Fed leaves rates unchanged, noting slowdown in business investment - CNBC - In its first meeting since October's market turmoil and this week's midterm elections, the Federal Reserve voted to maintain the current level of its benchmark interest rate. The policymaking Federal Open Market Committee, as expected, unanimously approved keeping the federal funds rate in a range of 2 percent to 2.25 percent. Markets figured the central bank would hold the line at this meeting and probably approve a quarter-point hike in December, which would be the fourth of the year. There were a few tweaks to the way policymakers are viewing economic conditions. On the upside, the committee noted that the unemployment rate "has declined" since the September meeting. The Labor Department last week reported that the headline jobless level was at 3.7 percent, the lowest since December 1969. However, the statement noted that the "growth of business fixed investment has moderated from its rapid pace earlier in the year." There was no detail or data given for why officials see investment declining, though companies reported during third-quarter earnings season that some of their investment plans have been curtailed due to the ongoing trade war between the U.S. and China. The economy otherwise has been humming along strongly, and the FOMC reiterated its belief that "economic activity has been rising at a strong rate." GDP growth this year has averaged 3.3 percent for the first three quarters and is expected to come in around 3 percent for the final three-month period of 2018. "We shouldn't be surprised by either comment as they are simply a summary of the recent data," Michelle Meyer, U.S. economist at Bank of America Merrill Lynch, said in a note. "Interestingly, there was no mention of the softer housing data. Moreover, there was no mention of the sell-off in the stock market in October which implies that Fed officials were largely willing to shrug it off."
FOMC Statement: No Change to Policy -- Merrill on FOMC statement: "In terms of today's statement, there were only two small changes: 1) "household spending has continued to grow strongly" which shows that the Fed has taken notice of the strength in the consumer spending data; 2) "business fixed investment has moderated from its rapid pace earlier in the year" which is a mark-to-market given the weaker investment data in 3Q. We shouldn't be surprised by either comment as they are simply a summary of the recent data. Interestingly, there was no mention of the softer housing data." FOMC Statement: Information received since the Federal Open Market Committee met in September indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate. Job gains have been strong, on average, in recent months, and the unemployment rate has declined. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier in the year. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 percent. Indicators of longer-term inflation expectations are little changed, on balance. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced. In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 2 to 2-1/4 percent.
It Will Be Quite Ugly As Fed Ignores Looming $4 Trillion Big Policy Mistake - Last week we reported that after some $34 billion in Treasury and MBS maturities on October 31, the Fed's balance sheet had shrunk the most ever in one month since the start of the Fed's quantitative tightening, as the Fed's holdings of Treasurys, MBS and other assets declined to "just" $4.14 trillion, down 7% from their all time highs of $4.5 trillion one year ago. And it is this decline that is now spooking Wall Street, with a Bloomberg report citing Fixed-income traders who are "telling the Federal Reserve that it might end up making a big policy mistake." While most pundits have been concerned about the Fed ongoing rate hikes and resulting tightening in financial conditions, as the Fed's balance sheet unwind has picked up, "unexpected knock-on effects" have emerged in overnight lending markets such as IOER, Fed Funds and, of course LIBOR -which just hit a new decade high - where demand for short-term cash has been on the rise again after a sharp spike earlier in the year. The argument is that the Fed's balance sheet shrinkage is increasingly threatening financial stability, resulting in quotes such as this one from TD Securities rates strategist Priya Misra: "The Fed is in denial. If the Fed continues to let its balance-sheet runoff continue, then reserves will begin to become scarce."They will become even more scarce if the Fed continues unwinding its balance sheet at the current "cruise control" speed of $50BN per month. If the Fed maintains the current pace through the end of next year, its assets would fall to about $3.7 trillion from $4.1 trillion today (and a high of $4.5 trillion), resulting in even more distortions in overnight funding markets. Which, taken on its face, is bizarre: while the Fed's excess reserves with banks currently amount to just over $1.7 trillion, this number was just $50 billion, give or take, before the crisis.
'Hawkish' FOMC Signals Rate-Hike-Trajectory Unphased By Market Volatility - Amid expectations of a nothingburger FOMC statement, The Fed delivered, leaving rates unchanged and signaling "further gradual rate increases ahead."However, they did note, as Goldman expected, a slight downgrade on business investment to "moderated from its rapid pace earlier in the year," but positively noted that household spending "has continued to grow strongly."Inflation expectations remained "little changed, on balance,'' as inflation remains near 2% target as risks to the outlook still "appear roughly balanced."Finally, there were no mentions of recent market volatility, changes to communications policy, the appropriate size of a normalized balance sheet, technical issues related to interest on excess reserves (no change to IOER) or the extent to which the fed funds rate may need to overshoot neutral in the current cycle. In other words, largely a neutral statement which due to its lack of any overt or unexpected dovish references is being seen as slightly hawkish and pushing the dollar higher..And although most economists forecast 'zero' chance of a rate-hike today, Fed Funds imply a modest 13% chance the Fed would surprise - they didn't. Most eyes were on the statement looking for any cracks in the hawkish incessant rate-hike-trajectory put forward by Jay Powell as the market remains convinced The Fed is wrong...
US Growth Slowdown Expected To Continue In Q4 - Early estimates of GDP growth for the US in the fourth quarter point to another round of deceleration, based on the median for a set of projections compiled by The Capital Spectator. Although it’s still early in the quarter, leaving room for changes in the outlook based on incoming data, the preliminary numbers hint at the possibility that growth will continue to cool in the final three months of 2018.The median estimate for Q4 output calls for GDP to rise 2.9% (seasonally adjusted annual rate). If correct, the US growth is on track to dip for a second consecutive quarter, easing to the softest pace since the 2.2% rise in this year’s Q1. Despite the recent downgrade in GDP estimates, some observers of the economy see a firmer trend unfolding. The chairman and CEO of JPMorgan Chase, Jamie Dimon, told CNN yesterday that “the American economy is still doing quite well. And it may very well be accelerating. Unemployment is going to hit probably a post-war low sometime in the next 12 months.”A revival in business activity in the services sector in October certainly paints an upbeat profile for the start of Q4, according to last week’s survey data for IHS Markit’s PMI report. “A rebound from a weather-torn September and strong demand propelled service sector growth in October,” said Chris Williamson, chief business economist at the consultancy. “Combined with the steady output growth being recorded in the manufacturing sector, the survey data suggest the economy grew at its fastest rate since July.”Even so, IHS Markit’s latest estimate for GDP growth in Q4 is just 2.5%, which represents a substantially softer pace compared with Q3’s 3.5% or Q4’s strong 4.2%.Politics will probably be a factor in shaping economic expectations in the weeks ahead. Yesterday’s election verdict appears to be a split government with Democrats taking control of the House while Republicans continue to hold the Senate. As CNBC reports: With Democrats controlling the lower chamber of a split government, Trump could be forced to soften his aggressive trade strategy with China. The trade war between the two nations has roiled markets and often left investors on edge about the future between the world’s two largest economic powerhouses.
Q4 GDP Forecasts -From Merrill Lynch:We continue to track 3.7% for 3Q GDP and 2.8% for 4Q. [Nov 9 estimate]. And from the Altanta Fed: GDPNow The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in thefourth quarter of 2018 is 2.9 percent on November 9, unchanged from November 2. The nowcast of the contribution of inventory investment to fourth-quarter real GDP growth inched down from -0.05 percentage points to -0.08 percentage points after this morning's Producer Price Index release from the U.S. Bureau of Labor Statistics and this morning's wholesale trade report from the U.S. Census Bureau. [Nov 9 estimate] From the NY Fed Nowcasting ReportThe New York Fed Staff Nowcast for 2018:Q4 stands at 2.7%. News from this week's data releases increased the nowcast for 2018:Q4 by 0.1 percentage point. A positive surprise from producer prices data accounted for most of the increase.[Nov 9 estimate] CR Note: These early estimates suggest GDP in the high 2s for Q4.
Three-Month Libor Hits New Decade High As Rate Hike Odds Increase - While one of the consensus expectations resulting from last night's midterm election result is that any hopes for future fiscal stimulus have been put on hold indefinitely, thereby preventing any potential further overheating of the economy and obviating a need for further tightening by the Fed, this has yet to trickle down to the market, where this morning December rate hike odds rose notably, hitting 78% from just above 74% before the election.And while 10Y yields have dropped from yesterday's highs just shy of new 7 year highs, when the benchmark US Treasury hit 3.25%, dropping to 3.19% on Wednesday morning, the short end has been following rate hike intentions, with the 2Y higher modestly, rising to 2.932%, up 0.4bps. Also tracking the move higher in rate hike odds was USD three-month Libor, which was fixed higher by about 1bp on Wednesday to 2.6011%, the highest level since November 2008. While Libor is being phased out, it remains a key benchmark for over $200 trillion in financial securities which reference the infamous rate. Furthermore, even assuming Libor is fully phased out on schedule, and replaced with the alternative SOFR rates some time in 2021, an estimated $36T notional of LIBOR-linked instruments will remain outstanding after that date.In the meantime, many new trades continue to reference LIBOR and according to the TBAC, "the calculation does not consider replacement risk."More concerning is that as the Treasury noted in its latest refunding documents, LIBOR transition plans have not meaningfully altered issuance behavior as many deals continue to reference LIBOR.And the reason why rising Libor remains a major risk to financial conditions, is because as the table below shows, its footprint can be found everywhere, from OTC interest rate swaps, to leveraged loans - considered by many as the locus of the next credit crisis - to retail mortgages, to complex securitizations.
World's Largest Asset Manager Warns- The Dollar's Days As Global Reserve Currency Are Numbered - In comments that sound eerily similar to a warning issued by Putin, who warned during a speech last month that the US risked undermining the dollar's reserve currency status with its sanctions regime, the CEO of the world's largest asset-management firm said Tuesday during a panel discussion at the New Economic Forum in Singapore that the US dollar's status as the world's dominant currency wouldn't last forever. And instead of citing external factors like China's expanding economic clout and influence, or an insurgent Russia, Fink pointed to the widening US budget deficit as the biggest risk to the dollar's status as the global hegemon. And while it might not happen tomorrow, or next year, over time, as US interest rates rise and the federal government strains under its tremendous debt burden, the creditors who were once eager to buy up Treasury bonds will gradually disappear."We’re going to move there over time" Fink said.Instead of working with its creditors like China, the US is fighting them by engaging in an acrimonious trade war. Fink said that, in his experience, it's never wise to fight with your lenders."The problem is we are living with a deficit that is very large. We are fighting with our creditors right now worldwide," Fink said."Generally, when you fight with your banker, it’s not a good outcome," he said."I wouldn’t recommend you fight with your lenders, and we’re fighting with our lenders. Forty percent of the U.S. deficit is funded by external factors. No other country has that."And as interest rates rise and the government struggles with its newfound debt premium, collateral damage in the equity market will be almost inevitable. The US will have a "supply problem" as the widening deficit requires more borrowing. The threat of "interest rates becoming too high to sustain the economy with its growth rates" is becoming a real concern for the US."We are going to have more and more debt because of the deficits, and because of the deficits, the investors are going to demand a bigger premium," he said. "We have greater risk for higher rates and will not allow the equity markets to flourish.""There are some great needs in society right now," Fink said. "And a $1.3 trillion deficit as the economy slows down is a real problem." If history is any guide, the US dollar's dominance of the global financial system is already looking a little late in the cycle. In the past, reserve currencies have reigned for roughly 100 years. The US dollar has dominated for about 80 years.
CBO- Monthly Budget Review- Summary for Fiscal Year 2018 -- As expected, the deficit is increasing significantly. From the CBO: Monthly Budget Review: Summary for Fiscal Year 2018 In fiscal year 2018, which ended on September 30, the federal budget deficit totaled $779 billion—$113 billion more than the shortfall recorded in 2017. The deficit increased to 3.8 percent of the nation’s gross domestic product (GDP) in 2018, up from 3.5 percent in 2017 and 3.2 percent in 2016. Outlays in 2018 were reduced by a shift in the timing of certain payments; those payments were instead made in fiscal year 2017 because October 1, 2017 (the first day of fiscal year 2018), fell on a weekend. If not for that shift, the deficit in 2018 would have been $823 billion, or 4.1 percent of GDP. CBO is projecting the deficit next year will probably be close to $1 Trillion (about 4.6% of GDP).
U.S. government's borrowing binge poses global risks: Kemp- (Reuters) - The U.S. government's finances are on an unsustainable trajectory and are likely to worsen further after the mid-term elections, adding to the list of problems facing the global economy and oil markets in 2019/2020.The U.S. federal government's outlays exceeded its receipts by $779 billion in Fiscal Year 2018, which ended on Sept. 30, according to the Congressional Budget Office ("Monthly budget review", CBO, Nov. 7).The budget deficit would have been even worse at $823 billion if certain outlays had not been brought forward and recorded in the previous financial year because the first day of Fiscal 2018 fell on a weekend.Even so, the deficit increased to 3.8 percent of gross domestic product, up from 3.5 percent the previous year, and the highest since Fiscal 2013, when the economy was still recovering from the global financial crisis.Government receipts increased by just $14 billion (less than 1 percent) while outlays rose by $127 billion (around 3 percent), worsening the deficit by $113 billion compared with the previous year.Higher receipts from individual income taxes (+$96 billion), payroll taxes (+$9 billion) and customs duties (+$7 billion) were mostly offset by lower collections from corporate income taxes (-$92 billion) and fines (-$7 billion).Government outlays increased for net interest on the public debt (+$62 billion), social security (+$43 billion), defence (+$38 billion), Medicare (+$16 billion) and Medicaid (+$14 billion). Increased government spending, especially on defence, has helped fuel the acceleration in economic growth ("A big reason U.S. economy is accelerating; government spending", Wall Street Journal, Oct. 25). But the federal government's deteriorating financial position and increased borrowing needs are also driving up yields on Treasury securities affecting borrowing costs across the entire economy and worldwide. Yields on 10-year U.S. Treasury notes have risen to more than 3.2 percent, more than double the recent low in 2016, and the highest since 2011 (https://tmsnrt.rs/2QAh6n2).Tax cuts and increased spending at a relatively late point in the economic cycle have also encouraged the Federal Reserve to keep raising interest rates in order to hold inflationary pressure in check.The combination of fiscal stimulus and tightening monetary policy has caused the exchange rate to appreciate, worsening the trade deficit as exporters and import-competing firms lose competitiveness to foreign rivals. In effect, the economy is being over-stimulated by fiscal policy and the resulting imbalance is showing up in rising interest rates, increasing borrowing costs, an appreciating exchange rate and a widening trade deficit.
Debt ceiling will be set to record high of $22 trillion, fund government to just summer - The federal government is set to reinstate its borrowing limit, and a new analysis indicates that it will be a record-high $22 trillion — and then, it won’t provide enough money to fund the government past summer. The shocking number, however, is only slightly higher than the current actual debt of some $21 trillion. The ceiling has been in suspension and the debt has grown under President Trump. It is set to be reinstated on March 2, 2019. A new Bipartisan Policy Center estimate suggests that the new limit will be $22 trillion, assuming no action is taken by lawmakers before that time. The BPC analysis said: “Treasury will be able to fully fund the government until at least mid-summer 2019 by using extraordinary measures, cash-on-hand, and incoming cash flow. But costs to taxpayers will start earlier from factors associated with reaching the debt limit such as higher interest rates on U.S. Treasury securities.” The analysis warned of troubles with the growing debt. “Our long-term debt path is reckless and potentially dangerous for the future of our economy, but the debt limit in its current form carries unacceptable costs and risks,” Shai Akabas, economic policy director at BPC, said. “It’s also proven to be an unsuccessful playbook for debt reduction. The American people have seen this movie before, and we should demand a different ending.”
‘The Federal Government Does Not Need Revenue’ - CFO - It’s difficult to have a valid opinion on macroeconomics if, like me, you’re not an economist. A case in point is illustrated by Modern Monetary Theory. Some regard MMT proponents as in essence a cult. At the very least, it can be said with confidence that they represent a minority of economists. Among that minority is Stephanie Kelton, an economics professor at Stony Brook University on Long Island. She’s fairly recently emerged as something of a rock star, if such a thing exists in the world of economics. She’s on TV all the time. She has been an adviser to both Senate Democrats and the Bernie Sanders presidential campaign. This article arose from a recent lecture by Kelton at Stony Brook that was open to the public, and a subsequent email exchange I had with her. As noted, I can’t vouch for the validity (or vice versa) of her economic theories. But they are flat-out fascinating. If you fear that the ever-swelling U.S. national debt is a road to fiscal Armageddon, these theories offer an alternative picture: the debt not only does no harm, it’s actually a gargantuan economic stimulus. The cornerstones of Modern Monetary Theory are that sovereign governments that are the sole supplier of national currency (like the United States) can issue as much currency as they want; have unlimited ability to fulfill promised future payments; and cannot go bankrupt. In her lecture, Kelton ran a short video containing clips of leading politicians — an equal number of Democrats and Republicans — insisting that the pace of growth in the national debt is unsustainable. Observed Kelton, “They say that Washington can’t agree on anything. That’s baloney.” But they’re all wrong, she added. She presented a cartoon from 1937, decrying that the national debt had reached $36 billion, followed by examples showing how that opinion never wavered over the decades as the debt grew and grew while America nonetheless prospered. “Today the gross national debt is $21 trillion and continues to grow,” she said. “The cartoonists, pundits, warnings, and hysteria are still with us. The sky is always falling. They’re scaring us with stories about how it’s unpatriotic, how it’s burdening the next generation, how it’s dooming us to a future of higher taxes, how it’s a catastrophe for the nation.”
The Tax Cuts and Jobs Act, One Year Later - Tim Taylor - The Tax Cuts and Jobs Act was signed into law by President Trump less than a little less than year ago, on December 22, 2017. What are the likely benefits and costs associated with the legislation? The Fall 2018 issue of the Journal of Economic Perspectives (where I work as Managing Editor) includes a two-paper symposium on the subject. Joel Slemrod provides an overview of the main elements of the legislation and its effects in " "Is This Tax Reform, or Just Confusion?" (32:4, pp. 73-96). Alan J. Auerbach focuses on one primary aspect of the law, its shifts in the US corporate income tax, in "Measuring the Effects of Corporate Tax Cuts," (32:4, pp. 97-120). Here's a flavor of Slemrod's argument: "Its serious downsides are the contribution to deficits and to inequality. The former is less of a concern to the extent that the Tax Cuts and Jobs Act turns out to stimulate growth; the latter is less of an issue the more its centerpiece cuts in business taxation will be shifted to the benefit of workers, especially low-income workers. In both cases, the Tax Cuts and Jobs Act represents a huge gamble on the magnitude of these effects, about which the evidence is not at all clear. My own view is that the stimulus to growth will be modest, far short of many supporters’ claims, and so the Tax Cuts and Jobs Act will increase federal deficits by nearly $2 trillion over the next decade, a nontrivial stride in the wrong direction that promises to shift the tax burden to future generations. How it will affect the within-generation distribution of welfare is the most controversial question of all. Although according to conventional wisdom, the Tax Cuts and Jobs Act delivers the bulk of the tax cuts to the richest Americans, whose relative well-being has been rising continuously in recent decades, other plausible models of the economy, supported by some new empirical evidence, raise the possibility that the gains will be more widely shared. This is the most important question about which we know too little." Auerbach digs into the tricky issues involved in thinking about who really ends up paying corporate taxes, how they affect investment, and how the answers to these questions may change in a world of multinational corporations operating across borders. Auerbach writes: In summary, the rise of the multinational corporation, with cross-border ownership and operations, and the growing importance of intellectual property in production have broadened the set of relevant behavioral responses to corporate taxation and led governments to participate in a multidimensional tax competition game. In this game, each country chooses not only its statutory corporate tax rate, but also asset-specific provisions applying to domestic investment and rules applying to cross-border investments. Changes in any one instrument may affect firms on several decision margins, and policy changes might influence US investment through several direct and indirect channels. While one may expect a reduction in the US corporate tax rate to encourage US-based investment and production, the effects of other policy changes may be more complex."The Democrats’ Options for Repealing the Trump Tax Cut --By Stephanie Kelton - It’s not too soon to think about what the Democrats might do about the Republican tax cuts if they eventually win back power, maybe as early as 2020.President Donald Trump thinks he knows the answer. He told voters at a rally in Charlotte, North Carolina, that their gains from the cuts would be in jeopardy if the Democrats had their way. They “will try to erase every single thing that we’ve achieved,” he warned. Is he right?Recently, I’ve been writing about the impact of the tax cuts. First, I argued that Democrats were missing the point by focusing on how the reductions affected the federal budget. Then, I explored the popularity (or lack thereof) of the cuts, noting that most Americans view them as a giveaway to the rich, even as the average taxpayer will benefit, at least a little, from them.In this column, let’s look at the Democrats’ options should they manage to win control of Congress and the White House in two years. Why wouldn’t they just scrap the Tax Cuts and Jobs Act?After all, the legislation passed without a single Democratic vote in the House or the Senate. Only 8 percent of Democratic voters support the cuts. Overall, just 46 percent of the population approves.Here’s the rub. Right now, more than half of Americans (51 percent) say the cuts aren’t helping them. The law took effect at the beginning of the year, but the benefits didn’t show up in the 2017 taxes people filed in April. That probably explains some of the lackluster sentiment captured in the chart.
House results: What's next after Democrats take control Republicans - Democrats took control of the House on Tuesday night, a victory that will transform a Republican-controlled chamber that supported and protected President Trump into a legislative body ready to challenge and investigate him. Victories in GOP-held suburban seats around the country gave Democrats more than the 23 seats they needed to retake the majority, giving them control of half of Congress after being locked out of power since Trump took office last year. They aim to quickly usher in a new era and tone in Washington, starting with a legislative package of anti-corruption measures aimed at strengthening ethics laws, protecting voter rights and cracking down on campaign finance abuses. “Tomorrow will be a new day in America,” House Minority Leader Nancy Pelosi (D-Calif.) declared from the Democratic Party headquarters in Washington. “It’s about restoring the Constitution's checks and balances to the Trump administration. It’s about stopping the GOP and [Senate Majority Leader] Mitch McConnell’s assaults on Medicare, Medicaid, the Affordable Care Act, and the health care of 130 million Americans living with preexisting medical conditions.” Pelosi promised action on lowering the cost of prescription drugs and rebuilding the nation’s infrastructure, and pledged to pursue bipartisanship where possible. “A Democratic Congress will work for solutions that bring us together, because we have all had enough of division,” she said.Trump called Pelosi on Tuesday night to congratulate her on her party’s success and acknowledge her call for bipartisanship, her spokesman said.There are, however, also many points of probable conflict between Trump and the next House: Democrats are likely to launch investigations into numerous aspects of the Trump administration, from its ties to Russia to the president’s tax returns, as well as to step up oversight into Trump’s executive actions on immigration, the environment and other regulations.“Obviously the country gave us a mandate to provide some check and balance on the executive that has been sorely missing these last two years,” said Rep. Gerald E. Connolly (D-Va.). “And that involves rigorous oversight and accountability. ... This is not a time for holding back or being less than vigorous.” A House takeover amounts to major vindication for Pelosi, who became the first female House speaker in 2006, only to lose the majority in 2010 as voters rebelled against President Barack Obama’s health care law in the first midterm elections of his presidency.
Trump Declares Victory As He Faces Two-Year Struggle With House Democrats - Despite record voter turnout and a staggering $5 billion political spend between both parties, Democrats' hoped-for 'blue wave' failed to materialize on Tuesday. Instead, the reality was closer to a purple wash. Democrats won a slight majority in the House - they were up 26 seats at last count, three more than the 23 needed to flip control, with more races expected to be called in their favor on Wednesday - but Republicans picked up seats in the Senate, solidifying what had been a razor-thin majority. Almost all of those seats were won by staunch conservatives who are expected to back the Trump agenda. Meanwhile, it's unlikely that the Democrats will come anywhere close to the 40 seats they would have needed to signify a "tsunami-like" victory. However, at least one Democratic narrative was validated as 18 of the 29 Republican districts that flipped to the Democrats were won by women, cementing the 'year of the woman' narrative. Both parties can claim important victories in gubernatorial races. Republican Mike DeWine bested Richard Cordray in Ohio, and Ron DeSantis defeated Democratic challenger Andrew Gillum in Florida, solidifying Republican control over two key swing states. But Democrats wrested control of governors' mansions in Wisconsin, Michigan and Kansas. Republican won several important victories in the Senate and ousted a handful of Democratic incumbents, per the FT: In the Senate, the Democrats lost ground after its incumbents were defeated in North Dakota, Indiana and Missouri. At last count, Democrats were also trailing in Montana and Florida, with the latter race possibly set to go to a recount. The only real upset for Democrats in the upper chamber was the defeat of Nevada's Dean Heller, who lost to Democrat Jacky Rosen. But the Senate victories were strong enough to vindicate President Trump's controversial campaign strategy, which saw the president hold a blitz of campaign rallies across the US, while elevating immigration to the race's defining issue. Still, the Democrats' takeover of the House suggests that they will almost certainly use their subpoena power to investigate everything from Trump's tax returns to his financial ties in Eastern Europe to his purported "relationship" with the Kremlin. It also signals that Trump is in for a two-year struggle as partisan gridlock will almost certainly hamstring parts of his agenda.
Early exit polls: US midterms all about Trump -- Most voters said that their ballot in the U.S. midterm election was about President Donald Trump and that they had recent extremist violence on their minds as they headed to the polls, according to early exit polls. Television networks early on Tuesday evening teased the results of exit polls even before the first polls had closed in Indiana and Kentucky. One potentially troubling sign for Republican incumbents: While majorities of voters polled said that they felt positively about the economy, they didn’t name it as a key issue and also said the country is headed in the wrong direction. Trump’s approval rating was around 44 percent, according to CNN, with 55 percent of voters disapproving of him. A majority of voters, 54 percent, said they had an unfavorable view of the Republican party compared to 43 percent who had a favorable opinion.Nearly four in 10 voters said their vote for member of Congress was about opposing Trump, while roughly a quarter said they cast their ballot to support the president, according to CNN. A third of voters said Trump wasn’t a factor.More than three-in-four voters said that recent extremist violence was either the most important or an important factor in their vote today, the CNN poll found. Voters largely said they felt positively about the economy in the CNN exit poll. Roughly two-thirds labeled the economy “good,” while three in 10 said it was “bad.” More than eight in 10 voters said that their family’s financial situation was about the same or better today than it was two years ago, according to the CNN exit poll. Yet the economy didn’t rank as the top issue for most voters in the early exit polls. More than four in 10 voters said that health care was the most important issue facing the country, according to the CNN exit poll, followed by immigration (23 percent), the economy (21 percent) and gun policy (11 percent).
Abby Martin: The Democratic Party’s ‘Abysmal Failure’ Presenting a Platform Real News Network video - Being anti-Trump is not good enough for defeating Trump. The Democratic Party needs a clearer and more progressive platform if it hopes to halt the country’s rightward movement, says Empire Files’ Abby Martin on the TRNN midterm election panel
The Midterm Results Gave Everybody Just Enough To Keep Fighting - Voters went to the polls on Tuesday with an overwhelming belief that the American economy is in strong shape and that the country is headed in the wrong direction. Those voters surged to the kinds of numbers that the nation’s electoral system was ill-equipped to handle, with reports of broken scanners and voting machines. Lines stretched around corners and into parking lots while voters waited for hours. As the ballots were being counted, it became clear that there would be little clarity by the end of the night. Democrats, on the back of historic turnout — the product of two years of post-Trump grassroots organizing — seized control of a House of Representatives that had been meticulously gerrymandered in order to assure that they would never be able to do just that. Democrats also made major gains in state capitals, winning governorships in Kansas, Illinois, Wisconsin, Michigan, and Maine. The liberal energy on the ground, when it wasn’t canceled out by GOP turnout, gave Democrats full control of state governments in Colorado, New York, Maine, New Mexico, and Illinois. In Minnesota, the state House flipped to blue, as did both the New Hampshire state House and Senate, while Democrats flipped at least 10 seats in the Texas statehouse. The New York win ushered in not just incoming state Sen. Julia Salazar, but also at least a dozen senators backed by the Working Families Party, putting an end to an era of “three men in a room” rule in Albany. Major progressive ballot initiatives were approved, too, with the most historic in Florida, where Amendment 4 got well more than the 60 percent it needed in order to restore the right to vote to people convicted of felonies. Elsewhere, voters expanded Medicaid in Idaho, raised the minimum wage in Missouri, and legalized weed in Michigan. Yet President Donald Trump will be able to survey that landscape and claim vindication for his ratcheting up of racist rhetoric in the final weeks of campaigning. The failure to deliver a knockout blow to Trump will exacerbate tensions within the Democratic Party, torn between its progressive wing, which wants to lean into small-dollar donors and run as the only party free of corporate corruption, and its centrist wing, which argues that only with corporate money and an inoffensive platform can Democrats take power
Pelosi Says Will Cooperate With Trump On Infrastructure Spending, Hopes To Be Speaker - In a fig leaf offering of cooperation, Democratic House leader Nancy Pelosi, fresh off her victory in the House, said she spoke with President Donald Trump and Mitch McConnell about working together on infrastructure spending that would help create jobs."That issue has not been a partisan issue in the Congress of the United States," Pelosi said during a press conference at the Capitol, adding that the Democrats captured control of the House by focusing on health care.Separately, Trump described what he called a “very warm conversation” with Pelosi Tuesday night, but then complained and pushed the notion that Democrats are out to impeach him, saying that the country is fatigued by investigations into his conduct, and warns that if House Democrats push more probes, it will only benefit him politically.Addressing the topic, Pelosi wouldn’t say whether that will or will not happen; instead, she focused on what she called the legitimate oversight duties the new Democratic-led House would conduct through committees. Pelosi however warned that while bipartisanship is important, the midterm election also “restores checks and balances” so that Congress won’t “be a rubber stamp for President Trump”."Yesterday’s election was not only a vote to restore people’s health care, it was a vote to restore the health of our democracy."Pelosi insisted that Democrats would not go "looking for a fight," but if a subpoena is needed to conduct oversight, or get information, "so be it."Finally, Pelosi expressed confidence that she will be elected speaker: “Yes, I am.” She will need 218 votes on the House floor for that to occur.However, as The Hill notes, Pelosi has a "math puzzle" to solve as she embarks on her quest to reclaim the Speaker’s gavel. A dozen Democratic candidates who have been critical of the California Democrat won election to Congress on Tuesday night, while another 12 incumbents have vowed to oppose Pelosi’s bid to lead the conference. That’s a problem for Pelosi, who can’t afford more than a dozen Democrats to vote against her in a public floor vote for Speaker.
Trump should raise the gas tax to pay for infrastructure fixes, former Transportation secretary says -- President Donald Trump should seize on the post-midterm enthusiasm for a bipartisan infrastructure deal by supporting ways to boost revenue to pay for fixing America's antiquated roads, bridges and airports, former Transportation Secretary Ray LaHood told CNBC on Thursday. Trump should "persuade Republicans in the Senate that they're going to have to pass some kind of revenue-raiser," said LaHood, a Republican former congressman who served under Democratic President Barack Obama. While Democrats won control of the House in Tuesday's voting, Republicans added to their majority in the Senate, which would need to sign on to any plans that come out of the House. However, the GOP is still short of the 60-vote threshold to overcome a filibuster in the Senate and would need Democratic support to pass most legislation.
Sessions out at Justice Department - Attorney General Jeff Sessions has resigned as the top Justice Department official at President Trump’s request, a development that is likely to spark a firestorm of criticism following the midterm elections.The decision punctuates months of criticism by President Trump of his top law enforcement officer over his recusal from the ongoing Russia investigation. And it confirms widespread speculation that Trump would move to fire Sessions sometime after the midterms.Sessions agreed to resign at Trump’s request, according to a copy of his resignation letter obtained by The Hill.“I came to work at the Department of Justice every day determined to do my duty and serve my country,” Sessions wrote. “I have done so to the best of my ability, working to support the fundamental legal processes that are the foundation of justice.” Trump made the announcement over Twitter, thanking Sessions for his service and wishing him “well.” The president revealed that Matthew Whitaker, Sessions’s chief of staff, would take over as acting attorney general and said a permanent replacement would be nominated “at a later date.”
In Bipartisan Pleas, Experts Urge Trump to Save Nuclear Treaty With Russia Alarmed at what they see as disintegrating curbs on nuclear weapons, a bipartisan array of American nonproliferation experts has urged President Trump to salvage a Cold War-era treaty with Russia that he has vowed to scrap. In letters sent to the White House this week that were seen by The New York Times, the experts said the pact, the Intermediate-Range Nuclear Forces Treaty, had reduced the risk of nuclear war. Despite the treaty’s flaws, they said, the United States should work to fix the accord, not walk away from it. “The INF Treaty has prevented the unchecked deployment of nuclear missiles in Europe,” stated one of the letters, sent Wednesday to the White House. It was signed by more than a dozen prominent figures in arms control, including former Secretary of State George P. Shultz and former Senators Richard Lugar and Sam Nunn. Another letter, dated Tuesday and sent by the American College of National Security Leaders, a group of former high-level military officers, said: “The INF Treaty is a bedrock to our current arms control regime and serves rather than hampers American interests.” There was no immediate comment from the Trump administration on the letters. The treaty’s fate may come up this weekend if Mr. Trump sees President Vladimir V. Putin of Russia during a memorial event in France celebrating the centennial of the end of World War I. But there have been conflicting accounts from the White House and the Kremlin on whether the two will even meet.
Washington playing with the devil: Diplomat warns US against limited nuclear war strategy - TASS - The strategy of a limited use of nuclear weapons, developed in the United States, would lead to global catastrophe rather than victory in a possible war, Russian Foreign Ministry Spokeswoman Maria Zakharova told reporters on Thursday. Read also Russian diplomat blasts US State Department for spreading ‘fake news’ against Russia "Voices have been getting louder in the United States that seek to increase the role of nuclear weapons and expand the possibilities of the US nuclear arsenal," the diplomat said, noting that the need for this line is explained by the "mythical Russian threat." This disturbing approach was echoed by Elbridge Colby, former Deputy Assistant Secretary of Defense for Strategy and Force Development in the Foreign Affairs magazine. The former high-ranking Pentagon official calls for not just stepping up America’s nuclear potential but in fact for preparing to carry out "limited nuclear operations." "I want a clarification: where would these limited operations be carried out?" Zakharova asked. "On what continent would this strategy be fulfilled, if it was fulfilled?" This stance is not just an assumption of a retired military officer, she noted. "Similar theses are enshrined in the updated US nuclear doctrine, which was published in early February," she noted. "Moreover, Washington has already announced plans for creating nuclear warheads and the means of delivering them, which are designed to be used in the framework of this strategy. Judging by this, US analysts have started seriously considering the concept of a limited nuclear war and apparently, some of them have thought this over and assessed that the US and its allies would be able to gain a victory in it."
North Korea Warns They’ll Return to Nuke Development If Sanctions Aren’t Lifted - Over the weekend, North Korea issued a statement warning that they will “seriously consider” returning to the development on nuclear weapons if the US continues to refuse to ease economic sanctions against them. Since North Korea halted nuclear testing and has made substantial diplomatic progress, many nations have advocated for some early sanctions relief, but so far every such effort has been blocked by the US. North Korea is growing increasingly impatient with that, and with the Trump Administration refusing to reach a peace treaty with them. Secretary of State Mike Pompeo dismissed the threats, and reiterated that the US has no intention of allowing any sanctions relief until America achieves its “ultimate objective.” Though this is meant to be understood as nuclear disarmament, some in North Korea have been increasingly vocal in fearing that the US will never deliver on anything once they’ve already gotten what they want. Pompeo says he will be meeting with North Korea’s number two this week in New York, which may be an attempt to smooth this over, as well as a chance to discuss a new Trump-Kim summit. At this point, however, the administration’s position of insisting all their demands be met unconditionally and that they don’t have to do anything in return is clearly wearing thin.
US-North Korean talks called off -- A key meeting between US Secretary of State Mike Pompeo and North Korea’s chief negotiator Kim Yong Chol, due to take place in Washington yesterday, was abruptly called off at the last minute. While the US State Department said the meeting was just postponed, the cancellation is another sign of an impasse that has been reached over North Korea’s nuclear program. US officials told the Wall Street Journal that North Korea had called off the talks. No reasons have been given by either side, other than an implausible statement from a State Department spokesman that there had been “a scheduling issue.” Pyongyang’s frustration had been evident in the lead-up to this week’s meeting. Since June’s Singapore summit between US President Donald Trump and North Korean leader Kim Jong-un, the North Korean regime has halted all nuclear and ballistic missile testing and taken a number of steps to indicate its willingness to denuclearise in return for security guarantees. The US, on the other hand, has done virtually nothing, except suspend joint military exercises with South Korea. At the same time, Washington has insisted that North Korea proceed with dismantling its nuclear programs and facilities, destroying its nuclear arsenal and ending its production of ballistic missiles before the lifting of any crippling US-led sanctions on its economy.Following Pompeo’s visit to Pyongyang for talks in July, the North Korean ministry issued a statement blasting the US for “its unilateral and gangster-like demand for denuclearisation” and warned that trust between the two sides was at a “dangerous” stage.Last Friday, Pyongyang went a step further, warning that it would restart its nuclear testing if the US did not make some corresponding concessions. A North Korean statement published by the state-run KCNA news agency declared that “the improvement of relations and [continuing] sanctions are incompatible.”The statement added: “We gave all things possible to the US, things it hardly deserves, by taking pro-active and goodwill measures. What remains to be done is the US corresponding reply. Unless there is a reply, the DPRK [North Korea] will not move even 1 millimetre. How costly it may be.”
The CIA’s communications suffered a catastrophic compromise. It started in Iran. - In 2013, hundreds of CIA officers — many working nonstop for weeks — scrambled to contain a disaster of global proportions: a compromise of the agency’s internet-based covert communications system used to interact with its informants in dark corners around the world. Teams of CIA experts worked feverishly to take down and reconfigure the websites secretly used for these communications; others managed operations to quickly spirit assets to safety and oversaw other forms of triage. “When this was going on, it was all that mattered,” said one former intelligence community official. The situation was “catastrophic,” said another former senior intelligence official. From around 2009 to 2013, the U.S. intelligence community experienced crippling intelligence failures related to the secret internet-based communications system, a key means for remote messaging between CIA officers and their sources on the ground worldwide. The previously unreported global problem originated in Iran and spiderwebbed to other countries, and was left unrepaired — despite warnings about what was happening — until more than two dozen sources died in China in 2011 and 2012 as a result, according to 11 former intelligence and national security officials. The disaster ensnared every corner of the national security bureaucracy — from multiple intelligence agencies, congressional intelligence committees and independent contractors to internal government watchdogs — forcing a slow-moving, complex government machine to grapple with the deadly dangers of emerging technologies. In a world where dependence on advanced technology may be a necessary evil for modern espionage, particularly in hostile regions where American officials can’t operate freely, such technical failures are an ever present danger and will only become more acute with time. .
U.S. reimposes Iran sanctions, Tehran decries ‘bullying’ (Reuters) - The United States on Monday restored sanctions targeting Iran’s oil, banking and transportation sectors and threatened more action to stop its “outlaw” policies, steps the Islamic Republic called economic warfare and vowed to defy. The measures are part of a wider effort by U.S. President Donald Trump to curb Tehran’s missile and nuclear programs and diminish the Islamic Republic’s influence in the Middle East, notably its support for proxies in Syria, Yemen and Lebanon. Trump’s moves target Iran’s main source of revenue - its oil exports - as well as its financial sector, essentially making 50 Iranian banks and their subsidiaries off limits to foreign banks on pain of losing access to the U.S. financial system. The return of the sanctions was triggered by Trump’s May 8 decision to abandon the 2015 Iran nuclear deal, negotiated with five other world powers during Democratic President Barack Obama’s administration. That agreement had removed many U.S. and other economic sanctions from Iran in return for Tehran’s commitment to curtail its nuclear programme. Trump denounced the deal because of time limits on some of Iran’s nuclear activities, as well as for its failure to address other Iranian activity that the United States does not like. In abandoning the agreement and imposing sanctions that it had lifted as well as adding new ones, the United States is betting the economic pressure will force Iran to change its behaviour and agree to a new, much more restrictive deal.
US escalates illegal economic war on the people of Iran - Washington launched the second and far more punishing phase of its illegal, unilateral economic sanctions against Iran yesterday. The new sanctions explicitly target more than 700 entities—banks, companies, the entire fleet of state-owned Iran Air, and various officials and businessmen. They are meant to choke off all of Iran’s energy exports and freeze Iran out of the world banking system, so as to crash its economy. Shipping, ship-building and the ship-insurance industry are also targeted. At the beginning of August, three months after American President Donald Trump had reneged on Washington’s commitment to the 2015 Iran nuclear accord and insisted Iran submit to a new “made in the USA” agreement, the US imposed sanctions on Iran’s auto sector and its trade in gold and base metals vital for industrial production and its acquisition of dollars. At a Monday morning press conference, US Secretary of State Mike Pompeo boasted that the sanctions now in place are “the toughest ever,” more sweeping and punishing than those the Obama administration and its European allies imposed on Iran between 2011 and 2015. “The Iranian regime has a choice,” declared the former CIA director and notorious Iran war hawk. “It can either do a 180-degree turn from its outlaw course of action and act like a normal country, or it can see its economy crumble.” Pompeo vowed that the US would continue its campaign of “maximum pressure” until Tehran submits to the 12 demands the Trump administration tabled last May. These include: forgoing in perpetuity a sovereign civil nuclear program; ending its military intervention in support of Syria’s Assad regime; effectively abandoning its ballistic missile program; and ending all support for Hezbollah, Hamas and other US-designated “terrorist” groups. In toto, these demands constitute an ultimatum that Iran disarm and place itself at the mercy of US imperialism and its regional allies.
Trump administration to Iran on sanctions: Act like a normal country or see economy 'crumble' -- The Trump administration on Monday renewed sanctions against hundreds of entities throughout Iran's energy sector and its broader economy, promising to exert more pressure on the Islamic Republic.The return of sanctions, first implemented during the Obama administration, fulfills President Donald Trump's vow six months ago to ratchet up pressure on Iran, despite widespread international criticism. The Trump administration says it will lift the sanctions only after Iran's leadership in Tehran accepts its list of 12 demands."The Iranian regime has a choice. It can either do a 180-degree turn from its outlaw course of action and act like a normal country or it can see its economy crumble," Secretary of State Mike Pompeo said at a press conference.Iranian President Hassan Rouhani on Monday said Tehran will evade the sanctions and keep pushing its oil barrels into the market, reiterating the nation's long-standing defiance.A new round of punishing sanctions on Iran's energy, banking and shipping sectors went into force overnight. The list targets more than 700 entities, including individuals, banks, aircraft and vessels.Trump announced in May The United States was withdrawing from a 2015 accord with Iran, which lifted wide-ranging sanctions on the Iranian economy. In return, Tehran agreed to accept limits on its nuclear technology program and allow inspections of its nuclear installations.Trump, who has long railed against the nuclear deal as one-sided and flawed, gave foreign companies 90 to 180 days to wind down their business with Iran. Companies that engage in sanctioned activity with Iran face the threat of being locked out of the U.S. market. The 180-day period came to a close this week, restoring a heavier slate of sanctions on Iran than a first round that went into effect after the 90-day grace period. The latest round largely targets oil exports from Iran, OPEC's third-largest crude producer.
Heated rhetoric commences as Trump reimposes sanctions on Iran — The reimposition of sanctions against Iran on Monday has ushered in what is likely to be a protracted period of heated rhetoric and standoff, as the Trump administration threatened more pressure and Tehran warned that it can ramp up its nuclear program again, Middle East experts said. In a preview of the war of words that is likely to escalate, Iranian President Hassan Rouhani said his country would continue selling oil in defiance of the sanctions. As state television aired footage of military forces staging war exercises Monday, Rouhani said Iran is in an “economic war situation.” “We will proudly break the sanctions,” Rouhani said during a meeting of government officials in the Iranian capital. In Washington, Secretary of State Mike Pompeo said: “The Iranian regime has a choice. It can either do a 180-degree turn from its outlaw course of action and act like a normal country, or it can see its economy crumble.” It will take many weeks or months before the effectiveness of the administration’s maximum-pressure campaign against Iran can be judged. But what already is clear is that the renewed sanctions will be greeted by threats hurled between Washington and Tehran as the two governments grow more confrontational. “We should look at today as the first day of an escalating maximum-pressure campaign, not a new status quo,” “We’re going to see an enormous amount of pressure brought to bear on the regime, to the point where it may have to consider negotiating with the Trump administration or the regime will collapse.” The sanctioning of hundreds of Iranian individuals, companies and organizations was the final result of President Trump’s decision in May to withdraw from the nuclear deal, known officially as the Joint Comprehensive Plan of Action (JCPOA). The sanctions target Iranian oil, banks and shipping companies. But many prominent banks and companies were left off the list of more than 700 names, as well as entire sectors like mining and computer sciences, suggesting a strategic decision to hold back some names for future sanctions.
US sanctions will push Tehran's hardliners to the fore, Iranian American council warns - The reimplementation of U.S. sanctions on Iran will benefit the hard-line faction within the Middle East country, according to the Washington, D.C.-based National Iranian American Council (NIAC). The non-profit group — which aims to represent Iranian Americans — added that the sanctions could also isolate the United States and increase its reliance on Saudi Arabia in the region. Policy Director Ryan Costello told CNBC Monday that the current president of Iran, Hassan Rouhani, is a moderate figure who may have to adopt a tougher stance if he is retain control of the country?"Rouhani really has had the rug pulled out from in terms of sanctions … When you look at the forces who have benefited from this decision it is the IRGC (Islamic Revolutionary Guard Corps) who have benefited," Costello said in a phone call."You are kind of likely to see a rally around the flag with this and the moderate wing of the Rouhani government will also have to move more in line with the hardliners," he added.The Trump administration has reinstated all sanctions removed under the 2015 nuclear deal, targeting both Iran and states that trade with it. The policy director said the sanctions "snapback" will allow the Iranian government to shift blame on the U.S. as the cause of domestic suffering, especially should shortages of food and medicines become more acute. Under pressure from the United States the Iranian rial has weakened. The currency has lost approximately 70 percent of its value against the dollar since the beginning of 2018 on the unofficial market, according to the website Bonbast.com. More than 300 new targets have been included in the latest U.S. sanctions that restrict activities of entities such as energy firms or banks, individuals, sea vessels and aircraft. Only a small number of countries have been granted waivers by the United States to continue to buy oil or do other business with Iran.
Trump Displays His Contempt for the Iranian People --Borzou Daragahi reports on the impact of sanctions ahead of the administration’s reimposition of even more: “Sanctions have crippled the lives of the Iranian people. The elite and their families continue to live their lives. Sanctions do not affect their lives,” says Ali Dehghan, a 20-year-old law student in the city of Yazd. Mr Dehgan, no fan of the Iranian leadership, said he would side with the regime in any conflict with the US.The president took to Twitter today to boast about the sanctions that are crippling the lives of the people: pic.twitter.com/nk2vKvHuaL — Donald J. Trump (@realDonaldTrump) November 2, 2018 The administration’s abuse of sanctions is cruel and unnecessary, and Trump’s childish celebration of that cruelty is unusually disgusting even by his low standards. Tens of millions of people are going to suffer needless hardship and deepening poverty because of his decisions and policies, and Trump treats the misery he is inflicting on them like an episode from cable TV. USA Today reports on the destructive effects of the sanctions: “These sanctions are a slap in the face to the Iranian people who have been squeezed between the repression of their government and the pressure of international sanctions for decades,” Jamal Abdi, president of the National Iranian American Council, said in a statement ahead of Pompeo’s announcement. “Impoverishing ordinary Iranians will not hurt the regime or achieve any of America’s security interests, but it will set back the Iranian people’s aspirations for years to come.” To make all of this even worse, there is no good reason to think that the sanctions will change the behavior of the regime. As Ali Vaez explains, Iran’s support for proxies and allies has remained constant regardless of the economic difficulties: But historical data shows little, if any, correlation between the resources at Iran’s command and its regional behaviour. Rather, the extent to which the Islamic Republic feels threatened or senses opportunity in its neighbourhood largely defines its conduct. Measured against that standard, the Trump administration’s aggressive policy is likelier to spur Iran’s regional activism than to curb it. Trump’s policy will fail on its own terms, but it is going to make the lives of tens of millions of people much harder. There should be no doubt that Trump and his administration have nothing but contempt for the people of Iran, and their cruel policies are proof of that.
Trump Faced Iran Sanctions Rebellion From Allies on the Right - As the U.S. prepared to impose new sanctions against Iran’s energy and banking sectors, senior Trump administration officials faced an internal rebellion from conservatives who accused them of being too weak toward the Islamic Republic. That 11th-hour rupture sent officials at the departments of State and Treasury rushing last week to reassure normally steadfast political allies and harden their messaging on the sanctions announced Monday against 700 banks, individuals and other entities, according to three people familiar with the discussions. Opposition to Trump’s sanctions strategy -- particularly the decisions to issue temporary oil waivers to eight countries and how aggressively to target Iranian ties to global financial networks -- arose most prominently from a handful of Republican senators and National Security Adviser John Bolton, according to the people. Trump justified the decision to issue waivers, telling reporters Monday that “we want to go a little bit slower because I don’t want to drive the oil prices in the world up. It would cause a shock to the market.” That approach worked, with crude prices declining over the past several weeks as reports of waivers leaked into the energy market. But the last-minute pressure and the administration’s response could have lasting ramifications. For one thing, the administration will be hard-pressed to justify extensions to the waivers when they come up for review in another 180 days. Recipients are supposed to use the waiver period to make significant progress cutting Iranian oil imports, which have already been reduced by about one million barrels per day since May. “You take a million barrels out of the market, that’s a lot,” said Kevin Book, managing director of Washington-based consultancy ClearView Energy Partners. “But the next million, million and a half, may not be easy and it could be impossible.”
US Policy On Iran After The Midterm Elections - Barkley Rosser - A curious coincidence is that the US midterm elections happened one day after the US reimposed its second round of illegal economic sanctions on Iran, with the focus on oil, shipping, and banking, along with some other sectors. Despite all but a handful of governments around the world supporting Iran in this matter (despite apparently two attempted assassinations of opponents of Iran’s government in European nations recently) against the US out of a hope to keep Iran following the JCPOA nuclear agreement as it has by all reports been doing, the impact of the midterm elections is probably to reinforce support for Trump’s policy, even as mostly he lost support in the election. The reason is that the most important location for serious critics of a president’s foreign policy usually come out of the Senate, not the House of Representatives or governors. So, even though the Dems have taken the House and gained governorships, the GOP gained in the Senate, and some of the GOPs leaving included the few Trump critics, notably departing Foreign Relations committee Chair, Robert Corker of TN. This is the case, even as those GOP gains may only amount to a net two or even only one. Yet another reason the gains by Dems will probably not lead to much more pressure on Trump on this is that many Dems at least somewhat support his policy, especially those strongly influenced by the Israeli government. Thus in today’s Washington Post, a lead editorial (presumably by neoconnish Fred Hiatt) said there may be reasons for imposing some sanctions because of “malignant” policies by Iran, notably supposedly supplying missiles to the Houthis in Yemen, plus the Syrian government, and Hezbollah in Lebanon (there are doubts on the extent of all this), even as WaPo opposes the US withdrawing from the JCPOA and is highly critical of Saudi Arabia due to the murder of their journalist, Jamal Khashoggi, probably on orders of KSA Crown Prince MbS, a main enemy of Iran. Indeed, members of both parties in the Senate have become unhappy with the Saudi war in Yemen and may move to cut US military support of the Saudi war effort there. But this will probably have little to no effect on the reimposed economic sanctions on Iran. A final point is that it is extremely unlikely that this policy by Trump will lead to Iranian leaders kowtowing to him and entering into any negotiations. If anything, they might get pushed into pulling out of the JCPOA or create trouble for their enemies in various ways. OTOH, it may be that the sanctions will not lead to as harsh impacts on the Iranian economy as forecast, whether this is due to the Europeans and Chinese setting up alternative payments systems, or due to Iran wriggling out of the sanctions whether due to waivers or through such maneuvers as barter transactions involving oil or the use of “ghost ships” that do not use any radio communications, something reportedly already going on. We shall see how this all turns out, but for now Trump probably has gotten a modest boost of support for his policies within the US as a result of the midterm elections, much as I am not pleased to see this.
Iran's Leadership Must Decide If They Want Their People To Eat – Pompeo - --Less than a week after US Secretary of State Secretary Mike Pompeo told Fox News Sunday that the "Iranians are responsible for the starvation' of Yemeni civilians" he's again issued hugely provocative words, telling the BBC during an interview that Iranian "leadership has to make a decision that they want their people to eat" in reference to the latest round of US sanctions. As the interview was with BBC Persian, Pompeo's words were immediately translated from English and broadcast to the Iranian public through BBC's Persian-language publication. Pompeo repeated his theme that Iran is the world's foremost state sponsor of terror and a "destabilizing influence" in the Middle East while ultimately blaming the country's economic suffering on the intransigence of the country's leaders. Pompeo's words came on the heels of Iran's foreign ministry issuing a formal response to this week's US sanctions snap back on the energy sector, publishing a 3-minute video of FM Javad Zarif on Tuesday wherein Zarif emphasized that the sanctions mainly targeted average Iranian citizens, referencing "the economic warfare that directly targets the Iranian people." The most contentious segment of the BBC interview was as follows: POMPEO: The folks who are hurting the Iranian people are the ayatollah and Qasem Soleimani and the Iranian leadership. That’s who is bringing the difficulties to Iran today. And you see this. You see this when you read of the protests. You see this when Iranian people have a chance to speak, although we know the human rights there don’t permit the Iranian people to speak freely. It’s the regime that is inflicting harm on the Iranian people, not the world and not the United States.--State Dept. transcript of the BBC Persian interview
Iran’s Ayatollah Ali Khamenei: Trump has disgraced US prestige - Iran's supreme leader Ayatollah Ali Khamenei has said that US President Donald Trump has "disgraced" US prestige and would be the ultimate loser from re-imposing sanctions on Tehran.The United States restored sanctions on the Islamic Republic's shipping, energy and financial sectors on Friday.The measures will come into effect on Monday."This new US president ... has disgraced the remnant of America's prestige and that of liberal democracy. America's hard power, that is to say, their economic and military power, is declining, too," Khamenei said on Twitter on Saturday, quoting a speech he gave earlier in Tehran.Khamenei was speaking on the eve of the anniversary of the 1979 takeover of the US embassy in Tehran. "The challenge between the US and Iran has lasted for 40 years so far and the US has made various efforts against us: military, economic and media warfare," he said
State Department: US Will Soon Impose More Sanctions Against Russia — The US State Department has announced that they intend to soon impose additional sanctions against Russia, after demanding that Russia provide them with a statement offering very specific “assurances” on the use of chemical weapons.This all goes back to the allegations of a March Novichok attack in Salisbury, England. The British government blamed Russia for the attack, while Russia has denied it. The US already sanctioned Russia over the matter, and expelled large numbers of Russian diplomats.They followed this up by demanding Russia give the US “reasonable assurances” that they will never again use chemical weapons. Russia never did so, since these assurances were predicated on Russia accepting guilt for the attack they denied involvement in. It is unclear when the new sanctions will take effect, but Russia is warning that using this as a pretext for new US sanctions and other restrictions would be illegal. In Congress, many are pushing the State Department to impose massive sanctions against Russia, though this is a general trend and not necessarily based on any belief Russia launched this specific attack.
The U.S. Military’s Empire of Secrecy -- Right under most Americans’ noses, the military has become more opaque over the last several years. Now, few outlets cover foreign policy with any particular gusto—after all, there’s so much to say about Stormy Daniels or the Brett Kavanaugh drama. But this trend should concern all citizens.Thing is, what the U.S. military is up to on any given day is done in your name. If civilians are killed, locals alienated or civil liberties restricted, then the global populace, including concerned U.S. citizens, aren’t going to fix blame solely on the armed forces … they’re going to blame you! If for no other reason than this, citizens of an—ostensible—democracy ought to be paying attention. The military is a fierce, potentially brutal instrument, and anyone who cares about liberty ought to watch it closely.Only that’s getting harder and harder to do in today’s political climate. On one issue after another the U.S. military has recently intensified its secrecy, has classified previously open information and has suppressed any remaining sense of transparency. Don’t just take my word for it: This week a relatively mainstream congressional Democrat, Adam Smith—a ranking member on the House Armed Services Committee—wroteat length on this very topic.Make no mistake, these trends are long-standing and gradual. So, what follows is not some vacuous liberal attack on President Trump, who remains, for legal purposes, and so long as I remain in uniform, my commander in chief. Still, the time is long past when someone needs to scream from the proverbial mountaintop about America’s expanding empire of secrecy.
Jeff Bezos Puts The Pentagon On His Monopoly Board - While employees at Google and Microsoft are wary of collaborating with the military, Amazon revels in it... Speaking at the Wired 25th anniversary last month month, Amazon CEO Jeff Bezos announced that his company will continue to accept Pentagon contracts. That includes a very controversial cloud-computing contract that Google and Microsoft have already backed out of due to vocal employee opposition to working with the U.S. military.Amazon was long considered the front-runner for this contract, but Bezos’s rationale for taking it goes well beyond its being low-hanging fruit. He’s argued that the government’s job is to “make the right decision, even when it’s unpopular,” and that large tech companies should support those decisions irrespective of politics.The $10 billion tied to the contract can’t hurt either. Whatever his motivation for sucking it up and taking one for team tech, Bezos’s public justification is a poor one, and it isn’t hard to see why. The Pentagon has a long history of immoral and reckless behavior, actions that objectively aren’t beneficial to the defense of the United States. Any company that blindly works with them does so at its own peril.Employees at Google and Microsoft have already made a powerful case for why tech giants shouldn’t collaborate with the Defense Department. They don’t want to be responsible for developing technology that causes substantial harm, surveils others in violation of international norms, or contravenes human rights. The Pentagon can be counted on to do all three, and more.Furthermore, the Pentagon’s growing interest in artificial intelligence (A.I.), particularly as it relates to warfighting, sounds out of the preamble for a dystopian novel. Hence why Google employees forced their company not to renew a controversial Pentagon contract in June involving A.I. While Amazon will be signing on to cloud computing, not A.I., it’s still more than a little concerning that Bezos was so adamant about the virtues of the DoD. (For what it’s worth, Amazon already works with the CIA.) But Amazon has an interest that extends far beyond this single deal. The real prize is to become the military’s sole procurement source for off-the-shelf components. Disdainfully labeled Amazon.mil by critics, this initiative is a result of a congressional mandate that the Pentagon shift procurement to a single online marketplace. The mandate is supposed to save the Pentagon money when buying run-of-the-mill items like bottled water. It would also give Amazon, the presumptive facilitator, a virtual monopoly on selling a vast array of items to a government department with nearly limitless money that’s notorious for overpaying for things.
U.S. Army launches New Warriors Wanted Campaign Commercial - The Army is full of Soldiers facing unknown threats and within these ranks, they are able to trust in their fellow Soldiers and their Warrior Ethos, Soldiers never fail to complete their mission. Army soldiers personal courage knows no bounds, taking on the most difficult missions often in the most dangerous places to help others is a code of ethics that’s hardwired into every U.S. Soldier. Fighting for what’s right with honor, integrity, and certitude— regardless of the consequences. In a world full of threats to our nation, the U.S. Army is the first to step up to set things right. With the new U.S. Army campaign, the service is a calling for a few that can or will answer the nation’s call. The ones that do, will never stop fighting the fights that matter.According to reports, the new campaign is not the new recruiting slogan to replace “Army Strong,” an effort that Sergeant Major of the Army Dan Dailey hinted at in June. It is, however, part of the service’s recruiting reform effort launched after the service missed its annual recruiting goal by more than 6,000 soldiers.U.S. Soldiers will always face the enemy head-on anywhere day or night, armed with the latest tech, weaponry, combative, and tactical equipment. They do the impossible to preserve the American way of life.This makes them the most lethal combat-ready force in the world.Those armed with more than good intentions. Those ready to put ideas into action. To take their skills and hone them. To take their knowledge and apply it. To make themselves into a modern, ready and unbeatable fighting force.
Paul to Saudi foreign minister: 'It takes a lot of damn gall' to lecture the US - Kentucky Republican Sen. Rand Paul on Monday pushed back on the Saudi foreign minister Adel al-Jubeir who criticized him for suggesting Crown Prince Mohammed bin Salman was responsible for Jamal Khashoggi's death."Yesterday the Saudi foreign minister chose to lecture me on television about the Khashoggi murder," Paul said on a conference call with reporters. "He said my opinion was based on emotion and speculation and that we should presume innocence for the crown prince. My response to him is that it takes a lot of damn gall for Saudi Arabia, with a dictatorship with 3,000 political prisoners held without trial, to lecture the US on the presumption of innocence." Al-Jubeir told Fox News on Sunday there is, "the presumption of innocence until proven guilty," and that the US Congress should, "wait until they have the facts," on Khashoggi's murder before making a judgment.Responding to criticism from Paul specifically, al-Jubeir said, "I find it very surprising that somebody 6,000 miles away can be certain about an event that happened 6,000 miles away with no access to information or intelligence. So, this is a judgment call on the part of Senator Paul. This is not based in fact, it's just based on emotions and based on speculation." Paul said he has discussed his concerns about arms sales to Saudi Arabia with President Donald Trump and said they should not be considered a "jobs program," an apparent reference to Trump who has said jobs and billions of dollars would be at stake should the US terminate the sales.
The Untold Story of the US-Saudi Petrodollar Partnership -- After the dollar was withdrawn from the gold standard, Washington made an arrangement with Riyadh to price oil solely in dollars. In return, the Saudis received protection and were granted a free hand in the region. This decision forced the rest of the world to hold a high amount of US dollars in their currency reserves, requiring the purchase of US treasuries. The relationship between the US dollar and oil breathed new life to this currency, placing it at the centre of the global financial and economic system. This privileged role enjoyed by the dollar allowed the United States to finance its economy through the simple process of printing its fiat currency, relying on its credibility and supported by the petrodollar that required other countries to store reserves of US treasuries in their basket of currencies. The agreement made between Washington and Riyadh guaranteed that the latter would receive protection from the former and Washington would look the other way regarding Riyadh’s behavior within its kingdom and in the region – so long as Saudi Arabia sold its black gold in US dollars alone. This agreement was clearly a controversial one and has been kept away from the general public, even in the light of Khashoggi’s death and the liberal mainstream media’s piling on the Kingdom. Yet this is not the only reason why US-Saudi ties are so close. The initial agreements between the Saudis and the Americans concerned the petrodollar; but after the Islamic revolution in Iran in 1979 (Iran’s nationalist prime minister, Mohammad Mosaddegh, had been previously overthrown by the US and UK in 1953), Riyadh and Washington decided to declare war on their common enemy, with the hearty approval of Israel. The cooperation between Riyadh and Washington became even closer in the 1980s, through the common campaign against the USSR in Afghanistan through the use of jihadists recruited, trained and armed by the Pakistan, Saudi Arabia, and the US secret services. The use of jihadist terrorism as a geopolitical weapon has been a main feature of Riyadh’s statecraft. The relationship between Saudi Arabia and the US evolved from a mere economic and protection agreement, to a full-fledged collaboration against the shared enemies of Washington, Tel Aviv and Riyadh, expanding on the existing cooperation since the 1980s of using jihadism to advance strategic objectives. The situation with Iran became of primary importance for US strategy in the region. Riyadh, with the passage of time, assumed a triple role, namely, that of being the guarantor of the petrodollar, a facilitator in the use of Islamic terrorism as a geopolitical weapon, and a regional opponent of Iran.
Saudis Call for Amazon Boycott Over Anger at Washington Post (Bloomberg) -- Saudis who are angry at The Washington Post’s coverage of the kingdom in the aftermath of Jamal Khashoggi’s murder are calling for a boycott of Amazon.com Inc. because of its shared ownership by U.S. billionaire Jeff Bezos. "Boycott Amazon" was the top trending hashtag on Twitter in Saudi Arabia for several hours on Sunday, as users circulated images showing the deletion of the Amazon smartphone app. They also called for a boycott of regional subsidiary Souq.com, acquired by Amazon last year. Neither Amazon nor The Washington Post were immediately available for comment. Many citizens have felt that their country is under attack since Saudi agents killed Khashoggi, a Post columnist and insider turned critic, at the kingdom’s consulate in Istanbul. They’ve been particularly upset by an op-ed article by Turkish President Recep Tayyip Erdogan recently published in the Post, and by the newspaper’s coverage -- along with other international media -- of gruesome information about the murder obtained from anonymous Turkish officials. “It became clear before our eyes that this is an organized media war," said Bandar Otyf, a Saudi journalist with more than 100,000 Twitter followers who was among those calling for the boycott. “As Twitter users and activists and citizens, we don’t have power abroad, but we have simple things like boycotting." Many Saudis are learning for the first time that Bezos, the founder and chairman of Amazon, separately owns the Washington Post, Otyf said, adding that “if we affect even a portion of their business, we’re satisfied." While few in Saudi Arabia use Amazon directly, Souq.com is popular. Last year, Saudi Arabia’s sovereign wealth fund invested in a competing e-commerce firm called Noon, which was founded by the chairman of Emaar Properties.
Exclusive: Trump, industry work behind the scenes to save Saudi arms package (Reuters) - The Trump administration and the U.S. defense industry are scrambling to save the few actual deals in the much-touted $110 billion arms package for Saudi Arabia as concerns rise about the role of the Kingdom’s leadership over the death of a prominent critic. President Donald Trump has hedged his criticism of Saudi leaders over the disappearance and death of U.S. resident and Washington Post columnist Jamal Khashoggi, insisting he does not want to imperil a “tremendous order” of $110 billion of weapons he says will support 500,000 U.S. jobs - figures that experts say are highly exaggerated. Khashoggi’s killing in the Saudi consulate on Oct. 2 has caused global outrage and raised questions about the possible role of Crown Prince Mohammed bin Salman, the powerful de facto ruler of Saudi Arabia who controls the kingdom’s security services. Riyadh has blamed a “rogue operation” and said the crown prince had no knowledge of the killing. Working behind the scenes in Washington, a defense industry group has circulated talking points to industry executives, focusing on the importance of arms sales to U.S. allies. Companies hope to preserve the deals on the Saudi list with near-term delivery dates in 2019 and 2020, ideally firming up the soft commitments made during Trump’s trip in May 2017. “Contingency Points On Defense Sales to Saudi Arabia” were emailed to defense contractors by the Aerospace Industry Association (AIA) in recent days, instructing executives to explain that stopping arms sales could reduce the U.S. ability to influence foreign governments. Talking points help executives promote their point of view when speaking with their own staff, suppliers, the media, government officials and elected officials. The AIA email says the death of Khashoggi “sparked an important conversation about the United States’ relationship with Saudi Arabia,” and details two short responses to whether industry communicated with U.S. government about Khashoggi and the scale of arms sales to Saudi Arabia last year before a lengthy response to the “jobs question.” Yet the answer, laid out in four bullet points, does not mention the numbers Trump has spoken about or any other estimates of possible job gains, instead touching on “economic impact” and explaining how weapons sales strengthen political-military relationships.
Trump administration considers naming Yemen’s Houthi rebels a terrorist group - The Trump administration is considering designating Yemen’s Houthi rebels a terrorist organization, people familiar with the discussions said, as part of a campaign to end that country’s civil war and put pressure on the Houthis’ ally Iran.The terrorist designation, which would inject an unpredictable new element into fragile diplomatic efforts to initiate peace talks, has been discussed periodically since at least 2016, according to several of the individuals. But the matter has received renewed examination in recent months as the White House seeks to stake out a tough stance on Iranian-linked groups across the Middle East, they said.A formal terrorist designation by the State Department could further isolate the rebels, members of a minority Shiite Muslim sect who seized control of Yemen’s capital in late 2014, but critics warn that such a move might also worsen already dire humanitarian conditions without pushing the conflict closer to a conclusion.The individuals, who spoke on the condition of anonymity to describe internal deliberations, said the administration has considered an array of potential actions, including lesser measures to punish the rebels, but they said no decision had been made. It was not immediately clear how far deliberations about the terrorist designation, which would be made by the State Department, had progressed. The rise of the Houthi movement, which has received military backing from Iran, has sparked an extended military operation by Persian Gulf nations that fear the expansion of Tehran’s reach on the Arabian Peninsula. Since 2015, jets from a Saudi-led coalition have bombed Houthi-controlled areas while allied ground forces have attacked rebel positions.
US 'war on terror' has killed over half a million people- study - Hundreds of thousands of people in Afghanistan, Iraq and Pakistan have been killed due to the so-called "war on terror" launched by the United States in the wake of the September 11, 2001 attack, according to a new study.The report, which was published on Saturday by the Brown University's Watson Institute for International and Public Affairs, put the death toll between 480,000 and 507,000.The toll includes civilians, armed fighters, local police and security forces, as well as US and allied troops.The report states that between 182,272 and 204,575 civilians have been killed in Iraq; 38,480 in Afghanistan; and 23,372 in Pakistan. Nearly 7,000 US troops were killed in Iraq and Afghanistan in the same period. The paper, however, acknowledged that the number of people killed is an "undercount" due to limitations in reporting and "great uncertainty in any count of killing in war". "We may never know the total direct death toll in these wars," wrote Nera Crawford, the author of the report titled "Human Cost of the Post-9/11 Wars: Lethality and the Need for Transparency". "For example, tens of thousands of civilians may have died in retaking Mosul and other cities from ISIS [also known as ISIL] but their bodies have likely not been recovered."
US Declares War On Troika Of Tyranny , Pushing Them Closer To Russia - Tough new penalties are planned against the “troika of tyranny,” consisting of Venezuela, Cuba, and Nicaragua “in the very near future.” This announcement was made by National Security Adviser (NSA) John Bolton on Nov.1 — a few days before the US mid-term elections — in an attempt to draw more support from Hispanic voters, especially in Florida. An executive order on sanctions against Venezuela has already been signed by President Trump, but that’s just the beginning.It was rather symbolic that on the same day the NSA delivered his bellicose speech, the UN General Assembly (UNGA) voted overwhelmingly in support of a resolution calling for an end to the US economic embargo against Cuba. The document did not include amendments proposed by the US that would put pressure on Havana to improve its human-rights record.This is a prelude to a massive escalation in US foreign policy, which will include the formation of alliances, in addition to the active confrontation of those who dare to pursue policies believed to be anti-US."Under this administration, we will no longer appease dictators and despots near our shores," Bolton stated, adding,"The troika of tyranny in this hemisphere -- Cuba, Venezuela and Nicaragua - has finally met its match." Sounds like a declaration of war. Brazil, Colombia, Argentina, Chile, and Peru are probably some of the nations the US is eyeing for a potential alliance.Bolton’s “troika” includes only countries ruled by governments that are openly “red” or Communist. The list of nations unfriendly to the US is much longer and includes Bolivia, Ecuador, Dominica, Grenada, Uruguay, and some other states ruled by leftist governments. Andrés Obrador, the president-elect of Mexico, takes office on Dec. 1. The Mexican leader represents the country’s left wing and looks like a tough nut to crack. Outright pressure may not be helpful in this particular case. Now that this new US policy is in place, Moscow and Washington appear to have another divisive issue clouding their relationship. The “troika of tyranny” against which Washington has declared war enjoys friendly relations with Russia.
What Trump really wants: European car parts - Brussels fears U.S. President Donald Trump is out to poach the most valuable part of the European auto sector: the manufacturing of engine components, from electrical systems to fuel injection pumps.Europe’s big car exporters such as Germany, Spain and the Czech Republic are looking on with horror as Washington’s trade negotiators seek to bring in a new points-based system within car quotas that rewards foreign carmakers for making more parts on American soil. Looking at the way Trump is seeking to roll out quota deals with Canada and Mexico, it has become increasingly clear to EU trade officials that the U.S. strategy is to snatch top-end auto manufacturing away from Latin America, Asia and Europe and bring it to the U.S.The American plan is playing especially badly in Germany, heartland of the EU motor industry. While big German carmakers assemble vehicles in the U.S. and Mexico, many high value-added components are still made in German factories.The first danger sign for Europe is the new U.S.-Mexico-Canada Agreement (USMCA), in which Washington forced its North American neighbors to accept quotas on their own exports of cars to the U.S. European Commission officials and industry representatives say they expect the U.S. to allocate the quotas with Canada and Mexico based on a point system, which grants a higher score to companies that use more local car content made on North American soil.
Something's Rotting In The State Of North Dakota- Panicked Farmers Hope Trade War Ends As Soybeans Pile Up - Facing incredible losses in both profits and product, SHTFplan's Mac Slavo notes that soybean farmers are desperately hoping that the trade war implemented by president Donald Trump will soon end. As the stock of soybeans begins to reach their rotten stage, farmers across the country are beginning to panic. Although President Donald Trump sees tariffs as a tool to “force changes” in America’s economic relationships with China and other major trading partners, it doesn’t seem to be helping anyone in the U.S. His tough approach, according to the president himself, will revive American industries like steel and auto manufacturing that have lost ground to foreign rivals. But that is coming at a steep cost for some industries, like farming, that have thrived in the era of globalization by exporting goods to foreign markets. It’s also having major setbacks for other industries, as retail stores have already warned of the higher prices that we will all pay soon, thanks to the tariffs. Because China has stopped buying soybeans thanks to the trade war between the United States and the communist nation, American farmers fear for their own livelihood as they face piles of rotting beans hoping the trade war will end. According to the New York Times, in previous years, American farmers have profited by growing massive amounts of soybeans and shipping them off to China where they were fed to pigs and chickens. However, this year, thanks to the trade war, the Chinese have all but stopped buying American soybeans. The largest market for one of America’s largest exports has shut its doors. The Chinese government imposed a tariff on American soybeans in response to the Trump administration’s tariffs on Chinese goods. The latest federal data, through mid-October, shows American soybean sales to China have declined by 94 percent from last year’s harvest.Kevin Karel, the general manager of the Arthur Companies, which operates six grain elevators in eastern North Dakota, has started to pile one million bushels of soybeans on a clear patch of ground behind some of his grain silos. The big mound of yellowish-white beans, already one of the taller hills in this flat part of the world, will then be covered with tarps. –The New York Times Karel said that the hope among all farmers in America is that prices will rise before the beans rot. Worse still, as Mish notes, this year was a Record Harvest so storing the beans before they rot is a record problem.
Ivanka Trump's shuttered business wins Chinese trademarks to voting machines .. Mere weeks after President Trump suggested China is meddling in the midterm elections. -- The fashion brand of first daughter and presidential adviser Ivanka Trump won first trial approval for 16 new Chinese trademarks — the largest number of trademarks her business has received from China in a single month — according to government watchdog group Citizens for Responsibility and Ethics in Washington (CREW). In July, however, Trump announced that she would shut down her fashion brand and step away from the business as she became a bigger presence in the White House. “After 17 months in Washington, I do not know when or if I will ever return to the business,” Trump said at the time, “but I do know that my focus for the foreseeable future will be the work I am doing here in Washington, so making this decision now is the only fair outcome for my team and partners.” The new trademarks will remain in her name regardless of her decision to shutter the business. Several of them will remain active until 2028 at the latest — leaving open the possibility that the first daughter can return to the business after she leaves the White House and continue to profit off of the connections she’s made there. The trademarks cover basic fashion items like handbags, shoes, and jewelry, which makes sense considering her company has (quite controversially) used Chinese manufacturers to produce products. But this recent slate of Chinese trademarks, which Trump’s business applied for in 2016, include some rather random and questionable items like sausage casing, nursing homes, and — most surprisingly — voting machines. “Ivanka receives preliminary approval for these new Chinese trademarks while her father continues to wage a trade war with China,” CREW said Monday in a statement. “Since she has retained her foreign trademarks, the public will continue to have to ask whether President Trump has made foreign policy decisions in the interest of his and his family’s businesses.”
Cohn Sees No ‘Instant Cure’ on U.S.-China Trade After Midterms - Ex-White House economic adviser Gary Cohn said he didn’t expect Democratic election gains to speed the end of President Donald Trump’s China trade war, even as some in Beijing held out hope he might warm to talks. “I don’t think there’s an instant cure for the trade issue,” Cohn told Bloomberg’s New Economy Forum in Singapore as assembled business and political leaders digested the results Wednesday. “I wish that I could sit here and say, after the midterm elections, the White House and the administration understand they’ve gotta solve trade issues.” While the Democrats’ success in gaining control of the U.S. House of Representatives might frustrate Trump with investigations and make it harder for him to push through legislation, it might mean little for his trade policy. Trump can wield many of his preferred weapons, from tariffs to criminal probes, without congressional approval, and the opposition party has traditionally been more protectionist on trade. The trade dispute has been propelled in part by widening bipartisan support for the need to confront China, a concern cited frequently during the two-day forum in Singapore. Even before the election results were clear, former U.S. Treasury Secretary Hank Paulson warned of an “Economic Iron Curtain” dividing the world, if the two sides failed to resolve strategic differences. “I would often hear Chinese express hope that the Dems winning the House back could translate into a softer stance from the U.S. with regard to the ongoing trade disputes with China,” said Paul Haenle, a former China director for the National Security Council who now heads the Carnegie-Tsinghua Center in Beijing. “That kind of thinking grossly underestimates the growing consensus in D.C. on the need to adopt a much tougher approach.” The results stoked a volatile session for Chinese stocks as investors weighed how the results would impact the trade dispute. The MSCI China Index rose as much as 1.3 percent, erased it all to fall 0.7 percent, and then turned higher again in mid-afternoon trading. China’s yuan weakened against the dollar.
China is ready to talk to resolve US trade war, says Vice-President Wang Qishan - China is ready to engage with the US to resolve their months-long trade war, Vice-President Wang Qishan said at a new economic forum in Singapore hosted by US billionaire Michael Bloomberg.Wang, widely reputed to be a “firefighter” and one of President Xi Jinping’s most trusted allies, pushed back against Washington’s “America first” trade policies in a nearly 20-minute keynote address on Tuesday at the newly inaugurated Bloomberg New Economy Forum, without making reference to US President Donald Trump by name.At the same time, he promoted a vision of globalisation that was an echo of Xi a day earlier in Shanghai at a government-sponsored import fair, in another effort by Beijing to quell global scepticism about its resolve to adopt economic reforms.“China and the US both wish to expand cooperation on the economy and trade,” he said at the ballroom of the Capella Resort on Singapore’s Sentosa Island.“The Chinese side is ready to have discussions with the US on issues of mutual concern to push for a proposal acceptable to both sides to resolve their economic and trade issues.”He said China and the US needed to cooperate closely to resolve the problems facing the world, and that economic globalisation would move forward despite twists and turns. “Negativity and anger are not the way to address the problems that have emerged from globalisation, nor will barriers and disputes help solve one’s own problems; instead, they will only exacerbate global market turbulence,” Wang said.
