistent in order to secure professional advancement. The slang for this is “selling out.” Or maybe she had an ideological transformation — maybe she really does believe in zero interest rate policy (ZIRP) and negative interest rate policy (NIRP) and a gold standard all at the same time. But that would be impossible. The confirmation hearings are going to be interesting. New breed of human Of course, failed Fed nominees Stephen Moore and Herman Cain also believed in hard money and soft money simultaneously. Where do these people come from? They didn’t exist a few years ago. Go back to the days of Thomas Hoenig. He was another champion of gold, but also a big-time interest rate hawk on the policy-setting Federal Open Market Committee (FOMC), back in 2010. Now that is someone who believes in hard money. Real interest rates are zero, and Trump thinks they are too high. I have been saying in The Daily Dirtnap for some time that Trump thinks Fed funds should be zero or negative, and he won’t stop criticizing the Fed until he gets what he wants. He might have to replace the Fed chairman in the process. Judy Shelton and Christopher Waller (decidedly a soft money advocate) are both chairperson material. My guess is that it would be Richard Clarida who has the resume for it and also has been very malleable to Trumponomics. This goes back to what I wrote about two weeks ago: Trump is an unstoppable force that is going to change the face of macroeconomics for decades. I don’t believe in soft money. I believe in metallic monetary standards and persistently high interest rates. I really am curious as to the psychology of Shelton, Cain and the rest of them. Did they really change their minds? Or are they really that cynical? I suspect it is the latter.
A Decade of Low Interest Rates Is Changing Everything -- It’s hard to wrap your head around just how low U.S. interest and bond yields are—still are—a decade after the Great Recession ended. Year after year, prognosticators said that rates were bound to go back up soon: Just be ready. That exercise has proved to be like waiting for Godot. In 2018, Jamie Dimon, chief executive officer of JPMorgan Chase & Co., put Americans on alert to the likelihood of higher interest rates. He said the global benchmark for longer-term rates, the yield on a 10-year Treasury bond, could go above 5%. Right now it’s just a hair above 2%. Thirty-year mortgage rates are a fraction of long-run averages, and companies too are paying very little to borrow. All that cheap money has been helping the economy along. On the other side of the ledger, bank depositors are getting paid only a fraction of 1% on their savings. The longevity of low rates has upended long-standing assumptions about money and reshaped a generation of investors, traders, savers, and policymakers. The Federal Reserve has tried to push the U.S. into a higher-rate regime, raising rates nine times since 2015, when the key short-term rate was near zero. But now the central bank appears ready to reverse course and start cutting again when it meets at the end of July. “This is the new abnormal,” says David Kelly, chief global strategist at JPMorgan Asset Management, which oversees $1.8 trillion. “Normally when you are in this phase of an expansion, you have a rising inflation problem, a Federal Reserve overtightening to slow the economy, and businesses that can’t afford to borrow. None of that is true right now.” Investors are betting that a quarter-percentage-point rate cut is all but certain, according to prices in the futures market. Fed Chair Jerome Powell reinforced those views with remarks to Congress on July 10 and 11. He cited rising global risks, low inflation, and weakening business investment and manufacturing. Depressed U.S. rates come as other central banks, including the European Central Bank, have turned more dovish—even with their rates already set below zero.
Yield Curve Ominously Un-Inverts As Dollar Jumps Most In Over 4 Months (25 graphs) For the first time in 41 days, the US Treasury yield has un-inverted... Chinese stocks managed gains overnight (even as STAR IPOs tumbled on their second day)... European Stocks soared on the day with Germany leading the way... US equities spiked on China trade headlines... The buying program that hit when the China trade headlines printed, was the highest since July 10th's open (after Powell's prepared remarks prompted a panic-bid)... S&P spiked back above the 3,000 level... While tech stocks are at record highs, tech credit risk is anything but... Now where have we seen this before? Bonds and stocks remain in their own worlds... Treasury yields rose modestly on the day with the long-end underperforming... 10Y yields plunged on the dismal Richmond Fed data, but sellers re-emerged quickly... The yield curve (3m10Y) spiked almost 5bps today, surging back above 0 for the first time in 41 days... This is the ominous trigger as only when the curve un-inverts does the recession begin... The odds of a 50bps rate cut next week slipped to 17.5%... The debt ceiling 'kink' in the Bill curve has been erased... The Dollar rose for the 3rd day in a row - bouncing back from Fed's Williams lows - this is the biggest 3-day jump in the dollar in over 4 months... Cryptos were mixed today but only Bitcoin Cash is green on the week... But Bitcoin rebounded back above $10,000... Gold and Copper slipped on the day as the dollar rallied but Silver and Oil prices rallied further... Gold is holding up despite the dollar strength... Silver outperformed Gold for the seventh day in a row... Oil prices spiked back up to $57 ahead of tonight's API inventory data... Finally, soft data collapsed to post-Trump lows (Richmond Fed plunged) as hope disappears... And trade-deal complacency is running high once again... And perhaps even more notably, as Bloomberg's Cameron Crise quantifies, as trade-war risk is priced out of markets (black line) so expectations for the need for a Fed rate cut should be reducing... but aren't...
JPMorgan- We Believe The Dollar Could Lose Its Status As World's Reserve Currency -- Almost eight year ago, we first presented a chart first created by JPMorgan's Michael Cembalest, which showed very simply and vividly that reserve currencies don't last forever, and that in the not too distant future, the US Dollar would also lose its status as the world's most important currency, since it is never different this time. As Cembalest put it back in January 2012, "I am reminded of the following remark from late MIT economist Rudiger Dornbusch: 'Crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.'" Perhaps it is not a coincidence then that in light of the growing number of mentions of MMT and various other terminal, destructive monetary policies that have been proposed to kick on the current financial system the can just a little bit longer, that the topic of longevity of reserve currency status is once again becoming all the rage, and none other than JPMorgan's Private Bank ask in this month's investment strategy note whether "the dollar's "exorbitant privilege" is coming to an end?" So why is JPM, after first creating the iconic chart above which has since spread virally across all financial corners of the internet, not only worried that the dollar's reserve status may be coming to an end, but in fact goes so far as to state that "we believe the dollar could lose its status as the world’s dominant currency (which could see it depreciate over the medium term) due to structural reasons as well as cyclical impediments."
The Debt-Ceiling Impasse Has Meant Mini-QE Since May - Will Mean QT When Resolved - When the US government gets near its statutory debt limit, congress must lift the debt limit in order for the Treasury to continue to issue debt to pay for government expenses. Simple enough. However, even after the debt limit is reached, the Treasury can use “extraordinary measures” so that the government can keep paying its various agencies and service providers. “Extraordinary measures” is really just the Treasury drawing down its checking account at the Fed, the same way an individual would draw down their checking account if they were between jobs. The act of the Treasury drawing down its account at the Fed is kind of like a mini version of quantitative easing in that it adds liquidity to the system that otherwise would not have been there. So far the Treasury has drawn down its checking account at Fed by a cool $200bn since May, or $100bn per month. On the flip side, when the debt ceiling impasse is finally settled, and it looks like that is going to happen any day now per Treasury Secretary Mnuchin’s comments, the Treasury will need to build back up its checking account balance at the Fed. This means issuing enough debt over the next few months to not only cover ongoing expenses, but also enough to add back the $200bn it has withdrawn from its checking account so far. The extra issuance of debt is kind of like quantitative tightening in that it removes liquidity from the system. I would suggest that removing liquidity from the system at a time when growth is likely to be slowing anyways, as we showed here, will add an extra layer of risk to liquidity sensitive assets over the next few months.
We've Arrived At The End Of The Road - Decades of central bank intervention have left us with an unavoidable insolvency crisis.. Cheered and further egged on by politicians happy for easy solutions and desperate to avoid having to make tough calls, central banks have been increasingly willing to provide liquidity in good times and bad. Akin to removing the limit on a teenager’s credit card, with access to so much cheap money, the US went on a debt bender. One that has lasted for nearly half a century: Here we stand today with the national debt at over $22 trillion, total US debt outstanding of $70 trillion (shown the above chart), and unfunded national liabilities of over $200 trillion. And we add to this every year with an annual deficit now exceeding $1 trillion. This gigantic accretion of debt will never be repaid. And as the pile grows higher, the burden of servicing it — even at today’s historically low interest rates — is placing an increasingly heavy drag on economic growth. To date, the central banks have gotten away with their easy money policies because they could. The day of reckoning could always be pushed further out via a fresh round of liquidity. But, as Brien Lundin says in the video below, the reckoning is “no longer simply inevitable, it is imminent. We are reaching the End of the Road.”The Fed and its central banking brethren are now hostage to rock-bottom interest rates. They can’t raise them, less they asphyxiate the remaining shreds of GDP growth around the world. Especially now, when so much of the global economy is fast sliding into recession. Rate hikes at this point would simply crash the system. So we can expect more unnatural and desperate measures from here. Fed rate cuts while the stock market is at all-time highs and employment at all-time lows? Sure. Negative interest rates on high yield (i.e. junk) bonds? It’s already happening in Europe. But we shouldn’t expect these to work. So what does all this mean? What repercussions can we expect as we arrive at the End of the Road? What prudent investments fit Dalio’s criteria? To address these important questions, Peak Prosperity partnered with Jefferson Financial and Benchmark Financial Services to assemble a team of economic, financial and legal experts to explain the unfolding situation and predict what to expect from here. The result is the 90-minute video presentation below.Featured faculty for this video include Ted Siedle, national pension expert and recipient of the two largest-ever whistleblower settlements from the SEC and CFTC, Chris Martenson PhD, economic analyst and co-founder of PeakProsperity.com, and Brien Lundin, publisher of GoldNewsletter.com and producer of the world’s longest-running investment conference.
Chicago Fed "Index Points to Economic Growth near Historical Trend in June" - From the Chicago Fed: Index Points to Economic Growth near Historical Trend in June The Chicago Fed National Activity Index (CFNAI) ticked up to –0.02 in June from –0.03 in May. One of the four broad categories of indicators that make up the index increased from May, and two of the four categories made negative contributions to the index in June. The index’s three-month moving average, CFNAI-MA3, ticked up to –0.26 in June from –0.27 in May. This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967. This suggests economic activity was below the historical trend in June (using the three-month average). According to the Chicago Fed: A zero value for the monthly index has been associated with the national economy expanding at its historical trend (average) rate of growth; negative values with below-average growth (in standard deviation units); and positive values with above-average growth.
Fed's National Activity Index Contracts For 7th Straight Month - Longest Streak Since 2009 - Against hope-filled expectations of 0.08 print, Chicago Fed's National Activity Index disappointed once again, down 0.02 in June. This is the seventh month of declines in a row - the longest streak of contraction since the financial crisis. 36 indicators improved from May to June, while 49 indicators deteriorated (but of the indicators that improved, nine made negative contributions). 40 of the 85 monthly individual indicators made positive contributions, while 45 indicators affected the index negatively. Only the 'employment'-related indicators suggested growth in June... And this is all happening with stocks at record highs?
US GDP Q2 2019: Up 2.1% vs 2% estimate - Growth decelerated in the second quarter, but not by as much as Wall Street thought, as tariffs and a global slowdown weighed on the U.S. economy, the Commerce Department reported Friday.GDP increased 2.1%, down from the first quarter’s 3.1% and the weakest increase since Q1 of 2017 when President Donald Trump took office. Dow Jones Q2 estimates were for 2% growth.However, the underlying numbers in the report seemed to take steam out of the recession fears that have been much of the talk among economists and policymakers at the Federal Reserve. “The recession talk was always overstated,” said Michael Arone, chief investment strategist at State Street Global Advisors. “Those that were doing the Chicken Little, the sky is falling, we’re headed for recession talk were clearly early in that assessment. The economic data continue to suggest that the economy isn’t near recession, at least in the next year or so.” Trump himself deemed the report “not bad” and noted that growth was continuing despite what he considers overly tight monetary policy from the Federal Reserve. The president’s top economic adviser Larry Kudlow expressed similar sentiments in a CNBC interview.“I think it’s almost a miracle that the economy is growing as rapidly as it is,” Kudlow said on “Squawk on the Street.” “This has not been easy with seven rate hikes.” Consumer and government spending helped propel GDP in the April-to-June period, while a pullback in business investment weighed on the number. Personal consumption expenditures rose 4.3%, the best performance since the fourth quarter of 2017. Government consumption expenditures and gross investment rose 5%, the fastest pace since Q2 of 2009 as the economy was coming out of the Great Recession.At the same time, gross private domestic investment tumbled 5.5%, the worst since Q4 in 2015 as spending on structures slumped 10.6%. The decline pulled a full percentage point from the final GDP number.
BEA: Real GDP increased at 2.1% Annualized Rate in Q2 - From the BEA: Gross Domestic Product, Second Quarter 2019 (Advance Estimate) and Annual Update Real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the second quarter of 2019, according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.1 percent. ... The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment, exports, nonresidential fixed investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased. The deceleration in real GDP in the second quarter reflected downturns in inventory investment, exports, and nonresidential fixed investment. These downturns were partly offset by accelerations in PCE and federal government spending. The advance Q2 GDP report, with 2.1% annualized growth, was slightly above expectations. Personal consumption expenditures (PCE) increased at 4.3% annualized rate in Q2, up from 1.1% in Q1. Residential investment (RI) decreased 1.5% in Q2. Equipment investment increased at a 0.7% annualized rate, and investment in non-residential structures decreased at a 10.6% pace.
Q2 GDP Smashes Expectations As Personal Spending Soars Most Since 2014 --If the Fed thought its life was complicated before, when it was expected to cut rates even as the US economy was firing on all cylinders and humming along, Powell's problems just hit nightmare level, following a Q2 GDP print that not only came in far stronger than expected, printing at 2.1%, far above the 1.8% consensus expectation... ...but Personal Consumption of 4.3% soared at the highest rate in five years, going back all the way to 2014. And just in case that wasn't enough, government spending boosted the bottomline Q2 GDP by 0.85%, the biggest contribution to GDP since 2009 as it climbed by a whopping 5%. But if personal and government spending was the good news, trade was not, as exports subtracted 0.63% from the bottom line, the biggest drop since Q1 2009! Residential investment was also ugly, dipping for a sixth straight quarter, the longest streak since 2009. Looking at all the components, the Q2 increase in real GDP reflected increases in consumer spending and government spending, while inventory investment, exports, business investment, and housing investment decreased. Imports, which are a subtraction in the calculation of GDP, increased.The increase in consumer spending reflected increases in both goods and services that were widespread across major categories. The increase in government spending reflected increases in both federal and state and local government spending. Meanwhile, the decrease in inventory investment reflected decreases in retail trade, manufacturing, and wholesale trade industries. Goods led the decrease in exports. Here is how we got that 2.1% (or 2.06% to be precise) Q2 GDP Print:
- Q2 Personal Consumption: 2.85%, up from 0.62% in Q1
- Q2 Fixed Investment: -0.14%, down from 0.53%
- Q2 Change in Private Inventories: -0.86%, down from 0.55%
- Q2 Net Exports -0.64%, down from 0.90%
- Q2 Government consumption: 0.85%, up from 0.48%
Or, added across: 2.1%: Commenting on today's report, Bloomberg economists note that "the composition of growth, toward consumer spending and away from investment, will be sufficient to propel GDP modestly above trend. During periods when consumers were carrying more than their usual share, growth in this cycle tended to be slower, averaging 2.0%, compared with periods with more diversified growth, which averaged 2.6%. Bloomberg Economics’ forecast for the second half 2019 GDP growth is 2.1%."Elsewhere, headline PCE beat while core PCE missed, as prices of goods and services increased 2.2% in the second quarter of 2019, after increasing 0.8 percent in the first quarter. Food prices increased 0.7 percent in the second quarter, while energy prices increased 18.8 percent. The headline GDP price index rose 2.4%, above the 2.0% expected, however excluding food and energy, the core PCE increased 1.8% in the second quarter, below the 2.0% expected, and compared with an increase of 1.2% in the first quarter. Ironically, as BMO's Ian Lyngen notes, the core-PCE was notably weaker-than-forecast at 1.8% vs. 2.0% expected. "Moreover, Q1's core-PCE was revised down to 1.1%... Our view on the Fed is unchanged as a result of the data and, if anything, skews the path of policy rates lower as lowflation has become so crucial to the easing narrative."
Real GDP Annual and Quarterly - The following graphs show real GDP quarterly (blue, annualized), and the year-over-year change in GDP (red). The tax changes at the end of 2017 have had minimal impact on GDP. Most forecasts showed some minor boost in 2018 and 2019 followed by a minor drag starting in 2020. With the new budget agreement, there probably will be little drag from fiscal policy next year. Also, as shown earlier, there was no investment boom following the tax changes. However, the tax changes did result in a large increase in the budget deficit (as predicted by all competent analysts). This rate of growth is about what we should expect, see: Demographics and GDP: 2% is the new 4%
Q2 GDP: Investment -- Investment was weak again in Q2, although personal consumption expenditures (PCE) was strong (increased at a 4.3% annual rate). The first graph below shows the contribution to GDP from residential investment, equipment and software, and nonresidential structures (3 quarter trailing average). This is important to follow because residential investment tends to lead the economy, equipment and software is generally coincident, and nonresidential structure investment trails the economy. In the graph, red is residential, green is equipment and software, and blue is investment in non-residential structures. So the usual pattern - both into and out of recessions is - red, green, blue. The dashed gray line is the contribution from the change in private inventories.Residential investment (RI) decreased in Q2 (-1.5% annual rate in Q2). Equipment investment increased slightly at a 0.7% annual rate, and investment in non-residential structures decreased at a 10.6% annual rate. On a 3 quarter trailing average basis, RI (red) is down slightly, equipment (green) is slightly positive, and nonresidential structures (blue) is down slightly. Recently RI has been soft, but the decrease is fairly small. I'll post more on the components of non-residential investment once the supplemental data is released.
This Is What Americans Spent The Most Money On In The Second Quarter - As we reported earlier, Q2 GDP printed far stronger than expected, with US households going on an all-out spending spree and at 2.85%, or contributing 138% of the bottom line 2.1% GDP print, personal consumption soared an annualized 4.3%, the strongest print going back to 2014! So, as we always do, we decided to take a look at what Americans supposedly spent the most money on in Q2, to find the source of this unexpected spending splurge. What we first found is that, unlike most quarters when there was a decline in spending in at least one category, in Q2 spending actually increased in every single category across goods and services.Now, traditionally we would expect healthcare - a legacy of America's aging demographic and the Obamacare tax - to provide the bulk of the upside, but in Q2 we found only a relatively modest contribution, with a spending increase of only $15.3 billion compared to Q1. Another surprise was that at a time when auto dealers continue to report declining auto sales on a Y/Y basis, spending on motor vehicles and parts somehow increased by $19.7 billion in the quarter.But what was the main driver of spending in the second quarter? Well, for some inexplicable reason, in Q2 the American consumer was scrambling to buy... recreational vehicles!? Here is the breakdown of all the categories that constituted Personal Consumption in the second quarter: Regular readers will recall that this is not the first time this particular category emerged as a surprise top spending category: both two and three years ago, in Q1 of 2016 and then again in Q1 of 2017, Americans inexplicably again splurged on RVs (both of those times, there was a political prerogative to show GDP growth as strong as possible).Brexit: Boris Johnson’s Impossibility Theorem
A Shocker In Today's GDP Revision- No Profit Gains In The Past 5 Years - The happy prophecy of endless growth in the economy generating a continuous flow of strong corporate earnings just ran into trouble—the "truth" on profits. According to GDP data released today Q2 corporate earning posted their largest annual decline in several years, and the revised data shows that there has been no growth in operating profits for the past 5 years. Q2 Real GDP bettered analyst's expectations growing 2.1% annualized, driven by strong gains in consumer and government spending. Yet, the gain in GDP did not flow to the bottom line for companies. According to the preliminary Q2 GDP results, implied operating profits for the period totaled $1,900 billion, down 5% from Q1, which would represent the third consecutive quarterly decline, and off over 7% from the year ago levels, one the largest declines recorded in several years. Yet, as ugly as the Q2 numbers appear to be on the surface, what are even more troubling are the sharp downward revisions for the last two years. According to the annual GDP revisions operating profits for 2017 were lowered by $93 billion, or 4.4%, and profits for 2018 were reduced by a whopping $188 billion of 8.3%. The revised numbers of corporate profits show that operating profits peaked in Q3 2014 and have been moving sideways even since. Operating profits in the GDP accounts and S&P 500 operating profits over the long run track fairly close to one another, although there can be large differences in any given year. Yet, a flat trend for 5 years in operating profits should not be overlooked or ignored especially since during this period S&P 500 share prices have increased over 50%. Operating profits, or profits from current production, are the purest form of corporate earnings since this series puts all firms on the same accounting framework - it avoids non-GAAP adjustments - and the profit numbers are not adjusted for the number of shares outstanding; the latter which is often reported by S&P 500 companies for equity investors. The argument being used by equity analysts and strategists that the equity market is cheap or inexpensive relative profits appears to be dubious in light of revised data on operating profits, and it suggests that the "actual " market multiple is a lot higher than what is being reported by analysts.
Q2 Real GDP Per Capita: 1.51% Versus the 2.06% Headline Real GDP - The Advance Estimate for Q1 GDP came in at 2.1% (2.06% to two decimals), down from 3.1% in Q1. With a per-capita adjustment, the headline number is lower at 1.51% to two decimal points. Here is a chart of real GDP per capita growth since 1960. For this analysis, we've chained in today's dollar for the inflation adjustment. The per-capita calculation is based on quarterly aggregates of mid-month population estimates by the Bureau of Economic Analysis, which date from 1959 (hence our 1960 starting date for this chart, even though quarterly GDP has is available since 1947). The population data is available in the FRED series POPTHM. The logarithmic vertical axis ensures that the highlighted contractions have the same relative scale. The chart includes an exponential regression through the data using the Excel GROWTH function to give us a sense of the historical trend. The regression illustrates the fact that the trend since the Great Recession has a visibly lower slope than the long-term trend. In fact, the current GDP per-capita is 7.6% below the pre-recession trend.
U.S. economic growth slowed in 2018 as consumer rebound was offset by rising trade gap - The government says the U.S. economy grew more slowly in 2018 than it previously estimated, downgrading its estimate from 3% to 2.5%. President Donald Trump had frequently boasted of the 3% growth figure as evidence that his policies invigorated the economy. The Commerce Department lowered its estimate of growth from the fourth quarter of 2017 to the fourth quarter of 2018 mainly because businesses spent less on buildings, equipment and software than it had earlier thought. The department made the change based on more comprehensive data as part of its annual revisions to gross domestic product, or GDP, the broadest measure of the nation’s output of goods and services. The revisions cover the five years from 2014 through 2018. Overall, the changes don’t significantly alter the broader trajectory of the economy. Growth picked up in 2017 and 2018 after a sluggish 2016, spurred by stronger overseas growth, increased government spending and the Trump administration’s tax cuts. Still, the revisions mean that growth failed to cross the symbolic 3% threshold last year, which it hasn’t done since 2005. Most economists point to slower population growth and sluggish increases in worker productivity as the primary reasons for the shortfall. The revision to 2018 occurred in one of the two principal ways that the government calculates GDP. The standard measure, which compares average growth in one year with average growth in the previous year, shows that the economy grew 2.9% in 2018, the same as before the revisions. But a second approach compares the size of the economy at the end of one year with its size at the end of the previous year. This is the barometer that now shows 2.5% growth for 2018. This measure is preferred by some institutions and many economists because it is thought to present a clearer picture of what happened in a given year. The Trump administration’s Council of Economic Advisers also prefers this method. Economic growth in 2017 was revised higher, to 2.8%, according to the White House’s preferred metric, from its previous level of 2.5%, partially offsetting last year’s downgrade.
Trump’s 3% Growth Feat in 2018 Undone by Annual Data Revisions - President Donald Trump failed to achieve his much-ballyhooed 3% target for economic growth in 2018 after all. Updated government figures show that gross domestic product expanded 2.5% on a fourth-quarter-over-fourth-quarter basis last year. That compares with a previous estimate of 3% and an upwardly revised 2.8% in 2017, the first year of Trump’s presidency. Behind the 2018 markdown: Slower growth of business investment and exports, along with a greater output in the fourth quarter of 2017 that made the comparison less favorable. Data for the second quarter of 2019, also released Friday, showed the economy expanded at a 2.1% annualized pace -- above the median projection -- following a 3.1% reading in the prior three months. GDP grew 2.3% in the second quarter from a year earlier, the slowest in two years. The new data call into question Trump’s claim that he’s lifting growth to 3%-plus from 2% through a mixture of tax cuts, deregulation and a pro-America trade policy. GDP gains in the first two years of his presidency, though, did top the expansion’s 2.3% average. Other highlights of the annual GDP revisions -- which cover data back to 2014 -- include a sharp upward adjustment in the personal savings rate last year and the adoption of new quality-adjusted price calculations for cellphones that exhibit steeper declines than previous figures. The latest data from the Commerce Department’s Bureau of Economic Analysis also show that the economy ended 2018 on a much weaker footing than thought. Growth in the final three months of 2018 is now pegged at an annualized 1.1%, half the previous estimate and the slowest pace in three years, as consumer spending downshifted significantly.
Warren warns consumer, corporate debt could cause next crisis - Sen. Elizabeth Warren warned Monday that the U.S. economy is at risk of a recession, largely due to high levels of debt among both consumers and businesses. “Warning lights are flashing. Whether it’s this year or next year, the odds of another economic downturn are high — and growing,” Warren wrote in a Medium post. “Congress and regulators should act immediately to tamp down these threats before it’s too late.” Warren said that her warnings in advance of the last recession were ignored by Federal Reserve Chairman Alan Greenspan and others who had the power to head off the financial crisis. At the time, she was a Harvard law professor who was known as an expert in bankruptcy. Now Warren is a Democratic presidential candidate who wants to cancel more than 95% of U.S. student loan debt, provide free child care for millions of children from lower-income families, and make public colleges free to attend. She made the case Monday that those policies would help stabilize what she called the “shaky foundation” of the U.S. economy by reducing household debt. Warren noted that student loan debt has more than doubled since the financial crisis, credit card debt is back to its 2008 peak, and a record number of Americans have fallen behind on their auto loans. “Families may be able to afford these debt payments now, but an increase in interest rates or a slowdown in income could plunge families over a cliff,” Warren wrote. Her warnings about consumer debt levels come at a time when consumer spending — much of it fueled by borrowing — continues to propel the U.S. economy. Total household debt climbed rapidly from $8.29 trillion in the first quarter of 2004 to $12.68 trillion in the third quarter of 2008, according to data from the New York Fed. It then fell as low as $11.15 trillion in 2013, but has since climbed to a new record high of $13.67 trillion. Some observers have downplayed concerns about consumer debt levels by noting that wages have also been rising. Household debt service payments as a percentage of disposable income remain significantly lower than they were between 2000 and 2008. There's also little danger of the Fed raising interest rates in the immediate future, as the central bank has signaled that it could soon begin lowering rates in response to signs that the economy is weakening.
Elizabeth Warren Says Another Economic Crash Is Coming: Is She Right? - Pam Martens - On Monday, Democratic presidential contender Senator Elizabeth Warren posted a column on Medium that carried the provocative headline: The Coming Economic Crash — And How to Stop It. Warren’s column came just 11 days after we titled our own article: Is There a Stealth Financial Crisis? Alarm Bells Are Ringing.Warren wrote about economic trends like the fact that the U.S. manufacturing sector isalready in recession and the staggering amount of household and corporate debt. We wrote about the striking similarities to the early warning signs that ushered in the 2008 financial crash and those happening right now: like being locked out of withdrawing money from a mutual fund because of a run on the fund and an inability to find a buyer for its illiquid investments; and a major international bank firing a big chunk of its labor force and putting tens of billions of dollars of its toxic assets in a “bad bank” as its publicly traded stock heads toward zero. (It was Citigroup in the last crisis; it’s Deutsche Bank right now. And like Citigroup in 2008, Deutsche Bank is deeply interconnected to Wall Street’s mega banks.)Warren is one of the leading contenders to snag the Democratic nomination for President and therefore must offer hope to the populace — thus the title of her column suggests that there’s a way to stop the impending economic crisis. There isn’t and Warren knows that. What Warren proposes are ways to lessen the economic impact on average Americans. Warren has proven herself to be one of the most knowledgeable members of the Senate Banking Committee since 2013, particularly when it comes to the insidious and highly-leveraged risk taking on Wall Street. She knows there is not going to be any way to stop the Wall Street train wreck once it’s in motion. That’s because despite the pivotal role that derivatives played in deepening the epic financial collapse that began in 2008, derivatives have not been brought under control by either Congress or Federal regulators of Wall Street.
Eliminate The Debt Ceiling - Barkley Rosser - Several days ago in WaPo, Catherine Rampell published a highly reasonable column calling for eliminating the century-old US debt ceiling, something no other nation has ever had, a position supported by a wide array of economists including such a conservative GOP stalwart as the recently deceased Martin Feldstein, a former CEA Chair for Reagan. I have made numerous posts here on this in the past, but the issue is hot again as once again the debt ceiling is being rapidly approached. The latest story is that the “adults in the room,” Treasury Secretary Steven Mnuchin and Speaker of the House Nancy Pelosi, may be very near an agreement to raise the debt ceiling, Reportedly Pelosi has been open to eliminating the ceiling, but in the current circumstances I certainly understand why she might be wanting to secure a two year agreement to preserve funding for social safety programs crazy right wingers want to use the debt ceiling issue to trash as well as holding off any shutdowns this fall. This is what used to be known as “good government,” but in the current environment, even this apparently reasonable deal, which also has no non-economic sideshows involving abortion or whatever, may yet not pass. Pelosi says it must be agreed to by tomorrow evening if it will get passed properly by Congress before they all go on leave and the government might run out of money in early September (corporate tax payments have been way down due to Trump tax law). Eliminating the ceiling would avoid all this bs, but this is not the moment for that. This is definitely a weird and unprecedented situation. For over a century we have had this completely indefensible debt ceiling, which has been raised so many times it is not worth counting, and when the WH and Congress have been controlled by the same party, it has been no big deal, although obviously that is what we need to get rid of the damned thing. However, historically, when there has been split partisan control the game has been the WH pushing raising the ceiling while the opposition party in Congress has made lots of complaining noises and often made demands for raising it. The problem this time is that the major power broker of the administration, Acting Chief of Staff Mulvaney, was part of the tea party fanatics in the House who when Obama was prez tried to block raising the ceiling. Apparently at times he and Trump have indulged in fantasies that if there is a default he could personally control which agencies get funded and which do not.
Trump, Democrats clinch two-year budget deal -President Trump and Speaker Nancy Pelosi (D-Calif.) reached a two-year budget deal Monday that also suspends the debt ceiling through July 2021, capping days of furious negotiations.The agreement, spearheaded by Pelosi and Treasury Secretary Steven Mnuchin, sets the top-line numbers for overall defense and nondefense spending for fiscal 2020 and 2021. “I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy — on a two-year Budget and Debt Ceiling, with no poison pills,” Trump tweeted.It’s a significant win for Mnuchin and Pelosi, who have spoken several times over the past two weeks, as well as for Kentucky Republican McConnell, who took a back seat in the talks but had been pushing the White House to accept a two-year deal.The deal is likely to face considerable pushback from conservatives and budget hawks, who were already lining up to urge Trump to reject the agreement before it was formally announced Monday.The Committee for a Responsible Federal Budget (CRFB), a fiscally conservative advocacy group, said before the deal was announced that it had the potential to be “the worst budget agreement in our nation’s history.”“If this deal passes, President Trump will have increased discretionary spending by as much as 22 percent over his first term and enshrine trillion-dollar deficits into law,” said CRFB President Maya MacGuineas. CRFB estimated that the deal could add as much as $2 trillion to deficits over the decade.
Conservatives erupt in outrage against budget deal - Conservatives are outraged about the $320 billion budget deal President Trump announced Monday, and they are not holding back. Rep. Mark Walker (R-N.C.), a member of House leadership, tweeted out a gif of the Joker burning a giant pile of cash when the announcement came out. “Our credit card is maxed out,” he wrote in a follow-up Tweet. “What this budget deal does is ask the credit card company for another $320 billion in credit NOW for the chance to get paid back $75 billion in a decade. No bank would take that. American taxpayers shouldn’t either,” he added. Rep. Chip Roy (R-Texas), a member of the House Freedom Caucus, on Monday penned a letter to Trump opposing the agreement and has since said he is “on board” with energizing conservatives to defeat the bill. The Committee for a Responsible Federal Budget, a watchdog that advocates for lowering deficits, estimated that the deal would cost $1.7 trillion over a decade, and add another 5 percentage points to the debt by the end of the decade. Since Trump took office, the debt has grown from just under $20 trillion to over $22 trillion. While mandatory spending remains the largest driver of deficits, the 2017 GOP tax law was projected to add $1.9 trillion to the deficit over a decade, and bipartisan deals to increase defense and domestic spending have added billions more. "President Trump will have set the record for the largest increases in federal spending in the history of our country, surpassing George W. Bush's Republican record," said one member of the conservative Freedom Caucus. The caucus is expected to meet Tuesday to discuss the deal. But its leaders, Reps. Mark Meadows (R-N.C.) and Jim Jordan (R-Ohio), both key Trump allies, have remained uncharacteristically quiet since the deal's announcement, focusing their recent fire on an upcoming hearing with former special counsel Robert Mueller. Other conservatives have also been wary of criticizing Trump, who enthusiastically supported the deal in a tweet. ‘
GOP leaders struggle to contain conservative anger over budget deal - Anger among conservative lawmakers boiled over Tuesday in the wake of a budget deal that will add hundreds of billions of dollars to the national debt, posing a challenge for GOP leaders. The package is expected to pass Congress now that President Trump has blessed the agreement, but GOP leaders are being tested as they try to count votes amid conservative unrest about the spending agreement’s $320 billion price tag. “There are always Republicans who are going to say, ‘We think it might spend more here than we would have liked,’ but this is a divided government,” said Sen. John Thune (S.D.), the No. 2 Senate Republican. “It probably won’t get all of our members, but I think it will get a lot of them.” Congressional leaders are racing to get the bill to Trump’s desk before lawmakers leave town for the August recess. The House Rules Committee is slated to take up the measure Wednesday, paving the way for a floor vote this week. The Senate is expected to take action the following week. Top Republicans projected confidence Tuesday about the deal’s prospects, even amid pushback from the edges of both parties, as some progressives have complained about the high level of defense spending. Senate Majority Leader Mitch McConnell (R-Ky.) defended the agreement, saying he makes “no apologies” for pushing for a two-year agreement and that he is “confident” it will pass the Senate. “I make no apologies for this two-year caps deal. I think it’s the best we could have done in a timely divided government. The alternatives were much worse, a one-year CR, a sequester, perpetual chaos,” he said, referring to a continuing resolution. Treasury Secretary Steven Mnuchin, the lead White House negotiator who discussed the deal with senators during a closed-door lunch on Tuesday, told reporters that Trump “absolutely” supports the deal and that he is “sure it will pass.” “I just explained why this was a fairly negotiated deal. It’s important that we have bipartisan support,” he said when asked what his pitch to Republicans was. But conservatives and budget hawks are airing their grievances about the higher spending and lack of cuts to help pay for the legislation.
Winners and losers in the Trump-Pelosi budget deal - President Trump tweeted Monday night he was “pleased” to announce a budget deal that raises the debt ceiling and sets federal spending caps for the next two years. The $320 billion deal followed months of posturing and behind-the-scenes talks. It will add hundreds of billions to the deficit and represents the latest piece of evidence that Washington policymakers in both parties have turned away from any worries about the debt. So who won out in the negotiations, and who got left behind? Speaker Nancy Pelosi (D-Calif.) maneuvered deftly through the negotiations to secure a deal that won Democrats one of their top priorities: a significant increase in domestic spending. The $27 billion more in nondefense, discretionary spending will go toward health, education, science research, housing and other areas of concern to Democrats. Pelosi also managed to break the “parity” principle that has defined budget negotiations for the better part of a decade. Under the principle, defense and nondefense spending is supposed to match dollar for dollar. But in this deal, the increase in defense spending is $5 billion less than the increase in nondefense spending. That’s important for Pelosi, whose caucus includes progressives balking at greater and greater defense spending. Trump entered the talks hoping to cut spending, and he certainly didn’t want a deal that increased domestic spending more than the Pentagon’s budget. He’s taking criticism from conservatives who say he should have done more to reduce deficits; The Drudge Report spent much of the day featuring a picture of Trump shaking Pelosi’s hand and a headline warning of more spending and debt. Yet Trump doesn’t emerge as a loser in the deal given the likelihood that the agreement will further boost the U.S. economy — which is greatly linked to his reelection chances. The $49 billion in deficit-financed new spending next year will further stimulate an economy that already has low unemployment, providing momentum as effects from the GOP tax cuts fade away. The deal also prevents any problem with the debt ceiling and greatly reduces the possibility of a shutdown — two things the White House wants to avoid.
Unprecedented, Wasteful & Obscene - House Approves $1.48 Trillion Pentagon Budget --In a bipartisan deal that one anti-war critic said demonstrates how thoroughly "broken and captured Washington is by the Pentagon," 219 House Democrats and 65 Republicans on Thursday voted to approve a budget agreement that includes $1.48 trillion in military spending over the next two years. Just 16 Democrats — including Reps. Ilhan Omar (D-Minn.) and Ayanna Pressley (D-Mass.) — voted against the two-year, $2.7 trillion budget agreement. Largely due to expressed concerns about the deficit, 132 Republicans and Rep. Justin Amash (I-Mich.) also voted no. The final vote was 284-149. (See the full roll call.) The House passage of the budget deal, which President Donald Trump quickly applauded on Twitter as a victory for the military, comes after the Congressional Progressive Caucus threatened in April to tank the measure in opposition to its out-of-control Pentagon outlays. But most of the Progressive Caucus voted for the agreement on Thursday, pointing to increases in domestic spending. "It's not a perfect deal by any means," Reps. Pramila Jayapal (D-Wash.) and Mark Pocan (D-Wis.), co-chairs of the Progressive Caucus, said in a statement ahead of the vote. "This deal does not address the bloated Pentagon budget, but it does begin to close the gap in funding for families, by allocating more new non-defense spending than defense spending for the first time in many years."Stephen Miles, executive director of Win Without War, took issue with the latter claim in a series of tweets Thursday."You're no doubt hearing a lot of crowing from Democrats about how the deal they struck with Trump gives more money to 'non-defense' spending than to 'defense,'" Miles wrote. "Let's be clear that by every measure, save the one they're using, that's simply not true." "Under this deal, the Pentagon and its affiliated programs will get $1.48 trillion over the next two years. The entire rest of gov't, including the VA btw, will get $1.30 trillion. That's $178.6 billion more for the Pentagon than the whole rest of gov't," Miles wrote. "So, for the love of god, can we all stop pretending like this is somehow anything other than a continued orgy of unprecedented, wasteful, and obscene spending at the Pentagon."
Trump Touts Big Victory After Supreme Court Allows Military Funding For Border Wall - Bloomberg reports that the Supreme Court has cleared President Trump’s administration to start using disputed funds to construct more than 100 miles of fencing along the Mexican border. The decision allows the president to take his biggest step yet toward erecting his long-promised wall. As The Hill details, U.S. District Judge Haywood Gilliam in California, an Obama appointee, issued a permanent injunction blocking officials from utilizing $2.5 billion of the roughly $6 billion in diverted military dollars, siding with the groups' arguments that building the wall would cause "irreparable harm" to their interests at the border.And the Ninth Circuit Court of Appeals, in a 2-1 ruling earlier this month, declined to temporarily halt that injunction, finding that “the use of those funds violates the constitutional requirement that the Executive Branch not spend money absent an appropriation from Congress.”House Democrats also attempted to sue to stop the diversion of the Pentagon dollars for a wall, claiming that only lawmakers can allocate federal funding under the Constitution. Solicitor General Noel Francisco argued that the needs of the administration outweighed those of groups like the ACLU and Sierra Club who are challenging the use of the Defense Department funds for the wall. And he said that if the funds remain frozen until the end of the fiscal year, authorities may not be able to use them at all.
Trump Promised Massive Infrastructure Projects—Instead We’ve Gotten Nothing - Bad news about infrastructure is as ubiquitous as potholes. Failures in a 108-year-old railroad bridge and tunnel cost New York commuters thousands of hours in delays. Illinois doesn’t regularly inspect, let alone fix, decaying bridges. Flooding in Nebraska caused nearly half a billion dollars in road and bridge damage—just this year. No problem, though. President Donald Trump promised to fix all this. The great dealmaker, the builder of eponymous buildings, the star of “The Apprentice,” Donald Trump, during his campaign, urged Americans to bet on him because he’d double what his opponent would spend on infrastructure. Double, he pledged!So far, that wager has netted Americans nothing. No money. No deal. No bridges, roads or leadless water pipes. And there’s nothing on the horizon since Trump stormed out of the most recent meeting. That was a three-minute session in May with Democratic leaders at which Trump was supposed to discuss the $2 trillion he had proposed earlier to spend on infrastructure. In a press conference immediately afterward, Trump said if the Democrats continued to investigate him, he would refuse to keep his promises to the American people to repair the nation’s infrastructure.The comedian Stephen Colbert described the situation best, saying Trump told the Democrats: “It’s my way or no highways.”The situation, however, is no joke. Just ask the New York rail commuters held up for more than 2,000 hours over the past four years by bridge and tunnel breakdowns. Just ask the American Society of Civil Engineers, which gave the nation a D+ grade for infrastructure and estimated that if more than $1 trillion is not added to currently anticipated spending on infrastructure, “the economy is expected to lose almost $4 trillion in GDP, resulting in a loss of 2.5 million jobs in 2025.”Candidate Donald Trump knew it was no joke. On the campaign trail, he said U.S. infrastructure was “a mess” and no better than that of a “third-world country. ”When an Amtrak train derailed in Philadelphia in 2015, killing eight and injuring about 200, he tweeted, “Our roads, airports, tunnels, bridges, electric grid—all falling apart.” Later, he tweeted, “The only one to fix the infrastructure of our country is me.” Donald Trump promised to make America great again. And that wouldn’t be possible if America’s rail system, locks, dams and pipelines—that is, its vital organs—were “a mess.” Trump signedwhat he described as a contract with American voters to deliver an infrastructure plan within the first 100 days of his administration.
American Nuclear Weapons in Europe - In a classic case of "oops", a Belgian newspaper "De Morgan" picked up on a serious mistake by the Defense and Security Committee (DSC) of the NATO Parliamentary Assembly which released a document to the public that revealed one of the worst kept secrets in the world; America's inventory of nuclear weapons that are located in Europe. The document dated April 16, 2019 was discussed during the plenary session of the NATO Parliament's Defense and Security Committee on June 1 in Bratislava, Slovakia. While the presence of the weapons has long been known, it is only due to this erroneous release that the world now knows where the weapons are kept. Der Morgan's report which is entitled "Finally in black and white: There are American nuclear weapons in Belgium" revealed the following page from the NATO affiliate body's draft report entitled "A new era for nuclear deterrence? Modernization, arms control and allied nuclear forces": We now know that the United States has forward deployed approximately 150 B61 gravity nuclear bombs at the following bases:
- 1.) Kleine Brogel in Belgium
- 2.) Buchel in Germany
- 3.) Aviano and Ghedi-Torre in Italy
- 4.) Volkel in The Netherlands
- 5.) Incirlik in Turkey
The paper also notes that the B61 bombs can be delivered by either American or European aircraft and that: "...the decision to maintain the non-strategic gravity nuclear bombs in Europe is principally due to Russia's maintenance of a large number of tactical nuclear weapons in its arsenal." What the report fails to note is that Russia's nuclear arsenal weapons are located at an estimated 48 permanent nuclear weapons storage sites of which more than half are on bases for operational forces (2009 data) as shown on this graphic: These are all located on Russian soil not in bases that are adjacent to American soil.
Former Iranian President Ahmadinejad Urges Direct Talks With Trump — Some Iranian officials, including Foreign Minister Javad Zarif, have expressed support for the idea of a new round of talks with President Trump, but are trying to condition it on the US pledging to make good on previously promised sanctions relief. Former President Mahmoud Ahmadinejad made the surprise move to endorse direct talks with President Trump on Friday, saying Trump is a businessman “and therefore he is capable of calculating cost-benefits and making a decision.”US President Trump intervened, as could be expected, given that he has issued strident demands that the Fed cut rates and boost Wall Street by a further 10,000 points on the Dow. In an initial tweet, issued after the intervention by the New York Fed, he said: “I like New York Fed President John Williams’ first statement much better than his second. His first statement is 100 percent correct in that the Fed ‘raised’ far too fast and too early.” In a later tweet, he added a new component to his attack on the Fed, indicating that it should become more closely aligned with the global economic warfare being waged by the US administration. Ahmadinejad went on to say that in talks, Trump could be made to see that the long-term cost-benefit does not support the idea of a war, and that he should not be shortsighted. Ahmadinejad was Iran’s president from 2005-2013. He broadly ran as a centrist within Iran, sparring with hardliners and Reformists. He’s been critical of the current, Reformist government, and most recently has gotten in some legal trouble for accusing Supreme Leader Ayatollah Ali Khamenei of embezzling money.
Hannity Calls For/Predicts War With Iran - OK, sorry if this is just over the top, but this evening Trump’s close pal, Sean Hannity, has gone over the top both predicting and clearly supporting a full blown attack on Iran, “take out all their nuclear facilities.” Curiously a sign of how over the top this is was given by one of his guests, a colonel, warned that it would take nuclear weapons by the US to fully take out the most deeply buried Iranian capabilities. I am reasonably certain that part of why Hannity was sounding the war trumpet rather than his usual “investigate Hillary and the Steele dossier” baloney is that today Trump put himself into a difficult contradictory situation, having gone doubtful last night on his followers in NC chanting “Send her back” to supporting those chanters today. So, much easier to distract everybody with a possible war in the Persian Gulf (sorry, not “Arabian Gulf,” not yet), especially given that there has been an ongoing escalation of incidents in the Gulf over oil tankers, with Iran pushing back against the US withdrawing from the JCPOA nuclear deal. But the bottom line is that what Hannity spouts often ends up being what his close pal Trump ends up doing. I take this spout from Hannity all too seriously. We may well be in more serious war with Iran soon, with such an effort accompanied by far more massive lies than the Bush admin gave us when he stupidly invaded Iraq on false pretenses, although Hannity is assuring us that “It will be all over very soon, with no boots on the ground.” Yeah, we have heard that one before.
Trump vetoes resolutions attempting to block Saudi arms sales President Trump has vetoed three congressional resolutions that would block his emergency arms sales to Saudi Arabia and the United Arab Emirates (UAE). "This resolution would weaken America's global competitiveness and damage the important relationships we share with our allies and partners," Trump wrote in veto messages to Congress released by the White House on Wednesday evening. Senate Majority Leader Mitch McConnell (R-Ky.) earlier in the afternoon entered Trump's veto messages into the Senate record and set up a vote on the messages before Aug. 2. Congress is not expected to have the two-thirds majority needed to override Trump’s vetoes. The move marks the third time Trump has used his veto pen, and it follows an earlier veto of a Saudi-related measure. The Trump administration in May invoked an emergency provision of the law governing arms sales to push through 22 deals with Saudi Arabia, the UAE and Jordan without the typical 30-day congressional review period. The administration argued the emergency declaration was justified based on what they described as heightened threats from Iran. But the move infuriated lawmakers, who accused the White House of attempting to bypass Congress. Lawmakers had been using an informal process for more than a year to block the arms sales from moving forward because of concerns about civilian casualties caused by the Saudi-led coalition fighting in Yemen’s civil war. In the veto messages, Trump argued that the resolutions were an "ill-conceived and time-consuming" way to address concerns about the war. "The United States is very concerned about the conflict's toll on innocent civilians and is working to bring the conflict in Yemen to an end," Trump wrote.
Trump Hopes to Decide Soon on When to Release Middle East Peace Plan — US President Donald Trump hopes to decide soon on when to release a plan for peace between Israel and the Palestinians that “will not be ambiguous,” his Middle East envoy Jason Greenblatt told the United Nations Security Council on Tuesday, reports Reuters. Greenblatt and senior White House adviser Jared Kushner have spent two years developing the plan, made up of political as well as economic components, which they hope will provide a framework for renewed talks between Israel and the Palestinians. “President Trump has not yet decided when we will release the political portion of the plan, and we hope to make that decision soon,” Greenblatt told the 15-member Security Council. While Greenblatt did not reveal any details of the “60-or-so”-page plan, he said the conflict could not be solved using global consensus, international law, and references to UN resolutions – sparking strong rebuttals from council members. “For us, international law is not menu a la carte,” Germany’s UN Ambassador Christoph Heusgen told the council. “There are other instances where US representatives here insist on international law, insist on the implementation of UN Security Council resolutions, for instance on North Korea,” Heusgen said. Several council members, including Russia, Britain, France, and Indonesia, echoed Heusgen. “Security Council resolutions are international law, they merely need to be complied with,” Russia’s UN Ambassador Vassily Nebenzia said.
The Blob Lashes Out At Critics of Endless War - America has pursued the same foreign policy for almost two decades, and the results aren’t good. In Afghanistan, for example, the Taliban controls the same area of land it held a decade ago. By most metrics, things are getting worse, and there is no end in sight. But instead of admitting its failure and changing course, Washington’s foreign policy establishment insists there is no option but the status quo—and then demands its critics do the impossible: predict the future. The latest example of this occurred when Kevin Baron, executive editor of The Atlantic’s Defense One, penned an op-ed titled “‘End forever wars’ is a soundbite, not a security policy.” Baron criticizes those who point out how long we’ve been in Afghanistan, and who point out the lack of progress on the ground. He says that, instead, we should ask ourselves whether Afghanistan is making America safer. Baron then lists the countries and regions where America is now intervening, asking critics of these permanent wars to prove terror won’t thrive once we leave. Absent that impossible accomplishment, he—like the rest of Washington’s foreign policy “blob”—won’t countenance U.S. departure. Some policymakers and pundits no doubt have vague foreign policy plans. And after three successive presidents campaigned on less interventionist foreign policies only to (so far) under-deliver while in office, there should be much doubt from anyone promising to radically change course if they were to win in 2020. But the foreign policy establishment is wrong to think ending forever wars isn’t a security policy. It is exactly that. In demanding more specifics, Baron unintentionally makes the case for abandoning the foreign policy status quo. The many countries in which the U.S. military is intervening—Somalia, Yemen, Syria, Iraq, Afghanistan, and dozens of troubled countries in Africa—are all incredibly complex. It is admittedly not possible to know exactly what would happen after an American exit, especially in the long term. But by that very token, this complexity is why Washington cannot bend these troubled regions to its will.
Trump seeks Pakistan's help to end long Afghanistan war (AP) — President Donald Trump claimed Monday he could end the nearly two-decade old war in Afghanistan in a matter of days, but it would kill millions of people and wipe the country "off the face of the earth." The president made the statement at the White House as he praised Pakistan Prime Minister Imran Khan and sought his help in negotiating a peace deal in neighboring Afghanistan. "I could win that war in a week. I just don't want to kill 10 million people," Trump told reporters in the Oval Office. "If I wanted to win that war, Afghanistan would be wiped off the face of the earth. It would be gone. It would be over, literally, in 10 days." Warming up to Khan marked a turnaround for Trump, who has been sharply critical of Pakistan and now hopes Khan's government will use its influence with the Taliban to advance a peace deal and help the U.S. withdraw from the nearly two-decade old war. The war began when the U.S. went after al-Qaida leader Osama bin Laden and his Taliban supporters in Afghanistan following the Sept. 11, 2001, terrorist attacks. Sitting alongside Khan, Trump said he wanted a peaceful resolution. "So we're working with Pakistan and others to extricate ourselves." The pleasantries in the Oval Office were an abrupt change from when Trump cut millions of dollars in aid to Pakistan, saying the only thing it offered the United States was "lies" and "deceit." Khan has bashed Trump too, but now says Pakistan is also eager to work to end the war. The U.S. wants Pakistan to use its leverage to get the Taliban to agree to a ceasefire, negotiate with the Afghan government and stop harboring militant groups.
Trump threatens to wipe Afghanistan “off the face of the Earth” - US President Donald Trump threatened to “kill 10 million” Afghans in “a week” so as to win a quick victory in America’s longest war, at a joint White House press conference Monday with Imran Khan, Pakistan's prime minister. The US Commander-in-Chief cavalierly boasted that he could wipe Afghanistan “off the face of the Earth” if he wanted. But he said that he prefers to “extricate” the US from the eighteen-year-long Afghan War and expects Pakistan to facilitate this by helping secure a “settlement” with the Taliban. “We’re like policemen,” Trump claimed. “We’re not fighting a war. If we wanted to fight a war in Afghanistan and win it, I could win it in a week. I just don’t want to kill 10 million people.” To underscore that his remarks were meant as a threat, Trump added, “I have a plan to win that war in a very short period of time” and repeated the figure of 10 million dead. He then turned toward Khan and declared, “You understand that better than anybody.” Pakistan's prime minister voiced no objection to Trump's threat to unleash genocidal violence against Pakistan's northern neighbor. Instead Khan slavishly hailed the US president as the head of the “most powerful country in the world.” Later, he issued an obsequious tweet thanking Trump “for his warm & gracious hospitality” and “his wonderful way of putting our entire delegation at ease.” The US puppet regime in Kabul was forced to call for a “clarification” of Trump’s remarks, while feebly protesting that “foreign heads of state cannot determine Afghanistan’s fate in the absence of the Afghan leadership.” In contrast, people across Afghanistan reacted with horror and outrage, sentiments shared by tens of millions around the world.
Erdogan- Turkey Could Cancel 100 Boeing Orders, Worth $10BN, Over Blocked F-35s --Turkey has another trick up its sleeve to up the ante in its current showdown with Washington over blocked F-35 transfers resulting from Ankara's controversial S-400 deal with Russia. Erdogan spoke publicly about increasingly strained ties with the US for the first time in almost two weeks Friday. Addressing a ruling AK Party assembly, he said Turkey might have to "reconsider" existing orders for 100 Boeing aircraft, worth $10 billion. “Even if we’re not getting F-35s, we are buying 100 advanced Boeing aircrafts, the agreement is signed..." Erdogan was quoted as saying by Reuters."We are good customers. But if our conflict continues, we will have to reconsider this issue,” he added.
U.S. Economic Warfare and Likely Foreign Defenses - - Michael Hudson: Today’s world is at war on many fronts. The rules of international law and order put in place toward the end of World War II are being broken by U.S. foreign policy escalating its confrontation with countries that refrain from giving its companies control of their economic surpluses. Countries that do not give the United States control their oil and financial sectors or privatize their key sectors are being isolated by the United States imposing trade sanctions and unilateral tariffs giving special advantages to U.S. producers in violation of free trade agreements with European, Asian and other countries. This global fracture has an increasingly military cast. U.S. officials justify tariffs and import quotas illegal under WTO rules on “national security” grounds, claiming that the United States can do whatever it wants as the world’s “exceptional” nation. U.S. officials explain that this means that their nation is not obliged to adhere to international agreements or even to its own treaties and promises. This allegedly sovereign right to ignore on its international agreements was made explicit after Bill Clinton and his Secretary of State Madeline Albright broke the promise by President George Bush and Secretary of State James Baker that NATO would not expand eastward after 1991. (“You didn’t get it in writing,” was the U.S. response to the verbal agreements that were made.) Likewise, the Trump administration repudiated the multilateral Iranian nuclear agreement signed by the Obama administration, and is escalating warfare with its proxy armies in the Near East. U.S. politicians are waging a New Cold War against Russia, China, Iran, and oil-exporting countries that the United States is seeking to isolate if cannot control their governments, central bank and foreign diplomacy. We are still mired in the Oil War that escalated in 2003 with the invasion of Iraq, which quickly spread to Libya and Syria. American foreign policy has long been based largely on control of oil. This has led the United States to oppose the Paris accords to stem global warming. Its aim is to give U.S. officials the power to impose energy sanctions forcing other countries to “freeze in the dark” if they do not follow U.S. leadership. The U.S. aim is to keep the dollar as the transactions currency for world trade, savings, central bank reserves and international lending. This monopoly status enables the U.S. Treasury and State Department to disrupt the financial payments system and trade for countries with which the United States is at economic or outright military war.
"He's Not Respected": 81-Year-Old Commerce Secretary Wilbur Ross Apparently Can't Stay Awake During Meetings - Apparently things at the Commerce Department are a disaster. To add insult to injury, 81-year-old commerce secretary Wilbur Ross doesn’t seem to be able to stay awake during meetings, according to The Daily Beast and Politico. A new report says that Ross is rarely seen at the department and isn't respected. A source said: “He’s sort of seen as kind of irrelevant. The morale is very low there because there’s not a lot of confidence in the secretary... He’s not respected in the building.”Ross also doesn’t hold meetings on a routine basis due to his "lack of stamina". Another source said: “Because he tends to fall asleep in meetings, they try not to put him in a position where that could happen, so they’re very careful and conscious about how they schedule certain meetings... There’s a small window where he’s able to focus and pay attention and not fall asleep.” Ross's staff refutes that notion, claiming that he frequently has "long" afternoon meetings. Commerce Press Secretary Kevin Manning said: “Secretary Ross is a tireless worker who is the sole decision-maker at the department. He routinely works 12-hour days and travels often, with visits to seven countries and eight states in the last three months to advance the president’s agenda."
Chinese Money in the U.S. Dries Up as Trade War Drags On - NYT - — Growing distrust between the United States and China has slowed the once steady flow of Chinese cash into America, with Chinese investment plummeting by nearly 90 percent since President Trump took office. The falloff, which is being felt broadly across the economy, stems from tougher regulatory scrutiny in the United States and a less hospitable climate toward Chinese investment, as well Beijing’s tightened limits on foreign spending. It is affecting a range of industries including Silicon Valley start-ups, the Manhattan real estate market and state governments that spent years wooing Chinese investment, underscoring how the world’s two largest economies are beginning to decouple after years of increasing integration. “The fact that the foreign direct investment has fallen so sharply is symbolic of how badly the economic relationship between the United States and China has deteriorated,” said Eswar Prasad, former head of the International Monetary Fund’s China division. “The U.S. doesn’t trust the Chinese, and China doesn’t trust the U.S.” For years, Chinese investment into the United States had been accelerating, with money pouring into autos, tech, energy and agriculture and fueling new jobs in Michigan, South Carolina, Missouri, Texas and other states. As China’s economy boomed, state and local governments along with American companies looked to snap up some of those Chinese funds. But Mr. Trump’s economic Cold War has helped reverse that trend. Chinese foreign direct investment in the United States fell to $5.4 billion in 2018 from a peak of $46.5 billion in 2016, a drop of 88 percent, according to data from Rhodium Group, an economic research firm. Preliminary figures through April of this year, which account for investments by mainland Chinese companies, suggested only a modest uptick from last year, with transactions valued at $2.8 billion. A confluence of forces appear to be at play. A slowing economy and stricter capital controls in China have made it more difficult for Chinese investors to buy American, according to trade and mergers and acquisitions advisers. Mr. Trump’s penchant for imposing punishing tariffs on Chinese goods and an increasingly powerful regulatory group that is heavily scrutinizing foreign investment, particularly involving Chinese investors, have also scared businesses in both countries. China, which has retaliated against American goods with its own tariffs, may also be turning off the investment spigot as punishment for Mr. Trump’s economic crackdown. Concerns about America’s receptiveness to Chinese investment have been aggravated by a flurry of transactions that collapsed under heavy scrutiny from the Committee on Foreign Investment in the United States. The group, which is headed by the Treasury Department, gained expanded powers in 2018 that allow it to block a broader array of transactions, including minority stakes and investments in sensitive technologies like telecommunications and computing.
Chinese Buyers Seek Tariff Exemptions for U.S. Farm Goods - Some Chinese companies are applying for tariff exemptions as they make inquiries about buying U.S. agricultural products, more than a week after President Donald Trump complained that China hasn’t increased its purchases of American farm products. The applications will be evaluated by experts appointed by the Customs Tariff Commission, according to the official Xinhua News Agency. China and the U.S. are implementing the agreement reached by Trump and President Xi Jinping when they met in Japan last month, the report said.Trump last week reiterated that he could impose additional tariffs on Chinese imports if he wants, after saying China wasn’t buying the large volumes of U.S. agricultural goods that he claims Xi promised to purchase. The two leaders agreed then to a truce in their ongoing trade conflict after talks collapsed in May. "In order to meet the needs of Chinese consumers, Chinese enterprises are willing to continue importing certain agricultural products from the United States that are marketable in China," Xinhua said. Chinese authorities "expressed hope" that the U.S. will meet it halfway and "earnestly implement its commitments," the report said.Senior U.S. and Chinese officials spoke by phone last week, the second call since the late June summit in Osaka. The planned purchase of American farm products -- which adds to recent gestures of goodwill between both sides -- indicates U.S.-China trade talks will restart soon, Global Times Editor-in-Chief Hu Xijin said in a tweet. The Global Times is a Chinese tabloid run by the People’s Daily, which is the flagship newspaper of the Communist Party. Hu has said the paper voices opinions that official sources can’t.
What Trump’s tale about the US trade war’s role in China’s economic decline got wrong -- News that China’s gross domestic product growth had slowed to 6.2 per cent was celebrated last week by US President Donald Trump and his trade team: “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,” Trump tweeted.. Here, at last, was clear proof that his trade war was working. Well, for Trump’s base, maybe this storyline might strike a chord: the trade war is, after all, primarily a no-lose political ploy to improve chances of winning the 2020 presidential election. But, in reality, the conflict is harming everyone, from exporters worldwide to consumers, particularly in the US. And the longer it continues, the more harm it will do. Singapore last week reported its economy shrankby 3.4 per cent in the second quarter, with a leading Singapore-based economist complaining of “a deepening manufacturing downturn for the rest of Asia.” South Korea’s exports fell sharply in June while the International Monetary Fund warned that the trade war is set to knock 0.5 per cent off global growth, or US$455 billion.The slowing growth of China’s economy deserves particular attention, but not for the reasons Trump is selling to his voters. US tariff measures have undoubtedly had some impact, but as James Kynge at the Financial Times accurately noted last week: “The reality is that China’s dynamism these days comes mostly from within, from investment and consumer spending. Trade has long since ceased to be more than a bit player in China’s growth story.” As an investment strategist noted in the column, “Net exports accounted for less than one per cent of China’s GDP.”
Why an “AI Race” Between the U.S. and China Is a Terrible, Terrible Idea. The term “AI” has become a catchall for anything algorithmic and sufficiently technologically impressive. AI, which is supposed to stand for “artificial intelligence,” now spans applications from cameras to the military to medicine. One thing we can be sure about AI — because we are told it so often and at so increasingly high a pitch — is that whatever it actually is, the national interest demands more of it. And we need it now, or else China will beat us there, and we certainly wouldn’t want that, would we? What is “there,” exactly? What does it look like, how would it work, and how would it change our society? Irrelevant! The race is on, and if America doesn’t start taking AI seriously, we’re going to find ourselves the losers in an ever-widening Dystopia Gap.A piece on Politico this week by Luiza Ch. Savage and Nancy Scola exemplifies the mix of maximum alarm and minimum meaning that’s become so typical in our national (and nationalist) discussion around artificial intelligence. “Is America ceding the future of AI to China?” the article asks.We’re meant to take this possibility as not only very real but as an unquestionably bad thing. One only needs to tell the public that the country risks “ceding” control of something — literally anything — to the great foreign unknown for our national eyes to grow wide. Our new national dread, the article continues, is “whether another Sputnik moment is around the corner” — in the form of an AI-breakthrough from the keyboards of Red China instead of Palo Alto….Rather than clamoring for a dead sprint toward some sort of national AI supremacy, defined however and by whomever, our time might be better spent worrying in earnest about what lies at the finish line.
Trump Hints No Trade Deal Until After The Election, Threatens Tariffs On French Wine - Speaking to reporters on Friday afternoon at the White House, President Trump said he "might" impose tariffs on wine from France as a "substantial reciprocal action" after France imposed a new digital tax that affects U.S. technology companies.“It might be on wine, it might be on something else,” Trump, clearly in his element, told the press corps. On Thursday, French President Emmanuel Macron signed into law a 3% tax on the revenue of technology giants like Facebook and Amazon; the tax, which is retroactive to January, affects companies with at least 750 million euros in global revenue and digital sales of 25 million euros in France. About 30 businesses would be affected; while most are American, the list also includes Chinese, German, British and even French firms. “We tax our companies, they don’t tax our companies,” Trump said; France’s tax, and Trump’s response, threaten to further strain trans-Atlantic ties as the U.S. and European Union prepare to negotiate a limited trade agreement on industrial goods. Separately, Trump also touched on the ongoing US-China trade conflict, strongly hinting that a trade deal may not be reached until November 2020, if then.Trump said that China may wait until after the 2020 U.S. presidential election to sign a trade agreement because Beijing would prefer to reach a deal with a Democrat. "I think that China will probably say, ‘let’s wait,’” Trump told reporters in the Oval Office on Friday. “When I win, like almost immediately, they’re all going to sign deals." Which, of course is wonderful news for stocks which will rally for almost a year and a half on hopes of an "imminent" trade deal, much as they have rallied for the past year.
Dollar Surges After Kudlow Says White House Ruled Out Any Currency Intervention ==In the past month there has been extensive speculation whether the Trump admin, as part of its desire to devalue the dollar against other currencies whose central banks are engaging in aggressive devaluation campaigns of their own, would pursue currency intervention as first Bank of America suggested last month, only to be followed by virtually every other research analyst, and culminating with a take from Standar Chartered's Steven Englander who said that "The US Can Intervene To Weaken The Dollar... But What Would It Buy?"To be sure there was ample reason for such speculation, not the least as a result of Trump's own July 3 tweet in which he said that "China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA. We should MATCH..."China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA. We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games - as they have for many years!— Donald J. Trump (@realDonaldTrump) July 3, 2019 Fast forward to today, when it appears that the Trump administration has had some time to reconsider if it wants to engage in outright currency war against every other developed (and developing) nation, and moments ago speaking on CNBC, Trump's chief advisor Larry Kudlow said that currency intervention is off the table: “We have as a matter of policy ruled out currency intervention,” Kudlow said. * * * Politico reports that Trump rejected Navarro's options for devaluing the dollar, with CNBC's Kayla Tausche reporting that Trump convened a cabinet-level trade meeting on Tuesday to discuss ideas to weaken dollar - including capital controls and active "jawboning" by officials on TV - however, the meeting broke with a decision not to intervene, and Navarro "didn't get through 10% of his presentation," per one official. But, as Tausche adds, "anti-interventionists worry they can't keep Navarro and Pres. Trump at bay."
Trump warns of retaliation against Guatemala after immigration deal falls through - President Donald Trump complained Tuesday that Guatemala's government broke off a planned safe third country agreement with the U.S., a deal that would have required Central American migrants traveling into Guatemala to claim asylum there instead of elsewhere.Trump tweeted that Guatemala has been forming caravans of migrants, sending “large numbers of people, some with criminal records to the United States.” In response, Trump warned, his administration would explore imposing a "ban," tariffs, remittance fees or some combination of all three. He also touted his administration's decision months ago to cut federal aid to Guatemala. “Guatemala has not been good,” Trump wrote. “Big U.S. taxpayer dollars going to them was cut off by me 9 months ago.” The tweets come after Trump's praise last month for Mexico’s attempts to intercept Central American asylum-seekers as well as his announcement that Guatemala was getting ready to do the same. But last week, the Guatemalan government canceled a meeting between Trump and President Jimmy Morales, and the country’s top court blocked asylum deal talks from progressing. Morales faced pressure at home not to sign the deal after concerns emerged that Guatemala wasn’t equipped to shelter and assist large numbers of migrants. Mexico said in the past that its ability to keep its asylum commitments depends on whether other Central American countries would do so as well. When U.S. Secretary of State Mike Pompeo and Mexican Foreign Affairs Secretary Marcelo Ebrard met Sunday, Ebrard said current immigration measures were working and an asylum deal wasn’t necessary.
US, Guatemala ink migration deal on Central American asylum-seekers - The deal may see citizens of Honduras and El Salvador forced to apply for asylum in Guatemala. In the US, the Supreme Court has given President Trump the green light to redirect funds to build part of his border wall.The United States and Guatemala have signed an immigration asylum agreement intended to control the flow of US-bound migrants from Central America, President Donald Trump announced Friday.The so-called "safe third country" agreement would require citizens of Honduras and El Salvador who enter Guatemala to apply for asylum there instead of at the US southern border, where an influx of Central American migrants has made it difficult for Trump to fulfill an election pledge to curb immigration. Neither Guatemala nor the Trump administration have provided concrete details of the migration deal. The concept of "safe third country" is a term used to describe the resettlement of refugees in a third country that has agreed to admit them and grant them permanent residence. It was unclear to what degree the agreement signed Friday prevents migrants from applying for asylum in the United States from Guatemala. Trump said the agreement would protect "the rights of those with legitimate claims," while ending the "abuse" of the asylum system and ease a crisis at the overwhelmed US southern border.
Guatemalan mother begs soldier to let her enter U.S (Reuters) - Ledy Perez fell to her haunches, a clenched hand covering her face as she wept, an arm clutching her small 6-year-old son, who glared defiantly at the Mexican National Guard soldier blocking them from crossing into the United States.The plight of this mother and son who had traveled some 1,500 miles (2,410 km) from their home country of Guatemala to the border city of Ciudad Juarez, only to be stopped mere feet from the United States, was captured by Reuters photographer Jose Luis Gonzalez as twilight approached on Monday.“The woman begged and pleaded with the National Guard to let them cross ... she wanted to cross to give a better future” to her young son Anthony Diaz, Gonzalez said. The soldier, dressed in desert fatigues, an assault rifle slung over his shoulder, said he was only following orders, according to Gonzalez. One of several images Reuters published of the scene, the photo was picked up widely on social media. It has thrown into the spotlight the role Mexico’s militarized National Guard police force is playing in containing migration, mostly from Central America.President Andres Manuel Lopez Obrador created the National Guard to bring down record homicide rates, but almost a third of its members are now assigned to patrolling the border to placate President Donald Trump’s demands of stemming the flow of U.S.-bound migrants.The soldier displayed no overt aggression during the nine-minute encounter with Perez and her son. Still, the power dynamics apparent in the image resonated with criticism of the treatment migrants are receiving during the clampdown by Mexico. Former Mexican President Felipe Calderon, who retweeted the picture after it was posted by former Mexican ambassador to the United States Arturo Sarukhan, wrote “what a pity, Mexico should never have accepted this.”
Despite Plenty Of Improvements, Trump Hasn't Built A Single Mile Of New Border Fencing - After more than two years fighting with Democrats over border security, the Trump administration has replaced plenty of dilapidated barriers - yet hasn't built a single mile of border fencing in open, unprotected sections of the southern US border, according to the Washington Examiner's Anna Giaritelli. In a statement last week, U.S. Customs and Border Protection, the federal agency overseeing border barrier construction, confirmed that all the fencing completed since Trump took office is "in place of dilapidated designs" because the existing fence was in need of replacement. -Washington ExaminerCBP said that 51 miles of steel bollard fence had been replaced using funds set aside during FY2017 and 2018, however construction of new barriers where there aren't any is 'in the works' according to the report. The 50 miles of completed replacement barrier is a 10-mile gain since early April. In Trump’s two and a half years in office, his administration has installed an average 1.7 miles of barrier per month, and none of it in areas that did not previously have some sort of barrier. A total 205 miles of new and replacement barrier has been funded in the two and a half years since Trump took office. -Washington Examiner One reason given to the Examiner for the lack of fencing in open-border regions is due to a difficult approval process for environmental zoning permits, according to a senior administration official. Another senior official blamed Democrats for blocking wall projects that the administration wants to complete."The wall projects are moving along as quickly as practicably possible given the unprecedented obstruction from Democrat lawmakers to protect and prolong open borders," wrote the official, adding "These same obstructionists, including many who once supported border barriers, are the same people who would abolish ICE and DHS, let criminals run free across our borders, and turned a blind eye to the scourge human trafficking and child sex slavery enabled by their policies."Despite the slow (or no) progress in safeguarding unsecured portions of the border, Trump is applauding his administration for
Gallup- Mentions Of Immigration As Top Problem Surpass Record High - After hitting a new high last month, mentions of immigration as the most important problem facing the U.S. increased further to 27% in July. Since Gallup began regularly recording mentions of the issue in 1993, immigration has been cited by an average of 6% of Americans, though it has been higher in recent years. There have been occasional, typically short-lived, spikes when major immigration events were occurring. The July 1-12 poll was conducted as the U.S. government continues to struggle to handle the large number of Central American immigrants attempting to enter the U.S. via the U.S.-Mexico border. The issue was brought into sharper focus in early July when Democratic congressional leaders and Republican Vice President Mike Pence made separate trips to facilities that are holding the migrants as they await asylum hearings. While Republican and Democratic leaders' assessments of the situation differed, both acknowledged overcrowded conditions and characterized the situation at the border as a crisis. Republicans have typically been more likely than Democrats and independents to name immigration as the most important problem, and that is still the case. In the latest survey, 42% of Republicans, 20% of independents and 20% of Democrats mention immigration.All political groups are more likely to mention immigration now than earlier this year. In March, when a 2019-low 16% of Americans identified immigration as the most important problem, 31% of Republicans, 14% of independents and 6% of Democrats did. Immigration now sits at the top of the "most important problem" list for just the fourth time in Gallup's trend, having also done so in July 2014, July 2018 and November 2018. The issue edged out the government, which has been a fixture at or near the top of the list throughout the latter part of the Obama administration and the Trump administration. Race relations or racism (7%) and healthcare (7%) are the only other two issues to receive as many as 5% of mentions this month.