Trump all but announces trade deal with China - In a press conference at the White House Wednesday afternoon, following better-than-expected results for his party in midterm elections, President Trump all but declared that he had concluded a trade deal with China. “They got rid of ‘China 25,’” the president said in response to a reporter’s question, in an apparent reference to China’s Made in China 2025 program to eliminate dependence on imports in several key high-tech industries by the year 2025. The daily Report Must-reads from across Asia - directly to your inbox “China would have superseded us in two years as an economic power. Now they’re not even close. China got rid of their ‘China 25’ because I found it very insulting. I told that to them. That means in 2025 they’re going to take over – economically – the world,” Trump told reporters. Significantly, Trump used the past tense, as if referring to a deal that was already well on its way to completion. He went on to tout progress that he has made in pressuring Beijing, adding: “we’re going to try to make a deal with China because I want to have a great relationship with President Xi – as I do – and also with China.” I reported from Beijing last month that China was willing to back away from the “Made in China 2025” program in the context of a trade deal with the United States: By backing off from the 2025 target, Chinese officials believe, Beijing can placate the US Administration, and give President Trump a coup in public relations while keeping its own industrial program intact. The government is exploring a number of ways to present such a deal. Last week, a new government draft entitled “Made in China 2030” was released for discussion at government think tanks. Some government advisers mention the year 2035 rather than 2025 as a goal for achieving China’s high tech ambitions. The differences are largely verbal and have little bearing on actual policies. Judging from the president’s remarks on Wednesday, China’s flexibility in branding its high-tech investment program helped placate the US Administration. .
Trump’s top trade adviser just warned Goldman Sachs and Wall Street not to leave their ‘stench’ on the US-China trade war talks - Peter Navarro, President Donald Trump’s avowed anti-China trade adviser, leveled fierce attacks against Wall Street – specifically Goldman Sachs – for what he alleged was meddling in talks to resolve the US-China trade war. Speaking at the Center for Strategic and International Studies in Washington on Friday, Navarro accused Wall Street of acting on behalf of the Chinese government and said “globalists” were trying to influence trade negotiations. “Consider the shuttle diplomacy that is now going on by a self-appointed group of Wall Street bankers and hedge fund managers between the US and China,” Navarro said. “As part of a Chinese government influence operation, globalist billionaires are putting the full court press on the White House in advance of the G20 in Argentina. The mission of these unregistered foreign agents – that’s what they are, unregistered agents – is to pressure this president into some kind of a deal.” Chinese officials have reportedly attempted to talk to some Wall Street titans about Trump’s trade attacks against the country – specifically Blackstone CEO Steve Schwarzman and JPMorgan CEO Jamie Dimon. While those attempts have yielded no results so far, Navarro views the Chinese discussions with Wall Street as shuttle diplomacy, which is conducted through a go-between. “Wall Street, get out of those negotiations. Go to Dayton, Ohio – bring your Goldman Sachs money to Dayton, Ohio and invest in America,” Navarro said. “The president of the United States does not need shuttle diplomacy.”
An end of birthright citizenship in the US and Canada would close more doors for Chinese parents - The world seems to have taken birthright citizenship in the United States for granted. Ever since the case of United States v Wong Kim Ark in 1898, in which the son of Chinese immigrants successfully challenged his denial of entry following a trip outside the US, the 14th Amendment to the US Constitution has been interpreted as granting citizenship by birth to every child born in the US, regardless of race, ethnicity or parents’ nationality.Donald Trump’s recent remarks may be a wake-up call. In an interview last week, Trump vowed to use an executive order to end the US’ tradition of birthright citizenship. If this were the case, newborn children of immigrants, even those with legal status in the US, would be denied US citizenship.It is obvious that Trump’s executive order, if issued, would face harsh media criticism and legal challenges. Many argue that the 14th Amendment still safeguards birthright citizenship for all newborn babies on American soil. Be it a targeted policy against foreign nationals’ birth tourism or simply a reinforcement for Trump’s “America first” views, it clearly shows Trump’s hostility towards foreign nationals living and working in the US, regardless of their actual immigration status.However, this is not the only attack on birthright citizenship; the opposition Conservative Party of Canada has announced its support for ending the practice as well. Unlike in the US, changes regarding the Canadian Citizenship Act might not necessarily trigger a constitutional challenge. If the Conservative Party wins the 2019 federal election, the new government in Canada will have a better chance of ending the country’s birthright citizenship policy. Many readers might be familiar with the change in birthplace permanent residency in Hong Kong, after the Leung Chun-ying government halted birth tourism by putting in place a “zero-quota” policy to stop mainland women from giving birth in Hong Kong. The policy came into effect in 2013 after a public backlash against pregnant mainland Chinese women taking up Hong Kong’s precious medical resources and welfare benefits.
The DEA and ICE Are Hiding Surveillance Cameras In Streetlights - According to federal contracting documents, the U.S. Drug Enforcement Administration (DEA) and Immigration and Customs Enforcement (ICE) have hidden an undisclosed number of covert surveillance cameras inside streetlights around the country. Quartz reports: According to government procurement data, the DEA has paid a Houston, Texas company called Cowboy Streetlight Concealments LLC roughly $22,000 since June 2018 for "video recording and reproducing equipment." ICE paid out about $28,000 to Cowboy Streetlight Concealments over the same period of time. It's unclear where the DEA and ICE streetlight cameras have been installed, or where the next deployments will take place. ICE offices in Dallas, Houston, and San Antonio have provided funding for recent acquisitions from Cowboy Streetlight Concealments; the DEA's most recent purchases were funded by the agency's Office of Investigative Technology, which is located in Lorton, Virginia. "We do streetlight concealments and camera enclosures," Christie Crawford, who owns Cowboy Streetlight Concealments with her husband, told Quartz. "Basically, there's businesses out there that will build concealments for the government and that's what we do. They specify what's best for them, and we make it. And that's about all I can probably say."
U.S. militia groups head to border, stirred by Trump’s call to arms WaPo — Gun-carrying civilian groups and border vigilantes have heard a call to arms in President Trump’s warnings about threats to American security posed by caravans of Central American migrants moving through Mexico. They’re packing coolers and tents, oiling rifles and tuning up aerial drones, with plans to form caravans of their own and trail American troops to the border. “We’ll observe and report, and offer aid in any way we can,” said Shannon McGauley, a bail bondsman in the Dallas suburbs who is president of the Texas Minutemen. McGauley said he was preparing to head for the Rio Grande in coming days.“We’ve proved ourselves before, and we’ll prove ourselves again,” he said. McGauley and others have been roused by the president’s call to restore order and defend the country against what Trump has called “an invasion,” as thousands of Central American migrants advance slowly through southern Mexico toward the U.S. border. Trump has insisted that “unknown Middle Easterners,” “very tough fighters,” and large numbers of violent criminals are traveling among the women, children and families heading north on foot. The Texas Minutemen, according to McGauley, have 100 volunteers en route to the Rio Grande who want to help stop the migrants, with more likely on the way.
US Troops Lay Down Razor Wire At Southern Border US troops at the US-Mexico border are laying down approximately 1,000 feet of razor wire fencing along the Texas side of the Rio Grande river underneath the McAllen-Hidalgo International Bridge, as three separate caravans of Central Americans make their way north in the hopes of claiming asylum.Soldiers participating in "Operation Faithful Patriot" are working with US Customs and Border Patrol officers to install the fencing, according to the Department of Defense. U.S. Army troops, part of “Operation Faithful Patriot” arrived to the U.S. border with Mexico, deployed by President Trump ahead of midterms. Soldiers spread out barbed wire along the Rio Grande in south Texas. #immigration #border #caravanamigrante #undocumented #army pic.twitter.com/PVD6YIbCvk During a Saturday campaign rally in Montana, President Trump said "Mexico is trying, they are trying but we’re different, we have our military on the border," adding "And I noticed all that beautiful barbed wire going up today. Barbed wire, used properly, can be a beautiful sight." pic.twitter.com/BFuc3ljwfo A spokesman for the US Border Patrol told the New York Post that the fencing was part of "necessary preparations" for the caravans.
Border Troop Deployment Cost May Reach $220 Million The cost of deploying troops to the US-Mexico border to help deal with three incoming caravans of Central American may cost as much as $220 million, according to CNBC, citing two US defense officials who were not authorized to speak publicly. The estimate, which could change on the ultimate size and scope of the mission, comes amid the deployment of approximately 4,000 troops to the border on Saturday ahead of the first caravan's arrival - which has dropped in size from an initial 7,000 to under 4,000 as participants have either accepted asylum in Mexico or turned around. Trump has made the caravan one of his prime targets as he campaigns for Republicans down the stretch of the midterm election campaign. The president has referred to the caravan as an "invasion" while claiming that Democrats want open borders.Critics have called the deployment a political stunt. Defense Secretary James Mattis, however, downplayed that criticism last week. "The support that we provide to the secretary for homeland security is practical support based on the request from the commissioner of customs and border police. We don't do stunts in this department," he said Wednesday. –CNBC CNBC also wants you to know that the caravan does not pose an immediate threat to the United States, according to a Pentagon risk assessment reported by "a person with direct knowledge of US intelligence," who we assume isn't a fan of stopping the incoming migrants. The person added that the caravan would take around a month to reach the US border, which we assume means on foot. On Sunday we reported that newly arrived US troops had placed around 1,000 feet of razor wire fencing along the Texas side of the Rio Grande river underneath the McAllen-Hidalgo International Bridge, as three separate caravans of Central Americans make their way north in the hopes of claiming asylum.
General Dunford: US Troops Won’t Deny Migrant Caravan Entry to America — Speaking at Duke University on the thousands of ground troops sent to the US border with Mexico, Joint Chiefs of Staff Chairman Gen. Joe Dunford insisted that there are no plans for the troops to ever come in contact with the migrant caravan. Dunford says the troops, which could number as many as 15,000 according to the administration, are merely there to support the Homeland Security operation, and aren’t intended to carry out any missions on their own.This mad been a major question in the repeated deployment of troops to the border, as the Posse Comitatus Act is intended to prevent using the military in a law enforcement role, and officials have been very vague on what the troops will actually do. That’s still a question, with President Trump emphasizing the installation of “beautiful” barbed wire at the border in recent days. If the National Guard deployments are any indication, the reality is that the troops probably won’t be doing all that much.
There Are "Absolutely" Middle Easterners Among Caravan: DHS Secretary Nielsen - -Homeland Security Secretary Kirstjen Nielsen doubled down on a claim that Middle Easterners are among those traveling in the Central American caravans currently making their way north in hopes of gaining asylum in the United States. Speaking with Fox News Intelligence on Monday, Nielsen said: "We absolutely see people from the Middle East, from southeast Asia, from other parts of the world," adding "They are not just from Central America.""We don’t always know exactly who they are ... What I can tell you is we stopped 3,000 people last year at the southwest border who had patterns of travel similar to a terrorist. We call those special interest aliens."Nielsen also added that the migrants are using women and children as "barriers," which are sent up to the front of the group to frustrate federal military and police, and that the rest of the caravans - which appear to be organized and financed - are comprised of "mostly single men." She added that the timing and origin of the groups are suspicious in nature. Nielsen's comments come amid a CNBC report suggesting that President Trump's decision to send thousands of US troops to reinforce border security in California, Arizona and Texas will cost upwards of $220 million.
Trump Proposes Ending Asylum For Illegal Immigrants - As was widely expected following his promises to stop crowds of illegal migrants from entering the US, President Trump on Thursday signed an order to end asylum for illegal immigrants before the caravans arrive. The order, which is expected to elicit howls of outrage from the left, will almost certainly be met with a court challenge, according to a Bloomberg report. The Trump administration said it would prohibit people who illegally cross the U.S. border with Mexico from claiming asylum, as the president seeks to choke off migration from Latin America, Bloomberg News reports. The change to asylum procedures was published Thursday by the Justice Department. President Donald Trump has blamed U.S. asylum rules for luring thousands of migrants a year from Central American countries. The new rule is almost certain to be challenged in courts. According to an NBC News report published early Thursday afternoon, senior Trump administration officials expect to be sued over the "draconian" immigration order. But with Brett Kavanaugh cementing a conservative majority on the court, the administration expects that it will prevail, as even the pre-Kavanaugh split court allowed the administration some wiggle room to implement its controversial travel ban. However, some worry that Neil Gorsuch could throw a wrench in the works by opposing the proposal, as he appeared to have reservations about supporting another restrictive immigration ruling during arguments on another case earlier in the term, per the New York Times. Trump is expected to issue a proclamation putting the new rules into effect as soon as Friday. According to its terms, migrants will be required to make asylum claims at official points of entry where "they would be processed in a controlled, orderly, and lawful manner," according to the rule. "Our asylum system is overwhelmed with too many meritless asylum claims from aliens who place a tremendous burden on our resources, preventing us from being able to expeditiously grant asylum to those who truly deserve it," Homeland Security Secretary Kirstjen Nielsen and Acting Attorney General Matthew Whitaker said in a joint statement.
Trump rolls out regulation to limit asylum access at the US-Mexico border: Politico - The Trump administration on Thursday rolled out a fast-track regulation that will restrict the ability of certain migrants to seek asylum at the U.S.-Mexico border — a move that’s almost certain to trigger legal challenges and humanitarian backlash. The administration issued an interim final rule that will bar certain migrants caught crossing the border between ports of entry. The regulation will be paired with a presidential proclamation that outlines the migrants subject to the asylum bar, administration officials said on a call with reporters. The officials would not detail who could be subject to the ban, but said more information likely would be revealed Friday. .The regulation seeks to “channel inadmissible aliens to ports of entry, where they would be processed in a controlled, orderly, and lawful manner,” according to a notice posted online Thursday afternoon. In recent weeks, President Donald Trump has fixated on a group of Central American migrants trekking through Mexico en route to the United States. During a speech last week, Trump called the caravan an “invasion” and said asylum seekers would be turned away. "This isn't an innocent group of people,” he said of the group, which includes many women and children. “It's a large number of people that are tough.” Republican voters in Tuesday’s midterm elections cited immigration as one of the most important issues facing the country, according to exit polls. The announcement Thursday suggests Trump won’t ease up on his immigration crackdown, which dominated his first two years in office.
The Constitution is Crystal Clear On Birthright Citizenship - President Donald Trump wants to punish babies born in the United States for the wrongful entries of their mothers into the country. There’s just one thing standing in his way: the U.S. Constitution.On October 30, Trump fumed to Axios on HBO that he would end birthright citizenship conferred by section 1 of the 14th Amendment through an executive order presumably targeting the children of undocumented parents. Put aside the fact that birthright citizenship is not the engine driving illegal immigration—it’s much more complicated that that. Also ignore that the babies decried by Mr. Trump are no more likely to turn to crime or become public charges than are other citizens. Birthright citizenship has been undisturbing to domestic tranquility for 150 years. Trump is casting aspersion on the brightest star in our constitutional constellation—that individuals shall be judged and treated based on wisdom, character, accomplishments, and kindnesses, simpliciter. They shall be un-handicapped by what their parents are or have done. That is the inspiring philosophy of the Declaration of Independence. It informs Article III, section 3, clause 2 of the Constitution that prohibits punishing offspring for the treason of parents. And it is celebrated in the 14th Amendment: “All persons born…in the United States and subject to the jurisdiction thereof, are citizens of the United States.” The Supreme Court agreed in Plyler v. Doe (1982) that no child is responsible for his birth, and penalizing the child is an unjust way of deterring the parent. Accordingly, undocumented children brought to the United States by their parents may not be denied a public education.
The Trump administration targets the contraception mandate - With the midterms out of the way, HHS has released two final rules affording employers wide leeway to opt out of the so-called contraception mandate. The first exempts employers with religious beliefs from the obligation to include contraception in the health insurance package they offer to their employees. The seconddoes the same for employers with “moral convictions opposing services covered by the contraceptive mandate.”This isn’t the first time we’ve seen these rules. In October 2017, the Trump administration tried to put them into effect without offering any notice and comment. At the time, I argued that the rules were procedurally defective, and obviously so, because the administration had no good reason for skipping notice and comment. In the inevitable litigation that ensued, two district courts (here and here) agreed and put the rules on hold. The Trump appealed, and the cases are pending in front of the Fourth and Ninth Circuits.In the meantime, HHS took public comments. The final rules released yesterday include responses to those comments and vary slightly—but only slightly—from the original versions. In this long post, I’ll cover what they do, whether they’re legal, and what the Trump administration should’ve done instead.
Former Health Insurance Executive Debunks Trump Attacks on Single Payer -Yves here. This Real News Network interview with former Cigna executive Wendell Potter, who among other things now heads Tarbell.org, a site that investigates money in politics, provided a point-by-point takedown of the factually-challenged criticisms Trump has made of single payer. The fact that this rebuttal comes from a former health industry insider may make it more persuasive to skeptics in your circle. And let us not forget that polls shortly before the election showed that health care was the most important issue to voters, but as we know, the Vichy Dems are much more willing to give lip service to the idea of addressing this inefficient and too often predatory industry than doing something about it.
Here’s the Real Reason Why Republicans Fear ‘Medicare for All’ Now we know why the GOP is truly terrified of “Medicare for all”: It will wipe out the Republican Party’s control of the House, Senate, White House, and most state governments. Because it could make it very easy for every citizen over 18 to vote. In Canada, every citizen has a Canadian government-issued “Health Insurance Card”. It’s largely only available to citizens, as all citizens are eligible for the Canadian Medicare system; everybody else has to work out other insurance options (yes, there are insurance companies in Canada). And in most provinces, the card has your photo and works as an ID card as well as a driver’s license or passport. And the Canadian government also explicitly says right here on Quebec’s elections website that your Medicare card is also your first-choice voter ID card. An American version could work identically, perhaps with a star or hologram or other mark to identify citizens as opposed to Medicare-eligible permanent residents, etc. As Tarek, a Canadian listener to my radio/TV program, shared with me this week: “Since it is in everyone’s best interest to be have ‘free’ health care coverage, unlike other government issued identifications, such as driver’s license…etc, the vast majority (if not all) Canadians from all socioeconomic backgrounds make sure to obtain their health cards, which can be used as an official photo ID for flying domestically, buying alcohol and more importantly voting!” Here in the U.S., ever since Jim Crow, racist white “conservatives” have used a variety of means to prevent poor people, people of color, low-income working people, students, and older people from voting. Techniques have varied over the years, starting with poll taxes and so-called “literacy tests,” and now are carefully calibrated by cutting voting sites, reducing early voting, and even disenfranchising North Dakota’s Native American population.
2nd Kavanaugh Accuser Admits She Lied; Referred For Criminal Prosecution; Kamala's Office Involved -- A Kentucky woman who accused Supreme Court Justice Brett Kavanaugh of rape has been referred to the Department of Justice after she admitted that she lied. The woman, Judy Munro-Leighton, took credit for contacting the office of Sen. Kamala Harris (D-CA) as "Jane Doe" from Oceanside, California. Jane Doe claimed - without naming a time or place - that Kavanaugh and a friend raped her "several times each" in the backseat of a car. Harris referred the letter to the committee for investigation. "They forced me to go into the backseat and took 2 turns raping me several times each. They dropped me off 3 two blocks from my home," wrote Munro-Leighton, claiming that the pair told her "No one will believe if you tell. Be a good girl." Kavanaugh was questioned on September 26 about the allegation, to which he unequivocally stated: "[T]he whole thing is ridiculous. Nothing ever -- anything like that, nothing... [T]he whole thing is just a crock, farce, wrong, didn't happen, not anything close." The next week, Munro-Leighton sent an email to the Judiciary committee claiming to be Jane Doe from Oceanside, California - reiterating her claims of a "vicious assault" which she said she knew "will get no media attention." Upon investigation, the Judiciary Committee investigators found that Munro-Leighton was a left wing activist who is decades older than Judge Kavanaugh, who lives in Kentucky. When Committee investigators contacted her, she backpedaled on her claim of being the original Jane Doe - and said she emailed the committee "as a way to grab attention." Grassley has also asked the DOJ to investigate Kavanaugh accuser Julie Swetnick, who claimed through her attorney, Michael Avenatti, that Kavanaguh orchestrated a date-rape gang-bang scheme in the early 1980s. President Trump chimed in Saturday morning, Tweeting: "A vicious accuser of Justice Kavanaugh has just admitted that she was lying, her story was totally made up, or FAKE! Can you imagine if he didn’t become a Justice of the Supreme Court because of her disgusting False Statements. What about the others? Where are the Dems on this?"
Trump’s Judges Imperil Our Rights for Decades - In less than two years as president, Donald Trump has already put two radical right-wing justices on the Supreme Court, cementing a conservative majority on the Court for decades. He has also placed 29 right-wing judges on the federal circuit courts of appeals with more in the works by the end of the year. These judicial appointments threaten to endanger our rights for years to come. We are painfully aware of how Trump and his GOP congressional leadership stole a Supreme Court appointment from Barack Obama and installed Neil Gorsuch, who has delivered conservative decisions as expected. And millions of us watched horrified as Brett Kavanaugh, Trump’s second Supreme Court pick, laid bare his right-wing bona fides as he lied under oath about a number of things and rallied conservatives in defense of rape culture.Kavanaugh, who joined the high court on October 9, has not yet had the opportunity to rule on a case. But he showed his true colors during oral argument in Nielsen v. Preap, a case involving the right to a hearing for immigrants with criminal records before being imprisoned during the pendency of their deportation proceedings. Kavanaugh, who whined about being deprived of due process when he was accused of sexual assault, appears poised to vote with his fellow right-wing justices and deny immigrants who have already served their time any due process at all.There is widespread focus on Trump’s two Supreme Court nominees. But there is less public awareness of how Trump has been systematically packing the federal circuit courts of appeals with conservative judges who are already slashing the rights of workers, immigrants, women, LGBTQ people, consumers, voters, the environment, people accused of crime and whistleblowers. People for the American Way just released a report detailing the mean-spirited decisions that Gorsuch and Trump’s 29 circuit court judges have already handed down. Since joining the Court a year and a half ago, Gorsuch has not disappointed his conservative Federalist Society and Heritage Foundation backers, which put him on a list of acceptable right-wing judges from which Trump chooses his nominees. Gorsuch has cast the deciding vote in 14 cases that hurt workers, consumers, voters, immigrants and reproductive rights, and upheld abuses of government authority. In Janus v. AFSCME, Gorsuch sided with the other four arch-conservative justices to overrule long-standing precedents that protected the right of public-sector employees to participate in effective collective bargaining.
Michael Bloomberg to air $5 million in ads before midterm elections to tout Democrats — and himself - WaPo. Michael R. Bloomberg, the billionaire former mayor of New York City who is considering a 2020 presidential campaign, took another step closer to that possibility Sunday with a $5 million national advertising effort that encourages voters to support Democrats in Tuesday’s midterm elections — and offers Bloomberg’s centrist politics as a counter to President Trump.Bloomberg’s two-minute television ad, which features him speaking directly to the camera and standing before an American flag, first aired Sunday during CBS’s “60 Minutes.” It will air again Monday during the evening news programs on broadcast networks and on MSNBC and CNN.Bloomberg, 76, portrays himself in the spot as a steady and seasoned Washington outsider (hint: presidential) who is appalled by Trump’s conduct and agenda and alarmed by episodes of political violence and Trump’s mounting attacks on the caravan of Central American migrants. As soft piano notes play, Bloomberg criticizes the “shouting and hysterics” in Washington and the “pointed fingers” and “fearmongering” by Trump on immigration. A grainy image of Trump flashes for a moment — a quick nod to the man he might challenge. Bloomberg’s top political advisers said he firmly believes there is enormous space in the political center and wants Democrats to court voters there and those on the right whose ties to Trump could be fraying. That runs counter to the positioning of many of his potential competitors for a Democratic nomination, who have moved sharply left in recent years. While formally a pitch for Democrats — to whom Bloomberg has given more than $110 million this election cycle — the ad is also revealing of the kind of presentation he could bring to the 2020 campaign trail. He speaks flatly with the faded Boston accent from his youth, devoid of partisan passion and with a technocratic emphasis on competence.
Taibbi: Russia’s Biggest Problem Will Soon Be Ours - Rolling Stone. On Thursday, the Russian Duma held its first reading of a new bill: “On the Citizenship of the Russian Federation.” According to the newspaper Kommersant, the government has prepared a paper representing a “first step toward a serious review of immigration policy.” Included is the idea that: Russia should be open not only to Russians and Russian speakers, but to anyone who is loyal and willing to integrate into Russian society. Russia, you see, has a serious problem with population decline. They’re expecting a 28 percent plunge in women of childbearing age by 2032. Their population peaked at about 148 million, in 1991. You might notice that as the year of the collapse of communism. After the revolution, a series of factors — including introduction to the joys of international capitalism, with the accompanying loss of free health care, spiking economic inequality, accelerated substance abuse, etc. — caused Russia to begin shrinking. The average life expectancy of Russian males plunged six years, from a pre-perestroika high of about 70 years to a low of about 64, in 1994. Soon, while American men had a 1 in 11 chance of dying before the age of 55, the dice roll for Russian males was about 1 in 4. The economic catastrophe of the Nineties resulted in at least a few million premature deaths and possibly more, depending on what study you believe. Specifically, increased deaths were most commonly tied to alcohol consumption, followed by associated health complications, homicide, suicide and booze-related accidents: flying passenger liners under the influence, forgetting you’re on an ice floe while fishing, guzzling methanol-spiked bath lotion when you run out of vodka, etc. Citizens are fleeing to other countries in search of better jobs, and not just to the West, but to places like Kazakhstan. As Bloomberg writes, even the recent addition of 2.3 Crimeans “won’t offset” the statistical trend, and the UN expects Russia’s population to drop to 119 million by 2050, unless it begins opening up its borders.
Trump signed secret waiver that could have major impact on the Mueller investigation -- Citizens for Ethics and Responsibility (CREW) revealed on Friday that Trump signed a secret waiver to prevent Solicitor General Noel Francisco, the man who“built his law practice as if his primary goal was to troll the libs” and is poised to oversee Mueller’s probe if Trump fires Deputy Attorney General Rod Rosenstein, from having to recuse himself from the Russia investigation.Trump’s campaign is represented by Francisco’s former law firm, Jones Day, in Mueller’s investigation, which has racked up more than 100 criminal chargesagainst dozens of people, including guilty pleas from Trump’s former national security adviser, former campaign manager, and multiple former campaign advisers.The president signed an Executive Order shortly after taking office in 2017 that he claimed would strengthen ethics rules in government. CREW explained why that should have caused Francisco to recuse himself from the Russia probe. As required by that Executive Order, Mr. Francisco signed an ethics pledge in which he promised that, for two years after joining the government, he would not participate in any investigation in which Jones Day represents a client. That promise means he must stay out of the Special Counsel investigation until at least late January 2019. However, Trump’s waiver, signed by former White House Counsel Don McGahn in April, now means the man next in line to supervise Mueller is free to be involved with the investigation that involves his former employer.
Trump Ouster of Sessions Gives New Life to Mueller Controversy - Yves Smith - As you almost certainly know, Jeff Sessions, long a Trump punching bag, resigned Wednesday at Trump’s request. Trump skipped what would be the logical path of succession, that of elevating Rod Rosenstein to be acting Attorney General, and instead installed Matthew Whitaker, who had been Sessions’ chief of staff. The Wall Street Journal reports that Whitaker would oversee Robert Mueller’s investigation of Kremlin influence on the Trump campaign, unless Department of Justice ethics officials decide Whitaker needs to recuse himself. Whitaker has been a vocal critic of the Mueller investigation, arguing that it could be curtailed to prevent it from becoming a “fishing expedition.” More detail from the Journal:In August 2017, after FBI agents raided former Trump campaign chairman Paul Manafort’s home, Mr. Whitaker tweeted: “Do we want our Gov’t to ‘intimidate’ us?” and linked to a Fox News story that said the raid was “designed to intimidate.” The same month, he tweeted a Philly.com column titled “Note to Trump’s lawyer: Do not cooperate with Mueller lynch mob,” and added: “Worth a read.”In July 2017, Mr. Whitaker played down the notion that there was anything improper in a meeting at Trump Tower between Trump campaign officials and Russian individuals. “You would always take that meeting,” Mr. Whitaker said on CNN. He also told the network that if Mr. Sessions were replaced with an acting attorney general, he could imagine a scenario in which that person reduced Mr. Mueller’s budget “so low that his investigations grinds to almost a halt.”Bloomberg argues that if Trump indeed fired Sessions out, Mueller could challenge the installation of Whitaker:But Mueller could argue in court that Trump effectively fired Sessions after months of verbal abuse, a legal concept known as a constructive discharge, said Renato Mariotti, a former federal prosecutor who is a frequent Trump critic. Under the Federal Vacancies Reform Act, Trump can appoint an acting official without Senate confirmation if he replaces someone who has been incapacitated or resigned. It doesn’t apply if the previous official was fired. Sessions began his resignation letter by saying he was leaving at Trump’s request.
Jeff Sessions firing: top Republicans warn Mueller inquiry must continue - Senior Republicans led a chorus of public warnings that the special counsel Robert Mueller must be allowed to continue his Russia investigation after Donald Trump finally fired his attorney general, Jeff Sessions. As Trump replaced Sessions with a senior aide, Matthew Whitaker, a critic of Mueller’s inquiry, Senator Susan Collins was among the first Republicans to warn: “It is imperative that the administration not impede the Mueller investigation … Special Counsel Mueller must be allowed to complete his work without interference.” Mitt Romney, who won the race on Tuesday to become a senator for Utah, aimed his first broadside at Trump, tweeting: “It is imperative that the important work of the Justice Department continues, and that the Mueller investigation proceeds to its conclusion unimpeded.” Sign up for the new US morning briefing As progressives activated a plan for mass protests across the United States, starting at 5pm on Thursday in all time zones, the former CIA chief John Brennan predicted that it was likely Mueller had already completed his report for the deputy attorney general, Rod Rosenstein, who was yesterday relieved of his duty overseeing the investigation into Russian election interference and any collusion with the Trump campaign. Brennan told MSNBC: “If there are some major indictments coming down the pike, I wouldn’t be surprised if you’re going to see it very soon. Generally the report that the special counsel will draft and deliver to Rod Rosenstein, I wouldn’t be surprised if that is ready to go.” Sessions looked close to tears as he was applauded by justice department staff on his way out of the building on Wednesday night. His departure came hours after he received a White House call ordering him to resign. He was replaced by his former chief of staff, Matthew Whitaker, who has previously called for Mueller’s investigation to be defunded and reined in.
Democrats rally to defend fired Attorney General Sessions, Special Counsel Mueller -- The Democrats and their fake “left” allies held war-mongering demonstrations in a number of cities on Thursday in defense of the fired far-right attorney general, Jeff Sessions, and the anti-Russia investigation being conducted by Special Counsel Robert Mueller.Wednesday’s ouster of Sessions and his replacement by Trump ally Matthew G. Whitaker has brought forth a wave of condemnation from Democratic Party figures and their media allies, including the New York Times and Washington Post, asserting that the move is the prelude to Trump’s closing down of the Justice Department probe into allegations of Russian “meddling” in the 2016 elections and possible collusion by the Trump campaign.Trump had repeatedly denounced Sessions for having recused himself from the Russia investigation in March of 2017, leaving Deputy Attorney General Rod Rosenstein, a defender of the investigation, in overall charge of its conduct. Whitaker, a former US attorney and now acting attorney general and therefore responsible for overseeing the Mueller probe, is on record criticizing Mueller and suggesting that the Justice Department could cut off funding for his office.Mueller’s investigation has been at the center of a McCarthyite-style campaign against Russia spearheaded by the intelligence agencies and the Democratic Party, based on fabricated claims that Russian President Vladimir Putin interfered in the presidential election to undermine the candidacy of Democrat Hillary Clinton and boost Trump. It has been used as a weapon in the drive by the Democrats and sections of the military/intelligence establishment to force Trump to adopt a more aggressive posture against Moscow and in the war for regime-change in Syria. To the extent that the Democrats oppose the right-wing Trump administration, it is on this entirely reactionary basis. In the lead-up to Tuesday’s midterm elections, they not only called no demonstrations, they were entirely silent on Trump’s fascistic attacks on immigrants, his deployment of troops to the border against the caravan of Central American asylum seekers, and his pledge to overturn the 14th Amendment guarantee of birthright citizenship—a cornerstone of the Bill of Rights.
Will Mueller Use Constructive Discharge To Challenge Sessions Replacement - Special Counsel Robert Mueller could use a legal concept known as "constructive discharge" to challenge the appointment of Matt Whitaker, the acting Attorney General, by arguing that Attorney General Jeff Sessions was forced out as opposed to voluntarily leaving, reports Bloomberg, citing a former federal prosecutor. Mueller could argue in court that Trump effectively fired Sessions after months of verbal abuse, a legal concept known as a constructive discharge, said Renato Mariotti, a former federal prosecutor. Under the Federal Vacancies Reform Act, Trump can appoint an acting official without Senate confirmation if he replaces someone who has been incapacitated or resigned. It doesn’t apply if the previous official was fired. –Bloomberg Whitaker was appointed to run the DOJ after Sessions submitted his resignation Wednesday at Trump's request. While Sessions had recused himself from the Trump-Russia probe, Whitaker will now control oversight of the investigation - a duty which has fallen on the shoulders of Deputy Attorney General Rod Rosenstein - despite the fact that he himself was involved in the FISA warrant process to spy on the Trump campaign. Sessions' resignation letter begins with "At your request," making it unambiguous that Trump fired him. "The question is whether he was constructively fired, which means he didn’t resign from his post," Mariotti said. "I don’t know the answer as to how the courts would view that." Challenging Whitaker's appointment "could be Mueller himself," said Mariotti, adding "That would be one obvious person."
Matthew Whitaker’s Appointment as Acting Attorney General: Three Lingering Questions - Lawfare - President Trump, acting under the Federal Vacancies Reform Act (FVRA), has appointed Matthew Whitaker, formerly the chief of staff to Attorney General Jeff Sessions, to serve as acting attorney general. There has been widespread coverage of the potential ramifications of this appointment for the special counsel’s investigation. But there are three lingering questions about this appointment that have not yet been answered in public: First, is the appointment constitutional? Second, does the president have authority to make an appointment under the FVRA when there is a confirmed deputy attorney general who can act under a specific statute governing Department of Justice succession (28 U.S.C. § 508)? And third, does the acting attorney general have any recusal obligations in relation to the special counsel’s investigation in light of his past statements and relationships? (The order appointing the acting attorney general was presumably reviewed and approved by the Department of Justice’s Office of Legal Counsel for form and legality, so it may have opined on these questions, but the office has not published any opinion.)
Dark Money Paid New Trump Attorney General Matthew Whitaker’s Salary for 3 Years - Today, President Donald Trump announced on Twitter that Matthew G. Whitaker, who served as chief of staff for Attorney General Jeff Sessions, would replace his boss. Whitaker was appointed as Session’s chief of staff on September 22, 2017. Before that, he served for three years as the executive director of the Foundation for Accountability and Civic Trust (FACT), which describes itself as “a nonprofit organization dedicated to promoting accountability, ethics, and transparency in government and civic arenas.”FACT has come under fire for its own lack of transparency, with the Center for Responsive Politics calling attention to FACT’s funding, which in some years came entirely from DonorsTrust, an organization also known as the “Dark Money ATM of the Conservative Movement” and whose own donors include the notorious funders of climate denial, Charles and David Koch. “In other words, an organization ‘dedicated to promoting accountability, ethics, and transparency’ gets 100 percent of its funds from a group that exists mainly as a vehicle for donors to elude transparency,” the Center for Responsive Politics wrote in 2016. In 2014, FACT received $600,000 from DonorsTrust — the only donation it reported that year, according to OpenSecrets.org. An additional $500,000 flowed from DonorsTrust to FACT in 2015. And in 2016, DonorsTrust gave $800,000 to FACT, tax records show, as well as two additional donations, one for $100,000 and another for $450,000. That $2.45 million represents virtually all of FACT's entire reported receipts for those years (except for a total of $456 from 2015 to 2016). In 2016, Whitaker earned $402,000 as FACT’s director and president, according to the organization’s tax filings. That followed reported compensation from FACT for Whitaker of $63,000 in 2014, and $252,000 in 2015.
Mueller Is ‘Ready to Indict Some Folks’: Former FBI Assistant Director for Counterintelligence Special counsel Robert Mueller's investigation into allegations of Russian interference in the 2016 presidential election could soon produce indictments, a former FBI assistant director for counterintelligence said.Frank Figliuzzi, who worked with Mueller at the FBI, told MSNBC what he thought would happen after the appointment of Matthew Whitaker as acting attorney general, a move that followed the forced resignation of Jeff Sessions.Speaking on Brian Williams's 11th Hour, Figliuzzi said he had “a theory” about what Mueller would do: “I think he’s ready to indict some folks and...those indictments will tell the story of what he’s found against the president.“I’m not saying he’s indicting the president. I’m saying there’s a middle ground where he tells us the story, locks it into the court system by indicting others, then files a report with Whitaker,” he said.“Perhaps what we’ll see is Bob Mueller telling us the story of a corrupt president through indictments,” Figliuzzi said, adding that Mueller knew his days were numbered, and so would act soon.“I think the Whitaker appointment steps up the timeline, and I think perhaps if Mueller sticks to the strategy of telling us the story through indictments—the indictments speak to us—that he’ll speak to us soon, very soon, with additional indictments, perhaps that tell the story of a corrupt president,” he said.
Michael Cohen Gives Prosecutors "Evidence" Implicating Trump In Campaign Finance Law Violations - It has been quiet, too quiet, for the almost three months since President Trump's former personal attorney Michael Cohen flipped, pleading guilty to campaign finance violations and other charges, saying he made payments to influence the 2016 election at the direction of a candidate for federal office, potentially delivering a legal blow to the president. Today he stood up and testified under oath that Donald Trump directed him to commit a crime by making payments to two women for the principal purpose of influencing an election. If those payments were a crime for Michael Cohen, then why wouldn't they be a crime for Donald Trump?— Lanny Davis (@LannyDavis) August 21, 2018 .. As we detailed at the time, Cohen, 51, who agreed to a plea bargain with federal prosecutors earlier in the day, pleaded guilty to eight counts total, including five counts of tax evasion and one count of making a false statement to a financial institution. He also pleaded guilty to one count of making an excessive campaign contribution on Oct. 27, 2016, which is the same date Cohen finalized a payment to adult-film star Stormy Daniels as part of a nondisclosure agreement over an affair Daniels alleges she had with Trump. The most damaging statement by Michael Cohen was made when, acknowledging the charges against him, Cohen said he was directed to violate campaign law at the direction of an unnamed candidate for federal office, whom he did not name. Also, as a reminder, Cohen had secretly recorded one conversation that sounded quite damning at the time - despite it's inaudible sections...“Um, I need to open up a company for the transfer of all of that info regarding our friend, David, you know, so that—I’m going to do that right away,” said Mr. Cohen, according to a copy of the audio file.As Mr. Cohen explained his plans, Mr. Trump spoke over him: “So, what are we gonna pay…One-fifty?” Mr. Trump asked. Mr. Cohen paused and replied, “Yes.”Mr. Cohen said he would be getting “all the stuff,” meaning the other files on Mr. Trump he had been seeking. They discussed the uncertainty about what might become of the files if Mr. Pecker no longer ran American Media. “Yeah, I was thinking about that,” Mr. Trump said. “Maybe he gets hit by a truck.”
Trump involved in 'nearly every step' of hush-money payments to Stormy Daniels, Karen McDougal: WSJ- President Donald Trump was involved in "nearly every step" of hush-money agreements with multiple women who claimed they had sexual affairs before he became president, The Wall Street Journal reported Friday. The newspaper, citing dozens of interviews and documents, also reported that Trump may have violated federal campaign finance laws through his participation in the deals. Trump has denied knowing about a $130,000 payment made to Stormy Daniels, an adult film star and director who alleges she had sex with Trump in 2006. Daniels is currently suing Trump and Michael Cohen, his former personal attorney, in connection with a nondisclosure agreement barring her from discussing the alleged tryst. Trump has denied he had sex with Daniels, whose real name is Stephanie Clifford. Cohen pleaded guilty in August to campaign finance violations, and admitted that he made payments to two women at the direction of a candidate for political office. The payments were made to influence the outcome of the 2016 presidential election, Cohen said. Cohen's lawyer, Lanny Davis, said at the time that "Donald Trump directed [Cohen] to commit a crime by making payments to two women for the principal purpose of influencing an election." Davis declined CNBC's request for comment. The Journal reported that Trump, as a presidential candidate, "directed deals in phone calls and meetings" related to the women with Cohen. The U.S. attorney's office in Manhattan, which prosecuted Cohen, has reportedly also collected evidence of Trump's involvement in the agreements. Daniels' lawyer, Michael Avenatti, told CNBC that the Journal's report "confirms what we have been saying all along."
Lee Camp: ‘We’re in a New Age of McCarthyism’ --Lee Camp knows something about being deemed beyond the pale. In June 2017, he found himself the subject of a bizarre profile in The New York Times that suggested, in so many words, that he was a stooge of Vladimir Putin. .”For the past four years, Camp has hosted “Redacted Tonight” on Russia Today—a comedy show that explores the all-too-familiar ills of American empire: unchecked militarism, Wall Street greed and, perhaps most importantly, the propaganda of our political press. During that time, he has developed a cultlike following among leftists desperately searching for an alternative to corporate media. “I’ve been doing stand-up comedy for 20 years,” Camp says. “It became increasingly political after the Iraq invasion in 2002; you know, that’s when I kind of had [an] awakening as to what was really going on in our world.” In November 2017, amid a steady diet of “Russiagate” stories in the national media, the network was forced to comply with the Foreign Agent Registration Act (FARA)—a bill designed to target lobbyists. “[The American Israel Public Affairs Committee (AIPAC)] is the definition of what they’re talking about,” Camp notes. “It is Israel’s lobbying arm in the U.S. And it has never been forced to register as a foreign agent.”In the latest episode of “Scheer Intelligence,” the comedian explores the legacies of Richard Pryor and George Carlin, as well as Lenny Bruce, big tech’s capacity to strangle independent media and the freedom of working for a network like RT America. “I’d just given up the idea of ever being on television, because the things I talk about are not generally allowed on corporate media,” he says. “RT America [lets me talk] about infinite war and Wall Street exploitation … and I’ve never been told to say anything or told not to say anything.” Listen to his interview with Scheer or read a transcript of their conversation below.
Facebook Allowed Advertisers to Target Users Interested in “White Genocide” — Even in Wake of Pittsburgh Massacre -- Apparently fueled by anti-Semitism and the bogus narrative that outside forces are scheming to exterminate the white race, Robert Bowers murdered 11 Jewish congregants as they gathered inside their Pittsburgh synagogue, federal prosecutors allege. But despite long-running international efforts to debunk the idea of a “white genocide,” Facebook was still selling advertisers the ability to market to those with an interest in that myth just days after the bloodshed. Earlier this week, The Intercept was able to select “white genocide conspiracy theory” as a pre-defined “detailed targeting” criterion on the social network to promote two articles to an interest group that Facebook pegged at 168,000 users large and defined as “people who have expressed an interest or like pages related to White genocide conspiracy theory.” The paid promotion was approved by Facebook’s advertising wing. After we contacted the company for comment, Facebook promptly deleted the targeting category, apologized, and said it should have never existed in the first place. Our reporting technique was the same as one used by the investigative news outlet ProPublica to report, just over one year ago, that in addition to soccer dads and Ariana Grande fans, “the world’s largest social network enabled advertisers to direct their pitches to the news feeds of almost 2,300 people who expressed interest in the topics of ‘Jew hater,’ ‘How to burn jews,’ or, ‘History of “why jews ruin the world.”’” The report exposed how little Facebook was doing to vet marketers, who pay the company to leverage personal information and inclinations in order to gain users’ attention — and who provide the foundation for its entire business model. At the time, ProPublica noted that Facebook “said it would explore ways to fix the problem, such as limiting the number of categories available or scrutinizing them before they are displayed to buyers.” Rob Leathern, a Facebook product manager, assured the public, “We know we have more work to do, so we’re also building new guardrails in our product and review processes to prevent other issues like this from happening in the future.”
Not Too Big to Fail: Facebook’s Long Reign May Be Coming to an End - Facebook might seem too big to fail, but rest assured it is not. Unless it is protected by a government monopoly, every single product and service is vulnerable to market forces, even those considered too powerful. Just a few weeks ago, the once-mighty Sears announced its plans to file for bankruptcy and close 142 of its department store locations. It also wasn’t so long ago when Blockbuster Video, a staple of weekend fun in the 90s, announced its closure, as well. These institutions were at the top of their games at one point but were each unable to satisfy their customers as they once did. And both were inevitably replaced by better services like Amazon Prime and Netflix. Facebook might seem different from other traditional market entities since it technically doesn’t sell anything to the bulk of its users. But just like Sears and Blockbuster, its success relies on its ability to attract and maintain its customers. And in the wake of the recent purges—and its recent security breaches—it is quite possible that, like Myspace and Friendster, Facebook is not long for this world. When it was announced that Facebook, YouTube, iTunes, and eventually Twitter had banned the accounts associated with Alex Jones, it elicited mixed reactions from the public. On one hand, Alex Jones is infamously known for building his career on being an instigator and a “troll,” rendering him an unsympathetic character to most of the American public. On the other hand, the sweeping ban of Jones was concerning as it threatened the future of independent media. After all, if this could happen to Jones, who would be next?
Proposed data privacy law could send company execs to prison for 20 years - A US senator has proposed a privacy law that could issue steep fines to companies and send their top executives to prison for up to 20 years if they violate Americans' privacy. Sen. Ron Wyden, D-Ore. announced a discussion draft of his Consumer Data Protection Act yesterday. The bill would establish new privacy rules that major companies must follow and establish fines and prison sentences big enough to make even the largest companies take notice.Consumers would have the right to opt out of systems that share their data with third parties. Companies that don't follow the proposed law could be fined up to 4 percent of annual revenue on their first offense. The FTC currently is unable to fine first-time corporate offenders, and "fines for subsequent violations of the law are tiny, and not a credible deterrent," Wyden's bill summary says. Besides giving the FTC new powers, the bill would let the agency hire another 175 staffers "to police the largely unregulated market for private data," Wyden's bill summary says.Under the proposed law, executives could be "fined not more than $5,000,000 or 25 percent of the largest amount of annual compensation the person received during the previous 3-year period from the covered entity, prisoned not more than 20 years, or both," the bill says. (The more readable bill summary is available here.) The bill seems unlikely to pass, given the extreme penalties, lobbying clout of big businesses, and Republicans' control of Congress.
It Begins- Maxine Waters Vows To Examine Trump Ties To Deutsche Bank - Rep. Maxine Waters (D-CA) told Bloomberg Television on Wednesday that she will investigate President Trump's ties to Deutsche Bank if she is elected chair of the House Financial Services Committee. Of all the investigations I'm most interested in Rep Maxine Waters' statement that she'll investigate Deutsche Bank for laundering russian money. Deutsche Bank also the source for a lot of Trump's money pool despite high risk.— President Trump's relationship with Deutsche Bank has long been in Waters' crosshairs - as the 80-year-old Congresswoman has made repeated calls on the German financial institution to provide documents concerning any ties that Trump might have to Russia. As the ranking minority leader on the House Financial Services Committee she has thus far only been able to sabre-rattle, however she will now be able to subpoena records connected to a President whose impeachment she has repeatedly promised constituents since his election in 2016. Waters also told Bloomberg that she would also investigate changes made at the Consumer Financial Protection Bureau under the direction of acting director Mick Mulvaney, as well as Wells Fargo - which she has urged the Federal Reserve to come down hard on in the wake of several scandals. The CFPB has not faced much Congressional oversight since Mick Mulvaney, President Trump’s budget director and acting director of the CFPB, took over. Trump has nominated Kathy Kraninger, who worked under Mulvaney in the Office of Management and Budget, to be the next permanent director of the Bureau. If she is confirmed, which is likely since Republicans currently have a majority in the Senate and extended their gains in Tuesday’s election, any moves she and the Bureau make will likely come under increased scrutiny of Waters’ committee. -Chicago Sun Times
Trump threatens ‘warlike’ response if Democratic House investigates him --In their first nationwide verdict since Trump won the presidency in 2016, Americans offered a split decision, with Democrats claiming a majority in the House of Representatives – including record numbers of women and people of colour – while Republicans expanded control of the Senate.The result hands Democrats powers to block Trump’s legislative agenda – for example his wall on the Mexican border – and to seek his long-concealed tax returns, investigate possible conflicts of interest in his business empire and dig into any evidence of collusion between him and Russia in the 2016 election. They can demand documents and issue subpoenas if needed.At a combative, rambling and often wild press conference on Wednesday, Trump offered an olive branch for “a beautiful bipartisan-type situation” but also issued a warning. “Now we have a much easier path because the Democrats will come to us with a plan for infrastructure, a plan for health care, a plan for whatever they’re looking at, and we’ll negotiate,” he said. But if Democrats launch investigations against him, Trump warned, his attitude will be different. “If they do that, then it’s just – all it is is a warlike posture.”He added: “They can play that game, but we can play it better, because we have a thing called the United States Senate and a lot of questionable things were done between leaks of classified information and many other elements that should not have taken place. I could see it being extremely good for me politically because I think I’m better at that game than they are, actually, but we’ll find out.” Trump repeated his denial of collusion with Russia and insisted that he would not release his tax returns, claiming: “Look, as I’ve told you, they’re under audit. They’re extremely complex. People wouldn’t understand them.” Tuesday’s election outcome fell short of the repudiation of the president that millions in America, and around the world, had yearned for after two years of tumult, offensiveness and shattering of democratic norms. Trump’s bellicose campaign, widely condemned for appeals to overt racism, actually increased support for Republicans in some strongholds.
Two Can Play That Game - Trump Threatens War Posture If Dems Pursue Investigations - As Democrats prepare to take control of the House on Jan. 2, President Trump has a message for his political opponents who are feeling emboldened by their soon-to-be acquired subpoena power: If Dems try to use their subpoena power to launch Congressional investigations into his tax returns or Russia ties, the Trump Administration won't cooperate with them on matters of policy.During a raucous Wednesday press conference (the same press conference where he berated two CNN reporters), Trump again threatened Democrats with partisan gridlock if they try to probe him or his administration. Trump said that, since before he announced he would run, Democrats have been bombarding him with "investigation fatigue" - as he phrased it. He then threatened to adopt a "war posture" if Democrats try and come after his tax returns, or launch another investigation into his Russian ties. He then made clear that, if they pursue an investigation, Republicans in the Senate would launch an investigation of their own into leaks of classified information by Democrats, including former FBI Director James Comey."They can play that game but we can play it better," Trump promised.He also suggested that if Democrats want to work with the administration on policy priorities like infrastructure, they shwould drop any plans for further investigations. Otherwise, Trump said, they should expect two years of partisan gridlock. “They want to do things. I keep hearing about investigations - fatigue. From almost the time I announced I was going to run, they've been giving us this investigation fatigue. We have a thing called the United States Senate - and a lot of questionable things were done. Leaks of classified information. All you're going to do is end up with a back-and-forth-and-back-and-forth and all of a sudden two years will go by and you won't have done a thing." In a brief respite from his typically antagonistic tone toward Democrats, Trump reversed course minutes later and praised Democratic leader Nancy Pelosi over her calls for bipartisanship Tuesday night, adding that Pelosi "loves this country." He even sarcastically offered to push Republicans to vote for her as speaker if progressive Dems make good on their campaign threats not to vote for her. "We actually have a great relationship," Trump said of Pelosi. "I give her a great deal of credit for what she’s done and what she’s accomplished."
CNN journalist Jim Acosta banned from White House after Trump calls him ‘rude, terrible person’ - President Donald Trump's ongoing feud with Jim Acosta, CNN's chief White House correspondent, boiled over on Wednesday, with Trump verbally berating the journalist before the White House ultimately suspended his press access.Acosta tweeted Wednesday night that he was denied access when he tried to enter the White House. He added in another tweet that he didn't "blame" the U.S. Secret Service agent who stopped him."I know he's just doing his job," Acosta wrote.Press Secretary Sarah Sanders later issued a statement that said the reporter's "hard pass" was suspended as a result of his attempt to keep control of a microphone during Wednesday's news conference with the president.She said Acosta put "his hands on a young woman just trying to do her job as a White House intern" during the session, a claim that doesn't appear to be supported by video of the incident.The press secretary called Acosta's behavior "absolutely unacceptable.""It is also completely disrespectful to the reporter’s colleagues not to allow them an opportunity to ask a question," Sanders stated.In a statement posted on Twitter, CNN challenged Sanders' account and argued that the suspension of Acosta's credentials "was done in retaliation for his challenging questions at today's press conference.""Press Secretary Sarah Sanders lied," the cable news network said of the explanation. "This unprecedented decision is a threat to our democracy and the country deserves better. Jim Acosta has our full support."Speaking to CNN's Anderson Cooper on Wednesday night, Acosta said, "I never thought in this country that I wouldn’t be able to go cover the president of the United States simply because I was trying to ask a question."The White House Correspondents’ Association said in a statement late Wednesday that it "strongly objects to the Trump Administration’s decision to use U.S. Secret Service security credentials as a tool to punish a reporter with whom it has a difficult relationship."
Expert: Acosta video distributed by White House was doctored (AP) — A video distributed by the Trump administration to support its argument for banning CNN reporter Jim Acosta from the White House appears to have been doctored to make Acosta look more aggressive than he was during an exchange with a White House intern, an independent expert said Thursday. White House press secretary Sarah Sanders tweeted the video, which shows Acosta asking President Donald Trump a question on Wednesday as the intern tries to take his microphone away. But a frame-by-frame comparison with an Associated Press video of the same incident shows that the one tweeted by Sanders appears to have been altered to speed up Acosta’s arm movement as he touches the intern’s arm, according to Abba Shapiro, an independent video producer who examined the footage at AP’s request. Earlier, Shapiro noticed that frames in the tweeted video were frozen to slow down the action, allowing it to run the same length as the AP one. The tweeted video also does not have any audio, which Shapiro said would make it easier to alter. It’s also unlikely the differences could be explained by technical glitches or by video compression — a reduction in a video’s size to enable it to play more smoothly on some sites — because the slowing of the video and the acceleration that followed are “too precise to be an accident,” said Shapiro, who trains instructors to use video editing software.
Trump - What A Stupid Question That Is. You Ask A Lot Of Stupid Questions - During a Friday morning gaggle with White House reporters before Trump's trip to Paris, CNN's Abby Phillip asked the president if he was hoping Whitaker, who previously criticized Robert Mueller's special counsel investigation, would "rein in" the Russia probe. "Do you want [Whitaker] to rein in Robert Mueller?" Phillip asked. Trump's response left the stunned reported speechless. "What a stupid question that is," Trump said and, just in case it was lost, repeated "what a stupid question." "But I watch you a lot," Trump continued. "You ask a lot of stupid questions." Trump then demonstrably walked away, leaving the shocked reporters screaming more questions in his wake. President Trump: "What a stupid question that is." pic.twitter.com/W0xR292vfC — CSPAN (@cspan) November 9, 2018 Earlier, Trump said he has not spoken to acting AG Matt Whitaker about the Russia investigation, which Whitaker now oversees. Trump defended Whitaker as a "very well respected man in the law enforcement community" but claimed he does not know him personally. "I didn't speak to Matt Whitaker about it. I don't know Matt Whitaker," Trump told reporters at the White House before leaving for a trip to Paris. While Trump sought to place personal distance between himself and Whitaker, he made it clear he stood by his decision to place a loyalist in charge of the Justice Department, a move many see as an effort to seize control of special counsel Robert Mueller's probe. The president also rejected suggestions that Whitaker is ineligible to serve as attorney general, a position held by some legal experts who say the Justice Department leader must be confirmed by the Senate.
Politics- The Cancer That Must Be Eradicated Once And For All - In the United States two political parties have now divided the nation with the kind of violent partisan rhetoric that erupted just before the Civil War.. The 2016 election of Donald Trump as president set off a tidal wave of anger and resentment that has divided America into two bitterly opposed camps. Those on the left consider Trump to be the embodiment of evil whereas many on the right see him as a “disrupter” and champion of the common man. The recent mid-term elections revealed that this conflict between pro-Trump and anti-Trump forces continues unabated.The political divide in America now is characterized by revenge-minded Democrats who are determined to remove Trump from office and those who will fight to prevent this from happening. As a result, the country will be mired in a lengthy political power struggle while important issues affecting the lives of millions will be neglected. America – sad to say – is currently a nation in crisis.If a team of scientific crisis management experts were assembled to assess the cause of this problem they would surely arrive at the conclusion that it is “politics” pure and simple. The solution, therefore, would be the abolition of all political parties.. As the award-winning Canadian journalist Andrew Nikiforuk pointed out this past summer: “In the United States two political parties have now divided the nation with the kind of violent partisan rhetoric that erupted just before the Civil War. Across the Western world, political parties have turned parliaments into digital circuses, provoking waves of contempt among ordinary people...by actively preventing party members from speaking for truth or justice, modern political parties cultivate mendacity the way cell phones archive selfies. Party politics demand that politicians must, on a daily basis, lie to the party, lie to the public and lie to themselves.” This is a damning indictment of politics not just political parties. And it should be clear to any clear-thinking citizen that the time has come to abandon this morally bankrupt system that has mismanaged our affairs through influence peddling and legal bribery innocuously labeled “campaign contributions”.
Divided Congress = gridlock for financial services policy - The midterm elections Tuesday night upended the power dynamic in the nation's capital, with Democrats seizing control of the House. But the net result of that for financial institutions will likely be very little change in regulatory or legislative policy.With Republicans still controlling the Senate, regulators and banks are in for two years of even more divided government. Rather than tangible reforms, the biggest impact will be a change in rhetoric in the House, and perhaps mixed messaging from two chambers often in conflict.“Democratic oversight [in the House] will be, ‘Regulators are going too far in loosening oversight,’ ” said Brandon Barford, a policy analyst at Beacon Policy Advisors. He added that the upper chamber will urge the agencies to continue writing rules under the regulatory relief law passed last spring. “Republican oversight in the Senate is going to be, ‘You’re not moving fast enough to implement S 2155.’” If the GOP had held on to power in the House, the industry could have hoped for more momentum behind reg relief proposals. But with Republicans and Democrats sharing power, not much is expected to get done.Bloomberg NewsIf the GOP had held on to power in the House, the industry could have hoped for more momentum on the reg relief front. But the recent Senate law making targeted changes to the Dodd-Frank Act, which President Trump signed in May, may be the last major piece of financial services legislation for the foreseeable future.“I don’t think there’s going to be much legislation in a divided government situation,” said Aaron Klein, economic studies policy director at the Brookings Institution. “S 2155 represents the kind of high watermark of bank legislation under the Trump administration."Klein said the Trump administration, which could try to encourage the two chambers in the direction of bipartisan reform, has not shown much interest in smoothing over divisions.“What’s lacking in legislation is that there is no consensus builder in the White House," he said. "In order to have bipartisan legislation, which is the vast majority of banking bills, you need to have an environment that is conducive to substantive conversations that will identify areas of consensus … and satisfy diverse constituencies. President Trump has not shown that much of an ability to do that.” The new Democratic House majority means that Rep. Maxine Waters, D-Calif., who is an ardent opponent of Trump, will likely hold the gavel on the Financial Services Committee. Observers expect her to focus on oversight of the Trump administration’s regulators, conduct hearings with troubled financial institutions, and probe firms associated with Trump and members of his family.“With a divided Congress, we would expect a legislative logjam, a forceful oversight agenda in the House, a steady pace of confirmations in the Senate, and a slow lurch from deadline to deadline on Capitol Hill,” said Jaret Seiberg, an analyst at Cowen Washington Research Group, in a note Monday.
We Need an FDA For Algorithms: - UK mathematician Hannah Fry- Back in 2011 in London, we had these really bad riots in London. I’d been working on a project with the Metropolitan Police, trying mathematically to look at how these riots had spread and to use algorithms to ask how could the police have done better. I went to go and give a talk in Berlin about this paper we’d published about our work, and they completely tore me apart. They were asking questions like, “Hang on a second, you’re creating this algorithm that has the potential to be used to suppress peaceful demonstrations in the future. How can you morally justify the work that you’re doing?” I’m kind of ashamed to say that it just hadn’t occurred to me at that point in time. Ever since, I have really thought a lot about the point that they made. And started to notice around me that other researchers in the area weren’t necessarily treating the data that they were working with, and the algorithms that they were creating, with the ethical concern they really warranted. It used to be the case that you could just put any old colored liquid in a glass bottle and sell it as medicine and make an absolute fortune. And then not worry about whether or not it’s poisonous. We stopped that from happening because, well, for starters it’s kind of morally repugnant. But also, it harms people. We’re in that position right now with data and algorithms. You can harvest any data that you want, on anybody. You can infer any data that you like, and you can use it to manipulate them in any way that you choose. And you can roll out an algorithm that genuinely makes massive differences to people’s lives, both good and bad, without any checks and balances. To me that seems completely bonkers. So I think we need something like the FDA for algorithms. A regulatory body that can protect the intellectual property of algorithms, but at the same time ensure that the benefits to society outweigh the harms.
White House press secretary uses fake Infowars video --- Via VOX comes this noteworthy WH official attempt to propagandize: Press secretary Sarah Sanders shared an altered video (italics mine) on Wednesday evening that appears to have originated with far-right conspiracy site Infowars to justify banning CNN reporter Jim Acosta from the White House after a tense exchange with President Donald Trump.…When Trump insulted Acosta at the press conference, a White House intern approached him and tried to physically remove a microphone from his hands. Their arms touched as the woman reached across Acosta’s body to grab the microphone he was holding in his hand. Looking back at the video, it does not in fact show Acosta “placing his hands” on the woman. But about 90 minutes after she posted her string of tweets, Infowars editor Paul Joseph Watson tweeted out a video of the incident that was doctored to make it look like Acosta chopped the woman’s arm with his hand.
Trump Administration Spares Corporate Wrongdoers Billions in Penalties NYT -- In the final months of the Obama administration, Walmart was under pressure from federal officials to pay nearly $1 billion and accept a guilty plea to resolve a foreign bribery investigation.Barclays faced demands that it pay nearly $7 billion to settle civil claims that it had sold toxic mortgage investments that helped fuel the 2008 financial crisis, and the Royal Bank of Scotland was ensnared in a criminal investigation over its role in the crisis.The three corporate giants complained that the Obama administration was being unreasonable and stood their ground, according to people briefed on the investigations. After President Trump took office, they looked to his administration for a more sympathetic ear — and got one. Federal prosecutors and the Securities and Exchange Commission have yet to charge Walmart, and the Justice Department reached a much lower settlement agreement with Barclays in March, for $2 billion. R.B.S. paid a civil penalty, but escaped criminal charges altogether.Across the corporate landscape, the Trump administration has presided over a sharp decline in financial penalties against banks and big companies accused of malfeasance, according to analyses of government data and interviews with more than 60 former and current federal officials. The approach mirrors the administration’s aggressive deregulatory agenda throughout the federal government.The New York Times and outside experts tallied enforcement activity at the S.E.C. and the Justice Department, the two most powerful agencies policing the corporate and financial sectors. Comparing cases filed during the first 20 months of the Trump presidency with the final 20 months of the Obama administration, the review found:
- • A 62 percent drop in penalties imposed and illicit profits ordered returned by the S.E.C., to $1.9 billion under the Trump administration from $5 billion under the Obama administration;
- • A 72 percent decline in corporate penalties from the Justice Department’s criminal prosecutions, to $3.93 billion from $14.15 billion, and a similar percent drop in civil penalties against financial institutions, to $7.4 billion;
- • A lighter touch toward the banking industry, with the S.E.C. ordering banks to pay $1.7 billion during the Obama period, nearly four times as much as in the Trump era, and Mr. Trump’s Justice Department bringing 17 such cases, compared with 71.
As Handful of Billionaire Families Grab Nation's Wealth for Themselves, New Report Details How Dynasties Rig US Economy - Here are just a few startling facts that tell you nearly all you need to know about who the American economy has worked for—and against—over the past several decades: Amazon CEO Jeff Bezos, Microsoft founder Bill Gates, and financier Warren Buffett own more wealth than the bottom 50 percent of the U.S. combined; As median household wealth has declined since 1982, the Walton, Koch, and Mars families have seen their wealth grow 6,000 percent; A full-time Amazon employee making $15 an hour would have to work for 2.5 million years to earn $78.5 billion, the amount Bezos's fortune has expanded in the past year alone. Published by the Institute for Policy Studies (IPS) on Tuesday in a new report—titled "Billionaire Bonanza 2018: The Role of Dynastic Wealth" (pdf)—these numbers paint a striking portrait of an economy designed to enrich a handful of individuals and family dynasties while leaving the rest of the American population with stagnant or falling wages, meager or even negative wealth, and soaring economic insecurity. "Today's extreme wealth inequality is perhaps greater than any time in American history," Josh Hoxie, a co-author of the report, said in a statement. "This is largely the result of rapidly growing wealth dynasties and a rigged economy that enables the ultra-wealthy to grow their wealth to never-before-seen highs." "These families have used their wealth and power to lobby and rig the rules to expand their wealth and power." The United States is operating under a system of "patrimonial capitalism" that allows the wealthy few to hoard their riches and pass them on to their heirs—fueling the rapid explosion of inequality since the 1970s—IPS found that "seven of the 20 wealthiest members of the Forbes 400 inherited their wealth from previous generations, often through companies founded by their ancestors." These members, the report notes, include "Charles and David Koch of Koch Industries as well as Jim, Alice, and S. Robson Walton of Walmart and Jacqueline and John Mars of the Mars candy empire." According to IPS, these three "wealth dynasties" own a combined $348.7 billion—over four million times the median wealth of American families. When IPS looked at the 15 wealthiest American families with multiple members on the vaunted Forbes 400 list, it found that the wealth of each of these families "comes from companies started by an earlier generation, either a parent or more distant ancestor. Each of them also represents a wealth dynasty passing generation to generation free from interruption."
Judge suspends compliance deadline for CFPB payday rule - A federal court has delayed the effective date of the Consumer Financial Protection Bureau’s payday lending rule, after the agency said it would propose changes to the regulation as early as January. U.S. District Judge Lee Yeakel on Tuesday reversed a previous order from June and granted, in part, the request by acting CFPB Director Mick Mulvaney and two industry trade groups to delay the payday rule’s August 2019 compliance date. They sought a delay to prevent lenders from having to comply with the old rule before the revisions are finalized. "The court concludes that to prevent irreparable injury a stay of the Rule's current compliance date of August 19, 2019, is appropriate," Yeakel, a judge in the U.S. Disrict Court in the Western District of Texas, wrote in a four-page order. However, the judge denied a request to further stay the compliance date until after the lawsuit filed by the two trade groups is resolved. Community Financial Services Association of America and Consumer Service Alliance of Texas had sued the bureau to invalidate the original payday rule, which was drafted under former CFPB Director Richard Cordray. Mulvaney sided with the two plaintiffs in the case. Under the new order, the two trade groups must continue to report to the court, which will revisit the stay depending on how the CFPB acts. The CFPB informed the court on Oct. 26 that it planned to issue a notice of proposed rulemaking in January to reconsider the payday rule and address the 2019 compliance date. The trade groups applauded Yeakel's latest ruling. Payday lenders have lobbied heavily to kill the payday rule, which would represent the first federal regulations of payday lenders. Lenders claim the existing rule failed to demonstrate consumer harm, ignored the input of payday customers, and would put more than 70% of payday lenders out of business.
Crapo, Senate Banking GOP probe FDIC on Operation Choke Point — The Republicans on the Senate Banking Committee are calling on the Federal Deposit Insurance Corp. to ensure that legal businesses have access to financial services, after senior agency officials were revealed to have previously verbally directed staff to discourage banks from doing business with certain industries. In a letter to FDIC Chairman Jelena McWilliams, the Republican senators, led by Senate Banking Committee Chairman Mike Crapo, R-Idaho, said that the issue reinforced the challenges of ending an Obama-era Justice Department policy, known as Operation Choke Point, which investigated banks that did business with firms that were disfavored by the administration but were legal, including firearms firms, pawn shops and payday lenders. “Operation Choke Point, and its associated culture and Choke Point-like regulatory actions, must end once and for all,” the senators wrote. “This abuse of government power is antithetical to the best interests of the banking industry, the U.S. economy, and the consumers who rely on banking products and services.” The senators added that “it is not appropriate for the staff at the FDIC to communicate policy through verbal ‘recommendations.’” They are asking McWilliams if it is the official position of the FDIC that lawful businesses should not be targeted by the agency for operating in industries that the Obama administration disfavored. The letter also wants to know what the regulator is doing to make sure that bank examiners are aware of the policy. Additionally, the senators asked if there were communications explaining supervisory expectations of “elevated risk” or “high risk” merchants with regulated banks that would qualify as a “rule” under the Congressional Review Act, but were not properly submitted to Congress. And they said they are concerned that the FDIC's actions are inconsistent with its communications of policies to regulated institutions, and asked McWilliams what the regulator is doing to address that issue.
Proposed eleventh-hour change to CECL has bankers scrambling - Bankers prepping for a new accounting standard for loan losses have been thrown a curveball. The Financial Accounting Standards Board has signaled support for an amendment that would require financial institutions to break charge-offs and recoveries out by vintage year. The late-hour change to the standard for Current Expected Credit Losses, or CECL, received enthusiastic backing from investors and analysts because it will provide more insight into credit trends. The response from bankers has been more subdued. Banks tend to report charge-offs and recoveries in aggregate terms, so accounting for them on a year-by-year basis could require new systems, Daniel Palomaki, a managing director for accounting policy and controller of the Institutional Clients Group at Citigroup, said at a Nov. 1 meeting of a group FASB formed to discuss CECL implementation. The effort — and expense — would be significant, even for a bank with Citi’s resources. “From our perspective, it’s a surprise,” Palomaki said of the proposed amendment. “We weren’t planning on making the disclosure, so we’ll have to begin to manually pull together this information and build a systemic process. It’ll be difficult to fold this into the parallel runs we do.” The change also upset credit union executives. “This will add operational complexity to an already complex standard,” said Doug Wright, chief financial officer at the $3.5 billion-asset Mission Federal Credit Union in San Diego. In another indication of the issue’s potential impact, FASB’s board instructed staff to detach the amendment from a list of other, less impactful CECL changes and detail it in a special exposure draft. A second exposure draft, outlining the rest of the changes, is slated to be released the week of Nov. 19. While no specific date was set for the special exposure draft’s release, FASB is targeting a release toward the end of the year, spokeswoman Christine Klimek said.
Banking groups to regulators: Codify policy on supervisory guidance — The American Bankers Association and Bank Policy Institute are urging financial regulators to formalize their recent policy on the use of supervisory guidance The Federal Reserve Board, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, Consumer Financial Protection Bureau and the National Credit Union Administration issued a joint statement in September to clarify the role of guidance. “Unlike a law or regulation, supervisory guidance does not have the force and effect of law, and the agencies do not take enforcement actions based on supervisory guidance,” the statement said. In a letter to the agencies this week, the two banking industry groups applauded the statement, but asked the regulators to take it a step further with a binding regulation to codify that policy and “ensure it endures over time and is followed consistently across the country." If the interagency statement is not codified, they argued, it could be viewed by current or future agency staff as nonbinding, and could leave room for examiners to continue to form examination criticism on matters not based in the law. “A formal rulemaking would be an explicit recognition by the agencies that current and future examiners will be bound by this statement which will provide greater clarity to the examination process,” the ABA and BPI said in a press release. “This is key, as in recent years, failure to comply with guidance has too often resulted in the issuance of Matters Requiring Attention (MRA) based on neither law nor regulation.” An MRA is recognized as a “quasi-enforcement action,” and the agencies have often stated that a bank cannot expand through acquisition, investment or branching until all MRAs have been resolved. “The interagency statement includes unclear language regarding how guidance could be used beyond raising issues of supervisory concern with an institution (such as MRAs), straying into explicit enforcement action unsupported by law,” the ABA and BPI said.
Fed to delay new big-bank capital measure until 2020: Quarles — The Federal Reserve’s top regulator said Friday that the agency is not planning to finalize a new capital measure used in stress tests in time for next year's round of capital assessments for the biggest banks. Speaking at the Brookings Institution Friday morning, Fed Vice Chairman for Supervision Randal Quarles said the so-called Stress Capital Buffer — or SCB — will probably be in place for the 2020 stress tests “at the earliest.” The capital buffer is designed to make the capital rules less complicated by replacing the various minimum capital ratios now used with fewer standards that better reflect a bank’s actual risk of losses. Quarles said the agency has received “extensive and thoughtful” comments in response to its proposal and that those comments will likely result in some additional refinements in the final rule. He said the Fed will likely finalize the basic framework first and then propose additional aspects in a future rule. “While I don’t believe these issues will prevent us from ultimately implementing the SCB, they have flagged certain elements of the regime that could benefit from further refinement,” Quarles said. “I expect we will adopt a final rule in the near future that will settle the basic framework of the SCB, but re-propose certain elements.” The stress capital buffer is an idea that was first articulated by former Fed Gov. Daniel Tarullo in the months before he resigned from the board. The SCB would be a component of a bank’s minimum capital requirement that reflects model losses from the prior year’s stress test. That way, a bank with fewer losses would be required to comply with lower minimum capital requirements than a bank that suffered higher losses. The effect of a more protracted timeline for the SCB is that, rather than being in place in time for the 2019 stress testing cycle, it will likely not be fully in place until 2020, though some aspects of the proposal may be implemented in time for next year’s cycle. “To enable this process to run its course, I expect that the first SCB would not go into effect before 2020,” Quarles said. “For 2019, I expect CCAR will remain in place for firms with over $250 billion in assets or that are otherwise complex; however, we will consider whether we can move forward with any aspects of the SCB proposal for CCAR 2019, such as assumptions related to balance sheet growth.” Quarles also said that the Fed is looking to reduce the degree to which the stress test — and the changes in the stress scenarios from year to year — dictate a bank’s annual capital planning.
OCC’s lax oversight compounded costs of thrift failure, IG says - Supervisory lapses at the Office of the Comptroller of the Currency made a failed Chicago thrift’s hit to the Deposit Insurance Fund costlier than it should have been, according to a report by an internal government watchdog agency. Regulators shuttered Washington Federal Bank for Savings on Dec. 15, and the resolution is now expected to cost the DIF about $82.6 million. While the failure resulted from loan fraud by Washington Federal employees, including John Gembara, the bank's chairman, president and CEO, the Treasury Department’s Office of the Inspector General determined in a material-loss review that had examiners acted in a timelier manner, the fraud “may have been uncovered sooner and the loss to the DIF and individual account holders may have been reduced.” The fraud depleted capital and led to the thrift’s insolvency, according to the Nov. 6 report. While there has been no criminal or civil judicial finding of fraud, the Treasury IG is still investigating the failure, the report said. The report highlighted several weaknesses in the OCC’s exam process for Washington Federal. First, the OCC’s supervisors did not provide enough oversight of inexperienced examination staff, according to the report. Because Washington Federal was considered a noncomplex bank with a low risk profile, it was viewed as a “good place” to assign pre-commissioned examiners with limited exam experience, the report said. Five of the 11 examiners had one to three years of experience when they were assigned to the bank; some referred to Washington Federal as a “training” or “practice bank,” the report said. Examiners missed red flags tied to the bank’s loan portfolio and, as a result, did not expand the core assessment minimum procedures quickly enough. Examiners also failed to identify and report unsafe or unsound practices that were contrary to the agency’s guidance and bank policy tied to appraisals, the report said. Between 2011 and 2016, examiners did not review any of the external auditor’s work papers during their exams, the report said.
What Wells Fargo’s $40.6 Billion in Stock Buybacks Could Have Meant for Its Employees and Customers -The 2016 corruption scandal at Wells Fargo, in which executives pressured employees to meet “wildly unrealistic sales targets,” created a work environment described as “relentless pressure.” Once revealed, the massive fraud committed against millions of consumers led to congressional hearings, substantial fines by state and federal regulators, and a series of announced changes by Wells in which they committed to “building a better bank.”You might think that this renewed commitment by Wells Fargo would start with targeted attention to its workforce. Instead, Wells Fargo has announced that it is laying off workers, while lining the pockets of share traders.Wells Fargo has authorized $40.6 billion in stock buybacks since Trump’s tax bill was passed, with two new authorizations of 350 million shares in January and October 2018. What about actual spending? In the first nine months of the year, Wells spent $8.2 billion on repurchasing their own stock (in the first quarter of 2018, they spent $3 billion; in the second quarter they spent $2 billion; in the third quarter, Wells spent $3.2 billion on actual share repurchases). These are all funds that could have been invested in the workforce, rather than enriching top executives and shareholders who know when to sell.Stock buybacks, also known as open-market share repurchases, occur when companies purchase back their own stock from shareholders on the open market. When a share of stock is bought back, the company reabsorbs that portion of its ownership that was previously distributed among other investors. This reduces the number of outstanding shares in the market, resulting in an increase in the price per share. The purpose of stock buybacks is to reward shareholders—which often include executives themselves—by raising the price of shares. Wells Fargo plans to continue this practice. At an investor presentation in 2017, Wells Fargo CEO Tim Sloan made clear his expectations that the company’s buybacks program would continue in the coming years: “Is it our goal to increase return to our shareholders and do we have an excess amount of capital? The answer to both is, yes,” Sloan said. “So our expectation should be that we will continue to increase our dividend and our share buybacks next year and the year after that and the year after that.”
DOJ Investigates 'Mystery' Goldman Executive Involved In $4.5 Billion 1MDB Fraud - Last week, the DOJ filed the first round of criminal charges related to the massive international fraud that was the 1MDB scandal. US prosecutors allege that more than $4.5 billion was embezzled from the sovereign wealth fund, which was set up by the government of disgraced former Prime Minister Najib Razak, eventually leading the ransacked government fund to a default on nearly $2 billion of local currency bonds, briefly denting the value of the Malaysian ringgit. Holders of those bonds are still working on a restructuring deal with the fund. Meanwhile, former Goldman Sachs Southeast Asia Chief Tim Leissner has pleaded guilty to fraud charges and is expected to cooperate with authorities against other more-senior officials at the bank. One of his fellow bankers, Roger Ng, was arrested by Malaysian police and is expected to be extradited to the US.There's little doubt that the scandal, which Goldman has, in typical Goldman fashion, tried to pin on a "few rogue employees," will lead to massive fines and possibly other penalties. The bank admitted as much in a regulatory filing on Friday, even suggesting that "other sanctions" - code for a guilty plea for the bank or even more severe penalties levied by the Treasury - could be forthcoming, per Reuters.Leissner has already admitted that he accepted more than $200 million in stolen funds in an illegal kickback tied to the deal, as well as bribery charges related to his pursuit of the 1MDB deals. And as more details trickle out, the blithe disregard for US securities laws - and even the bank's own compliance department - attributed to Leissner and his team is looking even more galling. All of this is happening at a terrible time for Goldman. It recently underwent a leadership transition, with longtime former CEO Lloyd Blankfein handing the reins to John Solomon, who is best known for moonlighting as an EDM DJ. Blankfein's former second-in-command, Gary Cohn, left the bank nearly two years ago to join the Trump Administration. And as the breadth of the scandal - and the likelihood that the bank's most senior employees may have looked the other way (though, to be sure, Blankfein has repeatedly denied having any knowledge of Goldman's role) - becomes increasingly apparent, the timing of Blankfein's exit is looking more and more suspect.