As The US Debates “Concentration Camps,” These Jews Are Trying To Actually Shut Them Down - In a messy Airbnb in northeast Washington, DC, Alyssa Rubin, 25, and Ben Doernberg, 30, passed a stale loaf of challah back and forth on Monday as they planned how they were going to shut down ICE. About 15 activists from cities all over the US stayed in the house this week — sleeping on mismatched couches, a futon, and the floor — to pull off their biggest action yet: a march on Tuesday from the National Mall to the ICE headquarters, where they planned to quite literally shut the building down. There’s been a lot of talk in recent months about Jewish identity and anti-Semitism in the US. First-year Democrat Rep. Ilhan Omar had to apologize in February for tweets against the pro-Israel lobby that she later seemed to acknowledge could be interpreted as containing “anti-Semitic tropes” — although she denied this was her intention. Then last month Ilhan’s fellow “Squad” member Rep. Alexandria Ocasio-Cortez drew backlash from Republicans and Democrats when she used the term “concentration camps” to describe immigrant detention centers. Vice President Mike Pence said she had “cheapened” the memory of the Holocaust “to advance some left-wing political narrative,” while New York Gov. Andrew Cuomo called it a “wholly inappropriate comparison.” Even the USHolocaust Memorial museum in DC took offense. But while politicians debate semantics, and the media discusses whether Jewish identity is being coopted as a political “shield,” these young Jews are instead taking action. For them, there are clear and painful parallels between their relatives’ past and the present treatment of undocumented immigrants — and their Jewish identity is compelling them to do something about it. So over the course of just three weeks, they’ve been working day and night to build a movement to upend Trump’s immigration policy and close the detention centers once and for all.
Jewish Groups and Synagogues Prepare to Shelter Immigrants During ICE Raids— The Jewish community in New York mobilized Sunday to help undocumented immigrants who are at risk of being rounded up for deportation, as families and others braced for U.S. Immigration and Customs Enforcement raids that President Donald Trump said would begin that day.The raids threaten some 2,000 undocumented immigrants in several major American cities, including Chicago, Houston, Los Angeles, Miami and New York. In past weeks, immigrant communities have prepared themselves for the roundup, reporting widespread fear. According to CNN, “They've been stocking up on groceries and making plans to stay in their homes with the lights off and the blinds down.” They have also been counseling each other on what to do if ICE agents appear at their doors, posting signs within their homes as reminders. The New York Times reported Sunday that plans for the operation “were changed at the last minute because of news reports that had tipped off immigrant communities about what to expect,” with current and former Department of Homeland Security officials saying that “instead of a large simultaneous sweep, the authorities created a secondary plan for a smaller and more diffuse scale of apprehensions to roll out over roughly a week.”The organization T’ruah: The Rabbinic Call for Human Rights joined the New Sanctuary Coalition, a network of houses of worship around the New York area that are offering a haven to undocumented immigrants during the raids.
ICE Arrests Only 35 Out Of 2,000 Migrants Targeted In Operation Border Resolve - Despite resistance from Democrats and hysterical accusations about the administration's policy of running 'concentration camps' at the Southern border, the Trump Administration carried out its long-planned immigration raids last week. Unfortunately, the raids weren't as successful as ICE might have hoped, which is probably why the administration didn't go out of its way to publicize the results. But somehow, the New York Times got its hands on the numbers, reportedly leaked by senior Homeland Security officials who may or may not have an axe to grind. This is what the paper reported: Out of 2,105 migrants targeted in more than a dozen cities, ICE succeeded in arresting 35. That's a success rate of just over 1.6%. Officials privately blamed the flop on the fact that President Trump gave the raids - which he named Operation Border Resolve - so much publicity. The operation was planned as a "show of strength" amid the continuing crisis at the border, even as the number of arrests and the number of people crossing the border has retreated slightly since the highs reached in the spring.For example, Trump warned that the raids would target migrants who had received final deportation orders, but who had not reported to ICE to begin the deportation process. These migrants then had weeks - thanks to repeated delays - to consult immigration lawyers, turn to the help of nonprofit groups or temporarily leave their homes for periods of time to evade arrest.Pro-immigration non-profit groups leapt into action, and started counseling families about their rights and advised them on tactics to avoid ICE, such as refusing to open their doors for ICE agents. They also established a network of volunteers who gathered information on ICE agent sightings and shared it on social media. In an interview Monday, the acting head of ICE, Matthew Albence, acknowledged the low number of arrests. Albence blamed the social justice warriors and others for making it "harder for us to effectuate these orders."
ACLU sues U.S. border agencies over targeting of activists, lawyers at border - NBC — The American Civil Liberties Union has sued three government agencies on behalf of immigration activists who were allegedly surveilled and flagged for questioning when crossing the U.S.-Mexico border because of their work with immigrants, according to court documents filed in the Central District of California. The complaint alleges that the three plaintiffs — activists Nora Elizabeth Phillips, Erika Da Cruz Pinheiro and Nathaniel Garrett Dennison — were targeted for "detention and interrogation" under a "secret investigative program designed to monitor these humanitarian workers ... and impede their ability to travel." The suit names Immigration and Customs Enforcement, Customs and Border Protection and the FBI as defendants, as well as FBI Director Christopher Wray and Acting ICE Director Matthew Albence.In March, NBC News and NBC 7 San Diego uncovered details of the program after obtaining a CBP list of names of journalists, activists and lawyers who were to be stopped by CBP agents when crossing the border. The ACLU cited the reporting as the impetus for the lawsuit."The disclosure of the secret program spurred outrage from civil society organizations, prompted members of Congress to call for an inquiry into the agencies' actions, and led Customs and Border Protection's Inspector General to initiate its own investigation into surveillance," the lawsuit said. The list obtained in March targeted only immigration workers in the San Diego area, but an NBC News report later found that activists and lawyers in other areas, such as El Paso, were also targeted.
No shower for 23 days: U.S. citizen says conditions were so bad that he almost self-deported - - Francisco Erwin Galicia, a Dallas-born U.S. citizen, spent 23 days in the custody of U.S. Customs and Border Protection in conditions that made him so desperate he almost opted to self-deport.Galicia says he lost 26 pounds during that time in a South Texas immigrant detention center because officers didn’t provide him with enough food. He said he wasn’t allowed to shower and his skin was dry and dirty. He and 60 other men were crammed into an overcrowded holding area where they slept on the floor and were given only aluminum-foil blankets, he said. Some men had to sleep on the restroom area floor.Ticks bit some of the men and some were very sick, Galicia said. But many were afraid to ask to go to the doctor because CBP officers told them their stay would start over if they did, he said. “It was inhumane how they treated us. It got to the point where I was ready to sign a deportation paper just to not be suffering there anymore. I just needed to get out of there,” he said.
U.S. to expand rapid deportation nationwide with sweeping new rule - The Trump administration said on Monday it will expand and speed up deportations of migrants who enter the United States illegally by stripping away court oversight, enabling officials to remove people in days rather than months or years. Set to be published in the Federal Register on Tuesday, the rule will apply “expedited removal” to the majority of those who enter the United States illegally, unless they can prove they have been living in the country for at least two years. Legal experts said it was a dramatic expansion of a program already used along the U.S.-Mexican border that cuts out review by an immigration judge, usually without access to an attorney. Both are available in regular proceedings. “The Trump administration is moving forward into converting ICE (Immigrations and Customs Enforcement) into a ‘show me your papers’ militia,” said Vanita Gupta, the president of The Leadership Conference on Civil and Human Rights, on a call with reporters. It was likely the policy would be blocked quickly by a court, several experts said. The American Civil Liberties Union, which has filed suit to block numerous Trump immigration policies in court, has vowed to sue. President Donald Trump has struggled to stem an increase of mostly Central American families arriving at the U.S.-Mexico border, leading to overcrowded detention facilities and a political battle over a growing humanitarian crisis. The government said increasing rapid deportations would free up detention space and ease strains on immigration courts, which face a backlog of more than 900,000 cases. Nearly 300,000 of the approximately 11 million immigrants in the United States illegally could be quickly deported under the new rule, according to the nonpartisan Migration Policy Institute.
US immigration agents use children to inflict terror on migrant families - Three recent incidents highlight the depravity of the US government’s bipartisan war on immigrants.In each of these incidents, immigration agents used children to terrorize families seeking asylum. Together, they represent the latest escalation in the Trump administration’s policy, laid out in a 2018 notice of proposed rulemaking, of abusing immigrants, in violation of previous court rulings, to deter people fleeing war and violence from seeking asylum in the United States. Three children, between the ages of nine and 13, who are all US citizens, were detained overnight on Thursday at O’Hare International Airport in Chicago, Illinois in an apparent attempt to lure and arrest their undocumented mother. The children, who were travelling from Mexico with the mother’s adult niece, were detained upon landing at O’Hare. Despite having a valid visa, the niece was deemed inadmissible and put on a flight back to Mexico. A crowd of protesters immediately formed outside the airport to demand that the children be released. It is extremely rare for visa holders to be deemed inadmissible and turned away at a port of entry because inadmissibility factors are usually dealt with in the process of obtaining the visa. After turning away the children’s cousin, Border Patrol agents contacted their mother and falsely told her that they could not release the three from the airport unless she personally came to retrieve them. The mother, who has asked to be identified only as “Sylvia” out of fear of retribution, feared that the agents were setting a trap to arrest and deport her while her petition for residency is pending. According to her attorney, Mony Ruiz-Velasco, she is applying for a U visa, which means she has already been the victim of a violent crime and assisted prosecutors as a witness. After her attempts to send US-citizen relatives to retrieve her children were all rebuffed by the agents, Sylvia turned to the Mexican Embassy. “I was really scared but I reacted and thought, we have rights and I called the Mexican Consulate,” Despite having a pending visa application, and the lack of any legal justification for holding the children, it took the intervention of the Mexican government and Democratic US Representative Jan Schakowsky to secure an agreement from CBP guaranteeing Sylvia’s safety while she retrieved her children. Finally, after 13 hours of torment, the family was safely reunited.
A Border Patrol Agent Reveals What It’s Really Like to Guard Migrant Children - The Border Patrol agent, a veteran with 13 years on the job, had been assigned to the agency’s detention center in McAllen, Texas, for close to a month when the team of court-appointed lawyers and doctors showed up one day at the end of June. Taking in the squalor, the stench of unwashed bodies, and the poor health and vacant eyes of the hundreds of children held there, the group members appeared stunned. Then, their outrage rolled through the facility like a thunderstorm. One lawyer emerged from a conference room clutching her cellphone to her ear, her voice trembling with urgency and frustration. “There’s a crisis down here,” the agent recalled her shouting. At that moment, the agent, a father of a 2-year-old, realized that something in him had shifted during his weeks in the McAllen center. “I don’t know why she’s shouting,” he remembered thinking. “No one on the other end of the line cares. If they did, this wouldn’t be happening.” . “I wanted to tell her the rest of us have given up.” It’s rare to hear from Border Patrol agents, especially since the Trump administration has put them at the front lines of its sweeping immigration crackdown. Public access to them is typically controlled and choreographed. When approached off duty, agents say they risk their jobs if they speak about their work without permission. As a result, much about the country’s largest federal law enforcement agency — with some 20,000 agents policing the borders and ports — remains shrouded in secrecy, even from congressional oversight, making it nearly impossible to hold it accountable. Disturbing glimpses of some agents have recently begun to fill the void, including some that were published recently after ProPublica obtained screenshots from a secret Facebook group for current and former Border Patrol agents that showed several agents and at least one supervisor had posted crude, racist and misogynistic comments about immigrants and Democratic members of Congress. But there was some nuance. An account of life inside a Border Patrol detention facility outside El Paso, Texas, by The New York Times and The El Paso Times, revealed that two agents there had expressed concerns about the conditions to their supervisors. The agent who spent June in McAllen doesn’t see his reality in any of those depictions. He’s in his late 30s and is a husband and father who served overseas in the military before joining the Border Patrol. He asked not to be identified because he worried that his candor could cost him his job and thrust him and his family into the middle of the angry public debate over the Trump administration’s border policies.
Trump administration rule would cut 3 million people from food stamps (Reuters) - The Trump administration on Tuesday proposed a rule to tighten food stamp eligibility that would cut about 3.1 million people from the program, U.S. Department of Agriculture (USDA) officials said. The administration billed the move as a way to save money and help eliminate what it sees as widespread abuse of the program, but Democrats and advocacy groups criticized it as an attack on the nation’s poorest. “This rule would take food away from families, prevent children from getting school meals, and make it harder for states to administer food assistance,” said Democratic Senator Debbie Stabenow, ranking member of the Senate Committee on Agriculture, Nutrition and Forestry. Currently, 43 U.S. states allow residents to automatically become eligible for food stamps through the Supplemental Nutrition Assistance Program, or SNAP, if they receive benefits from another federal program known as Temporary Assistance for Needy Families, or TANF, according to the USDA. The agency wants to change that by requiring people who receive TANF benefits to pass a review of their income and assets to determine whether they are also eligible for free food from SNAP, officials said. If enacted, the rule would save the federal government about $2.5 billion a year by removing 3.1 million people from SNAP, according to the USDA. President Donald Trump has long argued that many Americans using SNAP do not need it given the strong economy and low unemployment, and should be removed as a way to save taxpayers as much as $15 billion. “Some states are taking advantage of loopholes that allow people to receive the SNAP benefits who would otherwise not qualify and for which they are not entitled,” USDA Secretary Sonny Perdue told reporters on a conference call on Monday.
Attorney General William Barr orders first federal executions in nearly two decades - The federal government will resume executing death row inmates after nearly two decades without doing so, the Department of Justice announced Thursday. Attorney General William Barr directed the Bureau of Prisons to schedule the executions of five inmates convicted of murder and other crimes. The executions have been scheduled for December 2019 and January 2020. The department also announced a new execution protocol, replacing the three-drug cocktail previously used in federal executions with the single drug, pentobarbital. The last federal execution was carried out in 2003. There are 62 individuals on federal death row, according to a tracker maintained by the Death Penalty Information Center. The Supreme Court outlawed state and federal death penalty laws in the 1972 decision Furman v. Georgia. The ruling invalidated the laws then on the books, but did not outlaw the death penalty under all circumstances, leading states and the federal government to draft new legislation. The federal death penalty was reinstated in 1988, and expanded by Congress in 1994. No federal executions took place, however, until 2001, according to to the Bureau of Prisons website. “Congress has expressly authorized the death penalty through legislation adopted by the people’s representatives in both houses of Congress and signed by the President,” Barr said in a statement. “Under Administrations of both parties, the Department of Justice has sought the death penalty against the worst criminals, including these five murderers, each of whom was convicted by a jury of his peers after a full and fair proceeding.” Executions have been scheduled for Daniel Lewis Lee, Lezmond Mitchell, Wesley Ira Purkey, Alfred Bourgeois and Dustin Lee Honken, according to the Justice Department. In its release, the DOJ provided brief summaries of the crimes committed by each inmate.
McConnell moves to confirm 19 judges next week - Senate Majority Leader Mitch McConnell on Thursday set up votes on lifetime appointments for 19 judicial nominees next week, setting up a busy pre-recess work session on a top GOP priority. McConnell’s move means likely confirmation of 19 District Court judges; the GOP leader had focused on higher-level Circuit Court judges for the first 30 months of Donald Trump’s presidency, filling all but four vacancies on the appeals courts. Now McConnell is beginning to work his way through the 111 District Court vacancies even as the House heads home for the summer this week. Senate Democrats are fighting the confirmations , requiring McConnell to force procedural votes on each nominee. But under a GOP rules change earlier this year triggered by the “nuclear option,” Democrats can only delay each of those nominees by two hours a piece next week rather than 30 hours, the previous limit. A handful of those judges will likely receive significant bipartisan support. The Senate is also set confirm Kelly Craft as ambassador to the United Nations and David Norquist as deputy Defense secretary and is likely to approve a two-year budget deal struck by Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin. “Not bad for a week’s work and that’s what the Senate will accomplish before we adjourn for August,” McConnell said on the floor.
CIA Wants To Make It Easier To Jail Journalists, & Congress Isn't Stopping It - Free speech has been on the chopping block for a long time. Journalists are already silenced and have to ask the government for permission before running stories while alternative media is censored and blocked by Google’s search algorithms. But now it’s getting worse, and Congress isn’t stopping it. The CIA (Central Intelligence Agency) wants to make it a whole lot easier to throw journalists in jail if they say or write the wrong things. According to Tech Dirty, the CIA is pushing for an expansion of a 37-year-old law that would deter journalists from covering national security issues or reporting on leaked documents (such as those Julian Assange posted to Wikileaks and is rotting in a jail cell for). Thanks to a disillusioned CIA case officer’s actions in 1975, there are currently a few limits to what can or can’t be reported about covert operatives working overseas. In 1975, Philip Agee published a memoir about his years with the CIA. Attached to his memoir — which detailed his growing discontentment with the CIA’s clandestine support of overseas dictators — was a list of 250 CIA agents or informants. In response to this disclosure, Congress passed the Intelligence Identities Protection Act (IIPA), which criminalized disclosing the identity of covert intelligence agents. It also required the government to show proof the person making the disclosure was “engaged in a pattern of activities intended to identify and expose” covert agents. The law was amended in 1999 to expand the coverage to include covert agents working overseas within five years of the disclosure. –Tech Dirty The CIA wants all of these protections for journalists removed, including the word “overseas.” This would allow the CIA (and all other intelligence agencies) to designate whoever they want as “protected” by the IIPA in perpetuity, and jail those who report about things the government wants to keep from the prying eyes of the public.
Trump’s Weaponization of Israel to Defend Racism Raises Serious Concerns — US President Donald Trump has continued his extraordinary racist tirade against Muslim American Congresswoman Ilhan Oman by painting the Minnesota Democrat as a fan of the terrorist group Al-Qaeda.Trump claimed during a campaign rally that Omar was “proud” of Al-Qaeda. “You say Al-Qaeda, it makes you [Omar] proud, Al-Qaeda makes you proud!” he is reported saying by NBC News. The remarks were made in reference to a recent interview in which Omar refused to answer questions about the spurious allegation which has been stoked up by the president’s followers and the right-wing media that she supports the terrorist group.“When asked whether she supported Al-Qaeda, that’s our enemy — that’s our enemy she refused to answer. She didn’t want to give an answer to that question,” said Trump. His portrayal of what Omar actually said has been denounced as a complete misrepresentation and a further indication that the US president has made racist attacks on the four non-white Congresswomen, Rashida Tlaib, who is of Palestinian descent, Alexandria Ocasio-Cortez, Ayanna Pressley and Somali-born Ilhan Omar, a major strategy in his re-election. Omar’s comments at news conference earlier this week came as a reaction to Trump’s repeated accusations that she is supportive of Al-Qaeda. “I will not dignify it with an answer,” Omar is reported saying. She continued: “I do not expect every time there is a white supremacist who attacks, or there is a white man who kills in a school or in a movie theatre or in a mosque or in a synagogue, I don’t expect my white community members to respond on whether they love that person or not. And so I think it is beyond time … to ask Muslims to condemn terrorists.” Contrary to Trump’s claim, Omar in fact answered the question, though perhaps not in a way that he would have liked. Omar’s remarks were an appeal to be treated equally and not scapegoat an entire community for the heinous actions of mindless individuals.
Ethics Complaint Filed Against Rep. Ilhan Omar; Accused Of Immigration, Tax And Student Loan Fraud - Following an extensive three-year investigation into Rep. Ilhan Omar by investigative journalist David Steinberg, a House ethics complaint has been filed by Judicial Watch calling for a probe into potential crimes committed by Omar and her brother. ccording to the complaint, "Substantial, compelling and, to date, unrefuted evidence has been uncovered that Rep. Ilhan Omar may have committed the following crimes in violation of both federal law and Minnesota state law: perjury, immigration fraud, marriage fraud, state and federal tax fraud, and federal student loan fraud." "The evidence is overwhelming Rep. Omar may have violated the law and House rules. The House of Representatives must urgently investigate and resolve the serious allegations of wrongdoing by Rep. Omar," said Judicial Watch president Tom Fitton. "We encourage Americans to share their views on Rep. Omar’s apparent misconduct with their congressmen." Laid out in the complaint, as compiled in Steinberg's research: Rep. Ilhan Abdullahi Omar, a citizen of the United States, married her biological brother, Ahmed Nur Said Elmi, a citizen of the United Kingdom, in 2009, presumably as part of an immigration fraud scheme. The couple legally divorced in 2017. In the course of that divorce, Ms. Omar submitted an “Application for an Order for Service by Alternate Means” to the State of Minnesota on August 2, 2017 and claimed, among other things, that she had had no contact with Ahmed Nur Said Elmi after June 2011. She also claimed that she did know where to find him. The evidence developed by Mr. Steinberg and his colleagues demonstrates with a high degree of certainty that Ms. Omar not only had contact with Mr. Elmi, but actually met up with him in London in 2015, which is supported by photographic evidence. Ms. Omar signed the “Application for an Order for Service by Alternate Means” under penalty of perjury. The very document that Ilham Omar signed on August 2, 2017 bears the following notation directly above her signature: “I declare under penalty of perjury that everything I have stated in this document is true and correct. Minn. Stat. § 358.116.” Of particular importance are archived photographs taken during a widely reported trip by Ilhan Omar to London in 2015, posted to her own Instagram account under her nickname “hameey”, in which she poses with her husband/presumed brother, Ahmed Elmi. These photographs from 2015 are documentary evidence that in fact she met up with Mr. Elmi after June 2011 and before the date she signed the divorce document in August 2017, thereby calling into question the veracity of her claim that she had not seen Mr. Elmi since June 2011.
Cesar Sayoc was radicalized by Trump and Fox News, his lawyers claim -- Cesar Sayoc, who spawned a week of panic and a massive federal manhunt last October after he mailed a series of pipe bombs to prominent Democrats and media figures, was a cognitively limited and emotionally traumatized man who fell into a paranoid alternate reality thanks to misinformation and Trump’s rhetoric, his lawyers argued this week.Sayoc, 57, pleaded guilty to 65 federal charges in March, including “use of a weapon of mass destruction.” He was nicknamed the “MAGA bomber” by the tabloids, after federal agents discovered his van adorned with pro-Trump stickers.Sayoc is facing life imprisonment when he is sentenced in August, but his public defenders have asked the judge to show leniency and sentence him to 10 years because of mitigating factors, including his mental state, the effect of misinformation on him, and the fact that none of the crudely-designed bombs he sent actually went off.According to his lawyers, Sayoc was born with “cognitive limitations and severe learning disabilities that made it difficult for him to maintain relationships and succeed in school.” He was abandoned by his father at a young age and sexually assaulted while at school. Sayoc’s home foreclosed on in 2009 and he was a regular user of steroids, which “increased his feelings of anxiety and paranoia.”
Trump sues House Ways and Means panel to block disclosure of his tax returns - President Donald Trump on Tuesday filed a lawsuit against the Democrat-led House Ways and Means Committee, as well as New York state’s attorney general and its tax chief, to block the disclosure of years of his tax returns. The president’s lawsuit, which was filed “in his capacity as a private citizen,” came less than a month after the Ways and Means Committee sued the Treasury Department and the Internal Revenue Service to obtain Trump’s federal returns. Trump’s new legal action intervenes in that suit, according to the complaint filed in U.S. District Court in Washington, D.C. Trump’s lawyers argue that the House panel “lacks a legitimate legislative purpose” to use a recently passed New York state law to get Trump’s returns. They also claim that that state law violated the president’s First Amendment rights, because it was enacted to “discriminate and retaliate against President Trump for his speech and politics.” “We have filed a lawsuit today in our ongoing efforts to end Presidential harassment,” said Trump’s lawyer Jay Sekulow in a statement. “The actions taken by the House and New York officials are nothing more than political retribution.” Trump has refused to show his tax documents before or after winning the 2016 presidential election, despite a longstanding tradition among modern presidential candidates to disclose their returns.
How Trump’s businesses are booming with lobbyists, donors and governments From Florida to New York to Scotland and many other places, Donald Trump’s business empire has attracted a growing clientele of lobbyists, foreign governments, big donors and other Trump allies looking to curry favor, and helping generate hundreds of millions of dollars for his golf course resorts, condos and hotels. While much attention has focused on Trump’s Washington DC hotel as a honeypot for those seeking to influence the administration, Trump’s broader property empire across the US – and overseas – also concerns critics who say the president is using his office for financial benefit. During his first two full years as president, Trump’s revenues from his far-flung real estate business, which his two eldest sons are running while he is president, totaled at least $886m, according to Trump’s annual financial disclosures. Trump’s controversial decision not to completely sever ties to his real estate interests in the US and overseas, or put his assets in a blind trust to limit conflicts of interest, has sparked strong condemnation from ethics watchdog groups, political analysts and congressional Democrats. The financial web of ties between the president and his various properties is underscored by all manner of fundraising bashes, lobbyist meetings and foreign stays at Trump’s properties, spawning legal and ethics complaints. “Whether accepting money from political candidates, lobbyists or foreign governments, the president’s businesses seem all too willing to promote the message that the presidency is for sale,” Congressman Elijah Cummings, the chairman of the House oversight and reform committee, said in a statement. According to his annual financial disclosures, Trump’s top revenue-producing properties have done handsomely by hosting fundraisers, lobbyist meetings and foreign delegations. They include:
- • The Trump National Doral Golf Club in Miami, a favorite hangout for lobbyists and donors with ties to Trump, is a leading revenue source, yielding close to $151m in his first two years as president. Notably, the Doral club hosted annual meetings in 2018 and 2019 for a business group of payday lenders whose exorbitant interest rates sparked a regulatory crackdown by the Obama administration, but have been cheered by recent Trump administration rollbacks.
- • Trump’s self styled “summer White House” in Bedminster, New Jersey, had revenues of $30.8m in the same two-year period. On 19 July, Trump’s campaign and the Republican National Committee are slated to host a big fundraiser in Bedminster where donors who pony up $100,000 can get their picture taken with Trump, enjoy a roundtable chat with him and other perks.
- • Mar-a-Lago, the swanky Palm Beach club where Trump doubled the annual membership fee to $200,000 when he became president, pulled in revenues totaling $48m in the two-year period. As ProPublica first revealed, a trio of wealthy Mar-a-Lago members, who are friends of Trump, played a big role in shaping policy at the Department of Veterans Affairs, spurring a House panel to look into allegations of “improper influence”.
- • Trump’s Turnberry golf resort in Scotland, which Trump has visited and promoted in tweets while in office as “incredible”, notched revenues of $43.8m in 2017 and 2018.
What Goes Around -- Kunstler - Though Mr. Mueller’s final report asserted that the Russian government interfered in “a sweeping and systemic fashion” to influence the 2016 election, the 450-page great tome contains zero evidence to support that claim, and the discrepancy was actually noticed by federal judge Dabney Friedrich who is presiding over the case against the alleged Russian Facebook trolls that was one of the two tent-poles in the RussiaGate fantasy. The case is now blowing up in Robert Mueller’s face. In early 2018, Mr. Mueller sold a DC grand jury on producing indictments against a Russian outfit called the Internet Research Agency and its parent company Concord Management, owned by Russian oligarch Yevgeny Prigozhin for the so-called election meddling. The indictment was celebrated as a huge coup at the time by the likes of CNN and The New York Times, styled as a silver bullet in the heart of the Trump presidency. But the indicted parties were all in Russia, and could not be extradited, and there was zero expectation that any actual trial would ever take place — leaving Mueller & Co. off-the-hook for proving their allegations. To the great surprise of Mr. Mueller and his “team,” Mr. Prigozhin hired some American lawyers to defend his company in court. Smooth move. It automatically triggered the discovery process, by which the accused is entitled to see the evidence that prosecutors hold. It turned out that Mr. Mueller’s team had no evidence that the Russian government was involved with the Facebook pranks. This annoyed Judge Friedrich, who ordered Mr. Mueller and his lawyers to desist making public statements about Concord and IRA’s alleged “sweeping and systemic” collusion with Russia, and threatened legal sanctions if they did. Judge Friedrich’s rulings were unsealed in early July, after Messers Nadler and Schiff had already scheduled Mr. Mueller’s testimony before their committees. And now they’re stuck with him. The only purpose of his appearance was to repeat and reinforce the narrative that the Russian government interfered in the election, which he is now forbidden to do, at least in connection to the Concord and IRA’s activities. But the other tentpole of the two-year-plus inquisition has also collapsed: the allegation that Russian intel hacked the DNC servers. It’s now a matter of public record that the DNC servers were never examined by federal officials. They were purportedly scrutinized by a DNC contractor called CrowdStrike, co-founded by Russian Dimitri Alperovitch, an adversary of Vladimir Putin, active in US-based anti-Putin lobbying and PR. CrowdStrike’s “draft” report on their review of the server was laughably incomplete, and the Mueller team’s lawyers took no steps to validate it.
Paul Craig Roberts- Mueller Should Be Arrested For Conspiracy To Overthrow POTUS - The Mueller report, which had no choice as there was no evidence, but to clear Donald Trump of conspiring with Russian President Putin to steal the last US presidential election from Hillary Clinton, nevertheless managed to keep an aspect of the manufactured hoax known as “Russiagate” alive by indicting some Russian intelligence officers and a Russian Internet clickbait operation for attempting to discredit Hillary with Internet postings. At the time I noticed that Muller’s indictments were based only on his assertion and not on any evidence. As there was no prospect whatsoever of the fake indictments coming to trial, I did not comment on them. I focused instead on Mueller’s statement that Trump might have obstructed justice although he lacked evidence to support the charge. I noted how corrupt American law has become when it is possible to obstruct justice in the absence of a crime. Democrats and presstitutes were determined to get Trump by any means and remain uninterested in how justice is obstructed when there is no crime. In retrospect, not picking up on Mueller’s indictment-by-hearsay of Russians was a mistake. Not only have the Democrats continued their Russiagate campaign on the basis of the unsubstantiated indictments, but, more importantly, the indictments-by-assertion-alone show Mueller’s total lack of moral character. A prosecutor, indeed a former Director of the FBI, who confuses his unsubstantiated allegation with evidence, is not only a person devoid of any respect for law, but also an extremely dangerous person to have been vetted for the high government positions that he has held. How did a person as corrupt as Robert Mueller get confirmed in his appointments as US Attorney, US Assistant Attorney General, US Deputy Attorney General, and Director of the FBI? That a person as ethically-challenged as Robert Mueller could breeze through so many confirmations by the US Senate proves how utterly corrupt the US government is. That Mueller’s indictment of Russians for attempting to throw the presidential election to Trump is unsubstantiated has been highlighted by US Federal District Judge Dabney Friedrich. The judge just ruled that Mueller’s assertion of Russian “sweeping and systematic” interference in the presidential election does not constitute proof of the charge. It is nothing but an unsubstantiated indictment based on nothing but an assertion by the special prosecutor. Mueller provides no evidence in his report to support his claim. Mueller is so corrupt that he uses his unsubstantiated indictment as evidence for the indictment! In other words, the Federal Judge has ruled that Mueller has made a false indictment. If that is not a felony, it should be.
DOJ tells Mueller to limit testimony to his report - Justice Department officials have communicated to Robert Mueller that the department expects him to limit his congressional testimony this week to the public findings of his 448-page report, according to one current and one former U.S. official familiar with the preparations. In extensive discussions since the former special counsel was subpoenaed on June 25 to testify, department officials have emphasized that they consider any evidence he gathered throughout the course of his investigation to be “presumptively privileged” and shielded from public disclosure. The Justice Department is “taking the position that anything outside the written pages of the report are things about which presidential privilege hasn’t been waived,” the former U.S. official said. The White House and the Justice Department, however, have signaled they don’t intend to place lawyers in the room during Mueller’s highly anticipated testimony before the House Judiciary and Intelligence committees on Wednesday. Without a presence at the hearing, administration officials would have little recourse to prevent Mueller from going off-script and revealing details of his investigation that the White House considers off-limits. They are poised instead to rely on Mueller to self-police his remarks, indicating that they are confident the former special counsel will stick to carefully planned comments that mirror the already disclosed findings of his investigation. Their stance cuts against President Donald Trump’s own protestation that Mueller shouldn’t be allowed to testify, which he reiterated on Monday. “Highly conflicted Robert Mueller should not be given another bite at the apple,” Trump tweeted on Monday morning.
Pelosi, Democrats launch Mueller messaging blitz - House Democrats on Tuesday will launch an aggressive communications campaign to highlight Robert Mueller's sweeping investigation into Russian election interference just ahead of the former special counsel's appearance before Congress for a pair of hotly anticipated hearings.The office of Speaker Nancy Pelosi (D-Calif.) has crunched Mueller's 448-page report into a six-page document featuring the former FBI director's most damning findings, which will be distributed Tuesday to Democratic lawmakers to guide their outreach to voters as all eyes in Washington turn to Mueller's testimony.Dubbed "Exposing the Truth," the six-page memo was coordinated between Pelosi's office and the two House committees where Mueller will appear on Wednesday: Judiciary, chaired by Rep. Jerrold Nadler (D-N.Y.), and Intelligence, led by Rep. Adam Schiff (D-Calif.). From a messaging standpoint, the operation, along with an accompanying social media campaign, is designed to put a public spotlight on both the vulnerabilities in America's election system and President Trump's conduct before and after winning the White House, as noted by Mueller's findings. As a political tool, it's meant to pressure Republicans to consider the election, ethics and national security reforms Democrats have pushed heading into the polls next year.
Mueller on Trump: Everything the Special Counsel’s Report Says the President Did, Said or Knew - Lawfare - Robert Mueller is testifying before Congress on Wednesday, and members will no doubt ask him repeatedly for his views and findings about President Trump. Mueller has made clear that he has no intention of going beyond what he said in the report itself, which he called “his testimony.” He will likely be firmest on this point with respect to the sensitive issue of presidential conduct.So for those who want to figure out what Mueller has said about Trump, here is a list: all of Trump’s actions as detailed in the Mueller report.This list includes everything Trump said or did, actions others recall him taking, and recollections of when Trump was informed of events and facts relevant to the investigation. In other words, it’s an account of everything the president did, said or knew, according to the Mueller report.Each of the following section headers and excerpts is presented verbatim and sequentially as they appear in the report. We have included responses to or circumstances surrounding the president’s actions only to the extent that they provide necessary context. This list does include the president’s written responses to Mueller’s questions, which are included in Appendix C of the report. Redactions that appear in the original report are identified through bracketed text (“[ ]”) describing the stated basis for the redaction.
Mueller says Trump was not exonerated; Trump declares victory (Reuters) - Former Special Counsel Robert Mueller emphasized on Wednesday he had not exonerated Donald Trump of obstruction of justice, as the president has claimed, but his long-awaited congressional testimony did little to add momentum to any Democratic impeachment ambitions and Trump heartily declared victory. In seven hours of congressional testimony, Mueller accused Trump of not always being truthful, called his support for the 2016 release of stolen Democratic emails “problematic” and said Russia would again try to interfere in the 2020 U.S. elections. “They are doing it while we sit here. And they expect to do it in our next election,” Mueller told lawmakers in back-to-back hearings on his inquiry into Russian interference in the 2016 U.S. election to boost Republican Trump’s candidacy. Despite Mueller’s assertion that Trump could be indicted after leaving office, the president was triumphant after the former FBI director’s appearances before the Democratic-controlled House of Representatives Judiciary and Intelligence committees. “This was a very big day for the Republican Party. And you could say this was a great day for me, but I don’t even like to say that,” Trump said after Mueller’s lengthy and at times halting testimony during which he sometimes could not hear questions and had to correct at least one answer.
Five takeaways from Mueller's marathon testimony - Former special counsel Robert Mueller spent almost seven hours testifying Wednesday on Capitol Hill, fielding lawmaker questions about his investigation into whether the Trump campaign conspired with Russia to interfere with the 2016 election and if President Trumpobstructed justice. In many ways, the hearing went as expected — Mueller declined to answer a wide swath of questions, and other times responded with one-word answers.Democrats used their allotted time to shine a spotlight on key details from the 448-page report, while Republicans used their line of questioning to cast doubt on the origins of the 22-month investigation and the credibility of the special counsel’s office.The back-to-back testimony before the House Judiciary and Intelligence committees yielded little new information, though they did succeed in elevating some aspects of Mueller’s report into the public spotlight.Here are five takeaways from Mueller’s testimony.
- Mueller dodges and disappoints. Mueller, who had spoken publicly only one other time about his investigation, did not always appear sure-footed when responding, and at times flatly declined to answer questions.Bolstered by instructions by the Justice Department that he limit his testimony, Mueller refused to indulge Republican inquiries about the so-called Steele dossier. He also sidestepped questions from Democrats about his opinion on the president’s conduct and impeachment.
- Both sides dig in. During and following both hearings, Republicans and Democrats doubled down on their already established positions regarding the Mueller report.
- Impeachment efforts unlikely to get a boost. House Democrats had high hopes for Mueller’s congressional appearance, particularly among the impeachment crowd. But his testimony appears to have done little to move the needle on impeachment. While many Democrats publicly heralded Mueller’s testimony as a resounding success, he did not substantively give Trump’s critics much in the way of new ammunition.
- Republicans land some punches. GOP lawmakers were able to land some blows early on in the hearings, as Mueller struggled in the hot seat. Rep. John Ratcliffe (R-Texas), who was yielded time by GOP colleagues during both hearings, emerged as one of the more memorable Republicans in questioning Mueller. The former federal prosecutor grilled Mueller on his decision to not fully exonerate Trump from accusations of collusion with Russia, claiming Mueller broke with Justice Department principles.
- Mueller dings Trump. Mueller wasn't always direct in his remarks about Trump, but he made a few critical statements about the president. In his strongest criticism of Trump to date, the former special counsel spoke out against the president’s past praise for WikiLeaks. "Problematic is an understatement in terms of what it displays in terms of giving some, I don't know, hope or some boost to what is and should be illegal activity," Mueller said of Trump’s comments, which were favorable of WikiLeaks after the organization released emails hacked from 2016 Democratic presidential nominee Hillary Clinton’s campaign.Mueller repeated his past assertion that his report did not exonerate Trump, as the president and his allies have repeatedly argued.
Mueller tells House panel Trump asked staff to falsify records - Former special counsel Robert Mueller confirmed in testimony before the House Judiciary Committee Wednesday that President Trump directed staffers to falsify records connected to Mueller’s investigation. Asked by Rep. Cedric Richmond (D-La.) whether it was “fair to say” Trump “tried to protect himself by asking staff to falsify records relevant to an ongoing investigation,” Mueller responded, “I would say that's generally a summary.” Richmond then asked if, in giving the order, Trump intended to “hamper the investigation.” In response, Mueller referred Richmond back to his office’s report. The Louisiana congressman went on to specifically ask Mueller about Trump’s attempts to get then-White House counsel Don McGahn to create a written record falsely asserting Trump had not directed him to fire Mueller, which McGahn refused. Richmond asked if the attempts “were related to President Trump's concerns about your obstruction of justice inquiry,” to which Mueller responded, “I believe that to be true.” "So it's accurate to say the president knew that he was asking [Don McGahn] to deny facts that McGahn 'had repeatedly said were accurate.' Isn't that right?" Richmond asked Mueller, with the special counsel responding in the affirmative.
The Myth Of Robert Mueller, Exploded - Matt Taibbi, Rolling Stone. -- As political theater, the Democrats’ decision to put former Special Counsel Robert Mueller under oath was a catastrophe. The Democrats believed a televised hearing would give the legalistic Mueller report a PR kick. It was said people weren’t “reading the book,” but they might “watch the movie.” House Judiciary Chairman Jerry Nadler said he hoped the Mueller movie “won’t end up being a dud.” House Intelligence chief Adam Schiff added, “We want to bring Robert Mueller to life.” They didn’t. Robert Mueller was lost from the start, unable to recall basic details, like what Fusion GPS is (he said he isn’t “familiar” with the political oppo firm), or the meaning of “collusion” versus “conspiracy,” or the identity of the president who first appointed him acting U.S. Attorney (“I think that was President Bush,” he sighed, before being told it was Reagan). At times Mueller appeared to be merely non-answering questions. In other cases he seemed genuinely confused, unable to remember names, dates, and events, or follow the logical thread of questions. Both Democrats and Republicans appeared startled by his inability to follow questioning, and commentators on both sides of the political aisle pronounced Mueller’s performance a train wreck. “This is very, very painful,” tweeted former Obama strategist David Axelrod. “I don’t know what the #Dems were expecting from #RobertMueller,” wrote Howard Fineman, “but this probably wasn’t it.” “No mincing words here,” wrote Paul Kane of the Washington Post. “It’s a bad morning for the pro-impeachment crowd.” The day went from bad to worse for Nadler and Schiff, who by early afternoon had much of America wondering how two of its most important committee chiefs could be this ill-prepared. The talking point after the morning hearing was that Mueller, for all his confusion, had at least thrown Democrats a bone by agreeing to a question asked by California congressman Ted Lieu. Lieu asked: Was the reason Mueller refused to indict Donald Trump rooted in an Office of Legal Counsel opinion that sitting presidents can’t be charged? “That is correct,” Mueller said. “Whoa!” gasped Greg Sargent at the Post. Nicholas Kristof said it was “the big news so far” and “very significant.”A few hours later, Mueller took the stand in Schiff’s hearing and babbled a clarification: “I want to go back to one thing that was said this morning by Mr. Lieu who said, and I quote, ‘You didn’t charge the president because of the OLC opinion.’ That is not the correct way to say it,” he began. “As we say in the report and as I said at the opening, we did not reach a determination as to whether the president committed a crime.”
Despite Mueller debacle, Democrats step up call for crackdown on “foreign meddling” -- Wednesday’s testimony by former Special Counsel Robert Mueller before Congress, staged by the Democrats in the hope of reviving their discredited anti-Russian campaign and presentation of Trump as a stooge of Putin, turned into a debacle. Mueller, who had repeatedly declared his unwillingness to testify before Congress, refused to say anything beyond the official report he released four months ago. That 448-page document acknowledged that his nearly two-year investigation had failed to substantiate the claims of the intelligence agencies and the Democrats of Trump campaign collusion with Russia in the 2016 elections. The man who was built up by the Democrats as the ultimate patriot and savior of American democracy was unable to recall key details of the report he nominally authored. “If it’s from the report, yes, I support it,” he repeatedly said in response to lawmakers’ questions. “Much as I hate to say it, this morning’s hearing was a disaster,” declared Laurence Tribe, the Harvard law professor and prominent Democratic advocate of impeachment. “Far from breathing life into his damning report, the tired Robert Mueller sucked the life out of it.” “Mueller Disappoints the Democrats,” sighed the New York Times in an article by Peter Baker, who over the past three years has churned out innumerable breathless exposés, based on anonymous intelligence sources, of Russian “collusion” with Trump. “Democrats argued that hearing from Robert S. Mueller III on television could transform the impeachment debate.” But Wednesday’s event “was not the blockbuster Democrats had sought, nor was Mr. Mueller the action star they had cast.” The Democrats’ efforts to foment a palace coup based on sections of the military and intelligence establishment have only lent credence to Trump’s demagogic posturing as an opponent of the “un-elected deep state operatives who defy the voters to push their own secret agendas,” as he put in a speech last year. Wednesday’s debacle will not, however, deter the Democratic Party and its media allies from pursuing their right-wing anti-Russian witch hunt, or extending it to China and other countries in the crosshairs of American imperialism. The New York Times and Washington Post both responded to the pathetic spectacle on Capitol Hill by demanding an intensification of US efforts to crack down on supposed “foreign meddling.”
Scope of Russian Election Hacking Remains Unclear - After two and a half years of investigation by U.S. Senate staffers, the exact scope of Russian attacks on U.S. election infrastructure in 2016 remains a mystery, according to a report released Thursday by the Senate Intelligence Committee.Only a day after former special counsel Robert Mueller told lawmakers that Russian interference in U.S. politics continues and is likely to target upcoming elections, the committee released the first volume of its long-awaited assessment of Russian meddling in the 2016 presidential election and painted a dire picture of the state of U.S. election security.According to the report, the Russian effort involved attacks on U.S. election infrastructure, which include voting systems and the state government agencies that administer U.S. elections. All this was part of a stealthy campaign to sow division among the American electorate in an effort to vault then-candidate Donald Trump into the Oval Office.Senate investigators determined that 21 states were targeted by the Russian attacks on voting systems, which began in 2014 and continued into at least 2017. In one case, those attacks succeeded in breaching a state voter database, and investigators also gathered evidence that all 50 states may have been targeted. But whether that actually occurred remains unknown. The Senate Intelligence Committee’s investigation of Russian meddling represents the most thorough effort to examine what happened during the 2016 election. The Mueller probe focused mainly on Russian interference as it related to alleged contacts with the Trump campaign. And unlike Mueller’s investigation and a parallel probe in the House of Representatives, the Senate investigation has managed to avoid getting mired in partisan differences. With efforts to establish a post-9/11 style probe of the 2016 meddling all but dead, the Senate investigation will provide the public with the first, definitive examination of a campaign that some observers argue was pivotal in Trump’s surprise election victory.Trump has long maintained that Russian meddling never succeeded in changing the tally of votes, and the report released on Thursday backs up that claim, finding no evidence that Russian hackers succeeded in fudging vote counts.
Comey Under DOJ Investigation For Misleading Trump While Targeting Him In FBI Probe - Former FBI Director James Comey has been under investigation for misleading President Trump - telling him in private that he wasn't the target of an ongoing FBI probe, while refusing to admit to this in public. According to RealClearInvestigations' Paul Sperry, "Justice Department Inspector General Michael Horowitz will file a report in September which contains evidence that Comey was misleading the president" while conducting an active investigation against him. Even as he repeatedly assured Trump that he was not a target, the former director was secretly trying to build a conspiracy case against the president, while at times acting as an investigative agent. –RCI According to two US officials familiar with Horowitz's upcoming report on FBI misconduct, Comey was essentially "running a covert operation" against Trump - which began with a private "defensive briefing" shortly after the inauguration. RCI's sources say that Horowitz has pored over text messages between the FBI's former top-brass and other communications suggesting that Comey was in fact conducting a "counterintelligence assessment" of the president during their January 2017 meeting in New York. What's more, Comey had an FBI agent in the White House who reported the activities of Trump and his aides, according to 'other officials familiar with the matter.' The agent, Anthony Ferrante, who specialized in cyber crime, left the White House around the same time Comey was fired and soon joined a security consulting firm, where he contracted with BuzzFeed to lead the news site's efforts to verify the Steele dossier, in connection with a defamation lawsuit. –RCI According to the report, Horowitz and his team have examined over 1 million documents and conducted over 100 interviews - including sit-downs with Comey and other current and former FBI and DOJ employees. "The period covering Comey’s activities is believed to run from early January 2017 to early May 2017, when Comey was fired and his deputy Andrew McCabe, as the acting FBI director, formally opened full counterintelligence and obstruction investigations of the president."
DOJ says it won't prosecute Barr, Ross after criminal contempt vote - The Department of Justice (DOJ) said Wednesday that federal prosecutors will not prosecute Attorney General William Barr and Commerce Secretary Wilbur Ross following a House vote to hold the officials in contempt for failing to comply with congressional subpoenas. “The Department of Justice’s long-standing position is that we will not prosecute an official for contempt of Congress for declining to provide information subject to a presidential assertion of executive privilege,” Deputy Attorney General Jeffrey Rosen wrote in a letter to Speaker Nancy Pelosi (D-Calif.). The House had rebuked the Trump Cabinet members by passing a criminal contempt resolution earlier this month, largely along party lines. However, it was widely presumed that the Justice Department would not pursue a criminal referral against the top DOJ official. The full House vote came after the House Oversight and Reform Committee subpoenaed the Commerce and Justice departments earlier this year for documents relating to since-abandoned efforts to put a citizenship question on the 2020 census. The panel voted largely along party lines last month to hold Barr and Ross in contempt for failing to comply with those subpoenas. The agencies told lawmakers shortly before the vote was scheduled to be held that President Trump had asserted executive privilege over the requested documents. Rosen pointed to Trump's assertion of executive privilege in his letter to Pelosi on Wednesday. And he highlighted DOJ declining to prosecute officials during previous administrations, such as former Attorney General Eric Holder after the House voted to hold him in contempt in 2012. “Consistent with this long-standing position and uniform practice, the Department has determined that the responses by the Attorney General and the Secretary of Commerce to the subpoenas issued by the Committee on Oversight and Reform did not constitute a crime, and accordingly the Department will not bring the congressional contempt citations before a grand jury or take any other action to prosecute the Attorney General or the Secretary,” Rosen wrote.
The 'Honey Trap' On E 71st Street - Eric Margolis --I’ve had many strange experiences in my decades of covering intelligence affairs. These run from being invited to KGB HQ in Moscow, Chinese intelligence in Beijing, US intelligence in Virginia, Libyan intelligence in Tripoli, South African intelligence, and even Albanian intelligence in Tirana. But none was odder than the day I was invited to lunch in New York City with the by now notorious figure Jeffrey Epstein. The golden boy of Manhattan and Palm Beach society now sits in a grim jail cell accused of having sex with underage girls. He’s been doing this in plain view since the early 1990’s but, until recently, he seemed bullet-proof. Soon after I walked into the entrance of Epstein’s mansion on E 71st Street, said to be the city’s largest private home, a butler asked me, “would you like an intimate massage, sir, by a pretty young girl?” This offer seemed so out of place and weird to me that I swiftly declined. More important than indelicacy, as an old observer of intelligence affairs, to me this offer reeked of ye old honey trap, a tactic to ensnare and blackmail people that was old when Babylon was young. A discreet room with massage table, lubricants and, no doubt, cameras stood ready off the main lobby. I had arrived with Canada’s leading lady journalist who was then close to Epstein’s sometime girlfriend, Ghislaine Maxwell and, it was said, procuress – something Maxwell denies. Bizarrely, Maxwell believed that I could get KGB Moscow Center to release satellite photos that showed the murder on his yacht of her father, the press baron Robert Maxwell, who was a well-known double agent for Israel and KGB, and a major criminal. Also present was the self-promoting lawyer, Alan Dershowitz, who had saved the accused murderer Claus von Bulow, as well as a titan of the New York real estate industry (not Trump) and assorted bigwigs of the city’s elite Jewish society. All sang the praises of Israel. Epstein reportedly had ties to Donald Trump, Bill Clinton, Britain’s Prince Andrew and repeatedly flew them about in his private jet, aka “the Lolita Express.” All guests deny any sexual activity. I turned down dinner with Prince Andrew. Epstein’s residence in Manhattan and Palm Beach, both of which I visited, were stocked with young female “masseuses.” All were working class girls making big money in their spare time. Epstein and Maxwell became too big for their britches. They flaunted their sexual adventures and laughed at New York society. Everyone wondered about the source of Epstein’s lavish income but no one knew its origins. He claimed to be an exclusive money manager for a group of secretive millionaires. But the only one identified was billionaire Leslie Wexner, the owner of L Brands and Victoria’s Secret. Wexner denied any knowledge of Epstein’s alleged crimes.
There Were Photos Of Topless Women Everywhere - Epstein's Former IT Guy Quit Over Disturbing Pictures - -Jeffrey Epstein's former IT contractor, Steve Scully, says that he ended his business relationship with the 66-year-old pedophile over hordes of young women all over his infamous private island, as well as an extensive collection of photographs depicting topless women displayed in the island's various compounds, according to Good Morning America. “There were photos of topless women everywhere," said contractor Steve Scully, who said he worked for Epstein for six years beginning in 1999. "On his desk, in his office, in his bedroom,” Scully, a 69-year-old father of three girls, said of the private island dubbed "Little St. James." –GMA Of note, the FBI found a "substantial collection of photographic trophies of his victims (p. 12) and other young females" at Epstein's Manhattan residence. Scully told ABC News that he owned and operated a telecommunications business on nearby St. Thomas island when he was hired by Epstein to set up a communications network on Little St. James, also known as 'Pedo Island.' He visited the island over 100 times, and says that his memories of Epstein are 'vivid.' "He was the most intense person I ever met," said Scully. Epstein wanted phone or internet access nearly everywhere on the 72-acre island, Scully said, including in a secluded cove that the financier referred to as “the grotto.” Given his work in high-volume financial trading, Scully said, Epstein “never wanted a call to drop” because of weak digital coverage on the island. The island's primary compound was arranged in a “Danish style” layout -- with individual bedroom suites in individual buildings surrounding a courtyard, Scully recalled, including a pair of large cockatoo statues lording over the island's gardens. He said that at one point, he recalled Epstein wanting to change the name of the island from "Little St. James" to “Little Saint Jeff.” According to Scully, that the strange 'temple' structure was actually a gym, which contained a massive framed photo of a topless woman.
Jeffrey Epstein, in Hour of Need, Did Port Deal With New York Property Tycoon - Jeffrey Epstein was deep into legal trouble when he cut a deal near his private Caribbean island with a titan of New York real estate, Andrew Farkas.The scion of the family that built Alexander’s department store, Farkas made Epstein a partner in a small marina on St. Thomas in the U.S. Virgin Islands, not far from where Epstein was developing a 70-acre island.The May 2007 arrangement gave Epstein an entree to the high-end world of luxury yachting, a business befitting his lifestyle and the wealthy people he spent decades courting. It united Epstein -- who would soon become a convicted sex offender and is now accused of abusing and trafficking girls as young as 14 -- with a key figure in New York’s business and political scene.And it provided near anonymity. For more than a decade since the partnership was formed, the public records of Farkas’s port company have glossed over the involvement of the convicted felon.The marina deal, though a modest venture for a Farkas company, is the latest example of an arrangement between Epstein and a wealthy partner that’s been largely under wraps. Epstein long described himself as a financier who catered to the needs of the mega-rich. Until recently, his financial ties have been traced mostly to retail mogul Leslie Wexner.The arrangement hints at how Epstein sought to steady his finances and solidify his offshore base during a personal crisis. Farkas, an avid yachtsman who until recently owned the Montauk Yacht Club, formed the 50-50 partnership with Epstein nearly a year after Epstein had been catapulted into tawdry headlines on Florida charges of soliciting girls for prostitution. At the time, federal prosecutors were also circling.Financial pressures were building for Epstein, too. On the mainland, civil lawsuits were stacking up from alleged victims. By contrast, his enclave in the Virgin Islands afforded a measure of privacy and security. The timing and other details of the Farkas-Epstein collaboration have emerged in an unrelated business lawsuit in South Carolina. The court record, some of which remains sealed, contains sworn statements from the chief financial officer of one of Farkas’s companies and its outside auditors who still struggle to fill in some of the missing pieces.
Jeffrey Epstein Chaired a $6.7 Billion Company that Documents Suggest May Have Received a Secret Federal Reserve Bailout - Pam Martens -- According to a database created by The International Consortium of Investigative Journalists containing files leaked from the law firmAppleby, Jeffrey Epstein, who is under indictment as a sex trafficker and assaulter of underage girls, was theChairman of Liquid Funding Ltd. from November 9, 2001 to at least March 19, 2007. The offshore business had been incorporated in Bermuda on October 19, 2000 and according to the Fitch ratings firm, it had $6.7 billion in outstanding liabilities in 2006.In a regulatory filing with the Securities and Exchange Commission in February 2003, Bear Stearns, the Wall Street investment bank that Epstein had resigned from under murky circumstances in 1981, confirmed that it was a 40 percent owner of Liquid Funding Ltd., writing as follows:“At November 30, 2002, the Company had an approximate 40% equity interest in Liquid Funding, Ltd. (‘LFL’), a AAA-rated special purpose vehicle established to participate in the repurchase agreement and total return swap markets. A subsidiary of the Company acts as investment manager…”The subsidiary that acted as investment manager for Liquid Funding Ltd. was Bear Stearns Bank Plc in Dublin, Ireland, which functioned outside of U.S. regulatory authority and was a wholly owned subsidiary of Bear Stearns Ireland Limited, which was wholly owned by the U.S.-regulated Bear Stearns Companies Inc.. The U.S.-based Bear Stearns was one of the myriad Wall Street banks that imploded during the financial crisis of 2008 and received both publicly-announced and secret bailouts from the Federal Reserve, the central bank of the United States, via its Wall Street compromised regional bank, the Federal Reserve Bank of New York. Just who it was that owned the remaining 60 percent of Liquid Funding Ltd. is unknown at this time, but if the off-balance sheet structure follows the typical pattern, a number of those listed in the leaked documents as serving as a director or officer, including Epstein, are likely to have invested funds. According to Fitch, Liquid Funding Ltd. could issue liabilities up to $20 billion, made up of commercial paper, guaranteed investment contracts, medium term notes, and repurchase agreements. Both Fitch and Moody’s gave the medium-term notes to be issued by Liquid Funding a AAA-rating as well as gave it a AAA-rating as a counterparty. And, notably, both ratings agencies gave its commercial paper a Tier 1 rating, meaning that it could now end up in money market funds purchased by average Americans seeking a low-risk, liquid investment.
Someone At Morgan Stanley Kept Giving Epstein's Foundation Allocations To The Hottest IPOs - Accused pedophile Jeffrey Epstein's Gratitude America Ltd. foundation somehow kept getting stock allocations in more than 40 underwritten offerings by Morgan Stanley, according to Barron's. Morgan Stanley led all of the offerings in question and was the sole underwriter on a dozen of them. They included IPOs of Roku and secondary offerings from companies like Tribune Media and Go Daddy. Epstein plead guilty in 2008 to soliciting child prostitutes and recently claimed assets of more than $500 million. Of that, he claimed $113 million in equities. Despite pleading not guilty, he has not been granted bail. This year, Deutsche Bank dropped Epstein as a client of its private wealth division after he brought his money there in 2013. This followed having his money with JP Morgan Chase for years. But after the Miami Herald ran a series of articles last year about the plea deal Epstein took in 2008, the bank decided to end its relationship with Epstein. That's not to say that Deutsche Bank probably couldn't use the wealth management business back at a time like this. But we digress... Epstein's foundation got a cut in numerous deals, including US Foods Holding and Norwegian Cruise Line holdings. Morgan Stanley acted as lead underwriter for both offerings. The foundation also got shares in Chinese delivery company ZTO Express. Morgan Stanley declined to comment. Epstein’s foundation began in 2017 with just $9 million in assets. A Deutsche Bank spokesperson said: “Deutsche Bank is closely examining any business relationship with Jeffrey Epstein, and we are absolutely committed to cooperating with all relevant authorities.”
Deutsche Bank Flagged Jeffrey Epstein Overseas Transactions For Suspected Sex-Trafficking - Deutsche Bank uncovered suspicious transactions in which Jeffrey Epstein moved money out of the United States, according to the New York Times. The bank reported the transactions to a federal agency in charge of policing financial crimes after the bank began to look for signs that Epstein was using his funds for sex trafficking, according to the report. Epstein is said to have moved his money to Deutsche Bank's private-banking division after JP Morgan Chase cut ties with himn in 2013, five years after he pleaded guilty to state prostitution charges - one of which involved a minor. Deutsche Bank executives are still trying to understand the depth and scope of the bank’s relationship with Mr. Epstein, who has been a client of its private-banking division since at least 2013 — years after his conduct became public in a prostitution case involving a teenage girl. Deutsche Bank has been contacted by prosecutors and other government authorities investigating Mr. Epstein. Joerg Eigendorf, a Deutsche Bank spokesman, said the bank was “absolutely committed to cooperating with all relevant authorities.” -New York Times Following a series of investigative reports by the Miami Herald earlier this year, Deutsche Bank followed suit, severing ties with the wealthy financier. Doing so proved difficult for the bank, as its antiquated systems. "On a number of occasions, Deutsche Bank executives had thought they had shut down all of Mr. Epstein’s accounts, only to learn that there were others that they had not previously been aware of," according to the Times. By late spring, there were still transactions occurring in Epstein's Deutsche Bank accounts, however company officials now believe they have closed them all down.
Meet The Former Epstein 'Sex Slave' Who Helped Recruit Underage Girls For The 'Lolita Express' - While anybody even remotely familiar with the Epstein story knows that his actions were irredeemably heinous, there are other characters in Epstein's orbit - characters who may have participated in what appears to be a global sex-trafficking ring - who are more complicated.One of those characters is a 32-year-old model named Nadia Marcinko. Marcinko, who was once described in court documents as Epstein's "in-house sex slave" was ferried out of Slovakia on Epstein's private jet when she was just 15, and lived with the billionaire for years after, Wired reports Now working as a commercial pilot, Marcinko is clearly hoping the media will gloss over her involvement with Epstein. She refuses to talk to reporters, and even uses a slightly modified version of her last name (she was once known as Nadia Marcinkova).A reporter at Wired tried to look into Marcinko's past to parse whether she was a willing, or unwilling, participant in Epstein's crimes, and whether she was also one of his youngest victims. Some of Epstein's other victims told police that Marcinko pressured them to sleep with both her and Epstein. Though her history of flying with Epstein is harder to pin down due to Epstein's record-keeping practices (he only recorded the first names of underage girls in flight logs, if at all), but it's become clear that during her first decade in the country, from roughly 2000 to the beginning of Epstein's prison sentence, she frequently flew between Epstein's properties in New York, Palm Beach, Monterey, Columbus, Ohio and the Azores. A pilot who once worked for Epstein testified that she had flown with him hundreds of times. Marcinko's relationship with Epstein presumably ended when she was given immunity from prosecution in 2008 after being named an accomplice. It's still not entirely clear how she came to live with Epstein. Was she 'sold' to him by family members in Bratislava? Or did she run away with him willingly, hoping for a more glamorous life? Whatever happened, as Wired claims, Marcinko is part of a small group of people who are both victims of Epstein and possible abusers. Her testimony could again be useful. That is, if she ultimately avoids being implicated as a 'rape facilitator'.
People Think Epstein Worked for an Intelligence Agency and They Might Be Right— In the days following the arrest of high-profile financier and convicted sex offender Jeffrey Epstein, mainstream media pundits began asking questions about Epstein’s history and which of his high-profile friends might have known about his habit of coercing teenage girls into performing sexual acts. The late-to-the-party corporate media is finally asking questions that independent and alternative media journalists have been asking all along: Where did Jeffrey Epstein’s money come from? Is it true he was an intelligence agent of the U.S. or Israeli government? Did any of his famous friends know about his alleged sex rings and trafficking of young girls from his mansions to his island? I plan to answer these questions in a series of articles about Epstein, his history, and his friends. Let’s start with the claim that Jeffrey Epstein may either be an intelligence asset or work for someone else under the direction of an intelligence agency. Is there any truth to this rumor? Is there any credible evidence to suspect the involvement of intelligence agencies? I believe so. It has been widely-reported that Jeffrey Epstein’s former girlfriend and secretary, Ghislaine Maxwell, was also his personal procurer of girls to satiate his daily need for masturbating in front of young girls. . What we know for certain is that numerous witnesses describe Maxwell as being integral to Epstein’s sex ring operation. It is without a doubt that she is one of the unnamed co-conspirators who were allowed to go free under the 2008 “sweetheart deal” which allowed Epstein to serve a short 13 months in jail, with the freedom to leave for 16 hours a day for “work release.” The deal allowed all of the unnamed criminals to go free. Ghislaine Maxwell’s involvement with Epstein is important because her father, Robert Maxwell, has long been suspected of being an undercover agent working for the Israeli Mossad, the national intelligence agency of Israel also known as HaMossad leModiÊ¿in uleTafkidim Meyuḥadim. Robert Maxwell was a British media mogul, owning a majority share in Israel’s second biggest newspaper, Ma’ariv, and invested heavily in Israeli publishing, pharmaceutical and computer firms. It was reported that Maxwell had “become close with Israeli leaders, particularly in the ruling Likud Party, and helped facilitate the immigration of Jews from the Soviet Union”. In 1991, veteran investigative journalist Seymour Hersh released the book The Samson Option which reported on Maxwell’s close connections to Israeli intelligence. Hersh also claimed that Nicholas Davies, foreign editor of the Daily Mirror at that time, was involved in selling Israeli weapons to Iran and kidnapping a nuclear technician. Maxwell adamantly denied having any connection to the Mossad and sued Hersh and his publisher for libel. Hersh counter-sued and a court battle began. Maxwell would die shortly afterwards in a yacht accident that some researchers still suspect was a hit job from an unknown party in response to Maxwell’s newfound publicity. After Maxwell’s death, Hersh said that he knew “much more about him than I wrote”.
Giuliani- Epstein Case Going To Implicate A Lot Of People - President Trump's personal attorney Rudy Giuliani said on Monday that the Jeffrey Epstein case "is obviously going to implicate a lot of people," adding "I can’t tell you who but it’s not going to end up with just Jeffrey Epstein." Speaking with Hill.TV, Giuliani said that investigators will undoubtedly focus on Epstein's inner circle, and whether individuals knew or participated in Epstein's sex crimes. "If you spent this much time with him and he was so involved with these underaged girls — who did you see him with and what was he doing and what did he tell you and what did he say to you and how could you have missed it," said Giuliani. "Maybe some were innocent — maybe some weren’t, but I think they’re going to investigate everybody." The new charges against Epstein come more than a decade after the sixty-five-year-old pleaded guilty to sex trafficking and was sentenced to 13 months in prison. They have since renewed scrutiny on a 2008 plea deal that was secured in part by outgoing Trump administration Labor Secretary Alex Acosta, who resigned this month over the backlash. Acosta was a U.S. attorney at the time of Epstein’s conviction for soliciting prostitution from underage girls, and allowed Epstein to serve 13 months in "custody with work release.” -The Hill
JPMorgan’s Jamie Dimon Has Gone to Defcon 1 Over Bank’s Ties to Jeffrey Epstein - Pam Martens ~ Yesterday afternoon, Jamie Dimon had his world rocked. And not in a good way. When you’re a 3-count felony bank and still on probation until January of 2020, you really don’t want to see your name appear in the New York Times connected to the most radioactive felon in the United States right now, Jeffrey Epstein, the man newly indicted on July 6 on charges of sex trafficking of underage girls and sexually assaulting dozens of them. But that’s what happened yesterday afternoon. The New York Times published a storyonline that appears today in its New York print edition on the front page of the Business Section. Here’s the Defcon 1 part: “When Jeffrey Epstein was serving time in Florida for soliciting prostitution from a minor, he got a surprising visitor: James E. Staley, a top JPMorgan Chase executive and one of the highest-ranking figures on Wall Street.” We know Dimon was aware of the story before it hit the wires because the Times adds this: “Spokesmen for JPMorgan declined to comment on any aspect of their roughly 15-year relationship with Mr. Epstein.” This high-powered Wall Street executive, Staley, didn’t have to demean himself by visiting Epstein in a jail cell, because for the last 10 months of the 13 months Epstein served of his “jail” sentence, he was allowed to spend 12 hours a day, six days a week at his “office” in West Palm Beach in a work release program. He was chauffeured to his office by his own private driver in his limousine. Epstein had at that time pleaded guilty to a felony charge and was, under the law, a sex offender of a minor. He did not qualify for a work release program.An NBC affiliate in West Palm Beach, WPTV, has obtained 464 pages of deputy logs from the Palm Beach Sheriff’s office and reported on July 18 that “We saw they took him to his house at least nine times while he was on work release, and left him in his home unsupervised for up to three hours sometimes.” The Palm Beach police had significant evidence in 2008 that Epstein was running a sex-trafficking ring out of his Palm Beach waterfront estate where at least three dozen underage girls had alleged they were sexually abused by him. The police had provided their evidence to the FBI but the Federal prosecutor involved with the case, Alex Acosta, agreed to a non-prosecution agreement and dropped the Federal case against Epstein, thus allowing him to get a sweetheart deal in a private wing of the Palm Beach County jail by the Palm Beach County State Attorney’s office. Acosta stepped down as Donald Trump’s U.S. Labor Secretary earlier this month in response to the public outrage.
Prosecutors investigating others in Jeffrey Epstein sex traffic case - Federal prosecutors in New York who have lodged child sex trafficking charges against wealthy financier Jeffrey Epstein are investigating other “uncharged individuals,” a new court filing says. Prosecutors made that disclosure as part of a request to the judge in Epstein’s case to order all parties in the case, including Epstein and his defense team, to not publicly disclose any information turned over by prosecutors to the defense as the case heads to trial. So far, Epstein is the only person charged in his case. However, prosecutors earlier this month said Epstein — who is a former friend of Presidents Donald Trump and Bill Clinton — worked and conspired with employees, associates and others “who facilitated his conduct by, among other things, contacting victims and scheduling their sexual encounters with Epstein.” Prosecutors have said Epstein paid $350,000 to two potential witnesses in his case days after an explosive report about him was published by The Miami Herald in late 2018. In their filing on Thursday night in U.S. District Court in Manhattan, prosecutors said that “certain documents and materials” that they give to Epstein’s team “would impede, if prematurely disclosed, the Government’s ongoing investigation of uncharged individuals.” The filing also says that disclosure of such information “would risk prejudicial pretrial publicity,” and “affect the privacy and confidentiality of individuals.” Prosecutors as a rule share information about evidence with a defendant’s lawyers in a process known as discovery. Judge Richard Berman approved the prosecution’s request, which was not opposed by Epstein’s lawyers, shortly after it was filed. Berman also imposed a series of restrictions on the defense and Epstein’s review of “images of nude or partially-nude individuals,” which is designated “highly confidential information.”
Jeffrey Epstein Visited Clinton White House Multiple Times in Early ’90s - Days after Jeffrey Epstein’s arrest on sex-trafficking charges in New York, Bill Clinton distanced himself from the high-flying financier and convicted sex offender. The former president owned up to just six encounters with Epstein, starting in 2002: four flights on the billionaire’s private jet, a single trip to his Harlem office, and one “brief visit” to his New York apartment, all with staff and security detail in tow. Now, a Daily Beast investigation has uncovered ties between Epstein and the Clinton administration that date back to the president’s earliest days in the White House, casting doubt on the oft-circulated narrative that the two only began associating after Clinton left office. As early as 1993, records show, Epstein donated $10,000 to the White House Historical Association and attended a donors’ reception hosted by Bill and Hillary Clinton. Around the same time, according to a source familiar with the connection, Epstein visited presidential aide Mark Middleton several times at the White House. Two years later, businesswoman Lynn Forester de Rothschild wrote a personal letter to Clinton thanking him for their talk about the financier. Representatives for Epstein, de Rothschild and Middleton did not respond to multiple requests for comment. How Epstein entered Clinton’s orbit remains unclear. When the president released his initial statement on Epstein, he did not explain the multiple other trips heappears to have taken on the financier’s plane—including one flight to Westchester with Epstein, his alleged madam Ghislaine Maxwell, and an “unnamed female.” Clinton also failed to mention the intimate 1995 fundraising dinner at the Palm Beach home of Revlon mogul Ron Perelman, where Clinton hobnobbed with the likes of Epstein, Don Johnson, and Jimmy Buffett. (Nearby, at Epstein’s own Palm Beach mansion, the money man allegedly abused hundreds of underage girls.)The two were clearly chummy by the early Clinton Foundation years, as attested to by a 2002 photo of Epstein and Clinton in Brunei that appeared in Vicky Ward’s2003 profile of the financier. In a 2002 piece for New York magazine about the Africa trip, Clinton praised Epstein as a “highly successful financier and a committed philanthropist.”
Epstein Visited Clinton White House Multiple Times In The 1990s - Bill Clinton's attempts to distance himself from convicted pedophile Jeffrey Epstein have taken yet another blow - after a Daily Beast investigation reveals that the financier - who came highly recommended by Lynn Forester de Rothschild - visited the Clinton White House multiple times. As early as 1993, records show, Epstein donated $10,000 to the White House Historical Association and attended a donors’ reception hosted by Bill and Hillary Clinton. Around the same time, according to a source familiar with the connection, Epstein visited presidential aide Mark Middleton several times at the White House. Two years later, businesswoman Lynn Forester de Rothschild wrote a personal letter to Clinton thanking him for their talk about the financier. -Daily Beast On July 8, the former president sought to distance himself from Epstein, claiming that the two crossed paths just six times beginning in 2002; "four flights on the billionaire’s private jet, a single trip to his Harlem office, and one “brief visit” to his New York apartment, all with staff and security detail in tow," per the Beast. "President Clinton knows nothing about the terrible crimes Jeffrey Epstein pleaded guilty to in Florida some years ago, or those with which he has been recently charged in New York," Clinton spokesperson, Angel Ureña, told the Beast. "Any suggestion to the contrary is both factually inaccurate and irresponsible." Clinton's denial flies in the face of flight logs from Epstein's now-sold 'Lolita Express' 727 jet at least 26 times. When the president released his initial statement on Epstein, he did not explain the multiple other trips he appears to have taken on the financier’s plane—including one flight to Westchester with Epstein, his alleged madam Ghislaine Maxwell, and an “unnamed female.” -Daily Beast And according to the Beast, "Clinton also failed to mention the intimate 1995 fundraising dinner at the Palm Beach home of Revlon mogul Ron Perelman, where Clinton hobnobbed with the likes of Epstein, Don Johnson, and Jimmy Buffett. (Nearby, at Epstein’s own Palm Beach mansion, the money man allegedly abused hundreds of underage girls.)" While Politico claimed in a piece last week that the Clintons and Epstein connected through Epstein's longtime confidant and alleged procurer of young women - Ghislaine Maxwell, after Clinton left office, documents in the Clinton Library attest to much earlier links.
Epstein-Clinton Connection Forged By Alleged 'Madam' Ghislaine Maxwell - Prolific pedophile Jeffrey Epstein was introduced to former President Bill Clinton through Epstein's longtime confidant and alleged procurer of young women - Ghislaine Maxwell. The daughter of embattled publisher and suspected Russian-funded Mossad agent Robert Maxwell, The 57-year-old Maxwell maintained a high orbit as an East Coast socialite, according to Politico. It is unclear how Epstein and the Oxford-educated Maxwell first met, however they reportedly dated around 1992 shortly after her father's death. Then in 1995, Epstein named a now-defunct Palm Beach business "Ghislaine Corp." In 2003, Epstein described Maxwell as his "best friend." She was also procuring young, often underage girls, to feed Epstein's sexual urges according to Epstein accusers and witnesses. 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 a Wall Street Journal report earlier this month. According to Politico, "Maxwell first grew close with the Clintons after Bill Clinton left office, vacationing on a yacht with Chelsea Clinton in 2009, attending her wedding in 2010, and participating in the Clinton Global Initiative as recently as 2013, years after her name first emerged in accounts of Epstein’s alleged sexual abuse." Chelsea was in turn introduced to Epstein through Maxwell's ex, billionaire founder of Gateway computer, Ted Waitt of La Jolla, CA. A person close to Chelsea Clinton described Waitt as a “very close family friend” of Clinton and her husband, Marc Mezvinsky, and said the couple met Maxwell through him in 2011. The person said Clinton and her husband ended their friendship with Maxwell when she and Waitt broke up in early 2011, and disputed that Maxwell and Chelsea Clinton were ever “close.” . –Politico "The Clintons were relatively intimate with her," a friend of Maxwell told Politico. Meanwhile, "In 2002 and 2003, flight logs reportedly show that Bill Clinton flew on 26 flight legs on Epstein’s private jet," according to the report.
Victoria's Secret Is About To Be Revealed- L Brands Hires Firm To Probe Epstein Ties -- Jeffrey Epstein is having a rough go of it in prison, and on the outside, every person or company that he ever associated with is having a moment of introspection - and L Brands, the parent company of Victoria's Secret, is no exception. The company confirmed on Thursday that it had hired an outside law firm to carry out a review of Epstein's role at the company, though, as of now, the company believes Epstein never had any formal role at L Brands, and that his relationship with the company's founder and longtime CEO Leslie Wexner was mostly personal. Still, Epstein had at least some limited dealings with L Brands: He bought a plane from the company for $10 million, and at times he tried to weigh in on who should and shouldn't become a Victoria's Secret "Angel", WSJ reports. The disgraced "financier"/expert blackmailer reportedly managed Wexner's fortune, and was once even given power of attorney, allowing Epstein to "buy" his 21,000 square foot Manhattan townhouse that is one of the largest private homes in the borough. But Wexner maintains that he cut ties with Epstein nearly 12 years ago, before Epstein served his first stint in "prison" for pimping out a 14-year-old girl. Epstein was arrested on new charges earlier this month, after an investigative series by the Miami Herald renewed interest in his case. Epstein is facing federal sex-trafficking charges stemming from an alleged scheme to systematically exploit underage girls. Wexner says he never had any knowledge of Epstein's alleged crimes. An L Brands spokeswoman said of Epstein: "We do not believe he was ever employed by nor served as an authorized representative of the company." She added that "Epstein's crimes are abhorrent and we applaud every effort to bring justice to those he harmed," according to the New York Post. Still, Epstein's relationship with Wexner helped make him a fixture at company events for years, and Epstein reportedly used to tell young aspiring models that he could help them get work with Victoria's Secret. He was a frequent presence at Victoria's Secret parties - and Wexner has become extremely closely associated with Epstein since the latter's arrest brought his story back into the headlines.
Registered Sex Offender Weiner Moves Back In With Wife Huma Abedin And 7-Year-Old Son - Anthony Weiner has been a free man for a few months now, ever since he left a Bronx halfway house, and now it appears he's moving back in with his wife, Hillary Clinton aide Huma Abedin, and their seven-year-old son Jordan.The Daily Mail reported that the 54-year-old ex-Congressman and former mayoral candidate was seen rolling boxes and designer garment bags into Abedin's home over the weekend. Weiner has never lived in the lower Manhattan apartment where Huma moved with their seven-year-old son Jordan soon after the disgraced politician went to prison. Abedin had filed for divorce, but has since withdrawn her petition, after the two parties decided to settle the issue privately. Abedin initially filed for divorce on the day Weiner entered his guilty plea for sexting a 15-year-old girl.It's not clear where Weiner had been staying since leaving his Bronx halfway house, where he was sent after spending 21 months in custody. When he was leaving his halfway house in May, Weiner told reporters he hoped to get his family back and make up for lost time. Weiner, who is a registered level one sex offender, said "I hope to be able to live a life of integrity and service, and I’m glad this chapter of my life is behind me."
Bernie Madoff asks Trump to reduce his prison sentence for massive Ponzi scheme - Notorious Ponzi schemer Bernie Madoff has filed a petition with the Justice Department asking that President Donald Trump reduce his 150-year prison sentence — a bid that Madoff’s prosecutor promptly called “the very definition of chutzpah.”Madoff, 81, is currently serving his century-plus sentence in a federal prison in Butner, North Carolina, for orchestrating the largest Ponzi scheme in history.His decadeslong scam conducted while heading Bernard L. Madoff Investment Securities in New York City swindled thousands of investors out of billions of dollars.Madoff, who pleaded guilty to 11 crimes in 2009, is not asking for a pardon from the president. Instead, he is requesting clemency from Trump in the form of a sentence commutation, or reduction, according to information on the Justice Department’s website.
Pre-Revolutionary Chinese Debt: An Investment for the Truly Stable Genius - About a year ago, an unusual securities action was brought against a pastor at one of the largest Protestant churches in the country and a financial planner. The accusation was that the two, Kirbyjon Caldwell and Gregory Smith, had duped elderly investors into buying participation rights in bonds issued by the pre-revolutionary Chinese government. The bonds have been in default since 1939. Here is the SEC’s press release; Matt Levine at Bloomberg talked about the case here. Among other things, the SEC accused Caldwell and Smith of violating the registration requirements of the federal securities laws and of committing fraud.This case got a fair amount of attention because Mr. Caldwell is no ordinary pastor. He leads one of the largest congregations in the country, with roughly 14,000 members, and was a spiritual adviser to George W. Bush and Barack Obama (see here).The core of the fraud case seems to be that Caldwell and Smith promised investors safe, quick returns. Allegedly, the plan was to sell the bonds for a profit or to get the Chinese government to pay up. From the SEC’s perspective, this was like promising to squeeze water from a stone; since the communist takeover in 1949, Chinese governments have steadfastly refused to pay the bonds.It all sounds rather daffy. Also, weirdly specific. It can’t be easy to persuade people to open their pocketbooks for antique Chinese sovereign bonds. Still, we were struck by the SEC’s characterization of the bonds, in both the press release and the complaint, as “defunct” and as “collectible memorabilia with no meaningful investment value” (here andhere). The characterization presumes the answer to a question that has long fascinated us, which is whether a sufficiently motivated claimant could enforce these bonds against China.Under the relevant international law, the law of state succession, a state’s obligations continue notwithstanding changes to the identities of governing officials, to official political ideology, or to the form of government itself. So a government can’t justify non-payment by noting that its political philosophy radically differs from that of the government that incurred the debt. To the extent the bonds are subject to municipal law—such as English or New York law—the same principle would likely apply. So at least in theory, the holder of one of these instruments could sue the current Chinese government for non-payment.
Facebook To Pay Record $5 Billion Fine In FTC Settlement -- As extensively leaked in advance, on Wednesday morning Facebook agreed to pay a record $5 billion fine to resolve a long-running federal investigation that has damaged the company’s standing with consumers and clouded its future, and agreed to better police its data-privacy practices, Under the settlement, Facebook founder and CEO Mark Zuckerberg will be required to certify that the company is in compliance with new privacy strictures, and could be subject to civil and criminal penalties for false certifications."The $5 billion penalty against Facebook is the largest ever imposed on any company for violating consumers’ privacy and almost 20 times greater than the largest privacy or data security penalty ever imposed worldwide,” the Federal Trade Commission said in a news release. “It is one of the largest penalties ever assessed by the U.S. government for any violation."To many the penalty, which is a fraction of what Facebook makes in one year, was merely a token wristslap, and will do nothing to change the company's entrenched culture, which in recent months has seen Facebook proactive seek out to censor free speech on its website, especially when it comes from conservative voices.To be sure, as the WSJ notes, the extent of the fine was blunted by stinging dissents from the two Democrats on the five-member commission, who said the financial penalty was insufficient and the settlement does little to change Facebook’s basic incentives to gather and leverage users’ data.
Facebook: Mark Zuckerberg’s Fake Accounts Ponzi Scheme - Facebook now has a market capitalization approaching $600 billion, making it nominally one of the most valuable companies on earth. It’s a true business miracle: a company that was out of users in 2012 managed to find a wellspring of nearly infinite and sustained growth that has lasted it, so far, half of the way through 2019. So what is that magical ingredient, that secret sauce, that “genius” trade secret, that turned an over-funded money-losing startup into one of America’s greatest business success stories? It’s one that Bernie Madoff would recognize instantly: fraud, in the form of fake accounts. Old money goes out, and new money comes in to replace it. That’s how a traditional Ponzi scheme works. Madoff kept his going for decades, managing to attain the rank of Chairman of the NASDAQ while he was at it. Zuckerberg’s version is slightly different, but only slightly: old users leave after getting bored, disgusted and distrustful, and new users come in to replace them. Except that as Mark’s friend and lieutenant, Sam Lessin told us, the “new users” part of the equation was already getting to be a problem in 2012. On October 26, Lessin, wrote, “we are running out of humans (and have run-out of valuable humans from an advertiser perspective).” At the time, it was far from clear that Facebook even had a viable business model, and according to Frontline, Sheryl Sandberg was panicking due to the company’s poor revenue numbers. To balance it out and keep “growth” on the rise, all Facebook had to do was turn a blind eye. And did it ever. In Singer v. Facebook, Inc.—a lawsuit filed in the Northern District of California alleging that Facebook has been telling advertisers that it can “reach” more people than actually exist in basically every major metropolitan area—the plaintiffs quote former Facebook employees, understandably identified only as Confidential Witnesses, as stating that Facebook’s “Potential Reach” statistic was a “made-up PR number” and “fluff.” Also, that “those who were responsible for ensuring the accuracy ‘did not give a shit.’” Another individual, “a former Operations Contractor with Facebook, stated that Facebook was not concerned with stopping duplicate or fake accounts.”
Hedge Fund Managers Are Buying Your Credit Card, Bluetooth, & Wi-Fi Data Hand-Over-Fist - Hedge fund managers continue to mine all sorts of "alternative data" in order to try and gain trading edges. This now includes seeking out consumer habits from devices like Fitbits, Rokus and Teslas, according to Bloomberg.As we have reported on before, alternative data is being bought hand over fist by hedge funds like Steve Cohen's Point72 Asset Management and Ken Griffith's Citadel. Many are even paying large sums for it. Michael Marrale, chief executive officer of M Science said: “There is not one major hedge fund or asset manager that doesn’t have data initiatives underway or that are not using alternative data in some way.” Spotting trends in consumer habits is a big business and JP Morgan estimates that the market for big data could reach more than $200 billion by next year. Even then, the data needs to be analyzed, scrubbed, organized and aggregated to be of use.There has been "incredible demand" for this data, according to Marrale. So what exactly are hedge funds looking at? First, they are looking at Wi-Fi and Bluetooth connections, which have both become so ubiquitous that they are often taken for granted. Capturing the signals that these networks emit can show “when and where new things appear in the world,” said Hugh O’Connor, director of data sourcing and partnerships at Eagle Alpha. This can help firms keep tabs on the number of video streaming devices or fitness trackers being used, the length of time consumers spend on them and their locations. Data providers can also capture when your new ride is hitting the road if you have bought a Tesla Model 3 and use its Bluetooth enabled media. Location tracking data can also be pulled from mobile phones and show the number of people carrying devices at a particular location. This can help distinguish how many people are frequenting retailers, supermarkets or fast food joints. Alternative data firms can also monitor app downloads to see how popular they are, where they are occurring and when they are being used to make purchases. Hedge funds also are scraping the internet for data, sifting through sites to create bespoke collections of public data. They look at things like pricing trends on flights and hotels and inventory figures for products sold on sites like Amazon.
Senior Google Engineer Admits Big Tech 'Taking Sides In A Political Context' - A current senior software engineer at Google has gone on record with Project Veritas to discuss how the company - and Silicon Valley big tech in general - has been sharply biased against conservatives since the 2016 US election. Greg Coppola, who works on AI and the Google Assistant, believes we are "at a really important point in human history," where " we have to just decide now that we kind of are seeing tech use its power to manipulate people." "It’s a time to decide, you know, do we run the technology, does the technology run us?" asks Coppola. Coppola notes that Google algorithms can influence people's opinions. "I think we had a long period, of ten years, let’s say, where we had search and social media that didn’t have a political bias and we kind of got used to the idea that the top search results at Google is probably the answer. And Robert Epstein who testified before Congress last week, um, looked into it and showed that, you know, the vast majority of people think that if something is higher rated on Google Search than another story, that it would be more important and more correct. And you know, we haven’t had time to absorb the fact that tech might have an agenda. I mean, it’s something that we’re only starting to talk about now."
Amazon has ‘destroyed the retail industry’ so US should look into its practices, Mnuchin says - Amazon has ‘destroyed the retail industry’ so US should look into its practices, Mnuchin says - Treasury Secretary Steven Mnuchin said Wednesday the Justice Department is right to be looking into Amazon’s practices as part of its antitrust review of big technology companies.“I think if you look at Amazon, although there are certain benefits to it, they’ve destroyed the retail industry across the United States so there’s no question they’ve limited competition,” Mnuchin told CNBC’s “Squawk Box. ”“I think it’s very good that the attorney general is going to look into this. I think it’s an important issue and I look forward to him reporting back to the president and hearing his recommendations,” said Mnuchin. The Justice Department said Tuesday it is opening a broad antitrust review of big technology companies, sending shares of Amazon, Alphabet and Facebooklower in off-hours trading. The DOJ said it is looking into how major online platforms have “achieved market power” and how their practices may have “reduced competition, stifled innovation, or otherwise harmed consumers.” At the company’s annual shareholder meeting in May, Amazon chief Jeff Bezos said “large entities deserve to be inspected and scrutinized.”Shares of Amazon ticked about 1% lower on Wednesday morning but closed up 0.32%. Mnuchin is no stranger to the world of retail. Prior to becoming Treasury Secretary for President Donald Trump, Mnuchin served on the board of directors for embattled department store chain Sears. Mnuchin’s role at Sears and his relationship with former CEO Eddie Lampert have been criticized by left-wing politicians.
IRS Sending Warning Letters to More Than 10,000 Cryptocurrency Holders - Wall Street Journal - The Internal Revenue Service has begun sending letters to more than 10,000 cryptocurrency holders, warning they may have broken federal tax laws. The agency wasn’t specific about the possible violations it was reviewing, but those who hold digital currencies could be subject to a variety of taxes, especially on capital gains.
Elizabeth Warren Seeks to Cut Private Equity Down to Size - Yves Smith - Elizabeth Warren’s Stop Wall Street Looting Act, which is co-sponsored by Tammy Baldwin, Sherrod Brown, Mark Pocan and Pramila Jayapal, seeks to fundamentally alter the way private equity firms operate. While the likely impetus for Warren’s bill was the spate of private-equity-induced retail bankruptcies, with Toys ‘R’ Us particularly prominent, the bill addresses all the areas targeted by critics of private equity: how it hurts workers and investors and short-changes the tax man, thus burdening taxpayers generally. Not only would Warren’s legislation prohibit some of the most destructive private equity activities, but it would end their ability to act as traditional asset managers, taking fees and incurring close to no risk if their investments go belly up. The bill takes the explicit and radical view that: Private funds should have a stake in the outcome of their investments, enjoying returns if those investments are successful but ab-1sorbing losses if those investments fail. Needless to say, this upends the traditional private equity model of “head’s I win, tails you lose.” Warren’s bill owes a considerable debt to the work of Eileen Appelbaum and Rosemary Batt, who have been investigating the private equity industry for many years. Appelbaum also provided detailed testimony which provided additional backup for the provisions of Warren’s bill. Critics will say that Warren’s bill has no chance of passing, which is currently true but misses the point. When Bernie Sanders talked about universal health care and other progressive policies in 2016, the media either ignored it or treated it as crazypants leftie. Those ideas are now part of the discourse, as elite Dems are wont to say. Warren is taking on the “value creator” myth of private equity and seeking to end or restrict their asset-stripping. Her bill isn’t just a step in the process of exposing the falsehoods that have kept the industry from being held to account. By (hopefully) putting private equity titans on the back foot, it should also help impede their efforts to allow mom and pop retail investors to partake of private equity’s egregious fee structure (which would be larded up even more to cut in retail fund management firms).
Letter in support of the ‘Stop Wall Street Looting Act of 2019′ - Economic Policy Institute - I am writing to express support for the “Stop Wall Street Looting Act of 2019,” a comprehensive bill aimed at stemming abusive practices employed by some private equity firms to line their pockets at the expense of workers, institutional investors, creditors, and others with stakes in the companies they acquire—and too often destroy. The legislation will not hinder those private equity firms that prosper by delivering efficiency gains to underperforming companies in their portfolios. Instead, it will simply remove tax and other incentives that allow some firms to realize large gains by inflicting even larger losses on other stakeholders. This type of negative sum strategy is pursued too often in the private equity industry and requires a legislative and regulatory response. Investment firms engaging in leveraged buyouts first caught the public’s attention in the 1980s with the hostile takeovers of high-profile companies such as RJR Nabisco, whose acquisition and subsequent collapse became the subject of a bestselling book and HBO movie, Barbarians at the Gate.1 Bad publicity about failed deals put a damper on leveraged buyouts in the 1990s, but the same business model, now known as private equity, made a comeback in the early 2000s and rebounded after the Great Recession. According to the private equity industry lobby, investment has more than doubled over the past 10 years, with $3.4 trillion invested between 2013 and 2018 and 5.8 million Americans employed in private equity-backed businesses.2 Abetted by short memories, deregulation, and low interest rates, private equity firms have trained their sights on companies with assets that can be easily sold off if necessary, such as store chains with real estate holdings. This has left in their wake what economist Eileen Appelbaum has described as a “retail apocalypse”—in which profitable companies such as Toys “R” Us are saddled with debt and stripped of assets before filing for bankruptcy.3 While toy, apparel, grocery, and other chains acquired by private equity undoubtedly face competition from online and big box retailers, their ability to adapt to meet these challenges has been hamstrung by debt service and payments to private equity partners in the form of fees and special dividends.
Democrats try to force Fed's hand on faster payments — A group of House and Senate Democrats have introduced a bill that would require the Federal Reserve to create a real-time payments system. The Payments Modernization Act, introduced in the Senate by Sen. Chris Van Hollen, D-Md., said the central bank has been moving too slowly to determine whether to develop its own payments system, so the bill would make that decision for them. “I’ve pushed the Federal Reserve to develop a system that has the necessary guardrails, but progress there has been too slow,” Van Hollen said. Sen. Elizabeth Warren, D-Mass., who co-sponsored the Senate bill, said the purpose of the legislation is to ensure more people — particularly low-income Americans — have access to their money when they need it. “Our bill would create a national, real-time payments system so that families have faster access to the money they earned and don’t have to pay overdraft fees or rely on a shady payday lender to make ends meet,” Warren said. The bill would update the Expedited Funds Availability Act of 1987 to “require financial institutions to recognize funds in real time,” according to an accompanying fact sheet. The bill also clarifies the Fed’s authority to build a real-time payments system and mandates that the central bank implement such a system to compete with private payment systems. Companion legislation was introduced in the House by Reps. Ayanna Pressley, D-Mass., and Jesús “Chuy” GarcÃa, D-Ill.
Regulators publish 'living will' portions for largest banks — The Federal Reserve and the Federal Deposit Insurance Corp. have released the public portions of updated resolution plans for eight of the nation’s largest banks. Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street and Wells Fargo all filed the reports with the regulators by July 1. As required by the Dodd-Frank Act, the institutions must submit regular plans on how they would be unwound in a failure. The Fed and the FDIC published the public portions of the living wills on their websites Tuesday. Resolution plans are split into public and confidential sections. The Fed and the FDIC review both parts in order to determine whether the firms could be resolved credibly in bankruptcy without causing harm to the financial system. The eight U.S.-based "global systemically important banks," or G-SIBs, currently file living wills annually. But under a new proposal issued in April, those banks would be required to submit resolution plans every two years, alternating between full and “targeted” plans. A full living will would be the same comprehensive plans banks are used to filing today, while a targeted plan would only include the “core elements” of a full plan, such as capital and liquidity, as well as changes resulting from new regulatory policy or an information request by the agencies.
Margin Debt and the Market: Up 4.8% in June - Let's examine the numbers and study the relationship between margin debt and the market, using the S&P 500 as the surrogate for the latter. The first chart shows the two series in real terms — adjusted for inflation to today's dollar using the Consumer Price Index as the deflator. At the 1997 start date, we were well into the Boomer Bull Market that began in 1982 and approaching the start of the Tech Bubble that shaped investor sentiment during the second half of the decade. The astonishing surge in leverage in late 1999 peaked in March 2000, the same month that the S&P 500 hit its all-time daily high, although the highest monthly close for that year was five months later in August. A similar surge began in 2006, peaking in July 2007, three months before the market peak. Debt hit a trough in February 2009, a month before the March market bottom. It then began another major cycle of increases. FINRA has released new data for margin debt, now available through June. The latest debt level is up 4.8% month-over-month. At the suggestion of Mark Schofield, Managing Director at Strategic Value Capital Management, LLC, we've created the same chart with margin debt inverted so that we see the relationship between the two as a divergence. The next chart shows the percentage growth of the two data series from the same 1997 starting date, again based on real (inflation-adjusted) data. We've added markers to show the precise monthly values and added callouts to show the month. Margin debt grew at a rate comparable to the market from 1997 to late summer of 2000 before soaring into the stratosphere. The two synchronized in their rate of contraction in early 2001. But with recovery after the Tech Crash, margin debt gradually returned to a growth rate closer to its former self in the second half of the 1990s rather than the more restrained real growth of the S&P 500. But by September of 2006, margin again went ballistic. It finally peaked in the summer of 2007, about three months before the market.
Consumers could get up to $20,000 apiece in Equifax settlement - Two years after Equifax revealed that hackers accessed the personal information of up to 147 million people, the credit bureau’s newly-announced settlement for up to $700 million will provide cash payments for those who have been affected — but there are some key requirements people should be aware of before they file a claim.Under the terms of the settlement announced Monday, the major credit bureau is paying a mix of government fines, legal fees and, most importantly for consumers, setting up a fund that will underwrite free credit monitoring, identity theft protection and individual cash payments to people affected by the breach, which are capped at $20,000 per person. Some 147 million American consumers had their personal information stolen, according to the class-action lawsuit being settled in the deal. That’s almost half of the 329.2 million people living in America. The stolen information included names and birth dates, and hackers also took approximately 146 million Social Security numbers, according to Equifax’s SEC filings.Equifax is immediately paying $300 million into the consumer fund, and it will add another $125 million to pay further out-of-pocket expenses if needed. Getting reimbursed for documented losses tied to the breach could prove difficult, however. Mark Begor, the company’s CEO, said at a Monday press conference that the total payout was “by far, the largest ever” for a data breach case. “It reflects, from our perspective, the seriousness in which we took this matter.” Equifax denied any wrongdoing in the breach as part of the settlement.
Equifax fine punches a hole in data security culture - As with many breach settlements over the years, the Equifax settlement is large enough to make headlines but small enough that there is no long-term risk to Equifax. But the timing of the settlement serves as a warning to other companies of the risks they face in an increasingly data-focused economy. The credit bureau will set aside $300 million to compensate breach victims, though that total could be as high as $425 million, according to court settlement documents. Consumers can also receive 10 years of free credit monitoring service, and Equifax will make it easier for consumers to dispute information in their credit reports. Equifax will also pay a $100 million fine to the Consumer Financial Protection Bureau and $175 million to the states, and will submit to regular third-party assessments of its security. Banks and payment companies are already facing uphill battles to comply with regulations such as GDPR and PSD2, and are confronting a data breach epidemic. It’s been an unsuccessful battle thus far: Marriott and Google have already been fined millions of dollars over failure to adhere to GDPR’s data protection laws, and payment processors are all but begging for more time to meet PSD2’s stronger authentication guidance because of the complexity of the rules. The Equifax settlement, which comes against this backdrop, puts an even more famous face on the issue of data security. The credit bureau was criticized at the time for how it responded to the breach — which affected nearly half of the American population — including suggesting consumers provide personal data to one Equifax’s own products to determine if they were victims.
Disgraced Equifax CEO Snags $20 Million Payday -- For a majority of workers, failure at the workplace is deeply frowned upon and frequently incurs the ultimate penalty—dismissal, usually accompanied with a pittance for severance pay. Yet, in many ways, corporate executives remain above the rigmarole of a pay-for-performance model. A blue-chip executive can run a company to the ground and still be guaranteed a big payday in the form of a multi-million dollar golden sendoff. A few days ago, Equifax Inc., one of the largest consumer credit reporting agencies on the land, made headlines after agreeing to pay a total of $700 million to the U.S. government for claims tied to a massive data breach two years ago. The data breach will go down as one of the largest ever after private information including social security data from 150 million consumers--about 56 percent of America’s population--was compromised. The settlement includes $425 million for consumers, with the payout any affected customer can collect from the credit agency capped at $20,000. That included a $25-per-hour compensation for any time they spent resolving the mayhem left behind.Former CEO Richard Smith, on the other hand, is set to collect ~$19.6 million in stock bonuses that cover part of his performance in the year the hack took place, not to mention a generous offer to cover his medical bills for life; a $24-million pension and $50,000 in tax and financial planning services.That’s roughly 1,000x the maximum payout to affected customers.
CFPB ending special treatment for Fannie, Freddie in mortgage rule — The Consumer Financial Protection Bureau is planning to end its special treatment for certain mortgages backed by Fannie Mae and Freddie Mac in the agency's underwriting rules, Director Kathy Kraninger said Thursday. The CFPB's regulation requiring lenders to verify their borrowers' ability to repay includes protection for a category of loans known as "qualified mortgages." So-called QM loans include certain features such a 43% debt-to-income limit. But the rule, which was issued in 2013 and took effect in 2014, included a temporary exemption for loans backed by the government-sponsored enterprises. Fannie and Freddie mortgages are automatically QM, even with a higher DTI ratio. Butthat provision, known as the GSE "patch," is set to expire in January 2021. Kraninger said the CFPB intends to shift away from the patch or consider only a short extension to “facilitate a smooth and orderly transition” as the Trump administration launches renewed efforts to release Fannie and Freddie from conservatorship. Nearly a third of GSE-backed loans currently enjoy the benefits of the exemption. “The top line is the patch is going to expire,” Kraninger said in a meeting with reporters. “We are amenable to what a transition would look like.” In an advance notice of proposed rulemaking released Thursday, the CFPB also asked for public comment on several amendments to the QM rule, including if “mortgage” as defined in Regulation Z should be revised, whether the QM definition should take into account other methods for assessing a borrower’s ability-to-repay and whether or not Appendix Q — which sets standards for documenting income to determine whether a loan qualifies for QM — should be replaced. However, the proposal does not ask for comment on what the CFPB should do with the patch leading up to its expiration.
Subprime 2.0- Mortgages Now Available For Borrowers Without Credit Scores - Waterstone Mortgage Corporation, a national lender, based in Wisconsin with licenses in 48 states, announced Tuesday that it's now lending to people with aboustely no credit history, reported HousingWire. Waterstone calls it the "Non-Traditional Credit Program" will use other forms of financial history, such as cell phone bills, rent, utilities, and insurance premiums when underwriting a borrower. The Consumer Financial Protection Bureau (CFPB) estimates that about 26 million Americans have no credit score. The CFPB also states that an additional 19 million Americans have a limited or outdated credit history. This means that 18% of adults are "credit invisible," said Waterstone in a statement. "While a credit score is certainly very useful for determining a homebuyer's ability to pay their mortgage payment, other payment indicators–such as bills that are consistently paid in full and on time–can be extremely telling," said Waterstone Mortgage SVP–Investor Relations & Product Development Kim Newby. The new program is available with conventional, FHA, USDA, or VA loan options, with the goal of helping those with no credit history into homes."Of course, the Non-Traditional Credit Program is ideal for borrowers who only use cash, debit or personal checks on a regular basis. But it's also designed for those who have had credit cards or loans in the past, but who haven't utilized credit in more than two years," Newby said."Also, recent immigrants who haven't yet established a credit score in the United States could benefit from this program, as well as young adults and recent college graduates who are just beginning to build their credit."Waterstone has debuted the new loan program at a time when a collapse in mortgage rates is failing to bring buyers back. And it seems like ten years after the collapse of Lehman Brothers, mortgage companies are once again taking bets on the same type of loans that nearly collapsed the economy amid a flurry of emergency bailouts and unprecedented consolidations. Waterstone allowing someone with no credit history to purchase a home amid an economy that is cycling down and headed towards a possible recession is a recipe for disaster.
MBA: Mortgage Applications Decreased in Latest Weekly Survey - From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey: Mortgage applications decreased 1.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 19, 2019.... The Refinance Index decreased 2 percent from the previous week and was 81 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 6 percent higher than the same week one year ago....“Mortgage applications were down last week, even as rates moved lower across the board, with the 30-year fixed rate at 4.08 percent. Refinance activity was lower, but we did see government refinance applications increase, driven solely by a 12 percent rise in FHA applications,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Mortgage rates right now are comparable to the average rate of 4.10 percent for June, but refinances last week were 7 percent lower than last month. This is an indication that as we see rates lower for longer, borrowers need more of a drop in rates to consider refinancing.” Added Kan, “Purchase applications decreased for the second straight week and have been somewhat volatile lately, but were still 6 percent higher than a year ago.”... The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.08 percent from 4.12 percent, with points decreasing to 0.33 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
FHFA House Price Index: Up 0.1% in May - The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for May. Here is the opening of the report: Washington, DC – U.S. house prices rose in May, up 0.1 percent from the previous month, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). The previously reported 0.4 percent increase for April 2019 remained unchanged.The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. From May 2018 to May 2019, house prices were up 5.0 percent. [Read more] The chart below illustrates the monthly HPI series, which is not adjusted for inflation, along with a real (inflation-adjusted) series using the Consumer Price Index: All Items Less Shelter.
NAR: Existing-Home Sales Decreased to 5.27 million in June --From the NAR: Existing-Home Sales Falter 1.7% in June: Existing-home sales weakened in June, as total sales saw a small decline after a previous month of gains, according to the National Association of Realtors®. While two of the four major U.S. regions recorded minor sales jumps, the other two – the South and the West – experienced greater declines last month. Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 1.7% from May to a seasonally adjusted annual rate of 5.27 million in June. Sales as a whole are down 2.2% from a year ago (5.39 million in June 2018). ... Total housing inventory at the end of June increased to 1.93 million, up from 1.91 million existing-homes available for sale in May, but unchanged from the level of one year ago. Unsold inventory is at a 4.4-month supply at the current sales pace, up from the 4.3 month supply recorded in both May and in June 2018.This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.Sales in June (5.27 million SAAR) were down 1.7% from last month, and were 2.2% below the June 2018 sales rate. The second graph shows nationwide inventory for existing homes. According to the NAR, inventory increased to 1.93 million in June from 1.91 million in May. Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory. Inventory was unchanged year-over-year in June compared to June 2018. Months of supply increased to 4.4 months in June.
Despite Plunging Rates, Existing Home Sales Slow For 16th Straight Month - After May's surprise rebound, existing home sales were expected to slow in June and dropped more than expected (falling 1.7% MoM against expectations of a modest 0.4%) to 5.27mm SAAR. “Sales refuse to break out higher,” Lawrence Yun, NAR’s chief economist, said at a briefing in Washington. “It doesn’t make economic sense” with job creation, rising wages and the stock market reaching records. This is the 16th month of annual declines in existing home sales... Home purchases declined in the South, the biggest region, to the slowest rate since January. Sales fell to a three-month low in the West. They increased in the Midwest and Northeast. While rates have tumbled - helping affordability - the median home price rose 4.3% from last year to $285,700, erasing that affordability edge.
Comments on June Existing Home Sales – Mc Bride - Earlier: NAR: Existing-Home Sales Decreased to 5.27 million in June -A few key points:1) The key for housing - and the overall economy - is new home sales, single family housing starts and overall residential investment. Overall, this is still a somewhat reasonable level for existing home sales. No worries.
2) Inventory is still low, and was unchanged year-over-year (YoY) in June. Inventory had been up YoY every month since July 2018.
3) As usual, housing economist Tom Lawler's forecast was closer to the NAR report than the consensus. See:Lawler: Early Read on Existing Home Sales in June. The consensus was for sales of 5.34 million SAAR. Lawler estimated the NAR would report 5.25 million SAAR in June, and the NAR actually reported 5.27 million SAAR.
4) Year-to-date sales are down about 4.2% compared to the same period in 2018. On an annual basis, that would put sales around 5.15 million in 2019. Sales slumped at the end of 2018 and in January 2019 due to higher mortgage rates, the stock market selloff, and fears of an economic slowdown.
The comparisons will be easier towards the end of the year. The second graph shows existing home sales Not Seasonally Adjusted (NSA). Sales NSA in June (527,000, red column) were well below sales in June 2018 (570,000, NSA), and were the lowest sales for June since 2014
Largest Correction Since The Great Recession - U.S. Home-Buying By Foreigners Sees Record Plunge - Purchases of U.S. homes by foreigners has dropped by 50% over the last two years, according to the Wall Street Journal. The figures come as a blow to top end real estate markets in places like Miami and New York.Less than $78 billion in U.S. residential real estate was purchased in the year ended March 2019, which marks a 36% decline from the $121 billion in the previous 12 month period. The pullback is resulting in price cuts in many coastal cities and causing new condos to sit empty. America has been a less hospitable place for foreigners to buy real estate due to a slowing global economy, the country's trade dispute with China and President Trump’s immigration stance. Purchases by foreigners are now at their lowest level since 2013, which was about the same time buyers from China and South America started to enter the U.S. market, seeking a place to store their capital.
First-Time Homebuyers Share Of The Market Plummets To 33% Even As Prices Slump --It's no secret that younger Americans, particularly those who are members of the millennial generation who are weighed down by debt (not to mention their affinity for expensive Starbucks' beverages and avocado toast), are in no shape to buy a home - at least not yet. And in a recent study by Point2Homes, the researchers lay out all of the obstacles lying in wait for would-he first time home buyers. In the study, Point2Homes explains how the housing market is rigged against first-time home buyers, and even second-time buyers will have some difficulty, in this list of data points from the NAB and US Census, which explains how the rapid home-price inflation (which has oocurred in an economy with near zero interest rates, which have conversely encouraged speculating to drive up prices).
- Compared to 2009, the median home price has increased by as much as 101% and 100% in San Diego and San Francisco, followed by Austin, where home prices have almost doubled as well;
- The share of first-time buyers has been on a downward trend – entry-level buyers represented 50% of the total sales numbers in 2010, whereas in 2018 this share dropped to 33%;
- The price difference between a home bought by a first-timer and a home purchased by a move-up buyer is also decreasing, going from 31% in 2009 to 27% in 2018;
- The median age of a first-time buyer increased from 30 years old in 2009 to 32 years old in 2018, but the median age of repeat buyers has really gone up: from 48 years old in 2009 to 55 in 2018; The average size of a new home increased from 1,580 sq.ft. in 2008 to 1,670 sq.ft. in 2013, only to start dropping again, settling at 1,600 sq.ft. in 2018.
The notion that the Federal Reserve wants to both boost the prices of consumer goods and cut rates back toward zero - something that would make not only homes, but prices on many other goods and services unaffordable for Americans struggling with stagnant wages - is probably mind blowing for most Americans who don't have a PhD in economics. Yet, here we are...First-time home buyers everywhere have a tough time entering the housing market. Ever-increasing home prices, insufficient supply, and tight credit rules are the main culprits. In addition, crushing student debt and high rents only add insult to injury, making it almost impossible for the majority of first-timers to start saving for a down payment.Repeat home buyers have different issues and experience different challenges, such as loss of equity and incomes that can’t keep up. However, the rebound of the housing market after the 2007-2008 crash means that, just like the entry-level buyers, repeaters are also facing soaring property prices. Home prices increased by 35% at a national level, compared to 2009, but some markets have seen much more significant gains. In San Diego, the average home price went up 101%, followed by San Francisco, where home prices have also doubled compared to less than a decade ago, going from $638,661 to $1,274,500. In the following 10 cities, home prices have seen the most spectacular jumps: And these are the markets that have seen the largest increases in home values since the financial crisis.
Home Ownership Rate: At 64.1% in Q2 2019 - Over the last decade, the general trend has been consistent: The rate of home ownership continues to struggle. The Census Bureau has now released its latest quarterly report with data through Q2 2019. The seasonally adjusted rate for Q2 is 64.2 percent, down from Q1. The nonseasonally adjusted Q2 number is 64.1 percent, down from the Q1 64.2 percent figure. The Census Bureau has been tracking the nonseasonally adjusted data since 1965. Their seasonally adjusted version only goes back to 1980. Here is a snapshot of the nonseasonally adjusted series with a 4-quarter moving average to highlight the trend. The consensus view is that trend away from homeownership is a result of rising residential real estate prices in general and limited supply of entry-level priced homes that would attract first-time buyers. Here is the YoY version of the chart going back to 1965.
New Home Sales increased to 646,000 Annual Rate in June - The Census Bureau reports New Home Sales in June were at a seasonally adjusted annual rate (SAAR) of 646 thousand. The previous three months were revised down. "Sales of new single‐family houses in June 2019 were at a seasonally adjusted annual rate of 646,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.0 percent above the revised May rate of 604,000 and is 4.5 percent above the June 2018 estimate of 618,000." The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.Even with the increase in sales over the last several years, new home sales are still somewhat low historically. The second graph shows New Home Months of Supply. The months of supply decreased in June to 6.3 months from 6.7 months in May. The all time record was 12.1 months of supply in January 2009. This is near the top of the normal range (less than 6 months supply is normal) Starting in 1973 the Census Bureau inventory this down into three categories: Not Started, Under Construction, and Completed. The third graph shows the three categories of inventory starting in 1973.
A few Comments on June New Home Sales -- New home sales for June were reported at 646,000 on a seasonally adjusted annual rate basis (SAAR). Sales for the previous three months were revised down.This was the highest sales for June since June 2007, and annual sales in 2019 should be the best year for new home sales since 2007. Earlier: New Home Sales increased to 646,000 Annual Rate in June. This graph shows new home sales for 2018 and 2019 by month (Seasonally Adjusted Annual Rate). Sales in June were up 4.5% year-over-year compared to June 2018.Year-to-date (through June), sales are up 2.2% compared to the same period in 2018.This comparison was the most difficult in the first half of 2018, so this is a solid first half for 2019.And here is another update to the "distressing gap" graph that I first started posting a number of years ago to show the emerging gap caused by distressed sales. The "distressing gap" graph shows existing home sales (left axis) and new home sales (right axis) through June 2019. This graph starts in 1994, but the relationship had been fairly steady back to the '60s. Following the housing bubble and bust, the "distressing gap" appeared mostly because of distressed sales. Even though distressed sales are down significantly, following the bust, new home builders focused on more expensive homes - so the gap has only closed slowly. I still expect this gap to close. However, this assumes that the builders will offer some smaller, less expensive homes. Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So the timing of sales is different.
Housing has bottomed - With the release of new home sales this morning, and existing home sales yesterday, it is increasingly apparent that housing has bottomed – just as I said a number of months ago that it would sometime this spring.To the graphs! New home sales (blue in the graph below) bottomed last October, at 557,000 units annualized. As of June, they were at 646,000: This isn’t as good as earlier this spring, but is better than every other reading in the past 12 months. Meanwhile prices, which typically lag sales, bounced back from May’s 12 month low, but it is not clear at all if the trend is reversing yet. Here’s the same data presented YoY, so that it is easier to see the trend: Both sales and prices have bounced back to positive (sales) or unchanged (prices) YoY from their worst comparisons last autumn.Meanwhile existing home sales declined m/m, but have clearly rebounded off their lows five months ago: And prices of existing homes, which aren’t seasonally adjusted, rose 4.3% YoY: At this point the only home sales metric which has not come back from lows is total housing permits, which made a new low in June, due to a big downturn in the very volatile multi-unit permits. Single family permits, which are a less volatile and more reliable metric, are above their low from two months ago. [See my discussion last week.] In short, lower mortgage rates have put a bottom beneath the housing market.
Hotels: Occupancy Rate Decreased Year-over-year - From HotelNewsNow.com: STR: US hotel results for week ending 13 July: The U.S. hotel industry reported negative year-over-year results in the three key performance metrics during the week of 7-13 July 2019, according to data from STR. In comparison with the week of 8-14 July 2018, the industry recorded the following:
• Occupancy: -2.4% to 74.2%
• Average daily rate (ADR): -0.6% to US$132.24
• Revenue per available room (RevPAR): -2.9% to US$98.08
The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.The red line is for 2019, dash light blue is 2018 (record year), blue is the median, and black is for 2009 (the worst year probably since the Great Depression for hotels).Occupancy has been solid in 2019, close to-date compared to the previous 4 years.Seasonally, the occupancy rate will now stay at a high level during the Summer travel season.
Headline Durable Goods Orders Up 2.0% in June - The Advance Report on Manufacturers’ Shipments, Inventories, and Orders released today gives us a first look at the latest durable goods numbers. Here is the Bureau's summary on new orders: New orders for manufactured durable goods in April decreased $5.4 billion or 2.1 percent to $248.4 billion, the U.S. Census Bureau announced today. This decrease, down two of the last three months, followed a 1.7 percent March increase. Excluding transportation, new orders were virtually unchanged. Excluding defense, new orders decreased 2.5 percent. Transportation equipment, also down two of the last three months, drove the decrease, $5.4 billion or 5.9 percent to $85.4 billion. Download full PDFThe latest new orders number at 2.0% month-over-month (MoM) was better than the Investing.com 0.8% estimate. The series is down 1.6% year-over-year (YoY).If we exclude transportation, "core" durable goods was up 1.2% MoM, which was better than the Investing.comconsensus of 0.2%. The core measure is up 0.9% YoY.If we exclude both transportation and defense for an even more fundamental "core", the latest number is up 2.7% MoM and up 2.6% YoY.Core Capital Goods New Orders (nondefense capital goods used in the production of goods or services, excluding aircraft) is an important gauge of business spending, often referred to as Core Capex. It is up 1.9% MoM and up 2.0% YoY. For a look at the big picture and an understanding of the relative size of the major components, here is an area chart of Durable Goods New Orders minus Transportation and Defense with those two components stacked on top. We've also included a dotted line to show the relative size of Core Capex.
Durable Goods Tumble Year-Over-Year Despite June Rebound - After May's unexpected plunge, US Durable Goods Orders were expected to rebound modestly but instead, thanks to huge downward revision, Dur Goods surged 2.0% MoM... but at the weakest in 3 years on a YoY basis This is the biggest MoM jump since Aug 2018... The noisy aircraft orders segment continue to oscillate, affected by Boeing also.
- Nondefense aircraft new orders +75.5%
- Defense aircraft new orders -32.1%
But we note that year-over-year, Dur Goods Orders (NSA) are down 4.5% - the weakest in 3 years... However, under the hood suggests some silver linings that The Fed is going to struggle to explain away. A proxy for business investment - non-military capital-goods orders excluding aircraft - jumped 1.9% in June after a downwardly revised 0.3% increase in the prior month, according to Commerce Department figures Thursday that topped estimates.The largest increase in equipment orders since February 2018 was broad-based and could ease concerns that the trade war with China and weakening global growth risk a deeper slowdown in the U.S. economy.
"Chemical Activity Barometer Fell in July" - Note: This appears to be a leading indicator for industrial production. From the American Chemistry Council: Chemical Activity Barometer Fell in July The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), eased 0.2 percent in July on a three-month moving average (3MMA) basis following three months of gains in March-May and weak months in the winter. On a year-over-year (Y/Y) basis, the barometer fell 0.2 percent (3MMA)....A pattern of fluctuating barometer readings – months up followed by months down – indicates late-cycle activity,” said Kevin Swift, chief economist at ACC. “The CAB reading continues to signal moderate gains in U.S. commercial and industrial activity through late 2019, but rising volatility suggests change may be on the way.”...Applying the CAB back to 1912, it has been shown to provide a lead of two to fourteen months, with an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research. The median lead was also eight months. At business cycle troughs, the CAB leads by one to seven months, with an average lead of four months. The median lead was three months. The CAB is rebased to the average lead (in months) of an average 100 in the base year (the year 2012 was used) of a reference time series. The latter is the Federal Reserve’s Industrial Production Index.
US Manufacturing PMI Slumps To 10-Year Low, Business Outlook Worst On Record - Despite a collapse in European Manufacturing PMIs (led by Germany), and 3rd month of contraction in Japan PMIs; US PMIs were expected to modestly rebound in preliminary July data, but instead the picture was mixed:
- US Manufacturing PMI missed - printing 50.0 versus 51.0 exp and down from 50.6 in June
- US Services PMI beat - printing 52.2 versus 51.8 exp and up from 51.5 in June.
The manufacturing print is the lowest in 118 months. At 51.6 in July, the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index edged up from 51.5 in June and remained higher than the three-year low recorded during May. Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:“The overall picture of modest growth conceals a two-speed economy, with steady service sector growth masking a deepening downturn in the manufacturing sector. The survey’s gauge of factory production has slumped to its lowest since August 2009, and indicates that manufacturing output is falling at a quarterly rate of over 1%, led by an increasing rate of loss of export sales.“The survey’s employment gauge has meanwhile fallen to a level consistent with 130,000 jobs being added in July, down from an average of 200,000, in the first quarter and 150,000 in the second quarter, as firm became increasingly cautious in relation to hiring. Manufacturers are shedding workers at the fastest rate since 2009 and service sector job creation is now down to its lowest since April 2017.“Future prospects have also darkened to the gloomiest since comparable data were first available in 2012, suggesting that companies may look to tighten their belts further in coming months, dampening spending, investment and jobs growth. Geopolitical worries, trade wars and increasingly widespread expectations of slower economic growth at home and internationally have all pulled business optimism lower.”
Richmond Fed Manufacturing: Down in July - Today the Richmond Fed Manufacturing Composite Index decreased to -12 for the month of July, down from last month's 3. Investing.com had forecast 5. Because of the highly volatile nature of this index, we include a 3-month moving average to facilitate the identification of trends, now at 6.0, which indicates expansion. The complete data series behind today's Richmond Fed manufacturing report, which dates from November 1993, is available here. Here is a snapshot of the complete Richmond Fed Manufacturing Composite series. Here is the latest Richmond Fed manufacturing overview.Fifth District manufacturing activity weakened in July, according to the most recent survey from the Richmond Fed. The composite index fell from 2 in June to −12 in July, its lowest reading since January 2013, as all three components — shipments, new orders, and employment — registered declines. Backlogs of orders also fell, reaching a value of −26, its lowest reading since April 2009. Firms reported worsening local business conditions, as this index dropped from 7 to −18, its largest one-month drop on record. However, respondents were optimistic that conditions would improve in the coming months.Survey results indicated that employment and the average workweek declined in July. However, wage growth continued among survey respondents. Firms continued to struggle to find workers with the necessary skills and expect that struggle to continue in the next six months.The growth rates of both prices paid and prices received rose in July, as growth of prices paid outpaced that of prices received. Survey participants, on average, expected growth of both prices paid and prices received to slow in the near future. Link to Report Here is a somewhat closer look at the index since the turn of the century.
Richmond Fed Unexpectedly Crashes To Lowest In Over 6 Years As Order Backlogs Disintegrate - After a handful of mixed regional Fed survey, moments ago the Richmond Fed printed for the month of June, and if it serves as a tiebreaker, then the US economy is deep in a recession. Expected to rebound modestly from already a near-contractionary print of 3 to 5 following the recent euphoric Philly Fed print, the mid-Atlantic index instead suffered its biggest drop in two years, dropping by 14 points to a whopping -12, the lowest print since January 2013..... as all three components — shipments, new orders, and employment — registered declines.The biggest reason behind the unexpected plunge - the orderbook has suddenly disintegrated as order backlogs fell to −26, the lowest reading since April 2009.It gets worse: firms in the Richmond Fed region, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia, reported worsening local business conditions, as this index dropped from 7 to −18, its largest one-month drop on record. Of course, there was optimism, and respondents remained somewhat optimistic that conditions would improve in the coming months.The weakness was broad based as Survey results further indicated that employment and the average workweek declined in July. However, wage growth continued among survey respondents. Firms continued to struggle to find workers with the necessary skills and expect that struggle to continue in the next six months. The full table of components is below: and visually: The growth rates of both prices paid and prices received rose in July, as growth of prices paid outpaced that of prices received. Survey participants, on average, expected growth of both prices paid and prices received to slow in the near future. The biggest paradox, however, is that just last week the Beige Book for the Richmond Area reported the following: Since our previous Beige Book report, the Fifth District economy grew at a modest rate. Manufacturers saw a slight increase in shipments and new orders, but continued to face challenges from the current trade environment. Import volumes remained strong and, at one port, the composition of imports is shifting from China to other Asian countries. Meanwhile, the actual Richmond Fed survey shows collapsing orders, shipments and employment.
Kansas City Fed: "Tenth District Manufacturing Largely Unchanged Again in July" From the Kansas City Fed: Tenth District Manufacturing Largely Unchanged Again in July: The Federal Reserve Bank of Kansas City released the July Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity was largely unchanged in July, while expectations for future activity remained moderately positive.“Regional factory growth remained basically flat this month, and a number of firms noted increased uncertainty because of trade concerns and weaker domestic demand,” said Wilkerson. “However, nearly 80 percent of manufacturing contacts reported confidence in their local economy.”...The month-over-month composite index was -1 in July, similar to the reading of 0 in June and slightly lower than an index of 4 in May. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The small change in manufacturing activity was mostly driven by a decline at durable production plants, including computers, electronic products, appliances, and miscellaneous manufacturing. Most month-over-month indexes edged lower in July, and the new orders, employment, and finished goods inventory indexes turned negative. However, the volume of shipments was flat after last month’s slowdown, and supplier delivery time increased. Nearly all of the year-over-year factory indexes increased, and the composite index rose from 4 to 11. The future composite index remained moderately positive, inching down from 11 to 9, while expectations for production, new orders, and capital expenditures edged higher. Another weak regional report.
Weekly Initial Unemployment Claims decreased to 206,000 -- The DOL reported: In the week ending July 20, the advance figure for seasonally adjusted initial claims was 206,000, a decrease of 10,000 from the previous week's unrevised level of 216,000. The 4-week moving average was 213,000, a decrease of 5,750 from the previous week's unrevised average of 218,750. The previous week was unrevised. The following graph shows the 4-week moving average of weekly claims since 1971.
Amazon requires police departments to advertise Ring home security products to residents in return for free Ring cameras - Ring, the smart home security company that Amazon acquired last year, is requiring US police departments across the country to advertise the Ring platform in return for free Ring smart home security cameras, according to a report in Motherboard on Thursday.Motherboard said it obtained a signed memorandum of understanding as well as emails between Ring and the Lakeland, Florida police department revealing the terms of these secret agreements.Ring gave the Lakeland police department 15 of its home security cameras for free (it's not clear which Ring cameras, but Amazon's website lists the cost of Ring cameras between $99 and $249), as well as access to a special online portal Ring created for law enforcement, according to the documents.The portal is essentially a map of all the Ring cameras in a neighborhood. Specific home addresses are obscured, but the site allows police to reach out to homeowners with Rings to request access to their footage, an arrangement that Motherboard says allows police to sidestep the usual warrants required for obtaining security footage. In exchange for these freebies and privileges, the Lakeland Police Department is contractually obligated to "encourage" residents to download the Ring app. For every download, the police department gets a $10 credit that can be used towards the purchase of more Ring cameras.
Puerto Rico prepares for massive protest to expel governor (AP) — Waving flags, chanting and banging pots and pans, tens of thousands of Puerto Ricans jammed a highway Monday to demand the resignation of Gov. Ricardo Rosselló in a crisis triggered by the leak of offensive, obscenity-laden chat messages between him and his advisers. The demonstration appeared to the biggest protest on the island in nearly two decades. “Finally, the government’s mask has fallen,” said Jannice Rivera, a 43-year-old mechanical engineer who lives in Houston but was born and raised in Puerto Rico and flew in solely to join the protest. The protest came 10 days after the leak of 889 pages of online chats in which Rosselló and some of his close aides insulted women and mocked constituents, including victims of Hurricane Maria. The leak has intensified long-smoldering anger in the U.S. territory over persistent corruption and mismanagement by the island’s two main political parties, a severe debt crisis, a sickly economy and a slow recovery from Maria, which devastated Puerto Rico in September 2017. “The people have awakened after so much outrage,” said 69-year-old retired nurse Benedicta Villegas. “There are still people without roofs and highways without lights. The chat was the tip of the iceberg.”
It Was Never Just About the Chat: Ruminations on a Puerto Rican Revolution - Let’s get something out of the way quickly: this was never about the goddamned Telegram group chat. The chat messages were the proverbial anvil that fell on the camel and broke its back, drowning the poor dromedary in a cup that runneth over, but it was not the sole reason why Fortaleza Street was on fire a few nights back. Yes, I have no doubt that any mentions about current Puerto Rican woes will focus exclusively on those cursed chat messages. And why is that? Well, simply, put, because it’s much more damned convenient to blame a group chat filled written by privileged men-children with the most reprehensible content imaginable than it is to engage with the more complex reality. This revolt-in-progress is the end product of a simmering anger fed by five centuries of uninterrupted imperialism, free-market disaster capitalism, an imposed dictatorial fiscal control board controlled by the very same people that bankrupted the island, and a storm of the century which was fueled by climate change. Avoiding these small troublesome details allows for the creation of a happier narrative that both conservatives AND liberals can get behind; a nice, convenient way to pretend that whatever the Hell is going on in that dog patch of a shithole island in the middle of all that “big water” has absolutely, positively nothing to do with the good ol’ US of A. It’s all just corrupt brown people with funny sounding names that speak Mexican being stupid. Now, having written all of that, allow me to learn ya’ somethin’ nice and neat about how this whole mess really got started. This article that you have taken the time to peruse through, dear reader, is a meandering mess, a free-flow rumination on resistance to ruination, and an on-the-fly primer on Puerto Rican revolution, so it would behoove you to not expect a polished exegesis on the intellectual fundamentals of post-colonial resistance designed to impress an academic audience. No, this piece is not intended to be a blow-by-blow replay of how we got here. Think of this piece as a scream against authority. More than a last hoorah about a failed governor, it is but one small part of a particularly loud “fuck you” to one of the worst mass-murderers in the history of my very own and beloved forever colony: Governor Ricardo Rosselló, son of former Governor Pedro Rosselló.
400,000 Puerto Ricans Flood Streets to Demand Governor Resign Immediately - Hours after Gov. Ricardo Rosselló resisted calls to step down over messages mocking victims of Hurricane Maria and attacking fellow politicians with misogynistic slurs, an estimated 400,000 Puerto Ricans took to the streets Monday and demanded Rosselló’s resignation in what was described as one of the largest protests in the island’s history. “The people have spoken,” Rep. Alexandria Ocasio-Cortez (D-N.Y.), whose mother was born in Puerto Rico, tweeted in response to video footage of Puerto Ricans flooding miles of the Las Américas highway. The highway march was part of an island-wide general strike aimed at forcing Rosselló’s ouster. As the New York Times reported, classes on the island were canceled, the largest mall in San Juan was closed, and banks did not open amid the massive demonstrations against Rosselló. In an address on Sunday, Rosselló announced he is stepping down as head of his party and said he will not run for reelection in 2020, but stopped short of resigning. “Governor Ricardo Rosselló has made further mockery of the Puerto Rican people by refusing to leave office,” the progressive coalition Power 4 Puerto Rico said in a statement Monday. “As worldwide demonstrations calling for the governor to step down continue, the legislature of Puerto Rico must now commence an impeachment process based on the ample evidence corroborated by many jurists of Rosselló breaking the law.” Laura Rexach Olivencia, a Puerto Rico radio host, called Rosselló’s refusal to listen to the public and step down “a slap in the face to all Puerto Ricans.” “For him to think he can keep governing for another year and a half as if nothing has happened is insulting to our core,” said Olivencia.
Puerto Rico governor resigns after popular protests - After two weeks of protests demanding his removal, Puerto Rico Governor Ricardo Rosselló announced his resignation late Wednesday night. In a statement posted online, Rosselló said he would step down on August 2. The announcement was met with cheers by thousands of protesters who gathered outside the governor’s La Fortaleza (The Fortress) residence in the Old San Juan district of the Caribbean island’s capital.Popular anger has been escalating since the release two weeks ago of private text messages between Rosselló and his inner circle, which mocked the victims of Hurricane Maria and draconian austerity measures imposed by the US federal government’s Fiscal Oversight Board. The protests reached their highpoint Monday with the largest demonstration in the history of the US territory. Between 500,000 and 1 million people participated in the huge procession in San Juan, a substantial portion of the island’s 3.2 million inhabitants.Analysts suggested that Rosselló spent much of his last day seeking to work out a deal over obtaining a pardon if he is convicted on corruption charges. On Wednesday, attorneys commissioned by the president of Puerto Rico’s House of Representatives, Carlos Méndez Núñez, a member of Rosselló’s own New Progressive Party (NPP), found five offenses that constitute grounds for impeachment, including the embezzlement of public funds and neglect of his official duties. The state legislature announced it would convene a special session Thursday to begin impeachment proceedings if the governor did not resign. Because Puerto Rico’s US colonial constitution does not include any provision for a special election, the governorship is being handed over to one of his cabinet officials, Secretary of Justice Wanda Vázquez, a fellow NPP member who has also been embroiled in various charges of unethical behavior.
Puerto Rico's New Governor Hit With Ethics Probe One Day After Rossello's Resignation - The hundreds of thousands of protesters who rallied across Puerto Rico (and in Puerto Rican communities across the US) will love this: On her first day as the commonwealth's governor-in-waiting, Secretary of Justice Wanda Vazquez has become the target of an investigation by the Office of Government Ethics, which announced a "review" of her conduct as the island's top law-enforcement official.Many of the Puerto Ricans who rallied against Ricardo Rossello, the island's deeply unpopular governor, who resigned in disgrace earlier this week, would welcome this investigation. Vasquez has a reputation for being a corrupt official who will carry on Rossello's policies, and marches had been planned to demand that she also resign, and that the island allow the people to select a new leader. The job would have fallen to the territory's secretary of state, but Luis Rivera MarÃn had resigned earlier this month over the texting scandal, and no replacement had yet been named. It's unclear when, exactly, that might happen: Whether Rossello plans to appoint another secretary before leaving office is an open question, Bloomberg reports. Zulma Rosario, executive director of the OGE, directed her staff Thursday to investigate accusations that Vazquez ignored evidence of corruption in disbursing the Hurricane Maria relief funds.
Sens. Warren and Sanders introduce bill that would slash Puerto Rico’s debt - Sens. Elizabeth Warren and Bernie Sanders on Wednesday introduced a bill that would essentially wipe out tens of billions of dollars of Puerto Rico’s $73 billion in outstanding debt. The proposal, entitled the “U.S. Territorial Relief Act of 2018,” counts Democratic Sens. Kirsten Gillibrand of New York, Edward J. Markey of Massachusetts and Kamala Harris of California as co-sponsors. The bill “provides an avenue to comprehensive debt relief for Puerto Rico and other hurricane-ravaged U.S. territories so that they have a chance to get back on their feet,” according to the sponsors. “Greedy Wall Street vulture funds must not be allowed to reap huge profits off the suffering and misery of the Puerto Rican people for a second longer. It is time to end Wall Street’s stranglehold on Puerto Rico’s future, return control of the island to the people of Puerto Rico and give the territory the debt relief it so desperately needs to rebuild with dignity,” said Sanders, I-Vt. “Puerto Rico was already being squeezed before Hurricane Maria hit and will now have to rebuild under the weight of crushing debt. Our bill will give territories that have suffered an extraordinary crisis a route to comprehensive debt relief and a chance to get back on their feet,” said Warren, D-Mass. “Disaster funding and the other resources in struggling territories’ budgets must not go to Wall Street vulture funds who snapped up their debt. Congress should pass this legislation right away — our fellow U.S. citizens are counting on us.” The legislation would give Puerto Rico and other U.S. territories the choice to terminate nonpension debt loads if they meet “certain stringent criteria,” according to the bill. Rep. Nydia Velazquez, D-N.Y., is planning to introduce a companion bill in the House in September. “After Maria, Puerto Rico needs every tool possible to recover physically and economically. This legislation provides another path for the Island to get back on its feet and begin the journey toward a brighter future,” she said in a statement. A U.S. territory would have to meet two of three criteria in order to qualify for the debt relief: be the recipient of major federal disaster assistance, have a population decline of 5 percent over 10 years or have per-capita debt exceeding $15,000. Puerto Rico would almost certainly meet these requirements if the bill were to be signed into law.
Hawaii telescope protest shuts down 13 observatories on Mauna Kea - Hundreds of protestors have blocked construction of the Thirty Meter Telescope (TMT) on Mauna Kea in Hawaii. Thirteen astronomical observatories that call the mountain home have evacuated workers and curtailed their operations. Work on the TMT was set to resume on 15 July after a four-year delay caused by legal challenges and protests. Hawaii’s state supreme court ruled in October that the TMT’s construction permit was valid. But last weekend, opponents of the telescope began gathering at a site at the base of the access road that leads up Mauna Kea. They sang, held signs and spoke out against the TMT, which they believe will further despoil a sacred mountain. “I honestly don’t know how this is going to end,” says Doug Simons, an astronomer and executive director of the Canada-France-Hawaii Telescope, one of the observatories on the mountain. The observatories on Mauna Kea’s summit — which include some of the world’s largest, such as the twin 10-metre Keck telescopes and the 8.2-metre Subaru Telescope — stopped collecting data and ordered employees and researchers to evacuate on 16 July. Affected projects include Andrea Ghez’s ongoing studies of the centre of the Milky Way. Ghez, an astronomer at the University of California, Los Angeles, had planned to use one of the Keck telescopes on 16 July to collect data on the motion of stars around the supermassive black hole at the centre of the Galaxy. Scientists use such information to test predictions of general relativity. But Ghez isn’t bothered by Keck’s temporary closure. “If I lose a night in order that everyone can figure out how to move forward in the long run, that’s far more important than one night of observing,” she says. Mihoko Konishi, an astronomer at Oita University in Japan, had planned to use the Subaru Telescope between 16 and 18 July to study disks of planet-forming dust and gas around other stars. “I know Mauna Kea is a sanctuary for Hawaiians, so I hope [for] a peaceful settlement for both sides as quickly as possible,” Konishi says. Some of the telescopes atop Mauna Kea can be operated remotely, without staff on-site. But facility managers opted not to do that in case something went wrong that observatory staff couldn’t handle from afar. “We anticipate returning to normal operations as soon as the situation allows,” said Jessica Dempsey, deputy director of the James Clerk Maxwell Telescope, in a 16 July statement.
Fighting for Immunity -- MIEL WAS NINETEEN when she began doing sex work through Craigslist Personals, in 2007. “I moved around a lot, because the Erotic Services section was free to advertise [on] as well,” she says. For the next twelve years, Miel worked as a sex worker throughout the Bay Area, first as a full-service worker and then at a BDSM dungeon in the East Bay. At one point during this period, she briefly stopped advertising online, and by the time she came back, the internet landscape from the previous two or three years was vastly different. . Still, even when major banking and credit card companies like Visa, Mastercard, and Chase began withholding their services from online escorting and porn sites, as well as from individuals working in the sex industry, life went on. Until SESTA-FOSTA was enacted in April 2018. “Blow after blow, Nightshift, Rentboy, every free website went down,” Miel says. “One day to the next, everyone’s income was pulled. I had to switch from being an independent, full-service worker to shifting my energy into advocacy work.” Sold as a crackdown on internet-sanctioned sex trafficking, SESTA-FOSTA (or the Stop Enabling Sex Traffickers Act–Allow States and Victims to Fight Online Sex Trafficking Act) effectively removed the “safe harbor” clause of the Internet Communications Code, making websites liable for any and all user content that could be construed as facilitating or promoting prostitution. Sex workers have argued that rather than helping vulnerable people, the new law criminalizes them further, and it shows little sign of slowing down. California State Senator Scott Wiener hopes to rectify this state of affairs, at least within state lines. At a February 11 press conference, Wiener announced that he would sponsor Senate Bill 233, “Immunity from Arrest,” which, if signed into law, will bar police departments across the state from arresting sex workers who come forward to report being the victim of, or witness to, a crime. Standing behind him at the podium were staff members from St. James Infirmary, a San Francisco-based public health clinic that offers health and outreach services to sex workers, and the nation’s first clinic to be staffed entirely by sex workers. The St. James staff had fought alongside other sex workers’ rights groups like SWOP-Sacramento and the Erotic Service Provider Legal, Educational and Research Project to bring this bill into being.
California Launches Creepy Cradle-To-Career Data System To Track Everything About Children -Just in case we haven’t provided you with enough creepy dystopian news lately, the nation’s leader in Creepy Dystopia, California, has a brand new program. The “Cradle to Career Data System” will study and document everything about a child born in the state. But don’t worry, it’s for your children’s own good. Beginning at birth and stalking the child until he or she joins the workforce, California wants to keep on eye on all sorts of demographics and variables. They’ll do this by collecting information from “partner entities.” They’ll use this information, according to the Pasadena Star, to “provide appropriate interventions and supports to address disparities in opportunities and improve outcomes for all students.” The “partner entities” include (but are not limited to) “state entities responsible for elementary and secondary education data, entities responsible for early learning data, segments of public higher education, private colleges and universities, state entities responsible for student financial aid, childcare providers, state labor and workforce development agencies, and state departments administering health and human services programs.” (source) So, your kid’s teachers, principles, professors, babysitters, and the purveyors of any state services you happen to use will all cough up every detail of your child’s life. This to me has hints of communist countries who pluck the brightest students from their home and educate them to work for the state. However, the admitted goal is data collection for the folks who make the rules. Easily the creepiest thing to come out of California since “The Silence of the Lambs” was released into theaters, the “Cradle to Career Data System” aims to collect the ethnic, economic and educational records of every child in the state, track their grades and their progress into early adulthood, and make some form of the data available to policy makers, analysts and activists. (source) This isn’t a maybe. It’s already passed as a trailer bill (so it didn’t go through the usual legislative process) and has been funded with a budget of $10 million. The governor’s Office of Planning and Research is now authorized to enter into contracts with “planning facilitators” who will convene advisory groups “comprised of representatives of students, parents, labor, business and industry, equity and social justice organizations, researchers, privacy experts, early education experts, school districts, charter schools, and county offices of education.” (source) We’re already tracked everywhere we go once we’re old enough to have a cellphone or use the internet. But this starts right, as the title of the program points out, at the cradle.
Parents who won’t vaccinate their kids turning to home-schooling in California, data show --In 2016, California implemented one of the strictest immunization laws in the country, requiring that all children be up to date on their vaccinations to attend school unless a doctor says otherwise. The law, however, does not apply to children who are home-schooled, a loophole that parents seem to be increasingly exploiting. Over the past three years, the number of kindergartners who were home-schooled and did not have their shots quadrupled, according to a Times analysis of state data. It is unclear whether parents are opting for home-schooling solely because they want to avoid vaccines, or if they are choosing to home-school for other reasons and also happen to not want to vaccinate their children. Regardless, there are now thousands of home-schooled children all over the state who do not have their shots — a number that keeps rising every year. And though most of their schooling may take place at home, many are part of programs that meet several times a week with other students. If one contracted a disease such as measles, they could still spread it at the park, or the grocery store, or anywhere they come into contact with other people, said Dr. James Cherry, a UCLA expert on pediatric infectious diseases. California passed its strict vaccination law in 2015 following a major measles outbreak centered around Disneyland that scientists say was fueled by rising numbers of unvaccinated kids in the state. Prior to the law’s implementation, parents could fill out a form saying that immunizations violated their personal beliefs and avoid vaccinating their kids. Now, parents must get a doctor’s note saying they have a medical reason not to be vaccinated. Public health advocates have lauded the law’s success. In the first year the law was in place, the state’s kindergarten vaccination rate shot up above 95% for the first time in a decade. But the law’s implementation has also coincided with an increase in parents choosing to home-school their kids — and not vaccinating them. In the school year that ended in June, there were 6,741 home-schooled kindergartners without their shots in California, compared with 1,880 in the 2016-17 school year, according to state data. Overall, 1.2% of the state’s kindergartners were home-schooled and unvaccinated in the last school year, according to state data. (The state health department collects vaccination data only on kindergartners and seventh graders.)
Pennsylvania school district tells parents to pay their lunch debt, or their kids will go into foster care - - The Wyoming Valley West School District in Pennsylvania sent out hundreds of letters this week telling parents who had lunch debt to pay or their children could go into foster care. The letter, which was reviewed by CNN, told parents that there have been "multiple letters sent home with your child" and that no payments had been made. "Your child has been sent to school every day without money and without a breakfast and/or lunch," the letter read. It also said failure to provide children with food could result in parents being sent to Dependency Court."If you are taken to Dependency court, the result may be your child being removed from your home and placed in foster care," the letter read. CNN has reached out to Wyoming Valley West School District, but has not heard back. About 1,000 letters were sent to parents in the district, CNN affiliate WNEP reported, causing an uproar in Luzerne County, near Scranton, and making national headlines. Wyoming Valley's Cafeteria Purchase Charging and Insufficient Funds Policy says nothing about parents potentially going to court or giving up their children. It does say that families with a student account that reaches negative $10 or more will receive "an automated call every Friday until the account" is paid off. Joseph Muth, the director of federal programs for the school district, was identified by WNEP as the man who wrote the letter. Muth told the affiliate the letter was a "last resort" and that the district is owed more than $22,000 by roughly 1,000 students. Four accounts show parents owe more than $450 each, WNEP reported. Muth also told the affiliate the school district was considering serving students with delinquent accounts peanut butter and jelly sandwiches.
New South Dakota law requiring 'In God We Trust' sign to hang in public schools goes into effect - South Dakota public schools will be required to start hanging "In God We Trust" signs following a new law that went into effect this month. Public schools across the state's 149 districts must paint, stencil or prominently display the national motto, according to the Rapid City Journal. Displays must measure at least 12-by-12 inches, according to the outlet, and must be approved by the school's principal, the law states. The Journal reported that South Dakota lawmakers who proposed the legislation said the bill was aimed at inspiring patriotism in schools. The law, signed by Gov. Kristi Noem (R) in March, requires the schools to have the sign on display in a prominent location on school grounds, such as in entryways, cafeterias or common areas, by the start of the academic year. The legislation states that South Dakota's attorney general will represent school districts or school boards at no cost should they face a lawsuit over the displays. The law, however, does not provide funding for school districts to acquire or put up the displays, the Rapid City Journal reports.
Some Georgia Elementary Schools to Have Agriculture Classes - Many high schools, especially in farming communities, have or offer agriculture classes. But for younger kids, and for kids in cities and suburbs, agriculture education is completely overlooked. That's beginning to change. A new pilot program in the state of Georgia will find 20 elementary schools embarking on a three-year agriculture education adventure. This follows a 2017 agreement between USDA secretary Sonny Perdue and the Future Farmers of America, an influential force for agriculture education in the U.S., but was put into motion thanks to a Georgia state bill. The classes will include lessons about food and where it comes from, plant and animal science, conservation and the environment, and the agriculture industry and jobs within it, according to WABE, the Atlanta NPR affiliate. Agriculture education has long been a huge missing piece of public education in this country. What could be more important than learning about all of the thousands of threads connected to farming? Agriculture education includes science, math, business, environmental studies, social studies, history, engineering — and, of course, it affects what kids eat, what they wear, and how they live. The Georgia pilot program is a great start towards making sure that the next generation understands what agriculture is, so they can continue taking it forward.
Need A Digital Rocket Launcher- Millennials Addicted To Video Games Spend Big Bucks The World Health Organization (WHO) recognized last year that millennials who play excessive amounts of video games could have a mental health condition. The disorder happens when gaming interferes with people's daily lives. A new Wall Street Journal report builds on video game addiction with youngsters and tells a story where these children are taking their parents credit cards and racking up some serious bills on in-game spending.The mindset of a millennial addicted to video games is: steal their parents' credit cards to buy digital goods, such as upgraded guns and new avatars. These in-game spending impulses are dubbed microtransactions, have become a very profitable business model for the gaming industry. But, at the same time, ruining the lives of many youngsters and causing financial stress on their families.In-game spending has become so successful in the last five years that 2018 sales exceeded $93 billion, up from approximately $41 billion five years ago, according to Nielsen's SuperData game research group.Nathan Dungan, founder and president of financial-education firm Share Save Spend, told The Journal that "the danger with these purchases is that money turns magical. Children's brains can't process these virtual transactions because it's not tangible to them." The Journal interviewed Ms. O'Connell, who one day noticed her son, Steven Flaxman, charged $1,500 for Xbox in-game purchases. Steven told his mother that since the transactions were in digital coins, not dollars, he didn't realize that his mother's card would be charged.