Lloyd Blankfein Was the Unidentified Goldman Executive Present at 2009 1MDB Meeting - Years before Goldman Sachs Group Inc. arranged bond deals now at the heart of globe-spanning corruption probes, the firm’s then-CEO Lloyd Blankfein personally helped forge ties with Malaysia and its new sovereign wealth fund, according to people with knowledge of the matter.Blankfein was the unidentified high-ranking Goldman Sachs executive referenced in U.S. court documents who attended a 2009 meeting with the former Malaysian prime minister, the people said. The meeting was arranged with the help of men who are now tied to the subsequent plundering of the 1MDB fund, according to U.S. court documents unsealed last week.The meeting at the Four Seasons hotel in New York was set up and attended by two key figures in the 1MDB scandal, Malaysian businessman Jho Low and former Goldman partner Tim Leissner, one person with direct knowledge of the matter said, asking not to be identified as the information isn’t public. The high-level gathering laid the groundwork for a relationship that would prove profitable for the investment bank. Since then, the use of $6.5 billion that Goldman raised for 1MDB has sparked investigations across several nations, and entangled the U.S. bank in a high-profile corruption probe.
Goldman Sachs chipping away at $1.8B mortgage settlement target -- Goldman Sachs is getting closer to hitting its $1.8 billion consumer relief obligation. The bank, working to fulfill mortgage settlement agreements between the U.S. Department of Justice and three states, forgave a total of $78.7 million in principal on 746 first-lien mortgages since its last update on Aug. 1, for average principal forgiveness of $105,467 per loan and total reportable credit of $79.3 million after appropriate crediting calculations and multipliers were applied. This brings the total credit claimed since Goldman resolved allegations related to marketing, structuring, arrangement, underwriting, issuance and sale of residential mortgage-backed securities to $1.2 billion, or 67% of its target. The bank has now modified 10,671 mortgages in the two and a half years since the settlement was reached. "I am pleased to be able to confirm that Goldman Sachs continues to make steady progress toward meeting its obligation to provide consumer relief valued at $1.8 billion," wrote Eric Green, a professional mediator and retired Boston University law professor, who has overseen other large bank settlements like that of Morgan Stanley, in a report. The modified mortgages span 42 states and the District of Columbia, with 32% of the credit located in the settling states — New York, Illinois and California — and 47% located in areas defined by the U.S. Department of Housing and Urban Development as being "hardest hit," referring to regions with large concentrations of distressed homes and foreclosure activities, according to the report. Goldman's consumer relief obligation is only a piece of the more than $5 billion settlement the bank agreed to in April 2016, which includes a large civil money penalty. The bank also agreed to a "statement of facts," which involves acknowledgements that it "received information indicating that, for certain loan pools, significant percentages of the loans reviewed specifically did not conform to the representations made to investors about the pools of loans to be securitized."
UBS Sued by U.S. for Fraud Tied to Mortgage-Backed Securities -- UBS Group sold tens of billions of dollars worth of residential mortgage-backed securities by “knowingly and repeatedly” making false and fraudulent statements to investors about the loans backing those trusts, the U.S. Justice Department said in a civil suit filed Thursday.
- The suit relates to 40 of those RMBS securities which UBS “sponsored, issued, underwrote, managed or offered,” according to federal prosecutors in Brooklyn, New York.
- UBS got ahead of the suit Wednesday, releasing a statement that it expected to be sued and will fight the case. “The DOJ’s claims are not supported by the facts or the law,” UBS said.
- According to the U.S., UBS securitized more than $41 billion worth of mortgage loans in the deals which proved to be "catastrophic failures," according to the complaint.
- It’s unusual for a big bank to fight a case by the Justice Department in court rather than negotiating a settlement, but it’s a gamble that paid off for Barclays Plc. In 2016, the British bank broke off settlement talks -- also over RMBS sales -- with the Justice Department, which was seeking a $5 billion fine. Federal prosecutors in Brooklyn sued, and the bank wound up settling in March for $2 billion, the amount it had told the DOJ originally it wouldn’t go beyond.
Wells Fargo says error cost more people their homes than first thought - Wells Fargo said Tuesday that an internal error that affected customers requesting mortgage modifications to remain in their homes impacted hundreds more people than the bank initially thought. In a new disclosure, San Francisco-based Wells said an expanded review found that approximately 870 customers who were going through foreclosure were incorrectly denied or not offered loan modifications or repayment plans that would have made their mortgages more affordable. As a result, about 545 of those customers lost their homes, Wells said in a securities filing. A spokesman for the bank, which has a large presence in Charlotte, said the company apologizes for the mistake. "We are sorry that these errors occurred," Tom Goyda said. He also said that Wells is assigning a single, dedicated point of contact to each affected customer as the bank assists them. The new revelations come after Wells in August disclosed that a calculation error involving a mortgage underwriting tool caused 625 customers to be incorrectly denied or not offered loan modifications. In about 400 of those cases, the homes were ultimately foreclosed on, the bank said. Affected customers were in the foreclosure process between April 2010 and October 2015, when the problem was corrected, the bank said at the time. On Tuesday, Wells said its expanded reviewed covered homes in the foreclosure process from March 15, 2010, to this past April 30 when new controls were implemented. Wells said it has contacted a substantial majority of the roughly 870 affected customers to provide remediation as well as the option of no-cost mediation with an independent mediator. Attempts to contact the remaining affected customers are ongoing, Wells said. In August, the bank said it had set aside $8 million for customer remediation, for an average of $12,800 per customer. Goyda said Tuesday that the bank has not updated the figure.
What Democrats’ House takeover means for mortgage companies— The recent stretch of the White House and both chambers of Congress exclusively being in the corner of alleviating post-crisis rules is over.The Democrats’ takeover of the House Tuesday will bring a sea change in the chamber’s rhetoric toward financial services issues. What has been a focus on easing rules, tax cuts and expanding access to credit will likely be replaced by more attention on the industry’s mistakes and efforts to protect consumers. Even if Democrats will be hamstrung in their ability to tighten rules for financial institutions, the new House leadership will likely be able to block any further deregulatory initiatives, and intensify criticism in oversight hearings of both the big banks and federal agencies attempting to draft administrative reforms. With the Democrats picking up enough seats to cement control of the House, Rep. Maxine Waters, D-Calif. — a vocal Trump administration critic — is the probable next chair of the House Financial Services Committee starting in January. Her ability to pass legislation in areas where she has taken a policy interest — such as curbs on the big banks, consumer protection and affordable housing — will be stifled with the two parties once again dividing power in Washington. The Senate remained in GOP control Tuesday night. But some observers cautioned that Waters’ subpoena power and ability to apply pressure on the regulators should not be dismissed.One area in which Democratic leaders on the panel could assert influence is the banking agencies’ pending efforts to modernize the Community Reinvestment Act.“There will be significant oversight hearings of financial regulators’ activity, particularly changes to the Community Reinvestment Act,” said Aaron Klein, economic studies policy director at the Brookings Institution.Leading up to the election, Waters made comments suggesting she will bring a tough approach to leadership of the committee. A recent survey by Promontory Interfinancial Network suggests bankers are worried. When asked to rank their concern about a Democratic takeover on a 1-5 scale (with 1 indicating the least concern), 41% responded with a 5 rating. Waters vowed to be a voice for homeowners and other consumers that were harmed during the financial crisis. “I have not forgotten you foreclosed on our houses. I have not forgotten that you undermined our communities. I have not forgotten that you sold us those exotic products, had us sign on the line for junk and for mess that we could not afford,” she said. “And for doing that, I have people who are homeless who have never gotten back into a home. What am I going to do to you? What I’m going to do to you is fair. I’m going to do to you what you did to us.”
Mortgage Bonds Suffer Worst Month In 2 Years As 'Marginal Buyer' Fed Pulls Out -- Mortgage bond investors are about to become reacquainted with 'moral hazard' and its inevitable consequences. As the Federal Reserve continues to pull out of US Treasurys and mortgage bonds (the Fed entered its "peak" monthly unwind phase in Q4, where it will allow up to $30 billion and $20 billion in MBS to roll off and on Oct. 31 its balance sheet declined by more than $33 billion, the largest one-week drop since the start of QE), holders of housing bonds who had grown accustomed to steady returns in a rigged market endured their biggest shellacking in 2 years, as Bloomberg pointed out in a story published Friday.And while at least one prominent bond investor pointed out that Bloomberg's warnings about a "bloodbath" in MBS may have been exaggerated...Ridiculous BBerg News story today on the (non-existent) “bloodbath” in the mortgage-bond market in Oct. MBS Index Return: -.6%. LQD: -2.1%.— Jeffrey Gundlach (@TruthGundlach) November 2, 2018 ...the story's central premise that the retreat of the bond market's 'marginal buyer' is creating headaches for complacent bond bulls is certainly valid, as we've said before. It only takes a quick glance at the 10-year-yield vs. the Fed's balance sheet expansion/unwind to spot the dangers that could lie ahead. Now, as the Fed-generated tidal wave of liquidity slows to a trickle and the central bank looks to unwind some $1.7 trillion in MBS holdings, "savvy" bond bulls are stuck asking themselves: who the hell is going to step in and stop the bleeding once liquidity dries up further and mortgage bonds continue to fall?The answer isn't immediately clear.
Mortgage-Bond Carnage Shows What Future Holds Without Fed Help The bloodbath last month in the mortgage-bond market points to what the future may be like without Federal Reserve hand holding. Investors are now wondering if anyone will step in to stop the bleeding.Returns on mortgage-backed securities in October lagged Treasuries by 37 basis points, the most since November 2016, when rates surged in the aftermath of President Donald Trump’s surprise election. Last month’s weakness coincided with the Fed ending its mortgage purchases as it winds down the $1.7 trillion MBS portfolio it amassed since the financial crisis to support the market.“When the Fed announced they were going to buy mortgages, we tightened a lot and rolls performed really well — now the reverse is happening,” said Kevin Jackson, a managing director on Wells Fargo’s mortgage trading desk. “One should expect widening.” In a situation rarely seen over the last four decades, there isn’t going to be a government entity — which before the financial crisis included Fannie Mae and Freddie Mac — at hand to provide liquidity for mortgage-backed securities. This, combined with the Fed increasing rates, is likely to continue to push spreads wider and rates for home buyers higher.Some investors hope that banks or money managers will fill that role, but both face challenges that may prevent them from taking on that task, according to Ankur Mehta, the head of MBS research at Citigroup Inc. “It is not obvious to us where that incremental demand for mortgages comes from,” Mehta said, noting domestic banks already earn an attractive return on reserves, while “money managers are facing headwinds due to outflows and their existing MBS overweights.”The carnage in October also came about due to the fact “mortgages were still looking rich” compared to pre-crisis spreads when the Fed didn’t own any MBS, according to Mehta.
Consumer housing outlook drops despite economic optimism- Fannie - The prospect of growing mortgage rates took a negative hit on consumer perception of home buying and selling during October, according to Fannie Mae. The Fannie Mae Home Purchase Sentiment Index rose year-over-year, going to 85.7 from 85.2. However, it hit the lowest point since last October and fell 2 points from September's 87.7, following the general descending trend it's tracked since hitting a record high 92.3 in May. The net percentage of consumers who believe mortgage rates will increase in the next 12 months jumped to 57% from 46% year-over-year, also inching up from 56% the month prior. "After hitting a survey high during the spring home buying season, the HPSI has trended downward, declining in October to its lowest level in a year. While the October drop was broad-based — all but one of the six HPSI components declined — the net share of consumers who said it's a good time to buy a home posted the largest decrease, tying its second lowest reading in the survey's history," Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a press release. Conversely, 59% of respondents said the economy is on the right track, a rise from the 48% in October 2017 and up from 55% month-over-month. The only survey component not to fall from the month before was sentiment around household income. It remained at 19 points from September and gained five points from a year ago. "The further erosion of buying sentiment occurred despite generally positive views of the economy. Meanwhile, the share of consumers who think the economy is on the right track continued to grow, reaching a new survey high," Duncan said. "The contrast between the survey's findings of weak home buying sentiment and overall economic optimism mirrors what we're seeing in the broader economy. While economic growth posted the fastest back-to-back pace in four years in the third quarter, residential investment declined for the third consecutive quarter, a first for the current expansion."
Black Knight Mortgage Monitor: Foreclosure Inventory Falls to Pre-Recession Average Black Knight released their Mortgage Monitor report for September today. According to Black Knight, 3.97% of mortgages were delinquent in September, down from 4.40% in September 2017. Black Knight also reported that 0.52% of mortgages were in the foreclosure process, down from 0.70% a year ago. This gives a total of 4.49% delinquent or in foreclosure. Press Release: Black Knight: Interest Rate Increases Cut Refinanceable Population by More than Half in 2018; Housing in 10 States Now Less Affordable than Long-Term Benchmarks This month’s report looks at the continued impact of rising interest rates on both the refinanceable population – homeowners with mortgages who could likely qualify for and see at least a 0.75 percent rate reduction from a refinance – and home affordability. As Ben Graboske, executive vice president of Black Knight’s Data & Analytics division explained, over the last two years, millions of homeowners lost an interest rate incentive to refinance.“Due to rising rates, some 6.5 million homeowners that previously could have benefited from refinancing their mortgages have missed that opportunity,” said Graboske. “On average, these homeowners had a 22-month window to refinance. …"This month’s data also showed that the national inventory of loans in active foreclosure has fallen to pre-recession averages for the first time since the financial crisis. The improvement is actually even more impressive than it may seem. Taking into account today’s foreclosure rate and the fact that there are 16 percent more active mortgages today than the 2000-2005 average, relatively speaking, foreclosure inventory is actually 40,800 below pre-recession "norms.” At the current rate of reduction (a six-month average annual decline of 27 percent) active foreclosure inventory would hit a record low in September 2019, with fewer than 200,000 cases nationwide. Here is a graph from the Mortgage Monitor showing active foreclosure inventory.
Foreclosure starts fall to lowest point in almost 18 years -- Excellent credit quality and strong performance of post-housing-crisis originations resulted in a steep decline in foreclosure starts in September, according to Black Knight. September's 40,000 foreclosure starts fell year-over-year by 5,200 or 11.5% and month-over-month by 7,100 or 15.1%. The continued recovery and lessons-learned from the recession drove the amount of starts to a nearly 18-year low. "This month's data also showed that the national inventory of loans in active foreclosure has fallen to pre-recession averages for the first time since the financial crisis. The improvement is actually even more impressive than it may seem," Ben Graboske, executive vice president of Black Knight's Data & Analytics division, said in a press release. "At the current rate of reduction (a six-month average annual decline of 27%) active foreclosure inventory would hit a record low in September 2019, with fewer than 200,000 cases nationwide." On the other hand, mortgage delinquencies had its largest month-to-month spike in almost 10 years, rising 13.22%. The jump was anticipated due to September's typical rise and a quirk in the calendar. Since 2000, Septembers have the highest monthly change in delinquency, with an average increase of 5.2%. However, when Septembers end on a Sunday — a day servicers are unable to process last-minute payments on the final two calendar days of the month — the delinquency rate spikes an average of 13.2%, about the same change as this year. All 50 states saw mortgage delinquency increases in September. North Dakota led the way with a 24% jump, followed by increases of 23% for North Carolina and 22% for South Carolina, the result of Hurricane Florence.
MBA: Mortgage Delinquency Rate Increased Slightly in Q3 -- From the MBA: Mortgage Delinquencies Up Slightly in Third Quarter of 2018The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 4.47 percent of all loans outstanding at the end of the third quarter of 2018, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.The delinquency rate was up 11 basis points from the previous quarter, but down 41 basis points from one year ago. The percentage of loans on which foreclosure actions were started dropped one basis point from the last quarter to 0.23 percent – its lowest level since the fourth quarter of 1985. “Despite the small uptick this quarter, the healthy economy is overall supporting low mortgage delinquencies and foreclosure inventories,” . “Unemployment is at its lowest level since 1969, wages have grown 3.1 percent year-over-year – the biggest jump in almost a decade – and job growth is averaging over 212,000 jobs per month thus far.” Walsh notes that natural disasters are a major factor in determining whether borrowers make timely mortgage payments. Specifically, there were significant delinquency increases in states adversely impacted by Hurricane Florence and Tropical Storm Gordon, including North Carolina, South Carolina, Mississippi, Arkansas and Alabama. Hurricane Michael, which made landfall after the survey reporting period, will not be reflected until MBA’s fourth quarter survey. Walsh believes it will likely take several quarters for the most recent storms’ effects on the survey results to dissipate. In relation to the second quarter of 2018, the 30-day delinquency rate increased 20 basis points to 2.51 percent, the 60-day delinquency rate increased 2 basis points to 0.77 percent, and the 90-day delinquency bucket dropped 11 basis points to 1.18 percent. The percentage of loans in the foreclosure process at the end of the third quarter was 0.99 percent, down 6 basis points from the second quarter of 2018 and 24 basis points lower than one year ago. This was the lowest foreclosure inventory rate since the second quarter of 2006. The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 2.13 percent – a decrease of 17 basis points from last quarter – and a decrease of 39 basis points from last year.This graph shows the percent of loans delinquent by days past due.The percent of loans delinquent increased slightly in Q3, mostly due to the impact of Hurricane Florence.
"Mortgage Rates Higher Still, Despite Calmer Market" - From Matthew Graham at Mortgage News Daily: Mortgage Rates Higher Still, Despite Calmer Market Mortgage rates continued pushing up to new 7-year highs today, even if only by a small margin. This is notable because the underlying bond market (the primary factor in mortgage rate movement) suggested that rates should have fallen today. The issue is that bond markets were so weak on Friday that mortgage lenders didn't have a chance to fully adjust their rate sheets to reflect the losses. As such, there were still some losses to deal with this morning, and today's modest bond market improvement wasn't quite enough to offset them. In other words, we began the day with enough of a disadvantage from Friday that it couldn't be overcome. [30YR FIXED - 5.0%]
Average mortgage rates hit seven-year high as economy surges -- Mortgage rates rose significantly across the board as the economy continued to show resilience with strong business activity and growth in employment, according to Freddie Mac. The 30-year fixed mortgage rate rose 11 basis points to a seven-year high of 4.94% for the week ending Nov. 8, up from last week when it averaged 4.83%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.9%. "Higher mortgage rates have led to a slowdown in national home price growth, but the price deceleration has been primarily concentrated in affluent coastal markets such as California and the state of Washington," Sam Khater, Freddie Mac's chief economist, said in a press release. " The 15-year fixed-rate mortgage this week averaged 4.33%, up from last week when it averaged 4.23%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.24%. The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.14% with an average 0.3 point, up from last week when it averaged 4.04%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.22%. Mortgage rates moved decisively following last Friday's jobs report, Aaron Terrazas, senior economist at Zillow, said when that company released its own rate tracker on Nov. 7. "The all-important read on the American labor market showed stronger-than-expected employment and wage growth, which gives the Federal Reserve yet another data point suggesting that the U.S. economy can withstand higher interest rates. Despite some overnight volatility in bond markets, because the election results were largely in line with forecasts, the early read pointed to only modest impact on rates, he added. Still, "a divided Congress would likely have a hard time enacting new legislation: Odds of new tax cuts are diminished, but so are the odds of any improvement in the fiscal outlook.
MBA: Mortgage Applications Decreased in Latest Weekly Survey --From the MBA: Mortgage Applications Decrease in Latest MBA Weekly SurveyMortgage applications decreased 4.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 2, 2018.... The Refinance Index decreased 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier to the lowest level since November 2016. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 0.2 percent lower than the same week one year ago. ... The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 5.15 percent from 5.11 percent, with points increasing to 0.51 from 0.50 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
Mortgage application volume falls to a four-year low - Mortgage application activity dropped to its lowest level since December 2014 as interest rates reached an eight-year high, according to the Mortgage Bankers Association.The MBA's Weekly Mortgage Applications Survey for the week ending Nov. 2 had a 4%decline from one week earlier as the refinance index decreased 3% over the same period. The refinance share of mortgage activity decreased to 39.1% of total applications from 39.4% the previous week. The seasonally adjusted purchase Index decreased 5% from one week earlier to the lowest level since November 2016, while the unadjusted purchase index decreased 1% compared with the previous week and was 0.2% lower than the same week one year ago."Rates increased slightly last week, as various job market indicators showed a bounce back in job gains and an acceleration in wage growth in October," Joel Kan, the MBA's associate vice president of economic and industry forecasts, said in a press release. "The survey's 30-year fixed-rate, at 5.15%, was the highest since April 2010." "The purchase index declined to its lowest level since November 2016, but remained only slightly below the same week a year ago. It's evident that housing inventory shortages continue to impact prospective homebuyers this fall," Kan said.Adjustable-rate loan activity increased to 7.8% from 7.6% of total applications, while the share of Federal Housing Administration-guaranteed loans decreased to 10.1% from 10.3% the week prior. The share of applications for Veterans Affairs-guaranteed loans increased to 10.1% from 9.8% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.7% the week prior. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased 4 basis points to 5.15%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate increased 3 basis points to 4.97%.The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 7 basis points to 5.15%. For 15-year fixed-rate mortgages the average remained unchanged at 4.55%. The average contract interest rate for 5/1 ARMs increased 3 basis points to 4.36%.
Mortgage Applications Plummet To 18-Year Lows As Rates Hit 2010 Highs - With purchase applications tumbling alongside the collapse in refinancings, the headline mortgage application data slumped to its lowest level since September 2000 last week. This should not be a total surprise as Wells Fargo's latest results shows the pipeline is collapsing - a forward-looking indicator on the state of the broader housing market and how it is impacted by rising rates, that was even more dire, slumping from $67BN in Q2 to $57BN in Q3, down 22% Y/Y and the the lowest since the financial crisis. But in the month since those results, mortgage rates have gone higher still... (this is now the biggest 2Y rise in mortgage rates since 2000)... Sparking further weakness in the housing market... And absent Xmas weeks in 2000 and 2014, this is the weakest level of mortgage applications since September 2000... What these numbers reveal, is that the average US consumer can barely afford to take out a new mortgage at a time when rates continued to rise - if not that much higher from recent all time lows. It also means that if the Fed is truly intent in engineering a parallel shift in the curve of 2-3%, the US can kiss its domestic housing market goodbye. And, as famed housing-watcher Robert Shiller recently noted, the weakening housing market is similar to the last market high, just before the subprime housing bubble burst a decade ago.The economist, who predicted the 2007-2008 crisis, told Yahoo Finance that current data shows “a sign of weakness.”“This is a sign of weakness that we’re starting to see. And it reminds me of 2006 … Or 2005 maybe,”Housing pivots take more time than those in the stock market, Shiller said, adding that:“the housing market does have a momentum component and we’re seeing a clipping of momentum at this time.”
CoreLogic: House Prices up 5.6% Year-over-year in September -- The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA).From CoreLogic: CoreLogic Reports September Home Prices Increased by 5.6 Percent Year Over Year CoreLogic® ... today released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for September 2018, which shows home prices rose both year over year and month over month.Home prices increased nationally by 5.6 percent year over year from September 2017. On a month-over-month basis, prices increased by 0.4 percent in September 2018. (August 2018 data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results each month.) Looking ahead, the CoreLogic HPI Forecast indicates home prices will increase by 4.7 percent on a year-over-year basis from September 2018 to September 2019. On a month-over-month basis, home prices are expected to decrease by 0.6 percent from September to October 2018. The CoreLogic HPI Forecast is a projection of home prices calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state. CR Note: The CoreLogic YoY increase has been in the 5% to 7% range for the last few years. This is still near the middle of that range. The year-over-year comparison has been positive for over six consecutive years since turning positive year-over-year in February 2012.
Bubble-Watcher, Bob Shiller Warns We're Primed To Repeat 2008 As Housing Momentum Slows - The US housing market is anything but healthy and even most bullish of realtors (especially since "it is difficult to get a man to understand something, when his salary depends upon his not understanding it") is admitting that all is not well. As interest rates have soared, US housing data has collapsed at a pace not seen since 2008...Construction has slowed, sales have dropped, home prices have decelerated, and sentiment in the sector has deteriorated. The sharp underperformance of homebuilder stocks suggests that investors expect the sector to continue to struggle.And, as famed housing-watcher Robert Shiller notes, the weakening housing market is similar to the last market high, just before the subprime housing bubble burst a decade ago.The economist, who predicted the 2007-2008 crisis, told Yahoo Finance that current data shows “a sign of weakness.”“This is a sign of weakness that we’re starting to see. And it reminds me of 2006 … Or 2005 maybe,”Housing pivots take more time than those in the stock market, Shiller said, adding that:“the housing market does have a momentum component and we’re seeing a clipping of momentum at this time.”The Nobel Laureate explained: “If the markets go down, it could bring on another recession. The housing market has been an important element of economic activity. If people start to get pessimistic about housing and pull back and don’t want to buy, there will be a drop in construction jobs and that could be a seed for another recession.” When reminded that 2006 predated the greatest financial crisis in a lifetime, RT notes that Shiller acknowledged that any correction would likely be far less severe. “The drop in home prices in the financial crisis was the most severe drop in the US market since my data begin in 1890,” the Yale economist said. “It could be that we’re primed to repeat it because it’s in our memory and we’re thinking about it but still I wouldn’t expect something as severe as the Great Financial Crisis coming on right now. There could be a significant correction or bear market, but I’m waiting and seeing now.” Shiller is not alone in his ominous prognostications. Goldman's latest note warns there is more pain to come in the US housing markets: We estimate that higher interest rates explain roughly two-thirds of the deceleration in residential investment since 2017. Provisions in tax reform that reduced the value of the home mortgage interest deduction have also likely had a modest negative impact on house prices and might have contributed to the slowdown in homebuilding and sales as well.
Goldman Sachs on Housing Slowdown - A few brief excerpts from a Goldman Sachs research note today: The Housing Slowdown: The most likely drivers of the slowdown are higher interest rates and tax reform. Note: We discussed these two key headwinds at the beginning of the year. Goldman Sachs economists estimate that two-thirds of the recent slowdown is due to higher interest rates. We expect higher interest rates and tax reform to remain headwinds, but see the low level of homebuilding relative to demographic trends as a medium-run tailwind. The demographic tail-wind isn't as strong as I thought a few years ago. There have been more prime age deaths, and less immigration. See Tom Lawler's recent article: Lawler: Deaths, Immigration, and “the Demographics” Our residential investment model accounts for both of these offsetting forces and currently projects a -1.5% growth pace in 2019. So Goldman expects a small decline in residential investment in 2019. [T]he housing slowdown has added to recession worries. We see such fears as overdone. I agree that recession concerns are overblown.
American Dream Re-Collapses- US Housing Least Affordable In A Decade - It takes 23.6% of median income to make the monthly payment on the average-priced home. In it's latest report, the Black Knight Mortgage Monitor confuses affordability with payment stress and fails to make an apples-to-apples comparison when determining homes are "more affordable" today than in the period 1995-2003.Nonetheless, the report is interesting for what it does show. I am passing on a number of suggestions to them as to how to make the report better. Mortgage Monitor Bullet Points:
- It now takes 23.6% of median income to make the monthly payment on the average-priced home, making housing the least affordable it’s been in nearly a decade.
- The monthly principal and interest payment needed to purchase the average-priced home has seen a $190 per month increase since the beginning of 2018, an 18% jump.
- Despite the recent tightening, housing on average across the U.S. remains more affordable than the long term benchmark (1995–2003) of 25.1%.
- Even if home prices were to stay flat, another 0.50% increase in interest rates would make homes less affordable than long term norms.
- California is the least affordable state in which to live, requiring 39% of the median income in the state to purchase the average-priced home.
- Even more noteworthy is the increasing delta between affordability today and California's own long-term averages.
- It currently requires 7.5% more of the median income to purchase the average-priced California home today (39.3% vs. 31.8%) that it did from 1995-2003.
- While that payment-to-income ratio is still far more affordable than the 59% peak in 2006, symptoms of California's tight affordability environment appear to be emerging.
Siding with landlords and lenders, Calif. voters reject expanded rent control - California voters rejected Proposition 10, which would have reduced state restrictions on municipal rent control laws that proponents said would create more affordable housing options for tenants, but was opposed by real estate and mortgage industry interests. Prop 10 failed by a vote of 61.7% to 38.3%, according to the California secretary of state. Opponents raised nearly $75 million to fight the measure, while supporters only raised about $26 million, according to Ballotpedia, a nonprofit, nonpartisan election tracking website. The Mortgage Bankers Association opposed Prop 10, arguing that it would have actually harmed those it was intended to help, while also putting mortgage lenders at risk. "We recognized early on that this could have a very far-reaching impact on the multifamily industry and the housing industry, so we're very pleased with the outcome of the election," said Sharon Walker, associate vice president of multifamily at the Mortgage Bankers Association, adding that methods other than rent control can be explored to support affordable housing. ADVERTISING inRead invented by Teads While Prop 10 could've temporarily driven down rent for tenants in certain cities, it may have paved the way for a bigger problem, Walker said. California's housing shortage is driving up rent as demand outpaces supply, but Prop 10 would've given homebuilders and investors less incentive to support the affordable housing cause because of property devaluations triggered by lower rental income. As a result, lenders would have faced difficulties evaluating the creditworthiness of developers and municipalities planning housing projects due to the uncertainty of a particular profit guarantee. "The measure would have allowed each of the municipalities in the state to come up with their own rent control regime, which would make it difficult to manage some several hundred different regimes instead of having one consistent policy," Walker said. "It also would have impacted development of a deal because of uncertainty from trying to size the deal and having to make certain that future income stream from the rent would be able to cover the expenses of the property."
Leading Index for Commercial Real Estate Declines in October - From Dodge Data Analytics: Dodge Momentum Index Declines in October The Dodge Momentum Index moved 4.2% lower in October to 150.5 (2000=100) from the revised September reading of 157.0. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. October’s shortfall was the third consecutive monthly decline and the result of losses in both components of the Momentum Index. The commercial component fell by 4.9% from September to October, while the institutional component dropped 3.1%. The commercial component has, in fact, been the impetus behind the recent string of declines in the overall index. This is consistent with the view that the commercial building sector is approaching a peak and should begin to gradually ease back over the coming year. The institutional component, meanwhile, has been relatively more stable due to the availability of public funds for projects such as schools and airport terminals.This graph shows the Dodge Momentum Index since 2002. The index was at 150.5 in October, down from 157.0 in September. According to Dodge, this index leads "construction spending for nonresidential buildings by a full year".
"Builders shrink home sizes" - An interesting article by Nancy Sarnoff at the Houston Chronicle: Builders shrink home sizes to appeal to more buyers (ht MV)After years of catering to move-up buyers with substantial budgets, builders are introducing new models with lower price tags and smaller footprints — oftentimes the size of a two-bedroom apartment. They’re doing so by building on smaller lots, skimping on high-end materials, such as granite and brick, and designing floor plans that eliminate formal dining and living rooms, foyers and other spaces that often go unused....These developments have helped shrink the size of the average Houston-area home to 2,846 square feet from 3,084 in 2015, according to data from Metrostudy, a consulting firm for the homebuilding industry.…When the housing market recovered ... builders began targeting buyers who could spend big on large homes. Few offered floor plans under about 1,900 square feet. CR Note: This is good to see and makes sense. Some smaller homes are a key for further increases in new home sales. It made sense for builders to target higher end homes following the housing bust, but now builders also need to offer more smaller homes and lower prices.
Credit Card Debt Unexpectedly Shrinks As Student Loans Hit Fresh Record High - One month after both revolving and non-revolving consumer credit hit fresh all time highs, the Fed reported that in September total consumer credit rose to $3.950 trillion, rising $10.9 billion in the month, or a 3.3% SAAR, and missing expectations of a $15 billion increase. What was surprising is that or revolving debt, i.e., credit card usage, unexpectedly shrank by $312 million after jumping $4.6 billion in August. This was the 5th monthly decline in credit card usage in 8 months; it also means that in the 9 months of 2018, there has been a decline in revolving credit in more than half. Incidentally, until 2018, credit card debt had posted a streak of 4 consecutive years in which there had not been a single decline starting in 2014. With this month's reduction, total revolving debt was $1.041 trillion. At the same time, growth in non-revolving credit, i.e. student and auto loans, also dipped, increasing by only $11.2 billion in September, a sharp drop from August's $18.3 billion increase. With the September increase, the total non-revolving debt outstanding increased to $2.91 trillion. Non-revolving lending to consumers by the Federal government, which is mainly student loans, rose to $1.228t. And while the drop in revolving credit will once again prompt questions about the resilience of the US consumer as the US economy entered the fall, one place where there were no surprises, was in the total amount of student and auto loans: here as expected, both numbers were at fresh all time highs, with a record $1.564 trillion in student loans outstanding, an material increase of $33 billion in the quarter, while auto debt also hit a new all time high of $1.143 trillion, an increase of $19 billion in the quarter.
Wolf Richter: The State of the American Debt Slaves, Q3 2018 --Consumer debt – or euphemistically, consumer “credit” – jumped 4.9% in the third quarter compared to the third quarter last year, or by $182 billion, to almost, but no cigar, $4 trillion, or more precisely $3.93 trillion (not seasonally adjusted), according to the Federal Reservethis afternoon. As befits the stalwart American consumers, it was the highest ever. Consumer debt includes credit-card debt, auto loans, and student loans, but does not include mortgage-related debt: The nearly $4 trillion in consumer debt is up 49% from the prior peak at the cusp of the Financial Crisis in Q2 2008 (not adjusted for inflation). Over the same period, nominal GDP (not adjusted for inflation) is up 39% — thus continuing the time-honored trend of debt rising faster than nominal GDP.But a hot economy is helping out: While over the past 12 months, consumer debt jumped by 4.9%, nominal GDP jumped by 5.5%. A similar phenomenon also occurred in Q2. This is rather rare. The last time nominal GDP outgrew consumer credit, and the only time since the Great Recession, was in the three quarters from Q1 through Q3 2015. Auto loans and leases for new and used vehicles in Q3 jumped by $41 billion from a year ago, or by 3.7%, to a record of $1.11 trillion. These loan balances are impacted mainly by these factors: prices of vehicles, mix of new and used, number of vehicles financed, the average loan-to-value ratio, and duration of loans originated in prior years.The green line in the chart represents the old data before the adjustment in September 2017. These adjustments to consumer credit occur every five years, based on new Census survey data. Most of the adjustments affected auto-loan balances, reducing them by $38 billion retroactively to 2015. I included the green line to show that it wasn’t a forgotten collapse of the car business in Q3 2015 that did this.It has bedeviled economists and bankers for years that consumers aren’t going hog-wild borrowing on their credit cards. This is a problem for two reasons: Credit cards carry enormous interest rates, and bankers feel deprived if consumers don’t use them. And two, spending cranks up the economy, and if otherwise cash-strapped consumers would charge more on their credit cards to spend money they don’t have, Corporate America could show higher earnings. So credit card debt and other revolving credit in Q3 rose 3.9% year-over-year to $1.0 trillion (not seasonally adjusted). Given that nominal GDP rose 5.5% over the same period, consumers clearly didn’t do their jobs with their credit cards. Compared to the prior peak a decade ago, credit card debt is about flat.
October Producer Price Index: Core Final Demand Up 0.5% MoM - Today's release of the October Producer Price Index (PPI) for Final Demand came in at 0.6% month-over-month seasonally adjusted, up from last month's 0.2%. It is at 2.9% year-over-year, up from 2.6% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at 0.5% MoM, up from 0.2% the previous month and is up 2.6% YoY NSA. Investing.com MoM consensus forecasts were for 0.2% headline and 0.2% core.Here is the summary of the news release on Final Demand: The Producer Price Index for final demand rose 0.6 percent in October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.2 percent in September and declined 0.1 percent in August. (See table A.) On an unadjusted basis, the final demand index increased 2.9 percent for the 12 months ended in October. In October, over 60 percent of the rise in final demand prices can be traced to a 0.7-percent advance in the index for final demand services. Prices for final demand goods moved up 0.6 percent. The index for final demand less foods, energy, and trade services rose 0.2 percent in October after climbing 0.4 percent in September. For the 12 months ended in October, prices for final demand less foods, energy, and trade services advanced 2.8 percent. More… The BLS shifted its focus to its new "Final Demand" series in 2014, a shift we support. However, the data for these series are only constructed back to November 2009 for Headline and April 2010 for Core. Since our focus is on longer-term trends, we continue to track the legacy Producer Price Index for Finished Goods, which the BLS also includes in their monthly updates. As this (older) overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated.As the next chart shows, the Core Producer Price Index is far more volatile than the Core Consumer Price Index. For example, during the last recession producers were unable to pass cost increases to the consumer.
Big producer price increase in October - if a trend - is a problem -- In a light data week, this morning's report on producer prices is certainly worth mentioning. As you may have read elsewhere, headline producer prices rose +0.6% in October, the highest reading in 6 years. The below graph compares that (blue) with commodity prices (red): As you can see, commodity price increases were within the normal range. The difference happens when we break down final demand by goods (first graph below, in red) vs. services (second graph): Producer prices for services were among the 4 highest monthly readings in the past 6 years.This is important for several reasons.First of all, producer prices tend to bleed over into consumer prices. But even more importantly at this point, is the potential reaction from the Fed.If I am right and the economy slows next year, then it is important whether or not the Fed feels free to react by lowering interest rates. That is what happened in 1984, 1995, and 1997. But if the Fed thinks that inflation is beginning to accelerate, it will probably feel that it has no choice but to continue raising rates, even in the face of economic weakness. In that regard, it is worth pointing out that, despite the monthly increase, YoY producer inflation does not appear to be accelerating on any basis:
U.S. wholesale inventories rise more in September than initially estimated (Reuters) - The Commerce Department on Friday said wholesale inventories rose 0.4 percent in September, slightly faster than its initial estimate of a 0.3 percent increase. Inventories rose 5.2 percent year-over-year as of September. Inventories other than autos, a measure that goes into the calculation of gross domestic product growth, rose 0.2 percent in September. With U.S. job and wage growth bolstering domestic demand, businesses are expected to boost stocks of goods, which could underpin production at factories. In September, wholesale auto inventories rose 1.4 percent. Machinery inventories rose 0.7 percent and stocks of electrical products rose 0.9 percent. Petroleum inventories rose 5.0 percent. Sales at wholesalers were up 0.2 percent in September after a 0.7 percent increase in August. At September’s sales pace it would take wholesalers 1.26 months to clear shelves, unchanged from August.
AAR: October Rail Carloads Up 1.0% YoY, Intermodal Up 4.2% YoY -- From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission. U.S. rail traffic in October 2018 was mixed. Total carloads rose 1.0%, or 12,598. On the positive side, carloads of petroleum and petroleum products surged 28.4% (13,746) in October thanks to higher crude oil shipments; carloads of coal rose 1.6% (6,828 carloads, their first increase in five months); and carloads of steel and other primary metal products rose 9.8% (4,188 carloads, their 21st increase in the past 23 months). … Meanwhile, uncertainties in export markets is hurting grain, carloads of which were down 4.8% (5,620) in October. ... Intermodal did very well in October: volumes were up 4.2%, or 58,546 containers and trailers.This graph from the Rail Time Indicators report shows U.S. average weekly rail carloads (NSA). Light blue is 2018.Rail carloads have been weak over the last decade due to the decline in coal shipments. U.S. railroads originated 1,338,037 carloads in October 2018, up 1.0%, or 12,598 carloads, over October 2017. It’s the eighth straight monthly increase for total carloads, but it’s also the smallest percentage increase in those eight months. In October 2018, 13 of the 20 commodity categories the AAR tracks had carload increases, the fewest since March 2018. The second graph is for intermodal traffic (using intermodal or shipping containers): U.S. railroads originated 1,443,914 containers and trailers in October 2018, up 4.2% (58,546 units) over October 2017. The weekly average in October 2018 was 288,783, the second most (behind June 2018) for any month in history. 2018 will be another record year for intermodal traffic.
ISM Non-Manufacturing Index decreased to 60.3% in October -- The October ISM Non-manufacturing index was at 60.3%, down from 61.6% in September. The employment index decreased in October to 59.7%, from 62.4%. Note: Above 50 indicates expansion, below 50 contraction. From the Institute for Supply Management: October 2018 Non-Manufacturing ISM Report On Business® “The NMI® registered 60.3 percent, which is 1.3 percentage points lower than the September reading of 61.6 percent. This represents continued growth in the non-manufacturing sector at a slower rate. The Non-Manufacturing Business Activity Index decreased to 62.5 percent, 2.7 percentage points lower than the September reading of 65.2 percent, reflecting growth for the 111th consecutive month, at a slower rate in October. The New Orders Index registered 61.5 percent, 0.1 percentage point lower than the reading of 61.6 percent in September. The Employment Index decreased 2.7 percentage points in October to 59.7 percent from the September reading of 62.4 percent. The Prices Index decreased 2.5 percentage points from the September reading of 64.2 percent to 61.7 percent, indicating that prices increased in October for the 32nd consecutive month. According to the NMI®, 17 non-manufacturing industries reported growth. The non-manufacturing sector has again reflected strong growth despite a slight cooling off after a record month in September. There are continued concerns about capacity, logistics and tariffs. The respondents are positive about current business conditions and the economy.” This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index. This suggests slower expansion in October than in September, but this was still a strong reading.
Markit Services PMI: "Business activity growth regains momentum in October" - The October US Services Purchasing Managers' Index conducted by Markit came in at 54.8 percent, up 1.3 from the final September estimate of 53.5. The Investing.com consensus was for 54.7 percent. Markit's Services PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.Here is the opening from the latest press release:The U.S. service sector reported a strong expansion in business activity in October. The rate of growth rebounded from September’s weatherrelated weakness, but was also buoyed by a sharp rise in new business. [Press Release] Here is a snapshot of the series since mid-2012.
Weekly Initial Unemployment Claims decreased to 214,000 - The DOL reported: In the week ending November 3, the advance figure for seasonally adjusted initial claims was 214,000, a decrease of 1,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 214,000 to 215,000. The 4-week moving average was 213,750, a decrease of 250 from the previous week's revised average. The previous week's average was revised up by 250 from 213,750 to 214,000. The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.
Does faster wage growth imply passthrough to faster price growth? Not necessarily. Jared Bernstein --As the job market has improved, wage growth has picked up. Last week, two closely watched hourly wage series—the Employment Cost Index and the Establishment Survey wage—hit 3 percent growth on a yr/yr, nominal basis, about double their growth rate from five or six years ago.Though it’s the highest growth rate of the expansion so far, 3 percent is a still lower nominal growth than earlier periods when unemployment was as low as it is today (3.7 percent). That’s partly of function of slack still left in the job market, low productivity growth, and low inflation. Nevertheless, many economic commentators have argued that as tight labor markets push up wage growth, faster inflation will follow, as employers pass through higher labor costs to consumers. Anecdotal news reports back this up, suggesting that after years of historically low inflation, employers are finally feeling some pricing power, which they’ll use to help maintain their profit margins as labor costs rise. This note examines the validity of that claim in today’s US economy. Using data covering about the last 30 years, I find that while wages and prices correlate, the correlation has fallen over those years and, at least in the national data, there’s little evidence that faster wage growth will lead to faster price growth. To be clear, this is not a claim that inflation will stay around where it is today as the economy continues to close in on full capacity. But it is a claim that if price growth does accelerate, it will not necessarily be due to faster wage growth.
BLS: Job Openings decline to 7.0 Million in September - Notes: In September there were 7.009 million job openings, and, according to the September Employment report, there were 5.964 million unemployed. So, for the sixth consecutive month, there were more job openings than people unemployed. Also note that the number of job openings has exceeded the number of hires since January 2015 (almost 4 years).From the BLS: Job Openings and Labor Turnover SummaryThe number of job openings decreased to 7.0 million on the last business day of September, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were both little changed at 5.7 million. Within separations, the quits rate was unchanged at 2.4 percent and the layoffs and discharges rate was little changed at 1.1 percent. ...The number of quits was little changed in September at 3.6 million. The quits rate was 2.4 percent. The number of quits was little changed for total private and for government.The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS. This series started in December 2000. Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. Note that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. This is a measure of labor market turnover. When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs. Jobs openings decreased in September to 7.009 million from 7.293 million in August. The number of job openings (yellow) are up 12% year-over-year. Quits are up 11% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits"). Job openings are at a high level, and quits are increasing year-over-year. This was a strong report.
Job Openings Tumble By 284,000, Still 1 Million More Than Unemployed Workers -- After the Job Openings and Labor Turnover Survey (JOLTS) reported record prints for virtually every notable labor market series last month, in September there was a modest easing across the board. According to the BLS, after an upward revision in the August job openings from 7.136MM to 7.293MM, a record high, in September this number tumbled by 284K to 7.009 million, the biggest monthly drop since May 2017. Despite the job openings drop, this was still the 3rd consecutive print above 7 million, confirming how labor-starved US employers are, and the 4th consecutive month in which there were more job openings then unemployed workers: considering that according to the payrolls report there were 6.075MM unemployed workers in October, there is just under 1 million more job openings than unemployed workers currently, a modest drop from last month's record 1.2 million (how accurate the BLS data is, is another matter entirely). In other words, in an economy in which there was a perfect match between worker skills and employer needs, there would be zero unemployed people at this moment (of course, that is not the case.)According to the BLS, rhe number of job openings edged down for total private (-188,000) and fell in government (-96,000). Job openings increased in health care and social assistance (+71,000). The number of job openings decreased in many industries, with the largest decreases in professional and business services (-118,000), finance and insurance (-82,000), and state and local government, excluding education (-67,000). The biggest drop in job openings was observed in the South region.Adding to the exuberant labor picture, while job openings remained above total unemployment, the number of total hires also remained surprisingly high, if also dipping slightly from record highs, and in September it printed at 5.744 million, down from an upward revised, and all time high, 5.906 million in August. According to the historical correlation between the number of hires and the 12 month cumulative job change (per the Establishment Survey), either the pace of hiring needs to drop, or else the number of new jobs will rise significantly in the coming months.
Senior Citizens Are Replacing Teenagers as Fast-Food Workers The sullen teenager grinding through a restaurant shift after school was once a pop culture cliche—as American as curly fries. Nowadays, Brad Hamilton, the teen played by Judge Reinhold in “Fast Times at Ridgemont High,” would probably be too young to work at the fictional Captain Hook Fish and Chips. That’s because senior citizens are taking his place—donning polyester, flipping patties and taking orders. They’re showing up at casual dining chains such as Bob Evans and fast-food operators like McDonald’s Corp., which says it plans to make senior citizens one hiring focus in the coming year. Restaurants are recruiting in senior centers and churches. They’re placing want ads on the website of AARP, an advocacy group for Americans over 50. Recruiters say older workers have soft skills—a friendly demeanor, punctuality—that their younger cohorts sometimes lack. Two powerful trends are at work: a labor shortage amid the tightest job market in almost five decades, and the propensity for longer-living Americans to keep working—even part-time—to supplement often-meager retirement savings. Between 2014 and 2024, the number of working Americans aged 65 to 74 is expected to grow 4.5 percent, while those aged 16 to 24 is expected to shrink 1.4 percent, according to the U.S. Bureau of Labor Statistics. Golden Gigs Older Americans are joining the workforce faster than their younger peers Source: U.S. Bureau of Labor Statistics *projected 2014-2024 Stevenson Williams, 63, manages a Church’s Chicken in North Charleston, South Carolina. He’s in charge of 13 employees, having worked his way up from a cleaning and dishwashing job he started about four years ago and sometimes works as many as 70 hours a week when it’s busy. Williams is a retired construction worker and had never worked at a restaurant before, but was bored staying at home. “It’s fun for a while, not getting up, not having to punch a clock, not having to get out of bed and grind every day,” he says. “But after working all your life, sitting around got old. There’s only so many trips to Walmart you can take. I just enjoy Church’s Chicken. I enjoy the atmosphere, I enjoy the people.” Hiring seniors is a good deal for fast-food chains. They get years of experience for the same wages—an industry median of $9.81 an hour last year, according to the BLS—they would pay someone decades younger. This is a considerable benefit in an industry under pressure from rising transportation and raw material costs..
Foxconn May Bring Chinese Workers To Its New Wisconsin Facility - Back in the summer of 2017, to much fanfare President Donald Trump announced that Taiwanese electronics giant Foxconn, best known for making the iPhone, would build a new plant producing LCD panels in Wisconsin that will "bring thousands of jobs to the state."On the surface it was great deal: in what's being called the "largest economic development project in state history", Foxconn said it would build a $10 billion plant that will eventually employ as many as 13,000 people, the White House and Gov. Scott Walker promised. To be sure, it was a quid pro quo: to help lure the manufacturer, the state pledged $3 billion in tax and other “performance-based” incentives and local authorities added $764 million. Foxconn must meet hiring, wage and investment targets by various dates to receive most of those benefits.And while many - including this site - accused the project of being a giant taxpayer-funded boondoggle, calculating that every job created would cost some $230,000 in incentives, a little over a year later and even more disturbing "glitch" in the plan has emerged: according to the WSJ, instead of hiring local talent, Foxconn is considering bringing in personnel from China "to help staff the large facility under construction in southern Wisconsin as it struggles to find engineers and other workers in one of the tightest labor markets in the U.S."According to the report, the company has been quietly trying to tap Chinese engineers through internal transfers to supplement staffing for the Wisconsin plant.And while Foxconn did promise that it would invest $10 billion to build a 22-million-square-foot liquid-crystal display panel plant, hiring 13,000 employees - primarily factory workers along with some engineers and business support positions - it apparently never specified if the workers hired would be American... or Chinese.Responding to WSJ questions about its hiring plans, the company said its “Wisconsin first commitment remains unchanged,” adding that it still plans to ultimately hire 13,000, and the majority "will work on high-value production and engineering assignments and in the research and development field." And while "ultimately" Foxconn intends to hire Americans, it appears to be resorting to Chinese workers in the interim.
UPS workers oppose Teamsters isolation of freight division, call for united struggle - Workers at the United Parcel Service (UPS) Freight services division are continuing to denounce the despotic actions of the Teamsters union, which is seeking to impose the concessions contract that workers voted to reject a month ago. More than 11,000 workers are being forced to vote this week on a virtually unchanged agreement, which would maintain widespread subcontracting, create a new tier of lower-paid drivers, and maintain poverty wages for warehouse dockworkers.Workers say that the union is seeking to reduce the voter turnout to below 50 percent, which would allow it to use the same constitutional loophole that it used against a quarter of a million UPS small-package workers on October 5, defying their 54 percent “no” vote and ratifying the contract over mass opposition. A clause in the constitution states that if fewer than half the workers vote, a two-thirds majority is required to reject the contract.In Chicago, Roger, a dockworker with nine months, told the WSWS UPS Workers Newsletter that only on one of the four scheduled days of voting will workers be allowed to cast ballots at the terminal. Otherwise, they will have to travel an hour away to the local union hall to vote. In Florida, Mark, a driver of 15 years, said that workers had received a letter from the Teamsters Local advising they can only vote on Sunday morning, November 11, at 10 a.m. In Georgia, Jane, a driver of 20 years, reported that the voting window will be 30 minutes each day, meaning many drivers will be unable to vote.
Report claims Tesla’s medical clinic denied factory workers care - Earlier this year, The Center for Investigative Reporting's Reveal published a report claiming Tesla was undercounting its worker injuries and ignoring safety concerns presented by its factory managers. Now, in a new report, Reveal says the company's medical clinic has withheld medical care and work restrictions in order to minimize how many injuries Tesla has to include on its official injury records."The goal of the clinic was to keep as many patients off of the books as possible," Anna Watson told Reveal. Watson is a physician assistant who worked at the medical clinic in Tesla's Fremont factory earlier this year. "The way they were implementing it was very out of control," she said. "Every company that I've worked at is motivated to keep things not recordable. But I've never seen anybody do it at the expense of treating the patient."Watson and four other former clinic employees told Reveal that the company's on-site medical clinic, which has been run by Access Omnicare since June, frequently turned away temp workers, left medical assistants unsupervised and denied care like stitches and braces in order to keep injuries off the logs. According to internal records obtained by Reveal, reducing recorded injuries was a benefit Access Omnicare said it could offer Tesla. One Access Omnicare employee told Reveal that Tesla pressured the medical company to dismiss injuries. Staff were then reportedly told to stop recommending stretches for back and shoulder injuries, told they couldn't call 911 for injuries without a doctor's permission and told they couldn't give injured employees work restrictions. Instead of an ambulance, workers were allegedly told to use Lyft.
In news that will shock absolutely no one, America’s cellphone networks throttle vids, strangle rival Skype --US cellphone networks are all throttling video to some extent, providing lower-quality stream to their customers, and some are purposefully undermining Skype as an alternative to their services.That’s the upshot of a ten-month study by Northeastern University's College of Computer and Information Science set up to see what impact, if any, the end of net neutrality rules had had only ordinary users. On the pure question of whether the FCC's decision to scrap its own rules has changed cellphone operators' behavior, the answer is no, they haven't – they were throttling before and they have continued to do so. However, the authors note that such throttling was actually banned under the previous rules. So it was likely the case that there was not enough time for the FCC's enforcement department to clamp down on that behavior before the rules were rescinded.As to the throttling itself, intriguingly it is not consistent across video providers or operators, suggesting that there may be deals between certain mobile phone networks and certain video streaming companies to let their videos pass through unthrottled. And if that's the case, then of course there is a pressure point that cellular networks can use to extract money from video companies – which is exactly what net neutrality advocates are concerned about. But there is no smoking gun as such.
A Gun Capable Of Fitting Into A Wallet Is Being Sold By An American Arms Company - The National Interest recently profiled the latest firearm which is pushing the limits in terms of size and technology — except this isn't a "big gun" — but quite the opposite. A North Carolina company has produced and is currently selling a single-shot "credit card gun" which fits into a wallet, and which can be neatly tucked away in a person's back pocket. A military analyst writing for The National Interest describes the gun, called the "LifeCard," as "a single-shot, single-action .22 designed to resemble an innocuous credit card." The credit-card sized pistol was "fashioned from lightweight anodized aluminum with a steel trigger and tilt-up barrel" which enables "the 7 oz. pistol folds up into a 3.375 inch by 2.215 inch card that, despite its half-inch thickness, can fit with relative ease inside your back pocket or average wallet."It was developed by a North Carolina-based company Trailblazer Firearm, and has enough ammo storage for four rounds. The company has billed it as a weapon of "last resort" in dangerous, unexpected situations, but it's also sure to draw controversy given the extreme ease of concealment and potential for passing through security screenings, similar to the controversy evoked by 3-D printed guns.
MSNBC Mistakenly Shows Results Of Florida Governor Race One Day Early - MSNBC's Chris Hayes had egg on his face Monday evening after an infographic aired a full day before the election showing Democrat Andrew Gillum prevailing over GOP rival Ron DeSantis by more than 45,000 votes with 99% of the votes counted, as first reported by Deadline Hollywood. Hayes told viewers: "Quick clarification here. Just want to say, earlier this hour, uh, we showed a graphic of the Florida gubernatorial race. May have caught your eye because our system had inadvertently populated some test numbers." "Obviously, we do not yet have any vote totals here, the night before the election," Hayes. "That was a misfire. Don’t worry. I was pretty confused when I saw it up there, to see it there myself." According to a Saturday survey by St. Pete Polls, Gillum leads DeSantis 49-48% with a 2% margin of error.
Georgia Election Worker Assures Black Man Ballot Scanner Supposed To Sound Like Shredder—Insisting that the machine was operating exactly as intended, Georgia election worker Mitchell Hamlin reportedly assured a black man on Tuesday that the ballot scanner was supposed to sound like a shredder. “Don’t you worry, it’s designed to sound like it’s ripping your ballot into thousands of tiny pieces,” the election worker informed the middle-aged African American resident, adding that it was merely a coincidence that several white voters in front of him had been directed to insert their ballots into a different scanner. “You should absolutely be hearing a constant whirring and shredding sound—that’s the machine’s way of telling you that your vote counts. And that bucket below where the ballot scanner is dropping strips of paper? That’s simply the machine producing a receipt so we know it went through to the right place. Congratulations, you definitely voted today.” At press time, Hamlin stated that he could also confirm the man’s registration for the 2020 election if he just handed over his driver’s license.
Scott Walker Thought He Could Get Away With Corporate Welfare - In July 2017, Walker inked a deal with Foxconn, the Chinese manufacturer known for being so punishing to its workers that it had to install nets to prevent suicides. Foxconn would build a state-of-the-art manufacturing plant in Mount Pleasant, Wisconsin, producing LCD screens for large-panel televisions—a first for North America. The company claimed this would create 13,000 good-paying jobs and $10 billion in investment. In exchange, Walker offered $3 billion in state subsidies. “The Foxconn campus will be large enough to hold 11 Lambeau Fields,” Walker gushed when announcing the agreement. His approval ratings had sagged after a lackluster presidential run, and he had failed to keep his first-term promise of creating 250,000 new jobs. The Foxconn deal would be the capstone of his tenure, a public-private partnership to create a high-tech hub in the upper Midwest—a real legacy item. Instead, the deal was just a way to flush out taxpayer money, without getting much from Foxconn in return. The $3 billion subsidy to Foxconn quickly grew to over $4.5 billion, including local government tax abatements, new roads to connect to the plant, and a ratepayer-funded power transmission line. “Since Wisconsin already exempts manufacturing companies from paying taxes,” Dan Kaufman wrote at The New Yorker, “Foxconn, which generated a hundred and fifty-eight billion dollars in revenue last year, will receive much of this subsidy in direct cash payments from taxpayers.” About $1 billion in subsidies will be paid regardless of whether Foxconn builds anything at all. Walker was nothing but a bagman for a coordinated hit on Wisconsin’s treasury, and he paid for it. On Tuesday, he ran into a little-understood fact of modern political life: corporate welfare is deeply unpopular.
When low-income families can meet their basic needs, children are healthier – A series of reports from five cities across the US found that young children and their parents are healthier when they are able to afford basic needs. New research published by Children's HealthWatch, headquartered at Boston Medical Center, highlights the need for policymakers to improve access to and effectiveness of programs that enable all families with low incomes to afford basic needs such as food, shelter, utilities, medical care, prescription medicines and childcare. Researchers surveyed more than 18,000 families of children under age 4 in the emergency departments and primary care clinics at urban hospitals in Baltimore, Boston, Minneapolis, Philadelphia, and Little Rock. The study team created a composite measure of hardships that included a family's ability to afford food, utilities, and health care, and maintain stable housing. All hardships described in the study have previously been associated with poor child and caregiver health. This study, however, examined the differences between children living in hardship-free families versus those in families with any or multiple hardships.In all cities, living in a hardship-free family was associated with good overall health for children and caregivers, positive developmental outcomes for young children, and positive mental health among mothers. Nearly half of families interviewed at Hennepin County Medical Center in Minneapolis reported that they were hardship-free. At Boston Medical Center, only about one quarter of the families surveyed reported zero hardships, which may be due to higher housing costs. "This report provides a snapshot on our progress to ensure every family can easily afford their bills and allow children to reach their potential, and gives us a goal to ensure all children live in hardship free families in the future,"
New study: reduced screen time for young highly recommended for well-being - Too much time spent on gaming, smartphones and watching television is linked to heightened levels and diagnoses of anxiety or depression in children as young as age 2, according to a new study. Even after only one hour of screen time daily, children and teens may begin to have less curiosity, lower self-control, less emotional stability and a greater inability to finish tasks, reports San Diego State University psychologist Jean Twenge and University of Georgia psychology professor W. Keith Campbell. Twenge and Campbell's results were published in an article, "Associations between screen time and lower psychological well-being among children and adolescents: Evidence from a population-based study," which appeared this month in Preventative Medicine Reports. Twenge and Campbell were particularly interested in associations between screen time and diagnoses of anxiety and depression in youth, which has not yet been studied in great detail. Their findings provide broader insights at a time when youth have greater access to digital technologies and are spending more time using electronic technology purely for entertainment, and also as health officials are trying to identify best practices for managing technology addiction.
A Dark Consensus About Screens and Kids Begins to Emerge in Silicon Valley — The people who are closest to a thing are often the most wary of it. Technologists know how phones really work, and many have decided they don’t want their own children anywhere near them. A wariness that has been slowly brewing is turning into a regionwide consensus: The benefits of screens as a learning tool are overblown, and the risks for addiction and stunting development seem high. The debate in Silicon Valley now is about how much exposure to phones is O.K. “Doing no screen time is almost easier than doing a little,” said Kristin Stecher, a former social computing researcher married to a Facebook engineer. “If my kids do get it at all, they just want it more.” Ms. Stecher, 37, and her husband, Rushabh Doshi, researched screen time and came to a simple conclusion: they wanted almost none of it in their house. Some of the people who built video programs are now horrified by how many places a child can now watch a video. Asked about limiting screen time for children, Hunter Walk, a venture capitalist who for years directed product for YouTube at Google, sent a photo of a potty training toilet with an iPad attached and wrote: “Hashtag ‘products we didn’t buy.’” Athena Chavarria, who worked as an executive assistant at Facebook and is now at Mark Zuckerberg’s philanthropic arm, the Chan Zuckerberg Initiative, said: “I am convinced the devil lives in our phones and is wreaking havoc on our children.” Ms. Chavarria did not let her children have cellphones until high school, and even now bans phone use in the car and severely limits it at home.She said she lives by the mantra that the last child in the class to get a phone wins. Her daughter did not get a phone until she started ninth grade. This idea that Silicon Valley parents are wary about tech is not new. The godfathers of tech expressed these concerns years ago, and concern has been loudest from the top. Tim Cook, the C.E.O. of Apple, said earlier this year that he would not let his nephew join social networks. Bill Gates banned cellphones until his children were teenagers, and Melinda Gates wrote that she wished they had waited even longer. Steve Jobs would not let his young children near iPads.
Police Respond To Active Shooter Situation At North Carolina High School -- Police was responding on Friday to active shooter situation at the Topsail High School, near Wilmington according to WECT, a local television station. Law enforcement sources say the scene is “still active.” Based on live pictures from WECT-TV, there is a heavy law enforcement presence at the school, which is located at 245 N. Saint Johns Church Road in Hampstead. There have been no immediate reports of injuries and students were not due to report to class until 8 a.m. WECT reported that there may have been some students on campus when the incident was reported around 7 a.m. A Pender County dispatcher told Reuters that deputies were responding to a situation at a local high school, but could not elaborate. Law enforcement in @PenderCounty_NC is responding to reports of an active shooter at Topsail High School this morning. According to Capt. James Rowell with the Pender County Sheriff’s Office, it is still an active scene. #ILM #Brunsco #Pender #CapeFear— Joe Catenacci (@JoeCats19) November 9, 2018 “It’s extremely busy right now,” an emergency dispatcher told Time magazine. “All of our units are trying to take this person into custody.” Surf City Middle School, just over 8 miles from Topsail, has also reportedly been placed on lockdown.
School support workers vote to strike in rural district in Washington state -- School support staff in the North Thurston Public School (NTPS) district in Washington state voted to authorize strike action last week against the refusal of the district to provide adequate wage increases and a state law prohibiting public employees from striking. With nearly 15,000 students the district encompasses 74 square miles of small towns and rural areas immediately east of the city of Olympia, the state capital. Over 130 members of the North Thurston Association of Office and Technical Professionals (NTAOTP) voted by a 78 percent margin to authorize a strike. Negotiations for a new contract have been ongoing since June with the contract expiring at the end of August. This action comes roughly two months after a wave of walkouts and strike votes by Washington teachers swept the Democratic Party-controlled state. In each struggle, the Washington Education Association (WEA) isolated teachers within their own locale and came to separate district-by-district agreements in order to prevent a statewide walkout similar the ones that hit West Virginia, Oklahoma, Arizona and other states earlier this year.
Chicago charter school teachers vote overwhelmingly to authorize strike Last week, teachers at four charter school operators in Chicago voted overwhelmingly to authorize a strike. Teachers at Acero (formerly UNO Schools), which operates 15 schools, and Chicago International Charter Schools, which operates four schools, approved a strike with 98 percent and 96 percent support of voting teachers, respectively. Civitas Education Partners and Quest Management approved a walkout later in the week.The teachers seek better pay, smaller class sizes, special education resources, increased wages for the paraprofessionals and longer parental leave. Chicago Alliance of Charter Teachers and Staff (ChiACTS), which merged this year with the Chicago Teachers Union (CTU), covers teachers in 34 Chicago charters, but each school is under a separate contract.Nineteen charter schools in all may hold votes to authorize a strike. No strike date has been announced.The strike authorizations come amid a growing wave of struggles in the US and internationally. In a year where teachers in the US have struck against the decades of bipartisan attacks on public education, which have been aided and abetted by the American Federation of Teachers (AFT), the National Education Association (NEA) and their state and local affiliates, the conflict between educators, the two corporate controlled political parties, and the unions that falsely claim to represent teachers has reached a new stage. Rank-and-file teachers walked out earlier this year in West Virginia, Oklahoma, Arizona and other states to oppose low pay, decades of funding cuts and unacceptable teaching and learning conditions. The statewide walkouts initially erupted outside of the control of the unions and generated popular support. In the end, however, the NEA and AFT, with the critical backing of a host of ostensibly “socialist” organizations whose members have gained prominent positions inside the teacher unions, were able to corral the strikes and smother them. None of the issues teachers courageously fought for have been resolved.
The Little Rock Education Association stalls on strike action in Arkansas --Teachers continue to demand strike action across the United States, despite the fervent attempts by the unions to stamp down struggles. In the lead-up to the mid-term elections, both the American Federation of Teachers (AFT) and the National Education Association (NEA) have sponsored rallies and get-out-the-vote messaging on behalf of some 1,500 “teacher candidates” and various Democratic Party office-seekers, while doing everything in their power to prevent a resumption of last spring’s teacher strikes. Teachers in the nation’s largest school district, New York City, and second largest, Los Angeles, have been kept on the job through union-agreed-upon contract extensions. 3,300 teachers in Anchorage, Alaska, have been protesting for weeks and continue to work without a contract, along with educators in Ketchikan, Alaska, whose contract expired in the spring of 2017. Teachers in Atlantic Highlands, New Jersey, are also working without a contract. Last week charter school teachers at 15 schools, serving 8,000 students in Chicago, voted overwhelmingly to strike; school workers in North Thurston, Washington, also approved strike action by 78 percent.The deliberate isolation of struggles and outright sabotage by the unions is also taking a stark form in Little Rock, Arkansas, where a threatened strike was put on hold this week by the Little Rock Education Association. Instead of walking out on November 1, the union agreed to a two-week contract extension, until November 14. Negotiations will continue on election day. The backdown by the union is particularly significant in a city that remains an iconic symbol of the defeat of pro-segregation forces 61 years ago. In 1957, nine black students, dubbed the “Little Rock Nine,” were barred from Central High School by Arkansas Governor Orval Faubus and the Arkansas National Guard. Twenty-one days later, the children, under the escort of federal troops, successfully enrolled. The upholding of the landmark Brown vs. Board of Education Supreme Court ruling in 1954 and defeat of the segregationists heralded a national expansion of the right to a public education.
An increasing number of public colleges are unaffordable for low-income students - In the popular imagination, public colleges are a place where a state’s students from all walks of life can gather, learn from each other and earn the type of education that will help them succeed beyond graduation. But new research suggests many of these schools are becoming increasingly out of reach for low-income students, putting that ideal in danger. At 52% of public colleges, students from families that earned $30,000 per year or less paid at least $10,000 annually to attend during the 2015-2016 academic year, according a report released Wednesday by New America, a Washington-based think tank. That’s up from just 34% of public colleges in the 2010-2011 academic year. “That’s just incredibly alarming,” said Stephen Burd, a senior policy analyst with the Education Policy program at New America and the author of the report. “Particularly for the lowest income students [public colleges] are getting out of reach.” The report is the latest to raise questions about the ability of public colleges to serve as engines of economic mobility. A variety of factors are putting that historical role in jeopardy. During the Great Recession and, in its wake, states cut funding to public colleges, pushing them to look elsewhere for revenue, including towards students who pay more to attend. These students are also particularly valuable in an environment wheredemographic shifts mean that colleges have fewer high school graduates from which to fill their classes. A drive for prestige, at least as measured by college rankings, also means that schools will look towards students with high standardized test scores, which often correlate with income.
Socialist Students- Free Tuition Would Stimulate Economy - Socialist students in Illinois are petitioning to make college tuition "free" because they say doing so would stimulate the local economy. The Democratic Socialists of America chapter at Southern Illinois University at Carbondale launched a Change.org petition titled "Make SIUC Tuition Free." The petition currently has more than 70 signatures of its 100 signature goal."The high of [sic] cost of tuition is directly causing lower enrollment at Southern Illinois University at Carbondale," the petition states."This hurts SIUC students, university employees, and the Carbondale community.""SIUC Young Democratic Socialists of America asks the SIUC Administration to create a vision of growth including free tuition for all Illinois residents. Let's end student debt and help Carbondale prosper," the petition adds. SIUC student Layne Ellingsworth told KFVS-TV that making tuition free would stimulate the economy. “More jobs and more students means more money circulating in the local economy,” Ellingsworth said. The SIUC YDSA chapter held a press conference on Friday to promote their petition. "The need for comprehensive tuition reduction is critical now as the University of Illinois at Urbana-Champaign and Eastern Illinois University both announced tuition-free plans aimed at students with family incomes below $61,000. SIUC competes directly with both universities especially Eastern Illinois University for these students at admissions time," the Facebook event description for the press conference reads. According to the University of Illinois at Urbana-Champaign website, the school will offer "free" tuition to some students beginning in 2019. Qualifications include the following, according to the university's website:
- You're an Illinois resident (parents listed on the FAFSA are also Illinois residents)
- Your family income is $61,000 or less
- Your family's assets are less than $50,000
- You're admitted as a new freshman or transfer student
- You're under the age of 24
College Offers Safe-Space For Students To "Process, Stressful" Midterm Election Results - Students at an Illinois college received an email on Tuesday offering “extra support and resources” for those struggling to “process” the 2018 midterm election results. Three Elmhurst College o ffices informed students that there would be increased support on campus during the “stressful time” of midterm elections, according to an email obtained by Campus Reform. “Our staff will have open office hours to provide a space to process the outcomes of the elections,” Elmhurst’s Office of Diversity & Inclusion, Office of Student Involvement, and Office of the Chaplain said in the email.“We will also have coffee, cider, hot chocolate, and some treats to offer you,” they continued.“We hope that you will join us if you need some extra support and resources throughout the day.”The school invited those unable to make the 9 a.m. to 4 p.m. office hour window to a separate “space to process election results” held by the Elmhurst’s Spiritual Life Council at 5 p.m. Wednesday.
Poll: One In Three College Students Believe Violence Is Justified To Stop “Hate Speech” --Online survey of 800 full-time undergraduates conducted by McLaughlin & Associates and sponsored by Yale University’s William F. Buckley, Jr. Program found that a startling number of colleges students believe that violence is justified to silence what they consider to be hate speech. Today we discussed an FSU student arrested for battery in a confrontation with conservative students. I will be having a debate at Rice University over calls for schools and government to outlaw hate speech. As with many in the free speech community, I have been opposed to such criminalizing of speech. Also worrisome is that 53% report that they feel “intimidated” to share their views — a problem that both students and faculty have shared with me though the years. Again, as I said in the earlier posting, there have been a number of faculty who have reinforced this view. At the University of California at Santa Barbara, feminist studies professor Mireille Miller Young led her students in attacking pro-life advocates, stealing their display, and then committing battery on a young woman. Despite pleading no contest to criminal assault, Miller Young not only was retained but widely supported by faculty and students, including those who viewed the pro-life advocates as “terrorists” who should be kept off campus. This month, the University of Oregon gender studies department is featuring her as a speaker. With responses like the one at the University of California (Santa Barbara), it is little surprise to see that students believe that violence is sometimes the answer. Both students and some faculty have maintained the position that they have a right to silence those with whom they disagree and even student newspapers have declared opposing speech to be outside of the protections of free speech. The CUNY Law Dean, Mary Lu Bilek, even argued that shutting down free speech is free speech. I have also discussed how Antifa and other college protesters are increasingly denouncing free speech and the foundations for liberal democracies. Dartmouth Professor Mark Bray, the author of a book entitled “Antifa: The Anti-Fascist Handbook” is one of the chief enablers of these protesters. He defines anti-fascists as “illiberal” who reject the notion that far right views deserve to “coexist” with opposing views.
Why are so many seniors filing for bankruptcy- - Even as bankruptcy rates are declining in the general population, both in Utah and nationwide, new research shows they’re increasing for people 65 and older. In 1991, 2.1 percent of people filing bankruptcy were between 65 and 74; in 2016, 12.2 percent were, according to a report on late-life bankruptcy published in August. "One in 7 bankruptcy filers is of retirement age, 65 years or over. This is a nearly five-fold increase over just two and a half decades. This is a notable demographic shift," wrote the authors of "Graying of U.S. Bankruptcy," the report prepared by scholars at four universities who work with the Consumer Bankruptcy Project. While bankruptcy is supposed to give financially troubled people a fresh start, it can pose special hardships for older people, who may no longer be able to work and rebuild their finances because of health issues or age discrimination, Consequently, many seniors struggle to stay solvent even after their debts are discharged or restructured in bankruptcy. And many older people struggle with the ethical issues surrounding bankruptcy, believing that declaring bankruptcy is a moral failing, and that it’s important that they make debt payments even if there's no money left over for food or medicine. And even though more than half the states have laws that require adult children to help take care of their insolvent parents, some seniors choose not to ask their families for help and others are going broke because they're supporting grown children, the study found.'
Certain blood pressure drugs linked to increased risk of lung cancer -- Use of angiotensin converting enzyme inhibitor drugs (ACEIs) to lower blood pressure is associated with an increased risk of lung cancer compared with use of another group of blood pressure drugs called angiotensin receptor blockers (ARBs), finds a study in The BMJ today. The risk is particularly elevated among people using ACEIs for more than five years, say the researchers. Although the risk for individual patients is modest, ACEIs are widely prescribed, so these small relative effects could translate into large absolute numbers of patients at risk for lung cancer, say the researchers. ACEIs are effective drugs used to treat high blood pressure (hypertension). Evidence suggests that ACEIs may increase the risk of lung cancer through the build-up of protein-like chemicals called bradykinin and substance P in the lung. These chemicals have been found on lung cancer tissue, and bradykinin may directly stimulate the growth of lung cancer.
As if heroin weren’t dangerous enough, it may come with lead poisoning -After she admitted swallowing 30 packs of opium, a 51-year-old woman was brought to a hospital emergency room in Tehran, the New England Journal of Medicine reported yesterday. When a CT scan confirmed the presence of several small oval objects in her abdomen, the doctors gave her laxatives. She passed a collection of small, sausage-like opium packs “without complication,”. One of those packs was sent for lab analysis, and results came back confirming opium and also the presence of lead—a lot of lead. Luckily for this particular patient, she didn’t seem to be showing any symptoms of lead poisoning, but she appears to have gotten off lightly. Over the past few years, the problem of lead-contaminated opium has become increasingly urgent in Iran, which is used as a major pathway for opium trafficking from Afghanistan. In early 2016, write Zamani and Hassanian-Moghaddam in a CDC report, another patient case report found blood lead levels 14 times higher than normal. The patient in question didn’t have any obvious exposure to lead but was known to use oral opium. That prompted tracking of another 800 patients over the next few months, whose blood lead levels ranged from about five times higher than normal to 1,100 times higher. These blood lead levels were substantially higher than earlier reports of lead poisoning in opium users. A more recent analysis of 249 patients with a history of opium dependency found a narrower but still alarming range of elevated blood levels, as well as common symptoms of lead poisoning like abdominal pain and nausea. It’s not clear just how much lead an opium user might be ingesting or inhaling, write Zamani and Hassanian-Moghaddam, but they calculate that it could be considerably higher than the levels that caused a “cluster of heavy-metal poisoning among Ayurvedic medication users” in the US. It’s also not clear how the lead ends up in opium. Opium poppies grown in lead-contaminated soil have been found to accumulate lead, and Afghanistan’s poppy-growing regions overlap to a large extent with its lead mines, note Mohammad Mahdi Hayatbakhsh and his colleagues in their study of opium users’ lead levels. It’s possible that the process of producing opium from poppy seed pods also introduces lead contamination. The lead could also be added intentionally at some point to increase the weight (and therefore the sale value) of the final product.
A new, eye-wateringly high estimate of the cost of obesity in the US --A report released this week puts a surprisingly high figure on the societal cost of obesity in the US: $1.72 trillion annually, or 9.3 percent of GDP. By contrast, the current CDC estimates are in the region of $150 billion, less than one tenth as high. By far the biggest chunk of that $1.72 trillion is the $1.24 trillion chunk attributed to the “indirect” costs of obesity: the “work absences, lost wages, and reduced economic productivity for the individuals suffering from the conditions and their family caregivers,” the report explains. That is, the bulk comes from costs other than healthcare spending. The estimate for healthcare spending—$480.7 billion annually—is somewhat higher than a range of estimates in reviews of the literature, which hover around $150 to $300 billion, but are still on the same scale. Estimates like these can vary substantially because of the different methods used in calculating them. For example, a review from 2017 catalogues the different obesity-related diseases that were included in various studies across different countries; respiratory disorders and musculo-skeletal disorders make an appearance in some but not others. A 2016 meta-analysis describes a similarly wide range in how medical costs are calculated. The new report was published by the Milken Institute, a think tank that aims to “increase global prosperity by... widen[ing] access to capital, creat[ing] jobs, and improv[ing] health.” That means that, while the report leans heavily on the academic literature, it hasn’t been scrutinized through the process of scientific peer review and doesn’t have the same obligations as a scientific paper to publish the details of its workings. Their method casts the net widely, drawing a large circle around what counts as an obesity-related cost—a set of choices made clear by the fact that the estimate is so high compared to others. But it illustrates just how much different data, different assumptions, and different methods can affect the overall results.
Childhood obesity linked to air pollution from vehicles --Early exposure to air pollution from vehicles increases the risk of children becoming obese, new research has found.High levels of nitrogen dioxide, which is emitted by diesel engines, in the first year of life led to significantly faster weight gain later, the scientists found. Other pollutants produced by road traffic have also been linked to obesity in children by recent studies.Nitrogen dioxide pollution is at illegal levels in most urban areas in the UK and the government has lost three times in the high court over the inadequacy of its plans. The pollutant also plagues many cities in Europe and around the world.“We would urge parents to be mindful where their young children spend their time, especially considering if those areas are near major roads,” said Jeniffer Kim, at the University of Southern California, who led the new research. “The first year of life is a period of rapid development of various systems in the body [and] may prime the body’s future development.”The World Health Organization (WHO) revealed last Monday that 90% of the world’s children are breathing unsafe air, a situation described as “inexcusable” by the WHO’s head. Concern over the impact of toxic air on children’s health is rising as research reveals serious long-term damage to both their physical and mental health. A large recent study found toxic air significantly increases the risk of low birth weight, leading to lifelong damage to health. Others linked air pollution with birth defects, cot deaths and the first direct evidence of pollution particles in mothers’ placentas has also been revealed. The new research, published in the journal Environmental Health, investigated the impact of air pollution from busy main roads, where diesel trucks are common, in the crucial first year of life. They found that by age 10, children suffering high early exposure were almost 1kg heavier on average than those with low exposure. The scientists took a series of other factors into account, including gender, ethnicity and parental education, and think it is unlikely that variations in diet could explain the strong link found.
Delhi panic over toxic air ahead of Diwali- Panic gripped the Indian capital Delhi on Monday as residents woke up to a blanket of thick grey smog ahead of Diwali, the festival of lights. Visibility is poor as pollution levels reached 20 times the World Health Organisation's recommended limit. The air quality is expected to worsen in the coming days due to the use of firecrackers, experts have warned. Indian cities regularly dominate global pollution rankings for the worst air quality. The Supreme Court has restricted the timeframe for setting off firecrackers to only two hours during the day - but experts believe this curfew will be hard to implement. Diwali, the most important Hindu festival in north India, celebrates the victory of good over evil. However in the last few years, celebrations have seen air pollution rise to hazardous levels after many firecrackers were set off. Many have taken to social media to share their concerns as well as post dramatic photos of the city to show the extent of the problem.On Sunday, the pollution level in the city dipped and was categorised as "poor". But a sharp spike in smog on Monday morning - which recorded a reading of 365 on the Air Quality Index (AQI) - has effectively put the city's air in the "hazardous" category. Authorities in Delhi have warned residents to stay indoors as much as possible and have started to shut down construction activity in the city.