Survey- Top Career Choice For American Kids Is To Be 'YouTubers'; For Chinese Kids 'An Astronaut --A new study by Harris found that the number one career choice for American kids is to become a YouTuber, while the number one choice for Chinese children is to become an astronaut. Participants were asked, “What do you want to be when you grow up?” 29% of American kids said they wanted to become a YouTuber, while 30% of children in the UK said the same thing. However, in China, 56% wanted to become an astronaut while only 18% wanted to become a YouTuber. American kids want to be youtubers, and the Chinese kids want to be astronauts. pic.twitter.com/HY2MBDG8wD— Andrew Chen (@andrewchen) July 17, 2019The reality is that just like kids who aspire to be rappers, while anyone can technically be a YouTuber, the chances of success are minimal. While no one is comparing making videos to working on an oil rig, the sheer workload it takes to establish a platform on YouTube is monumental.
Louisiana governor declares state emergency after local ransomware outbreak Louisiana Governor John Bel Edwards has activated a state-wide state of emergency in response to a wave of ransomware infections that have hit multiple school districts. The ransomware infections took place this week and have impacted the school districts of three North Louisiana parishes -- Sabine, Morehouse, and Ouachita. IT networks are down at all three school districts, and files have been encrypted and are inaccessible, local media outlets are reporting.This is the second time that a state governor has activated a state emergency due to ransomware or any form of cyber-attack. The first time was in Colorado in February 2018, when the Colorado Department of Transportation was forced to shut down operations because of an infection with the SamSam ransomware. However, that state emergency activated additional state resources to help with traffic, road management, and transportation, and not with deploying cyber-security experts to help victims, like in Louisiana's case. By signing the Emergency Declaration, the Louisiana governor is making available state resources to impacted schools.
With anger growing, Chicago Teachers Union floats threat of September walkout - The Chicago Teachers Union has floated the possibility of calling a strike when school reopens in September if no agreement is reached with city officials on a new contract for 20,000 teachers and paraprofessional in the country’s third-largest school district.Last week, CTU President Jesse Sharkey informed Mayor Lori Lightfoot via email that she had one month to make good on her campaign promises to avert a strike. “Those campaign promises mirrored the equity agenda of our movement,” Sharkey said, adding that teachers “deserve a fair contract with equal pay, adequate staffing, class size limits and social justice for their students. Candidate Lightfoot has vowed there will be no teachers strike on her watch. Mayor Lightfoot has a month to make good on that and her campaign promises.” Chicago’s corporate media largely wrote off the CTU threat as nothing more than political theater but also expressed concern about the opposition of angry teachers. “Now the board’s initial offer as well as the union’s bellicose reacting to it may be nothin more than the sort of preliminary posturing that’s common in the professional wrestling ring,” the business publicationCrain’s wrote. “And if Sharkey’s talk winds up being just that—talk—that’s fine. He’s made his members happy. But there’s a chance its more than that: an effort to intimidate a new mayor with tactics that echo the run-up to the strike that marked her predecessor’s early tenure in 2012.”Sharkey, a member of the now-defunct International Socialist Organization, is a known quantity in Chicago. Despite his rhetoric about “social justice,” Sharkey, his predecessor Karen Lewis and their so-called Caucus of Rank-and-File E ducators (CORE) have collaborated with the Democratic political establishment for years in creating the over-crowded classrooms, understaffing and poor pay which Sharkey claims to oppose.
Search Warrant Alleges Embezzlement, Use of ‘Ghost Students’ by Epic Schools - A state investigator’s search warrant filed in court Tuesday seeks evidence of alleged embezzlement of state funds and obtaining money under false pretenses at Epic Charter Schools, including through the use of “ghost students” who receive no actual instruction at the school. Epic and and its two co-founders, David Chaney and Ben Harris, are the subject of a state law enforcement investigation, according to the seven-page affidavit and warrant filed in Oklahoma County District Court. Read the OSBI Search Warrant, Affidavit The agent reviewed bank statements and found Chaney and Harris split school profits of at least $10 million between 2013 and 2018, the affidavit states. Epic is a publicly funded charter school that is managed by a for-profit company, Epic Youth Services, which is owned by Chaney and Harris. The filing of the warrant was first reported by The Oklahoman. On June 28, OSBI agents visited the Oklahoma City home of an Epic teacher, the affidavit states. Her computer, cellphone and files, including notes, letters, text messages with Epic parents, Chaney and Harris, is what agents sought in the search warrant. Epic is accused of receiving state funding for “ghost students” as early as 2014. Those students were homeschooled and attended private and sectarian schools and enrolled in Epic to receive an $800 “learning fund” without receiving instruction from Epic, the affidavit states. Epic teachers dubbed those students “members of the $800.00 club.” The learning fund is provided to all Epic students and can be spent on curriculum, technology and extracurricular activities.
University students get help from West Texas oil and gas lands -— College is expensive, but if your student wants to go to UT in Austin they may be able to get some help. $160 million is going to pay for tuition and fees for low and middle income undergraduates whose families earn no more than $65,000 a year. It's all thanks to a new endowment for the campus which is funded by a business a little closer to home. Back in 1876 the state set aside more than one million acres, some right here in West Texas, to support the development of the UT and A&M University systems. Using a fund sourced with discovery of oil under those lands and the advancement of hydraulic fracking, the value of the fund has shot up. The biggest piece of land is nearly 500,000 acres in Hudspeth County, they also have a little more than 6,000 acres in Ector County, more than 65,000 acres in Crane County, 190,000 acres in Pecos County, and almost 350,000 acres in Andrews County... Most of the royalties earned off the land go into stocks and bonds along with other assets, but they are able to distribute a portion of the money. As long as that portion stays under 7%, two thirds of that money goes to the UT system and what's left goes to the Texas A&A system.
'Noose' Which Sent UMich Dean On Racism Tirade Turns Out To Be Fishing Knot Practice - A 'noose' found last month at the University of Michigan Medical School turns out to have been a practice knot used in fishing after an employee came forward to 'clear the air,' according to MLive. An investigation by UM’s Division of Public Safety and Security concluded the spool rope used for medical procedures was being used by a person on a break to practice tying a “Uni Knot,” which is a type of knot used for fishing. After the spool was returned to the storage area, the knot was still in place and discovered the following day by an employee. –MLive The 'noose' was fashioned out of a rope typically used for traction following surgical procedures, according to DPSS Director of Strategic Communications Heather Young, who noted that the loose end of the rope was tied in the knot while still connected to the spool. Not one to hedge his language amid an ongoing investigation, UM Medical School Dean Marschall Runge said in an employee email following the June 20 discovery of the 'noose': "Yesterday, in one of our hospitals, a noose — a symbol of hate and discrimination — was found at the work station of two of our employees," adding "We have taken immediate action to have this investigated as both an act of discrimination and a criminal act of ethnic intimidation. This act of hate violates all of the values that we hold dear and will not be tolerated." Without acknowledging that he participated in 'sewing racial discord' with false assumptions, Runge now says that while the incident has affected the entire community, it united people in their hatred of hate (and hate-shaped fishing knots?). "Our community came together to support each other, reaffirmed our stance against hate, and began having open dialogues about this incident and ways to make our community more inclusive," he said in a follow-up email.
Warren unveils details of plan to cancel $640B in student loan debt - Democratic 2020 candidate Sen. Elizabeth Warren on Tuesday disclosed the details of her promise to cancel approximately $640 billion of student loan debt, targeted at lower and middle-income earners.Warren introduced the bill — dubbed The Student Loan Debt Relief Act — along with Rep. Jim Clyburn, the No. 3 House Democrat, who is sponsoring a companion measure in that chamber. Clyburn said he's committed to seeing the measure get floor debate sometime this fall, although he has not yet discussed it with House leaders.“Student loan debt in this nation has reached crisis proportions,” Warren (D-Mass.) said at an afternoon press conference with Clyburn. The more than $1.5 trillion of outstanding debt, she said, “is a drag on our entire economy” as loan borrowers delay or forgo economic activity such as buying a house or starting a business.Warren’s plan, first announced in April, calls for canceling up to $50,000 of debt for all borrowers earning less than $100,000, with proportionally less debt relief for those earning up to $250,000.The legislation introduced Tuesday outlines a process by which the federal government would automatically cancel most student loans without requiring borrowers to submit applications. The Education Department would use existing income and debt information to determine who qualifies. Warren's measure follows a competing bill released earlier this year by her presidential campaign opponent, Sen. Bernie Sanders (I-Vt.). His plan would go further in eliminating all outstanding student loan debt, regardless of a borrower’s income. Sanders unveiled his legislation last month alongside Reps. Pramila Jayapal (D-Wash.), Ilhan Omar (D-Minn.) and Alexandria Ocasio-Cortez (D-N.Y.), who are among the co-sponsors to a companion measure in the House. They argue that it’s important to create universally available government benefits — like loan forgiveness for all — to ensure lasting political support.
Turning 26 Is A Potential Death Sentence For People With Type 1 Diabetes In America - On the day Jathan Laverty turned 26, he was no longer eligible for coverage under his parents’ health insurance. .Laverty has Type 1 diabetes, and as of that day in 2017, He found himself needing medication to live that he could not afford. “It’s a human necessity for me,” Laverty, now 28, told BuzzFeed News. “It’s my life or death every time I do or don’t take insulin.” About 1.25 million Americans have Type 1 diabetes, a disorder in which the immune system attacks the pancreas and interferes with the body’s ability to absorb energy from food. People with Type 1 diabetes are dependent on multiple types of insulin to survive because the disease shuts down the pancreas’s ability to produce the chemical, which regulates the amount of sugar in the blood. Without insulin, cells cannot absorb sugar, and the body is forced to rapidly break down fat cells to use as a backup fuel source. This dehydrates the body, turns the blood acidic, and leads to a life-threatening complication called diabetic ketoacidosis (DKA). Most people with Type 1 diabetes take at least two types of insulin: a long-acting type, taken daily, that constantly releases insulin, and a short-acting or rapid-acting type, taken either before or after eating. The amount of insulin a person with Type 1 diabetes needs varies dramatically depending on age, weight, food eaten, exercise, illness, stress, and, for women, whether they are menstruating or ovulating. In fact, many endocrinologists will overprescribe insulin so that patients have enough for emergency situations. All that medication is pricey. Laverty said that in 2017, his insulin cost him approximately $950 a month without his parents’ insurance coverage. So he began to ration. He gave himself only what he could afford to buy, the bare minimum he needed to function. “I was taking half of my medication that I needed to be taking,” he said. Laverty began skipping meals so he wouldn’t have to use a dose of his fast-acting insulin, and he lowered the amount of insulin in every injection he gave himself. The effects were immediate. His energy levels dropped, leaving him irritable and fatigued and in a constant state of discomfort. He couldn’t sleep, he was always thirsty, and he constantly had to urinate.
Insurers Running Medicare Advantage Plans Overbill Taxpayers By Billions As Feds Struggle To Stop It - Health insurers that treat millions of seniors have overcharged Medicare by nearly $30 billion the past three years alone, but federal officials say they are moving ahead with long-delayed plans to recoup at least part of the money.Officials have known for years that some Medicare Advantage plans overbill the government by exaggerating how sick their patients are or by charging Medicare for treating serious medical conditions they cannot prove their patients have.Getting refunds from the health plans has proved daunting, however. Officials with the Centers for Medicare & Medicaid Services repeatedly have postponed, or backed off, efforts to crack down on billing abuses and mistakes by the increasingly popular Medicare Advantage health plans offered by private health insurers under contract with Medicare. Today, such plans treat over 22 million seniors, more than 1 in 3 people on Medicare.Now CMS is trying again, proposing a series of enhanced audits tailored to claw back $1 billion in Medicare Advantage overpayments by 2020 — just a tenth of what it estimates the plans overcharge the government in a given year.At the same time, the Department of Health and Human Services Inspector General’s Office has launched a separate nationwide round of Medicare Advantage audits. As in past years, such scrutiny faces an onslaught of criticism from the insurance industry, which argues the CMS audits especially are technically unsound and unfair and could jeopardize medical services for seniors.
An onslaught of pills, hundreds of thousands of deaths: Who is accountable? WaPo - The origin, evolution and astonishing scale of America’s catastrophic opioid epidemic just got a lot clearer. The drug industry — the pill manufacturers, wholesalers and retailers — found it profitable to flood some of the most vulnerable communities in America with billions of painkillers. They continued to move their product, and the medical community and government agencies failed to take effective action, even when it became apparent that these pills were fueling addiction and overdoses and were getting diverted to the streets. This has been broadly known for years, but this past week, the more precise details became public for the first time in a trove of data released after a legal challenge from The Washington Post and the owner of the Charleston Gazette-Mail in West Virginia. The revelatory data comes from the Drug Enforcement Administration and its Automation of Reports and Consolidated Orders System (ARCOS). It tracks the movement of every prescription pill in the country, from factory to pharmacy . “This really shows a relationship between the manufacturers and the distributors: They were all in it together,” said Jim Geldhof, a retired DEA employee who spent his 43-year career working on drug diversion cases and is now a consultant for plaintiffs in a massive lawsuit against the drug industry. “We’re seeing a lot of internal stuff that basically confirms what we already knew. It just reinforces the fact that it was all about greed, and all about money.” The industry has denied that vigorously, blaming criminal doctors who prescribed opioids as if they were candy and individuals who abused the drugs. The industry also contends that the DEA had all the information it needed to stop diversion of pills into the black market. “The DEA has been the only entity to have all of this data at their fingertips, and it could have used the information to consistently monitor the supply of opioids and when appropriate, proactively identify bad actors,” said John Parker, spokesman for the Arlington, Va.-based Healthcare Distribution Alliance. “Unlike the DEA, distributors have no authority to stop physicians from writing prescriptions, nor can they take unilateral action to halt pharmacies’ ability to dispense medication.”
The biggest civil trial in U.S. history will start with these Ohio counties - WaPo — At Knuckleheads Bar & Grill in Parma, the subject on a sweltering Saturday afternoon was the drug crisis. More specifically, the recent disclosure that the CVS across the street received more pain pills — 6.4 million — over a seven-year period than any other drugstore in Cuyahoga County. “Location, location, location,” said Mike Gorman, 37, who was drinking and hanging out with friends. “It’s right near the highway, which makes it easy to access” from Cleveland.And there was the homeless encampment just beyond the CVS, over by the train tracks, behind the strip mall. It’s popular with heroin users, the regulars at the sports bar said.“It’s a terrible thing, but I don’t blame CVS,” Gorman said, contending that drug companies made large profits and encouraged doctors to prescribe opioids.The CVS in this white working-class suburb of Cleveland is a three-hour drive and, culturally, even farther from the southern Ohio section of Appalachia that has become widely associated with the opioid epidemic. But last week’s revelation that drug companies saturated the United States with 76 billion pain pills over seven years shows that no corner of the country escaped the drug crisis. Two other drugstores in this city of 80,000 placed second and fifth on the Drug Enforcement Administration’s list of Cuyahoga County locations. Wholesalers shipped opioids at 5.4 million and 3.7 million doses respectively to those. The list was disclosed by The Washington Post last week. Cuyahoga County and nearby Summit County soon will be at the center of the most important legal test of how much responsibility drug companies bear for the opioid epidemic. Barring a settlement, the two counties are scheduled to go to trial in October as the first case among the consolidated lawsuits brought by about 2,000 cities, counties, Native American tribes and other plaintiffs.
Drug Crisis- Wasp Spray Used As Alternative To Meth In West Virginia - The drug crisis in West Virginia is so bad that wasp spray is now being used as an alternative form of methamphetamine, reported WCHS-TV Charleston, West Virginia. Police are warning about this dangerous trend as it erupts across Boone County, a region in West Virginia known for widespread opioid and methamphetamine use."We're seeing this here on the streets in Boone County," Sgt. Charles Sutphin said. "People are making synthetic type methamphetamine out of wasp spray." State Police have said the wasp spray has already led to three overdoses in the last week. Sgt. Sutphin said the psychoactive effects of wasp spray include erratic behavior and extreme inflammation and redness of the hands and feet. "From what we're being told, if you use it, you know, you might use it once or twice and be fine, but the third time when your body hits that allergic reaction, it can kill you," Sutphin said.
Nutrition Science Is Broken. This New Egg Study Shows Why. -IT’S BEEN A TORTUOUS PATH FOR THE HUMBLE EGG. For much of our history, it was a staple of the American breakfast — as in, bacon and eggs. Then, starting in the late 1970s and early 1980s, it began to be disparaged as a dangerous source of artery-clogging cholesterol, a probable culprit behind Americans’ exceptionally high rates of heart attack and stroke. Then, in the past few years, the chicken egg was redeemed and once again touted as an excellent source of protein, unique antioxidants like lutein and zeaxanthin, and many vitamins and minerals, including riboflavin and selenium, all in a fairly low-calorie package.This March, a study published in JAMA put the egg back on the hot seat. It found that the amount of cholesterol in a bit less than two large eggs a day was associated with an increase in a person’s risk of cardiovascular disease and death by 17 percent and 18 percent, respectively. The risks grow with every additional half egg. It was a really large study, too — with nearly 30,000 participants — which suggests it should be fairly reliable.So which is it? Is the egg good or bad? And, while we are on the subject, when so much of what we are told about diet, health, and weight loss is inconsistent and contradictory, can we believe any of it? Quite frankly, probably not. Nutrition research tends to be unreliable because nearly all of it is based on observational studies, which are imprecise, have no controls, and don’t follow an experimental method. As nutrition-research critics Edward Archer and Carl Lavie have put it, “’Nutrition’ is now a degenerating research paradigm in which scientifically illiterate methods, meaningless data, and consensus-driven censorship dominate the empirical landscape.”
Rising Emissions Are Robbing Us of Nutrients - It’s widely known that burning fossil fuels leads to all kinds of disastrous things: Worsening air pollution, acidic oceans, and flooding. But not many people know that the increasing concentration of carbon dioxide in our atmosphere is making our food more sugary and less nutritious. A new study in Lancet Planetary Health projects that the combined effects of climate change parching crops and the decreased nutritional value of the food those crops produce would wipe out significant efforts to combat malnourishment around the world. Nutrient deficiencies cause to2.2 million deaths every year among children under the age of five. There are lots of efforts underway to prevent those deaths: People are adding vitamins to processed foods, breeding better crops, and working to make nutrients available to more people. That work is saving lives, but the way we are altering our atmosphere is making it harder. This study suggests that the human diet of 2050 would have 19.5 percent less protein, 14.4 percent less iron, and 14.6 percent less zinc than we’d have in the absence of climate change and increased CO2 in the air. That means millions more deaths and disabilities that could have been prevented. “The size of the problem is staggering,” said Kristie Ebi, a professor of global health at the University of Washington who was not involved with this paper. “This is likely the largest impact on health from rising concentrations of CO2 in the atmosphere.” The latest study takes recent research on how rising concentration of carbon dioxide saps nutrition from food, and projects their findings forward. Plants convert the additional CO2 in the air into more sugar. That means plants grow faster, without accumulating as much iron, zinc, protein, and other nutrients along the way. “Particularly for the poor, who eat more starch because it’s cheaper, the quality of food matters enormously,”
Don’t let vegetarian environmentalists shame you for eating meat. Science is on your side. - Around the world, we’re being told to stop eating meat. Headlines, think tanks and activists all ask us to change our diet to combat climate change. The Washington D.C.-based World Resource Institute suggests that resource management will require Americans to cut their average consumption of beef by about 40%, and scientists from Manchester University just claimed that “a typical summer barbecue for four people releases more greenhouse gases into the atmosphere than an 80 mile car journey." One of the professors points out that “the production of a 100g medium-sized beef burger releases enough greenhouses gases to fill more than 60 balloons.”The scientists propose a solution: we all need to replace our burgers with “veggie sausages,” swap the cheese for half an onion and replace the butter with “vegetable spread”. Voila: half the emissions. I’m a vegetarian myself for ethical reasons, but the climate scientists’ barbecue prescription leaves me with a bad taste in my mouth — and it is not just the vegetable spread.We’re often told that going vegetarian is the biggest thing that any of us could do, with headlines telling us: "Cut your carbon footprint in half by going vegetarian." Statements like that are misleading for two reasons.First, that cut isn’t to our entire emissions — just those from food. That means Four-fifths of emissions are ignored, according to an analysis of emission from the European Union, which means the impact is actually five-times lower. Second, the more optimistic figures about how much of your emissions you can cut are based not just on a vegetarian diet, but on an entirely vegan one where we avoid every single animal product altogether. A systematic peer-review of studies of going vegetarian shows that a non-meat diet will likely reduce an individual’s emissions by the equivalent of nearly 1,200 lbs carbon dioxide. For the average person in the industrialized world, that means anemissions cut of just 4.3%.
What If Avoiding the Sun Is Bad for You? - It was around 15 years ago that Dr. Matt Zirwas, an Ohio-based dermatologist, first noticed something curious about the people he was treating at his clinic.“The older patients I was seeing [who had] lots of sun damage and lots of skin cancer would be very robust, very energetic people,” he says. These were people who, apart from their skin cancers, tended to be in excellent health and taking very few prescription drugs.“But then I’d see these people who had beautiful skin and no cancers, and they were very low-energy and taking medications for all these different health problems,” he recalls. He began to wonder whether exposure to ultraviolet (UV) light, mostly from the sun, had more health benefits than he and other experts realized. When most people consider UV light and its effects, skin cancer and premature aging come to mind. And there’s no question that exposure to the sun, tanning beds, and other sources of UV light damages the skin in ways that promote aging and cancer. That’s why most dermatologists and public health officials recommend that Americans slather sunscreen on exposed skin whenever they leave the house — even in the wintertime — or take other steps to avoid sun exposure. “The standard line from dermatologists is that no part of your skin should ever be exposed to unprotected sun,” Zirwas says. But his clinical observations made him wonder whether the story on UV light was really all negative, and if a zero-tolerance policy on sun exposure was warranted when taking a broad view of human health. “We evolved as outdoor creatures who were exposed to the sun, so it never made sense to me that sun exposure would be all bad,” he says.
Europe Faces Looming Syphilis Epidemic As 'Hookup' Apps Go Viral - The rise of dating apps and falling rates of HIV in the developed world have led to the reemergence of an STD that was, until recently, confined to literary novels from the 19th century.The spread of syphilis in Europe is intensifying, said Andrew Amato-Gauci, the head of the HIV/AIDS, sexually transmitted infections and viral hepatitis program at the European Centre for Disease Prevention and Control (ECDC). He told RT that various factors play into the outbreak, such as "people having sex without condoms, multiple sexual partners and a reduced fear of acquiring HIV from condomless sex." A new report by the ECDC shows that the number of confirmed cases of syphilis across the EU soared by 70% between 2010 and 2017. The biggest innovation in the dating world during that period is the rise of "hookup" apps like Tinder, Grindr and Bumble - aka bringing the "sharing economy" to the dating world. Rates of HIV/AIDS deaths have been declining across the world after peaking in the early 2000s. Oddly enough, the leader in Europe in Iceland, a country where the 300,000 inhabitants are all, at the very least, distant cousins. The syphilis rate in Iceland has climbed by 876%. In Ireland, syphilis rates have climbed 224%, while Germany and Britain have seen rates double.According to the ECDC, homosexual sex - specifically "men having sex with men" - is responsible for two-thirds of the cases reported between 2007 and 2017. Heterosexual men constitute 23% of the cases, and women 15%. Amato-Gauci said growing rates of unprotected sex is only part of the problem. Lack of testing and sex education are also issues.
Recent Rise of Drug-Resistant Superbug Could Be Due to Climate Crisis - A new analysis warns that "global warming may have played a pivotal role" in the recent rise of a multidrug-resistant fungal superbug, sparking questions and concerns about the emerging public health threats of the human-caused climate crisis. Reporting on the research Tuesday, CNN outlined the history of Candida auris:Until recently, scientists considered it a mystery how C. auris popped up in more than 30 countries around the globe a decade after it was first discovered in 2009. It emerged simultaneously on three continents — in India, Venezuela, and South Africa — between 2012 and 2015, each strain being genetically distinct.The study — published Tuesday in mBio, an open-access journal of the American Society for Microbiology — argues that Candida auris "may be the first example of a new fungal disease emerging from climate change.""The argument that we are making based on comparison to other close relative fungi is that as the climate has gotten warmer, some of these organisms, including Candida auris, have adapted to the higher temperature, and as they adapt, they break through human's protective temperatures," lead author Arturo Casadevall, chair of molecular microbiology and immunology at Johns Hopkins Bloomberg School of Public Health, said in a statement. Fungal diseases are relatively uncommon in humans because of body temperature — but if they adapt to rising temperatures, and aren't easily treatable with medications, they could increasingly endanger human health on a global scale. Casadevall warned that while C. auris may be the first fungal disease whose emergence scientists have tied to rising temperatures, it potentially won't be the last. "Global warming may lead to new fungal diseases that we don't even know about right now," he said. "What this study suggests is this is the beginning of fungi adapting to higher temperatures, and we are going to have more and more problems as the century goes on."
Food Industry’s Switch to Non-BPA Linings Still Poses Health Risks - Bisphenol A (BPA) is well-known for its estrogen-mimicking properties (Trusted Source), and is used in many canned foods. While manufacturers have been removing this compound from their products, new research is showing that the substitute might be just as bad.Bisphenol S (BPS) and bisphenol F (BPF) are manufactured chemicals now being used to replace the BPA in plastics lining aluminum cans and items like cash-register receipts.But, according to a study published in the Journal of the Endocrine Society, these two substances are also linked with an increased likelihood of childhood obesity. Researchers analyzed data from the U.S. National Health and Nutrition Examination Survey (Trusted Source)to evaluate associations between BPA, BPS, and BPF, and body mass outcomes among children ages 6 to 19. They found children with higher levels of BPS and BPF in their urine were more likely to be obese compared to those with lower levels. Asked if she found the findings surprising, study author Melanie Jacobson, PhD, MPH, of NYU School of Medicine, told Healthline, "Unfortunately not. BPF and BPS have almost the same chemical structure as BPA, so we might expect that they could act similarly in the body."
In Roundup case, U.S. judge cuts $2 billion verdict against Bayer to $86 million (Reuters) - A California judge on Thursday reduced a $2 billion jury verdict, slashing the award for a couple who blamed Bayer AG’s glyphosate-based weed killer, Roundup, for their cancer to $86.7 million. Superior Court Judge Winifred Smith of the California Superior Court in Oakland said the jury’s billion-dollar punitive damage awards were excessive and unconstitutional, but rejected Bayer’s request to strike the punitive award outright. Under Smith’s final order, California couple Alva and Alberta Pilliod would receive roughly $17 million in compensatory damages and $69 million in punitive damages, down from $55 million and $2 billion, respectively. The plaintiffs still have to formally accept the reduced awards. Brent Wisner, a lawyer for the Pilliods, in a statement on Friday welcomed the decision. “While we believe the reduction in damages does not fairly capture the pain and suffering experienced by Alva and Alberta, the overall result is a big win,” Wisner said. Bayer said in a statement on Thursday that Smith’s decision to slash the award was a step in the right direction, but added it would file an appeal.
As cancer haunts North Carolina communities, residents struggle to find answers - Summer Heath was home from college in the summer of 2013 when she told her mom about her headaches and blackouts, about how she’d been turning her head more and more to see so she could apply mascara on her right lashes. She didn’t realize it was because her vision in that eye had all but disappeared. “When they checked her vision, she couldn’t see the ‘big E,’” Slusarick said. “I knew it was a tumor.” Within days, doctors confirmed it was ocular, or uveal, melanoma — cancer in the eye. Ocular melanoma is only diagnosed in 2,500 people each year across the U.S. About half of cases end up metastasized, and then the chance of survival is low. It’s a disease typically found in middle-aged men. Heath was 19. She was whisked to Philadelphia, where she was treated with radiation to neutralize the tumor. And then, the tech told Heath something she didn’t expect. He had recently seen two other girls from her high school: Kenan Koll (née Colbert) and Merideth Legg. They had graduated from Hopewell High School ahead of Heath and were diagnosed with the same cancer in 2009. Their families thought it was a fluke until they connected with Slusarick online. Soon, more people came out of the woodwork: a young woman who lived in a subdivision next to the school. Another who lived just down the road. There were 15 cases analyzed by the time Huntersville officials attempted to investigate possible causes in 2015. As North Carolina and other states take action to shut down and clean up coal plants, suspicions have swarmed that historic pollution beneath Huntersville and neighboring towns could be related to energy development. But pinpointing a cause of disease, and who might be responsible, is difficult. Their search has left a trail of fragmented data points and unexplained diagnoses throughout the region.
Air pollution may have killed 30,000 people in a single year, study says More than 30,000 deaths in the United States in a single year may have been caused by air pollution, according to a study published Tuesday. Those deaths came even as almost every county in the United States remained within federal air quality standards. That suggests more stringent regulations are needed to protect human health, researchers say. "I think the big conclusion is that lowering the limits of air pollution could delay in the US, all together, tens of thousands of deaths each year," said Majid Ezzati, the study's lead author and a professor of global environmental health at Imperial College London. The research, published today in the journal PLOS Medicine, estimated the deaths for 2015, the most recent year for which data was available. Researchers analyzed air quality trends from that year back to 1999 at over 750 monitoring stations across the continental United States. They looked specifically at particulate matter -- small, inhalable particles in the air that can enter the bloodstream. The study compared that air quality data with publicly available information on deaths, looking for connections between pollution and cardiorespiratory diseases, which are thought to be triggered or worsened by particle-dense air. While particulate matter has decreased over the past two decades, researchers still linked the pollution that remained to deaths across the country. The team also controlled for a variety of factors -- including age, education, poverty and smoking rates -- that could have explained why areas with more pollution saw worse health. "Doing everything that you can reasonably do to rule out other explanations, you still ended up with a few tens of thousands of deaths," said Ezzati.
‘Toxic Stew’ Stirred Up by Disasters Poses Long-Term Danger, New Findings Show - — New research shows that the extreme weather and fires of recent years, similar to the flooding that has struck Louisiana and the Midwest, may be making Americans sick in ways researchers are only beginning to understand.By knocking chemicals loose from soil, homes, industrial-waste sites or other sources, and spreading them into the air, water and ground, disasters like these — often intensified by climate change — appear to be exposing people to an array of physical ailments including respiratory disease and cancer.“We are sitting on a pile of toxic poison,” said Naresh Kumar, a professor of environmental health at the University of Miami, referring to the decades’ worth of chemicals present in the environment. “Whenever we have these natural disasters, they are stirred. And through this stirring process, we get more exposure to these chemicals.”Dr. Kumar’s research has focused on the spread of PCBs, a suspected carcinogen, in Puerto Rico in the aftermath of Hurricane Maria in 2017. He led a team of researchers in Guánica, a bayside town with historically high concentrations of PCBs, and found that levels had tripled since Maria, to 450 parts per million. Worse, it wasn’t just the soil showing elevated PCBs. It was the people, too. The researchers tested 50 residents in Guánica and found levels two to three times greater than the national average. Dr. Kumar’s hypothesis is that the PCBs from old industrial sites were pushed into or around the bay, and people ate contaminated fish or breathed contaminated air. Other research examined Hurricane Harvey in Houston, and the wildfires in Northern California, looking at the contaminants dislodged during those disasters and the health effects of those contaminants, which can include sewage, asbestos, heavy metals and others. The issue is a global concern as well. Last year, the World Health Organization issued a report warning about the public-health effects of chemical releases caused by natural disasters, citing examples in Europe, Latin America and Asia. The toxic substances displaced during disasters “are much more long-lasting and ubiquitous than I think people realize,” “And we clearly haven’t caught up in terms of our laws and regulations, and the process of disaster response.”
Sri Lankans demand UK take back rotting waste - BBC -- Sri Lankans are up in arms over the alleged dumping of hazardous waste from Britain, including syringes and suspected human remains from mortuaries. The government has urged Britain to immediately take back more than 100 containers sent to the island nation that contained the putrid waste mixed up amid mattresses, clothes and plastics. Many of the containers are believed to have arrived from the UK as far back as 2017. According to reports they were only inspected last week after port officials complained that 111 containers abandoned by an importer were emitting a horrible smell. "Some of the materials have been liquidised and deteriorated to the point that we cannot even examine them and the waste is emitting a bad odour," Customs Department spokesman Sunil Jayaratne told Sri Lanka's Daily Mirror newspaper. Authorities said on Tuesday that they had taken "immediate action to order the re-export of the 111 containers abandoned at the port". But on Wednesday, the UK's Environment Agency told the BBC that while it was investigating what had happened, it was yet to receive any formal request from Sri Lankan authorities to repatriate the waste. This is just the latest case of an Asian country angered by the dumping of waste by Western nations disguised as recycling. China's decision in January 2018 to no longer accept foreign plastic waste for recycling has upended the global industry and led to a surge in exports to other developing countries. In May, the Philippines sent 69 containers of refuse back to Canada that it said had been falsely labelled as plastic recycling.
Flesh-eating ‘Obama worm’ invading Europe through Spain, threatens local ecosystem — A 7cm-long flatworm with hundreds of eyes along the length of its body has been accidentally imported from South America and is now threatening soil quality and local wildlife in Spain, with possibly more drastic consequences. The Obama flatworm (Obama nungara) has been spotted thriving in the rice paddies of the Parc Natural de L’Albufera in Valencia. Conservationist group SEO/Birdlife raised the alarm earlier this week. While this predatory species feasts on earthworms and land snails, it has no known natural predators itself, because it tastes so foul that birds refuse to eat it after one bite. Researchers believe it came to Spain in exotic pot plants imported from Brazil. The parasite, which is named after the Brazilian Tupi words for leaf (oba) and animal (ma) rather than the former US president, threatens to decimate the native earthworm population and, in doing so, disrupt the health and fertility of local soil, which will spark a domino effect for the entire regional food chain. In addition, the decreased soil stability would increase the risk of both flooding and landslides, as well as diminishing crop production. The Obama worm is one of at least six invasive species of Latin American origin that have been detected in Spain, while other European nations have experienced similar invasions in recent years.
Giant ticks which hunt their prey confirmed in the Netherlands - The giant tick found in Drenthe last week has been confirmed as a Hyalomma marginatum, a species originating in tropical climates and previously confined to southern parts of Europe. The ticks, thought to be brought in by migrating birds, have striped legs and their body is almost twice the length of ticks normally found in the Netherlands. This can grow to around two centimetres when they are engorged with blood. Unlike common ticks, the giant tick actively hunts its prey and can identify targets up to nine metres away. They have also been observed follow their target for ten minutes or more, walking or running a distance of up to 100 metres, according to the European centre for disease prevention and control. The ticks are known to carry several diseases, including Crimean-Congo Hemorrhagic Fever but this tick was not a carrier, the public health institute RIVM said. The tick was, however, carrying bacteria which can cause Spotted Fever (Rickettsia aeschlimannii), which is rare but easily treated by antibiotics. Spotted Fever was also found in ticks in Austria last year. The Drenthe tick is the second Hyalomma to be found in the Netherlands. One was identified in eastern Gelderland in early July. Examples of the ticks have been found in several other northern European countries including Germany, where it is thought to have overwintered, and Sweden. Most have been found in livestock, primarily horses.
Japan Approves First Human-Animal Embryo Experiments - A Japanese stem-cell scientist is the first to receive government support to create animal embryos that contain human cells and transplant them into surrogate animals since a ban on the practice was overturned earlier this year.Hiromitsu Nakauchi, who leads teams at the University of Tokyo and Stanford University in California, plans to grow human cells in mouse and rat embryos and then transplant those embryos into surrogate animals. Nakauchi's ultimate goal is to produce animals with organs made of human cells that can, eventually, be transplanted into people.Until March, Japan explicitly forbid the growth of animal embryos containing human cells beyond 14 days or the transplant of such embryos into a surrogate uterus. That month Japan’s education and science ministry issued new guidelines allowing the creation of human-animal embryos that can be transplanted into surrogate animals and brought to term.Human–animal hybrid embryos have been made in countries such as the United States, but never brought to term. Although the country allows this kind of research, the National Institutes of Health has had a moratorium on funding such work since 2015. Nakauchi’s experiments are the first to be approved under Japan’s new rules, by a committee of experts in the science ministry. Final approval from the ministry is expected next month.
Songbirds are being snatched from Miami’s forests -- Even as three armed officers closed in on the small wooden cage, its occupant sang out. The call was that of a young male indigo bunting, high-pitched and simple. The bird was too young to have perfected more complex tunes, but he sang with gusto. In the wild, indigo buntings and many other songbirds traverse huge distances during their spring and fall migrations, taking wing from breeding grounds in southern Canada to wintering areas in South America, often stopping to rest in Florida. Flying mainly at night, they navigate by the stars, and as they go, the young males learn some of their songs from older ones voyaging with them. But this young bunting, its passage cut short by a trapper in Florida, had ended up with Enamorado in his Miami neighborhood. The bird’s tan and iridescent-blue face was scarred from where a trap’s wire bars had cut into him as he struggled to regain his freedom.That shouldn’t have happened. Buntings and other migratory songbirds are protected under the Migratory Bird Treaty Act, a century-old United States law that makes it illegal to capture, kill, or possess any of these birds. Violators are subject to fines and possible imprisonment for up to six months, and if they sell or smuggle the birds, to possible felony charges that may result in more extensive jail time.Yet the U.S. Fish and Wildlife Service reports that 40 protected bird species in Florida are routinely trapped, mostly songbirds but also owls and hawks. According to Rene Taboas—an undercover officer who heads the Florida Fish and Wildlife Conservation Commission’s songbird investigations whom we had permission to name—almost all songbird trapping in the state occurs in national parks and on state lands and private property around Miami. According to Florida law enforcement officials who track the trade, it’s done largely by people either born in Cuba, where keeping songbirds is part of the culture, or born in the U.S. of Cuban descent.
Nearly 30,000 Species Face Extinction Because of Human Activity - The statistics around threatened species are looking grim. A new report by the International Union for Conservation of Nature (IUCN) has added more than 9,000 new additions to its Red List of threatened species, pushing the total number of species on the list to more than 105,000 for the first time, according tothe Guardian. The IUCN last published its definitive assessment of the status of species in December. Since then, it has found many species have gotten worse and not a single one has improved. The analysis found that 27 percent of the list, or 28,338 different species, are at risk of extinction. The IUCN organizes this group into three different categories, Critically Endangered, Endangered, or Vulnerable. To make matters worse, an additional 6,435 species fall into the near-threatened category. "Things are not getting better, they are getting worse," said Craig Hilton-Taylor, head of the IUCN Red Listunit, in an interview with TIME. The extent of the problem is global. It runs the gamut from the depths of the oceans to the peaks of mountains. Man-made destruction is the primary driver of declining plant and animal species. The red-capped mangabey, a monkey previously listed as vulnerable moved to endangered since it is hunted for bush meatand its habitat is being destroyed, according to Mongabay. Similarly, habitat loss and the pet trade moved the pancake tortoise in East Africa from vulnerable to critically endangered. In Japan, nearly half of its native freshwater fish are being pushed towards extinction as well as nearly a third of freshwater fish in Mexico.
Australia Designates Animal Rights Activists 'Domestic Terrorists' After Vigilante Farm Invasion - Australia's south-eastern state government has declared Animal rights activists 'domestic terrorists' after several trespassing incidents, according to the Independent. The New South Wales (NSW) government has introduced on-the-spot trespassing charges of $1,000 (£565) for each “vigilante” caught illegally entering private farmland.The new rules, which come into force on 1 August, could also see individuals charged up to $220,000 (£124,000) and corporations up to $440,000 (£248,000) for any major violations of the Biosecurity Act. -Independent"Vigilantes who are entering our farmers’ property illegally are nothing short of domestic terrorists," said NSW deputy premier John Barilaro. "Our farmers have had a gutful. They don’t deserve, nor have time, to be dealing with illegal trespass and vile harassment from a bunch of virtue-signalling thugs." According to the report, "Earlier this year clashes between farm owners and protesters forced the police to step in Western Australia, and the owners of a small goat farm in Victoria blamed closure on continual harassment by abusive “vegan activists”." Jail time is also under consideration as additional punishment. "Today the government is putting these vigilantes and thugs on notice," NWS agriculture minister Adam Marshall told Australia's ABC News. "This is just the first part of a broader package of reforms the government is working on, and jail time will be included in further legislation we are looking at." Marshall added that the new rules are "the toughest laws anywhere in Australia for people that illegally trespass onto farmers’ properties." Meanwhile, activist group Aussie Farms says that the new rules under the "smokescreen" of biosecurity go too far. Per executive director Chris Delforce, "Once again, the issue of biosecurity is being used as an excuse to attempt to limit consumer awareness of the systemic cruelty occurring in farms and slaughterhouses across the country."
Germany's forests on the verge of collapse, experts report - Germany’s parched forests are nearing ecological collapse, foresters and researchers warn. More than 1 million established trees have died since 2018 as a result of drought, winter storms and bark beetle plagues. Germany's forests are undoubtedly suffering as a result of climate change, with millions of seedlings planted in the hope of diversifying and restoring forests dying, warns Ulrich Dohle, chairman of the 10,000-member Bunds Deutscher Forstleute (BDF) forestry trade union. "It's a catastrophe. German forests are close to collapsing," Dohle added in an interview with t-online, a online news portal of Germany's Ströer media group. Low rainfall last summer saw Germany's rivers reach extreme lows, with some waterways still struggling and forests prone to fire. "These are no longer single unusual weather events. That is climate change," said Dohle. Helge Bruelheide, co-director of Germany's Center for Integrative Biodiversity, warned: "if the trend prevails and the annual precipitation sinks below 400 millimeters (15.7 inches) then there will be areas in Germany that will no longer be forestable." Lüdenscheid, a densely forested area in central Germany, was no exception, Bohle added. Its precipitation had slumped from one-meter (39 inches) in 2017 to only 483 millimeters last year. Catchments in central Europe collected only 10% more rainfall in the first half of 2019, compared to the same period in 2018, a trend exacerbated by uneven wet-then-dry months, Germany's Institute of Hydrology (BFG) reported Thursday.
Amazon Deforestation Rate Hits 3 Football Fields Per Minute, Data Confirms - The Amazon rainforest in Brazil is being clear cut so rapidly — a rate of three football fields per minute — that it is approaching a "tipping point" from which it will not recover, according to the Guardian. As trees are lost, researchers said there is a risk that large areas could transition from rainforest to savannah as they lose the ability to make their own rainfall from evaporation and from plants giving off water vapor, according to Newsweek. A transition on that scale could have significant implications for global warming since the rainforest absorbs vast amounts of atmospheric carbon. Recent research has shown the potential for massive tree plantings to remove excess carbon from the atmosphere. "It's very important to keep repeating these concerns. There are a number of tipping points which are not far away," said Philip Fearnside, a professor at Brazil's National Institute of Amazonian Research, as the Guardian reported. "We can't see exactly where they are, but we know they are very close. It means we have to do things right away. Unfortunately that is not what is happening. There are people denying we even have a problem." The alarming rate of deforestation and its acceleration confirms suspicions that new president Jair Bolsonarohas allowed illegal land invasion, logging and burning. Bolsonaro has called his own government's satellite data lies. The president's comments followed preliminary satellite data that showed more than 400 square miles of the rainforest had been cleared in the first half of July — an increase of 68 percent from the entire month of July last year, according to the BBC. Bolsonaro, the far right politician who has said he is fulfilling a mission from God, dismissed concerns expressed by European Union members and called it hypocritical since so many European forests have been wiped out."You have to understand that the Amazon is Brazil's, not yours," Bolsonaro said, as the Guardian reported. "If all this devastation you accuse us of doing was done in the past the Amazon would have stopped existing, it would be a big desert."
Brazil's Bolsonaro restricts drugs policy council, legalizes agritoxins - President Jair Bolsonaro wants tighter control of government data on deforestation. He spoke just days after accusing Brazil's space agency, the INPE, of falsifying data. Data released by the INPE in July data shows deforestation accelerating — raising concerns as officials negotiate an EU trade deal. Bolsonaro said his Cabinet should review data before the INPE releases it. The president came out swinging at regulators Monday. His Agriculture Ministry authorized 51 pesticides and herbicides, bringing the number of agritoxins permitted to 290 in the just over half a year of his government so far. Seven of the pesticides authorized on Monday contain an ingredient that researchers believe is contributing to the global die-off of bees. The Agriculture Ministry reports that deregulating agritoxins offers business "more-efficient alternatives of control and with less impact on the environment and human health." Bolsonaro stripped a council that helps set drug policies of almost all of its nongovernmental members, indicating he hopes to stifle dissent. He said he wished to eliminate all councils, which mix appointees, experts and representatives of civil society created to help formulate policy.
US cities are losing 36 million trees a year. Here’s why it matters and how you can stop it - Trees can lower summer daytime temperatures by as much as 10 degrees Fahrenheit, according to a recent study.But tree cover in US cities is shrinking. A study published last year by the US Forest Service found that we lost 36 million trees annually from urban and rural communities over a five-year period. That's a 1% drop from 2009 to 2014.If we continue on this path, "cities will become warmer, more polluted and generally more unhealthy for inhabitants," said David Nowak, a senior US Forest Service scientist and co-author of the study. Nowak says there are many reasons our tree canopy is declining, including hurricanes, tornadoes, fires, insects and disease. But the one reason for tree loss that humans can control is sensible development. "We see the tree cover being swapped out for impervious cover, which means when we look at the photographs, what was there is now replaced with a parking lot or a building," Nowak said. More than 80% of the US population lives in urban areas, and most Americans live in forested regions along the East and West coasts, Nowak says. "Every time we put a road down, we put a building and we cut a tree or add a tree, it not only affects that site, it affects the region." The study placed a value on tree loss based on trees' role in air pollution removal and energy conservation. The lost value amounted to $96 million a year.
Wildfires above the Arctic Circle in Greenland and Alaska - Wildfire activity is moving north. Of the 26 new fires reported over the past two days in Alaska, ten were above the Arctic Circle. Isolated thunderstorms are expected in the central and eastern interior today, Tuesday, with high temperatures reaching the low 80s in the Yukon Flats area. Fifteen new fires were reported across Alaska Monday. Twenty-three fires are actively burning in the Tanana Zone today, with a total of 30 fires reported this year. In addition to the fires in Alaska, on July 10 a satellite detected heat signatures in Greenland that were consistent with those seen at wildland fires. And another satellite photographed what appears to be smoke. (pictures)
Satellite Images Show Vast Swaths of Arctic on Fire - Vast stretches of Earth’s northern latitudes are on fire right now. Hot weather has engulfed a huge portion of the Arctic, from Alaska to Greenland to Siberia. That’s helped create conditions ripe for wildfires, including some truly massive ones burning in remote parts of the region that are being seen by satellites. Pierre Markuse, a satellite imagery processing guru, has documented some of the blazes attacking the forests and peatlands of the Arctic. The imagery reveals the delicate landscapes with braided rivers, towering mountains, and vast swaths of forest, all under a thick blanket of smoke. In Alaska, those images show some of the damage wrought by wildfires that have burned more than 1.6 million acres of land this year. Huge fires have sent smoke streaming cities earlier this month, riding on the back of Anchorage’sfirst 90 degree day ever recorded. The image below show some of the more remote fires in Alaska as well as the Swan Lake Fire, which was responsible for the smoke swallowing Anchorage in late June and earlier this month. Intense hot conditions have also fanned flames in Siberia. The remote nature of many of the fires there means they’re burning out of control, often, through swaths of peatland that’s normally frozen or soggy. But as Thomas Smith, a fire expert at London School of Economics, noted on Twitter, there are ample signs the peat dried out due to the heat and is ablaze. That’s worrisome since peat is rich in carbon, and fires can release it into the atmosphere as carbon dioxide. Peat fires can also burn underground into the winter and reignite in spring. The images below show fires in Batagay in central Siberia and the region’s Lena River.
'Unprecedented' Wildfires in Arctic Have Scientists Concerned --So many wildfires are burning in the Arctic, they're visible from space, new images from NASA's Earth Observatory show. The satellite images reveal huge plumes of smoke wafting across uninhabited lands in Siberia, Greenland and Alaska, as CNN reported.Summer fires are common in the Arctic, but not at this scale."I think it's fair to say July Arctic Circle #wildfires are now at unprecedented levels," said Mark Parrington, a senior scientist at Europe's Copernicus Atmosphere Monitoring Service, on Twitter earlier this week. Copernicus' scientists have been tracking more than 100 wildfires raging above the Arctic Circle since the start of June, which was the hottest June on record. July is on pace to break records too as Europe bakes under another heat wave this week."The magnitude is unprecedented in the 16-year satellite record," said Thomas Smith, an assistant professor in environmental geography at the London School of Economics, to USA Today. "The fires appear to be further north than usual, and some appear to have ignited peat soils."Peat fires burn deeper in the ground and can last for weeks or even months instead of a few hours or days like most forest fires, according to the UPI. So far, the Arctic's fires have released approximately 100 megatons, 100 million metric tons, of CO2 between June 1 and July 21, which Parrington said on Twitter "is getting close to 2017 fossil fuel CO2 emissions of Belgium" for the entire year, as USA Today reported. "These are some of the biggest fires on the planet, with a few appearing to be larger than 100,000 hectares (380 square miles)," he told USA Today. "The amount of CO2 (carbon dioxide) emitted from Arctic Circle fires in June 2019 is larger than all of the CO2 released from Arctic Circle fires in the same month from 2010 through to 2018 put together."
Twenty injured as 1,800 firefighters battle huge wildfires in Portugal with terrified residents forced to flee their homes (photo essay & video) About 1,800 firefighters were struggling to contain wildfires in central Portugal that have already injured 20 people, including eight firefighters, authorities said today. The fires broke out on Saturday across three fronts in the district of Castelo Branco, 125 miles northeast of Lisbon, Portugal's Civil Protection Agency said. Firefighters were being supported by 19 firefighting aircraft and hundreds of vehicles. It is the first major bout of wildfires in Portugal this year. In a statement released on Sunday afternoon, police said a 55-year-old man was detained on suspicion of starting a blaze in the district of Castelo Branco, where the wildfires started before spreading to nearby Santarem.'The suspect's actions put people's lives, houses and the forest at risk,' the police said, without explicitly saying the arrested man was responsible for the ongoing wildfire.Internal administration minister Eduardo Cabrita said police had opened an investigation into the fires, adding that local authorities considered it unusual that all the blazes had started in a narrow time frame between 2.30pm and 3.30pm local time on Saturday in the same area.
Europe's Most Important River Risks a Repeat of Historic Shutdown - The bustling boat traffic on Europe’s Rhine river ground to a halt for the first time in living memory last year, as shrinking alpine glaciers and severe drought made the key transport artery impassable. Those historic conditions could be repeated in a few weeks. With little rainfall recently, water levels at Kaub — a critical chokepoint near Frankfurt — dropped to about 150 centimeters (59 inches), half the depth from just a month ago. Movements of the heaviest barges are already restricted, and all river cargo could again cease if the level falls below 50 centimeters. With Rhine traffic at risk of a back-to-back halt, the effects of climate change have become increasingly tangible in the region. Wildfires in Sweden, violent storms in the Mediterranean and German concerns aboutmotorways buckling in June’s record-breaking heat have heightened attention on the environment. “Extreme weather events are becoming more common,” Chancellor Angela Merkel said this month in a weekly podcast. “We must do more” to protect the planet. The Rhine is critical to commerce in the region. Europe’s most important waterway snakes 800 miles through industrial zones in Switzerland, Germany and the Netherlands before emptying into the North Sea at the busy Rotterdam port. It’s a key conduit for raw materials and goods from coal and iron ore to chemicals, fertilizers and car parts. Last year’s disruption contributed to a contraction in the German economy. “It is painful when we have these periods of low water,” the country’s Transport Minister Andreas Scheuer said at a June gathering of experts to discuss options to keep Rhine traffic flowing. “It’s damaging to the German economy and has implications for our standard of living.”
U.S. Soldiers Falling Ill, Dying in the Heat as Climate Warms - In 2008, 1,766 cases of heat stroke or heat exhaustion were diagnosed among active-duty service members, according to military data. By 2018, that figure had climbed to 2,792, an increase of almost 60 percent over the decade. All branches of the military saw a rise in heat-related illnesses, but the problem was most pronounced in the Marine Corps, which saw the rate of heat strokes more than double from 2008 to 2018, according to military data. The troops who died of heat exposure are among the most extreme examples of how a warming world poses a threat to military personnel, both at home and abroad. The rising heat exacerbates challenges the military is facing in some of the world's most destabilized regions and endangers individual service members — and, by extension, U.S. security and preparedness, the Pentagon concluded in recent studies on climate change risks. Health impacts from heat have already cost the military as much as nearly $1 billion from 2008 to 2018 in lost work, retraining and medical care. The warming of the planet "will affect the Department of Defense's ability to defend the nation and poses immediate risks to U.S. national security," a recent Department of Defense report said. The investigation found that despite acknowledging the risks of climate change, the military continues to wrestle with finding a sustainable, comprehensive strategy for how to train in sweltering conditions. The military's investigative reports, often heavily redacted, show evidence of disregard for heat safety rules that led to the deaths of service members. The reports document a poor level of awareness of the dangers of heat illness and the decisions of commanders who pushed troops beyond prudent limits in extremely hot conditions. One challenge in getting commanders to treat the heat threat as an urgent priority is that global warming is an increasingly taboo topic in the military under President Donald Trump, who has called climate change a hoax. In testimony before Congress, generals and admirals continue to flag climate change broadly as a threat to national security. But Trump's stance makes it difficult for leaders at some levels to frame the heat problem as an urgent climate change threat, according to interviews with retired officers, defense academics and current military personnel. "No one is going to talk about climate change because of the political aspect and who is in the White House," a military official, who asked to remain anonymous, said. "It's a career killer to talk about something in opposition to that of the administration."
It’s So Hot That Pigs Are Getting Skinnier, Boosting U.S. Prices --How hot is it? It’s so hot that pigs are losing weight. America has had a fat pig problem in recent months, with a hefty hog herd sending pork prices tumbling. But as the U.S. bakes under scorching heat, the animals are sweating off the pounds. Hog producers aggressively sold animals in June to try and work through burdensome supplies. That sent cash prices tumbling. But it appears the strategy worked and now the average weight of pigs sent to slaughter is falling, signaling that the marketers successfully offloaded their too-numerous winter and spring hogs and now have a more slender summer lot to sell. As a result, prices are rebounding.“With hog weights more under control and hot summer weather in the forecast, producers are no longer desperate to try to move hogs,” a reportfrom Steiner Consulting Group on Wednesday said. National spot prices for hogs averaged 80.88 cents a pound on Wednesday, according to the latest government data. That’s 22% higher than a year earlier.
UCS Extreme Heat Report: A Call to Action on Midwest Clean Energy - Union of Concerned Scientists - Excessively hot weather spread across the Great Plains and Midwest states last week. On Friday, Chicago faced heat indexes well above 110 degrees, and many other areas endured dangerous heat warnings and advisories. According to a sobering new report issued earlier this week by the Union of Concerned Scientists, the heat impacts of climate change will bring increasingly frequent extreme heat events such as these if we don’t take aggressive action to mitigate global warming pollution. The report, Killer Heat in the United States: Climate Choices and the Future of Dangerously Hot Days, is scary news—but it’s also a call to action. The U.S. Midwest region (Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Ohio, and Wisconsin), which has historically seen an average of 6 days with a heat index over 100°F, is projected to see an average of 53 days per year with a heat index over 100°F. The region will also see 38 days per year with a heat index above 105°F and seven “off-the-charts” days per year by the end of the century. For Illinois specifically, there have historically been 34 days per year on average with a heat index above 90°F. This would increase to 80 days per year on average by midcentury and 107 days by century’s end. The state has historically had 7 days per year on average with a heat index above 100°F, but this would increase to 43 days per year on average by midcentury and 69 by the century’s end. And instead of having an average of two days per year with a heat index above 105°F, Illinois would see such extreme heat events 26 days per year on average by midcentury and 51 days a year by the century’s end.
‘This is unprecedented’: Alert, Nunavut, is warmer than Victoria - Weather watchers are focused on the world's most northerly community, which is in the middle of a record-breaking heat wave. "It's really quite spectacular," said David Phillips, Environment Canada's chief climatologist. "This is unprecedented." The weather agency confirmed that Canadian Forces Station Alert hit a record of 21 C on Sunday. On Monday, the military listening post on the top of Ellesmere Island had reached 20 C by noon and inched slightly higher later in the day. Alert was warmer both days than Victoria, B.C., a Canadian go-to for balmy climes. The average July high for Alert is 7 C. Phillips said that means the heat wave at the top of the world is the equivalent of Toronto registering a daytime high of 42 C. Phillips said it's the latest anomaly in what's been a long, hot summer across the Arctic. Iqaluit saw the mercury rise to 23.5 C on July 9, Nunavut Day — the highest ever for that day. Alaska had its second-warmest June on record. Records have been falling — not by fractions, but by large margins. "That's what we're seeing more often," Phillips said. "It's not just half a degree or a 10th of a millimetre. It's like hitting a ball out of the ballpark. It is so different than what the previous record was." "Our models for the rest of the summer are saying, 'Get used to it."' In Alert's case, the source of the Arctic beach weather is a large current of air that somehow found its way north from the U.S. southeast, Phillips said. It could be related to changes in the jet stream, a fast-moving, high-altitude river of air that moves west to east. That current has slowed in recent years and has become more unstable, sometimes looping much farther north or south than normal. Many scientists believe the changes are at least partly the result of melting sea ice. "It's almost as if you're seeing these extremes more often because of the jet stream that has a different look and a different pattern," Phillips said. "That's what we saw when we had those 20-degree temperatures in Iqaluit."
Climate crisis blamed as temperature records broken in three nations - Belgium, Germany and the Netherlands have recorded their highest ever temperatures as the second extreme heatwave in as many months to be linked by scientists to the climate emergency grips the continent.The Dutch meteorological service, KNMI, said the temperature reached 39.2C(102.5F) at the Gilze-Rijen airbase near Breda on Wednesday afternoon, exceeding the previous high of 38.6C set in August 1944.In Belgium, the temperature in Kleine-Brogel hit 38.9C on Wednesday afternoon, fractionally higher than the previous record of 38.8C set in June 1947, and then subsequently rose to 39.9C. Forecasters said temperatures could climb further on Thursday.Germany’s national weather service, DWD, said it believed a new all-time national high of 40.5C – 0.2C higher than the record – had been set in the town of Geilenkirchen near the Dutch and Belgian borders, but had still to confirm it. “The most extreme heat will build from central and northern France into Belgium, the Netherlands and far western Germany into Thursday,” said Eric Leister of the forecasting group AccuWeather. After several cities in France broke previous temperature records on Tuesday, including Bordeaux, which hit 41.2C, the national weather service, Météo France, said Paris was likely to beat its all-time high of 40.4C, set in July 1947, with 42C on Thursday. City records in Amsterdam and Brussels are also expected to fall. Cities are particularly vulnerable in heatwaves because of a phenomenon known as theurban heat island effect, in which concrete buildings and asphalt roads absorb heat during the day and emit it again at night, preventing the city from cooling.
Second Major Heat Wave This Summer Smashes Records Across Europe - Europe's second extreme heat wave of the summer has lived up to predictions, smashing records across the continent. Paris recorded its all-time highest temperature of 42.6 degrees Celsius, BBC News reported. Belgium, Germany, and the Netherlands all endured record highs on Wednesday only to see them broken again on Thursday, AccuWeather reported. Thursday's all-time highs measured 41.8 for Belgium, 42.6 for Germany and 40.7 for the Netherlands, the first time the country heated to 40 degrees or more. The UK, meanwhile, experienced its hottest ever July temperature of 38.1 degrees Celsius, BBC News reported. This is only the second time that the UK has experienced a temperature above 100 degrees Fahrenheit, the UK's Met Office tweeted. The heat has proven potentially deadly, as five deaths recorded in France may have been linked to the heat. It also interfered with transportation. Trains in Britain ran at reduced speeds to keep rails from buckling, and a Eurostar traveling from Belgium to London actually broke down Wednesday, forcing passengers to wait in the heat for three hours."Everything was suddenly down: no air-conditioning, no electricity," passenger Paul De Grauwe said, as The New York Times reported. "I have never been so hot in my life." The high Paris temperatures also threatened Notre-Dame cathedral, which was damaged in a fire in April. "I am very worried about the heat wave because, as you know, the cathedral suffered from the fire, the beams coming down, but also the shock from the water from the firefighters. The masonry is saturated with water," Chief Architect Philippe Villeneuve told Reuters, as AccuWeather reported. The Met Office noted that heat waves in Europe have gotten both more likely and more extreme because of the climate crisis, BBC News reported. "What we have at the moment is this very warm stream of air, coming up from northern Africa, bringing with it unusually warm weather," the Met Office's Dr. Peter Stott told BBC 5Live. "But without climate change we wouldn't have hit the peaks that we're hitting right now."
New Study Predicts Millions of Americans May Become Exposed to “Off the Charts” Heat - (video & transcript) This Real News Network story, keying off the astonishing heat wave now underway in Europe (108 degrees in Paris which has pretty much no air conditioning in residential buildings), highlights the driving factors and how they are expected to play out in the US in coming decades. This summer, the climate news cycle has been dominated by two searing heat waves that have afflicted Western Europe. In one European city after another, the record for the all-time high temperature has been broken. Just today, July 25th, the record for the highest temperature in Paris, France was broken again. In the slight, the temperature soared today to a remarkable 42.4 degrees Celsius, or 108.3 degrees Fahrenheit. As Western Europe has been baking in the unprecedented heat, experts from the Union of Concerned Scientists issued an alarming new report about future levels of extreme heat back in the United States. According to that report, in less than 20 years, millions of people in the United States could be exposed to dangerous “off the charts” heat conditions of 127 degrees Fahrenheit or more. For those of you who deal with Celsius, that is nearly 53 degrees. The report goes on to predict that in 60 years, over one-third of the US population could be exposed to such conditions, posing unprecedented health risks. Now here to discuss this with us is Michael Mann. Michael is a Distinguished Professor and Director of the Earth Science Systems Service Center at Penn State University. He’s the author of several books. Perhaps most famously in 2012, The Hockey Stick and the Climate Wars. And most recently, The Tantrum That Saved the World, a children’s book on climate change which he co-authored with Megan Herbert. Michael joins us today from State College in Pennsylvania. Thank you for coming back on The Real News, Michael.
Groundwater Running Out Is Leading to Unsustainable Practice of Digging Deeper Wells - Drill, baby, drill! It's what Americans are doing to find potable water.New research has found that Americans are digging deeper and deeper wells to meet our water demands, which is not a sustainable practice for our water supply needs, according to a study that is the first national assessment of U.S. groundwater wells.Nearly 120 million Americans rely on underground aquifers for drinking water, for irrigating nearly half of the nation's crops, and for use in manufacturing. But, we have been using up that water much faster than it can be replenished, which has America running headlong into a water crisis, as Pacific Standard reported. Nearly 1,000 of California's community water systems are at high risk of failing to provide potable drinking water. America's aging infrastructure is in desperate need of repair, including the country's drinking water systems, which the American Society of Civil Engineers gave a D rating in its 2017 report, according to theNew York Times.Water levels are dropping for large populations and farming regions, including California's fertile Central Valley and the High Plains region atop the vast Ogallala aquifer, which underlies 111.8 million acres in parts of eight states from South Dakota to Texas, as Science News reported. The Ogalla aquifer is particularly frightening — a 2017 report by the U.S. Geological Survey noted that its water levels had dropped by nearly 16 feet from 1950 to 2015.The new study, published in the journal Nature Sustainability, analyzed 65 years of well depth trends to gain new insights into the management of the critical resource. "We actually don't know that much about how much groundwater is being used and where groundwater wells are located," said Debra Perrone, an assistant professor at the University of California–Santa Barbara, and lead author on the new study, as Pacific Standard reported. "Groundwater is often referred to as an invisible resource. Groundwater wells are small, they're distributed, they're often lost among the landscape." In the end, their research focused on five mega-aquifer systems that deliver water to densely populated regions, agricultural hubs, or areas with heavy industrial activities. The data showed that across the country, groundwater users are drilling wells deeper and deeper across 70 percent of the country. But for the areas where wells haven't gotten deeper, the wells might soon run dry, according to Pacific Standard .
3 million marooned, 26 killed as Bangladesh flood worsens - With flooding turning worse in some northern and many central districts, Bangladesh Water Development Board in a special flood bulletin released Thursday afternoon said that the rivers Jamuna and Teesta just broke 40 years of water level records. ‘This is the highest level the Jamuna and the Teesta ever reached since we began keeping records of water levels of the country’s rivers four decades ago,’ said BWDB executive engineer Arifuzzaman Bhuyan. On Wednesday, the Jamuna flowed 21.12 cms and 21.29 cms above the danger level at Bahadurabad and Fulchhari, a new record, said the BWDB in its flood bulletin. The river set its previous water level record at Bahadurabad point by flowing 20.84 cms above the danger level two years ago. The water level in the River Teesta set new record flowing 53.12 cms above the danger level at Dalia point on July 12. The Jamuna however might continue to swell over the next 24 hours until 9:00am Friday, the Flood Forecasting and Warning Centre said in a bulletin Thursday afternoon. Flooding might turn worse in Bogura, Sirajganj, Tangail, Manikganj, Faridpur and Munshiganj over the next 24 hours during the same time, the FFWC said. Flood situation in Kurigram, Jamalpur and Gaibandha would remain unchanged over the same period of time, the FFWC said. Weeklong heavy rains inside Bangladesh and in Assam, Meghalaya and other parts in the upstream in India and Nepal caused all major rivers in Bangladesh to swell rapidly and abnormally since the first week of July. In 21 districts the rivers overflowed their banks or burst protection embankments swamping thousands of villages in 122 upazilas. The government disaster report said that until Wednesday 3,247,454 people were marooned by flooding in 17 districts. The rivers flowed with so much strength that it washed away or already damaged about 60,000 houses in 13 districts, according to government estimates. The government estimate was not complete yet. Still it gave a hint of the havoc flooding wreaked in the affected districts.
Humans May Be Accidentally Geoengineering the Oceans - As the saying goes, what goes up must come down—and, as it turns out, a lot of what goes up comes down into the world’s oceans. Iron particles, released by human industrial activities, are one example of a pollutant that goes into the atmosphere and eventually settles into the sea. Now, new research suggests that human-emitted iron is accumulating in the ocean in much greater quantities than scientists previously estimated. And it may also be dissolving into the water more easily than suspected.The consequences are still unclear, but they’re worth investigating, scientists say. Iron is one of the key nutrients that tiny phytoplankton organisms in the ocean need to thrive. In regions where its levels are limited, adding more iron to the water can give plankton a boost, potentially altering both marine food webs and the ocean’s carbon uptake.In fact, this phenomenon is the basis for a controversial geoengineering concept that some scientists have proposed to tackle climate change. Known as “iron fertilization,” the idea involves adding iron to certain remote regions of the ocean where iron nutrients tend to be limited. Doing so could promote the growth of phytoplankton, which naturally suck up carbon dioxide.When the phytoplankton die, those that don’t get eaten by other animals fall through the water column and become trapped at the bottom of the sea, effectively locking away the stored-up carbon for good. To date, various research groups have conducted more than a dozen small-scale iron fertilization experiments, with somewhat mixed results. Some studies suggest that the carbon-storing effects are more significant than others. At the same time, some experts have expressed concern that iron fertilization could have unforeseen consequences on marine ecosystems. Others say more research is needed.
Major U.S. cities are leaking methane at twice the rate previously believed - Natural gas, long touted as a cleaner burning alternative to coal, has a leakage problem. A new study has found that leaks of methane, the main ingredient in natural gas and itself a potent greenhouse gas, are twice as big as official tallies suggest in major cities along the U.S. eastern seaboard. The study suggests many of these fugitive leaks come from homes and businesses—and could represent a far bigger problem than leaks from the industrial extraction of the fossil fuel itself. “This is an issue that people tend to ignore when trying to estimate methane emissions,” says Kathryn McKain, an atmospheric scientist with the National Oceanic and Atmospheric Administration’s Earth System Research Laboratory in Boulder, Colorado, who wasn’t involved in the new research. When compared with the global amount of natural and human-driven methane emissions, she notes, “These emissions are small, but they’re preventable.” When burned for heat or power, methane emits less carbon dioxide (CO2) than fossil fuels such as coal. But when leaked directly into the atmosphere, its warming effect can be dozens of times stronger than CO2, depending on the time scale over which the warming is measured. The new findings come courtesy of data gathered by aircraft over six U.S. cities: Washington, D.C.; Baltimore, Maryland; Philadelphia, Pennsylvania; New York City; Providence; and Boston. In 2018, researchers flew at altitudes between 300 and 800 meters and measured concentrations of methane, ethane, CO2, and carbon monoxide, among other gases.
Eastern U.S. cities spewing more methane into air than thought - - Older U.S. east coast cities are leaking nine times as much natural gas into the air — from homes or pipes heading into houses — than the federal government had thought, a new airborne monitoring study finds. It’s probably not a safety problem because what’s coming out doesn’t reach explosive concentrations, but the extra methane heading into the air is a climate change issue, said study co-author University of Michigan atmospheric scientist Eric Kort. Scientists flew a National Oceanic and Atmospheric Administration airplane over New York City, Washington, Philadelphia, Boston, Baltimore and Providence, Rhode Island, for 1,200 hours in 2018 and found lots more methane. They couldn’t tell if the methane, a potent greenhouse gas, was leaking from inside homes or the pipes leading to homes. “You have a very leaky system,” study co-author Colm Sweeney, a NOAA atmospheric scientist, said Monday. The six cities spewed nearly 937,000 tons of methane (850,000 metric tons), which is more than twice what the U.S. Environmental Protection Agency estimates, according to the study in the journal Geophysical Research Letters. Methane comes from different places, not just natural gas, and that’s where the study found the biggest change from what the government had previously thought. The EPA’s estimates had figured much of the methane coming out of the five cities spewed from landfills and wetlands, not natural gas for home use. But the airplane monitors, which could differentiate between landfill gas and natural gas based on other chemicals that come out, found that 88% of the methane was natural gas, except in Providence. So scientists calculated that nine times as much natural gas was being released as EPA had estimated. Previous studies had looked at individual cities using different methods. This study is the first to give a comprehensive look over a large area. Methane traps about 30 times more heat than carbon dioxide, but doesn’t last nearly as long. By showing that leaks are a big issue, the study “represents a huge opportunity to get some early gains on controlling greenhouse gas emissions,” Sweeney said.
The Cost of Climate Change: Steve Keen Dismantles William Nordhaus - This piece is part of a series from Steve Keen, Climate Change and the Nobel Prize in Economics: The Age of Rebellion. From the previous post:
- William Nordhaus of The Breakthrough Institute recently won the Nobel Prize in Economics based on his work on climate change.
- Extinction Rebellion, a UK-based youth movement, is demanding policies that would cause net zero carbon emissions by 2025 and limiting global warming to no more than 1.5 degrees.
- William Nordhaus’ research encourages policy makers to manage global climate so it stabilizes at 4 degrees by the mid 22nd century.
- Nordhaus’ research also argues that limiting global warming to 1.5 degrees would cost the global economy more than 50 trillion US dollars, while yielding benefits of well under US$5 trillion.
In this post, Keen delves into DICE (“Dynamic Integrated model of Climate and the Economy”)—the mathematical model underpinning Nordhaus’ work and the flaws in Nordhaus’ methodologies. Nordhaus’s Damage Function is the first substantive graphic in the DICE manual, and one look at it (see Figure 8) should give anyone—even Climate Change Deniers (CCDs)—cause for concern. Even if Anthropogenic Global Warming were a myth, even if the temperature rise was being caused by the Sun, would it really be true that a 5 degree increase in the average temperature of the globe would only reduce global GDP by 5 percent? This is not, as is sometimes believed, the result of Nordhaus applying a high discount rate to the impact of climate change in the distant future. This instead is his estimate of how much lower global GDP would be in the future—say, 130 years from now—compared to what it would have been, if temperatures had instead remained at pre-industrial levels. Given the urgency that characterises the Global Warming debate, this is, on the face of it, an extremely benign view of the impact of an increase in the global average temperature on GDP.
Why Central Banks Need to Step Up on Global Warming --Descended from historical port cities, it is not by accident that the world’s leading financial centers—New York City, London, Singapore, Hong Kong, Shanghai—are vulnerable to flooding. But the larger challenge that climate change poses is not so much the physical as the systemic risk. What central bankers—the world’s preeminent economic decision-makers since the 1980s—are beginning to worry about is the potential for climate change to trigger financial crisis. They have been relatively late to the problem. Mark Carney—formerly of Goldman Sachs and the Canadian central bank, now governor of the Bank of England—can take credit for first raising the issue in financial circles at an after-dinner speech at Lloyd’s of London in September 2015. Two years later in Paris, leading central bankers and regulators founded the Network for Greening the Financial System (NGFS), which aims to throw the weight of key financial institutions behind the goals of the Paris climate agreement. The membership of the NGFS now includes most of the central banks of the G-20, such as the European Central Bank and the People’s Bank of China. It is telling that the only financial authority not to be involved in these initiatives is the U.S. Federal Reserve, the most powerful central bank in the global financial system. But even if it were to come aboard, the most critical question would remain whether the green agenda of the world’s central banks is adequate to the challenge of mitigating the effects of the climate crisis—and perhaps holding it within manageable bounds. The central banks have the powers to be a major part of the climate response. As of yet, their response is defensive, focusing on managing financial risks. The rest of us have no choice but to hope that they move into a more proactive mode in time.