Superbugs pose a dangerous, $65 billion threat to the US health-care system --Antimicrobial resistance is a large and growing problem, with the potential for enormous health and economic consequences for the United States and the rest of the world. According to a new OECD report, released Wednesday, superbug infections could cost the lives of about 2.4 million people in North America, Europe and Australia over the next 30 years unless more is done to stem antibiotic resistance.On average, about 29,500 persons die each year in the United States from infections related to eight resistant bacteria. By 2050 it is estimated that antimicrobial resistance will kill about 1 million people in the United States.The economic toll of this superbug crisis is huge: In the United States alone the health-care costs dealing with antimicrobial resistance could reach $65 billion by 2050, according to the OECD report. That is more than the flu, HIV and tuberculosis. If projections are correct, resistance to backup antibiotics will be 70 percent higher in 2030 compared to 2005 in OECD countries. In the same period, resistance to third-line treatments will double across EU countries. The bottom line: Between 2015 and 2050, antimicrobial resistance would cost about $3.5 billion per year to the health-care services of the 33 countries included in the analysis. The impact on quality of life, measured through disability-adjusted life years, will be even larger, with up to 1 out of every 232 individuals losing one year of life in good health because of antimicrobial resistance in the OECD countries. Earlier this year, the U.S. Centers for Disease Control and Prevention warned it had detected 221 strains of a rare breed of "nightmare bacteria." This bacteria is virtually untreatable by antibiotics and have special genes that enable them to spread their resistance to other germs. Nightmare bacteria is particularly deadly in the elderly and people with chronic illnesses. The probability of developing a resistant infection is also significantly higher for children up to 12 months of age, and men are also more likely to develop resistant infections than women. Nearly half of the resulting infections prove fatal.
'Typhus zone': Rats and trash infest Los Angeles' skid row, fueling disease — Wholesale fish distributors, produce warehouses and homeless encampments line Ceres Avenue downtown, creating perfect conditions for rats.Uneaten food is dumped on the street — a salad platter was recently splattered on the asphalt — and discarded clothing piles up only to be swirled into rats' nests.Those rats, experts say, are likely contributing to the growing number of typhus infections cropping up on skid row and other parts of the region. The disease is spread by fleas, which are carried by rats, opossums and pets."You have constant activity that serves as a breeding ground for rats," said Estela Lopez, executive director of the Central City East Association, a business improvement district that overlaps skid row.Los Angeles County's typhus outbreak, which began in the summer, has expanded to as many as 92 cases, including 20 in Pasadena and a possible 18 in Long Beach, where five were still under investigation by the Long Beach Department of Health and Human Services.The average number of typhus cases the county sees in a year is 60, which itself has doubled in recent years, according to the Los Angeles County Health Department. City officials recently declared downtown's skid row — roughly 54 square blocks where more than 4,000 homeless congregate — a "typhus zone." A typhus infection can cause high fever, headache, chills and, in rare cases, meningitis and death. It's contracted when "the feces from infected fleas are rubbed into cuts or scrapes in the skin or rubbed into the eyes," the county health department says on its website.
CDC Director- Congo's Ebola Outbreak May Not Be Containable - Robert Redfield, the director of the Centers for Disease Control and Prevention said that the Democratic Republic of Congo’s newest Ebola outbreak may not be containable. Tom Inglesby, the director of the Johns Hopkins Center for Health Security in Baltimore, said that if the Ebola outbreak becomes endemic in the Congo’s North Kivu province, it shows “we’ve lost the ability to trace contacts, stop transmission chains and contain the outbreak.” In this situation, Ebola could spread, which could negatively impact both trade and travel, according to a report by Becker’s Hospital Review.“I do think this is one of the challenges we’ll have to see, whether we’re able to contain, control and end the current outbreak with the current security situation, or do we move into the idea that this becomes more of an endemic Ebola outbreak in this region, which we’ve never really confronted,” Dr. Redfield told The Washington Post. According to The Washington Post, if international Ebola containment efforts fail in the Congo, it would mark the first time the virus was not stopped since 1976 when Ebola was first identified. The current Ebola outbreak is going on its fourth month, totaling 300 cases and 186 deaths as of November 4th. The problems with containment of this particular Ebola outbreak stem from the fact that the disease is spreading in an active war zone with several armed groups attacking health officials, government aids and civilians. Some civilians with Ebola have refused treatment, and health care workers are still being infected. About 60 to 80 percent of new cases do not show an epidemiological link to prior cases.The daily rate of new Ebola cases had more than doubled in early October. In addition, there is community resistance and a deep mistrust of the government as the raging outbreak continues to spread through an active war zone.
Bill Gates Unveils Toilet That Transforms Waste Into Fertilizer, Doesn't Require Water or Sewers - For Bill Gates, toilets are serious business. The billionaire philanthropist kicked off the Reinvented Toilet Expo in China and unveiled a new toilet that does not require water or sewers, and uses chemicals to turn human waste into fertilizer, Reuters reported."We are all here for one reason: because more than half the world's population doesn't have the safe sanitation they need to lead healthy and productive lives," Gates said in a speech on Tuesday in Beijing. To drive home the importance of safe sanitation, Gates brought a jar of feces with him during his keynote in Beijing. "You might guess what's in this beaker—and you'd be right. Human feces. This small amount of feces could contain as many as 200 trillion rotavirus cells, 20 billion Shigella bacteria, and 100,000 parasitic worm eggs," the Microsoft co-founder said.He kept the jar on the podium for nearly 10 minutes before removing it, the Associated Press reported.Poor sanitation kills nearly 500,000 children under the age of five annually and costs an estimated $223 billion a year in the form of higher health costs and lost productivity and wages, Reuters reported, citing the information from the Bill and Melinda Gates Foundation.The untreated sewage can also negatively impact the surrounding environment."Some of the untreated human waste is in unlined pit latrines that contaminates groundwater around people's homes," Gates said in his speech. "Some is collected manually, or by trucks, and is dumped into nearby fields or bodies of water. And some is collected in sewers but never gets treated. The point is that we are far from the goal the world set in 2015 of everyone using a safely-managed toilet." The aim of the expo is to "launch a new category of innovative, decentralized sanitation solutions that will benefit millions of people worldwide," Gates said.
FDA Approves First Waste-Gas-Reduction Drug for Cattle - When we think of dangerous gases emitted by cattle, the logical first thought is of methane, let loose into the air by burps and farts to contribute to climate change. But cattle are complex creatures in their diversity of noxious fumes, and the FDA just approved the first drug to treat a lesser-known one. Cattle produce ammonia—well, sort of. According to Penn State, it would be more accurate to say that cattle are very inefficient at breaking down nitrogen, which they take in as part of their diet. They pass that nitrogen out mostly in urine, where it's reasonably harmless. But there are enzymes in cattle feces that, when they mix with cattle urine, form ammonia and ammonia is not reasonably harmless. This is a problem at its worst in indoor facilities, especially larger farms and indoor dairy farms, where liquid and solid waste combine on floors.Aside from the fact that ammonia smells really bad and can be an irritant for humans and animals around it, ammonia can also contribute to something called eutrophication. Eutrophication is the process by which, in this case, ammonia goes into water sources and promotes the mass growth of algae and other organisms, throwing off ecosystems and sometimes choking waterways. Excess of algae on the surface of ponds and lakes can end up killing marine animals.The FDA this week sent its official approval of a drug called Experior, the first approved drug tasked with reducing gas produced by waste. According to studies conducted by both Elanco, the company that makes Experior, and others, Experior has no known health effects on cattle, with treated cattle showing about the same growth patterns and ailments as non-treated cattle. There are, of course, other solutions to the ammonia problem. Experior reduces ammonia production by 14 to 18 percent, according to its FDA filing. But other studies have been done in which farmers simply feed their cattle less nitrogen-containing protein—primarily soy—and those studies have shown that simply a better diet can reduce ammonia by up to 40 percent.
Human drugs flowing into the animal kingdom - Modern medicines are moving through sewage treatment systems and into aquatic insects and the animals that eat them, according to an environmental study in Australia that involved a Hudson Valley researcher.Tests of six Australian streams near the city of Melbourne found animals there contained high doses of painkillers, antidepressants and other drugs that had gotten into the water after passing through municipal sewer systems that are unequipped to remove them. "Stream life is swimming in a mixture of pharmaceuticals," "While this study was in Australia, there is no reason to think it would be any different in the Hudson River — or any other place where there are people and drugs." Rossi, along with Australian and Swedish researchers, examined caddisflies, spiders, and other insects, as well as platypus and brown trout, which are predators of such aquatic life in that region, for 98 different medical drugs between 2014 and 2015. They found 69 of the drugs.Chemicals were being taken up by insects that lived in the water, and then passed into the predators that ate the inspects, including spiders, trout and platypus.Results showed, for example, that brown trout in one creek were being exposed each day to the equivalent of a quarter of a daily human dose of antidepressants. In another location, a platypus eating its normal diet of aquatic insects was being exposed to half of the daily dose for antidepressants. The most commonly found drugs in the insects were tramadol, a form of synthetic opiate; codeine, an opiate painkiller; fluconazole, an anti-fungal drug; the high blood pressure medication metoprolol; and clomipramine, an antidepressant. "Our study is the first to show that this chronic drug pollution can concentrate in aquatic insects and move up food webs, in some cases exposing top predators to therapeutically-relevant doses,"
Neonicotinoid exposure impairs social behavior of bees, affecting colony health - Using a tiny, automated robotic platform to spy on bumble bees in their colonies, researchers have discovered yet another detrimental effect of neonicotinoid pesticides on these insects. As perhaps the most important pollinator, bees are critical to agricultural crop production and to the survival of most flowering plants on Earth. Concerningly, given their invaluable role, bees' numbers worldwide have declined in recent years. Neonicotinoid compounds -- the most widely used class of insecticides -- have been shown to greatly impact bees and are a likely culprit in contributing to the shrinking population of pollinator species. Amongst the most striking negative impacts of neonicotinoids is a reduction in colony size; however, how exposure disrupts the within-nest behavioral systems that impair colony growth remains elusive. To determine these effects, James Crall and colleagues used an innovative, automated robotic platform that monitored the behavior of workers in multiple bumble bee colonies. Crall et al. exposed some of the colonies to environmentally realistic concentrations of imidacloprid, a common type of neonicotinoid. Exposure to the neurotoxic pesticide resulted in measurable changes in worker bee behavior within the nest, where the workers were less active, less likely to feed and care for larvae, and more likely to be found towards the periphery of the nest. Interestingly, these behavioral effects differed greatly depending on the time of day, with worker inactivity and reduced nursing behavior being greater at night. In addition, an analysis of free-foraging colonies in the field demonstrated that imidacloprid exposure impaired colony thermoregulation. The results offer an explanation for the reduced sizes and increased mortality of neonicotinoid-exposed colonies, whose colony-sustaining behaviors are notably impacted by the chemical. In a related Perspective, Nigel Raine discusses the implications of Crall et al.'s study on improving future risk assessments of pesticide impacts on bees.
Too hot to bite: Tsetse flies dwindle as temperatures rise in Zimbabwe - Over the last decade, cattle farmers in the Zambezi Valley, in Zimbabwe's Mashonaland West province, have noticed an odd thing. Tsetse flies, once a major threat to their animals, have been slowly disappearing, resulting in fewer cattle deaths, they say. Researchers now think they know what is going on: Hotter weather, the result of climate change, is making it much harder for tsetse flies to thrive. A study published in the journal PLOS Medicine says that as temperatures have risen since the 1990s in the valley, tsetse fly numbers have plunged. Data collected over 27 years at Mana Pools National Park suggests that hotter conditions are making it harder for tsetse flies to survive. In 1990, researchers in the park captured more than 50 flies per animal each time they did a collection, the study noted. But by 2017, it took 10 catching sessions to find even one fly per animal. Since 1975, average daily temperatures in the park have risen by about 1 degree Celsius, with that increase reaching 2 degrees Celsius in the hottest month, November, the study said. That change suggests disease problems may decline as some long-suffering tsetse fly areas in Africa grow hotter - though they could surge in other new ones as the flies move, seeking cooler areas, Jennifer Lord, an author of the study, told the Thomson Reuters Foundation. Tsetse flies carry trypanosomiasis, a parasite that causes a disease called nagana in livestock and sleeping sickness in humans. The disease, which affects the nervous system, is a long-standing plague in Africa, causing fever, loss of appetite and in some cases death if untreated. Found in 36 sub-Saharan African countries, it is a particular problem in nations such as the Democratic Republic of Congo and the Central African Republic, according to the World Health Organization. Zimbabwe's Department of Livestock and Veterinary Services says nagana can severely hurt livestock production in areas where tsetse flies are present.
Changing temperatures improves corn yield in U.S. — for now -- The past 70 years have been good for corn production in the Midwestern U.S., with yields increasing fivefold since the 1940s. Much of this improvement has been credited to advances in farming technology, but researchers at Harvard University are asking if changes in climate and local temperature may be playing a bigger role than previously thought.In a new paper, researchers found that a prolonged growing season due to warmer temperatures, combined with the natural cooling effects of large fields of plants, have had a major contribution to improved corn production in the U.S.“Our research shows that improvements in crop yield depend, in part, on improvements in climate,” said Peter Huybers, professor of Earth and planetary sciences in the Department of Earth and Planetary Sciences (EPS) and of environmental science and engineering at the Harvard John A. Paulson School of Engineering and Applied Sciences (SEAS). “In this case, changing temperatures have had a beneficial impact on agricultural production, but there is no guarantee that benefit will last as the climate continues to change. Understanding the detailed relationships between climate and crop yield is important as we move toward feeding a growing population on a changing planet.” The research is published in the Proceedings of the National Academy of Sciences (PNAS). The researchers found that as temperatures increased due to global climate change, planting days got earlier and earlier, shifting by about three days per decade. Early planting means the corn has more time to mature before the growing season ends.There is also a second, more surprising trend that has benefited corn yields. Whereas the vast majority of temperatures have warmed over the last century, the hottest days during the Midwestern growing season have actually cooled. “Increasingly productive and densely planted crops can evaporate more water from leaves and soils during hot days,” said Nathaniel Mueller, former postdoctoral research fellow at the Harvard University Center for the Environment and co-author of the paper. “Widespread increases in rates of evaporation apparently help shield maize from extreme heat, cooling the surrounding area and helping to boost yields.”
GMO Potato Creator Now Fears Its Impact on Human Health --Of all the genetic engineers who have renounced the technology—Arpad Pusztai, Belinda Martineau, Thierry Vrain, John Fagan and Michael Antoniou, among others—because of its shortsighted approach and ability to produce unintended and potentially toxic consequences, Caius Rommens' story may be the most compelling.Rommens was director of research at Simplot Plant Sciences from 2000 to 2013 where he led development of the company's genetically engineered Innate potato. But over time, Rommens started to have serious doubts about his work and worried about potential health risks from eating the GMO potatoes, which are now sold in 4,000 supermarkets in the U.S.Rommens' concerns about the GMO potato led him to write a book, Pandora's Potatoes, which was recently published. The book is a case study on how a scientist's initial enthusiasm about genetic engineering turns to doubt and fear as he realizes the hazards the technology can create. I recently interviewed Caius Rommens about his work developing the GMO potato and the misgivings he now has about it.
Editing nature: Local roots of global governance -- Many envisioned environmental applications of newly developed gene-editing techniques such as CRISPR might provide profound benefits for ecosystems and society. But depending on the type and scale of the edit, gene-edited organisms intentionally released into the environment could also deliver off-target mutations, evolutionary resistance, ecological disturbance, and extinctions. Hence, there are ongoing conversations about the responsible application of CRISPR, especially relative to the limitations of current global governance structures to safeguard its use [(1, 2); see table S1]. Largely missing from these conversations is attention to local communities in decision-making. Most policy discussions are instead occurring at the national or international level (3, 4), even though local communities will be the first to feel the context-dependent impacts of any release. CRISPR gene editing and other related genetic technologies are groundbreaking in their ability to precisely and inexpensively alter the genome of any species (5). CRISPR-based gene drives hold particular import because they are designed to rapidly spread genetic changes—including detrimental traits such as infertility—through populations of sexually reproducing organisms, to potentially reach every member of a species. Villages in Burkina Faso are weighing the release of gene drive–bearing mosquitoes that could suppress malaria. Nantucket Island residents in the United States are considering the release of genetically engineered white-footed mice to deplete Lyme disease reservoirs. New Zealand communities are discussing the possibility of using genetic methods to eliminate exotic predators. But what if a gene drive designed to suppress an invasive species escaped its release site and spread to a native population? Or if a coral species gene edited to better adapt to environmental stressors dominated reef ecosystems at the expense of a diversity of naturally evolving coral species and the fish that depend on them (see the photo)? The gravity of these potential outcomes begs the question: Should humans even be meddling with the DNA of wild organisms? The absence of generally agreed on answers can be used to support calls for moratoria on developing and releasing genetically altered organisms, especially those with gene drives (6).
Drone caused bears distress in viral video, researchers say - CBC --A viral video of a baby bear and its mama clambering up a snowy slope was initially embraced as an inspirational story about perseverance — but researchers say it actually shows the animals being threatened by an intrusive drone. The video, which has been viewed more than 22.4 million times on Twitter, shows the mother brown bear and her cub climbing up a steep, snow-covered hill. The cub slips three times, but keeps climbing until it finally makes it to the top. The video was originally uploaded to YouTube by a company called ViralHog. Subsequent headlines dubbed the clip "cute," "adorable" and "proof you should never give up." But Clayton Lamb, a PhD candidate at the University of Alberta who studies grizzly populations, says the mother bear never would have led her cub over such treacherous terrain unless they were fleeing something — in this case, the loud, buzzing drone that was filming them. The person who shot the video is standing by his work, but Lamb is one of several scientists speaking out about how the footage was obtained. "Even though it does turn out good in the end, I do think there was a significant amount of risk posed to that cub," "Small cubs that time of year are only about the size of about a small dog and they're quite weak, so had it tumbled off that cliff it could have been severely injured."
Cancer-linked Chemicals Manufactured by 3M Are Turning Up in Drinking Water -- It was May 22, 2017, and the state health department wanted to give Mayor Myron Bailey a heads-up. It was about to set a new, lower level for a type of unregulated chemical found in Minnesota’s drinking water. It said there was no emergency, but stricter limits would better protect infants and young children. “I had a sinking feeling in my stomach,” Bailey recalled. He had known for years that per- and polyfluoroalkyl substances (or PFAS, pronounced “PEE-fas”), which don’t occur in nature, lingered in the water around Cottage Grove. 3M’s factory had been churning out some varieties since the 1950s for the water- and stain-repellant Scotchgard. 3M also sold its PFAS to other companies to make Teflon, outdoor gear, greaseproof food papers and firefighting foams. The company stopped using some kinds in 2002, but has since made others. And the same property that makes them so effective in consumer products—one of the strongest molecular bonds ever discovered—means they are almost impossible to get rid of and don’t break down in the environment. While the so-called “forever” chemicals had long been detected in most people’s bodies, research has shown how they accumulate and can take years to leave. Even when excreted through urine, they persist. Scientists have tracked them in biosolids and leafy greens like kale. Recent studies have linked widely used PFAS, including the varieties called PFOA and PFOS, to reduced immune response and cancer. That new evidence had stirred Minnesota’s health department to act. “There was always a perception in our community that cancer was caused by the drinking water,” Bailey said, but after the state’s announcement, “people freaked out.” He got dozens of angry calls and social-media posts a day. One woman suggested the water had killed her dog. Another asked if it was safe to breastfeed her baby. Water tests show that 110 million Americans have levels of PFAS in their water that the most cautious scientists call unsafe, according to the Environmental Working Group, a non-profit organization that advocates for public health issues. At the same time, new studies show how the chemicals can cause harm even at tiny doses.
Shipping industry cracks down on plastic waste - Progress might be mixed on curbing air pollution from ocean-going ships, but it's not all bad news. Business Green reports that the International Maritime Organization has adopted a new plan to crack down on plastic pollution and other litter escaping from ships into the oceans.This is great news. Just like Jamaica banning single-use plastics, or ferry companies ditching the straw, action on plastic waste is most urgent in places where that waste is most likely to escape into the marine environment. And it doesn't take a genius to realize that ships would be ground zero on this front. Among the measures being proposed are efforts to beef up waste processing capacity at ports, initiatives to mark and track fishing gear to prevent dumping and "ghost nets," efforts to report shipping container losses, as well as a study to understand the sources of marine litter from boats and develop ways to prevent it. Every single one of these efforts should be welcomed. But it doesn't let shipping off the hook for its gigantic carbon footprint. It might be time to get serious about bringing back sail power too...
Plastic Watch: Five Flaws in the EU’s Single-Use Plastics Plan - Jerri-lynn Scofield - The European Parliament late last month overwhelmingly approved a plan to ban certain types of single-use plastic, recycle others, and make producing companies more accountable for what happens to such waste. The European Council may approve this measure as soon as this month, with the directive becoming law by the end of this year, according to the Guardian, in European parliament approves sweeping ban on single-use plastics. The Independent’s account foreshadows possible problems with implementing the directive in European Parliament votes to ban single-use plastics in bid to tackle pollution:The regulations will now have to be approved in talks with member states, some of which are likely to push back against the strict new rules.Under the directive, single use items such as ballon sticks, cotton bud sticks, cutlery, plates, straws, and stirrers will be banned be 2021, while 90% of plastic bottles would be recycled by 2025.For other items, e.g., beverage cups, food containers, plastic bags, packets and wrappers, and wet wipes and sanitary towels – greater responsibility will be placed on producers to redesign products and mitigate plastics use. Measures would also require tobacco companies to cover collection and processing of cigarette butts – reducing those entering the environment by 80% over the ensuing 12 years – and producers of fishing gear to collect 50% of lost or abandoned fishing gear each year, according to the Independent. The fishing gear provision would have the most significant impact – if actually implemented and enforced – as abandoned fishing gear comprises about 50% of the Great Pacific Garbage Patch, which is three times the size of France (see my previous post for further details, Plastic Watch: Great Pacific Garbage Patch Grows). While this EU action is certainly better than nothing– and a step beyond what countries including the United States and Japan have thus far failed to do– a bit of scrutiny suggests ecstatic celebration may be premature.
90 Belugas, 11 Orcas Trapped in 'Whale Jail' off Russian Coast -- Ninety belugas and 11 orcas are being held in tiny enclosures described by media reports as "whale jails" off Russia's Pacific east coast.An investigation has been launched at the site near city of Nakhodka, where some of the whales have been contained since July, CBS News reported.In the video below, a crane lifts a whale into an onshore tank in preparation for transport to an unknown destination.It's believed that the cetaceans will be sold to Chinese aquariums, despite the fact that it is illegal to capture wild whales except for scientific and educational purposes. Commercial whale hunting has been banned worldwide since 1982. Killer whales can reportedly fetch up to $6 million at marine parks in China. Из «китовой тюрьмы» в Приморье вывозят млекопитающих www.youtube.comCiting Russian newspaper Novaya Gazetta, The Telegraph reported that the four companies that are renting the enclosures exported 13 orcas to China between 2013 and 2016. The companies allegedly involved were given permission to capture 13 orcas in the wild.A prosecutor is investigating whether the orcas and belugas were actually captured for scientific or educational purposes. The conditions of their confinement as well as the legality of their holding pens are also being examined, The Telegraph said."The holding pens … are not very large—I'd say no more than 30 to 40 feet on a side, and probably only about 10 to 20 feet deep," Naomi Rose, a marine mammal scientist at the Animal Welfare Institute, told The Dodo. "If they stay there through the winter, ice can form on the top of the water and they have to break through to breathe."Greenpeace Russia described the conditions as "torture" and said that capturing the marine mammals could threaten the species' survival."Catching them at this tempo, we risk losing our entire orca population," Greenpeace Russia research coordinator Oganes Targulyan said to The Telegraph. "The capture quota now is 13 animals a year, but no one is taking into account that at least one orca is killed for every one that is caught." The orca population in the nearby Kamchatka region has decreased so drastically that they were listed asendangered this year.
Arctic Ship Traffic Threatens Narwhals and Other Extraordinary Animals - As climate change warms the Arctic, its sea ice cover is declining. Every year, floating sea ice in the Arctic thins and melts in spring and summer, then thickens and expands in fall and winter. This year scientists estimate that the Arctic sea ice minimum in late September covered 1.77 million square miles, tying the sixth lowest summertime minimum on record. With less sea ice, there is burgeoning interest in shipping and other commercial activity throughout the Northwest Passage—the fabled route that links the Atlantic and Pacific oceans, via Canada's convoluted Arctic archipelago—as well as the Northern Sea Route, which cuts across Russia's northern seas. This trend has serious potential impacts for Arctic sea life. In a recent study, we assessed the vulnerability of 80 populations of Arctic marine mammals during the "open-water" period of September, when sea ice is at its minimum extent. We wanted to understand the relative risks of vessel traffic across Arctic marine mammal species, populations and regions. We found that more than half (53 percent) of these populations—including walruses and several types of whales—would be exposed to vessels in Arctic sea routes. This could lead to collisions, noise disturbance or changes in the animals' behavior.
Wars over fish increasingly likely as countries use military force to protect ‘critical commodity’ - Every fifth fish caught worldwide is done so illegally, the United Nations Food and Agriculture Organization says. Meanwhile, sea-bordering countries are using military force to protect what they see as critical national assets. With growing demand for the resource and scarcer quantities, the fight for fish is likely to intensify. There are similarities between the world's reliance on oil and a comparable dependence on fish. "Oil is a very conflict-ridden sector," Johan Bergenas, a senior director of public policy at Washington DC-based technology firm Vulcan, tells Blueprint For Living. "I believe there are some numbers that say 25 to 50 per cent of all conflicts, in one way or another, are driven by the lack of or access to oil." Through his research, Mr Bergenas has identified parallels between oil and fish resources. "There is a concentrated supply. The Middle East has nearly half the world's supply of recoverable crude," says Mr Bergenas. "Similarly, the central Pacific has 60 per cent of the world's tuna which is a highly pursued commodity."This concentration of supply is likely to drive conflict. "This is a critical commodity for the human condition", says Mr Bergenas.
Minorities Are Most Vulnerable When Wildfires Strike in U.S., Study Finds - The study, which appears in the journal PLoS One this month, suggests that people of color, especially Native Americans, face more risk from wildfires than whites. It is another example of how the kinds of disasters exacerbated by climate change often hit minorities and the poor the hardest.Floods, hurricanes and fires may be natural phenomena, Mr. Davies said, “but what makes them dangerous, what turns them into the disaster, is the social and political factors.”Mr. Davies, working with researchers at the Nature Conservancy, a conservation nonprofit, began by identifying which regions in the United States were most at risk for severe wildfires. Their results included the Western United States, but also parts of the Southeast where fires will become more common under climate change.They found that 29 million people in the United States live in high-risk locations. Most of them are white and not poor. But the researchers then used census data to identify 12 million people with characteristics that made them especially vulnerable to the effects of wildfires. Mr. Davies called those socioeconomic circumstances “adaptive capacity.”“They are things that would make someone more vulnerable and less able to adapt to a wildfire if it occurred,” he said.The people with the greatest vulnerability were disproportionately people of color. But it was not because these people were living in places that were more likely to burn in a fire.Instead, the factors included things like access to a car — critical for evacuations — and whether the people spoke English fluently. In 2017, as three fires raged across California’s Napa County, most emergency messages were delivered in English even though 30 percent of Napa’s population identifies as Hispanic.
Butte fire grows to 18,000 acres as residents abandon cars to flee on foot - An uncontrolled wildfire raced through the Butte County community of Paradise Thursday afternoon, destroying much of the downtown and sending residents fleeing on foot as flames devoured homes, businesses and a local church. Fueled by winds of up to 50 mph, the fire grew from 1,000 acres to 18,000 acres by about 2:30 p.m., with Cal Fire’s Butte unit reporting it as zero percent contained. Desperate residents abandoned their vehicles as they fled the foothill town, forcing emergency personnel to push cars off the few roads leading to safety. Firefighters also reported transporting burn victims who had tried to flee the fire on foot. “Don’t tell anyone to get out of their cars anymore, because they’re all on foot,” a firefighter told emergency dispatchers shortly after noon in audio captured on the scanner site Broadcastify.com. Several homes were reportedly on fire and the town’s hospital and at least one nursing home were evacuated. A thick, dark plume of smoke filled the sky, shadowing Chico and much of Butte County as if a thunderstorm were on its way. Cal Fire spokesman Bryce Bennett said the fire could enter the city limits of Chico, about six miles from Paradise, as the blaze churned through dry grass and steep canyons. “Right now, Mother Nature is in charge,” he said. Red circles on this live-updating map are actively burning areas, as detected by satellite. Orange circles have burned in the past 12 to 24 hours, and yellow circles have burned within the past 48 hours. Yellow areas represent the fire perimeter.
Tens of thousands flee fast-moving Northern California fire - Tens of thousands of people fled a fast-moving wildfire Thursday in Northern California, some clutching babies and pets as they abandoned vehicles and struck out on foot ahead of the flames that forced the evacuation of an entire town and destroyed hundreds of structures. Everyone in Paradise, a community of 27,000 people about 180 miles (290 kilometers) northeast of San Francisco, was ordered to get out. The extent of the injuries and damage was not immediately known. Butte County CalFire Chief Darren Read said at a news conference that two firefighters and multiple residents were injured. As she fled, Gina Oviedo described a devastating scene in which flames engulfed homes, sparked explosions and toppled utility poles. "Things started exploding," Oviedo said. "People started getting out of their vehicles and running." At a late afternoon news conference, Read said he had reports of several hundred destroyed structures in Paradise, but he cautioned that officials had not been able to assess yet. He said officials won't have an exact count until they can get into the area. An Associated Press photographer saw dozens businesses and homes leveled or in flames, including a liquor store and gas station. "It's a very dangerous and very serious situation," Butte County Sheriff Kory Honea said. "I'm driving through fire as we speak. We're doing everything we can to get people out of the affected areas." Acting California Gov. Gavin Newsom declared a state of emergency in the area. Shari Bernacett said her husband tried to get people to leave the Paradise mobile home park they manage. "The whole hill's on fire. God help us!" she said before breaking down crying. She and her husband grabbed their dog, jumped in their pickup truck and drove through flames before getting to safety, she said. Terrifying videos posted on social media, showed cars driving along roads that looked like tunnels of fire with flames on both sides of the road. Concerned friends and family posted frantic messages on Twitter and other sites saying they were looking for loved ones, particularly seniors who lived at retirement homes or alone.
Officer: California town devastated by fire - A police officer who helped residents escape a wildfire bearing down on a Northern California town says the town has been devastated. Officer Mark Bass said he returned to the town of Paradise on Thursday to find offices, large stores and restaurants leveled or burning. The town of about 27,000 people is 180 miles (290 kilometers) northeast of San Francisco. Bass is an officer in the nearby town of Chico. Another police officer in Chico, John Barker, said many elderly people live in Paradise and some are immobile. People posted photos on Twitter of missing seniors. Barker said he was briefly trapped by fire while trying to get people out, with flames across the road in front of him and behind him. Officials are describing a harrowing effort to rescue patients from a hospital in a Northern California town ravaged by wildfire. Butte County Supervisor Doug Teeter said he was on a bulldozer that pushed cars out of the way Thursday to get to the Adventist Health Feather River Hospital in the town of Paradise. When he arrived there, patients were out in the front of the emergency room, where the roof had caught fire. The town of about 27,000 people is 180 miles (290 kilometers) northeast of San Francisco. He said sheriff's deputies helped patients evacuate. Butte County Sheriff Kory Honea said some people at the hospital were trapped in a tunnel. Hospital spokeswoman Jill Kinney said all patients were evacuated.
California: tens of thousands evacuated as wildfire explodes in size -- Tens of thousands of people were ordered to evacuate a fast-moving wildfire that exploded in size Thursday, threatening several northern California communities and forcing panicked residents to race to help neighbors and drive through walls of flames to escape. The blaze destroyed an unknown number of structures and injured some civilians, but the extent of their injuries was not immediately known, said California department of forestry and fire protection Capt John Gaddie. As people fled in cars, some abandoned their vehicles, running from encroaching flames as they held babies and pets in their arms, said Gina Oviedo, who described a devastating scene as she evacuated the town of Paradise. Flames were engulfing homes, utility poles were crashing down and things were exploding, she said.Fire officials were working on a plan to rescue patients from a hospital after officials tried to evacuate them but had to turn back because of gridlocked traffic.“It’s a very dangerous and very serious situation,” the Butte county sheriff, Kory Honea, told the Associated Press. “I’m driving through fire as we speak. We’re doing everything we can to get people out of the affected areas.”He confirmed reports that evacuees had to abandon their vehicles as they fled the scene.“We’re getting them on other vehicles with room. We’re working very hard to get people out. The message I want to get out is if you can evacuate, you need to evacuate,” The wildfire was reported at 6.30am, Rick Carhart, a Cal Fire spokesman, said. Within roughly six hours, the fire had grown to more than 26 square miles (69 square kilometers), said Gaddie.
Camp Fire destroys Paradise, kills at least 5 in Butte County California — Homes were swallowed by the raging flames. Cars and trucks were left melting in the road. And thousands of residents of this remote Northern California town fled for their lives as a fast-moving wildfire roared across Butte County, about 90 miles north of state capital Sacramento, in what was quickly declared a state emergency.The Camp Fire has left a horrifying trail of death and destruction in its wake. The Butte County Sheriff’s Office said Friday that five people were killed in Paradise, their bodies found in vehicles that had been overcome by the flames. There have been additional reports of deaths in the fire zone, but those have not yet been confirmed, the sheriff’s office said, because “the fire is still active, and there are many hazards in areas where fatalities have been reported.”By early Friday morning, nearly 110 square miles had been burned in a fire that was 5 percent contained, officials said. At least 2,000 structures were destroyed, with thousands more threatened and more than 50,000 people were evacuated across the region.“Pretty much the community of Paradise is destroyed,” Cal Fire Capt. Scott McLean said at a news conference, according to the Associated Press. “It’s that kind of devastation.”In addition to Paradise, the nearby communities of Magalia, Pulga, Concow, Butte Valley and Butte Creek Canyon were also under evacuation orders. Marc Kessler, a 55-year-old science teacher at one of the Paradise’s middle schools, said the smoke was rising from the Sierra Nevada foothills when he arrived at work on Thursday. Strong winds and low humidity quickly brought the flames into the small forest town.“The sky turned black; you couldn’t tell it was daytime,” he told The Washington Post. "It was raining black pieces of soot, coming down like a black snowstorm and starting fires everywhere. Within minutes, the town was engulfed.” The raging fire has injured an undisclosed number of residents as well as three firefighters, officials said.Kessler said authorities told teachers to forget seat belt laws and start piling the 200 or so middle-school students who had showed up for class Thursday morning into their personal vehicles. Some frantic parents showed up to get their children, he said, and bus drivers drove through flames to help save children’s lives.
We Were Engulfed in Flames’: Rapid Wildfire Devastates Entire Town of Paradise, CA - A wind-driven wildfire broke out in Northern California at 6:30 a.m. Thursday morning and took off at a rate of around 80 football fields per minute, covering 18,000 acres by 2 p.m., CNN reported. The Camp Fire went on to engulf the town of Paradise, home to 27,000 people, forcing evacuations and damaging thousands of buildings, the Associated Press reported. "Pretty much the community of Paradise is destroyed, it's that kind of devastation," Cal Fire Captain Scott McLean told the Associated Press late Thursday. "The wind that was predicted came and just wiped it out."Fire department workers told The San Francisco Chronicle that there were reports of deaths, and at least two firefighters were injured. Acting California Governor Gavin Newsom, filling in for Governor Jerry Brown while he is out of state, declared a state of emergency in Butte County, where the fire erupted. "We were engulfed in flames," Butte County Supervisor Doug Teeter told The San Francisco Chronicle. "I don't know what we are coming back to after this. Probably a moonscape. As we drove out, homes were burnt to the ground."The fire was fueled by "red flag" conditions combining high wind and low humidity, which are expected to persist in the area till Friday evening, the Associated Press reported. But longer-term climate change is also to blame, as drought makes ground-level vegetation more likely to catch fire."Basically, we haven't had rain since last May or before that," Butte County CalFire Chief Darren Read told the Associated Press. "Everything is a very receptive fuel bed. It's a rapid rate of spread." The San Francisco Chronicle summed up the context surrounding the Camp Fire:The intensity of the Camp Fire's surge through Paradise drew immediate comparisons to theTubbs Fire, which wiped out whole neighborhoods in and around Santa Rosa, and the Carr Fire,which blitzed Redding this year. Gov. Brown and others have raised alarm about the nearly year-round danger in the state, but no broad solutions have surfaced. Twice in the past two years, fires have set the state record for size. In a testament to the tragic normalcy of these events, several fires also broke out in Southern California. Among them were the Hill Fire and Woolsey Fire, which both ignited in Ventura County Thursday afternoon and could be further fueled by the Santa Ana winds, AccuWeather reported.
Paradise lost: California wildfire is the most destructive in state history - California's Camp Fire, which largely destroyed the town of Paradise, is now the most destructive wildfire in state history in terms of property damage. According to officials, the fire has destroyed at least 6,713 homes, businesses and other structures, while killing multiple people. Both the property count and death toll are likely to rise as officials comb through the wreckage. This fire surpasses the damage from the previous record-holder, which was the deadly Tubbs Fire, which devastated Santa Rosa in the state's wine country just 13 months ago. The fire sped through the town, located about 90 miles north of Sacramento, so quickly on Thursday night into Friday morning that some residents had no time to escape. Those who did make it were forced into such hasty evacuations they they left valuables and in many cases, pets, behind. Paradise Vice Mayor Greg Bolin told the LA Times that he has been informed that up to 90% of his town has been destroyed. “The town is gone,” he said. Between the lines: The fire now measures well over 100,000 acres in size and has been fueled by a combination of unusually dry weather and powerful, desiccating Santa Ana winds, at times blowing at hurricane force (75 miles per hour). The winds made the flames impossible to anticipate and control, giving firefighters no choice but to help residents flee, rather than beat the flames back to save the community. The Camp Fire that tore through Paradise is not an anomaly. California is experiencing one of its worst wildfire seasons on record, having had its hottest month in state history in July, along with the largest fire the state has ever recorded. According to Aon Insurance meteorologist Steve Bowen, 7 of the top 20 most destructive fires in the state have occurred since October 2017.
Woolsey Fire Destroys 150+ Homes; 250,000 Evacuated — A 35,000-acre brush fire made a destructive, two-county march toward the Pacific Ocean Friday, destroying at least 150 homes and forcing the evacuation of more than 250,000 people. Powered by Santa Ana winds and dry air, the Woolsey Fire, which erupted Thursday afternoon in Ventura County before it raced into Los Angeles County, chewed its way through brush and into neighborhoods of Westlake Village and Malibu. The fire remained at zero containment as of Friday evening. The L.A. County Fire Dept. confirmed reports of a critical burn patient in the 33000 block of Mulholland in Malibu Friday evening. Officials said they were not immediately able to get to the patient due to downed powerlines on the road. At least 75,000 homes in Los Angeles and Ventura counties were under evacuation orders due to the Woolsey Fire, which was one of two wildfires burning in the region – the other being the 10,000-acre Hill Fire burning in Newbury Park. Just after 5 a.m., the blaze jumped the south side of the 101 Freeway at Chesebro Road near Calabasas. In response, California Highway Patrol shut down a four-mile stretch of the 101 Freeway from Las Virgenes Road to Kanan Road. “Early this morning, as the fire transitioned through Agoura Hills, the fire jumped the 101 Freeway right around Liberty Canyon, mid-slope, caught wind, and became quickly established at where we were at today,” L.A. County Deputy Fire Chief David Richardson told reporters at a morning news conference. The fire was burning south of Mulholland Highway. The entire city of Malibu was under an unprecedented mandatory evacuation Friday, plus areas south of the 101 Freeway, from the Ventura line to Malibu Canyon. “These winds due have the potential to push this fire all the way to Malibu … If you live in Malibu, I would get out,” CBS2 Meteorologist Danielle Gersh said. Residents were advised to use Pacific Coast Highway to evacuate, and to avoid using canyon roads. All four lanes of PCH were opened for southbound traffic at 12:45 p.m. Complicating matters were the traffic signals that were knocked out of service. Drivers were being advised to use the 405 Freeway up to the 118 Freeway in order to get around the backup. Evacuations were also issued north of the 101 Freeway from Valley Vista to Reyes Adobe in the areas of Agoura Hills, Calabasas and Westlake Village. The fire expanded into West Hills in the early evening, prompting a mandatory evacuation in the neighborhood.
Woolsey fire explodes to 35,000 acres, destroying homes in Malibu and pushing into San Fernando - After forcing evacuations in Malibu, Topanga Canyon and hillside communities near the water, the Woolsey fire plowed eastward Friday night into the San Fernando Valley community of West Hills, posing new dangers to residents, homes and weary firefighters. At least four homes had caught fire near Valley Circle Boulevard and Stagg Street in the far northwestern reaches of the Valley, marking the first major incursion of the wind-driven fire into the city of Los Angeles. The fire barreled into Malibu on Friday afternoon with destructive force, burning dozens of hillside homes in its march to the Pacific Ocean and more than doubling in size from 14,000 acres to 35,000 acres in the span of several hours. The fire destroyed houses in Oak Park, Thousand Oaks, Bell Canyon and other Ventura County communities and showed no signs of slowing as evacuation orders and anxiety continued to spread. “We know we have a significant number of structures lost,” Los Angeles County Fire Chief Daryl Osby said of damage in Ventura County and Malibu. “I would estimate at least 100.” That number was sure to rise as flames continued to claim homes into the evening and, for the first time, moved into the west San Fernando Valley, a densely populated area. The Los Angeles Police Department issued a mandatory evacuation order early Friday evening, covering homes in West Hills west of Valley Circle Boulevard between Vanowen Street and Roscoe Boulevard. Officers drove through the neighborhood with lights and sirens, urging residents to leave, officials said.. Officials in Malibu warned residents at 12:30 p.m. to leave immediately as flames began burning out of control toward neighborhoods. By mid afternoon, the evacuation orders expanded to include Topanga Canyon. Officials turned Pacific Coast Highway into a southbound evacuation route to manage the massive outflow from affected coastal areas.
California wildfires: Malibu homes burn as death toll climbs to nine - At least nine people have died in the most destructive wildfires ripping through north and south California.More than 250,000 people have been forced to flee their homes to avoid three major blazes in the state.Firefighters were powerless in stopping a wildfire destroying the northern town of Paradise, where 35 people are missing.A raging wildfire swept into the southern beach resort of Malibu - home to many Hollywood stars - on Friday.Among the towns under evacuation orders is Thousand Oaks, where a gunman killed 12 people in a rampage on Wednesday.Authorities say the Camp Fire in the north and the Woolsey Fire and Hill Fire in the south are being fanned by strong winds and dry forests."The magnitude of the destruction of the fire is unbelievable and heartbreaking," said Mark Ghilarducci, of the California governor's office.President Trump has responded by blaming what he called gross mismanagement of the forests and warned of funding cuts. Meteorologists have warned that dangerous conditions may continue well into next week.
California wildfires kill nine, drive 150,000 from their homes -- Early Thursday morning, a small fire started along the Feather River in Northern California. Due to high winds and dry conditions, the fire spread rapidly to the west, and by Friday evening had burned 90,000 acres and erased the town of Paradise (population 26,000) from the map. The Camp Fire, named after the creek where it started, forced the entire city to flee on short notice, creating traffic jams and chaos.Families stuck in traffic had to flee the rapidly approaching flames on foot. The road to Paradise is now littered with the burned-out remains of abandoned cars. So far, nine people are confirmed dead in this catastrophe. Five of the victims were trapped in cars that were overtaken by the fire.Many more people are reported missing. A spokesman for the California Department of Forestry and Fire Protection (Cal Fire) said of the first five, who were found on Friday, that “the only reason they found the five is because they were still on the road.” So far, search and rescue teams have been blocked by the flames from systematic work in the destroyed town. Social media are flooded with the posts of families looking for relatives they have not been able to contact.The Camp Fire is now threatening Chico (population 93,000), the largest city in Butte County. Cal Fire estimates that the Camp Fire has destroyed at least 6,700 structures and threatens 15,000 more. It is currently only 5 percent contained, and officials say they do not expect full containment until the end of the month. Butte County officials made the disastrous decision Thursday not to send a wireless emergency alert to all the cell phones in Paradise. Instead, they used a list of those who had opted to receive emergency alerts or who had landlines. As the fire began rapidly to spread into the city, many were left unaware, dropping their kids off at school and heading to work.
Trump threatens to withhold federal payments --President Donald Trump is threatening to withhold federal payments to California, claiming its forest management is “so poor.” Trump says Saturday via Twitter that “there is no reason for these massive, deadly and costly fires in California.” Trump says “billions of dollars are given each year, with so many lives lost, all because of gross mismanagement of the forests. Remedy now, or no more Fed payments!” The comments were Trump’s first about massive wildfires, including a blaze that incinerated most of the Northern California town of Paradise and killed at least nine people. Wildfires also raged in Southern California, including the town of Thousand Oaks, where a gunman days earlier killed a dozen people at a local bar. Trump earlier issued an emergency declaration providing federal funds to help firefighters. 9:20 p.m.: A Southern California wildfire continues to burn homes as it runs toward the sea. But winds that drove the ferocious flames have eased. Forecasters say the 50-mph gusts won’t return until Sunday, and hard-pressed firefighters hope to use that respite to make progress in halting the spread of flames. Even so, TV reports show homes, palm trees and even power poles erupting in flames. The Woolsey fire and smaller Hill blaze have destroyed more than 150 homes and prompted evacuation orders for about 250,000 people from Thousand Oaks northwest of Los Angeles to the celebrity enclave of Malibu. .
Watch- Yacht-Apocalypse - Storm Slams Italy, Destroys Superyachts --Last week, an unprecedented amount of rain and life-threatening wind battered parts of the Mediterranean over the course of several days, causing massive amounts of damage to superyachts and infrastructure in yachting hotspots across France, Italy, and Spain.According to Superyacht News, one of the hardest hit regions by the storm was the port town of Rapallo, located on the Italian Riviera coastline. The storm caused a marina's breakwater to collapse, which then allowed 10 meter high waves to enter the unprotected port.Italian news agency ANSA said 180 yachts were destroyed in the storm, including many superyachts, and one boat belonging to former Prime Minister Silvio Berlusconi.Local media outlets said the port of Rapallo in the northern region of Liguria looks like an “apocalyptic” sight, with luxury yachts half-sunk, damaged or leaning to the side The insurance implications of the storm damage to yachts across the Mediterranean could be massive. Paul Miller, director of underwriting at Hiscox, told Superyacht News that there would be salvage and recovery operations starting in November to remove the damaged vessels.Yacht-apocalypse comes as eleven people were reportedly killed as the storm left many coastal areas in Italy badly damaged. Footage emerged of tourist walking in Venice with flood waters up to their waist, it was the highest level of water since 2008.
Collapsed Lao dam ‘was built on a sinkhole’ - The site of a tragic dam collapse in southern Laos three months ago was geologically unsuitable for such a project, an American engineer has claimed.Richard Meehan is an MIT-trained engineer who teaches at Stanford University in the United States, who has experience in designing and building dams in northeastern Thailand. Meehan recently published a diagnosis on the Xe-Pian Xe-Namnoy dam failure. The disaster in Attapeu province in southern Laos is believed to have killed many hundreds of people, although the official death toll is just 43 with 28 others missing.On the evening of July 23, half a dozen villages below a western ‘saddle dam’ of the Xe-Pian Xe-Namnoy project were swamped in a tidal wave of mud and water. Environmentalists in Thailand monitoring the spate of dam building in Laos suspect at least 800 people were killed.They allege the communist government in Vientiane has kept the true scale of the disaster under wraps because it would jeopardize dozens of other dams envisaged under its plan to be the “Battery of Southeast Asia.” Meehan said he used space technologies and information about local soils to complete an assessment of the dam failure, which is available online at Stanford’s Blume Earthquake Engineering Center.
Large hydropower dams 'not sustainable' in the developing world - A new study says that many large-scale hydropower projects in Europe and the US have been disastrous for the environment. Dozens of these dams are being removed every year, with many considered dangerous and uneconomic.But the authors fear that the unsustainable nature of these projects has not been recognised in the developing world.Thousands of new dams are now being planned for rivers in Africa and Asia. Hydropower is the source of 71% of renewable energy throughout the world and has played a major role in the development of many countries. But researchers say the building of dams in Europe and the US reached a peak in the 1960s and has been in decline since then, with more now being dismantled than installed. Hydropower only supplies approximately 6% of US electricity.Dams are now being removed at a rate of more than one a week on both sides of the Atlantic. The problem, say the authors of this new paper, is that governments were blindsided by the prospect of cheap electricity without taking into account the full environmental and social costs of these installations. More than 90% of dams built since the 1930s were more expensive than anticipated. They have damaged river ecology, displaced millions of people and have contributed to climate change by releasing greenhouse gases from the decomposition of flooded lands and forests.
Rainforest destruction from gold mining hits all-time high in Peru - Small-scale gold mining has destroyed more than 170,000 acres of primary rainforest in the Peruvian Amazon in the past five years, according to a new analysis by scientists at Wake Forest University's Center for Amazonian Scientific Innovation (CINCIA). That's an area larger than San Francisco and 30 percent more than previously reported. "The scale of the deforestation is really shocking," The scientists at CINCIA, based in the Madre de Dios region of Peru, have developed a new data fusion method to identify areas destroyed by this small- or artisanal-scale mining. Combining existing CLASlite forest monitoring technology and Global Forest Change data sets on forest loss, this new deforestation detection tool is 20-25 percent more accurate than those used previously. Both CLASlite and the Global Forest map use different kinds of information from light waves to show changes in the landscape. "Combining the two methods gives us really good information about the specific kind of deforestation we're looking for," said Miles Silman, associate director of science for CINCIA and director of Wake Forest's Center for Energy, Environment, and Sustainability (CEES). Silman has researched biodiversity and ecology in the Western Amazon and Andes for more than 25 years. Artisanal-scale gold mining has been hard to detect because its aftereffects can masquerade as natural wetlands from a satellite view. But the damage is extensive. Small crews of artisanal miners don't expect to hit the mother lode. Rather, miners set out to collect the flakes of gold in rainforest. "We're not talking about huge gold veins here," Fernandez said. "But there's enough gold in the landscape to make a great deal of money in a struggling economy. You just have to destroy an immense amount of land to get it." To get the gold, they strip the land of trees or suck up river sediment, and then use toxic mercury to tease the precious metal out of the dirt. The results are environmentally catastrophic.
San Andreas Fault Line- An Unstoppable Geyser Of Mud -- An unstoppable geyser of mud is continuously pouring from the San Andreas fault line and slowly creeping across California. The troublesome mud in California’s Imperial County has caused local authorities to declare it an emergency earlier this year. It’s called the Niland Geyser, according to Science Alert, and it’s exactly that, a geyser of bubbling mud. But there’s a strange twist – this menacing puddle has been slowly creeping across the ground, to the point where it’s now threatening railroad tracks and a state highway. The Niland Geyser had first appeared in California in 1953 but it sat around without incident for decades. Then, around 11 years ago, things began to change. The geyser started moving across the dry ground at a glacial pace. But now, suddenly, things are starting to get serious where the mud geyser is concerned. In the last six months, the geyser’s pace has picked up considerably. In just a few months, the Niland Geyser’s mud has traveled 18.3 meters (60 feet). It traveled another 18 meters in a single day – bringing it ever closer to Union Pacific’s railway tracks, State Route 111, a petroleum pipeline, and some fiber-optic telecommunications lines. The mud has so far traveled roughly 73 meters (240 feet) from where it all began a decade ago. The Los Angeles Times called the mysterious mud geyser a “slow-moving disaster.” However, U.S. Geological Survey geophysicist Ken Hudnut, who visited the moving spring in July, has said there’s no evidence that this is a sign that the “Big One” is approaching. The spring in question is actually only about 80 degrees Fahrenheit, Hudnut said. It’s bubbling not from boiling water, but carbon dioxide being created from deep underground the earth’s surface, according to reporting by the Los Angeles Times. Union Pacific has even built a 100-foot long wall of large boulders and steel more than 75 feet deep in the earth in an effort to protect the railroad. Union Pacific has been forced to build temporary tracks to avoid running trains over land impacted by the spring. Trains are now moving more slowly through the area, according to the company. The railroad may need to consider more permanent solutions in the very near future as well, such as building a bridge to bypass potentially unstable land, a company spokesman said.
Stilling- The curious case of land wind speed decline - All over the world, the wind is slowing. Bit by bit, low-level land wind speeds have been decreasing since reliable records began in the 1970s. It is called "the stilling". Researchers eventually realised a decrease in pan evaporation rates was due to a decrease in wind speeds. Theories abound as to why wind speeds have steadily decreased, but nobody yet knows for sure. An ongoing program, funded by the European Union, is investigating the potential effects of the phenomenon. The decline was silently sneaking through under the radar until Australian National University professor Michael Roderick and his colleagues made a mistake. They noticed that the pan evaporation rates in the Northern Hemisphere were going down — not what you would intuitively expect in a warming world. They concluded it must have been because of increased pollution or potentially increased cloud cover blocking the sun. But they were missing something. "Shortly after doing that work I was asked what was happening in Australia and I didn't know, to my embarrassment," Professor Roderick said. When he did look at pan evaporation rates in Australia, they turned out to be decreasing like the rest of the world. This threw a major spanner in the works, because if increased pollution alone was to blame, the evaporation rates in relatively clean Australia would not have been affected. Researchers were forced to look at other potential culprits.The key processes that affect how water evaporates are the amount of sunlight, the temperature, humidity, and wind speed.After going through mountains of records, Professor Roderick worked out it must have been the wind. He found that wind speeds over land had been decreasing since the 1970s.
Global Warming Is Messing with the Jet Stream. That Means More Extreme Weather - Greenhouse gases are increasingly disrupting the jet stream, a powerful river of winds that steers weather systems in the Northern Hemisphere. That's causing more frequent summer droughts, floods and wildfires, a new study says.The findings suggest that summers like 2018, when the jet stream drove extreme weather on an unprecedented scale across the Northern Hemisphere, will be 50 percent more frequent by the end of the century if emissions of carbon dioxide and other climate pollutants from industry, agriculture and the burning of fossil fuels continue at a high rate. In a worst-case scenario, there could be a near-tripling of such extreme jet stream events, but other factors, like aerosol emissions, are a wild card, according to the research, published today in the journal Science Advances.The study identifies how the faster warming of the Arctic twists the jet stream into an extreme pattern that leads to persistent heat and drought extremes in some regions, with flooding in other areas.The researchers said they were surprised by how big a role other pollutants play in the jet stream's behavior, especially aerosols—microscopic solid or liquid particles from industry, agriculture, volcanoes and plants. Aerosols have a cooling effect that partially counteracts the jet stream changes caused by greenhouse gases, "The aerosols forcing was a bit of a surprise to us," . "Those emissions are expected to decrease rapidly in the mid-latitude regions in the next 10 to 30 years" because of phasing out of pollution to protect people from breathing unhealthy air. If aerosol emissions drop rapidly, as projected, these regions would warm faster.
Ozone layer finally healing after damage caused by aerosols, UN says The ozone layer is showing signs of continuing recovery from man-made damage and is likely to heal fully by 2060, new evidence shows. The measures taken to repair the damage will also have an important beneficial effect on climate change, as some of the gases that caused the ozone layer to thin and in places disappear also contribute to warming the atmosphere. Phasing them out could avoid as much as 0.5C (0.9F) of warming this century. Recovery from the holes and thinning caused by aerosol chemicals has progressed at a rate of about 1% to 3% a decade since 2000, meaning the ozone layer over the northern hemisphere and mid-latitudes should heal completely by the 2030s, if current rates are sustained. Over the southern hemisphere and in the more problematic polar regions, recovery will take longer, until the middle of this century in the former and about 2060 in the latter case. The results, presented on Monday in a four-year assessment of the health of the ozone layer, represent a rare instance of global environmental damage being repaired, and a victory for concerted global action by governments. Scientific evidence of the depletion of the ozone layer over the Antarctic was first presented in 1985, and in 1987 the Montreal protocol was signed, binding world governments to reduce and phase out the harmful chemicals identified as causing the problem. Ozone in the upper layers of the atmosphere protects the earth’s surface from most of the harmful ultraviolet rays from the sun. Without it, skin and eye damage can occur, and evidence suggests a rise in skin cancers associated with the thinning of the ozone layer. “The Montreal protocol is one of the most successful multilateral agreements in history for a reason,” said Erik Solheim, head of UN Environment. “The careful mix of authoritative science and collaborative action that has defined the protocol for more than 30 years and was set to heal our ozone layer is precisely why the Kigali amendment holds such promise for climate action in future.”
More evidence points to China as source of ozone-depleting gas — An environmental group says it has new evidence showing that China is behind the resurgence of a banned industrial gas that not only destroys the planet’s protective ozone layer but also contributes to global warming.The gas, trichlorofluoromethane, or CFC-11, is supposed to be phased out worldwide under the Montreal Protocol, the global agreement to protect the ozone layer. In May, however, scientists published research showing that CFC-11 levels in the atmosphere had begun falling more slowly. Their findings suggested significant new emissions of the gas, most likely from East Asia.Evidence then uncovered by The New York Times and theEnvironmental Investigation Agency pointed to rogue factories in China as a likely major source.Now, the E.I.A. has prepared a report that it says bolsters the finding that Chinese factories are behind the return of CFC-11. Independent laboratory tests “clearly confirm the use of CFC-11 in three enterprises” in China, the agency said in the report. It plans to submit the work this week in Quito, Ecuador, where delegates from nearly 200 countries are attending a Montreal Protocol meeting on the status of efforts to repair the ozone layer.
Brazil Greenhouse Gas Emission Spike Blamed on Deforestation - Greenhouse gas emissions jumped 3.5 percent last year due to a rise in forest clearing, according to a report released yesterday from Observatório do Clima, a consortium of 40 environmental groups in Brazil. The country, in the midst of the deepest economic recession in more than a century, saw its gross domestic product fall 3.8 percent last year. Concurrently, almost 2,400 square miles of forests was lost, the first major jump in deforestation in four years. The jump in emissions—the country is now at the same emissions level that it had in 2010—has called into question whether the South American country can meet its international climate commitments. The country pledged to cut emissions 37 percent below 2005 levels by 2025 and 43 percent by 2030. “If emissions rose during a recession, if deforestation increased while the economy was contracting, we wonder what could happen when Brazil resumes economic growth,” said Carlos Rittl, executive secretary of Observatório do Clima. The data came from the Greenhouse Gas Emission Estimate System, or SEEG, a project of the Brazil climate observatory. It is run by Tasso Azevedo, a well-known Brazilian forest and climate expert, and is open to the public, researchers and journalists. According to the analysis, in 2015, Brazil emitted 1.927 billion tons of CO2 equivalent, up from 1.861 billion tons in 2014. Deforestation contributed 884 million tons of carbon dioxide equivalents. Emissions from Brazil’s energy sectors fell by more than 5 percent, as did transportation emissions. The report cited the stagnant economy and growth of renewable energy sources as reasons why emissions fell in those areas. SEEG’s independent analysis is not the only one to show a jump in emissions from forest clearing. The country’s National Institute for Space Research said in September that the rate of deforestation in the Amazon was up 24 percent in 2015 compared with 2014.
Earth’s carbon dioxide levels are likely the highest they've been in 15 million years -- We’ve entered some profoundly unfamiliar planetary territory. Amid a backdrop of U.S. politicians still questioning whether the changing climate is attributable to humans (it is), it's quite likely that we’ve actually boosted Earth's carbon dioxide — a potent greenhouse gas — to the highest levels they’ve been in some 15 million years. The number 15 million is dramatically higher than a statistic frequently cited by geologists and climate scientists: That today's carbon levels are the highest they've been on Earth in at least 800,000 years — as there's irrefutable proof trapped in the planet's ancient ice.Though scientists emphasize that air bubbles preserved in ice are the gold carbon standard, there are less direct, though still quite reliable means to gauge Earth's long-ago carbon dioxide levels. These measurements, broadly called proxies, include the chemical make-up of long-dead plankton and the evidence stored in the breathing cells, or stomata, of ancient plants.Scientists have identified this 15 million number by measuring and re-measuring proxies all over the world.
Solar geoengineering may not cool the oceans, study says --Spraying aerosols high in the stratosphere could dampen global warming over land, but may not prevent the oceans from heating up, new research says.The findings suggest that this type of “solar geoengineering” – a set of techniques that aim to tackle global warming by reflecting sunlight back into space – may not necessarily stem sea level rise or prevent damage to the world’s marine ecosystems.The research indicates that solar geoengineering could carry “major uncertainties and risks”, the lead author tells Carbon Brief.The study also raises the issue of whether global average temperature “is the best metric to control” when addressing the impacts of climate change, another scientist tells Carbon Brief.Scientists have suggested that releasing aerosols into the atmosphere – a technique known as “stratospheric aerosol injection” – could cool the planet in a similar way to a large volcanic eruption.When a volcano erupts, it sends an ash cloud high into the atmosphere. The sulphur dioxide released in the plume combines with water to form sulfuric acid aerosols, which reflect away incoming sunlight, temporarily cooling the Earth.Artificially introducing aerosols into the atmosphere – via a plane or a high-altitude balloon – could have a similar cooling effect, researchers say.The idea has never been tested, but previous research using computer simulations suggests that releasing aerosols could help limit global temperature rise to 1.5C – the aspirational target of the Paris Agreement – and keep rainfall from becoming irregular. However, an aerosol sunshade would not protect the planet from rising CO2 emissions – which is causing oceans to become more acidic and crops to become less nutritious, among other problems.
Alterations to seabed raise fears for future- Ocean acidification - The ocean floor as we know it is dissolving rapidly as a result of human activity.Normally the deep sea bottom is a chalky white. It's composed, to a large extent, of the mineral calcite (CaCO3) formed from the skeletons and shells of many planktonic organisms and corals. The seafloor plays a crucial role in controlling the degree of ocean acidification. The dissolution of calcite neutralizes the acidity of the CO2, and in the process prevents seawater from becoming too acidic. But these days, at least in certain hotspots such as the Northern Atlantic and the southern Oceans, the ocean's chalky bed is becoming more of a murky brown. As a result of human activities the level of CO2 in the water is so high, and the water is so acidic, that the calcite is simply being dissolved.The McGill-led research team who published their results this week in a study in PNAS believe that what they are seeing today is only a foretaste of the way that the ocean floor will most likely be affected in future. "Because it takes decades or even centuries for CO2 to drop down to the bottom of the ocean, almost all the CO2 created through human activity is still at the surface. But in the future, it will invade the deep-ocean, spread above the ocean floor and cause even more calcite particles at the seafloor to dissolve," says lead author Olivier Sulpis who is working on his PhD in McGill's Dept. of Earth and Planetary Sciences. "The rate at which CO2 is currently being emitted into the atmosphere is exceptionally high in Earth's history, faster than at any period since at least the extinction of the dinosaurs. And at a much faster rate than the natural mechanisms in the ocean can deal with, so it raises worries about the levels of ocean acidification in future." In future work, the researchers plan to look at how this deep ocean bed dissolution is likely to evolve over the coming centuries, under various potential future CO2 emission scenarios. They believe that it is critical for scientists and policy makers to develop accurate estimates of how marine ecosystems will be affected, over the long-term, by acidification caused by humans.
US Supreme Court allows historic kids’ climate lawsuit to go forward - A landmark climate-change lawsuit brought by young people against the US government can proceed, the Supreme Court said on 2 November. The case, Juliana v. United States, had been scheduled to begin trial on 29 October in Eugene, Oregon, in a federal district court. But those plans were scrapped last month after President Donald Trump's administration asked the Supreme Court to intervene and dismiss the case. The plaintiffs, who include 21 people ranging in age from 11 to 22, allege that the government has violated their constitutional rights to life, liberty and property by failing to prevent dangerous climate change. They are asking the district court to order the federal government to prepare a plan that will ensure the level of carbon dioxide in the atmosphere falls below 350 parts per million by 2100, down from an average of 405 parts per million in 2017. By contrast, the US Department of Justice argues that “there is no right to ‘a climate system capable of sustaining human life’” — as the Juliana plaintiffs assert. Although the Supreme Court has now denied the Trump administration's request to the dismiss the case, the path ahead is unclear. In its 2 November order, the Supreme Court suggested that a federal appeals court should consider the administration's arguments before any trial starts in the Oregon district court. Lawyers for the young people said they would push the district court to reschedule the trial next week. “The youth of our nation won an important decision today from the Supreme Court that shows even the most powerful government in the world must follow the rules and process of litigation in our democracy,” said Julia Olson, co-counsel for the plaintiffs, in a statement reacting to the Supreme Court decision.
Landmark children’s climate lawsuit hits new roadblock -A high-profile lawsuit aiming to hold the federal government accountable for not curbing climate change has encountered yet another roadblock. After the Supreme Court permitted the case to proceed last week, the Ninth Circuit Court of Appeals delayed the case again on Thursday.The case, Juliana v. United States, has its roots in a lawsuit filed against the Obama administration in August 2015 by 21 plaintiffs—all between the ages of 11 and 21. The teenage activists claimed that the federal government had violated their constitutional rights by not curbing climate change and asked the court to “develop a national plan to restore Earth’s energy balance, and implement that national plan so as to stabilize the climate system.”The trial had been scheduled to begin in federal district court in Eugene, Oregon, on October 29, but several interventions by higher courts kept the case in limbo.“What these young plaintiffs are being put through just to have their day in court is disgraceful,” Kassie Siegel, director of the Center for Biological Diversity’s Climate Law Institute, said in a statement to Mother Jones. “This trial would finally hold the Trump administration accountable for its climate denial and destructive agenda. The court shouldn’t let the Trump administration use absurd legal claims to weasel out of it.”
The most intellectual creature to ever walk Earth is destroying its only home’ - Jane Goodall - During my years studying chimpanzees in Gombe national park in Tanzania I experienced the magic of the rainforest. I learned how all life is interconnected, how each species, no matter how insignificant it may seem, has a role to play in the rich tapestry of life – known today as biodiversity. Even the loss of one thread can have a ripple effect and result in major damage to the whole. I left Gombe in 1986 when I realised how fast chimpanzee habitat was being destroyed and how their numbers were declining. I visited six chimpanzee range states and learned a great deal about the rate of deforestation as a result of foreign corporations (timber, oil and mining) and population growth in communities in and around chimpanzee habitat, so that more land was needed for expanding villages, agriculture and grazing livestock. But chimpanzees, and many other species are still highly endangered. Over the last 100 years chimpanzee numbers have dropped from perhaps two million to a maximum of 340,000, many living in fragmented patches of forest. Several thousand apes are killed or taken captive for the illegal wildlife trade. Orangutans and gibbons are losing their habitats due to the proliferation of non-sustainable oil palm plantations. We are experiencing the sixth great extinction. The most recent report from WWF describes the situation as critical – in the last 40 years, we have lost some 60% of all animal and plant species on Earth. We are poisoning the soil through large-scale industrial agriculture. Invasive species are choking out native animal and plant life in many places. Carbon dioxide is released into the atmosphere by our reliance on fossil fuels, destruction of the rain forests and pollution of the ocean. Increase of demand for meat not only involves horrible cruelty to billions of animals in factory farms, but huge areas of wild habitats are destroyed to grow crops for animal feed. So much fossil fuel is required to take grain to animals, animals to slaughter, meat to table – and during digestion these animals are producing methane – an even more virulent gas than carbon dioxide. And their waste along with other industrial agricultural runoff is polluting soil and rivers sometimes causing toxic algae blooms over large areas of ocean. How come the most intellectual creature to ever walk Earth is destroying its only home?
Could One Man Single-Handedly Ruin the Planet - How much damage can one person do to the planet? For that matter, how much can one do to help save it? Unless that person is Xi Jinping — the autocrat-for-life in charge of the world’s most populous country and its rapidly industrializing, state-capitalist economy — the answer is, usually, not very much. Even Donald Trump’s contribution to climate catastrophe is relatively modest: He’s pulled the United States out of the Paris accords and slashed environmental regulations, but, thanks to forces beyond his control, American emissions are nevertheless down since he’s been in office (making the U.S., which accounts for only fourteen percent of global emissions, the only major industrialized nation whose contributions to climate change are actually falling). The problem of global warming is just so big, and so diffuse, that the impact of any single actor, no matter how powerful, is relatively small. This is why global cooperation is so important, and why coordination is so difficult. But Brazil’s newly elected president just might test the proposition that no individual matters all that much to the climate. Often called the “Trump of the Tropics,” the cartoonish quasi-fascist Jair Bolsonaro is almost certain to be worse on global warming than Trump himself. So bad, in fact, that he is already a horrifying argument for a Great Man Theory of climate change. Bolsonaro wants to do as he’d like in the Amazon, 60 percent of which sits within Brazilian borders. There, he plans to open the rainforest to agricultural development, essentially putting a match to an entire rainforest of stored carbon by inviting rapid deforestation — the industrial-scale felling of trees, which, in dying and decomposing, will release into the atmosphere all the CO2 they have stored inside them.
Trump admin promises to ‘encourage’ tree burning for energy -Three federal agencies said Thursday that they’re working to embrace burning trees and other biomass to create energy in a “carbon-neutral” way.The heads of the Environmental Protection Agency (EPA), Department of Agriculture (USDA) and Department of Energy (DOE) sent a letter to Congress outlining how they are carrying out a mandate from a law passed earlier this year to ensure that policies “reflect the carbon-neutrality of forest bioenergy and recognize biomass as a renewable energy source.”“EPA, USDA, and DOE will encourage the use of biomass as an energy solution, striving for consistency across federal policies and programs,” the agencies’ leaders said in the letter.“Working together, the agencies can tap their respective expertise in harnessing the energy potential of this country, and their experience in protecting the environment and working with foresters, farmers and other land owners.”Labeling wood burning as environmentally friendly is at odds with environmental groups and some scientists, who say that the process of creating electricity, steam or other energy forms from wood releases all of the carbon dioxide that the trees had previously removed from the atmosphere. William Schlesinger, a biogeochemist who used to lead the Cary Institute of Ecosystem Studies, wrote in Science magazine earlier this year that burning wood is likely a net negative for the environment. “Trees remove CO2 from the atmosphere, and burning wood returns it. But recent evidence shows that the use of wood as fuel is likely to result in net CO2 emissions and may endanger forest biodiversity,” he said. The forestry industry has been pushing for years for federal policy to consider biomass burning a renewable energy source, which could give it some of the benefits that wind, solar and similar energy forms enjoy. Companies often use sawdust and other waste to fuel operations, or turn the waste into pellets and sell them to other companies. The American Forest and Paper Association cheered the Trump administration’s Thursday letter. “More than seven years of policy uncertainty in this area jeopardizes our companies’ ability to invest in biomass and build and upgrade their facilities,” said Donna Harman, the group’s president.
Trump Backs Wood Power Scientists Call Dirtier Than Coal --The Trump administration endorsed burning trees and other biomass to produce energy on Thursday, vowing to promote a practice some scientists have declared more environmentally devastating than coal-fired power. The Environmental Protection Agency joined the departments of Energy and Agriculture in a letter to congressional leaders committing to “encourage the use of biomass as an energy solution.” The EPA also reasserted its view that power plants burning trees and other woody materials to generate electricity should be viewed as carbon neutral, because when the plants eventually regrow they remove carbon dioxide from the air.The agencies also are committing to collaborate on policies promoting biomass, which could include Energy Department research and encouraging utilities to substitute wood for coal in power plants. EPA Acting Administrator Andrew Wheeler said the move “will support good-paying jobs in rural communities, protect our nation’s air quality and remove unnecessary regulatory burdens.”But environmentalists say burning trees releases carbon dioxide previously trapped inside the plant. And when forests are cleared to produce energy, it can take them decades -- or longer -- to regrow, if they ever do. The result is a power source that can generate more carbon dioxide emissions than the coal it is sometimes meant to replace.“When biomass from forests is burned for electricity, it immediately emits CO2 to the atmosphere in amounts equivalent to, and often greater than, fossil fuels,” more than six dozen scientists said in a letter Wednesday to Wheeler. “If trees are harvested for use in bioenergy production and then regrown, the combination of the regrowth and displaced fossil fuels can eventually pay off the carbon debt, but that ‘payback period’ typically ranges from decades to hundreds of years.”The EPA’s own science advisers also warned that assuming biomass emissions are carbon neutral “is inconsistent with the underlying science.” Thursday’s letter from the federal agencies responds to a provision Congress tucked into a spending bill directing federal agencies to establish policies that “reflect the carbon neutrality of forest biomass for energy production.” Even before that directive, under former EPA administrator Scott Pruitt, the agency declared in April that it generally considered burning biomass for energy as carbon neutral. Supporters say biomass offers an array of benefits when it comes from forests that are regrown after harvest, and there has been bipartisan recognition of its attributes. For instance, former Democratic Agriculture Secretary Tom Vilsack argued in 2016 that “the U.S. wood pellet industry increases our forested area, reduces greenhouse gas emissions and improves U.S. forest management practices.”
Report: Zinke Plans to Resign, Explores Fox News, Energy Company Boards -- From taxpayer-funded trips with his wife to shrinking national monuments for fossil fuel interests, Interior Secretary Ryan Zinke is one of President Trump's most scandal-ridden cabinet members. Now, the embattled official, who is facing several federal investigations of alleged misconduct, could be on his way out. POLITICO's sources said that the cabinet official plans to resign as Interior Secretary by the end of the year. They claimed that Zinke reached out to the conservative channel Fox News about potential employment, and also sought positions on energy company boards of directors or private equity firms, according to POLITICO. The Interior's press secretary denied the report about Zinke seeking a job with Fox News, calling the rumor "laughably false and belongs in The Onion," in reference to the satirical news publication.
Where cheap power matters more than environmental Armageddon --Few places better illustrate the tension between pursuing profit and tackling climate change than Australia’s Abbot Point port in northern Queensland.It’s here, 30 miles from the Great Barrier Reef, that Adani Enterprises Ltd. wants to increase capacity so it can ship more coal from a new A$2 billion ($1.4 billion) mine nearby. The expansion faces opposition from environmentalists, who say it will endanger the health of the reef, one of the seven wonders of the natural world, but has been backed by the government along with the new mine.It’s emblematic of Australia’s dilemma: blessed with some of the world’s richest natural environments, from Kakadu wetlands in the Northern Territory to the primordial Tarkine rainforest in Tasmania, yet reliant on mining and exporting one of the most ecologically-damaging fossil fuels to keep its economy ticking.Under Prime Minister Scott Morrison and his Liberal-National coalition government, political and economic arguments in favor of fossil fuels are overpowering popular interest in tackling climate change for now. The coalition was keen to disburse A$1 billion in taxpayer-funded loans to help Adani build a rail link for the project, but the plan was vetoed by Queensland’s state government, which is controlled by the national opposition Labor Party. Though one of the world’s biggest sources of coal and natural gas, a decade of political dithering and policy missteps have saddled Australia with rising power prices and at times unreliable supplies. Successive governments have failed to provide the investment certainty needed to bridge the transition to renewables such as solar and wind as aging coal-fired plants close.The government is primarily focused on mollifying voters hit with higher electricity bills and sees coal as the solution. Yet those same voters also want more action against climate change, with 84 percent wanting the government to boost renewable power generation, according to a June pollby Australian think tank the Lowy Institute.
SCC says Dominion customers will bear risks of $300 million offshore wind project, legislature to blame -- The State Corporation Commission said it bowed to legislative mandate by approving a $300 million offshore wind power pilot project that it otherwise would have found imprudent because customers of Dominion Energy Virginia will bear all the costs and risks. The SCC concluded in a scathing 20-page order on Friday that the Coastal Virginia Offshore Wind project isn’t needed to serve Dominion customers and will cost more than any other option for generating electricity to serve the utility’s 2.6 million customers. The commission was especially direct in noting that the project’s developers won’t bear any of the risk for a project to be built 27 miles off the Atlantic coast. “The economic benefits specific [to the project] are speculative, whereas the risks and excessive costs are definite and will be borne by Dominion’s customers,” the order states. The SCC concluded it had no choice but to approve the 12-megawatt pilot project because the General Assembly adopted a law this year at Dominion’s request with provisions that “subordinate the factual analysis to the legislative intent and public policy clearly set forth in the statutes.” In contrast, the commission also approved a Dominion agreement to buy power from an 80-megawatt solar plant in Halifax County because the developer — “not Dominion’s customers — bears almost all the risks of this project.” The law requires Dominion to develop 5,000 megawatts of renewable energy generation over the next decade — including offshore wind — as a matter of public interest.
A look at wind power's history in Ohio - Toledo Blade — While it created a fair amount of controversy itself, the $600 million Blue Creek Wind Farm — a collection of some 152 wind turbines across Paulding and Van Wert counties, near the Indiana state line — was Ohio’s largest construction project when most of it was installed in 2011. The 300-megawatt project, which began construction in September, 2010, went online in early 2012. While its biggest customers are FirstEnergy Solutions and American Municipal Power, 50 of those megawatts are purchased by Ohio State University. OSU has said the clean energy produced by those turbines provides it with roughly 25 percent of the electrical needs for its main campus. About $2 million a year go to local landowners in the form of lease payments, with another $2.7 million in annual payments to local taxing bodies. That includes another $400,000 annually for the Lincolnview School District in eastern Van Wert County. Its annual tax payments to Van Wert County are larger than the county’s next 11 businesses combined. The Blue Creek Wind Farm has been cited repeatedly over the years as an example of what was possible before today’s highly restrictive setback rules were passed by the Ohio General Assembly and signed into law by Gov. John Kasich in 2014.Company officials have said the project likely would have been sited in northeast Indiana if Ohio’s current rules were in effect then. Only a dozen of the 152 turbines would have met those siting requirements.A 20-page report written in 2017 by two Washington-based industry groups, the American Wind Energy Association and the Wind Energy Foundation, asserted Ohio’s losses in potential economic development since the 2014 rules took effect had reached a staggering $4.2 billion.
Wind farms kill off 75% of buzzards, hawks and kites that live nearby - Researchers at the Indian Institute of Science in Bengaluru studied lizard and bird populations at three wind turbine sites in the Western Ghats. They found almost four times fewer buzzards, hawks and kites in areas with wind farms – a loss of about 75 per cent. In areas without turbines around 19 birds were spotted every three hours, while nearer to the machines this number dropped to around five. This led to an abundance of the fan-throated lizard, a species only found on the Indian sub continent and a favourite snack of the predatory birds. Study coauthor Professor Maria Thaker said: ‘We have known from many studies that wind farms affect birds and bats. ‘They kill them and disrupt their movement. But we took that one step further and discovered that it affects lizards too.’