House Democrats unveil more ‘realistic’ climate change plan (Reuters) - A group of U.S. House Democrats on Tuesday unveiled a climate change plan they said featured a “more realistic” goal to cut carbon emissions to net zero by 2050 rather than by 2030 as envisioned under the Green New Deal introduced early this year. Solar and wind companies have criticized the Green New Deal, introduced by Democratic Representative Alexandria Ocasio-Cortez and Senator Edward Markey in February, as unrealistic and politically divisive. Representatives Frank Pallone, Paul Tonko, Bobby Rush and others said on Tuesday they would draw up legislation late this year that aimed to avoid the worst effects of climate change including intense droughts, storms and floods. “Net zero” means cutting carbon dioxide and other greenhouse gas emissions 100 percent or offsetting them by as much as is emitted. “What we’re really trying to do here is come up with a united front that’s driven by the scientific community and that’s consensus,” Pallone said in introducing the plan. Pallone said lawmakers wanted to hear ideas from the Green New Deal and its supporters as they draw up legislation. “We just think that (the 2050) target is more realistic,” Pallone said. He said the goal is based on input from scientists who “say that that’s the date that if we don’t go down to net zero carbon pollution by then we have a catastrophic situation.” Several candidates seeking the Democratic presidential nomination for 2020, including Joe Biden and Beto O’Rourke, also have climate plans that seek net zero carbon emissions by 2050.
Elizabeth Warren Wants Green Bombs, not a Green New Deal - Black Agenda Report - Warren prides herself in fighting for a kinder capitalism but has no problem with a nasty, murderous imperialism. The Green New Deal has found little support among establishment Democratic Party members of Congress. House Speaker Nancy Pelosi called the comprehensive policy a “list of aspirations” that could never be considered all at once. Senate Democrats mostly abstained from the 57-0 Senate vote against the Green New Deal in March, calling the gesture a Republican “stunt.” Yet this “stunt” revealed that the corporate Democratic Party is not very interested in the Green New Deal even though it is supported by over eighty percent of voters in both political parties . In this stage of capitalism, the Democrat side of the two-party duopoly is just as enthusiastic a patron in the endless regime of austerity as its Republican counterpart. Elizabeth Warren has been receiving more attention from the Democratic Party establishment of late. Warren has attempted to make up for her woeful confrontation with Trump around her proclaimed indigenous identity by releasing a flurry of policy proposals on issues such as maternal mortality and student loan forgiveness. While Elizabeth Warren has voiced “strong support” for the Green New Deal, she recently tweeted a strange proposal that deviates from its principles. In mid-May, Warren announced that she would be introducing the Defense Climate Resiliency and Readiness Act to help the military become more “energy efficient.” As she stated on Twitter, “Climate change is real, it’s worsening by the day, and it’s undermining our military readiness. More and more, accomplishing the mission depends on our ability to continue operations in the face of floods, drought, wildfires, desertification, and extreme cold.” Elizabeth Warren believes that strengthening the “effectiveness” of the U.S. military is consistent with the Green New Deal. Her bill doesn’t demand that the U.S. military be reduced in size or scale.Nor does it mention that the U.S. military is the world’s largest polluter and user of oil and fossil fuels. Instead of turning the Green New Deal into concrete policy, Warren has placed her attention on renovating the one thousand U.S. military bases that exist domestically and abroad. The so-called “policy wonk” of the 2020 elections appears to be more concerned with creating “green” bombs than a “green economy.”
Pledging Zero Carbon Emissions by 2030 or 2050: Does it Matter? - We now have two responses to the climate emergency battling it out among House Democrats, the “aggressive” 2030 target for net zero emissions folded into the Green New Deal and a more “moderate” 2050 target for the same, just announced by a group of mainstream legislators. How significant is this difference? Does where you stand on climate policy depend on whether your policy has a 2030 or 2050 checkpoint? I say no. Neither target has any more than symbolic value, and what the government does or doesn’t do to prevent a klimapocalypse (can we use this interlingual word?) won’t depend on which one gets chosen. Endpoint targets have no constraining power at all. A 2030 target won’t be met or unmet until 2030, and by then it will be too late. Same, and worse, for a 2050 target. Moreover, the whole target idea is based on a misconception of how carbon emissions work. The CO2 we pump into the atmosphere will remain for several human generations; it accumulates, and the sum of the carbon we emit this year plus next plus the one after and so on is what will determine how much climate change we and our descendants will have to endure. (The relationship between our emissions and the earth system’s response is complex and may embody tipping points due to feedback effects.) Every additional ton of carbon counts the same, whether it occurs today or just before some arbitrary target date. As a secondary point, caveat emptor about the “net” emissions thing. Net of what? Purchased offsets like in California? (My emissions don’t count because I’ve given you money so you won’t increase yours by as much as you said you might, and I’m hoping no one else will step up and do your emissions instead.) Or investments in forests, that may or may not continue to store carbon in the decades ahead, and which may or may not cause more harvesting of other forests? A proper carbon budget isn’t net of anything; it’s an amount of fossil carbon we set aside for ourselves to burn, and that’s it.
The World’s Biggest Lawsuit: Juliana v. United States - By Lambert Strether -Juliana v. United States is a big and complicated case that has now advanced through two administrations. The original complaint was filed in September 2015; Judge Ann Aiken of Oregon district court rejected the government’s motion to dismiss the case in November 2016. At right is a timeline of the docket from E&E News which I am not going to go through, although it does show the twists and turns the plaintiffs have had to go through.The American Bar Association, in “Can Our Children Trust Us with Their Future?,” describes the scale of the case and the stakes: The 2016 ruling in Kelsey Cascadia Rose Juliana v. USA is one of the greatest recent events in our system of law. (See Opinion and Order, Case No. 6:15-cv-01517-TC, US District Court for Oregon, Eugene Division. Anne Aiken, Judge, filed 11/10/16.) A group of children between the ages of eight and nineteen filed suit against the federal government, asking the court to order the government to act on climate change, asserting harm from carbon emissions. The federal government’s motion to dismiss was denied. Although I am not involved in the case, I am a lifelong environmentalist, and I teach environmental law (to non-law students). This case is a shining example of what law can be. This case gives me hope that we will not continue to cooperate in our own destruction, and future generations will be able to rely on us to uphold the spirit of the law and purpose behind government. In an interview with the Real News Network, “Why A 20-Year Old Climate Activist is Suing the Federal Government“, Vic Barrett, one of the plaintiffs, sums up the theory of the case[2]: we’re asserting that the U.S. Federal Government has known since 1960 that climate change could be potentially disastrous. We have proof from administrations going back all the way to the Johnson administration, saying that they knew climate change could be an issue and they knew that fossil fuel infrastructure was causing it. And the U.S Federal Government still chose to take direct action to continue to perpetuate the fossil fuel industry and the U.S. fossil fuel economy that we have. And we’re asserting that by taking that direct action,they’ve disproportionately put the rights of young people at risk, and the rights of life liberty and property as promised to us in the Constitution. And so, what we’re looking for our in our case is for the court system to mandate that the legislative system and the executive system have to work together in order to come up with a plan that would draw down carbon emissions to a point that’s sustainable for human life, and do what we can to bring the global temperature down to at least one and a half degrees Celsius.
Climate protesters glue themselves to Capitol doors, confront lawmakers - More than a dozen protesters from the activist group Extinction Rebellion have glued themselves to multiple points in the U.S. Capitol to block lawmakers and protest inaction on climate change. Sixteen protesters from the anti-climate change group blocked multiple doorways in office buildings on Capitol Hill, including in the Cannon and Rayburn House office buildings. The protesters used Gorilla Glue to stick their hands to the doors of the buildings and one another as lawmakers tried to get to a vote at 6:30 p.m., Kaela Bamberger, an Extinction Rebellion organizer, confirmed to The Hill. "This is not a drill! Activists are superglued to the tunnel connecting the House to the Capitol building so that lawmakers are forced to face up to the climate crisis. Time is up -- Declare Climate Emergency NOW!" the organization's Twitter account shared. The protesters were seen wearing yellow signs that said “Closed. We’re sorry. Due to the climate emergency Congress is shut down until sufficient action is taken to address the crisis.” The organization also tweeted that it was met with "excessive police force."
Trump Campaign Is Selling PlasticStraws to ‘Make Straws Great Again’ - The campaign to re-elect President Donald Trump has found a new way to troll liberals and sea turtles. The campaign website is selling packs of 10 plastic straws for $15, Trump re-election campaign manager Brad Parscale tweeted on Thursday, as USA Today reported. "Liberal paper straws don't work. STAND WITH PRESIDENT TRUMP and buy your pack of recyclable straws today," the straws' description reads. Parscale further promoted the straws in an email Friday titled "Make Straws Great Again," NPR reported. "I'm so over paper straws, and I'm sure you are too. Much like most liberal ideas, paper straws don't work and they fall apart instantly. That's why we just launched our latest product—Official Trump Straws," Parscale wrote. "Now you can finally be free from liberal paper straws that fall apart within minutes and ruin your drink." Calls to ban plastic straws increased after a video of a turtle with a straw stuck up its nose went viral. Cities like Seattle have passed restrictions, and companies including Starbucks have vowed to phase them out. California became the first state to ban them in sit-down restaurants last September.
Judge rules against oil companies to keep climate liability case in Rhode Island - A federal judge ruled against multiple oil and gas companies Monday, deciding that Rhode Island’s novel climate liability case can be tried in the state. The ruling will allow Rhode Island prosecutors to continue to bring charges against 21 oil and gas producers including Chevron, Shell and BP as the state tries to get the companies to help pay for damages caused by climate change. In his ruling, Judge William Smith of the U.S. District Court For the District of Rhode Island remanded the case to state court. “This is, needless to say, an important suit for both sides. The question presently before the Court is where in our federal system it will be decided,” the judge wrote. “Because there is no federal jurisdiction under the various statutes and doctrines adverted to by Defendants, the Court grants the state’s motion to remand.” In his ruling Monday, the judge made clear his understanding of the links with climate change in the prosecution’s case, saying, “Climate change is expensive, and the State wants help paying for it."
Direct CO2 Capture Machines Could Use ‘a Quarter of Global Energy’ in 2100 -- Machines that suck CO2 directly from the air could cut the cost of meeting global climate goals, a new study finds, but they would need as much as a quarter of global energy supplies in 2100. The research, published Monday in Nature Communications, is the first to explore the use of direct air capture (DAC) in multiple computer models. It shows that a "massive" and energy-intensive rollout of the technology could cut the cost of limiting warming to 1.5 or 2°C above pre-industrial levels.But the study also highlights the "clear risks" of assuming that DAC will be available at scale, with global temperature goals being breached by up to 0.8°C if the technology then fails to deliver.This means policymakers should not see DAC as a "panacea" that can replace immediate efforts to cut emissions, one of the study authors tells Carbon Brief, adding: "The risks of that are too high." DAC should be seen as a "backstop for challenging abatement" where cutting emissions is too complex or too costly, says the chief executive of a startup developing the technology. He tells Carbon Brief that his firm nevertheless will "continuously push back on the 'magic bullet' headlines."
Between the Devil and the Green New Deal - From space, the Bayan Obo mine in China, where 70 percent of the world’s rare earth minerals are extracted and refined, almost looks like a painting. The paisleys of the radioactive tailings ponds, miles long, concentrate the hidden colors of the earth: mineral aquamarines and ochres of the sort a painter might employ to flatter the rulers of a dying empire. To meet the demands of the Green New Deal, which proposes to convert the US economy to zero emissions, renewable power by 2030, there will be a lot more of these mines gouged into the crust of the earth. That’s because nearly every renewable energy source depends upon non-renewable and frequently hard-to-access minerals: solar panels use indium, turbines use neodymium, batteries use lithium, and all require kilotons of steel, tin, silver, and copper. The renewable-energy supply chain is a complicated hopscotch around the periodic table and around the world. To make a high-capacity solar panel, one might need copper (atomic number 29) from Chile, indium (49) from Australia, gallium (31) from China, and selenium (34) from Germany. Many of the most efficient, direct-drive wind turbines require a couple pounds of the rare-earth metal neodymium, and there’s 140 pounds of lithium in each Tesla. Dotted with “death villages” where crops will not fruit, the region of Inner Mongolia where the Bayan Obo mine is located displays Chernobylesque cancer rates. But then again, the death villages are already here. More of them are coming if we don’t do something about climate change. What matter is a dozen death villages when half the earth may be rendered uninhabitable? What matter the gray skies over Inner Mongolia if the alternative is turning the sky an endless white with sulfuric aerosols, as last-ditch geoengineering scenarios imagine? Moralists, armchair philosophers, and lesser-evilists may try to convince you that these situations resolve into a sort of trolley-car problem: do nothing and the trolley speeds down the track toward mass death. Do something, and you switch the trolley onto a track where fewer people die, but where you are more actively responsible for their deaths. When the survival of millions or even billions hangs in the balance, as it surely does when it comes to climate change, a few dozen death villages might seem a particularly good deal, a green deal, a new deal. But climate change doesn’t resolve into a single trolley-car problem. Rather, it’s a planet-spanning tangle of switchyards, with mass death on every track.
U.S. government energy consumption continues to decline - The U.S. federal government consumed 915 trillion British thermal units (Btu) of energy during the 2017 fiscal year (FY), or 20% less than a decade before. The slight decline in FY 2017 marks the fifth consecutive decline in annual federal government consumption. Consumption by defense agencies accounted for more than 75% of total government energy consumption, according to data compiled by the Federal Energy Management Program (FEMP). Defense agency energy consumption declined 0.2% from FY 2016 to FY 2017, while civilian agency energy consumption declined 0.4% during the same period. In the past decade, defense agency energy consumption has fallen 18% (compared with FY 2007), and civilian agency energy consumption has fallen 8%. Over the years, several Executive Orders (for example, EO 13834) directed federal agencies to improve the energy and environmental performance of government buildings, vehicles, and overall operations. Most of the federal government’s energy use is for vehicles and equipment, which accounted for 568 trillion Btu, or 62% of total energy consumption, in FY 2017. The jet fuel that defense agencies use is the primary driver of government vehicle and equipment energy consumption. The 509 trillion Btu of fuel consumed by defense agencies represents 90% of total government vehicle fuel consumption. Among civilian agencies, the U.S. Postal Service (USPS) consumed the most energy in FY 2017, at 44 trillion Btu. More than half of the energy USPS consumed was for vehicle fuel. The U.S. Department of Veterans Affairs and U.S. Department of Energy ranked second and third, respectively, each consuming about 29 trillion Btu.Government expenditures for energy in FY 2017 totaled $15.6 billion. Similar to their energy consumption share, defense agencies accounted for more than 75% of government energy expenditures. Defense agency energy spending is mostly for vehicles and equipment ($8.6 billion of the $11.9 billion total), and civilian agency energy spending is mostly for buildings and other uses ($2.7 billion of the $3.7 billion total).
As electric vehicle production ramps up worldwide, a supply crunch for battery materials is looming - As car manufacturers ramp up production of electric cars, the metals used to make the vehicles’ batteries may face a supply crunch in the next few years, according to a new report. Lithium, cobalt, and nickel supplies are expected to be worst hit, the Wednesday report from energy consulting and research firm Wood Mackenzie. That’s as analysts predict a boom in electric vehicle use over the next three decades, but cite limited new metal production. For now, supplies of those three metals are enough to meet demand, according to Gavin Montgomery, research director at Wood Mackenzie. But short-term market prices of those metals have fallen, and that will deter producers from increasing supply to meet future demand, he added. In fact, in the next few years, demand for the metals is expected to grow so rapidly — as car producers make more electric vehicles — that suppliers won’t be able to keep up, Montgomery noted. Montgomery isn’t the only one predicting a future supply crunch. “It’s dawning on North America and Europe that there’s a raw materials issue that needs to be addressed here,” leading metals company CleanTeQ’s chief executive officer, Sam Riggall, told Bloomberg in early July. Furthermore, limited amounts of lithium, cobalt, and nickel exist on Earth, so there may simply not be enough to meet car manufacturers’ future demand. “Getting the quantity of nickel that (electric vehicles) will need by the mid-2020s will be a challenge ... with lead times often up to 10 years, investment needs to happen now,” said Montgomery.
4 Automakers Strike Emissions Deal With California, Steering Clear From Trump's Pro-Pollution Agenda - Four automakers from three different continents have struck a deal with California and agreed to adhere to the state's stricter emissions standards, undercutting one of the Trump administration's environmental regulatory rollbacks, according to The New York Times. The agreement between the California Air Resources Board and Ford, Honda, Volkswagen and BMW of North America followed weeks of secret negotiations. The four automakers agreed to a fleet average of 51 mpg for light-duty vehicles by the 2026 model year. That's slightly lower and longer than the fuel economy standards of 54.5 miles per gallon by 2025 set by the Obama administration in 2012. The four major automakers' agreement to legitimize California's authority to set emissions standards runs counter to a White House plan to take that right from the states, as Reuters reported.Under the Trump administration's plans to roll back the Obama-era regulations, emissions standards would top out at 37 miles per gallon. California and 13 other states stood in defiance and vowed to enforce the stricter standards, setting up an uncomfortable situation for automakers where the market would be split in two, according to The New York Times.The agreement is a win for the automakers. They will have slightly more time to deliver vehicles that will have to meet standards nearly as ambitious as the Obama administration set forth. And, it will put an end to conflicting state and federal standards."Ensuring that America's vehicles are efficient, safe and affordable is a priority for us all," the automakers said in a joint statement, as Motor1 reported. "These terms will provide our companies much-needed regulatory certainty by allowing us to meet both federal and state requirements with a single national fleet, avoiding a patchwork of regulations while continuing to ensure meaningful greenhouse gas emissions reductions." Despite the agreement, the Trump administration plans to curtail California's ability to set its own standard. It has vowed to fight all the way to the Supreme Court. By striking a deal with California, the automakers are betting California has the stronger legal case, according to The New York Times.
So You Think We're Reducing Fossil Fuels -- Think Again - If you think we’ve been doing a reasonable job of curbing fossil fuel use, you are sadly mistaken. Global energy demand grew yet again in 2018, by 2.3%, its fastest pace in ten years. 70% of that was provided by fossil fuel, and only 30% by renewables and nuclear. Until growth in renewables exceeds that of fossil fuels, and by a lot, we will make no headway against the environmental problems we need to solve in the next two decades. Renewables and fully electric vehicles aside, all fossil fuels are increasing worldwide primarily because of economic growth in the developing world. Even coal is increasing worldwide, producing more power than hydro, nuclear and renewables combined.While the developed world is switching from coal to natural gas, the developing world sees coal as their savior. This not because coal is cheapest – it’s not.Of all energy sources, coal is merely the easiest to set up. Coal is the easiest to install in a poor or developing country that has little existing infrastructure. It is the easiest to transport – by ship, rail and truck. It is straightforward to build a coal-fired power plant. And to operate it. China is taking advantage of this situation with their ‘One Belt, One Road’ project, a 21st century version of the Silk Road that plans to build over a trillion dollars of infrastructure in developing countries, making those countries major commercial partners with, and majorly dependent on, China.
Solar power advocates will rally to oppose TECO's gas conversion - Tampa Electric company wants to convert part of its Apollo Beach plant from one fossil fuel to another: from coal to methane gas. But the move is opposed by many environmental groups. They point out that renewable energy, like solar, would be cheaper and not contribute to climate disruption.In January both Tampa Electric and members of the publicspoke about the issue at a Hillsborough County Commission meeting. At that meeting TECO senior vice president Tom Hernandez said the company plans to add more solar power generation. But he said the company still needs to convert the Big Bend plant to methane gas, in part because solar doesn’t deliver energy when it’s needed most.WMNF interviewed Gonzalo Valdez, the Beyond Coal organizer for the Sierra Club. That’s one of the groups organizing a rally Friday to oppose TECO’s plan for its Big Bend power plant. “TECO is proposing about a $858 million build out of their existing gas infrastructure, expanding it by about a thousand megawatts. And, they’re planning on refurbishing some of the coal units to gas.“But they’re also telling people that they’re moving away from coal, which if you at their ten-year site plans, they actually plan on burning more coal in 2028 than they did this year. We’re not seeing any real long-term plan towards sustainability, toward reducing emissions. We’re actually seeing just a temporary build-out of their solar — increasing about 7%. And then they’re going to be increasing coal usage. They’ll be about 12% coal in 2028.”
NH Supreme Court denies Northern Pass appeal — The state’s highest court has pulled the plug on Northern Pass. Supreme Court justices ruled unanimously to deny a request by project officials to order a state committee to reopen deliberations on the proposed $1.6 billion transmission power line, according to their ruling released Friday. “The court has made it clear –- it is time to move on,” said Gov. Chris Sununu, a project supporter. “There are still many clean energy projects that lower electric rates to explore and develop for New Hampshire and the rest of New England.” The state Site Evaluation Committee unanimously rejected the Northern Pass project in February 2018 and later turned aside a request to reconsider its decision and resume deliberations. “We have reviewed the record and conclude that the subcommittee’s findings are supported by competent evidence and are not erroneous as a matter of law,” the 31-page ruling said. Northern Pass officials “have not sustained their burden on appeal to show that the subcommittee’s order was unreasonable or unlawful,” Associate Justice Anna Barbara Hantz Marconi wrote. Eversource, in a statement, said it was “deeply disappointed” with the decision. “We will closely review the Supreme Court’s decision and evaluate all potential options for moving forward. It’s clear that the need for new energy sources in New England is greater than ever, and we remain focused on innovative solutions that will lower costs for our customers, improve reliability and advance clean energy.” The 192-mile Northern Pass route would have run from Pittsburg to Deerfield through more than 30 communities, bringing hydropower from Quebec into New England.
Berkeley Approves Natural Gas Ban in New Buildings - Berkeley, California on Tuesday became the first U.S. city to approve a ban on natural gas hook-ups in all new residential buildings, a move that proponents argued is a needed step for all cities in the state if California is to meet its goal of shifting to net-zero carbon emissions from energy sources by 2045.The ban was passed into law less than a week after the city council unanimously voted in favor of it and following vocal support for the measure from the public.Washington Gov. Jay Inslee, who is running for president in the 2020 Democratic primary, and former California state controller Steve Westly were among the climate action advocates who praised the city's decision as part of a growing movement of local governments "[leading] the way in the fight to defeat climate change." Last weekend, Berkeley made an incredible leap toward an electric world by placing a city-wide ban on natural gas in new homes. This is a move many other cities should seriously consider! Natural gas is a substantial contributor to climate change. — Steve Westly (@SteveWestly) July 22, 2019 Berkeley city council member Rigel Robinson noted that the lawmakers voted on the ban just a year after the city declared a climate emergency. "Many cities would be satisfied or content to just declare a climate emergency." Robinson tweeted. "This is what acting on it looks like."
Millions without electrical power in Michigan and northeast US -- Millions of people suffered a lengthy power blackout in Michigan over the weekend, along with tens of thousands in New York City and the Washington, D.C. metro area. At its peak, more than 820,000 homes and businesses were without power in Michigan after a wave of thunderstorms swept through the state on Saturday evening. This translates into several million people with no electricity during the longest and hottest heatwave of the year, and deprived of key infrastructure such as hospitals, traffic lights and fire stations. The two major utility companies in Michigan reported maximum outages of 600,000 customers for DTE Energy, which covers most of the Detroit area, and 220,000 customers for Consumers Energy, which covers much of western and upstate Michigan. By Monday night, more than 200,000 homes were still without service from DTE alone, more than 48 hours after the blackout began. Outages are expected to last through Wednesday, with more than 1,100 DTE Energy work crews struggling to repair more than 2,600 power lines that were downed by heavy rains and powerful winds on Saturday. This includes 450 out-of-state workers and 16-hour emergency shifts as crews clear trees, broken or downed power lines and repair disabled transformers. The company has however opted not to use their 2,000 off-duty workers to aid in the recovery efforts in an effort to minimize its costs during the blackout. In the meantime, the nearly 250,000 residents still affected by the blackout have been instructed to seek cooling centers and find shade to protect themselves against temperatures that spiked above 100 degrees Fahrenheit.
Heat wave slams the grid. Here's what to know -- While nearly two-thirds of the country sweated through a crippling heat wave over the past week that's been blamed for at least six deaths, the U.S. electric grid remained largely upright even as demand for power soared. But that reliability did not come without its toll — power outages were reported in places like Long Island, N.Y., and Philadelphia, where 300 residents of a senior center were evacuated Friday as temperatures soared without electricity, according to CBS Philly. High temperatures can affect the grid, related infrastructure and electricity workers just as much as they do ratepayers at the end of transmission lines. And as a changing climate brings more intense and longer-lasting bursts of extreme temperatures, experts are warning that grid operators will need to pay as much attention to how heat affects the grid as it does the demand from those looking to stay cool."The electrical grid handles virtually the entire cooling load, while the heating load is distributed among electricity, natural gas, heating oil, passive solar, and biofuel," Utilities around the country were feeling that strain over the weekend. In New York, Consolidated Edison Inc. sent out a release urging customers to conserve energy and take measures such as blocking air conditioning vents in vacant rooms. Similarly, Commonwealth Edison in Chicago said it would deploy cooling buses and care vans to provide customers with free water and charging stations in communities that may experience prolonged power outages. The scorching temperatures also caused misery in Madison, Wis., where two fires at different substations caused a power outage for some 13,000 customers Friday during some of the most intense heat.Madison Gas and Electric Co. blamed the problem on a mechanical issue at the substation level, noting it did not think it came from increased demand from the heat, although an exact cause was not yet known."We have no reason to believe the cause of the fire is due to excessive usage from today's high temperatures," the utility said in a twitter post Friday. Nevertheless, the Midwest outage revealed the pain felt when infrastructure goes down in the middle of severe heat waves.
The number of electric utility rate cases increased in 2018 – EIA - In 2018, 89 utilities—or nearly half of all major U.S. electric utilities—tried to change electricity rates by filing rate cases with state regulatory commissions; this number was the largest number since 1983. U.S. public electric utility companies must obtain permission from their regulators before changing the rates they charge customers. Of the 89 utilities filing rate cases in 2018, 10 proposed to decrease rates, 1 negotiated a rate freeze until 2020, and the other 78 utilities proposed rate increases. Regulated electric utilities can request rate changes to help recover expenses for building, operating, and maintaining their electric generators, transmission and distribution equipment, and other buildings and equipment. In addition, utilities have the right to earn a return on their investments. The number of electric utility rate cases typically reflects changes in the costs of generating and delivering electricity. In 2018, increases in spending for electricity transmission and delivery, rather than for electric generation, drove most of the approved rate increases. Delivery expenses included investments to modernize and strengthen the electric power grid, connect to wind and solar installations, restore storm damage, manage vegetation, and install new customer information and billing systems. Increases in electric generation costs also led to rate increases in some areas. Reasons for higher spending on utility generation fleets included new or increasing environmental compliance costs, rising costs for operating and maintaining nuclear plants, and extra wind generation expenditures as production tax credits phase out. Electric utility rate case filings have not been this active since the early 1980s.
You're All Serial Killers - Outraged Californians Slam $2 Billion PG&E Rate Hikes --Representatives from Pacific Gas & Electric (PG&E) and the California Public Utilities Commission got an earful from angry residents on Thursday over a plan to charge customers almost $2 billion over the next three years. PG&E says it will use the funds to help pay for wildfire safety improvements and other items. "The 2020 GRC proposal, which is the focus of Thursday’s public participation hearings, does not include costs associated with the 2017 and 2018 wildfires," PG&E spokeswoman Kristi Jourdan told The Chico Enterprise-Record via email. "PG&E has the authority to track costs from these fires, including costs associated with repairs, restoration, damages and third-party claims, in memorandum accounts but would have to seek authorization from the (public utilities commission) through a separate application to recover those costs." The request for a rate raise must be approved by the commission and would give the utility company $1 billion above current rates in 2020, $454 million more in 2021 and $486 million more for 2022. For the average customer, Jourdan said, the rate raise would be approximately $10.50 more per month — $8.75 for electricity and $1.84 for gas. -Chico Enterprise-Record "You know that what you’re doing is killing people, and that means you’re all serial killers," said Mary Kay Benson, adding "We are not going to just lay down and be collateral damage." "The bottom line is people should not be making profit off electricity or water or whatever people need to exist," said William Bynum of Oroville. Chico Councilor Ann Schwab told the protesters that it was "time for PG&E to look for other ways to repair the damage and repair their infrastructure — not on the backs of us, who have been so damaged by their actions."
Ryan Zinke Interview: Ex-Interior Secretary Takes Energy Clients – Bloomberg - Former Interior Secretary Ryan Zinke is lining up consulting clients in industries regulated by his former department at the same time he decries the ethics investigations that drove him from the Trump administration.In an interview with Bloomberg News, the former congressman and U.S. Navy SEAL dismissed the 15 ethics probes of his dealings atop the Interior Department as “BS.”“D.C. is so angry and hateful,” Zinke said. Ultimately, he added, he stepped down from his cabinet post in January amid concerns about mounting legal bills and the fear that “all these false allegations would be a distraction.”Zinke was a freshman representative from Montana in December 2016 when Donald Trump chose him to run the Interior Department, an $11 billion agency that oversees drilling, mining and other activities on public lands. Now, he’s going to work for oil and mining companies. Among them: Texas pipeline supplier Cressman Tubular Products Corp.and Oasis Petroleum Inc., a Houston-based oil and gas explorer that donated tens of thousands of dollars to Zinke when he was seeking re-election to the House. In April, Zinke joined the board of U.S. Gold Corp., and is set to receive $90,000 in consulting fees from the Nevada-based mining company, according to filings. He is also a managing director and consultant for North Carolina-based private investment company Artillery One, and is promoting U.S. liquefied natural gas to foreign markets. He is serving as an adviser to Turnberry Solutions, the Washington lobbying firm stacked with former Trump administration advisers and campaign aides.
More U.S. coal-fired power plants are decommissioning as retirements continue - Between 2010 and the first quarter of 2019, U.S. power companies announced the retirement of more than 546 coal-fired power units, totaling about 102 gigawatts (GW) of generating capacity. Plant owners intend to retire another 17 GW of coal-fired capacity by 2025, according to the U.S. Energy Information Administration’s (EIA)Preliminary Monthly Electric Generator Inventory. After a coal unit retires, the power plant site goes through a complex, multi-year process that includes decommissioning, remediation, and redevelopment.Coal-fired power plants in the United States remain under significant economic pressure. Many plant owners have retired their coal-fired units because of relatively flat electricity demand growth and increased competition from natural gas and renewables. In 2018, plant owners retired more than 13 GW of coal-fired generation capacity, which is the second-highest annual total for U.S. coal retirements in EIA’s dataset; the highest total for coal retirements, at 15 GW, occurred in 2015.The annual number of retired U.S. coal units has declined since 2015, and the configuration of retired coal capacity has changed. Coal-fired units that retired after 2015 in the United States have generally been larger and younger than the units that retired before 2015. The U.S. coal units that retired in 2018 had an average capacity of 350 megawatts (MW) and an average age of 46 years, compared with an average capacity of 129 MW and average age of 56 years for the coal units that retired in 2015 During a coal-fired plant’s decommissioning process, the electric-generating equipment—such as precipitators, boilers, turbines, and generators—are shut down and operating permits are terminated. Unused coal and materials associated with both the generation process and the buildings and structures are removed. The electric-generating equipment may be used at other plants or sold as scrap. Unlike nuclear plant decommissioning, which is closely regulated by the Nuclear Regulatory Commission, the physical process of decommissioning a coal-fired power plant is not as firmly regulated in terms of specific procedure. The time required to physically decommission a coal-fired power plant varies and sometimes overlaps with remediation and redevelopment.
House advances bill to aid struggling coal-fired power plant (AP) — The West Virginia House of Delegates has advanced a bill to exempt a struggling coal-fired power plant from a state tax. Lawmakers in a House finance committee unanimously approved the measure Monday to stop charging FirstEnergy Solutions the $12.5 million tax. It now moves to the full House for consideration. CEO John W. Judge said the company has been operating in bankruptcy and will be forced to shutter its Pleasants Power Station in Willow Island in the next year without the tax exemption. At least 160 people work at the plant regularly but the number increases when repairs are being made. “The plant right now is very much on an edge,” Judge told lawmakers. He said the station is the only facility in the state that pays the tax on merchant power plants, which are electricity generating centers that don’t sell direct to consumer and aren’t subject to rate regulations from the West Virginia Public Service Commission. Pleasants County Commissioner Jay Powell says the closure of the plant would gut the local economy. Delegates also noted that coal producers and other industries could also be hurt. Republican Gov. Jim Justice, who owns coal companies, is pushing for the bill and widened the scope of a special legislative session on education so that lawmakers could take up the proposal.
Coal companies deny they owe $4 million in safety fines — Coal companies named in a lawsuit filed in Virginia federal court filed an answer claiming they don't owe $4 million in unpaid safety fines.A & G Coal Corporation, BlackRiver Coal, Chestnut Land Holdings, Four StarResources, Infinity Energy Company, Kentucky Fuel Corporation, Nine Mile Mining, Premium Coal Company, S&H Mining, Sequoia Energy, Virginia Fuel Corporation, Southern Coal Corporation, Justice Coal of Alabama and Tams Management filed the answer on July 9 in U.S. District Court for the Western District of Virginia."The Defendants deny the allegations...as the same allege or purport to allege that the Defendants are or have been obligated to pay $4,776,370.40 in Mine Act penalties and interest," the answer states.The defendants argue the plaintiff's complaint failed to state a claim upon which relief can be granted; is barred due to the applicable statute of limitations; is barred by the doctrines of accord and satisfaction, compromise, release, illegality, laches, duress, payment and/or waiver; is barred because the debt the plaintiff claims is owed was incurred in whole or in part by the acts and/or omissions of other persons, third parties and/or non-parties not under the direction and control of these the defendants; violates the defendants' right to due process; and is barred by the plaintiff's failure to comply with conditions precedent to the plaintiff's right to recover. The answer also states the defendants are entitled to a set-off for all amounts paid and/or which should have been paid by independent third parties, as well as any amounts which were reduced or written down or which should have been reduced or written down; the defendants are entitled to all defenses and presumptions set forth in or arising from any rule of law or statute in Virginia and/or any other state whose law is deemed to apply in this case; and the claim asserted in the complaint is barred, in whole or in part, because the plaintiff did not incur any ascertainable loss as a result of the defendants’ conduct. Fourteen companies denied any monetary obligations have been left unpaid. Nine other companies that had been named in the suit objected to litigating the matter in the federal court in Roanoke, Va., arguing they have never done business, nor are headquartered in Virginia. Double Bonus Coal Company, Dynamic Energy, Frontier Coal Company, Justice Energy Company, Justice Highwall Mining, Keystone Services Industries, M&P Services, Nufac Mining Company and Pay Car Mining Company filed their motion to dismiss for lack of personal jurisdiction on July 9. Those companies are based in West Virginia, the motion states. "The Court does not have general jurisdiction over the Defendants because the Defendants are not incorporated under the laws of Virginia and none of the Defendants maintain their principal place of business in Virginia," the motion states.
Coal Miners To Hit Capitol Hill For Black Lung Funding - Dozens of Appalachian coal miners plan to visit Capitol Hill Tuesday to ask lawmakers to bolster funding for the black lung disability trust fund, which miners depend upon when no responsible company can be identified to pay for needed health care. The fund is already billions of dollars in debt, and that will likely grow as more miners develop the disease and coal companies pay less into the fund. Coal companies pay a tax to support the trust fund, which pays monthly income and health benefits for miners who were disabled by the preventable and deadly occupational disease. The tax rate was increased in 1981 to pay down the fund’s debts and in 2008 that tax rate was extended for another 10 years. But Congress allowed the tax rate to expire last year and companies now pay about half as much per ton of coal. Now the trust fund’s debt is expected to rise from $4 billion to $15 billion by 2050. Over 25,000 miners and their dependents rely on the fund for monthly income and health benefits. Demand is expected to grow as diagnoses of severe forms of the disease skyrocket, particularly among Appalachian miners.
U.S. coal miners discouraged by black lung meeting with McConnell -(Reuters) - A group of coal miners afflicted with black lung disease met with Senate Majority Leader Mitch McConnell on Tuesday as part of an effort to convince lawmakers to restore a higher excise tax on coal companies to help fund their medical care, but several said the meeting left them discouraged. McConnell, the Republican leader who represents Kentucky - one of the states that has seen a rebound in the progressive respiratory illness - told them their benefits would be safe but gave no assurances about the excise tax and left without answering questions or offering details, several of the miners who attended the meeting said. “We rode up here for 10 hours by bus to get some answers from him because he represents our state,” said George Massey, a miner from Harlan County, Kentucky who spent two decades in the mines and is on disability. “For him to come in for just two minutes was a low-down shame.” David Mullins, who worked in coal mines for 34 years and is currently battling an advanced stage of black lung disease, said he was also frustrated. “It’s time to act,” he said, while wearing a “Black Lung Kills” T-shirt and using an oxygen tank. Coal companies had been required to pay a $1.10 per ton tax on underground coal to finance the federal Black Lung Disability Trust Fund, which supports disabled miners whose employers go bankrupt and can no longer pay out medical benefits. But the amount reverted to the 1977 level of 55 cents this year after Congress declined to take action to maintain the rate. The coal industry had lobbied hard to allow the tax to drop as scheduled, despite a government report saying the fund was in dire financial straits, arguing the companies were already facing economic pain and that benefits for afflicted miners would not be affected.
As Disabled Miners Hit D.C., Lawmakers Introduce Bills To Fund Black Lung Benefits - Democratic members of Congress introduced legislation Tuesday to provide additional funding for coal miners suffering from black lung. The bills came as a contingent of Appalachian miners afflicted with the disease lobbied lawmakers for more support. “It doesn’t only take your health. It takes your identity,” Barry Johnson said of the disease. Johnson is a fourth-generation coal miner from Letcher County, Kentucky, who made the trip to Washington with his oxygen tank in tow. A bill introduced in the House by Rep. Bobby Scott of Virginia and Rep. Alma Adams of North Carolina would restore a tax on coal that supports the federal Black Lung Disability Trust Fund, which provides benefits for some 25,000 disabled miners and their families.That tax rate expired last year, adding to the trust fund’s growing debt. A separate bill proposed in the Senate by Sen. Bob Casey of Pennsylvania would make it easier for miners to access federal black lung benefits.Federal research shows one in every five experienced miners in the region is affected, and more than 2,000 have been diagnosed with the most severe form of the disease.
In 2018, foreign-sourced uranium accounted for 90% of U.S. nuclear operators’ purchases - Most uranium purchased by U.S. civilian nuclear power reactor operators every year comes from foreign countries. In 2018, 90% of the 40 million pounds of uranium purchased was from foreign countries, led by Canada (24% of total), Kazakhstan (20%), Australia (18%), and Russia (13%). U.S.-origin uranium accounted for 10% of purchases, or 3.9 million pounds. Since 2010, between 83% and 94% of uranium purchases in any single year have come from foreign countries.Canada was the largest source of uranium purchased by U.S. civilian nuclear power reactor operators in 2018 for the fourth year in a row. Canada, home to large, high-quality uranium reserves, has been the second-largest uranium producer in the world after Kazakhstan since 2009.Uranium concentrate (U3O8) production and employment in the uranium industry in the United States have fallen for the past several years. U.S. uranium production totaled 1.6 million pounds of U3O8 in 2018, the lowest annual total since 1950 and a 66% decrease from the 4.9 million pounds of U3O8 produced in 2014. According to uranium market employment data—which includes exploration, mining, milling and processing, and reclamation activities—full-time equivalent employees declined to 372 in 2018, the lowest total since 2003, when they totaled 321. Employment increased every year from 2004 to 2008 as uranium prices rose, peaking at 1,563 employees in 2008. Industry employment has now fallen in every year from 2012 to 2018.Exploration employment has seen the largest decline since 2008, down 94% from 457 full-time equivalent employees to only 27 in 2018 because persistently low uranium prices offer little incentive to explore more potential mining sites. Mining employment is down 80% from 2008 levels, from 558 employees to 110 employees in 2018. The only category where employment hasn’t declined is reclamation, which increased to 138 employees in 2018, up from 100 in 2017. Reclamation activities have increased because more formerly active properties are being restored to a more natural state after onsite resources are exhausted or sites become uneconomic to operate. After peaking at 145 million pounds in 2016, U.S. commercial uranium inventories have since fallen to 131 million pounds in 2018. Commercial uranium inventories include material at all points in the nuclear fuel cycle.
Infamous Three Mile Island reactor, shut down since 1979, will be sold and dismantled - An energy services company that specializes in dismantling old nuclear reactors is negotiating to acquire the damaged Three Mile Island Unit 2 near Harrisburg from FirstEnergy Corp. EnergySolutions Inc. announced Tuesday it has signed a term sheet with GPU Nuclear, a subsidiary of FirstEnergy Corp., of Akron, Ohio, to acquire the Three Mile Island reactor, which was destroyed in a 1979 accident only a few months after it began commercial operations. The agreement does not include Three Mile Island Unit 1, the neighboring reactor owned by Exelon Generation that is set to go into retirement in September. “We are looking forward to working with FirstEnergy to acquire the asset and to safely complete the decommissioning of this site,” Ken Robuck, president and chief executive of Energy Solutions, said in a statement. Terms of the deal were not disclosed. Nor was a timetable, though EnergySolutions presumably would dismantle the facility on a faster schedule. The Unit 2 decommissioning costs, which FirstEnergy last year estimated at $1.26 billion, would be paid out of a trust fund. After the infamous Three Mile Island nuclear accident 40 years ago, most of the reactor’s partially melted uranium fuel was hauled away to the Idaho National Lab, where the radioactive waste now slowly decays in steel and concrete containers, awaiting long-term disposal. But the formal decommissioning of the damaged Unit 2 reactor, site of America’s worst commercial nuclear disaster, has not yet really begun. FirstEnergy Corp. has said that the plant would remain dormant until Exelon’s neighboring reactor shuts down. EnergySolutions, based in Salt Lake City, is a competitor to Holtec International of Camden in the market for decommissioning old nuclear reactors. In a nuclear industry under contraction, the dismantlement of retired reactors is one of the few growth businesses.
How Fukushima Changed Japan's Energy Mix - The 2011 Fukushima nuclear incident in Japan made international headlines for months, but it also changed Japanese attitudes towards nuclear energy. After a devastating tsunami hit Japan on March 11, 2011, emergency generators cooling the Fukushima nuclear power plant gave out and caused a total of three nuclear meltdowns, explosions and the release of radioactive material into the surrounding areas. Before the incident, the Japanese had been known as steadfast supporters of nuclear energy, taking previous nuclear catastrophes at Three Mile Island (USA) or Chernobyl (Ukraine) in stride. But a meltdown on their own soil changed the minds of many citizens and kicked the anti-nuclear power movement into gear. After mass protests, the Japanese government under then Prime Minister Yoshihiko announced plans to make Japan nuclear free by 2030 and not to rebuild any of the damaged reactors. New Prime Minister Shinzo Abe has since tried to change the nation’s mind about nuclear energy by highlighting that the technology is indeed carbon neutral and well suited to reach emission goals. As Statista's Katharina Buchholz notes, despite one reactor restart at Sendai power plant in Southern Japan in 2015, nuclear energy has almost vanished from Japanese electricity generation. In 2016 (latest available), only 2 percent of energy generated in Japan came from nuclear power plants. Coal and natural gas picked up most of the slack, but renewable sources, mainly solar energy, also grew after 2011.
Is Fukushima Safe For The Olympics? - The 2020 Olympic torch relay will commence in Fukushima: a place more often associated with a 2011 earthquake, tsunami, and nuclear disaster than international sports. That’s no accident: the location is meant to convey a narrative of recovery, and the idea that Fukushima is a safe place to visit, live–and of course, do business. Olympic baseball and softball games, also to be held in Fukushima just 55 miles from the meltdown, are meant to hammer the message of these “Recovery Olympics,” as Tokyo 2020 organizers have branded them, home. But after a visit to Fukushima, their claims seem questionable at best. In fact, the entire setup is a profoundly cynical act of “post-truth” politics. Fukushima is not yet safe, and no amount of sunny rhetoric from Olympic bigwigs as well as Japanese politicians, can make it so.We traveled to Fukushima on a bus full of journalists, filmmakers, and activists from around the world. We were accompanied by professor Fujita Yasumoto who carried a dosimeter, a device that charts the levels of radiation. With two hours to drive before hitting Fukushima, his dosimeter read 0.04; anything above 0.23, he told us, was unsafe. The needle jumped further as we approached the nuclear plants and attendant cleanup operations. Outside the Decommissioning Archive Center, it moved into unsafe territory with a 0.46 reading before spiking to a truly alarming 3.77 as we approached Fukushima Daiichi Unit 1 reactor, one of three that melted down. The Olympic torch run is currently scheduled to pass through some of these high-contamination areas.As we entered Fukushima, we started to see what looked like black Hefty garbage bags, filled with radioactive topsoil that had been scraped up by workers, most of whom, we are told, travel great distances to Fukushima to work. Thousands of these bags—which locals call “black pyramids”—are piled on top of one another, but the toiling workers aren’t wearing hazmat suits. Some of the piles of bags have vegetation popping out. The sight of the plants poking through the toxic muck could be taken as a sign of hope, but, for others, they’re a portent of danger, raising fears that the wind will blow the most contaminated parts of the topsoil into the less radiated parts of the city. No one here we met is buying Japanese Prime Minister Shinzo Abe’s line from 2013 when he tried to assuage the concerns of voters at the International Olympic Committee by telling them that things in Fukushima were “under control.” Hiroko Aihara, an independent journalist based in Fukushima, said to us, “The government has pushed propaganda over truth. This has people in Japan divided as to how serious it is. But for the people who live here, the crisis and the cleanup and contamination continue.”
Moscow Residents Fight Back Against 'Second Chernobyl' - Their signs read "We want to live!" and "Road to Death," and many bear the bright yellow symbol warning of radiation. On Monday, several hundred protesters gathered in the south of Moscow outside residential housing blocks that overlook a nuclear waste site. The site is located between the Moskva river and the popular Kolomenskoe park. It stretches for around 500 meters along sloping river banks and contains tens of thousands of tons of radioactive waste from Moscow's nearby Polymetals Factory. The plant used to extract thorium and uranium from ore and now produces weapons and military equipment. Demonstrators of all ages have gathered here to protest against an eight-lane road that they believe will cut through the contaminated soil. Activists are making speeches and collecting signatures against the project. "We want to live," is how one young man explains his attendance at the rally. Local resident Anna, who prefers for DW not to print her last name, points to the windows of her apartment in one of the high-rises above. The quiet 30-year-old with blond hair and a pierced lower lip explains that she grew up in the building. "Everyone knew about it," she says of the radioactive waste site just across the railway tracks. "When I was little my parents told me not to go there." She says when she found out about city authorities' plans to build a highway here in March, her first reaction was: "The government has gone crazy." Since then she has protested against the construction project several times, the first demonstrations she has attended as an adult. Just a short walk away from the demonstration, Andrei Ozharovsky, a nuclear physicist who has become the radiation expert consulting the activists, leads DW through a forest on the radioactive heap, which he says has presumably been here since the 1940s or 1905s, when there was much more of a slapdash attitude towards nuclear safety. At the time, this spot wasn't yet part of the city of Moscow — but bit by bit, the capital expanded. Ozharovsky notes that it is only one of many contaminated sites in the city.
Rusted shipping container stirs concern at nuclear plant - When nuclear plant workers looked in a huge, 40-foot long shipping container at an atomic fuel factory two months ago, they discovered a hole in the roof that allowed rainwater to leak inside, where barrels full of radioactive trash were stacked. Then, the workers discovered water had dripped onto some of the drums, causing uranium to trickle out and into the soil below the Westinghouse atomic fuel rod plant southeast of Columbia, according to state and federal regulatory agencies. The leaking roof is the latest problem to surface at the 50-year-old fuel factory, where recent troubles have focused the spotlight on nuclear safety and operating practices. The U.S. Nuclear Regulatory Commission and the S.C. Department of Health and Environmental Control are looking into the matter, even as Westinghouse scrambles to improve the way it stores barrels of nuclear garbage at the Bluff Road plant. The problem was discovered May 31, according to DHEC. “We are concerned,’’ said Tom Vukovinsky, an inspection official with the NRC in Atlanta. “Because of all the other issues going on, it’s something we’re interested in.’’ The other issues he referred to are a series of spills and leaks during the past three years at Westinghouse, one of Columbia’s major employers with about 1,000 workers. the nuclear plant leaked uranium last year through a hole in the floor of the 550,000-square-foot plant. Company officials later revealed there had been leaks in 2008 and 2011 that they had not reported to regulators. In 2016, the company allowed uranium to build up in an air pollution control device, a potentially dangerous situation that could have exposed nuclear plant workers to a burst of radiation. This summer, a small fire broke out in a drum full of waste. In the latest incident to surface, uranium-tainted trash stored in barrels inside the leaking shipping container got wet and dripped uranium on the ground below the container. The amount of uranium in the soil in one spot below the container was nearly twice the safety standard of 11 parts per million, A presentation showed scores of shipping containers on the site. These containers resemble the trailers on tractor-trailer trucks. Barrels are kept inside them.
Earthquakes repeatedly striking proposed US nuclear waste site -- Repeated earthquakes could risk releasing deadly radioactivity into the earth if plans for a nuclear waste site in go ahead in Nevada’s desert, the state’s governor has warned. Tens of thousands of tons of highly radioactive used nuclear reactor fuel are due to be transferred from 35 US states to a new facility in the Mojave Desert. The Yuka Mountain nuclear waste repository is set to store this material deep within the earth. But a series of recent earthquakes in the Mojave Desert has raised concerns about the safety of storing radioactive waste at the facility. On 4 July, a 7.1 magnitude earthquake ruptured the earth in the desert, which stretches across the California-Nevada border. The force of the quake cracked buildings, sparked fires, damaged roads and caused several injuries in southern California. It was followed by a 6.4-magnitude temblor two days later. In the wake of the earthquakes, the governor of Nevada Steve Sisolak said he was committed to “fighting any continued federal effort to use Nevada as the nation's nuclear dumping ground".
This Texas Oil Town Actually Wants the Nation’s Nuclear Waste - Blake Roberts pointed to a pumpjack bobbing in the West Texas heat. “Everything we do revolves around oil,” Roberts said as he neared his home outside the town of Andrews in the heart of the booming Permian Basin oil field. But Roberts, 29, has his eye on what he hopes will be the next big thing for the area: nuclear waste. As president of the local chamber of commerce, knows that oil booms are inevitably followed by busts.He is supporting a plan to establish a repository in the desert about 30 miles outside of town for as much as 40,000 metric tons of highly radioactive spent nuclear fuel and waste from power plants. If approved by the Nuclear Regulatory Commission the project could bring jobs and revenue to the area and help break a political logjam that has stranded tons of the waste at 72 power plants and other sites across the country. “We need to have income from something other than oil money,” Roberts said. Local support for the project is strong, said County Judge Charlie Falcon, who presides over the four-member Andrews County Commissioners’ Court, which functions as the county’s board of commissioners. Nuke Waste Costs Soar to $35.5 Billion as U.S. Reactors Shut The panel approved a resolution in 2015 backing the idea to accept high-level nuclear waste at the designated site, and is likely to reiterate its support with a letter in the near future, Falcon said during an interview in his chambers in the brick courthouse on Main Street. “We’ve been primarily oil-based here since 1929 and we live and die by oil prices,” said Falcon, 53, a lifelong Andrews resident. “My interest is in diversifying so we can have other sources of revenue come to our community. So we have have other sources of living.” The plan by Interim Storage Partners LLC, a joint venture between Orano CIS LLC and Waste Control Specialists LLC, calls for waste to be shipped by rail from around the country. Then it would be sealed in giant concrete casks and stored above ground for as long as 100 years, or at least until a permanent repository is built. Opponents say that could be never.
In America’s Shale Country, Nukes and Gas Are Duking It Out – Subsidizing nuclear power to fight climate change is one thing in liberal states like New York and New Jersey. It’s quite another in the natural gas bastions of Pennsylvania and Ohio. Drillers and gas-fired power plant operators are girding to fight measures to save money-losing reactors in the Keystone and Buckeye states, saying they’ve learned from past defeats and are better positioned to win.The looming debates are a key test of how far lawmakers in shale gas country are willing to go to fight climate change. Four left-leaning states have already approved bailouts for reactors, in step with aggressive targets to replace coal and gas with clean energy. This time fossil-fuel proponents are fighting on their home turf.“Natural gas is very, very strong” in Pennsylvania, said state Sen. Ryan Aument, who supports subsidizing reactors. “Those interests are well represented.” In Pennsylvania, a Republican lawmaker introduced a bill Monday to support the state’s five plants, owned by Exelon Corp., FirstEnergy Solutions and Riverstone Holdings LLC’s Talen Energy Corp. Ohio legislators are preparing their own measure. Time is critical for nuclear plants. Reactors are struggling to stay solvent as the fracking boom has made gas cheap and abundant, pushing down wholesale electricity prices. At least six have closed since 2013, including in New Jersey and Vermont. FirstEnergy Solutions said it will close its Davis-Besse and Perry nuclear plants in Ohio without subsidies. Exelon needs to order a new reactor core by May for its Three Mile Island plant -- site of the infamous 1979 meltdown -- making it crucial for lawmakers to pass legislation this spring, Chief Executive Officer Chris Crane said on call with analysts last month. “If we can get this through in that period of time, we will be able to save the unit,” Crane said.
Report claims closing nuke plants will cost lives, money - A new report commissioned by a nuclear industry organization concludes that the expected closing of electricity-producing nuclear plants in Pennsylvania and Ohio will cause pollution and related deaths to increase as coal and natural gas plants are used to fill the void.The report by two University of Washington researchers was compiled for the Nuclear Energy Institute in April and released earlier this month by Nuclear Matters, a pro-nuclear energy group, and the National Caucus and Center on Black Aging.While the Beaver Valley Nuclear Power Station in Shippingport is slated to close in June 2021, it was not part of the study, which covered the anticipated closures of Three Mile Island in Dauphin County and the Davis-Besse and Perry nuclear plants in Ohio.All three plants and Beaver Valley are in the PJM Interconnection, a regional electricity transmission grid stretching from Illinois to the East coast. “If nuclear plants cease operating in PJM, the loss in electricity generation would likely be replaced by generation from nonnuclear plants, a change that would impact air pollution and health,” researchers wrote.
State plane scheduled to pick up lawmakers for nuclear bailout bill canceled - - The Columbus Dispatch - A state airplane scheduled to fly to Chicago on Tuesday morning to pick up at least one Ohio House member for delivery to a close, critical vote on a nuclear power plant bailout for FirstEnergy Solutions was canceled late Monday. The State Highway Patrol flight, scheduled to make the round trip at the request of House Chief of Staff Jonathan McGee, was approved by the staff of Republican Gov. Mike DeWine since it involved “state business,” said press secretary Dan Tierney. However, the flight was canceled, House spokeswoman Gail Crawley said shortly before 11:30 p.m. Monday, hours after The Dispatch story was posted online and the House had not responded to requests for comment.“We considered using the state plane and researched the cost of the state plane versus flying commercial or driving. The members decided to fly commercial or drive back for session on Tuesday,” she wrote in an email.The House, meanwhile, voted 51-38 Tuesday morning to concur with Senate changes and narrowly pass House Bill 6, sending it to DeWine, who has said he will sign the measure into law.A State Highway Patrol spokesman said on Tuesday morning that the fight related to the bill — scheduled to depart Columbus at 4:30 a.m. Tuesday and return at 10 a.m. — was canceled at 8:47 p.m. Monday. A list of House Republicans attending the Council of State Governments conference in Chicago obtained by The Dispatch consisted of Speaker Pro Tem Jim Butler of Oakwood, Tom Brinkman of Cincinnati, Bob Cupp of Lima and David Greenspan of Westlake. All voted in favor of the bill this morning except for Greenspan, who said his previously booked commercial flight returned him to Cleveland on Monday night. The patrol’s Cessna Caravan can carry 10 or more passengers.
Ohio legislature has a chance to fix HB 6’s flaws before final passage. It must do so: editorial By Editorial Board, cleveland.com and The Plain Dealer - Today, in a hastily scheduled session, Ohio’s House may vote its concurrence with the Senate version of House Bill 6, the FirstEnergy Solutions nuclear subsidy plan. That would send the bill to Gov. Mike DeWine’s desk for his expected signature. Or, the House could request a conference committee with the state Senate to, in effect, rewrite the Senate’s rewrite of HB 6. The facts demand a conference committee, not concurrence. It’s no overstatement to say the state’s future is at stake. Are we going to be a state mired in the past, unable to set the stage for a more sustainable energy future that will excite and attract the next generation -- a state beholden more to lobbyists than to innovation and progress? That’s what a “yes” vote on the current HB 6 legislation would signal.Or, are we a state that genuinely values clean energy in all its forms -- including energy-efficiency savings and wind, solar and other renewable energy? HB 6 as written claims to be a “clean air” bill, but its subsidies primarily reward only some contributors to clean air, steering most of its subsidies to Ohio’s two nuclear plants. It would undercut and arguably destroy the state’s renewable energy and energy-efficiency requirements for utilities.Effectively, HB 6 takes resources originally directed by state elected officials to provide Ohio with a more sustainable renewable energy profile and hands that money to two aging nuclear plants and two (non-clean-air) coal plants, one of them in Indiana. Political goal: to hide the cost to Ohioans of the nuclear subsidy by shaving the renewable energy and efficiency charges now wrapped into monthly bills.That is, HB 6, as it stands, would mortgage Ohioans’ future energy options to prop up aging nuclear and coal plants -- and the utilities operating them. And this sleight of hand means that Ohio consumers’ monthly bills will appear lower than they are now after legislators simply discard most of the renewable and efficient-energy incentives, as they appear intent on doing.That’s the math. It’s not the science: Legislators can try to postpone health and environmental costs, but they can’t make them go away. But every Ohio residential electricity customer will be paying about 85 cents a month for this new subsidy – statewide, $43.2 million a year -- with commercial and industrial ratepayers paying more.
After months of contentious debate, Ohio nuclear bailout bill becomes law - Columbus Dispatch - FirstEnergy Solutions will get its $150 million a year bailout from the state’s electricity customers to save its two northern Ohio nuclear power plants.The House, by a 51-38 vote Tuesday, agreed to changes in House Bill 6 approved by the Senate last week. Gov. Mike DeWine immediately signed the bill into law, completing the biggest overhaul to the state’s energy laws in more than a decade. House leadership arranged on Monday — with the approval of DeWine’s office — to dispatch a State Highway Patrol airplane to Chicago to pick up some House members attending a conference to ensure their return and presence for what was expected to be a close vote.However, after research determined the cost of the state plane was $5,677, the flight was canceled hours later by House officials late Monday and the members drove back or took commercial flights to make the House session. The House action and the governor’s signature brought a quick end to an intense and bitter months-long fight that featured a multimillion-dollar statewide television, radio and mail campaign. Unlike other bills, the legislation didn’t break along party lines; supporters and opponents included a mix of legislators from both parties. After the vote, visitors in the gallery applauded. Workers from both power plants, along with other supporters, have been fixtures in legislative hearings on the proposal. Public officials and a cadre of industry lobbyists pushed for the bill along with a variety of trade unions looking to save the 1,400 jobs at the plants. Environmentalists, some business groups, and oil and gas interests fought the legislation. “House Bill 6 is still a very bad bill that puts Ohio on the wrong track,” said Trish Demeter, advocate for the Ohio Environment Council Fund. The new law will impose a fee of 85 cents a month on residential ratepayers from 2021 through 2027, generating about $170 million a year. Most of the money, about $150 million a year, will shore up the Davis-Besse and Perry nuclear plants, which generate about 15% of Ohio’s electricity. Without that aid, FirstEnergy Solutions, the former power generation arm of Akron-based FirstEnergy that is working through bankruptcy protection, has said that it would have to close the plants.
Think tank: Nuclear plants' bankrupt owner spent heavily for bailout —The bankrupt owner of two nuclear power plants that will be subsidized by consumers to the tune of $900 million spent heavily to influence bailout debates in Ohio and Pennsylvania, according to a renewable energy think tank. The San Francisco-based Energy and Policy Institute reviewed documents in FirstEnergy Solutions’ bankruptcy case as the corporation received bankruptcy court approval for the spending. The expense has yielded fruit at least in that Ohio. Gov. Mike DeWine wasted little time on Tuesday signing House Bill 6 into law. The measure requires consumers statewide to pay surcharges on their monthly electricity bills to keep the Davis-Besse plant in Oak Harbor and the Perry plant east of Cleveland humming for at least a few more years. The two plants directly employ about 1,400 people. Dave Anderson, the institute’s policy and communications manager, said bankruptcy filings show lobbying firms were getting paid by FirstEnergy Solutions with the permission of the court. Then FirstEnergy Solutions and the lobbying firms were launching pro-bailout coalitions like the Ohio Clean Energy Jobs Alliance. “It provided a rare window into the inner workings of what are supposedly grassroots campaigns,” he said. The almost $50 million in spending is separate from the millions spent on both sides of the Ohio fight on TV and radio ads and mailers. A pro-bailout group, Generation Now, is a dark money super PAC that is estimated to have spent more than $9 million on TV and radio ads. It will eventually have to reveal the sources of its money to the IRS.
Two Well Permits Awarded in Columbiana County - – Hilcorp Energy Co. has secured two new permits for horizontal wells in Columbiana County, according to the most recent data posted by the Ohio Department of Natural Resources. Both wells are targeted for Elk Run Township on the Johnston pad, and are the first permits awarded in Columbiana County since August 2018, according to records. No new well permits were reported for Mahoning or Trumbull counties in the northern tier of the Utica. Nor were there new permits issued in nearby Lawrence or Mercer counties in the northern Utica’s western Pennsylvania footprint, according to the Pennsylvania Department of Environmental Protection. ODNR issued a total of 15 permits for the week ended Feb. 9, the agency reported. Aside from Hilcorp’s two Columbiana County wells, Ascent Resources LLC secured six new permits – two for wells in Belmont County, three for wells slated for Guernsey County, and a single permit for a well in Harrison County. Equinor USA Onshore Properties Inc. was awarded four permits for wells in Monroe County, while Chesapeake Exploration LLC secured three permits to drill wells in Harrison County. To date, ODNR has issued 3,000 permits to oil and gas companies that use horizontal drilling methods to explore the Utica/Point Pleasant shale formation in Ohio. These companies have so far drilled 2,531 wells in the shale play, while 2,141 of these wells are in production. The majority of wells drilled are located in the southeastern portion of the state, where higher geological pressure in the shale allows for more production. ODNR reported that there were 14 rigs in operation during the week.
Fracking in Ohio: Amid industry activity, residents start their own shale gas-related health registry -A dozen people are scurrying around a church basement in Youngstown, Ohio. They’re arranging tables and chairs, setting up paperwork, and hanging up signs that read, “Ohio Health Registry.” “The Ohio Health Registry is really an attempt to collect the contacts of people who live close enough to any aspect of shale development, that they might be affected,” said Dr. Deborah Cowden, a family physician from the Dayton area, who started the effort.Cowden drove three and a half hours east this morning to organize the registration, while others came in from Oberlin, Cleveland and Lake County to register people in Youngstown.“This is the medical questionnaire, and I’m going to read some instructions,” a registrar tells one person who has shown up to fill out the forms, which take about 15 minutes to fill out.Participants are asked their proximity to gas development, and about any current health symptoms – everything from levels of fatigue, nausea, and asthma, to whether they have a diagnosis of cancer, their mental health, and their family health history. Martin Senganec, age 60, who is a truck-driver, filled out the registration forms at a similar event in nearby Lowellville. He’s heard about a new frack waste injection well being permitted near his home. “I live less than a mile from what they’re building there, and I’m worried about it,” he said. Sengenec remembers the magnitude 3.0 earthquake near here five years ago, that Ohio regulators linked to fracking. He’s also concerned that this area has become a dumping ground for fracking wastewater, a high salinity, chemical-laced brine. Sengenic doesn’t think the state is ensuring that his drinking water well will be protected from contamination.“They say it’s not going to harm. I have well water, all the people around here have well water, and that’s what I’m worried about. If that hurts that…once the well is contaminated, you can’t do nothing with it,” he said.
Hot, Toxic Mess: Fracking Waste, Injection Wells, and De-Icing “Brine” - Randi Pokladnik - On July 1, I attended an environmental community science meeting at the Ohio University Campus Eastern in St. Clairsville, Ohio. The meeting was to provide local citizens with scientific information regarding a proposed oil and gas waste Class II injection well to be located at the intersection of U.S. 40 and Ohio 331. This Class II injection well would accept produced water wastes from high pressure hydraulic fracking. This waste contains flowback water, the fluid used to frack a well. This fluid is a chemical cocktail that can contain benzene, arsenic, formaldehyde, lead, mercury, and many other proprietary chemicals.The liquid waste also contains toxic metals, radioactive materials, and brine resulting from contact with the ancient rock formation that is being fracked. As a well is fracked, millions of gallons of fracking fluids are injected deep into the rock strata. According to a 2018 study out of Dartmouth College, in just hours, radioactive Radium 226 and Radium 228 can be leached out of the rock and into the saline solution. As the brine is pulled to the surface to be disposed of, the water-soluble radioactive isotopes hitch a ride as well. “More than 18 billion gallons of waste fluid from oil and gas is generated annually in the USA” according to the American Petroleum Institute. The waste is often referred to as Technically Enhanced Naturally Occurring Radioactive Materials or TENORM. A Pennsylvania study found that produced water from a horizontal unconventional well can contain water soluble Radium-226 in concentrations ranging from 40- 26,000 pCi/L. The safe drinking water standard for Ra-226 and RA-228 is 5 pCi/L. This toxic radioactive waste is what is pushed down injection wells in Ohio. In addition, much of the waste injected into Ohio’s Class II wells comes from out of state sources (Pennsylvania and West Virginia).According to a study done by our allies at FrackTracker Alliance, Ohio has 226 active Class II injection wells. These wells dot Ohio’s landscape in and along the area of Utica and Marcellus drilling, as well as expand into Ashtabula, Trumball, and Portage counties to the north and Washington, Athens, and Muskingum counties to the south.FracTracker data shows that the top twenty wells within these 226 are accepting more waste each year, at least 24,822 barrels more annually. This is due in part to an increase in the horizontal distances drilled to frack a well. In the beginning of the fracking boom, most lateral lengths were approximately two miles, now they have increased to three to three and a half miles. These “super laterals” require more water to frack and therefore create more wastes or “produced water”.
As Risky Finances Alienate Investors, Fracking Companies Look to Retirement Funds for Cash – DeSmog A year ago, Chesapeake Energy, at one time the nation’s largest natural gas producer, announced it was selling off its Ohio Utica shale drilling rights in a $2 billion deal with a little-known private company based in Houston, Texas, Encino Acquisition Partners. For Chesapeake, the deal offered a way to pay off some of its debts, incurred as its former CEO, “Shale King” Aubrey McClendon, led Chesapeake on a disastrous shale drilling spree. Shares of Chesapeake Energy, which in the early days of the fracking boom traded in the $20 to $30 a share range, are now valued at a little more than $1.50. Chesapeake, of course, is not alone in discovering that shale drilling can be financially disastrous for investors. In 2018, the top 29 shale producers spent $6.69 billion more than they earned from operations, an April report by Reuters concluded — a spending record racked up two years after investors began pushing shale drillers to start turning a profit. In December 2017, the Wall Street Journal found that shale producers had spent $280 billion more than the oil and gas they sold was worth between 2007 and 2017, the first 10 years of the shale drilling rush. “We lost the growth investors,” Pioneer Natural Resources CEO Scott Sheffield recently told the Journal. “Now we’ve got to attract a whole other set of investors.”Encino, which bought up Chesapeake Energy’s 900,000 acres of drilling rights in Ohio’s Utica shale in that $2 billion deal, may have found its “other” investors: the Canada Pension Plan Investment Board (CPPIB), which manages retirement funds on behalf of the Canada Pension Plan. “We’re not your typical private equity company in that the Canada pension plan is I think the third largest pension plan in the world,” Ray Walker, Encino’s chief operating officer, told attendees at last month’s DUG East shale industry conference in Pittsburgh. “They have a long-term view on capital and they don’t expect their funds to start declining — in other words more people [in Canada] are putting in today than will be taking out, and they don’t expect that to flip til 2050-plus.”
Speakers cite health hazards linked to petrochemical industry -- Matthew Mehalik, executive director of the Breathe Collaborative in Pittsburgh, and Dr. Ned Ketyer, a pediatrician from Washington County, Pennsylvania, addressed a large audience at Lunch With Books at the Ohio County Public Library. Wheeling is in the bull’s-eye for harmful effects from the petrochemical industry, Ketyer said, with fracking well pads expanding greatly and compressor stations growing rapidly in size and number. Citing potential dangers of the industry, they said an ethane cracker plant now under construction in Beaver County, Pennsylvania, and proposed cracker plants in Belmont and Wood counties are expected to create significant negative health care impacts. For example, Mehalik said experts predict health care costs in Ohio County would increase $1.3 to $3.1 million annually, or $46-94 million over 30 years, as a result of the three plants. He said 30-year costs nationally are projected at $3.6-8.4 billion. The Ohio River will be “a conduit for pollution” from the Royal Dutch Shell cracker plant in Beaver County, Ketyer said, adding that air pollution exposures “are going to be significant” in areas downwind from the plant. Ketyer said people in an area 1 to 4 miles from the plant face extreme exposure, with potential health problems such as upper respiratory irritation, shortness of breath, higher blood pressure and changes in cognitive function.
DOE Official Tells W.Va. Lawmakers Petrochemical Development is a Top Priority - West Virginia lawmakers heard testimony Tuesday from a top Department of Energy official that the federal government is prioritizing building out a petrochemical industry in Appalachia. Speaking in front of the Joint Committee on Natural Gas Development, Steven Winberg, DOE’s assistant secretary for fossil energy, told lawmakers his agency and the Trump administration believe the Ohio Valley is “on the cusp of an Appalachian petrochemical renaissance.” “Federal efforts are strong and continue to gain momentum,” Winberg said. “We also recognize that others are doing a lot and we believe that together we can make this Appalachian petrochemical Renaissance happen for the benefit of the industry, the region and the country.” West Virginia, Pennsylvania and Ohio sit on top of some of the country’s largest reserves of ethane-rich natural “wet” gas, which can be processed into the chemical and plastics feedstocks. According to a 2017 U.S. Department of Energy report, U.S. natural gas liquids production in the region is projected to increase over 700 percent in the 10 years from 2013 to 2023. Winberg said the federal government is devoting resources into ensuring pipelines, ethane storage and cracker plants are built in the region, including to get final investment in a proposed cracker plant in Belmont County, Ohio. Thailand-based PTT Global Chemical, and its partner South Korea’s Daelim Industrial Co., have applied for permits and purchased 500 acres of land in Dilles Bottom, just a few miles from both Shadyside, Ohio, and Moundsville, West Virginia, just across the Ohio River. About 30 miles northwest of Pittsburgh, Shell’s Monaca cracker plant is already under construction. It’s slated to produce 1.6 million tons of ethylene each year and permanently employ about 600 workers when done, according to the company. Winberg urged West Virginia lawmakers to invest now in preparing sites for possible cracker development. “What we need, ladies and gentlemen, is one of these crackers in West Virginia,” he told the committee. “These crackers are the anchor facilities that will drive job growth in this region.”
Braskem abandons proposed petchem project in West Virginia; will sell site | S&P Global Platts — Brazilian petrochemical producer Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia, and is seeking to sell the land that would have housed it, the company confirmed Thursday. "Due to a number of recent inquiries about its site in Parkersburg, Braskem has engaged a financial advisor to help evaluate strategic alternatives for the site," the company said, declining further comment. The decision is the latest reversal seen by proponents of the Appalachian Basin region's natural gas industry, who are seeking to attract international investment in the energy and petrochemical industries to the Mountain State. The project, announced in 2013, has been on Braskem's back burner for several years. In May last year Mark Nikolich, CEO of Braskem's US arm, Braskem America, said the project remained on hold pending progress on infrastructure, such as pipelines. The company had not found the right risk profile by that time, he said last year. Since then, Braskem has faced multiple other challenges. The company is facing fallout from a government report that linked its salt mining operations in Brazil to geological damages, leading to one cash freeze of R$3.7 billion ($973 million) and a lawsuit seeking a second freeze of R$2.5 billion ($657 million). Braskem's failure to file a required annual report for 2017 with the US Securities and Exchange Commission on time and uncertainty about an extension of a naphtha supply contract with Braskem co-owner Petrobras were among issues that held up a conclusion for more than a year, market sources said. Odebrecht has since filed for bankruptcy protection. .