Quantifying wind surpluses and deficits in Western Europe --This post updates my January 2015 Wind blowing nowhere post using 2016 rather than 2013 data. The 2016 data show the same features as the 2013 data, with high and low wind conditions extending over large areas and a decreasing level of correlation with distance between countries. The post also quantifies the surpluses and deficits created by high and low wind conditions in January 2016 in gigawatts. The results indicate that wind surpluses in Western European countries during windy periods will be too large to be exported to surrounding countries and that wind deficits during wind lulls will be too large to be covered by imports from surrounding countries. This casts further doubt on claims that wind surpluses and deficits in one region can be offset by transfers to and from another because the wind is always blowing somewhere. The wind and other data used in this post are from the P-F Bach data base used in “wind blowing nowhere”. Three of the countries for which 2013 data were available – Finland, Ireland and Belgium – have no 2016 data, but three countries that had no 2013 data – Norway, Sweden and the Netherlands – do. As a result we now have a contiguous block of nine countries that extends from Gibraltar to North Cape, a distance of 4,400km, and which has a width of up to 1,900 km (Figure 1). The total area covered by the nine countries is 2.66 million sq km: Wind capacity factors by country are shown in Figure 2 (click to enlarge). Capacity factors instead of actual generation values are plotted to avoid swamping countries with low levels of wind generation with generation from large producers, and daily rather than hourly data are shown for readability. Capacity factors are adjusted for capacity additions during the year: As would be expected the three largest economies (Germany, France and the UK) contribute much more to the deficits and surpluses than the six smaller ones – between them they account for 81% of the January 30 surplus and 72% of the January 20 deficit. The key issue, however, is magnitude. Could wind surpluses and deficits exceeding 110 GW in Western Europe be balanced out by transfers of wind power to and from the smaller economies of Central and Eastern Europe? Almost certainly not. And if not the January 30 surplus would have to be curtailed, and unless enough backup dispatchable capacity were available the January 20 deficit could black out parts of Western Europe. Note also that the maximum surpluses and deficits would be even higher if intervals shorter than one hour were used.
Blockchain tech is taking on renewable energy trading in one country -Blockchain, the technology underpinning cryptocurrency bitcoin, has been recommended and theorized for uses across a broad spectrum of sectors and countries. Now, one Southeast Asian city-state is putting the tech to work in reshaping its energy industry.In Singapore, companies can buy and sell so-called renewable energy certificates (RECs) that represent a unit of green energy production from the likes of wind or solar power. The idea is that firms seeking to offset their non-green energy production can purchase RECs from a company producing excess green power.It's a system similar to carbon trading that takes place in many localities, and, as of last week, companies can now engage in their REC trading on a blockchain-powered system.That's more than just a gimmick, according to utilities provider SP Group, which launched the new platform: It will allow for better transparency and lower costs in power trading because it reduces the need for a centralized entity to verify transactions. It could eventually even facilitate cross-border energy credit trading, the utility company has said."A consumer in Singapore who wishes to buy green energy can now, through blockchain-powered REC trading, purchase a REC from a hydro-producer based in Laos," SP Group CEO Wong Kim Yin told CNBC at the Singapore International Energy Week conference last week. "This reduces the cost, reduces the friction in the market."High costs in verifying certificates as well as the difficulties in tracking RECs have led to relatively low trading volumes in Singapore, and even so, a majority of the transactions occur directly between one originator and buyer — not on a marketplace. Adding blockchain to the equation may change that: The distributed ledger system effectively eliminates the need for verification processes at a centralized entity, reducing costs and allowing small energy consumers and producers to participate.
Energy cost of ‘mining’ bitcoin more than twice that of copper or gold - The amount of energy required to “mine” one dollar’s worth of bitcoin is more than twice that required to mine the same value of copper, gold or platinum, according to a new paper, suggesting that the virtual work that underpins bitcoin, ethereum and similar projects is more similar to real mining than anyone intended. One dollar’s worth of bitcoin takes about 17 megajoules of energy to mine, according to researchers from the Oak Ridge Institute in Cincinnati, Ohio, compared with four, five and seven megajoules for copper, gold and platinum. Other cryptocurrencies also fair poorly in comparison, the researchers write in the journal Nature Sustainability, ascribing a cost-per-dollar of 7MJ for ethereum and 14MJ for the privacy focused cryptocurrency monero. But all the cryptocurrencies examined come off well compared with aluminium, which takes an astonishing 122MJ to mine one dollar’s worth of ore.“Mining” is the name for the process by which blockchains, such as those that underpin cryptocurrencies, are regulated and verified. In bitcoin’s case, for instance, the currency is backed by “miners” due to the absence of a centralised authority confirming transactions. These miners effectively enter a competition to waste the most electricity possible by doing pointless arithmetic quintillions of times a second. One lucky competitor wins both a reward, worth about eighty thousand dollars in bitcoin, and the right to verify all transactions made in the last 10 minutes. The rewards may be virtual, but the energy cost is very real. Previous attempts to gauge how much electricity is burned to power the bitcoin network, still the largest blockchain in existence, have focused on looking at the size of the network in aggregate. In November 2017, one estimate placed the power consumption of the network as equivalent to that of the nation of Ireland. Another noted it was producing the same annual carbon emissions as one million transatlantic flights.
The $6 Trillion Barrier Holding Electric Cars Back - The good news is the death of the internal combustion engine is nearing and electric-vehicle sales are on a tear. Countries that together account for more than 10 percent of global auto sales have detailed plans to phase out conventional gasoline-powered cars. Include China, and that jumps to 40 percent. 1 These days, electric cars can drive further and be charged faster than previously. Automakers are beginning to churn out at least one electric variant, with more than 100 battery-powered models to be available by next year. Consumers bought more than 1 million electric vehicles last year, an increase of almost 60 percent from 2016, even as global car demand turned lower. China, with an aggressive green vehicle policy, accounts for almost half of worldwide electric passenger-car sales. The average price of lithium ion batteries, which account for almost half a car’s cost, has dropped from $599 per kilowatt-hour to $208 per kWh over the past five years. Drivers now have almost 600,000 charging outlets globally, of which more than half are in China. The country is responsible for a big part of the shift in demand, through carrot-and-stick policies. That’s forced global automakers looking for a foothold in the world’s largest auto market to start producing electric cars. The trouble is, the sales numbers don’t say much about quality or technology. The cost of full adoption is astronomical. An estimated $6 trillion is theoretically needed to build the infrastructure that electric cars need such as charging stations and power networks, according to Goldman Sachs Group Inc. That’s about 7.5 percent to 8 percent of the world’s gross domestic product. Add to that the amount companies spend on making the cars and batteries, and the number could be even higher.
550 gallons of oil spill into storm sewer, Mississippi River...— A fire at Fouquette Auto Tuesday morning caused 550 gallons of oil to spill into a storm sewer, according to the St. Cloud Fire Department. A hazardous materials unit responded to 5 Riverside Ave. S to help stop oil from entering the Mississippi River following a fire at that address. Crews deployed absorbent materials to pick up the oil from the river, according to the fire department. A cleanup contractor was called in to take over the process. The fire had started at about 10:13 a.m. when the owner of the business was working on the fuel tank of a vehicle. According to the owner, some fuel spilled onto the floor of the shop. The boiler kicked on, and the owner said he saw a spark and blue flame cover the floor. The northeast overhead door blew off, and the owner escaped without injury through the opening. The fire caused about $450,000 in damage to the building, equipment and property inside the building, according to the Sartell Police Department.
Voters in 3 U.S. states reject initiatives to curb fossil fuel use - Voters in Colorado, Arizona and Washington states rejected ballot initiatives that sought to curb fossil fuels. In Colorado, an initiative to limit new drilling near populated or vulnerable areas, which would have heavily curtailed the industry, received 43 percent of the vote. The Washington state measure, meanwhile, which would have imposed the nation’s first fee on carbon emissions garnered only 44 percent of the vote. In Arizona, voters defeated a proposal backed by billionaire activist Thomas Steyer that would have required electricity providers to use renewable energy for half of their needs by 2030, up from the current 15 percent. The results were a setback for green activists, but a win for the energy industry and the Trump administration, which had sought to unfetter oil, gas, and coal production by rolling back environmental protections.
A Washington State Carbon Tax Goes Down in Flames --Initiative 1631, which would have created a carbon tax in Washington State, lost by almost 12% of the vote this week. Commentators on all sides have interpreted this as a decisive defeat for carbon pricing, making more indirect policies like subsidies to renewables the only politically feasible option.* This conclusion is premature. I live in Washington State and saw the battle unfold first hand in real time. Voters were not asked by opponents of 1631 to reject carbon pricing; on the contrary. And it was the failure to draft and promote a straight-ahead carbon pricing law that doomed it. While supporters of 1631 point to money from fossil fuel interests as the “cause” of their defeat, the actual propaganda of the No side did not belittle the threat of climate change, nor did it even argue against the need for action to reduce emissions. It hammered on these points:
- 1. 1631 was weak. It excluded too much of the state’s emissions and wouldn’t have a meaningful impact on them.
- 2. Nevertheless it would raise energy bills for virtually all the state’s residents.
- 3. It proposed an undemocratic procedure for allocating carbon revenues.
The money behind this message may be “bad”, but the message itself was correct. 1631 was so poorly conceived that the arguments of the troglodytes were closer to the truth than those of the progressives. Take them one by one:
- 1. 1631 was the second carbon tax initiative in two years. Last year’s effort, I-732, had broader coverage and allowed for higher carbon prices over time. It was opposed by progressives, who organized to defeat it and then drew up their own, weaker proposal. There is a lot of detail to go into, but the short version is that 1631’s carbon price was essentially symbolic, a few cents on the carbon dollar. It was not a meaningful action to deal with the threat of a climate catastrophe.
- 2. This one was particularly galling for me as an economist. Supporters of 1631 actually campaigned on the argument that the tax would be paid by a few large corporations, not by all of us. On this point the No crowd was entirely right and the Yes entirely wrong. I’m sure many pro-1631ers really believed that energy taxes aren’t passed through to consumers, but those at the top who drafted the proposal knew better. Their public communication was dishonest, they got called on it, and they lost.
- 3. 1631 was the product of horse-trading between various interest groups. Environmentalists wanted carbon revenues to go for green infrastructure. Identity groups wanted funds funneled into minority, immigrant and low-income communities. Unions wanted money for workers in the fossil fuel sector who might lose jobs. Tribes wanted the state to defray the costs of climate change that impinge on them with particular force. All of these are worthy goals in their own terms. The problem is, how to translate a deal reached around a table between various representatives of these movements into a political process for disbursing public funds.
Coal group warns Trump administration of a 'second war on coal' in ACE comments - A "second war on coal" fought through battles over particulate matter emissions is coming unless the Trump administration takes further action to defend the sector, warned a new "ad hoc association dedicated to vigorously defending the American coal industry." The Trump administration should stop regulating coal power plants under Section 112 of the Clean Air Act before it proceeds with regulating them through Section 111(d) of the act with the administration's proposed Affordable Clean Energy, or ACE, rule to avoid "a potentially disastrous second round of national uniform emission mandates," wrote the National Bituminous Coal Group, or NBCG, in comments on the ACE rule. If coal power plants remain subject to regulation under Section 112, which has been used to issue rules limiting mercury emissions, environmental groups would only need to force a moderate increase in the stringency of the non-mercury metal surrogate particulate matter standard to "devastate" the existing fleet of U.S. coal power plants, NBCG wrote. A mandatory "risk and technology review" is required by Section 112 of the Clean Air Act, and an assessment of the Mercury and Air Toxics Standards, or MATS rule, is due in 2020. "This will leave a massive, obvious, and easy-to-hit target on the back of the coal fleet if the president is not re-elected," NBCG warned the administration. "To be clear, the first war on coal was largely fought through battles over sulfur dioxide and acid gas emission regulations through the New Source Review program and the Section 112 [MATS] rule. The second war on coal will be fought through battles over particulate matter emissions."
You'll need 286 pounds of coal to fuel that electric road trip - New Yorkers looking to escape the winter chill by driving to Daytona Beach, Florida, would use about 40 gallons of gasoline to traverse the 1,000 miles in a Chevrolet Impala. A Tesla Model S traveling the same distance would need power generated by about 2,500 cubic feet of natural gas, 286 pounds of coal or 33 minutes of blades spinning on a giant offshore wind turbine to make the same journey. As electric vehicles slowly become a bigger part of the global automobile fleet, questions about mileage and fuel efficiency are going to become more apposite. While there are multiple variables that can affect electric vehicle energy consumption, a Bloomberg NEF analysis illustrated some ballpark estimates to give drivers a better picture of what’s happening underneath the hood.Taking that same 1,000-mile road trip in an electric vehicle that needs 33 kilowatt-hours of energy to travel 100 miles, like a Tesla Model S, would require about 286 pounds (130 kilograms) of coal to be burned at the local power plant. Modern coal plants only convert about 35 percent of the fuel’s energy into electricity, and about 10 percent of that electricity could be lost as it travels along power lines.A natural gas power plant producing the same amount of electricity would need to burn about 2,500 cubic feet of the fuel, enough to fill a small apartment in Hong Kong or a master bedroom in Dallas. Gas plants are more efficient than coal, typically converting about half the fuel’s energy into electricity. It’s also much cleaner, emitting just 170 kilograms of carbon dioxide for the 1,000-mile journey.When it comes to charging electric vehicles with solar power, size matters. A typical 10-kilowatt rooftop array would need about seven days to create enough electricity for a 1,000-mile journey, as clouds and darkness mean it only operates at about 20 percent of its capacity on an average day. Scale up to a photovoltaic power station, though, and it would take a matter of minutes, not days. Wind is a similar story, with different sizes of turbines producing different amounts of electricity. Take the Vestas V90-2.0 MW, an 80-meter tall behemoth that can be found swirling on the plains of West Texas, among other locations. Just one of these turbines, and wind farms are usually planted with dozens of them, produces enough electricity in a day to power a 1,000-mile trip every 33 minutes.
More coal-fired power plants closing on uncompetitive economics - Gas-fired power generation in the U.S. has been making impressive gains lately and that trend looks likely to continue. Power demand is growing quickly and generation fueled by cheap natural gas is taking an ever-increasing market share of the new and existing load from more expensive generators like coal and nuclear, which is leading significant numbers of those plants to shut down. The Energy Information Administration (EIA) earlier this year forecast that combined-cycle, gas-fired generation capacity could rise by 6.1 GW between now and 2020, which — if fully called upon — would equate to roughly 1 Bcf/d of gas demand. That growth would displace some older gas-fired generation but also fill the void left by retiring coal-fired and nuclear power generators — two sectors EIA expects to decline over the next couple of years by 14.1 GW and 1.7 GW, respectively. What’s more, surging gas production and rapidly filling pipeline expansions in recent months suggest that gas-fired generation demand may be growing even faster than expected. Today, we take a look at how gas generation has been besting coal-fired plants on fuel costs in recent years, and at the string of nuclear and coal-fired generators that are being permanently retired.
PJM CEO pans coal bailout but says plant payments needed in mid-2020s -- The CEO of the PJM Interconnection said Thursday that a federal bailout for coal and nuclear plants is unnecessary, but higher payments to generators that store fuel onsite may be needed in the mid-2020s. The PJM grid is secure today, CEO Andy Ott said at a Washington event, but a new report on power plant fuel dependency shows risks to the system could arise in five to six years if more power plants retire than anticipated and multiple stressors hit the grid at once. PJM will engage its members and federal regulators to design market-based payments to power plants that can store multiple weeks of fuel onsite or provide similar grid services, Ott said. Critics are concerned the report raises unrealistic scenarios and that solutions will be biased toward fossil fuel and nuclear plants at the expense of renewables, demand management and energy storage.The debate over power plant compensation in PJM illustrates how the transition from large coal and nuclear plants to natural gas and renewables is stressing power markets.Coal and nuclear plant owners argue that the retirement of their resources could put the power system at risk by making it over-reliant on gas, which is diverted for home heating in the winter.Their concerns are shared by the Trump administration, which this spring ordered the Department of Energy to devise a plan to save the money-losing plants. That plan is now reportedly on hold at the White House, but Ott, who runs the power market where most of the retiring plants are located, has said since its proposal that such action is not needed. "Government intervention is unnecessary," he reiterated Thursday. "It would be inefficient and more costly." Instead, the PJM CEO has said the grid operator needs to study when the retirement of coal and nuclear plants could present a risk to the grid. The answer, according to a fuel security report released Thursday, is in five to six years. "Based on the results of this analysis, in extreme but plausible scenarios we do see a risk that we could get into situations where we couldn't meet all demand under certain circumstances," Ott told reporters.
UK nuclear power station plans scrapped as Toshiba pulls out - Plans for a new nuclear power station in Cumbria have been scrapped after the Japanese conglomerate Toshiba announced it was winding up the UK unit behind the project. Toshiba said it would take a 18.8bn Japanese yen (£125m) hit from closing its NuGeneration subsidiary, which had already been cut to a skeleton staff, after it failed to find a buyer for the scheme. “Toshiba recognises that the economically rational decision is to withdraw from the UK nuclear power plant construction project, and has resolved to take steps to wind-up NuGen,” the firm said in a statement. The decision represents a major blow to the government’s ambitions for new nuclear and leaves a huge hole in energy policy. The Moorside plant would have provided about 7% of UK electricity.
Why We’re Taking a Hard Look at Nuclear Power Plant Closures - Union of Concerned Scientists: - Last month the Intergovernmental Panel on Climate Change (IPCC) issued a sobering report. Based on the most up-to-date scientific evidence, the report warns that we are rapidly losing any appreciable chance of meeting the Paris climate agreement goal of keeping temperature increases to “well below” 2 degrees Celsius above pre-industrial levels. The report also makes clear that if we fail to meet this goal, the consequences will not only be severe, but they will be experienced sooner than expected. These sobering realities dictate that we keep an open mind about all of the tools in the emissions reduction toolbox—even ones that are not our personal favorites. And that includes existing nuclear power plants in the United States, which currently supply about 20 percent of our total electricity needs and more than half of our low-carbon electricity supply. Factoring all of these considerations in, our new report calls for proactive policy to preserve nuclear power from existing plants that are operating safely but are at risk of premature closures for economic reasons or to ensure that lost nuclear capacity is replaced with carbon-free sources.
‘‘You guys have gotten me afraid.’ Radioactive groundwater found at SC fuel factory -Groundwater at Westinghouse’s nuclear fuel factory on Bluff Road is contaminated with unsafe levels of radioactive material from years-old leaks that state and federal regulators only learned about in the past year.Recent tests found levels of radioactive uranium that exceed safe drinking-water standards at two test wells adjacent to the nuclear fuel-rod plant building southeast of Columbia, the U.S. Nuclear Regulatory Commission said during a community meeting.Thursday night’s meeting was held as part of Westinghouse’s application for a new 40-year license from the Nuclear Regulatory Commission to operate the Bluff Road plant.The plant, located between Interstate 77 and Congaree National Park, employs about 1,000 people. The 550,000-square-foot facility, one of only three of its kind in the country, makes nuclear fuel rods that are used to run commercial atomic power plants across the United States. The pollution found in the two test wells resulted from leaks in 2008 and 2011 that occurred in a contaminated wastewater line, the NRC and Westinghouse said.The company and federal officials said the uranium-contaminated groundwater is in the middle of the sprawling industrial plant site and has not trickled onto adjacent land. The pollution is thousands of feet away from the boundary of Westinghouse’s property, NRC officials said.Westinghouse thinks the leaks “are fairly shallow, and they are working to better characterize the extent of that contamination,’’ the NRC’s Tom Vukovinsky said.Westinghouse is working on a plan to clean up the pollution to prevent any spread of the uranium-tainted groundwater. The company is preparing a report for the state Department of Health and Environmental Control, to be given to the agency this year, that is expected to address cleanup plans for the 2008 and 2011 leaks. Previously, Westinghouse told federal regulators it did not plan to clean up the 2011 pollution until it shuts down the factory site in 40 years.
Eight Permits Issued in Ohio's Utica Shale – The Ohio Department of Natural Resources last week issued eight new permits to oil and gas companies exploring the Utica shale, the agency reported. Two companies – Eclipse Resources and Chesapeake Exploration LLC – each received four permits for new horizontal wells for the week ended Nov. 3, ODNR said. Eclipse was awarded permits for new wells in Guernsey County and Chesapeake received permits for wells in Harrison County. As of Nov. 3, ODNR reports that it has issued 2,913 horizontal well permits in the Utica and 2,446 of those wells are drilled. There are 2,072 horizontal wells in production across Ohio’s Utica, the agency said. The number of oil and gas rigs operating in the Utica on Nov. 3 stood at 17, ODNR reported. There were no permits issued for wells in Columbiana, Mahoning, or Trumbull counties in the northern section of the Utica, according to ODNR. There were no new permits issued in nearby Lawrence or Mercer counties in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.
Anti-fracking failing for eighth time - - With 57.55 percent of Mahoning County’s votes reporting the Youngstown anti-fracking charter amendment appears as if it’s going to fail for an eighth time. The vote is 55.4 percent against the proposal and 44.6 in support of it.
Enbridge request to start more of Nexus nat gas pipeline approved by FERC -- The Federal Energy Regulatory Committee approves Enbridge's (ENB +2.4%) request to place into service more of its $2.6B Nexus natural gas pipeline from Ohio to Michigan.The FERC says it OK'd the company’s request to place the Wadsworth compressor in Medina County, Ohio, into service; ENB had sought permission to put the compressor into service on Oct. 19.During October, FERC allowed ENB to place facilities into service that would enable Nexus to transport 970M cf/day; once the 255-mile project is fully in service, it will be able to carry up to 1.5B cf/day of gas from the Marcellus and Utica shale fields to the U.S. Midwest and Gulf Coast and to Ontario. Nexus is a partnership between ENB and DTE Energy
US says Enbridge can start more of Ohio-Michigan Nexus natgas pipeline (Reuters) - U.S. energy regulators on Tuesday approved Canadian energy company Enbridge Inc’s request to put more of its $2.6 billion Nexus natural gas pipeline from Ohio to Michigan into service. In a filing, the U.S. Federal Energy Regulatory Commission (FERC) said it approved the company’s request to put the Wadsworth compressor in Medina County, Ohio, into service. Enbridge sought FERC permission to put the compressor into service on Oct. 19. Nexus is one of several gas pipelines designed to connect growing output from the Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio with customers in other parts of the United States and Canada. Earlier in October, FERC allowed Enbridge to put facilities into service that would enable Nexus to transport about 0.97 billion cubic feet per day (bcfd). One billion cubic feet of gas is enough to fuel about 5 million homes for a day. Once the 255-mile (410-km) Nexus project is fully in service, it will be able to carry up to 1.5 bcfd of gas from the Marcellus and Utica shale fields to the U.S. Midwest and Gulf Coast and to Ontario in Canada. Nexus is a partnership between Enbridge and Michigan energy company DTE Energy Inc (DTE.N). When it began construction of Nexus in late 2017, Enbridge estimated it would be able to complete the project in the third quarter of 2018. Enbridge said it completed Nexus in September when it asked FERC for permission to put part of the pipeline into service. New pipelines built to carry gas from Appalachia have enabled shale drillers there to boost output to an estimated record high of around 29.8 bcfd in November from 26.1 bcfd during the same month a year ago. That represents about 36 percent of the nation’s total dry gas output of 83.2 bcfd expected on average in 2018. The Appalachia region produced just 1.6 bcfd, or 3 percent of the country’s total production, in 2008.
Ohio's Utica Shale Country May See a Boost from Chesapeake Energy Leaving the Play- WKSU - There is a new leading player in the development of Ohio’s oil and natural gas drilling industry. ENCINO Energy just bought all of the Utica shale holdings of Chesapeake Energy and says it plans to invest in those, and to keep the former Chesapeake Utica headquarters in Louisville in Stark County. ENCINO was formed a year ago by long-time Texas-based energy executives and the Canadian Pension Plan Investment Board. It’s paying $2 billion dollars for nearly one million acres of drilling rights held by Chesapeake and the five story headquarters in Louisville. Stark Development Board President Ray Hexamer says ENCINO’s entry into the Utica is encouraging for both Louisville and the region. “For a community, you’d rather be someone’s first and biggest asset than one of five hundred assets. And they’re all very skilled in this industry so if they paid the amount money that they did, they see the potential.” Chesapeake sold its Utica assets to help pay down debt it took on while expanding in shale plays across the country.
Final two laterals on Rover Pipeline enter service -- The final two laterals of the Rover Pipeline project, along with the associated compression and metering facilities, recently entered service, Energy Transfer LP said recently. The Federal Energy Regulatory Commission (FERC) issued approvals last week to commence natural gas service on the Sherwood Lateral and the CGT Lateral in West Virginia.Rover has been operational since Aug. 31, 2017, but the final approval enables the pipeline to add an additional receipt point and delivery point for natural gas production. The 713-mile pipeline transports up to 3.25 billion cubic feet per day of natural gas from the Marcellus and Utica Shale production areas. It transports natural gas from processing plants in West Virginia, Eastern Ohio and Western Pennsylvania to the Midwest Hub near Defiance, Ohio, for delivery to markets across the U.S., as well as to the Union Gas Dawn Storage Hub in Ontario, Canada.
Judge weighs other courts’ pro-pipeline rulings before Penneast decision - Pipeline foes say last-minute request for comments signals court will allow surveying on private land. More than seven months after hearing arguments in his Trenton courtroom over whether to allow the company to use eminent domain to build the pipeline on the properties of uncooperative New Jersey landowners, the judge is expected to rule soon on the hotly contested issue. In a recent note to attorneys, the judge said he had planned to issue the long-awaited decision last Friday, November 2, but put it off to allow a bit more time for the parties to respond to two recent pro-pipeline decisions by other judges that could influence his decision. He cited a ruling by the Third Circuit Court of Appeals that upheld the right of another pipeline company, Transco, to take, or “condemn” private land to build its Atlantic Sunrise pipeline through Pennsylvania and states to the south. Inviting comments And he invited attorneys to comment on the ruling by another New Jersey federal judge, Freda Wolfson, who rejected arguments by the New Jersey Conservation Foundation that a federal permit allowing the eminent domain process to begin was unconstitutional. “In light of the third circuit opinion and Judge Wolfson's opinion, both of which may impact my decision, I will (reluctantly) permit counsel to supplement the record, with a memorandum of law, not more than five (5) pages, commenting on the impact, if any, these decisions have on the issue(s) pending before me,” Judge Martinotti wrote, setting a deadline of last Friday.
TransCanada's Columbia System Set To Boost Gulf-Bound Gas Flows - U.S. Northeast natural gas producers will soon get another boost of pipeline capacity with direct access to Gulf Coast demand. TransCanada’s Columbia Gas and Columbia Gulf transmission systems are gearing up to place into service their tandem Mountaineer Xpress and Gulf Xpress expansions, which will allow another 1 Bcf/d of Marcellus/Utica gas to flow south as far as Louisiana. The new capacity should further ease takeaway constraints for moving gas out of the Northeast, potentially redistributing outflows across the various takeaway routes, while also allowing Appalachian gas supply to grow. The duo of expansions is also the last of the southbound expansions from the Northeast, at least until late 2019, when the embattled Atlantic Coast and Mountain Valley projects are due online. Today, we detail the upcoming expansions. In this series, we have been providing the updates on the latest round of Northeast takeaway projects that have either come online over the past couple of months or are due to come online in short order. The incremental takeaway capacity from these projects will affect the regional as well as the U.S. gas supply-demand balance this winter and beyond. As we detailed in our recent Drill-Down Report, the capacity that’s been phased in this year — first from ETP’s Rover Pipeline this summer and more recently from Williams/Transco’s Atlantic Sunrise and Enbridge/DTE Energy’s NEXUS pipelines — has finally allowed Northeast takeaway constraints to ease and catapulted Marcellus/Utica basis (local outright prices minus the Henry Hub prices) to the strongest levels we’ve seen for this time of year since 2013.
Whole Truth About the Atlantic Coast Pipeline is Unfolding - Dominion CEO Tom Farrell is trying to hide the ball when it comes to the ACP. His Op-Ed column, “Powering Virginia’s future with clean, affordable, and reliable energy,” leaves out the most important part of the story — that the Federal Energy Regulatory Commission allows Dominion shareholders to recover their investment in full and collect a guaranteed 15 percent return on the pipeline, while shouldering none of the risk. That risk falls on the backs of Dominion’s utility customers, who will pay billions in project costs in their power bills.Farrell has a lot on the line. He has to make sure landowners, local governments, property rights advocates, communities, conservationists, and climate change opponents don’t get in the way of his shareholders’ profits. So he’ll say anything he needs to publicly. But what his company tells federal and state agencies is the real story.The demand for new gas-fired power plants isn’t growing in Virginia. But year after year, Dominion submits plans to the Virginia State Corporation Commission that depict aggressive demand growth to justify new infrastructure. And each year, the actual power needs of Virginia fall far short of the company’s predictions. This September, the SCC staff finally said it has “no confidence” in Dominion’s story. We don’t need the ACP.Dominion customers are going to pay for the ACP. At that same September hearing, an expert testified that the pipeline would increase customer costs by as much as $3 billion. Dominion had no response or rebuttal. The ACP has never been about what is best for Virginia, it’s about Farrell getting that 15 percent return for his shareholders.
Virginia has a pipeline problem - – by Ken Cuccinelli, former Virginia attorney general --In Shipman, Va., a family that has held its homestead for generations, tending graves of ancestors and buildings erected by great-great grandfathers, struggles to understand why it must give its land to Dominion Energy. In Lyndhurst, Va., an aging mother who owns 125 acres filled with creeks and springs fights back as the land she has tended for decades to pass on to her daughter is prepped for bulldozing.They are paying a price for Dominion’s Atlantic Coast Pipeline, but they, like every other Dominion customer in Virginia, will also pay hard cash for this unneeded project when the utility bill shows up, thanks to a poorly regulated monopoly scheme that Dominion and its political cronies have constructed.The federal agency that approves these projects and authorizes eminent domain does not analyze whether the project is necessary. Instead, the government simply asks whether anyone has signed a contract to use the pipeline. If so, the federal government deems the project “needed,” completely ignoring the fact that, for the Atlantic Coast Pipeline, about 90 percent of the “contracted” capacity has been sold to sister companies. Dominion Energy is on both sides of this deal. On one side, a Dominion company is building the pipeline. On the other side, Dominion acts as the electric utility for millions of Virginians who have no choice in the matter. Dominion’s utility has signed a 20-year contract with Dominion’s pipeline developer to allegedly provide the natural gas for Dominion’s natural gas power plants. Yet only two of Dominion’s 35 natural gas units in Virginia will connect to the Atlantic Coast Pipeline, and neither of these will use the pipeline as a primary fuel source. I am not opposed to natural-gas pipelines, and I’m not opposed to eminent domain for appropriate and necessary projects. But I am opposed to captive monopoly customers shouldering the cost and risk of Dominion projects that are rubber-stamped without anyone at any level asking whether the pipeline provides value to Virginians.Dominion Energy testified before the Virginia State Corporation Commission in September that the company has not analyzed how much the Atlantic Coast Pipeline will cost its customers. That answer is, frankly, shocking, especially after a non-Dominion expert testified that the pipeline would raise power bills by $2.5 billion over the next 20 years. Dominion intends to charge its customers for all of its Atlantic Coast Pipeline contract costs, regardless of whether it actually uses the pipeline.
4th Circuit orders temporary halt to Atlantic Coast Pipeline - A federal appeals court ordered a temporary halt Wednesday afternoon to a water-crossing permit needed to build the Atlantic Coast Pipeline. The order came one week after a group of environmental and citizen groups asked the court to stay the so-called “Nationwide Permit 12” needed to build the 600-mile-long natural gas pipeline. The pipeline is primarily being built by Dominion Energy, and will run from northern West Virginia into North Carolina. The court shouldn’t allow the reinstatement of the project’s Nationwide 12 permit because it can’t meet two separate conditions, particularly when building the pipeline across the Greenbrier River, lawyers for the environmental and citizen groups wrote. The two conditions, inserted by the West Virginia Department of Environmental Protection to protect the state’s water quality, stipulate that stream crossings must be completed in 72 hours, and that structures authorized by the permit cannot impede fish from swimming upstream or downstream. The Army Corps of Engineers originally issued the permit before the 4th Circuit Court suspended that verification in July. During that time, Atlantic Coast Pipeline changed its Greenbrier River crossing plan and instead decided to use a method that lawyers for the environmental groups say violates those conditions. The Corps issued a reinstatement of the permit in October. Atlantic Coast Pipeline said it intended to start construction again as soon as Thursday. Last week, the environmental group asked the court for a stay to pause construction. The 4th U.S. Circuit Court of Appeals issued the two-page order from Chief Judge Roger Gregory, with the concurrence of Judge James Wynn and Judge Stephanie Thacker Wednesday. In a statement, Aaron Ruby, a spokesman for the pipeline, said the project would temporarily suspend waterbody crossings in the Corps’ Huntington District of West Virginia.
Mountain Valley submits application for N Carolina pipeline (AP) — Mountain Valley Pipeline developers have submitted a request to extend the natural gas pipeline project into North Carolina. The Roanoke Times reports the application filed Tuesday asks for a 73-mile extension for the 300-mile pipeline that is being constructed in West Virginia and Virginia. Mountain Valley proposed the $468 million project called MVP Southgate in April. The Federal Energy Regulatory Commission application says the project would start at the current project's endpoint in Pittsylvania County, Virginia. It would run to Alamance County, North Carolina and provide gas to local distribution company PSNC Energy. Opponents fear environmental damage, object to the pipeline's use of eminent domain to obtain private land and question if the pipeline is needed. Mountain Valley says it hopes to start construction on the new project in 2020.
API report questions Perry's pipeline criticism - - A new report by the American Petroleum Institute pushes back against claims by Energy Secretary Rick Perry that the U.S.natural gas pipelines network is especially vulnerable to cyber attack.The report argues not only that cyber threat are a risk "across the energy system, including at coal and nuclear plants," but that pipeline companies maintain multiple levels of security "to protect against cascading failure.""Cybersecurity is a top priority," said API President Mike Sommers. "Natural gas and oil pipeline systems are purpose-built to be highly resilient and our members are leaders in cybersecurity." The report follows statements earlier this year by Perry and top officials at the Department of Energy that the power grid was becoming overly reliant on gas, as demand for coal wanes, presenting an opportunity for hackers."You have a greater reliance on natural gas than you've ever had before," Assistant Secretary of Electricity and Energy Reliability Bruce Walker said in an interview in June. "Because of the interdependence on the gas infrastructure, if you take out a pipeline you can also take out 10 to 15 [power] generators." That analysis came as President Donald Trump increased pressure on the Energy Department to stop coal and nuclear power plants from closing, as power companies shift to gas and renewable energy.
How leaky is natural gas production? One puzzle solved - In the US, the effort to slash the CO2 emissions of our electrical grid has actually gotten an early bump from the low price of natural gas. New natural gas plants can produce electricity with about half the emissions of the older, dirtier (and now more expensive) coal plants they’re replacing. But there has been a lot of debate over a drawback that eats into that gain: some of the natural gas leaks into the atmosphere during production and transportation. Precisely how much methane (a greenhouse gas) leaks is important—leak enough and natural gas isn’t actually better than coal.Some estimates have suggested that leaks were a serious problem, while others produced much lower numbers. Now, a new study figures out why the different analyses produced a range of numbers: it depends on the time of day people were looking for leaks. Studies estimating real-world leakage have come in two primary flavors. The first type of study uses what is referred to as a “bottom-up” approach. This involves walking around gas wells and pipeline equipment while measuring leakage. With estimates for each process or type of equipment, you scale up to the big picture based on an inventory of equipment and records of the amount of natural gas produced. The second approach is to go “top-down.” Here, researchers fly research planes upwind and downwind of a natural gas field, measuring the difference in methane concentrations. While you have to subtract the influence of other methane sources—like wetlands and livestock operations—this has the advantage of directly measuring the total leakage rather than adding up a complex estimate.Top-down studies have typically estimated leakage to be around 50 percent higher than bottom-up work, reaching rates that some have argued challenge the benefit of natural gas. A number of explanations have been proposed for this difference, including the idea that bottom-up studies may miss the occasional piece of malfunctioning equipment that accounts for an outsized share of the total leakage. A new study led by Colorado State’s Timothy Vaughn tests a different hypothesis: top-down measurements just happen to be made at a leakier-than-average time of day. Some of the manual interventions by workers—like clearing liquid from sputtering wells—cause extra leakage that obviously occurs during workday hours. Considering the time it takes for the workers to get to a site and set up, this means that leakage tends to peak in the afternoon.
Pipeline peril: Natural gas explosions reveal silent danger lurking in old cast iron pipes - The cast iron natural gas main that served Richard Williams' turn-of-the-century home was built during Shreveport's first gas-fueled boom in 1911. When that pipeline cracked in 2016, the gas built up slowly and silently in a shed behind Williams' home. All it took was an ignition source – a lit cigar – to spark the gaseous fireball that would take his life. The 65-year-old psychiatrist was one of at least 264 people killed in natural gas leaks, fires and explosions since 1990, a USA TODAY analysis of federal data shows. More than 1,600 people have been injured. The natural gas industry and its government regulators have known of the dangers of leaking gas pipelines for decades. After a fatal gas explosion in Allentown, Pennsylvania, in 1990, the National Transportation Safety Board recommended utilities replace their cast iron pipes "in a planned, timely manner." Twenty-eight years later, the utilities still haven't finished the job. The work is expensive, often difficult, and sometimes perilous. Gas crews upgrading cast iron pipe in Massachusetts in September inadvertently ignited fires and explosions that destroyed 131 buildings,killing one person, injuring 21 and leaving hundreds homeless. State utility commissions are under pressure from consumer groups to keep energy rates down. Grassroots groups oppose new pipelines in their neighborhoods. And often there aren't enough qualified pipeline workers to do the work safely. Utilities replacing leaking gas pipes receive only spotty oversight from a fractured system of state and federal safety regulations. Government regulators have largely left it to the utilities to determine for themselves what their biggest safety vulnerabilities are.
US LNG exports dip on week - Liquefied natural gas (LNG) exports from the United States slipped back after rising for three consecutive weeks previously. For the week ending November 7, five liquefied natural gas carriers with a total carrying capacity of 18.2 Bcf departed the United States, compared to 7 cargoes in the previous week, data from the United States Energy Information Administration shows.Four cargoes departed Cheniere’s Sabine Pass LNG facility in Louisianna with one cargo departing Dominion’s Cove Point facility in Maryland. One LNG tanker with the carrying capacity of 3.5 Bcf was loading at Sabine Pass on Wednesday, the data shows. EIA noted in its weekly natural gas report that the natural gas feedstock to US LNG terminals averaged 4.0 Bcf/d during the week under review, compared to 3.7 Bcf/d last week. Cheniere noted in its latest quarterly report that it has already achieved production from its fifth train that is 98.5 percent through the commissioning process. Two more facilities are currently undergoing commissioning, Cheniere’s Corpus Christi plant in Texas as well as Sempra Energy’s Cameron LNG facility in Louisianna that kicked off the commissioning of its support facilities and first liquefaction train of Phase 1. Phase 1 of the Cameron LNG liquefaction-export project, which includes the first three liquefaction trains, is a $10 billion facility with a projected export capability of 12 million tonnes per annum of LNG, or approximately 1.7 billion cubic feet per day. All three trains are expected to be producing LNG in 2019, Sempra Energy said.
Kinder Morgan fires up Sabine Pass pipeline - U.S. energy company Kinder Morgan said it has placed into service part of its Louisiana natural gas pipeline that supplies the fuel to Cheniere’s Sabine Pass liquefied natural gas (LNG) export terminal. Kinder Morgan submitted a notification of the partial pipeline project in-service to the US Federal Energy Regulatory Commission on Tuesday. The $122 million pipeline will provide 0.6 billion cubic feet per day (bcfd) of gas to the fifth train at the Sabine Pass terminal. Cheniere is currently commissioning the fifth unit at the Sabine Pass terminal, first such facility to ship US shale gas-sourced LNG overseas. It is expected to enter commercial service in the first quarter of 2019. Cheniere is developing up to six trains at the Sabine Pass site, each capable of producing 4.5 million tonnes per year of the chilled fuel.
Poland signs deal for long-term deliveries of US gas - Poland’s main gas company signed a long-term contract Thursday to receive deliveries of liquefied natural gas from the United States as part of a larger effort to reduce its energy dependence on Russia. The state company PGNiG signed the 24-year deal with American supplier Cheniere during a ceremony in Warsaw attended by U.S. Energy Secretary Rick Perry and Polish President Andrzej Duda. Piotr Wozniak, the president of PGNiG’s management board, said the price is 20-30 percent lower than what Poland pays its current supplier in Russia. Under the deal, Poland will receive some 700 million cubic meters of gas from 2019 through 2022, and 39 billion cubic meters from 2023 through 2042. Poland’s annual consumption of gas is almost 16 billion cubic meters, 25 percent of which is covered from Poland’s own deposits.
Toshiba sheds U.S. LNG business at $800 million loss -- Japanese conglomerate Toshiba Corporation has decided to withdraw from the US LNG business transferring all the outstanding shares of Toshiba America LNG Corporation to a third-party buyer. While the buyer will pay $15 million for the transfer, under the arrangement, Toshiba, through its unit Toshiba Energy Systems & Solutions Corporation, will pay 93 billion Japanese yen ($821 million) to the buyer, the company said in its statement on Thursday.Under the transfer agreement, all contracts related to the sale of U.S. LNG entered into by the Toshiba Group, including those between Toshiba and customers will either be transferred or canceled.The transfer finalization is scheduled for March 2019, marking complete withdrawal from the LNG business. Toshiba further noted the name of the third-party buyer will be unveiled as soon as the contract is completed.The Japanese conglomerate decided to part with its U.S. LNG assets following the inability to find buyers for the 2.2 million tons of LNG booked at the Freeport LNG terminal in Texas, under a 20-year deal. Toshiba has already booked an $818 million charge for exiting the LNG business and said the move is to avoid further losses."
Tellurian to tie Driftwood LNG partners by year end - US LNG Export project developer, Tellurian, continued making strides forward with its Driftwood LNG project expecting to name project partners soon. During the third quarter of the year, Tellurian received a draft environmental impact statement (EIS) from the United States Federal Energy Regulatory Commission (FERC) for the Driftwood LNG terminal facility and the associated Driftwood pipeline. The company has also secured financing for certain drilling and development activities and advanced the sale of LNG and Driftwood Holdings’ partnership interests, with approximately 35 customer/partners conducting due diligence. President and CEO Meg Gentle said, “Completing the draft EIS is a significant milestone in the LNG terminal regulatory process and reflects FERC’s commitment to deliver the final EIS in January.” She added that company expects to announce partners for the Driftwood LNG project by the end of 2018, with the construction set to start in the first half of 2019 and production of LNG to start by 2023. Tellurian ended its third quarter of 2018 with approximately $172.3 million of cash and cash equivalents. Tellurian reported a net loss of approximately $33.2 million for the three months ended September 30, 2018.
New Gulf of Mexico projects expected to reverse natural gas production declines -Natural gas production in the U.S. Federal Gulf of Mexico (GOM) has been declining for almost two decades. EIA expects nine new natural gas production projects to start in 2018 and another seven to start in 2019. These 16 projects have a combined estimated natural gas resource of about 800 billion cubic feet and may reverse some of the declines in GOM production.The GOM marketed natural gas production has been mostly declining on an annual basis since 1997, when EIA first recorded this data. In 1997, production stood at 14.3 billion cubic feet per day (Bcf/d), accounting for 26% of the United States’ total annual marketed natural gas production. By 2017, natural gas production in GOM declined to 2.9 Bcf/d and accounted for only 4% of the total U.S. annual marketed production.This decline occurred for several reasons. The number of producing natural gas wells in the GOM declined by 73% between 2001 and 2017—from 3,271 to 875. The technology and expertise required to produce oil and natural gas from the seabed is expensive and specialized, and costs of production platforms often exceed a billion dollars. With the growth in exploration and production activities in shale gas and tight oil formations, it became more economic to drill onshore in these basins.In addition, most of the natural gas produced in the GOM is associated-dissolved (AD) natural gas produced from oil fields, and although older oil wells in the GOM tend to have higher natural gas content, newer wells are more oil-rich, resulting in less AD natural gas per well. According EIA’s Natural Gas Annual, 59% of gross withdrawals of natural gas in the GOM were from oil wells in 2017. In 1997, however, only 13% of gross withdrawals were of AD gas co-produced with oil. In 2016, all new projects in the GOM occurred in the Mississippi Canyon and Green Canyon protraction areas, located in the Central GOM planning area, and had an average depth of 4,283 feet and total resource level of 1,429 Bcf. Based on the data provided to the Bureau of Safety and Environmental Enforcement, no new GOM projects started up in 2017. For 2018–19, 9 of the 16 projects are located in Mississippi Canyon and Green Canyon protraction areas. Three projects in Garden Banks, West Cameron, and Keathley Canyon are also part of the Central GOM planning area. Two of the projects in Viosca Knoll and Desoto Canyon are in the Eastern GOM planning area. Alaminos Canyon and Sigsbee Escarpment are in the Western GOM planning area. Average project depth is expected to be 4,544 feet in 2018 and 5,585 feet in 2019.
Prices Rise Despite Record Production As The Storage Deficits Grow - Highlights of the Natural Gas Summary and Outlook for the week ending November 2, 2018 follow. The full report is available at the link below.
- Price Action: The December contract rose 5.9 cents (1.8%) to $3.284 on a 18.5 cent range ($3.318/$3.313).
- Price Outlook: Due largely to the November expiration, prices established both a new high and low. Of the 983 weeks since 2000, there have 112 instances where both a new high and low were established compared to only 92 where neither a new high or low was established. Physical data remains bearish as the non-linear impact moderate temperatures reduced demand at the same time pipeline data suggested US production reached a new record level. However, pipeline data also indicated flows to US LNG export facilities reached a new record as well, partially mitigating rising US production. CFTC data indicated a (4,069)contract reduction in the managed money net long position as longs liquidated and shorts added Total open interest fell (253,607)to 3.799 million as of October 30. Aggregated CME futures open interest fell to 1.517 million as of November 02. This is the lowest open interest since July 30, 2018. The current weather forecast is now cooler than 7 of the last 10 years. Pipeline data indicates total flows to Cheniere’s Sabine Pass export facility were at 3.3 bcf. This flow volume suggests feed gas is entering Train 5. Cove Point is net exporting 0.8 bcf.
- Weekly Storage: US working gas storage for the week ending October 26 indicated an injection of +48 bcf. Working gas inventories rose to 3,143 bcf. Current inventories fall (632) bcf (-16.7%) below last year and fall (632) bcf (-16.7%) below the 5-year average.
- Supply Trends: Total supply rose 0.2 bcf/d to 81.4 bcf/d. US production rose. Canadian imports fell. LNG imports fell. LNG exports rose. Mexican exports rose. The US Baker Hughes rig count fell (1). Oil activity decreased (1). Natural gas activity was unchanged +0. The total US rig count now stands at 1,067 .The Canadian rig count fell (2) to 198. Thus, the total North American rig count fell (3) to 1,265 and now exceeds last year by +175. The higher efficiency US horizontal rig count rose +2 to 929 and rises +165 above last year.
- Demand Trends: Total demand rose +0.9 bcf/d to +73.7 bcf/d. Power demand fell. Industrial demand rose. Res/Comm demand rose. Electricity demand fell (829) gigawatt-hrs to 68,635 which exceeds last year by +1 (0.0%) and trails the 5- year average by (143)(-0.2%%).
- Nuclear Generation: Nuclear generation fell (665)MW in the reference week to 76,458 MW. This is (9,003) MW lower than last year and (3,531) MW lower than the 5-year average. Recent output was at 78,906 MW.
- The heating season has begun. With a forecast through November 16 the 2018/19 total cooling index is at (186) compared to (238) for 2017/18, (83) for 2016/17, (117) for 2015/16, (249) for 2014/15, (258) for 2013/14, (283) for 2012/13 and (237) for 2011/12. Attachments: Natural Gas Summary and Outlook for the week ending November 2, 2018
Natural Gas Prices Spike On Colder US Forecast -- Natural gas prices spiked Monday after a new long-term North American weather forecast found much higher heating demand than previously expected. The latest forecast from Bespoke Weather Services suggests above-average gas demand extending from Nov. 9 through Nov. 18. “Our sentiment has ticked slightly bullish in that weekend weather models were some of the most dramatic in recent memory, with all guidance adding an incredible amount of heating demand against the odds,” Bespoke said. Start building your wealth. Signup to build your successful investment portfolio. Bespoke said near-term heating demand will likely peak Nov. 14 and that warmer weather trends will likely return in the second half of the month. According to AccuWeather, the U.S. will see a return of the El Nino weather pattern this winter, resulting in much colder-than-average temperatures in much of the Northeast, mid-Atlantic, Great Lakes and Ohio Valley of the country, particularly in January and February. “New York City and Philadelphia may wind up 4 to 8 degrees colder this February compared to last February,” senior meteorologist Paul Pastelok said in October. The Southwest could experience a dry winter with temperatures 2 to 4 degrees warmer than usual, but Americans in the Southeast, Tennessee Valley and Gulf Coast region should not expect a repeat of the above-normal February temperatures experienced in February 2018, the meteorologist said. The Price Action Natural gas prices traded higher by 7.5 percent to $3.53 MMBtu on Monday and are now up 18 percent year-to-date. The huge price spike also drove extreme volatility in some popular natural gas ETFs as well:
Major Mid-November Cold Shot Sends Natural Gas Flying - One of the largest weekend heating demand expectation additions in recent memory shot the front of the natural gas futures curve far higher this morning, with the December contract gapping massively up last evening and settling up over 8.5% on the day. Our Morning Update for clients showed a massive increase in Gas Weighted Degree Days over the weekend. This led us to hold a Slightly Bullish sentiment on the day even with the December contract already up 6.7% on the day. Sure enough, prices shot higher from there through the morning on significant strength in the physical market as well. Climate Prediction Center forecasts have been trending colder in an effort to catch up with some of the very significant cold shown on model guidance. This comes after weaker cold has already been resulting in some storage draws across the East. Columbia Gas Transmission (TCO) reported a small draw of .64 bcf this past week, which was just a touch below the draw seen the week prior. The intensity of this cold certainly caught many by surprise. Though we were not forecasting cold of this intensity, we closed our Pre-Close Update on Friday by highlighting huge uncertainties and risks into the weekend, "...confidence is very low due to this extreme model volatility...[w]ith risks that early Week 2 cold trends even stronger and that models still struggle to identify the pattern we expect, our sentiment is temporarily back neutral, as prices can temporarily run early next week on any colder trends before reversing once expected warmth arrives." As seen this morning, those cold trends easily outweighed any warm risks. Now traders are attempting to determine how long any cold will last and just how intense it will be.
Natural gas prices surge on surprise forecast for cold weather across US - Natural gas prices are surging after a dramatic change to U.S. weather forecasts indicates that winter-like temperatures will grip much of the country in the coming days. The surprise forecast comes on the heels of a two-month rally that pushed natural gas futures up 12 percent through last week. Prices have lately been trading at highs going back to January as U.S. stockpiles of the fuel sit near the lowest levels in over a decade going into the winter season. On Monday, natural gas prices rocketed another 8.6 percent higher. Prices hit a session peak of $3.58 per million British thermal units on Tuesday, the highest level since Jan. 29. "There was a big change in the weather forecast. Not only did it turn colder but it turned much colder in some key heating regions," said Jen Snyder, director of RS Energy's gas market practice. Over the last few days, warm weather patterns broke down, giving way to forecasts that showed colder-than-normal temperatures taking hold throughout much of the country. Forecasts are now pointing to temperatures in mid-November that are more typical of the middle of December, with cold bursts expected in the Midwest, across Texas and the South and throughout New England. "This is one of the largest weekend changes we've seen," said Jacob Meisel, chief weather analyst at Bespoke Weather Services. "The order of magnitude of cold change caught everyone off guard." Analysts say the run-up reflects concerns that natural gas held in underground storage throughout the country will run low toward the end of the winter, making it harder to deliver the commodity in some regions. To keep natural gas storage levels adequate during a cold winter, prices need to rise enough to incentivize drillers to increase production or force some consumers to turn to other fuel sources.
U.S. natural gas prices surge on cold weather forecast- Kemp (Reuters) - U.S. natural gas prices have jumped to their highest in nine months as forecast cold weather across much of the country has reminded traders of the risks posed by low gas inventories going into winter. Gas stocks have fallen well below the five-year range since the summer and are now at the lowest level for the time of year since 2003, according to data compiled by the U.S. Energy Information Administration. Until the past few days, traders appeared unconcerned about low inventories because output is growing rapidly and the development of El Nino over the Pacific should lead to a warm winter over the northern part of the country. But the much colder than normal temperatures forecast across much of the United States in the next fortnight are a reminder that El Niño is not the only influence on weather and heating demand. Even if the coming winter proves warmer than average, there is still scope for extensive and extended cold periods that could put further pressure on gas stocks. Natural gas futures prices for gas delivered in December have jumped to almost $3.57 per million British thermal units from just $3.19 on Oct. 30 and just $3.00 on Sept. 28. Higher gas prices will encourage owners of gas-fired power generators to run them for fewer hours in the next few weeks to conserve scarce gas stocks, while coal-fired power plants are likely to run more. Heating demand has been running close to or slightly below the long-term seasonal average so far during the current heating season which started on July 1 (https://tmsnrt.rs/2D6UVBd).But the forecasts for much colder than normal weather over the next two weeks will push cumulative heating demand far above the seasonal norm.Almost the entire United States, except California and southern Florida, as well as Alaska and Hawaii, will experience colder than normal temperatures in the middle of November. Colder than normal temperatures are expected to persist over much of the country through at least the next two weeks, according to the U.S. government's Climate Prediction Center.
Natural Gas Settles Down As Forecasts Stabilize - It was a much slower day in the natural gas market, as we saw the December contract settle down a bit less than half a percent with strength further out along the curve. In what was a new development for the market the February contract ended up taking the lead today. The result was a quick reversal in the Z/F December/January spread today after a spike higher yesterday. A slower trading day was not particularly surprising, as in our Morning Update for clients we noted a slight tick lower in forecast GWDDs that could help keep prices in check. We did outline ..."risk up to $3.6 on any cash strength" but also that "long-range warm risks have ticked up from yesterday" which would prevent much more of a run-up in prices. The December contract got up to around $3.58 before pulling back later in the day, though afternoon model guidance did increase medium-term cold intensity, as seen on recent Climate Prediction Center probabilistic forecasts. For clients today we released our updated Seasonal Trader Report, which puts into context this November cold shot and outlines how long we expect this cold to last, how temperatures should trend into December, and how temperature risk is skewed through early 2019. In it we looked at the latest CFSv2 forecast for weak El Nino conditions through the coming winter, putting it in context of other model forecasts and our expectations. We also held our subscriber-only live chat on the Enelyst platform, where we looked at the latest natural gas balances, 3-week and 5-month weather forecasts, and outlined our price expectations moving forward. One data point was a recent dip in LNG exports following near-record levels over the past weekend.
Model Craziness Stuns Natural Gas - It was another slower day for natural gas as traders struggled to read into recent weather model trends that have been bouncing around. On the day, the December natural gas contract settled perfectly flat to yesterday. There was further weakness out along the winter natural gas strip, though. As a result the December/January natural gas spread narrowed decently on the day, though is still off its narrows set back on Monday. Our Morning Update highlighted that we held "neutral" natural gas sentiment due to significant weather model volatility and only minor overnight GWDD losses. This ended up verifying well with the December natural gas contract settling flat on the day, and we saw some factors on the balance side of the equation that would likely provide some support for prices today that we highlighted in our Note of the Day. Now, traders are preparing for an EIA announcement tomorrow that should show a slightly larger storage build than we saw last week thanks to a bit less weather-driven demand. This will obviously be weighed against the latest overnight weather model forecasts, with the Climate Prediction Center showing more mixed risks now in the long-range. We highlighted these mixed risks in our Afternoon Update and broke down where we saw weather models trending and accordingly how natural gas risk appeared skewed moving forward. We also outlined our estimate for the natural gas EIA print tomorrow, updating our market sentiment and looking into the latest S/D balance trends of the day.
US natural gas storage volume rises 65 Bcf to 3.208 Tcf- EIA — The amount of natural gas in US storage facilities increased 65 Bcf to 3.208 Tcf in the week that ended November 2, the US Energy Information Administration reported Thursday. An S&P Global Platts survey of analysts called for a 55 Bcf build in stocks. The injection was nearly triple the 22 Bcf build reported in the corresponding week in 2017 as well as 35.4% higher than the five-year average addition of 48 Bcf, according to EIA data, and same amount larger than the build in the week prior.As a result, stocks were 580 Bcf or 15% below the year-ago level of 3.788 Tcf and 621 Bcf or 16% under the five-year average of 3.829 Tcf.The NYMEX December gas futures contract fell 3.7 cents to $3.518/MMBtu following the 10:30 am EST (1530 GMT) storage data announcement.The EIA reported a 5 Bcf injection in the East to raise stocks to 831 Bcf, compared with 925 Bcf a year ago; a 24 Bcf build in the Midwest to lift inventories to 980 Bcf, compared with 1.111 Tcf a year ago; a 2 Bcf addition in the Mountain region to boost stocks to 182 Bcf, compared with 224 Bcf a year ago; a 3 Bcf build in the Pacific to nudge inventories up to 265 Bcf, compared with 317 Bcf a year ago; and a 30 Bcf injection in the South Central region to hoist stocks to 949 Bcf, compared with 1.210 Tcf a year ago.Total inventories are now 88 Bcf under the five-year average of 919 Bcf in the East, 113 Bcf below the five-year average of 1.093 Tcf in the Midwest, 37 Bcf beneath the five-year average of 219 Bcf in the Mountain region, 86 Bcf less than the five-year average of 351 Bcf in the Pacific, and 297 Bcf under the five-year average of 1.246 Tcf in the South Central region.
Natural gas prices spike on cold weather and lowest early season supply in 15 years - Forecasts of a more extended November cold snap across the U.S. sent natural gas prices to a near two-year high, as investors worry about rising demand at a time when supplies are at the lowest level to start the winter heating season in 15 years. Natural gas futures for December spiked more than 6 percent to $3.76 per mmbtu, the highest price since December, 2016. "We added a lot of heating demand over the last week," said Jacob Meisel, chief weather analyst at Bespoke Weather Services. "This morning, there are more risks that the cold is going to linger a bit longer through November, not at the same intensity but it's enough to scare a market that has low storage levels and already has strong physical prices." Meisel said colder than average weather is expected from the Midwest into parts of the Northeast and East Coast. "It looks like around November 16 to 17 we finally see the cold move out, but now there's one more system that could keep cold weather on the East Coast. There's still disagreement on the long range," he said. Weekly government data Thursday showed the amount of natural gas in U.S. storage facilities rose by 65 billion cubic feet to 3.208 trillion cubic feet in the week ended Nov. 2, but that is still 15 percent below the year-ago level of 3.788 tcf, and 16 percent below the five-year average."I think we're looking at the potential for shortages towards the end of the season, depending on how the winter goes," said John Kilduff, partner with Again Capital. In recent years, the U.S. has started the heating season with record supplies that were largely depleted by the end of the season. Kilduff said, however, the amount of gas in storage this year at the Nov. 1 start of the winter heating season is unusually low. The last time supplies were this low in the first week of November was in 2003, and that year natural gas prices hit $12 per mmbtu.
Cash Strength And More Cold Risks Sends Gas Another Leg Up -- The December natural gas contract shot another 5% higher today as physical prices soared off an incoming cold shot and overnight models once again increased medium-range cold risks. Like yesterday, the largest gains were all at the front of the strip, with cash an initial catalyst to break through a number of resistance levels. This cash strength was not particularly surprising, as in our Afternoon Update yesterday we highlighted that, "This recent range from $3.45-$3.6 is much of the reason our sentiment has remained neutral all week as we have not seen a clear catalyst to break out of it. That may be changing, however, as tomorrow we are looking for even stronger cash prices out of Henry Hub and any sustained medium-range HDD additions to potentially move the front of the strip at least into if not briefly above the $3.6 level. We had looked for this earlier in the week as well but cash prices did not exude enough strength to make it possible; stronger cash today and very significant cold this weekend make a morning bounce tomorrow off cash strength more likely." At the time we were looking for that bounce to fail, but did predict a morning bounce. Then our Morning Update turned our sentiment "Slightly Bullish" as we expected the front of the natural gas strip to run towards the $3.7 level with colder overnight weather model trends. Admittedly we were not quite bullish enough, with prices shooting higher over $3.28, though they did come back down to settle near that $3.27 level as well. The market is clearly very sensitive to weather, and we can see that GWDDs near the highest levels of the past 35 years into mid-November are clearly spooking traders. Yet some long-range warm risks did persist that helped reversed prices later in the day today. These are seen on the latest 8-14 Day Climate Prediction Center forecast. Their Week 3-4 forecast featured even more warmth.
Midwest propane inventories enter winter higher than previous five-year average -- Propane inventories (including propylene produced at refineries) in the Midwest United States had been lower than the previous five-year average for much of 2018, but in recent weeks, net additions to inventories increased Midwest propane to levels higher than the previous five-year average. For the week ending October 19, propane inventories in the Midwest, or Petroleum Administration for Defense District (PADD) 2, were 27.8 million barrels, or 792,000 barrels higher than the previous five-year average. The Midwest accounts for about 21% of propane consumption in the United States and typically holds about 30% of U.S. propane inventories. The Midwest has the highest percentage of homes heated by propane in the United States. In addition to being used for space heating, propane is used as a feedstock for petrochemical plants and for drying agricultural crops before storage. On Wednesdays during the winter heating season (October through March), EIA releases the Weekly Propane Market Update, which includes sub-PADD breakouts of propane inventories at refineries, terminals, and natural gas plants. These inventory values exclude any propane already in the pipeline distribution network. EIA only tracks propane inventories in the primary supply chain, so propane inventories held at many local storage and distribution terminals are not included in EIA’s data. Inventories of propane in Kansas and Michigan, the two Midwest states with the largest propane inventories, were both slightly higher than the previous five-year average as of October 19. In EIA’s most recent Winter Fuels Outlook, winter heating expenditures for Midwest households using propane as their primary heating source are expected to decline because, unlike the rest of the country, the Midwest is expected to have warmer weather this winter relative to the 2017–2018 heating season, according to forecasts from the National Oceanic and Atmospheric Administration.
Permian natural gas: more production, infrastructure and demand. - Right now, pipeline capacity out of the Permian is constrained, and consequently some producers have cut back on well completions, more gas is getting flared, and ethane recovery is being driven more by bottlenecks than by gas plant economics. But even with these issues, there are still 487 rigs drilling for oil in the basin (according to Baker Hughes), and all will come along with sizable quantities of natural gas. Not only does this production need to be moved out of the Permian, the volumes need to find a home — either in the domestic market or overseas. These were all issues that were considered by our speakers, panelists and RBN analysts last month at PermiCon, our industry conference designed to bridge the gap between fundamentals analysis and boots-on-the-ground market intelligence. In today’s blog, we continue our review of some of the key points discussed during the conference proceedings.PermiCon was held on October 10 and about 750 industry leaders joined us for the conference. Our content combined six presentations by RBN alongside the views of 14 CEOs and senior executives with significant operations in the Permian. In Part 1 of this series, we discussed the driver of all action in the Permian — production growth, with crude oil growing from 900 Mb/d ten years ago, doubling by 2014, never dropping off after the crude price crash that year, and now up by double again, to 3.5 MMb/d (left graph, Figure 1). We covered the implications of this growth for current crude oil pipeline takeaway capacity (regularly maxed out), Permian crude price differentials (wide, though a little narrower in the near term due to the rush to bring on new capacity), new crude oil pipeline projects designed to relieve the bottlenecks, and the strategies that infrastructure companies are taking to position themselves to be able to ride out any possible overbuild cycle in the crude pipeline capacity market. We also considered the implications for natural gas and NGLs, also up on the very same trajectory as crude oil, because these hydrocarbon streams come right along with crude oil from the wellhead. So Permian gas production is up to nearly 8.7 Bcf/d (middle graph, Figure 1) and NGL production is at about 1.3 MMb/d (right graph, Figure 1).
Halliburton Expects Permian Bottlenecks Gone By End of 2019-- Halliburton Co. expects bottlenecks in America’s busiest oil field to be relieved by the end of next year. A series of catalysts will drive drilling and fracking activity in the Permian Basin of West Texas and New Mexico throughout the next year, Jeff Miller, chief executive officer of the world’s biggest fracker, said during a Bloomberg TV interview on Monday. Explorers’ budgets will reload as the calendar flips to next year, and a host of new pipelines will open in the second half of 2019 to create more takeaway capacity. “It will be a series of events throughout 2019 that occur,” Miller said. “But it’d be easy to see, as we finish the year, things being perfectly normal.” It was a slightly nuanced comment from Miller, who said last month that he was trying to stay “less prescriptive on the timing of those catalysts.”
Houston plant's owner enters multimillion-dollar settlement with EPA - Ohio-based natural gas processor MPLX LP agreed to a settlement worth millions of dollars to resolve purported violations of federal and state clean-air laws, including at the MarkWest Houston plant in Chartiers Township. MPLX – a subsidiary of Marathon Petroleum Corp. which bought MarkWest Energy three years ago – and various subsidiaries entered a consent decree Thursday with the U.S. Environmental Protection Agency to pay a $925,000 fine and spend millions of dollars more to install new emissions monitoring equipment and upgrade pollution controls at 20 of its processing plants. The agreement concerns violations the agency accused the company of committing at the Houston plant and a facility in Evans City, Butler County, plus others in Ohio, West Virginia, Kentucky, Texas and Oklahoma. All of the plants were part of MPLX's purchase of MarkWest. EPA officials said the problems at issue in the settlement included "control of emissions from equipment leaks, pressure relief devices, storage tanks, truck and railcar loading, combustion devices, and process heaters."Documents filed with the consent decree show that environmental officials who made a 2015 visit to the Houston site said the company failed to properly monitor some equipment, so that leak rates were greater than those MarkWest had reported itself. Other violations the inspectors' visit turned up were deficiencies in monitoring and record-keeping. Aside from the fine, MPLX consented to spend about $2.78 million on additions and upgrades to its equipment for controlling emissions of volatile organic compounds at its processing plants. “This agreement will eliminate harmful air pollutants and create cleaner air for communities in six states,” said Susan Bodine, EPA assistant administrator for enforcement and compliance. “By improving air pollution control at 20 of their gas processing facilities, MPLX will reduce VOC emissions by more than 1,500 tons a year.”
New Pipeline Would Link Cushing to Houston, Possibly Corpus - Magellan Midstream Partners, L.P. (MMP) and Navigator Energy Services have launched a binding open season to gauge customer interest in a pipeline project to ship light crudes and condensate from Cushing, Okla., to Houston, MMP announced Monday. According to MMP, the proposed Voyager pipeline would comprise nearly 500 miles of new 20-inch diameter pipe linking the company’s terminals in Cushing and East Houston. At Cushing, Voyager would link to the Rockies and Bakken via the MMP-operated Saddlehorn pipeline and to Mid-Continent basins by way of Navigator’s Glass Mountain pipeline, MMP stated. Once it reaches Houston, the pipeline reportedly could link to refineries in the region as well as crude oil export export facilities, the company added. The open season documentation states that a new entity called “Magellan Navigator” would operate Voyager, which would have an initial capacity of at least 250,000 barrels per day and would handle up to four light crude and condensate grades. MMP also stated Monday that it is evaluating a potential crude oil pipeline from Houston to Corpus Christi as well as a crude export terminal on Harbor Island in Corpus Christi. The terminal would be capable of loading very large crude carriers (VLCCs), the company stated. The open season ends Jan. 31, 2019. Pending a successful open season and regulatory process, MMP stated that the pipeline could begin service by the end of 2020.
Earthquake prompts shutdown of fracking wastewater well in Oklahoma - — State oil and gas regulators in Oklahoma have ordered the indefinite shutdown of a disposal well after an earthquake struck nearby. The 3.3 magnitude quake was reported Sunday night near Bridge Creek, about 20 miles southwest of Oklahoma City. There are no reports of damage or injuries.Thousands of earthquakes have been recorded in Oklahoma in recent years, with many linked to the underground injection of wastewater from oil and natural gas production. Scientists have also linked earthquakes in other states, including Ohio, to wastewater injection. Late Sunday, the Oklahoma Corporation Commission issued a directive calling for the shutdown of the well near Bridge Creek, pending further investigation.
New Mexico, Oklahoma lead big rig count spike - The number of active drilling rigs jumped in the U.S. jumped by 14 from last week, courtesy of New Mexico and Oklahoma each gaining four net rigs. Pennsylvania, Colorado and the offshore waters of Louisiana all saw increases of multiple rigs as well. Texas lost one net rig because South Texas' Eagle Ford Shale declined by three active rigs. The U.S. is up to 1,081 active rigs with nearly half of them -- 532 rigs -- operating in Texas, according to weekly data collected by Baker Hughes, a GE company. Of the total, 886 of the rigs are drilling for oil with the remained seeking natural gas. The booming Permian Basin in West Texas and New Mexico counts 492 rigs, which is more than 55 percent of all the nation's oil rigs.Because of pipeline shortages in West Texas, many companies are continuing to drill Permian wells while leaving more of them uncompleted for the time being until new pipelines come online. The total count is up from an all-time low of 404 rigs in May 2016. With this week's jump, the oil rig count is down 45 percent from its peak of 1,609 in October 2014, before oil prices began plummeting. However, rigs today are able to drill more wells than before and to deeper depths to produce more oil and gas. That's largely why the U.S. is producing record volumes of crude oil and natural gas.
Well Setback Measure Fails in Colorado - A controversial proposal on the ballot in Colorado that would have dramatically limited new oil and gas development in the state failed at the polls Tuesday. According to returns from the Colorado Secretary of State’s office, Proposition 112 failed to gain majority support from voters. The measure, which would have required any new oil and natural gas development in the state to be at least 2,500 feet away from occupied structures, water sources and areas deemed “vulnerable,” lost by an approximately 57- to 43-percent margin. A July 2018 Colorado Oil and Gas Conservation Commission analysis of the proposal – known at the time as “initiative #97” while supporters were still collecting signatures to get it on the November ballot – concluded that:The measure would put approximately 54 percent of Colorado’s total land surface off-limits to new oil and gas development. Eighty-five percent of the state’s non-federal land would be inaccessible. Among Colorado’s top five oil and gas-producing counties, a combined 61 percent of the surface acreage – 94 percent of non-federal land – would be unavailable for new development. The head of the American Petroleum Institute’s Colorado affiliate expressed relief that Proposition 112 failed. “Colorado plays a leading role in America’s energy revolution, and our state has spoken loud and clear that we recognize the importance of the industry to the state’s economic well-being,” Colorado Petroleum Council Executive Director Tracee Bentley said in written statement sent to Rigzone late Tuesday. “Proposition 112 would have hurt more than just the natural gas and oil industry, as 77 percent of the 43,000 jobs it would have eliminated in year one would have come from outside the energy sector.” “Proposition 112 was the single-worst ballot measure I have seen in all my years as a Coloradan,” Amy Oliver Cooke, director of Spirit of Colorado, said in a written statement. “A handful of Boulder-based activists, funded by Washington, D.C. fracktivist cash who hate our Colorado spirit and way of life, tried to destroy our state’s economic future with one fell swoop. We are thrilled that Colorado voters recognized the dangers of Proposition 112 and soundly defeated this measure.”
Colorado voters reject stricter rules on new oil, gas wells - Colorado voters rejected a proposal Tuesday that would have tightly restricted where new oil and gas wells could be drilled across the state — the latest development in a contentious debate about how much control state and local governments can exert over the powerful fossil fuels industry. Proposition 112 would have required that new wells be at least 2,500 feet (750 meters) from occupied buildings and "vulnerable areas" such as parks, creeks and irrigation canals. It also would have allowed local governments to require even bigger buffer zones.The state currently requires that wells be 500 feet (150 meters) from homes and 1,000 feet (300 meters) from schools. Opponents warned that the measure would ruin the oil and gas industry and drag down other economic sectors in Colorado, which ranks seventh in the nation in domestic oil production and fifth in natural gas production. "We appreciate Colorado voters who realized what a devastating impact this measure would have had on our state's economy, school funding, public safety and other local services," said Karen Crummy, a spokeswoman for the industry-funded group Protect Colorado. She pointed to a state analysis that determined the measure would have put 85 percent of non-federal land in Colorado off-limits to drilling. The proposal did not apply to federal land, which makes up about 36 percent of the state. According to the analysis by the Colorado Oil and Gas Conservation Commission, which regulates the industry, the measure also would have prevented drilling on large swaths of land along the Front Range urban corridor, including in Weld County where houses and other developments sit atop the expansive Denver-Julesburg Basin. A consortium of business groups released a study in July concluding that by 2030, there would be up to 147,800 fewer jobs in Colorado, up to $1.1 billion in lost tax revenue for state and local governments and up to $141 billion in lost oil and gas production if the measure passed. But the dire warnings didn't stop backers from collecting an estimated 123,000 valid signatures to put the proposal on the ballot. Voters also rejected an industry-backed companion measure that would have made it easier for property owners to seek compensation from the government for actions that diminish their property's value.
Oil drilling stocks surge after Colorado voters reject restrictions on industry --Oil and gas companies with operations in Colorado are seeing their shares jump after voters rejected a ballot proposal that would have placed tough restrictions on drilling in the Centennial State.Colorado's proposition 112 would have prohibited energy companies from drilling within about half a mile from homes, schools, businesses and water sources. The measure would have cut the state's projected oil and gas output roughly in half by 2023, according to an estimate by S&P Global Platts Analytics.Shares of Bonanza Creek Energy and Extraction Oil & Gas, two drillers that produce solely from Colorado's Wattenberg Field, surged about 9.5 percent and 13.5 percent, respectively. Shares of PDC Energy, another Wattenberg player, were up nearly 8 percent shortly after the opening bell on Wednesday.Shares of more diversified drillers with a footprint in Colorado were also higher. Anadarko Petroleum's shares rose 6.5 percent in premarket trading, while Noble Energy's stock price jumped nearly 4 percent. While Colorado voters rejected Proposition 112, they made Democratic Jared Polis their new governor. Polis campaigned on generating 100 percent of Colorado's electric power from renewable energy sources by 2040.
Highland to resume fracking operations at East Denver project this week - Natural resources company Highland said Wednesday it would resume hydraulic fracturing operations for the six new wells at its East Denver project this week. Flowback from the new wells was expected in late December 2018 or early January 2019, the company said. In a positive step for the Colorado oil and gas industry, proposition 112 – which would have increased well set-back limits for occupied buildings and school structures – was not passed in the State of Colorado following the 6 November 2018 election results, the company said. Highland said talks were ongoing with potential partners to develop its West Denver project.
Shale oil producers are stuck with serious cash flow -- Companies in the shale oil exploration business have been staring down the barrel for quite some time now, as their operating cash flow remains lower than capital expenditure incurred. Only nine out of 33 shale oil exploration and production companies have shown positive cash flow this year till date, and this is concerning as companies have failed to show profit even with oil prices climbing steadily from 2016. The increased debts being accrued by the shale companies mean that they do not have the bandwidth to invest in future production or well acquisitions, which would further dampen its prospects on showing positive numbers in its quarterly sheets. Add to this, the shockingly decremental rates of oil production in shale wells, which unlike other oil production sites, see a 70 to 90% fall in production within three years from production start. These factors put together would mean rapidly declining investor trust, which might turn catastrophic unless shale oil production companies figure out a way to keep production levels high, while turning in positive cash flow. In a postelection news conference Wednesday, the president said he and Democrats "have a lot of things in common on infrastructure." Ever since launching his White House bid, the real estate billionaire had lambasted what he's categorized as "horrible infrastructure problems" throughout the United States. Newly energized Democrats are ready to pass a "pretty big, bold bill" and help pay for it by raising the federal gasoline tax for the first time in 25 years, LaHood said. The federal gas tax has been 18.4 cents, 24.4 cents for diesel, since it was last raised in 1993.
Two years after Standing Rock, another oil pipeline faces tribal opposition -- Since 1993, Dawson County Sheriff Ross Canen has dealt with small town stuff like drunk drivers, domestic violence and meth use. But now that developers say the controversial Keystone XL pipeline will be constructed in his backyard, Canen is preparing for a potential Standing Rock-style protest. His rural county has never seen any kind of protest before. “We’re not looking forward to it,” he said. “But we’re preparing for it. And we’re going to handle whatever comes up.” If built, Keystone XL would carry oil over 1,000 miles from the Alberta tar sands to Nebraska. Developers of the pipeline say it’s safe and could pump billions of dollars into the U.S. economy. Though the project was killed by the Obama administration, it was recently revived under Trump. In Montana, the pipeline would cross the Missouri River, an important source of water for the nearby Fort Peck Indian Reservation. Katie Thunderchild lives there and is worried the pipeline could leak. “And where does that leak go? It goes into the water,” she said. “And we drink that water, and we get sick, and it just goes on down the line,” Thunderchild said.Keystone XL developer TransCanada said the pipeline will be buried more than 50 feet below the river. Federal regulations require a pipeline is buried four feet beneath a major river crossing. TransCanada has state-of-the-art monitoring systems that can register pressure drops and can shutdown the pipeline within minutes. But Thunderchild said she’s also worried about the kind of people pipeline construction could bring. This is an isolated place — everyone knows everyone — but Keystone’s developers are building temporary housing near the Fort Peck Indian Reservation for a surge of out-of-state workers. “What is their background? Did they commit a crime, does it involve children, guns, all of that other stuff. Drugs?” she said. Thunderchild has two young daughters, so the pipeline project scares her. She isn’t alone.In at least six other states, tribes are opposing energy infrastructure projects like Keystone XL. Since Standing Rock, there’s been a lot more scrutiny over oil pipelines. Lawsuits against them have ramped up. Here in the northern Great Plains, the Rosebud Sioux and the Fort Belknap Indian Community have already sued in an effort to stop Keystone XL. They say the Trump administration ignored environmental impacts and treaty rights .
US court halts construction of Keystone XL oil pipeline - A federal judge on Thursday halted construction of the Keystone XL oil pipeline, arguing that President Donald Trump’s administration had failed to adequately explain why it had lifted a ban on the project. The ruling by Judge Brian Morris of the US District Court for the District of Montana dealt a stinging setback to Trump and the oil industry and served up a big win for conservationists and indigenous groups. Trump granted a permit for the $8 billion conduit meant to stretch from Canada to Texas just days after taking office last year.In doing so the administration overturned a ruling by then president Barack Obama in 2015 that denied a permit for the pipeline, largely on environmental grounds, in particular the US contribution to climate change. “An agency cannot simply disregard contrary or inconvenient factual determinations that it made in the past, any more than it can ignore inconvenient facts when it writes on a blank slate,” Morris wrote.
Federal judge blocks Keystone XL pipeline, saying Trump administration review ignored ‘inconvenient’ climate change facts - A federal judge temporarily blocked construction of the controversial Keystone XL pipeline, ruling late Thursday that the Trump administration had failed to justify its decision granting a permit for the 1,200-mile long project designed to connect Canada’s oil sands fields with Texas’s Gulf Coast refineries.The judge, Brian Morris of the U.S. District Court in Montana, said the State Department ignored crucial issues of climate change to further the president’s goal of letting the pipeline be built. In doing so, the administration ran afoul of the Administrative Procedure Act, which requires “reasoned” explanations for government decisions, particularly when they represent reversals of well-studied actions.It was a major defeat for President Trump, who attacked the Obama administration for stopping the project in the face of protests and an environmental impact study. Trump signed an executive order two days into his presidency setting in motion a course reversal on the Keystone XL pipeline, as well as another major pipeline, Dakota Access.The ruling highlights a broader legal vulnerability in the Trump administration’s push to roll back Obama-era environmental protections. Since Trump took office, federal courts have found repeatedly that his agencies have short-circuited the regulatory process in areas ranging from water protections to chemical plant safety operations. Robust environmental and administrative procedure laws, many dating back to the 1970s, have given the administration’s opponents plenty of legal ammunition.Thursday’s decision does not permanently block a federal permit for Keystone XL, a project of the Calgary-based firm TransCanada. It requires the administration to conduct a more complete review of potential adverse impacts related to climate change, cultural resources and endangered species. The court basically ordered a do-over.In a 54-page opinion, Morris hit the administration with a familiar charge that it disregarded facts, facts established by experts during the Obama administration about “climate-related impacts” from Keystone XL. The Trump administration claimed, with no supporting information, that those impacts “would prove inconsequential,” Morris wrote. The State Department “simply discarded prior factual findings related to climate change to support its course reversal.” It also used “outdated information” about the impact of potential oil spills on endangered species, he said, rather than “'the best scientific and commercial data available.'” The lawsuit prompting Thursday’s order was brought by a collection of opponents, including the indigenous Environmental Network and the Northern Plains Resource Council, a conservation coalition based in Montana.
2018 Was a Rough Election Year for Climate and Anti-fracking Measures - DeSmog (blog) Around the U.S., many states and municipalities were voting in the U.S. midterms on races with implications for limiting the environmental and public health impacts of fossil fuels, particularly drilling and hydraulic fracturing (fracking). On cue, however, the oil and gas industry responded by spending massive amounts of money to defeat these initiatives and elect their preferred candidates, with plenty of success. In just three of those states, energy and fossil fuel companies reportedly spent almost $100 million fighting a price on carbon, a ban on new fracking and drilling near homes, and a more ambitious state renewable energy requirement. In Colorado, the state-wide measure known as Proposition 112 was presented as a common-sense proposal “changing existing distance requirements to require that any new oil and gas development be located at least 2,500 feet from any structure intended for human occupancy.” Current setback requirements for drilling and fracking are 500 feet from homes and 1,000 feet from schools. While the final vote tallies aren’t in yet, the measure definitely was voted down, with current tallies showing over 56 percent of voters deciding against it. Earthquakes caused by fracking wastewater injections were a major topic in the race for corporation commissioner in Oklahoma. Ashley McCray, a 34 year old former activist, was running on was limiting fracking wastewater injection wells to reduce related earthquakes in Oklahoma. While McCray only managed to gain 34 percent of the vote, the local paper The Journal Record credits her campaign with shedding more light on just what the powerful corporation commission does. In Washington state, Initiative 1631 was a high-stakes ballot measure proposing a first-in-the-nation fee on the state's major carbon polluters, including its oil refineries. Based on mail-in ballots counted so far, the measure appears to have been voted down by over 56 percent of voters. In San Luis Obispo County, Measure G would have used the California county’s land-use powers to ban any new oil production on county land and outright ban fracking. Measure G failed with help from $8 million of spending from the oil industry. In Arizona, Proposition 127 was a ballot measure that would have required electric power companies to generate half of the state’s energy from renewable sources by 2030. A total of over $54 million was spent on the campaign, with big money on both sides of the issue. The results weren’t even close: 70 percent of voters vetoed raising the renewable energy requirement. In Nevada, Question 3 asked whether consumers should have the ability to choose their energy provider or continue only buying electricity from NV Energy, which currently holds a monopoly on the market in Nevada. Clean energy advocacy groups like the Sierra Club and Natural Resources Defense Council opposed the measure, saying it would lead to market uncertainty and slow down the significant progress Nevada currently is making with renewable energy and rooftop solar. Billionaire Warren Buffett was among those opposing Question 3, whose No campaign raised approximately $63 million to successfully defeat the amendment, compared to $21 million spent in support. Activists in Youngstown, Ohio, a former steel boom town, are nothing if not persistent in their efforts to ban fracking in an area at the nexus of the Utica and Marcellus shales. 2018 represented their sixth attempt to ban fracking via the ballot and they lost once again, as 55 percent voted down the ban.
ExxonMobil and Chevron Report Strongest 3Q Results in 4 Years - -- Exxon Mobil Corp. and Chevron Corp. delivered their strongest third-quarter results in four years, capping a week in which Big Oil enjoyed profits not seen since the days of $100 crude. Both companies reported double-digit production increases in the Permian Basin, the shale region in Texas and New Mexico that’s propelling total U.S. oil output to an all-time high. The Permian now makes up 11 percent of Chevron’s overall output and is home to Exxon’s fastest-growing large project. The two American supermajors have historically focused on multibillion engineering marvels that take years, and in some cases even decades, to build. Exxon and Chevron changed strategy after oil prices plunged in 2014 and 2015, shifting billions of dollars of investment into shale deposits where wells can be drilled in a matter of weeks. Exxon’s oil and natural gas output surpassed expectations for the first time in 10 quarters, rebounding from the decade-low reached in the second quarter. It said Friday that earnings climbed to $6.2 billion, up 57 percent from a year earlier. At Chevron, record production combined with higher crude prices to double its profit to $4 billion. After many disappointing quarters, Wall Street was pleased with Exxon. “Overall excellent cash generation,” Paul Sankey, an analyst at Mizuho Securities USA LLC, said in a note to clients. “We think the company is on the right course under new CEO Darren Woods, but it is a long turning circle.” The results show that American and European energy majors are in a sweet spot, benefiting from four hard years of belt-tightening, shale investments and now higher oil and gas prices. Royal Dutch Shell Plc posted the biggest cash haul in a decade earlier this week, obliterating analyst’s estimates, while BP Plc’s earnings also surpassed expectations.
Oil and Gas Recruiting to Rise in Coming Months -- Oil and gas recruiters across the world are expecting to recruit more in coming months, according to a recent survey by Rigzone. Rigzone’s global survey targeting oil and gas recruiters and hiring managers—administered Sept. 25 to Oct. 16—yielded 77 completed responses from those actively working as recruiters in the industry. Of the respondents, 83 percent said they recruit for upstream; 49 percent recruit for midstream and 32 percent recruit for downstream. Seventy percent of respondents indicated that they expected to recruit more in the next six months. This comes after years of recruiting activity that was muted due to the industry’s downturn. During that time, companies were focused on staying afloat while slashing capital expenditures – which often included headcount. Sixty-five percent of respondents said they recruited more in first half of 2018 than in second half of 2017. Another 21 percent said they recruited about the same in both halves
EIA Confirms API Data -- US Crude Oil Inventories Surged (Again) This Past Week -- November 7, 2018 -- Link here. Weekly US petroleum data --
- US crude oil inventories: increased by 5.8 million bbls
- US crude oil inventories: now at 431.28 million bbls; the blog's threshold: 400 million bbls
- US crude oil inventories now 3% above the five-year average for this time of year
- refiners are working at 90% capacity; unchanged from last week (89%)
- gasoline production just below 10 million bbls/day
- distillate fuel production right on glide path at 5 million bbls/day
- total product supplied up by another 4% from the same period last year
- distillate fuel supplied is up over 6% from same period last year
- WTI: $61.89.
Ruptured pipeline near Prince George repaired, but gas supply still limited for FortisBC customers - Enbridge has completed repairs on the ruptured pipeline near Prince George, but says natural gas supply will still be limited. Although the 36-inch natural gas transmission pipeline, which ruptured on Oct. 9, was brought back into operation on Oct. 31, Enbridge says the pipeline will run at about 55 per cent of operating pressure and gradually ramp up to 80 per cent through November. In response to the still limited supply FortisBC has sent out an email to its customers asking them to continue to reduce their natural gas use. FortisBC explains the company will have a constrained supply of natural gas and its gas system will be vulnerable in periods of cold weather. “As you may know, on October 9, 2018 an Enbridge-owned natural gas transmission pipeline ruptured near Prince George, BC. Given Enbridge’s pipelines provide the majority of FortisBC’s natural gas, this has had an immediate impact on our natural gas system. Your support and positive efforts to reduce your use of natural gas during this time is immensely appreciated,” reads the Nov. 5 email FortisBC sent out to its customers. “While completion of the repairs is a positive step, the reduced capacity reported by Enbridge means natural gas supply will still be limited. As we head into colder weather, we ask that our customers continue to focus on their conservation measures to help ensure a sufficient supply of natural gas is available for customers over the winter," the email adds.
British Columbia faces lawsuit- Fracking dams exempted from environmental review- A conservation group is suing the B.C. government for exempting two oilpatch dams from environmental rules years after the dams were built. “It seems like the government was really playing catch-up,” Olivia French, the lawyer handling the lawsuit for the B.C. Sierra Club, said Monday. “Progress Energy acted with a bit of disregard for B.C.’s laws — one of those typical, ’Ask for forgiveness, not for permission’ sort of positions.” The lawsuit asks that the exemptions given the two dams be revoked. French said the issue is becoming too common in the province’s northern natural gas fields. A statement of defence has not yet been filed and none of the lawsuit’s claims has been proven in court. Progress Energy is an Alberta company owned by Malaysian oil giant Petronas. The dams were built in 2012 and 2014 to store water used by the company’s fracking operations northwest of Fort St. John, B.C. B.C. Environment Minister George Heyman said legal officials are looking into the two dams. “It’s very clear under the existing Environmental Assessment Act that proceeding with a project without undergoing an assessment is against the act,” he said. “Four months ago we referred the results of our investigation to Crown counsel and it’s now in their hands.” Both dams met legal criteria to require environmental assessments, French said. Provincial law dictates that proposed dams higher than 15 metres must be considered for review. “All the parties agreed that these are technically reviewable projects,” French said. However, neither ever was, despite being well over the 15-metre limit. The lawsuit alleges the province’s environmental assessment office “received information” in 2016 that the Progress dams may be violating the rules. It says an inspector had a look and determined the company had broken the law by building them without getting an environmental permit. “Neither the exemption requests nor the project descriptions for (the dams) provided any explanation from Progress Energy for the non-compliance with the (law),” the lawsuit says.
There will be an oil shortage in the 2020's, Goldman Sachs says - An oil shortage is coming says Goldman Sachs, because firms cannot fully invest in future production. Global oil majors are increasingly looking to invest in lower-carbon areas of the energy sector, as they react to pressure for cleaner energy, both from government policy and investors. "In the 2020's we are going to have a clear physical shortage of oil because nobody is allowed to fully invest in future oil production," Michele Della Vigna, Head of EMEA Natural Resources Research at Goldman Sachs told CNBC Friday. "The low carbon transition will come through higher, not lower oil prices," he told CNBC's "Squawk Box Europe." Della Vigna said "Big Oils" are starting to understand that if they want to be widely owned by investors, they need to show that they are serious about minimizing the amount of carbon in the atmosphere.The Goldman analyst said oil firms only had to look at the steep derating of coal companies over the last 5 years to understand the shift in investor sentiment.Della Vigna said until a transition to full renewables is made, the interim battle will be to own a greater market share of gas-based power. The analyst said with a huge capital cost of gas infrastructure, big state-backed companies looked best placed."We talk about the new seven sisters emerging, dominating the global oil and gas market because nobody else can finance these mega-projects," he said. The "new Seven Sisters" of oil are considered the most influential firms from countries outside the Organisation for Economic Co-operation and Development (OECD). They have been identified as Saudi Aramco, Russia's Gazprom, NIOC of Iran, China National Petroleum Corp, Brazil's Petrobras, Venezuela's PDVSA, and Petronas of Malaysia. Della Vigna said European oil companies such as U.K. firm Shell and French company Total are also ahead of U.S. rivals in making the transition from "big oil" to become "big energy".
UK fracking: Shale gas starts flowing, Cuadrilla says - Shale gas has flowed for the first time at the UK's only fracking site currently in operation, energy firm Cuadrilla says. Operations began at the Lancashire site in October for the first time since 2011 when it was suspended because of earth tremors. There have been suspensions of the renewed underground drilling operations after further tremors in the area. Cuadrilla says the site may provide "a significant source" of gas. But local MP Rosie Cooper has said fracking at the site should be banned immediately, following a 1.1 magnitude tremor on Monday - the strongest since work began on 15 October. Since then, the share price in Cuadrilla's parent company AJ Lucas has fallen. According to the British Geological Survey, earthquakes with a magnitude of less than two are not usually felt and, if they are, it is only by people very close to the epicentre.Anti-fracking campaigners, who argue it poses environmental risks, had unsuccessfully tried to stop the process with an injunction bid. John Sauven, executive director of Greenpeace UK, criticised the fracking industry, saying it had "produced a deep hole in a muddy field with a small amount of very expensive gas at the bottom". A Cuadrilla spokeswoman said it would spend at least three months operating two horizontal exploratory wells before testing the commercial viability of the gas flow.
Fracking shale gas flows in UK, but controversy over earth tremors intensifies --Operations began at the Lancashire site in October for the first time since 2011 when it was suspended because of earth tremorsShale gas has flowed for the first time at the UK's only fracking site currently in operation, energy firm Cuadrilla says. Operations began at the Lancashire site in October for the first time since 2011 when it was suspended because of earth tremors. There have been suspensions of the renewed underground drilling operations after further tremors in the area.Cuadrilla says the site may provide “a significant source” of gas. But local MP Rosie Cooper has said fracking at the site should be banned immediately, following a 1.1 magnitude tremor on Monday - the strongest since work began on 15 October.According to the British Geological Survey, earthquakes with a magnitude of less than two are not usually felt and, if they are, it is only by people very close to the epicenter.Anti-fracking campaigners, who argue it poses environmental risks, had unsuccessfully tried to stop the process with an injunction bid.John Sauven, executive director of Greenpeace UK, criticized the fracking industry, saying it had “produced a deep hole in a muddy field with a small amount of very expensive gas at the bottom”.“It is truly bewildering how little fossil fuel companies need to offer in order to get whole-hearted, full-throated government support,” he added.
Government faces new legal challenge over plans to speed up fracking - The government is facing a fresh legal challenge to its proposals to fast-track new fracking sites by loosening planning regulations.Ministers said this summer they would drop the requirement for shale gas wells to obtain planning permission by designating fracking sites as national infrastructure projects.Greg Clark, the business secretary, used a written ministerial statement to tell local authorities they should abide by a definition of fracking that campaigners say is looser than the current one.Opponents say the new definition allows some companies to claim that their operations do not meet the technical definition of fracking and therefore do not have to face tougher planning decisions. On Monday a high court will decide whether to allow a legal challenge, brought by the mayor of a town in north Yorkshire against two government departments, on the grounds they should have undertaken an assessment required by EU law before Clark’s statement. The case has been brought by Paul Andrews, the mayor of Malton, which is the nearest town to the KM8 well that Third Energy intends to frack. He said Clark’s comments had completely undermined protections against fracking in North Yorkshire county council’s local minerals plan. “It’s about local democracy and also about property rights,” said Andrews, who has raised more than £23,000 through crowdfunding for the challenge. “If the whole of the area is industrialised it’ll have a disastrous effect on property values and kill the tourist trade.” But in his statement, Clark said: “We expect mineral planning authorities [usually county councils] to recognise the fact that parliament has set out in statute the relevant definitions of hydrocarbon, natural gas and associated hydraulic fracturing.” The definition he referred to is narrower and means a company’s application could be considered not to be fracking depending on the amount of water to be used, which could mean less stringent criteria are applied by planners.
Norwegian warship at risk of sinking after collision with oil tanker -- A Norwegian warship was heavily damaged in a collision with a Maltese oil tanker in the North Sea off the coast of Norway. According to Norwegian media reports Thursday, the frigate is in danger of sinking after sustaining heavy damage. The oil tanker is reportedly undamaged.Several reports confirmed that all 137 crew on the navy ship were evacuated but seven have been treated for minor injuries."The armed forces is now reviewing all the means available in the region to assist the KNM Helge Ingstad (the damaged warship)," Lieutenant Colonel Ivar Moen told AFP.According to the website Marine Traffic, the 62,000-ton oil tanker Sola is continuing its route from Norway to a terminal in northeast England.However, one separate media report said that despite suffering only superficial damage, the tanker is now at a standstill and waiting to be towed back into a Norwegian port. Reuters reported that the Equinor Sture oil shipment terminal, from where the oil tanker left, has been closed as a precautionary measure.
Venezuela running out of fuel, PdV suspends supply (Argus) — Venezuelan state-owned PdV has nearly exhausted its motor fuel stocks, forcing up to 80pc of the country's more than 2,700 service stations nationwide to suspend sales until further notice, according to four senior officials with the federation of oil unions (FUTPV). "The national gasoline deficit is the worst it has ever been," one of the officials said. "Venezuela could be completely out of gasoline and diesel for vehicles in as little as a week." Argus witnessed hundreds of vehicles in lines stretching over a mile at six service stations in eastern Caracas yesterday and today. The station operators said PdV halted gasoline and diesel deliveries completely over the past 72 hours. Service stations in the capital region normally are resupplied up to three times per week. Station operators contacted by Argus in 12 of Venezuela's 23 states including Anzoátegui, Aragua, Barinas, Bolivar, Carabobo, Cojedes, Lara, Miranda, Portuguesa, Táchira, Yaracuy and Zulia confirmed that PdV also suspended fuel supplies to their locations since 29 October. Senior oil union officials in the capital and the states of Anzoátegui and Zulia said the fuel shortage stems from the nearly complete shutdown of PdV's refineries, the suspension of fuel imports for financial reasons and the breakdown of all but 250 of PdV's more than 1,400 tanker trucks used for local distribution. Venezuelan gasoline and diesel have long been sold for next to nothing. With PdV´s refineries largely shut down, the Opec country is increasingly dependent on imports and can no longer afford to keep supplying the local market. The government in recent months pledged to charge international prices for fuel sold to Venezuelans without a government-issued homeland identity card, as a way to rationalize consumption and curb smuggling to neighboring countries, mainly Colombia. But many Venezuelans resisted, and new card-reading systems at service stations were never properly installed. Local refineries, which have total nameplate capacity of 1.3mn b/d, are barely operating. according to oil union officials on site at some of the facilities, including the 940,000 b/d CRP refining complex, comprised of the 635,000 b/d Amuay refinery and nearby 305,000 b/d Cardón refinery. Crude that was going to the refineries is now being exported to pay debt and generate oil revenues.
Major oil spill off Australia's coast would dwarf Deepwater Horizon disaster, documents show -- A worst-case oil spill in the Great Australian Bight would be twice the scale of the Gulf of Mexico disaster, and rough seas and a lack of suitable equipment risk delaying the response effort, confidential plans show. Documents released under freedom of information laws reveal the potential dangers involved in drilling for oil in the wild, isolated seas off the South Australian coast – a move Resources Minister Matt Canavan last week said was a “national priority” that would secure Australia’s fuel supplies. Plans to drill for oil in the Great Australian Bight show a worst-case spill would be twice as big as the 2010 Deepwater Horizon disaster in the Gulf of Mexico, pictured.Credit:Reuters Norwegian energy giant Equinor plans to explore for oil in the Great Australian Bight and insists it can be done safely. Critics say the venture is too risky and an oil spill in the pristine region would damage coastal communities and devastate marine life, including endangered southern right whales. Equinor last year acquired two exploration permits from BP, and plans to drill an exploratory well by October next year. AdvertisementA plan for the well prepared by BP outlines how it would respond in the event of a blowout – an accidental, uncontrolled release of crude oil. The document was obtained by Greenpeace after a two-year freedom-of-information battle with the National Offshore Petroleum Safety and Environmental Management Authority. It shows that in the worst-case discharge event, 7.9 million barrels of oil would spill into the ocean over 149 days – the time needed to drill a relief well to stop the flow. In 2010, BP’s Deepwater Horizon spill discharged 4 million barrels of oil into the Gulf of Mexico, of which just 810,000 was collected. It was the largest marine oil spill in history.
Inpex ships 3 Ichthys LNG cargoes, 2nd train to start in Nov - Japan’s Inpex said on Thursday it has shipped three liquefied natural gas (LNG) cargoes from its giant Ichthys project in Australia as it is also preparing to fire up the second liquefaction unit at the export facility this month.To remind, the $40 billion LNG export project sent its first LNG cargo to Japan in October just after shipping the first condensate cargo.The LNG project is “still undergoing ramp up towards achieving stable production… and we expect to reach around 60-70 percent production level in the first year and reach the plateau in 2-3 years after the start-up of LNG production,” president of Inpex, Takayuki Ueda said during an investor meeting discussing the company’s financial results.Once in full production, the Ichthys project will be able to produce about 8.9 million tons of LNG per year from its two liquefaction trains.The LNG export facility located at Blaydin Point near Darwin has in total shipped three cargoes as of November 8, Ueda said, adding that Inpex expects to fire up the second liquefaction unit this month.At peak production, the facility is expected to be able to produce about 10 cargoes per month or about 120 cargoes per year.About 70 percent of the LNG produced by the export project will be supplied to Japanese customers. The Ichthys project is also scheduled to start liquefied petroleum gas (LPG) exports this month.
LNG carrier attacked off Nigeria - Liquefied natural gas carrier, LNG River Niger fended off a pirate attack in the Gulf of Guinea, near Nigeria. Bermuda Government’s Department of Marine & Port Services said that the RCC Bermuda received an SSAS (Ship Security Alerting System) from the 141,000-cbm tanker at 2:25 am on November 6.The vessel came under attack by pirates that opened fire on the vessel, however, following evasive action and unsuccessful attempt to board the vessel, the attack was aborted, with no injuries reported onboard.“The Nigerian Navy was dispatched in an attempt to trace the source of the attack while the LNG River Niger continued under escort of a security vessel, for pilot and entry into the port of Bonny, Nigeria,” the report by the Department of Marine & Port Services said.According to the AIS data provided by VesselsValue, the vessel loaded a cargo at the Nigeria LNG facility on Bonny Island, and is currently sailing in the South Atlantic, off Gabon, heading for China.
This Oil Boom Is Going Under The Radar -- If anyone needed any further proof that Africa is shaping up as the next major hot spot in oil and gas, this year’s edition of Africa Oil Week will provide it. The event launched amid higher oil prices and booming exploration activity across the continent with supermajors and independents both upbeat about their prospects there. If we ignore the waywardness of oil prices, which served as the basis for Africa’s oil and gas recovery, and which can once again plunge local oil producers into recession should they drop, prospects are bright.A PwC report on the state of the oil industry of Africa, released on the first day of the event, noted how local oil and gas field operators had adjusted to the lower-price environment and are now in a position to reap the benefits of higher international prices for oil while their costs remain low.“Africa’s oil & gas companies have weathered the downturns and capitalised on the upswings focusing their efforts on new ways of working, reducing costs and utilising new technology,” one of the authors of the report, PwC Africa Oil & Gas Advisory Leader Chris Bredenhann said.There is abundant evidence that the message captured in the PwC report reflects reality. None other than Exxon is looking to Africa for its next elephant find. The U.S. Geological Survey estimated that two years ago there were at least 41 billion untapped barrels of crude oil in sub-Saharan Africa alone. Exxon is focusing on western and southern Africa in its exploration work and has been amassing stakes in oil and gas prospect in Ghana, Mauritania, Namibia, and South Africa. The supermajor hopes to strike a discovery containing no less than a billion barrels of crude, also known as an elephant. BP and Shell are also expanding in Africa. Shell earlier this year announced its first exploration rights acquisition in Mauritania. BP has partnered with Kosmos Energy on a gas project in Senegal. Also in Senegal, ConocoPhillips is partners in the giant SNE block, which might contain up to 1.5 billion barrels of crude. Then there are the independents, some of them with a special focus on Africa, such as Tullow Oil and Cairn Energy. “It’s like a new California gold rush.” The rush is far from contained to legacy oil producers such as Nigeria or Angola. On the contrary, there is a flurry of newcomers on the oil scene, from Uganda and Kenya to Madagascar, which shares a gas-rich basin with Mozambique and has proven oil reserves, which have remained largely untapped until now. African governments have also sensed which way the wind is blowing. Sudan and South Sudan recently said they had settled their differences and will work together to bring South Sudanese oil to export markets via the single pipeline through Sudan. Ethiopia struck a deal with rebels active in a gas-rich province, improving greatly its chances of getting developed.
Abu Dhabi to boost oil output capacity to 4 mil b/d by end-2020, 5 mil b/d by 2030 — Abu Dhabi intends to boost its oil production capacity to 4 million b/d by the end of 2020 and to 5 million b/d by 2030 under plans approved Sunday by the Supreme Petroleum Council, which also announced new discoveries totaling 1 billion barrels of oil, Abu Dhabi National Oil Company said. The SPC, Abu Dhabi's highest hydrocarbon policy-making body, also approved the emirate's unprecedented gas strategy, enabling the UAE to achieve gas self-sufficiency, with the potential to be a net gas exporter, ADNOC said in a statement Sunday. At its meeting, SPC also announced new discoveries totaling 15 Tcf of gas. The announcement of Abu Dhabi's discovery of significant oil reserves follows the emirate's "historic decision" earlier this year to open six geographical oil and gas blocks for competitive bidding, ADNOC said. The first exploration and production licenses are expected to be awarded in the first quarter of 2019, ADNOC said. It added that existing data from detailed petroleum system studies, seismic surveys, log files and core samples from hundreds of appraisal well estimates suggest "these new blocks hold multiple billion barrels of oil and multiple trillion cubic feet of natural gas." Abu Dhabi's gas strategy will sustain LNG production to 2040, and allow ADNOC to seize incremental LNG and gas-to-chemicals growth opportunities, where they arise, ADNOC said. "The integrated gas strategy is the first time in ADNOC's history it has been in a position to commercially and holistically unlock its abundant new gas resources," ADNOC said. Under the new gas strategy, ADNOC said it will develop the Hail, Ghasha and Dalma project that taps into Abu Dhabi's Arab formation, which is estimated to hold multiple trillions of cubic feet of recoverable gas. The project is expected to produce more than 1.5 Bcf/day of gas, it said. ADNOC added it will also unlock other sources of gas, which include Abu Dhabi's gas caps and unconventional gas reserves, as well as new natural gas accumulations, which will continue to be appraised and developed as it pursues exploration activities.
India May Pay for Iranian Oil in Rupees Amid US Sanctions - India and Iran are reportedly finalizing the steps New Delhi will take to pay for Iranian oil using India's national currency in order to continue transactions in the event that the Islamic Republic is cut-off from SWIFT, the international network used for bank transactions. India will revive a previous arrangement of making payments via an account in UCO bank in India, which does not have international exposure and is not connected to SWIFT, The Times of India reported. Before the US sanctions, Indian oil payments were divided: 45% of them were made in rupees from the UCO account and 55% were paid in Euros. However, India and Tehran are reportedly working on a new mechanism allowing Iran to take the full amount in India’s national currency. The funds are expected to be used for importing items from India. The mechanism would allow India to continue purchasing oil from Iran, even after the current 180-day US grace period on Iran's sale of oil abroad expires and if the Iranian banks are banned from using SWIFT payment systems. US Special Representative for Iran and Senior Policy Advisor to the Secretary of State Brian Hook told journalists on Sunday that countries which continue to import oil from Iran would set up escrow accounts, which would “deny Iran hard currency and denies Iran any revenue on oil sales,” as the money stays within the importing nation’s account. “We strongly encourage those nations to ensure that Iran spends that money on humanitarian purchases to benefit the Iranian people,” Hook said, as cited by Times of India. He also added that the US will monitor these accounts in order to ensure that money is not spent on illicit activity. The European Union is expected to announce a special purpose vehicle (SPV) to assist Iran. However, sources told the Times of India that the European mechanism faced several complications and would only become operational by 2019. India also reportedly won't participate in the EU mechanism so there would be an alternative means of payment in case the SPV attracts the attention of the US.
Iran will defy US sanctions and sell oil, President Rouhani says -- Iran plans to defy newly reimposed U.S. sanctions and continue to sell, Iranian President Hassan Rouhani reportedly said on state TV on Monday, according to Reuters. "America wanted to cut to zero Iran's oil sales ... but we will continue to sell our oil ... to break sanctions," Rouhani reportedly told economists at a meeting that was broadcast live. On Monday, Washington reimposed sanctions on Iran in a bid to put pressure on the Islamic republic to curb its nuclear, missile and regional activities. The first round of U.S. sanctions were reimposed in August.U.S. crude oil traded 0.55 percent lower on Monday at $62.81, while the benchmark Brent crude oil slid 0.41 percent lower to trade at $72.53 at 2:25p.m. HK/SIN time. The Trump administration said on Friday it will grant special exceptions to eight jurisdictions, allowing them to temporarily carry on importing oil from Tehran even after the sanctions are reimposed, according to cabinet members.President Donald Trump gave oil importers 180 days to wind down purchases of Iranian crude when hewithdrew from the Iran nuclear deal in May. The eight waivers will allow the jurisdictions to gradually reduce their purchases after the Nov. 4 deadline. Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin did not name the eight jurisdictions on Friday, but a South Korean official said Monday that Seoul had been granted an exception from U.S. sanctions against Iran.
Turkey's Erdogan: US sanctions on Iran wrong, will not abide by them ...Turkish President Recep Tayyip Erdogan on Tuesday hit out at new sanctions on Iran imposed by the administration of President Donald Trump, saying they were aimed at upsetting the global balance and against international law. Washington on Monday announced the sanctions on the Islamic Republic that aim to isolate the country’s banking sector and slash its oil exports. Turkey was one of eight countries exempted from the demand to stop buying Iranian oil. “We don’t find the (Iran) sanctions appropriate,” Erdogan was quoted as saying by the state-run Anadolu news agency. “Because to us, they are aimed at upsetting the global balance,” he added. “They are against international law and diplomacy. We don’t want to live in an imperial world.” Erdogan’s comments came after his Foreign Minister Mevlut Cavusoglu warned that isolating Iran was “dangerous.” “While we were asking (for) an exemption from the United States, we have also been very frank with them that cornering Iran is not wise. Isolating Iran is dangerous and punishing the Iranian people is not fair,” he told a press conference during a trip to Japan. “Turkey is against sanctions, we don’t believe any results can be achieved through the sanctions,” he added. “I think instead of sanctions, meaningful dialogue and engagement is much more useful.” Washington has imposed two sets of sanctions this year after pulling out of a nuclear pact agreed between world powers and Iran that President Donald Trump slammed as “defective”. The latest round went into effect on Monday. Washington has granted eight countries, including Turkey and Japan, waivers to allow them to continue importing Iranian oil without facing diplomatic consequences. Mainly Sunni Turkey has a complex relationship with Shiite Iran that has seen disputes notably on what Ankara has seen as moves for domination of Iraq by the majority Shia community. But the two countries are also working closely on a host of issues, notably ending the conflict in Syria even though both Ankara and Tehran are in theory on opposite sides of the civil war. Iranian oil and gas exports are also crucial for resource-poor Turkey.
Pakistan in the middle of Saudi, Iran and rival pipeline plans The US has imposed sanctions on Iranian shipping, finance and energy exports, blacklisting 700 people. They target the EU special mechanism to facilitate purchases of Iranian oil, a sort of alternative international payment system, and threats persist about cutting Iran completely off the Swift system (although several Iranian banks are already suspended). There are also “temporary waivers” related to oil exports granted mostly to China, India, Japan, South Korea, Taiwan and Turkey, plus two Italy and Greece. This means that in the real world, beyond all the bluster, there’s no way to downgrade Iranian oil imports to “zero” without causing a global energy crisis. The key exemption might as well be Chabahar port in Iran, the cornerstone of India’s own mini-New Silk Road strategy for South Asia and Central Asia, which depends on exports to and across Afghanistan. In the words of John Bolton, the US National Security Adviser, they seek to achieve a “massive change in the regime’s behavior”. But for some of us, the real star of the show was a putative, developing alliance that could turn into a crucial game-changer in Eurasia integration. Hopeful signs are on the cards. Presidents Erdogan and Rouhani have a very good relationship and are both deciders in the Astana process trying to solve the Syrian tragedy. Whatever the pressure, Turkey won’t cease to buy Iranian oil. Iranian Foreign Minister Javad Zarif was in Islamabad last week talking to Prime Minister Imran Khan. Turkey-Pakistan relations are extremely tight. On a Shanghai Cooperation Organization (SCO) level, Pakistan is a full member, Iran will soon become a full member and Ankara is very much interested – and so are powerhouses Russia and China to have them all together inside the club. Pakistan and China will start trading in yuan, as announced by Pakistani Information Minister Fawad Chaudhry, who has just extolled an expansion of the China-Pakistan Economic Corridor (CPEC) to agriculture and the construction of industrial zones.
Iran oil exports to plummet in November, then rebound as buyers use waivers (Reuters) - Iran’s oil exports have fallen sharply since U.S. President Donald Trump said at mid-year he would reimpose sanctions on Tehran, but with waivers in hand the Islamic Republic’s major buyers are already planning to scale up orders again. The original aim of the sanctions was to cut Iran’s oil exports as much as possible, to quash its nuclear and ballistic missile programs, and curb its support for militant proxies, particularly in Syria, Yemen and Lebanon. But the exemptions granted to Iran’s biggest oil clients - China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey - allow them to import at least some oil for another 180 days and could mean exports start to rise after November. This group of eight buyers imported over 80 percent of Iran’s roughly 2.6 million barrels per day (bpd) of oil exports last year, Refiniv Eikon data shows. The decision by the U.S. (to grant waivers) represents a departure, for now, from the stated aim of reducing Iran’s oil exports to zero,” said Pat Thaker, regional director for the Middle East and Africa at the Economist Intelligence Unit. Iran’s crude exports have fallen significantly from at least 2.5 million bpd in April, before Trump in May withdrew the United States from a 2015 nuclear deal with Iran and reimposed sanctions, although estimates vary. As a result of pre-sanctions pressure by Washington, Iran’s oil exports in November may not exceed 1 million to 1.5 million bpd, according to industry estimates. Companies that monitor Iran’s shipments are already seeing a drop in tanker activity this month. “We’ve only seen 10 tankers loading at, or signaling for Iranian terminals in November so far, which is significantly lower than what we usually see at the beginning of the month,” said Kpler, a data intelligence company. According to Refinitiv Eikon data, Iranian crude exports have fallen to 1 million bpd so far in November.
Dumping the dollar: Iran & South Korea agree cross-currency trade -- South Korea and Iran have agreed to switch to national currencies in trade exchanges as the sides aim to strengthen relations despite the US sanctions on Tehran. The agreement is of great importance to both countries, Yonhap News Agency reported, explaining that the deal indicated Korea’s concerns about relations with Iran. The countries also agreed to make payments and settle their financial and banking accounts using the South Korean national currency, the won. That will allow South Korean and Iranian companies to continue their extensive exchanges in various fields. The volume of bilateral trade surpassed the $12-billion benchmark last year, according to Iran’s ambassador to Seoul Saeid Badamchi Shabestari, who told Press TV that the Iranian and Korean economies complement one another. The fact that Tehran-Seoul relations had been founded on “reality” would keep the countries determined to deepen the ties in the face of America’s “hostile and illegal unilateral actions,” the ambassador said. Earlier, South Korean Ambassador to Tehran Ryu Jeong-hyun said that despite many European companies leaving Iran under the pressure of US sanctions, South Korean firms understand the significance of the Iranian market and have chosen to stay.
EU struggles to find host for Iran trade mechanism (Reuters) - The European Union has so far failed to find a country to host a special mechanism to trade with Iran and beat newly reimposed U.S. sanctions, three diplomats said, as governments fear being targeted by U.S. counter measures. Voicing opposition to U.S. policy on the day Washington announced a new raft of sanctions on Iran, the European Union reissued its Nov. 2 statement on Monday saying it was still setting up the so-called special purpose vehicle (SPV). The European Union had hoped to ready its SPV, which is designed to circumvent the U.S. sanctions, by Monday’s sanctions announcement by the United States. However, no EU country has so far volunteered to host the entity, the EU diplomats said. Several states have been asked by EU foreign policy chief Federica Mogherini to consider being the headquarters, as the bloc tries to uphold the arms control accord, which U.S. President Donald Trump withdrew from in May. While the European Commission declined to comment on Monday, European Economic Affairs Commissioner Pierre Moscovici said “the European Union does not approve of” the reimposition of U.S. sanctions lifted under the 2015 nuclear deal. Brian Hook, Washington’s special representative for Iran, underscored the risks for European companies, warning that any EU country hosting the SPV could potentially be sanctioned. “The United States will not hesitate to sanction any sanctionable activity in connection with our Iran sanctions regime,” Hook told a telephone call with European reporters when asked about the vehicle. The SPV, which could incorporate a barter system, aims to sidestep the U.S. financial system by using an EU intermediary to handle trade with Iran. It could ensure, for example, that Iranian oil bought by Europeans could be paid for with EU goods and services of the same value. A senior French diplomat said Paris was confident the mechanism would be legally in place soon, but things needed to be fully cemented first.
SWIFT Caves To US Pressure, Defies EU By Cutting Off Iranian Banks - Shortly after Trump reimposed nuclear sanctions on Tehran on November 5, the international financial messaging system SWIFT announced the suspension of several Iranian banks from its service. “In keeping with our mission of supporting the resilience and integrity of the global financial system as a global and neutral service provider, SWIFT is suspending certain Iranian banks’ access to the messaging system,” SWIFT said.The Belgium-based financial messaging service added:“This step, while regrettable, has been taken in the interest of the stability and integrity of the wider global financial system.”SWIFT’s decision has further undermined EU efforts to maintain trade with Iran and save an international deal with Tehran to curtail its nuclear program, after President Donald Trump pulled the US out in May. Being cut off from SWIFT makes it difficult for Iran to get paid for exports and to pay for imports, mostly of oil.As a further note, the EU was one of the few entities not to receive a sanctions waiver from the US earlier this week.The European Commission was understandably displeased, and on Wednesday said it found the SWIFT decision "regrettable" “We find this decision rather ... regrettable,” Commission foreign affairs spokeswoman Maja Kocijancic told a briefing.As we reported over the weekend, last Friday Treasury Secretary Steven Mnuchin warned SWIFT it could be penalized if it doesn’t cut off financial services to entities and individuals doing business with Iran. However, by complying with Washington, SWIFT now faces the threat of punitive action from Brussels.Washington has been pressuring SWIFT to cut off Iran from the financial system as it did in 2012 before the nuclear deal. Six years, ago the EU imposed sanctions on Iranian banks, forcing SWIFT, which is subject to EU laws, to cut financial transactions with at least 30 of Iran’s financial institutions, including the central bank. Iranian banks were reconnected to the network in 2016 after the Iran nuclear deal came into force, allowing much needed foreign cash to flow into Tehran’s coffers.
France Vows to Protect Iran Against US Acting as World’s “Trade Policeman” — France has vowed to fulfill plans to defy the US’ sanctions on Iran while increasing the international role of the euro in order to prevent Washington from acting as the world’s “trade policeman”. After President Donald Trump pulled out of the Iranian nuclear in May, the European Union – along with Russia and China – remained committed to the agreement, and has insisted on defying the sanctions and facilitating trade with Tehran.
France Takes The Lead In Protecting Iran Oil Trade From U.S. Sanctions - France aims to lead the European Union (EU) efforts in defying U.S. sanctions on Iran, by supporting the creation of a payment mechanism to keep trade with Iran and making the euro more powerful, France’s Economy Minister Bruno Le Maire said in an interview with the Financial Times. “Europe refuses to allow the US to be the trade policeman of the world,” Le Maire told FT, adding that the EU needs to "affirm its sovereignty" in the rift between the EU and the United States over the sanctions on Iran. The EU has been trying to create a special purpose vehicle (SPV) that would allow the bloc to continue buying Iranian oil and keep trade in other products with Iran after the U.S. sanctions on Tehran return. The idea behind the SPV is to have it act as a clearing house into which buyers of Iranian oil would pay, allowing the EU to trade oil with Iran without having to directly pay the Islamic Republic. As the U.S. sanctions on Iran snapped back on Monday, the SPV hasn’t been operational and reports have had it that the undertaking is very complicated and politically sensitive. The bloc is also said to be struggling with the set-up, because no EU member is willing to host it for fear of angering the United States, the Financial Times reported recently, citing EU diplomats. On Monday, the Belgium-based international financial messaging system SWIFT said that it would comply with the U.S. sanctions on Iran and would cut off sanctioned Iranian banks from its network. This was a blow to the EU’s attempts to defy the U.S. sanctions. The decision by SWIFT highlights the need for an SPV, France’s Le Maire told FT, but he refused to name countries that could host such a special vehicle. Yet, there have been expressions of interest, he told FT.
Iran Shuts Off Oil Tanker Tracking System As US Sanctions Start - The US on Monday (Nov 5) is reimposing disciplinary measures targeting Iran's oil, shipping, insurance, and banking sectors in what US Secretary of State Mike Pompeo called "the toughest sanctions ever placed" against Iran. In response, Tehran has reportedly turned off all oil tanker tracking systems as the sanctions take effect today. Analysts at TankerTrackers.com, a watchdog that monitors production, refinement, shipping, and trading of crude oil on a global scale, revealed in late October all Iranian tanker vessels turned off their transponders to avoid international tracking for the first time since 2016. “It’s the first time I’ve seen a blanket black-out. It’s very unique,” TankerTrackers co-founder Samir Madani told Sputnik News.Madani said with the transponders turned off, the vessels can only be monitored using private satellite imagery. He believes that such a shift to lesser transparency is a ploy by Iran’s leadership to keep the international supply chains open amid US sanctions.“Iran has around 30 vessels in the Gulf area, so the past 10 days have been very tricky, but it hasn’t slowed us down. We are keeping watch visually,” said co-founder Lisa Ward.The analysts suggested that going dark could pose significant problems in pinpointing the date when a tanker loaded its crude cargo. Between 2010 and 2015, when Iran was slapped with international sanctions, its oil industry discovered that it could keep crude on tankers off the Gulf coast to avoid supply chain disruptions.
Iran Is Preparing For A Long Siege As The Global Squeeze Begins - On Monday the harshest and highest level economic and energy sanctions that can be imposed on any country have been imposed unilaterally on Iran. The US establishment will try its best to bring the Islamic Republic to its knees and Tehran will do its best to cross the US minefield. Whatever the outcome, Iran will never submit to Washington’s twelve conditions. Iran is not a fledgling country ready to collapse at the imposition of the first tight sanctions, nor will Iran allow its oil exports to be frozen without reacting. In fact, US and UN sanctions against Iran date to the beginning of the Islamic Revolution and the fall of the Shah in 1979. No doubt the Iranian economy will be affected. Nevertheless, Iranian unity today has reached new heights. President Trump has managed to bring reformists and radicals together under the same umbrella! Iranian General Qassem Soleimani has said to President Hassan Rouhani: “You walk and we stand ahead of you. Don’t respond to Trump’s provocations because he is insolent and not at your level. I shall face him myself”. Rouhani believes “US policy and its new conspiracy will fail”. All responsible figures in the Iranian regime are now united under the leadership of Imam Ali Khamenei against the US policy whose aim is to curb the regime. Under the previous worldwide sanctions regime, Iran began developing missile technology and precision weapons. Iran has never yielded in support of its allies because these alliances are an integral part of its ideology. Today, Tehran is not standing alone against the US and is waiting to see what course global sanctions will take before reacting. Officials in Tehran, convinced that Trump will win a second term, are preparing for a long siege. Sayyed Ali Khamenei said his country will never strike any deal with the US and won’t be a party to any future agreement because the US is fundamentally untrustworthy. Iran relies on the unity of its own citizens and on the support of its partners in the Middle East, Europe (a crucial strategic ally), and Asia. Europe, notably, is trying to disengage itself from the US sanctions, but so far with little success. Its leaders are begging in vain for an exemption for trade in food and medicine to reduce the population’s suffering.
South Korea buyers heading to Iran for talks on resuming oil imports: sources (Reuters) - A South Korean delegation including oil buyers is expected to head to Iran next week to discuss resuming Iranian oil imports after a three-month halt, three sources with knowledge of the matter said. South Korea is one of eight countries that received waivers from the United States to continue importing Iranian oil for 180 days. It can import up to 200,000 barrels per day (bpd) of Iranian oil, mostly condensate, the sources said, without invoking U.S. economic sanctions re-imposed on Iran on Nov. 5. The North Asian country was the third-biggest buyer of Iranian oil and also the largest importer of its condensate before it stopped imports in September ahead of U.S. sanctions. South Korea’s condensate imports from Iran stood at 159,770 bpd in January-August, down about 49 percent from 311,885 bpd in the same period last year, according to Reuters calculations based on the Korea National Oil Corp (KNOC) data. Condensate is an ultra light oil processed at splitters, typically to produce naphtha for petrochemicals. While the waiver has given South Korea the green light to resume Iranian oil imports, the sources said issues such as payment, shipping and insurance needed to be worked out. “The actual (import) volume will depend on next week’s negotiations,” one of the sources said, adding that the oil’s price will be a key factor. The U.S. sanctions waivers have eased pressure on Iran to further discount its oil against Saudi Arabia’s.
How US Sanctions on Iran Could Herald a Profound Global Power Shift --In the medium term, the US will lose influence as Iran gains confidence; in the worst case scenario, there will be a war whose consequences will be incalculable. — On Monday, the US will ratchet up its brutal and merciless economic war against Iran, raising sanctions to a new level. The Trump administration has said its goal is to reduce Iranian oil exports to zero, although waivers were being negotiated with some countries.Such a move could bankrupt Iran and destroy the government’s ability to deliver public services, fomenting popular rebellion.John Bolton, President Donald Trump’s national security adviser, has been clear about the logic behind this: he wants to install a new government friendly to the US. He spelled out these plans to the opposition group Mujahedin-e-Khalq (MEK) at a Paris conference last year, although he has subsequently backtracked, saying regime change is “not American policy”. The US is not simply intent on waging an economic war, but also wants to build up a military and strategic coalition against Iran. This seems to have been the most important item on the agenda of last week’s Manama dialogue in Bahrain, where US Defence Secretary James Mattis took aim at Iran. Mattis is keen on the creation of a what amounts to an Arab NATO built around a regional network of Sunni Arab states in the shape of the emerging Middle East Strategic Alliance, potentially including Benjamin Netanyahu’s Israel. The primary outside backers would be the US, France and Britain. But this twin-pronged military-economic strategy is doomed to failure, and will likely end in humiliation for the US. In the medium term, it will backfire; the US and its allies will lose influence, while Iran will gain confidence and power. In the worst case scenario, it will result in a war whose consequences will be incalculable.For starters, Trump’s sanctions policy is beset by contradictions. It will not and cannot work, because the US will be unable to isolate Iran in the way it hopes to. The problem was set out clearly in an excellent article by Gardiner Harris in the New York Times earlier this week, which noted that China and India, the largest buyers of Iranian oil, will continue to make substantial purchases. Turkey and Russia are likely to do the same, which is not much of a surprise.
Russia clashes with Western oil buyers over new deals as sanctions loom (Reuters) - Russian energy majors are putting pressure on Western oil buyers to use euros instead of dollars for payments and introducing penalty clauses in contracts as Moscow seeks protection against possible new U.S. sanctions. Seven industry sources told Reuters that Western oil majors and trading houses have clashed with Russia’s third and fourth biggest producers, Gazprom Neft and Surgutneftegaz, over 2019 oil sales contract terms during unusually tough annual renegotiation in recent weeks. The development mirrors a similar stand-off between Western buyers and Russia’s top oil producer, Rosneft. Earlier this week, trading sources told Reuters that Rosneft wants Western oil buyers to pay penalties from 2019 if they fail to pay for supplies in the event that new U.S. sanctions disrupt sales. Now sources have told Reuters that Surgutneftegaz and Gazprom Neft have also clashed with their buyers over penalties and the use of euros and other currencies to replace the dollar in contracts. “It is part of the same trend - the Russian oil industry is working on mitigating new sanctions risks. The buyers in turn argue they cannot carry those risks so we are trying to find compromises,” said one source with a Western buyer involved in negotiations, asking not to be named as the talks are confidential. Russia has been under U.S. and EU sanctions since 2014 when it invaded Ukraine’s Crimean peninsula. The sanctions have been repeatedly widened to include new companies and sectors, making it tough for Russian oil firms to borrow money abroad, raise new capital or develop Arctic and unconventional deposits. President Vladimir Putin’s administration has been hoping for a thaw in relations with the United States since President Donald Trump came to power but Washington has imposed new sanctions instead,
Russian Oil Output Nears All-Time High With October Ramp-Up - Russian oil production moved closer to an all-time high before the nation meets with OPEC partners to discuss future supply.The country’s crude and condensate output averaged 11.412 million barrels a day last month, according to data from the Energy Ministry’s CDU-TEK unit released Friday. That’s about 160,000 barrels a day more than two years ago, before Russia agreed to cut supply with OPEC. It’s a post-Soviet record, and not far off the highest-ever output.The production boom comes amid mixed signals from global oil producers. Russia suggested last Saturday it could push output to a fresh record, just days after a committee representing the Organization of Petroleum Exporting Countries and its allies signaled the group could cap supply again in 2019.Crude prices are down by more than 15 percent since hitting a four-year high last month. The market is beset by bearish forces: rising oil inventories; higher production from Russia, OPEC and the U.S.; there’s also great uncertainty about the impact of American sanctions on Iran’s exportsand concerns over global demand.Russia, which relies on energy for almost half its budget revenue, has repeatedly said that its plans for future output will depend on cooperation with OPEC. The cartel’s production in October climbed to the highest level since 2016 as increases by Saudi Arabia and Libya offset losses from Iran, according to a Bloomberg survey. ussian oil output peaked during the Soviet era, averaging 11.416 million barrels a day in 1987, according to BP Plc data. No monthly numbers are available, and the figures account differently for some liquids derived from natural gas. This would make it hard to pinpoint when exactly the country may set a new historic peak. Maintaining current production levels is also not a given, especially since volumes can dip in the freezing winter months, and during summer-season maintenance.
Russian Oil May Gain a Lot by Giving a Little on OPEC U-Turn -- Russia’s oil industry is feeling the pressure of a possible return of production caps. In fact, by sacrificing a fraction of output, the companies could see their stocks rise. Fresh output curbs may push crude prices up, benefiting Russian producers just as they did during the cuts that began last year. The Moscow Oil & Gas Index has gained about 40 percent since the initial output pact between OPEC and Russia was reached almost two years ago. The Organization of Petroleum Exporting Countries has signaled it will consider a return to cutting supply next year as oil prices wilt in the face of another surge in U.S. shale production. A new deal would come just as Russia’s production climbs to a post-Soviet high -- following its June agreement with OPEC to ease supply caps -- and its oil companies generate record cash. “History shows that we are able to turn production cuts to our advantage,” said Alexander Kornilov, an Aton LLC analyst in Moscow. “If we look at how the Russian oil and gas index has moved since 2016 -- when the country first agreed on production cuts with OPEC -- everything becomes clear.” Russian oil executives met with Energy Minister Alexander Novak Thursday to share their views as they put together investment plans for next year. It was a surprisingly low-level meeting, with only one chief executive in attendance, and addressed general cooperation with OPEC rather than specific output figures, according to Lukoil PJSC. “We haven’t discussed yet” whether further cooperation means output cuts in 2019, Lukoil First Vice President Ravil Maganov said after the meeting in Moscow, adding “I can’t rule out” production curbs. OPEC and its allies, including Russia, are scheduled to meet for talks this weekend in Abu Dhabi. While Novak and Saudi Energy Minister Khalid Al-Falih have discussed the agenda, Russia isn’t yet ready to take any decision on renewed supply curbs, an official familiar with the matter said. Any OPEC+ agreement that can stabilize crude prices above current levels will benefit Russian oil companies, according to Alexander Losev, chief executive officer of Sputnik Asset Management. “Producing less at $80 per barrel is better than producing at current levels and at $70 per barrel,” he said. “A certain output decline will also help the companies to reduce operating costs and further improve their financials, including free cash flow.”
Russia and Saudi Arabia's oil-market management challenge: Kemp (Reuters) - Russia and Saudi Arabia have started to discuss cutting production next year following steep falls in oil prices in the last month, according to a report by Russia's TASS news agency. The report has not been confirmed but has arrested the rapid decline in prices, at least temporarily, and should not come as a surprise given the altered dynamics in the oil market. The oil market is best thought of as a complex adaptive system, characterised by long lags and positive feedback mechanisms, which exaggerate the impact of even small changes in production and consumption. OPEC, led by Saudi Arabia, and its non-OPEC allies, led by Russia, have stated that their objective is to keep the market as close as possible to balance and minimise damaging price swings. But in the history of the oil market, production and consumption have rarely been balanced except accidentally and not usually for very long. The market's natural state is one of imbalance, with deep and prolonged cycles in spot prices and inventories as it alternatives between periods of under- and over-supply. In this context, the best market management strategy for OPEC+ involves timely, frequent and small adjustments in production in response to changing estimates of production and consumption. Prompt action in response to incoming information about potential future market imbalances may be able to forestall the need for much larger adjustments later. Other members of OPEC+ have no spare production capacity and are not needed to show much production flexibility to keep the market close to balance.
Return to oil production cuts in 2019 cannot be ruled out: OPEC sources (Reuters) - A return to oil production cuts by OPEC and its allies next year cannot be ruled out, two OPEC sources said on Wednesday, to avert a possible supply glut that could weigh on prices. The sources were responding to a report by Russia’s TASS news agency that Russia and Saudi Arabia had started bilateral discussions over possible curbs to output in 2019. Saudi-led OPEC and its allies including Russia decided in June to relax output curbs in place since 2017, after pressure from U.S. President Donald Trump to reduce oil prices and make up for supply losses from Iran. Asked whether discussions pointed to a return to supply cuts in 2019, one of the two sources, who are delegates from the Organization of the Petroleum Exporting Countries, said: “Certainly not the other way around.” Oil prices have come under downward pressure from rising supplies, even though Iranian exports are expected to fall because of new U.S. sanctions. Forecasts of a 2019 supply surplus and slowing demand have also dented the market. Brent crude had dropped from a four-year high in October above $86 a barrel to $71 on Tuesday. Prices rallied back above $73 on Wednesday, supported by the TASS report. Separately, a top OPEC official from Iran, which has been angered by higher production in Saudi Arabia and Russia in response to Trump’s calls, said Riyadh and Moscow needed to cut output by 1 million barrels per day. “There is no other way for Saudi Arabia and Russia,” Hossein Kazempour Ardebili, who represents Iran on OPEC’s board of governors, told Reuters when asked whether producers needed to trim output in 2019. The extra supply has caused a drop in crude prices, hurting income for other oil producers while helping Iran’s foe Trump in the U.S. midterm elections, Kazempour said. “They pushed the prices $15 a barrel lower in one month and only made U.S. gasoline cheaper for Trump. They lost billions on revenue and caused losses to poor producers in Africa and South America,” he said. A ministerial committee of some OPEC members and allies meets on Sunday in Abu Dhabi to discuss the market and outlook for 2019. Iran is not a member of this committee, which it wants scrapped. This group, called the JMMC, could make a recommendation on 2019 output policy to the next decision-making meeting of OPEC and non-OPEC oil ministers, a third OPEC source said. That meeting takes place on Dec. 6-7 in Vienna.
Hedge funds turn negative on oil (Reuters) - Hedge fund managers were net sellers of petroleum-linked futures and options for a fifth week running last week as concerns about sanctions on Iran evaporated and investors refocused on economic worries. The net long position in the six most important petroleum-linked futures and options contracts was cut by a further 73 million barrels in the week to Oct. 30. Portfolio managers have been net sellers of 371 million barrels since the end of September, taking their net long position to the lowest level for 15 months, according to records published by regulators and exchanges. The sharpest sell-offs last week were in Brent (-54 million barrels) and U.S. gasoline (-11 million) with smaller reductions in NYMEX and ICE WTI (-2 million), U.S. heating oil (-4 million) and European gasoil (-2 million). Position changes are no longer confined to long liquidation. Fund managers have started to establish short positions betting on further price falls (https://tmsnrt.rs/2P8LQ1S). Short positions across all six contracts have doubled over the past five weeks to 192 million barrels, the highest level for more than 10 months. Fund managers still favour bullish long positions over bearish short ones by a ratio of almost 5:1, but the ratio has sunk from more than 12:1 only five weeks ago. The hedge fund community’s bullish bias is the lowest for a year and positioning now looks far less stretched than it did a month ago. With hedge fund positions concentrated in near-dated futures and options contracts, the sell-off has hit the front-end of the curve especially hard and accelerated the shift from backwardation to level or contango.
The Rapid Acceleration Towards Peak Oil Demand - The drumbeat towards peak oil demand is accelerating, but since much of the acceleration is happening outside of the United States, its cadence is muted. To be clear, the developed world passed peak oil demand a decade ago and has for years been forecast to continue reducing its demand. Increasing demand in industrializing countries, particularly China and India, each with a population tantamount to that of the OECD, slightly overpowers declines in the developed world, and as a result, global demand continues to increase. In its 2015 World Energy Outlook, the IEA forecast 1.5% y/y increase outside the OECD, -1.2% y/y in the OECD, and an overall growth of 0.5%. Global peak demand will likely occur while developing world demand is still growing. Increased decline in the first world could crest demand, but merely slowing the growth in the rest of the world is the more likely to tip the global balance to plateau then decline. Demand for oil is dominated by transportation (cars, trucks/trains, planes and boats) and industry (plastics, fertilizers, steam/heat). Passenger vehicles comprise about 25% of global oil demand and thus are the number one target for major emissions reductions. When the IEA released its 2015 World Energy Outlook mentioned above, not a country on the planet had stated plans to ban new sales of oil-fueled cars. Only Japan and Portugal had even created incentives for electric vehicles. In 2016, three European countries outlined plans to end sales of new gasoline and diesel engines. Before the year was over, IEA revised its OECD forecast downward to -1.3% per year. In 2017 a rash of targets to constrain fossil fuels for cars led Forbes to declare it to be “The Year Europe Got Serious about Killing the Internal Combustion Engine.” In 2018, even more European countries have joined the list, stating their intent to end the sale of new petroleum vehicles at some point between 2030 to 2040. Also this year, the trend has expanded out of Europe to Israel, Costa Rica, and Taiwan, with targets as early as 2021. Over the same three years, 2016 to present, 20 metropolitan areas from these and other countries announced their own plans to end the use (not just sale) of gasoline and/or diesel vehicles, and mostly before or by 2030.
Oil prices rise as US sanctions on Iran begin, Tehran defiant --Oil prices rose on Monday as U.S. sanctions against Iran's fuel exports began but were softened by waivers allowing major buyers to import Iranian crude for a while, as Tehran said it would defy Washington and continue to sell. Brent crude oil was up 98 cents a barrel, or 1.4 percent, at $73.81 by 9:30 (1440 GMT). U.S. light crude was 64 cents, or 1 percent, higher at $63.78 a barrel. "Oil bulls have long pinned their hopes on the Iran factor and today's dearth of upside potential will be a major source of concern," said Stephen Brennock, analyst at brokerage PVM Oil. Both oil price benchmarks have lost more than 15 percent since hitting four-year highs in early October, as hedge funds have cut bullish bets on crude to a one-year low, data show. Washington imposed sanctions against Iran on Monday, restoring measures lifted under a 2015 nuclear deal negotiated by the administration of former U.S. president Barack Obama, and adding 300 new designations including Iran's oil, shipping, insurance and banking sectors.In response, Iranian President Hassan Rouhani said in speech broadcast on state TV that Iran would break the sanctions and continue to sell oil.And Washington said on Friday it will temporarily allow eight importers to keep buying Iranian oil."U.S. sanctions against Iran ... created serious concerns with traders earlier in September. But they are turning into a damp squib," said Fiona Cincotta, market analyst at City Index.On Monday, the Trump administration identified the eight jurisdictions that will receive waivers: China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey.South Korea said earlier on Monday it had been granted a waiver, at least temporarily, to import condensate, a super-light form of crude oil, from Iran. It was also allowed the continue financial transactions with the Middle East country, it said. Chinese foreign ministry spokeswoman Hula Chunking expressed regret at the U.S. decision, but would not directly say if China had or had not been granted an exemption.
Oil mixed as U.S. imposes sanctions on Iran, Tehran defiant (Reuters) - Oil prices were mixed on Monday after a steep five-day fall, as the United States formally imposed punitive sanctions on Iran but granted eight countries temporary waivers allowing them to keep buying oil from the Islamic Republic. The sanctions are part of U.S. President Donald Trump’s effort to curb Iran’s missile and nuclear programs and diminish its influence in the Middle East. Oil markets have been anticipating the sanctions for months. Prices have been under pressure as major producers, including Saudi Arabia and Russia, have ramped up output to near-record levels, while weak economic figures in China have cast doubt on the demand outlook. News of waivers on the sanctions weighed on prices, analysts said. “There’s some doubt that the sanctions are going to have the bite the market originally thought.” Brent crude futures rose 34 cents to settle at $73.17 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell 4 cents to settle at $63.10 a barrel. Both oil benchmarks have slid more than 15 percent since hitting four-year highs in early October. Hedge funds have cut bullish bets on crude to a one-year low. The United States has granted exemptions to China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea, allowing them to continue buying Iranian oil temporarily, Secretary of State Mike Pompeo said on Monday. Some of the countries are OPEC member Iran’s top customers. Trump on Monday said he wants to impose sanctions on Iran’s oil gradually, citing concerns about shocking energy markets and causing global price spikes. U.S. officials have said the aim of the sanctions is eventually to stop all Iran’s oil exports. Pompeo said more than 20 countries have already cut oil imports from Iran, reducing purchases by more than 1 million barrels per day. Sanctions have already cost Iran billions of dollars in oil revenue since May, U.S. Special Representative for Iran Brian Hook told reporters on a call on Monday. Iran said on Monday it would break the sanctions and continue to sell oil abroad.
Oil Trades Near 7-Month Low -- Oil held near the lowest level in seven months as concerns over a supply crunch eased after the U.S. granted waivers to eight governments to continue buying some Iranian crude. Futures in New York slid as much as 0.6 percent after declining 6.6 percent in the past six sessions. While American sanctions targeting Iranian oil sales formally kicked in on Monday, Secretary of State Michael Pompeo confirmed that China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey have been given temporary exemptions from the restrictions. Meanwhile, U.S. crude inventories are forecast to have risen a seventh week. Crude has fallen more than 17 percent from a four-year high last month as American crude inventories continued to expand at a time when chances grew of the Trump administration granting waivers to lower gasoline prices ahead of the U.S. midterm elections. Meanwhile, a trade dispute between Washington and Beijing stoked concerns over slowing global growth that underpins energy consumption. West Texas Intermediate crude for December delivery dropped as much as 40 cents to $62.70 a barrel on the New York Mercantile Exchange, and traded at $62.85 on the New York Mercantile Exchange at 7:48 a.m. in London. Futures settled at $63.10 on Monday, down 4 cents. Total volume traded was in line with the 100-day average. Brent futures for January settlement slid 49 cents, or 0.7 percent, to $72.68 a barrel on the London-based ICE Futures Europe exchange. Prices gained 34 cents to $73.17 on Monday. The global benchmark crude traded at a $9.73 premium to WTI for the same month. As criticism increased from some U.S. conservatives who didn’t think Donald Trump should have issued any waivers, the U.S. President defended the move by saying he didn’t want to shock energy markets by forcing all buyers to halt Iranian oil purchases. The exemptions were only temporary measures to ease buyers’ transition and avoid destabilizing the market, Pompeo also reiterated. Meanwhile, U.S. crude stockpiles are forecast to have risen by 2 million barrels last week, according to a Bloomberg survey before Energy Information Administration releases data Wednesday. That would be the longest streak of increases since March 2017.
Brent Crude, Natural Gas Post Gains - Crude oil futures posted mixed results Monday. The December West Texas Intermediate (WTI) crude oil price slipped by four cents Monday to settle at $63.10 a barrel. The WTI traded from a high of $64.14 down to $62.52. The January Brent, meanwhile, posted a 34-cent increase to settle at $73.17 a barrel. Monday also marked an occasion that oil traders have anticipated for months: the Trump administration’s re-imposition of economic sanctions on OPEC member Iran to constrain its nuclear program. In a press conference Monday, U.S. Secretary of State Mike Pompeo noted that eight countries – China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey – will be allowed to continue importing Iranian crude on a temporary basis to “ensure a well-supplied oil market.” Despite the waivers, however, an analyst with Wood Mackenzie pointed out that the downward trend in Iran’s exports of crude oil and condensate should continue. “Beyond November 5, we expect crude exports to fall to 1 million barrels per day, though it could vary month to month; and condensate to 100,000 barrels per day. Crude sales will be concentrated around a core of supportive state buyers, China, India and Turkey.” In contrast, Iran’s exports peaked at 2.8 million barrels per day in April 2018, noted Falakshahi. He added that Iran faces difficulty maximizing its exports when virtually all trade in crude oil is cleared in U.S. dollars. That puts international oil companies, many national oil companies, traders and banks off limits, he explained. “Crude exports contribute one-third of government revenues, so there’s a huge incentive for Iran to use every conceivable lever,” . “We’ve seen Iranian crudes discounted by US$1 per barrel compared with similar Middle East grades, the biggest for a decade. Iran is hoping the EU’s barter proposal – goods as indirect payment for oil – opens doors, though we doubt any big oil traders will leap at the opportunity.” Front-month reformulated gasoline (RBOB) settled at $1.69 a gallon, losing two cents for the day. December RBOB peaked at $1.72 and bottomed out at $1.68. Compared to Friday’s settlement price, December Henry Hub natural gas futures posted an impressive 8.5-percent gain on Monday. The benchmark rose by 28 cents to settle at $3.57.
Oil slips on worries that economic slowdown could weigh on fuel demand --Oil prices slipped on Tuesday, weighed down by exemptions from Washington that will allow Iran's biggest oil customers to keep buying from Tehran, as well as concerns that an economic slowdown may curb fuel demand growth. U.S. West Texas Intermediate (WTI) crude futures were at $62.95 a barrel at 0355 GMT, down 15 cents, or 0.2 percent, from their last settlement. International Brent crude oil futures were down 28 cents, or 0.4 percent, at $72.89 a barrel. Analysts said expectations of an economic slowdown in coming months were weighing on the fuel demand outlook, while concerns eased on the supply-side after Washington granted eight importers of Iranian oil sanctions waivers that will allow them to continue purchases. Washington gave 180-day exemptions to eight importers - China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey. These are Iran's biggest buyers, meaning Iran will be allowed to still export some oil for now. Currency weakness is putting pressure on key growth economies in Asia, including India and Indonesia. At the same time, the trade dispute between the United States and China is threatening growth in the world's two biggest economies.
Oil Prices Tumble On Iran Uncertainty – Oil prices rose a bit on Monday, but fell hard in early trading on Tuesday. The market is looking for some direction now that Iran sanctions are in place. The U.S. confirmed that it granted waivers to eight countries, allowing them to continue to import oil from Iran for the next six months. The countries include South Korea, Japan, India, China, Turkey, Taiwan, Italy and Greece. That ensures that Iran will continue to import oil, although there is a great deal of disagreement among analysts over how much Iran’s exports will fall. “This is bad news for oil prices, as it means that the supply situation on the oil market is set to ease further,” Commerzbank said in a note. The investment bank predicts that Iran’s oil exports will stabilize at around 1 million barrels per day, and “could even increase again in the coming months because Japan and South Korea have hardly been buying any Iranian oil,” and they were given waivers to allow them to continue buying. To be sure, not everyone agrees on this point, and some see the hawkish government in Washington tightening the screws in the months ahead. The U.S. agreed to grant waivers to eight countries importing Iranian oil, seemingly backtracking a policy to cut Iran’s oil exports to zero. However, Secretary of State Mike Pompeo said that the “maximum pressure” campaign will continue and that the administration hopes to get to zero. The waivers were granted to countries that “need a little bit more time,” he said. . Hedge funds and other money managers continued to reduce their bullish bets on crude oil last week. As it became clear that the U.S. would be offering waivers on secondary sanctions last week, investors turned bearish. The net-length in the six months important oil futures contracts declined for the fifth consecutive time in the last week of October. The recent price correction for oil leaves a lot of room for a rebound, and Citigroup said that because refineries will end maintenance season and begin ramping up operations again, oil prices are “biased to the upside” for the rest of 2018. Brent could average $80 per barrel in the fourth quarter, Citi’s Ed Morse said, and might even temporarily spike as high as $90 or $100 per barrel. Iran will be central to this scenario, while outages are possible in Nigeria as elections loom.
Oil prices drop over 2 percent on Iran sanctions waivers (Reuters) - Oil prices fell on Tuesday, with U.S. crude futures hitting an eight-month low, a day after Washington granted sanction waivers to top buyers of Iranian oil and as Iran said it has so far been able to sell as much oil as it needs to. Brent crude LCOc1 futures fell $1.04 to settle at $72.13 a barrel, down 1.42 percent. The global benchmark hit a session low of $71.18 a barrel, the lowest price since Aug. 16. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 89 cents, or 1.41 percent, to settle at $62.21 a barrel. The session low was $61.31 a barrel, the weakest price since March 16. Iran said it has so far been able to sell as much oil as it needs and urged European countries opposed to U.S. sanctions to do more to shield Iran. The United States on Monday restored sanctions targeting Iran’s oil, banking and transport sectors and threatened more action. Treasury Secretary Steven Mnuchin said Washington aimed to bring Iranian oil exports to zero, but 180-day exemptions were granted to eight importers: China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey. This group takes as much as three-quarters of Iran’s seaborne oil exports, trade data shows, meaning the Islamic Republic will still be allowed to export some oil for now. Industry estimates suggest Iran’s oil exports have fallen 40 to 60 percent since Trump said in May he would reimpose sanctions. However, exemptions could allow exports to rise again after November. Turkish President Tayyip Erdogan said the country, a top importer of Iranian oil, would not abide by the sanctions, which he said were aimed at “unbalancing the world.” “While the Iranian sanctions should still be viewed as a latent bullish consideration capable of limiting much additional price slippage, it would appear that the Iranian factor alone will not be capable of spurring higher prices without major assistance from a renewed strengthening in the equities, sustainable weakening in the U.S. dollar or a significant cut back in OPEC production,”
WTI Extends Losses After Big Surprise Crude Build - WTI plunged to a $61 handle, and 7-month lows, ahead of tonight's API inventory data as trade war anxiety raised global demand fears and Iran sanctions exemptions lifted supply concerns.“Oil prices don’t have any real reason to rally significantly,” said Phil Streible, senior market strategist at R.J. O’Brien & Associates LLC in Chicago. And things got worse as WTI extended its losses after API reported. API:
- Crude +7.831mm (+2mm exp)
- Cushing +3.073mm (+2.1mm exp)
- Gasoline -1.195mm
- Distillates -3.638mm
The seventh weekly build in Crude and Cushing inventory levels (both considerably higher than expected)...WTI was hovering around $62.20 ahead of the API print but kneejerked lower “The U.S. has for now given a lifeline to Iran,” . “The end result of the sanctions is softer than expected. The final outcome of the sanctions also confirms the political fear of high gasoline prices.”And finally, Bloomberg's Javier Blas highlights perfectly why oil prices are sliding... #Oil Watch: @EIAgov is painting a quite difficult year for #OPEC+ group, with crude stock-builds in every quarter until 4Q 2019 | #OOTT pic.twitter.com/GnXfR7P3Ce
Oil prices rise on report of Russia, Saudi output cut talks - Oil rebounded towards $73 a barrel on Wednesday after falling to its lowest since August, supported by a report that Russia and Saudi Arabia are discussing oil output cuts in 2019. Russia's TASS news agency, citing an unnamed source, reported that the two countries, the biggest producers in an OPEC-led alliance that has been limiting supply since 2017, have started bilateral talks on the issue. "I think this is a little bit of verbal intervention, trying to get some speculative length back into the market," said analyst Olivier Jakob of Petromatrix. "The global supply and demand balance does not look very tight next year." Brent crude, the global benchmark, rose 80 cents, or 1.1 percent, to $72.93 a barrel by 8:41 a.m. ET (1341 GMT). The contract hit $71.18 on Tuesday, its lowest since Aug. 16. U.S. West Texas Intermediate crude rose 54 cents to $62.75. WTI touched a nearly eight-month low at $61.31 on Tuesday, falling more than 20-percent from its recent high and briefly trading in bear market territory. While Iranian oil exports are expected to fall because of U.S. sanctions that took effect on Monday, reports from OPEC and other forecasters have indicated that the global market could see a 2019 supply surplus as demand slows. A ministerial committee of some Organization of the Petroleum Exporting Countries members and allies, including Russia and Saudi Arabia, is due to meet on Sunday in Abu Dhabi to discuss the market and outlook for 2019. Any return to limiting supply would follow a June decision by the OPEC-led group to relax output curbs in place since 2017, after pressure from U.S. President Donald Trump to cool prices and make up for losses from Iran.
Oil Could Hit $100 If Supply Crunch Worsens -- Oil prices are likely to be “biased to the upside” for the rest of the year as demand from refineries rises in November and December, according to Citigroup Inc. An average price of $80 a barrel for this quarter is “realistic,” with spikes to $90 or even $100 possible if further disruptions worsen a supply crunch amid rising consumption, Citi’s Global Head of Commodities Research Ed Morse said Tuesday. Benchmark Brent crude topped $85 early last month on concern U.S. sanctions on Iran would create a shortage. Prices have since dropped back. The outlook comes as the Organization of Petroleum Exporting Countries and its allies send mixed supply signals to the market, with Russia suggesting it could push output to a record and an OPEC committee signaling the group could cap supply again in 2019. Central to the uncertainty is Iran, where the U.S. imposed sanctions this week while granting waivers to eight buyers of its crude. Iran is likely to continue sales of about 1 million barrels a day, Morse said in a Bloomberg Television interview, adding that the waivers don’t allow unlimited purchases. “How much oil is being granted from Iran to each of those eight countries? We can only surmise until we get a tweet from somebody in the government.” Supply disruptions can also be expected elsewhere, including in OPEC nations Nigeria, Libya and Venezuela, according to Morse. In Nigeria, where elections are coming up, “there are always disruptions and they average about half a million barrels a day,” he said.
Oil Poised for Longest Losing Run Since 2014-- Crude’s poised for the longest losing streak since 2014 as concerns of a supply crunch eased on a forecast for rising U.S. production and waivers for eight countries allowing temporary import of Iranian oil. Futures in New York fell as much as 0.9 percent and headed for an 8.5 percent drop in eight straight sessions. The U.S. government forecast the nation’s oil output will increase at a record pace this year, while industry data signaled American crude inventories rose last week. Meanwhile, the waivers will allow Iran to continue some exports to its top customers for another six months. Supply concerns that drove crude to a four-year high last month faded on speculation the U.S. would soften the blow of its sanctions on Iran to lower pump prices at home. The Organization of Petroleum Exporting Countries also pledged to offset any supply gaps. The group led by Saudi Arabia will gather in Abu Dhabi this weekend as they face a fresh surge of U.S. shale oil threatening to unleash a new surplus in 2019. “The focus for now remains on the waivers issued to eight countries, allowing them to continue the purchase of Iranian barrels temporarily,” said Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp. “There were more bearish overtones in terms of supply with the American crude output seen rising this year by the most ever, coupled with the call on OPEC to ramp up even higher.” West Texas Intermediate crude for December delivery dropped as much 54 cents to $61.67 a barrel on the New York Mercantile Exchange and traded at $61.82 on the New York Mercantile Exchange at 3:34 p.m. in Singapore. Total volume traded was almost double the 100-day average. Biggest Yearly GainBrent futures for January settlement slid 30 cents to $71.83 on the London-based ICE Futures Europe exchange. The contract fell 1.4 percent to close at $72.13 on Tuesday. The global benchmark crude traded at a $9.85 premium to WTI for the same month. In the U.S., the government is estimating the biggest yearly increase in domestic crude production. The output will average 10.9 million barrels a day this year, up from 9.35 million in 2017, the biggest gain on record, according to the Energy Information Administration. At the same time, industry data was said to show that nationwide oil inventories rose by 7.83 million barrels last week, while a median estimate in a Bloomberg survey of analysts expected a 2-million-barrel increase ahead of government data Wednesday.
WTI Tumbles After US Production Spikes To Record High - Despite sliding after last night's API-reported big Crude and Cushing build, WTI has rebounded overnight amid a post-midterms tumbling dollar, but a larger crude build than expected from DOE, combined with a smaller gasoline draw, could lead to WTI “set to test $60 easily,” Tariq Zahir, a commodity fund manager at Tyche Capital Advisors, says Additionally, Oil rose on the back of headlines that OPEC and its allies were said to plan talks on fresh production cuts next year, responding to recent increases in crude inventories amid surging U.S. supply. “The Saudis want to stop the price decay,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “There are many moving variables until the OPEC meeting in December, like Iran and U.S. production growth. But as the Saudis say they aim for market stability, if the data suggests an oversupplied market next year the probability of a cut is high.”However, as Bloomberg notes, if OPEC, led by Saudi Arabia, does ultimately decide fresh cutbacks are necessary, it will confront a number of challenges. It will need to once again secure the support of rival-turned-partner Russia, which has less need for high oil prices. There’s also the risk of antagonizing the kingdom’s key geopolitical ally, President Trump. DOE
- Crude +5.78mm (+2mm exp)
- Cushing +2.419mm (+2.1mm exp)
- Gasoline +1.85mm (-1.7mm exp)
- Distillates -3.465mm
Crude and Cushing inventories rose for the seventh straight week (considerably more than expected) and a surprise gasoline build, sent WTI prices back below pre-API levels from last night and back to a $61 handle... And as inventories rose, production surged a huge 400k b/d to a new record high... WTI's overnight gains sagged back to pre-API levels ahead of the DOE print and dropped below it as the data confirmed the builds... And finally, Bloomberg's Javier Blas highlights perfectly why oil prices are sliding... #Oil Watch: @EIAgov is painting a quite difficult year for #OPEC+ group, with crude stock-builds in every quarter until 4Q 2019 | #OOTT pic.twitter.com/GnXfR7P3Ce — Javier Blas (@JavierBlas) November 6, 2018
Oil slips after U.S. output hits record, crude stocks rise (Reuters) - Oil prices slipped on Wednesday, continuing a recent slide after surging U.S. crude output hit another record and domestic inventories rose more than expected. The U.S. Energy Information Administration (EIA) said domestic crude inventories rose 5.8 million barrels in the latest week, more than double analysts' expectations. Crude output hit 11.6 million bpd, a weekly record, though weekly figures can be volatile. Most recent monthly data for August showed overall production at more than 11.3 million bpd. U.S. crude futures fell 54 cents to settle at $61.67 a barrel, nearly 20 percent below a peak close of $76.41 a barrel in early October. "The market has yet to prove that it can hold onto a rally, so the short-term mood is still very negative," said Phil Flynn, analyst at Price Futures Group in Chicago. Brent crude, the global benchmark, settled down 6 cents to $72.07 a barrel, bouncing off its post-EIA session low on support from earlier reports that Russia and Saudi Arabia are discussing whether to cut crude output next year. While Iranian oil exports are expected to fall after U.S. sanctions took effect on Monday, reports from OPEC and other forecasters have indicated the global oil market could have a surplus in 2019 as demand slows. Also, the United States granted waivers on Iranian sanctions to eight countries who import that country's crude. "The market is now going to look to OPEC and non-OPEC producers to rein in production as the U.S. has granted eight countries waivers from sanction, which in essence adds to supply," said Andrew Lipow, president of Lipow Oil Associates in Houston. Russia and Saudi Arabia, top producers in an OPEC-led alliance, started bilateral talks on a return to production cuts next year, Russia's TASS news agency reported, citing an unnamed source. In June, the producer group decided to relax output curbs in place since 2017, after pressure from U.S. President Donald Trump. Analysts said those countries may be more willing to cut output now that the U.S. midterm elections are over. Trump, whose Republican party was fighting to retain control of congress, had complained of higher gasoline prices.