'Game-changer' cracker plant in Wood County is off, but another developer could step up - WV MetroNews — The developers of a proposed petrochemical cracker plant that generated buzz several years ago have officially withdrawn, state officials said, but they’re still working to encourage other possible developers.Then-Gov. Earl Ray Tomblin announced the possibility of a petrochemical complex in 2013, calling it a “game changer.”The site was a long-time chemical plant location south of Parkersburg. The site, most recently held by a company called SABIC was more than 300 acres.But the $4 billion cracker plant has never come to be as complications arose with the Braskem and Odebrecht companies that were behind it. The companies in 2015 said the project wasbeing reevaluated. Mike Graney, director of the West Virginia Development Office, was updating a group of lawmakers about recent contacts with natural gas developers when he described the status of the cracker project. “Braskem, who owned 380 acres, I think, in Washington Works, has agreed they are not going to build a cracker and they are quietly marketing that property,” Graney said. “And they really want to guide that decision because they’d like to see another cracker built so they’re marketing to that group of companies that could make that investment. So that’s big news. Big news because that’s sort of moving this thing forward.” A cracker plant separates ethane from natural gas into components for the polymer industries. “I think that site probably is one of the best opportunities for a cracker or other investment in the state of West Virginia,” “It has everything on that site that you need. You have close to highways, we have rails, we have river transportation and naturally we have the airport, which doesn’t do anything for product but it does get executives in and out of the area.”
Babies Born Near Oil and Gas Wells Are 40 to 70% More Likely to Have Congenital Heart Defects, New Study Shows - Proximity to oil and gas sites makes pregnant mothers up to 70 percent more likely to give birth to a baby with congenital heart defects, according to a new study. Led by Dr. Lisa McKenzie at the University of Colorado, researchers found that the chemicals released from oil and gas wells can have serious and potentially fatal effects on babies born to mothers who live within a mile of an active well site — as about 17 million Americans do. The researchers studied more than 3,000 newborns who were born in Colorado between 2005 and 2011. The state is home to about 60,000 fracking sites, according to the grassroots group Colorado Rising. In areas with the highest intensity of oil and gas extraction activity, mothers were 40 to 70 percent more likely to give birth to babies with congenital heart defects (CHDs). "We observed more children were being born with a congenital heart defect in areas with the highest intensity of oil and gas well activity," said McKenzie in a statement. The study was more precise than previous reports about the link between oil and gas extraction and CHDs. The researchers studied families in which the pregnant mother lived near an active oil or gas well up to the second month of pregnancy, when fetal cardiac development takes place. They also estimated the level of intensity of the oil and gas activity, determined exactly how close the pregnant mothers lived to the well sites, and ensured there were no other significant air pollution sources which could skew their results. One science journalist, on social media, called the study "extremely convincing." This study that found a 40-70% increased risk of congenital heart defects in children born close to oil and gas infrastructure is extremely convincing. They adjusted for all the things I wondered about when I first saw the headlines.https://t.co/Unccpzi9MD — Dave Levitan (@davelevitan) July 19, 2019 Biologist Sandra Steingraber was among the experts on the dangers of fossil fuel extraction who pointed to the study as the latest evidence that allowing oil and gas wells to operate, especially near communities, is a public health hazard. "It's a strong study," Steingraber wrote on Twitter after reading the paper, noting that the researchers built on knowledge scientists already have about chemicals that are known to be harmful to prenatal health and that are released during fracking.
Joint W.Va. Legislative Committee Urged to Find Fix for Plugging ‘Orphan’ Wells | West Virginia Public Broadcasting - Members of the West Virginia Legislature heard testimony Monday in support of reviving policy solutions to address the state’s growing number of abandoned and unplugged natural gas wells. In an afternoon hearing in front of the Joint Standing Committee on Energy, representatives from an industry trade group, the West Virginia Department of Environmental Protection and the West Virginia Surface Owners' Rights Organization urged lawmakers to provide more resources to the WVDEP. There are more than 14,000 abandoned wells across the state. More than 4,500 are classified as “orphan,” which means they don’t have an operator. Sealing orphan wells falls on state regulators. Plugging one well can cost upwards of $60,000. “It’s a big number, and we haven't done a very good job, I think, as a state and as an industry addressing those,” said James Martin, director of WVDEP’s Office of Oil and Gas. One challenge is money. WVDEP gets funding for well plugging from a portion of each $150 well work permit application fee as well as any forfeited bonds. Martin said those funding streams generage, on average, $80,000 a year. In 2018, the Legislature passed the natural gas “co-tenancy” law, which governs oil and drilling on properties owned by multiple people. It includes a provision with the potential to funnel millions of dollars into the state’s orphan well fund, but not for a few years. “For orphan wells specifically, we need significant and sustained funding to necessitate an appreciable level,” Martin said. “ At $80,000 a year we can plug one well here. So that's not going to address the 4,600 anytime soon.”
Philadelphia Energy Solutions files for bankruptcy after refinery fire- (Reuters) - Philadelphia Energy Solutions filed for Chapter 11 bankruptcy protection, the company said on Monday, its second such filing in less than two years, after a fire last month prompted it to close the largest refinery on the U.S. East Coast. Following the June 21 explosions and blaze, PES started shutting down the 335,000 barrel-per-day Philadelphia plant without a planned restart. Some 1,000 workers are being laid off. The company’s lenders agreed to provide up to $100 million in new financing to PES to usher it through the bankruptcy, it said. The agreement allows PES to “safely wind down our refining operations and, with the support of our insurers and stakeholders, best position the company for a successful reorganization, the rebuilding of our damaged infrastructure, and a restart of our refining operations,” Mark Smith, chief executive officer of PES Energy, said in a statement. PES could receive payouts of $1.25 billion in insurance claims connected to the fire and business closure, according to two sources briefed on the company’s policies. The potential payouts include $1 billion for property damage and $250 million for loss of business, the sources said. The insurance payouts were expected to be used as collateral for the new bankruptcy financing, the sources said. The refinery has struggled financially for years, slashing worker benefits and scaling back capital projects to save cash. PES filed for bankruptcy in January 2018 to reduce debt, but cash on hand dwindled even after the company emerged from the process later in the year.
Shipping companies sue Philadelphia Energy Solutions for $600,000 in unpaid bills (Reuters) - Three Greek shipping companies sued U.S. refiner Philadelphia Energy Solutions Inc (PES) for about $600,000, claiming the company did not pay them for fees incurred by crude oil tankers chartered earlier this year, court documents showed. The lawsuit, entered into New York Southern District Court on Friday, just days before PES, the largest refinery in the East Coast, filed for Chapter 11 bankruptcy protection following a fire that damaged its 335,000 barrel-per-day refinery. PES exited bankruptcy in August and has struggled financially for several years. Bayview Shipping Co S.A., Skyview Marine Co S.A., and Gulfview Shipping Co S.A. are seeking a total of $605,160, chartering crude vessels, interest, legal fees and other costs they say PES was responsible for under the charter agreements. The cargoes, chartered between February and April, were loaded with N'Kossa crude oil, according to the lawsuit. N'Kossa crude is produced in the Republic of the Congo and is typically lifted as N'Kossa Blend which is a blend of N'Kossa and Kitina crude grades. At least two of the cargoes were loaded from the Djeno Terminal, according to the lawsuit, which is operated by French oil and gas company Total. PES was not immediately available for comment.
Pennsylvania court issues split decision on Marcellus Shale natural gas drilling rules - - A state court on Monday upheld portions of Pennsylvania regulations that address Marcellus Shale natural gas drilling, although the judges also sided with some of the arguments made by an industry group. The seven-judge Commonwealth Court panel's 91-page decision concerns a lawsuit brought by the Marcellus Shale Coalition against the state Department of Environmental Protection and the Environmental Quality Board. The judges said state officials were not authorized to require restoration of sites to their approximate original conditions within nine months of when drilling has ended. The agencies did not persuade the judges that they have the power to require well operators to monitor wells near their drilling operations, even if they do not have the right to go on those properties and plug them if needed, Judge Kevin Brobson wrote for the unanimous court. But the judges sided with DEP and the board in other respects, including on rules for liquid impoundment ponds and how drillers must respond when nearby wells are affected by their activity.
US Gas Economics Set to Fall Below $3 - U.S. natural gas economics will reach below $3 per million British thermal units (MMBtu) within the next decade, McKinsey Energy Insights reported Tuesday. According to McKinsey’s newly released 2019 North American Gas Outlook, North American gas demand will increase approximately 32 percent by 2030 – from 95 billion cubic feet per day (bcfd) to 125 bcfd. The firm contends the period will be marked by ample supply, escalating gas exports from North America and new domestic gas demand growth. McKinsey’s report also predicts that 20 bcfd of North American gas demand growth will come from gas and liquefied natural gas (LNG) exports. It also anticipates that coal-fired plant retirements will help gas’ share of the power mix to grow by 5 bcfd; however, it includes the caveat that renewables will start to displace gas after 2025 amid power sector decarbonization. “North American is endowed with abundant gas resources, which will play a major role in the energy mix domestically and provide security of supply through LNG to Europe and Asia,” Dumitru Dediu, partner at McKinsey, said in a written statement emailed to Rigzone. “We see over 1,000 trillion cubic feet of gas resources – which is sufficient to meet demand for the next two decades – at cost economics well below $3 per MMBtu.” The report assumes that gas production from Appalachia will grow to approximately 55 bcfd and supply roughly 40 percent of the North American market by 2030. Consequently, it projects that Appalachian gas output will displace the Western Canadian Sedimentary Basin and Rockies in the Midwest and supply the southern Mid-Atlantic region. “The building of pipeline infrastructure post-2023 will ensure Appalachian supply will continue to grow and limit price fly-up potential,” McKinsey stated. Also, the firm expects associated gas production – primarily from the Permian Basin – to increase by approximately 12 bcfd and supply one-quarter of the North American market by 2030. It pointed out that Permian production will limit southward gas flows from Appalachia, helping to meet LNG export demand on the U.S. Gulf Coast.
Listen: How fears of a US recession could impact spending in the US natural gas midstream sector – podcast - S&P Global Platts senior natural gas writer Harry Weber and Americas natural gas managing editor Joe Fisher discuss the outlook for the US midstream sector as fourth-quarter 2018 earnings reporting season begins, from the appetite for further major pipeline projects to the markets that will be served by increasing gas production to the impact LNG export growth will have on the industry.
Hotter Weather Trends End Natural Gas' Losing Streak - After closing lower every day last week natural gas prices ended the streak of down days today, with the prompt month August contract moving around 6 cents higher on the day. Hotter weather trends were the primary reason for the move higher. This was precisely the risk that we alerted clients to in our Pre-Close Update back on Friday. Indeed, after tagging our 2.25 target in Friday's session, buyers stepped back into the market after weekend weather models revealed that cooler weather would be confined to the current week, with above normal temperatures becoming more widespread again to end July and start the month of August. This gives us just a handful of days that are projected to be below normal in terms of weather demand (GWDDs). In terms of forecast changes, here is the change in GWDDs compared to the forecast back on Friday:
Natural Gas Futures Post Small Gain as EIA Report Seen ‘Failing to Move the Needle’ - An on-target storage report from the Energy Information Administration (EIA) gave neither the bulls nor the bears much to feast on Thursday as futures gained slightly on the day. In the spot market, prices pulled back somewhat in the hot Southwest, while milder temps accompanied small adjustments in the Midwest and East; the NGI Spot Gas National Avg. added 3.5 cents to $2.080/MMBtu. The August Nymex futures contract, set to expire Monday, added 2.4 cents to settle at $2.244 after trading in a range from $2.222 up to $2.261. September settled at $2.227, up 2.5 cents, while October gained 2.6 cents to $2.253. The relatively tight trading range coincided with daily fundamentals data that offered little in the way of new information to change the market’s outlook, Liquefied natural gas (LNG) demand “remains off its highs as well, and burns showed little change” compared to Wednesday, “still running a little stronger than last week on a weather-adjusted basis” but lower in absolute terms given milder temperatures, The EIA on Thursday reported an on-target 36 Bcf injection into U.S. natural gas stocks for the week ended July 19, versus a 27 Bcf injection recorded in the year-ago period and a five-year average 44 Bcf build. After a long string of above-normal builds earlier in the injection season, this week marks the second straight EIA report to come in below the five-year average. Prior to Thursday’s report, estimates had been pointing to an injection in line with the actual figure. A Bloomberg survey had showed a median 37 Bcf, while Intercontinental Exchange futures had settled at 35 Bcf. NGI’s model predicted a 33 Bcf injection.Total Lower 48 working gas in underground storage stood at 2,569 Bcf as of July 19, 300 Bcf (13.2%) higher than last year but 151 Bcf (minus 5.6%) lower than the five-year average, according to EIA. By region, the Midwest injected 23 Bcf on the week, while the East saw a net injection of 14 Bcf. Farther west, the Mountain region refilled 4 Bcf, while the Pacific on net grew its inventories by 3 Bcf. In the South Central, a 17 Bcf withdrawal from salt stocks was partially offset by a 9 Bcf injection into nonsalt, EIA data show. A combination of higher LNG feed gas demand and stronger power burns has seen injections “begin to normalize” during the last two report weeks, according to analysts with Jefferies LLC. “From the end of March until two weeks ago, 1.4 Tcf of gas was injected into storage, 45% above the five-year average of 0.9 Tcf,” the Jefferies analysts said. “...Lower prices are clearly impacting power burn, as July has averaged 40.4 Bcf/d, a new monthly record and up 1.1 Bcf/d year/year.” This year “has already seen 11 days of 40-plus Bcf/d power burn versus only nine in all of 2018. Power burn continues to exceed prior year levels despite” cooling degree days (CDD) coming in about 10% lower summer-to-date. “Even with this month’s hot weather, CDDs are still down around 2% year/year in July.”
Breaking Down Today's In-Line EIA Report - Natural gas prices trade in a fairly tight range of just under 4 cents today, despite being an "EIA report" day. The August contract settled just over 2 cents higher on the day. One reason for the lack of significant movement? Today's EIA report, despite the uncertainty around how much influence Hurricane Barry would have on the number, wound up almost dead on with the consensus market estimate, with last week's build being 36 bcf. The draw in the salts was very impressive, but the overall report, while a lower build than the 5-year average, was reflective of supply demand balance that are still too loose to support a move higher, as seen when looking at the trend line of this same gas week in recent years. In fact, despite prices still being at historically low levels and a July that turned out to be a top-tier hot month in terms of national demand, end-of-season storage forecast have still not made a move lower, as the supply / demand balance has not tightened like what typically is observed with prices this low. As the saying goes, "low prices is the cure for low prices", and at some point that will again be true, but we have not reached that point as of this writing. Recent weather trends are introducing another potential cooler push in the medium range, placing some "blues" back in our 11-15 day forecast today. That will not help the bullish case as long as cooler trends persist. Having said all of that, it is just the 25th of July, meaning there is plenty of time between now and the end of injection season, and as we know here in the world of natural gas, things can change quickly.
Natural Gas Prices Move Closer To Last Month's Multi-Year Lows - Natural gas prices continue to take a beating, with the August contract closing just a penny higher than last month's multi-year low for prompt month price. The contract was down 7.5 cents on the day today, settling at $2.169. As we mentioned in yesterday's post, while the EIA number in yesterday's report was almost exactly on par with market expectations, it was reflective of supply / demand balances that are still insufficient to allow prices to rally. The weather forecasts have been moving cooler as well, lowering forecast natural gas demand. We had outlined in our reports yesterday that we could see a continuation of that trend into today, and that proved to be correct, with our forecast moving 4.5 Gas-Weighted Degree Days cooler / lower. There are still some hotter than normal days on the way, but the dip in forecast demand is quite evident out in the 11-15 day time frame. In map form, it shows up even better, with larger coverage of below normal forecast temperature anomalies. The question is, how long will the cooler weather pattern hold? And will the lower price change supply / demand balances such that we can put in a price floor even with cooler weather trends?
Energy regulators divided over natural gas and climate change - Regulatory decisions about America’s bounty of natural gas are in the hands of an obscure and understaffed federal agency with a limited mandate to think about climate change. With America’s production of oil and natural gas soaring and Congress not acting on climate change, the once-sleepy Federal Energy Regulatory Commission is finding itself at the center of protests and lawsuits. Interviews with all 4 FERC members illustrate their division over how to handle greenhouse gas emissions. Democratic FERC Commissioner Richard Glick wants to require companies seeking approval for pipelines and liquefied natural gas (LNG) export terminals to offset significant greenhouse gas emissions, similar to the way companies compensate for more traditional environmental impacts like creating wetlands. Natural gas is cleaner than coal and oil, but as a fossil fuel it still emits heat-trapping emissions. “I just fundamentally disagree with Commissioner Glick on this matter,” said Neil Chatterjee, the panel's Republican chairman. “The approach the commission has been taking is what we are statutorily obligated to do.” Chatterjee pointed to the commission’s February approval of a gas export terminal, calling it a “breakthrough” because it was the first in two years and because it listed the greenhouse gas emissions associated with the project. (Glick dismissed the move as "window dressing.") The FERC's relatively limited legal authority is in the economic realm and rests largely on 2 nearly century-old laws — the Federal Power Act and the Natural Gas Act — that aren't environmentally focused. It's also short-staffed. Normally, it should have 5 commissioners; today it's at 4 and it's about to drop to 3. Democratic Commissioner Cheryl LaFleur is resigning next month (against her will). LaFleur has struck the most centrist position and often cast the commission’s tie-breaking votes. She supports Glick's idea. "Certainly it’s potentially within our legal bounds," LaFleur said. "I think ultimately the courts are very likely to decide that." Indeed, recent court rulings have indicated FERC should do more to contend with the emissions associated with fossil-fuel projects; currently, the agency requires most companies to list them but nothing more. “If you listen to what’s going on in the courts, we’re going to have to have carbon offsets or something like that at some point soon,” said one natural-gas executive who works closely with the agency. Experts say Glick's idea is unlikely to go anywhere, at least under GOP leadership in Washington.
Fracking likely to result in high emissions - Natural gas releases fewer harmful air pollutants and greenhouse gases than other fossil fuels. That's why it is often seen as a bridge technology to a low-carbon future. A new study by the Institute for Advanced Sustainability Studies (IASS) has estimated emissions from shale gas production through fracking in Germany and the UK. It shows that CO2-eq. emissions would exceed the estimated current emissions from conventional gas production in Germany. The potential risks make strict adherence to environmental standards vital.In the last ten years natural gas production has soared in the United States. This is mainly due to shale gas, which currently accounts for about 60 per cent of total US gas production. Shale, a fine-grained, laminated, sedimentary rock, has an extremely low permeability, which in the past made it difficult - and uneconomical - to extract.However, recent advancements in horizontal drilling and hydraulic fracturing have opened up previously unrecoverable shale gas reserves to large-scale, commercial production.In light of experiences in the US and dwindling conventional gas reserves, the debate on shale gas has also taken centre stage in Europe. The purported climate advantages of shale gas over coal and the implications for domestic energy security have made fracking in shale reservoirs an interesting prospect for many European countries. IASS researcher Lorenzo Cremonese led a study that investigated the greenhouse gas and air pollutant emissions (including carbon dioxide, methane, carbon monoxide, nitrogen oxides, particulates and other volatile organic compounds) expected to result from future shale gas production in Germany and the UK. While methane leakage rates for the optimistic scenario approximate official figures in national inventories, the rates for the realistic scenario exceed them by a large margin. The emission intensity of shale gas in electricity generation is up to 35 per cent higher than estimates of the current emission intensity of conventional gas in Germany. The study also questions the accuracy of methane leakage estimates for current conventional gas production.
Zoning ordinance tabled over hazardous pipeline concerns -A major update to Boyle County’s zoning ordinance was tabled again this week, after the grassroots group Citizens Opposed to the Pipeline Conversion raised concerns over how it would alter regulations for hazardous pipelines. “I think there are shortcomings in the proposed ordinance that were not thoroughly considered,” said Mark Morgan, a Danville attorney who has been a leader in the COPC. Boyle County’s P&Z regulations concerning hazardous materials in pipelines dates back to 2015. That’s when the COPC got the P&Z Commission to require any company wishing to pipe hazardous materials through the county to get a conditional-use permit. The move was intended to protect against a plan from Houston-based energy giant Kinder Morgan, which intended to use Tennessee Gas Pipeline No. 1 to transport “natural gas liquids” — highly explosive byproducts of oil fracking — from northern Ohio to the Gulf Coast. A Kinder Morgan representative admitted to COPC members and other local residents that it had chosen Pipeline No. 1 rather than trying to pipe the fracking byproducts along the eastern coast because the company thought it would face less opposition from a less educated, less activist population, Morgan alleged during Wednesday’s hearing. Instead, they ran into far more opposition than they imagined in Boyle County. Ultimately, Kinder Morgan abandoned its plan to repurpose the pipeline, which currently carries natural gas. “They said it was due to economic reasons, which I think is absolutely correct,” Morgan said. “I think we were one of the economic reasons.”
Green’ Coalition Asks Burlington Freeholders to Block SRL Pipeline - Foes of the Southern Reliability Link are turning to the Burlington County board of freeholders to put a stop to the project by denying the pipeline project a permit to build along its county roads. New Jersey Natural Gas is already building the nearly 30-mile pipeline through parts of the 1-million-acre Pinelands National Preserve, even though the issue is still tied up in ongoing litigation by opponents. A coalition of 23 conservation groups led by the Pinelands Preservation Alliance is asking the board to exercise its authority to deny any permit, in this case a construction approval, in the interest of public safety. “If the freeholders conclude that the proposed route is unsafe and unnecessary, it is entirely within the board’s authority to reject a permit and easement for the job,’’ the letter from the groups argued. The pipeline, initially approved back in 2016 by the state Board of Public Utilities and challenged in court, is designed to provide more dependable gas delivery to New Jersey Natural Gas customers should there be major disruptions in other pipelines crisscrossing the state.The issue has become increasingly heated and a major headache for the Murphy administration, as most of the state’s most prominent environmental groups are urging a moratorium on new fossil-fuel projects to curb significantly greenhouse-gas emissions in New Jersey. There are about nine gas-pipeline projects pending, as well as four proposed natural-gas power plants. Critics contend those projects are not needed, given the administration’s goal to transition to 100 percent clean energy by 2050.
Federal appeals court hears arguments in South Portland pipeline case - The city of South Portland is blocking the Trump administration’s push to promote cross-border transmission of crude oil from Canada to the coast of Maine, a lawyer for the Portland Pipe Line Corp. argued Tuesday in federal appeals court in Boston. The city’s attorney argued that if the court backs the company’s appeal, it would effectively create a nationwide exemption from zoning restrictions for any new oil pipelines installed anywhere, including in residential areas. The 1st U.S. Circuit Court of Appeals heard oral arguments Tuesday in the pipeline company’s effort to overturn a 2018 federal district court ruling that upheld South Portland’s 5-year-old Clear Skies ordinance. A ruling is expected in the coming weeks or months. The ordinance, approved by the South Portland City Council on July 21, 2014, effectively blocked the company from potentially reversing the flow of its pipeline to bring crude oil from western Canada to its shipping terminals on Portland Harbor. Since the company filed its lawsuit in February 2015, the city has spent $2.4 million defending the ordinance and received $173,603 in donations to its Clear Skies Legal Defense Fund. The company contends that the ordinance is preempted by state and federal law, violates the Commerce Clause of the Constitution and adversely impacts national and international oil trade. The clause gives Congress the power to regulate interstate and foreign trade. The company’s lawyer argued Tuesday that the city should not be allowed to block the Canadian-owned subsidiary of ExxonMobil, Shell and Suncor Energy from bringing crude into the United States from the pipeline’s northern terminus in Montreal.
Southbridge hires lawyer to address LNG plant proposed in Charlton - The Town Council has hired a lawyer to represent the town’s interest in a proposed and controversial $100 million liquid natural gas plant along Charlton’s energy corridor on Route 169. Liberty Energy Trust, operating under Northeast Energy Center LLC, seeks to construct an LNG plant on 12 acres at 304 Southbridge Road, Charlton, near Millennium Power, close to the Southbridge town line. The company wants to develop a plant that will liquify, store and load natural gas into trucks. The company is seeking exemptions from Charlton zoning bylaws. Approval has been sought from the state’s Energy Facilities Siting Board, an independent board that reviews proposed large energy facilities. On July 15, Town Council voted to appoint lawyer David McKay, an environmental specialist from the firm Mirick O’Connell. Mr. McKay will represent Southbridge as an intervener during the siting process.In an interview, Town Manager Ronald San Angelo said that councilors have been discussing just how involved the town wants to be in the case. “Southbridge has an interest because, even though the facility is not in Southbridge, God forbid something bad ever happened at that facility. We would be called to provide police and fire backup, and, because it’s so close to the line, it could have an impact on our residents,” Mr. San Angelo said. “The council wants to understand what the issues are in this case.”
Trump LNG rule: Will it address 'catastrophic' risks? -- For years, researchers have warned that stored materials at liquefied natural gas export facilities could pose a risk of catastrophic explosions and potentially be a threat to the public. But the issue is unlikely to be addressed when the Trump administration publishes a proposed revamp of the regulations governing LNG safety this September, according to industry watchers.Instead, the upcoming proposed rule from the Pipeline and Hazardous Materials Safety Administration (PHMSA), which oversees LNG facilities, is likely to focus on streamlining U.S. regulations and harmonizing them with those in other countries (Energywire, April 11).Additionally, a PHMSA-led working group on LNG safety in Baltimore last fall suggested it could take two years to fully assess an "evaluation protocol for non-LNG release hazards," according to a presentation on the agency's research and development priorities. That timeline would put action on the issue far beyond the intended release of updated rules."There is no process in place to evaluate the suitability of the software models to calculate these hazards," and work should be done to figure out how to assess the accuracy of such models, attendees at the Baltimore meeting concluded.The details of the rule could have long-lived safety implications, considering that multiple LNG terminals now on the drawing board in the United States will likely remain in service for decades.The United States has a dozen LNG import facilities that have been built over decades of domestic natural gas use, but the shale gas boom of the last 10 years has triggered a flurry of development around new export facilities. The first of those, Cheniere Energy Inc.'s Sabine Pass LNG terminal, began commercial operations in 2016, and by the end of this year, five more are expected to be up and running. Another six export projects are fully permitted, but developers have yet to announce plans to build.The PHMSA rule overhaul comes at the direction of an April executive order, in which President Trump highlighted the complete turnaround in the U.S. LNG industry."New LNG export terminals are in various stages of development, and these modern, large-scale liquefaction facilities bear little resemblance to the small peak-shaving facilities common during the original drafting of [the LNG rules] nearly 40 years ago," the executive order said.PHMSA's mandate for the overhaul is vague, saying only that the regulator should "update" the relevant portion of the federal codes and that the process "shall use risk-based standards to the maximum extent practicable." While it's uncertain what the agency will do to address explosion risk, it has acknowledged the issue.
NATURAL GAS: Cheniere to feds: Cold weather contributed to spill -- E&E News -- - Cheniere Energy Inc. says unusually cold temperatures on the Louisiana Gulf Coast in January 2018 played a role in leaks from its liquefied natural gas tanks discovered a few days later.
Offshore GOM Operators Returning to Normal - Offshore oil and gas operators in the Gulf of Mexico (GOM) are resuming normal operations following tropical storm Barry, according to the Bureau of Safety and Environmental Enforcement (BSEE). Of the 669 manned platforms in the GOM, a total of 20, or 2.99 percent, remained evacuated as of Saturday, BSEE revealed, citing data from offshore operator reports. This figure stood as high as 42.3 percent, or 283 platforms, on July 14. Personnel have returned to all previously evacuated non-dynamically positioned DP rigs in the region, according to BSEE. The organization estimates that approximately 3.32 percent of oil production and 7.35 percent of gas production in the GOM remained shut-in as of Saturday. On July 14, BSEE estimated that approximately 72.82 percent of GOM oil production and approximately 61.68 percent of GOM gas production was shut-in. “Now that the storm has passed, facilities will continue to be inspected,” BSEE said in a statement posted on its website on July 20. “Once all standard checks have been completed, production from undamaged facilities will be brought back online immediately. Facilities sustaining damage may take longer to bring back on line,” BSEE added.
Deepwater GOM Pipeline System Starts Up - Williams reported Wednesday afternoon that it has acquired and placed into service the 16-inch Norphlet deepwater gathering pipeline system constructed by Shell Offshore Inc. and CNOOC Petroleum Offshore U.S.A. Inc. According to a written statement from Williams, the Norphlet system extends 54 miles (87 kilometers) from the Shell-operated Appomattox Floating Production System (FPS) in 7,400 feet (2,256 meters) of water to the Transco Main Pass 261A junction platform. The Transco platform is located approximately 60 miles (97 kilometers) south of Mobile, Ala., and first gas delivery occurred on June 22, 2019, added Williams. “We are excited to participate in this Jurassic development with Shell and CNOOC,” Williams President and CEO Alan Armstrong said on his company’s behalf. “Shell has exhibited a tremendous history of successful large-scale developments across the Gulf of Mexico and early indications here are for that to continue in the Jurassic play with their additional discoveries.” Shell reported in May of this year that it had begun production from the Appomattox FPS, noting that the milestone heralded a “new frontier” for the deepwater U.S. Gulf of Mexico. The Norphlet system can gather an estimated 261 to 291 million cubic feet per day of natural gas and connects more than 33,000 acres of dedicated leases to Williams’ Mobile Bay processing facility via the Transco lateral at the Main Pass 261A platform, Williams stated. Also, the company noted the system features a spare subsea connector for additional FPS volumes and modifications at the Mobile Bay facility that expanded slug handling capacity by 118 percent and stabilizing capacity by 329 percent.
US GOM Drillship Market Picking Up Steam - The U.S. Gulf of Mexico drillship market is picking up steam, according to Westwood Global Energy Group. As of mid-July, marketed utilization of the 25-rig fleet stood at 96 percent, with 24 units either working or committed to begin contracts in the next few months, Westwood highlighted on its website. Contracted utilization in July 2018 stood at 76 percent. Westwood has predicted that utilization will remain in the 95-100 percent range, “assuming rig owners do not shoot themselves in the foot by mobilizing a large number of rigs to the region on speculation, something that has occurred a time or two in the past”. Last month, Westwood outlined that the global offshore rig market appears to have emerged from “one of the worst” downturns in its history. “Over the coming months and years, demand is expected to continue to increase as a backlog of delayed projects continues to be worked through and aging, under-spec rigs continue to be retired,” Westwood said in a statement posted on its website at the time. “Whilst, even in the most optimistic scenario, it seems unlikely that the offshore rig market will return to the heights of the previous upturn, there should no-doubt be cautious optimism,” Westwood added.
Oil, gas drilling plans for Gulf of Mexico concerns local representatives – More oil and gas drilling could start to happen in the Gulf of Mexico. The Department of the Interior says it plans to lease millions of acres for oil and gas exploration. While the Trump administration says it’s a safe way to make use of what the country has, critics say it brings the Gulf closer to an oil disaster. It’s been almost 10 years since the Gulf oil spill, but even now some are leery about allowing more drilling even though the administration says it’s safe and economically sound. Sail into the Gulf of Mexico and you may soon see more of oil rigs. The Department of the Interior says it plans to lease 77.8 million acres for oil and gas drilling starting in August. “It is a threat anywhere because you cannot ensure those rigs will be safe,” said U.S. Rep. Kathy Castor. The Florida Democrat isn’t happy with the announcement. “The BP deepwater horizon disaster proved the point that a spill anywhere in the Gulf of Mexico is detrimental,” Castor said. But in a statement, Secretary of the Interior David Bernhardt says the Trump administration “is laser-focused on developing our domestic offshore … resources in an environmentally conscious manner.” The department says any projects will have measures “to protect biologically sensitive resources (and) mitigate potential adverse effects on protected species.” “We don’t think the Trump administration is paying close attention to how the oil and gas industry operates in sensitive areas,” said Athan Manuel, director of the Sierra Club’s Lands Protection Program.
Industry group says jurisdiction battles steal resources from taxpayers, oil and gas companies - For several years, the state of Louisiana has been faced with numerous battles between parishes and the oil and gas companies over the topic of climate and coastal erosion; now, one judge’s decision has moved one of these lawsuits back to state court. Tyler Gray, president and general counsel of the Louisiana Mid-Continent Oil & Gas Association, believes the forum shopping by plaintiffs within the legal system is a flawed strategy that will only end in more damages to the state’s business climate and residents.“The ruling is another procedural step in the judicial process, which unfortunately takes time and resources away from what could be collaborative efforts working towards real solutions for our coast,” Gray told Louisiana Record. “As we’ve learned from the Levee Board lawsuit and many years of litigation involving this case, the solutions to securing our coast will not be found in the courtroom.” According to ClimateLiabilityNews.org, Judge Martin L.C. Feldman recently decided that the Plaquemines Parish’s lawsuit against the oil and gas industry should be returned to state court rather than being heard in federal court. Based on the parish’s allegations, the oil and gas industry has violated the Louisiana State and Local Coastal Resources Management Act by failing to repair the wetlands they have disrupted following industry operations. Following Feldman’s announced decision, the oil and gas industry has already decided that they will appeal it, in the hopes of returning to federal court. The situation as a whole is highly controversial, with some groups believing that this is a state matter that should be sorted within Louisiana jurisdiction, while others are fighting for a federal hearing, claiming that it has wider-spreading implications.
SOWELA receives $1 million for new TC Energy Pipeline Academy (KPLC) - A big announcement from SOWELA Technical Community College where they are getting a million-dollar donation and a new oil and gas pipeline training academy.It will be the first in the state and only the third in the nation.From process technology to nursing, SOWELA plays a major role in training the workforce for Southwest Louisiana. Now, SOWELA will have an outdoor training pipeline and academy for students to learn all facets of the industry. TC Energy has donated $1 million to fund it.“They actually will build an actual pipeline training loop. This is an actual real pipeline, it carries no material, but it will be built on campus so individuals can come and train on actual pipeline. There’s classroom equipment, they provide funding for the instructor, and some of the planning that million dollars will be used for,” said SOWELA Chancellor Neil Aspinwall. "Most of the petrochemical industries, the huge pipelines that enter and exit those facilities--someone has to maintain them, someone has to design them, someone has to fix them if something's wrong. So, there's wonderful jobs there, good paying jobs. So, this program will help train the workforce for this industry," said Aspinwall.
Permian Fracking Activity Underreported in 2018 - Operators in the Permian have been failing to report the completion of some oil wells, according to one data analytics company. Hydraulic fracturing (fracking) activity was underreported by 21 percent in the U.S.’ most prolific basin in 2018, according to Kayrros, a data analytics company serving the energy markets. In findings released Tuesday, Kayrros claims that more than 1,100 wells were completed in the Permian Basin but not reported through state commissions or FracFocus – a public repository for information on chemicals used during fracking. Kayrros said it uses optical and synthetic aperture radar imagery tracking along with proprietary algorithms to identify rigs and frack crews. Using those methods, they counted a total of 6,394 completed wells in the Permian in 2018 – a 21 percent increase from the FracFocus estimate of 5,272 wells as of June 20, 2019. The discrepancy in the reported wells means the industry has failed to capture the full scale of fracking, Kayrros contends. This implies two things:
- Oil inventory is smaller than believed – Kayrros estimates the Permian’s drilled but uncompleted (DUC) wells inventory is 1,000 wells each month with most of the rolling inventory coming from regular drilling and completions operations. Over time, the number of drilled wells matches completed wells, leaving DUC inventories unchanged. The belief that shale operators have a large backlog of DUCs that can quickly be brought to production in the event of an oil crisis without further drilling is misleading
- Transformation of perception of light tight oil economics – Based on Kayrros’ measurements, the average well is less productive and of higher cost than what is reflected in public data
“For all its revolutionary impact on the oil industry, shale remains poorly understood,” Kayrros chief analyst and cofounder Antoine Halff said in a release sent to Rigzone. “Publicly available data based on old-fashioned company reporting have their limits. Hard measurements unlocked by new data technologies show that contrary to public belief, there is no great buildup of DUCs just waiting to be brought online. The whole idea that the market can rely on this sort of de facto spare production capacity is an illusion. The industry is actually running on a much tighter leash than that.”
Historic horizontal well in Permian Basin completed (AP) — Drilling of the longest horizontal oil and gas well in the history of the Permian Basin has been completed as booming oil production in the region continues to center around shale in southeast New Mexico and West Texas. The Fort Worth, Texas-based Basic Energy Services recently announced the well was completed in the Wolfcamp, The Carlsbad Current-Argus reports . Wolfcamp is shale of the Delaware Basin, which sits below most of New Mexico’s Eddy County and the southern half of the state’s Lea County. Records show the well also encompasses portions of Culberson, Reeves and Loving counties in Texas. The job was completed for Houston-based Surge Energy, and frac plugs were drilled out to around 3.4 miles (5.4 kilometers). “We are honored to partner with an innovative (exploration and production) company like Surge to deliver these record-setting results,” said Brandon McGuire, vice president of Basic’s Permian operations. “Reaching this milestone with our customer displays our leadership in well servicing for complex, long lateral completions in the Permian Basin.”
Electric Fracking Could Take Over The Permian -- Shale production in West Texas continues to boom--so much so that shale oil and gas producers in the Permian Basin have more than they know what to do with. As production continues to outpace the expansion of sorely needed pipeline infrastructure, local operators in the Permian are letting approximately 104 billion cubic feet of natural gas go to waste each year by flaring, what is essentially just burning the gas away, instead of putting it on market. For many producers in the Permian, this has led to diminishing profits. One such company is Houston-based oilfield service company Baker Hughes. The company’s first quarter profit also took a nosedive, clocking in at $32 million--less than half of its profits for the same period a year earlier, when Baker Hughes reported a profit of $70 million. On top of this major decline in profits, last month the company “ reported negative free cash flow for the first quarter at a time energy investors have been pushing companies to aggressively shore up capital for dividends and buybacks, sending its shares down as much as 8.5 percent” according to Reuters. However, despite these dismal numbers, things are looking up for Baker Hughes. CEO Lorenzo Simonelli told investors in a call on Tuesday that he sees all of the burned off natural gas wasted by his company and so many others as a byproduct of their oil drilling as a major business opportunity. The company is debuting a new, cutting-edge technology that will harness this otherwise wasted gas to power their hydraulic fracturing equipment in the Permian Basin in West Texas. Simonelli announced to investors this week that his company will be forging a new path in fracking by introducing a revolutionary fleet of “electric frack” turbines that will “use excess natural gas from a drilling site to power hydraulic fracturing equipment — reducing flaring, carbon dioxide emissions, people and equipment in remote locations” according to reporting by the Houston Chronicle. During a Tuesday call with investors Simonelli characterized the new strategy as an across-the-board win for their customer base, saying, “We’re solving some of our customers’ toughest challenges such as logistics, power and reducing flare gas emissions with products from our portfolio.”
Second Round of Lawsuits Targets Permian Highway Pipeline - A second round of lawsuits are underway in an effort to stop a massive natural gas pipeline from running right through the Texas hill country. Hays County is teaming up with landowners and conservation groups, threatening to sue the U.S. Army Corp of Engineers, the U.S. Fish and Wildlife Service and Kinder Morgan. Now, the energy giant behind the project is firing back. San Marcos resident Rachel Haggard is worried the proposed Permian Highway Pipeline could threaten her favorite, natural swimming spot. "No matter what kind of precautions you take, there's always a risk of pollution," said Haggard. The worry extends beyond the banks of the river. Signs protesting the project can be found all around town. A failed round of lawsuits by opponents have inspired a second round. This time, Attorney David Smith is representing groups targeting Kinder Morgan's permitting process. "They're doing less than the bare minimum," said Smith. Smith claims the energy giant behind the project has applied for permits that only cover about three percent of the 430-mile natural gas pipeline. "What Kinder Morgan wants to do, is they want to get Fish and Wildlife Service's blessing, coverage, if you will, for the entire pipeline," said Smith.
Pipeline operator sues to block Kyle regulations - - Kinder Morgan, a pipeline operator working to build a 430-mile natural gas line slicing across Hays County, has asked a federal judge to block a Kyle ordinance that regulates the construction and operation of pipelines in the city.The lawsuit argues that the Kyle regulations, enacted three weeks ago, violate federal and state law and should be struck down. ″(Kyle officials) passed the ordinance that runs roughshod over federal and Texas law, ignores the regulatory schemes that have been in place for decades, and imposes criminal penalties for alleged violations,” said the lawsuit, filed Monday in Austin. Houston-based Kinder Morgan also filed a complaint with the Texas Railroad Commission, a state agency that regulates pipelines, arguing that the Kyle ordinance subjects pipeline operators to excessive fees and should be invalidated. The lawsuit, the latest in a series of legal battles over the Permian Highway Pipeline, was “not unexpected,” Kyle Mayor Travis Mitchell said. “We will confer with our legal team in the coming days and decide the best course of action,” Mitchell said.Last week, Hays County, the Travis Audubon Society and three landowners notified Kinder Morgan that they intend to file a federal lawsuit seeking to stop construction of the Permian Highway Pipeline, a $2 billion project designed to transport natural gas from the Permian Basin to the Gulf Coast.The 60-day notice of a potential lawsuit, required by federal law, argued that Kinder Morgan failed to obtain permits needed under the Endangered Species Act and other U.S. laws to run a 42-inch pipeline — expected to move 2 billion cubic feet of natural gas a day — through environmentally sensitive areas in Central Texas and the Hill Country. In addition, a separate lawsuit filed in state court argued that the pipeline will be dangerous and that the Railroad Commission failed to create a proper permitting process before allowing land to be condemned for the project.
Wisconsin tribe sues Enbridge, claims Line 5 trespassing on reservation - - A Wisconsin tribe wants a federal judge to remove Enbridge Energy’s Line 5 from their reservation on claims the Canadian company is trespassing and endangering their lands. The Bad River Band of Lake Superior Chippewa filed the lawsuit against Enbridge on Tuesday, July 23, in federal court in Madison, Wisconsin. The suit seeks a court order for Enbridge to stop using the pipeline and remove it from their lands. The tribe claims in the suit that Enbridge continues to operate its Line 5 oil and gas pipeline on the reservation with easements that expired in 2013. The 125,000-acre Bad River Reservation is located about 20 miles west of Ironwood, Michigan. Built in 1953, Line 5 runs 645 miles from Superior, Wisconsin, to Sarnia, Canada, by way of Michigan. The potential environmental dangers by its crossing in the Straits of Mackinac has been the continued focus of activists, Gov. Gretchen Whitmer and Attorney General Dana Nessel. In late June, Nessel filed a lawsuit to shut down the Straits’ crossing. In January 2017, Bad River Band leaders passed a formal resolution not to renew Enbridge’s right-of-way easements for Line 5 and called for the pipeline’s removal. The tribe says that 15 right-of-way easements for Line 5 expired in 2013. They own interest in 11 of those 15 properties that the pipeline crosses. Since early 2017, the tribe “has been collecting and reviewing environmental, water and pipeline data to further assess the danger posed by the pipeline,” according to a statement. They also engaged Enbridge in a “failed multi-year mediation process.”The tribe discovered that the Bad River is migrating quickly toward an area where a portion of Line 5 is buried, presenting a “looming disaster." “The river is carving away the banks and soils that stabilize and support the aging pipeline,” the tribe’s lawsuit states. “This relentless process will soon expose Line 5 to the full force of the river’s currents and the load of fallen trees and other debris conveyed by the river.”
PUC asks Minnesota Supreme Court to deny Line 3 challenges (AP) — Minnesota regulators have urged the state Supreme Court to deny challenges by opponents of Enbridge Energy’s proposed Line 3 oil pipeline replacement who say the project’s environmental review was flawed.The Public Utilities Commission told the Supreme Court Tuesday it believes the review was “adequate in all respects.”Enbridge wants to replace its existing Line 3 across northern Minnesota, which dates from the 1960s, because it’s deteriorating and runs at only half its original capacity. The Minnesota Court of Appeals upheld most of the environmental impact statement last month, but sent the case back to the PUC for further proceedings because the review did not address a possible spill in the Lake Superior watershed.
New Study Suggests Living Near Oil Fields Could Cause Birth Defects In Babies - A new study has determined that families living near oil and gas fields have a 40 to 70% higher probability of having their children develop congenital heart defects (CHDs) compared to those living at greater distances, reported CU Anschutz Today."We observed more children were being born with a congenital heart defect in areas with the highest intensity of oil and gas well activity," said the study's lead author Lisa McKenzie, Ph.D., MPH, of the Colorado School of Public Health at the University of Colorado Anschutz Medical Campus. More than 17 million Americans and 6% of Colorado's total population live within one mile of an active drilling rig. The study was published last Thursday in the peer-reviewed journal Environment International, studied 3,324 infants born in Colorado between 2005 to 2011. Researchers studied infants with several types of CHDs. CHD is one of the most common birth defects in the country and a leading cause of death among infants. Infants with CHD have low rates of survival due to severe developmental problems and are more vulnerable to brain injury. McKenzie's study comes after a paper that analyzed 124,842 births in rural Colorado between 1996 to 2009 and discovered that CHDs occured near oil and gas drilling facilities. Another study in Oklahoma studied 476,000 births, found several variants of CHDs near oil wells. Anschutz Today noted that the studies had several issues, including not being able to identify correctly if an oil and gas facility was in the development or production phase, and researchers didn't confirm specific CHDs by reviewing all medical records."We observed positive associations between odds of a birth with a CHD and maternal exposure to oil and gas activities...in the second gestational month," the study researchers said.The new study discovered that rural areas with high active oil and gas activity are the epicenter of CHDs rather than in urban areas. What's not entirely understood by researchers are how toxic chemicals lead to CHDs. McKenzie said the study doesn't exactly prove a causal relationship between the various stages of an oil and gas drilling rig and that another study will be completed soon.
Cause of pipeline produced water spills unknown (AP) — North Dakota health officials still don’t know the cause of a pair of pipelines spills last week that leaked oilfield wastewater into a tributary of the Missouri River and another that spread over pastureland. high levels of lead, ammonium and other contaminants in surface waters affected by recent wastewater spills in the Bakken oilfield region. (AP Photo/Tyler Bell, File)State environmental scientist Bill Suess (sees) says Tuesday that cleanup of the “produced water” is ongoing at the two spill sites.The spills were reported by Polar Midstream. The company on July 14 reported a 20,000-gallon spill east of Williston and about a mile from Lake Sakakawea, the largest reservoir on the Missouri River.Suess says investigators don’t think the spill reached the river.The second spill leaked more than 12,000 gallons of wastewater, impacting an unknown amount of pastureland. Company spokesman Zak Covar says the cause isn’t known. He says the focus is on cleanup.
Company says work on old well may have caused spill (AP) -- Chevron says an 800,000-gallon oil spill in Central California may have started when crews tried to recap an abandoned well. KQED News says the company held a briefing Friday about the seepage that began in May in a Kern County oil field west of Bakersfield. Chevron says it believes the spill stemmed from efforts to remove aging cement plugs from its non-producing wells and replace them. The company says that the initial flows came from a previously damaged well that was being re-entered. Chevron says more oil spilled in June when crews did pressure tests and later tried to complete the job of replacing cement in the well. Chevron says the oil has only fouled about an acre of land and 90 percent of the spilled material has been recaptured.
Chevron injected steam near well work before oil leak...- Chevron records show the large, McKittrick-area oil leak that has shone an unflattering light on Kern County petroleum production probably originated with an idle well being worked on at the same time the company was injecting high-pressure steam just 360 feet away, a combination that industry people say should not have been performed simultaneously in such close proximity and which possibly contributed to the release. The San Ramon-based oil producer told state regulators in a recent written analysis that a well it was using to put steam into the Cymric Oil Field was not switched from injections to production mode until 7½ hours after the company noticed oil seeping to the surface at 5:30 a.m. on May 10. Observers within the industry said that timeline suggests steam injection activity was happening at the same time Chevron had opened up and was "re-abandoning," or resealing, a well idled in 2004. The problem with steaming a well near concurrent work on another well, people familiar with local oil fields say, is that there's a chance steam will make its way through uncharted channels underground before coming to the surface in an area not outfitted to receive oil. Several people interviewed said Chevron should have "shut in" — meaning turned off — the steam injection well that state maps show lies 360 feet from the surface of a well the company blames for several thousand barrels of oil ending up in a dry creek bed during a series of uncontrolled releases near McKittrick. "I definitely would say they need a 600-foot shut-in radius if they are doing a re-abandonment," said Bakersfield geologist Burton R. "Burt" Ellison, former district deputy at the California Division of Oil, Gas and Geothermal Resources, the state's primary oil regulatory agency. Others, noting the complexity of subsurface conduits in western Kern oil fields, said it's hard to say what a safe distance would have been in this case, and that additional nearby wells may have played a role in the leak. But they still questioned the wisdom of steaming so close to a well undergoing work.
US Oil Exports Reach New All-Time High - U.S. crude oil exports reached a new all-time high of 3.3 million barrels per day (MMbpd) in June.That’s according to the American Petroleum Institute’s (API) latest monthly statistical report released Thursday, which highlighted that the record exports helped reduce U.S. net petroleum imports to 1.3MMbpd.Total U.S. petroleum exports for the month were at 8.4MMbpd, according to the report, which noted that this was a record for June. This was said to be an increase of 3.6 percent from May and 7.9 percent from June last year.Record U.S. crude oil production of 12.2 MMbpd was sustained in June “despite less drilling”, according to the report.“The U.S. appears to be making substantive progress towards becoming a net energy exporter in 2020, as projected by the EIA, with production continuing to sustain its upward climb despite oil prices having declined 10 percent between May and June,” API Chief Economist Dean Foreman said in an organization statement.“This trend has been driven in part by increasingly low breakeven prices, strong productivity gains in key production regions and the incremental additions of new pipeline infrastructure needed to bring these resources to market,” he added.Back in June, the API revealed that in May, U.S. petroleum exports and crude oil productionsaw records. In its second quarter industry outlook report, also released in June, the API said the United States was poised for a continuation of record oil production. This report also highlighted that while U.S. crude oil export capacity has been “sufficient”, some capacity estimates suggest “some urgency to plan forward”. The API describes itself as the only national trade association representing all facets of the natural gas and oil industry. The organization, which was formed in 1919, has more than 600 members.
Despite Shale Success US Oil Imports Remain High - U.S. oil demand over the past decade has remained in the 19-21 million b/d range. Crude oil production, meanwhile, has soared 150 percent to ~12.3 million b/d. As such, it would seem safe to assume that U.S. oil imports have plummeted in the shale-era since 2008. Interestingly though, this has not exactly been the case. Although declining, the U.S. still imports huge amounts of oil. In 2018, for instance, the U.S. imported 9.9 million b/d of crude oil and petroleum products from nearly 90 countries, albeit down from ~13 million b/d in 2008. Imports of crude over that time have fallen from 10 million b/d to 7 million b/d so far this year. So despite domestic production continuing to break records, the U.S. still imports 10 percent of the world’s total oil consumption. There are a variety of reasons why the U.S. still imports high volumes of petroleum. The primary reason is that the U.S. shale oil boom has yielded loads of high-quality, light, and sweet oil that has a higher API gravity. The U.S. refining system, however, is generally configured to process the lower quality, heavier, and sourer oil that the country has been importing from Canada, Venezuela, and Mexico for many decades. It would therefore be uneconomical to run refineries solely on the domestic tight oil that has been flowing from U.S. shale plays. In addition, the U.S. needs a variety of oil types to make different products. The boom in domestic oil production is not precisely yielding all those required to make all of the products that Americans use. Further, oil production, access, refining, and demand differ geographically. There are numerous parts across the country that lack pipeline access to the booming U.S. production zones, such as the Bakken play in North Dakota and the Permian in West Texas. They are removed from most of the infrastructure to access oil, as well as refine and transport liquid fuels, located in the mid-continent and Gulf Coast regions. Distant California, for instance, which now imports 60 percent of its crude, retains Saudi Arabia, Ecuador, Colombia, and Iraq supplying nearly 75 percent of imports.
Halliburton's Profits Take a Hit in 2Q - Halliburton Company saw its second quarter profits take a dip as its international operations saw improvements. Net income attributable to the Houston-based oilfield services company dropped to $75 million in the second quarter (equivalent to nine cents per share), down from $511 million one year earlier and $152 million in the first quarter of 2019. Revenues for second quarter were $5.93 billion, down from $6.15 billion one year earlier, but up from $5.74 billion in the first quarter of 2019. North America is Halliburton’s largest market and it had $3.33 billion in revenue for the quarter. This is down from $3.83 billion from one year earlier. Bloomberg reported on Monday that Halliburton cut its North American workforce by eight percent in the second quarter. The company saw revenue gains in the second quarter from its international markets. Revenues for Latin America were $571 million, up from $479 million one year ago; Europe/Africa/CIS revenues were $823 million, up from $726 million one year ago and Middle East/Asia revenues were $1.21 billion, up from $1.11 billion one year ago.
US Drops Eight Oil, Gas Rigs - The U.S. dropped five oil rigs and three gas rigs for a net loss of eight rigs this week. The U.S. dropped five oil rigs this week and three gas rigs for a net loss of eight rigs, according to weekly data from Baker Hughes, a GE Company.This week’s declines bring the nation’s total number of active rigs to 946 – down 102 from the count of 1,048 one year ago. North Dakota saw the most declines this week, dropping eight rigs. Several other states experienced their rig counts drop. They are:
- Louisiana (-4)
- Ohio (-2)
- Oklahoma (-2)
- Alaska (-1)
- West Virginia (-1)
Wyoming added four rigs, while New Mexico added two and California, Colorado, Kansas and Utah each added one rig. Among the major basins, the Williston led this week in declines with eight rigs. The Marcellus and Utica each dropped two rigs while the Eagle Ford dropped one rig.The Permian added three rigs. Currently, the Permian has 443 active rigs, which accounts for almost half of the nation’s active rigs. The DJ-Niobrara added two rigs while the Ardmore Woodford and Arkoma Woodford added one rig apiece.
CEO of Major Shale Oil Company 'Has Second Thoughts' on Fracking Rush, Wall Street Journal Reports – On Monday, the Wall Street Journal featured a profile of Scott Sheffield, CEO of Pioneer Natural Resources, whose company is known among investors for its emphasis on drawing oil and gas from the Permian basin in Texas using horizontal drilling and hydraulic fracturing, or fracking.Back in 2014, Sheffield told Forbes that he expected Pioneer could produce a million barrels of oil a day from the Permian basin by 2024 — up from 45,000 barrels a day in 2011.Now, Sheffield, who left the helm of Pioneer in 2016 and returned this February, says that those million-barrel-a-day plans are looking increasingly doubtful as the industry has struggled to prove to investors that it’s capable not only of producing enormous volumes of oil and gas, but that it can do so while booking profits rather than losses.“We lost the growth investors,” Pioneer CEO Scott Sheffield told the Journal. “Now we’ve got to attract a whole other set of investors.”Sheffield’s comments on the shale oil industry’s fiscal difficulties come on the heels of a warning from the former CEO of the country’s largest natural gas producer about the shale gas industry’s financial distress.Steve Schlotterbeck, former CEO of America’s largest producer of natural gas, described the impact over a decade of fracking on Marcellus shale drilling companies at a recent petrochemical industry conference.“In a little more than a decade, most of these companies just destroyed a very large percentage of their companies' value that they had at the beginning of the shale revolution,” he said, in remarks reported by DeSmog on Sunday. “Excluding capital, the big eight basin producers have destroyed on average 80 percent of the value of their companies since the beginning of the shale revolution.”Doubts about the shale drilling industry’s financial prospects have simmered nearly as long as the industry has been producing oil and gas. “There is undoubtedly a vast amount of gas in the formations,” the New York Times reported in 2011, citing concerns among industry insiders dating back to 2009. “The question remains how affordably it can be extracted.”In the years since, shale drillers churned out massive volumes of fossil fuels, first shale gas then shale oil, pushing American oil production up 12 million barrels a day, according to Energy Information Administration figures cited by The Journal. At the same time, they have spent hundreds of billions of dollars more than they’ve earned from selling the fossil fuels they drew from the ground.
Shale Drilling's Worst Yet to Come-- America’s biggest owner of drilling rigs fell the most in seven months after the chief of Helmerich & Payne Inc. said he called the bottom too soon. Three months ago, when Helmerich had 220 of its rigs hired out, Chief Executive Officer John Lindsay told investors the second quarter would be the nadir for his fleet. But after the number of Helmerich rigs at work shrank to 214 a few weeks ago, Lindsay says his earlier projection was “premature.” “The full effect of the industry’s emphasis on disciplined capital spending continues to reverberate through the oil field services sector,” he said in a Wednesday statement. “We are reluctant to predict another bottom and see further softening during our fourth fiscal quarter as our guidance would indicate.” The hired hands of the shale patch who drill and frack wells are suffering from a slowdown in North American spending brought on by investor demands for higher returns. The U.S. oil rig count has fallen 11% this year, according to Baker Hughes. Fracking giant Halliburton Co. is eliminating jobs and warehousing equipment no one wants to rent. Superior Energy Services Inc. said earlier this week that it’s looking for ways to cut costs and may sell assets to raise cash. On Thursday, 28 of the 29 oil and gas industry stocks in the S&P 500 Index were falling. The frack market “is a mess,” Brad Handler, an analyst at Jefferies LLC, wrote in a note to clients. “With every passing datapoint/call, there is little to suggest this market gets any better, and so we hack away at numbers again.” Helmerich’s smaller rival Patterson-UTI Energy Inc. also cut its forecast. The Houston-based contractor said in an earnings statement it expects to run 142 rigs on average during the third quarter, down 10% from the previous three-month period.
U.S. Shale Is Doomed No Matter What They Do - With financial stress setting in for U.S. shale companies, some are trying to drill their way out of the problem, while others are hoping to boost profitability by cutting costs and implementing spending restraint. Both approaches are riddled with risk. “Turbulence and desperation are roiling the struggling fracking industry,” Kathy Hipple and Tom Sanzillo wrote in a note for the Institute for Energy Economics and Financial Analysis (IEEFA). They point to the example of EQT, the largest natural gas producer in the United States. A corporate struggle over control of the company reached a conclusion recently, with the Toby and Derek Rice seizing power. The Rice brothers sold their company, Rice Energy, to EQT in 2017. But they launched a bid to take over EQT last year, arguing that the company’s leadership had failed investors. The Rice brothers convinced shareholders that they could steer the company in a better direction promising $500 million in free cash flow within two years. Their bet hinged on more aggressive drilling while simultaneously reducing costs. Their strategy also depends on “new, unproven, expensive technology, electric frack fleets,” IEEFA argued. “This seems like more of the same – big risky capital expenditures.” EQT’s former CEO Steve Schlotterbeck recently made headlines when he called fracking an “unmitigated disaster” because it helped crash prices and produce mountains of red ink. “In fact, I'm not aware of another case of a disruptive technological change that has done so much harm to the industry that created the change,” Schlotterbeck said at an industry conference in June. IEEFA draws a contrast between Schlotterbeck and the Rice brothers. While the latter wants advocates a strategy of stepping up drilling in an effort to grow their way out of the problem, the former argues that this approach has been tried over and over with poor results. Instead, Schlotterbeck said that drillers need to cut spending and production, which could revive natural gas prices. But while the philosophies differ – relentless growth versus restraint – IEEFA argues that “neither of these strategies seem viable.” On the one hand, natural gas prices are expected to stay below $3 per MMBtu, a price that is unlikely to lead to profits, IEEFA says. That is especially true if shale companies aggressively spend and produce more gas. However, a strategy of restraint may not work either. “[E]ven if natural gas producers coordinate their activities and reduce supply—a highly unlikely prospect—Schlotterbeck’s expectation that natural gas prices would inevitably rise is questionable,” IEEFA analysts wrote.
Is a Mature Mexican Gas Market Within Reach? -Once providing over 40 percent of federal revenues, oil production has been cut in half to below 2 million barrels per day since peaking in 2004. Longtime oil-based Mexico is increasingly turning to natural gas to meet its rising energy needs. The goal has been to displace higher cost oil in both the power and industrial sectors. Once providing over 40 percent of federal revenues, oil production has been cut in half to below 2 million b/d since peaking in 2004. Mexico per capita uses just a third of the electricity that OECD partners use, so more generation is a national priority. For example, despite having 40 percent of the population that the U.S. has, Mexico uses just 10 percent of the gas. Mexico already uses gas for nearly 65 percent of its power generation, and the majority of new builds will be gas. Meanwhile, the sudden cancelation of the 4th long-term power auction in February signifies a fading focus on renewables from the AMLO administration that took office in December. With 75 percent of Mexico’s gas production coming as associated to crude, the domestic gas supply has also been plummeting. In turn, excluding that used by state-owned oil company Pemex, over 90 percent of the gas consumed in Mexico is imported, the vast majority of which comes from the U.S. And this can only increase: for a variety of technical, political, and security reasons, the development of Mexico’s 550 Tcf of EIA-reported recoverable shale gas remains many years away.
Venezuela’s Oil Production Could Soon Fall Below 500,000 Bpd - Venezuela, the country sitting on the world’s largest oil reserves, could be pumping as little as below 500,000 bpd of crude oil next year amid the economic and political crisis, IHS Markit said in an analysis on Tuesday.The sweeping sanctions that the United States imposed on Venezuela’s oil industry have failed to result in a regime change nearly six months after opposition leader Juan Guaidó declared himself interim president and won the support of the U.S. and many other western nations.According to IHS Markit, Venezuela’s oil industry has deteriorated so much since 2014 that any recovery would be a long time coming. The protracted political crisis also means that the military and Maduro’s regime will intensify the stick-and-carrot approach to foreign investors, with whom Venezuela’s state oil firm PDVSA has joint ventures to produce heavy oil, Ford Tanner, a Principal Analyst at IHS Markit, says.“The official use of hostility and inducement toward foreign E&P companies is expected to intensify amid a new phase of collapsing oil production,” Tanner said.The U.S. sanctions on diluents that Venezuela needs to dilute its super heavy crude to make it flow for exports, as well as the U.S. pressure on buyers of Venezuelan oil, are expected to further constrain production, exports, and oil revenues in Venezuela, and crude oil production could drop below 500,000 bpd in 2020, according to Tanner. In the latest Monthly Oil Market Report, OPEC’s secondary sources—the ones the cartel considers the official production figures—point that Venezuela’s crude oil production in June dropped by 16,000 bpd from May to stand at 734,000 bpd. To compare, Venezuela’s crude oil production in 2017 averaged 1.911 million bpd. Despite the economic collapse, Venezuela’s crude oil and refined oil products exports rose by 26 percent in June compared to May, thanks to higher shipments under oil-for-loan deals with China.
Chevron Gets Approval to Keep Producing Oil in Venezuela -- Chevron Corp. and four oil services companies won U.S. government approval to continue producing oil in Venezuela despite sanctions placed on the crisis-stricken country. The extension of a waiver from sanctions will keep San Ramon, California-based Chevron’s joint venture with state-owned Petroleos de Venezuela SA running for another three months, the U.S. Treasury Department’s Office of Foreign Assets Control said in a statement Friday. The waiver, previously due to end on July 27, will now last until Oct. 25. Oilfield service companies Schlumberger Ltd., Halliburton Co., Baker Hughes and Weatherford International Plc were also allowed to continue their work in Venezuela for three months. While Venezuela only accounted for 1% of Chevron’s global crude production last year, it remains strategically important. The company is the only major U.S. producer still operating in the country, which has the world’s largest oil reserves. In recent months, Chevron made the case to the Trump administration that if it were to leave, its Venezuelan assets could be turned over to another operator. That could mean the state, or even Russian or Chinese interests. The U.S. has refused to recognize Nicolas Maduro as Venezuela’s president after an election last year. Financial sanctions have become its main tool for depriving Maduro of cash and pressuring the military to turn against him. Earlier this week, Venezuela’s opposition-led National Assembly issued a decree that guaranteed Chevron’s assets in the country would be protected under a new government led by Juan Guaido. Oil purchases from Venezuela have become complicated since the U.S. expanded its sanctions regime to include any business done with PDVSA, as the national oil company is also known. Other companies, including Spain’s Repsol SA and Italy’s Eni SpA, continue to do business with Venezuela. Chevron has operated in Venezuela for almost a century, since the discovery of the Boscan field in the 1920s. It has outlasted Exxon Mobil Corp., which left the country after a series of industry nationalizations during Hugo Chavez’s tenure as president.
Petrobras Ordered to Fuel Stranded Iranian Ships-- A Brazilian top court justice ordered Petroleo Brasileiro SA to refuel two Iranian ships stranded off the country’s cost after the state-controlled oil company refused to do so for fear of U.S. sanctions. Petrobras, as the Rio de Janeiro-based oil giant is known, will comply with the decision, a person close to the company said. The producer has said it may face “significant losses” if included under U.S. sanctions. A spokesman for Justice Dias Toffoli, who ruled on the matter, declined to comment because the case was filed under seal. The two ships have been floating since early June off the port of Paranagua, about 450 kilometers (280 miles) south of Sao Paulo, one of them loaded with corn bound to Iran. The Islamic republic, which buys one third of all of Brazil’s corn exports, had threatened to cut its imports from the country unless the ships were refueled. While Brazil has a long history of good relations with Tehran, President Jair Bolsonaro’s commitment to ripping up the country’s traditional foreign policy to side with U.S. President Donald Trump has put those ties in doubt. On Sunday, Bolsonaro told reporters Brazil was “aligned” with the U.S. policies, including on Iran. Iran and the U.S. have been at loggerheads since last year, when Trump withdrew the U.S. from a 2015 nuclear agreement with the Islamic republic, calling it the “worst deal ever.” The fate of the vessels is the latest evidence of how the Trump administration’s policies are affecting other countries and rattling commodities markets across the globe.
YPF Makes Deal to Ship Argentine LNG -- YPF has reached a preliminary agreement with Excelerate Energy L.P. to charter a second liquefied natural gas (LNG) carrier to transport Argentine LNG to the global market, Excelerate reported Thursday. Excelerate stated that its carrier Excalibur will transport LNG from the Tango floating LNG (FLNG) unit – located at the port of Bahia Blanca, Argentina – to the world market. The company added that it will be executing the final agreement with YPF “in the coming days” and that operations should start in early September. “We continue progressing in our ambition to add value to Argentine natural gas and to export surpluses during these months of low local consumption, to fully extract the potential as producer and exporter of Argentine natural gas,” Marcos Browne, executive vice president of Gas and Energy at YPF, said in a written statement distributed by Excelerate. The majority of the natural gas processed by Tango FLNG will originate from Argentina’s Vaca Muerta shale formation. After processing, it will be transported to the Excalibur LNG carrier for export. Excelerate noted that loading YPF’s product onto Excalibur will take approximately 45 days and that the vessel will be in the service of YPF until May 2020.
$7.6B Russia LNG Contract Goes to TechnipFMC - Novatek and its partners in the Arctic LNG 2 project have awarded TechnipFMC an engineering, procurement and construction (EPC) contract for the development on the Gydan peninsula in West Siberia, Russia, TechnipFMC reported Tuesday afternoon. According to a written statement TechnipFMC emailed to Rigzone, the development will comprise three liquefaction trains installed on three gravity-based structure platforms. Each train will be capable of producing 6.6 million tons per annum (mtpa) of LNG, added the company, which will execute the project on a lump sum and reimbursable basis. The consolidated Arctic LNG contract – valued at $7.6 billion – covers the EPC of the three LNG trains and associated topsides, which will be manufactured on a modular basis in Asian and Russian yards, TechnipFMC noted. Novatek owns a 60-percent stake in Arctic LNG 2. The other project parcticipants, each holding a 10-percent interest, include Total, China National Petroleum Corp. (CNPC), CNOOC Ltd. and the Mitsui and Co.-Japan Oil, Gas and Metals National Corp. consortium Japan Arctic LNG, according to Novatek’s website. The website also notes that Arctic LNG 2 will liquefy gas from the Utrenneye field, which under the Russian reserves classification system holds approximately 2 trillion cubic meters of natural gas and 105 million tons of liquids.
The Suez Canal and SUMED Pipeline are critical chokepoints for oil and natural gas trade – EIA - The Suez Canal and the SUMED Pipeline are strategic routes for Persian Gulf crude oil, petroleum products, and liquefied natural gas (LNG) shipments to Europe and North America. Located in Egypt, the Suez Canal connects the Red Sea with the Mediterranean Sea, and it is a critical chokepoint because of the large volumes of energy commodities that flow through it.Chokepoints are narrow channels along widely used global sea routes that are critical to global energy security. Total oil flows through the Suez Canal and the SUMED pipeline accounted for about 9% of total seaborne traded petroleum (crude oil and refined petroleum products) in 2017, and LNG flows through the Suez Canal and the SUMED pipeline accounted for about 8% of global LNG trade. Since 2016, growth in northbound total petroleum flows through the Suez Canal and the SUMED pipeline has slowed, and southbound flows through the canal have risen substantially. In particular, the Suez Canal is gaining importance as a southbound route for U.S. and Russian crude oil and petroleum products to destinations in Asia and the Middle East. Slightly more than half of total petroleum transiting the Suez Canal in 2018 was sent northbound to destinations in Europe and North America. Petroleum exports from Persian Gulf countries, such as Saudi Arabia, Iraq, and Iran, accounted for 85% of Suez Canal northbound traffic. Northbound flows of petroleum products have risen in recent years, particularly as more ultra-low sulfur diesel fuel has been shipped from Saudi Arabia to European countries. Northbound crude oil flows decreased in 2018 for several reasons:
- Higher U.S. crude oil exports displaced Persian Gulf crude oil that had been historically sent to Europe.
- Key Middle East producers, mainly Saudi Arabia and Iraq, have been increasing crude oil exports to China and other growing Asian oil markets using eastbound routes rather than the Suez Canal.
- Renewed U.S. oil sanctions on Iran, imposed in late 2018, contributed to a decrease in Iran’s crude oil exports to Europe.
Southbound crude oil shipments, mainly to Asian markets such as Singapore, China, and India, have more than doubled in the past two years. Petroleum exports from Russia accounted for the largest share (24%) of Suez southbound petroleum traffic. Increases in Libya’s crude oil production and exports in 2018 also contributed to a rise in southbound shipments. In the past two years, increased production and exports of U.S. crude oil and petroleum products—especially liquefied petroleum gas—have also increased southbound traffic through the canal.
Oil Glut Could Worsen As Libya’s Civil War Ends -While the Persian Gulf crisis continues to escalate, oil markets have put Libya’s ongoing civil war on the backburner. This weekend, the shutdown of OPEC producer Libya’s giant Sharara field however put it again in the spotlight. On Saturday July 20, Libya’s National Oil Corporation (NOC) stated that production at its El Sharara oilfield was halted. As a direct result of this, the NOC also has stopped the shipment of crude oil in the Port of Az Zawiyah. The closure on Saturday resulted in the loss of 290,000 bpd production, the oil company indicated. In a reaction to the press, NOC’s chairman Sanallah, said that criminal activities forced the NOC to declare the state of emergency. Production however is reported to have resumed on July 22, while the NOC lifted the force majeure on loadings of its crude oil from the Zawiya terminal. Officials have indicated that an unidentified group shut a valve on the pipeline linking it to Zawiya, 49 km (30.4 miles) west of Tripoli. Production at present is at more than half its peak production. The force-majeure brought official NOC production below the 1 million bpd mark, from a level of around 1.2-1.3 million bpd. Sharara is operated by a joint venture between the NOC and Total SA, Repsol SA, OMV AG and Equinor ASA, known formerly as Statoil ASA. Production at the nearby El Feel oilfield is unaffected, the NOC said. The situation in Libya’s oil and gas sector could however become precarious if rumors about an upcoming new military offensive of the Libyan National Army (LNA), led by strongman general Haftar, against Tripoli will take place. LNA commander Fawzi Al Mansouri stated on Sunday that a military offensive is being prepared. Al Mansouri indicated that LNA forces were preparing to launch a “decisive and lightening” operation to liberate Tripoli. When Haftar will give the orders, the offensive will start, which could be in the next day(s).
Indonesia scrambles to plug undersea oil spill in Java - Indonesia’s state energy firm Pertamina said it will take weeks to plug an oil spill at its Offshore North West Java (ONWJ) facility, which has reached the northern coast of Java island, a director said yesterday. The incident started on July 12, when natural gas was released during drilling at one of its wells in the ONWJ platform on the Java sea, Pertamina’s upstream director Dharmawan Samsu told a news conference. Three days later the company declared an emergency and on July 16, a layer of oil began to rise to the surface of the sea in addition to the gas bubbles, he said. The oil spill has reached villages on the coast of the Karawang area, West Java, 2km from the facility, he said. It will take an estimated 10 weeks from the declaration of emergency to stop the oil and gas leakage, or another eight weeks from yesterday, he said. “For Pertamina, the most important thing is the safety of our employees and residents (in the affected area) and the environment, to make sure there is as little environmental impact as possible from this,” Samsu said. Twenty-nine ships have been deployed to patrol the area, which are also on standby for firefighting, he said, adding that the firm has put up a 3.5km containment boom at sea and another 3km boom and 700m of fish nets along the shoreline. Boots & Coots, a well control company that handled a similar spill in the Gulf of Mexico, has been hired to help control the situation, Samsu said. Pertamina has set up an emergency centre in Karawang and promised to compensate fishermen, he said. “The cause is still being thoroughly and deeply investigated. Early indications showed pressure anomalies that resulted in gas bubbles, followed by oil spill,” Samsu said. The incident happened at a well that was yet to come into production, which had been expected to produce 3,000 barrels per day (bpd) of crude and over 30mn standard cubic feet per day of natural gas in September, Samsu said. There were two other wells in the field that Pertamina initially wanted to reactivate, but the company has now isolated them awaiting the result of the investigation, he said.