Oil Hits 8-Month Low on U.S. Crude Build, Output - The OPEC vs. U.S. shale oil battle is back, injecting fresh uncertainty into crude markets amid 8-month lows in crude prices and sanctions on Iranian exports. Barely a day after the U.S. midterm elections, where President Donald Trump had counted on major oil-producing allies of the United States keeping crude prices low to appeal to his conservative base of voters, OPEC suggested it was ready to cut output in a bid to shore up a market that had lost 20% of its value in the past five weeks. The producers' cartel is scheduled to meet next on Dec. 6. U.S. shale production, meanwhile, reached new record highs, with the Energy Information Administration announcing on Wednesday a weekly crude output of 11.6 million barrels per day. The EIA also cited a seventh-straight weekly rise in U.S. crude inventories, with stockpiles growing by 5.8 million barrels last week vs forecasts for a 2.4 million increase. Six of the past seven weeks have seen outsize builds. The conflicting picture of OPEC wanting to cut production vs U.S. output bursting at the seams pitched crude oil markets into new uncertain ground. U.S. WTI settled down 54 cents, or 1%, at $61.67 per barrel, after hitting a March low of $61.20. Earlier in the session, the U.S. crude market had risen nearly $1 earlier. Since early October, WTI has lost about 20%, falling into bear market territory, after hitting four-year highs of nearly $77. U.K. Brent crude, the international benchmark for oil, was off 2 cents, or 0.03%, to $72.11 per barrel. That was about 17% off Brent's four-year highs above $86 hit last month. Earlier on Wednesday, Brent was down as much as 76 cents. Oil prices jumped 20% over a five-month period after Trump canceled in May an Obama-era deal with Iran that let Tehran export oil in exchange for curbs on its nuclear program. But after hitting four-year highs, the market tanked over the past five weeks on OPEC kingpin Saudi Arabia's initial assurance that it will pump as much crude as necessary to make up for the lost Iranian exports, estimated at anywhere between 1.5 million and 2.5 million bpd. This week, as the sanctions on Tehran officially began, the Trump administration issued waivers to eight countries to continue importing from the Islamic Republic over the next six months. That depressed crude prices further. But OPEC sources told Reuters Wednesday the cartel could return to production cuts by next year, which seemed to suggest a change in the Saudi stance.
Trump on falling oil prices: 'That's because of me' --President Donald Trump on Wednesday claimed credit for falling oil prices, glossing over market forces that knocked crude futures from four-year highs last month.Trump also appeared to hint that his administration may not tighten sanctions on Iran's oil exports if crude prices start rallying again, saying the measures will "maybe" get tougher.The president did not clearly elaborate on why he deserves credit for the pullback in oil markets, but he linked falling prices to his disdain for the 15-nation OPEC cartel and his administration's Iran policy.The Trump administration on Friday announced it would grant sanctions waivers to eight countries, which allow them to continue importing Iranian crude for 180 days without fear of reprisal from the United States. The Trump administration restored sanctions on Iran, OPEC's third-biggest oil producer, on Monday."I gave some countries a break on the oil," Trump said during a lengthy, wide-ranging press conference the day after Republicans lost control of the House of Representatives in the midterm elections. "I did it a little bit because they really asked for some help, but I really did it because I don't want to drive oil prices up to $100 a barrel or $150 a barrel, because I'm driving them down.""If you look at oil prices they've come down very substantially over the last couple of months," Trump said. "That's because of me. Because you have a monopoly called OPEC, and I don't like that monopoly."Oil prices have tumbled as much as 20 percent from four-year highs on Oct. 3. However, the decline since Trump officials first announced the waivers on Friday has been significantly smaller — about 1 percent for international benchmark Brent crude and 3 percent for U.S. crude.
Why Oil Prices Will Fall In 2019 And Beyond The decision by the U.S. to grant waivers to eight countries, allowing them to continue to import oil from Iran, has helped ease the tension in the oil market. No longer are oil traders talking about $100 oil. Iran’s oil exports stood at 1.7 million barrels per day in October and won’t fall to zero anytime soon. But that may not be the end of the story. “While consistent with our expectations, the granting of waivers does not imply that Iran exports will stabilize near current levels,” Goldman Sachs said in a research note on November 1. As more Iranian supply goes offline, the market will continue to tighten. Iran could lose nearly 600,000 bpd of exports by the end of the year, relative to October levels, the bank predicts.“As a result, we still expect that the global oil market will be in deficit in 4Q18, leading to a strengthening in Brent timespreads,” Goldman said.In fact, while everyone focuses on the short-term movements in oil prices, Goldman says it’s important to look at the futures curve.“In our view, the most interesting takeaway from today’s oil price sell-off is the parallel shift in the crude forward curve. This is consistent with a move down on the oil cost curve as recent supply news (less Iran losses, more US and Saudi production) point to fewer high-cost marginal barrels needed in 2019,” the bank said.That’s a bit of financial jargon, but the gist is that traders are suddenly less concerned that high-cost producers will be needed to supply the marginal barrel. Earlier this year, when Iran sanctions were announced and fears about Permian bottlenecks permeated into the market, oil futures prices rose sharply, with Brent five-year prices rising from $57 per barrel in May to $68 per barrel in September. This can be boiled down to investors believing that the oil market will need high-cost production in the years ahead to supply the marginal barrel, as low-cost producers are at their maximum levels.However, over the last few weeks, the five-year Brent price fell back.“The retracing of this last move higher reflects the realization that such high cost marginal barrels may no longer be needed,” Goldman Sachs analysts wrote.
Oil Market Faces Precarious Few Months - The oil market faces a precarious few months. That’s according to Wood Mackenzie’s (WoodMac) latest edition of the Edge, a regular column penned by the company’s chairman and chief analyst Simon Flowers. “The biggest risk is this winter. Losing another 1 million barrels per day or more from Iran comes on top of a similar loss in supply from Venezuela over the last couple of years,” Flowers stated in the column. “Saudi Arabia, UAE and Kuwait have stepped up production since July to minimize the increase in price as the market tightens. We think there’s just enough growth in supply from elsewhere to muddle through the next few months, meet winter demand and avert a price spike. Brent should hold around U.S.$78 a barrel, but it’s a very fine line,” he added. “OPEC spare capacity was an ample four million to five million barrels per day two years ago. There’s only 700,000 barrels per day of additional available within 30 days right now. That means the market is vulnerable to strong demand in a cold winter or any new supply outage,” Flowers continued. The WoodMac representative said the situation “may look better” once the northern winter is over, “but only up to a point”. “We forecast that Brent will ease and average U.S.$74 a barrel in 2019. We expect supply to grow 1.6 million barrels per day in 2019, with U.S. tight oil driving this. That’s well ahead of 1.2 million barrels per day of demand growth and should lead to a healthy inventory build during the year,” Flowers stated. “But with Iran in the full grip of sanctions and Venezuela continuing to decline, that limited OPEC spare capacity will cast a shadow over the market for some time,” he added. Earlier this month, the November OPEC Bulletin commentary piece stated that “there will no doubt be hard times to come in the oil industry,” listing geopolitical storms, disruptive weather events, speculation and transportation issues as examples of drivers. The commentary piece added, however, that the platform for dialogue created through the group’s Declaration of Cooperation “can help calm stormy waters and provide the ship that is our industry safe passage”.
OPEC is now talking about moves to support oil prices - OPEC is enduring one of the most head-spinning years in its history, swerving from cutting oil production to boosting it as quickly as possible. Now it's talking about reversing course again. Ministers from the group gathering in Abu Dhabi this weekend will discuss the possibility of cutting production again next year, according to delegates, a move that would mark an abrupt end to six months of supply increases. The group is responding to a worrying prospect: Even though US sanctions on Iran are removing significant amounts of crude from world markets, a fresh surge of American shale oil threatens to unleash a new surplus in 2019. Some members are concerned that inventories are rising, said the delegates, who asked not to be named as the discussions are private. Crude prices already reflect this. Brent for January delivery has retreated about 15 per cent from a four-year high reached in early October. The Organisation of Petroleum Exporting Countries and its allies are showing they're worried, signalling last month that they might need to dial back near-record output levels. .
Saudi Arabia, Russia should cut ‘at least 1 mil b/d instantly’ - Saudi Arabia and Russia, both of whom have boosted their crude output in recent months, were responsible for a $15/b drop in the price of oil and “should cut at least 1 million b/d instantly”, an OPEC delegate told S&P Global Platts. The two countries, the largest producers in the OPEC/non-OPEC coalition, needed to “get back [to] OPEC the $15/b loss that they caused”, the delegate said on condition of anonymity. The comments come as Saudi Arabia and Russia were reportedly discussing a production cut in 2019, Russian news agency Tass reported earlier Wednesday. Saudi officials could not be reached for comment. ICE Brent futures were trading at $73.03/b at 1307 GMT Wednesday, after hitting a four-year high October 3 at $86.29/b. A six-country OPEC/non-OPEC Joint Ministerial Monitoring Committee co-chaired by Saudi Arabia and Russia meets Sunday in Abu Dhabi to assess market conditions. The next full OPEC meeting is December 6 in Vienna. The coalition on June 23 agreed to raise production by a combined 1 million b/d from May levels by reducing overcompliance with production cuts, in order to offset expected losses by sanctions-hit Iran and Venezuela. Saudi energy minister Khalid al-Falih said last month the kingdom was producing about 10.7 million b/d, near its record high and almost 700,000 b/d more than it was producing in May. Russia, meanwhile, reported Friday that it hit an all-time high of 11.41 million b/d, up about 440,000 b/d from May.
US crude falls into bear market as growing oil output points to oversupply - U.S. crude prices dropped for a ninth consecutive session on Thursday, falling into a bear market, on further signs of growing supply and data showing record Chinese oil imports. U.S. West Texas Intermediate crude futures fell 68 cents, or 1.1 percent, to $60.99 by 9:58 a.m. ET. That is down 20.7 percent from last month's four-year high at $76.90, putting WTI in bear market territory. Brent crude futures was down 74 cents, or 1 percent, at $71.33 a barrel. The international benchmark is down nearly 18 percent since Oct. 3, when Brent hit $86.74, its highest level since late 2014.The U.S. Energy Information Administration forecast this week that U.S. oil production will average 12.1 million barrels per day in 2019, marking an upward revision from its last projection. U.S. crude production hit an all-time high at 11.6 million barrels per day last week, according to preliminary figures released by EIA on Wednesday. If confirmed during revisions, it would more firmly establish the United States as the world's top oil producer.The other producers in the top three, Saudi Arabia and Russia, have been dialing up production since June."All three of them are continuing to pump at record levels, that's been ... part of what's causing oil to move into a bear market," Tamar Essner, director of energy and utilities at Nasdaq Corporate Solutions, told CNBC's "Worldwide Exchange."China's crude imports rose 32 percent in October compared with a year earlier to 9.61 million barrels per day (bpd), customs data showed on Thursday. "Crude oil imports rose ... as uncertainty around tariffs on U.S. imports and sanctions on Iran eased," ANZ bank said.
Oil Ends Down for 9th-Straight Day; $60 Support Looks Fragile - Is $60 oil on its last legs before OPEC comes to save the day for the bulls? The front-month contract in U.S. West Texas Intermediate came less than $1 to breaking the $60 per barrel support in Thursday's session as the tumble in crude futures continued a ninth-straight day for the market's worst losing streak in more than four years. Brent, the international benchmark for oil, was similarly at risk with losing its $70 per barrel support. Technically in a bear market after losing more than 20% from the highs of early October, the selloff in oil seems unstoppable despite OPEC's rumblings on Wednesday that it might join Russia to cut output as early as next month to put a floor beneath the market. Instead, traders seemed fixated on the new weekly record high of 11.6 million barrels per day in U.S. crude production cited by the Energy Information Administration. The EIA, which delivered that data on Wednesday, also announced a seventh-straight weekly rise in U.S. crude stockpiles, of which six have been outsize builds. Compounding the bearish mood, market intelligence firm Genscape reported on Thursday a 2.2-million-barrel weekly build at the Cushing, Okla. delivery base for WTI, traders who saw the data said. Any weekly Cushing build above 1 million barrels is typically bearish for oil prices. "The market is almost daring OPEC to do something now," said John Kilduff, oil trader and partner at New York energy hedge fund Again Capital. "We have an OPEC meeting this weekend and I find it hard to believe they are not going to get together and try and talk this market back up." The Joint OPEC-Non-OPEC Ministerial Monitoring Committee, which includes Saudi Arabia and other major Middle Eastern oil producers along with Russia, will be meeting this weekend in Abu Dhabi. That will be followed by OPEC's monthly meeting in Vienna on Dec. 6, where production quotas are usually finalized. Russia will be meeting with OPEC a day after that, in line with the cooperation that has existed since 2015 between the cartel and Moscow to intervene in any collapse in global oil prices. U.S. WTI settled $1 down, or 1.8%, at $60.67 per barrel, after hitting an 8-month low at $60.56. WTI is down 21% since hitting four-year highs of nearly $77 in early October. With Thursday's slide, WTI has settled down without a pause since Oct 29. The last time it experienced such a losing streak was between June 26 and July 9 2014, when it fell 10 sessions in a row. Brent crude was down $1.37, or almost 2%, to $70.70 per barrel by 2:55 PM ET (19:55 GMT). That was almost 20% off Brent's four-year highs of nearly $87 hit last month.
Cramer predicts oil prices as low as $40 a barrel as US crude falls into bear market --U.S. oil prices are in a "ferocious" bear market, and crude could fall to as low as $40 per barrel, CNBC's Jim Cramer said Thursday."Oil is collapsing guys. It's collapsing," Cramer said on "Squawk on the Street." Asked if prices could fall to $50 per barrel, Cramer said, "I could make a case for the $40s here. I'm not kidding."The "Mad Money" host did not provide a timeline for his case.Oil was lingering near multimonth lows on Thursday morning, with the American benchmark West Texas Intermediate crude dropping to around $61 per barrel.Record U.S. crude production and signals from Iraq, the United Arab Emiratesand Indonesia that output will grow more quickly than expected in 2019 were pressuring oil prices."Demand is slowing for oil and we're pumping like mad," Cramer said Thursday.Oil demand is still expected to rise next year, but forecasters now expect less robust growth in global crude consumption due to economic concerns fueled by trade tensions and currency weakness in emerging markets. Cramer said Monday that rosy outlooks from major oil companies Exxon Mobil, Chevron and BP do not reflect the economic reality. He said investors betting on those companies may be making a "bad call."
Crude oil futures contango grows as market eyes supply glut; NYMEX WTI down to $61.19/b, ICE Brent $71.63/b — Contango in WTI and Brent crude futures widened in midmorning trading Thursday as the market eyed a growing global supply glut. Prompt-month NYMEX WTI futures were trading a around 18 cents/b below second-month levels Thursday morning, but at a steep 2.12/b discount compared to month 12 prices. Prompt ICE Brent contracts were also holding around 18 cents/b below second-month levels and 19 cents/b under 12-month prices. US inventory builds, especially at the delivery point of the NYMEX crude contract in Cushing, Oklahoma, has pushed the forward curve into contango since mid October. But the collapse in the one-year spread has been acute. The prompt-month/12-month WTI spread settled at a 22 cent/b backwardation as recently as October 26. This backwardation was as wide as $1.90/b this time last month. "Simply put, abundant supplies of crude, both foreign and domestic, are now bidding for storage space. This is a complete and total reversal of what was happening and there seems to be, at this point, nothing that shall reverse this trend," NYMEX December WTI was down 48 cents at $61.19/b and ICE January Brent was 44 cents lower at $71.63/b. US commercial crude supply expanded for a seventh consecutive week, growing 5.78 million barrels to 431.79 million barrels during the week ended November 2, US Energy Information Administration reported. This week EIA revised its US production forecasts higher to 10.9 million b/d in 2018 and 12.06 million b/d for 2019. Last week US production rose to a fresh all-time high of 11.6 million b/d, EIA data showed. Saudi Arabia production tested all-time highs at 10.7 million b/d in October, a 700,000 b/d increase from May levels, and Russia reported Friday that it hit an all-time high of 11.41 million b/d, up about 440,000 b/d from May. Concurrently with the build out in global supply, this week Washington issued sanctions waivers to eight importers of Iranian crude, further mitigating the impact of the re-imposed sanctions on oil prices. Products futures were mixed as the market pulled back from yesterday's reactionary positions in the wake of the EIA data release. NYMEX December RBOB was up 1.32 cents at $1.6606/gal. RBOB settled 4.66 cents lower on Wednesday following a surprise 1.85 million barrel EIA-reported build in inventories last week. But NYMEX December ULSD gave back most of yesterday's gains and was 4.66 cents lower at $2.1905/gal.
Crude Oil Has Another Down Day - West Texas Intermediate (WTI) crude oil for December delivery lost nearly 2 percent Thursday, falling $1.00 to settle at $60.67 a barrel (bbl). The WTI did manage to clear the $62 mark, reaching an intraday high of $62.42, but Thursday’s settlement price was much closer to the $60.42 intraday low. The January Brent contract price settled at $70.65 a barrel, translating into a $1.42 decline for the day. Traders on Thursday digested the weekly U.S. crude oil inventories report from the Energy Information Administration (EIA). On Wednesday, EIA stated that crude stocks rose to 431.8 million barrels (bbl) for the week ending November 2, translating into a 5.8 million-bbl build for the week. On Wednesday, EIA also revealed that it has lowered its predictions for the average WTI and Brent prices for next year by 7 percent and 4 percent, respectively. EIA stated that it expects the WTI to average $65 per bbl in 2019; previously, it had projected a $70 average for the benchmark. For the Brent, EIA anticipates a $72-per-bbl average, down $3 from its earlier forecast. EIA reported that it attributes the price forecast adjustments in part to higher-than-expected U.S. crude oil production during the second half of 2018 and in 2019. It now anticipates that domestic crude output for 2018 will average 10.9 million bpd – up 160,000 bpd from its earlier projection. Moreover, EIA increased its 2019 average daily production forecast by 300,000 bpd to 12.1 million bpd. “The increased U.S. crude oil production is expected to contribute to global crude oil inventory growth and put downward pressure on crude oil prices,” EIA stated. December reformulated gasoline (RBOB) posted a slight loss Thursday, declining less than a penny to settle at $1.64 a gallon. Front-month Henry Hub natural gas futures also ended the day lower, falling approximately one cent to $3.54.
Oil Teeters Near Record Losing Streak -- Oil’s set for its longest stretch of declines on record after entering a bear market, with investors awaiting a weekend meeting of OPEC and its allies to discuss output strategy. Futures in New York are slipping for a 10th day, extending a dramatic plunge that’s dragged prices down over 20 percent from a 2014-high just five weeks ago. The slump has rattled producers, and the Organization of Petroleum Exporting Countries has signaled it may cut output next year -- an option that’ll be part of talks when the group meets with partners in Abu Dhabi on Sunday. Oil’s slump has been exacerbated by a U.S. decision to allow eight countries to continue importing from Iran even after it hits the OPEC member with sanctions. That revived concerns of a supply glut, in contrast to earlier fears over a crude crunch due to shrinking exports from the Persian Gulf state. Pledges by other producers such as Saudi Arabia to pump more and record American supply as well as rising stockpiles also weighed on prices. West Texas Intermediate for December delivery traded 6 cents lower at $60.61 a barrel on the New York Mercantile Exchange at 3:20 p.m. in Singapore. The contract fell 1.6 percent to $60.67 on Thursday, and is headed for a 4 percent decline on the week -- its fifth consecutive decrease. Total volume traded was 35 percent above the 100-day average. Brent futures for January settlement edged up 9 cents to $70.74 a barrel on the London-based ICE Futures Europe exchange. Prices are also on course for a fifth weekly drop, down 2.9 percent. The global benchmark crude traded at a $9.93 premium to WTI for the same month. A potential decision to return to output cuts by OPEC would mark the second production U-turn this year for the group, some members of which are said to be concerned that inventories are rising. For Saudi Arabia -- the world’s biggest crude exporter -- a reduction would mark the third time in recent years the kingdom has delivered a supply surge only to quickly reverse it. In the U.S., crude production increased to 11.6 million barrels per day last week, the highest level on record, according to Energy Information Administration data. At the same time, nationwide stockpiles rose 5.8 million barrels last week, compared to a 2-million-barrel gain expected in a Bloomberg survey.
Baker Hughes data show biggest weekly rise in U.S. oil-rig count since May - Baker Hughes on Friday reported that the number of active U.S. rigs drilling for oil climbed by 12 to 886 this week. That was the biggest weekly oil-rig rise since the week ended May 25, when the number rose by 15. The total active U.S. rig count, which includes oil and natural-gas rigs, was up 14 at 1,081, according to Baker Hughes. December West Texas Intermediate was down 68 cents, or 1.1%, at $59.99 a barrel from Thursday's finish, unchanged from before the rig data Friday.
Oil prices down 20 percent in a month as fundamentals weaken --U.S. crude prices fell for a 10th consecutive session on Friday, sinking U.S. crude futures deeper into bear market territory and wiping out the benchmark's gains for the year. The 10-day decline is the longest losing streak on record for U.S. crude, according to FactSet data going back to November 1984. Crude futures are poised for their fifth straight week of losses as growing output from key producers and a deteriorating outlook for oil demand deepen a sell-off spurred by October's broader market sell-off. The drop marks a stunning reversal from last month, when oil prices hit nearly four-year highs as the market braced for potential shortages once U.S. sanctions on Iran, OPEC's third biggest oil producer, snapped back into place. "The reality is that we're still in a world where we're overproducing and we've got surplus."U.S. West Texas Intermediate crude fell 82 cents, or 1.4 percent, to $59.85 by 9:03 a.m. ET (1403 GMT). The contract is now down nearly 1 percent since the start of the year. It fell as low $59.28 on Friday, its weakest level in nearly nine months. WTI fell into a bear market in the previous session, tumbling more than 20 percent from a nearly four-year high last month at $76.90.International benchmark Brent crude was trading 67 cents lower at $69.98, down 1 percent for the day and more than 19 percent from its recent high. The contract touched a seven-month low at $69.13 on Friday. Brent has fallen in nine of the last 10 sessions, but is still up more than 4 percent this year.
What’s Behind The Oil Price Crash? - Oil prices fell to multi-month lows at the end of the week, as a confluence of factors all point in a bearish direction. The EIA reported that U.S. oil production skyrocketed to 11.6 million barrels per day (mb/d) for the week ending on November 2. Despite fears that shale output would plateau because of pipeline constraints, the shale industry is firing on all cylinders. The figures also help explain the recent downturn in prices. . Russia’s oil production is at a post-Soviet record high, but a cut in output may actually work to the benefit of Russian producers. “Producing less at $80 per barrel is better than producing at current levels and at $70 per barrel,” Alexander Losev, chief executive officer of Sputnik Asset Management, told Bloomberg. “A certain output decline will also help the companies to reduce operating costs and further improve their financials, including free cash flow.” Saudi Arabia increased production in 2015, 2016 and again this year. The first two times, the kingdom backtracked as oil prices sank amid swelling inventories. The potential third production cut in four years suggests Saudi Arabia once again ramped up too quickly, Bloomberg argues. A technical committee for OPEC+ is set to meet this weekend to consider options for 2019, including a possible production cut. Chevron is one of a handful of oil majors that have stuck it out in Venezuela even as the country continues to fall apart. The oil major’s assets are no longer profitable, and the Wall Street Journal reports that the company is growing weary of the problems. In response to the article, Chevron denied the potential exit. “We’re committed to Venezuela and we plan to be there for many years to come,” Clay Neff, Chevron’s president for Africa and Latin America, said in an interview late Thursday with Bloomberg. The reporting that Chevron might pack up and leave “is not accurate.”
WTI drops for a 10th straight day, dipping below US$60 to a near nine-month low - – Crude oil prices dipped to near a nine-month low as they fell for a tenth consecutive day, potentially having an impact on the Bank of Canada interest rate decision next month. West Texas Intermediate dipped to a low of US$59.26 before closing off 83 cents or 1.4 per cent to US$59.84. Since its peak last month, WTI is down about 22 per cent as it experienced a fifth consecutive weekly drop. And the December crude contract was down 48 cents at US$60.19 per barrel to the lowest level since February. A glut of oil production is the main cause of the declines in prices of WTI and Brent crude. The United States has taken the crown as the world’s leading oil producer after output increased by two million barrels per day over the last year to reach 11.6 million bpd. At the same time, OPEC is over-producing and sanctions have been watered down against Iran as the U.S. granted waivers on the sanctions to eight countries over concerns that a complete end of Iranian imports would cause economic disruptions. “But sentiment has also driven down the prices with fears on global growth weakening and therefore slowing oil demand,” says Cavan Yie, a portfolio manager at Manulife Asset Management. The situation is compounded in Canada where the price differential with the Western Canadian Select has widened considerably because of the lack of pipelines to carry crude out of Alberta. And a Montana judge’s ruling that the Keystone XL project needs further work is another black mark for Canadian energy investors, he said. “It’s been a challenging year so far for the energy patch,” Yie said in an interview. Low Canadian oil prices are having a negative impact on government tax revenues and the Alberta economy, which will likely impact the Bank of Canada’s rate hike decision next month, he said. “I think for sure it should be incrementally negative for their stance on future interest rate hikes,” he said. “I think the probabilities are probably a little lower.”
Saudi Arabia considering breaking up OPEC — report - Saudi Arabia's top government-funded think tank is researching, on behalf of the oil-rich kingdom, the possible effects an OPEC breakup would have on global oil markets. A report in The Wall Street Journal, which quotes an unnamed "senior Saudi adviser" at length, says that while the ongoing research does not reflect an active debate inside the government over whether the country should leave OPEC or not, it is part of a wider rethinking about Saudi Arabia's near 60-year membership of the cartel. Founded in 1960, OPEC currently has 15 members — six in the Middle East, seven in Africa and two in South America. Saudi Arabia has long been the dominant force within the group, accounting for around one-third of the organization's total oil production.However, with US oil production rising sharply over the last decade, and with increased political pressure on Saudi Arabia following the murder of journalist Jamal Khashoggi after he entered the Saudi Consulate in Istanbul, the Middle Eastern country is apparently reviewing the status quo in global oil production.For years, OPEC has regulated oil production in order to control global prices. OPEC members such as Saudi Arabia have long argued that the organization helps prevent oil prices from getting too high or too low, but critics say OPEC takes advantage of big oil-consuming nations, such as the United States. US President Donald Trump is a persistent critic.
Saudi Arabia Is Evaluating A Break Up Of OPEC - In potentially groundbreaking news - which failed to generate a market response as it hit at the same time as the FOMC statement - Saudi Arabia’s top government-funded think tank is said to be studying the possible effects on oil markets of a breakup of OPEC, a research effort which the WSJ called "remarkable" for a country that has dominated the oil cartel for nearly 60 years.The OPEC study aims to “assess the short/medium-term consequences of a dissolution of OPEC,” according to an overview reviewed by The Wall Street Journal. It is intended to determine how the global oil market, and Saudi finances, would look “if coordination between oil producing countries disappear,” according to the overview.The overview describes two scenarios to investigate, if OPEC isn’t in the picture:
- All big oil producers, including Saudi Arabia, act competitively—fighting each other for market share;
- Saudi Arabia, instead, attempts to leverage its massive oil output alone to help balance global supply and demand in an attempt to keep oil prices steady—similar to the role that members say OPEC plays today.
The timing of the report, which is hardly a arbitrary, coincides with rising pressures on the Saudi government, including from the U.S., where President Trump has accused the cartel of pushing up oil prices, and from investors who distanced themselves from the kingdom after the brutal killing of a U.S.-based Saudi journalist.Just as remarkably, while the think tank’s president, Adam Sieminski told the WSJ that the study "hadn’t been triggered by Mr. Trump’s statements", a senior adviser familiar with the project said it provided an opportunity to take into account the criticism from Washington. Depending on the findings, the study could offer a defense of the cartel and the Saudi role in it; alternatively it could potentially advocate for a repeat of November 2014, when the cartel was effectively dissolved for a period of time.
Saudi Arabia Post the Khashoggi Tragedy | Arabia Foundation – The killing of Washington Post columnist Jamal Khashoggi has left the Kingdom of Saudi Arabia in its weakest diplomatic position since the horrific terror attacks of September 11. Khashoggi’s murder followed a series of Saudi missteps that had already left many questioning the country’s trajectory, including the arrests of women activists, the Saudi-German and Saudi-Canadian diplomatic crises, and the imbroglio surrounding Lebanese prime minister Saad Hariri. Additionally, the kingdom’s critical failure to clearly communicate the rationale behind and the objectives for both the Qatar boycott and the Yemen war—the latter of which has exacted a catastrophic humanitarian toll—has vastly compounded these errors in the eyes of the global community. Talk about diplomatically isolating Saudi Arabia, along with the presumptuous call to remove Crown Prince Mohammed bin Salman (MBS), however, is neither realistic nor prudent. As a member of the G20 and one of the world’s leading oil producers, the kingdom is a linchpin in the global economy and energy market. Washington’s ongoing efforts to maximize the economic pressure placed on Iran are contingent on Riyadh’s maximizing its oil output. And politically, the kingdom represents one of the last bastions of stability in an anarchic Middle East. Saudi Arabia is also, as CENTCOM commander General Joseph Votel reiterated earlier this week, “an extraordinarily important security partner.” It is also a vital intelligence asset in the wars against al-Qaeda and ISIS and a key buffer in the effort to contain the Islamic Republic’s policy of revolutionary expansionism. Revisiting the royal succession not only would upend an appointment that has finally put to rest years of political uncertainty over the generational transfer of power within the royal family but also may place at risk the essential reforms that MBS has successfully pushed through, because any successor would likely overturn many of these reforms to gain support from the clerical class and other disgruntled elements of society.
Saudi campaign to abduct and silence rivals abroad goes back decades - WaPo- The killing of journalist Jamal Khashoggi in Istanbul last month by a team of Saudi agents dispatched from Riyadh has prompted fresh scrutiny of the kingdom’s pursuit of Saudi nationals abroad, from ordinary dissidents to defectors from the tight ranks of the royal family. The effort to silence Saudi critics abroad stretches back decades and over the tenure of several monarchs. But Crown Prince Mohammed bin Salman, the kingdom’s de facto ruler, has pursued the practice with an especially ruthless zeal since gaining his position last year, analysts said, even making the return of dissenters abroad a formal policy of the state, according to a Saudi official, who insisted such returns were to be negotiated rather than coerced. To repatriate its critics, the Saudi government has tried to lure them back or enlisted friendly regional governments to arrest them or even carried out brazen kidnappings in Europe. Saudi nationals have vanished from hotel rooms, been snatched from cars or had planes they were flying on diverted. One Saudi dissident prince said in a court filing that he was injected in the neck and spirited away on a private jet from Geneva to Saudi Arabia. Years later, after he managed to leave the kingdom, he disappeared again and has not been heard from since. “We know they can kill you; they can destroy your family or use them against you,” said one Saudi women’s rights activist who applied for political asylum in the United States last year. “It’s always been like this,” she said, adding that Mohammed’s aggressive pursuit of critics had further rattled an already paranoid community of Saudi expatriates. A Saudi government media office did not immediately respond to an email requesting comment on the abductions. Jarba was not a dissident, but he may have been wanted because of his association with a branch of the royal family that had fallen out of favor with the Saudi leadership, according to the two people familiar with the circumstances of his capture. He was a longtime friend and confidant of Prince Turki bin Abdullah, a son of the late King Abdullah. Turki was arrested last November as Saudi authorities detained hundreds of people, including royal family members, business executives and government officials, in what was billed as an anti-corruption operation.
After Brother's Sudden Release From Detention, Alwaleed Says MbS Will Be 100% Vindicated In Khashoggi's Murder - Billionaire Saudi Prince Alwaleed bin Talal - who was reportedly strung up and beaten by US mercenaries during the Saudi Arabian "purge" exactly one year ago Sunday - said on Sunday that an official investigation into the death of journalist Jamal Khashoggi will exonerate the Crown Prince, Mohammed bin Salman (MbS) "100%". Speaking with Fox News's Maria Bartiromo, Alwaleed said "I ask Saudi Arabia now publicly, through your program, to have the investigation made public as soon as possible," adding "I believe the Saudi crown prince will be 100 percent vindicated and exonerated." Regarding last year's purge during which dozens of princes and senior Saudi figures were rounded up and detained at the Ritz Carlton in Riyadh in an "anti-corruption" crackdown - only to be freed after giving up a majority of their wealth, Alwaleed chalked his imprisonment up to a "misunderstanding," which has been "forgiven and forgotten." before touting MbS as "for real," and that the Crown Prince is "changing Saudi Arabia in a very revolutionary manner."
Saudi Journalist Tortured to Death in Prison — Saudi journalist and writer Turki Bin Abdul Aziz Al-Jasser has died after being tortured while in detention, the New Khaleej reported yesterday. Authorities believe that the writer Turki bin Abdul Aziz al-Jasser (TurkialjasserJ) is the Twitterati KASHKOOL (coluche_ar), private #Saudi security sources asserted to us. The source confirmed what ALQST tweeted about using personal information in Jasser's PC to blackmail himpic.twitter.com/qkNmZe0e2w — Prisoners of Conscie (@m3takl_en) March 18, 2018
Saudi Arabia Grilled Over Human Rights Record at UN Meeting in Geneva — Saudi Arabia has insisted that its investigation into the killing of journalist Jamal Khashoggi will be “fair”, amid a barrage of criticism at a United Nations meeting on Monday.The half-day public debate at the UN Human Rights Council in Geneva came just over than a month after the Saudi insider-turned-critic was murdered in the Saudi consulate in Istanbul.Turkish officials said last week that Khashoggi was strangled as soon as he entered the consulate on 2 October in a planned hit, and his body was then dismembered and dissolved in acid.The head of the Saudi Human Rights Commission, Bandar Al Aiban, stressed that the “country is committed to carry out a fair investigation”.“All persons involved in that crime will be prosecuted,” he said.The so-called Universal Periodic Review – which all 193 UN-member countries must undergo approximately every four years – came as a Turkish official charged on Monday that Saudi Arabia sent experts to Turkey to cover up the journalist’s murder before allowing Turkish police to search the consulate.The murder has placed huge strains on Saudi Arabia’s relationship with the United States and other allies and has tarnished the image of powerful Crown Prince Mohammed bin Salman. During Monday’s review, several Western countries voiced outrage at the killing, with many calling for a “credible” and “transparent” investigation, and some, like Iceland and Costa Rica, went further and demanded an international probe. The British ambassador to the UN, Julian Braithwaite, told the council his country was “gravely concerned about the deteriorating human rights situation in Saudi Arabia”, pointing to women’s rights, mass arrests of rights defenders and the extensive use of the death penalty.
Why Benjamin Netanyahu Defends the Crown Prince of Saudi Arabia — For the past month, while governments and media outlet around the world sounded a drumbeat of shock and dismay over the murder of Saudi journalist Jamal Khashoggi, all that could be heard on the subject from Israel was the sound of crickets. Israeli columnist Ben Caspit said his country’s leadership was avoiding the subject “like the plague.” It appears no Israeli politician wants to say anything for fear of offending that country’s latest Arab bromantic partner, Crown Prince Mohammed bin Salman. Bin Salman, according to many analysts, would have had to have ordered the murder of a figure as prominent as Khashoggi. Then on Friday Israeli Prime Minister Benjamin Netanyahu finally gave his view on the Khashoggi case, saying it had to be “dealt with” but not at the cost of the stability of Saudi Arabia and the fight against Iran. “What happened in the Istanbul consulate was horrendous and it should be duly dealt with,” he said. “Yet at the same time it is very important, for the stability of the world and the region, that Saudi Arabia remain stable.” MBS, as he’s known, is the key Arab linchpin of the Trump-Netanyahu deal of the century, which is supposed to finally resolve the Israel-Palestine conflict. The details of the delayed proposal, which Trump and his Middle East appointees continue to promote, has been widely reported in various media outlets. Leaked parts of the deal, many analysts say, suggest it is highly favorable to Israeli interests and largely disregards Palestinian rights. Despite the one-sided nature of the plan, MBS has dutifully attempted to sell it to the Palestinian leadership. In a command performance, in which the Saudi crown prince summoned Palestinian Authority President Mahmoud Abbas to his royal palace, MBS told a reluctant Abbas that if he didn’t acquiesce, he should resign. The implication was that the Saudis would find another Palestinian leader who would agree to such a deal. So far, Abbas has resisted this Saudi offer and not lost his head – or his job. A peace agreement that is favorable to the Israelis is something that comes along once in a lifetime. So, Netanyahu realizes that stepping into the Khashoggi imbroglio is the last thing he wants to do. If there is even a slight chance the Saudi prince can come through, he doesn’t want to upset this apple cart.
The Unraveling of the Netanyahu Project for the Middle East - Alastair Crooke - Nahum Barnea, a leading Israeli commentator, writing in Yedioth Ahronoth in May (in Hebrew), set out, unambiguously, the ‘deal’ behind Trump’s Middle East policy: In the wake of the US exit from JCPOA [which occurred on 8 May], Trump, Barnea wrote, will threaten a rain of ‘fire and fury’ onto Tehran … whilst Putin is expected to restrain Iran from attacking Israel using Syrian territory, thus leaving Netanyahu free to set new ‘rules of the game’ by which the Israel may attack and destroy Iranian forces anywhere in Syria (and not just in the border area, as earlier agreed) when it wishes, without fear of retaliation.This represented one level to the Netanyahu strategy: Iranian restraint, plus Russian acquiescence to coordinated Israeli air operations over Syria. “There is only one thing that isn’t clear [concerning this deal]”, a senior Israeli Defence official closest to Netanyahu, told Ben Caspit, “that is, who works for whom? Does Netanyahu work for Trump, or is President Trump at the service of Netanyahu ... From the outside … it looks like the two men are perfectly in sync. From the inside, this seems even more so: This kind of cooperation … sometimes makes it seem as if they are actually just one single, large office”.There has been, from the outset, a second level, too: This entire ‘inverted pyramid’ of Middle East engineering had, as its single point of departure, Mohammed bin Salman (MbS). It was Jared Kushner, the Washington Post reports, who “championed Mohammed as a reformer poised to usher the ultraconservative, oil-rich monarchy into modernity. Kushner privately argued for months, last year, that Mohammed would be key to crafting a Middle East peace plan, and that with the prince’s blessing, much of the Arab world would follow”. It was Kushner, the Post continued, “who pushed his father-in-law to make his first foreign trip as president to Riyadh, against objections from then-Secretary of State Rex Tillerson - and warnings from Defense Secretary Jim Mattis”. Well, now MbS has, in one form or another, been implicated in the Khashoggi murder. Bruce Riedel of Brookings, a longtime Saudi observer and former senior CIA & US defence official, notes, “for the first time in 50 years, the kingdom has become a force for instability” (rather than stability in the region), and suggests that there is an element of ‘buyer’s remorse’ now evident in parts of Washington.
'Treasurer' for 9/11 attackers returns to Morocco to 'hero's welcome' after release from prison - The man known as the ‘treasurer’ for the 9/11 terrorists has returned to his home country to a ‘hero’s welcome’, it has been reported. Mounir el-Motassadeq is one of only two men jailed over the 9/11 terror attacks and has served less than 15 years in prison.He was deported from Germany back to his home country of Morocco after being released early. According to the Daily Mail, el-Motassadeq is now living in his family home in a suburb of Marrakech with his wife and children and has been greeted by well-wishers since his return.The newspaper said people had described the ‘jubilant’ reaction of friends, family and neighbours when the 44-year-old returned, with people coming from all over Morocco to see him. El-Motassadeq, who was described during his trial as the ‘treasurer’ for the 9/11 hijackers, served less than 15 years in prison for his part in the attacks on the World Trade Center and Pentagon in September 2001.According to the Mail, El-Motassadeq grinned and said he was too busy to speak when the newspaper tracked him down in Marrakech, while his sister reportedly said ‘praise be to God’ when asked if she was happy about his release.
Saudis Launch Nuclear Research Reactor Amid Competition With Iran - Saudi Crown Prince Muhammad bin Salman has launched the kingdom's first nuclear research reactor as part of a plan to diversify the kingdom's energy mix and acquire nuclear capabilities, state media reported. The reactor launched on November 5 is among 16 that Saudi officials, citing archrival Iran's continued development of nuclear energy, have said they plan to build over the next two decades at a cost of $80 billion. While Riyadh insists its goal is to diversify away from oil and gas, the main drivers of the kingdom's economy, the nuclear plans have raised concerns in the West about the possibility of a nuclear race between the two Middle Eastern rivals. Like Iran, Riyadh insists its only goal is the development of peaceful nuclear technologies. But Prince Muhammad warned in March that if Iran develops a nuclear weapon, Riyadh will do so as well. Since that time, the United States has pulled out of Iran's 2015 nuclear agreement with world powers, while Iran has said it will continue to honor the accord as long as it continues to reap economic benefits from the lifting of international sanctions in exchange for curbs on its nuclear activities under the deal. But top Iranian officials also have threatened to quit the agreement if U.S. sanctions on Iran's economy, which went fully into effect on November 5, squelch the benefit of its trade with the rest of the world. Riyadh expressed deep reservations about the Iranian nuclear deal and applauded U.S. President Donald Trump's move to abandon it and reimpose sanctions on Iran. The U.S. sanctions are aimed at forcing Iran to renegotiate the nuclear deal and curb its involvement in the wars in Syria and Yemen, where Tehran and Riyadh support opposing sides in the conflict. The Saudi reactor project launched on November 5 was among seven projects officially started by the crown prince during a visit to Riyadh's King Abdulaziz City for Science and Technology, the official Saudi Press Agency reported.
Civilians Trapped as Saudi Airstrikes and Warships Pound Yemeni City of Hodeidah — Saudi airstrikes and warships continue to pound the Yemeni port city of Hodeidah on Monday, with escalating strikes coinciding with Saudi-backed ground forces advancing closer to the city, just three miles from the port itself, according to officials.This further limits the movement of aid into and out of the vital port, which before the Saudi offensive was the lone source of food imports for 80% of Yemen. Saudi forces control the supply lines, and promises of an aid corridor haven’t panned out so far.Heavy fighting and Saudi-led encroachment into the area, has aid groups warning that thousands of civilians left in Hodeidah are effectively trapped now. Everyone who lives between the airport and university is effectively trapped inside, and the fighting has almost reached the city’s main hospital, increasing the humanitarian crisis. The UN reiterated calls for urgent peace talks to prevent the fall of the city, and the famine threatening millions of lives expected to follow. The US called for an immediate ceasefire last week, and there is no sign the Saudi offensive is slowing down.
Battle rages in Yemen's vital port as showdown looms - Instead of bringing calm to the besieged Yemeni city, calls for a ceasefire in Hodeidah have brought some of the worst violence the vital port has yet faced in the three-year war. Baseem al-Janani, who lives in the city, said: “The clashes are absolutely crazy right now. I have a headache from the shelling and bombing in the east. People are trapped in their houses for hours at a time because of shrapnel and gunfire. But their houses are not safe either.” In the past few days, more than 100 airstrikes have hit civilian neighbourhoods – five times as many as in the whole of the first week of October, according to Save the Children staff in Hodeidah. One of their malnutrition clinics was attacked on Wednesday.Pro-government militias are trying to seize as much ground as possible before fighting is supposed to stop at the end of November, when it is hoped UN-sponsored peace talks will restart in Sweden. Saudi Arabia and United Arab Emirates coalition-backed troops are inching closer to the city’s Houthi rebel-held centre from their current stalemate positions in the southern suburbs and at the airport in a three-pronged attack. On Wednesday, an Emirati-trained group known as the Giants, with the help of Apache attack helicopters, secured a key road leading to Hodeidah’s port. The Houthis, too, have stepped up operations, resorting to burning tyres to obscure gunships’ view of the city and laying an estimated hundreds of thousands of landmines in anticipation of the coalition attack, codenamed Operation Golden Victory. On Tuesday, fighters raided the city’s May 22 hospital – named for Yemen’s national day – and set up sniper positions on the building’s roof, Janani said.“We don’t have enough hospitals anyway. The patients and staff are now terrified they will be an airstrike target,” he said. Hodeidah is Yemen’s lifeline. Before the war broke out in 2015, it handled most imports in a country where 90% of food had to be imported. The port has been blockaded by the Saudi-led coalition for the past three years, a decision aid organisations say has been the main contributing factor to the famine that threatens to engulf half of Yemen’s 28 million population.
Saudi Arabia Stealing Yemen's Oil in Collaboration with Total - "63% of Yemen's crude production is being stolen by Saudi Arabia in cooperation with Mansour Hadi, the fugitive Yemeni president, and his mercenaries," Mohammad Abdolrahman Sharafeddin told FNA on Tuesday. "Saudi Arabia has set up an oil base in collaboration with the French Total company in the Southern parts of Kharkhir region near the Saudi border province of Najran and is exploiting oil from the wells in the region," he added. Sharafeddin said that Riyadh is purchasing arms and weapons with the petro dollars stolen from the Yemeni people and supplies them to its mercenaries to kill the Yemenis. Late in last year, another economic expert said Washington and Riyadh had bribed the former Yemeni government to refrain from oil drilling and exploration activities, adding that Yemen has more oil reserves than the entire Persian Gulf region. "Saudi Arabia has signed a secret agreement with the US to prevent Yemen from utilizing its oil reserves over the past 30 years," Hassan Ali al-Sanaeri told FNA."The scientific research and assessments conducted by international drilling companies show that Yemen's oil reserves are more than the combined reserves of all the Persian Gulf states," he added. Al-Sanaeri added that Yemen has abundant oil reserves in Ma'rib, al-Jawf, Shabwah and Hadhramaut regions.
Iran's Powerful Hardline Cleric Threatens To Instantly Create $400 Oil By Seizing Tankers - Just ahead of U.S. sanctions on Iran set to snap back on Monday targeting primarily the energy, shipbuilding, shipping, and banking sectors, Iran's most prominent conservative cleric has announced that if oil exports are halted, Saudi tankers will be confiscated and Gulf countries attacked. Powerful Shia cleric Ayatollah Ahmad Alamolhoda is the Friday Prayer leader in Mashhad, considered Iran's spiritual capital and among the holiest places in Shia Islam, and sits on the government's "Assembly of Experts" but has no formal government role or decision-making ability. However, he's a powerful leader and chief spiritual force behind Iran's conservative faction who has long been at odds with President Hassan Rouhani. Iranian opposition sources report that Alamolhoda told his followers during his Friday prayer sermon: If we reach a point that our oil is not exported, the Strait of Hormuz will be mined. Saudi oil tankers will be seized and regional countries will be leveled with Iranian missiles. The cleric is further reported to have declared that Iran has the power to "instantly" create conditions for $400 a barrel oil prices if it decides to act in the Persian Gulf. He said as reported in regional opposition media: If Iran decides, a single drop of this region's oil will not be exported and in 90 minutes all Persian Gulf countries will be destroyed. The UAE and Saudi Arabia will be destroyed in 60 minutes. After 90 minutes the U.S. will have nothing in this country. And we haven't even started with Israel. Beware of the day we go after Israel, too. That's why they want us to round up our missiles.
Iran starts mass-producing locally designed Kowsar fighter jet - Iran has started mass-producing its locally designed Kowsar fighter plane, state television reported. "Soon the needed number of this plane will be produced and put at the service of the Air Force," Defence Minister Amir Hatami said on Saturday at a ceremony launching the plane's production, which was shown on television. Iran unveiled the Kowsar domestic fighter jet in August with President Hassan Rouhani saying Tehran's military strength was only designed to deter enemies and aimed at creating "lasting peace". State media said the new jet had "advanced avionics" and multipurpose radar, and it was "100-percent indigenously made" for the first time. Footage of the Kowsar's test flights was circulated by various official media. But live footage of the plane taxiing along a runway at the defence show was cut before it took off. Iran unveiled the jet at a defence show in the capital Tehran in August [Iranian Presidency/AFP] At its inauguration in August, Hatami said the aircraft programme was motivated by memories of air raids Iran suffered during its eight-year war with Iraq in the 1980s, and by repeated threats from Israel and the United States that "all options are on the table" in dealing with Iran. "We have learned in the [Iran-Iraq] war that we cannot rely on anyone but ourselves. Our resources are limited and we are committed to establishing security at a minimum cost," he said in a televised interview. The US has sold hundreds of millions of dollars of weapons to Iran's regional rivals, but has demanded that Tehran curb its defence programmes, and is in the process of reimposing crippling sanctions in a bid to force its capitulation.
Operation 'Enduring Defeat'? DoD Admits US May Need To "Stay In Iraq For Decades" -- Despite reports that the Islamic State terrorist group has lost 99 percent of its territory and shifted to insurgent tactics in Iraq and Syria, a recent report said an enduring defeatof the organization could take “years, if not decades.” This, according to Department of Defense information provided to investigators with the DoD Inspector General, is in large part due to what is still needed to make Iraqi security forces “self-reliant.”“Systemic weaknesses remain, many of which are the same deficiencies that enabled the rise of ISIS in 2014,” according to the quarterly IG report on Operation Inherent Resolve, the counter-ISIS operation that spans Iraq and Syria. Though top military officials recognized the gaps in capabilities among the Iraqi forces and that a “resurgence” of ISIS in the region is likely without sustained support and attention, congressional support for the fight against ISIS has decreased in the new fiscal year and an estimated $230 million in U.S. stabilization funds earmarked for Syria has been shifted to other countries. The quarterly report on OIR noted that while security in cities such as the capital Baghdad has improved to such a degree that security forces have removed about 300 police and security checkpoints and 1,000 barriers that divided and walled off the city. As violence in the cities has decreased, ISIS mass casualty attacks and killings have increased in the rural areas where ISF has less control. Ninety-two percent of the reported 285 violent attacks occurred in the crescent of provinces north of Baghdad, including Anbar, Ninewa, Salah ad Din, Kirkuk and Diyala. ISIS fighters have killed three to four tribal leaders and village elders per week over the past six months, according to reports. Iraqis still lack the ability to conduct basic intelligence gathering and have no qualified drone pilots, instead relying almost entirely on coalition forces to gather, analyze and disseminate intelligence. “In effect, this means that the Iraqi senior leadership is dependent on the Coalition for information about their own military’s operations,” according to the report. “This strategy risks an enduring coalition presence in Iraq for years to come.”
US 'war on terror' has killed over half a million people- study - Hundreds of thousands of people in Afghanistan, Iraq and Pakistan have been killed due to the so-called "war on terror" launched by the United States in the wake of the September 11, 2001 attack, according to a new study.The report, which was published on Saturday by the Brown University's Watson Institute for International and Public Affairs, put the death toll between 480,000 and 507,000.The toll includes civilians, armed fighters, local police and security forces, as well as US and allied troops.The report states that between 182,272 and 204,575 civilians have been killed in Iraq; 38,480 in Afghanistan; and 23,372 in Pakistan. Nearly 7,000 US troops were killed in Iraq and Afghanistan in the same period. IThe paper, however, acknowledged that the number of people killed is an "undercount" due to limitations in reporting and "great uncertainty in any count of killing in war". "We may never know the total direct death toll in these wars," wrote Nera Crawford, the author of the report titled "Human Cost of the Post-9/11 Wars: Lethality and the Need for Transparency". "For example, tens of thousands of civilians may have died in retaking Mosul and other cities from ISIS [also known as ISIL] but their bodies have likely not been recovered."
In Shocking Interview, Top Commander Admits US Cannot Win War in Afghanistan— Historians of the now seventeen-year old U.S. war in Afghanistan will take note of this past week when the newly-appointed American general in charge of US and NATO operations in the country made a bombshell, historic admission. He conceded that the United States cannot win in Afghanistan.Speaking to NBC News last week, Gen. Austin Scott Miller made his first public statements after taking charge of American operations, and shocked with his frank assessment that that the Afghan war cannot be won militarily and peace will only be achieved through direct engagement and negotiations with the Taliban — the very ‘terror’ group which US forces sought to defeat when it first invaded in 2001.“This is not going to be won militarily,” Gen. Miller said. “This is going to a political solution.”Miller explained to NBC: My assessment is the Taliban also realizes they cannot win militarily. So if you realize you can’t win militarily at some point, fighting is just, people start asking why. So you do not necessarily wait us out, but I think now is the time to start working through the political piece of this conflict. He gave the interview from the Resolute Support headquarters building in Kabul. “We are more in an offensive mindset and don’t wait for the Taliban to come and hit [us],” he said. “So that was an adjustment that we made early on. We needed to because of the amount of casualties that were being absorbed.” Starting last summer it was revealed that US State Department officials began meeting with Taliban leaders in Qatar to discuss local and regional ceasefires and an end to the war. It was reported at the time that the request of the Taliban, the US-backed Afghan government was not invited; however, there doesn’t appear to have been any significant fruit out of the talks as the Taliban now controls more territory than ever before in recent years. Such controversial and shaky negotiations come as in total the United States has spent well over $840 billion fighting the Taliban insurgency while also paying for relief and reconstruction in a seventeen-year long war that has become more expensive, in current dollars, than the Marshall Plan, which was the reconstruction effort to rebuild Europe after World War II.
White Phosphorus - America's Weapon of Choice? -- Since the beginning of the Syrian civil war in 2011, Washington has made it its aim to vilify the Assad government by repeatedly informing the world that the pro-regime side in this conflict has used chemical weapons against its own civilian population. Recent news from Syria would suggest that the United States has behaved in a manner that flaunts international conventions with the use of certain banned weapons.According to the Syrian Arab News Agency or SANA, we find this recent news: While you might say or think that this is just pro-Assad propaganda, in fact, it is little different than the American allegations that the Assad government is using chemical weapons.This news was followed by this update in which Russia has requested an investigation into the use of internationally banned weapons: According to Protocol III of the Convention on the Prohibition or Restrictions on the Use of Certain Conventional Weapons Which May be Deemed to be Excessively Injurious or That Have Indiscriminate Effects better known as the Convention on Certain Weapons (CCW), the use of white phosphorus is banned as part of the ban on incendiary weapons against either permanent or temporary civilian population concentrations: Incendiary weapons are defined as any weapon or munition which is primarily designed to set fire to objects or to cause burn injuries to persons.There are 125 high contracting parties to the entire Convention on Certain Weapons with an additional four signatories. The aforementioned Protocol III has 115 high contracting parties with the following nations that are part of the 125 high contracting parties not contracting under Protocol III: Burundi, Cameroon, Cote D'Ivoire, Dominican Republic, Israel, Monaco, Morocco, the Republic of Korea, Turkey and Turkmenistan. According to the Federation of American Scientists Fact Sheet on white phosphorus, we find the following: Not only do U.S. forces use white phosphorus, according to research by several human rights organizations, Israel (a non-signatory to Protocol III) appears to have used white phosphorus in Operation Cast Lead against densely populated regions of Gaza between December 2008 and January 2009.
Israel to demolish Palestinian homes, school in West Bank - Israeli occupation authorities distributed demolition orders for Palestinian homes and a primary school in the village of Musafer Yatta to the south of the occupied West Bank city of Hebron, Quds Press reported yesterday.National Committee to Resist the Wall and Settlements in southern Hebron, Ratib Al-Jbour, told Quds Press that the Israeli occupation forces handed the demolition and stop-work orders to the Palestinians in the areas of Al-Mafqara, Saroura and Khelet Al-Dabee in Musafer Yatta.Al-Jbour said that the Israeli occupation authorities planned to demolish the Palestinian facilities under claims that they were built without the necessary licenses. He also said that the Israeli occupation also included Khelet Al-Dabee Primary School, which was inaugurated two weeks ago, in the demolitions.The Palestinian activist also noted that Israeli occupation forces fixed the school’s demolition order at a wall after the headmaster and teachers refused to accept it. Palestinians have one week to empty their properties, Al-Jbour said.However, this is only half of the story, as violent Jewish settlers are always on the lookout for Palestinian kids. These settlers, who “also set up their own checkpoints”, engage in regular violence as well, by “throwing stones” at children, or “physically pushing (Palestinian children) around.” “UNICEF’s protective presence teams have reported that their volunteers have been subjected to physical attacks, harassment, arrest and detention, and death threats,” according to the same UN report.
‘A cruel choice’- Why Israel targets Palestinian schools - Several Palestinian students, along with teachers and officials, were wounded in the Israeli army attack on a school south of Nablus in the West Bank on 15 October. The students of Al- Sawiya Al-Lebban Mixed School were challenging an Israeli military order to shut down their school based on the ever-versatile accusation of the school being a “site of popular terror and rioting”.“Popular terror” is an Israeli army code for protests. The students, of course, have every right to protest, not just the Israeli military occupation but also the encroaching colonisation of the settlements of Alie and Ma’ale Levona. These two illegal Jewish settlements have unlawfully confiscated thousands of dunams of land belonging to the villages of As-Sawiya and Al-Lebban.“The Israeli citizens” that the occupation army is set to protect by shutting down the school, are, in fact, the very armed Jewish settlers who have been terrorising this West Bank region for years. According to a 2016 study commissioned by the United Nations, at least 2,500 Palestinian students from 35 West Bank communities must cross through Israeli military checkpoints to reach their schools every day. About half of these students have reported army harassment and violence for merely attempting to get to their classes or back home.
Watch the Leaked Documentary the Israel Lobby Didn’t Want You to See — A leaked Al Jazeera documentary detailing the tactics of the Israeli lobby in the United States and elsewhere has revealed that pro-Israel groups regularly invented smears, including false accusations of sexual assault, to discredit professors and students on U.S. university campuses that support equal rights for Palestinians and the Boycott, Divest and Sanctions (BDS) movement. BDS is a non-violent movement that seeks to use economic pressure on Israel’s government so that it complies with international law, ends the military occupation of the West Bank, and halts the decades-long blockade of the Gaza Strip. In the third episode of the Al Jazeera documentary “The Lobby”, which was leaked online by the website Electronic Intifada, focus is given to the efforts of pro-Israel advocacy groups on U.S. universities, particularly the efforts of these groups to use aggressive information warfare tactics to discredit and smear activists. The documentary further reveals that these smear campaigns are incredibly well-funded – to the tune of millions of dollars – and involve coordination with the Israeli government’s Ministry of Strategic Affairs. In one instance, Bill Mullen – a professor of American Studies at Purdue University and a well-known supporter of Palestinian rights and BDS – was accused of sexual harassment, supporting terrorism and other misdeeds by nearly two dozen anonymous web pages purporting to have been created by Mullen’s former students in 2016. Mullen told Al Jazeera that within 48 hours of learning of the smear sites, he discovered that they had been created within moments of each other and appeared to be operated by the same individual or group. After the websites used the name of his daughter and were anonymously sent to his wife, Mullen told Al Jazeera that “these people will do anything, they’re capable of doing anything” to discredit pro-Palestinian solidarity activists. The documentary further revealed that this tactic is promoted by pro-Israel campus organizations including the Israel on Campus Coalition (ICC). For instance, ICC executive director Jacob Baime discussed how “the anti-Israel people” are targeted by groups like the ICC who put “up some anonymous websites” and targeted Facebook ads that make false sexual harassment claims and other personal attacks as part of an effort to discredit them and their activism.
US, Turkey risk direct military clash as they escalate war in Syria - As it pursues its war with US-backed Kurdish-nationalist organizations, the Turkish government is threatening an outright military occupation of large parts of Syria that could provoke war with Syria and a direct clash with US forces. On Tuesday, Turkish President Recep Tayyip Erdogan denounced joint patrols by US forces and Kurdish-led militias as “unacceptable.” Speaking to reporters in Ankara, he said: “Not only can we not accept (the joint patrols), such a development will cause serious problems at the border.” This came after Turkey shelled positions of the US-backed Syrian Democratic Forces (SDF) in the Zor Magar region east of the Euphrates River and the town of Tal Abyad starting on October 28, killing at least 10 Kurdish fighters. Two days earlier, Erdogan had delivered a “final warning” to Syrian Kurdish fighters to retreat. He also warned that Turkey’s next target would be positions of the People’s Protection Units (YPG, a Kurdish force that is the key component of the SDF) east of the Euphrates. On October 30, as shelling continued, Erdogan stepped up threats to invade Syria to attack the US-backed Kurdish forces: “We are going to destroy the terrorist organization… preparations and plans have been completed. We’ve made our plans and programs, and initiated it in the previous days. We will come down on the terrorist organization’s neck with more extensive, effective operations. We could arrive suddenly one night.” This provoked an angry warning from Washington on October 31. State Department deputy spokesman Robert Palladino said: “Unilateral military strikes into northwest Syria by any party, particularly as American personnel may be present or in the vicinity, are of great concern to us … Coordination and consultation between the United States and Turkey on issues of security concern is a better approach.” Ankara, however, is determined to crush the YPG, which it views as an affiliate of the Kurdistan Workers’ Party (PKK), the Turkish Kurdish separatist movement against which it has waged a bloody counter insurgency campaign for more than 30 years. Ankara also fears Kurdish autonomy in Syria, worried it will provoke demands for Kurdish autonomy in eastern Turkey.
Turkey Vows To Make Sea Bandits Drilling Gas Off Cyprus Pay Like Terrorists In Syria Did - Ankara will not allow any “sea bandits” to roam free and tap the disputed natural gas reserves off Cyprus, Turkey’s president has vowed, while commissioning a new warship to challenge competitors militarily, should the need arise.“We will not accept attempts to seize natural resources in the Eastern Mediterranean through the exclusion of Turkey and the Turkish Republic of Northern Cyprus (TRNC),” Erdogan said Sunday, according to Daily Sabah. While claiming that Turkey has no ambitions to annex any “territories,” Ankara promised to protect “the rights of our country and of our brothers."Those who thought that they could take steps in the Eastern Mediterranean or the Aegean despite [this] have begun to understand the magnitude of their mistake. We will not allow bandits in the seas to roam free just like we made the terrorists in Syria pay,” Erdogan said at a ceremony transferring the TCG Burgazada corvette to the Turkish Navy.The exploration of hydrocarbon resources off the coast of the Republic of Cyprus has become a sensitive issue for the international community, ever since the first gas deposit discoveries were made off the coast in 2011. While the Republic of Cyprus belongs to the EU community and is recognized by the UN, TRNC, the northern third of the island, has been occupied by Turkey since 1974. As a result, Ankara continues to claim jurisdiction for offshore research in the East Mediterranean, an area thought to be rich with natural resources. The region has recently witnessed an escalation in tensions, after the Turkish Navy intercepted a Greek frigate which tried to interfere with a Turkish research vessel’s seabed exploration on October 18. The incident prompted a diplomatic row with Greece, which traditionally supports the ethnically Greek government of the Republic of Cyprus. While Greece denied interfering with the Turkish research vessel, Ankara has cautioned its neighbor and longtime opponent not to stir trouble in the region.
China October crude imports rise to all-time high on record teapot buying (Reuters) - China’s crude oil imports rose to all-time high on a daily basis in October, supported by record demand from private refiners and healthy margins, customs data showed Thursday. Imports in October surged 32 percent from a year earlier to 40.80 million tonnes, or 9.61 million barrels per day (bpd), data from the General Administration of Customs showed, climbing from 9.05 million bpd in September. The previous daily record of 9.60 million bpd was touched in April 2018. The imports rose 8.1 percent for the first 10 months of the year from the same period last year to 377.16 million tonnes, or 9.06 million bpd, on track for another record year of shipments. The record volumes were a result of strong imports from China’s private refiners, often known as “teapots”. These oil processors bought 8.22 million tonnes of crude during the month, the highest monthly amount ever since Beijing began issuing import quotas to them in 2015, according to Emma Li, an analyst with Refinitiv Oil Research and Forecasts. “Independents bought record amounts of crude in October as they ramped up utilization rates to meet pent-up demand for gasoline and diesel,” Li said. “Many teapots also started stockpiling for January and February next year in a rush to use up their quota this year.” China’s overall import volumes for October were in line with Refinitiv Oil Forecast’s expectations of 40.95 million tonnes. The imports might have been higher except CNOOC Ltd’s Huizhou oil plant started a two-month long turnaround in October, curbing purchases from one of China’s largest refineries. Total natural gas imports in October via both pipeline and as liquefied natural gas (LNG) were at 7.3 million tonnes, up 25.6 percent from the same month last year, but easing from 7.62 million tonnes in September.
The Clock Is Ticking For China's Oil Independence - China is pulling out all stops in order to increase its oil and gas production, but at the end of the day it will likely not be enough to stop the world’s second largest economy from becoming over reliant on geopolitically charged crude oil and natural gas imports. On Monday, state-run Chinese oil majors CNPC and Sinopec, also Asia’s largest refinery, said they were speeding up drilling and exploration from major tight oil and shale gas formations in the country’s western regions. CNPC also said that new exploration in shale gas, tight oil and tight gas will lead to growth in production for the country’s largest oil and gas producer.The company added that the drilling cycle at the Mahu field in Xinjiang, one of CNPC’s largest findings in recent years, fell around 40 percent the previous year. A Reuters report said this implies that oil wells are being completed and produced at a faster rate. China’s ambitions to develop more of its own oil and gas reserves is a race against a ticking clock. The middle kingdom has already bypassed the U.S. to become the world’s top oil importer, with much of those oil imports having geopolitical strings attached. China is the largest importer of Iranian oil, and that resource is being jeopardized by fresh U.S. sanctions against Iran’s oil sector that went onto effect on November 5. China is also reliant on both Russia and Saudi Arabian crude and just recently pared back crude imports from the U.S. amid ongoing trade tensions between Washington and Beijing. China’s dilemma in its gas sector is just as perplexing. The country bypassed South Korea late last year to become the world’s second largest liquefied natural gas (LNG) importer, with projection that it will even pass Japan as the top LNG importer at the beginning to mid part of the next decade, a development unimaginable just two years ago. China's insatiable gas demand comes as the government mandates that gas, amid record air pollution levels, particularly in its major urban centers, make up at least 10 percent of its energy mix needed for power generation by 2020, with more earmarks set for 2030. Yet, China's growing oil dependency will create the most problems for Beijing as it is forced to continue to rely on the U.S. to safeguard global shipping lanes. What China needs to offset both its growing oil and gas dependency is more domestic production, but therein lies the problem. China's oil fields are maturing and it’s unlikely that significant discoveries can be found to replace depletion reserves. Around five or six years ago, Beijing pegged its hope on emulating the US shale oil and gas success story, even cutting deals with American firms to help develop China's shell formations. However, unlike most US shale formations, China's are in difficult reach, rugged terrain, indicating that shale oil and gas will not offer the solution that Beijing energy planners needs, at least in the foreseeable future.
Trade union congress opens amid widespread labour unrest in China - The All-China Federation of Trade Unions’ (ACFTU) showcase event, its five-yearly National Congress, got underway in Beijing this morning.The week-long meeting of the 17th ACFTU National Congress is expected to be a largely ceremonial and self-congratulatory affair that once again demonstrates the union’s loyalty to the Communist Party and General Secretary Xi Jinping.However, this high-profile gathering should in fact be focusing on the real problems that face China’s workers on a day-to-day basis, and the obvious short-comings the union has so far exhibited in dealing with them. The widespread collective protests by workers across the whole of China clearly highlight the ACFTU’s deficiencies in representing workers, protecting their rights and interests, and in resolving labour conflicts.China Labour Bulletin’s Strike Map recorded 1,332 strikes and collective protests by workers in the first nine months of the year, the vast majority of which were the result of employers’ flagrant violation of workers’ rights, such as the failure to pay wages, social insurance contributions or compensation to laid-off workers. Demands for wage arrears occurred in 1,075 of the cases recorded on the map, or 80.7 percent of the total. The problem was particularly severe in the construction industry, which accounted for nearly half of all the collective protests in the first nine months, but was also apparent in manufacturing, as factories closed down or relocated, as well as in service industries, as new businesses folded under the intense pressure of market competition.
UK To Sell China Unlimited Military Technology, Radar Equipment - An unnamed UK defense company has been granted a license to supply an unlimited quantity of goods to China's military, "including airborne radar technology likely to be used by the PLA Air Force," reports Stephen Chen of SCMP. The contract governed by an "open individual export license (OIEL)" has been active since April, two months after Prime Minister Theresa May visited Beijing, as made public by Britain's Department for International Trade. Unlike previous deals involving British arms sales to China, which were capped by amount and value, under the new agreement the supplier can “export an unlimited quantity of goods”, including equipment, components, software and technology for military radar systems, the department said. Its strategic export control database described the equipment covered by the licence as “target acquisition, weapon control and countermeasure systems” for “aircraft, helicopters and drones”. –SCMP "It’s potentially a big license, and it does say the end user is the air force," said London-based NGO Campaign Against Arms Trade spokesman, Andrew Smith, who added that while the open individual export licenses are typically valid for between five and ten years, "the values are never published, so the figure could be very high." Smith also notes that it's not just the UK selling military equipment to China - and that "almost all the other big arms exporters do exactly the same."
Xi Tells China's Critics To "Mind Your Own Business" In Trade Expo Speech; Pledges $30 Trillion In Imports - "Worry about your own damn self (Mr. Trump)." That was the overriding message delivered by Chinese President Xi Jingping during his address at the International Import Expo Opening Ceremony in Shanghai on Monday, which featured more than 3,600 companies from 172 countries, regions and organizations, and where Xi urged critics of China's policies to worry about their own problems before opining on China's, according to the FT. "Each country should work hard to improve its own business environment. One cannot always beautify oneself while criticising others, and one can’t shine a flashlight on other people without looking at oneself," said Mr Xi.That said, Xi stopped short of naming Trump or the U.S. in the speech, his most high-profile economic address since April. Instead, and without a trace of irony, he stepped up warnings that protectionism would harm global growth while pledging to boost domestic consumption, strengthen intellectual property protection and advance trade talks with Europe, Japan and South Korea. If there was a dominant theme from the expo - which is being held as China's trade surplus with the US has continued to expand in spite of US tariffs on roughly half of Chinese goods crossing its borders - it was China's attempts to position itself as the leader of a bloc of emerging-market nations, as the US and many of its allies declined to send government delegations (though, to be sure, representatives of many of the largest US corporations did attend). All told, 18 heads of state were expected to attend the summit. The Chinese government declared Monday and Tuesday holidays in Shanghai to ameliorate traffic for the event, which Xi has said will be held annually from here on out.
Is Xi Jinping finally walking the talk on opening up China’s economy as the trade war heats up? As most Americans – and many others worldwide – wallowed in midterm election introspection this week, China began its long march to win the hearts and minds of the world’s traders, to put some substance behind two years of mainly rhetorical commitment to globalisation and mainland market liberalisation. There is a certain elegant symmetry to starting the week with the massively hyped China International Import Expo in Shanghai, with tens of thousands of buyers from across the country flocking to purchase imported goods, and finishing the week with Alibaba’s Singles’ Day orgy of domestic consumer spending. As the US-China trade war deepens, it is the right time to remind the world of the importance of China’s increasingly affluent consumer market and of the policy shift away from export-reliance and towards a heavier focus on the domestic consumer market. After the import expo, Chinese President Xi Jinping will move on to win friends at the Association of Southeast Asian Nation summit in Singapore, where there are still faint hopes of finalising negotiations on the Regional Comprehensive Economic Partnership. He will then go on to Port Moresby for the Asia-Pacific Economic Cooperation leaders’ gathering – the second opportunity in three weeks to talk trade liberalisation with Japan’s Shinzo Abe and other members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. No effort is being spared to reinforce China’s message that it stands fully behind liberalising its economy, opening it further to international competition and using multilateral deals to do it. As Donald Trump waits for his dinner date with Xi at the G20 meeting in Buenos Aires at the end of the month, the US preference for bilateral deal-making is being firmly snubbed, despite hints from Trump to the contrary.If China is to rebuff Trump’s trade war, it is by now clear that the battle will be a long one, and must involve China being more successful in winning over other significant trading partners to trust the market-opening rhetoric that Xi has maintained over the past two years – from Davos in January last year, through the Boao Forum in Hainan last April, and now at the Shanghai expo.
Chinese-style ‘digital authoritarianism’ grows globally: study (AFP) - Governments worldwide are stepping up use of online tools, in many cases inspired by China's model, to suppress dissent and tighten their grip on power, a human rights watchdog study found Thursday.The annual Freedom House study of 65 countries found global internet freedom declined for the eighth consecutive year in 2018, amid a rise in what the group called "digital authoritarianism."The Freedom on the Net 2018 report found online propaganda and disinformation have increasingly "poisoned" the digital space, while the unbridled collection of personal data is infringing on privacy."Democracies are struggling in the digital age, while China is exporting its model of censorship and surveillance to control information both inside and outside its borders," said Michael Abramowitz, president of Freedom House. "This pattern poses a threat to the open internet and endangers prospects for greater democracy worldwide." Chinese officials have held sessions on controlling information with 36 of the 65 countries assessed, and provided telecom and surveillance equipment to a number of foreign governments, Freedom House said.
China's Middle Class Is Again Desperate To Move Its Money Out Of The Country -- The Chinese middle class is again taking substantial risks to move their money out of China. As a result, Chinese investors are blowing up foreign real estate markets while risking getting ripped off at the same time. The South China Morning Post recently highlighted one such example, profiling several Chinese citizens who purchased property in Australia to safeguard their wealth, only to see the well-known Australia-based property agent suddenly shutter its doors in August, leaving behind about $50 million in missing deposits and failed settlements.This kind of "unexpected" event is just one example of the risks that Chinese mainlanders face while trying to protect themselves by moving assets overseas, especially in light of Beijing's strict capital controls on outbound capital. Many Chinese citizens even seek out citizenship or visas in nearby friendly foreign countries to diversify away from investment options at home.And in China, this isn't just some basic diversification strategy like it is elsewhere around the globe. Instead, it is a direct response to growing fear that the Chinese quality of life is deteriorating. It's also a result of growing frustration that there are so few opportunities to invest at home. And the government isn’t making it easy: China severely restricts capital flows out of its country, stating that it wants the cash to stay domestic for productivity and development purposes.It also means that those who accrued their wealth through the country’s real estate "boom" really don’t have a way to feel financially secure, as their proceeds must stay within the country, subject to several additional growing bubbles inevitably waiting to pop in China. And it isn’t just for economic reasons - Chinese citizens are also starting to look abroad as a result of the country's authoritarian political climate, heavy pollution and national food safety and vaccine scandals.
How China’s ambitious plan to tax global income faces opposition in US, Hong Kong and even Beijing China is facing great pressure to tone down its ambitious plan to tax the worldwide income of those who stay in the mainland for over 183 days, following opposition from a government department in charge of attracting overseas talent to Hong Kong, as well as hurdles to obtain information about its residents’ assets in the United States. Various parties and authorities are seeking exemptions to the planned taxation, which relies on a financial information exchange mechanism – the Common Reporting System (CRS) – which China adopted last year. The unexpected opposition from home and abroad has left the tax authorities facing an embarrassing climbdown. Having last year adopted CRS and finished due diligence on resident and non-resident taxpayers’ financial information, China began its first sharing of their financial information with over 100 countries under CRS in September, which was widely believed to be leading to taxing people’s global income and assets in the near future. Why China’s high-income earners dread the new tax law that will come into effect in January In its new individual income tax law, which will take effect from January 1, China for the first time introduced anti-tax avoidance provisions, empowering tax authorities to tax people who transfer assets to evade tax or who take advantage of havens to avoid tax. It is likely that China will remove the article allowing foreigners who spend a cumulative 90 days out of China in a year to be recognised as non-tax resident, according to a draft regulation on implementation of the individual income tax law that has been out for consultation.
China’s brightest children are being recruited to develop AI ‘killer bots’ A group of some of China’s smartest students have been recruited straight from high school to begin training as the world’s youngest AI weapons scientists. The 27 boys and four girls, all aged 18 and under, were selected for the four-year “experimental programme for intelligent weapons systems” at the Beijing Institute of Technology (BIT) from more than 5,000 candidates, the school said on its website. The BIT is one of the country’s top weapons research institutes, and the launch of the new programme is evidence of the weight it places on the development of AI technology for military use. China is in competition with the United States and other nations in the race to develop deadly AI applications – from nuclear submarines with self-learning chips to microscopic robots that can crawl into human blood vessels. “These kids are all exceptionally bright, but being bright is not enough,” said a BIT professor who was involved in the screening process but asked not to be named because of the sensitivity of the subject. “We are looking for other qualities such as creative thinking, willingness to fight, a persistence when facing challenges,” he said. “A passion for developing new weapons is a must … and they must also be patriots.”
Xi to face world tired of empty promises at big China trade fair -- After Donald Trump won the U.S. presidency with a pledge to put “America First,” Chinese counterpart Xi Jinping quickly moved to present himself as a champion of globalization. Nearly two years later, Xi is locked in a trade war with Trump and hasn’t succeeded in persuading the world that he’s serious about opening the economy quickly. The China International Import Expo in Shanghai, a Xi brainchild set to open Monday with some 3,000 companies from more than 100 countries, gives him another chance to finally win over his skeptics. Enthusiasm hasn’t been high in the run-up to the event. While 18 heads of state or government are slated to attend, virtually all are from small economies. Of G-20 countries, only Russia is sending a head of state or government. There’s also a notable dearth of top business chiefs. Although the event is meant to gather foreign companies to woo the Chinese consumer, global brands from Adidas to Walmart, Procter & Gamble to Uniqlo, are sending only country heads -- or no senior executives at all. Starbucks Corp. CEO Kevin Johnson, whose company opens a store in China every 15 hours, won’t be attending even though he’ll be in the same city. China is under pressure from Trump and elsewhere to wind back its $423 billion goods trade surplus with the world, and Xi has already pledged that the country will import $24 trillion dollars of goods from abroad over the next decade and a half. While Trump has floated the possibility of a deal when he meets Xi in the coming weeks, they remain far apart on market access and government support for state-run enterprises.
Chinese state enterprises undertake over 3100 Belt and Road projects - Chinese state-owned enterprises controlled by the central government have in the past five years carried out a total of 3,116 investment projects in countries covered by the Belt and Road initiative, according to figures released on Tuesday. The central SOEs account for half of infrastructure projects and more than 70 percent of the combined value of contracts launched under the initiative, Weng Jieming, deputy head of the State-owned Assets Supervision and Administration Commission (SASAC) told a press briefing in Beijing. The Belt and Road initiative was launched by Chinese President Xi Jinping in 2013 to boost the country’s trade and infrastructure links with more than 80 countries in Asia, Europe, Africa and South America. Wang said that the nearly one hundred central SOEs, which include companies like China National Nuclear Corporation, State Grid Corporation and China Communications Construction Company, had comparative advantage in building infrastructure such as ports, railways, highways and communication networks. The central SOEs have carried out more than 60 oil and gas projects in over 20 countries, he said according to China Securities Journal, while listing the Greek port of Piraeus owned and operated by COSCO, as well as Chinese-built railways Kenya and Ethiopia, as examples of successful logistics and transport projects. Stressing that a responsible and good image has become important for promoting the Belt and Road initiative, Wang said the SOEs had played a positive role in improving local people’s livelihood. “Around 85 percent of the employees at the central state-owned enterprises’ overseas branches are local people,” he said. The SOEs would strengthen cooperation with private Chinese companies, local firms in Belt and Road countries and multinational corporations to better protect against risks, he said. The state-owned enterprises under China’s central government had almost 10,800 overseas companies in 185 countries and regions at the end of last year, with total overseas assets exceeding 7 trillion yuan (US$1tr) and their combined annual profits at 106.4bn yuan (US$15.3bn), according to Xinhua.