Saudi Arabia has been exporting more crude oil to China, less to the United States - Saudi Arabia’s crude oil production approached a four-year low in May 2019, averaging an estimated 9.9 million barrels per day (b/d), more than 1 million b/d lower than its all-time high in November 2018. Production in Saudi Arabia dropped following a December 2018 agreement by members of the Organization of the Petroleum Exporting Countries (OPEC) to cut crude oil production. Saudi Arabia’s crude oil exports, especially to the United States, have also fallen. However, some countries—in particular, China—have increased their imports of crude oil from Saudi Arabia.Four Asia-Pacific countries that publish crude oil imports by country of origin—China, Japan, South Korea, and Taiwan—collectively imported an average of 3.5 million b/d of crude oil from Saudi Arabia in 2018. China’s, Japan’s, and Taiwan’s 2019 year-to-date crude oil imports from Saudi Arabia are larger than their 2018 annual averages, but South Korea’s have declined slightly, based on data through May 2019.In contrast, U.S. crude oil imports from Saudi Arabia have declined year-to-date through April 2019 compared with the 2018 average by more than 0.2 million b/d, averaging 0.6 million b/d for the first four months of 2019. Weekly estimates through July 12 show continued declines, indicating that U.S. crude oil imports from Saudi Arabia averaged about 0.5 million b/d in May and in June. These recent changes in crude oil trade patterns are partially a result of long-term structural trends within China and the United States and partially a result of recent oil market dynamics. From 2010 through 2018, EIA estimates thattotal Chinese petroleum consumption increased from 9.3 million b/d to 13.9 million b/d and that Chinese domestic production increased from 4.6 million b/d to 4.8 million b/d. As a result, China’s need to meet incremental oil consumption has been met primarily by imports. China’s crude oil imports from Saudi Arabia have gradually increased in recent years, and in March 2019, reached 1.7 million b/d, the highest level for any month since at least 2004. Other countries, including Russia and Brazil, have been exporting more crude oil to China, however, and Russia surpassed Saudi Arabia as China’s largest source of crude oil on an annual average basis in 2016. U.S. crude oil imports, on the other hand, have steadily decreased as domestic crude oil production has increased. In addition, U.S. crude oil imports from OPEC members have declined following increases from other countries, especially Canada. Canadian crude oil can be a substitute for certain OPEC grades and can have lower transportation costs when shipped by available pipeline capacity.
Millions of Barrels of Iranian Oil Are Piled Up in China’s Ports - Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market. The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.” There could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit. Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.
US Sanctions China State Oil Trader - The U.S. has sanctioned a Chinese state oil trader for violating restrictions on Iranian crude, an attempt to tighten restrictions on the Islamic Republic and cut off one of its biggest buyers. Zhuhai Zhenrong Co., the secretive company with links to the Chinese military, has a history of taking Iranian crude and fuel, at times as part of barter deals for goods or services, and then selling it on to refiners in China. The U.S. move comes at a delicate time for relations with Beijing as the two nations attempt to kick-start negotiations aimed at resolving their broader trade conflict. Secretary of State Michael Pompeo announced the decision in a speech Monday, adding that sanctions would also be imposed on the company’s chief executive officer, Li Youmin. “They violated U.S. law by accepting crude oil” from Iran, Pompeo said. “We’ve said all along that any sanction will indeed be enforced.” Specifically, the company “knowingly engaged in a significant transaction for the purchase or acquisition of crude oil from Iran” after restrictions were fully in place on May 2, the state department said in a separate statement. Li declined to comment when reached by Bloomberg News on Tuesday. The trading company merged in 2015 with Macau, China-based Nam Kwong Group, which said Tuesday that it separated from Zhuhai Zhenrong in September.
China Takes Iran Oil Despite Tougher US Sanctions - China’s still importing oil from Iran weeks after the U.S. imposed sanctions aimed at halting sales of crude from the Persian Gulf nation. Official customs data on Friday showed China imported 855,638 tons in June, the equivalent of about 209,000 barrels a day. While that’s less than in May and the lowest since mid-2010, the data adds to speculation that Beijing may risk running afoul of American sanctions to secure crude supplies from the Islamic Republic. All eyes are on China’s oil purchases as Donald Trump’s administration continues to clamp down on companies and individuals flouting its restrictions. The import-reliant Asian nation is one of the few remaining buyers of Iranian barrels, after other countries such as South Korea and Japan halted flows. The shipments that arrived at Chinese ports in June could nevertheless constitute the “incidental transactions” that U.S. officials had previously said may occur without breaching restrictions. With a three to four-week voyage from Iran to China, it’s possible that some of the oil loaded before May 2 and arrived in China in June. According to industry consultant FGE, about 450,000 barrels a day of Iranian oil were in transit as of early May when the U.S.-issued waivers expired. Still, tankers are hauling millions of barrels of oil from the Islamic Republic towards China, although this hoard of crude may be held in what’s known as “bonded storage” without crossing customs. China imported about 494,000 barrels a day of Iranian crude in the first five months of this year, compared with more than 660,000 barrels a day in the same period in 2018. In June, the Asian nation is expected to ramp up purchases from other major oil-producing countries in the Middle East, West Africa and Russia to make up for the loss of supplies from Iran.
China gas plant blast: death toll rises to 15 as three more bodies found - Authorities in central China said on Sunday that the death toll from an explosion at a gas plant has risen to 15 with another 15 seriously injured.Three people who were previously missing have been found dead, local authorities said.About 270 firefighters and rescuers have completed three rounds of search and rescue since the blast on Friday evening in the city of Yima in Henan province, China’s emergency management ministry said.The blast shattered windows 3km (1.9 miles) away and knocked off doors inside buildings, according to earlier state media reports. Xinhua said the explosion happened in the air separation unit at a factory owned by Henan Coal Gas Group. All production at the plant has been halted, it said.“Many windows and doors within a 3km radius were shattered, and some interior doors were also blown out by the blast,” state broadcaster CCTV said on Weibo, China’s Twitter-like social media platform. Local media showed amateur videos of a massive column of black smoke billowing from the factory and debris littering the roads.Other images showed the doors and windows of homes blown out and closed shops with dented metal fronts. A bloodied man was seen being helped out of a van in a video posted on social media.
Oil gains as Gulf tanker seizure raises tensions - Oil prices rose on Monday on concerns that Iran’s seizure of a British tanker last week may lead to supply disruptions in the energy-rich Gulf. Brent crude futures climbed 53 cents, or 0.9%, to $63 a barrel. West Texas Intermediate (WTI) crude futures were up 25 cents, or 0.5%, at $55.88 a barrel. Last week, WTI fell over 7% and Brent lost more than 6%. Iran’s Revolutionary Guards said on Friday they had captured a British-flagged oil tanker in the Gulf in response to Britain’s seizure of an Iranian tanker earlier this month. The move has increased the fear of potential supply disruptions in the Strait of Hormuz at the mouth of the Gulf, through which flows about one-fifth of the world’s oil supplies, but no major escalation with Britain or the United States appears imminent. “In the cat and mouse game that Iran is playing with the U.S., it is taking calculated risks," “So far the U.S. is not taking the bait.” Capping gains, force majeure was lifted on loadings of crude on Monday at Libya’s Sharara oilfield, the country’s largest, whose closure since Friday had caused an output loss of about 290,000 barrels per day (bpd). Meanwhile, data late last week showed shipments of crude from Saudi Arabia, the world’s top oil exporter, fell to a 1-1/2-year low in May. Speculative money is flowing back into oil in response to the escalating dispute between Iran, the United States and other Western nations, along with signs of falling supply. The Iranian capture of the ship in the global oil trade’s most important waterway was the latest escalation in three months of confrontation with the West that began when new, tighter U.S. sanctions on Iran took effect at the start of May. Hedge funds and other money managers raised their combined futures and options positions on U.S. crude for a second week and increased their positions in Brent crude as well, according to data from the U.S. Commodity Futures Trading Commission and the Intercontinental Exchange. Goldman Sachs on Sunday lowered its forecast of growth in oil demand for 2019 to 1.275 million bpd, citing disappointing global economic activity.
Oil Advances Most in a Week -- Oil rose the most in more than a week as Iran’s seizure of a British oil tanker fueled concerns about escalating tensions in the Middle East. Futures closed 1.1% higher in New York on Monday after easing some gains during the session. While the U.K. demanded the immediate release of the Stena Impero, taken by Iran’s Revolutionary Guard Corps in the Strait of Hormuz on Friday, British Defense Minister Tobias Ellwood said he wanted to de-escalate the situation. “It seems to be a situation where neither side is trying to force a military solution to these tensions,” said Bob Yawger, director of the futures division at Mizuho Securities USA. “So in situations like this, news of the conflict leads the market to rally strongly and then pull back.” The U.S. benchmark crude rose Friday after the tanker seizure highlighted the risk of flows through the world’s most critical crude choke-point. Nonetheless, prices fell 7.6% last week, the sharpest pullback since May, amid concerns that a slowing global economy will weigh on oil demand. West Texas Intermediate for August delivery, which expires Monday, added 59 cents to settle at $56.22 a barrel on the New York Mercantile Exchange, the largest gain since July 10. The more-active September WTI contract rose 46 cents to end the session at $56.22 a barrel. Brent for September settlement advanced 79 cents to settle at $63.26 a barrel on the ICE Futures Europe Exchange. The global benchmark crude traded at a premium of $7.04 for the same month, the widest since late June.
Oil Markets Ignore The Tanker War - Oil prices initially traded up on Monday on geopolitical tension in the Middle East, but gave up some of those gains on fears of an oil glut. At the start of Tuesday, oil prices dipped further, weighed down by demand fears. The tit-for-tat tanker seizures between the UK and Iran has heightened tension, but unlike last month, there appears little chance of and no appetite for a military confrontation. Tension in the Persian Gulf remains elevated, but oil prices have barely budged, not least because of ample global oil supplies. “The response of oil prices to the seizure of a British oil tanker by armed Iranian forces near the Strait of Hormuz has been amazingly muted so far,” Commerzbank said. “It appears that the majority of market participants are convinced that there will be no open conflict between the West and Iran.” WTI based in Houston fell to its weakest level in almost a year after new pipelines came online, according to Reuters. New lines owned by EPIC Crude Pipeline LLC and Plains All American Partners began filling up in recent days, Reuters reports. The new supply eases bottlenecks and pushed Houston prices lower. “Houston prices should weaken with more supply and limited new storage at refineries,” a trader told Reuters. Oil prices traded up on Monday, but gains were relatively minor in light of the seizure of a British oil tanker by Iran. The seizure comes as retaliation for the British seizure of an Iranian tanker earlier this month. Oil prices have not spiked, as they might have in the past, but the shipping industry is bearing the brunt of the fallout. “Shipping and insurance costs have already been on the rise and the latest event will only add to that,” Amrita Sen of Energy Aspects told the FT. “Asian refiners in particular will be even keener now to search for alternative oil supplies and ship owners will look for alternative routes where possible, further adding to costs.” On Monday, the Trump administration announcedsanctions on Chinese state-owned oil trader Zhuhai Zhenrong Co. for violating U.S. sanctions on Iran. China has continued to stockpile oil from Iran, despite the U.S. ending waivers in May. The move may also add yet another point of contention between the U.S. and China has they seek to negotiate a resolution to their trade war.
Oil rises 1% to $56.77 per barrel as Middle East tensions linger - Oil prices were up on Tuesday as expectations of lower U.S. crude supplies were offset by weaker demand forecasts and the full restart of Libya’s largest oil field. Libya’s Sharara oil field returned to normal production on Tuesday, pressuring prices that rallied a day earlier on fears the tanker capture could disrupt supplies in the heavily trafficked Strait of Hormuz. Brent crude rose 67 cents to $63.94 a barrel on Tuesday. West Texas Intermediate climbed 1% or 64 cents to $56.77. “The situation with Iran seems contained for now, and Libya’s full supply is coming back,” said Bill Baruch, president at Blue Line Futures LLC in Chicago. In the Middle East, “tensions are ever-present but it hasn’t moved the market much because everyone is waiting on U.S. supply data,” Baruch said. Oil may gain further support if forecasts are correct for another drop in U.S. crude inventories. Analysts expect a 3.4 million-barrel draw in the latest week. 1/8EIA/S 3/8 The American Petroleum Institute, an industry group, releases its inventory report Tuesday at 4:30 p.m. EDT (2030 GMT). The U.S. government’s official figures are due Wednesday morning. A weaker outlook for oil demand because of slowing economic growth also weighed. On Tuesday, the International Monetary Fund cut its forecast for global growth, warning that further U.S.-China tariffs or a disorderly exit for Britain from the European union could weaken investment and disrupt supply chains. 1/8L2N24O0O8 3/8 On Sunday, Goldman Sachs lowered its 2019 oil demand projection, joining other forecasters. 1/8IEA/M 3/8 “Although prices had been driven by supply developments in the first half of the year economic considerations are making oil bulls careful this month,”
Morgan Stanley: Why Tanker Wars Aren’t Causing An Oil Price Spike - The oil market has changed so much over the past five years that fast-growing non-OPEC oil production limits oil price gains from a spike in tensions in the Middle East, where Iran seized a British oil tanker last week, Morgan Stanley says.“There is a difference in the oil market this time around because non-OPEC is simply growing so fast. That is the real game changer and that’s why the price action is relatively benign,” Morgan Stanley’s global oil strategist Martijn Rats told CNBC on Monday, commenting on the muted price reaction to Iran seizing a British tanker in Middle Eastern waters on Friday.If such an incident in the most important oil shipping lane in the world, the Strait of Hormuz, happened just five years ago, oil prices wouldn’t have risen just 1-2 percent, the spike would have been “much, much more significant,” Rats told CNBC.Oil prices were up early on Monday at 08:00 a.m. EDT, with WTI Crude rising 1.11 percent at $56.38 and Brent Crude up 1.25 percent at $63.25. Prices had eased back somewhat by 10:00am.We are in a fundamentally well-supplied oil market, Morgan Stanley’s Rats said, adding that with non-OPEC oil production growing very fast and oil demand somewhat soft, it’s actually “quite remarkable that we’re only at $63 a barrel, despite these concerns.” At the beginning of this month, just after OPEC and its allies rolled over their production cuts into 2020, Morgan Stanley revised down its long-term Brent Crude forecast to $60 from $65 a barrel. Over the next three quarters, the bank sees Brent at around $65 per barrel, a downward revision from a previous forecast of $67.50 a barrel.
WTI Pops'n'Drops After Huge Crude Draw, Gasoline Build - Oil rallied today, surging back up towards $57, as plans for a meeting between the U.S. and China offered a hint of progress in the US-China trade war.“Some of the soft demand numbers we’ve had in the last few months have definitely been the impact of the trade war,” said Leo Mariani, a KeyBanc Capital Markets Inc. analyst. “There’s been reticence in doing much until there’s more clarity on how that will end.” API:
- Crude -10.961mm
- Cushing -448k
- Gasoline +4.436mm - biggest build since Jan
- Distillates +1.42mm
A major crude draw (the 6th weekly draw in a row) was offset by a big build in gasoline stocks (biggest rise since January)... WTI spiked above $57 on the big crude draw but quickly fell back as perhaps the ongoing gasoline build continues...
Oil Spikes After API Reports Largest Crude Inventory Draw Of The Year - The American Petroleum Institute (API) reported a huge crude oil inventory draw of 10.961 million barrels for the week ending July 18, compared to analyst expectations of a much smaller—but still significant--4.011-million barrel draw. The inventory draw this week compares to last week’s small draw of 1.401 million barrels, according to the API. A day later, the EIA had estimated an even bigger inventory drawdown of 3.1 million barrels. After today’s extra-large draw—the largest draw this year--the net build is now just 1.20 million barrels for the 30-week reporting period so far this year, using API data.Oil prices were trading up on Tuesday with continuing tensions between Iran and most of the Western world over a series of oil tanker attacks and oil tanker seizures in the eve- important Persian Gulf. Even Libya lifting its force majeure on its largest oilfield, Sharara lacked the teeth to push prices down. The market has grown increasingly tolerant of the tensions in the Middle East, with other metrics having more of an impact on oil prices such production reports out of the shale patch, and force majeures that actually decrease the amount of exportable oil rather than just the threat of decreased oil as is the case with Iran. At 3:24pm EST, WTI was trading up by $0.57 (+1.01%) at $56.79—a dollar under last week’s price. Brent was trading up $0.56 (+0.89%) at $63.82—also almost a dollar under last week’s level. The API this week reported a 4.436-barrel build in gasoline inventories for week ending July 18. Analysts estimated a draw in gasoline inventories of 730,000 barrels for the week. Distillate inventories grew by 1.420 million barrels for the week, while inventories at Cushing fell by 448,000 barrels. US crude oil production as estimated by the Energy Information Administration showed that production for the week ending July 12 slid back this week to 12.0 million bpd, 400,000 bpd off the all-time high hit earlier this year.
WTI Extends Gains On Big Crude Draw, Production Slump - Oil prices held on to gains overnight after the huge API-reported crude draw (but large ghasoline build) and more confidence in a possible US-China trade deal. A confirmation of the API report in official government figures scheduled to be released Wednesday would “help us confirm an oil-price bottom,” said Phil Flynn, senior market analyst at Price Futures Group Inc., in a note to clients. “If we hold the recent lows and build off of it, it is very possible that crude oil has set a low that won’t be tested for the rest of this year.” Bloomberg Intelligence's Senior Energy Analyst Vince Piazza warns: "Energy investors seem to be paying attention to the wrong things. Escalating tensions in the Persian Gulf are supporting benchmarks, though the modest price boost relative to the risk of bottlenecks is surprising. Weaker petroleum demand should be the larger long-term concern, along with trade issues and resilient U.S. production. Modest aftereffects of storm system Barry still skew industry data." DOE:
- Crude -10.835mm
- Cushing -429k
- Gasoline -226k
- Distillates +613k
Confirming API's data, DOE reported a massive 10.8mm barrel inventory draw last week (and only marginal product inventory shifts). This is the 6th weekly crude draw in a row. US Crude production crashed down 700k last week but largely due to Gulf stoppages due to storm Barry...
Oil ends lower as support from storm-fueled, 11 million-barrel drop in U.S. crude supplies disappears - Oil futures settled lower on Wednesday, as support from a storm-induced, 11 million-barrel drop in U.S. crude supplies wore off and traders turned their attention back to concerns about weaker energy demand. U.S. crude inventories dropped by 10.8 million barrels for the week ended July 19, according to data from Energy Information Administration Wednesday, and production also edged lower, with analysts citing temporary disruptions caused by a Gulf of Mexico storm earlier this month. “Buyers won’t buy oil futures on the premise of [a] tight third quarter—they are looking longer term,” Tom Kloza, head of energy analysis at the Oil Price Information Service, told MarketWatch. He pointed out that the latest supply data were “heavily impacted” by Hurricane Barry. Also, “the worries about global slowdown thanks to [U.S.-China] trade tensions trump tightening supply,” said Kloza. West Texas Intermediate crude for September delivery fell 89 cents, or 1.6%, to settle at $55.88 a barrel on the New York Mercantile Exchange. Prices had climbed to as high as $57.64. September Brent crude declined by 65 cents, or 1%, to $63.18 a barrel on ICE Futures Europe—down from an intraday high of $64.66. X See
Oil falls 1.6% despite big draw in crude inventories, Mideast tensions - Oil prices fells on Wednesday, erasing earlier gains, despite the Energy Information Administration data showing a big draw in U.S. crude inventories.Brent crude futures fell 50 cents to $63.33 a barrel, while U.S. West Texas Intermediate crude fell 89 cents at $55.88 a barrel.U.S. crude failed to hold above $57.50 per barrel, a key technical level, before giving back its earlier gains, traders said.Earlier in the session, the front-month Brent contract flipped to trade at a discount to the second-month contract, a market structure known as contango, for the first time since March. Sentiment in the oil market has darkened as investors worry about slowing global economic growth weakening demand for oil.Yet the market was supported by a large drawdown in U.S. crude stockpiles earlier in the session. Crude inventories fell by 10.8 million barrels in the week to July 19, the Energy Information Administration said on Wednesday. Analysts expected a decrease of 4 million barrels.“Hurricane Barry has shaken up the data for a second week, with lower production and stymied imports leading to a near-11 million barrel draw,” said Matt Smith, director of commodity research at ClipperData.U.S. oil companies cut some production in the Gulf of Mexico ahead of Hurricane Barry, which came ashore in Louisiana earlier this month.Meanwhile, some geopolitical risk premium from tensions in the Middle East also helped buoy prices.A U.S. Navy ship took defensive action against a second Iranian drone in the Strait of Hormuz last week, but did not see the drone go into the water, the U.S. military said on Tuesday.Iran’s president, Hassan Rouhani, said on Wednesday his country was ready for “just” negotiations but not if they meant surrender, without saying what talks he had in mind. Also fueling tensions, Britain gained initial support from France, Italy and Denmark for its plan for a European-led naval mission to ensure safe shipping through the Strait of Hormuz following Iran’s capture of a British-flagged tanker.
Oil ends lower as support from storm-fueled, 11 million-barrel drop in U.S. crude supplies disappears - Oil futures settled lower on Wednesday, as support from a storm-induced, 11 million-barrel drop in U.S. crude supplies wore off and traders turned their attention back to concerns about weaker energy demand. U.S. crude inventories dropped by 10.8 million barrels for the week ended July 19, according to data from Energy Information Administration Wednesday, and production also edged lower, with analysts citing temporary disruptions caused by a Gulf of Mexico storm earlier this month. “Buyers won’t buy oil futures on the premise of [a] tight third quarter—they are looking longer term,” Tom Kloza, head of energy analysis at the Oil Price Information Service, told MarketWatch. He pointed out that the latest supply data were “heavily impacted” by Hurricane Barry. Also, “the worries about global slowdown thanks to [U.S.-China] trade tensions trump tightening supply,” said Kloza. West Texas Intermediate crude for September delivery CLU19, +0.46% fell 89 cents, or 1.6%, to settle at $55.88 a barrel on the New York Mercantile Exchange. Prices had climbed to as high as $57.64. September Brent crude BRNU19, +0.44% declined by 65 cents, or 1%, to $63.18 a barrel on ICE Futures Europe—down from an intraday high of $64.66.
Global oil consumption stagnates leaving prices under pressure - (Reuters) - Global oil consumption has stalled since the middle of 2018, making lower oil prices inevitable despite the best efforts of Saudi Arabia and its allies to reduce production. The world’s top 18 oil-consuming countries, each using more than 1 million barrels per day (bpd) of petroleum products, account for almost two-thirds of world consumption, so they make a useful proxy for global demand. Consumption in the top 18 rose by just 0.7% in the three months to March compared with the same period a year earlier, figures from the Joint Organisations Data Initiative show. Most of these countries report consumption figures with a delay of two months, with data now available through May, but China, India and Thailand report more slowly. (https://tmsnrt.rs/2Oh6mNO) If late reporters are excluded, consumption in the top 15, accounting for 45% of world consumption, fell 2.2% in the three months to May compared with 2018, the fastest decline since the recession of 2008/09. Since 2006, consumption growth in the top 15 has been a reliable leading indicator for the top 18 and demand more generally, which is not surprising given the interconnectedness of the global economy. Decelerating oil consumption growth since the second and third quarter of 2018 has corresponded closely with the slowdown in global manufacturing activity and freight movements. Given the slackening in oil consumption, a sharp fall in prices was inevitable, notwithstanding action by Saudi Arabia and its allies in the expanded OPEC+ group of oil exporters. Previous decelerations in 2006/07, 2008/09, 2011/12, and 2014/15 were all accompanied by sharp price falls to force consumption and production back to balance. In 2019, production restraint has averted an even sharper fall in prices but could not avert the need for lower prices to help buy back some of the lost consumption growth. Prices will start to rise sustainably if, and only if, the global economy avoids recession and consumption growth starts to accelerate again.
Oil rises 0.3% on US stock decline, but manufacturing slowdown caps gains - Oil prices rose on Thursday amid Middle East tensions and a big fall in U.S. crude stocks, but gains were capped as weak Western manufacturing data indicated slowing economic growth and in turn the potential for reduced fuel demand. Brent crude futures rose 28 cents or 0.4% to $63.46 a barrel, after dropping 1% on Wednesday - the first fall in four sessions. U.S. West Texas Intermediate crude settled up 14 cents, or 0.3%, at $56.02 a barrel, having dropped 1.6% in the previous session. U.S. crude stocks fell by nearly 11 million barrels last week, the Energy Information Administration reported on Wednesday, well above analysts’ expectations for a drop of 4 million barrels. “While that draw was influenced by temporary factors - Hurricane Barry - U.S. crude inventories have plunged by 40 million barrels over the last six weeks, suggesting the oil market is finally rebalancing,” UBS analyst Giovanni Staunovo said. Oil prices have also been under pressure from concerns about global economic growth amid growing signs of harm from the U.S.-China trade war that has rumbled on over the last year. However, the White House said on Wednesday top U.S. and Chinese negotiators would meet next week to continue talks, and global equities edged up on the news. “Despite the bullish supply-side fundamentals and geopolitics that support oil prices, it seems that the market needs a positive economic catalyst to move appreciably higher,” said Harry Tchilinguirian, global oil strategist at BNP. “If we get positive echoes next week from renewed U.S.-China trade talks, then oil can advance noticeably higher.” A series of purchasing manager index (PMI) readings in the United States and Europe were weaker than expected. The German PMI, tracking the manufacturing and services sectors, hit a seven-year low in July, suggesting a deteriorating growth outlook for Europe’s largest economy. The fall was driven by the auto sector on poor sales to China.
Crude Oil Settles Higher, but Fears Over Slowing Global Growth Keep Lid on Gains - – Crude oil prices rose Thursday as traders cheered data from a day earlier showing a fall in U.S. crude stockpiles. But concerns about global growth raised by European Central Bank President Mario Draghi kept a lid on gains. On the New York Mercantile Exchange West Texas intermediate crude futures for September delivery rose 14 cents to settle at $56.02 a barrel, while on London's Intercontinental Exchange, Brent crude, the global benchmark, gained 21 cents to $63.39 a barrel. For the year, WTI is up 23.6%. Brent has risen 17.8%. U.S. gasoline prices were up slightly to an average $2.751 a gallon on Thursday, according to the American Automobile Association, and have climbed 21.4% this year. The threat of a slowing global economy on oil-demand growth was in the spotlight once again as Draghi hinted that the central bank would consider adopting more aggressive monetary policy easing measures, including rate cuts amid worries about slowing global growth. That knocked down some of the optimism on oil prices, which was led by bullish supply-side fundamentals, including data from a day earlier showing a draw in U.S. stockpiles for the sixth-consecutive week. U.S. crude stocks fell by 10.8 million barrels last week, the Energy Information Administration reported on Wednesday, well above Investing.com's consensus expectations for a draw of 4 million barrels. That was the sixth-straight weekly decline in domestic crude stockpiles amid signs of tightening supplies globally, as OPEC and its allies continue to cut production and sanctions on Iran and Venezuela squeeze output. There was speculation on Wednesday, however, that the drawdown was also a byproduct of Hurricane Barry, which came ashore on the central Louisiana coast earlier this month and forced many oil platforms to shut in their production.
Oil prices nudge up as geopolitical tensions counter sluggish demand - Oil were on track for a weekly increase as geopolitical tensions over Iran remained unresolved, although flagging prospects for global economic growth amid the U.S.-China trade war capped gains. Brent crude futures were headed for a weekly gain of about 1%. They fell 6% last week. West Texas Intermediate crude was on pace to record a 0.2% gain. It fell 7.5% last week. Both Brent and WIT slipped slightly during Friday’s session, however. Tensions remained high around the Strait of Hormuz, the world’s most important oil passageway, as Iran refused to release a British-flagged tanker it seized last week in the Gulf. U.S. Secretary of State Mike Pompeo said Washington had asked Japan, France, Germany, South Korea, Australia and other nations to join a maritime security initiative in the Middle East so oil and other products can flow through the strait. However, oil prices’ reaction to the strains in the Gulf has been relatively muted. “It appears that the majority of market participants do not expect a military conflict that would hamper oil shipments,” Commerzbank analyst Carsten Fritsch said. Prices also drew support from a crude inventory draw in the United States, but gains were limited as the fall appeared to have been largely anticipated. U.S. production in the Gulf of Mexico was still feeling the effects of Hurricane Barry. “Several indicators pointing to a slowdown of global oil demand growth appear to have taken over market sentiment,” Jefferies analyst Jason Gammel said. Reuters polls taken July 1-24 showed the growth outlook for nearly 90% of the more than 45 economies surveyed was downgraded or left unchanged. That applied not just to this year but also 2020.
Oil gains on U.S. economic data, Gulf crude tanker dispute (Reuters) - Oil prices inched up on Friday, ending the week higher after stronger-than-expected U.S. economic data brightened the crude demand outlook and concerns over the safety of oil transport around the Strait of Hormuz threatened supply. Brent crude futures LCOc1 settled at $63.46 a barrel, up 7 cents. They clocked a weekly rise of about 1.7%. U.S. West Texas Intermediate crude CLc1 settled at $56.20 a barrel, rising 18 cents. It gained about 1.2% on the week. U.S. economic growth slowed less than expected in the second quarter with a boom in consumer spending, strengthening the outlook for oil consumption. “The data was net positive,” said John Kilduff, partner at Again Capital Management. “GDP beat expectations... consumer spending was just off the charts, but business spending was nearly as bad as consumer spending was good.” Broader economic slowing, particularly in Asia and Europe, could weaken crude demand outside of the United States and kept prices in check. “There’s a battle in the market right now between those who think we’re going to see slowing economic conditions that will hit demand... and others (focused on) what’s going on in the Persian Gulf as well as lowered output from the producers,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. Next week, top U.S. and Chinese negotiators meet for the first time since trade discussions between the world’s two largest economies broke down in May after nearing agreement. Any positive outcome from the talks is expected to boost oil prices. Reuters polls taken July 1-24 showed the growth outlook for nearly 90% of the more than 45 economies surveyed was downgraded or left unchanged. That applied not just to this year but also 2020.
Oil Prices Up for the Week - WTI and Brent crude oil futures eked out gains for the day and the week. West Texas Intermediate (WTI) and Brent crude oil futures eked out gains for the day and the week. The September WTI contract gained 18 cents Friday, settling at $56.20 per barrel. The light crude marker traded within a range from $55.68 to $56.57. Compared to the July 19 close, the WTI is up one percent. Also edging upward Friday was the September Brent price, which picked up seven cents to settle at $63.46 per barrel. The Brent is up 1.6 percent week-on-week. Both grades of crudes managed to show slight gains for the week despite trading within a wide range Wednesday, said Tom Seng, Assistant Professor of Energy Business with the University of Tulsa’s Collins College of Business. “Monday’s higher prices were the result of last Friday’s seizure of a British-flagged oil tanker in the Persian Gulf,” said Seng. “Countering that move was a sense of adequate flowing oil supplies and building global inventories and sagging demand going forward.” Seng also noted the International Energy Agency (IEA), OPEC and the U.S. Energy Information Administration (EIA) all lowered their growth forecasts for the remainder of 2019. In addition, he pointed out the American Petroleum Institute (API) reported that U.S. crude exports have hit a record daily average of 3.3 million barrels – helping to offset global supply interruptions from places such as Iran and Venezuela. “It has also been reported that China is stockpiling millions of barrels of Iranian crude at its ports,” said Seng. “Since it is not officially being received as imported crude, so-called bonded crude is not currently being counted but could serve to dampen prices when the world’s largest importer of oil takes ownership.” The EIA’s latest Weekly Petroleum Status Report showed a fifth straight weekly decline in U.S. commercial crude inventories, said Seng. In addition, he pointed out the report revealed:
- A drop in commercial crude stocks of 10.8 million barrels (Bbl), far higher than the 4.1 million Bbl projected by Wall Street Journal analysts with close to API’s forecast of 11 million Bbl
- 445 million Bbl of total crude in storage – two percent higher than the five-year average for this time of year
- A 429,000-Bbl decline in oil stocks at the Cushing, Okla., hub, bringing the total down to 50.4 million Bbl – or 66 percent of capacity
- 93.1 percent refinery utilization, or 17 million Bbl per day (bpd) – a 1.3-percent decline from the previous week
- A 14-percent year-on-year drop in oil imports
- U.S. oil production at 11.3 million bpd, down from the preceding week
OPEC's Fight To End The Oil Glut Is Far From Over - OPEC and its Russia-led non-OPEC allies are in their third year of managing supply to the market, hoping to draw down high inventories and push up oil prices. Early this month, the so-called OPEC+ coalition of partners rolled over their production cuts of a combined 1.8 million bpd into March 2020, as the resurging oil glut threatened to derail their continued efforts to manage the market. OPEC is now considering using several metrics to assess where global oil (over)supply stands, including taking the five-year average of oil stocks in 2010-2014 instead of the most recent five-year average 2014-2018, which it currently reports in its monthly oil market reports and which the International Energy Agency (IEA) also takes as a benchmark to measure oil inventories. Analysts warn that the 2010-2014 average metric will not give a correct comprehensive assessment of the oil market. Fatih Birol, the IEA’s executive director, warns that moving the goalposts doesn’t change the situation in the oil market. The glut is there, regardless of how OPEC wants to measure inventories. “The important thing is that you can change the methodology but you cannot change the realities of the market,” Birol told Reuters, noting that the 2010-2014 average is a new perspective OPEC proposes to use, while the IEA has its own perspective. On the sidelines of the OPEC+ meeting in Vienna earlier this month, Khalid al-Falih, the Energy Minister of OPEC’s largest producer and de facto leader Saudi Arabia, told Al Arabiya:“With demand rising over the next nine months and the commitments from all the countries, including the Kingdom of Saudi Arabia, we are approaching the normal levels of supplies of 2010-2014. It is one of the options in front of us as a goal." “The rate of the last five years is another option, which we think is unsuitable. We will study the middle options between these two choices. In any case, we will make sure that the market is balanced with proportionate indicators,” al-Falih told the Arab broadcaster.
Kuwait Works with Saudis to Resume Oil Output in Neutral Zone -- Kuwait said it’s working with Saudi Arabia to resume oil production in the neutral zone between them that has been shuttered for at least four years. Saudi Minister of State for Energy Prince Abdulaziz Bin Salman visited Kuwait Wednesday. The two sides will discuss a resumption after the “completion of all technical issues required,” Tareq Al-Mezrem, a Kuwaiti government spokesman, told Kuwait’s state-run KUNA news agency. The zone can produce as much as 500,000 barrels a day, equal to about 4% of the countries’ combined output last month. No timeline for a resumption was given, nor was it clear if the additional production would be offset by lower output elsewhere. Both countries are subject to quotas set by the Organization of Petroleum Exporting Countries. The two sides have resolved the major issues and those outstanding are technical in nature, according to a person familiar with the discussions, who asked not to be identified because the matter is private. The talks are the most advanced they’ve ever been, the person said. Years of negotiations have so far failed to bring about a resolution. The two Gulf nations have held a number of private meetings since 2015, at one point even coming close to signing an agreement before pulling back at the last minute over wording in the final documents regarding contentious sovereignty issues. The neutral zone hasn’t produced anything since fields there were shut down after spats between the two countries in 2014 and 2015. The barren strip of desert straddling the Saudi-Kuwaiti border -- a relic of the time when European powers drew implausible ruler-straight borders across the Middle East -- can pump about as much as OPEC member Ecuador.
Saudi Arabia releases Iranian oil tanker after two and a half months - Saudi Arabia has released an Iranian oil tanker after two and a half months, Iran's semi-official Mehr news agency is reporting. Happyness 1, belonging to the Iranian National Tanker Company (NITC), which was carrying over 1 million barrels of fuel oil, suffered a malfunction in the Red Sea off the coast of Jeddah in Saudi Arabia on April 30. Mehr said Saudi officials had prevented the oil tanker from leaving the Jeddah port despite the fact that Iran had paid all the costs of maintenance and repair that the Saudi authorities had demanded. Saudi authorities released the tanker and all its crew, including 24 Iranians and two Bangladeshis. This comes amid heightened tensions in the region following the seizure of a British-flagged tanker by Iran's Revolutionary Guard. The UK's Foreign Secretary Jeremy Hunt said the seizing of the tanker "raises very serious questions about the security of British shipping and indeed international shipping" in the Strait of Hormuz. Hunt spoke to reporters Saturday evening after an emergency government meeting about the "totally and utterly unacceptable" interception of the Stena Impero and "measures that we are going to take" to guarantee British vessels safe passage. Hunt said that while speaking with Iranian Foreign Minister Javad Zarif on Saturday, he again rejected Iran's assertion that Friday's incident reciprocated for Royal Marines taking part in the July 4 seizure of an Iranian tanker. He said the Iranian tanker, seized off the coast of Gibraltar, violated European Union sanctions by carrying oil to Syria, making its detention in the waters of a British territory legal.
'Floating bomb': Decaying oil tanker near Yemen coast could soon explode, experts warn - An abandoned and decaying oil tanker near the coast of war-torn Yemen could soon rupture or explode, the United Nations (UN) has warned, potentially triggering one of the world’s largest oil spills. The deserted Safer FSO tanker, which is believed to contain approximately 1.14 million barrels of oil, has been anchored and left without maintenance off the Yemeni coast of Al Hudaydah since early 2015, according to the UN. The tanker, which was described in a recent op-ed from The Atlantic Councilas a “floating bomb,” is thought to be eroding fast.There are concerns that following years of inertia in a salty and corrosive maritime environment, volatile gases have built up in the storage tanks — increasing the risk of an explosion.However, UN officials’ plans to inspect the ship in order to assess the scale of the damage has repeatedly been blocked.Matt Lowcock, the UN undersecretary-general for humanitarian affairs, saidin a speech to the Security Council last week that Houthi authorities “continue to delay” any assessment of the tanker.Lowcock pointed out that this was “additionally frustrating” because Houthi authorities had actually contacted the UN in early 2018 requesting assistance with the tanker and promising to facilitate their work.“If the tanker ruptures or explodes, we could see the coastline polluted all along the Red Sea. Depending on the time of year and water currents, the spill could reach from Bab el Mandeb to the Suez Canal — and potentially as far as the Strait of Hormuz,” Lowcock said on July 17.“I leave it to you to imagine the effect of such a disaster on the environment, shipping lanes and the global economy.”
This crisis was entirely predictable, but was it avoidable? - At the start of this month the Gibraltarian authorities - aided by a detachment of Royal Marines - detained a tanker which was believed to be carrying Iranian oil destined for Syria.This would have been a breach of EU sanctions directed against various Syrian entities and individuals. Gibraltar and Britain insist they were acting entirely legally, but Tehran has described the episode as piracy. And ever since the vessel was detained, the Iranians have been threatening to seize a British-flagged ship in retaliation.Indeed, an earlier effort by Iran's Revolutionary Guard Corps to divert a British tanker into Iranian waters was only averted by the muscular intervention of a Royal Navy warship, the Type 23 frigate HMS Montrose. But there is a limit to what one warship can do. This time it appears not to have arrived on the scene quickly enough and the Stena Impero and its crew are now in Iranian hands. A second ship that was detained by the Iranians was subsequently allowed to go, underlining the fact that this seems to be a direct retaliation for the arrest of the tanker off Gibraltar. So what happens now? Well the first thing to remember is that this specific row between Tehran and London is only one aspect of an already highly volatile situation in the Gulf. The Trump administration's decision to walk away from the international nuclear deal with Iran and to re-apply sanctions is having a hugely damaging impact on the Iranian economy. Iran is pushing back. While it denies some of these actions, the US and its allies believe it was responsible for attacking several vessels with limpet mines. It has also shot-down a sophisticated US unmanned aircraft. And, as if to underline the risk of conflict, the US claims more recently to have shot down an Iranian UAV (drone) that approached one of its vessels. The Iranians deny the loss. So the first order of business is to try to calm tensions and avoid escalation.
Iran says British-flagged tanker was in accident with fishing boat (Reuters) - The British-flagged tanker Stena Impero was in an accident with a fishing boat before being detained on Friday, Iran’s Fars news agency reported on Saturday, quoting an official. Iran says all 23 crew seized on the tanker are now at Bandar Abbas port and will remain on the vessel until the end of an investigation, according to Fars. “It got involved in an accident with an Iranian fishing boat... When the boat sent a distress call, the British-flagged ship ignored it,” said the head of Ports and Maritime Organisation in southern Hormozgan province, Allahmorad Afifipour. “The tanker is now at Iran’s Bandar Abbas port and all of its 23 crew members will remain on the ship until the probe is over.” Britain said earlier it was urgently seeking information about the Stena Impero, which had been heading to a port in Saudi Arabia and suddenly changed course after passing through the strait at the mouth of the Gulf.
Iran Posts Dramatic Video Showing IRGC Troops Raiding Seized Oil Tanker Earlier Iran released footage of the detained British-flagged oil tanker Stena Impero, but hours after the first images were revealed, more video was aired on Iranian state TV, this time showing the dramatic IRGC military raid on the vessel. Iranian special forces troops fast-roped down to the deck via helicopter while IRGC boats circled near the vessel.#BREAKING: #IRGC released video of seizure of Stena Impero, the #UK's Oil Tanker in #HormuzStrait yesterday. A Mi-171 transport helicopter of #IRGC Navy Aviation base at #BandarAbbas was used for heliborne & fast-roping of #IRGC Navy Special Forces on the deck of the Oil tanker. pic.twitter.com/1XQPGg8bLt— Babak Taghvaee (@BabakTaghvaee) July 20, 2019 Iran's Press TV described:The footage shows Iranian speedboats cruising near Stena Impero tanker as a military helicopter is flying over the vessel.An Iranian marine could be heard communicating with the command center in the southern port city of Bandar Abbas. Masked Iranian comm andos then rappelled on the deck of the tanker from the helicopter. The name of the ship can be seen in the video.
Eye-For-An-Eye- UK Caught As Trump's Useful Idiot In Dangerous Iran Policy -- The UK fell for a US trap when it seized an Iranian ship on July 4. Iran struck back last Friday. Eurointelligence provides interesting commentary of tit-for-tat ship seizures first by the UK, then by Iran in response. The extraordinary story behind the capture of the British-flagged oil tanker Stena Impero is a cautionary tale on many levels. It has the potential of turning into a major diplomatic calamity for both the UK and the EU. Simon Tisdall tells the story in the Observer that this confrontation was masterminded by none other than John Bolton, Donald Trump’s national security adviser. Several weeks ago, US intelligence services tracked an Iranian oil vessel headed for the Mediterranean, bound for a refinery in Syria. The Grace 1 sailed under a Panama flag. As it was too big for the Suez Canal, it undertook the longer journey from Iran around Cape Horn and up the Atlantic towards Spain. Washington alerted the Spanish government 48 hours before the tanker was due to enter the Strait of Gibraltar, but without giving any details that the ship might be in breach of US sanctions. The Spanish Navy escorted the ship but took no action at the time. Spain later said it would have intervened if it had been given information that the ship was in breach of US sanctions. Bolton instead tipped off the British, who felt compelled to intercept the Grace I as it entered the Strait of Gibraltar on July 4, dispatching a force of 30 marines who stormed the ship. The US managed to accomplish three things at the same time: escalating the conflict with Iran; dividing the Europeans by pitching the UK against Spain, which distanced itself from the UK manoeuvre off Gibraltar; and turning the UK once again into the useful idiot of US diplomacy. Not bad for a few days' work. But it is also a clear indication of the EU's total lack of preparedness to deal with a hostile Trump administration. Unsurprisingly, the EU’s response is divided. Spain is furious about the UK’s unilateral action in international waters off the Spanish coast. The EU’s external-action service, soon to be headed by Josep Borrell, Spain’s foreign minister, is silent. Germany and France are backing the UK - at least diplomatically - for now. Russia, Japan and China are with Iran. They do not want to risk oil supplies.
Britain weighs response to Iran Gulf crisis with few good options (Reuters) - Britain was weighing its next moves in the Gulf tanker crisis on Sunday, with few good options apparent as a recording emerged showing that the Iranian military defied a British warship when it boarded and seized a ship three days ago. Prime Minister Theresa May’s office said she would chair a meeting of Britain’s COBR emergency response committee on Monday morning to discuss the crisis. Little clue has been given by Britain on how it plans to respond after Iranian Revolutionary Guards rappelled from helicopters and seized the Stena Impero in the Strait of Hormuz on Friday in apparent retaliation for the British capture of an Iranian tanker two weeks earlier. Footage obtained by Reuters from an Iranian news agency on Sunday showed the tanker docked in an Iranian port — with Iran’s flag now hoisted atop. The British government is expected to announce its next steps in a speech to parliament on Monday. But experts on the region say there are few obvious steps London can take at a time when the United States has already imposed the maximum possible economic sanctions, banning all Iranian oil exports worldwide. “We rant and rave and we shout at the ambassador and we hope it all goes away,” said Tim Ripley, a British defense expert who writes about the Gulf for Jane’s Defence Weekly. “I don’t see at this point in time us being able to offer a concession that can resolve the crisis. Providing security and escort for future ships is a different matter.” A day after calling the Iranian action a “hostile act”, top British officials kept comparatively quiet on Sunday, making clear that they had yet to settle on a response.
Britain calls for European naval mission to counter Iran's 'piracy' - Reuters- Britain called on Monday for a European-led naval mission to ensure safe shipping through the Strait of Hormuz, days after Iran seized a British-flagged tanker in what London described as an act of “state piracy” in the strategic waterway. Foreign Secretary Jeremy Hunt outlined the plans to parliament after a meeting of COBR, the government’s emergency committee, which discussed London’s response to Friday’s capture of the Stena Impero tanker by Iranian commandos at sea. “Under international law, Iran had no right to obstruct the ship’s passage - let alone board her. It was therefore an act of state piracy,” Foreign Secretary Jeremy Hunt told parliament. “We will now seek to put together a European-led maritime protection mission to support safe passage of both crew and cargo in this vital region,” Hunt said. The British announcement signals a potential shift from Washington’s major European allies who so far have been cool to U.S. requests that they beef up their military presence in the Gulf, for fear of feeding the confrontation there. It is unclear how much influence Britain may have in Europe given it is about to have a new prime minister, widely expected to be Boris Johnson, who takes over a country divided over Brexit, its planned departure from the European Union. Hunt made a point of saying that the maritime protection proposal would not involve contributing European military power to back Washington’s hardline stance against Iran. The proposed new maritime protection mission “will not be part of the U.S. maximum pressure policy on Iran because we remain committed to preserving the Iran nuclear agreement”, he said.
Allies Resist US Call For Anti-Iran Naval Force, Fearing It Would Worsen Tensions - As tensions have continued to rise between the US and Iran, American officials continue to try to court allies to join a naval force to safeguard key shipping lanes off the coast of Iran. So far, they don’t have any takers. The Trump Administration has been keen to have other nations pay for the defense of the Strait of Hormuz, and Trump has argued that the US shouldn’t have to cover the entire cost. The United States is struggling to win its allies’ support for an initiative to heighten surveillance of vital Middle East oil shipping lanes because of fears it will increase tension with Iran, six sources familiar with the matter said. — Reuters US officials, however, are clear they will be in total control of this foreign fleet of ships they’re trying to recruit. Some nations are okay with sending a few ships to escort their own tankers, but diplomats say that there is a lot of resistance to being seen as part of a US-formed fleet that would increase tensions even further. “Nobody wants to be on that confrontational course and part of a US push against Iran,” an official was quoted by Reuters as saying. Pentagon officials argue that the goal is not to encourage a confrontation, though everyone else seems to notice this is the end-result of US efforts in the area, and doesn’t want to be involved.
Gulf crisis uniquely difficult strategic moment for UK – BBC - The Gulf crisis catches the UK at a uniquely difficult strategic moment. Its military means are quite limited, Iran's are greater than many might think, and the option of defaulting into its usual partnership with the US is not straightforward because of disagreements over the wisdom of breaching the nuclear deal. For this reason, on Monday, UK Foreign Secretary Jeremy Hunt suggested that the response to the crisis should include a "European-led maritime protection mission", complimentary but separate to the US effort. The issue, he insisted, was one of freedom of navigation in the Straits of Hormuz rather than increasing pressure on Iran. The UK's options for protecting its merchant shipping in the busy Gulf sea lanes are distinctly limited. The US has suggested opting into a joint system for convoying ships past the Iranian littoral, but British decision makers are reluctant to do so - because they disagree with President Trump's decision to exit the Iran nuclear deal in May 2018 and believe this step prompted the current tensions. The other option for a rapid change to the dynamic would be releasing the tanker Grace I from custody in Gibraltar, where it was detained on suspicion of carrying Iranian oil to Syria. Last week British officials had been upbeat that a solution to that situation could be negotiated, and then the UK-flagged ship Stena Impero was seized by Iran in Omani waters. It may well be that the release of both vessels provides de-escalation. But the longer term questions about UK-US disagreement on Iran policy, and inability to protect shipping, will remain.
UK Oil Tankers Flee Persian Gulf Amid Iran Tensions-- Two weeks ago there were six British-flagged oil tankers in the Persian Gulf going about their business. A week later there were none. Iran’s threat to seize a British ship in retaliation for the arrest of the Grace 1 off Gibraltar has effectively closed the world’s most prolific oil region to U.K. carriers. The tankers in the Persian Gulf on July 9 were all registered in the Isle of Man, a self-governing British crown dependency, but that wasn’t enough to spare them from Iranian harassment. One of them, the British Heritage, left the region without loading its intended cargo of Iraqi crude and needed the Royal Navy frigate HMS Montrose to chase off Iranian patrol boats as it entered Hormuz. At least two others were also escorted out of the Gulf. There are 243 oil tankers -- either listed as crude oil tankers, oil products tankers, or chemical/oil products tankers -- sailing under the flag of the United Kingdom, the Isle of Man, or Gibraltar, according to tanker tracking data compiled by Bloomberg. About half of them are registered in the Isle of Man, with the other half divided roughly equally between Gibraltar and the U.K. Ships usually enter the region, load their cargoes and depart again within a matter of days. What is abnormal, is that no British-flagged oil tankers have arrived in the region in the past two weeks. On any one day, there would normally be three or four of them somewhere in the Persian Gulf. Since July 15, none have been observed. The only British-flagged tanker to try entering the Persian Gulf in the past two weeks, the Stena Impero, was boarded and impounded by Iran’s Revolutionary Guard as it sailed through the Strait of Hormuz, the narrow waterway that connects the Middle East’s major oil and gas export facilities to the open seas, on July 19. Its capture shows just how easy it is for Iran to hinder traffic through Hormuz. Until tensions ease, British tankers are likely to keep away from the Persian Gulf.
Iran's president warns foreign powers to keep naval ships out of the Persian Gulf -- Iranian President Hassan Rouhani has told his cabinet that protecting security around the Persian Gulf is solely the responsibility of countries in the region and that other nations should stay away. The United Kingdom is attempting to form an alliance with other nations to protect ships passing through the Persian Gulf and Strait of Hormuz, a channel that sees 20% of the world’s oil supply pass through it. A U.K. ministry of defense spokesperson confirmed to CNBC Wednesday afternoon that negotiations were ongoing with a number of countries within Europe as well as others including India, the United States and Pakistan. Iranian Revolutionary Guards (IRGC) seized a British Ship traveling through the channel on Friday, an apparent tit-for-tat measure after the United Kingdom had previously impounded an Iranian tanker in the Mediterranean which was suspected of intending to deliver oil to Syria’s Assad regime. Such a move is banned by EU sanctions. Speaking to his cabinet Wednesday, and in a translation subsequently published on Rouhani’s official English language website, Iran’s president said foreign military might from other parts of the world should not send armed ships to the region. “The main responsibility for protecting the Strait of Hormuz and the Persian Gulf is mainly with Iran and neighbouring countries, and is not the others’ business, and the Iranian nation has always been the protector of the Persian Gulf,” Rouhani said. He then praised his military team for taking control of the Stena Impero on Friday, a British flagged tanker traveling through the Strait of Hormuz. “The IRGC courageously seized the British ship because it had refused all the orders and warnings. They did a very accurate, professional and right thing and I believe that the whole world must be grateful to the Revolutionary Guard for ensuring the security of the Persian Gulf,” said Rouhani.
Iran Announces Military Will Secure Contested Strait Of Hormuz - Hopefully it doesn't lead to a let's roll! moment at the White House, where super-hawk national security adviser John Bolton has no doubt been itching for escalation: moments ago Iran's Deputy Foreign Minister announced military forces will "secure" the Strait of Hormuz. Iran will "not allow disturbance in shipping in this sensitive area" Deputy Foreign Minister Abbas Araghchi was quoted as saying in state media, while leading a delegation to Paris, Reuters reports. However, it's unclear at this point how far Iran is willing to go in this escalating game of chicken with the US and UK - both of which have warships and other military assets in the gulf region. “Iran will use its best efforts to secure the region, particularly the Strait of Hormuz, and will not allow any disturbance in shipping in this sensitive area,” Araqchi told French Foreign Minister Jean-Yves Le Drian during a meeting.The announcement comes amidst threats and counter threats ongoing between London and Tehran, with each demanding the release of their tanker. Early this month the Royal Navy seized the Grace 1, carrying 2 million barrels of oil, off Gibraltar; and in turn Iran last Friday captured the British-flagged Stena Impero in the Strait of Hormuz. To be sure, this is not the first time Iran has made such a threat: back in April and before that in December Iran warned it would close the global oil chokepoint, when it said that "if someday, the United States decides to block Iran’s oil (exports), no oil will be exported from the Persian Gulf." Meanwhile, Iranian vice-president, Eshaq Jahangiri, said that Iran rejects UK-led attempts to establish a "joint European task force" to monitor and patrol the Persian Gulf in order to protect international shipping, countering that it would only bring "insecurity".
What It’s Like to Steer a Giant Tanker Through the Strait of Hormuz - John Smith is trying to get some rest, but he’s nervous. In a few hours, he’ll navigate his 1,100-foot tanker—a vessel and cargo that together are valued at well in excess of $100 million—through the world’s most important, and lately most dangerous, chokepoint for global energy flows. “There will be six of us on the bridge looking out for ‘fast boats’ approaching,” says Smith, whose name was changed to protect his security, writing by email from his ship. “Not sure six people on the bridge will have any deterrent effect on troops abseiling down onto the ship from a helicopter. All on board are nervous of the situation. Also of course the families at home.” At the time he emailed, Smith’s ship, one of the world’s largest, still had eight hours before it made it through the Strait of Hormuz, a waterway linking the oil-rich Persian Gulf with global markets. A third of the world’s seaborne petroleum, and a huge volume of liquefied gas, pass through the strait every day. On July 19, Iran seized a U.K.-flagged tanker there in an apparent retaliation for Britain’s Royal Marines helping to arrest a vessel transporting Iran’s crude in the Mediterranean earlier in the month in an alleged violation of Syria sanctions. Smith is responsible for 30 crewmen of various nationalities. His fears—perhaps the first time such anxieties have been expressed by a captain of a Gulf tanker since the crisis began—highlight the plight of merchant seafarers who’ve been caught up in tensions between Iran on one side and the U.S. and Britain on the other that have been turning increasingly confrontational in recent weeks. Since mid-May, a half-dozen ships have been attacked in the region, with Washington blaming Iran for the incidents. Iran, which denies the charges, is furious that the Royal Marines helped seize a cargo transporting Iranian crude oil near Gibraltar in the Mediterranean Sea and, before the July 19 seizure, had vowed to retaliate. U.S. and Iranian drones have been getting blown up. On July 22, Iran announced it had rounded up 17 alleged CIA-trained spies and planned to execute them. On Twitter, Trump described the Iranian claim as “totally false” and “just more lies and propaganda (like their shot down drone).”
Libya Seizes Italian Ship In The Gulf Of Sirte - Another vessel has been seized on the high seas...but the parties involved might be surprising to some. Sputnik reports that Libya has seized an Italian vessel in the Gulf of Sirte. The seizure comes as tensions between Iran and the UK climb as both countries have seized tankers. Iran captured two British-flagged oil tankers in retaliation for British Royal Marines seizing a Panamanian-flagged tanker carrying a shipment of Iranian crude. Though the motive for the seizure hasn't yet been made clear, many suspect piracy or some kind of fisherman's dispute (the ship was a fishing trawler). Rome told Italy's ambassador to Libya to "work promptly with the utmost efficacy to ensure the correct treatment and rapid release of the crew and the vessel...which has been forced to head for Misrata," the ministry told Sputnik. The waters where the Italian ship was seized are denoted as "high risk," mostly because of the instability in Libya, which hasn't had a functioning national government since the NATO-backed ouster of Muammar Gaddafi. However, in Misrata, the part of Libya closest to where the ship was seized, the Government of National Accord, the Italian and UN-recognised Libyan government, is believed to be in control.
The fake Twitter accounts influencing the Gulf crisis - On June 6, 2017, a group of four countries - Saudi Arabia, the United Arab Emirates (UAE), Bahrainand Egypt - cut all diplomatic ties with their Gulf neighbour, Qatar.They cited several reasons for breaking ties, but the main accusations the blockading countries laid out centred on allegations that Qatar supported "terrorism" and was working on "destabilising the region", accusations Doha has consistently denied.What many did not know is that some of the groundwork for the blockade had already been laid on social media platforms like Twitter.An online propaganda battle, which started in the months before the GCC Crisis, continues to this day, Al Jazeera has found. Using a combination of data collection and language processing, Al Jazeera has analysed more than 2.3 million tweets from almost 2,400 accounts, sent between June 2017 and October 2018.The analysis found that bots - Twitter accounts that are either fully or partially automated to amplify certain messages, hashtags or opinions - play a significant role in the online conversation about the blockade. "In the two months before the Gulf Crisis started, a network of Twitter accounts was set up specifically to have anti-Qatar messages in their bios," Marc Owen Jones, assistant professor of Middle East Studies at Hamad Bin Khalifa University in Doha and fellow of the Exeter Institute of Arab and Islamic Studies, told Al Jazeera.Jones has spent the last several years researching how Twitter in the Middle East, and in the Gulf region especially, is being manipulated to spread propaganda. "The methodology that I use to identify these bots is by looking at account creation dates," Jones said. "If you see a huge amount of accounts created on the same day tweeting on the same topic and they don’t really interact with people, you can be almost certain they’re bots," he said.
Hundreds Of US Troops Begin Deployment To Saudi Arabia To Counter Iran - The deployment of hundreds of US troops to Saudi Arabia as part of a build-up to counter Iran in the region amid soaring tensions and a dangerously ratcheting "tanker war" has begun, TheWall Street Journal reported Friday night. The Pentagon first revealed on Wednesday that 500 of the 1000 total troops announced by the White House last month to bolster US presence in the Middle East would be heading to the Prince Sultan Air Base, situated in the desert east of Riyadh. Crucially, Prince Sultan Air Base has been closed to American troops since the rapid fall of Baghdad and overthrow of Saddam at the start of the 2003 US invasion of Iraq. The WSJ report confirms the new deployment is en route within 24 hours after Iran's elite IRGC seized two British tankers in the Strait of Hormuz. One tanker has already released, but the other - British-flagged Stena Impero and its crew - is still being detained. According to the report: The military already has begun to deploy more than 500 U.S. service members to Prince Sultan Air Base, about 150 kilometers southwest of Riyadh, officials said. Saudi officials didn’t respond to requests for comment. Officials from U.S. Central Command, which overseas the Middle East, declined to comment.It's the latest sign that the Trump Administration is continuing its military buildup in the region, which has so far included fighter jets, B-52 bombers, an aircraft carrier strike force, Navy destroyers and - of course - more troops.Citing two senior defense officials, CNN had previously reported that a small number of troops were already in the area, and initial preparations were being made for a Patriot missile defense battery as well as improvements to a runway and airfield. US security assessments have determined that the area would be ideal for US troop deployment because it would be difficult for Iran to target with missiles. Satellite images obtained by CNN revealed the initial deployment to the air base in mid-June. Other images showed more preparations were made at the site earlier this month.
Iran's Military Vows Attack On All Regional US Bases If War Starts - Iran has again rejected the prospect of new negotiations with the White House "under any circumstances," according to an interview with Supreme Leader Ayotallah Ali Khamenei’s Military Adviser Hossein Dehghan, cited in Al Jazeera. The Islamic Republic's top military adviser further warned Iran and its regional allies will target all American bases in the region should the US launch war plans, while reiterating Iran's ability to block the vital Strait of Hormuz to global oil transit. Everyone must be able to freely transit the Persian Gulf waterway or no one at all, Dehghan warned. Yesterday, Iranian vice-president, Eshaq Jahangiri, said that Iran rejects UK-led attempts to establish a "joint European task force" to monitor and patrol the Persian Gulf in order to protect international shipping, countering that it would only bring "insecurity".“There is no need to form a coalition because these kinds of coalitions and the presence of foreigners in the region by itself creates insecurity,” he said. And added, “And other than increasing insecurity it will not achieve anything else.” France, Italy, the Netherlands and Denmark indicated Tuesday they would support a European-led naval mission to ensure international vessels' safe passage in the gulf. Iran's Deputy Foreign Minister further informed France directly while in Paris meeting with top French officials including the president, that Iran's own military forces will "secure" the Strait of Hormuz and will "not allow disturbance in shipping in this sensitive area," Reuters reported earlier.Meanwhile, threats and counter threats have continued to fly between London and Tehran, with each demanding the release of their tanker while accusing the other of "piracy". Early this month the Royal Navy seized the Grace 1, carrying 2 million barrels of oil, off Gibraltar; and in turn Iran last Friday captured the British-flagged Stena Impero in the Strait of Hormuz. On Wednesday Iran's Hassan Rouhani appeared to offer a new deal that could break the stalemate, suggesting that should the UK release the Grace 1, Iran would reciprocate by releasing the Stena Impero. "If Britain steps away from the wrong actions in Gibraltar, they will receive an appropriate response from Iran," Rouhani said Wednesday addressing a weekly cabinet meeting. The words came the same day Britain reportedly sent a mediator to Iran seeking the release of the Stena Impero.
The Next U.S.-Iran Flashpoint Could Be Iraq-- Drones have been downed and tankers attacked in the Persian Gulf as U.S.-Iran tensions raise fears of war around a critical oil chokepoint. But any conflict between rivals might actually start in the one country where both sides have forces on the ground: Iraq. After two wars with America since 1990, a brutal civil conflict and the rise of Islamic State more recently, about 5,200 U.S. troops are stationed in Iraq -- amid thousands of Iranian-backed Shiite militias, controlled by officials in Baghdad sympathetic to Tehran. That complicated reality leaves Iraqi officials in a difficult situation as they navigate security ties with the U.S. and their political and religious links to Iran, according to Ali Vaez, director of the Iran Project at the International Crisis Group. “The Iraqi government cannot afford to alienate either side,” Vaez said in a phone interview from Washington. “That is exactly why now it finds itself between a rock and hard place.” So far direct conflict has been avoided, and open warfare is unlikely given greater U.S. firepower, but it’s an uneasy lull. The U.S. pulled non-emergency staff from its embassy in Baghdad -- its largest and most expensive mission in the world -- and closed its consulate in Basra late last year as officials worried that Iran was undermining Iraq’s central authority, as well as Washington’s influence. The consulate remains closed. Exxon Mobil Corp. temporarily evacuated its foreign employees from a camp near the West Qurna-1 oil field in Basra in southern Iraq after a nearby rocket attack. In June, rockets hit an official compound in the northern Iraqi city of Mosul and the Taji Military camp near Baghdad, both of which house American military advisers, according to local press reports. Some “rogue” Iranian-backed militias “plot against U.S. interests and plan operations that could kill Americans, coalition partners and Iraqis,” Joan Polaschik, the acting principal deputy assistant secretary of state for Near Eastern affairs, said at a Senate hearing last week. These groups monitor U.S. diplomatic facilities and “continue to conduct indirect fire attacks,” she said. At the same hearing, Deputy Assistant Secretary of Defense for the Middle East Michael Mulroy said that Iran’s “cynical interference” undermines Iraqi interests and “jeopardizes” stability. ‘Loyal to Tehran’
A mysterious drone attacked 'Iran-backed militia' in Iraq - Israel News -A drone attacked Iraqi Security Forces on Friday that were deployed 180 km. north of Baghdad, near the city of Tuz Khurmatu. Initially reported as an attack on Iranian-allied forces, including the Islamic Revolutionary Guard Corps (IRGC), the mysterious drone incident is still being investigated, and it is not clear where it came from or who carried out the attack that left several wounded. What we know is that something happened. The US-led anti-ISIS coalition put out a statement on July 19 saying they were aware of reports “of an attack against the Iranians and a Popular Mobilization Force unit in Salah a-Din [governorate]. Coalition Forces were not involved, and we have no further information at this time.” The coalition responded because of rumors circulating on social media and in Iraq seeking to blame the US for the incident. The day of the drone incident was the same day that the US said it used electronic warfare to take down an Iranian drone that was harassing the USS Boxer near the Straits of Hormuz. In another incident on the same day, Iran raided a British-flagged oil tanker, so tensions were already high that day. Different media have reported the incident. Kurdistan 24 wrote that “unidentified drone bombs Iran-allied militia in Iraq.” It said the incident occurred near Amerli, which is south of Tuz Khurmatu, and that the victims were from the “al-Shohada military camp of the Turkmen Brigades, part of the Iraq’s Hashd al-Shaabi militias.” This was according to Iraq’s Security Media Cell, Kurdistan 24 reported. Reports said that the drone “dropped grenades” and injured two people, but also said an ammunition depot was struck and one killed. The Hashd al-Shaabi are called the Popular Mobilization Units (PMU) and are a group of mostly Shi’ite paramilitaries who were raised to fight ISIS, but who became part of the Iraqi security forces in 2018 and are now standardized military units.
Iran’s two armies - On 5 May the US announced it was deploying the USS Abraham Lincoln Carrier Strike Group and a bomber task force to the Gulf. National Security Advisor John Bolton said this was ‘in response to a number of troubling and escalatory indications and warnings’ and told Iran that ‘any attack on United States interests or on those of our allies will be met with unrelenting force.’ Tension in the Gulf and on the Arabian peninsula has continued to rise, and Washington’s allies Saudi Arabia and the United Arab Emirates have, with varying degrees of explicitness, blamed Iran for the sabotage of oil tankers near the Strait of Hormuz and the increase in Houthi rebel activity in Yemen. Bolton went on to say, ‘The United States is not seeking war with the Iranian regime, but we are fully prepared to respond to any attack, whether by proxy, the Islamic Revolutionary Guard Corps, or regular Iranian forces.’ This ominous statement makes it clear that the possibility of armed conflict between Iran and the US, its Gulf allies and Israel, while still only theoretical, cannot be discounted. It is also a reminder that any belligerent attacking the Islamic Republic of Iran will be met by two distinct military forces: the regular army and the Revolutionary Guards. To understand their origins and assess their capability to withstand a US military intervention, it’s necessary to go back 40 years to the days that followed the fall of the shah.
Israeli Minister Brags That His Country Has Been “Killing Iranians for Two Years” — An Israeli minister boasted on Sunday that his country was the only one that “has been killing Iranians,” after tensions between Britain and Iran rose in the Gulf. Regional Cooperation Minister Tzachi Hanegbi’s comments on public radio were a reference to Israeli strikes in neighbouring Syria against Iranian and Hezbollah military targets. But they came after Iran seized a British-flagged tanker on Friday, adding to tensions between Washington and Tehran linked to a 2015 nuclear deal. Hanegbi accused Iran, Israel’s main enemy, of seeking to create “chaos” and “harm freedom of navigation”. Asked if he feared that Israel would not receive the backing of the United States in the case of a conflict with Iran, Hanegbi suggested that Tehran would avoid such a scenario.“Israel is the only country in the world that has been killing Iranians for two years,” he said.“We strike the Iranians hundreds of times in Syria. Sometimes we acknowledge it and sometimes foreign reports reveal it.“You can see that the Iranians are very limited in their responses, and it’s not because they don’t have abilities – it’s because they understand that Israel means business.”Israel has carried out hundreds of strikes in Syria against what it says are Iranian and Hezbollah military targets.It has vowed to keep Iran from entrenching itself militarily there.Prime Minister Benjamin Netanyahu spoke in a similar vein last week with cadets at the National Security College.“At the moment, the only army in the world to fight Iran is the Israeli army,” he said.Earlier this month, Netanyahu warned that Israeli fighter jets “can reach anywhere in the Middle East, including Iran”. Iran’s seizure of a British-flagged tanker in the Strait of Hormuz for breaking “international maritime rules” came some two weeks after Britain seized an Iranian tanker at the mouth of the Mediterranean on allegations of breaching UN sanctions against Syria.
Iran Claims IAEA Chief Behind Nuclear Deal Eliminated By Israeli Intelligence -Iran state media has made bombshell sensational claims of a conspiracy assassination of the head of the International Atomic Energy Agency (IAEA), whose death was reported early this week, prompting a firm denial from the powerful UN nuclear watchdog body. On Wednesday semi-official Tasnim news agency claimed Israeli intelligence "eliminated" Yukiya Amano, who was the Director General of the IAEA and oversaw the singing of the landmark 2015 P5+1 nuclear deal (JCPOA). Iranian sources allege the covert assassination was carried out on the powerful staunch supporter of the JCPOA in order to gain leverage to force Tehran into dealing with the Trump White House's “pressure-talks” scheme, as Tasnim put it. The 72-year old Amano, who was also a career Japanese diplomat, was considered a huge influence in seeing the Iranian nuclear deal through and ensuring its continued survival over and against recent Trump administration pressure. Trump had famously called the 2015 agreement brokered by the Obama administration "the worst deal ever negotiated" before ordering the unilateral US pullout. The UN nuclear watchdog chief died on July 18, with the family only disclosing his passing on late Sunday, but no details as to the cause of death were given; however, a UN statement said he was due to step down next March due to an unspecified illness. Meanwhile Iran provided zero evidence for its wild accusation, nor did the report suggest exactly how the alleged Israeli intelligence plot was carried out. The Iranian allegation made waves inside Israel and at the IAEA Wednesday, as the Times of Israel reports: The Tehran-based outlet, which defines its mission as “defending the Islamic Revolution against negative media propaganda campaign [sic],” cited unnamed “informed sources” who insisted that Amano, a Japanese diplomat who was extensively involved in negotiations over Iran’s controversial nuclear program, had been “eliminated” after refusing to buckle to “heavy pressure” from Jerusalem and Washington.
Trump’s Peace Plan and the Future of Palestine - Last month, Jared Kushner led a delegation of US envoys to Bahrain for an “economic workshop,” where he outlined his vision for a lasting settlement between Israel and Palestine. Titled “Peace to Prosperity”, the $50 billion plan was effectively a bribe, a one-time payment intended to persuade Palestinians to abandon their core national ambitions. Roundly scorned, Kushner’s deal was rejected before it even emerged. The central innovation of “Peace to Prosperity” is its attempt to resolve what is essentially a political problem through economic means. “Land for Peace”, the organising framework of the past three decades, has been traded for “Money for Peace”, a Trumpian formula designed to work in lockstep with the increasing neoliberalism of the Palestinian Authority (PA) economic policy. The language of the plan is appropriately corporate: it speaks vaguely of ‘empowerment’ and ‘opportunity’, and leans heavily on the influence of the private sector. ‘Modern’ is a key buzzword: everything stands to be modernised, from the dilapidated transportation network in Gaza, to the old-school inspection techniques that clog up West Bank checkpoints. Palestinians are envisioned as customers in a vast transnational business deal, rather than political subjects making a moral and historical claim to their land. There is no mention of an occupation, or of a Palestinian state. The plan’s appeal, such as it is, is directed squarely at Palestinian desperation, designed to exploit their powerlessness in a region increasingly dominated by Israel. Kushner’s deal is not distinguished by its newness – the PA has been trading resistance for economic incentives since at least the Oslo accords – but by its ineptitude. Its specifications are either suspiciously vague, or haphazard and incoherent. With the economic portion of the deal having been rejected, attention will soon turn to the next chapter of this long, doomed process: the release of Trump’s political plan, the centrepiece of the much-hyped ‘deal of the century’.
Trump Says He Could Kill 10 Million People, Wipe Afghanistan Off Face of the Earth - — Kabul reacted with outrage and demanded clarification Tuesday after U.S. President Donald Trump said he has military plans that could wipe Afghanistan “off the face of the Earth,” killing millions of people.Following Trump’s remarks, the office of Afghan President Ashraf Ghani said in a statement that Afghanistan “will never allow any foreign power to determine its fate.”“While the Afghan government supports the U.S. efforts for ensuring peace in Afghanistan,” the statement read, “the government underscores that foreign heads of state cannot determine Afghanistan’s fate in absence of the Afghan leadership.”Trump’s comments came during a meeting in the Oval Office Monday with Pakistani Prime Minister Imran Khan. “We’re not fighting a war,” Trump said of the U.S.-led conflict that has lasted nearly 18 years, the longest war in American history. “If we wanted to fight a war in Afghanistan and win it, I could win that war in a week. I just don’t want to kill 10 million people.”“I have plans on Afghanistan that, if I wanted to win that war, Afghanistan would be wiped off the face of the Earth. It would be gone,” the president added. “It would be over in, literally, in 10 days. And I don’t want to do that—I don’t want to go that route.”Watch:The Afghan public expressed revulsion at Trump’s remarks, which came as U.S. envoy to Afghanistan Zalmay Khalizad arrived in the Middle East for talks with the Taliban.Shakib Noori, an entrepreneur based in Kabul, told Reuters that Trump’s comments were “embarrassing and an insult to all Afghans.” Afghan-American author Khaled Hosseini expressed a similar sentiment, calling Trump’s statement “reckless” and “appalling.”