Australia trade minister to visit China in sign of thaw - (Reuters) - Australia's trade minister will travel to China on Sunday, in a sign that political tensions between the two countries may be easing. Simon Birmingham, the first senior Australian government official to visit China in a year, will attend the China International Import Expo, or CIEE, seen as an attempt by Beijing to allay foreign concern about its trade practices. Relations between Australia and the world's no.2 economy have been at low ebb over accusations of China's influence in Australia's media, universities and politics and its use of loans to build leverage over poorer South Pacific island nations. In August, Australia banned Huawei Technologies Co Ltd from supplying equipment for a 5G mobile network citing national security risks, a move the Chinese telecoms gear maker criticised as being "politically motivated". China, however, remains Australia's top goods and services trading partner, accounting for 24 percent, or A$183.4 billion ($132.01 billion), of total trade in 2017, according to data from the Department of Foreign Affairs and Trade. Birmingham said in a statement on Saturday that Australia's "high-level" delegation, which includes representation from state and territory governments, "reflects our ongoing commitment to our relationship with China". The minister's press office would not immediately comment on whether Birmingham would meet with any senior Chinese officials on his trip to Shanghai.
Flashpoint For War - U.S. And Japan Plan Military Response To Chinese Incursions Of Disputed Is - Things are again rapidly heating up in the East China Sea amidst already heightened tensions in a region where Washington is increasingly asserting the right of navigation in international waters against broad Chinese claims and seeking to defend the territorial possessions of its allies. According to a bombshell new Reuters report the tiny and rocky Senkaku Islands which lie between northern Taiwan and the Japanese home islands are "rapidly turning into a flashpoint for war". Alarmingly, Japanese government sources have been quoted as saying Tokyo and the United States are drawing up an operations plan for an allied military response to Chinese threats to the disputed Senkaku Islands. From nearly the start of his entering the White House, President Trump has said he's committed to upholding Article 5 of the US-Japan security treaty signed the post-war years of the mid-20th century: “We are committed to the security of Japan and all areas under its administrative control and to further strengthening our very crucial alliance,” Trump had promised from the first official reception of Japanese Prime Minister Shinzo Abe back in February 2017, and since consistently maintained. Japanese government sources have told regional media that the joint plan of response with the United States involves "how to respond in the event of an emergency on or around the uninhabited islands in the East China Sea" — which is set to be completed by next march, according to the statements. Beijing claims the islands as part of its historical inheritance — as it does neighbouring Taiwan, despite failing to seize the protectorate during the Chinese Civil War.Taiwan, however, was a Japanese protectorate before World War II.It’s a messy historical scenario, thought resolved through United Nations conventions and treaties established after the conflict. — Reuters/news.com.au The Japan Times reports that “The plan being drawn up assumes such emergencies as armed Chinese fishermen landing on the islands, and Japan’s Self-Defense Forces needing to be mobilized after the situation exceeds the capacity of the police to respond.”
Japanese Machine Orders Crash Most On Record As BoJ Member Admits Can't Solve Structural Problem - Just two days ago we exposed the abject failure of Abenomics as even allowing for distortions from the natural disasters which hit Japan, the machinery orders data will only embolden the BOJ to stay the course. September Japanese Core Machine Orders crashed 18.3% MoM (more than double the 9% drop expected and considerably worse than the impact of the tsunami). That is the greatest monthly collapse in orders ever and led to machine orders collapsing 7% YoY (when expectations were for a 7.7% rise YoY)... Worse still, historically, core machine orders are an early indicator of future capital spending, and exclude volatile orders for ships and orders from electrical power companies'It comes on the back of the negative print for real cash earnings and the slide in household spending earlier this week. And all this before the sales-tax hike planned for next year.The utterly dismal data adds to signs that gross domestic product may have contracted slightly in the third quarter... And just in case you're holding your breath for some "terrible news is great news" reaction from The Bank of Japan's inglorious bag of tricks - "Wasurete kudasai"...As one member of BoJ sheepishly admitted tonight: "Monetary policy can't solve structural problems." I bet the gravely indebted, aging population of Japan wishes he figured that out about 20 or 30 years ago!! Persistent easing is not going away... and if we were betting people, we'd suspect 'helicopter money' is coming, after another BoJ member proclaimed: "closer policy coordination with the government seems needed."
Russia Hosts Taliban And Afghan Officials For Peace Talks; U.S. Diplomat In Attendance - On Friday talks opened between the Afghan government and the Taliban in Moscow, in an unprecedented moment where both sides have come together for formal face-to-face talks hosted by the Russian government. Following a press conference wherein Russian Foreign Minister Sergey Lavrov urged "I am counting on you holding a serious and constructive conversation that will justify the hopes of the Afghan people," the talks commenced behind closed doors. This is Moscow's first successful attempt to get all sides at the same table as a prior summit was deemed a failure when Afghan government authorities refused to attend. And while Kabul high officials are nowhere present for this week's talks, members of the government-appointed Peace Council are attending the event. Notably, among the dozen nations to send envoys to the event is the United States; however, the US has merely sent a diplomat from the American Embassy in Moscow as an observer. This comes at a sensitive time for the United States and NATO mission in Afghanistan as according to the New York Times starting in 2017 the Taliban regained control of more Afghan territory than at any time since the 2001 American invasion. While the Kabul government has control over 65% of the population it remains that only 55% of Afghanistan's 407 districts remain under the government, with the rest largely under Taliban control or influence. Speaking to reporters, FM Lavrov said further that Russia hopes "through joint efforts to open a new page in the history of Afghanistan." He especially played up the threat of ISIS expansion into Afghanistan, saying that through foreign sponsors the terror group is trying to "turn Afghanistan into a springboard for its expansion in Central Asia".
‘No Decision Yet’ From India on Russia’s Invitation for Talks With Afghanistan, Taliban India is yet to take a decision on attending Russia’s second attempt to bring the Taliban and Afghanistan government on the same table to work towards a peace settlement.The Russian foreign ministry announced that the second meeting of the ‘Moscow format’ talks on Afghanistan will be held next Friday (November 9).“The President of the Islamic Republic of Afghanistan, A Ghani, has decided to send a delegation of the High Peace Council of this country to the meeting. For the first time, a delegation of the Political Office of the Taliban Movement in Doha will participate in an international meeting of this level,” said the press release issued in Moscow on Saturday (November 3).It added that invitations were sent to Afghanistan, India, Iran, Kazakhstan, Kyrgyzstan, China, Pakistan, Tajikistan, Turkmenistan, Uzbekistan and the United States.This is Moscow’s second effort to hold the regional forum with the Taliban in tow.This August, Russia had declared that it will host the second round of the 11-party regional mechanism with Afghanistan, with the Taliban’s participation, on September 4. The press release had also said that the meeting would be co-chaired with Afghanistan. The United States was the first to refuse the invitation, stating that the meeting was “unlikely to yield any progress” towards a settlement.
Imran Khan returns empty-handed from China: Xi Jinping forced to extend minimal aid to ally amid US trade war Imran Khan is back from his first official visit to China. Imran's nervousness was apparent in his first interview to the Chinese media in which he repeated himself several times over, and he certainly did not come across as the head of a sovereign state. For a person of Imran Khan’s temperament, a visit primarily structured around a begging bowl couldn't have been all that pleasant. For that is what it was in reality. Worse still, it was something which could hardly be hidden from the public gaze. First, in the matter of the urgent need to get financial assistance, his meeting with Premier Li Keqiang was not propitious. Xinhua quoted him at a press conference as saying that China was willing to provide assistance to Pakistan “within our capability”, a statement unlikely to provide any relief to his guest. The same tone echoed in the following meeting with vice-foreign minister Kong Xuanyou where it was said that China had “made it clear in principle that (it) will provide necessary support and assistance to Pakistan in tiding over the current economic difficulties". It was also made clear that the actual amount of "assistance" will be discussed in subsequent meetings. Not a word about the rumoured $6 billion package, which was doing the rounds in the Pakistan media. Second is the issue of the nature and goals of Chinese loans and project assistance. Imran is no fool, and even before his election to the top post, the newly-elected prime minister had been stressing that Chinese assistance must also address the basic concerns of the people in terms of cheap housing, basic utilities and other aspects. In this he may get some reprieve. Third, is the most ticklish aspect of a "re-negotiation" of Chinese loans that Imran and his team have been batting for. Nothing at all emerged on that front, and presumably, is going to be part of future discussions. The boiler plate joint statement did have some effusive language on Pakistan’s search for peace, and appreciated Pakistan’s “engagement” and “adherence” to the guidelines of the Nuclear Suppliers Group. No promise of membership as claimed by Indian media. Worse, the rest of the statement essentially commits Pakistan to the Chinese view on the Iran-US nuclear deal, and demanded ( as before ) a greater Chinese role in SAARC. None of this addresses Pakistan’s immediate concerns.
Under the Pakistani volcano Asia Times. Pepe Escobar. It has been a breathless week, huddled in the shadow of the simmering, bubbling, politico-religious volcano that is Imran Khan’s Pakistan. Before moving on to bloodier matters, let’s start with the “Mr. Khan Goes to China” episode – essential for reviewing all aspects of what is enthusiastically described by both sides as the “all-weather strategic cooperative partnership”. Prime Minister Khan, leading a fresh government elected in July and facing a range colossal challenges, set the tone from the start. He did not mince words. “Countries go in cycles, they have their high points, they have their low points,” he said. “Unfortunately, our country is going through a low point at the moment with two very big deficits, a fiscal deficit and a current account deficit. And so we, as I’ve said, have come to learn.” Arguably few teachers beat Chinese President Xi Jinping, praised by Khan as a role model. “China’s phenomenal achievements are worth emulating,” Khan said. “No other country has tackled poverty and corruption the way China has tackled it.” The lynchpin of the strategic partnership is inevitably the China-Pakistan Economic Corridor (CPEC), the flagship project of the New Silk Road, or Belt-and-Road Initiative (BRI). Before his stint as guest of honor of the First China International Import Expo in Shanghai, Khan met a crucial player in Beijing for CPEC financing: Jin Liquan, president of the Asian Infrastructure Investment Bank (AIIB). Right from the start, Pakistan’s new Planning Minister Makhdoom Bukhtiar was confident that Islamabad would not need to reschedule around $2.7 billion in Chinese loans due for repayment in 2018. Instead, what’s in the cards is an improved economic package centered on taking CPEC to the next level.A financially stable Pakistan is absolutely crucial for the success of BRI. A Pakistani audit of projects approved by the previous Nawaz Sharif administration called for streamlining CPEC, not curtailing it. Now, Team Khan does not subscribe to the notion of CPEC as a debt trap.With Saudi Arabia and China stepping in with cash, Islamabad may avoid becoming further indebted to the IMF and its trademark “strategic adjustments”- widely dreaded across the Global South for producing a toxic mix of austerity and inflation.
Pakistan’s government bows to Islamist right, victimises anew woman in blasphemy case - Bowing to the demands of the Islamist right, Pakistan’s three-month-old Tehrik-e-Insaaf (PTI) government has ordered the country’s Supreme Court to review its decision vacating the blasphemy conviction and death sentence imposed on Asia Bibi, an impoverished Catholic woman.The government has also ordered that Bibi, who languished on death row for eight years, not be allowed to leave the country.On Wednesday, Pakistani and international media claimed that Bibi had been allowed to go into exile. But Foreign Office spokesperson Dr. Mohammad Faisal has denounced these reports. “There is no truth in reports of her leaving the country—it is fake news,” Faisal told Dawn News Television. It subsequently emerged that the authorities had merely released Bibi from a Multan jail and flown her to Islamabad where she remains closely guarded for her own protection.Pakistan’s highest court struck down Bibi’s 2010 blasphemy conviction and ordered her immediately freed in an October 31 ruling. While the Supreme Court framed its ruling within a defence of the legitimacy of Pakistan’s reactionary blasphemy laws, it said there was insufficient evidence against Bibi, including inconsistencies in the testimony of her accusers. The Islamist right—which has long been cultivated by Pakistan’s ruling elite, especially the military-intelligence apparatus, as a bulwark against the working class and a weapon in its strategic rivalry with India—responded to the court’s verdict with calls for immediate mass protests.
34 lawyers killed since Duterte became president- lawyers' group - A human rights lawyer, who provided assistance to families of recently slain sugarcane farmers, was shot dead in central Philippines, becoming the 34th member of the legal profession killed since President Rodrigo Duterte came to power in 2016.The National Union of Peoples' Lawyers (NUPL) on Wednesday denounced the killing of Benjamin Ramos, the group's local leader, who was killed by unidentified motorcycle-riding assailants on Tuesday evening on the island of Negros. Reports said he was hit three times in the back and upper chest. "We condemn in the strongest possible terms the cold-blooded murder of Attorney Ramos," NUPL assistant secretary general Josalee Deinla told Al Jazeera.Philippines' Duterte vows to continue 'chilling' war on drugs"The sad reality in the Philippines is that lawyers are getting killed while in legitimate exercise of their profession."Police said they are investigating the case, adding that Ramos had received numerous death threats before the deadly attack.Meanwhile, Duterte's spokesman Salvador Panelo said blaming the Duterte administration for the killing of Ramos is "reckless" and "baseless". Ramos, 56, was the 24th practising lawyer killed in work-related attacks in the country since August 2016, according to a list compiled by NUPL.The list also includes three judges and seven prosecutors, bringing the total number of legal professionals killed to at least 34 in the last two years. Most of the reported deaths have not yet been solved.
Argentina Signs $8.7 Billion Swap Agreement With Beijing To Shore Up Sagging Peso - Embattled Argentinian President Mauricio Macri has been scrambling to shore up his country's struggling currency since the IMF's executive board finally approved a record - and expanded - $57 billion bailout loan with the explicit condition that the country's central bank refrain from using that money to support the Argentine peso. But as Argentina's battered economy has continued to deteriorate, the peso's value has eroded dramatically as the central banks pushed , cementing its status as one of the worst-performing currencies of 2018, as traders ignored a series of frantic rate hikes that brought the overnight interest rate in the country to a staggering 60% (which appears somewhat more appealing next to the country's annualized inflation rate of 40%). With Argentina's economy slipping into a recession back in September, Macri's government imposed strict fiscal controls to try and limit the country's reliance on international debt markets - markets to which it only recently regained access. The country's economic desperation, which has dented Macri's popularity and cast doubt on his chances of winning reelection next year, prompted us to joke a few months back that it might be time for the ECB to jump on the IMF bailout bandwagon.
Photo of Brazil President-Elect Bolsonaro’s Sons Wearing IDF and Mossad Shirts Goes Viral — Just a week after far-right candidate Jair Bolsonaro’s electoral victory in Brazil’s presidential election, the consequences of fascism and support for apartheid and ethno-nationalism rising to power are already coming to fruition.A photo of Bolsonaro’s sons donning shirts depicting logos of Israel’s Mossad spy agency and “Israeli Defense Forces” (military) has gone viral, highlighting how Bolsonaro will normalize ethno-fascism as seen in Apartheid Israel that could stretch from the Americas to the Middle East and beyond.On the left is Carlos Bolsonaro, a member Rio de Janeiro’s Municipal Chamber who affiliates with the right-wing Social Christian Party. It’s no surprise that Carlos would sport a shirt in support of the Mossad; Israel’s vast intelligence agency is used to attack and silence Palestinian activists at home and abroad, and is also believed to be behind several assassinations of Iranian nuclear scientists.This is a photo of Brazil’s new president Jair Bolsonaro’s two sons wearing IDF and Mossad shirts. Israel has become a symbol for authoritarianism around the world https://t.co/QgRTyRafBr— Mairav Zonszein (@MairavZ) November 4, 2018In September during the lead-up to the election, Carlos Bolsonaro sparked outrage after sharing a post on Instagram defending the Brazil military dictatorship’s cruelest methods of torture, the so-called “macaw’s perch.” The excruciating technique involved placing a bar over the victim’s biceps and behind the knees which are then bound to the ankles. The macaw’s perch aims to inflict intense musculoskeletal and joint pain as well as psychological torture.He quickly retracted the image while, echoing the words of Trump, claiming the controversy was “fake news” meant to smear his family prior to the presidential election. During the same month, Carlos Bolsonaro took to Instagram once again to post a photo depicting a bloodied man suffocating from torture while bound in a plastic bag. The image was interpreted as a threat toward women and others who stand against right-wing candidates like his father.
25% of world murders are in Brazil, Venezuela, Mexico and Columbia - With just 8% of the world’s population, Latin America accounts for roughly a third of global murders. It is also the only region where lethal violence has grown steadily since 2000, according to United Nations figures. Nearly one in every four murders around the world takes place in just four countries: Brazil, Venezuela, Mexico and Colombia. Last year, a record 63,808 people were murdered in Brazil. Mexico also set a record at 31,174, with murders so far this year up another 20%.
- * Large drug and organized crime problem. Latin America supplies a lot of the US illegal drug demand
* Latin America has more young people than most other regions
* high youth unemployment
* weak educational systems. Only 27% of Brazilians aged 25 or older have completed high school
In the 1950s, Singapore and Caracas had very similar murder rates, between 6 to 10 per 100,000 residents, according to Manuel Eisner, who studies historical levels of violence at the Violence Research Centre in Cambridge, U.K.Singapore suffered from gangs, prostitution, drug trafficking and corruption. But after independence in 1962, authoritarian Lee Kwan Yew enforced rule of law, boosted education, and created a culture of working hard and achievement, and ensured social integration. Singapore’s murder rate is 0.4 per 100,000 residents. The nongovernmental Venezuelan Violence Observatory estimates the country’s murder rate is roughly 110 per 100,000—about 34,000 a year.
Bank of England refuses to hand over Venezuela’s gold – report - The Bank of England (BoE) is refusing to release around $550 million in gold owned by Venezuela back to the country over the UK regulator's claim of growing uncertainty about Caracas’s intentions for the 14 tons of gold bars. British officials are insisting that measures aimed at preventing money-laundering are taken, The Times reports. The Venezuelan government is reportedly expected to provide a clarification about its plans for the gold. “There are concerns that Mr. Maduro may seize the gold, which is owned by the state, and sell it for personal gain,” the media reports citing unnamed sources. Reports emerged earlier this week that the Venezuelan government had been trying to reach the gold belonging to the country for two months. The talks had reportedly come to a standstill due to increased difficulties in obtaining insurance for the shipping that is necessary to move a large gold cargo.Last week, Venezuelan gold exports became subject of another round of US sanctions against the Latin American country. The latest penalties target both US individuals and corporations involved with gold sales in Venezuela.Over the past several years, Washington introduced a wide range of punitive measures against the Bolivarian Republic, hitting its finances, debt issuance and business activity of state oil company PDVSA. US authorities accuse Venezuela’s current government and its leader Nicolas Maduro of violating human rights and undermining democracy.Venezuela, which is currently in the throes of a severe economic crisis, has recently made attempts to eliminate reliance on US-controlled financial institutions and instruments, including the US dollar. Last month, the country committed to trading in euros, yuan and ‘other convertible currencies’ amid US penalties. Over the past three years, Venezuela has been using its gold as collateral to get billions in loans from international lenders. However, swap agreements became difficult for Venezuela in 2017 after Washington banned US financial institutions from financing operations there.
Canada is richer than the US, according to a new wealth ranking — in fact, the US doesn’t even make the top 10 The United States is home to more millionaires than any other country in the world. But whether the country is truly the wealthiest in the world depends on how you measure. A report released by Credit Suisse in October says the US is "in the lead" when it comes to global wealth. But a closer look at the numbers in that report reveals a different story. While it's true that wealth in the US is growing faster than anywhere else in the world, it's not the richest when you compare the average amount of wealth per adult. That prize goes to Switzerland, as you can see in the map below. Wait a minute, you may be thinking: it looks like the US is richer than Canada. So what's with the headline? The ranking above divides a country's overall wealth by the total population. That means it doesn't reflect the fact that the top 0.1% of US households hold as much wealth as the bottom 90%. "The United States has the most members of the top 1% global wealth group, and currently accounts for 41% of the world's millionaires," the report notes. "Our research indicates that the United States added 878,000 new millionaires [since 2017] — representing around 40% of the global increase." A different, perhaps fairer, way to rank the richest countries in the world is to take a look at the countries where the greatest number of people are rich. Credit Suisse ran those numbers, too, in order to compare how much wealth the median, middle-of-the-pack person has in every country. In that ranking, Australians are the richest. And the US doesn't even make the top 10.
This is China's Plan to Dominate Southern Europe – Carnegie - China’s deep pockets and generous investments are turning to Southern Europe—the latest target in its influence campaign to establish Chinese business, cultural, and diplomatic presence around the world. Chinese state-owned companies are using their financial leverage to build strongholds in Portugal, Greece and Italy. Since the 2008 financial crisis, China has become a significant creditor to many severely indebted European Union nations. Portugal, Greece, and Italy were all forced to privatize some of their state assets following the euro-debt crisis, making their economies partly dependent on Chinese investors. Private acquisitions also multiplied. China’s investment strategy in Southern Europe has involved significant purchases of large European firms. When Portugal started privatizing some of its utilities, China Three Gorges Corporation (CTG), a Chinese state-owned power company, became a shareholder of Energias de Portugal SA (EDP), the country’s formerly state-owned grid company. CTG is now bidding for a majority share of EDP’s capital. Other Chinese investments in energy include Redes Energéticas Nacionais and Galp Energia. Additionally, China has bought stakes in Portugal’s national carrier Transportes Aéreos Portugueses, insurer Fidelidade, hospitals, real estate and even media. KNG, a Macau-based Chinese fund, acquired 30 percent of Global Media Group, the owner of the Portuguese newspapers Diário de Notícias and Jornal de Notícias , and Radio TSF. China’s influence campaign isn’t limited only to Portugal. In Greece, shipping giant China Overseas Shipping Group Company (COSCO) was granted a license to run no less than 67 percent of Greece’s largest seaport, Athens’ Piraeus harbor—establishing a Mediterranean hub for Chinese companies and challenging Greek shipowners. Furthermore, other examples include China State Grid, a Chinese-state owned utility company, which has invested in IPTO, a major Greek transmission operator. Next door in Italy, Chinese investors also bought brands such as tire manufacturer Pirelli or machine-tools maker Cifa. Chinese funds invested in strategic Italian energy entities such as Eni, Enel or the Italian national electricity agency CDP Reti (China State Grid acquired 35 percent of its capital). Moreover, Chinese investors purchased shares in Fiat Chrysler (automobiles), Ferretti (yachts), Telecom Italia, and world-famous fashion designer Ferragamo. Chinese investors have also bought hundreds of Italian small and medium businesses.
Macron wants ‘Euro army’ to combat China, Russia and US - Emmanuel Macron, the French president, has called for a "real European army" to defend the continent against Russia, China and even the US. French President Emmanuel Macron. Credit:AP Mr Macron, who has pushed for a joint EU military force since his election last year, issued the call in northern France in the run-up to the centenary of the end of the First World War. "We will not protect the Europeans unless we decide to have a true European army," Mr Macron said in the interview at Verdun, the scene of France's most bloody battle. His call came as he was due to welcome Donald Trump, the US president, and other world leaders, including Theresa May and Russia's Vladimir Putin, to France to commemorate Armistice centenary this weekend. Advertisement Mr Macron said the continent could no longer rely on protection from America, citing the recent decision of Mr Trump to withdraw from a Cold War-era nuclear treaty, and he even suggested its old ally posed a potential threat. Macron wants a Euro Army. Pictured: German Bundeswehr soldiers.Credit:AP "We have to protect ourselves with respect to China, Russia and even the United States of America," Mr Macron told broadcaster Europe 1 in his first radio interview since taking power. "When I see President Trump announcing that he's quitting a major disarmament treaty which was formed after the 1980s euro-missile crisis that hit Europe, who is the main victim? Europe and its security," he said. Faced with "a Russia which is at our borders and has shown that it can be a threat", Mr Macron added: "We need a Europe which defends itself better alone, without just depending on the United States." Mr Trump had previously said that Europe could not bank on America's protection if it failed to meet its annual defence spending commitment to Nato, prompting Mr Macron to declare last month: "Europe can no longer rely solely on the US for its security."
Marine Le Pen Leads Macron For First Time, Latest Poll Shows - French President Emmanuel Macron's already abysmal approval ratings, which has fallen precipitously this year following an exodus of cabinet officials, tone deaf messaging over the president's "lavish" lifestyle, controversial immigration policies and a scandal involving brutality by a Macron bodyguard and confidant, have already slid to their lowest level since his presidency began, putting him on pace to eventually match the single-digit approval ratings enjoyed by his predecessor, socialist Francois Hollande, which inspired Hollande not to seek a second term. And over the weekend, the polls dealt another embarrassment to France's youngest leader since Napoleon, when they revealed that the National Rally (formerly National Front) party's candidates for the May European Parliament election are polling higher than candidates running on Macron's "En Marche" ticket. This is the first time the far-right party has overtaken Macron's centrist movement in the polls. As the IFOP opinion poll showed, National Rally candidates - who belong to the party led by Marine Le Pen, Macron's former opponent in the 2017 presidential campaign - were polling at 21%, compared with 19% for En Marche:
German Social Democrats demand right-wing replacement for Merkel - The German Social Democrats (SPD) hope that a right-wing candidate will become the new leader of their coalition partner, the Christian Democrats (CDU), after Chancellor Angela Merkel announced that she will not stand for re-election as party leader at the CDU congress in December. The SPD argues that a shift to the right by the CDU would give the SPD the necessary leeway to regenerate and regain support.Kevin Kühnert, chair of the SPD youth organisation, has called Angela Merkel’s withdrawal from the CDU presidency an opportunity for the SPD. In recent years, many people have had the feeling that the CDU/CSU and the SPD were two wings of a party moderated by Merkel, he told the ARD morning show. That is why he favours a conservative candidate as successor. In this way, the contrast between the two parties would become clearer, he said.Kühnert would prefer if the CDU/CSU gave a clear signal that it was “returning to conservatism in a broad way.” He said he was convinced that many rank-and-file members of the CDU/CSU want this.It is hard to say whether the cynicism or the arrogance of this reasoning is more repulsive. A further shift to the right by the CDU/CSU would be accompanied by stepped-up attacks on democratic rights and social programs and would lead to the inclusion of the far-right Alternative for Germany (AfD) in the government, sooner or later.The three candidates most likely to succeed Merkel are Friedrich Merz, Jens Spahn and Annegret Kramp-Karrenbauer.Merz embodies the amalgamation of finance capital and social reaction in its purest form. This Catholic from the Sauerland region takes an ultra-conservative stance on socio-political issues and is head of BlackRock Germany, the world’s largest asset manager.Spahn, together with Alexander Dobrindt, the CSU’s regional group chairman, is striving for a “conservative revolution” modelled on the extreme right in the Weimar Republic. He is friends with Trump confidante Richard Grenell, the US ambassador in Berlin, and with Austrian Chancellor Sebastian Kurz, who governs in alliance with the extreme right-wing Austrian Freedom Party (FPÖ). Kramp-Karrenbauer is Merkel’s favourite. If she is elected, Merkel might possibly remain Chancellor for some time and continue the much-hated policies that have been repeatedly rejected by the electorate.
US navy ship ignored sinking migrants' cries for help, say survivors - Prosecutors in Sicily are examining allegations by shipwreck survivors that a US navy ship ignored distress calls and failed to assist them before their dinghy capsized. The USS Trenton rescued 42 people after the dinghy sank on 12 June, but survivors allege that the cruiser had earlier ignored their cries for help, failing to avert a disaster in which 76 people died. Magistrates in Ragusa confirmed that they have examined a video published by La Repubblica in which six survivors say the US cruiser was near the boat before the sinking – but appeared to ignore their request for help. “We saw that ship, it was not far away,’’ said one of the survivors in the video. “We saw the American flag. If they had rescued us when we were all still onboard, 76 people would not have died.” The dingy had left Libya a few days earlier with 117 migrants onboard, most of them from sub-Saharan Africa. Survivors said that in the early hours of 12June, the vessel started to take on water, not long before they first sighted the Trenton. ‘‘The sea was rough and our boat began to fill with water,” one survivorsaid, “and we suddenly saw a ship; it was an American ship.” The survivors say they tried to attract the attention of the ship’s crew for an hour. “We saw the American flag and we tried to reach them, but as we approached, they seemed to avoid us and changed direction,” said another. The US navy has denied that the Trenton was at the scene before the sinking. The migrants’ boat eventually sank, killing 76 people. ‘‘I saw my only brother and sister die and thought I would soon die too,’’ a Nigerian woman told La Repubblica. Another survivor said: “My wife was pregnant. She died before my eyes.” The survivors said that the Trenton returned to the scene half an hour after the sinking. “We clearly saw the same American ship that had ignored us approaching,’’ one man said in the video.
Salvini To Cut Migrant Allowance In Half, Saving €400 Million - Italy's populist interior minister, and de facto most important politician, Matteo Salvini has continued his assault on what he views as Italy's biggest problem, and is expected to drastically cut the daily allowance for migrants in Italy, claiming the country could see save up to €400 million by 2019.According to Il Giornale, the proposal would slash by almost half the current daily allowance of €35 per day to only €19 per day, which would be one of the lowest rates in western Europe. And, according to the Interior Ministry, the cuts would lead to a saving of €400 million in 2019, rising to €500 million in 2020 and €600 million in the years thereafter, unlocking much needed budgetary savings for a country that remains lThe move would also be part of the broader migration and security decree released by Salvini in late September, which also banned residency permits for so-called humanitarian reasons. Migrants will now be classified into two groups: those with recognized asylum claims and those without according to the Italian press. Those with refugee status and recognized underage migrants will have broader access to funding and government programs. Salvini, who came into power riding on a platform vowing to crackdown on the number of inbound refugees, has managed to greatly reduce the number of migrants coming into Italy by closing Italian ports to migrant rescue NGO vessels who have been accused in the past of co-operating with people smugglers.Having dealt with the issue of migrants entering Italy illegally, Salvini has recently set his sights on deportations of existing illegals according to Breitbart. Earlier this week he announced a new plan to invest €12 million to fund the deportation of at least 2, 700 illegals starting in February and ending in 2021.
Fitch Warns Italy's Government May Not Survive Amid Calls For A Vote Of Confidence --While European bond traders have been focused on the escalating standoff between Italy and Brussels over Italy's budget-busting deficit proposal, which culminated this morning with EU's Dombrovskis warning that the European Commission is considering a sanction procedure against Italy if the budget does not change - even as Italy has sternly refused to change the budget - this morning the head of Fitch's sovereign ratings, James McCormack, warned that uncertainty involving Italy's coalition government is as great a risk for BTP investors as the budget for the simple reason that the government may not survive as its members are "too different."Speaking on Bloomberg TV, the Fitch strategist said that there are not many things that the coalition partners agree on, and that raises questions about the government's survival."We are not convinced that this coalition government is actually going to survive. It has very different coalition partners" and there are "not many things that they agree on", McCormack said. Update: Picking a perfect moment to prove Fitch's point, Bloomberg reports that the Italian government may call a vote of confidence in the Senate on the migration measures. This would aim to strong-arm Five Star dissenters who face expulsion from the party if they vote against the government. Additionally, Five Star and the League are also at loggerheads in the lower house of parliament over Five Star’s demand in an anti-corruption bill to scrap time limits on how long people can be prosecuted after an initial trial. Salvini has said the government must “avoid trials that last forever, also for the innocent, which would be a defeat for everyone." It appears that if the internal bickering within Italy's "coalition" government continues, the EU may just opt to wait to discuss the Italian deficit with whatever government comes as a replacement.
Italy’s finance chief says budget talks with the EU will continue despite disagreements -- The standoff between Italy and the EU continues as both sides have not yet overcome their differences regarding Rome's 2019 budget. The Italian government will continue talking with the European Commission — the EU's executive arm — over its spending plans to overcome their differences, the country's finance minister told CNBC on Tuesday. Rome and Brussels hit an impasse over Italy's 2019 budget plans. The anti-establishment government vowed to increase spending in the coming years, challenging previous commitments made between both sides. At the same time, the additional spending has sparked further worries about Italy's' massive debt pile, at 130 percent of debt-to-GDP. "I expect the dialogue will go on. Of course, we have some disagreement(s) but this does not mean we can't have a dialogue, constructive dialogue between the commission and Italy," Giovanni Tria, Italy's finance chief, told CNBC's Willem Marx in Brussels. The European Commission decided to ask Italy to change its 2019 budget plan and to submit the new version by November 13. However, back in Rome, government members have said they will not change their spending plans.
Italy flirts with recession as eurozone slumps - The Telegraph - Italy risks falling into a recession on the back of a fall in private sector output in October, as the wider eurozone economy also shows signs of a slowdown.Manufacturing and services industry growth slipped last month, according to the purchasing managers’ index (PMI) survey from IHS Markit, with Germany now growing more slowly than France or Spain.The eurozone’s PMI weakened to 53.1, its weakest in more than two years and down from 54.1 in September.Any score of above 50 represents growth in output, so this dip shows a slowdown in the pace of expansion. It comes after GDP grew by just 0.2pc in the third quarter, indicating the eurozone got off to a bad start for the final quarter of the year..
Italy says cutting deficit would be ‘economic suicide‘ - Italy is ready to continue talks with Brussels over the country's 2019 budget plan, but Rome will not give up "fundamental pillars and characteristics" of the disputed proposal, Economy Minister Giovanni Tria said on Friday.Rome hopes to stimulate the Italian economy by raising the deficit to 2.4 percent of GDP. The populist Cabinet, made up of the anti-immigration League party and the anti-establishment 5-Star Movement, has strongly rejected the 0.8 percent deficit pledge made by the previous government. Sticking to it would require a "very brutal fiscal contraction," Tria said on Friday."For an economy that is slowing down sharply, this would actually be suicide," he said."I do not think that the European Commission expects an action of this kind, even if it would formally comply with the rules.” The EU has already rejected Rome's budget proposal and demanded a rewrite. Eurozone finance ministers and the European Commission worry about increasing Italy's debt load, which is already at 132 percent of the country's GDP. Out of all EU members, Greece is the only country with a larger debt percentage, at 182 percent. However, a crisis similar to the one in Greece would be nearly impossible for the EU to manage due to Italy's much larger economy.
The consequences of Italy’s increasing dependence on domestic debt-holders -- Italian debt is overwhelmingly and increasingly held by resident banks and investors, as shown by the updated figures in our database on sovereign bonds holdings. In this blog post, I discuss possible implications. Our recently updated database on sovereign bonds holdings shows that Italy maintains some peculiarities in its debt ownership structure. The substantial increase in the proportion of Italian bonds held by the Bank of Italy since 2015 (from 5.8% to 19.3% of total outstanding debt) is an operational consequence of the quantitative easing launched by the European Central Bank, and is common across euro-zone countries. Beside this monetary policy-driven change, however, the portion of remaining bonds held by residents (banks and other investors combined) relative to non-residents has kept increasing since the last observation. This is all the more interesting given that Italy already had the highest proportion of debt held by residents and the lowest proportion of foreign holders among the most important euro-zone countries (all European countries in our database, namely Finland, France, Germany, Greece, Spain, Portugal and the Netherlands – see Figure 1 for a comparison of the four largest euro-zone economies). Significantly, the relatively lower share of foreign holders has not been a constant feature: around 2005, sovereign bonds of France, Germany, Italy and Spain were each held by foreigners at a very similar level (in the neighbourhood of 50%). Since then, foreigners have owned an increasingly small share of Italian debt, in particular after the 2011-12 crisis, falling below 35% of the total outstanding debt (they still owned half of it at the end of 2009).
Catalan separatists indicted for rebellion, facing jail for up to 25 years --On Friday, Spain’s public prosecutor filed its written accusation against Catalan secessionist leaders in pre-trial detention for their role in the Catalan independence referendum last year and the unilateral independence declaration that followed.The referendum was deemed illegal by the Popular Party central government in Madrid and utilized to carry out brutal state repression in Barcelona and throughout Catalonia.Public prosecutors are seeking a 25-year prison term for former deputy, regional vice-premier and leader of Left Republicans of Catalonia (ERC) Oriol Junqueras and to bar him from holding public office for the next 25 years. Jordi Sànchez and Jordi Cuixart, former heads of the Catalan National Assembly and Òmnium Cultural, face 17-year jail terms and a 17-year ban on holding public office, as does former Catalan Parliament Speaker Carme Forcadell. Former regional ministers Joaquim Forn, Dolors Bassa, Raül Romeva, Josep Rull and Jordi Turull, are facing 16 years in prison.They are all charged with rebellion for using “the necessary violence to ensure the criminal outcome sought”—organising an unauthorised secessionist referendum. The crime carries a 30-year maximum sentence. For the three former regional ministers not in pre-trial jail, Carles Mundó, Maritxell Borrás and Santi Vila, the requested sentence has been dropped to seven years on embezzlement charges.In a separate court case, the National Court is investigating four officials in charge of the Catalan police last year. Prosecutors announced they are asking for 11 years imprisonment for the former regional police chief, Josep Lluis Trapero. Both trials are expected to begin in early 2019.
Revealed: Theresa May’s secret Brexit deal Theresa May’s secret plan to secure a Brexit deal and win the backing of parliament can be revealed today.Senior sources say the prime minister has secured private concessions from Brussels that will allow her to keep the whole of Britain in a customs union, avoiding a hard border in Northern Ireland. They expect this to placate remainer Tories and win over some Labour MPs.And in a move that will appeal to Eurosceptics, May is also said to be on course to secure a political deal on a “future economic partnership” (FEP) with the European Union that will allow Britain to keep open the prospect of a free trade deal resembling that enjoyed by Canada.The Sunday Times has been told that preparations for a final deal are far more advanced than previously disclosed and will lead to a document of 50 pages or more when it is published — not the vague, five-page plan many expect.Cabinet sources say parts of it “could have been written by Jacob Rees-Mogg”, the leader of the hardline Eurosceptics.A close aide of Michel Barnier, the EU negotiator, revealed a major concession on the Irish border during a private meeting in London last week. The EU now accepts that regulatory checks on goods can take place “in the market” by British officials, meaning they can be conducted at factories and shops rather than at the border.Downing Street officials are desperate to see enough progress this week for the EU to announce a special summit later in November to agree the final details. May will discuss the proposals with her cabinet on Tuesday. Under the plans:
- The EU will write an all-UK customs deal into the legally binding withdrawal agreement so an EU-designed “backstop” treating Northern Ireland differently from the UK mainland is not required
- There will be an “exit clause” to convince Eurosceptics the UK will not be in it for ever
- The FEP will outline how a new trade deal would balance market access and border checks, making clear that a deal along the lines of the EU’s arrangement with Canada is still a possible outcome as is May’s Chequers plan for close alignment.
Brexit: the pivoting May --According to recent press reports, we're supposed to be days from Mrs May triumphantly delivering a Brexit deal to her cabinet colleagues and demanding their approval. Despite that, the Observer is picking up on the Arron Banks drama. But never mind, The Sunday Times is on the case with a dramatic, front-page story bearing the headline "May's secret Brexit deal". This tells us that the prime minister has secured "private concessions" from Brussels that will allow her to keep the whole of Britain in a customs union, thus avoiding a hard border between the Republic and Northern Ireland. In this respect, when I recorded yesterday that this deal might be in the offing, I also expressed the usual reservations about the media, noting its chronic inability to report detail accurately. And it's here that we seem to have a problem. If all Mrs May has got is an agreement on a customs union then she hasn't got anything at all: a customs union alone will not provide for the regulatory alignment that is needed to ensure a frictionless border. A deal involving just a customs union is no deal at all. Either there is something more or The Sunday Times has got it wrong. The interesting thing here is that the ST isn't basing its story on any hard evidence. Rather, it says it has pieced together "the plan" after speaking to "a dozen ministers, advisers, civil servants and EU officials". What it also says is that a close aide to Michel Barnier "revealed" a major concession at a private meeting last week. The EU, it appears, is now prepared to accept the regulatory checks can take place "in the market" by British officials, meaning that they can be conducted at factories and shops rather than at the border. If that is the case, there is clearly an inconsistency in the report, as such checks are related to Single Market administration. Mrs May would have to be conceding a level of regulatory alignment commensurate with full participation in the Single Market. There is no way the EU could allow regulatory checks on the basis described without that concession. Yet this goes way beyond anything that she could possibly get past the "ultra" faction of her party as it would go back on her commitment to take the UK out of the Single Market. If Mrs May is intending to put this to her colleagues on Tuesday, she is going to have a hard time of it. In the unlikely event that she did manage to get it past the cabinet, the chance of her getting it through Parliament is not much better than the proverbial snowball surviving a journey through Hell. However, it doesn't even stop there. According to the ST, the EU is willing to write this "all-UK customs deal" into the legally binding withdrawal agreement, on which basis a "backstop" treating Northern Ireland differently from the UK mainland is not required.
Brexit: Even More Noise in the Signal - Figuring out what if anything is happening with Brexit is becoming even more difficult due to the decay in the caliber of reporting, which wasn’t so hot to begin with. I hope to post on some structural issues that the press has ignored later this week, but a bit of catch-up first seemed to be in order.One has to wonder if the frequency of bogus stories about Brexit progress and breakthroughs are simply intended to keep the pound aloft. Recall we had a blizzard of optimistic stories before the October summit, when the push to reach closure came to naught. Then we had the flurry on a UK-EU financial services deal, which was much less connected to reality.The idea that the press might be manipulated to support the currency would be particularly unfortunate since as vlade and other readers have said, one thing that might jolt even the fabulously rigid Theresa May into reconsidering some of her red lines. However, time now getting so limited she is boxed in by that as well.The headfake of the weekend was a cover story in the Sunday Times about “May’s secret Brexit deal.” And in particularly misguided reporting, the writers weren’t even working off rumors of a deal. The connected the dots between different snippets they had heard and concocted a deal from it.No. 10 quickly denied the story, but the major UK press outlets were oddly slow to pick up on that. We saw it only in Reuters:Asked about the Sunday Times report, a spokesman at May’s office said:“This is all speculation. The prime minister has been clear that we are making good progress on the future relationship and 95 percent of the withdrawal agreement is now settled and negotiations are ongoing.”Moreover, if you read the Sunday Times story, it made no sense. For instance, it claimed that the EU had agreed to let the UK make customs checks (which in context meant regulatory compliance checks) at farms and factories. Huh? That means accepting EU regulations, and it’s hard to see the EU not insisting on the jurisdiction of the ECJ (there’s not enough time to agree on how a joint supervisory apparatus would work even if the EU were game). As Richard North wrote: … it looks unlikely that this “plan” has been formally presented to the EU. More likely, Mrs May is hoping that, if she can get it past the cabinet, the EU might be prepared to accept it as the basis for a formal UK offer which can then, with the blessing of Michel Barnier, be presented to the European Council later this month.
Northern Ireland Constitutional Settlement: A Brexit Booby Trap? – Yves Smith - Today we’ll stick our noses into Northern Ireland politics, which it turns our matters more than it might appear in Brexit. And I don’t mean the DUP’s position in the UK parliament or the fact that on Monday, the Taoiseach Leo Varadkar told Theresa May that the UK could not push the Republic around on the topic of the backstop.Per the Guardian:Varadkar’s office released a statement shortly after May had called him on Monday morning, which said that while Ireland was open to the possibility of “a review mechanism” for the backstop, “the outcome of any such review could not involve a unilateral decision to end the backstop”.An issue that appears to have been widely ignored, but our alert Brexit experts have picked up on, is that the UK does not have the authority to alter the constitutional arrangements of Northern Ireland, which includes the Good Friday Agreement and the St. Andrews Agreement. It’s not clear how the UK can obtain the needed approvals, given that Northern Ireland has had no functioning government since 2017 and is effectively under direct rule by the Government.This is a particularly tortured topic and I hope my from-the-other-side-of-the-pond attempt at recapping it is reasonably accurate, given that messy situations don’t lend themselves well to simplification. Bear in mind that this is an area where our Clive deems the normally reliable and detail-oriented Richard North to be “clueless”.And before you assume that the EU can bulldoze Northern Ireland, recall that Wallonia held up the approval of the Canada-Europe Trade Agreement for two weeks because its parliament nixed the pact, forcing the Commission to negotiate with Wallonia. But it’s even worse here. As Clive pointed out:But an unelected and unaccountable EU ladling out do’s and don’ts to unionists in NI over which they have no control (which is what “NI remaining under Single Market rules” means in practice) is not what the Good Friday Agreement permits. To see what it’s so hard to square this circle, we need to look at the train wreck that is Northern Ireland politics.1 Any change regarding Norther Ireland’s border and customs arrangements and/or regulatory supervision needs to be approved by the Northern Ireland Assembly. On the devolution settlement for Northern Ireland, “transferred matters” which are under the Northern Ireland Assembly’s jurisdiction include agriculture, economic development, local government, transport, environmental issues, and justice and the police. Constitutional changes are also agreed, or at least proposed, in the Assembly. Having Northern Ireland subject to enough EU trade and other rules to allow for an open border between the Republic and Northern Ireland would require the Assembly’s approval. As Clive put it:
Brexit: Labour rules out voting for deal keeping UK in customs union temporarily – Politics live Theresa May has edged her cabinet closer to a Brexit deal after a chairing a meeting where ministers discussed a compromise plan for the Irish backstop. According to some reports, Geoffrey Cox, the leave-voting attorney general who is trusted by Brexiters to vet any deal for acceptability, gave tentative backing to a plan for the UK as a whole to remain in a customs union as a backstop, with withdrawal only by mutual agreement. The cabinet meeting did not decide anything, but there were no walk-outs, and ministers were told they may be summoned to another meeting very soon where they may be asked to endorse a plan. The EU would still have to agree, but Michel Barnier, the EU’s chief Brexit negotiator, said today that what was holding up progress was the UK government’s failure so far to make choices. (See 3.32pm.) The cabinet meeting finished around five hours ago but since then the hardcore Tory Brexiters have been largely silent - which may indicate that they are currently undecided as to how to respond to developments. Leo Varadkar, the Irish prime minister, has expressed enthusiasm for May’s proposal for a review clause in the Brexit deal over the Irish border saying it could be to Ireland’s “advantage”. (See 3.23pm.)John McDonnell, the shadow chancellor, has signalled that Labour will not vote for a Brexit deal that would keep the UK in the customs union temporarily as a backstop measure after the transition. (See 9.15am.)Nick Hurd, the policing minister, has been criticised for telling MPs that the police exaggerate the impact of spending cuts. When it was put to him by the Lib Dem MP Ed Davey that police chiefs saying tackling the deficit in their pension funds could cost up to 10,000 police officer jobs, Hurd replied: I think the number is exaggerated, which is not unusual for the police.
Reality Check: What are EU countries doing to prepare for a no-deal Brexit? This looks set to be (another) big week in the Brexit negotiations - but preparations are also being stepped up in case no deal emerges on a withdrawal agreement between the UK and the European Union. The UK has published more than 100 technical notices urging businesses and consumers to prepare for no deal. But what about other countries - what preparations have they made?For any country that does a lot of trade with the UK, customs is of primary concern. But it is worth pointing out that nearly all customs issues are dealt with at a European level by the European Commission, so any measures that might be taken in places such as Calais would depend in large part on what gets decided by the EU as a whole. The European Commission's role doesn't mean that French customs hasn't been taking steps to prepare for Brexit. An additional 250 members of staff have been recruited this year - a number that will rise to about 700 by the end of 2020. French customs has also produced some detailed online information (in French) for businesses on how to prepare for Brexit in all its potential forms. Last month, the French government published a draft bill emphasising "no deal" would result in reinstating "checks on goods and passengers to and from the UK" as well as inspections of food, plants and live animals. The French senate is debating what to do about Brexit, on Tuesday. The draft bill would give the government (rather than parliament) the power to introduce new measures by emergency decree if it needed to avoid or mitigate the consequences of a hard or no-deal Brexit. But politicians representing channel ports are warning that chaos and long queues would be unavoidable and both the French government and the EU need to take further steps to avoid that happening. The draft bill also focuses on citizens' rights in the event of no deal, including what would be the legal situation of UK nationals resident in France. The bill also raises the possibility of other UK nationals needing visas to visit France. Any emergency legal measures introduced to ease the situation would, the bill says, depend on the UK taking reciprocal steps, which the UK government has already indicated that it would do.
Michel Barnier: UK could reapply for EU membership once it is ‘a third country’ If the U.K. changes its mind about Brexit once it has left the EU, it can reapply for membership “like a third country,” the bloc’s chief Brexit negotiator Michel Barnier said Monday. After a speech at a Catholic conference in Brussels, Barnier was asked how the EU would respond if the U.K. decides it wants to remain in the EU, potentially as the result of a second referendum. “If the U.K. changes its red lines, then we will adapt immediately,” he said, but added that “After [Brexit] it will be a third country, and like a third country it can ask to join the EU.” Barnier’s remarks seem to suggest that any reversal of Brexit could happen only once the U.K. has left. His comments come after an unusually large poll of over 20,000 people in the U.K., carried out by Survation for Channel 4, indicated a swing of 6 percentage points from Leave to Remain since the 2016 referendum and an 8-point margin in a second vote. In an almost two-hour speech, Barnier warned that a no-deal Brexit would mean a “leap in the dark” for the 3 million EU citizens living in the U.K. and the 1.5 million British citizens in the EU. “From the beginning we’ve wanted an agreement with the U.K., to put certainty where Brexit has created so much uncertainty and often anxiety,” he said. Barnier said “we are near the end” of the negotiation on the Withdrawal Agreement but “difficult subjects,” namely the Irish border question, remain to be resolved.
No deal yet as Irish border holds up Brexit, EU and UK say (Reuters) - A Brexit deal is close but not yet done due to differences over the Irish border, Britain and the European Union said on Tuesday as sterling see-sawed on contrasting perceptions of how hard it will be for Prime Minister Theresa May to clinch an agreement. “We are still not at the 100 percent,” the European Union’s chief negotiator Michel Barnier told a news conference. “What is missing is a solution for the issue of Ireland.” Britain and the EU both wish to keep the border between EU-member Ireland and Northern Ireland in the United Kingdom open after Brexit, as it is seen as crucial to the 1998 Good Friday peace accord that ended decades of sectarian bloodshed in Northern Ireland. While final arrangements on the border are due to be agreed as part of later trade talks, a backstop arrangement in case such talks fail is proving tricky. Britain’s desire to leave the customs union is not easily reconciled with preserving the integrity of the EU’s single market. Barnier said the EU was working to improve its offer for the so-called backstop, or an emergency fix to keep the Irish border open regardless of Brexit consequences, but that it must be workable. London wants the backstop to be provisional rather than permanent, while the EU resists any suggestion it could expire. Barnier said the backstop can have no end-date. He cautioned that without a deal that prevents a hard border in Ireland, Britain will leave the EU in less than five months without a transition period. May told her cabinet of senior ministers more work was needed on the Irish backstop, and that while the withdrawal agreement was 95 percent complete, Northern Ireland was by far the main issue outstanding. It is unclear whether an agreement can be reached in time to hold an emergency summit of leaders in November to sign off the agreement. May told her ministers that aim of doing a deal would “not be done at any cost.” Irish Prime Minister Leo Varadkar said he was open to creative language and creative solutions to the issue, but reiterated Ireland’s view that the border backstop clause in a Brexit deal can have no expiry date or unilateral exit clause.
Brexit: marching up to the top of the hill… Richard North. - It must be pretty clear by now that The Sunday Times claim that Mrs May had secured a "breakthrough" deal on Brexit simply wasn't true – further underscoring the unreliability of the media on this issue.One cannot say that the paper was lying as such but, it over-interpreted very thin, secondary source material to come up with a speculative conclusion which it then presented as a done deal. As such, we're looking at the sort of shoddy work which typifies the legacy media and has characterised the entire Brexit debate. Now, in the manner of the grand old Duke of York, having been marched up to the top of the hill of speculation, the rest of the media is now marching us back down again, as it rushes to present us with the accumulation of denials and other events which make it clear that there isn't and never was a deal in the offing. Even in supporting the denials, however, there is not much in the way of coherence from the media, with much chatter still focused on the UK being tied to a "customs union" as the outcome of some putative future deal. This is the line taken by the Guardian, which re-affirms the unchanging Irish position that a "backstop" must be permanent and, therefore, cannot be called off unilaterally by the UK. Somehow, though, this gets translated into a scenario where the UK is locked in a customs union in order to avoid a hard border, heedless of the fact that a customs union is not sufficient to give us frictionless trade and, in these days of beyond border checks of such things as rules of origin, isn't even necessary. For all that, there is no mention of regulatory alignment in the Guardian story and even to get a mention of "regulatory checks", one has to go to The Times.Here, we learn that European diplomats have made clear that there has been no breakthrough on the key issue of regulatory checks between Britain and Northern Ireland. And this is one of two issues that remain sticking points, the other being the longevity of the backstop. Elsewhere, we are getting the legend that the longevity of the backstop is the only outstanding issue, yet The Times puts us back in regulatory territory and the need to avoid a "wet border" between Northern Ireland and the UK – exactly back where we started. Thus, for all the torrent of speculation, when you drill back down into the issues, we see that there really hasn't been any progress. The UK is confronted with the same-old, same-old dilemma: there must either be regulatory alignment between the EU and Northern Ireland and a "wet border" with the rest of the UK, or there must be an all-UK solution where EU-UK alignment is secured.
Brexit: alphabet soup -Richard North -As we work our way wearily into the week, the single theme with which we started the week has solidified: there is no deal in the offing, no breakthrough – no magic wand. But as the hours and days pass, not even the agenda is clear any more (if it ever was). Media chatter has clustered around the question of a review clause - in much the same way bluebottles are drawn to a fresh dropping – while Mrs May's cabinet has woken to a new-found determination that a deal must be found by the end of the week. In yesterday's piece, though, there emerged not one key issue but two. The longevity of the backstop is one – which the review clause is supposed to resolve – but the other is the nature of the regulatory checks on goods passing between Britain and Northern Ireland. Clearly, this is highly contentious. Following yesterday's cabinet meeting No 10 said the main sticking point remained how to guarantee no new checks on goods at the Irish border. Talks on how to guarantee this, it is said, have been "constructive". That there is an ongoing discussion about the checks pre-supposes that the border issue is halfway settled. We assume that there will be some form of regulatory alignment between Northern Ireland and the EU, allowing for frictionless trade, while the Single Market is protected by those regulatory checks, the nature of which has yet to be agreed. Quite where the customs union comes in is difficult to discern, especially when we get sundry politicians talking about its role in ensuring frictionless trade – which, as Turkish experience illustrates, is hardly complete. Given the level of confusion, it is not even clear whether we expect to be dealing with the or a customs union or even whether we're dealing with a totally different animal called a "temporary customs arrangement" (TCA), the nature of which has yet to be defined, much less agreed.In the Brussels corner, we have Barnier speaking to the Belgian broadcaster RTBF. He then declared: "I am not able to tell you that we are close to an agreement because there is a real point of divergence".
Labour says it will vote down a ‘blind Brexit’ deal with no details about future relationshipLabour will vote down any Brexit deal that does not contain details about what kind of trade deal Britain will have with the EU, Sir Keir Starmer has said. The party’s shadow Brexit secretary is travelling to Brussels on Wednesday for meetings with senior EU officials where he is expected to make clear that the opposition party is opposed to a so-called “blind Brexit”. Any Brexit deal will include two elements. Firstly, a withdrawal agreement – solving separation issues like Ireland, the divorce bill and citizens rights. But Theresa May has also promised a separate “political declaration” – a detailed outline of what Britain’s future trade relationship with the EU will look like, mostly on trade. It is this latter agreement that outlines whether Britain intends to join a customs union, follow single market rules, or sign a free trade agreement – and whether to adopt models like Norway or Canada. Delays and missed deadlines in negotiating the withdrawal agreement, particularly on the Irish border issue, however means that negotiations about the nature of the future relationship have effectively not even started. To make matters worse, Theresa May’s opening Chequers proposal was rejected as unworkable by the EU’s 27 remaining countries, and the prime minister has said she will not accept any other offer on the table.
May’s crunch cabinet meeting over Brexit deal delayed amid row A crucial cabinet meeting to agree the UK’s Brexit negotiating position has been pushed back from Thursday to the weekend or early next week amid a row over whether to provide the full legal advice on the backstop to senior ministers. Some ministers had believed the cabinet could have met late on Thursday afternoon to sign off Theresa May’s Brexit plan but No 10 indicated that the crunch meeting would not now take place on Thursday or Friday. Cross-party calls grow for Brexit legal advice to be published in full Read more Downing Street insisted late on Wednesday that the meeting had not been delayed, although ministers abroad such as Greg Clark, the business secretary who is in Japan, and Sajid Javid, the home secretary who is in Seattle, were ready to fly back at short notice. Brexiters in the cabinet have been keen to see the entire legal advice, particularly if they were to sign up to a customs backstop to avoid a hard border in Ireland that could only be ended by mutual agreement with the European Union at the crunch meeting. One cabinet source said the prime minister had indicated at Tuesday’s cabinet meeting that only a summary of the legal advice – underpinning the final backstop proposal – would be made available to its members. The source said that Michael Gove challenged her and demanded the full legal advice be provided to ministers, prompting concern in Downing Street as to how to respond. The ministerial code makes clear that where legal advice was attached to cabinet papers “the conclusions may if necessary be summarised but, if this is done, the complete text of the advice should be attached”. Geoffrey Cox, the attorney general, told colleagues at Tuesday’s cabinet meeting that if the UK were to insist on trying to secure a unilateral exit to the customs backstop, it increased the risk of a no-deal Brexit because the EU did not want to agree to it.
Little hope of reaching Brexit deal this month, warns Leo Varadkar Leo Varadkar has warned that the chances of sealing a deal this month on Britain’s withdrawal from the European Union are fading. The taoiseach, speaking in Helsinki yesterday, where he was attending a two-day congress of the European People’s Party, said slippage into next year would be unhelpful. EU leaders had pencilled in a summit for the middle of this month to sign off on the withdrawal deal but talks remain deadlocked over the backstop, the mechanism which guarantees there will be no hard border on the island of Ireland in the period after Brexit but before any final trade deal is settled. “I do think that, with every day that passes, the possibility of having a special summit in November becomes less likely,” Mr Varadkar said after meeting Juha Sipila, Finland’s prime minister. Howevef, he said that a summit was scheduled for December 13 and 14 “so not getting it done in November doesn’t mean we can’t get it done in the first two weeks of December. But I think beyond that you’re into the new year, which I think wouldn’t be a good thing.” Brussels has accepted a version of the guarantee that keeps the whole of the UK in a customs arrangement with the EU and restricts regulatory checks to a minimum. The UK has accepted that the backstop cannot be time-limited but insists that it cannot be indefinite. Theresa May, the British prime minister, came under increased pressure yesterday to share the full legal advice on how plans to avoid a hard border in Northern Ireland will work. Michael Gove, her environment secretary, and Jeffrey Donaldson, the Democratic Unionist Party MP and chief whip, have both asked to see the advice.
Conservative Brexiteers in pact with Labour to force Theresa May to print Brexit legal advice on Irish border backstop Shadow Brexit secretary Keir Starmer said his party will use “parliamentary procedures” if the PM withholds the dossier on the Irish backstop, demanded by MPs across the Brexit divide.Shadow Brexit Secretary Keir Starmer has demanded the PM shows MPs key legal advice on the Irish backstopThe fresh headache for the PM came as she rang German leader Angela Merkel and EU Council boss Donald Tusk today.Mrs May pleaded with them to keep the chance of a deal this month alive as she admitted she still needs more time to work up a compromise plan to allow the UK to one day escape the Irish backstop that keeps us in the customs union.She will also lobby Dutch PM Mark Rutte at a NATO dinner in Brussels tomorrow andFrench president Emmanuel Macron in Paris on Friday.Without a deal this month, there will not be enough time for the government to pass all the necessary laws to enact it in time for Brexit on March 29.
Labour’s Keir Starmer heads to Brussels with threat to vote down Brexit deal LABOUR'S shadow Brexit secretary Keir Starmer will warn European Union officials his party are preparing to vote down Theresa May's withdrawal deal if Brussels does not offer Britain a comprehensive vision for a future relationship. Keir Starmer will warn European Union officials of Labour Party plans to vote down the Brexit deal (Image: GETTY)As talks on the withdrawal agreement come to a close, Sir Keir will outline Labour’s demands for the future partnership and tell Brussels the party will vote against Theresa May's Brexit deal unless it includes a in-depth political declaration covering future trade and security cooperation. The shadow Brexit secretary is hoping to shift discussion away from the vexed issued of the Irish border as he warns of the dangers of a “blind Brexit”. With Labour confident of ousting Theresa May’s minority Government, Mr Starmer hopes focusing on UK-EU trade will win the support of MPs for his party. In Brussels, he will argue that a flimsy declaration of the future relationship will not provide enough certainty for businesses. He said: “A blind Brexit could prolong business uncertainty and provide insufficient guarantees to protect jobs, the economy and rights. “Whether you voted leave or remain, nobody voted for the purgatory of permanent negotiations.” Mr Starmer won’t meet Brussels’ chief negotiator Michel Barnier, who is in Helsinki for the European People’s Party conference. He instead will discuss Brexit with other top EU officials, including Frans Timmermans, the European Commission’s Vice-President.
Brexit Dithering and a Labour Push for Revocation? --Brexit is back to its usual Groundhog Day feel, if anything more so than usual.Dominic Raab was supposed to see Barnier this week with new deal terms approved by the Cabinet. Instead, Theresa May is running to the Continent, apparently to beg for more time for the EU to get its act together and still have an EU Council session in November. I’m going to dispense with linking to press reports for the most part, since a lot of this rumor of the day stuff proves to be unreliable. However, it appears the new target date for a November session would be November 25, as opposed to the earlier November 21. But among other things, that depends on May getting agreement from her Cabinet next Monday. Insiders are trying to manage down that expectation. And the Irish government is skeptical too. From Politico:The U.K. and the EU appeared no closer to a Brexit withdrawal agreement Thursday, with leaders and diplomats alike voicing caution that a deal is not a foregone conclusion, despite predictions in some quarters that a text could be signed off on by the British Cabinet next week….The reticent tone was echoed in public by Irish Foreign Minister Simon Coveney and European Agriculture Commissioner Phil Hogan. Speaking in Dublin at a business event, Coveney said “an imminent breakthrough is not necessarily to be taken for granted — not by a long shot,” and urged against the belief that signoff by Theresa May’s Cabinet, if it were forthcoming, represented a guarantee of final agreement.Hogan, speaking to Irish broadcaster RTÉ, said that new proposals from the U.K. on the Irish border would be needed in the “next few days,” or else a mooted November Brexit summit at which EU27 leaders would sign off on the withdrawal agreement may have to wait.“I would say, if I was a betting person, we would have a December Council to discuss the final outcome and hopefully we can do a deal,” Hogan said. Nevertheless, Donald Tusk is now the one making cheery noises on behalf of the EU, saying the EU and the UK could have an agreement in a week. However, as predicted, fishing rights have become a source of friction. From the Telegraph: Senior EU diplomats have warned that any plan to grant the UK a temporary customs union to solve the Irish backstop problem must come with cast-iron guarantees that EU boats will be free to fish in UK waters. The EU demands threaten to re-open a fierce row inside the Tory party over the potential size of the Brexit dividend for coastal and fishing communities. Fishermen warned Mrs May that she must not “squander” the chance to claw back valuable quotas for British fleets, while MPs representing fishing communities said extending the current arrangements would be “totally unacceptable”. And the DUP is having fits over a proposal, leaked to The Times, which has May acknowledging that the EU is pushing for Northern Ireland to remain aligned with the EU to avoid a hard border. Even though May maintains she won’t agree to that solution, the DUP is up in arms for May dignifying it by her mere mention.
New blow to Theresa May as EU leaders demand scrutiny of Brexit deal - Theresa May has been dealt a blow in the Brexit negotiations by EU leaders ahead of a crunch week during which the Brexit secretary, Dominic Raab, had been expected to visit Brussels to unveil the negotiated agreement. Ambassadors for the EU27, including France and Germany, told the European commission that they would need to scrutinise any deal reached with the British before it was made public. The EU’s chief negotiator, Michel Barnier, has largely been given free rein until now. An “optimistic” timetable would have seen Raab arrive on Tuesday to present the legal text agreed between the commission and the British government. But during a two-hour meeting with the the EU’s deputy chief negotiator, Sabine Weyand, the member states’ representatives insisted they would not be steamrollered into accepting the agreement secured between the two negotiating teams. They told the commission they would need around 72 hours to go through the text should there be an agreement in a sign of the growing nervousness over the prospect of giving away an all-UK customs union in the withdrawal agreement. The development makes it less likely that a November Brexit summit could be convened. EU officials have privately said that 25 November is the last possible date for a summit, and that it would need to be called early next week to allow preparations in EU capitals. May’s chief Brexit adviser, Olly Robbins, is expected to visit Brussels on Sunday given the lack of time to find agreement. For the withdrawal agreement to be agreed by the EU27, it will need to contain commitments that a hard border on the island of Ireland will never be required. The EU has suggested that Northern Ireland could in effect stay in the single market and customs union. The prime minister has said she could not sign up to such a “dislocation” of the UK and is insisting on the whole of the country staying in a temporary customs union. Brussels is placing a high price on such a concession, including so-called “level playing field” commitments to ensure the British do not gain any unforeseen competitive advantages. Frustration has been growing at the manner in which the commission has engaged in the talks with the UK. It has taken them into “the tunnel”, a period of private discussions in which consultation with the member states has been limited.
May’s Brexit deal suffers major setback after EU ‘rejects’ UK arbitration mechanism - Theresa May’s hopes of securing a Brexit deal have suffered a major setback after the EU signalled it could not accept a key plank of the UK’s plans, HuffPost has been told. The EU27 have rejected Britain’s proposed model for independent arbitration of a temporary customs partnership with the bloc, senior Whitehall sources have revealed. The fresh diplomatic roadblock emerged as rumours swirled that at least one Cabinet minister was on the edge of quitting in the wake of the resignation of transport minister Jo Johnson. The arbitration mechanism was seen by several members of the Cabinet -including Attorney General Geoffrey Cox - as crucial to the UK retaining its right to control any future links to the EU. But figures in Brussels have made clear in recent days they cannot accept the plan, creating an impasse that could spark fresh fears of a collapse in the talks and a ‘no deal’ Brexit. “They think they’ve got us on the run,” one senior figure told HuffPost. “But they haven’t. We’ve drawn a line in the sand.” British officials have put intense effort into a complex compromise plan to ensure that the EU did not have a veto over the mechanism of the UK-wide temporary customs arrangement.
You Do the Math: Can May Get Her Brexit Deal Through Parliament? - U.K. Prime Minister Theresa May is edging closer to a Brexit deal. But before anyone cracks open the English sparkling wine, she has to get it past Parliament, where she doesn’t have a majority and her Conservative Party is split. So how will she cobble together the votes? There are 650 members of Parliament in the House of Commons, known as MPs. Of these, the Speaker and his three deputies don’t vote. The seven members of Sinn Fein don’t take their seats. That leaves 639 MPs, so if everyone votes, 320 are needed for a majority. Voting With May These are the 95 Conservative MPs who have some kind of paid government job, and then around 50 more who work unpaid as a ministerial assistant. They would have to resign from this job to vote against her. These are the MPs who don’t care very much about Brexit, or want to move the national conversation on to other things, or hope to further their careers, or who are just loyal. May should be able to count on them. That’s 235. May needs another 85. Now things get hard.
UK ministers present May with ‘plan B’ for no-deal Brexit scenario: Sun (Reuters) - British cabinet ministers have drawn up a ‘plan B’ for a no-deal Brexit in case parliament votes down Prime Minister Theresa May’s proposed plan to leave the European Union, The Sun reported on Friday. The unnamed pro-Brexit ministers have briefed May on their alternative plan, the newspaper reported, without citing sources. The ministers have proposed that Britain continue to pay EU membership fees up to 2021 and follow the bloc’s rules to avoid a cliff edge exit when it leaves in March 2019, the Sun said. The country would then be able to negotiate with Brussels as a ‘third country’ for two years, making it easier to agree on a new free trade deal and avoid having to pay the full 38 billion pounds ($49 billion) divorce bill. As negotiations with Brussels enter their final fraught stage, May’s approach is under fire from all sides of the divisive Brexit debate. Many politicians are unhappy with her compromise plans to maintain the free trade of goods with the EU, which they say will leave Britain subject to decisions in Brussels without any input. If a deal is voted down by parliament, the country could be thrust into an uncertain future: leaving abruptly without a deal, the collapse of May’s government, an election, or, as some opponents of Brexit hope, a new referendum. When May was presented with the alternate proposal, she told the ministers that their plan “was not needed yet” but it was greeted with a “surprisingly warm response” from Finance Minister Philip Hammond, the Sun said.
The EU’s Brexit solution: trade between East and West Germany - Even amid the Cold War tanks, snipers and barbed wire borders, West German politicians always insisted that East Germany wasn’t a foreign country — and made sure trade continued between the two Germanys. That involved a special currency and a special commitment by politicians. Now, economists look back at that historic compromise and hope for similar will for a solution if Britain does leave the European Union. While London and Brussels reportedly mull a customs agreement, German economist Rolf Langhammer notes that European history is packed with such exceptions: Another one makes good sense. Back in the 1950s, Langhammer recalled, officials and lawmakers created a unique workaround so that all kinds of goods, from tractors to textiles, and minerals to office equipment, could pass between the two halves of Germany. There were complications, not least the fact that there were differing versions of German currency. West Germany had the Deutsche Mark. East Germany, part of the Soviet Zone of Occupation, had a currency also called the Deutschmark, but commonly known as the Ost (or east) Mark. The values of both currencies differed. So authorities created a special “clearing unit” of currency known as the VE. That unit never became a coin or note, but existed only to quantify trade between the countries in accountants’ ledgers. Special accounts were kept on both sides. That enabled trade in textiles, chemical products and farming equipment to steadily increase. West Germany received cheaper goods, particularly textiles, while East Germany was able to import some Western products by way of West Germany without spending hard currency.
Brexiteers fear price rises, not return of Irish border — Few things are likely to change the minds of the British public on Brexit — and the Irish border almost certainly isn’t one of them. While the debate in Westminster, Brussels and Dublin is now almost solely focused on efforts to avoid a hard border between Northern Ireland and the Republic of Ireland, most U.K. citizens appear largely apathetic. According to an exclusive poll for POLITICO by the consultancy Hanbury Strategy, they are far more concerned about the possible effect Brexit will have on prices in the shops. The data suggests that some potential negative outcomes of Brexit are more likely than others to make voters change their minds. And the responses of Leave supporters to the poll indicate they are particularly resistant to having a change of heart if things get rough — whatever the outcomes. Presented with a list of possible consequences of Brexit, 35 percent of Leave voters said prices going up in shops would be likely to change their opinion — the highest of any potential negative outcome. In second place, 32 percent of Leavers said staff shortages in the NHS could make them think again. But less than 22 percent of these voters said that the creation of a hard border between Northern Ireland and the Republic of Ireland would shift their stance on Brexit, while 42 percent said that it was unlikely to. The figures are based on a poll of more than 3,000 people, including 1,236 Leave voters, carried out between October 29 and November 2, which was weighted to be representative of the U.K. population. Notably, no single negative scenario — not a major recession (27.5 percent), millions of job losses (29 percent), food shortages (28 percent) or medicine shortages (30 percent) — is likely to prompt a majority of Leavers to change their mind.
With Brexit, It’s the Geography, Stupid - One of the major irritations of public discourse after the United Kingdom’s Brexit vote has been the complete poverty of analysis on the reasons behind different demographics’ voting preferences. Endless time, energy, and media attention has been afforded to squabbling over the spending of each campaign for and against continued European Union membership — and now more on the role social media played in influencing the vote — mirroring the arguments in the United States that those who voted to Leave were, like Trump voters, unduly influenced by shady political actors, with little transparency behind political ads and social media tactics.It’s a handy distraction from the root causes in the UK: widening inequality, but also an increasingly entrenched economic system that is geographically specific, meaning your place of birth and rearing has far more influence over how limited your life is than anything within your control: work, education and life choices.Across Britain, territorial injustice is growing: for decades, London has boomed in comparison to the rest of the country, with more and more wealth being sucked towards the southeast and other regions being starved of resources, jobs and infrastructure as a result. A lack of secure and well-remunerated work doesn’t just determine whether you can get by each month without relying on social security to make ends meet, but also all aspects of your health, and the health of your children. A recent report by researchers at Cambridge University examined the disproportionate effect of central government cuts on local authorities and services: inner city areas with high rates of poverty, and former industrial areas were hardest hit. Mia Gray, one of the authors of the Cambridge report said: “Ever since vast sums of public money were used to bail out the banks a decade ago, the British people have been told that there is no other choice but austerity imposed at a fierce and relentless rate. We are now seeing austerity policies turn into a downward spiral of disinvestment in certain people and places. This could affect the life chances of entire generations born in the wrong part of the country.” Life expectancy is perhaps the starkest example. In many other rich countries, life expectancy continues to grow. In the United Kingdom it is not only stalling, but in certain regions falling. The gap between the north and south of England reveals the starkest gap in deaths among young people: in 2015, 29.3 percent more 25-34-year-olds died in the north of England than the south. For those aged 35-44, the number of deaths in the north was 50 percent higher than the south.
Public urged to learn DIY surgery in run up to NHS winter crisis THE government has urged the public to learn the basics of DIY surgery ahead of the annual NHS winter crisis. As the health service prepares for its seasonal overload, citizens are to be provided with guidance on performing common surgical procedures at home. A government spokesman said: “We think people will be surprised at how easy it is to remove tonsils or an appendix at home.” The training materials will also show how to turn a plug socket into a basic defibrillator, and which kitchen implements are best to use for a caesarean. The spokesman added: “This is ultimately about empowering people. For too long, medicine has been overrun by elitist experts.” Sources say that similar ‘have-a-go’ schemes will also be rolled out in policing and firefighting.
UK students face rising debts, poor wages and further marketisation of higher education - MPs on the Commons education committee have released a report titled “Value for Money in Higher Education.” They draw attention to figures from the Office for National Statistics (ONS) that indicated 49 percent of recent graduates (within five years of achieving their degree) were in non-graduate roles in 2017.This is a significant increase over the proportion at the start of 2009, just after the 2008 financial crash, when 41 percent of recent graduates were in that position. It is matched by a very similar rise even among the population of graduates taken as a whole—including mature students—from 31 percent to 37 percent in the same years.The report stated: “Higher education institutions must be more transparent about the labour market returns of their courses.” It came with the warning that “too many universities are not providing value for money, and ... students are not getting good outcomes from the degrees for which so many of them rack up debt.”These comments reflect serious concerns about the toxic political legacy of tuition fees. But what they obscure are the deeper, more serious issues underlying the grim situation facing British students which is rooted in class exploitation.Graduate earnings have fallen considerably in real terms following the recession. The average wage for a recent graduate in 2010 was £24,000; for graduates as a whole it was £32,000. By 2017, the totals had “risen” to £25,000 and £33,000 respectively. Given the average inflation rate of around 2.86 percent over the intervening years, these represent real terms losses of four to five thousand pounds. Student debt, meanwhile, has risen to absurd levels, with the average graduate now owing over £50,000 upon graduating, rising to £57,000 for those from poorer backgrounds. The fall in real wages has taken place in the context of a supposed recovery in employment figures: unemployment rates for recent and older graduates dropped to 5 percent and 2 percent respectively last year, from 9 percent and 4 percent at a 2011 peak. The recovery, in other words, has in fact been a restructuring, based on effective pay cuts and increasingly enforced by pushing graduates into lower-skilled employment.
Homelessness in London: Rough sleeping increases, removal of families from the city doubles - New figures shed more light on London’s catastrophic housing crisis. A record number of people found sleeping rough in the capital was recorded between July and September.The first six months of the year saw a rise of almost 50 percent in the numbers of London’s homeless families being rehoused outside the city, some as far away as Cornwall and Manchester.The first six months of 2018 saw a 46 percent rise in out-of-London placements, with councils sending more than 1,200 households out of the city. Most of these placements have been to neighbouring counties like Kent and Essex, but over the last year councils have sent households to Newcastle, Cardiff and the West Midlands and as far away as Glasgow.Between April and June 2018 alone, 688 households were sent out of the capital. This is the highest rate in at least six years, up from 113 households in the first quarter of 2012-2013.London accounts for more than two-thirds of all England’s homeless households, and it is believed that the majority of those rehoused outside the city are families. Councils have a legal obligation to find them homes. This hardly alleviates the pressure on the households, as shelter provided is sometimes only for a few nights at a time.Attention has focused on the massive distances some homeless households are being sent, but local displacement has a similarly devastating effect. Westminster North Labour MP Karen Buck reported one of her constituents with a job, a 12-year-old at school and a 14-month-old baby being moved away. She told Buck she had to wake her family at 5:40 a.m. to get her daughter to school and herself to work. They got home at 9 p.m. after nearly five hours spent commuting. Greg Beales, director of campaigns at the Shelter charity, said the result was that people were often forced to quit their jobs and drop out of education. Shelter described the figures as “a damning indictment of our housing system,” pointing to the desperate need for more social housing.
The Super Rich Get Even Richer - Two reports by Swiss banks, published within a week of each other, offer further revealing evidence on the growth of a wealthy transnational overclass. Credit Suisse finds that the fortunes of the very wealthiest people in the United Kingdom (those owning over $50 million) have been growing at a much faster rate than the general population.These ultra-high-net wealth individuals (UHNWI) number 4,670, an increase of 8.5% over the year. In the United States, the number is 70,540, with over 6,000 joining that group, making it the largest such category in the world; the next is in China at 16,510. In global terms the richest 1% own just under half of total assets (see Gráinne Gilmore, “The world’s super rich populations are growing but where is growth strongest?”, KnightFrank, October 2018).In parallel, a joint UBC-PwC report focuses less on UHNWIs overall than on the seriously super-rich, the world’s dollar billionaires. They now number 2,158 and collectively increased their wealth by $1.4 trillion in the past year. Much of the growth in wealth is taking place in the United States and western Europe, but a huge change in recent years is the increasingly transnational spread of the extremely wealthy, China again being a prime example. Twelve years ago, there were just 16 billionaires in the PRC; today there are 373.Perhaps most significant is the rate of increase in wealth. In the UK in 2017, the richest 1,000 people increased their wealth collectively by £66 billion ($85bn), meaning the average individual rise in wealth was £66 million. Moreover, that figure was not exceptionally high – the previous annual jump had been even higher.The British government has long insisted that the financial crisis of 2008 and subsequent years meant that there was no alternative to its austerity policies, although the impact of that crisis had at worst a temporary and limited impact on the super-rich. Now, prime minister Theresa May says that austerity is over, but few believe her. The mood is more one of “there never was any austerity for the wealthy, only for the rest, where that is still the order of the day”.
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