Ukraine Seizes Russian Oil Tanker, Moscow Threatens Consequences --Ukraine’s security services said on Thursday they had detained a Russian oil tanker that had blocked Ukrainian warships near Crimea in November, drawing reaction from Russia which vowed ‘consequences’ should Russians aboard the tanker be taken hostage. On Thursday, Ukraine’s security service seized Russian tanker Neyma, which Ukraine believes took part in the incident in the Kerch Strait near Crimea in November 2018. Russia seized at the end of November three Ukrainian ships near Crimea in an incident that risked spilling over into a wider conflict between the two countries, exacerbating the disputes between Moscow and Kiev over oil and gas resources and infrastructure.Russia—which annexed Crimea in 2014, for which the U.S. and the EU imposed sanctions on Moscow—said at the time that three Ukrainian vessels had violated its state border in waters near Crimea.Ukraine, for its part, said that it had informed Russia about the plans for the ship movements and said that the seizing of the vessels was “another act of armed aggression” by Russia. The November 2018 incident was the first open conflict between Russian and Ukrainian militaries in recent years. Tensions had been rising over the access to the Kerch Strait, where the incident took place, and the Sea of Azov.
Turkey Prepared To Reinvade Cyprus If Needed - Erdogan Says Following EU Sanctions - Turkey's military is prepared to reinvade Cyprus “if needed for the lives and security of Turkish Cypriots,” Turkish President Recep Tayyip Erdogan said on Saturday. “The entire world is watching our determination. No one should doubt that the heroic Turkish army, which sees [Northern] Cyprus as its homeland, will not hesitate to take the same step it took 45 years ago if needed for the lives and security of the Turkish Cypriots,” state-run Anadolu News Agency quoted Erdogan as saying. Erdogan issued the statement as the nation marks the 45th anniversary of Turkey's deeply controversial invasion of northern Cyprus in 1974, long condemned by the bulk of UN member countries. But the provocative remarks come amidst what EU-member Cyprus has dubbed a "second invasion" involving illegal Turkish oil and gas drilling, accompanied by Turkish warships, F-16s, and drones to ensure "protection" of its drilling vessels. The EU agreed on Monday to bring financial and political sanctions against Turkey after repeat warnings of the past weeks over Ankara deploying multiple offshore drilling vessels into international recognized Cypriot waters. The European Union announced 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."The most serious measure will involve a cut of 145.8 million euros ($164 million) in European funds allocated to Turkey for 2020, according to a prior AFP report.
British Airways, Lufthansa suspend flights to Cairo - British Airways and Lufthansa have suspended flights to Egypt's capital, Cairo, over unspecified security concerns, giving no details about what may have prompted the move. "We constantly review our security arrangements at all our airports around the world, and have suspended flights to Cairo for seven days as a precaution to allow for further assessment," British Airways said in a statement on Saturday. When asked for more details about why flights had been suspended and what security arrangements the airline was reviewing, a spokeswoman responded: "We never discuss matters of security." Meanwhile, a spokesperson from Lufthansa, which operates flights to Cairo from Munich and Frankfurt, said: "As safety is the number one priority of Lufthansa, the airline has temporarily suspended its flights to Cairo today as a precaution, while further assessment is being made. The German airline said it plans to resume its flights on Sunday.
Huawei Secretly Helped Build North Korea’s Wireless Network, Leaked Documents Suggest - Chinese tech giant Huawei could have helped secretly build a 3G wireless network for North Korea, according to internal documents leaked by a former employee of the company. Huawei worked with another Chinese company, Panda International Information Technology, on a number of projects in the region over the course of eight years, as suggested by work orders, contracts and spreadsheets published by the Washington Post on Monday.The revelations come as the latest blow to Huawei's reputation in a series of events over the past year, a period in which the company has come under fire from the US government amid its trade war with China. In January, the US Justice Department unsealed indictments that included 23 counts pertaining to the alleged theft of intellectual property, obstruction of justice and fraud related to its alleged evasion of US sanctions against Iran. President Donald Trump has blacklisted the company as a security threat, and Huawei CFO Meng Wanzhou is under house arrest in Canada awaiting extradition to the US.
What are click farms? A shadowy internet industry is booming in China -In China, the world’s largest smartphone market with over 800 million users, a unique type of farm springs up in urban areas. The only crops there are smartphones. The operations, known as click farms, can house hundreds or thousands of iPhones and Android phones on the shelves. They are plugged in and programmed to search, click, and download a certain app over and over again. The goal is to manipulate the system of app store rankings and search results. “The business of fake views is so widespread,” the South China Morning Post reported in 2018, “that Chinese state media CCTV reported that 90 per cent of views generated by many popular shows on video sites are fake.” App developers buy the service to boost their products' visibility in an effort to win a bigger slice of the $50 billion dollar online advertising market in China. In the traffic driven and metric-obsessed digital economy, the use case of click farms is expanding beyond promoting apps. People use it to inflate posts views to attract advertisers, boost video views, and game the search results on e-commerce platforms. Click farms use an automated process hacks into the normal App Store Optimization (ASO) practice — which requires developers to use certain keywords in descriptions and attract users by being a useful product — and are programmed to promote apps by imitating a real user by searching for certain keywords, clicking on the app, downloading, and even writing positive reviews. Setting up a click farm requires both hardware and software investments. Buying hundreds of iPhones, mostly second-hand ones, is not cheap. A click farm also use servers and software that could hack into the app store system. Another big cost is to buy high-quality Apple IDs, as they would be given more weight by the algorithms than a brand new account. For click farm operators, it’s a constant battle with Apple’s evolving algorithm. In one online ad, a click farm operator claimed they have updated their program after Apple cracked down such behaviors and gave more weight to actual downloads in 2016. And so click farming evolved and began involving human crowdsourcing. On China’s prevalent messaging apps WeChat and QQ, people gathered in group chats claim their task to download and review an app and get paid. The cost is usually higher than click farms, but it will look more like organic traffic and less likely to be blocked by app stores.
China’s credit push to small firms falters in factory heartland (Reuters) - China’s campaign to boost loans to small firms was supposed to support the economy during its biggest slowdown in decades, but banks’ reluctance to lend has left exporters and manufacturers in its southern industrial belt struggling to pay the bills. Despite prodding from Beijing, several bankers have told Reuters they have little appetite to lend to smaller companies due to the uncertain economic outlook, the U.S.-China trade war and a years-long drive to purge risks from the financial system. That has chilled credit flows to private sector firms, undermining stimulus measures that were designed to cushion the impact of slowing demand. In the southern city of Dongguan in Guangdong province, one of the country’s major manufacturing hubs, some small firms are moving production overseas in the face of operational and financing challenges. “These days the most discussed topic - something that we always talk about in meetings - is whether we should move to Vietnam. Many of my clients have moved there,” Li Jiajun, the chief financial officer at Guangdong LiShun Yuan Intelligent Automation Co., told Reuters. LiShun, which makes paper box packaging machinery, lost financing from two of its four banks in the second quarter, halving its total credit line to 10 million yuan ($1.5 million). One of those two banks - both are mid-sized - blamed its tighter lending policy on the first half’s economic climate, while the other said its local branch was banned from approving new loans due to a spike in bad debts, he said. As a result, the company, which expects to generate 250 million yuan in revenue this year, is delaying orders worth nearly 20 million yuan following the cut and taking “defensive measures” – slashing its payroll by 40% and selling equity to raise funds.
Hong Kong braces for fresh anti-gov’t march amid increased security measures Hong Kong is bracing for another huge anti-government march on Sunday afternoon with seemingly no end in sight to the turmoil engulfing the finance hub, sparked by years of rising anger over Beijing’s rule. The city has been plunged into its worst crisis in recent history by weeks of marches and sporadic violent confrontations between police and pockets of hardcore protesters. The initial protests were lit by a now-suspended bill that would have allowed extraditions to mainland China. But they have since evolved into a wider movement calling for democratic reforms, universal suffrage and a halt to sliding freedoms in the semi-autonomous territory. In a city unaccustomed to such upheaval, police have fired tear gas and rubber bullets while the parliament has been trashed by protesters — as Beijing’s authority faces its most serious challenge since Hong Kong was handed back to China in 1997. Sunday’s rally — which will follow a now well-trodden route through the main island’s streets — will be the seventh weekend in a row that protesters have come out en masse. Generally, the marches have passed off peacefully but are followed by violence between riot police and small groups of more hardcore protesters. Security was tightened in the city centre, with metal street fencing often used by protesters to build barricades removed ahead of the march, and large water-filled barriers thrown up around the police headquarters. The huge crowds have had little luck persuading the city’s unelected leaders — or Beijing — to change tack on the hub’s future.
Triads linked to violent pro-China gangs as Hong Kong protests enter dangerous new phase - Turbulence in Hong Kong has reached a dangerous new phase, analysts say, amid escalating violence and the failure of Chief Executive Carrie Lam to respond to the political crisis. Television broadcasts on Monday were dominated by scenes of white-shirted men believed to be triad members caning and chasing train commuters as they hunted for democracy protesters on Sunday evening. People screamed as the gangs entered train carriages at Yuen Long station. Carrie Lam fronted media on Monday to call the attacks at Yuen Long "shocking" and said she had told police commissioner Stephen Lo to pursue the culprits. But she also condemned the defacing of China’s liaison office. Thousands of black clad young protesters had meanwhile defaced Beijing’s office in Hong Kong and clashed with riot police who fired tear gas and rubber bullets after dark in the city’s Sheung Wan business district. The Chinese University of Hong Kong’s Willy Lam said "it seems that law and order has broken down and the normal running of government has broken down". Men in white shirts attacked commuters, media and residents in full view of security cameras and video and in many cases didn’t wear masks. A pro Beijing legislator Junius Ho posed for photographs with some of the men outside the station and said on Facebook on Monday that he knew some of the men and regarded them as "chivalrous". An expert in triad societies at the City University of Hong Kong, Professor T Wing Lo said that although legally it couldn’t be proven the men in white shirts were triads, "the fight last night was mobilised by a triad group, most probably Wo Sing Wo". Triad groups, which can’t cross into each other’s territories, are strong in the Yuen Long area of the New Territories, he said. He said of the 200-300 men in white shirts at Yuen Long massing outside the train station and beating people it was likely "half were triad and half were villagers paid by someone". He said such village men were typically paid $HK500 ($90) a night and more if they were injured in incidents.
"Astonishing Scenes" In Hong Kong Where Triad Members Attack Pro-Democracy Protesters As Violent Clashes Return Well over a month after the latest bout of Hong Kong street protests erupted, the situation remains tense as ever when more than seven hours after the start of a major march against Hong Kong's now-suspended extradition bill, riot police in Hong Kong fired rounds of tear gas on protesters along Connaught Road Central, following skirmishes and a tense stand-off. In an unexpected twist, the SCMP reports that in a darker turn of events on Sunday, a group of men in white suspected to be triad members attacked passengers at Yuen Long MTR station, particularly those wearing black, the color of protesters.Things turning ugly in Yuen Long - Thugs broke through the MTR gate and attacked people gathering in yuen long mtr station #antiELAB @SCMPNews pic.twitter.com/UQc81Qgv4n— Jeffie Lam (@jeffielam) July 21, 2019Confirming that China appears to be getting rather jittery, but instead of sending in the army is deploying it less "reputable" elements, a reported noted "absolutely astonishing scenes in Yuen Long, where Triad members clad in white are attacking anyone suspected of being a pro-democracy demonstrator (people wearing black are a target as that’s been the dress code for some marches, hence why triads are all in white)." Meanwhile, absolutely astonishing scenes in Yuen Long, where Triad members clad in white are attacking anyone suspected of being a pro-democracy demonstrator (people wearing black are a target as that’s been the dress code for some marches, hence why triads are all in white). pic.twitter.com/lo13nRGp0L
Who are the men in white behind Hong Kong’s mob attack? - Hong Kong is reeling after a large gang of men in white shirts brutally beat dozens of people inside a train station in a shocking new twist to the city’s summer of protest. Six men have been detained, some with gang links, police said, without elaborating. The sudden attack, which came as a massive protest was winding down Sunday night, has spurred speculation about the men’s backgrounds, motivations and possible political ties. Some of the attackers wore face masks, while others did not. All were clad in white, in contrast to the protesters’ black, and armed with wooden poles and steel rods — weapons that they seemed to swing indiscriminately at residents making their way home at the end of a long day. They descended on Yuen Long station a little more than an hour before midnight, apparently targeting pro-democracy demonstrators but hitting others as well. By the time police arrived, they had fled, leaving blood stains on the platform. Forty-five people were injured, including a man left in critical condition. Hong Kong police detained six men on Monday in connection with the attacks. Some came from rural parts of Yuen Long. They ranged in age from 24 to 54, and their occupations included drivers, hawkers and renovation workers, senior police official Chan Tin-chu said. “Some of them have triad backgrounds,” he told reporters, referring to organized crime syndicates that hold sway over certain neighborhoods in Hong Kong. T. Wing Lo, an organized crime expert at the City University of Hong Kong, said the scale of the attack indicated that it was likely organized by a triad that, with the promise of payment, rounded up people in the rural area to participate. The area around Yuen Long station is primarily controlled by two triad groups called Wo Shing Wo and 14K, Lo said, adding that the groups generally don’t allow others to commit crimes in their territory. Lo said the going rate for an attack like Sunday’s could be as much as 10 million Hong Kong dollars ($1.28 million). Most of it would go to the triad leaders, while the actual perpetrators might make 2,000 Hong Kong dollars ($250) for their work. In the past, triad members have been linked to attacks both against pro-democracy movements and in support of them. Thugs suspected of belonging to triad groups beat up protesters during Hong Kong’s 2014 Occupy Central demonstrations, and in an earlier era, they helped 1989 Tiananmen Square activists flee mainland China — all for a price.
"This Cannot Be Tolerated": Beijing Hints It Could Send Troops Into Hong Kong If Protests Don't Stop --A few days after another round of violent protests rocked Hong Kong, Beijing on Wednesday issued its harshest warning yet to the citizens of Hong Kong: It sought to remind them that Beijing has the authority to mobilize the People's Liberation Army garrison in Hong Kong if it felt that the central government's authority was threatened. The New York Times reports that the warning was part of the unveiling of the Communist Party's new "defense strategy" which relied heavily on demonizing the western powers - an oblique reference to the US and the UK - for encouraging the protests. Citing the Sunday protests, Senior Col. Wu Qian, a spokesman for China's defense ministry, implied that the destructive behavior - protesters painted the central government's liaison office with graffiti, the latest example of the extradition bill protests leading to the vandalism of government buildings - was swiftly straining the patience of Beijing."The behavior of some radical protesters challenges the central government’s authority, touching on the bottom line principle of 'one country, two systems,'" Colonel Wu said during a news conference in Beijing where he laid out the government's new strategy. "That absolutely cannot be tolerated."When pressed, Wu said that "Article 14 of the Garrison Law has clear stipulations," and refused to elaborate, the SCMP reports.
The Continuing Chinese Drag on the Global Economy - CFR -The June trade data shows a rising Chinese trade surplus. And that isn’t just a function of lower oil prices. China’s manufacturing trade surplus is up significantly.And that rise has come even as China’s manufacturing surplus with the United States has fallen a bit—which by definition means that China’s surplus with the rest of the world is rising. In fact, China's manufacturing surplus with countries not-governed by Donald J. Trump is up about $100 billion over the last 12 months.* The rise in China's overall surplus in manufacturing trade hasn’t come from particularly strong Chinese exports. Take out trade with the United States and Chinese exports are up a bit. But the pace of growth is modest. The rise in the surplus is mostly the result of weak Chinese imports. Of course, some of that change is nominal. We normally think of swings in prices impacting commodity trade, not manufactured trade. But China imported about $300 billion in imported circuits last year, and memory chip prices were way down before the recent trade fight between Korea and Taiwan. Falling prices on chips though should reduce the nominal value of both China's imports and its exports (imported semiconductors are re-exported as computers and smart phones and networking equipment)—it doesn't completely explain the current gap between China's import and export growth.And some of the fall in imports reflects falling exports to the United States, as roughly a third of China’s imports are for re-export. But if China's exports to the U.S. are down by just over 10% ($60 billion, roughly) that only works out to a $20 billion fall in China's imports from the rest of the world. The rise in China's surplus consequently seems to reflect ongoing domestic weakness (see Nathaniel Taplin of the Wall Street Journal and Keith Bradsher of the New York Times, including his report from last December; if you exclude China's "processing" imports to capture imports that are mostly for China's own use, its manufacturing imports are down), not just weakness in China's exports. And that's impacting all of China's trading partners. No one is doing particularly well selling to China right now.** U.S. imports of manufactures of non-Chinese manufactures are still up 5 percent year over year in the most recent data (last data point is May). The U.S. isn’t providing the kind of big positive impulse to the world economy that it provided in the first part of 2018 (nothing like a 10 percent y/y increase in the world's largest importer of manufactures to juice global trade numbers). However, if you set China aside, the net impulse to global trade from the United States is still positive.
China to tackle corruption in Belt and Road projects - The Chinese Communist party’s top graft inspector plans to expand its anti-corruption campaign overseas by embedding officers in countries participating in China’s Belt and Road Initiative. The ambitious $1tn project, stretching from the South Pacific to the fringes of Europe and Latin America, is seeking to build bridges, ports and roads through some of the world’s poorest countries and has already been flagged as a potential hotbed of local and Chinese corruption. Several public incidents, such as the US arrest and conviction of Belt and Road advocate Patrick Ho, have been viewed as setbacks for the global profile of the programme. Until now, the Communist party’s graft buster, the Central Commission for Discipline Inspection, has had limited involvement in Belt and Road projects. Since 2013, it has focused on an aggressive domestic anti-corruption campaign, a signature policy of President Xi Jinping that has purged members of the country’s top leadership as well as tens of thousands of low-level bureaucrats. But the scale of BRI is pushing the corruption watchdog to expand its presence internationally to monitor the activity of Chinese companies, CCDI’s head of international operations told the FT. CCDI launched a pilot programme in the south-east Asian nation of Laos in late 2017 to oversee a railway project being built by a state-owned company. CCDI embedded its inspectors in the project, allowing them to work alongside the company. It has also set up a joint inspection team with its Laotian counterpart. Recommended FT Podcast Listen: China’s BRI — a new colonialism? It plans to expand those operations by embedding inspectors in other large projects across the region. “We are trying to gather these practices into a standard format and copy it for other mega projects to follow suit,” said La Yifan, director-general for international co-operation at the CCDI. “So many countries have shown interest to follow suit, including the Philippines and other neighbouring countries.”
Beijing strengthens its hold on South China Sea - Beijing has taken another major step in its slow but doggedly persistent campaign to fix the South China Sea as a “Chinese lake.” Between June 29 and July 3 it test-fired a series of anti-ship, medium-range missiles into a 22,000 square kilometer bloc of the South China Sea between the disputed Paracel and Spratly island groups. The tests are bringing to the waters of the South China and East China seas a situation that is alarmingly reminiscent of one of the most dangerous periods of the Cold War in Europe. Throughout the 1980s the Soviet Union and NATO faced off with what were known as “theatre” short and medium-range nuclear missiles. These were aimed at deterring “blitzkrieg” tank, infantry and air-to-ground attacks by either side across the plains of Central Europe. But there was much popular outrage in the West because these weapons were seen as inherently more easy to trigger and strategically unstable than the regular intercontinental ballistic missile forces. Moscow and Washington eventually agreed to ban them. Among the missiles tested by China earlier this month are believed to have been the DF-21D, the fearsome “carrier killer.” This would be the first known full-flight test of the 1,500 kilometer-range DF-21D over the sea. The missile is specifically designed to attack aircraft carriers and is almost impossible to defend against because it drops vertically onto its target and is maneuverable in its terminal phase. Other missiles reported to have been tested over the South China Sea are the DF-26, which has a range of up to 5,000 kilometers and can have either a nuclear or conventional warhead. The DF-26 is known as the “Guam Express” because of its ability to attack the island of Guam where the US maintains a major military base for power projection in the north and west Pacific Ocean. The tests were a vivid warning to the United States in particular that its warships and aircraft carrier battle groups are vulnerable when crossing the South China Sea, or coming to the aid of threatened allies in waters claimed by Beijing. Likewise, the tests told the countries of Southeast and East Asia who rely on Washington’s power to keep the peace, that the calming threat of US intervention is no longer entirely credible.
U.S. Warship Sails Through Taiwan Strait Ahead of Trade Talks - An American warship’s sail past Taiwan was the sixth such voyage this year -- the most since President Donald Trump took office -- as the U.S. ramps up military support for the democratically run island. The guided-missile cruiser USS Antietam completed a transit through the Taiwan Strait on Thursday, Seventh Fleet spokesman Clay Doss said, adding that it “demonstrates the U.S. commitment to a free and open Indo-Pacific. China, which views such passages as provocative because they reaffirm American support for Taipei, urged Washington to “avoid undermining China-U.S. relations and the peace and stability across the Taiwan Strait.” The transit highlights one of the deepest disputes between the U.S. and China just days before Trump’s trade envoys are due in Shanghai to discuss a resolution to their unprecedented trade war. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are set to travel to China on Monday for the first high-level, face-to-face talks between the two sides since discussions faltered in May. U.S. warships have conducted nine such passages through the 180-kilometer (110 mile) wide waterway since last July, after going more than 12 months without one. Several of those operations have occurred just ahead of trade talks between the two sides. “We have expressed our concern to the U.S. side,” Foreign Ministry spokeswoman Hua Chunying told a briefing Thursday in Beijing. “The Taiwan issue concerns the sovereignty and territorial integrity of China. It is the most important and sensitive issue amid China-U.S. relations.”
China Expands Military Reach With 'Secret' Deal For Cambodia Base --China and Cambodia reached a (no longer) secret agreement last spring which allows Beijing to make use of a Cambodian navy base near the coastal city of Sihanoukville, according to the Wall Street Journal, citing US and allied officials familiar with the matter. The deal gives China exclusive rights to a portion of Ream naval base in the Gulf of Thailand, close to an airport being constructed by a Chinese firm. According to an early draft of the deal seen by US officials, China will be allowed to use the base for 30 years, with automatic renewals once per decade after that. Beijing will be able to use the base to post military personnel, dock warships and store weapons. According to the early draft of the base accord, China would build two new piers—one for Chinese use, one for Cambodian, U.S. officials said. U.S. officials said further dredging would likely be needed for the base to host larger Chinese navy ships. The draft also allows China’s personnel to carry weapons and Cambodian passports, and requires Cambodians to get Chinese permission to enter the 62-acre Chinese section of Ream, U.S. officials said. -Wall Street JournalAs the Journal notes, "Military operations from the naval base, airport, or both, would sharply increase Beijing’s capacity to enforce territorial claims and economic interests in the South China Sea, to threaten American allies in Southeast Asia and to extend its influence over the strategically important Malacca Strait."
China caught in crossfire of Tokyo-Seoul chipmaking feud -- Japan's plan to impose further export restrictions on Seoul is casting a shadow over China's technology sector, which now relies heavily on South Korean companies for its semiconductor supply. Major South Korean chipmakers Samsung Electronics and SK Hynix together are responsible for about 50% to 70% of the world's memory chip market, and they produce a sizable chunk of that in China using materials imported from Japan. But Tokyo could slam the brakes on those shipments, which could also have implications for the global chip industry. Japan's Stella Chemifa and Morita Chemical Industries currently supply about 90% of high-grade hydrogen fluoride etching gas -- used in the process of etching circuits on chips that is an essential ingredient in semiconductor production in South Korea. The gas is one of three Japanese exports that now requires case-by-case government approval under tightened rules. Tokyo has said it implemented the new regulations over national security concerns. Japan exported about 36,800 tons of hydrogen fluoride to South Korea last year, according to Japanese government data. "Etching gas imported from Japan is processed in South Korea and used at chip plants of Samsung and SK Hynix," a source at South Korea's Ministry of Trade, Industry and Energy. "Some of the material is then exported to their sites in China." The source stressed such shipments are subject to stringent controls. "When the etching gas is exported to China, we require vendors to report who the end user will be, and to sign a contract to stick to the plan," the source said. "If the material ends up somewhere other than the indicated end user, or if we find that the vendor filed false information, we take legal action." The shipments are still relatively straightforward because South Korea is on Japan's white list of trusted trade partners. If Japan removes the country from its list, which it is considering doing as early as the end of August, reexport procedures could become significantly more complicated.
S Korea fires warning shots at Russian aircraft- South Korea says its jets fired warning shots at a Russian surveillance plane that entered its airspace on Tuesday. Officials said the plane twice violated the airspace over the disputed Dokdo/Takeshima islands, which are occupied by South Korea but also claimed by Japan. South Korea's ministry of defence said it scrambled fighter jets in response and fired 360 machine-gun rounds. Russia has denied violating the country's airspace. Moscow said two of its bombers carried out a planned drill over "neutral waters" and denied any warning shots were fired by South Korean jets. South Korea's military said that in total three Russian and two Chinese military aircraft entered the Korea Air Defense Identification Zone (KADIZ) on Tuesday morning. It said this group was made up of two Russian Tu-95 bombers, one Russian A-50 surveillance plane and two Chinese H-6 bombers. Russian and Chinese bombers and reconnaissance planes have occasionally entered the zone in recent years. Overseas aircraft should identify themselves before entering an air defence zone.
Dangerous encounter of warplanes from four nations over Sea of Japan - A dangerous incident on Tuesday over the Sea of Japan, involving war planes from Russia, South Korea, China and Japan, has highlighted the growing risk of a major conflict that could engulf the region, one of the most strategic in the world. According to Seoul’s Defense Ministry, the incident began when two Russian Tu-95 bombers and two Chinese H-6 bombers entered South Korea’s Air Defense Identification Zone (ADIZ) between the Korean Peninsula and Japan without notice around 8:40 a.m. for 24 minutes. Shortly after that, an unarmed Russian A-50 early warning and observation aircraft allegedly twice entered airspace claimed by South Korea around the Dokdo/Takeshima Islets. Japan also claims the islets. In response, South Korea dispatched F-15 and F-16 fighter jets. After sending 30 warning messages which went unanswered, according to Seoul, its fighters fired warning shots at the Russian A-50, 80 on the first incursion and 280 on the second. Russia, which does not recognize Seoul’s ADIZ, initially said its planes were over international waters and that South Korean jets “conducted unprofessional maneuvers by crossing the course of Russian strategic missile carriers, threatening their security.” It added: “This is not the first time the South Korean pilots have unsuccessfully tried to prevent Russian aircraft from flying over the neutral waters.” An ADIZ is different from a country’s 12-nautical-mile territorial limit. ADIZs have been declared unilaterally to justify a country demanding aircraft from foreign countries to identify themselves and to make known their flight paths despite being in international airspace. An ADIZ has no basis in international law. Japan’s ADIZ covers a large portion of the Sea of Japan, but does not include Takeshima/Dokdo. Tokyo claimed that both Russian and South Korean aircraft had violated its airspace over the Dokdo/Takeshima islets and scrambled its own fighter jets. Chief Cabinet Secretary Yoshihide Suga denounced both countries on Tuesday.
South China Sea Time Bomb Threatens To Go Off -- Via News:Asia has just taken a giant leap towards disaster: The combat jets of four nations have squared off above a disputed island. Vietnam is challenging an aggressive Chinese spy ship. And the Philippines has appealed to the US for protection.Overnight, a chaotic confrontation unfolded above a tiny island claimed by both South Korea and Japan. Chinese and Russian bombers infringed the territory, with Tokyo and Seoul fighting over the right to defend the airspace. South Korea says it fired more than 300 warning shots at the Russian bombers.Meanwhile, Hanoi has accused Beijing of violating its sovereignty by sending a survey ship to Vanguard Bank, which sits within Vietnam’s UN-recognised 370km (200 mile) exclusive economic zone (EEZ). Beijing arbitrarily claims the South China Sea — in its entirety — as its own.…It came shortly after a demand by Philippines President Rodrigo Duterte for the protection of the US Navy after a deadly collision in the disputed Spratly Islands.“I’m calling now America. I am invoking the RP-US pact, and I would like America to gather their Seventh Fleet in front of China. I’m asking them now,” he said during an interview.US State Department spokeswoman Morgan Ortagus has called on Beijing to “cease its bullying behaviour and refrain from engaging in this type of provocative and destabilising activities”.…Beijing has ignored US calls for a “hotline” to de-escalate tensions in the region.…Secretary of State Mike Pompeo reaffirmed earlier this year that “any armed attack on Philippines forces, aircraft or public vessels in the South China Sea” would trigger the treaty with the Philippines. But Beijing has been making clever use of “grey zone” tactics to avoid a formal confrontation. Beijing is using its government-controlled fishing fleet and nominally civilian coastguard to aggressively lay claim to territory — and not its officially designated military warships.
India launches robotic mission to land on the moon --Seeking to become the fourth nation to successfully land on the moon, India launched an ambitious robotic lunar mission named Chandrayaan 2 on Monday, targeting a touchdown near the lunar south pole Sept. 6. Consisting of an orbiter, lander and rover, the Chandrayaan 2 mission is India’s most daring space project to date. Chandrayaan 2 lifted off at 0913 GMT (5:13 a.m. EDT) Monday from the Satish Dhawan Space Center on India’s southeastern coast. Heading into a cloudy sky and arcing toward east from the launch base over the Bay of Bengal, Chandrayaan 2 rode into space on top of a GSLV Mk.3 rocket, the most powerful launcher in India’s inventory. The GSLV Mk.3 fired off the pad with 2.2 million pounds of thrust from two side-mounted solid rocket boosters, then ignited a twin-engine liquid-fueled core stage around two minutes after liftoff. After jettisoning the solid-fueled rocket boosters and its nose cone, the GSLV Mk.3’s core stage shut down around five minutes into the mission, followed by ignition of an advanced cryogenic upper stage engine burning super-cold liquid hydrogen and liquid oxygen. The upper stage fired for about 11 minutes and burned to depletion to propel the Chandrayaan 2 spacecraft into the highest orbit possible. U.S. military tracking data indicated the rocket placed Chandrayaan 2 in an orbit stretching more than 28,000 miles (45,000 kilometers) above Earth, some 3,700 miles (6,000 kilometers) higher than expected. That is good news for Chandrayaan 2, which will need less fuel to send itself toward the moon through a series of orbit-raising maneuvers planned over the next few weeks, the Indian Space Research Organization said.
The IMF Takeover of Pakistan -- On July 3, the International Monetary Fund approved a $6 billion bailout package to help “return sustainable growth” to Pakistan’s economy. Throughout the deal spanning 39 months, the IMF will review Pakistan’s progress on a quarterly basis. As part of the agreement, $1 billion has been released to Pakistan. This is the 13th IMF bailout for Pakistan, with the Fund looking toward the correction of “structural imbalances” in the country. In this regard, the IMF had announced in the negotiations over the past couple of months that Islamabad would have to increase taxation in order to repay external debt and increase foreign exchange reserves. Details of the agreement reveal the targets that have been set for Pakistan, requiring the country to increase the foreign exchange reserves from the current $6.824 billion to $11.187 billion next year. As a result, the country’s net reserves are expected to increase from negative $17.7 billion to negative $10.8 billion over the same period.The IMF has further asked Pakistan to pay $37.359 billion in external debt within the duration of the IMF bailout deal. Islamabad owes $14.682 billion of this figure to Beijing, largely due to the China-Pakistan Economic Corridor (CPEC). The increase in taxation required by the IMF was visible in this fiscal year’s financial budget, with the government increasing the Federal Board of Revenue’s (FBR) tax collection target from 3.94 trillion Pakistani rupees ($25 billion) to 5.5 trillion rupees. The documents further reveal that over the next two years of the bailout package, additional 1.5 trillion rupee and 1.31 trillion rupee hikes in revenue collection have been scheduled. Even before the budget was passed, the government had already implemented steps to enhance taxation, with hikes in the price of petrol and electricity. In addition to the heavy taxation, another precondition of the IMF bailout was the devaluation of the Pakistani currency, which the Fund deemed to be artificially valued. With the IMF calling for a “market determined” value of the Pakistani currency, the rupee has lost over half its value since December 2017, resulting in the inflation rate reaching a five-year high at 9.4 percent in April, and expected to rise to over 13 percent, as per the Fund’s forecast.
Cops Bust Fake Ferrari And Lamborghini Factory In Brazil --O Globo, a Brazilian newspaper based in Rio de Janeiro, Brazil, reported on Tuesday that a small factory in the southern state of Santa Catarina was producing fake Ferraris and Lamborghinis for $45,000 to $60,000, a substantial discount versus the retail price of a genuine supercar. The investigation behind the counterfeit vehicles started when representatives of Ferrari and Lamborghini began to notice pictures of the fake supercars circulating social media contacted the Civil Police of Santa Catarina. From there, police launched a raid on Monday of the factory where they discovered a father and son team, along with other employees, working on at least eight replicas at the time. The police used flatbed trucks and seized all vehicles inside the facility for evidence. Police said there were only three models being produced at the time of the raid: Lamborghini Gallardo and Huracan, and a Ferrari 430 lookalike. Fake parts, with some including fraudulent engravings of the original manufacturer, were also seized in operation. Police aren't sure how many cars were manufactured at the unauthorized facility, nor do they know if other models were sold. Former employees are expected to testify where more clarity into the size of the operation could be determined.
“Electromagnetic Attack” Sparks Massive Blackouts Across Venezuela - Venezuelan information minister Jorge Rodrigues said an “electromagnetic attack caused the nationwide blackout” and power companies along with government officials, are in the process of restoring the nation’s power grid. Back in March, the country experienced the most damaging rolling blackout in decades that brought the country,already devastated by an economic crisis, even closer to outright collapse. “It terrifies me to think we are facing a national blackout again,” said Maria Luisa Rivero, a 45-year-old business owner from the city of Valencia, in the central state of Carabobo. “The first thing I did was run to freeze my food so that it does not go bad like it did like the last time in March. It costs a lot to buy food just to lose it,” she said. Netblocks, a civil society group observing internet traffic around the world, sent out several alerts via Twitter starting around 5:45 pm est. about widespread power loss across Venezuela that disrupted the country’s internet. The group said even state television, a key source of government propaganda, was brought offline. Netblocks tweeted a photo of internet outage broken down by region: The latest disruption comes a little more than four months after widespread blackouts crippled the country for about one week in March. As of Monday evening, most of Venezuela’s 23 states have no internet connectivity.
Russia Pledges More Military & Economic Support To Cuba Against External Threats - While on a tour of Latin America, and ahead of a BRICS ministerial meeting set for Rio de Janeiro, Russian Foreign Minister Sergey Lavrov visited Cuba Wednesday, where he pledged continued economic and military support against Cuba's "external threats". Talks with Cuban officials also focused heavily on the ongoing crisis in Venezuela, given both countries are staunch allies of President Nicolas Maduro’s government."Our policy towards Cuba is that we shall support Cuba’s people not only politically, not only morally, not only by means of developing military technical cooperation but also through encouraging trade and economic projects to help that country’s economy become more resistant to all kinds of external threats," he said. Lavrov met with his Cuban counterpart, Bruno Rodriguez Parrilla, a month after a Russian warship stopped in Cuba — a mere one hundred miles off the American coast — to build up joint military relations between the two countries. It was at the end of June that the Kalibr missile-armed frigate Admiral Gorshkov entered the port of Havana. During that prior exercise Russian Deputy Foreign Minister Sergei Ryabkov grabbed headlines when he slammed US build-up of its weapons systems in Europe by invoking comparisons to the 1962 Cuban missile crisis. “We could find ourselves in a situation where we have a rocket crisis close not just to the crisis of the 1980s but close to the Caribbean crisis,” Ryabkov had stated at the time while using the standard Russian term for the Cuban missile crisis.
Russia and Ukraine Agree on Comprehensive Ceasefire in Donbass 00 A deal negotiated last week and put into effect on Sunday, Russia and Ukraine have negotiated, along with Europe’s OSCE, a comprehensive ceasefire in Donbass (Eastern Ukraine). The deal intends to extend the ceasefire indefinitely.The deal is being negotiated by Russia on behalf of Ukraine’s eastern separatist movement, and obliges both sides to move heavy weaponry away from the front line, as well as banning attacks and attempts at forward movement by either side.OSCE officials say this deal, with its open-ended term, is going much further than previous ones, and followed with a joint statement from Russia and Ukraine. This commits both sides more fully to abiding by the deal. This is particularly important because in the past, smaller factions on both sides have felt entitled to simply ignore the deals, arguing they weren’t personally party to the pact. With both governments committed, dishonoring the pact comes at a much bigger price. The civil war in East Ukraine has been ongoing for five years, though in state of ceasefires for most of it. The rebellion in Western Ukraine, which ousted a pro-Russia government, led to harsh measures against ethnic Russians who living in the east, and fueled calls for them to separate into an autonomous region or outright independent nation.
‘A Pre-Revolutionary Situation’: More Than 20,000 Rally in Moscow for Free Elections - Russian opposition leaders on Saturday led a protest in Moscow against the election commission’s decision to bar a host of candidates from the ballot for city council elections this fall that turned into the largest demonstration in Russia in recent years. Billed as the culmination of a week of daily protests that kicked off last Sunday, the demonstration — which was approved by the authorities — drew 22,500 people, according to White Counter, an NGO that tallies up participants who have passed through the security frames surrounding approved rallies. “I haven’t been at a protest this big since 2012,” opposition leader Alexei Navalny wrote on Twitter, referring to the Bolotnaya demonstrations that began in the winter of 2011 to protest Vladimir Putin’s return to the presidency. Saturday’s protest, buoyed by a groundswell of dissatisfaction across Russia over declining living standards that has led to falling ratings for Putin and the ruling United Russia party, may be the start of another round of rallies. When Navalny took to the stage, he called for protests to continue next Saturday in front of City Hall, a stone’s throw from the Kremlin, if the election commission does not approve the candidates for the ballot this week. To run for the 45-seat Moscow City Duma, potential candidates each had to collect around 5,000 signatures from city residents. But lawmakers have seen some of the names they collected invalidated by the election commission, and all of the high-profile candidates have been barred from running.
Russia Offers Turkey Advanced Su-35 Jets Day After US F-35 Program Expulsion --Could NATO show Turkey the door in the near future? Things could easily reach this point considering the alliance's most easterly member is fast amassing significant Russian defense hardware. With reception of Russian S-400 anti-air components, and now blocked from the F-35 joint strike fighter program per Wednesday's White House announcement, President Recep Tayyip Erdogan is said to be mulling a new Russian offer."Russia is ready to sell its super-maneuverable Sukhoi Su-35 fighter jets to Turkey, the head of the Russian state conglomerate Rostec said Thursday," according to Turkey's English language Daily Sabah."If our Turkish colleagues express a desire, we are ready to work out the deliveries of the Su-35," Rostec CEO Sergei Chemezov said. Russia's TASS news agency also confirmed the offer, which a Turkish military source said was "premature" but noted that Erdogan will assess the proposal. Turkish Foreign Minister Mevlut Cavusoglu had stated previously that Ankara stood ready to sign a contract for jet fighters with other countries should the US block transfers of the F-35.After the White House statement confirming Turkey was booted from the program, Turkey urged the US to rectify its "mistake" while also calling it "unfair". The Su-35S is Russia's latest advanced fighter, a derivative of the Su-27 plane, having been in service with the army since 2015, as TASS describes further of its specs: The Su-35S generation 4++ supersonic fighter jet performed its debut flight on February 19, 2008. The fighter jet is a derivative of the Su-27 plane. The Su-35S weighs 19 tonnes, has a service ceiling of 20,000 meters, can develop a maximum speed of 2,500 km/h and has a crew of one pilot. The fighter jet’s armament includes a 30mm aircraft gun, up to 8 tonnes of the weapon payload (missiles and bombs of various types) on 12 underwing hardpoints.
Russia Urges Independence From Imposed World Order Of US Financial System - Following Russia signalling last week, its willingness to join the controversial payments channel Instex - designed to circumvent both SWIFT as well as US sanctions banning trade with Iran - new statements from Russian Deputy Foreign Minister Sergei Ryabkov called on the international community to free itself from a purely US-controlled international financial system and US dollar dominance. "We must protect ourselves from political abuses made with the help of the US dollar and the American banking system," he said while addressing a ministerial meeting of the Non-Aligned Movement held in Venezuela, according to TASS. "We must turn our dependence in this sphere into independence," he added. "Let us be multipolar in the spheres of finance and currency," he said. The senior diplomat was specifically addressing US-led sanctions and the tightening economic noose, including a near total oil export blockade, on the Maduro government in Caracas. The comments also come after early this year the Maduro regime was stymied in its bid to pull $1.2 billion worth of gold out of the Bank of England, according to a January Bloomberg report. The Bank of England’s (BoE) decision to deny Maduro officials’ withdrawal request was a the height of US coup efforts targeting Maduro.Specifically top US officials, including Secretary of State Michael Pompeo and National Security Adviser John Bolton, had lobbied their UK counterparts to help cut off the regime from its overseas assets, as we reported at the time. Washington has further lobbied other international institutions, and especially its Latin American allies, to seize Venezuelan assets and essentially hold them for control of Juan Guaido's opposition government in exile.
IMF lowers global growth forecasts amid trade, Brexit uncertainties (Reuters) - The International Monetary Fund on Tuesday cut its forecast for global growth this year and next, warning that further U.S.-China tariffs or a disorderly exit for Britain from the European union could further slow growth, weaken investment and disrupt supply chains. The IMF said downside risks had intensified and it now expected global economic growth of 3.2% in 2019 and 3.5% in 2020, a drop of 0.1 percentage point for both years from its April forecast, and its fourth downgrade since October. Economic data so far this year and softening inflation pointed to weaker-than-expected activity, the global lender said, with trade and technology tensions and mounting disinflationary pressures posing future risks. The IMF slashed its forecast for growth in global trade by 0.9 percentage point to 2.5% in 2019. Trade should rebound and grow by 3.7% in 2020, about 0.2 percentage point less than previously forecast. Trade volume growth declined to around 0.5% in the first quarter, its slowest pace since 2012, it said, with the slowdown mainly hitting emerging Asian countries. Global trade volumes fell 2.3% between October and April, the sharpest six-month decline since 2009, when the world was in the midst of the Great Recession, according to estimates by the Netherlands Bureau of Economic Policy Analysis (CPB).
Eurozone flash manufacturing PMI falls to 46.4 in July, EUR/USD in 2-month lows -- The Eurozone manufacturing sector activity stalled its rebound and fell deeper into contraction in the month of July, the latest manufacturing activity survey from IHS/Markit research showed. The Eurozone manufacturing purchasing managers index (PMI) came in at a 79-month low of 46.4 in July vs. 47.6 expected and 47.6 last while the services PMI dropped to 2-month lows of 53.3 vs. 53.3 expected and 53.6 last. The IHS Markit Eurozone PMI Composite fell from 52.2 in June to 51.5 in July, hitting fresh 3-month lows. Comments from Chris Williamson, Chief Business Economist at IHS Markit: “The eurozone economy relapsed in July, with the PMI giving up the gains seen in May and June to signal one of the weakest expansions seen over the past six years. The pace of GDP growth looks set to weaken from the 0.2% rate indicated for the second quarter closer to 0.1% in the third quarter.” “The manufacturing sector has become an increasing cause for concern. Geopolitical worries, Brexit, growing trade frictions and the deteriorating performance of the autos sector in particular has pushed manufacturing into a deeper downturn with the survey indicative of the goods-producing sector contracting at a quarterly rate of approximately 1%.”
Euro zone business growth stalls in July, outlook darkens: PMI (Reuters) - Euro zone business growth was much weaker than expected this month, hurt by a deepening contraction in manufacturing, and forward-looking indicators in surveys published on Wednesday suggest conditions will get worse next month. The downturn appears widespread, with survey results missing expectations in the euro zone as well as in Germany and France, the bloc’s two biggest economies and the only ones to report preliminary data. That will make disappointing reading for policymakers at the European Central Bank, who are expected to signal on Thursday a bias towards cutting its already-negative deposit rate this year to try to boost growth and inflation. IHS Markit’s Flash Composite Purchasing Managers’ Index (PMI), considered a good guide to economic health, dropped to 51.5 this month from a final June reading of 52.2, missing the median expectation in a Reuters poll for 52.1 and closer to the 50 mark separating growth from contraction. “If the European Central Bank takes this release seriously at tomorrow’s meeting, it would nudge them more towards quick action. This is an important first look at how the third quarter has kicked off and it does not look good,” said Bert Colijn at ING.
Yield curve weirdness - Frances Coppola - Yield curves have gone mad. Negative yields are everywhere, from AAA-rated government bonds to corporate junk. Most developed countries have inverted yield curves, and a fair few developing countries do too: [table] Negative yields and widespread yield curve inversion, particularly though not exclusively on safe assets. To (mis)quote a famous pink blog, this is nuts, but everyone is pretending there will be no crash. Here, for your enjoyment, is an à la carte selection of the most lunatic government yield curves. You can find lots more here.
- Exhibit 1: Switzerland. Negative yield already extends beyond 30 years, and markets are pricing in further interest rate cuts and/or QE, or indeed anything to stop the Swiss franc appreciating as scared investors pile into CHF-denominated assets. Hence the curve inversion.
- Exhibit 2: Denmark. Every Danish government bond currently circulating in the market is trading at a negative yield. And the inverted curve tells us that markets are pricing in further interest rate cuts, most likely to hold the ERM II peg when the ECB cuts rates and re-starts QE. (Yes, it's when, not if - see Exhibit 3)
- Exhibit 3: the Eurozone. Eurozone aggregated government yield curves as at 18th July 2019 (chart from the ECB):
The Black Hole Engulfing the World’s Bond Markets - There’s a multitrillion-dollar black hole growing at the heart of the world’s financial markets. Negative-yielding debt -- bonds worth less, not more, if held to maturity -- is spreading to more corners of the bond universe, destroying potential returns for investors and turning the system as we know it on its head. Now that it looks like sub-zero bonds are here to stay, there’s even more hand-wringing about the effects for mom-and-pop savers, pensioners, investors, buyout firms and governments.
- 1. Why invest in a bond that will lose you money? Typically, bonds are the safest assets on the market, so many investors seek them out at times of heightened market stress, say a U.S.-China trade war or tensions in the Persian Gulf. A bond can have a modestly positive coupon when issued by a government, institution or company, but once it starts trading, high demand by investors can push its price up -- and therefore its yield down -- to such an extent that buyers no longer receive any payment. Some funds track government bond indexes, meaning they must buy the bonds regardless of the yield. And some investors can still make positive returns on these bonds when adjusted for currency swings.
- 2. How much is being bought? Negative-yielding debt topped $13 trillion in June, having doubled since December, and now makes up around 25% of global debt. In Germany, 85% of the government bond market is under water. That means investors effectively pay the German government 0.2% for the privilege of buying its benchmark bonds; the government keeps 2 euros for every 1,000 euros borrowed over a period of 10 years. The U.S. is one of the few outliers, with none of its $16 trillion debt pile yielding less than zero, but across the world, strategists are warning that the problem may get worse.
- 3. Why is this reason for worry? Negative rates are at odds with basic principles of the global finance system. “One important law of financial logic –- if you lend money for longer, you should see a higher return –- has been broken,” wroteMarcus Ashworth, a Bloomberg Opinion columnist covering European markets. “The time value of money has essentially disappeared.” (Has it ever: The so-called century bonds issued by Austria two years ago, which mature in 2117 and initially offered a 2.1% return, now yield about 1.2%.) All this can push investors intoriskier bets in the hunt for returns, raising the chances of bubbles in financial markets and real estate.
- 4. Who benefits from negative rates? Governments, for one. The incentive to borrow money is never greater than when you are being paid to do so. Germany, for example, is being subsidized to issue debt over the next 20 years, though that does not necessarily mean it will boost spending. Companies that issue bonds also reap the benefits of record-low borrowing costs. So do private-equity firms, which typically use leverage to acquire companies and see greater opportunities when (and where) capital is cheap. Homeowners with variable-rate mortgages also have reason to celebrate.
- 5. Who gets hurt? Pension funds and insurers, traditionally big investors in government bonds, are in a particular predicament: Their liabilities grow steadily as clients age, but often they are required not to take on big risks.Banks see their margins squeezed. They’re earning next to nothing from lending but still need to offer depositors a rate above zero to keep their business. In Germany, the ECB has come under political pressurefor hurting the returns of savers. Central banks could run into the problem of hitting the so-called “reversal rate” -- the point at which low borrowing costs start to harm rather than help the economy, should banks start to restrict loans. That could deepen any slowdown.
Entire Swiss Curve Goes Sub-Zero - Global Negative-Yielding Debt Spikes To New Record High - WTF is going on!! The yield on the 2064 securities fell for its 9th straight day, down 4bps to -0.019%. That leaves the entire Swiss yield curve (out to 50 years) below zero... And has added to the new record high - over $13.7 trillion - in global negative-yielding debt... (and that includes some junk European bonds!)
ECB Sets Stage For September Rate Cut; Will Examine QE, Tiering In Pursuit Of Inflation Target --As expected, the ECB did not cut rates at today's rate cut, but in a move that was widely expected, the ECB did hint that rate cuts are coming, by adding the "or lower" language, when saying that "Governing Council expects the key ECB interest rates to remain at their present or lower levels at least through the first half of 2020."Translation: a 10bps rate cut is now assured.But wait, there was more, with the central bank noting the "need for a highly accommodative stance of monetary policy for a prolonged period of time, as inflation rates, both realised and projected, have been persistently below levels that are in line with its aim." As a result, the Governing Council noted that it was "determined to act, in line with its commitment to symmetry in the inflation aim. It therefore stands ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner."In other words, if the Fed is cutting the ECB will also be cutting, and since the Fed launched "symmetric" inflation targeting, i.e. overshooting inflation to the upside, so will the ECB (how it will get there is another matter entirely). Finally, the ECB also hinted that QE may be coming as soon as September, noting that the Governing Council "has tasked the relevant Eurosystem Committees with examining options, including ways to reinforce its forward guidance on policy rates, mitigating measures, such as the design of a tiered system for reserve remuneration, and options for the size and composition of potential new net asset purchases." As a reminder, earlier this week we noted an analysis from Goldman, explaining why cutting rates without tiering would be disastrous for European banks, which is why - lo and behold - Draghi (formerly of Goldman) announced just that - tiering is coming, which is good news for Europe's bank and is the reason why they have jumped on the news of even lower rates.
Syriza, R.I.P. - Yves Smith - Mark Ames e-mailed me earlier this month: “Seems you should write an obit on Syriza’s failure, seeing as you were the only one on the left calling out their failure from early on (and taking so much heat for it).” For those of you new to the site, we posted intensively on the 2015 Greek bailout negotiations. We were early and alone in predicting that the negotiations would fail, as they did. This was an exceptionally unpopular assessment. It offended those who admired the new government headed by the charismatic Alex Tsipras of Syriza who made the articulate and media-genic economist Yanis Varoufakis as his Finance Minister and de facto lead negotiator, along with pragmatists who were confident that cooler heads would prevail and some sort of deal would be cinched.The denouement is that Syriza, having abandoned its reformist stance, is now out of power. Greek Prime Minister Alex Tsipras had called snap elections for July 7 after the ruling party suffered large losses in European Parliament, local and municipal elections. As expected, the center-right New Democracy party won, by a margin that the press depicted as a landslide, with former banker Kyriakos Mitsotakis becoming Prime Minister.I didn’t relish being correct at the time, and I take no pleasure in witnessing the failure of a party and an effort to loosen the austerity choke-chain that Greece had been wearing for so long and at such a high cost to its citizens. Even though Syriza lives on in a diminished state, it long ago gave up its pretense of being a force for social justice. From Athens, DiEM25 member David Adler pointed out in the Guardian: In the four years that followed [Syriza’s win in January 2015], Tsipras tried desperately to endear himself to the establishment he once pledged to fight. He protected the old oligarchs and ushered in a generation of new ones. He implemented austerity measures so brutal that even Germany’s finance minister Wolfgang Schäuble accused him of “putting the burden on the weak”. And he placated international investors with big promises of small taxes and golden visas… Syriza had already effectively given up the game in February 2015, less than a month after Tsipras took office. The only commentator I have seen who has regularly acknowledged that is then-Syriza-MP Costas Lapavitsas.1.
Italy's Salvini Draws Up Plans To Raid Illegal Settlements - Deport Roma, Sinti - Italy's Interior Minister Matteo Salvini has given the ministry's regional offices two weeks to compile "a report on the presence of Roma, Sinti and Camminanti settlements" in order to begin mass deportations, according to Italian media. In a Tuesday memo, Salvini laid out his campaign to "verify the presence of illegal camps to draw up an eviction plan," according to DW. According to the Council of Europe, Italy has one of the lowest concentrations of these groups in the EU, with a population of between 120,000 and 180,000, according to the AFP. More than half of these people are Italian citizens who have integrated into mainstream society, AFP claims.Despite this, hate crimes and prejudice against Roma, Sinti, and Camminanti are rampant, particularly against the less fortunate, some of whom still live in unofficial settlements. –DW In June of 2018, Salvini ordered a "Special Census" of the Roma community, saying that he planned to boot illegals from the country."I've asked the ministry to prepare a dossier on the Roma question in Italy," Salvini told TeleLombardia, adding that the country's large community of Roma, also known as Gypsies, was "chaos" several years after a crackdown. DW reports that there are some 26,000 members of these groups living in emergency shelters or in vagrant camps across Italy in 2017, according to advocacy group Associazione 21 Luglio.
Boris Johnson on track for landslide win as 73 per cent of Tory voters back the PM hopeful, survey reveals - BORIS Johnson is on course for a landslide victory in the Tory leadership race, a survey reveals. The hot favourite is expected to clean up nearly three-quarters of votes from grassroots members. It raises the prospect of him entering 10 Downing Street this week with a huge mandate to deliver Brexit by the end of October. Mr Johnson has won the support of 73 per cent of those eligible to vote, according to an exclusive survey for The Sun on Sunday. The figures even suggest his fan base has increased during the four-week campaign in which he was pitched head-to-head with rival Jeremy Hunt 17 times. An ally said: “With every passing day it became clear that Boris was the candidate most likely to deliver Brexit on time – and the one much more likely to beat Jeremy Corbyn in a general election.” A victory on that scale will give BoJo a powerful hand as he reshapes the Cabinet and demands EU chiefs re-open talks about a Brexit deal. The online survey of Tory members was carried out by ConservativeHome over the last two days as the nationwide ballot was about to close.
Project fear? The last three years have been more catastrophic than even the most pessimistic Remainer predicted --If, during the 2016 referendum campaign, you had told voters that MPs would be scrambling to stop the prime minister shutting down the legislature in order to force through food shortages, mass job losses and a crash in the pound, someone might have needed to change the slogan on the side of that bus. What is happening right now in Britain goes beyond any previously conceivable limits of responsible or accountable governance. Viewed against the country which seemed to exist just a few years ago, it is quite literally unbelievable.It’s not just that Brexit is a case of “I told you so”: the harm to our national political fabric has been more catastrophic than even the most pessimistic Remainer could have contemplated.Britain is now heading into immediate, unabated crisis, but the consequences could last for years or even decades. Even the most conservative estimates suggest damage to our economy in all circumstances if we leave, contrary to everything campaigners promised. The neutral Office for Budget Responsibility this week forecast a significant recession in the event of no-deal. But the economic damage will almost certainly take less time to repair than the damage to our politics and society. What was billed as a way for people to take back control of democracy has become a systematic attack on every institution which underpins it. This assault on democratic institutions and norms is not taking place in isolation. It is embedded in a far wider authoritarian movement which aims to empower the right-wing fringes of society and political opinion. We saw it only too clearly this week in Donald Trump’s racist declaration that four ethnic-minority congresswomen should “go back… [to the] places from which they came,” and at his subsequent rally, the chants of “send her back.” The circumstances may be new, but the broader ambition echoes down the ages and across political cultures. It is to attack freedom, pluralism and diversity in the pursuit of power.
Labour’s Brexit capitulation is the end of Corbynism - The Labour Party’s decision to demand a second EU referendum and campaign for Remain is a huge slap in the face to the some four million, mostly working-class, Labour supporters who voted Leave and were promised in the 2017 election that the party would respect the majority’s decision. But the working classes are well used to being betrayed and abandoned by Labour. Between 1997 and 2015, Labour lost almost four million votes at a time when the total population increased by seven million. Many voters, disillusioned by neoliberal consensus politics, disengaged from politics altogether, while others drifted towards UKIP and the Tories. But Jeremy Corbyn was supposed to be different. He enthused large parts of the country yearning for change, especially a youthful following who were becoming aware of socialism for the first time. Through the process of having to win the leadership twice, these supporters have learned first-hand the importance of democracy. This, plus growing awareness of Labour’s strong tradition of left Euroscepticism – once championed by Corbyn himself, and by John McDonnell – has even won some over to a “Lexit” position. So, it must be especially galling and confusing for them to see Labour throw out its general election pledges and trample over its commitment to respecting the largest democratic mandate ever produced in the UK’s history. They may not yet realise it, but Corbynism is now dead. Corbyn may remain in place, for now, like a Soviet-era waxwork, but the transformative project he claimed to spearhead has melted away.
Boris Johnson wins race to be Tory leader and PM - Boris Johnson has been elected new Conservative leader in a ballot of party members and will become the next UK prime minister. He beat Jeremy Hunt comfortably, winning 92,153 votes to his rival's 46,656. The former London mayor takes over from Theresa May on Wednesday. In his victory speech, Mr Johnson promised he would "deliver Brexit, unite the country and defeat Jeremy Corbyn". Speaking at the Queen Elizabeth II centre in London, he said: "We are going to energise the country. "We are going to get Brexit done on 31 October and take advantage of all the opportunities it will bring with a new spirit of can do. "We are once again going to believe in ourselves, and like some slumbering giant we are going to rise and ping off the guy ropes of self doubt and negativity." Mr Johnson thanked his predecessor, saying it had been "a privilege to serve in her cabinet". He was Mrs May's foreign secretary until resigning over Brexit. The outgoing PM in turn congratulated her successor, promising him her "full support from the backbenches".
“We Wargamed the Last Days of Brexit. Here’s What We Found Out.” -- A group of us recently participated in a simulation game to model the future of the Brexit process. By assuming different roles amongst the forces in conflict over the future of the United Kingdom, we hoped to gain a greater understanding of the process and what might come next. We solicited the help of Richard Barbrook, an academic at Westminster University, and director of Digital Liberties, a UK-based cooperative that has pioneered the use of participatory simulations to anticipate political scenarios. His book, Class Wargames, applies the ideas of the French situationist, Guy Debord, who advocated the use of strategy games as performative, even theatrical, exercises to understand one’s political opponents and their strategic thinking. Barbrook designed the game, which he called, Meaningful Votes: The Brexit Simulation. Collaborating on this initiative with the Institut für die Wissenschaften vom Menschen (IWM) and the ERSTE Foundation in Vienna we assembled a group of participants in Vienna comprised of civil society, journalists, academics and intellectuals.They were a mixture of nationalities, from Austria, the Balkans, the United States and Britain, and held a plurality of political views from left to right. For mainland European participants the game provided an opportunity to empirically rationalise a crisis that many had found inexplicable; for example, the refusal hitherto of the British parties to find a compromise on Brexit in Parliament is highly alien to those used to the political systems with a culture of building consensus (often with proportional representation), that exist in Germany, the Netherlands and Austria. Each participant took on the role of a faction within Parliament with the game beginning after the defeat of the heavy defeat of the First Meaningful Vote on 15 January 2019. So what happened? And what did we learn from this exercise? The outcome of the game eventually resolved itself in a new referendum. By this stage the game had moved into the near future of early autumn 2019. The cross-party negotiations had failed to reach a breakthrough acceptable to both leaderships. Softer members of the Tory Brexit Delivery Group then split away from the party leadership, crossing the floor to support a new referendum. Interestingly, this came as a surprise to the game designer, Barbrook, who had anticipated a stalemate and a further extension of Article 50 at the end of October 2019.
Boris Johnson warned by Tory rebels: ditch no deal or face fight for survival - Boris Johnson has been put on notice by rebel Conservatives that he will not survive long as prime minister unless he drops his no-deal Brexit agenda, as he stands on the brink of entering Downing Street. Johnson is expected to be announced as the choice of the Conservative party to be the next prime minister on Tuesday morning after running a campaign against Jeremy Hunt that promised to take the UK out of the EU by the end of October “do or die”. On the eve of his probable coronation by the Tory membership, several senior Conservatives sent warning shots that his hardline Brexit plans put him on a collision course with parliament. Rory Stewart, a former leadership rival, joined Philip Hammond and David Gauke in telling Johnson he would quit the cabinet before the new prime minister takes office rather than serve under him. In a further ominous move for Johnson, Sir Alan Duncan, a Foreign Office minister, resigned dramatically to launch an attempt to test whether the new prime minister could command a majority among MPs. Duncan’s proposal for an emergency House of Commons debate on support for Johnson was turned down by the Speaker, but it was a sign that some Conservatives are already organising to make life difficult for the new incumbent of No 10. Duncan said he had “very grave concerns that Johnson flies by the seat of his pants” and branded his former boss “haphazard and ramshackle”, but publicly insisted he was trying to be helpful to the new prime minister by ending speculation about whether MPs supported the new incumbent in No 10. The motion stated: “That this House has considered the merits of the newly chosen leader of the Conservative party, and supports his wish to form a government.” However, it opened up the possibility that Johnson might fail to demonstrate he had the support of parliament, leaving Theresa May potentially unable to recommend him as her successor to the Queen on Wednesday.
Sir Alan Duncan quits as Foreign Office minister but his plot to allow MPs to reject Johnson as new PM unravels - Sir Alan Duncan quit as foreign minister after hatching a plot to persuade the Queen to reject Boris Johnson as the next Prime Minister. In an extraordinary move, the longstanding Tory MP resigned in protest at a potential Johnson-led government before lobbying Speaker John Bercow to hold an emergency Commons debate on the new leader in a move that could have potentially dealt Theresa May’s successor a fatal blow before he formally took office. After hitting out at the "haphazard and ramshackle" would-be prime minister - who used to be his boss at the Foreign Office - Sir Alan then wrote to Mr Bercow to suggest Mrs May might be minded to advise the Queen against appointing Mr Johnson as her replacement. In an explanatory note accompanying his request for an effective vote of confidence in the next Prime Minister, he wrote: “This is the first time in our parliamentary history that the Prime Minister of a minority government has changed in mid-term. Thus the normal assumption that the succession is automatic cannot be said to apply, and his ability to command a majority in the House should arguably be tested before the Prime Minister can safely advise the Queen who should succeed her.” Arguing that there was “doubt” over the level of parliamentary support for Mr Johnson, he added: “We must maintain seamless continuity of government, and must not draw the Queen into political controversy. A questionable succession would risk offending both.” The move was rejected by Mr Bercow as astonished Conservative colleagues pointed out that Labour was not even planning to table a motion of no confidence this week. Clerks are understood to have advised the Speaker that Sir Alan’s plan would have put the Queen in an ‘invidious position’, pointing out it was for the Opposition, not individuals to table such motions. In an interview with the BBC, Sir Alan, 62, minister for Europe and the Americas, admitted he had quit government to push for the vote, which would have given MPs the chance to consider "the merits of the newly chosen leader of the Conservative Party" and - crucially - whether the Commons "supports his wish to form a government".
Boris Johnson’s Brexit plan shot down by EU within moments of him becoming Tory leader The EU has shot down Boris Johnson’s Brexit plan within moments of his appointment as Tory leader, in the latest sign that the bloc has no plans to make concessions. In an intervention timed to coincide with Mr Johnson’s election announcement, Frans Timmermans, the European Commission’s first vice president, told reporters in Brussels that the EU would not renegotiate the deal reached with Theresa May. Another EU commissioner, Vytenis Andriukaitis, also warned that politicians like Mr Johnson were undermining democracy with “cheap promises, simplified visions, blatantly evident incorrect statements”.Mr Timmermans said: “He [Boris Johnson] took a long time deciding whether he was for or against Brexit and now his position is clear. “I think the position of the EU is also clear: the United Kingdom reached an agreement with the European Union and the European Union will stick with that agreement. We will hear what the new prime minister has to say when he comes to Brussels.” The bloc has said since last year it would not re-open talks on the withdrawal agreement struck by Ms May, which was rejected by MPs three times. Mr Johnson has said he would try to use the withholding of payments owed to the EU as leverage to force it back to the negotiating table. Mr Timmermans had previously suggested that Mr Johnson might not be sincere in his support for leaving the European Union, and could be “playing games”. Asked about the comments on Tuesday, he said: “I would just suggest that you look at what he’s been writing over the years.
Boris Johnson overhauls cabinet on first day as PM- Boris Johnson has given key cabinet roles to leading Brexiteers after becoming the UK's new prime minister. Dominic Raab and Priti Patel return to government as foreign secretary and home secretary respectively. Sajid Javid has been named as the new chancellor as more than half of Theresa May's old cabinet, including leadership rival Jeremy Hunt, quit or were sacked. Earlier, Mr Johnson said the Brexit "doomsters and gloomsters" were wrong and the UK would leave on 31 October. Speaking outside No 10, he said the UK would meet that deadline "no ifs, no buts", adding: "The buck stops with me." Who is in Boris Johnson's cabinet? Mr Johnson then turned his attention to a radical overhaul of the government, with 17 of Mrs May's former senior ministers being axed or stepping down. Announcing his departure, Foreign Secretary Mr Hunt said he had been offered an alternative role but had turned it down. Skip Twitter post by @Jeremy_Hunt Defence Secretary Penny Mordaunt, a leading Brexiteer who is popular across the party, was the most surprising departure. She has been replaced by Ben Wallace, a former soldier and longstanding ally of Mr Johnson's. Another prominent Brexiteer, International Trade Secretary Liam Fox, was also ousted, along with Business Secretary Greg Clark - a vocal opponent of a no-deal Brexit. All three supported Mr Hunt in the Tory leadership contest. Education Secretary Damian Hinds, Northern Ireland Secretary Karen Bradley, Immigration Minister Caroline Nokes, Culture Secretary Jeremy Wright and Communities Secretary James Brokenshire have also gone, along with Chris Grayling, whose record as Transport Secretary was much criticised. Scottish Secretary David Mundell, who has left his position after four years, joked whether there would be "room" on the backbenches after all the dismissals. Skip Twitter post by @DavidMundellDCT This comes on top of the earlier resignations of four leading ministers, including Chancellor Philip Hammond, Justice Secretary David Gauke and Cabinet Office minister David Lidington. Conservative MP Nigel Evans described the changes as a "summer's day massacre".
Boris Johnson takes his revenge and sacks over half the cabinet - Boris Johnson has signalled his ruthless determination to deliver Brexit and stoked speculation about an early general election by sacking more than half of Theresa May’s cabinet and packing his team with Vote Leave veterans and rightwing free marketers. Despite the new prime minister’s repeated insistence that he is a one-nation Conservative, he handed the job of home secretary to Priti Patel, who advocated the return of capital punishment as recently as 2011, and the Treasury to Thatcher devotee Sajid Javid. Dominic Raab, who made headlines during his own leadership campaign when he said he would not call himself a feminist, is the new foreign secretary, and will be Johnson’s stand-in at prime minister’s questions. Jacob Rees-Mogg, chair of the pro-Brexit European Research Group, which led calls for May to be deposed, is the new leader of the House of Commons. Johnson’s rival for the leadership, Jeremy Hunt, and his supporters fell victim to a merciless purge. Hunt himself turned down a demotion from foreign secretary to defence secretary and instead chose to return to the backbenches. Johnson had already sparked consternation among some colleagues by announcing that Dominic Cummings, the controversial director of the Vote Leave campaign, would be a senior adviser in his Downing Street team. Cummings is a seasoned campaigner, and his arrival at Johnson’s side increased expectations among MPs that a general election will be triggered within months. As Johnson prepared to enter No 10 for the first time after returning from Buckingham Palace on Wednesday, where the Queen had confirmed his appointment, he promised to defy “the doubters, the doomsters and the gloomsters”.
Brexit: Boris Johnson’s Impossibility Theorem - Yves Smith - Even though the press paid a lot of attention to Boris Johnson’s taking of office theatrics, and in particular his doubling down on his promise of an October 31 exit and stocking his Cabinet with radicals to help assure that, there were a couple of signals from the EU side that are worth noting, which we’ll cover after a short recap.We said early on that the course of Brexit was showing troubling parallels to the Greece 2015 bailout negotiations. Specifically, from the outset, the UK overestimated its bargaining leverage. Too many well placed pols and pundits convincing themselves that the EU would be more damaged by a crashout than the UK and therefore would be desperate to avoid a no deal. A more reality-based way of coming to a similar conclusion is that EU pols will always favor kick the can down the road over making a difficult decision, particularly one that will result in real damage. Thus push come to shove, given a way to avoid a Brexit, the EU will take advantage of it. We now appear to have hit the point we anticipated, that of a game of chicken. The pro-Brexit faction, despite having lost support in the UK population, has embraced a more and more hard-line position, and the peculiarities of the UK system has allowed one of their favorites, Boris Johnson, to become Prime Minister. Some hoped that the fabulously unprincipled Johnson might find a way to reverse himself and call for a face-saving extension down the road, but Johnson looks to be doing everything he can to commit himself to an October 31 departure. The press was agog at Johnson’s Cabinet purge, in which he ousted anyone who was soft on Brexit, and populated his team heavily with MPs from the Leave campaign, leading some to speculate that despite Johnson’s protestations otherwise, he was preparing for an early election. Another indicator: the Tories launched a “blitz” of election ads to test messages.In a further gesture to show his commitment to leaving on October 31, Johnson said in his first speech to the House of Commons that he will not nominate an EU Commissioner. Express pointed out that that would make it difficult to obtain an extension. The term of the current Commission ends on October 31 and the UK would need to field a new EU Commissioner were it to remain in the EU beyond that date.A defining characteristic of the Johnson Government is its mediocrity. From vlade: What’s really staggering the the proportion of people who are totally incompetent and believe their own BS (Raab, Moggie, Patel, Leadsom..). I despair for the UK’s education system with Williamson being allowed anywhere near it.
What happened to post-Brexit free-trade nirvana? -"There's a tariff of 20% on cars," is the shout at the front of the frenzied room near Westminster, where Trade Secretary Liam Fox and his chief trade negotiator Crawford Falconer look on at what they hope is a next generation of UK trade negotiators. The sixth-formers of the Harris Academy are used to meeting members of the cabinet: the sixth form is nestled among the ministries. They buzz around exchanging cardboard blue cars for red ones and for Monopoly money, mindful of the negative impact of Britain's terms of trade of a tax on UK exports of its cars. This is the return of an old dimension to Britain's statecraft and its economic levers. The hope of Mr Fox and his chief trade negotiator Mr Falconer is that such trade negotiation will offer a new career path for this generation to serve their nation. But it is not just the wheeling and dealing sixth-formers here who are on a steep learning curve. The Department was set up three years ago, carved out of a wing of what was then Boris Johnson's Foreign Office. Alongside David Davis at the Department for Exiting the European Union (DExEU), this was the signal of intent from the new administration of Theresa May, Brexit meant the "Three Brexiteers" in charge of "global Britain's" external political and economic diplomacy and negotiations. Now, in the last days of the May administration, it is only Mr Fox who has remained in post. He shows me his collection of international trade diplomacy memorabilia: a Stars and Stripes from the US Congress, digitally printed steel from an UK exporter of high-tech metals to India, various sets of cufflinks and his own centuries-old insignia - the flag of the president of the Board of Trade. Under a very old convention, the Navy are obliged to fly his flag when he is on board one of their vessels, he tells me, and they did in New York last autumn. But it is his framed copy of the 2016 EU referendum ballot paper that he appears to cherish the most. He picks it up, shows it to me and declares: "To remind us all about our democratic duty to deliver Brexit - this is the spare," he tells me. And for many, the entire point of Brexit is what his department has been set up to do - negotiate new trade deals for the UK alone after regaining an independent trade policy. The record so far has not lived up to the confident predictions made during the referendum about the ease of such deals.
Boris Johnson plans to frighten Europe then charm it. Here’s why he’ll fail - The new prime minister insists blind ambition is enough. Like Peter Pan, if we do believe, we do, we do, then it will come true. But even his first step has backfired. When he, unwisely, upped the ante by making refusal of the Irish border backstop a precondition for talks, the EU negotiator Michel Barnier immediately rejected the move. Now Johnson will have to back down even to get a meeting.The prime minister’s strategy, however, remains clear: he will combine public threats and private charm. First, he will frighten Europe by giving every impression of going hell for leather for a no-deal Brexit. He has certainly appointed the right team to frighten them – Dominic Raab, Michael Gove andDominic Cummings. Like us, EU leaders have seen the movie. And then he hopes the leaders will melt in the face of his personal charm when he comes to visit them. I spent 10 years negotiating with EU leaders alongside Tony Blair, and there are a number of reasons I believe Johnson’s strategy will not work. First, the civil service. There is no continuity in the leading ranks dealing with Brexit. Britain’s chief negotiator, Olly Robbins, has been hounded out and the cabinet secretary has only managed to hang on by the skin of his teeth. Johnson has appointed a raft of Brexiteer special advisers but they cannot coordinate Whitehall, or go to Brussels to negotiate. Even more importantly, in the face of this anti-civil service crusade, who will prepare honest briefs for the prime minister? Johnson will go into the talks without a realistic map of the minefields, or an experienced adviser at his side. Second, when he gets into the room with his opposite numbers, the charm that has worked so well in the past on young women and his angry bosses is likely to wilt. He inspires no trust in his European counterparts and he has no allies. Third is the problem of logic, which does not bend to charm. The backstop has been agreed because if we leave the EU there will otherwise have to be a hard border in Ireland. It doesn’t matter who builds it; either the UK does or the Irish will have to.
No comments:
Post a Comment